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UPM Annual Report 2015
UPM Annual Report 2015
107
108
contents
accounts
IN BRIEF
STRATEGY
BUSINESSES
STAKEHOLDERS
GOVERNANCE
ACCOUNTS
Geographical information
External sales by destination
Year ended 31 December
EURm
2015 2014
Germany
1,658 1,694
Finland
900
980
United Kingdom
916
919
France
421
414
Other EU countries
2,103 2,052
Other European countries
436
508
United States
1,253 1,006
Canada
57
50
China
852
637
Uruguay
61
41
Rest of world
1,481 1,567
Total
10,138 9,868
Total assets by country
As at 31 December
EURm
2015 2014
Germany
1,148 1,222
Finland
8,524 8,753
United Kingdom
211
250
France
63
67
Other EU countries
325
335
Other European countries
71
79
United States
491
464
Canada
–
11
China
1,037
913
Uruguay
2,004 1,790
Rest of world
319
311
Total
14,193 14,195
Capital expenditure by country
Year ended 31 December
EURm
2015 2014
Germany
20
59
Finland
218
236
United Kingdom
8
9
France
2
2
Poland
6
11
Other European countries
18
2
United States
5
5
China
215
77
Uruguay
26
8
Rest of world
2
2
Total
520
411
5 Acquisitions and disposals and notes
to the cash flow statement
Acquisitions
In 2015 and 2014, no acquisitions were made.
Disposals
In 2015, UPM sold 100% of its shares of Tilhill Forestry Ltd to BSW
Timber Ltd in the United Kingdom. The following table summarises the
amount of assets and liabilities related to disposal during 2015. In
2014, UPM had minor company disposals.
EURm
2015
Inventories
5
Trade and other receivables
24
Cash and cash equivalents
3
Provisions (Note 30)
–2
Trade and other payables
–22
Net assets
8
Gain on disposals
3
Total consideration
11
Settled in cash and cash equivalents
11
Cash in subsidiaries disposed
–3
Net cash arising from disposals
8
Notes to the consolidated cash flow statement
Adjustments
Year ended 31 December
EURm
2015 2014
Change in fair value of biological assets and
wood harvested
–352
–78
Share of results of associated companies and
joint ventures
–3
–3
Depreciation, amortisation and impairment charges
524
658
Capital gains on sale of non-current assets, net
–18 –117
Finance costs, net
67
66
Taxes
159
155
Change in restructuring provisions
–62
14
Other adjustments
134
84
Total
449
779
Change in working capital
Year ended 31 December
EURm
2015 2014
Inventories
15
18
Current receivables
–30
59
Current non-interest-bearing liabilities
7
–4
Total
–8
73
According to the consolidated cash flow statement the total amount of
taxes paid in 2015 amounted to EUR 143 million (81 million), of
which taxes of EUR 140 million (81 million) are included in operating
activities and EUR 3 million in investing activities.
6 Other operating income
Year ended 31 December
EURm
2015 2014
Gains on sale of non-current assets
20
62
Rental income, investment property
4
4
Rental income, other
11
11
Emission rights received (Note 7)
22
27
Derivatives held for trading
–78
–53
Exchange rate gains and losses
18
23
Other
16
17
Total
13
91
7 Costs and expenses
Year ended 31 December
EURm
2015 2014
Change in inventories of finished goods and
work in progress
21
–12
Production for own use
–5
–6
Materials and services
Raw materials, consumables and goods
5,675 5,559
Derivatives designated as cash flow hedges
93
47
External services and charges
1)
856
913
6,624 6,519
Personnel expenses
Salaries and fees
967 1,020
Share-based payments
(Note 37)
16
10
Indirect employee costs
Pension costs, defined benefit plans (Note 29)
33
16
Pension costs, defined contribution plans
117
116
Other post-employment benefits (Note 29)
–1
2
Other indirect employee costs
2)
125 126
274 260
Other operating costs and expenses
Rents and lease expenses
51
52
Emission expenses (Note 6)
14
15
Losses on sale of non-current assets
2
4
Other operating expenses
3)
876 846
943
917
Costs and expenses, total
8,840 8,708
1)
External services and charges mainly comprise delivery costs of products sold.
