UPM annual report 2014

UPM Annual Report 2014

CONTENTS

UPM PAPER ENA

UPM PAPER ASIA

UPM Paper ENA

produces magazine

papers, newsprint and fine papers for a

wide range of end uses in 17 efficient paper

mills in Europe and the United States. The

main customers are publishers, cataloguers,

retailers, printers and distributors. UPM has

a global paper sales network and an effi-

cient logistics system. UPM Paper ENA

focuses on cost leadership and improved

profitability to maximise cash flow.

UPM Plywood

offers plywood and veneer

products, mainly for construction, vehicle

flooring and LNG shipbuilding as well as

other manufacturing industries. UPM is the

leading plywood supplier in Europe, with

production in Finland, Estonia and Russia.

UPM Plywood aims to strengthen its market

position in selected end-use segments and

to increase value and customer-oriented

service offering.

Wood Sourcing and Forestry secures competitive wood and biomass for UPM businesses and manages UPM-

owned forests. In addition, UPM offers a wide range of wood trade and forestry services to forest owners and

forest investors. UPM Biocomposites and UPM Biochemicals business units are also included in Other operations.

UPM Paper Asia

serves growing markets with

labelling materials globally and fine papers

in Asia. The operations consist of the UPM

Changshu paper mill in China and labelling

and packaging materials production lines at

the UPM Tervasaari and UPM Jämsänkoski

mills in Finland. The main customers are

retailers, printers, publishers, distributors and

paper converters. UPM Paper Asia seeks

growth in labelling materials globally and

in high quality office papers in Asia.

UPM PLYWOOD

OTHER

OPERATIONS

UPM’S BUSINESS PORTFOLIO IN FIGURES

VISION

As the frontrunner of the new forest industry

UPM leads the integration of bio and forest industries

into a new, sustainable and innovation-driven future.

Cost leadership, change readiness, engagement and

safety of our people form the foundation of our success.

PURPOSE

We create value from renewable and

recyclable materials by combining

expertise and technologies within

fibre-based, energy-related and

engineered materials businesses.

VALUES

Trust and be trusted

Achieve together

Renew with courage

Sales 2014

EUR 9,868 million

UPM Biorefining 18%

Other operations 4%

UPM Plywood 4%

UPM Paper

ENA 49%

UPM Energy

UPM

Raflatac

11%

UPM Paper

Asia 10%

Unconsolidated

UPM Biorefining 28%

UPM Energy

16%

UPM Plywood 5%

Other operations -2%

UPM Paper

ENA 30%

UPM Raflatac 9%

UPM Paper

Asia 14%

EBITDA 2014 EUR 1,287 million

UPM Biorefining 26%

UPM Energy

25%

Capital employed 2014 EUR 10,944 million

UPM Raflatac 5%

UPM Paper

Asia 8%

UPM Paper

ENA 21%

UPM Plywood 2%

Other operations 13%

UPM integrates bio and forest industries and

builds a sustainable future across six business

areas. Our products are made of renewable

raw materials and are recyclable.

UPM ENERGY

UPM BIOREFINING

UPM Raflatac

manufactures self-adhesive

label materials for product and information

labelling for label printers and brand own-

ers in the food, personal care, pharmaceuti-

cal and retail segments, for example. UPM

Raflatac is the second-largest producer of

self-adhesive label materials worldwide.

UPM Raflatac aims to advance in growth

markets and strengthen its position in film

and specialty labelstock products.

UPM Energy

generates cost competitive low-

emission electricity and operates in physical

and derivatives trading on the Nordic and

Central European energy markets. UPM’s

power generation capacity consists of

hydropower, nuclear power and condensing

power. UPM Energy aims to grow on the

Nordic CO

emission-free energy market.

UPM Biorefining

consists of pulp, timber and

biofuels businesses. UPM has three pulp mills

in Finland and one mill and plantation oper-

ations in Uruguay. UPM operates four saw-

mills in Finland. UPM‘s biorefinery producing

wood-based renewable diesel started up in

early 2015. The main customers are tissue,

specialty paper and board producers in

pulp, fuel distributors in biofuels and con-

struction and joinery industries in timber.

UPM aims to grow as a reliable pulp supplier

and seeks growth in advanced biofuels.

UPM RAFLATAC

UPM – The Biofore Company

KEY PERFORMANCE INDICATORS

In 2014, UPM’s sales totalled EUR 9.9 billion. UPM has production

plants in 13 countries and a global sales network. UPM employs

approximately 20,000 employees worldwide. UPM shares are

listed on the NASDAQ Helsinki stock exchange. At the end of

2014, UPM had approximately 90,000 shareholders.

Lost time accident

frequency

4.4

–18%

Employee

engagement

63%

+3pp

Share of

certified wood

83%

+3pp

Supplier Code qualified

supplier spend

67%

+3pp

Operating profit

EUR 847 million

+24%

Operating cash

flow per share

EUR 2.33

+68%

EPS

EUR 1.17

+29%

ROE

8.3%

+1.9pp

Gearing

32%

–9pp

Share of

ecolabelled products

76%

+1pp

excluding special items