Summary of latest financial results


UPM financial statements release 2023: 
UPM’s earnings recovery continued in Q4, growth projects set to deliver

Q4 2023 highlights

  • Sales decreased by 22% to EUR 2,531 million (3,231 million in Q4 2022)
  • Comparable EBIT decreased by 51% to EUR 323 million, 12.8% of sales (653 million, 20.2%)
  • Operating cash flow was EUR 456 million (1,576 million), supported by cash inflow from working capital
  • Net debt was EUR 2,432 million (2,374 million) and the net debt to EBITDA ratio was 1.55 (0.94)
  • Pulp and electricity sales prices significantly lower than in the previous year, impacting UPM Fibres and UPM Energy. Successful margin management in other business areas
  • Demand for many of UPM's products continued to gradually recover from previous quarters
  • UPM Paso de los Toros pulp mill and the OL3 nuclear power plant unit contributed significantly to UPM's deliveries
  • Permanent closure of UPM Plattling paper mill, Germany in November and the sale of the Steyrermühl site, Austria in January 2024
  • In December, UPM was listed as the only forest and paper industry company in the Dow Jones Global and European Sustainability Indices (DJSI) for the years 2023–2024

2023 highlights

  • Sales decreased by 11% to EUR 10,460 million (11,720 million in 2022)
  • Comparable EBIT decreased by 52% to EUR 1,013 million (2,096 million), and was 9.7% (17.9%) of sales
  • Operating cash flow was record strong at EUR 2,269 million (508 million), supported by cash inflow from energy hedges
  • Cash funds and unused committed credit facilities totalled EUR 3.6 billion at the end of 2023
  • The Board proposes a dividend of EUR 1.50 (1.50) per share for 2023
  • UPM Paso de los Toros pulp mill in Uruguay started production in Q2 2023
  • The OL3 nuclear power plant unit began regular commercial electricity production in Q2 2023
  • UPM Leuna biochemicals refinery project is progressing at full speed
  • Permanent closures of PM6 at UPM Schongau, Germany, PM4 at UPM Steyrermühl, Austria and UPM Plattling paper mill, Germany
  • UPM received platinum in the EcoVadis responsibility assessment with a high industry score
  • UPM joined the UN Global Compact Forward Faster Initiative

Key figures

  Q4/2023 Q4/2022 Q3/2023 Q1–Q4/2023 Q1–Q4/2022
Sales, EURm         2,531         3,231         2,584         10,460         11,720
Comparable EBITDA, EURm         465         759         376         1,573         2,536
% of sales         18.4         23.5         14.6         15.0         21.6
Operating profit (loss), EURm         211         675         -29         608         1,974
Comparable EBIT, EURm         323         653         220         1,013         2,096
% of sales         12.8         20.2         8.5         9.7         17.9
Profit (loss) before tax, EURm         180         638         -52         464         1,944
Comparable profit before tax, EURm         293         616         196         934         2,066
Profit (loss) for the period, EURm         161         503         -28         394         1,556
Comparable profit for the period, EURm         248         489         149         755         1,679
Earnings per share (EPS), EUR         0.30         0.93         -0.05         0.73         2.86
Comparable EPS, EUR         0.46         0.91         0.28         1.40         3.09
Return on equity (ROE), %         5.5         16.0         -0.9         3.2         13.0
Comparable ROE, %         8.5         15.5         5.1         6.2         14.0
Return on capital employed (ROCE), %         5.9         15.0         -0.5         3.5         12.8
Comparable ROCE, %         8.9         14.5         6.0         6.4         13.6
Operating cash flow, EURm         456         1,576         641         2,269         508
Operating cash flow per share, EUR         0.85         2.95         1.20         4.25         0.95
Equity per share at the end of period, EUR         20.93         23.44         21.42         20.93         23.44
Capital employed at the end of period, EURm         14,916         17,913         15,171         14,916         17,913
Net debt at the end of period, EURm         2,432         2,374         2,363         2,432         2,374
Net debt to EBITDA (last 12 months)         1.55         0.94         1.27         1.55         0.94
Personnel at the end of period         16,573         17,236         16,831         16,573         17,236

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

"UPM delivered solid 2023 results in a very challenging operating environment as the world went through an exceptional economic cycle. During the first half of the year, we experienced an exceptionally sharp downturn, especially in European markets. Unprecedented destocking significantly affected market deliveries and was combined with falling pulp and energy prices. As the year progressed, there were signs of gradual recovery in many product markets, and we were able to deliver improving earnings.

