SVENSKA CELLULOSA AKTIEBOLAGET SCA 
Q42020
October-December 2020 compared with July-September 2020
- Net sales increased 6% to SEK 4,592m (4,338), mainly related to higher delivery volumes
- Adjusted EBITDA1 increased to SEK 1,377m (1,032) and the EBITDA margin1 increased to 30.0% (23.8)
- Operating cash flow amounted to SEK 957m (1,118)
January-December 2020 compared with January-December 2019
- Net sales declined 6% to SEK 18,410m (19,591). The fall in sales was mainly related to lower selling prices, which was partly offset by higher delivery volumes.
- EBITDA amounted to SEK 3,393m (21,361). The difference was mainly related to two material one-off items, a negative earnings impact from the discontinuation of publication paper operations in 2020 of SEK -1,047m (see page 6) and a positive earnings impact of approximately SEK 16bn from the changed accounting method for valuation of forest assets in 2019.
- Adjusted EBITDA1 was SEK 4,440m (5,319), corresponding to an EBITDA margin of 24.1% (27.2). The decrease was mainly due to lower selling prices.
- Operating profit amounted to SEK 1,145m (19,665). The difference was mainly due to one-off items from the discontinuation of publication paper operations in 2020 of SEK -1,694m (see page 6) and the changed accounting method for forest assets of approximately SEK 16bn in 2019.
- Operating cash flow amounted to SEK 2,688m (2,916)
- Earnings per share was SEK 1.09 (22.10). Adjusted earnings1 per share amounted to SEK 3.19 (4.05).
- The Board of Directors proposes a dividend of SEK 2.00 (0.00) per share
Reported result | Quarter | Jan-Dec | |||||||||||
SEKm | 2020:4 | 2019:4 | % | 2020:3 | % | 2020 | 2019 | % | |||||
Net sales | 4,592 | 4,312 | 7 | 4,338 | 6 | 18,410 | 19,591 | -6 | |||||
EBITDA | 1,451 | 17,098 | -92 | -88 | n.a. | 3,393 | 21,361 | -84 | |||||
Operating profit | 1,084 | 16,600 | -93 | -1,167 | n.a. | 1,145 | 19,665 | -94 | |||||
Net Profit | 783 | 13,153 | -94 | -958 | n.a. | 767 | 15,522 | -95 | |||||
Earnings per share SEK | 1.11 | 18.73 | -1.36 | 1.09 | 22.10 | ||||||||
Operating cash flow | 957 | 582 | 1,118 | 2,688 | 2,916 | ||||||||
Adjusted result 1 | Quarter | Jan-Dec | |||||||||||
SEKm | 2020:4 | 2019:4 | % | 2020:3 | % | 2020 | 2019 | % | |||||
Net sales | 4,592 | 4,312 | 7 | 4,338 | 6 | 18,410 | 19,591 | -6 | |||||
EBITDA | 1,377 | 1,055 | 31 | 1,032 | 33 | 4,440 | 5,319 | -17 | |||||
EBITDA margin (%) | 30.0 | 24.5 | 23.8 | 24.1 | 27.2 | ||||||||
Operating profit | 986 | 637 | 55 | 624 | 58 | 2,839 | 3,703 | -23 | |||||
Net Profit | 821 | 478 | 72 | 475 | 73 | 2,239 | 2,847 | -21 | |||||
Earnings per share SEK | 1.17 | 0.68 | 0.68 | 3.19 | 4.05 | ||||||||
Net Debt / EBITDA (LTM) | 1.7x | 1.6x | 2.0x | 1.7x | 1.6x |
1 Excluding the effect of one-off items related to the discontinuation of publication paper operations in the third and fourth quarters of 2020 (see page 6) and the impact of the changed accounting method for the valuation of forest assets in the fourth quarter of 2019
SVENSKA CELLULOSA AKTIEBOLAGET SCA (publ), Skepparplatsen 1, 851 88 SUNDSVALL. www.sca.com. Corp. Reg. No. 556012-6293
S C A Y e a r - e n d r e p o r t - J a n u a r y 1 - D e c e m b e r 3 1 , 2 0 2 0 | 2 |
COMMENTS ON THE FINANCIAL STATEMENTS
2020 was a year marked to a large extent by COVID-19 and its impact on people, society and the market. Health and safety have always been a top priority and SCA has taken a number of measures to protect risk groups, reduce the spread of the virus and to ensure that production, sales and distribution have been maintained with continued focus on pursuing profitable growth.
During the year, SCA decided to discontinue the publication paper operations consisting of three paper machines at the Ortviken industrial site. These will be shut down sequentially during the first quarter of 2021 and when the closure is completed, SCA will only have operations in expanding product categories with healthy future prospects. SCA has also decided to invest SEK 1.45bn in an annual production of 300,000 tonnes of CTMP (chemically pre-treated thermomechanical pulp) at the Ortviken industrial site, where part of the existing infrastructure will be used. The kraftliner expansion project at Obbola is progressing on plan and on budget.
Following a period with a weaker market, falling prices and rising inventory levels during the first half of 2020, the market has gradually improved for all product categories except publication paper, which continued to weaken. SCA's focus has been to decrease working capital in an uncertain environment. This has resulted in a strong operating cash flow in the third and fourth quarters of 2020 which has contributed to a reduced net debt at the end of the year (see page 4).
Based on the forest survey conducted in 2019, a new harvesting plan has been made during the year which shows that SCA can gradually increase planned annual harvesting from the previous level of 4.3 million m3fo to 5.4 million m3fo in 2025, an increase of 25%. During the year, SCA continued to acquire forest in the Baltic states.
The year and the fourth quarter were impacted by material one-off items related to the discontinuation of publication paper operations (see page 6). Adjusted earnings1 in the fourth quarter improved compared with the preceding quarter and the year-earlier quarter. A higher share of harvesting from SCA-owned forest and higher earnings from the revaluation of biological assets due to the new forest survey and harvesting plan had a positive impact on earnings.
The supply of wood to SCA's industries was stable during the quarter. The price of sawlogs remained stable while the price of pulpwood fell slightly.
The market for solid-wood products remained strong during the quarter, driven by high demand in the building materials trade in the US, Scandinavia, UK and the rest of Northern Europe. Market prices increased compared with the preceding period.
Delivery volumes in the Pulp segment increased compared with the preceding quarter. A planned maintenance stop took place during the quarter. Following the restart, production has been stable and at planned level.
The average selling price for kraftliner was lower than in the preceding quarter. Demand increased during the fourth quarter and inventory levels decreased. In connection with the discontinuation of publication paper operations, focus in this product area has been to bring forward publication paper production ahead of the closure and to minimize costs.
Higher transaction prices for forest assets in northern Sweden
SCA bases its valuation of forest assets in Sweden on forest transactions in the areas where SCA owns forest. The market value of the forest has increased during 2020. The average market price used in the valuation of SCA's forest assets was SEK 291/m3fo at December 31, 2020, corresponding to a carrying amount of SEK 74.9bn (see page 5).
1 Excluding the effect of one-off items related to the discontinuation of publication paper operations in the third and fourth quarters of 2020 (see page 6) and the impact of the changed accounting method for the valuation of forest assets in the fourth quarter of 2019
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S C A Y e a r - e n d r e p o r t - J a n u a r y 1 - D e c e m b e r 3 1 , 2 0 2 0 | 3 |
Net sales
SEKm
5,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
2019:4 | 2020:1 | 2020:2 | 2020:3 | 2020:4 |
EBITDA & margin | % | |||
SEKm | ||||
1,400 | 35 | |||
1,200 | 30 | |||
1,000 | 25 | |||
800 | 20 | |||
600 | 15 | |||
400 | 10 | |||
200 | 5 | |||
0 | 0 | |||
2019:4 | 2020:1 | 2020:2 | 2020:3 | 2020:4 |
Note: EBITDA 2020:3 and 2020:4 excluding the discontinuation of publication paper and 2019:4 excluding the impact of the changed accounting method for the valuation of forest assets
Change in net sales (%)
2012 | 2020:4 | 2020:4 | |
vs | vs | vs | |
1912 | 2019:4 | 2020:3 | |
Total | -6 | 7 | 6 |
Price/mix | -8 | -3 | -1 |
Volume | 2 | 13 | 9 |
Currency | 1 | -2 | -1 |
Acquistion 0 0 0
Divestment -1-1-1
GROUP
SALES AND OPERATING PROFIT
January-December 2020 compared with January-December 2019
Net sales amounted to SEK 18,410m (19,591), a decrease of 6%, of which price/mix accounted for -8%, volume for 2%, currency for 1% and divestments for -1%. The decrease was mainly related to lower selling prices in all segments and lower delivery volumes in publication paper, which were offset by higher delivery volumes in other product categories.
EBITDA decreased to SEK 3,393m (21,361), mainly related to two material one-off items, a negative earnings impact from the discontinuation of publication paper operations of SEK -1,047m (see page 6) and a positive earnings impact of approximately SEK 16bn from the changed accounting method for the valuation of forest assets in 2019.
