UPM Annual Report 2024

WE ARE UPM

GOVERNANCE

ACCOUNTS AND PERFORMANCE

Our strategy

Our businesses

Sustainability

Generating shareholder value

Making more sustainable choices increases demand for our products and attracts investor interest. We aim to grow our earnings and valuation in the coming years, while providing our shareholders with an attractive dividend.

DRIVING LONG-TERM VALUE CREATION

An attractive business portfolio drives profitability and valuation Increasing our share of higher-margin growth businesses improves our long-term profitability and increases the value of our shares. On aver age, our growth businesses have EBIT margins more than twice as high as the mature communication paper business.

Strong balance sheet Our strong balance sheet mitigates risks and enables us to implement our strategy, even in uncertain times.

-22% Share price 2024

Dividend per share

Enterprise value and cumulative dividends

EUR

%

EURm

Attractive dividends We aim to pay attractive dividends, targeting at least half the comparable earnings per share over time.

100

30,000

1.0 1.2 1.4 1.6

25,000

80

1.50 Dividend proposal EUR per share

20,000

Top performance enables investments in growth, innovation and sustainability We make good use of commercial strategies, tight cost control, material and energy efficiency, effective capital allocation, and efficient use of assets to continuously improve our financial performance. We seize opportunities through our agile operating model, while capitalising on corporate synergies.

60

0.0 0.2 0.4 0.6 0.8

15,000

40

10,000

20

5,000

Share of ESG-focused investors of all institutional shareholders 51%

Value-creating growth Consumer megatrends are driving growth in demand for most of our material solutions. This is further supported by the increasing need for sustainable alternatives to fossil-based materials and energy. We grow businesses with strong long-term demand fundamentals, where we have a clear competitive advantage. Thus, we seek growth in renewable fibres, advanced materials and decarbonisation solutions and strive to capture opportunities in higher growth geographies. This underpins attractive returns on invested capital.

0

0

15 16

23 24 19 20 21 22 17 18

19 20 21 22 17 18 15 16 Dividend EUR per share (2024 proposal) % of comparable EPS

23 24*

Cumulative dividend Market capitalisation Net debt

*Board’s proposal

Sustainability at the core We see sustainability as a key driver of growth and competitiveness. We are seizing the opportunities presented by responsible consumer choices and stricter regulations to mitigate climate change and address the plastics challenge, for example. Responsible operations and value chains help mitigate risks.

5-year share performance and valuation multiples

2024 26.56

2023 34.06

2022 34.93

2021 33.46

2020 30.47

Share price at 31 Dec, EUR Comparable EPS, EUR Dividend per share, EUR Dividend to comparable EPS, %

1.74

1.40 1.50 107

3.09 1.50

2.22 1.30

1.37 1.30

1.50 *)

86 5.6

49 4.3

59 3.9

95 4.3

Innovating for the everyday We drive innovation to create high-value business opportunities – for example, in biochemicals, biofuels and specialty packaging materials. Successful commercialisation and scaling up to a significant size are important. We protect our intellectual property.

Effective dividend yield, %

4.4

32.5 1.27 9.82

P/E ratio

46.8 1.63

12.2 1.49

13.9 1.65 10.2

29.0

1.74 11.3

P/BV ratio 1)

13.1

8.3

EV/EBITDA ratio 2)

Market capitalisation, EUR million

14,165

18,165

18,629

17,845

16,250

*) 2024: Board’s proposal 1) P/BV ratio = Share price at 31 Dec./Equity per share 2) EV/EBITDA ratio = (Market capitalisation + Net debt)/EBITDA

36

37

UPM ANNUAL REPORT 2024

UPM ANNUAL REPORT 2024