Presentation of SCA Year-end report 2010

Year-end Report 2010Jan Johansson, President and CEO Year-end Report 2010

Summary – Full year 2010 EBIT increased 4%* 4%  Higher volumes in all businesses  Higher prices in Packaging and Tissue  SEK 1bn in cost savings  Significant profit improvement in Packaging  SEK 5.2bn in increased raw material costs 5 2bn  Negative currency impact Profit before tax increased 10%* 10% Cash flow from current operations: SEK 7.4bn N t debt d Net d bt decreased b SEK 6b d by 6bn Debt payment capacity improved to 35%* Excluding restructuring costs and adjusted for exchange rate movements 2 Year-end Report 2010

SCA Group Strategic Priorities  Cost reductions in all  Efficiency programs in  SCA Group 5%*  Personal Care business areas of Packaging and Forest  Thin baby diaper SEK 1bn Products  Personal Care 2%**  Tena Ultra thins  Emerging markets 10%**  Cash flow from  Closure/Divestment  Strong Tena value of 18 packaging units current operations: t ti assortment t t  Tissue 2%** SEK 7.4bn  Emerging markets 6%**  Supply chain  Tissue excellence and asset  Tork Xpressnap  Packaging 20%* utilization programs in Café Tissue Europe  Forest Products 3%**  Tork Performance  Restructuring program  Tempo ice in Baby diapers in  Packaging Europe  Trueflo  New tissue plant in  ZeoCool Mexico  Forest Products  New Personal Care  Increased value plant i R l t in Russia i dd d added*Adjusted for exchange rate movements, divestments and closures* *Adjusted for exchange rate movements 3 Year-end Report 2010

Full year 2010 vs. 2009 SCA market update k t d t  Hygiene business  G d volume growth i I Good l th in Incontinence care, F i i care and AFH ti ti Feminine d 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 g y p  Raw material costs increased SEK 5.2bn  Stronger SEK to other currencies  Negative sales impact of SEK 7.2bn equivalent to 6%* Adjusted for exchange rate movements 4 Year-end Report 2010

Q4 2010 vs. Q4 2009 SCA market update k t d t  Hygiene business  Higher volumes in all product categories  Strong sales growth in Emerging markets  Personal Care 16%*  Tissue 11%*  Packaging and Forest Products  I Increased d d demand f P k i d for Packaging • Corrugated volumes increased 3% • Corrugated prices increased 15%  P bli ti paper volumes i Publication l increased 7% d  Solid-wood product volumes increased 11%  Significantly increased raw material prices  Raw material costs increased SEK 1.7bn  Stronger SEK to other currencies g  Negative sales impact of SEK 2bn equivalent to 7%* Adjusted for exchange rate movements 5 Year-end Report 2010

Full year 2010 resultsSEK millions Change, Change, unless otherwise stated 2010 2009 % %**Net sales 109,142 110,857 -2 5***EBIT* 9,608 9,648 0 4EBIT margin* (%) i * 8.8 88 8.7 87Profit before tax* 8,492 8,004 6 10Earnings per share (SEK) 7.90 7 90 6.78 6 78 17Cash flow from current operations 7,399 11,490 -36Debt/Equity ratio 0.51 0.60* Excluding restructuring cost** Adjusted for exchange rate movements*** Adjusted for exchange rate movements and divestments6 Year-end Report 2010

Q4 2010 resultsSEK millions Q4 Q4 Change, Change, unless otherwise stated 2010 2009 Q4/Q4,%* Q4/Q4,%**Net sales 27,564 27,507 0 8***EBIT* 2,567 2,568 0 5EBIT margin* (%) 9.3 9.3Profit before tax* 2,274 2,280 0 5Earnings per share (SEK) 2 38 2.38 1 72 1.72 38Cash flow from current operations 2,389 2,544 -6* Excluding restructuring cost** Adjusted for exchange rate movements*** Adjusted for exchange rate movements and divestments7 Year-end Report 2010

Q4 2010 vs. Q3 2010 Summary  Group  S l i Sales increased 4%* d  EBIT increased 3%**  Profit before tax increased 3%**  Business areas  Personal Care, EBIT increased 10%** • Improved price/mix • Higher volumes  Tissue, EBIT increased 9%* • Higher volumes and prices  Packaging, EBIT increased 15%* • Higher prices and savings from restructuring program  F Forest Products, EBIT decreased 13%*** tP d t d d • Higher raw material and energy costs • Lower prices • Negative currency impact of SEK 140m* Adjusted for exchange rate movements** Excluding restructuring costs and adjusted for exchange rate movements*** Excluding restructuring costs 8 Year-end Report 2010

