UPM: Sales decreased by 15% to EUR 2,287 million in Q1 2020

Sales decreased by 15% to EUR 2,287 million (2,693 million in Q1 2019) due to lower pulp and paper prices and lower deliveries of graphic papers. Comparable EBIT decreased by 26% to EUR 279 million (374 million). UPM Raflatac and UPM Specialty Papers achieved record comparable EBIT.

The industry-wide strike in Finland affected UPM’s pulp and paper businesses for two weeks and timber and plywood businesses for four weeks. The COVID-19 pandemic did not materially impact UPM’s operations in Q1 2020. UPM implemented extensive precautions to protect the health and safety of its employees and to ensure business continuity and progress of strategic projects during the pandemic.

UPM is planning to use shift arrangements, temporary layoffs, or reduced working hours as required to adjust its operations in different scenarios. UPM’s transformative pulp project in Uruguay and biochemicals project in Germany are proceeding in line with the planned start-up timeline

Jussi Pesonen, President and CEO, comments on Q1 2020 results: “The key foundation in implementing our transformation strategy has been a very strong balance sheet and an agile and efficient operating model. Therefore, we are well prepared for the current uncertainty and can continue implementing our strategy and growth projects.

The global socioeconomic outlook has changed dramatically since January as the COVID-19 outbreak in China quickly developed into a worldwide pandemic. We implemented extensive precautions to protect the health and safety of our employees and to ensure business continuity and the progress of strategic projects. UPMers proactive and diligent response to the pandemic has allowed us to run our operations uninterrupted.

During the first quarter our businesses were not significantly impacted by the pandemic—not even in China—and we are able to report solid results. Our sales were EUR 2,287 million and comparable EBIT was EUR 279 million. First quarter operating cash flow was seasonally low, after the record level in Q4. Our financial position is exceptionally strong. UPM has net cash in the balance sheet (net debt EUR -405 million), and our liquidity totalled EUR 2.2 billion at the end of March.