UPM's Result Consistently Improved

    Operating Profit Grew 20%

    HELSINKI, April 24 /CNW/ -

    Interim report January-March 2007

    -   Earnings per share excluding special items for the first
        quarter were EUR 0.25 (EUR 0.21 for the first quarter of 2006).
    -   EBITDA was EUR 418 million, 16.6 % of sales (EUR 386 million,
        15.7 %).
    -   Operating profit excluding special items was EUR 221 million
        (EUR 185 million).
    -   New Label Division was formed for self-adhesive label and RFID

    Jussi Pesonen, President and CEO, comments on the result of the first
quarter of 2007:

    "UPM's year has started off well. Enhanced efficiency was visible in our
result and our operating profit grew clearly during the first quarter. The
fixed costs decreased as planned."
    "Demand for paper continued to grow. The prices of newsprint, uncoated
fine paper and some speciality papers increased. However, the price
development in magazine papers has been clearly disappointing. The average
price for paper deliveries remained at the same level as last year. Our
deliveries in Europe increased in line with the market growth."
    "The business environment is, however, challenging. Increase in the raw
material costs, wood and recycled fibre in particular, is weakening the
profitability. In Finland, the price of wood is now at a record high. We,
however, managed to maintain a moderate cost inflation at 1-2 %."
    "There was strong growth of demand in sawn goods. Due to the realised
structural changes UPM was able to capitalise well on the market development,
even though the availability of wood logs was a challenge. Self-adhesive label
markets continued to develop favourably and prices remained steady."
    "For the second quarter, demand for printing papers is forecast to grow
in Europe from the corresponding quarter of last year, while in North America
demand is expected to decrease. Strong growth in demand is expected to
continue in the emerging markets. In the second quarter, we estimate our paper
deliveries to increase from last year and average price for all paper
deliveries to be about the same as in the first quarter of 2007."
    "Demand for self-adhesive label materials is forecast to continue to grow
in all markets, and prices are expected to remain stable. In wood products,
strong demand for plywood and sawn timber will continue during the second
    "Increase in wood cost and possible lack of sufficient supply of wood raw
material may result in less optimal use of capacity."
    "The company's overall cost inflation is estimated to remain at the level
of 1-2%, including expected cost savings from the ongoing profitability
programme," said Pesonen.

    News conference and conference call information

    A news conference on the Interim Report January-March 2007 will be held
today, April 24, 2007, at UPM's Head Office in Helsinki, Etelaesplanadi 2, at
14:00 Finnish time (12:00 GMT, 07:00 EST). The briefing can be followed live
on the Internet at www.upm-kymmene.com. A recording of the briefing will be
available at this address for the next three months.
    To participate in the UPM conference call, please dial +44-(0)1452-542
300 today at 17:00 Finnish time (15:00 GMT, 10:00 EST). The conference call
title is: UPM Q1 2007 Financial Results, access code: 5880836. A recording of
the discussion can be heard until May 1, 2007 by calling +44-(0)1452-550-000,
access code 5880836 followed by the number sign.
    In the United States and Canada, the Conference Call toll free number is
+1-866-220-1452. The recording can be heard at the toll free dial in number
+1-866-247-4222, access code: 5880836 followed by the number sign.

    It should be noted that certain statements herein which are not
historical facts, including, without limitation, those regarding expectations
for market growth and developments; expectations for growth and profitability;
and statements preceded by "believes", "expects", "anticipates", "foresees",
or similar expressions, are forward-looking statements. Since these statements
are based on current plans, estimates and projections, they involve risks and
uncertainties which may cause actual results to materially differ from those
expressed in such forward-looking statements. Such factors include, but are
not limited to: (1) operating factors such as continued success of
manufacturing activities and the achievement of efficiencies therein,
continued success of product development, acceptance of new products or
services by the Group's targeted customers, success of the existing and future
collaboration arrangements, changes in business strategy or development plans
or targets, changes in the degree of protection created by the Group's patents
and other intellectual property rights, the availability of capital on
acceptable terms; (2) industry conditions, such as strength of product demand,
intensity of competition, prevailing and future global market prices for the
Group's products and the pricing pressures thereto, financial condition of the
customers and the competitors of the Group, the potential introduction of
competing products and technologies by competitors; and (3) general economic
conditions, such as rates of economic growth in the Group's principal
geographic markets or fluctuations in exchange and interest rates. For more
detailed information about risk factors, see pages 15-17 of the company's
annual report 2006.

    UPM Interim Report January-March 2007 on www.upm-kymmene.com.

For further information:

For further information: Mr Jussi Pesonen, President and CEO, UPM, tel.
+358-204-15-0001; Mr Jyrki Salo, Executive Vice President and CFO, UPM, tel.

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