Upm-kymmene Oyj · OMXHEX:UPM
Upm-kymmene Oyj — Q1 2025 Earnings Presentation
26 slides from Upm-kymmene Oyj's earnings presentation, Apr 24, 2025
Slide 1: UPM Interim Report Q1 2025
UPM Interim Report Q1 2025 President and CEO Massimo Reynaudo April 24, 2025
Slide 2: Q1 2025: Good start to the year with actions to sharpen competitiveness
Q1 2025: Good start to the year with actions to sharpen competitiveness Comparable EBIT Q1 2025 in brief • Sales totaled €2,646 million (2,640 million in €M Q1 2024) 800 • Comparable EBIT decreased by 14% to €287 million, 700 10.8% of sales (333 million, 12.6%) 600 • Gradually improving markets in p
Slide 3: Improved markets for advanced materials and pulp in Q1 2025
Improved markets for advanced materials and pulp in Q1 2025 Cautious consumers Cautious consumers Active consumers, Demand recovery decreasing confidence continued for advanced Somewhat improving materials pulp market Moderate demand growth for advanced Challenging markets for Solid demand for mater
Slide 4: Comparable EBIT in Q1 2025
Comparable EBIT in Q1 2025 €M €M 450 450 418 15.9% 400 400 333 350 12.6% 350 287 287 300 10.8% 300 10.8% 250 250 200 200 150 150 100 100 50 50 0 0 4 | © UPM
Slide 5: Comparable EBIT by business area
Comparable EBIT by business area €M UPM Fibres *) % of sales €M UPM Communication Papers % of sales €M UPM Specialty Papers % of sales 320 40 300 25 80 24 280 35 70 21 240 20 240 30 60 18 200 25 50 15 180 15 160 20 40 12 120 15 120 10 30 9 80 10 20 6 60 5 40 5 10 3 0 0 0 0 0 0 -40 -5 -60 -5 €M UPM E
Slide 6: Solid financial position
Solid financial position Net debt and leverage • Net debt €2,954m at the end of Q1 2025 Net debt €M Net debt/ EBITDA (x) • Net debt / EBITDA 1.77 3,0 5 000 • Cash funds and committed credit facilities 2,5 €3.0bn at the end of Q1 2025 4 000 2,0 • No financial covenants Policy: ≤ 2x 3 000 1,5 • UPM re
Slide 7: UPM and tariffs
UPM and tariffs 14% of UPM sales in 2024 was to the US 40% • UPM produces self-adhesive label materials locally and communication papers in the U.S. produced 60% imported • UPM imports communication papers, specialty papers and some eucalyptus pulp to the U.S. • Indirectly, tariffs may impact demand
Slide 8: Foreign exchange exposure
Foreign exchange exposure Estimated 12-month net currency cash flow at the end of Q1 2025, before hedging, € million USD 1,190 • At the end of Q1 2025, UPM’s estimated net UYU -290 currency cash flows for the next 12 months GBP 230 totaled approximately €1.6 billion CNY 190 • In addition, the earnin
Slide 9: Outlook
Outlook (* • Profit guidance: UPM’s comparable EBIT in H1 2025 is expected to be approximately in the range of €400-625 million (€515 million in H1 2024). • Outlook: UPM’s performance in H1 2025 is expected to benefit from higher delivery volumes and lower fixed costs, but be held back by lower sale
Slide 10: We act on three fronts
We act on three fronts 1 2 3 Improve Accelerate World-class competitiveness growth businesses 10 | © UPM
Slide 11: Our global scale and diversified portfolio give resilience
Our global scale and diversified portfolio give resilience World-class competitiveness and agility key to future success UPM Sales 2024 UPM comparable EBIT Q1 2025 North Communication America papers 15% Renewable Energy fibres Asia 25% Europe 54% Advanced materials 11 | © UPM
Slide 12: Renewable fibres
Renewable fibres • #3 globally, #1 multi-fibre Uruguay • 3.4 million tonnes eucalyptus pulp • World-class low-cost platform in full operation • Optimization and efficiency measures ongoing • Debottlenecking potential Finland • 2.4 million tonnes, mainly softwood pulp Capture the full potential in •
Slide 13: Advanced materials
Advanced materials Raflatac • Strong global #2 • Labeling markets recovered above pre-covid level • Efficiency measures started to bear fruit • Metamark acquisition to accelerate growth Specialty Papers • Strong global #1 • Labeling markets recovered above pre-covid level • Decreased production cost
