Key highlights:
*Stable sales volumes despite challenging markets
*Successfully accomplished maintenance shutdowns
*Accelerated delivery of the cost and efficiency programme
*Strong operating cash flow generation
*Recyclable Flow Wrap launched
Quarterly data:
*Net sales declined by 5% to SEK 5 561 million (5 833). Excluding currency effects sales declined by 3%
*Adjusted EBITDA* was SEK 570 million (639), negatively affected by timing of annual maintenance shutdowns
*Operating profit was SEK 86 million (149)
*Net profit from continuing operations was SEK 52 million (77)
Earnings per share amounted to SEK 0.25 (27.83)*
COMMENTS BY THE CEO
The third quarter was impacted by annual maintenance shutdowns at our mills in Karlsborg, Gävle and Gruvön. These shutdowns were planned for the first half of the year but were rescheduled due to the Covid-19 outbreak. Considering the ongoing pandemic, carrying out these large shutdowns was a challenging task. I am happy to say that they were successfully accomplished as planned and this without compromising the safety of our employees and contractors.
The market continued to be challenging. Mix effects combined with further softening of the market prices, inventory adjustments and slow demand impacted sales and margins negatively. The quarterly result was also heavily affected by maintenance costs. On a positive note, lower raw material costs and further improved performance of our new board machine (KM7) at Gruvön and very strong delivery of our cost- and efficiency programme helped to defend our financial result.
Market conditions were largely unchanged compared with the second quarter. While facing a challenging market situation, we continue to focus our efforts on our three core priority areas; the ramp-up of our new board machine at Gruvön (KM7), ensuring a safe and stable production, and delivering on our cost and efficiency programme.
During the maintenance shutdown at Gruvön certain modifications were made on KM7, these will enable us to move into a new phase of the ramp-up. We have now started to deliver coated material to customers and received very positive feedback. The focus for KM7 is now on the commercial development, finding new homes for incremental volumes and stepwise improving the product mix. In addition to the ongoing required certification process for liquid board, we will expand our premium-quality cartonboard business. KM7 is expected to reach break-even EBITDA during 2021, and will in the coming years deliver a significant profit contribution.
Production in the quarter was affected by the maintenance shutdowns and some related start-up problems in Gävle and Gruvön, which caused a few days of additional unplanned production loss. We also took demand-related downtime on a few of our paper machines. Overall, our continuous efforts to achieve a safe and stable production is making progress and is expected to be further strength¬ened by the new organization with all mills operating under one leadership.
We continue to make great progress on our cost and efficiency programme, which generated structural savings of SEK 95 million in the quarter. We raise the target for the programme by SEK 50 million to a run-rate positive impact of SEK 650 million by the end of 2021. For 2020 we expect structural savings of SEK 300 million.
more detail at: https://www.billerudkorsnas.com/press–news/press-releases/2020/interim-report-januaryseptember-2020