Annual and
sustainability report

Summarised online version

For 2017, financial and non-financial information is presented in a joint annual and sustainability report, reflecting Billerudkorsnäs’ mission – to challenge conventional packaging for a sustainable future. The online version is a summary version of the annual report.

We challenge conventions for a sustainable future

BillerudKorsnäs’ mission “We challenge conventional packaging for a sustainable future” clearly sets out why we exist and how we view our role in society. The Group offers innovative and sustainable packaging materials and solutions, and challenges existing business models. This creates value for customers and owners.

Challenging the conventional and thinking outside the box also creates value for wider society and contributes towards sustainable development for future generations. Particularly because it also means that we constantly challenge ourselves to develop and to strengthen our positive contribution. This clear compass gives meaning to everything we do at BillerudKorsnäs. We see no contradiction between our mission, purpose and high sustainability ambitions, and profitable growth. With BillerudKorsnäs’ innovative and sustainable packaging offer for the growing and increasingly conscious consumer market, profitable growth will become a prerequisite for, and a result of, allowing our mission to guide us.


Global megatrends such as urbanisation and e-commerce are driving long-term demand for packaging materials

Growing awareness of sustainability is creating increased demand for primary fibre-based packaging materials


per year is the expected growth in the global packaging market


of BillerudKorsnäs’ sales relate to the growing consumer market



We are number one or two in the markets in our niches, such as kraft paper, sack paper, liquid packaging board and cartonboard.

Long history of award-winning packaging innovations



is the average yearly total shareholder return over the past five years


billion SEK being invested in Skärblacka


billion SEK being invested in Gruvön

550 000

tonnes is the capacity of the new board machine in Gruvön


Chapter 1

2017 in brief

”After an intense initial period as President and CEO, I have further strengthened my conviction that we are well equipped for the future. BillerudKorsnäs has seriously challenged conventional packaging and has achieved a unique and strong position in a rapidly growing market in which demand is greater than supply.”

Petra Einarsson, President and CEO

Read full CEO statement

Management by objectives for long-term value creation

To support BillerudKorsnäs’ target for profitable growth and a good return for shareholders, the company has established five financial targets, as well as a number of sustainability targets within its respective commitments.

Financial targets


Growth target

Long-term target for growth of 3–4% per year.

Target: 3-4%

The target was achieved due to strong demand, higher selling prices and a positive currency impact.

1 For comparable units

EBITDA margin

The EBITDA margin should exceed 17%.

Target: > 17%

The target was achieved for the full year 2017. The results for 2015 were affected by the capital gain from the divestment of Latgran.


Return on capital employed

Return on capital employed (ROCE) should exceed 13%.

Target: > 13%

Excluding investment-related costs affecting comparability (note 6), the target was achieved both 2017 and 2016. The results for 2015 were affected by the capital gain from the divestment of Latgran.


Interest-bearing net debt/EBITDA

Interest-bearing net debt in relation to EBITDA should be less than a multiple of 2.5.

Target: < 2.5

Despite higher interest-bearing net debt, the outcome is well below the target level.


Dividend policy

The dividend should amount to 50% of net profit.

Target: 50%

The Board’s proposed dividend of SEK 4.30 per share for 2017 entails fulfilment of the dividend target.

Sustainability targets

152 no.

Certified wood raw materials

No. of group-certified forest owners in BillerudKorsnäs’ group certificates for FSC® and PEFCTM.

Target: 140 no.

The target was reached. Internal development of working methods for timber purchasers contributed towards the result.


Workplace safety

Work-related accidents with sick leave. No./100 employees.

Target: < 1.0

The target was not met, but the number of work-related accidents fell compared to 2016 and is approaching the target.


Female employees

Proportion of female employees, %

Target: > 21.5%

The target was met and the gender balance was improved compared with 2016.


High level of innovation for products

Proportion of sales accounted for by new products, %.

Target: > 15%

The target was not reached due to postponed product launches.


Energy efficiency

Energy consumption. MWh/tonne product, net

Target: 5.31

The target was not reached due to certain production disruptions during the year.

1 324

Work experience through internships and occupational introduction.


Target: > 1 500

The targets was not reched and the number of internships decreased compared to 2016.

Chapter 2

Conditions and strategies

Stakeholder dialogue

Dialogue that helps us set the right priorities

BillerudKorsnäs is surrounded by a number of stakeholders that have an impact on and are affected by our operations. A transparent and responsive dialogue allows us to understand their expectations and needs, in order to ensure that BillerudKorsnäs develops in the desired direction.

Moving up the value chain

BillerudKorsnäs’ broad offer of innovative and sustainable packaging and solutions, means there is good potential for continuing to generate profitable growth. This can be achieved through growth in existing segments and geographic markets. Another important element relates to developing new business models and progressing along the value chain. Our continued focus on total solutions in Asia, for example, will also contribute to the introduction of more sustainable materials there in the long term.

