Interim Report Q3 2015

JANUARY 1 – SEPTEMBER 30, 2015 (compared with same period a year ago)

  · Net sales rose 13% (5% excluding exchange rate effects) to SEK 86,276m
(76,657)
  · Organic sales growth, which excludes exchange rate effects, acquisitions and
divestments, was 5%
  · Operating profit, excluding items affecting comparability, rose 11% to SEK
9,560m (8,599)
  · The operating margin, excluding items affecting comparability, was 11.1%
(11.2%)
  · Profit before tax, excluding items affecting comparability, rose 13% to SEK
8,864m (7,847)
  · Items affecting comparability totaled SEK -2,764m (-513) of which SEK -710m
(-470) affect cash flow
  · Earnings per share were SEK 5.94 (7.35)
  · Return on capital employed, excluding items affecting comparability, was
11.7% (11.5%)
  · Cash flow from current operations was SEK 6,944m (5,373)

(Table included in attached pdf)

CEO’S COMMENTS
The third quarter of 2015 showed good organic sales growth, a higher operating
profit and a higher operating cash flow compared with the same period a year
ago.

The past few months have been eventful, during which we made a number of
important, strategic decisions. To further intensify the focus on the Group’s
two operations, SCA has decided to initiate a dividing of the Group into two
divisions: a Hygiene division and a Forest Products division. As of January 1,
2017, the Forest Products division will expand its quarterly financial
reporting. In Forest Products, we have decided to invest in increased capacity
for pulp production at the Östrand pulp mill in Sweden. Over time, the
investment in Östrand will increase sales and competitiveness and create a world
-class cost position and higher margins.

To accelerate growth and the pace of innovation as well as to further strengthen
the competitiveness of SCA’s hygiene operations, we have also decided to
implement an enhancement of our hygiene organization, effective January 1, 2016.
In October we announced that SCA is acquiring Wausau Paper Corp., a North
American Away-from-Home tissue company. Wausau Paper’s product portfolio
complements SCA’s offerings in North America and gives us access to premium
tissue in the region. We expect the acquisition to generate benefits for SCA and
our customers. The transaction is subject to Wausau Paper shareholder and
regulatory approvals, and is expected to close during the first quarter of 2016.

In Asia, which is an important growth market with a large population and low
penetration of hygiene products, we strengthen the collaboration with Vinda by
divesting our business in South East Asia, Taiwan and South Korea for
integration with Vinda. The transaction enables us to further leverage on our
strengths to build a leading Asian hygiene business.

We have continued to address areas for improvement. Against the backdrop of
declining global demand for publication papers over several years and weak
profitability at the Ortviken paper mill, we intend to close one newsprint
machine at Ortviken paper mill in Sundsvall, Sweden. We will also recognize an
impairment loss for the mill. We are divesting our baby diaper operation in
South Africa, which has had unsatisfactory profitability. In addition, we have
addressed our brand valuation in relation to our baby diaper operation in Mexico
and the Everbeauty acquisition in Asia, which has entailed impairment losses. We
are divesting our ownership in Bromma Business Jet and have recognized costs for
this during the third quarter. The sale is in line with SCA’s previous
announcement that the Group will not own business jets.

As part of SCA’s ongoing cost-savings program related to the acquisition of
Georgia-Pacific’s European tissue operations, in October we closed our tissue
production plant in Saint-Cyr-en-Val, France. The closure gave rise to
restructuring costs during the third quarter 2015.

Also during the quarter, SCA was included in Dow Jones Sustainability Indices,
one of the world’s most prestigious sustainability rankings. SCA was named
industry leader in the Household Products sector.

Consolidated net sales for the third quarter of 2015 increased by 9% compared
with the same period a year ago. Organic sales growth was 5% as a result of
favorable growth for both Personal Care and Tissue. In emerging markets, which
accounted for 32% of sales, organic sales growth was 12%, and in mature markets
organic sales growth was 3%. During the quarter we introduced eight innovations
and product launches under the Drypers, Libero, Tempo, TENA and Tork brands.

Consolidated operating profit for the third quarter of 2015, excluding items
affecting comparability and currency translation effects, rose 10% 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
758m, mainly due to the stronger U.S. dollar. The operating margin, excluding
items affecting comparability, increased by 0.5 percentage points to 11.9%.
Operating cash flow increased by 7%. Return on capital employed, excluding items
affecting comparability, grew by 1.4 percentage points to 12.8%.

Both Personal Care and Tissue showed a higher operating profit for the third
quarter of 2015 compared with the same period a year ago. Operating profit was
favorably affected by a better price/mix, higher volumes and cost savings.
Higher raw material costs had a negative impact on earnings mainly owing to the
stronger U.S. dollar. Operating profit for Forest Products rose mainly as a
result of higher prices (including exchange rate effects), cost savings and
lower raw material and energy costs.

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 Relations and Online Communications, 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 October 29, 2015. This report
has not been reviewed by the company’s auditors.