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INTERIM REPORT JANUARY – SEPTEMBER 20172017-10-17 Per Lindberg, CEO and President, and Susanne Lithander, CFO

Q3January – September 2017

BILLERUDKORSNÄS – FIVE YEAR ANNIVERSARY

Stable underlying earnings

Average TSR of 23% per year

for past 5 years

Proven track record of

accretive M&A

Recognised as a leader in

sustainability

0

200

400

600

800

1 000

1 200

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2013 2014 2015 2016 2017

QUARTERLY EBITDA2

1 Growth for comparable units

2 Adjusted fo non-recurring items

10 000

14 000

18 000

22 000

26 000

2013 2014 2015 2016 R12M Sep2017

NET SALESSEKm

SEKm

CAGR1 3%

PRODUCTION DEVELOPMENT

3

2013 2016 20172014 2015

kton/a (12 months rolling)*

2450

2500

2550

2600

2650

2700

2750

2800

2850

2900

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

CAGR 3.3%

*Excluding Tervasaari

SAFETY, STABILITY & PRODUCT QUALITY IN FOCUS TO SUPPORT LONG TERM GROWTH OF THE COMPANYTHREE LARGE CHANGE INITIATIVES UNDER IMPLEMENTATION

Occupational Heath and Safety

Secure Product Quality

Production Stability

A culture based upon health and safety is the foundation for stability Behaviour based safety programme under implementation

A systematic, customer centric, quality programme under implementation TPM based approach to eradicate losses permanently, while keeping customer involved

Increase stability in core processes; pulp, paper/board and maintenance Company specialists to support and increase focus in our cross-mills team

Q3 2017 RESULTS AT A GLANCE

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NET SALES

5 544SEK million

EBITDA

1 051SEK million

38%

18%

36%

8%

SHARE OF SALES

PACKAGING PAPER

Kraft paper

Sack paper

Market pulp

CORRUGATED SOLUTIONS

Fluting

Liner

Managed Packaging

CONSUMER BOARD

Liquid packaging board

Cartonboard

OTHER

19%

MARGIN

3%

GROWTH

Q3 2017 KEY HIGHLIGHTS

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Very strong market and continued high demand across all business areas

EBITDA affected by SEK 35 million for production shutdown in Karlsborg

New organisation to work with availability and quality in production units

Stable earnings in all business areas

Favourable outlook on both short and long term

FINANCIAL DEVELOPMENT

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NET SALESSEK MILLION

8

5478

5213

5357

54395393

5468

56365600

5544

4800

5000

5200

5400

5600

5800

6000

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2016 20172015

+3%

EBITDASEK MILLION

9

1041*

671

1017

859

1037

693

923863

1051

0

200

400

600

800

1000

1200

1400

1600

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2016 20172015

1%

*Q3 2015 shows adjusted EBITDA

OPERATING CASH FLOWSEK MILLION

10

541

360

155

631

696

619

-294

314

-202

-500

0

500

1000

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2016 20172015

RETURN ON CAPITAL EMPLOYEDADJUSTED, ROLLING 12 MONTHS (%)

11

14

13 13 13 13

14

1313 13

0

4

8

12

16

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2016 20172015

Target: >13%

LEVERAGENET DEBT/EBITDA (X)

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1,301,24 1,24

1,321,27

1,081,19

1,351,41

0,00

0,50

1,00

1,50

2,00

2,50

3,00

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2016 20172015

Target: <2.5x

BUSINESS AREAS

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PACKAGING PAPER BUSINESS AREAKRAFT AND SACK PAPER FOR CUSTOMERS WITH TOUGH DEMANDS

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KRAFT PAPER

#1GLOBALLY

SACK PAPER

#2GLOBALLY

SELECTIVE GROWTH

Asset transformation for increased profitability

Development of new business models

Expansion to growing markets

2-4%

CAGR

Packaging for flour, sugar, carrier bags, medical

packaging, building materials, chemicals and more

Growth driven by population growth in emerging

markets, ageing population, increasing

environmental awareness and more

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2 090NET SALES SEK MILLION

394EBITDA SEK MILLION

19%EBITDA MARGIN

Net sales unchanged vs Q3-16Increased prices in local currency but lower production

volumes

EBITDA -11% vs Q3-16Lower production volumes and cost impact from Karlsborg,

but increased paper prices

Improved market for all kraft and sack papers

Kraft and sack paper markets expected to remain solid

with potential to increase prices in local currency

PACKAGING PAPER BUSINESS AREAQ3 DEVELOPMENT

CONSUMER BOARD BUSINESS AREALIQUID PACKAGING BOARD AND CARTONBOARD WITH UNIQUE PROPERTIES

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Packaging for milk, juice, preserved foods, beauty

