UPM annual report 2015

IN BRIEF

STRATEGY

BUSINESSES

STAKEHOLDERS

GOVERNANCE

ACCOUNTS

Segment information for the year ended 31 December 2015

Segment information for the year ended 31 December 2014

UPM Paper Asia

UPM Paper ENA

Eliminations and reconci- liations 8)

UPM Paper Asia

UPM Paper ENA

Eliminations and reconci- liations 8)

UPM Biorefining

UPM Energy

UPM Raflatac

UPM Plywood

Other operations

UPM Biorefining

UPM Energy

UPM Raflatac

UPM Plywood

Other operations

Group

EURm

Group

EURm

External sales Internal sales Total sales 1)

1,374

251 1,248

939 5,216

415

442

–17

9,868

External sales Internal sales Total sales 1)

1,668

237 1,409

962 5,036

418

403

5

10,138

563

213

–

185

68

25

5

–1,059 –1,076

–

604

178

–

206

20

21

3

–1,032 –1,027

–

1,937

464 1,248 1,124 5,284

440

447

9,868

2,272

415 1,409 1,168 5,056

439

406

10,138

Share of results of associates and joint ventures

1

–

–

–

1

–

1

–

3

Share of results of associates and joint ventures

1

–

–

–

1

–

1

–

3

Operating profit

223

202

69

108

–32

44

82

–22

674

Operating profit

466

155

99

55

32

53

306

–24

1,142

Finance costs, net

–7

Finance costs, net

–67

Income taxes

–155

Income taxes

–159

Profit (loss) for the period

512

Profit (loss) for the period

916

6

–

–11

–

–213

–

45 37

–

–173 847

Special items in operating profit 2) Operating profit excluding special items

–1

–26 181

–3

–

8

–2 55

3

–

–21

Special items in operating profit 2) Operating profit excluding special items

217

202

80

108

181

44

–22

467

102

55

24

303

–24

1,163

Assets 3)

3,171 2,826

678 1,008 2,754

284 1,605

–246

12,080

Assets 3)

3,384 2,425

697 1,200 2,637

284 1,720

–218

12,129 2,064 14,193

Unallocated assets

2,115

Unallocated assets

Total assets

14,195

Total assets

Liabilities 4)

170

8

125

86

451

26

188

–191

863

Liabilities 4)

197

12

140

141

435

31

145

–164

937

Unallocated liabilities

5,852 6,715

Unallocated liabilities

5,312 6,249

Total liabilities

Total liabilities

Other items

Other items

Depreciation and amortisation

151

11

32

80

213 136 102

24

11

–2

520 138 411

Depreciation and amortisation

169

11

35

86

190

23

13

–3

524

Impairment charge Capital expenditure 5)

–1

–

3

–

– 8

– 8

–

Impairment charge Capital expenditure 5)

–

–

–

–

–

–

–

– –

–

151

35

24

84

–1

161

35

22

211

57

23

11

520

Capital expenditure, excluding acquisitions and shares Capital employed, 31 December 6)

Capital expenditure, excluding acquisitions and shares Capital employed, 31 December 6)

147

3

24

84

102

8

8

–1

375

159

3

22

211

57

23

11

–

486

3,002 2,818 2,862 2,903

553 530

922 2,303 861 2,511

257 1,417 268 1,445

–328 –117

10,944 11,263

3,187 2,413 3,191 2,716

557 1,059 2,202 581 1,012 2,289

253 1,575 263 1,483

–236 –558

11,010 10,977

Capital employed, average Return on capital employed, excluding special items % 7)

Capital employed, average Return on capital employed, excluding special items % 7)

7.6

7.0

15.1

12.5

7.2

16.4

2.6

–

7.5

14.6

6.7

17.6

5.4

1.0

20.9

20.4 443

–

10.5

Personnel at year end Personnel, average

2,529 2,612

80 2,847 1,652 10,467 2,441 85 2,845 1,663 10,735 2,463

509 559

–111 –110

20,414 20,852

Personnel at year end Personnel, average

2,593 2,640

73 2,894 1,738 9,472 2,469 78 2,891 1,729 10,020 2,504

–104

19,578

491

–107 20,246

1) The Group's sales comprise mainly of product sales.

