187 slides from Svenska Cellulosa Ab Sca Class A's investor day presentation, May 19, 2016
Slide 1: Welcome to SCA Capital Market Day 2016
Welcome to SCA Capital Market Day 2016 May 19, 2016 SCA Capital Market Day 2016 1
Slide 2: Today's Moderator
Today’s Moderator Joséphine Edwall-Björklund, Senior Vice President, Group Function Communications
Slide 3: Agenda
Capital Market Day 2016 Agenda 10.30 – 12.30 SCA Driving Value Creation 14.50 – 15.10 Break Q&A Sustainability 15.10 – 17.10 Emerging Markets Q&A SCA Latin America SCA Forest Products Q&A Q&A Vinda 12.30 – 13.10 Lunch Q&A 13.10 – 14.50 Efficiency in Supply Chain 17.10 – 17.30 Summary and Key takeawa
Slide 4: SCA Capital Market Day 2016
SCA Capital Market Day 2016 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 understandi
Slide 5: SCA Driving Value Creation
SCA Driving Value Creation Magnus Groth, President and CEO
Slide 6: SCA – a Leading Global Hygiene and Forest Products Company
SCA – a Leading Global Hygiene and Forest Products Company May 19, 2016 SCA Capital Market Day 2016 6
Slide 7: SCA in Brief
SCA in Brief 115 13 SEK billion in net sales 2015 SEK billion in operating profit* 2015 Presence in approximately Number of employees 100 *Excluding items affecting comparability countries 44,000 May 19, 2016 SCA Capital Market Day 2016 7
Slide 8: Sales by Business Area 2015
Sales by Business Area 2015 Forest Net Sales Products 15% Tissue 55% 30% Personal Care May 19, 2016 SCA Capital Market Day 2016 8
Slide 9: Sales by Country and Region 2015
Sales by Country and Region 2015 Largest markets - Group Sales by Region - Group Sales, SEKm Germany 2% UK 11% US France 14% China Spain 10% 63% Sweden Mexico Colombia Netherlands 0 5000 10000 Europe North America Asia Latin America Other May 19, 2016 SCA Capital Market Day 2016 9
Slide 10: Sales by Sales Channel 2015
Sales by Sales Channel 2015 56% 9% 35% Health Retail B2B Care Away-from- Consumer Baby Feminine Incontinence Forest Home Tissue Care Care Products Products Tissue May 19, 2016 SCA Capital Market Day 2016 10
Slide 11: Global Market Positions
Global Market Positions Incontinence Products: 1 AfH Tissue: 1 Consumer Tissue: 2 Baby Diapers: 4 Feminine Care: 5 May 19, 2016 SCA Capital Market Day 2016 11
Slide 12: Favorable Market Trends
Favorable Market Trends Increasing Global population growth disposable income An aging population Increased insight that good hygiene improves health and well-being May 19, 2016 SCA Capital Market Day 2016 12
Slide 13: Usage of Hygiene Products
Usage of Hygiene Products High potential in markets with low penetration North America Western Europe Eastern Europe Latin America Asia Data is based on market data and SCA’s estimates. May 19, 2016 SCA Capital Market Day 2016 13
Slide 14: Global Hygiene Market Size and Growth
Global Hygiene Market Size and Growth Bubble size: Market size CAGR* 2015 - 2020 Russia € 2 bn North Western CAGR ~9% Europe Eastern America € 18bn Europe € 27bn € 3bn Asia ~1% ~3% ~2% € 30bn ~7% Africa € 7bn LATAM ~7% € 10bn ~6% Australia € 1bn ~2% * Expected CAGR (Compound Annual G
Slide 15: Group Targets to Achieve Value Creation
Group Targets to Achieve Value Creation Return on Organic Capital People & Capital Sales Structure Nature Employed Growth & Dividend May 19, 2016 SCA Capital Market Day 2016 15
Slide 16: Strategic Priorities
Strategic Priorities Profitable Growth Innovation Efficiency Increasing efficiency in the entire value chain May 19, 2016 SCA Capital Market Day 2016 16
Slide 17: Profitable Growth
Profitable Growth Maximize the core by investing in winning markets Top 20 Up-and- Develop, Export coming Cure or Kill Profitable Invest and Develop Profitability market share grow for the stars, and low risk growth long term turnaround or exit poor performers May 19, 2016 SCA Capital Market Day 201
Slide 18: Profitable Growth
Profitable Growth Expanding the core Scale up Grow Solutions & Explore New Soaps & Categories Wipes Services To ”New Core” May 19, 2016 SCA Capital Market Day 2016 18
Slide 19: Profitable Growth
Profitable Growth Win in Digital Digital Digital Digital Capabilities Channels Products Global digital Excellence in Tork EasyCube operating e-commerce & TENA Identifi model and capabilities e-marketing May 19, 2016 SCA Capital Market Day 2016 19
Slide 20: Innovation
Innovation Around 30 innovations/product launches in 2015 May 19, 2016 SCA Capital Market Day 2016 20
Slide 21: Efficiency
Efficiency Supply Chain Go to Market Best Practice Efficiencies Excellence Sharing with Value Stream Mindset May 19, 2016 SCA Capital Market Day 2016 21
Slide 22: Incontinence Care
Incontinence Care Increase investment to accelerate growth and lead 1. Grow market share 2. Grow penetration 3. Expand the core May 19, 2016 SCA Capital Market Day 2016 22
Slide 23: AfH Professional Hygiene
AfH Professional Hygiene Consolidate global leading position by growing faster than the market 1. Accelerate profitable growth in mature 2. Secure a strong innovation funnel and markets through superior Go-to-Market leverage best practice approach 3. Market expansion in Emerging Markets to reach fai
Slide 24: Consumer Tissue
Consumer Tissue Build inspiring brands that create distinctive value for consumers 1. Grow the category 2. Grow branded share in markets where we are established 3. Competitive cost position May 19, 2016 SCA Capital Market Day 2016 24
Slide 25: Baby Care
Baby Care #1 or 2 in the chosen markets where we operate 1. Win in Europe with Libero and Retail 2. Be where babies are Brands 3. Tier-up to premium May 19, 2016 SCA Capital Market Day 2016 25
Slide 26: Feminine Care
Feminine Care Be the fastest growing global feminine care brand 1. Innovation 2. Accelerate daily care / liners 3. Grow the category May 19, 2016 SCA Capital Market Day 2016 26
Slide 27: Forest Products
