Svenska Cellulosa Ab Sca Class A · OMXSTO:SCA_A
Svenska Cellulosa Ab Sca Class A — SCA — Investor Presentation (April 2021)
103 slides from Svenska Cellulosa Ab Sca Class A's investor presentation, Apr 30, 2021
Slide 1: Investor Relations April, 2021
Investor Relations April, 2021
Slide 2: A strong and integrated value chain
A strong and integrated value chain Sales 1) (SEKbn) EBITDA 1) (SEKbn) 18.4 4.4 EBITDA margin 1) Industrial ROCE 2) Forest Renewable Wood energy 24% 5% Forestland Net growth Pulp Paper 2.6 m ha 3.2 m m3fo Note: 1) 2020. 2) ROCE 2020 for the industrial segments; Wood, Pulp and Paper. 2 Excluding effe
Slide 3: Europe's largest private forest owner
Europe’s largest private forest owner Sawmill Forestland Pulp mill Kraftliner mill 6% 2.6 m ha of Sweden Publication Paper mill Pellet production SCA’s forest Productive forestland Munksund 2.0 m ha Obbola Rundvik Stugun Bollstabruk Standing volume 1) Gällö Härnösand Östrand 257 m m3fo Tunadal Ortvi
Slide 4: We use the entire tree
We use the Wind turbines Electricity entire tree Heat Bioenergy Logging residue & wood fuel Pellets Tall oil, Liquid biofuels black liquor & bark Pulp & paper mills Pulp Pulpwood Paper Wood-chips Bark & sawdust Sawmills Solid-wood products Sawlogs 4
Slide 5: Group sustainability targets 2030
Group sustainability targets 2030 Fossil-free world Valuable forests Efficient use of Responsibility for people resources and the community Group target 2030 Group target 2030 Group target 2030 Group target 2030 Increase SCA’s climate benefit from 10 to 100% wood raw material from responsibly Zero w
Slide 6: SCA's forests bind CO2 and replace fossil based products
SCA’s forests bind CO2 and Replaces 2 Higher growth enables more substitution – 6.0 replace fossil based products Mt CO2 renewable alternatives replace fossil based products SCA’s renewable Non-renewable Binds 1 products products net Growing forests bind CO2 – 5.4 active forest management Bioenergy
Slide 7: Global trends favoring fiber based renewable materials
Global trends favoring fiber based renewable materials Increased demand for E-commerce renewable materials Growing Growing Eco-awareness population and demand for middle class virgin fiber 7
Slide 8: Profitable growth strategy
Profitable growth strategy Invest in integrated value chain: Increased • Grow Pulp value from • Grow Kraftliner each tree • Renewable energy new segment • Reduce exposure to Publication Paper Growing Increase forest holdings: renewable • Increase growth and harvesting level forest asset • Acquir
Slide 9: Strong project portfolio driving profitable growth
Strong project portfolio driving profitable growth Value Biorefinery optionality Östrand – further capacity increase Biofuel Acquisition of 2021 forest land Research and 2023 Exit publication development paper Pilot plant Opportunity to 2023 Grow CTMP pulp further increase NBS
Slide 10: SCA 2025 – shifting the portfolio to growing product areas
SCA 2025 – shifting the portfolio to growing product areas Growing Forest asset Wood Publication paper Kraftliner Pulp Renewable energy Harvesting own forest (k m3) 1 Capacity (k m3) Capacity (kt) Capacity (kt) Capacity (kt) Wind power capacity (TWh) +1,100k m3 +200k m3 -1,810kt +340kt +880kt +11TWh
Slide 11: Transforming the product portfolio – creating profitable growth
Transforming the product portfolio – creating profitable growth Sales impact EBITDA margin enhancement (p.p) Exit publication paper +4% Exit UK +1% Obbola expansion +3% CTMP expansion +1% Increased harvesting +1% Future potential Further capacity Östrand Future potential 2020 Exit Exit Wood UK post
Slide 12: Forest
Forest @®SCA
Slide 13: Europe's largest private forest owner
