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

5.2 Net debt Net debt is defined as the total of current and non-current debt less cash and cash equivalents and interest-bearing current and non-current financial assets. In 2024, net debt increased by EUR 437 million. Net debt totalled EUR 2,869 million (2,432 million) at the end of 2024. UPM has a EUR 5 billion Euro Medium Term Note (EMTN) programme and a Green Finance Framework that aligns with the International Capital Markets Association (ICMA) Green Bond Principles. The framework has a second party opinion from S&P Global ratings with the highest "Dark green" overall shading. In August 2024, UPM successfully issued its fourth Green Bond under its EMTN programme and Green Finance Framework. The EUR 600 million bond matures in August 2034, and pays a fixed coupon of 3.375%. UPM has issued four Green Bonds, totalling EUR 2,350 million. The proceeds from the Green Bonds will be allocated in accordance with the Green Finance Framework to eligible green projects and assets. The following framework categories have been used for the previously issued three Green Bonds: sustainable forest management, climate positive products and solutions, and hydropower. The bonds do not have any financial covenants and all issued euro bonds are listed on the Irish Stock Exchange plc, trading as Euronext Dublin.

Maturity table of derivatives included in net debt and guarantees at the end of 2024

Net debt EURm

2024 2023

EURm

2025

2026

2027

2028

2029 2030+

Total

Bonds

2,642

2,002

Net settled interest rate swaps Net inflow

Loans from financial institutions

154 717

188 612

5

8

9

1

1

— —

25 -79

Lease liabilities

Net outflow

-23

-17

-18

-19

—

Derivatives Other loans

84

94

Gross settled derivatives Gross currency swaps Total inflow

149

160

Non-current debt

3,747

3,056

8

8

8

8

133 -168

— —

163 -189

Repayments of non-current debt Repayments of lease liabilities

36

20 94 33

Total outflow

-5

-5

-5

-5

115

Forward foreign exchange contracts Total inflow

Derivatives

14

741 -750

— — —

— — —

— — —

— — —

— — —

741 -750

Other liabilities Current debt Debt held for sale

1

180 327

Total outflow Guarantees

166

—

—

0

2

Total debt

3,913

3,385

Loan receivables

2

4

Maturity table of derivatives included in net debt and guarantees at the end of 2023

Derivatives

21 15 38

51 17 71

Other receivables

EURm

2024

2025

2026

2027

2028 2029+

Total

Non-current interest-bearing assets

Net settled interest rate swaps Net inflow

Loan receivables

1 2

1

3

7

9

9

—

— —

27

Derivatives

14

Net outflow

-30

-19

-17

-18

-19

-104

Other receivables Investment funds

110

187

Gross settled derivatives Gross currency swaps Total inflow

Net debt

1

1

Cash and cash equivalents

892

632 835

7

7

7

7

7

138 -168

173 -195

Current interest-bearing assets Interest-bearing assets held for sale Total interest-bearing assets

1,006

3,000

25

Total outflow

-7

-5

-5

-5

-5

0

47

Forward foreign exchange contracts Total inflow

1,044 2,869

953

2,500

20

1,000

9

— — —

— — —

— — —

— — —

1,009

Net debt

2,432

Total outflow Guarantees

-989

-9

-999

2,000

15

Gearing ratio, %

—

—

—

Accounting policies

1,500

10

EURm

1,000

5

Debt Debt comprising of bonds, bank and pension loans, lease liabilities and other loans is recognised initially at fair value, net of transaction costs and subsequently measured at amortised cost using the effective interest method. Any difference between proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the estimated life of the borrowing. UPM classifies debt as non-current unless due for settlement within a year. Most of the debt is hedged in a fair value hedge relationship as described in » Note 6.1 Financial risk management.

500

0

0

-5

2020 2021 2022 2023 2024

UPM FINANCIAL REPORT 2024 294

294

UPM FINANCIAL REPORT 2024

295

295

UPM ANNUAL REPORT 2024

UPM ANNUAL REPORT 2024