UPM Annual Report 2017

First page Table of contents Previous page 100-101 Next page Last page

Accounts

In brief

Strategy

Businesses

Stakeholders

Governance

Board of Directors and the Group Executive Team

UPM Plywood

Other operations

UPM has one class of shares. Each share entitles the holder to one vote at the Annual General Meeting of UPM. On 31 December 2017, the total number of UPM shares was 533,735,699. Through the issuance authorisation described below, the number of shares may increase to a maximum of 558,735,699. On 31 December 2017, UPM held 411,653 treasury shares, representing approximately 0.08% of the total number of UPM shares and voting rights. There are no specific terms related to the shares except for the redemption clause described below. In 2017, UPM shares worth a total of EUR 8,460 million (6,749 million) were traded on the NASDAQ Helsinki stock exchange. This is estimated to represent approximately two thirds of all trading volumes in UPM shares. The highest listing was EUR 26.69 in December and the lowest was EUR 20.82 in January. The company’s ADSs are traded on the US over-the-counter (OTC) market under a Level 1-sponsored American Depositary Receipt programme. Information on the major shareholders, break-down by shareholders category and size as well as share related indicators are available in section » Information on shares in UPM Annual report 2017. Redemption clause Under § 12 of UPM-Kymmene Corporation’s Articles of Association, a shareholder who, alone or jointly with another shareholder owns 33 1/3 percent or 50 percent or more of all the company’s shares or their associated voting rights shall, at the request of other shareholders, be liable to redeem their shares and any securities that, under the Companies Act, carry the right to such shares, in the manner prescribed in § 12. A resolution of a general meeting of shareholders to amend or delete this redemption clause must be carried by shareholders representing not less than three-quarters of the votes cast and shares represented at the meeting. Authorisations held by the Board of Directors The Annual General Meeting held on 29 March 2017 authorised the Board of Directors to decide on the repurchase of a maximum of 50,000,000 of the Company’s own shares. The authorisation will be valid for 18 months from the date of the AGM resolution. The Annual General Meeting held on 7 April 2016 authorised the Board of Directors to decide on the issuance of new shares, transfer of treasury shares and issuance of special rights entitling to shares in proportion to the shareholders’ existing holdings in the company, or in a directed share issue, deviating from the share holders’ pre-emptive subscription rights. The Board of Directors may also decide on a share issue without payment to the company itself. The aggregate maximum number of new shares that may be issued and treasury shares that may be transferred is 25,000,000, including also the number of shares that can be received on the basis of the special rights. The authorisation will be valid for three years from the date of the AGM resolution. Aside from the above, the Board of Directors has no current authorisation to issue shares, convertible bonds or share options.

At the Annual General Meeting held on 29 March 2017, the number of members of the Board of Directors was confirmed as ten, and all incumbent directors, i.e. Berndt Brunow, Henrik Ehrnrooth, Piia-Noora Kauppi, Wendy E. Lane, Jussi Pesonen, Ari Puheloinen, Veli-Matti Reinikkala, Suzanne Thoma, Kim Wahl and Björn Wahlroos, were re-elected to the Board for a term continuing until the end of the next AGM. At the meeting of the Board of Directors held following the AGM, Björn Wahlroos was re-elected as Chairman, and Berndt Brunow as Deputy Chairman of the Board of Directors. In addition, the Board of Directors elected the chairmen and other members to the Board committees from among its members. No changes took place in the committee compositions. Shares held by the Board of Directors and the Group Executive Team At the end of the year, the members of the Board of Directors including the President and CEO owned a total of 1,055,532 (987,427) UPM-Kymmene Corporation shares. These represent 0.20% (0.19%) of the shares and 0.20% (0.19%) of the voting rights. At the end of the year, President and CEO Jussi Pesonen owned 353,491 shares. At the end of the year, the other members of the Group Executive Team owned a total of 470,657 shares. » Refer Note 3.2 Key management personnel, of the consolidated financial statements 2017 for further information on remuneration and shares held by the members of the Board, the President and CEO and the members of Group Executive Team.

UPM Plywood offers plywood and veneer products, mainly for construction, vehicle flooring and LNG shipbuilding, as well

Other operations include wood sourcing and forestry, UPM Biocomposites and UPM Biochemicals business units and group services.

EURm Comparable EBIT % of sales

EURm Comparable EBIT

90 75 60 45 30 15 0

18 15 12

60 50 40 30 20 10 0

as other manufacturing industries. Production facilities are located in Finland, Estonia and Russia.

9 6 3 0

16 17

2016

2017

2016

Sales, EURm

281

285 –35

Sales, EURm

484

444

Comparable EBITDA, EURm

–5

Comparable EBITDA, EURm

Change in fair value of forest assets and wood harvested, EURm Share of results of associates and joint ventures, EURm Depreciation, amortisation and impairment charges, EURm

% of sales

17.6

18.1

Depreciation, amortisation and impairment charges, EURm

–23

–22

Operating profit, EURm

% of sales

12.8

13.2

–15

–13

Items affecting comparability in operating profit, EURm

Operating profit, EURm

–

Items affecting comparability in operating profit, EURm 1)

Comparable EBIT, EURm

–

% of sales

12.8 267 23.1

13.2 259 22.6

Comparable EBIT, EURm

Capital employed (average), EURm

1,465

1,541

Comparable ROCE, %

Litigation

Comparable ROCE, %

3.5

0.9

Plywood deliveries, 1,000 m 3

811

764

1) In 2016, items affecting comparability relate to restructuring charges.

» Refer Note 9.2 Litigation, of the consolidated financial statements 2017 for information on legal proceedings.

2017 compared with 2016 Comparable EBIT for UPM Plywood increased due to higher delivery volumes and higher sales prices, which more than offset the negative impact of higher costs. Market environment In 2017, the market environment was favourable in Europe, and demand increased from the previous year. Spruce plywood demand growth was driven by increased activity in the building and construction industry. Demand in birch plywood-related industrial applications such as vehicle floors and LNG carrier insulation material was good.

2017 compared with 2016 Comparable EBIT for Other operations increased. The increase in the fair value of forest assets net of wood harvested was EUR 69 million (59 million). The increase in the fair value of forest assets was EUR 132 million (113 million), including gains on forest sales. The cost of wood harvested from UPM forests was EUR 63 million (54 million). In 2017, UPM sold a total of 73,000 (63,113) hectares of forests.

CONTENTS

ACCOUNTS

100

101

UPM Annual Report 2017

Made with FlippingBook HTML5