Forest Products World class efficiency and stable cash flow Forest Assets Publication Paper Kraftliner Solid-wood Products Pulp Energy May 19, 2016 SCA Capital Market Day 2016 27
Slide 28: Other Key Activities
Other Key Activities Support the success of Vinda expansion in Asia Secure integration of Wausau Paper Investing in Östrand pulp mill expansion Creating two divisions; Hygiene and Forest Products May 19, 2016 SCA Capital Market Day 2016 28
Slide 29: SCA Driving Value Creation
SCA Driving Value Creation Fredrik Rystedt, Executive Vice President and CFO
Slide 30: SCA Performance
SCA Performance Sales Operating Profit* SEKm SEKm 120 000 15 000 80 000 10 000 40 000 5 000 0 0 2012 2013 2014 2015 2012 2013 2014 2015 * Excluding items affecting comparability May 19, 2016 SCA Capital Market Day 2016 30
Slide 31: SCA Group Operating Profit
SCA Group Operating Profit* 2012-2015 SEKm 18000 SEK 2,874m SEK -3,639m 15000 SEK 2,404m SEK 13,014m 12000 SEK 2,335m SEK 9,040m 9000 6000 SEK 3,974m 3000 0 Operating Profit Price/Mix Volume Efficiency & Other Raw Material Operating Profit 2012 2015 * Excluding items affecting comparability May 19,
Slide 32: Dividend and Total Shareholder Return
Dividend and Total Shareholder Return Dividend per Share Total Shareholder Return SEK Index 6 300 +171% 5 250 4 200 +76% 150 +50% 3 100 2 50 1 0 Jan-112011Jan-122012Jan-132013Jan-142014Jan-152015 0 2011 2012 2013 2014 2015 SCA B MSCI Household Products OMX Stockholm 30 May 19, 2016 SCA Capital Marke
Slide 33: SCA Creates Value
SCA Creates Value SCA Creates Value 8 Enhancing Value Creation Return above Invest for Grow where Increase return Cost of Capital future growth return is high Return on Capital Employed* Innovation Innovation Innovation 13% Investments in Efficiency Improve portfolio mix Target 13% Emerging Markets
Slide 34: Our Ambition
Our Ambition To generate superior value creation and shareholder return through profitable growth To perform better or in line with the best competitor in every geography and category where we compete May 19, 2016 SCA Capital Market Day 2016 34
Slide 35: Financial Group Targets
Financial Group Targets Return on Organic Sales Capital Structure Capital Employed Growth & Dividend Group: 13% Annual organic sales growth: Effective capital structure Maintain a solid investment Business area: Personal Care: 5–7% grade rating Personal Care: 30% Tissue: 15% Tissue: 3–4%
Slide 36: Organic Sales Growth
Organic Sales Growth Outcome vs. Targets Group 8% 6% 4% 2% 0% 2012 2013 2014 2015 Q1 2016 Personal Care Tissue 8% 8% 6% 6% Target 5-7% 4% 4% Target 3-4% 2% 2% 0% 0% 2012 2013 2014 2015 Q1 2016 2012 2013 2014 2015 Q1 2016 May 19, 2016 SCA Capital Market Day 2016 36
Slide 37: Return on Capital Employed
Return on Capital Employed Outcome* vs Targets Group Forest Products 30% 30% 25% 25% 20% 20% Target: To be in the top 15% 15% quartile of our peers 10% Target 13% 10% 5% 5% 0% 0% 2013 2014 2015 2013 2014 2015 Personal Care Tissue 30% 30% 25% Target 30% 25% 20% 20% 15% 15% Target 15% 10% 10% 5% 5% 0%
Slide 38: Profitable Growth
Profitable Growth Value - Maintain or expand margins and capital turnover - Grow net sales - Expand margins and capital turnover - Do not grow net sales May 19, 2016 SCA Capital Market Day 2016 38
Slide 39: Incentive Program Supports Value Creation
Incentive Program Supports Value Creation Target External Targets Internal KPI Suite Weight Growth % X% Organic Sales Growth % EBIT % X% By By Business Unit Business and WC % to Sales X% Area Value Stream Operating Cash Flow incl. Strategic Capex X% ROCE % Other Measures X% Long Term Incentive Progr
Slide 40: Sales by Business Unit
Sales by Business Unit President and CEO Executive Vice President Group Functions and CFO 86%* 14%* SCA SCA SCA SCA SCA SCA Vinda** Incontinence AfH Professional Consumer Goods MEIA Latin America Forest Products Care Hygiene 12%* 13%* 30%* 19%* 2%* 10%* Global Hygiene Category (GHC) Global Hygiene S
Slide 41: Q&A
Q&A May 19, 2016 SCA Capital Market Day 2016 41
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Slide 43: Sustainability - Driving Business Performance
Sustainability - Driving Business Performance Kersti Strandqvist, Senior Vice President, Group Function Sustainability
Slide 44: UN Global Goals
UN 17 Global Goals Strong link with hygiene, sanitation and climate action 1. End poverty 17. Partnerships for the goals 2. Zero hunger 16. Peace and justice 3. Health and well-being 15. Life on land 4. Quality education 14. Life below water 5. Gender equality 13. Climate action 6. Water and sanitat
Slide 45: Sustainability Creates Value
Sustainability Creates Value Driving profitable growth Winning with customers and consumers Resource efficiency = reduced cost and environmental impact Building brand equity The bigger picture = social and environmental value creation Business ethics and compliance Responsible business May 19, 2016
Slide 46: Sustainability Targets
Sustainability Targets People Targets Nature Targets People & Nature Climate & Innovations Energy Fiber Sourcing & Hygiene Solutions Biodiversity Code of Conduct Water Employee Health & Safety May 19, 2016 SCA Capital Market Day 2016 46
Slide 47: New Sustainability Targets
New Sustainability Targets Employee Health & Safety -50% accident frequency rate 2014-2020 Fiber Sourcing All fresh fiber in our products will be FSC or PEFC certified, or fulfill the FSC’s standard for controlled wood Water Tissue: -10% effluent water and organic content by 2020 Forest products: -1
Slide 48: Creating Value For People and Society
Creating Value For People and Society and driving profitable growth for SCA Better Hygiene for Better Health 500 million people 2 million use our hygiene people educated in 2015 products every day May 19, 2016 SCA Capital Market Day 2016 48
Slide 49: Winning With Customers and Consumers
