UPM Annual Report 2025

We are UPM

Governance

Accounts and performance

UPM in brief

Our strategy

Our businesses

Sustainability

About this report

UPM reports on its corporate responsibility in accordance with GRI standards UPM has reported in accordance with the Global Reporting Initiative (GRI) standards for the period from January 1, 2025, to December 31, 2025. Our GRI index document shows where the material topics and general disclo sures can be found in the Annual Report, on UPM’s website or in the GRI index document itself. It also includes information about omissions and additional explanations and disclosures on the management approach. The document is available on UPM’s website upm.com/sustainability .

This Annual Report provides a comprehensive overview of our performance in 2025. All material information has been integrated into this document, including the accounts, the Corporate Governance Statement, and the Remuneration Report. Corporate Sustainability Reporting Directive (CSRD) The EU Corporate Sustainability Reporting Directive (CSRD) has introduced a standardized mandatory reporting framework requiring companies to disclose comprehensive information about their environmental, social, and governance performance. This includes actions to mitigate climate change, address human rights, and promote good governance. Under the CSRD, the European Sustainability Reporting Standards (ESRS) outline the EU requirements and indicators and provide detailed guidelines on the content and format of reporting on sustainability-related impacts, risks and opportunities. We have included the ESRS relevant to our business and the material topics identified through the double materiality assessment in the Sustain ability Statement (on pages 133–249).

Contents

The online reports All online reports can be found at upm.com/annualreport UPM Annual Report 2025 PDF version UPM Corporate Governance Statement 2025

Governance

We are UPM

Corporate Governance Statement

88 90 101 108

UPM in brief From the President and CEO

Our businesses UPM Biorefining

Board of Directors

UPM Remuneration Report 2025 Accounts for 2025 in XBRL format

4 6 8

36 37 38 39 40 42 43

Group Executive Team Remuneration Report

This is UPM

UPM Energy

UPM GRI Content Index 2025 UPM Material Balance 2025 Interactive Analyst tool for financial and sustainability data

Our businesses

UPM Adhesive Materials UPM Specialty Papers

Our performance in 2025

10 12 14

Events in 2025

UPM Fibres

Our solutions for every day

UPM Plywood

Read more about our responsibility agenda at upm.com/sustainability.

UPM Communication Papers

Accounts and performance

Our strategy We increase our growth focus through a streamlined business portfolio

Sustainability Value from sustainability

18 19

Report of the Board of Directors

116 133 137 155

46 47

We act on three fronts

Sustainability Statement

Our 2030 sustainability targets Actions for the environment Sustainable forestry

Strategy in action

20 24 25 26 28 29 30

ESRS 2 General information ESRS E1 Climate change

Financial performance and targets Driving long-term value creation

50 52 54 56 59 60 62 66 70 72 74 76 80 82 84

ESRS E2 Pollution 176 ESRS E3 Water and marine resources 183 ESRS E4 Biodiversity and ecosystems 188 ESRS E5 Resource use and circular economy 199 ESRS S1 Own workforce 208 ESRS S2 Workers in the value chain 222 ESRS S3 Affected communities 229 ESRS G1 Business conduct 236

Enhancing biodiversity

Changes in the composition and names of reportable segments in 2026

Strategic milestones in 2025

Committed to climate action

Innovating for impact

Toward CO 2 -free energy

UPM Fibres Given the significance of the UPM Fibres business and the distinct charac teristics of its Fibres South and Fibres North parts, we will provide additional financial information for these two parts of the UPM Fibres reporting segment starting in Q1 2026. In addition, we have moved the UPM Forest business into the UPM Fibres business area as of January 1, 2026. Most of the wood used by UPM in Finland is consumed within the UPM Fibres business, and the Finnish forests are therefore considered an integral operational and strategic part of the UPM Fibres North operations. The change improves consistency in reporting, as the forest assets in Uruguay have already been reported as part of the UPM Fibres South operations. Until the end of 2025, UPM Forest was included in Other operations.

UPM Biorefining UPM Biorefining, consisting of UPM Biochemicals and UPM Biofuels and reported as part of Other operations, was renamed UPM Next Generation Renewables as of January 1, 2026. Following these changes, Other Opera tions includes UPM Next Generation Renewables, UPM Innovation (former Technology), Group services, wood sourcing and forest assets in the U.S. UPM Specialty Papers UPM Specialty Papers was renamed UPM Specialty Materials as of Janu ary 1, 2026. In this Annual Report, we have used the names that were in use in 2025, except for UPM's business operations presented on pages 8–9.

