Interim report Q2 2009

Interim report Q2 2009

1 JANUARY-30 JUNE 2009 (compared with corresponding period a year ago)


• Net sales rose 3% to SEK 56,242m (54,852)
• Profit before tax, excluding restructuring costs, was SEK 3,525m (3,649)	
• Restructuring costs in Packaging amounted to SEK 439m (0)
• Profit for the period, excluding restructuring costs, was SEK 2,608m (2,919)
• Earnings per share were SEK 3.24 (4.14) 
• Cash flow from current operations amounted to SEK 4,687m (695)


(Table included in attached pdf)


CEO'S COMMENTS
Net sales rose 3% compared with the same period a year ago, to SEK 56,242m.
Operating profit for the first half of the year, excluding restructuring costs,
was SEK 4,504m (4,670). Compared with the first quarter, operating profit
excluding restructuring costs improved by 11%, to SEK 2,368m. Currency effects
during the second quarter were marginal compared with the first quarter. Profit
before tax, excluding restructuring costs, grew to SEK 2,014m, an improvement of
33% compared with the first quarter. Return on capital employed, excluding
restructuring costs, was 8% for the first half of the year. 

Our focus on strengthening the Group's cash flow - among other things by
reducing working capital - continues to generate favourable results. Cash flow
from current operations during the first half of the year amounted to SEK
4,687m, an improvement of SEK 3,992m compared with a year ago.

Sales of Personal Care products rose 17% during the second quarter compared with
the same period a year ago. Following a relatively weak start of the year, sales
grew 3% over the first quarter, while operating profit improved by 16%.
Underlying this improvement is strong sales development in Europe, continued
favourable performance in our emerging markets, and lower raw material costs.
The operating margin strengthened compared with the first quarter and was 12.3%
for the second quarter. 

Net sales for the Tissue operations improved by 14% during the second quarter
compared with the same period a year ago, and operating profit by 76%. The
positive trend from the first quarter of the year has continued, and operating
profit rose 17% during the second quarter. The increase can be credited to the
strong performance of our AFH tissue business in the USA, continued strong
performance in the European market, improved profitability in Mexico and Central
America, and lower raw material and energy costs. This trend is particularly
gratifying, as price pressure has risen and is expected to remain during the
second half of the year. 

The European Packaging operation weakened further during the second quarter,
with continued weak demand and price pressure for corrugated board as well as
for testliner. Operating profit was SEK 11m before restructuring costs. Producer
inventories of liner have decreased significantly following cutbacks in
production and plant closures by the market players. However, additional
measures will be needed before supply and demand are in balance. 

In our Forest Products business, net sales rose 2% during the second quarter
compared with the same period a year ago, and operating profit improved by 16%.
Despite a challenging market for publication papers, the favourable earnings
trend from the first quarter continued, and operating profit rose 10% during the
second quarter. The improvement is mainly attributable to lower energy and raw
material costs. In the solid-wood products segment we are now seeing rising
prices as a result of an improved market balance.

We will encounter continued difficult market conditions for the packaging
operations during the second half of the year and therefore see a risk for an
earnings decline for this business. Our Forest Products business is feeling the
effects of price pressure for publication papers, while there is potential for
price increases for solid-wood products. The economy is also affecting our
hygiene business, mainly through a greater focus on price. However, we believe
that the effects of this, if any, will be limited. 
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