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1. Company Snapshot

1.a. Company Description

BillerudKorsnäs AB (publ) provides fiber based packaging materials and solutions in Sweden and internationally.It operates through three segments: Product area Board, Product area Paper, and Solutions & Other.The company offers kraft papers for medical equipment and food packaging sectors; and sack papers for making sacks.


It also provides packaging solutions and systems for brand owners; and manufactures and sells liquid packaging and carton boards, as well as fluting and liners.The company serves packaging manufacturers, brand owners, and large retail and supermarket chains.BillerudKorsnäs AB (publ)was incorporated in 1926 and is headquartered in Solna, Sweden.

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1.b. Last Insights on BILL

BillerudKorsnäs AB's recent performance was negatively driven by the company's weak Q3 2023 earnings, which were impacted by lower prices and higher raw material costs. The company's adjusted EBITDA margin declined to 12.1% from 14.1% in the same period last year. Additionally, the ongoing market volatility and economic uncertainty have led to a decline in demand for packaging materials, further pressuring the company's sales. The company's efforts to reduce costs and improve efficiency through share buybacks and restructuring initiatives may help mitigate these challenges.

1.c. Company Highlights

2. Transcript Summary

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.73%)

6. Segments

Region Europe

Expected Growth: 2.5%

In Europe, BillerudKorsnäs AB (publ) achieves 2.5% growth driven by increasing demand for sustainable packaging, expansion in e-commerce, and growing need for paper-based solutions. Additionally, the region's focus on environmental sustainability and circular economy supports the company's innovative products and services.

Region North America

Expected Growth: 3.5%

In North America, BillerudKorsnäs AB (publ) achieves 3.5% growth driven by increasing demand for sustainable packaging, expansion in e-commerce, and growing need for paper-based solutions in the food and beverage industry. Additionally, the region's focus on environmental sustainability and regulations favoring eco-friendly products contribute to the company's growth.

Solutions & Other

Expected Growth: 2.0%

The 2.0% growth in Solutions & Other segment of BillerudKorsnäs AB (publ) is driven by increasing demand for sustainable packaging solutions, expansion into new markets, and strategic partnerships. Additionally, the company's focus on innovation and R&D investments in paper-based packaging solutions also contribute to the growth.

Currency Hedging etc.

Expected Growth: 1.5%

BillerudKorsnäs AB (publ) achieves 1.5% growth driven by effective currency hedging strategies, mitigating exchange rate risks. Strong demand for sustainable packaging solutions, increasing e-commerce sales, and strategic acquisitions also contribute to growth. Additionally, operational efficiency improvements and cost savings initiatives support the company's expansion.

7. Detailed Products

Paperboard

A dense and stiff paperboard used for packaging of premium products such as cosmetics, chocolates, and pharmaceuticals.

Cartonboard

A high-quality cartonboard used for packaging of food, beverages, and other consumer goods.

Kraft Paper

A strong and durable kraft paper used for packaging of heavy-duty items such as furniture and machinery.

Fluting

A lightweight and strong fluting used as a middle layer in corrugated packaging.

Sack Paper

A strong and durable sack paper used for packaging of cement, chemicals, and other industrial products.

Medical Papers

A range of medical papers used for medical packaging, diagnosis, and treatment.

8. BillerudKorsnäs AB (publ)'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for BillerudKorsnäs AB (publ) is medium due to the availability of alternative packaging materials, such as plastic and glass. However, the company's focus on sustainable packaging solutions and its strong brand reputation help to mitigate this threat.

Bargaining Power Of Customers

The bargaining power of customers is low due to the company's strong relationships with its customers and its ability to provide customized packaging solutions that meet their specific needs.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium due to the company's dependence on a few large suppliers for raw materials. However, the company's long-term contracts and strategic partnerships help to mitigate this risk.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the packaging industry, including the need for significant capital investment and the complexity of the manufacturing process.

Intensity Of Rivalry

The intensity of rivalry is high due to the competitive nature of the packaging industry, with many established players competing for market share. However, BillerudKorsnäs AB (publ) differentiates itself through its focus on sustainability and innovation.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 21.55%
Debt Cost 3.95%
Equity Weight 78.45%
Equity Cost 6.07%
WACC 5.61%
Leverage 27.46%

11. Quality Control: BillerudKorsnäs AB (publ) passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Navigator

A-Score: 6.5/10

Value: 6.4

Growth: 4.8

Quality: 5.7

Yield: 10.0

Momentum: 2.5

Volatility: 9.7

1-Year Total Return ->

Stock-Card
BillerudKorsnäs

A-Score: 4.8/10

Value: 7.9

Growth: 4.9

Quality: 5.0

Yield: 5.6

Momentum: 0.5

Volatility: 5.0

1-Year Total Return ->

Stock-Card
Holmen

A-Score: 4.6/10

Value: 4.1

Growth: 4.6

Quality: 6.2

Yield: 3.1

Momentum: 1.0

Volatility: 8.7

1-Year Total Return ->

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Mondi

A-Score: 4.5/10

Value: 6.1

Growth: 2.0

Quality: 2.8

Yield: 10.0

Momentum: 1.0

Volatility: 5.0

1-Year Total Return ->

Stock-Card
SCA

A-Score: 4.2/10

Value: 3.6

Growth: 1.8

Quality: 6.6

Yield: 2.5

Momentum: 2.0

Volatility: 8.7

1-Year Total Return ->

Stock-Card
Stora Enso

A-Score: 3.7/10

Value: 8.3

Growth: 1.3

Quality: 2.1

Yield: 6.2

Momentum: 1.5

Volatility: 3.0

1-Year Total Return ->

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

93.1$

Current Price

93.1$

Potential

-0.00%

Expected Cash-Flows