About UPM

 
UPM sets internal financial targets for each business area and the whole Group. The financial targets emphasise the importance of cash flow and the financial flexibility of the company in steering the businesses.

The company’s long term target is an operating profit margin that exceeds 10%. The return on equity target is at least five percentage points above the yield of a 10-year risk-free investment such as the Finnish government’s euro-denominated bonds. At the end of 2011, the minimum target for return on equity, as defined above, was 7.3%.

The gearing ratio is to be kept below 90%. The company has raised the priority of debt reduction and emphasises its aim to meet the requirements of capital markets.

Dividend policy

UPM intends to pay as an annual dividend at least one third of net cash flow from operating activities less operational capital expenditure. To promote stability in
dividends, net cash flow will be calculated as an average over a three-year period.

Remaining funds are to be allocated between growth capital expenditure and debt reduction. The net cash flow from operating activities for 2011 was EUR 1,041 million and operational capital expenditure EUR 237 million.