Borregaard

Investor Presentation • Jul 17, 2024

2 nd Quarter 2024

Sarpsborg, 17 July 2024

Agenda

Per A Sørlie, President & CEO

• Highlights
• Business segments
• Other matters
• Outlook

Per Bjarne Lyngstad, CFO

Financial performance

Highlights – 2 nd quarter 2024

• EBITDA¹ NOK 510 million (NOK 537 million)
• Improved product mix and strong result in BioSolutions
• Lower sales prices and higher wood costs for BioMaterials
• Solid result in Fine Chemicals
• Negative net currency effects
• Strong cash flow

BioSolutions markets – Q2

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

Average price in sales currency 5% above Q2-23

Improved product mix

4

Strong sales to agriculture and batteries

Sales volume 2% above Q2-23

Increased sales of specialities

Biovanillin market continued to be impacted by high global supply of synthetic products

BioMaterials markets – Q2

40,0 36,8 34,9 32,6 44,5 38,6 0 10 20 30 40 50 Q1 Q2 Q3 Q4 '000 mt Sales volume ²⁰²³ 2024

Sales price and sales volume include speciality cellulose and cellulose fibrils

Average price in sales currency 8% below Q2-23

• Lower sales prices
• Average price in line with Q1-24

Sales volume 5% above Q2-23

Negative FX impact

Fine Chemicals markets – Q2

Sales revenues include fine chemical intermediates and bioethanol

• Fine chemical intermediates: Favourable product mix
• Bioethanol: High deliveries and stable prices, deliveries slightly below Q2-23
• Slightly negative net FX impact

Other matters and subsequent events

BORREGAARD INVESTS FURTHER INTO ALGINOR

ANTI-DUMPING INVESTIGATIONS CHINESE VANILLIN

• Borregaard participated with its fully diluted pro-rata share in the 400 mNOK capital raise in Alginor1) to fund the next step of its biorefinery expansion
• Repair offering towards existing and new shareholders
• Subsequent offering towards Borregaard to ensure 35% fully diluted ownership
• After these transactions, which were executed in July, Borregaard's investment in Alginor amounts to 419 mNOK
• Both in EU2) and the US3), anti-dumping investigations have been initiated for all grades of vanillin produced in China
• May lead to a positive price and demand impact for biovanillin from Borregaard, depending on the outcome and timeline of the investigations

2) https://eur-lex.europa.eu/eli/C/2024/3241

¹⁾ https://alginor.no/2024/06/nok-400-million-private-placement/

³⁾ https://www.trade.gov/initiation-ad-and-cvd-investigations-vanillin-china 7

Outlook

BioSolutions

• Sales volume in 2024 forecast to be ≈330,000 tonnes
• Sales volume in Q3 is expected to be 80-85,000 tonnes
• Biovanillin market will continue to be impacted by the high supply of synthetic vanillin products

BioMaterials

• Sales volume in 2024 is forecast to be higher than the production output, highly specialised grades expected to be higher vs 2023
• In Q3, sales volume is expected to be 42-44,000 tonnes
• Sales price increases have been implemented for certain cellulose grades in H2-24 with a positive impact of 1-2% on the total sales volume

Fine Chemicals

• Sales volume for fine chemical intermediates is expected to increase vs 2023
• Market conditions for advanced bioethanol continue to be favourable, sales prices and volume expected largely in line with 2023

Costs development and impact from investment

• Wood costs will increase by ≈8% in H2-24 vs H1-24
• In Q3, lower energy and other raw material costs expected to partly compensate for increased wood costs vs Q3-23
• Borregaard will benefit from the investment to reduce CO² emissions and improve energy efficiency and flexibility

Wars and conflicts as well as uncertainty in the global economy may impact Borregaard's markets and costs

Financial performance Q2-24

Borregaard key figures – Q2

Revenues 1% below Q2-23

EBITDA¹ 510 mNOK for the Group

• Increased result in BioSolutions
• Lower result in BioMaterials
• Strong result slightly below Q2-23 in Fine Chemicals
• Negative net currency effects

10

Earnings per share (EPS) NOK 2.45 (NOK 2.84)

BioSolutions key figures – Q2

• Revenues 3% above Q2-23

• Higher sales volume and improved product mix

• Improved product mix

• Reduced energy costs
• Negative impact from cost inflation and FX effects

• Strong EBITDA margin¹ , 2.4%-points above Q2-23

11

BioMaterials key figures – Q2

12

Fine Chemicals key figures – Q2

• Revenues 2% below Q2-23

• Slightly lower deliveries of bioethanol

• Fine chemical intermediates: Favourable product mix
• Bioethanol: High deliveries and stable prices, but higher costs
• Slightly negative net FX impact

• Solid EBITDA margin¹

Currency impact

Net FX EBITDA¹ impact ≈-30 mNOK vs Q2-23

• Includes change in hedging effects and based on estimated FX exposure
• Net FX EBITDA¹ impact in 2024 estimated to be ≈-15 mNOK vs 2023
  • Assuming rates as of 16 July (USD 10.81 and EUR 11.78) on expected FX exposure
  • Net FX EBITDA¹ impact in Q3 estimated to be ≈+15 mNOK vs Q3-23
• Significant FX exposure, but delayed impact of FX rate fluctuations due to hedging policy

