Borregaard

Investor Presentation • Jan 31, 2019

^{O s l o} , ^{3 1 J a n u a r y 2 0 1 9}

Agenda

• • Per A Sørlie, President & CEO
• Highlights
• •Proposed dividend
• •Business areas
• Strategic update
• •Outlook
• Per Bjarne Lyngstad, CFO
• •Financial performance

Highlights – ⁴th quarter 2018

• •EBITA adj.¹ 94 mNOK (109 mNOK)
• • Growth in Industrial and Specialities for Performance Chemicals
• • Increased costs related to Florida ramp-up and lignin distribution
• • Higher wood costs and lower acetate sales in Speciality Cellulose
• •Strong improvement in Ingredients
• •Positive net currency impact

Highlights – full year 2018

• • EBITA adj. 1580 mNOK (749 mNOK)
• • In Performance Chemicals, increased sales volume, diversification and specialisation off-set challenging concrete admixtures market
• • Ramp-up costs and depreciation for the new Florida plant and increased lignin distribution costs
• • Speciality Cellulose affected by lower sales of acetate grades and higher wood and caustic soda costs
• •Strong improvement in Other Businesses
• •Completion of several strategic investment projects

Dividend proposal for 2018

• • Borregaard's dividend policy
• • To pay regular and progressive dividends reflecting the expected long-term earnings and cash flows of the Group
• • Annual dividend is targeted between 30% and 50% of net profit
• • A dividend of NOK 2.25 per share is proposed by the Board of Directors
• •47% of net earnings
• •Total dividend payment of 224 mNOK

Performance Chemicals markets – Q4

• • Sales volume increased 3% vs Q4-17
• •Volume growth for both Industrial and Specialities
• • Average price in sales currency was in line with Q4-17
• •Concrete admixture market remained challenging for lignin products
• • Compensated by growth in Industrial and Specialities

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.

Performance Chemicals markets – full year

• • Average price in sales currency was 1% lower than in 2017
• • Diversification and specialisation off-set the effect of challenging market conditions for lignin products to concrete admixtures
• • Total sales volume increased 4%
• •Growth for Industrial and Specialities
• • Inventories of finished goods were relatively stabl e

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 – Q4

• •In total, cellulose prices in sales currency were stable
• •Weaker product mix due to lower sales of acetate cellulose
• •Higher sales prices and improved product mix in Bioethanol, but lower sales volume
• •Positive FX impact

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

Speciality Cellulose markets – full year

• •Cellulose prices were in line with 2017, but product mix affected the average price negatively
• • Sales of highly specialised grades decreased
• •Lower sales of acetate cellulose, market remained challenging
• •Continued growth in the ethers market
• • Higher sales prices and improved product mix for Bioethanol
• •Dehydration plant investment allows entire production as water-free bioethanol
• •Positive FX effects

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

Ingredients & Fine Chemicals markets – Q4 & full yea r

• • Ingredients
• • Increased sales prices and higher sales volume for bio-based vanillin vs Q4-17
• •Positive market trend continues
• • Increasing prices and higher sales volume in 2018 for bio-based vanillin

• •Sales revenues increased 32%

• • Fine Chemicals

• Higher deliveries of a key product vs Q4-17
• •Sales revenues increased by 2% in 2018

Borregaard portfolio - strategic priorities

• • Growth and specialisation within Performance Chemica and ls
• •Increased sales of high-value lignin products
• •Establish new lignin raw material sources
• • Develop BALI 1as a strategic lignin raw material option
• • Develop the unique biorefinery assets in Sarpsborg Develop
• •Leverage high-value raw material base in Performance Chemicals
• •Continue specialisation of Speciality Cellulose, Bioethanol and Ingredients
• •Strong focus on innovation and productivity efforts
• • Establish Cellulose Fibrils as a new business area
• •Based on core competence within wood chemistry and fine chemistry
• •Increased specialisation through high value added

