Capital structure and dividend policy for SCA’s hygiene business
SCA has decided on capital structure and dividend policy targets for the Group’s hygiene business.
The capital structure target for SCA’s hygiene business is to have an effective capital structure at the same time that the long-term access to debt financing is ensured. Cash flow in relation to net debt shall take into account the target to maintain a solid investment grade rating.
Dividend policy: SCA’s hygiene business aims to provide long-term stable and rising dividends to its shareholders. When cash flow from current operations exceeds what the company can invest in profitable expansion over the long term, and under the condition that the capital structure target is met, the surplus shall be distributed to the shareholders.
As per September 30, 2016, SCA’s net debt, including pension liabilities, amounted to SEK 40,281m, allocated pro forma as follows: SEK 35,281m attributed to the hygiene business and SEK 5,000m to the forest products business. The complete pro forma balance sheet and income statement for the hygiene business are included in this press release.
SCA's current lenders will be given the possibility to switch counterparty to SCA Hygiene AB, the Parent Company of SCA’s hygiene business or its subsidiaries. Due to this SCA informs that the company is currently participating in a process relating to a potential corporate acquisition. The process is still in an early phase but no decisions have been made. However, any potential acquisition by SCA will be made without prejudice of the capital structure targets. SCA will not provide any further information concerning this process.
| Pro forma Condensed Consolidated Balance Sheet September 30, 2016 |
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SEKm |
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| Non-current assets | |||
| Intangible assets | 26,447 | ||
| Buildings, land, machinery and equipment | 45,755 | ||
| Shares and participations | 1,067 | ||
| Financial and other non-current assets | 2,690 | ||
| Total non-current assets | 75,959 | ||
Current assets |
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| Inventories | 11,318 | ||
| Trade receivables and other current assets | 19,039 | ||
| Current financial assets, cash and cash equivalents | 5,820 | ||
| Total current assets | 36,177 | ||
| Total assets | 112,136 | ||
Equity |
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| Owners of the parent | 33,408 | ||
| Non-controlling interest | 6,172 | ||
| Total equity | 39,580 | ||
Non-current liabilities |
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| Non-current financial liabilities | 31,280 | ||
| Provisions for pensions | 8,450 | ||
| Other non-current liabilities | 4,433 | ||
| Total non-current liabilities | 44,163 | ||
Current liabilities |
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| Current financial liabilities | 2,219 | ||
| Other current liabilities | 26,174 | ||
| Total current liabilities | 28,393 | ||
| Total liabilities | 72,556 | ||
| Total equity and liabilities | 112,136 | ||
Pro forma Condensed Consolidated Income Statement January 1, 2016 - September 30, 2016 |
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SEKm |
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| Net sales | 74,465 | ||
| Cost of goods sold | -53,335 | ||
| Items affecting comparability | -484 | ||
| Gross profit | 20,646 | ||
| Sales, general and administration | -12,550 | ||
| Items affecting comparability | -1,654 | ||
| Share of profits of associates and joint ventures | 108 | ||
| Operating profit | 6,550 | ||
| Financial items | -570 | ||
| Profit before tax | 5,980 | ||
| Tax | -2,910 | ||
| Net profit for the period | 3,070 | ||
For additional information please contact:
Linda Nyberg, Vice President Media Relations, +46 (0)8 - 788 51 58
Johan Karlsson, Vice President Investor Relations, +46 (0)8 - 788 51 30
SCA is a leading global hygiene and forest products company. The Group develops and produces sustainable personal care, tissue and forest products. Sales are conducted in about 100 countries under many strong brands, including the leading global brands TENA and Tork, and regional brands, such as Libero, Libresse, Lotus, Nosotras, Saba, Tempo, Vinda and Zewa. As Europe’s largest private forest owner, SCA places considerable emphasis on sustainable forest management. The Group has about 44,000 employees. Sales in 2015 amounted to approximately SEK 115bn (EUR 12.3bn). SCA was founded in 1929, has its headquarters in Stockholm, Sweden, and is listed on NASDAQ OMX Stockholm. For more information, visit www.sca.com.