Billerud Interim report January–March 2023

Key highlights Q1
Organic and currency-neutral sales growth of 6%
*Market-related downtime in several mills due to customers’ destocking and expectations of weaker market conditions
*Prices increased for liquid board and speciality paper, were stable for graphic paper and cartonboard, and decreased for other product categories
*All-time high input costs

Quarterly data Q1
*Net sales increased by 55% to SEK 11,495 million (7,397), whereof Billerud North America accounted for SEK 3,311 million (–)
*Operating profit was SEK 806 million (1,189)
*Net profit was SEK 639 million (884)

Comments by the CEO:
Since the beginning of March, there has been a blastomycosis infection outbreak that has impacted the Escanaba mill and we are all deeply saddened that a person who worked as a contractor at the mill has died from the disease. Since first notified by the local public health department, we are cooperating with all available health resources and have taken their recommended actions. On 13 April we proactively decided to temporarily idle the Escanaba mill for up to three weeks as a precaution and to perform additional cleaning of the facilities. Our top priority is the health and safety of our employees and contractors.

The first quarter organic and currency-neutral net sales grew by 6% compared to the corresponding period last year, mainly because of higher sales prices. Our sales volumes were negatively impacted by customers’ destocking due to an inventory-build in the downstream value chain, as well as lower demand for some product categories.

The Group’s first quarter result and EBITDA margin was dampened by temporary elevated costs for raw materials in combination with the challenging market conditions with slower demand. The regions Europe and North America continued to show different margin profiles mainly due to historically high wood prices in Europe.

From the start of 2023 we have implemented price increases in our liquid packaging board, which in the first quarter could not offset the increasing wood costs. The market conditions for our other product categories have been challenging during the first months of 2023. We have adjusted by taking market-related production downtime in several mills. In the first quarter, prices increased for speciality paper and were resilient for graphic paper, while market prices for kraft liner, sack paper and pulp have decreased in recent months.
details at: https://www.billerud.com/globalassets/cision/documents/2023/20230426-interim-report-januarymarch-2023-en-0-4524777.pdf