Borregaard — Interim / Quarterly Report 2017

May 3, 2017

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Agenda

• • Per A Sørlie, President & CEO
• •Highlights
• •Business areas
• •Sarpsborg biorefinery investments
• •Outlook
• • Per Bjarne Lyngstad, CFO
• •Financial performance

Highlights – ¹st quarter 2017

• •All-time high 1st quarter EBITA adj.¹ for the Group
• • Increased sales of specialities in Performance Chemicals
• • Higher prices and better product mix in Speciality Cellulose
• •Weaker results in Ingredients and Fine Chemicals
• •Slightly negative currency effects
• • Specialisation and upgrade investments at the Sarpsborg biorefinery

Performance Chemicals markets – Q1

• • Higher average price in sales currency vs Q1-16
• •Improved product mix
• • Sales volume in line with Q1-16
• •Increased sales to USA and China
• •Increased Specialities sales; agrochemicals, plant nutrition, batteries and oil field chemicals
• •Construction market remains challenging; Brazil, Turkey and the Middle East

1 Average sales price and sales volume reflect 100% of sales and volume from the J/V in South Africa. Average sales price is calculated using actual FX rates, excluding hedging impact.

Speciality Cellulose markets – Q1

• •Higher prices and improved product mix vs Q1-16
• •Increased sales of highly specialised grades
• • Strong demand for ether grades and textile cellulose
• •Market for acetate cellulose remained more competitive

1Average sales price is calculated using actual FX rates, excluding hedging impact.

Ingredients and Fine Chemicals markets – Q1

• • Ingredients

• •Positive market development for key products

• • Fine Chemicals

• Low deliveries vs Q1-16
• Weaker sales mix

Sarpsborg biorefinery investments

Ice Bear capacity expansion

• • Main initiative to drive further specialisation
• •Targeting «niches within the niches»
• •Solidifying existing positions
• • Project benefits second step
• •Will double the capacity to 60,000 tonnes
• •More optimal production of Ice Bear grades
• • Cost, time and ramp-up
• •115 mNOK investment
• •Completion second half of 2018
• •Ramp-up based on market demand
• •Estimated run rate by end of 2018 is 20-30,000 tonnes

Sarpsborg biorefinery investments

Upgrade and increased specialisation of lignin operation

• • Comprehensive investment programme
• •New drying capacity
• •Tanks for storage of liquid materials
• • Improved solutions for logistics, infrastructure and energy
• • Several benefits
• •Further specialisation on the unique raw material base
• •Reduced exposure to cyclical market segments
• •Optimisation of production campaigns and logistics
• •Reduced energy costs
• •Substantial environmental and safety benefits
• • Main project data
• •500 mNOK investment
• •Partly expansion, partly maintenance investment
• • Total programme meets return requirement for expansion investments
• •Completion end 2019

Outlook

• • Performance Chemicals
• • Market conditions negatively affected by continued weak business climate in important regions for construction products
• • Reallocation efforts and flexibility in raw material supply will contribute to market optimisation andstable inventory levels
• •2017 sales volume forecast to be in the 450-470,000 mtds range
• • In Q2-17, sales volume expected to be in line with Q2-16. Sales volume and average sales price will beaffected by seasonality in delivery patterns
• • Speciality Cellulose
• •Average price in sales currency expected to be 3-5% above the 2016 level
• •Price uncertainty still mainly related to textile cellulose spot price development
• •Product mix forecast to improve from 2016
• • In Q2-17, both total sales volume and sales of highly specialised grades expected to be somewhat higher than Q2-16
• • Other Businesses
• • Ingredients still affected by general overcapacity, but positive development following recent price increases from Chinese producers
• • Growth trend for key products within Fine Chemicals expected to continue, but with uneven delivery patterns
• •Cellulose Fibrils costs, net of EU grant, expected to be in line with Q2-16
• •Corporate costs will remain at largely the same level as in 2016
• •Significant FX exposure, but delayed impact of FX rate fluctuations due to hedging policy

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Borregaard key figures – Q1

• •2% revenues growth vs Q1-16
• • Increased EBITA adj. 1
• •All-time high Q1 result for the Group
• •Higher prices and positive mix effects in Speciality Cellulose main contributors
• •Slightly negative FX impact
• •EPS at NOK 1.48 in Q1-17 (NOK 1.21)

Performance Chemicals key figures – Q1

• Revenues and volume in line with Q1-16
• • Increased sales for Specialities, but decline for Construction

Favourable product mix

• •Higher sales and project costs
• •Slightly negative FX impact

• EBITA adj. margin1slightly below Q1-16

Speciality Cellulose key figures – Q1

• 8% revenue growth vs Q1-16
• • Higher prices, improved mix and increased sales volume

•Higher sales prices

• •Improved product mix
• •Increased production volume
• •Slightly negative FX impact

• Improved EBITA adj. margin1

Other Businesses key figures – Q1

Revenues 4% below Q1-16

• •Low deliveries in Fine Chemicals

• Slightly lower sales in Ingredients

• Ingredients: Slightly lower sales, higher raw Ingredients: material and infrastructure costs

• Fine Chemicals: Low deliveries, weaker sales mix Fine
• • Cellulose Fibrils net costs, including EU grant, below Q1-16, but depreciation and gross costs increased
• •FX impact negligible for Other Businesses FX

Currency impact

• • Net FX EBITA adj.¹ impact approx. -5 mNOK vs Q1-16
• •Includes change in hedging effects and based on estimated currency exposure
• • Net FX EBITA adj.¹ impact in Q2-17 estimated to be +10 mNOK vs Q2-16
• •Assuming rates as of 2 May (USD 8.59 and EUR 9.38) on expected currency exposure

• •Net FX EBITA adj.¹ impact in 2017 estimated to be +35 mNOK vs 2016

• 2See appendix for currency hedging strategy, future hedges and hedging effects by segment

• 3 Currency basket based on Borregaard's net exposure in 2016 (=100)
• •USD 66% (approximately 208 mUSD)
• •EUR 33% (approximately 92 mEUR)
• •Other 1% (GBP, BRL, JPY, SEK, ZAR)

¹ Non-GAAP measure, see Appendix for definition.

Cash flow, investments and NIBD

• • Improved cash flow from operations vs Q1-16
• • Higher EBITDA adj. and lower increase in net working capital
• • Expansion investmentsin Q1 mainly related to the LignoTech Florida project

•NIBD¹ increased by 84 mNOK in Q1

Updated investment forecast 2017-2018

• • Replacement investments
• •Targeted at depreciation level
• • Will be above depreciation in 2016-'18 due to wood seasoning silos (insurance coverage) and lignin infrastructure investments in Norway
• • Expansion investments
• • New plant LignoTech Florida phase 1: 110 mUSD (100%) ≈ 900 mNOK (late 2016 to mid 2018)
• • New Exilva plant: 225 mNOK(mid 2014 to early 2017)
• •Ice Bear project: 115 mNOK (2017 to 2018)
• • Lignin operation investment in Norway: 500 mNOK, approx. 70% expansion(mid 2017 to end 2019)
• • Other planned projects (bioethanol plant upgrade, lignin specialities, fine chemicals capacity, R&D activities)

