Norske Skog ASA

Quarterly Report • Jul 15, 2022

INTRODUCTION

Norske Skog is a world leading producer of publication paper with strong market positions in Europe and Australasia. Publication paper includes newsprint and magazine paper. Norske Skog operates five mills in four countries. Four of the mills are in Europe and one in Australia. Norske Skog has an annual publication paper production capacity of 2.1 million tonnes. Newsprint and magazine paper are sold through sales offices and agents to over 80 countries. The group has approximately 2 100 employees. Of the four mills in Europe, two will produce recycled containerboard following conversion projects. In

addition to the traditional publication paper business, Norske Skog aims to further diversify its operations and continue its transformation into a growing and high-margin business through a range of exciting bio products and energy projects.

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The parent company, Norske Skog ASA, is incorporated in Norway and has its head office at Skøyen in Oslo. The company is listed on Oslo Stock Exchange with the ticker NSKOG.

KEY FIGURES

NOK MILLION	Q2 2022	Q1 2022	Q2 2021	YTD 2022	YTD 2021
INCOME STATEMENT
Total operating income	3 937	3 590	2 346	7 527	4 580
EBITDA*	905	610	17	1 515	129
Operating earnings	1 195	593	-277	1 789	-74
Profit/loss for the period	935	583	-355	1 518	-161
Earnings per share (NOK)	9.92	6.18	-3.77	16.10	-1.71
CASH FLOW
Net cash flow from operating activities	473	196	-190	669	-27
Net cash flow from operating activities per share (NOK)	5.01	2.08	-2.01	7.09	-0.29
Net cash flow from investing activities	-451	-112	-159	-564	-397
OPERATING MARGIN AND PROFITABILITY (%)
EBITDA margin*	23.0	17.0	0.7	20.1	2.8
Return on capital employed (annualised)*	33.8	17.8	-13.1	25.5	-10.0
PRODUCTION / DELIVERIES / CAPACITY UTILISATION
Production (1 000 tonnes)	463	474	460	937	941
Deliveries (1 000 tonnes)	470	468	490	938	962
Production / capacity (%)	91	94	82	93	84

* As defined in Alternative Performance Measures

NOK MILLION	30 JUN 2022	31 MAR 2022	31 DEC 2021	30 JUN 2021
BALANCE SHEET
Non-current assets	5 319	4 520	4 538	4 017
Current assets	6 046	5 474	4 587	4 178
Total assets	11 365	9 994	9 125	8 196
Equity	4 787	3 660	3 133	3 365
Net interest-bearing debt	1 012	924	1 054	779

REPORT OF THE BOARD OF DIRECTORS FOR THE SECOND QUARTER OF 2022

o Good profitability despite turbulent markets

• EBITDA of NOK 905 million, impact from waste-to-energy facility and price increases offsetting energy and raw material costs
• Profit of 935 million in the quarter, including positive non-cash impact of NOK 419 million from valuation of energy contracts

o Challenging energy and raw material markets

• Uncertainty and high costs for energy and raw materials continue into the second half of 2022, impacting production and prices
• Investments in waste-to-energy plant at Norske Skog Bruck and CHP biomass plant at Norske Skog Golbey support the reduction of natural gas imports

o Publication paper capacity reductions from 2022 to 2024

• Norske Skog Bruck PM3 stopped production on 10 July to facilitate conversion, expect marginal negative EBITDA impact
• Further industry closures announced in Western Europe support high operating rates in 2022 and into 2023

o Good progress on energy and growth projects

• New waste-to-energy plant in Bruck close to 100% utilization and GVE started construction of new biomass plant in Golbey
• Containerboard projects in Bruck and Golbey on schedule for production start-up in 2023
• CEBICO with partnership agreement for further commercialization and CEBINA successfully applied in materials

PROFIT/LOSS FOR THE PERIOD

NOK MILLION	Q2 2022	Q1 2022	Q2 2021	YTD 2022	YTD 2021
Operating revenue	3 822	3 326	2 182	7 148	4 337
Other operating income	116	264	164	380	243
Total operating income	3 937	3 590	2 346	7 527	4 580
Distribution cost	-327	-299	-294	-626	-589
Cost of materials	-1 971	-2 020	-1 403	-3 992	-2 640
Fixed cost	-735	-660	-631	-1 395	-1 222
EBITDA	905	610	17	1 515	129

Higher operating revenue in the second quarter compared to the previous quarter was driven by increased prices. Publication paper prices were increased further in the second quarter, which was necessary to mitigate the effect of higher input costs while maintaining sustainable margins. Delivered volumes were in line with previous quarter.

Cost of materials decreased slightly compared to the previous quarter, both in total and on a per tonne basis, due to the Norske Skog Bruck waste-to-energy facility starting to operate. Underlying there was an increase in cost of materials due to significant higher energy (electricity and gas) and raw material prices. Recovered paper (RCP) prices have increased further from previous quarters. This has resulted in continued and significant cost pressure upwards and limitations in availability of raw materials necessitating some down time in the quarter.

Fixed costs (including employee benefit expenses) increased compared to the previous quarter, both in total and on a per tonne basis, partly due to further accruals for long-term incentive programmes.

EBITDA increased quarter-over-quarter, partly driven by price increases and partly driven by positive impact from the start-up of the waste-to-energy facility at Norske Skog Bruck.

The publication paper market balance remains tight following significant capacity closures in 2021, with further closures from the second half of 2022 and until 2024. Utilisation was 91% for Norske Skog in the second quarter of 2022, driven by a tight publication paper market.

NOK MILLION	Q2 2022	Q1 2022	Q2 2021	YTD 2022	YTD 2021
Restructuring expenses	0	0	-160	0	-163
Depreciation	-120	-114	-105	-234	-209
Impairments	0	0	0	0	0
Derivatives and other fair value adjustments	411	97	-29	508	170
Operating earnings	1 195	593	-277	1 789	-74

Depreciation of NOK 120 million is a slight increase compared with previous quarters due to depreciation of new assets.

The fair value of energy contracts in Norway increased compared to the previous quarter due to higher future market prices for electricity.

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NOK MILLION	Q2 2022	Q1 2022	Q2 2021	YTD 2022	YTD 2021
Share of profit in associated companies	-3	-1	-9	-5	-9
Financial items	-127	1	-79	-127	-78
Income taxes	-130	-10	10	-140	-1
Profit/loss for the period	935	583	-355	1 518	-161

Financial items were negative by NOK 127 million in the second quarter. Interest cost and other financial costs were in line with the previous quarter. NOK was weaker against EUR at the end of second quarter resulting in foreign exchange loss of NOK 91 million on debt denominated in EUR.

