---
title: "UPM and Sappi definitive agreement signed for graphic paper joint venture in Europe; Anticipated €100m annual synergies"
sdDatePublished: "2026-08-04T08:07:00Z"
source: "https://www.upm.com/siteassets/investors/reports-and-presentations/2026/07-2026-roadshow-presentation-final.pdf"
topics:
  - name: "renewable energy"
    identifier: "medtop:20000257"
  - name: "climate change"
    identifier: "medtop:20000418"
  - name: "research and development"
    identifier: "medtop:20000208"
locations:
  - "Lappeenranta"
  - "Leuna"
  - "Fray Bentos"
  - "Tacuarembó"
  - "Uruguay"
  - "India"
  - "Germany"
  - "China"
  - "United States"
  - "Finland"
---


UPM and Sappi definitive agreement signed for graphic paper joint venture in Europe; Anticipated €100m annual synergies

UPM – we renew the everyday
Investor presentation
July 2026

Our portfolio leverages competitive business platforms
• Decarbonization solutions
Biochemicals, biofuels, CO2-free energy
• Advanced materials
Adhesive materials, specialty materials,
plywood
• Renewable fibres
Pulp, other bioproducts
• Communication papers
2 | © UPM

With the portfolio initiatives, we change the company profile,
increasing its growth potential and margins
3 | © UPM
High growth potential and unique position
•
Unique offering for new large electricity consumers, growth
driven by electrification, datacenters and green industries
•
Biofuels and Biochemicals help reduce dependence on fossil
fuels and decrease CO2 emissions
Maximizing value creation and cash flow
•
World-class competitive platform in Uruguay, with further cost
optimization and capex-efficient debottlenecking potential
•
Multi-fibre offering through flexible platform in Finland
Healthy, predictable and profitable growth
•
Accelerate growth in high-performance applications
(labels, liners, graphics, recyclable packaging)
•
Expansion in higher margin products, higher growth regions
H1 2026
comparable EBIT
continuing operations excl.
Communication Papers
Decarbonization
solutions
Advanced
materials
Renewable
fibres

4 | © UPM
• UPM Communication Papers and
Sappi’s graphic paper business in Europe
• Subject to merger control and other conditions
• Expected to benefit customers and the entire industry
by strengthening the resilience of European graphic
paper supply in declining markets
• Expected to have a positive impact on UPM’s
profitability margins, balance sheet and leverage
Definitive agreement signed and financing secured for the
planned graphic paper Joint Venture
Mills
UPM + Sappi
8+4
Anticipated synergies
€ million annually
100
Independent graphic paper company
Combined enterprise value, excl. synergies
Enterprise value
1,420
€ million
See the May 28, 2026, stock exchange release for further details

UPM Plywood demerger plan to separate it
into a new independent listed company
• WISA Group Plc to be listed on Nasdaq Helsinki in early November, with
initially the same shareholder base as UPM
• Demerger and listing prospectus available on www.upm.com/demerger
• The EGM to decide on the demerger plan will be held on August 31, 2026
• Financial targets for WISA Group
→Sales over €550 million by 2030
→Comparable EBIT, 13% of sales by 2030
→Net debt / Comparable EBITDA under 1.5x
→Dividend policy: around 50% of the profit for the financial year as a dividend
• Increase UPM shareholder value by
→WISA Group solely pursuing its own strategic priorities and growth opportunities
→Increasing visibility into key value drivers facilitates fair valuation of the business
→Enhancing UPM’s focus on its core businesses
5 | © UPM

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
6 000
7 000
8 000
9 000
10 000
11 000
12 000
UPM sales
€M
6 | © UPM
A focused portfolio to enable accelerated growth
in the coming years

Our global business model has shown resilience
By going more global we aim to accelerate growth
7 | © UPM
UPM sales in the future(*
UPM sales geographically, excl.
Communication Papers and Plywood
Europe
North America
ROW
Asia
(* this is not a forecast
Europe
North America
ROW
Asia

