GROWTH BASED ON EFFICIENT PLATFORM

Jussi VanhanenPresident

Engineered Materials Business Group

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LABEL

Achievements in key targets

2

1 Large scale platform is ready• Major investment programme completed in China, US, Poland 2007-08• European restructuring and profitability turn-around

2 Increasing focus on emerging markets• Acquisition of Brazilian labelstock coating and slitting operations• New slitting and distribution terminals in Russia, Turkey, India

and Latin America

3 Product renewal• Introduction of new tailored solutions and speciality products• Speciality label production line in the US• Acquisition of the business operations of Gascogne Laminates Switzerland SA• Fit-for-purpose material constructions and improved utilisation of recycling

opportunities

4 Further growth opportunities• Seeking possibilities for future growth through organic growth and M&A• New product development towards more specialised applications

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UPM RaflatacAvery Dennison

Other competitors

Other main competitor

US & Canada

Latin America

Europe

Sub-Saharan Africa

South of Asia

South EastAsia

Greater China

Japan & Korea

Oceania

Sources: UPM Raflatac estimates, FINAT, TLMI

Asia including only high & medium quality segment

7-9%

~2%~3%

15-20%

12-15%1-2%

3-5%

10-12%

2-4%

2001-2011 annual growth estimations:

LABEL Labelstock is a ~6 bn EUR growing business globally, UPM has the #2 position in most markets

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LABEL

Consistent growth

4

0

300

600

900

1 200UPM Raflatac salesEURm

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Scarborough UK

Barcelona, Spain

Mills River, NC

Dixon, IL

Johor, Malaysia

Changshu, China

Durban,South Africa

Tampere, Finland

Nancy, France

Melbourne, Australia

Wroclaw, Poland

Rio de Janeiro, Brazil

Factory

Terminal

Fletcher, NC

LABEL

UPM Raflatac global operating platform

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0

20

40

60

80

100

120

2003 2004 2005 2006 2007 2008 2009 2010 2011

LABEL

On the back of the investments in 2006-08, the business can be developed with low capex

6

Capital expenditure and depreciationEURm

Capex

Depreciation

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LABEL

Wroclaw factory in Poland – start-up 2008

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LABEL

Growth in emerging markets

8

0

50

100

150

200

250

300

350

400

450

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Emerging markets

14% 12%

CAGR 01-11 07-11

Maturemarkets

4% 2%

Sales (indexed)

2001 = 100

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LABEL

A wealth of end-use areas offers growth potential in tailored solutions

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Tyre labelling

Wine labelling

Securitylabelling

Logistics & Transport labelling

Oil & Industrial Chemical labelling

Foodlabelling

Beveragelabelling

Home & personal carelabelling

Pharmaceutical labelling

Retaillabelling

A4 &Cut-sizelabelling

Durableslabelling

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LABEL

Mastering product complexity deriving out of customers' specialized needs is key to a profitable labelstock operation

10

Volume Added value # of products # of products

Standard

Specials

TAILORED:Products engineered or modified for customer's specific needs

END-USE:Products for specific end-use needs, e.g. pharma, security

MENU:Customer chooses face/adhesive/backing combinations

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LABEL

In mature markets, UPM seeks growth in higher value added special products

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Higher value-added products

8% 4%

CAGR 01-11 07-11

Standard products

3% 1%

0

50

100

150

200

250

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Sales in mature markets (indexed)

2001 = 100

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LABEL

New special products production line in the US – start-up 2012

12

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LABEL

RafCycle – maximising the reuse of raw materials and minimising the amount of waste paper

UPM’s RafCycle waste management concept gives a second life to self-adhesive labelby-products that would otherwise be incinerated or landfilled.

13

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LABEL

Summary

• Label will continue to grow in emerging markets and in special products with relatively low investments

• Product renewal and value chain development support the long term growth targets

• Complementary acquisitions can speed the development

14 | © UPM