UPM Annual Report 2025

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value changes are reported in other operating income in the income statement.

level 3. This category include UPM’s energy shareholdings and forest assets. Fair valuations are performed at least quarterly by respective business areas or functions. Fair valuations are reviewed by the Group finance management and overseen by the Audit Committee. Refer to » Note 4.3 Financial assets at FVOCI and » Note 4.2 Forest assets .

5.5 Share capital and reserves The company has one series of shares and each share carries one vote. There are no specific terms related to the shares. In 2025, UPM carried out a share buy-back program and repurchased a total of 6,000,000 of its own shares, which were subsequently cancelled. At December 31, 2025, the number of the company’s shares was 527,735,699. The shares do not have any nominal counter value. The shares are included within the book entry system for securities.

Hedging reserve This reserve comprises the cumulative net change in the fair value of the effective portion of cash flow hedging instruments related to hedged transactions that have not yet occurred and the cost of hedging when recognized in OCI. Amounts are recognized in profit or loss when the associated hedged transactions affect profit or loss or as part of the acquisition cost of property, plant and equipment. Share-based payments reserve The share-based payments reserve is used to recognize the fair value at the grant date of the share incentive plans, Performance Share Plan, Restricted Share Plan and Deferred Bonus Plan, over their vesting period. Reserve for invested non-restricted equity Reserve for invested non-restricted equity includes, under the Companies’ Act, the exercise value of shareholders’ investments in the company unless otherwise decided by the company. Translation reserve This reserve includes the foreign currency differences arising from the translation of foreign operations, and the effective result of transactions that hedge the Group’s net investments in foreign operations. There were no reclassifications from the translation reserve to profit or loss during the period resulting from inefficiency of net investment hedges. Transaction costs directly relating to the issue of new shares or share options are recognized, net of tax, in equity as a reduction in the proceeds. Where any Group company purchases the parent company’s shares (treasury shares), the consideration paid, including any directly attributable incremental costs (net of tax), is deducted from equity attributable to the owners of the parent company until the shares are cancelled or reissued. Where such shares are subsequently reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the owners of the parent company. Accounting policies

Fair values under level 3 Financial assets or liabilities of which fair values are not based on observable market data (that is, unobservable inputs) are classified under

5.4

Financial income and expenses

€ million

2025

2024

Share capital € million

Exchange rate gains and losses Derivatives

2025

2024

12

-31 -11 37

Exchange gains and losses on financial liabilities measured at amortized costs Exchange gains and losses on financial assets measured at amortized costs

48

Number of shares (1,000)

527,736

533,736

-57

Share capital, € million

890

890

Other exchange rate gains and losses 1)

41

0

44

-6

Treasury shares At December 31, 2025, the company held 411,653 (411,653) of its own shares, 0.08% (0.08%) of the total number of shares.

Fair value changes Fair value gains and losses on derivatives designated as fair value hedges

-20

16

Fair value adjustment of debt attributable to interest rate risk

18

-17

-1

-1

Reserves € million

Total

43

-7

2025

2024

Interest and other finance income and costs, net Interest expense on lease liabilities

Fair value reserve

1,574

1,661

-26 -57

-24 -47 -40

Hedging reserve

28

-10

Interest expense on other financial liabilities measured at amortized cost

Interest income (expense) on derivatives

-21

Share-based payments reserve

19

26

Interest income on loans, receivables and cash Dividend income from financial assets at FVOCI Impairment charges of associates and joint ventures

19

31

Total other reserves

1,622

1,678

5 —

2

Reserve for invested non-restricted equity

1,273

1,273

-2

Translation reserve

15

657

Other financial income and expenses, net

-23

-17

Total reserves

2,909

3,608

-102

-97

Total

-59

-104

Fair value reserve This reserve represents the cumulative net change in the fair value of investments in equity securities comprising mainly of the fair value change of the energy shareholdings. Amounts are recycled only within equity upon the disposal of the asset.

1) Other exchange rate gains and losses include €41 million exchange rate gains relating to capital repatriation from subsidiaries in 2025.

Net gains and losses on derivatives included in the operating profit

€ million

2025

2024

Cash flow hedges reclassified from hedging reserve

85

-7

Non-qualifying hedges

18

-25 -33

Total

102

Foreign exchange gains and losses in the operating profit excluding non-qualifying hedges

€ million

2025

2024

Sales

34

-5 -9

Other operating income

-37

Total

-4

-14

UPM Financial Report 2025

310

UPM Financial Report 2025

311

310

311

UPM Annual Report 2025

UPM Annual Report 2025