Q3 2020 presentation 22 October 2020 www.norskeskog.com Third quarter in brief EBITDA for the period of NOK 73 million, compared to NOK 138 million in the previous quarter . Gain of NOK 86 million included in the previous quarter, underlying EBITDA improvement . Volumes improving from Q2 2020, but still impacted by COVID-19 restrictions Cash flow from operations of NOK 115 million versus NOK -109 million in the previous quarter . Cash position of NOK 1,093 million following dividend payment of NOK 3.00 per share in the quarter . Net interest-bearing debt of NOK 628 million Norske Skog Saugbrugs to permanently close PM5 . Supercalendered magazine paper capacity reduction of 100,000 tonnes . Redundancy cost of NOK 40 million to be recognised in Q4 2020, and expected annual cost savings of NOK 80 million Strategic projects progressing according to plan . Construction of the Bruck boiler and energy efficiency initiatives at Saugbrugs remain on track P . Main studies for European containerboard projects progressing towards final investment decision in H1 2021 Circa Group planning a 1,000 tonnes CyreneTM facility in France . Norske Skog owns 27.7% of Circa Group (subject to FIRB approval) . Consortium with Circa Group received a EUR ~12 million EU Flagship grant for construction of the CyreneTM plant 2 Underlying EBITDA improving in Q3 2020 vs Q2 2020 Revenue EBITDA Underlying EBITDA Net interest-bearing debt NOKm NOKm (and margin in %) NOKm (and margin in %) NOKm Net debt increase mainly a 560 result of dividend payment 3,344 of NOK 248m, currency 3,187 505 impact of NOK ~25m 919 2,771 852 379 2,199 2,167 339 324 317 628 17% 16% 14% 12% 11% 10% 329 73 73 138 269 52 7% 3% 3% 2% Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 3 Underlying EBITDA growth driven by better volumes and costs EBITDA bridge Q2 2020 to Q3 2020, NOKm 250 . Volumes recovering from lows in May and June, but still impacted by restrictions with utilisation of 71% in the quarter 200 32 . Industry price decline from H1 2020 to H2 2020, somewhat - 7 7 mitigated by reduced exports 67 39 - 150 . Lower variable costs mainly resulting from reduced energy prices 138 and recovered paper prices 76 . Reduction in fixed costs as a result of temporary layoffs at most 100 - mills following market-related downtime 86 . Stronger NOK in the quarter resulting in negative FX impact 50 . Change in other items mainly relate to gain on sale of Tasmanian Underlying 73 forest which occured in Q2 2020 52 EBITDA Q2 2020 0 Q2'20 Volume Price Variable Fixed FX Other Q3'20 costs costs 4 Corporate strategy Illustrative over-the-cycle EBITDA Diversify and innovate within fibre and energy Become a leading producer of renewable packaging Improve and optimise publication paper cash flows 2020 2023 2026 Publication paper Renewable packaging Fibre and energy 5 Agenda item: Publication paper Improve and optimise publication paper cash flows Illustrative over-the-cycle EBITDA Remain a producer of all publication paper grades Continue improving mill cost base (NEXT / Therminator) Unlock property values (Porsnes Utvikling) Close Saugbrugs PM5 to adapt to market changes Reposition the Tasman mill towards strategic players 2020 2023 2026 Publication paper Renewable packaging Fibre and energy 6 Q3 2020 financials for Europe Europe – Revenue Europe – EBITDA Europe – Underlying EBITDA NOKm NOKm (and margin in %) NOKm (and margin in %) . Newsprint, SC and LWC demand 404 2,368 decreased by 23%, 15% and 23%, 2,321 respectively through July this year 2,131 337 330 329 329 318 . Realised prices somewhat lower in 1,727 the quarter and modest signs of 1,655 volume improvement 17% 15% 15% 14% 14% . Favourable raw material prices 13% 84 84 . Stronger NOK in the quarter 75 75 5% 5% 5% 5% Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 7 Source: Eurograph Signs of demand improvement into H2 2020 Monthly publication paper demand Western Europe Thousand tonnes Change vs same month last year 1,200 20% 1,000 10% . Western European publication paper demand amounted to 800 0% ~11.4m tonnes in 2019 . Demand decline seen in August 2020 vs August 2019 -8% -7% 600 -9% -9% -10% implies a demand loss of up to 2.5m tonnes annualised -13% -13% -14% . So far in H2 2020 there has been announced ~2m tonnes 400 -20% -20% of capacity closures in Western Europe -22% -23% . Capacity closures announced after price agreements for 200 -30% the second half of 2020 were in place -33% -35% 0 -40% Sep-19 Nov-19 Jan-20 Mar-20 May-20 Jul-20 Newsprint Uncoated mechanical Coated mechanical Change vs last year 8 Sources: PPPC Industry impacted during price negotiations for H2 2020 Monthly publication