Capital structure and dividend policy for SCA’s hygiene business

  • Press release

SCA has decided on capital structure and dividend policy targets for the Group’s hygiene business.

The capital structure target for SCA’s hygiene business is to have an effective capital structure at the same time that the long-term access to debt financing is ensured. Cash flow in relation to net debt shall take into account the target to maintain a solid investment grade rating.

Dividend policy: SCA’s hygiene business aims to provide long-term stable and rising dividends to its shareholders. When cash flow from current operations exceeds what the company can invest in profitable expansion over the long term, and under the condition that the capital structure target is met, the surplus shall be distributed to the shareholders.

As per September 30, 2016, SCA’s net debt, including pension liabilities, amounted to SEK 40,281m, allocated pro forma as follows: SEK 35,281m attributed to the hygiene business and SEK 5,000m to the forest products business. The complete pro forma balance sheet and income statement for the hygiene business are included in this press release.

SCA's current lenders will be given the possibility to switch counterparty to SCA Hygiene AB, the Parent Company of SCA’s hygiene business or its subsidiaries. Due to this SCA informs that the company is currently participating in a process relating to a potential corporate acquisition. The process is still in an early phase but no decisions have been made. However, any potential acquisition by SCA will be made without prejudice of the capital structure targets. SCA will not provide any further information concerning this process.

Pro forma Condensed Consolidated Balance Sheet
September 30, 2016 

Non-current assets
Intangible assets 26,447
Buildings, land, machinery and equipment 45,755
Shares and participations 1,067
Financial and other non-current assets 2,690
Total non-current assets 75,959

Current assets
Inventories 11,318
Trade receivables and other current assets 19,039
Current financial assets, cash and cash equivalents 5,820
Total current assets 36,177
Total assets 112,136

Owners of the parent 33,408
Non-controlling interest 6,172
Total equity 39,580

Non-current liabilities
Non-current financial liabilities 31,280
Provisions for pensions 8,450
Other non-current liabilities 4,433
Total non-current liabilities 44,163

Current liabilities
Current financial liabilities 2,219
Other current liabilities 26,174
Total current liabilities 28,393
Total liabilities 72,556
Total equity and liabilities 112,136

 Pro forma Condensed Consolidated Income Statement
January 1, 2016 - September 30, 2016 

Net sales 74,465
Cost of goods sold -53,335
Items affecting comparability -484
Gross profit 20,646
Sales, general and administration -12,550
Items affecting comparability -1,654
Share of profits of associates and joint ventures 108
Operating profit 6,550
Financial items -570
Profit before tax 5,980
Tax -2,910
Net profit for the period 3,070

For additional information please contact:
Linda Nyberg, Vice President Media Relations, +46 (0)8 - 788 51 58
Johan Karlsson, Vice President Investor Relations, +46 (0)8 - 788 51 30