UPM Annual Report 2019

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OUR STRATEGY

ACCOUNTS FOR 2019

OUR BUSINESSES

THE WAY WE OPERATE

GOVERNANCE

CONTENTS

UPM IN CHANGING WORLD

OUR BUSINESSES 34 BIOFORE COMPANY Leading the forest-based

GOVERNANCE 102 SIGNIFICANT DECISIONS

ACCOUNTS FOR 2019

OUR STRATEGY 16 UPM BIOFORE STRATEGY – BEYOND FOSSILS

THE WAY WE OPERATE 60 OUR RESPONSIBILITY TARGETS

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FUTURE BEYOND FOSSILS is a key driver for UPM going forward.

120 REPORT OF THE BOARD OF DIRECTORS

UPM’s Board of Directors made several significant decisions for the future.

We create value by seizing the limitless potential of bioeconomy.

Our strategy guides us in achieving our responsibility targets for 2030 and our contributions to UN SDGs. 62 VALUE FROM STAKEHOLDER ENGAGEMENT Active and open dialogue with our stakeholders provides valuable input. 68 ENABLING PEOPLE GROWTH Our people and Aiming Higher culture drive our success.

bioindustry into a sustainable, innovation driven and exciting future beyond fossils.

144 FINANCIAL STATEMENTS

6 THE NEED FOR RESPONSIBLE CHOICES Our innovations create value and business opportunities that go beyond fossils. 8 SUSTAINABLE AND SAFE SOLUTIONS Our alternatives for fossil-based materials.

18 TOP PERFORMANCE

110 REMUNERATION

210 AUDITOR’S REPORT

36 BUSINESS AREAS

Continuous improvement, right operating model, performance culture and effective capital allocation.

112 BOARD OF DIRECTORS

The direction and performance of our six business areas.

214 OTHER FINANCIAL INFORMATION

114 GROUP EXECUTIVE TEAM

20 SPEARHEADS FOR GROWTH We have selected three focus areas where we are seeking significant growth. 22 INNOVATING FOR GROWTH We are developing innovative and high-quality products from wood- based biomass. 24 VALUE FROM RESPONSIBILITY Sustainability is the only solid foundation for long term value creation.

52 NEW SUSTAINABLE ALTERNATIVES Developing wood-based

renewable biofuels, naphtha and biochemicals.

10 YEAR 2019 IN BRIEF

86 COMMITTED TO CLIMATE ACTIONS

Key performance indicators and main events.

We are committed to limit global temperature rise to 1.5°C.

12 FROM THE PRESIDENT AND CEO President and CEO reviews the year 2019.

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88 SUSTAINABLE FORESTRY

Sustainably managed forests are more resilient to changes in the climate.

28 RISKS AND OPPORTUNITIES

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30 CREATING SHAREHOLDER VALUE Our Biofore strategy is designed to generate attractive shareholder returns.

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UPM does not publish a separate environmental and corporate responsibility report but has integrated the contents into this annual report. Various highlights from the year 2019 can be found under the sections for each business area. To find out more about UPM’s responsibility agenda, please visit upm.com/responsibility.

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UPM ANNUAL REPORT 2019

UPM ANNUAL REPORT 2019