25,716 3,235 13 % 29 % Institutions in More Than 100 Countries
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Net sales and operating margin SEKm % 25,000 15 20,000 12 15,000 9 10,000 6 5,000 3 0 0 05 06 07 08 09 Net sales Margin Operating cash flow SEKm 5,000 4,000 3,000 2,000 1,000 0 05 06 07 08 09 Operating profit and ROCE SEKm % 3,000 30 2,400 24 1,800 18 1,200 12 600 6 0 0 05 06 07 08 09 Operating profit ROCE SCA offers incontinence care prod- Share of Group ucts, baby diapers and feminine care products for the markets’ quality seg- ments. All three segments have a high development rate and new products are launched continuously. The com- Net sales, 23% Operating profit, 32% Capital employed, 11% Av. no. of employees, 15% pany’s products are sold under SCA’s own brands and retailers’ brands and are distributed via retailers and care 25,716 3,235 13 % 29 % institutions in more than 100 countries. Sales, SEKm EBIT, SEKm EBIT margin ROCE1) 1) Return on capital employed. Board of Directors’ Report Personal Care Personal Care Market position and brands Innovation and product development Strategic priorities: SCA is one of the world’s largest players in per- SCA invests considerable resources in its • Develop SCA’s world-leading position in sonal care products and the global market efforts to gain deep insight into consumer and incontinence care using the Tena brand. leader in incontinence care products. SCA has customer needs. This insight forms the basis • Continue the programmes involved in the a portfolio of global, regional and local brands. for the Group’s innovations and product devel- global brand platforms and utilise synergies. Tena – SCA’s brand for incontinence care – opment. The number of launches of new and • Increase the growth rate in fast-growing generates sales of more than EUR 1bn annu- upgraded products is on the rise. The empha- markets in Eastern Europe, Southeast Asia, ally, and is a world leader in incontinence care. sis is on function, fit, design, and costs. Latin America and the Middle East. In baby diapers, SCA is the market leader in • Continue to gain in-depth insight into con- the Nordic region, with its Libero brand Targets sumer and customer needs and apply this accounting for a market share of more than 5–7% organic growth, with a minimum of 30% knowledge to product development and in- 60%, and is also displaying rapid growth in return on capital employed. crease the launch rate of innovative product Russia and parts of Eastern Europe. In South- offerings. east Asia, SCA holds a leading position with its Production and sales channels • Continuously enhance production and dist- Drypers brand and in South America with 23 plants in 20 countries. Products are distrib- ribution efficiency. Pequeñín. In feminine care, SCA is market uted via the retail trade and care institutions in • Grow through category expansion under leader in the Nordic region, as well as in large more than 100 countries. global brands and a greater share of high- and rapidly expanding markets in Latin Amer- value products. ica. The Libresse, Saba, Nosotras and Nana Average number of employees brands are supported by SCA’s global brand 7,269 (7,648) –5%. platform. Strategy Incontinence care fast-growing markets in Eastern Europe, Russia, Production and business processes SCA’s top priority in incontinence care is main- the Middle East and Southeast Asia. Production efficiency is consistently improved by taining a high growth rate in all segments, with In the case of retailers’ brands, the aim is to means of modernisation and investments in new strengthened global market leadership in devel- enhance the efficiency of the business model to and existing facilities. As a result, these efforts oped markets and establishing leading positions ensure competitiveness and profitability. enhance the cost structure and strengthen prod- in Eastern Europe, Southeast Asia and Latin uct quality and operational reliability. America. Increasing understanding and accept- Feminine care ance among consumers is crucial as regards SCA holds strong, selective market positions in Outlook incontinence, a topic that is often surrounded by Europe, Latin America, Australia and New Zea- Incontinence care offers considerable long-term social taboos. Demand is strengthened through land, and is focusing on growth in the fast-grow- potential as a result of an aging population in information and marketing supported by effec- ing markets in Eastern Europe and the Middle mature markets, a low market penetration rate tive, comfortable and easily accessible products. East. Feminine care products are developed for and access to highly populated growth countries. SCA aims to enhance its leading position through the company’s own regional and local brands, SCA develops and upgrades its product range for superior consumer insight, innovative product which are supported by a global brand platform. all sales channels that are expected to show con- development and efficient production. Based on in-depth consumer and customer tinuing high demand. In the feminine care and