• Home
  • Journal
  • Public Companies
  • UPM Interim Report Q1 2020: Solid Q1 results, UPM well prepared for the current uncertainty and future recovery

UPM Interim Report Q1 2020: Solid Q1 results, UPM well prepared for the current uncertainty and future recovery

UPM-Kymmene Corporation    Stock Exchange Release (Interim Report)              23 April 2020 at 09:45 EETUPM Interim Report Q1 2020:
Solid Q1 results, UPM well prepared for the current uncertainty and future recovery
Q1 2020 highlightsSales decreased by 15% to EUR 2,287 million (2,693 million in Q1 2019) due to lower pulp and paper prices and lower deliveries of graphic papersComparable EBIT decreased by 26% to EUR 279 million (374 million)UPM Raflatac and UPM Specialty Papers achieved record comparable EBITThe industry-wide strike in Finland affected UPM’s pulp and paper businesses for two weeks and timber and plywood businesses for four weeksThe COVID-19 pandemic did not materially impact UPM’s operations in Q1 2020UPM implemented extensive precautions to protect the health and safety of its employees and to ensure business continuity and progress of strategic projects during the pandemicUPM is planning to use shift arrangements, temporary layoffs, or reduced working hours as required to adjust its operations in different scenariosUPM’s transformative pulp project in Uruguay and biochemicals project in Germany are proceeding in line with the planned start-up timelineOperating cash flow was EUR 137 million (320 million), as working capital increased seasonallyNet debt decreased to EUR -405 million (-5 million)Cash funds and unused committed credit facilities totalled EUR 2.2 billion at the end of MarchAGM was held as scheduled with special precautions on 31 March and the dividend of EUR 1.30 per share was paid on 16 AprilKey figures
Jussi Pesonen, President and CEO, comments on Q1 2020 results:“The key foundation in implementing our transformation strategy has been a very strong balance sheet and an agile and efficient operating model. Therefore, we are well prepared for the current uncertainty and can continue implementing our strategy and growth projects.The global socioeconomic outlook has changed dramatically since January as the COVID-19 outbreak in China quickly developed into a worldwide pandemic. We implemented extensive precautions to protect the health and safety of our employees and to ensure business continuity and the progress of strategic projects. UPMers proactive and diligent response to the pandemic has allowed us to run our operations uninterrupted.During the first quarter our businesses were not significantly impacted by the pandemic—not even in China—and we are able to report solid results. Our sales were EUR 2,287 million and comparable EBIT was EUR 279 million. First quarter operating cash flow was seasonally low, after the record level in Q4. Our financial position is exceptionally strong. UPM has net cash in the balance sheet (net debt EUR -405 million), and our liquidity totalled EUR 2.2 billion at the end of March.The Annual General Meeting was held under special arrangements ensuring safety and shareholder rights. The joint effort by our organising team and UPM shareholders enabled us to have the AGM on schedule and to make important decisions including the dividend of EUR 1.30 per share. The adoption of the Financial Statements and the election of the Board were also completed.In terms of business areas, UPM Raflatac and UPM Specialty Papers reported their best quarter ever. Remarkable profitability was due to a combination of long-term efforts to improve margins and continued good customer demand.The industry-wide strike in Finland affected UPM’s pulp and paper businesses for two weeks and timber and plywood businesses for four weeks. In UPM Biorefining the demand for pulp was stable and prices continued at a low level. UPM Timber was affected by softening demand. In UPM Communication Papers the year began with lower deliveries, affected by the strikes in Finland, and moderately lower paper prices.UPM Plywood achieved stable results despite only two months of operation at the Finnish mills. UPM Energy performed well in highly exceptional weather conditions and volatile energy markets.At the very end of the quarter UPM withdrew its outlook for the year and will not provide a new outlook for the time being. The uncertainties in the global economy are unprecedented due to the pandemic-induced lockdowns that are affecting one third of the world population.UPM takes various measures to protect its employees and to ensure business continuity, but temporary disruptions in production, the supply chain and customer demand are nonetheless possible. UPM is planning to use shift arrangements, temporary layoffs, or reduced working hours as required to adjust its operations in different scenarios.Many of our products serve essential everyday needs and may therefore see relatively solid demand during the pandemic, particularly for pulp, speciality papers and self-adhesive labels. On the other hand, the demand for graphic papers, plywood and timber is likely to be impacted by the lockdowns and the following global recession.Our growth project in Uruguay is proceeding as planned with strict