Summary of latest financial results


UPM financial statements release 2022:
UPM had a pivotal year – all-time record results and poised to deliver significant growth

Q4 2022 highlights

  • Sales increased by 21% to EUR 3,231 million (2,673 million in Q4 2021)

  • Comparable EBIT grew by 42% to EUR 653 million, 20.2% of sales (461 million, 17.2%)

  • Sales prices increased in all business areas, and more than offset the negative impact of higher variable costs

  • Delivery volumes were impacted by destocking in various product value chains

  • Operating cash flow was EUR 1,576 million (406 million), further supported by cash inflow from energy hedges

  • Cash funds and unused committed credit facilities totalled EUR 6.4 billion at the end of Q4 2022

  • In December, UPM was listed on the Dow Jones European and World Sustainability Indices (DJSI) for 2022-2023 as the only company in its industry

  • In December, UPM was recognised with a triple ‘A’ score for its performance and transparent reporting on climate change, forests and water security by the global environmental non-profit CDP

  • The growth project in Uruguay is getting ready for the start-up and the new pulp terminal in the port of Montevideo is operational since October

2022 highlights

  • Sales increased by 19% to EUR 11,720 million (9,814 million in 2021)

  • Comparable EBIT increased by 42% to EUR 2,096 million (1,471 million), and was 17.9% (15.0%) of sales

  • Operating cash flow was EUR 508 million (1,250 million), impacted by cash outflows from energy hedges in highly exceptional energy markets

  • Net debt increased to EUR 2,374 million (647 million) and the net debt to EBITDA ratio was 0.94 (0.35). A significant part of the increase in net debt is temporary, due to the cash flow impacts of energy hedges and future energy generation

  • The Board has decided on a new, earnings-based dividend policy and proposes a dividend of EUR 1.50 (1.30) per share

  • UPM decided to suspend its deliveries to Russia, the purchasing of wood in Russia and the UPM Chudovo plywood mill operations

  • In April, UPM and the Paperworkers’ Union agreed on the first-ever business-specific collective labour agreements

  • In June, UPM announced the sale of the Steyrermühl site in Austria to secure competitiveness and adapt newsprint production to long-term market development

  • In August, EcoVadis recognised UPM on Platinum level based on the company’s sustainability performance

  • In September, UPM Raflatac completed the acquisition of AMC AG

Key figures

  Q4/2022 Q4/2021 Q3/2022 Q1–Q4/2022 Q1–Q4/2021
Sales, EURm         3,231         2,673         3,420         11,720         9,814
Comparable EBITDA, EURm         759         470         894         2,536         1,821
% of sales         23.5         17.6         26.1         21.6         18.6
Operating profit, EURm         675         415         781         1,974         1,562
Comparable EBIT, EURm         653         461         779         2,096         1,471
% of sales         20.2         17.2         22.8         17.9         15.0
Profit before tax, EURm         638         420         766         1,944         1,548
Comparable profit before tax, EURm         616         466         764         2,066         1,457
Profit for the period, EURm         503         340         622         1,556         1,307
Comparable profit for the period, EURm         489         373         629         1,679         1,204
Earnings per share (EPS), EUR         0.93         0.63         1.15         2.86         2.41
Comparable EPS, EUR         0.91         0.69         1.16         3.09         2.22
Return on equity (ROE), %         16.0         12.6         21.1         13.0         12.7
Comparable ROE, %         15.5         13.8         21.3         14.0         11.7
Return on capital employed (ROCE), %         15.0         12.7         18.7         12.8         12.4
Comparable ROCE, %         14.5         14.1         18.6         13.6         11.7
Operating cash flow, EURm         1,576         406         -201         508         1,250
Operating cash flow per share, EUR         2.95         0.76         -0.38         0.95         2.34
Equity per share at the end of period, EUR         23.44         20.34         22.35         23.44         20.34
Capital employed at the end of period, EURm         17,913         13,759         18,052         17,913         13,759
Net debt at the end of period, EURm         2,374         647         3,133         2,374         647
Net debt to EBITDA (last 12 months)         0.94         0.35         1.39         0.94         0.35
Personnel at the end of period         17,236         16,966         17,289         17,236         16,966

Jussi Pesonen, President and CEO, comments on the results:

“2022 was a pivotal year for UPM. We delivered all-time high annual sales and earnings, driven by success across all of our businesses. At the same time, our transformative growth projects proceeded as planned, getting ready to deliver growth already this year. This remarkable achievement shows UPM’s resilience in an exceptional environment marked by high inflation, Russia’s war in Ukraine, and the European energy crisis. These challenges were met with commercial and operational agility. I am very proud of the company and all UPMers.