Winning With Customers and Consumers Resource efficiency reduces cost and environmental impact Life Cycle Assessments improve customer offering Thinner incontinence products, baby diapers and feminine care products Tork Xpressnap reduces consumption by at least 25% Tork SmartOne dispenser systems Re
Slide 50: Climate and Energy
Climate and Energy Innovation and efficiency ESAVE (energy save) Since 2010 over 900 projects have resulted in accumulated energy savings of 8.2% New biofuel plant in Nokia, Finland Increased cost efficiency, 40% lower carbon emissions (20,000 tons/year) Pyrolysis technology makes waste valuable Use
Slide 51: Business Ethics and Compliance
Business Ethics and Compliance Manage risk and drive business performance SCA Code of Conduct Supply chain management Self Assessment Questionnaire through the Sedex database (Supply Ethical Data Exchange) Global supplier standard in supplier contracts Compliance and monitoring Code of Conduct audit
Slide 52: Awards and Ratings
Awards and Ratings May 19, 2016 SCA Capital Market Day 2016 52
Slide 53: Q&A
Q&A May 19, 2016 SCA Capital Market Day 2016 53
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Slide 55: SCA Forest Products
SCA Forest Products Ulf Larsson, President SCA Forest Products
Slide 56: Value Creation in Forest Products
Value Creation in Forest Products Long-term Future Integrated growth stable and Attractive Stable and value chain opportunities growing position in good cash creating demand for softwood • Liquid biofuels flow over time competitive • Green chemicals fiber based market position • Renewable products m
Slide 57: Full Control of our Value Chain
Full Control of our Value Chain Publication paper Pulp wood Kraftliner Pulp Wood chips Saw logs Logistics Solid-wood Sawdust Branches and tops Renewable energy May 19, 2016 SCA Capital Market Day 2016 57
Slide 58: SCA Forest Products
SCA Forest Products 14% of SCA Group Sales Q1 2016 2015 Sales by Product Segment 2015 Sales by Region Other Africa North America Pulp 3% Solid-wood Asia 4% 2% 16% 9% 31% products 2015 net sales SEK 17bn Uncoated 9% paper 4,000 employees Coated 16% 85% 25% Europe paper Kraftliner May 19, 2016 SCA Cap
Slide 59: SCA Forest Products
SCA Forest Products World class efficiency and stable cash flow Forest Assets Kraftliner Publication Paper • Maximize growth • High performance • High brightness containerboard publication paper • Optimized flow of raw material to our industry • #1 non-integrated • High innovation supplier in Europe
Slide 60: Pulp
Pulp Capacity expansion to world-class competitiveness Present Goal tons/year Cash cost leader and superior environmental footprint Supports forest value Enables biorefinery 900,000 development 430,000 NBSK Start-up mid 2018 100,000 CTMP 100,000 May 19, 2016 SCA Capital Market Day 2016 60
Slide 61: SCA Well Positioned in Global Pulp Market
SCA Well Positioned in Global Pulp Market Positive market Global supply Attractive position on growth outlook shortage projected global cost curve Global supply surplus (shortage) Global market growth CAGR* 2000-15 million tons softwood pulp ±0 Global market growth CAGR* 2015-20 2.3 1.7 -10 2015 203
Slide 62: World Class Efficiency
World Class Efficiency Productivity tons or m3/employee Index 180 160 140 120 100 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Solid-wood products Pulp Publication paper Kraftliner May 19, 2016 SCA Capital Market Day 2016 62
Slide 63: Operating Cash Flow and ROCE
Operating Cash Flow and ROCE* 2011-2015 Operating 3 000 10% Return on Cash Flow Capital (SEKm) Employed* 2 400 8% 1 800 6% 1 200 4% 600 2% 0 0% Operating Cash Flow (SEKm) Return on Capital Employed* * Return on capital employed excluding gains on forest swaps and items affecting comparability May 19
Slide 64: Summary and Key Takeaways
Summary and Key Takeaways SCA Forest Products Good growth for all product segments except publication paper Strong integrated value chain Well-invested asset base Responsible forest management Good relative and absolute profitability with strong cash flow May 19, 2016 SCA Capital Market Day 2016 64
Slide 65: Q&A
Q&A May 19, 2016 SCA Capital Market Day 2016 65
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Slide 67: Efficiency in Supply Chain
Efficiency in Supply Chain Ulrika Kolsrud, President SCA Global Hygiene Supply Personal Care Donato Giorgio, President SCA Global Hygiene Supply Tissue
Slide 68: Contributing Throughout the Value Chain
Contributing Throughout the Value Chain Profitable Growth Innovation Efficiency Technology Sourcing Footprint reflecting The right technology World class Manufacturing market needs solutions productivity Quick response to The right materials Minimal material and market opportunities Te
Slide 69: Hygiene Production Facilities Across the Globe
85 Hygiene Production Facilities Across the Globe Site JV/V Tissue Personal Care Ti/PC North America, 11 sites Asia Pacific (Vinda/V), 9 sites MEIA, 9 sites Europe, 39 sites Latin America, 14 sites May 19, 2016 SCA Capital Market Day 2016 69
Slide 70: Supply Efficiency has Big Impact on Profit
Supply Efficiency has Big Impact on Profit Personal Care Tissue % of sales % of sales EBIT EBIT 12% 11% Other costs 11% Other costs 23% 65% 78% COGS COGS May 19, 2016 SCA Capital Market Day 2016 70
Slide 71: Raw Materials is the Major Part of COGS
Raw Materials is the Major Part of COGS Personal Care Tissue % of COGS % of COGS Pulp Other 14% Other Pulp COGS 26% COGS 24% 27% SAP 11% Raw Raw materials materials 61% 7% Recovered 52% 10% Paper Transport & 11% Non- 12% Distribution woven Transport & 2% Distribution 21% 26% 9% Energy Energy Other R
Slide 72: Key Achievements
Key Achievements Accident frequency rate reduced by 37% from 2011 to 2015 Annual efficiency improvements and savings of 1.5-2.0% of COGS Reduced climate impact Roll out of innovations at a higher pace than ever May 19, 2016 SCA Capital Market Day 2016 72
