Svenska Cellulosa Ab Sca Class A · OMXSTO:SCA_A

Svenska Cellulosa Ab Sca Class A — Svenska Cellulosa Aktiebolaget SCA — Q4 2023 Earnings Presentation

31 slides from Svenska Cellulosa Ab Sca Class A's earnings presentation, Jan 26, 2024

  1. Slide 1: Q4 2023 results presentation, January 26, 2024

    a aa MiPe Ve "2023 cam

  2. Slide 2: Ulf Larsson, CEO

    # - aT 1p) 4 fay iF vig te A " Ulf Larsson, CE

  3. Slide 3: Doubled EBITDA from Renewable Energy – new segment

    EBITDA (SEKm) and EBITDA margin Higher delivery volumes due to strategic investments -33% Doubled EBITDA from Renewable Energy – new segment 10,194 in 2023 9,109 Record high harvesting volumes from own forest Lower but solid profitability 6,807 • EBITDA down 33% to SEK 6.8bn 5,252 5,319 49% 38% 48%

  4. Slide 4: Key figures: EBITDA, ROCE, dividend, net debt/EBITDA, EPS

    EBITDA (SEKm) Industrial ROCE 1 Proposed dividend (SEK) 6,807 7% 2.75 (10,194) (40%) (2.50) EBITDA margin Net debt/EBITDA EPS (SEK) 38% 1.6x 5.23 (49%) (1.0x) (9.61) Note: Figures in brackets refer to 2022. 4 1. ROCE for the industrial segments; Wood, Pulp, Containerboard and Renewable Energy.

  5. Slide 5: EBITDA and EBITDA margin by quarter

    EBITDA (SEKm) Net Debt/Equity EBITDA (SEKm) and EBITDA margin 1,635 10% 2,806 3,121 -17% 2,608 2,484 1,981 2,055 59% 1,700 1,635 EBITDA margin Net debt/EBITDA 52% 53% 50% 1,417 43% 37.3% 1.6x 41% 37% 33% 37% Q4 '21 Q1 '22 Q2 '22 Q3 '22 Q4 '22 Q1 '23 Q2 '23 Q3 '23 Q4 '23 5

  6. Slide 6: Forest: stable wood supply, sales up 13%, EBITDA up 56%

    Net sales (SEKm) EBITDA (SEKm) EBITDA margin +13% +56% Stable wood supply to industries 1,994 1,189 59.6% 1,760 Continued price increase for wood raw material 43.2% 761 Sales up 13% + Higher prices EBITDA up 56% Q4 2022 Q4 2023 Q4 2022 Q4 2023 Q4 2022 Q4 2023 + Higher prices Price development – Pulp

  7. Slide 7: Wood: higher wood raw material costs, sales down 11%

    Net sales (SEKm) EBITDA (SEKm) EBITDA margin -11% -8% Higher wood raw material costs 1,422 71 5.0% 5.2% 1,264 65 Sales down 11% - Lower prices - Lower volumes EBITDA down 8% Q4 2022 Q4 2023 Q4 2022 Q4 2023 Q4 2022 Q4 2023 - Lower prices - Higher wood raw material cost Price development – Solid Wood

  8. Slide 8: Sawn wood stocks, prices and production

    Stock of sawn pine and spruce wood, Sweden and Finland (k m3) Price development sawn pine and spruce, Sweden (index) 5,000 Normalized monthly level 340 4,000 290 3,000 240 Spruce 2,000 190 Pine 1,000 140 0 90 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Sep-16 Sep-17 Sep-18 Sep-19 Sep-20

  9. Slide 9: Pulp: ramp up of new CTMP line according to plan

    Net sales (SEKm) EBITDA (SEKm) EBITDA margin -11% -89% Ramp up of new CTMP line according to plan 1,822 598 32.8% 1,616 Sales down 11% - Lower prices + Higher volumes 67 4.2% + Positive currency effects Q4 2022 Q4 2023 Q4 2022 Q4 2023 Q4 2022 Q4 2023 EBITDA down 89% - Lower prices Price development