Adjusted EBITDA1 amounted to SEK 4,440m (5,319), corresponding to an EBITDA margin of 24.1% (27.2). The decline was primarily due to lower selling prices in all segments and lower delivery volumes for publication paper, offset by a higher share of harvesting from SCA-owned forest, higher earnings from the revaluation of biological assets and lower raw material costs. The cost of planned maintenance stops amounted to SEK 260m (248).
Adjusted operating profit1 amounted to SEK 2,839m (3,703).
October-December 2020 compared with October-December 2019
Net sales increased 7%, of which volume accounted for 13%, price/mix for -3%, currency for -2% and divestments for -1%, and amounted to SEK 4,592m (4,312). The increase was mainly attributable to higher delivery volumes of pulp and kraftliner and better sales in segment Wood. Lower selling prices for kraftliner and publication paper and negative exchange rate effects had an adverse impact on net sales.
Adjusted EBITDA1 increased to SEK 1,377m (1,055), corresponding to an EBITDA margin of 30.0% (24.5). The increase was mainly attributable to a higher revaluation of biological assets, lower raw material costs and lower costs for planned maintenance stops of SEK 130m (185). Lower selling prices for kraftliner and publication paper and lower delivery volumes in publication paper had an adverse impact on earnings.
Adjusted operating profit1 amounted to SEK 986m (637).
October-December 2020 compared with July-September 2020
Net sales increased 6%, of which volume accounted for 9%, price/mix for -1%, currency for -1% and divestments for -1%, and amounted to SEK 4,592m (4,338). The increase was mainly attributable to higher delivery volumes in kraftliner and pulp, which was offset by the divestment of Wood Supply UK that had an adverse impact on net sales.
Adjusted EBITDA1, excluding the effect of one-off items related to the discontinuation of publication paper operations, increased to SEK 1,377m (1,032), corresponding to an EBITDA margin of 30.0% (23.8). The increase was mainly explained by a higher share of harvesting from SCA-owned forest and higher earnings from the revaluation of biological assets, which was offset by higher costs for planned maintenance stops of SEK 130m (62). An unscheduled production stop at Östrand in July had a negative impact on earnings in the third quarter.
Adjusted operating profit1 amounted to SEK 986m (624).
One-off items related to the discontinuation of publication paper were adjusted down during the fourth quarter, following the completion of negotiations, with SEK 73m on EBITDA and SEK 97m on operating profit (see page 6).
1 Excluding the effect of one-off items related to the discontinuation of publication paper operations in the third and fourth quarters of 2020 (see page 6) and the impact of the changed accounting method for the valuation of forest assets in the fourth quarter of 2019
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S C A Y e a r - e n d r e p o r t - J a n u a r y 1 - D e c e m b e r 3 1 , 2 0 2 0 | 4 |
Operating cash flow
SEKm 1,200
1,000
800
600
400
200
0
2019:4 2020:1 2020:2 2020:3 2020:4
CASH FLOW
January-December 2020 compared with January-December 2019
The operating cash surplus amounted to SEK 2,792m (4,382). The cash flow effect of changes in working capital was SEK 1,131m (-186). Current capital expenditures, net, totaled SEK -1,224m(-1,132). Operating cash flow was SEK 2,688m (2,916) (see page 22).
Strategic capital expenditures during the year mainly relate to the expansion of Obbola and amounted to SEK -1,414m(-1,256). The cash flow effect of acquisitions amounted to SEK -462m(-1,115) and of divestments to SEK 63m (370). Cash flow for the period was SEK 830m (-209) (see page 16).
FINANCING
At December 31, 2020, net debt totaled SEK 7,671m, a decrease during the quarter of SEK 623m. The decrease in net debt was mainly related to the strong cash flow during the period. Net debt in relation to adjusted EBITDA1 amounted to 1.7x compared with 1.6x in the year-earlier period.
At December 31, 2020, gross debt amounted to SEK 10,354m, with an average maturity of 4.5 years (including the lease liability). The loan structure consists of bonds and bilateral bank loans. The lease liability amounted to SEK 751m, a decrease by SEK 41m compared with the preceding quarter. Unutilized credit facilities amounted to SEK 8,918m. Cash and cash equivalents amounted to SEK 1,273m at the end of the period, a decrease of SEK 1,033m during the quarter. In the January-December 2020 period, financial items totaled SEK -117m compared with SEK -126m in the year-earlier period.
During the quarter, a first step was taken to integrate financing into the Group sustainability agenda. As of December 2020, SCA's credit facilities are linked to the Group sustainability targets.
TAX
January-December 2020 compared with January-December 2019
The Group's tax amounted to SEK 261m (4,017). One-off items related to the discontinuation of publication paper operations resulted in a provision for deferred tax of SEK 223m.
EQUITY
January-December 2020
Total consolidated equity increased by SEK 3,653m during the period, to SEK 72,163m at December 31, 2020. Equity increased due to comprehensive income for the period of SEK 3,639m and other items of SEK 14m.
CURRENCY EXPOSURE AND CURRENCY HEDGING
SCA has a large proportion of exports, and about 85% of sales are priced in currencies other than SEK, primarily EUR, USD and GBP. Most purchasing is conducted in SEK. SCA's currency exposure and currency management are described on page 68 in the 2019 Annual Report.
The company has hedged about 60% of the expected EUR net exposure from sales minus purchases until the end of the second quarter of 2021, as well as approximately 30% for the third quarter of 2021 and 10% for the fourth quarter 2021, at the average EUR/SEK exchange rate of
- The company has hedged about 60% of the expected USD net exposure from sales minus purchases until the end of the second quarter of 2021, as well as approximately 30% for the third quarter of 2021 and 10% for the fourth quarter 2021, at the average USD/SEK exchange rate of
1 Excluding the effect of one-off items related to the discontinuation of publication paper operations in the third and fourth quarters of 2020 (see page 6) and the impact of the changed accounting method for the valuation of forest assets in the fourth quarter of 2019
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S C A Y e a r - e n d r e p o r t - J a n u a r y 1 - D e c e m b e r 3 1 , 2 0 2 0 | 5 |
PLANNED MAINTENANCE STOPS
A planned maintenance stop at the pulp mill in Östrand was conducted during the fourth quarter of 2020, which started at the end of the third quarter.
The estimated effect of the planned maintenance stops on earnings, calculated as the total of the direct cost of the maintenance and the effect from lower fixed cost coverage from reduced production during the stops, is shown in the table below.
Actual 2019 | |||||
SEKm | 2019:1 | 2019:2 | 2019:3 | 2019:4 | Total |
Pulp | 0 | 0 | 0 | 138 | 138 |
Paper | 0 | 63 | 0 | 47 | 110 |
Total | 0 | 63 | 0 | 185 | 248 |
Actual 2020 | |||||
SEKm | 2020:1 | 2020:2 | 2020:3 | 2020:4 | Total |
Pulp | 0 | 0 | 20 | 130 | 150 |
Paper | 0 | 68 | 42 | 0 | 110 |
Total | 0 | 68 | 62 | 130 | 260 |
Forecast 2021 | |||||
SEKm | 2021:1 | 2021:2 | 2021:3 | 2021:4 | Total |
Pulp | 0 | 0 | 20 | 130 | 150 |
Paper | 0 | 0 | 150 | 0 | 150 |
Total | 0 | 0 | 170 | 130 | 300 |
COVID-19
Health and safety are always a top priority at SCA, which is also the case during this challenging time. So far, there has been limited impact on production and deliveries of SCA's products, which include the delivery of important input goods to hygiene products and packaging for food and medicines. The company is actively working to monitor inventory levels, secure the delivery and distribution chain and to secure cash flow. The main negative impact from COVID-19 was felt in the publication paper product category.
There remains significant uncertainty which may impact SCA's future earnings.
KEY EVENTS
Higher transaction prices for forest assets in northern Sweden
SCA has based its valuation of forest assets in Sweden on forest transactions in the areas where SCA owns forest. The market value of the forest has increased during 2020. The average market price used in valuation of SCA's forest assets was SEK 291/m3fo at December 31, 2020. Applied to SCA's standing timber volume of 257 million m3fo at December 31, 2020 (including approximately
3.2 million m3fo net growth during the year), the carrying amount of SCA's forest assets was SEK
74.9bn at the end of the year. In 2019, the market price amounted to SEK 276/m3fo and the carrying amount was SEK 69.7bn (see page 18, Note 3).
A summary of the value of SCA's forest assets is shown in the table below.
Dec 31, 2020 | Dec 31, 2019 | ||
Market price - weighted three year average (SEK/m3fo) | 291 | 276 | |
Standing volume in Sweden (million m3fo) | |||
252 | 249 | ||
Standing volume in the Baltics (million m3fo) | 5 | 3 | |
Standing volume (million m3fo) | 257 | 252 | |
Forest assets in Sweden (SEKm) | 73,387 | 68,723 | |
Forest assets in the Baltics (SEKm) | 1,513 | 959 | |
Forest assets (SEKm) | 74,900 | 69,682 |
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S C A Y e a r - e n d r e p o r t - J a n u a r y 1 - D e c e m b e r 3 1 , 2 0 2 0 | 6 |
SCA acquires forest in the Baltic states
SCA acquired forest in Latvia during the fourth quarter. The acquisition comprises a land area of approximately 19,150 hectares, of which approximately 13,100 hectares is forest land. The acquisition strengthens SCA's opportunities to source timber in the region in the long term. The purchase price was approximately SEK 450m. At the end of the year, SCA's forest holding in the Baltic states amounted to just over 40,000 hectares.
