UPM-Kymmene (UPM) Q3 2024 earnings summary

Executive summary

• Comparable EBIT rose 32% year-over-year to EUR 291 million in Q3 2024, despite a 2% sales decline to EUR 2,521 million, driven by the ramp-up of the Paso de los Toros pulp mill and cost reductions, though earnings growth was below expectations due to slower market demand, especially in Europe and China.

• Strategic actions included cost reductions, organizational simplification, targeted capacity closures, the acquisition of Grafityp, and the closure of the Hürth newsprint mill, with a planned shutdown of a fine paper machine at Nordland, Germany.

• Priority set on improving competitiveness and performance to capture future growth, with ongoing optimization and selective capital investments.

• UPM received EcoVadis platinum and CDP double 'A' sustainability recognitions.

Financial highlights

• Q3 2024 sales were EUR 2,521 million (down 2% year-over-year); comparable EBIT was EUR 291 million (11.5% of sales), up 32% year-over-year and 60% sequentially.

• Net debt at end of Q3 2024 was EUR 2,804 million, with a net debt to EBITDA ratio of 1.59.

• Operating cash flow in Q3 2024 was EUR 242 million, impacted by a EUR 73 million increase in working capital.

• Cash funds and committed credit facilities totaled EUR 3.7 billion at end of Q3 2024.

• Q3 2024 net income was EUR 246 million (Q3 2023: loss of EUR 28 million).

Outlook and guidance

• Q4 2024 comparable EBIT is expected to be at or above Q4 2023 (EUR 323 million), with full-year 2024 comparable EBIT expected to be at or above 2023 levels.

• No significant maintenance shutdowns are planned for Q4; average pulp selling price is expected to decrease further.

• Energy-related refunds are anticipated in Q4, similar to the previous year.