UPM Annual Report 2021








8.4 Assets held for sale No assets were classified as held for sale at the end of 2021 or 2020.

9.2 Litigation Contingent liabilities


HOLDING % 2021

HOLDING % 2020


Oy Alholmens Kraft Ab (Pohjolan Voima Oyj, G series and direct ownership) 1)


50.00 50.00 50.00 54.00 76.00 50.00 71.95

29.77 50.00 50.00 54.00 76.00 50.00 71.95

The group is defendant or plaintiff in a number of legal proceedings incidental to its operations. These lawsuits primarily involve claims arising from commercial law issues. Group companies The group’s management is not aware of any significant litigation in the end of 2021. In October, the European Commission conducted an unannounced inspection at UPM’s premises. According to the Commission’s press release on 12 October, the Commission has concerns that the inspected companies in the wood pulp sector may have violated EU antitrust rules that prohibit cartels and restrictive business practices. The Commission states that the unannounced inspections are a preliminary step in an investigation into suspected anticompetitive practices, and the fact that the Commission carries out such inspections does not mean that the companies are guilty of anti-competitive behaviour nor does it prejudge the outcome of the investigation itself. UPM takes any suspected violation of antitrust rules very seriously and has a compliance programme in place to mitigate the risk of such violations. For example, all employees and executives are required to take training on the UPM Code of Conduct, which includes a section regarding antitrust compliance. In addition, UPM has also in place a specific training programme regarding antitrust rules which covers approximately 3,000 employees and executives. 9.3 Events after the balance sheet date On 1 January, UPM announced that members of the Paperworkers’ Union, the Finnish Electrical Workers´ Union and the Trade Union Pro have started strikes at UPM mills in Jämsänkoski, Kouvola, Lappeenranta, Pietarsaari, Rauma, Tampere and Valkeakoski. UPM businesses falling under the strikes in Finland are UPM Pulp, UPM Biofuels, UPM Communication Papers, UPM Specialty Papers and UPM Raflatac. According to the unions, the strikes would continue until 22 January 2022 unless a new collective labour agreement is reached before that. The duration of the strike has since been extended twice (on 5 January and 20 January) by the Paperworker's union and at the time of signing the annual accounts, 27 January, the strike is due to last until 19 February 2022, unless new agreements are reached before that.

EEVG Entsorgungs- und Energieverwertungsgesellschaft m.b.H.


Järvi-Suomen Voima Oy


Accounting policies Non-current assets (or disposal groups) are classified as assets held for sale and stated at the lower of carrying amount and fair value less costs to sell, if UPM will recover their carrying amount through a sale transaction which is considered highly probable. Non-current assets classified as held for sale, or included within a disposal group that is classified as held for sale, are not depreciated after the classification. 9. Unrecognised items 9.1 Commitments and contingencies In the normal course of business, UPM enters into various agreements providing financial or performance assurance to third parties. The maximum amounts of future payments for which UPM is liable is disclosed in the table below under “Other commitments”. Property under mortgages given as collateral for own commitments include property, plant and equipment, industrial estates and forest land.

Kaukaan Voima Oy (Pohjolan Voima Oyj, G9 series) Kymin Voima Oy (Pohjolan Voima Oyj, G2 series)

Madison Paper Industries


Rauman Biovoima Oy (Pohjolan Voima Oyj, G4 series)


1) In 2021, UPM purchased an additional 20.23% share in the joint operation Alholmens Kraft . » Refer Note 8.1 Business acquisitions and disposals.

8.3 Related party transactions The Board of Directors and the Group Executive Team There have not been any material transactions between UPM and its members of the Board of Directors or the Group Executive Team (key management personnel) or persons closely associated with these members or organisations in which these individuals have control or significant influence. There are no loans granted to any members of the Board of Directors or the Group Executive Team at 31 December 2021 or 2020. For information concerning shares held by members of the Board of Directors as well as remuneration to members of the Board of Directors and the Group Executive Team are disclosed in » Note 3.2. Key management personnel. Associates and joint ventures In Finland, the group organises its producer’s responsibility of recovered paper collection through Encore Ympäristöpalvelut Oy. Austria Papier Recycling GmbH purchases recovered paper in Austria and L.C.I s.r.l. in Italy. ASD Altpapier Sortierung Dachau GmbH is a German recovered paper sorting company. The purchases from those four companies represented approximately 91% (95%) of total recovered paper purchase amount from associates and joint ventures. Transactions with associates and joint ventures are presented in the table below. The group has no individually material associates or joint ventures.

Subsidiaries and joint operations » Refer Note 8.2 Principal subsidiaries and joint operations.

Pension Funds In Finland, the group has the pension foundation, UPM Sellutehtaiden eläkesäätiö, which is a separate legal entity. Pensions for about 21% (19%) of the group’s Finnish employees are arranged through the Foundation. In 2021, the contributions paid by UPM to the Foundation amounted to EUR 18 million (18 million). The Foundation manages and invests the contributions paid to the plan. The fair value of the Foundation’s assets at 31 December 2021 was EUR 597 million (563 million), of which 15% was in the form of equity instruments and 85% was invested in property and money market. In the UK, the single UPM Pension Scheme operates under a Trust which is independent from the group. The Trust consists of various defined benefit sections, all of which are closed to future accrual and one common defined contribution section which is open to all UPM employees in the UK. The group made contributions of EUR 6 million (6 million) to the defined benefit sections of the Scheme in 2021. The fair value of the UK defined benefit fund assets at 31 December 2021 was EUR 565 million (515 million), of which 10% was invested in equity instruments, 45% in debt instruments, 41% in property and money market and 4% in other investments.


2021 2020

On behalf of others Guarantees



Other own commitments Leasing commitments for the next 12 months in accordance with IFRS 16 1)



Other commitments

213 220

214 223


The lease commitments for leases not commenced at the end of 2021 totals approximately EUR 409 million, which are mostly related to long term charter agreements, railway service agreement in Uruguay and service agreements related to wood handling, waste water treatment and other utilities in Leuna, Germany. Such lease commitments at the end of 2020 amounted to EUR 412 million.


2021 2020

Dividends received



Purchases of raw materials and services



Loan receivables

5 2 9

6 1 7

Trade and other receivables Trade and other payables





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