health and safety controls. To give one example, new workers entering the UPM Paso de los Toros pulp mill construction site are being tested for COVID-19. In January we took the next transformative step by investing in a biochemicals refinery in Germany, which opens totally new markets for UPM. Engineering and planning of this investment are ongoing.UPM’s operating model will once again prove our strength even in these exceptional conditions, and our financial standing and corporate resources ensure our strategic projects. I am proud of the resilience and solutions-orientated approach of UPM staff. Our businesses have the focus, competitiveness and agility to perform and protect cash flow even in a changing business environment. Long-term value creation continues to be driven by our spearheads for growth. We are committed to sustainable businesses that offer solutions to global challenges.”2020 and the COVID-19 pandemicUPM does not provide an outlook for the time being. The COVID-19 pandemic and the related containment measures around the world represent significant uncertainty for the rest of the year. The following topics related to COVID-19 pandemic are discussed in the interim report: Global economy, Safety and business continuity, Demand for UPM products, Adjusting to different scenarios, Projects and maintenance shutdowns, Financing.Invitation to investor webcast and conference call on Q1 2020 Interim ReportUPM’s President and CEO Jussi Pesonen will present the financial results in a webcast and a conference call for analysts and investors, held in English language, on 23 April 2019 at 13:15 EET. The conference call can be participated in either by dialling a number in the list below or following the webcast online at www.upm.com 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 dialling in 5-10 minutes prior to ensure a timely start of the webcast.The presentation is available at www.upm.com for 12 months after the call.Conference call title: UPM Interim Report for January – March 2020International telephone numbers with a pin code 75276454#AU: +61 284058549
AT: +43 19287907
BE: +32 24035814
CH: +41 225809034
DE: +49 6913803430
DK: +45 35445577
ES: +34 935472900
FI: +358981710310
FR: +33 170750711
HK: +852 30600225
IN: +91 2271279610
IR: +353 14311252
IT: +39 0236013821
JP: +81 344556492
NL: +31 207095189
NO: +47 23500243
SE: +46 856642651
SP: +65 64298349
UK: +44 3333000804
US: +18558570686
Invitation to an online press conference on Q1 2020 Interim ReportLater in the afternoon, at 14:30 EET, Jussi Pesonen will present the results in an online press conference held in Finnish language. To register visit this link. Only the registered media representatives will receive the actual link to the press conference.**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. The main earnings sensitivities and the group’s cost structure are presented on pages 160–161 of the 2019 Annual Report. Risks and opportunities are discussed on pages 28–29 and 129-131, and risk management is presented on pages 189–195 of the report.**UPM-Kymmene Corporation
Pirkko Harrela
Executive Vice President, Stakeholder Relations
UPM, Media Relations
Mon-Fri 9:00-16:00 EET
tel. +358 40 588 3284
We deliver renewable and responsible solutions and innovate for a future beyond fossils across six business areas: UPM Biorefining, UPM Energy, UPM Raflatac, UPM Specialty Papers, UPM Communication Papers and UPM Plywood. As the industry leader in responsibility we are committed to the UN Business Ambition for 1.5°C and the science-based targets to mitigate climate change. We employ 18,700 people worldwide and our annual sales are approximately EUR 10.2 billion. Our shares are listed on Nasdaq Helsinki Ltd. UPM Biofore – Beyond fossils. www.upm.com
Follow UPM on Twitter | LinkedIn | Facebook | YouTube | Instagram | #UPM #biofore #beyondfossilsAttachmentUPM Interim report Q120

Disclaimer & Cookie Notice

Welcome to GOLDEA services for Professionals

Before you continue, please confirm the following:

Professional advisers only

I am a professional adviser and would like to visit the GOLDEA CAPITAL for Professionals website.

Cookie Notice

We use cookies to improve your experience on our website

Information we collect about your use of Goldea Capital website

Goldea Capital website collects personal data about visitors to its website.

When someone visits our websites, we use a third party service, Google Analytics, to collect standard internet log information (such as IP address and type of browser they’re using) and details of visitor behavior patterns. We do this to allow us to keep track of the number of visitors to the various parts of the sites and understand how our website is used. We do not make any attempt to find out the identities or nature of those visiting our websites. We won’t share your information with any other organizations for marketing, market research or commercial purposes and we don’t pass on your details to other websites.

Use of cookies
Cookies are small text files that are placed on your computer or other device by websites that you visit. They are widely used to make websites work, or work more efficiently, as well as to provide information to the owners of the site.