UPM-Kymmene (UPM) Q1 2025 earnings summary

Executive summary

• Q1 2025 sales reached €2,646 million, stable year-over-year, with sequential business improvement and visible benefits from competitiveness actions.

• Comparable EBIT fell 14% to €287 million (10.8% of sales), mainly due to lower prices and higher costs.

• Pulp and advanced materials markets improved, while communication papers and decarbonisation solutions remained challenging.

• Strategic actions included the acquisition of Metamark to boost Raflatac and the completed share buyback of 6 million shares for €160 million.

• Announced closure of Ettringen mill in Germany, reducing paper capacity and targeting €39 million in annual fixed cost savings.

Financial highlights

• Sales were €2,646 million in Q1 2025, nearly flat year-over-year.

• Comparable EBIT: €287 million (10.8% margin), down 14% year-over-year.

• Net debt at quarter-end was €2,954 million; net debt/EBITDA ratio at 1.77.

• Operating cash flow was €289 million, including a €112 million seasonal working capital increase.

• Share buyback program impacted cash flow by €116 million in Q1.

Outlook and guidance

• H1 2025 comparable EBIT expected at €400–625 million (vs. €515 million in H1 2024); reaching the upper end is more challenging due to lower pulp and electricity prices and increased Q2 maintenance.

• Q2 maintenance impact estimated at €90 million, up from €10 million in Q1.

• Performance to benefit from higher delivery volumes and lower fixed costs, but lower sales margins and prices will weigh.

• Significant uncertainties remain due to global trade tensions, tariffs, and currency fluctuations.