Billerud Year-end report January–December 2023

Key highlights
*Weak volumes in North America and negative price and mix impact in both regions
*Sequentially lower input costs, mainly related to pulpwood in Europe
*Another strong delivery of our efficiency enhancement program
*Excellent cash delivery through working capital focus
*Negative profit impact from revaluation of biological assets in the associated company BSÖ
*The Board of Directors proposes a dividend of SEK 2.00 per share (7.50)

Quarterly data Q4
*Net sales decreased by 20% to SEK 9,566 million (11,971)
*Adjusted EBITDA* SEK 774 million (2,092)
*Adjusted EBITDA margin 8% (17)
*Operating loss SEK 191 million (profit: 1,353) including items affecting comparability of SEK -244 million (-52)
*Net loss SEK 330 million (profit: 940)
*Earnings per share SEK -1.33 (3.79)

Comments by the CEO
2023 has been an extremely challenging year. Early in the year, we faced unusually high inventory levels throughout the value chain. The whole industry has needed to be patient and wait for the destocking to phase out. In that sense, the fourth quarter was no exception, and broadly in line with our expectations. Sales volumes came in somewhat softer due to customers protecting their working capital before year-end, and logistical challenges. The good news is, going into 2024, we see clear indications that customers’ inventories are returning to normalized levels.

The organic and currency-neutral net sales in the fourth quarter declined by 21% compared to the same period last year. Our input costs continued to decrease sequentially, mainly attributed to lower wood costs in Europe. However, low sales volumes in North America as well as deteriorated prices and unfavorable category mix in both regions led to an adjusted EBITDA margin of 8%, a performance we are not satisfied with.

We have maintained a strong focus on items we can influence in an unfavorable market environment. In this context, I’m proud of the results we have delivered throughout 2023. Our three-year efficiency enhancement program has excellent momentum, and we overdelivered on the 2023 target. I am also pleased with the outstanding cash flow conversion for the year of 99%, mainly driven by successful reduction of inventory levels. This enabled us to finish the year with a continued strong balance sheet. The Board proposes a dividend for 2023 of SEK 2.00 per share, 65% of the adjusted net profit.
details at: https://www.billerud.com/press–news/press-releases/2024/year-end-report-januarydecember-2023

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