and healthcare products, confectionary and more

Growth driven by high urbanization rate, change in

consumer behavior and more

VOLUME GROWTH

Attractive market providing growth opportunities

Investments for volume growth

Innovation with customers and brand owners

4-5%

CAGR

LIQUID

PACKAGING BOARD

– AMBIENT PACKAGES

#1GLOBALLY

LIQUID

PACKAGING BOARD

– ALL PACKAGE TYPES

#2GLOBALLY

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2 019NET SALES SEK MILLION

466EBITDA SEK MILLION

23%EBITDA MARGIN

Continued high demand

Net sales +2% vs Q3-16

EBITDA +10% vs Q3-16Increased sales volumes and lower variable costs

Overall volume growth somewhat lower due to

production disturbancesHighest sales volumes of cartonboard since merger of

Billerud and Korsnäs

Expected continued stable order situation with normal

season variations

CONSUMER BOARD BUSINESS AREAQ3 DEVELOPMENT

Strong product portfolio setting market standard

Integrating new business model

Increasing sales to brand owners

2-4%

CAGR

VALUE GROWTH

CORRUGATED SOLUTIONS BUSINESS AREAFLUTING AND LINER ADD VALUE

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Packaging for fruit and vegetables, white goods

and electronics, exclusive drinks and more

Supply chain solutions and packaging

optimisations for brand owners

Growth driven by increasing e-commerce and

fresh food consumption, package differentiation

and changing supply chains

NSSC FLUTING

#1EUROPE

PURE WHITE

LINER

#2EUROPE

COATED WHITE

TOP LINER

#2EUROPE

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1 012NET SALES SEK MILLION

269EBITDA SEK MILLION

27%EBITDA MARGIN

Net sales +11% vs Q3-16Higher sales volumes and improved prices in local

currency

EBITDA +12% vs Q3-16Increased sales supported by increased prices in local

currency and favourable product mix

Strong order books and increased prices in Europe

Managed Packaging ~50% sales growth

Expected continued strong demand for fluting and linerExpansion to new regions

CORRUGATED SOLUTIONS BUSINESS AREAQ3 DEVELOPMENT

OUTLOOK

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SHORT-TERM OUTLOOK

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Demand and order situation are expected to be strong in the fourth quarter

with normal seasonal variances for all business areas.

The Packaging Paper and Corrugated Solutions business areas see

opportunities for local price increases in the next quarter.

Wood costs for Q4 are expected to be unchanged.

Costs for planned maintenance shutdowns in the fourth quarter are

estimated at SEK 120 million.

Additional non-recurring costs at Gruvön of around SEK 30 million for

training and temporary staff are expected to impact the fourth quarter.

2018 OUTLOOKINCLUDING IMPACT FROM TRANSFORMATION PROJECTS

2018

Paper prices in local currency

Raw material cost Impact from increased demand

Pulp pricing

Production capacity overall + ~1% compared to 2017

Capacity PM10 Skärblacka 40 ktonnes

Stock buildup Gruvön - 20 ktonnes

One-off project costs - 150 SEKm

Net exposure market pulp 125 ktonnes

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SKÄRBLACKA AND GRUVÖN PROGRESS AS PLANNEDIMPROVING EFFICIENCY AND SECURING GROWTH

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Investing in MG integrated to pulp

production in Skärblacka, Sweden;

SEK 1.3 billion investment.

New board machine in Gruvön, Sweden

with capacity of approx. 550 000 t/a;

SEK 5.7 billion investment.

Beetham

Karlsborg

Pietarsaari

Tervasaari

Gävle

Frövi

Rockhammar

Skärblacka

Gruvön

1

2

1

2

Production start on

MG machine in

Skärblacka

Production start on

board machine in

Gruvön

Q1

2019 2023

Machine in

Gruvön fully

utilised

Q4

2016

Q2

2016

Q1

2018

1

2

CAPEX 2015-2019IN LINE WITH PREVIOUS GUIDANCE

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CAPEX

1 3001 420

4 300

4 700

1 500

0

1 000

2 000

3 000

4 000

5 000

2015 2016 2017 2018 2019

SEKm

CONTINUED INVESTMENTS IN SOLUTIONS

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Packaging SolutionsReady-to-use packaging

solutions

BillerudKorsnäs sells

ready-made packaging

May use BillerudKorsnäs

material

Examples:

Managed Packaging

Sack Sales

Systems SolutionsProduct solutions including both

materials and machine (and

machine service)

Products using

BillerudKorsnäs material

Examples:

Axello ZAP

Formable Solutions

VenturingMoving further down the packaging

value chain

Three focus areas:

Paper based bottles

Cold chain solutions

Internet of packaging

MANAGED PACKAGING LEADING THE WAYLONG-TERM TARGET OF 25% GROWTH AND EBIT MARGIN OF 5-10%

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Sales

0

100

200

300

400

500

600

700

2014 2015 2016 2017 (12m rolling)

CAGR 29%

SEKm

WE CHALLENGE CONVENTIONAL PACKAGING

FOR A SUSTAINABLE FUTURE

Q&A

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