Presentation SCA interim report Q2 2015
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- SCA reported good organic growth in sales and operating profit in Q2 2015, with strong growth in emerging markets. Cash flow was also strong. - Personal care sales grew 12% with 6% organic growth, driven by price increases, higher volumes, and cost savings. Tissue sales grew 15% with 4% organic growth. - Operating profit increased for both personal care and tissue, despite higher raw material costs. Forest products profit grew 39% on higher prices and volumes. - The report highlighted continued strategic priorities of efficiency, innovation, and profitable growth, with several new product launches and investments.
Presentation SCA interim report Q2 2015
- 2. Magnus Groth President and CEO July 16, 2015 Interim Report Q2 2015 2
- 3. July 16, 2015 Interim Report Q2 2015 3 Summary Q2 2015 Good organic growth in sales and operating profit Strong growth in emerging markets Strong cash flow Continued strong contribution from efficiency gains Ten innovations and product launches - Edet, Okay, Plenty, TENA, Tork and Zewa Price increases achieved for consumer tissue in Europe with gradual impact during H2 2015 Investment in new production facility in Brazil Inclusion in the sustainability index FTSE4Good reconfirmed
- 4. Group Q2 2015 vs. Q2 2014 July 16, 2015 Interim Report Q2 2015 4 Organic Sales Growth Operating Profit* Operating Margin* Operating Cash FlowEPS Sales SEK 29,219m +13% * Excluding items affecting comparability ** Excluding items affecting comparability, gains on forest swaps of SEK 0m (175) before tax and currency translation effects *** Excluding items affecting comparability and gains on forest swaps of SEK 0m (175) before tax SEK 3,217m +9%** 11.0% +30 bp*** SEK 2.80 +10% SEK 2,925m +42% +5%
- 5. Strategic Priorities July 16, 2015 Interim Report Q2 2015 5 EFFICIENCYINNOVATIONPROFITABLE GROWTH INCREASING EFFICIENCY IN THE ENTIRE VALUE CHAIN
- 6. July 16, 2015 Interim Report Q2 2015 6 Investment of approx. SEK 650m in a new production facility for incontinence products Production start 2016 SCA is the second largest company in incontinence products Global leading brand TENA and local brand Biofral Brazil is the world’s third largest retail market for incontinence products Investment in Brazil 0% 5% 10% 15% 20% 25% 2011 2012 2013 2014 YTD May 2015 SCA Retail Market Share for Incontinence Products in Brazil
- 7. July 16, 2015 Interim Report Q2 2015 7 Addressing low performing markets Brazil Exit baby diapers Thailand Changed business model to export business
- 8. July 16, 2015 Interim Report Q2 2015 8 Fredrik Rystedt CFO
- 9. Net sales Q2 2014 Price/Mix Volume Currency Net sales Q2 2015 Organic sales growth 5% Price/Mix +2% Volume +3% July 16, 2015 Interim Report Q2 2015 9 +2% +3% SEK 25,829m +8% SEK 29,219m Net Sales Q2 2015 vs. Q2 2014 +13%
- 10. Organic Sales Growth July 16, 2015 Interim Report Q2 2015 10 0% 2% 4% 6% 8% 2012 2013 2014 H1 2015 Group Tissue 0% 2% 4% 6% 8% 2012 2013 2014 H1 2015 0% 2% 4% 6% 8% 2012 2013 2014 H1 2015 Personal Care
- 11. Operating Profit Q2 2014 Price/Mix Volume Raw Material Energy Currency Other** Operating Profit Q2 2015 July 16, 2015 Interim Report Q2 2015 11 SEK +497m SEK 2,934m SEK 3,217m Operating Profit* – Group Q2 2015 vs. Q2 2014 +10% SEK +212m SEK -435m SEK +36m SEK +213m SEK -240m * Excluding items affecting comparability and including gains on forest swaps of SEK 0m (175) before tax ** Other includes gains on forest swaps of SEK -175m
- 12. Cash Flow Q2 2015 vs. Q2 2014 Operating cash surplus Change in working capital Restructuring costs, etc Capital expenditures (including strategic) Operating cash flow including strategic capital expenditures Q2 2015 SEKm Q2 2014 SEKm 4,626 -550 -233 -1,259 2,584 3,967 -828 -238 -1,232 1,669 Interim Report Q2 2015July 16, 2015 12
- 13. July 16, 2015 Interim Report Q2 2015 13 Magnus Groth President and CEO
- 14. Personal Care Q2 2015 vs Q2 2014 July 16, 2015 Interim Report Q2 2015 14 * Excluding items affecting comparability ** Return on capital employed excluding items affecting comparability Sales growth 12% Organic sales growth 6% Operating profit increased 11%* Better price/mix Higher volumes Cost savings Higher raw material costs due to a stronger USD and higher pulp prices Increased marketing activities for incontinence products and in India Operating margin 11.3%* ROCE** 28.6% Net Sales Operating Profit* Q2 2015Q2 2014 Q2 2015Q2 2014 Q2 2015Q2 2014 Operating Margin* SEK 8,676m SEK 7,750m SEK 977m SEK 877m 11.3% 11.3%+12% +11% 0 bp
- 15. Personal Care Q2 2015 vs Q2 2014 July 16, 2015 Interim Report Q2 2015 15 Organic Sales Growth by Region Organic Sales Growth by Product Segment Incontinence Products Baby Diapers Feminine Care TotalMature Markets Emerging Markets Total +3% +6% +4% +18% +2% +11% +6% 51% 29% 20% % of Personal Care Sales: 56% 44% Organic sales growth 6% Price/mix +4% Volume +2% Strong growth in emerging markets Strong growth for feminine care Mature markets Western Europe - Strong growth for baby diapers and feminine care - Higher sales for incontinence products North America - Lower sales for incontinence products Emerging markets Latin America +15% - Strong growth for feminine care and incontinence products - Higher sales for baby diapers Russia +46 % - Strong growth for all product segments
