UPM Annual Report 2018

UPM AT A GLANCE

STRATEGY

BUSINESSES

SOCIETY AND ENVIRONMENT

GOVERNANCE AND COMPLIANCE

REPORT OF THE BOARD OF DIRECTORS

FINANCIAL STATEMENTS

AUDITOR’S REPORT

OTHER FINANCIAL INFORMATION

Group Executive Team

Jussi Pesonen President and CEO M.Sc. (Eng.) Born 1960, Finnish citizen

Jyrki Ovaska Executive Vice President, Technology M.Sc. (Eng.) Born 1958, Finnish citizen Member of the Group Executive Team since 2002, employed by UPMGroup since 1984 UPM shares 87,627

President and CEO of UPM-Kymmene Corporation since 2004. COO of UPM Paper Divisions and Deputy to the President and CEO 2001–2004. Several management positions in UPMPaper Divisions 1987–2001. Chairman of the Board of the Finland Chamber of Commerce and ICC Finland. Deputy Chairman of the Board of the Finnish Forest Industries Federation (FFIF). Board member of UPM-Kymmene Corporation, the Confederation of European Paper Industries (CEPI) and the East Office of Finnish Industries Oy.

President, Paper Business Group 2008–2013. President, Magazine Paper Division 2004–2008. President, Fine and Speciality Papers Division 2002–2003. Several management positions at United Paper Mills Ltd and UPMGroup in the Printing Papers Division 1984–2001. Chairman of the Board of CLIC Innovation Oy. Member of the Finnish Research and Innovation Council.

Member of the Group Executive Team since 2001, employed by UPMGroup since 1987 UPM shares 418,859

Tapio Korpeinen Chief Financial Officer, Executive Vice President, UPMEnergy M.Sc. (Tech.), MBA Born 1963, Finnish citizen

Riitta Savonlahti Executive Vice President, Human Resources M.Sc. (Econ.) Born 1964, Finnish citizen

CFO since 2010. President, Energy and Pulp Business Group 2008–2010. Vice President, Corporate Development and Senior Vice President, Strategy, UPM 2005–2008. Several management positions at Jaakko PöyryConsulting in Finland and North America 1991–1998 and 1999–2005. A.T. Kearney in Finland 1998–1999 and McKinsey & Company in Sweden 1988–1990. Chairman of the Board of Pohjolan Voima Oy. Vice Chairman of the Board of Kemijoki Oy. Board member of Teollisuuden Voima Oyj. Supervisory Board member of Varma Mutual Pension Insurance Company.

Senior Vice President, Human Resources at Elcoteq Network Corporation 2001– 2004. Senior Vice President, Human Resources at Raisio Group 2000–2001. Human Resources Manager at Nokia Mobile Phones, Salo Operations 1995–2000. Human Resources positions at ABB 1990–1994. Supervisory Board member of IlmarinenMutual Pension Insurance Company. Member of Labour Markets Committee of the Finnish Forest Industries Federation (FFIF). Member of Work, Education and Skills Committee of the Finland Chamber of Commerce. Senior Vice President, Newspaper Publishing, UPMPaper ENA 2013–2016. Several leadership positions in the UPMpaper business 2001–2013. Project Manager, Investments, Haindl Papier GmbH 1993–2001. Project Engineer, Hoerbiger Automotive 1991–1992. Chairman of the Board of the German Pulp and Paper Association (VDP). Vice Chairman of the Board of the Bavarian Industry Association (vbw). Board member of the Confederation of European Paper Industries (CEPI) and the Federation of German Industries (BDI).

Member of the Group Executive Team since 2004, employed by UPMGroup since 2004 UPM shares 15,354

Member of the Group Executive Team since 2008, employed by UPMGroup since 2005 UPM shares 147,064

Bernd Eikens Executive Vice President, UPM Specialty Papers Ph.D. (Eng.) Born 1965, German citizen

Winfried Schaur Executive Vice President, UPMCommunication Papers Dipl. Ing. (FH) Born 1965, German citizen Member of the Group Executive Team since 2016, employed by UPMGroup since 2001 UPM shares 30,969

Executive Vice President, UPMPaper ENA 2013–2016. Senior Vice President, Supply Chain, Paper Business Group 2008–2013. President, UPM-Kymmene Inc. North America 2005–2008. Several management positions at UPMNordland Papier 1998–2005. Senior Process Engineer, International Paper Co. 1996–1998. Supervisory Board member of Johann Bunte Bauunternehmung GmbH& Co. KG. Advisory Board member of Meyer Turku Oy.

