Technology

Baylin Reports Strong Q2 2024 Financial Results

Published

2 years ago

August 7, 2024

Adjusted EBITDA(2) grew sequentially by almost 400%.Revenue and gross profit grew by 10% and 20%, respectively.Baylin completed the sale of its Korean subsidiary.

Investor Conference Call on August 8, 2024 at 8:00 a.m. ET

TORONTO, Aug. 7, 2024 /CNW/ – Baylin Technologies Inc. (TSX: BYL) (the “Company” or “Baylin”), a diversified global wireless technology company focused on the research, design, development, manufacture, and sale of passive and active radio frequency products, satellite communications products, and supporting services, today announced its financial results for the three and six months ended June 30, 2024. All amounts are stated in Canadian dollars unless otherwise indicated.

“Three years ago, we started the journey to turnaround Baylin from substantial losses to profitability,” said Leighton Carroll, Baylin’s Chief Executive Officer. “We operate in intensely competitive markets and despite negative macroeconomic challenges, Baylin has been growing quarter over quarter. By building competitive advantage based on unique intellectual property, by engaging the talents of our entire team, and by delivering on a specific go to market strategy, we have seen our business had a very solid quarter. I cannot thank the employees of our business enough for the dedication and hard work.”

SECOND QUARTER SUMMARY

Continuing Operations

Revenue of $22.0 million in the second quarter of 2024, an increase of $0.7 million or 3.4% compared to the second quarter of 2023. This also represents an increase of $1.9 million or 9.9% compared to the first quarter of 2024. Compared to the same prior year period, the increase in revenue was primarily due to sales volume increase in the Wireless Infrastructure business line.Gross profit of $9.2 million in the second quarter of 2024, an increase of $0.7 million or 8.8% compared to the second quarter of 2023. This also represents an increase of $1.5 million or 19.6% compared to the first quarter of 2024. Gross margin of 41.9% in the second quarter of 2024 compared to 39.9% in the second quarter of 2023 and compared to 38.5% in the first quarter of 2024. Compared to the same prior year period, the higher gross margin in the second quarter of 2024 was mainly due to improved product mix. Wireless Infrastructure revenue as a percentage of total revenue was higher in the second quarter of 2024 and most of its products generate higher gross margins than the other product lines.Adjusted EBITDA of $2.3 million in the second quarter of 2024, an increase of $1.2 million or 116% compared to the second quarter of 2023. This also represents an increase of $1.8 million or 394% compared to the first quarter of 2024. Compared to the same prior year period, the increase in the second quarter of 2024 was mainly due to combination of higher revenue, higher gross margins and lower operating expenses. The second quarter of 2023 had the benefit of specific one-time government incentives which were recorded as an offset to operating expenses in that quarter.Net loss of $0.1 million in the second quarter of 2024 compared to a net income of $0.2 million in the second quarter of 2023. This also represents an increase of $1.9 million compared to a net loss of $2.0 million in the first quarter of 2024. The net loss in the second quarter of 2024 was primarily the net result of an operating income of $0.8 million offset by interest and other finance expenses as well as income tax expenses. The net income in the second quarter of 2023 was due in part to a gain on lease termination and sale of non-current assets in Vietnam as well as a favourable adjustment based on the fair market value of the convertible debentures. On a per share basis, a net loss of $nil per share in the second quarter of 2024 compared to a net income of $nil per share in the second quarter of 2023.Net debt(3) of $16.6 million at June 30, 2024, an increase of $3.9 million from December 31, 2023, primarily due to an increase in working capital investment as a result of increasing sales and order backlog during the six months ended June 30, 2024.Backlog(4) of $32.6 million as at June 30, 2024 compared to $31.2 million as at December 31, 2023. The increase was mainly due to a higher level of backlog in the Wireless Infrastructure business line as a result of an increase in demand from wireless carriers and third-party operators. Backlog increased to $33.1 million as at July 29, 2024 as a result of an increase in new order intake across all business lines at the start of the third quarter of 2024.

Discontinued Operations (representing the Mobile and Network business line)

Adjusted EBITDA from discontinued operations of –$0.6 million in the second quarter of 2024 compared to –$1.0 million in the second quarter of 2023. The reduced loss in Adjusted EBITDA from discontinued operations in the second quarter of 2024 was primarily due to an increase in gross profit as a result of higher revenue as well as a decrease in operating expenses in the M&N business line compared to the prior year period.Net loss from discontinued operations of $1.5 million in the second quarter of 2024, which was largely consistent with the prior year period. The net loss from discontinued operations in the second quarter of 2024 was mainly due to an operating loss of $1.0 million in the M&N business line. On a per share basis, a net loss of $0.01 per share in the second quarter of 2024 compared to a net loss of $0.02 per share in the second quarter of 2023.

RECENT DEVELOPMENTS

Products

In May 2024, Advantech Wireless Technologies Inc. (“Advantech”) received an $8.2 million order for its ultra-high power Summit II Solid State Power Amplifier System. The order was placed by a major US defence contractor for use in a NATO government specific application. The Summit systems, produced by Advantech in its Kirkland, Quebec facility, feature a soft-fail redundant architecture based on our proprietary CAN Bus operating system.

In July 2024, the Company’s Embedded Antenna business line received a multi-year, multi-million dollar award for a 4G/5G antenna solution. It was selected by a US computer networking company to provide this solution for the networking company’s mobile customer premise equipment product, which will be available to consumers through multiple US Tier 1 carriers as well as a Tier 1 carrier outside the United States.

