Slides
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UPM Financial statements release 2025 CEO Massimo Reynaudo February 4, 2026
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2025: geopolitical and trade tensions • Tariffs, currency changes, lower consumer confidence and sales prices • We intensified actions to sharpen competitiveness and execute our portfolio strategy • Comparable EBIT €921 million, 9.5% of sales (€1,224 million, 11.8%) • Solid operating cash flow at €1,405 million (€1,352 million) Q4 2025: stabilizing market environment • Improving performance in most businesses from the previous quarter • Comparable EBIT €355 million, 15.3% of sales (€418 million, 15.9%) • Strong operating cash flow at €720 million (€570 million) • Second quarter of decreasing net debt, while also paying the second instalment of dividend Positive finish to the year: strong cash flow and decisive strategic actions 2 | © UPM
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Transform the company • Metamark acquisition • Sharpened the focus in biofuels growth strategy and discontinued the Rotterdam biorefinery development; profitability turnaround • Started commercial business in biochemicals • Strategic review of UPM Plywood • Graphic paper Joint Venture plan Improve competitiveness • Restructured the production footprint in UPM Adhesive Materials and UPM Communication Papers • Production curtailments in Fibres North, strategic partnership with Versowood • Efficiency measures in all businesses • Intensified actions to improve working capital efficiency Strategic actions in 2025 3 | © UPM
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Decarbonization solutions: positive market developments, commercial business started in biochemicals 4 | © UPM Markets Actions Results % of sales 0 10 20 30 40 50 0 20 40 60 80 100 UPM Energy€M Finnish electricity consumption grew by 3% in 2025 Electrification, data centers and green transition expected to continue to drive electricity demand growth Maximize value in the volatile electricity markets Capability to supply CO2-free electricity to meet growing demand, and ready sites for industrial use Q4 comparable EBIT €54 million, 31% of sales Strong achieved value creation 2025 average sales price €10/MWh above the market price Increasing price of advanced renewable fuels in H2 2025 RED III implementation supports positive market outlook Robust demand for biochemicals products Biofuels back in positive EBIT contribution, having improved each quarter in 2025, H2 2025 comparable EBIT €6 million Biochemicals production start-up ongoing. H2 2025 comparable EBIT €-49 million Capex-efficient debottlenecking Qualification process for SAF Proprietary feedstock technologies development First customer deliveries of industrial sugars in biochemicals Further products will be introduced in H1 2026 Energy Next Generation Renewables -60 -40 -20 0 20 UPM Next Generation Renewables€M Comparable EBIT Biofuels Biochemicals Comparable EBIT
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0 5 10 15 20 0 20 40 60 80 Advanced materials: resilient performance, growth faster than the markets in adhesive materials 5 | © UPM Markets Actions Results % of sales€M Resilient, growing (+2%) label materials demand in Europe through 2025 Demand grew (+1%) in North America in 2025, slowed down in Q4 (-1% y-o-y) Demand above pre-covid levels in all markets Actions to sharpen competitiveness and restructure production footprint Investments to grow in the U.S. and Southeast Asia Building position in graphics following recent acquisitions Growth faster than the markets through 2025 Q4 comparable EBIT €20 million, 5% of sales 2025 ROCE 14% Profitability improvement actions taken, full impact in 2026 In 2025 tariff uncertainties impacted the various markets In Q4, demand for label, release base and packaging materials normalized Seasonally improved fine paper markets in Asia in Q4 Q4 comparable EBIT €40 million, 13% of sales 2025 ROCE 21% Decreased variable costs, efficiency measures Flexible paper-based packaging development Capacity to grow with low investments Adhesive Materials Specialty Materials UPM Adhesive Materials % of sales€M 0 5 10 15 20 0 20 40 60 80 Comparable EBIT Comparable EBIT UPM Specialty Materials
