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.http://www.facebook.com/SCAhttp://www.twitter.com/SCAeverydayTRANSCRIPT
8 November 2011
Deutsche Bank paper seminar Lennart Persson, CFO
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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 company
SCA Group A global hygiene products and paper company
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Forest Products
Packaging Tissue
Personal Care
36% 24%
16% 24%
SCA Group Sales split 2010
Sales split
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Leading market positions Global and regional
Europe Tissue: 1 Corrugated board: 2 Baby diapers: 2 Incontinence care: 1 Privately owned forests: 1 Solid-wood products: 2
Australia Feminine care: 1 Incontinence care: 1 Tissue: 2
Mexico Incontinence care: 1 Tissue: 2 Feminine care: 1 Baby diapers: 3 Global
Incontinence care: 1 AFH tissue: 2 Colombia
Incontinence care: 1 Feminine care: 1 Tissue: 1
North America AFH tissue: 3 Incontinence care: 3
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Strong global and regional brands Two global billion EUR brands
North America
Eastern Europe
Asia Pacific
Europe
Latin America
Sales of SEK 65bn, with sales in more than 100 countries
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Cost reductions in all business areas of close to SEK 1bn***
Cash flow from current operations SEK 7.4bn***
Efficiency programs in Packaging and Forest Products
Supply Chain excellence and asset utilization programs in Tissue Europe
Restructuring program in baby diapers in Europe
New tissue plant in Mexico
New personal care plant in Russia
Further tissue investments in Kostheim and Sovetsk
Investment in Bollsta sawmill
Personal Care Thin baby diaper
TENA Ultra thins
Strong TENA value assortment
Tissue Tork Xpressnap Café,
Tork Performance
Tempo ice, Zoo Boxes
Packaging Trueflo
ZeoCool
Forest Products Increased value
added
SCA Group 5%*
Personal Care 2%** Emerging Markets 10%**
Tissue 2%** Emerging Markets 6%**
Packaging 20%*
Forest Products 3%**
Acquisitions:
Mexico- Copamex
Turkey- 95% San Saglik
Turkey- 50% Komili
Brazil – Pro Descart
SCA and Fred.Olsen Renewables to construct wind farms
* 2010 adjusted for exchange rate movements and divestments ** 2010 adjusted for exchange rate movements *** 2010
Strategic focus areas
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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 - Leadership
Strategic focus Packaging
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Shift toward more value-added products
Utilize the potential for energy production
Continued productivity improvements
Greater raw material integration
Gradual expansion of the pulp operation
Strategic focus Forest Products
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Strengthen positions and increase growth in main markets and emerging markets
Increase the number of global brands
Increase the pace of innovations
Efficiency improvements
Strategic focus Hygiene businesses
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Innovation for profitable growth Meet changing demands and requirements Create long-term, profitable differentiation Strengthen market positions Build stronger brands Drive growth
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Global population growth
An aging population
Increased market penetration
Higher disposable income
Customers and consumers demand more comfort and sustainability
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Growth Growth potential for hygiene products
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Growth High potential in markets with low penetration
Usage of hygiene products
Units/capita/year Units/child/year Units/woman/year
Western Europe Eastern Europe Latin America Asia North America
Kg/capita/year
Penetration in mature markets around 35%
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Latin America
South East Asia
Eastern Europe /Russia
Strong SCA positions Good market growth Favourable socio-demographics
Good market growth Favourable socio-demographics
Middle East
China
Incontinence care products
Growth SCA’s growth markets
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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 brand
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Forest A 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 production
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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 movements
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Summary - Q3 2011 vs. Q2 2011
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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
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* Excluding restructuring costs
Restructuring program
Total cost SEK 1,400m
SEK 500m
Cash expenditure SEK 900m
Write down
Annual EBIT savings SEK 700m Gradual impact during 2012 - 2013
Headcount reduction approximately 2,000 employees
Q3 2011 costs SEK 350m
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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.
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Q & A
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Johan Karlsson, VP Investor Relations Tel: +46 8 788 51 30
Jessica Ölvestad, Manager Investor Relations Tel: +46 8 788 52 82
IR Contacts:
Email: [email protected] Website: www.sca.com