Update on strategic priorities

Growth and specialisation within Performance Chemicals

• •50% volume growth in high-value lignin products from 2009 until 2017
• •Successful start-up of new Florida plant (1st phase) mid 2018
• •500 mNOK upgrade and increased specialisation in Sarpsborg (2019)
• •Extension of joint venture agreement in South Africa to 2032

Develop the unique biorefinery assets in Sarpsborg

• •Ice Bear project – speciality cellulose with ultra high purity (Q4-18)
• •High-end bioethanol expansion (Q1-18)
• Debottlenecking in Fine Chemicals (2017)
• •Lignin operation upgrade and increased specialisation (2019)

Establish Cellulose Fibrils as a new business area

• •Commercial-scale production facility in Sarpsborg completed in Q4-16
• Exilva market introduction ongoing
• •SenseFi decision pending

Strategic priorities – next steps

•Increased specialisation and volume growth

• •Successful market introduction of new lignin volumes from Florida
• •Ice Bear product range
• •Cellulose Fibrils
• •Grow specialities volume in Performance Chemicals and Speciality Cellulose

•Sustainability

•Increase market awareness of Borregaard's biobased products

•Ongoing and potential expansion initiatives

• •Complete lignin operation upgrade and increased specialisation in Sarpsborg (2019)
• •Florida lignin expansion – ²nd phase (50,000 mtds)
• •Exilva (Cellulose Fibrils) – ²nd phase (1,000 mtds)
• •Explore other specialisation and capacity expansion opportunities

Integral part of market offeringSustainability

^{R A W M A T E R I A L S P R O C E S S E S P R O D U C T S}

Natural, renewable, sustainable raw materials

Sustainable and certified wood

• •Documentation
• • PEFC1 and FSC1standards
• • Lignin raw materials from certified forests

Efficient and sustainable production and value chain

Reduced emissions improve LCA2

• Target based CO2-reductions
• Energy conservations
• •New/green energy sources
• •Reduced emissions to water and air
• •"Greener" logistical solutions

Sustainable biochemicals

Products add sustainable value to customers

• • Climate: LCA Climate 2shows favourable GHG footprint
• • Biobased: Natural raw materials preferredBiobased
• • EHS3: Non-toxic, harmless products

1 PEFC: Programme for the Endorsement of Forest Certification, FSC: Forest Stewardship Council2Life Cycle Analysis

3Environment, Health and Safety

Outlook

• • Performance Chemicals
• • Continued strong competition and further price pressure for lignin products to concrete admixtures expected to be partly compensated by diversification and specialisation in 2019
• •2019 sales volume forecast to increase by ~10%, mainly due to Florida ramp-up
• •Distribution costs will gradually decline over the next quarters
• •Fixed costs and depreciation for the Florida plant expected to be ~40 mNOK above 2018
• • Speciality Cellulose
• •Average cellulose price in sales currency expected to be in line with 2018 level
• •Improved product mix will compensate for weaker prices for acetate and textile cellulose
• • Wood prices will increase further from beginning of 2019, wood cost in H1-19 will increase by ~50 mNOK vs H1-18
• •Q1-19 sales volume expected to be lower than Q1-18 with similar product mix
• • Other Businesses
• •Ingredients' result expected to increase in 2019, driven by positive market trend for bio-based vanillin
• •No major changes expected in market conditions for Fine Chemicals
• • Sales will gradually increase for Cellulose Fibrils, but long lead-times for conversion of sales prospects. Remaining grant from EU Horizon 2020 will cover a smaller share of costs than in previous years

^{F I N A N C I A L P E R F O R M A N C E Q 4} - ^{1 8}

Borregaard key figures – Q4

• •Revenues 7% above Q4-17
• • EBITA adj. 1 94 mNOK for the Group
• •Strong improvement in Other Businesses, decline for Performance Chemicals and Speciality Cellulose
• • Continued challenging markets for concrete admixtures and acetate cellulose, partly off-set by strong performance in Ingredients and positive FX impact
• •Higher costs and depreciation (Florida plant, lignin distribution costs, wood costs)
• •EPS at NOK 0.80 (NOK 0.90)

