2024-04-26 21:38:09 ET
Svenska Cellulosa Aktiebolaget SCA (publ) (SVCBF)
Q1 2024 Earnings Call Transcript
April 26, 2024 04:00 AM ET
Company Participants
Ulf Larsson - President and Chief Executive Officer
Andreas Ewertz - Chief Financial Officer
Conference Call Participants
Charlie Muir-Sands - BNP Paribas
Gaurav Jain - Barclays
Oskar Lindström - Danske Bank
Robin Santavirta - Carnegie
Johannes Grunselius - DNB Markets
Andrew Jones - UBS
Linus Larsson - SEB
Cole Hathorn - Jefferies
Presentation
Operator
Good morning and welcome to this presentation of SCA’s First Quarter Results for 2024. With me here today, I have President and CEO, Ulf Larsson; and CFO, Andreas Ewertz to go through the results and take your questions.
Over to you, Ulf.
Ulf Larsson
Thank you, Anders. Good morning also from my side. A warm welcome to the presentation of SCA’s result for the first quarter 2024. We can now state that the market for all fiber-based products has turned up and that we have a sequentially stronger position in comparison with Q4 2023. It has started to drive price increases in all areas but it's always with a delay effect. In general, we see a high demand on wood raw materials and by that continued increasing prices. In addition, we have increased volumes from our own forests, which in comparison with the first quarter last year substantially, has strengthened the resulting business area forest. We continue our efforts to gradually increase production in the sites where strategic investments have been recently carried out and this has resulted in slightly higher delivery volumes in comparison with the first quarter last year. These investments will successfully contribute to increased productivity and cash generation during coming years.
Sales decreased with 5% and EBITDA with 22% versus first quarter 2023. Increased volume and currency are on the positive side in this comparison, while price is negative. This slide will give you an overview of KPI's for the first quarter 2024. Our EBITDA reached 1.6 billion SEK during the fourth quarter, which corresponds to an EBITDA margin of 35%. Our industrial return on capital employed came out on 4% for the first quarter 2024 counted for the last twelve months. The leverage is at 1.8 and we have now finalized a big strategic investments in Obbola, Ortviken, Bollsta and Gothenburg and they will, as mentioned, all contribute positively to the coming years.
I will now make some comments for each segment starting with forest. In general, we can note the continued high demand of wood raw materials in SCA. We have nevertheless had a stable supply to our industries during the first quarter. As can be seen in the graph in the bottom left, prices for both pulpwood and sawlogs have continued to increase and in the Baltics, wood raw material prices have started to increase again after a period of stability. When we compare first quarter 2024 with first quarter last year, sales was up 12% and EBITDA was up 24% and that is mainly due to higher prices and also higher harvesting level in our own forests. ...
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Svenska Cellulosa Aktiebolaget SCA (publ) (SVCBF) Q1 2024 Earnings Call Transcript