Group | Businesses | Outcomes | |
Portfolio strategy Capital allocation Business targets Code of Conduct Responsibility targets | Business area strategies Commercial excellence Operational excellence Cost efficiency measures Focused growth project Innovation | Top performance Competitive advantage Value creation Stakeholder and societal value License to operate |
UPM FINANCIAL REPORT 2023 | 2 |
UPM FINANCIAL REPORT 2023 | 3 |
2023 | 2022 | 2021 | |
Sales, EURm | 10,460 | 11,720 | 9,814 |
Comparable EBITDA, EURm | 1,573 | 2,536 | 1,821 |
% of sales | 15.0 | 21.6 | 18.6 |
Operating profit, EURm | 608 | 1,974 | 1,562 |
Comparable EBIT, EURm | 1,013 | 2,096 | 1,471 |
% of sales | 9.7 | 17.9 | 15.0 |
Profit before tax, EURm | 464 | 1,944 | 1,548 |
Comparable profit before tax, EURm | 934 | 2,066 | 1,457 |
Profit for the period, EURm | 394 | 1,556 | 1,307 |
Comparable profit for the period, EURm | 755 | 1,679 | 1,204 |
Earnings per share (EPS), EUR | 0.73 | 2.86 | 2.41 |
Comparable EPS, EUR | 1.40 | 3.09 | 2.22 |
Return on equity (ROE), % | 3.2 | 13.0 | 12.7 |
Comparable ROE, % | 6.2 | 14.0 | 11.7 |
Return on capital employed (ROE), % | 3.5 | 12.8 | 12.4 |
Comparable ROCE, % | 6.4 | 13.6 | 11.7 |
Operating cash flow, EURm | 2,269 | 508 | 1,250 |
Operating cash flow per share, EUR | 4.25 | 0.95 | 2.34 |
Equity per share at the end of period, EUR | 20.93 | 23.44 | 20.34 |
Capital employed at the end of period, EURm | 14,916 | 17,913 | 13,759 |
Net debt, EURm | 2,432 | 2,374 | 647 |
Net debt to EBITDA | 1.55 | 0.94 | 0.35 |
Personnel at the end of period | 16,573 | 17,236 | 16,966 |
UPM FINANCIAL REPORT 2023 | 4 |
UPM FINANCIAL REPORT 2023 | 5 |
UPM FINANCIAL REPORT 2023 | 6 |
UPM FINANCIAL REPORT 2023 | 7 |
UPM FINANCIAL REPORT 2023 | 8 |
UPM Fibres consists of pulp and timber businesses. UPM Pulp offers a versatile range of responsibly-produced pulp grades suitable for a wide range of end-uses. UPM Timber offers certified sawn timber. UPM has three pulp mills in Finland, two mills and plantation operations in Uruguay and operates four sawmills in Finland. |
UPM Energy generates cost- competitive, zero-carbon electricity. Operations also include physical electricity and financial portfolio management as well as services to industrial electricity consumers. UPM Energy is the second largest electricity producer in Finland. UPM’s power generation capacity consists of hydropower, nuclear power and thermal power. |
2023 | 2022 | |
Sales, EURm | 3,044 | 2,704 |
Comparable EBITDA, EURm | 407 | 743 |
% of sales | 13.4 | 27.5 |
Change in fair value of forest assets and wood harvested, EURm | -20 | 11 |
Share of results of associates and joint ventures, EURm | 2 | 3 |
Depreciation, amortisation and impairment charges, EURm | -273 | -187 |
Operating profit, EURm | 116 | 517 |
% of sales | 3.8 | 19.1 |
Items affecting comparability in operating profit, EURm 1) | — | -53 |
Comparable EBIT, EURm | 116 | 570 |
% of sales | 3.8 | 21.1 |
Capital employed (average), EURm | 6,839 | 5,867 |
Comparable ROCE, % | 1.7 | 9.7 |
Pulp deliveries, 1,000 t | 4,139 | 2,761 |
2023 | 2022 | |
Sales, EURm | 628 | 734 |
Comparable EBITDA, EURm | 189 | 388 |
% of sales | 30.2 | 52.9 |
Depreciation, amortisation and impairment charges, EURm | -7 | -7 |
Operating profit, EURm | 182 | 381 |
% of sales | 29.1 | 52.0 |
Items affecting comparability in operating profit, EURm 1) | — | — |
Comparable EBIT, EURm | 182 | 381 |
% of sales | 29.0 | 52.0 |
Capital employed (average), EURm | 3,042 | 3,286 |
Comparable ROCE, % | 6.0 | 11.6 |
Electricity deliveries, GWh | 12,059 | 9,442 |
UPM FINANCIAL REPORT 2023 | 9 |
2023 | 2022 | |
Sales, EURm | 1,485 | 1,982 |
Comparable EBITDA, EURm | 146 | 251 |
% of sales | 9.8 | 12.7 |
Depreciation, amortisation and impairment charges, EURm | -47 | -41 |
Operating profit, EURm | 81 | 203 |
% of sales | 5.5 | 10.3 |
Items affecting comparability in operating profit, EURm 1) | -22 | -11 |
Comparable EBIT, EURm | 103 | 214 |
% of sales | 7.0 | 10.8 |
Capital employed (average), EURm | 737 | 681 |
Comparable ROCE, % | 14.0 | 31.5 |
2023 | 2022 | |
Sales, EURm | 1,485 | 1,677 |
Comparable EBITDA, EURm | 172 | 230 |
% of sales | 11.6 | 13.7 |
Depreciation, amortisation and impairment charges, EURm | -74 | -77 |
Operating profit, EURm | 98 | 153 |
% of sales | 6.6 | 9.1 |
Items affecting comparability in operating profit, EURm | — | — |
Comparable EBIT, EURm | 98 | 153 |
% of sales | 6.6 | 9.1 |
Capital employed (average), EURm | 875 | 889 |
Comparable ROCE, % | 11.2 | 17.2 |
Paper deliveries, 1000 t | 1,407 | 1,431 |
UPM FINANCIAL REPORT 2023 | 10 |
UPM Communication Papers offers an extensive product range of sustainably produced graphic papers for advertising and publishing as well as home and office uses. |
UPM Plywood offers high quality WISA® plywood and veneer products for construction, vehicle flooring, LNG shipbuilding, parquet manufacturing and other industrial applications. |
2023 | 2022 | |
Sales, EURm | 3,598 | 4,866 |
Comparable EBITDA, EURm | 544 | 697 |
% of sales | 15.1 | 14.3 |
Share of results of associates and joint ventures, EURm | -1 | 3 |
Depreciation, amortisation and impairment charges, EURm | -195 | -80 |
Operating profit, EURm | 174 | 631 |
% of sales | 4.8 | 13.0 |
Items affecting comparability in operating profit, EURm 1) | -288 | 12 |
Comparable EBIT, EURm | 462 | 619 |
% of sales | 12.8 | 12.7 |
Capital employed (average), EURm | 1,424 | 1,506 |
Comparable ROCE, % | 32.4 | 41.1 |
Paper deliveries, 1000 t | 3,528 | 4,703 |
2023 | 2022 | |
Sales, EURm | 422 | 539 |
Comparable EBITDA, EURm | 77 | 133 |
% of sales | 18.4 | 24.6 |
Depreciation, amortisation and impairment charges, EURm | -21 | -67 |
Operating profit, EURm | 50 | 44 |
% of sales | 11.9 | 8.2 |
Items affecting comparability in operating profit, EURm 1) | -6 | -65 |
Comparable EBIT, EURm | 56 | 109 |
% of sales | 13.4 | 20.3 |
Capital employed (average), EURm | 254 | 247 |
Comparable ROCE, % | 22.2 | 44.3 |
Plywood deliveries, 1,000 m3 | 429 | 616 |
UPM FINANCIAL REPORT 2023 | 11 |
Other Operations includes UPM Forest, UPM Biofuels, UPM Biochemicals, UPM Biomedicals and UPM Biocomposites business units as well as biofuels development and group services. UPM Forest secures competitive wood and biomass for UPM businesses and manages UPM-owned and privately owned forests in North Europe. In addition, UPM Forest offers forestry services to forest owners and forest investors. UPM Biofuels produces wood-based renewable diesel for all diesel engines and renewable naphtha that can be used as a biocomponent for gasoline or for replacing fossil raw materials in petrochemical industry. UPM operates one biorefinery in Finland. |
2023 | 2022 | |
Sales, EURm | 802 | 634 |
Comparable EBITDA, EURm | 29 | 126 |
Change in fair value of forest assets and wood harvested, EURm | -82 | 2 |
Share of results of associated companies and joint ventures, EURm | -2 | -2 |
Depreciation, amortisation and impairment charges, EURm | -44 | -64 |
Operating profit, EURm | -101 | 64 |
Items affecting comparability in operating profit, EURm 1) | -87 | -16 |
Comparable EBIT, EURm | -14 | 81 |
Capital employed (average), EURm | 2,922 | 2,577 |
Comparable ROCE, % | -0.5 | 3.1 |
UPM FINANCIAL REPORT 2023 | 12 |
UPM FINANCIAL REPORT 2023 | 13 |
UPM FINANCIAL REPORT 2023 | 14 |
UPM FINANCIAL REPORT 2023 | 15 |
UPM FINANCIAL REPORT 2023 | 16 |
TYPE OF RISK | CONSOLIDATED FINANCIAL STATEMENT NOTE |
Credit risk | 4.6 Working capital |
Liquidity and refinancing risk | 5.1 Capital management |
Interest rate risk | 6.1 Financial risk management |
Foreign exchange risk | 6.1 Financial risk management |
Electricity price risk | 6.1 Financial risk management |
Counterparty risk | 6.2 Derivatives and hedge accounting |
UPM FINANCIAL REPORT 2023 | 17 |
UPM FINANCIAL REPORT 2023 | 18 |
UPM FINANCIAL REPORT 2023 | 19 |
UPM FINANCIAL REPORT 2023 | 20 |
UPM FINANCIAL REPORT 2023 | 21 |
REQUIREMENTS | PAGES |
GOVERNANCE | |
a) The role of the Board in overseeing climate and nature-related issues | Pages 138–139, paragraph "Roles of the group management and functions in leading non-financial matters" |
b) The role of management in assessing and managing climate and nature-related issues | Pages 138–139, paragraph "Roles of the group management and functions in leading non-financial matters" |
STRATEGY | |
a) The climate and nature-related risks and opportunities over the short, medium and long term | Pages 133–137, chapter "Risks" Pages 34–35, chapter "Risks and opportunities" Pages 10–13, chapter "Beyond fossils" |
b) The impact of climate and nature-related risks and opportunities on business, strategy and financial planning | |
c) The resilience of strategy, taking into consideration climate and nature-related scenarios | Page 141, paragraphs "Environment", "Climate" and "Biodiversity and ecosystems" Pages 10–13, chapter "Beyond fossils" |
RISK MANAGEMENT | |
a) Processes for identifying climate and nature-related risks | Page 133, paragraph "Risk management" Pages 138–139, paragraph "Roles of the group management and functions in leading non-financial matters" |
b) Processes for managing climate and nature-related risks | Page 133, paragraph "Risk management" Pages 138–139, paragraph "Roles of the group management and functions in leading non-financial matters" |
c) How processes for identifying, assessing, and managing climate-related risks are integrated into overall risk management | Page 133, paragraph "Risk management" Pages 106–110, chapter "Governance" |
METRICS AND TARGETS | |
a) Metrics used to assess climate and nature-related risks and opportunities | Pages 14–15, "Key figures 2023" and pages 32–33, "Responsibility targets" |
b) Climate: Scope 1, Scope 2 and Scope 3 emissions, and related risks Nature: Positive impact on forest biodiversity and developing a monitoring system and obstacle-free streams, and related risks | Page 141, paragraph "Climate" Page 91, graph "Sources of UPM's greenhouse gas emissions" Page 141, "Biodiversity and ecosystems" and pages 84–85 "Enhancing Biodiversity" Page 83, "Study on the biodiversity of clearcut areas", pages 84 "Landlocked salmon returning to the river" and page 85 "Setting science-based targets for nature conservation" |
c) Targets used to manage climate-related risks and opportunities and performance against targets | Page 143, table "Material non–financial topics and key performance indicators" Pages 32–33, table "Responsibility targets" |
UPM FINANCIAL REPORT 2023 | 22 |
TOPIC | MANAGEMENT | KEY PERFORMANCE INDICATOR | 2023 RESULTS |
Governance/ Anti- corruption | Corruption related risks are identified and assessed in connection with the company’s risk management process. These risks are managed and mitigated by training, communication, due diligence procedures, audits and practical guidelines specifically targeted at anti-corruption and anti- bribery. UPM Code of Conduct training is mandatory for all employees and anti-bribery training to all salaried employees. | 100% coverage of participation in UPM Code of Conduct training (continuous) | 98% (97%) of active employees completed the training for the UPM Code of Conduct. |
Human rights | UPM is committed to respecting human rights based on its Code of Conduct. UPM has a process for assessing human rights at UPM site level, including community relations and local sourcing, as well as for risk assessments and audits for suppliers. | Continuous supplier auditing based on systematic risk assessment practices | 95 (121) supplier audits were conducted based on identified risks, including human rights, social and environmental topics. In addition, about 890 (360) contractor reviews with focus on working conditions were carried out. |
Responsible sourcing | UPM requires its suppliers, third party intermediaries and joint venture partners to apply the same principles as in the UPM Code of Conduct. These supplier requirements are defined in the UPM Supplier and Third Party Code. | 80% of total supplier spend covered by UPM Supplier and Third Party Code (continuous) | 89% (88%) of supplier spend covered by UPM Supplier and Third-Party Code. |
Responsible leadership | UPM continuously develops leadership capabilities, management teams and working environments. UPM measures work environments, team work and leadership with an annual engagement survey. UPM’s global leadership development portfolio develops capabilities to lead oneself, lead people and lead business. Programmes address, e.g., inspiring and purposeful leadership, coaching, conversation and feedback skills, resilience and leading in complexity. | Employee engagement clearly above benchmark by 2030 | In the Employee Engagement Survey average score of 70 (70). This is 5 (5) points below the global external benchmark. |
Learning and development | UPM has a systematic process for goal setting and development planning for all employees globally to ensure high performance and continuous professional development. | Goal setting discussions are held and development plans created for employees, completion rate 100% by 2030 | 85% (83%) of employees had completed individual goal settings or annual discussions. 81% (58%) had a development plan documented. |
Safe and healthy working environment | UPM has a comprehensive safety management system which promotes a proactive and engaging safety culture. UPM uses means such as safety audits and reporting on safety-related near misses and safety observations. | No fatalities Total recordable injury frequency (TRIF) <2 by 2030, including contractors | 0 (3) fatal accidents, 5 (5) serious accidents TRIF was 6.1 (6.4) for UPM workforce and 5.2 (5.9) including contractors. |
Diversity and inclusion | UPM wants to develop organisational culture and local workplace to ensure an inclusive and diverse working environment. UPM has committed to, and promotes, diversity and inclusion in its policies. UPM reviews the diversity status of all its businesses and functions regularly. The composition of UPM key management teams and inclusiveness is discussed and development actions planned and implemented. | UPM is among top 10% companies by 2030 on employees’ sense of belonging at UPM | In the Employee Engagement Survey, question about belonging average score of 68 (68). This is 12 (12) points below the benchmark of top 10% companies. |
Fair rewarding | UPM’s rewarding and recognition philosophy is to reward high performance. We aim to ensure fair, equitable and competitive rewarding for all employees. In addition to competitive, robust and performance based rewarding practices, we have yearly review processes ensuring the gender pay equity and employees’ pay meeting at least a living wage locally. UPM ensures that employees have sufficient information to understand what their rewarding comprises and how they can influence on its development. | Ensure gender pay equity for all employees by implementing yearly review process to identify and close unexplained pay gaps | Company-wide review done and pay adjustments implemented to close identified statistically significant unexplained gaps related to gender. |
Product stewardship | Ecolabels help customers make responsible choices and provide stakeholders with important information. Third-party verified environmental certificates and labels tell customers about the environmental performance of our products. | All applicable products eligible for ecolabelling by 2030 | 89% (87%) of UPM sales were eligible for ecolabelling. |
Climate | UPM favours the use of renewable and other carbon-neutral energy sources and strives to continuously improve its energy efficiency across all its operations. Strengthened targets for scope 1 and 2 to be in line with the commitment to Science Based Targets and 1.5° pledge. | Fossil CO2 emissions from its own combustion and purchased electricity (Scope 1 and 2) reduced by 65% by 2030 (compared to 2015) | Fossil CO2 emissions reduced by 45% compared to 2015 and 17% compared to 2022. |
Water | UPM's goal is to minimise the impact of its operations on water resources, safeguard the natural water cycle in forests, and maintain the functioning of aquatic ecosystems. | Wastewater volume reduced by 30% by 2030 (compared to 2008) | 7% (13%) reduction in wastewater volume achieved since 2008 for the UPM average product. |
UPM FINANCIAL REPORT 2023 | 23 |
TOPIC | MANAGEMENT | KEY PERFORMANCE INDICATOR | 2023 RESULTS |
Waste | Circular economy means both financial and environmental efficiency. UPM aims to reuse materials and products, reduce the amount of solid waste and increase recycling and recovery in its operations. | No process waste sent to landfills or to incineration without energy recovery by 2030 | 87% (90%) of all UPM’s process waste was recovered and recycled. The total amount of waste to landfills increased by 50% compared to 2022. |
Forest | UPM is committed to sustainable forestry and uses third-party verified chains-of-custody to ensure that wood is legally sourced from sustainably managed forests. | All fibre certified by 2030 | 87% (86%) of all wood used by UPM is sourced from certified forests. |
Biodiversity | UPM aims to improve biodiversity with tangible actions for maximising positive impacts and mitigating possible negative impacts on land, in stream waters or in mill operations. | Positive impact on forest biodiversity in Finland (continuous) | Overall positive development as all measured subindicators were positive. For deadwood volume the data will be available in 2024 in connection with national forest inventory. |
UPM FINANCIAL REPORT 2023 | 24 |
UPM FINANCIAL REPORT 2023 | 25 |
UPM FINANCIAL REPORT 2023 | 26 |
Fiscal year 2023 | 2023 | Substantial contribution criteria | DNSH criteria (‘Does Not Significantly Harm’) | ||||||||||||||||
Economic activities | Code | Turnover | Proport ion of turnove r %, year 2023 | Climate change mitigation | Climate change adaptation | Water | Pollution | Circular economy | Biodiversity | Climate change mitigation | Climate change adaptation | Water | Pollution | Circular economy | Biodiversity | Minimum safeguards | Proporti on of Taxono my- aligned (A.1.) or - eligible (A.2.) turnover , year 2022 | Categ ory enabli ng activit y | Cate gory transi tional activi ty |
EURm | % | Y; N; N/EL | Y/N | Y/N | Y/N | Y/N | Y/N | Y/N | Y/N | % | E | T | |||||||
A. TAXONOMY-ELIGIBLE ACTIVITIES | |||||||||||||||||||
A.1. Environmentally sustainable activities (Taxonomy-aligned) | |||||||||||||||||||
Forest management | CCM 1.3 | 34 | 0% | Y | N/ EL | N/ EL | N/ EL | N/ EL | N/ EL | Y | Y | Y | Y | Y | Y | Y | 0% | E | |
Electricity generation from hydropower | CCM 4.5 | 136 | 1% | Y | N/ EL | N/ EL | N/ EL | N/ EL | N/ EL | Y | Y | Y | Y | Y | Y | Y | 1% | E | |
Manufacture of biogas and biofuels for use in transport | CCM 4.13 | 414 | 4% | Y | N/ EL | N/ EL | N/ EL | N/ EL | N/ EL | Y | Y | Y | Y | Y | Y | Y | 3% | E | |
