Borregaard : 1st quarter 2024 presentation

Agenda

Per A Sørlie, President & CEO

• Highlights
• Business segments
• Environmental investment
• Outlook

Per Bjarne Lyngstad, CFO

• Financial performance

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Highlights - 1st quarter 2024

• EBITDA1 NOK 442 million (NOK 435 million)
• Increased result and sales volume in BioSolutions
• Higher sales volume and reduced sales prices in BioMaterials
• Lower result in Fine Chemicals with low deliveries of bioethanol
• Reduced costs for energy and chemicals partly offset by increased wood costs
• Slightly negative net currency effects
• Cash flow impacted by high sales towards the end of the quarter

1 Alternative performance measure, see Appendix for definition

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BioSolutions markets - Q1

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

Average price in sales currency 2% below Q1-23

• Reduction mainly due to changes in product mix
• Strong development in sales to agriculture and batteries

Sales volume 9% above Q1-23

• Increased sales to agriculture

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

Slightly negative FX effects

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

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Fine Chemicals markets - Q1

Sales revenues include fine chemical intermediates and bioethanol

• Fine chemical intermediates: Increased sales volume, prices reduced as a result of price reduction for the main raw material
• Bioethanol: Low deliveries and stable sales prices
• Slightly negative net FX impact

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Borregaard transition plan to cut scope 1 and 2 GHG emissions

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Environmental investment of 275 mNOK in Norway

Infrastructure investment

• Upgrade of the electricity transformation capacity
• End-of-lifereplacement of equipment
• In collaboration with regional grid owner Elvia

Prerequisite for climate targets and growth

• Facilitating delivery of long-term environmental goals
• Making headroom for growth projects

Completion in 2028

• Borregaard share of total investment 275 mNOK
• Investment period 2024-2028

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Outlook

BioSolutions

• The diversified market strategy expected to mitigate effects of a slowdown in certain end-markets
• Sales volume in 2024 forecast to be ≈330,000 tonnes, depending on the global economic development
• Sales volume in Q2 expected to be in line with Q2-23
• 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 Q2, sales volume expected to be lower vs Q1-24, but higher than production output
• Average price in sales currency in Q2 expected at the same level as Q1-24
• Development in the construction market for cellulose ethers main uncertainty for 2024, other applications expected to largely compensate

Fine Chemicals

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

Costs development and impact from investment

• Wood costs will increase ≈10% in H1-24 vs H2-23
• In Q2, lower energy and other raw material costs expected to compensate for increased wood costs vs Q2-23
• Benefits from the investment to reduce CO2 emissions and improve energy efficiency and flexibility will gradually materialise in H1-24

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

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