Billerud Posts SEK 212 Million Q3 Profit as Sales Rise 3%, Europe Profitability Improves

Billerud AB reported higher net sales and a return to quarterly net profit in the third quarter of 2026, supported by increased sales volumes, pricing initiatives, efficiency measures and lower pulpwood costs in Europe. The company also reported continued profitability improvement in its European operations and solid performance in North America, despite higher input costs and the financial impact of scheduled maintenance shutdowns.

Net sales for the quarter increased 3% year-on-year to SEK 10,166 million, compared with SEK 9,905 million in the corresponding period of 2025. Adjusted EBITDA reached SEK 1,032 million, against SEK 1,058 million a year earlier, while the adjusted EBITDA margin stood at 10%, compared with 11%.

Operating profit rose to SEK 311 million from SEK 9 million in the prior-year quarter. Billerud reported net profit of SEK 212 million, reversing a net loss of SEK 63 million in Q3 2025. Earnings per share improved to SEK 0.85 from a loss of SEK 0.25.

The results reflect a recovery in operating performance, although the company continues to face cost inflation and weaker year-to-date financial results.

Sales Growth and Improved Quarterly Earnings

Billerud’s total sales volumes increased to 903,000 tonnes in the third quarter, compared with 870,000 tonnes a year earlier. Currency-neutral net sales grew 2%, primarily driven by higher volumes, while selling prices had a negative impact on the Group’s overall quarterly sales comparison.

Adjusted EBITDA was affected by the loss of free emission allowances, while lower pulpwood costs and fixed-cost savings supported earnings. Scheduled annual maintenance shutdowns across the Group had a cost impact of SEK 403 million, compared with SEK 361 million in Q3 2025.

The comparison with the previous year also reflects different items affecting comparability. The third quarter of 2025 included a SEK 350 million provision related to Billerud’s cost-saving programme, whereas no such items were recognised in Q3 2026.

The company said its commercial execution and efficiency initiatives were important contributors to the quarter’s performance. Price increases implemented in both operating regions helped offset input-cost inflation associated with higher energy prices and developments in the Middle East.

Nine-Month Results Remain Under Pressure

Despite the stronger quarterly operating result, Billerud’s financial performance for January–September 2026 remained below the previous year.

Net sales declined 5% to SEK 29,825 million from SEK 31,250 million in the first nine months of 2025. Currency-neutral sales decreased 2%, mainly due to lower selling prices, although total sales volumes edged higher to 2.667 million tonnes from 2.645 million tonnes.

Adjusted EBITDA fell to SEK 2,218 million from SEK 3,358 million, with the adjusted EBITDA margin declining to 7% from 11%.

Operating profit dropped to SEK 24 million from SEK 835 million. The Group recorded a net loss of SEK 71 million for the nine-month period, compared with net profit of SEK 407 million in the corresponding period last year. Earnings per share were negative SEK 0.28, against positive SEK 1.64 a year earlier.

The year-to-date decline in adjusted EBITDA was mainly attributable to lower pricing, the loss of emission rights and higher costs from scheduled maintenance shutdowns. Lower pulpwood costs and fixed-cost savings provided partial support.

Maintenance shutdowns had a total cost impact of SEK 1,029 million in the first nine months of 2026, compared with SEK 782 million a year earlier.

Europe Delivers Stronger Profitability

Billerud’s Region Europe continued to show signs of recovery, with higher sales and improved EBITDA supported by stronger volumes, cost-saving measures and lower pulpwood costs.

Net sales in the region rose to SEK 6,357 million in Q3 2026 from SEK 6,231 million in the prior-year period. EBITDA increased to SEK 734 million from SEK 652 million, lifting the EBITDA margin to 12% from 10%.

Currency-neutral regional sales grew 2%, mainly because of higher volumes across board and paper categories. Lower selling prices, the loss of free emission allowances and higher carbon tax costs partially offset the benefits of the improved operating performance.

The net result from emission rights contributed SEK 30 million in the quarter, compared with SEK 137 million in Q3 2025. Increased carbon tax had a reported impact of SEK 57 million, including SEK 47 million relating to the first half of 2026.

Maintenance shutdowns at Gävle, Karlsborg and Frövi had a combined cost impact of SEK 299 million.

Market conditions improved for containerboard and brown packaging materials during the quarter. Billerud implemented price increases for fluting, liner, brown sack paper and kraft paper, and announced further increases towards the end of the period.