Slide 73: Examples of Efficiency Gains and Savings
Examples of Efficiency Gains and Savings Footprint improvements Reduced logistics cost Faster and more flexible machines to reduce Capex Material optimization Efficiency improvements Examples Machine Efficiency Machine Waste Paper making Tissue North America Converting Personal Care North
Slide 74: Top Priorities
Top Priorities To deliver on business needs and build for future success Reduce accidents towards zero vision Excellent service level and predictable product quality Always in focus Reduce costs and improve capital efficiency Support an increased pace of innovation and market initiatives C
Slide 75: Deliver Savings
Deliver Savings through optimizing total value chain Supplier Sourcing R&D (Prod/Techn) Production Distribution Sales & Mkt Consumers Raw materials Customers Think and Act Total Value Chain May 19, 2016 SCA Capital Market Day 2016 75
Slide 76: Global Tissue Footprint and Capacity
Global Tissue Footprint and Capacity Site JV/V Tissue USA, Canada, 9 sites Ti/PC Asia Pacific (Vinda/V), 7 sites MEIA, 3 sites Europe, 32 sites 46 SCA plants + 15 JV/VINDA Latin America, 7 sites ~ 130 paper machines ~ 700 converting lines ~ 4.3 mton capacity May 19, 2016 SCA Capital Market Day 2016
Slide 77: 10 Year Tissue Supply Chain Roadmap
10 Year Tissue Supply Chain Roadmap USA, Canada Site JV/V Tissue Tissue/Personal Care Market is balanced Enable Tork to become the leader in the North American AfH market Europe Latin America Market overcapacity Rebalance the right capacity in the Market is short in paper right location Captur
Slide 78: Tissue Roadmap
Tissue Roadmap Possibilities in creating value over the next 10 years Structural Potential Organic Potential Innovation Sourcing Footprint & Technology Manufacturing & Optimization Quality Strategy Efficiency Energy Upgrades Savings Structural and organic efficiency opportunities in supply chain
Slide 79: Summary and Key Takeaways
Summary and Key Takeaways SCA GHS Personal Care and GHS Tissue Supply chain performance has big impact on profitability We drive cost and capital efficiency We support innovation and profitable growth Our mission is to deliver on local business needs Our ambition is to establish SCA as best
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Slide 81: Innovation for Value Creation
Innovation for Value Creation Annika Nordin, Acting President SCA Global Hygiene Category
Slide 82: Global Hygiene Category
Global Hygiene Category Hygiene Brands Innovation Intellectual Property Research and Development including Product Safety 90 countries #1 #2 INNOVATION CENTERS THREE “BILLION DOLLAR BRANDS” STRONG POSITIONS Sweden, France, Germany, USA, Tork, TENA and Vinda. Aspiration for more Number one or two Chi
Slide 83: Innovation and Brands Create Value
Innovation and Brands Create Value Drives profitable growth Crucial for brand building Meeting customer and consumer needs Build Drive global brand innovation for Bigger brands and positionings PROFITABLE bigger launches for GROWTH SCALE May 19, 2016 SCA Capital Market Day 2016 83
Slide 84: We Understand Consumer Trends
We Understand Consumer Trends IDENTITY Make it MINE RESPONSIBILITY the new A-gender HUNGRY planet Well Sense of being INTENSE Anything Rebirth of CONVENIENCE ON DEMAND CITIES May 19, 2016 SCA Capital Market Day 2016 84
Slide 85: We Know Our Consumer and Customer
We Know Our Consumer and Customer ! ? countries Market research Consumer versus Portraits/personas >150,000 people/year shopper behaviour Moodboard/film May 19, 2016 SCA Capital Market Day 2016 85
Slide 86: Combining Creativity and Efficiency
Combining Creativity and Efficiency Creative sessions Open innovation Research 30 innovations 2015 Customers Suppliers May 19, 2016 SCA Capital Market Day 2016 86
Slide 87: From Insight to Business Value: Libresse Roll.Press.Go
From Insight to Business Value Libresse – Roll.Press.Go “Women feel embarrassed leaving any trace behind when having their period.” Wrap pad in toilet paper to Marketing hide them. Solution Communication Improved Market Share and Sales Growth Insight New and unique feminine care disposal solution Ma
Slide 88: Video: Roll. Press. Go
Video Roll. Press. Go May 19, 2016 SCA Capital Market Day 2016 88
Slide 89: From Insight to Business Value: lights by TENA
From Insight to Business Value lights by TENA “… sometimes experience little leaks (“little Ooops moments”). … I use feminine Marketing liners now.” Solution Communication Sales Growth Insight A purpose-made product specifically designed for little leaks. May 19, 2016 SCA Capital Market Day 2016 89
Slide 90: Video: lights by TENA
Video lights by TENA May 19, 2016 SCA Capital Market Day 2016 90
Slide 91: From Insight to Business Value: Tork Image Design Line
From Insight to Business Value Tork Image Design Line “When refurbishing my image wash- rooms I want consumables that reinforce the interior design intent and function without hassle.” Marketing Solution Communication Increased Dispenser Placements Insight New dispenser line for premium washrooms, c
Slide 92: From Insight to Business Value: Libero Touch
From Insight to Business Value Libero Touch “I want the best fit and comfort for my baby to protect her delicate skin.” Marketing Solution Communication Sales Growth* Insight A soft and well fitting diaper that feels like it has been expertly crafted for your unique baby. * For total Libero sales in
Slide 93: Video: Libero Touch
Video Libero Touch May 19, 2016 SCA Capital Market Day 2016 93
Slide 94: From Insight to Business Value: Moist Toilet Tissue range
From Insight to Business Value Moist Toilet Tissue range 35% of consumers don’t feel clean enough after using classic toilet paper Marketing Solution Communication Improved Market Share and Sales Growth Insight New moist toilet tissue for a superior, reliable clean. Two simple steps: dry and moist.
