Interim report Jan–Jun 2009: UPM's operating profit improved from the first quarter's level; demand stabilising

Archive 4.8.2009 0:00 EEST

(UPM, Helsinki, 4 August 2009 at 09:30 EET) – Interim report for January–June 2009:

- Earnings per share for the second quarter were € -0.02 (0.18), and excluding special items € 0.03 (0.17)
- Operating profit excluding special items was € 31 million (155 million) and reported operating profit was € 8 million (157 million)
- Good operating cash flow ensured liquidity and thus the net interest-bearing liabilities at the end of June came to € 4,036 million (4,479 million)
- Cost saving measures and temporary layoffs resulted in a fixed cost reduction of € 100 million in the second quarter in comparison with the same period last year.

Jussi Pesonen, UPM’s President and CEO, comments on the result for the second quarter of 2009:

“Weak demand resulting from poor economic activity led to significantly lower deliveries across all of UPM’s businesses. Our operating profit improved from the first quarter of this year although declined clearly from that of the equivalent period last year. A good operating cash flow ensured liquidity, and we have reduced our net debt by almost EUR 300 million since the beginning of the year. Significant cost savings materialised and there were slight positive signs in the market”.

"In Paper, our deliveries improved somewhat from the first quarter's level, and the flexible operating mode suits the demand situation particularly well. The EBITDA margins of our Paper and Label businesses improved. In Paper, the average price increased by approximately 1 % from the level of the second quarter of last year. Sales prices increased also in the Label business. In Plywood and Timber, the extremely challenging market situation continued”.

“Our cost saving measures and temporary layoffs decreased our fixed costs during the second quarter by EUR 100 million in comparison to the same period in 2008. UPM employees have had a constructive, future oriented approach, and we have found permanent solutions to reduce costs. This is very positive in these circumstances and crucial also for the long term”.

“Our market outlook remains cautious. Contraction of economic activity seems to have slowed and demand for our products is stabilising. In Paper, there is also some improvement in order intake. However, recession continues to have an impact on the demand for our products. Therefore, temporary production curtailments will continue”.

“UPM continues to implement its strategy to reposition the company. The letter of intent concerning the ownership structure of Botnia as well as the shareholding in the energy company PVO is an important step on the road to strong market driven operations in our Pulp and Energy businesses”, says Pesonen.

For more information please contact:
Mr Jussi Pesonen, President and CEO, UPM, tel. +358 204 15 0001
Mr Jyrki Salo, Executive Vice President and CFO, UPM, tel. +358 204 15 0011

UPM, Corporate Communications
Media Desk, tel. +358 40 588 3284

News conference and conference call information

UPM’s President and CEO Jussi Pesonen will present the Interim Report for January–June 2009 in a press conference to be held at the UPM Head Office in Helsinki (main entrance Eteläesplanadi 2) today at 14:00 Finnish time (12:00 UK time, 07:00 EST).

The joint press conference for media and financial analysts can be listened online at The on-demand version of the audio cast will be available online for three months.

A conference call for analysts and investors, hosted by UPM’s President and CEO Jussi Pesonen, will also take place today at 17:00 Finnish time (15:00 UK time, 10:00 EST, please see dial-in details below).

Participants are registered by the operator before the start of the conference call. In order to ensure a timely conference start, please dial in 10 minutes before the conference start time.

Dial-in numbers for conference call:
Call title: UPM Interim Report Q2 2009
Conference ID: 18054882
International dial-in: +44(0) 1452 555 566
UK Free call: 0800 694 0257
UK Local call: 0844 493 3800
USA Free Call: 1866 966 9439

Dial-in numbers for replay, available until 10 August 2009:
Access code: 18054882#
International dial in: +44(0) 1452 55 0000
UK Free call: 0800 953 1533
UK Local call: 0845 245 5205
USA Free call: 1866 247 4222

It should be noted that certain statements herein which are not historical facts, including, without limitation, those regarding expectations for market growth and developments; expectations for growth and profitability; and statements preceded by ‘believes’, ‘expects’, ‘anticipates’, ‘foresees’ or similar expressions, are forward-looking statements. Since these statements are based on current plans, estimates and projections, they involve risks and uncertainties which may cause actual results to materially differ from those expressed in such forward-looking statements. Such factors include, but are not limited to: (1) operating factors such as continued success of manufacturing activities and the achievement of efficiencies therein including the availability and cost of production inputs, continued success of product development, acceptance of new products or services by the Group’s targeted customers, success of the existing and future collaboration arrangements, changes in business strategy or development plans or targets, changes in the degree of protection created by the Group’s patents and other intellectual property rights, and the availability of capital on acceptable terms; (2) industry conditions, such as strength of product demand, intensity of competition, prevailing and future global market prices for the Group’s products and the pricing pressures thereto, financial condition of the customers and the competitors of the Group, the potential introduction of competing products and technologies by competitors; and (3) general economic conditions, such as rates of economic growth in the Group’s principal geographic markets or fluctuations in exchange and interest rates.