UPM financial statements release 2025: Positive finish to the year – strong cash flow and decisive strategic actions
In the fourth quarter of the year 2025, UPM-Kymmene Oyj`s sales totaled €2,312 million (2,632 million in Q4 2024). Comparable EBIT decreased by 15% to €355 million, 15.3% of sales (418 million, 15.9%) Operating cash flow was strong at €720 million (570 million). In year 2025 sales totaled €9,656 million (10,339 million in Q1-Q4 2024). Comparable EBIT decreased by 25% to €921 million, 9.5 % of sales (1,224 million, 11.8 %). Operating cash flow was €1,405 million (1,352 million).
Massimo Reynaudo, President and CEO, comments on the results:
“Year 2025 was characterized by escalating geopolitical and trade tensions, which had an adverse effect on our business environment. Amidst the trade uncertainties and weakening consumer confidence, we intensified actions to both sharpen our competitiveness and to execute our portfolio strategy. This resulted in a visible improvement of performance in most businesses and a very strong cash flow in the fourth quarter.
We launched significant strategic initiatives that continue to transform the company. In February, we acquired Metamark in Adhesive Materials. In May, we refocused our biofuels growth strategy and discontinued the biorefinery development in Rotterdam. In September, we started the strategic review of our Plywood business. In December, we announced the plan to establish a graphic paper joint venture that would encompass the UPM Communication Papers business and Sappi's graphic paper operations in Europe.
By these portfolio initiatives, we aim to change the profile of the company, increasing its growth focus and improving the margins and leverage. Future UPM would have an attractive portfolio focused on renewable fibres, advanced materials and decarbonization solutions. All these businesses operate in growing markets. Across these businesses UPM has shown a strong track record of realized growth above GDP.
During the year, we restructured our production footprint in Adhesive Materials and Communication Papers and took efficiency measures in all our businesses to increase competitiveness. In Finland, we mitigated the pulp and wood market challenges with production curtailments and entered into a long-term strategic partnership with Versowood, which will strengthen our position in the tight wood markets. We intensified our actions to improve working capital efficiency.
In Q4, the market environment started to stabilize. We improved our performance in most businesses compared to the preceding quarter, resulting in a comparable EBIT of €355 million. Q4 operating cash flow was particularly strong at €720 million. Net debt decreased during the quarter, while we also paid out the second instalment of dividends.
UPM Fibres’ performance in Q4 improved from the previous quarter. Fibres South performance continued strong, with good progress on cost management, well managed maintenance shutdown in UPM Fray Bentos and gradually increasing hardwood pulp prices. In Fibres North, performance improved but the combination of high wood cost and low softwood pulp prices resulted in a negative quarterly EBIT. During the second half of the year, we saw wood market prices decrease in Finland, with the cost impact materializing later during 2026.
In the advanced materials businesses, UPM Specialty Papers achieved good results, improving performance from the previous quarter and year-on-year. UPM Adhesive Materials continued to grow faster than the markets, but results were weighed down by lower margins during the quarter, and the ongoing efficiency measures are not yet fully visible in the results.
UPM Plywood had a solid quarter as production ran at full capacity. Demand for LNG birch plywood was strong whereas the market for spruce plywood remained challenging.
In decarbonization solutions, the various end markets continued to show positive development in Q4.
UPM Energy had a good quarter of seasonally higher production volumes and market prices. Our own optimization on the physical markets continued to generate strong results. Electrification continued to drive electricity demand growth in Finland.
UPM Biofuels had excellent production efficiency and improved market conditions and is now back in positive EBIT contribution. The business improved its performance each quarter throughout the year.
In UPM Biochemicals, we are now in commercial business, with the first customer deliveries of industrial sugars taking place in Q4. We will continue to introduce further products to the market during the first half of this year, the next step being the renewable functional fillers. Demand and interest for our biochemicals products is robust.
UPM Communication Papers delivered Q4 results on par with Q4 2024. However, the annual results were lower due to continued structural market decline. During the quarter UPM Communication Papers stopped production at its Kaukas mill in Finland and at its Ettringen mill in Germany, reducing its paper production capacity by 13%.
We are entering 2026 with some cautious optimism. The business environment at the beginning of the year is showing signs of stability, even if there continue to be uncertainties in geopolitics and trade. We will continue to focus on performance, cash generation, strengthening the balance sheet and successfully completing the strategic portfolio initiatives.
Confident in UPM’s strategy and ability to create value, the Board of Directors has today proposed an unchanged dividend of €1.50 per share for 2025. The dividend represents 113% of UPM’s comparable earnings per share for 2025.”
