STOCKHOLM--(BUSINESS WIRE)--Regulatory News:
SCA (STO: SCAA) (STO:SCAB)
JANUARY 1 – SEPTEMBER 30, 2016 (compared with same period a year ago)
· Net sales totaled SEK 86,417m (86,276)
· Organic sales growth, which excludes exchange rate effects, acquisitions and divestments, was 2%
· Operating profit rose 22% to SEK 8,290m (6,796)
· Adjusted operating profit, excluding items affecting comparability, rose 8% to SEK 10,304m (9,560)
· The adjusted operating margin was 11.9% (11.1%)
· Adjusted profit before tax rose 9% to SEK 9,674m (8,864)
· Items affecting comparability totaled SEK -2,014m (-2,764), of which SEK -1,468m (-1,154) affects cash flow. Items affecting comparability include a provision of approximately SEK 1,075m related to ongoing anti-trust cases.
· Profit for the period was SEK 4,429m (4,545) · Earnings per share were SEK 5.94 (5.94)
· The adjusted return on capital employed was 12.5% (11.7%)
· Cash flow from current operations was SEK 7,593m (6,944)
· Work initiated to propose to the 2017 Annual General Meeting to decide on a split of the SCA Group into two listed companies: hygiene and forest products
Table included in attached pdf: http://mb.cision.com/Main/600/2109801/580943.pdf
Organic sales growth during the third quarter of 2016 was affected by a challenging market situation for hygiene products and capacity reductions. Adjusted operating profit, excluding currency translation effects, acquisitions and divestments, showed continued favorable growth, and the adjusted operating margin rose.
During the quarter, work was initiated to propose to the Annual General Meeting 2017 to decide on a split of the SCA Group into two listed companies: hygiene and forest products. Four innovations were launched during the quarter, in consumer tissue under the Tempo brand, in feminine care under the Nosotras brand, and in AfH tissue and incontinence products under the two globally leading brands Tork and TENA, respectively. During the quarter the decision was made to implement restructuring measures in the tissue production operation in France. The restructuring measures are aligned with the strategy to improve production efficiency in order to drive cost and capital efficiency and further increase value creation in the Tissue business area. As part of the work on addressing weak market positions with inadequate profitability, after the end of the quarter the decision was made to close the baby diaper business in Mexico.
During the quarter, the strategic framework was further developed. SCA’s vision is to be dedicated to improving well-being through leading hygiene and health solutions. Within SCA we have the knowledge, experience, products and solutions as well as the commitment to help improve hygiene standards worldwide. In September, in partnership with the UN’s Water Supply and Sanitation Collaborative Council, we launched the Hygiene Matters 2016/17 report, which focuses on taboos and stereotypes around incontinence and menstruation. The report is also closely coupled to the UN’s Sustainable Development Goals.
Consolidated net sales for the third quarter of 2016 were level with the same period a year ago. Organic sales growth was 0%. In emerging markets, which accounted for 31% of net sales, organic sales growth was 4%, while in mature markets it was -2%. For Personal Care, organic sales growth was 0%. Growth was negatively affected by the baby diaper operations, where organic sales growth was -7% mainly associated with lower sales in Russia, Latin America, the Middle East and Africa resulting from increased competition, among other things. For Tissue, organic sales growth was 1%. For Forest Products, organic sales growth was -3%, mainly owing to the closure of a publication paper machine during the fourth quarter of 2015.
The Group’s adjusted operating profit for the third quarter of 2016, excluding currency translation effects, acquisitions and divestments, rose 7% compared with the same period a year ago. The increase is mainly related to higher volumes, cost savings and lower raw material costs. The selling costs were higher, and investments were made in increased marketing activities. Exchange rate effects, mainly the weaker British pound, had a negative effect on earnings. The Group’s adjusted operating margin increased by 0.6 percentage points to 12.5%. Operating cash flow increased by 10%. The adjusted return on capital employed was level with the same period a year ago, at 12.8%.
NB This information is such that SCA is obligated to make public pursuant to the EU Market Abuse Regulation or the Swedish 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, at 08:00 CET on October 27, 2016. This interim report has not been reviewed by the company’s auditors. Karl Stoltz, Media Relations Manager, +46 8 788 51 55
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