Billerud (BILL) CMD 2024 summary

Strategic direction and business evolution

• Strategy centers on safety, sustainability, and value creation over volume growth, with a focus on high-performance paper and packaging materials.

• North America is evolving from graphic and specialty papers toward packaging materials and paperboard, with targeted investments in Escanaba and Quinnesec mills.

• Europe focuses on optimizing existing assets, clarifying category roles, and prioritizing high-value segments like liquid packaging board and sack paper.

• Four key priorities: secure cost-competitive fiber, improve mill efficiency, enhance efficiency, and be the preferred customer choice.

• Performance culture prioritizes profitability over sales growth, with capacity adapted for higher efficiency.

Financial guidance and targets

• New financial targets: ROCE above 11%, EBITDA margin above 15%, EBITDA above SEK 6 billion, and cash conversion above 80%.

• Dividend policy is a minimum 50% payout of net profit, with net debt/EBITDA below 2.5.

• North America targets EBITDA margin above 18%, Europe above 15%, with profitability uplift from efficiency and market recovery.

• Capital allocation prioritizes financial stability, North American strategic investments, and disciplined base CapEx in Europe.

• Strategic CapEx is modest and scalable, concentrated in 2025, with annual base CapEx projected at SEK 2.2 billion.

Sustainability and regulatory adaptation

• Committed to updated Science Based Targets, including a 42% absolute CO2 reduction by 2030 and Net Zero by 2040.

• First fossil-free mill expected in Gruvön by 2025; European operations already 98% fossil-free.

• North America focuses on energy efficiency, alternative fuels, and logistics improvements.

• Proactive adaptation to EU regulations, including Packaging Waste Directive and Deforestation Regulation, with IT solutions for traceability.

• Sustainability is a competitive advantage, supporting customer demand for low-carbon, plastic-alternative packaging.