q4 '07 financial details market up date [read-only] nok million q4 2007 q4 2006 change...

Norske Skog

Q4 2007

Financial figures Group (details)Segmented ResultsMarket Update

2

P&L account Q4 2007 vs Q3 2007NOK Million Q4 2007 Q3 2007 Change Operating revenue 6 956 6 641 316Distribution costs (592) (631) 39Cost of materials (3 709) (3 778) 69Changes in inventory (473) 31 (504)Employee benefit expenses (860) (875) 15Other operating expenses (546) (537) (8)Restructuring expenses - - -Other gains and losses 4 983 69 4 915 Gross operating earnings 5 761 919 4 841Depreciation and amortisation (719) (712) (7)Impairments (4 866) - (4 866) Operating earnings 176 208 (31)Share of profit in associated companies 1 6 (5)Financial items (259) 66 (326)

Profit before tax (82) 280 (362)Income tax expense (828) (75) (753)

Net profit (910) 205 (1 115)

Attributable to minority interests (30) (16) (14)Attributable to equity holders of the Company (880) 221 (1 101)

3

P&L account Q4 2007 vs Q4 2006NOK Million Q4 2007 Q4 2006 Change

Operating revenue 6 956 7 704 (747)Distribution costs (592) (630) 39Cost of materials (3 709) (3 931) 222Changes in inventory (473) (277) (196)Employee benefit expenses (860) (878) 18Other operating expenses (546) (646) 100Restructuring expenses - (45) 45Other gains and losses 4 983 (1) 4 984

Gross operating earnings 5 761 1 296 4 465Depreciation and amortisation (719) (729) 10Impairments (4 866) - (4 866)

Operating earnings 176 567 (391)Share of profit in associated companies 1 - 1Financial items (259) (249) (10)

Profit before tax (82) 318 (400)Income tax expense (828) (109) (719)

Net profit (910) 209 (1 119)

Attributable to minority interests (30) (36) 5Attributable to equity holders of the Company (880) 245 (1 124)

4

P&L account 2007 vs 2006NOK Million 2007 2006 Change

Operating revenue 27 118 28 812 (1 694)Distribution costs (2 400) (2 521) 121Cost of materials (15 214) (15 498) 284Changes in inventory 144 (102) 246Employee benefit expenses (3 495) (3 800) 305Other operating expenses (2 221) (2 187) (34)Restructuring expenses - (484) 484Other gains and losses 4 463 (288) 4 751

Gross operating earnings 8 395 3 932 4 463Depreciation and amortisation (2 878) (3 226) 348Impairments (4 840) (3 233) (1 607)

Operating earnings 677 (2 527) 3 204Share of profit in associated companies 37 202 (165)Financial items (479) (1 155) 676

Profit before tax 235 (3 480) 3 716Income tax expense (917) 463 (1 380)

Net profit (683) (3 017) 2 334

Attributable to minority interests (65) (208) 143Attributable to equity holders of the Company (618) (2 809) 2 191

5

EBITDA - Clean to IFRS

NOK mill 2007 Q4 2007 Q3 2007 2006 Q4 2006

Clean EBITDA 3 939 775 851 4 702 1 328

Reversals:

Value change energy contracts 4 729 4 489 236 135 55

Value change derivatives (370) 439 (158) (541) (72)

Value change other assets 27 27 0 0 0

Realised gain/loss commodities 71 31 (11) 144 36

Other gains and losses 0 0 2 (24) (6)

Restructuring expenses (0) (0) (0) (484) (45)

EBITDA, IFRS 8 395 5 761 920 3 932 1 296

EBITDA margin, IFRS 31,0 % 82,8 % 13,9 % 13,6 % 16,8 %

6

EBIT - Clean to IFRS

NOK mill 2007 Q4 2007 Q3 2007 2006 Q4 2006

Clean EBIT (1 060) 56 139 1 476 599

Reversals:

Value change energy contracts 4 729 4 489 236 135 55

Value change derivatives (370) 439 (158) (541) (72)

Value change other assets 27 27 0 0 0

Realised gain/loss commodities 71 31 (11) 144 36

Other gains and losses 0 0 2 (24) (6)

Restructuring expenses (0) (0) (0) (484) (45)

Impairments (4 840) (4 866) 0 (3 233) 0

EBIT, IFRS 677 176 208 (2 527) 567

EBIT margin, IFRS 2,5 % 2,5 % 3,1 % -8,8 % 7,4 %

7

Clean EBITDA / EBIT per quarter

EBITDA/EBIT adjusted for the value of power contracts, provision cost energy cost in South America and restructuring expenses.