Europe’s largest private forest owner Sales (SEKm) Forest holdings located close to SCA’s industry Sawmill 6% 6,486 Pulp mill Kraftliner mill of Sweden • 2.6m ha forestland Publication Paper Pellet production • 2.0m ha productive forestland SCA’s forest EBITDA (SEKm) • 257m m3fo standing volume 1) M
Slide 14: Forest assets create value in several ways
Forest assets create value in several ways Harvesting Net growth Land value Positive climate effect 14
Slide 15: Profitable growth since 1950
Profitable growth since 1950 Standing volume SCA Growing Harvest own forest SCA Increasing Increasing Land value Sweden 1) Increasing million m3fo asset base million m3sub cash cashflow flow SEK/m3fo (real value) land value +70% +130% +300% 4.6 461 250 146 >6,000% 2.0 nominal increase 111 1950 2020
Slide 16: SCA's Forest Total Return
SCA’s Forest Total Return CAGR of 10% since 1956 Forest – Total Return SCA’s Forest Index (1956-2020) CAGR 1 Increasing cash flow 10% • Harvesting provides raw materials to the industries and generates cash flow − Cash flow: ~3% CAGR CAGR 2004-2020 8% 2 Growing asset base • Forest growth exceeds har
Slide 17: Significant real growth of 3.7%
Significant real growth of 3.7% Forest growth metrics (m m3fo) Gross growth of standing forest 10.5 Natural losses and pre-commercial thinning -1.4 Real growth rate of 3.7% (in relation to ingoing Available growth of standing forest 9.1 standing volume in Sweden of 249m m3fo) (1) Current cash flow A
Slide 18: Higher forest growth enables increased harvesting
Higher forest growth enables increased harvesting Gross forest growth Sweden Harvesting plan (m m3fo / year) (m m3sub / year) New forest survey conducted in 2019 +1 +1.1 5.4 Annual growth 1m m3fo higher than expected 10.5 9.5 • Gross growth of 10.5 (9.5) m m3fo per year 4.3 • Net growth of 4.0 (3.0)
Slide 19: Increase in both standing volume and harvesting level
Based on Increase in both standing volume current technology and harvesting level Harvesting from own forest (m m3sub) Standing timber volume (m m3fo) +200% 350 +100% 6 300 5 250 4 200 3 150 2 100 Increasing cash flow Growing asset base 1 50 0 0 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
Slide 20: Improved practices and technology increase growth
Improved practices and technology increase growth m3fo/ha Growth plan at different taxations (standing volume / hectare) 140 1 Tax X vs 2019 Tax IX Silviculture 130 +9 m fo/ha 3 120 2 Tax IX vs 2014 Improved seedlings 110 Tax VI +14 m fo/ha 3 100 Tax VI vs 1984 3 Tax II Introduction of Contorta pine
Slide 21: SCA's responsible forestry
SCA’s responsible forestry Responsible forestry according to FSC® and PEFC™ results in some restrictions Voluntary set-asides Combined goals Consideration Consideration for the Sami people and ≥5% ≥5% reindeer husbandry through dialogue and consultation 21
Slide 22: Harvesting plan with restrictions
Harvesting plan with restrictions Optimizes value and supply Harvesting plan per tree species (m m3sub) 6.0 1 Deciduous trees Secure supply 5.0 Contorta 4.0 2 Meet restrictions 3.0 Spruce 2.0 3 Optimize value 1.0 Pine 0.0 2015-2019 2020-2024 2025-2029 2030-2034 2035-2039 2040-2044 2045-2049 Note: Ba
Slide 23: Forest – strategic direction
Forest – strategic direction 1 Increase growth and harvesting while maintaining high environmental ambitions 2 Acquire forest that supports SCA industries 3 Increase the precision and quality in biodiversity conservation measures 23
Slide 24: Wood
\Wood @®SCA
Slide 25: Leading European wood producer
Leading European wood producer Sales (SEKm) 6,296 5 modern and well invested sawmills 2 painting and 8 planing facilities 2.2m m capacity 3 EBITDA (SEKm) Own distribution network 420k Munksund 657 Focus on value added products • Wood industry – customers are mainly manufacturers of furniture, doors,
