http://www.sca.com/ir See or download the presentation of SCA's CFO Lennart Persson at the Deutsche Bank paper seminar in London, UK in November, 8 2011.
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2. SCA Group
A global hygiene products and paper company
Net sales SEK 107bn
45,000 employees and sales in more than 100 countries
World’s third largest hygiene products 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
2 8 November 2011
3. SCA Group
Sales split 2010
Forest Products Sales split Personal Care
16% 24%
24%
36%
Packaging Tissue
3 8 November 2011
4. Leading market positions
Global and regional
North America
Europe
AFH tissue: 3
Tissue: 1
Incontinence care: 3
Corrugated board: 2
Baby diapers: 2
Incontinence care: 1
Mexico Privately owned forests: 1
Incontinence care: 1 Solid-wood products: 2
Tissue: 2
Feminine care: 1
Baby diapers: 3 Global
Incontinence care: 1
Colombia
AFH tissue: 2 Australia
Incontinence care: 1
Feminine care: 1 Feminine care: 1
Tissue: 1 Incontinence care: 1
Tissue: 2
4 8 November 2011
5. Strong global and regional brands
Two global billion EUR brands
Eastern Europe
Europe
North America
Asia Pacific
Latin America
Sales of SEK 65bn, with sales in more than 100 countries
5 8 November 2011
6. Strategic focus areas
Cost reductions in all Efficiency programs in Personal Care SCA Group 5%*
business areas of close Packaging and Forest Thin baby diaper Personal Care 2%**
to SEK 1bn*** Products TENA Ultra thins Emerging Markets 10%**
Cash flow from current Supply Chain Strong TENA value
Tissue 2%**
excellence and asset assortment
operations SEK 7.4bn*** Emerging Markets 6%**
utilization programs in Tissue
Tissue Europe Packaging 20%*
Tork Xpressnap Café,
Restructuring program Tork Performance Forest Products 3%**
in baby diapers in Tempo ice, Zoo
Boxes
Europe Acquisitions:
Packaging
New tissue plant in Mexico- Copamex
Mexico Trueflo
ZeoCool Turkey- 95% San Saglik
New personal care
Forest Products Turkey- 50% Komili
plant in Russia
Increased value Brazil – Pro Descart
Further tissue added
investments in
Kostheim and Sovetsk SCA and Fred.Olsen
Investment in Bollsta Renewables to construct
wind farms
sawmill
* 2010 adjusted for exchange rate movements and divestments
** 2010 adjusted for exchange rate movements
*** 2010
6 8 November 2011
7. Strategic focus
Packaging
Focus capital on profitable segments
Increase value content
Managing the Cycle
& Lowering cost base - Price management
- Eliminate problem businesses
- LEAN project
Integrate the business - One Company
- Paper Supply Platform
Customer focus - Quality and Service
- Innovation
People - Management of change
- Leadership
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8. Strategic focus
Forest Products
Shift toward more value-added products
Utilize the potential for energy production
Continued productivity improvements
Greater raw material integration
Gradual expansion of the pulp operation
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9. Strategic focus
Hygiene businesses
Strengthen positions and increase growth in
main markets and emerging markets
Increase the number of global brands
Increase the pace of innovations
Efficiency improvements
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11. Growth
Growth potential for hygiene products
Global population growth
An aging population
Increased market penetration
Higher disposable income
Customers and consumers demand
more comfort and sustainability
11 8 November 2011
12. Growth
High 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%
North America Western Europe Eastern Europe Latin America Asia
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13. Growth
SCA’s growth markets
Latin America
Strong SCA positions
South East Asia Good market growth
Favourable socio-demographics
Eastern Europe
/Russia
Good market growth
Middle East
Favourable socio-demographics
China Incontinence care products
13 8 November 2011
14. Sustainability as a business driver
Reduced cost
ESAVE = SEK 600m in annual cost savings
Improved competitive edge
Sustainability credentials generate good business
Great growth potential through customized offerings in D&E markets
Renewable energy, wind power, biofuels
World’s largest producer of FSC-certified products
Attract investors
23% of investors in SCA shares make sustainability screening
Reduced risk level
Attract top talents
Strengthen the brand
14 8 November 2011
15. Forest
A valuable asset
Europe’s largest private forest owner – FSC certified
Annual net growth of 1%
Raw material integration and potential for electricity generation
Our forests absorb as much carbon dioxide as is discharged from SCA’s
entire production
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16. Summary – 9M 2011 vs 9M 2010
Sales increased 6%*
Hygiene business
Higher volumes and prices
Good growth in emerging markets
• Personal care, 12%**
• Tissue, 10%**
Packaging and Forest Products
Packaging volumes increased 3%***
• Corrugated prices increased12%
Publication paper volumes increased 1%
Solid-wood product volumes increased 7%
EBIT decreased 1%****
Higher prices and volumes
Cost savings
Raw material costs increased SEK 3.1bn
Negative currency impact, SEK 700m
Profit before tax decreased 2%****
Cash flow from current operations: SEK 4,397m
* Adjusted for exchange rate movements and divestments
** Adjusted for exchange rate movements
*** Excluding divestments
**** Excluding restructuring costs and adjusted for exchange rate movements
16 8 November 2011
17. Summary - Q3 2011 vs. Q2 2011
Group
Sales increased 1%
Higher prices
EBIT increased 13%*
Higher prices
Raw material costs increased SEK 280m
Profit before tax increased 11%*
Business areas
Personal Care, EBIT increased 18%*
Higher prices and volumes
Higher raw material costs
Tissue, EBIT increased 21%*
Higher volumes
Higher prices and changed product mix
Packaging, EBIT increased 14%*
Higher prices
Lower volumes
Forest Products, EBIT flat*
Higher prices
Higher raw material costs
* Excluding restructuring costs
17 8 November 2011
18. Restructuring program
Annual EBIT savings
Total cost SEK 1,400m
SEK 700m
Gradual impact during
Write down Cash
2012 - 2013
expenditure
SEK 500m SEK 900m
Q3 2011 costs
Headcount reduction
SEK 350m
approximately
2,000 employees
18 8 November 2011
19. Outlook 2011
Uncertainty in global economy. So far no negative
impact on our business.
Slight price decreases on raw material.
Price increases in parts of our Hygiene business.
19 8 November 2011