¹ Alternative performance measure, see Appendix for definition

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

³ Currency basket based on Borregaard's net exposure on EBITDA¹ in 2023 (=100): USD 60% (≈232 mUSD), EUR 42% (≈149 mEUR), Other -2% (GBP, BRL, SGD, SEK)

Cash flow, investments and NIBD

Strong cash flow in Q2

Significant decrease in net working capital, positively affected by a reduction in accounts receivable

95

20

115

137

35

172

Total investments 172 mNOK

Specialisation within BioSolutions largest expansion expenditure

NIBD¹ in line with Q1, dividend payment offset by strong cash flow

Leverage ratio¹ 1.23 (1.25)

Equity ratio1 54% (47%)

Questions?

Per A Sørlie, President & CEO

Per Bjarne Lyngstad, CFO

Please note that you can submit questions online during the webcast

Appendix

Borregaard – key figures

Amounts in NOK million	Q2-24	Q2-23	Change	YTD-24	YTD-23	Change
Operating revenues	1 949	1 963	-1 %	3 924	3 813	3 %
EBITDA1	510	537	-5 %	952	972	-2 %
Depreciation property, plant and equipment	-134	-116		-267	-230
Amortisation intangible assets	- 2	- 2		- 3	- 3
Operating profit	374	419	-11 %	682	739	-8 %
Financial items, net	-52	-40		-99	-68
Profit before taxes	322	379	-15 %	583	671	-13 %
Income tax expenses	-77	-91		-138	-162
Profit for the period	245	288	-15 %	445	509	-13 %
Profit attributable to non-controlling interests	1	5		1	- 5
Profit attributable to owners of the parent	244	283		444	514
Cash flow from operating activities (IFRS)	546	411		363	522
Earnings per share	2,45	2,84	-14 %	4,45	5,16	-14 %
EBITDA margin1	26,2 %	27,4 %		24,3 %	25,5 %

Operating revenues and EBITDA¹ per segment

	Amounts in NOK million				Amounts in NOK million
Operating revenues	Q2-24	Q2-23	Change	EBITDA1	Q2-24	Q2-23	Change
Borregaard	1 949	1 963	-1 %	Borregaard	510	537	-5 %
BioSolutions	1117	1087	3 %	BioSolutions	318	284	12 %
BioMaterials	622	661	-6 %	BioMaterials	9 0	143	-37 %
Fine Chemicals	223	227	-2 %	Fine Chemicals	102	110	-7 %
Eliminations	-13	-12

Amounts in NOK million				Amounts in NOK million
Borregaard	1 949	1 963	-1 %	Borregaard	510	537	-5 %
BioSolutions	1117	1087	3 %	BioSolutions	318	284	12 %
BioMaterials	622	661	-6 %	BioMaterials	9 0	143	-37 %
Fine Chemicals	223	227	-2 %	Fine Chemicals	102	110	-7 %
Eliminations	-13	-12

Amounts in NOK million Amounts in NOK million Operating revenues YTD-24 YTD-23 Change EBITDA¹ Eliminations -22 -21

Operating revenues	YTD-24	YTD-23	Change	EBITDA1	YTD-24	YTD-23	Change
Borregaard	3 924	3 813	3 %	Borregaard	952	972	-2 %
BioSolutions	2 205	2 082	6 %	BioSolutions	582	508	15 %
BioMaterials	1 326	1 345	-1 %	BioMaterials	201	270	-26 %
Fine Chemicals	415	407	2 %	Fine Chemicals	169	194	-13 %
Eliminations	-22	-21

¹ Alternative performance measure, see Appendix for definition

Balance sheet

Amounts in NOK million	30.6.2024	31.3.2024	31.12.2023
Assets:
Intangible assets	7 6	8 2	8 4
Property, plant and equipment	4 782	4 728	4 661
Right-of-use assets	497	524	527
Other assets	390	362	437
Investments in joint venture/associate companies	278	286	289
Non-current assets	6 023	5 982	5 998
Inventories	1 356	1 348	1 447
Receivables	1 494	1 753	1 201
Cash and cash deposits	311	200	469
Current assets	3 161	3 301	3 117
Total assets	9 184	9 283	9 115
Equity and liabilities:
Group equity	4 907	4 835	4 855
Non-controlling interests	4 2	4 2	3 9
Equity	4 949	4 877	4 894
Provisions and other liabilities	366	441	401
Interest-bearing liabilities	2 005	2 043	2 016
Non-current liabilities	2 371	2 484	2 417
Interest-bearing liabilities	478	330	246
Other current liabilities	1 386	1 592	1 558
Current liabilities	1 864	1 922	1 804
Equity and liabilities	9 184	9 283	9 115
Equity ratio1 (%):	53,9 %	52,5 %	53,7 %