Borregaard key figures – full year

• •Revenues up 4% vs 2017
• • Reduced EBITA adj. 1
• •Other Businesses improved, Performance Chemicals and Speciality Cellulose had weaker results
• • Strong development for bio-based vanillin, weaker markets for lignin products to concrete admixture and acetate cellulose
• •Increased costs and depreciation (wood and caustic soda, Florida plant, lignin distribution costs)
• •Positive FX impact
• • ROCE1impacted by strategic investments
• •EPS for 2018 ended at NOK 4.76 (5.66)

Performance Chemicals key figures – Q4

• •Revenues 6% above Q4-17
• 3% higher sales volume, driven by growth in Industrial and Specialities
• Full year growth 3%
• Average price in sales currency in line with Q4-17
• • 22 mNOK higher fixed costs and depreciation for Florida plant
• Distribution costs slightly reduced from Q3-18
• •Insignificant net FX impact

• • Full year EBITA adj. 1314 mNOK (449 mNOK)

• • EBITA adj. margin1decreased significantly vs Q4-17

• • Full year EBITA adj. margin114.0% (20.6%)

Speciality Cellulose key figures – Q4

• Revenues 2% lower than in Q4-17
• Weaker product mix for cellulose
• •Lower sales volumes
• Positive FX effects
• 2% lower revenues for the full year
• •Weaker product mix, stable sales price in total
• •Increased wood costs
• •Bioethanol result in line with Q4-17
• •Positive net FX impact

• • Full year EBITA adj. 1257 mNOK (350 mNOK)

• • EBITA adj. margin1declined vs Q4-17

• • Full year EBITA adj. margin115.4% (20.6%)

Other Businesses key figures – Q4

• •Revenues 33% above Q4-17
• •Higher sales in Ingredients and Fine Chemicals

• •Full year growth 18%

• • Ingredients: Stronger result from increased prices Ingredients: and higher volume for bio-based vanillin

• • Fine Chemicals: Higher sales but increased costs, Fine EBITA adj1in line with Q4-17
• •Cellulose Fibrils had a slightly improved result
• • Corporate costs unchangedcosts
• •Net FX effects slightly positive for Other Businesses
• • Full year EBITA adj. 19 mNOK (-50 mNOK)

Currency impact

• • Net FX EBITA adj.¹ impact +25 mNOK vs Q4-17
• •Includes change in hedging effects and based on estimated FX exposure
• •Net FX EBITA adj.¹ impact YTD +45 mNOK
• • Net FX EBITA adj.¹ impact in 2019 estimated to be +70 mNOK vs 2018
• •Assuming rates as of 30 January (USD 8.48 and EUR 9.69) on expected FX exposure
• •Net FX EBITA adj.¹ impact in Q1 estimated to be +30 mNOK vs Q1-18
• •Significant FX exposure, but delayed impact of FX rate fluctuations due to hedging policy

100,2

102,2

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.

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

Cash flow, investments and NIBD

• • Cash flow from operations1 decreased vs Q4-17
• •Mainly a result of unfavourable net working capital development in the quarter
• • Investments lower than Q4-17 and lower than forecast
• •Total carry-over to 2019 ~75 mNOK
• • Mainly related to lignin operation upgrade in Norway and Florida plant, both projects on time and with ~50 mNOK lower than budgeted investment
• •NIBD¹ increased by 201 mNOK in Q4