paper reference prices in Germany EUR per tonne 700 600 . COVID-19 impacted the industry during semi-annual price 500 negotiations . Publication paper prices down for the second half 2020 400 . Price negotiations for the first half of 2021 to be carried out towards the end of 2020 300 9-10% price 5-6% price decline decline 200 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Newsprint 45g SC rotogravure 56g LWC offset 60g 9 Sources: RISI Closing Saugbrugs PM5 Sales volume development at Saugbrugs Sales volume rolling LTM, thousand tonnes 500 450 PM5 100k tonnes . Closure of PM5 (SC capacity of 100,000 tonnes) expected to have limited 400 SC capacity impact on sales volume given current trading 350 . Norske Skog will have 360,000 tonnes of SC capacity following the PM4 potential closure and will remain a reliable supplier of SC magazine paper 100k tonnes 300 SC capacity . Closure expected to result in annual cost savings of NOK ~80m from 2021 and a one-time restructuring cost of NOK ~40m in Q4 2020 250 200 Current operational figures for the Saugbrugs mill (all three machines) 150 PM6 ‒ SC magazine capacity of 460,000 tonnes 260k tonnes 3 SC capacity ‒ ~900k fm consumption 100 ‒ ~1.1 TWh electricity consumption 50 0 Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Jul-20 10 Identifying new value in former Saugbrugs administration office Part of former Saugbrugs administration office in Halden to be used for high school ~9,000 sqm indoors . Porsnes Utvikling1 to redevelop part of former Saugbrugs administration office for high school purposes ~5,700 sqm . Financing and municipality lease agreement in place outdoors . Redevelopment completion planned for Q2 2022 35 years . Porsnes Utvikling to develop remaining sections of the administration office and surrounding area lease length . Norske Skog explores opportunities for areas owned in the ‘greater’ region surrounding Saugbrugs Q2 2022 completion 11 1) Porsnes Utvikling AS is a 50/50 joint venture between Norske Skog Saugbrugs AS and Ringstad Næringsutvikling AS Q3 2020 financials for Australasia Australasia – Revenue Australasia – EBITDA Australasia – Underlying EBITDA NOKm NOKm NOKm 283 955 852 113 . Demand for newsprint and 28 magazine paper declined by 24% 21 620 through September 63 63 1 513 . Somewhat higher wood prices 447 following sale of Tasmanian forest 7 - 23 - 7 - Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 12 Repositioning the Tasman mill towards strategic players Sales volume development in Australasia Sales volume rolling LTM, thousand tonnes 800 700 . COVID-19 causing material demand impact in the Australasian region . Opportunity for Norske Skog to cover newsprint demand with Boyer mill 600 Albury 265k tonnes . Closure of Tasman (newsprint capacity of 150,000 tonnes) expected to news capacity have limited impact on sales volume given current trading 500 Albury closed end of 2019 . Reviewing mill options (incl. BCTMP) as part of repositioning towards strategic players in the region, conclusion expected Q1 2021 400 Tasman 150k tonnes news capacity 300 Operational figures for Tasman mill Boyer ‒ Newsprint capacity of 150,000 tonnes 200 150k tonnes news capacity ‒ ~320k tonnes wood consumption 100 Boyer ‒ ~470 GWh electricity consumption 135k tonnes LWC capacity 0 Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Jul-20 13 Agenda item: Renewable packaging Diversify and innovate within fibre and energy Illustrative over-the-cycle EBITDA Packaging projects in Bruck and Golbey Replace newsprint with containerboard production Expected EBITDA contribution of NOK 700-800m Expected start-up during H1 2023 2020 2023 2026 Publication paper Renewable packaging Fibre and energy 14 Entering the containerboard market with first-quartile capacity Cash cost delivered Frankfurt for all recycled containerboard machines in Europe1 EUR per tonne 500 450 Golbey PM1 and Bruck PM3 to 400 be among the most competitive . Centrally located in continental Europe containerboard machines 350 . Established presence in recycled fibre markets 300 . Among the top brownfield opportunities in Europe 250 . Large industrial sites with scale advantages 200 . Boilers secure sustainable and competitive steam supply 150 100 . Machine specifications enable cost-leadership position 50 0 0 5,000 10,000 15,000 20,000 25,000 30,000 Capacity, thousand tonnes 15 Source: External industry consultant (third-party), cost data as of Q3 2019 1) Europe excluding Russia Norske Skog will be a containerboard producer in 2023 . PM1 to become a producer of 555,000 tonnes of recycled containerboard Strong process and project competence locally at the mills .