Sale of the Mobile and Network Business

On July 9, 2024, the Company announced that it had entered into an agreement (the “Transfer Agreement”) with a Korean strategic acquirer, under which the Company agreed to sell Galtronics Korea Co., Ltd. (“GTK”) and Galtronics Vietnam Company Limited (“GTV”). The Company has completed the sale of GTK to the strategic acquirer. Subject to receipt of required regulatory approvals, the Company expects to complete the sale of GTV during the third quarter of 2024. Upon the sale of GTV, the Company will no longer be in the Mobile and Network business.

SELECTED FINANCIAL INFORMATION

The table below discloses selected financial information for the periods indicated.

(in $000’s except per share amounts)

Three Months Ended June 30,

Six Months Ended June 30,

2024

2023

Change

2024

2023

Change

Profit and Loss

Revenue

22,035

21,307

728

3.4 %

42,088

40,052

2,036

5.1 %

Gross profit

9,238

8,492

746

8.8 %

16,960

16,110

850

5.3 %

Gross margin

41.9 %

39.9 %

2.0 %

N/A

40.3 %

40.2 %

0.1 %

N/A

Net income (loss) from continuing operations

(132)

218

(350)

N/A

(2,104)

1,082

(3,186)

N/A

Net loss from discontinued operations

(1,457)

(1,461)

(0.3 %)

(2,243)

(3,491)

1,248

(35.7 %)

Net loss

(1,589)

(1,243)

(346)

27.8 %

(4,347)

(2,409)

(1,938)

80.4 %

Basic and diluted net income (loss) per share from continuing operations

($0.00)

$0.00

($0.00)

N/A

($0.02)

$0.02

($0.04)

N/A

Basic and diluted net loss per share from discontinued operations

($0.01)

($0.02)

$0.01

(50.0 %)

($0.01)

($0.05)

$0.04

(80.0 %)

Basic and diluted net loss per share

($0.01)

($0.02)

$0.01

(50.0 %)

($0.03)

$0.00

0.0 %

EBITDA from continuing operations

1,514

1,094

420

38.4 %

843

4,421

(3,578)

(80.9 %)

EBITDA from discontinued operations

(580)

(684)

104

(15.2 %)

(299)

(1,690)

1,391

(82.3 %)

EBITDA(1)

934

410

524

> 100.0%

544

2,731

(2,187)

(80.1 %)

Adjusted EBITDA from continuing operations

2,273

1,050

1,223

> 100.0%

2,733

2,635

3.7 %

Adjusted EBITDA from discontinued operations

(580)

(968)

388

(40.1 %)

(623)

(1,676)

1,053

(62.8 %)

Adjusted EBITDA(2)

1,693

1,611

> 100.0%

2,110

959

1,151

> 100.0%

As at

June 30,
2024

June 30,
2023

Change

June 30,
2024

December

31, 2023

Change

Balance Sheet and Other**

Current assets – Continuing operations

37,044

49,267

N/A

37,044

35,346

1,698

4.8 %

Current assets – Assets held for sale

8,581

400

N/A

8,581

7,885

696

8.8 %

Total current assets

45,625

49,667

N/A

45,625

43,231

2,394

5.5 %

Total assets

60,993

70,643

(9,650)

(13.7 %)

60,993

59,710

1,283

2.1 %

Current liabilities – Continuing operations

41,296

63,522

N/A

41,296

38,955

2,341

6.0 %

Current liabilities – Liabilities related to assets held for sale

10,547

–

N/A

10,547

8,854

1,693

19.1 %

Total current liabilities

51,843

63,522

N/A

51,843

47,809

4,034

8.4 %

Total liabilities

64,728

72,940

(8,212)

(11.3 %)

64,728

59,746

4,982

8.3 %

Net debt(3) from continuing operations

16,641

23,725

(7,084)

(29.9 %)

16,641

12,787

3,854

30.1 %

Backlog(4) from continuing operations

32,603

32,275

328

1.0 %

32,603

31,156

1,447

4.6 %

Notes:

(1)

See “Non-IFRS Measures”. EBITDA refers to operating income (loss) plus depreciation and amortization.

(2)

See “Non-IFRS Measures”. Adjusted EBITDA refers to EBITDA plus the sum of: a) post business acquisition expenses; b) fair value step-up of inventory acquired as part of an acquisition; c) expenses for litigation relating to acquisition agreements; d) expenses relating to planned restructuring following acquisition; e) impairment of fixed and intangible assets (including goodwill) following acquisition; f) expenses to permanently close or relocate a facility, shut down a line of business, eliminate positions; g) expenses related to corporate re-organization; h) M&A expenses; and, i) non-cash compensation.

(3)

See “Non-IFRS Measures”. Net debt refers to total bank indebtedness less cash and cash equivalents.

(4)

See “Non-IFRS Measures”. Backlog refers to the value of unfulfilled purchase orders placed by customers.

Balance Sheet as at June 30, 2024 and December 31, 2023 reflects the reclassification of all assets and liabilities of the M&N business line into “Assets held for sale” and “Liabilities related to assets held for sale”, respectively. Such assets and liabilities are classified as current. Balance Sheet as at June 30, 2023 does not reflect such reclassification, which makes the comparison against the current quarter-end results not applicable (except for “Total assets” and “Total liabilities”).

A copy of the Company’s unaudited interim condensed consolidated financial statements for the three and six months ended June 30, 2024 and corresponding management’s discussion and analysis (the “MD&A”) are available under the Company’s profile on SEDAR+ at www.sedarplus.ca.

