Svenska Cellulosa Ab Sca Class A · OMXSTO:SCA_A
Svenska Cellulosa Ab Sca Class A — SCA — Investor Presentation (October 2022)
102 slides from Svenska Cellulosa Ab Sca Class A's investor presentation, Oct 28, 2022
Slide 1: Investor Relations October, 2022
Investor Relations October, 2022
Slide 2: A strong and integrated value chain
A strong and integrated value chain Sales (SEKbn) EBITDA (SEKbn) 18.8 9.1 EBITDA margin Industrial ROCE 1 48% 33% Climate benefit Net growth in forest 10.5 m t CO2 3.9 m m3fo Note: Forest, Wood, Pulp and Containerboard are segments with full reporting. Renewable energy and 2 Logistics are reported a
Slide 3: Europe's largest private forest owner
Europe’s largest private forest owner Sawmill Forestland Pulp mill Kraftliner mill 6% 2.6 m ha of Sweden Pellet production SCA’s forest Productive forestland Munksund 2.0 m ha Obbola Rundvik Stugun Bollstabruk Standing volume 1 Gällö Härnösand Östrand 261 m m3fo Tunadal Ortviken 1. 2021, Including f
Slide 4: We use the entire tree
We use the Wind turbines Electricity entire tree Heat Bioenergy Logging residue & w ood fuel Pellets Tall oil, Liquid biofuels black liquor & bark Pulp & paper m ills Pulp Pulpw ood Containerboard Bark & Wood-chips saw dust Saw m ills Solid-w ood products Saw logs 4
Slide 5: Integrated value chain with high self sufficiency
Integrated value chain with high self sufficiency ~50% ~95% >100% ~40% ~45% Wood sourcing Electricity usage Solid biofuels SCA Logistics 1) Transportation fuel 11 M m3 1.7 TWh 12 TWh 2.4 SEKbn 100 kt External exposure District heating External suppliers Sold externally Wind lease (e.g. pellets) Exte
Slide 6: Strategy for profitable growth
Strategy for profitable growth Increased value Invest in integrated value chain: from each tree • Grow pulp, containerboard and wood • Realize business opportunities within renewable energy Growing Increase forest holding: renewable forest • Increased growth and harvesting level asset • Continue
Slide 7: Strong project portfolio
Strong project portfolio - generates long term value Value Decided and ongoing projects Organic growth Grow ing forest assets Renew able fuels Grow Wood Further potential Pulp & Containerboard Ow n w ind pow er Increased forest ownership in Baltics Biofuel Bio refinery and Nordic C
Slide 8: SCA 2025 – shifting the portfolio to growing product areas
SCA 2025 – shifting the portfolio to growing product areas Growing Forest asset Wood Publication paper Kraftliner Pulp Renewable energy Harvesting own forest (k m 3) 1 Capacity (k m 3) Capacity (kt) Capacity (kt) Capacity (kt) Wind power capacity (TWh) +1,100k m3 +400k m3 -1,810kt +340kt +880kt +11T
Slide 9: The forest places high demands on us as owner
The forest places high demands on us as owner Extensive Long-term perspective Circularity responsibility - - - What we do with our forests today With a circular approach the forest To maximize the positive climate affects coming generations provides a solution to the negative impact from our forests
Slide 10: Group sustainability targets 2030
Group sustainability targets 2030 Fossil-free world Valuable forests Efficient use of Responsibility for people resources and the community Group target 2030 Group target 2030 Group target 2030 Group target 2030 Increase SCA’s climate benefit from 10 to 100% wood raw material from responsibly Zero w
Slide 11: SCA's forests bind CO2 and replace fossil products
SCA’s forests bind CO2 and Replaces 2 Higher growth enables more substitution – 5.8 replace fossil based products Mt CO2 renewable alternatives replace fossil based products SCA’s renewable Non-renewable Binds 1 products products net Growing forests bind CO 2 – 5.4 active forest management Bioenergy
Slide 12: Circularity is the key to a fossil free world
