Norske Skog ASA

Earnings Release • Jan 19, 2021

Company presentation

January 2021

www.norskeskog.com

Leverage quality assets and fibre competence towards green growth

High-quality publication paper mills with competitive cost position and significant cash generation

• NOK 1,000m over-the-cycle EBITDA and continuous work to improve and optimise publication paper cash flows
• Cost reduction of NOK ~200-250m from 2021 due to machine closures, efficiency investments and cost programmes
• Industry low CO² footprint enabling annual CO² emission allowance surplus

Entry into high-margin and growing containerboard market through conversion of paper machines II

• Containerboard projects on track for start up in 2023 with expected EBITDA contribution of NOK ~700-800m from 2025-26
• Containerboard financing commitments expected to cover 70-80% of EUR 350m conversion capex with long tenor
• Expect debt commitments during Q1 2021 and final agreements in H1 2021

Promising green growth investment opportunities with significant earnings impact III

• Bruck waste-to-energy plant on track for start up in H1 2022 with expected EBITDA contribution of NOK ~200m
• Nature's Flame pellets facility performing excellently with EBITDA contribution of NOK ~30-35m
• Circa¹ is leading a consortium towards construction of a 1,000 tonne bio chemicals plant in France
• First sales of CEBINA in Q4 2020 with ambition for international distribution agreement during 2021

I

Publication paper will continue to generate significant cash flows as strategic focus shifts towards growth projects

Illustrative over-the-cycle EBITDA

• ➢ Remain a producer of all publication paper grades
• ➢ Publication paper capacity of ~2.1m tonnes¹
• ➢ Five paper mills with 11 paper machines combined²
• ➢ Over-the-cycle publication paper EBITDA of NOK 1,000m
• ➢ Cash flow improvement initiatives of NOK ~200-250m

3 1) Capacity of 1,350,000 tonnes newsprint, 400,000 tonnes LWC and 360,000 tonnes SC following closure of Saugbrugs PM5 and ceased newsprint production at Tasman; 2) Following closure of Saugbrugs PM5 and ceased newsprint production at Tasman

Safeguarding cash flows with active cash conversion management

Cash flow initiatives in 2021 of NOK ~200-250m

NOKm

Gross margin improvement

• Efficiency investment at Saugbrugs and optimisation of Australasian operations with repositioning of Tasman into pulp-on-reel production
• Favourable variable unit costs (energy and fibre) seen in 2020 due to the economic slow down

Fixed cost reduction

• Fixed cost reduction of NOK ~100-150m following closure of Saugbrugs PM5 and company wide cost reduction programme introduced from 2021
• Sales volume down ~450-500k tonnes in 2020, resulting in a negative margin impact from fixed costs

Maintenance capex reduction

▪ Annual maintenance capex revised from NOK 175-225m to NOK 150m reflecting capacity adjustments and cash conversion focus

4 1) Cash earnings defined as cash flows from operations less maintenance capex. Cash flow from operations of NOK 602m in 2019 and estimate of NOK 450m in 2020. Maintenance capex of NOK 254m in 2019 and estimate of NOK 200m in 2020

Industry low CO² footprint enabling annual CO² emission allowance surplus

• Industry low CO² footprint basis for annual emission allowance surplus
• Waste-to-energy plant at Bruck will reduce CO² footprint with 150k tonnes annually, start H1 2022
• Surplus allowances can be sold in the market, recent pricing of EUR +30 per allowance
• Cost compensation received to cover increase in electricity prices resulting from the EU ETS¹
• 2020 emission allowance sales of NOK ~80-85m and cost compensation of NOK ~300-350m²

⁵ Source: European Commission 1) Emission Trading Scheme; 2) Note that cost compensation is booked through the year 2020, but cash payment is received in 2021

Norske Skog to become a leading European renewable packaging player

Illustrative over-the-cycle EBITDA

• ➢ Containerboard projects in Bruck and Golbey
• ➢ Replace newsprint with 765,000 tonnes of containerboard
• ➢ Annual European demand growth +600,000 tonnes¹
• ➢ Enable recyclable logistics for e-commerce boom
• ➢ Capitalise on packaging moving away from plastics
• ➢ Financing agreements expected in place during H1 2021
• ➢ Expected EBITDA of NOK ~700-800m from 2025-26

6 Source: External industry consultant (third-party) 1) European demand of ~26m tonnes with annual growth rate of 2-3%

Strong price development within renewable containerboard

Industry trends favouring sustainable and light weight packaging

"By 2025 we will halve the amount of virgin plastic we use in our packaging"

"Our commitment is that 100% of our packaging is recyclable or reusable by 2025"

"Target to design our packaging to minimize waste and eliminate single-use plastics by 2023"

"Goal of ensuring that all plastic packaging is reusable or recyclable in a cost-effective manner by 2030"

8 Source: Centre for Retail Research (CRR), FEFCO, external industry consultant (third-party), European Commission, company statements 1) Combination of liner and fluting containerboards (the two containerboard grades Norske Skog plans to produce) provides corrugated board

Norske Skog will be a containerboard producer in 2023

Norske Skog Golbey – France

• PM1 to become a producer of 555,000 tonnes of recycled containerboard
• Current PM1 capacity of 235,000 tonnes newsprint¹
• Capex estimate of EUR ~250m