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0 5 10 15 20 25 30 0 40 80 120 160 200 240 Renewable fibres: improved performance from the previous quarter, cost reduction continues 6 | © UPM Markets Actions Results % of sales€M Global hardwood pulp shipments grew by 6% Jan-Nov/2025 Trade uncertainty impacted negatively pulp market volumes and prices in Q2 2025 Hardwood pulp market prices increased gradually during H2 2025 Cost reduction continued in 2025, -$25/t from 2024 Optimization of wood sourcing and inbound logistics, as the plantations reach maturity Planning capex-efficient debottlenecking World-class low-cost platform Well-managed maintenance shutdown in UPM Fray Bentos in Q4 Q4 comparable EBIT €78 million, 21% of sales Global softwood pulp shipments decreased slightly Jan-Nov/2025 Low softwood pulp market prices continued in H2 2025 Pulpwood market prices in Finland decreased significantly during H2 2025, cost impact to materialize later, during 2026 Q4 comparable EBIT €-11 million, EBITDA positive UPM Forest business will be included in Fibres North from January 2026 onwards Production curtailment in the Finnish mills in H2 2025 Strategic partnership with Versowood Efficiency measures Fibres South Fibres North UPM Fibres Comparable EBIT UPM will provide additional financial information for the two parts of UPM Fibres reporting segment starting in Q1 2026 (Fibres South, Fibres North) 2025 ROCE 4%
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0 5 10 15 20 0 10 20 30 40 0 5 10 15 20 0 40 80 120 160 Communication Papers and Plywood: solid Q4 in both businesses, planned Joint Venture and strategic review 7 | © UPM Markets Actions Results % of sales€M Tariff uncertainty impacted the markets in 2025 European demand for graphic papers decreased by 8% in 2025 and 5% in Q4, y-o-y NA demand for magazine papers decreased by 10% in 2025 and 13% in Q4 Planned graphic paper Joint Venture with Sappi Closed paper production at UPM Kaukas and UPM Ettringen in Q4, decreasing capacity by 13% Sold the earlier closed Plattling paper mill site Fixed and variable cost reduction Q4 comparable EBIT €110 million, 19% of sales, incl. energy refunds Strong 2025 free cash flow at €362 million 2025 ROCE 18% In 2025, plywood demand in construction end-uses in Europe was stable at a low level Demand for plywood in industrial end-uses was good Demand for LNG birch plywood was very good Q4 comparable EBIT €16 million, 15% of sales 2025 ROCE 15% Strategic review of UPM Plywood Launched WISA-LNG Spruce plywood, a new solution to supply the strong demand in LNG shipping UPM Communication Papers % of sales€M UPM Plywood Comparable EBIT Comparable EBIT Communication Papers Plywood
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8 | © UPM • Assess options for maximizing the long-term potential of the Plywood business, while also benefiting the value creation for UPM’s shareholders • Includes a range of possibilities, including a potential separation from UPM through for example a divestment, partial demerger or initial public offering • The review is expected to be concluded by the end of 2026 • During the process, UPM remains fully committed to the Plywood business and its customers UPM Plywood strategic review summary
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50%50% 9 | © UPM • New, independent graphic paper company, owned 50/50 by UPM and Sappi • Would include the UPM Communication Papers business and Sappi’s graphic paper business in Europe • Enterprise value of € 1.42 billion, excl. the value of synergies • The financial benefit for UPM at closing would include €613 million cash payment, €406 million transfer of pension liabilities and a 50% share of the Joint Venture • The transaction is expected to have a positive impact on UPM’s profitability margins (EBIT % of sales), balance sheet and leverage • The transaction is subject to definitive agreements and merger control in the EU and other jurisdictions • The definitive agreements are expected to be signed during H1 2026, and the closing is expected to take place by the end of 2026 Graphic paper Joint Venture summary – non-binding letter of intent
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10 | © UPM With the portfolio initiatives, we aim to change the company profile, increasing its growth focus and improving margins Renewable fibres Maximizing value creation from the existing assets Advanced materials Focused capital-efficient growth Decarbonization solutions Large long-term growth potential with unique solutions +++ ++ + Market growthUPM businesses 3 000 4 000 5 000 6 000 7 000 8 000 9 000 Consistent growth > GDP UPM sales(* , excl. Communication Papers and Plywood (* unconsolidated €M
