upm q1 results 2014 · 2018. 9. 10. · upm business outlook for h1 2014 is broadly stable ) )...

Jussi Pesonen

President and CEO

29 April 2014

UPM Q1 RESULTS 2014

| © UPM

Strong Q1 2014 results show momentum in

the profit improvement programme

Q1/14 EBITDA was EUR 313m (284m in Q1/13)

Profit improvement programme progressed fast, with 78% of the

targeted annualised EUR 200m cost savings achieved in Q1/14

Operating profit excl. special items was EUR 196m (144m in Q1/13)

Strong operating cash flow of EUR 264m (103m in Q1/13)

Net debt decreased to EUR 2,777m (3,199m in Q1/13) and net debt

to EBITDA to 2.4x (2.6x in Q1/13)

| © UPM 2

| © UPM

Profit improvement programme

progressing fast

0

50

100

150

200

250

Q213 Q313 Q413 Q114 Q214 Q314 Q414 Q115

3

EUR million

Full impact of the programme is expected by the end

of 2014 as compared with the Q2/13 results

78%

achieved

in Q1/14 EUR 200m of

annualised

fixed and

variable cost

savings

| © UPM

Profitability improvement programme

visible in operating profit

0

50

100

150

200

250

300

Q111 Q211 Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213 Q313 Q413 Q114

Operating profit excluding special items

4

196 7.9%

144 5.8%

EUR million

| © UPM

0

50

100

150

200

250

300

350

400

EBITDA

Q1/13

EBITDA

Q1/14

EBITDA in Q1 2014 vs. Q1 2013

Raflatac

Paper

Asia Other

operations

and

eliminations

Energy

Biorefining Paper

ENA

Plywood

0

50

100

150

200

250

300

350

400

EBITDA

Q1/13

EBITDA

Q1/14

EUR million

Prices,

currency

Variable

costs

Fixed

costs

Deliveries

Significant cost savings

Currencies and paper prices had a

negative impact EUR million

Significant improvement in UPM Paper ENA

UPM Biorefining lower due to maintenance

and currencies

5

284 11.5%

313 12.6%

Eliminations

284 11.5%

313 12.6%

| © UPM

Operating profit *) by business area

6

0

2

4

6

8

10

0

10

20

30

40

50

Q312

Q412

Q113

Q213

Q313

Q413

Q114

0

4

8

12

16

20

0

20

40

60

80

100

Q312

Q412

Q113

Q213

Q313

Q413

Q114

0

10

20

30

40

50

0

20

40

60

80

100

Q312

Q412

Q113

Q213

Q313

Q413

Q114

0

2

4

6

8

10

0

10

20

30

40

50

Q312

Q412

Q113

Q213

Q313

Q413

Q114

-4

-2

0

2

4

6

-40

-20

0

20

40

60

Q312

Q412

Q113

Q213

Q313

Q413

Q114

-3

0

3

6

9

12

-5

0

5

10

15

20

Q312

Q412

Q113

Q213

Q313

Q413

Q114

EURm % of sales UPM Paper Asia EURm % of sales UPM Paper ENA EURm % of sales UPM Plywood

EURm % of sales UPM Raflatac EURm % of sales UPM Energy EURm % of sales UPM Biorefining

*) excluding special items

| © UPM

Strong cash flow

7

0

200

400

600

800

1 000

1 200

1 400

Q10

8

Q30

8

Q10

9

Q30

9

Q11

0

Q31

0

Q11

1

Q31

1

Q11

2

Q31

2

Q11

3

Q31

3Operating cash flow

Cash flow

after investing

activities

EUR million Cash flow, trailing 12 months

• Q1 2014 operating cash

flow was EUR 264m (103m)

• Last 12 months’ operating

cash flow was EUR 896m

(925m)

| © UPM

Further strengthening balance sheet

8

2 000

2 500

3 000

3 500

4 000

4 500

5 000

5 500

2008

2009

2010

2011

2012

2013

2014

1,0

1,5

2,0

2,5

3,0

3,5

4,0

4,5

Net debt, EUR million Net debt / EBITDA (trailing 12 months)

Net debt

Net debt / EBITDA

2.4

2 000

2 500

3 000

3 500

4 000

4 500

5 000

5 500

2008

2009

2010

2011

2012

2013

2014

20

30

40

50

60

70

80

90

Net debt, EUR million Gearing %

Net debt

Gearing

37

Liquidity was EUR 2.0bn at the end of Q1 2014

Repayments total EUR 0.5bn in 2014

| © UPM

UPM business outlook for H1 2014

is broadly stable *)

*) See complete wording of the "Outlook"

in the Q1 2014 interim report

• In H1 2014, UPM’s performance is expected to be underpinned by stable overall outlook for UPM Energy, UPM Raflatac, UPM Paper Asia and UPM Plywood, compared with H2 2013.

