Company Overview
UPM is a global leader in forest-based bioindustries, offering a wide range of innovative solutions for various industries. With its rich history dating back to 1929, UPM has evolved into a multinational corporation with operations in over 30 countries. The company's primary mission is to create sustainable growth by developing and delivering high-quality products and services that meet the needs of its customers.
UPM's core values are built around innovation, sustainability, and customer satisfaction. The company strives to be a responsible business partner, committed to creating long-term value for its stakeholders. UPM's vision is to be the world's leading forest-based bioindustrial company, with a focus on sustainable growth and innovation.
Key Products/Services
UPM offers a diverse range of products and services that cater to various industries, including paper, packaging, tissue, biofuels, and wood products. Some of the key benefits of UPM's products include:
- Bio-based packaging solutions that reduce plastic waste and promote sustainability.
- High-quality paper and tissue products used in various applications, such as printing, writing, and hygiene products.
- Biofuels that provide a cleaner and more sustainable alternative to fossil fuels.
- Wood products that are used in construction, furniture, and other industries.
UPM's innovative solutions are designed to meet the evolving needs of its customers, while minimizing its environmental footprint. The company's commitment to sustainability is reflected in its use of renewable resources, reduction of waste, and implementation of energy-efficient technologies.
Innovation and Sustainability
UPM has a strong focus on innovation and sustainability, with a range of initiatives aimed at reducing its environmental impact. Some of the company's notable initiatives include:
- The development of new bio-based materials and products that replace traditional fossil fuel-based alternatives.
- The implementation of sustainable forestry practices and certification programs to ensure responsible wood sourcing.
- The use of renewable energy sources and energy-efficient technologies in its operations.
UPM's commitment to innovation and sustainability has earned the company numerous awards and recognition, including being named one of the world's most sustainable companies by Corporate Knights.
Investment Opportunity
UPM presents a compelling investment opportunity for those looking to capitalize on the growing demand for sustainable products and services. With its strong brand reputation, diverse product portfolio, and commitment to innovation and sustainability, UPM is well-positioned to continue delivering long-term value to its stakeholders.
The company's financial performance has been strong in recent years, with revenue growth driven by increasing demand for its bio-based products and services. UPM's dividend policy provides a stable source of income for investors, while the company's expansion into new markets and product areas presents opportunities for further growth and profitability.
Valuation
| 2022 | 2023 | 2024 | 2025 | 2026 (e) | 2027 (e) | 2028 (e) | |
|---|---|---|---|---|---|---|---|
| Number of Shares (million) | 533.7 | 533.7 | 533.7 | 527.7 | 527.7 | 527.7 | 527.7 |
