UPM CEO Says Tariffs, Slow Consumer Demand Affected Third Quarter 2025 Results

Oct. 29, 2025 - UPM today reported interim third quarter 2025 results.

Massimo Reynaudo, UPM's President and CEO, said international trade tariffs continue to negatively affect business and consumer demand remains slow.

"The third quarter brought some temporary clarity to the terms of international trade, but consumer demand stayed subdued and uncertainty remains," said Reynaudo. "During the quarter, we continued to take decisive actions to further strengthen our competitiveness. Our focus is on improving performance, cash flow and the strength of our balance sheet.

"Our businesses in advanced materials and decarbonization solutions improved their third quarter performance compared to the previous year. However, fibres and communication paper businesses were impacted by the unusual volatility in the operating environment, which affected UPM's results negatively.

"In Q3 our sales were EUR 2,298 million, lower than in the comparison quarters. Comparable EBIT was EUR 153 million, up 22% compared to the previous quarter but down 47% compared to last year's corresponding period. Operating cash flow was EUR 218 million. At the end of the quarter, our financial position was solid, with a net debt to EBITDA ratio of 2.36.

"In UPM Fibres, the low pulp prices resulted in significantly lower EBIT compared to last year. Despite the low cycle market prices, our competitive pulp platform in South America performed well and continued to improve its efficiency. In Q3, Fibres South generated comparable EBIT of EUR 80 million, with an EBIT margin of 22%. After this first full year at nominal capacity for UPM Paso de los Toros and the competitive outbound logistics by rail, improvements will continue. By 2027, the expanded plantation areas will increasingly reach harvesting maturity, enabling us to optimize the wood sourcing and inbound logistics further. Simultaneously, we continue to plan for capex-efficient debottlenecking to unlock further potential of the platform.

"In Finland, Fibres North reported a comparable EBIT loss of EUR 37 million, of which the impact of the extended shutdown and maintenance at the Kaukas pulp mill accounted for approximately EUR 30 million. Wood costs reached their highest levels, even though wood market prices started to show the first signs of decline. We continue to take decisive measures to adjust the Finnish pulp operations to the market situation. The announced long-term strategic partnership with Versowood, the largest private producer and processor of sawn timber in Finland, will strengthen our supply of pulpwood and improve the cost efficiency of our wood sourcing in the tight Finnish markets.

"Given the significance of the UPM Fibres business and the distinct characteristics of its Fibres South and Fibres North parts, we will provide additional financial information for these two parts of the UPM Fibres reporting segment starting in Q1 2026.

"In advanced materials, UPM Adhesive Materials and UPM Specialty Papers demonstrated resilience once again, improving their performance from last year despite the visible effects of global trade tariffs on consumer confidence and demand. UPM Adhesive Materials continued to implement its growth strategy by investing in the U.S., Malaysia and Vietnam. In addition, the business announced plans to discontinue production in Nancy, France in order to increase production efficiency further.

"UPM Plywood reported solid results. In September, we announced the strategic review of the business to assess options for maximizing the long-term potential in an evolving market environment. The aim is to determine the best path forward for the plywood business, while also benefiting the value creation for UPM's shareholders.

"UPM Communication Papers faced weak demand and was affected by export tariffs. The business decided to permanently cease paper production at the UPM Kaukas mill by the end of the year. The closed Plattling paper mill site was sold in October to a local logistics company, and the sale will positively impact the Q4 cashflow.

"In decarbonization solutions, UPM Energy had a good third quarter, with market prices recovering amid solid power consumption in Finland and the Nordics. Optimization of power production in the volatile price environment yielded good results.

"UPM Biofuels produced good volumes and the renewable fuel market prices continued recovering. The EU level renewable energy directive (RED III) is expected to support demand and valuation for advanced renewable fuels, pending implementation at the national level legislation.

"In Leuna, Germany, the start-up of our groundbreaking biochemicals refinery proceeded. In the first core process, the hydrothermal breakdown of wood into sugar and lignin, we have successfully achieved stability and production levels on an industrial scale. Production and sales of the first commercial products, industrial sugars and lignin-based products are expected to start by the end of the year, and glycol production and sales in the first half of 2026.

