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SCA Capital Market Day 2012
 

SCA Capital Market Day 2012

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SCA hosted the Capital Markets Day in Stockholm. The Group-wide financial targets and strategy remains with a focus on efficiency, innovation, growth and sustainability. The target for return on ...

SCA hosted the Capital Markets Day in Stockholm. The Group-wide financial targets and strategy remains with a focus on efficiency, innovation, growth and sustainability. The target for return on capital employed for Tissue and Forest Products has been adjusted. In recent years, SCA has completed hygiene acquisitions and divested for example the packaging operations. In order to further strengthen profitability in the hygiene operations, measures are initiated for decreased costs and improved efficiency.

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    SCA Capital Market Day 2012 SCA Capital Market Day 2012 Presentation Transcript

    • SCA Capital Market Day 2012Jan Johansson, President and CEO
    • Macro EconomyChina’s economic slowdown… European debt crisis Holding back recovery To be, or not to be… Germans sick of payingU.S. election Effects of high unemployment The Arabic spring 2 CMD 2012
    • Market DriversGood growth opportunities Global population growth An aging population Increased market penetration Higher disposable income Customers and consumers demand more comfort and sustainability3 CMD 2012
    • Global Hygiene Products MarketIncreased penetration and aging and growing population Personal Care Tissue 2010 20174 CMD 2012
    • Aging PopulationTotal population aged over 60 approaching 1 billion by 2017Millions aged over 60 years old 1 200 1 000 +25% 800 600 2010 2017 400 +34% +12% 200 +21% 0 Total world Europe China USA5 CMD 2012
    • Hygiene ProductsHigh potential in markets with low penetration Usage of Hygiene products Units/capita/year Units/child/year Units/woman/year Kg/capita/year North America Western Europe Eastern Europe Latin America Asia6 CMD 2012
    • Today SCA is a leading global Hygiene and Forest products company7 CMD 2012
    • SCA Group Net sales of SEK 91bn* 37,000 employees Sales in more than 100 countries World’s second-largest hygiene company #1 or #2 positions in close to 80 countries Strong brands; TEN and Tork are leading global billion-euro brands for Incontinence care and AFH tissue Europe’s largest private forest owner Europe’s second-largest sawmill company Several of the world’s most prestigious sustainability awards* 2011 sales adjusted for closed transactions8 CMD 2012
    • Transforming SCA Divestment of the Packaging business, excluding the two kraftliner mills Acquisition of Georgia-Pacific’s European tissue operations Acquisitions in emerging markets  Everbeauty in Asia  Pro Descart in Brazil  San Saglik and Komili(50%) in Turkey Joint venture in Australia/New Zealand Divestment of Aylesford Newsprint Efficiency program Leadership and culture9 CMD 2012
    • SCA GroupHygiene business is growing % of net sales ~20%* 54% 40% 46% 60% ~80%* Forest Products and Hygiene products Packaging (Personal Care and Tissue)10 CMD 2012
    • SCA Group 9 months 2012 sales and EBIT by Business Area Sales by Business Area EBIT by Business AreaForest Products Personal Care Forest Products Personal Care 22% 16% 30% 35% 48% 49% Tissue Tissue 11 CMD 2012
    • SCA Group Sales by Product Category Personal Care TissueFeminine care 15% Incontinence products AFH tissue 38% 54% 31% 62%Baby diapers 73% branded Consumer tissue 52% branded 12 CMD 2012
    • Growth High growth in Emerging markets Q3 2012 Emerging markets sales growth: Personal Care: +26%* Tissue: +20%* % of Personal Care sales** % of Tissue sales** Emerging markets 16% Emerging markets 37%Mature markets Mature markets * Adjusted for exchange rate movements ** Q3 2012 13 CMD 2012
