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1. Company Snapshot

1.a. Company Description

Borregaard ASA develops, produces, and markets specialized biomaterials, biochemicals, and biofuels in Norway, rest of Europe, the United States, Asia, and internationally.It operates through three segments: BioSolutions, BioMaterials, and Fine Chemicals.The BioSolutions segment provides biopolymers for a range of applications, such as agrochemicals, batteries, industrial binders, and construction; and biovanillin for flavor and fragrance companies, as well as for food and beverage industry.


The BioMaterials segment offers specialty cellulose for use as a raw material in the production of cellulose ethers, cellulose acetate, and other specialty products; and cellulose fibrils for industrial applications.The Fine Chemicals segment provides fine chemical intermediates for contrast agents; and bioethanol.Borregaard ASA was incorporated in 2012 and is headquartered in Sarpsborg, Norway.

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1.b. Last Insights on BRG

Borregaard ASA's recent performance was driven by strong Q4 2024 results, with EBITDA1 reaching NOK 398 million, a 22% increase from the same period last year. The company's operating revenues were NOK 1,744 million, a 9% increase from the same period last year. The BioSolutions segment showed significant growth, with increased sales driving the strong result. Additionally, the company's Board of Directors proposed an ordinary dividend for 2024 of NOK 4.25 per share, a positive sign for shareholders.

1.c. Company Highlights

2. Borregaard's Q4 2025 Earnings: A Mixed Bag

Borregaard's fourth quarter 2025 financial performance was marked by a slight increase in EBITDA to NOK 405 million, up from NOK 398 million in the same quarter last year. However, the EBITDA margin contracted by 0.7 percentage points to 22.1%. Earnings per share (EPS) came in at a loss of NOK 0.81, significantly below analyst estimates of NOK 2.2. Excluding impairments, EPS was NOK 1.64, beating the corresponding quarter last year's NOK 1.30. The company's operating revenues in BioSolutions were in line with the fourth quarter of 2024, while EBITDA for the full year reached an all-time high of NOK 1,209 billion, driven by strong sales to agriculture.

Publication Date: Mar -02

📋 Highlights
  • Full-Year EBITDA Record: Reached NOK 1,878 million, an all-time high driven by strong sales across segments.
  • Q4 EBITDA Slight Increase: Rose to NOK 405 million from NOK 398 million in Q4 2024.
  • Impairments on Start-Up Investments: Recorded NOK 245 million, primarily due to delays and capital needs.
  • Dividend Increase: Proposed NOK 4.75 per share (up 12% YoY), representing 55% of net earnings before impairments.
  • EBITDA Margin Decline: Ended at 22.1% in Q4, down 0.7 percentage points YoY.

Segment Performance

BioSolutions delivered a solid quarter, driven by high biovanillin deliveries and growth in sales to agriculture. BioMaterials also performed well, supported by higher specialty cellulose prices and increased sales volume. Fine Chemicals saw a strong performance from Fine Chemical Intermediates, but bioethanol sales prices remained at lower levels. According to Tom Erik Foss-Jacobsen, CEO, the company achieved an all-time high EBITDA of NOK 1,878 million for the full year, driven by strong momentum across business segments.

Guidance and Outlook

For 2026, Borregaard expects BioSolutions sales volume to be approximately 340,000 tonnes, with continued growth in the agriculture segment. BioMaterials full-year sales volume is expected to be in the range of 155,000 to 160,000 tonnes. Fine Chemicals sales prices for bioethanol are expected to be largely in line with 2025 levels. The company's guidance suggests a stable outlook for its business segments, with some growth expected in key areas.

Valuation and Dividend

Borregaard's current valuation metrics suggest a relatively stable picture. The stock trades at a P/E Ratio of 28.42, P/B Ratio of 3.01, and EV/EBITDA of 10.53. The dividend yield stands at 2.41%, with the Board proposing a dividend of NOK 4.75 per share for 2025, an increase of 12% compared to last year. The dividend yield and payout ratio suggest a reasonable return for shareholders, given the company's earnings profile.

Challenges Ahead

The company faces challenges, including increased competition from China in the specialty cellulose market and rising costs. However, Borregaard's strategy of shifting cellulose production to food and pharma applications has been successful. The debottlenecking project at the Sarpsborg site is expected to increase production output gradually from the second quarter of 2027, despite initial delays. With a solid track record of delivering strong EBITDA and a reasonable valuation, Borregaard appears well-positioned to navigate the challenges ahead.

