Borregaard

Investor Presentation • Jul 15, 2022

2nd Quarter 2022

Oslo, 15 July 2022

Agenda

Per A Sørlie, President & CEO

• Highlights
• Business segments
• Outlook

2

Per Bjarne Lyngstad, CFO

Financial performance

Highlights – 2nd quarter 2022

• All-time high EBITDA1 NOK 445 million (NOK 416 million)
• Increased sales prices and strong product mix in BioSolutions
• Higher sales prices but lower deliveries in BioMaterials and Fine Chemicals
• Higher energy, raw material and freight costs
• Positive net currency impact
• Cash flow negatively affected by significant increase in net working capital

Sales price and sales volume include lignin-based biopolymers and biovanillin

Average price in sales currency 23% above Q2-21

• Higher sales prices and strong product mix
• Positive development for applications within agriculture, construction, oilfield chemicals and batteries
• Positive FX impact

Sales volume 10% lower vs Q2-21

Q2-21 positively affected by sales from inventories

Tight market for synthetic vanillin and ethyl vanillin continued to have a positive impact

¹ Average sales price is calculated using actual FX rates, excluding hedging impact 4

Sales price and sales volume include speciality cellulose and cellulose fibrils

Average price in sales currency 23% higher than Q2-21

• Higher sales prices
• Speciality cellulose market continued to be tight with strong demand
• Positive FX impact

Lower deliveries of speciality cellulose

• Timing of shipments
• Sales from inventory in Q2-21

Favourable product mix for fine chemical intermediates Higher prices for bioethanol Lower deliveries

Outlook

BioSolutions

• The positive market development expected to continue in H2, additional price increases implemented from 1 July
• Total sales volume expected to be slightly below the 2021 volume
• The new biovanillin capacity will continue to be gradually phased into the market
• The market balance for synthetic vanillin and ethyl vanillin expected to be affected by increased supply in H2

BioMaterials

• Average price in sales currency will be approximately 30% above the 2021 level in Q3, following additional 10% price increase (surcharge)
• Total sales volume for the full year expected to be lower than in 2021, and aligned with the production volume
• Volume of highly specialised grades expected to be in line with 2021
• Sales growth expected to continue for cellulose fibrils

Fine Chemicals

7

• Favourable market conditions for biofuel in several EU countries with increased sales prices
• Bioethanol sales will mainly be into these markets in 2022
• Deliveries of fine chemical intermediates and bioethanol expected to be higher in H2 vs H1-22

Energy and raw material costs will increase further in H2 vs H1-22

• Energy spot prices represent the largest uncertainty for the rest of the year
• Wood costs will increase by 25-30% in H2 vs H1-22
• Cost inflation and consequences of the war in Ukraine may impact the global economy and Borregaard's markets
• Borregaard will continue to closely monitor cost inflation and market development and implement relevant measures if required

Financial performance Q2-22

Revenues 15% above Q2-21

All-time high EBITDA1 445 mNOK for the Group

• Increased result in BioSolutions and Fine Chemicals, a decrease in BioMaterials
• Positive net FX effect

Earnings per share (EPS) NOK 2.52 (NOK 2.34)

Other income and expenses +12 mNOK related to sale of assets in the closed lignin operation in South Africa

• • Revenues 24% above Q2-21
• Higher sales prices and a strong product mix

• 10% lower sales volume

• • Increased sales prices and a strong product mix

• Cost increases for energy, raw materials and freight
• Positive net FX effects

22,9 • Lower EBITDA margin1 vs Q2-21

10 ¹ Alternative performance measure, see Appendix for definition

11 ¹ Alternative performance measure, see Appendix for definition • Revenues increased by 12% vs Q2-21

• Higher sales prices for speciality cellulose

• Lower deliveries

• Higher sales prices

• Lower deliveries
• Increased energy and raw material costs
• Positive net FX impact

• EBITDA margin1 4%-points below Q2-21

^{12 1} Alternative performance measure, see Appendix for definition

• Revenues decreased by 23% vs Q2-21

• Lower deliveries

• 2022 • Fine chemical intermediates, favourable product mix and high production volume, but increased raw material costs

  • Prices for bioethanol increased
  • • Lower deliveries in both product groups
  • Slightly positive net FX effects