SCA divests Wood Supply UK
During the fourth quarter, SCA divested Wood Supply UK, which manufactures and distributes wood and wood-based products for the building materials trade in the UK. SCA will retain its organization for the sale of solid-wood products to industrial customers in the UK. The sale is expected to reduce the SCA Group's net sales by about SEK 1,400m per year and EBITDA by approximately SEK 25m per year. Net debt decreased by approximately SEK 150m due to the transaction.
SCA establishes Group sustainability targets
Sustainability is integrated into every part of SCA's operations, which are climate positive. To further drive development, the company has adopted Group targets in the areas that are particularly important and where SCA can provide a crucial contribution towards sustainable development. The targets were launched at SCA's capital market day on December 3, 2020, and are to be met by 2030. A more detailed description of the targets and applicable interim targets will be presented in the 2020 Annual Report.
SCA discontinues publication paper manufacturing
SCA resolved in September to discontinue the publication paper operations consisting of three paper machines at the Ortviken industrial site with annual sales of approximately SEK 4bn. The publication paper market has reduced successively for many years and has had an accelerated negative trend since the outbreak of COVID-19. About 800 employees are affected, primarily at the Ortviken paper mill but also in other parts of SCA's operations. The paper machines are to close sequentially during the first quarter of 2021.
A summary of the one-off items primarily related to the discontinuation of publication paper operations during the third quarter, when the decision was taken, and the fourth quarter, following completed negotiations, is shown in the table below. One-off items are recognized in the segment Other.
SEKm
Provisions due to restructuring costs1,2
Impairment of working capital
Other
Effect on EBITDA
Impairment of fixed assets
Effect on operating profit
Quarter | |
2020:4 | 2020:3 |
114 | -870 |
-22 | -870 |
-19 | |
73 | -1,120 |
24 | -671 |
97 | -1,792 |
Full year
2020 |
-756 |
-272 |
-19
-1,047
-647
-1,694
- With impact on future cash flows
- See note 4, Other provisions
As of January 1, 2021, the Paper segment encompasses kraftliner only and will change name to the Containerboard segment. A summary of financial data for Containerboard can be found on page 23, Note 10. Publication paper operations are recognized in the first quarter of 2021 in the segment Other and are subsequently assumed to be discontinued.
SCA invests in increased pulp capacity
SCA will invest SEK 1.45bn in the production of chemically pre-treated thermomechanical pulp (CTMP) to achieve an annual production volume of 300,000 tonnes of CTMP pulp at the Ortviken industrial site, where existing infrastructure will be used. The investment will begin in 2021 and production is expected to start in the new facility at the beginning of 2023. Currently, SCA has a capacity of 100,000 tonnes of CTMP at the Östrand pulp mill. This production will be phased out when the new facility begins operation.
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S C A Y e a r - e n d r e p o r t - J a n u a r y 1 - D e c e m b e r 3 1 , 2 0 2 0 | 7 |
Share of net sales
Jan-Dec 2020*
26%
* before elimination of Intra-Group sales
Share of EBITDA
Jan-Dec 2020**
47%
- share calculated of total EBITDA excluding central costs
Net sales
SEKm
2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
2019:4 2020:1 2020:2 2020:3 2020:4
FOREST
SCA owns 2.6 million hectares of forest land in Northern Sweden and the Baltic region, an area corresponding to 6% of Sweden's land area. SCA's unique forest holding is a growing resource that provides access to high-quality forest raw materials while absorbing a net of more than 10% of Sweden's fossil CO2 emissions.
Quarter | Jan-Dec | ||||||||||
SEKm | 2020:4 | 2019:4 | % 2020:3 | % | 2020 | 2019 | % | ||||
Net sales | 1,659 | 1,694 | -2 | 1,500 | 11 | 6,486 | 6,956 | -7 | |||
EBITDA | 747 | 607 | 23 | 515 | 45 | 2,213 | 1,740 | 27 | |||
Depreciation | -58 | -58 | 0 | -61 | -5 | -226 | -212 | 7 | |||
Operating profit | 689 | 549 | 26 | 454 | 52 | 1,987 | 1,528 | 30 | |||
EBITDA margin, % | 45.0 | 35.8 | 34.3 | 34.1 | 25.0 | ||||||
Operating margin, % | 41.5 | 32.4 | 30.3 | 30.6 | 22.0 | ||||||
Return on capital employed, % | 6.2 | 5.2 | 4.2 | 3.4 | 4.4 | ||||||
Harvesting of own forest, thousand m3 sub | 1,629 | 1,230 | 32 | 1,147 | 42 | 4,818 | 4,419 | 9 | |||
Revaluation of biological assets1 | 383 | 223 | 72 | 308 | 24 | 1,262 | 717 | 76 | |||
1 Excluding items affecting comparability
Management of SCA-owned forest
The Forest segment includes net sales from timber sourced from SCA's own forests, and from timber purchased from other forest owners, which is sold internally to SCA's forest industry operations. The pricing is set based on an average of Forest's externally sourced timber prices.
In 2020, the volume of timber harvested from SCA-owned forest was about 4.8 million m3sub. The current planned level of timber harvested in SCA-owned forest is expected to gradually increase from the previous level of approximately 4.3 million m3sub in 2020 to approximately 5.4 million m3sub in 2025.
Revaluation of forest assets
SCA changed the method for the valuation of forest assets on December 31, 2019 (see page 18, Note 3). According to the new method, the revaluation is determined by the annual increase in standing volume (net growth) and the market price of forest land.
EBITDA & margin
SEKm |
750 |
600 |
January-December 2020 compared with January-December 2019
-
Net sales declined 7% to SEK 6,486m (6,956), mainly related to lower selling prices and lower
75 delivery volumes to SCA's industries primarily due to a weak publication paper market.
60 EBITDA improved 27% to SEK 2,213m (1,740). The increase is mainly explained by higher earnings
450 |
300 |
45
30
from the revaluation of biological assets due to the increased net growth according to the new forest survey.
EBITDA margin increased to 34.1% (25.0), mainly related to higher earnings from the revaluation of
150 | ||||
0 | ||||
2019:4 | 2020:1 | 2020:2 | 2020:3 | 2020:4 |
15 biological assets.
0
October-December 2020 compared with October-December 2019
Net sales decreased 2% to SEK 1,659m (1,694). The decrease was mainly related to lower selling prices.
EBITDA amounted to SEK 747m (607), an increase of 23%. Increased harvesting from SCA-owned forest and higher earnings from the revaluation of biological assets had a positive impact on earnings, which was offset by lower selling prices.
October-December 2020 compared with July-September 2020
Net sales increased 11% to SEK 1,659m (1,500), mainly related to higher delivery volumes to SCA's industries.
EBITDA amounted to SEK 747m (515), an increase of 45%. Seasonally increased harvesting from SCA-owned forest and higher earnings from the revaluation of biological assets had a positive impact on earnings.
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S C A Y e a r - e n d r e p o r t - J a n u a r y 1 - D e c e m b e r 3 1 , 2 0 2 0 | 8 |
Share of net sales
Jan-Dec 2020*
25%
* before elimination of Intra-Group sales
Share of EBITDA
Jan-Dec 2020**
14%
WOOD
SCA is one of Europe's leading suppliers of wood-based products for the wood industry and building materials trade, with an annual production capacity of 2.2 m3 of solid-wood products. SCA has five cost-efficient sawmills located close to its forest holdings in Northern Sweden, as well as wood processing and distribution to the building materials trade in Scandinavia and France.
Quarter | Jan-Dec | |||||||||
SEKm | 2020:4 | 2019:4 | % | 2020:3 | % | 2020 | 2019 | % | ||
Net sales | 1,498 | 1,376 | 9 | 1,592 | -6 | 6,296 | 6,325 | |||
EBITDA | 227 | 125 | 82 | 192 | 19 | 657 | 789 | -1 | ||
Depreciation | -59 | -76 | -22 | -62 | -5 | -249 | -278 | -1 | ||
Operating profit | 168 | 49 | 243 | 130 | 29 | 407 | 511 | -2 | ||
EBITDA margin, % | 15.2 | 9.1 | 12.1 | 10.4 | 12.5 | |||||
Operating margin, % | 11.2 | 3.6 | 8.2 | 6.5 | 8.1 | |||||
Return on capital employed, % | 21.1 | 6.0 | 17.0 | 11.8 | 14.6 | |||||
Deliveries, wood products, thousand m3 | 610 | 578 | 6 | 624 | -2 | 2,553 | 2,506 |
- share calculated of total EBITDA excluding central costs
Net sales
January-December 2020 compared with January-December 2019
Net sales were in line with the year-earlier period and amounted to SEK 6,296m (6,325). Higher delivery volumes had a positive effect on net sales. The merger with Groupe ISB during the first quarter of 2019 and divestment of Wood Supply UK during the fourth quarter of 2020 had a negative effect on net sales.