¹ Alternative performance measure, see Appendix for definition

Amounts in NOK million	Q2-24	Q2-23	YTD-24	YTD-23	FY-2023
Amounts in NOK million
Profit before taxes	322	379	583	671	1 124
Amortisation, depreciation and impairment charges	136	118	270	233	490
Change in net working capital, etc	194	1 9	-272	-174	205
Dividend/share of profit from JV & associate companies	7	2	1 0	8	9
Taxes paid	-113	-107	-228	-216	-265
Cash flow from operating activities	546	411	363	522	1 563
Investments property, plant and equipment and intangible assets *	-172	-137	-287	-244	-667
Investment in associate companies & bio-based start-ups*	-	-124	-	-124	-171
Other capital transactions	4	3	7	5	9
Cash flow from Investing activities	-168	-258	-280	-363	-829
Dividends	-374	-324	-374	-324	-324
Proceeds from exercise of options/shares to employees	1 5	4	5 0	4 5	4 9
Buy-back of treasury shares	-28	- 8	-56	-49	-92
Gain/(loss) on hedges for net investments in subsidiaries	1 0	-30	-40	-88	-38
Net paid to/from shareholders	-377	-358	-420	-416	-405
Proceeds from interest-bearing liabilities	500	800	500	800	800
Repayment from interest-bearing liabilities	-357	-446	-424	-460	-843
Change in interest-bearing liabilities/other instruments	- 6	1 9	3 0	6 0	3 3
Change in net interest-bearing liablities	137	373	106	400	-10
Cash flow from financing activities	-240	1 5	-314	-16	-415
Change in cash and cash equivalents	138	168	-231	143	319
Cash and cash equivalents at beginning of period	8 1	105	429	111	111
Change in cash and cash equivalents	138	168	-231	143	319
Currency effects cash and cash equivalents	- 7	5	1 4	2 4	- 1
Cash and cash equivalents at the close of the period	212	278	212	278	429
* Investment by category Replacement Investments	137	103	232	190	550
Expansion investments including investment in associate companies and bio-based start-ups	3 5	158	5 5	178	288
Total investments including investment in associate companies and bio-based start-ups	172	261	287	368	838

Cash flow

Net financial items & net interest-bearing debt¹

Amounts in NOK million
------------------------	--

Amounts in NOK million
Net financial items	Q2-24	Q2-23	YTD-24	YTD-23
Net interest expenses	-42	-35	-81	-64
Currency gain/loss	- 2	- 1	- 2	5
Share of profit/-loss from an associate	- 7	- 1	-10	- 3
Other financial items, net	- 1	- 3	- 6	- 6
Net financial items	-52	-40	-99	-68

Amounts in NOK million Net interest-bearing debt ¹ (NIBD) 30.6.2024 31.3.2024 31.12.2023 Non-current interest-bearing liabilities 2 005 2 043 2 016 Current interest-bearing liabilities including overdraft 478 330 246 Non-current interest-bearing receivables (included in "Other Assets") - 2 - 2 - 2 Cash and cash deposits -311 -200 -469 Net interest-bearing debt ¹ (NIBD) 2 170 2 171 1 791 - of which impact from IFRS 16 leases 539 564 563

Currency hedging strategy

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 10.00 to 10.50 USD; gradually increased at effective rates from 9.00 to 9.50
• Contracts³ : 100% hedged

Balance sheet exposure hedged 100%

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

	USD million	USD rate	EUR million	EUR rate
Q3-2024	47	9.61	33	10.72
Q4-2024	45	9.59	34	10.62
RoY 2024	92	9.60	67	10.67
2025	158	9.92	125	10.89
2026	135	10.40	106	11.68
2027	62	10.49	53	11.87

Contracted FX hedges with EBITDA impact (as of 16.07.24) Hedging effects by segment

NOK million	YTD-24	YTD-23	Q2-24	Q2-23
BioSolutions	-91	-54	-47	-29
BioMaterials	-72	-45	-38	-26
Fine Chemicals	-23	-14	-12	-10
Borregaard	-186	-113	-97	-65

¹ Alternative performance measure, see Appendix for definition

² Hedging done mainly in the Norwegian company

³ Strict 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 facilities

• 1,500 mNOK revolving credit facilities, maturity 2025 and 2027, margin linked to sustainability targets
• 500 mNOK 5-year green bonds, maturity 2028 (issued June 2023)
• 40 mEUR 10-year loan, maturity 2024
• 50 mUSD 10-year loan, maturity 2032
• 60 mUSD term loan for LT Florida, maturity 2027

Short-term credit facilities

• 225 mNOK overdraft facilities
• 15 mUSD overdraft facility in LignoTech Florida
• 200 mNOK commercial paper (maturity September 2024)

Solidity

• Equity ratio¹ 53.9%
• Leverage ratio¹ LTM 1.23 (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.

• 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 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.
• 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 expenses) 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, right-of-use assets 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 second quarter of 2024, held on 17 July 2024. 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.