Interim report Q2/2016: UPM's comparable EBIT increased by 21%, cash flow reaching new highs
(Thomson Reuters ONE) -
UPM-Kymmene Corporation Stock Exchange Release 26 July 2016 at
9:15 EET
Interim report Q2/2016:
UPM's comparable EBIT increased by 21%, cash flow reaching new highs
Q2 2016 highlights
* Comparable EBIT increased by 21% to EUR 264 million (219 million).
* Growth projects contributed to earnings, driving delivery growth in UPM
Biorefining, UPM Raflatac and UPM Paper Asia.
* Cost-efficiency measures continued on a strong track, variable and fixed
costs decreased significantly.
* Operating cash flow was strong at EUR 434 million (324 million).
H1 2016 highlights
* Comparable EBIT increased by 27% to EUR 545 million (429 million).
* Operating cash flow increased to EUR 775 million (432 million).
* Net debt decreased to EUR 1,876 million (2,635 million), and gearing to 24%
(35%).
* UPM sold the Schwedt newsprint mill in Germany in July and closed the
Madison SC paper mill in the US in May.
* In July, UPM announced expansion of the UPM Kymi pulp mill capacity to
870,000 tonnes, continuing its focused growth investments.
Key figures Q2/2016 Q2/2015 Q1/2016 Q1-Q2/2016 Q1-Q2/2015 Q1-Q4/2015
Sales, EURm 2,445 2,548 2,446 4,891 5,034 10,138
Comparable EBITDA,
EURm 385 317 403 788 642 1,350
% of sales 15.8 12.4 16.5 16.1 12.8 13.3
Operating profit,
EURm 262 206 277 539 409 1,142
Comparable EBIT, EURm 264 219 281 545 429 916
% of sales 10.8 8.6 11.5 11.1 8.5 9.0
Profit before tax,
EURm 250 182 263 513 363 1,075
Comparable profit
before tax, EURm 252 195 267 519 383 849
Profit for the
period, EURm 198 160 227 425 315 916
Comparable profit for
the period, EURm 200 170 225 425 330 734
Earnings per share
(EPS), EUR 0.37 0.30 0.43 0.80 0.59 1.72
Comparable EPS, EUR 0.37 0.32 0.42 0.79 0.62 1.38
Return on equity
(ROE), % 10.1 8.3 11.4 10.9 8.3 11.9
Comparable ROE, % 10.2 8.8 11.3 10.9 8.7 9.5
Return on capital
employed (ROCE), % 9.9 7.3 9.9 10.0 7.2 10.3
Comparable ROCE, % 10.0 7.8 10.1 10.1 7.6 8.3
Operating cash flow,
EURm 434 324 341 775 432 1,185
Operating cash flow
per share, EUR 0.81 0.61 0.64 1.45 0.81 2.22
Equity per share at
end of period, EUR 14.36 14.30 14.94 14.36 14.30 14.89
Capital employed at
the end of period,
EURm 10,403 11,012 11,000 10,403 11,012 11,010
Net interest-bearing
liabilities at end of
period, EURm 1,876 2,635 1,873 1,876 2,635 2,100
Gearing ratio at end
of period, % 24 35 23 24 35 26
Personnel at the end
of period 20,711 20,900 19,870 20,711 20,900 19,578
Jussi Pesonen, President and CEO, comments on the Q2 result:
"The first half of 2016 gives further evidence that we are on the right track.
We have a strong business model with six agile businesses, efficient capital
allocation and an industry-leading balance sheet. For the future, this ensures
good opportunities for focused investments in growth, continued strong cash flow
and an attractive dividend.
In the second quarter, our growth projects and cost-efficiency measures
continued to deliver and our comparable EBIT grew by 21% year-on-year. Cash flow
strengthened even further and cumulatively reached a record of EUR 1.5 billion
over the past 12 months. By the end of the quarter, our net debt was EUR 759
million lower than a year ago.
UPM businesses enjoyed mostly favourable market demand during the quarter. We
are responding to the market demand with timely growth investments in UPM
Biorefining, UPM Paper Asia, UPM Raflatac and UPM Plywood. At the same time, we
are taking good care of our cost efficiency and the cost take-outs continue on
the previous track. This is evident in our improved performance.
