UPM Annual Report 2024

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WE ARE UPM

GOVERNANCE

ACCOUNTS AND PERFORMANCE

Report of the Board of Directors

Sustainability Statement

Financial Statements

Auditor's Report

Sustainability Assurance Reports

The group as a lessor At inception of a lease contract, the group makes an assessment whether the lease is a finance lease or an operating lease. If the lease transfers substantially all of the risks and rewards incidental to ownership of the 5.3 Financial assets and liabilities by category Financial assets and liabilities recognised in the balance sheet include cash and cash equivalents, loans and other financial receivables, investments in securities, trade receivables, trade payables, loans, bank overdrafts and derivatives. Classification of financial assets into different measurement categories depends on the contractual cash flow characteristics and the business model for managing the financial asset. The measurement category of each financial asset is determined at inception. Financial

Financial assets and liabilities by category at the end of 2023

asset, it is considered to be a finance lease; if not, the lease is considered to be an operating lease. The group has only a minor amount of operating lease contracts, whereby the lease payments are recognised on a straight-line basis over the term of the lease.

EQUITY INSTRUMENTS AT FAIR VALUE THROUGH OCI

FINANCIAL ASSETS AND LIABILITIES AT AMORTISED COST

FAIR VALUE THROUGH PROFIT AND LOSS

DERIVATIVES UNDER HEDGE ACCOUNTING

EURm

TOTAL 2,283

Energy shareholdings

—

2,283

—

assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right in all circumstances to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred, and the group has transferred substantially all the risks and rewards of ownership.

Other non-current financial assets Loans and receivables

— — — —

— — — — — — — — — — — — — — — — — — — —

—

Derivatives

52 52

—

52 60

Trade and other receivables Other current financial assets Loans and receivables

—

1,782

—

Derivatives

— —

Investment funds

—

Financial assets and liabilities by category at the end of 2024

64 63

Financial assets classified as held for sale 2)

FINANCIAL ASSETS AND LIABILITIES AT AMORTISED COST

— —

EQUITY INSTRUMENTS AT FAIR VALUE THROUGH OCI

FAIR VALUE THROUGH PROFIT AND LOSS

DERIVATIVES UNDER HEDGE ACCOUNTING

Cash and cash equivalents Total financial assets Non-current debt Interest-bearing liabilities

632

2,283

2,486

4,884

EURm

TOTAL 2,247

Energy shareholdings

—

2,247

—

— — — — — —

—

2,962

Other non-current financial assets Loans and receivables

Derivatives

94 94

—

— — — — — — — — — — — — — — — — — — — — — — — —

—

16 28 44

2,962

3,056

Derivatives

1 1

27 27

—

Other non-current financial liabilities Other liabilities 1)

—

155

Trade and other receivables Other current financial assets Loans and receivables

—

1,929

Derivatives

2 2

—

155

157

—

Current debt Loans

Derivatives

9 1

— —

—

— — — —

294

Investment funds

—

Derivatives

33 33

—

294

327

Financial assets classified as held for sale

— —

—

Trade and other payables

—

1,883

Cash and cash equivalents Total financial assets Non-current debt Interest-bearing liabilities

892

Other current financial liabilities Derivatives

2,247

2,838

5,181

13 13

— —

38 38

— —

51 51

— — — — — —

—

3,662

Financial liabilities classified as held for sale 2)

Derivatives

84 84

—

3,662

3,747

Total financial liabilities

—

134

5,314

5,494

Other non-current financial liabilities Other liabilities 1)

1) Consists mainly of non-current advances received and a put liability that is not estimated to mature within 12 months. 2) Financial assets and liabilities classified as held for sale relate to agreement to sell 100% of the shares the of the Austrian subsidiary UPM-Kymmene Austria GmbH.

—

153

Derivatives

5 5

—

153

158

Current debt Interest-bearing liabilities

The carrying amounts of financial assets and financial liabilities approximate their fair value except for interest-bearing liabilities in non current debt. Their fair value amounted to EUR 2,898 million (2,873 million) at the end of 2024. For quoted bonds, the fair values are based on the quoted market value as of 31 December. At the end of 2024, all bonds were quoted.

For other non-current debt in interest-bearing liabilities fair values are estimated using the expected contractual future payments discounted at market interest rates and are categorised within level 2 of the fair value hierarchy.

—

152

Derivatives

10 10

5 5

—

152

166

Trade and other payables

—

1,938

» Refer Note 5.2 Net debt, for further information on net debt and bonds.

Other current financial liabilities Derivatives

7 7

101 101

— — —

108 108

Financial liabilities classified as held for sale

—

Total financial liabilities

195

5,905

6,116

1) Consists mainly of non-current advances received and a put liability that is not estimated to mature within 12 months.