OUTLOOK

A number of the Company’s financial measures from continuing operations in the second quarter of 2024 continued to improve, quarter over quarter, compared to the first quarter of 2024. Revenue increased by 9.9% ($22.0 million compared to $20.1 million) and gross profit increased by 19.6% ($9.2 million compared to $7.7 million). Gross margin improved by 3.4 percentage points (41.9% compared to 38.5%). This led to a stronger positive Adjusted EBITDA of $2.3 million from continuing operations in the second quarter of 2024 compared to $0.5 million in the first quarter of 2024. The improvement was mainly driven by the Wireless Infrastructure business line, which showed increased strength across all financial metrics, including revenue, gross profit and Adjusted EBITDA. The Embedded Antenna and Satcom business lines maintained their strong performance from the first quarter of 2024.

We continue to prioritize product mix, emphasizing products that generate higher margins and gross profit, with a view to maintaining and growing Adjusted EBITDA. The macroeconomic environment and the continuing effect of high interest rates remain an issue for our business, which, in the short-term could continue to affect our volume of orders and revenue, as well as causing pushouts of orders from customers. Nevertheless, we expect the results from our continuing operations to remain positive during the third quarter and for the rest of 2024.

Embedded Antenna Business Line

The Embedded Antenna business line again had a strong second quarter of 2024, substantially in-line with its performance in the first quarter. The unfavourable macroeconomic conditions, principally due to an oversupply of finished goods, that led to lower sales volumes at the end of 2023 have not occurred this year. Moreover, demand for a new public safety product launched in the fourth quarter of 2023 has exceeded expectations in 2024. We expect the Embedded Antenna business line will continue to perform strongly for the remainder of 2024, despite expected seasonally affected lower sales in the third quarter. Results are dependent on the home networking, public safety and automotive markets remaining resilient in the face of economic pressures. The number of active bids for 2024 projects remains at a very strong level for the business.

Wireless Infrastructure Business Line

The Wireless Infrastructure business line had a very strong second quarter of 2024, building on its success in the first quarter, with a continuing high volume of sales of its higher margin multibeam and innovative small cell antennas and further stadium and airport deployments. We are leveraging the competitive advantages that these products afford to open up new global opportunities to drive sales with wireless carriers and third-party operators who operate wireless mobile networks for their customers. We are continuing to expand into new markets, particularly in areas in Europe, where we have not previously had sales. Although there remains a risk of spending cutbacks by carriers, we expect to see further spending on small cells in 2024, which will drive further sales volumes for the business. Based on our current assessment, we expect the full-year results to reflect a marked improvement over 2023, despite likely lower revenue in the second half of 2024 compared to the first six months.

Satcom Business Line

The Satcom business line continues to see consistent demand for its products, supported by strong capital spending by its customers, particularly for high powered amplifiers used in military, government, and broadcast applications.

Major programmatic opportunities continue to be resilient, particularly for high powered amplifiers, although awards remain lumpy. We continue to see softness in the commercial lower power market, particularly in the maritime and airplane sectors, but broadcast applications remain solid. Given our focus on higher power opportunities, we expect the business to continue to demonstrate resiliency in 2024. Our Genesis and Summit lines of solid-state power amplifiers are generating sales from clients due to the improvements in performance, monitoring, and failover they provide over our older technology and products of our competitors. Importantly, these new amplifiers are consistent in architecture, meaning they will allow the business to simplify supply chain requirements over time and thereby improve efficiencies in manufacturing.

We continue to see opportunities for growth in sales for military and other government-related uses as many western countries continue to maintain high levels of defense and scientific spending. Given the technology upgrades within our product portfolio, we expect to continue our strong sales volumes while we work to improve our overall margin attainment.

Overall, we expect revenue and gross profit in 2024 will be stronger than 2023. The Satcom business line continues to demonstrate a strong order book with improving margins. Improving production efficiencies in our facilities in order to address the backlog and improve overall revenue attainment remains an important priority, particularly in our Kirkland, Quebec facility.

Mobile and Network (formerly, Asia Pacific) Business Line

The M&N business line continues to face significant challenges. The second quarter saw a further reduction in revenue over the first quarter, as a result of lower sales volumes in two of its principal customer’s mobile phones for which M&N supplies the antennas. In addition, M&N was unable to benefit from another program opportunity for its customer due to issues related to the ultimate finished goods producer on the project.

Management has been taking steps to limit the adverse effect this has had on the M&N business. We continue to focus on reducing or eliminating operating and other costs while work is done to diversify the revenue base until the divestiture is complete.

In July 2024, the Company announced that it had reached agreement to sell the M&N business (see “Recent Developments – Sale of the Mobile and Network Business”).

INVESTOR CONFERENCE CALL

Baylin will hold a conference call on Thursday, August 8, 2024 at 8:00 a.m. (ET) to discuss its financial results for the three and six months ended June 30, 2024. The conference call will be hosted by Leighton Carroll, Chief Executive Officer, and Dan Nohdomi, Chief Financial Officer. All interested parties are invited to participate using the dial-in details provided below.

Date:                            August 8, 2024
Time:                           8:00 a.m. (ET)
Dial-in Number:            (+1) 800-836-8184 or (+1) 289-819-1350
Conference ID#:            81373
Rapid Connect:    To join the conference call by phone, please use the following URL to easily register and be connected into the conference call automatically: https://emportal.ink/4cNGhgf
Webcast:               This call is also on webcast and can be accessed at: https://app.webinar.net/4ZlXmaEmAeO

FORWARD-LOOKING INFORMATION AND STATEMENTS

This press release includes forward-looking information and forward-looking statements (together, “forward-looking statements”) within the meaning of applicable securities laws. Forward-looking statements are not statements of historical fact. Rather, forward-looking statements are disclosure regarding conditions, developments, events or financial performance that we expect or anticipate may or will occur in the future including, among other things, information or statements concerning our objectives and strategies to achieve those objectives, statements with respect to management’s beliefs, estimates, intentions and plans, and statements concerning anticipated future circumstances, events, expectations, operations, performance or results. Forward-looking statements can be identified generally by the use of forward-looking terminology, such as “anticipate”, “believe”, “could”, “should”, “would”, “estimate”, “expect”, “forecast”, “indicate”, “intend”, “likely”, “may”, “outlook”, “plan”, “potential”, “project”, “seek”, “target”, “trend” or “will” or the negative or other variations of these words or other comparable words or phrases and is intended to identify forward-looking statements, although not all forward-looking statements contain these words.

