UPM Annual Report 2018

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Inspired by the limitless opportunities of bioeconomy Delivering renewable and responsible solutions Innovating for a future beyond fossils

CONTENTS

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YEAR 2018 IN BRIEF Key performance indicators and main events.

46 STRATEGY IN ACTION

Our 2018 strategic actions for future growth and what’s ahead in 2019.

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8 FROM THE CEO

48 STAKEHOLDERS

President and CEO reviews the year 2018.

Dialogue and stakeholder engagement bring stability to our operations.

10 FROM FOSSILS TO BIOECONOMY We lead the forest-based bioindustry into a sustainable, innovation-driven and exciting future beyond fossils. 14 UPM STRATEGY – AIMING HIGHER We create value by seizing the limitless potential of bioeconomy.

54 OUR PEOPLE

Our culture of Aiming Higher sets the tone of everything we do and encourages all UPMers to develop as individuals and as a company. 62 SUSTAINABLE AND SAFE PRODUCTS Our products help to mitigate climate change and create value to society. Lifelong product stewardship is a key element of our responsible practices.

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16 FINANCIAL TARGETS

We are aiming higher in financial performance.

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18 SPEARHEADS FOR GROWTH

66 TAXES

Our transformative prospects provide opportunities for significant earnings growth.

UPM’s continuous improvement in its financial performance also generates higher tax revenue.

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20 INNOVATION FOR GROWTH

68 ENVIRONMENT

Our aim is to create sustainable solutions and to minimise dependency on fossil- based materials.

Our sustainable forestry, responsible water use, climate actions and circular economy thinking.

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24 VALUE FROM RESPONSIBILITY

78 SOCIETAL IMPACTS

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Responsibility is integrated into our Biofore strategy and our operations.

Comprehensive summary of the societal impacts of our activities and products.

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26 RESPONSIBILITY TARGETS

80 OUR GOVERNANCE AND COMPLIANCE

Our 2030 targets are guided by the Biofore strategy with positive contribution to UN Sustainability Development Goals (SDGs).

Awareness of our culture of integrity is a prerequisite for compliance.

99 REPORT OF THE BOARD OF DIRECTORS

32 BUSINESSES

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The direction and performance of our six business areas.

120 ACCOUNTS FOR 2018

Consolidated financial statements

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UPM ANNUAL REPORT 2018

UPM ANNUAL REPORT 2018