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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. Norske Skog has an annual publication paper production capacity of 2.1 million tonnes. Four of the mills are in Europe and one in Australia. The group also operates a wood pellet facility in New Zealand with capacity of 90 000 tonnes. Newsprint and magazine paper is sold through sales offices and agents to over 80 countries. The group has approximately 2 150 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 fibre and energy projects.

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	Q3 2021	Q2 2021	Q3 2020	YTD 2021	YTD 2020
INCOME STATEMENT
Total operating income	2 642	2 346	2 199	7 222	7 136
EBITDA*	111	17	73	240	590
Operating earnings	-565	-277	-31	-638	-63
Profit/loss for the period	-602	-355	-89	-763	-522
Earnings per share (NOK)**	-6.38	-3.77	-0.94	-8.10	-5.53
CASH FLOW
Net cash flow from operating activities	-99	-190	115	-126	476
Net cash flow from operating activities per share (NOK)**	-1.05	-2.01	1.22	-1.34	5.05
Net cash flow from investing activities	-168	-159	-131	-565	518
OPERATING MARGIN AND PROFITABILITY (%)
EBITDA margin*	4.2	0.7	3.3	3.3	8.3
Return on capital employed (annualised)*	-20.8	-13.1	-7.3	-13.4	5.2
PRODUCTION / DELIVERIES / CAPACITY UTILISATION
Production (1 000 tonnes)	490	460	417	1 431	1 324
Deliveries (1 000 tonnes)	501	490	441	1 464	1 325
Production / capacity (%)	95	82	71	88	75

* As defined in Alternative Performance Measures

**Adjusted for the share issuance on 5 February 2021 pursuant to which the number of shares was increased from 82 500 000 to 94 264 705

NOK MILLION	30 SEP 2021	30 JUN 2021	31 DEC 2020	30 SEP 2020

BALANCE SHEET
Non-current assets	4 154	4 017	4 084	5 356
Current assets	3 827	4 178	3 703	3 956
Total assets	7 982	8 196	7 787	9 311
Equity	2 767	3 365	3 219	4 715
Net interest-bearing debt	1 052	779	725	628

REPORT OF THE BOARD OF DIRECTORS FOR THE THIRD QUARTER OF 2021

o Considerable price increases for all product grades in Q3 2021 and into Q4 2021

Publication paper market tightening following significant capacity closures over past 18 months, further closures announced for 2022-23
Further price increases required both in Q4 2021 and Q1 2022 to compensate for continued increases in energy and raw material prices

o EBITDA of NOK 111 million in the quarter

EBITDA improvement from previous quarter, but margins remain at low and unsustainable levels
Significant negative impact from raw material and energy costs

o Tasman sales process

Sale of energy contract and employee redundancy payments settled in the quarter
Net positive cash impact in the quarter of NOK ~70m

o Entered into credit facilities for conversion projects following end of quarter

• Attractive terms for EUR 265 million debt financing with average maturity towards the end of 2030

PROFIT/LOSS FOR THE PERIOD

NOK MILLION	Q3 2021	Q2 2021	Q3 2020	YTD 2021	YTD 2020

Operating revenue	2 532	2 182	2 174	6 868	6 771
Other operating income	110	164	25	354	365
Total operating income	2 642	2 346	2 199	7 222	7 136
Distribution cost	-307	-294	-268	-896	-847
Cost of materials	-1 615	-1 403	-1 243	-4 255	-3 742
Fixed cost	-608	-631	-615	-1 830	-1 957
EBITDA	111	17	73	240	590

COVID-19 vaccinations and gradual easing of restrictions have led to a rebound of economic activity, but there is at the same time a considerable strain on global supply chains and soaring prices for raw materials, and energy. This has resulted in significant cost increases. Publication paper prices increased in the third quarter 2021, only partly mitigating the effect of higher input costs. Further price increases are required to maintain margins. The publication paper market balance remains tight following significant capacity closures over the past 18 months. Utilisation was 95% for Norske Skog in the third quarter of 2021, driven by a very tight publication paper market.

Higher operating revenue in the third quarter compared to the previous quarter was driven by increases in price and deliveries (sales volume) across all grades.

Cost of materials (mainly fibre and energy) increased significantly compared to the previous quarter, both in total and on a per tonne basis. The main cost increase in the quarter relates to significant increases in energy prices, both electricity and gas. Recovered paper (RCP) prices have remained at the high levels seen also in the previous quarter.

Fixed costs (including employee benefit expenses) decreased compared to the previous quarter, both in total and on a per tonne basis.

EBITDA increased quarter-over-quarter, notably from very depressed levels in the previous quarter, mainly due to price increases.

NOK MILLION	Q3 2021	Q2 2021	Q3 2020	YTD 2021	YTD 2020
Restructuring expenses	-17	-160	-12	-180	-29
Depreciation	-109	-105	-108	-318	-326
Impairments	0	0	0	0	-193
Derivatives and other fair value adjustments	-551	-29	16	-381	-106
Operating earnings	-565	-277	-31	-638	-63

Restructuring expenses of NOK 17 million relate to the restructuring of the Australasian business following cessation of paper production the Tasman mill on 30 June 2021.

The fair value of energy contracts in Norway decreased compared to the previous quarter as a result of expected increases in publication paper prices impacting negatively on contract energy prices.

Depreciation of NOK 109 million is in line with previous quarters.

NORSKE SKOG QUARTERLY REPORT – THIRD QUARTER 2021 (UNAUDITED)

NOK MILLION	Q3 2021	Q2 2021	Q3 2020	YTD 2021	YTD 2020

Share of profit in associated companies	-4	-9	4	-13	-16
Financial items	-45	-79	-56	-123	-399
Income taxes	12	10	-7	11	-44
Profit/loss for the period	-602	-355	-89	-763	-522

Financial items were negative by NOK 45 million in the third quarter mainly due to interest cost and other financial costs. NOK was weaker against EUR for the majority of the third quarter compared to the second quarter but strengthened at the end of the third quarter ending

at similar level as in the previous quarter. Debt denominated in other currencies than NOK was unchanged.

Net interest expenses were in line with previous quarter. The income taxes in the quarter relate to the operations in Bruck and Golbey.

DIVERSIFICATION BEYOND PUBLICATION PAPER

After the end of the third quarter, Norske Skog announced that it had entered into debt facility agreements with an aggregate amount of EUR 265 million to finance its EUR 350 million investment in recycled containerboard conversion projects. Lenders are leading European banks, partly guaranteed by German export credit agency Euler Hermes and Austria Wirtschaftsservice Gesellschaft - the Austrian Government Promotional and Investment Bank. The commercial terms are attractive and support the highly competitive profile of the containerboard projects. The first containerboard production will commence in Bruck in just over a year and put Norske Skog on the path to become a leading European independent producer of recycled containerboard.

The total financing amounts to EUR 265 million, or approximately 75% of the EUR 350 million investment amount, of which EUR 193 million is for the Golbey containerboard project and EUR 72 million for the Bruck containerboard project. DNB, Caisse d'Epargne Grand Est Europe and Natixis acted as Joint Mandated Lead Arrangers (MLA) for the financing in Golbey, and Raiffeisenlandesbank OÖ and IKB Deutsche Industriebank acted as MLAs for the financing in Bruck. The facilities will be drawn as capex is incurred, and repayment is scheduled and expected to commence approximately upon completion of each respective project with average maturity towards the end of 2030. Utilisations are subject to customary conditions precedent for such facilities. The debt financing of EUR 265 million is expected to increase Norske Skog's annual interest costs with approximately EUR 5 million annually once fully drawn.

Production of containerboard will commence during the fourth quarter of 2022 at the Bruck industrial site and during the fourth quarter of 2023 at the Golbey industrial site. 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.

Following first commercial sales for CEBINA at end of 2020, the work to qualify CEBINA in coatings, paints and adhesives has continued in the quarter. In October, Norske Skog announced that CEBINA has seen successful commercial entry into a new application for waterbased paints.

Entry into a new application area is a key milestone. In addition, it represents the first sales contract with regular volume delivery and an annual contract size of approximately NOK 500 000 with potential for further growth.

The construction of the CEBICO (bio composites) pilot production facility is ongoing and will be operational in fourth quarter of 2021. The pilot will be key in CEBICO production and for delivering larger qualification test volumes to potential customers.

Norske Skog continues to support Circa's efforts to develop the first-ofits-kind 1 000 tonnes Levoglucosenone (LGO) and Cyrene biochemical plant in France as part of the ReSolute project. The plant will provide technology verification and allow Circa to continue its biochemical growth journey. Extensive market and commercial work coupled with regulatory tailwinds continues to provide significant market opportunities.

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	Q3 2021	Q2 2021	Q3 2020	YTD 2021	YTD 2020

Total operating income	2 183	1 872	1 727	5 765	5 513
EBITDA	113	14	84	233	488
EBITDA margin (%)	5.2	0.8	4.9	4.0	8.9
Return on capital employed (%) (annualised)	-18.9	-11.1	-5.3	-12.2	4.1
Production (1 000 tonnes)	428	381	341	1 201	1 086
Deliveries (1 000 tonnes)	433	403	362	1 218	1 080
Production / capacity (%)	96	85	72	90	76

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 1.8 million tonnes.

Operating income increased from the previous quarter with higher sales volumes combined with higher sales prices.

Distribution costs increased from the previous quarter on an absolute level driven by higher deliveries, but only a modest increase on a per tonne basis driven mainly by increases in transportation costs. Cost of materials increased due to higher sales volumes, but also due to significantly higher energy prices in the quarter resulting in an increase on a per tonne basis. Employee benefit expenses were in line with the previous quarter but were slightly down on a per tonne basis due to higher deliveries.

