http://www.sca.com/ir September 19, 2011 SCA hosted the Capital Markets Day in Stockholm. The strategy of recent years of focusing on costs, cash flow, capital efficiency and innovation remains firmly in place. Increased growth was added to the Group’s strategic agenda in 2010.
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WheelTug PLC Pitch Deck | Investor Insights | April 2024
SCA Capital Market Day 2011
1. SCA
Capital Market Day 2011
Jan Johansson, President and CEO
1 CMD 2011
2. Macro and economic outlook
Uncertainty rules
Standard & Poor’s decision to downgrades
US’s credit rating to AA+
Market’s fear over the Euro Inflation in China was
Measures to stabilize debt markets in the reported at 6.4 percent
Eurozone in June of 2011
2 CMD 2011
3. SCA Group
Sales split 2010
Forest Products Sales split Personal Care
16% 24%
24%
36%
Packaging Tissue
3 CMD 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 CMD 2011
5. Leading market positions
Global and regional
North America
Europe
AFH tissue: 3
Tissue: 1
Incontinence care: 3
Corrugated board: 2
Baby diapers: 2
Incontinence care: 1
Mexico Privately owned forests: 1
Incontinence care: 1 Solid-wood products: 2
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 CMD 2011
6. Packaging and Publication papers
European market
Corrugated board Publication papers
SCA SCA
10%
6%
Other Smurfit Kappa Other UPM (incl. Myllykoski)
29%
56% 20%
32%
5% 6%
5% DS Smith Holmen
4% 10%
Saica 17%
Norske Skog
Mondi Stora Enso
6 CMD 2011
7. Incontinence care
Market shares
North America Europe
Other
Med 6% SCA Other SCA
10% 20%
29%
Covedien 11% 41%
26% 27% 4%
Artzana
KC 5%
TZMO 8%
FQP 13%
Ontex
Hartmann
Latin America Global
Other SCA
19% Other SCA
25%
32% 46%
20% Hypermarcas 9% KC
5%
Panalex 7%
6%
18% 6% 7% FQP
Biopapel
KC Hartmann Unicharm CMD 2011
7 CMD 2011
8. Baby diapers and Feminine care
Market shares
Europe
Baby diapers Feminine care
Other SCA Other SCA
Hyga
2%
9% 12% 15% 8%
Ontex TZMO
10% 4%
Ontex 6%
KC 12% 55% 50%
17%
P&G J&J P&G
Latin America*
Baby diapers* Feminine care*
Other SCA CMPC Other
P&G 12% 7% 2%3%
J&J
5% 12% SCA
TQ 6% 35%
Hypermarcas 8% 62% KC 20%
P&G
28%
KC
* Market share in SCAs markets
8 CMD 2011
9. Consumer tissue
Market shares
Europe
SCA
25%
Other 36%
12%
Sofidel
8% 8% 11%
Wepa
GP KC
Latin America* Global
Other SCA SCA
14% 8%
Manpa y Brika 18%
4% 17% KC
Kruger Other 54%
10%
42% KC 11%
CMPC 12% GP
8%
2%
P&G
Sofidel
* Market share in SCAs markets
9 CMD 2011
10. AFH tissue
Market shares
North America Europe
Other SCA Other 19% SCA
18% 20%
44%
Cascades 4%
7% 15% KC
Bay West
30%
21% GP 11%
KC 4% 7%
GP
Duni Metsä
Latin America* Global
Other SCA SCA
16%
17% 18%
Fapsa 4%
Kruger 5% 45%
Other 18% KC
CMPC 9% 47%
KC
16%
2% 3% GP
Metsä
* Market share in SCAs markets Bay West
10 CMD 2011
11. Strategic focus areas
Cost reductions in all Efficiency programs in Personal Care SCA Group 5%*
business areas of close Packaging and Forest Thin baby diaper Personal Care 2%**
to SEK 1bn*** Products Tena Ultra thins Emerging Markets 10%**
Cash flow from current Supply Chain Strong Tena value
Tissue 2%**
excellence and asset assortment
operations SEK 7.4bn*** Emerging Markets 6%**
utilization programs in Tissue
Tissue Europe Packaging 20%*
Tork Xpressnap Café,
Restructuring program Tork Performance Forest Products 3%**
in baby diapers in Tempo ice, Zoo
Boxes
Europe Acquisitions:
Packaging
New tissue plant in Mexico- Copamex
Mexico Trueflo
ZeoCool Turkey- 95% San Saglik
New personal care
Forest Products Turkey- 50% Komili
plant in Russia
Increased value Brazil – Pro Descart
Further tissue added
investments in
Kostheim and Sovetsk SCA and Fred.Olsen
Investment in Bollsta Renewables to construct
wind farms
sawmill
* 2010 adjusted for exchange rate movements and divestments
** 2010 adjusted for exchange rate movements
*** 2010
11 CMD 2011
15. 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
15 CMD 2011
16. Growth
High growth in Emerging markets
H1 2011
Emerging markets hygiene sales growth:
Personal Care: +9%*
Tissue: +9%*
% of Hygiene sales in 2010
Emerging markets
21%
Mature markets
* Adjusted for exchange rate movements
16 CMD 2011
