Borregaard

Investor Presentation • Apr 26, 2018

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Agenda

• Per A Sørlie, President & CEO
• •Highlights
• Business areas
• •Update on strategic projects
• •Outlook
• • Per Bjarne Lyngstad, CFO
• Financial performance

Highlights – ¹st quarter 2018

• •EBITA adj.¹ 177 mNOK (200 mNOK)
• • Improved product mix in Performance Chemicals
• •Lower acetate sales for Speciality Cellulose
• • Higher sales in Ingredients and Fine Chemicals
• • Increased costs for wood, caustic soda, lignin distribution and manning in Florida
• •Florida project on track

Performance Chemicals markets – Q1

• • Increased sales of specialities and improved product mix
• •Higher sales to batteries, agro and oil-field chemicals
• • Sales volume increased by 1% vs Q1-17
• •Construction sales below normal for the season due to cold weather
• •Strong price competition in certain regional construction markets
• •Average price in sales currency in line with Q1-17

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

• • High sales volume, but weaker product mix
• •Lower sales of acetate cellulose
• •Ether market continues to grow, acetate market remains challenging
• •Average cellulose sales price 4% below Q1-17
• • Bioethanol had higher sales prices but lower sales volume
• •New dehydration plant started up in Q1

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

Ingredients and Fine Chemicals markets

• • Ingredients
• •Higher sales volume

• •Positive market trend for wood-based vanillin

• • Fine Chemicals

• Higher deliveries of key products vs Q1-17
• Continued market growth in intermediates for x-ray contrast media

Update on strategic projects

• • Develop the unique biorefinery asset in Sarpsborg
• •High-end bioethanol expansion started up in Q1-18
• • Ice Bear capacity expansion on track
  • Completion by end 2018
• •Lignin operation upgrade/specialisation on schedule
• • Growth within Performance Chemicals
• • Florida project on schedule for start-up mid 2018
  • •On time and cost, market introduction well prepared
• • Establish Cellulose Fibrils as a new business area
• • Exilva market introduction on-going
  • •Continued strong interest from potential customers
  • Long lead-times for commercial sales
• •Decision on SenseFi expansion expected in 2018

Outlook

• • Performance Chemicals
• •Continued strong competition for lignin to the construction sector in certain regions
• •Reallocation efforts and high distribution costs will continue
• •Sales volume forecast to increase by 5-10% vs 2017
• •Positive development for Specialities expected to continue
• •Q2 sales volume expected to be higher than Q2-17
• •Ramp-up of Florida fixed cost will continue, and depreciation will commence from start-up
• • Speciality Cellulose
• •Average cellulose price in sales currency expected to be in line with 2017
• •Product mix forecast to be weaker than 2017 due to lower acetate cellulose sales volume
• •In Q2, total sales volume and sales of highly specialised grades expected to be lower than Q1-18
• • Other Businesses
• •No major changes expected in market conditions for Fine Chemicals
• •Positive market trend for wood-based vanillin (Ingredients)
• • Sales will gradually increase for Cellulose Fibrils, but long lead-times for conversion of sales prospects. Fixed costs and depreciation in Cellulose Fibrils expected to be largely in line with 2017
• • Wood and caustic soda costs expected to be significantly higher than in 2017
• •Affecting mainly Speciality Cellulose and Ingredients (caustic soda only)
• •Significant FX exposure, but delayed impact of FX rate fluctuations due to hedging policy

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Borregaard key figures – Q1

• •Revenues up 7% vs Q1-17
• • EBITA adj. 1 177 mNOK for the Group
• •Other Businesses improved, while Performance Chemicals and Speciality Cellulose declined
• •Approx. 40 mNOK in increased costs vs Q1-17 (wood, caustic soda, lignin distribution, Florida project)
• •Net FX impact insignificant
• •EPS at NOK 1.37 (NOK 1.48)

Performance Chemicals key figures – Q1

• Revenues 1% above Q1-17

• •1% higher sales volume

• •Improved product mix, higher Specialities sales

• Price competition in construction markets
• •Average sales price unchanged in sales currency
• •Higher costs (distribution, Florida project)
• Negative net FX impact