• • New expansion projects may lead to additional investments

• •Per A Sørlie, President & CEO

• •Per Bjarne Lyngstad, CFO

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Borregaard – key figures

l l A A i N N O O K K i i t t m m o o n n s s n m o n u u	Q Q Q 1- 1- 1- 2 2 2 0 0 0 1 1 1 7 7 7	Q Q 1- 1- 2 2 0 0 1 1 6 6	h C a n g e
O O i i t t p p e e r r a a n n g g r e v e nu e s	1 1 3 6	1 1 1 3	% 2
1 d E B I T D A j. a	2 7 4 2 7 4	2 3 6 2 3 6	1 6 %
1 d E B I T A j. a	2 2 0 0 0 0	1 7 1 1 7 1	1 7 %
b l A i i i i t t t t m o r s a o n n a n g e a s s e s	-1	-1
1 h d O i t e r n c o m e a n e x p e n s e s	0	0
f O i i t t p e r a n g p r o	1 1 9 9 9 9	1 1 7 0 0 7	% 1 7
l F i i i t t n a n c a e m s, n e	-4	-9
f b b f f i P t t r o e e o o r r e e a x e s	9 1 5	1 6 1	2 % 1
I t n c o m e a x e x p e n s e s	8 -4	1 -4
f f f h d i i P t t r o o o r r e p e r o	1 1 4 4 7 7	2 0 1	2 3 %
f b b l l l i i i i P t t t t t t t t r o a r u a e o n o n- c o n r o n g n e r e s s	-1	1 -
f b b l f h P i i t t t t t t t r o a r u a e o o w n e r s o e p a r e n	1 4 8	1 2 1
h f l f ( ( ) ) C i i iv i i I I F F R R S S t t t t a s o w r o m o o p p e e r r a a n n g g a c e s	8 2 8 2	-6 9
h h E i a r n n g s p p e e r r s s a a r r e e	1, 1, 4 4 8 8	1, 2 1	% 2 2
1 d d d A j E B I T D A j. M i t u s e a a r g n	2 4, 1 %	2 1, 2 %
1 d d d A j E B I T A j. M i t u s e a a r g n	% 1 7, 6	% 1 5, 4

1Non-GAAP measure, see Appendix for definition.

Operating revenues and EBITA adj.1per segment

	l l A i N O K i i t m o u n s n m o n
O i t p e r a n g r e v e n u e s	Q 1- 2 0 1 Q 1- 2 0 1 7 7
d d B B o o r r r r e e g g a a a a r r	1 1 3 3 6 6 1 1	1 1 1 3 3 1 1 1	2 %
f h l C i P e r o r m a n c e e m c a s	0 5 5	0 5 5	0 %
l l l l S i i C t p e c a e o s e y u	4 1 2	3 8 3	% 8
h O B i t e r u s n e s s e s	1 8 3	1 9 0	-4 %
l E i i i t m n a o n s	-9	-1 0

l l i N O K i i t m o u n s n m o n			l l A i N O K i i t m o u n s n m o n
Q 1- 2 0 1 7	Q Q 1- 1- 2 2 0 0 1 1 6 6 Q 1- 2 0 1 6	h C a n g e	1 d E B I T A j. a	Q 1- 2 0 1 7	Q 1- 2 0 1 6	h C a n g e
		2 %	d B o r r e g a a r	2 2 0 0 0 0	1 7 1	% 1 7
		0 %	f h l C i P e r o r m a n c e e m c a s	1 3 2	1 3 8	-4 %
		8 %	l l l l S i i C t p e c a e o s e y u	8 9	3 5	8 % 6
		-4 %	h O B i t e r u s n e s s e s	-2 1	-2 0	-5 %

