UPM Annual Report 2021

ACCOUNTS FOR 2021

UPM

BEYOND FOSSILS

STRATEGY

BUSINESSES

RESPONSIBILITY

GOVERNANCE

Board of Directors´ proposal for the distribution of profit

Financial Statements 2021

152 153 154 155 157 184 184 186 191 194 194 196 196 198 202 202 202 204 204 204 206 207 207 207 207 207

Consolidated income statement and statement of comprehensive income

Consolidated balance sheet

Consolidated statement of changes in equity

The Board of Directors proposes to the Annual General Meeting of UPM-Kymmene Corporation to be held on 29 March 2022 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 2021 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 31 March 2022. The Board of Directors proposes that the dividend will be paid on 7 April 2022.

On the date of the dividend proposal, 27 January 2022, 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. EUR 469,282,175.70 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. On 31 December 2021, the distributable funds of the parent company were EUR 3,299,180,167.25 including

Consolidated cash flow statement

Notes to the consolidated financial statements

1. Basis for reporting 1.1 Corporate information 1.2 Basis of preparation 1.3 Consolidation principles 1.4 Foreign currency translation 1.5 Changes in accounting policies

5. Capital structure 5.1 Capital management

157 157 157 158 158 159 159 159 164 165 167 168 168 168 169 171 174 175 177 177 179 181 182

5.2 Net debt

5.3 Financial assets and liabilities by category

5.4 Financial income and expenses 5.5 Share capital and reserves

2. Business performance

6. Risk management 6.1 Financial risk management

2.1 Business areas

2.2 Sales

6.2 Derivatives and hedge accounting

2.3 Operating expenses and other operating income

7. Income tax

2.4 Earnings per share and dividend

7.1 Tax on profit for the year

Signatures of the annual accounts and the report of the Board of Directors for the year 2021

3. Employee rewards

7.2 Deferred tax

3.1 Employee costs

8. Group structure

3.2 Key management personnel 3.3 Share-based payments 3.4 Retirement benefit obligations

Helsinki, 27 January 2022

8.1 Business acquisitions and disposals 8.2 Principal subsidiaries and joint operations

8.3 Related party transactions

4. Capital employed

8.4 Assets held for sale

Berndt Brunow

Henrik Ehrnrooth

Björn Wahlroos Chair

4.1 Property, plant and equipment

9. Unrecognised items

4.2 Forest assets

4.3 Energy shareholdings

9.1 Commitments and contingencies

4.4 Goodwill and other intangible assets

9.2 Litigation

4.5 Provisions

9.3 Events after balance sheet date

Emma FitzGerald

Jari Gustafsson

Piia-Noora Kauppi

4.6 Working capital

10. Other notes

208 208

10.1 Forthcoming new standards, amendments and accounting policy changes

Marjan Oudeman

Martin à Porta

Kim Wahl

209

Parent company accounts

Jussi Pesonen President and CEO

150

UPM FINANCIAL REPORT 2021 151 UPM ANNUAL REPORT 2021 151

UPM ANNUAL REPORT 2021

UPM FINANCIAL REPORT 2021 150