INTERIM REPORT January–September 2016

(Tables included in attached PDF)


KEY HIGHLIGHTS

• Net sales are lower than the same period previous year. The decrease is due to the divestment of Latgran in the third quarter 2015.
• Adjusted EBITDA is on the same level compared to the same quarter previous year.
• Sales volumes are on the same level as Q3 last year.
• Earnings per share for the quarter amounted to SEK 2.41 (3.49).
• Costs for planned maintenance shutdowns in the production units in Karlsborg and Gävle amounted to SEK 194 million in line with the estimated SEK 195 million.
• Production ran according to plan except for the recovery boiler in Frövi that experienced serious problems at the end of the quarter.

OUTLOOK

• Demand and order situation for the fourth quarter is expected to be stable with normal seasonal variances for all business areas.
• Average prices in local currency in the fourth quarter are anticipated to be unchanged in all segments except for brown sack where a slight increase is expected.
• No changes to wood prices are expected for the fourth quarter.
• The production unit in Frövi will have planned maintenance shutdown in the fourth quarter estimated to cost SEK 90 million.
• The recovery boiler incident in Frövi will negatively impact growth for Consumer Board in quarter four.
• Additional cost in Q4, up to SEK 100 million, for repair of the recovery boiler in Frövi.

 
Comments by BillerudKorsnäs’ CEO Per Lindberg:

Firm performance in line with plans

”Once again we show a stable performance and I am happy to see that we deliver results as expected. Our production has stabilized and we have been producing in line with planned levels. The one issue for me is the lack of growth in Consumer Board. This is due to the production problems we suffered in previous quarters, but our view on the Consumer Board market has not changed and we expect to see the growth coming back as we catch up on inventory levels.”

THE RESULT
Net sales and adjusted EBITDA in Q3 are on par with previous year’s performance and in line with our expectations which is very satisfactory. We are not satisfied with our current lack of growth in the Consumer Board segment, but we have put the production disturbances related to last year’s rebuilds behind us, and the anticipated improvements will come as we now are able to run our capacity on higher levels to match market demand and growth. Unfortunately, at the end of the quarter the recovery boiler in Frövi experienced serious problems and we were forced to stop it before our planned maintenance shutdown. We can run the board machine on lower capacity on external pulp but as a consequence we will see additional costs for pulp and the repair of the recovery boiler in the coming quarter beyond our previous estimates.

MARKET OUTLOOK
Overall the markets in all three business areas were stable and we anticipate that to continue.

The brown sack paper market improved compared to previous quarter. The market demand and local pricing for NBSK pulp also remained stable in the quarter.

Our view on the Consumer Board market continues to be very positive. Local pricing has been stable and we are not expecting any changes.

Within Business area Corrugated Solutions the demand for fluting has strengthened throughout the quarter and local pricing was unchanged. Managed Packaging sales have continued to deliver good progress.

STRATEGY
Our company has high sustainability ambitions and performance, hence it makes us proud when it is recognized and verified. During the quarter, we have been awarded the Gold of EcoVadis for the third consecutive year, and we have been included in one of the world's most prestigious sustainability indexes, the Dow Jones Sustainability Europe Index. BillerudKorsnäs is the only European company in its category to be included.

BillerudKorsnäs wants to be a positive force in the development towards a sustainable future by challenging conventional packaging. One way of doing that is to find and invest in attractive companies in the early stages to eventually generate new business and solutions later on in the packaging value chain. "Internet of Packaging" is one of several areas of focus, and through our venture company it now includes the investment in Kezzler.

Our innovation and design agency NINE recently achieved great success at Pentawards, the packaging world's finest award, through gold and bronze in the concept category. Yet another example of how we challenge the conventional packaging.

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 Friday 21 October 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
 

This information is information that BillerudKorsnäs AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact persons set out above, at 07.00 CET on 21 October 2016. This information 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

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