Handelsbanken retail and consumer seminar 2012

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SCA's presentation at Handelsbanken Retail and Consumer Seminar in December 2012, held by Johan Karlsson, VP Investor Relations

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Handelsbanken retail and consumer seminar 2012

  1. 1. Handelsbanken Retail andConsumer SeminarJohan Karlsson, Vice President Investor Relations
  2. 2. SCA Group Net sales of SEK 91bn* 37,000 employees Sales in more than 100 countries Leading global hygiene company #1 or #2 positions in close to 80 countries Strong brands; TEN and Tork are leading global billion-euro brands for Incontinence care and AFH tissue Europe’s largest private forest owner Europe’s second-largest sawmill company Several of the world’s most prestigious sustainability awards* 2011 sales adjusted for closed transactions2 December 2012
  3. 3. Transforming SCA Divestment of the Packaging business, excluding the two kraftliner mills Acquisition of Georgia-Pacific’s European tissue operations Acquisitions in emerging markets  Everbeauty in Asia  Pro Descart in Brazil  San Saglik and Komili(50%) in Turkey Joint venture in Australia/New Zealand Divestment of Aylesford Newsprint Efficiency program Leadership and culture3 December 2012
  4. 4. SCA Group 9 months 2012 sales and EBIT by Business Area Sales by Business Area EBIT by Business AreaForest Products Personal Care Forest Products Personal Care 22% 16% 30% 35% 48% 49% Tissue Tissue 4 December 2012
  5. 5. SCA Group Sales by Product Category Personal Care TissueFeminine care 15% Incontinence products AFH tissue 38% 54% 31% 62%Baby diapers 73% branded Consumer tissue 52% branded 5 December 2012
  6. 6. Leading Market positions Globally and regionally Value market positionsNorth America Nordic regionIncontinence products: 2 Incontinence products: 1 EuropeAFH tissue: 3 Tissue: 1 Baby diapers: 1 AFH tissue: 1 Incontinence products 1Mexico Baby diapers: 3 Consumer tissue: 2Incontinence products: 1 Feminine care 3 Feminine care 2Feminine care: 1 Private forest owners: 1Consumer tissue 2 Solid-wood products: 2AFH tissue: 3Baby diapers: 3 Asia Incontinence products: 1Colombia GloballyIncontinence products: 1 Incontinence products: 1Feminine care: 1 AFH tissue: 1Tissue: 1 Consumer tissue: 2Baby diapers 2 6 December 2012
  7. 7. SCA Group’s Priorities EFFICIENCY INNOVATION GROWTH SUSTAINABILITY7 December 2012
  8. 8. Efficiency Restructuring program in baby diapers in Europe completed 2011 Efficiency program  Annual cost saving: EUR 80m  Higher machine efficiency and reduced CAPEX Cost and productivity program  Annual cost saving: EUR 300m Georgia-Pacific synergies  Annual cost saving: EUR 125m Energy efficiency program  Annual cost saving: EUR 70m Efficiency improvements in Forest Products Investments in upgrades and new capacity8 December 2012
  9. 9. Cost and Productivity program*Key actions Manufacturing  Blueprint implementation Cost savings  Asset utilization improvements  Best practice sharing SG&A Sourcing  World-class sourcing processes Logistics 12%  Leverage global scale 6% Manufacturing  Consolidation of suppliers 43% Logistics  Optimize warehouse footprint 39%  Lower transportation costs Sourcing  Working capital management SG&A  Fewer layers in the organization  Clear roles and responsibilities, no overlaps  Center-led support model Total annual cost savings: EUR 300m Related restructuring costs: EUR 100m Headcount reduction: approx. 1,500 * Excluding Georgia-Pacific acquisition9 December 2012
  10. 10. Georgia-Pacific AcquisitionStrengthens our no.1 position Perfect strategic fit Substantial synergies Strengthens our geographic presence in Europe Strong innovation portfolio Strengthens our branded portfolio10 December 2012
  11. 11. Georgia-Pacific AcquisitionSynergies Supply chain synergies Cost synergies Cost synergies  Manufacturing excellence and best practice Support and  Footprint optimization overhead  Scale effects raw materials 25%  Logistics optimization 60% Supply chain 15% Sales and Marketing Sales and Marketing  S&M organization consolidation  A&P efficiency Support and overhead  Consolidation of support functions Total annual cost synergies: EUR 125m Related restructuring costs: EUR 130m11 December 2012
  12. 12. Innovation drives Profitable growthStrengthens market positions and profitability Meet changing demands and requirements Create long-term, profitable differentiation Strengthen market positions Build stronger brands Drive growth12 December 2012
  13. 13. Market DriversGood growth opportunities Global population growth An aging population Increased market penetration Higher disposable income Customers and consumers demand more comfort and sustainability13 December 2012
  14. 14. Global Hygiene Products MarketIncreased penetration and aging and growing population Personal Care Tissue 2010 201714 December 2012
  15. 15. Hygiene ProductsHigh 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 Asia15 December 2012
  16. 16. Growth High growth in Emerging markets Q3 2012 Emerging markets sales growth: Personal Care: +26%* Tissue: +20%* % of Personal Care sales** % of Tissue sales** Emerging markets 16% Emerging markets 37%Mature markets Mature markets * Adjusted for exchange rate movements ** Q3 2012 16 December 2012
  17. 17. SCA’s Market Priority Mature markets Established Not-present  Improve profitability emerging markets emerging markets  Increased cash flow  Profitable growth  Selected entry generation  Strengthen market  Strengthen market positions positions  Category expansion  Category expansion17 December 2012
  18. 18. Financial TargetsGroup ROCE** 13% Debt/Equity 0.70 Debt payment capacity above 35% Dividend policy 1/3 of cash flow from current operations Business areas Sales growth* ROCE** Personal Care 5-7% 30% Tissue 3-4% 15% Forest Products in line with market in top quartile * Annual organic sales growth ** Return on capital employed18 December 2012
  19. 19. IR Contacts:Johan Karlsson, VP Investor Relations Louise Tjeder, Director Investor RelationsTel: +46 8 788 51 30 Tel: +46 8 788 51 62 Email: ir@sca.com Website: www.sca.com

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