UPM Interim Report Q3 2023: UPM delivers improved results from previous quarter

Q3 2023 highlights
*Sales decreased by 24% to EUR 2,584 million (3,420 million in Q3 2022)
*Comparable EBIT decreased by 72% to EUR 220 million, 8.5% of sales (779 million, 22.8%)
*Operating cash flow was EUR 641 million (-201 million), supported by cash inflow from working capital and energy hedges
*Net debt decreased to EUR 2,363 million (3,133 million) and the net debt to EBITDA ratio was 1.27 (1.39)
*Pulp and electricity sales prices significantly lower than last year, impacting UPM Fibres and UPM Energy. Successful margin management in other business areas
*Demand for many of UPM’s products started to gradually recover
*UPM Paso de los Toros pulp mill and the OL3 nuclear power plant unit contributed significantly to UPM’s deliveries
*UPM Communication Papers to permanently close its Plattling mill in Germany
*UPM received platinum in the EcoVadis responsibility assessment with a high industry score
*UPM joined the UN Global Compact Forward Faster Initiative

Q1–Q3 2023 highlights
*Sales decreased by 7% to EUR 7,929 million (8,489 million in Q1–Q3 2022)
*Comparable EBIT decreased by 52% to EUR 689 million (1,443 million), and was 8.7% (17.0%) of sales
*Operating cash flow was EUR 1,814 million (-1,068 million), supported by cash inflow from energy hedges
*Cash funds and unused committed credit facilities totalled EUR 6.5 billion at the end of Q3 2023

Jussi Pesonen, President and CEO, comments on the results:
“In Q3, our comparable EBIT nearly doubled in comparison to the previous quarter. Demand for many of our products began to gradually recover. Our margin management continued to be successful as variable costs decreased. At the same time, our strategic investments contributed significantly to our deliveries.

This year has seen an exceptional business environment, with a downcycle well beyond normal in our industry, especially in Europe. Geopolitical uncertainty, low economic activity and persistent inflation have impacted the underlying demand for consumer products. Market deliveries of our products have been held back further by unprecedented destocking in most of the product value chains. While we believe the destocking is now phasing out, the operating environment remains uncertain, impacting customer behaviour.

In these unusual circumstances, we have focused on margin management, and implemented a range of timely cost and capacity reduction measures to maintain good performance. Meanwhile, we have been ramping up our strategic growth projects, and continue to build the foundation for future growth. In Q3, these activities started to pay off. We are well positioned to deal with a market demand recovery, and to leverage the positive long-term drivers with our growth projects.
details at: https://www.upm.com/about-us/for-media/releases/2023/10/upm-interim-report-q3-2023-upm-delivers-improved-results-from-previous-quarter-and-continues-to-build-long-term-growth/

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