SEKm 1,800 1,600 1,400 1,200 1,000 800 600 400 200
0
EBITDA decreased to SEK 657m (789), which was mainly attributable to one-off items in SCA Wood France totaling SEK 0m (90), which increased earnings during the first quarter of 2019.
October-December 2020 compared with October-December 2019
Net sales rose 9% to SEK 1,498m (1,376). This increase was primarily attributable to better sales in the building materials trade, which were offset by negative exchange rate effects.
EBITDA amounted to SEK 227m (125), an increase of 82%. This increase was primarily related to stronger earnings in the building materials trade.
2019:4 2020:1 2020:2 2020:3 2020:4
October-December 2020 compared with July-September 2020
EBITDA & margin
SEKm | ||||
300 | ||||
250 | ||||
200 | ||||
150 | ||||
100 | ||||
50 | ||||
0 | ||||
2019:4 | 2020:1 | 2020:2 | 2020:3 | 2020:4 |
Net sales decreased 6% to SEK 1,498m (1,592). The decrease was primarily attributable to the divestment of Wood Supply UK that had a negative effect on net sales, which was somewhat offset
- by higher selling prices.
18
15 EBITDA amounted to SEK 227m (192), an increase of 19%. This increase was primarily attributable
to higher selling prices.
12
9
6
3
0
SVENSKA CELLULOSA AKTIEBOLAGET SCA (publ), Skepparplatsen 1, 851 88 SUNDSVALL. www.sca.com. Corp. Reg. No. 556012-6293
S C A Y e a r - e n d r e p o r t - J a n u a r y 1 - D e c e m b e r 3 1 , 2 0 2 0 | 9 |
Share of net sales
Jan-Dec 2020*
18%
* before elimination of Intra-Group sales
Share of EBITDA
Jan-Dec 2020**
13%
PULP
SCA produces market pulp at Östrand pulp mill. Östrand is one of the largest and most cost-efficient production lines for softwood kraft pulp in the world. Together with thermomechanical pulp production, Östrand's annual capacity amounts to 1 million tonnes. SCA's pulp has high-strength properties, suitable for tissue and specialty paper.
Quarter | Jan-Dec | |||||||||
SEKm | 2020:4 | 2019:4 | % | 2020:3 | % | 2020 | 2019 | % | ||
Net sales | 1,166 | 900 | 30 | 986 | 18 | 4,431 | 4,377 | 1 | ||
EBITDA | 109 | 20 | 445 | 137 | -20 | 614 | 983 | -38 | ||
Depreciation | -140 | -128 | 9 | -135 | 4 | -540 | -530 | 2 | ||
Operating profit | -31 | -109 | -72 | 2 | 1,650 | 73 | 453 | -84 | ||
EBITDA margin, % | 9.3 | 2.2 | 13.9 | 13.8 | 22.5 | |||||
Operating margin, % | -2.7 | -12.1 | 0.2 | 1.6 | 10.3 | |||||
Return on capital employed, % | -2.2 | -4.7 | 0.2 | 0.8 | 4.9 | |||||
Deliveries, pulp, thousand tonnes | 223 | 167 | 34 | 189 | 18 | 839 | 741 | 13 |
- share calculated of total EBITDA excluding central costs
Net sales
SEKm 1,400
1,200
1,000
800
600
400
200
0
2019:4 2020:1 2020:2 2020:3 2020:4
EBITDA & margin
SEKm | % | |||
200 | 20 | |||
150 | 15 | |||
100 | 10 | |||
50 | 5 | |||
0 | 0 | |||
2019:4 | 2020:1 | 2020:2 | 2020:3 | 2020:4 |
January-December 2020 compared with January-December 2019
Net sales rose 1% to SEK 4,431m (4,377). This increase was primarily attributable to higher delivery volumes due to the ramp-up of the expanded pulp mill, which was offset by lower selling prices.
EBITDA declined 38% to SEK 614m (983), which was mainly attributable to lower selling prices. Lower raw material costs and higher delivery volumes had a positive impact on earnings. The cost of planned maintenance stops amounted to SEK 150m (138).
October-December 2020 compared with October-December 2019
Net sales increased 30% to SEK 1,166m (900). The increase was attributable to higher delivery volumes.
EBITDA improved to SEK 109m (20). The increase was mainly due to lower raw material costs, which were offset by negative exchange rate effects. The cost of planned maintenance stops amounted to SEK 130m (138).
October-December 2020 compared with July-September 2020
Net sales increased 18% to SEK 1,166m (986). The increase was attributable to higher delivery volumes. Market prices increased during the quarter but were offset by negative exchange rate effects.
EBITDA decreased to SEK 109m (137). The decrease was primarily caused by higher costs for planned maintenance stops of SEK 130m (20). An unscheduled production stoppage at Östrand in July had a negative impact on earnings for the comparative period.
SVENSKA CELLULOSA AKTIEBOLAGET SCA (publ), Skepparplatsen 1, 851 88 SUNDSVALL. www.sca.com. Corp. Reg. No. 556012-6293
S C A Y e a r - e n d r e p o r t - J a n u a r y 1 - D e c e m b e r 3 1 , 2 0 2 0 | 1 0 |
Share of net sales
Jan-Dec 2020*
31%
* before elimination of Intra-Group sales
Share of EBITDA
Jan-Dec 2020**
26%
PAPER
SCA produces kraftliner - paper for corrugated transport packaging - and publication paper for magazines, catalogs and commercial print. SCA is Europe's largest independent producer of kraftliner, with a total capacity of 865,000 tonnes per year. Kraftliner is produced at the paper mills in Munksund, Piteå, and in Obbola, Umeå. Publication paper is produced at the Ortviken paper mill in Sundsvall, a business that is being discontinued during the first quarter of 2021.
Quarter | Jan-Dec | |||||||||
SEKm | 2020:4 | 2019:4 | % | 2020:3 | % | 2020 | 2019 | % | ||
Net sales | 1,981 | 2,108 | -6 | 1,817 | 9 | 7,916 | 9,229 | -14 | ||
EBITDA | 342 | 382 | -10 | 240 | 43 | 1,190 | 2,064 | -42 | ||
Depreciation | -125 | -149 | -16 | -142 | -12 | -550 | -566 | -3 | ||
Operating profit | 217 | 233 | -7 | 99 | 119 | 640 | 1,498 | -57 | ||
EBITDA margin, % | 17.3 | 18.1 | 13.2 | 15.0 | 22.4 | |||||
Operating margin, % | 10.9 | 11.1 | 5.4 | 8.1 | 16.2 | |||||
Return on capital employed, % | 15.2 | 13.9 | 6.3 | 10.2 | 21.8 | |||||
Deliveries, kraftliner, thousand tonnes | 229 | 186 | 23 | 197 | 16 | 840 | 812 | 3 | ||
Deliveries, publication paper, thousand | ||||||||||
tonnes | 148 | 163 | -9 | 135 | 10 | 587 | 688 | -15 |
- share calculated of total EBITDA excluding central costs
Net sales
SEKm
2,400
2,200
2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
2019:4 2020:1 2020:2 2020:3 2020:4
EBITDA & margin
SEKm | % | |||
400 | 20 | |||
300 | 15 | |||
200 | 10 | |||
100 | 5 | |||
0 | 0 | |||
2019:4 | 2020:1 | 2020:2 | 2020:3 | 2020:4 |
The publication paper market has been structurally declining for a long time and SCA decided in September to discontinue publication paper operations at the Ortviken industrial site. The production will be phased out during the first quarter of 2021. As of January 1, 2021, the Paper segment consists of kraftliner only and is changing name to the Containerboard segment. A summary of financial data for Containerboard can be found on page 23, Note 10. Publication paper operations in the first quarter of 2021 are recognized in the segment Other and are subsequently assumed to be discontinued. One-off items in 2020 linked to the discontinuation are also recognized in the segment Other (see page 6).
January-December 2020 compared with January-December 2019
Net sales decreased 14% to SEK 7,916m (9,229). The decrease was primarily related to lower selling prices for kraftliner and publication paper and lower delivery volumes for publication paper.
EBITDA declined 42% to SEK 1,190m (2,064). The decrease was primarily
attributable to lower selling prices for kraftliner and publication paper and lower delivery volumes for publication paper. Lower raw material costs had a positive earnings effect. The cost of planned maintenance stops was SEK 110m (110).
October-December 2020 compared with October-December 2019
Net sales declined 6% to SEK 1,981m (2,108). The decrease was attributable to lower selling prices for kraftliner and publication paper.
EBITDA amounted to SEK 342m (382), a decrease of 10%. The decrease was primarily attributable to lower selling prices for kraftliner and publication paper. Lower raw material costs, higher delivery volumes for kraftliner and lower costs for scheduled maintenance stops of SEK 0m (47) had a positive earnings effect.
October-December 2020 compared with July-September 2020
Net sales increased 9% to SEK 1,981m (1,817). This increase was primarily attributable to higher delivery volumes for kraftliner and publication paper, with early production being carried out for customers for subsequent delivery after production has ceased. Lower selling prices for publication paper and kraftliner had an adverse impact on net sales.