The price increases for publication paper in the quarter were offset by increasing cost of materials but resulted overall in EBITDA increasing from the previous quarter.

Demand for standard newsprint in Europe decreased by 3% as of July 2021 compared to the same period last year. Magazine paper demand increased with super calendared paper increasing 1% and lightweight coated paper increasing 1%. (Source: Eurograph).

Capacity utilisation was 96% in the period, an increase from previous quarter of 85% which was impacted by some downtime due to temporary shortage of recovered paper.

PUBLICATION PAPER AUSTRALASIA

NOK MILLION	Q3 2021	Q2 2021	Q3 2020	YTD 2021	YTD 2020

Total operating income	426	482	447	1 397	1 580
EBITDA	0	7	-7	-2	119
EBITDA margin (%)	0.0	1.4	-1.6	-0.1	7.5
Return on capital employed (%) (annualised)	-41.0	-6.5	-57.1	-40.5	26.0
Production (1 000 tonnes)	62	79	75	230	238
Deliveries (1 000 tonnes)	68	87	79	246	246
Production / capacity (%)	87	69	69	77	73

The segment consists of Norske Skog's operations in Australasia with industrial sites in Australia and New Zealand. The annual production capacity is 0.3 million tonnes. With the Boyer mill the only domestic publication paper producer in the region.

Operating income decreased compared to previous quarter due to lower delivery volumes as a result of Tasman ceasing production, offset by a slight price increase mainly due to reduced exports.

Distribution costs were lower in the quarter on an absolute level but increased on a per tonne basis as transportation costs increased. Cost of materials decreased in the quarter due to lower sales volumes but increased significantly on a per tonne basis due to higher energy and

AUSTRALASIA AUSTRALASIA

TOTAL OPERATING INCOME EBITDA

raw material costs. Employee benefit expenses decreased, but increased on a per tonne basis due to lower sales volume.

EBITDA decreased slightly compared to the previous quarter.

Demand for newsprint in Australasia increased by 1% as of 30 September 2021, compared to the same period last year. (Source: official statistics).

Capacity utilisation was 87% in the period, an increase from the previous quarter which was impacted by low production at the Tasman mill in New Zealand.

OTHER ACTIVITIES

NOK MILLION	Q3 2021	Q2 2021	Q3 2020	YTD 2021	YTD 2020
Total operating income	61	36	50	157	136
EBITDA	-2	-4	-4	9	-18

Operating income in other activities mainly consist of non-paper related operations defined as Green Energy which includes pellets and biogas.

Other activities also include unallocated headquarter costs. The unallocated headquarter costs are estimated to be EBITDA negative by approximately NOK 35 million per annum but are not uniformly distributed throughout the quarters of the year.

CASH FLOW

Q3 2021	Q2 2021	Q3 2020	YTD 2021	YTD 2020

111	17	73	240	590
-22	-115	127	3	360
-129	-19	-15	-167	-42
-9	0	1	-16	-152
-42	-36	-32	-110	-149
-43	-18	-17	-74	-82
34	-19	-21	-2	-49
-99	-190	115	-126	476

-347	-159	-160	-695	-388
-24	-35	-57	-87	-161

Net cash flow from operating activities was negative NOK 99 million in the quarter.

The operating cash flow was negatively impacted by restructuring payments of NOK 129 million, mainly relating to employee redundancy

NORSKE SKOG – QUARTERLY REPORT - THIRD QUARTER 2021 (UNAUDITED)

payments at the Tasman mill in New Zealand. The restructuring payments were offset by the settlement of energy contracts with a positive impact of NOK 195 million (part of net cash flow from investing activities) in the quarter.

Other impacts on the net cash flow from operating activities related to negative impact from change in working capital in the quarter, largely driven by an increase in other receivables (mainly relating to accrual of CO2 compensation and CO2 allowances), and partly offset by an increase in trade and other payables.

Taxes paid in the third quarter relate to Golbey and Bruck.

Maintenance capex of NOK 24 million relates to ordinary maintenance in the quarter, a decrease from the second quarter. Remaining purchases of property, plant and equipment and intangible assets relate to investments in the waste-to-energy facility at the Bruck industrial site and the conversion projects at Bruck and Golbey.

BALANCE SHEET

NOK MILLION	30 SEP 2021	30 JUN 2021	31 DEC 2020	30 SEP 2020

Non-current assets	4 154	4 017	4 084	5 356
Cash and cash equivalents	1 163	1 324	980	1 093
Inventories, trade and other receivables and other current assets	2 664	2 854	2 723	2 862
Total assets	7 982	8 196	7 787	9 311
Equity	2 767	3 365	3 219	4 715
Non-current liabilities	3 259	2 846	2 496	2 650
Current liabilities	1 956	1 985	2 073	1 946
Net interest-bearing debt	1 052	779	725	628

Total assets decreased in the third quarter mainly due to a decrease in cash and cash equivalents and other current and non-current assets, partly offset by an increase in trade and other receivables, and property, plant and equipment.

In total, cash and cash equivalents decreased to NOK 1 163 million from NOK 1 324 million at previous quarter end. The decrease is a result of investments and net negative cash flow from operations in the quarter.

Non-current liabilities increased from previous quarter. Local debt to finance the waste-to-energy plant in Austria was drawn with EUR 37 million as of quarter end, compared to EUR 24 million as of the previous quarter.

Net interest-bearing debt increased from NOK 779 million to NOK 1 052 million in the quarter mainly due to a decrease in cash and cash equivalents following investing activities in the period.

OUTLOOK

Energy and raw material markets have become highly volatile and uncertain during the third quarter, and the situation continues into the fourth quarter. The unprecedented increases for the largest input factors do not show signs of being alleviated any time soon. The industry has seen significant capacity closures and capacity dedicated to packaging grades, which have positively impacted the market balance. Additional capacity closures have been announced for 2022 and 2023, including the conversion of Norske Skog Bruck PM3 (2022) and Golbey PM1 (2023). Operating rates are expected to remain high in the industry for the remainder of 2021 and into 2022.

The increased prices for energy, recovered paper and other input costs, coupled with significant industry closures and high operating rates resulted in publication paper price increases for all grades in Europe from 1 July 2021. However, the unprecedented cost increases are expected to continue and have necessitated further price increases in the fourth quarter of 2021 and into 2022.

The sales process for the Tasman mill has progressed through the quarter, with settlement for the sale of energy contracts, and the payment of employee redundancy costs. The complete settlement of the Tasman sale is expected to provide a net positive cash contribution of NZD 15-20 million. For Nature's Flame, a 60 000 tonnes capacity expansion study is underway. A sales process for the asset will likely be concluded in 2022.

With the final investment decisions taken for conversion to containerboard at both Bruck and Golbey, and financing secured for both projects, Norske Skog will continue preparatory site work at both locations as planned and undertake required commercial work going forward. Norske Skog will also focus on developing business opportunities for CEBINA and CEBICO. This means in particular to enter into international sales arrangements for CEBINA, and to complete the construction of the CEBICO (bio composites) pilot facility to be operational during the fourth quarter of 2021. The pilot facility will enable production and delivery of larger qualification test volumes to potential customers.

Norske Skog will also continue its focus on environmental issues and reducing its CO2 emissions, and will develop technology in cooperation with partners such as Ocean GeoLoop.

SKØYEN, 21 OCTOBER 2021 THE BOARD OF DIRECTORS OF NORSKE SKOG ASA

Chair Board member Board member CEO

John Chiang Arvid Grundekjøn Trine-Marie Hagen Sven Ombudstvedt

NORSKE SKOG – QUARTERLY REPORT - THIRD QUARTER 2021 (UNAUDITED)

INTERIM FINANCIAL STATEMENTS, THIRD QUARTER OF 2021 CONDENSED CONSOLIDATED INCOME STATEMENT

NOK MILLION	NOTE	Q3 2021	Q2 2021	Q3 2020	YTD 2021	YTD 2020

Operating revenue		2 532	2 182	2 174	6 868	6 771
Other operating income		110	164	25	354	365
Total operating income	5	2 642	2 346	2 199	7 222	7 136
Distribution costs		-307	-294	-268	-896	-847
Cost of materials		-1 615	-1 403	-1 243	-4 255	-3 742
Employee benefit expenses		-436	-444	-417	-1 295	-1 321
Other operating expenses		-173	-187	-198	-535	-637
Restructuring expenses		-17	-160	-12	-180	-29
Depreciation	4	-109	-105	-108	-318	-326
Impairments	4	0	0	0	0	-193
Derivatives and other fair value adjustments	7	-551	-29	16	-381	-106
Operating earnings		-565	-277	-31	-638	-63
Share of profit in associated companies	10	-4	-9	4	-13	-16
Financial items	6	-45	-79	-56	-123	-399
Profit/loss before income taxes		-614	-365	-82	-774	-478
Income taxes		12	10	-7	11	-44
Profit/loss for the period		-602	-355	-89	-763	-522

Basic earnings per share (NOK)		-6.38	-3.77	-0.94	-8.10	-5.53
Diluted earnings per share (NOK)		-6.38	-3.77	-0.94	-8.10	-5.53

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

NOK MILLION	Q3 2021	Q2 2021	Q3 2020	YTD 2021	YTD 2020
Profit/loss for the period	-602	-355	-89	-763	-522
Items that may be reclassified subsequently to profit or loss
Currency translation differences	3	43	35	-77	326
Tax expense on translation differences	0	0	0	0	-4
Reclassified translation differences upon divestment of foreign operations	0	0	0	0	-62
Other comprehensive income for the period	3	43	35	-77	260
Total comprehensive income for the period	-599	-312	-54	-840	-262