The income taxes in the quarter relates mainly to the operations in Norske Skog Golbey.

DIVERSIFICATION BEYOND PUBLICATION PAPER

The conversion to production of containerboard is progressing at Norske Skog Bruck and Norske Skog Golbey. The paper machine PM3 at Norske Skog Bruck ceased production of newsprint on 10 July. Norske Skog Bruck will enter the recycled containerboard market during the first quarter of 2023 and will put Norske Skog on the path to become a leading European independent producer of recycled containerboard. The preparatory work and ordering of equipment for conversion to containerboard at Norske Skog Golbey is also underway, with production expected to start during the fourth quarter of 2023.

The machines are expected to operate at 60-70% utilisation in the first year and reach full utilisation during the third year of production. Once at full utilisation, the machines are expected to generate annual EBITDA of EUR 70-80 million, based on historical prices and margins seen in the market.

During the second quarter, CEBINA was successfully applied as an additive in epoxy filler materials used to coat salmon farming tanks for Salmon Evolution. This marks yet another milestone for the efforts to commercialise CEBINA. Work is ongoing to expand CEBINA production capacity at Norske Skog Saugbrugs, with grant support received from the Green Platform initiative.

In the second quarter, Norske Skog, BEWI and BE Form entered into a commercial partnership agreement. The ambition of the partnership is to identify relevant applications of CEBICO within existing and/or new products produced by BEWI and BE Form. The commercial work forms the basis for a potential future decision on expansion of CEBICO production capacity.

Norske Skog holds an approximately 26% ownership stake in Circa Group AS, listed under the ticker code CIRCA at Euronext Growth Oslo. During the second quarter, Circa entered an industrial partnership with Valmet to scale their Furacell production technology, with the shared ambition of reaching Circa's target of 80 000 tonnes production capacity in 2030.

Beyond the above-mentioned initiatives, the group continuously works to develop several other fibre and energy related growth projects, both on a stand-alone basis and in partnerships.

SEGMENT INFORMATION

PUBLICATION PAPER EUROPE

NOK MILLION	Q2 2022	Q1 2022	Q2 2021	YTD 2022	YTD 2021
Total operating income	3 469	2 968	1 872	6 437	3 582
EBITDA	910	441	14	1 351	120
EBITDA margin (%)	26.2	14.9	0.8	21.0	3.4
Return on capital employed (%) (annualised)	29.5	3.7	-11.1	17.0	-8.9
Production (1 000 tonnes)	398	415	381	813	773
Deliveries (1 000 tonnes)	407	407	403	814	785
Production / capacity (%)	90	94	85	92	87

The segment consists of Norske Skog's European operations in the publication paper market with industrial sites in Norway, France and Austria. Annual production capacity is approximately 1.8 million tonnes.

Operating income increased from the previous quarter due to higher sales prices. The price increases for publication paper in the quarter were necessitated by increasing cost of materials. Deliveries in the quarter were in line with previous quarter.

Distribution costs increased from the previous quarter on an absolute level and on a per tonne basis driven by higher freight rates. Cost of materials decreased slightly in total and on a per tonne basis, mainly due to higher energy and fibre prices in the quarter. Employee benefit

expenses increased in the quarter, both on an absolute level and on a per tonne basis.

EBITDA increased compared to the previous quarter because of higher prices and start-up of the Bruck waste-to-energy facility.

Demand for standard newsprint in Europe increased by 2% as of May 2022 compared to the same period last year. Magazine paper demand decreased 8%, with super calendared paper decreasing 5% and lightweight coated paper decreasing 11%. (Source: Eurograph).

Capacity utilisation was 90% in the period, with a slight decrease compared with the previous quarter of 94%.

EUROPE EUROPE

PUBLICATION PAPER AUSTRALASIA

YTD 2022	YTD 2021
899	971
89	-1
9.9	-0.2
46.9	-24.5
124	168
124	177
95	74

The segment consists of Norske Skog's publication paper operations in Australasia. The annual production capacity is approximately 0.3 million tonnes. The Norske Skog Boyer mill is the only domestic publication paper producer in the region.

Operating income increased compared to previous quarter due to higher prices and deliveries.

Distribution costs increased compared to the previous quarter on an absolute level and on a per tonne basis, due to higher freight rates. Cost of materials increased in the quarter on an absolute and a per tonne basis due to higher energy and raw material costs. Employee

AUSTRALASIA AUSTRALASIA

TOTAL OPERATING INCOME EBITDA

benefit expenses were flat on an absolute basis but decreased slightly on a per tonne basis.

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EBITDA increased compared to the previous quarter, mainly driven by higher prices in the quarter.

Demand for newsprint in Australasia decreased by 6% as of June 2022, compared to the same period last year. (Source: official statistics).

Capacity utilisation was 98% in the period, an increase compared to the previous quarter of 91%.

OTHER ACTIVITIES

500

600 MNOK

NOK MILLION	Q2 2022	Q1 2022	Q2 2021	YTD 2022	YTD 2021
Total operating income	23	222	36	245	96
EBITDA	-55	130	-4	75	10

CASH FLOW

482 470 400 429 426 395 300 200 100 0 OTHER ACTIVITIES		30 20 10 7 0	0	40
NOK MILLION	Q2 2022	Q1 2022	Q2 2021	YTD 2022	YTD 2021
Total operating income	23	222	36	245	96
EBITDA	-55	130	-4	75	10
Other activities also include unallocated headquarter costs. The second quarter saw an increase in the valuation of the long-term CASH FLOW		by approximately NOK 35 million annually but are not uniformly distributed throughout the quarters of the year.
NOK MILLION	Q2 2022	Q1 2022	Q2 2021	YTD 2022
					YTD 2021
EBITDA	905	610	17	1 515	129
Change in working capital	-352	-172	-115	-525	26
Restructuring payments	-10	-10	-19	-20	-38
Gain and losses from divestments	-8	-177	0	-184	-7
Net financial items	-33	-40	-36	-73	-68
Taxes paid	-17	-12	-18	-29	-32
Other items	-12	-2	-19	-14	-36
Net cash flow from operating activities	473	196	-190	669	-27
Purchases of property, plant and equipment and intangible assets	-437	-391	-159	-828	-348

Net cash flow from operating activities was positive NOK 473 million in the second quarter.

The operating cash flow was negatively impacted by change in working capital of NOK 352 million, mainly driven by an increase in inventories and trade and other receivables because of higher sales prices. Partly offset by higher trade and other payables.

