1 JANUARY–30 SEPTEMBER 2009 (compared with corresponding period a year ago)
• Net sales rose 1% to SEK 83,350m (82,290)
• Profit before tax, excluding restructuring costs, was SEK 5,724m (5,087)
• Restructuring costs in Packaging amounted to SEK 826m (0)
• Profit for the period, excluding restructuring costs, was SEK 4,179m (4,172)
• Earnings per share were SEK 5.06 (5.92)
• Cash flow from current operations amounted to SEK 8,946m (2,178)
(Table included in attached pdf)
SCA continues to improve its earnings and cash flow in pace with the completion of action plans. Operating profit rose 5% for the first nine months of the year and 26% for the third quarter compared with a year ago.
A number of measures have been taken to strengthen cash flow. Working capital has decreased mainly through lower inventory levels. Together with a higher operating surplus and a lower level of capital expenditures, among other things, this has resulted in a sharp increase in cash flow from current operations, by SEK 6,768m. Our net debt has decreased by nearly SEK 5 billion since the start of the year.
Earnings from our hygiene business improved significantly during the third quarter compared with a year ago – Tissue by 74% and Personal Care by 10%. A better product mix and stronger margins along with synergy effects in the European tissue operations contributed to this. Margins for our baby diapers have increased compared with a year ago. Campaign intensity remains high in all categories.
Demand for corrugated board in Europe was weak, and compared with a year ago, sales are down 10% and prices continued to fall during the quarter.
After the first quarter, our action programme in Packaging has resulted in lower costs by SEK 148m. Fully implemented according to plan after the first quarter of 2010, these measures will generate roughly SEK 1bn in annual savings. Nine of the eleven planned packaging plants closures have been carried out and half of the planned 2,200 positions have been cut. We are thereby on track with the plan we presented in conjunction with the first quarter report, and as a result, earnings for Packaging improved between the second and third quarters.
In our Forest Products business, operating profit grew 28% compared with a year ago, mainly due to an improvement in publication papers. Deliveries rose in a generally weak market.
We anticipate higher energy and raw material costs during the fourth quarter. On the whole, we expect to see a stable price picture for hygiene products, while we will encounter a continued weak market for publication papers. The recovery that has begun to take place in liner prices is not expected to affect corrugated board prices until the end of the first quarter of 2010.
Jan Johansson, President and CEO