• EBITA adj. margin1declined vs Q1-17

Speciality Cellulose key figures – Q1

• Revenues 5% above Q1-17
• •High sales volume

• Weaker product mix main reason for 4% drop in average sales price vs Q1-17

• •Increased wood and caustic soda prices
• •Bioethanol result in line with Q1-17
• •Positive net FX impact

• EBITA adj. margin1declined vs Q1-17

Other Businesses key figures – Q1

• •Revenues 31% above Q1-17

• High sales both in Ingredients and Fine Chemicals

• • Ingredients: High sales volume, positive market Ingredients: trend for wood-based vanillin and improved result, but negative impact from higher caustic soda prices

• Fine Chemicals: Higher deliveries of key products Fine and increased result vs Q1-17
• • Cellulose Fibrils: Higher net costs, both in market Fibrils: ing and production
• • Corporate costs in line with Q1-17costs
• •Net FX effect insignificant for Other Businesses

Currency impact

• • Net FX EBITA adj.¹ impact negligible vs Q1-17
• •Includes change in hedging effects and based on estimated FX exposure
• • Net FX EBITA adj.¹ impact for the full year estimated to be 35 mNOK vs 2017
• •Assuming rates as of 25 April (USD 7.96 and EUR 9.71) on expected FX exposure
• •Net FX EBITA adj.¹ impact in Q2 estimated to be 5 mNOK vs Q2-18

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

3Currency basket based on Borregaard's net exposure in 2017 (=100): USD 69% (approx. 206 mUSD), EUR 31% (approx. 84 mEUR), Other 0% (GBP, BRL, JPY, SEK, ZAR).

¹ Non-GAAP measure, see Appendix for definition.

Cash flow, investments and NIBD

• • Cash flow from operations1 decreased slightly vs Q1-17
• • Impact from lower EBITDA adj. 1largely off-set by favourable net working capital development vs Q1-17
• • Increased expansion investments1
• •Mainly related to the Florida lignin project
• •Replacement investments at a low level

• •NIBD¹ increased by 99 mNOK in Q1

• •Per A Sørlie, President & CEO

• •Per Bjarne Lyngstad, CFO

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Borregaard – key figures

l l Am in N N O O K K i io ts ou n m n	Q 1- 2 0 1 8	Q 1- 2 0 1 7	ha C ng e
O O in in t t p p er er a a g g re ve nu es	1 2 1 1 2 1 7 7	1 1 3 6	7 %
1 d E B I T D A j. a	2 5 2	2 7 4	-8 %
1 d E B I T A j. a	1 1 7 7 7 7	2 0 0	-1 2 %
b le isa io in i Am t t ta ts or n ng as se	-1	-1
1 he d O in t r co m e a n ex p en se s	0	0
f O in i t t p er a g p ro	1 7 6	1 1 9 9 9 9	% -1 2
l in ia i F te t an c m s, ne	-7	-4
f be be fo fo i Pr t ta o re re xe s	6 9 1	9 1 5	3 % -1
In ta co m e x e xp en se s	-3 7	-4 8
f fo he he d d Pr i io io t t t o r p p er er	1 3 2	1 4 7	% -1 0
f bu b le l l Pr i i in in t a t tr ta to tr te ts o n on -c on o g re s	-5	-1
f bu b le f he Pr i i t a t tr ta to t t o o w ne rs o p ar en	1 3 7	1 4 8
h h f lo fr ( ( ) ) Ca Ca in in iv iv i i ie ie I I F F R R S S t t t t t t s s w om o op p er er a a g g ac ac s s	3 1	8 2
ha ha Ea Ea in in rn rn g g s s p er s s re re	1, 3 7	1, 4 8	% -7
1 d E B I T D A j. M in a ar g	2 0, 7 %	2 4, 1 %
1 d E B I T A j. M in a ar g	% 1 4, 5	% 1 7, 6

