Summary of latest financial results


UPM Interim Report  Q3 2018:
Strong quarter sets a new benchmark for UPM’s performance

Q3 2018 highlights

  • Sales grew by 6% to EUR 2,650 million (2,493 million in Q3 2017).
  • Comparable EBIT increased by 20% to EUR 420 million (351 million).
  • Sales prices increased in all business areas, outweighing the impact of higher input costs. 
  • Temporary operational issues in UPM Communication Papers and UPM Biorefining had a EUR 30 million negative impact. 
  • Operating cash flow was strong at EUR 434 million (486 million). 

Q1-Q3 2018 highlights


  • Comparable EBIT increased by 20% to EUR 1,109 million (926 million in Q1-Q3 2017).
  • Sales prices increased in all business areas, outweighing the impact of higher input costs and unfavourable currency exchange rates.
  • UPM paid a dividend of EUR 613 million.
  • Net debt decreased to EUR 4 million (623 million).
  • UPM initiated focused investments in Germany, Finland and China, to grow in the attractive release liner segments.
Key figures Q3/2018 Q3/2017 Q2/2018 Q1-Q3/2018 Q1-Q3/2017 Q1-Q4/2017
Sales, EURm 2,650 2,493 2,589 7,752 7,439 10,010
Comparable EBITDA, EURm 487 425 425 1,362 1,180 1,631
  % of sales 18.4 17.1 16.4 17.6 15.9 16.3
Operating profit, EURm 417 379 349 1,151 960 1,259
Comparable EBIT, EURm 420 351 334 1,109 926 1,292
  % of sales 15.9 14.1 12.9 14.3 12.4 12.9
Profit before tax, EURm 401 357 337 1,108 914 1,186
  Comparable profit before tax, EURm 404 328 322 1,067 878 1,218
Profit for the period, EURm 328 286 269 905 730 974
Comparable profit for the period, EURm 330 267 258 875 707 1,004
Earnings per share (EPS), EUR 0.61 0.54 0.50 1.69 1.37 1.82
  Comparable EPS, EUR 0.61 0.50 0.48 1.64 1.32 1.88
Return on equity (ROE), % 14.5 13.9 12.1 13.5 11.7 11.5
Comparable ROE, % 14.6 13.0 11.6 13.0 11.4 11.9
Return on capital employed (ROCE), % 16.7 14.8 14.2 15.3 12.2 12.5
Comparable ROCE, % 16.8 13.6 13.6 14.8 11.7 12.8
Operating cash flow, EURm 434 486 329 970 1,151 1,558
Operating cash flow per share, EUR 0.81 0.91 0.62 1.82 2.16 2.92
Equity per share at end of period, EUR 17.21 15.61 16.37 17.21 15.61 16.24
Capital employed at the end of period, EURm 9,942 10,098 9,691 9,942 10,098 9,777
Net debt at the end of period, EURm 4 623 401 4 623 174
Net debt to EBITDA (last 12 m.) 0.00 0.41 0.23 0.00 0.41 0.11
Personnel at the end of period 19,076 19,335 19,836 19,076 19,335 19,111

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


"The third quarter was excellent and sets a new benchmark for our performance. Our customer demand continued to be healthy and we were able to increase sales prices in nearly all businesses. In five of our six business areas, the price increases were sufficient to cover the impact of higher input costs. Our business model continues to deliver results.

Our sales grew by 6% and comparable EBIT increased by 20% to EUR 420 million. Our comparable EBIT margin reached 15.9% illustrating well our current performance level compared to the first half of the year. Operating cash flow was strong and our balance sheet was practically debt-free at the end of the quarter.

The biggest improver was UPM Biorefining, which achieved record quarterly earnings. Pulp, Biofuels and Timber all achieved higher prices. Biofuels reached a new level of production after the turnaround shutdown in Q2. However, our pulp deliveries were held back by temporary production issues at the Fray Bentos mill, where thunderstorms caused four production shutdowns during the quarter.

UPM Communication Papers overcame higher input costs and lower deliveries with higher pricing and reported good, stable earnings. Unfortunate turbine damage and downtime at the Plattling mill caused extra costs, particularly as electricity prices were high. UPM Energy benefitted from the higher electricity prices, and increased its earnings even though dry weather limited our hydropower generation.

UPM Raflatac and UPM Plywood performed steadily. They were able to raise sales prices and offset the cost increases. Both also encountered some headwind from unfavourable currencies.

UPM Specialty Papers experienced a negative earnings development despite solid demand. The main reason for this was the continued increase in pulp costs. In label papers we were able to raise prices, but not sufficiently to fully compensate for the increase in pulp costs. In fine papers, prices decreased due to additional market supply in China.

Our transformative prospects provide us with unique and exciting opportunities for significant long-term earnings growth. In Uruguay, preparations for the potential new world-class pulp mill are proceeding. The rail tendering process is in its final stages and the port concession tendering has started. UPM has submitted the Environmental and Social Impact Study for the mill to the authorities. Engaging in active dialogue with local stakeholders has been an important part of the process. Next we expect tangible progress in infrastructure construction and labour protocols.

Preparations are also ongoing in our attractive biomolecular businesses. In UPM Biochemicals, we are continuing the basic engineering work for the potential first industrial-scale biochemical refinery in Germany. In UPM Biofuels, we completed the Environmental Impact Assessment for a possible Kotka Biorefinery in Finland and submitted it to the authorities for their final conclusions.

Overall, UPM is in great shape and ready to grasp the limitless opportunities that bioeconomy offers for value creation and business growth. We believe that growing sustainable businesses can offer solutions to the global challenges such as resource scarcity and climate change. During the quarter, our responsible business conduct as well as our efforts to deliver responsible solutions were recognized by United Nations Global Compact and Dow Jones Sustainability Indices. Our innovations create value and business opportunities for an era when the world is no longer dependent on fossils."

Outlook for 2018

UPM's comparable EBIT is expected to continue growing in 2018 compared with 2017. H2 2018 comparable EBIT is expected to be significantly higher compared with H1 2018.

The fundamentals for UPM businesses in 2018 are favourable. Sales price increases in 2018 are expected to outweigh the increase in variable costs, compared with 2017.


Investor Relations contacts: +358 (0)204 15 0033, ir@upm.com