Slide 14: Decarbonization solutions
Decarbonization solutions Biochemicals • 220,000 tonnes of pioneering biochemicals • Commercial interest confirmed • Integrated commercial production in H2 2025 • Gather learnings for next steps Biofuels • 130,000 tonnes of advanced renewable fuels • Turn-around profitability • Validate and test nex
Slide 15: Communication papers
Communication papers • Strong #1 in Europe, 10 paper mills • Reliable provider of sustainable communication papers • Cost-efficient operations • Plan to close the Ettringen paper mill in Germany (270,000t) in July 2025 and streamline operations • Annual fixed cost savings €39 million Focus on perfor
Slide 16: Summary
Summary • Q1 was a good start to the year 2025, with improving markets in pulp and advanced materials • UPM’s actions to sharpen competitiveness started to bear fruit • Global trade tensions have increased uncertainty in the business environment • With solid balance sheet, competitive portfolio and
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Slide 18: Our business portfolio, leveraging competitive business platforms
Our business portfolio, leveraging competitive business platforms • Decarbonization solutions biochemicals, biofuels, CO2-free energy • Advanced materials adhesive materials, specialty papers, plywood • Renewable fibres pulp, other bioproducts • Communication papers 18 | © UPM
Slide 19: Major investment cycle coming to an end
Major investment cycle coming to an end Capital expenditure Estimate Capex 2025 estimate €M 1 600 1 400 • Capex excluding acquisitions €400m 1 200 Strategic investments • Operational investment 1 000 needs consistently low 800 600 Depreciation 400 200 Operational investments 0 2009 2010 2011 2012 20
Slide 20: Maintenance shutdowns in 2024 and 2025
Maintenance shutdowns in 2024 and 2025 Timing Unit Q1-Q2 24 Olkiluoto nuclear power plant OL3 Q2 24 Olkiluoto nuclear power plant OL1 and OL2 Maintenance shutdowns have UPM Paso de los Toros pulp mill an impact on UPM Fray Bentos pulp mill • Maintenance costs UPM Pietarsaari pulp mill • Production v
Slide 21: Maturity profile and liquidity
Maturity profile and liquidity EURm 2 000 Liquidity on March 31, 2025 was €3bn (cash funds and unused committed credit facilities) 1 500 UPM’s committed credit facilities: • €159m rolling committed overdraft facility maturing 2026 1 000 • €300m bilateral revolving credit facilities (€100m maturing 2
Slide 22: UPM Fibres: Chemical pulp market prices
UPM Fibres: Chemical pulp market prices Pulp market prices, euros Pulp market prices, U.S. dollars €/tonne $/tonne 1700 1700 1500 1500 1300 1300 1100 1100 900 900 700 700 500 500 300 300 BHKP, Europe, EUR NBSK, Europe, EUR BHKP, Europe NBSK, Europe BHKP, China, EUR NBSK, China, EUR BHKP, China NBSK,
Slide 23: UPM Energy: Electricity market prices
UPM Energy: Electricity market prices Market electricity prices vs UPM sales price €/MWh 240 220 200 180 160 140 120 100 80 60 40 20 0 2020 2021 2022 2023 2024 2025 Helsinki Front Year System Front Year UPM average sales price UPM Energy 2020 2021 2022 2023 2024 Q1 2025 profitability Comparable EBIT
Slide 24: UPM Communication Papers: Graphic paper prices
UPM Communication Papers: Graphic paper prices Europe North America China €/t $/t $/t 1300 1700 1400 1200 1600 1300 1500 1100 1200 1400 1000 1300 1100 900 1200 1000 800 1100 900 700 1000 900 800 600 800 700 500 700 400 600 600 300 500 500 WFC r (100% chemical pulp) News SC LWC WFC WFU News SC LWC WF
Slide 25: Paper price vs. cash cost of marginal cost producer
Paper price vs. cash cost of marginal cost producer EUR/tonne Price Cash cost of a marginal producer 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Sources: UPM, PPI, Fastmarkets RISI, AFRY 25 | © UPM
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