    • Leading Market positions Globally and regionally Value market positionsNorth America Nordic regionIncontinence products: 2 Incontinence products: 1 EuropeAFH tissue: 3 Tissue: 1 Baby diapers: 1 AFH tissue: 1 Incontinence products 1Mexico Baby diapers: 3 Consumer tissue: 2Incontinence products: 1 Feminine care 3 Feminine care 2Feminine care: 1 Private forest owners: 1Consumer tissue 2 Solid-wood products: 2AFH tissue: 3Baby diapers: 3 Asia Incontinence products: 1Colombia GloballyIncontinence products: 1 Incontinence products: 1Feminine care: 1 AFH tissue: 1Tissue: 1 Consumer tissue: 2Baby diapers 2 14 CMD 2012
    • SCA Group’s Priorities EFFICIENCY INNOVATION GROWTH SUSTAINABILITY15 CMD 2012
    • Sustainability People Nature• Health & Safety • Climate & Energy• Hygiene solutions • Water• Sustainable innovations • Fiber sourcing &• Code of Conduct Biodiversity Financials • Return on capital employed • Growth • Capital structure 16 CMD 2012
    • Efficiency Restructuring program in baby diapers in Europe completed 2011 Efficiency program  Annual cost saving: EUR 80m  Higher machine efficiency and reduced CAPEX Cost and productivity program  Annual cost saving: EUR 300m Georgia-Pacific synergies  Annual cost saving: EUR 125m Energy efficiency program  Annual cost saving: EUR 70m Efficiency improvements in Forest Products Investments in upgrades and new capacity17 CMD 2012
    • Innovation drives Profitable growthStrengthens market positions and profitability Meet changing demands and requirements Create long-term, profitable differentiation Strengthen market positions Build stronger brands Drive growth18 CMD 2012
    • SCA’s Market Priority Mature markets Established Not-present  Improve profitability emerging markets emerging markets  Increased cash flow  Profitable growth  Selected entry generation  Strengthen market  Strengthen market positions positions  Category expansion  Category expansion19 CMD 2012
    • Financial Targets Group ROCE** 13% Debt/Equity 0.70 Debt payment capacity above 35% Dividend policy 1/3 of cash flow from current operations Business areas Sales growth* ROCE** Personal Care 5-7% 30% Tissue 3-4% 15% Forest Products in line with market in top quartile * Annual organic sales growth ** Return on capital employed20 CMD 2012
    • Summary Transformation Leading brands and market positions Strong product portfolio and innovations Good growth opportunities Substantial efficiency improvements Profitability improvement EFFICIENCY INNOVATION GROWTH SUSTAINABILITY21 CMD 2012
    • Hygiene Operations Mats Berencreutz, Executive Vice President22 CMD 2012
    • Strong Brands and Market positions Strong brands and leading global billion-euro brands #1 or #2 positions in close to 80 countries23 CMD 2012
    • Hygiene Aspiration To own and develop 6-10 global brand positionings of > EUR 1bn each Strengthen our profitability in core markets Increase share of revenues and profit from D&E markets Increase share of revenues and profit from less capital intensive opportunities Increase share of branded business vs. retailer brands Increase share of No. 1 or No. 2 positions in our branded business portfolio24 CMD 2012
    • Category Priorities Incontinence Away From Consumer Baby Feminine care Home tissue Innovation and Cost leadership Leverage our Brands and broaden Offer Growth D&E markets Lead & shape  Go to market  Secure  Cost effective  Drive scale  Products and  Products and profitability to be on par valued services  Excellence in valued services  Selective D&E with market brand Growth  Growth leader  Penetration  Leverage market management mature markets synergies globally  Speed to  Early entrance  Early entrance market new markets new markets  Competitive offer premium and value25 CMD 2012
    • Priorities Core Organization Cost savings capabilities effectiveness • Innovation & • Faster, simplified • Leaner, more agile Marketing decision making organization • S&M execution • Clarified ways of • Shift resources where • Global, integrated working required to win supply • Best-in-class support Drive Growth Drive Efficiencies26 CMD 2012
