UPM Annual Report 2025

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5.

Capital structure

Repayments of debt and maturities of unused committed credit lines at the end of 2025

1,500

UPM has a strong cash flow and industry-leading balance sheet that mitigates risks and enables value-enhancing strategic actions.

Leases Loans Unused committed credit lines

1,000

Net debt

Free cash flow

3,004 m

977 m

500

€

€

€ million

(€ 2,869m)

(€ 766m)

0

2026

2027

2028

2029 2030 2031+

Liquidity and refinancing risk

5.1 Capital management UPM’s objective for managing capital comprising of net debt and total equity is to ensure maintenance of flexible capital structure to enable the ability to operate in capital markets and maintain optimal returns to shareholders. The Group manages its financing activities, debt portfolio and financial resources via various policies that are designed to ensure optimum financing arrangements minimizing simultaneously financial expenses and refinancing risk and optimizing liquidity. Borrowing activities are centralized to the parent to the extent possible and cash resources are distributed within the Group by the central treasury department. UPM targets a net debt to EBITDA ratio of approximately 2 times or less.

Maturity table of debt at the end of 2025

Under all circumstances, UPM seeks to maintain adequate liquidity, which depends on a number of factors, such as the availability of cash flows from operations and access to additional debt and equity financing. UPM aims to ensure sufficient liquidity by means of efficient cash management and restricting financial investments to investment types that can readily be converted into cash and by keeping a sufficient amount of unused committed credit lines or cash as a reserve. UPM aims to minimize refinancing risks by ensuring a balanced loan portfolio maturing schedule and sufficiently long maturities. The average loan maturity at December 31, 2025 was 5.5 years (5.5 years).

€ million

2026

2027

2028

2029

2030

2031+

Total

Bonds

—

319

750

500

—

1,100

2,669

Loans from financial institutions

31

31

31

31

31

—

154

Lease liabilities

90

72

59

50

55

446

772

Other loans

—

—

—

114

—

—

115

Current loans

33

—

—

—

—

—

33

Principal payments

154

423

840

695

86

1,546

3,743

Interest payments

94

88

60

52

33

194

520

Liquidity and refinancing

The difference between the above nominal values and carrying value of total debt arise from fair value adjustments decreasing carrying value by €44 million and other non-cash adjustments decreasing carrying value by €19 million.

UPM’s capital

€ million

2025

2024

€ million

2025

2024

Cash at bank

715

849

Maturity table of debt at the end of 2024

Equity attributable to owners of the parent company

10,001

11,139

Cash equivalents

—

42

Non-controlling interest

333

401

1

Investment funds

1

€ million

2025

2026

2027

2028

2029

2030+

Total

Total equity

10,335

11,540

2,310

Committed credit lines

2,009

Bonds

—

—

361

750

500

1,100

2,711

Non-current debt

3,638

3,747

0

of which used

—

Loans from financial institutions

34

31

31

31

31

31

188

Current debt

156

166

—

Loan commitments

—

Lease liabilities

115

81

69

63

55

451

832

Total debt

3,794

3,913

-1

Used uncommitted credit lines

-33

Other loans

2

—

—

—

129

—

131

Total capitalization

14,129

15,452

-151

Long-term loan repayment cash flow

-121

Current loans

1

—

—

—

—

—

1

Total debt

3,794

3,913

3,050

Liquidity

2,570

Principal payments

152

112

461

844

714

1,581

3,863

Less: Interest-bearing financial assets and investment funds

790

1,044

Interest payments

102

93

91

63

56

215

620

Cash and cash equivalents comprise cash in hand, deposits held at banks and with original maturities of three months or less. Investment funds comprise fund investments with a redemption period of less than 12 months. Commercial papers and utilized bank overdrafts are included in used uncommitted credit lines and presented within current debt in the balance sheet. In 2025 or 2024, no material impairment and no expected credit losses were recognized in profit or loss for loan receivables or cash and cash equivalents.

Net debt

3,004

2,869

The difference between the above nominal values and carrying value of total debt arise from fair value adjustments decreasing carrying value by €26 million and other non-cash adjustments decreasing carrying value by €23 million.

Gearing ratio, % 1)

29

25

Net debt to EBITDA 1)

2.29

1.66

1) Refer to » Other financial information on Alternative performance measures.

UPM Financial Report 2025

298

UPM Financial Report 2025

299

298

299

UPM Annual Report 2025

UPM Annual Report 2025