Billerud Reports Q1 2026 Results: Volume Growth Achieved Amid Weak European Market; Cost Savings and Strategic Shift Underway

Billerud AB (publ) today announced its results for the first quarter of 2026, reflecting improved volumes but significantly lower profitability due to continued pricing pressure, cost inflation, and structural challenges in Europe.

Financial Performance Overview

For the first quarter of 2026:

• Net sales declined 11% to SEK 9,825 million

• Adjusted EBITDA decreased to SEK 525 million (from SEK 1,388 million)

• Adjusted EBITDA margin fell to 5% (from 13%)

• Operating result was SEK -229 million (vs SEK 638 million profit last year)

• Net result amounted to SEK -219 million

• Earnings per share was SEK -0.88

• Cash flow from operations totaled SEK 261 million

• Cash conversion improved to 55%

The decline in profitability was driven by lower sales prices, higher maintenance costs, loss of emission allowances, and continued cost inflation.

Operational Highlights

• Sales volumes increased sequentially by 9%, although overall demand remains uncertain

• Production was impacted by maintenance shutdowns, with a cost impact of approximately SEK 184 million

• No major operational disruptions from geopolitical events, including the Middle East conflict

Regional Performance

North America

• Strong performance with 16% EBITDA margin

• Stable pricing and favorable product mix

• Continued growth in packaging materials and customer trials

• Weather-related disruptions increased logistics and energy costs

Europe

• Weak performance with 2% EBITDA margin

• Pricing pressure across all product categories

• Ongoing overcapacity and structural imbalance in the market

• Higher costs from maintenance, emission changes, and currency effects

Management noted that European market conditions reflect a structural industry challenge rather than a short-term cycle, with consolidation likely required to restore profitability.

Strategic Initiatives

Cost-Saving Program

• Q1 impact: approximately SEK 100 million

• Expected 2026 impact: SEK 550 million

• Long-term target: SEK 800 million annual savings by 2027

• Workforce reductions have been completed

Evolution Program (North America)

• Continued investments to shift toward packaging materials production

• Total planned investment: approximately SEK 1.4 billion (2024–2027)

• Focus on containerboard and cartonboard capacity expansion

Portfolio Actions

• Exit from joint venture with Viken Skog due to regulatory delays and market conditions

• Ongoing focus on capital discipline and strategic alignment

Innovation & Organization

• Established new global Innovation, Product & Application Development (IPAD) function to strengthen competitiveness

Capital Allocation & Financial Position

• Operating cash flow after investments: SEK -127 million

• Interest-bearing net debt: SEK 6.2 billion

• Net debt / EBITDA: 1.9x

• 2026 capex plan: approximately SEK 2.6 billion

  • SEK 2.0 billion maintenance

  • SEK 0.6 billion strategic investments

The Board has proposed a dividend of SEK 2.00 per share (~SEK 500 million total), subject to AGM approval.

External Factors & Risks

• Continued cost inflation in logistics, chemicals, and energy

• Loss of free emission allowances, increasing regulatory costs

• Impact of geopolitical uncertainty, particularly in Europe

• Weak consumer demand with no clear recovery trend

• Evidence of inventory build-up rather than real demand growth

Outlook

For the second quarter of 2026:

• North America expected to maintain strong underlying profitability

• Europe expected to remain challenging, though benefiting from:

  • Lower pulpwood costs

  • Cost-saving initiatives

• Additional price increases planned to offset cost inflation

• Higher maintenance shutdown costs expected sequentially

Governance Updates

• Proposal to appoint Magnus Nicolin as new Chairman

• Current Chairman Jan Svensson to step down in May 2026

• Proposal to appoint new board member Bernd Eikens

Management Commentary

CEO Ivar Vatne commented:

“We achieved encouraging volume growth during the quarter, but profitability remains under pressure, particularly in Europe. We are taking decisive actions to improve cost competitiveness while continuing to invest in our strategic priorities, especially in North America.”