8 | © UPM
Our dedication to responsible business and environmental
leadership will continue

i
Innovative products
Scientifically verifying the
climate impact of all our
products
Committed to climate-positive
forestry and enhancing
biodiversity
-65% from own CO2 emissions
-30% from CO2 emissions
of supply chain
Our climate commitment
WE ACT THROUGH
EMISSION REDUCTIONS
WE ACT THROUGH
PRODUCTS
WE ACT THROUGH
FORESTS
9 | © UPM

10 | © UPM
Innovation boosting performance and future growth
R&D Investment (2025)
€404 million
accounting for
28.8%
of operating cash flow
Intellectual property:
Over5,000 patents
Over2,000
trademarks
Global research centers:
3 centers located in
Finland, China, Germany

11 | © UPM
Sales
Logistics
Operations
Forests and
plantations
AI is being deployed at scale across
our entire organization
25+
ongoing AI projects,
cutting across UPM

-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
20152016201720182019202020212022202320242025
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
20152016201720182019202020212022202320242025
€m
Comparable EBIT
0
2
4
6
8
10
12
14
20152016201720182019202020212022202320242025
%
Comparable ROE
Target: 10%
Target: EBIT growth
Policy: ≤ 2x
12 | © UPM

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 Materials
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
FCF/CE %
ROCE % *)
ROCE % **)
ROCE%
ROCE %
ROCE %
13 | © UPM

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 after the major investment cycle
14 | © UPM
Estimate
Strategic investments
Operational investments
€ million
Capex estimate for 2026
excl. acquisitions, € million
300
Operational investment
needs consistently low
Capital expenditure

20
30
40
50
60
70
80
90
100
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 comp. EPS
Consistently attractive dividend
15 | © UPM
Dividend for the financial year 2025
791
1.50
€ / share
€ million
Rewarding shareholders
Dividend 10 years
Dividend policy
UPM aims to pay attractive dividends,
targeting at least half of the comparable
earnings per share over time.
Paid in two instalments, Apr 21 and Nov 6, 2026

16 | © UPM
Q2 2026 – improved results in
all businesses, portfolio
change progressing
• Sales from continuing operations totaled €2,355
million (2,341 million in Q2 2025)
• Comparable EBIT from continuing operations
increased by 71% to €212 million, 9.0% of sales
(124 million, 5.3%)
• All businesses improved their results y-o-y
• UPM and Sappi signed a definitive agreement on
the graphic paper Joint Venture
• The Board approved a plan to demerge the
Plywood business into a new listed company.
The EGM to decide on the demerger plan will be
held on August 31, 2026
UPM Plywood is presented as discontinued operations

• UPM Plywood is presented
as discontinued
operations due to the
proposed demerger
• The financial information
presented for
discontinued operations is
not representative of the
historical or future
profitability of the UPM
Plywood business area as
a stand-alone business
Continuing and discontinued operations, UPM total in the
Half year financial report 2026
17 | © UPM
€ million
Q2 2026
Q2 2025
H1 2026
H1 2025
2025
Sales, continuing
2,355
2,341
4,781
4,914
9,392
Sales, discontinued operations
84
59
164
132
264
Sales, total
2,440
2,400
4,945
5,046
9,656
Comparable EBITDA, continuing
% of sales
356
15.1
250
10.7
732
15.3
659
13.4
1,254
13.4
Comparable EBITDA, discontinued operations
% of sales
20
23.3
7
11.9
39
24.0
19
14.8
57
21.5
Comparable EBITDA, total
% of sales
376
15.4
257
10.7
771
15.6
678
13.4
1,311
13.6
Comparable EBIT, continuing
% of sales
212
9.0
124
5.3
471
9.8
404
8.2
883
9.4
Comparable EBIT, discontinued operations
% of sales
18
21.4
2
3.2
33
20.2
9
6.9
38
14.4
Comparable EBIT, total
% of sales
230
9.4
126
5.2
504
10.2
413
8.2
921
9.5

