Interim Report Q1 2016
JANUARY 1 – MARCH 31, 2016 (compared with same period a year ago)
- Net sales rose 1% (5% excluding exchange rate effects) to SEK 28,177m (27,958)
- Organic sales growth, which excludes exchange rate effects, acquisitions and divestments, was 3%
- Operating profit, excluding items affecting comparability, rose 13% to SEK 3,247m (2,872)
- The operating margin, excluding items affecting comparability, was 11.5% (10.3%)
- Profit before tax, excluding items affecting comparability, rose 12% to SEK 2,922m (2,602)
- Items affecting comparability totaled SEK -191m (-122), of which SEK -185m (-119) affects cash flow
- Earnings per share were SEK 2.74 (2.43)
- Return on capital employed, excluding items affecting comparability, was 11.9% (10.4%)
- Cash flow from current operations was SEK 1,821m (1,246)
- The acquisition of Wausau Paper Corp. was closed on January 21, 2016
(Table included in attached pdf)
Through continued focus on our strategic priorities profitable growth, innovation and efficiency, we delivered favorable organic sales and earnings growth for the first quarter of 2016. We have introduced ten innovations under the Libero, Libresse, Lotus, TENA and Tork brands, among others.
In January 2016 we completed the acquisition of Wausau Paper Corp., a leading North American manufacturer of Away-from-Home tissue. The integration process has been started, and we expect to achieve annual synergies of approximately USD 40m with full effect in three years. After the end of the quarter, on April 1, we integrated our hygiene business in Southeast Asia, Taiwan and South Korea with Vinda, where SCA is the majority shareholder. Work has now begun on leveraging our joint strengths to build a leading Asian hygiene business.
Consolidated net sales for the first quarter of 2016 increased by 1% compared with the same period a year ago. Organic sales growth was 3%. In emerging markets, which accounted for 32% of sales, organic sales growth was 9%, while in mature markets organic sales growth was -1%. The hygiene business showed good organic sales growth, which amounted to 6% for Personal Care and 4% for Tissue. Sales for Forest Products decreased by 6%, mainly attributable to lower prices.
Consolidated operating profit for the first quarter of 2016, excluding items affecting comparability, currency translation effects, acquisitions and divestments, rose 13% compared with the same period a year ago. The increase is mainly attributable to higher volumes, a better price/mix, lower energy costs and cost savings. Higher raw material costs had a negative earnings impact. Operating profit for the hygiene business improved mainly as a result of higher volumes, a better price/mix, cost savings and lower energy costs for Tissue. The lower operating profit for Forest Products was mainly attributable to lower prices.
Consolidated operating margin, excluding items affecting comparability, increased by 1.2 percentage points to 11.5%. Operating cash flow increased by 40%. Return on capital employed, excluding items affecting comparability, grew by 1.5 percentage points to 11.9%.
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
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 at 08:00 CET on April 28, 2016. This report has not been reviewed by the company’s auditors.