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Billerudkorsnäs publishes its Interim report January–June 2018
Net sales were SEK 5 898 million (5 600), an increase of 5% mainly as a result of increased local sales prices.
Comments by CEO:
“The second quarter was characterised by continued strong demand for innovative and sustainable packaging. Net sales in the quarter increased by 5% compared with the same period last year, mainly driven by higher sales prices. The increased sales prices have compensated for higher wood costs. However, both raw material costs and wood supply will continue to challenge our result and production.
The production has been stable during the quarter, apart from the start-up issues related to the planned maintenance shutdowns. It is encouraging to note that four of our mills achieved production records, and that our growth investments are progressing according to plan. The new machine at Skärblacka has been started successfully.
Within the scope of the group-wide programme for improved production efficiency, we have decided to implement measures with the aim of strengthening the workplace efficiency and environment at several of our mills. Linked to this, and to unify accounting principles related to spare parts and consumables, a provision of SEK 452 million has been made.
In order to achieve faster decision-making and implementation of our strategy and plans, we have begun negotiations on a new organisational structure that will consist of three business divisions with full profit and loss responsibility.”
EBITDA for the quarter amounted to SEK 203 million, a decrease of 76% primarily related to provisions. Net sales increased by 5%, mainly driven by increased prices and a positive currency impact. Variable costs increased, due to demand-driven price increases for wood and chemicals.
The adjusted EBITDA margin was 11%. Production losses due to continued wood shortages had a negative impact of SEK 100 million on EBITDA. The planned and prolonged maintenance shutdowns at Gruvön and Skärblacka were carried out at a total cost of SEK 401 million, which was SEK 66 million higher than expected due to certain start-up issues.
Packaging Paper is delivering a strong result, driven by increased demand and higher prices. Consumer Board had high availability, but EBITDA decreased compared with last year due to contractual unchanged sales prices and increased raw material costs. Managed Packaging, within Corrugated Solutions, is continuing to deliver strong sales growth and is now contributing positively to earnings.
Strong demand within all business areas is expected to continue. Order levels are high with possibilities for selected price increases to offset the rising raw material prices.
In the longer term, the global mega trends of urbanisation, e-commerce and sustainability offer significant opportunities for continued growth. Innovative and sustainable products are gaining an increasingly important role in many brand owners’ efforts to make their products more competitive. With a clear innovation focus, we are well positioned to capture that growth. One example is the paper battery enabling energy storage in packaging material, where important steps have been taken lately towards a commercialisation. The long-term aim is to enable large-scale production and the future use of paper batteries for applications in areas such as smart packaging.