1

INTERIM REPORT JANUARY-JUNE 2011

Per Lindberg, President and CEOBertil Carlsén, CFO21 July, 2011

2

INVESTMENT IN PACCESS PACKAGING

• Investment corresponding to 30% in PACCESS Packaging» ~60 employees and sales of MUSD ~27

• Core expertise in developing packaging for production and delivery in Asia » Customers primarily multinational brand

owners

• Create a strong platform for future growth in Asia» Access to customer and supplier base

3

AGENDA

• Highlights

• Development by Business Area

• Financials

• Outlook

4

HIGHLIGHTS IN Q2 2011

• Strong Q2 result» EBIT of MSEK 275, margin 12%» The lower EBIT vs. Q1 mainly corresponds

to the periodic maintenance shutdown in Skärblacka (MSEK 56)

• Strong underlying earnings for packaging paper» Order situation remained good, although at

a lower and more normal level

» Over 3% increase in local prices (Q2 vs. Q1)

• Price increases compensated for higher costs and a stronger SEK

0

50

100

150

200

250

300

Actual Actual Adjusted*

Jan-Mar Apr-Jun 2011

EB

IT, M

SEK

0%

2%

4%

6%

8%

10%

12%

14%

EB

IT m

argi

n, %

0

50

100

150

200

250

300

350

Actual Actual Adjusted*

Jan-Mar Apr-Jun 2011

EBIT

, MSE

K

0%

2%

4%

6%

8%

10%

12%

14%

EBIT

mar

gin,

%

CONTINUED STRONG RESULTS

Billerud Group Packaging Paper

*Excluding cost for the periodic maintenance shutdown at Skärblacka.5

EBIT margin

EBIT

6

PACKAGING & SPECIALITY PAPERKraft & Sack Paper

PACKAGING BOARDSS/C Fluting, Liner, Liquid Board

MARKET PULPNordic Bleached Softwood Kraft Pulp

BUSINESS AREAS & SEGMENTS

Note: Graph shows sales breakdown per business area for January-June 2011.

7

PACKAGING & SPECIALITY PAPER Market situation in Q2 2011

• Order situation for sack and kraft paper returned to a more normal level

• Stock levels were reduced after being built up in Q1

• Increased price level in local currency for all products vs. Q1

Building & construction

Food

Consumer

8

PACKAGING & SPECIALITY PAPER Financials – Q2 2011 vs. Q1 2011

• Operating profit down by MSEK 38

• Increased fixed costs and lower sales volumes due to maintenance shutdown

» Carries ~70% of a Skärblacka shutdown cost

• Improved prices

Q2 2011 Q1 2011 Q2 2010 FY 2010

Net sales, MSEK 1,079 1,217 1,009 4,166

Operating profit, MSEK 102 140 84 417

Operating margin, % 9 12 8 10

0

20

40

60

80

100

120

140

160

Q2 Q3 Q4 Q1 Q2

EB

IT, M

SE

K

20112010

9

PACKAGING BOARDS Market situation in Q2 2011

• Order situation remained good but with some seasonal decline

• Increased price level in local currency for all products vs. Q1

10

PACKAGING BOARDS Financials – Q2 2011 vs. Q1 2011

• Operating profit down by MSEK 3• Improved prices • Higher fixed costs and lower sales

volumes, partly due to maintenance shutdown

• Q2 is generally seasonally weaker than Q1

Q2 2011 Q1 2011 Q2 2010 FY 2010

Net sales, MSEK 704 728 518 2,428

Operating profit, MSEK 94 97 -14 271

Operating margin, % 13 13 -3 11

-20

0

20

40

60

80

100

120

140

Q2 Q3 Q4 Q1 Q2

EB

IT, M

SE

K

20112010

11

MARKET PULP Market situation in Q2 2011

• Demand for NBSK remained good

• ~45 USD/tonne price increase in Europe

• Two price increase were announced for Europe

» 1,010 USD/tonne for April

» 1,040 USD/tonne for June

• The June price increase was not fully implemented but stayed at ~1,025 USD/tonne

12

MARKET PULP Financials – Q2 2011 vs. Q1 2011

• Operating profit down by MSEK 18

• Improved prices in local currency compensated for lower USD rate

• Lower sales and product volumes as well as higher fixed costs, partly due to maintenance shutdown

Q2 2011 Q1 2011 Q2 2010 FY 2010

Net sales, MSEK 435 436 445 1,731

Operating profit, MSEK 20 38 100 276

Operating margin, % 5 9 22 16

-40

-20

0

20

40

60

80

100

120

Q2 Q3 Q4 Q1 Q2

EB

IT, M

SE

K

20112010

13

Q2 IN SUM

• Strong Q2 result given maintenance shutdown

» EBIT margin of 12%

» Return on equity of 19%

• Strong underlying earnings for packaging paper

14

FINANCIALS

15

QUARTERLY KEY FIGURES

Q2 2011 Q1 2011 Q2 2010

Sales volume (ktonnes) 335 369 309

Net sales, MSEK 2,383 2,547 2,108

Operating profit, MSEK 275 332 201

Operating margin 12% 13% 10%

Profit/share, SEK 1.88 2.28 1.30

Net debt/equity ratio 0.06 0.05 0.21

16

EBIT BRIDGE Q2 2011 vs. Q1 2011

* Includes product mix.

