UPM Annual Report 2019

Board of Directors’ proposal for the distribution of profit

Adjusted share related indicators

2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 1.99 2.80 1.82 1.65 1.72 0.96 0.63 -2.14 0.88 1.08 2.07 2.24 1.88 1.65 1.38 1.20 0.91 0.74 0.93 0.99 18.87 18.36 16.24 15.43 14.89 14.02 14.08 14.18 14.22 13.64 1.30 1.30 1.15 0.95 0.75 0.70 0.60 0.60 0.60 0.55

Earnings per share (EPS), EUR Comparable EPS, EUR Equity per share, EUR Dividend per share, EUR 1) Dividend to earnings ratio, % Dividend to operating cash flow, %

65.4 46.4 63.0 57.6 43.6 72.9 95.2 neg.

68.2 50.9

38

52

42

30 4.1

34

30 5.1

43 4.9

30

30 7.1

29

Effective dividend yield, %

4.2

5.9

4.4

4.4

6.8

4.2

P/E ratio

15.5

7.9 14.2 14.1 10.0 14.2 19.5 neg.

9.7 12.2

Operating cash flow per share, EUR

3.46 2.49 2.74 3.16 2.22 2.33 1.39 1.98 1.99 1.89

The Board of Directors proposes to the Annual General Meeting of UPM-Kymmene Corporation to be held on 31 March 2020 that a dividend of EUR 1.30 per share be paid based on the balance sheet to be adopted for the financial year ending 31 December 2019 and that the remaining portion of the distributable funds be retained in the Company’s unrestricted shareholders’ equity. The dividend will be paid to a shareholder who is registered in the Company’s shareholders’ register held by Euroclear Finland Ltd on the dividend record date of 2 April 2020. The Board of Directors proposes that the dividend be paid on 16 April 2020.

On the date of the dividend proposal, 30 January 2020,the Company’s registered number of shares is 533,735,699. The aforementioned number of shares includes 411,653 treasury shares which are not entitled to dividend. As a result, the proposed dividend would total EUR 693.3 million. On 31 December 2019, the distributable funds of the parent company were EUR 3,968,806,884.13 including EUR 756,182,443.15 profit for the period. No material changes have taken place in respect of the Company’s financial position after the balance sheet date. In the opinion of the Board of Directors, the proposed distribution of profits does not risk the solvency of the Company.

Dividend distribution, EURm 1) Share price at 31 Dec., EUR

693 693

613 507 400 373

317

317

315 286

30.91 22.15 25.91 23.34 17.23 13.62 12.28 8.81 8.51 13.22 21.10 21.69 20.82 13.71 13.19 10.07 7.30 7.82 7.34 7.37 31.49 34.70 26.69 23.41 19.26 13.99 13.02 10.98 15.73 13.57 25.73 28.86 23.89 17.51 16.37 12.26 9.42 9.21 11.17 10.43 16,485 11,813 13,818 12,452 9,192 7,266 6,497 4,633 4,466 6,874 9,695 9,980 8,460 6,749 7,469 6,233 5,308 5,534 8,835 8,243 376,801 345,822 354,053 385,355 456,168 508,318 563,382 600,968 790,967 790,490 70.7 64.8 66.4 72.2 85.5 95.6 106.7 114.4 151.5 152.0

Lowest quotation, EUR Highest quotation, EUR

Average quotation for the period, EUR

Market capitalisation, EURm

Shares traded, EURm 2) Shares traded (1,000)

Shares traded, % of all shares Number of shares, average (1,000)

533,324 533,324 533,415 533,505 533,505 531,574 527,818 525,434 521,965 519,970 Number of shares at the end of period (1,000) 533,736 533,736 533,736 533,736 533,736 533,736 529,302 526,124 524,973 519,970 of which treasury shares (1,000) 412 412 412 231 231 231 231 231 211 – 1) 2019 proposal 2) Trading on the Nasdaq Helsinki Main Market. Treasury shares bought by the company are included in shares traded.

The definitions of share related indicators are described below

Signatures of the annual accounts and the report of the Board of Directors for the year 2019

SHARE RELATED INDICATORS Earnings per share (EPS), EUR

DEFINITION

Profit for the period attributable to owners of the parent company divided by adjusted average number of shares during the period excluding treasury shares. Earnings per share calculated in accordance with IFRS excluding items affecting comparability and their tax impact. Equity attributable to the owners of the parent company in relation to the adjusted number of shares at the end of period.

Comparable EPS, EUR

Helsinki, 30 January 2020

Equity per share, EUR

Dividend per share, EUR Dividend to earnings ratio, %

Dividend distribution divided by adjusted number of shares at the end of period.

Dividend per share as a percentage of earnings per share. Dividend to operating cash flow, % Dividend per share as a percentage of operating cash flow per share. Effective dividend yield, % Adjusted dividend per share as a percentage of adjusted share price at 31.12. P/E ratio Adjusted share price in relation to the earnings per share. Operating cash flow per share, EUR

Björn Wahlroos

Berndt Brunow

Henrik Ehrnrooth

Chair

Piia-Noora Kauppi

Marjan Oudeman

Jussi Pesonen President and CEO

Operating cash flow divided by adjusted average number of shares during the period excluding treasury shares. Total number of shares (excluding those held as treasury shares) multiplied by the share price at the end of period.

Market capitalisation, EURm

Adjusted share price at the end of period Share price at the end of period in relation to share issue coefficient. Adjusted average share price

Total value of shares traded in relation to adjusted number of shares traded during the period.

Ari Puheloinen

Veli-Matti Reinikkala

Suzanne Thoma

Kim Wahl

142

143

UPM ANNUAL REPORT 2019

UPM ANNUAL REPORT 2019

CONTENTS

ACCOUNTS

REPORT OF THE BOARD OF DIRECTORS

REPORT OF THE BOARD OF DIRECTORS