• Profitability of UPM Paper ENA is expected to improve due to the on-going cost reduction measures. In H1 2014 compared with H2 2013, performance is negatively impacted by lower delivery volumes, including seasonal factors.

• In UPM Biorefining, capacity additions in the global pulp market are expected to impact on the pulp market balance as the year progresses.

| © UPM 9

| © UPM

Progress in the growth projects targeting

EUR 200m of additional EBITDA

Decisions in 2014

• Changshu labelling materials, 360,000t, start-up by the end of 2015

• Kymi pulp mill expansion, 170,000t, start-up by the end of 2015

• 50% increase in self-adhesive labelstock coating capacity in APAC,

start-up by the end of 2014

Continued implementation

• Lappeenranta renewable diesel, 100,000t start-up summer 2014

• Pietarsaari pulp mill expansion, 70,000t, start-up summer 2014

Further debottlenecking potential at Fray Bentos and Kaukas pulp mills

Targeted additional EBITDA EUR 200m when all projects in full

operation, total capex estimate EUR 680m over three years

10

| © UPM

Low investment needs in existing assets allow

growth projects with modest total capex

11

0

200

400

600

800

1 000

1 200

2008 2009 2010 2011 2012 2013 2014e

EUR million

Operational investments

329

Capital expenditure

Strategic investments

Depreciation

Uruguay

acquisition

Myllykoski

acquisition

450

Estimate

| © UPM

Summary

• Strong Q1 2014 results thanks to fast implementation

of the profit improvement programme

• Strong cash flow and further strengthening balance

sheet

• Solid progress in growth projects

12

| © UPM

Profit

improvement

programme

EUR 200m

Shifting gear in UPM transformation

13

UPM

Biorefining

UPM

Paper

Asia

UPM

Raflatac

UPM

Energy

UPM

Paper

ENA

UPM

Plywood

EBITDA target for

growth initiatives

EUR 200m

Biofuels:

Lappeenranta

biorefinery

Pulp: 10%

capacity increase

Labelling materials

Changshu expansion

Self-adhesive labels:

advancing in growth

markets and in higher

value added products

Business portfolio

development and

value creation

BIOCHEMICALS

BIOCOMPOSITES

BIOFUELS

New businesses

FINANCIALS Q1 2014

| © UPM

Q1 2014 key figures

EUR million Q1 2014 Q1 2013 Q4 2013 2013

Sales 2,481 2,474 2,588 10,054

sales growth, % +0% -5% -3% -4%

EBITDA 313 284 302 1,155

% of sales 12.6 11.5 11.7 11.5

Operating profit *) 196 144 207 683

Profit before tax *) 176 129 188 610

Earnings per share, EUR *) 0.27 0.18 0.27 0.91

Operating cash flow 264 103 262 735

Net debt 2,777 3,199 3,040 3,040

Gearing % 37 42 41 41

16


| © UPM

Cash flow

EUR million Q1/14 Q1/13 Q4/13 2013

EBITDA 313 284 302 1,155

Cash flow before change in working capital 297 234 289 1,085

Change in working capital 1 -96 57 -128

Finance costs and income taxes -34 -35 -84 -222

Net cash from operating activities 264 103 262 735

Capital expenditure -68 -98 -91 -337

Asset sales and acquisitions 69 -7 55 40

Cash flow after investing activities 265 -2 226 438

17

| © UPM

Maturity profile and liquidity

18

0

100

200

300

400

500

600

700

800

900

1 000

2014

2015

2016

2017

2018

2019

2020-2

026

2027

2028

2029

2030

EUR million

0

100

200

300

400

500

600

700

800

900

1 000

2014

2015

2016

2017

2018

2019

2020-2

026

2027

2028

2029

2030

EUR million

Liquidity

Liquidity on 31 March 2014 was EUR 2.0bn

(cash and unused credit facilities)

