SCA Focused on Costs, Cash Flow, Capital Efficiency, Innovation, Growth

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SCA, Stockholm, Sweden, earlier this month (September 19) hosted the Capital Markets Day in Stockholm. The company’s strategy of recent years of focusing on costs, cash flow, capital efficiency, and innovation remained firmly in place this year. Increased growth was added to the Group’s strategic agenda in 2010.

"SCA has implemented key efficiency-enhancement measures and boosted the pace of its new product launches. We have managed to grow both in mature and emerging markets. Our global TENA and Tork brands, each which generate more than EUR 1 billion in annual sales, have strengthened their market shares. To capitalize on the growth opportunities in the hygiene operation, we have conducted acquisitions and investments in a number of growth markets, including Brazil, Russia, Turkey, Mexico, and Argentina," said Jan Johansson, SCA president and CEO.

Johansson pointed out that the completed action programs have reduced the cost base and made SCA a stronger company than it previously was. Focusing on cash flow has led to lower net debt and improved the debt payment capacity, giving SCA better means to grow. SCA will grow, it says, by reinforcing existing and establishing new market-leading positions. The aim is to reduce the number of local brands and increase the number of global brands.

"SCA is currently the world’s third largest hygiene company and hygiene products now account for 60% of the Group’s sales. The aim is to continue to grow by capitalizing on the growth opportunities created by the global population increase, improved prosperity, an aging population, and greater market penetration. We can also see a rising consumer interest in convenience and sustainability," said Johansson.

SCA’s Group-wide financial target of a return on capital employed of 13% over the course of an economic cycle remains in place.