Net debtAnd debtA d d bt payment capacity t it SEKm Net debt decreased SEK 6 bn % 50 000 50 36% 40% 40 000 40 33% 35% 33% 30 000 30 20 000 20 10 000 10 0 0 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Net debt Debt payment capacity9 Year-end Report 2010

Personal Care Initiatives 2010 I iti ti  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 TTena h i has increased market share d k t h  Market test of 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 10 Year-end Report 2010

Personal Care Q4 2010 vs. Q4 2009 6,375 6,393 6,125 ,  Sales flat (+6%*)  Incontinence care increased 4%* 0%  Feminine care increased 5%*  Baby diapers increased 8%* 8%  Emerging markets increased 16%*  Incontinence care 10%*SALES SEKm Q410 Q4 09 Q3 10  Baby diapers 21%* 21%  Feminine care 12%* 901 735 697** -18%  EBIT decreased by 18% (-12%*)  Higher volumes  Higher raw material costEBIT SEKm Q410 Q4 09 Q3 10  Increased investment inEBIT margin 11.5% 14.1% 11.4%** market activities* Adjusted for exchange rate movements** Excluding restructuring costs 11 Year-end Report 2010

Tissue Initiatives 2010 I iti ti  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 I ti  Tork Xpressnap Café  Tork Performance  Tempo Ice  Tempo Kids TTempo toilet tissue t il t ti* Adjusted for exchange rate movements 12 Year-end Report 2010

Tissue Q4 2010 vs. Q4 2009 10,338 10 338  Sales decreased by 2% (+5%*) 10,154 9,924  Consumer tissue increased 6%*  AFH tissue increased 4%* -2%  Emerging markets increased 11%* g g  Consumer tissue increased 14%*  AFH tissue increased 3%*SALES SEKm Q410 Q4 09 Q3 10  EBIT decreased by 18% (-14%*) 965  Higher raw material costs 787 753  Higher volumes -18%  Higher prices  Lower other production and energy costsEBIT SEKm Q410 Q4 09 Q3 10EBIT margin 7.8% 9.3% 7.6%* Adjusted for exchange rate movements 13 Year-end Report 2010

PackagingInitiatives 2010I iti ti  Finalized restructuring program  Annualized savings of SEK 1,070m  Divestment of the Asian packaging operation  Annual sales of USD 250m  Price increases  Innovation  Trueflo  ZeoCool14 Year-end Report 2010

Packaging Q4 2010 vs. Q4 2009  Sales increased 6% (+25%*) 7,405 6,960 7,392  Higher prices and volumes 6%*  EBIT increased to 567 MSEK (149 MSEK**) ( )  Higher prices and volumes  Savings from restructuring program  Higher raw material costsSALES SEKm Q410 Q4 09 Q3 10 567 512 281%** 149**EBIT SEKm Q410 Q4 09 Q3 10EBIT margin g 7.7% 2.1%** 6.9%* Adjusted for exchange rate movements, divestments and closures** Excluding restructuring costs 15 Year-end Report 2010

Forest ProductsInitiatives 2010I iti ti  Efficiency project at Ortviken paper mill  Annual savings of SEK 45m when fully realized  Creation of Gällö timber AB  SCA Energy, new business unit  SCA’s deliveries of FSC certified publication paper SCA s increased 35%16 Year-end Report 2010

Forest Products Q4 2010 vs. Q4 2009  Sales increased 2% (+4%*) 4,290 4,415  Higher volumes 4,201  Publication papers 2% • Lower prices  Solid-wood products and Pulp • Higher pricesSALES SS S SEKm Q410 Q4 09 Q3 10  EBIT d decreased 10% d 661 685**  Higher volumes 592  Higher raw material and energy costs -10% 10%  Negative currency impact of SEK 260m  Publication papers • Lower prices  Solid-wood products and PulpEBIT SEKm Q410 Q4 09 Q3 10 • Higher pricesEBIT margin g 13.8% 15.7% 15.5%*** Adjusted for exchange rate movements** Excluding restructuring cost 17 Year-end Report 2010

Dividend  Proposed 8% increase of the dividend to SEK 4.00 (3.70) per share ( )p18 Year-end Report 2010

Outlook 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 papers19 Year-end Report 2010

Q&A20 Year-end Report 2010

21 Year-end Report 2010

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Presentation of SCA Year-end report 2010

by SCA Svenska Cellulosa Aktiebolaget on Jan 27, 2011

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Presentation of SCA Year-end report 2010 — Presentation Transcript