3. NewsRoom

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Borregaard ASA: Reporting of transactions in Borregaard ASA's shares made by person discharging managerial responsibilities

Feb -23

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Borregaard Insider Buying Deepens Management Alignment With Long Term Shareholders

Feb -19

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Borregaard ASA: Reporting of transactions in Borregaard ASA's share options by person discharging managerial responsibilities

Feb -16

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Borregaard ASA: Reporting of transactions in Borregaard ASA's shares made by person discharging managerial responsibilities

Feb -16

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Borregaard ASA (BRRDF) Q4 2025 Earnings Call Highlights: Record EBITDA Amidst Challenges

Feb -04

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Borregaard ASA: The Board of Directors’ dividend proposal to Borregaard’s Annual General Meeting

Feb -04

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Borregaard ASA: EBITDA1 of NOK 405 million in the 4th quarter 2025

Feb -04

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Assessing Borregaard (OB:BRG) Valuation After Recent Share Price Moves

Jan -29

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.87%)

6. Segments

BioSolutions

Expected Growth: 4%

Borregaard ASA's BioSolutions segment growth is driven by increasing demand for sustainable and eco-friendly products, expansion into new markets, and strategic partnerships. The company's unique biorefinery concept, which converts wood into biochemicals, also contributes to growth. Additionally, the rising need for biodegradable plastics and biochemicals in various industries, such as packaging and construction, fuels the segment's growth.

BioMaterials

Expected Growth: 3%

Borregaard ASA's BioMaterials segment growth is driven by increasing demand for sustainable and biodegradable products, government regulations favoring eco-friendly alternatives, and the company's strong R&D capabilities. Additionally, the growing need for biomedical applications, such as wound healing and tissue engineering, contributes to the segment's growth.

Fine Chemicals

Expected Growth: 6%

Borregaard ASA's Fine Chemicals segment growth is driven by increasing demand for sustainable and eco-friendly products, expansion in the pharmaceutical and personal care industries, and strategic partnerships to enhance product offerings. Additionally, the company's focus on R&D and innovation enables it to capitalize on emerging trends and opportunities in the fine chemicals market.

Eliminations

Expected Growth: 2%

Borregaard ASA's 2% growth is driven by increasing demand for sustainable bioproducts, expansion into new markets, and strategic partnerships. The company's focus on bio-based solutions and commitment to reducing carbon footprint resonate with environmentally conscious consumers, leading to increased sales. Additionally, Borregaard's diversified product portfolio and efficient production processes contribute to its steady growth.

7. Detailed Products

Specialty Cellulose

A biodegradable and renewable biomaterial derived from wood, used in various applications such as paper, textiles, and pharmaceuticals.

Bioethanol

A biofuel produced from wood and other biomass, used as a sustainable alternative to fossil fuels.

Vanillin

A natural flavoring agent derived from wood, used in the food and beverage industry.

Lignin-based Construction Materials

Sustainable building materials derived from lignin, used in construction and insulation.

Agricultural Products

Natural and organic fertilizers and soil conditioners derived from wood, used in agriculture.

8. Borregaard ASA's Porter Forces

Forces Ranking

Threat Of Substitutes

Borregaard ASA operates in the biorefinery industry, which has a moderate threat of substitutes. The company's products, such as lignin, can be replaced by alternative products, but the switching costs are relatively high.

Bargaining Power Of Customers

Borregaard ASA has a diverse customer base, which reduces the bargaining power of individual customers. The company's products are also specialized, making it difficult for customers to switch to alternative suppliers.

Bargaining Power Of Suppliers

Borregaard ASA relies on a few large suppliers for its raw materials, which gives them some bargaining power. However, the company's long-term contracts and diversified supply chain mitigate this risk.

Threat Of New Entrants

The biorefinery industry has high barriers to entry, including significant capital requirements and regulatory hurdles. This makes it difficult for new entrants to compete with established players like Borregaard ASA.

Intensity Of Rivalry

The biorefinery industry is highly competitive, with several established players competing for market share. Borregaard ASA faces intense rivalry from companies like UPM-Kymmene and Stora Enso.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 26.98%
Debt Cost 6.29%
Equity Weight 73.02%
Equity Cost 6.29%
WACC 6.29%
Leverage 36.95%

11. Quality Control: Borregaard ASA passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Uzin Utz

A-Score: 6.0/10

Value: 7.2

Growth: 5.0

Quality: 6.5

Yield: 4.4

Momentum: 8.5

Volatility: 4.3

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Sniezka

A-Score: 5.7/10

Value: 5.9

Growth: 3.9

Quality: 6.9

Yield: 6.9

Momentum: 5.5

Volatility: 5.3

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AlzChem

A-Score: 5.4/10

Value: 2.7

Growth: 8.0

Quality: 6.3

Yield: 4.4

Momentum: 10.0

Volatility: 1.3

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Borregaard

A-Score: 5.4/10

Value: 2.9

Growth: 5.7

Quality: 6.8

Yield: 3.8

Momentum: 5.0

Volatility: 8.3

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Corbion

A-Score: 5.1/10

Value: 6.5

Growth: 7.4

Quality: 4.4

Yield: 4.4

Momentum: 2.0

Volatility: 6.0

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EPC

A-Score: 4.6/10

Value: 3.7

Growth: 7.4

Quality: 3.2

Yield: 0.6

Momentum: 7.0

Volatility: 5.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

171.2$

Current Price

171.2$

Potential

-0.00%

Expected Cash-Flows