Updated investment forecast 2019-2020

• • Replacement investments
• •Targeted at depreciation level
• •Carry-over from 2018 ~25 mNOK
• • Expansion investments
• • New plant LignoTech Florida phase 1: 110 mUSD budget (100%) 900 mNOK (late 2016 to mid 2019)
• • Lignin operation upgrade in Norway: 500 mNOK budget, approx. 70% expansion(mid 2017 to Q3 2019)
• • ~50 mNOK carry-over from 2018 for the two lignin projects
• • Florida and lignin operation upgrade are on time and with ~50 mNOK lower than budgeted investment
• •Other smaller expansion projects

• • New projects may lead to additional investments

• •Per A Sørlie, President & CEO

• •Per Bjarne Lyngstad, CFO

^{A P P E N D I X}

Borregaard – key figures

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

Operating revenues and EBITA adj.1per segment

	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 4- 4- 2 2 0 0 1 1 8 8
d Bo rr eg aa r	1 2 1 9	1 1 1 3 7	7 %
fo he ls C ica Pe r rm an ce m	2 5 5	2 5 1	6 %
l l lu lo Sp ia i Ce ty ec se	4 2 7	4 3 5	% -2
he O in Bu t r s es se s	2 3 5	9 0 1	3 3 %
l E im in io t a ns	-1 3	-9

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

4 %
3 %
%
8 %

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	Y Y Y T T T D- D- D- 2 2 2 0 0 0 1 1 1 8 8 8	Y Y T T D- D- 2 2 0 0 1 1 7 7	ha C ng e	1 d E B I T A j. a	Y T D- 2 0 1 8	Y T D- 2 0 1 7	ha C ng e
d Bo rr eg aa r	4 4 7 7 8 8 5 5	4 4 6 6 1 1 8 8	4 %	d d Bo Bo rr rr eg eg aa aa r r	5 5 8 8 0 0	7 4 9	% -2 3
fo he ls C ica Pe r rm an ce m	2 2 3 7	2 6 1 7	3 %	fo he ls C ica Pe r rm an ce m	3 1 4	9 4 4	-3 0 %
l l lu lo Sp ia i Ce ty ec se	1 6 6 9	1 6 9 8	-2 %	l l lu lo Sp ia i Ce ty ec se	2 5 7	3 5 0	-2 7 %
he O Bu in t r s es se s	9 2 7	7 8 3	1 8 %	he O Bu in t r s es se s	9	-5 0

Cash flow

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

Balance sheet

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

¹ Non-GAAP measure, see Appendix for definition.

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 4- 2 0 1 8	Q Q 4- 2 2 0 0 1 7 4- 1 7	Y T D- 2 2 0 0 1 8 8 Y T D- 1	Y T D- 2 2 0 0 1 7 Y T D- 1 7
Ne in t te t e re s xp en se s	-1 2	-4	-3 2	-1 8
/ lo Cu in rre nc y g a ss	0	1	-3	5
he f l O in ia i t te t r an c m s, ne	3	-7	2 1	-8
f l N in ia i t te e an c m s	-9	-1 0	-1 4	-2 1

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

Contracted FX hedges with EBITA adj. impact (as of 30.01.19) Hedging effects by segment effects by segment

NOK million Q4-18 Q4-17 YTD-18 YTD-17Performance Chemicals -1 ^{0 1} -18 Speciality Cellulose -1 -6 -3 -36 OtherBusinesses ¹ -4 -9 -18 Borregaard - Borregaard-1 -10 -11 -72

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)

Credit facilities, solidity and debt

Long-term credit facilitiesterm credit

• • 1,500 mNOK revolving credit facilities, maturity 2021
• •200 mNOK 5-year bond issue, maturity 2019
• •400 mNOK 5-year bond issue, maturity 2023
• •40 mEUR 10-year loan, maturity 2024
• • 60 mUSD term loan for LT Florida, tenor 8.5 years from completion

Short-term credit facilities term credit facilities

•225 mNOK overdraft facilities

Solidity (covenants)

• • Equity ratio155.8% (> 25%)
• • Leverage ratio1LTM 1.4 (< 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 fourth quarter of 2018, held on 31 January 2019. 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.