9

• PM3 to become a producer of 210,000 tonnes of recycled containerboard
• Current PM3 capacity of 125,000 tonnes newsprint²
• Capex estimate of EUR ~100m

1) Golbey PM1 will only cease newsprint production for the last three months prior to start-up of containerboard production. Golbey PM2 will continue to produce newsprint with capacity of 330,000 tonnes; 2) Bruck PM3 will only cease newsprint production for the last three months prior to start-up of containerboard production. Bruck PM4 will continue to produce LWC magazine paper with capacity of 265,000 tonnes

• ✓Strong process and project competence locally at the mills ✓Leading competence on pulp & paper highly relevant in packaging ✓In-house personnel with experience from previous and similar projects
• ✓Working with multiple experienced and best-in-class suppliers
• ‒ Specialised and competitive suppliers with strong reputations
• ‒ Targeting the best solutions from the most experienced suppliers
• ✓Support from experienced technical consultants
• ‒ Engineering and design services also covering delivery interfaces

Entering the containerboard market with first-quartile capacity

10 Source: External industry consultant (third-party), cost data as of Q3 2019 1) Europe excluding Russia

Norske Skog's promising portfolio of fibre and energy projects enable diversification and innovation opportunities

Illustrative over-the-cycle EBITDA

• ➢ Waste-to-energy plant: Sustainable energy production of +400 GWh(th) and EBITDA of NOK ~200m, start-up in H1 2022
• ➢ Pellets: Producing 85,000 tonnes of renewable energy pellets in New Zealand with annual EBITDA of NOK ~30-35m
• ➢ Circa: Bio chemicals company planning a 1,000 tonnes plant in France with EUR ~12m EU grant (ReSolute¹ ), start-up end 2022
• ➢ CEBINA: First commercial sales in Q4 2020 and ambition to secure international distribution agreement in 2021
• ➢ Bio Composites: Decision on installation of pilot taken in Q4 2020 to enable further commercial development and qualification testing

11 1) ReSolute is an EU Flagship Project and consortium lead by Circa to develop and commercialise on a large scale the biobased solvent CyreneTM

Waste-to-energy plant 50 MW(th) of sustainable energy capacity being installed in Bruck

• Progressing according to plan with start-up expected in H1 2022
• Proven technology from Valmet with a turnkey installation contract
• Replace gas consumption with energy produced from regional waste
• Significant demand for waste offtake in Austria and surrounding areas
• Increasing landfill regulation to further drive demand for waste offtake
• Reducing the CO² footprint of the Bruck mill with 150,000 tonnes
• Revenue generation from waste gate fees and electricity production
• Expected EBITDA contribution of NOK ~200m
• EUR 72m investment of which EUR ~22m invested as of Q4 2020
• EUR ~10m of EUR 54m in local debt drawn as of Q4 2020

Pellets facility Sustainable production of premium quality pellets

Nature's Flame modern and state-of-the-art wood pellet production facility in Taupo, New Zealand

• NZD ~45m invested in state-of-the-art facility
• NOK ~30-35m EBITDA contribution
• Acquired by Norske Skog in July 2015
• FSC certified fibre supply
• Renewable geo-thermal energy supply
• DinPlus certification for premium pellets
• BioGro New Zealand organic certification
• Current production around 90,000 tonnes
• Expansion opportunities of ~120,000 tonnes
• Equivalent to thermal energy of +425 GWh(th) 1
• Fonterra offtake agreement for 50,000 tonnes

Circa Group Produces and sells valuable bio chemicals with patented technology

• Circa¹ targets the bioeconomy ambition of replacing fossil and toxic chemicals with bio chemicals
• Built on +50 years of bio chemical research and more than 10 years of technology verification
• Unique ability to produce large amounts of the platform chemical LGO² using its patented FuracellTM process
• LGO is used to derive (among other) CyreneTM, a biobased solvent replacing toxic and fossil solvents NMP and DMF
• Such solvents are essential for the production of medicines, electronics, agrochemicals and more
• More than 1,000 tests with researchers and companies, and currently selling through Merck KGaA and directly
• Recent EU Horizon2020 grant of EUR ~12m to support a 1,000 tonnes plant in France for the production of LGO and CyreneTM
• Contemplated capital raise (IPO) during Q1 2021 to raise the remaining funding required for construction of the plant

CEBINA is an environmentally friendly input factor relevant in a range of applications

Produced from renewable fibre and hydro energy

CEBINA product portfolio comprises among other:

➢ CEBINA MB

➢ CEBINA 4%

Exploring additional applications

• CEBINA developed by Norske Skog since 2006
• Originally developed as strength enhancer in paper
• Qualities relevant in a wide range of other applications
• Significant commercial work during 2019 and 2020
• Collaboration with technical partners and customers
• First commercial sales in Q4 2020 (proof of concept)
• Target international distribution agreement in 2021
• Pilot plant with capacity of up to 500 tonnes
• Reviewing capacity upscaling opportunities

Outlook

Clear priorities in the short term

• Focus on cash conversion
• Reposition Australasian operations
• Maintain a robust balance sheet

Execute on strategy in the long term

• Become a leading producer of renewable packaging
• Develop and commercialise fibre and energy projects

www.norskeskog.com

▪ Remain a producer of all publication paper grades

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.