    • Cost and Productivity program*Key actions Manufacturing  Blueprint implementation Cost savings  Asset utilization improvements  Best practice sharing SG&A Sourcing  World-class sourcing processes Logistics 12%  Leverage global scale 6% Manufacturing  Consolidation of suppliers 43% Logistics  Optimize warehouse footprint 39%  Lower transportation costs Sourcing  Working capital management SG&A  Fewer layers in the organization  Clear roles and responsibilities, no overlaps  Center-led support model Total annual cost savings: EUR 300m Related restructuring costs: EUR 100m Headcount reduction: approx. 1,500 * Excluding Georgia-Pacific acquisition27 CMD 2012
    • Cost and Productivity programSubstantial cost savings Estimates of Year-end run rate savings EURm 350 300 300 250 200 200 150 100 50 0 2013 201428 CMD 2012
    • Georgia-Pacific AcquisitionStrengthens SCA’s No. 1 position in Tissue in Europe Consumer tissue Away From Home No. 1 No. 1 30% market share 31% market share29 CMD 2012
    • Georgia-Pacific AcquisitionStrengthens our no.1 position Perfect strategic fit Substantial synergies Strengthens our geographic presence in Europe Strong innovation portfolio Strengthens our branded portfolio30 CMD 2012
    • Georgia-Pacific AcquisitionSynergies Supply chain synergies Cost synergies Cost synergies  Manufacturing excellence and best practice Support and  Footprint optimization overhead  Scale effects raw materials 25%  Logistics optimization 60% Supply chain 15% Sales and Marketing Sales and Marketing  S&M organization consolidation  A&P efficiency Support and overhead  Consolidation of support functions Total annual cost synergies: EUR 125m Related restructuring costs: EUR 130m31 CMD 2012
    • Georgia-Pacific AcquisitionSynergies Estimates of Year-end run rate cost savings EURm 150 125 100 90 50 50 0 2013 2014 201532 CMD 2012
    • SummaryCost and Productivity program and Georgia-Pacific synergies Estimates of Year-end run rate cost savings EURm 450 425 400 390 350 300 250 250 200 150 100 50 0 2013 2014 201533 CMD 2012
    • Summary Strong brands and market positions Substantial savings from cost and productivity program Georgia-Pacific acquisition strengthens our position and will generate substantial cost synergies EFFICIENCY INNOVATION GROWTH SUSTAINABILITY34 CMD 2012
    • SCA Global Hygiene SupplyWilliam Ledger, President
    • SCA World class Production facilitiesTissue 86 factories for hygiene products worldwide, incl. JV Personal Care36 CMD 2012
    • SCA’s Hygiene BusinessSupply cost is a large part of turnover Raw Material/ Energy Other Cons.Grossprofit Cost of Goods Others Distr. CostsSavings Depreciation Personnel costs37 CMD 2012
    • Gearing up to Capture Savings We have programs to Energy address all cost savings components Energy Logistics Hygiene Distr. Sourcing Costs Waste reduction Raw Mat/ Others Cons. Personnel costs Blue Print Best practice sharing Depreciation Others38 CMD 2012
    • Global Best Practice Sharingdrives Performance39 CMD 2012
    • Sourcing Savings Renewed strong Global sourcing capabilities 700 initiatives identified and pursued Georgia-Pacific Sourcing integration Controlled by a program office40 CMD 2012
    • Logistics Savings Global Strategy Reduce operating cost Transport optimi- Transport Cost sourcing Warehouse zation footprint down Free-up liquidity Capital Stock turnover reduction upImprove customer service Value Added Sales Services & with logistics up as differentiator 41 CMD 2012
    • Driving Growth  Organic  New Paper Machine in Germany (Kostheim)  Extension of Tissue Production in Russia (Sovetsk)  M&A  Acquisitions integration, e.g. Georgia-Pacific  Greenfield42 CMD 2012
    • Summary Safety first Blueprint at all sites Manufacturing Excellence Lowest cost in Industry Earliest to market in key categories Seamless integration of all acquisitions Standardized low cost site for D&E Sustainable operations with global knowledge sharing EFFICIENCY INNOVATION GROWTH SUSTAINABILITY43 CMD 2012
    • SCA Forest ProductsUlf Larsson, President
    • SCA Forest ProductsEurope’s largest forest owner and a cost efficient producer Forest Containerboard Pulp Publication paper Energy Solid wood R&D Distribution/logistics45 CMD 2012
    • SCA Forest ProductsBusiness overview 2011 net sales, SEK 20bn 4,800 employees46 CMD 2012
