Jussi Pesonen, President and CEO, comments on the Q2 results: “UPM delivered a very good second quarter, and rapid recovery of our earnings continued. In the exceptional economic environment, demand for UPM’s products was strong, and overall, our price increases more than offset rising input costs. At the same time, our transformative growth projects continued on schedule and on budget, and we are in an excellent position going forwards. Our Q2 sales increased by 15% to EUR 2,384 million, and comparable EBIT was up by 51% rising to EUR 307 million from the lockdown affected Q2 of last year. Operating cash flow increased to EUR 308 million. Net debt at the end of June was EUR 750 million, and our financial position remains strong with EUR 2.5 billion in cash funds and unused committed credit facilities. The most notable improvement was seen in UPM Biorefining, where pulp and sawn timber prices soared, and the business area made its best second quarter ever. Result was held back by the scheduled maintenance shutdown at the Fray Bentos pulp mill in Uruguay, and a shutdown due to a fire at the Lappeenranta biorefinery in Finland."

Management Summary from Chairman and Chief Executive Officer Jean-Michel Ribiéras: We delivered strong earnings with a 20% adjusted EBITDA margin and outstanding free cash flow in the third quarter, driven by solid operational performance, good commercial execution and stable input costs. The quarter also had no planned maintenance outages. On Oct. 31, we announced we are mutually terminating a supply agreement for uncoated freesheet, bristols and specialty papers from International Paper’s Georgetown, South Carolina, mill, effective Dec. 31, 2024. We will continue to optimize our North America region by leveraging strategic initiatives to simplify the business, unlock efficiencies and drive earnings growth. We have seen encouraging increases in industry demand across our regions and expect recent capacity reduction announcements to lead to more favorable supply and demand balance trends in 2025. We are confident in our strategy to grow earnings and cash flow by continuing to invest in high-return projects in our mills and processes.

*Third quarter 2023 net earnings from continuing operations was $2.7 million or $0.01 per share (diluted), compared to net loss of $9.7 million or a loss of $0.05 per share (diluted) in the second quarter of 2023 on the same basis.*Average lumber prices for Q3 2023 were higher than Q2 2023, with an average selling price of $642/mfbm compared to $596/mfbm in Q2 2023. There was strong pricing momentum toward the latter half of the second quarter due to supply related concerns, which benefited results at the beginning of the third quarter. However, volumes in the third quarter were lower than Q2 2023 due to reduced demand given macroeconomic uncertainties. *The valuation provision for lumber and log inventory was decreased to $1.9 million from $8.7 million at the end of Q4 2022, generating a $6.8 million credit to cost of sales in the three quarters ended September 30, 2023.