2010-02-02 08:30:00 CET
2010-02-02 08:30:29 CET
REGULATED INFORMATION
UPM-Kymmene - Company Announcement
Tight cost control was driving UPM's profits; Demand slowly recovering in most businesses
UPM-Kymmene Corporation Stock exchange release 2 February 2010 at 09:30 Tight cost control was driving UPM's profits; Demand slowly recovering in most businesses October-December 2009: Earnings per share were EUR 0.57 (-0.56), excluding special items EUR 0.21 (-0.19). Operating profit excluding special items was EUR 186 million (loss of EUR 46 million). Stringent cost control contributed to profit improvement, EBITDA margin was 17.2 %. Demand has started to improve. January-December 2009: Earnings per share were EUR 0.33 (-0.35), excluding special items EUR 0.11 (0.42). Operating profit excluding special items was EUR 270 million (513 million). Strong operating cash flow of EUR 1,259 million, net debt reduced by EUR 591 million. Fixed cost savings worth EUR 300 million. Jussi Pesonen, UPM's President and CEO, comments on the financial review for 2009: "Tight cost control and flexible operations proved to be a good solution in the challenging business environment of 2009. Given the circumstances, UPM was able to achieve a good full year result in 2009. The Board of Directors' proposal for dividend, EUR 0,45, is in line with the company's dividend policy.""Demand for all of our products was affected by the global recession, and our sales dropped by 18% during the year, severely impacting the profitability of our operations. Lower sales prices also impacted operating profit negatively.""In response, timely cost savings and temporary production curtailments were applied in all of our business areas. Due to cost savings measures, the company's fixed costs decreased by EUR 300 million from the previous year. These successful savings were crucial for our financial performance in 2009.""The operating cash flow was strong, amounting up to EUR 1,259 million for the full year. We were able to reduce our debt by EUR 591 million and clearly improve the gearing.""All these figures show that our organisation stayed very focused and was prepared and agile to respond to the weakened economy.""In Paper and Label businesses, the internal improvements were necessary and they were professionally implemented. In Label, a quick and clear turnaround was achieved. In Plywood and Timber, the markets declined substantially in the course of the year which resulted in extensive production downtimes. Eventually, restructuring in Finland was necessary to improve long-term cost competitiveness of these businesses.""In 2009, the restructuring of Botnia ownership was a major strategic milestone for our company. Now we have not only excellent assets and people in Uruguay, but also a clear structure in our pulp operations, Fray Bentos cash flow in our full control and a solid bridgehead in Latin America.""The current year will pose challenges, but we see signs of improvement, too. However, in our main markets recovery is expected to be slow and differ from country to country. Low capacity utilisation rates and a flexible way of working in our timber, plywood and European paper mills will continue.""In 2010 we expect the pulp business to improve, and we can gain the benefits of Uruguayan operations to the full. Also paper deliveries are expected to be higher than last year. However, average price for all paper deliveries will be clearly lower than last year. Demand is estimated to improve in self-adhesive labelstock.""The operating profit for this year is not expected to change materially from last year. The first quarter is expected to be seasonally the weakest quarter. Capital expenditure for this year is forecast to be approximately EUR 300 million," says Pesonen. 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 *** News conference and conference call information UPM's President and CEO Jussi Pesonen will present the Financial Review for 2009 in a press conference to be held at the UPM Head Office in Helsinki (main entrance Eteläesplanadi 2) today at 14:00 Finnish time (12:00 GMT, 07:00 EST). You can listen online to the joint press conference for media and financial analysts 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 also take place today at 17:00 Finnish time (15:00 GMT, 10:00 EST). Participants pre-register for the conference call via this link: https://eventreg1.conferencing.com/webportal3/reg.html?Acc=494174&Conf=170571 After the pre-registration, each participant will receive by e-mail the conference call number, a participant user pin, conference pin and instructions on how to join the conference call. When you dial the number you have received, be ready to state the conference ID, conference title and give the password for the conference that you would like to attend. You will be asked for your details, such as name, company name and city location, before being connected to the conference. We recommend that participants start dialling in 5-10 minutes prior to ensure a timely start to the conference. In case the phone number you have received by e-mail after the pre-registration should not work, an operator will connect you to the conference call when you dial your local number: US: +1 334 323 6201 Austria: +43 (0)268 2205 6292 Belgium: +32 (0)2 290 14 07 Czech Republic: +420 (2)3900 0635 Denmark: +45 3271 4607 France: +33 (0)1 7099 3208 Germany: +49 (0)695 8999 0507 Hungary: +36 (0)618 8932 15 Ireland: +353 (0)1 4364 106 Italy: +39 023 0350 9003 Luxembourg: +352 270 0073 408 Netherlands: +31 (0)20 7965 008 Norway: +47 2156 312 0 Spain: +34 9178 8989 6 Sweden: +46 (0)8 5052 0110 Switzerland (Geneva): +41 (0)2 2592 7007 Switzerland (Zurich): +41 (0)434 5692 61 UK: +44 (0)20 7162 0077 Conference call title: UPM Financial Review 2009 Conference ID: 855854 Dial-in numbers for replay, available until 9 February 2010: Access code: 855854 020 7031 4064 -- UK London +43 (0) 26822056415 -- Austria Vienna +34 917889714 -- Spain Madrid +46 (0) 850520333 -- Sweden Stockholm +41 (0) 225927181 -- Switzerland Geneva +358 (0) 923144681 -- Finland Helsinki +47 21501292 -- Norway Oslo 08003581860 -- UK Tollfree 1-888-365-0240 -- US Tollfree 1-954-334-0342 -- US Toll +49 08001012111 -- FP Germany 08003581867 -- VRP Tollfree UK +32 (0) 22901705 -- Belgium Brussels +61(0)2 82239748 -- Australia Sydney +852 30114552 -- Hong Kong 900801884 -- Spain Tollfree +65 66221306 -- Singapore Singapore 0008001003597 -- India Toll Free +45 32714892 -- Denmark Copenhagen +33 (0) 170993529 -- France Paris +49 (0) 30726167224 -- Germany Berlin +353 (0) 14367610 -- Ireland Dublin +39 02303509364 -- Italy Milan +31 (0) 207965345 -- Netherland Amsterdam 800782056 -- Portugal Toll Free *** 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 UPM, Corporate Communications Media Desk, tel. +358 40 588 3284 communications@upm-kymmene.com DISTRIBUTION NASDAQ OMX Helsinki Ltd Main media www.upm-kymmene.com
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