Circularity is the key to a fossil free world A circular value chain for our products creates climate benefits Biodegrable, compostable Growing trees bind CO2 Reuse, recover, recycle Active forest management increases Replaces products growth with a larger carbon foot print With higher net growth, e
Slide 13: Proactive responsibility for biodiversity
Proactive responsibility for biodiversity Innovating to secure access to habitats for vulnerable species Horned powderpost beetle Coral tooth fungus Old man’s beard • Increased quality and precision in • Conservation and restoration nature conservation • Partnerships • Focus on red-listed species an
Slide 14: Mitigating global warming
Mitigating global warming SCA’s products substitute fossil based alternatives Renewable packaging Green electricity Sustainable buildings Replacing fossil materials Material efficient packaging Bioenergy and green chemicals 14
Slide 15: SCA is part of all the 17 UN's Sustainable Development Goals
SCA is part of SCA contributes to SCA is engaged in Fossil-free Sweden, SCA ranked number all the 17 UN’s the development of supporting Sweden two in biodiversity Sustainable responsible forest in becoming the index 2021 Development Goals management world’s first fossil- free welfare nation 15
Slide 16: Forest
Forest QSSCA
Slide 17: Europe's largest private forest owner
Europe’s largest private forest owner Sales (SEKm) Forest holdings located close to SCA’s industry Sawmill 6% 6,148 Pulp mill Kraftliner mill of Sweden • 2.6m ha forestland Pellet production SCA’s forest • 2.0m ha productive forestland EBITDA (SEKm) • 261 m m3fo standing volume 1 Munksund 2,644 ~50%
Slide 18: Forest assets create value in several ways
Forest assets create value in several ways Harvesting Net growth Land value Positive climate effect 18
Slide 19: Profitable growth since 1950
Profitable growth since 1950 Standing volume SCA Growing Harvest plan own forest Increasing Increasing Land value Sweden 1 Increasing million m3fo asset base million m3sub cash cashflow flow SEK/m3fo (real value) land value +75% +140% +380% 535 256 4.8 146 >6,000% nominal 2.0 increase 111 1950 2021
Slide 20: SCA's Forest Total Return
SCA’s Forest Total Return CAGR of 10% since 1956 Forest – Total Return SCA’s Forest Index (1956-2020) CAGR 1 Increasing cash flow 10% • Harvesting provides raw materials to the industries and generates cash flow − Cash flow: ~3% CAGR CAGR 2004-2020 8% 2 Growing asset base • Forest growth exceeds har
Slide 21: Significant real growth of 3.6%
Significant real growth of 3.6% Forest growth metrics (m m 3fo) Gross growth of standing forest 10.5 Natural losses and pre-commercial thinning -1.4 Real growth rate of 3.6% (in relation to ingoing Available growth of standing forest 9.1 standing volume in Sweden of 252m m3fo) 1 Current cash flow An
Slide 22: Higher forest growth enables increased harvesting
Higher forest growth enables increased harvesting Gross forest growth Sweden Harvesting plan Latest forest survey conducted in 2019 (m m 3fo / year) (m m 3sub / year) +1 +1.1 Annual growth 1m m3fo higher than expected 10.5 5.4 9.5 • Gross growth of 10.5 (9.5) m m3fo per year 4.3 • Net growth of 4.0
Slide 23: Increase in both standing volume and harvesting level
Based on Increase in both standing volume current technology and harvesting level Harvesting from own forest (m m3sub) Standing timber volume (m m3fo) +200% 350 +100% 6 300 5 250 4 200 3 150 2 100 Increasing cash flow Growing asset base 1 50 0 0 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
Slide 24: Improved practices and technology increase growth
