INTERIM REPORT January–March 2016

(Tables included in attached PDF)

KEY HIGHLIGHTS

• Net sales for the quarter amounted to SEK 5 357 million which was SEK 277 million lower compared to the same period last year mainly due to the divestment of Latgran.
• Earnings per share for the quarter amounted to SEK 2.33 (2.38).
• EBITDA margin was 19% (19%) and operating profit reached SEK 658 million which was SEK 40 million below first quarter 2015 primarily explained by the divestment of Latgran.
• Significant improvements were made in the production compared to previous quarter even if some problems still remained.
• Net sales and volumes were in line with previous year despite ramp-up issues during the quarter.

OUTLOOK

• Demand and order situation for the second quarter is expected to be stable with normal seasonal variances for all business areas.
• Average prices in local currency in the second quarter are in general anticipated to be stable. Prices within Corrugated Solutions may be impacted by the increased market supply.
• No changes to wood prices are anticipated for the second quarter.
• Limited volume growth is expected in business area Consumer Board in the second quarter due to the production disturbances in the first quarter.
• Gruvön and Skärblacka production units will have planned maintenance shutdowns during the second quarter.

          
Comments by BillerudKorsnäs’ CEO Per Lindberg:

Stable markets and stable performance despite slow ramp-up

”We have again had a tough quarter with production lower than expected, due to last year’s rebuilds. Production improved during the quarter and I anticipate production to reach target run rate at the end of the second quarter. Even if we did not reach our own growth expectations I still think we deliver a solid and satisfactory financial result. Our markets continue to be stable and we expect that growth will materialise as production stabilises.”

THE RESULT
Net sales and EBITDA were down from the same quarter last year due to the divestment of Latgran in the third quarter 2015. For comparable units, Net sales was on the same level as last year and the EBITDA has actually improved. We saw improvements in results in both Consumer Board and Corrugated Solutions business areas.  

MARKET OUTLOOK
The overall market has been stable and we expect this to continue with normal demand patterns.

Business area Packaging Paper experienced, as anticipated, a lower than normal brown sack market with lower prices in local currencies. Also the pulp price was down compared to Q1 last year. The remaining segments in Packaging Paper saw a stable market development with stable pricing with slight increases on MG paper.

For the first quarter Consumer Board did not manage to deliver sales volume growth. This is due to the problems in production in the fourth quarter. But we expect growth rates to start pick-up again in the second half of the year as the market has not changed and our production stabilises. In spite of the production problems during the quarter and the associated tight delivery situation the business area has managed to deliver a solid profit in line with previous year.

Business area Corrugated Solutions shows a continued strong performance. Corrugated markets continued to be stable during the quarter and our solution sales continued to grow successfully and take on-board new business.

STRATEGY
For our industry, sustainability has historically meant to minimise our impact on the environment. Sustainability is part of our core business and we see sustainability as a business opportunity. We are proud to be the only company in Sweden and the only one in our industry on the CDP's (previously Carbon Disclosure Project) A-list of companies that demonstrate leadership in measures to improve the climate. But we are also pleased for every customer that switches from plastics to BillerudKorsnäs’ paper or board because that is when we have a tangible positive impact. As an example, an independent life cycle analysis shows that a paper bag results in half the emission of carbon dioxide compared to a plastic bag. Based on our products from renewable raw materials we can contribute to increased sustainability along the value chain by replacing other materials and solutions. As a result of the increasing interest for sustainable consumption, we also see an increasing interest in sustainable packaging among both brand owners and converters. With sustainability as part of our core business we consider our strategic position to be very strong.

BillerudKorsnäs’ President and CEO Per Lindberg and CFO Susanne Lithander will present the interim report at a press and analyst conference at 10.00 CET on Thursday 21 April 2016.
Venue: Tändstickspalatset, Västra Trädgårdsgatan 15, Stockholm

For further information, please contact:
Per Lindberg, President and CEO +46 (0)8 553 335 00
Susanne Lithander, CFO, +46 (0)8 553 335 00

The information in this report is such that BillerudKorsnäs AB (publ) is obliged to disclose under the Swedish Securities Market Act and was submitted for publication at 07.00 CET on 21 April 2016. This report has been prepared in both a Swedish and an English version.

BillerudKorsnäs provides packaging materials and solutions that challenge conventional packaging for a sustainable future. We are a world leading provider of primary fiber based packaging materials and have customers in over 100 countries. The company has 8 production sites in Sweden, Finland and the UK and about 4 200 employees in over 13 countries. BillerudKorsnäs has an annual turnover of about SEK 22 billion and is listed on Nasdaq Stockholm. www.billerudkorsnas.com

Tags: