Svenska Cellulosa AB SCA Class A · OMXSTO:SCA_A

Svenska Cellulosa AB SCA Class A — SCA — Shareholder Meeting (April 2005)

34 slides from Svenska Cellulosa AB SCA Class A's shareholder meeting presentation, April 2005

  1. Slide 1: SCA – Annual General Meeting 2005

    SCA – Annual General Meeting 2005 Jan Åström President and CEO

  2. Slide 2: Agenda

    Agenda ƒ SCA – historical development ƒ The past year - 2004 ƒ Reduced costs and increased competitiveness ƒ Portfolio strategy

  3. Slide 3: SCA historical development

    SCA historical development ƒ Rebalancing toward packaging and hygiene products through acquisitions and divestments ƒ Increased presence in markets outside Europe ƒ Sales 2004: SEK 90 bn ƒ Market capitalization: SEK 62 bn* ƒ No. of employees: 53,000 * Market capitalization as of 4 April 2005

  4. Slide 4: Acquisitions and divestments 1997 - 2004

    Acquisitions and divestments 1997 - 2004 CHH CHH Tissue Tissue GP GP Tissue Tissue Copamex Copamex SEK M Drypers Tuscarora Tuscarora Drypers Cenpak Cenpak 15 000 CartoInvest CartoInvest AM AM Paper Paper Stabernack Stabernack Panosa Panosa Alloyd Alloyd Nicollet Nicollet PISA PISA 10 000 Danisco Dan

  5. Slide 5: SCA historical development – sales 1997-2004

    SCA historical development SCA – sales 1997 - 2004 2000 – 2004 Annual growth*: 8% SEK bn 100 1997 – 2004 Annual growth*: 6% 80 60 40 20 0 1997 1998 1999 2000 2001 2002 2003 2004 * Cumulative annual growth rate

  6. Slide 6: Sales by business area

    SCA historical development Sales by business area 1996 2004 Forest Forest Products Products Hygiene Products Hygiene Products 34% 14% 51% 42% Packaging Packaging 24% 35%

  7. Slide 7: Sales by region

    SCA historical development Sales by region 1996 2004 Other countries North 4% Other countries America 3% 8% Europe (excl. Europe (excl. Sweden) North America Sweden) Sweden 9% 13% 84% 71% Sweden 8%

  8. Slide 8: SCA Group – Leading in main segments

    SCA Group Leading in main segments Hygiene Products ƒ SCA is Europe’s leading supplier of tissue and personal care products ƒ World leader in incontinence products Packaging ƒ SCA is Europe’s leading producer of corrugated packaging ƒ Leading position in protective and specialty packaging Forest Pro

  9. Slide 9: SCA share: 1997 - 2005

    SCA share: 1997 - 2005 Stable performance Total return* SCA Europe index (MSCI) 350 Europe pulp & paper (MSCI) Stockholm Stock Exchange (AFGX) 300 +165% 250 +150% 200 +104% +84% 150 100 50 jan-97 jan-98 jan-99 jan-00 jan-01 jan-02 jan-03 jan-04 jan-05 *Share price performance including reinvested di

  10. Slide 10: Agenda

    Agenda ƒ SCA – historical development ƒ The past year - 2004 ƒ Reduced costs and increased competitiveness ƒ Portfolio strategy

  11. Slide 11: 2004 – an eventful year

    2004 – an eventful year ƒ Net sales amounted to SEK 89,967 M (85,338) and earnings per share to SEK 15.58 (21.84) ƒ The third year with weak business climate and falling prices within main segments ƒ Acquisition of hygiene products companies in Australasia, Malaysia and Mexico, and a packaging compa

  12. Slide 12: SCA Group

    SCA Group SEK bn Gross margin* (EBITDA) (%) 100 90.0 88.0 85.3 20% ƒ Continued weak market 80 17.3% 16% ƒ Increased competition 16.2% 60 15.2% 12% ƒ Positive volume growth, but declining prices in 40 8% main segments 20 4% 0 0% 2002 2003 2004 Sales Gross margin* *Adjusted for items affecting compara

