SCA released its Interrim Report 2011 today. At the same time the Swedish company announced that it layoff 2000 employees, mainly in its manufacturing plants in Mexico.
Net sales decreased by 1% (increased by 6% excluding exchange rate effects and divestments) to SEK 79,001m (79,913) .Operating profit excluding restructuring costs decreased by 5% (decreased by 1% excluding exchange rate effects) to SEK 6,697m (7,041).
Operating profit for the third quarter, excluding restructuring costs, increased by 13% over the second quarter to SEK 2,435m (2,150)
SCA CEO Jan Johansson at the headquarters in Stockholm, Sweden, comments:
Net sales for the first nine months of 2011 rose 6%, excluding exchange rate effects and divestments, as a result of higher prices and volumes. Growth in the hygiene operations remained favourable in emerging markets, where the Tissue and Personal Care business areas reported sales increases of 10% and 12%, respectively. SCA's global brands – TENA for incontinence care products and Tork for tissue in the away-from-home (AFH) market – have also grown their market shares during the year.
Operating profit for the first nine months of 2011 decreased by 1%, excluding restructuring costs and exchange rate effects, compared with the same period a year ago. Higher prices and volumes along with cost savings, compensated for most of the slightly more than SEK 3bn in higher raw materials costs, and higher costs for energy and distribution. The strengthening of the Swedish krona lowered operating profit by SEK 700m.
Net sales for the third quarter of 2011 increased by 1%, and operating profit, excluding restructuring costs, rose 13% compared with the second quarter. Earnings improved for all business areas. The higher consolidated profit is mainly attributable to price increases, which compensated for SEK 280m in higher raw material costs.
Earnings per share for the first nine months increased by 2% – and by 7% excluding exchange rate effects – compared with the same period a year ago.
An efficiency enhancement programme was launched during the third quarter, primarily in the hygiene and packaging operations, worth a total of SEK 1,400m, including SEK 900m in items affecting cash flow. The third quarter was charged with SEK 350m in restructuring costs. The measures will lead to annual savings of approximately SEK 700m within a two-year period.
Uncertainty surrounding developments in the global economy has increased, which makes the future economic outlook difficult to judge. So far we have not seen any negative impact on the demand for our products.
