Continued strong performance in the US while addressing weak market in Europe
Key highlights
- Currency-neutral net sales growth in North America
- Lower sales volumes in Europe
- Sequentially improved adjusted EBITDA margin to 11%
- Excellent cash conversion of 139%
- Launched cost saving program targeting SEK 800 million (annualized)
Quarterly data
- Net sales decreased by 8% to SEK 9,905 million (10,798)
- Adjusted EBITDA* SEK 1,058 million (1,555)
- Adjusted EBITDA margin* 11% (14)
- Operating profit SEK 9 million (851) including items impacting comparability of SEK -350 million (–)
- Net profit SEK -63 million (565)
- Earnings per share SEK -0.25 (2.27)
Outlook for Q4
- Continued strong performance in North America
- Weak market conditions in Europe
- Lower pulpwood costs in Europe
Comments by the CEO
We continue to meet completely different market realities in our two regions. Another strong performance in Region North America, while the market conditions are clearly more challenging for Region Europe. Despite this, our Q3 result was sequentially stronger, with adjusted EBITDA of 11%.
In North America, we continue to operate under favorable market dynamics, and we have seen further customer interest since the US import tariffs came into effect in August. Local production in the US is a valuable asset, and we are well positioned as a market leader in an attractive Midwest region. Our value proposition is strong with high-quality products, delivered with short and predictable lead times to a vast customer base. Currency-neutral net sales grew 4% and the EBITDA margin ended at 16%.
In contrast, in Europe, the sector is facing challenging conditions with muted packaging consumption, cost inflation and currency headwind. Moreover, structural production overcapacity within board weighs on the European market, driven by recent capacity expansions coming online and reversals of trade flows following the implementation of the US import tariffs. Net sales for Region Europe declined versus last year in all product categories but market pulp. Production was curtailed to match the level of demand, particularly at our board mills. Maintenance stops at Gävle and Karlsborg impacted costs in the quarter. The region’s EBITDA margin in the quarter was 10%.
To address the adverse conditions, we maintain our relentless focus on items that we can control. We are taking further decisive actions to both improve our cost-competitiveness and leverage our leading position of high-performance packaging materials. Our recently announced cost saving program is targeting SEK 800 million of yearly impact, that will have a noticeable positive contribution from Q1 2026 and onwards. To successfully deliver our program, we will have to change our ways of working and target simplification and more automation. Additionally, we are doubling down on innovation and product development. As an example, two new cartonboard grades were launched during the quarter, targeting food and beverage applications where our products provide higher value to customers compared with competition.
Our discipline to reduce working capital and produce strong cash generation is paying off. Cash conversion in the quarter was 139% and we are well on track to deliver our full-year target of >80% cash conversion and maintain our strong balance sheet. While streamlining our operations, we are also further scrutinizing the needs and timing of our investments across the company.
The strategic shift of our portfolio in North America towards packaging materials to improve our product mix and optionality is progressing well. Customers’ interest and our order intake for our new products Tribute® and Voyager™ is increasing and we have seen acceleration in our deliveries over the past months. We have already delivered US-made white kraftliner and cartonboard to both new and established customers. We continue to see great opportunities ahead in growing our presence within packaging materials in the US supplied by our mills in the Upper Michigan region.
Looking ahead and into Q4, we expect continued solid market conditions for our operations in North America. In contrast, we expect the adverse market conditions in Europe to continue to impact our sales in Q4, particularly within board categories. The future for sustainable and recyclable fibre-based packaging materials is still bright and is expected to outperform GDP growth rates long term, but a prolonged European downturn in combination with oversupply, will take time to rebalance.
The trend of decreasing pulpwood prices in the Nordics continues, and prices have now fallen more than double digit since the peak levels in Q2 2025. We expect that prices will continue to decrease on the back of good wood availability due to low operating rates in the industry and a weak biofuel market. We expect a sizable cost relief for 2026 for our Region Europe.
For the remainder of 2025 and into 2026 we stay firm on our strategic choices: continue our evolution journey towards packaging materials in the US and strengthen our performance in Europe. By staying focused, agile and accelerate progress in areas we can control, Billerud will be more competitive and well positioned when the market recovers.
Ivar Vatne
President and CEO