The global packaging market as a whole, including other materials such as plastic, is growing by 2.9% per year, which is faster than primary fibre-based products.

Strategic platform

Strategy for sustainable solutions and pro table growth

The mission – to challenge conventional packaging for a sustainable future – describes the purpose of BillerudKorsnäs’ business. Profitable growth is a crucial factor in challenging less sustainable packaging materials and solutions over time. In order to deliver profitable growth of 3–4%, goal-oriented and intensive work is being undertaken in four strategic areas: position, innovation, sustainability and efficiency. Maintaining a customer focus at all times, BillerudKorsnäs’ 4 400 employees are the people driving the change that is needed to realise the strategy and achieve our ultimate purpose – a sustainable future.

Innovation for greater customer value and profitable growth

Structured innovation work with clear priorities forms the basis for BillerudKorsnäs’ investments in research and development. The innovation work is also a catalyst for the development of the Group’s production units.

Chapter 3


Sustainability is a business opportunity of our time

Sustainability is a natural part of BillerudKorsnäs’ core business and strategy. Sustainability is also a competitive advantage that is growing in importance, making it a significant driver of profitable growth.

Three focus areas – six commitments

Ambitious sustainability targets that drive development

BillerudKorsnäs’ sustainability work is all about taking responsibility through the entire value chain, creating greater customer value and contributing to the transition to a sustainable and bio-based society. Linked to these three focus areas there are a number of concrete and goal-oriented commitments on active sustainability work, supported by a transparent approach and a clear management structure.

Show all sustainability targets

UN Sustainable Development Goals

The 17 Sustainable Development Goals (SDGs) inform countries’ commitments to establish a clear plan for the work that needs to be done by 2030, in order to achieve long-term sustainable development.

Rapidly growing awareness that a transition to more sustainable use of resources must take place will make completely new demands of the packaging industry. The SDGs that BillerudKorsnäs has the greatest opportunity to influence are SDGs 8, 12, 13, 14 and 15, SDGs that can also be linked to existing activities and targets within BillerudKorsnäs.

Responsibility and influence throughout the value chain

With products based on renewable material, BillerudKorsnäs has an opportunity to influence developments throughout the value chain towards reduced dependence on fossil fuels and a transition to a bio-based society.

Value chain

Circular economy

In a perfect circular economy, all the resources are used and nothing goes to waste. Inspired by the natural ecocycle, one person’s waste becomes another person’s raw material. In several locations in Sweden, BillerudKorsnäs’ surplus heat is used in the local district heating network, an example of a smart circular solution.

Read more

Chapter 4

Facts about BillerudKorsnäs

BillerudKorsnäs – strongly positionedin a growing market

BillerudKorsnäs was formed on 29 November 2012 with the merger of Billerud AB and Korsnäs AB. Since the merger, the Group has consolidated its position as a leading and innovative player in the global packaging industry. BillerudKorsnäs operates in three business areas that offer innovative packaging solutions and sustainable packaging materials made from primary fibre.

Net sales, SEK bn 22.3
EBITDA, SEK bn 3.8
Average no. of employees, approx. 4 400

Net sales by business area, %

EBITDA1split by business area, %

1EBITDA split for other units was -9.

Net sales by region, %

Net sales by market segment, %

Efficient production units

Stable production produces high quality in deliveries to customers. BillerudKorsnäs is investing in increasing and securing availability of the Group’s combined production capacity.

BillerudKorsnäs’ production units have extensive experience of paper and board manufacture. Cross-functional teams work continuously to improve processes and improve efficiency throughout the value chain. This work is carried out in parallel with identifying new opportunities for paper and board packaging and solutions for customers. Since 2013 BillerudKorsnäs has, over and above ongoing investments, invested SEK 10.3 billion in its production capacity and has improved efficiency, quality and sustainability performance. Two major projects, a new board machine in Gruvön and further development of MG paper production in Skärblacka, were approved in 2016. Their implementation involves an investment of approx. SEK 8.3 billion. These investments will ensure that BillerudKorsnäs is able to provide existing and future customers with sustainable packaging materials and solutions of the highest quality. The new machines will begin production in spring 2018 for Skärblacka and spring 2019 for Gruvön.

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BillerudKorsnäs shares

BillerudKorsnäs shares have been publicly listed since 20 November 2001 and are traded on the Large Cap list of Nasdaq Stockholm. The share ticker symbol is BILL. At 31 December 2017, the share capital totalled SEK 1 537 642 792, represented by 208 219 834 shares. The number of shares on the market totalled 206 956 668. Each share on the market entitles its holder to an equal right in the Company’s earnings and capital.

