4th Quarter 2020 - GlobeNewswire

4th Quarter 2020

Sarpsborg, 3 February 2021

Agenda

2

Per A Sørlie, President & CEO

Highlights

Proposed dividend

Business segments

Outlook

Per Bjarne Lyngstad, CFO

Financial performance

Highlights – 4th quarter 2020

3

EBITDA1 NOK 263 million (NOK 183 million)

Improved result in all business areas

Improved product mix for biopolymers and lower costs in BioSolutions

Lower wood and energy costs and high deliveries in BioMaterials

Favourable product mix in pharma intermediates and higher bioethanol sales volume

Strong cash flow

1) Alternative performance measure, see Appendix for definition

Highlights – full year 2020

4

All-time high EBITDA1 1,132 mNOK (1,007 mNOK)

Improved result for BioMaterials and Fine Chemicals, slight decline for BioSolutions

Reduced raw material supply and higher distribution costs, partly offset by improved product mix and cost reductions for biopolymers

Lower wood and energy costs, higher production volume and improved product mix for BioMaterials

Higher sales volume and prices as well as an extraordinary demand from disinfectants in Q2 for bioethanol

Positive net currency impact

Strong cash flow


Dividend proposal for 2020

5

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 2.50 per share is proposed by the Board of Directors

57% of net earnings

Total dividend payment of 249 mNOK

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

BioSolutions markets – Q4

6 385

5 9995 865

6 455

6 885

7 431

6 701 6 756

5 000

5 500

6 000

6 500

7 000

7 500

8 000

Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20

NOK per mtds Average gross sales price1

115125 119

111115106

99 96

0

25

50

75

100

125

150

Q1 Q2 Q3 Q4

‘000 mtds Sales volume1 2019

2020

6

Sales volume 14% lower vs Q4-19 Discontinued raw material supply partly offset by increased sales volume from Florida and reduced inventory

Concrete admixtures and low-value industrial applications particularly affected by reduced raw material supply

Continued low demand in oil field chemicals

Sales to agriculture and batteries increased

Average price in sales currency 4% above Q4-19 due to improved product mix Reduced sales to concrete admixtures and low-value industrial applications

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

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

BioSolutions markets – full year

7

Sales volume 11% lower vs 2019 Discontinued raw material supply from Sappi Saiccor and Sniace, reduced supply from Park Falls

Sales to concrete admixtures and low-value industrial applications have been reduced

In Specialities, sales to oil field chemicals dropped significantly as a result of reduced demand, while sales to several other applications increased

Florida sales volume continued to increase in accordance with the ramp-up plan, but result is still unsatisfactory

Average price in sales currency 6% above 2019 due to improved product mix Reduced sales to concrete admixtures and low-value industrial applications

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

5 684 5 618 5 654

6 166

6 951

5 000

5 500

6 000

6 500

7 000

7 500

8 000

2016 2017 2018 2019 2020

NOK per mtds Average gross sales price1

214 210 212 209 178

150 157 170 175150

80 83 86 8688

444 450 468 470416

0

100

200

300

400

500

2016 2017 2018 2019 2020

‘000 mtds Sales volume1

Construction Industrial Specialities

BioMaterials markets – Q4

10 724 10 56110 982

10 417

11 382

12 579

11 780

11 128

9 000

10 000

11 000

12 000

13 000

14 000

Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20

NOK per mt Average gross sales price1

34,5

42,437,6 38,640,0

33,9 34,2

40,3

0

10

20

30

40

50

Q1 Q2 Q3 Q4

‘000 mt Sales volume2019

2020

8

High deliveries in Q4

Lower growth rate in demand for cellulose ethers to construction applications due to the Covid-19 pandemic

