Strong development for Billerud’s packaging paper in terms of both earnings and new solutions

October 29, 2010 by timbercommunity

Paper manufacturer Billerud surpassed both last year's result and analysts' expectations during the third quarter of this year. Net sales amounted to SEK 6 549 million (5 700), an increase of 15% and profit for the period amounted to SEK 480 million (5). The order situation remains good or very good within most of Billerud's packaging paper areas, which should enable a continued positive development
within Billerud's segments for packaging paper and packaging paper solutions. The strong development for Billerud's main area, packaging paper, led to an improvement in operating profit to SEK 276 million for the third quarter.

Interim report January-September 2010

* Earnings per share amounted to SEK 4.66 (0.07).
* Operating profit amounted to SEK 711 million (69), corresponding to a
margin of 11% (1).

* Further price increases for some of Billerud’s packaging paper products
have been announced for the fourth quarter.
* Lower market prices and a weaker USD will have a negative impact on the
operating margin for the Market Pulp business area.

CEO Per Lindberg comments on the development during Q3 2010:

“We are very pleased with the results for the third quarter as well as the
underlying earnings for all our business areas.

The strong development for Billerud’s main area, packaging paper, led to an
improvement in operating profit to SEK 276 million for the third quarter. This
result corresponded to an operating margin of 12% compared with the 11% average
over the last three quarters. This improvement is due to good demand and
continued efforts to improve margins and value creating packaging paper
solutions.

We have just launched our first product where we combine two renewable
materials; paper and bioplastic. The result is an effective and climate-smart
sack solution with a moisture barrier. We can see a number of opportunities
ahead of us where our close dialogue with end customers, combined with our
expertise within packaging paper and bioplastics, will lead to new packaging
solutions with increased value creation for our customers. This applies in
particular to customers who set a high value on packaging their products in
climate-smart packaging made from renewable materials.
Following our receipt of the “Technology Innovation Award 2010” in China for our
FibreForm® product in the previous quarter,

the number of customer enquiries and development cooperations relating to
FibreForm® has further increased. We feel strengthened by the fact that our

long-term focus on development work close to the customer, and innovative
product development, will give us future opportunities for a continued positive
margin

development within packaging paper.”