Formal takeover of Norske Skog Golbey PM1 marks key transformation milestone

Norske Skog achieved a pre-tax profit of NOK 120 million in the quarter andNOK610 million year-to-date. The group reported an EBITDA of NOK 38 million inthethird quarter of 2025, down from NOK 106 million in the previous quarter.EBITDAdecreased compared to the previous quarter due to lower publication andpackaging paper prices, partly offset by lower cost of fibre and energy.Pre-taxprofit increased due to higher valuation of Norwegian energy contracts.

The formal takeover of the new containerboard machine PM1 at Norske SkogGolbeyin France was completed during the quarter, marking a major step in thegroup'slong-term transformation from publication paper to packaging paper production.Norske Skog expects full utilisation during the first half of 2027.

"The formal takeover of PM1 at Golbey is an important achievement for NorskeSkog and a result of strong teamwork across the organisation," says GeirDrangsland, CEO of Norske Skog. "We are now able to deliver to customers on acommercial scale and further strengthen our position in the Europeancontainerboard market. Despite temporary ramp-up effects impactingprofitability, the project continues to develop in line with expectations. Thequarter also saw positive developments in reduced fibre costs, which willsupport competitiveness going forward."

In the third quarter of 2025, total operating income increased slightly to NOK2403 million, up from NOK 2 389 million in the previous quarter. Norske Skoghadtotal operating earnings of NOK 193 million compared to NOK 74 million in theprevious quarter, and a profit before income taxes of NOK 120 million, up fromNOK 49 million in the previous quarter. Equity increased from NOK 5 877millionto NOK 5 997 million, resulting in the equity ratio improving from 41.8% to42.8%. Total assets decreased slightly from NOK 14 068 million to NOK 14 002million. Net interest-bearing debt increased from NOK 3 960 million to NOK 4243million.

Net cash flow from operating activities was NOK -90 million in the quarter,mainly due to increased working capital. Net cash flow from investingactivitieswas NOK -207 million, reflecting ongoing investments in the Golbey PM1project,the book paper conversion project at Norske Skog Skogn, and continuedmaintenance investments across mills. Net cash flow from financing activitiesimproved to NOK -55 million from NOK -171 million in the previous quarter.

Market segmentsThe publication paper segment with a combined annual capacity of 1.3 milliontonnes, experienced slightly lower achieved prices during the quarter, whiledeliveries remained at a similar level to the previous quarter. Lower pulpwoodprices and recognised energy refunds helped offset market price declines.Fixedcosts were reduced during the quarter through ongoing cost efficiencymeasures.

The packaging paper segment, consisting of mills in France and Austria with anannual capacity of approximately 0.8 million tonnes when fully utilised,delivered mixed results. Norske Skog Bruck PM3 achieved an EBITDA of NOK 5million in the quarter. Lower OCC (recycled paper) prices partly mitigated themarket-driven decline in containerboard prices. Norske Skog Golbey PM1achievedan EBITDA of NOK -99 million in the quarter, reflecting ramp-up costs and thelower average price of initial trial deliveries.

Efficiency and other initiativesNorske Skog has launched several initiatives to improve profitability and cashflow across all mills, including reviews of both variable and fixed costs andworking capital efficiency. The company continues to evaluate strategicoptionsfor Norske Skog Saugbrugs, with a decision on a potential restart of PM6expected by the end of 2025.

At Norske Skog Skogn, modifications on PM1 are underway to enable flexibleswitching between newsprint and book paper from 2026, ensuring continuedresponsiveness to evolving market needs.

The appeal regarding the decision to exclude Norske Skog Skogn and Norske SkogSaugbrugs from the EU Emissions Trading System (EU ETS) for the period 2026 to2030 is currently being handled by the Ministry of Climate and Environment.Theexclusion is based on revised qualification criteria under which facilitieswithmore than 95% of emissions originating from sustainable biomass no longerqualify for free CO2 allowances. Norske Skog is actively engaging with theauthorities to seek a reversal of this decision.

Outlook Uncertainty and profitability pressure in both the market for publicationpaperand packaging paper is expected to continue due to raw material pricevolatility, excess production capacity, and constantly changing operatingconditions. Norske Skog maintains significant emphasis on reducing theproduction costs and working capital to maintain its competitive position inthis environment.

The remaining gross investment at Norske Skog Golbey is expected to be EUR 15million, and the mill is expected to receive additional EUR 50 million ininvestment grants and energy certificates during 2025 to 2027. Production ofrecycled containerboard at Norske Skog Golbey (PM1) is expected to reach fullutilisation during the first half of 2027.

Norske Skog monitors the capital and liquidity position closely and hasseveralongoing initiatives to secure the financial performance and competitivepositiongoing forward.

About Norske SkogNorske Skog is a producer of packaging paper and publication paper across fourmills in Europe. Packaging paper includes testliner and fluting andpublicationpaper includes newsprint and magazine paper. The annual production capacity ofpackaging paper is 0.8 million tonnes, and the annual production capacity ofpublication paper is 1.3 million tonnes. Packaging paper and publication paperare sold through sales offices and agents. Norske Skog has approximately 1 700employees and the parent company, Norske Skog ASA, a public limited liabilitycompany, is incorporated in Norway and has its head office in Oslo. Thecompanyis listed on Oslo Stock Exchange with the ticker NSKOG.

Presentation and quarterly materialThe company will arrange a Teams-webinar today at 08:30 CEST, which can beattended by clicking the webinar link on the front page of thewww.norskeskog.com.The quarterly board of directors report, the presentation, the financialstatements and the press releases are available on www.norskeskog.com, andpublished on www.newsweb.no under the ticker NSKOG. If you want to receivefuture Norske Skog press releases, please subscribe through the website of theOslo Stock Exchange www.newsweb.no.

Norske SkogCommunications and Public Affairs

For further information:

Norske Skog media:Vice President Corporate Communication and Public AffairsCarsten Dybevigcarsten.dybevig@norskeskog.comMob: +47 917 63 117

Norske Skog Investor Relations:Senior Vice President Corporate FinanceEven Lundeven.lund@norskeskog.comMob: +47 906 12 919

https://newsweb.oslobors.no/message/657860