  13. Slide 13: SCA Group – Operating profit 2002–2004

    SCA Group Operating profit 2002 – 2004 (SEK M)* SEK M 11 000 10 000 Improvements: SEK 1.8 bn 9 000 8 000 7 000 6 000 5 000 2002 Price/ mix Volume Currency Raw Energy Other direct Indirect Acquisitions Other 2004 material costs costs * Operating profit before goodwill amortization, excluding items af

  14. Slide 14: Hygiene Products

    Hygiene Products Gross margin SEK bn (EBITDA) (%) 50 45.2 20% 45.4 43.0 40 16% 17.6% 16.9% 15.8% 30 12% 20 8% 10 4% 0 0% 2002 2003 2004 Sales Gross margin (EDITDA)

  15. Slide 15: Consumer tissue

    Consumer tissue Sales and gross margin Gross margin SEK bn (EBITDA) (%) 20 20% ƒ Favorable volume trend 15.2 16.2 14.8 15 16% ƒ Price pressure due to: 17.6% 16.2% 15.0% Š Intense competition in retail 12% 10 trade 8% Š Overcapacity 5 4% Š Weak pulp market 0 0% 2002 2003 2004 Sales Gross margin (EBIT

  16. Slide 16: Consumer tissue – Operating profit 2002–2004

    Consumer tissue Operating profit 2002 – 2004 (SEK M)* SEK M 1 800 1 600 1 400 Improvements: SEK 750 M 1 200 1 000 800 600 400 2002 Price/ mix Volume Currency Raw Energy Other direct Indirect Acquisitions Other 2004 material costs costs * Operating profit before goodwill amortization, excluding items

  17. Slide 17: Tissue for bulk consumers (AFH)

    Tissue for bulk consumers (AFH) Sales and gross margin Gross margin SEK bn (EBITDA) (%) 16 22% 20% ƒ Stable trend in Europe 14 12.3 18% 12 11.4 11.4 ƒ Price hikes in the US to 16% offset earlier raw material 10 14% 15.4% 14.6% price increases 12% 8 12.9% 10% 6 8% 4 6% 4% 2 2% 0 0% 2002 2003 2004 Sal

  18. Slide 18: Personal care

    Personal care Sales and gross margin Gross margin SEK bn (EBITDA) (%) 20 17.7 17.8 18 16.8 20% ƒ Stable development with 16 19.2% improved market shares 19.2% 18.3% 14 16% ƒ Increased marketing costs 12 12% related to new product 10 launches 8 8% 6 4 4% 2 0 0% 2002 2003 2004 Sales Gross margin (EBIT

  19. Slide 19: Personal care – Operating profit 2002–2004

    Personal care Operating profit 2002 – 2004 (SEK M)* SEK M 2 700 2 500 2 300 2 100 Improvements: SEK 60 M 1 900 1 700 1 500 2002 Price/ mix Volume Currency Raw Energy Other direct Indirect Acquisitions Other 2004 material costs costs * Operating profit before goodwill amortization, excluding items af

  20. Slide 20: Packaging

    Packaging Sales and gross margin Gross margin SEK bn (EBITDA) (%) 35 31.5 20% 30.5 30.0 ƒ Price pressure due to: 30 16% 25 Š Overcapacity 15.2% 20 13.7% 12% Š Weak demand trend 12.9% 15 Š Migration of production 8% from Europe and North 10 America to low-cost 4% countries 5 0 0% 2002 2003 2004 Sales

  21. Slide 21: Packaging Europe – Operating profit 2002–2004

    Packaging Europe Operating profit 2002 – 2004 (SEK M)* SEK M 3 000 2 800 2 600 2 400 Improvements: SEK 500 M 2 200 2 000 1800 1600 1400 1200 1000 2002 Price/ mix Volume Currency Raw Energy Other direct Indirect Acquisitions Other 2004 material costs costs * Operating profit before goodwill amortizat