    • Market positions Publication papers Solid-wood products Kraftliner Growth rate: -2 – -4% p.a. Growth rate: 1% p.a. Growth rate: 1 – 2% p.a. SCA position No 5 SCA position No 2 SCA position No 2 2% 5% 20 %47 CMD 2012
    • Market OpportunitiesSCA Forest Products Long term demand growth for all product areas except publication papers Growing interest for wind and biofuel Truly sustainable products for environmentally aware consumers48 CMD 2012
    • SCA Forest ProductsPriorities Improvement program in difficult market and currency situation Reduced exposure to standard newsprint Product renewal towards fresh fiber based packaging papers Wind power expansion Improved market position towards Scandinavian, French and UK building merchants49 CMD 2012
    • Cost and ProductivitySCA Forest Products A strong track record of improving cost and productivity Examples: - Ortviken + 4 %/a in production/FTE 2006-2011 - Saw mills + 3 %/a in production/FTE 2006-2011 Additional actions necessary due to current market and currency situation Reinforced improvement program launched in all units50 CMD 2012
    • Innovative SolutionsGood potential in renewable energy Wind power business model  JV concept where partners Statkraft and Fred.Olsen Renewables allocate capex to SCA land  SCA income from fixed lease and energy price dependent components  Hedge for electricity to SCA/Ortviken  Decided: SEK 8bn, 1.6 TWh/a generation In pipeline: SEK 16bn, 3.4 TWh/a generation Biofuels  Logging residuals and by-products from forest industry becomes biofuel  Deliveries of 3.2 TWh in 2011  Only 1/3 of potential of logging residuals utilized51 CMD 2012
    • Sustainability - our DNACommercial advantages FSC* products Publication Papers SCA is the world’s largest supplier of FSC* certified forest products Strong growth in sales of FSC* solid-wood, pulp and paper products SCA is also PEFC** certified* Forest Stewardship Council** Program for the Endorsement of Forest Certification52 CMD 2012
    • Sustainability - our DNAReduced cost and environmental impact Investments in lime kilns Replacing oil with biofuels Significantly reduced carbon dioxide emissions from fossil fuels Annual cost saving of approximately SEK 50m for each mill  Östrand - 17 500 m3 oil/a - 52 500 ton CO2/a  Munksund - 7 500 m3 oil/a - 22 500 ton CO2/a53 CMD 2012
    • SummarySCA Forest Products – Top 3 priorities1. Product renewal from publication papers and especially from standard newsprint2. Commercialization of wind power3. Improvement program to address market and currency situation EFFICIENCY INNOVATION GROWTH SUSTAINABILITY54 CMD 2012
    • Global Hygiene CategoryChristoph Michalski, President
    • Innovation and BrandingStrengthens market positions and profitability Build global brand positionings for scale Drive innovation for growth and profitWithin a changing global consumer/customer environment Changing demographics Urbanization Price pressures Private Label Digital globally56 CMD 2012
    • Baby Diapers ONE GLOBAL PACK DESIGN57 CMD 2012
    • Performance through Innovations58 CMD 2012
    • Lights by TENAInnovation successUK launch summary 2011/12 14% sales growth vs. previous year 25% new consumers recruited from Feminine care Base sales are at the highest level for 3 years lights by TENA have grown shopper numbers • 30% within lights by TENA only • 70% on repertoire shoppers (liners, maxi and ultra mix) Brand Equity showed improvement amongst younger consumers on parameters like substitutability and quality59 CMD 2012
    • Dobles launchInnovation success Successfully launched in Colombia, Australia and France Increased SCA liners market share by recruiting new consumers from competition Reaching 5.8% value market share of total liners market Dobles share of total liners assortment approx. 12% in Colombia, 9% in Australasia and 7% in France Dobles packaging design in Colombia60 CMD 2012
