UPM Annual Report 2025

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Governance

Accounts and performance

Sustainability Assurance Reports

Report of the Board of Directors

Sustainability Statement

Financial Statements

Auditor's Report

Other financial information Alternative performance measures

UPM presents certain performance measures of historical performance, financial position and cash flows, which in accordance with the “Alternative Performance Measures” guidance issued by the European Securities and Markets Authority (ESMA) are not accounting measures defined or specified in IFRS Accounting Standards and are therefore considered as alternative performance measures. These alternative performance measures are described below:

• the group sustainability statement and for its preparation and presentation in accordance with the provisions of Chapter 7 of the Accounting Act, including the process that has been defined in the sustainability reporting standards and in which the information for reporting in accordance with the sustainability reporting standards has been identified • such internal control as the Board of Directors and the Managing Director determine is necessary to enable the preparation of a group sustainability statement that is free from material misstatement, whether due to fraud or error. Inherent Limitations in the Preparation of a Sustainability Statement Sustainability reporting is characterized by the fact that reporting of this type of information involves estimates and assumptions, as well as measurement and assessment uncertainty. The determination of greenhouse gases is subject to inherent uncertainty due to the incomplete scientific data used to determine the emission factors and the numerical values needed to combine emissions of different gases. Responsibilities of the Authorized Group Sustainability Auditor Our responsibility is to express an opinion on the presentation of the GHG emissions based on the evidence we have obtained. We conducted our engagement in accordance with the International Standard for Assurance Engagements (ISAE) 3000 (Revised) Other Than Audits or Reviews of Historical Financial Information. Those standards require that we plan and perform our engagement to obtain reasonable assurance about whether, in all material respects, the GHG emissions are presented in accordance with the Criteria, and to issue a report. The nature, timing, and extent of the procedures selected depend on our judgment, including an assessment of the risk of material misstatement, whether due to fraud or error. Description of the Procedures That Have Been Performed As part of our assurance procedures we, for example: • Conducted interviews with relevant personnel to understand the business and reporting process, including the sustainability strategy, principles and management • Conducted interviews with key personnel to understand the sustainability reporting system during the reporting period, including the process for collecting, collating and reporting the GHG emissions • Checked that the calculation criteria have been correctly applied in accordance with the methodologies outlined in the Criteria • Undertook analytical review procedures to support the reasonableness of the data • Identified and testing assumptions supporting calculations • Tested, on a sample basis, underlying source information to check the accuracy of the data • Inspected relevant documentation of the systems and processes for compiling, analysing, and aggregating data in the reporting period and testing such documentation on a sample basis • Performed physical and online site visits to performed inquiries and inspect documents on a sample basis. • Read and reviewed selected material qualitative statements in applicable sections of the report for plausibility and consistency

Alternative performance measure

Definition

Operating profit

Profit before income tax expense, finance expenses and finance income and net gains on sale of energy shareholdings as presented on the face of the IFRS income statement. Gains on sale of energy shareholdings are not recorded to the income statement from 2018 onwards.

Comparable EBIT

Operating profit adjusted for items affecting comparability.

Comparable EBITDA

Operating profit before depreciation, amortization and impairments, change in fair value of forest assets and wood harvested, share of results of associates and joint ventures and items affecting comparability.

Comparable profit before tax

Profit before income tax expense excluding items affecting comparability.

Comparable profit for the period

Profit for the period excluding items affecting comparability and their tax impact.

Comparable EPS, €

Earnings per share calculated in accordance with IFRS excluding items affecting comparability and their tax impact.

Net debt

Total of current and non-current debt less cash and cash equivalents and interest-bearing current and non-current financial assets. Certain non-operational or non-cash valuation transactions with significant income statement impact are considered as items affecting comparability, if they arise from asset impairments, restructuring measures, asset sales, fair value changes of forest assets resulting from changes in valuation parameters or estimates or changes in legislation or legal proceedings. In addition, the changes in fair value of unrealized cash flow and commodity hedges and business acquisition costs are classified as items affecting comparability. Numerical threshold for items to be considered as significant is €1 million pre-tax in all business areas.

Items affecting comparability

Free cash flow

Cash generated from operations after cash used for investing activities.

Return on equity (ROE), %

Profit for the period as a percentage of average equity.

Comparable ROE, %

Return on equity (ROE) excluding items affecting comparability.

Return on capital employed (ROCE), %

Profit before taxes, interest expenses and other financial expenses as a percentage of average capital employed.

Comparable ROCE, %

Return on capital employed (ROCE) excluding items affecting comparability.

Capital employed

Group total equity and total debt.

Business area’s comparable ROCE, %

Business area’s operating profit adjusted for items affecting comparability as a percentage of business area’s average capital employed. Business area’s operating assets less its operating liabilities. Operating assets include goodwill, other intangible assets, property, plant and equipment, forest assets, energy shareholdings, investments in associates and joint-ventures, inventories and trade receivables. Operating liabilities include trade payables and advances received. Capitalized investments in property, plant and equipment, intangible assets including goodwill arising from business combinations, energy shareholdings and other shares, associates and joint ventures.

Business area’s capital employed

Capital expenditure

Capital expenditure excluding acquisitions and shares

Capital expenditure excluding investments in shares and participations.

Operating cash flow per share, €

Operating cash flow divided by adjusted average number of shares during the period excluding treasury shares.

Helsinki 12.2.2026

Gearing ratio, %

Net debt as a percentage of total equity

Ernst & Young Oy Authorized Sustainability Audit Firm

Net debt to EBITDA

Net debt divided by comparable EBITDA

Equity to assets ratio, %

Equity expressed as a percentage of total assets less advances received.

Heikki Ilkka Authorized Sustainability Auditor

UPM Financial Report 2025

354

UPM Financial Report 2025

355

354

355

UPM Annual Report 2025

UPM Annual Report 2025