In addition, the EBIT is adjusted for impairments.

925

97

1 038

171

1 085

282

1 251

424

1 328

599

1 175

440

1 138

425

851

139

775

56

4Q2005

1Q2006

2Q2006

3Q2006

4Q2006

1Q2007

2Q2007

3Q2007

4Q2007

EBITDA

EBIT

8

Clean EBITDA margins per segment Q4 2007 vs Q3 2007

14,2 %

16,9 %

4,8 %

7,8 %

11,4 %10,8 %

23,5 % 22,5 %21,0 %

14,9 %

12,9 %13,9 %

0,0 %

5,0 %

10,0 %

15,0 %

20,0 %

25,0 %

EuropeNews

EuropeMagazine

Asia News AustralasiaNews

SouthAmericaNews

TotalSegments

Q4 07Q3 07

9

EBIT margins per segment Q4 2007 vs Q3 2007

6,2 %

9,0 %

-3,1 %

-0,6 %-1,0 %

-2,0 %

3,5 % 3,1 %

9,1 %

5,7 %

2,1 %

3,1 %

-4,0 %

-2,0 %

0,0 %

2,0 %

4,0 %

6,0 %

8,0 %

10,0 %

EuropeNews

EuropeMagazine

Asia Australasia SouthAmerica

TotalSegments

Q4 07Q3 07

10

Clean EBITDA Margin 2001-2007

EBITDA adjusted for the value of power contracts, provision cost energy cost in South America and restructuring expenses.

24,9

19,5 19,621,3

19,320,0

17,618,8

16,816,815,8

18,1

15,116,7

13,014,5

16,0

18,416,4

17,516,6

12,811,4

0,0

5,0

10,0

15,0

20,0

25,0

30,0

2/02

3/02

4/02

1/03

2/03

3/03

4/03

1/04

2/04

3/04

4/04

1/05

2/05

3/05

4/05

1/06

2/06

3/06

4/06

1/07

2/07

3/07

4/07

11

Financial Items

in MNOKQ4-07 Q3-073) Q4-06 2007 2006

Net interest cost -289 -291 -254 -1,098 -1,013 Interest rate derivatives 38 13 14 72 38Currency gain/loss 28 370 98 668 -17 Other financial items -37 -25 -107 -120 -163 Total financial items -260 67 -249 -478 -1,155

Gearing 1) 1.05 0.98 0.96 1.05 0.96Net interest bearing debt 2) 16,408 16,231 17,320 16,408 17,3201) Gearing = Net interest bearing debt / Equity

2) Net interest-bearing debt = Interest bearing debt – Cash and Cash equivalents - Interest rate swaps (fair value hedge)