Food and pharma applications continued to show strong growth

Targeted actions to balance inventories

Average price in sales currency 3% above Q4-19

Q4-19 sales influenced by sale of declassified products

Increased sales of cellulose fibrils, but still at a low level

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

Sales price and sales volume include speciality cellulose and cellulose fibrils

BioMaterials markets – full year

9 992

10 58910 337

10 665

11 678

9 000

10 000

11 000

12 000

13 000

2016 2017 2018 2019 2020

NOK per mt Average gross sales price1

152,3 150,7 150,1 153,1 148,4

64%72%

62%

73%77%

0%

20%

40%

60%

80%

0

50

100

150

200

2016 2017 2018 2019 2020

‘000 mtds Sales volume1

Volume Highly specialised

9

Reduced sales volume mainly related to Covid-19 effects

Improved product mix, sales of highly specialised grades increased to 77% (73%)

Reduced demand growth for cellulose ethers to construction due to the Covid-19 pandemic

Food and pharma applications continued to show strong growth

Impact of low prices for textile cellulose limited due to reduced exposure to this market

Average price in sales currency 1% above 2019 due to improved product mix

Growing sales of cellulose fibrils

Sales price and sales volume include speciality cellulose and cellulose fibrils

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

Fine Chemicals markets – Q4 & full year

10994 95 102

127 130 128

153

0

25

50

75

100

125

150

175

200

Q1 Q2 Q3 Q4

mNOK Sales revenues – quarter2019

2020

10

Higher sales volume for bioethanol

Deliveries mainly to the biofuel segment

Favourable product mix and high deliveries for pharma intermediates

Extraordinary bioethanol sales to disinfectants in Q2 and increased production volume

Contributed to higher sales volume and improved product mix

Deliveries mainly to the biofuel segment in H2, biofuel market normalised after Covid-19 related reduction in Q2

Increased deliveries but weaker product mix for pharma intermediates

Sales revenues include pharma intermediates and bioethanol Sales revenues include pharma intermediates and bioethanol

363 365 369400

538

0

100

200

300

400

500

600

2016 2017 2018 2019 2020

mNOK Sales revenues – full year

Outlook

BioSolutions

Sales volume in 2021 forecast to decrease by approx. 10%, mainly depending on raw material supply

Will have positive effect on product mix and average price in sales currency

Reduced demand in certain speciality applications expected to continue in markets affected by the Covid-19 pandemic

Market conditions for biovanillin expected to be unchanged, the ongoing capacity expansion will be completed mid-2021

Full effect of cost savings from the upgrade of the lignin operation in Norway from 2021

BioMaterials

Average price in sales currency is expected to be 2-3% below the 2020 level, mainly related to markets affected by the Covid-19 pandemic

Total sales volume and volume of highly specialised grades expected to increase in 2021

In Q1-21, total sales volume expected to be higher vs Q1-20 with similar product mix

Lower wood costs but increased energy costs and freight rates expected in H1-21

Sales growth will continue for cellulose fibrils, but new development and customer trials will be delayed due to the Covid-19 pandemic

Fine Chemicals

No major changes are expected in the market conditions for Fine Chemicals

Bioethanol sales mainly expected to be in the biofuel segment in 2021

Possible further consequences of the Covid-19 pandemic may affect Borregaard’s business

11

Financial performance Q4-20

Borregaard key figures – Q4

1 2

50

1 3

40

1 2

39

1 2

34

1 3

72

1 3

58

1 2

60

1 3

38

0

250

500

750

1 000

1 250

1 500

Q1 Q2 Q3 Q4

mNOK Operating revenues 2019

2020

20,4

21,1

23,1

14,817,6

26,6

21,1

19,7

0

10

20

30

40

Q1 Q2 Q3 Q4

% EBITDA margin1 2019

2020

13

Revenues 8% above Q4-19

EBITDA1 263 mNOK for the Group

All business areas improved their results

Slightly negative net FX effect on EBITDA1

Earnings per share (EPS) NOK 1.21 (NOK 0.38)