    • SCA builds strong Patent positions forValuable Innovations The Tork dispenser for SCA builds long term hand towel rolls strategic patent protection for The unique lock hygiene innovation activities The seamless, strong construction of the The feeding dispenser On average SCA files 80 new mechanism of the cassette patent applications per year The unique design of the complete SCA’s patent portfolio Washroom dispenser A loading and retention mechanism for paper family consists of around 1,000 refill, including the unique plug patent families, including The function of manual paper loading those transferred to SCA through acquisitions in 2012 one example of an SCA invention, protected by several global patent families61 CMD 2012
    • Unify and Connect SCA and our Product Brands62 CMD 2012
    • SCA in the Volvo Ocean Race Empowering women Strengthen the SCA and product brands Increase sales and commercial operations performance A stronger one company feeling 63 CMD 2012
    • Summary Branding and constant innovation creating profitable growth today and tomorrow EFFICIENCY INNOVATION GROWTH SUSTAINABILITY CMD 201264 CMD 2012
    • SCA Consumer Goods EuropeMagnus Groth, President
    • One face to retail Customers in Europe 2011 net sales of SEK 24.5bn Consumer tissue biggest category Sales by category Number of employees: 4,300 7% 2% Consumer tissue 5% Baby 12% Feminine Incontinence products Retail 74% Other (Cotton pads)66 CMD 2012
    • Trends in Retail Consolidation and internationalization Multichannel and multiformat Internet shopping Promotions Retailer brands67 CMD 2012
    • Market Positions Europe Consumer Tissue Baby Feminine SCA #1  SCA #3  SCA #3 Growth rate: 3.6%  Growth rate: 2.1%  Growth rate: 1.1% 21% 26% 30% 45% 50% 11% 56% 8% 13% 12% 16% 12% SCA KC Sofidel Others P&G KC SCA Others P&G J&J SCA Others 68 CMD 2012
    • Opportunities One face to the Retail customers One Go to market approach Dual-track strategy69 CMD 2012
    • EfficiencyGo to Market Advantage Channel Management Account Management Pricing ManagementTrade Spend and Promotion Shopper Engagement and Execution at Retail effectiveness Category ManagementSales Force Effectiveness Logistics Management70 CMD 2012
    • Maximizing the Shopper journeyPromotional SupportOnline Home Store Fixture +20% +14% Confirmed contact with 61k shoppers71 CMD 2012
    • InnovationBaby private label success story Strategic Partnerships Product innovation and improved quality Thin diapers meet consumer demand Dedicated supply chain and retailer brand organization Secured new contracts and increased volumes with 50%72 CMD 2012
    • GrowthConsumer Tissue in Russia CAGR*: 24% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Zewa Net Sales in Russia * Compound annual growth rate73 CMD 2012
    • Summary Strong supplier to Retailers Go to Market is a competitive advantage Innovations enable growing faster than the market EFFICIENCY INNOVATION GROWTH SUSTAINABILITY74 CMD 2012
    • SCA AFH ProfessionalHygiene EuropeSune Lundin, President
    • Away From HomeBusiness OverviewProducts Tork provides complete professional dispenser and refill systems for:  Personal hygiene (hand wiping tissue, toilet paper and soap)  Products for wiping, cleaning and polishing applications  Napkins and related table-top productsCustomers  Industrial  Trade and service  Education  Hotels, restaurants, catering  Health care76 CMD 2012
    • Go to Market Distributors End Service providers Customers77 CMD 2012
    • AFH tissueSCA is the global market leader SCA is global No. 1 19 % market share78 CMD 2012
    • SCA AFH Professional Hygiene EuropeBusiness overview  2011 net sales: SEK 7.2bn  Approx. 10,500 Employees in 2012  Clear No. 1 position with 31% market share  Market leader in all Regions with the best Supply Chain footprint79 CMD 2012
    • Many Opportunities Sustainability Innovation & Digital Hygiene awareness awareness world Supply Chain Efficiency Strong market Market growth positions in Europe80 CMD 2012
    • Growth Market growth in Europe of 2% Capturing adjacent growth in the hygiene sector  Value adding products and services  Soaps, disinfectants, cleaning solutions, washroom solutions and design Well positioned for growth e.g. in Russia through local manufacturing81 CMD 2012
    • Innovation82 CMD 2012
    • Summary Strong market positions and good growth opportunities Increased efficiency in supply chain Sustainability as a differentiator Innovations add value EFFICIENCY INNOVATION GROWTH SUSTAINABILITY83 CMD 2012