Improved practices and technology increase growth m 3fo/ha Growth plan at different taxations (standing volume / hectare) 140 1 Tax X vs 2019 Tax IX Silviculture 130 +9 m fo/ha 3 120 2 Tax IX vs 2014 Improved seedlings 110 Tax VI +14 m fo/ha 3 100 Tax VI 3 vs 1984 Tax II Introduction of Contorta pin
Slide 25: Harvesting plan
Harvesting plan Optimizes value and supply Harvesting plan per tree species (m m3sub) 6.0 1 Deciduous trees Secure supply 5.0 Contorta 4.0 2 Meet restrictions 3.0 Spruce 2.0 3 Optimize value 1.0 Pine 0.0 2015-2019 2020-2024 2025-2029 2030-2034 2035-2039 2040-2044 2045-2049 Note: Based on Tax X (2019
Slide 26: Forest acquisitions in the Baltics – strengthen wood supply
Forest acquisitions in the Baltics – strengthen wood supply for future projects 1 2 3 Strengthening of the High growth potential Repeat SCA’s successful integrated value chain • High growth – 3x northern Sweden Swedish forest development • Strengthen raw material supply and • Platform for further ex
Slide 27: SCA's forest holdings in the Baltics
SCA’s forest holdings in the Baltics Land Q3 2022 Target (hectare) (hectare) 63,000 100,000 Forest land Q3 2022 (hectare) 52,000 27
Slide 28: Limited supply of wood raw material
Limited supply of wood raw material Estimated change in harvesting potential 2018-2025 (softwood sawlogs) Demand of wood products growing faster than supply CAGR 2018-2025e ~2.0% • Insect damage in Canada +11m m 3 • Harvesting restrictions in China -10m m 3 +3m m 3 • Limited potential for new softwo
Slide 29: Forest – strategic direction
Forest – strategic direction 1 Increase growth and harvesting while maintaining high environmental ambitions 2 Acquire forest that supports SCA industries 3 Increase the precision and quality in biodiversity conservation measures 4 Increase digitalization of planning, logging, forest management and
Slide 30: Wood
\Wood QSSCA
Slide 31: Leading European wood producer
Leading European wood producer Sales (SEKm) 7,080 5 modern and well invested sawmills 2 painting and 5 planing facilities 2.2m m capacity 3 EBITDA (SEKm) Own distribution network 420k Munksund 2,968 Focus on value added products • Adapted wood to the further processing industry 330k • Distribution o
Slide 32: Long-term structural drivers sustain softwood demand growth
Long-term structural drivers sustain softwood demand growth Underlying economic drivers Strong global softwood demand Economic growth: Continued increased living standard in m m3 several fast growing markets drives consumption of softwood ~2% 3.1% CAGR CAGR Other Building activities: Recovery for bo
Slide 33: The Global Wood value chain
The Global Wood value chain Segment Value chain, integration and product group Consuming sector Sawn wood products Finished wood product End consumer (examples) channel ~20% ~12% Furniture ”Furniture-retail” Interior Decoration Living with Wood Solid Wooden Flooring Interior Cladding ~40% ~65% RMI (
Slide 34: SCA's position in the global wood value chain
SCA’s position in the global wood value chain Optimizing value and integration level Segment Sawn wood products Finished wood product End consumer SCA volume channel ~27% ~10% Furniture ”Furniture-retail” Living with Wood Solid Wooden Flooring Interior Cladding ~70% ~65% Boards Exterior Cladding ”DI
Slide 35: Building with wood – RMI has the largest wood consumption
Building with wood – RMI 1 has the largest wood consumption and is stable New builds in Sweden RMI in Sweden (k housing starts) (k m euro at 2020 prices) 70 18 1 ~75% of all softwood is used for 16 RMI and new build 60 14 50 2 12 RMI more stable over time than new build 40 10 and single largest cons
Slide 36: One of the largest and most efficient sawmill operations in Europe
