• Net Sales Growth: 6% overall growth, 9% organic and currency neutral.

• Profitability: Significant improvement compared to the previous year and quarter.

• EBITDA Improvement: 33% increase versus last year.

• Efficiency Enhancement Program Contribution: 220 million SEK added this quarter.

• Region Europe EBITDA Margin: 16% with a focus on pricing and efficiency.

• Region North America EBITDA Margin: 18% with a 14% volume increase year-over-year.

• Cost Headwind in Europe: 70 million SEK in Q3, expected 100 million SEK in Q4.

• Cash Flow Conversion: Below 30% for the quarter, targeting 80% for the full year.

• Capex Guidance: Unchanged at 2.3 billion SEK for the year.

• Warning! GuruFocus has detected 5 Warning Signs with BLRDF.

Release Date: October 24, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Billerud AB (BLRDF) reported a strong net sales growth of 6% with a 9% organic and currency-neutral increase.

• The company achieved significantly improved profitability, with Europe recording its best profitability in over two years.

• North America delivered another excellent quarter with an 18% EBITDA margin, continuing a trend of strong results.

• The efficiency enhancement program contributed an additional 220 million SEK, positioning the company well towards its full-year target.

• Billerud AB (BLRDF) successfully transferred a US pension obligation, resulting in a positive impact of approximately $25 million to be recorded in Q4.

Negative Points

• The company anticipates a worsening market situation going into Q4, with underlying consumption below long-term trends.

• Cartonboard faced a disappointing quarter with overcapacity and weak demand, particularly in European markets.

• The company expects additional cost headwinds in Q4, including higher pulp and electricity costs.

• Billerud AB (BLRDF) experienced a working capital build-up, impacting cash flow performance in Q3.

• The company faces challenges in balancing higher input costs with moderating demand, particularly in Europe.

Q & A Highlights

Q: Can Billerud AB shift production from carton board to other categories due to weakness in carton board demand? A: Yes, Billerud AB has the flexibility to shift production from carton board to other categories such as liquid packaging and container board. The company plans to explore all volume opportunities in other segments while prioritizing value over volume.

Q: What is the outlook for the US market in 2025, considering capacity changes? A: Billerud AB expects stable volumes in Q4 2024, with potential for increased volumes in 2025 due to capacity reductions in the US market. The company is confident in its strong market position and expects further uplift in graphic paper volumes.