Continued strong performance in the US while addressing weak market in Europe
Key highlights
• Currency-neutral net sales growth in North America
• Lower sales volumes in Europe
• Sequentially improved adjusted EBITDA margin to 11%
• Excellent cash conversion of 139%
• Launched cost saving program targeting SEK 800 million (annualized)
Quarterly data
• Net sales decreased by 8% to SEK 9,905 million (10,798)
• Adjusted EBITDA* SEK 1,058 million (1,555)
• Adjusted EBITDA margin* 11% (14)
• Operating profit SEK 9 million (851) including items impacting comparability of SEK -350 million (-)
• Net profit SEK -63 million (565)
• Earnings per share SEK -0.25 (2.27)
Outlook for Q4
• Continued strong performance in North America
• Weak market conditions in Europe
• Lower pulpwood costs in Europe
Comments by the CEO
We continue to meet completely different market realities in our two regions. Another strong performance in Region North America, while the market conditions are clearly more challenging for Region Europe. Despite this, our Q3 result was sequentially stronger, with adjusted EBITDA of 11%.
In North America, we continue to operate under favorable market dynamics, and we have seen further customer interest since the US import tariffs came into effect in August. Local production in the US is a valuable asset, and we are well positioned as a market leader in an attractive Midwest region. Our value proposition is strong with high-quality products, delivered with short and predictable lead times to a vast customer base. Currency-neutral net sales grew 4% and the EBITDA margin ended at 16%.
In contrast, in Europe, the sector is facing challenging conditions with muted packaging consumption, cost inflation and currency headwind. Moreover, structural production overcapacity within board weighs on the European market, driven by recent capacity expansions coming online and reversals of trade flows following the implementation of the US import tariffs. Net sales for Region Europe declined versus last year in all product categories but market pulp. Production was curtailed to match the level of demand, particularly at our board mills. Maintenance stops at Gävle and Karlsborg impacted costs in the quarter. The region's EBITDA margin in the quarter was 10%.
To address the adverse conditions, we maintain our relentless focus on items that we can control. We are taking further decisive actions to both improve our cost-competitiveness and leverage our leading position of high-performance packaging materials. Our recently announced cost saving program is targeting SEK 800 million of yearly impact, that will have a noticeable positive contribution from Q1 2026 and onwards. To successfully deliver our program, we will have to change our ways of working and target simplification and more automation. Additionally, we are doubling down on innovation and product development. As an example, two new cartonboard grades were launched during the quarter, targeting food and beverage applications where our products provide higher value to customers compared with competition.
Our discipline to reduce working capital and produce strong cash generation is paying off. Cash conversion in the quarter was 139% and we are well on track to deliver our full-year target of >80% cash conversion and maintain our strong balance sheet. While streamlining our operations, we are also further scrutinizing the needs and timing of our investments across the company.
The strategic shift of our portfolio in North America towards packaging materials to improve our product mix and optionality is progressing well. Customers' interest and our order intake for our new products Tribute® and Voyager is increasing and we have seen acceleration in our deliveries over the past months. We have already delivered US-made white kraftliner and cartonboard to both new and established customers. We continue to see great opportunities ahead in growing our presence within packaging materials in the US supplied by our mills in the Upper Michigan region.
Looking ahead and into Q4, we expect continued solid market conditions for our operations in North America. In contrast, we expect the adverse market conditions in Europe to continue to impact our sales in Q4, particularly within board categories. The future for sustainable and recyclable fibre-based packaging materials is still bright and is expected to outperform GDP growth rates long term, but a prolonged European downturn in combination with oversupply, will take time to rebalance.
The trend of decreasing pulpwood prices in the Nordics continues, and prices have now fallen more than double digit since the peak levels in Q2 2025. We expect that prices will continue to decrease on the back of good wood availability due to low operating rates in the industry and a weak biofuel market. We expect a sizable cost relief for 2026 for our Region Europe.
For the remainder of 2025 and into 2026 we stay firm on our strategic choices: continue our evolution journey towards packaging materials in the US and strengthen our performance in Europe. By staying focused, agile and accelerate progress in areas we can control, Billerud will be more competitive and well positioned when the market recovers.
