UPM annual report 2014

Segment information for the year ended 31 December 2013

Geographical information External sales by destination

Notes to the consolidated cash flow statement

UPM Paper Asia

UPM Paper ENA

Eliminations and reconci- liations 8)

Adjustments

UPM Biorefining

UPM Energy

UPM Raflatac

UPM Plywood

Other operations

Year ended 31 December

Year ended 31 December

Group

EURm

2014 2013 1,694 1,788 980 1,011

EURm

2014 2013

EURm

Germany

Change in fair value of biological assets and wood harvested Share of results of associated companies and joint ventures Depreciation, amortisation and impairment charges Capital gains on sale of non-current assets, net

External sales Internal sales Total sales 1)

1,299

222 1,210

914 5,451

402

496

60

10,054

Finland

–78

–68

689

244

3

194

109

27

–6

–1,260 –1,200

–

United Kingdom

919 414

915 454

1,988

466 1,213 1,108 5,560

429

490

10,054

France

–3

–2

Other EU countries

2,052 1,900

658

545 –19

Share of results of associates and joint ventures

1

–1

–

–

1

–

1

–

2

Other European countries

508

563

–117

United States

1,006 1,077

Finance costs, net

66

74

Operating profit

306

186

60

80

–59

21

–42

–4

548

Canada

50

50

Taxes

155

140 –13

China

637

715

Change in restructuring provisions

14 84

Finance costs, net

–73

Uruguay

41

43

Other adjustments

93

Income taxes

–140

Rest of world

1,567 1,538 9,868 10,054

Total

779

750

Profit (loss) for the period

335

Total

6

–

–15

–

–59

–

–67

–

–135

Special items in operating profit 2) Operating profit excluding special items

Change in working capital

300

186

75

80

–

21

25

–4

683

Total assets by country

Year ended 31 December

As at 31 December 2014 2013 1,222 1,252 8,753 9,344

2014 2013

EURm

Assets 3)

2,946 2,984

616

937 3,013

299 1,677

–247

12,225

EURm

Unallocated assets

2,374

Inventories

18 59

33 12

Total assets

14,599

Current receivables

Germany

Current non-interest-bearing liabilities

–4 –173 73 –128

Finland

Liabilities 4)

156

22

108

67

451

25

214

–196

847

Total

United Kingdom

250

294 152 347

Unallocated liabilities

6,297 7,144

France

67

Total liabilities

Other EU countries

335

The total amount of taxes paid in 2014 amounted to EUR 81 million (161 million). In 2013, EUR 4 million of total taxes paid related to investing activities.

Other European countries

79

96

Other items

United States

464

421

Depreciation and amortisation

152

11

33

81

229

22

13

–3

538

Canada

11

20

Impairment charge Capital expenditure 5)

–

–

3

–

4

–

–

–

7

China

913

767

159

39

13

22

97

10

23

–1

362

Uruguay

1,790 1,626

6 Other operating income

Capital expenditure, excluding acquisitions and shares Capital employed, 31 December 6)

Rest of world

311

280

158

7

13

22

92

9

29

–1

329

Total

14,195 14,599

Year ended 31 December

2,790 2,962 2,825 2,882

508 532

870 2,562 882 2,672

274 1,463 286 1,533

154 –19

11,583 11,593

2014 2013

EURm

Capital employed, average Return on capital employed, excluding special items % 7)

Gains on sale of non-current assets Rental income, investment property

62

19

Capital expenditure by country

4

5

10.6

6.5

14.1

9.1

–

7.3

1.6

21.1 –115 –113

6.0

Rental income, other

11 27

10 16 32

Year ended 31 December

Personnel at year end Personnel, average

2,376 2,539

92 2,869 1,457 11,081 2,455 95 2,905 1,510 11,695 2,507

735 760

20,950 21,898

2014 2013

EURm

Emission rights received (Note 7) Derivatives held for trading Exchange rate gains and losses

–53

Germany

59

52

23 17 91

–36

1) The Group's sales comprise mainly of product sales.

Finland

236

242

Other

14 60

United Kingdom

9 2

9 5 1 6 7

2) In 2013, special charges of EUR 2 million in the UPM Biorefining segment relate to restructuring measures and special income of EUR 8 million to a capital gain from a sale of property, plant and equipment. In the UPM Raflatac segment special items of EUR 15 million relate to restructuring charges, including impairments of EUR 2 million. In the UPM Paper ENA segment special items include charges of EUR 25 million related to the restructuring of the UPM Docelles mill in France and net charges of EUR 34 million mainly related to the ongoing restructurings. In the Other operations special items of EUR 40 million relate to write-down of receivable due to the Finnish Customs’ decision to dismiss UPM’s application for the statutory refund of energy taxes for the year 2012. In addition, special items include charges of EUR 27 million mainly related to the streamlining of global functions. 3) Segment assets include goodwill, other intangible assets, property, plant and equipment, investment property, biological assets and investments in associated companies and joint ventures, available-for-sale investments, inventories and trade receivables.

Total

France Poland

11

Other European countries

2 5

7 Costs and expenses

United States

China

77

21 17

Year ended 31 December

Uruguay

8 2

2014 2013

EURm

Rest of world

2

Change in inventories of finished goods and work in progress

Total

411

362

4) Segment liabilities include trade payables and advances received.

–12

37 –9

5) Capital expenditure includes goodwill arising from business combinations, other intangible assets, property, plant and equipment, investment property, and investments in as- sociated companies and joint ventures and other shares.

Production for own use

–6

5 Acquisitions and disposals and notes to the cash flow statement Acquisitions In 2014 and 2013, no acquisitions were made. Disposals In 2014, UPM had minor company disposals. In 2013, there were no disposals.

6) Capital employed is segment assets less segment liabilities. Eliminations and reconciliations include unallocated assets and unallocated non-interest-bearing liabilities.

Materials and services Raw materials, consumables and goods Derivatives designated as cash flow hedges

5,559 5,801

7) Formulae for calculation of the return on capital employed; for segments: Operating profit excluding special items/Capital employed (average) x 100, for the Group: (Profit before tax + interest expenses and other financial expenses–special items)/(Total equity+interest bearing liabilities (average)) x 100. 8) Eliminations and reconciliations include the elimination of internal sales and internal inventory margin and the consolidation of MPI as a joint operation. In addition the changes in fair value of unrealised commodity hedges that are not allocated to segments are included in reconciliations.

47

13

External services and charges 1)

913 902 6,519 6,716

CONTENTS

ACCOUNTS

97

98

UPM Annual Report 2014

UPM Annual Report 2014