Good morning, everyone, and welcome to Borregaard's second quarter 2026 presentation. My name is Tom Erik Foss-Jacobsen.

I'm the CEO of Borregaard, and I'll be joined today by our CFO, Per Bjarne Lyngstad. Together, we will take you through this agenda.

I will start with the key highlights for the quarter and then give an update on the market situation across our business segments. I will then summarize the outlook before handing over to Per Bjarne.

He will walk you through the financial performance then in more detail. Before we begin, just a quick reminder to those of you watching the webcast that you're welcome to submit questions at any time during the presentation, and we'll address them at the end.

Let's begin with the highlights for the second quarter. EBITDA came in at NOK 515 million, compared with NOK 522 million in the same quarter last year.

This is a solid result, broadly in line with the strong second quarter last year, and also supported by good operational performance in the quarter. Looking at the business areas, BioSolutions delivered higher sales volume, but with a less favorable product mix.

BioMaterials had high deliveries and record production, while Fine Chemicals delivered another quarter with a solid result. On the cost side, we continue to see pressure from higher energy, logistics, and chemical costs, partly offset by lower wood costs.

The net currency effects were slightly positive in the quarter. We have also recognized an impairment of NOK 337 million on our investment in Alginor.

The three main shareholders in Alginor, Borregaard, Must Invest, and Hatteland, with Hatteland acting as lead investor, have offered Alginor to guarantee NOK 100 million on new equity. This is subject to corporate approvals in Alginor.

Borregaard has committed to subscribe for up to NOK 10 million of this capital injection, which will reduce Borregaard's ownership interest in Alginor from 42% to 10%. Following this transaction, Borregaard will not have any obligation to contribute to further funding of Alginor.

Borregaard also had a robust cash flow in the second quarter. Overall, the quarter has demonstrated the resilience of Borregaard's diversified business model, while also highlighting the importance of continued focus on product mix, cost discipline, and execution.

Now let's turn to BioSolutions. Sales volume was 4% higher than in the second quarter last year.

This was driven by high deliveries to construction and industrial applications. At the same time, the product mix was less favorable than in the corresponding quarter last year.

However, sales to specialties improved compared to Q1 this year. The average price in sales currency was 1% above second quarter last year, reflecting broadly stable sales prices.

However, the average gross sales price in Norwegian kroner was impacted by the weaker U.S. Dollar and Euro.

Compared with the first quarter, we saw recovery in volumes, but not yet a full normalization of the mix. In Q1, we explained that certain specialty volumes were affected by temporary delays in the value chain, broader uncertainty, and customer destocking.

At this stage, the main message remains that we see variability in timing and mix rather than a structural change in the underlying demand. Over to BioMaterials.

Sales volume was 9% higher than in the second quarter last year. This was driven by high deliveries of specialty cellulose.

This was also supported by a record high production in the quarter. At the same time, the average price in sales currency was 4% below second quarter last year, reflecting targeted price adjustments in the cellulose ethers construction segment, which contributed to higher sales volumes.

In addition, the average price was impacted by a less favorable product mix. As in BioSolutions, the average gross sales price in Norwegian kroner was also impacted by the weaker U.S.

dollar and Euro. Overall, the quarter demonstrates strong demand and solid operational performance.

Turning to Fine Chemicals. Fine Chemicals delivered a strong quarter with solid contribution from both intermediates and good deliveries in bioethanol.

The fine chemical intermediates delivered a favorable product mix and higher deliveries this quarter. Bioethanol also had high deliveries.

The operating revenues were higher than in the same quarter last year, supported by this volume and mix effects. I will conclude my part with the outlook.

In BioSolutions, sales volume for 2026 is now forecast to be approximately 335,000 tons, slightly down from 340,000 tons in the previous outlook. Sales volume in Q3 is expected to be around 85,000 tons.

In BioMaterials, sales volume for 2026 is expected to exceed 160,000 tons, up from the previous outlook of 155,000-160,000 tons. We expect the sales volumes of highly specialized grades to be higher than in 2025, and the Q3 sales volume is expected to be around 40,000 tons.

In Fine Chemicals, sales prices for Borregaard's bioethanol are expected to be largely in line with 2025. Sales volume for fine chemical intermediates is expected to increase compared with 2025.

Bioethanol deliveries are expected to be lower, and the product mix for the fine chemical intermediates is expected to be weaker in the second half compared with the first half of 2026. Looking at the costs, the wood costs in the second half of 2026 are expected to be 3%-4% lower than in the first half.

At the same time, the global uncertainty continues to impact cost of energy, key chemicals, as well as our markets and currencies. Given a more demanding operating environment, we are implementing a cost improvement program targeting annual cost savings of NOK 150 million.

