Billerud (BILL) investor relations material

Executive summary

• Q1 2026 saw 9% sequential sales volume growth, but profitability declined, especially in Europe due to price pressure, currency headwinds, and loss of emission rights.

• North America delivered strong results with a 16% EBITDA margin, stable demand, and solid Midwest manufacturing base, despite adverse weather and higher costs.

• Europe faced incremental price pressure, currency headwinds, and lower profitability, but saw a sequential volume uplift of 9–11%, especially in liquid packaging board.

• Cost-saving initiatives are ahead of plan, delivering SEK 100 million in Q1, with all planned staff reductions completed and a raised 2026 target of SEK 550 million.

• Cash conversion improved to 55% in Q1, with a full-year target of 80%+.

Financial highlights

• Net sales were SEK 9,825 million, up 6% sequentially but down 11% year-over-year, mainly due to lower prices in Europe.

• Adjusted EBITDA was SEK 525 million, down 62% year-over-year, with a margin of 5% (down from 13%).

• Group profit declined significantly, with an operating loss of SEK -229 million and EPS at SEK -0.88, driven by Europe’s lower pricing, FX, emission rights loss, and higher maintenance shutdowns.

• Volume was marginally down 1% year-over-year in both regions.

• Net debt remained stable at around SEK 6.2 billion, with leverage well below target.

Outlook and guidance

• Q2 is expected to show profit recovery, especially in Europe, due to pulpwood price declines and further cost savings, though maintenance shutdown costs will be higher.

• Announced price increases in both regions should yield a 1–2% positive price/mix effect in Q2, with further impact in Q3.

• Sequential cost relief of SEK 150 million expected in Europe for Q2; North America input costs to remain flat.

• Full-year CapEx guidance unchanged: SEK 2 billion base, SEK 600 million strategic, totaling SEK 2.6 billion for 2026.