Jan Johansson, CEO of SCA, discussed the company's major changes in 2012 including divesting packaging businesses, acquiring Georgia-Pacific's European tissue operations, and establishing a joint venture in Australia/New Zealand. SCA also acquired several hygiene product companies. Johansson outlined SCA's strategic priorities of efficiency, innovation, and growth. SCA has leading market positions globally and regionally in tissue, solid wood products, and hygiene products. Despite economic challenges, hygiene products show growth in emerging markets.
2. Major changes
Divestment of the Packaging business, excluding
the two kraftliner mills
Acquisition of Georgia-Pacific’s European tissue operations
Established joint venture in Australia/New Zealand
Acquisition of Everbeauty an Asian hygiene products company
Increased shareholding in Vinda
Acquisition of PISA in Chile
New hygiene organization
Acquisition of PLF a French solid-wood products company
2 September 2012
3. Acquisition of Georgia-Pacific’s
European tissue operations
Creates a leading European tissue
company
Strengthens SCA’s product offering and
geographic presence
Sales: EUR 1.25bn
Purchase price: EUR 1.32bn
Annual synergies: EUR 125m
With full implementation of synergies,
earnings per share are expected to
increase by approximately SEK 1.70
3 September 2012
4. SCA Group
Net sales of SEK 91bn*
37,000 employees and sales in more than 100
countries
World’s second-largest hygiene company
TEN and Tork are leading global brands for
incontinence care and AFH tissue
Europe’s largest private forest owner
Europe’s second-largest sawmill company
* 2011 sales adjusted for closed transactions
4 September 2012
5. SCA Group
Hygiene business is growing
% of net sales
~20%*
54% 40%
46% 60% ~80%*
Forest Products and Hygiene products
Packaging (Personal Care and Tissue)
5 September 2012
8. Efficiency
Restructuring programme in baby diapers
in Europe completed
Efficiency programme
Mainly related to Personal Care and Tissue
Annual cost saving: SEK 700m
Gradual impact in 2012-2013
Investments in upgrade of existing and
new capacity
8 September 2012
11. Growth
Sales growth of 4%*
High growth in emerging markets
Acquisition of Georgia-Pacific´s European tissue
operations
Acquisition in Brazil
Pro Descart, No. 2 in incontinence care
Acquisition in Turkey
San Saglik 95%, No. 2 in incontinence care
Komili 50%, No. 4 in baby diapers and feminine care
Acquisition of Everbeauty an Asian personal care
company
Continued expansion of wind power opportunities
Ongoing projects totalling 4 TWh
* H1 2012 compared with H1 2011, excluding exchange rate movements and divestments
11 September 2012
12. Growth
Growth potential for hygiene products
Global population growth
An aging population
Increased market penetration
Higher disposable income
Customers and consumers demand
more comfort and sustainability
12 September 2012
13. Growth
High 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 Asia
13 September 2012
14. Macro update
Q2 2012
Global economy and private consumption to slow in 2012
Debt crisis in parts of Western Europe has a negative impact
Emerging markets shows relatively good growth
Hygiene products
Good growth in Emerging markets
Low or no growth in Western Europe and North America
Forest products
Lower European demand and unacceptably low prices
in publication paper
Continued weak demand and unsatisfactory low prices
in solid-wood products
Price increases for Kraftliner during Q2
14 September 2012
15. Q2 2012 results
SEK millions Q2 Q2 Change, Change,
unless otherwise stated 2012 2011 % %**
Net sales 20,273 20,415 -1 2
EBIT* 2,105 1,810 16 16
EBIT margin* (%) 10.4 8.9
Profit before tax* 1,789 1,527 17
Earnings per share (SEK) 1.85 1.96
Operating cash flow 2,391 1,868
Debt/Equity ratio 0.41 0.55
* Excluding items affecting comparability
** Excluding exchange rate movements, and divestments
15 September 2012
16. Key reasons to invest in SCA
Transformation story
Strong product portfolio
Good growth opportunities
Profitability improvement potential
Good dividend yield
16 September 2012