Slide 26: SCA focus on two customer segments
SCA focus on two customer segments 1 Building materials trade 2 Wood industry Products and Attractive assortment of components meeting consumer products for industrial needs, building materials trade suitable for further processing Building materials trade Standard-products DIY Customized products P
Slide 27: One of the largest and most efficient sawmill operations in Europe
One of the largest and most efficient sawmill operations in Europe Growing forest asset Structural change and increased productivity State of art technology Europe’s largest private forest owner 2010 2020 2025 Harvesting own forest (k m3) +1,100k m3 Boden 5,400 Vilhelmina Munksund Munksund Munksund
Slide 28: Long-term profitable growth with focus on value added products
Long-term profitable growth with focus on value added products Wood sales (SEKbn) +9 % p.a. Profitable growth 6.3 Higher and more stable 4.7 margins over a business cycle Customized products 1.2 based on customer insights 2000 2010 2020 Wholesalers Wood Industry Building Materials Trade 28
Slide 29: Attractive market outlook for wood products
Attractive market outlook for wood products Strong global softwood demand m m3 ~2% 3.1% CAGR CAGR Good level of building activity in the US Other Softwood import increasing in China Asia Increased R&R in Europe and the US Europe (incl. RU) Strong European construction market North America Source: Ti
Slide 30: Digitalization increases the value from each tree
Digitalization increases the value from each tree 1 CT-Scan Improve efficiency 3D-visualization of every • Volume growth and production log and value optimization optimization Log Eye Detection of log-ID to 2 control rotation for maximized value Increase revenue • Secure highest value from each tree
Slide 31: Wood – strategic direction
Wood – strategic direction 1 Strengthen SCA’s integrated value chain – sawlogs give the largest revenue from a tree 2 Continued profitable growth through: • Value-added and customized products • Volume growth in Bollsta and Tunadal 3 Production optimization to achieve the highest level of efficiency
Slide 32: Pulp
Pulp @®SCA
Slide 33: High quality NBSK pulp producer
High quality NBSK pulp producer Sales (SEKm) High quality bleached softwood kraft pulp (NBSK) 4,431 • Focus on high strength properties • Capacity: 900 kt/year 1.0Mt capacity • The pulp is used in tissue, packaging, publication paper EBITDA (SEKm) and filters 614 Chemical thermomechanical pulp (CTMP
Slide 34: SCA pulp portfolio
SCA pulp portfolio NBSK CTMP Produced by cooking wood chips in white liquor Produced by grinding wood chips in a refiner Gives pulp with long, strong fibers Gives shorter, stiffer fibers that provide absorption capacity, bulk and stiffness Provides high strength and brightness Lower consumption of w
Slide 35: Increasing pulp demand driven by a growing tissue market
Increasing pulp demand driven by a growing tissue market Demand growing ~2% per year driven by tissue SCA has ~90% exposure to tissue and specialty paper Global softwood pulp demand (m tonnes) 2019 Present 30 CAGR ~2% 30% 30% 30% 25% Market (global) 25 40% 45% Limited exposure to P&W 10% 20% 20% 20%
Slide 36: World's largest NBSK pulp line in operation
World’s largest NBSK pulp line in operation Total capacity (tonnes/year) Production began in June 2018 • On budget and on time New capacity 8 SEKbn investment Meets long-term demand growth Competitive cost position • Doubled NBSK capacity Before start-up 900,000 NBSK • Fixed cost reduction • Improve
Slide 37: Northern Swedish fiber for premium pulp products
Northern Swedish fiber for premium pulp products 1 Premium strength 2 Wet strength 3 Filter application 4 Custom-made grades 37
Slide 38: CTMP investment
