Interim Report Q2 2018

JANUARY 1 - JUNE 30, 2018
(compared with the year-earlier period) 

• Net sales increased 11% to SEK 9,070m (8,191). The growth was mainly related to higher prices, offset partly by lower pulp volumes. 
• EBITDA rose 45% to SEK 2,209m (1,521). The improvement in EBITDA was mainly related to higher prices in Kraftliner and Wood. EBITDA was affected by the planned expansion stop in Östrand in the second quarter 2018.
• EBITDA margin increased to 24.4% (18.6)
• Earnings per share amounted to SEK 2.57 (0.93) 
• Operating cash flow, which excludes strategic capital expenditures, increased to SEK 1,265m (906). Strategic capital expenditures totaled SEK 1,122m (1,476) and relate to the Östrand investment. 
• In june, the expanded Östrand pulp mill went into operation according to plan

COMMENTS ON THE FINANCIAL STATEMENTS
The market remained strong in the second quarter with healthy demand in all of SCA’s product areas. The expanded pulp mill in Östrand went into operation in June following a planned expansion stop to complete the final stage of the sequential start-up. Forest, Wood and Paper reported improved earnings compared with the preceding quarter and the corresponding quarter in 2017, while the Pulp segment reported a loss for the quarter as a result of the planned stop.

The supply of wood to SCA’s industries was stable. Deliveries to Östrand pulp mill declined during the quarter due to the planned expansion stop ahead of the start-up of the expanded plant. The price of timber and pulpwood rose slightly.

The positive market trend in the Wood segment continued in the second quarter and further price increases were implemented. Inventories are generally low in all markets.

The pulp market remained strong with high demand in all markets. The price of pulp increased further during the quarter.

The market for kraftliner remained strong, with growing demand and limited supply. In addition to the positive economic trend in Europe, growth in e-commerce is increasing the demand for transport packaging.

For publication papers, capacity reductions among paper producers have created a better balance between supply and demand in a structurally contracting market. Demand has improved for uncoated papers, and a slightly stronger market was also noted for coated papers. The market and product mix steadily improved in the first six months of the year.

 
Expanded Östrand pulp mill in operation

In June, the Östrand pulp mill was put into operation following a longer stop to complete and install the final sections of the expanded plant.

The start-up of the mill has gone well despite the operational disruptions and necessary adjustments and fine-tuning that can be expected in such a major project. A good level of production was achieved early and Östrand is now focusing on ensuring stable production and gradually calibrating the mill to reach full capacity and the highest quality.

The Östrand pulp mill is starting up in a favorable market and the first pulp has been delivered to customers.

 
INVITATION TO PRESS CONFERENCE ON SIX-MONTH REPORT 2018 

Members of the media and analysts are hereby invited to attend a press conference where this six-month report will be presented by the President and CEO, Ulf Larsson, and CFO, Toby Lawton.

Time: July 25, 2018 at 10:00 a.m.

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 5069 2180
UK: +44 (0) 2071 928 000
USA: +1 631 510 7495

Specify “SCA” or the conference ID: 3792928.

Sundsvall, July 25, 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 July 25, 2018 at 8:00 a.m. CET. The report has been reviewed by the company’s auditors.
Björn Lyngfelt, Senior Vice President, Group Communications, +46 (0)60 19 34 98