  10. Slide 10: NBSK pulp price, deliveries and inventories

    NBSK pulp price (USD/t) vs deliveries (Mt) Hardwood pulp inventories (days of supply) 15.0 1,600 80 1,500 14.5 1,400 70 1,300 60 14.0 1,200 1,100 50 13.5 1,000 900 40 13.0 800 30 700 12.5 600 20 Jul-17 Jul-18 Jul-19 Jul-20 Jul-21 Jul-22 Jul-23 Jan-17 Apr-17 Apr-20 Oct-17 Jan-18 Apr-18 Oct-18 Jan-19

  11. Slide 11: Containerboard: ramp up of new paper machine Obbola

    Net sales (SEKm) EBITDA (SEKm) EBITDA margin -10% -48% Ramp up new paper machine Obbola 1,626 565 34.7% according to plan 1,460 Sales down 10% 20.0% 292 - Lower prices + Higher volumes + Positive currency effects Q4 2022 Q4 2023 Q4 2022 Q4 2023 Q4 2022 Q4 2023 EBITDA down 48% Price development – Kra

  12. Slide 12: Kraftliner price, deliveries and box demand

    Price (EUR/t) vs Kraftliner deliveries (Mt) European Box demand (index) 122 1,000 4.9 119 900 4.8 116 4.6 113 800 110 4.5 700 107 4.3 104 600 Unbleached kraftliner price Euwid (LHS) 4.2 101 500 Kraftliner deliveries Europe (RHS) 4.0 98 Jul-18 Jul-19 Jul-20 Jul-21 Jul-22 Jul-23 Jan-18 Apr-18 Oct-18 J

  13. Slide 13: Renewable Energy: biorefinery commissioned at year end

    Sales (SEKm) EBITDA (SEKm) EBITDA margin +17% +48% Sales up 17% 552 172 31.2% 470 + Higher prices 24.6% 116 EBITDA up 48% + Higher prices + Profitable growth Q4 2022 Q4 2023 Q4 2022 Q4 2023 Q4 2022 Q4 2023 9 TWh installed capacity of wind power on SCA land Biorefinery in Gothenburg commissioned at y

  14. Slide 14: Forest assets

    WSCA

  15. Slide 15: Forest land values in SCA areas (SEK/m3)

    Forest land values – average in areas where SCA owns forest land (SEK/m3) 500 450 Average Ludvig & Co and Svefa 400 350 395 366 300 324 3-year weighted average – 250 291 used for valuation of forest 276 assets 200 150 Price (SEK/m3) 2019 2020 2021 2022 2023 3-year weighted average 276 291 324 366 39

  16. Slide 16: Average three year transaction price and forest asset value

    Market price in Sweden 1 Standing volume Forest asset (SEK/m3fo) (m m3fo) (SEK bn) Average three year transaction price +29 +4 +10 • 395 SEK/m3fo in Sweden at Dec 31 2023 107.5 395 267 271 • 40.5 EUR/m3fo in Baltics at Dec 31 2023 257 261 97.9 366 252 324 84.5 Standing volume increased to 271m m3fo

  17. Slide 17: Income statement summary, quarter and full year

    Quarter Full year SEKm Q4 2023 Q4 2022 Change 2023 2022 Change Net sales 4,384 4,873 -10% 18,081 20,794 -13% EBITDA 1,635 1,981 -17% 6,807 10,194 -33% EBITDA margin 37.3% 40.6% -3.3 p.p. 37.6% 49.0% -11.4 p.p. EBIT 1,119 1,590 -30% 4,857 8,642 -44% EBIT margin 25.5% 32.6% -7.1 p.p. 26.9% 41.6% -14.7

  18. Slide 18: Proposed dividend and EPS

    3.50 1.00 Proposed dividend (SEK) +0.25 3.00 +0.25 2.75 (2.50) 2.50 +0.25 +0.25 2.25 2.50 2.75 +0.25 2.00 2.00 1.75 1.50 1.50 EPS (SEK) 1.00 5.23 0.50 (9.61) 0.00 2017 2018 2019 2020 2021 2022 2023 18

  19. Slide 19: Net sales bridge 2022 to 2023

    Lower prices in Wood, Pulp and Containerboard Higher delivery volumes SEK from commissioned 20,794m -23% strategic projects 20,000 SEK SEK +6% 18,081m +4% -4,712m SEK +1,184m 15,000 SEK +815m -13% 10,000 5,000 0 Net sales Price/Mix Volume Currency Net sales 2022 2023 19