3) Corrected split on Net Interest Cost and Interest Rate Derivatives

12

NSI trade weighted currency index

94,5

91,6 92,0

88,3 88,787,9

86,687,3

88,6

85,9

88,3

90,1

88,5

87,1

82,3

84,8

88,2

85,7

91,6

87,6

76

78

80

82

84

86

88

90

92

94

96

Q1'04

Q2'04

Q3'04

Q4'04

Q1'05

Q2'05

Q3'05

Q4'05

Q1'06

Q2'06

Q3'06

Q4'06

Q1'07

Q2'07

Q3'07

Q4'07

NSG

Fx

Inde

x (1

/1/0

2=10

0

Avg Q'ly Index Avg 2004 Avg 2005 Avg 2006 Avg 2007

13

Balance SheetNOK Million 31.12.2007 30.09.2007 ChangeASSETS Deferred tax asset 11 99 (88)Other intangible assets 132 2 945 (2 812)Property, plant and equipment 28 401 30 621 (2 220)Investment in associated companies 234 219 15Other non-current assets 529 416 113Total non-current assets 29 307 34 300 (4 993)Inventories 2 731 3 130 (400)Receivables 3 811 3 765 46Cash and cash equivalents 1 792 1 966 (173)Other current assets 5 618 1 053 4 565Total current assets 13 953 9 914 4 039TOTAL ASSETS 43 260 44 214 (954) Paid in equity 12 310 12 310 (0)Retained earnings 3 322 4 168 (846)Minority interests 365 386 (22)Total equity 15 957 16 864 (907)Pension obligations 519 503 16Deferred tax 2 033 1 492 541Interest bearing non-current liabilities 17 294 17 111 183Other non-current liabilities 1 686 1 931 (244)Total non-current liabilities 21 533 21 037 496Interest-bearing current liabilities 1 141 1 201 (61)Trade and other payables 3 702 3 573 129Tax payable 73 186 (113)Other current liabilities 814 1 353 (539)Total current liabilities 5 770 6 313 (543)Total liabilities 27 304 27 350 (46)TOTAL EQUITY AND LIABILITIES 43 260 44 214 (954)

Net interest bearing debt 16 407 16 231 176

14

Balance SheetNOK Million 31.12.2007 31.12.2006 ChangeASSETS Deferred tax asset 11 216 (205)Other intangible assets 132 3 056 (2 923)Property, plant and equipment 28 401 33 547 (5 146)Investment in associated companies 234 333 (99)Other non-current assets 529 425 104Total non-current assets 29 307 37 577 (8 270)Inventories 2 731 2 688 43Receivables 3 811 3 999 (188)Cash and cash equivalents 1 792 397 1 395Other current assets 5 618 569 5 049Total current assets 13 953 7 653 6 299TOTAL ASSETS 43 260 45 230 (1 970) Paid in equity 12 310 12 309 1Retained earnings 3 322 5 791 (2 469)Minority interests 365 450 (85)Total equity 15 957 18 550 (2 594)Pension obligations 519 530 (12)Deferred tax 2 033 1 804 230Interest bearing non-current liabilities 17 294 14 712 2 582Other non-current liabilities 1 686 1 756 (70)Total non-current liabilities 21 533 18 802 2 731Interest-bearing current liabilities 1 141 3 114 (1 973)Trade and other payables 3 702 3 833 (131)Tax payable 73 123 (50)Other current liabilities 814 808 6Total current liabilities 5 770 7 878 (2 108)Total liabilities 27 304 26 680 623TOTAL EQUITY AND LIABILITIES 43 260 45 230 (1 969)

Net interest bearing debt 16 407 17 320 (913)

15

Balance Sheet – Q4 Currency Effect

Gross Assets less non-interest bearing debt

Distribution as of 31.12.2007:NOK 29%EUR 23%AUD 13%NZD 8%USD 5%CNY 4%KRW 15%Other 3%

Debt


Increase in Q4: NOK 107 mill Increase in Q4: NOK 232 mill

Decreased equity: NOK -125 mill.

Currency rate change

Q3-Q4:

EUR 3,1%AUD -0,8%NZD 2,0%USD -0,6%CNY 2,1%KRW -1,7%

16

Balance Sheet – YTD Currency Effect

Gross Assets less non-interest bearing debt


Debt


Decrease in 2007:NOK -1942 mill Decrease in 2007:NOK -1260 mill

Decreased equity: NOK -682 mill

Currency rate change

YTD:

EUR -3,4%AUD -3,5%NZD -4,5%USD-13,5%CNY -6,2%KRW-13,4%

17

Debt Maturity Schedule Q4 2007

DEBT MATURITY SCHEDULE AS OF 31.12.2007Norske Skog

4,094

1,1411,497

4,520

3,526

1,249 1,082 1,082

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

2008 2009 2010 2011 2012-14 2015-16 2017-19 2033

NO

K m

illio

n

18

CashFlow Q4 2007 vs Q3 2007 (NOK million) Q4 2007 Q3 2007 ChangeEBITDA incl. restr. costs 5 761 919 4 842 Adjustment of non-cash items in EBITDA1) (4 869) (80) (4 789) Change in W orking Capital 287 197 90 Operational Cash Flow 1 179 1 036 143 Cash from net financial items (317) (120) (197) Taxes paid (341) (144) (197) Levered Operational Cash Flow 521 772 (251) Investments (capex) (599) (449) (150) Sale of operational fixed assets 9 4 5 Other investments / divestments - - - Sale of shares - - - Dividend received - 87 (87) Dividend paid - - - Free Cash Flow (69) 414 (483) New equity - - - FX and other non cash items on cash and debt (54) 817 (871) Change in net interest bearing debt (123) 1 231 (1 354)