Results for Q4 were excellent, too. The quarter was the second best-ever quarter for the company, paling by comparison only to the previous quarter. Quarterly sales grew by 21% to EUR 3,231 million, and comparable EBIT increased by 42% to EUR 653 million. Operating cash flow was EUR 1,576 million, which this time was positively impacted by cash inflow from energy hedges.

Our net debt at the end of the year was EUR 2,374 million. The net debt to EBITDA ratio was 0.94, at a good level. Cash funds and unused committed credit facilities at the end of the year totalled EUR 6.4 billion. Our financial position is therefore very strong.

In most businesses, margins continued to improve even from the record strong Q3. As a result, prices and margins in Q4 were at record highs. Towards the end of the year, we saw significant destocking in many product value chains, especially in Europe, which held our delivery volumes back in UPM Communication Papers, UPM Raflatac and UPM Specialty Papers. However, in UPM Communication Papers the effects of destocking were offset by declining input costs, especially energy costs, bringing about excellent Q4 earnings.

UPM Energy reported excellent results, however they were down from Q3 and from the same quarter of the previous year. The energy crisis in Europe eased somewhat during Q4, and the electricity markets functioned well, allowing Finland and Sweden to enjoy the lowest annual average prices in Europe. The OL3 nuclear power plant unit was still in the testing phase with very limited contribution to our volumes. The unit is expected to reach commercial production in March, increasing UPM Energy’s CO2-free electricity output by nearly 50%.

UPM Fibres’ quarterly results reflect high pulp prices but were impacted by rising input costs and the maintenance shutdown of the UPM Fray Bentos pulp mill in Uruguay. Sales prices in sawn timber were affected by the slowdown in construction end-uses.

UPM Plywood finished its record-breaking year with a solid quarter. The markets in industrial applications remained strong, whereas markets in construction end-uses slowed down.

In Other businesses, UPM Biofuels achieved excellent quarterly earnings. The business achieved record results for the full year, despite the Lappeenranta biorefinery having only been operational for seven months.

Our large investment project in Uruguay is nearing completion. The pulp terminal in Montevideo was inaugurated in October, and the construction of the Paso de los Toros pulp mill was finalised at the turn of the year. The mill is now solidly on track in the commissioning stage and the start-up will take place by the end of Q1. The cash cost level of approximately USD 280 per delivered tonne of pulp will make it one of the most competitive pulp mills in the world and increase our pulp output more than 50% to 5.8 million tonnes annually.

In UPM Biorefining, the biochemicals refinery project in Leuna, Germany, is progressing at a good pace. There is a keen interest in the products of the new biorefinery, confirming the business opportunity and growth strategy to replace fossil- based materials with renewable alternatives for many end-uses. Detailed commercial and basic engineering studies of the potential biofuels refinery in Rotterdam continues at intensive pace.

Stakeholder interest in mitigating climate change and fostering biodiversity has been growing year on year. UPM has ambitious, science-based targets and a strong track record of tangible actions in both respects. In Q4 our performance and transparent reporting on climate change, forests and water security was recognised with a triple ‘A’ score by the global environmental non-profit CDP. We were also listed on the Dow Jones European and World Sustainability Indices (DJSI) for 2022–2023 as the only company in our industry. Responsibility is an integral part of our Biofore strategy and a driver for future success.

The Board has decided on a new, earnings-based dividend policy in line with our transformative growth strategy. With confidence in our financial position and future earnings, UPM’s Board of Directors has today proposed a dividend of EUR 1.50 (1.30) per share for 2022 to our Annual General Meeting.

Outlook for 2023

UPM reached record earnings in 2022, and 2023 is expected to be another year of strong financial performance. UPM’s comparable EBIT is expected to increase in H1 2023 from H1 2022.

In 2023, UPM’s delivery volumes are expected to benefit from the ramp up of the UPM Paso de los Toros pulp mill and the OL3 nuclear power plant unit and having no strike impact when compared to 2022. In the early part of the year, however, demand for many UPM products is expected to be held back by destocking in various product value chains. The opening of the Chinese economy from the COVID lockdowns and easing inflation in other key economies represent potential for increasing demand as the year progresses.

