UPM Annual Report 2016
Accounts
In brief
Strategy
Businesses
Stakeholders
Governance
10.2 Alternative performance measures
Reconciliation of key figures to IFRS EURm, OR AS INDICATED
Q4/16 Q3/16 Q2/16 Q1/16 Q4/15 Q3/15 Q2/15 Q1/15 Q1-Q4/16 Q1-Q4/15
UPM presents certain performance measures of historical performance, financial position and cash flows, which in accordance with the “Alternative Performance Measures” guidance issued by the European Securities and Markets Authority (ESMA) are not accounting measures defined or specified in IFRS and are therefore considered as alternative performance measures. These alternative performance measures are described below:
Items affecting comparability Impairment charges
–24 –31
– –
1 –12
–
–1
1
–
–35 –48
–
Restructuring charges
–
–18
–2
4
–6
–1
–5
Change in fair value of unrealised cash flow and commodity hedges Capital gains and losses on sale of non-current assets Fair value changes of forest assets resulting from changes in estimates Total items affecting comparability in operating profit Total items affecting comparability in financial items Other non-operational items
2
3
–3
25 –22
2
8
–6
27
–18
2
47
–
–
–
3
3
–
49
6
– –
– –
– –
– –
–
265
–
– –
– –
265 –22
–3
–
–19
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.
–51
50
–2
–4 –27 273 –13
–7
–7
226
– 4
–2
– – – –
– – 6 6
– –
– –
– – 3 3
– – 2 2
–2
– –
Comparable EBIT
Operating profit adjusted for items affecting comparability.
Changes in tax rates
–
4 7
Taxes relating to items affecting comparability
14 –14 18 –14
5 –54 5 –54
–44 –44 182
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.
Items affecting comparability in taxes Items affecting comparability, total
11
–33
34
–2
2 –22 219 –10
–5
1
Comparable profit before tax
Profit before income tax expense excluding items affecting comparability.
Comparable EBITDA Operating profit
Comparable profit for the period
Profit for the period excluding items affecting comparability and their tax impact.
232 364 262 277 220 513 206 203
1,135
1,142
Depreciation, amortisation and impairment charges excluding items affecting comparability Change in fair value of forest assets and wood harvested excluding items affecting comparability Share of results of associates and joint ventures Items affecting comparability in operating profit
Comparable EPS, EUR
Earnings per share calculated in accordance with IFRS excluding items affecting comparability and their tax impact. Total of current and non-current debt less cash and cash equivalents and interest-bearing current and non-current financial assets. 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 Biorefining, UPM Specialty Papers and UPM Paper ENA 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.
120 118 134 138 132 131 130 131
510
524
Net debt
–53
–7 –11 –16 –16 –24 –31 –16
–88
–87
–1
–2
–2
– 4
–
–2
–1 13
– 7
–5
–3
Items affecting comparability
51 –50
2
27 –273
7
–226
Comparable EBITDA
349 423 385 403 363 345 317 325 1,560 1,350
% of sales
14.1 17.3 15.8 16.5 14.1 13.6 12.4 13.1
15.9
13.3
Comparable EBIT Operating profit
232 364 262 277 220 513 206 203
1,135
1,142 –226
Items affecting comparability in operating profit
51 –50
2
4
27 –273
13
7
7
Comparable EBIT
283 314 264 281 247 240 219 210
1,143
916
% of sales
11.4 12.8 10.8 11.5
9.6
9.5
8.6
8.4
11.6
9.0
Free cash flow
Cash generated from operations after cash used for investing activities.
Comparable profit before tax Profit before tax
Return on equity (ROE), %
Profit for the period as a percentage of average equity.
231 336 250 263 214 498 182 181 1,080 1,075
Comparable ROE, %
Return on equity (ROE) excluding items affecting comparability.
Items affecting comparability in operating profit Items affecting comparability in financial items
51 –50
2 –
4 –
27 –273
13
7 –
7 2
–226
–
2
–
–
–
–
Return on capital employed (ROCE), %
Profit before taxes, interest expenses and other financial expenses as a percentage of average capital employed.
Comparable profit before tax
282 288 252 267 241 225 195 188 1,089
849
Comparable ROCE, % Comparable profit before tax
Comparable ROCE, %
Return on capital employed (ROCE) excluding items affecting comparability.
282 288 252 267 241 225 195 188 1,089
849
Interest expenses and other financial expenses
17
13
15
10
13
12
20
12
55
57
Capital employed
Group total equity and total debt.
300 301 266 277 254 237 215 200
1,144
906
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 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 employed, average
10,560 10,433 11,701 11,005 11,079 11,080 11,059 11,025 10,833 10,977
Comparable ROCE, %
11.4 11.5 10.0 10.1
9.2
8.6
7.8
7.3
10.6
8.3
Business area’s capital employed
Comparable profit for the period Profit for the period Items affecting comparability, total Comparable profit for the period Comparable EPS, EUR Comparable profit for the period
187 268 198 227 193 408 160 155
880
916
33 –34
2
–2
22 –219
10
5
–1
–182
220 234 200 225 215 189 170 160
879
734
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.
220 234 200 225 215 189 170 160
879
734
Profit attributable to non-controlling interest
–
–
–1
–
–
–
–
–
–1
–
Capital expenditure excluding acquisitions and shares
Capital expenditure excluding investments in shares and participations.
220 234 199 225 215 189 170 160 533,505 533,505 533,505 533,505 533,505 533,505 533,505 533,505 0.41 0.44 0.37 0.42 0.41 0.35 0.32 0.30
878
734
Average number of shares basic (1,000)
533,505 533,505
Comparable EPS, EUR
1.65
1.38
Operating cash flow per share, EUR
Operating cash flow divided by adjusted average number of shares during the period excluding treasury shares.
Comparable ROE, % Comparable profit for the period
220 234 200 225 215 189 170 160
879
734
Gearing ratio, %
Net debt as a percentage of total equity
Profit attributable to non-controlling interest
–
–
–1
–
–
–
–
–
–1
–
Net debt to EBITDA
Net debt divided by EBITDA
220 234 199 225 215 189 170 160 8,054 7,767 7,819 7,959 7,944 7,788 7,718 7,642 8,091 878
734
Total equity, average Comparable ROE, %
7,712
Equity to assets ratio, %
Equity expressed as a percentage of total assets less advances received.
10.9 12.1 10.2 11.3 10.8
9.7
8.8
8.4
10.9
9.5
Quarterly key figures are unaudited
CONTENTS
ACCOUNTS
148
149
UPM Annual Report 2016
UPM Annual Report 2016
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