Billerud (BILL) Q1 2025 earnings summary

Executive summary

• Q1 2025 began with 7% net sales growth to SEK 11,101 million, driven by strong volume gains in North America and improved pricing in Europe, resulting in significant profitability and cash flow improvements despite FX headwinds.

• EBITDA increased 19% year-over-year to SEK 1,388 million, with EBIT up 42% and a two percentage point margin uplift; North America achieved a 21% EBITDA margin and record sales volumes.

• Europe improved to a 15% EBITDA margin, with profitability driven by higher prices and cost discipline, offsetting input cost inflation.

• Cash conversion improved to 41% for Q1, with operating cash flow before capex at SEK 573 million and net profit up 33% year-over-year to SEK 415 million.

• First commercial sale of US-produced containerboard (Tribute® coated liner) achieved, supporting the strategic shift toward packaging materials and ongoing customer trials.

Financial highlights

• Net sales grew 7% year-over-year to SEK 11,101 million, supported by price increases in Europe and volume growth in North America.

• Adjusted EBITDA margin improved to 13% (up from 11%), and EBIT margin reached 6% (up from 4%).

• North America saw 14% volume growth and highest sales volume in over two years; Europe volumes down 6% but pricing up 9%.

• Return on capital employed (ROCE) improved to 7% from 1% year-over-year.

• SEK 160 million negative FX impact in Q1 due to revaluation of receivables/payables, considered a one-off.

Outlook and guidance

• Q2 expected to see stable market conditions, solid order books, and unchanged demand trends in North America, with normal conditions in Europe except for continued weakness in coated liner and cartonboard.

• Price increases of up to 5% on coated free sheet reels in North America and $80/ton on pulp to impact Q2; input cost tailwinds of SEK 30 million expected, mainly from lower energy prices in Europe.

• Q2 will have heavy maintenance shutdowns in Europe, with a cost impact of up to SEK 380 million.

• FX expected to have a net positive impact of SEK 100 million in Q2, subject to end-of-quarter rates.

• Capex guidance unchanged at SEK 3.5 billion for 2025.