Year 2023 is starting with high cost level for many inputs, while the lower demand is exerting pressure on product prices. However, several input costs have also progressed past their peak. UPM will continue to manage margins with product pricing, by optimising its product and market mix and by taking measures to improve variable and fixed cost efficiency.

There are significant uncertainties, both positive and negative, in the outlook for 2023, related to the European, Chinese and global economy, Russia’s war in Ukraine, the remaining effects of the pandemic, energy prices and related regulation in Europe, and the ramp-up of the OL3 power plant unit.

Impact of COVID-19 pandemic

The COVID-19 pandemic, the related containment measures around the world and the rapid changes in the global economy impacted the operating environment also in 2022 and continue to represent uncertainty.

Global economy

The COVID-19 pandemic and the related containment measures resulted in a sharp decline in the global economy in 2020. In 2021, the global economy started to recover, but it is uncertain how long-lasting the recovery will be. Despite progress with vaccinations, additional waves of the pandemic in different parts of the world remain possible.

The recovery of the global economy from the deep downturn in 2020, combined with the ongoing pandemic created tightness and disruptions globally in many supply chains, including logistics and energy. This caused rising costs and uncertainty about the price and availability of many raw materials and energy. China adopted a zero-covid policy that held back its economic growth through 2022. However, it opened up restrictions in December. This represents uncertainties regarding surging infections in the country, but also represents the potential to increase economic activity.

Safety and business continuity

UPM has implemented extensive precautions to protect the health and safety of its employees and to ensure business continuity and the progression of its strategic projects during the pandemic. Despite these efforts, the operation of one or more units or the supply chain and logistics could be temporarily disrupted during the pandemic, the related lockdown measures, or the following economic recovery. In these circumstances some units may need to limit operations or be temporarily shut down. So far UPM has been able to protect its business continuity well.

Demand for UPM products

Many of UPM's products serve essential everyday needs and have therefore seen resilient demand during the crisis. These products include pulp, specialty papers and self-adhesive label materials. However, even in these businesses, demand is influenced by general economic activity, and any re- or destocking cycles in product value chains.

Demand for graphic papers is more prone to be impacted by lockdowns and economic cycles. Lockdowns limit a wide range of consumer-driven services and retail, as well as work at the office. This has had a negative impact on printed advertising and graphic paper demand during the pandemic.

Lockdowns and the level of economic activity may also influence demand for electricity, plywood and sawn timber.

Adjusting to different scenarios

The potential impacts on UPM are likely to differ by business and phase and waves of the pandemic, lockdown measures, changes in consumer behaviour, and the recession and recovery thereof. UPM has used shift arrangements, temporary lay-offs, or reduced working hours as required to adjust its operations in different scenarios.

Projects and maintenance shutdowns

The pandemic and the required health and safety measures add challenges to large investment projects and maintenance shutdowns. UPM's transformative pulp project in Uruguay and biochemicals project in Germany are proceeding with strict health and safety controls. Despite these efforts, some changes to the detailed timeline and costs of such projects are possible during the pandemic, the related containment measures, or due to tight global logistics and supply chains.

Timing of significant maintenance shutdowns in 2023


UPM’s financial position is strong. UPM's net debt was EUR 2,374 million at the end of Q4 2022. Net debt has been impacted by energy hedging derivative market value payments, which are driven by the increase in energy futures prices and volatility in the energy markets. Cash funds and unused committed credit facilities totalled EUR 6.4 billion at the end of Q4 2022. The total amount of committed credit facilities was EUR 5.7 billion of which EUR 4.5 billion maturing in 2024, EUR 300 million maturing in 2025 and EUR 950 million maturing in 2027. The facilities and UPM's outstanding debt have no financial covenants.

Impact of the Russia's war in Ukraine

In response to Russia´s attack on Ukraine, the European Union as well as the United States, the United Kingdom, and other countries have imposed extensive sanctions on Russia, the breakaway regions Donetsk and Luhansk and more recently the oblasts of Zaporizhzhia and Kherson, and Belarus. Since 21 February 2022, these measures include for example asset freezes and travel restrictions on individuals and entities, economic sanctions targeting sectors of the Russian and Belarusian economies, and diplomatic restrictions. Russia has also implemented several countermeasures affecting especially foreign companies’ operations within Russia and with Russian counterparties. Further escalation of the conflict has involved Russia’s attempted illegal annexation of four partially occupied regions in Ukraine based on sham referenda, mobilisation of military reservists in Russia, issuance of open nuclear threats and explosions in Russia-to-Germany gas pipelines under the Baltic Sea, which have all increased geopolitical tensions between Russia and several other countries and triggered further sanctions packages against Russia.