Taxes paid in the second quarter relates to tax on the operations in Norske Skog Golbey and the Italian sales office.

Maintenance capex of NOK 48 million relates to ordinary maintenance in the quarter, an increase from the low levels in the first quarter.

Remaining purchases of property, plant and equipment and intangible assets relate to investments in the waste-to-energy facility at Norske Skog Bruck and the packaging paper projects at Norske Skog Bruck and Norske Skog Golbey.

BALANCE SHEET

NOK MILLION	30 JUN 2022	31 MAR 2022	31 DEC 2021	30 JUN 2021
Non-current assets	5 319	4 520	4 538	4 017
Cash and cash equivalents	1 728	1 676	1 489	1 324
Inventories, trade and other receivables and other current assets	4 318	3 797	3 098	2 854
Total assets	11 365	9 994	9 125	8 196
Equity	4 787	3 660	3 133	3 365
Non-current liabilities	3 601	3 515	3 391	2 846
Current liabilities	2 976	2 819	2 600	1 985
Net interest-bearing debt	1 012	924	1 054	779

Total assets increased in the second quarter mainly due to an increase in property, plant and equipment, valuation of energy contracts, inventory and trade and other receivables.

In total, cash and cash equivalents increased to NOK 1 728 million from NOK 1 676 million at previous quarter end. The increase is a result of positive operating cash flows in the quarter, reduced by investments in property, plant and equipment offset by draw down on loans.

Non-current liabilities decreased slightly from previous quarter. Interest-bearing non-current liabilities increased, offset by other noncurrent liabilities.

Debt to finance the Norske Skog Bruck waste-to-energy facility is fully drawn at EUR 54 million.

Debt to finance the packaging paper projects at Norske Skog Bruck and Norske Skog Golbey was drawn with approximately EUR 35 million at quarter end, compared to EUR 29 million at previous quarter end.

Net interest-bearing debt increased from NOK 924 million to NOK 1 012 million in the quarter.

OUTLOOK

The development in the global economy, especially within the raw material and energy markets, are of vital importance for the publication paper industry, and thus for Norske Skog's operations. The raw materials- and energy prices are expected to remain high and volatile in the second half of 2022 and may necessitate further publication paper price increases in Europe. The lack of availability of raw materials may cause short term halts in the production. Continued disruptions in the global supply chains may also cause operational challenges in the second half of 2022.

The already executed and planned capacity closures in the industry have resulted in a tight publication paper market, which is expected to keep high operating rates for the industry during 2022 and into 2023. The turbulent operating environment, especially on the energy side, may result in further temporary or permanent closures in the industry.

The waste-to-energy facility at Norske Skog Bruck is expected to reach full capacity utilisation during the third quarter of 2022. The facility will significantly reduce the gas consumption, and thus CO2 emissions for Norske Skog Bruck.

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At Norske Skog Bruck, the production of newsprint (PM3) ceased on 10 July in preparation for the conversion to recycled containerboard. Staff will remain on site until Bruck enters the packaging paper market in the first quarter of 2023. At Norske Skog Golbey, the conversion of one newsprint machine (PM1) into recycled containerboard production at Norske Skog Golbey is progressing as planned with expected startup in the fourth quarter of 2023.

Norske Skog continues to develop business opportunities for CEBINA and CEBICO. This includes evaluating a potential capacity increase for CEBICO bio composites materials beyond the existing 300 tonnes annual pilot-scale capacity as a result of Norske Skog Saugbrugs, BEWI and BE Form entered a partnership to commercialise CEBICO.

SKØYEN, 14 JULY 2022 THE BOARD OF DIRECTORS OF NORSKE SKOG ASA

Chair Board member Board member

Board member Board member CEO

John Chiang Arvid Grundekjøn Trine-Marie Hagen

Nikolai Johns Johanna Lindén Sven Ombudstvedt

INTERIM FINANCIAL STATEMENTS, SECOND QUARTER OF 2022 CONDENSED CONSOLIDATED INCOME STATEMENT

NOK MILLION	NOTE	Q2 2022	Q1 2022	Q2 2021	YTD 2022	YTD 2021
Operating revenue		3 822	3 326	2 182	7 148	4 337
Other operating income		116	264	164	380	243
Total operating income	4	3 937	3 590	2 346	7 527	4 580
Distribution costs		-327	-299	-294	-626	-589
Cost of materials		-1 971	-2 020	-1 403	-3 992	-2 640
Employee benefit expenses		-499	-479	-444	-978	-860
Other operating expenses		-235	-181	-187	-416	-362
Restructuring expenses		0	0	-160	0	-163
Depreciation	5	-120	-114	-105	-234	-209
Derivatives and other fair value adjustments	6	411	97	-29	508	170
Operating earnings		1 195	593	-277	1 789	-74
Share of profit in associated companies	7	-3	-1	-9	-5	-9
Financial items	8	-127	1	-79	-127	-78
Profit/loss before income taxes		1 065	593	-365	1 657	-161
Income taxes		-130	-10	10	-140	-1
Profit/loss for the period		935	583	-355	1 518	-161
Basic earnings per share (NOK)		9.92	6.18	-3.77	16.10	-1.71
Diluted earnings per share (NOK)		9.92	6.18	-3.77	16.10	-1.71

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

NOK MILLION	Q2 2022	Q1 2022	Q2 2021	YTD 2022	YTD 2021
Profit/loss for the period	935	583	-355	1 518	-161
Items that may be reclassified subsequently to profit or loss
Currency translation differences	192	-57	43	135	-80
Tax expense on translation differences	0	0	0	0	0
Reclassified translation differences upon divestment of foreign operations	0	1	0	1	0
Other comprehensive income for the period	192	-56	43	136	-80
Total comprehensive income for the period	1 127	527	-312	1 654	-241

