Increasing capital returns...but not quite yet Today UPM hosted a CMD in London, the company''s first since 2021 and its first under Massimo Reynaudo (CEO since 1 January). Overall strategic priorities for the group are unchanged and no new major projects were announced. The capital returns framework retains possibility of a buyback but no immediate action is being taken whilst there was some caution regarding profit ramp profile of the Leuna biochemicals plant. Overall, the market has concluded the event mildly underwhelming, but with fundamentals intact and valuation undemanding we reiterate our Outperform rating. UPM will continue to run Communication Paper for cash This structurally declining segment remains a cash cow for the group - with stable FCF over the last five years versus the prior five as capacity is managed - with no plans to dispose. Strategically simplifying the rest of UPM, management presented plans under three areas, though there are no immediate plans to change segmental reporting: Renewable Fibres (Biomaterials segment), Advanced Materials (Specialty Paper, Raflatac labels and Plywood) and Decarbonisation Solutions (Energy and key elements of Other segments). Although rebranded, these three areas largely echo the ''Spearheads of Growth'' avenues under prior leadership. In Fibres the company indicated c600kT further pulp potential The Paso de Los Toros mill in Uruguay is now operating at its nominal 2.1mT annual capacity and should still reach the long-standing $280/tonne EBITDA cost target once overland logistics fully shift to rail (end 2024) and plantation self-sufficiency reaches 80% (2027, from c.68% today). The timeframe to the cost target is somewhat disappointingly behind our end 2025 target. However, in more positive news, management estimates Uruguay can achieve a further 200-300kT output based on performance so far, with another 300kT possible with debottlenecking investments. Long term, the company is laying the...