Borregaard (BRG) Pre-close call summary

Executive summary

• Outlook for 2026 reiterates expected sales volumes for BioSolutions and BioMaterials, with some product mix and pricing headwinds in the near term.

• Geopolitical tensions, especially the Middle East conflict, are causing uncertainty, impacting demand and costs, but are seen as temporary with no structural demand change.

• Cost inflation, particularly in energy and raw materials, is being addressed through targeted cost reduction measures and potential price adjustments.

Trading performance and revenue trends

• BioSolutions full-year sales volume expected at 340,000 tons; Q2 volume around 90,000 tons, with a less favorable product mix than last year.

• BioMaterials full-year sales volume guided at 155,000–160,000 tons, up from 146,000 tons in 2025; Q2 volume expected at 40,000–42,000 tons.

• Fine Chemicals sales prices for bioethanol expected to remain stable; intermediates volume to increase versus 2025.

Profitability and margins

• Average sales price for BioMaterials expected to be 3–4% lower in H1 2026 versus H2 2025, mainly due to product mix.

• Net cost impact from raw materials, energy, and logistics estimated at NOK 40–60 million negative year-over-year for Q2, despite a 15% reduction in wood costs.

• Energy costs are significantly higher, with Norwegian electricity prices up 75% and natural gas up over 90% year-over-year.