CONDENSED CONSOLIDATED BALANCE SHEET

NOK MILLION	NOTE	30 JUN 2022	31 MAR 2022	31 DEC 2021	30 JUN 2021
Deferred tax asset		0	23	0	0
Intangible assets	5	17	18	21	17
Property, plant and equipment	5	4 726	4 245	4 103	3 655
Investments in associated companies and joint ventures	7	107	107	108	117
Other non-current assets	6	470	127	305	228
Total non-current assets		5 319	4 520	4 538	4 017
Inventories		1 357	1 206	1 203	1 172
Trade and other receivables		2 090	1 724	1 411	1 180
Other current assets	6	871	868	484	503
Cash and cash equivalents		1 728	1 676	1 489	1 324
Total current assets		6 046	5 474	4 587	4 178
Total assets		11 365	9 994	9 125	8 196
Paid-in equity	9	8 898	8 898	8 898	8 898
Retained earnings		-4 111	-5 238	-5 765	-5 533
Total equity		4 787	3 660	3 133	3 365
Employee benefit obligations		322	302	312	278
Deferred tax liability		254	244	260	278
Interest-bearing non-current liabilities	8	2 622	2 456	2 356	2 029
Other non-current liabilities	6	404	512	463	260
Total non-current liabilities		3 601	3 515	3 391	2 846
Trade and other payables		2 208	2 115	1 941	1 633
Tax payable		172	71	50	43
Interest-bearing current liabilities	8	118	144	187	74
Other current liabilities	6	478	489	422	235
Total current liabilities		2 976	2 819	2 600	1 985
Total liabilities		6 578	6 334	5 991	4 831
Total equity and liabilities		11 365	9 994	9 125	8 196

SKØYEN, 14 JULY 2022 THE BOARD OF DIRECTORS OF NORSKE SKOG ASA

Chair Board member Board member

Board member Board member CEO

John Chiang Arvid Grundekjøn Trine-Marie Hagen

Nikolai Johns Johanna Lindén Sven Ombudstvedt

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

NOK MILLION	Q2 2022	Q1 2022	Q2 2021	YTD 2022	YTD 2021
Cash generated from operations	3 797	2 985	2 094	6 782	4 623
Cash used in operations	-3 275	-2 736	-2 230	-6 011	-4 551
Cash flow from currency hedges and financial items	-9	-17	-6	-26	-16
Interest payments received	4	4	0	8	1
Interest payments made	-29	-27	-30	-56	-53
Taxes paid	-17	-12	-18	-29	-32
Net cash flow from operating activities 1)	473	196	-190	669	-27
Purchases of property, plant and equipment and intangible assets	-437	-391	-159	-828	-348
Sales of property, plant and equipment and intangible assets	14	2	1	17	7
Purchase of shares in companies and other financial payments	-28	0	0	-28	-69
Sales of shares in companies and other financial instruments	0	276	0	276	13
Net cash flow from investing activities	-451	-112	-159	-564	-397
New loans raised	63	254	77	317	686
Repayments of loans	-89	-133	-30	-222	-304
New equity	0	0	0	0	388
Net cash flow from financing activities	-26	121	47	95	769
Foreign currency effects on cash and cash equivalents	55	-17	4	38	-2
Total change in cash and cash equivalents	51	187	-298	239	343
Cash and cash equivalents at start of period	1 676	1 489	1 622	1 489	980
Cash and cash equivalents at end of period	1 728	1 676	1 324	1 728	1 324
1) Reconciliation of net cash flow from operating activities
Profit/loss before income taxes	1 065	593	-365	1 657	-161
Change in working capital	-352	-172	-115	-525	26
Change in restructuring provisions	-10	-10	141	-20	125
Depreciation and impairments	120	114	105	234	209
Derivatives and other fair value adjustments	-411	-97	16	-508	-201
Gain and losses from divestment of business activities and PPE	-8	-177	0	-184	-7
Net financial items without cash effect	98	-40	52	58	19
Taxes paid	-17	-12	-18	-29	-32
Change in pension obligations and other employee benefits	-2	-2	-9	-4	-10
Adjustment for other items	-10	0	4	-10	4
Net cash flow from operating activities	473	196	-190	669	-27

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN GROUP EQUITY

	PAID-IN	OTHER PAID-IN	RETAINED
NOK MILLION	EQUITY	EQUITY		EARNINGS TOTAL EQUITY
Equity 1 January 2021	6 261	2 249	-5 292	3 219
Increase share capital	388	0	0	388
Profit/loss for the period	0	0	194	194
Other comprehensive income for the period	0	0	-123	-123
Equity 31 March 2021	6 649	2 249	-5 221	3 677
Profit/loss for the period	0	0	-355	-355
Other comprehensive income for the period	0	0	43	43
Equity 30 June 2021	6 649	2 249	-5 533	3 365
Profit/loss for the period	0	0	-202	-202
Other comprehensive income for the period	0	0	-30	-30
Equity 31 December 2021	6 649	2 249	-5 765	3 133
Profit/loss for the period	0	0	583	583
Other comprehensive income for the period	0	0	-56	-56
Equity 31 March 2022	6 649	2 249	-5 238	3 660
Profit/loss for the period	0	0	935	935
Other comprehensive income for the period	0	0	192	192
Equity 30 June 2022	6 649	2 249	-4 111	4 787

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

1. GENERAL INFORMATION

Norske Skog ASA ("the company") and its subsidiaries ("the group" or "Norske Skog") produce, distribute and sell publication paper. This includes newsprint and magazine paper.

All amounts in the interim financial statements are presented in NOK million unless otherwise stated. Due to rounding, there may be differences in the summation of columns and rows.

The table below shows the applied average (un-weighted monthly) foreign exchange rates per quarter and the closing exchange rate at month ends for the most important currencies for the group.

	Q2 2022	Q1 2022	30 JUN 2022	31 MAR 2022	31 DEC 2021
AUD	6.72	6.40	6.85	6.55	6.40
EUR	10.02	9.93	10.35	9.71	9.99
GBP	11.81	11.88	12.06	11.48	11.89
NZD	6.12	5.98	6.19	6.06	6.03
USD	9.42	8.85	9.96	8.75	8.82

2. ACCOUNTING POLICIES

The interim financial statements of Norske Skog have been prepared in accordance with IAS 34 Interim Financial Reporting. The interim financial statements do not include all information required for full annual financial statements and should be read in conjunction with the consolidated financial statements for 2021. The interim financial statements are unaudited.

The accounting policies applied in the preparation of the interim financial statements are consistent with those applied in the preparation of the consolidated financial statements for the year ended

31 December 2021, except for the adaptation of amended standards and new interpretations, which are mandatory from 1 January 2022. These changes are described in the consolidated financial statements for 2021.

The group has not early adopted any standard, interpretation or amendment that has been issued but is not yet mandatory.

3. ESTIMATES, JUDGEMENTS AND ASSUMPTIONS

Preparation of interim financial statements in accordance with IFRS implies use of estimates, which are based on judgements and assumptions that affect the application of accounting principles and the reported amounts of assets, liabilities, revenues and expenses. Actual amounts might differ from such estimates.

