SCA's Q2 net profit rises to 2.02B Swedish kronor from 1.53B kronor in year-ago period, on 11.7% year-over-year jump in net sales, to 25.83B kronor; emerging markets accounted for 31% of Q2 sales, helped by acquisition of majority shareholding in Vinda
July 18, 2014
– JANUARY 1–JUNE 30, 2014 (compared with same period a year ago)
We have presented a report for the second quarter of 2014 with continued sales growth, higher earnings and a higher margin compared with the same period a year ago. During the quarter, several innovations and product launches were carried out under the Libero, Libresse, TENA and Tork brands. The efficiency programs in the hygiene and forest products operations continue to deliver cost savings according to plan. Our Tissue and Forest Products business areas showed significant earnings growth. Personal Care was negatively impacted by higher raw material costs and negative exchange rate effects in emerging markets.
Consolidated net sales for the second quarter of 2014 grew 12% compared with the same period a year ago. Organic sales growth was 3.3% and pertained to all business areas. Growth was mainly in emerging markets and in the Forest Products business area.
Operating profit for the second quarter of 2014, excluding items affecting comparability, rose 29% compared with the same period a year ago. The increase is mainly attributable to a better price/mix, higher volumes, cost savings, the acquisition of the majority shareholding in the Chinese company Vinda, and gains on forest swaps. The operating margin excluding items affecting comparability increased by 1.5 percentage points to 11.4%. Earnings per share grew by 56%. Operating cash flow increased by 28% to SEK 2,060m.
As part of our strategy to grow in emerging markets, SCA and Vinda have concluded an agreement under which Vinda will take over SCA’s hygiene operations in China, which will lead to mutual benefits in distribution, sales, innovation, and research and development. SCA’s joint venture in Australia, New Zealand and Fiji – Asaleo Care – has been floated on the Australian Securities Exchange (ASX). SCA’s holding in Asaleo Care after the IPO is approximately 32.5%.
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Industry Intelligence Inc. editor's note: In an omitted table, SCA reports second-quarter 2014 net income of 2.017 billion Swedish kronor and net sales of 25.829 billion kronor, compared with second-quarter 2013 net income of 1.527 billion kronor and net sales of 23.119 billion kronor.