UPM closes 2025 with strong cash flow and advances strategic portfolio actions

UPM-Kymmene Corporation reported a positive finish to 2025, supported by strong cash flow generation and decisive strategic actions. In the fourth quarter of 2025, UPM recorded sales of €2,312 million, compared with €2,632 million in the same period of the previous year. Comparable EBIT declined by 15% year-on-year to €355 million, representing 15.3% of sales, while operating cash flow increased significantly to €720 million. Net debt at year-end stood at €3,004 million, with a net debt to EBITDA ratio of 2.29.

Among the key operational milestones of the quarter, the UPM Leuna biorefinery made its first customer deliveries. UPM Adhesive Materials announced growth investments in the United States, Malaysia and Vietnam, while discontinuing production in Nancy, France. UPM and Sappi signed a non-binding letter of intent to form a joint venture in graphic papers, and UPM continued to streamline its portfolio by closing paper production at Ettringen in Germany and Kaukas in Finland, as well as selling the previously closed Plattling paper mill site in Germany.

For the full year 2025, UPM reported sales of €9,656 million, compared with €10,339 million in 2024. Comparable EBIT decreased by 25% to €921 million, while operating cash flow remained strong at €1,405 million. During the year, UPM launched a share buy-back programme, repurchasing six million shares for approximately €160 million, and discontinued the biorefinery development in Rotterdam to sharpen its biofuels growth strategy. The company also entered into a strategic partnership with Versowood to strengthen pulpwood supply in Finland and initiated a strategic review of its plywood business.

UPM further strengthened its sustainability credentials in 2025, receiving a Platinum rating from EcoVadis, placing the group in the top 1% globally, and gaining recognition from CDP and S&P Global. UPM was also listed as the only forest and paper industry company included in the Dow Jones Global and European Sustainability Indices for 2024–2025.

Commenting on the results, President and CEO Massimo Reynaudo said that 2025 was marked by escalating geopolitical and trade tensions, which negatively affected the business environment. He noted that intensified actions to improve competitiveness and advance the portfolio strategy resulted in improved performance across most businesses and particularly strong cash flow in the fourth quarter.

During the year, UPM executed several major strategic initiatives, including the acquisition of Metamark in Adhesive Materials, the refocusing of its biofuels strategy, the strategic review of UPM Plywood and the announcement of plans to establish a graphic paper joint venture combining UPM Communication Papers with Sappi’s European graphic paper operations.

Operationally, UPM continued to restructure its production footprint and implement efficiency measures across all businesses. In the fibres segment, performance improved in the fourth quarter, supported by cost management actions, stable maintenance execution and gradually improving hardwood pulp prices, although high wood costs and low softwood pulp prices continued to weigh on Fibres North. In advanced materials, Specialty Papers delivered improved results, while Adhesive Materials continued to grow faster than the market despite margin pressure. UPM Energy benefited from seasonally higher production volumes and favourable market prices, while UPM Biofuels returned to a positive EBIT contribution. In Biochemicals, commercial operations began with the first customer deliveries of industrial sugars.

Looking ahead, UPM entered 2026 with cautious optimism. While signs of market stabilisation have emerged, uncertainties related to geopolitics and trade remain. The company expects comparable EBIT in the first half of 2026 to be in the range of €325–525 million. Performance is anticipated to benefit from moderately higher sales prices, delivery volumes and lower variable costs, but to be held back by weak communication paper markets and ramp-up costs at the Leuna biorefinery.