UPM Delivers Strong Cash Flow in 2025, Advances Strategic Portfolio Transformation

Helsinki, Finland – UPM closed 2025 with a strong operational cash flow and decisive strategic actions, despite a challenging macroeconomic environment marked by geopolitical tensions and weaker consumer confidence.

UPM’s full-year sales totaled €9.7 billion, with comparable EBIT of €921 million, reflecting pressure from lower prices and adverse currency impacts. However, operating cash flow reached €1.4 billion, underlining the resilience of UPM’s diversified business portfolio and disciplined cost management.

A major milestone during the year was the start of commercial deliveries from the UPM Leuna biorefinery, marking UPM’s entry into large-scale biochemicals production. The company also sharpened its growth focus by discontinuing the Rotterdam biofuels refinery project and streamlining its business portfolio.

UPM took several strategic steps to strengthen long-term value creation, including the acquisition of Metamark to accelerate growth in Adhesive Materials and the announcement of a planned graphic paper joint venture with Sappi. In parallel, UPM initiated a strategic review of its Plywood business, exploring options including a potential divestment or IPO.

In line with its capital allocation priorities, UPM completed a €160 million share buyback program and proposes an unchanged dividend of €1.50 per share for 2025.

Looking ahead, UPM enters 2026 with cautious optimism, focusing on performance improvement, cash generation, balance sheet strength and execution of strategic portfolio initiatives.

📊 KEY FINANCIAL HIGHLIGHTS (2025)

• Sales: €9,656 million (2024: €10,339 million)

• Comparable EBIT: €921 million (2024: €1,224 million)

• Operating Cash Flow: €1,405 million (2024: €1,352 million)

• Net Debt: €3.0 billion

• Net Debt / EBITDA: 2.29x

• Capital Expenditure (excl. shares): €409 million

• Employees (year-end): 15,127

🏗️ PROJECTS & INVESTMENTS

Leuna Biochemicals Biorefinery (Germany)

• Total investment: €1.335 billion

• First commercial deliveries of industrial sugars in Q4 2025

• Additional products (lignin, renewable fillers, glycols) to launch in 2026

• Expected full capacity and positive EBIT in 2027

Adhesive Materials Expansion

• Investments in:

  • Mills River, North Carolina (USA) – capacity expansion

  • Johor Bahru, Malaysia – new coating line

  • Near Hanoi, Vietnam – slitting & distribution terminal

🛑 SHUTDOWNS & RESTRUCTURING

• Paper production closures completed:

  • Ettringen, Germany

  • Kaukas, Finland

• Production discontinued:

  • Nancy, France (Adhesive Materials)

• Structural reduction of graphic paper capacity by ~13%

• Ongoing restructuring and efficiency measures across businesses

💼 MERGERS, ACQUISITIONS & PARTNERSHIPS

Acquisition

• Metamark (UK) acquired in February 2025 to strengthen Adhesive Materials

Planned Joint Venture

• UPM & Sappi graphic paper JV

• 50/50 ownership, enterprise value €1.42 billion

• Expected synergies: ~€100 million annually

• Closing expected by end of 2026, subject to approvals

Strategic Partnership

• Versowood partnership to secure pulpwood supply in Finland

💰 CAPITAL EXPENDITURE & CASH USE

• 2025 Capex (excl. shares): €409 million

• 2026 Capex guidance: ~€300 million

• Share buyback: 6 million shares for ~€160 million (completed & cancelled)

👥 WORKFORCE / LAYOFF IMPACT

• Employees reduced from 15,827 → 15,127

• Reduction driven by mill closures and restructuring

• No single large layoff program announced, but continuous efficiency actions

💸 DIVIDEND

• Proposed dividend: €1.50 per share (unchanged)

• Payable in two installments:

  • €0.75 – April 21, 2026

  • €0.75 – November 6, 2026

• Represents 113% of comparable EPS

🔮 OUTLOOK & FUTURE PLANS

• H1 2026 comparable EBIT guidance: €325–525 million

• Focus areas:

  • Growth in advanced materials & decarbonization solutions

  • Portfolio simplification

  • Strong cash generation

  • Balance sheet strengthening

• Continued ramp-up costs at Leuna expected in early 2026

• Weak graphic paper markets remain a headwind