UPM Interim Report Q1 2022: Strong performance supported by tight markets

Q1 highlights
• Sales increased by 12% to EUR 2,507 million (2,234 million in Q1 2021)
• Comparable EBIT was in line with last year at EUR 277 million, 11.0% of sales (279 million, 12.5%)
• Operating cash flow was EUR 12 million (217 million)
• Net debt increased to EUR 837 million (83 million) and net debt to EBITDA ratio was 0.46 (0.06)
• Sales prices increased in all business areas and more than offset the negative impact of higher variable costs
• The strike in Finland affected production and delivery volumes especially in the pulp, paper and biofuels businesses
• Cash funds and unused committed credit facilities totalled EUR 2.9 billion at the end of Q1 2022
• Transformative growth projects in Uruguay and in Germany proceed well, investment estimate updated for the Leuna biorefinery
• UPM decided to suspend its deliveries to Russia, purchasing of wood in Russia and the UPM Chudovo plywood mill operations
• In April, UPM and Paperworkers’ Union agreed on first-ever business-specific collective labour agreements and the strike ended at UPM mills in Finland

Jussi Pesonen, President and CEO, comments on the Q1 results:
“Market demand was strong and UPM businesses performed well. We delivered good Q1 results, on par with the corresponding quarter of last year. Prices increased significantly in all our businesses, more than offsetting the rise in variable costs. The result is a good achievement when viewed against the background of the strikes that took place at most of our Finnish mills and the war in Ukraine.

Quarterly sales increased by 12% to EUR 2,507 million, and comparable EBIT was in line with last year at EUR 277 million, 11.0% of sales. Operating cash flow was EUR 12 million, impacted by inflation and energy-related items in working capital. Net debt at the end of March was EUR 837 million. Cash funds and unused committed credit facilities totalled EUR 2.9 billion. Our strong liquidity and balance sheet are a great strength considering our ongoing transformative growth investments and the unpredictability of the operating environment.

Prices increased in all UPM businesses and the upward trend in market prices continued also for UPM Fibres. Our Uruguay pulp mill and UPM Timber performed very well. However, with two-thirds of our pulp production down because of the strikes in Finnish mills, the business area result was modest in the current markets.

UPM Communication Papers returned to profitable numbers, thanks to tight market as well as timely and successful commercial execution. The business experienced a steep rise in input costs, particularly energy, but was able to increase sales prices accordingly. A third of our graphic paper capacity was down because of the strike in Finland, but UPM Communications Papers was able to cover deliveries partially from existing stock and the mills outside of Finland.
details at: https://www.upm.com/about-us/for-media/releases/2022/04/upm-interim-report-q1-2022-strong-performance-supported-by-tight-markets/

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