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SCA presentation at Cheuvreux Pan Europe Forum 2011

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May 16, 2011 Mats Berencreutz, COO SCA Hygiene Businesses, spoke at the Cheuvreux Pan-Europe 2011 Forum in London, UK. …

May 16, 2011 Mats Berencreutz, COO SCA Hygiene Businesses, spoke at the Cheuvreux Pan-Europe 2011 Forum in London, UK.

http://www.sca.com/ir

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  • 1. Cheuvreux Pan Europe Forum 2011Mats Berencreutz, COO Hygiene Businesses 16 May 2011
  • 2. SCA GroupA global hygiene products and paper company Net sales SEK 107bn 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 company2 16 May 2011
  • 3. SCA Group Sales and EBIT split 2010EBIT split EBIT split Forest Products Sales split Personal Care 25% 29% 16% 24% 24% 36% 16% 30% Packaging Tissue 3 16 May 2011
  • 4. Leading market positions Global and regional Nordic region Incontinence care: 1 Baby diapers: 1North America AFH tissue: 1AFH tissue: 3 Consumer tissue: 2Incontinence care: 3 Europe Tissue: 1 Corrugated board: 2Mexico Baby diapers: 3Incontinence care: 1 Incontinence care: 1Tissue: 2 Privately owned forests: 1Feminine care: 3Baby diapers: 3 Global Incontinence care: 1 Colombia AFH tissue: 3 Australia Incontinence care: 1 Feminine care: 1 Feminine care: 1 Tissue: 1 Incontinence care: 1 Tissue: 2 4 16 May 2011
  • 5. Strong global and regional brands Eastern Europe North America Europe Latin America Asia Pacific5 16 May 2011
  • 6. SCA Group Strategic Priorities  Cost reductions in all  Efficiency programs in  Personal Care  SCA Group 5%* 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 current operations: of 18 packaging units assortment  Tissue 2%** SEK 7.4bn  Emerging markets 6%**  Supply chain  Tissue excellence and asset  Tork Xpressnap  Packaging 20%* utilization programs in Café Tissue Europe  Tork Performance  Forest Products 3%**  Tempo ice  Restructuring program in Baby diapers in  Packaging Europe  Trueflo  New tissue plant in  ZeoCool Mexico  Forest Products  New Personal Care  Increased value plant in Russia added* Adjusted for exchange rate movements, divestments and closures* *Adjusted for exchange rate movements 6 16 May 2011
  • 7. Growth High potential in markets with low penetration Usage of hygiene products Units/capita/year Units/child/year Units/woman/year Kg/capita/yearPenetrationin maturemarketsaround 35% North America Western Europe Eastern Europe Latin America Asia 7 16 May 2011
  • 8. GrowthSCA’s growth markets Latin America  Strong SCA positions South East Asia  Good market growth  Favourable socio-demographics Eastern Europe /Russia  Good market growth Middle East  Favourable socio-demographics China  Incontinence care products8 16 May 2011
  • 9. Increased pace of innovationStrengthens market positions9 16 May 2011
  • 10. Personal care Initiatives 2010  Restructuring program in baby diapers in Net sales 2010: Europe  Annual savings of EUR 15m with full effect SEK 25bn in Q3 2011  Investment in local production in Russia  Acquisition of Copamex baby diapers business  No. 3 in Mexico Feminine care Incontinence care  Growth 17% 56%  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%* Baby diapers 27%  Innovation  TENA Ultra thins  Thin baby diaper  Strong TENA value assortment* Adjusted for exchange rate movements 10 16 May 2011 23 november 2010
  • 11. Tissue Initiatives 2010  Implementation of price increases Net sales 2010:  Investment in new tissue plant in Mexico SEK 40 bn  European brand migration project Consumer  Growth tissue  Tork has gained market share in Europe 62% and North America  Emerging market sales increased 6%*  Innovation  Tork Xpressnap Café  Tork Performance AFH-tissue  Tempo Ice 38%  Tempo Kids  Tempo toilet tissue* Adjusted for exchange rate movements 11 16 May 2011 23 november 2010