Global economy

While the sanctions primarily target Russia’s ability to finance its military operations in Ukraine and cause economic and political costs on the people responsible for them, economic and geopolitical uncertainty and inflation may accelerate around the world. Import bans on various goods categories will restrict the availability of raw materials and drive cost and lead time increases in many supply chains that have been under increasing pressure during the COVID-19 pandemic. Export bans will impact industries dependent on Russian markets and shift delivery volumes and services to other markets. Fuel prices are exposed to geopolitical uncertainties. Because of Russia’s attack on Ukraine, the sanctions imposed on the Russian energy sector and Russia’s countermeasures on gas and electricity deliveries, energy price levels and volatility may increase, especially in Europe if the scope of EU sanctions expands to further fossil fuels such as natural gas.

Impact on UPM businesses

The EU has imposed export and import bans on several forest industry product categories, prohibitions on Russian transportation operators entering the EU and has sanctioned several Russian banks. Disruptions in international sales, purchases and payment flows involving Russian counterparties are inevitable. The EU has also imposed restrictions on Russian seaborne crude oil, certain petroleum products and oil transportation services and agreed in December 2022 to impose a cap of USD 60 per barrel on the price of Russian oil. Russia has also introduced legislation restricting non-Russian companies to repatriate dividends and loan payments and has caused friction in collecting customer payments from Russia. Russia has also restricted or suspended the flow of natural gas or electricity from Russia. These restrictions have impacted several European countries where UPM has production locations and caused increases in the price of power and gas. The unprecedented increase in energy futures prices has impacted cash flows from energy hedges, temporarily tying liquidity. EU energy ministers also adopted a new temporary regulation (applicable from 1 December 2022 to 30 June 2023) on the reduction of electricity use, the capping of revenues of electricity producers, and mandatory solidarity contributions from fossil fuel businesses. To implement the revenue cap of electricity producers, on 29 December 2022 the Finnish government has made a proposal for an additional profit tax on energy companies, commonly referred to as the windfall tax. The additional and temporary 30% tax would apply to Finnish electricity generating companies’ profits exceeding a 10% return on adjusted shareholder’s equity in the fiscal year 2023. According to the proposal, group internal electricity profits would not be taken into account when calculating the taxable net profit for the temporary profit tax. The government proposal is still in the parliamentary decision- making process and the final decision is expected by the end of February 2023 at the earliest. Major forest certification organisations (i.e. FSCTM and PEFC) have also excluded Russian and Belarusian wood from their certification systems. UPM businesses have suspended deliveries to Russia as well as wood sourcing in and from Russia. UPM also decided to suspend the UPM Chudovo plywood mill operations. UPM Raflatac’s Kiev terminal has been closed down since March 2022 until further notice. Due to the significant uncertainties related to operations in Russia and Ukraine, UPM recognised a write off of all operating assets and uninsured receivables locating or relating to operations in these countries in Q1 2022. Impairment of fixed assets, inventories and other receivables amounting to EUR 95 million was reported as items affecting comparability. In addition, in Q1 the group increased the general provision for expected credit losses on trade receivables by EUR 17 million, which is impacting comparable EBIT. At the end of 2022, the impairment was EUR 80 million and the credit loss provision was EUR 8 million. UPM’s sales to Russia and Ukraine combined was in 2022 less than 1% (2.3%) of UPM’s total sales. Assets in Russia were less than 1% of the group total assets. In 2022, 3% (less than 10%) of UPM’s wood sourcing to Finland originated from Russia.

Adjusting to different scenarios

The full impact of current and possible new sanctions, counter- sanctions and market development will be known only as the situation evolves. UPM has implemented mitigation plans to contain and reduce the negative consequences for its employees, customers, vendors, and other stakeholders as well as operations affected by sanctions and the war in Ukraine in general. The potential further impacts for UPM are likely to differ by business and by the pace, scope and duration of sanctions, market price reactions, development of supply chains, and the length of the war in Ukraine and whether any geographic escalation of the war develops. UPM is monitoring the situation closely and preparing plans to adjust its operations in different scenarios accordingly.


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Page modified 14.03.2023