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Quarterly data and Five-year summary

Business areas

BA overview

Packaging Paper

Kraft and sack paper for a global growth market

Packaging Paper1 offers premium-quality kraft and sack paper, plus smart solutions for customers in the industrial, medical equipment and consumer segments.

Growth strategy: Selective growth

Sustainable and profitable growth in chosen segments, primarily dry foods and medical applications, plus the construction industry in growth markets.

Focus 2018

  • Continued growth and increased presence in growth markets.
  • Optimise the supply chain – customers, products and segments.
  • Create business opportunities by continuing to replace superfluous plastic.
  • Harness market potential for paper-based cement sacks.
Selective growth 2-4% (Growth target, year)
Net sales SEKm 8 529
EBITDA margin 18%

Net sales by market segment, %

Net sales by region, %

Kraft paper ~ 40% of Packaging Paper’s sales volume

Key applications:

  • Flour, sugar, grain, etc.
  • Carrier bags
  • Flexible packaging
  • Formable packaging
  • Medical packaging
  • Steel interleaving


  • The market for food packaging has grown by around 1% per year since 2012.2
  • Growth is forecast at around 2.7% per year up until 2022, with the highest rate in the Middle East, Africa and Asia.2


  • Population growth in growth markets and an ageing population
  • Political initiatives to reduce the use of plastics, such as the EU Directive on packaging and packaging waste to reduce the consumption of lightweight plastic carrier bags
  • Increased awareness of sustainability, not least among consumers

BillerudKorsnäs' position

Leading producer of strong, high-quality kraft paper from primary fibre in Europe.3


The primary competition comes from plastic packaging solutions.

Other major manufacturers

Mondi and many of Europe’s speciality paper manufacturers.

Sack paper ~ 30% of Packaging Paper’s sales volume

Key applications

  • Building materials
  • Industrial minerals
  • Chemicals
  • Food
  • Animal feed


Global demand for cement is expected to grow by around 4.6% per year up until 2022.4 The greatest growth is expected in regions where cement products are supplied primarily in paper and plastic sacks.


Brown sack paper
  • Major investments in infrastructure and housing, primarily in growth markets outside Europe.
  • Greater awareness of sack paper’s advantages (no dust, renewable production source) compared with plastic.
White sack paper
  • Self-build and renovation trend in the consumer market, primarily in Europe.
  • More advanced product mixes for home renovations require good print surfaces for information and images, for example for the statutory warning texts that need to appear on the packaging.

BillerudKorsnäs' position

Global leader in high-porosity sack paper from primary fibre.


Mainly sack solutions in plastic and bulk distribution.

Other major manufacturers

Mondi, Canfor, Segezha, KapStone and Smurfit Kappa.

1 Packaging Paper includes market pulp, which accounts for around 30% of the sales volume.
2 Smithers Pira, The future of Global Packaging to 2022
3 Based on statistics from Pöyry Management Consulting and Eurokraft
4 World cement, The Freedonia Group, 2013
5 BillerudKorsnäs’ assessment

Consumer Board

Liquid packaging board and cartonboard with unique properties

Consumer Board delivers packaging materials in high-quality board made from primary fibre for beverages, food products and various other consumer goods. Smart solutions in terms of function, design and material selection create added value for customers.

Growth strategy: Volume growth

Sustainable and profitable volume growth in the key markets.

Focus 2018

  • Ensure increased capacity from 2019 to meet customer needs and demand
  • Meet customers’ demands for total quality – product and delivery quality
  • Exploit the strong market position
  • Quickly meet increased regulatory requirements for packaging in prioritised growth markets
Volume Growth 4-5% (Growth target, year)
Net sales SEKm 8 189
EBITDA margin 22%

Net sales by market segment, %

Net sales by region, %

Liquid packaging board ~ 85% of Consumer Board’s sales volume

Key applications

  • Milk
  • Juice
  • Other drinks and liquid foods
  • Preserved foods


Liquid packaging board has stable growth of 2–3%.1Most of the growth in demand is forecast to come from Asia. In Western Europe, growth is dependent on innovations, with a focus on new packaging types and applications for liquid packaging board.

BillerudKorsnäs' position

One of the world’s leading manufacturers of liquid packaging board


  • Rising demand in developing markets due to demographic changes and the establishment of a cohesive food supply chain.
  • Focus on product safety and the need for extended durability, even at fluctuating temperatures.


Other packaging materials, mainly plastic.

Other major manufacturers

Stora Enso, Klabin, Evergreen Packaging, WestRock.

