UPM Reports Improved Third Quarter 2015 Earnings

"Profitability is underpinned by the EUR 150 million profit improvement programme, favourable currencies, as well as the first positive impacts from the company's growth projects." – Jussi Pesonen, President and CEO, UPM.

Oct. 27, 2015 - UPM today reported improved third quarter 2015 earnings, cash flow and balance sheet. Jussi Pesonen, President and CEO, made the following comments on the company's performance:

"UPM's performance continued to improve during the third quarter. This was visible in our earnings, cash flow and balance sheet. The results were boosted by our successful profit improvement programme, which proceeded ahead of schedule. During the third quarter, we achieved 96 percent of targeted savings.

"Most of our businesses enjoyed a positive third quarter. UPM Biorefining performed well on favourable pulp markets and showed good cost efficiency. UPM Energy benefited from a good volume of hydropower, which it was able to leverage on volatile markets. UPM Raflatac continued to improve its performance and was able to respond to market growth with timely growth investments. UPM Plywood continued on a strong path.

"UPM Paper ENA improved from the previous quarter thanks to lower costs and seasonally higher volumes. UPM Paper Asia also improved slightly from the second quarter. Both paper businesses continued to be negatively affected by currency hedges.

"Our growth investment programme is nearing completion and our focus turns to reaping the benefits in 2016 and beyond. As for major projects, Kymi pulp mill expansion started the ramp-up and investment in the new UPM Changshu production unit is being finalised as we speak. In order to secure the positive volume development in pulp, we also plan to make minor investments in UPM Fray Bentos pulp mill in conjunction with the annual maintenance shutdown during the fourth quarter.

"Overall, I'm encouraged by our performance during the third quarter. Our efficiency has increased and our growth projects are responding to market demand, so we're well-positioned to increase our bottom line going forward". OUTLOOK FOR 2015

"UPM confirms its full year 2015 outlook: The improved profitability achieved in 2014 is expected to continue in 2015, and there are prospects for further improvement. Profitability is underpinned by the EUR 150 million profit improvement programme, favourable currencies, as well as the first positive impacts from the company's growth projects. Profitability is affected by lower publication paper prices and lower electricity sales prices compared to 2014."

UPM's structure consists of the following business areas: UPM Biorefining, UPM Energy, UPM Raflatac, UPM Paper Asia, UPM Paper Europe and North America (ENA) and UPM Plywood. To learn more, please visit: www.upm.com

SOURCE: UPM