Slide 95: Video: Moist Toilet Tissue
Video Moist Toilet Tissue May 19, 2016 SCA Capital Market Day 2016 95
Slide 96: Internet of Things
Internet of Things Tork EasyCube TENA Identifi May 19, 2016 SCA Capital Market Day 2016 96
Slide 97: Digital Transformation
Digital Transformation E-commerce Digital marketing – increasing part of our A&P TENA Men – Keep Control with Stirling Gravitas Libresse – Femoji’s May 19, 2016 SCA Capital Market Day 2016 97
Slide 98: Video: Libresse
Video Libresse May 19, 2016 SCA Capital Market Day 2016 98
Slide 99: Innovation for Profitable Growth
Innovation for Profitable Growth Innovation based on market trends and solid customer/consumer insight Sustainability, product safety and efficiency integrated into the process Some 30 innovations launched and 54 patent applications 2015 Innovation drives bigger brands and bigger launches May 19, 20
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Slide 101: SCA Incontinence Care
SCA Incontinence Care Margareta Lehmann, President SCA Incontinence Care
Slide 102: SCA Incontinence Care
SCA Incontinence Care 13% of SCA Group Sales Q1 2016 Global Sales Split 2015 TENA global leading incontinence Rest of brand World Covering TENA sales in 21% Europe, North America and Japan Sales across all channels: North 15% institutional, home care, 64% Europe America retail, e-commerce May 19, 20
Slide 103: Facts about Incontinence
Facts about Incontinence Acknowledged as a set of AT LEAST diseases by WHO* Different profiles from light to heavy 4-8% 400 OF GLOBAL WORLDWIDE MILLION PEOPLE POPULATION WORLDWIDE 1 in 10 adult men * World Health Organization Source: 2013 ICI Publication 1 in 4 woman +35 years Ma
Slide 104: Market Positions 2015
Market Positions 2015 SCA is the Global #1 with the TENA brand European Market North American Market Market size 2015: EUR 2.8bn Market size 2015: EUR 2.4bn Market growth CAGR* 2015-2020: 2-3% Market growth CAGR* 2015-2020: 5-7% Channel split Retail Institution 32% 21% Institution 31% 49% Re
Slide 105: Market Trends in Two Directions
Market Trends in Two Directions Growing market due to growing population of elderly Total population over 60 years exceeding 1bn by 2020 Prevalence increasing with age Market penetration increasing Increased pressure on public funding Cuts in reimbursement system Increased price pressure
Slide 106: Key Achievements
Key Achievements Outgrown the market in Europe for the past four years Increased innovation pace – 2/3 of our sales from new launches Management of market shift keeping market leadership in all channels in Europe Online sales increasing rapidly in all countries Efficiency throughout value chain lead
Slide 107: Customer and Consumer Focused Innovation
Customer and Consumer Focused Innovation New innovative solutions and communication TENA Pants Normal TENA Lady TENA Men May 19, 2016 SCA Capital Market Day 2016 107
Slide 108: Video: TENA Men
Video TENA Men May 19, 2016 SCA Capital Market Day 2016 108
Slide 109: Top Priorities
Top Priorities Build and strengthen TENA’s global market leadership through: Driving profitable growth above the market • Grow share • Grow penetration • Expand the category Increase value through innovations Lead channel shift and digital approach Shape the health care market Leveraging s
Slide 110: Profitable Growth
Profitable Growth Europe North America Drive growth in all channels Build foundation for Drive value through mix profitable growth improvements and upgrades Improve cost position Drive recruitment into the Clear Go-to-Market strategy category through information for Health Care and Home
Slide 111: We think DIGITAL in All We Do
We think DIGITAL in All We Do Marketing and communication Customer and consumer loyalty Sales channel – web shops Sales efficiency – CRM system Product and concept development * Customer Relationship Management May 19, 2016 SCA Capital Market Day 2016 111
Slide 112: Summary and Key Takeaways
Summary and Key Takeaways SCA Incontinence Care TENA is clear global market leader Well positioned to drive profitable growth through Capturing the opportunities based on excellent channel presence in Europe Drive towards a fair and profitable share in North America Strong innovation pipeline Improv
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Slide 114: SCA Consumer Goods
SCA Consumer Goods Volker Zöller, President SCA Consumer Goods
Slide 115: SCA Consumer Goods in Europe
SCA Consumer Goods in Europe 30%* of SCA Group Sales Q1 2016 2015 Sales by Category One face to the Retail Customer in Europe Feminine Beauty Care Care Incontinence Amongst top 10 non-food supplier of most retailers Products Retail 6% 2% 8% Approx. 50% Brand and 50% Retailer Brand Baby Care 14
Slide 116: Products and Brands
Products and Brands Incontinence Feminine Care Products Baby Care Beauty Care Consumer Tissue May 19, 2016 SCA Capital Market Day 2016 116
Slide 117: Market Positions 2015
Market Positions 2015 Strong market positions in Europe Consumer Tissue Baby Care Feminine Care Market size 2015: EUR 9.1bn Market size 2015: EUR 4.2bn Market size 2015: EUR 2.4bn Market growth CAGR* 2015-2020: 2-3% Market growth CAGR* 2015-2020: 2-3% Market growth CAGR* 2015-2020: 1-2%
Slide 118: Key Achievements
Key Achievements Good growth in all categories during 2015 Strong leading market positions in Europe and improved profitability in Consumer Tissue in last 5 years Fastest growing Feminine Care brand in Europe Doubled EBIT margins in Baby Care in last 5 years through major product upgrades Significan
Slide 119: Consumer Tissue