However, consumer sentiment remained muted in key European markets, while excess supply continued to weigh on cartonboard. Market conditions for liquid packaging board remained at normal levels.

For the first nine months, Region Europe generated net sales of SEK 18,425 million, down from SEK 19,842 million a year earlier. Regional EBITDA declined to SEK 1,320 million from SEK 2,039 million, reflecting the continuing pressure on profitability despite the improvement in the latest quarter.

North America Maintains Solid Performance

Region North America continued to benefit from comparatively favourable market conditions and Billerud’s established position in graphic and label paper.

Quarterly regional net sales increased to SEK 3,174 million from SEK 2,960 million. Currency-neutral sales grew 5%, driven primarily by improved prices and higher sales volumes.

EBITDA reached SEK 472 million, compared with SEK 467 million in Q3 2025. The EBITDA margin was 15%, against 16% a year earlier. Higher sales and positive currency effects supported earnings, while higher input costs and maintenance-related operational challenges weighed on performance.

The annual maintenance shutdown at the Escanaba mill had a cost impact of SEK 104 million, compared with SEK 100 million in the previous year.

During the shutdown, Billerud installed upgraded equipment to expand the mill’s ability to manufacture packaging materials. Modernised winding and roll-handling systems are intended to accommodate larger board formats and higher basis weights, improving production flexibility and supporting demand for fibre-based packaging materials.

Additional work focused on optimising heat recovery to reduce steam and energy consumption. The company said the investments are important steps in strengthening its North American manufacturing platform.

Market conditions in North America remained solid, with demand at normal levels across product categories. Billerud implemented price increases for graphic and label paper, while market pulp prices improved slightly.

For January–September, North American net sales totalled SEK 9,025 million, broadly in line with SEK 9,041 million a year earlier. Regional EBITDA declined to SEK 1,324 million from SEK 1,769 million, and the EBITDA margin fell to 15% from 20%.

Cost-Saving Programme Targets SEK 800 Million in Annual Savings

Billerud continues to implement its cost-saving programme, launched in September 2025, with the objective of delivering annualised savings of SEK 800 million from 2027.

The programme focuses on reducing fixed costs through tighter cost prioritisation, streamlined ways of working and personnel reductions across functions in Region Europe and Group functions globally.

The programme generated savings of approximately SEK 100 million in Q1 2026, SEK 150 million in Q2 and SEK 150 million in Q3. A further SEK 150 million of savings is expected in Q4 2026.

As a result, Billerud expects the programme’s total positive impact in 2026, compared with 2025, to reach SEK 550 million. An additional SEK 250 million in savings is targeted for 2027.

The company said its efficiency initiatives are beginning to support improved competitiveness, particularly in Europe, where profitability recovery remains a priority.

Cash Flow Strengthens and Net Debt Declines Sequentially

Billerud reported strong cash generation in the third quarter, with cash conversion reaching 127%, compared with 139% in Q3 2025.

Cash flow from operating activities increased to SEK 1,306 million from SEK 983 million. Operating cash flow after investments in tangible and non-current intangible assets reached SEK 712 million, compared with SEK 270 million in the prior-year quarter.

The improvement was primarily driven by higher cash flow from operating activities, including the effects of profit before tax and changes in working capital, particularly increased operating liabilities. Lower investment expenditure also contributed.

For the first nine months of 2026, cash flow from operating activities totalled SEK 2,210 million, down from SEK 2,749 million a year earlier. Operating cash flow after investments amounted to SEK 644 million, compared with SEK 1,002 million.

Interest-bearing net debt stood at SEK 5,923 million at September 30, 2026, compared with SEK 5,597 million at September 30, 2025, and SEK 6,082 million at the end of 2025. The net debt-to-adjusted EBITDA ratio was 2.0, compared with 1.2 a year earlier.

The company continues to emphasise cash generation and disciplined capital allocation as it works to improve profitability and strengthen its financial performance.

Investment Programme Continues in North America

Billerud’s Evolution programme is designed to gradually shift production in North America towards packaging materials while maintaining its established graphic paper business.

The programme includes upgrades at the Escanaba and Quinnesec mills to enhance production capabilities for white kraftliner and solid bleached board. Total investment under the programme is estimated at SEK 1.3 billion over 2024–2027.

Capital expenditure under Evolution is expected to total SEK 330 million in 2026, with the remaining SEK 460 million expected in 2027.