  22. Slide 22: Forest Products

    Forest Products Sales and gross margin Gross margin SEK bn (EBITDA) (%) 15.0 16 13.6 14.1 32% ƒ Strong demand 14 28% 12 24% ƒ Weak price trend – certain 10 20% price increases in 2005 22.2% 19.5% 18.7% 8 16% 6 12% 4 8% 2 4% 0 0% 2002 2003 2004 Sales Gross margin (EBITDA)

  23. Slide 23: Publication papers – Operating profit 2002–2004

    Publication papers Operating profit 2002 – 2004 (SEK M)* SEK M 1 100 1 000 900 800 700 600 500 400 300 200 100 0 2002 Price/mix Volume Raw Energy Other direct Indirect Acquisitions Other 2004 (currency - material costs costs 359) * Operating profit before goodwill amortization, excluding items affec

  24. Slide 24: European forestry – earnings before tax

    European forestry– earnings before tax* Indexed, base year 2001 Index ƒ SCA’s main segments 120 have shown strong 100 competitiveness compared with pure paper 80 & forest product 60 companies 40 ƒ SCA’s product-portfolio 20 has shown strong resistance in the 0 2001 2002 2003 2004 prolonged market re

  25. Slide 25: Market outlook - 2005

    Market outlook - 2005 ƒ Hygiene Products Š Consumer tissue: • Lower prices at start of 2005 compared with fourth quarter 2004 • Rising pulp prices Š Tissue for bulk consumers (AFH): • Price hikes being implemented ƒ Packaging Š Lower prices at start of 2005 compared with fourth quarter 2004 Š Contin

  26. Slide 26: Agenda

    Agenda ƒ SCA – historical development ƒ The past year - 2004 ƒ Reduced costs and increased competitiveness ƒ Portfolio strategy

  27. Slide 27: Savings program 2005

    Savings program 2005 ƒ Annual savings of SEK 1.2 bn – full effect from 2006 ƒ Cost for program amounts to SEK 1.2 bn ƒ Examples of measures: Š Packaging - sharp reductions within entire organization Š Personal care – relocation of production Š Restructuring of operations in North America and Austral

  28. Slide 28: Hygiene Products – growth and new products

    Hygiene Products – growth and new products Product launches in 2005 ƒ New product platform and intensified marketing in feminine hygiene products ƒ Launch of new incontinence products in the US and Europe Š Continued strong growth in retail trade segment ƒ Strengthened competitiveness in baby diaper

  29. Slide 29: Packaging – Improved customer offering

    Packaging Improved customer offering ƒ Development of complete packaging solutions for prioritized customer segments ƒ Strong growth in Eastern Europe and Asia ƒ Unique position to serve global customers through increased presence in Europe, North America and Asia

  30. Slide 30: Time-out for acquisitions

    Time-out for acquisitions ƒ Intense competition for possible acquisitions Š Increased competition from financial buyers ƒ Integration of acquisitions carried out during 2004 Š High priority to achieve established goals ƒ The current operations must achieve a satisfactory profitability before further

  31. Slide 31: Agenda

    Agenda ƒ SCA – historical development ƒ The past year - 2004 ƒ Reduced costs and increased competitiveness ƒ Portfolio strategy

  32. Slide 32: Three linked business areas (background)

    Three linked business areas (background) ƒ SCA decided early to develop its raw materials into hygiene- and packaging products ƒ Use existing raw material base to produce high-quality publication papers ƒ The 1990s were characterized by international expansion of hygiene products and packaging and o

  33. Slide 33: Three linked business areas (effects)

    Three linked business areas (effects) ƒ Lower volatility in earnings compared to traditional paper and forest product companies ƒ Favorable coordination effects ƒ Critical mass to meet strong global competitors ƒ Excellent growth opportunities

  34. Slide 34: essentials for everyday life

    essentials for everyday life”

SCA — Shareholder Meeting (April 2005) on 6ix