HLSE:UPM

Stock Analysis Report

Executive Summary

UPM-Kymmene Oyj operates in the forest-based bio industry.

Rewards

PE ratio (15.1x) is below the Finnish market (21.4x)

Revenue is forecast to grow 0.95% per year

Pays a high and reliable dividend of 4.33%

Risk Analysis

Earnings are forecast to decline by an average of -0.9% per year for the next 3 years



Snowflake Analysis

Flawless balance sheet established dividend payer.


Similar Companies

Share Price & News

How has UPM-Kymmene Oyj's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: UPM has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-1.3%

UPM

-1.7%

FI Forestry

-1.2%

FI Market


1 Year Return

11.5%

UPM

1.8%

FI Forestry

10.2%

FI Market

Return vs Industry: UPM exceeded the Finnish Forestry industry which returned 1% over the past year.

Return vs Market: UPM exceeded the Finnish Market which returned 9.6% over the past year.


Shareholder returns

UPMIndustryMarket
7 Day-1.3%-1.7%-1.2%
30 Day2.5%1.8%1.1%
90 Day-1.1%-0.3%9.8%
1 Year16.9%11.5%6.5%1.8%15.2%10.2%
3 Year49.4%31.4%35.2%-8.4%33.7%17.7%
5 Year120.6%77.5%86.4%18.3%46.3%18.7%

Price Volatility Vs. Market

How volatile is UPM-Kymmene Oyj's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is UPM-Kymmene Oyj undervalued compared to its fair value and its price relative to the market?

15.08x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: UPM (€30.01) is trading above our estimate of fair value (€26.31)

Significantly Below Fair Value: UPM is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: UPM is poor value based on its PE Ratio (15.1x) compared to the Forestry industry average (11.1x).

PE vs Market: UPM is good value based on its PE Ratio (15.1x) compared to the Finnish market (21.4x).


Price to Earnings Growth Ratio

PEG Ratio: UPM's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: UPM is overvalued based on its PB Ratio (1.6x) compared to the XE Forestry industry average (1.1x).


Next Steps

Future Growth

How is UPM-Kymmene Oyj forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

-0.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: UPM's earnings are forecast to decline over the next 3 years (-0.9% per year).

Earnings vs Market: UPM's earnings are forecast to decline over the next 3 years (-0.9% per year).

High Growth Earnings: UPM's earnings are forecast to decline over the next 3 years.

Revenue vs Market: UPM's revenue (1% per year) is forecast to grow faster than the Finnish market (-0.05% per year).

High Growth Revenue: UPM's revenue (1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: UPM's Return on Equity is forecast to be low in 3 years time (9.3%).


Next Steps

Past Performance

How has UPM-Kymmene Oyj performed over the past 5 years?

16.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: UPM has high quality earnings.

Growing Profit Margin: UPM's current net profit margins (10.4%) are lower than last year (14.3%).


Past Earnings Growth Analysis

Earnings Trend: UPM's earnings have grown by 16.8% per year over the past 5 years.

Accelerating Growth: UPM's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: UPM had negative earnings growth (-29%) over the past year, making it difficult to compare to the Forestry industry average (-11.4%).


Return on Equity

High ROE: UPM's Return on Equity (10.5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is UPM-Kymmene Oyj's financial position?


Financial Position Analysis

Short Term Liabilities: UPM's short term assets (€4.6B) exceed its short term liabilities (€1.8B).

Long Term Liabilities: UPM's short term assets (€4.6B) exceed its long term liabilities (€2.7B).


Debt to Equity History and Analysis

Debt Level: UPM's debt to equity ratio (11.8%) is considered satisfactory.

Reducing Debt: UPM's debt to equity ratio has reduced from 42.7% to 11.8% over the past 5 years.

Debt Coverage: UPM's debt is well covered by operating cash flow (153.5%).

Interest Coverage: UPM's interest payments on its debt are well covered by EBIT (34.9x coverage).


Balance Sheet

Inventory Level: UPM has a high level of physical assets or inventory.

Debt Coverage by Assets: UPM's debt is covered by short term assets (assets are 3.8x debt).


Next Steps

Dividend

What is UPM-Kymmene Oyj's current dividend yield, its reliability and sustainability?

4.33%

Current Dividend Yield


Upcoming Dividend Payment

Purchase UPM-Kymmene Oyj before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company4.3%marketbottom25%2.1%markettop25%4.5%industryaverage4.2%forecastin3Years4.5%

Current dividend yield vs market & industry

Notable Dividend: UPM's dividend (4.33%) is higher than the bottom 25% of dividend payers in the Finnish market (2.13%).

High Dividend: UPM's dividend (4.33%) is low compared to the top 25% of dividend payers in the Finnish market (4.51%).


Stability and Growth of Payments

Stable Dividend: UPM's dividends per share have been stable in the past 10 years.

Growing Dividend: UPM's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (65.3%), UPM's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: UPM's dividends in 3 years are forecast to be covered by earnings (74.4% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

10.9yrs

Average management tenure


CEO

Jussi Pesonen (59yo)

16.1yrs

Tenure

€5,978,000

Compensation

Mr. Jussi Pesonen, M.Sc. (Eng.), has been Chief Executive Officer and President of UPM-Kymmene Oyj since January 29, 2004 and has been its Head of UPM Biorefining since November 2018. Mr. Pesonen serves as ...