The savings are expected to be realized gradually with full annual effect from 2028. This reinforces our focus on execution and cost discipline to protect profitability and also to support the next phase of specialization and value growth that we're planning for.

With that, I'll hand over to our CFO, Per Bjarne Lyngstad, who will take you through the financial performance in more detail. Thank you.

Thank you, Tom Erik, and good morning, everyone. In the second quarter, Borregaard's operating revenues increased by 3% compared with the second quarter of 2025 as a result of higher sales volume in all areas.

EBITDA ended at a solid NOK 515 million, compared with NOK 522 million in the second quarter last year. The result in BioMaterials and Fine Chemicals increased, while BioSolutions had a lower result.

Wood costs were about 15% lower compared with the second quarter last year. The Middle East conflict had a negative impact on energy, logistics, and chemical costs.

The net cost impact on raw materials, energy, and logistics was negative by about NOK 40 million compared with the same quarter last year. We estimated the net cost impact to be between NOK 40 million and NOK 60 million in our outlook for the second quarter.

The net currency effects in the quarter were slightly positive by about NOK 5 million. The EBITDA margin ended at 24.4%, about one percentage point lower than in the margin in the second quarter of 2025, but with a 3 percentage points improvement from the first quarter.

In the quarter, Borregaard has recorded, as Tom Erik said, a NOK 337 million impairment of the Alginor investment and accrued NOK 30 million for ground stabilization measures at the Sarpsborg site. These two items explain why earnings per share ended at -NOK 1.27 in the quarter.

Adjusted for these two items, earnings per share ended at NOK 2.35 in the quarter and NOK 4.17 year to date. As to Alginor, based on recent developments and a challenging financial situation in the company, as well as proposed share transactions between Borregaard and the Hatteland Group, we now consider the shareholding in Alginor and convertible loans to the company to have no recoverable value.

Accordingly, we have made an impairment to reduce the value of the total investment to zero at the end of the second quarter. The impairment is recorded as a financial item.

As Tom Erik said initially, we have committed to subscribe for up to NOK 10 million of the proposed NOK 100 million equity injection in Alginor, reducing our ownership interest in Alginor from 42% to 10%. In connection with the Østfold County's planned construction of a new bridge across the Glomma River, the county has identified a requirement for ground stabilization measures at the Sarpsborg site to mitigate the risk of landslides.

From Borregaard's side, the measure are intended to minimize the risk of additional requirements from the county, which could affect Borregaard's day-to-day operations at the site. An accrual of NOK 30 million has been recorded for these measures in other income and expenses.

Turning to BioSolutions. The operating revenues were in line with the second quarter last year.

EBITDA was NOK 306 million, compared with NOK 338 million in the same quarter last year. Higher sales volume was more than offset by higher energy and energy-related costs, negative net currency effects, and a less favorable product mix compared with the second quarter of 2025.

The EBITDA margin was 26.5% in the quarter, close to three percentage points below the margin in the second quarter last year, but two percentage points higher than in the first quarter this year. BioMaterials operating revenues in the second quarter were 4% higher than in the second quarter last year, mainly as a result of high deliveries of specialty cellulose.

EBITDA reached NOK 151 million, NOK 8 million higher than in the same quarter last year. High deliveries of specialty cellulose were partly offset by lower sales prices and a weaker product mix.

A record production contributed positively to the result. Lower wood costs were more than offset by cost increases, mainly related to energy and certain chemicals.

Net currency effects were positive for BioMaterials. The EBITDA margin of 19.5% in the quarter was marginally above the margin in the second quarter last year, but 5.5 percentage points higher than in the first quarter.

Operating revenues in Fine Chemicals increased by 18% compared with the second quarter of 2025, mainly due to higher deliveries. EBITDA reached NOK 58 million, NOK 17 million above the second quarter last year.

The result improvement was due to higher deliveries and a favorable product mix for fine chemical intermediates, as well as high deliveries of bioethanol. Net currency effects were positive for Fine Chemicals.

The EBITDA margin increased to 29.3%, about five percentage points higher than in the same quarter last year. The net currency impact on EBITDA was, as I said, slightly positive by about NOK 5 million compared with the second quarter last year.

Hedging gains were NOK 74 million, compared with a loss of NOK 34 million last year. The positive impact from the change in hedging effects was largely offset by the impact from a stronger Norwegian kroner.

Using Borregaard's currency basket, the Norwegian kroner was more than 8% stronger compared with the second quarter of 2025. Using currency rates as of yesterday, the net currency impact for the full year is now estimated to be positive by about NOK 45 million compared with the full year of 2025.

The corresponding impact for the third quarter is estimated to be positive by about NOK 10 million compared with the third quarter last year. Borregaard had a cash flow from operating activities of NOK 695 million in the second quarter.

