Svenska Cellulosa AB SCA Class A · OMXSTO:SCA_A
Svenska Cellulosa AB SCA Class A — SCA — H1 2004 Earnings Presentation
30 slides from Svenska Cellulosa AB SCA Class A's earnings presentation, July 2004
Slide 1: SCA Interim Report 1 January–30 June 2004
SCA Interim Report 1 January–30 June 2004 Jan Åström President and CEO 1
Slide 2: SCA in Brief
SCA in Brief 1 January–30 June 2004 2004:2 2004:1 0406 0306 Earnings per share, SEK 4.32 4.34 8.66 10.89 Cash flow from current operations per share, SEK 2.27 3.48 5.75 13.01 Net sales, SEK M 22,340 21,687 44,027 43,121 Earnings after financial items, SEK M 1,502 1,472 2,974 3,578 Net earnings, SEK
Slide 3: SCA in Brief: Compared with first half of 2003
SCA in Brief Compared with first half of 2003 Net sales amounted to SEK 44,027 M (43,121). Adjusted for currency and price effects, net sales rose by 7% The Group’s operating profit excluding items affecting comparability amounted to SEK 3,413 M (3,794) a decline by 10%. Currency movements had a
Slide 4: SCA in Brief: Compared with first quarter of 2004
SCA in Brief Compared with first quarter of 2004 Net sales amounted to SEK 22,340 M (21,687) and, accordingly, were 3% higher Operating profit for the Group amounted to SEK 1,742 M (1,627), an improvement of 7%. The operating profit for Hygiene Products was unchanged, while Packaging’s earnings
Slide 5: Operating Profit - Business Areas
Operating Profit - Business Areas 1 January–30 June SEK M 2004 2003 Change Hygiene Products 2,310 2,467 -6% Packaging 1,142 1,313 -13% Forest Products 730 738 -1% Other operations -2321 312 Operating profit before goodwill amortization 3,950 4,549 -13% Goodwill amortization -581 -558 Operating profi
Slide 6: Cash Flow Analysis
Cash Flow Analysis 1 January–30 June 1 (2) SEK M 2004 2003 Change Operating cash surplus 6,850 6,890 -1% Changes in working capital -2,127 -1,407 Current capital expenditures, net -1,603 -1,535 Other operating cash flow changes -166 -106 Operating cash flow 2,954 3,842 -23% Financial items -395 -413
Slide 7: Cash Flow Analysis
Cash Flow Analysis 1 January-30 June 2 (2) SEK M 2004 2003 Cash flow from current operations 1,344 3,018 Company acquisitions -8,035 -851 Strategic capital expenditures -977 -1,309 Strategic structural expenditures -117 -225 Divestments 0 865 Cash flow before dividend -7,785 1,498 Debt equity ratio,
Slide 8: Group - Development
Group - Development Quarterly data SEK M 17.4% EBITDA Target 30 000 17.0% 18% 16.0% 16.3% 18% 15.2% 15.7% 16% 14% 20 000 12% 10% Sales 8% 22 340 EBITDA- 21 890 21 231 21 064 21 153 21 687 10 000 6% margin 4% 2% 0 0% 03:1 03:2 03:3 03:4 04:1 04:2 ROCE 13% 12% 11% 11% 10% 10% 8
Slide 9: Hygiene Products
Hygiene Products Compared with first half of 2003 Net sales amounted to SEK 21,694 M (21,697) Operating profit down 6% - SEK 2,310 M (2,467) Currency effects –4% Consumer Tissue operating profit unchanged Acquisitions and lower raw materials costs compensated for lower prices AFH Tissue
Slide 10: Hygiene Products
Hygiene Products Compared with first quarter 2004 Operating profit on the same level as first quarter Consumer Tissue operating profit down 15% Higher pulp costs partly offset by acquisitions AFH Tissue operating profit up 25% Higher earnings in the North American operations Personal Car
Slide 11: Hygiene Products - Development
Hygiene Products - Development Quarterly data SEK M 17.4% 17.0% 16.8% EBITDA 15 000 16.8% 16.6% 16.6% 18% target 18% 16% 14% 10 000 12% 10% 8% 10 906 10 791 10 753 10 531 10 545 11 149 5 000 6% 4% 2% 0 0% 03:1 03:2 03:3 03:4 04:1 04:2 Sales EBITDA-margin 11
Slide 12: Tissue - Europe
Tissue - Europe Market Consumer Tissue Stable demand in competitive markets Raw material driven price increases expected during second half 2004 AFH Tissue Stable demand and prices 12
Slide 13: Tissue – North America
Tissue – North America Market AFH Tissue Increasing demand US shipments up 3.5 % YTD May Higher prices 4% price increase effective through March Further raw material driven price increases expected during second half 2004 13
Slide 14: Personal Care
Personal Care Market Incontinence products Retail continues to show double-digit growth Baby diapers Competitive situation remains Price pressure within retail brand due to branded price decreases Feminine hygiene products Continuous growth within retailers’ brands 14
