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

SCA Year-end report 2006 Jan Åström, CEO Lennart Persson, CFO 1

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 2

Financial Summary Q4 2006 Change FY 2006 Change Y06/Y05 (1) (%) Q4/Q3 (%) Net sales, SEKm 25,650 101,439 +2% +5% Earnings after financial items, SEKm 1,803 +3% 6,833 +18% Earnings per share, SEK 6:16 23:25 -5% +23% Dividend per share, SEK 12:00 (2) +9% Split 3:1 (2) 1) Excluding items affecting comparability 2) Board proposal 3

Group – Quarterly Development EBITDA (%) SEKm 14.9% 30,000 16% 14.7% 14.3% 14.4% 13.9% 14% 25,000 12% 20,000 10% 15,000 8% 25,650 25,400 25,095 25,141 25,294 6% 10,000 4% 5,000 2% 0 0% Q4 2005 Q1 2006 Q2 2006 Q3 2006 Q4 2006 Sales EBITDA margin 4

SCA Group Sales and EBIT FY 2006 compared with FY 2005 (1) Sales SEKm 105 000 101,439 Volume: +4% � +1,716 -212 +994 Price: +2% � +635 100 000 +1,921 96,385 95 000 90 000 Sales FY Personal Tissue Packaging Forest Other Sales FY 2005 Care Products 2006 EBIT SEKm 8,505 9,000 +88 +589 +297 Price/mix: +21% � +325 8,000 -87 7,293 � Volume: +15% 7,000 � Energy and raw 6,000 materials: -23% 5,000 EBIT FY 2005 Personal Care Tissue Packaging Forest Other EBIT FY 2006 Products 1) Excluding items affecting comparability 5

SCA Group Sales and EBIT Q4 2006 compared with Q3 2006 Sales SEKm 26,000 -27 25,650 +141 +157 +101 +183 25,095 Volume: +2% � 25,000 Price: +1% � Currency: -1% � 24,000 23,000 Sales Q3 Personal Care Tissue Packaging Forest Other Sales Q4 products EBIT SEKm � Price/mix: +10% +85 -10 2,261 +45 -73 +38 2,176 � Volume: +9% 2,200 Energy and raw � 2,000 materials: -8% � Depreciation: -4% 1,800 1,600 EBIT Q3 Personal Care Tissue Packaging Forest Other EBIT Q4 products 6

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 7

Personal Care – Quarterly Development SEKm EBITDA (%) Q4/Q3 comments: 19.1% 17.9% 17.7% 17.8% 17.6% � Very strong volume 18% development 16% 5,000 � Maintained and 14% increased market 12% shares 4,000 10% 5,429 5,348 5,249 5,246 5,136 8% 6% 3,000 4% 2% 2,000 0% Q4 2005 Q1 2006 Q2 2006 Q3 2006 Q4 2006 Sales EBITDA margin 8

Personal Care � 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 9

Tissue – Quarterly Development SEKm Q4/Q3 comments: EBITDA (%) � Improved prices and 14% 9,000 volumes in Europe 11.6% 11.9% 12.2% 11.6% 10.7% 12% � Higher energy and raw material costs 10% 7,000 � Seasonal weak 8% volumes in North 6% America 8,109 7,962 7,844 7,787 7,743 5,000 4% 2% 3,000 0% Q4 2005 Q1 2006 Q2 2006 Q3 2006 Q4 2006 Sales EBITDA margin 10

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 11

Packaging – Quarterly Development SEKm EBITDA (%) Q4/Q3 comments: 12,1% 11,9% � Average prices on 12% 10,8% corrugated +2% 9 000 10,2% 10,2% 10% � High costs in connection with 8% maintenance stops 7 000 6% 8 272 8 389 8 445 8 288 8 231 4% 5 000 2% 3 000 0% Q4 2005 Q1 2006 Q2 2006 Q3 2006 Q4 2006 Sales EBITDA margin 12

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 13

Forest Products – Quarterly Development SEKm EBITDA (%) Q4/Q3 comments: 22.5% 22.4% 5,000 21.8% 21.0% 21.0% � High mill efficiency 20% � Strong volumes and 4,000 increased prices within solid-wood 15% products 3,000 � Lower energy costs 4,480 4,454 4,378 10% 4,339 4,071 2,000 5% 1,000 0% Q4 2005 Q1 2006 Q2 2006 Q3 2006 Q4 2006 Sales EBITDA margin 14

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 15

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 16

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 17

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