"Across our businesses, the market environment during the third quarter proved to be challenging. Although uncertainties in trade, currencies and geopolitics continue in the near term, we are determined to stay competitive and pave way for future growth through targeted investments and the pioneering entry in the new biochemicals business. In these efforts, I want to acknowledge the dedication of our teams and the continued trust of our customers," Reynaudo concluded.

Outlook

The continued significant uncertainties in geopolitics and global trade relations may impact the development of UPM's product deliveries, sales prices, various input cost factors and currency exchange rates.

In H2 2025, compared with H1 2025, UPM's performance is expected to benefit from lower variable costs, including the timing of the annual energy refunds in Q4, and potentially from moderate fair value change of forest assets in Q4. Performance is expected to be resilient in the advanced materials businesses. Pulp prices have started the second half of the year at a lower level than the realized prices during the first half of the year.

In H2 2025, compared with H2 2024, UPM's performance is expected to be held back by lower sales margins for pulp, lower deliveries of communication papers, and higher maintenance activity. Performance is expected to improve in the advanced materials businesses.

The U.S. dollar has been weaker in H2 2025 than during the comparison periods.

Sensitivity to Pulp and Electricity Prices

UPM's comparable EBIT is sensitive to pulp and electricity prices. The figures below represent group earnings sensitivities on annual level.

UPM is a large producer and consumer of chemical pulp. A EUR 50/tonne change in average pulp price would impact annual comparable EBIT by approximately EUR 170 million (net impact: assuming no correlation between pulp and paper prices) to approximately EUR 270 million (gross impact: assuming paper pricing would match changes in pulp costs).

UPM is a large producer and consumer of electricity in Finland and separately hedges part of its electricity sales and purchases. Based on UPM's estimated unhedged net electricity sales position in Finland in 2025, a EUR 10/MWh change in average electricity market price in Finland would impact annual comparable EBIT by approximately EUR 30 million.

UPM delivers renewable and responsible solutions and innovate for a future beyond fossils across six business areas: UPM Fibres, UPM Energy, UPM Raflatac, UPM Specialty Papers, UPM Communication Papers and UPM Plywood. The company employs 15,800 people worldwide and has annual sales of approximately EUR 10.3 billion.

SOURCE: UPM

Georgia-Pacific to Close Memphis Cellulose Mill and Memphis Technology and Innovation Center

October 20, 2025 - Georgia-Pacific on Oct. 16 announced that the company will permanently close the Memphis Cellulose mill and the Memphis Technology and Innovation Center in Tennessee.

The Memphis Cellulose plant produces cotton linter pulp, which is used for a wide variety of products requiring high purity cellulose as a raw material. End uses include specialty plastics, paints and coatings, and specialty papers used in the medical, artist and filtration industries.

The closures impact approximately 130 employees at the cellulose mill, and 22 employees at the Technology and Innovation Center.

The company expects that most positions at the mill and technology center will be eliminated by early December.

Georgia-Pacific said its focus in the coming weeks and months is to continue to safely operate while supporting our employees during the transition. The company will work with affected employees who are interested in transitions to other opportunities within the company, other Koch companies or opportunities outside of the company. Georgia-Pacific is committed to supporting employees in finding employment through job fairs and placement services or other available resources.

The company will be working cooperatively with local union leadership to begin bargaining the effects of this decision, as written in the contract. The state of Tennessee will determine unemployment benefits, and Georgia-Pacific will cooperate with that process. The company will ensure that all employees are paid all earned wages and agreed upon benefits at the time of their discharge.

In a press release, Georgia-Pacific stated, "This decision is in the best interest of the GP Cellulose business and is not a reflection on the quality of work of the Memphis team. This decision was influenced by various factors, including challenging market conditions for the facility's products.

"Georgia-Pacific considered all available options, including selling the mill. It is our intent to leave the mill and other facilities in a sellable condition for some time should there be an interested buyer following this announcement.

"Our focus is to continue to safely operate while supporting our employees during this transition and working with customers to finalize commitments," the company concluded.

Headquartered in Zug, Switzerland, GP Cellulose operates state-of-the-art pulp mills in the southeastern United States and has sales offices strategically located in Switzerland,the United States, Uruguay and Hong Kong. The company's brands include Golden Isles® fluff and Golden Isles CO®.

