Q2 2026 Earnings Roundup: Packaging Resilience Counters Weakness Across Global Pulp and Paper Markets

The second-quarter 2026 earnings season has provided valuable insight into the health of the global pulp, paper, packaging and allied industries. Financial results released this week by Norske Skog, Duni Group, Essity, Billerud, Södra, ABB and Kemira reflect an industry that continues to navigate weak demand in traditional pulp and paper markets while benefiting from resilience in packaging, automation and value-added businesses.

Although macroeconomic uncertainty, higher operating costs and subdued European demand remain common challenges, companies are responding with strategic investments, portfolio optimization and disciplined cost management. Together, the results paint a picture of an industry undergoing structural transformation rather than experiencing a uniform recovery.

Norske Skog: Packaging Transformation Gains Momentum

Norske Skog reported one of the week's most encouraging performances, with its packaging paper business achieving positive EBITDA while record recycled containerboard deliveries underscored the success of its ongoing transition away from publication paper.

The company continues to face headwinds from declining publication paper demand and foreign exchange impacts, but its strategic investments in containerboard are beginning to generate tangible financial returns. Record delivery volumes demonstrate improving market acceptance of the company's packaging products and validate its diversification strategy.

The results suggest Norske Skog is steadily reducing its dependence on mature publication paper markets and positioning itself to benefit from long-term growth in sustainable packaging.

Duni Group: Logistics Challenges Overshadow Business Growth

Duni Group reported lower second-quarter profitability as its ongoing logistics transition disrupted deliveries and temporarily increased operating costs. Despite these short-term operational challenges, the company's food packaging business continued to grow, supported by steady demand from the foodservice sector.

The results indicate that the decline in earnings was driven primarily by execution-related issues rather than weakening customer demand. Once the logistics transition is completed, operational efficiencies are expected to improve.

The performance highlights how supply chain optimization projects, while often necessary for long-term competitiveness, can temporarily weigh on financial results before delivering expected benefits.

Essity: Mixed Tissue Performance Reflects Cost Pressures

Essity delivered mixed results during the quarter, with stronger performances from certain hygiene businesses offset by continued pressure within consumer tissue operations.

Higher input costs, competitive pricing and changing consumer purchasing behaviour continued to affect profitability in consumer tissue, prompting the company to maintain its strategic review of the business. Meanwhile, healthcare and professional hygiene segments continued to provide greater earnings stability.

The results reinforce an industry-wide trend where value-added hygiene products continue to outperform commoditized tissue grades, encouraging manufacturers to shift their product mix toward higher-margin categories.

Billerud: North American Operations Drive Sequential Improvement

Billerud reported improved sequential profitability despite continued weakness across European paper markets.

Growth from North American operations, supported by stronger demand and improved pricing, helped offset softer European market conditions. Cost control initiatives and improved operational efficiency further strengthened quarterly performance.

The company's geographically diversified business model continues to provide resilience during periods of uneven regional demand. While Europe remains challenging, North America is increasingly becoming an important growth engine for the company.

Billerud's results demonstrate how balanced regional exposure can reduce earnings volatility during difficult market cycles.

Södra: Weak Forest Products Markets Continue to Weigh on Results

Södra reported an operating loss for the second quarter as weak demand across pulp, timber and wood products continued to pressure earnings.

Management cited challenging market conditions throughout its major business segments, with limited signs of a broad recovery in European forest product markets. Although cost management initiatives remain in place, subdued demand continues to restrict profitability.

The results reflect the broader difficulties facing Nordic forest industries, where slow construction activity, cautious industrial production and weak pulp demand continue to impact financial performance.

ABB: Automation Business Continues to Deliver Growth

Unlike most fibre-based producers, ABB delivered another strong quarterly performance driven by its Electrification and Process Automation businesses.

Although demand from pulp and paper customers moderated compared to previous years, investments in automation, digitalization and energy-efficient technologies continued to support order intake and profitability.

The results demonstrate that manufacturers remain committed to improving operational efficiency even when delaying major capacity expansion projects. As mills focus on reducing energy consumption, increasing productivity and lowering operating costs, automation suppliers continue to benefit from long-term structural investment trends.

ABB's performance also highlights the growing importance of technology providers within the evolving pulp and paper value chain.

Kemira: Chemical Supplier Reflects Industry Headwinds

Kemira's first-half results mirrored the broader challenges affecting pulp and paper producers.

Weak demand from pulp customers, lower sales volumes and pricing pressure weighed on profitability despite relatively stable revenues. The company continued implementing restructuring measures and cost-saving initiatives to improve operational efficiency while maintaining investments in innovation and sustainable chemical solutions.

Although market conditions remain difficult, Kemira's diversified customer base and focus on specialty chemistry continue to provide resilience compared with suppliers more heavily dependent on commodity pulp markets.

The company's results also serve as an important indicator of underlying market conditions, as chemical demand often reflects production levels across the pulp and paper industry.

Industry Analysis: A Market Divided

Taken together, this week's earnings releases reveal an industry operating at two different speeds.

Packaging-related businesses continue to outperform, supported by structural demand for sustainable packaging, foodservice applications and containerboard. Companies that have diversified into higher-value products or expanded geographically are demonstrating greater resilience despite ongoing economic uncertainty.

Conversely, producers with greater exposure to commodity pulp, publication paper and European markets continue to face pricing pressure, weak demand and lower profitability. Rising costs for raw materials, logistics and energy remain significant challenges across the value chain.

Another notable trend is the continued investment in automation, digitalization and operational efficiency. Even as companies remain cautious about major capital expansion projects, investments that improve productivity and reduce operating costs remain strategic priorities.