""We had a good start to the year and improved performance compared to the previous quarter. Markets were gradually recovering in pulp and advanced materials, while our actions to sharpen competitiveness started to bear fruit in several businesses." – Massimo Reynaudo, President and CEO, UPM.
April 25, 2025 - UPM said that its first quarter 2025 results reflects a "good start to the year with actions to sharpen competitiveness."
Massimo Reynaudo, UPM's President and CEO, commented on the results:
"We had a good start to the year and improved performance compared to the previous quarter. Markets were gradually recovering in pulp and advanced materials, while our actions to sharpen competitiveness started to bear fruit in several businesses. We made progress towards our growth ambition with the acquisition of Metamark, and we completed our first share buy-back program by early April.
"In Q1, our sales were €2,646 million, broadly in line with the preceding quarter as well as with Q1 2024. Comparable EBIT was €287 million, down 14% from last year's corresponding quarter. Operating cash flow was €289 million. Our financial position continues to be solid, with net debt to EBITDA ratio of 1.77 at the end of March.
"UPM Fibres delivered solid results. In Uruguay, our pulp production and logistics infrastructure are now fully operational, driving production costs lower. In Finland, despite the unsustainably high wood prices we continued to operate profitably thanks to our new operating model and efficient mills. Average pulp prices were cyclically low, although market prices increased slightly during the quarter.
"In advanced materials, markets for self-adhesive label materials continued to grow moderately. UPM Raflatac captured its share of the growth, and the efficiency measures started to bear fruit. UPM Specialty Papers showed robust performance and benefited from lower production costs. UPM Plywood delivered steady results.
"In decarbonization solutions, the market conditions continued to be challenging. In UPM Energy, the high season of the electricity market was muted by the mild winter and high hydro reservoirs in the Nordic countries. UPM Biofuels took a step towards restoring profitability with solid deliveries and decreased variable costs.
"In UPM Biochemicals, the sequential start-up of the Leuna biorefinery continued and we expect to start the integrated commercial production in H2 2025. Commercial interest in the products and side streams is confirmed with an opportunity pipeline multiple times the annual capacity of the refinery.
"In UPM Communication Papers performance was steady, deliveries and prices were down sequentially. We continued to safeguard our future performance with new efficiency measures and the planned closure of UPM Ettringen paper mill in Germany, which would reduce the annual capacity of uncoated mechanical paper by 270,000 tonnes during July 2025.
"Towards the end of Q1, the uncertainty of the business environment increased significantly due to the escalating global trade tensions. We expect the direct impact of tariffs on our businesses to be relatively limited and the tariffs in general to be broadly passed through to prices. However, the uncertainty related to tariffs may impact trade flows, cause hesitation among customers, disrupt supply chains and weaken consumer confidence in the coming months. Furthermore, the scale of the trade conflict may cause currency fluctuations, which would have a direct impact on us.
"With our solid balance sheet, competitive portfolio and broad geographic presence we are well positioned to face the uncertainty. Since last fall, we have been implementing efficiency and margin management measures that continue to strengthen our competitive position and prepare us to face what lies ahead.
"In this uncertain environment, we remain focused on improving our competitiveness, pursuing long-term growth and developing a portfolio of world-class businesses.
"Our commitment to sustainability also remains intact. In Q1, we were listed as the only forest and paper industry company in the Dow Jones Global and European Sustainability Indices (DJSI) for the years 2024-2025. We were also recognized among the top performers by the CDP, a global non-profit that runs the world's only independent disclosure system for managing environmental impacts."
UPM's performance in H1 2025 is expected to benefit from higher delivery volumes and lower fixed costs, but be held back by lower sales margins, compared with H1 2024. The year 2025 has started with lower pulp and electricity prices than 2024.
2025 will be the first year of full production at the UPM Paso de los Toros mill, which is expected to grow pulp deliveries. Deliveries are expected to continue to increase for labeling materials, specialty papers and plywood. Communication paper deliveries are expected to decrease.
UPM Biofuels is expected to improve its performance in H1 2025, compared with H1 2024.
UPM's operations in Q2 2025 will be impacted by significantly higher maintenance activity than in Q1 2025.
There are significant uncertainties in geopolitics and global trade relations, which may impact the development of UPM's product deliveries, sales prices, various input cost factors and currency exchange rates.
UPM delivers renewable and responsible solutions and innovate for a future beyond fossils across six business areas: UPM Fibres, UPM Energy, UPM Raflatac, UPM Specialty Papers, UPM Communication Papers and UPM Plywood. The company employs 15,800 people worldwide and has annual sales of approximately EUR 10.3 billion.
SOURCE: UPM