Svenska Cellulosa Aktiebolaget SCA (publ) (SVCBF) Q4 2024 Earnings Call Transcript

2025-01-31 13:41:09 ET

Svenska Cellulosa Aktiebolaget SCA (publ) (SVCBF)

Q4 2024 Earnings Conference Call

January 31, 2025, 04:00 AM ET

Company Participants

Anders Edholm - SVP Sustainability & Communications

Ulf Larsson - President & Chief Executive Officer

Andreas Ewertz - Chief Financial Officer

Conference Call Participants

Johannes Grunselius - DNB Market

Ephrem Ravi - Citigroup

Lars Kjellberg - Stifel

Patrick Mann - Bank of America

Robin Santavirta - Carnegie

Gaurav Jain - Barclays

Oskar Lindström - Danske Bank

Charlie Muir-Sands - BNP Paribas Exane

Ioannis Masvoulas - Morgan Stanley

Andrew Jones - UBS

Linus Larsson - SEB

Presentation

Anders Edholm

Good morning and welcome to this Presentation of SCA's Full Year 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 for that, Anders and also, from my side, a good morning and welcome to the presentation of SCA's result for the full year and for the fourth quarter 2024.

During 2024, SCA showed that we can deliver good profitability even in a challenging environment, and despite substantially higher costs related to wood raw material, SCA reached SEK7.1 billion on EBITDA level and, by that, an EBITDA margin of 35% for the year.

During 2024, we have continued to gradually increase production in the sites where strategic investments have been made. This has resulted in higher delivery volumes in comparison to last year due to the new paper machine in Obbola and the new CTMP line at Ortviken. These investments will contribute to increased productivity and cash flow generating during upcoming years.

Another factor contributing to the result and partly offsetting the higher costs of wood raw material was steady increase in harvesting from SCA on forest where we reached record high harvesting volumes in 2024, a bit over 5.2 million cubic meters. We will continue to ramp up harvesting of our own forest according to plan during coming years. The book value of SCA forest assets was in line with last year and amounted to SEK107.3 billion at the end of 2024. And as you already know, SCA bases the valuation of the forest on complete transactions in the region where SCA owns land.

Turning over to some financial KPIs related to the full year 2024, as already said, our EBITDA reached SEK7.1 billion for '24 which corresponds to 35% EBITDA margin. Our industrial return on capital employed came out on 7% for the full year '24, in line with last year. The leverage was at 1.5 and we have now finalized our big strategic investments in Obbola, Ortviken, and Gothenburg which will all contribute positively coming years.

The proposed dividend for the AGM to decide on is SEK3 per share. This is in line with our aspiration to provide a long-term stable and increasing dividend to our shareholders. Last year we gave SEK2.75 per share. And finally, earnings per share was SEK5.8....

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