Billerud reports volume growth in Q1 2026 but profitability under pressure
Billerud reported a 9% sequential increase in sales volumes in the first quarter of 2026, although profitability remained under pressure, particularly in the European market.
Net sales for the period declined by 11% year-on-year to SEK 9,825 million, while adjusted EBITDA fell to SEK 525 million, corresponding to a margin of 5%, compared with 13% in the same period of the previous year. The operating result was negative at SEK -229 million, and net profit amounted to SEK -219 million. The weaker performance was primarily attributed to lower sales prices, higher maintenance costs, the loss of free emission allowances, and continued cost inflation, particularly in logistics and chemicals.
Diverging regional performance
The quarter highlighted a clear contrast between the Group’s two main regions. North America delivered another solid performance, achieving an EBITDA margin of 16% despite challenging weather conditions that caused production disruptions and increased costs.
In contrast, Europe recorded a significantly weaker performance, with an EBITDA margin of 2%. Pricing pressure, currency effects, higher maintenance costs, and structural market imbalances weighed on profitability, despite a strong sequential increase in volumes.
Liquid packaging board showed particularly strong growth, with net sales increasing by 17%, partly supported by demand from Asia and inventory adjustments ahead of anticipated price increases.
Cost-saving measures and operational focus
Billerud continued to advance its cost-saving programme, achieving a positive impact of approximately SEK 100 million in the first quarter. The company targets fixed cost savings of around SEK 550 million for the full year 2026, ahead of initial plans.
“Our cost-saving program is ahead of plan, and all planned staff reductions have now been completed,” said Ivar Vatne, President and CEO. The Group also confirmed that production was curtailed in both regions during the quarter, with total sales volumes reaching 899 ktonnes.
Outlook for the second quarter
Looking ahead, Billerud expects continued challenging market conditions in Europe, while maintaining solid demand in North America. The company anticipates benefits from lower pulpwood prices and ongoing cost-saving initiatives, although these will be partially offset by higher costs related to annual maintenance shutdowns.
Price increases have been announced across most product categories in both regions to mitigate rising input costs.
“We expect to restore a strong underlying profitability level in North America, while in Europe we are taking decisive actions to improve cost competitiveness,” Vatne stated. He also highlighted that structural overcapacity in the European paper and packaging sector is becoming a long-term issue, likely requiring further consolidation and capacity rationalisation.
Strategic priorities
Billerud confirmed that it will continue to focus on its “Way Forward” strategy, with particular emphasis on expanding its packaging materials business in North America. Planned upgrades at the Quinnesec and Escanaba mills will support increased board production capacity.
The company also maintained a strong financial position during the quarter, supported by new long-term financing. Subject to shareholder approval, a dividend of approximately SEK 2.00 per share is expected to be distributed in the second quarter.