19

CashFlow Q4 2007 vs Q4 2006

(NOK million) Q4 2007 Q4 2006 ChangeEBITDA incl. restr. costs 5 761 1 296 4 465 Adjustment of non-cash items in EBITDA 1 (4 869) 82 (4 951) Change in W orking Capital 287 (56) 343 Operational Cash Flow 1 179 1 322 (143) Cash from net financial items (317) (593) 276 Taxes paid (341) (56) (285) Levered Operational Cash Flow 521 673 (152) Investments (capex) (599) (589) (10) Sale of operational fixed assets 9 2 7 Dividend paid - - - Free Cash Flow (69) 86 (155) New equity - - - FX and other non cash items on cash and debt (54) 378 (432) Change in net interest bearing debt (123) 464 (587)

20

CashFlow 2006 vs 2007(NOK million) 2007 2006 ChangeEBITDA incl. restr. costs 8 395 3 932 4 463 Adjustment of non-cash items in EBITDA1) (4 313) 856 (5 169) Change in Working Capital (391) (566) 175 Operational Cash Flow 3 691 4 222 (531) Cash from net financial items (1 011) (1 365) 354 Taxes paid (514) (169) (345) Levered Operational Cash Flow 2 166 2 688 (522) Investments (capex) (1 746) (1 722) (24) Sale of operational fixed assets 15 11 1 737 Other investments / divestments - 1 213 (11) Sale of shares 5 - - Dividends received 87 - - Dividend paid (1 049) (1 046) (3) Free Cash Flow (522) 1 144 (1 666) FX and other non cash items on cash and debt 1488 599 889 Change in net interest bearing debt 966 1 743 (777)

21

CashFlow by quarter 2005 - 2007

(NOK million) Q4 2005 Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007Clean EBITDA, segments 956 1 072 1 093 1 287 1 408 1 243 1 208 903 865Clean EBITDA, other/elim (31) (34) (8) (40) (80) (68) (70) (52) (90)Clean EBITDA, total 925 1 038 1 085 1 247 1 328 1 175 1 138 851 775Other EBITDA (112) 1 (257) (482) (32) (383) (215) 69 4 986 IFRS EBITDA 813 1 039 832 765 1 296 792 923 920 5 761Non-cash in EBITDA (6) - 280 494 82 418 218 (80) (4 869)Change in WC 556 (518) (213) 221 (56) (379) (496) 197 287Total 550 (518) 67 715 26 39 (278) 117 (4 582) Operational CF 1 363 521 899 1 480 1 322 831 645 1 037 1 179 CF from net financials (249) (231) (316) (225) (593) (247) (327) (120) (317)Paid taxes (87) (39) (9) (65) (56) 23 (52) (144) (341) "Levered CF" 1 027 251 574 1 190 673 607 266 773 521

Capex (807)(333) (468) (332) (589) (199) (499) (449) (599)

CF after Capex 220 (82) 106 858 84 408 (233) 324 (78)

Segmented results

23

Financial Summary - SegmentsEurope

NewsEurope

MagEurope

Total PanAsia AustralasiaSouth

AmericaRevenue Q4 06 2 446 1855 4301 1577 1048 375

Q1 07 2 190 1624 3814 1381 969 312Q2 07 2 257 1556 3813 1433 985 345Q3 07 2 156 1767 3923 1329 940 316Q4 07 2 351 1715 4066 1367 971 309

EBITDA Q4 06 466 226 692 290 246 180Q1 07 446 149 595 301 277 70Q2 07 456 148 604 241 278 85Q3 07 364 138 502 143 211 47Q4 07 334 83 417 156 228 65

EBIT Q4 06 244 80 324 110 88 131Q1 07 266 (10) 256 137 102 26Q2 07 280 2 282 82 104 46Q3 07 194 (10) 184 (26) 29 18Q4 07 146 (54) 93 (14) 34 28

