http://www.sca.com/ir Mats Berencreutz, Executive Vice President at SCA, hold a presentation at the Handelsbanken consumer seminar in Stockholm, December 2, 2011. The presentation focused on increased sales of hygiene products, strategic focus areas, sustainability, innovation, growth potential for hygiene products and the binding offer for Georgia Pacific’s European tissue operations.
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2. SCA Group
A global hygiene products and paper company
Net sales SEK 107bn
45,000 employees and sales in more than 100 countries
World’s third largest hygiene products company
TEN and Tork leading global brands for incontinence care and
Away-From-Home tissue
Europe’s largest private forest owner
Europe’s second largest packaging company
2 2 December 2011
3. SCA Group
Sales split 2010
Forest Products Sales split Personal Care
16% 24%
24%
36%
Packaging Tissue
3 2 December 2011
4. Increasing hygiene sales
% of net sales
100%
80% 54% 40%
60%
40%
60%
20% 46%
0%
2000
2000 2010
2010
Packaging and Hygiene products
Forest Products (Personal Care and Tissue)
4 2 December 2011
5. Leading market positions
Global and regional
North America
AFH tissue: 3 Europe
Incontinence care: 3 Tissue: 1
Baby diapers: 2
Incontinence care: 1
Mexico
Incontinence care: 1
Tissue: 2
Feminine care: 1
Baby diapers: 3 Global
Incontinence care: 1
Colombia
AFH tissue: 2 Australia
Incontinence care: 1
Feminine care: 1 Feminine care: 1
Tissue: 1 Incontinence care: 1
Tissue: 2
5 2 December 2011
6. Strong global and regional brands
Two global billion EUR brands
Eastern Europe
Europe
North America
Asia Pacific
Latin America
Sales of SEK 65bn, with sales in more than 100 countries
6 2 December 2011
8. Sustainability as a business driver
Reduced cost
ESAVE = SEK 600m in annual cost savings
Improved competitive edge
Sustainability credentials generate good business
Great growth potential through customized offerings in D&E markets
Renewable energy, wind power, biofuels
World’s largest producer of FSC-certified products
Attract investors
23% of investors in SCA shares make sustainability screening
Reduced risk level
Attract top talents
Strengthen the brand
8 2 December 2011
10. Hygiene business
Strategic focus
Strengthen positions and increase growth in
main markets and emerging markets
Increase the number of global brands
Increase the pace of innovations
Efficiency improvements
10 2 December 2011
11. Growth potential for hygiene products
Global population growth
An aging population
Increased market penetration
Higher disposable income
Customers and consumers demand
more comfort and sustainability
11 2 December 2011
12. Growth
High potential in markets with low penetration
Usage of hygiene products
Units/capita/year Units/child/year Units/woman/year Kg/capita/year
Penetration
in mature
markets
around 35%
North America Western Europe Eastern Europe Latin America Asia
12 2 December 2011
13. Population growth 2010-2020
Demographics
People, millions
8 000
+12% 2010 2020
7 000
6 000
5 000
+11%
4 000
,
3 000
2 000 +7%
1 000 +2% +33%
0
World Children 0-4 Women 15-49 >65 yrs Other
yrs yrs
13 2 December 2011
14. Growth
SCA’s growth markets
Latin America
Strong SCA positions
South East Asia Good market growth
Favourable socio-demographics
Eastern Europe
/Russia
Good market growth
Middle East
Favourable socio-demographics
China Incontinence care products
14 2 December 2011
15. Growth
High growth in Emerging markets
9M 2011
Emerging markets hygiene sales growth:
Personal Care: +12%*
Tissue: +10%*
% of Hygiene sales in 2010
Emerging markets
21%
Mature markets
* Adjusted for exchange rate movements
15 2 December 2011
16. Growth
Acquisitions strengthen Emerging markets presence
Algodonera Copamex San Saglik, 95% Pro Descart
Aconcagua No. 3 in baby diapers No. 2 in incontinence No. 2 in incontinence
No. 3 in feminine care care products care products
Smaller positions in Smaller position in
baby diapers and baby diapers
incontinence care
products Komili, 50%
No. 4 position in baby
diapers and feminine
care
16 2 December 2011
17. Binding offer for Georgia-Pacific’s
European tissue operations
Offered price: EUR 1.32bn
Already in year one the transaction is estimated to
contribute to an increase of earnings per share and
cash flow
With fully realized synergies earnings per share are
expected to increase with approx. SEK 1.70
Georgia-Pacific´s acceptance of this offer is subject to
consultations with works councils where appropriate
The transaction will be subject to customary
consultation with employee representatives and will
also be subject to approval by relevant competition
authorities
17 2 December 2011
18. Binding offer for Georgia-Pacific’s
European tissue operations
Creates a leading European tissue company
Strengthens our product offering and
geographic reach in Europe
Enhances our presence in key markets
Good strategic fit in AFH tissue
Substantial synergies
Increased share of branded sales in
our consumer tissue portfolio
18 2 December 2011
19. Georgia-Pacific’s European tissue
operations
Sales: EUR 1.25bn*
Consumer tissue, approx. 60%
AFH tissue, approx. 30%
Personal care, approx. 5%
EBIT margins on similar level as SCA’s tissue business
Market positions
Consumer tissue, 11% market share
AFH tissue, 10% market share
Well-known Lotus brand for AFH tissue and
consumer tissue
Approx. 5,000 employees
15 manufacturing sites in 7 countries
670,000 tonnes annual tissue capacity
* Italy and Turkey are not included in the binding offer
19 2 December 2011
20. Substantial synergies
Increased supply chain efficiency
Optimization of logistics
More efficient sourcing
Improved SG&A and A&P efficiency
Annual synergies: EUR 125m
Improves Tissue EBIT margins by
2-2.5 percentage points
Full effect in 3 years after closing
Related costs: EUR 130m
20 2 December 2011
21. Enhances SCA’s presence
In both Consumer tissue and AFH tissue
European Consumer tissue market
25% SCA SCA and GP
35%
European AFH tissue market
SCA and GP
SCA
19% 30%
21 2 December 2011
22. Increased share of branded sales
In Consumer tissue
SCA’s Consumer tissue sales
SCA SCA and GP
Retailers’
Branded brands Branded
Retailers’ 40% 50%
brands
22 2 December 2011