UPM Annual Report 2025

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Governance

Accounts and performance

Financial Statements

Report of the Board of Directors

Sustainability Statement

Auditor's Report

Sustainability Assurance Reports

Cash flow statement

Notes to the parent company financial statements

€ million

2025

2024

Cash flows from operating activities Profit before closing entries and tax Financial income and expenses Adjustments to operating profit 1)

Accounting policies

Revaluations The balance sheet value of land includes revaluations. No new revaluations are made and the balance sheet value of land is considered to be below their fair value. Leases Lease payments of lease contracts are recognized in other operating expenses over the lease term. Lease payments due in future years under lease contracts are presented as off-balance sheet items. Provisions Provisions include foreseeable future expenses and losses to which the company is committed, the realization of which is probable and the amount can be reliably estimated, e.g. pension and environmental liabilities and termination and restructuring costs. Changes in provisions are recognized in income statement within particular cost items. Sales Sales include sales revenue from actual operations less indirect taxes, discounts, claims and exchange rate differences on trade receivables. Research and development costs Research and development costs are expensed in the year in which they are incurred. Pensions In Finland, employers are obliged to insure their employees for statutory benefits, as determined in Employee’s Pension Act (TyEL). The mandatory pensions are arranged through pension insurance companies. Contributions to pension insurance companies are charged to the income statement in the period to which the contributions relate. Share-based payments Share based compensation is recognized as an expense in the income statement over the earnings period or in the year of award and the related liability is booked to the balance sheet. Closing entries Parent company closing entries consists of the change in the depreciation difference and group contributions granted to Group companies. The accumulated depreciation difference in the parent company has not been divided into equity and deferred tax liability. Income taxes Income taxes presented in the income statement consist of accrued taxes for the financial year and tax adjustments for prior years. The parent company has not recognized deferred tax assets and liabilities in the balance sheet, but presents the information in the notes.

942

323

-1,024

-228

2

279 291 172

The financial statements of the parent company are prepared in accordance with Finnish Accounting Standards, FAS. The main differences in accounting policies of the Group and the parent company relate to the measurement of financial derivatives and forest assets and recognition of defined benefit obligations, share-based payments, lease agreements and deferred income taxes. The financial statements are presented in millions of euros and rounded and therefore the sum of individual figures might deviate from the presented total figure. Foreign currency translation Receivables and liabilities denominated in foreign currencies outstanding on the balance sheet date and other commitments are translated into euro currency using the balance sheet date exchange rate. Exchange rate differences arising from the valuation of trade receivables are recognized in sales and exchange rate differences on trade payables in purchases. Exchange differences arising from the measurement of other receivables and liabilities are recognized in financial items. Tangible and intangible assets Tangible and intangible assets are stated at cost less accumulated depreciation and amortization according to plan and impairments. Emission rights are recognized using net approach. Depreciation and amortization according to plan is recorded on a straight-line basis over the expected useful lives of the assets as follows:

Change in working capital 2)

-116 123 -211

Interest received

Interest paid

-250 479 -128

Dividends received Other financial items Income taxes paid Operating cash flow

1,053

88 -21

-7

836

931

Cash flows from investing activities Investments in tangible and intangible assets

-146

-70 -611

Investments in shares and holdings

-33

Proceeds from sale of intangible and tangible assets Proceeds from disposal of shares and holdings

69

13

357 103 350

4

Change in other non-current receivables

33

Investing cash flow

-632

Cash flows from financing activities Proceeds from non-current liabilities Payments of non-current liabilities

127 -96

650 -29

Change in current liabilities Purchase of own shares

-610 -160 -792

60

0

Dividends paid

-800

Group contributions, net

210

50

Other items

0

-1

Financing cash flow

-1,321

-70

Land and water areas, no depreciation Intangible assets

5–10 years

Cash and cash equivalents at beginning of period Change in cash and cash equivalents Cash and cash equivalents at end of period

729 -135 594

500 230 729

Buildings

20–50 years 5–10 years 15–20 years 20–30 years 5–20 years

Light machinery and equipment

Heavy machinery

Power plants

Notes to cash flow statement 1) Adjustments to operating profit € million

Other tangible assets

2025

2024

Forest assets are recognized as tangible assets within land and water areas at historical cost and revaluation. No systematic depreciation or changes in value due to felling is recognized.

Depreciation, amortization and impairment charges Capital gains and losses on sale of non-current assets

90

102 216 -39 279

21

Change in provisions

-108

Total

2

Investments Investments are stated at cost less impairments.

2) Change in working capital

€ million Inventories

2025

2024

Inventories Inventories are stated at the lower of cost or the probable selling price. Costs are measured using FIFO-method. In addition to variable costs, the cost of inventories includes a portion of the fixed costs of acquisition and manufacturing.

0

-19 314

Current receivables

-94 -22 -116

Current non-interest-bearing liabilities

-4

Total

291

UPM Financial Report 2025

332

UPM Financial Report 2025

333

332

333

UPM Annual Report 2025

UPM Annual Report 2025