2)
Other indirect employee expenses primarily include other statutory social
expenses, excluding pension expenses.
3)
Other operating expenses include, among others, energy and maintenance
expenses as well as expenses relating to services and the Group’s administration.
The research and development costs included in costs and expenses
were EUR 37 million (35 million).
Government grants
In 2015, the Group recognised government grants of EUR 0 million
(3 million) as reduction of non-current assets. Government grants rec-
ognised as deduction of costs and expenses totalled to EUR 6 million
(7 million) in 2015. In addition, the Group received emission rights
from governments, Note 17.
Remuneration paid to members of the Board of
Directors and the Group Executive Team
The Annual General Meeting 2015 resolved that the annual fee to the
Board Chairman is EUR 175,000, to the Board Deputy Chairman and
Chairman of the Audit Committee EUR 120,000 and to other members
of the Board EUR 95,000. Of the annual fee, 60% was paid in cash to
cover withholding tax and 40% in company shares purchased on the
Board members’ behalf. The company was to pay any costs and trans-
fer tax related to the purchase of the shares. No annual fee was paid
to the President and CEO for his role as a member of the Board.
In 2015, 4,193 (5,595) company shares were paid to the Chair-
man, 2,875 (3,836) shares to the Deputy Chairman and the Chairman
of the Audit Committee respectively and 2,276 (3,037) shares to each
of the other members of the Board.
Shareholdings (no. of shares) and fees of the Board of Directors
Shareholdings
Fees (EUR 1,000)
31 Dec. 2015
1)
2015 2014
Board members
Björn Wahlroos, Chairman
254,442
175 175
Berndt Brunow, Deputy Chairman
303,578
120 120
Henrik Ehrnrooth
2,276
95
–
Piia-Noora Kauppi
11,856
120 120
Wendy E. Lane
32,925
95
95
Ari Puheloinen
4,301
95
63
Veli-Matti Reinikkala
36,097
95
95
Suzanne Thoma
2,276
95
–
Kim Wahl
14,075
95
95
Jussi Pesonen, President and CEO
220,275
–
–
Former Board members
Matti Alahuhta
–
–
95
Total
882,101
985 858
1)
The above shareholdings include shares held by the Board members' closely as-
sociated persons and controlled entities.
Salaries, fees and other benefits of the Group Executive Team
Year ended 31 December
EUR
1,000
2015 2014
President and CEO Jussi Pesonen
Salaries and benefits
Salary
1,052 1,052
Incentives
856
627
Share rewards
824
–
Benefits
27
27
Total
2,759 1,706
In 2015, costs under the Finnish statutory pension scheme for the
President and CEO amounted to EUR 353,000 (303,000) and pay-
ments under the voluntary pension plan were EUR 1,000,000
(682,000). In 2015, no premium was paid into the President and
CEO´s voluntary group pension plan to cover past service pension
liabilities (premium of EUR 268,000 was paid in 2014).
Year ended 31 December
EUR
1,000
2015 2014
Group Executive Team (excluding the President and
CEO)
1)
Salaries and benefits
Salaries
3,455 3,457
Incentives
1,733
869
Share rewards
1,805
–
Benefits
238
249
Total
7,231 4,575
1)
11 members in 2015 and in 2014.
In 2015, costs under the Finnish and German statutory pension
schemes for Group Executive Team members (excluding the President
and CEO) amounted to EUR 900,000 (752,000) and payments under
the voluntary pension plan were EUR 651,000 (686,000).
The total remuneration of the President and CEO and the members of
the Group Executive Team consists of base salary and benefits, short-
term incentives, share-based long-term incentives and pension benefits.
The short-term incentive plan for the President and CEO and the
members of the Group Executive Team has been linked with achieve-
ment of the predetermined financial targets of the Group or Business
Areas and individual targets. The incentives amount to a total maxi-
mum of 100% of annual base salary to the Business Area Executives
and to a total maximum of 70% of annual base salary to the other
members of the Group Executive Team. For the President and CEO the
maximum annual incentive amounts to 150% of the annual base sal-
ary.
The expenses recognised in income statement in respect of share-
based payments for the Group Executive Team were EUR 5.4 million
(2.8 million).