Slide 15: Packaging
Packaging Compared with first half of 2003 Net sales up 4% - SEK 15,769 M (15,136) Acquisitions in North America and Asia combined with volume growth affected positively Negative currency movements Lower prices Operating profit down 13% - SEK 1,142 M (1,313) Lower prices for corrugated b
Slide 16: Packaging
Packaging Compared with first quarter 2004 Operating profit increased by 14% Higher capacity utilization in the liner operations and increased integration with the corrugated board operations In the North American operations, earnings improved as the result of higher volumes and prices 16
Slide 17: Packaging - Development
Packaging - Development Quarterly data SEK M 12 000 18% EBITDA- 14.3% 16% 13.8% 13.9% Target 16% 12.9% 12.5% 13.2% 14% 8 000 12% 10% 8% 4 000 7 715 7 421 7 434 7 459 7 830 7 939 6% 4% 2% 0 0% 03:1 03:2 03:3 03:4 04:1 04:2 Sales EBITDA-margin 17
Slide 18: Packaging - Deliveries
Packaging - Deliveries Quarterly data Mm2 k tons 2 000 800 660 663 668 628 639 635 610 605 610 621 1 500 600 1 041 1 029 1 027 1 041 1 068 1 060 988 1 007 1 012 1 022 1 000 400 500 200 0 0 02:1 02:2 02:3 02:4 03:1 03:2 03:3 03:4 04:1 04:2 Liner Corrugated 18
Slide 19: Recovered Paper
Recovered Paper Market Europe OCC prices are stable Demand for de-ink grades has remained stable with unchanged prices Demand and prices for tissue grades stable Uncertainty regarding Asian export due to environmental import regulations in China US Stable US markets in May 19
Slide 20: Containerboard
Containerboard Market Testliner Prices largely stable on the continent, with some upward adjustments in the UK Mill stocks stable Kraftliner European shipments up 5% YTD May • EUR 30 price increase fully implemented in April Imports from the US remain on a low level Third price increas
Slide 21: Corrugated Board – Europe
Corrugated Board – Europe Market Weak start of the year - increasing activity through second quarter Demand up 1% YTD May • Germany, France and UK up approximately 1% • Italy up 1.8% • Spain up 2.5% Prices stabilized with some upwards adjustments at end of second quarter 21
Slide 22: Forest Products
Forest Products Compared with first half of 2003 Net sales up 8% - SEK 7,554 M (6,967) Positive effects of higher volumes and the acquisition of Scaninge’s forestry and sawmill operations Lower paper prices Operating profit virtually unchanged - SEK 730 M (738) Increased volumes combined w
Slide 23: Forest Products
Forest Products Compared with first quarter 2004 Operating profit up 12% Publication papers operating profit on the same level as in the first quarter Pulp, timber and solid wood products operating profit up 16% Higher pulp prices 23
Slide 24: Forest Products - Development
Forest Products - Development Quarterly data SEK M EBITDA 5 000 25% target 25% 19.7% 20.4% 18.6% 19.1% 17.5% 19.0% 4 000 20% 3 000 15% 2 000 3 813 10% 3 561 3 736 3 741 3 406 3 378 1 000 5% 0 0% 03:1 03:2 03:3 03:4 04:1 04:2 Sales EBITDA margin 24
Slide 25: Forest Products - Deliveries
Forest Products - Deliveries Quarterly data km3 k tons 500 500 443 383 370 400 354 400 345 346 344 330 305 299 380 284 340 300 332 336 300 238 190 192 200 165 173 200 100 100 0 0 02:1 02:2 02:3 02:4 03:1 03:2 03:3 03:4 04:1 04:2 Publication papers Solid wood products 25
Slide 26: Publication Papers
Publication Papers Market Slow European demand for standard Newsprint Total newsprint (incl. improved) flat YTD May Demand for improved grades up 19% YTD May Strong demand for SC and LWC paper SC up 3% and LWC up 4% YTD May Increased capacity utilization 26
Slide 27: Market Pulp
Market Pulp Market Uncertain implementation of the NBSK 30 USD price increase from June The announced USD 30 increase for eucalyptus has failed 100 USD gap between softwood and hardwood remains 27
Slide 28: Solid Wood Products
Solid Wood Products Market Pressure on pine markets Demand has improved, but high supply put pressure on prices Stable spruce markets Producer inventories down 28
Slide 29: Market Outlook
Market Outlook SCA’s consumer products continue to show a favorable demand trend The volume growth in tissue is favorable and price increases to compensate higher raw material costs is expected to be achieved during the second half of the year After a weak start of the year, the market for pac
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