One of the largest and most efficient sawmill operations in Europe Growing forest asset Structural change and increased productivity State of art technology Europe’s largest private forest owner 2010 2021 2025 Harvesting own forest (k m 3) +1,100k m3 5,400 Boden 4,800 4,300 Vilhelmina Munksund Munks
Slide 37: Digitalization increases the value from each tree
Digitalization increases the value from each tree 1 CT-Scan Improve efficiency 3D-visualization of every log and value optimization Volume growth and production optimization Log Eye Detection of log-ID to 2 control rotation for maximized value Increase revenue Secure highest value from each tree Sca
Slide 38: Wood – strategic direction
Wood – strategic direction 1 Strengthen SCA’s integrated value chain – sawlogs give the largest revenue from a tree 2 Continued profitable growth in balance with access to raw materials through: • Value-added and customized products • Developing the business offering to the building-materials trade
Slide 39: Pulp
Pulp QSSCA
Slide 40: High quality pulp producer
High quality pulp producer Sales (SEKm) High quality bleached softwood kraft pulp (NBSK) 5,743 • Focus on high strength properties • Capacity: 900 kt/year 1.0Mt capacity • The pulp is used in tissue, packaging, publication paper EBITDA (SEKm) and filters 2,096 Chemical thermomechanical pulp (CTMP) •
Slide 41: SCA pulp portfolio
SCA pulp portfolio NBSK CTMP Produced by cooking wood chips in white liquor Produced by grinding wood chips in a refiner Gives pulp with long, strong fibers Gives shorter, stiffer fibers that provide absorption capacity, bulk and stiffness Provides high strength and brightness Lower consumption of w
Slide 42: Increasing pulp demand driven by a growing tissue market
Increasing pulp demand driven by a growing tissue market Demand growing ~2% per year driven by tissue SCA has ~90% exposure to tissue and specialty paper Global softwood pulp demand (m tonnes) 2019 Present 30 CAGR ~2% 30% 30% 30% 25% Market (global) 25 40% 45% Limited exposure to Printing & Writing
Slide 43: World's largest NBSK pulp line
World’s largest NBSK pulp line Cash cost global BSK producers Production began in June 2018 • On budget and on time Meets long-term demand growth Östrand Competitive cost position • Doubled NBSK capacity • Fixed cost reduction • Improved energy balance • Wood supply secured 1st Quartile 2nd Quartile
Slide 44: Northern Swedish fiber for premium pulp products
Northern Swedish fiber for premium pulp products 1 Premium strength 2 Wet strength 3 Filter application 4 Custom-made grades 44
Slide 45: CTMP investment
CTMP investment QS SCA
Slide 46: Investment in increased CTMP production
Investment in increased CTMP production Expanding a profitable CTMP business Low investment per tonne CTMP plant with global competitiveness Improves customer product properties at lower cost High share of growth with existing customers 46
Slide 47: CTMP improves customer product properties at lower cost
CTMP improves customer product properties at lower cost Cost-cutting for customer Product properties Replaces more expensive pulp 1 High bulk and bending rigidity Lower weight at a given strength Board Good smell and taste properties provides a lower production cost 2 Increased absorption per kg Tis
Slide 48: Increasing exposure to structurally growing segments
Increasing exposure to structurally growing segments Market plan by geography Market plan by customer Market plan by product Printing Existing paper New CTMP Specialty Asia customers volume Europe Board Tissue USA Former customers Growth with current CTMP CTMP to customers current NBSK customers Eur
Slide 49: SCA invests in businesses with market leading positions
SCA invests in businesses with market leading positions Investment rationale Cost curve SW CTMP producers Increase capacity from 100kt to 300kt Move production from Östrand to Ortviken Low CAPEX per tonne • CAPEX SEK 1.45bn • CAPEX SEK 5k per tonne CTMP today • Utilize existing modern TMP asset CTMP
