Sequential volume uplift with challenged profitability
Key highlights
• Sequential sales volume growth of 9%
• EBITDA margin declined to 5%, mainly due to weak profitability in Region Europe
• Another strong quarter for Region North America, despite difficult weather conditions
• Cash conversion of 55%
• Accelerated cost-saving program delivery, positive Q1 impact of SEK 100 million
Quarterly data
• Net sales decreased by 11% to SEK 9,825 million (11,101)
• Adjusted EBITDA* SEK 525 million (1,388)
• Adjusted EBITDA margin* 5% (13)
• Operating profit/loss SEK -229 million (638) including items impacting comparability of SEK -47 million (-)
• Net profit/loss SEK -219 million (415)
• Earnings per share SEK -0.88 (1.67)
Outlook for Q2
• Benefits from lower pulpwood prices and cost-saving program but challenging market conditions in Europe
• Solid market conditions in North America
• Broad-based price increases in both regions to mitigate cost inflation for chemicals and logistics
• Sequentially higher annual maintenance shutdown costs
Comments by the CEO
The first quarter result of 2026 was once again characterized by different market realities in our two regions. Continued strong performance in North America while Region Europe was as expected weak. Encouragingly, we achieved significant sequential volume growth across both regions but profitability was challenging due to price pressure and cost headwinds. Geopolitical events continue to create unpredictability and uncertainty. We have managed the impact from the Middle East conflict well and have not experienced any production or delivery disturbances. Our cost-saving program is ahead of plan, and all planned staff reductions have now been completed. The cash conversion for the first quarter was solid and improved versus the same period last year.
Region North America had another solid quarter with sequential volume uplift across all categories. Pulp prices were up while pricing remained stable for other products. Profitability reached 16% EBITDA margin. Unusually challenging weather conditions during the quarter led to unplanned production downtime, higher energy and logistics costs. Navigating through weather challenges, we once again proved our value proposition by being a local partner with predictable deliveries to our customers. We continued to make progress on our packaging materials evolution journey and reached all-time high sales.
As expected, Region Europe's EBITDA margin was weak (2%) with pricing pressure, currency headwind, loss of emission rights and higher maintenance cost. Our sales volumes increased significantly (+11% versus Q4) across most categories. Liquid packaging board showed particularly strong performance with a net sales growth of 17%, partly due to better-than-expected pull from Asia but also due to low Q4 deliveries. The volume increase should also be seen in the light of supply chain uncertainties linked to the Middle East conflict and inventory adjustment ahead of anticipated price increases from Q2. Despite the volume uplift, we don't see clear evidence of a consumer-driven market recovery so far in 2026.
It is obvious that the European paper and packaging sector is fighting deep structural imbalances. Overcapacity is now the new normal versus being a short-term cyclical phenomena. Further consolidation and capacity rationalization seem inevitable within our sector to restore a healthier balance between supply and demand and lift profitability to a more sustainable level in our capital-intensive sector.
Our priorities for 2026 remain. We stay firm to our Way Forward strategy and focus on items we can control. We have a strong business in North America that we continue to build on with our Evolution program to shift our portfolio towards packaging materials. We will in 2026 upgrade our machines at Quinnesec and Escanaba to further enable board production. As a domestic producer, we have an excellent position in North America to offer our customer base high-performance products with short lead times, and we see further potential to strengthen our position.
In Europe, where the market sentiment is more challenging, we take decisive actions to improve cost competitiveness by reducing both variable and fixed costs while remaining a relevant and value-adding partner for our customers. We stay disciplined about working capital and maintain a prudent capex plan. We target to deliver fixed cost savings of around MSEK 150 in the second quarter and in total MSEK 550 for the full year of 2026, ahead of our ingoing plan.
For the second quarter, we expect to restore a strong underlying profitability level (excluding maintenance shutdown impact) in North America. Our order books remain solid, and we have recently announced price increases to mitigate variable cost inflation. For Region Europe, we expect further cost reliefs from lower Nordic pulpwood prices and our cost-saving program. We have announced several rounds of broad-based price increases to mitigate cost inflation on logistics and chemicals in the wake of the conflict in the Middle East.
