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SCA continues to be a member company of the global sustainability index FTSE4Good for the 12th consecutive year, which confirms that SCA delivers on its ambitious sustainability agenda. This year, SCA received 99 points out of 100 possible in FTSE4Good’s rating system for index inclusion.

”In SCA, sustainability is an integral part of our business strategy and worldwide operations. Our high score on the FTSE4Good Index is an inspiration for us and reinforces our conviction that long-term sustainability work creates value for all our stakeholders. And our recently launched, additional sustainability targets, which take into account people as well as nature targets, raise the bar going forward,” says Kersti Strandqvist, Senior Vice President, Corporate Sustainability.

The FTSE4Good Index Series was launched in 2001 by FTSE Group, the award-winning global index provider, with the aim of objectively measuring the performance of companies that meet globally recognized corporate responsibility standards.

Read more about SCA’s sustainability work at www.sca.com/sustainability

The acceptance of SCA´s binding offer follows the privatization of Everbeauty under Taiwanese law. As a result, a sale and purchase agreement has been signed by SCA and the sellers.

On February 25th2012 it was announced that SCA had delivered a binding offer to acquire Everbeauty, a leading Asian personal care products company with sales in China, Taiwan and Southeast Asia. The company produces and markets baby diapers and incontinence care products with strong brands such as Dr P for incontinence care products and Sealer for baby diapers.

Following the signing of the sale and purchase agreement by the parties, the process will continue towards completing the acquisition, which will include seeking the approvals and clearances from relevant authorities in Taiwan. Closing of the deal is expected to take place in the summer of 2012.

To see the first press release on the acquisition see here....>

SCA has once again been named as one of the world's most ethical companies by the American Ethisphere Institute. Ethisphere recognises companies that go beyond the ordinary and demonstrate that business ethics are decisive for a company's brand and profitability.

Every year the competition intensifies for Ethisphere's ranking, and the record number of companies nominated for 2012 was no exception. Ethisphere evaluated several thousand companies from over 40 industries. The list of nominees for 2012 included a record of 145 companies which outperform their peer competitors in ethical business practices. Two Swedish companies made it to the list - SCA and Electrolux.

Commenting on the recognition, Jan Johansson, President and CEO of SCA said: ”SCA's track record in ethical business practices and sustainability work is a business differentiator that strengthens our competitive advantage. Our ambitious work in this area makes us more attractive for customers, consumers and investors, and also generates considerable savings. SCA puts sustainability on top of the agenda, and we are honoured by Ethisphere's recognition of our achievements."

SCA is one of the world’s most sustainable companies – environmentally, socially and financially. The company is now further raising its ambitions through the introduction of a number of new targets. According to a recent SCA survey, sustainability activities are significant for the business operation.

“Sustainability activities are business-critical for SCA and give us an edge over competitors. Our ambitious work makes us more attractive for customers, consumers and investors, while it also contributes to lower costs,” said Jan Johansson, SCA’s President and CEO, at a press meeting in Stockholm today where the new targets were presented.

SCA recently performed a survey which showed that sustainability activities play an important role in relationships with customers. As many as 41% of respondents said that they had participated in contract negotiations in which sustainability was the deciding factor for the outcome.

Measurability and access to relevant key performance indicators are crucial factors in ensuring successful sustainability programs. Systematic preparatory work has resulted in a number of specific new targets:

• Triple production of biofuels from SCA’s forests by 2020
• Increase wind power production on SCA forest land to 5 TWh by 2020
• Set aside at least 5% of SCA’s productive forestland from forestry in the ecological landscape plans and a further 5% for nature conservation purposes
• Decrease the accident frequency rate by 25% between 2011 and 2016
• Make SCA’s hygiene knowledge base available to customers and consumers and ensure access to affordable, sustainable hygiene solutions
• Deliver better, safe and environmentally sound solutions to customers through sustainable innovation

“The middle class is expected to grow by three billion consumers in the next 20 years, primarily in emerging markets. This represents a major opportunity for us to improve hygiene and health standards for millions of people at the same time as ensuring our commercial success,” said Kersti Strandqvist, SVP of Corporate Sustainability.

