UPM Annual Report 2022

ACCOUNTS FOR 2022

UPM

BEYOND FOSSILS

BUSINESSES

RESPONSIBILITY

GOVERNANCE

Business area information for the year ended 31 December 2021

Items affecting comparability

Total assets and capital expenditure by country

Assets

Capital expenditure

ELIMINATI ONS AND RECONCILI -ATIONS 2)

EURm

2022 2021

UPM SPECIALTY PAPERS

OTHER OPE RATIONS 3)

EURm Finland

2022 2021 2022 2021

In operating profit Impairment charges Restructuring charges

UPM FIBRES 3)

UPM ENERGY

UPM RAFLATAC

UPM COM PAPERS

UPM PLYWOOD

-80 -15

-52 11

EURm, OR AS INDICATED

GROUP

12,478

9,889 1,521 4,046

82

83

External sales Internal sales

2,092

290 236 526 270

1,671

1,275

3,536

471

474

5

9,814

Germany Uruguay

1,946 5,364

468 980

204

Change in fair value of unrealised cash flow and commodity hedges Capital gains and losses on sale of non-current assets

702

—

207

41

21

9

-1,215 -1,210

—

1,159

13

-8

Total sales

2,794

1,671

1,482

3,577

492

483 113

9,814 1,471

China

680 660 108

711 412 148 101 137 155

4 9 1 1 6 2 1

7 5 1 2 2

34

140

Comparable EBIT

781

223

135

-79

72

-42

United States

Items affecting comparability in operating profit

Other items

-74

—

United Kingdom

—

—

-1

—

93

8

-1

-9

91

Total

-122 -122

91 91

Austria Russia Poland Estonia France

96 31

Operating profit Finance costs, net

781

270

222

135

14

80

112

-50

1,562

Total in profit before tax

—

-15

In income taxes Taxes related to items affecting comparability

179

16

Income taxes

-240

9

12

Profit for the period Operating assets 1) Deferred tax assets

55 37 65

51 33 53

1 1

1,307

Tax provisions

-10

—

5,393

2,932

768

1,169

1,903

333

2,666

-528

14,635

Total

-1

12

466 139

Other EU countries Other European countries

—

—

Total in profit for the period

-122

103

Other non-operating assets

40

27

—

1

Other financial assets

2,436

In 2022, items affecting comparability include EUR 80 million impairment charges of assets impacted by Russia´s war in Ukraine. Other items include EUR 69 million settlement loss resulting from replacement of a defined benefit pension plan in Finland with defined contribution plan. Tax provisions relate to tax dispute. In 2021, items affecting comparability relate mainly to UPM Communication Papers and include a capital gain on sale of shares of Shotton Mill Ltd amounting to EUR 133 million and impairment charges of newsprint related fixed assets amounting to EUR 50 million.

Rest of world

467

392

2

1

Total assets

17,676

Total

22,207

17,676

1,555

1,483

Operating liabilities 1) Deferred tax liabilities

402

140

193

265

737

43

409

-479

1,710

596 863

Other liabilities

Sales by destination country

Other financial liabilities

3,400 6,570

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

EURm Finland

2022 2021

973

1,046 1,395 1,089

-9

—

—

—

—

—

120

—

111

Germany

2,032 1,623

2

—

—

—

—

—

—

—

2

United States

Accounting policies

United Kingdom

676

617

-172

-7

-36

-75

-103

-27

-43

— —

-463

China France

1,165

1,058

Impairment charges

—

—

—

—

-52

1

-1

-52

Certain non-operational or non-cash valuation transactions with significant income statement impact are considered as items affecting comparability and reported separately to reflect the underlying business performance and to enhance comparability from period to period. The group applies relevant IFRS standards to such transactions.

501

378

Capital employed, 31 December

4,991 4,277 1,180

2,792 2,375

575 553

903 864

1,165 1,275

290 286

2,257 2,152

785 874

13,759 12,657

Uruguay

56

63

Average capital employed

Poland Austria Russia

402 194

336 151 194

Capital expenditure

12

25

12

56

14

184

-1

1,483

Capital expenditure, excluding acquisitions and shares

1,180

7

25

12

56

14

183

-1

1,477

37

Comparable ROCE, % Personnel, 31 December

18.3

11.4

40.2

15.6

-6.2

25.1

5.2

— —

11.7

Other EU countries

2,033

1,651

2,558

72

3,016

1,918

6,422

2,196

784

16,966

Other European countries

388

352

Rest of world

1,639

1,482 9,814

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 the changes in fair value of unrealised cash flow and commodity hedges that are not allocated to segments. 3) On 1 January 2022, UPM has changed its reportable segments composition by moving the UPM Biofuels business into Other Operations. The comparative periods have been restated according to the new reporting principles. » Refer Note 1.5 Changes in accounting policies for more information. » 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.

Total

11,720

170

171

UPM ANNUAL REPORT 2022

UPM ANNUAL REPORT 2022

UPM FINANCIAL REPORT 2022

170

UPM FINANCIAL REPORT 2022

171