Year-end Report 2015

JANUARY 1 – DECEMBER 31, 2015 (compared with same period a year ago)

  · Net sales rose 11% (5% excluding exchange rate effects) to SEK 115,316m
(104,054)
  · Organic sales growth, which excludes exchange rate effects, acquisitions and
divestments, was 5%
  · Operating profit, excluding items affecting comparability, rose 10% to SEK
13,014m (11,849)
  · The operating margin, excluding items affecting comparability, was 11.3%
(11.4%, 11.1% excluding gains on forest swaps)
  · Profit before tax, excluding items affecting comparability, rose 11% to SEK
12,059m (10,888)
  · Items affecting comparability totaled SEK -2,067m (-1,400), of which SEK
-874m (-906) affects cash flow
  · Earnings per share were SEK 9.97 (9.40)
  · Return on capital employed, excluding items affecting comparability, was
12.0% (11.2%)
  · Cash flow from current operations was SEK 9,890m (8,149)
  · The Board of Directors proposes an increase in the dividend by 9.5% to SEK
5.75 per share (5.25)
  · Decision to acquire Wausau Paper Corp. The acquisition was closed January
21, 2016

(Table included in attached pdf)

CEO’S COMMENTS
Organic sales growth was 5% for the full year 2015, and operating profit,
excluding items affecting comparability, rose 10% compared with 2014.
The Board of Directors proposes an increase in the dividend by 9.5%, to SEK 5.75
per share.
2015 was an eventful year. We continued the work with our strategic priorities
profitable growth, innovation and efficiency. Our successful innovation work
resulted in approximately thirty innovations and product launches and the
efficiency improvement measures continued with undiminished strength across the
value chain. To further intensify the focus on the Group’s two main operations,
we took the decision to initiate a dividing of the Group into two divisions: a
Hygiene division and a Forest Products division. During the year the decision
was made to further enhance SCA’s hygiene organization. This change took effect
on January 1, 2016. We decided to invest in increased capacity at the Östrand
pulp mill in Sweden and in a new production plant for incontinence products in
Brazil.
The acquisition of Wausau Paper Corp., a North American Away-from-Home tissue
company, is a good strategic fit and strengthens our presence in North America.
Wausau Paper’s product portfolio complements SCA’s offerings in North America
and gives us access to premium tissue in the region. In Asia we are
strengthening our collaboration with Vinda by divesting our business in
Southeast Asia, Taiwan and South Korea for integration with Vinda. SCA is the
majority shareholder in Vinda, one of China’s largest hygiene companies. The
transaction enables us to leverage our joint strengths to build a leading Asian
hygiene business.
We have also continued to address areas with weak profitability. Due to
declining global demand for publication papers and weak profitability, one
newsprint machine at Ortviken paper mill in Sweden was closed, and as a result
of weak market positions and insufficient profitability the baby diaper markets
in Brazil and South Africa have been left. As part of the cost-savings program
related to the acquisition of Georgia-Pacific’s European tissue operations,
during the year we closed a tissue production plant in France. The program was
concluded at year-end, but we continue to see opportunities for efficiency
improvement measures.
Consolidated net sales for the fourth quarter of 2015 increased by 6% compared
with the same period a year ago. Organic sales growth was 4%. In emerging
markets, which accounted for 32% of sales, organic sales growth was 11%, and in
mature markets organic sales growth was 2%.
Consolidated operating profit for the fourth quarter of 2015, excluding items
affecting comparability and currency translation effects, rose 5% compared with
the same period a year ago. The increase is mainly attributable to a better
price/mix, higher volumes and cost savings. Raw material costs increased by SEK
529m, mainly due to the stronger U.S. dollar. The operating margin, excluding
items affecting comparability, was unchanged at 11.9%. Operating cash flow
increased by 1%. Return on capital employed, excluding items affecting
comparability, grew by 1.1 percentage points to 13.1%.


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


NB
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 January 28, 2016. This report
has not been reviewed by the company’s auditors.