Summary of latest financial results


UPM Interim Report Q1 2024: 
A positive start to the year, growth investments contributed to earnings

Q1 2024 highlights

  • Sales decreased by 5% to EUR 2,640 million (2,787 million in Q1 2023)
  • Comparable EBIT decreased by 6% to EUR 333 million, 12.6% of sales (356 million, 12.8%)
  • Operating cash flow was solid at EUR 335 million (714 million), including seasonal increase in working capital
  • Net debt was EUR 2,312 million (2,167 million) and the net debt to EBITDA ratio was 1.46 (0.82)
  • Successful margin management and recovering market demand continued in most businesses
  • UPM Paso de los Toros pulp mill reached positive Q1 EBIT, production at 83% of capacity
  • Sale of the Steyrermühl site, Austria in January
  • CDP recognised UPM with double ‘A’ score for transparency on climate change and forests

Key figures

  Q1/2024 Q1/2023 Q4/2023 Q1–Q4/2023
Sales, EURm         2,640         2,787         2,531         10,460
Comparable EBITDA, EURm         489         477         465         1,573
% of sales         18.5         17.1         18.4         15.0
Operating profit (loss), EURm         354         318         211         608
Comparable EBIT, EURm         333         356         323         1,013
% of sales         12.6         12.8         12.8         9.7
Profit (loss) before tax, EURm         332         239         180         464
Comparable profit before tax, EURm         311         344         293         934
Profit (loss) for the period, EURm         279         183         161         394
Comparable profit for the period, EURm         258         281         248         755
Earnings per share (EPS), EUR         0.51         0.33         0.30         0.73
Comparable EPS, EUR         0.47         0.51         0.46         1.40
Return on equity (ROE), %         9.6         5.7         5.5         3.2
Comparable ROE, %         8.9         8.7         8.5         6.2
Return on capital employed (ROCE), %         9.6         6.0         5.9         3.5
Comparable ROCE, %         9.1         8.4         8.9         6.4
Operating cash flow, EURm         335         714         456         2,269
Operating cash flow per share, EUR         0.63         1.34         0.85         4.25
Equity per share at the end of period, EUR         21.42         23.42         20.93         20.93
Capital employed at the end of period, EURm         15,028         16,478         14,916         14,916
Net debt at the end of period, EURm         2,312         2,167         2,432         2,432
Net debt to EBITDA (last 12 months)         1.46         0.82         1.55         1.55
Personnel at the end of period         16,132         16,985         16,573         16,573

Massimo Reynaudo, President and CEO, comments on the results:

“In Q1, recovering demand and continued successful margin management resulted in improved earnings compared to previous quarters. The destocking that characterised last year was over for all our businesses and most of them improved their performance from Q4. In addition, our transformative growth investments, UPM Paso de los Toros and OL3, delivered good contribution to earnings.

Our sales were EUR 2,640 million and our comparable EBIT was EUR 333 million, broadly at similar levels as in the comparison quarters. Our operating cash flow was solid at EUR 335 million and our net debt decreased to EUR 2,312 million during the quarter.

In UPM Fibres, profitability improved. Market demand for pulp was good and prices increased from Q4. We were able to serve our customers with 71% higher deliveries compared to last year. UPM Paso de los Toros ramp-up is progressing well, Q1 production reached 83% of capacity and EBIT was positive. An important step was taken right after the end of the quarter, when the railway from the mill to the port of Montevideo was put into use.

Profitability and volumes for UPM Specialty Papers and UPM Raflatac, our two businesses in the packaging value chain, continued to recover well from last year’s sharp fall. At the same time, the businesses have taken good care of margins, as reflected in their good results.

UPM Energy achieved its best Q1 results so far. Cold winter weather in the first months of the year boosted electricity consumption seasonally, supporting market prices. We also succeeded well in hydropower optimisation. In strong markets the OL3 nuclear power plant unit proved its importance for the electricity system and contributed well to our earnings.

UPM Communication Papers continued to perform well. In Q1, overall demand for graphic papers in Europe was slightly higher than a year ago, but sales prices were clearly lower. The business continued its cost reduction actions. We completed the sale of the UPM Steyrermühl paper mill.

In UPM Plywood, destocking in the markets ended, leading to some improvement in deliveries of spruce plywood. The business aligned production to market demand with temporary layoffs.

In other operations, the European market for advanced renewable fuels was soft. Biofuel sales prices decreased, while input costs remained elevated.

UPM operations in Finland were impacted by the political strikes in March and early April. We were not a party to this political dispute but were affected by the resulting logistical blockade. Production in most of our paper and pulp mills was suspended and all businesses experienced disruptions in logistics. We succeeded well in mitigating the impact of the strikes by managing inventories and serving customers from mills outside of Finland. The result impact was therefore modest and is split over Q1 and Q2.

UPM Biochemicals is progressing at full speed towards starting production in the Leuna biorefinery and launching the biochemicals business by the end of the year. The first parts of the biorefinery have been commissioned, and the commercial interest for the wood-based products remains high.

Meanwhile, the detailed commercial and basic engineering phase of the potential biorefinery in Rotterdam, the Netherlands, continues.

UPM’s dedication to sustainability has earned us recognition as an industry leader in international indices assessing various aspects of responsibility. Sustainability underpins everything we do; from the fibre we source to our ambitious, science-based emission reduction targets. This dedication was recognised again in February when the CDP awarded us a double ‘A’ score for transparency on climate change and forests.

Q1 was a positive start to 2024, underpinning our confidence for the full year. Our product markets are recovering, and our businesses are driving performance in the improving business environment. In Q2 several assets will undergo planned maintenance shuts, impacting short-term performance. In contrast, in the second half of the year, we anticipate a good uninterrupted run that will support our results.

UPM is in strong shape financially, with a portfolio of competitive businesses in growing markets supported by global megatrends. I look forward to opening the next chapter in UPM growth, while we deliver consistent strong performance."

Outlook for 2024

UPM’s full-year 2024 comparable EBIT is expected to increase from 2023, supported by higher delivery volumes, continued ramp-up and optimisation of the UPM Paso de los Toros pulp mill and lower fixed costs.

Demand for many UPM products is expected to continue to improve gradually as the destocking seen in 2023 is over. The year has started with lower price level for advanced renewable fuels than last year. UPM continues to manage margins and take actions to reduce variable and fixed costs.

In H1 2024, comparable EBIT is expected to be lower than in H2 2023, due to the timing of the energy-related refunds in Q4 2023 and unusually high maintenance activity in Q2 2024. Planned maintenance shutdowns will take place in UPM Paso de los Toros, UPM Fray Bentos and UPM Pietarsaari pulp mills and all three units of the Olkiluoto nuclear power plant.


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Page modified 25.04.2024