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| © UPM • Sales decreased by 12% to €2,312 million (€2,632 million in Q4 2024), impacted by lower sales prices, volumes and changes in currencies • Comparable EBIT decreased by 15% to 355 million, 15.3% of sales (€418 million, 15.9%) • Operating cash flow was strong at €720 million (€570 million), supported by actions to improve working capital efficiency • Net debt decreased from the previous quarter to €3,004 million, net debt to EBITDA was 2.29 Q4 2025 results in brief Q4 2025: positive finish to the year and strong cash flow 11 | © UPM 0 100 200 300 400 500 0 200 400 600 800 Comparable EBIT €M Operating cash flow €M
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| © UPM Comparable EBIT in Q4 2025 0 50 100 150 200 250 300 350 400 450 0 50 100 150 200 250 300 350 400 450 €M €M 153 6.7% 418 15.9% 355 15.3% 12 | © UPM 355 15.3%
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UPM hedges an average of 50% of the estimated net currency cash flow on a rolling basis for the next 12 months Foreign exchange exposure • At the end of 2025, UPM’s estimated net currency cash flows for the next 12 months totaled approximately €1,456 million • In addition, the earnings of UPM’s foreign subsidiaries are translated to euros in reporting. UPM has significant foreign subsidiaries in Uruguay, the U.S. and China • Currency fluctuations could impact UPM’s cash flow, earnings, or balance sheet, and may also affect the relative competitiveness between different currency regions 13 | © UPM USD 1,310 UYU -305 GBP 117 JPY 101 CNY 96 Others 138 Total 1,456 Estimated 12-month net currency cash flow at the end of 2025, before hedging, € million
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| © UPM • Profit guidance: UPM’s comparable EBIT in H1 2026 is expected to be approximately in the range of €325-525 million (€413 million in H1 2025, and €508 million in H2 2025). • Outlook: in H1 2026, compared with H2 2025, UPM’s performance is expected to benefit from moderately higher sales prices and delivery volumes and moderately lower fixed costs. Performance is expected to be held back by continued weak communication paper markets and increased costs during the early phase of the production ramp-up at UPM Leuna. Currencies started the year at similar levels, compared with H2 2025. Comparable EBIT in H2 2025 benefited from the timing of energy refunds and increased fair value of forest assets, items that are not expected to take place during H1 2026 in similar quantities. • In H1 2026, compared with H1 2025, UPM’s performance is expected to benefit from lower variable costs and moderately higher delivery volumes. Maintenance activity is expected to be lower than in the comparison period. Performance is expected to be held back by continued weak communication paper markets and increased costs during the early phase of the production ramp-up at UPM Leuna. Currencies at the beginning of the year are negative to comparable EBIT, compared with H1 2025. Outlook (* 14 | © UPM (* see UPM Financial statements release 2025 for the full Guidance and Outlook
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| © UPM • Net debt €3,004 million at the end of 2025 • Net debt / EBITDA 2.29 • Cash funds and committed credit facilities €2.7 billion at the end of 2025 • No financial covenants • UPM repurchased 6 million shares for a total of approximately €160 million in H1 2025 • The first dividend instalment for year 2024 (€397m) was paid on April 8, 2025, the second was paid on November 7 (€395m) Solid financial position 0,0 0,5 1,0 1,5 2,0 2,5 0 1 000 2 000 3 000 4 000 5 000 Net debt/ EBITDA (x) Net debt €M Policy: ≤ 2x 15 | © UPM €M Net debt and leverage
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0 200 400 600 800 1 000 1 200 1 400 1 600 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Depreciation Low capital expenditure in 2026 16 | © UPM Estimate Strategic investments Operational investments €M Capital expenditure Capex 2025 • Capex excluding acquisitions was €409m Capex estimate 2026 • Capex excluding acquisitions €300m • Operational investment needs consistently low
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Dividend Dividend policy • UPM aims to pay attractive dividends, targeting at least half of the comparable earnings per share over time Dividend proposal for 2025 • €1.50 (1.50) per share • 113% of 2025 comparable EPS Attractive dividend 17 | © UPM 0 10 20 30 40 50 60 70 80 90 100 110 0,00 0,20 0,40 0,60 0,80 1,00 1,20 1,40 1,60 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 €/share % of comparable EPS (* (* dividend proposal for 2025