17. 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
17 CMD 2011
18. Financial targets
Remain unchanged
ROCE* Sales growth**
Personal Care 30% 5-7%
Tissue 13% 3-4%
Packaging 10%
Forest Products 11%
Group 13%
* Return on capital employed, over a business cycle
** Annual organic sales growth
18 CMD 2011
21. SCA Packaging
Net sales of SEK 26.2bn
Protective packaging 3%
170 production facilities, including 6 Industrial packaging 4%
containerboard mills Service 4%
Europe’s second largest corrugated packaging
company with 10% market share Consumer
packaging
13,750 employees 20%
Full-service supplier of packaging solutions
Main customers are the FMCG & manufacturing
Conventional
industries corrugated board
69%
21 CMD 2011
22. Integrated packaging company
SCA Forest & Timber
SCA Containerboard
SCA Recycling
A complete ‘cradle to cradle’
loop, from forest to package
and recycle to fibre again
SCA Packaging
Retailers
Our Customers
We lifecycle!
22 CMD 2011
23. Strategic priorities
Ongoing priorities
Focus capital on profitable segments
Increase value content
Managing the Cycle
& Lowering cost base - Price management
- Eliminate problem businesses
- LEAN project
Integrate the business - One Company
- Paper Supply Platform
Customer focus - Quality and Service
- Innovation
People - Management of change
- Leadership
23 CMD 2011
24. Managing the cycle
Corrugated Box Price Recovery
1.25
Achieved price increases of 21% since Q4 2009
1.20
1.20
1.17
1.15
Base Index used Q4 2009
1.14
1.10 1.11
1.05
1.06
1.02 1.02
1.00 1.02
1.00
0.95
2009-Q2 2009-Q3 2009-Q4 2010-Q1 2010-Q2 2010-Q3 2010-Q4 2011-Q1 2011-Q2
Price Corrugated Conventional
24 CMD 2011
29. SCA Forest Products
Forest Publication papers
Europe’s largest private forest owner No. 5 in Europe
2.6 million hectares
Solid-wood products Distribution and logistics
No. 2 in Europe
R&D
Sales: SEK 17.1bn
Pulp Employees: 4,200 Energy
29 CMD 2011
30. Publication papers
Strategic focus
Strong Higher Strengthened Innovation
mill concept product value market position products/
Deliveries processes
Maintenance Strategy defined Full capacity New R&D agenda
organization utilization
Productivity and
cost efficiency
Priorities
Upstream Less exposure to Environmental Long term product
integration standard news positioning development per
Local presence and mill
Productivity and
cost efficiency good service Supplementary
Further strengthen products
core European
customer base
30 CMD 2011
36. Forest
A valuable asset
Europe’s largest private forest owner – FSC certified
Annual net growth of 1%
Raw material integration and potential for electricity generation
Our forests absorb as much carbon dioxide as is discharged from SCA’s
entire production
If the worlds forests were managed the same way as SCA’s that would
solve a big part of the climate change problem
36 CMD 2011
37. Energy
Strategic focus
Wind power Biofuel New energy
products and
Deliveries processes
Statkraft investments, 2.6 TWh Ongoing business Organization
Fred. Olsen Renewables, 2 TWh
Organization
Strategy
Priorities
SCA projects >4 TWh biofuel, Strategy
potential 12-15 TWh
Land lease Pre-study torrefaction
Peat, prestudy
Further investments
Statkraft joint venture Strategic partners
37 CMD 2011
38. R&D and Innovations
Strategic focus
R&D
Deliveries
R&D Transformation program
- Reduce TMP energy consumption
- Next generation publication papers
- Bio-refinery mechanical pulp
- Composites
- Future packaging products
- Micro fiber cellulose
Innovation/business development
- Process started for higher ambition level
Priorities
Innovation culture
- 72 hour race to innovation
Production system for innovation/
business development
38 CMD 2011
39. SCA Hygiene business
Mats Berencreutz, COO Hygiene Operations
Christoph Michalski, President GHC
39 CMD 2011
40. 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
40 CMD 2011
41. 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
41 CMD 2011
42. 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
42 CMD 2011
43. 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
Global market size for hygiene products: SEK 675bn
43 CMD 2011
44. 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
