UPM-Kymmene - Company Announcement

UPM's profitability suffered from lower demand across all businesses

UPM-Kymmene Corporation   Stock exchange release  29 April 2009  at 09:30       

UPM's profitability suffered from lower demand across all businesses            

Interim report January-March 2009: Earnings per share for the first quarter were
EUR -0.30 (EUR 0.20), and excluding special items EUR -0.27 (EUR 0.19).         
Operating loss was EUR 95 million (profit of EUR 193 million), and excluding    
special items operating loss was EUR 78 million (profit of EUR 188 million).    
Operating cash flow was EUR 274 million (EUR 50 million).                       

Jussi Pesonen, UPM's President and CEO, comments on the result of the first     
quarter of 2009:                                                                "Sales for the first quarter were 23% lower than a year ago. Demand for papers, 
labels, plywood and sawn timber dropped and we had significantly lower          
deliveries across all of UPM's businesses. Thus our profitability declined      
markedly and we made an operating loss.""Operating in these extreme circumstances has been challenging. Despite this,   
the EBITDA margin of our Paper business improved. Paper has managed the         
situation by maintaining higher prices, streamlining operations and adjusting   
production to demand. We also paid particular attention to the market and       
customer mix.""The focus has been on cash preservation and cost savings. The operating cash   
flow was good. Thanks to permanent cost saving measures and temporary layoffs we
lowered fixed costs by EUR 70 million compared to last year. High wood and      
energy costs continue to remain a challenge.""During the past three years UPM has restructured production significantly and  
renewed the operating mode of the whole company. We now have an efficient       
portfolio of assets and a fit-for-purpose organisation which works well also in 
the current environment of slow growth.""This year we do not expect economic activity to pick up in a way that would    
have a substantial impact on the demand for our main products. This means       
markedly lower deliveries than last year and temporary production downtimes in  
most of our product lines."

For more information please contact:                                            
Mr Jussi Pesonen, President and CEO, UPM, tel. +358 204 15 0001                 
Mr Jyrki Salo, Executive Vice President and CFO, UPM, tel. +358 204 15 0011     

UPM, Corporate Communications                                                   
Media Desk, tel. +358 40 588 3284                                               
communications@upm-kymmene.com                                                  

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News conference and conference call information                                 

UPM's President and CEO Jussi Pesonen will present the Interim Report for       
January-March 2009 in a press conference to be held at the UPM Head Office in   
Helsinki (main entrance Eteläesplanadi 2) today on 29 April 2009 at 14:00       
Finnish time (11:00 GMT, 07:00 EST).                                            

The joint press conference for media and financial analysts can be listened     
online at www.upm-kymmene.com. The on-demand version of the audio cast will be  
available online for three months.                                              

A conference call for analysts and investors, hosted by UPM's President and CEO 
Jussi Pesonen, will take place today on 29 April 2009 at 17:00 Finnish time     
(14:00 GMT, 10:00 EST, please see dial-in details below). Participants are      
registered by the operator before the start of the conference call. In order to 
ensure a timely conference start, please dial in 10 minutes before the          
conference start time.                                                          

Dial-in numbers for conference call:                               
Call title: UPM Interim Review Q1 2009                                          
Access code: 95347986                                                           
International dial-in: +44 (0) 1452 555 566                                     
UK free call: 0800 694 0257                                                     
UK local call: 0844 493 3800                                                    
USA free call: 1866 966 9439                                                    

Dial-in numbers for replay, available until 5 May 2009:                         
Access code: 95347986#                                                          
International dial-in: +44 (0) 1452 550 000                                     
UK free dial-in: 0800 953 1533                                                  
UK local dial-in: 0845 245 5205                                                 
USA free dial-in: 1866 247 4222                                                 

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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, and 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.                                                 


UPM-Kymmene Corporation                                                         
Pirkko Harrela                                                                  
Executive Vice President, Corporate Communications                              

DISTRIBUTION                                                                    
NASDAQ OMX Helsinki Ltd                                                         
Main media                                                                      
www.upm-kymmene.com