    • SCA AmericasDon Lewis, President
    • SCA Americas Business overview Sales by Category 6% 9% 2011 net sales SEK 15.6bn 46% AFH 8,300 employees Consumer tissue 20% Incontinence care Feminine Baby 19% Sales by Region 22% North Americas South America Mexico & Central America 22% 56% 85 CMD 2012
    • Market PositionsNorth America AFH Incontinence care  Growth rate*: 1.4%  Growth rate*: 4.7%  Market position: #3  Market position: #2 AFH North America Incontinence care North America 22% 30% GP 25% K-C K-C 34% SCA SCA Medline 7% Bay West First Quality Other 18% Other 11% 20% 21% 12% * CAGR 2012-2015 Healthcare includes Institutions and Homecare Source: Global Market Database 201186 CMD 2012
    • Market PositionsMexico & Central America Tissue Personal Care  Growth rate*: 4.6%  Growth rate*: 4.8 %  Market positions: #2 Tissue  Market positions: #2 Personal Care (#2 in Consumer tissue & AFH) (#1 Incontinence care; #1 Feminine, #3 Baby) Mexico/Central America Mexico/Central America Tissue Personal Care 16% 10% 5% K-C K-C 5% 9% SCA SCA 6% FAPSA Mabesa 61% P&G 61% P&G 15% 12% Other Other *CAGR 2012-201587 CMD 2012
    • Market PositionsSouth America Tissue Personal Care  Growth rate*: 5.5%  Growth rate*: 4.8%  Market positions: #3 Tissue (Consumer  Market positions: #1 Incontinence; tissue & AFH) #3 Feminine, #4 Baby South America South America Tissue Personal Care 24% CMPC K-C 24% K-C P&G 40% 37% SCA J&J Santher SCA 19% Other 19% Other 7% 10% 10% 10% *CAGR 2012-201588 CMD 2012
    • AFH tissue North America35% of sales from value added products 35% 33% 29% 26% 20% 16% 13% 9% 8% 6% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 YTD89 CMD 2012
    • New tissue plant in MexicoImproved products and increased cost efficiency90 CMD 2012
    • Mexico/Central America Incontinence marketOpportunity ripe for SCA as category leader Mexican Incontinence category growing at 15% annually 60+ age group to double by 2025 Current consumption shows huge opportunity SCA the undisputed leader, 40% share91 CMD 2012
    • Leveraging strong Brands and Marketshare in Colombia with adjacent products92 CMD 2012
    • Brazil Expansion  2011 acquisition of Pro Descart for #2 market position in incontinence products  Incontinence market growing rapidly  2012 TENA launch93 CMD 2012
    • Summary  Insight-driven innovation fueling value added growth in North America, world’s largest hygiene markets  Powerful hygiene positions in the fast-growing Latin American market EFFICIENCY INNOVATION GROWTH SUSTAINABILITY94 CMD 2012
    • SCA Asia PacificUlf Söderström, President
    • SCA Asia Pacific Business overview Sales by category (post Everbeauty acq) 1%  Net sales 2011: SEK 2bn* 8%  2,900 employees Baby  4 manufacturing plants and 14 OEM Feminine 28% (Malaysia, China, Taiwan) Incontinence care 60%  Strong global and regional brands Consumer tissue AFH  No.1 Incontinence brand in Asia (ex. Japan) 3% Sales by regions 2011 (post Everbeauty acq) China Hong Kong 4% 8% 12% Japan JV 4% 8% Korea Taiwan 8% Malaysia 37% Philippines 17% Singapore 2%* Excluding Australia and New Zeeland Thailand 96 CMD 2012
    • Market PositionsAsia  CAGR* 2011-2017: 6.2%Incontinence care Baby 4% 3% UC 4% 3% UC 5% 5% Other Other 5% Livedo P&G 6% 27% 27% Daio 5% K-C 9% Hakujuji Kao 9% 10% Kao DSG 21% SCA 22% SCA 15% 20% Nepia HengAn Kami Shoji Daio * Compound annual growth rate97 CMD 2012
    • Market PositionsKey markets South Korea Incontinence care: 2 China Mainland Incontinence care: 2 Japan Incontinence care: 5 Baby: 5 Taiwan Incontinence care: 1Thailand Baby: 5Baby: 3 Hong Kong Hankies and box facials: 1 Malaysia Baby: 1 Singapore Incontinence care: 1 Baby: 3 Feminine: 3 Asia Incontinence care brand* 1 * Excluding Japan98 CMD 2012
    • Market Opportunities High organic hygiene growth in China Many other fast emerging hygiene markets Consolidation opportunities More sophisticated consumers Rising sustainability awareness Significant social media influence99 CMD 2012
