SCA presentation at UBS European Conference 2011

UBS conference Lennart Persson, CFO1 15 November 2011

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 15 November 2011

SCA GroupSales split 2010 Forest Products Sales split Personal Care 16% 24% 24% 36% Packaging Tissue3 15 November 2011

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 15 November 2011

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 15 November 2011

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 15 November 2011

Innovation for profitable growth Meet changing demands and requirements Create long-term, profitable differentiation Strengthen market positions Build stronger brands Drive growth7 15 November 2011

GrowthGrowth potential for hygiene products Global population growth An aging population Increased market penetration Higher disposable income Customers and consumers demand more comfort and sustainability8 15 November 2011

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 9 15 November 2011

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 products10 15 November 2011

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 brand11 15 November 2011

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 production12 15 November 2011

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 movements13 15 November 2011

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 costs14 15 November 2011

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 employees15 15 November 2011

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.16 15 November 2011 8

Binding offer for Georgia-Pacific’sEuropean tissue operations Offered price: EUR 1.32bn Already in year one the transaction is estimated to contribute to an increase of earnings per share and cash flow With fully realized synergies earnings per share are expected to increase with approx. SEK 1.70 Georgia-Pacific´s acceptance of this offer is subject to consultations with works councils where appropriate The transaction will be subject to customary consultation with employee representatives and will also be subject to approval by relevant competition authorities17 15 November 2011

Binding offer for Georgia-Pacific’sEuropean tissue operations Creates a leading European tissue company Strengthens our product offering and geographic reach in Europe Enhances our presence in key markets Good strategic fit in AFH tissue Substantial synergies Increased share of branded sales in our consumer tissue portfolio18 15 November 2011

Georgia-Pacific’s European tissue operations Sales: EUR 1.25bn*  Consumer tissue, approx. 60%  AFH tissue, approx. 30%  Personal care, approx. 5% EBIT margins on similar level as SCA’s tissue business Market positions  Consumer tissue, 11% market share  AFH tissue, 10% market share Well-known Lotus brand for AFH tissue and consumer tissue Approx. 5,000 employees 15 manufacturing sites in 7 countries 670,000 tonnes annual tissue capacity* Italy and Turkey are not included in the binding offer 19 15 November 2011

Substantial synergies Increased supply chain efficiency  Optimization of logistics  More efficient sourcing Improved SG&A and A&P efficiency  Annual synergies: EUR 125m  Improves Tissue EBIT margins by 2-2.5 percentage points  Full effect in 3 years after closing  Related costs: EUR 130m20 15 November 2011

Enhances SCA’s presenceIn both Consumer tissue and AFH tissue European Consumer tissue market 25% SCA SCA and GP 35% European AFH tissue market SCA and GP SCA 19% 30%21 15 November 2011

Increased share of branded sales In Consumer tissue SCA’s Consumer tissue sales SCA SCA and GP Retailers’ Branded brands BrandedRetailers’ 40% 50% brands 22 15 November 2011

Q&A23 15 November 2011

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.com24 15 November 2011

SCA presentation at UBS European Conference 2011

by SCA Svenska Cellulosa Aktiebolaget on Nov 21, 2011

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SCA presentation at UBS European Conference 2011 — Presentation Transcript