Ivar Vatne
President and CEO
Third quarter
Sales and results
Net sales for the third quarter declined by 8% to SEK 9,905 million (10,798), negatively impacted by currency changes. The currency-neutral net sales declined by 4% compared with the third quarter last year due to lower sales volumes, unfavorable mix changes and decreased prices in some product categories. The Group's total sales volumes totaled 870 ktons (898). Production was curtailed in both regions to adjust to current demand situation.
Adjusted EBITDA amounted to SEK 1,058 million (1,555), corresponding to a margin of 11% (14). The negative change was mainly due to lower net sales as well as to higher input costs and fixed costs compared to last year. The result decreased in both regions, while the adjusted EBITDA in the business segment Other improved. The total cost impact of maintenance stops in Gävle, Karlsborg and Escanaba in the period was around SEK 360 million (348).
The net result from emission rights had a positive impact of SEK 137 million in the third quarter of 2025 (113). Billerud is not expected to receive any emission rights from 2026 and onwards.
Items classified as affecting comparability in the third quarter, reported under Other, amounted to SEK -350 million (-) and were attributed to a provision for restructuring costs related to the cost saving program announced in September 2025.
Market development and outlook
In the third quarter of 2025, market conditions were weak for most of Billerud's materials produced in Region Europe. Demand for packaging materials was subdued and there was overcapacity within board categories. Market conditions for Billerud's graphic and label papers in North America were solid in the third quarter, while the market for pulp weakened and pulp prices declined.
For the fourth quarter, Billerud expects continued weak market conditions in Europe with price pressure in most product categories. Demand is expected to be weak for the board categories, while the paper products are expected to hold up better. In North America, Billerud expects a continued strong performance. The market conditions for graphic paper and label paper are solid, while the demand for market pulp is weak. From October, price increases on graphic paper will be implemented. Input costs are expected to be unchanged in both regions. Lower pulpwood costs in Europe are expected to be offset by seasonally higher energy costs.
Events in the quarter
On 18 September, Billerud initiated a cost saving program targeting annualized savings of SEK 800 million. The measures focus on reducing fixed costs through strict cost prioritization, streamlined ways of working and personnel reductions across all functions and sites in Region Europe and Group functions globally. It involves the potential reduction of up to 650 positions. The cost saving program is expected to have a noticeable positive impact from the first quarter 2026, and to reach full effect at the end of 2026. For 2026, savings of SEK 500 million are targeted. Restructuring costs of SEK 350 million related to the cost saving program were charged to the income statement in the third quarter.
Billerud introduced two new cartonboard grades in response to the customer demand for recyclable packaging that performs under pressure. CrownBoard Light is a lightweight cartonboard with inherent wet-strength properties which have been achieved without the use of wet-strength additives. It is ideal for packaging solutions that need to keep their strength and appeal in cold and moist environments. CrownBoard Carry delivers top-tier strength and tear resistance, which makes it ideal for sturdy packaging like beverage multipacks.
Significant progress was made during the third quarter in the project to rebuild the Escanaba woodyard as part of the Evolution program (see page 7). The modernization of the woodyard at Escanaba includes new debarking technology and major enhancements to the conveyor systems. It will provide improved safety, enhanced chip quality for the manufacturing of paper and board, greater capacity and operational efficiency, and increased sustainability. This project was completed in October 2025.
Billerud decided to establish a global function for Innovation, Product & Application Development. This function will be led by Anna Jonhed, who will assume the role of Vice President Global Innovation on 1 March 2026.
On 6 August, Tor Lundqvist, who previously held several senior positions at Billerud over a period of 14 years, rejoined Billerud as SVP Operations Europe. Gert Larsson, SVP Operations & Deputy President Europe, left the company.
Ulrika Wedberg, EVP Sustainability & Public Affairs, left Billerud on 30 September. On 1 December, Sofia Hedevåg will take office as EVP Sustainability & Public Affairs. She has previously been SVP Sustainability at Gränges.
* For key figures and a reconciliation of alternative performance measures including adjusted EBITDA, adjusted operating profit, adjusted EBITDA margin, adjusted operating profit margin, adjusted ROCE and interest-bearing net debt/adjusted EBITDA, see pages 15-17.
For further information:
Andrei Krés, CFO, +46 8 553 335 72
Lena Schattauer, Director Investor Relations, +46 8 553 335 10
ir@billerud.com
This information constituted inside information prior to publication. This is information that Billerud AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 07.00 CEST on 23 October 2025.