Estimated decline in value of property, plant and equipment, and investments in associated companies

Property, plant and equipment are tested for possible impairment charges whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. A prolonged decrease in prices or demand beyond the historical level could be an indicator of impairment and an impairment test will be prepared. The recoverable amount is the higher of an asset's fair value less sales costs or its value in use. Value in use is the present value of the future cash flows expected to be derived from a cash-generating unit. The key drivers of profitability in the industry and thus asset values for Norske Skog are product prices relative to production costs.

Commodity contracts

Norske Skog's portfolio of commodity contracts consist mainly of contracts that are settled through physical delivery. Embedded derivatives in commodity contracts are measured at fair value and embedded derivatives that are not traded in an active marked, are assessed through valuation techniques.

The fair value of embedded derivatives in physical contracts vary depending on changes in currency and price indexes.

Commodity contracts that fail to meet the own-use exemption criteria in IFRS 9 Financial instruments – recognition and measurement are recognised in the balance sheet and valued at fair value.

The group uses its judgement to select a variety of methods and make assumptions that are mainly based on market conditions existing at each balance sheet date. See Note 17 in the consolidated financial statements for 2021 for more information regarding the calculation of fair value of derivatives.

Provisions

Provisions for environmental restoration, dismantling costs, restructuring activities and legal claims are recognised when the group has a present legal or constructive obligation as a result of past events, an outflow of resources is more likely than not to be required to settle the obligation and the amount can be reliably estimated.

Provisions for future environmental and dismantling liabilities are based on a number of assumptions made using management's best judgment. See Note 3 in the consolidated financial statements for 2021 for a more thorough description of important accounting estimates and assumptions impacting the preparation of financial statements.

Contingent liabilities

Norske Skog is an international company that, through its ongoing business operations, will be exposed to litigation and claims from public authorities and contracting parties as well as assessments from public authorities in each country it operates.

4. OPERATING SEGMENTS

The activities of the Norske Skog group are focused on two business segments, Europe and Australasia. The segment structure is in line with how the group is managed internally. Norske Skog's chief operating decision maker is corporate management, who distribute resources and assess performance of the group's operating segments. Norske Skog has an integrated strategy in Europe and Australasia to maximise the profit in each region. The optimisation is carried out through coordinated sales and operational planning. The regional planning, in combination with structured sales and operational processes, ensures maximisation of profit.

Publication paper includes newsprint and magazine paper. Newsprint includes standard newsprint and improved newsprint used in newspapers, inserts, catalogues etc. Magazine paper includes the paper qualities super calendared (SC) and lightweight coated (LWC). Magazine paper is used in magazines, catalogues, and advertising materials.

Operating revenue consist mainly of sale of goods for both Publication Paper Europe and Publication Paper Australasia.

The publication paper Europe segment encompasses production and sale of newsprint and magazine paper in Europe. All the four European mills and the regional sales organisation are included in the operating segment publication paper Europe.

The publication paper Australasia segment encompasses production and sale of newsprint and magazine paper in Australasia. Mills in Australasia and the regional sales organisation are included in the operating segment publication paper Australasia. The Norske Skog Boyer mill is the only mill in the Australasian operating segment.

Activities in the group that do not fall into the operating segments are presented under other activities. This includes corporate functions and Green Energy business.

The pellets operation of Nature's Flame is included in Green Energy under other activities up to first quarter 2022 when it was sold.

Q2 2022	PUBLICATION PAPER EUROPE	PUBLICATION PAPER AUSTRALASIA	OTHER ACTIVITIES	ELIMINATIONS	NORSKE SKOG GROUP
Operating revenue	3 362	461	22	-24	3 822
Other operating income	107	9	0	-1	116
Total operating income	3 469	470	23	-24	3 937
Distribution costs	-258	-69	0	0	-327
Cost of materials	-1 719	-239	-14	0	-1 971
Employee benefit expenses	-378	-73	-48	1	-499
Other operating expenses	-204	-40	-16	24	-235
EBITDA	910	49	-55	0	905
Depreciation	-107	-11	-2	0	-120
Derivatives and other fair value adjustments	411	0	0	0	411
Operating earnings	1 215	38	-57	0	1 195
Share of operating revenue from external parties (%)	100	100	0		100

	PUBLICATION	PUBLICATION
	PAPER	PAPER	OTHER		NORSKE
Q1 2022	EUROPE	AUSTRALASIA	ACTIVITIES	ELIMINATIONS	SKOG GROUP
Operating revenue	2 885	421	47	-27	3 326
Other operating income	83	7	175	-2	264
Total operating income	2 968	429	222	-28	3 590
Distribution costs	-237	-58	-4	0	-299
Cost of materials	-1 791	-223	-6	0	-2 020
Employee benefit expenses	-345	-73	-62	1	-479
Other operating expenses	-153	-34	-21	27	-181
EBITDA	441	40	130	0	610
Depreciation	-101	-10	-3	0	-114
Derivatives and other fair value adjustments	97	0	0	0	97
Operating earnings	437	30	126	0	593
Share of operating revenue from external parties (%)	100	100	46		100

Q2 2021	PUBLICATION PAPER EUROPE	PUBLICATION PAPER AUSTRALASIA	OTHER ACTIVITIES	ELIMINATIONS	NORSKE SKOG GROUP
Operating revenue	1 714	480	32	-44	2 182
Other operating income	158	2	4	-1	164
Total operating income	1 872	482	36	-44	2 346
Distribution costs	-231	-60	-4	0	-294
Cost of materials	-1 153	-274	-1	25	-1 403
Employee benefit expenses	-327	-98	-20	1	-444
Other operating expenses	-147	-44	-16	19	-187
EBITDA	14	7	-4	0	17
Restructuring expenses	0	-160	0	0	-160
Depreciation	-92	-10	-3	0	-105
Derivatives and other fair value adjustments	66	-95	0	0	-29
Operating earnings	-12	-258	-7	0	-277
Share of operating revenue from external parties (%)	98	100	44		100

YTD 2022	PUBLICATION PAPER EUROPE	PUBLICATION PAPER AUSTRALASIA	OTHER ACTIVITIES	ELIMINATIONS	NORSKE SKOG GROUP
Operating revenue	6 247	882	69	-51	7 148
Other operating income	190	17	176	-2	380
Total operating income	6 437	899	245	-53	7 527
Distribution costs	-495	-127	-4	0	-626
Cost of materials	-3 510	-462	-20	0	-3 992
Employee benefit expenses	-724	-147	-110	2	-978
Other operating expenses	-356	-74	-37	51	-416
EBITDA	1 351	89	75	0	1 515
Depreciation	-207	-21	-6	0	-234
Derivatives and other fair value adjustments	508	0	0	0	508
Operating earnings	1 652	68	69	0	1 789
Share of operating revenue from external parties (%)	100	100	31		100