EBITDA amounted to SEK 342m (240), an increase of 43%. The increase was primarily attributable to lower costs for maintenance stops of SEK 0m (42) and effects linked to the discontinuation relating to bringing forward production prior to closure and lower costs, which had a positive earnings effect. Lower selling prices for publication paper and kraftliner had an adverse impact on earnings.
SVENSKA CELLULOSA AKTIEBOLAGET SCA (publ), Skepparplatsen 1, 851 88 SUNDSVALL. www.sca.com. Corp. Reg. No. 556012-6293
S C A Y e a r - e n d r e p o r t - J a n u a r y 1 - D e c e m b e r 3 1 , 2 0 2 0 | 1 1 |
RENEWABLE ENERGY
SCA's forest assets and industrial operations provide the company with significant potential to develop new business opportunities in the field of renewable energy. Greater value creation from by-products from the forest and industry create conditions for profitable and sustainable growth.
SCA is now one of Europe's largest producers of forest-based bioenergy, with a total production of about 11 TWh per year. In Sweden, SCA has three pellets factories that have an annual production capacity of 300,000 tonnes.
The expanded pulp mill in Östrand has the capacity to produce 1.2 TWh of green electricity, corresponding to almost 1% of Sweden's total electricity production. The mill is self-sufficient in electricity and the surplus of 0.5 TWh is sold on the electricity market.
SCA leases out land for wind power production. At the end of the fourth quarter of 2020, 560 wind turbines were operating on SCA's land with an annual production capacity of 5.4 TWh, equivalent to about 20% of Sweden's total wind power production. Together with previously agreed but not yet completed projects, operating capacity on SCA's land is expected to increase to 9.0 TWh by 2023.
SCA also develops products for the next-generation of biofuels and green chemicals including a collaboration with St1 to develop, produce and sell biofuel based on tall oil.
SVENSKA CELLULOSA AKTIEBOLAGET SCA (publ), Skepparplatsen 1, 851 88 SUNDSVALL. www.sca.com. Corp. Reg. No. 556012-6293
S C A Y e a r - e n d r e p o r t - J a n u a r y 1 - D e c e m b e r 3 1 , 2 0 2 0 | 1 2 |
SHARE DISTRIBUTION
December 31, 2020 | Class A | Class B | Total |
Registered number of shares | 64,587,672 | 637,754,817 | 702,342,489 |
At the end of the period, the proportion of Class A shares was 9.2%. No change was made to Class A and Class B shares during the fourth quarter or during the full year. The total number of votes in the company amounts to 1,283,631,537.
FUTURE EVENTS
- Annual General Meeting will take place on April 15, 2021.
- Financial statements for the first quarter will be published on April 30, 2021.
- Financial statements for the second quarter will be published on July 23, 2021.
- Financial statements for the third quarter will be published on October 29, 2021.
INVITATION TO PRESS CONFERENCE ON THE INTERIM REPORT FOR THE FOURTH QUARTER OF 2020
Members of the media and analysts are hereby invited to attend a press conference where this interim report will be presented by the President and CEO, Ulf Larsson, and CFO, Toby Lawton.
Time:Friday, January 29, 2021 at 10:00 a.m.
The press conference will be webcast live at www.sca.com. It is also possible to participate by telephone by calling:
Sweden: | +46 | (0)8 5069 2180 |
UK: | +44 | (0)2071 928000 |
US: | +1 631 510 7495 |
Specify "SCA" or the conference ID: 9984826.
Sundsvall, January 29, 2021
SVENSKA CELLULOSA AKTIEBOLAGET SCA (publ)
Ulf Larsson
President and CEO
For further information, please contact
Toby Lawton, CFO, +46 (0)60 19 31 09
Josefine Bonnevier, Investor Relations Director, +46 (0)60 19 33 90
Please note:
This is information that SCA is obliged to make public pursuant to the EU Market Abuse Regulation and 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. The information was submitted for publication, through the agency of the contact person set out below, on January 29, 2021 at 08:00 a.m. CET. The report has not been reviewed by the company's auditors.
Björn Lyngfelt, Vice President, Communications, +46 (0)70 626 82 23
SVENSKA CELLULOSA AKTIEBOLAGET SCA (publ), Skepparplatsen 1, 851 88 SUNDSVALL. www.sca.com. Corp. Reg. No. 556012-6293
S C A Y e a r - e n d r e p o r t - J a n u a r y 1 - D e c e m b e r 3 1 , 2 0 2 0 | 1 3 |
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
Quarter | Full year | |||||||||
SEKm | 2020:4 | 2019:4 | % 2020:3 | % | 2020 | 2019 | % | |||
Net sales | 4,592 | 4,312 | 7 | 4,338 | 6 | 18,410 | 19,591 | -6 | ||
Other income | 362 | 598 | -39 | 385 | -6 | 1,620 | 2,191 | -26 | ||
Change in inventories | -167 | 114 | -293 | -758 | 304 | |||||
Change in value in biological assets | 383 | 16,265 | -98 | 308 | 24 | 1,262 | 16,759 | -92 | ||
Raw materials and consumables | -1,298 | -1,574 | -18 | -1,614 | -20 | -6,415 | -7,373 | -13 | ||
Personnel costs | -552 | -738 | -25 | -1,167 | -53 | -3,310 | -2,997 | 10 | ||
Other external costs | -1,880 | -1,863 | 1 | -2,052 | -8 | -7,436 | -7,100 | 5 | ||
Share of profits of associates | 11 | -16 | 7 | 20 | -14 | |||||
EBITDA | 1,451 | 17,098 | -92 | -88 | -1,749 | 3,393 | 21,361 | -84 | ||
Depreciation and impairment | -367 | -498 | -26 | -1,079 | -66 | -2,248 | -1,696 | 33 | ||
Operating profit | 1,084 | 16,600 | -93 | -1,167 | -193 | 1,145 | 19,665 | -94 | ||
Financial items | -34 | -25 | -28 | -117 | -126 | |||||
Profit before tax | 1,050 | 16,575 | -94 | -1,195 | -188 | 1,028 | 19,539 | -95 | ||
Tax | -267 | -3,422 | 237 | -261 | -4,017 | |||||
Net Profit for the period | 783 | 13,153 | -94 | -958 | -182 | 767 | 15,522 | -95 | ||
