A positive finish to an exceptional year – transformative growth projects on budget and on schedule

UPM-Kymmene Company Monetary Statements Launch 2020 28 January 2021 at 09:50 EET

UPM Monetary Statements 2020:
A optimistic end to an distinctive yr – transformative development initiatives on funds and on schedule

This autumn 2020 highlights

• Gross sales decreased by 11% to EUR 2,188 million (2,447 million in This autumn 2019) as a consequence of decrease pulp costs and decrease deliveries and costs of graphic papers

• Comparable EBIT was EUR 252 million, 11.5% of gross sales (343 million, 14.0%), down 27% year-over-year

• Working money stream was EUR 347 million (592 million)

• Profitable well being and security measures enabled uninterrupted enterprise operations and progress in transformative development initiatives

• The yr ended on a optimistic be aware, with good demand for UPM’s merchandise

• UPM issued a EUR 750 million Inexperienced Bond underneath the EMTN programme

• UPM was listed because the business chief within the Dow Jones Sustainability Indices (DJSI) and obtained a triple ‘A’ rating from CDP for excellent environmental efficiency

• UPM strikes ahead with biofuels development plans and begins the fundamental engineering section of a next-generation biorefinery

2020 highlights

• Gross sales decreased by 16% to EUR 8,580 million (10,238 million in 2019) as a consequence of decrease deliveries of graphic papers and decrease pulp and paper costs

• Comparable EBIT was EUR 948 million, 11.1% of gross sales (1,404 million, 13.7%), down 32% year-over-year

• Working money stream was EUR 1,005 million (1,847 million)

• Internet debt was EUR 56 million (-453 million)

• Money funds and unused dedicated credit score services totalled EUR 3.2 billion on the finish of 2020

• The Board proposes a dividend of EUR 1.30 (1.30) per share

• The COVID-19 containment measures considerably decreased demand for graphic papers, whereas UPM Raflatac and UPM Specialty Papers achieved file earnings

• UPM’s transformative pulp mission in Uruguay and biochemicals mission in Germany are nicely on monitor with the deliberate start-up timeline

• Closures of UPM Kaipola and UPM Chapelle paper mills and UPM Jyväskylä plywood mill, streamlining in a number of companies and capabilities

Key figures

Story continues

Jussi Pesonen, President and CEO, feedback on the This autumn and 2020 full yr outcomes:

“In 2020, the worldwide pandemic and associated lockdowns precipitated an abrupt and extreme financial shock that put all societies and companies to the check. With decisive measures we ensured the security of UPM workers and the passable efficiency of the corporate. Our development initiatives proceeded as deliberate.

The yr ended on a optimistic be aware. Within the fourth quarter, the demand for our merchandise was good. Gross sales of EUR 2,188 million and comparable EBIT of EUR 252 million had been increased than on the 2 earlier quarters, though significantly down from the corresponding quarter of 2019.

The star performers of the quarter, as for the entire yr, had been UPM Raflatac and UPM Specialty Papers. These enterprise areas benefited from beneficial markets and modifications in shopper behaviour, e-commerce and retail. Each companies had taken business and effectivity measures to enhance profitability and began the yr with already improved margins.

In UPM Biorefining the demand for pulp, renewable fuels and timber was good. China is main the demand development within the pulp market. Market costs for pulp have been at a low degree for fairly a while, and the primary value will increase through the fourth quarter had been offset by modifications in currencies. Two intensive pulp mill upkeep shutdowns pushed the quarterly outcomes all the way down to break-even.

The efficiency of UPM Communication Papers within the final quarter was higher than the 2 earlier quarters as a consequence of seasonally low power prices and better year-end demand. Nevertheless, the market demand for graphic papers was down 14% year-over-year. The closure of UPM Kaipola paper mill in Finland was finalised in the beginning of 2021 and the gross sales strategy of UPM Shotton paper mill in Wales is ongoing. The measures taken had been well timed and mandatory for the effectivity and competitiveness of the enterprise.

Wonderful hydrological circumstances continued, and UPM Power once more delivered sturdy earnings. Power costs decreased, each through the quarter and on a yearly foundation. In UPM Plywood, demand continued to be good in development end-uses, however on a low degree in industrial end-uses. The markets remained extremely aggressive.

In 2020, the distinctive shortfall in graphic paper demand as a consequence of COVID lockdowns and unusually low pulp costs had a transparent affect on our earnings. On the similar time, I’m very happy with the spectacular efficiency of our specialty packaging supplies companies, UPM Raflatac and UPM Specialty Papers.

Our gross sales decreased by 16% in 2020, and comparable EBIT was down 32% year-over-year. Working money stream decreased to EUR 1,005 million from the all-time excessive of the earlier yr. Our monetary standing stays very sturdy with web debt near zero and money funds and unused dedicated credit score services totalling EUR 3.2 billion on the finish of 2020.

