Billerud Ab (Sweden)

Please be advised, today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Lena Schatauer, Head of IR. Please go ahead.

Good morning and welcome to Billiards Q3 2025 earnings call. As usual, our President and CEO, Eva Vatne, and our CFO, André Kreet, will give you an overview of the results and the highlights in the third quarter. The presentation will be followed by a Q&A session. So with that, I hand over to Ivar to begin.

Thank you, Lena, and good morning, everyone. And thanks for listening in this early Thursday morning. Yet again, it's a tale of two stories for a quarterly report summarized quite well in the heading here on the slide. It's been a quarter that landed quite close to our expectations with another strong quarter for our region, North America, while weak market conditions are weighing down on region Europe. Let's get into the details. So next slide, please. And if we start from the top, net sales is down 8% versus a year ago, where half of that decline is currency related. and most of the remaining decline is due to lower sales volume in Europe. Our region, North America, continued this impressive trend and record another strong quarter. Currency neutral, net sales growth of 4%, and despite some maintenance costs during the quarter, the region delivered strong profitability, coming in at 16% EBITDA. And for total billage, EBITDA landed at 11%, which is down versus a year ago, fed up sequentially by two percentage points. We maintain our working capital discipline also for Q3 and record a very strong cash conversion and cash delivery. And so far in 2025, we're way ahead in terms of cash generation versus same period last year. Last but not least, we did announce mid-September a new cost-saving program targeting annual savings of 800 million SEK. And more details about the program a bit later. Some more comments on the market sentiment. So next slide, please. And as I mentioned during my introduction, we are continuing to meet very different market sentiment between our two regions. In the US, where we have our biggest exposure towards graphic paper, the favorable conditions are continuing, and we are in a great position with local supply and close proximity to a large customer base in the Midwest. Post implementation of the US import tariffs in August, we've seen accelerated customer interest in the wake of our strong value proposition. And we do expect the favorable conditions in the US to maintain also now in Q4. Now, in a bit of contrast, we are facing and continue to face weak market condition for region Europe across the board. And we expect the condition to stay weak also now in Q4. And this is an industry and sector challenge where we're doing our outmost to navigate through it. And on the billboard side, we are impacted more within our board categories while our paper grades are holding up better. Now, you'll meet some of the usual suspects when trying to identify the key drivers behind the development. So next slide, please. And although these drivers are probably not equal in weight, there are four main reasons that continue to impact our region Europe. Yes, we are still seeing high prices on Nordic Polkadot. And yes, we do face currency headwind. But a bigger challenge right now is related to weak consumption and muted consumer spending. And we see that across most of our key categories and channels at the moment. Growth is stagnant and much below the long-term growth expectation. Short term, we don't see any evidence for recovery, certainly not in Q4. But at least in our discussions now with several customers regarding their 2026 forecast and volume predictions, it indicates a more positive view. Secondly, production over capacity. First and foremost, within board products, too much supply is available right now linked to new capacity coming online in combination with reversal of some of the trade flows that historically went from Europe to the U.S. Now, on our side, we do remain focused on excelling within the areas we can control. And that has been the mantra for some time. And that is what we intend to keep doing. So next slide, please. And hence, we've taken another proactive step during Q3 to further strengthen our competitiveness and reduce our cost base. And this will be our second cost and efficiency program in two years. We target annualized savings of 800 million SEK, which we expect to reach the full run rate towards the end of 26. We estimate 500 million impact in 2026 with an exponential impact from Q1 and onwards. It will impact up to 650 positions throughout the company, first and foremost in the region Europe and corporate functions. And right now, we are in dialogue with the unions regarding scope and impact, and we'll have a clear picture of the plan elements towards the end of the year. Linked to the program, we did record a non-recurring cost item of 350 million now in Q3. Next slide, please. Now, on the other side of the Atlantic, the strategic direction remained very clear. Stay committed to a graphic and label paper while evolving our product portfolio towards packaging materials. And the progress is starting to click into gear and yield results. And we have several trials and tests ongoing to offer locally US-made container and carton board. Order flow is strengthening, and we move towards 2026 with significant momentum, both for our tribute liner product and the carton board Voyager proposition. And I'm both proud and excited to see the progress we've been doing and have made in 2025. And for 2026, we obviously have a much higher ambition of what number we aim to achieve. So with that, I'd like to hand it over to André.