UPM Annual Report 2016

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UPM Annual Report 2016 UPM Annual Report 2016 4 5
Strategy Businesses Stakeholders Governance Accounts
Responsibility
performance
In brief
The UPM Code of Conduct lays the
foundation for responsible business
operations and continuous improvement.
Transparent supplier requirements
form the basis of responsible sourcing
throughout the entire supply chain.
Engaged, high-performing people
implement the Biofore strategy and
drive short- and long-term success.
Forest certification is an excellent tool
for promoting sustainable forestry.
Ecolabels help customers and
consumers to make responsible
choices and promote transparency.
Ensuring a safe working environment
and safeguarding for employees and
everyone working for UPM.
Global businesses – local presence
12,000
customers
in 120 countries
Financial performance
Focused investments
Net debt/EBITDA
0.73x
UPM’s sales by market 2016
EUR 9,812 million
54
production plants
in 12 countries
19,300
employees
in 45 countries
85,000
shareholders
in 40 countries
55,000
suppliers
in 70 countries
Read more:
Top performance
Comparable EBIT
EUR 1,143m
+25%
Comparable ROE
10.9%
+1.4pp
Capital expenditure
EUR 325m
Attractive returns
reached 80% of
the EUR 200m
EBITDA target set
for the first wave
of growth projects
Net debt reduction
EUR 969m, –46%
% of active employees completed
Code of Conduct training 97%
+6pp
Employee
engagement 69%
+3pp
Share of certified
wood 84%
+0pp
LTA frequency
3.7
–6%
Share of ecolabelled
products 69%
–1pp
EVENTS IN 2016
UPM Kaukas pulp mill
investment completed
19 JANUARY UPM joined a group
of the world's top 50 sustainability
leaders in the Global Compact
LEAD forum
21 JANUARY UPM ranked 25th on
the list of the 100 most sustainable
corporations in the world
2 FEBRUARY UPM Board of
Directors approved revised
Code of Conduct
8 FEBRUARY Winfried Schaur
appointed Executive Vice
President, UPM Paper ENA
23 MARCH
UPM Biochemicals
established an
innovation unit at
the Biomedicum
research and
educational centre
in Helsinki, Finland
18 APRIL UPM Biofuels gained
ISCC PLUS certification for bio-
based applications
21 MAY Paper
production ceased
at Madison Paper
Industries in the US
22 JUNE Antti Jääskeläinen
appointed Executive Vice
President, UPM Raflatac
1 JULY Sale of Schwedt
paper mill
Change of corporate
structure in Finland
4 JULY UPM Kymi pulp mill
investment announced
13 JULY Discussions with the
Government of Uruguay on
the development of logistics
infrastructure
A new machine unit at the Harjavalta
hydropower plant brought into use
8 SEPTEMBER UPM as industry leader
in the Dow Jones Sustainability Europe
Index
15 SEPTEMBER UPM Paper ENA’s
organisational structure renewed
1 OCTOBER UPM Raflatac’s new
global operating model
UPM Paper Asia renamed as
UPM Specialty Papers
3 NOVEMBER UPM Paper
ENA’s plan to reduce 305,000
tonnes of graphic paper
capacity in Europe
01 02 03 04 05 06 07 09 10 11 12 08
Supplier Code qualified
supplier spend 80%
+1pp
Start-up of UPM Otepää plywood mill
expansion and the new biomass boiler
11 OCTOBER UPM Raflatac to build
a new coating line at the label stock
factory in Wroclaw, Poland
25 OCTOBER UPM received
acknowledgement from CDP for its
climate actions
15 NOVEMBER UPM Biofuels
joined below50 sustainable fuels
coalition for low-carbon world
6%
Rest of the world
13%
North
America
18%
Asia
63%
Europe
Industry-leading
balance sheet
Strong cash flow
Operating cash flow
EUR 1,686m
+42%
Attractive dividend
Dividend (proposal)
EUR 507m
+27%
5/6
business areas
achieved their
financial targets
CONTENTS