Billerud Ab · OMXSTO:BILL
Billerud Ab — BillerudKorsnäs — Q2 2023 Earnings Presentation
19 slides from Billerud Ab's earnings presentation, Jul 20, 2023
Slide 1: Interim report January-June 2023: Navigating challenging market conditions
Interim report January-June 2023 Navigating challenging market conditions 20th of July 2023 Christoph Michalski, CEO & Ivar Vatne, CFO
Slide 2: Performance and key highlights Q2 2023
Performance and key highlights Q2 2023 Low volumes due to continued customer inventory Change vs Q2 destocking and soft end market demand SEKm Q2-23 2022 Stable sales prices in North America, price deterioration Net sales 9,953 -13% in Europe in some categories from record 2022 levels Adjusted E
Slide 3: Q2'23: Unprecedented soft volume sends net sales into decline
Q2’23: Unprecedented soft volume sends net sales into decline Net sales, SEKm -13% +5% +1% -19% 11 408 9 953 General
Slide 4: Q2'23: Volume loss and cost inflation wipe out most of the profitability
Q2’23: Volume loss and cost inflation wipe out most of the profitability. Only partly off-set by pricing, efficiency enhancement program and FX Adj EBITDA, SEKm -92% -340 -58 Adj. EBITDA 20% 2% 2% General
Slide 5: Highly challenging market conditions during the quarter
Highly challenging market conditions during the quarter Not expecting improved conditions going into Q3 Food Printing & Consumer Industrial & Drink Publishing & Luxury Papers Sales split, %1 LPB (8.6bn) 100% Cartonboard (3.5bn) 25% 75% Containerboard (5.5bn) 80% 10% 10% Kraft & Speciality Paper (5.2
Slide 6: New reporting structure from Q2'23 to capture our operating model
New reporting structure from Q2’ 23 to capture our operating model Region Europe Region North America Solutions & Other1 Net sales EBITDA Net sales EBITDA Net sales EBITDA 63% 67% 30% 42% 7% -10% 6 production units in Sweden 2 production units in USA Includes2 1 production unit in Finland 1 sheeting
Slide 7: Region Europe
Region Europe General
Slide 8: Europe
Region Europe Share of net sales 65% Q2 2023 SEKm Q2-23 Q2-22 Change Highly challenging quarter Net sales 6,495 6,766 -4% Soft demand – market curtailment in most mills Liquid packaging board 2,242 2,108 +6% Containerboard 1,227 1,275 -4% Massive input cost inflation – first and foremost on Kr
Slide 9: Decreasing input costs in Europe with exception being fiber
Decreasing input costs in Europe with exception being fiber Expects further input cost help going into Q3 Higher Lower Lower Stable cost for cost for energy logistics fiber chemicals cost cost Increased pricelists in Price decline on the 67% of electricity New overseas freight Sweden driving fiber b
Slide 10: Region North America
Region North America General
Slide 11: North America
Region North America Share of net sales 27% Q2 2023 Highly challenging quarter SEKm Q2-23 Q2-22 Change Very soft volume – mills operating at 50-60% of Net sales 2,655 3,738 -29% capacity Graphic paper 1,914 2,823 -32% Kraft and specialty paper 380 615 -38% Escanaba restored production after Bl
Slide 12: Stable cost situation in North America during Q2
Stable cost situation in North America during Q2 Expects relatively flat situation going into Q3 Stable Stable Slightly lower Slightly lower cost for cost for energy logistics fiber chemicals cost cost 78% of natural gas Lower costs on the consumption hedged back of lower volumes for 2023 General
Slide 13: Inventory reduction and focus on working capital helped operating cash performance
Inventory reduction and focus on working capital helped operating cash performance in the quarter SEK m Q2-23 Q2-22 Strong cash flow conversion through continued Profit before tax -558 1,804 diligent focus on inventory reduction Adjustments for non-cash items 595 312 Dividend pay-out of SEK 1.9
Slide 14: Profit and efficiency enhancement program on track to meet 2023 raised ambition
Profit and efficiency enhancement program on track to meet 2023 raised ambition Positive program effect and mobilization seen across organization Program delivery accelerated to improve profitability Raised ambition from 400M to 600M SEK EBITDA impact in 2023 225M SEK EBITDA impact during first 6 mo
Slide 15: Blastomycosis: Escanaba back to normal production
Blastomycosis: Escanaba back to normal production Timeline ▪ 3rd of March first cases of Blastomycosis were recorded in Escanaba mill ▪ Company engaged with local, state and federal health experts and government agencies and have implemented the recommendations ▪ 14th of April mill temporarily closu
Slide 16: Good progress on all critical capital projects
Good progress on all critical capital projects Frövi recovery boiler will start up ahead of time and marginally under budget ▪ Biofuel recovery boiler enters operation in September, four months ahead of schedule ▪ Marginal capex savings despite increase scope for fossil-free operation ▪ Excellent pr
Slide 17: Focus on core and packaging material as per strategy
Focus on core and packaging material as per strategy – Divestments of non-core assets during the quarter Divestment of Managed Packaging announced early July ▪ Closing expected during Q3 ▪ Managed Packaging net sales of SEK 770m and EBITDA margin of ~5%* ▪ Result effect of transaction approx. SEK 20
Slide 18: Outlook for Q3 2023
Outlook for Q3 2023 Weak demand expected to continue Continued production curtailments Negative mix impact and some price reductions, only partly offset by lower input costs Accelerated delivery of the efficiency enhancement program
Slide 19: General
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