Filed by UPM-Kymmene Corporation
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed the pursuant to Rule 14a-12
of the Securities Act of 1934
Subject Company: Champion International Corporation
Commission File No.: 001-03053
[Presentation posted by UPM-Kymmene Corporation
on its web site on March 14, 2000]
[Slide 1]
These materials contain certain statements that are neither reported financial
results nor other historical information. These statements are forward-looking
statements within the meaning of the safe-harbor provisions of the U.S. federal
securities laws. These forward-looking statements are subject to risks and
uncertainties that could cause actual results to differ materially from those
expressed in the forward-looking statements. Many of these risks and
uncertainties relate to factors that are beyond the companies' ability to
control or estimate precisely, such as future market conditions, the behavior of
other market participants and the actions of governmental regulators. These and
other risk factors are detailed in the two companies' SEC reports. Readers are
cautioned not to place undue reliance on these forward-looking statements, which
speak only as of the date of these materials. The companies do not undertake any
obligation to publicly release any revisions to these forward-looking statements
to reflect events or circumstances after the date of these materials.
Investors and security holders are advised to read the joint proxy
statement/prospectus regarding the business combination transaction referenced
in the foregoing information, when it becomes available, because it will contain
important information. Such joint proxy statement/prospectus will be filed with
the Securities and Exchange Commission by UPM-Kymmene and Champion
International. Investors and security holders may obtain a free copy of the
joint proxy statement/ prospectus (when available) and other related documents
filed by UPM-Kymmene and Champion International at the Commission's website at
www.sec.gov. The joint proxy statement/prospectus and the other documents may
also be obtained from UPM-Kymmene by contacting UPM-Kymmene, Attn: Reko
Aalto-Setala, Etelaesplanadi 2, FIN-00101 Helsinki, Finland, and/or Champion
International by contacting Champion International, Attn: Tom Hart, One Champion
Plaza, Stamford, Connecticut 06921.
Champion International, its directors, executive officers and certain other
members of Champion International management and employees may be soliciting
proxies from Champion International shareholders in favor of the merger.
Information concerning the participants will be set forth in the joint proxy
statement/prospectus when it is filed with the Securities and Exchange
Commission.
[Slide 2]
[Logo of UPM]
Jan-Henrik Kulp, CFO
March, 2000
<PAGE>
[Slide 3]
FOCUS ON CORE BUSINESSES - SALES
[Two pie charts representing the following information:
1996
Sold business and Closed businesses EUR 2.3 billion
Business still a part of the company EUR 6.4 billion
Total: EUR 8.7 billion
1999
Printing Papers 56%
Wood Products 15%
Converting Materials 21%
Others 8%
Total: EUR 8.3 billion
Synergy benefits of EUR 300 million achieved]
[Slide 4]
PAPER PRODUCTION
[Bar graph representing the following information:
Paper production Capacity utilization of paper machines
(1000 tonnes) (%)
I/96 1556 84
II/96 1391 82
III/96 1594 86
IV/96 1593 88
I/97 1766 93
II/97 1701 95
III/97 1841 96
IV/97 1890 98
I/98 1951 97
II/98 1870 96
III/98 1944 94
IV/98 1733 87
I/99 1747 85
II/99 1758 88
III/99 2002 94
IV/99 1987 95]
<PAGE>
[Slide 5]
STRONG CASH FLOW
[Bar graph representing the following information (MEUR):
Operative capex. Strategic capex Depreciation Cash flow*)
88 259 843 240 723
89 418 753 323 607
90 469 1115 398 533
91 407 317 453 161
92 297 262 497 335
93 270 58 533 525
94 416 170 531 851
95 448 379 523 1162
96 494 521 545 931
97 299 1025 541 1244
98 394 297 578 1607
*) Cash flow = Net income + depreciation]
[Slide 6]
USE OF CASH 1996-1999
[Bar graph representing the following information:
EUR million
Cash from operations 4487
Asset sales 2285
Capex -2541
Acquisitions -1080
Dividends -943
Share repurchase -526
Other -264
Debt reduction -1418
Result: Gearing
1995 112
1996 104
1997 93
1998 74
1999 55]
<PAGE>
[Slide 7]
NET INTEREST-BEARING LIABILITIES AND GEARING
Net Interest Bearing Liabilities (MEUR) Gearing (%)
90 4515 150
91 5393 200
92 6023 225
93 5613 196
94 4978 156
95 4358 112
96 4320 104
97 4252 93
98 3739 74
99 2940 55]
[Slide 8]
STRONG FINANCIAL RESOURCES
[Table stating the following:
Asset item Book value Market value Difference
EUR, million
Energy companies 538 1, 077 539
Real estates and housing 124 269 145
Listed companies 216 2,235*) 2,019
Total 878 3581 2703
*) 10.3.2000]
[Slide 9]
RETURN ON EQUITY (EUR)
Excl. Cap gains Target (10 year bond + 5%) ROE
90 16.8 3.3
91 16.5 0
92 15.7 0
93 14.7 0
94 12.2 12.9
95 20.7 13.6 22
96 8.3 11.1 10.4
97 10.4 11 16.6
98 13.4 9.93 21.8
99 10.9 9.93 19.2]
<PAGE>
[Slide 10]
EARNINGS PER SHARE (EUR)
Excl. Capital gains Capital gains, net
90 0.28 0.13
91 -1.69 0.03
92 -1.03 0.04
93 -0.25 0.2
94 1.28 0.17
95 2.6 0.16
96 1.14 0.31
97 1.64 0.98
98 2.34 1.48
99 2.13 1.63]
[Slide 11]
DIVIDEND PER SHARE
[Bar graph representing the following information:
Dividend per share (EUR)
90 0.23
91 0.11
92 0.06
93 0.15
94 0.37
95 0.76
96 0.76
97 0.93
98 1.09
99 1.25]
<PAGE>
[Slide 12]
TOTAL SHAREHOLDER RETURN ON UPM-KYMMENE SHARE
[Bar graph representing the following information:
88 1000
89 833
90 629
91 582
92 610
93 1126
94 1154
95 1112 1000
96 1342 1230
97 1548 1437
98 2016 1907
99 3259 3154
Total Shareholder Return
11 years 11.3%
4 years 33.3%]
[Slide 13]
WHY THE NEW CHAMPION
o Consistent and supportive with strategy formulated in 1996
o Improved profitability
o Strong - truly global forest product company
[Slide 14]
The merging companies have an excellent strategic fit for each other
o Same core businesses and product lines
o Parallel strategic intent
[Slide 15]
WORLDWIDE PRODUCT LINES PULP AND PAPER
[Table stating the following:
<TABLE>
<CAPTION>
Europe N-America S-America Total
UPM Champion UPM Champion UPM Champion
<S> <C> <C> <C> <C> <C> <C> <C>
Publication papers 5330 460 740 190 6720
Business papers 1950 1700 380 4030
Converting materials 850 480 1330
Paper and board, 8130 460 2920 570 12080
total
Chemical pulp, 2900 2790 340 6030
total
Paper, board 11030 460 5710 910 18110]
and pulp total
</TABLE>
<PAGE>
[Slide 16]
Strategy to increase shareholder value
o Increase shareholder value as principal goal
o Focus on core businesses
o Intensive co-operation with global and local customers
o Emphasis on profitability and financial discipline
o Responsible corporate citizen
o Take advantage of global growth opportunities
[Slide 17]
Strengths
o Global presence - production and sales
o Good long term customer relationships
o Efficient production capacity
o Economies of scale
o High level of vertical integration
o Integration of know-how and cultures
