UPM-Kymmene - Financial Statement Release

Interim report Q4/2015: UPM finished 2015 with a strong quarter, growth projects deliver earnings

UPM-Kymmene Corporation     Financial Statements release     2 February 2016 at
9:30 EET

Interim report Q4/2015: UPM finished 2015 with a strong quarter, growth projects
deliver earnings

Q4 2015 compared with Q4 2014
· Earnings per share excluding special items were EUR 0.37 (0.32) and reported
EUR 0.36 (0.01)
· Operating profit excluding special items was EUR 225 million, 8.7% of sales
(230 million, 9.1% of sales)
· Growth projects began contributing to UPM's earnings, with a strong start in
the expanded UPM Kymi pulp mill and UPM Biofuels reaching break-even level. In
addition, the speciality paper machine at the UPM Changshu mill in China started
production in December
· The profit improvement programme exceeded its target, reaching a cost
reduction impact of EUR 41 million in Q4 2015 (annualised EUR 165 million)
· Operating cash flow was strong at EUR 390 million (462 million), and net debt
decreased to EUR 2,100 million (2,401 million)

Full year 2015 compared with 2014
· Earnings per share excluding special items were EUR 1.75 (1.17) and reported
EUR 1.72 (0.96)
· Operating profit excluding special items was EUR 1,163 million, 11.5% of sales
(847 million, 8.6% of sales)
· In 2015, UPM completed several growth projects: the speciality paper machine
at UPM Changshu mill, expansion of the UPM Kymi pulp mill, Lappeenranta advanced
biofuel refinery and UPM Raflatac expansions in Poland and APAC. New expansion
projects began at the Kaukas pulp mill and Otepää plywood mill
· UPM closed 800,000 tonnes of graphic paper production capacity in Europe in H1
2015
· The Board proposes a dividend of EUR 0.75 (0.70) per share, representing 34%
of operating cash flow per share

 Key figures            Q4/2015 Q4/2014 Q3/2015 ((2) Q1-Q4/2015( (2) Q1-Q4/2014

 Sales, EURm              2,574   2,531        2,530          10,138      9,868

 EBITDA, EURm (1))          363     334          345           1,350      1,306

   % of sales              14.1    13.2         13.6            13.3       13.2

 Operating profit
 (loss), EURm               220      71          513           1,142        674

   excluding special
 items, EURm                225     230          507           1,163        847

   % of sales               8.7     9.1         20.0            11.5        8.6

 Profit (loss) before
 tax, EURm                  214      57          498           1,075        667

   excluding special
 items, EURm                219     216          492           1,096        774

 Profit (loss) for the
 period, EURm               193       8          408             916        512

 Earnings per share,
 EUR                       0.36    0.01         0.77            1.72       0.96

   excluding special
 items, EUR                0.37    0.32         0.76            1.75       1.17

 Operating cash flow
 per share, EUR            0.73    0.86         0.68            2.22       2.33

 Equity per share at
 end of period, EUR       14.89   14.02        14.89           14.89      14.02

 Gearing ratio at end
 of period, %                26      32           31              26         32

 Net interest-bearing
 liabilities at end of
 period, EURm             2,100   2,401        2,465           2,100      2,401

1) EBITDA is operating profit before depreciation, amortisation and impairment
charges, excluding the change in fair value of biological assets and wood
harvested, excluding the change in fair value of unrealised cash flow and
commodity hedges, excluding the share of results of associated companies and
joint ventures, and special items.
2) Includes a fair value increase of biological assets in Finland totalling EUR
265 million, due to adjusted long-term wood price estimates and a change in the
discount rate.

Jussi Pesonen, President and CEO, comments on Q4 and full year 2015 results:

"UPM finished 2015 on a strong note. The fourth quarter was the best of the year
thanks to solid business performance. The profit improvement programme exceeded
its target and the growth projects started to deliver earnings. EBITDA reached a
higher level than in five years and our strong cash flow drove net debt to a new
record-low level.

Several of our growth projects have now been completed and I'm very pleased to
see that they have already contributed to the cash flow.

