President and CEO Jussi Pesonen discussed UPM's ongoing year at the AGM - Labelstock business to be established as Label Division

President and CEO Jussi Pesonen discussed UPM's ongoing year at the AGM 
Labelstock business to be established as Label Division

President and CEO Jussi Pesonen assessed UPM's ongoing year in his review at
the Annual General Meeting. 

“In Europe, the good demand for paper has continued, and we expect that
deliveries for the full year will improve from last year.” 

“We have achieved price increases in newsprint, uncoated fine papers and some
speciality grades. The prices of coated fine papers have remained stable. In
the current market situation, it has not been possible to raise magazine paper
prices, and their price development has been clearly disappointing,” Pesonen
said. 

At the Annual General Meeting UPM announced that its labelstock business has
been established as a separate division as of the beginning of 2007. The new
Label Division consists of UPM Raflatac self-adhesive labelstock and RFID
(Radio Frequency Identification) tags. 

“Label business is part of UPM's core business, and it is a strategic growth
area for the company. We have invested strongly in this business in recent
years, and its annual sales and result have developed favourably. Reporting the
business separately will enhance transparency and facilitate the evaluation of
business development for the owners,” Pesonen said. 

In this connection, the Converting Division will be discontinued and the
reporting of Walki Wisa will be included in other operations. In February, UPM
announced that it has signed an agreement to sell Walki Wisa to funds managed
by the Finnish private equity investment company CapMan. The deal is estimated
to be completed during the second quarter of 2007. 

The key figures for 2005 and 2006 for the Label Division and the reorganised
other operations are included in the enclosed appendix. 

The CEO's address to the AGM is available in full at www.upm-kymmene.fi >
Investor Relations. 


UPM-Kymmene Corporation

Pirkko Harrela
Executive Vice President, Corporate Communications


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