CTMIP investment @®SCA
Slide 39: Investment in increased CTMP production
Investment in increased CTMP production Expanding a profitable CTMP business Low investment per tonne CTMP plant with global competitiveness Improves customer product properties at lower cost High share of growth with existing customers 39
Slide 40: SCA invests in businesses with market leading positions
SCA invests in businesses with market leading positions Investment rationale Cost curve SW CTMP producers Increase capacity from 100kt to 300kt Move production from Östrand to Ortviken Low CAPEX per tonne • CAPEX SEK 1.45bn • CAPEX SEK 5k per tonne CTMP today • Utilize existing modern TMP asset CTMP
Slide 41: CTMP improves customer product properties at lower cost
CTMP improves customer product properties at lower cost Cost-cutting for customer Product properties Replaces more expensive pulp 1 High bulk and bending rigidity Lower weight at a given strength Board Good smell and taste properties provides a lower production cost 2 Increased absorption per kg Tis
Slide 42: Increasing exposure to structurally growing segments
Increasing exposure to structurally growing segments Market plan by geography Market plan by customer Market plan by product Printing Existing paper New CTMP Specialty Asia customers volume Europe Board Tissue USA Former customers Growth with current CTMP CTMP to customers current NBSK customers Eur
Slide 43: CTMP expansion drives profitable growth
CTMP expansion drives profitable growth Investment ’20-’23 (SEKbn) CTMP capacity (kt) EBITDA (SEKbn) Financial summary +1.45bn +200kt +0.3bn Capex of SEK ~1.45bn 1.45 300 Profitable growth • +SEK 0.3bn EBITDA • Secure current business Expected start-up beginning 2023 • CTMP production to stop at Öst
Slide 44: Pulp – strategic direction
Pulp – strategic direction 1 Establish Östrand as the leading supplier of softwood kraft pulp for tissue manufacturers 2 Expand and move the CTMP production to the Ortviken industrial site 3 Plan for continued expansion of the softwood kraft pulp capacity 44
Slide 45: Paper
Paper @®SCA
Slide 46: Leading Kraftliner supplier
Leading Kraftliner supplier Sales (SEKm) No.1 independent producer of Kraftliner in Europe Kraftliner 7,916 • Strong Nordic fresh fiber for high quality packaging • Capacity: 865 kt/year Publication Paper • Products: brown and white-top kraftliner for consumer and EBITDA (SEKm) transport packaging,
Slide 47: Kraftliner expansion
Kraftliner expansion @®SCA
Slide 48: Kraftliner expansion drives profitable growth
Kraftliner expansion drives profitable growth We invest to secure the first 450kt and to add 275kt Obbola investment ’19-’23 Obbola production (kt) EBITDA (SEKbn) Profitable growth +5bn +275kt +0.8-1.0 Most value creative alternative ~7.5 Capex of ~7.5 SEKbn 725 • Life extension: ~2.5bn non-optional
Slide 49: Containerboard demand shows resilience during corona pandemic
Containerboard demand shows resilience during corona pandemic Containerboard a 160 Mt global market... …with a stable growth of ~3% per year CAGR ~3% 370Mt +60 Mt NSPT UM CM 180 Resilient demand during Specialties corona pandemic CWF Containerboard UWF 160 V-shaped recovery to trend line 140 Tissue
Slide 50: Long-term structural trends drive growth
Long-term structural trends drive growth Kraftliner demand growth Economic drivers 3 4 5 1• Industrial production Favorable trends 2• Consumer spending Kraftliner 1 2 Structural growth 3• E-commerce Underlying growth 4• Changes in retail 5• Sustainable packaging 2005 2019 50
Slide 51: SCA focuses on the European kraftliner market
SCA focuses on the European kraftliner market Containerboard global demand Kraftliner global demand Kraftliner European demand 160Mt 35Mt 5Mt SCA’s core markets SemiChem CIS & China Asia Turkey Africa Australia White-Top Kraftliner Latin America Europe Kraftliner Testliner 5 Mt 35 Mt Unbleached Kraf
