1 January - 30 September 2000
00:3 00:2 00:1 0009 9909
Net sales, SEK M 16,784 16,351 15,992 49,127 49,234¹
Earnings after financial 1,805 1,773 1,670 5,248 3,810
items, excl. Non-
recurring items, SEK M
Earnings per share, 5.40 5.05 4.79 15.24 11.75
Earnings per share, 15.02 24.86
Cash flow from current 9.21 6.37 3.79 19.37 20.29
per share, SEK
Including net sales in SCA's former fine paper operations.
Adjusted historically to reflect new issue.
*Earnings for the quarter, excluding non-recurring items, were record high.
*Operating margins for Hygiene Products and Packaging improved in the third
quarter, compared with the second quarter.
*Nine-month earnings after financial items, excluding non-recurring items,
rose 38% compared with the year-earlier period. All business groups
improved their operating profit.
*Sales growth - excluding fine paper operations - was 19% during the year
compared with the corresponding period a year earlier.
*Capital gains from the sale of Modo Paper amounted to SEK 2,656 M. SEK 625
M has been reserved for possible structural measures pending the outcome
of the planned acquisition of Metsä Tissue.
NET SALES AND EARNINGS
Consolidated net sales amounted to SEK 49,127 M and thus remained
unchanged from the preceding year (SEK 49,234) M. Adjusted for the
influence of fine-paper operations, which were included in the first three
quarters of 1999, net sales rose 19% for the Group's other operations.
Changes in exchange rates reduced Group net sales by 2%.
The divestment of Modo Paper provided a capital gain of SEK 2,656 M. As
regards the acquisition of Metsä Tissue, the EU Commission has requested a
more detailed examination, which is expected to be finalized not later
than February 2001. Consequently, there is uncertainty as regards the
completion of the transaction. At the same time, SCA, for competition
regulatory reasons, has been unable to conduct a final acquisition
estimate. Accordingly, for reasons of prudence, an amount corresponding to
a slightly less than 25% of the capital gain, or SEK 625 M, has been
allocated as a provision for possible structural measures. As a result,
non-recurring items amount to SEK 2,031 M in the consolidated operating
Group operating profit, excluding non-recurring items, amounted to SEK
6,169 M (4,709), an increase of 31% compared with the corresponding period
in 1999. Including non-recurring items, operating profit totaled SEK 8,200
M. Currency movements had a marginally negative impact on earnings.
Operating profit rose in all business areas. Operating profit for Hygiene
Products amounted to SEK 2,044 M (1,866), up 10%, while the corresponding
figure for Packaging was SEK 2,123 M (1,479), an increase of 44%, and
Forest Products reported operating profit of SEK 1,986 M (1,498), up 33%.
Operating profit includes SCA's share of earnings in Modo Paper for the
period January-July, amounting to SEK 644 M. Operating profit in the
preceding year included SEK 355 M relating to SCA's former fine paper
business for the entire period.
Financial items amounted to an expense of SEK 921 (expense: 899). Despite
lower net debt, interest expense rose as a result of higher interest
Group earnings after financial items, excluding non-recurring items,
amounted to SEK 5,248 M (3,810), up 38% from the year-earlier period.
Including non-recurring items, earnings after financial items was SEK
Net earnings after tax, excluding non-recurring items, totaled SEK 3,528 M
(2,470), equal to earnings per share after full tax and dilution, of SEK
15.24 (11.75), representing an increase of 30%. The corresponding earnings
per share, excluding goodwill amortization, totaled SEK 17.53 (13.72).
Net earnings after tax, including non-recurring items, was SEK 5,759 M,
equal to earnings per share, after full tax and dilution, of SEK 24.86.
Excluding non-recurring items, the return on shareholders' equity was 14%
(11), while the return on capital employed was 14% (12).
COMPARISON WITH THE SECOND QUARTER
Modo Paper was divested at the end of July. During the third quarter,
SCA's share in earnings amounted to SEK 120 M, compared with SEK 306 M
during the second quarter. Despite the decline of SEK 186 M in the share
in earnings of Modo Paper, the overall operating profit increased to SEK
2,125 M (2,093). The increase for other operations thus amounted to 12%.
The Group's operating profit, including non-recurring items, amounted in
the third quarter to SEK 4,156 M.
For Hygiene Products as well as Packaging, operating profit rose 17%
between the quarters, amounting to SEK 740 M and 787 M, respectively. The
rise in earnings is due to the implementation of sales price increases,
combined with a favorable outcome for various efficiency-enhancement
programs. Earnings for Forest Products totaled SEK 693 M (686).
Earnings after financial items, excluding non-recurring items, rose 2% and
amounted to SEK 1,805 M (1,773), representing record quarterly earnings.
The operating cash surplus amounted to SEK 8,811 M (8,031), equal to 18%
(16) of net sales.
Operating cash flow amounted to SEK 5,976 M (5,912). Working capital
increased by SEK 1,413 M (612) during the period. The trend in working
capital during the year was affected by the exceptionally low level of
tied-up working capital at year-end, when it amounted to 10.3% of net
sales. Tied-up working capital at the end of the quarter amounted to
12.0%, compared with 11.7%, adjusted for fine-paper operations, at the
corresponding date a year earlier. Current net capital expenditures
amounted to SEK 1,427 M (1,441).
Cash flow from current operations, that is before strategic investments
and dividends, amounted to SEK 4,493 M (4,276), equal to SEK 19.37 (20.29)
Company acquisitions during the period totaled SEK 2,278 M, and were
primarily attributable to the acquisition of Metsä Corrugated and Johnson
& Johnson's North American incontinence products operations. A couple of
minor divestments were conducted, resulting in proceeds of SEK 32 M.
Strategic investments in plant and machinery and restructuring costs
amounted to SEK 1,215 M and primarily involved expansion expenditures in
hygiene operations. The sale of SCA's shareholding in Modo Paper resulted
in proceeds of SEK 6,522 M. The establishment of the joint forest and
sawmill company with Graninge released SEK 916 M. As a result, a net
inflow of SEK 3,977 M was achieved for strategic investments, acquisitions
and divestments, which can be compared with an outflow of SEK 10,167 M
during the year-earlier period.
SEK M 0009 9909
Net sales 49,127 49,234
Operating cash surplus 8,811 8,031
% of net sales 18 16
Current capital expenditures, -1,427 -1,441
% of net sales 3 3
Changes in working capital -1,413 -612
Other operating cash flow 5 -66
Operating cash flow 5,976 5,912
Tax payment etc -800 -1,002
Free cash flow 5,176 4,910
Per share, SEK 22.31 23.31
Interest payment after taxes -683 -634
Cash flow from current 4,493 4,276
Per share, SEK 19.37 20.29
Strategic investments and 3,977 -10,167
Cash flow before dividend 8,470 -5,891
Tax attributable to operating profit.
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