Consumer Tissue Delivering profitable growth Improved price management Price increases achieved during 2015 Driving branded sales growth Harmonized brand platform Relaunch with new umbrella brand pack design Innovations Driving category expansion Moist Toilet Paper Category vision roll-out May 19, 2
Slide 120: Baby Care
Baby Care Strengthened Baby Care Business in Europe Improved profitability for Baby Care in Europe Double-digit sales growth in Europe in 2015 Tier strategy for branded diaper business successfully implemented in Nordics Successful retailer brand business May 19, 2016 SCA Capital Market Day 2016 120
Slide 121: Feminine Care
Feminine Care Fastest growing Feminine Care Brand in Europe Double-digit organic sales growth in 2015 Market share gains in all key markets Successfully delivered consumer relevant innovations like Roll.Press.Go® with several “product of the year” awards High ROI on additional investment in A&P May
Slide 122: E-Commerce and Digital Activation
E-Commerce and Digital Activation E-Commerce • Focus on online pure player and retail customer online shops • Currently approx. 4% of our branded net sales but with double-digit growth rate Innovating Digital Activation Driving brand Loyalty – Nordic Libero club • 75% of target audience member of Li
Slide 123: Top Priorities
Top Priorities Successful launches of innovations for profitable growth Margin management in Consumer Tissue Grow Feminine Care business Continuously innovate Baby category - Super Premium roll-out Leverage our Go-to-Market approach Excel in e-commerce and digital May 19, 2016 SCA Capital Market Day
Slide 124: Summary and Key Takeaways
Summary and Key Takeaways SCA Consumer Goods Strong supplier to our European retail customers with successful dual track strategy – amongst top 10 non-food supplier in most retailers Delivering profitable growth in all categories Significant margin improvement in Tissue and Baby Focus on innovation
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Slide 126: SCA Away-from-Home Professional Hygiene
SCA Away-from-Home Professional Hygiene Don Lewis, President SCA AfH Professional Hygiene
Slide 127: SCA AfH Professional Hygiene
SCA AfH Professional Hygiene 19% of SCA Group Sales Q1 2016 Sells complete hygiene solutions including: Tissue Dispensers Global Sales Split Q1 2016 Soap, hand lotion and hand sanitizers Rest of Customer Segments: World Hotels, Restaurants, Catering Commercial Office Buildings 11% North America Publ
Slide 128: AfH Business is Much More than Tissue
AfH Business is Much More than Tissue Industry leading, award winning dispensers May 19, 2016 SCA Capital Market Day 2016 128
Slide 129: Market Positions 2015
Market Positions 2015 SCA is the Global #1 with the Tork brand European Market North American Market Market size 2015: USD 4bn Market size 2015: USD 5bn Market growth CAGR* 2015-2020: 2-3% Market growth CAGR* 2015-2020: 1-2% SCA position: #1 SCA position: #2 Other** SCA 28% GP Cascades O
Slide 130: AfH Market Trends
AfH Market Trends Innovations in hand hygiene monitoring and high capacity hand towel High growth in e-commerce Continued customer consolidation May 19, 2016 SCA Capital Market Day 2016 130
Slide 131: AfH Key Achievements
AfH Key Achievements Successful innovation launches Increase in Value Added Sales Customer awards Price discipline and range management across markets Growth in Global Accounts May 19, 2016 SCA Capital Market Day 2016 131
Slide 132: Profitable Growth – Achievement
Profitable Growth – Achievement Value Added Sales Growth in North America 42% 43% 40% 36% 33% 29% 26% 20% 16% 13% 9% 6% 8% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Value added sales as % of total sales May 19, 2016 SCA Capital Market Day 2016 132
Slide 133: Profitable Growth – Achievement
Profitable Growth – Achievement Growth of Global AfH Customers USD 1bn sales from global customers Global customer D&E expansion mirrors SCA markets Growing faster than market Strong global coordination of global accounts with global-leading Tork brand May 19, 2016 SCA Capital Market Day 2016 133
Slide 134: Acquisition of Wausau Paper
Acquisition of Wausau Paper Strategic fit - Wausau is a strong complement to SCA’s existing AfH business in North America SCA now has a clear #2 market position in North America Significant synergies of USD $40 million May 19, 2016 SCA Capital Market Day 2016 134
Slide 135: Tork EasyCube
Tork EasyCube Internet of Things approach to washroom usage and refill management Wifi sensors on dispensers send data to mobile devices and PCs Customers see labor savings, increased efficiency and improved end-user satisfaction May 19, 2016 SCA Capital Market Day 2016 135
Slide 136: Video: Tork EasyCube
Video Tork EasyCube May 19, 2016 SCA Capital Market Day 2016 136
Slide 137: Increasing Sales Through E-Commerce
Increasing Sales Through E-Commerce Rapidly growing market for AfH sales Estimated annual growth of 20-25% Focus on small business Higher margin sales Current initiatives with Amazon Staples Quill Partnering with distributor e-commerce sites with enhanced content May 19, 2016 SCA Capital Market Day
Slide 138: Top Priorities
Top Priorities Grow to #1 in North America Successful innovation launches Grow Tork Solutions “Service” business Expand Global Accounts Continued growth in Value Added Sales Deliver on e-commerce potential Successful integration of Wausau business May 19, 2016 SCA Capital Market Day 2016 138
Slide 139: Summary and Key Takeaways
Summary and Key Takeaways SCA AfH Professional Hygiene SCA AfH and Tork brand #1 globally AfH is more than “tissue” - it’s products, dispensing systems and services SCA’s AfH business delivering profitable growth with opportunities in Mature and Emerging markets May 19, 2016 SCA Capital Market Day 2