CONDENSED CONSOLIDATED BALANCE SHEET

NOK MILLION	NOTE	30 SEP 2021	30 JUN 2021	31 DEC 2020	30 SEP 2020
Deferred tax asset		0	0	0	137
Intangible assets	4	19	17	55	47
Property, plant and equipment	4	3 892	3 655	3 586	3 853
Investments in associated companies	10	113	117	43	65
Other non-current assets	7	131	228	401	1 253
Total non-current assets		4 154	4 017	4 084	5 356

Inventories		1 134	1 172	1 194	1 386
Trade and other receivables		1 317	1 180	1 288	1 095
Cash and cash equivalents		1 163	1 324	980	1 093
Other current assets	7	213	503	241	382
Total current assets		3 827	4 178	3 703	3 956
Total assets		7 982	8 196	7 787	9 311

Paid-in equity	8	8 898	8 898	8 510	8 510
Retained earnings		-6 132	-5 533	-5 292	-3 795
Total equity		2 767	3 365	3 219	4 715

Pension obligations		329	278	297	325
Deferred tax liability		259	278	308	336
Interest-bearing non-current liabilities	6	2 136	2 029	1 613	1 657
Other non-current liabilities	7	535	260	277	331
Total non-current liabilities		3 259	2 846	2 496	2 650

Interest-bearing current liabilities	6	79	74	92	65
Trade and other payables		1 698	1 633	1 728	1 651
Tax payable		14	43	54	53
Other current liabilities	7	165	235	199	177
Total current liabilities		1 956	1 985	2 073	1 946
Total liabilities		5 215	4 831	4 568	4 596
Total equity and liabilities		7 982	8 196	7 787	9 311

SKØYEN, 21 OCTOBER 2021 THE BOARD OF DIRECTORS OF NORSKE SKOG ASA

John Chiang Arvid Grundekjøn Trine-Marie Hagen Sven Ombudstvedt

Chair Board member Board member CEO

NORSKE SKOG – QUARTERLY REPORT - THIRD QUARTER 2021 (UNAUDITED)

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

NOK MILLION	Q3 2021	Q2 2021	Q3 2020	YTD 2021	YTD 2020
Cash generated from operations	2 494	2 094	2 108	7 117	7 363
Cash used in operations	-2 508	-2 230	-1 944	-7 059	-6 656
Cash flow from currency hedges and financial items	-12	-6	-4	-29	-71
Interest payments received	1	0	-2	2	5
Interest payments made	-31	-30	-26	-83	-82
Taxes paid	-43	-18	-17	-74	-82
Net cash flow from operating activities 1)	-99	-190	115	-126	476

Purchases of property, plant and equipment and intangible assets	-347	-159	-160	-695	-388
Sales of property, plant and equipment and intangible assets	9	1	-1	17	932
Purchase of shares in companies and other financial payments	-25	0	-7	-94	-77
Sales of shares in companies and other financial instruments	195	0	37	207	51
Net cash flow from investing activities	-168	-159	-131	-565	518

New loans raised	144	77	30	830	337
Repayments of loans	-36	-30	-169	-340	-735
Dividends paid	0	0	-248	0	-516
New equity	0	0	0	388	0
Net cash flow from financing activities	109	47	-387	878	-914
Foreign currency effects on cash and cash equivalents	-2	4	9	-4	43
Total change in cash and cash equivalents	-161	-298	-394	183	124

Cash and cash equivalents at start of period	1 324	1 622	1 487	980	970
Cash and cash equivalents at end of period	1 163	1 324	1 093	1 163	1 093


1) Reconciliation of net cash flow from operating activities
Profit/loss before income taxes	-614	-365	-82	-774	-478
Change in working capital	-22	-115	127	3	360
Change in restructuring provisions	-112	141	-3	13	-13
Depreciation and impairments	109	105	108	318	519
Derivatives and other fair value adjustments	589	16	-29	389	68
Gain and losses from divestment of business activities and PPE	-9	0	1	-16	-152
Net financial items without cash effect	7	52	19	26	266
Taxes paid	-43	-18	-17	-74	-82
Change in pension obligations and other employee benefits	-4	-9	-3	-14	-5
Adjustment for other items	0	4	-6	3	-6
Net cash flow from operating activities	-99	-190	115	-126	476

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN GROUP EQUITY

NOK MILLION	Paid-in equity	Other paid-in equity	Retained earnings	Total equity
Equity 1 January 2020	6 261	2 249	-3 018	5 493
Profit/loss for the period	0	0	-433	-433
Other comprehensive income for the period	0	0	225	225
Equity 30 June 2020	6 261	2 249	-3 494	5 017
Profit/loss for the period	0	0	-89	-89
Other comprehensive income for the period	0	0	35	35
Dividends paid	0	0	-248	-248
Equity 30 September 2020	6 261	2 249	-3 795	4 715
Profit/loss for the period	0	0	-1 363	-1 363
Other comprehensive income for the period	0	0	-134	-134
Equity 31 December 2020	6 261	2 249	-5 292	3 219
Profit/loss for the period	0	0	-161	-161
Other comprehensive income for the period	0	0	-80	-80
Increase share capital	388	0	0	388
Equity 30 June 2021	6 649	2 249	-5 533	3 365
Profit/loss for the period	0	0	-602	-602
Other comprehensive income for the period	0	0	3	3
Equity 30 September 2021	6 649	2 249	-6 132	2 767

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.

	Q3 2021	Q2 2021	30 SEP 2021	30 JUN 2021	31 DEC 2020
AUD	6.44	6.45	6.32	6.42	6.59
EUR	10.33	10.09	10.17	10.17	10.47
GBP	12.08	11.70	11.81	11.85	11.65
NZD	6.14	5.99	6.03	5.97	6.16
USD	8.76	8.37	8.78	8.56	8.53

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 2020. 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 2020, except for the adaptation of amended standards and new interpretations, which are mandatory from 1 January 2021. These changes are described in the consolidated financial statements for 2020.

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. Contracted prices/costs are reflected when applicable. Given that the actual impact of the Covid-19 situation on global economy and impact on future demand for publication paper is unclear there remains uncertainty and circumstances may require further impairment testing.

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. Norske Skog has one long-term financial energy contract in New Zealand. The longterm electricity prices in New Zealand are not directly observable in the market for the whole contract length. Price forecasts from acknowledged external sources are used in the estimation of 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 9 in the consolidated financial statements for 2020 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 2 in the consolidated financial statements for 2020 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. PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS

JAN-SEP 2021	PROPERTY, PLANT AND EQUIPMENT	RIGHT-OF-USE ASSETS	TOTAL PROPERTY PLANT AND EQUIPMENT	INTANGIBLE ASSETS
Carrying value at start of period	3 469	117	3 586	55
Additions*	691	11	702	29
Depreciation	-286	-27	-312	-6
Disposals	0	0	-1	-57
Currency translation differences	-80	-3	-83	-2
Carrying value at end of period	3 794	98	3 892	19

*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 SEP 2021	TOTAL PROPERTY PLANT AND EQUIPMENT	INTANGIBLE ASSETS
Publication paper Europe	3 567	3
Publication paper Australasia	247	2
Other activities	77	14
Total	3 892	19

5. 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 light weight 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 organization 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 organization are included in the operating segment publication paper Australasia. On 30 June 2021, the Tasman mill ceased production, thus the Boyer mill is the only remaining 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 Natures Flame is included in Green Energy under other activities.

Q3 2021	PUBLICATION PAPER EUROPE	PUBLICATION PAPER AUSTRALASIA	OTHER ACTIVITIES	ELIMINATIONS	NORSKE SKOG GROUP

Operating revenue	2 099	400	59	-26	2 532
Other operating income	84	26	2	-1	110
Total operating income	2 183	426	61	-27	2 642
Distribution costs	-252	-50	-6	0	-307
Cost of materials	-1 341	-260	-17	3	-1 615
Employee benefit expenses	-330	-81	-26	1	-436
Other operating expenses	-146	-36	-14	23	-173
EBITDA	113	0	-2	0	111
Restructuring expenses	-4	-13	0	0	-17
Depreciation	-96	-10	-4	0	-109
Derivatives and other fair value adjustments	-551	0	0	0	-551
Operating earnings	-537	-22	-5	0	-565
Share of operating revenue from external parties (%)	100	100	63		100

	PUBLICATION	PUBLICATION
Q2 2021	PAPER EUROPE	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

NORSKE SKOG QUARTERLY REPORT – THIRD QUARTER 2021 (UNAUDITED)

	PUBLICATION PAPER	PUBLICATION PAPER	OTHER		NORSKE
Q3 2020	EUROPE	AUSTRALASIA	ACTIVITIES	ELIMINATIONS	SKOG GROUP
Operating revenue	1 702	448	49	-26	2 174
Other operating income	25	-1	1	0	25
Total operating income	1 727	447	50	-26	2 199
Distribution costs	-201	-62	-5	0	-268
Cost of materials	-942	-286	-15	0	-1 243
Employee benefit expenses	-339	-62	-17	1	-417
Other operating expenses	-161	-45	-18	25	-198
EBITDA	84	-7	-4	0	73
Restructuring expenses	0	-12	0	0	-12
Depreciation	-93	-13	-3	0	-108
Impairments	0	0	0	0	0
Derivatives and other fair value adjustments	53	-36	0	0	16
Operating earnings	44	-68	-7	0	-31
Share of operating revenue from external parties (%)	100	100	51		100

