UPM-Kymmene Corporation Stock Exchange Release 29 October 2009 at 09:30
UPM's operating profit improved - demand bottoming out
Interim report January-September 2009:
Earnings per share for the third quarter were EUR 0.08 (-0.17), and excluding
special items EUR 0.14 (0.25). Operating profit excluding special items was EUR
131 million (216 million) and reported operating profit was EUR 96 million (loss
of EUR 40 million). Strong cash flow due to continued actions to preserve cash:
EUR 721 million reduction in net debt from last year. Savings in fixed costs
total EUR 70 million in the third quarter from last year, EUR 240 million year
to date.
Jussi Pesonen, UPM's President and CEO, comments on the result of the third
quarter of 2009:
"Slow economic activity continued during the third quarter but demand started to
bottom out in most of our businesses. Our operating profit improved and the
EBITDA margin for the third quarter was 17.5 %. In times like these, this is a
good achievement".
"In Paper, we reported a good result considering the extremely tough
circumstances. In Europe, we adjusted production to weak demand and saved costs
without losing production efficiency. In China, where we are the market leader
in uncoated wood-free grades, we have continued to experience strong demand and
a good pricing environment. The agreement on the Uruguayan pulp operations is a
good strategic fit with the development of our China operations".
"Another positive note was the Label business. There was a strong recovery both
in terms of profitability and volumes. We are reaping the benefits of our
restructuring in Europe as well as the successful start-up of our Polish
factory".
"In Plywood and Timber, the situation remains challenging both in terms of the
raw material supplies in Finland and the long-term competitiveness of our
Finnish operations. We have confidence in these products, but it seems
impossible to ensure profitable operations with the current cost structure".
"The wood market in Finland has livened up a little, but not sufficiently. The
industry is lacking a steady flow of competitively priced raw material. This is
most likely to lead to further capacity adjustments in the Finnish forest
industry".
"Economic indicators have clearly improved but the recession continues to affect
demand for all of our products. Our demand and pricing outlook remains weak and
we will continue to curtail production in most of our businesses. Variable costs
are estimated to remain at the same level. Fixed costs for the full year are
estimated to be close to EUR 300 million lower than last year."
"Even in tough times, we have never stopped thinking about our future
opportunities. We were the first company in our industry to start the
transformation. We defined a new vision and business strategy and reorganised
ourselves accordingly."
"The next step is to reposition ourselves in the minds of our customers and
other stakeholders. UPM will redefine itself as a bio and forest industry
company: UPM - The Biofore Company. In doing so we will create a new category in
which UPM will take the leading position. Bio is a prefix in practically all of
our new development initiatives. It stands for sustainable solutions and good
environmental performance, whereas fore stands for not only the forest but also
being first, in the forefront. Both UPM's current operations and future
orientation support this positioning," says Pesonen.
For more information please contact:
Mr Jussi Pesonen, President and CEO, UPM, tel. +358 204 15 0001
Mr Jyrki Salo, Executive Vice President and CFO, UPM, tel. +358 204 15 0011
UPM, Corporate Communications
Media Desk, tel. +358 40 588 3284
communications@upm-kymmene.com
***
News conference and conference call information
UPM's President and CEO Jussi Pesonen will present the Interim Report for
January-September 2009 in a press conference to be held at the UPM Head Office
in Helsinki (main entrance Eteläesplanadi 2) today at 14:00 Finnish time (12:00
GMT, 07:00 EST).
You can listen online to the joint press conference for media and financial
analysts at www.upm-kymmene.com. The on-demand version of the audio cast will be
available online for three months.
A conference call for analysts and investors, hosted by UPM's President and CEO
Jussi Pesonen, will also take place today at 17:00 Finnish time (15:00 GMT,
10:00 EST, please see dial-in details below).
Participants are registered by the operator before the start of the conference
call. In order to ensure a timely conference start, please dial in 10 minutes
before the conference start time.
Dial-in numbers for conference call:
Call title: UPM Interim Report Q3 2009
Conference ID: 35863585
International dial-in: +44(0) 1452 555 566
UK Free call: 0800 694 0257
UK Local call: 0844 493 3800
USA Free Call: 1866 966 9439
Dial-in numbers for replay, available until 4 November 2009:
Access code: 35863585#
International dial-in: +44 (0) 1452 55 00 00
UK Free call: 0800 953 1533
UK Local call: 0845 245 5205
USA Free call: 1866 247 4222
***
It should be noted that certain statements herein which are not historical
facts, including, without limitation, those regarding expectations for market
growth and developments; expectations for growth and profitability; and
statements preceded by ‘believes', ‘expects', ‘anticipates', ‘foresees' or
similar expressions, are forward-looking statements. Since these statements are
based on current plans, estimates and projections, they involve risks and
uncertainties which may cause actual results to materially differ from those
expressed in such forward-looking statements. Such factors include, but are not
limited to: (1) operating factors such as continued success of manufacturing
activities and the achievement of efficiencies therein including the
availability and cost of production inputs, continued success of product
development, acceptance of new products or services by the Group's targeted
customers, success of the existing and future collaboration arrangements,
changes in business strategy or development plans or targets, changes in the
degree of protection created by the Group's patents and other intellectual
property rights, and the availability of capital on acceptable terms; (2)
industry conditions, such as strength of product demand, intensity of
competition, prevailing and future global market prices for the Group's products
and the pricing pressures thereto, financial condition of the customers and the
competitors of the Group, the potential introduction of competing products and
technologies by competitors; and (3) general economic conditions, such as rates
of economic growth in the Group's principal geographic markets or fluctuations
in exchange and interest rates.
UPM-Kymmene Corporation
Pirkko Harrela
Executive Vice President, Corporate Communications
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