“Innovation and sustainability are strongly intertwined, and sustainable innovations are essential if we are to surpass customer and consumer expectations. In order for us to further emphasize the importance of this area, we are today proud to announce that we have decided to join the World Business Council for Sustainable Development, where global corporations go from words to action on sustainability matters,” she added.

Read more about SCA’s sustainability activities at www.sca.com/sustainability

SCA has made a binding offer to acquire the Taiwan-based hygiene products company Everbeauty. The purchase price for the deal amounts to approximately SEK 1.9bn (USD 290m) on a debt-free basis. If the deal is realized, SCA’s positions in Asia, one of the Group’s prioritized growth markets, will be substantially strengthened.

Everbeauty is a leading Asian personal care products company with sales in China, Taiwan and Southeast Asia. The company produces and markets baby diapers and incontinence care products with strong brands such as Dr P for incontinence care products and Sealer for baby diapers.

Within incontinence care products, the company holds a number two position in China and a number one position in Taiwan. Within baby diapers, the company holds a number five position in China and Taiwan.

Everbeauty had sales of SEK 1.6bn in 2010. 60 percent of sales are related to baby diapers and 40 percent comes from incontinence care products. The company has around 900 employees.

The transaction is expected to give SCA access to an extensive distribution network and a strong sales organization as well as production facilities in China and Taiwan.

This proposal is subject to Everbeauty being privatized under Taiwanese law. Completion of the transaction remains subject to certain conditions, including approvals and clearances by relevant authorities in Taiwan. Closing of the deal is expected to take place in the summer of 2012.

“Asia is expected to account for 60 percent of the global growth within hygiene products. The acquisition of Everbeauty would create good growth opportunities in a strategic growth market and with this acquisition, SCA would be the market leader in incontinence care products in Asia, excluding Japan. The acquisition would also strengthen SCA´s market position and geographical reach within baby diapers in Asia”, says Jan Johansson, SCA’s President and CEO.

Today, SCA is present in Asia with personal care and tissue products and on some markets holds leading positions. SCA also holds an 18 percent ownership in Vinda International, one of the leading tissue producers in China.

Klara Helstad has been named as the new Sustainability Director at Södra and as a new member of the group executive team at Södra as of 1 March. Helstad has been with Södra since 2005, and her last position was as Environmental and Quality Manager within the Södra Skog business area.

All Södra's business operations are run on the basis of a long-term strategy to use renewable raw materials, and make biodegradable products and products which can be recycled. The appointment of a sustainability director is part of the Group's priority focus on sustainability and climate issues.

"My field of operation covers the entire chain; from responsible forest management and efficient manufacturing processes to work on the development of renewable products," commented Helstad.

Helstad, 34, is a Doctor of Forestry and has previously acted as a project manager for Södra's introduction of dual certification to FSC® and PEFC. Prior to this, she was a navigator for productivity work at Södra Timber, Södra Cell and Södra Skog. She will report to Leif Brodén, Group Chief Executive at Södra.

SCA’s binding offer to acquire Georgia-Pacific´s European tissue operations has been accepted – process continues towards closing

Georgia-Pacific´s acceptance of SCA’s binding offer follows consultations with appropriate works councils. As a result, a sales and purchase agreement has been signed by both parties.

The process will continue towards finalizing the acquisition, including the approvals by relevant competition authorities and further local consultation processes.

November 10th, 2011, it was announced that SCA had delivered a binding offer to acquire Georgia-Pacific´s European tissue operations. Georgia-Pacific has a well-established presence in Europe in both Away-From-Home and consumer tissue products. The company’s products are in particular marketed with the well-known Lotus brand.

Georgia-Pacific’s European tissue operations have approximately 5,000 employees and 15 production sites in seven countries. Sales in 2010 amounted to EUR 1.25bn (SEK 11.9bn).

Today, Friday February 3, 2012, the shareholders of UK-based packaging group DS Smith Plc approved the company´s proposal to acquire SCA’s packaging operations, excluding the two kraftliner mills in Sweden.

The transaction remains subject, amongst other things, to antitrust clearance from the European Commission. Closing is expected during the second quarter of 2012.