Cogeneration of heat/cool and power from bioenergy | CCM 4.20 | 77 | 1% | Y | N/ EL | N/ EL | N/ EL | N/ EL | N/ EL | Y | Y | Y | Y | Y | Y | Y | 1% | E | |
Turnover of environmentally sustainable activities (Taxonomy-aligned) (A.1) | 660 | 6% | 6% | —% | —% | —% | —% | —% | Y | Y | Y | Y | Y | Y | Y | 5% | |||
Of which Enabling | 660 | 6% | 6% | —% | —% | —% | —% | —% | Y | Y | Y | Y | Y | Y | Y | 5% | E | ||
Of which Transitional | — | — | —% | Y | Y | Y | Y | Y | Y | Y | —% | T | |||||||
A.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) | |||||||||||||||||||
EL; N/EL | EL; N/EL | EL; N/EL | EL; N/EL | EL; N/EL | EL; N/EL | ||||||||||||||
Forest management | CCM 1.3 | 28 | 0% | EL | N/EL | N/EL | N/EL | N/EL | N/EL | 0% | |||||||||
Sea and coastal freight water transport, vessels for port operations and auxiliary activities | CCM 6.10 | 3 | 0% | EL | N/EL | N/EL | N/EL | N/EL | N/EL | 0% | |||||||||
Turnover of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) | 31 | 0% | 0% | —% | —% | —% | —% | —% | 0% | ||||||||||
Turnover of Taxonomy-eligible activities (A.1 + A.2) | 691 | 7% | 7% | —% | —% | —% | —% | —% | 5% | ||||||||||
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES | |||||||||||||||||||
Turnover of Taxonomy-non-eligible activities | 9,769 | 93% | |||||||||||||||||
TOTAL | 10,460 | 100% |
UPM FINANCIAL REPORT 2023 | 27 |
Fiscal year 2023 | 2023 | Substantial contribution criteria | DNSH criteria (‘Does Not Significantly Harm’) | ||||||||||||||||
Economic activities | Code(s) | Absolut e CapEx | Proport ion of CapEx % | Climate change mitigation | Climate change adaptation | Water | Pollution | Circular economy | Biodiversity | Climate change mitigation | Climate change adaptation | Water | Pollution | Circular economy | Biodiversity | Minimum safeguards | Proportion of Taxonomy -aligned (A.1.) or - eligible (A.2.) CapEx, year 2022 | Catego ry enablin g activity | Catego ry transitio nal activity |
EURm | % | Y; N; N/EL | Y; N; N/EL | Y; N; N/EL | Y; N; N/EL | Y; N; N/EL | Y; N; N/EL | Y/N | Y/N | Y/N | Y/N | Y/N | Y/N | Y/N | % | E | T | ||
A. TAXONOMY-ELIGIBLE ACTIVITIES | |||||||||||||||||||
A.1. Environmentally sustainable activities (Taxonomy-aligned) | |||||||||||||||||||
Afforestation | CCM 1.1 | 3 | 0% | Y | N/ EL | N/ EL | N/ EL | N/ EL | N/ EL | Y | Y | Y | Y | Y | Y | Y | 0% | E | |
Forest management | CCM 1.3 | 54 | 4% | Y | N/ EL | N/ EL | N/ EL | N/ EL | N/ EL | Y | Y | Y | Y | Y | Y | Y | 5% | E | |
Manufacture of other low carbon technologies | CCM 3.6 | 385 | 29% | Y | N/ EL | N/ EL | N/ EL | N/ EL | N/ EL | Y | Y | Y | Y | Y | Y | Y | 19% | E | |
Electricity generation from hydropower | CCM 4.5 | 3 | 0% | Y | N/ EL | N/ EL | N/ EL | N/ EL | N/ EL | Y | Y | Y | Y | Y | Y | Y | 0% | E | |
Manufacture of biogas and biofuels for use in transport | CCM 4.13 | 14 | 1% | Y | N/ EL | N/ EL | N/ EL | N/ EL | N/ EL | Y | Y | Y | Y | Y | Y | Y | 1% | E | |
Cogeneration of heat/cool and power from bioenergy | CCM 4.20 | 0 | 0% | Y | N/ EL | N/ EL | N/ EL | N/ EL | N/ EL | Y | Y | Y | Y | Y | Y | Y | 0% | E | |
CapEx of environmentally sustainable activities (Taxonomy-aligned) (A.1) | 460 | 35% | 35% | —% | —% | —% | —% | —% | Y | Y | Y | Y | Y | Y | Y | 26% | |||
Of which Enabling | 460 | 35% | 35% | —% | —% | —% | —% | —% | Y | Y | Y | Y | Y | Y | Y | 26% | E | ||
Of which Transitional | — | — | —% | Y | Y | Y | Y | Y | Y | Y | —% | T | |||||||
A.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) | |||||||||||||||||||
EL; N/ EL | EL; N/EL | EL; N/EL | EL; N/EL | EL; N/EL | EL; N/EL | ||||||||||||||
Sea and coastal freight water transport, vessels for port operations and auxiliary activities | CCM 6.1 | 38 | 3% | EL | N/EL | N/EL | N/EL | N/EL | N/EL | 4% | |||||||||
CapEx of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) | 38 | 3% | 3% | —% | —% | —% | —% | —% | 4% | ||||||||||
CapEx of Taxonomy-eligible activities (A.1 + A.2) | 498 | 38% | 38% | —% | —% | —% | —% | —% | 29% | ||||||||||
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES | |||||||||||||||||||
CapEx of Taxonomy-non-eligible activities (B) | 830 | 62% | |||||||||||||||||
TOTAL | 1,329 | 100% |
UPM FINANCIAL REPORT 2023 | 28 |
Fiscal year 2023 | 2023 | Substantial contribution criteria | DNSH criteria (‘Does Not Significantly Harm’) | ||||||||||||||||||||
Economic activities | Code(s) | Absolu te OpEx | Proport ion of OpEx % | Climate change mitigation | Climate change adaptation | Water | Pollution | Circular economy | Biodiversity | Climate change mitigation | Climate change adaptation | Water | Pollution | Circular economy | Biodiversity | Minimum safeguards | Proporti on of Taxono my- aligned (A.1.) or - eligible (A.2.) OpEx, year 2022 | Catego ry enablin g activity | Categor y transitio nal activity | ||||
EURm | % | Y; N; N/EL | Y; N; N/EL | Y; N; N/EL | Y; N; N/EL | Y; N; N/EL | Y; N; N/EL | Y/N | Y/N | Y/N | Y/N | Y/N | Y/N | Y/N | % | E | T | ||||||
A. TAXONOMY-ELIGIBLE ACTIVITIES | |||||||||||||||||||||||
A.1. Environmentally sustainable activities (Taxonomy-aligned) | |||||||||||||||||||||||
Forest management | CCM 1.3 | 24 | 3% | Y | N/ EL | N/ EL | N/ EL | N/ EL | N/ EL | Y | Y | Y | Y | Y | Y | Y | 3% | E | |||||
Manufacture of other low carbon technologies | CCM 3.6 | 15 | 2% | Y | N/ EL | N/ EL | N/ EL | N/ EL | N/ EL | Y | Y | Y | Y | Y | Y | Y | 2% | E | |||||
Electricity generation from hydropower | CCM 4.5 | 6 | 1% | Y | N/ EL | N/ EL | N/ EL | N/ EL | N/ EL | Y | Y | Y | Y | Y | Y | Y | 1% | E | |||||
Manufacture of biogas and biofuels for use in transport | CCM 4.13 | 28 | 4% | Y | N/ EL | N/ EL | N/ EL | N/ EL | N/ EL | Y | Y | Y | Y | Y | Y | Y | 2% | E | |||||
Cogeneration of heat/cool and power from bioenergy | CCM 4.20 | 11 | 2% | Y | N/ EL | N/ EL | N/ EL | N/ EL | N/ EL | Y | Y | Y | Y | Y | Y | Y | 3% | E | |||||
OpEx of environmentally sustainable activities (Taxonomy-aligned) (A.1) | 84 | 12% | 12% | —% | —% | —% | —% | —% | Y | Y | Y | Y | Y | Y | Y | 11% | |||||||
Of which Enabling | 84 | 12% | 12% | —% | —% | —% | —% | —% | Y | Y | Y | Y | Y | Y | Y | 11% | E | ||||||
Of which Transitional | — | — | —% | Y | Y | Y | Y | Y | Y | Y | —% | T | |||||||||||
A.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) | |||||||||||||||||||||||
EL; N/EL | EL; N/EL | EL; N/EL | EL; N/EL | EL; N/EL | EL; N/EL | ||||||||||||||||||
Sea and coastal freight water transport, vessels for port operations and auxiliary activities | CCM 6.1 | 0 | 0% | EL | N/EL | N/EL | N/EL | N/EL | N/EL | 0% | |||||||||||||
OpEx of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) | 0 | 0% | 0% | —% | —% | —% | —% | —% | 0% | ||||||||||||||
OpEx of Taxonomy-eligible activities (A.1 + A.2) | 84 | 12% | 12% | —% | —% | —% | —% | —% | 11% | ||||||||||||||
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES | |||||||||||||||||||||||
OpEx of Taxonomy-non-eligible activities (B) | 628 | 88% | |||||||||||||||||||||
Total (A + B) | 712 | 100% |
UPM FINANCIAL REPORT 2023 | 29 |
Row | Nuclear energy related activities | |
1. | The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity generation facilities that produce energy from nuclear processes with minimal waste from the fuel cycle. | NO |
2. | The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production, as well as their safety upgrades, using best available technologies. | YES |
3. | The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production from nuclear energy, as well as their safety upgrades. | YES |
Fossil gas related activities | ||
4. | The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce electricity using fossil gaseous fuels. | NO |
5. | The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and power generation facilities using fossil gaseous fuels. | NO |
6. | The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities that produce heat/cool using fossil gaseous fuels. | NO |
Row | Economic activities | Amount and proportion | |||||
CCM + CCA | Climate change mitigation (CCM) | Climate change adaptation (CCA) | |||||
Amount | % | Amount | % | Amount | % | ||
1. | 4.26. Pre-commercial stages of advanced technologies to produce energy from nuclear processes with minimal waste from the fuel cycle | ||||||
2. | 4.27. Construction and safe operation of new nuclear power plants, for the generation of electricity or heat, including for hydrogen production, using best-available technologies | 136 | 1% | 136 | 1% | — | —% |
3. | 4.28. Electricity generation from nuclear energy in existing installations | 198 | 2% | 198 | 2% | — | —% |
4. | 4.29. Electricity generation from fossil gaseous fuels | ||||||
5. | 4.30. High-efficiency co-generation of heat/cool and power from fossil gaseous fuels | ||||||
6. | 4.31. Production of heat/cool from fossil gaseous fuels in an efficient district heating and cooling system | ||||||
7. | Amount and proportion of other taxonomy- aligned economic activities not referred to in rows above in the denominator of Turnover | 660 | 6% | 660 | 6% | — | —% |
8. | Total Turnover | 10,460 | 100% | 10,460 | 100% | — | —% |
UPM FINANCIAL REPORT 2023 | 30 |
Row | Economic activities | Amount and proportion | |||||
CCM + CCA | Climate change mitigation (CCM) | Climate change adaptation (CCA) | |||||
Amount | % | Amount | % | Amount | % | ||
1. | 4.26. Pre-commercial stages of advanced technologies to produce energy from nuclear processes with minimal waste from the fuel cycle | ||||||
2. | 4.27. Construction and safe operation of new nuclear power plants, for the generation of electricity or heat, including for hydrogen production, using best-available technologies | ||||||
3. | 4.28. Electricity generation from nuclear energy in existing installations | ||||||
4. | 4.29. Electricity generation from fossil gaseous fuels | ||||||
5. | 4.30. High-efficiency co-generation of heat/cool and power from fossil gaseous fuels | ||||||
6. | 4.31. Production of heat/cool from fossil gaseous fuels in an efficient district heating and cooling system | ||||||
7. | Amount and proportion of other taxonomy- aligned economic activities not referred to in rows above in the denominator of CapEx | 460 | 35% | 460 | 35% | — | —% |
8. | Total CapEx | 1,329 | 100% | 1,329 | 100% | — | —% |
Row | Economic activities | Amount and proportion | |||||
CCM + CCA | Climate change mitigation (CCM) | Climate change adaptation (CCA) | |||||
Amount | % | Amount | % | Amount | % | ||
1. | 4.26. Pre-commercial stages of advanced technologies to produce energy from nuclear processes with minimal waste from the fuel cycle | ||||||
2. | 4.27. Construction and safe operation of new nuclear power plants, for the generation of electricity or heat, including for hydrogen production, using best-available technologies | 16 | 2% | 16 | 2% | — | —% |
3. | 4.28. Electricity generation from nuclear energy in existing installations | 41 | 6% | 41 | 6% | — | —% |
4. | 4.29. Electricity generation from fossil gaseous fuels | ||||||
5. | 4.30. High-efficiency co-generation of heat/cool and power from fossil gaseous fuels | ||||||
6. | 4.31. Production of heat/cool from fossil gaseous fuels in an efficient district heating and cooling system | ||||||
7. | Amount and proportion of other taxonomy- aligned economic activities not referred to in rows above in the denominator of OpEx | 84 | 12% | 84 | 12% | — | —% |
8. | Total OpEx | 712 | 100% | 712 | 100% | — | —% |
UPM FINANCIAL REPORT 2023 | 31 |
Row | Economic activities | Amount and proportion | |||||
CCM + CCA | Climate change mitigation (CCM) | Climate change adaptation (CCA) | |||||
Amount | % | Amount | % | Amount | % | ||
1. | 4.26. Pre-commercial stages of advanced technologies to produce energy from nuclear processes with minimal waste from the fuel cycle | ||||||
2. | 4.27. Construction and safe operation of new nuclear power plants, for the generation of electricity or heat, including for hydrogen production, using best-available technologies | 136 | 14% | 136 | 14% | — | —% |
3. | 4.28. Electricity generation from nuclear energy in existing installations | 198 | 20% | 198 | 20% | — | —% |
4. | 4.29. Electricity generation from fossil gaseous fuels | ||||||
5. | 4.30. High-efficiency co-generation of heat/cool and power from fossil gaseous fuels | ||||||
6. | 4.31. Production of heat/cool from fossil gaseous fuels in an efficient district heating and cooling system | ||||||
7. | Amount and proportion of other taxonomy- aligned economic activities not referred above in the numerator of turnover | 660 | 66% | 660 | 66% | — | —% |
8. | Total amount and proportion of taxonomy- aligned economic activities in the numerator of the Turnover | 995 | 100% | 995 | 100% | — | —% |
Row | Economic activities | Amount and proportion | |||||
CCM + CCA | Climate change mitigation (CCM) | Climate change adaptation (CCA) | |||||
Amount | % | Amount | % | Amount | % | ||
1. | 4.26. Pre-commercial stages of advanced technologies to produce energy from nuclear processes with minimal waste from the fuel cycle | ||||||
2. | 4.27. Construction and safe operation of new nuclear power plants, for the generation of electricity or heat, including for hydrogen production, using best-available technologies | ||||||
3. | 4.28. Electricity generation from nuclear energy in existing installations | ||||||
4. | 4.29. Electricity generation from fossil gaseous fuels | ||||||
5. | 4.30. High-efficiency co-generation of heat/cool and power from fossil gaseous fuels | ||||||
6. | 4.31. Production of heat/cool from fossil gaseous fuels in an efficient district heating and cooling system | ||||||
7. | Amount and proportion of other taxonomy- aligned economic activities not referred to in rows above in the numerator of CapEx | 460 | 100% | 460 | 100% | — | —% |
8. | Total amount and proportion of taxonomy- aligned economic activities in the numerator of the CapEx | 460 | 100% | 460 | 100% | — | —% |
UPM FINANCIAL REPORT 2023 | 32 |
Row | Economic activities | Amount and proportion | |||||
CCM + CCA | Climate change mitigation (CCM) | Climate change adaptation (CCA) | |||||
Amount | % | Amount | % | Amount | % | ||
1. | 4.26. Pre-commercial stages of advanced technologies to produce energy from nuclear processes with minimal waste from the fuel cycle | ||||||
2. | 4.27. Construction and safe operation of new nuclear power plants, for the generation of electricity or heat, including for hydrogen production, using best-available technologies | 16 | 12% | 16 | 12% | — | —% |
3. | 4.28. Electricity generation from nuclear energy in existing installations | 41 | 29% | 41 | 29% | — | —% |
4. | 4.29. Electricity generation from fossil gaseous fuels | ||||||
5. | 4.30. High-efficiency co-generation of heat/cool and power from fossil gaseous fuels | ||||||
6. | 4.31. Production of heat/cool from fossil gaseous fuels in an efficient district heating and cooling system | ||||||
7. | Amount and proportion of other taxonomy- aligned economic activities not referred to in rows above in the numerator of OpEx | 84 | 59% | 84 | 59% | — | —% |
8. | Total amount and proportion of taxonomy- aligned economic activities in the numerator of the OpEx | 141 | 100% | 141 | 100% | — | —% |
UPM FINANCIAL REPORT 2023 | 33 |
UPM FINANCIAL REPORT 2023 | 34 |
UPM FINANCIAL REPORT 2023 | 35 |
UPM FINANCIAL REPORT 2023 | 36 |
UPM FINANCIAL REPORT 2023 | 37 |
BUSINESS AREA | DESCRIPTION |
UPM Fibres | |
UPM Energy | The focus was on improving the cost-competitiveness and environmental performance of hydropower production assets and on developing competencies and business operations related to the optimisation of industrial energy consumption and demand-side flexibility. UPM Energy participated in several research programmes and undertook development work with the aim of improving UPM’s power generation and consumption operations in a changing electricity market, as well as developing means to mitigate the impact of hydro power operations on rivers and migratory fish as a part of UPM’s Stream water programme. |
UPM Raflatac | UPM Raflatac product development in Strategic Business Units and in Global R&D continues to support UPM’s sustainable development goals and commitments in self-adhesive label materials. Packaging recyclability, reduction of raw materials and new renewable raw materials are core elements in all UPM Raflatac’s R&D projects supporting UPM’s beyond fossils strategy. Continuous improvements in quality and cost efficiency remain essential to product and process development. The AMC acquisition brings new technologies and products which will further strengthen UPM Raflatac’s technical competencies in self-adhesive materials. This will enable new opportunities for future product development. |
UPM Specialty Papers | R&D and product development initiatives aim to enable high performance and efficiency in the value chain and to develop fibre-based alternatives for non-renewable materials. These initiatives also support growth targets by driving the innovation of products for new applications. We continue to focus on co-creating sustainable paper-based packaging solutions for various end-uses; together with the packaging value network; we currently have several ongoing co-creation initiatives supported by our excellent R&D infrastructure including Northern European and Asian R&D centres. UPM Specialty Papers continues to develop release liner base papers to further improve efficiency and minimise the environmental impact of the value chain. For example, our downgauging initiatives support our customers’ material efficiency targets. We are also driving an industry- wide design-for-recycling approach across the label and tape value chains. |
UPM Communication Papers | In the area of energy, we have electrified our heat and steam generation and invested considerably in power-to-heat boilers at our paper locations in order to enable reliable heat supply in case of gas or other fuel supply disruptions, improve our cost competitiveness and reduced CO2 emissions in an increasingly volatile electricity system. Furthermore, the focus was on technological innovations that help minimise energy needs at the production sites. Paper mills also developed further intelligent operations to enable increasing demand-side management towards the electricity markets and networks to support system stability and decrease emissions at peak times. The Research & Development Centre in Lappeenranta, Finland and the Central European Support Team in Augsburg, Germany continued to focus on investigating fibre concepts for various paper grades. The teams have been further optimising recovered paper (RCP) supply by various quality studies. UPM Communication Papers continued to participate in projects and association activities to keep RCP recyclable, e. g. in the cycle4green initiative. Furthermore, our R&D teams provided support to optimise the deinking process with the aim of minimising material losses and reducing energy and the water consumption. Product portfolio development focused on the needs of key customer groups. In terms of operations efficiency, our R&D efforts concentrated on improving the efficiency of several mills for pinpointed efficiency supporting actions as well as safety-improving areas. Contributions from the R&D teams contributed to meeting the 2030 targets in the areas of energy, water consumption, effluent treatment and resource efficiency. |