Our Q4 comparable EBIT increased when compared to the previous quarter by 47% to EUR 323 million and comparable EBIT margin was at a good level of 12.8%.

Looking at full year 2023, we succeeded well in margin management and took decisive action to reduce variable and fixed costs and to adjust our capacity to the low demand. Cash flow was at a record level, and our financial position is strong.

The highlight of the year was the completion of two of our transformative investments that will generate material growth and value for years to come. The UPM Paso de los Toros pulp mill in Uruguay started production in Q2. During the same quarter, the OL3 nuclear power plant unit in Finland began commercial production. These milestone investments increased our pulp and energy capacity by about 50% and contributed to our deliveries already during the second half of the year.

UPM Communications Papers achieved strong results in Q4 and the full year 2023. The business generated a record-high cash flow and strong results despite low capacity utilisation rates. Margin management was successful, cost containment actions were taken, and production capacity was aligned to low demand. In November, UPM Plattling in Germany was closed permanently. In 2023, the annual energy-related refunds in Europe particularly contributed to Q4 earnings.

UPM Fibres’ results improved in comparison to the previous quarter as market prices for pulp were on the rise and variable costs decreased. Production at the UPM Paso de los Toros pulp mill remained at the same level as in Q3 due to ramp-up issues. The issues holding back production in Q4 have been resolved and 2024 has started with good production volumes. The mill’s production reached about 850,000 tonnes in 2023 and this is expected to more than double over the course of 2024. The mill was EBITDA positive in H2 2023 and is expected to turn EBIT positive during H1 2024.

Modest improvement in market demand continued for our two businesses in the packaging value chain as destocking is largely over. UPM Specialty Papers’ results improved and were at a good level. UPM Raflatac’s performance was seasonally weaker, and the business continued cost reductions and adjusting capacity to current demand.

UPM Energy’s results were stronger than in the last two quarters, as energy consumption and prices increased due to wintry weather across the Nordic region. Our hydro and nuclear power generation volumes were good. As was the case for the entire year, energy consumption in Europe was exceptionally low and prices were much lower than in the previous year.

UPM Plywood’s results were stable in slow markets. The business implemented temporary layoffs at all mills to align capacity to demand.

In Other operations, prices developed unfavourably for UPM Biofuels. On a positive note, UPM Biofuels initiated proceedings to qualify its renewable fuel as sustainable aviation fuel. The detailed commercial and basic engineering phase of the potential Rotterdam biorefinery continues.

Our transformative biochemicals refinery project in Leuna, Germany, is progressing at full speed. We are excited about our partnerships, which confirm the keen interest in wood-based products of our new biorefinery. The start of production by the end of 2024 will be one of the highlights of this year.

Our products enable customers and consumers to achieve their sustainability targets, and here we have a strong track record of tangible actions. In Q4, we were again listed on the Dow Jones Global and European Sustainability Indices for 2023–2024 as the sole company in our industry. We updated our Green Finance Framework and received the highest possible rating for it. Earlier in the year, we joined the UN Global Compact Forward Faster Initiative to accelerate our progress towards the UN Sustainable Development Goals.

All in all, 2023 was tough in many ways, particularly in the first half. I would like to thank all UPMers for their perseverance and contribution to our solid results under these exceptional circumstances. Now at the beginning of 2024, our operating environment remains marked by uncertainties in the global economy and geopolitics. At UPM, we focus on performance, margin management and making sure our growth investments deliver. We are well positioned for when the markets recover; and we have an excellent operating model and platforms for growth in place. Together with all UPMers, we will continue to create a future beyond fossils and long-term value for our stakeholders.

Confident in the company’s strong financial position and future performance, UPM’s Board of Directors has today proposed a dividend of EUR 1.50 (1.50) per share for 2023 to our Annual General Meeting."

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 largely over. The year starts 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 H1 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 01.03.2024