Throughout a yr of excessive uncertainty our focus was clear: make sure the efficiency of all our operations and on the similar time safe the profitable implementation of our strategic development initiatives. We took a number of measures to lower fastened prices, that are anticipated to lead to annual financial savings of roughly EUR 130 million. Our two main development initiatives in Uruguay and in Germany are on schedule and on funds.

The yr 2021 can be an essential yr of development and preparation for the initiatives in Paso de los Toros in Uruguay, and in Leuna, Germany. The development websites in Uruguay are presently using 3,00Zero staff and the quantity will double later this yr. The development of the biochemical refinery in Germany started throughout This autumn. Concurrently, we’re establishing the enterprise for the eventual market entry. Throughout probably the most intensive yr of those initiatives, UPM’s complete capital expenditure is anticipated to be EUR 2 billion.

Our transformation doesn’t cease there. Right this moment we introduced the subsequent step to advance our biofuels development plans. We’re beginning the fundamental engineering section of a next-generation biorefinery with an annual capability of 500,00Zero tonnes of high-quality renewable fuels. The deliberate biorefinery would scale up UPM’s profitable biofuels enterprise to a brand new degree. On the similar time, it will additional enhance the long-term competitiveness and sustainability efficiency of UPM Biofuels by introducing a number of sustainable feedstocks and reaching uniquely excessive CO2 discount in comparison with biofuels presently in the marketplace.

With its Biofore technique UPM is nicely positioned to reply to world megatrends and rising demand for renewable merchandise. We allow our clients and shoppers to make extra sustainable decisions. Our objective is to create a future past fossils.

Sustainability is on the core of every little thing we do. In 2020, we dedicated to the UN Enterprise Ambition for 1.5°C and to the science-based measures to mitigate local weather change. We had been recognised as a UN World Compact LEAD firm, listed because the business chief within the Dow Jones European and World Sustainability Indices (DJSI), and obtained a triple ‘A’ rating from CDP for excellent environmental efficiency. We additionally established a Inexperienced Finance Framework and issued our first Inexperienced Bond. Our syndicated revolving credit score facility can be linked to biodiversity and local weather targets.

Within the coming quarters, we are going to do our utmost to make sure enterprise continuity and efficiency in addition to safe protected and profitable implementation of our main development initiatives. Although there are some indicators of restoration, the pandemic just isn’t over but.

Assured with our monetary place and future money era, UPM’s Board of Administrators has at the moment proposed a dividend of EUR 1.30 (1.30) per share for 2020.”

Outlook for 2021

The worldwide economic system is anticipated to start out recovering in 2021 from the deep downturn skilled in 2020. World areas will progress at totally different tempo, and China is main this growth. Demand for many UPM merchandise is influenced by total financial exercise and therefore, relies on the form and fee of the financial restoration.

The COVID-19 pandemic continues to trigger vital uncertainty in 2021. In 2020, lockdowns had a major detrimental affect on graphic paper demand however supported the sturdy demand for self-adhesive labelling supplies and specialty papers. Opening of the economies is more likely to permit for some normalisation of those demand impacts. Nevertheless, additional waves of the pandemic and associated lockdowns stay potential.

At first of 2021, pulp costs are anticipated to extend in contrast with This autumn 2020. Paper costs are anticipated to lower reasonably, in contrast with This autumn 2020.

UPM will proceed to implement measures to lower fastened and variable prices.

UPM’s comparable EBIT in H1 2021 is anticipated to be decrease than in H1 2020, as a consequence of decrease paper costs and better upkeep exercise. Comparable EBIT is anticipated to get well in H2 2021.

Invitation to UPM’s webcast and press convention on Monetary Statements for the yr 2020

A webcast and a convention name for analysts and buyers in English language begins at 13:15 EET. UPM’s monetary outcomes can be offered by the President and CEO Jussi Pesonen and CFO Tapio Korpeinen. All individuals can view the webcast on-line at www.upm.com or by this link, however individuals who want to ask questions should attend the convention name by dialling a quantity within the record beneath:

Convention name title: Monetary Assertion Launch for the 12 months 2020
Worldwide phone numbers:

Argentina Toll: +54 1152526536
Australia Toll: +61 284058549
Austria Toll: +43 19287907
Belgium Toll: +32 24035814
Brazil Toll: +55 1133517266
Bulgaria Toll: +359 29358129
Canada Toll: +1 4162164189
Chile Toll: +56 226188227
China Toll: +86 4008983300
Croatia Toll: +385 20770084
Cyprus Toll: +357 26030115
Czech Republic Toll: +420 225439714
Denmark Toll: +45 35445577
Estonia Toll: +372 6868838
Finland Toll: +358981710310
France Toll: +33 170750711
Germany Toll: +49 6913803430
Greece Toll: +30 2112111509
Hong Kong Toll: +852 30600225
Hungary Toll: +36 12355213
India Toll: +91 2271279610
Indonesia Toll: +62 2129704955
Eire Toll: +353 14311252
Israel Toll: +972 37207679
Italy Toll: +39 0236013821
Japan Toll: +81 344556492
Korea, Republic of Toll: +82 234798456
Latvia Toll: +371 67852162
Lithuania Toll: +370 52051171
Luxembourg Toll: +352 27300160
Malaysia Toll: +60 320531815
Morocco Toll: 212520480069
Netherlands Toll: +31 207095189
New Zealand Toll: +64 93670511
Norway Toll: +47 23500243
Philippines Toll: 63285400965
Poland Toll: +48 225839017
Portugal Toll: +351 210609105
Russian Federation Toll: +7 4959909265
Saudi Arabia Toll: +966 115108758
Singapore Toll: +65 64298349
Slovakia Toll: +421 250112045
Slovenia Toll: +386 18888475
South Africa Toll: +27 216724118
Spain Toll: +34 935472900
Sweden Toll: +46 856642651
Switzerland Toll: +41 225809034
Taiwan Toll: +886 287231159
Turkey Toll: +90 2123755124
Ukraine Toll: +380 893239875
United Kingdom Toll: +44 3333000804
United States Toll: +1 6319131422
Venezuela Toll: +58 2123358975 P
Viet Nam Toll: +1 8882064044

PIN code: 62514656#

We advocate that individuals dial in 5-10 minutes prior to make sure a well timed begin of the webcast. The webcast can be obtainable at www.upm.com for 12 months after the decision.

Later within the afternoon, at 14:30 EET, CEO Jussi Pesonen will current the Monetary Statements for 2020 in a press convention held within the Finnish language each on the Biofore Home and on-line. As a result of Covid-19 pandemic, participation to the Biofore Home occasion is restricted to members of the media solely. Others are requested to comply with the presentation on-line. To register to the reside or on-line occasion, go to this link. Solely the registered will obtain the hyperlink to the net press convention.

*

It ought to be famous that sure statements herein, which aren’t historic details, together with, with out limitation, these relating to expectations for market development and developments; expectations for development and profitability; and statements preceded by “believes”, “expects”, “anticipates”, “foresees”, or related expressions, are forward-looking statements. Since these statements are primarily based on present plans, estimates and projections, they contain dangers and uncertainties which can trigger precise outcomes to materially differ from these expressed in such forward-looking statements. Such components embody, however usually are not restricted to: (1) working components corresponding to continued success of producing actions and the achievement of efficiencies therein together with the provision and value of manufacturing inputs, continued success of product growth, acceptance of latest services or products by the Group’s focused clients, success of the prevailing and future collaboration preparations, modifications in enterprise technique or growth plans or targets, modifications within the diploma of safety created by the Group’s patents and different mental property rights, the provision of capital on acceptable phrases; (2) business circumstances, corresponding to energy of product demand, depth of competitors, prevailing and future world market costs for the Group’s merchandise and the pricing pressures thereto, monetary situation of the shoppers and the opponents of the Group, the potential introduction of competing merchandise and applied sciences by opponents; and (3) common financial circumstances, corresponding to charges of financial development within the Group’s principal geographic markets or fluctuations in alternate and rates of interest. The principle earnings sensitivities and the group’s price construction are offered on pages 160–161 of the 2019 Annual Report. Dangers and alternatives are mentioned on pages 28–29 and 129-131, and threat administration is offered on pages 189–195 of the report.

*

UPM-Kymmene Company
Pirkko Harrela
Govt Vice President, Stakeholder Relations

UPM, Media Relations
Mon-Fri 9:00-16:00 EET
tel. +358 40 588 3284
media@upm.com

UPM
We ship renewable and accountable options and innovate for a future past fossils throughout six enterprise areas: UPM Biorefining, UPM Power, UPM Raflatac, UPM Specialty Papers, UPM Communication Papers and UPM Plywood. Because the business chief in accountability we’re dedicated to the UN Enterprise Ambition for 1.5°C and the science-based targets to mitigate local weather change. We make use of 18,00Zero individuals worldwide and our annual gross sales are roughly EUR 8.6 billion. Our shares are listed on Nasdaq Helsinki Ltd. UPM Biofore – Past fossils. www.upm.com

Observe UPM on Twitter | LinkedIn | Facebook | YouTube | Instagram | #UPM #biofore #beyondfossils

Attachment