UPM Plywood | UPM Plywood product management and development provides competitive products within selected end-use areas in collaboration with our customers, superior technical expertise and support for customers, and support for the commercialisation of newly developed products and applications. An example would be further expanding the use of lignin-based WISA BioBond gluing solution to new product lines. |
Other operations UPM Biofuels | Collaboration for the development of new applications for renewable plastics based on UPM BioVerno naphtha continued. Piloting, research and process development continued to take place at the UPM Biorefinery Development Centre (BrDC) and with external partners. UPM also studied and tested the use of several new innovative feedstocks that meet sustainability criteria, such as wood residues and feedstocks from carbon farming for our possible growth plans. |
UPM FINANCIAL REPORT 2023 | 38 |
2023 | 2022 | 2021 | 2020 | 2019 | |
Number of shares 1 January | 533,735,699 | 533,735,699 | 533,735,699 | 533,735,699 | 533,735,699 |
Number of shares at 31 December | 533,735,699 | 533,735,699 | 533,735,699 | 533,735,699 | 533,735,699 |
NUMBER OF SHARES | HOLDING % | |
Ilmarinen Mutual Pension Insurance Company | 8,958,528 | 1.68 |
Varma Mutual Pension Insurance Company | 8,599,564 | 1.61 |
ELO Mutual Pension Insurance Company | 4,892,000 | 0.92 |
The State Pension Fund | 2,900,000 | 0.54 |
The Society of Swedish Literature in Finland | 2,621,521 | 0.49 |
Holding Manutas Oy | 2,500,000 | 0.47 |
Security Trading Oy | 1,860,000 | 0.35 |
Kymin Osakeyhtiön 100-vuotissäätiö | 1,696,360 | 0.32 |
Nordea Pro Finland Fund | 1,478,991 | 0.28 |
Samfundet Folkhälsan i Svenska Finland | 1,454,890 | 0.27 |
Nominee registered | 360,763,557 | 67.59 |
Others | 136,010,288 | 25.48 |
Total | 533,735,699 | 100.00 |
UPM FINANCIAL REPORT 2023 | 39 |
2023 | 2022 | 2021 | 2020 | 2019 | |
Companies | 2.6 | 2.6 | 2.9 | 2.7 | 2.3 |
Financial institutions and insurance companies | 3.8 | 3.6 | 3.7 | 3.8 | 3.0 |
Public bodies | 5.3 | 5.3 | 5.8 | 6.0 | 5.7 |
Non-profit organisations | 4.4 | 4.5 | 4.6 | 4.7 | 4.6 |
Households | 16.4 | 16.0 | 15.8 | 15.6 | 15.2 |
Non-Finnish nationals | 67.6 | 68.1 | 67.2 | 67.1 | 69.1 |
Total | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 |
SIZE OF SHAREHOLDINGS | NUMBER OF SHARE- HOLDERS | % OF SHARE- HOLDERS | NUMBER OF SHARES, MILLION | % OF SHARES |
1 – 100 | 61,123 | 43.43 | 2.6 | 0.5 |
101 – 1,000 | 61,382 | 43.62 | 23.1 | 4.3 |
1,001 – 10,000 | 16,854 | 11.98 | 44.7 | 8.4 |
10,001 – 100,000 | 1,248 | 0.89 | 30.0 | 5.6 |
100,001 – | 121 | 0.09 | 74.8 | 14.0 |
Total | 140,728 | 100.00 | 175.2 | 32.8 |
Nominee-registered | 358.5 | 67.2 | ||
Not registered as book entry units | — | 0.0 | ||
Total | 533.7 | 100.0 |
UPM FINANCIAL REPORT 2023 | 40 |
2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | |
Earnings per share (EPS), EUR | 0.73 | 2.86 | 2.41 | 1.05 | 1.99 | 2.80 | 1.82 | 1.65 | 1.72 | 0.96 |
Comparable EPS, EUR | 1.40 | 3.09 | 2.22 | 1.37 | 2.07 | 2.24 | 1.88 | 1.65 | 1.38 | 1.20 |
Equity per share, EUR | 20.93 | 23.44 | 20.34 | 17.53 | 18.87 | 18.36 | 16.24 | 15.43 | 14.89 | 14.02 |
Dividend per share, EUR 1) | 1.50 | 1.50 | 1.30 | 1.30 | 1.30 | 1.30 | 1.15 | 0.95 | 0.75 | 0.70 |
Dividend to earnings ratio, % | 206.2 | 52.4 | 53.9 | 123.7 | 65.4 | 46.4 | 63.0 | 57.6 | 43.6 | 72.9 |
Dividend to operating cash flow, % | 35 | 158 | 55 | 69 | 38 | 52 | 42 | 30 | 34 | 30 |
Dividend to comparable EPS, % | 107 | 49 | 59 | 95 | 63 | 58 | 61 | 58 | 54 | 58 |
Effective dividend yield, % | 4.4 | 4.3 | 3.9 | 4.3 | 4.2 | 5.9 | 4.4 | 4.1 | 4.4 | 5.1 |
P/E ratio | 46.8 | 12.2 | 13.9 | 29.0 | 15.5 | 7.9 | 14.2 | 14.1 | 10.0 | 14.2 |
Operating cash flow per share, EUR | 4.25 | 0.95 | 2.34 | 1.89 | 3.46 | 2.49 | 2.74 | 3.16 | 2.22 | 2.33 |
Dividend distribution, EURm 1) | 800 | 800 | 693 | 693 | 693 | 693 | 613 | 507 | 400 | 373 |
Share price at 31 Dec., EUR | 34.06 | 34.93 | 33.46 | 30.47 | 30.91 | 22.15 | 25.91 | 23.34 | 17.23 | 13.62 |
Lowest quotation, EUR | 26.62 | 24.85 | 29.11 | 20.31 | 21.10 | 21.69 | 20.82 | 13.71 | 13.19 | 10.07 |
Highest quotation, EUR | 35.99 | 37.14 | 35.37 | 31.50 | 31.49 | 34.70 | 26.69 | 23.41 | 19.26 | 13.99 |
Average quotation for the period, EUR | 31.33 | 32.50 | 32.15 | 26.09 | 25.73 | 28.86 | 23.89 | 17.51 | 16.37 | 12.26 |
Market capitalisation, EURm | 18,165 | 18,629 | 17,845 | 16,250 | 16,485 | 11,813 | 13,818 | 12,452 | 9,192 | 7,266 |
Shares traded, EURm 2) | 8,752 | 9,680 | 8,435 | 9,921 | 9,695 | 9,980 | 8,460 | 6,749 | 7,469 | 6,233 |
Shares traded (1,000) | 279,371 | 297,879 | 262,377 | 380,237 | 376,801 | 345,822 | 354,053 | 385,355 | 456,168 | 508,318 |
Shares traded, % of all shares | 52.4 | 55.9 | 49.2 | 71.3 | 70.7 | 64.8 | 66.4 | 72.2 | 85.5 | 95.6 |
Number of shares, average (1,000) | 533,324 | 533,324 | 533,324 | 533,324 | 533,324 | 533,324 | 533,415 | 533,505 | 533,505 | 531,574 |
Number of shares at the end of period (1,000) | 533,736 | 533,736 | 533,736 | 533,736 | 533,736 | 533,736 | 533,736 | 533,736 | 533,736 | 533,736 |
of which treasury shares (1,000) | 412 | 412 | 412 | 412 | 412 | 412 | 412 | 231 | 231 | 231 |
SHARE RELATED INDICATORS | DEFINITION |
Earnings per share (EPS), EUR | Profit for the period attributable to owners of the parent company divided by adjusted average number of shares during the period excluding treasury shares. |
Comparable EPS, EUR | Earnings per share calculated in accordance with IFRS excluding items affecting comparability and their tax impact. |
Equity per share, EUR | Equity attributable to the owners of the parent company in relation to the adjusted number of shares at the end of period. |
Dividend per share, EUR | Dividend distribution divided by adjusted number of shares at the end of period. |
Dividend to earnings ratio, % | Dividend per share as a percentage of earnings per share. |
Dividend to operating cash flow, % | Dividend per share as a percentage of operating cash flow per share. |
Dividend to comparable EPS, % | Dividend per share as a percentage of comparable earnings per share |
Effective dividend yield, % | Adjusted dividend per share as a percentage of adjusted share price at 31.12. |
P/E ratio | Adjusted share price in relation to the earnings per share. |
Operating cash flow per share, EUR | Operating cash flow divided by adjusted average number of shares during the period excluding treasury shares. |
Market capitalisation, EURm | Total number of shares (excluding those held as treasury shares) multiplied by the share price at the end of period. |
Adjusted share price at the end of period | Share price at the end of period in relation to share issue coefficient. |
Adjusted average share price | Total value of shares traded in relation to adjusted number of shares traded during the period. |
UPM FINANCIAL REPORT 2023 | 41 |
Henrik Ehrnrooth Chair | Kim Wahl | Pia Aaltonen-Forsell |
Emma FitzGerald | Jari Gustafsson | Piia-Noora Kauppi |
Topi Manner | Marjan Oudeman | Martin à Porta |
Massimo Reynaudo President and CEO |
UPM FINANCIAL REPORT 2023 | 42 |
1.1 Corporate information | 5.1 Capital management | |||
1.2 Basis of preparation | 5.2 Net debt | |||
1.3 Consolidation principles | 5.3 Financial assets and liabilities by category | |||
1.4 Foreign currency translation | 5.4 Financial income and expenses | |||
1.5 Changes in accounting policies | 5.5 Share capital and reserves | |||
2.1 Business areas | 6.1 Financial risk management | |||
2.2 Sales | 6.2 Derivatives and hedge accounting | |||
2.4 Earnings per share and dividend | ||||
7.1 Tax on profit for the year | ||||
7.2 Deferred tax | ||||
3.1 Employee costs | ||||
3.2 Key management personnel | ||||
3.3 Share-based payments | 8.1 Business acquisitions and disposals | |||
3.4 Retirement benefit obligations | 8.2 Principal subsidiaries and joint operations | |||
8.3 Related party transactions | ||||
8.4 Assets held for sale | ||||
4.1 Property, plant and equipment | ||||
4.2 Forest assets | ||||
4.3 Energy shareholdings | 9.1 Commitments and contingencies | |||
4.4 Goodwill and other intangible assets | 9.2 Litigation | |||
4.5 Provisions | 9.3 Events after balance sheet date | |||
4.6 Working capital | ||||
Parent company accounts |
UPM FINANCIAL REPORT 2023 | 43 |
EURm | NOTE | 2023 | 2022 |
Sales | 2.1, 2.2 | ||
Other operating income | 2.3 | ||
Costs and expenses | 2.3 | - | - |
Change in fair value of forest assets and wood harvested | 4.2 | - | |
Share of results of associated companies and joint ventures | - | ||
Depreciation, amortisation and impairment charges | 2.3, 4.1, 4.4 | - | - |
Operating profit | |||
Exchange rate and fair value gains and losses | 5.4 | - | |
Interest and other finance costs, net | 5.4 | - | - |
Profit before tax | |||
Income taxes | 7.1 | - | - |
Profit for the period | |||
Attributable to: | |||
Owners of the parent company | |||
Non-controlling interests | 8.1 | ||
Earnings per share for profit attributable to owners of the parent company | |||
Basic earnings per share, EUR | 2.4 | ||
Diluted earnings per share, EUR | 2.4 |
EURm | NOTE | 2023 | 2022 |
Profit for the period | |||
Other comprehensive income for the period, net of tax | |||
Items that will not be reclassified to income statement: | |||
Actuarial gains and losses on defined benefit plans | - | ||
Changes in fair value of energy shareholdings | - | ||
Items that may be reclassified subsequently to income statement: | |||
Translation differences | - | ||
Net investment hedge | - | ||
Cash flow hedges | - | ||
Other comprehensive income for the period, net of tax | 7.2 | - | |
Total comprehensive income for the period | - | ||
Attributable to: | |||
Owners of the parent company | - | ||
Non-controlling interests | - | ||
- |
UPM FINANCIAL REPORT 2023 | 44 |
EURm | NOTE | 2023 | 2022 |
ASSETS | |||
Goodwill | 4.4 | ||
Other intangible assets | 4.4 | ||
Property, plant and equipment | 4.1 | ||
Leased assets | 5.2 | ||
Forest assets | 4.2 | ||
Energy shareholdings | 4.3 | ||
Other non-current financial assets | 5.3 | ||
Deferred tax assets | 7.2 | ||
Net retirement benefit assets | 3.4 | ||
Investments in associates and joint ventures | |||
Other non-current assets | |||
Non-current assets | |||
Inventories | 4.6 | ||
Trade and other receivables | 4.6, 5.3 | ||
Other current financial assets | 5.3 | ||
Income tax receivables | |||
Cash and cash equivalents | 5.1, 5.3 | ||
Current assets | |||
Assets classified as held for sale | 8.4 | ||
Assets | |||
EURm | NOTE | 2023 | 2022 |
EQUITY AND LIABILITIES | |||
Share capital | 5.5 | ||
Treasury shares | - | - | |
Translation reserve | |||
Other reserves | 5.5 | ||
Reserve for invested non-restricted equity | 5.5 | ||
Retained earnings | |||
Equity attributable to owners of the parent company | |||
Non-controlling interests | 8.1 | ||
Equity | |||
Deferred tax liabilities | 7.2 | ||
Net retirement benefit liabilities | 3.4 | ||
Provisions | 4.5 | ||
Non-current debt | 5.2, 5.3 | ||
Other non-current financial liabilities | 5.3 | ||
Non-current liabilities | |||
Current debt | 5.2, 5.3 | ||
Trade and other payables | 4.6, 5.3 | ||
Provisions | 4.5 | ||
Other current financial liabilities | 5.3 | ||
Income tax payables | |||
Current liabilities | |||
Liabilities related to assets classified as held for sale | 8.4 | ||
Liabilities | |||
Equity and liabilities |
UPM FINANCIAL REPORT 2023 | 45 |
EURm | SHARE CAPITAL | TREASURY SHARES | TRANS- LATION RESERVE | OTHER RESERVES | RESERVE FOR INVESTED NON- RESTRICTED EQUITY | RETAINED EARNINGS | EQUITY ATTRIBU- TABLE TO OWNERS OF THE PARENT COMPANY | NON- CONTROLLING INTERESTS | TOTAL EQUITY |
Value at 1 January 2023 | - | ||||||||
Profit for the period | — | — | — | — | — | ||||
Translation differences | — | — | - | — | — | — | - | - | - |
Cash flow hedges - reclassified to income statement, net of tax | — | — | — | — | — | — | |||
Cash flow hedges - reclassified to PPE, net of tax | — | — | — | — | — | ||||
Cash flow hedges - change in fair value, net of tax | — | — | — | — | — | ||||
Net investment hedge, net of tax | — | — | — | — | — | — | |||
Energy shareholdings - changes in fair value, net of tax | — | — | — | - | — | - | - | — | - |
Actuarial gains and losses on defined benefit plans, net of tax | — | — | — | — | — | - | - | — | - |
— | — | - | - | — | - | - | - | ||
Share-based payments, net of tax | — | — | — | — | - | - | — | - | |
Dividend distribution | — | — | — | — | — | - | - | - | - |
Other items | — | — | — | — | — | ||||
Contributions by non-controlling interests | — | — | — | — | — | — | — | ||
— | — | — | — | - | - | - | |||
- | |||||||||
Value at 1 January 2022 | - | ||||||||
Profit for the period | — | — | — | — | — | ||||
Translation differences | — | — | — | — | — | ||||
Cash flow hedges - reclassified to income statement, net of tax | — | — | — | — | — | — | |||
Cash flow hedges - reclassified to PPE, net of tax | — | — | — | — | — | ||||
Cash flow hedges - change in fair value, net of tax | — | — | — | - | — | — | - | - | - |
Net investment hedge, net of tax | — | — | - | — | — | — | - | — | - |
Energy shareholdings - changes in fair value, net of tax | — | — | — | — | — | ||||
Actuarial gains and losses on defined benefit plans, net of tax | — | — | — | — | — | — | |||
— | — | — | |||||||
Share-based payments, net of tax | — | — | — | — | - | - | — | - | |
Dividend distribution | — | — | — | — | — | - | - | - | - |
Other items | — | — | — | — | — | - | - | - | |
Contributions by non-controlling interests | — | — | — | — | — | — | — | ||
— | — | — | — | - | - | - | |||
- |
UPM FINANCIAL REPORT 2023 | 46 |
EURm | 2023 | 2022 |
Cash flows from operating activities | ||
Profit for the period | ||
Adjustments 1) | ||
Interest received | ||
Interest paid | - | - |
Dividends received | ||
Other financial items, net | - | - |
Income taxes paid 4) | - | - |
Change in working capital 3) | - | |
Operating cash flow | ||
Cash flows from investing activities | ||
Capital expenditure | - | - |
Additions to forest assets | - | - |
Acquisition of businesses and subsidiaries, net of cash acquired | - | - |
Proceeds from sale of property, plant and equipment and intangible assets, net of tax 4) | ||
Proceeds from sale of forest assets, net of tax 4) | ||
Proceeds from disposal of businesses and subsidiaries and advances received | ||
Proceeds from disposal of shares in associates and joint ventures | ||
Proceeds from disposal of energy shareholdings | ||
Net cash flows from net investment hedges | - | |
Change in other non-current assets | - | |
Investing cash flow | - | - |
Cash flows from financing activities | ||
Proceeds from non-current debt | ||
Payments of non-current debt | - | - |
Lease repayments | - | - |
Change in current liabilities | - | |
Net cash flows from derivatives | ||
Dividends paid to owners of the parent company | - | - |
Dividends paid to non-controlling interests | - | - |
Contributions paid by non-controlling interests | ||
Change in investment funds | ||
Other financing cash flow | - | - |
Financing cash flow | - | |
Change in cash and cash equivalents | - | |
Cash and cash equivalents at the beginning of the period | ||
Exchange rate effect on cash and cash equivalents | - | - |
Change in cash and cash equivalents | - | |
Cash and cash equivalents classified as held for sale (Note 8.4) | - | |
Cash and cash equivalents at the end of the period |
UPM FINANCIAL REPORT 2023 | 47 |
EURm | 2023 | 2022 |
Change in fair value of forest assets and wood harvested | - | |
Share of results of associated companies and joint ventures | - | |
Depreciation, amortisation and impairment charges | ||
Capital gains and losses on sale of non-current assets | - | - |
Financial income and expenses | ||
Income taxes | ||
Utilised provisions | - | - |
Non-cash changes in provisions | ||
Other adjustments 2) | - | |
Total |
EURm | 2023 | 2022 |
Inventories | - | |
Receivables included in working capital | - | |
Liabilities included in working capital | - | |
Total | - |
UPM FINANCIAL REPORT 2023 | 48 |
Accounting policies |
Key estimates and judgements |
KEY ESTIMATES AND JUDGEMENTS | NOTE |
Valuation of forest assets | 4.2 Forest assets |
Fair value determination of energy shareholdings | 4.3 Energy shareholdings |
Impairment of property, plant and equipment | 4.1 Property, plant and equipment |
Impairment of goodwill and other intangible assets | 4.4 Goodwill and other intangible assets |
Pension and other post-employment benefits | 3.4 Retirement benefit obligations |
Income taxes | 7. Income tax |
Environmental provisions | 4.5 Provisions |
Legal contingencies | 9.2 Litigation |
UPM FINANCIAL REPORT 2023 | 49 |
Financial risks |
FINANCIAL RISK | NOTE |
Credit risk | 4.6 Working capital |
Liquidity and refinancing risk | 5.1 Capital management |
Interest rate risk | 6.1 Financial risk management |
Foreign exchange risk | 6.1 Financial risk management |
Electricity price risk | 6.1 Financial risk management |
Financial counterparty risk | 6.2 Derivatives and hedge accounting |
UPM FINANCIAL REPORT 2023 | 50 |
2022 | As published | Restated |
Deferred tax liabilities | 636 | 636 |
Net retirement benefit liabilities | 527 | 527 |
Provisions | 134 | 64 |
Non-current debt | 4,476 | 4,476 |
Other non-current financial liabilities | 103 | 103 |
Non-current liabilities | 5,876 | 5,807 |
Current debt | 558 | 558 |
Trade and other liabilities | 2,720 | 2,720 |
Provisions | — | 70 |
Other current financial liabilities | 102 | 102 |
Income tax payables | 73 | 73 |
Current liabilities | 3,452 | 3,522 |
Liabilities | 9,329 | 9,329 |
UPM FINANCIAL REPORT 2023 | 51 |
Sales | Comparable EBIT | Comparable ROE | |||||||||
EUR | 10,460 | m | EUR | 1,013 | m | 6.2 | % | ||||
(EUR 11,720m) | (EUR 2,096m) | (14.0%) |
Accounting policies |
UPM FINANCIAL REPORT 2023 | 52 |
BUSINESS AREA | DESCRIPTION AND PRODUCTS |
UPM Fibres | |
UPM Energy | UPM Energy generates cost-competitive, zero-carbon electricity. Operations also include physical electricity and financial portfolio management as well as services to industrial electricity consumers and producers. |
UPM Raflatac | UPM Raflatac offers innovative and sustainable self-adhesive label materials for branding and promotion, information and functional labelling in the food, beverage, personal care, pharmaceutical and logistics segments, for example. |
