UPM Annual Report 2023

ACCOUNTS FOR 2023

UPM

BEYOND FOSSILS

BUSINESSES

RESPONSIBILITY

GOVERNANCE

Board of Directors´ proposal for the distribution of profit

Financial Statements 2023

164 165 166 167 169 197 197 200 205 208 208 210 210 212 216 216 217 218 218 219 221 221 222 222 222 222

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 4 April 2024 that an aggregate dividend of EUR 1.50 per share be paid based on the balance sheet to be adopted for the financial year ending 31 December 2023, and that the remaining portion of the distributable funds be retained in the Company’s unrestricted shareholders’ equity. The Board proposes that the dividend be paid in two instalments. The first dividend instalment, EUR 0.75 per share, is proposed to be paid to shareholders registered in the Company’s register of shareholders maintained by Euroclear Finland Oy on the record date for the first dividend instalment 8 April 2024. The Board proposes that the payment date for the first dividend instalment would be on 16 April 2024. The second dividend instalment, EUR 0.75 per share, is proposed to be paid to shareholders registered in the Company's register of shareholders maintained by Euroclear Finland Oy on the record date for the second dividend instalment 31 October 2024. The Board proposes that the payment date for the second dividend instalment would be on 7 November 2024.

If the payment of the dividend is prevented due to applicable law, regulation or unexpected circumstances, the Board will resolve, as soon as practically possible, on a new record date and payment date. On the date of the dividend proposal, 1 February 2024, the registered number of the Company’s 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 800.0 million. On 31 December 2023, the distributable funds of the parent company were EUR 3,289,796,583.55. The profit of the parent company for the period was EUR 1,674,687,361.44. 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.

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

169 169 169 170 170 170 172 172 177 178 180 181 181 181 182 184 187 188 190 190 192 194 195

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

2.1 Business areas

6.1 Financial risk management

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

3. Employee rewards

7.2 Deferred tax

Signatures of the annual accounts and the report of the Board of Directors for the year 2023

3.1 Employee costs

8. Group structure

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

8.1 Business acquisitions and disposals 8.2 Principal subsidiaries and joint operations

Helsinki, 1 February 2024

8.3 Related party transactions

4. Capital employed

8.4 Assets held for sale

4.1 Property, plant and equipment

Henrik Ehrnrooth Chair

Kim Wahl

Pia Aaltonen-Forsell

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

4.6 Working capital

10. Other notes

222 222

Emma FitzGerald

Jari Gustafsson

Piia-Noora Kauppi

10.1 Forthcoming new standards, amendments and accounting policy changes

223

Parent company accounts

Topi Manner

Marjan Oudeman

Martin à Porta

Massimo Reynaudo President and CEO

162

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UPM ANNUAL REPORT 2023

UPM ANNUAL REPORT 2023

UPM FINANCIAL REPORT 2023

162

UPM FINANCIAL REPORT 2023

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