UPM Annual Report 2025

We are UPM

Governance

Accounts and performance

UPM in brief

Our strategy

Our businesses

Sustainability

From the President and CEO

UPM demonstrated resilience and decisiveness in 2025. In an exceptionally turbulent environment, we maintained our focus on competitiveness and strategic choices. Determinedly toward the future

Maintaining our focus on sustainability We believe sustainability is not only essential, but also good business. Therefore, sustaina bility permeates our strategy and operations, Our business portfolio meets the growing demand for renewable materials and enables attractive returns and new grpwth avenues. We use natural resources responsibly, reduce our environmental footprint, and enhance our positive societal impact. We believe in science-based actions and continu ous development. Our longstanding commitment to sustaina bility is widely recognized. In 2025, these rec ognitions included the Platinum rating from EcoVadis, placing UPM among the top 1% of companies worldwide in sustainability. Creating shareholder value We have entered 2026 with cautious opti mism, with the business environment show ing signs of stability. Our focus will remain on performance, cash generation, strengthening the balance sheet and successfully completing strategic portfolio initiatives. With a major investment cycle behind us, we will maintain our disciplined capital allocation, focused growth investments and balance sheet strength while offering attrac tive distribution to shareholders. In 2025, we launched a share buy-back program and repurchased six million shares for a total of €160 million, corresponding to approximately 1.1% of the total number of shares. Demonstrating continued confidence in UPM’s strategy and ability to create value, the Board of Directors proposed an unchanged dividend of €1.50 per share for 2025. The dividend represents 113% of UPM’s comparable earnings per share for 2025. We have witnessed extraordinary circum stances, but also the power of resilience and the value of trust. I want to credit the entire UPM team for their commitment, and thank our customers, shareholders and other stake holders for their continued trust in us. We look forward to our shared journey ahead!

Focused growth with advanced materials

In 2025, we continued our strategic renewal despite the turbulent business environ ment caused by the escalating geopolitical and trade tensions. Toward the end of the year, the market environment started to stabilize. and our actions to strengthen our competitiveness yielded visible performance improvements in most of our businesses. We finished the challenging year on a positive note, with strong cash flow and improved performance. In challenging markets, our comparable EBIT decreased by 25% from the previous year to €921 million, representing 9.5% of sales. Our operating cash flow and financial position remained solid. Transformative portfolio choices We continued our strategic transformation with major portfolio decisions. During the first half of the year, we strengthened our position in adhesive materials with the acquisition of Metamark, sharpened our growth strategy in biofuels and discontinued developing the biorefinery in Rotterdam. In September, we started a strategic review of our plywood business, which has demonstrated robust performance and re silience over economic cycles. Through this review, we aim to determine the most bene ficial future alternatives for the business and UPM shareholders. In December, we announced our plans for the graphic paper business: a Joint Venture that would encompass the UPM Communi cation Papers business and Sappi's graphic paper operations in Europe. UPM has a strong heritage in graphic pa pers, and we are extremely proud of it. Over the years, we have transformed into a global leader with multiple businesses. The planned Joint Venture would start a new era in our

transformation while continuing to provide the best possible future for the graphic paper business and its customers. These portfolio initiatives would change the company’s profile, increase our growth focus, and improve margins and leverage. In the future, UPM would have an attractive portfolio of businesses in growing markets, with a record of consistently exceeding GDP growth. Growth potential in decarbonization solutions UPM Energy’s CO 2 -free power generation assets supply reliable base load with nuclear power and value-adding balancing power with hydropower. As the second-largest electricity producer in Finland, the business is well-positioned to meet the growing need for reliable, CO 2 -free electricity. Our next generation renewables pave the way for future growth: UPM Biofuels has a solid market position in the European advanced renewable fuels market. This makes the business well positioned to seek targeted growth through potential debottlenecking and possible entry into the sustainable aviation fuels market. In 2025, the business improved its performance, returning to EBIT profitability thanks to excellent production efficiency and improved market conditions. In UPM Biochemicals, we have made significant progress in this exciting new busi ness. We successfully ramped up the first core processes at the Leuna biorefinery, and we are now operating commercially. Cus tomer interest and the qualification pipeline continue to exceed the annual capacity. The business is expected to reach full production and positive EBIT during 2027.

Our advanced materials businesses offer technically demanding materials for grow ing end uses. These businesses require less capital than other UPM businesses and can pursue focused growth in the coming years. UPM Adhesive Materials grew faster than the market, and ongoing efficiency measures are improving performance and capturing growth. The business has strengthened its presence in the U.S. and Southeast Asia and gained a solid position in the attractive graphic solutions sector. UPM Specialty Materials has a strong glob al position in flexible packaging, labeling and industrial release liners, as well as fine pa pers in the Asia-Pacific region. With a strong customer focus and technical capabilities, the business is seeking growth in specialized applications and adjacent opportunities. Maximizing value creation with renewable fibres Thanks to our major investments in the highly competitive Fibres South platform, we now have world-class pulp assets, sustaina ble and productive plantations, and efficient logistics infrastructure. In 2025, Fibres South performed strongly despite unfavorable market conditions. Fibres North complements our pulp of fering with high-quality softwood pulp, with well-managed assets and flexible operating mode that enables competitiveness. Our strategic partnership with Versowood, the largest private sawn timber producer in Fin land, strengthens our position in tight wood markets.

Massimo Reynaudo President and CEO

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UPM Annual Report 2025

UPM Annual Report 2025