UPM Specialty Papers | UPM Specialty Papers offers labelling and packaging materials as well as office and graphic papers for labelling, commercial siliconising, packaging, office use and printing. |
UPM Communication Papers | UPM Communication Papers offers an extensive product range of sustainably produced graphic papers for advertising and publishing as well as home and office uses. |
UPM Plywood | UPM Plywood offers high quality WISA® plywood and veneer products for construction, vehicle flooring, LNG shipbuilding, parquet manufacturing and other industrial applications. |
Other operations | Other operations include UPM Forest, UPM Biofuels, UPM Biochemicals-, UPM Biomedicals-, UPM Biocomposites- business units and group services. UPM Forest secures competitive wood and biomass for UPM businesses and manages UPM-owned and privately-owned forests in North Europe. In addition, UPM offers forestry services to forest owners and forest investors. UPM Biofuels produces wood-based renewable diesel for all diesel engines and renewable naphtha that can be used as a biocomponent for gasoline or for replacing fossil raw materials in the petrochemical industry. UPM Biochemicals offers innovative wood-based biochemicals for replacing fossil-based raw materials in various applications such as textiles, PET bottles, packaging, cosmetics, pharmaceuticals, detergents, rubbers and resins. UPM Biomedicals is the forerunner in producing nanofibrillar cellulose for clinical and life science applications in the field of drug screening, personalised medicine, advanced cell therapies, 3D bioprinting, tissue engineering and wound care. UPM Biocomposites is a pioneer in circular economy offering composite decking materials based on both recycled consumer and industrial waste. The product range also includes composite materials made from renewable fibres and polymers to replace fossil-based plastics. |
UPM FINANCIAL REPORT 2023 | 53 |
EURm, OR AS INDICATED | UPM FIBRES | UPM ENERGY | UPM RAFLATAC | UPM SPECIALTY PAPERS | UPM COM PAPERS | UPM PLYWOOD | OTHER OPE- RATIONS | ELIMINATI- ONS AND RECONCILI -ATIONS 2) | GROUP |
External sales | 2,452 | 486 | 1,485 | 1,300 | 3,570 | 402 | 768 | -3 | 10,460 |
Internal sales | 592 | 141 | — | 185 | 28 | 20 | 34 | -1,000 | — |
Total sales | 3,044 | 628 | 1,485 | 1,485 | 3,598 | 422 | 802 | -1,003 | 10,460 |
Comparable EBIT | 116 | 182 | 103 | 98 | 462 | 56 | -14 | 8 | 1,013 |
Items affecting comparability in operating profit | — | — | -22 | — | -288 | -6 | -87 | -2 | -405 |
Operating profit | 116 | 182 | 81 | 98 | 174 | 50 | -101 | 6 | 608 |
Finance costs, net | -144 | ||||||||
Income taxes | -71 | ||||||||
Profit for the period | 394 | ||||||||
Operating assets 1) | 7,314 | 2,624 | 831 | 1,022 | 1,619 | 276 | 3,374 | -411 | 16,648 |
Deferred tax assets | 431 | ||||||||
Other non-operating assets | 62 | ||||||||
Other financial assets | 1,332 | ||||||||
Total assets | 18,473 | ||||||||
Operating liabilities 1) | 419 | 116 | 144 | 219 | 377 | 29 | 431 | -408 | 1,328 |
Deferred tax liabilities | 616 | ||||||||
Other liabilities | 832 | ||||||||
Other financial liabilities | 4,166 | ||||||||
Total liabilities | 6,942 | ||||||||
Other items | |||||||||
Change in fair value of forest assets and wood harvested | -20 | — | — | — | — | — | -82 | — | -103 |
Share of results of associates and joint ventures | 2 | — | — | — | -1 | — | -2 | — | -1 |
Depreciation and amortisation | -270 | -7 | -43 | -74 | -78 | -21 | -44 | — | -538 |
Impairment charges | -2 | — | -4 | — | -117 | — | — | — | -123 |
Capital employed, 31 December | 6,895 | 2,508 | 687 | 803 | 1,242 | 246 | 2,943 | -408 | 14,916 |
Average capital employed | 6,839 | 3,042 | 737 | 875 | 1,424 | 254 | 2,922 | 321 | 16,414 |
Capital expenditure | 616 | 3 | 26 | 23 | 50 | 15 | 388 | — | 1,122 |
Capital expenditure, excluding acquisitions and shares | 616 | 3 | 26 | 23 | 50 | 15 | 361 | — | 1,094 |
Comparable ROCE, % | 1.7 | 6.0 | 14.0 | 11.2 | 32.4 | 22.2 | -0.5 | — | 6.4 |
Personnel, 31 December | 2,775 | 81 | 3,100 | 1,963 | 6,005 | 1,634 | 1,015 | — | 16,573 |
UPM FINANCIAL REPORT 2023 | 54 |
EURm, OR AS INDICATED | UPM FIBRES | UPM ENERGY | UPM RAFLATAC | UPM SPECIALTY PAPERS | UPM COM PAPERS | UPM PLYWOOD | OTHER OPE- RATIONS 3) | ELIMINATI- ONS AND RECONCILI -ATIONS 2) | GROUP |
External sales | 2,052 | 343 | 1,981 | 1,423 | 4,792 | 518 | 608 | 2 | 11,720 |
Internal sales | 652 | 390 | — | 254 | 73 | 21 | 26 | -1,416 | — |
Total sales | 2,704 | 734 | 1,982 | 1,677 | 4,866 | 539 | 634 | -1,415 | 11,720 |
Comparable EBIT | 570 | 381 | 214 | 153 | 619 | 109 | 81 | -31 | 2,096 |
Items affecting comparability in operating profit | -53 | — | -11 | — | 12 | -65 | -16 | 13 | -122 |
Operating profit | 517 | 381 | 203 | 153 | 631 | 44 | 64 | -18 | 1,974 |
Finance costs, net | -30 | ||||||||
Income taxes | -388 | ||||||||
Profit for the period | 1,556 | ||||||||
Operating assets 1) | 6,888 | 4,068 | 995 | 1,316 | 2,245 | 297 | 3,153 | -657 | 18,304 |
Deferred tax assets | 485 | ||||||||
Other non-operating assets | 82 | ||||||||
Other financial assets | 3,336 | ||||||||
Total assets | 22,207 | ||||||||
Operating liabilities 1) | 510 | 240 | 201 | 379 | 649 | 47 | 448 | -596 | 1,878 |
Deferred tax liabilities | 636 | ||||||||
Other liabilities | 733 | ||||||||
Other financial liabilities | 6,081 | ||||||||
Total liabilities | 9,329 | ||||||||
Other items | |||||||||
Change in fair value of forest assets and wood harvested | 11 | — | — | — | — | — | 2 | — | 12 |
Share of results of associates and joint ventures | 3 | — | — | — | 3 | — | -2 | — | 4 |
Depreciation and amortisation | -187 | -7 | -37 | -77 | -81 | -23 | -45 | — | -457 |
Impairment charges | — | — | -4 | — | 1 | -43 | -19 | — | -65 |
Capital employed, 31 December | 6,378 | 3,827 | 793 | 937 | 1,596 | 250 | 2,705 | 1,426 | 17,913 |
Average capital employed | 5,867 | 3,286 | 681 | 889 | 1,506 | 247 | 2,577 | 784 | 15,836 |
Capital expenditure | 1,005 | 8 | 175 | 18 | 57 | 9 | 283 | 1 | 1,555 |
Capital expenditure, excluding acquisitions and shares | 1,005 | 8 | 18 | 18 | 57 | 9 | 283 | 1 | 1,399 |
Comparable ROCE, % | 9.7 | 11.6 | 31.5 | 17.2 | 41.1 | 44.3 | 3.1 | — | 13.6 |
Personnel, 31 December | 2,688 | 79 | 3,319 | 1,959 | 6,289 | 1,982 | 921 | — | 17,236 |
UPM FINANCIAL REPORT 2023 | 55 |
EURm | 2023 | 2022 |
In operating profit | ||
Impairment charges | -117 | -80 |
Restructuring charges | -199 | -15 |
Change in fair value of unrealised cash flow and commodity hedges | -2 | 13 |
Capital gains and losses on sale of non-current assets | — | 34 |
Fair value changes of forest assets | -86 | — |
Other items | — | -74 |
Total | -405 | -122 |
In finance costs | -65 | — |
Total in profit before tax | -470 | -122 |
In income taxes | ||
Taxes related to items affecting comparability | 107 | 9 |
Tax provisions | 2 | -10 |
Total | 109 | -1 |
Total in profit for the period | -361 | -122 |
Accounting policies |
Assets | Capital expenditure | |||
EURm | 2023 | 2022 | 2023 | 2022 |
Finland | 8,633 | 12,478 | 153 | 82 |
Germany | 2,139 | 1,946 | 358 | 468 |
Uruguay | 5,817 | 5,364 | 581 | 980 |
China | 572 | 680 | 4 | 4 |
United States | 463 | 660 | 12 | 9 |
United Kingdom | 103 | 108 | 4 | 1 |
Austria | 106 | 96 | — | 1 |
Russia | — | 31 | — | — |
Poland | 145 | 179 | 4 | 6 |
Estonia | 47 | 55 | 1 | 2 |
France | 27 | 37 | 2 | 1 |
Other EU countries | 54 | 65 | — | — |
Other European countries | 32 | 40 | — | — |
Rest of world | 335 | 467 | 1 | 2 |
Total | 18,473 | 22,207 | 1,122 | 1,555 |
EURm | 2023 | 2022 |
Finland | 1,267 | 973 |
Germany | 1,469 | 2,032 |
United States | 1,366 | 1,623 |
United Kingdom | 548 | 676 |
China | 1,533 | 1,165 |
France | 435 | 501 |
Uruguay | 66 | 56 |
Poland | 301 | 402 |
Austria | 160 | 194 |
Russia | 0 | 37 |
Other EU countries | 1,594 | 2,033 |
Other European countries | 306 | 388 |
Rest of world | 1,415 | 1,639 |
Total | 10,460 | 11,720 |
UPM FINANCIAL REPORT 2023 | 56 |
EURm | 2023 | 2022 | CHANGE % |
UPM Fibres | 3,044 | 2,704 | 13 % |
UPM Energy | 628 | 734 | -14 % |
UPM Raflatac | 1,485 | 1,982 | -25 % |
UPM Specialty Papers | 1,485 | 1,677 | -11 % |
UPM Communication Papers | 3,598 | 4,866 | -26 % |
UPM Plywood | 422 | 539 | -22 % |
Other operations | 802 | 634 | 26 % |
Eliminations | -1,003 | -1,415 | — |
Total | 10,460 | 11,720 | -11 % |
BUSINESS AREA | BUSINESS | 2023 | 2022 |
EUR million | |||
UPM Fibres | UPM Pulp, UPM Timber | 2,452 | 2,052 |
UPM Energy | UPM Energy | 486 | 343 |
UPM Raflatac | UPM Raflatac | 1,485 | 1,981 |
UPM Specialty Papers | UPM Specialty Papers | 1,300 | 1,423 |
UPM Communication Papers | UPM Communication Papers | 3,570 | 4,792 |
UPM Plywood | UPM Plywood | 402 | 518 |
Other operations | UPM Forest, UPM Biofuels, UPM Biochemicals, UPM Biomedicals, UPM Biocomposites | 768 | 608 |
Eliminations and reconciliations | -3 | 2 | |
Total | 10,460 | 11,720 |
BUSINESS | PRODUCT RANGE |
UPM Pulp | Softwood, birch and eucalyptus pulp |
UPM Timber | Standard and special sawn timber |
UPM Energy | Electricity and related services |
UPM Raflatac | Self-adhesive paper and film label stock |
UPM Specialty Papers | Labelling materials, release base papers, flexible packaging materials, office papers, graphic papers |
UPM Communication Papers | Graphic papers for various end uses |
UPM Plywood | Plywood and veneer products |
UPM Forest | Wood and wood-based biomass (logs, pulpwood, chips, forest residues etc.), full forestry service offering |
UPM Biofuels | Wood-based renewable diesel for transport and renewable naphtha for transport and petrochemicals |
UPM Biochemicals | Lignin products for industrial use |
UPM Biomedicals | Wood-based products for biomedical applications |
UPM Biocomposites | UPM ProFi decking products and UPM Formi granules |
UPM FINANCIAL REPORT 2023 | 57 |
EURm | 2023 | 2022 |
Papers in UPM Communication Papers | 340 | 464 |
Fine and specialty papers in UPM Specialty Papers | 128 | 139 |
Label materials in UPM Raflatac | 148 | 198 |
Plywood | 39 | 51 |
Sawn timber | 35 | 48 |
Chemical pulp (net effect) | 126 | 46 |
Accounting policies |
EURm | 2023 | 2022 |
Costs and expenses | ||
Raw materials, consumables and goods | 6,000 | 6,260 |
Employee costs 1) | 1,287 | 1,181 |
Other operating costs and expenses 2) | 1,143 | 1,028 |
Delivery costs and other external charges | 886 | 1,001 |
Total | 9,316 | 9,470 |
EURm | 2023 | 2022 |
Rents and lease expenses | 23 | 29 |
Emission expenses 1) | 18 | 70 |
Losses on sale of non-current assets | 6 | 1 |
Credit losses | 4 | 9 |
Maintenance and other operating expenses 2) | 1,092 | 919 |
Total | 1,143 | 1,028 |
UPM FINANCIAL REPORT 2023 | 58 |
EURm | 2023 | 2022 |
Audit fee | 4.4 | 4.0 |
Audit related services | 0.2 | 0.2 |
Tax services | 0.3 | 0.3 |
Other services | 0.1 | 0.1 |
Total | 5.0 | 4.6 |
EURm | 2023 | 2022 |
Gains on sale of non-current assets | 8 | 37 |
Rental income | 10 | 12 |
Emission rights received | 154 | 208 |
Derivatives, non-qualifying hedges | 4 | 3 |
Exchange rate gains and losses | -35 | -47 |
Other | 88 | 17 |
Total | 228 | 231 |
EURm | 2023 | 2022 |
Carrying value, at 1 January | 235 | 104 |
Emission rights received and purchased | 159 | 231 |
Deliveries and disposals | -134 | -100 |
Impairment | -3 | — |
Reclassifications to assets held for sale | -1 | — |
Carrying value, at 31 December | 256 | 235 |
Accumulated costs | 260 | 236 |
Accumulated impairments | -4 | -1 |
Carrying value, at 31 December | 256 | 235 |
Accounting policies |
UPM FINANCIAL REPORT 2023 | 59 |
EURm | 2023 | 2022 |
Profit attributable to owners of the parent company, EURm | 388 | 1,526 |
Weighted average no. of shares (1,000) | 533,324 | 533,324 |
Basic earnings per share, EUR | 0.73 | 2.86 |
Diluted earnings per share, EUR | 0.73 | 2.86 |
Accounting policies |
UPM FINANCIAL REPORT 2023 | 60 |
EURm | 2023 | 2022 |
Salaries and fees | 1,039 | 901 |
Share-based payments | 15 | 16 |
Pension and other post-employment benefits, defined benefit plans 1) | 21 | 77 |
Pension costs, defined contribution plans | 101 | 93 |
Other indirect employee costs 2) | 111 | 94 |
Total | 1,287 | 1,181 |
Shareholdings 31 December | Annual base fee (EUR 1,000) | |||||
2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |
Board members | ||||||
Henrik Ehrnrooth, Chair 1) | 17,488 | 14,461 | 218 | 140 | 20 | 10 |
Kim Wahl, Deputy Chair 2) | 27,962 | 25,949 | 145 | 115 | 35 | 35 |
Pia Aaltonen-Forsell 3) | 1,666 | — | 120 | — | 15 | — |
Emma FitzGerald | 3,097 | 4,644 | 120 | 115 | 10 | 10 |
Jari Gustafsson | 4,502 | 2,836 | 120 | 115 | 10 | 15 |
Piia-Noora Kauppi | 25,701 | 24,035 | 120 | 115 | 10 | 10 |
Topi Manner | 3,097 | 1,431 | 120 | 115 | 10 | 10 |
Marjan Oudeman | 11,260 | 9,594 | 120 | 115 | 15 | 15 |
Martin à Porta | 26,510 | 24,844 | 120 | 115 | 28 | 28 |
Björn Wahlroos, Chair 4) | — | 273,189 | — | 200 | — | 20 |
Total | 121,283 | 380,983 | 1,203 | 1,145 | 153 | 153 |
UPM FINANCIAL REPORT 2023 | 61 |
President and CEO Jussi Pesonen | Other members of Group Executive Team1) | |||
EUR 1,000 | 2023 | 2022 | 2023 | 2022 |
Salaries | 1,161 | 1,153 | 3,950 | 4,140 |
Short-term incentives | 1,473 | 1,309 | 2,973 | 2,739 |
Share rewards | 2,902 | 2,997 | 9,242 | 9,347 |
Benefits | 24 | 28 | 139 | 135 |
Total | 5,561 | 5,486 | 16,304 | 16,361 |
UPM FINANCIAL REPORT 2023 | 62 |
PERFORMANCE SHARE PLANS | PSP 2020-2022 | PSP 2021-2023 | PSP 2022-2024 | PSP 2023-2025 |
No. of participants at 31 December 2023 | 25 | 22 | 24 | 24 |
Actual achievement | 100% | 34.62% | — | — |
Max no. of shares to be delivered 1) | ||||
to the President and CEO Jussi Pesonen | 85,589 | 28,829 | 80,870 | 75,802 |
to other members of GET | 272,500 | 89,562 | 279,000 | 265,000 |
to other selected members of management | 160,200 | 42,272 | 138,500 | 125,500 |
Total max no. of shares to be delivered | 518,289 | 160,663 | 498,370 | 466,302 |
Share delivery (year) | 2023 | 2024 | 2025 | 2026 |
Earning criteria (weighting) | Total shareholder return (100%) | Total shareholder return (100%) | Total shareholder return (80%) ESG (20%) 2) | Total shareholder return (80%) ESG (20%) 3) |
DEFERRED BONUS PLANS | DBP 2020 | DBP 2021 | DBP 2022 | DBP 2023 |
No. of participants (at grant) | 393 | 428 | 451 | 446 |
No. of participants (at 31 December 2023) | 330 | 350 | 398 | 431 |
Max no. of shares to be delivered (at grant) | 429,558 | 459,912 | 487,130 | 477,052 |
Estimated no. of shares to be delivered at 31 December 2023 1) | 141,642 | 355,032 | 388,173 | 48,806 |
Share delivery (year) | 2023 | 2024 | 2025 | 2026 |
Earning criteria | Group/Business Area EBITDA | Group/Business Area EBITDA | Group/Business Area EBITDA | Group/Business Area EBITDA |
Accounting policies |
UPM FINANCIAL REPORT 2023 | 63 |
2023 | 2022 | |||||||||
EURm | FINLAND | UK | GERMANY | OTHER COUN- TRIES | TOTAL | FINLAND | UK | GERMANY | OTHER COUN- TRIES | TOTAL |
Present value of funded obligations | 26 | 320 | 30 | 2 | 377 | 27 | 316 | 30 | 11 | 384 |
Fair value of plan assets | -26 | -297 | -2 | -2 | -327 | -26 | -300 | -2 | -11 | -340 |
Deficit (+)/surplus (–) | 0 | 23 | 27 | 0 | 50 | 0 | 16 | 27 | 0 | 44 |
Present value of unfunded obligations | — | — | 417 | 16 | 434 | — | — | 414 | 52 | 466 |
Net defined benefit liability (+)/ asset (–) | 0 | 23 | 445 | 16 | 484 | 0 | 16 | 442 | 52 | 510 |
Net retirement benefit asset in the balance sheet | -1 | — | — | — | -1 | -1 | — | — | — | -1 |
Net retirement benefit liability in the balance sheet 1) | 0 | 23 | 445 | 16 | 485 | 1 | 16 | 442 | 52 | 511 |
UPM FINANCIAL REPORT 2023 | 64 |
Pension and other post-employment benefits 2023 | Pension and other post-employment benefits 2022 | |||||
EURm | PRESENT VALUE OF OBLIGATION | FAIR VALUE OF PLAN ASSETS | NET DEFINED BENEFIT LIABILITY/ (ASSET) | PRESENT VALUE OF OBLIGATION | FAIR VALUE OF PLAN ASSETS | NET DEFINED BENEFIT LIABILITY/ (ASSET) |
Carrying value, at 1 January | 850 | -340 | 510 | 1,790 | -1,214 | 576 |
Current service cost | 5 | — | 5 | 11 | — | 11 |
Past service cost | -1 | — | -1 | -1 | — | -1 |
Gains and losses arising from settlements 1) | — | — | — | 62 | — | 62 |
Interest expense (+) income (–) | 32 | -15 | 17 | 18 | -13 | 5 |
Total included in employee costs (Note 3.1) | 36 | -15 | 21 | 90 | -13 | 77 |
Actuarial gains and losses arising from changes in demographic assumptions | -13 | — | -13 | — | — | — |
Actuarial gains and losses arising from changes in financial assumptions | 9 | — | 9 | -562 | — | -562 |
Actuarial gains and losses arising from experience adjustments | 12 | — | 12 | 50 | — | 50 |
Return on plan assets, excluding amounts included in interest expense (+) income (–) | — | 6 | 6 | — | 263 | 263 |
Total remeasurement gains (–) and losses (+) included in other comprehensive income | 7 | 6 | 14 | -512 | 263 | -249 |
Benefits paid | -44 | 44 | — | -59 | 59 | — |
Settlements paid | -9 | 9 | — | -431 | 431 | — |
Contributions by the employer | — | -25 | -25 | — | 104 | 104 |
Translation differences | 6 | -6 | — | -29 | 30 | 1 |
Liabilities classified as held for sale (Note 8.4) | -36 | — | -36 | — | — | — |
Carrying value, at 31 December | 810 | -327 | 484 | 850 | -340 | 510 |
Actuarial risks |
UPM FINANCIAL REPORT 2023 | 65 |
Key estimates and judgements |
FINLAND | UK | GERMANY | OTHER COUNTRIES | |||||
2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |
Discount rate % | 3.11 | 3.25 | 4.55 | 4.80 | 3.26 | 3.32 | 4.16 | 3.67 |
Inflation rate % | 2.13 | 2.53 | 3.10 | 3.25 | 2.00 | 2.00 | 2.28 | 2.51 |
Rate of salary increase % | 1.89 | 2.23 | — | — | 2.50 | 2.50 | 2.50 | 2.87 |
Rate of pension increase % | 1.44 | 1.77 | 3.00 | 3.15 | 2.00 | 2.00 | — | 1.13 |
Expected average remaining working years of participants | 1.0 | 1.9 | 8.8 | 9.5 | 8.1 | 8.0 | 11.5 | 9.0 |
EURm | 0.5% INCREASE | 0.5% DECREASE | ||
2023 | 2022 | 2023 | 2022 | |
Discount rate % | -50 | -52 | 54 | 57 |
Rate of salary increase % | 6 | 7 | -6 | -7 |
Rate of pension increase % | 40 | 39 | -37 | -38 |
Life expectancy +1 year | 29 | 29 | — | — |
EURm | 2023 | 2022 | ||
Quoted | Unquoted | Quoted | Unquoted | |
Money market | 49 | 2 | 97 | 36 |
Debt instruments | 129 | 32 | — | 77 |
Equity instruments | 3 | 45 | — | 15 |
Property | — | 21 | — | 59 |
Assets held by insurance companies | — | 30 | — | 39 |
Other assets | — | 15 | — | 16 |
Total | 182 | 145 | 97 | 243 |
UPM FINANCIAL REPORT 2023 | 66 |
Accounting policies |
EURm | 2023 | 2022 |
Property, plant and equipment | 7,053 | 6,733 |
Leased assets | 683 | 713 |
Forest assets | 2,355 | 2,442 |
Energy shareholdings | 2,283 | 3,652 |
Goodwill and other intangible assets | 998 | 834 |
Operating working capital | 1,883 | 2,026 |
Provisions | -266 | -134 |
Net retirement benefit assets and liabilities | -501 | -526 |
Cash and cash equivalents | 632 | 2,067 |