Cash flow

l l Am in N O K i io ts ou n m n	Q Q 1- 1- 2 2 0 0 1 1 7 7	Q 1- 2 0 1 6 Q 1- 2 0 1 6	F Y- 2 0 1 6 F Y- 2 0 1 6
l l Am in N O K i io ts ou n m n
f be fo Pr i t ta o re xe s	1 9 5	1 6 1	7 2 4
de d ha Am isa ion ia ion im irm t t t t c or p rec an p a en rg es ,	7 5	6 6	2 7 8
ha k l, C in ing i t w ta tc ng e ne or ca p e	-1 5 6	-2 4 3	1 7 0
( f p f ) fro iv i de d ha i D J V t n s re o ro m	-2	-2 2	-1
d Ta i xe s p a	-3 0	-3 1	-9 0
h f lo fro Ca in iv i ies t t t s w m op er a g ac	8 2	-6 9	0 8 1 1
lan d e d b le * Inv ip in i tm ts ty t a t a ta ts es en p ro p er p n q me n n ng as se u ,	-1 5 9	-7 1	-6 2 2
he l O i ion t ta tra t r c ap ns ac s	2	1	5
h f f lo lo fro fro Ca In In in in iv iv i i ies ies t t t t t t s m m ve ve s s g g ac ac w w	-1 -1 5 5 7 7	-7 0	-6 1 7
de ds D iv i n	0	0	-1 4 9
fro f o / ha loy ds ise ion Pr t to oc ee m ex erc o p s s res em p ee s	1 1	1	7
ba k o f s ha Bu y- c res	-2 9	0	-1 0
/ ( los ) he dg fo bs d Ga in inv in i iar ies t tm ts s on es r n e es en su	9	1 1	1 3
/ d fro ha ho l de Ne i t p to a m s re rs	-9	1 2	-1 3 9
ds fro be l b l Pr in ing ia i i ies te t- t oc ee m res ar	5	0	1 0 6
fro be l b l in ing ia i i ies Re t te t- t p ay me n m res ar	-2 7	-2	-3 0 9
/ ha be b les he l b l C in in ing iva ia i i ies te t- t t ng e res ar re ce o r	2 3	-9	-2 3
ha ha be be l l b b l l C C in in in in in in ia ia i i ies ies t te te t- t- t t ng ng e e ne re re s s ar ar g g	1	-1 1	-2 2 6
h f lo fro f Ca in in iv i ies t t s m an c g ac w	-8	1	-3 6 5
ha ha h d h h len len C C in in iva iva ts ts ng ng e e ca s an ca ca s s eq eq u u	-8 3 -8 3	-1 3 8	9 9
h a d c h e len be f p d Ca iva inn ing io ts t s n as q u a g o er	2 6 5	1 6 9	1 6 9
ha h a d c h e len C in iva ts ng e ca s n as q u	-8 3	-1 3 8	9 9
f fec h a d c h e len Cu iva ts ts rre nc y e ca s n as q u	0	-1 3	-3
h d h h len he he d f f he he d Ca iva io ts t t t t t s an ca ca s s eq u a e n o o p er	1 1 8 2	1 8	2 6 5
* by Inv tm t te es en ca g or y
lac Re Inv t tm ts p em en es en	7 8	3 4	3 5 8
1 Ex ion inv tm ts p an s es en	8 1	3 7	2 6 4

Balance sheet

l l Am in N O K i io ts ou n m n	3 3 1. 1. 0 0 3. 3. 2 2 0 0 1 1 7 7	3 3 1. 1. 1 1 2. 2. 2 2 0 0 1 1 6 6
As ts se :
b le In i ta ts ng as se	1 2 1	1 2 5
lan d Pr ip ty t a t op er p n eq u m en ,	2 5 5 9	2 4 7 1
he O t ts r a ss e	8 6	1 1 5
In in j in tm t t v tu ve s en o en re	1 2 7	1 2 1
No No t a t a ts ts n- n- cu cu rr rr en en ss ss e e	2 8 9 3 2 8 9 3	2 8 3 2 2 8 3 2
In ies to ve n r	6 8 7	6 2 6
b les iva Re ce	9 9 4	9 8 4
h a d h de Ca i ts s n ca s p os	1 8 2	2 6 5
Cu t a ts rr en ss e	1 8 1 8	1 8 3 9 1
l a To ta ts ss e	4 7 1 1	4 6 7 1 4 6 7 1
d l b l Eq i ia i i ie ty t u a n s:
Gr i ty ou p eq u	2 8 0 8	2 6 7 9
l l No ing in tro te ts n- co n re s	5 9	3 4
i Eq ty u	2 8 6 7	2 1 3 2 7
d he l b l Pr is io ia i i ies t t ov ns a n o r	2 8 0	2 9 9
be l b l In ing ia i i ies te t- t re s ar	5 2 6	5 2 5
l l b b l l No No ia ia i i i i ie ie t t t t n- n- cu cu rr rr en en s s	8 0 6 8 0 6	8 2 4 8 2 4
be l b l In ing ia i i ies te t- t re s ar	4 1	6 1
he l b l O ia i i ies t t t r c ur re n	9 9 7	1 0 7 3
l l b b l l Cu ia ia i i i i ie ie t t t rr en s s	1 0 0 3 3 8 8	1 1 1 3 4
d l l b b l l Eq Eq i i ia ia i i i i ie ie ty ty t t u u a n s s	4 7 1 1 7 1 1	4 6 7 1
1 ( ) i io % Eq ty t u ra :	6 0, 9 %	5 8, 1 %

