SCA: Interim Report Q2 2015

Regulatory News:

JANUARY 1 – JUNE 30, 2015 ( compared with same period a year ago)

• Net sales rose 14% (5% excluding exchange rate effects) to SEK 57,177m (50,063)
• Organic sales growth, which excludes exchange rate effects, acquisitions and divestments, was 5%
• Operating profit, excluding items affecting comparability, rose 9% to SEK 6,089m (5,564)
• The operating margin, excluding items affecting comparability, was 10.6% (11.1%)
• Profit before tax, excluding items affecting comparability, rose 11% to SEK 5,626m (5,081)
• Items affecting comparability totaled SEK -280m (-405)
• Earnings per share were SEK 5.23 (4.66)
• Return on capital employed, excluding items affecting comparability, was 11.4% (11.4%)
• Cash flow from current operations was SEK 3,366m (2,078)

(Table included in attached pdf)

http://mb.cision.com/Main/600/9805592/401956.pdf

CEO’S COMMENTS

The second quarter of 2015 showed continued good organic sales growth and a higher operating profit compared with the same period a year ago. This is despite a continued challenging business environment, with higher raw material costs mainly owing to the stronger U.S. dollar. The favorable performance has been made possible by continued focus on our three strategic priorities: profitable growth, innovation and efficiency. During the quarter we introduced ten innovations and product launches under brands such as Edet, Okay, Plenty, TENA, Tork and Zewa, at the same time that our work on improving efficiency along the entire value chain continues with undiminished strength.

We continue to invest in emerging markets and have decided to invest approximately SEK 650m in a new production facility in Brazil for the manufacture of incontinence products. SCA is today the second largest company in the Brazilian market for incontinence products, with the globally leading TENA brand and the local Biofral brand. Brazil, which is one of SCA’s prioritized emerging markets, is the third largest retail market in the world for incontinence products.

During the second quarter of 2015, price increases were achieved for consumer tissue in Europe, with gradual effect during the second half of 2015.

Consolidated net sales for the second quarter of 2015 increased by 13% compared with the same period a year ago. Organic sales growth was 5%, with growth in all business areas. In emerging markets, which accounted for 33% of sales, organic sales growth was 12% and in mature markets organic sales growth was 2%.

Consolidated operating profit for the second quarter of 2015, excluding items affecting comparability, gains on forest swaps and currency translation effects, rose 9% compared with the same period a year ago. The increase is mainly attributable to a better price/mix, higher volumes and cost savings. Raw material costs increased by SEK 435m. The operating margin, excluding items affecting comparability and gains on forest swaps, increased by 0.3 percentage points to 11.0%. Operating cash flow increased by 42%.

Personal Care showed a higher operating profit for the second quarter of 2015 compared with the same period a year ago. Operating profit was favorably affected by a better price/mix, higher volumes and cost savings. Higher raw material costs had a negative impact on earnings as a result of the stronger U.S. dollar and higher pulp prices, which were not fully compensated by lower costs for oil-based raw materials. Tissue showed a higher operating profit owing to a better price/mix, higher volumes and cost savings. Higher raw material costs related mainly to the stronger U.S. dollar had a negative impact on earnings. Operating profit for Forest Products, excluding gains on forest swaps, rose mainly as a result of higher prices (including exchange rate effects) and cost savings.

NB SCA discloses the information provided herein pursuant to the Securities Markets Act. This report has been prepared in both Swedish and English versions. In case of variations in the content between the two versions, the Swedish version shall govern. Submitted for publication on July 16, 2015, at 12:00 CET.

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