The forward-looking statements in this press release include statements concerning the outlook for our business and the expected completion of the sale of GTV. Forward-looking statements are based on certain assumptions and estimates made by us in light of the experience and perception of historical trends, current conditions, expected future developments, including projected growth in the sales of passive and active radio frequency and satellite communications products, and supporting services, and other factors we believe are appropriate and reasonable in the circumstances, but there can be no assurance that such assumptions and estimates will prove to be correct.

Many factors could cause our actual results, level of activity, performance or achievements or future events or developments to differ materially from those expressed or implied by the forward-looking statements, including the risk factors discussed in the Company’s most recent Annual Information Form, which is available under the Company’s profile on SEDAR+ at www.sedarplus.ca. All the forward-looking statements made in this press release are qualified by these cautionary statements and other cautionary statements or factors in this press release. There can be no assurance that the actual results or developments will be realized or, even if substantially realized, will have the expected consequences to, or effects on, the Company. Unless required by applicable securities law, the Company does not intend and does not assume any obligation to update any forward-looking statement.

NON-IFRS MEASURES

This press release includes a number of measures that are not prescribed by International Financial Reporting Standards (“IFRS”) and as such may not be comparable to similar measures presented by other companies. We believe these measures are commonly employed to measure performance in our industry and are used by analysts, investors, lenders and interested parties to evaluate financial performance and our ability to incur and service debt to support business activities. While management of the Company believes that non-IFRS measures provide helpful supplemental information, they should not be considered in isolation as an alternative to net income, cash flows generated by operating, investing or financing activities, or other financial statement data presented in accordance with IFRS. For further information, see “Non-IFRS Measures” on page 3 of the MD&A.

ABOUT BAYLIN

Baylin Technologies Inc. is a diversified global wireless technology company focused on the research, design, development, manufacture, and sale of passive and active radio frequency products, satellite communications products, and supporting services.

For further information, please visit www.baylintech.com.

SOURCE Baylin Technologies Inc.

Technology

UPM Half Year Financial Report 2026: Improved second quarter results in all businesses and portfolio change progressing

Published

7 minutes ago

July 23, 2026

UPM-Kymmene Corporation Stock Exchange Release (Half Year Financial Report) July 23, 2026 at 09:30 EEST

HELSINKI, July 23, 2026 /PRNewswire/ —

UPM Half Year Financial Report 2026:
Improved second quarter results in all businesses and portfolio change progressing

Q2 2026 highlights, continuing operations

Sales totaled €2,355 million (2,341 million in Q2 2025)Comparable EBIT increased by 71% to €212 million, 9.0% of sales (124 million, 5.3%)All businesses improved their results from last yearUPM and Sappi signed a definitive agreement on the graphic paper Joint VentureThe Board approved a plan to demerge the Plywood business into a new listed company. The Extraordinary General Meeting to decide on the demerger plan will be held on August 31, 2026UPM achieved a Platinum rating from EcoVadis and an A score from CDP for its supplier engagement

H1 2026 highlights, continuing operations

Sales totaled €4,781 million (4,914 million in H1 2025)Comparable EBIT increased by 17% to €471 million, 9.8 % of sales (404 million, 8.2 %)Strong performance in Decarbonization solutions businesses (UPM Energy and UPM Biofuels)Robust sales growth and performance in Advanced materials businesses (UPM Adhesive Materials and UPM Specialty Materials)Operating cash flow was €225 million (468 million)1)The first installment of the dividend for the year 2025 was paid in April, totaling €395 millionNet debt was 3,313€ million at the end of June (3,310 million) and net debt to EBITDA ratio was 2.36 (2.12)1)

1) Operating cash, net debt and net debt to EBITDA ratio include continuing and discontinued operations.

UPM Plywood is presented as discontinued operations due to the proposed demerger

On April 29, 2026, the Board of Directors of UPM approved a demerger plan for the separation of the Plywood business into an independent listed company. As a result of the proposed demerger, the Plywood business is presented as a discontinued operation in accordance with IFRS 5. Unless otherwise stated, the commentary in this report relates to UPM’s continuing operations. More information in Financial statement information Note 10 assets and liabilities classified as held for distribution to owners and discontinued operations.

Key figures, continuing operations

Q2/2026

Q2/2025

Q1/2026

Q1-Q2/2026

Q1-Q2/2025

Q1-Q4/2025

Sales, € million

2,355

2,341

2,425

4,781

4,914

9,392

Comparable EBITDA, € million

356

250

375

732

659

1,254

% of sales

15.1

10.7

15.5

15.3

13.4

Operating profit (loss), € million

208

105

245

453

296

719

Comparable EBIT, € million

212

124

259

471

404

883

% of sales

9.0

5.3

10.7

9.8

8.2

9.4

Profit (loss) before tax, € million

182

226

409

249

660

Comparable profit before tax, € million

186

103

240

426

359

825

Profit (loss) for the period, € million

163

195

358

208

466

Comparable profit for the period, € million

163

203

366

305

684

Earnings per share (EPS), €

0.29

0.13

0.36

0.65

0.38

0.86

Comparable EPS, €

0.29

0.16

0.38

0.67

0.56

1.27

Return on capital employed (ROCE), %

5.9

3.2

7.2

6.6

4.2

5.4

Comparable ROCE, %

6.0

3.7

7.6

6.9

5.7

6.5

Capital employed at the end of period, € million

13,954

14,213

14,186

13,954

14,213

13,948

Personnel at the end of period

13,665

14,764

13,347

13,665

14,764

13,676

UPM presents certain measures of performance, financial position and cash flows, which are alternative performance measures in accordance with the guidance issued by the European Securities and Markets Authority (ESMA). The definitions of alternative performance measures are presented in UPM’s » Annual Report 2025

Key figures, discontinued operations

The financial information presented for the discontinued operations is not representative of the historical or future profitability of the UPM Plywood business area as a standalone business. Information on UPM Plywood’s performance is presented in the segment information.

