Sequentially improved profitability and strong cash conversion
Key highlights
• Strong sales growth in North America, confirming our attractive market position
• EBITDA improvement in Europe, both sequentially and versus last year
• Executed decisive actions to strengthen profitability
• Cost-saving delivery according to plan
• Cash conversion of 97%
Quarterly data
• Net sales decreased by 4% to SEK 9,834 million (10,244)
• Adjusted EBITDA* SEK 661 million (912)
• Adjusted EBITDA margin* 7% (9)
• Operating profit/loss SEK -58 million (188)
• Net profit/loss SEK -64 million (55)
• Earnings per share SEK -0.26 (0.22)
Outlook for Q3
• Continued solid market conditions for Region North America
• Uncertain market strength, but slightly improved conditions for Region Europe
• Positive pricing impact in both regions
Comments by the CEO
As expected, our Q2 result was a clear improvement versus the first quarter. We have taken decisive actions on pricing, cost, and portfolio to address cost inflation and supply chain uncertainty caused by the conflict in the Middle East. The sequential profitability improvement shows that our disciplined focus on items we can control is yielding results, and I am proud of the team's ability to maneuver yet another geopolitical conflict while delivering on our customer commitments.
Region North America grew currency-neutral net sales by 11% compared with last year. Shipments in the quarter were the highest since the end of 2022, once again confirming our strong position in the US, where we can offer reliability and predictability from the attractive Midwest region. Pricing has more than offset cost inflation linked to higher oil prices. The biennial maintenance shutdown at Quinnesec impacted earnings negatively. Our journey to evolve towards packaging materials in North America is making steady progress and it gained further momentum during the quarter. Interest in our locally produced coated liner has been particularly strong, and we continue to qualify our products with both existing and new customers.
Profitability in Region Europe improved both sequentially and compared with the previous year, despite challenging market conditions. Excluding cost impact of annual maintenance shutdowns, Region Europe nearly doubled its EBITDA compared to the last two quarters. On a sequential basis, price increases, a positive sales mix and lower input costs more than offset lower sales volumes. Our cost-saving program is on track and delivered a sizable saving of SEK 150 million in the quarter. Over the past three years, we have reduced the number of permanent employees by 15% to strengthen our competitiveness, and we took the next step in early April by implementing a leaner organizational model across all our production units.
Our disciplined capital allocation and focus on working capital are also yielding results. We delivered a solid cash conversion of 97% in the quarter and have a clear target to convert at least 80% of our EBITDA into operating cash flow. This is a cornerstone of our healthy financial position and strong balance sheet.
We remain focused on items we can control: delivering cost savings and implementing pricing actions to offset inflation. We maintain a prudent investment approach, where we prioritize the execution of our strategy. Targeted machine upgrades at Escanaba are planned during the September shutdown to further enhance our production capabilities and strengthen our packaging materials offering.
Looking ahead to the third quarter, market fundamentals are still different between our two regions. Region North America remains supported by solid market conditions. For Region Europe, the underlying market strength is still soft, and we are yet to see credible evidence of a sustainable recovery. For Q3 we expect somewhat improved market conditions and our order books are strong. Additionally, we expect positive pricing impact in both regions with overall flat input cost development.
We continue to see market imbalances in Europe. Although Nordic pulpwood prices have decreased over the past year, they are still at historically high levels and have structurally altered the region's cost-competitiveness. Our sector's returns have been on unsustainable levels for some time. We are evaluating all opportunities to play an active role in addressing industry challenges.
I would like to thank our employees for their valuable contributions to continuous improvement and for standing firmly behind our commitment to delivering high-performance packaging materials. Together, we are strengthening our performance in Europe, while in North America we remain committed to our graphic paper business as we continue to evolve our portfolio towards packaging grades.
Ivar Vatne
President and CEO
Second quarter
Sales and results
Net sales for the second quarter decreased by 4% to SEK 9,834 million (10,244), negatively impacted by currency changes. The currency-neutral net sales declined by 2% compared with the same period last year, mainly due to lower sales prices and volumes in Region Europe, partly offset by higher sales in Region North America. Total sales volumes were in line with the same period last year and totaled 865 ktons (863).
Adjusted EBITDA amounted to SEK 661 million (912), corresponding to a margin of 7% (9). The decrease was mainly due to lower sales prices, the loss of free emission allowances and negative currency impact, partly offset by lower input costs and fixed-cost savings.
The net result from emission rights had an impact of SEK -16 million (120).
Scheduled maintenance shutdowns at Gruvön, Pietarsaari, Rockhammar and Quinnesec in the second quarter had a cost impact of SEK 442 million (381).
No items classified as affecting comparability impacted the result in the second quarter (-).
Market development and outlook
In the second quarter of 2026, market conditions remained challenging in Europe with muted demand and oversupply of board materials. Market conditions in North America were solid with normal demand. Billerud implemented price increases for its graphic, label, sack and kraft papers as well as for fluting and liner. The market price for pulp increased.
For the third quarter of 2026, market conditions in North America are expected to remain favorable. For Region Europe, the underlying market strength remains uncertain, but Billerud expects somewhat improved market conditions for the third quarter. Positive pricing impact in both regions is expected, while input costs are expected to remain broadly flat overall.
Events in the quarter
Billerud's 2026 Annual General Meeting (AGM) elected Magnus Nicolin as board chairman. Magnus Nicolin has been a member of Billerud's board since 2022 and also serves as chairman of the boards in Munters AB and Hexatronic Group AB and as board member of FAM AB. The AGM elected Bernd Eikens as a new board member. Bernd Eikens' experience includes several senior executive positions in UPM-Kymmene Oyj and he currently serves as Group CEO of Meyer Shipyards, advisory board member of Koehler Paper AG, board member of Valmet Oy and deputy chairman of the supervisory board of Johann Bunte Bauunternehmung SE. The AGM also re-elected Victoria Van Camp, Florian Heiserer, Magnus Nicolin, Andreas Blaschke, Regi Aalstad and Gunilla Saltin as board members. Jan Svensson, Billerud's board chairman since 2021, left the board.
The 2026 AGM also approved the board's dividend proposal. A total dividend of SEK 497 million was paid to shareholders on 2 June. Minutes from the AGM are available on Billerud's webpage.
The sack paper QuickFill® Plus Xcel received the silver award for innovation at the Eurosac congress. In QuickFill Plus Xcel, the unique combination of ultra-high porosity and exceptional strength is enabling faster filling and cleaner operations, even for demanding applications like low-carbon cement. The increased strength also reduces the risk of sack breakage. Lab tests show a potential increase in filling speed of 15% compared to conventional high-porosity papers.
Billerud's Tribute® product family, consisting of two white kraftliner grades produced in the US, continued to gain commercial traction in the second quarter. Sales volumes reached 7 ktons and were delivered to a growing number of customers. More than 20 customer production trials are planned, representing significant potential business opportunities.
Billerud received a license from the Swedish Financial Supervisory Authority to establish a reinsurance captive company for property risks. The company Billerud Försäkring AB is intended to be formed to enable increased flexibility in the insurance of risks related to property.
Events after the quarter
Andreas Mattsson, EVP Legal & Strategic Projects, will leave Billerud no later than 31 December 2026 for a position in another company. The recruitment of his replacement will begin immediately.
* For key figures and a reconciliation of alternative performance measures including adjusted EBITDA, adjusted operating profit/loss, 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 17 July 2026.
