BillerudKorsnäs AB (publ)

Good day and thank you for signing by. I will now hand over to Lena Shatawa, Director of Investor Relations.

Hello and welcome to Billard's conference call about our third quarter results 2022. Today's presenters will be Christoph Michalski and Ivar Vatne and they will hold a presentation and after that we will have a Q&A session. So with this I hand over to you Christoph.

Thank you. Thank you, Lena. Good morning, everyone. So this is the first quarterly result that we are doing under the name of Billerud. And we changed the name in order to align ourselves with the international customer portfolio we have now. And we are very happy for the change of name and the simplification that that brings. Secondly, before I start the presentation, I wanted to talk to you about the appointment of Eva Wagner as Deputy CEO, which I'm very happy about this appointment. Now that our business becomes a little bit more geographically diverse and we have a strong focus for developing that business plus the internal improvements and long-term profit performance We decided that it would be good to have a tandem to make this happen, and I think you all will agree with me that Eva Wattner is an excellent candidate for this role, and I'm looking forward to work with you, Eva, going forward. Having said that, let me come to our quarter results. As we said in the title, we had an exceptionally good quarter. I think if you look at our performance, 82% sales growth, which is clearly also coming from Verso, but nevertheless, it's still a 20% organic growth, which is clearly excellent. Adjusted EBITDA at 19%. It's a very strong performance indeed as well. And I think this is really tribute to the work that the whole team did by continuously price manage and mix manage as the cost, input cost was going up. And I think we have, since we started in quarter three, 2021, we have basically achieved this improvement slightly in front of the wave. And I think as Eva will talk to you about cost development, we think that we are still in a very good position going forward, but clearly times are a little bit normalizing in quarter four and then probably in 2023. If you look at our earnings per share, a record high at 5.42, and excellent cash delivery with more than 80% of EBITDA transferred into cash. Let me go to the bridge on the next slide, where you can see we had a bit of a currency rate effect of 7%. which is only the European and rest of world effect. It doesn't include the US. Pricing was 20% of the growth. 57% was North America, and there we don't have currency comparison, so it's basically our business in North America as it stands to date. And then we have a little bit in minus, which comes from the BISM divestment, which is marginal. But generally speaking, a very good performance. trying to mitigate all the costs. And that you can also see then on the next slide with all-time high profit, Q2, Q3 2021 with a bit of currency effect and pricing excluding pulp, North America. And then you see a big red block, which is basically our net of raw materials and logistics. And that also includes the balance of our pulp sales and buying activities. Cost efficiency, it looks small, but generally speaking, I'm very happy how the company has continued to become more efficient and more cost-conscious. And I just want to remind you this program stops at the end of this year, and one of EVA's key responsibilities will be to set up a new program starting in 2023, which will not look just at cost savings, but which will look particularly at efficiency improvements in our European business going forward. And then finally, you can see in this profit bridge, the maintenance schedule basically had an effect as well. And that brings you to 19% EBITDA for the quarter so far. Good. I think all of you are very interested how we see the outlook. And I saw in some of your initial comments, you have already commented X in quarter, but what's happening next? And I think I just want to remind everyone that I think we are in a very particular situation, which is due to A, the acquisition of Verso, which gives us a dual truck, so to say, or second leg to stand on. and currently Europe and North America in terms of market dynamic and the categories in which we are in are behaving quite differently. And then secondly, I think Bitterroot was always known for its strong portfolio, a lot into the food and drink and the markets and consumer goods, which basically are far more stable segments than, say, the industrial or the consumer luxury areas. So let me walk you through to the next slide and see how we felt this quarter and how do we see the future on those. So food and drink, I think we are all realizing that European is going into an economic downturn. Generally speaking, that means that consumers are not reducing consumption per se, but they're down trading. And all the products we sell in food and drink are generally speaking the same market and it's more a question, does it go more to brand owners, does it go more to retail brands, all these kind of things, but the materials they're using are basically similar or the same. And therefore, we see the food and drinks market relatively stable going forward, and it has already been stable. When you then look at printing and publishing papers, which is our graphic and speciality paper in the US, We actually saw a very positive quarter three, and we do not see any significant changes towards our positive outlook, so we called it stable in the future. And there's a number of reasons for that. In speciality paper, we have a change in the supply side with the closure of a pixel mill. We see still strong demand in speciality paper, and this market generally is growing. at a positive rate also historically, and there's no reason that this will not change. When you look at the graphic paper markets, here we see actually a revival a little bit, and the revival comes mainly from the premium catalogs in which we are involved in, and there's a continuous downward trend in the, I would say, the mass market segments of this market. As we are focusing much more on the premium area, we actually saw very positive trends this year, and we believe that this will also stay stable into 2023. Clearly, with the contraction of the economy, we will see some effects on consumer luxury, but in particular also on the industrial segment. And here it's mainly the container board, as you can imagine, will probably be hit, and also the carton board side on the luxury side might also be subdued for a while. This is entirely normal, and we see both of these segments, consumer, luxury, and industrial, less positive than we saw previously. But it is, as I said, I think overall we're entering in a much more normalized situation. Okay, I think with that, I would like to hand over to Eva, who will take you a little bit through cost and our different segments and this performance in North America before coming back at the end with our key conclusions. Thank you, Eva.