Slide 50: CTMP expansion drives profitable growth
CTMP expansion drives profitable growth Investment ’20-’23 (SEKbn) CTMP capacity (kt) EBITDA (SEKbn) Financial summary +1.45bn +200kt +0.3bn Capex of SEK ~1.45bn 1.45 300 Profitable growth • +SEK 0.3bn EBITDA • Secure current business Expected start up year end 2022 • CTMP production to stop at Östr
Slide 51: Pulp – strategic direction
Pulp – strategic direction 1 Develop the position as premium supplier – for quality and service – for tissue manufacturers 2 Develop a position as leading supplier of CTMP from the Ortviken site 3 Plan for continued expansion of the softwood kraft pulp capacity 4 Maximize the value of by-products su
Slide 52: Containerboard
Containerboard QSSCA
Slide 53: Leading Kraftliner supplier
Leading Kraftliner supplier Sales (SEKm) No.1 independent producer of Kraftliner in Europe 5,456 • Strong Nordic fresh fiber for high quality packaging • Capacity: 865 kt/year • Products: brown and white-top kraftliner for consumer and EBITDA (SEKm) transport packaging, including specialized heavy-d
Slide 54: Containerboard demand shows resilience during corona pandemic
Containerboard demand shows resilience during corona pandemic Containerboard a 160 Mt global market... …with a stable growth of ~3% per year CAGR ~3% 370Mt +90 Mt NSPT UM CM Specialties 200 CWF Containerboard UWF 180 160 Tissue 140 Sack 120 160Mt CB 100 80 2003 2005 2007 2009 2011 2013 2015 2017 201
Slide 55: Long-term structural trends drive growth
Long-term structural trends drive growth Kraftliner demand growth Economic drivers 3 4 5 1• Industrial production Favorable trends 2• Consumer spending Kraftliner 1 2 Structural growth 3• E-commerce Underlying growth 4• Changes in retail 5• Sustainable packaging 2005 2019 55
Slide 56: SCA focuses on the European kraftliner market
SCA focuses on the European kraftliner market Containerboard global demand Kraftliner global demand Kraftliner European demand 160Mt 35Mt 5Mt SCA’s core markets SemiChem CIS & China Asia Turkey Africa Australia White-Top Kraftliner Latin Europe Kraftliner America Testliner 5 Mt 35 Mt Unbleached Kraf
Slide 57: Kraftliner for packaging that requires strength
Kraftliner for packaging that requires strength SCA’s strong fiber suitable for kraftliner applications Applications Containerboard Applications Kraftliner 1 Climate variations in 25% industrial supply chain and fresh food Other Industrial 2 Other Long distance transport Consumer products Fresh food
Slide 58: Asset renewal secures long-term competitiveness
Asset renewal secures long-term competitiveness New Kraftliner PM’s since 2000 Obbola largest Strengthened market leading position Kraftliner PM 800 • Europe’s largest independent producer of kraftliner • Increased market share 700 600 PM capacity (kt) Improved cost position 500 • Significantly
Slide 59: Parallel start-up ensures EBITDA enhancement from start
Parallel start-up ensures EBITDA enhancement from start Parallel construction of the new paper machine ensures full production during the construction period • Fiber line switched to new machine post construction • Only a minor investment stop required Sequential start-up of pulp line minimizes
Slide 60: Kraftliner expansion drives profitable growth
Kraftliner expansion drives profitable growth We invest to secure the first 450kt and to add 275kt Obbola investment ’19-’23 Obbola production (kt) EBITDA (SEKbn) Profitable growth +5bn +275kt +0.8-1.0 Most value creative alternative ~7.5 Capex of ~7.5 SEKbn 725 • Life extension: ~2.5bn non-optional
Slide 61: Obbola expansion is on budget and ahead of time
