UPM Annual Report 2022

BEYOND FOSSILS

UPM

BUSINESSES

RESPONSIBILITY

GOVERNANCE

ACCOUNTS FOR 2022

pace. We have an agile operating model and nurture a culture of high performance and integrity. Through effective capital allocation we have consistently improved our business portfolio, while maintaining a strong balance sheet. We are currently in an intensive growth phase building a world-class pulp mill in Uruguay and a next generation bio chemicals refinery in Germany. We are a shareholder in the new OL3 nuclear power plant unit in Finland. We are also conduct ing 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.

Future beyond fossils UPM's Biofore strategy remains unchanged. 2022 brought new challenges with Russia’s war in Ukraine and sanctions derived from it, the energy crisis in Europe, high inflation, rising interest rates and a slowing global economy. Our strategy is resilient to these new realities. Climate change mitigation and resource scarcity require further action, while the need to cut ties with Russian fossil energy further underlines the role of renewable and recyclable materials and reliable, competitive low-emission energy. This is what we provide – we create a future beyond fossils. The Biofore strategy drives our trans formation as a frontrunner in biomaterials. This transformation has taken place for more than 10 years, at an increasingly fast

Leader in responsibility We are a world-leading company in respon sibility. Our visionary purpose and values guide and inspire us to create a positive impact on society and value for our share holders. 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 to fossil raw materials 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 with entirely new solutions, creating new innovative growth businesses.

A FUTURE BEYOND FOSSILS

BIOFORE STRATEGY

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

TRANSFORMATION STRENGTHENS PERFORMANCE AND BUSINESS MIX

EUR 13.1bn

Communication Papers

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

37%

EUR 9.6bn

We supply sustainable materials for everyday consumer needs, reliable

60%

Operating model

Major growth investments

Growing businesses

Performance Balance sheet Focused growth Innovation

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

carbon-free energy to electrify society and renewable fuels to decarbonise traffic.

Scaling up new businesses

40%

63%

VALUES

Transformation 1. phase

Transformation 2. phase

Gross sales 2009

Gross sales 2022

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 2022

UPM ANNUAL REPORT 2022