YTD 2021	PUBLICATION PAPER EUROPE	PUBLICATION PAPER AUSTRALASIA	OTHER ACTIVITIES	ELIMINATIONS	NORSKE SKOG GROUP
Operating revenue	5 447	1 370	146	-94	6 868
Other operating income	318	27	11	-2	354
Total operating income	5 765	1 397	157	-97	7 222
Distribution costs	-707	-175	-14	0	-896
Cost of materials	-3 424	-830	-28	28	-4 255
Employee benefit expenses	-966	-272	-59	2	-1 295
Other operating expenses	-434	-121	-46	67	-535
EBITDA	233	-2	9	0	240
Restructuring expenses	-4	-173	-3	0	-180
Depreciation	-280	-29	-10	0	-318
Derivatives and other fair value adjustments	-313	-67	0	0	-381
Operating earnings	-364	-271	-4	0	-638
Share of operating revenue from external parties (%)	99	100	57		100

	PUBLICATION	PUBLICATION
YTD 2020	PAPER EUROPE	PAPER AUSTRALASIA	OTHER ACTIVITIES	ELIMINATIONS	NORSKE SKOG GROUP

Operating revenue	5 319	1 411	134	-93	6 771
Other operating income	194	169	2	0	365
Total operating income	5 513	1 580	136	-93	7 136
Distribution costs	-647	-185	-15	0	-847
Cost of materials	-2 862	-866	-28	13	-3 742
Employee benefit expenses	-1 019	-248	-56	3	-1 321
Other operating expenses	-497	-161	-55	77	-637
EBITDA	488	119	-18	0	590
Restructuring expenses	0	-28	-1	0	-29
Depreciation	-276	-42	-8	0	-326
Impairments	-122	-71	0	0	-193
Derivatives and other fair value adjustments	-36	-70	0	0	-106
Operating earnings	55	-91	-27	0	-63
Share of operating revenue from external parties (%)	100	100	45		100

NORSKE SKOG – QUARTERLY REPORT - THIRD QUARTER 2021 (UNAUDITED)

Q3 2021	Q2 2021	Q3 2020	YTD 2021	YTD 2020

24	23	24	75	74
37	13	26	82	62
61	36	50	157	136


-12	-5	-8	-9	-28
10	1	4	17	11
-2	-4	-4	9	-18

6. FINANCIAL ITEMS AND DEBT REPAYMENTS

FINANCIAL ITEMS

NOK MILLION	Q3 2021	Q2 2021	Q3 2020	YTD 2021	YTD 2020
Net interest expenses	-31	-31	-31	-90	-85
Currency gains/losses*	-6	-39	-19	37	-283
Other financial items	-8	-9	-6	-70	-30
Total financial items	-45	-79	-56	-123	-399

*Currency gains and losses on accounts receivable and accounts payable are reported as Operating revenue and Cost of materials respectively.

FINANCING

On 12 October Norske Skog announced that it had entered into debt facility agreements with an aggregate amount of EUR 265 million to finance its EUR 350 million investment in recycled containerboard conversion projects. See Note 12.

In the first quarter of 2021 Norske Skog issued 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. The proceeds were mainly used to refinance existing debt and for general corporate purposes.

In connection with refinancing in first quarter, Norske Skog repaid the outstanding amount of EUR 20 million on the EUR 31 million Revolving Credit Facility and entered into a new EUR 31 million Revolving Credit Facility agreements with revised terms and a tenor of five years.

The loan facility of EUR 54 million for the waste to energy plant is utilised incrementally as expenditures incur during the construction phase, after which it will be repaid in quarterly installments up until the final maturity date in 2028. The borrower under the facility is Norske Skog Bruck GmbH and Norske Skog ASA has provided a guarantee of EUR 20 million. As of 30 September 2021, the loan has been drawn by approximately EUR 37 million.

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 300 million at 31 December 2021, and NOK 400 million thereafter. 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

MATURITY	CURRENCY	INTEREST RATE	NOMINAL VALUE	AMOUNT OUTSTANDING 30 SEP 2021
March 2026	EUR	EURIBOR +5.50%	150	150

DEBT REPAYMENT SCHEDULE*

NOK MILLION	2021	2022	2023	2024	2025-
Bonds	0	0	0	0	1 525
Debt to credit institutions**	17	36	55	111	478
Total	17	36	55	111	2 003

*Not including items relating to IFRS 16.

**Includes full scheduled repayments for the EUR 54 million facility

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 18 million in debt repayment in Q4 2021. The financed amount represents a group of individual loans, which are settled individually at maturity of the accounts receivable.

New loans are initiated on a consecutive basis based on new accounts receivable 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 accounts receivable is derecognised when the customer pays it.

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

		ASSETS		LIABILITIES
30 SEP 2021	CURRENT	NON-CURRENT CURRENT		NON-CURRENT
Energy contracts and embedded derivatives in energy contracts (level 3)	134	0	24	276
Other derivatives and financial instruments carried at fair value (level 2)	0	0	3	0
Total	134	0	27	276

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. Although market prices for energy have increased in the short and the long end of the price curve compared to previous quarter, a higher contract price has a negative impact on the fair value of the contracts in the quarter.

Changes in the value of energy-/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 8 in the consolidated financial statements for 2020.

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 8 in the consolidated financial statements for 2020.

The valuation techniques used are described in Note 9 in the consolidated financial statement for 2020.

8. PRINCIPAL SHAREHOLDERS

	NUMBER OF SHARES	OWNERSHIP %
NS NORWAY HOLDING AS	40 396 681	42.85
J.P. MORGAN BANK LUXEMBOURG S.A.	2 867 700	3.04
The Bank of New York Mellon SA/NV	2 749 682	2.92
VERDIPAPIRFONDET FIRST GENERATOR	2 066 754	2.19
VERDIPAPIRFONDET HOLBERG NORGE	1 800 000	1.91
The Bank of New York Mellon SA/NV	1 477 540	1.57
VERDIPAPIRFONDET EIKA SPAR	1 445 456	1.53
INTERTRADE SHIPPING AS	1 430 000	1.52
RBC Investor services bank S.A.	1 361 111	1.44
The Bank of New York Mellon SA/NV	1 254 596	1.33
MP PENSJON PK	1 198 015	1.27
VERDIPAPIRFONDET EIKA NORGE	1 108 818	1.18
CLEARSTREAM BANKING S.A.	1 049 749	1.11
CARUCEL FINANCE AS	1 012 124	1.07
VERDIPAPIRFONDET FONDSFINANS NORGE	853 118	0.91
VERDIPAPIRFONDET NORDEA NORGE VERD	789 435	0.84
VERDIPAPIRFONDET FIRST GLOBALT	761 062	0.81
M25 INDUSTRIER AS	681 062	0.72
PERSHING SECURITIES LIMITED	680 282	0.72
Nordnet Bank AB	677 757	0.72
Other shareholders	28 603 763	30.34
Total	94 264 705	100.00

The data is extracted from VPS 21 October 2021. Whilst every reasonable effort is made to verify all data, VPS cannot guarantee the accuracy of the analysis.

9. THE NORSKE SKOG SHARE

	30 SEP 2021	30 JUN 2021	31 DEC 2020	30 SEP 2020
Share price (NOK)	37.10	34.90	38.70	26.95
Book value of equity per share (NOK)	29.35	35.70	39.01	57.15

In January 2021, Norske Skog ASA completed a private placement with a total transaction size of NOK 400 million. The private placement consisted of 11 764 705 new shares offered at a price of NOK 34 per share. The net proceeds from the issuance of the new shares will be used to finance the company's green growth projects.

On 5 February 2021 an extraordinary general meeting was held in Norske Skog ASA and resolved to issue 11 764 705 new shares. After the issuance Norske Skog ASA has 94 264 705 shares outstanding and the shareholding of NS Norway Holding is 42.85% of the shares in Norske Skog ASA.

10. INVESTMENTS IN ASSOCIATED COMPANIES

Investment in associated companies are accounted for in accordance with the equity method. The carrying value of associated companies are NOK 113 million at 30 September 2021.

At 30 September 2021 Norske Skog holds a 26% share of Circa Group AS, with a carrying value of NOK 98 million. Loss is included in the quarter with NOK 4 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.

11. RELATED PARTIES

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

There have not been any transactions with related parties in 2021.

12. EVENTS AFTER THE BALANCE SHEET DATE

On 12 October 2021 Norske Skog announced that it had entered into debt facility agreements with an aggregate amount of EUR 265 million to finance its EUR 350 million investment in recycled containerboard conversion project.

The facilities will be drawn as capex is incurred, and repayment is scheduled and expected to commence approximately upon completion of each respective project with average maturity towards the end of 2030. Utilisations are subject to customary conditions precedent for such facilities. The debt financing of EUR 265 million is expected to increase Norske Skog's annual interest costs with approximately EUR 5 million annually once fully drawn.

There have been no events after the balance sheet date with significant impact on the interim financial statements for the third quarter of 2021.

