Svenska Cellulosa AB SCA Class A · OMXSTO:SCA_A
Svenska Cellulosa AB SCA Class A — SCA — Q2 2005 Earnings Presentation
30 slides from Svenska Cellulosa AB SCA Class A's earnings presentation, July 2005
Slide 1: SCA Interim Report
SCA Interim Report 1 January–30 June 2005 Jan Åström President and CEO 1
Slide 2: SCA in Brief
SCA in Brief 1 January–30 June 2005 Q2 2005 Q1 2005 H1 2005 H1 2004 Earnings per share, SEK (including 4.27 2.82 7.09 11.83 items affecting comparability) Cash flow from current operations 4.64 -0.11 4.53 6.28 per share, SEK Net sales, SEK M 23,986 22,518 46,504 44,027 Earnings after financial items
Slide 3: SCA Group – Compared with first half of 2004
SCA Group Compared with first half of 2004 SEK M Sales 50,000 46,504 44,027 Sales increased by 6% 40,000 Currency effects -2% 30,000 20,000 10,000 Operating surplus decreased with 0 SEK 778 M H1 2004 H1 2005 (excluding items affecting comparability) EBITDA* / EBIT* SEK M Operating profit dec
Slide 4: SCA Group – Compared with first quarter of 2005
SCA Group Compared with first quarter of 2005 SEK M Sales 23,986 25,000 22,518 Sales increased by 7% 20,000 Strong volume development in main 15,000 segments 10,000 Currency effects +2% 5,000 0 Q1 2005 Q2 2005 Operating surplus increased with SEK 100 M SEK M EBITDA* / EBIT* (excluding items
Slide 5: Cash Flow Analysis
Cash Flow Analysis 1 January–30 June 1 (2) SEK M H1 2005 H1 2004 Change Operating cash surplus 6,242 7,103 -12% Changes in working capital -1,441 -2,140 Current capital expenditures, net -1,913 -1,603 Other operating cash flow changes -325 -166 Operating cash flow 2,563 3,194 -20% Financial items -7
Slide 6: Cash Flow Analysis
Cash Flow Analysis 1 January–30 June 2 (2) SEK M H1 2005 H1 2004 Cash flow from current operations 1,058 1,468 Company acquisitions -305 -8,035 Strategic capital expenditures -1,074 -977 Strategic structural expenditures -24 -117 Divestments 0 0 Cash flow before dividend -345 -7,661 Debt equity rati
Slide 7: Cash Flow Analysis – Quarterly development
Cash Flow Analysis Quarterly development SEK M 4,000 High current Seasonally capex increased Seasonally working 3,122 increased 3,000 capital working 2,522 capital 2,000 1,779 1,648 1,415 915 1,000 0 Q1 2004 Q2 2004 Q3 2004 Q4 2004 Q1 2005 Q2 2005 Operating cash flow 7
Slide 8: Group – Quarterly Development
Group – Quarterly Development Excluding items affecting comparability SEK M EBITDA target 30,000 16.6% 18% 16.3% 18% 15.0% 16% 14.1% 13.7% 25,000 14% 20,000 12% 10% Sales 15,000 8% 23,986 22,340 22,812 23,128 22,518 EBITDA- 10,000 6% margin 4% 5,000 2% 0 0% Q2 2004 Q3 2004 Q4 2004 Q1 2005 Q2 2005 8
Slide 9: Hygiene Products - Development
Hygiene Products - Development Quarterly data SEK M EBITDA 15,000 16.9% 18% 16.0% target 18% 14.4% 14.1% 13.9% 16% 14% 10,000 12% 10% 8% 11,761 11,904 11,606 12,258 11,149 5,000 6% 4% 2% 0 0% Q2 2004 Q3 2004 Q4 2004 Q1 2005 Q2 2005 Sales EBITDA-margin 9
Slide 10: Hygiene Products - Operating Profit
Hygiene Products - Operating Profit Compared with first half of 2004 H1 2005 H1 2004 Change Comments Hygiene Products 1,870 2,364 -21% Tissue 770 1,123 -31% Europe: Price pressure in consumer tissue, partly offset by ongoing rationalization programs and price increases in AFH-tissue North America: P
Slide 11: Hygiene Products - Operating Profit
Hygiene Products - Operating Profit Compared with first quarter of 2005 Q2 2005 Q1 2005 Change Comments Hygiene Products 962 908 +6% Tissue 391 379 +3% Europe: Continued price pressure in consumer tissue North America: Positive impact of previous price increases combined with higher seasonal volumes
Slide 12: Tissue
Tissue Market Consumer tissue Europe: • Competitive market due to overcapacity • Unchanged pressure from retail AFH tissue Europe: • Prices stable for premium quality segments North America: • Stable prices • Strong seasonal volume development 12
Slide 13: Personal Care
Personal Care Market Incontinence products Continued strong growth in retail segments Price pressure in selective markets in health care segments Baby diapers Continued strong competition between producers of retailer brands and manufacturer brands in continental Europe Strong volume tre
Slide 14: Packaging - Development
Packaging - Development Quarterly data SEK M 12,000 18% EBITDA 14.8% 16% target 16% 10,000 14.3% 13.3% 14% 11.8% 11.4% 8,000 12% 10% 6,000 8% 4,000 7,939 7,928 7,804 7,642 8,094 6% 4% 2,000 2% 0 0% Q2 2004 Q3 2004 Q4 2004 Q1 2005 Q2 2005 Sales EBITDA-margin 14
