SCA Year-end report 2006 Jan strm, CEO Lennart Persson, CFO 1 - - PowerPoint PPT Presentation

1

Jan Åström, CEO Lennart Persson, CFO

SCA Year-end report 2006

2

Highlights

Strong development FY06 vs. FY05

Good organic growth +5% Pre-tax profit up 18%(1) to SEK 6,833m Net earnings up 23%(1) to SEK 5,467m

Continued upward trend in Q4

Positive volume and price development Higher energy and raw material costs

1) Excluding items affecting comparability

3

Financial Summary

Q4 2006 Change FY 2006 Change Q4/Q3 (%) Y06/Y05(1) (%) Net sales, SEKm 25,650 +2% 101,439 +5% Earnings after financial items, SEKm 1,803 +3% 6,833 +18% Earnings per share, SEK 6:16

• 5%

23:25 +23% Dividend per share, SEK 12:00(2) +9% Split 3:1(2)

1) Excluding items affecting comparability 2) Board proposal

4 25,141 25,400 25,294 25,095 25,650

14.3% 13.9% 14.4% 14.7% 14.9%

5,000 10,000 15,000 20,000 25,000 30,000

Q4 2005 Q1 2006 Q2 2006 Q3 2006 Q4 2006

0% 2% 4% 6% 8% 10% 12% 14% 16%

Sales EBITDA margin

Group – Quarterly Development

SEKm EBITDA (%)

5

SCA Group Sales and EBIT

FY 2006 compared with FY 2005(1)

SEKm SEKm 96,385 101,439

• 212

+1,716 +994 +1,921 +635

90 000 95 000 100 000 105 000 Sales FY 2005 Personal Care Tissue Packaging Forest Products Other Sales FY 2006

7,293

• 87

+325 +297 +589 +88 8,505

5,000 6,000 7,000 8,000 9,000 EBIT FY 2005 Personal Care Tissue Packaging Forest Products Other EBIT FY 2006

Sales EBIT

1) Excluding items affecting comparability

• Volume: +4%
• Price: +2%
• Price/mix: +21%
• Volume: +15%
• Energy and raw

materials: -23%

6

SCA Group Sales and EBIT

Q4 2006 compared with Q3 2006

SEKm SEKm

25,650 25,095

• 27

+141 +157 +101 +183

23,000 24,000 25,000 26,000 Sales Q3 Personal Care Tissue Packaging Forest products Other Sales Q4

2,176

• 73

+45 +38 +85

• 10

2,261

1,600 1,800 2,000 2,200 EBIT Q3 Personal Care Tissue Packaging Forest products Other EBIT Q4

Sales EBIT

• Volume: +2%
• Price: +1%
• Currency: -1%
• Price/mix: +10%
• Volume: +9%
• Energy and raw

materials: -8%

• Depreciation: -4%

7

Cash-Flow Analysis

FY 2006 compared with FY 2005

Operating cash surplus SEK 14,123 (13,113) Operating cash flow SEK 6,304m (7,471)

Higher current capex Volume growth and higher prices resulted in higher working capital Increased cash outflow related to structural costs

Cash flow before dividend SEK 1,538m (1,768)

Lower strategic capex

Debt/equity ratio: 0.62 (0.70)

Lower net pension liabilities

8

5,136 5,348 5,249 5,246 5,429 17.7% 17.6% 17.9% 17.8% 19.1%

2,000 3,000 4,000 5,000 Q4 2005 Q1 2006 Q2 2006 Q3 2006 Q4 2006 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% Sales EBITDA margin

SEKm

Personal Care – Quarterly Development

Very strong volume development Maintained and increased market shares

EBITDA (%)

Q4/Q3 comments:

9

Incontinence care

Continued strong development within the institutional segment Strengthened positions of TENA in the retail segment Major product and service upgrades within Incontinence care for institutions in 2007

Baby diapers

Increased market shares for Libero Good growth in retailers’ brands segment

Feminine care

Strengthened market positions through SecureFit Strong development in Latin America

Personal Care

10

8,109 7,962 7,787 7,743 7,844 11.6% 12.2% 11.9% 10.7% 11.6%

3,000 5,000 7,000 9,000 Q4 2005 Q1 2006 Q2 2006 Q3 2006 Q4 2006 0% 2% 4% 6% 8% 10% 12% 14% Sales EBITDA margin

Tissue – Quarterly Development

SEKm

Improved prices and volumes in Europe Higher energy and raw material costs Seasonal weak volumes in North America

EBITDA (%)

Q4/Q3 comments:

11

Tissue

Consumer tissue

Further price increases under implementation Focus on strengthening brand positions Strengthening the value chain in Russia

AFH tissue

Stable volume and earnings development in Europe Good progress in re-branding all products towards the global Tork brand

12

8 272 8 389 8 231 8 288 8 445 10,2% 10,2% 10,8% 12,1% 11,9%

3 000 5 000 7 000 9 000 Q4 2005 Q1 2006 Q2 2006 Q3 2006 Q4 2006 0% 2% 4% 6% 8% 10% 12% Sales EBITDA margin

Packaging – Quarterly Development

SEKm

Average prices on corrugated +2% High costs in connection with maintenance stops

EBITDA (%)

Q4/Q3 comments:

13

Packaging

Packaging solutions Europe

Realized price increases from year-end 2005 to year-end 2006: ~8%(1) Carry over of latest price increase to Q1 Good sales development for total packaging solutions

Containerboard

Continued tight market situation Potential for further price increases

North America

Divested in Q1 2007 in line with strategy to focus on Europe and Asia

1) Measured from year-end 2005

14

4,071 4,378 4,454 4,339 4,480 22.4% 21.0% 21.8% 21.0% 22.5%

1,000 2,000 3,000 4,000 5,000 Q4 2005 Q1 2006 Q2 2006 Q3 2006 Q4 2006 0% 5% 10% 15% 20% Sales EBITDA margin

Forest Products – Quarterly Development

High mill efficiency Strong volumes and increased prices within solid-wood products Lower energy costs

SEKm EBITDA (%)

Q4/Q3 comments:

15

Forest Products

Publication papers

Good cost control Price increases for newsprint in 2007 Competitive European market for SC and LWC paper

Pulp, timber and solid-wood products

Very tight market for solid-wood products Successful start-up of new recovery boiler in Östrand pulp mill Higher prices on wood

16

Outlook

Continued good price development in Packaging Continued high raw material costs in Tissue but gradually higher prices in European consumer tissue Stable markets for personal care products Competitive markets for magazine papers Higher raw material costs

17

Summary 2006

Improved main markets Continued focus on value added products Strong growth for the SCA group, + 5% Great progress in efficiency enhancement program + 18% in pre-tax profit

18