Confidence Delivered Bernd Eikens EVP, UPM Specialty Papers 31 May 2018
Sustainable and safe products for everyday use Labelling & other application papers Packaging papers Fine papers LABEL MATERIALS for food packaging, drinks bottles and for communicating information PACKAGING PAPERS for variety of consumer and food packaging OFFICE PAPERS for printing 2 UPM The Biofore Company LABELS for food products
Megatrends giving tailwind Growing middle class & higher standard of living Growth in e-commerce Increasing sustainability awareness & regulation Advancing technology 3 UPM The Biofore Company
Strong position in growing end use markets LEADERSHIP POSITION IN LABELLING MATERIALS NICHE PLAYER IN CONSUMER PACKAGING MAJOR SUPPLIER OF OFFICE PAPER IN ASIA CASE: Siliconized release liner market, 51 Bn m 2 CAGR 5% Paper flexpack, million tonnes CAGR 2% Asian cutsize market, million tonnes CAGR 2 3% 51.0 63.5 7% 1,9 2,1 2% 5.3 Other Asia 6.1 1 2% 2 3% 1 3% 5% China 2017 2022E 2017E 2022E 2017 2022E Asia North America Europe South America MEA Source: AWA; Pira, UPM 4 UPM The Biofore Company
Release liner opportunities in labelstock & other applications Product functions: Release liner carries the adhesive and face material: Prevents the adhesive from sticking permanently Important and often critical feature of a layered construction Medical 3 % Food & bakery 5 % Graphic film 5 % Others Envelope 2 % 3 % Hygiene 8 % Globally 48.7 Bn m 2 Labelstock 50 % Industrial 11 % Tapes 13 % Source: AWA 5 UPM The Biofore Company
Sales EUR 1,336 million in 2017 By Market By Product Production 2 Europe & MEA Americas Other APAC China Fine paper Release liner base Face & packaging 3 modern and efficient mills Changshu, China Tervasaari, Finland Jämsänkoski, Finland Production capacity 2 million t/a 1 6 UPM The Biofore Company
Growth path in Specialty Papers 2012 Changshu Mill Cutsize line 2016 Changshu Mill PM3 start-up 277M investment 2018 Changhsu Mill +100kt Cutsize line 2020 Changhsu Mill 33M +40kt PM3 speed-up 2019 Nordland Mill 116M +110kt PM2 conversion into glassine Sales volumes 2015 Changshu Mill Cutsize line 2018 Jämsänkoski Mill +40kt Calender rebuild 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 7 UPM The Biofore Company
Future mill roles Europe North America TER JÄM NOR PM2 Asia Pacific CSU Latin America 8 UPM The Biofore Company
Performance development ROCE % 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 9% 12% 6% 12% 17% 17% KEY FIGURES 2017 Sales, M 1,336 Comparable EBIT, M 152 Capital employed (average), M 885 Comparable ROCE, % 17,2 Personnel on 31 Dec 2017 1,949 0% 2013 2014 2015 2016 2017 2018 Q1 Long-term return target 9 UPM The Biofore Company
Growth strategy Cost competitiveness Growth Growth Capacity investment Face paper Office papers Responsible Fibre & Nordic Origin Growth in high quality label papers Innovations in other applications LABELLING Release liner base paper FINE PAPERS Publication papers Capacity investments PACKAGING Packaging papers Growth Innovations 10 UPM The Biofore Company
Assets Go-tomarket UPM Specialty Papers Success factors Responsible long term growth for our customers & partners Global sales network & service capability Consistent & technically demanding product quality Operational efficiency Competitive production platform 11 UPM The Biofore Company
Responsibility & sustainability Paper Today Sustainability awareness & regulation Future Renewable & recyclable products Illustrative growth OPPORTUNITIES Plastics and foils in flexible packaging COMPETITIVENESS Changshu mill over last 10 years Water -15% Per tonne of paper Waste to landfill -80% Per tonne of paper CO 2 fossil -25% Per tonne of paper Electricity -15% Per tonne of paper SO 2 Emission -95% Per tonne of paper Certified fibre 85% In 2017 Over the last 10 years Source: UPM, Pira 12 UPM The Biofore Company
Living examples INNOVATIONS Reactive surface in HSR release liners Innovative & improved silicone coating EVO products Light weight products competitive against synthetic materials Recycling based release liners High quality release liner of recycled fibres Barrier ream wrapping Replacing PE coated laminate RECOGNITION China Water Efficiency Frontrunner The first and only company in Jiangsu Province Enhanced Singapore Green Label certificate The first copy papers to be granted 13 UPM The Biofore Company
14 UPM The Biofore Company