UPM-Kymmene (UPM) Q2 2025 earnings summary

Executive summary

• Q2 2025 sales declined 6% year-over-year to €2.4 billion, with comparable EBIT down 31% to €126 million, mainly due to lower sales prices and adverse currency effects.

• Advanced materials businesses remained resilient, while biofuels achieved record deliveries and EBIT break-even; Rotterdam refinery project discontinued to focus on proprietary growth.

• The Leuna biochemicals refinery started its first core process, with full production and positive EBIT targeted for 2027.

• Announced permanent closure of Kaukas and Ettringen/Ettringen mills, reducing paper capacity by 13% and annual fixed costs by €70 million.

• Share buy-back program completed, repurchasing 6 million shares for €160 million.

Financial highlights

• Comparable EBIT margin in Q2 2025 was 5.2% (Q2 2024: 7.2%); operating cash flow was €179 million (Q2 2024: €204 million).

• Net debt at end of June 2025 was €3.31 billion; net debt to EBITDA ratio at 2.12.

• Cash funds and committed credit facilities totaled €2.7–2.8 billion at quarter-end.

• Dividend payments of €397 million in April, with a second instalment due in November; €1.50 per share for 2024.

• Capital expenditure H1 2025: €201 million; full-year 2025 expected at €400 million.

Outlook and guidance

• H2 2025 comparable EBIT is guided at €425–650 million, improving from H1 2025 but below H2 2024.

• Performance in H2 2025 to benefit from lower variable costs and energy refunds, but held back by lower pulp margins, reduced paper deliveries, and higher maintenance.

• Advanced materials expected to remain resilient; pulp prices start H2 at lower levels.

• Maintenance shutdowns at Kaukas and Fray Bentos pulp mills will impact H2 results by €60 million.

• Significant uncertainty remains due to global trade policies, geopolitics, and currency fluctuations.