Our balance sheet remains healthy, and our financing position strengthened in the first quarter with a successful issue of new long-term financing despite geopolitical uncertainty. Subject to AGM approval, dividend of approximately MSEK 500 or SEK 2:00 per share will be distributed to our shareholders in the second quarter.
Ivar Vatne
President and CEO
First quarter
Sales and results
Net sales for the first quarter decreased by 11% to SEK 9,825 million (11,101), negatively impacted by currency changes. The currency-neutral net sales declined by 6% compared with the first quarter last year due to negative price changes and lower sales volumes. The sales volumes totaled 899 ktons (912). Production was curtailed in both regions during the first quarter.
Adjusted EBITDA amounted to SEK 525 million (1,388), corresponding to a margin of 5% (13). The deteriorated result was mainly due to lower sales prices, higher costs for annual maintenance shutdowns, the loss of free emission allowances, a negative impact from inventory revaluation and lower fixed cost absorption in production.
Annual maintenance shutdown was carried out at Skärblacka during the first quarter with a cost impact of SEK 184 million (40).
The net result from emission rights had an impact of SEK -12 (110) million.
Items classified as affecting comparability in the first quarter, reported under Other, amounted to SEK -47 million (-) and were related to the exit from the joint venture together with Viken Skog AS.
Market development and outlook
In the first quarter of 2026, market conditions were weak for Region Europe with price declines in all product categories. The oversupply of some of the board products that Billerud produces in this region remained. In North America, market conditions were normal. Prices for graphic and label paper were unchanged, while the market price for pulp increased.
For the second quarter of 2026, Billerud expects challenging market conditions with subdued demand in Europe, and solid market conditions in North America. Price increases will be implemented for most products in both regions to mitigate increased logistics and chemical costs. Region Europe is expected to benefit from lower pulpwood costs and the cost-saving program. Costs for annual maintenance stops will increase compared with the previous quarter.
Events in the quarter
On 29 January, Billerud decided to withdraw from the joint venture formed in 2022 together with Viken Skog AS to establish bleached chemi-thermomechanical pulp (BCTMP) production at Viken Skog's facility in Follum, Norway. The reason for the decision is the lengthy environmental permit process and changed market conditions. The exit from the joint venture had a non-cash result impact of SEK -47 million in the first quarter of 2026, which is classified as an item affecting comparability.
A new global function for Innovation, Product & Application Development (IPAD) was established to strengthen Billerud's competitiveness and promote innovation synergies between the regions. The Global IPAD function is headed by Anna Jonhed, Vice President Global Innovation.
Billerud continued to strengthen its position as a leading producer of MG paper and installed a new Yankee cylinder on paper machine PM8 in the Skärblacka mill during the first quarter. This investment will ensure stable and sustainable production and is aligned with our strategic focus on quality, operational reliability and increased competitiveness in high-quality kraft papers and medical applications.
Events after the quarter
On 7 April, Billerud's nomination committee announced their proposal to the Annual General Meeting 2026 that Magnus Nicolin shall be elected new board chairman. Magnus Nicolin has been a member of Billerud's board since 2022 and currently serves as chairman of the boards in Munters AB and Hexatronic Group AB and as board member of FAM AB. Jan Svensson, who has been chairman of Billerud's board since 2021, will leave the board on 26 May, 2026.
The nomination committee also proposes that Bernd Eikens shall be elected as new member of the board. Bernd Eikens holds the position as Group CEO of Meyer Shipyards and is advisory board member of Koehler Paper AG, board member of Valmet Oy as well as deputy chairman of the supervisory board of Johann Bunte Bauunternehmung SE. His prior experience includes several senior executive positions in UPM-Kymmene Oyj.
The nomination committee further proposes re-election of the board members Regi Aalstad, Andreas Blaschke, Florian Heiserer, Gunilla Saltin and Victoria Van Camp.
* 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 14-16.
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 CET on 28 April 2026.