YTD 2021	PUBLICATION PAPER EUROPE	PUBLICATION PAPER AUSTRALASIA	OTHER ACTIVITIES	ELIMINATIONS	NORSKE SKOG GROUP
Operating revenue	3 348	970	86	-68	4 337
Other operating income	234	1	10	-1	243
Total operating income	3 582	971	96	-70	4 580
Distribution costs	-455	-125	-9	0	-589
Cost of materials	-2 083	-570	-11	25	-2 640
Employee benefit expenses	-636	-192	-34	1	-860
Other operating expenses	-288	-86	-32	43	-362
EBITDA	120	-1	10	0	129
Restructuring expenses	0	-161	-3	0	-163
Depreciation	-184	-19	-6	0	-209
Derivatives and other fair value adjustments	237	-67	0	0	170
Operating earnings	173	-249	2	0	-74
Share of operating revenue from external parties (%)	99	100	52		100

INCOME STATEMENT	Q2 2022	Q1 2022	Q2 2021	YTD 2022	YTD 2021
OTHER OPERATING REVENUE
Corporate functions	23	26	23	49	51
Green energy and other	0	196	13	196	45
Total	23	222	36	245	96
EBITDA
Corporate functions	-55	-46	-5	-101	3
Green energy and other	0	176	1	176	8
Total	-55	130	-4	75	10

5. PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS

JAN-JUN 2022	PROPERTY, PLANT AND EQUIPMENT	RIGHT-OF-USE ASSETS	TOTAL PROPERTY PLANT AND EQUIPMENT	INTANGIBLE ASSETS
Carrying value at start of period	3 999	104	4 103	21
Additions*	846	9	855	0
Depreciation	-209	-21	-229	-4
Disposals	-132	-10	-143	0
Currency translation differences	136	3	139	0
Carrying value at end of period	4 640	86	4 726	17

*The difference between additions and the line Purchases of property, plant and equipment and intangible assets in the condensed consolidated statement of cash flows is due to right-of-use assets allocated emission allowances, accruals for payments and other additions with no cash impact.

PER OPERATING SEGMENTS

30 JUN 2022	TOTAL PROPERTY PLANT AND EQUIPMENT	INTANGIBLE ASSETS
Publication paper Europe	4 460	6
Publication paper Australasia	259	1
Other activities	7	10
Total	4 726	17

16

17

NORSKE SKOG – QUARTERLY REPORT - SECOND QUARTER 2022 (UNAUDITED)

6. ENERGY CONTRACTS, DERIVATIVES AND FINANCIAL INSTRUMENTS CARRIED AT FAIR VALUE

		ASSETS	LIABILITIES
30 JUN 2022		CURRENT NON-CURRENT		CURRENT NON-CURRENT
Energy contracts and embedded derivatives in energy contracts (level 3)	768	289	342	208
Other derivatives and financial instruments carried at fair value (level 2)	0	0	0	0
Total	768	289	342	208

Norske Skog's portfolio of commodity contracts consists mainly of physical energy contracts. Certain of the energy contracts are measured at fair value. The fair value of commodity contracts is especially sensitive to future changes in energy prices.

The contract prices for energy in Norway are sensitive to change in paper and pulpwood prices. Externally forecasted price increases for paper increases the cost of energy. Market prices for energy have increased in the short and the long end of the price curve compared to previous quarter, giving a positive impact on the fair value of the contracts in the quarter of NOK 419 million.

Changes in the value of energy contracts, commodity contracts and embedded derivatives in contracts are presented in the income statement line Derivatives and other fair value adjustments. A

sensitivity analysis of the impact on profit after tax of fluctuations in energy prices, currency and price indices is given in Note 4 in the consolidated financial statements for 2021.

Financial derivative contracts are accounted for at fair value and changes in contracts are presented in the income statement under financial items. A sensitivity analysis of the impact on profit after tax of fluctuations in currency is given in Note 4 in the consolidated financial statements for 2021.

The valuation techniques used are described in Note 17 in the consolidated financial statement for 2021.

7. INVESTMENTS IN ASSOCIATED COMPANIES

Investments in associated companies are accounted for in accordance with the equity method. The carrying value of associated companies are NOK 104 million at 30 June 2022.

At 30 June 2022 Norske Skog holds a 26% share of Circa Group AS, with a carrying value of NOK 89 million. Loss is included in the quarter with NOK 3 million. Circa Group AS is listed on Euronext Growth.

Due to later reporting dates than Norske Skog, the share of results from Circa Group is included with a three months lag.

8. FINANCIAL ITEMS AND DEBT REPAYMENTS

FINANCIAL ITEMS

NOK MILLION	Q2 2022	Q1 2022	Q2 2021	YTD 2022	YTD 2021
Net interest expenses	-26	-25	-31	-50	-59
Currency gains/losses*	-91	36	-39	-56	43
Other financial items	-10	-10	-9	-21	-62
Total financial items	-127	1	-79	-127	-78

*Currency gains and losses on trade receivables and trade payables are reported as Operating revenue and Cost of materials respectively.

FINANCING

In 2021 Norske Skog entered into credit facility agreements in an aggregate amount of EUR 265 million to finance its investment in the conversion projects to recycled containerboard.

EUR 193 million was for the project at Norske Skog Golbey and EUR 72 million for the project at Norske Skog Bruck.

The borrowing entities are Norske Skog Bruck GmbH and Norske Skog Golbey SAS, and the facilities are fully guaranteed by Norske Skog ASA.

The facilities will be drawn as capital expenditures are incurred, and repayment is scheduled to commence approximately upon completion of each respective project with average maturity towards the end of 2030. As of 30 June 2022, the credit facilities had been drawn by approximately EUR 35 million.

Norske Skog has a EUR 150 million senior secured bond. The bond matures in March 2026 and has an interest rate of EURIBOR (zero floor) +5.5% with quarterly interest payments.

During the second quarter of 2022, Norske Skog bought back bonds in a nominal amount of EUR 3.3 million. As of 30 June 2022, the outstanding amount under the EUR 150 million senior secured bond, net of bought back bonds, was EUR 145.6 million.

Norske Skog has EUR 31 million Revolving Credit Facility agreements with a tenor of five years. As of 30 June 2022, the revolving credit facility was undrawn.

