SVENSKA CELLULOSA AKTIEBOLAGET SCA SVENSKA CELLULOSA AKTIEBOLAGET SCA. SCA ANNUA AND SUSTAINABIIT...

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Transcript of SVENSKA CELLULOSA AKTIEBOLAGET SCA SVENSKA CELLULOSA AKTIEBOLAGET SCA. SCA ANNUA AND SUSTAINABIIT...

  • 2017

    Annual and Sustainability Report

    SVEN SK

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    LAG ET SC

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    A leading industrial

    ecosystem driven by

    the force of the forest

    CONTENTS

  • SCA’s Annual and Sustainability report 2017 is published in Swedish and this is an English translation. If there are differences between the Swedish and the English version, the Swedish version will prevail.

    Introduction 4 This is SCA 6 SCA’s value chain 8 The year at a glance 10 CEO’s message

    Operations 12 Values and strategy 14 Forest 18 Wood 20 Pulp 22 Paper 24 Renewable energy 26 Efficient logistics 28 SCA’s strategies in practice 30 The share and shareholders 32 Value creation for SCA’s stakeholders 34 Reduced impact on climate change 36 Responsible forest management 38 Care for people and the community 42 Value-based culture Board of Directors’ Report 44 Board of Directors’ Report 50 Risks and risk management 54 Sustainability report in accordance with Swedish

    Annual Accounts Act and auditor’s statement 55 Corporate governance 62 Presentation of the Board of Directors and Auditors 64 Presentation of the Executive Management Team

    Financial statements and notes 66 Contents 68 Consolidated statements and notes 113 Parent Company statements and notes

    Sustainability notes 123 About the Sustainability Report 124 Stakeholder dialogue and materiality analysis 128 Strategic priorities and sustainability targets 130 Value creation 133 Social data and environmental data Other 136 Signatures 137 Auditor’s report 140 Limited Assurance Report on the Sustainability

    Report 141 GRI Index 143 Multi-year summary 144 Definitions and glossary 145 About the Annual General Meeting 146 Addresses

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    Contents

    CONTENTS

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    This is SCA SCA is Europe’s largest private forest owner with 2.6 million hectares of

    environmentally certified forest land in northern Sweden. Based on this unique resource, SCA has developed a resource-efficient industry

    to capture the greatest possible value from each tree, making use of every part. The company’s products include wood, pulp, kraftliner,

    publication paper and renewable energy.

    Forest SCA’s unique forest holding is a growing resource that provides access to high-qual- ity forest raw materials. The Group owns a total of 2.6 million hectares of forest in northern Sweden (an area slightly smaller than Belgium). 2 million hectares of which is productive forestland.

    Wood SCA is one of Europe’s leading suppliers of wood-based products for the industrial and building materials trade, with an annual production capacity of 2.2 million m3 of solid-wood products. SCA has five saw- mills, wood processing units with planing mills in Sweden, the UK and France, as well as three pellets factories.

    Pulp In the pulp market, SCA has positioned itself in the high- strength segment based on its excellent access to the Nordic long-fiber. The ongoing invest- ment in the Östrand pulp mill in Timrå will double production capacity from 530,000 tonnes to approximately 1,000,000 tonnes per year.

    Paper SCA produces kraftliner – paper for corrugated transport packaging – and publication paper for magazines, cata- logues and commercial print. Kraftliner is produced by SCA’s paper mills in Munksund, Piteå, and in Obbola, Umeå, with a combined capacity of 865,000 tonnes per year. Publication paper is produced at the Ortviken paper mill in Sundsvall, with a capacity of 775,000 tonnes per year.

    INTRODUCTION / THIS IS SCA

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    Sawmills

    Publication paper

    Kraftliner

    Pulp

    Pellets

    Wood processing

    Nurseries

    SCA’s forest

    Well-invested industry close to the forest and customers

  • Integrated value chain maximizes value

    creation SCA has an effective and integrated value chain with environmentally certi-

    fied forest operations and modern production facilities located close to its forest holdings. SCA’s rapidly growing forest captures and binds CO2, the company’s products contribute toward a more sustainable society and

    the renewable fiber can replace products based on fossil raw materials.

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    INTRODUCTION / SCA’s VALUE CHAIN

    Wind power Bollsta sawmill

    Bionorr pellets mill

    Bogrundet tree nursery

    Östrand pulp mill

    Port of Tunadal

    District heating

    Ortviken paper millR&D

    Centre

    Tunadal sawmill

  • The forest SCA’s forests are responsibly managed. The forest is managed so that it will be as rich in timber, biodiversity and nature experience in the future as today.

    Bollsta sawmill The large logs from a pine tree are sent to the Bollsta sawmill, where they are turned into high-quality wood products. The bark is used for energy production, chips are used as a pulp raw mate- rial and sawdust is processed into pellets.

    Östrand pulp mill Smaller pine logs are delivered to Östrand pulp mill in Timrå, where, together with sawmill chips, it is used as raw material in the production of kraft pulp.

    Tunadal sawmill The large spruce logs are delivered to Tunadal sawmill. The bark is used for energy production in the nearby Ortviken paper mill. Chips are used at the Östrand pulp mill. Sawdust is converted into pellets. All parts of the tree are used.

    Ortviken paper mill The smaller logs from spruce trees are delivered to the Ortviken paper mill where they are used to manufacture mechanical pulp, which together with kraft pulp from Östrand is converted into high-quality publication paper for magazines, catalogues and commercial print.

    Bionorr pellets The pellets mill in Härnösand uses sawdust to produce pellets used for heating in private homes or for fuelling large boilers, such as the chemical recovery system at the Östrand pulp milll.

    District heating Sundsvall-Timrå In addition to forest products, the Ortviken paper mill and Östrand pulp mill also supply heating to the local communities. The dis- trict heating grids in Sundsvall and Timrå are both supplied with energy from SCA.

    Wind power SCA’s forests contain numerous areas with good conditions for wind power. 301 wind turbines produce 2.3 TWh of green elec- tricity per year on SCA land and there is potential for many more.

    R&D Centre (and Mid Sweden University) SCA’s research and development center is located at the universi- ty campus in Sundsvall and collaborates in the development of new products and businesses.

    Port of Tunadal SCA’s forest land and mills are located in northern Sweden, but the company’s customers are all over the world. Efficient logistic solutions are needed and the entire world can be reached from Tunadal.

    Norrbotten and Västerbotten The image shows SCA’s well-developed value chain in Väster- norrland. In the Norrbotten and Västerbotten areas, SCA has a similar value chain with the Munksund and Rundvik sawmills, the Munksund and Obbola paper mills and pellets production at the co-owned Bioenergi site in Luleå.

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    1.50

    The year at a glance 2017 was a strong year for SCA, with a generally healthy demand and price trend within all segments and geographies. Sales increased by 8 percent and adjusted EBITDA grew by 15 percent. The main contribu- tion toward the improvement was from kraftliner and wood products.

    INTRODUCTION / THE YEAR AT A GLANCE

    16,664 Net sales

    SEKm

    3,761 22.6% Adjusted EBITDA

    SEKm

    Adjusted EBITDA margin

    1.6× 13.1% Net debt / EBITDA Adjusted industrial return on capital employed, excluding

    the ongoing investment at Östrand

    2.67 Earnings per share

    SEK SEK

    Proposed dividend per share

  • 2017 2016

    SEKm SEKm

    Net sales 16,664 15,373

    Adjusted EBITDA 3,761 3,269

    Adjusted EBITDA margin 22.6% 21.3%