Continued very strong demand and increasing prices, but

Continued very strong demand and increasing prices, but extraordinary
costs affect margins

CEO Per Lindberg comments on the development during Q2 2010:

“With an operating profit of SEK 201 million for the second quarter of
2010 we now have three consecutive quarters behind us with an operating
margin of 10%. We have continued our efforts to restore prices in local
currency and prices for our packaging paper during the quarter were on
average approximately 6% higher than in the previous quarter in each
sales currency. This work is being given priority since part of these
increases is needed to counteract a strengthened Swedish krona.

During the second quarter a planned maintenance shutdown at our largest
mill was carried out and this shutdown had a substantial effect on
profitability. The shutdown takes place every 18 months and latest
occurred during the fourth quarter of 2008. The shutdown was complicated
by strike action and was more expensive than anticipated. The cost of
the shutdown was approximately SEK 110 million and was reflected in
lower production volumes as well as higher variable and fixed costs.
This means that at first glance the comparison between the first and
second quarter of this year may appear negative for our packaging
segments, in particular for Packaging Boards which had to bear most of
the shutdown costs. This does not apply to the Market Pulp business area
which as a result of price increases for pulp and despite the shutdown
costs can deliver historically very good margins. Market Pulp business
area has to a lesser extent been affected by shutdown costs.

We view this quarter, however, as a step forward for Billerud. We have
very strong demand for all products and we continue to raise prices. We
are also particularly pleased about the recognition our new product
FibreForm® received in China where we received the “Technology
Innovation Award 2010.”

Solna, 22 July 2010
Billerud AB (publ)

 

Per Lindberg
President and CEO

For further information please contact:
Per Lindberg, President and CEO, +46 8 553 335 01 or +46 70 248 15 17
Bertil Carlsén, CFO, +46 8 553 335 07 or +46 73 021 10 92

The information is such that Billerud is obligated to publish under the
Swedish Securities Market Act. Submitted for publication at 10.32 CET on
22 July 2010.
Continued very strong demand and increasing prices, but extraordinary costs affect margins

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