EBITDA % Q4 06 19,0 % 12,2 % 16,1 % 18,4 % 23,4 % 48,1 %Q1 07 20,4 % 9,2 % 15,6 % 21,8 % 28,6 % 22,4 %Q2 07 20,2 % 9,5 % 15,8 % 16,8 % 28,2 % 24,6 %Q3 07 16,9 % 7,8 % 12,8 % 10,8 % 22,5 % 14,9 %Q4 07 14,2 % 4,8 % 10,2 % 11,4 % 23,5 % 21,0 %

EBIT % Q4 06 10,0 % 4,3 % 7,5 % 7,0 % 8,4 % 35,0 %Q1 07 12,1 % -0,6 % 6,7 % 9,9 % 10,5 % 8,3 %Q2 07 12,4 % 0,1 % 7,4 % 5,7 % 10,6 % 13,3 %Q3 07 9,0 % -0,6 % 4,7 % -2,0 % 3,1 % 5,7 %Q4 07 6,2 % -3,1 % 2,3 % -1,0 % 3,5 % 9,1 %

24

Operational Summary - Segment

Europe News

Europe Mag

Europe Total Asia Australasia

South America

Production Q4 06 537 328 865 376 203 76(000 tonnes) Q1 07 536 308 844 389 198 73

Q2 07 537 322 859 391 213 77Q3 07 525 330 855 385 211 78Q4 07 494 324 817 375 209 75

Deliveries Q4 06 567 338 905 397 211 76(000 tonnes) Q1 07 497 304 801 364 194 70

Q2 07 517 296 813 392 196 77Q3 07 510 352 862 381 200 80Q4 07 562 339 901 361 215 76

Production/ Q4 06 99 % 96 % 98 % 84 % 90 % 97 %Capacity (%) Q1 07 97 % 89 % 94 % 96 % 90 % 94 %

Q2 07 97 % 93 % 96 % 97 % 97 % 99 %Q3 07 95 % 95 % 95 % 96 % 96 % 100 %Q4 07 88 % 93 % 90 % 93 % 96 % 94 %

Deliveries/ Q4 06 104 % 99 % 102 % 89 % 94 % 97 %Capacity (%) Q1 07 90 % 88 % 89 % 90 % 88 % 90 %

Q2 07 94 % 86 % 91 % 97 % 89 % 99 %Q3 07 93 % 102 % 96 % 95 % 91 % 103 %Q4 07 100 % 97 % 99 % 90 % 99 % 95 %

25

Europe Newsprint

NOK mill Q4 07 Q3 07 Q4 06 2007 2006Operating revenue 2 351 2 156 2 446 8 954 9 072EBITDA 334 364 466 1 600 1 742EBIT 146 194 244 886 768Gross operating margin 14,2 16,9 19,1 17,9 19,2

Shipments 562 510 567 2 087 2 175Production 494 525 537 2 092 2 151Production / capacity 88 95 99 95 99

26

Europe Magazine

NOK mill Q4 07 Q3 07 Q4 06 2007 2006Operating revenue 1 715 1 767 1 855 6 662 6 748EBITDA 83 138 226 518 933EBIT (54) (10) 80 (72) 282Gross operating margin 4,8 7,8 12,2 7,8 13,8


27

Asia

NOK mill Q4 07 Q3 07 Q4 06 2007 2006Operating revenue 1 367 1 329 1 577 5 510 6 096EBITDA 156 143 290 841 1 072EBIT (14) (26) 110 179 327Gross operating margin 11,4 10,8 18,4 15,3 17,6


28

Australasia

NOK mill Q4 07 Q3 07 Q4 06 2007 2006Operating revenue 971 940 1 048 3 865 3 897EBITDA 228 211 246 994 719EBIT 34 29 88 269 68Gross operating margin 23,5 22,4 23,5 25,7 18,4

Shipments 215 200 211 805 826Production 209 211 203 830 798Production / capacity 96 96 90 95 89

29

South America

NOK mill Q4 07 Q3 07 Q4 06 2007 2006Operating revenue 309 316 375 1 281 1 399EBITDA 65 47 120 267 469EBIT 28 18 71 115 289Gross operating margin 21,0 14,9 32,1 20,8 33,5

Shipments 76 80 76 302 293Production 75 78 76 303 297Production / capacity 96 100 97 97 96