Earnings per share SEK 1 | 1.11 | 18.73 | -1.36 | 1.09 | 22.10 | |||||
Earnings attributable to: | ||||||||||
Owners of the parent | 783 | 13,153 | -958 | 767 | 15,522 | |||||
Average no. of shares, millions | 702.3 | 702.3 | 702.3 | 702.3 | 702.3 | |||||
Margins (%) | ||||||||||
EBITDA margin | 31.6 | 396.5 | -2.0 | 18.4 | 109.0 | |||||
Operating margin | 23.6 | 384.9 | -26.9 | 6.2 | 100.4 | |||||
Net margin | 17.1 | 305.0 | -22.1 | 4.2 | 79.2 |
1 There are no dilution effects.
SVENSKA CELLULOSA AKTIEBOLAGET SCA (publ), Skepparplatsen 1, 851 88 SUNDSVALL. www.sca.com. Corp. Reg. No. 556012-6293
S C A Y e a r - e n d r e p o r t - J a n u a r y 1 - D e c e m b e r 3 1 , 2 0 2 0 | 1 4 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Quarter | Full year | ||||||
SEKm | 2020:4 | 2019:4 | 2020:3 | 2020 | 2019 | ||
Profit for the period | 783 | 13,153 | -958 | 767 | 15,522 | ||
Other comprehensive income for the period: | |||||||
Items that may not be reclassified to the income statement | |||||||
Change of value land assets | 2,600 | 18,893 | 181 | 3,314 | 18,893 | ||
Result from Equity investments recognized at fair value | - | - | - | - | -2 | ||
Revaluation of defined benefit pension plans | 435 | 353 | 394 | 327 | 444 | ||
Income tax attributable to components of other comprehensive income | -621 | -3,966 | -118 | -746 | -3,984 | ||
Total | 2,414 | 15,280 | 457 | 2,895 | 15,351 | ||
Items that have been or may be reclassified subsequently to the | |||||||
income statement | |||||||
Cash flow hedges | 79 | -24 | 99 | 28 | -280 | ||
Hedge cost | 10 | 23 | 1 | 37 | 23 | ||
Translation differences in foreign operations | -78 | -20 | 6 | -75 | 15 | ||
Income tax attributable to components of other comprehensive income | -18 | 0 | -21 | -13 | 53 | ||
Total | -7 | -21 | 85 | -23 | -189 | ||
Other comprehensive income for the period, net of tax | 2,407 | 15,259 | 542 | 2,872 | 15,162 | ||
Total comprehensive income for the period | 3,190 | 28,412 | -416 | 3,639 | 30,684 | ||
Total comprehensive income attributable to: | |||||||
Owners of the parent | 3,190 | 28,412 | -416 | 3,639 | 30,684 | ||
Non-controlling interests | - | 0 | - | - | 0 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
SEKm
Attributable to owners of the parent
Value, January 1
Total comprehensive income for the period
Cash flow hedge transferred at cost of hedged investments
Tax on cash flow hedge transferred at cost of hedged investments
Cash dividend
Acquisition of non-controlling interests
Remeasurement effect upon acquisition of non-controlling interests
Value, December 31
Non-controlling interests
Value, January 1
Total comprehensive income for the period
Acquisition of non-controlling interests
Value, December 31
Total equity, value December 31
Full year
2020 | 2019 |
68,510 39,062
3,639 30,684
19-8
-42
- -1,229
-
0
-1-1
72,163 68,510
--
--
- 0
-
0
72,163 68,510
SVENSKA CELLULOSA AKTIEBOLAGET SCA (publ), Skepparplatsen 1, 851 88 SUNDSVALL. www.sca.com. Corp. Reg. No. 556012-6293
S C A Y e a r - e n d r e p o r t - J a n u a r y 1 - D e c e m b e r 3 1 , 2 0 2 0
CONDENSED CONSOLIDATED BALANCE SHEET
SEKm
ASSETS
Non-current assets
Goodwill and other intangible assets
Buildings, land, machinery and equipment
Forest assets
whereof land assets whereof biological assets
Right-of-use assets
Other non-current assets
Total non-current assets
Current assets
Inventories
Trade receivables
Other current receivables
Cash and cash equivalents
Total current assets
Total assets
EQUITY AND LIABILITIES
Equity
Owners of the Parent
Share capital
Share premium
Reserves
Retained earnings
Non-controlling interests
Total equity
Non-current liabilities
Non-current financial liabilities
Provisions for pensions
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities
Current liabilities
Current financial liabilities
Trade payables
Other current liabilities
Total current liabilities
Total liabilities
Total liabilities and equity
1 5
Dec 31, 2020 | Dec 31, 2019 | ||
320211
18,64118,184
74,90069,682
23,62420,170
51,27649,512
729841
1,8081,468
96,39890,386
4,0445,014
1,9642,313
988898
1,273454
8,2698,679
104,66799,065
2,3502,350
6,8306,830
17,32014,693
45,66344,637
-0
72,16368,510
8,4885,888
530522
16,64815,780
225161
25,89122,351
1,3363,730
3,3193,336
1,9581,138
6,6138,204
32,50430,555
104,66799,065
SVENSKA CELLULOSA AKTIEBOLAGET SCA (publ), Skepparplatsen 1, 851 88 SUNDSVALL. www.sca.com. Corp. Reg. No. 556012-6293
S C A Y e a r - e n d r e p o r t - J a n u a r y 1 - D e c e m b e r 3 1 , 2 0 2 0
CONSOLIDATED CASH FLOW STATEMENT
SEKm
Operating activities
Profit before tax
Adjustment for non-cash items1
Paid tax
Cash flow from operating activities before changes in working capital
Cash flow from changes in working capital
Change in inventories
Change in operating receivables
Change in operating liabilities
Cash flow from operating activities
Investing activities
Acquisitions
Divestments
Current capital expenditures in non-current assets, net
Strategic capital expenditures in non-current assets
Acquisition of financial asset
Cash flow from investing activities
Financing activities
Loans raised
Amortization of loans
Amortization of loans, leasing
Dividend
Cash flow from financing activities
Net cash flow for the period
Cash and cash equivalents at the beginning of the period Translation differences in cash and cash equivalents
Cash and cash equivalents at the end of the period
Cash flow from operating activities per share SEK
1 Depreciation/amortization and impairment of non-current assets Fair-value measurement of biological assets
Gains/loss on assets sales and swaps of assets
Unpaid related to costs due to discontinuation of publication paper operations
Other
Total
1 6
Full year
20202019
1,028 19,539
1,580 -15,404
-35-652
2,573 3,483
780-605
-181473
532-54
3,704 3,297
-462 -1,115
63370
-1,143-1,033
-1,414-1,256
-8-26
-2,964-3,060
3,8771,011
-3,584-228
-203-
- -1,229
90-446
830-209
454648
-1115
1,273454
5.274.70
2,2481,696
-1,262-16,759
82-202
600-
-88 | -139 | ||
1,580 | -15,404 |
SVENSKA CELLULOSA AKTIEBOLAGET SCA (publ), Skepparplatsen 1, 851 88 SUNDSVALL. www.sca.com. Corp. Reg. No. 556012-6293
S C A Y e a r - e n d r e p o r t - J a n u a r y 1 - D e c e m b e r 3 1 , 2 0 2 0 | 1 7 |
INCOME STATEMENT PARENT COMPANY
SEKm
Other operating income
Other operating expenses
Personnel costs
EBITDA
Depreciation
Operating profit
Financial items
Profit before tax
Appropriations and tax
Profit for the period
Full year
20202019
273235
-235-160
-102-91
-64-16
-89-86
-153-102
3398
-120-4
5501,403
4301,399
Other operating income was mainly related to remuneration for the granting of felling rights for the Parent Company's forest land.
BALANCE SHEET PARENT COMPANY
SEKm | Dec 31, 2020 | Dec 31, 2019 | |
Tangible non-current assets | 8,723 | 8,641 | |
Financial non-current assets | 9,690 | 9,681 | |
Total non-current assets | 18,413 | 18,322 | |
Current assets | 14,270 | 12,563 | |
Total assets | 32,683 | 30,885 | |
Restricted equity | 11,373 | 11,373 | |
Non-restricted equity | 8,981 | 8,551 | |
Total equity | 20,354 | 19,924 | |
Provisions | 1,611 | 1,594 | |
Non-current liabilities | 7,928 | 5,236 | |
Current liabilities | 2,790 | 4,131 | |
Total equity, provisions and liabilities | 32,683 | 30,885 |
SVENSKA CELLULOSA AKTIEBOLAGET SCA (publ), Skepparplatsen 1, 851 88 SUNDSVALL. www.sca.com. Corp. Reg. No. 556012-6293
S C A Y e a r - e n d r e p o r t - J a n u a r y 1 - D e c e m b e r 3 1 , 2 0 2 0 | 1 8 |
NOTES
1. ACCOUNTING PRINCIPLES
This interim report has been prepared in accordance with IAS 34 and recommendation RFR 1 of the Swedish Financial Reporting Board, and with regards to the Parent Company, RFR 2. The accounting principles are described in detail in SCA's 2019 Annual Report.
The definition of business acquisitions in IFRS 3 Business acquisitions has been changed. The criteria for classifying an acquisition as a business acquisition is that it must contain at least an input and a substantive process that together obviously make a significant contribution to the ability to create output. The change in IFRS 3 had no impact on the Group's interim report, but may affect future periods if the Group makes acquisitions.
Several amendments and interpretations apply for the first time from 2020, but they are not judged to have any material impact on the Group's interim report.
2. REVENUE FROM CONTRACTS WITH CUSTOMERS
Full year | |||
SEKm | 2020 | 2019 | |
Sweden | 2,774 | 2,532 | |
EU excluding Sweden | 10,359 | 11,766 | |
Rest of Europe | 1,218 | 1,293 | |
Rest of world | 4,059 | 4,000 | |
Total Group | 18,410 | 19,591 |
3. FOREST VALUATION
Accounting principles
The accounting principles for forest assets are described in detail on page 105, Note D3, of SCA's 2019 Annual Report.
Key assessments and assumptions
SCA has based its valuation of forest assets in Sweden on forest transactions in the areas where SCA owns forest assets. The calculated market prices comprise a weighted average based on forest transactions over the most recent three-year period. On December 31, 2020, the market price was SEK 291/m3fo. The market price on December 31, 2019, was SEK 276/m3fo.
SCA carried out a new forest survey in Sweden in 2019. As part of the new survey, a new estimate was drawn up and established for the forest portfolio's standing timber volume.
At December 31, 2020, the expected total standing timber volume is estimated at approximately 257 million m3fo, of which about 5 million m3fo in the Baltic states. The change in value as a result of changes in market prices and estimated annual net volume growth is accrued over the course of the year.
The new forest survey also resulted in a new harvesting calculation. Higher growth gives greater long-term harvesting potential. Annual planned harvesting will gradually increase from about 4.3 million m3sub in 2020 to 5.4 million m3sub in 2025.
Forest assets
SEKm | Dec 31, 2020 | Dec 31, 2019 |
Forest assets in Sweden1 | 73,387 | 68,723 |
Forest assets in the Baltics | 1,513 | 959 |
Totalt value of forest assets2 | 74,900 | 69,682 |
Deferred tax on forest assets | 14,977 | 13,977 |
- The fair value of SCA's forest assets was based on a timber volume estimated at 252 million m3fo in Sweden and 5 million m3fo in the Baltic states at year-end, multiplied by the market price of SEK 291/m3fo.
- The total change in value at December 31, 2020 amounted to SEK 5,218m whereof SEK 1,262m constitutes the change in value in biological assets
SVENSKA CELLULOSA AKTIEBOLAGET SCA (publ), Skepparplatsen 1, 851 88 SUNDSVALL. www.sca.com. Corp. Reg. No. 556012-6293
S C A Y e a r - e n d r e p o r t - J a n u a r y 1 - D e c e m b e r 3 1 , 2 0 2 0 | 1 9 |
The change in value of biological assets has been based on market statistics and discounted cash flows. When establishing the change in value of biological assets, the same valuation model has been used as in the past, with a return requirement of 3.6% (3.6) after tax. The change in value of biological assets was SEK 1,262m in 2020.
