sca ceo jan johansson's presentation at the nasdaq omx and seb enskilda nordic market day
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New York, 2010-05-20 | SCA CEO Jan Johansson's presentation at the NASDAQ OMX and SEB Enskilda Nordic Market Day. http://www.sca.comTRANSCRIPT
Nordic Seminar, New York20 May 2010Jan Johansson, President and CEOLennart Persson, CFO
20 May 2010
2
SCA – a global hygiene products and paper company
Net sales of SEK 111bn
Approximately 50,000 employees and sales in more than 100 countries
TEN and Tork leading global brands for incontinence care and Away From Home tissue
Ranked 2nd greenest company in the world, one of the world’s 100 most sustainable companies and one of the world’s most ethical companies, included in the Dow Jones Sustainability indexes
20 May 2010
33333
Forest Products
Packaging Tissue
Personal Care
37%25%
15% 23%
Sales 2009: SEK 111bn
SCA GroupSales and EBIT split 2009
32%
39%
25%
4%
Sales splitEBIT splitEBIT split
20 May 2010
444
Strong global and regional positions
GlobalIncontinence care: 1AFH tissue: 3
Nordic region
Baby diapers: 1
EuropeTissue: 1Corrugated board: 2Baby diapers: 3Incontinence care: 1Privately owned forests: 1Mexico
Hygiene products: 2
ColombiaIncontinence care: 1Feminine care: 1Tissue: 1
4
AustraliaFeminine care: 1Incontinence care: 1Tissue: 2
North AmericaAFH tissue: 3Incontinence care: 3
20 May 2010
SCA Group Strategic Direction
1. 2. 3.
4.
5 20 May 2010
6
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%
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77
Strong SCA positionsGood market growthFavourable socio-demographics
Joint venture
Good market growthFavourable socio-demographics
Our growth markets
Market tests of Incontinence care products and Baby diapers
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8
Q1 2010Market update
Significantly increased raw material pricesOCC +140%Recovered paper US +80%Recovered paper Europe +30%Pulp +40%
Hygiene businessesStable demand
Packaging and Forest ProductsIncreased demand from low levels for packaging
• Western European demand +3%*Good market balance for solid-wood productsEuropean demand for publication papers:
• Magazine paper (SC and LWC) +4%• Newsprint +2%
* Year to date February 2010 vs 2009
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30
40
50
60
70
80
90
100
110
120
-00 -01 -02 -03 -04 -05 -06 -07 -08 -09 -10OCC PIX
EUR/t
9
400425450475500525550575600625650675700725750775800825850875900925950
-98 -99 -00 -01 -02 -03 -04 -05 -06 -07 -08 -09 -10
NBSK PIX Value
USD/Metric tonne
NBSK pulp
Significantly increased 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
March 2009 – USD 578March 2010 – USD 879
March 2009 – EUR 39March 2010 – EUR 102
February 2009 – USD 166February 2010 – USD 303
USD/short ton
USD/metric ton EUR / ton
OCC
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10
Q1 2010 results
* Adjusted for Packaging restructuring costs** Adjusted for Packaging restructuring costs and exchange rate movements
EBIT decreased 1%** Higher volumesSynergies and cost savingsHigher raw material costsLower prices
Profit before tax increased 16%*Lower finance net
SEK millions Q1 Q1 Change, Change, Q4 unless otherwise stated 2010 2009 % %** 2009
Net sales 26,722 28,327 -6 1 27,507
EBIT* 2,027 2,136 -5 -1 2,568
EBIT margin* (%) 7.6 7.5 9.3
Profit before tax* 1,748 1,511 16 20 2,280
Earnings per share (SEK) 1.53 1.58 -3 1.72
Cash flow from current operations 1,148 1,640 -30 2,544
Debt/Equity ratio 0.57 0.70 0.60
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Reduced net debtAnd improved debt payment capacity
%SEKm
25%
32%33% 33%
35%
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12
Sales decreased 6% (0%*)Incontinence care up 3%*Feminine care up 9%*Baby diapers -9%*
EBIT increased by 5% (9%*)Higher volumesLower pricesLower raw material cost Higher marketing costs
Personal CareQ1 2010 vs Q1 2009
-6%
10.9%12.1%
5%
SALES SEKm
EBIT SEKm
6,4766,109
704737
Q1 2010 Q1 2009
EBIT margin
Q1 2010 Q1 2009
* Adjusted for exchange rate movements
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13
TissueQ1 2010 vs Q1 2009
-7%
EBIT margin 8.3%7.3%
-18%
10,4669,728
864710
SALES SEKm
EBIT SEKm
Q1 2010 Q1 2009
Q1 2010 Q1 2009
Sales decreased 7% (0%*)Consumer tissue -3%*AFH-tissue increased 6%*
EBIT decreased by 18% (-13%*)Higher volumesLower energy and distribution costsAcquisition synergiesLower pricesHigher raw material costs
* Adjusted for exchange rate movements
20 May 2010
14
PackagingQ1 2010 vs Q1 2009
-3%
1.1%2.6%**
137%**
7,4957,253
81
192**
SALES SEKm
EBIT SEKm
EBIT margin
Q1 2010 Q1 2009
Q1 2010 Q1 2009
Sales decreased by 3% (7%*)Higher prices and volumes
EBIT increased by 137%** (152%***)Higher prices and volumesSavings from restructuring programIncreased raw material costs
* Adjusted for exchange rate movements and the closure of the New Hythe testliner mill in the UK** Adjusted for restructuring costs*** Adjusted for restructuring costs and exchange rate movements
20 May 2010
15
Forest ProductsQ1 2010 vs Q1 2009
-5%
EBIT margin 13.5%11.8%
-16%
4,3334,110
583487
SALES SEKm
EBIT SEKm Q1 2010 Q1 2009
Q1 2010 Q1 2009
Sales decreased by 5% (-3%*)Publication papers
• Higher volumes• Lower prices
Solid-wood products• Higher volumes• Higher prices
EBIT decreased by 16% (-16%*)Publication papers, decreased EBIT
• Lower prices
Solid-wood products, increased EBIT• Higher volumes• Higher prices
Pulp, increased EBIT• Higher prices
* Adjusted for exchange rate movements
20 May 2010
16
Outlook 2010Group
Improved general market conditionsEffects from price increases and cost reductions gradually during the second half 2010
Hygiene businessesGood demandHigh promotion activitiesIncreasing prices for Tissue
PackagingDemand improvementIncreasing prices
Forest ProductsSigns of small recovery from low level for publication papersPrice increases on magazine paperGood market balance for solid-wood products
20 May 2010
17 20 May 2010