Accelerating innovation through AI Generating shareholder value

Responsible water management Advancing the circular bioeconomy Creating value for people and society Active dialogue with stakeholders

Risks and opportunities

31

People and culture

A diverse and inclusive working culture

Financial Statements

258 343 350 355 360 362

Safety and well-being

Auditor's report

Collaborating on human rights Committed to compliance Ensuring a sustainable supply chain Contributing to society through taxes Our societal and environmental impacts

Sustainability Assurance Reports

Other financial information

More on sustainability

Contact us

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UPM Annual Report 2025

UPM Annual Report 2025

We are UPM

Governance

Accounts and performance

UPM in brief

Our strategy

Our businesses

Sustainability

From the President and CEO

UPM demonstrated resilience and decisiveness in 2025. In an exceptionally turbulent environment, we maintained our focus on competitiveness and strategic choices. Determinedly toward the future

Maintaining our focus on sustainability We believe sustainability is not only essential, but also good business. Therefore, sustaina bility permeates our strategy and operations, Our business portfolio meets the growing demand for renewable materials and enables attractive returns and new grpwth avenues. We use natural resources responsibly, reduce our environmental footprint, and enhance our positive societal impact. We believe in science-based actions and continu ous development. Our longstanding commitment to sustaina bility is widely recognized. In 2025, these rec ognitions included the Platinum rating from EcoVadis, placing UPM among the top 1% of companies worldwide in sustainability. Creating shareholder value We have entered 2026 with cautious opti mism, with the business environment show ing signs of stability. Our focus will remain on performance, cash generation, strengthening the balance sheet and successfully completing strategic portfolio initiatives. With a major investment cycle behind us, we will maintain our disciplined capital allocation, focused growth investments and balance sheet strength while offering attrac tive distribution to shareholders. In 2025, we launched a share buy-back program and repurchased six million shares for a total of €160 million, corresponding to approximately 1.1% of the total number of shares. Demonstrating continued confidence in UPM’s strategy and ability to create value, the Board of Directors proposed an unchanged dividend of €1.50 per share for 2025. The dividend represents 113% of UPM’s comparable earnings per share for 2025. We have witnessed extraordinary circum stances, but also the power of resilience and the value of trust. I want to credit the entire UPM team for their commitment, and thank our customers, shareholders and other stake holders for their continued trust in us. We look forward to our shared journey ahead!

Focused growth with advanced materials

In 2025, we continued our strategic renewal despite the turbulent business environ ment caused by the escalating geopolitical and trade tensions. Toward the end of the year, the market environment started to stabilize. and our actions to strengthen our competitiveness yielded visible performance improvements in most of our businesses. We finished the challenging year on a positive note, with strong cash flow and improved performance. In challenging markets, our comparable EBIT decreased by 25% from the previous year to €921 million, representing 9.5% of sales. Our operating cash flow and financial position remained solid. Transformative portfolio choices We continued our strategic transformation with major portfolio decisions. During the first half of the year, we strengthened our position in adhesive materials with the acquisition of Metamark, sharpened our growth strategy in biofuels and discontinued developing the biorefinery in Rotterdam. In September, we started a strategic review of our plywood business, which has demonstrated robust performance and re silience over economic cycles. Through this review, we aim to determine the most bene ficial future alternatives for the business and UPM shareholders. In December, we announced our plans for the graphic paper business: a Joint Venture that would encompass the UPM Communi cation Papers business and Sappi's graphic paper operations in Europe. UPM has a strong heritage in graphic pa pers, and we are extremely proud of it. Over the years, we have transformed into a global leader with multiple businesses. The planned Joint Venture would start a new era in our

transformation while continuing to provide the best possible future for the graphic paper business and its customers. These portfolio initiatives would change the company’s profile, increase our growth focus, and improve margins and leverage. In the future, UPM would have an attractive portfolio of businesses in growing markets, with a record of consistently exceeding GDP growth. Growth potential in decarbonization solutions UPM Energy’s CO 2 -free power generation assets supply reliable base load with nuclear power and value-adding balancing power with hydropower. As the second-largest electricity producer in Finland, the business is well-positioned to meet the growing need for reliable, CO 2 -free electricity. Our next generation renewables pave the way for future growth: UPM Biofuels has a solid market position in the European advanced renewable fuels market. This makes the business well positioned to seek targeted growth through potential debottlenecking and possible entry into the sustainable aviation fuels market. In 2025, the business improved its performance, returning to EBIT profitability thanks to excellent production efficiency and improved market conditions. In UPM Biochemicals, we have made significant progress in this exciting new busi ness. We successfully ramped up the first core processes at the Leuna biorefinery, and we are now operating commercially. Cus tomer interest and the qualification pipeline continue to exceed the annual capacity. The business is expected to reach full production and positive EBIT during 2027.

Our advanced materials businesses offer technically demanding materials for grow ing end uses. These businesses require less capital than other UPM businesses and can pursue focused growth in the coming years. UPM Adhesive Materials grew faster than the market, and ongoing efficiency measures are improving performance and capturing growth. The business has strengthened its presence in the U.S. and Southeast Asia and gained a solid position in the attractive graphic solutions sector. UPM Specialty Materials has a strong glob al position in flexible packaging, labeling and industrial release liners, as well as fine pa pers in the Asia-Pacific region. With a strong customer focus and technical capabilities, the business is seeking growth in specialized applications and adjacent opportunities. Maximizing value creation with renewable fibres Thanks to our major investments in the highly competitive Fibres South platform, we now have world-class pulp assets, sustaina ble and productive plantations, and efficient logistics infrastructure. In 2025, Fibres South performed strongly despite unfavorable market conditions. Fibres North complements our pulp of fering with high-quality softwood pulp, with well-managed assets and flexible operating mode that enables competitiveness. Our strategic partnership with Versowood, the largest private sawn timber producer in Fin land, strengthens our position in tight wood markets.