Obbola expansion is on budget and ahead of time July 22, 2022 Fiber Line Q3 2021 Recovery Boiler Q3 2021 Four sub-projects delivered Wood Handling Q4 2021 Lime Kiln Q4 2021 Operating trials Paper Machine Q4 2022 Originally planned Q1 2023 Effluent Treatment Q1 2023 OCC Q2 2023 2019 2020 2021 2022 20
Slide 62: Profitable during first year of operation
Profitable during first year of operation Obbola production (kt) New 725kt paper machine at Obbola +275kt 725 SEK 7.5bn investment Start up new paper machine expected in year end 2022 • 3 year ramp-up to full capacity 450 • Profitable during the first year of operation Project proceeding according t
Slide 63: Paper – strategic direction
Paper – strategic direction 1 Implement the investment to increase kraftliner production at the Obbola paper mill 2 Continue the initiative to offer the market’s best service and product range as an independent supplier 3 Continue investments in specialty products, such as white-top and wet- strengt
Slide 64: Renewable energy
Renewable energy QSSCA
Slide 65: Renewable energy – potential to increase value of each tree
Renewable energy – potential to increase value of each tree Target 2025 Long-term potential 11 300k TWh m3 Increasing the value of forest and land Corresponding to electrification of all cars in Sweden Corresponding to fossil-free domestic aviation in Sweden 65
Slide 66: 11 TWh wind power on SCA land by 2025
11 TWh wind power on SCA land by 2025 Initiate new wind projects on SCA land and develop after market offering New target 11 TWh Today, 665 wind turbines operate on SCA’s land with an annual production capacity of 6.9 TWh • Corresponds to ~20% of Sweden’s wind power →2023 production 9 TWh 9 TWh secu
Slide 67: Investment in production of biofuels
Investment in production of biofuels Joint venture with St1 Ownership Capacity (k m 3) Investment (bn SEK) Growing market for advanced biofuels • Demand growing 15-20% per year Strong integrated value chain from forest to end-user in energy sector Joint Venture Increased value of rest products
Slide 68: Three potential feedstocks with different technology maturity
Three potential feedstocks with different technology maturity 1 Crude tall oil and other vegetable oils Mature technology In operation 2023 CTO HVO, biojet Destillery Biorefinery 2 Solid biomass Long term Under development Solid biomass Advanced biofuels, Biorefinery biojet 3 Long term Black liquor
Slide 69: Renewable energy – strategic direction
Renewable energy – strategic direction 1 Develop new position as a supplier of biofuels and green chemicals 2 Prepare for increased production of biofuels and green chemicals adjacent to SCA’s own industrial plants 3 Maximize wind power on SCA’s land and invest in own wind power 3 Maximize productio
Slide 70: Financials
Financials QSSCA
Slide 71: SCA's performance Q3 2022
SCA’s performance Q3 2022 EBITDA (SEKm) Industrial ROCE 1 EBITDA (SEKm) and EBITDA margin 2,484 44% -7% 3,121 2,806 2,684 2,608 2,484 2,260 EBITDA margin Net debt/EBITDA 59% 53% 52% 53% 1,377 1,359 50% 50% 0.8x 47% 1,032 33% 30% 24% Q3 '20 Q4 '20 Q1 '21 Q2 '21 Q3 '21 Q4 '21 Q1'22 Q2'22 Q3'22 1. LTM
Slide 72: Contribution by segment and quarter
Contribution by segment and quarter Forest Wood Pulp Containerboard/Paper 1 Net sales (SEKm) 2,202 2,183 1,981 1,926 1,897 1,868 1,772 1,731 1,765 1,694 1,717 1,691 1,659 1,629 1,627 1,609 1,592 1,518 1,565 1,564 1,522 1,498 1,474 1,455 1,412 1,340 1,326 1,368 1,272 1,288 1,264 1,166 Q4 Q1 Q2 Q3 Q4
Slide 73: Balance sheet
Balance sheet SEKm Sep 30, 2022 Dec 31, 2021 Forest assets 90,220 84,497 Working capital 3,548 2,823 Deferred tax relating to forest assets -17,942 -16,905 Other capital employed 21,770 20,392 Total capital employed 97,596 90,807 Net debt 8,281 7,752 Net debt/EBITDA 0.8x 0.9x Equity 89,315 83,055 Ne