CEO Compensation Analysis

Compensation vs Market: Jussi's total compensation ($USD6.47M) is above average for companies of similar size in the Finnish market ($USD3.58M).

Compensation vs Earnings: Jussi's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Jussi Pesonen
President16.1yrs€5.98m0.079% 12.6m
Tapio Korpeinen
CFO & Executive VP of UPM Energy9.8yrsno data0.028% 4.4m
Jyrki Ovaska
Executive Vice President of Technology6.3yrsno data0.016% 2.6m
Mika Mikkola
Vice President of Investor Relations8.5yrsno datano data
Juha Mäkelä
General Counsel14.8yrsno data0.012% 1.9m
Hanna Maula
Vice President of Communications & Brand0.5yrsno datano data
Riitta Savonlahti
Executive Vice President of Human Resources15.8yrsno data0.0029% 460.9k
Pirkko Harrela
Executive Vice President of Stakeholder Relations6.3yrsno data0.015% 2.4m
Bernd Eikens
Executive Vice President of UPM Biorefining12.1yrsno data0.012% 2.0m
Anu Ahola
Senior Vice President of SBU Newspaper Publishing for UPM Paper Europe & North America12.1yrsno datano data

10.9yrs

Average Tenure

56.5yo

Average Age

Experienced Management: UPM's management team is seasoned and experienced (10.9 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Jussi Pesonen
President16.1yrs€5.98m0.079% 12.6m
Kim Wahl
Independent Director7.9yrs€125.00k0.0037% 589.0k
Berndt Brunow
Deputy Chairman15.1yrs€145.00k0.058% 9.3m
Björn Wahlroos
Independent Chairman11.9yrs€210.00k0.049% 7.9m
Veli-Matti Reinikkala
Independent Director12.9yrs€130.00k0.0080% 1.3m
Ari Puheloinen
Independent Director5.5yrs€120.00k0.0019% 296.1k
Henrik Ehrnrooth
Independent Director4.8yrs€120.00k0.0015% 235.3k
Suzanne Thoma
Independent Director4.8yrs€120.00k0.0015% 235.3k
Piia-Noora Kauppi
Independent Director6.8yrs€145.00k0.0033% 531.4k
Marjan Oudeman
Independent Director1.8yrs€125.00k0.00028% 44.8k

7.4yrs

Average Tenure

60yo

Average Age

Experienced Board: UPM's board of directors are considered experienced (7.4 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

UPM-Kymmene Oyj's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: UPM-Kymmene Oyj
  • Ticker: UPM
  • Exchange: HLSE
  • Founded: 1995
  • Industry: Paper Products
  • Sector: Materials
  • Market Cap: €16.005b
  • Shares outstanding: 533.32m
  • Website: https://www.upm.com

Number of Employees


Location

  • UPM-Kymmene Oyj
  • Alvar Aallon katu 1
  • Helsinki
  • Uusimaa
  • 101
  • Finland

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
UPMK.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDMay 1996
RPLDB (Deutsche Boerse AG)YesOrdinary SharesDEEURMay 1996
UPMHLSE (OMX Nordic Exchange Helsinki)YesOrdinary SharesFIEURMay 1996
RPLXTRA (XETRA Trading Platform)YesOrdinary SharesDEEURMay 1996
0NV5LSE (London Stock Exchange)YesOrdinary SharesGBEURMay 1996
UPM NBMV (Bolsa Mexicana de Valores)YesOrdinary SharesMXMXNMay 1996
UPMM.YOTCPK (Pink Sheets LLC)UNSPONSORED ADSUSUSDAug 2019

Biography

UPM-Kymmene Oyj operates in the forest-based bio industry. It operates through UPM Biorefining, UPM Energy, UPM Raflatac, UPM Specialty Papers, UPM Communication Papers, UPM Plywood, and Other operations segments. The company provides eucalyptus, birch, and softwood pulp grades for tissue, specialty and graphic papers, boards, and packaging; sawn timber for construction, packaging, distribution, joinery, and furniture industries; and wood-based renewable diesel and renewable naphtha for fuel distributors, transportation, and oil and petrochemicals industries. It is also involved in the generation of electricity through hydro, nuclear, and condensing power plants. In addition, the company offers self-adhesive papers and film label stocks for product and information labelling to label printers and brand owners in food, beverage, personal care, pharmaceutical, and retail segments; label papers and release liners, fine papers, and flexible packaging, as well as label and packaging papers production lines for retailers, printers, publishers, distributors, and paper converters; and graphic papers for advertising, magazines, newspapers, and home and office to publishers, cataloguers, retailers, printers, and merchants. Further, it provides plywood and veneer products for construction, vehicle flooring, liquefied natural gas shipbuilding, and other manufacturing industries; wood and wood-based biomass, and forestry services for woodland and forest owners; outdoor products for construction, and granulates for injection molding and extrusion; wood-based lignin products for industrial use and cell culture hydrogel products for biomedical applications; and biomedical products. The company primarily operates in Europe, North America, and Asia. UPM-Kymmene Oyj was founded in 1995 and is headquartered in Helsinki, Finland. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/19 20:55
End of Day Share Price2020/02/19 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.