JANUARY 1 – JUNE 30, 2016 (compared with same period a year ago)
- Net sales amounted to SEK 57,263m (57,177)
- Organic sales growth, which excludes exchange rate effects, acquisitions and divestments, was 2%
- Operating profit decreased by 8% to SEK 5,348m (5,809)
- Adjusted operating profit, which excludes items affecting comparability, rose 9% to SEK 6,652m (6,089)
- Adjusted operating margin was 11.6% (10.6%)
- Adjusted profit before tax rose 10% to SEK 6,197m (5,626)
- Items affecting comparability totaled SEK -1,304m (-280), of which SEK -1,142m (-139) affects cash flow. Items affecting comparability includes a provision of SEK 1,065m related to ongoing anti-trust cases.
- Taxes include a provision of SEK 1,300m related for ongoing tax cases
- Profit for the period was SEK 2,114m (3,977)
- Earnings per share were SEK 2.84 (5.23)
- Adjusted return on capital employed was 12.4% (11.4%)
- Cash flow from current operations was SEK 4,555m (3,366)
(Table included in attached pdf)
The second quarter of 2016 showed continued good organic growth in adjusted operating profit compared with the same period a year ago. We have introduced seven innovations in consumer tissue, among other areas, under the Lotus, Okay, Plenty and Zewa brands, and in Away-from-Home tissue and incontinence products under our globally leading brands Tork and TENA, respectively. Our efficiency improvement work has continued with undiminished strength across the value chain. During the second quarter of 2016 we decided to close a tissue production plant in Spain. This is aligned with our long-term strategy to optimize our geographic production footprint in order to drive cost and capital efficiency and further increase value creation in Tissue.
On April 1 this year our hygiene operations in Southeast Asia, Taiwan and South Korea were integrated with Vinda, in which we are the majority shareholder. Work is now under way on leveraging our joint strengths to build a leading Asian hygiene business.
During the second quarter of 2016 we made a provision of SEK 1.3 billion for ongoing tax cases in Sweden and Austria. Recently announced judgments in similar cases indicate a change in practice, and we therefore now consider it appropriate to make a provision in the financial statements for the second quarter of 2016. We have also reserved SEK 964m for ongoing antitrust cases in Chile, Colombia, Poland, Spain and Hungary. I want to stress that we do not tolerate any form of collusion with competitors. We are working intensively to minimize the risks for unethical behavior in our operations, among other things through employee training in competition law. We have also implemented SCA’s Code of Conduct in all of our jointly owned companies.
Consolidated net sales for the second quarter of 2016 were level with the same period a year ago. Organic sales growth was 2%. In emerging markets, which accounted for 31% of net sales, organic sales growth was 6%, while in mature markets it was 0%. The hygiene operations showed good organic sales growth as a result of higher volumes and a better price/mix, amounting to 5% for Personal Care and 3% for Tissue. Organic sales growth for Forest Products was -7%, mainly owing to lower volumes and lower prices.
The Group’s adjusted operating profit for the second quarter of 2016, excluding currency translation effects, acquisitions and divestments, rose 9% compared with the same period a year ago. The increase is mainly related to higher volumes, a better price/mix, cost savings, and lower energy and raw material costs. Adjusted operating profit for the hygiene operations rose mainly as a result of a better price/mix, higher volumes, cost savings, and lower energy and raw material costs in Tissue. The lower adjusted operating profit for Forest Products is mainly attributable to lower prices and lower volumes. The Group’s adjusted operating margin increased by 0.7 percentage points to 11.7%. Operating cash flow increased by 21%. The adjusted return on capital employed increased by 0.5 percentage point to 12.1%.
For further information, please contact:
Fredrik Rystedt, CFO and Executive Vice President, +46 8 788 51 31
Johan Karlsson, Vice President Investor Relations, Group Function Communications, +46 8 788 51 30
Linda Nyberg, Vice President Media and Online, Group Function Communications, +46 8 788 51 58
Joséphine Edwall-Björklund, Senior Vice President, Group Function Communications, +46 8 788 52 34
This information is such that SCA is obligated to make public pursuant to the EU Market Abuse Regulation or the Swedish 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. The information was submitted for publication, through the agency of the contact person set out below, at 12:00 CET on July 19, 2016.
Karl Stoltz, Media Relations Manager, +46 8 788 51 55