Living Plans · Public assumption audit

Evidence pass 2026-10-05 · open sources only

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Public assumption audit · UPM

UPM's long-term financial targets, reported through 2025

UPM's targets page carries long-term ROCE targets per business area, a 10% comparable ROE aim, an EBIT-growth target and a net debt/EBITDA policy of about 2x or less — and it self-reports the actuals next to them. Three of the four group measures missed in 2025: comparable EBIT fell 25% to EUR 921m, comparable ROE ran at 6.5% against the 10% aim, and leverage rose to 2.29x and then 2.36x by June 2026. Meanwhile the portfolio the targets describe is being redrawn: Plywood is being demerged into WISA Group (planned 31 October 2026) and Communication Papers is headed into a 50/50 joint venture with Sappi.

02

Broken

04

Unresolved

05

Holds

Document
UPM's long-term financial targets, reported through 2025
Organisation
UPM
Published
2026-02-04
Audited
2026-10-05
Assumptions
11 extracted, 11 checked
Sources
9 public, 6 dated

Audited from: https://www.upm.com/investors/upm-as-an-investment/financial-targets/

§ 01 · How this was made

01

The document, as published

We read only what the organisation published itself, at the address above. Nothing is inferred about its private intentions.

02

Assumptions, in its own words

Each assumption is a belief the plan needs to be true, quoted back to the sentence it came from. Goals and values are not assumptions.

03

Two searches each

One search for what the record says, one aimed at finding the contradiction. The verdict follows the sources, and the sources are listed.

Draft · machine-written, unsigned. No person at UPM has been asked to sign any verdict here, and none of it is a decision. In the paid product a named human signs or rejects every break, which is what makes the record defensible. This audit is the method shown in public on a document anyone can check.

§ 02Broken · 2
  1. Assumption 03Broken

    UPM can restore comparable ROE to 10% after it fell to 6.5% in 2025.

    Stated in the document as
    “UPM aims for a 10% return on equity.”
    What rests on it
    The 10% ROE target, which has not been met in any of the three reported years.

    Verdict · Broken · draft, unsigned

    The assumption is that UPM can restore comparable ROE to 10%. The H1 2026 half-year report (published 23 July 2026) reports comparable ROE of 7.6% for Q1–Q2/2026 and 6.5% for the full year Q1–Q4/2025. Both figures measure comparable ROE for UPM total, the same measure and scope the assumption asserts. The latest half-year figure is 2.4 percentage points below the 10% target and has not reached that level in any reported period; the direction of travel does not close the gap within the remaining half-year.

    Evidence trail · 3 sources

  2. Assumption 04Broken

    UPM's net debt/EBITDA ratio will return to approximately 2x or below after breaching the policy at 2.29x in 2025.

    Stated in the document as
    “UPM's financial policy on leverage is based on net debt/EBITDA ratio approximately 2 or less.”
    What rests on it
    The leverage policy of net debt/EBITDA approximately 2x or less, currently breached.

    Verdict · Broken · draft, unsigned

    UPM's own Half Year Financial Report 2026 (published 23 July 2026) reports net debt to EBITDA (last 12 months, UPM total) at 2.36 at end-June 2026, rising from 2.29 at end-2025. The assumption asserts the ratio will return to approximately 2x or below; the latest reported figure is moving further above that level, not towards it.

    Evidence trail · 2 sources

§ 03Unresolved · 4
  1. Assumption 05Unresolved

    UPM Fibres ROCE will recover toward its 14% target from the current 4.2% actual.

    Stated in the document as
    “UPM Fibres ROCE % target is 14, actual 2025 is 4.2.”
    What rests on it
    UPM Fibres long-term ROCE target of 14%, underpinning growth investment decisions in that segment.

    Verdict · Unresolved · draft, unsigned

    No dated source reports a UPM Fibres segment ROCE figure for any 2026 period. The targets page actuals show 4.2% (2025) against the 14% target, the third consecutive year far below it (1.7% in 2023, 7.5% in 2024). H1 2026 CEO commentary reports efficiency improvements in Fibres South fully offsetting logistics cost increases, but discloses no segment ROCE; the supporting group-level ROCE rise is not Fibres evidence.

    Evidence trail · 2 sources

  2. Assumption 07Unresolved

    UPM Adhesive Materials ROCE will recover to its 20% target from 14.4% in 2025.

    Stated in the document as
    “UPM Adhesive Materials ROCE % target is 20, actual 2025 is 14.4.”
    What rests on it
    UPM Adhesive Materials long-term ROCE target of 20%, informing capital allocation to that business.

    Verdict · Unresolved · draft, unsigned

    No dated source reports a segment-level ROCE figure for UPM Adhesive Materials in any 2026 period. The H1 2026 own record contains no segment ROCE breakdown, and the financial targets page carrying the 14.4% figure is undated and cannot decide the verdict.