Q2/2026

Q2/2025

Q1/2026

Q1-Q2/2026

Q1-Q2/2025

Q1-Q4/2025

Sales, € million

164

132

264

Comparable EBITDA, € million

% of sales

23.3

11.9

24.8

24.0

14.8

21.5

Operating profit (loss), € million

Comparable EBIT, € million

% of sales

21.4

3.2

19.0

20.2

6.9

14.4

Profit (loss) before tax, € million

Comparable profit before tax, € million

Profit (loss) for the period, € million

Comparable profit for the period, € million

Return on capital employed (ROCE), %

21.7

3.9

22.0

21.9

9.8

16.4

Comparable ROCE, %

37.4

4.3

32.7

35.1

10.0

20.8

Capital employed at the end of period, € million

196

181

189

196

181

Personnel at the end of period

1,519

1,543

1,454

1,519

1,543

1,451

Key figures, UPM total

UPM total

Q2/2026

Q2/2025

Q1/2026

Q1-Q2/2026

Q1-Q2/2025

Q1-Q4/2025

Sales, € million

2,440

2,400

2,505

4,945

5,046

9,656

Comparable EBITDA, € million

376

257

395

771

678

1,311

% of sales

15.4

10.7

15.8

15.6

13.4

13.6

Operating profit (loss), € million

217

107

255

472

305

749

Comparable EBIT, € million

230

126

274

504

413

921

% of sales

9.4

5.2

10.9

10.2

8.2

9.5

Profit (loss) before tax, € million

186

236

422

258

690

Comparable profit before tax, € million

204

105

255

459

367

863

Profit (loss) for the period, € million

166

200

366

215

491

Comparable profit for the period, € million

177

213

390

312

714

Earnings per share (EPS), €

0.30

0.13

0.37

0.67

0.39

0.91

Comparable EPS, €

0.32

0.17

0.39

0.71

0.57

1.33

Return on equity (ROE), %

6.4

2.7

7.6

7.1

3.9

4.5

Comparable ROE, %

6.8

3.4

8.1

7.6

5.7

6.5

Return on capital employed (ROCE), %

6.1

3.2

7.4

6.8

4.3

5.5

Comparable ROCE, %

6.5

3.7

7.9

7.2

5.8

6.7

Operating cash flow, € million

136

179

225

468

1,405

Operating cash flow per share, €

0.26

0.34

0.17

0.43

0.88

2.66

Equity per share at the end of period, €

18.86

18.96

19.48

18.86

18.96

18.97

Capital employed at the end of period, € million

14,149

14,394

14,375

14,149

14,394

14,129

Net debt at the end of period, € million

3,313

3,310

2,962

3,313

3,310

3,004

Net debt to EBITDA (last 12 months)

2.36

2.12

2.30

2.36

2.12

2.29

Personnel at the end of period

15,184

16,307

14,801

15,184

16,307

15,127

Massimo Reynaudo, President and CEO, comments on the results:

“In the second quarter, we reached two important milestones in the transformation of UPM. We signed the definitive agreement to create the graphic paper joint venture with Sappi, and advanced the separation of the plywood business into the future WISA Group. Following these steps, UPM is positioned with stronger growth prospects and improved earnings quality.

During the quarter, all our businesses improved their results compared to the same period last year, with most also outperforming the previous quarter. Increased volumes, margin management and sustained efficiency measures supported our profitability in a business environment that turned inflationary.

In Q2, sales from our continuing operations were slightly up at €2,355 million, and comparable EBIT increased to €212 million, 71 percent higher than in the same period last year. Net debt at the end of the reporting period was €3,313 million, including both continuing and discontinued operations, and net debt to EBITDA ratio was 2.36.

In decarbonization solutions, UPM Biofuels recorded a strong quarter with good demand and healthy bio-premiums for advanced renewable fuels. Prices were further supported by higher fossil fuel reference prices. The ramp-up of our biorefinery in Leuna, Germany, continued. Customer deliveries of industrial sugars reached substantial volumes, and deliveries of renewable functional fillers and other lignin derivatives are expected to start during Q3. UPM Energy improved its results from last year, although the second quarter saw normal seasonality. Structurally, electricity consumption continued to grow year-on-year, and we are well positioned to create value by serving new large-scale consumers.

The markets for our advanced materials businesses, UPM Adhesive Materials and UPM Specialty Materials, showed robust growth in Europe and Asia. Both businesses succeeded in the markets, thanks to a focus on commercial excellence and product portfolio development, and sharpened competitiveness.

Our world-class pulp platform in Uruguay, UPM Fibres South, has consistently improved efficiency for several quarters in a row. In the second quarter, this helped us to fully offset the increases in logistics and other costs. Profitability was further improved by a moderate increase in pulp prices.