44 CMD 2011
45. 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
45 CMD 2011
46. Sustainability as a business driver
Extensive customer and consumer
demand for sustainable solutions and
eco labelling
Growing sustainability interest in
emerging markets
Great growth potential with
customized offerings in D&E markets
Sustainability drives innovation
46 CMD 2011
47. Driving growth and efficiencies
Drive Growth Drive Efficiencies
Core Organization Extract cost to
capabilities effectiveness reinvest for
growth
Innovation Faster, simplified Leaner, more
Marketing and decision making agile organization
brand Clarified ways of Shift resources
management working where required to
Consumer and win
customer insight
47 CMD 2011
48. 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
48 CMD 2011
49. More Brand, Less Brands
Harmonized positions to leverage:
Concepts
Technology
Best practice
Huge opportunity to accelerate growth and further
strengthen efficiencies through improved speed and
scale
49 CMD 2011
54. Strategic focus
Continue to strengthen the Tork brand in AFH
tissue and increase growth
Strengthen consumer tissue brands through
continued implementation of the brand platform
Launches of innovative products based on
customer and consumer insight
Efficiency improvements
Sustainability as a business driver
Capture growth opportunities in Eastern Europe
54 CMD 2011
55. Consumer tissue
Finalized brand migration from P&G deal
Strengthened brand positions
Increasing share of branded business
Improved price management
Strong growth in Eastern Europe
55 CMD 2011
56. AFH tissue
Increasing market share, especially in HoReCa*
segment
Continued growth in highly profitable premium
segments
Focus on strategic growth regions has paid off
Improved price management
During 2011 market share has exceeded 20% (+1% compared to 2010)
* Hotels, Restaurants and Catering
56 CMD 2011
57. Consumer tissue brand migration
Stronger brands and more efficient A&P
Complicated, region specific, Focused, differentiated & consumer
inefficient brand portfolio relevant mega-brand portfolio
DACH East
Nordic NL
From … … To
57 CMD 2011
59. Sustainability as a business driver
Increased customer demand, both from consumer
and B2B
Increased demand for eco-labelling
90 Tork products received the EU
Eco-label
Several tenders secured thanks to green
credentials, i.e. Wembley stadium
59 CMD 2011
61. Personal Care Europe
Sales split
Net sales of SEK 16.9bn Feminine care
12%
5,300 employees
Baby diapers
28% Incontinence
care 60%
Incontinence care Baby diapers Feminine care
No. 1 No. 2 No. 3
41% market share 12% market share 8% market share
61 CMD 2011
62. Strategic priorities
Grow TENA to >50%
Grow Libero and Libresse strongholds
Build Retailer brand partnerships with
selected leading retailers
Establish new strongholds in nearby D/E
markets
Cost, quality and service leadership
62 CMD 2011
63. Grow TENA to >50%
Drive and shape markets by enhanced
innovation and speed-to-market
Strengthen TENA brand
Accelerate TENA premium growth
Growth momentum with TENA Pants
TENA Lady assortment
Modern Inco Care launch
Profitable growth in value segment
63 CMD 2011
64. Grow Libero and Libresse strongholds
Libero Nordic
Introduce and grow adjacent products
Successful Thin Open diaper launch
Profitable growth for Libero Russia
Focus on prioritized feminine care markets
Market share gains in Scandinavia and France
64 CMD 2011
65. Build Retailer brand partnerships
with selected leading retailers
Clear strategy
Partnerships with selective non-competing retailers
Fast-follower in Open diapers; Leader in Pants
Dedicated organization
Capability to follow the market leader quickly
Strong cost focus
Early successes
Supplier of the year award with Kruidvat
Exceptional growth with Mercadona
Won new retailer business and several
new Pant contracts
65 CMD 2011
66. Establish and grow new strongholds
in nearby growth markets
Capitalize on growth opportunities in Middle East
and North Africa
Expanded footprint in prioritized growth markets
Komili, Turkey
San Saglik, Turkey
66 CMD 2011
68. Sustainability as a business driver