    Evidence trail · 3 sources

  3. Assumption 10Unresolved

    UPM Energy ROCE will reach its 6% target, having come close at 5.8% in 2025.

    Stated in the document as
    “UPM Energy ROCE %** target is 6, actual 2025 is 5.8.”
    What rests on it
    UPM Energy long-term ROCE target of 6%, with assets valued at fair value.

    Verdict · Unresolved · draft, unsigned

    The half-year report does not report a UPM Energy segment ROCE figure. The measure the assumption asserts is absent from the record; only group-level ROCE is disclosed.

    Evidence trail · 1 source

  4. Assumption 11Unresolved

    Top financial performance mitigates risk from the business environment for a forest industry company.

    Stated in the document as
    “Top performance drives value creation and mitigates risk related to the business environment.”
    What rests on it
    The overall strategic rationale for setting and pursuing all financial targets listed.

    Verdict · Unresolved · draft, unsigned

    What the own record reports is improving financial results, not whether those results reduced exposure to business-environment risk. The assumption is a causal strategic proposition; the sources contain no outcome measure for risk mitigation, only the financial performance figures themselves. That is the performance, not evidence that it mitigates risk.

    Evidence trail · 1 source

§ 04Holds · 5
  1. Assumption 01Holds

    UPM's business cycles will allow ROCE targets to be met on average over the long term.

    Stated in the document as
    “Business areas target attractive long-term returns (ROCE %), which apply over investment and business cycles and enables value-creating growth investments.”
    What rests on it
    All six business-area ROCE targets, four of which are currently below target.

    Verdict · Holds · draft, unsigned

    Group comparable ROCE rose from 5.7% (H1 2025) to 6.9% (H1 2026), and the undated targets page shows ROCE improving year-on-year in several business areas, consistent with cyclical recovery toward long-term targets. Direction of travel supports the assumption.

    Evidence trail · 3 sources

  2. Assumption 02Holds

    UPM can grow comparable EBIT over time despite a decline from EUR 1,224m in 2024 to EUR 921m in 2025.

    Stated in the document as
    “At the group level, UPM is targeting comparable EBIT growth.”
    What rests on it
    The group-level comparable EBIT growth target, which is the primary group performance measure.

    Verdict · Holds · draft, unsigned

    UPM total comparable EBIT for H1 2026 was €504 million against €413 million in H1 2025, a 22% increase year-on-year, showing growth from the 2025 trough of €921 million. The H1 2026 run-rate of €504 million already exceeds half the full-year 2025 figure, confirming the upward direction of travel.

    Evidence trail · 2 sources

  3. Assumption 06Holds

    UPM Communication Papers will sustain free cash flow/capital employed above its 14% target over time.

    Stated in the document as
    “UPM Communication Papers FCF/CE% target is 14, actual 2025 is 33.5.”
    What rests on it
    The FCF/CE target for Communication Papers, which currently far exceeds target but is in a structurally declining market.

    Verdict · Holds · draft, unsigned

    The targets page actuals show FCF/CE above the 14% target three consecutive years: 47.7% (2023), 22.1% (2024), 33.5% (2025). Caveat on the 'over time': UPM and Sappi signed a definitive agreement on 28 May 2026 to move UPM Communication Papers into a 50/50 graphic paper joint venture, so the target will pass to the JV rather than remain a UPM business-area target.

    Evidence trail · 1 source

  4. Assumption 08Holds

    UPM Plywood ROCE will recover to its 18% target from 15.4% in 2025.

    Stated in the document as
    “UPM Plywood ROCE % target is 18, actual 2025 is 15.4.”
    What rests on it
    UPM Plywood long-term ROCE target of 18%, informing investment decisions in that segment.

    Verdict · Holds · draft, unsigned

    The H1 2026 half-year report shows UPM Plywood (discontinued operations) ROCE of 21.9% for Q1–Q2/2026, already above the 18% target, up from 16.4% in Q1–Q4/2025. Direction of travel strongly supports recovery. Context that changes the reading: Plywood is presented as discontinued operations in H1 2026 under IFRS 5 because the Board approved a demerger plan (29 April 2026) to separate it into a new listed company, WISA Group Plc, planned to complete 31 October 2026 — the returns belong to a business leaving the group.

    Evidence trail · 1 source

  5. Assumption 09Holds

    UPM will pay dividends of at least half of comparable earnings per share over time.

    Stated in the document as
    “UPM aims to pay attractive dividends, targeting at least half of the comparable earnings per share over time.”
    What rests on it
    The dividend policy of at least 50% of comparable EPS, which depends on sustained earnings generation.

    Verdict · Holds · draft, unsigned

    The 2025 financial statements release reports the dividend for 2025 was €1.50 per share, representing 113% of comparable EPS, well above the 50% target. The dividend history page confirms €1.50 per share was also paid for 2022, 2023 and 2024.

    Evidence trail · 3 sources

§ 05 · One ask

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