Operating revenues and EBITA adj.1per segment

	l l Am in N O K i io ts ou n m n
O in t p er a g re ve nu es	Q 1- 2 0 1 8
d Bo rr eg aa r	1 1 2 2 1 1 7 7	1 1 1 1 3 3 6 6	7 %
fo he ls Pe C ica r rm an ce m	5 5 5	5 5 0	% 1
l l lu lo Sp ia i Ce ty ec se	4 3 4	4 1 2	% 5
he O Bu in t r s es se s	2 3 9	1 8 3	3 1 %
l E im in io t a ns	-1 1	-9

l l Am in N O K i io ts ou n m n			l l Am in N O K i io ts ou n m n
O O in in t t p p er er a a g g re re ve ve nu nu es es	Q Q Q 1- 1- 2 2 2 0 0 0 1 1 8 8 8 1- 1	Q Q 1- 2 2 0 0 1 7 1- 1 7	ha C ng e	1 d E B I T A j. a	Q 1- 2 0 1 8	Q 1- 2 0 1 7	ha C ng e
d Bo rr eg aa r	1 2 2 1 7 1 1 7	1 1 3 3 6 6 1 1	% 7	d d Bo Bo rr rr eg eg aa aa r r	1 7 7 1 7 7	2 0 0	-1 2 %
fo he ls Pe C ica r rm an ce m	5 5 5	5 5 0	1 %	fo he ls Pe C ica r rm an ce m	1 1 5	1 3 2	-1 3 %
l l lu lo Sp ia i Ce ty ec se	4 3 4	4 1 2	5 %	l l lu lo Sp ia i Ce ty ec se	6 4	8 9	-2 8 %
he O Bu in t r s es se s	2 3 9	1 8 3	3 1 %	he O Bu in t r s es se s	-2	-2 1

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

Balance sheet

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

Net financial items & net interest-bearing debt1

l l Am in N O K i io ts ou n m n
f l N in ia i t te e an c m s	Q 1- 2 0 1 8	Q 1- 2 0 1 7
Ne in t te t e re s xp en se s	-4	-3
/ lo Cu in rre nc y g a ss	-2	-1
he f l O in ia i t te t r an c m s, ne	-1	0
f l N in ia i t te e an c m s	-7	-4

l l Am in N O K i io ts ou n m n 1 be de b ( ) N in in N I B D t te t- t e re s ar g	3 1. 0 3. 2 0 1 8	3 1. 1 2. 2 0 1 7
be l b l No in in ia i i ies t te t- t n- cu rre n re s ar g	7 5 7	7 4 3
be l b l lu d dr f f c hp l Cu in in ia i i ies in in t te t- t t o rre n re s ar g c g ov er a as oo	2 7 9	2 8 3
be b les ( lu de d "O he ") No in in iva in in As t te t- t ts n- cu rre n re s ar g re ce c r se	0	-1
h d h de Ca i ts s an ca s p os	-9 2	-1 8 0
1 be b ( ) de N in in N I B D t te t- t e re s ar g	9 4 4 9 4 4	8 4 5

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 8	4 0	8. 1 2	2 2	9. 1 2
Q 3- 2 0 1 8	3 9	8. 2 0	2 2	9. 4 6
Q 4- 2 0 1 8	3 7	8. 3 7	2 2	9. 5 4
2 0 1 8	1 1 6	8. 2 3	6 6	9. 3 7
2 0 1 9	1 0 6	8. 3 6	8 7	9. 6 1
2 0 2 0	6 6	8. 1 5	6 5	9. 7 7
2 0 2 1	1 0	7. 5 1	1 8	1 0. 0 9

Contracted FX hedges with EBITA adj. impact (as of 25.04.18) Hedging effects by segment effects by segment

l l O i io N K m n	Q 8 1- 1	Q 1- 1 7
fo Pe r rm an ce he ls C ica m	2	-6
l Sp ia i ty ec l lu lo Ce se	2	-1 0
he O Bu in t r s es se s	-1	-6
d d Bo Bo rre rre g g aa aa r r	3	-2 2

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
• • 60 mUSD term loan for LT Florida, tenor 8.5 years from completion
• • Short-term facilities
• •225 mNOK overdraft facilities
• •200 mNOK commercial paper
• • Solidity (covenants)
• • Equity ratio159.5% (> 25%)
• • Leverage ratio1LTM 0.91 (< 3.25)

Debt and undrawn facilities

Non-GAAP measures

In the discussion of the reported operating results, financial position and cash flows, Borregaard refers to certain measureswhich 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 2018, held on 26 April 2018. 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.