The EUR 54 million credit facility for the waste-to-energy plant in Norske Skog Bruck was fully drawn as of 30 June 2022. It will be repaid in quarterly installments up until the final maturity date in 2028, starting in fourth quarter 2022.

The remaining financing arrangements for the group includes leasing, factoring, and other credit facilities on mill level.

The financing covenants applicable to Norske Skog on a consolidated basis are (i) freely available and unrestricted cash and cash equivalents of minimum NOK 100 million, (ii) EBITDA* to net interest costs of minimum 2.0:1, and (iii) book equity to total assets of minimum 25% and (iv) minimum LTM EBITDA* of NOK 400 million. In addition, there are various company specific financial covenants applicable to the subsidiaries acting as borrowers under the respective credit facilities.

*The EBITDA used in the financial covenants' calculations may differ from the EBITDA shown in the financial reporting due to adjustment requirements in the financing agreements.

BONDS

NOK MILLION	MATURITY	CURRENCY	INTEREST RATE	NOMINAL VALUE	AMOUNT OUTSTANDING 30 JUN 2022
NSKOG02	March 2026	EUR	EURIBOR +5.50%	150	146

DEBT REPAYMENT SCHEDULE*

NOK MILLION	2022	2023	2024	2025	2026-
Bonds	0	0	0	0	1 507
Debt to credit institutions	74	212	228	190	458
Total	74	212	228	190	1 965

*Not including items relating to leases.

Total debt listed in the repayment schedule differ from the carrying value in the balance sheet. This is due to the amortized cost principle.

Financed amounts from securitisation arrangements is classified as interest-bearing current liabilities. This amounts to NOK 17 million in debt repayment in the third quarter of 2022. The financed amount represents a group of individual loans, which are settled individually at maturity of the trade receivable.

New loans are initiated on a consecutive basis based on new trade receivables included under the securitization agreement. The liability is in its nature current and Norske Skog does not have an unconditional right to defer settlement beyond twelve months. The liabilities are liabilities that are settled through its normal operating cycle. The corresponding trade receivable is derecognised when the customer pays it.

18

9. PRINCIPAL SHAREHOLDERS

	NUMBER OF SHARES	OWNERSHIP %
NS NORWAY HOLDING AS	26 896 681	28.53
DRANGSLAND KAPITAL AS	4 716 148	5.00
DNB Markets Aksjehandel/-analyse	4 646 358	4.93
UBS Europe SE	3 586 563	3.80
The Bank of New York Mellon SA/NV	2 718 887	2.88
The Bank of New York Mellon SA/NV	2 564 821	2.72
INTERTRADE SHIPPING AS	2 010 000	2.13
The Bank of New York Mellon SA/NV	1 472 172	1.56
VERDIPAPIRFONDET ALFRED BERG GAMBA	1 450 000	1.54
RBC Investor services bank S.A.	1 300 000	1.38
MP PENSJON PK	1 198 015	1.27
J.P. Morgan SE	1 117 049	1.19
VERDIPAPIRFONDET HOLBERG NORGE	1 000 000	1.06
CARUCEL FINANCE AS	974 624	1.03
The Bank of New York Mellon SA/NV	924 763	0.98
VERDIPAPIRFONDET NORDEA NORGE VERD	854 513	0.91
CLEARSTREAM BANKING S.A.	779 952	0.83
UBS Europe SE	764 436	0.81
VERDIPAPIRFONDET EIKA SPAR	759 323	0.81
VERDIPAPIRFONDET FONDSFINANS NORGE	740 097	0.79
Other shareholders	33 790 303	35.85
Total	94 264 705	100.00

The data is extracted from VPS 13 July 2022. Whilst every reasonable effort is made to verify all data, VPS cannot guarantee the accuracy of the analysis.

10. THE NORSKE SKOG SHARE

	30 JUN 2022	31 MAR 2022	31 DEC 2021	30 JUN 2021
Share price (NOK)	54.70	49.95	38.40	34.90
Book value of equity per share (NOK)	50.79	38.83	33.24	35.70

11. RELATED PARTIES

Oceanwood is a related party to Norske Skog through the ownership in NS Norway Holding AS (largest shareholder).

There have not been any transactions with related parties in 2022.

12. EVENTS AFTER THE BALANCE SHEET DATE

There have been no events after the balance sheet date with significant impact on the interim financial statements for the second quarter of 2022.

13. HISTORICAL FIGURES

INCOME STATEMENT	Q2 2022	Q1 2022	Q4 2021	Q3 2021	Q2 2021
Total operating income	3 937	3 590	3 092	2 642	2 346
Variable costs	-2 298	-2 320	-2 091	-1 923	-1 697
Fixed costs	-735	-660	-580	-608	-631
EBITDA	905	610	422	111	17
Restructuring expenses	0	0	-12	-17	-160
Depreciation	-120	-114	-115	-109	-105
Impairments	0	0	22	0	0
Derivatives and other fair value adjustment	411	97	163	-551	-29
Operating earnings	1 195	593	479	-565	-277
Share of profit in associated companies	-3	-1	-5	-4	-9
Financial items	-127	1	5	-45	-79
Profit/loss before income taxes	1 065	593	480	-614	-365
Income taxes	-130	-10	-80	12	10
Profit/loss for the period	935	583	400	-602	-355

SEGMENT INFORMATION	Q2 2022	Q1 2022	Q4 2021	Q3 2021	Q2 2021
Publication paper Europe
Total operating income	3 469	2 968	2 648	2 183	1 872
EBITDA	910	441	395	113	14
Deliveries (1 000 tonnes)	407	407	427	433	403
Publication paper Australasia
Total operating income	470	429	395	426	482
EBITDA	49	40	46	0	7
Deliveries (1 000 tonnes)	63	61	62	68	87
Other activities
Total operating income	23	222	71	61	36
EBITDA	-55	130	-19	-2	-4

BALANCE SHEET	30 JUN 2022	31 MAR 2022	31 DEC 2021	30 SEP 2021	30 JUN 2021
Total non-current assets	5 319	4 520	4 538	4 154	4 017
Inventories	1 357	1 206	1 203	1 134	1 172
Trade and other receivables	2 090	1 724	1 411	1 317	1 180
Cash and cash equivalents	1 728	1 676	1 489	1 163	1 324
Other current assets	871	868	484	213	503
Total current assets	6 046	5 474	4 587	3 827	4 178
Total assets	11 365	9 994	9 125	7 982	8 196
Total equity	4 787	3 660	3 133	2 767	3 365
Total non-current liabilities	3 601	3 515	3 391	3 259	2 846
Trade and other payables	2 208	2 115	1 941	1 698	1 633
Other current liabilities	768	704	659	258	351
Total current liabilities	2 976	2 819	2 600	1 956	1 985
Total liabilities	6 578	6 334	5 991	5 215	4 831
Total equity and liabilities	11 365	9 994	9 125	7 982	8 196