Regarding the French part of the packaging operations, DS Smith has made a formal offer to acquire this business. This process is subject to an information and consultation procedure with the relevant works councils and will be treated separately.

The first press release on this deal was published on January 17, 2012. http://www.sca.com/en/Media/Press-releases/Press-releases/2012/2012-01-17-SCA-divests-its-packaging-operations/

SCA has for the seventh year in a row received the Product of the Year / Товар года award in Russia for Zewa toilet paper. SCA has also been awarded for the first time for the Zewa handkerchiefs. This success goes line in line with sales increase for both product categories.

“We are especially proud to receive this prestigious award in the hanky category, as this is a relatively new category for the Russian consumers,” explains Peter Steiner, Marketing Director at SCA for consumer goods in Eastern Europe. “In 2011 the volume market share of hankies, our distribution in Russian cities and sales grew significantly”, says Olga Gutnikova, Brand Manager for handkerchiefs and facial tissue at SCA.

Individual packs & better visualization

One of the recipes for the growth was to introduce individual pack sales of Zewa hankies. By allowing the consumers to buy just a single pack we encourage them to try the new product so that they can buy the entire package if the product meets their expectations.

Another factor is the visualization in the stores. ”We created several colorful dispensers which helped to attract consumers’ attention and place the product in cross-categories such as hankies for kids next to the Libero diapers,” says Victoria Gushina, Head of the SCA trade marketing team in Russia.

Focus on premium products

During 2011 primary focus has been shifting the consumers’ preferences towards the more premium Zewa Deluxe 3ply toilet paper. SCA’s national promotional campaign “For those who want more!” to support Zewa Deluxe tissue proved to be really successful. Not only it increased the sales volume of 3-ply toilet paper Zewa Deluxe but also it strengthened the consumer brand loyalty to Zewa”.
The Product of the Year award

Among the winners of the Product of the Year / Товар года award in other FMCG categories were Unilever, Schwarzkopf, Coca-Cola. This famous rating of the consumer preferences appeared at the end of the '90s.

This award is given in the product categories that are frequently purchased at the retail chains. To select the finalists the independent rating agency tracks the demand dynamics throughout the year based on ComCon and Nielsen data and other research companies; researches the representatives of the key retail chains.

SCA’s packaging operations – excluding the two kraftliner mills in Sweden – are divested to DS Smith. The purchase price amounts to EUR 1.7bn on a debt free basis.

“The reason for the divestment is primarily to enable increased growth in the hygiene business”, says Jan Johansson, President and CEO of SCA.

The packaging operations, excluding the two kraftliner mills, had net sales in 2010 of approximately SEK 24.2bn (EUR 2.5bn) and an operating profit, excluding restructuring costs, of approximately SEK 1.1bn (EUR 117million). The operations have approximately 12,000 employees.

The purchase price is equivalent to an EBITDA multiple of 6.3 based on the 12 month period Q4 2010 – Q3 2011.

In connection with the transaction a write-down of goodwill of approximately SEK 4bn will be made, which will have the result that the remaining kraftliner operations will not have any goodwill. The write-down will impact the result for the fourth quarter of 2011 and will be treated as an item affecting comparability.

The debt/equity ratio will decrease to approximately 0.5 provided that the divestment of the packaging operations and the previously announced binding offer for Georgia-Pacific´s European tissue operations are completed according to plan.

Earnings per share will decrease by SEK 0.75 based on net profit for the 12 month period Q4 2010 – Q3 2011.

Regarding the French part of the packaging operations, the price for which is included in the announced purchase price, DS Smith has made a formal offer to acquire this business. This process is subject to consultation with relevant works councils and will be treated separately.

SCA’s two kraftliner mills in Sweden are not included in the transaction as they are well integrated with SCA´s forest products operations.

“Over the years we have developed our packaging business and we are divesting a competitive operation to an industrial buyer who can continue to develop it”, says Jan Johansson, President and CEO of SCA.

The transaction is subject to approval from DS Smith´s shareholders and antitrust clearance from the European Commission. Closing is expected during the second quarter of 2012. DS Smith will publish a prospectus regarding the transaction. DS Smith´s financing of the transaction is committed.