UPM Q3 2026 — strong cash flow amid destocking and rising variable costs
- Q3 sales were €2,202 million and comparable EBIT €131 million, a comparable EBIT margin of 5.9%, down 8% year‑on‑year.
- Operating cash flow in Q3 was €420 million following working‑capital efficiency actions; net debt at end‑September was €2,993 million (net debt/EBITDA 2.09).
- Leuna biorefinery reached RFF production readiness and will produce qualification volumes in Q4; integrated production is now expected to start in Q2 2027 with nominal capacity in early 2028.
- UPM’s Plywood business is being demerged into WISA Group to list on Nasdaq Helsinki in November, while the planned graphic‑paper joint venture with Sappi is under renewed EU Commission scrutiny.
Quarter results
Continuing operations reported Q3 sales of €2,202 million and comparable EBIT of €131 million (5.9% margin), with performance weighed down by customer destocking and higher variable costs. Year‑to‑date comparable EBIT rose 10% to €601 million, improving the margin to 8.6%.
Cash flow and balance sheet
Actions to improve working‑capital efficiency produced strong operating cash flow of €420 million in Q3 (€645 million for Q1–Q3). Net debt decreased to €2,993 million and net debt/EBITDA improved to 2.09. The company reiterated disciplined capital allocation and dividend payments (first 2025 installment paid in April: €395 million).
Operations and assets
Decarbonization solutions (UPM Energy, UPM Biofuels) performed strongly; Advanced Materials and Fibres were stable overall though some units faced destocking and curtailments. Communication Papers experienced weaker demand and margin pressure, underpinning rationale for the planned JV with Sappi. The Leuna biorefinery has achieved two core processes in production and RFF readiness; integrated sugars‑to‑glycols production will start around Q2 2027, with nominal capacity in early 2028.
Strategic moves, outlook and sensitivities
The Plywood business is presented as discontinued ahead of the WISA Group listing in November. The Sappi JV is progressing but faces EU competition concerns. UPM expects H2 2026 comparable EBIT from continuing operations of approximately €375–575 million. Sensitivities: a €50/tonne pulp price change impacts annual comparable EBIT by ~€180–270 million; a €10/MWh electricity price change affects annual comparable EBIT by ~€40 million.
Source: UPM