CASH FLOW	Q2 2022	Q1 2022	Q4 2021	Q3 2021	Q2 2021
Reconciliation of net cash flow from operating activities
EBITDA	905	610	422	111	17
Change in working capital	-352	-172	54	-22	-115
Payments made relating to restructuring activities	-10	-10	-53	-129	-19
Gain and losses from divestment	-8	-177	0	-9	0
Cash flow from net financial items	-33	-40	-32	-42	-36
Taxes paid	-17	-12	-32	-43	-18
Other	-12	-2	-42	34	-19
Net cash flow from operating activities	473	196	317	-99	-190
Purchases of property, plant and equipment and intangible assets	-437	-391	-326	-347	-159
Net divestments	-14	278	0	179	0
Net cash flow from investing activities	-451	-112	-326	-168	-159
Net cash flow from financing activities	-26	121	329	109	47
Foreign currency effects on cash and cash equivalents	55	-17	6	-2	4
Total change in cash and cash equivalents	51	187	326	-161	-298

Responsibility Statement from the Board of Directors and CEO in compliance with section 5-5 in the securities trading act

We declare that to the best of our knowledge, the condensed consolidated interim financial statements for the period 1 January to 30 June 2022 have been prepared in accordance with IAS 34 – Interim Financial Reporting and give a true and fair view of the Norske Skog group's assets, liabilities, financial position and result as a whole.

We also confirm to the best of our knowledge that the report of the board of directors gives a true and fair view of important events that have occurred during the first six months of the financial year and their impact on the condensed consolidated interim financial statements, a description of the principal risks and uncertainties for the remaining six months of the financial year, and major related-party transactions.

SKØYEN, 14 JULY 2022 THE BOARD OF DIRECTORS OF NORSKE SKOG ASA

Chair Board member Board member

Board member Board member CEO

John Chiang Arvid Grundekjøn Trine-Marie Hagen

Nikolai Johns Johanna Lindén Sven Ombudstvedt

ALTERNATIVE PERFORMANCE MEASURES

The European Securities and Markets Authority's (ESMA) has defined new guidelines for alternative performance measures (APM). An APM is defined as a financial measure of historical or future financial performance, financial position, or cash flows, other than a financial measure defined or specific in the applicable financial reporting framework (IFRS). The company uses EBITDA, EBITDA margin and return on capital employed (annualized) to measure operating performance on Group level. It is the company's view that the APMs provides the investors relevant and specific operating figures which may enhance their understanding of the performance.

EBITDA, EBITDA margin, variable costs, fixed costs, return on capital employed and net interest-bearing debt are defined by the company below.

EBITDA: Operating earnings for the period, before restructuring expenses, depreciation and amortization and impairment charges, derivatives and other fair value adjustments, determined on an entity, combined or consolidated basis. EBITDA is used for providing consisting information of operating performance and cash generating which is relative to other companies and frequently used by other stakeholders.

NOK MILLION	Q2 2022	Q1 2022	Q2 2021	YTD 2022	YTD 2021
Operating earnings	1 195	593	-277	1 789	-74
Restructuring expenses	0	0	160	0	163
Depreciation	120	114	105	234	209
Impairments	0	0	0	0	0
Derivatives and other fair value adjustments	-411	-97	29	-508	-170
EBITDA	905	610	17	1 515	129

EBITDA margin: EBITDA/total operating income. EBITDA margin assist in providing a more comprehensive analysis of operating performance relative to other companies.

NOK MILLION	Q2 2022	Q1 2022	Q2 2021	YTD 2022	YTD 2021
EBITDA	905	610	17	1 515	129
Total operating income	3 937	3 590	2 346	7 527	4 580
EBITDA margin	23.0 %	17.0 %	0.7 %	20.1 %	2.8 %

Variable costs: Distribution costs + cost of materials

NOK MILLION	Q2 2022	Q1 2022	Q2 2021	YTD 2022	YTD 2021
Distribution costs	327	299	294	626	589
Cost of materials	1 971	2 020	1 403	3 992	2 640
Variable costs	2 298	2 320	1 697	4 618	3 229

Fixed costs: Employee benefit expenses + other operating expenses.

NOK MILLION	Q2 2022	Q1 2022	Q2 2021	YTD 2022	YTD 2021
Employee benefit expenses	499	479	444	978	860
Other operating expenses	235	181	187	416	362
Fixed costs	735	660	631	1 395	1 222

Return on capital employed (annualised): (Annualised EBITDA – Annualised Capital expenditure)/Capital employed (average). Return on capital employed assist in providing a more comprehensive analysis of returns relative to other companies.

NOK MILLION	Q2 2022	Q1 2022	Q2 2021	YTD 2022	YTD 2021
EBITDA	905	610	17	1 515	129
Capital expenditure	437	391	159	828	348
Average capital employed	5 530	4 937	4 315	5 389	4 392
Return on capital employed (annualised)	33.8 %	17.8 %	-13.1 %	25.5 %	-10.0 %

NOK MILLION	30 JUN 2022	31 MAR 2022	31 DEC 2021	30 JUN 2021
Intangible assets	17	18	21	17
Property, plant and equipment	4 726	4 245	4 103	3 655
Inventory	1 357	1 206	1 203	1 172
Trade and other receivables	2 090	1 724	1 411	1 180
Trade and other payables	-2 208	-2 115	-1 941	-1 633
Capital employed	5 981	5 078	4 797	4 390

Net interest-bearing debt: Net interest-bearing debt consist of bond issued and other interest-bearing liabilities (current and non-current) reduced by cash and cash equivalent.

NOK MILLION	30 JUN 2022	31 MAR 2022	31 DEC 2021	30 JUN 2021
Interest-bearing non-current liabilities	2 622	2 456	2 356	2 029
Interest-bearing current liabilities	118	144	187	74
Cash and cash equivalents	-1 728	-1 676	-1 489	-1 324
Net interest-bearing debt	1 012	924	1 054	779

Capital expenditure (Capex): Purchases of property, plant and equipment and intangible assets.

Maintenance capex: Capex required to maintain the Group's current business in accordance with GAAP according to the latest annual financial statements (but excluding any capex for the development of new business).