• EBITDA margin1 14%-points above Q2-21

Net FX EBITDA1 impact ≈60 mNOK vs Q2-21

Currency impact

• Includes change in hedging effects and based on estimated FX exposure
• Net FX EBITDA1 impact in 2022 estimated to be ≈215 mNOK vs 2021
  • Assuming rates as of 14 July (USD 10.25 and EUR 10.25) on expected FX exposure
  • Net FX EBITDA1 impact in Q3 estimated to be ≈60 mNOK vs Q3-21

• Significant FX exposure, but delayed impact of FX rate fluctuations due to hedging policy

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

• 13 ³ Currency basket based on Borregaard's net exposure on EBITDA1 in 2021 (=100): USD 53% (≈198 mUSD), EUR 44% (≈139 mEUR), Other 3% (GBP, BRL, JPY, SEK)

¹ Alternative performance measure, see Appendix for definition

Cash flow, investments and NIBD

Cash flow negatively affected by increase in net working capital

Increase in accounts receivable and higher inventory values

Investments below Q2-21

NIBD1 increased by 570 mNOK in Q2 mainly due to dividend payment of 499 mNOK

Leverage ratio1 1.40 (1.29)

Equity ratio1 51.8% (56.2%)

14 ¹ Alternative performance measure, see Appendix for definition

Questions?

Per A Sørlie, President & CEO

Per Bjarne Lyngstad, CFO

Appendix

Borregaard – key figures
Amounts in NOK million	Q2-22	Q2-21	Change	YTD-22	YTD-21	Change
Operating revenues EBITDA1	1 744 445	1 511 416	15 % 7 %	3 359 845	2 930 718	15 % 18 %
Depreciation property, plant and equipment	-110	-101		-218	-207
Amortisation intangible assets	-1	-1		-2	-2
Other income and expenses1	12	0		12	0
Operating profit	346	314	10 %	637	509	25 %
Financial items, net	-24	-18		-38	-37
Profit before taxes	322	296	9 %	599	472	27 %
Income tax expenses	-78	-67		-146	-110
Profit for the period	244	229	7 %	453	362	25 %
Profit attributable to non-controlling interests	-8	-4		-16	-17
Profit attributable to owners of the parent	252	233		469	379
Cash flow from operating activities (IFRS)	182	458		110	697
Earnings per share	2,52	2,34	8 %	4,70	3,81	23 %
EBITDA margin1
	25,5 %	27,5 %		25,2 %	24,5 %

17 ¹ Alternative performance measure, see Appendix for definition

Operating revenues and EBITDA1 per segment

Operating revenues and EBITDA1				per segment
Eliminations	-13	-11
Operating revenues	YTD-22	YTD-21	Change	EBITDA1

	Amounts in NOK million			EBITDA1	Amounts in NOK million
Operating revenues	Q2-22	Q2-21	Change		Q2-22	Q2-21	Change
Borregaard	1 744	1 511	15 %	Borregaard	445	416	7 %
BioSolutions	1098	885	24 %	BioSolutions	305	272	12 %
BioMaterials	540	482	12 %	BioMaterials	91	102	-11 %
Fine Chemicals	119	155	-23 %	Fine Chemicals	49	42	17 %
Eliminations	-13	-11
	Amounts in NOK million				Amounts in NOK million
	YTD-22	YTD-21	Change	EBITDA1	YTD-22	YTD-21	Change
Operating revenues
Borregaard	3 359	2 930	15 %	Borregaard	845	718	18 %
BioSolutions	2 046	1 697	21 %	BioSolutions	566	477	19 %
BioMaterials	1 072	1 005	7 %	BioMaterials	188	166	13 %
Fine Chemicals	262	245	7 %	Fine Chemicals	91	75	21 %

					YTD-22	YTD-21	Change
Borregaard	3 359	2 930	15 %	Borregaard	845	718	18 %
			21 %	BioSolutions	566	477	19 %
BioSolutions	2 046	1 697
BioMaterials	1 072	1 005	7 %	BioMaterials	188	166	13 %
Fine Chemicals	262	245	7 %	Fine Chemicals	91	75	21 %

