SCA Presentation at the Handelsbanken Materials and Energy Seminar
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Transcript of SCA Presentation at the Handelsbanken Materials and Energy Seminar
� Net sales SEK 109bn
� 45,000 employees and sales in more than 100 countries
� World’s third largest hygiene products company
SCA GroupA global hygiene products and paper company
222
company
� TEN and Tork leading global brands for incontinence care and Away-From-Home tissue
� Europe’s largest private forest owner
� Europe’s second largest packaging company
10 March 2011
Forest Products Personal Care
15% 22%
SCA GroupSales and EBIT split 2010
29%25%
Sales split
EBIT splitEBIT split
33
Packaging Tissue
36%
27%
15% 22%
30%16%
10 March 2011
Leading market positionsGlobal and regional
Europe
Tissue: 1
Corrugated board: 2
North America
AFH tissue: 3Incontinence care: 3
Nordic region
Incontinence care: 1
Baby diapers: 1
AFH tissue: 1
Consumer tissue: 2
4
Corrugated board: 2
Baby diapers: 3
Incontinence care: 1
Privately owned forests: 1
Australia
Feminine care: 1Incontinence care: 1Tissue: 2
Mexico
Incontinence care: 1
Tissue: 2
Feminine care: 3Baby: 3 Global
Incontinence care: 1
AFH tissue: 3ColombiaIncontinence care: 1
Feminine care: 1Tissue: 1
10 March 2011
Strong global and regional brands
Eastern Europe
North America Europe
5
Asia PacificLatin America
North America Europe
10 March 2011
SCA Group Strategic Priorities
� Cost reductions in all
business areas of
SEK 1bn
� Cash flow from
current operations:
� Efficiency programs in
Packaging and Forest
Products
� Closure/Divestment of 18 packaging units
� Personal Care
� Thin baby diaper
� TENA Ultra thins
� Strong TENA value assortment
� SCA Group 5%*
� Personal Care 2%**
� Emerging markets 10%**
� Tissue 2%**
6
current operations:
SEK 7.4bn
of 18 packaging units
� Supply chain
excellence and asset
utilization programs in
Tissue Europe
� Restructuring program
in Baby diapers in
Europe
� New tissue plant in
Mexico
� New Personal Care
plant in Russia
assortment
� Tissue
� Tork Xpressnap Café
� Tork Performance
� Tempo ice
� Packaging
� Trueflo
� ZeoCool
� Forest Products
� Increased value added
� Tissue 2%**
� Emerging markets 6%**
� Packaging 20%*
� Forest Products 3%**
*Adjusted for exchange rate movements, divestments and closures
* *Adjusted for exchange rate movements
10 March 2011
GrowthHigh potential in markets with low penetration
Usage of hygiene products
Units/capita/year Units/child/year Units/woman/year Kg/capita/year
Penetration in mature markets around 35%
7
Western Europe Eastern Europe Latin America AsiaNorth America
7 10 March 2011
Latin America
South East Asia
Eastern Europe /Russia
� Strong SCA positions
� Good market growth
� Favourable socio-demographics
GrowthSCA’s growth markets
88
� Joint venture
� Good market growth
� Favourable socio-demographics
Middle East
China � Incontinence care products
10 March 2011
Personal careInitiatives 2010
Feminine care
17%
Incontinencecare 56%
� Restructuring program in baby diapers in Europe
� Annual savings of EUR 15m with full effect in Q3 2011
� Investment in local production in Russia
� Acquisition of Copamex baby diapers business� No. 3 in Mexico
� Growth
Net sales 2010:SEK 25bn
23 november 201010
56%
Baby diapers27%
10 March 2011
� Growth� TENA has increased market share
� Incontinence care products in China expanded
� Feminine care products launched in Malaysia and tampons in Sweden and the Netherlands
� Extended range of Libero baby care products
� Emerging market sales increased 10%*
� Innovation� TENA Ultra thins
� Thin baby diaper
� Strong TENA value assortment
* Adjusted for exchange rate movements
TissueInitiatives 2010
Consumertissue 62%
� Implementation of price increases
� Investment in new tissue plant in Mexico
