UPM Annual Report 2020

KEY FIGURES 2020

STRONG FINANCIAL POSITION

4/6 business areas achieved their financial targets

AIMING FOR CONTINUOUS IMPROVEMENT Employee engagement index 71% favourable Active employees completed Code of Conduct training 99% * )

UPM BIOREFINING

Total recordable injury frequency 6.2 Ensuring a safe working environment for employees and everyone working for UPM.

PERFORMANCE

CASH FLOW

ATTRACTIVE DIVIDEND

+0% 693m Dividend (proposal), EUR

The UPM Code of Conduct lays the foundation for responsible business operations and continuous improvement. +3pp Share of certified wood 83% Forest certification is an excellent tool for ensuring sustainable forestry. Chain-of-Custody requirements ensure 100% supply from controlled sources. +1pp

Engaged, high-performing people implement the Biofore strategy and drive short- and long-term success. +0pp Share of spend covered by our Supplier Code 84% Transparent supplier requirements form the basis of responsible sourcing throughout the entire supply chain. +0pp

UPM ENERGY

–32% 948m Comparable EBIT, EUR

–9%

UPM RAFLATAC

INDUSTRY-LEADING BALANCE SHEET Net debt, EUR

Operating cash flow, EUR

–46% 1,005m

56m

UPM SPECIALTY PAPERS

–3.7 pp 7.5% Comparable ROE

Fossil CO 2 emissions (Scope 1 and 2) 5.4 million t Creating climate solutions and working towards carbon neutrality. –6%

UPM COMMUNICATION PAPERS

903m attractive returns with disciplined and effective investments Capital expenditure, EUR

3.2bn Cash funds and unused credit facilities, EUR

FOCUSED INVESTMENTS

UPM PLYWOOD

upm.com/investors

*) New training for the updated Code of Conduct started in September 2019.

EVENTS 2020

JANUARY

MARCH

JUNE

AUGUST

OCTOBER

DECEMBER

3

2

27

20

6

8

UPM announces its commitment to the UN Business Ambition for 1.5°C. UPM decides to invest EUR 550 mil lion in a 220,000-tonne biochemical refinery producing 100% wood-based biochemicals in Leuna, Germany.

Ramping up of UPM Nordland paper machine 2 conversion to specialty papers. UPM signs a EUR 750 million revolving credit facility with a margin tied to long-term biodi versity and climate targets. AGM is held by special arrangements, accord ing to the original schedule. Decisions were made in accordance with the proposals.

UPM brings its first clinical product, the FibDex® wound dressing, to the Finnish market. UPM announces plans for the permanent closure of UPM Kaipola paper mill, the sale of UPM Shot ton paper mill and the streamlining of business function teams. Plans for streamlining other activi ties are also announced.

UPM announces plans to increase ef ficiency in UPM Raflatac’s operations and distribution and in global functions by streamlining the functions’ operations in five countries. The construction of UPM’s innovative biochemicals facility starts in Leuna, Germany.

UPM announces plans to close the UPM Jyväskylä plywood mill in Finland. The mill was closed at the end of July.

CDP recognises UPM with an outstanding AAA score for tackling climate change and taking actions to ensure sustainable forest management and water security for the second time in a row.

17

30

26

7

31

FEBRUARY 12

UPM and the new Government of Uruguay sign a memorandum of understanding. UPM will accelerate the earlier planned USD 60 million financing of the road infrastructure development and invest USD 68 million in electrical grid reinforcement. UPM sells its 50% share in Kainuun Voima Oy to Kajaanin Energiatuotanto Oy. MAY 15 18

JULY 16

SEPTEMBER 21

NOVEMBER 13

UPM permanently closes the UPM Chapelle newsprint mill in Grand-Couronne, France. UPM begins construction of its third state-of-the-art nursery in Central Uruguay.

UPM signs a long-term Wind Power Purchase agreement with German wind park development company wpd to re duce the CO 2 emissions of its paper mills.

UPM is again recognised as a UN Global Compact LEAD participant for its strong commitment to responsible business.

UPM issues a EUR 750m Green Bond under its EMTN programme. The net proceeds from the bond will be used for financing and/or refinancing Eligible Projects and Assets under UPM’s Green Finance Framework. UPM is listed as the forest and paper industry leader in the global Dow Jones Sustainability Index (DJSI) for 2020–2021.

28

16

10

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UPM ANNUAL REPORT 2020

UPM ANNUAL REPORT 2020