Year-end Report 2014

JANUARY 1–DECEMBER 31, 2014 (compared with same period a year ago)

• Net sales rose 12% (10% excluding exchange rate effects and divestments) to SEK 104,054m (92,873)
• Organic sales growth, which excludes exchange rate effects, acquisitions and divestments, was 3% (4% including Vinda’s organic sales growth)
• Operating profit, excluding items affecting comparability, rose 14% (12% excluding exchange rate effects and divestments) to SEK 11,849m (10,381)
• The operating margin, excluding items affecting comparability, was 11.4% (11.2%)
• Profit before tax, excluding items affecting comparability, rose 17% (14% excluding exchange rate effects and divestments) to SEK 10,888m (9,320)
• Items affecting comparability totaled SEK -1,400m (-1,239)
• Earnings per share were SEK 9.40 (7.90)
• Cash flow from current operations was SEK 8,149m (6,252)
• The Board of Directors proposes an increase in the dividend by 10.5% to SEK 5.25 per share (4.75).
• Recalculations have been made for previous periods on account of new and amended IFRSs and rules governing consolidated financial statements and joint arrangements (see note 6)

 (Table included in attached pdf)
 
  
CEO’S COMMENTS
In 2014 SCA delivered its highest profit before tax ever and good organic sales growth. We increased our operating profit, excluding items affecting comparability, by SEK 1,468m. We achieved this thanks to the continued work with our strategic priorities – growth, innovation, and efficiency. During the year SCA strengthened its cooperation with the Chinese company Vinda, in which SCA is the majority shareholder, by transferring its hygiene operations in China, Hong Kong and Macau to Vinda. We also continued our successful innovation work and introduced about thirty innovations and product launches under the Libero, Libresse, Lotus, Saba, Tempo, TENA and Tork brands, among others. Our work on achieving increased cost efficiency continues. Our three efficiency programs have continued to deliver substantial savings. Two of the programs were concluded at year-end, however, our work with productivity and cost-efficiency continues. The year was characterized by weak performance of the global economy and geopolitical tensions. The global market for hygiene products was affected by higher competition and low growth in mature markets.

Consolidated net sales for the fourth quarter of 2014 increased by 17% compared with the same period a year ago. Organic sales growth was 4% (5% including Vinda’s organic sales growth), with growth across all business areas. Growth was mainly related to the hygiene operations’ emerging markets and the Forest Products business area. Operating profit, excluding items affecting comparability and gains on forest swaps, rose 20% (3% including gains on forest swaps during the same period a year ago), which is SCA’s highest quarterly profit ever. The increase is mainly attributable to a better price/mix, higher volumes, cost savings and the acquisition of the majority shareholding in the Chinese company Vinda. Higher raw material costs resulting from higher prices and a stronger dollar had a negative impact on earnings. The operating margin, excluding items affecting comparability, was 11.9%. Operating cash flow increased by 31%. The Board of Directors proposes an increase in the dividend, by 10.5% to SEK 5.25 per share.

Tissue posted a considerably higher operating profit for the fourth quarter of 2014 compared with the same period a year ago. Operating profit was favorably affected by higher volumes, cost savings and the acquisition of the majority shareholding in the Chinese company Vinda. Consolidation of Vinda had a negative impact on the margin. Personal Care increased its earnings as a result of higher volumes and cost savings, which compensated for higher raw material costs. The lower operating profit for Forest Products is explained by gains on forest swaps during the fourth quarter of 2013. Excluding this effect, earnings increased mainly as a result of higher prices (including exchange rate effects) and cost savings.

For further information, please contact:
Johan Karlsson, Vice President Investor Relations, Group Function Communications, +46 8 788 51 30
Karl Stoltz, Media Relations Manager, Group Function Communications, +46 8 788 51 55
Joséphine Edwall-Björklund, Senior Vice President, Group Function Communications, +46 8 788 52 34

 
NB
SCA discloses the information provided herein pursuant to the Securities Markets Act. This report has been prepared in both Swedish and English versions. In case of variations in the content between the two versions, the Swedish version shall govern. Submitted for publication on January 30, 2015, at 08.00 CET. This report has not been reviewed by the company’s auditors.