32 slides from Svenska Cellulosa Ab Sca Class A's earnings presentation, Jan 26, 2017
Slide 1: Year-end Report 2016
Year-end Report 2016
Slide 2: Magnus Groth, President and CEO
Magnus Groth President and CEO January 26, 2017 Year-end Report 2016 2
Slide 3: Summary 2016
Summary 2016 Organic sales increased 2%1) Hygiene business +3%, Forest Products -3%, Emerging markets +7% Increased organic operating profit2) and increased operating margin3) Strong contribution from efficiency gains Strong cash flow Introduced 23 innovations under brands such as Libero, Libresse,
Slide 4: Summary 2016: Significant Initiatives
Summary 2016 Significant Initiatives Completed acquisition of Wausau Paper Corp. Divestment of South East Asian, Taiwan and South Korean businesses to Vinda Restructuring measures in Tissue in France and Spain Potential split of the Group into two listed companies; hygiene and forest products New vi
Slide 5: Group 2016 vs 2015
Group 2016 vs 2015 Net Sales Organic Sales1) Adjusted Operating Profit2) SEK SEK 117,314m +2% 13,989m +2% +8%3) Adjusted Operating Margin2) EPS Operating Cash Flow SEK 11.9% SEK 7.93 14,948m +60bp -20%4) +16% 1) Sales which excludes exchange rate effects, acquisitions and divestments 2) Excluding it
Slide 6: Group Adjusted ROCE
Group Adjusted ROCE1) Adjusted ROCE1) Target 13% 12.5% 12.0% 11.2% 2014 2015 2016 1) Return on capital employed excluding items affecting comparability January 26, 2017 Year-end Report 2016 6
Slide 7: Dividend
Dividend The Board of Directors proposes an increase in the dividend by 4.3% to SEK 6.00 per share (5.75) January 26, 2017 Year-end Report 2016 7
Slide 8: SCA Enhanced Strategic Framework
SCA Enhanced Strategic Framework January 26, 2017 Year-end Report 2016 8
Slide 9: SCA to Acquire BSN Medical
SCA to Acquire BSN Medical A Value Creating Acquisition BSN medical develops, manufactures, markets and sells products within wound care, compression therapy and orthopedics with well-known brands BSN medical reported net sales 2015 amounted to EUR 861m, adjusted EBITDA1) EUR 201m and adjusted opera
Slide 10: Innovations 2016
Innovations 2016 January 26, 2017 Year-end Report 2016 10
Slide 11: Group Q4 2016 vs. Q4 2015
Group Q4 2016 vs. Q4 2015 Net Sales Organic Sales1) Adjusted Operating Profit2) SEK SEK 30,897m +2% 3,685m +6% +5%3) Adjusted Operating Margin2) EPS Operating Cash Flow SEK 11.9% SEK 1.99 3,942m +0bp -51%4) +6% 1) Sales which excludes exchange rate effects, acquisitions and divestments 2) Excluding
Slide 12: Personal Care
Personal Care Q4 2016 vs Q4 2015 Adjusted Adjusted Net sales 0% Net Sales Operating Profit1) Operating Margin1) SEK 8,681m SEK 8,711m SEK 1,143m Organic sales decreased 1% SEK 1,086m 13.1% Adjusted operating profit1) +5% 0% +5% 12.5% +60bp Better price/mix Cost savings Lower volumes Q4 2
Slide 13: Personal Care: Organic Sales
Personal Care Q4 2016 vs Q4 2015 Organic sales decreased 1% Organic Sales by Region Organic Sales by Product Segment Price/mix +1% Volume -2% +5% Lower sales for baby diapers -1% 0% -1% -1% 0% -4% Higher sales for feminine care Mature Emerging Incontinence Baby Feminine Mature markets To
Slide 14: Tissue
Tissue Q4 2016 vs Q4 2015 Adjusted Adjusted Net sales +10% Net Sales Operating Profit1) Operating Margin1) SEK 16,366m SEK 18,044m Organic sales increased 4% SEK 2,215m Adjusted operating profit1) +14% +10% SEK 1,943m +14% 11.9% 12.3% +40bp Higher volumes Better price/mix Q4 2015 Q4 2016 Q
Slide 15: Tissue: Organic Sales
Tissue Q4 2016 vs Q4 2015 Organic Sales Organic Sales Organic sales increased 4% by Region by Product Segment Price/mix 0% Volume +4% +11% Strong growth in emerging markets +4% +4% +4% +4% Mature markets 0% Western Europe Total Mature Emerging Total Consumer AfH - Lower sales for consume
Slide 16: Forest Products
Forest Products Q4 2016 vs Q4 2015 Adjusted Adjusted Net sales +3% Net Sales Operating Profit1) Operating Margin1) SEK 612m Organic sales increased 4% SEK 4,133m SEK 4,268m SEK 552m Price/mix 0% +3% -10% 14.8% Volume +4% Closure of publication paper machine -3% 12.9% -190bp Adjusted oper
Slide 17: Forest Products Price Development
