UPM Annual Report 2025

We are UPM

Governance

Accounts and performance

Our businesses

UPM in brief

Our strategy

Sustainability

UPM Plywood is committed to providing high-quality products and exceptional customer service. We focus on optimizing our operational capabilities and exploring new growth opportunities. UPM Plywood

UPM Communication Papers is known for its diverse product portfolio, high quality, global reach and commitment to sustainability. We provide customer-focused solutions and proactively adapt to evolving markets. UPM Communication Papers

Key figures 2025

Key figures 2025

of it due to strikes at our Finnish mills in the spring. However, our operating rates surpassed those of 2024 in the second half of the year. All key end uses will continue to grow in the medium term. To expand our portfolio, we are exploring new regions, product categories and wood species to complement spruce and birch. With our WISA ® -Birch plywood, we are a leading supplier of LNG cargo containment systems, accounting for more than half of the current fleet. We fur ther strengthened our position by launching a new product this year, WISA ® -LNG Spruce plywood. We developed and tested this innovation extensively in collaboration with Gaztransport & Technigaz, a global leader in the transport and storage of liquified gases. In September, UPM initiated a strategic review of the plywood business to identify ways to maximize its long-term potential (page 27). The review includes a range of possibilities, including a separation from UPM through divestment, partial demerg er or an initial public offering. Our solid profitability provides a strong foundation

for operating as a standalone business if it is determined that this is the best path forward and in the shareholders’ best interests. In 2025, we continued to develop our mill operations by using data and AI to opti mize and improve production. We are also assessing the broader use of new digital tools across our processes, from production to the customer interface. Digital tools will further improve quality and productivity. With one of the industry’s largest R&D organizations, we have a key competitive advantage in meeting customers’ growing sustainability expectations. Our patented WISA BioBond gluing technology replaces half the phenol derived from fossil mate rials with lignin derived from wood. WISA plywood products store more than five times the amount of biogenic CO 2 during their life cycle than fossil CO 2 is generated during the production and supply chain.

In 2025, we launched a new rail logistics concept that combines reliability, efficiency and sustainability. In partnership with Rail Cargo Group, the concept optimizes flows to and from our mills in southern Germany by using block trains instead of single wagons. The result is faster transit, improved predict ability and greater resilience in our supply chain. In North America, we renewed our contract with the primary carrier and estab lished new port contracts, strengthening our long-term presence on the continent. These actions demonstrate our commit ment to helping customers reduce their emissions and meet consumers' growing demand for sustainable products. The sale of surplus CO 2 certificates has been an important source of revenue. Thanks to our dedicated sustainability efforts, focus on high-value segments and strong market presence, we are well positioned to create value in challenging paper markets for years to come.

Sales

Comparable EBIT

Sales

Comparable EBIT

€m

€m

€m

€m

409

35

2,493

181

-5%

-15%

-16%

-34%

Personnel

Comparable ROCE

Personnel

Comparable ROCE

on Dec. 31 1,542

%

on Dec. 31 4,728

%

15.4

17.8

-1.8pp

-5.9pp

Our loyal long-term customers include mar ket-leading distributors and industrial users who value high-quality products, reliable plywood and veneer supplies, and profes sional customer service. UPM Plywood is the largest plywood pro ducer in Europe. Although market conditions improved slightly compared to the previous year, we were unable to take full advantage

UPM Communication Papers is one of the world’s leading producers of graphic papers. Our global presence, diverse product offer ings and ability to deliver large volumes foster long-term customer relationships. Our competitive edge stems from this strong foundation. Proactive asset management and the flexible use of our global network of mills ensure our competitiveness in a dynamic market. In 2025, we ceased production in Et tringen, Germany, and in Kaukas, Finland, to align capacity with profitable demand. Other productivity measures were implemented throughout the organization. We saw unprecedented uncertainty in 2025, with tariff disputes disrupting global trade. European markets declined signifi cantly. Our higher expectations for North American markets were not met due to tariffs and unfavorable currency rates. Our focused strategy drives value creation across paper categories and key markets, prioritizing areas with attractive margins and growth potential. Our com mitment to paper and our wide range of products are key strengths. Our reputation as the most reliable partner is solidified by

our consistently high customer satisfaction rates. In December, UPM and Sappi signed a non-binding letter of intent on a Joint Ven ture for graphic papers (page 27). Our new Climate Action Roadmap under scores the importance of sustainability. This roadmap sets out actions to reduce emissions further (below).

More key figures on page 126 wisaplywood.com

More key figures on page 126 upmpaper.com

In focus

In focus

Expanding solutions with spruce LNG plywood

New climate target on the decarbonization journey

We introduced spruce plywood to meet the growing global demand for materials used in LNG carriers. The new product complements our existing WISA ® -LNG birch plywood portfolio and enables the use of lighter spruce without compromising the stringent requirements for insulation in LNG cargo tanks. WISA ® -LNG-Spruce plywood, developed and tested in collaboration with GTT, a global leader in LNG transport and storage technology, offers excellent insulation properties, durability, dimensional stability, and lightweight construction, all of which are critical for maintaining ultra-cold temperatures during transport. The product incorporates WISA ® BioBond technology, replacing at least 50% of the adhesives fossil-based phenol with lignin, reducing the product’s carbon footprint.

A key element of the climate action roadmap is the clearly defined climate target. By 2030, the average fossil CO₂ emissions from operations and externally sourced energy at European sites will be reduced to ≤100 kg per tonne of paper, more than a 70% reduction compared to the 2023 baseline year. We accelerate our shift to renewable energy with long-term wind power purchase agree ments and power-to-heat solutions. Each mill has a tailored activity plan contributing to the overall target. We are also producing electricity using steam generators and biogenic wood or bark residues.

Photo: GTT – Roland Mouron

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UPM Annual Report 2025

UPM Annual Report 2025