1 January - 31 December 1999
99:4 99:3 99:2 99:1 9912 9812
Net sales, SEK M 15,662 16,603 16,389 16,242 64,896 61,273
Earnings after financial 1,711 1,395 1,287 1,128 5,521 5,169
items, SEK M
Excluding nonrecurring 5,521 4,769
Earnings per share, SEK 5.10 4.19 4.01 3.55 16.85 16.11
Cash flow from current 11.16 8.19 8.09 4.01 31.45 18.46
per share, SEK
Dividend, SEK per share 6.80 6.14
Does not include SCA's share of net sales in Modo Paper AB.
Adjusted historically to reflect new issue.
*Cash flow from current operations improved significantly and was the
*The Board proposes a dividend of SEK 6.80 per share, up 11%.
Accordingly, dividend growth during the past five years is 14%.
*Earnings after financial items, excluding nonrecurring items, improved
16%, the highest result ever.
FOURTH QUARTER 1999 COMPARED WITH THIRD QUARTER
*Earnings after financial items rose 23% to a new all time high.
* All business areas improved their operating profit.
- Hygiene Products +15%, improved productivity.
- Packaging +34%, favorable demand and positive price trend.
- Forest Products +13%, favorable volume trend for publication papers
and rising pulp prices.
SCA's fine paper operations were transferred on 1 October 1999 to the
newly formed Modo Paper AB, in which SCA holds a 50% interest. As of the
fourth quarter, Modo Paper is considered an associated company and is
reported as a share in earnings, which among other effects means that net
sales and operating surplus from these operations are not included from
the aforementioned date. This affects historical comparisons. In
conjunction with the transfer of the fine paper operations, a new business
area was created in SCA Forest Products, which comprises the two subunits
pulp, Forest and Timber and also publication papers.
To facilitate comparison with competing companies in the hygiene products
and packaging sectors, which have applied 40-year amortization periods for
goodwill or the pooling method, SCA is now reporting earnings for its
business areas excluding goodwill amortization. This amortization is
reported separately for each business area.
Historical key figures are adjusted to reflect the dilution of the SCA
share in conjunction with the new issue in the autumn, in which the bonus
issue element amounted to 5.6%. Moreover, the key figures affected by
SCA's redefining of net debt, that is, that pension liabilities are
included, are also adjusted.
NET SALES AND EARNINGS
Consolidated net sales amounted to SEK 64,896 M (61,273), an increase of
6% compared with 1998. Adjusted for deconsolidation of the fine paper
operations, the increase is about 12%. The largest increase was in
Packaging, but Hygiene Products also rose. The increases are due mainly to
company acquisitions. Currency movements affected Group net sales only
Net sales, excluding the fine paper operations, rose 12% during the fourth
quarter. However, as a consequence of Modo Paper being reported as of 1
October as an associated company, the Group's total net sales declined 6%.
Group operating profit amounted to SEK 6,733 M (6,428). Adjusted for
nonrecurring items amounting to SEK 400 M in 1998, operating profit for
the period increased by 12%. All business areas reported improved profits.
The increase for Packaging was significant, amounting to 47%.
Operating profit in the fourth quarter was 18% higher than in the third
quarter. Operating profit improved in all business areas.
Financial items amounted to an expense of SEK 1,212 M (1,259). The effect
of a higher net debt attributable to company acquisitions was more than
offset by lower interest rates. Financial items in the fourth quarter
amounted to an expense of SEK 313 M, compared with financial items to an
expense of SEK 315 M in the third quarter. The change is the net effect of
lower net debt, as a result of the new issue and higher interest rates.
New issue proceeds were paid in on 22 October.
Group earnings after financial items amounted to SEK 5,521 M (5,169).
Adjusted for nonrecurring items, this was equal to an increase of 16%
compared with 1998. Earnings after financial items in the fourth quarter
were 23% higher than in the third quarter.
Net earnings after tax amounted to SEK 3,602 M (3,379). Earnings per share
after full tax and full dilution amounted to SEK 16.85 (16.11).
Return on shareholders' equity was 12% (13). The return on capital
employed, calculated excluding nonrecurring items in 1998, was 12% (13).
Operating cash surplus amounted to SEK 11,101 M (9,960), equal to 17% (16)
of net sales.
Operating cash flow amounted to SEK 8,707 M (6,679). Working capital
increased by only SEK 226 M (932) during the period. Working capital
decreased by SEK 386 M during the fourth quarter. Current net capital
expenditures totaled SEK 2,046 M (2,058).
Interest and tax payments totaled a significantly lower amount than in the
Cash flow from current operations, that is before strategic capital
investments and dividends, amounted to SEK 6,740 M (3,876), equal to SEK
31.45 (18.46) per share. Accordingly, SCA clearly exceeded the established
cash flow targets.
Company acquisitions and strategic capital expenditures in machinery and
plant amounted to SEK 13,015 M (5,041). Company acquisitions amounting to
SEK 10,400 M (2,793) included the purchase of large packaging companies in
Great Britain, Denmark and France and a small acquisition in Ireland. In
addition, the figure includes the purchase of hygiene operations in Great
Britain, acquisition of a minority interest in Metsä Tissue and smaller
acquisitions in Portugal and Spain. Also includes acquisition of the
minority holding outstanding in Laakirchen.
Strategic capital expenditures in machinery and plant amounted to SEK
2,615 M (2,248), mainly in Hygiene Products but also in Packaging.
Divested units amounted to SEK 2,885 M (1,511) and pertains to
deconsolidation of the fine paper operations.
SEK M 9912 9812
Net sales 64,896 61,273
Operating cash surplus 11,101 9,960
% of net sales 17 16
Current capital expenditures, -2,046 -2,058
% of net sales 3 3
Changes in working capital -226 -932
Other operating cash flow -122 -291
Operating cash flow 8,707 6,679
Income taxes paid, etc² -1,351 -1,694
Free cash flow 7,356 4,985
per share, SEK 34.33 23.74
Interest paid after taxes -616 -1,109
Cash flow from current 6,740 3,876
per share, SEK 31.45 18.46
Strategic capital investments, -10,500 -3,531
Cash flow before dividend -3,760 345
¹ Figures for 1998 adjusted to conform to SCA's new cash flow statement.
Tax attributable to operating profit.
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http://www.bit.se/bitonline/2000/01/31/20000131BIT00460/bit0001.doc Full Report
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