UPM Annual Report 2025

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We are UPM

Governance

Accounts and performance

Financial Statements

Report of the Board of Directors

Sustainability Statement

Auditor's Report

Sustainability Assurance Reports

Restricted Share Plan The Restricted Share Plan (RSP) is used as a commitment instrument for individually selected participants in specific recruitment and retention situations. The Restricted Share Plan is targeted at the President and CEO, the other Group Executive Team members and the other selected members of the senior management. The President and CEO is not eligible to receive a reward from this Plan for retention purposes. Each plan consists of a one-year grant period and a three-year vesting period

The pension plans are generally funded through payments to insurance companies or to trustee-administered funds or foundations and classified as defined contribution plans or defined benefit plans. Defined benefit assets and liabilities recognized in the balance sheet are presented below:

3.4 Retirement benefit obligations The Group operates various pension schemes in accordance with local conditions and practices in the countries of operations. Retirement benefits are employee benefits that are payable usually after the termination of employment, such as pensions and post-employment medical care.

during which share rewards are delivered in instalments to the participants. The first instalment of the reward shall be delivered no earlier than one year after the date the participant was nominated to the Plan. No earning criteria is applied to the Restricted Share Plan and the delivery of the share reward is subject to the continuation of the employment or service.

2025

2024

Restricted Share Plan

RSP 2024-2027

RSP 2025-2028

Other countries Total

€ million

Finland UK Germany

No. of participants (at December 31, 2025)

Present value of funded obligations

283

—

323

305

—

321

Estimated no. of shares to be delivered at December 31, 2025 1)

150,892

130,000

Fair value of plan assets

-14

-266

-2

—

-281

-15

-275

-2

-293

Share delivery (year)

2025,2026,2027*

2027,2028*

Deficit (+)/surplus (–)

-2

1) Share delivery in annual instalments

Present value of unfunded obligations

—

362

375

—

431

446

Net defined benefit liability (+)/asset (–)

387

417

429

474

The indicated actuals and estimates of the share rewards under the Performance Share Plan, the Deferred Bonus Plan and the Restricted Share Plan represent the gross amount of the rewards of which the applicable taxes will be deducted before the shares are delivered to the participants. Employee Share Savings Plan In 2025, UPM launched a voluntary employee share savings plan called MyShare for all UPM employees globally. Each plan consists of a three - year plan period, including a one-year savings period followed by a two-year holding period. The participants of the plan invest a part of their salary from the pay period in UPM shares during a one-year savings period. Shares are purchased quarterly after the release of the UPM interim report. At the end of a savings period, first-time participants will receive 10 free shares (gross), provided that the participant has not stopped savings during the savings period and the participant's employment is still valid at the end of the savings period. After the holding period, participants will be granted one matching share for each two savings shares, provided that the savings shares have been retained throughout the holding period. For accounting purposes, the plan is treated as an equity - settled share - based payment and the costs of matching shares is recognized as an expense during a vesting period. A new three-year plan may be launched annually, with each plan subject to approval by UPM Board of Directors.

Accounting policies

Net retirement benefit asset in the balance sheet

—

Net retirement benefit liability in the balance sheet 1)

387

415

429

475

The Group’s long-term share incentive plans are recognized as equity settled or cash-settled share-based payment transactions depending on the settlement. The Group classifies the transactions with net settlement features for tax obligations as equity-settled in its entirety. Shares are valued using the market rate on the grant date. The settlement is a combination of shares and cash. The Group may obtain the necessary shares by using its treasury shares or may purchase shares from the market. Share deliveries are executed by using already existing shares and the plans, therefore, have no dilutive effect.

1) Net retirement benefit liability in the balance sheet includes other long-term employee benefits of €21 million (22 million) in 2025.

UK In the UK, the Group operates a legacy defined benefit scheme providing benefits that are linked to the salary level near retirement age or an earlier date of leaving service. The scheme is closed both for new members and future accrual for old members. Part of the scheme is a defined contribution plan and is open to all current employees. The UK pension scheme operates under a single trust which is independent from the Group. Germany In Germany, employees within defined benefit arrangements are entitled to annual pensions on retirement based on their service and final salary. All significant defined benefit plans are closed for new employees.

UPM's most significant defined benefit arrangements are in the UK and in Germany. The Group has defined benefit obligations also in Finland, the Netherlands, France, Canada and in the US. In 2025, the defined benefit plan in the Netherlands was terminated due to local regulatory changes and the defined benefit plan was converted into a defined contribution plan reducing both plan assets (€2 million in 2024) and obligations (€2 million) to €0 million. In 2024, one defined benefit plan in Finland was fully settled reducing both plan assets (€ 10.4 million in 2023) and obligations (€ 9.7 million in 2023) to €0 million. Finland In Finland, employers are obliged to insure their employees for statutory benefits, as determined in Employee’s Pension Act (TyEL). TyEL provides the employee with insurance protection for old age, disability and death. The Group's Finnish employees are mainly insured with an insurance company and these arrangements qualify as defined contributions plans.

UPM Financial Report 2025

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UPM Financial Report 2025

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UPM Annual Report 2025

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