For the Fibres North platform in Finland, the business environment is challenging. Even though pulpwood prices have decreased, profitability remains low. The second quarter earnings were also impacted by the maintenance shutdown at the UPM Pietarsaari mill. We are planning temporary shutdowns of the UPM Kaukas pulp mill and potentially the UPM Pietarsaari pulp mill, to optimize production and wood sourcing, and ensure profitability.

UPM Communication Papers’ business performance was broadly stable, with slightly improved margins. Preparations for the planned graphic paper Joint Venture continued. In late May we signed the definitive agreement with Sappi, and secured financing arrangements for the Joint Venture. The EU merger control process moved to Phase II, with final resolutions expected by the end of 2026.

UPM Plywood continued to perform well as the business prepared for separation into an independent listed company, WISA Group. In April, the Board of Directors approved the demerger plan. Subject to the decision of the Extraordinary General Meeting, trading in the shares of WISA Group on Nasdaq Helsinki is currently expected to commence in early November. By separating the plywood business onto its own growth path, we are strengthening its future prospects and streamlining UPM’s business portfolio.

Following the planned graphic paper joint venture and plywood separation, UPM operates in structurally growing markets. The ongoing reshaping of UPM’s portfolio highlights our position in businesses with stronger growth characteristics, and our direction going forward is towards higher value-added products and lower cyclicality.”

Profit guidance, continuing operations

UPM’s comparable EBIT in H2 2026 from continuing operations is expected to be approximately in the range of €375-575 million (€479 million in H2 2025, and €471 million in H1 2026). These figures exclude UPM Plywood, which is classified as discontinued operations.

Outlook

There continue to be significant uncertainties in geopolitics and trade.

In H2 2026, compared with H1 2026, UPM’s performance is expected to be supported by moderately higher sales prices. Variable costs are expected to increase moderately. Energy refunds are expected to support UPM Communication Papers’ result in Q4. Maintenance activity is expected to increase from the comparison period. The production ramp-up at UPM Leuna is expected to increase costs.

In H2 2026, compared with H2 2025, UPM’s performance is expected to benefit from higher sales prices. Variable costs are expected to increase moderately. Fair value change of forest assets is expected to have a significantly smaller impact on comparable EBIT in H2 2026 than in H2 2025 (€131 million). The energy refunds to be booked in UPM Communication Papers in Q4 are anticipated to have a somewhat smaller positive impact than in 2025. Maintenance activity is expected to increase from the comparison period. The production ramp-up at UPM Leuna is expected to increase costs.

Sensitivity to pulp and electricity prices

UPM’s comparable EBIT is sensitive to pulp and electricity prices. The figures below represent group earnings sensitivities on annual level.

UPM is a large producer and consumer of chemical pulp. A €50/tonne change in average pulp price would impact annual comparable EBIT by approximately €180 million (net impact: assuming no correlation between pulp and paper prices) to approximately €270 million (gross impact: assuming paper pricing would match changes in pulp costs).

UPM is a large producer and consumer of electricity in Finland and separately hedges part of its electricity sales and purchases. Based on UPM’s estimated unhedged net electricity sales position in Finland in 2026, a €10/MWh change in average electricity market price in Finland would impact annual comparable EBIT by approximately €40 million.

Foreign exchange exposure

Fluctuations in monetary policies and economic conditions can significantly impact the value of various currencies, which in turn may affect UPM. Additionally, the escalation of global trade tensions could influence currency exchange rates. These currency fluctuations could impact UPM’s cash flow, earnings, or balance sheet, and may also affect the relative competitiveness between different currency regions.

The Group’s policy is to hedge an average of 50% of its estimated net currency cash flows on a rolling basis over the next 12-month period. At the end of Q2 2026, UPM’s estimated net currency cash flows for the next 12 months totaled approximately €1.5 billion. USD was the largest exposure at approximately €1.4 billion, followed by UYU, GBP, CNY and JPY. In addition, the earnings of UPM’s foreign subsidiaries are translated to euros in reporting. UPM has significant foreign subsidiaries in Uruguay, the U.S. and China. Foreign exchange risks are discussed in UPM’s Annual Report 2025 on pages 313-314.

Invitation to UPM’s webcast on the half-year financial report 2026

A webcast and a conference call for analysts and investors will start at 13:15 EEST. The 2026 half-year financial report will be presented in English by President and CEO Massimo Reynaudo and CFO Tapio Korpeinen. Participants can follow the webcast online via this link.

Participants wishing to ask questions after the presentation must register for the conference call. To participate in the conference call, please register here. After registering, you will be provided with telephone numbers, a user ID and a conference ID to access the conference. To ask a question, press *5 on your telephone keypad to join the queue.

The webcast will be available on the company website for 12 months after the call.

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 including the availability and cost of production inputs, 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. The main earnings sensitivities and the group’s cost structure are presented on page 276 of the Annual Report 2025. Risks and opportunities are discussed on pages 31-33, and risks and risk management are presented on pages 128-132.

UPM, Media relations
Mon-Fri 9:00-16:00 EEST
tel. +358 40 588 3284
media@upm.com

UPM
UPM is a material solutions company, renewing products and entire value chains with an extensive portfolio of renewable fibres, advanced materials, decarbonization solutions, and communication papers. Our performance in sustainability has been recognized by third parties, including EcoVadis and the Dow Jones Sustainability Indices. We operate globally and employ approximately 15,100 people worldwide, with annual sales of approximately €9.7 billion. Our shares are listed on Nasdaq Helsinki Ltd.
UPM – we renew the everyday
Read more: upm.com

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Technology

Acrab Unveils GΞLIX 1 SoC and Agent Box, Bringing State-of-the-Art AI to the Edge

Published

7 minutes ago

July 23, 2026

Built on a 5-nanometer process, the new SoC is designed to support models in the 100 billion parameter class, with full-stack software for private and responsive AI agents at the edge

SINGAPORE, July 23, 2026 /PRNewswire/ — Acrab, a technology company building agentic AI compute infrastructure for the next generation of intelligent systems, today unveiled GΞLIX 1, its first-generation edge AI system-on-chip (SoC), together with Agent Box, a personal edge AI system powered by the company’s full-stack computing platform.