Forest Products Price Development 110 110 Publication Papers Kraftliner 105 105 100 100 95 95 90 2014 2016 90 Q4 Q4 Q4 Q4 Q4 2014 Q4 Q4 Q4 2016 Q4 Q4 2014 2015 2016 2014 2015 2016 Price index in SEK Price index in local currency Price index in SEK Price index in local currency 115 105 NBSK Pulp Soli
Slide 18: Fredrik Rystedt, Executive Vice President and CFO
Fredrik Rystedt Executive Vice President and CFO January 26, 2017 Year-end Report 2016 18
Slide 19: Group Net Sales
Group Net Sales Q4 2016 vs. Q4 2015 +3% SEK 30,897m +1% +2% SEK 29,040m 0% +6% Net Sales Price/Mix Volume Currency Acquisition Net Sales Q4 2015 Q4 2016 Organic sales increased 2% Price/Mix 0% Volume +2% January 26, 2017 Year-end Report 2016 19
Slide 20: Organic Sales
Organic Sales Group 8% 6% 4% 2% 0% -2% 2012 2013 2014 2015 Q1 Q2 Q3 Q4 2016 2016 2016 2016 Personal Care Tissue Forest Products 8% 8% 12% 6% 6% 8% 4% 4% 4% 0% 2% 2% -4% 0% 0% -8% -2% -2% -12% 2013 2014 2015 Q1 Q2 Q3 Q4 2012 2013 2014 2015 Q1 Q2 Q3 Q4 2012 2013 2014 2015 Q1 Q2 Q3 Q4 2016 2016 2016 20
Slide 21: Group Adjusted Operating Profit: Currency Impact
Group Adjusted Operating Profit1) Impact from Weaker GBP and MXN Currencies Operating profit impact from weaker GBP Operating profit impact from weaker MXN Q4 2016 vs Q4 2015 2016 vs 2015 Q4 2016 vs Q4 2015 2016 vs 2015 SEKm SEKm -44 -135 -16 -63 -350 -60 -210 -198 Transaction Translation -82 -221 -
Slide 22: Mature Markets and Emerging Markets
Group Mature Markets and Emerging Markets 2014 2016 Share of Net Sales Share of Net Sales 31% 32% Operating Margin 2014* 2015 2016 69% 68% Mature markets 13.0% 13.3% 14.1% Emerging markets 6.4% 7.0% 7.1% Share of Operating Profit Share of Operating Profit Total Group 11.1% 11.3% 11.9% 17% *excluding
Slide 23: Group Adjusted Operating Profit
Group Adjusted Operating Profit1) Q4 2016 vs. Q4 2015 SEK +184m SEK -47m SEK +51m SEK -232m SEK +8m SEK +132m SEK 3,685m SEK +135m SEK 3,454m +7% Adjusted Price/Mix Volume Raw Material Energy Currency Acquisition Other Adjusted Operating Operating Profit Profit Q4 2015 Q4 2016 1) Excluding items aff
Slide 24: Group Cash Flow
Group Cash Flow Q4 2016 vs Q4 2015 Q4 2016 Q4 2015 SEKm SEKm Operating cash surplus 5,165 4,798 Change in working capital 1,509 465 Restructuring costs and other operating cash flow -625 -150 Capital expenditures (including strategic) -3,517 -2,948 Operating cash flow including strategic capital exp
Slide 25: Group Items Affecting Comparability
Group Items Affecting Comparability Q4 2016 Q4 2016 SEKm Costs for discontinuation of Indian hygiene business -375 Transaction costs for BSN medical -145 Wausau Paper Corp. -50 Other, including costs for measures at the tissue production plant in Hondouville, France -126 Total items affecting compar
Slide 26: Biological Assets
Biological Assets 2016 Adjustments Weighted average cost of capital decreased from 6.25% to 5.25% Adjustment of future prices and costs Based on the trends over the most recent five years instead of ten years Average wood price has been reduced from 467 SEK/m 3sub to 432 SEK/m3sub SEK/m3sub Historic
Slide 27: Biological Assets
Biological Assets 2016 Adjustments SEKbn Value, January 1, 2016 30.1 Adjustment of Weighted average cost of capital +7.1 Adjustment of future prices and costs -6.7 Other changes +0.3 Value, December 31, 2016 30.8 January 26, 2017 Year-end Report 2016 27
Slide 28: Estimated Costs for Potential Split of the Group
Estimated Costs for Potential Split of the Group SEKm Project and listing costs 320 One-time foreign tax on fixed assets outside Sweden 450 Branding 300 Total 1,070 Of which: Financial items 120 Equity 155 Items Affecting Comparability 795 Cost of SEK 80m impacted Q4 2016 Estimated need of recru
Slide 29: Magnus Groth, President and CEO
Magnus Groth President and CEO January 26, 2017 Year-end Report 2016 29
Slide 30: Summary 2016
Summary 2016 Strong financial performance Actions for profitable growth Significant initiatives and acquisitions supporting enhanced strategic framework Potential split of the Group The Board of Directors proposes an increase in the dividend by 4.3% to SEK 6.00 per share (5.75) January 26, 2017 Year
Slide 31: 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 our most recent annual report for a better understanding of these risks and uncert
Slide 32: Slide 32