Net financial items & net interest-bearing debt1

l l A i N O K i i t m o u n s n m o n
f l i i i N t t e n a n c a e m s	Q Q 2 2 0 0 1- 1- 1 1 7 7	Q 2 0 6 Q 1- 1- 2 0 1 1 6
N i t t t e n e r e s e x p e n s e s	3 -	6 -
/ l C i u r r e n c y g a n o s s	1 -	3 -
h f l O i i i t t t e r n a n c a e m s, n e	0	0
f l N i i i t t e n a n c a e m s	4 -	9 -

l l A i N O K i i t m o n s n m o n u
1 ( ) b d b N i i N I B D t t t- t e n e r e s e a r n g e	3 1 0 3 2 0 1 7	3 1 1 2 2 0 1 6
b l b l i i i i i i N t t t- t o n- c u r r e n n e r e s e a r n g a e s	2 6 5	2 5 5
b l b l l d d f f h l C i i i i i i i i t t t- t t r r e n n e r e s e a r n g a e s n c n g o e r r a o c a s p o o u u v	4 1	6 1
( ") b b l l d d "O h N i i i i i A t t t- t t o n- c u r r e n n e r e s e a r n g r e c e v a e s n c u e n e r s s e s	1 -	2 1 -
h h d d C i t a s a n c a s e p o s s	1 8 2 -	2 6 5 -
1 b d b ( ) N i i N I B D t t t- t e n e r e s e a r n g e	3 3 8 8 4 4	3 3 0 0 0 0

Currency hedging strategy

Purpose is to delay effects of currency fluctuations and secure competitiveness

• • Hedging based on expected EBITA adj. impact 1
• •Base hedge: 75%/50% on a rolling basis for 6/9 months Base hedge: for major currencies
• • Extended hedge: 75%/50% of the next 24/36 months if US Extended hedge: D and EUR are above defined levels EUR; effective rate above 8.50
  • USD; gradually at effective rates between 7.50 and 8.50
• • Contracts²: 100% hedged
• •Balance sheet exposure hedged 100%
• •Net investments in subsidiaries hedged up to 90% of book value in major currencies

	U S D l l i io m n	U S D te ra	E U R l l i io m n	E U R te ra
Q 2- 2 0 1 7	4 0	8. 0 4	2 0	8. 7 0
Q 3- 2 0 1 7	4 0	8. 0 5	2 1	8. 8 9
Q 4- 2 0 1 7	3 7	8. 1 3	2 1	9. 0 3
Ro Y 2 0 1 7	1 1 7	8. 0 7	6 2	8. 8 7
2 0 8 1	3 1 4	8. 2 3	8 5	9. 3 4
2 0 1 9	1 0 1	8. 3 6	6 5	9. 5 7
2 0 2 0	1 9	8. 2 5	1 8	9. 4 1

Contracted FX hedges with EBITA adj. impact (as of 30.04.17) Hedging effects by segment 30.04.17) Hedging effects by segment

l l N O K i io m n	Q 1- 1 7	Q 1- 1 6
fo Pe r rm an ce he ls C ica m	-6	-1 2
l Sp ia i ty ec l lu lo Ce se	-1 0	-2 2
he O t r Bu in s es se s	-6	-9
d Bo rre g aa r	-2 2 -	3 -4

1Hedging done mainly in the Norwegian company

2Strict definition of contracts applied for 100% hedging (mutually binding agreement in which price, currency, volume and time are defined)