  • 12. PackagingInitiatives 2010 Finalized restructuring program Net sales 2010:  Annualized savings of SEK SEK 28bn 1,070m Divestment of the Asian Protective packaging 3% packaging operation Industrial packaging 4% Service 4%  Annual sales of USD 250m Price increases Consumer Innovation packaging 20%  Trueflo  ZeoCool Conventional corrugated board 69%12 16 May 2011 23 november 2010
  • 13. Forest ProductsInitiatives 2010  Efficiency project at Ortviken Net sales 2010: paper mill SEK 17bn  Annual savings of SEK 45m Timber 8% when fully realized LWC-paper Pulp  Creation of Gällö timber AB 16% 18%  SCA Energy, new business unit SC-paper  SCA’s deliveries of FSC 17% certified publication paper increased 35% Solid-wood products Newsprint 27% 14%13 16 May 2011 23 november 2010
  • 14. Summary – Q1 2011 Sales increased 6%*  Hygiene business  Stable demand in mature markets  Good growth in emerging markets, 8%**  Packaging and Forest Products  Corrugated volumes flat, prices increased 15%  Publication paper volumes decreased 5%  Solid-wood product volumes increased 13% EBIT increased 10%***  Higher prices and volumes  Cost savings  Significantly higher raw material costs, SEK 1.3bn  Negative currency impact, SEK 300m Profit before tax increased 10%*** Cash flow from current operations: SEK 353m* Adjusted for exchange rate movements and divestments** Adjusted for exchange rate movements*** Excluding restructuring costs and adjusted for exchange rate movements 14 16 May 2011 23 november 2010
  • 15. Significantly increased raw material prices NBSK pulp Recovered paper - Europe1050 USD/metric ton USD/Metric tonne EUR/ton EUR/t1025 1901000 975 950 170 925 900 875 150 850 825 800 130 775 750 725 110 700 675 650 90 625 600 575 70 550 525 500 50 475 450 425 30 400 -00 -01 -02 -03 -04 -05 -06 -07 -08 -09 -10 -11 -98 -99 -00 -01 -02 -03 -04 -05 -06 -07 -08 -09 -10 -11 OCC ONP/OMG NBSK PIX Value Recovered paper - US Oil based material EUR/Kg 1,75 USD/short ton EUR / kg450 1,50400 1,25350 1,00300250 0,75200 0,50150100 0,25 50 0,00 0 jan-03 jan-04 jan-05 jan-06 jan-07 jan-08 jan-09 jan-10 jan-11 -93 -94 -95 -96 -97 -98 -99 -00 -01 -02 -03 -04 -05 -06 -07 -08 -09 -10 -11 Polyethylene (PE) Bags, backsheet, pack.film Propylene (Contract fd) Superabsorbent High grade deinking Oil (eur/kg) Polypropylene (PP homo) NW, Fibres15 16 May 2011 23 november 2010
  • 16. Q1 2011 resultsSEK millions Q1 Q1 Change, Change, unless otherwise stated 2011 2010 % %**Net sales 25,393 26,199 *** -3 6 ****EBIT* 2,112 2,027 4 10EBIT margin* (%) 8.3 7.7Profit before tax* 1,810 1,748 4 10Earnings per share (SEK) 1.89 1.53 24Cash flow from current operations 353 1,148Debt/Equity ratio 0.49 0.57* Adjusted for Packaging restructuring costs in 2010** Adjusted for exchange rate movements*** Net sales from SCA recycling business have been reclassified to other income with retroactive adjustment from 2010**** Adjusted for exchange rate movements and divestments16 16 May 2011 23 november 2010
  • 17. Initiatives 2011 Investments New tissue machine, New tissue machine, Bollsta sawmill, Germany Russia Sweden Start-up 2013  Start-up 2013  Two new biofuel boilers Capacity: 60,000 ton  Capacity: 60,000 ton  Increased drying capacity Primarily AFH tissue  Investment: SEK 1.2bn  Upgrade of the saw line products  Increased production Investment: SEK 1.1bn capacity from 450,000 to 525,000 cubic metres  Investment: SEK 300m Increases capacity, efficiency and profitability 17 16 May 2011 23 november 2010
  • 18. 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 for Personal Care, Tissue and publication papers during H218 16 May 2011 23 november 2010
  • 19. Q&A19 16 May 2011
  • 20. IR Contacts: Johan Karlsson, VP Investor Relations Jessica Ölvestad, Manager Investor Relations Tel: +46 8 788 51 30 Tel: +46 8 788 52 82 Email: ir@sca.com Website: www.sca.com20 16 May 2011

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