Similar EBIT higher via 60% in Q2, UPM Paso de los Toros reached complete capability

UPM-Kymmene Company Keep Trade Loose (Part-Generation Monetary File) 23 July 2024 at 09:30 EEST

HELSINKI, July 23, 2024 /PRNewswire/ —

UPM Part-Generation Monetary File 2024:
Similar EBIT higher via 60% in Q2, UPM Paso de los Toros reached complete capability

Q2 2024 highlights

• Gross sales totalled EUR 2,546 million (2,558 million in Q2 2023)
• Similar EBIT higher via 60% to EUR 182 million, 7.2% of gross sales (114 million, 4.5%)
• Running money tide used to be EUR 204 million (459 million)
• Reasonable medication in lots of product markets
• UPM Paso de los Toros pulp mill reached nominal capability sooner than its first repairs shutdown in June
• Strangely top repairs job with 3 pulp turbines and all nuclear energy plant devices having scheduled repairs

H1 2024 highlights

• Gross sales reduced via 3% to EUR 5,186 million (5,345 million in H1 2023)
• Similar EBIT higher via 10% to EUR 515 million (470 million), and used to be 9.9% (8.8%) of gross sales
• Running money tide used to be EUR 539 million (1,173 million)
• Web debt higher to EUR 2,763 million (2,557 million) and the web debt to EBITDA ratio used to be 1.64 (1.07)
• Money finances and untouched dedicated credit score amenities totalled EUR 3.3 billion on the finish of Q2 2024
• Sale of the Steyrermühl web page, Austria in January
• CDP recognised UPM with double ‘A’ ranking for transparency on state alternate and woodland

Key figures

UPM gifts sure measures of efficiency, monetary place and money flows, which can be additional efficiency measures in line with the steering issued via the Eu Securities and Markets Authority (ESMA). The definitions of additional efficiency measures are introduced in » UPM Annual Report 2023

Massimo Reynaudo, President and CEO, feedback at the effects:

“In Q2, our comparable EBIT increased by 60% on last year, in line with our expectations. The continued improvement was sustained by a moderate recovery in our product markets as well as a greater contribution from the UPM Paso de los Toros pulp mill in Uruguay. Our Q2 efficiency used to be held again via an outstanding quantity of repairs at our pulp turbines and nuclear energy plant devices. The shutdowns had been a hit, and our belongings at the moment are in an magnificient place to lend our shoppers in the second one half of of the yr, working at complete capability.

Our Q2 gross sales had been EUR 2,546 million and our related EBIT used to be EUR 182 million. Our working money tide used to be EUR 204 million and our web debt higher moderately to EUR 2,763 million. All the way through the quarter we paid out the primary instalment of dividends for the former monetary yr, totalling EUR 400 million.

In UPM Strings, pulp call for used to be just right, and costs endured to extend. An excessively remarkable milestone used to be reached within the UPM Paso de los Toros pulp mill in Uruguay, the place manufacturing reached nominal capability for a complete date already sooner than the primary repairs shutdown in June. The quarter used to be impacted via repairs at each pulp turbines in Uruguay and at UPM Pietarsaari, Finland.

UPM Forte Papers delivered just right effects regardless of upper pulp costs. In UPM Raflatac, world call for for self-adhesive label fabrics recovered from endmost yr’s lows. Each companies carried out a hit margin control movements.

UPM Conversation Papers’ profitability reduced because of supply volumes that had been impacted via decrease call for then the restocking in Q1, and the political moves in Finland. Margins in Q2 had been pressured as thread price will increase materialised extra temporarily than value will increase. In Might, we introduced plans to alike the Hürth newsprint mill in Germany and to close unwell one advantageous paper gadget (PM3) at Nordland Papier, additionally in Germany. Tight margin control and productiveness enhancements would be the key focal point in the second one half of of the yr.

UPM Power had a susceptible quarter of seasonally decrease electrical energy costs and extended repairs actions at Olkiluoto nuclear energy plant devices.

UPM Plywood endured its stable efficiency in a seasonally just right quarter with all plywood turbines working at complete capability. EU anti-dumping measures at the imports of birch plywood from Russia entered into pressure and had a favorable have an effect on at the Eu marketplace.

In Alternative operations, the Eu marketplace for complicated renewable fuels endured to be comfortable and the efficiency of our biofuels act remained on the stage of the former quarter.

We have now made additional walk with the design for the prospective biofuels refinery in Rotterdam and finished a big a part of the unadorned engineering. The plan comprises untouched proprietary generation linked to processing the specified UPM built-in feedstocks, which now we have validated at an illustration scale. Prior to the prospective funding resolution, our focal point can be on trying out the untouched applied sciences on versatile feedstock choices at a bigger scale and securing the feedstock provide. This can be very important to safeguard differentiation and help the long-term competitiveness of the act case. We think this paintings to snatch roughly two years.