Other assets and liabilities | -69 | 257 |
Net deferred tax assets and liabilities | -185 | -151 |
Assets classified as held for sale, net | 50 | — |
Total | 14,916 | 17,913 |
UPM FINANCIAL REPORT 2023 | 67 |
EURm | LAND AND WATER AREAS | BUILDINGS | MACHINERY AND EQUIPMENT | OTHER TANGIBLE ASSETS | CONSTRUC- TION IN PROGRESS | TOTAL |
2023 | ||||||
Accumulated costs | 862 | 4,766 | 14,771 | 891 | 925 | 22,216 |
Accumulated depreciation and impairments | -2 | -2,693 | -11,752 | -716 | — | -15,163 |
Carrying value, at 31 December | 861 | 2,073 | 3,019 | 175 | 925 | 7,053 |
Carrying value, at 1 January | 900 | 1,054 | 1,638 | 148 | 2,993 | 6,733 |
Additions | 2 | — | 5 | — | 1,067 | 1,074 |
Companies acquired | — | — | — | — | — | 1 |
Disposals | — | -1 | — | — | — | -2 |
Depreciation | — | -92 | -310 | -19 | — | -422 |
Impairment | — | -3 | -15 | -3 | — | -20 |
Reclassifications 1) | — | 1,135 | 1,723 | 53 | -3,052 | -141 |
Reclassifications to assets held for sale 2) | -17 | -1 | -1 | -1 | — | -21 |
Translation differences | -23 | -19 | -20 | -3 | -84 | -149 |
Carrying value, at 31 December | 861 | 2,073 | 3,019 | 175 | 925 | 7,053 |
2022 | ||||||
Accumulated costs | 902 | 3,707 | 13,163 | 866 | 2,993 | 21,628 |
Accumulated depreciation and impairments | -2 | -2,653 | -11,526 | -718 | — | -14,895 |
Carrying value, at 31 December | 900 | 1,054 | 1,638 | 148 | 2,993 | 6,733 |
Carrying value, at 1 January | 857 | 848 | 1,674 | 122 | 2,069 | 5,569 |
Additions | 5 | 1 | 7 | 1 | 1,353 | 1,366 |
Companies acquired | 3 | 26 | 20 | — | 6 | 56 |
Disposals | -3 | -4 | -1 | -1 | — | -9 |
Depreciation | — | -75 | -266 | -17 | — | -357 |
Impairment | — | -10 | -37 | -5 | — | -52 |
Reclassifications | — | 260 | 235 | 45 | -540 | 1 |
Translation differences | 39 | 8 | 4 | 2 | 106 | 159 |
Carrying value, at 31 December | 900 | 1,054 | 1,638 | 148 | 2,993 | 6,733 |
UPM FINANCIAL REPORT 2023 | 68 |
EURm | 2023 | 2022 |
New biorefinery / Germany | 363 | 257 |
Accounting policies |
ASSESSED USEFUL LIVES | NUMBER OF YEARS |
Land, not subject to depreciation | - |
Buildings | 20-50 |
Power plants | 20-30 |
Heavy machinery | 15-20 |
Light machinery | 10-15 |
Equipment | 5 |
Key estimates and judgements |
UPM FINANCIAL REPORT 2023 | 69 |
EURm | 2023 | 2022 |
Carrying value, at 1 January | 2,442 | 2,328 |
Additions | 50 | 79 |
Disposals | -10 | -16 |
Wood harvested | -184 | -143 |
Net change in fair value | 81 | 153 |
Translation differences | -25 | 40 |
Carrying value, at 31 December | 2,355 | 2,442 |
EURm | 2023 | 2022 |
Forest assets in Finland | 1,621 | 1,702 |
Forest assets in Uruguay | 720 | 724 |
Forest assets in United States | 13 | 15 |
Carrying value, at 31 December | 2,355 | 2,442 |
1,000 ha | FOREST LAND | PRO- DUCTIVE FOREST LAND | FORESTED LAND |
Finland | 523 | 430 | 421 |
Uruguay | 304 | 182 | 177 |
Uruguay, leased land | 170 | 138 | 131 |
United States | 76 | 55 | 55 |
Total | 1,073 | 805 | 784 |
Accounting policies |
Key estimates and judgements |
UPM FINANCIAL REPORT 2023 | 70 |
Number of shares | Group holding % | Carrying value, EURm | ||
2023 | 2022 | |||
Pohjolan Voima Oyj, A series | 8,176,191 | 61.24 | 507 | 584 |
Pohjolan Voima Oyj, B series | 4,140,132 | 58.11 | 1,302 | 2,016 |
Pohjolan Voima Oyj, B2 series | 2,869,819 | 51.22 | 0 | 454 |
Kemijoki Oy | 179,189 | 7.33 | 345 | 442 |
Länsi-Suomen Voima Oy | 10,220 | 51.10 | 124 | 150 |
Other | — | — | 5 | 5 |
Carrying value, at 31 December | 2,283 | 3,652 |
EURm | 2023 | 2022 |
Carrying value, at 1 January | 3,652 | 2,579 |
Disposals | — | -2 |
Changes in fair value recognised in other comprehensive income | -1,369 | 1,074 |
Carrying value, at 31 December | 2,283 | 3,652 |
Accounting policies |
Key estimates and judgements |
UPM FINANCIAL REPORT 2023 | 71 |
EURm | 2023 | 2022 |
Pulp operations Uruguay | 105 | 109 |
Pulp operations Finland | 113 | 113 |
UPM Raflatac | 46 | 46 |
UPM Plywood | 13 | 13 |
Other operations | 6 | 1 |
Total | 283 | 282 |
EURm | 2023 | 2022 |
Carrying value, at 1 January | 282 | 237 |
Companies acquired | 5 | 38 |
Translation differences | -4 | 6 |
Carrying value, at 31 December | 283 | 282 |
EURm | INTANGIBLE RIGHTS | SOFTWARE AND OTHER INTANGIBLE ASSETS | TOTAL |
2023 | |||
Accumulated costs | 463 | 765 | 1,228 |
Accumulated amortisation and impairments | -249 | -520 | -769 |
Carrying value, at 31 December | 214 | 245 | 459 |
Carrying value, at 1 January | 198 | 120 | 317 |
Additions | 2 | 6 | 8 |
Companies acquired | 18 | 4 | 22 |
Amortisation | -4 | -25 | -29 |
Reclassifications 2) | — | 140 | 140 |
Carrying value, at 31 December | 214 | 245 | 459 |
Emission rights, carrying value 1) | 256 | ||
Carrying value including emission rights, at 31 December | 715 | ||
2022 | |||
Accumulated costs | 482 | 614 | 1,096 |
Accumulated amortisation and impairments | -285 | -494 | -779 |
Carrying value, at 31 December | 198 | 120 | 317 |
Carrying value, at 1 January | 198 | 64 | 262 |
Additions | 3 | 11 | 14 |
Companies acquired | — | 62 | 62 |
Amortisation | -3 | -17 | -21 |
Reclassifications | — | — | 1 |
Carrying value, at 31 December | 198 | 120 | 317 |
Emission rights, carrying value 1) | 235 | ||
Carrying value including emission rights, at 31 December | 553 |
UPM FINANCIAL REPORT 2023 | 72 |
CASH GENERATING UNIT | BASIS OF VALUATION | PERIOD OF FORECAST | PRE-TAX DISCOUNT RATE | KEY ASSUMPTIONS |
Pulp operations Finland | Value in use | 10 years + terminal value | 10.68% (2022: 10.84%) | Pulp price, wood costs |
Pulp operations Uruguay | Value in use | 10 years + terminal value | 9.61% (2022: 9.30%) | Pulp price, wood costs |
UPM Raflatac | Value in use | 10 years + terminal value | 10.05% (2022: 9.48%) | Product prices, cost development |
UPM Plywood | Value in use | 10 years + terminal value | 12.06% (2022: 15.77%) | Product prices, cost development |
UPM Biochemicals | Value in use | 10 years + terminal value | 10.20% (2022: n/a) | Product prices, cost development |
Key estimates and judgements |
Accounting policies |
UPM FINANCIAL REPORT 2023 | 73 |
EURm | RESTRUCTURING | TERMINATION | ENVIRON- MENTAL | EMISSIONS | OTHER | TOTAL |
2023 | ||||||
Provisions at 1 January | 14 | 22 | 29 | 53 | 15 | 134 |
Provisions made during the year | 53 | 129 | 2 | 69 | 5 | 258 |
Provisions utilised during the year | -6 | -30 | -3 | -65 | -12 | -116 |
Unused provisions reversed | -1 | -4 | -2 | — | -2 | -10 |
Reclassifications | -1 | — | 1 | -1 | — | -1 |
Provisions at 31 December | 59 | 117 | 27 | 56 | 6 | 266 |
Non-current | 170 | |||||
Current | 96 | |||||
Total | 266 | |||||
2022 | ||||||
Provisions at 1 January | 24 | 36 | 30 | 39 | 26 | 155 |
Provisions made during the year | 5 | 11 | 11 | 69 | 21 | 117 |
Provisions utilised during the year | -12 | -23 | -1 | -54 | -30 | -121 |
Unused provisions reversed | -3 | -2 | -11 | — | -2 | -18 |
Reclassifications | — | — | — | — | — | — |
Provisions at 31 December | 14 | 22 | 29 | 53 | 15 | 134 |
Non-current | 64 | |||||
Current | 70 | |||||
Total | 134 |
UPM FINANCIAL REPORT 2023 | 74 |
Accounting policies |
Key estimates and judgements |
EURm | 2023 | 2022 |
Inventories | 1,948 | 2,289 |
Trade receivables | 1,254 | 1,614 |
Trade payables | -1,297 | -1,855 |
Advances received | -22 | -23 |
Total | 1,883 | 2,026 |
EURm | 2023 | 2022 |
Raw materials and consumables | 1,027 | 1,128 |
Work in progress | 6 | 11 |
Finished products and goods | 885 | 1,116 |
Advance payments | 31 | 34 |
Total | 1,948 | 2,289 |
EURm | 2023 | 2022 |
Trade receivables | ||
Trade receivables | 1,284 | 1,647 |
Loss allowance provision | -30 | -32 |
Total trade receivables | 1,254 | 1,614 |
Prepayments and accrued income | ||
Personnel expenses | 2 | 2 |
Interest income | 1 | 1 |
Energy and other excise taxes | 11 | 15 |
Other items | 118 | 158 |
Total prepayments and accrued income | 133 | 176 |
Other receivables | ||
VAT and other indirect taxes receivable | 155 | 326 |
Cash collaterals | 187 | 500 |
Other receivables | 53 | 80 |
Total other receivables | 395 | 906 |
Total | 1,782 | 2,696 |
UPM FINANCIAL REPORT 2023 | 75 |
2023 | 2022 | |||||
EURm | TRADE RECEIVABLES | LOSS ALLOWANCE PROVISION | TRADE RECEIVABLES, NET OF PROVISION | TRADE RECEIVABLES | LOSS ALLOWANCE PROVISION | TRADE RECEIVABLES, NET OF PROVISION |
Undue | 1,165 | -4 | 1,161 | 1,471 | -1 | 1,470 |
Past due up to 30 days | 82 | -2 | 80 | 114 | -1 | 114 |
Past due 31–90 days | 8 | -1 | 7 | 19 | -3 | 16 |
Past due over 90 days | 30 | -23 | 6 | 42 | -28 | 14 |
Total | 1,284 | -30 | 1,254 | 1,647 | -32 | 1,614 |
EURm | 2023 | 2022 |
Accrued expenses and deferred income | ||
Personnel expenses | 181 | 184 |
Interest expenses | 22 | 21 |
Indirect taxes | 16 | 17 |
Customer rebates | 94 | 130 |
Customer claims | 6 | 7 |
Other items | 148 | 169 |
Total accrued expenses and deferred income | 467 | 528 |
Advances received | 22 | 23 |
Trade payables | 1,297 | 1,855 |
Other current liabilities | 97 | 314 |
Total | 1,883 | 2,720 |
Operational credit risk |
Accounting policies |
UPM FINANCIAL REPORT 2023 | 76 |
Net debt | Free cash flow | ||||||
EUR | 2,432 | m | EUR | 1,193 | m | ||
(EUR 2374m) | (EUR -1077m) |
EURm | 2023 | 2022 |
Equity attributable to owners of the parent company | 11,161 | 12,502 |
Non-controlling interest | 370 | 376 |
Total equity | 11,531 | 12,879 |
Non-current debt | 3,056 | 4,476 |
Current debt | 327 | 558 |
Debt held for sale | 2 | 0 |
Total debt | 3,385 | 5,034 |
Total capitalisation | 14,916 | 17,913 |
Total debt | 3,385 | 5,034 |
Less: Interest-bearing financial assets and investment funds | 906 | 2,660 |
Less: Interest-bearing financial assets held for sale | 47 | 0 |
Net debt | 2,432 | 2,374 |
Gearing ratio, % 1) | 21 | 18 |
Net debt to EBITDA 1) | 1.55 | 0.94 |
Liquidity and refinancing risk |
EURm | 2023 | 2022 |
Cash at bank | 613 | 1,632 |
Cash equivalents | 19 | 434 |
Cash classified as assets held for sale | 39 | 0 |
Investment funds | 1 | 1 |
Committed credit lines | 2,909 | 5,709 |
of which used | — | -1,378 |
Loan commitments | — | -123 |
Used uncommitted credit lines | -182 | -444 |
Long-term loan repayment cash flow | -114 | -94 |
Debt held for sale | -2 | 0 |
Liquidity | 3,284 | 5,738 |
UPM FINANCIAL REPORT 2023 | 77 |
EURm | 2024 | 2025 | 2026 | 2027 | 2028 | 2029+ | TOTAL |
Bonds | — | — | — | 339 | 750 | 1,000 | 2,089 |
Loans from financial institutions | 20 | 34 | 31 | 31 | 31 | 62 | 208 |
Lease liabilities | 94 | 97 | 64 | 53 | 50 | 348 | 706 |
Other loans | — | 2 | — | — | — | 135 | 137 |
Current loans and debt held for sale | 183 | — | — | — | — | — | 183 |
Principal payments | 297 | 133 | 95 | 423 | 830 | 1,545 | 3,323 |
Interest payments | 75 | 66 | 62 | 61 | 34 | 111 | 409 |
EURm | 2023 | 2024 | 2025 | 2026 | 2027 | 2028+ | TOTAL |
Bonds | — | — | — | — | 352 | 1,750 | 2,102 |
Loans from financial institutions | 9 | 1,001 | 337 | 34 | 134 | 99 | 1,613 |
Lease liabilities | 84 | 75 | 80 | 49 | 36 | 343 | 668 |
Other loans | 1 | — | — | — | — | 151 | 152 |
Current loans | 444 | — | — | — | — | — | 444 |
Principal payments | 538 | 1,076 | 417 | 83 | 521 | 2,343 | 4,978 |
Interest payments | 70 | 69 | 66 | 63 | 61 | 128 | 458 |
UPM FINANCIAL REPORT 2023 | 78 |
EURm | 2024 | 2025 | 2026 | 2027 | 2028 | 2029+ | TOTAL |
Net settled interest rate swaps | |||||||
Net inflow | 3 | 7 | 9 | 9 | — | — | 27 |
Net outflow | -30 | -19 | -17 | -18 | -19 | — | -104 |
Gross settled derivatives | |||||||
Gross currency swaps | |||||||
Total inflow | 7 | 7 | 7 | 7 | 7 | 138 | 173 |
Total outflow | -7 | -5 | -5 | -5 | -5 | -168 | -195 |
Forward foreign exchange contracts | |||||||
Total inflow | 1,000 | 9 | — | — | — | — | 1,009 |
Total outflow | -989 | -9 | — | — | — | — | -999 |
Guarantees | — | — | — | — | — | — | — |
EURm | 2023 | 2024 | 2025 | 2026 | 2027 | 2028+ | TOTAL |
Net settled interest rate swaps | |||||||
Net inflow | 3 | 6 | 8 | 9 | 9 | — | 35 |
Net outflow | -24 | -28 | -26 | -25 | -25 | -25 | -153 |
Gross settled derivatives | |||||||
Gross currency swaps | |||||||
Total inflow | 7 | 7 | 7 | 7 | 7 | 160 | 197 |
Total outflow | -7 | -7 | -6 | -6 | -6 | -175 | -208 |
Forward foreign exchange contracts | |||||||
Total inflow | 625 | — | — | — | — | — | 625 |
Total outflow | -623 | — | — | — | — | — | -623 |
Guarantees | 2 | — | — | — | — | — | 2 |
UPM FINANCIAL REPORT 2023 | 79 |
EURm | 2023 | 2022 |
Bonds | 2,002 | 1,974 |
Loans from financial institutions | 188 | 1,604 |
Lease liabilities | 612 | 583 |
Derivatives | 94 | 137 |
Other loans | 160 | 179 |
Non-current debt | 3,056 | 4,476 |
Repayments of non-current debt | 20 | 9 |
Repayments of lease liabilities | 94 | 84 |
Derivatives | 33 | 24 |
Other liabilities | 180 | 441 |
Current debt | 327 | 558 |
Debt held for sale | 2 | 0 |
Total debt | 3,385 | 5,034 |
Loan receivables | 4 | 4 |
Derivatives | 51 | 61 |
Other receivables | 17 | 19 |
Non-current interest-bearing assets | 71 | 84 |
Loan receivables | 1 | 0 |
Derivatives | 14 | 9 |
Other receivables | 187 | 500 |
Investment funds | 1 | 1 |
Cash and cash equivalents | 632 | 2,067 |
Current interest-bearing assets | 835 | 2,576 |
Interest-bearing assets held for sale | 47 | 0 |
Total interest-bearing assets | 953 | 2,660 |
Net debt | 2,432 | 2,374 |
Accounting policies |
UPM FINANCIAL REPORT 2023 | 80 |
Reported in financing activities in cash flow statement | ||||||||||
EURm | NON- CURRENT LOANS INCL. REPAYMENTS | LEASE LIABI- LITIES | CURRENT LOANS | NET DERIVA- TIVES | INVEST- MENT FUNDS | DEBT HELD FOR SALE | OTHER FINANCIAL ASSETS | CASH AND CASH EQUIVA- LENTS | FINANCIAL ASSETS HELD FOR SALE | NET DEBT |
Carrying value, at 1 January | 3,766 | 668 | 441 | 90 | -1 | — | -523 | -2,067 | — | 2,374 |
Change in net debt, cash | ||||||||||
Proceeds from non-current debt | 100 | — | — | — | — | — | — | — | — | 100 |
Payments of non-current debt | -1,506 | — | — | — | — | — | — | — | — | -1,506 |
Lease repayments | — | -99 | — | — | — | — | — | — | — | -99 |
Change in current liabilities | — | — | -260 | — | — | — | — | — | — | -260 |
Net cash flows from derivatives | — | — | — | 6 | — | — | — | — | — | 6 |
Change in other financial assets in operating cash flow | — | — | — | — | — | — | 311 | — | — | 311 |
Change in other financial assets in investing cash flow | — | — | — | — | — | — | -5 | — | — | -5 |
Change in investment funds | — | — | — | — | ||||||
Change in cash and cash equivalents | — | — | — | — | — | — | — | 1,379 | — | 1,379 |
-1,406 | -99 | -260 | 6 | — | — | 306 | 1,379 | — | -74 | |
Change in net debt, non-cash | ||||||||||
Companies acquired | 2 | — | — | — | — | — | — | — | — | 2 |
Companies disposed | — | -2 | — | — | — | — | — | — | — | -2 |
New contracts and subsequent additions | — | 149 | — | — | — | — | — | — | — | 149 |
Lease liability reassessments | — | 2 | — | — | — | — | — | — | — | 2 |
Fair value gains and losses | 33 | — | — | -34 | — | — | — | — | — | -1 |
Exchange gains and losses | -27 | -11 | — | — | — | — | — | 16 | — | -22 |
Effective interest rate adjustment | 4 | — | — | — | — | — | — | — | — | 4 |
Reclassifications to assets and liabilities held for sale | -1 | -1 | — | — | — | 2 | 9 | 39 | -47 | — |
11 | 137 | — | -34 | — | 2 | 8 | 55 | -47 | 131 | |
Carrying value, at 31 December | 2,371 | 706 | 180 | 63 | -1 | 2 | -208 | -632 | -47 | 2,432 |
UPM FINANCIAL REPORT 2023 | 81 |
Reported in financing activities in cash flow statement | ||||||||
EURm | NON- CURRENT LOANS INCL. REPAYMENTS | LEASE LIABILITIES | CURRENT LOANS | NET DERIVA- TIVES | INVEST- MENT FUNDS | OTHER FINANCIAL ASSETS | CASH AND CASH EQUIVALENTS | NET DEBT |
Carrying value, at 1 January | 2,046 | 574 | 2 | -99 | -100 | -317 | -1,460 | 647 |
Change in net debt, cash | ||||||||
Proceeds from non-current debt | 4,402 | — | — | — | — | — | — | 4,402 |
Payments of non-current debt | -2,550 | — | — | — | — | — | — | -2,550 |
Lease repayments | — | -91 | — | — | — | — | — | -91 |
Change in current liabilities | — | — | 439 | — | — | — | — | 439 |
Net cash flows from derivatives | — | — | — | 20 | — | — | — | 20 |
Transaction costs and discounts in operating cash flow | -5 | — | — | — | — | — | — | -5 |
Change in other financial assets in operating cash flow | — | — | — | — | — | -208 | — | -208 |
Change in other financial assets in investing cash flow | — | — | — | — | — | 2 | — | 2 |
Change in investment funds | — | — | — | — | 99 | — | — | 99 |
Change in cash and cash equivalents | — | — | — | — | — | — | -610 | -610 |
1,847 | -91 | 439 | 20 | 99 | -206 | -610 | 1,499 | |
Change in net debt, non-cash | ||||||||
Companies acquired | 22 | — | — | — | — | — | — | 22 |
New contracts and subsequent additions | — | 171 | — | — | — | — | — | 171 |
Lease liability reassessments | — | -5 | — | — | — | — | — | -5 |
Fair value gains and losses | -180 | — | — | 169 | — | — | — | -11 |
Exchange gains and losses | 28 | 18 | — | — | — | — | 3 | 49 |
Effective interest rate adjustment | 3 | — | — | — | — | — | — | 3 |
-127 | 184 | — | 169 | — | — | 3 | 229 | |
Carrying value, at 31 December | 3,766 | 668 | 441 | 90 | -1 | -523 | -2,067 | 2,374 |
UPM FINANCIAL REPORT 2023 | 82 |
EURm | 2023 | 2022 |
Operating cash flow | 2,269 | 508 |
Investing cash flow | -1,076 | -1,585 |
Free cash flow | 1,193 | -1,077 |
Dividends paid to owners of the parent company | -799 | -693 |
Dividends paid to non-controlling interests | -36 | -27 |
Contributions paid by non-controlling interests | 35 | 97 |
Other financing cash flow | -14 | -9 |
Transaction costs and discounts in operating cash flow | 0 | 5 |
Change in other financial assets in operating cash flow | -311 | 208 |
Change in other financial assets in investing cash flow | 5 | -2 |
Change in net debt, cash | -74 | 1,499 |
Change in net debt, non-cash | 131 | 229 |
Change in net debt | 58 | 1,728 |
Opening net debt | 2,374 | 647 |
Closing net debt | 2,432 | 2,374 |
FIXED RATE PERIOD | INTEREST RATE, % | CURRENCY | NOMINAL VALUE ISSUED, MILLION | CARRYING VALUE 2023 EURm | CARRYING VALUE 2022 EURm |
1997-2027 | 7.450 | USD | 375 | 361 | 378 |
2020-2028 | 0.125 | EUR | 750 | 650 | 605 |
2021-2031 | 0.500 | EUR | 500 | 495 | 494 |
2022-2029 | 2.250 | EUR | 500 | 496 | 496 |
Value, at 31 December | 2,002 | 1,974 | |||
Current portion | — | — | |||
Non-current portion | 2,002 | 1,974 |
UPM FINANCIAL REPORT 2023 | 83 |
LAND AREAS | BUILDINGS | MACHINERY AND EQUIPMENT | OTHER LEASED ASSETS | ADVANCE PAYMENTS 1) | TOTAL | |
Carrying value, at 1 January | 283 | 247 | 169 | 1 | 13 | 713 |
New contracts and subsequent additions | 9 | 40 | 95 | 4 | 13 | 161 |
Reassessments and disposals | 7 | 4 | -2 | — | — | 9 |
Depreciation | -17 | -31 | -39 | — | — | -87 |
Impairments | — | -100 | — | — | — | -100 |
Reclassifications | — | 2 | 4 | -4 | -2 | — |
Reclassifications to assets held for sale | — | — | — | — | — | -1 |
Translation differences | -10 | -1 | -1 | — | — | -11 |
Carrying value, at 31 December | 272 | 161 | 226 | 1 | 24 | 683 |
Carrying value, at 1 January | 252 | 264 | 80 | 8 | 4 | 608 |