The value of land assets constitutes the residual amount between the total value in accordance with market price based on forest transactions and the value of the biological assets. The change in value pertaining to land in 2020 amounted to SEK 3,315m and is recognized as other comprehensive income and does not impact profit for the year.
4. OTHER CURRENT LIABILITIES AND PROVISIONS
Accounting principles
Provisions are recognized in the consolidated balance sheet when there is a legal or constructive obligation arising from events that have occurred and it is probable that payments will be required to settle the obligation. It must also be possible to reliably estimate the amount to be paid. The provision is valued at the present value of the anticipated future expenditure to settle the obligation.
A provision for restructuring measures is recognized when the Group has established a detailed plan and either implementation has begun or the main features of the measures have been communicated to the parties involved. Restructuring costs include, for example, costs for plant closures, impairment of production machinery or costs for personnel reductions.
Other provisions
Effencieny | Discontinuation | ||||
SEKm | programs | Environment | publication paper | Other | Total |
Value, January 1 | 4 | 55 | - | 56 | 115 |
Provisions | 0 | 28 | 761 | 1 | 790 |
Utilization | -1 | -29 | -3 | -34 | -67 |
Translation differences | - | - | -2 | -2 | -4 |
Value, December 31 | 3 | 54 | 756 | 21 | 834 |
SCA decided in September to discontinue the publication paper operations at Ortviken. Approximately 800 employees are affected, primarily at the Ortviken paper mill but also in other parts of SCA's operations. The paper machines are expected to close sequentially during the first quarter of 2021.
As per December 31, 2020, the discontinuation consists of provisions arising from non-recurrent costs of SEK 756m, of which just over 40% relate to personnel costs and just over 20% decommissioning costs at the Ortviken paper mill. The provisions are recognized in the segment Other.
5. RISKS AND UNCERTAINTIES
SCA's risk exposure and risk management are described on pages 64-68 of SCA's 2019 Annual Report.
Health and safety are always a top priority at SCA, not least during this challenging time with COVID-19. So far, there has been limited impact on production and deliveries of SCA's products, which include the delivery of important input goods to hygiene products and packaging for food and medicines. The company is actively working to monitor inventory levels, secure the delivery and distribution chain and to ensure cash flow. There remains significant uncertainty which may impact SCA's future earnings.
6. RELATED PARTY TRANSACTIONS
No transactions took place between SCA and related parties with any material impact on the company's financial position or results.
SVENSKA CELLULOSA AKTIEBOLAGET SCA (publ), Skepparplatsen 1, 851 88 SUNDSVALL. www.sca.com. Corp. Reg. No. 556012-6293
S C A Y e a r - e n d r e p o r t - J a n u a r y 1 - D e c e m b e r 3 1 , 2 0 2 0 | 2 0 |
7. FINANCIAL INSTRUMENTS BY CATEGORY
Measure- | |||
SEKm | ment level | Dec 31, 2020 | Dec 31, 2019 |
Financial assets measured at fair value in the | |||
income statement | |||
Derivatives - Current financial assets | 2 | 0 | 3 |
Derivatives - Other current receivables | 2 | 101 | 23 |
Total | 101 | 26 | |
Financial liabilities measured at fair value in the | |||
income statement | |||
Derivatives - Current financial liabilities | 2 | 3 | 1 |
Derivatives - Other current financial liabilities | 2 | 89 | 15 |
Total | 92 | 16 | |
Financial assets measured at fair value through | |||
other comprehensive income | |||
Equity instruments | 3 | 14 | 14 |
Total | 14 | 14 | |
Financial liabilities measured at amortized cost | |||
Non-current financial liabilities excluding leasing | - | 7,866 | 5,190 |
Non-current financial liabilities, leasing | - | 603 | 698 |
Current financial liabilities excluding leasing | - | 1,176 | 3,574 |
Current financial liabilities, leasing | - | 148 | 156 |
Total | 9,793 | 9,618 | |
Derivatives used for hedge accounting | |||
Non-current financial assets | 2 | - | 0 |
Other non-current assets | 2 | 3 | 2 |
Other current receivables | 2 | 213 | 78 |
Total | 216 | 80 | |
Derivatives used for hedge accounting | |||
Non-current financial liabilities | 2 | 19 | - |
Other non-current liabilities | 2 | 43 | 54 |
Other current liabilities | 2 | 96 | 52 |
Total | 158 | 106 |
The fair value of trade receivables, other current and non-current receivables, cash and cash equivalents, and the fair value of trade payables is estimated to be equal to their carrying amount. The total fair value of current and non-current financial liabilities was SEK 9,069m (10,216). The value of electricity derivatives is based on published prices in an active market. Other financial instruments are marked to market, based on prevailing currency and interest rates on the balance sheet date. The fair value of debt instruments is determined using valuation models, such as discounting future cash flows at quoted market rates for the respective maturity.
8. CONTINGENT LIABILITIES, PLEDGED ASSETS AND COMMITTMENTS
SEKm | Parent | ||
Contingent liabilities | Dec 31, 2020 | Dec 31, 2019 | |
Guarantees for | |||
subsidiaries | 715 | 750 | |
associates | - | - | |
customers and others | - | - | |
Other contingent liabilities | 333 | 285 | |
Total | 1,048 | 1,035 | |
Pledged assets | Dec 31, 2020 | Dec 31, 2019 | |
Chattel mortgages | - | 20 | |
Total | - | 20 |
Group
Dec 31, 2020 | Dec 31, 2019 |
- | - |
5 | 5 |
28 | 31 |
18 | 18 |
51 | 54 |
Dec 31, 2020 | Dec 31, 2019 |
- | 20 |
- | 20 |
SVENSKA CELLULOSA AKTIEBOLAGET SCA (publ), Skepparplatsen 1, 851 88 SUNDSVALL. www.sca.com. Corp. Reg. No. 556012-6293
S C A Y e a r - e n d r e p o r t - J a n u a r y 1 - D e c e m b e r 3 1 , 2 0 2 0 | 2 1 |
Commitments
SCA has a decided investment in Obbola totaling SEK 7.5bn over a five-year period. As of December 31, 2020, SEK 5.2bn remained, of which SEK 3.0bn was a contracted commitment. The commitment refers entirely to fixed assets.
9. ALTERNATIVE PERFORMANCE MEASURES
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
Excluding the effect of one-off items related to the discontinuation of publication paper operations in 2020 and changed accounting method for the valuation of forest assets in 2019
Quarter | Full year | |||||||||
SEKm | 2020:4 | 2019:4 | % | 2020:3 | % | 2020 | 2019 | % | ||
Net sales | 4,592 | 4,312 | 7 | 4,338 | 6 | 18,410 | 19,591 | -6 | ||
Other income | 362 | 598 | -39 | 385 | -6 | 1,620 | 2,191 | -26 | ||
Change in inventories | -180 | 114 | -258 | -104 | 73 | -582 | 304 | |||
Change in value in biological assets | 383 | 222 | 73 | 308 | 24 | 1,262 | 717 | 76 | ||
Raw materials and consumables | -1,313 | -1,574 | -17 | -1,595 | -18 | -6,411 | -7,396 | -13 | ||
Personnel costs | -724 | -738 | -2 | -688 | 5 | -3,003 | -2,997 | 0 | ||
Other external costs | -1,754 | -1,863 | -6 | -1,619 | 8 | -6,876 | -7,077 | -3 | ||
Share of profits of associates | 11 | -16 | 7 | 20 | -14 | |||||
EBITDA | 1,377 | 1,055 | 31 | 1,032 | 33 | 4,440 | 5,319 | -17 | ||
Depreciation and impairment | -391 | -418 | -6 | -408 | -4 | -1,601 | -1,616-1 | |||
Operating profit | 986 | 637 | 55 | 624 | 58 | 2,839 | 3,703 | -23 | ||
Financial items | -34 | -25 | -28 | -117 | -126 | |||||
Profit before tax | 952 | 612 | 56 | 596 | 60 | 2,722 | 3,577 | -24 | ||
Tax | -131 | -134 | -121 | -483 | -730 | |||||
Net Profit for the period | 821 | 478 | 72 | 475 | 73 | 2,239 | 2,847 | -21 | ||
Earnings per share SEK 1 | 1.17 | 0.68 | 0.68 | 3.19 | 4.05 | |||||
Earnings attributable to: | ||||||||||
Owners of the parent | 821 | 478 | 475 | 2,239 | 2,847 | |||||
Average no. of shares, millions | 702.3 | 702.3 | 702.3 | 702.3 | 702.3 | |||||
Margins (%) | ||||||||||
EBITDA margin | 30.0 | 24.5 | 23.8 | 24.1 | 27.2 | |||||
Operating margin | 21.5 | 14.8 | 14.4 | 15.4 | 18.9 | |||||
Net margin | 17.9 | 11.1 | 10.9 | 12.2 | 14.5 |
1 There are no dilution effects.
For definitions of alternative performance measures, refer to SCA's 2019 Annual Report, pages 89-92.