Massimo Reynaudo President and CEO

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UPM Annual Report 2025

UPM Annual Report 2025

We are UPM

Governance

Accounts and performance

UPM in brief

Our strategy

Our businesses

Sustainability

This is UPM

We are a material solutions company

Decarbonization solutions

Your partner in renewing materials and value chains

UPM contributes to the sustainable transformation of society with material solutions, utilizing renewable feedstocks. We create long-term value through our extensive portfolio of renewable fibres, advanced materials, decarbonization solutions and communication papers, collaborating with industries and brands worldwide.

Advanced materials

upm.com

Renewable fibres

Take a closer look at our businesses on the next page

Y

G

R

E

N

E

E

E

R

Sustainable, renewable feedstocks

F

S I L

Sales by market

Communication papers

S

O

F

6%

In 2025, we launched significant strategic initiatives that continue to transform the company.

15%

55% Europe

Europe Asia North America Rest of the world

Advanced materials UPM’s advanced materials provide technical solutions that add value for a variety of growing applications, including paper and film labels, graphic solutions, flexible packaging, and labeling. Our plywood is ideal for construction, vehicle flooring, and LNG shipbuilding. Decarbonization solutions Our wood-based renewable biochemicals replace fossil-based materials in packaging, PET bottles, cosmetics, pharmaceuticals, textiles, detergents, rubbers and resins. Our renewable diesel is suitable for all diesel engines and our renewable naphtha serves as a biocomponent for gasoline. Our CO 2 free electricity supports the decarbonization of energy systems, and we explore opportunities in the electrification of the society.

Renewable fibres UPM’s renewable fibres cover a wide range of applications, providing pulp products well suited for tissue, specialty papers, packaging papers, graphic papers and board. We also offer sawn timber that is perfect for joinery, packaging, furniture, planing, and construction.

24%

48 production plants​ in 10 countries

15,100 employees in 42 countries​

10,000 b2b customers

Communication papers UPM offers the industry’s widest portfolio of graphic papers, including magazine papers, newsprint and fine papers. These products are ideal for advertising, publishing, and everyday use in homes and offices.

More than 300 million end-users worldwide

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UPM Annual Report 2025

UPM Annual Report 2025

We are UPM

Governance

Accounts and performance

UPM in brief

Our strategy

Our businesses

Sustainability

Worldwide presence Our strong and balanced business portfolio of renewable fibres, advanced materials, and decarbonization solutions provides a number of attractive growth opportunities. We serve global markets and our head office is in Finland.

Advanced materials

Decarbonization solutions

UPM Specialty Materials UPM Specialty Materials offers specialty packaging materials for flexible packaging, labeling and industrial release liners, as well as office and graphic papers in the Asia-Pacific region. • Total annual production capacity of 2.0 million tonnes

UPM Adhesive Materials UPM Adhesive Materials provides high-performance, innovative self-adhesive products, including label materials, graphics solutions, and specialty tapes, as well as reliable services close to customers. • 12 factories and 21 slitting and distribution terminals around the world China: Changshu Finland: Tampere Germany: Hagenow Malaysia: Johor Bahru Poland: Biskupice Podgórne ( Wrocław) and Nowa Wieś (Wrocław) United Kingdom: Scarborough and Lancaster USA: Mills River, NC; Fletcher, NC and Dixon, IL Factories Belgium: Houthalen

UPM Energy UPM Energy generates carbon-free electricity in its own and co-owned power plants. The business also trades electricity and its derivatives on the market and explores opportunities in energy transformation. UPM Energy is the second largest electricity producer in Finland. • The total electricity generation capacity is 1,943 MW, including UPM’s own hydropower plants and shareholdings in other energy companies • Approx. 33% share in OL1 and OL2, and 31% share in the OL3 nuclear power plant units through the shareholding in Pohjolan Voima Oyj (PVO) • Largest shareholdings: – 54.3% of Pohjolan Voima Oy (PVO), which is the majority shareholder (58.5%) in Teollisuuden Voima Oyj (TVO) – 19% of Kemijoki Oy’s hydropower shares Hydropower plants: Finland: Kallioinen (Sotkamo), Kaltimo (Joensuu), Katerma (Kuhmo), Keltti (Kouvola), Kuusankoski (Kouvola), Tyrvää (Sastamala), Voikkaa (Kouvola) and Äetsä UPM Next Generation Renewables UPM Biochemicals offers wood-based renewable biochemicals to replace fossil-based raw materials in various applications such as packaging, PET bottles, cosmetics, pharmaceuticals, textiles, detergents, rubbers and resins. UPM Biofuels produces wood-based renewable diesel for all diesel engines and renewable naphtha that can be used as a biocomponent for gasoline or for replacing fossil raw materials in the petrochemical industry. • UPM Leuna Biorefinery: Annual production capacity of 220,000 tonnes of wood-based, renewable glycols, renewable functional fillers and industrial sugars (full production expected in 2027) • UPM Lappeenranta Biorefinery: Annual production capacity of 130,000 tonnes of wood-based renewable diesel and naphtha Biorefineries Germany: UPM Leuna Biorefinery Finland: UPM Lappeenranta Biorefinery

Paper mills China: UPM Changshu Finland: UPM Jämsänkoski (Jämsä) and UPM Tervasaari (Valkeakoski) Germany: UPM Nordland Papier (Dörpen)

