July 27, 2026 - Billerud on July 17 reported sequentially improved profitability and strong cash conversion in the second quarter of 2026 compared to the first quarter.
Ivar Vatne, President and CEO of Billerud, commented, "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."
Vatne continued, "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."
Billerud is a world-leading company in high performance paper and packaging materials. The company serves customers in more than 100 countries with renewable and recyclable products made from fiber sourced from responsibly managed forests.
SOURCE: Billerud