Annual Report 1998

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Contents President’s letter 2 Business concept 5 Business control and financial goals 6 SCA share 8 Organization, products and markets 10 Operations in brief 1998 11 BUSINESS AREAS: Hygiene Products 12 Packaging 18 Graphic Paper 24 RAW MATERIALS SUPPLY: 28 Forest and Timber 29 Raw Materials and Logistics 30 Human resources 31 Research and development 32 Information Technology – IT 34 Environment 36 Financial risk management 41 FINANCIAL REVIEW: Board of Directors’ report 44 Cash flow statement 46 Statement of earnings 48 Balance sheet 50 Parent Company 52 Accounting principles 53 Notes to the financial statements 55 Proposed disposition of earnings 68 Auditor’s report 69 Quarterly data 70 Group by country 71 Ten-year comparison 72 Definitions and key ratios 73 Glossary 74 Production capacities 75 Board of Directors and Auditor 76 Senior management 78 SCA in the world 80 Annual General Meeting and Nominating committee 81 Financial information report dates in 1999 81 SCA in brief SCA is an integrated paper company that produces absorbent hygiene products, corrugated packaging and graphic papers. Based on customer needs, value-added products are developed for private con- sumers, institutions, industry and trade. Western Europe is SCA’s main market, concurrent with selective expansion in Central and Eastern Europe as well as Asia and America. SCA owns 1.8 million hectares of productive forest land and con- ducts sawmill operations. Wood fiber, which is harvested from the Swedish forest holdings, is an important raw material for the Group and contributes to SCA’s high degree of integration. SCA is also Europe’s largest collector and user of recovered paper. SCA uses equal quantities of recycled and fresh wood fibers in its production. At the beginning of 1999, the number of employees amounted to slightly more than 32,000 in some 30 countries. The SCA share is listed on the stock exchanges in Stockholm and London, and is available in the form of ADRs (American Depositary Receipts) in the US. Packaging Hygiene Products Graphic Paper
1998 SCA’s cash flow from operations remained strong, totaling SEK 4,275 M. Accordingly, cash flow goals were achieved for the year. • Hygiene operations continues expansion, with strengthened positions in Europe and South America. • SCA Packaging increased profitability of European operations and acquired packaging companies in Great Britain, Denmark and the Czech Republic. • Higher demand for all paper grades improved operating profit for Graphic Paper by 109%. KEY RATIOS 1998 1997 Net sales, SEK M 61,273 58,595 Earnings after financial items, SEK M 5,169 4,457 Earnings per share after tax, SEK 17.07 13.98 Cash flow from current operations, per share, SEK 21.57 24.54 Dividend, SEK 6.50 1 5.75 Strategic investments, incl. acquisitions, SEK M 5,041 4,414 Shareholders’ equity, SEK M 28,404 24,653 Return on shareholders’ equity, % 13 12 Debt/equity ratio, multiple 0.72 0.73 Average number of employees 32,082 33,399 1 Board proposal See page 73 for definitions. 30 25 20 15 10 5 0 SEK Earnings, dividend and cash flow per share Net sales by business area 1998 (excluding intra-Group deliveries) Other operations SEK 1,252 M 2% Forest and Timber SEK 2,347 M 4% Graphic Paper SEK 17,172 M 28% Forest and Timber SEK 722 M 11% Graphic Paper SEK 1,851 M 29% 94 95 96 Earnings Dividend 97 Cash flow from current operations The Group’s earnings capacity remains stable. 1 Proposed dividend. 98 1 Hygiene Products SEK 25,742 M 42% Packaging SEK 14,760 M 24% The Hygiene Products, Packaging and Graphic Paper business areas, jointly account for 94% of the Group’s net sales. Operating profit by business area 1998 Hygiene Products SEK 2,404 M 37% Packaging SEK 1,480 M 23% Combined, the Hygiene Products, Packaging and Graphic Paper business areas account for 89% of the Group’s operating profit. 1
Page 1: Annual Report 1998 Qualitative grow
Page 5 and 6: Rexam Plc covering the acquisition
Page 7 and 8: Business concept SCA’s business c
Page 9 and 10: SCA’s Graphic Paper and Forest an
Page 11 and 12: Data per share All earnings figures
Page 13 and 14: Operations in brief 1998 Group tota
Page 15 and 16: The Hygiene Products business area
Page 17 and 18: SCA’s STRATEGY AND MARKET POSITIO
Page 19 and 20: paper, paper hand towels, soap with
Page 21 and 22: Industrial packaging, for example f
Page 23 and 24: SCA’s strategy and market positio
Page 25 and 26: SCA produced 2,168,000 tons of line
Page 27 and 28: The Graphic Paper business area is
Page 29 and 30: The customer-oriented rationalizati
Page 31 and 32: FOREST AND TIMBER Forest and Timber
Page 33 and 34: Human resources PERSONNEL PROGRAM F
Page 35 and 36: Each year, the Hygiene Products bus
Page 37 and 38: THE YEAR 2000 The Group’s operati
Page 39 and 40: forestry operations via ISO 14001 (
Page 41 and 42: TRANSPORT Each year, large quantiti
Page 43 and 44: Financial risk management SCA is ex
Page 45 and 46: Financial review Board of Directors
Page 47 and 48: now being consolidated. The plan in
Page 49 and 50: DISCUSSION AND ANALYSIS, CASH FLOW
Page 51 and 52: DISCUSSION AND ANALYSIS, STATEMENT
Page 53 and 54:
DISCUSSION AND ANALYSIS, BALANCE SH
Page 55 and 56:
Accounting principles The SCA Group
Page 57 and 58:
Notes to the financial statements P
Page 59 and 60:
Note 8 Tangible assets, cont. Build
Page 61 and 62:
Note 15 Shareholders’ equity, con
Page 63 and 64:
Note 21 Contingent liabilities Grou
Page 65 and 66:
Note 26 SCA’s employees The distr
Page 67 and 68:
Specification to Note 10 Parent Com
Page 69 and 70:
Specification to Note 10, cont. Gro
Page 71 and 72:
Auditor’s report TO THE GENERAL M
Page 73 and 74:
Group by country Net sales Average
Page 75 and 76:
Definitions and key ratios Calculat
Page 77 and 78:
Production capacities (excluding fl
Page 79 and 80:
Appointed by employees Deputy membe
Page 81 and 82:
Michael Bertorp (1949). Executive V
Page 83 and 84:
The Annual General Meeting of share
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Annual Report 1998

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