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Year-end Report 2010
Jan 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 results

SEK millions                                                                Change,   Change,
    unless otherwise stated                            2010         2009      %        %**

Net sales                                          109,142        110,857     -2       5***
EBIT*                                                  9,608        9,648     0         4
EBIT margin* (%)
         i *                                                8.8
                                                            88        8.7
                                                                      87
Profit before tax*                                     8,492        8,004     6        10
Earnings per share (SEK)                                   7.90
                                                           7 90      6.78
                                                                     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
6                                                                                             Year-end Report 2010
Q4 2010 results

SEK 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          5
EBIT margin* (%)                                            9.3      9.3
Profit before tax*                                     2,274       2,280      0          5
Earnings per share (SEK)                                   2 38
                                                           2.38     1 72
                                                                    1.72     38
Cash flow from current operations                      2,389       2,544     -6




*   Excluding restructuring cost
** Adjusted for exchange rate movements
*** Adjusted for exchange rate movements and divestments
7                                                                                               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 debt
And debt
A 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 capacity




9                                                                          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 cost
EBIT SEKm             Q410 Q4 09 Q3 10         Increased investment in
EBIT 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 costs
EBIT SEKm              Q410 Q4 09 Q3 10

EBIT margin            7.8% 9.3% 7.6%



* Adjusted for exchange rate movements
  13                                                                                Year-end Report 2010
Packaging
Initiatives 2010
I 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
         ZeoCool




14                                                   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 costs
SALES SEKm             Q410 Q4 09 Q3 10


                        567
                                       512
                        281%**



                               149**




EBIT SEKm             Q410 Q4 09 Q3 10


EBIT 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 Products
Initiatives 2010
I 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 prices

SALES S
S   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 Pulp
EBIT SEKm             Q410 Q4 09 Q3 10
                                                        • Higher prices
EBIT 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
                   (    )p




18                                            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 papers




19                                              Year-end Report 2010
Q&A




20         Year-end Report 2010
21   Year-end Report 2010

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Presentation of SCA Year-end report 2010

  • 1. Year-end Report 2010 Jan Johansson, President and CEO Year-end Report 2010
  • 2. 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
  • 3. 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
  • 4. 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
  • 5. 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
  • 6. Full year 2010 results SEK millions Change, Change, unless otherwise stated 2010 2009 % %** Net sales 109,142 110,857 -2 5*** EBIT* 9,608 9,648 0 4 EBIT margin* (%) i * 8.8 88 8.7 87 Profit before tax* 8,492 8,004 6 10 Earnings per share (SEK) 7.90 7 90 6.78 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 6 Year-end Report 2010
  • 7. Q4 2010 results SEK 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 5 EBIT margin* (%) 9.3 9.3 Profit before tax* 2,274 2,280 0 5 Earnings per share (SEK) 2 38 2.38 1 72 1.72 38 Cash flow from current operations 2,389 2,544 -6 * Excluding restructuring cost ** Adjusted for exchange rate movements *** Adjusted for exchange rate movements and divestments 7 Year-end Report 2010
  • 8. 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
  • 9. Net debt And debt A 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 capacity 9 Year-end Report 2010
  • 10. 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
  • 11. 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 cost EBIT SEKm Q410 Q4 09 Q3 10  Increased investment in EBIT margin 11.5% 14.1% 11.4%** market activities * Adjusted for exchange rate movements ** Excluding restructuring costs 11 Year-end Report 2010
  • 12. 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
  • 13. 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 costs EBIT SEKm Q410 Q4 09 Q3 10 EBIT margin 7.8% 9.3% 7.6% * Adjusted for exchange rate movements 13 Year-end Report 2010
  • 14. Packaging Initiatives 2010 I 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  ZeoCool 14 Year-end Report 2010
  • 15. 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 costs SALES SEKm Q410 Q4 09 Q3 10 567 512 281%** 149** EBIT SEKm Q410 Q4 09 Q3 10 EBIT margin g 7.7% 2.1%** 6.9% * Adjusted for exchange rate movements, divestments and closures ** Excluding restructuring costs 15 Year-end Report 2010
  • 16. Forest Products Initiatives 2010 I 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
  • 17. 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 prices SALES S S 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 Pulp EBIT SEKm Q410 Q4 09 Q3 10 • Higher prices EBIT margin g 13.8% 15.7% 15.5%** * Adjusted for exchange rate movements ** Excluding restructuring cost 17 Year-end Report 2010
  • 18. Dividend  Proposed 8% increase of the dividend to SEK 4.00 (3.70) per share ( )p 18 Year-end Report 2010
  • 19. 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 papers 19 Year-end Report 2010
  • 20. Q&A 20 Year-end Report 2010
  • 21. 21 Year-end Report 2010