The funding is in place to create the new business to be formed from the merger of UPM and Sappi’s graphic paper interests.
The definitive contract has been signed and €600 million of money is in place along with €100 million in cash and loans from the two shareholding companies. All that is needed now is formal clearance from the EU and competition authorities in other countries. This is not expected to be a problem.
Once the deal is done, the new business can concentrate on achieving the €100 million a year in efficiencies that have been identified. This will be through shifting production, closing machines and generally responding to prevailing market conditions.
These are not good. While at the half year point UPM says conditions for its communications paper business are stable, it also points out that European demand for graphic papers is down 3% compared to a year earlier. Within this newsprint has declined 3%, magazine papers by 5% and fine papers by 3%.
Communications papers brought in sales of €1,207 million (€1,294 million), but Ebitda fell to €74 million (€87 million) because of lower pricing, though operating profit shifted from a loss of €24 million at this point in 2025 to €41 million profit this year.
Once the communications papers business has been carved out and its plywood business sold as is underway, UPM Kymmene can concentrate of growth areas for the business. These include its self adhesive labels business, second largest in the world, where sales edged up to €861 million (€859 million) and operating profit rose to €67 million. Speciality materials covers a range of products including packaging and office papers. Here sales fell to €673 million (€702 million) while operating profit rose to €83 million (€72 million). A highlight was the introduction of a bio based paper packing concept in collaboration with Bobst and coatings specialist Michelman to match EU packaging legislation.
Overall sales from continuing operations in the first six months increased to €4,781 million (€4,914 million) with Ebit rising to €471 million (€404 million).