The UPM Kymi pulp mill expansion was a success and we reached a record-high pulp
production in December. UPM Biofuels picked up steam as the year went on and
reached a break-even level during the last quarter. UPM Changshu's speciality
paper machine ramp-up started well in December and UPM Raflatac's investments
have already contributed to our earnings during the second half of the year.

It is worth pointing out that much of the good performance was driven by our own
actions. UPM Biorefining and UPM Raflatac were the highlights of the quarter
both in terms of own profitability actions and good timing in growth projects.
UPM Energy and UPM Plywood showed solid performances. UPM Paper ENA had its best
quarter of 2015 thanks to continuous profit improvement actions. UPM Paper
Asia's performance was supported by own cost actions as the business faced
increased regional competition.

UPM's Board of Directors has today proposed that the dividend for the 2015 is
increased to EUR 0.75  (0.70) per share which is 34% of the operating cash flow
per share. I believe the Board's proposal reflects confidence in UPM's ability
to generate growth in earnings and cash flow.

All in all, 2015 was a good year for UPM and provides a solid foundation, even
in a somewhat uncertain environment in 2016. We are starting the year with a
stronger balance sheet than ever. Our investment levels are decreasing and
earnings and cash flow from growth projects are starting to materialise. We will
maintain cost competitiveness and strive to achieve top performance in our
businesses. We are confident about our prospects for 2016."

Outlook for 2016

UPM's profitability improved in 2015 and the improvement is expected to continue
in 2016. The business performance is underpinned by the company's growth
projects and continuous cost efficiency measures.

UPM's growth projects are expected to contribute positively to the company's
earnings in 2016, compared with 2015. UPM continues its measures to reduce
variable and fixed costs also in 2016. Currencies are expected to contribute
positively as hedges roll over, assuming relevant currencies stay at the same
level as at the end of 2015.

Conference call and press conference

UPM's President and CEO Jussi Pesonen will present the results in a conference
call and a webcast for analysts and investors. The call will be conducted in
English on 2 February 2016 at 13:15 EET.

Later in the afternoon, Jussi Pesonen will present the results in a press
conference conducted in Finnish at the UPM Group Head Office (The Biofore House)
in Helsinki, Alvar Aallon katu 1, at 14:30 EET.

Conference call and webcast details:

The conference call can be participated in either by dialling a number in the
list below or following the webcast online at www.upm.com or through this link.

Only participants who wish to ask questions in the conference call need to dial
in. All participants can view the webcast presentation online. We recommend that
participants start dialling in 5-10 minutes prior to the start to ensure that
the conference can start on time.

The presentation will be available at www.upm.com for 12 months after the call.

Conference call title: UPM Financial Results 2015

 Direct telephone numbers:



 BE: +3224040635

 DK: +45 823 331 78

 FI: +358981710495

 FR: +33170721541

 UK: +442031940552

 NO: +4723500211

 SE: +46856642702

 US: +18557161597



 International telephone numbers with a pin code 77500392 #



 AU: +61 29253 5844

 AT: +43 19282 258

 CH: +44 44580 0083

 CN: +86 400 681 5421

 DE: +49 030 221 510 067

 ES: +34 911 143 608

 HK: +852 3068 9834

 IN: 0018038524634

 IR: +353 1696 8154

 IT: +39 2 3604 6798


**

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, 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. For more detailed information about risk
factors, see pages 76-77 of the company's annual report 2014.

**

UPM-Kymmene Corporation
Pirkko Harrela
Executive Vice President, Stakeholder Relations

UPM, Media Relations
9.00-16.00 EET
tel. +358 40 588 3284
media@upm.com

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UPM
Through the renewing of the bio and forest industries, UPM is building a
sustainable future across six business areas: UPM Biorefining, UPM Energy, UPM
Raflatac, UPM Paper Asia, UPM Paper Europe and North America and UPM Plywood.
Our products are made of renewable raw materials and are recyclable. We serve
our customers worldwide. The group employs around 19,600 people and its annual
sales are approximately EUR 10 billion. UPM shares are listed on NASDAQ OMX
Helsinki. UPM - The Biofore Company - www.upm.com



[HUG#1982925]

Attachments:

UPM Financial Statement Release 2015.pdf