30

“Clean” EBITDA by quarter

• Q3 2006 is restated

Q4 2005 Q1 2006 Q2 2006 Q3 2006 1 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007Europe newsprint 309 421 390 465 466 446 456 364 334Europe magazine 220 254 176 277 226 149 148 138 83Europe total 529 675 566 742 692 595 604 502 417Asia 1 170 242 268 197 290 301 241 143 155Australasia 164 66 167 240 246 277 278 211 228South America 93 89 92 108 180 70 85 47 65Total regions 956 1 072 1 093 1 287 1 408 1 243 1 208 903 865Other activities 25 11 (0) 0 0 - 0 4 (5)Corp. Center, elim. etc (56) (49) (12) (40) (81) (68) (79) (57) (85)Clean EBITDA 925 1 034 1 081 1 247 1 327 1 175 1 129 849 775Other gains and losses 208 5 4 5 - - 9 - - Value changes power contracts - 67 - 13 55 (22) 26 236 4 489 Value changes derivatives - (126) (213) (130) (72) (396) (255) (158) 439 Value changes other assets - - - - - - - - 27 Realised gain/loss commodities - 65 29 14 36 37 14 (11) 31 Special, non-recurring items - (5) (6) (7) (6) (2) - 2 - Grid dispute, Brazil (50) - - - - - - - - Restruct Union (270) - - - (45) - - - - Restruct Parenco - - (63) - - - - - - Restruct Turnaround - - - (376) - - - - - EBITDA under IFRS 813 1 040 832 765 1 296 792 923 919 5 761

31

“Clean” EBIT by quarters

• Q3 2006 is restated

Q4 2005 Q1 2006 Q2 2006 Q3 2006 1 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007Europe newsprint 37 148 153 223 244 266 280 194 146Europe magazine 93 86 10 106 80 (10) 2 (10) (54)Europe total 130 234 163 329 324 256 282 184 92Asia 1 23 50 83 9 110 137 82 (26) (14)Australasia (39) (105) 12 73 88 102 104 29 34South America 45 42 48 68 131 26 46 18 28Total regions 159 221 306 478 653 521 514 206 140Other activities 17 6 (0) 0 0 0 0 4 15Corp. Center, elim. etc (79) (60) (28) (59) (55) (81) (98) (70) (99)Clean EBIT 97 167 278 419 598 440 416 139 56Other gains and losses 208 5 4 5 - - 9 - 1 Value changes power contracts - 67 - 13 55 (22) 26 236 4 489 Value changes derivatives - (126) (213) (130) (72) (396) (255) (158) 439 Value changes other assets - - - - - - - - 27 Realised gain/loss commodities - 65 29 14 36 37 14 (11) 31 Special, non-recurring items - (5) (6) (7) (6) (2) - 2 - Grid dispute, Brazil (50) - - - - - - - (0) Write-down PanAsia - - (43) - - - - - - Restruct Union (270) - - - (45) - - - - Write-down Union (155) - - - - - 26 - - Restruct Parenco - - (63) - - - - - - Loss Forestia (24) - - - - - - - - Restruct Turnaround - - - (376) - - - - - Permanent impairment - - - (3 190) - - - - (4 866) EBIT under IFRS (195) 172 (14) (3 252) 567 57 236 208 176

Norske SkogMarket updateFebruary, 2007

33

Demand changes 2007 vs 2006

Standard Newsprint World (YTD Nov): (0,5%)

Standard Newsprint

Standard & Improved Newsprint

Magazine Paper

Total

(10,3%) (8,3%) 4,8% (3,2%)

Standard Newsprint S

Korea

3,0%

Standard Newsprint

China

8,5%Standard Newsprint Far East

Total3,1%

S America

Standard Newsprint

7,8%

W. Europe E. EuropeEurope Total

Source: PPPC, Cepiprint, NSI internalFar-East, Brazil and World figures are ytd November, China is ytd October 2007 Other regions December ytd.

