Norske Skog ASA

Investor Presentation • Oct 18, 2024

Q3 2024 presentation

18 October 2024

Norske Skog Sustainable fibre processing

Deliveries volume rolling last-twelve-months

Thousand tonnes

News SC LWC RCCM

Growing packaging paper producer

RCCM capacity: 760kt (ramp-up phase)

• Leading publication paper producer
  • LWC magazine capacity: 400kt
  • SC magazine capacity: 200kt
  • Newsprint capacity: 990kt
• Exploring fibre projects
  • BCTMP capacity: 300kt (design phase)
• 2023 CDP Climate Change Score "A-"

Five high quality industrial sites

Eleven paper machines with supporting infrastructure for energy, fibre, and water

2 LWC = Light Weigh Coated; SC = Supercalendered; RCCM = Recycled Corrugating Casing Materials; BCTMP = Bleached Chemi-Thermomechanical Pulp Capacities and deliveries are classified as follows; News (Skogn, Golbey PM2, Boyer PM3), LWC (Bruck PM4, Boyer PM2), SC (Saugbrugs), RCCM (Bruck PM3)

Quarter highlights

Third quarter 2024

Maintaining positive EBITDA and good cash position in challenging markets

• Quarterly EBITDA of NOK 91m with continued growth in EBITDA contributed from the Packaging Paper segment
• Signing a NOK 500m green term loan agreement at Skogn to enhance cash position

Capacity closures required in publication paper and containerboard markets

• Price increases for containerboard and newsprint implemented in the quarter to mitigate continued cost increases
• Containerboard and publication paper markets still experiencing excess capacity

Excellent customer feedback as containerboard deliveries continue to grow

• Bruck PM3 delivering 42kt of containerboard in the quarter and achieving utilisation to design capacity of 85%
• Expected start-up of Golbey PM1 revised to Q1 2025 and net capex revised to EUR 320m

Design of BCTMP line at Saugbrugs progressing

• Engaged technical and environmental consultants, and working with multiple machinery and equipment suppliers
• Meetings with Norwegian Environment Agency to provide clarity on environmental permits

News SC LWC RCCM

-156

Financial position Third quarter 2024

Book equity to total assets group covenant of min. 25%

Equity ratio

Equity ratio Interest coverage ratio

EBITDA to net cash interest cost group covenant of min. 2.0x

Cash Net debt ¹

NOKm

group covenant of min. NOK 100m unrestricted

NOKm (and leverage ratio) no group maintenance covenant

5 Note: Covenants calculated according to definitions in loan agreements 1) For Q2 2024, note that NOK 977m (NOK 1 005m including call premium and accumulated interest) was repaid following end of quarter as part of the bond refinancing. Pro forma, in Q2 2024 the cash position was NOK 1 779m of which NOK 584m was restricted

Segment financials

Maintaining positive EBITDA in challenging markets

NOK million	Q3'23	Q4'23	Q1'24	Q2'24	Q3'24
Publication Paper Europe
Deliveries, kt	258	270	262	279	283
Total operating inc.	2 405	3 028	2 058	2 514	2 224
EBITDA	335	723	166	464	99
EBITDA margin	14%	24%	8%	18%	4%
Publication Paper Australasia
Deliveries, kt	60	63	59	60	61
Total operating inc.	476	568	438	472	496
EBITDA	27	80	-74	6	3
EBITDA margin	6%	14%	-17%	1%	1%
Packaging Paper
Deliveries, kt	26	29	38	41	42
Total operating inc.	128	135	177	207	249
EBITDA	-31	-38	-7	2	8
EBITDA margin	-24%	-28%	-4%	1%	3%
Other
Total operating inc.	133	152	158	189	225
EBITDA	-5	-6	-9	-1	-19

Q3 2024

Publication Paper Europe

• Increased deliveries with higher average sales price due to product mix and newsprint price increases
• Continued cost pressure from higher pulpwood and recovered paper prices. Energy prices stable due to large contract share

Publication Paper Australasia

Increased deliveries and sales price, but lower EBITDA due to higher energy costs

Packaging Paper

• Increased deliveries in line with ramp-up plan, similar growth expected for coming quarters until 95% utilisation in H2 2025 for Bruck PM3
• Sales price increase in line with the market to mitigate increases in recovered paper prices

Raw materials

Fibre prices remain at high levels

Publication paper market

Publication paper prices at low levels with stable demand development

Packaging paper market Containerboard price following recovered paper prices

Testliner 3

Demand Operating rate

Containerboard ramp-up Continued increase in production volume

Monthly RCCM production Bruck PM3

Thousand tonnes

Production

Monthly RCCM production cost index Bruck PM3

Indexed to 100 per June 2023

Fixed per tonne Variable per tonne

Golbey PM1 – 550kt containerboard capacity

• Cabling representing majority of remaining work
• Commissioning of roll warehouse, containerboard winder, and the effluent station is ongoing
• Pre-commissioning (I/O check) has started for the OCC drum pulper and the paper machine (PM1)
• Remaining net capex of EUR ~30m, net of EUR ~50m in investment grants and energy certificates
• Expect containerboard production start-up in Q1 2025

Bruck PM3 – 210kt containerboard capacity

• Continued growth in production and deliveries, production reached 85% utilisation in the quarter
• Excellent product quality and customer feedback
• Continued pressure from OCC costs

Saugbrugs BCTMP design phase Strong local support to secure Saugbrugs as cornerstone industry in Halden

BCTMP project updates

• Project organisation established
• Engaged technical and environmental consultants
• Working with multiple machinery and equipment suppliers
• Meetings with Norwegian Environment Agency
• Contact with sales agents and potential customers

Project information

• 300kt BCTMP capacity for board, tissue, and paper
• Final investment decision H1 2025
• Expected net investment of NOK 1.5-2.0bn
• Production start 2027 and full utilisation 2028
• Expected return on net investment above 20%
• Investment project will unlock insurance of NOK 615m¹
• The project requires updating existing environmental and building permits and approval from certain lenders

Outlook Concluding remarks

• Energy costs normalising, but pulpwood and recovered paper costs increasing
• Publication paper prices remain at unsustainable levels as fibre costs increase
• Recovered paper remains a significant cost for the production of containerboard
• Expect positive EBITDA from packaging paper segment in 2024 due to Golbey PM1 start-up in Q1 2025
• Significant focus on reducing production cost and working capital to maintain competitive position

We create

green value

Norske Skog ASA Postal address: P.O. Box 294 Skøyen, 0213 Oslo, Norway Visitors: Sjølyst Plass 2, 0278 Oslo, Norway

Phone: +47 22 51 20 20 Email: info@norskeskog.com Email: ir@norskeskog.com

This presentation contains statements regarding the future in connection with Norske Skog's growth initiatives, profit figures, outlook, strategies and objectives . All statements regarding the future are subject to inherent risks and uncertainties, and many factors can lead to actual profits and developments deviating substantially from what has been expressed or implied in such statements .