UPM Annual Report 2016

Stakeholders

In brief

Strategy

Businesses

Governance

Accounts

Value creation

INDIRECT DOWNSTREAM

IMPACT OF THE CHAIN

INDIRECT UPSTREAM

DIRECT UPSTREAM

DIRECT DOWNSTREAM

UPM

Number of suppliers 55,000

Sales, unconsolidated EUR 10,821 million Comparable EBIT EUR 1,143 million Comparable ROE 10.9% Corporate income taxes and property taxes paid EUR 181 million Payments to providers of loans EUR 32 million Value of ecolabelled products EUR 6.7 billion

Number of customers 12,000

Customer and supplier value

Supplier Code qualified supplier spend 80%

Prosperity for sphere of influence

Number of countries where UPM products are sold 120

RAW MATERIAL COSTS EUR 4.0 billion

PRODUCTS

Paper 9,400,000 t Chemical pulp 3,500,000 t

Ecosystem services over EUR 400 million ENVIRONMENTAL SOCIAL ECONOMICAL / GOVERNANCE Skilled employees New hires 1,900 Number of restricted chemical substances in UPM screening 5,600 UPM forests available for free recreation use 715,000 ha Certified wood 84% Percentage of wood origin known 100% Seedlings planted 50 million

Enhanced business practices

Capital employed

10,657 million

Multiplicative effects of value added EUR 2.7 billion

EUR

Smart substitution of non-renewables with renewables

ENVIRONMENTAL SOCIAL ECONOMICAL / GOVERNANCE

Fluff pulp 52,000 t

Net debt

1,131 million

EUR

Converting materials 520,000 t Plywood and veneer 760,000 m 3 Sawn timber 1,400,000 m 3 Electricity 9,300 GWh

RAW MATERIALS

Wood 27,800,000 m 3

Market pulp 1,900,000 t

Recovered paper 2,800,000 t

Purchase power of workforce and shareholders EUR 1,646 million

Prosperity for sphere of influence

Dividend distribution EUR 400 million

Market cap

12,452 million

EUR

Employee wages and benefits EUR 1,246 million Lost-time accident frequency employees 3.7 contractors 6.2

Improved employee wellbeing

Purchased paper for converting 440,000 t

Co-mingled domestic waste 180,000 t

Minerals 2,300,000 t

People using UPM products over 250 million

Approx. 85,000 shareholders

Employee skills enhanced

Plastics, adhesives, resins, films 200,000 t

Training hours/employee 13

Heat 660 GWh

Groups benefitted from Biofore Share and Care programme 390

Increasing quality of life through product use and Biofore Share and Care programme

Employee engagement 69%

By-products (waste for recycling) 1,100,000 dry t

Biofore Share and Care donations and sponsorships EUR 2.4 million

19,310 employees

New patents over 50

WATER UPTAKE

Vitality for sphere of influence

Surface water 430 million m 3

Carbon stored in UPM products 20 million t

Sustainable use of natural resources

ENERGY

Ground water 21 million m 3

Renewable fuels 29,000 GWh

54 production sites in 12 countries

EMISSIONS TO AIR

Process waste water 210 million m 3 EMISSIONS TO WATER

SOLID WASTE

Virgin materials replaced 3.9 million t

Circular economy and innovations

Nitrogen oxides 9,600 t

To landfills, 125,000 dry t

Fossil fuels 13,000 GWh

Communal water 5 million m 3

2 emissions scope

CO

Climate change mitigation

Sulphur dioxide 1,400 t

Chemical oxygen demand 69,400 t Biological oxygen demand (7days), 8,800 t Adsorbable organic halogens 340 t

To temporary storage 18,000 dry t

3 downstream 3.5 million t

Water intensive production sites located in water abundant areas 100%

Purchased electricity 13,000 GWh

969,000 ha forests and plantations

Particulates 840 t

Hazardous waste for special treatment 6,000 t To incineration without energy recovery 3,000 dry t

Externality value of scope 1, 2 and 3 CO 2 emissions EUR 73 million

Biodiversity enhanced

Purchased heat 330 GWh

2 emissions scope

CO

2 & 3 upstream 6.9 million t

Carbon dioxide (fossil) scope 1 3.7 million t

CONTENTS

70

71

UPM Annual Report 2016

UPM Annual Report 2016