Swedish paper and packaging manufacturer Billerud has reported a decline in second-quarter sales, attributing the drop to ongoing weakness in European markets. The company, which supplies containerboard and graphic paper across the continent, said demand remained subdued as industrial activity slowed and customers destocked inventories. Billerud did not provide a precise sales figure in its preliminary statement, but confirmed the downward trend compared with the same period last year.
The results sent Billerud's shares lower on the Stockholm Stock Exchange, with the stock falling by around 3% in early trading. The decline also weighed on the wider European paper and packaging sector, as investors reassessed growth prospects. For UK investors, the news comes amid a broader downturn in European manufacturing, with the FTSE 100 dipping 0.4% to 8,215 points on the day, partly driven by weakness in materials and industrials.
Analysts have pointed to a combination of high energy costs and sluggish consumer demand as key headwinds for the sector. “European paper producers are grappling with overcapacity and waning demand, particularly in packaging grades linked to retail and e-commerce,” said one London-based analyst, who asked not to be named. “Billerud's update suggests the second half of the year may not bring the recovery some had hoped for.”
The paper and packaging sector, which includes UK-listed companies such as DS Smith and Mondi, has been under pressure since late 2025 as customers reduced orders. Billerud's latest update reinforces concerns that a meaningful rebound remains elusive. UK pension funds with exposure to the sector through exchange-traded funds or direct holdings may face continued volatility.
Billerud said it would provide a full financial report later this month, with further details on cost-saving measures and demand outlook. The company has previously announced plant closures and restructuring to align capacity with lower demand, and further actions are not ruled out.