UPM-Kymmene faces market headwinds and regulatory hurdles for its Sappi joint venture, even as it reports strong cash flow and prepares for the WISA Group demerger.
UPM reported a challenging Q3 2026 with comparable EBIT declining 8% YoY to €131 million due to customer destocking and rising variable costs. Despite these headwinds, the company maintained strong cash flow generation of €420 million and improved its net debt to EBITDA ratio to 2.09, signaling resilience in its core operations.
Comparable EBIT from continuing operations is expected to be in the range of €375-575 million.
The Plywood business is classified as a discontinued operation due to the planned demerger into the independent WISA Group.
WISA Group is being spun off from UPM as an independent listed company, with the demerger process nearing completion. The company's financial performance as a standalone entity is currently being established through the publication of its listing prospectus.
The prospectus is available at www.upm.com/demerger.
The planned joint venture between UPM Communication Papers and Sappi faces significant regulatory hurdles, as the European Commission has restated serious concerns regarding the transaction. UPM is currently in discussions regarding potential remedies to address these regulatory objections.
The European Commission has expressed serious concerns, and the parties are currently discussing potential remedies.
UPM-Kymmene reported a challenging third quarter as comparable EBIT fell 8% year-on-year to €131 million, driven by customer destocking and rising energy costs. Despite the quarterly dip, the company maintained strong cash flow of €420 million and confirmed the upcoming demerger of its Plywood business into the independent WISA Group.
The transaction faces regulatory uncertainty as the European Commission has restated serious concerns, prompting UPM to open discussions on potential remedies.
UPM is demerging its Plywood business into an independent listed company called WISA Group, with the process nearing completion.