UPM Annual Report 2021

STRATEGY

UPM

BEYOND FOSSILS

BUSINESSES

RESPONSIBILITY

GOVERNANCE

ACCOUNTS FOR 2021

BIOFORE STRATEGY

Our transformation has been ongoing for more than 10 years, at an increasingly fast pace. We have an agile operating model and nurture a culture of high performance and integrity. Through effective capital alloca tion we have achieved a nearly debt-free balance sheet and improved our business portfolio. We are a world-leading company in responsibility. Our visionary purpose and values guide and inspire us in creating a positive impact for society and value for our shareholders.

Our renewable and recyclable products meet the everyday needs of consumers at the same time as addressing many global challenges such as climate change and resource scarcity. Many of our products offer sustainable alternatives for fossil rawmaterials and energy, for example replacing fossil plastics in consumer products, steel and cement in construction or fossil fuels in traffic, avia tion and electricity markets. Furthermore, we provide our customers completely new solutions, creating new innovative growth businesses.

We are currently in an intensive growth phase building a world-class pulp mill in Uruguay and a next generation biochemi cals refinery in Germany. We are also con ducting the basic engineering of a potential new biofuels refinery that would scale up our successful biofuels business. These transformative growth projects represent significant future earnings growth for us. They are set to further improve our busi ness mix with higher-margin, higher-value businesses.

A FUTURE BEYOND FOSSILS

GROWTH • Responding to megatrends and meeting customers’ changing needs • Creating new markets and enabling sustainable choices

Biofore strategy drives our transformation as a

TRANSFORMATION STRENGTHENS PERFORMANCE AND BUSINESS MIX

bioeconomy frontrunner. We seek sustainable growth by enabling our customers and consumers to make more sustainable choices. High performance, innovations and world-leading responsibility are the cornerstones of our strategy. We create a future beyond fossils.

PERFORMANCE • Continuous improvement • Agile operating model

INNOVATION • Creating new business and competitive advantage • Replacing fossils with biomaterials

RESPONSIBILITY • Renewable & sustainable solutions • Responsible operations and value chain

EUR 11.0bn

EUR 9.6bn

Communication Papers

33%

Operating model

60%

Performance

Growing businesses

PORTFOLIO • Effective capital allocation • Investing in businesses with strong long-term fundamentals for growth and high barriers to entry

Major growth investments

Balance sheet

Focused growth

Scaling up new businesses

Innovation

40%

67%

VALUES

Transformation 1. phase

Transformation 2. phase

Gross sales 2009

Gross sales 2021

Future sales *)

Trust and be trusted

Achieve together

Renew with courage

This is an illustration, not a forecast

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UPM ANNUAL REPORT 2021

UPM ANNUAL REPORT 2021