Interim report Q3 2008

1 JANUARY–30 SEPTEMBER 2008 (compared with same period previous year)
• Net sales rose 5% to SEK 82,290m (78,105).
• Profit before tax was SEK 5,087m (5,895).
• Net profit for the period was SEK 4,172 (5,023).
• Earnings per share were SEK 5.92 (7.13).
• Operating cash flow was SEK 2,178 (3,105).

[Table included in attached PDF)


CEO'S MESSAGE
Net sales rose 5% compared with the same period a year ago, mainly as a result of acquisitions. SCA's operating profit fell 7% compared with a year ago, to SEK 6,716m (7,256). The hygiene operations reported stronger sales as well as earnings, while a deterioration was noted for the Packaging and Forest Products operations.

The global financial crisis has accelerated the recession that we have felt the effects of since the start of the year. SCA has a secure share of committed long-term credit facilities to cover its financing needs in the years immediately ahead.

SCA's hygiene operations, which have become an increasingly important part of our portfolio, are affected to a lesser extent than the other product areas by an economic downturn. The Tissue operations have shown a strong improvement in sales and earnings compared with the preceding year (up 17 and 44%, respectively), as well as compared with previous quarters this year. We are working intensively on creating a better product mix in both the Away-From-Home segment, where the Tork brand is steadily gaining ground, and in the retail consumer segment, where our efforts have been focused on growing the share of branded products.

Sales and operating profit for the Personal Care operations are up compared with a year ago and the second quarter of this year. The autumn has been characterised by a higher level of campaign intensity than earlier in the year. SCA is acting with force in all segments and has maintained or strengthened its market positions. The important technological shift in the production of baby diapers, which will strengthen our product offering and our margins once it has been fully implemented, continues to weigh down earnings.

At SCA our packaging operations give us an early economic indicator, and packaging is also the business area in which SCA has seen a significantly weaker result compared with the previous year and quarter. Demand is lower, and the large inventories of liner held by producers continue to plague the industry. SCA is acting by cutting its testliner production by a total of 50,000 tonnes in October and November. During the autumn, prices for raw materials and energy have started to fall. Our Forest Products business is also exposed to swings in the economy to some extent, and the negative trend that we have seen in the sawmill operations continues.

We believe that our hygiene operations have continued favourable prospects for improved sales and earnings, while for our packaging and solid-wood operations, we expect sales and earnings to remain under pressure.

To further strengthen our competitiveness, we have sharpened our focus on cost-consciousness and cash flow in the Group.


Jan Johansson, President and CEO

For further information, please contact:

Bodil Eriksson, Corporate Communications, +46 8 788 52 34
Johan Karlsson, Investor Relations, +46 8 788 51 30
Pär Altan, Media Relations, +46 8 788 52 37


Note
SCA discloses the information provided herein pursuant to the Securities Markets Act. This report has been prepared in both Swedish and English. In case of variation in the content of the two versions, the Swedish version shall take precedence. The report has not been reviewed by the company’s auditors.

About Us

The core of SCA’s business is the forest, 2.6 million hectares in northern Sweden. Around this unique resource, we have built a well-developed value chain based on renewable raw material from our own and others’ forests. We offer paper for packaging and print, pulp, wood products, renewable energy, services for forest owners and efficient transport solutions. 2017 the forest products company SCA had approximately 4,000 employees and sales amounted to approximately SEK 1617 bn (EUR 1,6 bn). SCA was founded in 1929 and has its headquarters in Sundsvall, Sweden. More information at www.sca.com.

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