UPM Plywood UPM Plywood offers high-quality WISA ® plywood and veneer products for construction, vehicle flooring, LNG shipbuilding, parquet manufacturing and other industrial applications. • Annual production capacity of 785,000 cubic meters Plywood mills Estonia: UPM Otepää Finland: UPM Joensuu, UPM Pellos 1, 2, 3 (Mikkeli) and UPM Savonlinna

Renewable fibres

Communication papers UPM Communication Papers UPM Communication Papers offers the industry’s widest portfolio for newspaper, magazine, marketing and book printing, as well as for home and office applications. The business has extensive low-cost operations in Europe and the USA, a global sales network and an efficient logistics system. Its main customers are publishers, cataloguers, retailers, printers and merchants. • Annual paper production capacity of 3.7 million tonnes, produced in 8 paper mills • Capacities: Annual production capacity of 1.4 million tonnes of coated publication papers, 0.8 million tonnes of uncoated publication papers and 1.5 million tonnes of fine papers • The combined heat and power (CHP) plants at the paper mill sites included in the business area • Owns 76,000 hectares of forest land in the USA Paper mills Finland: UPM Jämsänkoski (Jämsä), UPM Kymi (Kouvola) and UPM Rauma Germany: UPM Augsburg, UPM Nordland Papier (Dörpen) and UPM Schongau United Kingdom: UPM Caledonian Paper (Irvine) USA: UPM Blandin (Grand Rapids, MN)

Slitting and distribution terminals Argentina: Buenos Aires Australia: Melbourne Canada: Toronto Chile: Santiago China: Guangzhou

UPM Fibres UPM Fibres consists of pulp, timber and forest businesses. UPM Pulp offers a versatile range of pulp products suitable for many end uses such as tissue, specialty papers, packaging papers, graphic papers and board. UPM Timber offers certified sawn timber for joinery, packaging, furniture, planing and construction. UPM Forest secures competitive wood and biomass for UPM’s businesses and manages UPM owned and privately-owned forests in Northern Europe. UPM Forest also provides forestry services to forest owners, from private forest owners to forest investors. • Annual pulp production capacity of 5.8 million tonnes, produced at two pulp mills in Uruguay and three pulp mills in Finland • Annual capacity in tonnes by mill: UPM Paso de los Toros 2.1 million tonnes; UPM Fray Bentos 1.3 million tonnes; UPM Kymi 870,000 tonnes; UPM Pietarsaari 800,000 tonnes and UPM Kaukas 700,000 tonnes • 495,000 hectares of owned and leased plantations in Uruguay

• Certified sawn timber with an annual capacity of 1.0 million cubic meters, produced in three sawmills in Finland • Wood and biomass sourcing in 12 countries, 522,000 hectares of own forest land in Finland, offering forestry services to private forest owners in Finland • UPM RaumaCell, annual capacity of 100,000 tonnes of fluff pulp, produced in Rauma, Finland Pulp mills Finland: UPM Kaukas (Lappeenranta), UPM Kymi (Kouvola), UPM Pietarsaari and UPM RaumaCell Uruguay: UPM Fray Bentos, UPM Paso de los Toros and certified eucalyptus plantations Sawmills Finland: UPM Alholma (Pietarsaari), UPM Kaukas (Lappeenranta) and UPM Seikku (Pori)

France : Nancy India: Mumbai Indonesia: Jakarta Italy: Osnago Mexico: Mexico City, Guadalajara and Rosarito New Zealand: Auckland South Africa: Johannesburg Spain: Barcelona Thailand: Bangkok Turkey: Istanbul Ukraine: Kiev USA: Vancouver, WA Vietnam: Ho Chi Minh City and Hung Yen (to be opened in 2026)

Veneer mill Finland: UPM Kalso (Kouvola)

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UPM Annual Report 2025

UPM Annual Report 2025

We are UPM

Governance

Accounts and performance

UPM in brief

Our strategy

Our businesses

Sustainability

Our performance in 2025

Aiming for continuous improvement in sustainability

Sales €bn 9.7 -7%

791 Dividend (proposal), €m Dividend of €1.50 per share unchanged Attractive dividend

3,004 Net debt/EBITDA ratio 2.29 Net debt, €m Strong balance sheet

94% The UPM Code of Conduct lays the foundation for responsible business operations and continuous improvement. -5pp Active employees completed Code of Conduct training *

Employee engagement score

Fossil CO 2 emissions (Scope 1 and 2), million tonnes

67

2.9

Engaged, high-performing people drive our success. -3 points

Creating climate solutions and working towards carbon neutrality. -15%

Comparable EBIT, €m 921 -25% Performance

Capital expenditure, €m 621 attractive returns with disciplined and effective investments Focused investments

and unused credit facilities, €bn 2.7 Cash funds

86% Share of spend covered by our Supplier Code

90% Share of certified wood

5.0 Total recordable injury frequency

+1.5pp

Ensuring a safe working environment for employees and everyone working for UPM. -2%

-5pp

Transparent supplier requirements form the basis of responsible sourcing throughout the entire supply chain.

Forest certification is an excellent tool for ensuring sustainable forestry. Chain-of-Custody requirements ensure 100% supply from controlled sources.

Comparable ROE 6.5 -1.8pp Performance

Operating cash flow, €m 1,405 +4% Cash flow

Business areas achieved their financial targets 2/6 Business areas

* Percentage of active employees completed the new UPM Code of Conduct training since September 2025, excl. the company UPM Adhesive Materials acquired in 2025.