Slide 74: Sales and EBITDA development
Sales and EBITDA development Sales (SEKm) EBITDA1 (SEKm) and EBITDA margin 19,591 18,755 18,410 18,822 9,109 16,664 16,152 15,412 15,373 48% 5,252 5,319 4,440 3,781 3,648 3,300 3,385 28% 27% 23% 24% 21% 22% 22% 2014 2015 2016 2017 2018 2019 2020 2021 2014 2015 2016 2017 2018 2019 2020 2021 1. Exclud
Slide 75: Share information
Share information QSSCA
Slide 76: Constantly changing world – but the forest always creates value
Constantly changing world – but the forest always creates value SCA discontinues publication paper expands pulp and kraftliner, and entering renew able biofuel creating SCA took the first step tow ards v alue in and from the forest becoming a consumer goods company w ith the acquisition of the Sw ed
Slide 77: SCA's total shareholder return
SCA’s total shareholder return SCA’s total shareholder return (TSR) since the distribution of Essity 350 325 300 275 150% 250 142% 225 Index 60% 200 175 32% 150 31% 125 30% 100 19% 75 50 jun-17 sep-17 dec-17 mar-18 jun-18 sep-18 dec-18 mar-19 jun-19 sep-19 dec-19 mar-20 jun-20 sep-20 dec-20 mar-21 j
Slide 78: Shareholder structure
Shareholder structure SCA’s largest shareholders as of September 30, 2022 # Shareholder Capital Votes Number of shareholders 1 Industrivärden 10.3% 29.3% 2 3 Norges Bank AMF Pension & Fonder 7.2% 8.0% 9.6% 5.8% ~108,000 4 Handelsbanken Pensionsstiftelse 1.4% 3.4% 5 Alecta Pensionsförsäkring 4.6% 2.5
Slide 79: Appendix
Slide 80: Forest Total Return
Forest Total Return QSSCA
Slide 81: Forest assets create value in several ways
Forest assets create value in several ways Harvesting Net growth Land value Positive climate effect 81
Slide 82: We have never had as much forest in Sweden as we have today
We have never had as much forest in Sweden as we have today Standing volume Sweden Growing Harvest Sweden Increasing Increasing Land value Sweden 1 Increasing m3fo/ha asset base m3fo/ha cash cashflow flow SEK/m3fo (real value) land value +60% +110% +330% 4.1 143 535 89 2.0 124 1956 2021 1956 2021 19
Slide 83: Forest Total Return
Forest Total Return CAGR of 10% since 1956 Forest – Total Return Index Sweden (1956-2020) CAGR 1 Increasing cash flow 50,000 10% • Harvesting provides raw materials to the CAGR 2004-2021 industries and generates cash flow 45,000 − Cash flow: ~3% CAGR 8% 40,000 2 Growing asset base 35,000 • Forest gr
Slide 84: The climate benefit from Sweden's forest industry has more than doubled
The climate benefit from Sweden’s forest industry has more than doubled Positive climate effect of Swedish forestry industry vs. Sweden's total fossil emissions 1 Growing forests bind CO2 (million tonnes CO2 equivalents per year) Mt CO2 2019 • Growing forests capture and bind CO2 – 100 active forest
Slide 85: Forest a strategic resource for the future
Forest a strategic resource for the future Estimated change in harvesting potential 2018-2025 (softwood sawlogs) Demand of wood products growing faster than supply CAGR 2018-2025e ~2.0% • Insect damage in Canada +11m m 3 • Harvesting restrictions in China -10m m 3 +3m m 3 • Limited potential for new
Slide 86: Growing forest asset
Growing forest asset QSSCA
Slide 87: Swedish forest transformation
Swedish forest transformation Exploitative selective logging of the 1920’s 1 The forest landscape of today 1. Source: SLU, Skogsbilder. 87
Slide 88: Improved seedlings
Improved seedlings The world’s largest forest tree nursery with capacity to produce 100 million seedlings per year >25% faster growth potential than natural regeneration Selective breeding bring seed with higher quality, survival rate and growth On site R&D to improve growth and protection Innovativ