-20 mNOK in environmental accruals in Other income and expenses

25

5 28

3

28

6

18

3

24

2

36

1

26

6

26

3

0

50

100

150

200

250

300

350

Q1 Q2 Q3 Q4

mNOK EBITDA1 2019

2020

1,26

2,48

3,79

4,17

1,022,03

3,15

4,36

0

2

4

6

Q1 Q2 Q3 Q4

NOK EPS cumulative

1 Alternative performance measure, see Appendix for definition

4 4

92

4 6

18

4 7

85

5 0

63

5 3

28

0

1 000

2 000

3 000

4 000

5 000

2016 2017 2018 2019 2020

mNOKOperating revenues

Borregaard key figures – full year

14

Revenues increased by 5% vs 2019

All-time high EBITDA1 1,132 mNOK for the Group

Improved results for BioMaterials and Fine Chemicals, decline in Bio Solutions

Positive net FX effect on EBITDA1

Earnings per share (EPS) NOK 4.36 (NOK 4.17)

Impacted by -116 mNOK in Other revenues and expenses


1 0

21

1 0

55

90

3

1 0

07

1 1

32

22,7 22,8

18,919,9

21,2

0,0

4,0

8,0

12,0

16,0

20,0

24,0

0

200

400

600

800

1 000

1 200

1 400

2016 2017 2018 2019 2020

%mNOK EBITDA1 & EBITDA margin1

21,7

19,1

12,710,5

11,4

5,55 5,664,76

4,17 4,36

0

2

4

6

8

10

12

0

4

8

12

16

20

24

2016 2017 2018 2019 2020

NOK% ROCE1 & EPS

BioSolutions key figures – Q4

15

75

5

78

1

72

0

72

679

7

81

9

73

3

73

3

0

200

400

600

800

Q1 Q2 Q3 Q4

mNOK 2019

2020

16

8 19

2

15

6

13

117

0 19

3

13

2

13

7

0

50

100

150

200

Q1 Q2 Q3 Q4

mNOK 2019

2020

22,324,6

21,7

18,021,3

23,6

18,0

18,7

05

1015202530

Q1 Q2 Q3 Q4

% 20192020

• Revenues 1% above Q4-19

• Reduced raw material supply and 14% lower sales volume

• Full year growth 3%

• Reduced sales from South African operation had marginal impact on top-line due to JV accounting (equity method)

Op

erat

ing

reve

nu

esEB

ITD

A1

EBIT

DA

mag

in1

• Lower operating costs and improved product mix for biopolymers

• Negative net FX effects

• Full year EBITDA1 632 mNOK (647 mNOK)

• EBITDA margin1 slightly above Q4-19

• Full year EBITDA1 margin 20.5 (21.7)


