Interim Report Q2/2015: UPM's good progress continued in Q2, with higher profits year-on-year

Stock Exchange Release 28.7.2015 9:15 EEST

UPM-Kymmene Corporation   Interim Report   28 July 2015 at 9:15 EET

Interim Report Q2/2015: UPM’s good progress continued in Q2, with higher profits year-on-year
Q2 2015 compared with Q2 2014
• Earnings per share excluding special items were EUR 0.33 (0.26), and reported EUR 0.30 (0.25)
• Operating profit excluding special items increased to EUR 227 million, 8.9% of sales (186 million, 7.6% of sales)
• Profitability was underpinned by profit improvement actions and favourable exchange rates
• In Q2 2015, the profit improvement programme progressed well, reaching a cost reduction impact of EUR 27 million (annualised EUR 108 million)
• Operating cash flow was strong at EUR 324 million (215 million)

Q1–Q2 2015 compared with Q1–Q2 2014
• Earnings per share excluding special items were EUR 0.62 (0.53), and reported EUR 0.59 (0.61)
• Operating profit excluding special items increased to EUR 431 million, 8.6% of sales (382 million, 7.8% of sales)
• UPM started commercial deliveries of advanced renewable diesel and completed the UPM Raflatac expansions in Poland and APAC
• UPM invests in the top-performing plywood and pulp businesses by expanding the Otepää plywood mill in Estonia and improving efficiency in the UPM Kaukas pulp mill
• UPM closed 800,000 tonnes of graphic paper production capacity in Europe

Key figures Q2/2015 Q2/2014 Q1/2015 Q1-Q2/2015 Q1-Q2/2014 Q1-Q4/2014
Sales, EURm 2,548 2,441 2,486 5,034 4,922 9,868
EBITDA, EURm 317 305 325 642 628 1,306
   % of sales 12.4 12.5 13.1 12.8 12.8 13.2
Operating profit (loss), EURm 206 176 203 409 367 674
   excluding special items, EURm 227 186 204 431 382 847
   % of sales 8.9 7.6 8.2 8.6 7.8 8.6
Profit (loss) before tax, EURm 182 159 181 363 396 667
   excluding special items, EURm 203 169 182 385 345 774
Profit (loss) for the period, EURm 160 129 155 315 322 512
Earnings per share, EUR 0.30 0.25 0.29 0.59 0.61 0.96
   excluding special items, EUR 0.33 0.26 0.29 0.62 0.53 1.17
Operating cash flow per share, EUR 0.61 0.40 0.20 0.81 0.90 2.33
Equity per share at end of period, EUR 14.30 13.76 14.61 14.30 13.76 14.02
Gearing ratio at end of period, % 35 40 31 35 40 32
Net interest-bearing liabilities at end of period, EURm 2,635 2,925 2,419 2,635 2,925 2,401

Jussi Pesonen, President and CEO comments on the results:

“Our second quarter showed good progress, our operating profit improved year-on-year and our operating cash flow was strong. Overall, the Group results were supported by our profit improvement programmes, particularly visible as lower variable costs.

UPM Biorefining, UPM Raflatac, UPM Plywood and UPM Paper Asia enjoyed favourable market conditions and achieved good performance. I’m pleased that we have ongoing growth projects in all of these businesses. Considering the current electricity markets UPM Energy made a fair result, mainly due to increased hydro power volumes.

Currency development had an overall positive impact on our Group results but affected our businesses differently. The positive currency impact supported the UPM Biorefining business, whereas the corresponding negative impact of currency hedges affected UPM Paper ENA and UPM Paper Asia. Strong pulp price development in euros boosted UPM Biorefining results but increased costs in our paper businesses.
During the second quarter, our UPM BioVerno renewable diesel was introduced to Finnish consumers, UPM Raflatac’s investments in APAC and in Poland were completed and a EUR 50 million investment was started at UPM Kaukas pulp mill in Lappeenranta, Finland. These, together with ongoing investments at the UPM Kymi pulp mill, Otepää plywood mill and UPM Changshu paper mill, will support profit growth in the upcoming quarters.

Overall, I remain confident about the continuing profit improvement programme and the ongoing growth projects. UPM continues to be well-positioned for earnings growth”.

Outlook for 2015

The improved profitability achieved in 2014 is expected to continue in 2015, and there are prospects for further improvement. Profitability is underpinned by the EUR 150 million profit improvement programme, favourable currencies, as well as the first positive impacts from the company’s growth projects. Profitability is affected by lower publication paper prices and lower electricity sales prices, compared to 2014.

In the second half of 2015 compared to the first half of 2015, UPM Paper ENA profitability is expected to improve.

Conference call and press conference 

UPM's President and CEO Jussi Pesonen will present the results in a conference call and a webcast for analysts and investors, held in English language, on 28 July 2015 at 13:15 EET.

Later in the afternoon, Jussi Pesonen will present the results in a press conference held in Finnish language at the UPM Group Head Office (The Biofore House) in Helsinki, Alvar Aallon katu 1, at 14:30 EET.

Conference call and webcast details:

The conference call can be participated in either by dialing a number in the list below or following the webcast online at or through
this link .

Only participants who wish to ask questions in the conference call need to dial in. All participants can view the webcast presentation online. We recommend that participants start dialing in 5-10 minutes prior to ensure a timely start of the conference.

The presentation is available at for 12 months after the call.

Conference call title: UPM Q2 2015 Interim Report

Direct telephone numbers:

FI: +358 981 710 495
UK: +44 203 194 05 52
NO: +47 235 002 11
SE: +46 8 566 427 02
US: +1 855 716 15 97

BE: +32 800 584 11
FR: +33 805 980 143
DK: +45 823 331 78

International telephone numbers with a pin code 307134#

AU: +61 284 058 533
AT: +43 192 804 93

CH: +41 225 802 994
DE: +49 211 971 900 76
ES: +34 911 140 089
HK: +85 230 773 566
IN: +91 226 187 51 56
IR: +353 144 756 82
IT: +39 023 601 38 09
JP: +81 344 556 491
NL: +31 207 095 111
SP: +65 642 983 39

CN +86 4006121262


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, 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. For more detailed information about risk factors, see pages 76–77 of the company’s annual report 2014.


UPM-Kymmene Corporation
Pirkko Harrela
Executive Vice President, Stakeholder Relations

UPM, Media Relations
9.00-16.00 EET
tel. +358 40 588 3284

Through the renewing of the bio and forest industries, UPM is building a sustainable future across six business areas: UPM Biorefining, UPM Energy, UPM Raflatac, UPM Paper Asia, UPM Paper Europe and North America and UPM Plywood. Our products are made of renewable raw materials and are recyclable. We serve our customers worldwide. The group employs around 20,000 people and its annual sales are approximately EUR 10 billion. UPM shares are listed on NASDAQ OMX Helsinki. UPM – The Biofore Company –


UPM Interim Report Q2/2015