1 Smithers Pira, The future of Liquid Paperboard to 2022

Cartonboard ~ 13% of Consumer Board’s sales volume

Key applications

  • Exclusive drinks
  • Beauty and healthcare products
  • Confectionery
  • Household products and industrial goods in the premium segment
  • Fashion articles
  • Food in the premium segment


Global demand for cartonboard is predicted to grow by 3.9%, most quickly in Asia and Africa. Growth is focused mostly on packaging for cosmetics, pharmaceuticals and packaging for dry and frozen food.

BillerudKorsnäs' position

One of the leading manufacturers of primary fibre-based cartonboard for the premium segment in Europe.2


Economic growth is driving demand, particularly in cosmetics, medical products and food in the premium segment. Greater interest in packaging’s appearance and design in the premium segment, with companies keen to differentiate their products and strengthen their brand.


Other packaging materials, mainly plastic.

Other major manufacturers

In the premium segment: Iggesund, Metsä Board, Stora Enso, WestRock and International Paper.

Cup stock ~ 2% of Consumer Board’s sales volume

Key applications

Paper cups for hot and cold drinks


The global growth rate for cup stock is 3.4%.1 The Asian markets are driving this growth. However, demand is greatest in the US market, which accounts for almost half of the demand.

BillerudKorsnäs' position

BillerudKorsnäs is a challenger in the market and sees good opportunities to take a strong position.


  • Demographic changes in growth markets
  • A growing on-the-go culture in food and beverages


Mainly plastic

Other major manufacturers

International Paper, WestRock, Georga-Pacific, APP and Stora Enso

Corrugated Solutions

Strong fluting and liner create customer value

Corrugated Solutions supplies materials to corrugated board manufacturers and packaging solutions to brand owners. The strong, light and pure materials – fluting and liner – are used in corrugated boxes for fragile goods and demanding distribution systems. Smart packaging solutions are delivered via the Managed Packaging concept, which provides packaging optimisation for brand owners who want to challenge conventional solutions and take control of their packaging.

Growth strategy: Value growth

Sustainable and pro table growth is to be achieved through value growth in the existing production capacity for paper and growth in Managed Packaging.

Focus 2018

  • Draw commercial benefits from a strong product portfolio and set a new market standard
  • Continue to create customer value from fibre to packaging
  • Expand collaboration with brand owners in attractive markets
  • Further strengthen the position in the new market segments introduced in 2017
Value growth 2-4% (Growth target, year)
Net sales SEKm 3 856
EBITDA margin 22%

Net sales by market segment, %

Net sales by region, %

Fluting ~ 45% of Corrugated Solutions’ sales volume

Key applications

Packaging for:

  • Fruit and vegetables
  • Components for the automotive industry, white goods and electronics
  • Transport


Global demand for corrugated board materials is expected to grow by 2.4% per year up until 20301, largely in China, the Middle East and Asia, due to the concentration of manufacturing in these regions.

BillerudKorsnäs' position

Quality2 and market-leading1 producer in Europe in the top segment with a strong position in fruit and vegetables.


  • Increased demand for lightweight packaging that reduces distribution and transport costs by air and in complex and long distribution chains.
  • Greater demand for packaging that tolerates tough distribution systems and that reduces food waste, even in humid climates.


Recycled fibre-based fluting and other materials in plastic and wood.

Other major manufacturers

In primary fibre-based fluting: Stora Enso, Mondi and Powerflute.

Liner ~ 35% of Corrugated Solutions’ sales volume

Key applications

Primary packaging for:

  • Exclusive drinks
  • Beauty and healthcare products
  • Confectionery
  • Home electronics

Secondary packaging for:

  • Consumer goods

Shelf-ready packaging for:

  • Consumer goods

BillerudKorsnäs' position

One of the market leaders in Europe for pure white primary fibre-based liner2 and one of the leaders in coated primary fibre-based liner globally.


  • Growing interest in the appearance, design and feel of the packaging as a way of differentiating the product and strengthening the brand
  • Greater demand for product safety in the food chain


Coated and uncoated white top testliner (based on recycled fibre).

Other major manufacturers

Metsä Board, Mondi and Smurfit Kappa.

1 Pöyry, World Paper Market 2017
2 BillerudKorsnäs bedömning

Managed Packaging ~ 20% of Corrugated Solutions’ sales volume

Key applications

Packaging solutions and services for brand owners with international packaging programmes and logistics. Managed Packaging offers benefits in:

  • Revenue generation
  • Operational savings
  • Management simplicity
  • Sustainability performance

BillerudKorsnäs' position

Unique packaging concept based on a network of production partners for flexibility and market coverage, combined with in-depth material know-how for maximum packaging optimisation and efficiencies.


  • Concentration of manufacturing in Asia
  • Demand for simpler logistics, reliable quality and cost-efficiency
  • Demand for standardisation and efficiencies
  • Greater demand for sustainable solutions


Independent wholesalers of packaging and major packaging manufacturers with converting in Asia.