UPM Annual Report 2018

UPM PLYWOOD

UPM BIOREFINING • A versatile range of chemical pulp for many growing end uses with annual production capacity of 3.7 million tonnes produced in Finland and in Uruguay • Annual capacities in tonnes by mills: UPM Fray Bentos 1.3 million; UPM Pietarsaari 800,000; UPM Kaukas 770,000 and UPM Kymi 870,000 tonnes • 258,000 ha of plantation land in Uruguay • Certified sawn timber with annual capacity of 1.5 million cubic metres, produced at four sawmills in Finland • Wood-based renewable diesel and naphtha with the annual capacity of 120 million litres produced in Finland

UPM ENERGY • Cost competitive low-emission electricity generation in Finland consisting of hydro, nuclear and condensing power. • The total electricity generation capacity is 1,541 MW, including UPM’s own hydropower plants and shareholdings in other energy companies • Market agility and optimisation services for industrial consumers • Largest shareholdings: – 47.69% of Pohjolan Voima Oy (PVO), which is a majority shareholder (58.5%) in Teollisuuden Voima Oyj (TVO) – 19% of Kemijoki Oy’s hydropower shares Hydropower plants: Finland: Harjavalta, Kallioinen (Sotkamo), Kaltimo (Joensuu), Katerma (Kuhmo), Keltti (Kouvola), Kuusankoski (Kouvola), Tyrvää (Sastamala), Voikkaa (Kouvola) and Äetsä

UPM RAFLATAC

UPM SPECIALTY PAPERS • Labelling materials, release base papers, flexible packaging materials, office and graphic papers • Total annual production capacity of 2.0 million tonnes Paper mills China: UPM Changshu Germany: UPM Nordland Papier (Dörpen) (under construction) Finland: UPM Jämsänkoski (Jämsä) and UPM Tervasaari (Valkeakoski)

UPM COMMUNICATION PAPERS

• Plywood and veneer products mainly for construction, vehicle flooring and LNG shipbuilding as well as other manufacturing industries • Production capacity: approximately one million cubic metres • Production in 9 mills in Finland, Estonia and Russia

• Self-adhesive label materials for product and information labelling • 10 factories and 29 slitting and distribution terminals in all continents

• Magazine paper, newsprint and fine papers for a wide range of end uses • Annual paper production capacity of 8.2 million tonnes, manufactured in 15 paper mills • Capacities: Annual production capacity of 4.0 million tonnes of magazine papers, 2.1 million tonnes of newsprint and 2.1 million tonnes of fine papers • The combined heat and power (CHP) plants operating on paper mill sites included in the business area Finland: UPM Jämsä River Mills (Jämsänkoski and Kaipola), UPM Kaukas (Lappeenranta), UPM Kymi (Kouvola) and UPM Rauma France: UPM Chapelle Darblay (Grand-Couronne) Germany: UPM Augsburg, UPM Ettringen, UPM Hürth, UPM Nordland Papier (Dörpen), UPM Plattling and UPM Schongau United Kingdom: UPM Caledonian Paper (Irvine), UPM Shotton Paper USA: UPM Blandin (Grand Rapids, MN) Paper mills Austria: UPM Steyrermühl

Labelstock factories China: Changshu Finland: Tampere France: Nancy Malaysia: Johor Poland: Kobierzyce (Wroclaw) and Nowa Wieś (Wroclaw) United Kingdom: Scarborough USA: Mills River, NC; Fletcher, NC and Dixon, IL

Plywood mills Estonia: UPM Otepää

Finland: UPM Joensuu, UPM Jyväskylä, UPM Pellos (3 mills, Ristiina, Mikkeli) and UPM Savonlinna Russia: UPM Chudovo Veneer mill Finland: UPM Kalso (Vuohijärvi, Kouvola)

Market position #1 #1

Pulp mills Finland: UPM Kaukas (Lappeenranta), UPM Kymi (Kouvola) and UPM Pietarsaari Uruguay: UPM Fray Bentos and sustainable eucalyptus plantations Sawmills Finland: UPM Alholma (Pietarsaari), UPM Kaukas (Lappeenranta), UPM Korkeakoski (Juupajoki) and UPM Seikku (Pori) Biorefinery Finland: UPM Lappeenranta Biorefinery (Lappeenranta)

Slitting and distribution terminals Argentina: Buenos Aires Australia: Adelaide, Brisbane and Melbourne Brazil: Jaguariúna Chile: Santiago China: Chengdu, Guangzhou and Tianjin India: Bangalore and Navi Mumbai Indonesia: Jakarta Italy: Osnago México: Ciudad de México and Guadalajara New Zealand: Auckland Russia: Moscow and St Petersburg South Africa: Cape Town and Johannesburg South Korea: Seoul Spain: Barcelona Thailand: Bangkok Turkey: Istanbul Ukraine: Kiev USA: Dallas, TX, Ontario, CA and Seattle, WA Vietnam: Binh Thang Ward Di An District #2 globally Market position

Labelling materials globally

High-quality office paper segment in China

Market position

#2 in Market position

#1 #1

High and mid segments in EMEA

Finland

Market position

LNG plywood globally

#1 in

Europe

#8 Pulp Market position

globally

Competitive businesses, strong market positions

OTHER OPERATIONS

Our 19,000 people work in 46 countries across six continents. With head office in Finland, our most important markets are in Europe, Asia and North America.

• Wood Sourcing and Forestry: Purchasing wood and biomass in 15 countries, 512,000 ha of own forest land in Finland and 76,000 ha in the USA, offering forestry services to private forest owners in Finland • UPM Biochemicals: Developing glycols, lignin products and biomedical products • UPM Biocomposites producing UPM ProFi outdoor products and UPM Formi composite material for injection moulding and extrusion

Biochemicals innovation unit Finland: Biomedicum research and educational centre, Helsinki Biocomposites mills Finland: UPM Lahti Germany: UPM Bruchsal (Karlsruhe)

Production plant Slitting and distribution terminal Group Head Office

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CONTENTS

UPM ANNUAL REPORT 2018

UPM ANNUAL REPORT 2018