  20. Slide 20: EBITDA bridge 2022 to 2023

    Lower prices in Wood, Pulp and Containerboard 12,000 SEK 10,194m -4,710 10,000 Higher revaluation of biological assets and lower distribution costs Higher delivery volumes Higher costs for wood 8,000 from commissioned raw materials SEK strategic projects +593 6,807m +883 6,000 +186 -410 +71 4,000 EB

  21. Slide 21: Net sales and EBITDA by segment 2017-2023

    Forest Wood Pulp Containerboard Renewable Energy Net sales (SEKbn) 9.64 9.23 8.43 7.75 7.92 7.08 6.75 7.21 6.89 6.96 6.71 6.62 6.33 6.30 6.82 6.49 6.15 5.99 5.74 5.85 5.46 5.07 5.46 5.16 4.38 4.43 2.54 2.87 1.88 1.26 1.55 2017 2018 2019 2020 2021 2022 2023 2017 2018 2019 2020 2021 2022 2023 2017 201

  22. Slide 22: Net sales bridge Q4 2022 to Q4 2023

    Lower prices Wood, Containerboard and Pulp Higher delivery volumes from SEK commissioned strategic projects 4,873m -25% SEK +5% 4,384m SEK +10% SEK +237m -1,208m SEK +482m -10% Net sales Price/Mix Volume Currency Net sales Q4 2022 Q4 2023 22

  23. Slide 23: EBITDA bridge Q4 2022 to Q4 2023

    Lower prices Wood, 2,500 Containerboard and Pulp Higher revaluation of biological SEK assets, SEK 70m one-off costs 1,981m -1,197 2,000 Higher delivery SEK volumes from +444 1,635m commissioned High degree of self sufficiency in 1,500 strategic projects energy and wood raw material +185 +202 -66 +86

  24. Slide 24: Cash flow, quarter and full year

    Quarter Full Year SEKm Q4 2023 Q4 2022 2023 2022 EBITDA 1,635 1,981 6,807 10,194 Revaluation of biological assets and other non cash flow items -840 -459 -2,305 -1,863 Operating cash surplus 795 1 522 4,502 8,331 Change in working capital -710 -604 -159 -1,328 Current capital expenditures -538 -439

  25. Slide 25: Balance sheet and net debt, Dec 31 2023

    SEKm Dec 31, 2023 Dec 31, 2022 Forest assets 107,481 97,882 Working capital 4,322 4,138 Deferred tax relating to forest assets -21,277 -19,468 Other capital employed 24,524 23,795 Total capital employed 115,050 106,347 Net debt 10,765 9,989 Net debt/EBITDA 1.6x 1.0x Equity 104,284 96,358 Net debt/Eq

  26. Slide 26: Summary

    Summary Ulf Larsson, CEO WSCA

  27. Slide 27: Forest assets, harvesting rate and net debt notes

    Forest assets • Standing volume on SCA’s land is in line with statistics from Swedish National Forest Inventory (Riksskogstaxeringen) • Forest valuation is based on official price statistics in areas where SCA holds forest • Prices for wood raw material has increased Harvesting rate • SCA harvests l

  28. Slide 28: Doubled EBITDA from Renewable Energy – new segment

    EBITDA (SEKm) and EBITDA margin Higher delivery volumes due to strategic investments -33% Doubled EBITDA from Renewable Energy – new segment 10,194 in 2023 9,109 Record high harvesting volumes from own forest Lower but solid profitability 6,807 • EBITDA down 33% to SEK 6.8bn 5,252 5,319 49% 38% 48%

  29. Slide 29: Q&A

  30. Slide 30: Forward-looking statements

    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

  31. Slide 31: Quarterly net sales and EBITDA by segment

    Forest Wood Pulp Containerboard Renewable Energy Net Sales (SEKm) 1,931 1,945 1,878 1,994 1,822 1,881 1,760 1,760 1,636 1,616 1,626 1,573 1,422 1,432 1,385 1,460 1,297 1,353 1,244 1,264 470 514 552 402 411 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 '22 '23 '23 '23 '23

Svenska Cellulosa Aktiebolaget SCA — Q4 2023 Earnings Presentation on 6ix