UPM Interim Report Q1 2023

Jussi Pesonen, President and CEO, comments on the results: “We delivered our second-best Q1 result in more than 20 years, even though it was held back by a short-term lack of volumes. After a year of rapid inflation and scarcity of goods, 2023 began with intense destocking in most product value chains. We succeeded in managing margins and adapting our operations to the situation. Sales increased by 11% and comparable EBIT grew by 29% over last year. Our operating cash flow was impressive at EUR 714 million.

What makes me particularly excited is that we have just reached two strategic milestones. Our transformative growth projects in UPM Fibres and UPM Energy have been completed: The UPM Paso de los Toros pulp mill in Uruguay is ramping up and the OL3 nuclear power plant unit has started regular commercial electricity production. Both investments will contribute to UPM’s results and future opportunities for decades to come, and I would like to thank all UPMers who have contributed to these major projects over the years.

Looking at our Q1 business performance, market shipments in most products were substantially below the long-term averages due to destocking in the value chains. UPM Communication Papers, UPM Energy and UPM Plywood achieved good results in the low-volume environment. UPM Fibres continued to deliver satisfactory results and the business was getting ready to start up UPM Paso de los Toros. UPM Raflatac and UPM Specialty Papers managed to maintain healthy unit margins, but the results in both businesses leave room for improvement as delivery volumes recover.”

Q1 2023 highlights
*Sales increased by 11% to EUR 2,787 million (2,507 million in Q1 2022)
*Comparable EBIT grew by 29% to EUR 356 million, 12.8% of sales (277 million, 11.0%)
*Delivery volumes were impacted by destocking in various product value chains
*Operating cash flow was EUR 714 million (12 million), supported by cash inflow from energy hedges
*Net debt increased to EUR 2,167 million (837 million) and the net debt to EBITDA ratio was 0.82 (0.46)
*UPM Paso de los Toros pulp mill in Uruguay started up production on 15 April
details at: https://www.upm.com/about-us/for-media/releases/2023/04/upm-interim-report-q1-2023-solid-q1-result-underpinned-by-strong-margins-two-transformative-projects-completed/

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