UPM annual report 2014

Parent company accounts (Finnish Accounting Standards, FAS)

40 Events after the balance sheet date On 12 January 2015, UPM announced that the UPM Lappeenranta Biorefinery had started commercial production. The production process works as planned and the high quality end product, UPM BioVerno diesel, fulfils customer specifications. The UPM Lappeenranta Biorefinery is the world’s first wood-based renewable diesel biorefinery, and is based on a hydrotreatment process developed by UPM. It is capable of producing approximately 120 mil- lion litres of renewable UPM BioVerno diesel each year. On 20 January 2015, UPM announced that it will permanently close down paper machine 2 at UPM Kaukas and paper machine 5 at UPM Jämsänkoski in Finland, along with paper machine 1 at the UPM Shot- ton mill in the UK. Production will be ceased by the end of March 2015 at the latest. Employee consultation processes concerning the closing plans were concluded in mid-January 2015. The number of positions is reduced by 114 at the Kaukas mill in Lappeenranta, by 138 at the Jämsä River Mills and by 121 at Shotton. Along with the closures, UPM reduces its coated and uncoated magazine paper capacity by approxi- mately 460,000 tonnes and its newsprint capacity by 215,000 tonnes.

Income statement

Cash flow statement

Year ended 31 Dec.

Year ended 31 Dec.

2014 2013

2014 2013

EURm

Note

EURm

Note

Turnover

Operating activities Profit before extraordinary items Financial income and expenses Adjustments to operating profit

1 3,395 3,715

618 267 –405 –59

Change in inventories of finished goods and work in progress

–33

–4

1 384 305

Production for own use Other operating income Materials and services

5

7

Change in working capital

2

99 227 –75 –78

2 186 113

Interest paid

Dividends received Interest received Other financial items Income taxes paid

560

2

Materials and consumables Purchases during the financial period

23 25

19

–2,079 –2,377

1

Change in inventories

–7

17

3 –63 –140

External services

–36 –107 –2,122 –2,467

Net cash generated from operating activities

1,166 544

Personnel expenses

3

Investing activities Investments in tangible and intangible assets Proceeds from sale of tangible and intangible assets

Wages and salaries

–361 –372

Social security expenses Pension expenses

–181 –199

–59 –68 –22 –20 –442 –460

100

79

Other social security expenses

Investments in shares and holdings

–29 –36

Proceeds from sale of shares and holdings

59

4

Depreciation and value adjustments Depreciation according to plan Value adjustments to goods held as non-current assets

4

Increase in other investments Decrease in other investments

–9 –11 39 265 –21 102

–227 –239

Net cash used in investing activities

–50 –25 –277 –264

Financing activities Increase in non-current liabilities Decrease in non-current liabilities

Other operating costs and expenses

3 –499 –432

– 527

Operating profit

213 208

–766 –244 –223 –337

Increase or decrease in current liabilities

Financial income and expenses Income from investments held as non-current assets Dividends from Group companies Other interest and financial income Other interest income from Group companies Other interest income from other companies Interest income from Group companies

Share options exercised

47

20

Dividends paid

–319 –317

559

2

Group contributions received and paid Net cash used in financing activities

4 –70

8

10

–1,257 –421

3

4 –

Cash and cash equivalents Cash and cash equivalents at beginning of year Change in cash and cash equivalents Cash and cash equivalents at end of year

11

576 351 –112 225 464 576

Other financial income from Group companies

8 1

94 30

Other financial income from other companies

Value adjustments on investments

–10

–

Interest and other financial expenses Interest expenses to Group companies Interest expenses to other companies

Notes to the cash flow statement

–37 –39 –37 –39

1 Adjustments to operating profit Depreciation

Other financial expenses to other companies

–101 405

–3 59

227 239

Total financial income and expenses Profit before extraordinary items

Gains and losses on sale of non-current assets Value adjustments on non-current assets

102

46 25 –5

618 267

50

Change in provisions

5

Extraordinary items

5

Total

384 305

Extraordinary income Extraordinary expenses Total extraordinary items

70

35

–9 –31

2 Change in working capital Inventories

61

4

37 –15 77 236

Profit before appropriations and taxes

679 271

Current receivables

Current non-interest-bearing liabilities

–15

6

Appropriations Increase or decrease in accumulated depreciation difference

Total

99 227

117

96

Income taxes

6 –86 –116

3 Taxes from sales of non-current assets are reported here on a net basis.

Profit/loss for the financial period

710 251

CONTENTS

ACCOUNTS

121

122

UPM Annual Report 2014

UPM Annual Report 2014