YTD-22	YTD-21	Change

Amounts in NOK million	Q2-22	Q2-21	YTD-22	YTD-21	FY-2021
Amounts in NOK million
Profit before taxes	322	296	599	472	873
Amortisation, depreciation and impairment charges	111	102	220	209	420
Change in net working capital, etc	-221	69	-602	74	256
Dividend/share of profit from JV & associate company	31	-	31	-	6
Taxes paid	-61	-9	-138	-58	-124
Cash flow from operating activities	182	458	110	697	1 431
Investments property, plant and equipment and intangible assets *	-81	-125	-168	-220	-556
Investment in associate company	-	-	-	-	-145
Other capital transactions	4	-1	6	3	9
Cash flow from Investing activities	-77	-126	-162	-217	-692
Dividends	-499	-249	-499	-249	-249
Proceeds from exercise of options/shares to employees	7	17	34	46	59
Buy-back of shares	-19	-32	-23	-88	-118
Gain/(loss) on hedges for net investments in subsidiaries	-111	8	-80	17	-14
Net paid to/from shareholders	-622	-256	-568	-274	-322
Proceeds from interest-bearing liabilities	737	200	837	300	300
Repayment from interest-bearing liabilities	-339	-239	-353	-456	-814
Change in interest-bearing receivables/other liabilities	70	2	68	-6	-1
Change in net interest-bearing liablities	468	-37	552	-162	-515
Cash flow from financing activities
	-154 -49	-293	-16	-436	-837
		39	-68	44	-98
Change in cash and cash equivalents
Cash and cash equivalents at beginning of period	-16	100	5	96	96
Change in cash and cash equivalents	-49	39	-68	44	-98
Currency effects cash and cash equivalents	27	4	25	3	7
Cash and cash equivalents at the end of the period	-38	143	-38	143	5
* Investment by category Replacement Investments	57	93	128	152	398

19 ¹ Alternative performance measure, see Appendix for definition

Balance sheet

Amounts in NOK million	30.06.2022	31.03.2022	31.12.2021
Assets:
Intangible assets	86	86	89
Property, plant and equipment	4 273	4 180	4 191
Right-of-use assets	345	351	351
Other assets	237	393	339
Investments in joint venture/associate company	144	174	173
Non-current assets	5 085	5 184	5 143
Inventories	1 035	878	792
Receivables	1 469	1 416	1 107
Cash and cash deposits	90	103	124
Current assets	2 594	2 397	2 023
Total assets	7 679	7 581	7 166
Equity and liabilities: Group equity	3 899	4 602	4 222
Non-controlling interests	76	75	84
Equity	3 975	4 677	4 306
Provisions and other liabilities	361	274	257
Interest-bearing liabilities	1 926	1 418	1 320
Non-current liabilities	2 287	1 692	1 577
Interest-bearing liabilities	272	223	224
Other current liabilities	1 145	989	1 059
Current liabilities	1 417	1 212	1 283
Equity and liabilities	7 679	7 581	7 166
Equity ratio1 (%):	51,8 %	61,7 %	60,1 %

20 ¹ Alternative performance measure, see Appendix for definition

Net financial items & net interest-bearing debt1

Net financial items & net interest-bearing debt1
Amounts in NOK million
Net financial items	Q2-22	Q2-21	YTD-22	YTD-21
Net interest expenses	-16	-15	-29	-31
Currency gain/loss	-7	0	-6	1
Share of profit/-loss from an associate	0	0	-1	0 -7
Other financial items, net Net financial items	-1 -24	-3 -18	-2 -38	-37

Amounts in NOK million Net interest-bearing debt1 (NIBD)	30.06.2022	31.03.2022	31.12.2021
Non-current interest-bearing liabilities	1 926	1 418	1 320
Current interest-bearing liabilities including overdraft of cashpool	272	223	224
Non-current interest-bearing receivables (included in "Other Assets")	-3	-3	-3
Cash and cash deposits	-90	-103	-124
Net interest-bearing debt1 (NIBD)	2 105	1 535	1 417

21 ¹ Alternative performance measure, see Appendix for definition

Currency hedging strategy

Hedging based on expected EBITDA1 impact2

• Base hedge: 75%/50% on a rolling basis for 6/9 months for major currencies
• Extended hedge: 75%/50% of the next 24/36 months if USD and EUR are above defined levels EUR; gradually increased at effective rates from 9.25 to 9.75 USD; gradually increased at effective rates from 8.00 to 8.50
• Contracts3 : 100% hedged

