Svenska Cellulosa AB SCA Class A · OMXSTO:SCA_A
Svenska Cellulosa AB SCA Class A — SCA — FY2003 Earnings Presentation
35 slides from Svenska Cellulosa AB SCA Class A's earnings presentation, 2004
Slide 1: SCA Year-end Report
SCA Year-end Report 1 January–31 December 2003 1
Slide 2: SCA in Brief
SCA in Brief 1 January–31 December 2003 03:41 03:3 03:2 03:12 03123 02124 Earnings per share, SEK 6.07 4.88 4.87 6.02 21.84 24.54 Cash flow from current operations per share, SEK 11.27 10.70 5.56 7.45 34.98 37.12 Net sales, SEK M 21,153 21,064 21,231 21,890 85,338 88,046 Earnings after financial ite
Slide 3: SCA in Brief: 2003 compared with 2002
SCA in Brief 2003 compared with 2002 Earnings per share amounted to SEK 21.84 (24.54). Excluding items affecting comparability, earnings per share amounted to SEK 20.31 (24.16) Net sales totaled SEK 85,338 M (88,046), a decline of 3%. Adjusted for currency and price effects net sales increased b
Slide 4: SCA in Brief: Compared with third quarter of 2003
SCA in Brief Compared with third quarter of 2003 Earnings per share during the fourth quarter totaled SEK 6.07 (4.88). Excluding items affecting comparability, earnings per share amounted to SEK 5.22 Operating profit excluding items affecting comparability unchanged. Operating profit increased f
Slide 5: SCA in Brief: Dividend
SCA in Brief Dividend Board proposes dividend of SEK 10:50 per share, an increase of 9%. Average dividend growth during the last five years, amounts to 11% annually 5
Slide 6: Operating Profit - Business Areas
Operating Profit - Business Areas 1 January–31 December SEK M 20031 20022 Change % Hygiene Products 4,820 5,487 -12% Packaging 2,482 3,065 -19% Forest Products 1,559 1,986 -22% Other operations3 26 -300 Operating profit before goodwill amortization 8,887 10,238 -13% Goodwill amortization -1,130 -1,1
Slide 7: Cash Flow Analysis
Cash Flow Analysis 1 (2) 1 January–31 December SEK M 2003 2002 Change % Operating cash surplus 13,508 15,245 -11 Changes in working capital 737 903 Current capital expenditures, net -3,902 -3,523 Other operating cash flow changes -241 -204 Operating cash flow 10,102 12,421 -19 Financial items -790 -
Slide 8: Cash Flow Analysis
Cash Flow Analysis 1 January-31 December 2 (2) SEK M 2003 2002 Cash flow from current operations 8,134 8,620 Company acquisitions -4,808 -6,483 Strategic capital expenditures -2,949 -2,823 Strategic structural expenditures -437 -574 Divestments 961 405 Cash flow before dividend 901 -855 Debt equity
Slide 9: Group - Development
Group - Development Quarterly data SEK M 17.7% 17.1% 17.5% 17.3% 17.4% 30 000 17.0% 18% 16.0% 16.3% EBITDA Target 16% 17% 14% 20 000 12% 10% Sales 8% 21 015 22 355 22 247 22 429 21 890 21 231 21 064 21 153 EBITDA 10 000 6% margin 4% 2% 0 0% 02:1 02:2 02:3 02:4 03:1 03:2 03:3 03:4 ROCE 13% 13% 13% 13
Slide 10: Earnings per Share Development
Earnings per Share Development Quarterly data SEK/share 8 6.27 6.33 5.89 6.05 6.02 6.07 6 4.87 4.88 5.22 4 2 0 02:1 02:2 02:3 02:4 03:1 03:2 03:3 03:4 EPS excl. non-recurring items Non-recurring items 10
Slide 11: Hygiene Products
Hygiene Products Compared with year-end 2002 Net sales amounted to SEK 42,981 M (45,197), down 5% Operating profit amounted to SEK 4,820 M (5,487), a decline of 12% Currency effects –5% Lower prices Consumer tissue operating profit down 16% Lower prices and volumes Lower raw material c
Slide 12: Hygiene Products
Hygiene Products Compared with third quarter of 2003 Operating profit in the fourth quarter virtually unchanged Lower depreciation due to write-offs in third quarter and adjustments in acquisition balances Consumer tissue operating profit up 31% Higher volumes and a more favourable product m
Slide 13: Hygiene Products - Development
Hygiene Products - Development Quarterly data SEK M 17.4% 17.4% 17.9% 17.8% 17.4% 15 000 16.8% 17.0% 16.6% 18% EBITDA 16% target 17% 14% 10 000 12% 10% 8% 11 790 11 481 11 240 10 686 10 906 10 791 10 753 10 531 5 000 6% 4% 2% 0 0% 02:1 02:2 02:3 02:4 03:1 03:2 03:3 03:4 Sales EBITDA margin 13
Slide 14: Tissue – Europe
Tissue – Europe Market Consumer Tissue Continued competitive pressure Stable prices Good volume development AFH Stable demand Some price pressure 14
Slide 15: AFH Tissue - North America
AFH Tissue - North America Market Weak markets US demand down 1% through November Seasonally weak shipments in Q4 Prices stabilized 15
Slide 16: Personal Care
Personal Care Market Incontinence products Stable demand, globally Strong growth in retail Baby diapers Pant diapers growing fast Competitive pressure in Southern Europe Feminine hygiene products Strong growth within retailers’ brands 16
Slide 17: Packaging
Packaging Compared with year-end 2002 Net sales down 2% - SEK 30,029 M (30,549) Acquisitions in Europe and North America 5% Currency effects –4% Lower volumes and prices Operating profit down 19% - SEK 2,482 M (3,065) Positive effects of acquisitions and lower raw material costs offset b
