sca presentation at the abg sc consumer goods seminar, stockholm, sweden

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Johan Karlsson, Vice President Investor relations 29 March 2011 ABG SC Consumer goods seminar 2011

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You are welcome to read or download SCA's presentation at the ABG SC Consumer Goods Seminar in Stockholm, Sweden.SCA was represented by Johan Karlsson, Vice President, Investor Relations.http://www.sca.com/ir

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Page 1: SCA presentation at the ABG SC Consumer Goods Seminar, Stockholm, Sweden

Johan Karlsson, Vice President Investor relations

29 March 2011

ABG SC Consumer goods seminar 2011

Page 2: SCA presentation at the ABG SC Consumer Goods Seminar, Stockholm, Sweden

222

Net sales SEK 109bn

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

SCA GroupA global hygiene products and paper company

29 March 2011

Page 3: SCA presentation at the ABG SC Consumer Goods Seminar, Stockholm, Sweden

0%

20%

40%

60%

80%

100%

2000 2010

3

% of net sales

Hygiene productsPackaging and Forest Products

46%58%

42%54%

2000 2010

SCA GroupHygiene business is growing

29 March 2011

Page 4: SCA presentation at the ABG SC Consumer Goods Seminar, Stockholm, Sweden

44

Forest Products

Packaging Tissue

Personal Care

36%27%

15% 22%

SCA GroupSales and EBIT split 2010

29%

30%

25%

16%

Sales splitEBIT splitEBIT split

29 March 2011

Page 5: SCA presentation at the ABG SC Consumer Goods Seminar, Stockholm, Sweden

5

Leading market positionsGlobal and regional

EuropeTissue: 1Corrugated board: 2Baby diapers: 3Incontinence care: 1Privately owned forests: 1

AustraliaFeminine care: 1Incontinence care: 1Tissue: 2

MexicoIncontinence care: 1Tissue: 2Feminine care: 3Baby: 3 Global

Incontinence care: 1AFH tissue: 3Colombia

Incontinence care: 1Feminine care: 1Tissue: 1

North AmericaAFH tissue: 3Incontinence care: 3

Nordic regionIncontinence care: 1Baby diapers: 1AFH tissue: 1Consumer tissue: 2

29 March 2011

Page 6: SCA presentation at the ABG SC Consumer Goods Seminar, Stockholm, Sweden

SCA Group Strategic Priorities

6

Cost reductions in all business areas of SEK 1bn

Cash flow from current operations:SEK 7.4bn

Efficiency programs in Packaging and Forest Products Closure/Divestment

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

Personal Care Thin baby diaper TENA Ultra thins Strong TENA value

assortment

Tissue Tork Xpressnap

Café Tork Performance Tempo ice

Packaging Trueflo ZeoCool

Forest Products Increased value

added

SCA Group 5%*

Personal Care 2%** Emerging markets 10%**

Tissue 2%** Emerging markets 6%**

Packaging 20%*

Forest Products 3%**

*Adjusted for exchange rate movements, divestments and closures* *Adjusted for exchange rate movements

29 March 2011

Page 7: SCA presentation at the ABG SC Consumer Goods Seminar, Stockholm, Sweden

7

Increased pace of innovationStrengthens market positions

29 March 2011

Page 8: SCA presentation at the ABG SC Consumer Goods Seminar, Stockholm, Sweden

8

GrowthHigh potential in markets with low penetration

Usage of hygiene products

Units/capita/year Units/child/year Units/woman/year

Western Europe Eastern Europe Latin America AsiaNorth America

Kg/capita/year

Penetration in mature markets around 35%

8 29 March 2011

Page 9: SCA presentation at the ABG SC Consumer Goods Seminar, Stockholm, Sweden

99

Latin America

South East Asia

Eastern Europe /Russia

Strong SCA positions Good market growth Favourable socio-demographics

Joint venture

Good market growth Favourable socio-demographics

Middle East

China Incontinence care products

GrowthSCA’s growth markets

29 March 2011

Page 10: SCA presentation at the ABG SC Consumer Goods Seminar, Stockholm, Sweden

23 november 201010

Personal careInitiatives 2010

Feminine care 17%

Incontinencecare 56%

Baby diapers27%

29 March 2011

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 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

