• Q2 21A profitability continued to strengthen: Revenue increased by 2% y/y (-4% q/q) on the back of strong cartonboard, sack and kraft paper demand. This supported adjusted EBITDA margin expansion of 100bps y/y to 13.6% but down 181bps q/q due planned and unplanned maintenance impacting its containerboard production. ROCE remains weak at 4%.  
  • Board segment (56% of group sales liquid packaging board, cartonboard and containerboard): Adjusted EBITDA increased by 30% y/y and 6% q/q, with the EBITDA margin expanding to 20.4%. Volume growth was driven by cartonboard, while containerboard volumes were lower due to a maintenance shutdown at Gruvön.
  • Paper segment (32% of group sales: sack paper and kraft paper): Adjusted EBITDA increased by 18% y/y and 45% q/q, with the EBITDA margin expanding to 18.7%. The segment benefitted from higher sales volumes for both sack paper and kraft paper as well successful price increases. They expect further price increases of 3-4% to be realised from Q3 onwards
  • BillerudKorsnäs introduces Pure DecorX™: This is a new generation of coated white top kraft liner with a 3-ply construction, light-weighting opportunities, high runnability in converting machines and enhanced packaging performance. It yields excellent print results which makes it very competitive in applications such as shelf ready packaging, displays and packaging of food, beverage, and premium consumer goods.
  • Bullish outlook: YTD, BILL have experienced strong demand and good sales momentum for all their product segments. The company expects strong market conditions to continue and are implementing additional price increases, which will help counter cost pressures from chemicals, energy, pulp and logistics. In the EU, the EU Directive on Single Use Plastic remains a key underpin for structural growth. Looking forward, the company sees strong growth opportunities for cartonboard and containerboard and view themselves more as a European board producer in the LT. They are starting to investigate further capacity additions post 2024.

Mondi read-though: Flexible Packaging Segment

  • BillerudKorsnäs sales mix: 15% containerboard; 31% sack paper and 10% kraft paper.
  • Kraft paper is used primarily in packaging for medical equipment and food packaging aimed at users that require very high standards of purity, printability, sterilisation, flexibility, and strength.
  • Sack paper has high strength, which is crucial for competitiveness in this market. The sack paper can be filled without splitting or creating dust, which not only protects the content but also contributes to a clean and healthy work environment.
  • Mondi: Mondi produced 1.145mt of kraft paper and 5.4bn bags in FY 20A. MNP’s Flexible Packaging segment last reported a 19.5% EBITDA margin and 14.5% ROCE vs. BILL’s 11% and 3%, respectively.

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