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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. Transcript Summary

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3. NewsRoom

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Borregaard ASA: EBITDA1 of NOK 440 million in the 3rd quarter

Oct -22

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Borregaard ASA: Invitation to Q3 2025 announcement

Oct -15

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Borregaard ASA: Borregaard to participate in a convertible loan to Alginor

Oct -06

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

Oct -03

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Borregaard ASA: NOK 15 million grant for Borregaard’s Biomer project

Sep -25

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Borregaard ASA: Temporary disruption in production of speciality cellulose

Sep -15

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WEPACK Southeast Asia 2025 Concludes with Strong Industry Momentum and Regional Impact

Aug -07

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

Aug -01

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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: 5.9/10

Value: 6.9

Growth: 5.0

Quality: 6.5

Yield: 4.4

Momentum: 9.0

Volatility: 3.7

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Sniezka

A-Score: 5.9/10

Value: 5.9

Growth: 3.9

Quality: 6.3

Yield: 6.9

Momentum: 7.5

Volatility: 5.0

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AlzChem

A-Score: 5.4/10

Value: 1.8

Growth: 8.0

Quality: 7.2

Yield: 3.8

Momentum: 10.0

Volatility: 1.7

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Borregaard

A-Score: 5.1/10

Value: 3.1

Growth: 5.7

Quality: 6.5

Yield: 3.1

Momentum: 3.5

Volatility: 8.7

1-Year Total Return ->

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Corbion

A-Score: 5.0/10

Value: 6.7

Growth: 7.4

Quality: 4.3

Yield: 4.4

Momentum: 1.0

Volatility: 6.3

1-Year Total Return ->

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EPC

A-Score: 4.6/10

Value: 4.4

Growth: 7.4

Quality: 3.2

Yield: 0.6

Momentum: 6.0

Volatility: 6.0

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

192.0$

Current Price

192$

Potential

-0.00%

Expected Cash-Flows