Interim Report Q1 2018

JANUARY 1 – MARCH 31, 2018
(compared with the year-earlier period)

• Net sales increased 11% to SEK 4,400m (3,972). Sales growth was mainly related to higher prices in the industrial units.
• EBITDA rose 47% to SEK 1,175m (797). The improvement in EBITDA was mainly related to higher prices in Wood, Pulp and Kraftliner, and an improved market and product mix.
• EBITDA margin increased to 26.7% (20.1)
• Earnings per share amounted to SEK 1.00 (0.52)
• Operating cash flow, which excludes strategic capital expenditures, rose to SEK 591m (85). Strategic capital expenditures amounted to SEK 634m (515) and relates to the Östrand investment which proceeds according to plan.

COMMENTS ON THE FINANCIAL STATEMENTS 

The market trend in the first quarter was positive in all of SCA’s product areas, with healthy demand and continued price increases. Earnings improved compared with the preceding quarter as well as the first quarter last year. The main contribution toward the earnings improvement was from kraftliner and pulp.

Despite exceptionally harsh winter conditions, timber supply to SCA’s industries remained stable, and there were no production stoppages due to lack of timber. Transportation and felling operations however were affected, resulting in slightly higher costs for the period.

Demand in the Wood segment remained strong in all SCA’s main markets, driven by a favorable level of construction activity and a growing market for home improvement. Further price increases were implemented during the first quarter.

The positive trend in the pulp market continues, with favorable global demand. The price of softwood kraft pulp rose in the quarter and additional price increases have been announced from April. SCA is investing SEK 7.8bn in doubling the production of bleached softwood kraft pulp. The expanded facility will begin operating in June 2018 and then gradually increase to full capacity. The project is on track both in terms of time and budget.

The market for kraftliner remains strong, with growing demand and limited supply. In addition to the positive economic trend in Europe, growth in e-commerce increases demand for transport packaging. During the quarter, price increases of EUR 60 per tonne were announced for all grades of brown and white kraftliner.

Capacity reductions in publication papers have created a better balance between supply and demand in a structurally contracting market. The improved balance has resulted in a more stable market with higher prices.

CAPITAL MARKETS DAY
SCA is holding a capital markets day in Galtström in Sundsvall, Sweden, on May 22, 2018.

INVITATION TO PRESS CONFERENCE ON THE INTERIM REPORT Q1 2018
Members of the media and analysts are hereby invited to attend a press conference where this interim report will be presented by the President and CEO, Ulf Larsson, and CFO, Toby Lawton.

Time: April 26, 2018 at 10:00 a.m.

Venue: Kreugersalen, Tändstickspalatset, Västra Trädgårdsgatan 15 in Stockholm, Sweden.

The press conference will be webcast live at www.sca.com. It is also possible to participate by telephone by calling:

Sweden: +46 (0) 8 5661 9445
UK: +44 (0) 1452 541 003
US +1 646 741 2120

Specify “SCA” or the conference ID: 3099569.
  

Sundsvall, April 26, 2018

SVENSKA CELLULOSA AKTIEBOLAGET SCA (publ)

Ulf Larsson
President and CEO 

For further information, please contact
Ulf Larsson, President and CEO, +46 (0)60 19 46 46
Toby Lawton, CFO, +46 (0)60 19 31 09
Björn Lyngfelt, Senior Vice President, Group Communications, +46 (0)60 19 34 98
Andreas Ewertz, Investor Relations Director, +46 (0)60 19 31 97

Please note:
This is information that SCA is obliged to make public pursuant to the EU Market Abuse Regulation and 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. The information was submitted for publication, through the agency of the contact person set out below, on April 26, 2018 at 08:00 a.m. CET. The report has not been reviewed by the company’s auditors.

Björn Lyngfelt, Senior Vice President, Group Communications, +46 (0)60 19 34 98