Slide 52: Kraftliner for packaging that requires strength
Kraftliner for packaging that requires strength SCA’s strong fiber suitable for kraftliner applications Applications Containerboard Applications Kraftliner 1 Climate variations in 25% industrial supply chain and fresh food Other Industrial 2 Other Long distance transport Consumer products Fresh food
Slide 53: Project overview
Project overview De-bottlenecking New OCC line New lime kiln Expanded waste water treatment New dispatch area New paper machine 53
Slide 54: Asset renewal secures long-term competitiveness
Asset renewal secures long-term competitiveness New Kraftliner PM’s since 2000 Obbola largest Strengthened market leading position Kraftliner PM 800 • Europe’s largest independent producer of kraftliner • Increased market share 700 600 PM capacity (kt) Improved cost position 500 • Significantly
Slide 55: Parallel start-up ensures EBITDA enhancement from start
Parallel start-up ensures EBITDA enhancement from start Parallel construction of the new paper machine ensures full production during the construction period • Fiber line switched to new machine post construction • Only a minor investment stop required Sequential start-up of pulp line minimizes
Slide 56: Start-up expected in Q1 2023, profitable during first year
Start-up expected in Q1 2023 Profitable during first year of operation Obbola production (kt) New 725kt paper machine at Obbola +275kt 725 SEK 7.5bn investment Start-up expected in Q1 2023 • Ramp-up period of ~3 years 450 Project proceeding according to plan and budget Current 2023e 2026e 56
Slide 57: Paper – strategic direction
Paper – strategic direction 1 Colmplete the investment to increase kraftliner production at the Obbola paper mill 2 Continue the initiative to offer the market’s best service and product range as an independent supplier 3 Continue investments in specialty products, such as white-top and wet- strengt
Slide 58: Renewable energy
Renewable energy @®SCA
Slide 59: Renewable energy – the next value creator
Renewable energy – the next value creator 1 2 3 Target Secure 11 TWh raw Bioref material 2023 9.0 TWh Growth St1 Q1 2021 ~3.01) 5.4 TWh Pilot TWh Wind power Bioenergy Biorefinery • Secure new projects • Maximize value of byproducts • Östrand investment enables potential in biofuel and • Develop aft
Slide 60: 11.0 TWh wind power on SCA land by 2025
11.0 TWh wind power on SCA land by 2025 Initiate new wind projects on SCA land and develop after market offering New target 11 TWh Today, 560 wind turbines operate on SCA’s land with an annual production capacity of 5.4 TWh • Corresponds to ~20% of Sweden’s wind power 2023 production 9.0 TWh 9.0 TW
Slide 61: SCA invests in growing markets and the integrated value chain
SCA invests in growing markets and the integrated value chain 1 SCA has the feed stocks, utilities and infrastructure 2 Growth opportunity – market grows >10% annually 3 Profitable growth strategy – increased value of each tree 4 Contributing to a fossil-free world and increased climate benefit 61
Slide 62: SCA and St1 to start a joint venture for biofuels from tall oil
SCA and St1 to start a joint venture for the production of biofuels from tall oil Development of HVO and biofuels volumes in Sweden 20 The HVO market is growing rapidly (~65% p.a.) due to its compatibility with fossil diesel 18 Biogas • Reduction of CO2 by blending biofuels 16 Ethanol 14 Joint ventu
Slide 63: Biorefinery potential enabled through the Östrand investment
Biorefinery potential enabled through the Östrand investment Ongoing evaluation of potential to manufacture liquid biofuel from by-products generated by Long-term SCA’s industrial production potential • First instance environmental permit granted for two full scale biorefinery lines initiated at Öst