Standard Newsprint


Magazine Paper

Total

(1,1%) (1,4%) 2,7% 0,6%3,6% 4,1% 19,8% 9,9%

(0,3%) (0,6%) 4,4% 1,7%

Standard Newsprint


2,4% 1,7%

Australasia

34

Newsprint & OUNC - EuropeOUNC = Improved newsprint & other uncoated publication papers

Demand in Europe:Q4 07/Q4 06: 0.2%

2HY 07/2HY 06 : -1.0%

YTD December: -0.6%

Total deliveries from Western Europe:Q4 07/Q4 06: -0.6%

2HY 07/2HY 06 : -1.2%

YTD December: -2.3%

Total deliveries of Newsprint from North America to Western Europe:

YTD December: + 58%

Volumes back to levels in 2004/2005

Reference price Newsprint December:€550/mt for 45g/m2

+ 4% from Dec 2006

Source: Cepiprint

Newsprint, 45 g/m2, Germany

400

450

500

550

600

650

700

2Q 1

994

1Q

199

54Q

199

53Q

199

62Q

199

7 1

Q 1

998

4Q 1

998

3Q 1

999

2Q 2

000

1Q

200

14Q

200

13Q

200

22Q

200

3 1

Q 2

004

4Q 2

004

3Q 2

005

2Q 2

006

1Q 2

007

4Q 2

007

EU

R/t

NP+OUNC Demand in Europe

0500

1 0001 5002 0002 5003 0003 5004 000

2002

Q1

Q3

2003

Q1

Q3

2004

Q1

Q3

2005

Q1

Q3

2006

Q1

Q3

2007

Q1

Q3

1000

tonn

es

35

Newsprint - North AmericaStd. Newsprint demand:

Q4 07/Q4 06: -9.0%

2HY 07/2HY 06: -9.8%YTD December: -10.3%

Uncoated Mech Papers (excl. SC) demand:

Q4 07/Q4 06: +3.7%


Combined Std NP & Uncoated Mech (excl. SC) demand:

Q4 07/Q4 06: -5.8%


Reference price Newsprint December:$625/mt for 45g/m2

+$20 since October 2007-$75 since December 2006

Newsprint, 45 g/m2, US East Coast

400

500

600

700

800

900

2Q 1

994

1Q

199

5

4Q 1

995

3Q 1

996

2Q 1

997

1Q

199

8

4Q 1

998

3Q 1

999

2Q 2

000

1Q

200

1

4Q 2

001

3Q 2

002

2Q 2

003

1Q

200

4

4Q 2

004

3Q 2

005

2Q 2

006

1Q 2

007

4Q 2

007

USD

/t

Newsprint + Uncoated Mechanical (without SC grades) Demand in North America

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

2002

Q1

Q3

2003

Q1

Q3

2004

Q1

Q3

2005

Q1

Q3

2006

Q1

Q3

2007

Q1

Q3

1000

tonn

es

Source: PPPC, RISI

36

Newsprint shipments from N. Am. to Europe

North American market share in Europe

-

50

100

150

200

250

Q1-200

4Q2-2

004

Q3-200

4Q4-2

004

Q1-200

5Q2-2

005

Q3-200

5Q4-2

005

Q1-200

6Q2-2

006

Q3-200

6Q4-2

006

Q1-200

7Q2-2

007

Q3-200

7Q4-2

007

Tonn

es in

000

's

0 %

1 %

2 %

3 %

4 %

5 %

6 %

7 %

8 %

NA exports to Europe Market share in %

Source: PPPC

37

Canadian share of European newsprint market

Source: PPPC

0

2 000

4 000

6 000

8 000

10 000

12 000

1991

1993

1995

1997

1999

2001

2003

2005

2007

tonn

es (0

00's

)

0 %

2 %

4 %

6 %

8 %

10 %

12 %

14 %

Mar

ket S

hare

(%)

European DemandCanadian exports as % of European demandTrend

38

400

440

480

520

560

600

J02

M M J S N J03

M M J S N J04

M M J S N J05

M M J S N J06

M M J S N J07

M M J S N

Europe US

Newsprint Paper Prices in 45g and in EUR/t Europe and North America

Source: RISI Paper Trader January 2008

Price difference €115 in December 2007

39

SC Magazine Paper - Europe

Demand in Europe:

Q4 07/Q4 06: +3.4%

2HY 07/2HY 06: +4.8%

YTD December: +4.1%

Total deliveries from Europe:Q4 07/Q4 06 : +0.8%2HY 07/2HY 06: +2.7%YTD December: +2.4%

Reference price SC December:

