Svenska Cellulosa AB SCA Class A · OMXSTO:SCA_A

Svenska Cellulosa AB SCA Class A — SCA — FY2004 Earnings Presentation

31 slides from Svenska Cellulosa AB SCA Class A's earnings presentation, February 2005

  1. Slide 1: SCA Year-end Report

    SCA Year-end Report 1 January–31 December 2004 Jan Åström President and CEO 1

  2. Slide 2: SCA in Brief

    SCA in Brief 1 January–31 December 2004 04:4 04:3 04:2 04:1 0412 0312 Earnings per share, SEK 2.83 4.09 4.32 4.34 15.58 21.84 Cash flow from current operations per share, SEK 7.93 9.59 2.27 3.48 23.27 34.98 Net sales, SEK M 23,128 22,812 22,340 21,687 89,967 85,338 Earnings after financial items, SE

  3. Slide 3: SCA Group – Compared with 2003

    SCA Group Compared with 2003 SEK M Sales 100 000 85 338 89 967 ƒ Sales increased by 5% 80 000 Š Currency effects –2% 60 000 40 000 20 000 ƒ Operating surplus decreased by 1% 0 (excluding items affecting comparability) 2003 2004 EBITDA / EBITA* ƒ Operating profit decreased by 13% SEK M 13 836 13 642

  4. Slide 4: SCA Group – Compared with third quarter of 2004

    SCA Group Compared with third quarter of 2004 SEK M Sales 23 128 25 000 22 812 ƒ Sales increased by 1% 20 000 Š Currency effects -3% 15 000 10 000 5 000 ƒ Operating surplus decreased by 8% 0 (excluding items affecting comparability) Q3 Q4 EBITDA / EBITA* SEK M ƒ Operating profit decreased by 15% 4 0

  5. Slide 5: Cash Flow Analysis

    Cash Flow Analysis 1 January–31 December 1 (2) SEK M 2004 2003 Change Operating cash surplus 13,596 13,508 0% Changes in working capital -620 737 Current capital expenditures, net -4,270 -3,902 Other operating cash flow changes -355 -241 Operating cash flow 8,351 10,102 -17% Financial items -851 -79

  6. Slide 6: Cash Flow Analysis

    Cash Flow Analysis 1 January-31 December 2 (2) SEK M 2004 2003 Cash flow from current operations 5,435 8,134 Company acquisitions -9,340 -4,808 Strategic capital expenditures -2,398 -2,949 Strategic structural expenditures -226 -437 Divestments 0 961 Cash flow before dividend -6,529 901 Debt equity

  7. Slide 7: Group - Development

    Group - Development Quarterly data SEK M 17.4% EBITDA Target 30 000 17.0% 18% 16.0% 16.3% 18% 15.7% 15.7% 15.2% 16% 11.7%* 14% 20 000 12% 10% Sales 8% 22 340 22 812 23 128 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 04:3 04:4 *14% excluding it

  8. Slide 8: Hygiene Products - Operating Profit

    Hygiene Products - Operating Profit Compared with year-end 2003 2004 2003 Change Comments Hygiene Products 4 321 4 820 -10% Consumer Tissue 1 273 1 416 -10% Lower prices, 3,5%, have been partly offset by lower production- and distribution costs AFH Tissue 677 1 001 -32% Increased raw material and en

  9. Slide 9: Hygiene Products - Operating Profit

    Hygiene Products - Operating Profit Compared with third quarter of 2004 2004:4 2004:3 Change Comments Hygiene Products 943 1 068 -12% Consumer Tissue 232 327 -29% Lower prices, higher energy costs and production stops, but higher volumes and somewhat lower pulp prices AFH Tissue 146 153 -5% Improved

  10. Slide 10: Hygiene Products - Development

    Hygiene Products - Development Quarterly data SEK M 17.4% EBITDA 15 000 16.8% 17.0% 16.6% 16.8% 16.6% 18% target 18% 15.8% 16% 14.1% 14% 10 000 12% 10% 8% 11 149 11 761 11 904 10 906 10 791 10 753 10 531 10 545 5 000 6% 4% 2% 0 0% 03:1 03:2 03:3 03:4 04:1 04:2 04:3 04:4 Sales EBITDA-margin 10

  11. Slide 11: Tissue - Europe

    Tissue - Europe Market ƒ Market growth 2% ƒ Consumer Tissue Š Competitive market conditions ƒ AFH Tissue Š Fair demand and stable prices 11

  12. Slide 12: AFH Tissue – North America

    AFH Tissue – North America Market ƒ Increased demand Š US shipments up 1.5% YTD November ƒ Higher prices Š 5% price increase in fourth quarter Š Further increases announced for first quarter of 2005 12

  13. Slide 13: Personal Care

    Personal Care Market ƒ Incontinence products Š Retail continues to show double-digit growth ƒ Baby diapers Š Price pressure within retailers’ brands due to branded price decreases Š Good growth in the Nordic region ƒ Feminine hygiene products Š Competitive situation in Europe 13

  14. Slide 14: Packaging - Operating Profit

    Packaging - Operating Profit Compared with year-end 2003 2004 2003 Change Comments Operating profit 2 268 2 482 -9% Lower prices for corrugated board were partly offset by improved productivity and improved paper integration as well as lower energy costs Higher costs for oil based raw materials in N

  15. Slide 15: Packaging - Operating Profit

    Packaging - Operating Profit Compared with third quarter of 2004 2004:4 2004:3 Change Comments Operating profit 490 636 -23% Seasonal declines in corrugated and significant maintenance/downtime stops in the liner operations 15