| Target Valuation (MEur) | 9659.8 | 10822.0 | 9362.0 | 9785.1 | 7890.6 | 5853.8 | 5853.8 |
| Targer Price | 18.1 | 20.28 | 17.54 | 18.54 | 14.95 | 11.09 | 11.09 |
| Potential, % | -48.2 | -40.5 | -34.5 | -25.2 | -34.4 | -51.3 | -51.3 |
| Recommendation | Sell | Sell | Sell | Sell | Sell | Sell | Sell |
| MCAP (MEur) | 18643.4 | 18179.0 | 14293.4 | 13082.6 | 12027.1 | 12027.1 | 12027.1 |
| Price | 34.93 | 34.06 | 26.78 | 24.79 | 22.79 | 22.79 | 22.79 |
| EV | 21017.0 | 20611.0 | 17162.0 | 16087.0 | 15252.0 | 14199.0 | 13317.0 |
| P/S | 1.59 | 1.74 | 1.38 | 1.35 | 1.21 | 1.2 | 1.25 |
| EV/S | 1.79 | 1.97 | 1.66 | 1.67 | 1.54 | 1.42 | 1.38 |
| EV/EBIT | 10.16 | 33.9 | 14.33 | 21.45 | 15.95 | 16.03 | 16.97 |
| P/E | 11.42 | 46.26 | 15.23 | 26.7 | 15.87 | 16.97 | 19.15 |
| P/B | 1.49 | 1.63 | 1.28 | 1.31 | 1.16 | 1.09 | 1.03 |
| P/OCF | 36.7 | 8.01 | 10.58 | 9.3 | 23.16 | 8.21 | 9.3 |
| EV/OCF | 41.37 | 9.08 | 12.7 | 11.44 | 29.37 | 9.69 | 10.29 |
| P/FCF | -17.31 | 15.21 | 18.71 | 13.38 | 60.36 | 11.42 | 13.64 |
| EV/FCF | -19.51 | 17.25 | 22.46 | 16.45 | 76.54 | 13.49 | 15.11 |
Income Statement
| 2022 | 2023 | 2024 | 2025 | 2026 (e) | 2027 (e) | 2028 (e) | |
|---|---|---|---|---|---|---|---|
| Revenue | 11720.0 | 10460.0 | 10339.0 | 9656.0 | 9930.9 | 9986.2 | 9628.1 |
| Rev. Growth, % | 19.4 | -10.8 | -1.2 | -6.6 | 2.8 | 0.6 | -3.6 |
| Ebit | 2069.0 | 608.0 | 1198.0 | 750.0 | 956.3 | 885.9 | 784.9 |
| Ebit Growth, % | 32.5 | -70.6 | 97.0 | -37.4 | 27.5 | -7.4 | -11.4 |
| Ebit, % | 17.7 | 5.8 | 11.6 | 7.8 | 9.6 | 8.9 | 8.2 |
| Profit | 1632.0 | 393.0 | 938.2 | 490.0 | 757.6 | 708.7 | 627.9 |
| EPS | 3.06 | 0.74 | 1.76 | 0.93 | 1.44 | 1.34 | 1.19 |
| Profit Growth, % | 24.9 | -75.9 | 138.7 | -47.8 | 54.6 | -6.5 | -11.4 |
| Profit, % | 13.9 | 3.8 | 9.1 | 5.1 | 7.6 | 7.1 | 6.5 |
Balance Sheet
| 2022 | 2023 | 2024 | 2025 | 2026 (e) | 2027 (e) | 2028 (e) | |
|---|---|---|---|---|---|---|---|
| Inventory | 2289.0 | 1948.0 | 2104.0 | 1886.0 | 1897.8 | 1566.2 | 1628.9 |
| Acc. Receivable | 2696.0 | 1782.0 | 1929.0 | 1481.0 | 2235.7 | 2343.9 | 2250.5 |
| Cash | 2067.0 | 632.0 | 892.0 | 715.0 | 546.3 | 1599.1 | 2480.7 |
| Equity | 12502.0 | 11161.0 | 11139.0 | 10001.0 | 10338.7 | 11047.4 | 11675.3 |
| ROE, % | 13.1 | 3.5 | 8.4 | 4.9 | 7.3 | 6.4 | 5.4 |
| ROCE, % | 12.2 | 4.3 | 8.0 | 5.5 | 6.8 | 6.0 | 5.1 |
| Net Debt | 2374.0 | 2432.0 | 2869.0 | 3004.0 | 3224.7 | 2171.9 | 1290.3 |
| Gearing, % | 19.0 | 21.8 | 25.8 | 30.0 | 31.2 | 19.7 | 11.1 |
| Equity ratio, % | 56.3 | 60.4 | 58.3 | 57.0 | 57.3 | 68.8 | 72.4 |
| Acc. Payable | 2720.0 | 1883.0 | 1938.0 | 1839.0 | 1826.5 | 2705.5 | 2485.4 |
| Total Assets | 22207.0 | 18473.0 | 19096.0 | 17532.0 | 18047.4 | 16067.7 | 16124.1 |
| ROA, % | 7.3 | 2.1 | 4.9 | 2.8 | 4.2 | 4.4 | 3.9 |
Cash Flow
| 2022 | 2023 | 2024 | 2025 | 2026 (e) | 2027 (e) | 2028 (e) | |
|---|---|---|---|---|---|---|---|
| Operating Cash Flow | 508.0 | 2270.0 | 1351.0 | 1406.0 | 519.3 | 1464.8 | 1293.6 |
| Investment Cash Flow | -1585.0 | -1075.0 | -587.0 | -428.0 | -320.0 | -412.0 | -412.0 |
| Free Cash Flow | -1077.0 | 1195.0 | 764.0 | 978.0 | 199.3 | 1052.8 | 881.6 |
| OCF/CAPEX | 0.32 | 2.11 | 2.3 | 3.29 | 1.62 | 3.56 | 3.14 |
| Financial Cash Flow | 1688.0 | -2572.0 | -544.0 | -1134.0 | -363.0 | 0.0 | 0.0 |
Disclaimer
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