Slide 15: Packaging - Operating Profit
Packaging - Operating Profit Compared with first half of 2004 H1 2005 H1 2004 Change Comments Packaging 913 1,318 -31% Europe: Price pressure combined with higher energy costs Improvements from current rationalization programs have not fully compensated for negative market development North America:
Slide 16: Packaging - Operating Profit
Packaging - Operating Profit Compared with first quarter of 2005 Q2 2005 Q1 2005 Change Comments Packaging 455 458 - Continued price pressure offset by higher seasonal volumes 16
Slide 17: Recovered Paper
Recovered Paper Market Europe Continued price erosion for OCC Tissue grades stable US Price decline for high quality grades 17
Slide 18: Containerboard
Containerboard Market Testliner High producer inventories due to new capacity Prices under pressure Kraftliner European shipments down 3% YTD until May Prices under pressure during second quarter but seem to have stabilized since June 18
Slide 19: Corrugated Board – Europe
Corrugated Board – Europe Market Strong seasonal shipments at the end of the quarter after slow start of the year Demand down 0.7% during January-May Competitive market conditions Pressure on prices • Fierce retail competition putting FMCG companies under pressure • Overcapacity in testliner
Slide 20: Forest Products - Development
Forest Products - Development Quarterly data SEK M EBITDA 5,000 25% target 25% 21.6% 21.0% 20.9% 19.6% 18.4% 4,000 20% 3,000 15% 2,000 4,116 10% 3,741 3,586 3,814 3,762 1,000 5% 0 0% Q2 2004 Q3 2004 Q4 2004 Q1 2005 Q2 2005 Sales EBITDA-margin 20
Slide 21: Forest Products - Operating Profit
Forest Products - Operating Profit Compared with first half of 2004 H1 2005 H1 2004 Change Comments Forest Products 817 874 -7% Publication papers 234 206 +14% Increased prices have compensated for higher energy costs and negative currency effects Pulp, timber and solid- 583 668 -13% Lower prices fo
Slide 22: Forest Products - Operating Profit
Forest Products - Operating Profit Compared with first quarter of 2005 Q2 2005 Q1 2005 Change Comments Forest Products 416 401 +4% Publication papers 113 121 -7% Positive effects of previous price increases did not offset the cost of planned maintenance stop in Ortviken Pulp, timber and solid- 303 2
Slide 23: Publication Papers
Publication Papers Market Shipments YTD H1 2005 Standard newsprint shipments –2% SC paper shipments -4% LWC paper shipments +6% Better supply and demand balance No short term price effects from the Finnish labor conflict Producer inventories on SC and LWC sharply down Strong export d
Slide 24: Market Pulp
Market Pulp Market Slow global demand Global shipments down 1% YTD until May Chinese total market pulp demand down 3% YTD until May Mixed price signals Eroding prices on softwood ~USD 590 Stable prices on hardwood ~USD 590 Softwood spot prices significantly lower than list price Stro
Slide 25: Solid-Wood Products
Solid-Wood Products Market Reduced supply from Finland Price increases for pine in June Supply pressure on spruce expected in third quarter due to inventory build-up from winter storm fellings in southern Sweden 25
Slide 26: Market Outlook
Market Outlook No significant change in the market Tissue Fair underlying demand Overcapacity in consumer tissue in Europe Personal care Stable volume trend in Europe – favorable growth in certain emerging markets Packaging Increased seasonal demand but lower prices during the quarter
Slide 27: Product launches
Product launches Product launches follow-up 27
Slide 28: TENA Serenity - Discreet Activewear
TENA Serenity - Discreet Activewear New product for the US market Tena Discreet is a new innovative product New revolutionary fabric New production technology developed New production line built at SCA’s facility in Drummondville, Canada Pants (Protective Underwear) represents 36 % of tota
Slide 29: Libero – Up&Go
Libero – Up&Go New generation of pant diapers SCA has 60% share on the Nordic Baby diaper market Pant diapers is the fastest growing segment of the baby diaper market SCA launched a new generation of pant diapers in May/June 2005 Improved comfort and absorption Broadening of current assort
Slide 30: essentials for everyday life
essentials for everyday life™