Q4 2025 UPM-Kymmene Oyj Earnings Call Transcript
Key Points
- UPM-Kymmene Oyj (UPMKF) reported a strong operating cash flow of EUR720 million in Q4 2025, indicating robust financial health.
- The company successfully decreased its net debt while paying out the second installment of dividends, showcasing effective financial management.
- UPM-Kymmene Oyj (UPMKF) achieved a EUR10 per megawatt hour higher sales price in its energy business compared to average market prices, reflecting strong market positioning.
- The biofuels business returned to profitability in the second half of 2025, supported by improved market prices and operational efficiencies.
- The specialty materials business delivered robust results with an EBIT improvement of EUR20 million year-on-year, entering 2026 in a strong position to meet growing market demand.
- Q4 2025 EBIT decreased to EUR355 million from EUR418 million in the previous year, indicating a decline in profitability.
- The Fibres North platform in Finland experienced low softwood pulp prices and high wood costs, resulting in a negative EBIT of EUR11 million in Q4.
- The Communication Paper business faced challenges with an 8% decrease in European graphic paper demand in 2025, impacting overall performance.
- The UPM Leuna Biochemicals refinery is expected to incur increased costs during its production ramp-up, posing a headwind for the first half of 2026.
- Currency fluctuations negatively impacted UPM-Kymmene Oyj (UPMKF)'s comparable EBIT by about EUR50 million in 2025, highlighting exposure to exchange rate risks.
Hello, everyone. Welcome to UPM's quarter four results webcast. I am Massimo Reynaudo, I'm the CEO of UPM. Here with me is Tapio Korpeinen, the CFO of UPM. The year 2025 has been characterized by escalating geopolitical and trade tensions with multiple impacts and also on our business environment.
During the year and in response to the situation, we intensified our actions to both sharpen our competitiveness and to execute our portfolio strategy. This resulted in the fourth quarter in a visible improvement of our performance in most of our businesses.
Compared to the previous quarter, our cash flow resulted very strong, too. Our quarter four EBIT was EUR355 million compared to EUR418 million one year ago or one year earlier. The quarter four EBIT margin was nearly unchanged at 15.3% versus 15.9% in the previous year. The operating cash flow in quarter four, as I said, was strong at EUR720 million. And our net debt decreased while we also paid out the second installment of the
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