BioMaterials key figures – Q4

16

• Revenues increased by 10% vs Q4-19

• High sales volume

• Average price in sales currency increased by 3%


Op

erat

ing

reve

nu

esEB

ITD

A1

EBIT

DA

mag

in1

• Q4-19 affected by operational incidents at the Sarpsborg site

• Lower wood and energy costs and higher sales volume for specialitycellulose

• Higher sales, cost reductions and improved result for cellulose fibrils

• Insignificant net FX impact


• EBITDA margin1 significantly above Q4-19


39

4 47

2

43

0

41

6

45

4

41

7

40

3 45

8

0100200300400500

Q1 Q2 Q3 Q4

mNOK 2019

2020

45

64

94

31

46

10

1

91

80

0

20

40

60

80

100

Q1 Q2 Q3 Q4

mNOK 2019

2020

11,413,6 21,9

7,5

10,1

24,2 22,617,5

05

1015202530

Q1 Q2 Q3 Q4

% 2019

2020


Fine Chemicals key figures – Q4

17

• Revenues increased by 47% vs Q4-19

• High sales for both pharma intermediates and bioethanol


Op

erat

ing

reve

nu

esEB

ITD

A1

EBIT

DA

mag

in1

• Favourable product mix and high deliveries for pharma intermediates

• Higher sales and production volume and reduced variable costs for bioethanol

• Negligible net FX impact


• EBITDA margin1 above Q4-19


11

0

96

96

10

412

8

13

1

13

1 15

3

0255075

100125150175

Q1 Q2 Q3 Q4

mNOK 2019

2020

42

27 3

6

212

6

67

43 46

010203040506070

Q1 Q2 Q3 Q4

mNOK 2019

2020

38,2

28,137,5

20,220,3

51,1

32,8

30,1

0

10

20

30

40

50

Q1 Q2 Q3 Q4

% 2019

2020


Currency impact

-8 -13-23

-32

-62

-84

-51-44

-100

-80

-60

-40

-20

0

20

Q1 Q2 Q3 Q4

mNOK Hedging effects2 on EBITDA120192020

98,0 98,4

100,4103,2

107,1

112,9

104,7 104,0

90

95

100

105

110

115

120

Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20

Borregaard’s currency basket3

18

Net FX EBITDA1 impact ≈-5 mNOK vs Q4-19 Includes change in hedging effects and based on estimated FX exposure

Net FX EBITDA1 impact YTD ≈30 mNOK

Net FX EBITDA1 impact in 2021 estimated to be ≈-10 mNOK vs 2020 Assuming rates as of 2 February (USD 8.59 and EUR 10.35) on expected FX

exposure

Net FX EBITDA1 impact in Q1 estimated to be ≈-10 mNOK vs Q1-20

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

Revised hurdle rates for extended currency hedging:

USDNOK: 8.00 and 8.50

EURNOK: 9.25 and 9.75

Revised due to change in long-term average for USD and EUR

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 2019 (=100): USD 65% (approx. 203 mUSD), EUR 35% (approx. 98 mEUR), Other 0% (GBP, BRL, JPY, SEK, ZAR).

Cash flow, investments and NIBD

288

-125

442

153

416

-200

-100

0

100

200

300

400

500

Q4'19 Q1'20 Q2'20 Q3'20 Q4'20

mNOK Cash flow from operating activities

Cash flow from operating activities EBITDA¹

2114

1794

263

200

54

59191

16

49

1 600

1 700

1 800

1 900

2 000

2 100

mNOK NIBD1 change Increase

Decrease

19

Strong cash flow in Q4

Cash effect from improved EBITDA1, reduced tax payments and significant reduction in net working capital

Investments below Q4-19 and Borregaard’s forecast

NIBD1 decreased by 320 mNOK in Q4

Leverage ratio1 1.58 (1.86)

Equity ratio1 53.9% (51.4%)

182

35

104

52

153

31

23

51

47

38

213

58

155

99

191

0

50

100

150

200

250

Q4'19 Q1'20 Q2'20 Q3'20 Q4'20

mNOK Investments

Replacement Expansion Depr. ex IFRS16


INVESTMENT FORECAST 2021-2023

Replacement investments

Targeted at depreciation level

Upgrade of caustic soda production facility a major investment in 2020 and 2021

Expansion2 investments

Capacity expansion for wood-based vanillin the main project (130 mNOK, completion mid-2021)

A few smaller expansion projects are ongoing or planned

Revised forecast mainly due to carry-over from 2020

Related to the caustic soda production facility (replacement) and capacity expansion for wood-based vanillin (expansion)

New projects may lead to additional investments

344400

350 350

159

150

50 50

503

550+/-60

400+/-60

400+/-60

0

100

200

300

400

500

600

2020 2021 2022 2023

mNOKInvestment forecast1

Replacement Expansion² Depreciation ex IFRS16

20

1 Uncertainty is related to final investment decisions, timing of investment payments, execution time and risk and unexpected events2 Alternative performance measure, see Appendix for definition

Questions?

