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Interim report Q4/2015: UPM finished 2015 with a strong quarter, growth projects deliver earnings

UPM-Kymmene Corporation Financial Statements release 2 February 2016
at 9:30 EET

Interim report Q4/2015: UPM finished 2015 with a strong quarter, growth
projects deliver earnings

Q4 2015 compared with Q4 2014

· Earnings per share excluding special items were EUR 0.37 (0.32) and reported
EUR 0.36 (0.01)
· Operating profit excluding special items was EUR 225 million, 8.7% of sales
(230 million, 9.1% of sales)
· Growth projects began contributing to UPM's earnings, with a strong start in
the expanded UPM Kymi pulp mill and UPM Biofuels reaching break-even level.
In addition, the speciality paper machine at the UPM Changshu mill in China
started production in December
· The profit improvement programme exceeded its target, reaching a cost
reduction impact of EUR 41 million in Q4 2015 (annualised EUR 165 million)
· Operating cash flow was strong at EUR 390 million (462 million), and net
debt decreased to EUR 2,100 million (2,401 million)

Full year 2015 compared with 2014

· Earnings per share excluding special items were EUR 1.75 (1.17) and reported
EUR 1.72 (0.96)
· Operating profit excluding special items was EUR 1,163 million, 11.5% of
sales (847 million, 8.6% of sales)
· In 2015, UPM completed several growth projects: the speciality paper machine
at UPM Changshu mill, expansion of the UPM Kymi pulp mill, Lappeenranta
advanced biofuel refinery and UPM Raflatac expansions in Poland and APAC. New
expansion projects began at the Kaukas pulp mill and Otepää plywood mill
· UPM closed 800,000 tonnes of graphic paper production capacity in Europe in
H1 2015
· The Board proposes a dividend of EUR 0.75 (0.70) per share, representing 34%
of operating cash flow per share

| Key figures Q4/2015 Q4/2014 Q3/2015(2 Q1-Q4/2015(2 Q1-Q4/2014 |
| Sales, EURm 2,574 2,531 2,530 10,138 9,868 |
| EBITDA, EURm1) 363 334 345 1,350 1,306 |
| % of sales 14.1 13.2 13.6 13.3 13.2 |
| Operating profit (loss), EURm 220 71 513 1,142 674 |
| excluding special items, EURm 225 230 507 1,163 847 |
| % of sales 8.7 9.1 20.0 11.5 8.6 |
| Profit (loss) before tax, EURm 214 57 498 1,075 667 |
| excluding special items, EURm 219 216 492 1,096 774 |
| Profit (loss) for the period, EURm 193 8 408 916 512 |
| Earnings per share, EUR 0.36 0.01 0.77 1.72 0.96 |
| excluding special items, EUR 0.37 0.32 0.76 1.75 1.17 |
| Operating cash flow per share, EUR 0.73 0.86 0.68 2.22 2.33 |
| Equity per share at end of period, EUR 14.89 14.02 14.89 14.89 14.02 |
| Gearing ratio at end of period, % 26 32 31 26 32 |
| Net interest-bearing liabilities at end of period, EURm 2,100 2,401 2,465 2,100 2,401 |
1) EBITDA is operating profit before depreciation, amortisation and impairment
charges, excluding the change in fair value of biological assets and wood
harvested, excluding the change in fair value of unrealised cash flow and
commodity hedges, excluding the share of results of associated companies and
joint ventures, and special items.

2) Includes a fair value increase of biological assets in Finland totalling
EUR 265 million, due to adjusted long-term wood price estimates and a change
in the discount rate.

Jussi Pesonen, President and CEO, comments on Q4 and full year 2015 results:

"UPM finished 2015 on a strong note. The fourth quarter was the best of the
year thanks to solid business performance. The profit improvement programme
exceeded its target and the growth projects started to deliver earnings.
EBITDA reached a higher level than in five years and our strong cash flow
drove net debt to a new record-low level.

Several of our growth projects have now been completed and I'm very pleased to
see that they have already contributed to the cash flow.

The UPM Kymi pulp mill expansion was a success and we reached a record-high
pulp production in December. UPM Biofuels picked up steam as the year went on
and reached a break-even level during the last quarter. UPM Changshu's
speciality paper machine ramp-up started well in December and UPM Raflatac's
investments have already contributed to our earnings during the second half
of the year.

It is worth pointing out that much of the good performance was driven by our
own actions. UPM Biorefining and UPM Raflatac were the highlights of the
quarter both in terms of own profitability actions and good timing in growth
projects. UPM Energy and UPM Plywood showed solid performances. UPM Paper ENA
had its best quarter of 2015 thanks to continuous profit improvement actions.
UPM Paper Asia's performance was supported by own cost actions as the
business faced increased regional competition.

UPM's Board of Directors has today proposed that the dividend for the 2015 is
increased to EUR 0.75 (0.70) per share which is 34% of the operating cash
flow per share. I believe the Board's proposal reflects confidence in UPM's
ability to generate growth in earnings and cash flow.

All in all, 2015 was a good year for UPM and provides a solid foundation, even
in a somewhat uncertain environment in 2016. We are starting the year with a
stronger balance sheet than ever. Our investment levels are decreasing and
earnings and cash flow from growth projects are starting to materialise. We
will maintain cost competitiveness and strive to achieve top performance in
our businesses. We are confident about our prospects for 2016."

Outlook for 2016

UPM's profitability improved in 2015 and the improvement is expected to
continue in 2016. The business performance is underpinned by the company's
growth projects and continuous cost efficiency measures.

UPM's growth projects are expected to contribute positively to the company's
earnings in 2016, compared with 2015. UPM continues its measures to reduce
variable and fixed costs also in 2016. Currencies are expected to contribute
positively as hedges roll over, assuming relevant currencies stay at the same
level as at the end of 2015.

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. The call will be conducted in
English on 2 February 2016 at 13:15 EET.

Later in the afternoon, Jussi Pesonen will present the results in a press
conference conducted in Finnish 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 dialling a number in the
list below or following the webcast online atwww.upm.comor throughthis 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 the start
to ensure that the conference can start on time.

The presentation will be available atwww.upm.comfor 12 months after the call.

Conference call title:UPM Financial Results 2015

| Direct telephone numbers: |
| |
| BE: +3224040635 |
| DK: +45 823 331 78 |
| FI: +358981710495 |
| FR: +33170721541 |
| UK: +442031940552 |
| NO: +4723500211 |
| SE: +46856642702 |
| US: +18557161597 |
| |
| International telephone numbers with a pin code 77500392 # |
| |
| AU: +61 29253 5844 |
| AT: +43 19282 258 |
| CH: +44 44580 0083 |
| CN: +86 400 681 5421 |
| DE: +49 030 221 510 067 |
| ES: +34 911 143 608 |
| HK: +852 3068 9834 |
| IN: 0018038524634 |
| IR: +353 1696 8154 |
| IT: +39 2 3604 6798 |

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, intens...

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