NORSKE SKOG – QUARTERLY REPORT - THIRD QUARTER 2021 (UNAUDITED)

13. HISTORICAL FIGURES

INCOME STATEMENT	Q3 2021	Q2 2021	Q1 2021	Q4 2020	Q3 2020
Total operating income	2 642	2 346	2 234	2 476	2 199
Variable costs	-1 923	-1 697	-1 532	-1 663	-1 511
Fixed costs	-608	-631	-591	-668	-615
EBITDA	111	17	112	146	73
Restructuring expenses	-17	-160	-3	-47	-12
Depreciation	-109	-105	-104	-112	-108
Impairments	0	0	0	-258	0
Derivatives and other fair value adjustment	-551	-29	199	-1 006	16
Operating earnings	-565	-277	204	-1 276	-31
Share of profit in associated companies	-4	-9	0	6	4
Financial items	-45	-79	1	50	-56
Profit/loss before income taxes	-614	-365	205	-1 221	-82
Income taxes	12	10	-11	-142	-7
Profit/loss for the period	-602	-355	194	-1 363	-89

SEGMENT INFORMATION	Q3 2021	Q2 2021	Q1 2021	Q4 2020	Q3 2020
Publication paper Europe
Total operating income	2 183	1 872	1 711	1 899	1 727
EBITDA	113	14	106	171	84
Deliveries (1 000 tonnes)	433	403	382	403	362
Publication paper Australasia
Total operating income	426	482	489	526	447
EBITDA	0	7	-8	-13	-7
Deliveries (1 000 tonnes)	68	87	90	97	79
Other activities
Total operating income	61	36	60	68	50
EBITDA	-2	-4	14	-12	-4

BALANCE SHEET	30 SEP 2021	30 JUN 2021	31 MAR 2021	31 DEC 2020	30 SEP 2020
Total non-current assets	4 154	4 017	4 319	4 084	5 356
Inventories	1 134	1 172	1 184	1 194	1 386
Trade and other receivables	1 317	1 180	954	1 288	1 095
Cash and cash equivalents	1 163	1 324	1 622	980	1 093
Other current assets	213	503	482	241	382
Total current assets	3 827	4 178	4 243	3 703	3 956
Total assets	7 982	8 196	8 562	7 787	9 311
Total equity	2 767	3 365	3 677	3 219	4 715
Total non-current liabilities	3 259	2 846	2 834	2 496	2 650
Trade and other payables	1 698	1 633	1 528	1 728	1 651
Other current liabilities	258	351	523	345	295
Total current liabilities	1 956	1 985	2 051	2 073	1 946
Total liabilities	5 215	4 831	4 884	4 568	4 596
Total equity and liabilities	7 982	8 196	8 562	7 787	9 311

NORSKE SKOG QUARTERLY REPORT – THIRD QUARTER 2021 (UNAUDITED)

CASH FLOW	Q3 2021	Q2 2021	Q1 2021	Q4 2020	Q3 2020
Reconciliation of net cash flow from operating activities
EBITDA	111	17	112	146	73
Change in working capital	-22	-115	141	33	127
Payments made relating to restructuring activities	-129	-19	-19	-27	-15
Gain and losses from divestment	-9	0	-7	-1	1
Cash flow from net financial items	-42	-36	-32	-31	-32
Taxes paid	-43	-18	-13	-20	-17
Other	34	-19	-18	-27	-21
Net cash flow from operating activities	-99	-190	163	73	115

Purchases of property, plant and equipment and intangible assets	-347	-159	-189	-244	-160
Net divestments	179	0	-49	27	29
Net cash flow from investing activities	-168	-159	-238	-217	-131
Net cash flow from financing activities	109	47	723	58	-387

Foreign currency effects on cash and cash equivalents	-2	4	-6	-28	9
Total change in cash and cash equivalents	-161	-298	642	-113	-394

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	Q3 2021	Q2 2021	Q3 2020	YTD 2021	YTD 2020

Operating earnings	-565	-277	-31	-638	-63
Restructuring expenses	17	160	12	180	29
Depreciation	109	105	108	318	326
Impairments	0	0	0	0	193
Derivatives and other fair value adjustments	551	29	-16	381	106
EBITDA	111	17	73	240	590

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

NOK MILLION	Q3 2021	Q2 2021	Q3 2020	YTD 2021	YTD 2020
EBITDA	111	17	73	240	590
Total operating income	2 642	2 346	2 199	7 222	7 136
EBITDA margin	4.2 %	0.7 %	3.3 %	3.3 %	8.3 %

Variable costs: Distribution costs + cost of materials

NOK MILLION	Q3 2021	Q2 2021	Q3 2020	YTD 2021	YTD 2020
Distribution costs	307	294	268	896	847
Cost of materials	1 615	1 403	1 243	4 255	3 742
Variable costs	1 923	1 697	1 511	5 151	4 589

Fixed costs: Employee benefit expenses + other operating expenses.

NOK MILLION	Q3 2021	Q2 2021	Q3 2020	YTD 2021	YTD 2020
Employee benefit expenses	436	444	417	1 295	1 321
Other operating expenses	173	187	198	535	637
Fixed costs	608	631	615	1 830	1 957

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	Q3 2021	Q2 2021	Q3 2020	YTD 2021	YTD 2020

EBITDA	111	17	73	240	590
Capital expenditure	347	159	160	695	388
Average capital employed	4 527	4 315	4 734	4 529	5 200
Return on capital employed (annualised)	-20.8 %	-13.1 %	-7.3 %	-13.4 %	5.2 %

NOK MILLION	30 SEP 2021	30 JUN 2021	31 DEC 2020	30 SEP 2020
Intangible assets	19	17	55	47
Tangible assets	3 892	3 655	3 586	3 853
Inventory	1 134	1 172	1 194	1 386
Trade and other receivables	1 317	1 180	1 288	1 095
Trade and other payables	-1 698	-1 633	-1 728	-1 651
Capital employed	4 663	4 390	4 395	4 730

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 SEP 2021	30 JUN 2021	31 DEC 2020	30 SEP 2020
Interest-bearing non-current liabilities	2 136	2 029	1 613	1 657
Interest-bearing current liabilities	79	74	92	65
Cash and cash equivalents	-1 163	-1 324	-980	-1 093
Net interest-bearing debt	1 052	779	725	628

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).

Sustainable and innovative industry ENTERING

Leading publication paper producer with five industrial sites globally
Ongoing transition into higher growth and higher value markets
Becoming a leading independent European recycled containerboard company in 2023
Packaging market growth and margin outlook strengthened since announcement
High return waste-to-energy project improving green energy mix in Q2 2022
Promising biochemicals and materials projects with CEBINA, CEBICO and Circa
Industrial sites portfolio provide foundation for further industrial development

1) Norske Skog is the largest shareholder with ~26% ownership position in Circa; 2) Installed capacity for biofuel and waste from recycled paper of 230 MW

Third quarter in brief

Considerable price increases for all product grades in Q3 2021 and into Q4 2021

Publication paper market tightening following significant capacity closures over past 18 months, further closures announced for 2022-23
Further price increases required both in Q4 2021 and Q1 2022 to compensate for continued increases in energy and raw material prices

EBITDA of NOK 111m in the quarter

EBITDA improvement from previous quarter, but margins remain at low and unsustainable levels
Significant negative impact from energy and raw material costs

Tasman sales process

Sale of energy contract and employee redundancy payments settled in the quarter
Net positive cash impact in the quarter of NOK 70 million

Entered into credit facilities for conversion projects following end of quarter

▪ Attractive terms for EUR 265 million debt financing with average maturity towards the end of 2030

Margins impacted by volatile and uncertain cost environment

Segment financials for Q3 2021

Utilisation of 96% (equivalent to full utilisation)
Realised prices in the quarter up ~15% to previous quarter
Significant increase in raw material prices (energy and recovered paper)
Utilisation of 87% (Tasman no longer part of paper capacity)
Tasman closed on 30 June 2021
Boyer is the only domestic publication paper supplier

Western European publication paper market tightening as capacity closures surpass COVID-19 demand loss

Price increases in Q3 2021 and into Q4 2021, with significant further increases required and expected

Energy and fibre costs squeezing industry margins to unsustainable levels

On schedule for start-up in six months of +400 GWh sustainable energy production

Waste-to-energy plant with proven technology and turnkey installation contract from Valmet
On time and on budget for start-up in Q2 2022
Invested EUR 55m to date of total EUR 72m investment (EUR 17m remains)
Drawn EUR 38m to date of EUR 54m loan facility (EUR 16m remains)
Significant positive environmental impact by diverting 160k tonnes of RDF¹ from landfills
Replace ~0.7 TWh of gas consumption and reduce CO² emissions with 150k tonnes

9 1) Refuse-derived fuel (RDF) is a fuel produced from various types of waste such as municipal solid waste (MSW), industrial waste or commercial waste; 2) Based on historical and normalised energy prices

Industry low CO² footprint enabling annual CO² emission allowance surplus

Net surplus 2021 expected at ~200k allowances, however additional ~60k allowances purchased through the year and no allowances sold
Indication to receive gross ~420k allowances annually in period 2021-2025. Annual fossil CO² emissions of ~220k tonnes (prior to waste-toenergy plant)
Waste-to-energy plant at Bruck will reduce CO² footprint with 150k tonnes annually, start Q2 2022
Allowance sale income booked quarterly based on annual expected surplus, but cash proceeds received upon sale
Cost compensation booked quarterly, cash proceeds received the year after booking

Full steam ahead into the containerboard market

Containerboard projects in progress Site preparations and equipment orders underway

Invested EUR ~20m as of Q3 2021 Project investment of EUR 350m (large share on contract)

Expected EBITDA of EUR 70-80m Based on historical trend prices and full utilisation in 2025-26

EUR 265m debt financing

ECA¹ -backed debt financing of ~75% of investment amount

Q4 2022 first production

Stepwise commercial introduction

760 000 tonnes

Recycled containerboard production capacity

11 1) ECA = Export Credit Agency

Becoming a leading independent supplier of recycled containerboard

Norske Skog Golbey – France

Norske Skog Bruck – Austria

PM1 (FID completed)