21

For questions, please contact Borregaard’s Investor Relations by phone or email

See: https://www.borregaard.com/Investor-Relations

Appendix

Borregaard – key figures

23

Amounts in NOK million Q4-2020 Q4-2019 Change YTD-2020 YTD-2019 Change

Operating revenues 1 338 1 234 8 % 5 328 5 063 5 %

EBITDA1263 183 44 % 1 132 1 007 12 %

Depreciation property, plant and equipment -110 -110 -443 -418

Amortisation intangible assets -2 -1 -5 -4

Other income and expenses1-20 -11 -116 -27

Operating profit 131 61 115 % 568 558 2 %

Financial items, net -12 -31 -72 -91

Profit before taxes 119 30 297 % 496 467 6 %

Income tax expenses -8 -12 -117 -116

Profit for the period 111 18 517 % 379 351 8 %

Profit attributable to non-controlling interests -10 -20 -57 -66

Profit attributable to owners of the parent 121 38 436 417

Cash flow from operating activ ities (IFRS) 416 288 886 697

Earnings per share 1,21 0,38 218 % 4,36 4,17 5 %

EBITDA margin119,7 % 14,8 % 21,2 % 19,9 %


Operating revenues and EBITDA1 per segment

24

Amounts in NOK million Amounts in NOK million

Operating revenues Q4-2020 Q4-2019 Change EBITDA1 Q4-2020 Q4-2019 Change

Borregaard 1 338 1 234 8 % Borregaard 263 183 44 %

BioSolutions 733 726 1 % BioSolutions 137 131 5 %

BioMaterials 458 416 10 % BioMaterials 80 31 158 %

Fine Chemicals 153 104 47 % Fine Chemicals 46 21 119 %

Eliminations -6 -12

Amounts in NOK million Amounts in NOK million

Operating revenues YTD-2020 YTD-2019 Change EBITDA1 YTD-2020 YTD-2019 Change

Borregaard 5 328 5 063 5 % Borregaard 1132 1007 12 %

BioSolutions 3082 2982 3 % BioSolutions 632 647 -2 %

BioMaterials 1732 1712 1 % BioMaterials 318 234 36 %

Fine Chemicals 543 406 34 % Fine Chemicals 182 126 44 %

Eliminations -29 -37


Cash flow

25

Amounts in NOK million Q4-2020 Q4-2019 YTD-2020 YTD-2019

Amounts in NOK million

Profit before taxes 119 30 496 467

Amortisation, depreciation and impairment charges 113 121 449 432

Change in net working capital, etc 200 171 -21 -85

Dividend (share of profit) from JV -12 2 51 5

Taxes paid -4 -36 -89 -122

Cash flow from operating activ ities 416 288 886 697

Investments property, plant and equipment and intangible assets * -191 -213 -503 -583

Other capital transactions 12 8 14 29

Cash flow from Investing activ ities -179 -205 -489 -554

Dividends - - -229 -224

Proceeds from exercise of options/shares to employees 1 1 35 35

Buy-back of shares -1 -4 -62 -60

Gain/(loss) on hedges for net investments in subsidiaries 59 5 10 -26

Net paid to/from shareholders 59 2 -246 -275

Proceeds from interest-bearing liabilities 200 402 1 550 2 100

Repayment from interest-bearing liabilities -257 -493 -1 703 -1 971

Change in interest-bearing receivables/other liabilities -12 -1 18 -3

Change in net interest-bearing liablities -69 -92 -135 126

Cash flow from financing activ ities -10 -90 -381 -149

Change in cash and cash equivalents 227 -7 16 -6

Cash and cash equivalents at beginning of period -127 92 81 86

Change in cash and cash equivalents 227 -7 16 -6

Currency effects cash and cash equivalents -4 -4 -1 1

Cash and cash equivalents at the end of the period 96 81 96 81

* Investment by category

Replacement Investments 153 182 344 370

Expansion investments138 31 159 213


Balance sheet

26

Amounts in NOK million 31.12.2020 30.09.2020 31.12.2019

Assets:

Intangible assets 86 90 93

Property, plant and equipment 3 973 3 962 3 852

Right-of-use assets 381 374 380

Other assets 380 249 251

Investment in joint venture 38 26 99

Non-current assets 4 858 4 701 4 675

Inventories 887 1 001 931

Receivables 1 051 1 055 991

Cash and cash deposits 207 50 147

Current assets 2 145 2 106 2 069

Total assets 7 003 6 807 6 744

Equity and liabilities:

Group equity 3 668 3 112 3 306

Non-controlling interests 110 124 158

Equity 3 778 3 236 3 464

Provisions and other liabilities 291 373 294

Interest-bearing liabilities 1 381 1 480 1 419

Non-current liabilities 1 672 1 853 1 713

Interest-bearing liabilities 623 687 608

Other current liabilities 930 1 031 959

Current liabilities 1 553 1 718 1 567

Equity and liabilities 7 003 6 807 6 744

Equity ratio1 (%): 53,9 % 47,5 % 51,4 %


Net financial items & net interest-bearing debt1

27


Net financial items Q4-2020 Q4-2019 YTD-2020 YTD-2019

Net interest expenses -17 -20 -76 -69

Currency gain/loss 6 -3 7 -12

Other financial items, net -1 -8 -3 -10

Net financial items -12 -31 -72 -91


Net interest-bearing debt 1 (NIBD) 31.12.2020 30.09.2020 31.12.2019

Non-current interest-bearing liabilities 1 381 1 480 1 419

Current interest-bearing liabilities including overdraft facilities 623 687 608

Non-current interest-bearing receivables (included in "Other Assets") -3 -3 -4

Cash and cash deposits -207 -50 -147

Net interest-bearing debt 1 (NIBD) 1 794 2 114 1 876

- of which impact from IFRS 16 leases 396 386 387


Currency hedging strategy

28

USDmillion

USD rate

EURmillion

EUR rate

Q1-2021 34 8.17 26 10.09

Q2-2021 34 8.28 25 10.13

Q3-2021 35 8.42 24 10.21

Q4-2021 33 8.59 24 10.36

2021 136 8.35 99 10.20

2022 128 8.95 101 10.65

2023 90 9.42 70 11.08

2024 7 8.78 6 10.88

NOK million Q4-20 Q4-19 YTD-20 YTD-19

BioSolutions -18 -14 -103 -33

BioMaterials -22 -16 -116 -37

Fine Chemicals -4 -2 -22 -6

Borregaard -44 -32 -214 -76

Contracted FX hedges with EBITDA impact (as of 02.02.21) Hedging effects by segment

1 Alternative performance measure, see Appendix for definition2 Hedging done mainly in the Norwegian company3 Strict definition of contracts applied for 100% hedging (mutually binding agreement in which price, currency, volume and time are defined)

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 levelsEUR; gradually increased at effective rates from 9.25 to 9.75USD; 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

Credit facilities, solidity and debt

Long-term credit facilities

• 1,500 mNOK revolving credit facilities, maturity 2021Facilities refinanced in July, maturity 2023 and 2025

• 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

• 225 mNOK overdraft facilities

• 15 mUSD overdraft facility in LignoTech Florida

• 400 mNOK commercial paper

Solidity

• Equity ratio1 53.9% (> 25%)

• Leverage ratio1 LTM 1.58 (< 3.252) (covenant)

29

1 Alternative performance measure, see Appendix for definition2 Leverage ratio covenant is pre IFRS 16 Leases, and the actual leverage ratio1 is restated to pre IFRS 16 for compliance calculations

3 536

1 381

620207

1 742

0

250

500

750

1 000

1 250

1 500

1 750

2 000

2 250

2 500

2 750

3 000

3 250

3 500

3 750

Long-termdebt

Other NIBD Cash & cashdeposit

Undrawnfacilities

Total available

Debt and undrawn facilities31.12.2020

NIBD1 1,794 mNOK

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 (see slides 23 and 26).

• 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 and investment in joint venture minus net pension liabilities.

30

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 2020, held on 3 February 2021. 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.

31

Documents

4th Quarter 2020 - GlobeNewswire