SCA Investor Day.pdf

SCA, a leading global hygiene and forestry company, sustainably develops, produces, and sells personal hygiene products, tissue, and forestry products. Through BSN medical, acquired recently, SCA offers products in wound care, compression therapy, and orthopedics. Sales occur in around 150 countries under strong brands like TENA, Tork, Libero, Libresse, Leukoplast Lotus, Nosotras, Saba, Tempo, Vinda, and Zewa. As Europe's largest private forest owner, SCA prioritizes sustainable forestry. In 2016, SCA had approximately 46,000 employees and a turnover of around 117 billion SEK (12.4 billion EUR). SCA was founded in 1929, is headquartered in Stockholm, and listed on Nasdaq Stockholm. It aims to improve well-being through leading solutions in hygiene and health.

SCA's forestry division, set to become a separate listed company, holds about half of its annual timber consumption of around 10 million m3fub. Its forests are in a high-growth phase, with a current net growth of about 3 million m3sk per year. SCA plans to increase its own timber harvesting from around 4.3 million m3fub to about 6 million m3fub in approximately 100 years, while maintaining and growing its standing timber volume.

The largest ongoing expansion project is the upgrade of Östrand's pulp mill, increasing bleached sulfate pulp capacity from 430,000 tons to 900,000 tons. The total investment is around 7.8 billion SEK, with approximately 3.1 billion SEK invested by the end of Q1 2017. Production start is expected in June 2018, with full capacity reached in 2020. The investment is expected to strengthen the mill's competitiveness and reduce energy and heat consumption by 27% and 44% per produced ton, respectively, while also generating excess electricity for sale.

SCA's forestry division's net debt, after reallocation, was 5,376 MSEK as of March 31, 2017. In 2016, its total operating costs were distributed as follows: wood, fluff, and waste fiber (14%), other raw materials and consumables (12%), personnel (16%), transport and distribution (19%), energy (7%), depreciation (7%), and other operating costs (25%).