SOURCE: Georgia-Pacific

Sappi to Shut PM 2 at Kirkniemi Mill in Finland, Coated Paper Capacity Reduced by 175,000 Tonnes

Oct. 9, 2025 - Sappi Europe announced in August the commencement of a consultation process for the potential closure of Paper Machine 2 at its Kirkniemi Mill in Lohja, Finland. The consultation process, aimed at improving the mill's profitability and cost competitiveness, has been completed resulting in the planned closure of Paper Machine 2 by the end of the calendar year 2025. As a result, Sappi's annual production capacity of coated mechanical paper will be reduced by 175,000 tonnes.

The closure will lead to a reduction of 93 positions. Some of the redundancies will be managed through retirement arrangements. Sappi is committed to supporting all affected employees through the transition. A dedicated service point has been established at the mill in cooperation with the local employment office, and all impacted employees will be offered individual career transition coaching.

"While the decision to close Paper Machine 2 was not taken lightly, it reflects the wider structural changes in the paper market and the need for ongoing efficiency improvements," said Misa Bursac, VP Manufacturing, R&D and Technology. "This step is part of our broader commitment to optimising our operations, enhancing sustainability, and ensuring the long-term competitiveness of Sappi Europe. By consolidating production on Kirkniemi's remaining machines, we will strengthen our ability to serve customers reliably while continuing to invest in the future of our European operations and ultimately our industry."

The shutdown of Paper Machine 2 is part of Sappi's strategic plan to align production capacity with market demand and to optimise the utilisation of the mill's remaining paper machines. Production of Paper Machine 2 grades will be transferred to Kirkniemi's Paper Machines 1 and 3, which will continue operating. Deliveries to customers will continue without disruption.

About Kirkniemi Mill

Kirkniemi Mill, with 550 employee, produces coated paper for heatset web offset printing serving mainly the high-volume print market. Its papers are used to create catalogues, brochures and publications.

The mill's three paper machines have the capacity to produce 750,000 tons per year of high-quality Galerie and Magno web papers, which are tailored to high-quality publishing and advertising end-uses. Kirkniemi Mill also produces 300,000 tons per year of bleached mechanical pulp for its own consumption. More than 90% of our mill production is exported.

Headquartered in Brussels, Belgium, Sappi Europe is the leading European producer of coated graphic paper as well as packaging and speciality papers.

SOURCE: Sappi Europe

UPM Ending Coated Mechanical Paper Production at Kaukas Mill in Finland

Oct 3, 2025 - UPM today said that employee consultation processes have now been completed at the company's Kaukas paper mill in Lappeenranta, South East Finland, and UPM will permanently end paper production at the mill during Q4 2025.

The production of pulp, sawn timber and biofuels, along with R&D activities at the integrated Kaukas site will continue as before.

The reduction of personnel is 220.

In July, UPM first announced the plans to cease paper production at Kaukas Mill. The mill operates one paper machine, PM1, which has the capacity to produce 300,000 tonnes per year of coated mechanical paper.

UPM plans to shift its coated mechanical paper production in Finland to UPM Rauma mill.

"The consultations were conducted in a constructive spirit, focusing on the rationale behind the planned changes, their potential impact, and the comprehensive support available to affected employees," said Matti J. Laaksonen, General Manager, Kaukas and Kymi mills. "As part of the process, we agreed to implement a from-job-to-job program, which has been UPM's established model for change support since 2006.

"The last few weeks have not been easy for any of us. Even in these difficult times, our skilled team at the Kaukas paper mill has ensured stable operations. We greatly respect that. We have focused on finding solutions for the employees affected, with the clear intention of mitigating the impact of this closure," Laaksonen concluded.

To ensure safe conditions at the mill following the closure, an after-care team will be in place, UPM noted.

UPM Communication Papers offers a wide portfolio for newspaper, magazine, marketing and book printing as well as for home and office applications. The division employs around 5,000 people and operates 10 modern paper mills globally with an annual production capacity of 4.3 million tonnes of graphical paper.

SOURCE: UPM