275

332

-83

+81-1 -5

-51+2

0

50

100

150

200

250

300

350

EBIT Q1 2011

Sales &productionvolumes*

Selling prices(in respective

salescurrency)

Effects ofexchange ratefluctuations,incl. hedging

Change invariable costs

Change infixed costs

Change indepreciation

EBIT Q2 2011

MS

EK

17

JANUARY-JUNE KEY FIGURES

Jan-Jun 2011 Jan-Jun 2010 vs. 2010

Sales volume (ktonnes) 704 652 +8%

Net sales, MSEK 4,930 4,298 +15%

Operating profit, MSEK 607 435 +40%

Operating margin 12% 10% +2 p.p.

Profit/share, SEK 4.16 2.82 +48%

Net debt/equity ratio 0.06 0.21 +0.15

18

1) Minus equals increase in net debt

SEASONALITY RELATED TO PERIODIC SHUTDOWNS

Estimated shutdown cost

Estimated breakdown of shutdown cost by business area

Planned date of shutdown

Mill MSEK PSP PB MP 2011Gruvön ~100 ~30% ~60% ~10% Q4Karlsborg ~40 ~50% 0% ~50% Q3Skärblacka ~60 ~70% ~15% ~15% Q2

-2%

0%

2%

4%

6%

8%

10%

12%

14%

FY 06 FY 07 FY 08 FY 09 FY 10

EB

IT m

argi

n, ro

lling

12 m

onth

s (%

)

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FINANCIAL TARGETS MET 4 CONSECUTIVE QUARTERS

Financial target

INCREASED PRODUCTIVITYFo

cus

Process efficiency

Customer-focused development

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

Q1 05 Q1 06 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11

Qua

rterly

net

sal

es p

er e

mpl

oyee

, MS

EK

21

WORKING CAPITAL KEY RATIOSDSO Overdue WC as % of quarterly sales

0

10

20

30

40

50

60

70

0901

3109

0430

0907

3109

1031

1001

3110

0430

1007

3110

1031

1101

3111

0430

DS

O d

ays

0,0

1,0

2,0

3,0

4,0

5,0

6,0

0901

3109

0531

0909

3010

0131

1005

3110

0930

1101

3111

0531

% o

f tot

al re

ceiv

able

s

0%

10%

20%

30%

40%

50%

60%

70%

0903

0906

0909

0912

1003

1006

1009

1012

1103

1106

Wor

king

cap

ital (

excl

. IAS

)/qua

rtely

net

turn

over

22

1) Minus equals increase in net debt

CASH FLOW

MSEK Q2 2011 Jan-Jun 2011 Jan-Jun 2010Operating surplus, etc 421 902 625

Change in working capital, etc. 57 -244 -99

Net financial items, taxes, etc. -10 -191 -58

Cash flow from operating activities 468 467 468Current net investments -129 -211 -137

Operating cash flow 339 256 331Dividend -361 -361 -52

Other items, not affecting cash flow -1 -7 -4

Change in net debt 1) -23 -112 275

23

8090

100110120130140150160

2004 Q32005

Q22006

Q12007

Q42007

Q32008

Q22009

Q12010

Q42010

MARKET PRICES AFFECTING RESULT

550600650700750800850900950

1,0001,050

2004 Q32005

Q22006

Q12007

Q42007

Q32008

Q22009

Q12010

Q42010

9497

100103106109112115118

2004 Q3 2005

Q22006

Q12007

Q42007

Q32008

Q22009

Q12010

Q42010

80

120

160

200

240

280

2004 Q32005

Q22006

Q12007

Q42007

Q32008

Q22009

Q12010

Q42010

Electricity index (Sweden*) Wood price index

Market Pulp (USD/t) TCW index*Source: Nordpool. *Price area Sweden

Source: Riksbanken *Total Competitiveness Weights Index

Source: Billerud

Note: Average price for the quarter

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EASENED SEK STRENGTH

Average rate Q2 2011

Average rate Q1 2011

Spot rate 18 July 2011

Q2 2011 vs. Q1 2011

18 July 2011 vs. Q2 2011

EUR 9.02 8.87 9.25 +2% +3%

USD 6.26 6.48 6.59 -3% +5%

GBP 10.22 10.39 10.62 -2% +4%

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CURRENCY SITUATION

Jul-Sep 2011

Oct-Dec 2011

Jan-Mar 2012

Apr-Jun 2012

Total 12 months

Average hedged currency

rates (hedged net

flows)

Average hedged currency

rates (hedged net

flows)

Average hedged currency

rates (hedged net

flows)

Average hedged currency

rates (hedged net

flows)

Average hedged currency

rates (hedged net

flows)

9.12 9.33 9.43 9.21 9.25

(86%) (61%) (46%) (11%) (51%)

7.06 6.66 6.57 6.51 6.85

(82%) (57%) (22%) (10%) (43%)

10.65 10.64 10.64 10.51 10.64

(83%) (56%) (20%) (10%) (42%)

• Profit effect of net flow hedging MSEK 52 for Q2 2011 (29) and MSEK 151 for Jan-Jun 2011 (146)

• Market value of outstanding contracts not relating to accounts receivables was MSEK 49 (as of 30/6-11)

• Hedge level 12 months forward:

Note: Data in table and graph are as of 30 June 2011.

42%

43%

51%

GBP

USD

EUR

26

OUTLOOK

27

OUTLOOK FY 2011

• The order situation at the start of the third quarter remains good and at normal levels

• Additional price increases have not been announced

• Continued stable development expected in the third quarter

• Unease in the financial market and its effect on the business cycle make development in the subsequent period somewhat more uncertain

28

Q&A