Debt, credit facilities and solidity

•Debt and overdraft facilities

• • Long-term credit facilities
• • 1,500 mNOK revolving credit facilities, maturity 2021
• • 200 mNOK 5-year bond issue, maturity 2019
• • 40 mEUR 10-year loan, maturity 2024
• • Overdraft facilities
• •225 mNOK
• • Solidity (covenants)
• • Equity ratio160.9% (> 25%)
• • Leverage ratio1LTM 0.36 (< 3.25)

Debt and undrawn facilities31.03.2017

Non-GAAP measures

In the discussion of the reported operating results, financial position and cash flows, Borregaard refers to certain measures which are not defined by generally accepted accounting principles (GAAP) such as IFRS. Borregaard management makes regular use of these non-GAAP measures and is of the opinion that this information, along with comparable GAAP measures, is useful to investors who wish to evaluate the company's operating performance, ability to repay debt and capability to pursue new business opportunities. Such non-GAAP measures should not be viewed in isolation or as an alternative to the equivalent GAAP measure.

• • Cash flow from operations:
• Cash flow from operating activities (IFRS) + tax paid +/- net financial items +/- dividend (share of profit) from JV.
• • EBITA adjusted (EBITA adj.)
• Operating profit before amortisation and other income and expenses.
• • EBITA adj. margin
• EBITA adj. divided by operating revenues
• • EBITDA adjusted (EBITDA adj.)
• Operating profit before depreciation, amortisation and other income and expenses.
• • Equity ratio
• Equity (including non-controlling interests) divided by equity and liabilities.
• • Expansion investments
• Investments made in order to expand production capacity, produce new products or to improve the performance of existing products. Such investments include business acquisitions, pilot plants, capitalised R&D costs and new distribution set-ups.
• • Other income and expenses
• Non-recurring items or items related to other periods or to a discontinued business or activity. These items are not viewed as reliable indicators of future earnings based on the business areas' normal operations. These items will be included in the Group's operating profit.
• • Leverage ratio
• Net interest-bearing debt divided by last twelve months' (LTM) EBITDA adj.
• • Net interest-bearing debt (NIBD)
• Interest-bearing liabilities minus interest-bearing assets (see slide 26)
• • Return on capital employed (ROCE)
• Last twelve months' (LTM) EBITA adj. divided by average capital employed based on the ending balance of the last five quarters. Capital employed is defined by Borregaard as the total of net working capital, intangible assets, property, plant and equipment and investment in joint venture minus net pension liabilities.

Important notice

This presentation is being made only to, and is only directed at, persons to whom such presentation may lawfully be communicated ('relevant persons'). Any person who is not a relevant person should not act or rely on this presentation or any of its contents.

This presentation does not constitute an offering of securities or otherwise constitute an invitation or inducement to any person to underwrite, subscribe for or otherwise acquire securities in any company within the Borregaard Group. The release, publication or distribution of this presentation in certain jurisdictions may be restricted by law, and therefore persons in such jurisdictions into which this presentation is released, published or distributed should inform themselves about, and observe, such restrictions.

This presentation includes and is based, inter alia, on forward-looking information and contains statements regarding the future in connection with the Borregaard Group's growth initiatives, profit figures, outlook, strategies and objectives. All forward-looking information and statements in this presentation are based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for the Borregaard Group and its lines of business. These expectations, estimates and projections are generally identifiable by statements containing words such as "expects", "believes", "estimates" or similar expressions.

Important factors may lead to actual profits, results and developments deviating substantially from what has been expressed or implied in such statements. Although Borregaard believes that its expectations and the presentation are based upon reasonable assumptions, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in the presentation.

Borregaard is making no representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the presentation, and neither Borregaard nor any of its directors, officers or employees will have any liability to you or any other persons resulting from your use.

This presentation was prepared for the interim results presentation for the first quarter of 2017, held on 3 May 2017. Information contained herein will not be updated. The slides should also be read and considered in connection with the information given orally during the presentation.