Decarbonization solutions: strong results in Biofuels, ramp-up
in Biochemicals, Energy improved y-o-y
18 | © UPM
Markets
Actions
Results
0
10
20
30
40
50
60
0
20
40
60
80
100
120
UPM Energy
Electricity consumption growth
continued in Finland, +5% LTM
to May
Q2 followed normal seasonality
Electrification, data centers and
green transition expected to
drive significant demand growth
Maximize value in the volatile
markets
Clean baseload electricity
offering for large new demand
New renewable energy
development pipeline
Sites suitable for data centers
and other industrial actors
Q2 2026 comparable EBIT
€24 million, 17% of sales
H1 2026 comparable EBIT
€124 million, 32% of sales
OL1&2 maintenance
shutdowns in Q2
Good demand and healthy bio-
premiums for advanced
renewable fuels
Elevated fossil fuel prices in Q2
Robust demand and sales
pipeline for biochemicals
products
Biofuels posted strong results,
H1 2026 comparable EBIT
€58 million, 35% of sales
Biochemicals ramp-up ongoing,
H1 2026 comparable EBIT
€-65 million
Capex-efficient debottlenecking
Qualification process for SAF
Proprietary feedstock
technologies development
Leuna: deliveries of industrial
sugars have reached substantial
volumes, deliveries of RFF and
other lignin derivatives are
expected to start during Q3
Energy
Next Generation
Renewables
Comparable EBIT
% of
sales
€M
-80
-60
-40
-20
0
20
40
60
UPM Next Generation
Renewables
€M
Biofuels
Biochemicals
Comparable EBIT

0
5
10
15
20
0
20
40
60
80
Advanced materials: robust sales growth and results
19 | © UPM
Markets
Actions
Results
Strong Q2 label materials
demand in Europe (+14% yoy)
and Asia Pacific, with some
support from stock buying
Slower demand growth (+1%
yoy) in North America
Actions to sharpen
competitiveness
Investments to grow in higher-
margin products in the U.S.
Investments in higher-growth
regions, Southeast Asia, India
Building position in graphics
following recent acquisitions
Q2 2026 sales grew by 5%
comparable EBIT €44 million,
10% of sales
H1 2026 comparable EBIT
€70 million, 9% of sales
Good Q2 demand for label,
release base and packaging
papers in Europe
The U.S. markets were softer
Specialty paper markets in Asia
were good, fine paper markets
competitive
Q2 2026 sales grew by 4%,
comparable EBIT €40 million,
12% of sales
H1 2026 comparable EBIT
€80 million, 12% of sales
Barrier papers' product
development pipeline
strengthened
Capacity to grow with low
investments
Adhesive
Materials
Specialty
Materials
UPM Adhesive
Materials
0
5
10
15
20
0
20
40
60
80
Comparable EBIT
Comparable EBIT
UPM Specialty
Materials
% of
sales
€M
% of
sales
€M

0
5
10
15
20
25
30
0
25
50
75
100
125
150
Renewable fibres: further improved results in Fibres South,
challenging markets and maintenance in Fibres North
20 | © UPM
Markets
Actions
Results
% of
sales
€M
Global hardwood pulp shipments
-2% yoy in Apr-May/2026
Hardwood pulp market prices
increased gradually
Optimization of wood sourcing
and inbound logistics, as the
plantations reach maturity
Planning capex-efficient
debottlenecking
World-class competitiveness
Fully offset increases in
logistics and other costs
Q2 2026 comparable EBIT
€101 million, 24% of sales
H1 2026 comparable EBIT
€187 million, 23% of sales
Global softwood pulp shipments
+4% yoy in Apr-May/2026
Low softwood pulp market prices
continued
Pulpwood market prices in
Finland stabilized in H1, at
approx. 30% lower yoy
Wood costs decreased, sales
prices and currencies weaker
UPM Pietarsaari maintenance
shutdown in Q2
Q2 2026 comparable EBIT €-10
million
H1 2026 comparable EBIT €24
million, 3% of sales
Temporary shut-downs planned
for H2 2026 to optimize
production and wood sourcing,
and ensure profitability
Fibres South
Fibres North
Fibres South
Comparable EBIT
-5
0
5
10
15
20
25
-25
0
25
50
75
100
125
Fibres North
Comparable EBIT
% of
sales
€M

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 Q2 performance,
graphic paper Joint Venture, plywood demerger plans progr