UPM-Kymmene (UPM) Q4 2024 earnings summary

Executive summary

• Comparable EBIT for 2024 increased by 21% to EUR 1,224 million, driven by strong pulp mill performance in Uruguay, cost reductions of EUR 103 million, and operational streamlining, though market recovery slowed in H2 2024.

• Q4 2024 sales rose 4% year-over-year to EUR 2,632 million, with comparable EBIT up 29% to EUR 418 million.

• Major impairments included EUR 373 million for Leuna biochemicals refinery and EUR 113 million for Finnish pulp goodwill.

• Board proposes a EUR 1.50 per share dividend (5.6% yield, 86% payout) and initiates a share buyback program for up to 6 million shares or EUR 160 million.

• Decisive actions included site consolidations, asset closures, and exits from biocomposites and planned exit from biomedicals to streamline the portfolio.

Financial highlights

• Q4 2024 operating cash flow was EUR 570 million; full-year operating cash flow EUR 1,352 million.

• Net debt at year-end was EUR 2,869 million; net debt/EBITDA at 1.66x, with liquidity of EUR 3.2 billion.

• Comparable EBIT margin for 2024 was 11.8% (up from 9.7% in 2023).

• Capital expenditure was EUR 550 million (5.3% of sales), down from EUR 1,122 million in 2023.

• Comparable EPS for 2024 was EUR 1.74; reported EPS EUR 0.82.

Outlook and guidance

• Comparable EBIT for H1 2025 expected between EUR 400–625 million (EUR 515 million in H1 2024).

• Higher delivery volumes and lower fixed costs anticipated in H1 2025, but sales margins expected to be lower; full production at Paso de los Toros mill to add 300,000 tonnes of pulp.

• UPM Biofuels expected to improve in H1 2025; Communication Papers deliveries to decrease.

• Pulp prices starting 2025 at similar levels to last year, electricity prices lower.

• Significant uncertainties remain due to geopolitics and global business environment.