235k tonnes newsprint capacity ▪ Convert to 550k tonnes containerboard
Start-up in Q4 2023
Capex estimate of EUR ~250m
PM2 (future conversion candidate)
330k tonnes newsprint capacity
Ongoing production during PM1 conversion
Strong candidate for future conversion ▪ Feasibility studies concluded

PM3 (FID completed)

125k tonnes newsprint capacity
Convert to 210k tonnes containerboard
Start-up in Q4 2022 ▪ Capex estimate of EUR ~100m
PM4 (future conversion candidate)
265k tonnes LWC magazine capacity
Ongoing production during PM3 conversion
Strong candidate for future conversion
Feasibility studies concluded

Capacity, million tonnes Top recycled containerboard suppliers in Europe (includes announced capacity)

Norske Skog will enter the large, growing and established recycled containerboard market in Q4 2022

Three main segments of fibre-based packaging products	End-product examples	Focus on recycled containerboard
Containerboard Regional and bulk commodity product		Weight range: 90-160g per sqm Fibre: 100% recovered fibre ▪ Lightweight and strong Use: Liner in corrugated sheets fluting and testliner board
Cartonboard		▪ Inevitably circular from 100% recycled fibre Weight range: 70-160g per sqm Fibre: 100% recovered fibre ▪ Supporting e-commerce Use: Fluting in corrugated sheets with sustainable packaging
Other packaging paper products		Well-suited machines for light-weight containerboard ▪ Replacing plastic where and when possible Publication paper experience highly relevant Fast growing market in need of additional capacity

Recent capacity additions absorbed by the market as containerboard prices continue to increase

16 Source: RISI, company press releases

Circa sees strong headwinds from volatile global markets, but company potential remains intact

Capex for Circa's ReSolute demonstration plant up from EUR 32m to EUR 50-55m and 6 months delay driven by unprecedented increase in raw material prices
Circa will work to remain fully financed on capital raised by discussing with suppliers, optimising scope, exploring vendor financing and grant opportunities

Promising market opportunity remains intact

Patented process for scale production of high-value biochemicals
Process verified through 15 years of research and five pilot plants
Core product, Cyrene, is a high-performance sustainable alternative to toxic solvents
LoI¹ with Merck KGaA and direct discussions with brand owners regarding Cyrene
Increasing regulatory restrictions for use of fossil and harmful solvents
Support from the EU through a EUR ~12m grant under Horizon 2020

Norske Skog holds ~26% and will remain a long-term partner and shareholder

17 1) LoI = Letter of Intent

CEBINA enters a new product segment with first commercial sales for use in water-based paints

First commercial sales in Q4 2020 for epoxy floors
Recently entered into water-based paints as a new commercial application area
Contract encompasses regular volume sales at an annual size of NOK ~500 000 with potential for further growth
Demand currently within existing capacity of 100-500 tonnes depending on grade
Several commercial discussions ongoing and potential for entry into international sales agreements
Capacity expansions will be considered depending on demand development
Potential expansions will be modular and utilise existing facilities and infrastructure

Reducing the environmental impact is at the forefront of all business decisions

✓ Industry low CO² intensity under the EU ETS² in 2020
✓ New energy efficiency initiatives being introduced in 2021³
✓ Waste-to-energy boiler reducing CO² footprint with 150 000 tonnes from H1 2022
✓ Reduced electricity consumption and steam from new biomass boiler in Golbey following conversion project
✓ Detailed 2020 CSR report issued applying the Global Reporting Initiative Guidelines

19 1) Scope 1 includes direct emissions from stationary fuel combustion, transportation and mobile sources. Scope 2 includes indirect emissions from steam and power imports; 2) ETS = Emission Trading Scheme, Norske Skog is a net receiver of carbon emission allowances, indicating that Norske Skog is among the top 10% of producers employing the Best Available Techniques from a sustainability and environmental perspective; 3) The NEXT and Therminator energy efficiency projects announced at the Norske Skog Saugbrugs mill in March 2020 came on stream in 2021 and further improved the energy efficiency of Norske Skog, the projects are supported by the NOx Fund and Enova

Outlook

Publication paper markets

Improving operating rates in the industry
Considerable paper price increases in H2 2021 and into 2022
Continued high prices for energy, recycled fibre and other input factors
Remain a reliable supplier of all publication paper grades

Strategic shift into new markets

Enter into international sales arrangements for CEBINA in Q4 2021
Semi-industrial CEBICO pilot of 300 tonnes starting in Q4 2021
Bruck waste-to-energy facility start-up Q2 2022
First containerboard production to start in Q4 2022

CMD 25 November 09:00 – 12:00

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: [email protected] Email: [email protected]

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.

Press release

Improved sales prices partly offset by higher variable cost

Norske Skog's EBITDA in the third quarter of 2021 was NOK 111 million, an increase from NOK 17 million in the second quarter of 2021. Sales price increases in the quarter were offset by unprecedented increases in raw material costs, in particular energy. The utilization rate was very high due to a tightened market for publication paper following significant capacity closures and post Covid-19 demand recovery across all grades. Following the quarter, Norske Skog successfully financed the EUR 350 million containerboard conversion investment with debt facilities of EUR 265 million.

"The substantial capacity closures have eliminated the imbalance in both the newsprint and magazine paper markets. There have been substantial price hikes in the European markets during the third quarter caused by the unprecedented volatile energy and raw material costs situation currently experienced in Europe. These cost increases are expected to continue and may necessitate further price increases in the fourth quarter of 2021 and into 2022," says Sven Ombudstvedt, CEO of Norske Skog.

Cash flow from operations was NOK -99 million in the quarter compared to NOK -190 million in the previous quarter, negatively impacted by employee redundancy payments in the quarter of NOK 129 million at the Tasman mill in New Zealand. Operating earnings in the third quarter of 2021 were NOK -565 million compared to operating earnings in the second quarter of 2021 of NOK -277 million. The quarter was negatively affected by non-cash changes in fair value of energy contracts in Norway amounting to NOK -551 million. Net loss in the quarter was NOK 602 million compared to a net loss of NOK 355 million in the previous quarter. Net interest-bearing debt was NOK 1 052 million at the end of the third quarter, with an equity ratio of 35%.

Status projects

The final investment decisions to convert one newsprint machine both at Golbey and Bruck will add 760 000 tonnes of cost-competitive and low-emission containerboard capacity. The containerboard production will be fully based on recycled fibre, and will use green energy generated from the construction of a new waste-to-energy plant at the Bruck industrial site and a new biomass plant at the Golbey industrial site. Following the quarter, Norske Skog entered into debt facility agreements with an aggregate amount of EUR 265 million to finance the EUR 350 million investment into the recycled containerboard projects. The commercial terms are attractive and support the highly competitive profile of the containerboard projects.

"Packaging production will become a vital part of Norske Skog's future business. The conversion of the Bruck and Golbey newsprint machines into packaging will further diversify our asset base and create new long-term revenue streams from 2023. The machine conversions and energy plants will increase the value of the Bruck and Golbey industrial sites, and we will shortly be able to both serve publication paper and packaging markets in a sustainable and profitable manner. Our other fibre and energy projects are progressing according to plan, and will contribute to a long-term sustainable industrial platform," says Norske Skog's CEO Sven Ombudstvedt.

Norske Skog actively worksto realise value from the industrial sites by developing existing infrastructure and industry competence. Last week, Norske Skog announced that CEBINA has accomplished successful commercial entry into a new application for water-based paints.

The continued development of CEBICO (bio composites) also progressed well in the quarter. The installation of a NOK 25 million extruder, enabling a significant increase in the ability and quality of testing with potential customers, will be completed in the fourth quarter of 2021.

Norske Skog ASA

Sjølyst plass 2 P.O. Box 294 Skøyen, 0213 Oslo Norway www.norskeskog.com twitter: @Norske_Skog Through the partnership with Ocean GeoLoop at Norske Skog Skogn and Borg CO2 at Norske Skog Saugbrugs, Norske Skog aims to pursue the opportunity to become CO2 net negative, and to explore economically viable models for utilisation of biogenic CO2.

Key figures, third quarter of 2021

NOK million (unless otherwise stated)	Q3 2021	Q2 2021	Q3 2020	YTD 2021	YTD 2020
Income statement
Total operating income	2 642	2 346	2 199	7 222	7 136
EBITDA	111	17	73	240	590
Operating earnings	-565	-277	-31	-638	-63
Profit/loss for the period	-602	-355	-89	-763	-522
Cash flow
Net cash flow from operating activities	-99	-190	115	-126	476
Net cash flow from investing activities	-168	-159	-131	-565	518
Operating margin and profitabilty (%)
EBITDA margin	4.2	0.7	3.3	3.3	8.3
Return on capital employed (annualised)	-20.8	-13.1	-7.3	-13.4	5.2
Capacity utilisation (Production / capacity %)	95	82	71	87	78

Segment information

Total annual publication paper production capacity for the group is 2.1 million tonnes, with 1.8 million tonnes in Europe and 0.3 million tonnes in Australasia. In addition, Nature's Flame (New Zealand) has a wood pellets production capacity of 90 000 tonnes.

Europe

Operating revenue increased from the previous quarter with both higher sales volumes and sales prices. Price increases have been driven by unprecedented pan-European increases in energy and other raw material costs, as well as an increasingly tigher publication paper market following substantial capacity closures and demand recovery. Variable cost per tonne increased in the quarter due to significantly higher energy prices and cost of other raw materials. Fixed costs per tonne decreased slightly due to higher deliveries. According to Eurograph, demand for standard newsprint in Europe decreased by 3% through July compared to the same period in 2020. Both SC magazine and LWC paper demand increased by around 1% through July compared to the same period last year. Capacity utilisation was 96% in the quarter, up from 85% in the previous quarter.

