Billerud Ab · OMXSTO:BILL
Billerud Ab — BillerudKorsnäs — Q3 2023 Earnings Presentation
19 slides from Billerud Ab's earnings presentation, Oct 28, 2023
Slide 1: Improved profit and cash delivery in continued weak market conditions
Improved profit and cash delivery in continued weak market conditions Interim report January-September 2023 Ivar Vatne Andrei Krés Acting CEO Acting CFO 25th of October 2023
Slide 2: Performance and key highlights Q3 2023
INTERIM REPORT JANUARY-SEPTEMBER 2023 Performance and key highlights Q3 2023 Higher sales volumes compared to last quarter, offset Change vs Q3 by negative mix and price deterioration SEKm Q3-23 2022 Net sales 10,210 -14% Sequentially lower input costs and lower than normalized fixed cost Adjusted E
Slide 3: Net sales declining in the wake of lower pricing, volume and negative mix
INTERIM REPORT JANUARY-SEPTEMBER 2023 Q3’23: Net sales declining in the wake of lower pricing & volume and negative mix impact Net sales, SEKm -14% +3% -6% 11 814 -11% 10 210
Slide 4: Efficiency enhancement program delivery a highlight in weak market conditions
INTERIM REPORT JANUARY-SEPTEMBER 2023 Q3’23: Efficiency enhancement program delivery a highlight in weak market conditions Adj EBITDA, SEKm -47% Adj. EBITDA 19% 6% 11%
Slide 5: General weak market conditions during the quarter, unchanged expected for Q4
INTERIM REPORT JANUARY-SEPTEMBER 2023 General weak market conditions during the quarter Unchanged conditions expected for Q4 Sales split, %1 Food & Drink Printing & Publishing Papers Consumer & Luxury Industrial LPB (8.6bn) 100% Cartonboard (3.5bn) 25% 75% Containerboard (5.5bn) 80% 10% 10% Kraft &
Slide 6: Europe
INTERIM REPORT JANUARY-SEPTEMBER 2023 REGION Europe
Slide 7: Region Europe
INTERIM REPORT JANUARY-SEPTEMBER 2023 • Sequentially improving sales volumes in all categories Region • Continued weak conditions for all categories except LPB, which is more normalized Europe • Broad-based price decline with the exception for LPB • Lower fixed cost • Sequential decrease in total in
Slide 8: Total input costs declined. Fiber costs peaking in the quarter
INTERIM REPORT JANUARY-SEPTEMBER 2023 Total input costs declined. Fiber costs peaking in the quarter. Further cost relief expected in Q4 Higher cost Lower cost Lower Stable for fiber for chemicals energy costs logistics costs Fiber prices peaking during Price decline on the 67% of electricity New ov
Slide 9: North America
INTERIM REPORT JANUARY-SEPTEMBER 2023 REGION North America
Slide 10: Region North America
INTERIM REPORT JANUARY-SEPTEMBER 2023 Region • Sequentially improving sales volumes in a continued weak market North • Stable pricing for graphic paper, lower pricing in specialty and pulp America • • Mills operating at <60% of capacity Negative mix effect from higher pulp sales SEKm Q3-23 Q3-22 Cha
Slide 11: Continued stability in North American cost base
INTERIM REPORT JANUARY-SEPTEMBER 2023 Continued stability in North American cost base Expected to continue into Q4 Lower Lower cost Lower energy Higher cost for for chemicals costs logistics fiber costs 78% of natural Higher costs on gas consumption the back of hedged for 2023 higher volumes
Slide 12: Delivering excellent cash generation through strong focus on working capital
INTERIM REPORT JANUARY-SEPTEMBER 2023 Delivering excellent cash generation through strong focus on working capital SEKm Q3-23 Q3-22 Strong operating cash flow conversion at 93% Profit before tax 372 1,743 Net Debt / EBITDA of 1.4 – well below target of <2.5 Adjustments for non-cash items 374 306 Tax
Slide 13: Further actions to improve efficiency, profitability and long-term competitiveness
INTERIM REPORT JANUARY-SEPTEMBER 2023 Further actions to improve efficiency, profitability and long-term competitiveness Reducing global workforce with up to 350 positions Staff reductions within all functions in Region Europe, Region North America and Group functions Union involvement / negotiation
Slide 14: Efficiency enhancement program: accelerated delivery in Q3
INTERIM REPORT JANUARY-SEPTEMBER 2023 Efficiency enhancement program: Accelerated delivery in Q3 and on-track for 2023 ambition. Now preparing for 2024 Accelerated Progress in 2023 Ambition to deliver additional 700M • Impact of 175M SEK in Q3 SEK in 2024 (vs 2023) • 400M SEK impact year to date (Q1
Slide 15: Frövi recovery boiler completed on time and on budget
INTERIM REPORT JANUARY-SEPTEMBER 2023 Frövi recovery boiler completed – on time and on budget The new fossil-free boiler will enable New recovery boiler has been increased energy efficiency and put into operation improved environmental performance Excellent project management – the Capacity will all
Slide 16: Decision on North American transformation investment program is delayed
INTERIM REPORT JANUARY-SEPTEMBER 2023 Decision on our North American transformation investment program is delayed The transformation in US Economic conditions have remains Billerud’s most changed dramatically over the important growth opportunity past two years The business fundamentals and strategi
Slide 17: Continued execution on strategy focusing on packaging materials
INTERIM REPORT JANUARY-SEPTEMBER 2023 Continued execution on strategy by focusing on packaging materials. Additional non-core assets have been divested Divestment of ownership in Kezzler Divestment of Managed Packaging in Q3 AS (venture) in Q3 • Result effect of SEK 23 million and • Marginal impact
Slide 18: Outlook for Q4 2023
INTERIM REPORT JANUARY-SEPTEMBER 2023 Outlook for Q4 2023 Customer destocking largely completed, however continued weak demand driven by subdued macroeconomic environment Negative mix for most categories and lower sales prices for sack and kraft paper, partly offset by lower input costs Further step
Slide 19: INTERIM REPORT JANUARY-SEPTEMBER 2023
19 INTERIM REPORT JANUARY-SEPTEMBER 2023