Norske Skog ASA

Earnings Release • Apr 28, 2022

Sustainable and innovative industry

Bruck industrial site (following strategic projects) Sustainable and innovative industry driving the green shift

• 265 000 tonnes LWC magazine paper
• 210 000 tonnes recycled containerboard
• 160 000 tonnes refuse derived fuel
• 20 000 tonnes construction additives
• 40 MW grid stabilisation capacity
• 50 GWh district heating energy

First quarter in brief

Energy and raw material prices remain volatile

Further price increases required and implemented to address unprecedented market conditions

EBITDA of NOK 610m in the quarter

EBITDA improvement from previous quarter with margins normalising towards the >10% area Impacted by gain of NOK 175m from sale of the Nature's Flame pellets business

Publication paper market remains tight

Further industry closures from H2 2022 Bruck PM3 to stop production in Q3 2022 to finalise the conversion process

Bruck waste-to-energy facility in commissioning

Under commissioning with Valmet and currently operating at 75% Improves the energy situation and reduces the fossil CO² footprint at Bruck

EBITDA improvement in the quarter

Challenging energy and raw material markets

Source: Nord Pool, European Energy Exchange (EEX), Dutch Title Transfer Facility (TTF), RISI, Miljødirektoratet

Strong liquidity position

7 1) Cash earnings defined as cash flow from operations less maintenance capex; 2) LTM = Last Twelve Months, i.e., EBITDA reported over the last four quarters; 3) Includes waste-to-energy project at the Bruck industrial site and packaging paper projects at the Bruck and Golbey industrial sites

Net debt of NOK 924m

Net debt / LTM² reported EBITDA: 0.8x

Total available liquidity of EUR ~470m

• Cash of NOK 1,676m (EUR ~175m)
• 2021 CO² comp. of NOK ~290m (EUR ~30m)
• Undrawn project³ debt of EUR ~236m
• Undrawn RCF of EUR 31m

Remaining capex³ EUR ~300-320m

Includes additional civil engineering costs

Optimising publication paper cash flows and operations

Publication paper capacity

• Four sites in Europe, one in Australia
• In total, 11 producing paper machines
• 1 350k tonnes newsprint
  • Convert 125k tonnes in Q3 2022 (one machine)
  • Convert 235k tonnes in Q2 2023 (one machine)
• 400k tonnes LWC magazine
• 360k tonnes SC magazine

Targets

Operating rate of +90% EBITDA margin of +10% P P

Segment financials Q1 2022

			46	40
	7	0
-8
Q1'21	Q2'21	Q3'21	Q4'21	Q1'22

Europe	Q1'21	Q2'21	Q3'21	Q4'21	Q1'22
Operating rate, %	88%	85%	96%	96%	94%
Deliveries, thousand tonnes	382	403	433	427	407
Total operating income	1,635	1,714	2,183	2,648	2,968
EBITDA	106	14	113	395	441
EBITDA margin, %	6.2%	0.8%	5.2%	14.9%	14.9%
Australasia	Q1'21	Q2'21	Q3'21	Q4'21	Q1'22
Operating rate, %	79%	69%	87%	87%	91%
Deliveries, thousand tonnes	90	87	68	62	61
Total operating income	490	480	426	395	429
EBITDA	-8	7	0	46	40
EBITDA margin, %	-1.7%	1.4%	0.0%	11.6%	9.2%
Other activities	Q1'21	Q2'21	Q3'21	Q4'21	Q1'22
Total operating income	54	32	61	71	222
EBITDA	14	-4	-2	-19	130

Publication paper price increases necessary to address unprecedented raw material and energy prices

Entering the growing market for recycled containerboard

Packaging paper capacity

• 760k tonnes recycled containerboard
• In the market from Q1 2023

Targets

• Operating rate of ~95% from 2025-26
• EBITDA margin of +20% Competitive steam supply Centrally located with low transport costs Established raw materials access Ideal machine scale, trim and speed P P P P

Switching to containerboard is attractive across the board

• Production capacity doubles by switching from newsprint to containerboard
• Price per tonne for newsprint and containerboard are in the same area
• Expected containerboard EBITDA margin of +20% versus +10% for newsprint
• Growing demand for containerboard compared to declining newsprint demand

Containerboard market remains tight driven by e-commerce and sustainability focus

Reduce energy purchases and improve green energy mix

14 1) RDF = Refuse Derived Fuel, is a fuel produced from various types of waste such as municipal solid waste (MSW), industrial waste or commercial waste

Waste-to-energy

• Operating at 75% and in commissioning with Valmet until reaching 100%
• RDF¹gate fees less associated costs to contribute NOK ~100m annual EBITDA
• Reduces gas consumption by ~0.7 TWh and increases electricity by ~0.2 TWh

Green energy production and energy efficient operations enable annual surplus of CO² allowances

Continued commercialisation and scale-up of CEBINA and CEBICO

CEBINA

• Pilot of 100-500 tonnes capacity
• Proven with regular commercial sales
• Expanding production capacity
• Awarded Grønn Plattform grant of NOK ~60m to support further development

CEBICO

• Pilot of +300 tonnes capacity
• Innovation Norway grant NOK ~15m
• Commercialisation and partnership review
• Potential decision to scale-up in 2022

Enabling the circular economy

Developing climate solutions

• Participating in Borg CO2 industry cluster to develop CCUS² technologies with ambition to capture ~630k tonnes
• Supporting Ocean GeoLoop to develop and pilot its CCUS² technologies to capture close to 100% of CO² from flue gas
• Exploring a range of opportunities within advanced e-fuels, bio-carbon, -chemicals, -additives and -materials

Outlook

• Publication paper market expected to be tight as demand remains healthy and capacity closes
• Waste-to-energy facility to reduce energy purchases and improve green energy mix at Bruck
• Converting two machines from newsprint production to recycled containerboard production
• Continued development of existing and potential energy and bio product projects
• Impact from strategic projects and bio product innovation will become visible over next 1-2 years

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.