Billerud Ab (Sweden)

Good day and thank you for standing by. Welcome to the Billerud Q2 Report 2024 webcast and conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you will need to press star one and one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Lena Shatawa, Head of Investor Relations. Please go ahead.

Good morning, and thank you for joining this conference. The presentation of Billerud's second quarter results will be conducted by our President and CEO, Eva Daphne, and our CFO, André Kreet. After the presentation, it will be possible for participants on the call to ask questions. And with that, I hand over to you, Eli.

Thank you, Lena. And good morning, everyone. And thanks for joining in on this beautiful summer day here in Stockholm. So we're excited to walk you through some of the highlights of our Q2, which has been a quarter with some very clear positives. So let's get into the next slide, please. We're back to net sales growth, and we see this growth coming broad-based across most categories in both regions, which is encouraging to see after fighting market headwind for some time. Another clear highlight is how we've been able to successfully improve our underlying profit, both versus a year ago and quarter over quarter. Key has been a clear and deliberate focus on driving the right mix and proactive price management. And this has enabled us to fully offset input cost inflation. I'm also proud of the continued progress we've done to deliver on our efficiency enhancement program. And now speaking about profitability, I want to highlight a region North America here delivering 18% EBITDA in a quarter where we also include a maintenance stop. That is something I'm very pleased about. It's been a busy maintenance quarter for us with four mills doing their annual shots. But I'm happy to report that all stops have gone well and largely in line with both time and cost estimates. Lastly, I want to highlight our ability to convert the reported profit into cash. Working capital discipline has been a big item for us over the past years. And we see another proof of it this quarter with a cash conversion close to 80%. And that's another solid number. Next slide, please, and onto some comments about the market sentiment. In general, we have experienced improved sentiment for most of our categorings during the quarter. And our view is that we are operating in a normal to good conditions on average for bidders. Customers are ordering again, and the destocking we faced during most of 2023 feels like a long time ago. However, we are far from the overheated market we experienced during 2022. There is an uncertainty of how strong the underlying demand really is, and that situation differs by category. But overall, we remain cautiously optimistic that condition will continue to improve going into second half. For food and drink, our biggest channel by far. We see normal conditions for liquid packaging board and due to strong conditions for container board and a second craft business. Consumption is decent. and stock levels throughout the value chain do not seem to be unusually high. For a printing and publishing channel, we're still coming from a relatively soft situation in the beginning of the year. Inventory have come down to more normalized levels, and the upcoming election should fuel more positivity going forward. However, we experienced headwind with heavy postage inflation past years, which dampens the market activity. But net-net, though, we expect this channel to slightly improve going into Q3. Consumer luxury has also improved. Demand seems to be OK, but it is not as strong as what we see in container board. If we see stable condition going into second half, it's a rough expectation that we will see an increased demand going into 2025. And lastly, for industrial channel, the SAC business has improved. We had normal or average plus conditions Pretty good poll in the brown SAC business. Nothing remarkable. A lot of effort into driving profitable mix. For white SAC, Northern Europe is quite weak. Well, it was a good poll for the Southern Europe geography. But overall, we believe our SAC business will meet stable condition in 2023. So with that, I hand it over to André.