Member of the Group Executive Team since 2013, employed by UPMGroup since 1998 UPM shares 65,462

Pirkko Harrela Executive Vice President, Stakeholder Relations M.A. Born 1960, Finnish citizen

Mika Sillanpää Executive Vice President, UPMPlywood M.Sc. (Eng.) Born 1958, Finnish citizen

Executive Vice President, Corporate Communications 2004–2013. Vice President, Corporate Communications of UPM 2003. Several positions in Communications in Finnpap and UPMPaper Division 1985–2002. Member of S-Group’s CSR Advisory Group. Supervisory Board member of WWF Finland. Board member of Deutsch-Finnische Handelskammer, Satalinna Foundation and UPM-Kymmene Cultural Foundation. Member of the Board of Governors of the Association for FinnishWork.

Vice President, Sourcing, UPMRaflatac Group 2008–2013. Senior Vice President, Strategic Development, UPMRaflatac Group 2003–2008. Vice President, UPM Raflatac Europe 2001–2003. Several management positions at UPMRaflatac in Finland and in France 1985–2000. Board member of the Federation of the FinnishWoodworking Industries.

Member of the Group Executive Team since 2004, employed by UPMGroup since 1985 UPM shares 80,837

Member of the Group Executive Team since 2013, employed by UPMGroup since 1985 UPM shares 39,388

Antti Jääskeläinen Executive Vice President, UPMRaflatac M.Sc. (Eng.), M.Sc. (Econ.), MBA Born 1972, Finnish citizen Member of the Group Executive Team since 2016, employed by UPMGroup since 2014 UPM shares 14,178

Kari Ståhlberg Executive Vice President, Strategy M.Sc. (Eng.) Born 1971, Finnish citizen

Senior Vice President, EMEIA, UPMRaflatac 2014–2016. Senior Vice President, Head of Global Operations, Amer Sports 2012–2014. Chief Development Officer, member of the Group Executive Board, Amer Sports 2009–2014. Several management positions at Stora Enso in Finland, Sweden and the UK 2004–2009. Engagement Manager & Associate, McKinsey & Company 2002–2004. Business Operations Manager, Nokia Networks in Finland and Italy 1998–2001. Financial Analyst, Enso Group 1997–1998.

Senior Vice President, Corporate Strategy 2010–2013. Director, M&A, UPM- Kymmene Corporation 2007–2010. Investment Manager at Finnish Industry Investment Ltd 2006–2007. M&A Advisor at JP Capital International Limited in the UK 2000–2006. Management Consultant at Jaakko Pöyry Consulting Oy 1998–2000.

Member of the Group Executive Team since 2013, employed by UPMGroup since 2007 UPM shares 30,544

Juha Mäkelä General Counsel LL.M. Born 1962, Finnish citizen

Heikki Vappula Executive Vice President, UPM Biorefining until 23 Nov. 2018 M.Sc. (Econ.) Born 1967, Finnish citizen Member of the Group Executive Team 2010–2018, employed by UPMGroup since 2006

Group General Counsel since 2005. Positions as legal counsel and senior legal counsel in KONE Corporation 1997–2004. Several positions in law firms 1991– 1996. Supervisory Board member of Kemijoki Oy.

President, Energy and Pulp Business Group 2010–2013. Senior Vice President, UPM Sourcing 2006–2010. Several management positions at Nokia Group in Finland, Denmark, UK and Hungary 1993–2006. Board member of the Finnish Forest Industries Federation (FFIF) 2012–2018.

Member of the Group Executive Team since 2008, employed by UPMGroup since 2005 UPM shares 62,467

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CONTENTS

UPM ANNUAL REPORT 2018

UPM ANNUAL REPORT 2018