As AI moves from generating answers to completing tasks, agents increasingly need to understand context, remember preferences and coordinate tools and devices in real time. Running these capabilities locally can produce faster responses, keep sensitive information under the user’s control and maintain core functions when cloud connectivity is limited.

For years, models in the 100 billion parameter class have required cloud infrastructure. GΞLIX 1 is designed to bring state-of-the-art AI models at this scale into locally operated edge systems. Powered by GΞLIX, Acrab’s Agent Box is a high-performance personal edge AI center designed to put AI agents into action in a more personal and customized way, with local large model inference, persistent memory, multimodal interactions and agent orchestration capabilities.

By replacing cloud AI’s recurring token-fees per use, Agent Box is a one-time investment with long-term value, hence relieving users’ token anxiety, and allowing AI to move from an occasional tool into an always-available assistant woven into everyday work and life.

“Generative AI helped people find answers. Agentic AI will help them get things done,” said Dr. Ken Phua, CEO of Acrab. “Running models in the 100 billion parameter class on a system small enough to sit on a desk presents a significant computing challenge. GΞLIX 1 is designed to deliver the performance, memory bandwidth and responsive local inference required, while Agent Box shows how that capability can become a complete user experience.”

A private AI center built for everyday life

Agent Box is designed as a private, always-on AI center for personal workspaces and homes. It keeps intelligence close to the people, information and physical environments it serves, while showing how device makers can turn Acrab’s computing platform into complete agentic AI experiences.

For decades, personal computing advanced in predictable steps: faster processors, larger screens, more storage. Agent Box represents something else entirely—the first system designed not to run programs, but to host intelligence.

Agent Box brings together local language and vision model inference, multimodal interaction, persistent memory and an orchestration layer that can understand goals, break tasks into steps and coordinate action across agents, systems and connected devices. Users’ data and memories remain private and stored locally on the device, while the system grows more capable and customized as the context deepens and memories accumulate. Acrab designed the compute architecture from the ground up to achieve optimal local AI performance, usability, cost efficiency, and power efficiency within one device.

A purpose-designed SoC for large model inference at the edge

GΞLIX 1 is built on a 5-nanometer process and is Acrab’s first SoC designed specifically for edge AI. Rather than relying on separate compute components, it integrates CPU, GPU and NPU resources with a unified memory architecture engineered for large AI models and agentic workloads.

The SoC features a 20-core Arm CPU, multicore NPU acceleration and 273 GB/s of unified memory bandwidth. It is designed to support local deployment of open-source models in up to the 100 billion parameter class, with coordinated execution across CPU, GPU and NPU resources. Supporting models at this scale locally places substantial demands on computing performance, memory bandwidth and power efficiency.

GΞLIX 1 is engineered for rapid responses at power levels suitable for systems that remain active throughout the day. A central design goal was reducing the delay before a model begins to respond, particularly with long prompts and large context windows.

In company testing, GΞLIX 1 achieved a prefill rate of 1416.8 tokens per second under a Gemma 26B A4B configuration with a 40K KV cache and a 10K token input, compared with 188.9 tokens per second on Mac Mini M4 Pro, representing up to 7.5X faster prefill performance. These capabilities turn a single chip into a versatile supercomputing platform for a wide range of applications.

A full-stack platform, from silicon to applications

Beyond the SoC, Acrab has built the software and system layers needed to turn local model inference into working agentic products. These include an optimized runtime and developer toolchain, agent operating system capabilities, reference designs and applications that help devices understand context, retain memory and coordinate real-world action.

Agent Box is the first expression of Acrab’s broader ambition to provide a horizontal computing foundation for agentic AI across a wide range of edge devices and intelligent systems.

Processing a substantial share of AI workloads locally can reduce dependence on metered cloud inference, lower recurring processing and data transfer costs, and avoid the delay involved in sending every interaction to a remote service. Cloud resources can still be used when a task requires them, allowing developers to choose the right balance between local and cloud execution.

Building a broader edge AI device ecosystem

Acrab plans to work with device manufacturers and developers to bring its computing platform into products including AI NAS systems, AI PCs, smart vehicles, and industrial and service robots.

Agent Box demonstrates how Acrab’s silicon and software can be integrated into a complete product experience. The company aims to provide a complete set of compute platform and agent-native infrastructure for the next generation of AI transformation across industries. By combining custom AI silicon, full-stack software, and reference designs of agents for use scenarios, Acrab enables industry partners and developers to bring intelligent AI products to market faster.

“Our goal is to give device makers and developers the foundation to bring agentic intelligence into many different products and environments,” Dr. Phua said. “Agent Box demonstrates what the technology can do today, while GΞLIX 1 and our full-stack platform are designed to support a much broader ecosystem of devices and applications.”

Product Launch Event Video Replay:

https://www.acrab.ai/https://www.youtube.com/watch?v=WdojjwucdTQ https://www.linkedin.com/events/7484797078045401088/

About Acrab

Acrab is a technology company building agentic AI compute infrastructure for the next generation of intelligent systems. Founded in 2024, the company develops high-performance AI compute architecture and integrated software platforms designed to bring AI agents into action, providing personalized assistance and real-time execution across a range of edge environments.