Recognitions Dow Jones Sustainability Index: The only forest and paper company included in the Dow Jones European and World Sustainability Indices (DJSI) for 2024–2025. MSCI ESG ratings: An AAA rating in the assess ment. MSCI ESG Research provides ESG ratings on global public companies based on their exposure to industry-specific ESG risks and their ability to manage those risks relative to peers. CDP Program : A score for our leadership in corporate transparency and action on climate change, and a leadership-level score of A- for forests and water stewardship. An A score in CDP’s 2024 Supplier Engagement Assessment

(SEA), which evaluates how companies engage their supply chains on climate-related issues.

Sales 2025 €9,656 million

Comparable EBIT 2025 €921 million

Capital employed 31 Dec 2025 €14,129 million

4% 7%

6%

S&P Global's Sustainability Yearbook: Top 10% S&P Global CSA Score in the Sustaina bility Yearbook 2025 as one of the top-scoring companies in our industry. EcoVadis: The highest possible Platinum level for our sustainability performance, which only 1% of the over 100,000 companies assessed globally attain. The assessment evaluates per formance across four categories: Environment, Labor and Human Rights, Ethics, and Sustaina ble Procurement. UPM’s overall score increased by 5 points, reaching an impressive 90 out of 100.

16%

4%

17%

19%

16%

13%

2% 6%

5% 6%

UPM Fibres 45%

20%

UPM Fibres 32%

UPM Fibres 31%

24%

12%

16%

We are a participant in the UN Global Compact.

Business area information unconsolidated

Other operations

UPM Plywood

UPM Communication Papers

UPM Fibres

UPM Specialty Papers

UPM Adhesive Materials

UPM Energy

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UPM Annual Report 2025

UPM Annual Report 2025

We are UPM

Governance

Accounts and performance

UPM in brief

Our strategy

Our businesses

Sustainability

Events in 2025

June

October

12 The UPM Raflatac business area is renamed UPM Adhesive Materials. 10 UPM expands its over 15-year collaboration with the Baltic Sea Action Group (BSAG) to include forestry water protection.

9 UPM Adhesive Materials announces plans to open a new slitting and distribution terminal near Hanoi, northern Vietnam in 2026.

November

January

April

4 UPM Energy commissions a grid-balancing ultracapacitor at the Kuusankoski hydropower plant in Finland. 19 UPM Plywood launches new WISA ® -LNG Spruce plywood for the insulation elements of LNG cargo tanks.

2 UPM announces that it has been listed as the only forest and paper industry company in the Dow Jones World and European Sustainability Indices 2024–2025.

8 UPM completes the share buy-back program commenced in February.

10 UPM Adhesive Materials becomes the first labeling business to include product footprint data in customer quotes. 16 UPM Specialty Papers invests over €10 million in modernizing the UPM Tervasaari mill in Valkeakoski, Finland. 17 Tuija Suur-Hamari is appointed Executive Vice President of UPM Plywood and a member of the Group Executive Team as of September 1, 2025.

February

December

17 UPM’s new biorefinery in Leuna, Germany, achieves ISCC PLUS, PEFC, and FSC™ chain-of-custody certifications. 25 UPM's stream water program, launched in 2016, expands to include UPM-owned land areas in the catchment area.

July

24 UPM Adhesive Materials announces an investment in its factory in Mills River, North Carolina, to increase production capacity in the growing advanced labels market. 28 Sami Pauni is appointed Executive Vice President, General Counsel, and a member of the Group Executive Team as of January 26, 2026. 24 UPM announces plans to end paper production at UPM Kaukas, Finland by the end of 2025. Production ends in November. 30 UPM receives a Platinum rating from EcoVadis, placing the company in the top 1% globally for its sustainability performance.

5 UPM Adhesive Materials acquires Metamark, a UK-based company, to further accelerate growth in the Graphics business. 5 UPM updates its Disclosure Policy and changes its method for issuing profit guidance and outlook. 5 UPM commences a share buy-back program for a maximum of 6 million shares, or a maximum of €160 million. 5 UPM’s Board of Directors establishes a new employee share savings arrangement targeted at employees in countries where it is legally and administratively feasible. The first plan, MyShare, for 2025–2028, is announced. 11 UPM is recognized among the top sustainability performers by CDP and S&P Global.

4 UPM and Sappi sign a non-binding letter of intent to form a graphic paper Joint Venture. 11 UPM launches UPM Circular Renewable Black ™ – the first bio based, NIR-detectable pigment for sustainable premium packaging. 16 UPM signs €1,250 million revolving credit facility agreement. 19 The production and sales of industrial sugars, the first commercial products from the UPM Leuna Biorefinery begin. 31 Strategic partnership between UPM and Versowoods is finalized.

28 UPM Biofuels celebrates ten years of operations at its Lappeenranta Biorefinery in Finland, the world’s first commercial scale facility to produce wood-based advanced biofuels.

May

5 UPM cancels the 6 million shares repurchased under its buy back program. 27 UPM announces plans to discontinue the development of its potential second biomass-to-fuels refinery in Rotterdam, the Netherlands.

August

7 UPM Adhesive Materials announces an investment in a new, state-of-the-art coating line at its factory in Johor Bahru, Malaysia.

