UPM Annual Report 2025

We are UPM

Governance

Accounts and performance

Our businesses

UPM in brief

Our strategy

Sustainability

UPM Adhesive Materials drives profitable growth with a value-adding offering, reliable service and optimized operations. Focused actions to improve productivity and cost efficiency fuel the business area’s transformation. UPM Adhesive Materials

UPM Specialty Papers is a global leader in label papers and a growing supplier of flexible packaging papers. Our business is driven by global megatrends. We are well postioned for growth. UPM Specialty Papers

Key figures 2025

Key figures 2025

acquisition of Metamark, which brought us closer to becoming a significant global player in the high-value graphics solutions segment. We consolidated and renewed our operat ing platform in Europe to increase scale and improve profitability. We closed the Kalten kirchen factory in Germany and transferred production to our other European sites. We decided to convert the Nancy factory in France into a slitting and distribution termi nal and discontinue label material coating. Additionally, we increased our competitive ness by reducing fixed and variable costs and improving material efficiency. To grow profitably in high-growth regions and product segments, we invested in: • a new coating line at the Mills River factory in North Carolina, U.S., to increase the production capacity of special label materials; • a state-of-the-art new coating line, as well as other facility and material handling upgrades, at the Johor Bahru factory in Malaysia; • a new slitting and distribution terminal near Hanoi, Vietnam. Sustainability is key to creating customer value. We provide high-performance sustain ability solutions for recycling and reducing CO 2 emissions. In 2025, we announced the industry-first integration of label product footprint data into quotes, helping convert ers make informed choices and reduce Scope 3 emissions at source. Despite the high level of competition and economic slowdown, we are optimistic about the future. We have made significant progress on our transformation journey, and we expect to see the results going forward. We are also exploring expansion opportuni ties in India.

we achieved an all-time high score in our customer satisfaction survey. We have a strong foothold in Europe and the growing Asia-Pacific markets, and we continue to strengthen our presence in the Americas. We are a global leader in the label paper market and aim to continue growing. In the APAC fine paper market, we focus on the most profitable market seg ments where sustainability adds value. We have significant growth opportu nities in flexible packaging, where our expertise in producing demanding pack aging papers, as well as our strong R&D capabilities, have established us as a viable partner for creating recyclable, fibre-based packaging solutions. This is a market with high entry barriers and long entry times. There are significant growth opportunities and promising ongoing projects with our customers. In 2025, we introduced several innovative co-created solutions with part ners and brands. Although long-term megatrends such as e-commerce, sustainability and urbani zation continue to drive demand for labels

and packaging, the markets were challeng ing in 2025 due to uncertainty surrounding U.S. tariffs and weak consumer confidence. This resulted in muted demand. Many of the markets served by UPM Specialty Papers experienced overcapacity, putting pressure on operating rates and sales prices. However, through diligent margin management and cost savings, we were able to maintain profitability and capitalize on opportunities in unbalanced markets. In 2025, we announced an investment in the UPM Tervasaari PM5 project, which will improve production efficiency, safety and our ability to serve customers in demanding specialty grades. As the shift to renewable and recycla ble packaging continues, we can help our customers comply with the Packaging and Packaging Waste Regulation and the Euro pean Union Deforestation Regulation.

Sales

Comparable EBIT

Sales

Comparable EBIT

€m

€m

€m

€m

1,655

124

1,315

147

+6%

-7%

-10%

+9%

Personnel

Comparable ROCE

Personnel

Comparable ROCE

on Dec. 31 3,287

%

on Dec. 31 1,820

%

14.4

20.9

-4.0pp

+3.8pp

As one of UPM’s global growth engines and value creation platforms, UPM Adhesive Materials (formerly UPM Raflatac), seeks profitable growth by providing value-adding sustainable solutions and reliable services for enhanced customer experience. In addition, we are taking focused actions to improve productivity and cost efficiency and to optimize our operating platform to boost

performance and fuel growth in emerging markets and high-value product segments. In June 2025, we renamed our business area to UPM Adhesive Materials, support ing our strategic direction to expand into graphics solutions and specialty tapes. UPM Raflatac remains a leading global brand for label materials. One example of accelerat ing growth beyond label materials was the

UPM Specialty Papers has a long history of serving customers in the label and APAC fine paper markets. Thanks to our global reach, we can meet the needs of global customers while providing local services and expertise. Our customers recognize us for our reliabili ty, consistent quality and responsive, profes sional team. We actively collect feedback to strengthen customer relationships. In 2025,

More key figures on page 125 upmspecialtymaterials.com

In focus

In focus

Recyclable wrapper for everyday treats

Driving segment and market growth

Thanks to a collaboration with UPM Specialty Papers and EvoPak, Walkers Chocolates has replaced plastic wrappers with recyclable paper packaging. The new packaging helps Walkers Chocolates’ achieve its sustainable packaging ambition while reducing plastic usage across their site. The new wrapper combines UPM’s barrier base paper with EvoPak’s special coating, making it suitable for chocolate and other demanding end uses. It keeps the choco late fresh and meets the demanding standards for quality. The packaging is designed for recycling in existing fibre recycling systems and supports a circular economy. Products from Walkers Chocolates that are packaged using this solution are already available at multiple UK retailers and in international markets.

We are constantly renewing our operating platform to drive growth in the high-growth regions and product segments. In 2025, we expanded our special label production and ca pabilities in North America by investing in a new coating line at our Mills River factory. Our special label materials are designed for demanding applications beyond standard consum er labeling, such as pharmaceutical uses. Investments in Malaysia and Vietnam will accelerate our growth in the rapidly growing Southeast Asian market, which is currently one of the fastest-developing markets for pres sure-sensitive labels. We are also exploring growth opportunities in India, where consumer demand for packaged goods is increasing.

More key figures on page 125 upmadhesivematerials.com

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UPM Annual Report 2025

UPM Annual Report 2025