We stay assured that the pace expansion in call for for complicated renewable fuels is sexy. The hot marketplace turmoil simplest confirms our view {that a} differentiated, aggressive and sustainable feedstock length would be the key to making sure profitability over marketplace cycles and attainable regulatory trends.

Our access to the extremely sexy biochemicals marketplace is coming near. The UPM Biochemicals refinery in Leuna, Germany, is shifting regularly in opposition to the beginning of manufacturing via the tip of the yr. Commissioning endured in Q2 and the industrial hobby for wood-based merchandise remained sturdy. In June, we introduced an exhilarating partnership with Nokian Tyres, a important producer of top rate tyres, which can get started the usage of UPM BioMotion™ renewable practical fillers in its manufacturing.

All the way through the quarter, we struck 5 untouched business-specific collective labour words in Finland in just right co-operation with worker representatives. Those mutually really useful words help our long-term competitiveness and talent to lend our shoppers.

For the second one half of of the yr, we look ahead to sturdy run and bettering effects. Our greatest funding ever, the UPM Paso de los Toros pulp mill, has moved from ramp-up to habitual manufacturing. With our aggressive Uruguay platform working at scale, we think the higher pulp deliveries to give a boost to our second-half effects. With our portfolio of aggressive companies in increasing markets, UPM is about to accomplish neatly age we get ready for the after section of expansion.”

Outlook for 2024

UPM’s full-year 2024 related EBIT is anticipated to extend from 2023, supported via upper supply volumes, the ramp-up and optimisation of the UPM Paso de los Toros pulp mill, and decrease fastened prices. Call for for lots of UPM merchandise is anticipated to regularly give a boost to because the destocking discoverable in 2023 is over. The marketplace situations for renewable fuels are anticipated to be weaker than endmost yr. UPM continues to supremacy margins and snatch movements to leave variable and glued prices.

In H2 2024, related EBIT is anticipated to be upper than in H1 2024. This development is anticipated to return particularly from UPM Strings, with the total pulp capability to be had and pulp value ranges launch at the next stage than at first of the yr. There aren’t any main repairs shutdowns scheduled for the corporate in H2 2024, while H1 2024 used to be impacted via strangely top repairs job and political moves in Finland. The timing of the once a year energy-related refunds is anticipated to help the lead to This fall.

Invitation to UPM’s webcast on half of yr monetary file 2024

A webcast and a convention name for analysts and buyers will get started at 13:15 EEST. The half of yr file can be introduced in English via President and CEO Massimo Reynaudo and CFO Tapio Korpeinen. Members can practice the webcast on-line by means of this link.

Members wishing to invite questions then the presentation will have to check in for the convention name. To take part within the convention name, please register here. Nearest registering. you are going to be supplied with phone numbers, a consumer ID and a convention ID to get entry to the convention. To invite a query, press *5 to your phone keypad to tied the queue.

The webcast can be to be had at www.upm.com for twelve months then the decision.

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It must be famous that sure statements herein, which don’t seem to be historic details, together with, with out limitation, the ones referring to expectancies for marketplace expansion and trends; expectancies for expansion and profitability; and statements preceded via “believes”, “expects”, “anticipates”, “foresees”, or indistinguishable expressions, are forward-looking statements. Since those statements are in keeping with wave plans, estimates and projections, they contain dangers and uncertainties which would possibly motive untouched effects to materially range from the ones expressed in such forward-looking statements. Such components come with, however don’t seem to be restricted to: (1) working components similar to endured good fortune of producing actions and the fulfillment of efficiencies therein together with the provision and value of manufacturing inputs, endured good fortune of product construction, acceptance of untouched merchandise or services and products via the Staff’s focused shoppers, good fortune of the prevailing and pace collaboration preparations, adjustments in act technique or construction plans or objectives, adjustments within the level of coverage created via the Staff’s patents and alternative highbrow constituent rights, the provision of capital on applicable phrases; (2) trade situations, similar to energy of product call for, depth of festival, widespread and pace world marketplace costs for the Staff’s merchandise and the pricing pressures thereto, monetary status of the shoppers and the competition of the Staff, the prospective creation of competing merchandise and applied sciences via competition; and (3) common financial situations, similar to charges of economic development within the Staff’s essential geographic markets or fluctuations in alternate and rates of interest. The principle profits sensitivities and the crowd’s price construction are introduced on pages 178–179 of the Annual File 2023. Dangers and alternatives are mentioned on pages 34–35, and dangers and possibility control are introduced on pages 133–137.

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UPM

We ship renewable and accountable answers and innovate for a pace past fossils throughout six act gardens: UPM Strings, UPM Power, UPM Raflatac, UPM Forte Papers, UPM Conversation Papers and UPM Plywood. Because the trade chief in duty, we’re dedicated to the UN Industry Ambition for 1.5°C and the science-based objectives to mitigate state alternate. We make use of 16,600 society international and our annual gross sales are roughly EUR 10.5 billion. Our stocks are indexed on Nasdaq Helsinki Ltd. UPM Biofore – Past fossils. www.upm.com

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