27 Jan 2023, 9:30 CET

Comments by the CEO – solid result ends an outstanding 2022

Full-year performance 2022 has been excellent. Organic and currency neutral sales growth for the year was 16%. The EBITDA margin was 19% and earnings per share increased from SEK 7.2 to SEK 20.1. The Board of Directors proposes an approximately 75% increase of dividend to SEK 7.5 per share.


The fourth quarter result was supported by continued outstanding contribution from our newly acquired North American operations. For the Group, the organic and currency neutral sales growth ended at 14% with an EBITDA margin of 17%. However, the profitability level was affected by the soaring cost inflation for raw materials, in particular in Europe. Sales volumes in the quarter landed disappointingly low, mainly due to softer demand and inventory adjustments by some of our customers. In addition, we had several independent disruptions in our manufacturing which affected our operating rates in December.

Our North American operations continued to make a sizable profit and cash flow contribution in the fourth quarter. Earnings in North America were strengthened with input cost coming down and positive currency exchange effects. We maintained prices in Europe, but margins were diluted by the continued cost inflation.

After a period of strong market conditions with increasing prices and inventory-build at customers in the aftermath of the COVID-19 pandemic, our market conditions turned less favourable in the fourth quarter. The shift in market sentiment to slower demand was predominantly driven by customers’ temporary destocking and expectations of an economic slowdown.

Since the acquisition in the end of the first quarter, Verso Corporation has been successfully integrated. We have changed our company name to the internationally viable Billerud in all countries. We closed our cost and efficiency programme this year, with total structural savings of SEK 920 million since it was initiated in 2019.

We have a clear long-term growth agenda for cartonboard. We are making good progress on our plans to convert US manufacturing assets to board production. The pre-feasibility study will be completed in the first half of 2023, whereafter a potential investment decision can be taken. We are working with all stakeholders to ensure the success of our plans and are scaling up our board business in the USA with deliveries of our CrownBoard products from Sweden.

Our initiative that aims to start producing bleached chemi-thermomechanical pulp (BCTMP) in Norway is also supporting these growth plans. Part of our partnership with Viken Skog will involve a long-term supply agreement that will ensure availability of cost-competitive pulp and pulpwood. A potential investment decision for this project is planned for the third quarter 2023.

For the first quarter of 2023, we expect more challenging market conditions with slower demand for graphic paper, sack and kraft paper and paperboard. Customers’ destocking and the future economic uncertainty are expected to have a temporary negative impact on sales volumes. Market conditions for liquid packaging board are expected to remain stable. We expect stable volumes in liquid packaging board with price increases taking effect early in first quarter.

The cost inflation is expected to continue through early 2023. In the first quarter, our costs of wood, energy and chemical will increase in Europe, while logistics costs will be stable. Costs in North America is anticipated to be stable. For 2023, we have hedged 67% of our electricity consumption in Europe and have contracts with fixed prices for almost half of our natural gas consumption in North America.

To mitigate the market slowdown and the inflationary pressure we are prioritizing our need for cost coverage. If necessary, we will take market-related downtime in production. In addition, we are launching a new three-year efficiency enhancement programme, following the successful cost saving programme we closed in the fourth quarter. Examples of improvement areas are lower inventories of finished goods and better processes for shorter delivery times and mix management. The target for the programme is an EBITDA uplift by the end of 2025 run-rate of SEK 1.5 billion. For 2023, we estimate a delivery of SEK 400 million.

Billerud is today diversified in terms of both geographies and product categories, and a large part of our sales is attributed to the demand resilient packaging materials for essential food and drinks. The company’s cash generation is solid, and our financial position is strong. The net debt to EBITDA ratio was as low as 0.6 at year-end.

I would like to thank our customers, employees and all other stakeholders for your support in 2022, and I am looking forward to a successful 2023.

Christoph Michalski
President and CEO

See also:

Press release for Year-end report January–December 2022.
Download the report in PDF and other material under our Investors section

Key highlights Q4

  • Organic* and currency neutral sales growth of 14%Adjusted EBITDA margin of 17% despite soaring cost inflation
  • Solid operating cash flow and strong balance sheet
  • Shift towards softer demand and declining sentiment
  • The Board of Directors proposes an ordinary dividend of SEK 5.50 per share (4.30) and an extraordinary dividend of SEK 2.00 per share (–)

Quarterly data Q4

  • Net sales increased by 79% to SEK 11,971 million (6,688), whereof Billerud North America accounted for SEK 4,004 million
  • Adjusted EBITDA** increased to SEK 2,092 million (1,075), whereof Billerud North America accounted for SEK 1,123 million (–)
  • The adjusted EBITDA margin was 17% (16%)
  • Operating profit was SEK 1,353 million (418), including items impacting comparability of SEK -52 million (-177)
  • Net profit was SEK 940 million (320)
  • Earnings per share amounted to SEK 3.79 (1.55)

Outlook for Q1

  • More challenging market conditions for most product categories, with slower demand
  • Raw material costs expected to be stable in North America and to increase in Europe
  • Billerud to kick-off a three-year efficiency enhancement programme in region Europe 

For further information:
Ivar Vatne, CFO, +46 8 553 335 07
Lena Schattauer, Director Investor Relations, +46 8 553 335 10