The strong cash flow was due to a significant reduction in net working capital, in addition to the cash effect from a solid EBITDA. The impairment loss related to Alginor had no cash effect in the quarter.

Investments were NOK 194 million in the quarter. The largest expenditures were related to the upgrade of electricity transformation capacity and the debottlenecking project at the Sarpsborg site, as well as capital raises in Alginor.

Net interest-bearing debt increased by NOK 16 million in the quarter. The dividend payment of NOK 475 million in April was more or less offset by the strong cash flow.

At the end of the second quarter, Borregaard is well capitalized with an equity ratio of 59% and a leverage ratio, which is net interest-bearing debt over EBITDA, of 1.2. That concludes today's presentation.

We would like to use the opportunity to promote Borregaard's Capital Markets Day, which will be held on the 17th of September at the Oslo Concert Hall. Tom Erik and I will now be ready to answer any questions from those who follow the webcast.

Our Director Investor Relations, Pål Espen Ramberg, will moderate webcast questions.

Thank you, Per Bjarne. The first from Kristoffer Haugland at Arctic.

"Have you seen a shift in the demand for agriculture project within BioSolutions following the lower urea prices?

I would say, as I said in our presentation, we see some improvement in speciality sales and also agri sales in the second quarter versus the first quarter. Overall, agri is based on 1,000 customers, 200 different products, a wide variety of applications.

We have several applications that are developing positively. Plant nutrition is one of them, running well.

We have granulation aid, where we are supporting with our products, animal feed. One application where we still see effects from the situation also referred to last time as the Middle East, where costs have been increasing and availability has been impacted, is within crop protection.

Here we still see some impact on the sales in the second quarter.

Thank you. Another one from Kristoffer Haugland at Arctic.

Could you please provide some more details about the improvement program?

Yeah. The improvement program is based on a few measures that we are taking.

It is about cost reduction, it is also about increasing our overall competitiveness. We have implemented a general hiring freeze, which means that when people are retiring or resigning, we are not automatically replacing those people.

That means there will be a reduction in manning through this period. We are also the way we use our resources to make sharper priorities, fewer priorities, which means we will also reduce some of the activities.

These are the measures altogether that we are expecting to give the impact of this NOK 150 million over this timeline.

The next one from Magnus Rasmussen at SEB. How come full year BioSolutions volume guidance is down despite strong volumes in the second quarter?

I would say, first of all, typically from the seasonal effects of the different businesses we're in, we typically have a lower volume in second half versus the first half. We also saw a somewhat lower volume in Q1 versus the previous Q1, and I think we will not be able to recover those volumes lost in Q1.

I think these two factors together is leading us to the guidance that you're referring to here.

Another one from Magnus Rasmussen at SEB. How should they look at the raw material and energy cost on a year-on-year basis for the third quarter?

Is it similar to the second quarter?

Well, the development we see, we haven't given a number this time because what's happening in the Middle East, there you see variations a lot on the oil price depending on the actions from the parties. What we see is that some chemicals, and I think we should point at sulfur and also caustic, we see an increase or expect an increase in the third quarter.

Whether that will be offset by the wood cost reduction is uncertain. The major uncertainty is really on energy prices, LNG, and we also have a situation in Norway on electricity, where the water reservoirs in the mountains are quite at a low level.

We have been careful now, but maybe a little bit up from the second quarter.

Another one from Magnus Rasmussen at SEB regarding Chinese competition. How has the competition from Chinese ethers, which you highlighted in Q4, developed since then?

Yeah. As we have presented earlier, we did some selective price adjustments, particularly to meet this competition.

What we can see is that our selective price adjustments have been successful and are definitely contributing to higher sales volumes within BioMaterials. I would say our measures have been working well.

Yeah, I think that's the answer.

Yeah. Thank you.

The next one is from Martin Melbye in ABG regarding the debottlenecking project. Did the debottlenecking project deliver EBITDA in the quarter given the high volumes, or is this effect yet to come in 2027?

No, the effect of the debottlenecking project is yet to come. That didn't have an impact on the record production we had now.

There are other measures we have done previously that now give very good effect also on the production. Whether it remain at the same high level remains to be seen.

Thank you. The next one from Elliott Jones in Danske Bank.

Can you provide any color with regards to the selling price development in local currencies going into second half of the year for BioSolutions and BioMaterials?

Yeah. We have done certain price adjustments.

We also have implemented selectively surcharges, and I would say both price adjustments and surcharges where contracts have been allowing us to do so. I would say we can expect a moderate impact from these adjustments into third quarter and into second half.

Thank you. There are no further questions on the web.

Okay. Good.

Thank you for your attention.

Yeah. Thank you very much.