Slide 64: Renewable energy – strategic direction
Renewable energy – strategic direction 1 Maximize wind power on SCA’s land and develop viable projects for investors 2 Optimize production, product portfolio and profitability in the biofuel business 3 Commercialize business opportunities in biofuels and green chemicals 64
Slide 65: Summary Q1 2021
Summary Q1 2021 @®SCA
Slide 66: SCA's performance Q1 2021
SCA’s performance Q1 2021 EBITDA (SEKm) Industrial ROCE EBITDA development (SEKm) 1 1,359 8% (16%) 2 1,560 +32% 1,451 1,340 1,364 1,359 1,055 1,030 1,032 1,001 33% 31% 32% EBITDA margin Net debt/EBITDA 27% 26% 24% 24% 33% 1.5x 21% 21% Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20 Q2 '20 Q3 '20 Q4 '20 Q1 '21 1)
Slide 67: Contribution by segment and quarter
Contribution by segment and quarter Forest Wood Pulp Containerboard/Paper 1 2,375 2,380 2,242 Net sales (SEKm) 2,108 1,981 1,876 1,817 1,865 1,833 1,770 1,746 1,727 1,694 1,659 1,627 1,592 1,545 1,500 1,498 1,494 1,436 1,376 1,272 1,288 1,264 1,214 1,188 1,166 1,129 1,091 986 900 Q2 Q3 Q4 Q1 Q2 Q3 Q
Slide 68: Balance sheet
Balance sheet SEKm Mar 31, 2021 Dec 31, 2020 Forest assets 75,282 74,900 Working capital 2,862 2,759 Working capital/Net sales 1 18% 18% Deferred tax relating to forest assets -15,052 -14,977 Other capital employed 17,382 17,152 Total capital employed 80,474 79,834 Net debt 7,043 7,671 Net debt/EBIT
Slide 69: Contribution by Containerboard and Paper
Contribution by Containerboard and Paper Containerboard/Paper 1 Containerboard Net sales (SEKm) Net sales (SEKm) 9,643 9,229 2,375 2,380 2,242 8,226 8,548 8,434 7,916 2,108 7,744 1,876 1,817 1,981 6,946 5,521 1,272 1,272 4,659 4,985 4,608 4,662 1,219 1,128 1,195 1,067 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2014 20
Slide 70: Share information
Share information @®SCA
Slide 71: Constantly changing world – but the forest always creates value
Constantly changing world – but the forest always creates value SCA discontinues publication paper and expands pulp and kraftliner, creating value in and from the forest SCA took the first step towards becoming a consumer goods company with the acquisition of the Swedish personal care company Mölnly
Slide 72: SCA's total shareholder return
SCA’s total shareholder return SCA’s total shareholder return (TSR) since the distribution of Essity 270 260 250 240 230 220 210 200 190 Index 180 170 160 150 140 130 120 110 100 90 80 70 60 jun-17 sep-17 dec-17 mar-18 jun-18 sep-18 dec-18 mar-19 jun-19 sep-19 dec-19 mar-20 jun-20 sep-20 dec-20 mar-
Slide 73: Shareholder structure
Shareholder structure SCA’s largest shareholders as of March 31, 2020 # Shareholder Capital Votes Number of shareholders 1 Industrivärden 10.3% 29.3% 2 3 Norges Bank AMF Pension & Fonder 7.2% 8.9% 9.6% 6.3% ~105,000 4 Handelsbanken Pensionsstiftelse 1.4% 3.4% 5 Alecta Pensionsförsäkring 4.2% 2.3% Sw
Slide 74: Appendix
Slide 75: Forest Total Return
Forest Total Return @®SCA
Slide 76: Forest assets create value in several ways
Forest assets create value in several ways Harvesting Net growth Land value Positive climate effect 76
Slide 77: We have never had as much forest in Sweden as we have today
We have never had as much forest in Sweden as we have today Standing volume Sweden Growing Harvest Sweden Increasing Increasing Land value Sweden 1) Increasing m3fo/ha asset base m3fo/ha cash cashflow flow SEK/m3fo (real value) land value +60% +100% +270% 461 142 3.9 89 2.0 124 1956 2020 1956 2020 1
Slide 78: Forest Total Return