UPM Paper ENA was successful in releasing cash by improving profitability,
reducing working capital and selling assets, in line with its role. In UPM
Energy, the advantageous hedges from previous years have now largely rolled over
and the profitability is on a competitive level despite the current market
situation.
Going forward we have several growth projects in the pipeline. We are continuing
to ramp up production at the new UPM Changshu speciality paper machine, as well
as the Lappeenranta biorefinery, following its maintenance shutdown in Q2.
Ongoing projects in the Otepää plywood mill in Estonia and UPM Kaukas pulp mill
in Finland will be finalised by the end of the year. In July, we announced a EUR
98 million expansion investment in the UPM Kymi pulp mill in Finland. After this
project we will have increased our total annual pulp production capacity by more
than 500,000 tonnes since 2013, with low investment cost. We are also
considering prospects for long-term development in Uruguay."
Outlook for 2016
UPM's profitability improved in 2015 and the improvement is expected to continue
in 2016. The business performance is underpinned by the company's growth
projects and continuous cost efficiency measures.
UPM's growth projects are expected to contribute positively to the company's
earnings in 2016, compared with 2015. UPM continues its measures to reduce
variable and fixed costs in 2016. Currencies are expected to contribute
positively as hedges roll over, assuming relevant currencies stay at the same
level as at the end of 2015.
Webcast and press conference
UPM's President and CEO Jussi Pesonen will present the results in a webcast and
a conference call for analysts and investors, held in English language, today at
13:15 EET.
Later in the afternoon, Jussi Pesonen will present the results in a press
conference held in Finnish language at the UPM Group Head Office (The Biofore
House) in Helsinki, Alvar Aallon katu 1, at 14:30 EET.
Webcast and conference call details:
The conference call can be participated in either by dialling a number in the
list below or following the webcast online at www.upm.com or through this link.
Only participants who wish to ask questions in the conference call need to dial
in. All participants can view the webcast presentation online. We recommend that
participants start dialling in 5-10 minutes prior to ensure a timely start of
the webcast.
The presentation is available at www.upm.com for 12 months after the call.
Conference call title: UPM Interim Report for January - June 2016
Direct telephone numbers:
BE: +3224040635
DK: +45 823 331 78
FI: +358981710495
FR: +33170750712
UK: +442031940552
NO: +4723500211
SE: +46856642702
US: +18557161597
International telephone numbers with a pin code 82596777#
AU: +61 (0) 284058555
AT: +43 (0) 19287909
CH: +41 (0) 445831883
CN: +86 4006815487
DE: +49 (0) 6922224998
ES: +34 914146225
HK: +852 30600228
IN: 0018038524627
IR: +353 (0) 12475065
IT: +39 (0) 236010935
JP: +81 (0) 344559575
NL: +31 (0) 207133412
SP: +65 64298388
**
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, 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. The main earnings sensitivities and the group's
cost structure are presented on page 18 of the 2015 Annual Report. Risks and
opportunities are discussed on pages 17-18 and risks and risk management are
presented on pages 84-86 of the report.
**
UPM-Kymmene Corporation
Pirkko Harrela
Executive Vice President, Stakeholder Relations
UPM, Media Relations
9.00-16.00 EET
tel. +358 40 588 3284
media(at)upm.com
UPM
Through the renewing of the bio and forest industries, UPM is building a
sustainable future across six business areas: UPM Biorefining, UPM Energy, UPM
Raflatac, UPM Paper Asia, UPM Paper Europe and North America and UPM Plywood.
Our products are made of renewable raw materials and are recyclable. We serve
our customers worldwide. The group employs around 19,600 people and its annual
sales are approximately EUR 10 billion. UPM shares are listed on NASDAQ OMX
Helsinki. UPM - The Biofore Company - www.upm.com
Follow UPM on Twitter | LinkedIn | Facebook | YouTube | Instagram |
upmbiofore.com
UPM Interim Report Q2 2016:
http://hugin.info/165629/R/2030588/755336.pdf
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[HUG#2030588]
Unternehmensinformation / Kurzprofil:
Datum: 26.07.2016 - 08:15 Uhr
Sprache: Deutsch
News-ID 485252
Anzahl Zeichen: 12602
contact information:
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Helsinki
Kategorie:
Business News
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