• syndicated credit facility EUR 500 million

• bilateral committed credit facilities EUR 525 million

Committed credit facilities EUR 1.025bn

Maturity profile of outstanding debt Committed credit facilities’ maturities

| © UPM

UPM Biorefining Q1 2014 vs. Q1 2013

19

0

20

40

60

80

100

Q1 12

Q2 12

Q3 12

Q4 12

Q1 13

Q2 13

Q3 13

Q4 13

Q1 14

0

4

8

12

16

20

Q1 2014 496 Q1 2013 495

Sales EUR million

-14 Q1 2014 56 Q1 2013 70


EUR million

Operating profit EUR million*)


EUR million

% of sales Business performance

• Operating profit decreased mainly due

to a scheduled maintenance shutdown

at the UPM Kaukas pulp mill. Higher

delivery volumes and lower variable

costs offset the impact of adverse

currency development.

• Pulp deliveries increased by 3% to

816,000 tonnes (790,000).

0%

| © UPM

UPM Energy Q1 2014 vs. Q1 2013

20

0

20

40

60

80

100

Q1 12

Q2 12

Q3 12

Q4 12

Q1 13

Q2 13

Q3 13

Q4 13

Q1 14

0

10

20

30

40

50

Q1 2014 124 Q1 2013 132

Sales EUR million

1 Q1 2014 56 Q1 2013 55




EUR million

Business performance

• Operating profit increased slightly as

the decrease in costs offset the impact

of lower average sales prices.

• The average electricity sales price

decreased by 2% to EUR 45.8/MWh

(46.8/MWh).

-6%

EUR million % of sales

| © UPM

UPM Raflatac Q1 2014 vs. Q1 2013

21

0

10

20

30

40

50

Q1 12

Q2 12

Q3 12

Q4 12

Q1 13

Q2 13

Q3 13

Q4 13

Q1 14

0

2

4

6

8

10

Q1 2014 300 Q1 2013 299

Sales EUR million

2 Q1 2014 20 Q1 2013 18



EUR million


• Operating profit increased mainly due

to higher delivery volumes and lower

fixed costs, more than offsetting the

negative currency impact.


1%


| © UPM

UPM Paper Asia Q1 2014 vs. Q1 2013

22

0

10

20

30

40

50

Q1 12

Q2 12

Q3 12

Q4 12

Q1 13

Q2 13

Q3 13

Q4 13

Q1 14

0

3

6

9

12

15

Q1 2014 277 Q1 2013 277

Sales EUR million

Q1 2014 25 Q1 2013 22




EUR million


• Operating profit increased mainly due

to lower variable and fixed costs.

• Average sales prices were lower mainly

due to negative currency impact.

• Paper deliveries increased by 2% to

347,000 tonnes (339,000).

0% 3


| © UPM

UPM Paper ENA Q1 2014 vs. Q1 2013

23

-40

-20

0

20

40

60

Q1 12

Q2 12

Q3 12

Q4 12

Q1 13

Q2 13

Q3 13

Q4 13

Q1 14

-4

-2

0

2

4

6

Q1 2014 1,334 Q1 2013 1,365

Sales EUR million

79 Q1 2014 42 Q1 2013 -37




EUR million

-2%


• Operating profit increased mainly due to

lower variable and fixed costs, partly driven

by the ongoing profit improvement

programme.

• The average price for all paper deliveries in

euros was approximately 2% lower than

last year.

• Paper deliveries were 2,148,000 tonnes

(2,139,000).


| © UPM

UPM Plywood Q1 2014 vs. Q1 2013

24

-5

0

5

10

15

20

Q1 12

Q2 12

Q3 12

Q4 12

Q1 13

Q2 13

Q3 13

Q4 13

Q1 14

-3

0

3

6

9

12

Q1 2014 114 Q1 2013 108

Sales EUR million

7 Q1 2014 11 Q1 2013 4



6% EUR

million


• Operating profit improved due to improved

sales margin resulting from higher sales

prices and a favourable sales mix, as well

as lower variable unit costs.

• Deliveries increased by 1% to 188,000

cubic metres (186,000).



upm q1 results 2014 · 2018. 9. 10. · upm business outlook for h1 2014 is broadly stable *) *)...

Documents

upm q1 results 2014 · 2018. 9. 10. · upm business outlook for h1 2014 is broadly stable ) )...