UPM Annual Report 2019

COMPETITIVE BUSINESSES, STRONG MARKET POSITIONS Our 18,700 people work in 46 countries across six continents. With head office in Finland, our most important markets are in Europe, Asia and North America.

UPM BIOREFINING

UPM ENERGY

UPM RAFLATAC

UPM SPECIALTY PAPERS

UPM COMMUNICATION PAPERS

UPM PLYWOOD

• 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 • 405,000 ha of own and leased plantations 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 130,000 tonnes produced in Finland Pulp mills Finland: UPM Kaukas (Lappeenranta), UPM Kymi (Kouvola) and UPM Pietarsaari Uruguay: UPM Fray Bentos, UPM Paso de los Toros (completed in 2022) 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)

• Cost competitive low-emission electricity generation in Finland consisting of hydro, nuclear and thermal power • The total electricity generation capacity is 1,457 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

• Self-adhesive label materials for product and information labelling • 10 factories and 29 slitting and distribution terminals in all continents Labelstock factories France: Nancy Malaysia: Johor Poland: Kobierzyce (Wroclaw) and Nowa Wieś (Wroclaw) United Kingdom: Scarborough USA: Mills River, NC; Fletcher, NC and Dixon, IL Slitting and distribution terminals Argentina: Buenos Aires Australia: Adelaide, Brisbane and Melbourne 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, St Petersburg and Chelyabinsk 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 China: Changshu Finland: Tampere

Market position #1 Labelling materials and release liner base papers globally #1 High-quality office paper segment in China Germany: UPM Nordland Papier (Dörpen) Finland: UPM Jämsänkoski (Jämsä) and UPM Tervasaari (Valkeakoski) • Labelling materials, release liner base papers, flexible packaging papers, office and graphic papers • Total annual production capacity of 2.0 million tonnes Paper mills China: UPM Changshu

• Magazine paper, newsprint and fine papers for a wide range of end uses • Annual paper production capacity of 7.3 million tonnes, manufactured in 15 paper mills • Capacities: Annual production capacity of 3.5 million tonnes of magazine papers, 2.0 million tonnes of newsprint and 1.8 million tonnes of fine papers • The combined heat and power (CHP) plants operating on paper mill sites included in the business area Paper mills Austria: UPM Steyrermühl 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)

#1 High and mid segments in EMEA #1 LNG plywood globally Market position Finland: UPM Joensuu, UPM Jyväskylä, UPM Pellos (3 mills, Ristiina, Mikkeli) and UPM Savonlinna Russia: UPM Chudovo Veneer mill Finland: UPM Kalso (Vuohijärvi, Kouvola) • 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 Plywood mills Estonia: UPM Otepää

#2 in Finland Market position

#1 in Europe Market position

#8 Pulp globally Market position

#2 globally Market position

OTHER OPERATIONS

• UPM Forest: Purchasing wood and biomass in 14 countries, 510,000 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: Lignin products, development of glycols, Finland and Germany • UPM Biomedicals: Wood-based products for biomedical applications • UPM Biocomposites producing UPM ProFi outdoor products and UPM Formi composite material for injection moulding and extrusion Biochemicals Finland: Biofore Base research centre, Lappeenranta Germany: Biochemicals biorefinery, Leuna (completed in 2022) Biomedicals innovation unit Finland: Biomedicum research and educational centre, Helsinki Biocomposites mills Finland: UPM Lahti Germany: UPM Bruchsal (Karlsruhe)

Production plant Slitting and distribution terminal

Other business hubs Group Head Office

222

223

UPM ANNUAL REPORT 2019

UPM ANNUAL REPORT 2019

CONTENTS