Strong fourth quarter to end a successful 2021
Key highlights:
15% net sales growth
Strong production in the quarter
Record-high earnings for 2021
Another strong cash flow delivery
The Board of Directors proposes a dividend of SEK 4.30 per share
Quarterly data:
Net sales grew by 15% to SEK 6 688 million (5 803). Currency effects had a marginal impact on net sales
Adjusted EBITDA* increased to SEK 1 075 million (568), corresponding to an adjusted EBITDA margin of 16% (10%)
Operating profit was SEK 418 million (163), including items impacting comparability of SEK -177 million (73)
Net profit was SEK 320 million (242)
Earnings per share amounted to SEK 1.55 (1.17)
Comments by the CEO
The fourth quarter was another quarter of solid growth and strong performance, driven by strong market conditions. Higher prices, product mix improvements, continued cost program delivery and productivity increases offset cost inflation for logistics, chemicals and energy in the fourth quarter. Net sales excluding currency effects and adjusted for Beetham, which was divested on 31 October 2021, increased by 17%. The adjusted EBITDA margin was 16% and the cash flow generation continued to be strong.
In the year 2021 we made important progress. Both the injury frequency rate (LTIFR) and the overall production stability improved, despite two major unplanned production stops in Gävle. Our net sales excluding currency effects grew by an impressive 12% and adjusted EBITDA were the highest in the company’s history. Operating profit strengthened and the net debt decreased. The Board of Directors proposes a dividend for the year of SEK 4.30 per share, which corresponds to 60% of the net profit.
As communicated at our capital markets day in November, we have set a strategy for profitable growth to 2030. Whilst Europe will still be our home market, we see great opportunities for growth in North America, specifically with cartonboard and containerboard. We will accelerate growth in liquid packaging board with selected opportunities. For sack and kraft paper we will continue to improve mix by focusing on the most profitable applications. All areas are supported by innovation where we are enhancing the impact and relevance to our core business. To achieve our ambitions, production needs to be highly efficient, and therefore, we will increase investments in mill maintenance and development. To secure a competitive wood supply we aim to optimize fibre consumption, build long term sourcing partnerships, secure competitive fibre availability and build a lean, green and flexible supply chain.
The merger agreement with Verso that was announced in December is fully in line with this strategy. Verso will mean a platform for expansion in North America, creating growth opportunities for the next ten years and beyond. We will continue to serve the existing customers while sequentially converting two paper machines into board machines. We will thereby create one of the most cost-effective paperboard production structures in North America. The combination of BillerudKorsnäs’ expertise in high-quality packaging products and Verso’s attractive assets in a region with abundant and competitive fibre supply will form one of the largest companies in primary fibre packaging and paper with both quality and cost advantages. We expect the transaction to be completed in the second quarter of 2022.
Going into 2022 we expect the strong market conditions to prevail in the near future. We will continue to gradually increase board volumes and improve the sales mix. We foresee good availability of fibre and marginally increased wood costs. However, we anticipate logistic costs to increase, mainly due to overheated oversea shipping markets and higher fuel prices for road transports. We also expect costs for energy and chemicals to rise. To counteract the cost inflation, we will continue to focus on price and mix management and improved efficiencies.
Our priorities for 2022 are to continue to deliver our strategy in commercial, operations and wood supply, as well as to close the deal with Verso and deliver the integration work. For the past year, I would like to thank all customers, employees and other stakeholders for your support.
details at: https://www.billerudkorsnas.com/press–news/press-releases/2022/year-end-report-januarydecember-2021