Net investments in subsidiaries hedged up to 90% of book value in major currencies

				Purpose is to delay effects of currency fluctuations and secure competitiveness
	Hedging based on expected EBITDA1	impact2
				Base hedge: 75%/50% on a rolling basis for 6/9 months for major currencies
				EUR; gradually increased at effective rates from 9.25 to 9.75 USD; gradually increased at effective rates from 8.00 to 8.50	Extended hedge: 75%/50% of the next 24/36 months if USD and EUR are above defined levels
	: 100% hedged
	Balance sheet exposure hedged 100%
				Net investments in subsidiaries hedged up to 90% of book value in major currencies
	Contracted FX hedges with EBITDA impact (as of 14.07.22)					Hedging effects by segment
	USD million	USD rate	EUR million	EUR rate
Q3-2022	37	8.97	35	10.55
	35	9.07	34	10.65
Q4-2022
RoY 2022	72	9.02	69	10.60
2023	142	9.20	112	10.82
2024	122	8.89	98	10.58
2025	55	9.28	47	10.60

				Purpose is to delay effects of currency fluctuations and secure competitiveness
	Hedging based on expected EBITDA1	impact2
				Base hedge: 75%/50% on a rolling basis for 6/9 months for major currencies Extended hedge: 75%/50% of the next 24/36 months if USD and EUR are above defined levels
				EUR; gradually increased at effective rates from 9.25 to 9.75 USD; gradually increased at effective rates from 8.00 to 8.50
Contracts3	: 100% hedged
	Balance sheet exposure hedged 100%
				Net investments in subsidiaries hedged up to 90% of book value in major currencies
	Contracted FX hedges with EBITDA impact (as of 14.07.22)
	USD million	USD rate	EUR million	EUR rate
Q3-2022	37	8.97	35	10.55
Q4-2022	35	9.07	34	10.65
	72	9.02	69	10.60
RoY 2022			112	10.82
2023	142	9.20
2024	122	8.89	98	10.58
2025	55	9.28	47	10.60

22 3

Credit facilities, solidity and debt

Long-term credit facilities

• 1,500 mNOK revolving credit facilities, maturity 2024 and 2026, margin linked to sustainability targets • 40 mEUR 10-year loan, maturity 2024 • 50 mUSD 10-year loan, maturity 2032 (drawn in April 2022) • 60 mUSD term loan for LT Florida, • 100 mNOK commercial paper
• 400 mNOK 5-year bond issue, maturity 2023
• tenor 8.5 years from completion

Short-term credit facilities

- 225 mNOK overdraft facilities

Solidity

• Equity ratio1 51.8%
• Leverage ratio1 LTM 1.40 (covenant < 3.50)

Alternative performance 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 Alternative performance 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 Alternative performance measures should not be viewed in isolation or as an alternative to the equivalent GAAP measure. viewed as reliable indicators of future earnings based on the business areas' normal operations. These items will be included in the Group's operating expenses) divided by average capital employed based on the ending balance of the last five quarters. Capital employed is defined by Borregaard as

• EBITDA: Operating profit before depreciation, amortisation and other income and expenses.
• EBITDA margin: EBITDA divided by operating revenues
• 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 profit.
• Leverage ratio: Net interest-bearing debt divided by last twelve months' (LTM) EBITDA.
• Net interest-bearing debt (NIBD): Interest-bearing liabilities minus interest-bearing assets.
• Return on capital employed (ROCE): Last twelve months' (LTM) capital contribution (operating profit before amortisation and other income and the total of net working capital, intangible assets, property, plant and equipment, right-of-use assets and investment in joint venture minus net pension liabilities.

Important notice

persons'). Any person who is not a relevant person should not act or rely on this presentation or any of its contents.

This presentation is being made only to, and is only directed at, persons to whom such presentation may lawfully be communicated ('relevant 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. statements. Although Borregaard believes that its expectations and the presentation are based upon reasonable assumptions, it can give no Borregaard is making no representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the presentation, herein will not be updated. The slides should also be read and considered in connection with the information given orally during the

Important factors may lead to actual profits, results and developments deviating substantially from what has been expressed or implied in such assurance that those expectations will be achieved or that the actual results will be as set out in 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 second quarter of 2022, held on 15 July 2022. Information contained presentation.