Solid result with sizable contribution from
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 ofSEK 2.00 per share (-)
Quarterly data Q4
- Net sales increased by 79% to
SEK 11,971 million (6,688), whereofBillerud North America accounted forSEK 4,004 million -
Adjusted EBITDA** increased to
SEK 2,092 million (1,075), whereofBillerud North America accounted forSEK 1,123 million (-) - The adjusted EBITDA margin was 17% (16%)
-
Operating profit was
SEK 1,353 million (418), including items impacting comparability ofSEK -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 inEurope -
Billerud to kick-off a three-year efficiency enhancement programme in region
Europe
Comments by the CEO
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
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
Our North American operations continued to make a sizable profit and cash flow contribution in the fourth quarter. Earnings in
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,
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
Our initiative that aims to start producing bleached chemi-thermomechanical pulp (BCTMP) in
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
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
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.
President and CEO
Fourth quarter
Sales and results
Net sales for the fourth quarter grew by 79% to
Adjusted EBITDA increased to
Items classified as affecting comparability of
Market development and outlook
In the fourth quarter 2022, the market sentiment shifted to being less favourable for several product categories. Earlier implemented price increases had effect, and the price levels were essentially maintained, while the volume softened towards the end of the quarter.
For the first quarter of 2023, market conditions are expected to be more challenging for all product categories, except for liquid packaging board and speciality paper, driven by inventory reductions at customers and a softer demand. Price increases for liquid packaging board will mitigate some of the cost increases, while we expect pressure on volumes for most other product categories.
Events in the quarter
Scheduled maintenance stops were carried out in October at Frövi and Rockhammar. The total negative impact of the shutdowns in the fourth quarter amounted to around
On 5 October, Billerud announced that it will investigate a relaunch of its OptiLabel(TM) HB made at the Quinnesec mill. Producing this speciality paper, designed for high-end pressure sensitive label applications, not only at the Escanaba mill but also at Quinnesec, will provide more manufacturing flexibility to support the American market.
On 12 October, the company simplified its name to Billerud to cater to its international customers. A new Articles of Association with the name Billerud Aktiebolag (publ) was registered by the Swedish Companies Registration Office in accordance with a resolution made by the 2022 Annual General Meeting. Costs for rebranding activities in the fourth quarter were not material.
On 24 October, the Board of Directors of Billerud appointed
On 13 December, the
* Excluding the acquisition of Verso in 2022 and the divestment of Beetham in 2021.
** For key figures and a reconciliation of alternative performance measures including adjusted EBITDA, adjusted operating profit, adjusted EBITDA margin, adjusted operating profit margin, adjusted ROCE and interest-bearing net debt/adjusted EBITDA, see pages 15-17.
For further information:
ir@billerud.com
This information constituted inside information prior to publication. This is information that
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