Slide 18: Packaging
Packaging Compared with third quarter of 2003 Operating profit declined 15% Somewhat lower prices for corrugated board and kraftliner Higher costs for recycled fiber Increased costs incurred in conjunction with planned production stoppages Higher raw material costs for the North American p
Slide 19: Packaging - Development
Packaging - Development Quarterly data SEK M 12 000 18% 15.9% EBITDA Target 15.4% 15.1% 16% 14.4% 14.3% 16% 13.8% 13.9% 12.9% 14% 8 000 12% 10% 8% 4 000 7 489 7 780 7 940 7 715 7 459 6% 7 340 7 421 7 434 4% 2% 0 0% 02:1 02:2 02:3 02:4 03:1 03:2 03:3 03:4 Sales EBITDA margin 19
Slide 20: Packaging - Deliveries
Packaging - Deliveries Quarterly data Mm2 k tonnes 2 000 800 660 628 639 635 610 605 610 621 1 500 600 1 007 1 012 1 022 1 041 1 029 1 027 1 041 988 1 000 400 500 200 0 0 02:1 02:2 02:3 02:4 03:1 03:2 03:3 03:4 Liner Corrugated 20
Slide 21: Corrugated Board – Europe
Corrugated Board – Europe Market Weak markets Flat demand through November 2003 Weak development in Benelux, Nordic, Italy and UK Growth in France, Spain and Germany Price pressure 21
Slide 22: Containerboard
Containerboard Market Testliner Fair demand in Q4 Balanced inventories Prices marginally up in Q4 Further price increases announced, effective February 2004 Kraftliner High inventories Imports from USA still on a low level 22
Slide 23: Recovered Paper
Recovered Paper Market Europe Prices stabilized in Q4 Export demand from Asia up, despite weak USD USA Tight markets for high grade de-inking – higher prices 23
Slide 24: Forest Products
Forest Products Compared with year-end 2002 Net sales up 4% - SEK 14,081 M (13,551) Higher volumes from new SC machine and acquisition of sawmills (Scaninge) Partly offset by lower paper prices Currency movements -3% Operating profit down 22% - SEK 1,559 M (1,986) Higher volumes but lowe
Slide 25: Forest Products
Forest Products Compared with third quarter of 2003 Operating profit up 33% Publication papers operating profit up 49% Higher volumes Negative currency movements Pulp, timber and solid wood products operating profit up 23% Higher volumes from SCA’s own forestlands Higher capacity utili
Slide 26: Forest Products - Development
Forest Products - Development Quarterly data SEK M 23.7% EBITDA 5 000 25% target 25% 21.8% 22.1% 21.1% 20.4% 19.7% 19.1% 4 000 18.6% 20% 3 000 15% 2 000 10% 3 603 3 561 3 736 3 317 3 430 3 201 3 406 3 378 1 000 5% 0 0% 02:1 02:2 02:3 02:4 03:1 03:2 03:3 03:4 Sales EBITDA margin 26
Slide 27: Forest Products - Deliveries
Forest Products - Deliveries Quarterly data km3 k tonnes 400 383 400 354 345 346 330 380 305 299 284 332 336 300 300 238 190 192 200 165 173 200 100 100 0 0 02:1 02:2 02:3 02:4 03:1 03:2 03:3 03:4 Publication papers Solid wood products 27
Slide 28: Publication Papers
Publication Papers Market Slow recovery in advertising spending Strong, export driven demand through 2003 Total shipments up 5% for newsprint; 4% for SC and 8% for LWC European demand improving in Q4 Very strong shipments in December Full-year shipments up 1% for newsprint; 2% for SC and
Slide 29: Market Pulp
Market Pulp Market Good demand in Q4 Increasing European consumption, but also stock building Strong shipments to Asia High pulp production Fair balance in softwood, over-supply in hardwood Increasing total inventories in December Mixed price signals – wider gap between SW and HW Sof
Slide 30: Solid Wood Products
Solid Wood Products Market Competitive pine markets Spruce markets stabilizing 30
Slide 31: Market Outlook 2003
Market Outlook 2003 Europe Demand for SCA’s consumer products remained stable during the fourth quarter Within consumer tissue, competition remains strong, although the underlying volume growth is good Demand for corrugated packaging did not show any growth during 2003. The weak demand and pre
Slide 32: Summary 2003
Summary 2003 Growth 4% 2003, (15% 2002 and 2003) Hygiene Products • Pisa: Tissue and diapers company in Chile • Increased capacity for incontinence products in Europe Packaging • Acquisition of three protective packaging companies in the US • Increased ownership in Central Package Group Fore
Slide 33: Summary 2003
Summary 2003 Profitability Cash-flow from current operations in line with target Group EBITDA 17%, in line with target Stable development of Hygiene Products, especially within personal care Packaging affected by weak business environment and higher pension costs Forest Products affected
Slide 34: Agenda 2004
Agenda 2004 Hygiene Products Conclude rationalization program Improve efficiency within consumer tissue Startup of tissue machine in Alabama Packaging Improve efficiency Develop Asian packaging operations Ensure profitable growth Acquisition and organic 34
Slide 35: essentials for everyday life
essentials for everyday life™