SCA presentation at Deutsche Bank Paper seminar 2011 in London

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http://www.sca.com/ir See or download the presentation of SCA's CFO Lennart Persson at the Deutsche Bank paper seminar in London, UK in November, 8 2011.

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SCA presentation at Deutsche Bank Paper seminar 2011 in London

  1. 1. Deutsche Bank paper seminar Lennart Persson, CFO1 8 November 2011
  2. 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 8 November 2011
  3. 3. SCA GroupSales split 2010 Forest Products Sales split Personal Care 16% 24% 24% 36% Packaging Tissue3 8 November 2011
  4. 4. Leading market positions Global and regionalNorth America EuropeAFH tissue: 3 Tissue: 1Incontinence care: 3 Corrugated board: 2 Baby diapers: 2 Incontinence care: 1Mexico Privately owned forests: 1Incontinence care: 1 Solid-wood products: 2Tissue: 2Feminine care: 1Baby diapers: 3 Global Incontinence care: 1 Colombia AFH tissue: 2 Australia Incontinence care: 1 Feminine care: 1 Feminine care: 1 Tissue: 1 Incontinence care: 1 Tissue: 2 4 8 November 2011
  5. 5. Strong global and regional brands Two global billion EUR brands Eastern Europe Europe North America Asia Pacific Latin America Sales of SEK 65bn, with sales in more than 100 countries5 8 November 2011
  6. 6. Strategic focus areas Cost reductions in all  Efficiency programs in  Personal Care  SCA Group 5%* business areas of close Packaging and Forest  Thin baby diaper  Personal Care 2%** to SEK 1bn*** Products  TENA Ultra thins  Emerging Markets 10%** Cash flow from current  Supply Chain  Strong TENA value  Tissue 2%** excellence and asset assortment operations SEK 7.4bn***  Emerging Markets 6%** utilization programs in  Tissue Tissue Europe  Packaging 20%*  Tork Xpressnap Café,  Restructuring program Tork Performance  Forest Products 3%** in baby diapers in  Tempo ice, Zoo Boxes Europe Acquisitions:  Packaging  New tissue plant in  Mexico- Copamex Mexico  Trueflo  ZeoCool  Turkey- 95% San Saglik  New personal care  Forest Products  Turkey- 50% Komili plant in Russia  Increased value  Brazil – Pro Descart  Further tissue added investments in Kostheim and Sovetsk  SCA and Fred.Olsen  Investment in Bollsta Renewables to construct wind farms sawmill* 2010 adjusted for exchange rate movements and divestments** 2010 adjusted for exchange rate movements*** 2010 6 8 November 2011
  7. 7. Strategic focusPackaging Focus capital on profitable segments Increase value content Managing the Cycle & Lowering cost base - Price management - Eliminate problem businesses - LEAN project Integrate the business - One Company - Paper Supply Platform Customer focus - Quality and Service - Innovation People - Management of change - Leadership7 8 November 2011
  8. 8. Strategic focusForest Products Shift toward more value-added products Utilize the potential for energy production Continued productivity improvements Greater raw material integration Gradual expansion of the pulp operation8 8 November 2011
  9. 9. Strategic focusHygiene businesses Strengthen positions and increase growth in main markets and emerging markets Increase the number of global brands Increase the pace of innovations Efficiency improvements9 8 November 2011
  10. 10. Innovation for profitable growth Meet changing demands and requirements Create long-term, profitable differentiation Strengthen market positions Build stronger brands Drive growth10 8 November 2011
  11. 11. GrowthGrowth potential for hygiene products Global population growth An aging population Increased market penetration Higher disposable income Customers and consumers demand more comfort and sustainability11 8 November 2011
  12. 12. 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 12 8 November 2011
  13. 13. 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 products13 8 November 2011
  14. 14. Sustainability as a business driver Reduced cost  ESAVE = SEK 600m in annual cost savings Improved competitive edge  Sustainability credentials generate good business  Great growth potential through customized offerings in D&E markets  Renewable energy, wind power, biofuels  World’s largest producer of FSC-certified products Attract investors  23% of investors in SCA shares make sustainability screening Reduced risk level Attract top talents Strengthen the brand14 8 November 2011
  15. 15. ForestA valuable asset Europe’s largest private forest owner – FSC certified Annual net growth of 1% Raw material integration and potential for electricity generation Our forests absorb as much carbon dioxide as is discharged from SCA’s entire production15 8 November 2011
  16. 16. Summary – 9M 2011 vs 9M 2010 Sales increased 6%*  Hygiene business  Higher volumes and prices  Good growth in emerging markets • Personal care, 12%** • Tissue, 10%**  Packaging and Forest Products  Packaging volumes increased 3%*** • Corrugated prices increased12%  Publication paper volumes increased 1%  Solid-wood product volumes increased 7% EBIT decreased 1%****  Higher prices and volumes  Cost savings  Raw material costs increased SEK 3.1bn  Negative currency impact, SEK 700m Profit before tax decreased 2%**** Cash flow from current operations: SEK 4,397m* Adjusted for exchange rate movements and divestments** Adjusted for exchange rate movements*** Excluding divestments**** Excluding restructuring costs and adjusted for exchange rate movements16 8 November 2011
  17. 17. Summary - Q3 2011 vs. Q2 2011 Group  Sales increased 1%  Higher prices  EBIT increased 13%*  Higher prices  Raw material costs increased SEK 280m  Profit before tax increased 11%* Business areas  Personal Care, EBIT increased 18%*  Higher prices and volumes  Higher raw material costs  Tissue, EBIT increased 21%*  Higher volumes  Higher prices and changed product mix  Packaging, EBIT increased 14%*  Higher prices  Lower volumes  Forest Products, EBIT flat*  Higher prices  Higher raw material costs * Excluding restructuring costs17 8 November 2011
  18. 18. Restructuring program Annual EBIT savings Total cost SEK 1,400m SEK 700m Gradual impact during Write down Cash 2012 - 2013 expenditure SEK 500m SEK 900m Q3 2011 costs Headcount reduction SEK 350m approximately 2,000 employees18 8 November 2011
  19. 19. Outlook 2011 Uncertainty in global economy. So far no negative impact on our business. Slight price decreases on raw material. Price increases in parts of our Hygiene business.19 8 November 2011
  20. 20. Q&A20 8 November 2011
  21. 21. 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.com21 8 November 2011

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