Handelsbanken Large Cap Seminar Magnus Groth, President and CEO

SCA – a Leading Global Hygiene and Forest Products Company

September 16, 2015

Handelsbanken Large Cap Seminar 2015

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Global Market Positions

September 16, 2015

Incontinence products:

1

AfH tissue:

1

Consumer tissue:

2

Baby diapers:

4

Feminine care:

5

Handelsbanken Large Cap Seminar 2015

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H1 2015 Net Sales by Business Area Net sales

Forest Products

Tissue

16%

30%

54%

Personal Care

September 16, 2015

Handelsbanken Large Cap Seminar 2015

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Market Drivers Good growth opportunities  Global population growth  An aging population  Increased market penetration

 Higher disposable income  Customers and consumers demand more comfort and sustainability

September 16, 2015

Handelsbanken Large Cap Seminar 2015

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Aging Population Total population over 60 years exceeding 1bn by 2020 Millions aged over 60 years old

1 200 +25% 1 000 800 600 400

+30%

+13%

200

+22%

0 Total world

Europe

2013 September 16, 2015

China

USA

2020 Handelsbanken Large Cap Seminar 2015

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Incontinence Products Prevalence of Incontinence % of world’s population affected by incontinence, 2013

20% 15% 10% 5% 0% 0-19 years

20-29 years

30-64 years

65+ years

Incontinence affects 4-8% of the world’s population, approximately 400 million people globally affected by incontinence Source: Data included in the graph has been obtained from the International Consultation on Incontinence 2013 September 16, 2015

Handelsbanken Large Cap Seminar 2015

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Usage of Hygiene Products High potential in markets with low penetration Incontinence Products

North America September 16, 2015

Baby Diapers

Western Europe

Feminine Care

Eastern Europe

Handelsbanken Large Cap Seminar 2015

Latin America

Tissue

Asia 8

Strategic Priorities PROFITABLE GROWTH

INNOVATION

EFFICIENCY

INCREASING EFFICIENCY IN THE ENTIRE VALUE CHAIN September 16, 2015

Handelsbanken Large Cap Seminar 2015

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Share of Sales Emerging Markets 2009

H1 2015

19%

33%

67% 81%

Emerging markets Mature markets

In H1 2015, the organic sales growth was 12% in emerging markets September 16, 2015

Handelsbanken Large Cap Seminar 2015

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Investment in Brazil Investment of approx. SEK 650m in a new production facility for incontinence products

Production start 2016 SCA is the second largest company in incontinence products Global leading brand TENA and local brand Biofral

Brazil is the world’s third largest retail market for incontinence products SCA Retail Market Share for Incontinence Products in Brazil 25% 20% 15% 10% 5% 0% 2011

September 16, 2015

2012

2013

2014

YTD May 2015 Handelsbanken Large Cap Seminar 2015

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Addressing low performing markets Brazil Exit baby diapers

Thailand Changed business model to export business

South Africa Divesting the baby diapers assets in a jointly owned subsidiary

September 16, 2015

Handelsbanken Large Cap Seminar 2015

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Investment in increased pulp capacity

 Investment of approx. SEK 7.8bn over a three-year period in increased capacity for pulp production in Sweden  Production start 2018  The annual production capacity of pulp will increase from about 430,000 tons to about 900,000 tons  Over time the investment will increase sales and competitiveness and create a world-class cost position and higher margins

September 16, 2015

Handelsbanken Large Cap Seminar 2015

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Enhancing the Organization Decision to divide the Group into two divisions, a Hygiene division and a Forest Products division Further intensify the focus on the Group’s two operations

As of January 1, 2017 the Forest Products division will expand its quarterly financial reporting

Enhancement of the hygiene organization to increase growth and the pace of innovation and further strengthen the competitiveness Effective as of January 1, 2016

September 16, 2015

Handelsbanken Large Cap Seminar 2015

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Innovations and Product launches Q2 2015 Personal Care TENA Lady Mini, Mini Wings, Mini Plus, Mini Plus Wings with DRYZone





New top sheet and embossing design for easy finding of the DRYZone

lights by TENA TENA Lady Range

 

Providing the same superior protection you know from TENA Lady September 16, 2015

New feminine design on the release paper on the back of the product, introducing assortment colors

TENA Flex Normal



Extending the TENA Flex range by adding a product with a lower absorption level

New individual wraps – soft and less noisy material with a new, more feminine design

Handelsbanken Large Cap Seminar 2015

TENA Stretch Super and Ultra Briefs, TENA Stretch Plus Brief

Ultra Towels Normal & Ultra Towels Normal with Wings

 

Specially designed for unexpected little leaks FeelFresh Technology™ locks in moisture and controls odor

  

Fully breathable stretch sides: promoting skin health and wearer comfort Multifunctional design: for easy toileting and promotion of restorative care Printed backsheet: for easier selection of the correct product, while the scannable barcode supports consumption tracking and inventory management 15

Innovations and Product launches Q2 2015 Tissue New Plenty Easy Clean Wipes

 

A unique refillable dispenser that helps you to clean effectively while keeping your wipes moist for longer Available in three different variants: Multi-purpose, Bathroom, Anti-bacterial September 16, 2015

SCA Household Towel Brands: Zewa, Plenty, Okay & Edet



Relaunch with a new on-pack power claim “Stays strong when wet”

Tork® Coreless High Capacity Bath Tissue Dispenser and Coreless High Capacity Bath Tissue Rolls

Tork Cleaning Cloths with ExelClean™

Helps customers improve efficiency and performance when completing wiping and cleaning tasks versus rags and rental cloths:  Uses 32% less time*  Uses 40% less solvent*  Uses 20% less effort *

   

High capacity, 2 coreless tissue rolls = 5 conventional tissue rolls. Refill less often. Coreless rolls – minimizes waste and saves cleaning time More compact – less storage space needed Available in black and white

*) Swerea research institute, Sweden, 2014

Handelsbanken Large Cap Seminar 2015

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Closure of tissue production plant in France

 Part of ongoing cost-savings program related to the acquisition of Georgia-Pacific’s European tissue operations  Production plant has annual tissue capacity of 35,000 tons  Production will be discontinued in October 2015

 Restructuring costs expected to amount to approx. SEK 480m

September 16, 2015

Handelsbanken Large Cap Seminar 2015

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Financial Targets Business areas Organic Sales Growth*

ROCE**

Personal Care

5-7%

30%

Tissue

3-4%

15%

in line with market

in top quartile

Forest Products

Group ROCE**

13%

Debt/Equity

0.70

Debt payment capacity

above 35%

Dividend policy

1/3 of cash flow from current operations

* Annual organic sales growth ** Return on capital employed September 16, 2015

Handelsbanken Large Cap Seminar 2015

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Group Q2 2015 vs. Q2 2014 Sales

Organic Sales Growth

Operating Profit*

SEK 29,219m +13%

+5%

SEK 3,217m +9%**

Operating Margin*

EPS

Operating Cash Flow

11.0% +30 bp***

SEK 2.80 +10%

SEK 2,925m +42%

* Excluding items affecting comparability ** Excluding items affecting comparability, gains on forest swaps of SEK 0m (175) before tax and currency translation effects *** Excluding items affecting comparability and gains on forest swaps of SEK 0m (175) before tax September 16, 2015

Handelsbanken Large Cap Seminar 2015

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Group Sales and Operating Profit Sales

Operating Profit*

SEKm

SEKm

120 000

15 000

80 000

10 000

40 000

5 000

0

0

2012

2013

2014

2012

2013

2014

* Excluding items affecting comparability September 16, 2015

Handelsbanken Large Cap Seminar 2015

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