UPM Annual Report 2021

ACCOUNTS FOR 2021

UPM

BEYOND FOSSILS

STRATEGY

BUSINESSES

RESPONSIBILITY

GOVERNANCE

8. Group structure 8.1 Business acquisitions and disposals In 2021, UPM permanently closed paper production at its Shotton newsprint mill site in North Wales, United Kingdom. The site and all related assets were sold to Eren Paper Ltd, a subsidiary of Modern Karton Sanayi Ve Ticaret A. Ş ., the containerboard and corrugated packaging business of the Turkish industrial conglomerate Eren Holding (“Eren”), thereby closing the transaction announced in May 2021. UPM also made several minor sales of equity investments accounted at fair value through OCI. In 2020, UPM sold its 50% share in the joint operation Kainuun Voima. UPM also made a minor sale of its 6.1% ownership BSW Timber Ltd, which was accounted for as a fair value through OCI investment. In 2021, UPM purchased an additional 20.23% share in the joint operation Alholmens Kraft, increasing UPM's ownership from 29.77% to 50.00 %. UPM also made a minor investment in InfraLeuna GmbH which is an equity investments accounted at fair value through OCI. In 2020, UPM purchased an additional 1.89% share in the joint operation Alholmens Kraft, increasing UPM's ownership from 27.88% to 29.77 % Reconciliation of gain on sale and net cash arising from the disposal of Shotton Mill Ltd EURm 2021 Reconciliation of gain on sale Consideration paid in cash 160 Consideration to be received 3 Net assets sold -25 Transaction and other costs, net -3 Gain on disposal 133

COUNTRY OF INCORPORATION

HOLDING % 2021

HOLDING % 2020

SUBSIDIARIES

Steyrermühl Sägewerksgesellschaft m.b.H. Nfg KG

AT UY UY

100.00

100.00

Transactions with non-controlling interests In 2021, UPM made a minor acquisition of an additional 24% holding of its subsidiary Jyväs-Helmi Oy from a non-controlling shareholder. In 2020, there were no changes in the share of non-controlling interests. Accounting policies UPM consolidates acquired entities at the acquisition date which is when it gains control using the acquisition method. Consideration transferred is determined as the fair value of the assets transferred, the liabilities incurred and equity instruments issued including the fair value of a contingent consideration. Acquisition related transaction costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed are measured initially at their fair values at the acquisition date. The group measures any non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets. The excess of the consideration transferred, the amount of any non controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the identifiable net assets of the subsidiary acquired is recorded as goodwill. The assets, liabilities, income and expenses of subsidiaries with non controlling interests are consolidated line by line into the UPM consolidated financial statements. The proportion of the profit for the period, as well as the accumulated share of total equity belonging to non-controlling interests are presented separately in the consolidated income statement and consolidated balance sheet.

Tebetur S.A.

91.00 91.00

91.00 91.00

Tile Forestal S.A.

UPM (China) Co., Ltd UPM (Vietnam) Ltd UPM Asia Pacific Pte. Ltd UPM Biochemicals GmbH

CN VN SG

100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 91.00

100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 91.00

DE UY

UPM Biofuels S.A.

UPM Communication Papers Oy

FI FI

UPM Energy Oy UPM France S.A.S. UPM Fray Bentos S.A.

FR

UY DE EE

UPM GmbH

UPM OÜ

UPM Plywood Oy UPM Pulp Sales Oy

FI FI

UPM Raflatac (China) Co., Ltd. UPM Raflatac (S) Pte Ltd UPM Raflatac (UK) Limited UPM Raflatac Chile SpA UPM Raflatac Co., Ltd UPM Raflatac Iberica S.A.

CN SG GB CL TH ES US MX NZ

UPM Raflatac Inc.

UPM Raflatac Mexico S.A. de C.V.

UPM Raflatac NZ Limited UPM Raflatac Oy UPM Raflatac Pty Ltd UPM Raflatac s.r.l. UPM Raflatac SAS UPM Raflatac Sdn. Bhd.

FI

AU AR

FR

160

Consideration paid in cash Cash in company disposed

MY ZA

-2

UPM Raflatac South Africa (Pty) Ltd

Net cash arising from disposal

157

UPM Raflatac Sp. z o.o.

PL

UPM S.A.

UY DE

UPM Sales GmbH

UPM Sales Oy

FI FI FI

8.2 Principal subsidiaries and joint operations

UPM Specialty Papers Oy

UPM Sähkönsiirto Oy

COUNTRY OF INCORPORATION

HOLDING % 2021

HOLDING % 2020

UPM-Kymmene (Korea) Ltd UPM-Kymmene (UK) Ltd UPM-Kymmene Austria GmbH

KO GB AT US IN

SUBSIDIARIES

Blandin Paper Company

US UY UY UY DE UA DE DE DE RU RU

100.00

100.00

Blanvira S.A. Cuecar S.A.

91.00 91.00

91.00 91.00

UPM-Kymmene Inc.

UPM-Kymmene India Private Limited

Forestal Oriental S.A.

100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

UPM-Kymmene Japan K.K.

JP

Gebrüder Lang GmbH Papierfabrik

UPM-Kymmene Kagit Urunleri Sanayi ve Ticaret Ltd. Sti.

TR EE ES

LLC UPM Ukraine

UPM-Kymmene Otepää OÜ

Nordland Papier GmbH

UPM-Kymmene S.A.

NorService GmbH

UPM-Kymmene Seven Seas Oy

FI

nortrans Speditionsgesellschaft mbH

UPM-Kymmene Sp. z o.o.

PL

OOO UPM-Kymmene

UPM-Kymmene S.r.l.

IT

OOO UPM-Kymmene Chudovo PT UPM Raflatac Indonesia

Werla Insurance Company Ltd

MT

ID

Rhein Papier GmbH

DE

204

UPM FINANCIAL REPORT 2021 205 UPM ANNUAL REPORT 2021 205

UPM ANNUAL REPORT 2021

UPM FINANCIAL REPORT 2021 204