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Slide 141: Emerging Markets
Emerging Markets Magnus Groth, President and CEO
Slide 142: Global Hygiene Market 2015
Global Hygiene Market 2015 Higher market growth in Emerging Markets Global Hygiene Global Hygiene Emerging Markets Mature Markets 9% 21% Consumer Tissue 37% 17% AfH Tissue 44% Incontinence Products 13% 29% Baby Care 4% 9% Feminine Care 18% Market size 2015: EUR 47bn Market size 2015: EUR 52bn
Slide 143: SCA in Emerging Markets
SCA in Emerging Markets Organic sales growth of 11% in 2015 2009 2015 19% 32% 68% 81% Emerging markets Mature markets May 19, 2016 SCA Capital Market Day 2016 143
Slide 144: Hygiene Emerging Markets Size and Growth
Hygiene Emerging Markets Size and Growth Bubble size: Market size CAGR* 2015 - 2020 Russia Eastern € 2bn Europe ~9% € 3bn ~3% Turkey China € 1bn € 18bn ~6% 9% India Mexico € 1bn € 2bn ~13% ~6% Africa Colombia € 7bn € 1bn ~7% ~8% Brazil € 3bn 5% * Expected CAGR (Compound Annual Gr
Slide 145: Initially Lower Margins in Emerging Markets
Initially Lower Margins in Emerging Markets 2013 2015 Share of Operating Profit Share of Operating Profit 17% Operating Margin 2013* 2014* 2015 20% Mature markets 11.5% 13.0% 13.3% Emerging markets 7.7% 6.4% 7.0% Total Group 10.6% 11.1% 11.3% *excluding gains on forest swaps 83% 80% Emerging markets
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Slide 147: SCA Latin America
SCA Latin America Pablo Fuentes, President SCA Latin America
Slide 148: SCA Latin America
SCA Latin America 10% of SCA Group Sales Q1 2016 2015 Sales by Country 2015 Sales by Category Other Baby Care Chile 3% Brazil 7% Mexico 12% 5% Incontinence 31% Products Ecuador 12% Consumer 12% 39% Tissue Argentina 4% 9% Feminine 27% Central 29% Care 9% America Colombia AfH Tissue May 19, 2016 SCA C
Slide 149: Products and Brands
Products and Brands Incontinence Feminine Care Products Baby Care Consumer Tissue AfH Tissue May 19, 2016 SCA Capital Market Day 2016 149
Slide 150: Market Positions 2015
Market Positions 2015 Latin America Tissue Personal Care Market size: USD 6.4bn Market size: USD 5.3bn Market growth CAGR* 2015-2020: 5-6% Market growth CAGR* 2015-2020: 5-6% Market positions: #3 Tissue Market positions: #3 Personal Care (#3 in Consumer Tissue and AFH tissue) (#1 Inconti
Slide 151: SCA Market Positions
SCA Market Positions #1 in Latin America in Feminine and Incontinence Mexico and Central America Colombia Mexico Femcare #1 Femcare #1 Puerto Rico Inco #1 Inco #1 Dom. Republic Tissue #1 Tissue #2 AfH #3 AfH #1 Venezuela Baby #2 Baby #3 Central America Colombia Ecuador Ecuador Brazil Femcare #1 Inco
Slide 152: Market Trends
Market Trends Hygiene market in Latin America growing ~6% Consumption per capita still low in the region Uneven income distribution in most countries Modern retail channel growing but traditional channel is still important for low income consumers (split ~50/50) Consumers are generally loyal to bran
Slide 153: Key Achievements
Key Achievements Double digit organic sales growth for five years Record high market share in Feminine category Successful AfH business model with strong growth in proprietary systems Significant recent market share gains in Consumer Tissue Mexico to consolidate as solid #2 brand Strengthened positi
Slide 154: Profitable Growth
Profitable Growth Growth in Feminine Care Market Share and Sales Mexico Colombia Organic sales growth: 13% (CAGR* 2010-2015) Organic sales growth: 13% (CAGR* 2010-2015) 42.4% 65.2% 64.8% 64.8% 38.1% 63.8% 36.6% 62.1% 32.5% 59.6% 31.1% 29.7% 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015
Slide 155: Profitable Growth
Profitable Growth Growth in Mexican Consumer Tissue Market Share and Sales Organic sales growth: 7% (CAGR* 2012-2015) 14.5% 13.2% 10.7% 10.3% 2012 2013 2014 2015 Sales Market Share * CAGR (Compound Annual Growth Rate) May 19, 2016 SCA Capital Market Day 2016 155
Slide 156: Innovation
Innovation May 19, 2016 SCA Capital Market Day 2016 156
Slide 157: TENA Digital Campaign
TENA Digital Campaign Business objective Awareness of new product launch Drive Incontinence penetration Results achieved 2.8m views and 126% “Fan “growth >21k target interactions (engagement) 157 May 19, 2016 SCA Capital Market Day 2016 157
Slide 158: Video: TENA
Video TENA May 19, 2016 SCA Capital Market Day 2016 158
Slide 159: Top Priorities
Top Priorities Continue to grow faster than the market Innovation launches supporting profitable growth #1 or #2 position in all categories in all markets where we compete Speed-to-market as a competitive advantage Extend the core Enter and develop new categories to become the new core May 19, 2016
Slide 160: Summary and Key Takeaways
Summary and Key Takeaways SCA Latin America Hygiene markets with good growth opportunities SCA is growing faster than market delivering profitable growth Strong market positions with opportunities to strengthen further May 19, 2016 SCA Capital Market Day 2016 160
Slide 161: Q&A
Q&A May 19, 2016 SCA Capital Market Day 2016 161
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Slide 163: Vinda
Vinda LI Chao Wang, Founder, Chairman and Executive Director Christoph Michalski, CEO and Executive Director
Slide 164: Welcome to Vinda
Welcome to Vinda May 2016 Healthy Lifestyle____ Starts with Vinca « Vinda
Slide 165: Numbers at a Glance
Numbers at a Glance Founded in st 1985 1 Chinese tissue company to use 100% virgin woodpulp and implement a branding strategy Listed on the main board of 10 Hong Kong Stock Exchange Revenue in 2015 2007 Key hygiene brands HK$ 9.7bn (2007-2015 CAGR:23.4%) Nearly 10,000 Employees 14 Factories in mainl