New contracts and subsequent additions | 24 | 18 | 127 | — | 8 | 178 |
Reassessments and disposals | 8 | — | -8 | — | — | — |
Depreciation | -16 | -34 | -29 | — | — | -80 |
Impairments | — | -3 | -7 | -2 | — | -12 |
Reclassifications | — | — | 5 | -5 | — | -1 |
Translation differences | 15 | 2 | 1 | — | — | 18 |
Carrying value, at 31 December | 283 | 247 | 169 | 1 | 13 | 713 |
UPM FINANCIAL REPORT 2023 | 84 |
EURm | FAIR VALUE THROUGH PROFIT AND LOSS | EQUITY INSTRUMENTS AT FAIR VALUE THROUGH OCI | DERIVATIVES UNDER HEDGE ACCOUNTING | FINANCIAL ASSETS AND LIABILITIES AT AMORTISED COST | TOTAL |
Energy shareholdings | — | 2,283 | — | — | 2,283 |
Other non-current financial assets | |||||
Loans and receivables | — | — | — | 8 | 8 |
Derivatives | — | — | 52 | — | 52 |
— | — | 52 | 8 | 60 | |
Trade and other receivables | — | — | — | 1,782 | 1,782 |
Other current financial assets | |||||
Loans and receivables | — | — | — | 1 | 1 |
Derivatives | 19 | — | 43 | — | 62 |
Investment funds | 1 | — | — | — | 1 |
20 | — | 43 | 1 | 64 | |
Financial assets classified as held for sale 2) | — | — | — | 63 | 63 |
Cash and cash equivalents | — | — | — | 632 | 632 |
Total financial assets | 20 | 2,283 | 95 | 2,486 | 4,884 |
Non-current debt | |||||
Interest-bearing liabilities | — | — | — | 2,962 | 2,962 |
Derivatives | — | — | 94 | — | 94 |
— | — | 94 | 2,962 | 3,056 | |
Other non-current financial liabilities | |||||
Other liabilities 1) | — | — | — | 155 | 155 |
Derivatives | — | — | 2 | — | 2 |
— | — | 2 | 155 | 157 | |
Current debt | |||||
Interest-bearing liabilities | — | — | — | 294 | 294 |
Derivatives | 33 | — | — | — | 33 |
33 | — | — | 294 | 327 | |
Trade and other payables | — | — | — | 1,883 | 1,883 |
Other current financial liabilities | |||||
Derivatives | 13 | — | 38 | — | 51 |
13 | — | 38 | — | 51 | |
Financial liabilities classified as held for sale 2) | — | — | — | 20 | 20 |
Total financial liabilities | 46 | — | 134 | 5,314 | 5,494 |
UPM FINANCIAL REPORT 2023 | 85 |
EURm | FAIR VALUE THROUGH PROFIT AND LOSS | EQUITY INSTRUMENTS AT FAIR VALUE THROUGH OCI | DERIVATIVES UNDER HEDGE ACCOUNTING | FINANCIAL ASSETS AND LIABILITIES AT AMORTISED COST | TOTAL |
Energy shareholdings | — | 3,652 | — | — | 3,652 |
Other non-current financial assets | |||||
Loans and receivables | — | — | — | 8 | 8 |
Derivatives | — | — | 62 | — | 63 |
— | — | 62 | 8 | 70 | |
Trade and other receivables | — | — | — | 2,696 | 2,696 |
Other current financial assets | |||||
Loans and receivables | — | — | — | — | — |
Derivatives | 17 | — | 100 | — | 117 |
Investment funds | 1 | — | — | — | 1 |
18 | — | 100 | — | 118 | |
Cash and cash equivalents | — | — | — | 2,067 | 2,067 |
Total financial assets | 18 | 3,652 | 162 | 4,771 | 8,602 |
Non-current debt | |||||
Interest-bearing liabilities | — | — | — | 4,340 | 4,340 |
Derivatives | — | — | 137 | — | 137 |
— | — | 137 | 4,340 | 4,476 | |
Other non-current financial liabilities | |||||
Other liabilities 1) | — | — | — | 90 | 90 |
Derivatives | — | — | 13 | — | 13 |
— | — | 13 | 90 | 103 | |
Current debt | |||||
Loans | — | — | — | 534 | 534 |
Derivatives | 24 | — | — | — | 24 |
24 | — | — | 534 | 558 | |
Trade and other payables | — | — | — | 2,720 | 2,720 |
Other current financial liabilities | |||||
Derivatives | 14 | — | 88 | — | 102 |
14 | — | 88 | — | 102 | |
Total financial liabilities | 37 | — | 238 | 7,683 | 7,959 |
UPM FINANCIAL REPORT 2023 | 86 |
EURm | 2023 | 2022 | ||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |
Financial assets | ||||||||
Investment funds | — | 1 | — | 1 | — | 1 | — | 1 |
Derivatives, non-qualifying hedges | — | 19 | — | 19 | — | 17 | — | 17 |
Derivatives under hedge accounting | 4 | 91 | — | 95 | 12 | 150 | — | 162 |
Energy shareholdings | — | — | 2,283 | 2,283 | — | — | 3,652 | 3,652 |
Total | 4 | 111 | 2,283 | 2,398 | 12 | 168 | 3,652 | 3,832 |
Financial liabilities | ||||||||
Derivatives, non-qualifying hedges | — | 46 | — | 46 | — | 37 | — | 37 |
Derivatives under hedge accounting | 6 | 128 | — | 134 | 46 | 192 | — | 238 |
Total | 6 | 174 | — | 180 | 46 | 229 | — | 275 |
Accounting policies |
UPM FINANCIAL REPORT 2023 | 87 |
EURm | 2023 | 2022 |
Exchange rate gains and losses | ||
Derivatives | 4 | 8 |
Exchange gains and losses on financial liabilities measured at amortised costs | 29 | -37 |
Exchange gains and losses on financial assets measured at amortised costs | -32 | 22 |
Other exchange rate gains and losses 1) | -73 | 29 |
-72 | 22 | |
Fair value changes | ||
Fair value gains and losses on derivatives designated as fair value hedges | 32 | -177 |
Fair value adjustment of debt attributable to interest rate risk | -33 | 180 |
-2 | 3 | |
Total | -74 | 25 |
Interest and other finance income and costs, net | ||
Interest expense on lease liabilities | -21 | -14 |
Interest expense on other financial liabilities measured at amortised cost | -38 | -49 |
Interest income (expense) on derivatives | -28 | 26 |
Interest income on loans, receivables and cash | 37 | 9 |
Other financial income and expenses, net | -20 | -27 |
-70 | -55 | |
Total | -144 | -30 |
EURm | 2023 | 2022 |
Cash flow hedges reclassified from hedging reserve | -117 | -475 |
Non-qualifying hedges | 4 | 3 |
Total | -113 | -472 |
EURm | 2023 | 2022 |
Sales | 61 | -59 |
Other operating income | -35 | -47 |
Total | 26 | -106 |
2023 | 2022 | |
Number of shares (1,000) | 533,736 | 533,736 |
Share capital, EURm | 890 | 890 |
UPM FINANCIAL REPORT 2023 | 88 |
EURm | 2023 | 2022 |
Fair value reserve | 1,713 | 3,062 |
Hedging reserve | -88 | -627 |
Share-based payments reserve | 31 | 25 |
Total other reserves | 1,655 | 2,460 |
Reserve for invested non-restricted equity | 1,273 | 1,273 |
Translation reserve | 347 | 449 |
Total reserves | 3,276 | 4,182 |
Accounting policies |
EURm | CURRENCY CASH FLOW HEDGES | ELECTRICITY PURCHASE AND SALES HEDGES | COST OF HEDGING | TAX | TOTAL |
2023 | |||||
Hedging reserve, at 1 January | 42 | -814 | -11 | 155 | -627 |
Amounts reclassified to profit and loss | -74 | 178 | 13 | -23 | 94 |
Amounts reclassified to acquisition cost of a fixed assets | — | — | 1 | — | 1 |
Change in fair value of hedging instruments recognised in OCI | 44 | 516 | -5 | -111 | 444 |
Hedging reserve, at 31 December | 13 | -120 | -3 | 21 | -88 |
EURm | CURRENCY CASH FLOW HEDGES | ELECTRICITY PURCHASE AND SALES HEDGES | COST OF HEDGING | TAX | TOTAL |
2022 | |||||
Hedging reserve, at 1 January | -32 | -84 | -1 | 22 | -96 |
Amounts reclassified to profit and loss | 65 | 401 | 4 | -94 | 376 |
Amounts reclassified to acquisition cost of a fixed assets | 24 | — | 1 | — | 25 |
Change in fair value of hedging instruments recognised in OCI | -15 | -1,131 | -15 | 228 | -932 |
Hedging reserve, at 31 December | 42 | -814 | -11 | 155 | -627 |
UPM FINANCIAL REPORT 2023 | 89 |
Foreign exchange risk |
UPM FINANCIAL REPORT 2023 | 90 |
Profit before tax | Equity | |||
EURm | 2023 | 2022 | 2023 | 2022 |
EUR strengthens by 10% | ||||
USD | 2 | 1 | 89 | 128 |
UYU | — | — | -14 | -15 |
GBP | — | — | 13 | 17 |
CNY | 1 | 1 | 10 | 10 |
EUR weakens by 10% | ||||
USD | -2 | -1 | -89 | -128 |
UYU | — | — | 14 | 15 |
GBP | — | — | -13 | -17 |
CNY | -1 | -1 | -10 | -10 |
Interest rate risk |
EURbn | 2023 | 2022 |
EUR | 1.3 | 1.8 |
USD | 0.9 | 0.5 |
CNY | -0.2 | -0.2 |
Others | -0.2 | -0.4 |
Total | 1.8 | 1.8 |
Profit before tax | ||
EURm | 2023 | 2022 |
Interest rate of net debt 100 basis points higher | -8 | -24 |
Interest rate of net debt 100 basis points lower | 8 | 24 |
UPM FINANCIAL REPORT 2023 | 91 |
Electricity price risk |
EURm | EFFECT | 2023 | 2022 |
+/– EUR 5/MWh in electricity forward quotations | |||
Effect on profit before tax | +/- | 0.1 | 0.1 |
Effect on equity | +/- | 51.0 | 93.0 |
Accounting policies |
UPM FINANCIAL REPORT 2023 | 92 |
Financial counterparty risk |
UPM FINANCIAL REPORT 2023 | 93 |
Positive fair values | Negative fair values | Net fair values | Positive fair values | Negative fair values | Net fair values | |
EURm | 2023 | 2022 | ||||
Foreign exchange risk | ||||||
Forward foreign exchange contracts | ||||||
Cash flow hedges | 25 | -12 | 13 | 67 | -34 | 33 |
Net investment hedge | 3 | -2 | 1 | 2 | -2 | — |
Non-qualifying hedges | 19 | -5 | 14 | 16 | -15 | — |
Cross currency swaps | ||||||
Non-qualifying hedges | — | -31 | -31 | — | -16 | -16 |
Derivatives hedging foreign exchange risk | 47 | -50 | -3 | 85 | -68 | 18 |
Interest rate risk | ||||||
Interest rate swaps | ||||||
Fair value hedges | 24 | -94 | -69 | 30 | -137 | -107 |
Non-qualifying hedges | — | -4 | -4 | — | -2 | -2 |
Cross currency swaps | ||||||
Fair value hedges | 27 | — | 27 | 31 | — | 31 |
Non-qualifying hedges | — | — | — | — | — | — |
Derivatives hedging interest risk | 51 | -97 | -46 | 62 | -139 | -77 |
Commodity risk | ||||||
Electricity sales | ||||||
Cash flow hedges | 12 | -26 | -14 | 19 | -54 | -35 |
Non-qualifying hedges | — | — | — | — | -2 | -2 |
Electricity purchase | ||||||
Cash flow hedges | 4 | — | 4 | 12 | -11 | 1 |
Other commodities | ||||||
Non-qualifying hedges | — | -6 | -6 | 1 | -1 | — |
Derivatives hedging commodity risk | 16 | -32 | -16 | 32 | -69 | -36 |
Total | 114 | -180 | -66 | 179 | -275 | -96 |
EURm | 2023 | 2022 |
Interest rate futures | 1,691 | 1,969 |
Interest rate swaps | 1,089 | 1,102 |
Forward foreign exchange contracts | 3,308 | 3,913 |
Currency options | — | — |
Cross currency swaps | 134 | 149 |
Commodity contracts | 591 | 1,744 |
EURm | POSITIVE FAIR VALUES | NEGATIVE FAIR VALUES | NET FAIR VALUES |
2023 | 55 | -121 | -66 |
2022 | 88 | -185 | -96 |
UPM FINANCIAL REPORT 2023 | 94 |
Timing of nominal amounts of derivatives 2023 | Within 1 year | Between 1–5 years | Later than 5 years | Total |
EURm | 2023 | |||
Foreign exchange risk | ||||
Forward foreign exchange contracts | ||||
Cash flow hedges | 1,735 | 8 | — | 1,743 |
Net investment hedge | 287 | — | — | 287 |
Non-qualifying hedges | 1,263 | 15 | — | 1,278 |
Cross currency swaps | ||||
Non-qualifying hedges | — | — | 134 | 134 |
Interest rate risk | ||||
Interest rate swaps | ||||
Fair value hedges | — | 1,089 | — | 1,089 |
Cross currency swaps | ||||
Fair value hedges | — | — | 134 | 134 |
Interest rate futures | ||||
Non-qualifying hedges | 1,691 | — | — | 1,691 |
Commodity risk | ||||
Electricity sales | ||||
Cash flow hedges | 381 | 60 | — | 442 |
Non-qualifying hedges | — | — | — | — |
Electricity purchase | ||||
Cash flow hedges | 35 | 2 | — | 37 |
Non-qualifying hedges | 1 | — | — | 1 |
Other commodities | ||||
Non-qualifying hedges | 111 | — | — | 111 |
Timing of nominal amounts of derivatives 2022 | Within 1 year | Between 1–5 years | Later than 5 years | Total |
EURm | 2022 | |||
Foreign exchange risk | ||||
Forward foreign exchange contracts | ||||
Cash flow hedges | 2,597 | 18 | — | 2,615 |
Net investment hedge | 365 | — | — | 365 |
Non-qualifying hedges | 928 | 5 | — | 934 |
Cross currency swaps | ||||
Non-qualifying hedges | — | — | 149 | 149 |
Interest rate risk | ||||
Interest rate swaps | ||||
Fair value hedges | — | 352 | 750 | 1,102 |
Cross currency swaps | ||||
Fair value hedges | — | — | 149 | 149 |
Interest rate futures | ||||
Non-qualifying hedges | 1,969 | — | — | 1,969 |
Commodity risk | ||||
Electricity sales | ||||
Cash flow hedges | 968 | 393 | — | 1,361 |
Non-qualifying hedges | 5 | 1 | — | 6 |
Electricity purchase | ||||
Cash flow hedges | 244 | 40 | — | 283 |
Non-qualifying hedges | — | — | — | — |
Other commodities | ||||
Non-qualifying hedges | 93 | — | — | 93 |
UPM FINANCIAL REPORT 2023 | 95 |
EURm | 2023 | 2022 |
Current tax expense | 161 | 344 |
Change in deferred taxes | -90 | 44 |
Total | 71 | 388 |
EURm | 2023 | 2022 |
Profit before tax | 464 | 1,944 |
Computed tax at Finnish statutory rate of 20% | 93 | 389 |
Difference between Finnish and foreign rates | -28 | 62 |
Tax-exempt income | -51 | -99 |
Non-deductible expenses | 28 | 11 |
Withholding taxes | 2 | 0 |
Tax loss with no tax benefit | 45 | 19 |
Results of associates | 0 | -1 |
Change in tax legislation | — | 1 |
Change in recoverability of deferred tax assets | -5 | 9 |
Utilisation of previously unrecognised tax losses | -3 | -9 |
Other items | -9 | 7 |
Total income taxes | 71 | 388 |
Effective tax rate, % | 15.2% | 19.9% |
Accounting policies |
Key estimates and judgements |
UPM FINANCIAL REPORT 2023 | 96 |
EURm | 2023 | 2022 | 2021 |
Deferred tax assets | |||
Intangible assets and property, plant and equipment | 66 | 86 | 83 |
Inventories | 77 | 86 | 53 |
Retirement benefit liabilities and provisions | 94 | 88 | 127 |
Other temporary differences | 175 | 475 | 269 |
Tax losses and tax credits carried forward | 242 | 167 | 230 |
Offset against liabilities | -224 | -417 | -297 |
Total | 431 | 485 | 466 |
Deferred tax liabilities | |||
Intangible assets and property, plant and equipment | -265 | -335 | -261 |
Forest assets | -412 | -423 | -398 |
Retirement benefit assets | — | -2 | -17 |
Other temporary differences | -163 | -294 | -217 |
Offset against assets | 224 | 417 | 297 |
Total | -616 | -636 | -596 |
Net deferred tax assets (liabilities) | -185 | -151 | -130 |
EURm | 2023 | 2022 |
Carrying value, at 1 January | -151 | -130 |
Charged to income statement | 90 | -44 |
Charged to other comprehensive income | -113 | 58 |
Companies acquired | -5 | -26 |
Classified as held for sale | -13 | — |
Exchange rate adjustments | 7 | -9 |
Net deferred tax assets (liabilities) | -185 | -151 |
Before tax | Tax | After tax | Before tax | Tax | After tax | |
EURm | 2023 | 2022 | ||||
Actuarial gains and losses on defined benefit plans | -14 | 4 | -10 | 249 | -57 | 192 |
Energy shareholdings | -1,370 | 19 | -1,351 | 1,074 | -23 | 1,051 |
Translation differences | -120 | — | -120 | 150 | — | 150 |
Cash flow hedges | 673 | -134 | 539 | -665 | 134 | -531 |
Net investment hedges | 8 | -2 | 6 | -19 | 4 | -15 |
Total | -823 | -113 | -936 | 789 | 58 | 847 |
Key estimates and judgements |
UPM FINANCIAL REPORT 2023 | 97 |
Accounting policies |
EURm | |
Cash paid | 21 |
Deferred consideration | 2 |
Total purchase consideration | 23 |
EURm | 31 JUL 2023 |
Other intangible assets | 22 |
Property, plant and equipment | 1 |
Leased assets | 0 |
Trade and other receivables | 1 |
Cash and cash equivalents | 1 |
Total assets | 25 |
Deferred tax liabilities | 5 |
Provisions | 0 |
Non-current debt | 0 |
Trade and other payables | 1 |
Total liabilities | 7 |
Net identifiable assets acquired | 17 |
Goodwill arising from acquisition | 5 |
Accounting policies |
UPM FINANCIAL REPORT 2023 | 98 |
SUBSIDIARIES | COUNTRY OF INCORPORATION | HOLDING % 2023 | HOLDING % 2022 |
Blandin Paper Company | US | 100.00 | 100.00 |
Blanvira S.A. | UY | 91.00 | 91.00 |
Cuecar S.A. | UY | 91.00 | 91.00 |
Forestal Oriental S.A. | UY | 100.00 | 100.00 |
Gebr. Lang GmbH Papierfabrik | DE | 100.00 | 100.00 |
LLC UPM Ukraine | UA | 100.00 | 100.00 |
Nordland Papier GmbH | DE | 100.00 | 100.00 |
NorService GmbH | DE | 100.00 | 100.00 |
Nortrans Speditionsgesellschaft mbH | DE | 100.00 | 100.00 |
OOO UPM-Kymmene | RU | — | 100.00 |
OOO UPM-Kymmene Chudovo | RU | — | 100.00 |
Print Inform Japan K.K. | JP | 80.00 | 80.00 |
PT UPM Raflatac Indonesia | ID | 100.00 | 100.00 |
Rhein Papier GmbH | DE | 100.00 | 100.00 |
SERPRI S.A. Unipersonal | ES | 100.00 | 100.00 |
Steyrermühl Sägewerksgesellschaft m.b.H. Nfg KG | AT | 100.00 | 100.00 |
SunCoal Industries GmbH1) | DE | 100.00 | — |
Tebetur S.A. | UY | 91.00 | 91.00 |
Tile Forestal S.A. | UY | 91.00 | 91.00 |
UPM (China) Co. Ltd | CN | 100.00 | 100.00 |
UPM (Vietnam) Limited | VN | 100.00 | 100.00 |
UPM AG | CH | 100.00 | 100.00 |
UPM Asia Pacific Pte. Ltd. | SG | 100.00 | 100.00 |
UPM Biochemicals GmbH | DE | 100.00 | 100.00 |
UPM Biochemicals Sales GmbH | DE | 100.00 | 100.00 |
UPM Biofuels S.A. | UY | 100.00 | 100.00 |
UPM Communication Papers Oy | FI | 100.00 | 100.00 |
UPM Energy Oy | FI | 100.00 | 100.00 |
UPM France S.A.S. | FR | 100.00 | 100.00 |
UPM Fray Bentos S.A. | UY | 100.00 | 100.00 |
UPM GmbH | DE | 100.00 | 100.00 |
UPM-Kymmene (Korea) Ltd | KO | 100.00 | 100.00 |
UPM-Kymmene (UK) Ltd | GB | 100.00 | 100.00 |
UPM-Kymmene Administrations GmbH & Co. KG | DE | 100.00 | 100.00 |
UPM-Kymmene Austria GmbH | AT | 100.00 | 100.00 |
UPM-Kymmene Grundbesitz GmbH & Co. KG | DE | 100.00 | 100.00 |
UPM-Kymmene Inc. | US | 100.00 | 100.00 |
UPM-Kymmene India Private Limited | IN | 100.00 | 100.00 |
UPM-Kymmene Japan K.K. | JP | 100.00 | 100.00 |
UPM-Kymmene Kagit Urunleri Sanayi ve Ticared Ltd. Sti. | TR | 100.00 | 100.00 |
UPM-Kymmene Otepää OÜ | EE | 100.00 | 100.00 |
UPM-Kymmene S.r.l. | IT | 100.00 | 100.00 |
UPM-Kymmene Seven Seas Oy | FI | 100.00 | 100.00 |
UPM-Kymmene Sp.z o.o. | PL | 100.00 | 100.00 |
UPM NV | BE | 100.00 | 100.00 |
UPM OÜ | EE | 100.00 | 100.00 |
UPM Plywood Oy | FI | 100.00 | 100.00 |
UPM Pulp Sales Oy | FI | 100.00 | 100.00 |
UPM Raflatac (China) Co., Ltd. | CN | 100.00 | 100.00 |
UPM FINANCIAL REPORT 2023 | 99 |
SUBSIDIARIES | COUNTRY OF INCORPORATION | HOLDING % 2023 | HOLDING % 2022 |
UPM Raflatac (S) Pte Ltd | SG | 100.00 | 100.00 |
UPM Raflatac (UK) Ltd. | GB | 100.00 | 100.00 |
UPM Raflatac Chile SpA | CL | 100.00 | 100.00 |
UPM Raflatac Co. Ltd. | TH | 100.00 | 100.00 |
UPM Raflatac GmbH | DE | 100.00 | 100.00 |
UPM Raflatac Iberica S.A. | ES | 100.00 | 100.00 |
UPM Raflatac Inc. | US | 100.00 | 100.00 |
UPM Raflatac Mexico S.A. de C.V. | MX | 100.00 | 100.00 |
UPM Raflatac NZ Limited | NZ | 100.00 | 100.00 |
UPM Raflatac Oy | FI | 100.00 | 100.00 |
UPM Raflatac Pty Ltd | AU | 100.00 | 100.00 |
UPM Raflatac S.r.l. | AR | 100.00 | 100.00 |
UPM Raflatac SAS | FR | 100.00 | 100.00 |
UPM Raflatac Sdn.Bhd. | MY | 100.00 | 100.00 |
UPM Raflatac South Africa (Pty) Ltd | ZA | 100.00 | 100.00 |
UPM Raflatac Sp. z o .o. | PL | 100.00 | 100.00 |
UPM S.A. | UY | 91.00 | 91.00 |
UPM Sales GmbH | DE | 100.00 | 100.00 |
UPM Sales Oy | FI | 100.00 | 100.00 |
UPM Specialty Papers Oy | FI | 100.00 | 100.00 |
UPM Sähkönsiirto Oy | FI | 100.00 | 100.00 |
UPM Trading (Shanghai) Co | CN | 100.00 | 100.00 |
Uruwood S.A. | UY | 93.55 | 93.25 |
Werla Insurance Company Ltd | MT | 100.00 | 100.00 |
JOINT OPERATIONS | COUNTRY OF INCORPORATION | ||
Oy Alholmens Kraft Ab (Pohjolan Voima Oyj, G series and direct ownership) | FI | 50.00 | 50.00 |
EEVG Entsorgungs- und Energieverwertungsgesellschaft m.b.H. | AT | 50.00 | 50.00 |
Järvi-Suomen Voima Oy | FI | 50.00 | 50.00 |
Kaukaan Voima Oy (Pohjolan Voima Oyj, G9 series) | FI | 54.00 | 54.00 |
Kymin Voima Oy (Pohjolan Voima Oyj, G2 series) | FI | 76.00 | 76.00 |
Madison Paper Industries | US | — | 50.00 |
Rauman Biovoima Oy (Pohjolan Voima Oyj, G4 series) | FI | 71.95 | 71.95 |
EURm | 2023 | 2022 |
Profit for the period | 60 | 339 |
Other comprehensive income for the period | 3 | 2 |
Total comprehensive income for the period | 63 | 341 |
Share of non-controlling interests | 6 | 31 |
Non-current assets | 3,449 | 3,100 |
