Interim report 1 January–30 June 2008

1 JANUARY–30 JUNE 2008 (compared with same period previous year)
• Net sales rose 6% to SEK 54,852m (51,743).
• Profit before tax was SEK 3,649m (3,876).
• Net profit for the period was SEK 2,919m (3,004).
• Earnings per share were SEK 4.14 (4.26).
• Cash flow from current operations was SEK 695m (919).

(Tables are included in attached pdf)


CEO’S MESSAGE
“Consolidated net sales rose 6% compared with the same period a year ago. This is mainly a result of favourable sales in our Hygiene operations, where priority growth markets such as South America and Russia continue to show strong growth. The Hygiene part is becoming an increasingly important part of our portfolio and has increased by 3 percentage points compared with a year ago.

We are seeing a continued positive trend in our Tissue operations, where our branded products continue to perform well and where we have made successive improvements to the product mix and raised our prices, which have compensated for higher costs. Operating profit is up 49% compared with a year ago. Our Personal Care operations also showed a slight earnings improvement compared with a year ago. However, the rate of earnings growth has been affected by our marketing efforts in priority growth markets and a generation shift in the production of baby diapers.

Operating profit weakened during the second quarter. Compared with the second quarter a year ago, the largest deviations were in the solid-wood and packaging operations. The price decline for solid-wood products continued, and demand among end-consumers has fallen, primarily in the UK. In the packaging market, demand has weakened, and the high inventory levels of containerboard (testliner) at producers did not decrease during the second quarter, which has put pressure on prices. Earnings for SCA's Packaging operations weakened due to the price decline for liner and higher costs in connection with operating shutdowns and planned production cuts.

Cash flow for the period was affected by the slightly lower earnings, a high level of working capital, a seasonal effect as well as an intentional inventory build-up ahead of a generation shift in the baby diaper operations, and a lower share of timber harvesting from own forests.

An important divestment was made during the second quarter through the sale of SCA's conventional corrugated board business in the UK and Ireland, with net sales of SEK 2,900m. The sale will result in improved earnings and cash flow for the Packaging business and supports the overall strategy entailing a focus on higher value-added.

The coming half year will present different challenges in our various businesses. Our Hygiene part of the business will grow and expand. In Packaging we are once again encountering cyclical challenges with price pressure on liner as well as corrugated board. We expect operating profit for Packaging and Forest Products to remain under pressure during the rest of the year at the same time that we see a continued strong hygiene business."

Jan Johansson, President and CEO


For further information, please contact:
Bodil Eriksson, Corporate Communications,
+46 8 788 52 34
Johan Karlsson, Investor Relations,
+46 8 788 51 30
Pär Altan, Media Relations,
+46 8 788 52 37

Note
SCA discloses the information provided herein pursuant to the Securities Markets Act. This report has been prepared in both Swedish and English. In case of variation in the content of the two versions, the Swedish version shall take precedence.