UPM Annual Report 2025

We are UPM

Governance

Accounts and performance

Our businesses

UPM in brief

Our strategy

Sustainability

UPM Fibres is a leading global multifibre pulp producer, providing high-quality hardwood and softwood pulp. Our strong competitive edge comes from sustainable forestry operations, efficient sawmills, state-of-the-art pulp mills, logistics and customer-centricity. UPM Fibres

Forests and plantations drive sustainable growth

At the end of 2025, we owned 917,000 hectares of forest land in Finland, Uruguay and the U.S. Most of this land is in Finland, totaling around 522,000 hectares. In Uruguay, we own about 319,000 hectares of eucalyptus plantations, grasslands and conservation areas. In the U.S., we have 76,000 hectares of forest. We also lease about 177,000 hectares in Uruguay and manage nearly 1.7 million hectares of private forests in Finland. Three of our four modern tree nurseries are in Uruguay, and one is in Finland. Our commercial forests and tree planta tions are a strategic choice for us. In 2025, the value of our forests and plantations, including land, exceeded €3.5 billion. We source wood as a raw material for our sustainable and recyclable products from 12 countries. Approximately 30% of our annual global wood demand comes from wood harvested from our own and leased forests and plantations. This amounts to 7.8 million cubic meters of our total consumption of 27.7 million cubic meters. We buy wood from approximately 13,000 private forest owners in Finland. We source wood in Central Europe for paper mills and the new Leuna Biorefinery. Paper mills mainly use spruce as a raw material. The main raw material for the biorefinery is beech from private forest owners. Our business is based on the use of for est biomass. We adhere to the same strict sustainability standards wherever we oper ate. Good forest management allows us to increase the use of forests while strength ening carbon stocks and biodiversity.

Key figures 2025

to produce hardwood pulp. The northern platform uses conifers to produce softwood pulp and birch to produce hardwood pulp. The northern platform also has sawn timber operations, which are an integral part of our value chain. Fibres South consists of two large cut ting-edge pulp mills, eucalyptus plantations, seedling nurseries and efficient logistics in Uruguay. In 2025, the UPM Paso de los Toros mill, our historic milestone investment, had its first full year of production at nominal ca pacity. Another major step forward occurred when the railway from Paso de los Toros to the port of Montevideo became fully opera tional, reducing costs and emissions. Production and cost optimization at the UPM Paso de los Toros mill have progressed according to plan. We will achieve further improvements in competitiveness by elim

inating bottlenecks and optimizing wood sourcing as the latest plantations reach harvesting age. Fibres North comprises three pulp mills, three sawmills, and wood sourcing and forestry operations in Finland. In 2025, we focused on ensuring profitability in chal lenging pulp markets with high wood prices. Thanks to carefully targeted investments, our northern mills are well maintained and efficient. Our flexible operating model and cost-efficiency measures helped us success fully manage margins. A strategic highlight was the establishment of a long-term partnership with Versow ood, Finland’s largest private producer and processor of sawn timber (on the left). This partnership strengthens the cost-effectiveness of wood supply to our pulp mills in tight Nor dic markets. Following the agreement, UPM remains one of Finland's largest sawn timber producers. UPM Fibres has direct pulp and timber sales in all key markets, supported by dedi cated customer service teams, regional R&D centers and technical support. In 2025, we sharpened our commercial strategy and took further measures to increase customer-cen tricity in our pulp business. According to a detailed third-party cus tomer survey conducted in November with customers representing 64% of UPM Pulp sales, UPM Pulp maintains exceptional levels of customer trust, relationship quality and regulatory credibility. Customers recognize UPM as a sustainably minded, quality-driv en premium supplier with strengths firmly anchored in people, expertise, and operational reliability. 98% of these customers have a posi tive or very positive impression of UPM Pulp. In an increasingly competitive mar ket, UPM Pulp continues to strengthen its position as a leading global pulp supplier by enhancing how we engage with customers, notably through implementing a key account

Sales

Comparable EBIT

€m

€m

3,407

283

-9%

-47%

Personnel

Comparable ROCE

on Dec. 31 2,653

%

-3.3pp 4.2

Our strategy is based on two sustainable pulp production platforms. The southern platform uses plantation-grown eucalyptus

In focus

management process, creating an impact ful and targeted marketing strategy and designing a market-leading digital customer journey. An important milestone during the year was UPM Pulp becoming the second largest eucalyptus pulp supplier in North America, a highly competitive market with significant growth potential. Medium- to long-term growth in pulp demand is notably driven by the megatrends of urbanization and a growing middle class, which are expected to increase global tissue paper consumption. Another growth driver is replacing plastics with fibre-based solu tions for packaging. As global demand for wood-based products increases, we can create additional value by selling surplus bio-based energy and side streams from the pulping process, such as lignin and crude tall oil, which the

emerging wood-based industries use as raw materials. Being a leader in sustainability gives UPM Fibres a competitive advantage and helps our customers reach their ambitious sustainability targets. We continue to be a frontrunner in preparing for the EU De forestation Regulation, enhancing tracea bility capabilities to ensure our customers will be ready to comply with the legislation when it takes effect. Also, in 2025, we calculated the carbon footprints of each of our five pulp mills and seven products, providing our customers with transparent and relevant information about carbon emissions.

UPM and Versowood enter into a long-term partnership

UPM and Versowood, Finland's largest private producer and processor of sawn timber, have agreed to a long-term partnership that will strengthen UPM’s cost-effective wood sourcing in Finland. Under the agreement, Versowood supplies UPM with high-quality pulpwood and sawmill by-products, which allows UPM to strengthen its wood supply for its pulp mills in the tight Finn ish market. In turn, UPM supplies Versowood's sawmills with logs acquired through UPM’s own wood sourcing operations. The wood market in Finland remains tight due to halted imports from Russia, an increased use of wood for energy production, and increased demand driven by investments in wood-using industry. These factors are expected to keep raw material costs elevated. As part of the agreement, UPM sold its Korkeakoski sawmill in Juupajoki, Finland to Versow ood and received a minority shareholding in Versowood in return. The Korkeakoski sawmill produces 350,000 cubic meters of high-quality pine sawn timber annually for the domestic market and export. As of the beginning of 2026, UPM will operate three sawmills in Lappeenranta, Pori, and Pietarsaari, remaining one of Finland's biggest sawn timber producers.

Sustainable forestry on page 50

More key figures on page 124 upmpulp.com upmtimber.com

40

41

UPM Annual Report 2025

UPM Annual Report 2025