Australasia

Operating income decreased compared to previous quarter due to lower delivery volumes as a result of Tasman ceasing paper production, but was somewhat offset by a slight price increase mainly due to reduced exports. Variable costs per tonne were higher compared to the previous quarter because of higher energy and raw materials costs. Employee benefit expenses were largely unchanged but increased on a per tonne basis due to lower sales volume. According to official trade statistics, demand for newsprint in the third quarter in Australasia increased by 1% compared to the same period in 2020. Capacity utilisation was 87% in the period, significantly up from 69% in the previous quarter, due to the cessation of paper production at Tasman.

Outlook

Energy and raw material markets have become highly volatile and uncertain during the third quarter, and the situation continues into the fourth quarter. The unprecedented increases for the largest input factors do not show signs of being alleviated any time soon. The industry has seen significant capacity closures and capacity dedicated to packaging grades, which have positively impacted the market balance. Additional capacity closures have been announced for 2022 and 2023, including the conversion of Norske Skog's Bruck PM3 (2022) and Golbey PM1 (2023). Operating rates are expected to remain high in the industry for the remainder of 2021 and into 2022.

About Norske Skog

Norske Skog is a world leading producer of publication paper with strong market positions and customer relations in Europe and Australasia. The Norske Skog Group operates four mills in Europe, two of which will produce recycled containerboard following ongoing conversion projects. In addition, the Group operates one paper mill in Australia and a wood pellets facility in New Zealand. Norske Skog aims to further diversify its operations and continue its transformation into a growing and high-margin business through a range of promising energy and fibre development projects. The Group has approximately 2 150 employees , is headquartered in Norway and listed on the Oslo Stock Exchange under the ticker NSKOG.

Presentation and quarterly material

The company will not hold a live presentation, but will arrange a webinar at 08:30 CEST for pre-registered participants. The presentation, the quarterly financial statements and the press releases are available on www.norskeskog.com and published on www.newsweb.no under the ticker NSKOG. If you want to receive future Norske Skog press releases, please subscribe through the website of the Oslo Stock Exchange www.newsweb.no.

Norske Skog Communications and Public Affairs

For further information: Norske Skog media: Vice President Communication and Public Affairs Carsten Dybevig Email: [email protected] Mob: +47 917 63 117

Norske Skog financial markets: Investor Relation Manager Even Lund Email: [email protected] Mob: +47 906 12 919

Pressemelding

Bedre salgspriser delvis motvirket av høyere variable kostnader

Norske Skogs EBITDA i tredje kvartal 2021 var NOK 111 millioner, en oppgang fra NOK 17 millioner i andre kvartal 2021. Salgsprisøkninger i kvartalet ble motvirket av rekordhøye økninger i råvarekostnader, og da særlig energi. Kapasitetsutnyttelsen var svært høy på grunn av et stramt marked for publikasjonspapir etter betydelige kapasitetsstengninger og gjenvunnen etterspørsel for samtlige papirkvaliteter etter Covid-19. Etter kvartalet har Norske Skog inngått låneavtaler på til sammen EUR 265 millioner for finansiering av de to europeiske emballasjeprosjektene med en samlet investeringsramme på EUR 350 millioner.

- De betydelige kapasitetsstengningene har eliminert ubalansen i markedene for både avis- og magasinpapir. Vi forventer derfor en betydelig prisoppgang i løpet av andre halvår av 2021. Det har vært betydelige prisstigninger i de europeiske markedene i løpet av tredje kvartal forårsaket av en eksepsjonell situasjon med volatile energi- og råvarekostnader i Europa. Disse kostnadsøkningene forventes å fortsette og kan nødvendiggjøre ytterligere prisøkninger i fjerde kvartal 2021 og inn i 2022, sier Sven Ombudstvedt, konsernsjef i Norske Skog.

Kontantstrøm fra driften var NOK -99 millioner i kvartalet sammenlignet med NOK -190 millioner kroner i forrige kvartal, og var i sterk grad påvirket av utbetalinger på NOK 129 millioner til ansatte hovedsaklig i forbindelse med stengningen av Tasmanfabrikken på New-Zealand. Driftsresultatet i tredje kvartal 2021 var på NOK -565 millioner sammenlignet med et driftsresultat på NOK -277 millioner i andre kvartal 2021. Kvartalet ble negativt påvirket av endringer, uten kontanteffekter, i verdifastsettelse av energikontrakter i Norge på NOK -551 millioner. Underskuddet i kvartalet var NOK 602 millioner mot et underskudd på NOK 355 millioner i forrige kvartal. Netto rentebærende gjeld var NOK 1 052 millioner ved utgangen av tredje kvartal, med en egenkapitalandel på 35%.

Status prosjekter

Den endelige investeringsbeslutningen for konvertering av avispapirmaskiner ved både Bruck og Golbey vil legge til 760 000 tonn med konkurransedyktig, lavkostnads- og lavutslipps emballasjekapasitet. Emballasjeproduksjonen vil være fullt ut basert på resirkulert fiber og bruke grønn energi generert fra et nytt forbrenningsanlegg for avfall ved Bruckfabrikken og fra et nytt biomasseanlegg på fabrikkområdet i Golbey. Etter kvartalet har Norske Skog inngått låneavtaler på tilsammen EUR 265 millioner til finansiering av de to europeiske emballasjeprosjektene med et samlet investeringsbehov på EUR 350 millioner. Lånebetingelsene er attraktive og støtter den konkurransedyktige profilen til emballasjeprosjektene.

- Emballasjevirksomheten vil bli en betydelig del av Norske Skogs virksomhet fremover. Konverteringene av avispapirmaskinene ved Bruck og Golbey til emballasje vil diversifisere anleggsporteføljen vår ytterligere og skape nye langsiktige inntektsstrømmer fra 2023. Maskinombyggingene og energianleggene vil øke verdien på industriområdene til Bruck og Golbey, og om kort tid vil majoriteten av våre fabrikker kunne betjene både publikasjonspapir- og emballasjemarkeder på en bærekraftig og lønnsom måte. Våre andre fiber- og energiprosjekter utvikler seg som planlagt, og vil bidra til en langsiktig, bærekraftig industriell plattform,sier Norske Skogs konsernsjef Sven Ombudstvedt.

Norske Skog jobber aktivt for å realisere verdier fra industrianleggene ved å utvikle eksisterende infrastruktur og bransjekompetanse. Nylig kunngjorde Norske Skog at CEBINA har oppnådd vellykkede salg av en ny applikasjon for vannbasert maling.

Arbeidet med å utvikle biokompositter (CEBICO) viste god fremdrift i kvartalet. Investeringen i en ekstruder på NOK 25 millioner, som muliggjør en omfattende økning i testkapasitet og -kvalitet for potensielle kunder, vil bli fullført i fjerde kvartal 2021.

Norske Skog ASA

Sjølyst plass 2 P.O. Box 294 Skøyen, 0213 Oslo Norway www.norskeskog.com twitter: @Norske_Skog Gjennom partnerskapet med Ocean GeoLoop på Skogn og Borg CO2 på Saugbrugs, har Norske Skog som mål å utnytte mulighetene til å bli CO2 netto negative, samt å utforske økonomisk levedyktige metoder for bruk av biogent CO2.

Nøkkeltall, tredje kvartal 2021

NOK millioner (om ikke annet opplyst)	Q3 2021	Q2 2021	Q3 2020	YTD 2021	YTD 2020
Resultatregnskap
Totale inntekter	2 642	2 346	2 199	7 222	7 136
EBITDA	111	17	73	240	590
Driftsresultat	-565	-277	-31	-638	-63
Resultat for perioden	-602	-355	-89	-763	-522

Kontantstrøm
Netto kontantstrøm fra operasjonelle aktiviteter	-99	-190	115	-126	476
Netto kontantstrøm fra investeringsaktiviteter	-168	-159	-131	-565	518

Driftsmargin og lønnsomhet (%)
EBITDA margin	4.2	0.7	3.3	3.3	8.3
Avkastning på investert kapital (annualisert)	-20.8	-13.1	-7.3	-13.4	5.2

Kapasitetsutnyttelse (produksjon/kapasitet %)	95	82	71	87	78

Segmentinformasjon

Samlet årlig produksjonskapasitet for publikasjonspapir for konsernet er 2,1 millioner tonn. I Europa er konsernets kapasitet 1,8 millioner tonn, mens i Australasia er kapasiteten 0,3 millioner tonn. I tillegg har Nature's Flame (New Zealand) en trepelletskapasitet på 90 000 tonn.

Europa

Driftsinntektene økte fra forrige kvartal som følge av høyere salgsvolum og salgspriser. Prisøkninger har blitt drevet av en rekordhøy økning i energi- og andre råvarekostnader i hele Europa, samt et stadig strammere marked for publikasjonspapir etter betydelige kapasitetsstengninger og etterspørselsøkning. Variabel kostnad per tonn økte i kvartalet på grunn av betydelig høyere energipriser og andre råvarekostnader. Faste kostnader per tonn gikk noe ned på grunn av høyere leveranser. Ifølge Eurograph falt etterspørselen etter standard avispapir i Europa med 3% til og med juli sammenlignet med samme periode i 2020. Etterspørselen etter superkalandrert magasinpapir (SC) og LWC magasinpapir økte med rundt 1% til og med juli sammenlignet med samme periode i fjor. Kapasitetsutnyttelsen var 96% i kvartalet, opp fra 85% i forrige kvartal.