€590/mt, unchanged since Feb 2007

-20€ since Dec 2006

Source: PPPC, Cepiprint, RISI

SC, 56 g/m2 roto, Germany

500

550

600

650

700

750

800

2Q 1

994

1Q

199

54Q

199

5

3Q 1

996

2Q 1

997

1Q

199

84Q

199

8

3Q 1

999

2Q 2

000

1Q

200

14Q

200

13Q

200

2

2Q 2

003

1Q

200

4

4Q 2

004

3Q 2

005

2Q 2

006

1Q 2

007

4Q 2

007

EUR

/t

SC Magazine Demand in Europe

0

250

500

750

1 000

1 250

2002

Q1

Q3

2003

Q1

Q3

2004

Q1

Q3

2005

Q1

Q3

2006

Q1

Q3

2007

Q1

Q3

1000

tonn

es

40

CMR Magazine Paper - EuropeCMR = Coated Mechanical Reels (LWC, MWC & HWC)

Demand in Europe:

Q4 07/Q4 06: +7.0%

2HY 07/2HY 06 : +5.8%

YTD December: + 4.5%

Total deliveries from Europe:

Q4 07/Q4 06: + 3.4%

2HY 07/2HY 06: + 2.4%

YTD December: + 0.7%

Reference price CMR December 2007

€660/mt, unchanged since February 2007

-20€ since December 2006

Source: PPPC, Cepiprint

CMR, 60 g/m2 offset, Germany

600

650

700

750

800

850

900

950

1000

2Q 1

994

1Q

199

5

4Q 1

995

3Q 1

996

2Q 1

997

1Q

199

8

4Q 1

998

3Q 1

999

2Q 2

000

1Q

200

1

4Q 2

001

3Q 2

002

2Q 2

003

1Q

200

4

4Q 2

004

3Q 2

005

2Q 2

006

1Q 2

007

4Q 2

007

EUR

/ t

CMR Demand in Europe

0

500

1 000

1 500

2 000

2 500

2002

Q1

Q3

2003

Q1

Q3

2004

Q1

Q3

2005

Q1

Q3

2006

Q1

Q3

2007

Q1

Q3

1000

tonn

es

41

Magazine Paper Prices - Europe and North America

SC Paper Prices

400

600

800

1000

2Q 1

997

1Q

199

8

4Q 1

998

3Q 1

999

2Q 2

000

1Q

200

1

4Q 2

001

3Q 2

002

2Q 2

003

1Q

200

4

4Q 2

004

3Q 2

005

2Q 2

006

1Q 2

007

4Q 2

007

EU

R/t

SC Europe 56 g SC USA 52 g / 35 lb

LWC Paper Prices

400600800

10001200

2Q 1

997

1Q

199

84Q

199

8

3Q 1

999

2Q 2

000

1Q

200

14Q

200

1

3Q 2

002

2Q 2

003

1Q

200

4

4Q 2

004

3Q 2

005

2Q 2

006

1Q 2

007

4Q 2

007

EU

R/t

LWC Europe 60 g / 40 lb LWC USA 60 g / 40 lb

Source: RISI

42

Asia

Demand standard newsprint:YTD November 2007

– Far East total: + 3.1% – Non-Japan Far-East: + 5.2%– China: + 8.5% (YTD October)– South Korea: + 3.0% (YTD December )– India: +6.1%

Prices Q4 2007Korea USD 660 (46 gsm)China USD 511 (48.8 gsm excl. vat)India USD 615 (45 gsm)Hong Kong USD 562 (48.8 gsm)

Source: PPPC, Cepiprint, NSI internal

43

Australasia - 2007 vs 2006

Demand Standard Newsprint:

YTD December: +2.4%

– Stronger retail economy

– Tasman Mill downtime at end of Q4.

Prices:

Australia: Newsprint down 7% from July 1st 2007

New Zealand: Newsprint down 4.5% from July 1st 2007 with intention to remain unchanged until the end of 2008


44

South America 2007 vs 2006

Demand – Standard NewsprintRegional demand: + 7.9 % Brazil demand: +1.1%

– Customers reduced their inventory level (from 60 to near 40 daysestimated to December 2007)

Brazil consumption: +12% due to new titles and increased circulation/ad lineage.

Prices Downward pressure on prices in Brazil bottoms out in Q4.Price Brazil 45g December 2007 = USD 600/t


q4 '07 financial details market up date [read-only] nok million q4 2007 q4 2006 change...

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