Current assets | 712 | 1,034 |
Non-current liabilities | 121 | 29 |
Current liabilities | 188 | 176 |
Net assets | 3,852 | 3,929 |
Share of non-controlling interests | 347 | 354 |
UPM FINANCIAL REPORT 2023 | 100 |
EURm | 2023 | 2022 |
Dividends received | 2 | 3 |
Purchases of raw materials and services | 37 | 57 |
Loan receivables | 5 | 5 |
Trade and other receivables | — | 1 |
Trade and other payables | 5 | 7 |
EURm | 2023 |
Other intangible assets | 2 |
Property, plant and equipment | 21 |
Leased assets | 1 |
Other non-current financial assets | 5 |
Deferred tax assets | 13 |
Non-current assets | 41 |
Inventories | 7 |
Trade and other receivables | 15 |
Other current financial assets | 4 |
Cash and cash equivalents | 39 |
Current assets | 65 |
Assets classified as held for sale | 106 |
Net retirement benefit liabilities | 36 |
Provisions | 1 |
Non-current debt | 2 |
Non-current liabilities | 39 |
Trade and other payables | 17 |
Current liabilities | 17 |
Liabilities classified as held for sale | 56 |
Accounting policies |
UPM FINANCIAL REPORT 2023 | 101 |
EURm | 2023 | 2022 |
On behalf of others | ||
Guarantees | — | 2 |
Other own commitments | ||
Leasing commitments for the next 12 months in accordance with IFRS 16 | 2 | 2 |
Other commitments | 99 | 219 |
Total | 101 | 223 |
UPM FINANCIAL REPORT 2023 | 102 |
EURm | NOTE | 2023 | 2022 |
Sales | 1 | 2,585 | 2,414 |
Change in inventories of finished goods and work in progress | 10 | 15 | |
Production for own use | 1 | 2 | |
Other operating income | 2 | 103 | 81 |
Materials and services | |||
Raw materials and consumables purchased | -1,935 | -1,449 | |
Change in inventories | -43 | -98 | |
External charges | -8 | -6 | |
-1,987 | -1,553 | ||
Personnel expenses | |||
Salaries and fees | -198 | -194 | |
Indirect employee costs | |||
Pension costs | -36 | 95 | |
Other indirect employee costs | -7 | -7 | |
3 | -241 | -106 | |
Depreciation, amortisation and impairment charges | |||
Depreciation and amortisation | -112 | -117 | |
4 | -112 | -117 | |
Other operating expenses | 5 | -349 | -289 |
Operating profit (loss) | 10 | 446 | |
Financial income and expenses | |||
Income from non-current assets | |||
Dividend income from group companies | 738 | 293 | |
Interest income from group companies | 5 | 16 | |
Other interest and financial income | |||
Other interest income from group companies | 150 | 63 | |
Other interest income from other companies | 30 | 6 | |
Other financial income from group companies | 1 | 77 | |
Other financial income from other companies | 974 | 0 | |
Impairment charges and reversals on investments | 9 | -62 | |
Interest and other financial expenses | |||
Interest expenses to group companies | -133 | -35 | |
Interest expenses to other companies | -93 | -43 | |
Other financial expenses to group companies | -32 | -3 | |
Other financial expenses to other companies | -17 | -858 | |
1,632 | -547 | ||
Profit (loss) before closing entries and tax | 1,642 | -101 | |
Closing entries | |||
Depreciation difference | 31 | 19 | |
Group contributions received | 37 | 0 | |
Group contributions granted | -37 | -24 | |
31 | -5 | ||
Income taxes | 6 | 1 | -84 |
Profit (Loss) for the period | 1,675 | -190 |
UPM FINANCIAL REPORT 2023 | 103 |
EURm | NOTE | 2023 | 2022 |
ASSETS | |||
Non-current assets | |||
Intangible assets | |||
Intangible rights | 5 | 5 | |
Other intangible assets | 27 | 32 | |
Advance payments | 26 | 22 | |
7 | 58 | 60 | |
Tangible assets | |||
Land and water areas | 748 | 746 | |
Buildings | 166 | 178 | |
Machinery and equipment | 414 | 453 | |
Other tangible assets | 18 | 19 | |
Advance payments and construction in progress | 26 | 21 | |
8 | 1,372 | 1,418 | |
Investments | |||
Holdings in group companies | 6,587 | 5,834 | |
Holdings in participating interest companies | 5 | 5 | |
Other shares and holdings | 3 | 3 | |
Receivables from group companies | 993 | 930 | |
Receivables from participating interest companies | 3 | 3 | |
9 | 7,590 | 6,774 | |
Total non-current assets | 9,019 | 8,252 | |
Current assets | |||
Inventories | |||
Raw materials and consumables | 229 | 272 | |
Finished products and goods | 43 | 33 | |
Advance payments | 30 | 32 | |
302 | 337 | ||
Receivables | |||
Current receivables | |||
Trade receivables | 37 | 57 | |
Receivables from group companies | 1,786 | 2,581 | |
Receivables from participating interest companies | 13 | 17 | |
Other current receivables | 182 | 490 | |
Prepayments and accrued income | 12 | 23 | |
10 | 2,029 | 3,167 | |
Other current financial assets | 1 | 1 | |
Cash and cash equivalents | 500 | 1,840 | |
Total current assets | 2,832 | 5,345 | |
Assets | 11,852 | 13,598 |
UPM FINANCIAL REPORT 2023 | 104 |
EURm | NOTE | 2023 | 2022 |
EQUITY AND LIABILITIES | |||
Equity | |||
Share capital | 890 | 890 | |
Revaluation reserve | 140 | 140 | |
Reserve for invested non-restricted equity | 1,273 | 1,273 | |
Retained earnings | 342 | 1,333 | |
Profit (Loss) for the period | 1,675 | -190 | |
Total equity | 11 | 4,319 | 3,445 |
Accumulated depreciation difference | 367 | 398 | |
Provisions | |||
Termination provisions | 1 | 2 | |
Other provisions | 166 | 297 | |
12 | 167 | 299 | |
LIABILITIES | |||
Non-current liabilities | |||
Bonds | 2,089 | 2,102 | |
Loans from financial institutions | 185 | 1,578 | |
Payables to group companies | 285 | 160 | |
Other non-current liabilities | 134 | 149 | |
13 | 2,693 | 3,988 | |
Current liabilities | |||
Loans from financial institutions | 15 | 0 | |
Advances received | 0 | 1 | |
Trade payables | 341 | 454 | |
Payables to group companies | 3,654 | 4,334 | |
Payables to participating interest companies | 6 | 3 | |
Other current liabilities | 201 | 573 | |
Accrued expenses and deferred income | 88 | 103 | |
14 | 4,305 | 5,467 | |
Total liabilities | 6,998 | 9,455 | |
Equity and liabilities | 11,852 | 13,598 |
UPM FINANCIAL REPORT 2023 | 105 |
EURm | 2023 | 2022 |
Cash flows from operating activities | ||
Profit before closing entries and tax | 1,642 | -101 |
Financial income and expenses | -1,632 | 547 |
Adjustments to operating profit 1) | 48 | 231 |
Change in working capital 2) | 983 | -1,156 |
Interest received | 185 | 87 |
Interest paid | -228 | -69 |
Dividends received | 738 | 293 |
Other financial items | 861 | -758 |
Income taxes paid 3) | 8 | -84 |
Operating cash flow | 2,605 | -1,010 |
Cash flows from investing activities | ||
Investments in tangible and intangible assets | -69 | -79 |
Investments in shares and holdings | -812 | -1,285 |
Proceeds from sale of intangible and tangible assets | 12 | 17 |
Proceeds from disposal of shares and holdings | 68 | 1 |
Change in other non-current receivables | -63 | -143 |
Investing cash flow | -865 | -1,490 |
Cash flows from financing activities | ||
Proceeds from non-current liabilities | 325 | 4,493 |
Payments of non-current liabilities | -1,578 | -2,627 |
Change in current liabilities | -1,004 | 1,794 |
Dividends paid | -800 | -693 |
Group contributions, net | -24 | -19 |
Other items | -1 | 97 |
Financing cash flow | -3,081 | 3,044 |
Cash and cash equivalents at beginning of period | 1,840 | 1,296 |
Change in cash and cash equivalents | -1,340 | 545 |
Cash and cash equivalents at end of period | 500 | 1,840 |
EURm | 2023 | 2022 |
Depreciation, amortisation and impairment charges | 113 | 181 |
Capital gains and losses on sale of non-current assets | -14 | -13 |
Change in provisions | -51 | 63 |
Total | 48 | 231 |
EURm | 2023 | 2022 |
Inventories | 34 | -121 |
Current receivables | 1,133 | -1,143 |
Current non-interest-bearing liabilities | -184 | 108 |
Total | 983 | -1,156 |
UPM FINANCIAL REPORT 2023 | 106 |
Accounting policies |
Land and water areas, no depreciation | |
Intangible assets | 5–10 years |
Buildings | 20–50 years |
Light machinery and equipment | 5–10 years |
Heavy machinery | 15–20 years |
Power plants | 20–30 years |
Other tangible assets | 5–20 years |
UPM FINANCIAL REPORT 2023 | 107 |
EURm | 2023 | 2022 |
UPM Fibres | 2,075 | 1,973 |
Other operations | 509 | 440 |
Total | 2,585 | 2,414 |
EURm | 2023 | 2022 |
Finland | 2,515 | 2,342 |
Other EU countries | 45 | 46 |
Other countries | 24 | 26 |
Total | 2,585 | 2,414 |
EURm | 2023 | 2022 |
Gains on sale of non-current assets | 5 | 13 |
Rental income | 6 | 9 |
Other | 92 | 59 |
Total | 103 | 81 |
EURm | 2023 | 2022 |
Salaries and fees of the President and CEO, and members of the Board of Directors 1) | 7 | 7 |
Other salaries and fees | 191 | 187 |
Pension costs 2) | 36 | -95 |
Other indirect employee costs | 7 | 7 |
Total | 241 | 106 |
2023 | 2022 | |
Total average | 2,932 | 2,765 |
EURm | 2023 | 2022 |
Intangible rights | 2 | 2 |
Other intangible assets | 13 | 13 |
Buildings | 16 | 17 |
Machinery and equipment | 79 | 82 |
Other tangible assets | 3 | 3 |
Total | 112 | 117 |
EURm | 2023 | 2022 |
Rents and lease expenses | 15 | 13 |
Maintenance expenses | 146 | 118 |
Other operating expenses 1) | 188 | 159 |
Total | 349 | 289 |
EURm | 2023 | 2022 |
Tax expense for the period | 9 | 74 |
Tax expense for the previous periods | -10 | 10 |
Total | -1 | 84 |
EURm | 2023 | 2022 |
Deferred tax assets | ||
Provisions | 33 | 58 |
Share-based payments | 2 | 3 |
Other temporary differences | 24 | 176 |
Total | 60 | 236 |
Deferred tax liabilities | ||
Accumulated depreciation difference | 73 | 80 |
Revaluations of land areas | 60 | 60 |
Total | 133 | 139 |
UPM FINANCIAL REPORT 2023 | 108 |
EURm | INTANGIBLE RIGHTS | OTHER INTANGIBLE ASSETS | ADVANCE PAYMENTS | TOTAL |
2023 | ||||
Accumulated costs | 22 | 300 | 26 | 348 |
Accumulated amortisation and impairments | -18 | -273 | — | -291 |
Carrying value, at 31 December | 5 | 27 | 26 | 58 |
Carrying value, at 1 January | 5 | 32 | 22 | 60 |
Additions | 2 | 8 | 8 | 18 |
Disposals | — | -5 | — | -5 |
Amortisation | -2 | -13 | — | -15 |
Reclassifications | — | 4 | -4 | — |
Carrying value, at 31 December | 5 | 27 | 26 | 58 |
2022 | ||||
Accumulated costs | 22 | 293 | 22 | 337 |
Accumulated amortisation and impairments | -18 | -260 | — | -278 |
Carrying value, at 31 December | 5 | 32 | 22 | 60 |
Carrying value, at 1 January | 5 | 46 | 11 | 62 |
Additions | 2 | — | 12 | 13 |
Amortisation | -2 | -13 | — | -16 |
Carrying value, at 31 December | 5 | 32 | 22 | 60 |
EURm | LAND AND WATER AREAS | BUILDINGS | MACHINERY AND EQUIPMENT | OTHER TANGIBLE ASSETS | ADVANCE PAYMENTS AND CONSTRUCTION IN PROGRESS | TOTAL |
2023 | ||||||
Accumulated costs | 450 | 574 | 2,268 | 138 | 26 | 3,456 |
Accumulated depreciation and impairments | — | -408 | -1,854 | -120 | — | -2,382 |
Revaluations | 298 | — | — | — | — | 298 |
Carrying value, at 31 December | 748 | 166 | 414 | 18 | 26 | 1,372 |
Carrying value, at 1 January | 746 | 178 | 453 | 19 | 21 | 1,418 |
Additions | 2 | 1 | 24 | 2 | 23 | 52 |
Disposals | — | — | — | — | — | -1 |
Depreciations | — | -16 | -79 | -3 | — | -97 |
Reclassifications | — | 2 | 15 | — | -17 | — |
Carrying value, at 31 December | 748 | 166 | 414 | 18 | 26 | 1,372 |
2022 | ||||||
Accumulated costs | 449 | 570 | 2,230 | 139 | 21 | 3,409 |
Accumulated depreciation and impairments | — | -392 | -1,777 | -120 | — | -2,289 |
Revaluations | 298 | — | — | — | — | 298 |
Carrying value, at 31 December | 746 | 178 | 453 | 19 | 21 | 1,418 |
Carrying value, at 1 January | 718 | 196 | 514 | 21 | 13 | 1,462 |
Additions | 33 | — | 13 | — | 18 | 66 |
Disposals | -3 | -2 | -1 | — | — | -6 |
Depreciations | — | -17 | -82 | -3 | — | -102 |
Reclassifications | — | 1 | 9 | — | -10 | — |
Changes in revaluations | -2 | — | — | — | — | -2 |
Carrying value, at 31 December | 746 | 178 | 453 | 19 | 21 | 1,418 |
UPM FINANCIAL REPORT 2023 | 109 |
EURm | HOLDINGS IN GROUP COMPANIES | HOLDINGS IN PARTICIPATING INTEREST COMPANIES | OTHER SHARES AND HOLDINGS | RECEIVABLES FROM GROUP COMPANIES | RECEIVABLES FROM PARTICIPATING INTEREST COMPANIES | TOTAL |
2023 | ||||||
Accumulated costs | 8,054 | 5 | 3 | 993 | 3 | 9,057 |
Accumulated value adjustments | -1,467 | — | — | — | — | -1,467 |
Carrying value, at 31 December | 6,587 | 5 | 3 | 993 | 3 | 7,590 |
Carrying value, at 1 January | 5,834 | 5 | 3 | 930 | 3 | 6,774 |
Additions | 812 | — | — | 164 | — | 976 |
Disposals | -68 | — | — | -102 | — | -169 |
Value adjustments 1) | 9 | — | — | — | — | 9 |
Carrying value, at 31 December | 6,587 | 5 | 3 | 993 | 3 | 7,590 |
2022 | ||||||
Accumulated costs | 7,310 | 5 | 3 | 930 | 3 | 8,251 |
Accumulated value adjustments | -1,476 | — | — | — | — | -1,476 |
Carrying value, at 31 December | 5,834 | 5 | 3 | 930 | 3 | 6,774 |
Carrying value, at 1 January | 4,610 | 5 | 3 | 786 | 3 | 5,408 |
Additions | 1,285 | — | — | 332 | — | 1,617 |
Disposals | — | — | — | -188 | — | -188 |
Value adjustments 1) | -62 | — | — | — | — | -62 |
Carrying value, at 31 December | 5,834 | 5 | 3 | 930 | 3 | 6,774 |
EURm | RECEIVABLES FROM GROUP COMPANIES | RECEIVABLES FROM PARTICIPATING INTEREST COMPANIES | RECEIVABLES FROM OTHERS | TOTAL |
2023 | ||||
Trade receivables | 478 | 13 | 37 | 528 |
Loan receivables 1) | 1,269 | — | — | 1,269 |
Prepayments and accrued income 2) | 3 | — | 12 | 14 |
Other current receivables | 37 | — | 182 | 219 |
Carrying value, at 31 December | 1,786 | 13 | 231 | 2,029 |
2022 | ||||
Trade receivables | 783 | 17 | 57 | 857 |
Loan receivables 1) | 1,795 | — | — | 1,795 |
Prepayments and accrued income 2) | 2 | — | 23 | 25 |
Other current receivables | — | — | 490 | 490 |
Carrying value, at 31 December | 2,581 | 17 | 570 | 3,167 |
UPM FINANCIAL REPORT 2023 | 110 |
EURm | 2023 | 2022 |
Interest income | 9 | 10 |
Income taxes | 2 | 10 |
Other items | 3 | 5 |
Carrying value, at 31 December | 14 | 25 |
EURm | SHARE CAPITAL | REVALUATION RESERVE | RESERVE FOR INVESTED NON- RESTRICTED EQUITY | RETAINED EARNINGS | PROFIT/LOSS FOR THE PERIOD | TOTAL SHARE- HOLDER’S EQUITY |
2023 | ||||||
Carrying value, at 1 January | 890 | 140 | 1,273 | 1,333 | -190 | 3,445 |
Transfer of profit from previous year | — | — | — | -190 | 190 | — |
Profit for period | — | — | — | — | 1,675 | 1,675 |
Dividend distribution | — | — | — | -800 | — | -800 |
Other changes | — | — | — | -1 | — | -1 |
Carrying value, at 31 December | 890 | 140 | 1,273 | 342 | 1,675 | 4,319 |
2022 | ||||||
Carrying value, at 1 January | 890 | 141 | 1,273 | 1,557 | 469 | 4,330 |
Transfer of profit from previous year | — | — | — | 469 | -469 | — |
Profit for period | — | — | — | — | -190 | -190 |
Dividend distribution | — | — | — | -693 | — | -693 |
Changes in revaluations | — | -2 | — | — | — | -2 |
Other changes | — | — | — | -1 | — | -1 |
Carrying value, at 31 December | 890 | 140 | 1,273 | 1,333 | -190 | 3,445 |
EURm | 2023 | 2022 |
Distributable funds | ||
Reserve for invested non-restricted equity | 1,273 | 1,273 |
Retained earnings from previous years | 342 | 1,333 |
Profit (Loss) for the period | 1,675 | -190 |
Total distributable funds at 31 December | 3,290 | 2,416 |
UPM FINANCIAL REPORT 2023 | 111 |
EURm | RESTRUCTURING | TERMINATION | ENVIRONMENTAL | OTHER 1) | TOTAL |
2023 | |||||
Provisions at 1 January | 3 | 2 | 8 | 286 | 299 |
Provisions made during the year | — | — | 1 | — | 1 |
Provisions utilised during the year | — | — | — | -129 | -130 |
Unused provisions reversed | — | -1 | — | -2 | -3 |
Carrying value, at 31 December | 2 | 1 | 9 | 155 | 167 |
2022 | |||||
Provisions at 1 January | 3 | 3 | 9 | 137 | 152 |
Provisions made during the year | — | — | 2 | 149 | 151 |
Provisions utilised during the year | — | — | — | -1 | -1 |
Unused provisions reversed | — | — | -2 | — | -3 |
Carrying value, at 31 December | 3 | 2 | 8 | 286 | 299 |
EURm | 2023 | 2022 |
Bonds | 2,089 | 2,102 |
Loans from financial institutions | 185 | 1,578 |
Payables to group companies | 285 | 160 |
Other non-current liabilities | 134 | 149 |
Carrying value, at 31 December | 2,693 | 3,988 |
EURm | 2023 | 2022 |
Bonds | 1,000 | 1,750 |
Loans from financial institutions | 62 | 92 |
Other non-current liabilities | 134 | 149 |
Total | 1,196 | 1,992 |
FIXED RATE PERIOD | INTEREST RATE, % | CURRENCY | NOMINAL VALUE ISSUED, MILLION | CARRYING VALUE | CARRYING VALUE |
2023 | 2022 | ||||
EURm | EURm | ||||
1997–2027 | 7.450 | USD | 375 | 339 | 352 |
2020–2028 | 0.125 | EUR | 750 | 750 | 750 |
2021–2031 | 0.500 | EUR | 500 | 500 | 500 |
2022–2029 | 2.250 | EUR | 500 | 500 | 500 |
Carrying value, at 31 December | 2,089 | 2,102 | |||
Non-current portion | 2,089 | 2,102 |
UPM FINANCIAL REPORT 2023 | 112 |
EURm | PAYABLES TO GROUP COMPANIES | PAYABLES TO PARTICIPATING INTEREST COMPANIES | PAYABLES TO OTHERS | TOTAL |
2023 | ||||
Loans from financial institutions | — | — | 15 | 15 |
Trade payables | 104 | 6 | 341 | 451 |
Accrued expenses and deferred income 1) | 1 | — | 88 | 88 |
Other current liabilities | 3,549 | — | 201 | 3,750 |
Carrying value, at 31 December | 3,654 | 6 | 645 | 4,305 |
2022 | ||||
Advances received | — | — | 1 | 1 |
Trade payables | 137 | 3 | 454 | 594 |
Accrued expenses and deferred income 1) | 1 | — | 103 | 104 |
Other current liabilities | 4,196 | — | 573 | 4,769 |
Carrying value, at 31 December | 4,334 | 3 | 1,130 | 5,467 |
EURm | 2023 | 2022 |
Personnel expenses | 73 | 84 |
Interest expenses | 15 | 17 |
Other items | 1 | 3 |
Carrying value, at 31 December | 88 | 104 |
EURm | 2023 | 2022 |
Guarantees | ||
Other guarantees on behalf of group companies | 25 | 28 |
Other commitments | ||
Leasing commitments, due within 12 months | 24 | 18 |
Leasing commitments, due after 12 months | 115 | 89 |
Other commitments | 47 | 51 |
Total | 212 | 187 |
SUBSIDIARIES | COUNTRY OF INCORPORATION | HOLDING % |
Myllykoski Oyj | FI | 100.00 |
Repola Investment Oy | FI | 100.00 |
Suurijärven Huolto Oy | FI | 65.44 |
Unicarta Oy | FI | 100.00 |
UPM (Vietnam) Limited | VN | 100.00 |
UPM AG | CH | 100.00 |
UPM Asia Pacific Pte. Ltd. | SG | 100.00 |
UPM B.V. | NL | 100.00 |
UPM Biochemicals GmbH | DE | 100.00 |
UPM FINANCIAL REPORT 2023 | 113 |
SUBSIDIARIES | COUNTRY OF INCORPORATION | HOLDING % |
UPM Communication Papers Oy | FI | 100.00 |
UPM Energy Oy | FI | 100.00 |
UPM Kft. | HU | 100.00 |
UPM Manufatura e Comércio de Produtos Florestais Ltda. | BR | 100.00 |
UPM NV | BE | 100.00 |
UPM OÜ | EE | 100.00 |
UPM Plywood Oy | FI | 100.00 |
UPM Pulp Oy | FI | 100.00 |
UPM Pulp Sales Oy | FI | 100.00 |
UPM Raflatac Canada Holdings Inc. | CA | 100.00 |
UPM Raflatac NZ Limited | NZ | 100.00 |
UPM Raflatac Oy | FI | 100.00 |
UPM Raflatac S.r.l. | AR | 27.80 |
UPM Romania S.R.L | RO | 100.00 |
UPM Silvesta Oy | FI | 100.00 |
UPM Specialty Papers Oy | FI | 100.00 |
UPM Wood Materials (UK) Ltd | UK | 100.00 |
UPM Wood Materials Austria GmbH | AT | 100.00 |
UPM-Kymmene (HK) Ltd. | CN/HK | 100.00 |
UPM-Kymmene (Korea) Ltd | KR | 100.00 |
UPM-Kymmene (UK) Holdings Limited | UK | 100.00 |
UPM-Kymmene A/S | DK | 100.00 |
UPM-Kymmene AB | SE | 100.00 |
UPM-Kymmene B.V. | NL | 100.00 |
UPM-Kymmene Beteiligungs GmbH | DE | 100.00 |
UPM-Kymmene d.o.o. | SI | 100.00 |
UPM-Kymmene Groupe S.A. | FR | 100.00 |
UPM-Kymmene Grundstücksverwaltung GmbH | DE | 100.00 |