� European brand migration project
� Growth
� Tork has gained market share in Europe and North America
Net sales 2010:SEK 40 bn
23 november 201011
AFH-tissue38%
10 March 2011
and North America
� Emerging market sales increased 6%*
� Innovation
� Tork Xpressnap Café
� Tork Performance
� Tempo Ice
� Tempo Kids
� Tempo toilet tissue
* Adjusted for exchange rate movements
PackagingInitiatives 2010
Protective packaging 3%
Service 4%
Industrial packaging 4%
� Finalized restructuring program
� Annualized savings of SEK 1,070m
� Divestment of the Asian packaging operation
� Annual sales of USD 250m
Net sales 2010:SEK 30bn
23 november 201012
Consumer packaging
20%
Conventional corrugated board
69%
10 March 2011
� Price increases
� Innovation
� Trueflo
� ZeoCool
Forest ProductsInitiatives 2010
Pulp 16%
Timber
8%
LWC-paper 18%
� Efficiency project at Ortviken paper mill
� Annual savings of SEK 45m when fully realized
� Creation of Gällö timber AB
� SCA Energy, new business unit
Net sales 2010:SEK 17bn
23 november 201013
SC-paper 17%
Newsprint14%
Solid-woodproducts
27%
10 March 2011
� SCA Energy, new business unit
� SCA’s deliveries of FSC certified publication paper increased 35%
�Hygiene business� Good volume growth in Incontinence care, Feminine care and AFH tissue
� Good sales growth in Emerging markets
� Personal Care 10%*
� Tissue 6%*
�Packaging and Forest Products� Increased demand for Packaging
Full year 2010 vs. 2009SCA market update
� Increased demand for Packaging
• Corrugated volumes increased 5%
• Corrugated prices increased 6%
� Publication paper volumes increased 3%
� Solid-wood product volumes increased 8%
�Significantly increased raw material prices� Raw material costs increased SEK 5.2bn
�Stronger SEK to other currencies� Negative sales impact of SEK 7.2bn equivalent to 6%
10 March 2011
* Adjusted for exchange rate movements
14
50
70
90
110
130
150EUR/t
450475500525550575600625650675700725750775800825850875900925950975
10001025
USD/Metric tonne
High raw material pricesFeb 2010 – USD 840
Feb 2011 – USD 949Feb 2010 – EUR 89
Feb 2011 – EUR 135USD/metric ton
EUR / ton
OCCNBSK pulp
23 november 201015
0,00
0,25
0,50
0,75
1,00
1,25
1,50
1,75
jan-03 jan-04 jan-05 jan-06 jan-07 jan-08 jan-09 jan-10 jan-11
EUR/Kg
Polyethylene (PE) Bags, backsheet, pack.film Propylene (Contract fd) Superabsorbent
Oil (eur/kg) Polypropylene (PP homo) NW, Fibres
30
-00 -01 -02 -03 -04 -05 -06 -07 -08 -09 -10 -11
OCC PIX
400425450
-98 -99 -00 -01 -02 -03 -04 -05 -06 -07 -08 -09 -10 -11
NBSK PIX Value
0
50
100
150
200
250
300
350
400
450
-93 -94 -95 -96 -97 -98 -99 -00 -01 -02 -03 -04 -05 -06 -07 -08 -09 -10
USD/short ton
High grade deinking OCC
Recovered paper - USADec 2009 – USD 277
Dec 2010 – USD 310
USD/short ton
Oil based materials
EUR / kg
Jan 2010 – EUR 0.30
Jan 2011 – EUR 0.41
10 March 2011
Full year 2010 results
SEK m Change, Change,
unless otherwise stated 2010 2009 % %**
Net sales 109,142 110,857 -2 5***
EBIT* 9,608 9,648 0 4
EBIT margin* (%) 8.8 8.7EBIT margin* (%) 8.8 8.7
Profit before tax* 8,492 8,004 6 10
Earnings per share (SEK) 7.90 6.78 17
Cash flow from current operations 7,399 11,490 -36
Debt/Equity ratio 0.51 0.60
* Excluding restructuring cost
** Adjusted for exchange rate movements
*** Adjusted for exchange rate movements and divestments
10 March 201116
Net debtAnd debt payment capacity
%SEKm
30
40
50
30 000
40 000
50 000
35% 33%
36%
33%
Net debt decreased SEK 6 bn
40%
1717
0
10
20
0
10 000
20 000
Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010
Net debt Debt payment capacity
10 March 2011
Outlook 2011
� Good demand for all businesses
� Good growth in Emerging markets for Hygiene businesses
� Continued high raw material costs
� Increasing corrugated prices
10 March 2011
� Increasing corrugated prices
� Price increases on publication papers
19