Swedish pulp and paper manufacturer Billerud has posted 82% year-on-year growth in reported net sales, to SEK 11.8 billion (€1.08 billion), in the third quarter of its financial year.
Excluding currency effects, net sales increased by 75%, mainly driven by the acquisition of Verso, completed on 31 March 2022.
The company changed its name to Billerud from BillerudKorsnäs after the acquisition of Verso.
According to Christoph Michalski, president and CEO of Billerud, the move was "a natural step" in its strategic journey to simplify and integrate all its international businesses under one name.
Billerud North America, formerly known as Verso, generated net sales of SEK 3.7 billion (€340 million) and sales volumes of 254 kilotonnes in the third quarter.
Total sales volumes for the group amounted to 945 kilotonnes.
Quarterly Highlights
On an organic and currency neutral basis, net sales grew by 20% compared to last year, with broad-based growth across categories.
Adjusted EBITDA increased to SEK 2.2 billion (€200 million), again due to the acquisition of Verso, higher prices across categories and positive currency effects.
Billerud North America generated an EBITDA of SEK 515 million (€47.1 million) during the quarter.
The third quarter performance saw a positive impact from an insurance compensation of SEK 75 million (€6.9 million) for damages that occurred in the Gävle mill in 2019.
However, the company was negatively affected by maintenance stops with a total estimated earnings impact of around SEK 890 million (€81.4 million), as well as higher costs for fibres, chemicals, energy and logistics.
Michalski commented, "Considering that the third quarter was unusually heavy on maintenance, the underlying EBITDA was all-time high. We were able to more than offset higher costs in all input categories through continued focus on price management, driving profitable mix and continued delivery of our cost and efficiency programme.
"Despite maintenance and upgrade shutdowns at four mills in the quarter, we delivered an EBITDA margin of 19%. The cash flow generation was outstanding, and our leverage has been reduced to an all-time low net debt to EBITDA ratio of 0.7."
Pricing
The Swedish company noted that pulpwood prices increased significantly in Europe, driven by lower availability of hardwood since imports stopped from Russia.
The volatile and high energy prices in Europe are driving higher costs for chemicals, while logistics costs are expected to flatten out or decline, the company added.
The cost inflation for pulpwood and other inputs was moderate in North America and driven by fuel and general price increases.
Outlook
Billerud expects 'solid' demand for its products to continue in the fourth quarter, despite the macro-economic uncertainty.
In Europe, an accelerated cost inflation is expected with higher costs for wood and chemicals, while in North America, the increase in cost is expected to remain flat.
© 2022 European Supermarket Magazine – your source for the latest packaging news. Article by Dayeeta Das. Click subscribe to sign up to ESM: European Supermarket Magazine.