UPM-Kymmene Hellas Ltd | GR | 100.00 |
UPM-Kymmene India Private Limited | IN | 100.00 |
UPM-Kymmene Investment Inc. | US | 100.00 |
UPM-Kymmene Japan K.K. | JP | 100.00 |
UPM-Kymmene Pty Limited | AU | 100.00 |
UPM-Kymmene S.A. | ES | 100.00 |
UPM-Kymmene S.r.l. | IT | 100.00 |
UPM-Kymmene s.r.o. | CZ | 100.00 |
UPM-Kymmene Seven Seas Oy | FI | 100.00 |
UPM-Kymmene Slovakia s.r.o. | SK | 100.00 |
Werla Insurance Company Ltd | MT | 100.00 |
PARTICIPATING INTEREST COMPANIES | COUNTRY OF INCORPORATION | HOLDING % |
Kiinteistö Oy Joutsan Rantatie 3 | FI | 25.43 |
Metsäteho Oy | FI | 23.95 |
Oy Keskuslaboratorio - Centrallaboratorium Ab | FI | 38.65 |
Perkaus Oy | FI | 33.33 |
Rönnäsin Kiinteistöhuolto Oy | FI | 28.41 |
Steveco Oy | FI | 34.32 |
UPM FINANCIAL REPORT 2023 | 114 |
EURm | 2023 | 2022 |
Sales | 11 | 40 |
Other operating income | 6 | 2 |
Materials and services | ||
Raw materials and consumables purchased | -16 | -10 |
-16 | -10 | |
Personnel expenses | ||
Salaries and fees | — | — |
Indirect employee costs | ||
Pension costs | — | — |
Other indirect employee costs | — | — |
— | — | |
Depreciation, amortisation and impairment charges | ||
Depreciation and amortisation | -1 | -1 |
Other operating expenses | -2 | -1 |
Operating profit (loss) | -3 | 29 |
Profit (loss) before closing entries and tax | -3 | 29 |
Closing entries | ||
Depreciation difference | 1 | 1 |
Income taxes | — | -6 |
Profit (Loss) for the period | -2 | 24 |
UPM FINANCIAL REPORT 2023 | 115 |
EURm | 2023 | 2022 |
ASSETS | ||
Non-current assets | ||
Tangible assets | ||
Machinery and equipment | 5 | 6 |
Total non-current assets | 5 | 6 |
Current assets | ||
Receivables | ||
Current receivables | ||
Trade receivables | 1 | 8 |
1 | 8 | |
Cash and cash equivalents | 21 | 25 |
Total current assets | 23 | 33 |
Assets | 28 | 40 |
EURm | 2023 | 2022 |
EQUITY AND LIABILITIES | ||
Equity | ||
Retained earnings | 26 | 3 |
Profit (Loss) for the period | -2 | 24 |
Total equity | 24 | 26 |
Accumulated depreciation difference | 3 | 4 |
LIABILITIES | ||
Current liabilities | ||
Trade payables | — | 1 |
Other current liabilities | 1 | 8 |
Total liabilities | 1 | 9 |
Equity and liabilities | 28 | 40 |
UPM FINANCIAL REPORT 2023 | 116 |
Opinion |
Basis for Opinion |
Our Audit Approach |
• Overall group materiality: € 65 million, which represents approximately 5 % of the the average profit before tax for the last three years. | |
• The group audit scope encompassed all significant group companies, as well as a number of smaller group companies in Europe, Asia, North America and South America covering the vast majority of revenue, assets and liabilities. | |
• Valuation of forest assets • Valuation of energy shareholdings |
UPM FINANCIAL REPORT 2023 | 117 |
Overall group materiality | € 65 million (previous year € 95 million) |
How we determined it | Approximately 5% of the profit before tax for the last three years. |
Rationale for the materiality benchmark applied | We chose profit before taxes as the benchmark because, in our view, it is the benchmark against which the performance of the Group is commonly measured by users, and is a generally accepted benchmark. We chose approximately 5%, which is within the range of acceptable quantitative materiality thresholds in auditing standards. |
Key Audit Matters |
Key audit matter in the audit of the group | How our audit addressed the key audit matter |
Valuation of forest assets Refer to note 4.2. in the consolidated financial statements for the related disclosures. The group owns and leases a total of 1 073 thousand hectares of forests and plantations in Finland, the United States and Uruguay. The value of the forest assets, i.e. standing trees, amount to € 2 355 million at 31 December 2023. Forest assets are measured at fair value less cost to sell. The fair value is calculated on the basis of discounted future expected cash flows. Young saplings and land are valued at cost. Main factors used in the valuation are estimates for growth and wood harvested, stumpage prices and discount rates. We focused on this area as the amounts are material, the valuation process is complex and judgmental and is based on assumptions that are affected by expected future market or economic conditions. |
UPM FINANCIAL REPORT 2023 | 118 |
Valuation of energy shareholdings Refer to note 4.3. in the consolidated financial statements for the related disclosures. The energy shareholdings amounted to € 2 283 million at 31 December 2023. The energy shareholdings are unlisted equity investments in energy companies and are valued at fair value through other comprehensive income, net of tax if applicable. The fair value is determined on a discounted cash flow basis. The main factors impacting the future cash flows include future electricity prices, price trends, and discount rates. We focused on this area as the amounts are material, the valuation process is complex and judgmental and is based on assumptions that are affected by expected future market or economic conditions. | In testing the valuation of the energy shareholdings, in conjunction with our valuation specialists we: – Assessed the methodology adopted by management for the valuation; – Tested the mathematical accuracy of the model used for valuation; – Assessed the discount rate applied in the valuation; – Assessed the future electricity prices and price trends; – Validated key inputs and data used in valuation model such as production costs and volumes, UPM’s ownership percentages, inflation, tax rate and net debt. |
We have no key audit matters to report with respect to our audit of the parent company financial statements. | |
There are no significant risks of material misstatement referred to in Article 10(2c) of Regulation (EU) No 537/2014 with respect to the consolidated financial statements or the parent company financial statements. |
Responsibilities of the Board of Directors and the Managing Director for the Financial Statements |
Auditor’s Responsibilities for the Audit of the Financial Statements |
UPM FINANCIAL REPORT 2023 | 119 |
Appointment |
Other Information |
Other Statements |
UPM FINANCIAL REPORT 2023 | 120 |
ALTERNATIVE PERFORMANCE MEASURE | DEFINITION |
Operating profit | Profit before income tax expense, finance expenses and finance income and net gains on sale of energy shareholdings as presented on the face of the IFRS income statement. Gains on sale of energy shareholdings are not recorded to the income statement from 2018 onwards. |
Comparable EBIT | Operating profit adjusted for items affecting comparability. |
Comparable EBITDA | Operating profit before depreciation, amortisation and impairments, change in fair value of forest assets and wood harvested, share of results of associates and joint ventures and items affecting comparability. |
Comparable profit before tax | Profit before income tax expense excluding items affecting comparability. |
Comparable profit for the period | Profit for the period excluding items affecting comparability and their tax impact. |
Comparable EPS, EUR | Earnings per share calculated in accordance with IFRS excluding items affecting comparability and their tax impact. |
Net debt | Total of current and non-current debt less cash and cash equivalents and interest-bearing current and non-current financial assets. |
Items affecting comparability | Certain non-operational or non-cash valuation transactions with significant income statement impact are considered as items affecting comparability, if they arise from asset impairments, restructuring measures, asset sales, fair value changes of forest assets resulting from changes in valuation parameters or estimates or changes in legislation or legal proceedings. In addition, the changes in fair value of unrealised cash flow and commodity hedges are classified as items affecting comparability. Numerical threshold for items to be considered as significant in UPM’s business areas UPM Fibres, UPM Specialty Papers and UPM Communication Papers is determined as one cent (EUR 0.01) after tax per share or more. In other business areas, the impact is considered to be significant if the item exceeds EUR 1 million before tax. |
Free cash flow | Cash generated from operations after cash used for investing activities. |
Return on equity (ROE), % | Profit for the period as a percentage of average equity. |
Comparable ROE, % | Return on equity (ROE) excluding items affecting comparability. |
Return on capital employed (ROCE), % | Profit before taxes, interest expenses and other financial expenses as a percentage of average capital employed. |
Comparable ROCE, % | Return on capital employed (ROCE) excluding items affecting comparability. |
Capital employed | Group total equity and total debt. |
Business area’s comparable ROCE, % | Business area’s operating profit adjusted for items affecting comparability as a percentage of business area’s average capital employed. |
Business area’s capital employed | Business area’s operating assets less its operating liabilities. Operating assets include goodwill, other intangible assets, property, plant and equipment, forest assets, energy shareholdings, investments in associates and joint-ventures, inventories and trade receivables. Operating liabilities include trade payables and advances received. |
Capital expenditure | Capitalised investments in property, plant and equipment, intangible assets including goodwill arising from business combinations, energy shareholdings and other shares, associates and joint ventures. |
Capital expenditure excluding acquisitions and shares | Capital expenditure excluding investments in shares and participations. |
Operating cash flow per share, EUR | Operating cash flow divided by adjusted average number of shares during the period excluding treasury shares. |
Gearing ratio, % | Net debt as a percentage of total equity |
Net debt to EBITDA | Net debt divided by comparable EBITDA |
Equity to assets ratio, % | Equity expressed as a percentage of total assets less advances received. |
UPM FINANCIAL REPORT 2023 | 121 |
EURm, OR AS INDICATED | Q4/23 | Q3/23 | Q2/23 | Q1/23 | Q4/22 | Q3/22 | Q2/22 | Q1/22 | Q1– Q4/23 | Q1– Q4/22 |
Items affecting comparability | ||||||||||
Impairment charges | -1 | -113 | -2 | -1 | 5 | 7 | 4 | -95 | -117 | -80 |
Restructuring charges | -15 | -132 | -15 | -37 | -15 | -6 | 5 | 0 | -199 | -15 |
Change in fair value of unrealised cash flow and commodity hedges | -10 | -5 | 8 | 5 | 14 | 3 | -4 | 0 | -2 | 13 |
Capital gains and losses on sale of non-current assets | 0 | 2 | 3 | -6 | 13 | 2 | 18 | 1 | 0 | 34 |
Fair value changes of forest assets | -86 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -86 | 0 |
Other non-operational items | 0 | 0 | 0 | 0 | 5 | -5 | -74 | 0 | 0 | -74 |
Total items affecting comparability in operating profit | -113 | -249 | -5 | -38 | 22 | 2 | -52 | -94 | -405 | -122 |
Items affecting comparability in financial items | 0 | 1 | 1 | -67 | 0 | 0 | 0 | 0 | -65 | 0 |
Items affecting comparability in taxes | 26 | 71 | 4 | 8 | -8 | -9 | 15 | 1 | 109 | -1 |
Items affecting comparability, total | -87 | -177 | 0 | -97 | 14 | -7 | -37 | -93 | -361 | -122 |
Comparable EBITDA | ||||||||||
Operating profit (loss) | 211 | -29 | 108 | 318 | 675 | 781 | 335 | 183 | 608 | 1,974 |
Depreciation, amortisation and impairment charges excluding items affecting comparability | 152 | 152 | 125 | 114 | 119 | 114 | 113 | 111 | 543 | 457 |
Change in fair value of forest assets and wood harvested excluding items affecting comparability | -10 | 5 | 16 | 5 | -12 | 3 | 8 | -12 | 17 | -12 |
Share of result of associates and joint ventures | 0 | 0 | 0 | 1 | -1 | -2 | -2 | 1 | 1 | -4 |
Items affecting comparability in operating profit | 113 | 249 | 5 | 38 | -22 | -2 | 52 | 94 | 405 | 122 |
Comparable EBITDA | 465 | 376 | 255 | 477 | 759 | 894 | 506 | 377 | 1,573 | 2,536 |
% of sales | 18.4 | 14.6 | 10.0 | 17.1 | 23.5 | 26.1 | 19.7 | 15.0 | 15.0 | 21.6 |
Comparable EBIT | ||||||||||
Operating profit (loss) | 211 | -29 | 108 | 318 | 675 | 781 | 335 | 183 | 608 | 1,974 |
Items affecting comparability in operating profit | 113 | 249 | 5 | 38 | -22 | -2 | 52 | 94 | 405 | 122 |
Comparable EBIT | 323 | 220 | 114 | 356 | 653 | 779 | 387 | 277 | 1,013 | 2,096 |
% of sales | 12.8 | 8.5 | 4.5 | 12.8 | 20.2 | 22.8 | 15.1 | 11.0 | 9.7 | 17.9 |
Comparable profit before tax | ||||||||||
Profit (loss) before tax | 180 | -52 | 96 | 239 | 638 | 766 | 361 | 179 | 464 | 1,944 |
Items affecting comparability in operating profit | 113 | 249 | 5 | 38 | -22 | -2 | 52 | 94 | 405 | 122 |
Items affecting comparability in financial items | 0 | -1 | -1 | 67 | — | — | — | — | 65 | — |
Comparable profit before tax | 293 | 196 | 101 | 344 | 616 | 764 | 413 | 273 | 934 | 2,066 |
Comparable ROCE, % | ||||||||||
Comparable profit before tax | 293 | 196 | 101 | 344 | 616 | 764 | 413 | 273 | 934 | 2,066 |
Interest expenses and other financial expenses | 40 | 33 | 22 | 17 | 34 | 20 | 9 | 21 | 112 | 85 |
333 | 229 | 123 | 361 | 651 | 784 | 422 | 294 | 1,046 | 2,151 | |
Capital employed, average | 15,044 | 15,246 | 15,900 | 17,196 | 17,983 | 16,845 | 14,738 | 13,799 | 16,414 | 15,836 |
Comparable ROCE, % | 8.9 | 6.0 | 3.1 | 8.4 | 14.5 | 18.6 | 11.5 | 8.5 | 6.4 | 13.6 |
Comparable profit for the period | ||||||||||
Profit (loss) for the period | 161 | -28 | 77 | 183 | 503 | 622 | 292 | 139 | 394 | 1,556 |
Items affecting comparability, total | 87 | 177 | — | 97 | -14 | 7 | 37 | 93 | 361 | 122 |
Comparable profit for the period | 248 | 149 | 77 | 281 | 489 | 629 | 329 | 232 | 755 | 1,679 |
Comparable EPS, EUR | ||||||||||
Comparable profit for the period | 248 | 149 | 77 | 281 | 489 | 629 | 329 | 232 | 755 | 1,679 |
Profit attributable to non-controlling interest | -1 | 2 | 1 | -7 | -5 | -11 | -9 | -5 | -6 | -31 |
246 | 151 | 78 | 273 | 484 | 618 | 320 | 226 | 749 | 1,648 | |
Average number of shares basic (1,000) | 533,324 | 533,324 | 533,324 | 533,324 | 533,324 | 533,324 | 533,324 | 533,324 | 533,324 | 533,324 |
Comparable EPS, EUR | 0.46 | 0.28 | 0.15 | 0.51 | 0.91 | 1.16 | 0.60 | 0.42 | 1.40 | 3.09 |
Comparable profit for the period | 248 | 149 | 77 | 281 | 489 | 629 | 329 | 232 | 755 | 1,679 |
Total equity, average | 11,670 | 11,751 | 12,290 | 12,883 | 12,589 | 11,799 | 11,167 | 11,071 | 12,205 | 11,992 |
Comparable ROE, % | 8.5 | 5.1 | 2.5 | 8.7 | 15.5 | 21.3 | 11.8 | 8.4 | 6.2 | 14.0 |
UPM FINANCIAL REPORT 2023 | 122 |
EURm, OR AS INDICATED | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 |
Income statement | ||||||||||
Sales | 10,460 | 11,720 | 9,814 | 8,580 | 10,238 | 10,483 | 10,010 | 9,812 | 10,138 | 9,868 |
Comparable EBITDA | 1,573 | 2,536 | 1,821 | 1,442 | 1,851 | 1,868 | 1,677 | 1,560 | 1,350 | 1,306 |
% of sales | 15.0 | 21.6 | 18.6 | 16.8 | 18.1 | 17.8 | 16.8 | 15.9 | 13.3 | 13.2 |
Operating profit | 608 | 1,974 | 1,562 | 761 | 1,344 | 1,895 | 1,259 | 1,135 | 1,142 | 674 |
% of sales | 5.8 | 16.8 | 15.9 | 8.9 | 13.1 | 18.1 | 12.6 | 11.6 | 11.3 | 6.8 |
Comparable EBIT | 1,013 | 2,096 | 1,471 | 948 | 1,404 | 1,513 | 1,292 | 1,143 | 916 | 866 |
% of sales | 9.7 | 17.9 | 15.0 | 11.1 | 13.7 | 14.4 | 12.9 | 11.6 | 9.0 | 8.8 |
Profit before tax | 464 | 1,944 | 1,548 | 737 | 1,307 | 1,839 | 1,186 | 1,080 | 1,075 | 667 |
% of sales | 4.4 | 16.6 | 15.8 | 8.6 | 12.8 | 17.5 | 11.9 | 11.0 | 10.6 | 6.8 |
Comparable profit before tax | 934 | 2,066 | 1,457 | 924 | 1,367 | 1,457 | 1,218 | 1,089 | 849 | 793 |
% of sales | 8.9 | 17.6 | 14.8 | 10.8 | 13.4 | 13.9 | 12.2 | 11.1 | 8.4 | 8.0 |
Profit for the period | 394 | 1,556 | 1,307 | 568 | 1,073 | 1,496 | 974 | 880 | 916 | 512 |
% of sales | 3.8 | 13.3 | 13.3 | 6.6 | 10.5 | 14.3 | 9.7 | 9.0 | 9.0 | 5.2 |
Comparable profit for the period | 755 | 1,679 | 1,204 | 737 | 1,119 | 1,194 | 1,004 | 879 | 734 | 638 |
% of sales | 7.2 | 14.3 | 12.3 | 8.6 | 10.9 | 11.4 | 10.0 | 9.0 | 7.2 | 6.5 |
Balance sheet | ||||||||||
Non-current assets | 13,913 | 14,977 | 12,420 | 10,149 | 10,140 | 9,501 | 9,144 | 9,715 | 10,259 | 10,269 |
Inventories | 1,948 | 2,289 | 1,594 | 1,285 | 1,367 | 1,642 | 1,311 | 1,346 | 1,376 | 1,356 |
Other current assets | 2,612 | 4,941 | 3,662 | 3,424 | 3,215 | 2,853 | 2,612 | 2,850 | 2,558 | 2,570 |
Total assets | 18,473 | 22,207 | 17,676 | 14,858 | 14,722 | 13,996 | 13,067 | 13,911 | 14,193 | 14,195 |
Total equity | 11,531 | 12,879 | 11,106 | 9,513 | 10,175 | 9,797 | 8,663 | 8,237 | 7,944 | 7,480 |
Non-current liabilities | 4,501 | 5,807 | 4,102 | 3,606 | 2,730 | 2,194 | 2,254 | 3,364 | 4,328 | 4,717 |
Current liabilities | 2,441 | 3,522 | 2,468 | 1,740 | 1,818 | 2,005 | 2,150 | 2,309 | 1,921 | 1,998 |
Total equity and liabilities | 18,473 | 22,207 | 17,676 | 14,858 | 14,722 | 13,996 | 13,067 | 13,911 | 14,193 | 14,195 |
Capital employed at year end | 14,916 | 17,913 | 13,759 | 11,555 | 11,474 | 10,575 | 9,777 | 10,657 | 11,010 | 10,944 |
Capital expenditure | 1,122 | 1,555 | 1,483 | 903 | 378 | 303 | 329 | 325 | 520 | 411 |
% of sales | 10.7 | 13.3 | 15.1 | 10.5 | 3.7 | 2.9 | 3.3 | 3.3 | 5.1 | 4.2 |
Capital expenditure excluding acquisitions and shares | 1,094 | 1,399 | 1,477 | 902 | 378 | 303 | 303 | 325 | 486 | 375 |
% of sales | 10.5 | 11.9 | 15.1 | 10.5 | 3.7 | 2.9 | 3.0 | 3.3 | 4.8 | 3.8 |
Cash flow and net debt | ||||||||||
Operating cash flow | 2,269 | 508 | 1,250 | 1,005 | 1,847 | 1,330 | 1,460 | 1,686 | 1,185 | 1,241 |
Free cash flow | 1,193 | -1,077 | -74 | 126 | 1,432 | 1,131 | 1,336 | 1,424 | 750 | 994 |
Net debt | 2,432 | 2,374 | 647 | 56 | -453 | -311 | 174 | 1,131 | 2,100 | 2,401 |
Key figures | ||||||||||
Return on capital employed (ROCE), % | 3.5 | 12.8 | 12.4 | 6.7 | 12.3 | 18.4 | 12.5 | 10.5 | 10.3 | 6.5 |
Comparable ROCE, % | 6.4 | 13.6 | 11.7 | 8.3 | 12.8 | 14.6 | 12.8 | 10.6 | 8.3 | 7.6 |
Return on equity (ROE), % | 3.2 | 13.0 | 12.7 | 5.8 | 10.7 | 16.2 | 11.5 | 10.9 | 11.9 | 6.9 |
Comparable ROE, % | 6.2 | 14.0 | 11.7 | 7.5 | 11.2 | 12.9 | 11.9 | 10.9 | 9.5 | 8.5 |
Gearing ratio, % | 21 | 18 | 6 | 1 | -4 | -3 | 2 | 14 | 26 | 32 |
Net debt to EBITDA | 1.55 | 0.94 | 0.35 | 0.04 | -0.24 | -0.17 | 0.10 | 0.73 | 1.56 | 1.84 |
Equity to assets ratio, % | 62.5 | 58.1 | 62.9 | 64.1 | 69.2 | 70.1 | 66.6 | 59.4 | 56.1 | 52.7 |
Personnel | ||||||||||
Personnel at year end | 16,573 | 17,236 | 16,966 | 18,014 | 18,742 | 18,978 | 19,111 | 19,310 | 19,578 | 20,414 |
Deliveries | ||||||||||
Pulp (1,000 t) | 4,139 | 2,761 | 3,724 | 3,664 | 3,715 | 3,468 | 3,595 | 3,419 | 3,224 | 3,287 |
Electricity (GWh) | 12,059 | 9,442 | 9,300 | 9,168 | 8,619 | 8,608 | 8,127 | 8,782 | 8,966 | 8,721 |
Papers, total (1,000 t) | 4,935 | 6,135 | 7,486 | 7,062 | 8,326 | 8,996 | 9,430 | 9,613 | 9,771 | 10,028 |
Plywood (1,000 m3) | 429 | 616 | 738 | 683 | 739 | 791 | 811 | 764 | 740 | 731 |
Sawn timber (1,000 m3) | 1,524 | 1,538 | 1,610 | 1,604 | 1,741 | 1,719 | 1,728 | 1,751 | 1,731 | 1,609 |
UPM FINANCIAL REPORT 2023 | 123 |