UPM Annual Report 2021

ACCOUNTS FOR 2021

UPM

BEYOND FOSSILS

STRATEGY

BUSINESSES

RESPONSIBILITY

GOVERNANCE

10. Other notes 10.1 Forthcoming new standards, amendments and accounting policy changes Certain new accounting standard amendments and interpretations have been published that come into effect only after the reporting period started on 1 January 2021. These standards and amendments are not expected to have a material impact on the group in the current or future reporting periods and on foreseeable future transactions and have not been early adopted. Change in the composition of reportable segments The group will change its reportable segments composition by moving the UPM Biofuels business into Other Operations on 1 January 2022. UPM is forming a new business unit by combining UPM Biofuels, UPM Biochemicals, UPM Biomedicals and UPM Biocomposites businesses. The aim is to speed up business growth and to leverage the capabilities and competences across projects efficiently. This unit will inherit the name UPM Biorefining and will be reported as part of Other operations. UPM Pulp and UPM Timber currently reported under UPM Biorefining will be reported as UPM Fibres business area from 1 January 2022. Following the change, Other Operations will include UPM Forest, UPM Biofuels, UPM Biochemicals, UPM Biomedicals and UPM Biocomposites businesses as well as group services. The change will impact KPIs of UPM Biorefining (1.1.2022 UPM Fibres) reportable segment and Other Operations. The comparative periods will be restated according to the new reporting principles. The reporting change has no impact on group financial result or balance sheet.

Parent company accounts (Finnish Accounting Standards, FAS) Income statement

UPM Biorefining (1.1.2022 UPM Fibres)

UPM Biorefining as published

UPM Fibres restated

2021

Sales EURm

2,945 1,016

2,794

Comparable EBITDA, EURm

961

EURm

NOTE

2021 2,554

2020 1,816

% of sales

35

34

Sales

1

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

-9

-9

Change in inventories of finished goods and work in progress

-2

-6

Production for own use Other operating income

2

5

2

2

2

57

44

-191

-173

Materials and services Raw materials and consumables purchased

-1,767

-1,342

Operating profit, EURm

817

781

Change in inventories

16

-6 -6

% of sales

28

28

External charges

-6

Comparable EBIT, EURm

817

781

-1,757

-1,353

% of sales

28

28

Personnel expenses Salaries and fees

Capital employed (average), EURm

4,437

4,277

-211

-196

Comparable ROCE, %

18

18

Indirect employee costs Pension costs

Other operations

-31

-31

Other indirect employee costs

-7

-7

3

-248

-234

As published Restated

2021

Depreciation, amortisation and impairment charges Depreciation and amortisation

-123

-115

Sales EURm

280

483

Impairment charges on non-current assets

-2

-1

Comparable EBITDA, EURm

-19

36

Change in fair value of forest assets and wood harvested, EURm Depreciation, amortisation and impairment charges, EURm

4 5

-124 -180 301

-116 -183

120

120

Other operating expenses

Operating profit

-25

-44

-27

Financial income and expenses Income from non-current assets Dividend income from group companies Interest income from group companies Other interest and financial income Other interest income from group companies Other interest income from other companies Other financial income from other companies Impairment charges on investments Interest and other financial expenses Interest expenses to group companies Interest expenses to other companies Other financial expenses to group companies Other financial expenses to other companies

Operating profit, EURm

75

112

Items affecting comparability in operating profit, EURm

-1

-1

288

348

Comparable EBIT, EURm

76

113

5

5

Capital employed (average), EURm

1,992

2,152

Comparable ROCE, %

4

5

25

43

1 6 0

1

23

1

-10 -10 -20

-8

-21 -20 -69

-5

281 581

302 275

Profit before closing entries and tax

Closing entries Depreciation difference

22 -19

1

Group contributions granted

-19 -18

3

Income taxes

6

-115 469

-8

Profit for the period

249

208

UPM FINANCIAL REPORT 2021 209 UPM ANNUAL REPORT 2021 209

UPM ANNUAL REPORT 2021

UPM FINANCIAL REPORT 2021 208