    • Chinese Market Biggest consumer group in the world  21 million new born babies in 2011  Age 60+ accounts for 13% of total population Growing purchasing power Increasing hygiene awareness Actionable sustainability commitment100 CMD 2012
    • Acquisition of EverbeautyLeading Asian personal care company National sales & distribution network in China Efficient low cost production sites Strong economy segment brands Successful integration program Ambitious growth plans101 CMD 2012
    • Innovation Case During 2012 R&D Asia continued it’s successful momentum and achievement by launching the following new innovations*.1. Flirt Value  A more affordable TENA Belt2. Libresse PureFresh Green Tea Odor Control  Feminine hygiene range of sanitary pads and panty liners, with Green Tea scent and odor control feature3. Tempo Toilet paper  A premium quality toilet paper encompassing both Neutral and Applewood * All innovations from start to launch within approx. 7 months102 CMD 2012
    • SummaryAsia is the engine of future hygiene growth EFFICIENCY INNOVATION GROWTH SUSTAINABILITY103 CMD 2012
    • SCA Incontinence Care EuropeMargareta Lehmann, President
    • Incontinence CareSCA is the clear global market leader SCA is global No. 1 25% market share No. 2 has 9%105 CMD 2012
    • SCA Incontinence Care EuropeBusiness overview  2011 net sales of SEK 9.5bn Channel Split European Incontinence Market  Clear European market leader with 41% market share and strong positions 18% in all channels  Approx. 1,000 employees 48% Home care 34% Institution  All market segments in one Retail organization to secure synergies106 CMD 2012
    • Market PositionClear European No. 1 in Incontinence care  European market growth rate 3%  Average Market Penetration 37% Others 10% Abena 3% Attends 4% Indas 4% Artsana 4% SCA 41% P&G 5% TZMO 7% Ontex (incl Hartmann Lille) 10% 13%107 CMD 2012
    • Market OpportunitiesMany growth opportunities to exploit growth in TENA Aging society Low penetration rates  Eastern Europe  Light Incontinence (Lady & Men) Bakgrunds bild Increased awareness of the category Holistic view on care Lobbying and Co-payment TENA brand strength108 CMD 2012
    • Aging PopulationTotal population aged over 60 approaching 1 billion by 2017Millions aged over 60 years old 1 200 1 000 +25% 800 600 2010 2017 400 +34% 200 +12% +21% 0 Total world Europe China USA109 CMD 2012
    • Grow Market sharetake>50% of market growth Drive growth in selected market/segment combinations Grow tender business profitably by develop tender excellence – influencing tender criterias Increase competiveness in all quality tiers in the assortment Drive Retail growth in all key markets110 CMD 2012
    • Grow Penetration in Key segmentsExamples Market Penetration %  Increase market value 80 by upgrading to new 70 modern concepts, e.g. 60 Pants 50  Increase usage & 40 value by influencing reimbursement models 30  New users by 20 innovation and 10 communication Average Pants Light Light market Inco Inco Female Male 111 CMD 2012
    • Expand the CategoryLeverage TENA strength Service Diagnostics  Build on core competence Skin Patient to expand beyond Absorbent care Incontinence S hygiene absorbent products products  Expand core competence into new service areas Diagnostics Training112 CMD 2012
    • InnovationRight Product Offer Improve Increased Heavy Incontinence the Core development in all quality tiers Upgrades & Promising launch program in New Launches Light Incontinence & Pants Acquisition of new innovation Drive concepts; Diagnostics, Patient new areas Hygiene113 CMD 2012
    • Summary Global Brand with potential: • Growing market - demography and low penetration • Customer driven innovation • Expertise in continence management • Strong Go to market approach EFFICIENCY INNOVATION GROWTH SUSTAINABILITY114 CMD 2012
    • Summary Transformation Leading brands and market positions Strong product portfolio and innovations Good growth opportunities Substantial efficiency improvements Profitability improvement EFFICIENCY INNOVATION GROWTH SUSTAINABILITY115 CMD 2012
    • IR Contacts:Johan Karlsson, VP Investor Relations Louise Tjeder, Director Investor RelationsTel: +46 8 788 51 30 Tel: +46 8 788 51 62 Email: ir@sca.com Website: www.sca.com