March

September

11 UPM Communication Papers announces plans to permanently close its paper mill in Ettringen, Germany and to streamline its structure to ensure performance. Production ends in December.

29 UPM and Versowood agree on a long-term partnership concerning cost-effective wood sourcing in Finland. As part of the agreement, UPM sells its Korkeakoski sawmill in Juupajoki, Finland, to Versowood and receives a minority shareholding in the company. 23 UPM initiates a strategic review of the UPM Plywood business area to assess options for maximizing its long-term potential in an evolving market environment. 4 UPM Adhesive Materials announces plans to discontinue label materials production at its factory in Nancy, France.

27 UPM holds its Annual General Meeting.

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UPM Annual Report 2025

UPM Annual Report 2025

We are UPM

Governance

Accounts and performance

UPM in brief

Our strategy

Our businesses

Sustainability

Our solutions for every day At UPM, we provide sustainable material solutions for everyday products that benefit both customers and consumers.

Apparel and textiles

Electrification

Automotive and transportation

Enabling sustainable choices We create value for our customers by enabling sustainable choices throughout the value chain. Our renewable solutions offer alternatives to fossil-based products and contribute to climate‑mitigation efforts.

Our priorities for customers

Graphic solutions

Labeling

Packaging

Customer success We focus on long-term relationships and customer success. Our commitment to innovation ensures that customers find tailored solutions for their specific needs, both now and in the future. Deep customer understanding and collaboration Our approach is based on a deep understanding of each market, how our products are used, and our customers’ needs. We maintain an ongoing dialogue with our customers and work with them on various product devel opment projects. Sustainable product design Sustainability is embedded in our product development from the be ginning. We consider environmental and social impacts throughout the product life cycle, from material selection through production, use, and recycling. Transparency We provide environmental data and product declarations for our products, many of which carry internationally recognized ecolabels. We also offer product safety profiles, compliance declarations, and non-use warranties for chemical substances.

Construction

Tissue and hygiene end uses

Printing and publishing

Explore our solutions on our website

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UPM Annual Report 2025

UPM Annual Report 2025

We are UPM

Governance

Accounts and performance

Our strategy

UPM in brief

Our businesses

Sustainability

Our strategy

We increase our growth focus through a streamlined business portfolio

18

We act on three fronts

19

Strategy in action

20

Financial performance and targets

24

Driving long-term value creation

25

Strategic milestones in 2025

26

Innovating for impact

28

Accelerating innovation through AI

29

Generating shareholder value

30

Risks and opportunities

31

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UPM Annual Report 2025

UPM Annual Report 2025

We are UPM

Governance

Accounts and performance

Our strategy

UPM in brief

Our businesses

Sustainability

We increase our growth focus through a streamlined business portfolio

We act on three fronts

In addition to the strategic portfolio projects, we will further improve competitiveness, increase capital efficiency and strengthen the balance sheet. We will capture focused growth opportunities. Following recent investments, UPM has a strong asset base to capture market potential in a capital-efficient way. We aim to develop a portfolio of world-class businesses.

In late 2025, UPM announced two strategic portfolio projects: the intended graphic paper Joint Venture between UPM and Sappi; and the strategic review of UPM Plywood (see page 27). Assuming the Joint Venture is formed, UPM would have a stronger growth profile, improved margins and lower leverage. There would be no direct sales exposure to the declining European and North American graphic paper markets. This would mark the beginning of a new era in our transfor mation. A focused material solutions company with a strong track record of growth Assuming the Joint Venture is formed, the future UPM would have an attractive busi ness portfolio focusing on renewable fibres, advanced materials and decarbonization solutions, all of which operate in growing markets. Across these businesses, UPM has a solid history of achieving growth rates consistently exceeding GDP growth over the past decade. Through the graphic paper Joint Venture, UPM aims to position the UPM Communi cation Papers business to create continued value for its customers in a way that benefits UPM shareholders. The intended Joint Ven ture is expected to close by the end of 2026, subject to regulatory approvals and other closing conditions. UPM Plywood is currently undergoing a strategic review to assess options for maxi mizing the long-term potential and value cre ation of the business. The review is expected to be concluded by the end of 2026. Strategic portfolio projects expected to be concluded in 2026

Decarbonization solutions

Improve competitiveness 1

2 Focused growth

3 World-class businesses

Advanced materials

• Improve performance through cost efficiency, streamlining and commercial excellence • Increase capital efficiency and cash flow following recent investments • Strengthen the balance sheet

• Strong asset base enables growth with low investment needs • Growth markets and faster-growing geographies • Competitive production platforms

• Portfolio of leading businesses in growing markets • World-class performance in each business • Planned graphic paper Joint Venture • Strategic review of UPM Plywood

Y

G

Renewable fibres

R

E

N

E

E

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R

Sustainable, renewable feedstocks

F

S I L

S

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F

UPM businesses

Market growth

Key enablers

+++

Decarbonization solutions: Large long-term growth potential with unique solutions

People We focus on performance, engagement, safety and integrity. Diversi ty and inclusion, learning, responsible leadership, and respect are at the core of our work. We aim for sustained excellence and continu ous professional growth. Productivity We use advanced technologies, sustainable practices and strategic initiatives to improve efficiency and productivity. This ensures the competitiveness of our businesses and supports our growth ambi tions. Commercial excellence We optimize commercial interfaces and processes to ensure secu rity of supply and enhance the customer experience. This supports our ongoing efforts to sustain and grow earnings.