For the full year 2026, total investments in tangible and intangible assets are expected to amount to SEK 2.4 billion, comprising approximately SEK 2.0 billion in maintenance investments and SEK 0.4 billion in strategic capital expenditure.

For 2027, total investment is expected to reach approximately SEK 2.6 billion, including SEK 2.1 billion in maintenance investments and SEK 0.5 billion in strategic capital expenditure.

The company said it expects no major investment projects beyond 2027, with capital spending subsequently returning towards a base level of approximately SEK 2.2 billion.

Product Development Supports Packaging Strategy

Alongside manufacturing upgrades, Billerud is advancing product innovation to strengthen its position in fibre-based packaging.

In October, the company launched a new generation of Billerud Flute®, an improved fluting product designed to provide higher compression strength. The additional strength is intended to help packaging manufacturers optimise board structures, reduce material consumption and lower packaging weight while maintaining performance requirements.

Billerud has also reported positive customer feedback for its New Billerud Flute®, enabled by an upgraded headbox at PM6 in Gruvön.

At PM8 in Skärblacka, a new Yankee cylinder has strengthened the company’s position in medical and hygiene machine-glazed paper markets. The company has also launched PharmaKraft™, broadening its offering for medical packaging.

In North America, the introduction of Tribute®, its coated liner proposition, is supporting Billerud’s efforts to build a position in the board market.

The company also reported that Quinnesec achieved ISO 9001 certification during the quarter, completing its initiative to establish a globally aligned quality management system across all its mills.

Market Outlook: Stable Conditions Expected in Q4

Billerud expects market conditions to remain stable in both regions during the fourth quarter of 2026.

In North America, market conditions are expected to remain solid. In Europe, demand is expected to remain muted, although selective pricing opportunities are anticipated.

The company expects pricing to have a positive impact in both regions, helping offset slightly higher input costs driven by energy and fuel prices. Nordic pulpwood prices are expected to remain stable.

Billerud also expects a reduced impact from maintenance shutdowns in Q4 following a period of heavier scheduled maintenance activity.

In his comments accompanying the report, President and CEO Ivar Vatne said the third quarter was another step in the right direction, highlighting sequentially higher shipments, improved profitability and strong cash conversion.

Vatne said Europe was beginning to deliver on its potential, supported by cost competitiveness measures, while the company continued to strengthen its North American manufacturing platform and develop packaging products.

Financial Snapshot

Third quarter 2026 compared with Q3 2025

• Net sales: SEK 10,166 million, up 3%.

• Adjusted EBITDA: SEK 1,032 million, compared with SEK 1,058 million.

• Adjusted EBITDA margin: 10%, compared with 11%.

• Operating profit: SEK 311 million, compared with SEK 9 million.

• Net profit: SEK 212 million, compared with a net loss of SEK 63 million.

• Earnings per share: SEK 0.85, compared with negative SEK 0.25.

• Cash flow from operating activities: SEK 1,306 million, compared with SEK 983 million.

• Cash conversion: 127%.

January–September 2026 compared with January–September 2025

• Net sales: SEK 29,825 million, down 5%.

• Adjusted EBITDA: SEK 2,218 million, down 34%.

• Operating profit: SEK 24 million, compared with SEK 835 million.

• Net result: a loss of SEK 71 million, compared with a profit of SEK 407 million.

• Operating cash flow after investments: SEK 644 million, compared with SEK 1,002 million.

• Interest-bearing net debt: SEK 5,923 million at September 30, 2026.

Conclusion

Billerud’s third-quarter results indicate progress in its profitability recovery, particularly in Europe, while North America continues to provide a solid contribution. Higher sales volumes, pricing actions and cost reductions helped offset inflationary pressures and maintenance costs.

However, the substantial decline in adjusted EBITDA over the first nine months highlights the challenges that remain. The company’s near-term priorities include maintaining pricing discipline, delivering the planned cost savings, improving operational efficiency and converting investments in North America into stronger production performance.

With stable market conditions expected in Q4 and a lower anticipated maintenance burden, Billerud is looking to sustain the recovery in quarterly profitability while continuing to manage costs and capital expenditure.

Source: Billerud AB, Interim Report January–September 2026, published October 22, 2026. The interim financial information was reviewed by KPMG; the review report states that nothing came to the auditor’s attention to suggest that the report was not prepared, in all material respects, in accordance with the applicable reporting requirements.