Net sales 2010:SEK 25bn

Page 11: SCA presentation at the ABG SC Consumer Goods Seminar, Stockholm, Sweden

0200400600800

1,0001,2001,400

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10

111111

EURm

Newproducts & services

NorthEurope

SouthEurope

NorthAmerica

Emerging markets

Reimbursement

RetailTV

Internet

Design

TENAA true success story

Annual sales growth 1990-2010: 9%

29 March 2011

Page 12: SCA presentation at the ABG SC Consumer Goods Seminar, Stockholm, Sweden

23 november 201012

TissueInitiatives 2010

Consumertissue 62%

AFH-tissue38%

29 March 2011

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 Emerging market sales increased 6%*

Innovation Tork Xpressnap Café Tork Performance Tempo Ice Tempo Kids Tempo toilet tissue Net sales 2010:

SEK 40 bn

* Adjusted for exchange rate movements

Page 13: SCA presentation at the ABG SC Consumer Goods Seminar, Stockholm, Sweden

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

• 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%

Full year 2010 vs. 2009SCA market update

29 March 2011

* Adjusted for exchange rate movements

13

Page 14: SCA presentation at the ABG SC Consumer Goods Seminar, Stockholm, Sweden

1414

11%

SCA GroupDescription of costs 2010

29 March 2011

SCA GROUP

Sales and administration expenses 15%Energy 6%Transport and distribution expenses 12%Other costs of goods sold 30%Raw materials and consumables 37%

100%Of which:

Pulp 8%Recovered paper 7%Paper 5%Timber/chips 3%Super absorbents 2%Non-woven 1%Other 11%

37%

Total operating expenses: SEK 99,645m

Page 15: SCA presentation at the ABG SC Consumer Goods Seminar, Stockholm, Sweden

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) SuperabsorbentOil (eur/kg) Polypropylene (PP homo) NW, Fibres

30

50

70

90

110

130

150

-00 -01 -02 -03 -04 -05 -06 -07 -08 -09 -10 -11OCC PIX

EUR/t

400425450475500525550575600625650675700725750775800825850875900925950975

10001025

-98 -99 -00 -01 -02 -03 -04 -05 -06 -07 -08 -09 -10 -11

NBSK PIX Value

USD/Metric tonne

High raw material prices

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 - USA

Feb 2010 – USD 840Feb 2011 – USD 949

Feb 2010 – EUR 89Feb 2011 – EUR 135

Dec 2009 – USD 277Dec 2010 – USD 310

USD/short ton

USD/metric ton EUR / ton

OCC

Oil based materials

NBSK pulp

EUR / kg

Jan 2010 – EUR 0.30Jan 2011 – EUR 0.41

29 March 2011

Page 16: SCA presentation at the ABG SC Consumer Goods Seminar, Stockholm, Sweden

Full year 2010 results

SEKm 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 8.7

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

29 March 201116

Page 17: SCA presentation at the ABG SC Consumer Goods Seminar, Stockholm, Sweden

1717

Net debtAnd debt payment capacity

%SEKm

0

10

20

30

40

50

0

10 000

20 000

30 000

40 000

50 000

Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010

Net debt Debt payment capacity

35% 33%36%

33%

Net debt decreased SEK 6 bn

40%

29 March 2011

Page 18: SCA presentation at the ABG SC Consumer Goods Seminar, Stockholm, Sweden

Dividend

29 March 2011

Proposed 8% increase of the dividend to SEK 4.00 (3.70) per share

18

Page 19: SCA presentation at the ABG SC Consumer Goods Seminar, Stockholm, Sweden

Outlook 2011

29 March 2011

Good demand for all businesses Good growth in Emerging markets for Hygiene businesses Continued high raw material costs Increasing corrugated prices Price increases on publication papers

19

Page 20: SCA presentation at the ABG SC Consumer Goods Seminar, Stockholm, Sweden

Q & A

29 March 201120

Page 21: SCA presentation at the ABG SC Consumer Goods Seminar, Stockholm, Sweden

29 March 201121

Johan Karlsson, VP Investor RelationsTel: +46 8 788 51 30

Jessica Ölvestad, Manager Investor RelationsTel: +46 8 788 52 82

IR Contacts:

Email: [email protected] Website: www.sca.com