Upm-kymmene Oyj Stock Earnings Reports

UPM reported Q3 2025 comparable EBIT of EUR 153 million (EBIT margin 6.7%), up 21% sequentially but down 47% year-on-year. Advanced Materials and Decarbonization Solutions improved year-on-year, while Renewable Fibres and Communication Papers were hit by volatile markets — notably very low pulp prices and elevated wood costs. Group-level headwinds in Q3 were primarily lower sales prices (c. EUR 190 million vs prior year). Fibres South (Uruguay) showed strong competitiveness (Fibres South EBIT EUR 80m and 22% margin in Q3 despite weak pulp prices), while Fibres North (Finland) was slightly EBIT negative in Q3 (impacted by Kaukas maintenance and high wood costs). UPM completed material actions: planned capacity closures in Communication Paper (Kaukas and Ettringen) cutting 570,000 t (13% capacity) and targeting EUR 70m annual fixed cost savings; continued efficiency and footprint moves in Advanced Materials; strategic review of Plywood (possible separation by end-2026); and progress on Leuna biochemical refinery ramp-up (first commercial sugars and lignin sales expected Q4, glycol H1 2026, full production and positive EBIT expected 2027). Cash flow: operating cash flow EUR 218m in Q3; net debt EUR 3.218bn and net debt/EBITDA 2.36x (above the 2.0x policy target) with management aiming to reduce leverage below 2x via profitability, working capital releases and cash conversion. Outlook unchanged: H2 2025 comparable EBIT guide EUR 425–650m, with Q4 supported by timing of Energy refunds and likely forest fair value increases (but potentially smaller than last year). CapEx expected to fall after heavy investment cycle; maintenance CapEx run-rate ~EUR 250m pa plus modest extra for efficiency projects.