Interim report January-June 2012

Submitted for publication at 09.45 CET on 19 July 2012

(Tables included in attached PDF)

Second quarter 2012

• Net sales amounted to SEK 2 440 million, compared with SEK 2 291 million in the previous quarter.
• Operating profit amounted to SEK 161 million, an increase of SEK 19 million compared with the previous quarter. All three business areas reported higher operating profit than in the previous quarter.
• Results for the quarter were charged with acquisition-related non-recurring costs of SEK 38 million. Adjusted for these non-recurring costs, operating profit totalled SEK 199 million.
• The company completed its acquisition of UPM’s packaging paper operation in Pietarsaari and Tervasaari, Finland.
• It was announced that Billerud and Korsnäs were to combine. The new company, BillerudKorsnäs, will be a leading player in primary fibre-based packaging materials and packaging solutions, with annual sales of approximately SEK 20 billion.

January-June 2012 compared with the same period in 2011

• Net sales totalled SEK 4 731 million, down 4%.
• Operating profit was halved to SEK 303 million, mainly as a result of lower prices.
• The 2012 AGM approved the Board of Directors’ proposed dividend of SEK 3.50 (3.50) per share for 2011.

Outlook

• At the beginning of the third quarter 2012, the order situation in the packaging paper segments was on average normal and is anticipated to remain stable over the next quarter.
• It is expected that price rises in sack and kraft paper, announced in the second quarter 2012, will show through in the second half of 2012.
• Non-recurring transaction costs pertaining to the combination with Korsnäs are thought likely to total approximately SEK 50 million, the major part of which is expected to be charged to the quarter in which the combination will take place. Added to these costs, financing and integration costs of a non-recurring kind will be incurred after the transaction is completed.
• Wood prices are anticipated to be lower in 2012 than in 2011.

 
Comments by Billerud’s CEO Per Lindberg:
Historic first half-year
“The first half-year of 2012 will go to history as the period in which we successfully concluded negotiations on two major strategic acquisitions. In January, we acquired UPM’s packaging paper operation, with ownership being transferred in June on approval by the competition authorities. This generated sales of SEK 168 million and an operating profit of SEK 10 million in the second quarter. On 20 June, we announced the combination with Korsnäs. In the transaction, Billerud will acquire Korsnäs shares from the current holder, Kinnevik, in exchange for cash and shares in Billerud. The combination represents a natural progression in consolidating the successful businesses of Billerud and Korsnäs in packaging materials and packaging solutions, with the objective of creating a strong international player in the packaging industry. The deal is conditional on approval by the AGM and the competition authorities.

It is pleasing to note that Billerud’s three business areas are performing better than in the first quarter and that the operating margin for our packaging papers is higher than 10%. Overall, Billerud reports sales of SEK 2 440 million and an operating margin of 7%. Our price increases are not yet reflected in earnings. Their impact is only expected to emerge during the next half-year.

Through our acquisitions, Billerud will become an even stronger partner for our customers. We would like our customers to see our expansion and strengthened position as something greatly to be welcomed. Billerud’s focus going forward will be to integrate our acquisitions in such a way as to offer customers an extended product portfolio and improved service and to the shareholders deliver the increased return that they expect.”

 
Billerud’s President and CEO Per Lindberg and CFO Susanne Lithander will present the interim report at a press and analyst conference at 11.00 CET on Thursday, 19 July.
Venue: Tändstickspalatset, Västra Trädgårdsgatan 15, Stockholm.

For further information in connection with this report, please contact Per Lindberg, President and CEO, +46 702 481 517 and Susanne Lithander, CFO, +46 730 370 874.

 
This information is such that Billerud AB (publ) is required to disclose under the Securities Market Act. Submitted for publication at 09.45 CET on 19 July 2012. This report has been prepared in both a Swedish and an English version. In the event of variations between the two, the Swedish version shall take precedence.

Billerud – “The Natural Part in Smarter Packaging”. Packaging manufacturers and brand owners are offered added value in the form of brand-strengthening, productivity-boosting and environment-enhancing packaging solutions. Billerud has a world-leading market position within primary fibre-based packaging paper. Billerud has annual sales of around SEK 11 000 million and is listed on NASDAQ OMX Stockholm. www.billerud.com

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