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Summary • Q4 was a positive finish to the year 2025, with improving performance in most businesses and strong cash flow • Second quarter of decreasing net debt, while also paying the second instalment of dividend • We initiated decisive strategic actions to improve competitiveness and transform the company • Focus is on performance, cash generation, strengthening the balance sheet and successfully completing the strategic portfolio initiatives • With the strategic portfolio initiatives, we aim to change the company profile, increasing its growth focus and improving margins and leverage • Confident on UPM’s ability to create value, the Board proposed an unchanged dividend of €1.50 per share for 2025 18 | © UPM
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-0,5 0,0 0,5 1,0 1,5 2,0 2,5 3,0 -1 000 -500 0 500 1 000 1 500 2 000 2 500 3 000 3 500 4 000 4 500 5 000 2012 2014 2016 2018 2020 2022 2024 Net debt/ EBITDA (x) Net debt and leverage Net debt €m Group financial performance and targets 0 200 400 600 800 1 000 1 200 1 400 1 600 1 800 2 000 2 200 2012 2014 2016 2018 2020 2022 2024 €m Comparable EBIT 0 2 4 6 8 10 12 14 2012 2014 2016 2018 2020 2022 2024 % Comparable ROE Target: 10%Target: EBIT growth Policy: ≤ 2x 20 | © UPM
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Business area long-term return targets 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 *) Shareholdings in UPM Energy valued at fair value Long-term return target UPM Specialty Papers UPM Communication Papers UPM Plywood UPM Adhesive Materials UPM Energy UPM Fibres 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 **) Year 2021 restated , UPM Biofuels moved into Other Operations as of 1 January 2022. FCF/CE %ROCE % *) ROCE % **) ROCE% ROCE % ROCE % 21 | © UPM
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22 Change in reportable segments as of January 1, 2026 (1/2): UPM Forest business moved to UPM Fibres business area, as an integral and strategic part of Fibres North operations UPM Fibres UPM Fibres as published UPM Fibres restated Q1/25 Q2/25 Q3/25 Q4/25 2025 Q1/25 Q2/25 Q3/25 Q4/25 2025 Sales, € million 1,010 838 777 781 3,407 1,039 870 797 825 3,531 Comparable EBITDA, € million 202 119 88 102 511 227 149 105 140 621 % of sales 20.0 14.1 11.4 13.1 15.0 21.8 17.2 13.1 17.0 17.6 Change of fair value of forest assets and wood harvested, € million 2 9 22 31 65 6 6 28 103 144 Share of results of associated companies and joint ventures, € million 1 1 1 0 2 1 1 1 0 2 Depreciation, amortization and impairment charges, € million -79 -72 -72 -72 -295 -79 -73 -72 -72 -295 Operating profit, € million 126 55 39 62 282 155 83 62 172 472 % of sales 12.4 6.6 5.1 8.0 8.3 14.9 9.5 7.8 20.9 13.4 Items affecting comparability, € million 0 0 0 0 0 0 0 0 0 0 Comparable EBIT, € million 126 56 39 62 283 155 83 62 172 472 % of sales 12.4 6.6 5.1 8.0 8.3 14.9 9.6 7.8 20.9 13.4 Capital employed (average), € million 7,298 6,680 6,539 6,464 6,745 9,099 8,485 8,349 8,294 8,556 Comparable ROCE, % 6.9 3.3 2.4 3.9 4.2 6.8 3.9 3.0 8.3 5.5
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23 Change in reportable segments as of January 1, 2026 (2/2): UPM Forest moved from Other operations to UPM Fibres Other operations Other operations as published Other operations restated Q1/25 Q2/25 Q3/25 Q4/25 2025 Q1/25 Q2/25 Q3/25 Q4/25 2025 Sales, € million 166 192 149 187 693 166 192 149 187 693 Comparable EBITDA, € million -12 -2 -5 -6 -25 -37 -33 -21 -44 -136 Change of fair value of forest assets and wood harvested, € million 4 -3 6 72 80 0 0 0 0 0 Share of results of associated companies and joint ventures, € million 0 0 0 -2 -2 0 0 0 -2 -2 Depreciation, amortization and impairment charges, € million -14 -11 -10 -10 -45 -14 -11 -10 -10 -44 Operating profit, € million -25 -20 -9 46 -8 -54 -47 -31 -64 -197 Items affecting comparability, € million -5 -3 0 -9 -17 -5 -3 0 -9 -17 Comparable EBIT, € million -21 -16 -9 55 9 -50 -44 -31 -55 -180 Capital employed (average), € million 2,999 3,136 3,125 3,188 3,112 1,198 1,334 1,315 1,358 1,301 Comparable ROCE, % -2.7 -2.1 -1.1 6.9 0.3 -16.6 -13.2 -9.6 -16.2 -13.8 Other operations consist of UPM Next Generation Renewables (Biofuels and Biochemicals), Wood sourcing, Group services and Technology , and forest assets in the U.S., as of January 1, 2026.
