Billerud's net sales for the Q3 2023 declined by 14% to SEK 10,210 million ($935 million), compared to SEK 11,814 million ($1 billion) in the Q3 2022. The organic and currency-neutral net sales declined by 16% due to negative price and mix changes and lower sales volumes. The Group’s total sales volumes were 890 ktons, negatively impacted by low demand and production curtailments in mainly North America.
Adjusted EBITDA amounted to SEK 1,167 million ($107 million), corresponding to an adjusted EBITDA margin of 11%. The lower result was due to lower prices, negative mix and volume changes and higher input costs, which were partially offset by lower fixed costs, reduced maintenance impact and efficiency improvements. The result was positively impacted by a reduced provision for the short-term incentive program.
Ivar Vatne, Acting President and CEO, said: “We delivered a meaningfully improved result in the Q3 compared with the previous quarter. Profitability and cash generation were significantly up, and encouragingly, we see progress in both our European and North American regions. The adjusted EBITDA margin for the quarter was 11% with excellent cash conversion. The improved performance was mainly due to volume pick-up in both regions, lower than normalized fixed cost level, accelerated delivery of our efficiency enhancement program and strong focus to keep our working capital low. In particular, we are happy to see the mobilization we have gained throughout the organization related to our efficiency enhancement program, and we are on track to deliver our SEK 600 million ($55 million) target for 2023.”
Outlook
For the Q4, Billerud expects market conditions to remain weak for most product categories. Demand is expected to be weak driven by the subdued macroeconomic environment, although the inventory destocking will be largely completed. Negative mix is expected for most categories and sales prices are expected to deteriorate for sack and kraft papers. Input costs are in total expected to decrease, mainly driven by reduced costs for chemicals and pulpwood in Europe.
Billerud is one of the leading manufacturers of packaging paper made from virgin fibers.