Forest Total Return CAGR of 10% since 1956 CAGR Forest – Total Return Index Sweden (1956-2020) 1 Increasing cash flow 10% • Harvesting provides raw materials to the CAGR 2004-2020 industries and generates cash flow − Cash flow: ~3% CAGR 7% 2 Growing asset base • Forest growth exceeds harvesting • La
Slide 79: The climate benefit from Sweden's forest industry has more than doubled
The climate benefit from Sweden’s forest industry has more than doubled Positive climate effect of Swedish forestry industry vs. Sweden's total fossil emissions 1 Growing forests bind CO2 (million tonnes CO2 equivalents per year) Mt CO2 • Growing forests capture and bind CO2 – 100 2019 active forest
Slide 80: Forest a strategic resource for the future
Forest a strategic resource for the future Estimated change in harvesting potential 2016-2025 (softwood sawlogs) Demand of wood products growing faster than supply CAGR 2017-2025e ~2.0% • Insect damage in Canada +15m m3 • Harvesting restrictions in China -16 m m3 +1m m3 • Limited potential for new s
Slide 81: Growing forest asset
Growing forest asset @®SCA
Slide 82: Swedish forest transformation
Swedish forest transformation Exploitative selective logging of the 1920’s 1) The forest landscape of today Note: 1) Source SLU, Skogsbilder. 82
Slide 83: Improved seedlings
Improved seedlings The world’s largest forest tree nursery with capacity to produce 100 million seedlings per year >25% faster growth potential than natural regeneration Selective breeding bring seed with higher quality, survival rate and growth On site R&D to improve growth and protection Innovativ
Slide 84: Global climate change
Global climate change Global warming will have a significant Increased growth in northern Sweden Increased risk impact on the climate in northern Sweden Significant longer growth period – Increased risk for storms, fire, earlier in spring, later in autumn × infestation and snow damage 25-30% incre
Slide 85: Efficient wood sourcing organization
Efficient wood sourcing organization Kiruna Europe’s largest private forest owner 50% self 2.6 m ha sufficiency Murjek Wood sourcing Luleå to industries Storuman Piteå 12 m m3sub Lycksele Terminal Industry (pulp wood) Industry (saw logs) Hoting Umeå Forest district Wood supply unit Control of Plant
Slide 86: Forest seasonality
Forest seasonality Net sales (SEKm) EBITDA (SEKm) Harvesting of own forest (k m3sub) 1,865 1,833 1,629 1,746 747 1,694 1,517 1,659 1,651 1,627 1,500 1,494 1,291 607 1,230 1,147 515 45% 499 452 449 927 36% 34% 414 33% 388 767 28% 751 745 331 25% 24% 21% 20% High level of harvesting from own forest in
Slide 87: Factors affecting relative profitability
Factors affecting relative profitability ~40 & ~60 80+ Thinning Final harvesting i Price to industry Income / m3 Index Income / m3 Index Income • Market prices, externally sourced wood sold at cost Price 80 Price 100 Harvesting cost -40 Harvesting cost -25 Gross profit 40 Gross profit 75 ii Harvesti
Slide 88: SCA wood sourcing
SCA wood sourcing Wood sourcing 2019 Wood sourcing 20251 Supplies industry segments with wood m m3sub 13 13 External suppliers Sold at market price 12 External Sawmills 12 Sawmills 11 11 Locally • Prices based on market prices in SCA’s suppliers purchased 10 10 region 9 9 Locally Price premium for c
Slide 89: Forest portfolio optimization through buying and selling land
Forest portfolio optimization through buying and selling land 1 SCA’s land purchases 2014 2015 2016 2017 2018 2019 2020 1Move forest closer to the industry Volume (thousand m3fo) 1,655 185 123 261 197 429 288 2 Price (SEK/m3fo) 264 273 263 259 286 334 294 2Improve forest consolidation Value (SEKm) 4
Slide 90: Improving forest consolidation
Improving forest consolidation Forest land swaps Acquisition of land to create larger consolidated areas SCA’s forest land SCA gains Counterparty’s forest land SCA gives to counterpart Forest ownership in Roggsjön 1955 Forest ownership in Roggsjön 2017 90
