Determinedly toward the future
UPM demonstrated resilience and decisiveness in 2025. In an exceptionally turbulent environment, we maintained our focus on competitiveness and strategic choices.
In 2025, we continued our strategic renewal despite the turbulent business environment caused by the escalating geopolitical and trade tensions. Toward the end of the year, the market environment started to stabilize, and our actions to strengthen our competitiveness yielded visible performance improvements in most of our businesses. We finished the challenging year on a positive note, with strong cash flow and improved performance.
In challenging markets, our comparable EBIT decreased by 25% from the previous year to €921 million, representing 9.5% of sales. Our operating cash flow and financial position remained solid.
Transformative portfolio choices
We continued our strategic transformation with major portfolio decisions. During the first half of the year, we strengthened our position in adhesive materials with the acquisition of Metamark, sharpened our
growth strategy in biofuels and discontinued developing the biorefinery in Rotterdam.
In September, we started a strategic review of our plywood business, which has demonstrated robust performance and resilience over economic cycles. Through this review, we aim to determine the most beneficial future alternatives for the business and UPM shareholders.
In December, we announced our plans for the graphic paper business: a Joint Venture that would encompass the UPM Communication Papers business and Sappi's graphic paper operations in Europe.
UPM has a strong heritage in graphic papers, and we are extremely proud of it. Over the years, we have transformed into a global leader with multiple businesses. The planned Joint Venture would start a new era in our transformation while continuing to provide the best possible future for the graphic paper business and its customers.
These portfolio initiatives would change the company’s profile, increase our growth focus, and improve margins and leverage. In the future, UPM would have an attractive portfolio of businesses in growing markets, with a record of consistently exceeding GDP growth.
Growth potential in decarbonization solutions
UPM Energy’s CO₂-free power generation assets supply reliable base load with nuclear power and value-adding balancing power with hydropower. As the second-largest electricity producer in Finland, the business is well-positioned to meet the growing need for reliable, CO₂-free electricity.
Our next generation renewables pave the way for future growth:
UPM Biofuels has a solid market position in the European advanced renewable fuels market. This makes the business well positioned to seek targeted growth through potential debottlenecking and possible entry into the sustainable aviation fuels market. In 2025, the business improved its performance, returning to EBIT profitability thanks to excellent production efficiency and improved market conditions.
In UPM Biochemicals, we have made significant progress in this exciting new business. We successfully ramped up the first core processes at the Leuna biorefinery, and we are now operating commercially. Customer interest and the qualification pipeline continue to exceed the annual capacity. The business is expected to reach full production and positive EBIT during 2027.
Focused growth with advanced materials
Our advanced materials businesses offer technically demanding materials for growing end uses. These businesses require less capital than other UPM businesses and can pursue focused growth in the coming
years.
UPM Adhesive Materials grew faster than the market, and ongoing efficiency measures are improving performance and capturing growth. The business has strengthened its presence in the U.S. and Southeast Asia and gained a solid position in the attractive graphic solutions sector.
UPM Specialty Materials has a strong global position in flexible packaging, labeling and
industrial release liners, as well as fine papers in the Asia-Pacific region. With a strong customer focus and technical capabilities, the business is seeking growth in specialized applications and adjacent opportunities.
Maximizing value creation with renewable fibres
Thanks to our major investments in the highly competitive Fibres South platform, we now have world-class pulp assets, sustainable and productive plantations, and efficient logistics infrastructure. In 2025, Fibres South performed strongly despite unfavorable market conditions.
Fibres North complements our pulp offering with high-quality softwood pulp, with well-managed assets and flexible operating mode that enables competitiveness. Our strategic partnership with Versowood, the largest private sawn timber producer in Finland, strengthens our position in tight wood markets.