Slide 166: What We Believe
What We Believe Vision To become Asia’s first choice for hygiene products and services Mission Provide people with high quality hygiene products and services Core Principles Sustainability, Innovation, Professionalism & Integrity 166
Slide 167: Our Ambition
Our Ambition Ambition To become a leading hygiene company in Asia To broaden the coverage of personal care business in China 167
Slide 168: Milestones
Milestones • Integrate SCA’s South East Asia, Taiwan and South Korea business 2016 • 1 million tons of tissue capacity • Integrate SCA’s China, HK & Macau hygiene business 2014 • 4 hygiene categories with 10 key hygiene brands 2013 • SCA became the largest shareholder (51.4% stakes) • 1st Chinese ti
Slide 169: Innovative Collaboration with SCA
Innovative Collaboration with SCA Vinda-SCA business integration 2014 - 2016 SCA increased its Vinda maintained its stakes to 51% 2013 independent listing status SCA increased its stakes to 22% 02 2012 SCA increased its stake to 18% 2008 Vinda listed on the main board of 2007 July HKEx. SCA stakes g
Slide 170: Strong Support by SCA
Strong Support by SCA Vinda’s speed-to-market, Asian insights & network, with SCA’s experience in global brand management Vinda’s legacy and expertise in Tissue, with SCA’s proven track record in Personal Care Vinda’s Innovation Centre Asia (ICA), fully supported by SCA’s global innovation, brand an
Slide 171: World Class Manufacturing
World Class Manufacturing Annual Designed Production Capacity Liaoning Production sites Tissue (Tons) Personal Care Beijing China (By end of 2016) Xinhui, Sanjiang 440,000 Shandong Hubei 180,000 Baby Zhejiang 150,000 Building Fempro & Inco Sichuan Zhejiang Shandong 110,000 Hubei Liaoning 55,000 Sich
Slide 172: Strong Growth Trend (since Listing)
Strong Growth Trend (since Listing) Revenue Gross Profit 12 000 (HK$ million) 3 500 (HK$ million) 9 696 2 959 10 000 CAGR: 23.4% 3 000 7 985 2 409 8 000 2 500 6 798 6 024 2 000 1 855 1 972 6 000 4 765 +17.8% 1 297 3 602 1 500 4 000 2 424 2 776 2 559 950 1 062 1 778 1 000 782 2 000 513 500 366 0 2007
Slide 173: Vinda's Business
Vinda’s Business 173
Slide 174: Business Categories
Business Categories Pro forma with integration of SCA business 3,5% in Malaysia, South Korea and Taiwan* 24% 2015 2015 Revenue Revenue (Pro forma) 96,5% 76% *Calculation of revenue of SCA business in Malaysia, South Korea and Taiwan based on trailing 12-month ended 30 September 2015 Tissue Personal
Slide 175: Channel Coverage
Channel Coverage E-commerce Contribution to Vinda’s 13% revenue E-commerce (%) 14 13.0 12 29% 2015 10 46% Revenue 8 7.0 Modern Traditional Channel 6 Distributor (Hypermarket, 4 2.6 Supermarket) 2 0.1 0.7 12% 0 2011 2012 2013 2014 2015 B2B Vinda has 269 sales offices & 1,656 distributors in China as
Slide 176: Mid-Long Run Growth Catalysts (China)
Mid-Long Run Growth Catalysts (China) Feminine Stringent Care Urbanisation Rise of environmental E-commerce regulations Concern One-Belt Aging over One-Road population product safety 176
Slide 177: Rise of E-commerce (China)
Rise of E-commerce (China) Ranking of China E-commerce Online Sale’s Market Share in China Retailers FMCG Sector (Composite Score)* JD 74 Tmall 71 Yihaodian 67 Online’s sales CAGR Amazon 19 (2015-2020) : 40% Suning 13 VIP.com 9 Jumei 6 Womai 4 SFbest 4 WeChat 3 Source: Kantar Digital Power Study 201
Slide 178: Hygiene Market Size in Asia (2015)
Hygiene Market Size in Asia (2015) 2015 market size: ~EUR29B +4% N. Asia +10% +15% SEA 9% Baby 11% 22% Tissue + 6% Region Category 51% Fempro China 23% 80% +10% +7% Inco 4% Source: +15% 1.South East Asia, North Asia: SCA GMD • South East Asia: Malaysia, Singapore, Indonesia, Philippines, Thailand, V
Slide 179: Leading Market Position
Leading Market Position Tissue Incontinence #1 in Taiwan2 # 1 brand in China1 #1 in Malaysia3 #1 in Singapore3 # 1 in Hong Kong2 Leading position in export market3 Feminine Baby #1 in Malaysia4 #2 in Singapore5 Joint #1 in Malaysia4 Significant presence also in Thailand, Philippi
Slide 180: Innovation
Innovation Product Branding & Marketing • 3 ply-softpack • Sports campaign • 4-ply coreless-roll (bowling, volleyball, NBA) • Flushable toilet wipe • Kitchen wet wipe • Animation campaign • Flat kitchen towel (Pleasant Goat, Kungfu Panda, Iced-age, spongebob) • Tissue wedding gown & bus tour campaig
Slide 181: Our Priorities
Our Priorities 11 Vinda brand in all market segments, build new categories. Drive Tissue Drive Tissue Tempo in premium and selected categories. business business inin China Build Away-from-home market. China 2 Broaden 2 care personal Become the leader in Incontinence with TENA & Dr. P. prese
Slide 182: Disclaimer
Disclaimer Information contained in our presentation is intended solely for your personal reference and is strictly confidential. Such information is subject to change without notice, its accuracy is not guaranteed and it may not contain all material information concerning the company and/or its bus
Slide 183: Thank You
Thank You Vinda
Slide 184: Q&A
Q&A May 19, 2016 SCA Capital Market Day 2016 184
Slide 185: Summary and Key Takeaways
Summary and Key Takeaways Favorable market trends Solid strategy for value creation Profitable growth opportunities in categories, geographies and in digital Innovation driving consumer and customer value Future efficiency opportunities Creating two divisions Hygiene and Forest Product
Slide 186: SCA Capital Market Day 2016
SCA Capital Market Day 2016 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 understandi
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