Slide 91: Wood swaps drive both financial and environmental gains
Wood swaps drive both financial and environmental gains Wood swaps totaling 1-1.5m m3sub annually SEK 60 m annual saving Cost saving from lower transportation costs Reduced emissions Collaboration with several large forest owners 91
Slide 92: Forest holdings in the Baltics
Forest holdings in the Baltics @®SCA
Slide 93: Strategic rationale – strengthen wood supply for future projects
Strategic rationale – strengthen wood supply for future projects 1 2 3 Strengthening of the High growth potential Repeat SCA’s successful integrated value chain • High growth – 3x northern Sweden Swedish forest development • Strengthen raw material supply and • Platform for further expansion • Track
Slide 94: Strengthen raw material supply and increasing self sufficiency
1 Strengthen raw material supply and increasing self sufficiency Wood sourcing 2019 Wood sourcing 20251 m m3sub 13 13 Potential investment projects will External suppliers 12 12 increase SCA wood demand External Sawmills Locally Sawmills 11 suppliers 11 purchased 10 10 9 9 Locally 8 purchased 8 7 Pu
Slide 95: The Baltics offer high forest growth potential
2 The Baltics offer high forest growth potential Price (EUR/ha forest land) Growth potential (m3fo/ha/year) 12,000 12 ~2.5x 10,000 10 8,000 8 6,000 6 4,000 ~1.1x 4 2,000 2 0 0 Southern Mid Northern Baltic Southern Mid Northern Baltic Sweden Sweden Sweden states Sweden Sweden Sweden states Source: No
Slide 96: Opportunity to repeat SCA's successful development of the Swedish forests
3 Opportunity to repeat SCA’s successful development of the Swedish forests Standing volume Growing Harvest plan Increasing Land value(1) Increasing asset base cash flow land value million m3fo million m3sub SEK/m3fo (real value) 1 Silviculture +70% +130% +300% 2 4.6 461 Fertilization 250 3 146 Impr
Slide 97: SCA's forest holdings in the Baltics
SCA’s forest holdings in the Baltics SCA forest holdings in the Baltics • ~ 40,000 hectare forest land 4.8 m m3fo • 4.8 millions m3fo forest • Located in Estonia and Latvia Younger than SCA’s forest holdings in Sweden More fertile ground and warmer climate – higher growth Mainly located in the n
Slide 98: Long term goals in the Baltics
Long term goals in the Baltics Total area (k ha) Standing volume (m m3fo) ~100 ~12 Final fellings (m m3fo/year) Local purchases (m m3fo/year) ~0.5 0.5-1.0 98
Slide 99: SCA Logistics
SCA Logistics @®SCA
Slide 100: SCA Logistics
SCA Logistics Turnover Terminal volume RoRo vessels ~2.8 SEKbn 4,510 kt 3 st Share of SCA’s cost Sea freight volume Container vessels ~20% 2,810 kt 2 st 100
Slide 101: SCA Logistics network
SCA Logistics network RoRo, Container och Railroad Roll-On-Roll-Off Container Traffic Traffic Terminals MO Oxelösund Umeå TU Sundsvall Piteå Umeå WE Umeå Vasa Sundsvall TH Sundsvall Sundsvall FR Sundsvall Iggesund SA Oxelösund SU Kiel Skövde MO Helsing- borg TU Rotterdam Malmö Rotterdam WE Rotterdam
Slide 102: SCA ships
SCA ships 1 2 3 m/s SCA Obbola m/s SCA Östrand m/s SCA Ortviken • RoRo Cassette / Paper Carrier • RoRo Cassette / Paper Carrier • RoRo Cassette / Paper Carrier • Owner: SCA • Owner: SCA • Owner: SCA • Built: 1996 • Build: 1996 • Built: 1996 4 5 m/s SCA Tunadal m/s SCA Munksund • Container Carrier •
Slide 103: are subject to certain risks and uncertainties that could negatively affect our business. Please
This presentation may contain forward-looking statements. Such statements are based on our current expectations and are subject to certain risks and uncertainties that could negatively affect our business. Please read SCA’s most recent annual report for a better understanding of these risks and unce