insight, SCA prioritises investments in new prod- baby diapers segments, the global brand plat- Baby diapers uct concepts and marketing and endeavours to forms offer favourable potential for continuing SCA plans to continue strengthening the favoura- strengthen its competitiveness through continu- growth in markets with a low penetration rate and ble positions of its own brands in such mature ous efficiency enhancement and cost-effective high demand, such as Eastern Europe, Latin markets as the Nordic region, New Zealand and production in such areas as Eastern Europe. America, the Middle East and Southeast Asia. selected markets in South America, as well as in SCA Annual Report 2009 23 Board of Directors’ Report Personal Care Market The global market for personal care products is driven by innovation, has annual sales of just SCA’s market positions over SEK 300bn and is growing at a rate of some 5% annually. Europe accounts for 30% and North North America for 20% of the overall market. The market is dominated by a small number of Europe America Global major global players offering well-known brands. In mature markets, baby diapers and feminine Incontinence care 1 3 1 care products have attained high market penetration, while the aging population and low market Baby diapers 3 – 4 penetration drive demand for incontinence products. In developing countries, the use of all prod- Feminine care 3 – 5 uct categories is expanding as the level of disposable income increases and insight into the health benefits of hygiene grows. In 2009, mature markets were distinguished by stable demand, while fast-growing markets displayed a continuing robust increase in demand. Incontinence care global market leader in incontinence care, with Russia and parts of Eastern Europe. SCA also Incontinence affects between 5 and 7% of the sales in more than 100 countries. holds leading positions in parts of Southeast Asia world’s population. The global market totals SCA commands a very strong position in and Latin America. SCA markets baby diapers in some SEK 60bn, and is growing at about 5% Europe, with a market share of some 40%. some 70 countries. annually. Europe accounts for slightly more than 40% of the total market and North America for Baby diapers Feminine care just under 30%. Market growth is driven by a The global market totals approximately SEK The global market amounts to about SEK 100bn higher pace of innovation, increasing market 150bn, and is estimated to grow at about 6% and is growing by approximately 3% annually. The penetration, an aging population, rising house- annually. The European market accounts for European market accounts for about 25% and is hold incomes and growing welfare requirements. almost 30%, with annual growth of about 5%. dominated by pads, representing 50%, while Market penetration in emerging markets is low. The most significant growth is in Asia, Latin Amer- panty liners and tampons each account for 25%. Institutional care and homecare account for ica and Africa, where birth rates are high and In Europe, SCA is the third largest player, with a 62% of the global market. Here, the main focus is household incomes are rising. The majority of market share of 8%. The driving forces behind this on supplying high-quality products combined with children worldwide under the age of two still do market are a growing number of women of child- qualified advisory services that simplify handling not enjoy the practical and effective hygiene pro- bearing age and relatively low market penetration procedures and reduce costs for care providers. vided by disposable diapers, which means that in fast-growing countries, while growth is weaker The retail market is the fastest growing segment, there is significant future potential. in mature markets. The proportion of sales is accounting for 38% of the global market. SCA pro- SCA is the third largest player in the European increasing in Latin America, Russia, Eastern vides support through information, advertisements market, with a share of 12%. In the Nordic region, Europe, and the Middle East, where SCA is the and the development of products that are increas- SCA has more than 60% of the market with its market leader in several major markets. SCA sells ingly discreet, easy to use and effective. SCA is the Libero brand, which is also growing rapidly in feminine care products in more than 80 countries. Incontinence care – global market shares SCA, 24% Kimberly-Clark, 9% First quality products, 7% Unicharm, 7% Others, 53% Incontinence care – sales channels, Baby diapers – brand categories, Feminine care – brand categories, global market Europe Europe Institutional and home care, 62% Brands, 78% Brands, 86% Retail outlets, 38% Retailers’ brands, 22% Retailers’ brands, 14% 24 SCA Annual Report 2009 Board of Directors’ Report Personal Care Operations in 2009 Incontinence care continued to see favourable Operating profit rose by 11% to SEK 3,235m Key events demand, and SCA’s Tena brand increased its (2,912), due to an improved product mix and • Higher production capacity in incontinence sales by 11%.