BillerudKorsnäs AB (publ)

Good morning and welcome to this presentation following the publication of our Intervene report for the first quarter 2026. Billerud's President and CEO Ivar Vatne and our CFO André Kress will present and after that we will open up for questions. By that I would like to hand over to Ivar.

Thank you Lena and good morning everyone. And thank you all for listening in to our comments this Tuesday morning. It's been another quarter with twists and turns, and yet again, some unexpected events to navigate through. The heading on the slide is our summary of the quarter, but as you would expect, some nuances between our regions. So let's get into it. And next slide, please. As expected, it's been a tough start of 2026, fighting a challenging market, but we continue to see different realities between our two regions. And there are also some clear positives to comment on. In North America, we record another strong quarter and we continue to be well positioned with a local US production to serve a broad customer base from our Midwest manufacturing footprint. 16% EBITDA margin is solid, but we were hit by some unusually heavy snowfalls and freezing temperatures that forced us to take a couple of days on planned production stop, and it drove our energy and the logistic costs higher than expected. For Region Europe, it was a quarter of incremental price pressure, currency headwind, and loss of emission rights that pushed down the profitability to a level below expectations. And having said that, we have plans in place, and we are taking further action to strengthen the situation going forward. And we are certainly more optimistic about our Q2, and we do expect a profit recovery, but more on that later. One clear positive for our Q1 was the shipment. We managed to grow volume with 9% versus Q4, And that growth came from both region and broad-based across several categories, and is a number we are happy with. A cash conversion for the quarter was solid, and we're delivering well on a cost-saving program, and we are ahead of our plan. Some additional comments on the market sentiment. So next slide, please. So if I start with North America, we continue to meet more stable and solid conditions. Consumption seems to be okay across our core categories, and order books are solid for the foreseeable future. We produce now at approximately 80% operating rate. Another highlight of this is our strategic priority to grow our position within packaging materials, The start of 2026 was encouraging, and it continued to take new positions with both existing and new customers. And Q1 was, as expected, our best sales quarter in that regard. In Europe, the market continues to be difficult, but with some rays of light, we shipped better than expected and was a clear uplift from Q4, in particular on liquid packaging board. Now, we are a bit cautious as our sense of this strong start is partly linked to three buckets. A, customers building up some inventory after a slow end of 25. B, supply chain uncertainty in the wake of the Middle East conflict. And C, some customers ordering a bit extra ahead of announced price adjustments from Q2 and onwards. For the Asia and the rest of the world, we see a mixed picture. It's mostly weak, but we do see some encouraging sign on the liquid packaging board where we are picking up some signals that in particular demand in China is better than expected. Also in the industrial in the rest of the world has strengthened a bit during the quarter, in particular on SAC. So with that, I hand it over to André.

Thank you, Ivar, and good morning, everyone. So our currency neutral sales are down 5% versus a year ago, and that was primarily driven by the price decline in region Europe. In North America, the pricing was flat versus a year ago. And clearly, the strengthening of Swedish krona since last year has had a significant impact on our sales and also profit, which I will get back to. Volume-wise, they were marginally down with 1% in both regions. Next slide, please. The profit for the group declined significantly versus last year, primarily driven by region Europe. Foreign exchange and pricing have been the two big drivers for the decline. In addition, loss of emission rights and also more extensive maintenance shutdown schedule Q1 this year, were other two major building blocks. Since we have decline in input costs in the quarter, we are also having a negative inventory revaluation impact, while last year that impact was positive. And hence, year over year, it's a significant item in our bridge. Now, on the positive side, our cost-saving program is delivering ahead of plan, and we have significant decline in fixed costs versus a year ago. Now, let's move over to the regions. Next slide, please. Despite the strong sequential volume uplift versus the fourth quarter, the profit for region Europe declined. Lower pricing together with loss of emission rights And also stronger Swedish grown-up were the main drivers behind the profit decline compared to Q4. We did see pulpwood costs to come down, although it was slightly slower than expected due to slower inventory turnover of the pulpwood. And we do expect the decline on pulpwood costs to continue also into the second quarter. And that will, of course, be a major cost relief for the region. Now, to restore the profitability, we have announced price increases on second craft grades and also on container board. And we expect the positive pricing impact to start materializing in quarter two. For other categories, we have implemented surcharges for increased logistical costs due to the situation in the Middle East. Moving over to region North America. Next slide, please. Profitability for region Europe declined also versus quarter four, but that was entirely driven by higher input costs. As Ivar mentioned, we did experience some challenging weather conditions with both extreme cold and also heavy snowstorm, which impacted our energy and logistics costs. And we had to take two days of production downtime during the quarter. We certainly do not expect the same extreme weather conditions in quarter two, and the region should be back to strong underlying profitability. On the back of solid demand and, to some extent, cost inflation in the region, we have announced broad-based price increases for our paper grades. The impact for quarter two will be quite limited but we should see full impact materializing in quarter three. And finally, our North American team is continuing to ramp up sales of paper board grades. And we have also now started to provide turnover figure for carton board and container board sales in our quarterly report. Next slide, please. Now, in terms of the input costs, both regions had somewhat higher input costs versus our ingoing expectations for the first quarter. For North America, again, the weather conditions resulted in approximately 40 million higher input costs compared to quarter four. For Europe, we did see costs to come down on pulpwood, but that was partly offset by higher electricity costs. And all in all, the costs were down around 60 million compared to quarter four for region Europe. The earlier announced price list changes on pulpwood are materializing. And just recently, there was a wave of price list decreases, which were particular to the storm areas in mid Sweden. Next slide, please. Now, in terms of cost development for the second quarter, we do expect overall costs to come down, but there are quite a lot moving pieces from where we stand. For region Europe, we should see costs to continue to come down, both from declining pulpwood prices and also seasonally lower energy costs. We do, however, expect cost inflation to start materialize on chemicals and logistics due to the situation in the Middle East. At this point, all in all, we expect a sequential cost relief over 150 million for Europe compared to Core 1. For North America, the overall input cost should remain quite flat with somewhat higher fiber and chemical costs expected to be offset by seasonally lower energy costs. And our U.S. operations are mostly exposed to natural gas prices, and they have been relatively stable in U.S. despite the situation in Middle East. Next slide, please. And continuing on the topic of the Middle East conflict, it didn't have any material impact on our Q1 results. We have managed the sales deliveries to our customers well, and we do not have any significant exposure through sales to the region. With that said, indirectly, we do see input costs to start coming up, and that is primarily on chemicals and logistics through higher oil and gas prices. And we do expect that to be a factor in 2026. Our plan, is to mitigate the cost inflation through pricing. And we have already announced broad-based price increases in both of our regions and plan to do further increases to compensate for the higher costs. And with that, I hand it back to you, Ivar.