UPM Annual Report 2024

WE ARE UPM

GOVERNANCE

ACCOUNTS AND PERFORMANCE

Report of the Board of Directors

Sustainability Statement

Financial Statements

Auditor's Report

Sustainability Assurance Reports

Business area information for the year ended 31 December 2023

Items affecting comparability

performance and to enhance comparability from period to period. The group applies relevant IFRS Accounting Standards to such transactions.

ELIMINATI ONS AND RECONCILI -ATIONS 2)

EURm

2024 2023

Effective retrospectively from the start of the year 2024, UPM has changed its accounting policy related to the materiality thresholds in items affecting comparability by aligning one threshold to be used in all business areas. Transactions (incomes or expenses) are considered to be significant, hence reported as items affecting comparability, in all business areas if the impact exceeds EUR 1 million pre-tax. In addition, business acquisition costs are classified as items affecting comparability regardless of amount. The change did not have any impact on prior year figures.

UPM SPECIALTY PAPERS

OTHER OPE RATIONS

In operating profit Impairment charges Restructuring charges

UPM FIBRES

UPM ENERGY

UPM RAFLATAC

UPM COM PAPERS

UPM PLYWOOD

-549 -103

-117 -199

EURm, OR AS INDICATED

GROUP

External sales Internal sales

2,452

486 141 628 182

1,485

1,300

3,570

402

768

-3

10,460

Change in fair value of unrealised cash flow and commodity hedges Capital gains and losses on sale of non-current assets

592

—

185

28

20

34

-1,000 -1,003

—

7

-2

Total sales

3,044

1,485

1,485

3,598

422

802

10,460

Comparable EBIT

116

103

98

462

56

-14

8

1,013

29

—

Items affecting comparability in operating profit

—

-86

Fair value changes of forest assets

—

—

-22 81

—

-288 174

-6

-87

-2

-405 608 -144

Other non-operational items

-4

—

Operating profit Finance costs, net

116

182

98

50

-101

6

Total

-620

-405

In finance costs

-3

-65

Total assets and capital expenditure by country

Income taxes

-71

Total in profit before tax

-623

-470

Profit for the period Operating assets 1) Deferred tax assets

394

In income taxes Taxes related to items affecting comparability

Assets

Capital expenditure

7,314

2,624

831

1,022

1,619

276

3,374

-411

16,648

133

107

431

EURm Finland

2024 2023 2024 2023

Tax provisions

—

2

Other non-operating assets

62

8,776 2,128 6,213

8,633 2,139 5,817

100 335

153 358 581

Total

133 -490

109 -361

Other financial assets

1,332

Germany Uruguay

Total in profit for the period

Total assets

18,473

58

Operating liabilities 1) Deferred tax liabilities

419

116

144

219

377

29

431

-408

1,328

In 2024, items affecting comparability include EUR 373 million impairment on assets in Biochemicals refinery in Leuna, EUR 5 million impairment of UPM Biochemicals goodwill, and EUR 113 million impairment of Pulp operations Finland goodwill. Other items affecting comparability include EUR 10 million restructuring charges and EUR 26 million impairment charges of fixed assets related to planned closure of UPM Raflatac Kaltenkirchen factory in Germany, EUR 40 million of restructuring and impairment charges related to the closure of Hürth newsprint mill in Germany, EUR 54 million restructuring and impairment charges related to the closure of Nordland fine paper machine 3 in Germany, EUR 4 million write down of inventory at the Raflatac mill, located in Western North Carolina, USA, which was impacted by Hurricane Helene, EUR 12 million restructuring and impairment charges related to the closure of the UPM Biocomposites business, a EUR 21 million capital gain on the sale of UPM-Kymmene Austria GmbH to HEINZEL GROUP, EUR 9 million capital gain on the sale of other non current assets, EUR 12 million other restructuring costs and EUR 8 million restructuring costs related to prior capacity closures. In 2023, items affecting comparability include EUR 120 million restructuring charges and EUR 112 million impairment charges related to the closure of the UPM Plattling paper mill in Germany, EUR 30 million restructuring charges relating to the closure of paper machine 6 at the UPM Schongau mill in Germany and EUR 15 million restructuring and impairment charges related to restructuring measures at the UPM Raflatac Nancy factory in France, EUR 86 million decrease in the fair value of forest assets in Finland and EUR 10 million charges related to the sale of the Steyrermühl site in Austria. Items affecting comparability in finance costs include EUR 71 million exchange rate losses related to the sale of Russian subsidiaries.

China

603 554 111

572 463 103 106 145

6

4

616 832

United States

16

12

Other liabilities

United Kingdom

3

4

Other financial liabilities

4,166 6,942

Austria Poland Estonia France

—

—

—

Total liabilities

135

2 4

4 1 2

Other items Change in fair value of forest assets and wood harvested Share of results of associates and joint ventures Depreciation and amortisation

51 20 93

47 27 54

-20

—

—

—

—

—

-82

—

-103

—

Other EU countries Other European countries

24

—

2

—

—

—

-1

—

-2

— — —

-1

-270

-7

-43

-74

-78

-21

-44

-538 -123

36

32

—

—

Impairment charges

-2

—

-4

—

-117

—

—

Rest of world

377

335

2

1

Capital employed, 31 December

6,895 6,839

2,508 3,042

687 737

803 875

1,242 1,424

246 254

2,943 2,922

-408 321

14,916 16,414

Total

19,096

18,473

550

1,122

Average capital employed

Capital expenditure

616

3

26

23

50

15

388

—

1,122

Capital expenditure, excluding acquisitions and shares

Sales by destination country

616

3

26

23

50

15

361 -0.5

— — —

1,094

Comparable ROCE, % Personnel, 31 December

1.7

6.0

14.0

11.2

32.4

22.2

6.4

EURm Finland

2024 2023

2,775

81

3,100

1,963

6,005

1,634

1,015

16,573

1,306 1,073 1,803

1,267 1,469 1,366

1) Business area’s operating assets include goodwill, other intangible assets, property, plant and equipment, forest assets, energy shareholdings, investments in associates and joint ventures, inventories and trade receivables. Operating liabilities include trade payables and advances received. 2) Eliminations and reconciliations include the elimination of internal sales and the changes in fair value of unrealised cash flow and commodity hedges that are not allocated to segments. » Refer Other financial information on Alternative performance measures, for definitions of key figures and reconciliation to measures presented in the consolidated income statement and balance sheet prepared in accordance with IFRS Accounting Standards.

Germany

United States

United Kingdom

513

548

China France

1,744

1,533

386 100 304 110

435

Uruguay

66

Poland Austria

301 160

Accounting policies

Other EU countries

1,468

1,594

Other European countries

402

306

Rest of world

1,132

1,415

Certain non-operational or non-cash valuation transactions with significant income statement impact are considered as items affecting comparability and reported separately to reflect the underlying business

Total

10,339

10,460

UPM FINANCIAL REPORT 2024 268

268

UPM FINANCIAL REPORT 2024

269

269

UPM ANNUAL REPORT 2024

UPM ANNUAL REPORT 2024