UPM Annual Report 2020
Change in net debt 2020
Free cash flow Free cash flow is primarily a liquidity measure. It is an important indicator of UPM’s overall operational performance as it reflects the cash generated from operations after investing activities.
Free cash flow
Reported in financing activities in cash flow statement
NON-CURRENT LOANS INCL. REPAYMENTS
NET DERIVATI VES
OTHER FINANCIAL ASSETS
CASH AND CASH EQUIVALENTS NET DEBT
1,500
LEASE LIABILITIES
CURRENT LOANS
EURm
1,200
Carrying value, at 1 January Change in net debt, cash Proceeds from non-current debt Payments of non-current debt
EURm
2020 2019
708
586
2
-159
-54
-1,536
-453
1,005
1,847
Operating cash flow Investing cash flow
900
-879 126 -693
-415
861
— —
— — — — — — — — — — — — — -2 -2
— — — — — — — —
— — — — — —
— — — — — — — — — — — — — — 13 13
861
Free cash flow
1,432
-31
-31 -86
600
EURm
-693
— — — — — —
-86
Dividends paid to owners of the parent company Dividends paid to non-controlling interests Contributions paid by non-controlling interests Transaction costs and discounts in operating cash flow Change in other financial assets in operating cash flow Change in other financial assets in investing cash flow Other financing cash flow
Lease repayments
300
-23 67
—
— — — — — —
-2
Change in current liabilities Net cash flows from derivatives
21 -39
-17
-17 -10 -47
0
-4
-10
Transaction costs and discounts in operating cash flow Change in other financial assets in operating cash flow Change in other financial assets in investing cash flow
16 17 18 19 20
-47
10
—
3
3
—
-197 -197
-197 473
Change in cash and cash equivalents
47
-6
820
-86
-17
-44
-3
-5
Change in net debt, non-cash New contracts and subsequent additions
Change in net debt, cash Change in net debt, non-cash Impact of adoption of IFRS 16
473
-711
1
64
— —
— — — — — — — —
65
36
78
—
5
5
Lease liability reassessments Fair value gains and losses Exchange gains and losses Effective interest rate adjustment
—
491 -142 -311 -453
4
—
15
20 -46
Change in net debt Opening net debt Closing net debt
509 -453
-35
-25
— — — —
1
— — —
1
56
-3 -8
3
—
Reclassification between non-current and current loans Liabilities related to assets classified as held for sale
—
-8
-39
44
3 2
15
36 56
Bonds
Carrying value, at 31 December
1,489
544
-161
-97
-1,720
NOMINAL VALUE ISSUED, MILLION
CARRYING VALUE 2020 EURm
CARRYING VALUE 2019 EURm
INTEREST RATE, %
Change in net debt 2019
FIXED RATE PERIOD
CURRENCY
Reported in financing activities in cash flow statement
1997–2027 2020–2028
7.450 0.125
USD EUR
375 750
411 741
431
NON-CURRENT LOANS INCL. REPAYMENTS
NET DERIVATI VES
OTHER FINANCIAL ASSETS
CASH AND CASH EQUIVALENTS NET DEBT
—
LEASE LIABILITIES
CURRENT LOANS
Value, at 31 December
1,153
431
EURm
Current portion
—
—
Carrying value, at 1 January Change in net debt, cash Proceeds from non-current debt Payments of non-current debt
669
588
9
-135
-64
-888
179
Non-current portion
1,153
431
13
— —
— — — — — — — — — — — — -7 -7
— — — — — — — 11 11
— — — — —
— — — — — — —
13
-6
-6
Leases Leases of property, plant and equipment where UPM, as a lessee, obtains substantially all of the economic benefits from the use of the identified asset and where UPM has the right to direct the use of the identified asset, are classified as leases. Approximately 33 % (30%) of leased assets recognised on the balance sheet consists of land areas in Uruguay, which the group uses for eucalyptus plantations. Approximately 34% (32%) of the leased assets on the balance sheet consist of five power plants. UPM uses the energy generated by these plants for its own production. In addition, the group has leased one waste water treatment plant as well as several warehouses, terminals, offices, railcars and vessels. UPM also leases some production machinery and equipment like forklifts and vehicles that are insignificant to the total leased assets portfolio.
— — — — — —
-82
-82
Lease repayments
In 2020, the total cash outflow for leased assets was EUR 86 (82) million. The expenses related to short-term leases recognised in the income statement in 2020 amounted to EUR 7 (9) million. The group had no significant variable lease payments in 2020. The lease commitments for leases not commenced at year-end 31 December 2020 totals approximately EUR 412 million, which are mostly related to long-term charter agreements, railway service agreement in Uruguay and service agreements related to wood handling, waste water treatment and other utilities in Leuna, Germany. Such lease commitments in 2019 amounted to approximately EUR 100 million.
— — — — —
-7
Change in current liabilities Net cash flows from derivatives
11
6 5
6 5
Change in other financial assets in operating cash flow Change in other financial assets in investing cash flow
—
-649 -649
-649 -710
Change in cash and cash equivalents
7
-82
10
Change in net debt, non-cash New contracts and subsequent additions
—
76
—
— —
— —
76 -15 17
20 12
—
-35
Fair value gains and losses Exchange gains and losses Effective interest rate adjustment
5
— —
-1
1
1
—
—
—
1
32
81
-35
-1
1
78
Carrying value, at 31 December
708
586
2
-159
-54
-1,536
-453
182
UPM ANNUAL REPORT 2020 UPM FINANCIAL REPORT 2020 67 183
UPM ANNUAL REPORT 2020
UPM FINANCIAL REPORT 2020 66
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