SCA Year-end Report 2013

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This is SCAs presentation of the Year-end Report 2013. The presentation was held by CEO Jan Johansson on January 29. SCA further strengthened its position in emerging markets in 2013. During the fourth quarter of 2013, the offer for the Chinese tissue company Vinda was completed, and SCA is today the majority owner of Vinda with 51.4% ownership in the company. SCA decided during the year to invest in local production of hygiene products in India and has launched Libero baby diapers and Tempo consumer tissue in the Indian market.

The efficiency programs in the hygiene and forest products operations are continuing according to plan.

Consolidated net sales for 2013, excluding exchange rate effects and divestments, rose 10% compared with a year ago. The increase is mainly attributable to acquisitions and higher volumes. Operating profit, excluding items affecting comparability, exchange rate effects and divestments, rose 19%. Cost savings, higher volumes, the acquisition in Europe and gains on forest swaps contributed to the earnings improvement. Operating profit for Personal Care and Tissue, excluding items affecting comparability, exchange rate effects and divestments, rose 4% and 27%, respectively. Operating profit for Forest Products, excluding items affecting comparability, rose 35%. Profit before tax, excluding items affecting comparability, exchange rate effects and divestments, rose 25%.

Consolidated net sales for the fourth quarter of 2013, excluding exchange rate effects and divestments, rose 1% compared with the same period a year ago. The increase is mainly attributable to higher volumes. Operating profit, excluding items affecting comparability, exchange rate effects and divestments, rose 31%. Cost savings and gains on forest swaps contributed to the earnings improvement. The corresponding profit for Tissue rose 18%, while profit for Personal Care decreased by 12% as a result of lower earnings for baby diapers associated with an increase in marketing activities. However, incontinence care products and feminine care products had a positive earnings impact. Operating profit for Forest Products, excluding items affecting comparability, rose 188%. Profit before tax, excluding items affecting comparability, exchange rate effects and divestments, rose 38%.