SVENSKA CELLULOSA AKTIEBOLAGET SCA (publ), Skepparplatsen 1, 851 88 SUNDSVALL. www.sca.com. Corp. Reg. No. 556012-6293
S C A Y e a r - e n d r e p o r t - J a n u a r y 1 - D e c e m b e r 3 1 , 2 0 2 0
OPERATING CASH FLOW | Quarter | ||
SEKm | 2020:4 | 2019:4 | 2020:3 |
EBITDA | 1,451 | 17,098 | -88 |
Changes in biological assets and other non cash | |||
flow items | -510 | -16,367 | 481 |
Operating cash surplus | 941 | 731 | 393 |
Change in working capital | 275 | 140 | 1,154 |
Current capital expenditures, net 1 | -298 | -370 | -413 |
Other operating cash flow | 39 | 81 | -16 |
Operating cash flow | 957 | 582 | 1,118 |
2) Including following values from new leasing contracts: | -40 | -27 | |
-8 |
2 2
Full year
20202019
3,39321,361
-601-16,979
2,7924,382
1,131-186
-1,224-1,132
-11-148
2,6882,916
-81-99
CAPITAL STRUCTURE
SEKm | Dec 31, 2020 | Dec 31, 2019 |
Forest assets | 74,900 | 69,682 |
Working capital | 2,759 | 3,748 |
Deferred tax relating to forest assets | -14,977 | -13,977 |
Other capital employed, net | 17,152 | 17,654 |
Total capital employed | 79,834 | 77,107 |
Return on capital employed excluding new method for valuation of forest assets (%) 1,3 | 3.6 | 6.9 |
Industrial return on capital employed (%) 1,2,3 | 5.4 | 11.9 |
Net debt, SEKm | 7,671 | 8,597 |
Net debt/EBITDA (LTM) 3 | 1.7x | 1.6x |
Equity, SEKm | 72,163 | 68,510 |
Net debt/Equity (%) | 10.6 | 12.5 |
- Rolling 12 months
- Excluding constructions in progress
- Excluding the effect of one-off items related to discontinuation publication paper operations in 2020:3 and 2020:4 and the effect of changed accounting method for valuation of forest assets in 2019:4.
WORKING CAPITAL
SEKm | Dec 31, 2020 | Dec 31, 2019 |
Inventories | 4,044 | 5,014 |
Accounts receivable | 1,964 | 2,313 |
Other current receivables | 987 | 790 |
Accounts payable | -3,319 | -3,336 |
Other current liabilities | -1,200 | -1,044 |
Adjustments 1 | 283 | 11 |
Working capital | 2,759 | 3,748 |
Working capital in % of net sales 2 | 18.3 | 20.2 |
1 Adjustments: | ||
Other current receivables, green certificates | 0 | -6 |
Accounts payable, strategic capital expenditures | 443 | 62 |
Other current provisions | -174 | -55 |
Other current liabilities, emission rights | 14 | 10 |
Sum adjustments | 283 | 11 |
2 Calculated as an average of working capital for 13 months as a percentage of 12-month rolling net sales
SVENSKA CELLULOSA AKTIEBOLAGET SCA (publ), Skepparplatsen 1, 851 88 SUNDSVALL. www.sca.com. Corp. Reg. No. 556012-6293
S C A Y e a r - e n d r e p o r t - J a n u a r y 1 - D e c e m b e r 3 1 , 2 0 2 0 | 2 3 |
NET DEBT
SEKm | Dec 31, 2020 | Dec 31, 2019 |
Surplus in funded pension plans | 1,329 | 1,019 |
Non-current financial assets | 81 | 67 |
Current financial assets | - | 3 |
Cash and cash equivalents | 1,273 | 454 |
Financial receivables | 2,683 | 1,543 |
Non-current financial liabilities | 8,488 | 5,888 |
Provisions for pensions | 530 | 522 |
Current financial liabilities | 1,336 | 3,730 |
Financial liabilities | 10,354 | 10,140 |
Net debt | -7,671 | -8,597 |
10. FINANCIAL DATA CONTAINERBOARD
Quarter | Full year | |||||||||
SEKm | 2020:4 | 2020:3 | 2020:2 | 2020:1 | 2020 | 2019 | 2018 | 2017 | ||
Net sales | 1,195 | 1,067 | 1,128 | 1,219 | 4,608 | 4,985 | 5,521 | 4,659 | ||
EBITDA | 277 | 247 | 235 | 299 | 1,058 | 1,547 | 2,116 | 1,266 | ||
Operating profit | 167 | 136 | 126 | 188 | 618 | 1,117 | 1,692 | 861 | ||
EBITDA margin, % | 23,2 | 23.1 | 20.8 | 24.5 | 23.0 | 31.0 | 38.3 | 27.2 | ||
Operating margin, % | 14,0 | 12.8 | 11.2 | 15.4 | 13.4 | 22.4 | 30.6 | 18.5 | ||
Deliveries, kraftliner, thousand tonnes | 229 | 197 | 194 | 220 | 840 | 812 | 805 | 846 |
11. QUARTERLY DATA BY SEGMENT
NET SALES | Quarter | ||||||||
SEKm | 2020:4 | 2020:3 | 2020:2 | 2020:1 | 2019:4 | 2019:3 | 2019:2 | 2019:1 | 2018:4 |
Forest | 1,659 | 1,500 | 1,494 | 1,833 | 1,694 | 1,865 | 1,746 | 1,651 | 1,540 |
Wood | 1,498 | 1,592 | 1,770 | 1,436 | 1,376 | 1,545 | 1,727 | 1,678 | 1,558 |
Pulp | 1,166 | 986 | 1,091 | 1,188 | 900 | 1,129 | 1,214 | 1,134 | 1,049 |
Paper | 1,981 | 1,817 | 1,876 | 2,242 | 2,108 | 2,380 | 2,375 | 2,366 | 2,421 |
Intra-group deliveries | -1,712 | -1,557-1,544-1,906 | -1,766-1,944-1,834 | -1,753 | -1,642 | ||||
Total net sales | 4,592 | 4,338 | 4,687 | 4,793 | 4,312 | 4,975 | 5,228 | 5,076 | 4,926 |
EBITDA | Quarter | ||||||||
SEKm | 2020:4 | 2020:3 | 2020:2 | 2020:1 | 2019:4 | 2019:3 | 2019:2 | 2019:1 | 2018:4 |
Forest | 747 | 515 | 499 | 452 | 607 | 388 | 414 | 331 | 427 |
Wood | 227 | 192 | 143 | 95 | 125 | 180 | 188 | 297 | 226 |
Pulp | 109 | 137 | 182 | 186 | 20 | 268 | 344 | 351 | 370 |
Paper | 342 | 240 | 229 | 379 | 382 | 577 | 489 | 616 | 536 |
Other1 | -48 | -52 | -52 | -82 | -79 | -49 | -95 | -35 | -65 |
Total EBITDA1,2 | 1,377 | 1,032 | 1,001 | 1,030 | 1,055 | 1,364 | 1,340 | 1,560 | 1,494 |
- Including the effect of discontinuation of publication paper operations EBITDA in Other amounted to 26 SEKm in 2020:4 and to -1 172 SEKm in 2020:3. For the Group EBITDA amounted to 1 451 SEKm in 2020:4 and to -88 SEKm in 2020:3.
- Including the effect of changed accounting method of forests assets, EBITDA amounted to SEK 16,649m for Forest and SEK 17,097m for the Group in 2019:4.
EBITDA MARGIN | Quarter | ||||||||
% | 2020:4 | 2020:3 | 2020:2 | 2020:1 | 2019:4 | 2019:3 | 2019:2 | 2019:1 | 2018:4 |
Forest | 45.0 | 34.3 | 33.4 | 24.6 | 35.8 | 20.8 | 23.7 | 20.0 | 27.7 |
Wood | 15.2 | 12.1 | 8.1 | 6.6 | 9.1 | 11.6 | 10.8 | 17.7 | 14.5 |
Pulp | 9.3 | 13.9 | 16.7 | 15.6 | 2.2 | 23.8 | 28.4 | 31.0 | 35.3 |
Paper | 17.3 | 13.2 | 12.2 | 16.9 | 18.1 | 24.2 | 20.6 | 26.0 | 22.2 |
EBITDA margin1,2 | 30.0 | 23.8 | 21.3 | 21.5 | 24.5 | 27.4 | 25.6 | 30.7 | 30.3 |
- Including the effect of discontinuation publication paper operations EBITDA margin for the Group was 31.6% in 2020:4 and -2,0% in 2020:3.
- Including effect of changed accounting method for valuation of forest assets, the EBITDA margin was 82,8% for Forest and 396,5% for the Group in 2019:4
SVENSKA CELLULOSA AKTIEBOLAGET SCA (publ), Skepparplatsen 1, 851 88 SUNDSVALL. www.sca.com. Corp. Reg. No. 556012-6293
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SCA - Svenska Cellulosa AB published this content on 29 January 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 January 2021 13:33:01 UTC.