1) The Group's sales comprise mainly of product sales.

2) In 2014, special income of EUR 5 million in the UPM Biorefining relate to a gain on sale of property, plant and equipment and income of EUR 1 million relate to restructuring measures. In the UPM Raflatac special items of EUR 11 million relate to restructuring charges, including impairments of EUR 3 million. In the UPM Paper ENA special items include write-offs totalling EUR 135 million and restructuring charges totalling EUR 73 million related to planned capacity closures and charges of EUR 5 million related to other restructuring measures, mainly to the closure of the UPM Docelles mill in France, including impairment charges of EUR 1 million. In the Other operations special items relate to a capital gain of EUR 45 million from the sale of forestland in the UK. 3) Segment assets include goodwill, other intangible assets, property, plant and equipment, investment property, biological assets and investments in associated companies and joint ventures, available-for-sale investments, inventories and trade receivables.

2) In 2015, special items of EUR 1 million in the UPM Biorefining relate to increase of pension obligations due to Finnish employee pension reform. In the UPM Energy special items of EUR 7 million relate to restructuring charges regarding PVO Thermal closure and EUR 19 million relate to project expenses of Olkiluoto 4 nuclear power plant. In the UPM Raflatac special items of EUR 3 million mainly relate to net restructuring charges. In the UPM Paper ENA special items include net income of EUR 10 million related to restructurings and special charge of EUR 2 million related to increase of pension obligation due to Finnish employee pension reform. In the UPM Plywood special item of EUR 2 million relates to Lahti estate restructuring charges. In the Other operations special items include capital gains of EUR 3 million from the sale of Tilhill Forestry Ltd shares, capital gains of EUR 3 million from the sale of other assets and EUR 3 million of restructuring charges. 3) Segment assets include goodwill, other intangible assets, property, plant and equipment, investment property, biological assets and investments in associated companies and joint ventures, available-for-sale investments, inventories and trade receivables.

4) Segment liabilities include trade payables and advances received.

4) Segment liabilities include trade payables and advances received.

5) Capital expenditure includes goodwill arising from business combinations, other intangible assets, property, plant and equipment, investment property, and investments in as- sociated companies and joint ventures and other shares.

5) Capital expenditure includes goodwill arising from business combinations, other intangible assets, property, plant and equipment, investment property, and investments in as- sociated companies and joint ventures and other shares.

6) Capital employed is segment assets less segment liabilities. Eliminations and reconciliations include unallocated assets and unallocated non-interest-bearing liabilities.

6) Capital employed is segment assets less segment liabilities. Eliminations and reconciliations include unallocated assets and unallocated non-interest-bearing liabilities.

7) Formulae for calculation of the return on capital employed; for segments: Operating profit excluding special items/Capital employed (average) x 100, for the Group: (Profit before tax + interest expenses and other financial expenses – special items)/(Total equity + interest bearing liabilities (average)) x 100. 8) Eliminations and reconciliations include the elimination of internal sales and internal inventory margin and the consolidation of MPI as a joint operation. In addition the changes in fair value of unrealised cash flow and commodity hedges that are not allocated to segments are included in reconciliations.

7) Formulae for calculation of the return on capital employed; for segments: Operating profit excluding special items/Capital employed (average) x 100, for the Group: (Profit before tax + interest expenses and other financial expenses – special items)/(Total equity + interest bearing liabilities (average)) x 100. 8) Eliminations and reconciliations include the elimination of internal sales and internal inventory margin and the consolidation of MPI as a joint operation. In addition the changes in fair value of unrealised cash flow and commodity hedges that are not allocated to segments are included in reconciliations.

contents

accounts

105

106

UPM Annual Report 2015

UPM Annual Report 2015