- 16. Personal Care Innovations and Product Launches Q2 2015 TENA Lady Range New feminine design on the release paper on the back of the product, introducing assortment colors New individual wraps – soft and less noisy material with a new, more feminine design New top sheet and embossing design for easy finding of the DRYZone Providing the same superior protection you know from TENA Lady 16 TENA Lady Mini, Mini Wings, Mini Plus, Mini Plus Wings with DRYZone 16July 16, 2015 TENA Flex Normal Extending the TENA Flex range by adding a product with a lower absorption level Interim Report Q2 2015 Specially designed for unexpected little leaks FeelFresh Technology™ locks in moisture and controls odor lights by TENA Ultra Towels Normal & Ultra Towels Normal with Wings Fully breathable stretch sides: promoting skin health and wearer comfort Multifunctional design: for easy toileting and promotion of restorative care Printed backsheet: for easier selection of the correct product, while the scannable barcode supports consumption tracking and inventory management TENA Stretch Super and Ultra Briefs, TENA Stretch Plus Brief
- 17. Tissue Q2 2015 vs Q2 2014 July 16, 2015 Interim Report Q2 2015 17 * Excluding items affecting comparability ** Return on capital employed excluding items affecting comparability Sales growth 15% Organic sales growth 4% Operating profit increased 11%* Better price/mix Higher volumes Cost savings Higher raw material costs mainly due to a stronger USD Operating margin 11.3%* ROCE** 13.2% Net Sales Operating Profit* Q2 2015Q2 2014 Q2 2015Q2 2014 Q2 2015Q2 2014 Operating Margin* SEK 16,091m SEK 14,039m SEK 1,826m SEK 1,652m 11.8% 11.3% +15% +11% -50 bp
- 18. Tissue Q2 2015 vs Q2 2014 July 16, 2015 Interim Report Q2 2015 18 Organic sales growth 4% Price/mix +1% Volume +3% Strong growth in emerging markets Mature markets Western Europe - Flat sales for consumer tissue - Lower sales for AfH tissue North America - Higher sales for AfH tissue Emerging markets Asia +16% Latin America +8% Russia +20% Organic Sales Growth by Region Organic Sales Growth by Product Segment Consumer Tissue AfH Tissue TotalMature Markets Emerging Markets Total +4% 0% +13% +4% 64%% of Tissue Sales: 36%67% 33% +5% +1%
- 19. 1919July 16, 2015 SCA Household Towel Brands: Zewa, Plenty, Okay & Edet Relaunch with a new on-pack power claim “Stays strong when wet” Helps customers improve efficiency and performance when completing wiping and cleaning tasks versus rags and rental cloths: Uses 32% less time* Uses 40% less solvent* Uses 20% less effort * *) Swerea research institute, Sweden, 2014 Tork Cleaning Cloths with ExelClean™ High capacity, 2 coreless tissue rolls = 5 conventional tissue rolls. Refill less often. Coreless rolls – minimizes waste and saves cleaning time More compact – less storage space needed Available in black and white Tork® Coreless High Capacity Bath Tissue Dispenser and Coreless High Capacity Bath Tissue Rolls Interim Report Q2 2015 New Plenty Easy Clean Wipes A unique refillable dispenser that helps you to clean effectively while keeping your wipes moist for longer Available in three different variants: Multi-purpose, Bathroom, Anti-bacterial Tissue Innovations and Product Launches Q2 2015
- 20. Forest Products Q2 2015 vs Q2 2014 July 16, 2015 Interim Report Q2 2015 20 * Excluding items affecting comparability and gains on forest swaps of SEK 0m (175) before tax ** Return on capital employed excluding items affecting comparability Q2 2015 Sales growth 9% Price/mix +1% Volume +6% Currency +2% Strong growth for kraftliner and pulp Operating profit increased 39%* Higher prices (including exchange rate effects) Higher volumes Cost savings Lower energy costs Operating margin 13.5%* ROCE** 6.5% Net Sales Operating Profit* Q2 2015Q2 2014 Q2 2015Q2 2014 Q2 2014 Operating Margin* SEK 4,217m SEK 4,598m SEK 448m 10.6% 13.5% SEK 622m +9% +39% +290 bp
- 21. Innovative Marketing Platform SCA with female Team SCA in the Volvo Ocean Race 2014-2015 Global marketing platform with focus on women Strong sustainability and CSR focus Reaching all target audiences including customers and consumers, employees, the media and other external parties 2,400,000 visitors in the race villages 370,000 visitors to the SCA pavilion Project targets exceeded July 16, 2015 Interim Report Q2 2015 21
- 22. July 16, 2015 Interim Report Q2 2015 22 Q2 2015 Summary Good organic growth in sales and operating profit Strong growth in emerging markets Strong cash flow Global Environment Low growth in mature markets and good growth in emerging markets for hygiene products FX headwinds due to stronger USD Competitive market environment
- 23. July 16, 2015 Interim Report Q2 2015 23 Q&A