  16. Slide 16: Packaging - Development

    Packaging - Development Quarterly data SEK M 12 000 18% EBITDA- 16% 14.3% target 16% 13.8% 13.9% 13.8% 13.2% 14% 12.9% 12.5% 12.1% 8 000 12% 10% 8% 4 000 7 715 7 421 7 434 7 459 7 830 7 939 7 928 7 804 6% 4% 2% 0 0% 03:1 03:2 03:3 03:4 04:1 04:2 04:3 04:4 Sales EBITDA-margin 16

  17. Slide 17: Packaging - Deliveries

    Packaging - Deliveries Quarterly data Mm2 k tons 2 000 800 663 668 639 635 640 630 610 621 1 500 600 1 041 1 029 1 027 1 041 1 068 1 060 1 056 1 062 1 000 400 500 200 0 0 03:1 03:2 03:3 03:4 04:1 04:2 04:3 04:4 Liner Corrugated board 17

  18. Slide 18: Recovered Paper

    Recovered Paper Market ƒ Europe Š OCC, Mixed and Deink prices marginally down during fourth quarter Š Tissue grades stable ƒ US Š Stable markets – high quality grades prices level out 18

  19. Slide 19: Containerboard

    Containerboard Market ƒ Testliner Š Fair market balance in Europe Š Prices up about EUR 20/ton in fourth quarter ƒ Kraftliner Š European shipments up 5% in 2004 Š Prices up but under pressure due to weak US dollar Š Imports from the US remain on a low level • Strong demand in the US – shipments up 3

  20. Slide 20: Corrugated Board – Europe

    Corrugated Board – Europe Market ƒ Slowly increasing demand in Europe Š Demand up 1.3% YTD November • Germany up 2.5% • Spain and Italy up about 1.5% • UK up around 0.5%, France and Nordic markets marginally down ƒ Competitive market conditions 20

  21. Slide 21: Forest Products - Operating Profit

    Forest Products - Operating Profit Compared with year-end 2003 2004 2003 Change Comments Forest Products 1 487 1 559 -5% Publication papers 442 662 -33% Lower prices, higher production costs and negative currency effects partly offset by higher volumes Pulp, timber and 1 045 897 16% Positive contrib

  22. Slide 22: Forest Products - Operating Profit

    Forest Products - Operating Profit Compared with third quarter of 2004 2004:4 2004:3 Change Comments Forest Products 383 374 2% Publication papers 129 121 7% Higher volumes partly offset by higher energy costs and currency effects Pulp, timber and 254 253 0% Lower prices, negative currency solid-woo

  23. Slide 23: Forest Products - Development

    Forest Products - Development Quarterly data SEK M EBITDA 5 000 25% target 25% 19.7% 20.4% 17.5% 19.0% 19.5% 19.0% 4 000 18.6% 19.1% 20% 3 000 15% 2 000 3 813 3 741 3 814 10% 3 561 3 736 3 586 3 406 3 378 1 000 5% 0 0% 03:1 03:2 03:3 03:4 04:1 04:2 04:3 04:4 Sales EBITDA margin 23

  24. Slide 24: Forest Products - Deliveries

    Forest Products - Deliveries Quarterly data km3 k tons 500 500 443 383 393 400 370 366 400 330 345 346 380 392 300 340 344 300 332 336 324 238 200 200 100 100 0 0 03:1 03:2 03:3 03:4 04:1 04:2 04:3 04:4 Publication papers Solid-wood products 24

  25. Slide 25: Publication Papers

    Publication Papers Market ƒ Strong European demand for Newsprint Š Standard newsprint up 3% in 2004 Š Improved grades up 22% ƒ Good demand for SC and LWC paper Š SC up 3% and LWC up 5% in 2004 ƒ Price increases announced for first quarter 25

  26. Slide 26: Market Pulp

    Market Pulp Market ƒ Prices bottomed in October after sharp fall in third quarter Š Chinese buyers back in the market Š Producer inventories down ƒ Prices started to move up in December Š NBSK up from USD 585 to about USD 620 Š Upward trend continued into January Š Cost/currency driven price movemen

  27. Slide 27: Solid-Wood Products

    Solid-Wood Products Market ƒ Pressure on pine markets Š Demand slowing down; high supply put pressure on prices ƒ Stable spruce markets Š Demand is slowing down, but low inventories keep prices stable 27

  28. Slide 28: Rationalization Program

    Rationalization Program Communicated in third quarter report ƒ Total costs SEK 726 M – charged in fourth quarter 2004 ƒ Actions: Š Packaging - several measurements to improve profitability Š Personal Care - plant optimization Š Restructuring in North American and Australasian operations ƒ Effects Š

  29. Slide 29: Rationalization Program – Extended savings identified

    Rationalization Program Extended savings identified ƒ Total costs SEK 425 M – will be charged first quarter 2005 ƒ Actions: Š Additional programs within the American operations, the European hygiene products operations and in recently acquired units Š The program affects 450 employees ƒ Effects Š An

  30. Slide 30: Market Outlook

    Market Outlook ƒ No notable change in the market situation and demand picture for the Group’s products is expected in the immediate future ƒ The intensive competitive situation is expected to remain although certain price adjustments are planned in the North American operations and in the publicatio

  31. Slide 31: essentials

    essentials for everyday life”

SCA — FY2004 Earnings Presentation on 6ix