By combining purpose-designed silicon, advanced edge AI models, full-stack software and system orchestration, Acrab provides the computing foundation for AI agent systems across everyday life, bringing assistance, creativity, utility and value.

In June 2026, Acrab announced that it had received over US$350 million in cumulative financing from global venture capital firms and strategic industry investors, including early backers Vertex Ventures Southeast Asia & India, Vertex Growth, and K3.

For more information about Acrab, please visit https://www.acrab.ai/.

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Technology

IDnow Appoints Philippe Morel as Chief Executive Officer

Published

7 minutes ago

July 23, 2026

Philippe Morel brings over 30 years of financial services and technology leadership experience, with a track record of scaling regulated platform businesses in partnership with private equity.

MUNICH, July 23, 2026 /PRNewswire/ — IDnow, Europe’s leader in digital identity and fraud prevention, today announces the appointment of Philippe Morel as Chief Executive Officer, effective today. Philippe succeeds Andreas Bodczek, who steps down after more than seven years of leadership that transformed IDnow into a leading European provider of digital identity and fraud prevention.

The IDnow Trust Platform: From KYC to Continuous Trust

In June 2026, IDnow launched the IDnow Trust Platform, marking the company’s expansion beyond traditional identity verification. Designed to help regulated organisations move from Know Your Customer (KYC) to Trust Your Customer (TYC), the platform orchestrates identity verification, fraud prevention, biometric authentication and qualified digital trust services across the full customer lifecycle. Through four modular services — Identify, Authenticate, Protect and Trust — and its Orchestrate, Observe and Decide capabilities, customers can configure workflows, monitor risk signals in real time and automate decisions through a single integration. The platform is built to help organisations adapt to the evolving European regulatory landscape, including AMLR, eIDAS 2.0 and the emergence of EU Digital Identity Wallets, while addressing increasingly sophisticated AI-driven fraud.

A New Chapter for IDnow

Philippe Morel brings more than 30 years of leadership experience spanning financial services, technology platforms and regulated environments, with a consistent track record of strategic transformation and value creation in partnership with private equity.

Most recently, Philippe served as Chief Executive Officer of Railsr, a payments and embedded finance platform, where he led strategic repositioning and commercial rebuilding before the merger with Equals Money.

Prior to that, Philippe served as CEO of SETL, a blockchain-based financial market infrastructure provider, where he repositioned the business into payments and digital settlement networks, launched the Regulated Liability Network (RLN) tested with the New York Federal Reserve, and delivered tokenisation projects for tier-one financial institutions.

Before his executive career, Philippe worked at Boston Consulting Group, rising to Senior Partner and Managing Director. He led BCG’s Global Capital Markets practice and its Private Equity EMEA business, advising boards and CEOs of major financial institutions on strategy, transformation, M&A and growth across Europe, the US and Asia. He also served for nine years as Chair of BCG’s Global Audit and Risk Committee.

Philippe holds an MBA from Harvard Business School and a degree in Finance from HEC Paris.

Board Statement

Martin McCourt, Chair of IDnow, said: “We are delighted to welcome Philippe to IDnow at a pivotal moment. IDnow has recently launched its Trust Platform, expanding beyond traditional identity verification to help regulated organisations orchestrate identity, fraud prevention and compliance across the full customer lifecycle. Philippe’s background — combining deep strategic expertise with hands-on leadership of regulated technology and financial services platforms — is ideally suited to the opportunity ahead. We are confident that he will lead IDnow into its next phase of growth.”

Philippe Morel Statement

“IDnow is a genuinely exceptional business — a European-born leader in digital identity and fraud prevention at a moment when regulation, digital identity wallets and increasingly sophisticated fraud are reshaping the market. The newly launched IDnow Trust Platform is designed to help customers move beyond one-time verification towards continuous trust across the full customer lifecycle. I am energised by what this team has achieved and by the opportunity ahead. My first priority is to listen: to our customers, our colleagues and our partners. From there, we will define and execute IDnow’s next phase of growth together.”

A Tribute to Andreas Bodczek

The Board also takes this opportunity to express its deep gratitude to Andreas Bodczek, who has led IDnow with extraordinary vision and commitment since 2018. A seasoned technology entrepreneur with a Diplom Kaufmann from LMU München, Andreas brought to IDnow the experience of building and scaling digital businesses: as co-founder and CEO of Fyber, which he grew into a globally recognised mobile technology platform, a board partner at Point Nine Capital, and chairman at JTL Software.

At IDnow, his impact was transformative. He led the company through a pivotal transition from founder-led to PE-backed under Corsair’s ownership, providing the foundation for sustained growth. He drove the acquisitions of identity Trust Management AG and ARIADNEXT — the French market leader in remote identity verification — which significantly expanded IDnow’s capabilities, brought the Rennes engineering hub into the group, and established IDnow’s presence across Europe. Most recently, he oversaw the launch of the IDnow Trust Platform, marking the company’s expansion beyond traditional identity verification and creating a unified platform for identity, fraud prevention, authentication and qualified digital trust services across the customer lifecycle. His leadership has positioned IDnow well for its next chapter, and we wish him every success in what comes next.

About IDnow

IDnow is Europe’s leader in digital identity and fraud prevention, with a mission to transform trust into a powerful asset in the digital world. Through its broad portfolio of AI-driven, SaaS-based identity and fraud prevention solutions, IDnow establishes, maintains and enriches trust throughout the customer journey, enabling businesses to operate securely while driving growth and scalability. The IDnow Trust Platform provides unified access to identity verification, fraud prevention, biometric authentication and qualified digital trust services. IDnow has offices in Germany, the United Kingdom, Romania and France and is backed by Corsair Capital.

For more information, visit idnow.io.

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