Sustainability The UPM Code of Conduct underlines our commitment to integrity and responsible operations. We create value from renewable and recyclable materials, reduce our environmental footprint, and en hance our positive societal impact. Innovation Sustainability, the circular economy, and our customers are at the heart of our innovation. We innovate new materials and solutions to help our customers’ businesses become more sustainable. We innovate to make our operations and processes more efficient. We innovate to increase our employees’ productivity.

++

Advanced materials: Focused capital-efficient growth

+

Renewable fibres: Maximizing value creation from the existing assets

Communication papers: Focus on cash flow Form a graphic paper Joint Venture

-

18

19

UPM Annual Report 2025

UPM Annual Report 2025

We are UPM

Governance

Accounts and performance

Our strategy

UPM in brief

Our businesses

Sustainability

Strategy in action UPM is a material solutions company with world-class businesses in growth markets. These businesses are leading in their fields and aim for world-class performance. We have global market presence, which enables our businesses to capture opportunities in faster-growing markets, serving them from competitive production platforms.

Decarbonization solutions Decarbonization solutions businesses address the growing need to reduce climate emissions, offering solutions ranging from the electrification of society to low-emission traffic and bio-based chemicals. Market growth: +++

Improve competitiveness

Focused growth

World-class businesses

Biochemicals

• First customer deliveries of industrial sugars in 2025 • Further products will be introduced in the first half of 2026

• Entry to new business • Commercial interest confirmed • Gather learnings for next steps

• 220,000 tonnes of pioneering renewable chemicals • Full production and positive EBIT expected during 2027

Biofuels

• Decreased variable costs • Improved efficiency • Discontinued the Rotterdam biorefinery development

• CapEx-efficient debottlenecking • Qualification process for SAF • Proprietary feedstock technologies development

• 130,000 tonnes of advanced renewable fuels • Profitability improvement and recovering markets

Energy

• Maximize value in the volatile electricity markets

• Capability to supply CO₂-free electricity and ready sites for industrial use, to meet growing demand from electrifica tion, data centers and green transition

• 12 TWh of CO₂-free electricity, baseload and flexibility • Strong value creation track record

20

21

UPM Annual Report 2025

UPM Annual Report 2025

We are UPM

Governance

Accounts and performance

Our strategy

UPM in brief

Our businesses

Sustainability

Advanced materials The advanced materials businesses offer technically demanding materials for growing end uses. The businesses require less capital than other UPM businesses and are well positioned to pursue focused growth in the coming years. Market growth: ++ Improve competitiveness Focused growth World-class businesses

Renewable fibres UPM Fibres offers sustainable, high-quality hardwood and softwood pulp, and sawn timber products worldwide. Its strong asset base and capabilities provide opportunities to increase capital efficiency and generate strong cash flow. Market growth: +

Improve competitiveness

Focused growth

World-class businesses

Adhesive Materials

Fibres South

• Actions to sharpen com petitiveness and restructure production footprint • Closed production in two fac tories in Nancy, France, and in Kaltenkirchen, Germany

• Growth faster than the markets in 2025 • Investments to grow in

• Strong position globally on the growing label materials markets • Establishing a solid position in attractive graphics markets

• Optimization of wood sourcing and inbound

• Planning capex-efficient debottlenecking to unlock further potential

• 3.4m tonnes eucalyptus pulp • World-class low-cost platform, including highly productive plantations

logistics, as the plantations increasingly reach maturity by 2027

advanced labels in the U.S. and to strengthen asset base in Southeast Asia • Acquired Metamark, continu ing to build position in graphics

Fibres North

Specialty Papers

• Strategic partnership with Versowood to strengthen pulp wood supply in Finland • Flexible operating mode at all mills, efficiency measures

• 2.4m tonnes, mainly softwood pulp • UPM Forest in Finland has been included in Fibres North from January 2026 onwards

• Decreased variable costs, efficiency measures

• Flexible paper-based packaging development • Capacity to grow with low investments

• Strong position globally on growing label and release base materials markets • Solid position on the promis ing renewable flexible packag ing materials markets

Communication papers Focus on performance and cash flow. Market growth: -

Plywood

• Strong production efficiency in the second half of the year

• Strategic review initiated • Launched a new solution to supply the strong demand in LNG shipping

• Strong position in Europe and globally in LNG

Improve competitiveness

World-class businesses

Communication Papers

• Planned graphic paper Joint Venture with Sappi • Closed paper production at UPM Kaukas (300,000t) in Finland and UPM Ettringen paper mill (270,000t) in Germany during Q4 2025 • Combined reduction: 13% of capacity, €70 million of annual fixed costs • Sold the earlier closed Plattling paper mill site, Germany

• Reliable supplier of sustainable communication papers, cost-efficient operations • Strong 2025 free cash flow at €362 million

22

23

UPM Annual Report 2025

UPM Annual Report 2025

We are UPM

Governance

Accounts and performance

Our strategy

UPM in brief

Our businesses

Sustainability

Financial performance and targets

Driving long-term value creation

We aim for earnings growth and attractive returns on capital. In 2025, our comparable EBIT decreased by 25% from the previous year in a challenging market.

