Over the past years, UPM has evolved from a vertically
integrated paper company into a company with six separate business areas, each
targeting top performance in their respective markets.
As part of this transformation, UPM has turned former
internal resources, such as chemical pulp and energy, into customer-focused and
market-driven businesses, has created new business in biofuels and has
continued to grow in its businesses with strong long-term fundamentals for profitability and growth.
The structure has brought clarity and sharpened operational focus in each business, facilitating management of the business areas towards differentiated target settings. UPM has been able to allocate investments efficiently with high returns. The company's profitability has improved, shareholder returns have increased and the balance sheet has been strengthened. At the same time social and environmental performance has consistently improved.
UPM's businesses are competitive, they have strong market position and they operate mostly on healthily growing markets. UPM is well-positioned to capture attractive growth opportunities also in the coming years.
UPM's business model of six separate businesses enables optimal capital allocation decisions at the group level, as well as developing the business portfolio further. Thanks to its solid cash flow UPM may simultaneously carry out focused growth investments and attractive distribution to shareholders. The strong balance sheet gives UPM opportunity to accelerate business portfolio transformation through mergers and acquisitions or larger investments, when the opportunity and timing are right. However, UPM aims to maintain a strong balance sheet in all cases. Portfolio changes may be considered, if it would be the best way to increase long-term shareholder value.
Each business area is responsible for executing its own strategy and achieving targets. Group direction and support from global functions enable the businesses to capture benefits from UPM's brand, scale and integration, while navigating the complex operating environment.
With the Biofore strategy, UPM is committed to continue the transformation. A strong focus on performance and competitiveness, combined with an industry leading balance sheet, demonstrate our ability to execute it.