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SCA Year-end Report 2013

  1. 1. SCA Year-End Report 2013 1 January – 31 December 2013
  2. 2. 2013 Macro update Tissue Some growth in Europe and North America Good growth in emerging markets Personal Care Stable demand for personal care products in Europe Good growth in emerging markets Forest Products Decreased demand for publication paper in Europe Improved market balance in Europe for solid-wood products Higher average market prices for kraftliner in Europe January 29, 2014 Year-End Report 2013 2
  3. 3. Key Events 2013 Acquired majority ownership in Chinese tissue company Vinda Investment in India, launch of Libero and Tempo Divestment of Laakirchen publication paper mill Inauguration of first wind park; SCA and Statkraft JV Inclusion in key sustainability indexes January 29, 2014 Year-End Report 2013 3
  4. 4. SCA Group’s Priorities EFFICIENCY January 29, 2014 INNOVATION Year-End Report 2013 GROWTH 4
  5. 5. Efficiency Programs Hygiene business cost and productivity program Achieved cost savings Q4 2013: SEK 390m Annualized cost savings in Q4 2013: approx. EUR 175m Total annual cost savings of EUR 300m, full effect in 2015 Georgia-Pacific synergies Achieved cost savings Q4 2013: SEK 125m Annualized cost savings in Q4 2013: approx. EUR 55m Total annual cost savings of EUR 125m, full effect in 2016 Forest Products efficiency program Achieved earnings improvement Q4 2013: SEK 245m Annualized earnings improvement in Q4 2013: SEK 980m Total annual earnings improvement of SEK 1,300m, full effect in 2015 January 29, 2014 Year-End Report 2013 5
  6. 6. Innovation drives Profitable Growth Strengthens market positions and profitability January 29, 2014 Year-End Report 2013 6
  7. 7. Growth Sales growth 10%* Good growth in emerging markets Personal Care sales growth 10%** Tissue sales growth 13%** Acquired majority ownership in Vinda Investment in India Launch of Libero and Tempo * 2013 compared with 2012, excluding exchange rate effects and divestments ** 2013 compared with 2012, excluding exchange rate effects January 29, 2014 Year-End Report 2013 7
  8. 8. Summary Full Year 2013 vs Full Year 2012 Sales increased 10%* Hygiene business, 12%* Higher volumes Acquisitions Good growth in emerging markets Forest Products, 0%** Higher volumes Lower prices, including currency effects EBIT increased 19%*** Cost savings Higher volumes Acquisition in Europe Gains on forest swaps Higher energy costs Lower prices Operating cash flow decreased 12% * Excluding exchange rate effects and divestments ** Excluding divestments *** Excluding items affecting comparability, exchange rate effects, divestments and including gains on forest swaps of SEK 583m (91) before tax January 29, 2014 Year-End Report 2013 8
  9. 9. Full Year 2013 Results SEK millions unless otherwise stated Net sales EBIT* EBIT margin* (%) Profit before tax* Earnings per share (SEK) Operating cash flow Debt/Equity ratio 2013 2012 Change, % Change, % 89,019 85,408 4 10** 9,934 8,646 15 19*** 11.2 10.1 8,934 7,382 21 25*** 7.90 7.06 8,489 9,644 0.51 0.55 -12 * Excluding items affecting comparability and including gains on forest swaps of SEK 583m (91) before tax ** Excluding exchange rate effects and divestments *** Excluding items affecting comparability, exchange rate effects, divestments and including gains on forest swaps of SEK 583m (91) before tax January 29, 2014 Year-End Report 2013 9
  10. 10. Summary Q4 2013 vs Q4 2012 Sales increased 1%* Hygiene business, 0%* Higher volumes Increased marketing activities Forest Products, 5%** Higher prices Lower volumes EBIT increased 31%*** Cost savings Gains on forest swaps Higher volumes Higher energy and raw material costs Operating cash flow increased 11% * Excluding exchange rate effects and divestments ** Excluding divestments *** Excluding items affecting comparability, exchange rate effects, divestments and including gains on forest swaps of SEK 455m (24) before tax January 29, 2014 Year-End Report 2013 10
  11. 11. Q4 2013 Results SEK millions Q4 Q4 2013 2012 22,442 23,445 -4 1** 3,049 2,422 26 31*** EBIT margin* (%) 13.6 10.3 Profit before tax* 2,794 2,129 31 38*** 2.61 2.97 2,726 2,446 unless otherwise stated Net sales EBIT* Earnings per share (SEK) Operating Cash flow Change, % Change, % 11 * Excluding items affecting comparability and including gains on forest swaps of SEK 455m (24) before tax ** Excluding exchange rate effects and divestments *** Excluding items affecting comparability, exchange rate effects, divestments and including gains on forest swaps of SEK 455m (24) before tax January 29, 2014 Year-End Report 2013 11
  12. 12. Q4 2013 vs. Q3 2013 Summary Group Sales increased 2% EBIT increased 21%* Business areas Personal Care, EBIT decreased 3%** • Increased marketing activities • Higher volumes • Cost savings Tissue, EBIT increased 5%** • • • • Higher prices Higher volumes Cost savings Lower raw material costs Forest Products, EBIT increased 118%* • • • • • Cost savings Gains on forest swaps Lower energy costs Higher raw materials costs Lower prices * Excluding items affecting comparability and including gains on forest swaps of SEK 455m (7) before tax ** Excluding items affecting comparability January 29, 2014 Year-End Report 2013 12
  13. 13. Personal Care Q4 2013 vs. Q4 2012 Sales decreased 2% (0%*) Incontinence products increased 4%* -2% Baby diapers decreased 5%* Feminine care increased 7%* Emerging markets increased 1%* Sales (SEKm) Q4 2012 Q4 2013 EBIT decreased 12%** (-12%***) Increased marketing activities Cost savings -12%** Higher volumes EBIT** (SEKm) EBIT-margin** Q4 2012 Q4 2013 12.6% 11.4% * Excluding exchange rate effects ** Excluding items affecting comparability *** Excluding items affecting comparability and exchange rate effects January 29, 2014 Year-End Report 2013 13
  14. 14. Tissue Q4 2013 vs. Q4 2012 Sales decreased 3% (+1%*) Consumer tissue increased 1%* -3% AfH tissue increased 4%** Emerging markets increased 10%** Sales (SEKm) Q4 2012 Q4 2013 EBIT increased 10%*** (18%****) Higher volumes Cost savings 10%*** Divestments Higher raw material costs Negative currency impact EBIT*** (SEKm) EBIT-margin*** Q4 2012 Q4 2013 11.4% 13.0% * Excluding exchange rate effects and divestments ** Excluding exchange rate effects *** Excluding items affecting comparability **** Excluding items affecting comparability, exchange rate effects and divestments January 29, 2014 Year-End Report 2013 14
  15. 15. Forest Products Q4 2013 vs. Q4 2012 Sales decreased 11% (+5%*) Publication papers, decreased sales Kraftliner, increased sales -11% Solid-wood products, increased sales Pulp, increased sales Sales (SEKm) Q4 2012 Q4 2013 EBIT increased 188%** 188%** Higher prices Cost savings Gains on forest swaps Higher energy and raw material costs EBIT** (SEKm) EBIT-margin** Q4 2012 Q4 2013 7.7% 25.1% * Excluding divestment ** Excluding items affecting comparability and including gains on forest swaps of SEK 455m (24) before tax January 29, 2014 Year-End Report 2013 15
  16. 16. Dividend The Board of Directors proposes an increase in the dividend by 5.6% to SEK 4.75 per share (4.50) January 29, 2014 Year-End Report 2013 16
  17. 17. Full Year 2013 Summary Higher sales and profit for the Group Higher profits in all business areas Higher sales in Personal Care and Tissue Flat sales* in Forest Products Efficiency programs delivering according to plan Acquired majority ownership in Chinese Vinda Investment in India, launch of Libero and Tempo Around 30 innovations launched Inclusion in key sustainability indexes Proposed increase in the dividend to SEK 4.75 per share * Excluding divestments January 29, 2014 Year-End Report 2013 17
  18. 18. Q&A

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