We deliver sustainable growth and attractive returns over time by combining agile business operations, disciplined capital allocation and corporate synergies.

Financial targets At a business level, we aim for world-class performance and attractive returns (ROCE %). At the Group level, we are targeting growth in comparable EBIT and a return on equity (ROE) exceeding 10%. We also aim to maintain a strong balance sheet with a net debt/EBITDA ratio of 2x or lower.

Portfolio of attractive businesses • Leading businesses in growing markets • World-class performance. Agile operating model: Our businesses operate as separate, market-driven entities • High efficiency and agility • Differentiated commercial strategies • Optimal sourcing • Broad product development opportunities. Corporate synergies for our businesses • Competitive and sustainable wood sourc ing, forestry and plantation operations • Efficient global functions • Technology development and intellectual property rights • Global business platform • Disciplined and effective capital allocation • Compliance, the UPM Code of Conduct, and a strong UPM brand. Effective capital allocation We aim to allocate capital in a balanced way by developing the company through focused investments, offering attractive shareholder

The market environment was challenging across our businesses in 2025, impacted by changes and high uncertainty in global trade relations. During the year, we took decisive actions to further strengthen our competi tiveness. A major investment cycle at UPM has come to an end. Despite low pulp prices, our highly competitive business platform in Uru guay performed well. The Leuna biorefinery

began delivering industrial sugars to cus tomers in December and expects to enter the market with further commercial products in the first half of 2026. Our focus is on improving performance and cash flow, as well as strengthening our balance sheet. Our strong asset base enables us to capture growth opportunities with low capital expenditures.

distribution and maintaining a strong balance sheet. Capital allocation is essential for achieving attractive long-term returns and de veloping a portfolio of world-class businesses. At UPM, capital allocation decisions are made at the corporate level: • Focused investments to grow the company and its earnings • Attractive dividends, targeting at least half of comparable earnings per share over time

• Maintain a strong balance sheet. Accord ing to UPM’s leverage policy, the net debt to EBITDA ratio should be less than two. An investment-grade rating is an impor tant element of the financing strategy • Share buybacks are a complementary tool that can be used relative to investment opportunities and company valuation.

Financial Statements on page 258

Group financial performance and targets

Dividend per share

Enterprise value and cumulative dividends

€

%

€m

Comparable ROE

Net debt and leverage

Comparable EBIT

100

30,000

1.0 1.2 1.4 1.6

%

€m

Net debt/EBITDA (x)

€m

25,000

2,500

4,000

12

4

80

Target

2,000

20,000

3,000

9

3

60

1,500

0.0 0.2 0.4 0.6 0.8

15,000

2,000

2

6

1,000

40

10,000

1

1,000

3

500

20

5,000

0

0

0

0

16 17

16 17 18 19 20 21 22 23 24 25

16 17 18 19 20 21 22 23 24 25

20 21 22 23 24 25

18 19

0

0

-1

16 17

24 25 20 21 22 23 18 19

20 21 22 23 18 19 16 17 Dividend € per share (2025 proposal) % of comparable EPS

24 25*

Net debt Net debt/EBITDA

Cumulative dividend Market capitalization Net debt

-6.7% Share price 2025

*Board’s proposal

Business area long-term return targets

UPM Communication Papers

UPM Specialty Papers

UPM Adhesive Materials

UPM Plywood

ROCE %* ) UPM Fibres

UPM Energy*** )

5-year share performance and valuation multiples

2025 2024 2023 2022 2021

FCF/CE %** )

ROCE %* )

ROCE %* )

ROCE %* )

ROCE %* )

21

24.79

Share price at Dec. 31, € Comparable EPS, € Dividend per share, €

26.56 34.06 34.93 33.46 1.74 1.40 3.09 2.22

50

20

50

48

20

50

20

1.50 Dividend proposal, € per share

18

44

1.33

17

17

16

40

40

40

40

1.50 *)

1.50 1.50 86 107

1.50

1.30

Target

15

15

15

Target

34

32

113

Dividend to comparable EPS, %

49

59 3.9

12

11

30

30

30

11

10

25

6.1

Effective dividend yield, %

5.6

4.4 4.3

10

10

10

22

22

Target

Target 17

20

20

20

7

7

27.3 1.31 12.3

P/E ratio

32.5 46.8 12.2 13.9 1.27 1.63 1.49 1.65

18

Target

6

Target

14

14

11

5

5

5

P/BV ratio 1)

10

15

4

6

10

10

10

Share buy-back program for 6 million shares, shares cancelled in May 160 M€

12

2

9.8

13.1

8.3 10.2

EV/EBITDA ratio 2)

0

0

0

0

0

0

13,072

Market capitalization, € million

14,165 18,165 18,629 17,845

21 22 23 24 25

21 22 23 24 25

21 22 23 24 25

21 22 23 24 25

21 22 23 24 25

21 22 23 24 25

*) 2025: Board’s proposal 1) P/BV ratio = Share price at Dec. 31/Equity per share 2) EV/EBITDA ratio = (Market capitalization + Net debt)/EBITDA

* ) ROCE % = Return of capital employed excluding items affecting comparability ** ) Free cash flow after investing activities and restructuring costs *** ) Shareholdings in UPM Energy valued at fair value

24

25

UPM Annual Report 2025

UPM Annual Report 2025