UPM Annual Report 2023

BEYOND FOSSILS

UPM

BUSINESSES

RESPONSIBILITY

GOVERNANCE

ACCOUNTS FOR 2023

UPM is a biomaterials growth company. We supply sustainable materials for everyday consumer needs, reliable carbon-free energy to electrify society, and renewable alternatives to fossil materials and fuels. BIOFORE STRATEGY

OUR PURPOSE: WE CREATE A FUTURE BEYOND FOSSILS

GROWTH • We respond to megatrends and meet customers’ changing needs • We create new markets and enabling sustainable choices

INNOVATION • We create new business and competitive advantage • We replace fossils with biomaterials

The Biofore strategy drives our growth and transformation as a frontrunner in bioma terials. The COP28 UN Climate Change Conference highlighted the obvious — that the world needs to transition away from fossil fuels and raw materials. This goes hand-in-hand with our purpose: We create a future beyond fossils. Focus on performance At UPM, we foster a culture of high performance. 2023 saw many markets experience an unusually strong slowdown, particularly those in Europe. Geopolitical tensions also remained high. Despite such a challenging operating environment, we achieved a solid performance thanks to our agile operating model, competitive businesses and continuous improvement mindset. Through effective capital allocation, we aim to grow our earnings and improve our business portfolio while maintaining a strong balance sheet.

Transformative growth and innovation Implementing the Biofore strategy contin ued at full speed in 2023, with production starting on two transformative growth projects. In the first instance, the new and highly competitive UPM Paso de los Toros pulp mill will supply sustainable fibres suitable for a wide range of daily consum er needs, growing our pulp production capacity by more than 50%. Secondly, as a shareholder of the OL3 nuclear power plant unit, we will supply carbon-free electricity to electrify society, growing our energy business by nearly 50%. At the same time, we are developing new innovation-driven growth businesses. Construction continued at our first-of-its kind biochemicals refinery in Germany, as did basic engineering of a potential new bi ofuels refinery in the Netherlands. With our customers also having their own ambitious sustainability targets, such innovations are in high demand.

Leader in responsibility We are one of the world-leading companies in responsibility. Our visionary purpose and values guide and inspire us to create a positive impact on society and value for our shareholders. Our renewable and recyclable products meet the everyday needs of consumers while addressing many global challeng es, such as climate change and resource scarcity. Many of our products offer sustainable alternatives to fossil raw materials and energy — for example by replacing fossil plastics in consumer products, steel and cement in construction, or fossil fuels in traffic, aviation and electricity markets. Furthermore, we provide our customers with entirely new solutions, creating new innovative growth businesses.

PERFORMANCE • Continuous improvement • Agile operating model • Corporate synergies

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

PORTFOLIO CHOICES

Effective capital allocation with attractive returns

Investing in businesses with strong long-term fundamentals for growth and high barriers to entry

Strategic access to sustainable renewable raw materials

VALUES

Renew with courage

Trust and be trusted

Achieve together

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UPM ANNUAL REPORT 2023

UPM ANNUAL REPORT 2023