SCA's CEO dissatisfied with profitability

July 27, 2010 by timbercommunity

Forest Group SCA's CEO Jan Johansson is dissatisfied with the profitability according to an interview in Realtid.se. - We have said we must have return on capital on 13 percent in total within the group. Right now we have around 9-10 percent, depending on seasonal variations and the business cycle.

What they miss that do not see the full potential in SCA?
They miss slightly the strength of our brands. In the interview Johansson commmented to Realtid.

About the brands
- If you take our baby diapers, we are very strong in the Nordic countries with our brand Libero which has a market share of 60 percent here. - And now we move, and launches soap, baby oil and wipes, all with the Libero brand. SCA has also recently purchased the Copamex baby diaper business in Mexico and Central America

About the finance crise
Johansson also commented about the finance crise. - I think we might have accelerated a bit more during the financial crisis, for it turned out that we resisted the crisis very well.
- We have a general desire to increase our growth in the hygiene operations. Among the segments that are doing well especially with regard to incontinence products diapers for the adults who find it difficult to hold tight.

About valuation of SCA
The SCA includes 2.6 million hectares of forest and the book value of the forest is 23-24 billion SEK. In comparison, the entire SCA at the current share price of slightly more than SEK 100 per share, worth a total of 70-75 billion according to Blomberg.

About environment
"We are the only company in our sector today who can show that we are neutral in CO2 emissions, as the net growth of our forests bind
as much as we emit. "

About cost reductions of one billion SEK
- We have well passed the 80 percent of the cost reductions.

About the Euro
The rule of thumb is that SCA is benefiting from a higher euro, and vice versa.