UPM-Kymmene Corporation Financial Review January 2004

Transcription

1 UPM-Kymmene Corporation Financial Review January 24

2 Key figures Change Turnover, million EUR Operating profit, excl. non-recurring items EUR million - % of turnover Profit before extraordinary items, EUR million Earnings per share, EUR - excl. non-recurring items Cash from operating activities per share, EUR Paper deliveries, 1 t Personnel at UPM-Kymmene Corporation 2

3 Quarterly figures UPM-Kymmene Corporation 3

4 Paper deliveries by quarter 1 t 3 Fine and Speciality Papers Newsprint Magazine Papers IV/2 I/3 II/3 III/3 IV/3 Capacity utilization rate,% UPM-Kymmene Corporation 4

5 Turnover by quarter MEUR 3, 2,5 2, 1,5 1, IV/2 I/3 II/3 III/3 IV/3 UPM-Kymmene Corporation 5

6 Operating profit margin by quarter, excl. non-recurring items % IV/96 IV/97 IV/98 IV/99 IV/ IV/1 IV/2 IV/3 4.8% UPM-Kymmene Corporation 6

7 Operating profit margins by division excl. amortization of goodwill and non-recurring items 1 (2) % 2 Magazine Papers Newsprint Fine and Speciality Papers IV/2 I/3 II/3 III/3 IV/3 UPM-Kymmene Corporation 7

8 Operating profit margins by division excl. amortization of goodwill and non-recurring items 2 (2) % 1 Converting Division Wood Products Division IV/2 I/3 II/3 III/3 IV/3 UPM-Kymmene Corporation 8

9 Variation analysis Earnings per share excl.non-recurring items Q3 vs Q4 EPS 7-9/23 EUR.16 Paper prices Paper deliveries Costs, paper* Other Financials net Income taxes EPS 1-12/ * Paper Divisions fixed costs and raw material costs UPM-Kymmene Corporation 9

10 Cash from operating activities per share EUR 1, Operating cash flow per share 1-12/23 EUR /22 EUR.84,8,6,4,2, IV/2 I/3 II/3 III/3 IV/3 UPM-Kymmene Corporation 1

11 Annual figures UPM-Kymmene Corporation 11

12 Turnover MEUR UPM-Kymmene Corporation 12

13 Operating profit Incl. non-recurring items Excl. non-recurring items MEUR UPM-Kymmene Corporation 13

14 Operating profit by division 23, M 22, M Change, M Magazine Papers Newsprint Fine and Speciality Papers Converting Wood Products Other Operations Forestry department, Finland Energy department, Finland Share of results of associated companies Other Total UPM-Kymmene Corporation 14

15 Profit before extraordinary items MEUR 2 Excl. non-recurring items Incl. non-recurring items UPM-Kymmene Corporation 15

16 Return on capital employed, excl. non-recurring items % 2 15 Internal target: >15 % % UPM-Kymmene Corporation 16

17 Return on equity excl. non-recurring items % 25 2 Minimum target Minimum target: 1 year bond +5 % % UPM-Kymmene Corporation 17

18 Cash from operating activities, investments and depreciation Tavoite: Acquisitions riskitön korko +5% Other capex Maintenance capex Cash from operating activities Depreciation MEUR 4, 3,5 3, 2,5 2, 1,5 1, UPM-Kymmene Corporation 18

19 Gearing ratio and net interest-bearing liabilities Gearing ratio Net interest bearing liabilities % MEUR Target: <1 % % Ratings: S&P BBB (stable), Moody s Baa1 (stable) UPM-Kymmene Corporation 19

20 Cash from operating activities per share EUR UPM-Kymmene Corporation 2

21 Earnings per share Earnings per share excl. non-recurring items 1-12/23 EUR /22 EUR 1.12 Excl. non-recurring items Incl. non-recurring items, net EUR UPM-Kymmene Corporation 21

22 Dividend per share Extra dividend Dividend Dividend year 23, proposal EUR 2, 1,5 1,,5, Dividends paid, MEUR UPM-Kymmene Corporation 22

23 Price development and economic indicators UPM-Kymmene Corporation 23

24 Recovered paper price in Germany /December 2 15 Euroa/tonni Source: EUWID, grade: sorted graphic paper for deinking UPM-Kymmene Corporation 24

25 Paper price development in Europe /December 1,4 1,2 News 45 g/m² SC rg 56 g/m² LWC off 6 g/m² WFCr 1 g/m² WFUr 8 g/m² Linear (News 45 g/m²) Euro / metric ton 1, Source: PPI (average transaction price in UK, France and Germany) UPM-Kymmene Corporation 25

26 Paper price development in USA /December 1,4 1,2 USD /metric ton 1, News 48,8 g/m² SC 51,8 g/m² LWC 59,2 g/m² WFCr 88,8 g/m² WFUr off 74 g/m² Source: RISI (average transaction price in the US) UPM-Kymmene Corporation 26

27 EU - leading indicator* and industrial production % change from previous year months moving average, seasonally adjusted 6 4 EU - leading indicator* and industrial production Composite leading indicator* Industrial production *) index of the composite leading indicator of each EU country; Source: OECD UPM-Kymmene Corporation 27 Nov.

28 USA - leading indicator* and industrial production % change from previous year months moving average, seasonally adjusted Composite leading indicator* Industrial production *) Set of components: dwelling started, net new orders durable goods, share price index, consumer sentiment indicator, weekly hours of work (manufacturing), purchasing mangers index, spread of interest rates UPM-Kymmene Corporation Source: OECD 28 Nov.

29 Near term outlook Economic recovery continues in Europe and good growth in the USA and Asia UPM paper deliveries estimated to increase from 23 During the first quarter magazine paper prices remain largely unchanged Newsprint euro denominated contract prices slightly lower than last year Fine paper prices strengthen as demand rises Markets for speciality papers improve Converted products' markets improve gradually The Wood Products Division's markets continue to suffer from oversupply Operating profit for the first quarter is estimated to be somewhat lower than year ago, partly due to weaker US dollar UPM-Kymmene Corporation 29

30 Summary Lower paper prices and weakened dollar eroded profitability 23 despite improved paper demand Profitability fell clearly to unsatisfactory level Positives - Good cash flow and strong balance sheet - supported by cost savings program and improving general economic conditions New management team Aim at keeping UPM as one of the best paper and forest companies in the World. UPM-Kymmene Corporation 3

31 Forward-looking statement It should be noted that certain statements herein which are not historical facts, including, without limitation those regarding expectations for market growth and developments; expectations for growth and profitability; and statements preceded by "believes", "expects", "anticipates", "foresees", or similar expressions, are forward-looking statements. Since these statements are based on current plans, estimates and projections, they involve risks and uncertainties which may cause actual results to materially differ from those expressed in such forward-looking statements. Such factors include, but are not limited to: (1) operating factors such as continued success of manufacturing activities and the achievement of efficiencies therein, continued success of product development, acceptance of new products or services by the Group's targeted customers, success of the existing and future collaboration arrangements, changes in business strategy or development plans or targets, changes in the degree of protection created by the Group's patents and other intellectual property rights, the availability of capital on acceptable terms; (2) industry conditions, such as strength of product demand, intensity of competition, prevailing and future global market prices for the Group's products and the pricing pressures thereto, financial condition of the customers and the competitors of the Group, the potential introduction of competing products and technologies by competitors; and (3) general economic conditions, such as rates of economic growth in the Group's principal geographic markets or fluctuations in exchange and interest rates. UPM-Kymmene Corporation 31

32 UPM UPM-Kymmene Corporation 32