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Indirect impact of the trade uncertainties have been more significant than the direct impact of tariffs UPM and tariffs • Global trade uncertainties and the weaker U.S. dollar affected particularly UPM Fibres and UPM Communication Papers in 2025 • Indirectly, tariffs may impact demand and trade flows, cause hesitation among customers and weaken consumer confidence. Such indirect impacts are possible in markets outside the U.S., too • Direct impact of tariffs was relatively minor in 2025, and impacted mainly UPM Communication Papers • UPM produces self-adhesive label materials and communication papers in the U.S. • UPM exports communication papers, specialty papers and eucalyptus pulp to the U.S. Current tariffs on these deliveries range between 0%, 10% and 15% 24 | © UPM 13% of UPM sales in 2025 was to the U.S. 46% locally produced 54% imported
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Maintenance shutdowns in 2026 25 | © UPM Timing Unit Q2/26 Olkiluoto nuclear power plant units OL1 and OL2 UPM Pietarsaari pulp mill Q3-Q4/26 Olkiluoto nuclear power plant unit OL3 Q4/26 UPM Paso de los Toros pulp mill Maintenance shutdowns have an impact on • Maintenance costs • Production volumes • Operational efficiency
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Maturity profile and liquidity Liquidity on December 31, 2025 was €2.7 billion (cash funds and unused committed credit facilities) UPM’s committed credit facilities: • €159 million rolling committed overdraft facility maturing 2027 • €600 million bilateral revolving credit facilities (€100 million maturing 2027, €500 million maturing 2029) • €1,250 million committed syndicated revolving credit facility maturing 2031 No financial covenants 0 500 1 000 1 500 26 27 28 29 30 31 32 33 34 35 36 37+ € million Unused committed credit facilities €2,009 million Leases €772 million Bonds €2,669 million Loans €302 million
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27 | © UPM UPM Fibres: Chemical pulp market prices 300 500 700 900 1100 1300 1500 1700 $/tonne BHKP, Europe NBSK, Europe BHKP, China NBSK, China 300 500 700 900 1100 1300 1500 1700 €/tonne BHKP, Europe, EUR NBSK, Europe, EUR BHKP, China, EUR NBSK, China, EUR Pulp market prices, U.S. dollarsPulp market prices, euros Source: FOEX Indexes Ltd
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28 | © UPM Wood market prices in Finland 30,00 40,00 50,00 60,00 70,00 80,00 90,00 2020/01 2020/04 2020/07 2020/10 2021/01 2021/04 2021/07 2021/10 2022/01 2022/04 2022/07 2022/10 2023/01 2023/04 2023/07 2023/10 2024/01 2024/04 2024/07 2024/10 2025/01 2025/04 2025/07 2025/10 €/m3 Logwood purchase prices Pine Spruce Birch 10,00 15,00 20,00 25,00 30,00 35,00 40,00 2020/01 2020/05 2020/09 2021/01 2021/05 2021/09 2022/01 2022/05 2022/09 2023/01 2023/05 2023/09 2024/01 2024/05 2024/09 2025/01 2025/05 2025/09 €/m3 Pulpwood purchase prices Pine Spruce Birch Source: Natural Resources Institute Finland
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29 | © UPM UPM Energy: Electricity market prices 0 20 40 60 80 100 120 140 160 180 200 220 240 2020 2021 2022 2023 2024 2025 €/MWh Market electricity prices vs UPM sales price Helsinki Front Year System Front Year UPM average sales price UPM Energy profitability 2020 2021 2022 2023 2024 2025 Comparable EBIT, EURm 171 270 381 182 181 151 % of sales 45.0 51.3 52.0 29.0 28.9 24.5
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European market shipments UPM Adhesive Materials: label materials demand 30 | © UPM North American market shipments 1 000 1 200 1 400 1 600 1 800 2 000 2 200 800 900 1 000 1 100 1 200 1 300 Total Excl. Russia and Belarus Source: FINAT M m2 M m2 Source: TLMI FY 2025: +2% y-o-y Q4 2025: +2% y-o-y -1% q-o-q FY 2025: +1% y-o-y Q4 2025: -1% y-o-y -5% q-o-q
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31 | © UPM UPM Communication Papers: Graphic paper prices 300 400 500 600 700 800 900 1000 1100 1200 1300 News SC LWC WFC WFU €/t Europe $/t $/t ChinaNorth America 500 600 700 800 900 1000 1100 1200 1300 1400 WFC r (100% chemical pulp) Uncoated Woodfree Reels (100% chemical pulp) 500 600 700 800 900 1000 1100 1200 1300 1400 1500 1600 1700 1800 News SC LWC WFC WFU Sources: PPI, RISI
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32 | © UPM Paper price vs. cash cost of marginal cost producer 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 €/tonne Sources: UPM, PPI, Fastmarkets, AFRY Price Cash cost of a marginal producer