Slide 89: Global climate change
Global climate change Global warming will have a significant Increased growth in northern Sweden Increased risk impact on the climate in northern Sweden Significant longer growth period – Increased risk for storms, fire, ✓ earlier in spring, later in autumn × infestation and snow damage 25-30% incre
Slide 90: Efficient wood sourcing organization
Efficient wood sourcing organization Kiruna Europe’s largest private forest owner 50% self 2.6 m ha sufficiency Murjek Wood sourcing Luleå to industries Storuman Piteå 12 m m3sub Lycksele Terminal Industry (pulp wood) Industry (saw logs) Hoting Umeå Forest district Wood supply unit Control of Plant
Slide 91: Forest seasonality
Forest seasonality Net sales (SEKm) EBITDA (SEKm) Harvesting of own forest (k m3sub) 1,691 1,659 1,629 1,629 1,627 1,609 1,592 1,561 926 1,500 1,474 1,451 1,365 747 753 63% 1,147 1,121 675 608 623 47% 917 515 45% 516 829 767 449 41% 34% 36% 39% 454 36% 28% High level of harvesting from own forest in
Slide 92: Forest holdings in the Baltics
Forest holdings in the Baltics QSSCA
Slide 93: Strategic rationale – strengthen wood supply for future projects
Strategic rationale – strengthen wood supply for future projects 1 2 3 Strengthening of the High growth potential Repeat SCA’s successful integrated value chain • High growth – 3x northern Sweden Swedish forest development • Strengthen raw material supply and • Platform for further expansion • Track
Slide 94: Strengthen raw material supply and increasing self sufficiency
1 Strengthen raw material supply and increasing self sufficiency Wood sourcing 2019 Wood sourcing 2025 1 m m3sub 13 13 Potential investment projects will External suppliers 12 12 increase SCA wood demand External Sawmills Locally Sawmills 11 suppliers 11 purchased 10 10 9 9 Locally 8 purchased 8 7 P
Slide 95: The Baltics offer high forest growth potential
2 The Baltics offer high forest growth potential Price (EUR/ha forest land) Growth potential (m 3fo/ha/year) 12,000 12 ~2.5x 10,000 10 8,000 8 6,000 6 4,000 ~1.1x 4 2,000 2 0 0 Southern Mid Northern Baltic Southern Mid Northern Baltic Sweden Sweden Sweden states Sweden Sweden Sweden states Source: N
Slide 96: Opportunity to repeat SCA's successful development of the Swedish forests
3 Opportunity to repeat SCA’s successful development of the Swedish forests 1 Silviculture 2 Fertilization 3 Improved seedlings 4 Introduction of lodgepole pine 1. Average price Sweden, real price (2020 price level). Source Ludvig & Co. 96 Excludes forest holdings in the Baltics.
Slide 97: Long term goals in the Baltics
Long term goals in the Baltics Total area (k ha) Standing volume (m m3fo) ~100 ~12 Final fellings (m m3fo/year) Local purchases (m m3fo/year) ~0.5 0.5-1.0 97
Slide 98: SCA Logistics
SCA Logistics QSSCA
Slide 99: SCA Logistics
SCA Logistics Turnover Terminal volume RoRo vessels ~3.0 SEKbn 3,550 kt 3 st Share of SCA’s cost Sea freight volume Container vessels ~20% 2,800 kt 1 st Figures refer to 2021. 99
Slide 100: SCA Logistics network
SCA Logistics network RoRo, Container och Railroad Roll-On-Roll-Off Container Traffic Traffic Terminals MO Oxelösund Umeå TU Sundsvall Piteå Umeå WE Umeå Vasa Sundsvall TH Sundsvall Sundsvall FR Sundsvall Iggesund SA Oxelösund SU Kiel Skövde MO Helsing- borg TU Rotterdam Malmö Rotterdam WE Rotterdam
Slide 101: SCA ships
SCA ships 1 2 3 m/s SCA Obbola m/s SCA Östrand m/s SCA Ortviken • RoRo Cassette / Paper Carrier • RoRo Cassette / Paper Carrier • RoRo Cassette / Paper Carrier • Owner: SCA • Owner: SCA • Owner: SCA • Built: 1996 • Build: 1996 • Built: 1996 101
Slide 102: are subject to certain risks and uncertainties that could negatively affect our business. Please
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