2024-01-26 09:39:10 ET
Svenska Cellulosa Aktiebolaget SCA (publ) (SVCBF)
Q4 2023 Earnings Conference Call
January 26, 2024, 4:00 AM ET
Company Participants
Ulf Larsson - President and CEO
Andreas Ewertz - Chief Financial Officer
Conference Call Participants
Charlie Muir-Sands - BNP Paribas
Robin Santavirta - Carnegie
Johannes Grunselius - DNB Markets
Linus Larsson - SEB
Andrew Jones - UBS
Oskar Lindström - Danske Bank
Christian Kopfer - Handelsbanken
Presentation
Operator
Good morning. And welcome to this Presentation of SCA’s Year End Results for 2023. 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 for that, Anders, and good morning also from my side. A warm welcome to the presentation of our result for the full year and fourth quarter 2023 and I will start with this slide to summarize 2023.
During last year, SCA showed that we can deliver good profitability even in a challenging world. Despite higher wood raw material costs and despite that a weakened market has led to substantially lower prices, SCA reached SEK6.8 billion on EBITDA level and by that also an EBITDA margin of 38% for the year.
During the year, we have had ongoing efforts to start up and gradually increase production insights where strategic investments recently have been carried out. This has resulted in higher delivery volumes in comparison to last year due to the new paper machine in Obbola and due to the new CTMP line at Ortviken. These investments will successively contribute to increased productivity and also increased cash generation during coming years.
SCA’s growth in Renewable Energy which became a separate segment during 2023 continued and the result doubled in comparison to 2022. Continued increasing harvesting level from our own Forest and high degree of self-sufficiency in wood raw materials, energy and logistics have also contributed to strong results.
The book value of SCA Forest assets increased by SEK9.6 million -- billion during the year and was SEK107.5 billion at the end of 2023. And as you already know, SCA bases the valuation of the Forest on completed transactions in the region where SCA owns land.
So turning over to some financial KPIs related to the full year 2023. As already said, our EBITDA reached SEK6.8 billion for last year, which corresponds to a 38% EBITDA margin. Our industrial return on capital employed came out on 7% for the full year, which of course, was slower than our record year 2022. The leverage is at 1.6 and we have now finalized our big strategic investments in Obbola, Ortviken and Gothenburg, which will all contribute positively coming years....
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Svenska Cellulosa Aktiebolaget SCA (publ) (SVCBF) Q4 2023 Earnings Call Transcript