Billerud delivered a sequential improvement in second-quarter profitability as pricing actions, cost reductions and strong North American demand helped offset continued weakness in Europe.
Net sales declined 4% year over year to SEK 9.8 billion, primarily due to currency effects and lower prices and volumes in Europe. Adjusted EBITDA totaled SEK 661 million, compared with SEK 912 million a year earlier, while the adjusted EBITDA margin narrowed to 7% from 9%. The company reported an operating loss of SEK 58 million and a net loss of SEK 64 million.
North America remains the key growth driver
North America continued to lead Billerud's performance during the quarter, with currency-neutral net sales increasing 11% from the same period last year. Shipments reached their highest level since late 2022, while pricing actions more than offset higher energy costs linked to rising oil prices.
The company also continued to advance its strategic transition from graphic papers toward higher-value packaging materials in North America. Interest in its U.S.-produced coated liner remained strong, with additional customer qualifications underway. Planned machine upgrades at the Escanaba mill during September are expected to further strengthen Billerud's packaging materials offering.
Europe profitability improves despite weak demand
Market conditions in Europe remained difficult, with subdued demand and continued oversupply of board grades. Despite these challenges, profitability improved both sequentially and compared with the second quarter of 2025.
Price increases, a more favorable sales mix and lower input costs helped offset lower sales volumes. Excluding scheduled maintenance shutdowns, regional EBITDA nearly doubled compared with the previous two quarters.
Billerud's cost-saving program remained on track, generating SEK 150 million in savings during the quarter. Over the past three years, the company has reduced its permanent workforce by 15% while implementing a leaner organizational structure across its production units.
Cash generation remains a strength
Cash generation stood out during the quarter, with Billerud reporting a 97% cash conversion rate, well above its long-term target of converting at least 80% of EBITDA into operating cash flow.
The company said disciplined capital allocation and tighter working capital management continue to support its financial position.
Scheduled maintenance shutdowns at the Gruvön, Pietarsaari, Rockhammar and Quinnesec mills had a combined earnings impact of SEK 442 million during the quarter.
Outlook
Billerud expects market conditions in North America to remain favorable during the third quarter, while Europe is projected to see only modest improvement amid continued market uncertainty.
The company anticipates positive pricing effects in both regions, with overall input costs expected to remain broadly stable.
President and CEO Ivar Vatne said Billerud will remain focused on the factors it can control, including pricing actions, cost reductions and disciplined investments that support its long-term strategy.
"We remain focused on items we can control: delivering cost savings and implementing pricing actions to offset inflation," Vatne said.
Although European market conditions remain challenging, the company said it continues to evaluate opportunities to strengthen long-term competitiveness while expanding its portfolio of high-performance packaging materials.
Billerud is a global supplier of high-performance paper and packaging materials serving customers in more than 100 countries. The company operates production facilities in Europe and North America and focuses on renewable, fibre-based solutions for packaging and specialty paper applications.