Australasia

Driftsinntektene gikk ned sammenlignet med forrige kvartal på grunn av lavere leveranser, som følge av at Tasman stengte ned papirproduksjonen, men ble noe motvirket av en liten prisøkning, hovedsakelig på grunn av redusert eksport. De variable kostnadene per tonn var høyere sammenlignet med forrige kvartal på grunn av høyere energiog råvarekostnader. Lønnskostnader var stort sett uendret, men økte per tonn grunnet lavere salgsvolum. I følge offisiell handelsstatistikk økte etterspørselen etter avispapir i tredje kvartal i Australasia med 1% sammenlignet med samme periode i 2020. Kapasitetsutnyttelsen var 87% i perioden, betydelig opp fra 69% i forrige kvartal, på grunn av produksjonsstengningen på Tasman.

Utsikter

Energi- og råvaremarkedene har blitt svært volatile og usikre i løpet av tredje kvartal, og situasjonen ser ut til å ville fortsette gjennom fjerde kvartal. Den rekordhøye økningen for de største innsatsfaktorene viser ikke tegn på forbedringer. Markedsbalansen er påvirket positivt av betydelige kapasitetsstengninger og kapasitet dedikert til emballasjekvaliteter. Ytterligere kapasitetsstengninger er kunngjort for 2022 og 2023, inkludert konverteringen av Norske Skogs Bruck PM3 (2022) og Golbey PM1 (2023). Kapasitetsutnyttelsen forventes å forbli høye i industrien resten av 2021 og inn i 2022.

De økte prisene på energi, returpapir og andre råvarekostnader, kombinert med betydelige stengninger i industrien samt høy kapasitetsutnyttelse resulterte i prisøkninger for publikasjonspapir innen alle produktkvaliteter i Europa fra 1. juli 2021. Det rekordhøye kostnadsnivået forventes imidlertid å fortsette og har nødvendiggjort ytterligere prisøkninger i fjerde kvartal 2021 og i 2022.

Salgsprosessen for Tasman har fortsatt gjennom kvartalet med blant annet oppgjør for salg av energikontrakter og utbetaling av ansattes sluttoppgjør. Avviklingen av Tasman er samlet sett forventet å gi et netto positivt kontantbidrag på NZD 15-20 millioner. Nature's Flame gjennomfører nå en 60 000 tonn kapasitetsutvidelsesstudie. En salgsprosess Nature's Flame vil trolig bli gjennomført i løpet av 2022.

Med både endelige investeringsbeslutninger og gjennomført lånefinansiering for emballasjekonverteringene ved Bruck og Golbey, vil Norske Skog fortsette byggearbeidene ved begge fabrikker som planlagt og gjennomføre nødvendige kommersielle markedsforberedelser fremover. Norske Skog vil også fokusere på å utvikle forretningsmuligheter for CEBINA og CEBICO. Dette betyr helt konkret å inngå internasjonale salgsavtalerfor CEBINA, samt å fullføre byggingen av pilotanlegg for biokompositter (CEBICO) som vil være i drift i løpet av fjerde kvartal 2021. Pilotanlegget vil muliggjøre produksjon og leveranser av større testvolumer til potensielle kunder. Norske Skog vil også fortsette arbeidet med miljørelaterte prosesser, som reduksjon i CO2-utslipp og utvikling av teknologi i samarbeid med blant annet Ocean GeoLoop og Borg CO2.

Om Norske Skog

Norske Skog er en verdensledende produsent av publikasjonspapir med sterke markedsposisjoner og kundeforhold i Europa og Australasia. Norske Skog konsernet driver fire fabrikker i Europa, hvorav to vil produsere resirkulert emballasje etter gjennomføringen av de planlagte konverteringsprosjektene. I tillegg driver konsernet en papirfabrikk i Australia og et trepelletsanlegg på New-Zealand. Norske Skog tar sikte på å diversifisere virksomheten ytterligere og fortsette omstillingen til en voksende og høy-margins virksomhet gjennom en rekke spennende energiog fiberprosjekter. Konsernet har cirka 2.150 ansatte, hovedkontor i Norge og er notert på Oslo Børs under tickeren NSKOG.

Presentasjon og kvartalsmateriell

Selskapet vil ikke holde en live presentasjon, men vil arrangere et webinar idag klokken 08:30 for forhåndsregistrerte deltakere. Presentasjon, kvartalsregnskapet og pressemeldinger er tilgjengelig på www.norskeskog.com og publisert på www.newsweb.no under tickeren NSKOG. Hvis du ønsker å motta Norske Skogs pressemeldinger på publiseringstidspunktet, kan du abonnere på dette gjennom www.newsweb.no.

Norske Skog kommunikasjon og samfunnskontakt

For ytterligere informasjon: Norske Skog media: Kommunikasjonsdirektør Carsten Dybevig Email: [email protected] Mob: +47 917 63 117

Norske Skog finansmarkedet: Investor Relation Manager Even Lund Email: [email protected] Mob: +47 906 12 919

Q3 2021	Q2 2021	Q3 2020	YTD 2021	YTD 2020

24	23	24	75	74
37	13	26	82	62
61	36	50	157	136


-12	-5	-8	-9	-28
10	1	4	17	11
-2	-4	-4	9	-18

Q3 2021	Q2 2021	Q3 2020	YTD 2021	YTD 2020

24	23	24	75	74
37	13	26	82	62
61	36	50	157	136


-12	-5	-8	-9	-28
10	1	4	17	11
-2	-4	-4	9	-18

AI Terminal

Norske Skog ASA

3687_rns_2021-10-22_abc20205-bf09-4a2a-a79e-ab68aeada4ff.pdf

INTRODUCTION

KEY FIGURES

REPORT OF THE BOARD OF DIRECTORS FOR THE THIRD QUARTER OF 2021

o EBITDA of NOK 111 million in the quarter

o Tasman sales process

o Entered into credit facilities for conversion projects following end of quarter

PROFIT/LOSS FOR THE PERIOD

NORSKE SKOG QUARTERLY REPORT – THIRD QUARTER 2021 (UNAUDITED)

DIVERSIFICATION BEYOND PUBLICATION PAPER

SEGMENT INFORMATION

PUBLICATION PAPER EUROPE

PUBLICATION PAPER AUSTRALASIA

AUSTRALASIA AUSTRALASIA

TOTAL OPERATING INCOME EBITDA

OTHER ACTIVITIES

CASH FLOW

NORSKE SKOG – QUARTERLY REPORT - THIRD QUARTER 2021 (UNAUDITED)

BALANCE SHEET

OUTLOOK

NORSKE SKOG – QUARTERLY REPORT - THIRD QUARTER 2021 (UNAUDITED)

INTERIM FINANCIAL STATEMENTS, THIRD QUARTER OF 2021 CONDENSED CONSOLIDATED INCOME STATEMENT

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONDENSED CONSOLIDATED BALANCE SHEET

NORSKE SKOG – QUARTERLY REPORT - THIRD QUARTER 2021 (UNAUDITED)

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN GROUP EQUITY

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

1. GENERAL INFORMATION

2. ACCOUNTING POLICIES

3. ESTIMATES, JUDGEMENTS AND ASSUMPTIONS

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

Commodity contracts

Provisions

4. PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS

PER OPERATING SEGMENTS

5. OPERATING SEGMENTS

NORSKE SKOG QUARTERLY REPORT – THIRD QUARTER 2021 (UNAUDITED)

NORSKE SKOG – QUARTERLY REPORT - THIRD QUARTER 2021 (UNAUDITED)

6. FINANCIAL ITEMS AND DEBT REPAYMENTS

FINANCIAL ITEMS

FINANCING

BONDS

DEBT REPAYMENT SCHEDULE*

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

8. PRINCIPAL SHAREHOLDERS

9. THE NORSKE SKOG SHARE

10. INVESTMENTS IN ASSOCIATED COMPANIES

11. RELATED PARTIES

12. EVENTS AFTER THE BALANCE SHEET DATE

NORSKE SKOG – QUARTERLY REPORT - THIRD QUARTER 2021 (UNAUDITED)

13. HISTORICAL FIGURES

NORSKE SKOG QUARTERLY REPORT – THIRD QUARTER 2021 (UNAUDITED)

ALTERNATIVE PERFORMANCE MEASURES

Variable costs: Distribution costs + cost of materials

Sustainable and innovative industry ENTERING

Third quarter in brief

Considerable price increases for all product grades in Q3 2021 and into Q4 2021

EBITDA of NOK 111m in the quarter

Tasman sales process

Entered into credit facilities for conversion projects following end of quarter

Margins impacted by volatile and uncertain cost environment

Segment financials for Q3 2021

Western European publication paper market tightening as capacity closures surpass COVID-19 demand loss

Price increases in Q3 2021 and into Q4 2021, with significant further increases required and expected

Energy and fibre costs squeezing industry margins to unsustainable levels

On schedule for start-up in six months of +400 GWh sustainable energy production

Industry low CO2 footprint enabling annual CO2 emission allowance surplus

Full steam ahead into the containerboard market

EUR 265m debt financing

Q4 2022 first production

760 000 tonnes

Becoming a leading independent supplier of recycled containerboard

Norske Skog Golbey – France

PM1 (FID completed)

PM3 (FID completed)

Norske Skog will enter the large, growing and established recycled containerboard market in Q4 2022

Recent capacity additions absorbed by the market as containerboard prices continue to increase

Industry low CO² footprint enabling annual CO² emission allowance surplus

Q3 2021	Q2 2021	Q3 2020	YTD 2021	YTD 2020

24	23	24	75	74
37	13	26	82	62
61	36	50	157	136


-12	-5	-8	-9	-28
10	1	4	17	11
-2	-4	-4	9	-18