UPM Annual Report 2022
ACCOUNTS FOR 2022
UPM
BEYOND FOSSILS
BUSINESSES
RESPONSIBILITY
GOVERNANCE
Business area information for the year ended 31 December 2022
The goods and services included in sales revenue of each business area are presented in below table:
BUSINESS AREA
DESCRIPTION AND PRODUCTS
ELIMINATI ONS AND RECONCILI -ATIONS 2)
UPM Fibres
UPM Fibres consists of UPM Pulp and UPM Timber business units.
UPM SPECIALTY PAPERS
OTHER OPE RATIONS
UPM FIBRES
UPM ENERGY
UPM RAFLATAC
UPM COM PAPERS
UPM PLYWOOD
UPM Pulp offers a versatile range of responsibly-produced pulp grades suitable for a wide range of end uses such as tissue, specialty and packaging papers, graphic papers and board.
EURm, OR AS INDICATED
GROUP
External sales Internal sales
2,052
343 390 734 381
1,981
1,423
4,792
518
608
2
11,720
UPM Timber offers certified sawn timber for joinery, packaging, furniture, planing and construction end-use segments.
652
0
254
73
21
26
-1,416 -1,415
—
Total sales
2,704
1,982
1,677
4,866
539 109
634
11,720
UPM Energy
UPM Energy generates cost-competitive, zero-carbon electricity. Operations also include physical electricity and financial portfolio management as well as services to industrial electricity consumers and producers.
Comparable EBIT
570
214
153
619
81
-31
2,096
Items affecting comparability in operating profit
-53
—
-11
—
12
-65
-16
13
-122
UPM Raflatac
UPM Raflatac offers innovative and sustainable self-adhesive label materials for branding and promotion, information and functional labelling in the food, beverage, personal care, pharmaceutical and logistics segments, for example. UPM Specialty Papers offers labelling and packaging materials as well as office and graphic papers for labelling, commercial siliconising, packaging, office use and printing. UPM Communication Papers offers an extensive product range of sustainably produced graphic papers for advertising and publishing as well as home and office uses. UPM Plywood offers high quality WISA® plywood and veneer products for construction, vehicle flooring, LNG shipbuilding, parquet manufacturing and other industrial applications. Other operations include UPM Forest, UPM Biofuels, UPM Biochemicals-, UPM Biomedicals-, UPM Biocomposites- business units and group services. UPM Forest secures competitive wood and biomass for UPM businesses and manages UPM-owned and privately-owned forests in North Europe. In addition, UPM offers forestry services to forest owners and forest investors. UPM Biofuels produces wood-based renewable diesel for all diesel engines and renewable naphtha that can be used as a biocomponent for gasoline or for replacing fossil raw materials in the petrochemical industry. UPM Biochemicals offers innovative wood-based biochemicals for replacing fossil-based raw materials in various applications such as textiles, PET bottles, packaging, cosmetics, pharmaceuticals, detergents, rubbers and resins. UPM Biomedicals is the forerunner in producing nanofibrillar cellulose for clinical and life science applications in the field of drug screening, personalised medicine, advanced cell therapies, 3D bioprinting, tissue engineering and wound care. UPM Biocomposites is a pioneer in circular economy offering composite decking materials based on both recycled consumer and industrial waste. The product range also includes composite materials made from renewable fibres and polymers to replace fossil-based plastics.
Operating profit Finance costs, net
517
381
203
153
631
44
64
-18
1,974
-30
UPM Specialty Papers
Income taxes
-388
Profit for the period Operating assets 1) Deferred tax assets
1,556
UPM Communication Papers
6,888
4,068
995
1,316
2,245
297
3,153
-657
18,304
485
UPM Plywood
Other non-operating assets
82
Other financial assets
3,336
Other operations
Total assets
22,207
Operating liabilities 1) Deferred tax liabilities
510
240
201
379
649
47
448
-596
1,878
636 733
Other liabilities
Other financial liabilities
6,081 9,329
Total liabilities
Other items Change in fair value of forest assets and wood harvested Share of results of associates and joint ventures Depreciation and amortisation
11
—
—
—
—
—
2
—
12
3
—
—
—
3
—
-2
—
4
-187
-7
-37
-77
-81
-23 -43
-45 -19
— —
-457
Impairment charges
—
—
-4
—
1
-65
Capital employed, 31 December
6,378 5,867 1,005
3,827 3,286
793 681 175
937 889
1,596 1,506
250 247
2,705 2,577
1,426
17,913 15,836
Average capital employed
784
Capital expenditure
8
18
57
9
283
1
1,555
Capital expenditure, excluding acquisitions and shares
1,005
8
18
18
57
9
283
1
1,399
Key performance indicators and financial targets UPM aims to grow its comparable EBIT over the long term. The group has a portfolio of five businesses that operate on growing markets and one business that faces declining demand. All of UPM businesses are competitive and have strong market positions. Financial target setting, follow up and allocation of resources in the group’s performance management process is mainly based on the business area comparable EBIT and comparable ROCE.
Comparable ROCE, % Personnel, 31 December
9.7
11.6
31.5
17.2
41.1
44.3
3.1
— —
13.6
2,688
79
3,319
1,959
6,289
1,982
921
17,236
UPM presents comparable performance measures to reflect the underlying business performance and to enhance comparability from period to period. However, the comparable performance measures used by management should not be considered in isolation as a substitute for measures of performance in accordance with IFRS. Business area information including description of items affecting comparability is presented below.
1) Business area’s 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. 2) Eliminations and reconciliations include the elimination of internal sales and internal inventory margin and the changes in fair value of unrealised cash flow and commodity hedges that are not allocated to segments. » Refer Other financial information on Alternative performance measures, for definitions of key figures and reconciliation to measures presented in the consolidated income statement and balance sheet prepared in accordance with IFRS.
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UPM ANNUAL REPORT 2022
UPM ANNUAL REPORT 2022
UPM FINANCIAL REPORT 2022
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UPM FINANCIAL REPORT 2022
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