Increased customer demand, both from consumer and B2B
Increased demand for eco-labelling
Community-related activities for improved brand awareness
68 CMD 2011
70. SCA Americas
Sales split
Net sales of SEK 16.1bn
Baby
7,900 employees Feminine
diapers 4%
care 10%
Incontinence
care 21%
Consumer
North America
Mexico and tissue 18%
Central America South America
AFH
tissue 47%
Incontinence care Incontinence care Incontinence care
AFH tissue Baby diapers Baby diapers
Feminine care Feminine care
Tissue Tissue
70 CMD 2011
71. North America
Strong SCA market positions
> World’s largest market for incontinence care products (USD 2.7bn)
and Away from Home tissue (USD 5bn)
> 90% B2B focus for SCA
> Strong market positions
71 CMD 2011
72. Latin America
Strong market growth
> Fast growing markets
> 90% B2C focus for SCA
> Strong brands
> Unique strength in growing Traditional Trade channel
72 CMD 2011
74. Strategic Focus
Leading innovations strengthen market positions and
profitability
Geographic and category expansion
Increased value added sales
Sustainability as a business driver
74 CMD 2011
76. Geographic & category expansion
Latin American acquisitions strengthens presence
Algodonera Aconcagua
No. 3 in feminine care
Smaller positions in baby diapers
and incontinence care products
Copamex
No. 3 in baby diapers
Pro Descart
No. 2 in incontinence care products
Smaller position in baby diapers
76 CMD 2011
77. Increased value added sales
Drives profitability for AFH tissue North America
100%
80%
60%
40% 29%
20% 9%
0%
2005 2010
77 CMD 2011
78. Sustainability as a business driver
Growth potential in Latin America in low income segments
Smaller packs, local distribution and economy products
Cooperation with Wal-Mart’s Bodega Aurrera stores in
Mexico
Customers view SCA’s strong sustainability position as a
competitive advantage
SCA offers Ecologo and Green Seal certified Tork
products made of 100% recycled fiber
Unique “Go Green” partnership with Philadelphia Eagles,
NFL’s greenest football team
78 CMD 2011
80. SCA Asia Pacific
Sales split
Net sales of SEK 6.9bn
Feminine Consumer
3,200 employees Care 10% tissue 36%
Incontinence
Care 15%
Baby
diapers 23%
Hygiene Central
Hygiene Australasia Hygiene North Asia & South Asia AFH tissue
16%
Incontinence care Incontinence care Incontinence care
Baby diapers Tissue Baby diapers
Feminine care Feminine care
Tissue
80 CMD 2011
81. Strategic focus
Geographic and category expansion
Capture growth opportunities in prioritized emerging markets
Innovation drives penetration, growth and profitability
Sustainability creates a competitive advantage
Capitalize on strong brand portfolio
81 CMD 2011
82. Asia Pacific
Intimate Health and Elderly Care
By 2030 60% of the
global population
above 65 will be in Asia Pacific
TENA – Undisputed global leader in Inco
Source: SMV, SCA, 2010
82 CMD 2011
84. Sustainability as a business driver
Growth potential in low income segments
Single packs, economy segment
TENA launch and incontinence care training
of 5,000 nurses in China
TENA launch in the economy segment in
Vietnam in 2011
Several tenders secured thanks to green
credentials, i.e. Starbucks in China and
Scott base in Antarctica
84 CMD 2011
85. SCA
Jan Johansson, President and CEO
85 CMD 2011
86. Summary
Short-term
No impact from debt crisis
Good demand in all Business areas
Raw material prices slightly down
Price increases
Long-term
Strengthen positions in main markets and increase growth in
emerging markets
Increased pace of innovations
Fewer local brands and increased number of global brands
Continued efficiency improvements
86 CMD 2011
Revitalized TENA Lady assortment: Successfully blocked P&G Envive launch; back to growth despite significant negative impact from reimbursement changes
99% with reduced inventory levels: 1/ Forecasting accuracy 2/Assortment discipline 3/Flexible and efficient Packaging lines
Dedicated org: Development org dedicated to RB in Olawa. Competitive product perfomance: Scores well in Consumer Panels and Lab-tests; Close to market leader; Ability to deliver regular updates
Active business partner: Priorities, targets, resources (HR), follow-up, etc