Download PDF

1. Company Snapshot

1.a. Company Description

Svenska Cellulosa Aktiebolaget SCA (publ), a forest products company, develops, produces, and sells forest, wood, pulp, and containerboard products.The company offers various wood products, industrial components, standard wood products, and raw materials, as well as logistic, warehouse, and IT solutions for the wood industry.It also provides pulp products under the Pure, Star, and Cirrus names; and Kraftliner products for consumer durables, electronics, hazardous goods, industrial products, fruit and vegetables, frozen foods, etc.


In addition, the company offers forwarding services for various transport modes, such as truck, rail, and barge, as well as marine and road and rail transport; terminal services; and liquid and solid biofuels, pellets, stall pellets, and wind energy.Further, it engages in the processing and distribution of wood products; production of Kraft and chemical thermomechanical pulps, and containerboards; and generation of energy from wind power projects, biomass, and by-products.The company has operation in Sweden, the United States, the United Kingdom, Germany, rest of Europe, Asia, and internationally.


Svenska Cellulosa Aktiebolaget SCA (publ) was founded in 1929 and is headquartered in Sundsvall, Sweden.

Show Full description

1.b. Last Insights on SCA

Svenska Cellulosa Aktiebolaget SCA's recent performance was driven by strong revenue and EBITDA growth in Q3 2024, despite challenges in renewable energy and operational costs. The company's strategic investments and high demand in the forest and pulp segment contributed to this growth. Additionally, the company's focus on sustainability and renewable energy initiatives is expected to drive future growth. The company's strong cash position also enables it to pursue share buybacks, which can be a positive catalyst for shareholders.

1.c. Company Highlights

2. SCA's 2025 Earnings Report: A Mixed Bag

SCA's financial performance in 2025 was marked by a revenue of SEK 19.1 billion, with an EBITDA of SEK 6.6 billion and an EBITDA margin of 32%. However, the company's EPS came in at 0.691, below analyst estimates of 1.05. The proposed dividend of SEK 3 per share was in line with the company's aspiration to provide a long-term stable and increasing dividend to shareholders.

Publication Date: Feb -09

📋 Highlights
  • EBITDA Performance:: Achieved SEK 6.6 billion EBITDA (32% margin) despite wood cost increases and currency headwinds.
  • Proposed Dividend:: Maintained stable dividend at SEK 3 per share, aligning with long-term shareholder value goals.
  • Strategic Investments:: New paper machine in Obbola and Gothenburg biorefinery boosted delivery volumes and productivity.
  • Forest Valuation Decline:: Book value dropped to SEK 104 billion due to 3-year average wood price decreases.
  • Storm Impact:: 100,000 cubic meters of windfall timber increased harvesting costs but offset by higher delivery volumes and prices.

Segment-wise Performance

The Forest segment saw stable harvesting levels, contributing to a balanced supply of wood raw materials. The Wood segment reported a 10% year-over-year increase in sales, driven by higher prices for wood raw materials. However, the market for solid wood products remains slow. The Pulp segment saw a 14% year-over-year decline in sales, mainly due to lower prices and a negative currency effect. The Containerboard segment reported an 8% year-over-year increase in sales, driven by higher delivery volumes and higher prices.

Valuation Metrics

SCA's current valuation metrics indicate a P/E Ratio of 25.81, a P/B Ratio of 0.81, and an EV/EBITDA of 14.78. The Dividend Yield is 2.55%. These metrics suggest that the company's stock may be fairly valued, with a moderate dividend yield. According to Ulf Larsson, "our aspiration is to provide a long-term stable and increasing dividend to shareholders," which may be attractive to income investors.

Outlook and Guidance

SCA expects harvesting volumes to remain around 5 million cubic meters in 2026. The company anticipates a minor decrease in harvesting volumes from its own forest due to supporting private forest owners. Analysts estimate next year's revenue growth at 3.7%. The company's guidance on CapEx is around SEK 1.5 billion for next year, with strategic CapEx spillover from this year to next year estimated at SEK 400-500 million.

Challenges and Opportunities

SCA faces challenges in the form of increasing wood raw material costs and a challenging market environment. However, the company's self-sufficiency in strategic areas and strategic investments, such as the new paper machine in Obbola and the biorefinery in Gothenburg, are expected to drive growth. The market for liquid biofuels improved during the later part of 2025, and electricity prices continued to be low.

3. NewsRoom

Card image cap

Assessing SCA (OM:SCA B) Valuation After Recent Share Price Decline

Sep -10

Source:

Card image cap

Svenska Cellulosa AB (SVCBF) Q1 2025 Earnings Call Highlights: Strong EBITDA and Sales Growth ...

Apr -26

Source:

Card image cap

Svenska Cellulosa AB (SVCBF) Q4 2024 Earnings Call Highlights: Strong EBITDA and Dividend ...

Apr -21

Source:

Card image cap

Svenska Cellulosa AB (SVCBF) Q3 2024 Earnings Call Highlights: Strong Growth in Forest and Pulp ...

Oct -26

Source:

Card image cap

Svenska Cellulosa AB (SVCBF) Q2 2024 Earnings Call Highlights: Strong Revenue Growth Amid ...

Oct -09

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.40%)

6. Segments

Pulp

Expected Growth: 3.5%

SCA's pulp segment growth is driven by increasing demand for sustainable packaging, rising global tissue consumption, and strategic expansion into emerging markets. Additionally, SCA's focus on operational efficiency, cost savings, and investments in new technologies have improved production capacity and reduced costs, contributing to the 3.5% growth rate.

Containerboard

Expected Growth: 3.8%

SCA's containerboard segment growth of 3.8% is driven by increasing e-commerce demand, rising packaging needs, and growing demand for sustainable packaging solutions. Additionally, SCA's strategic investments in production capacity expansion, cost savings initiatives, and product innovation are contributing to the segment's growth.

Wood

Expected Growth: 2.8%

SCA's wood segment growth of 2.8% is driven by increasing demand for sustainable packaging, rising construction activity in Europe, and strategic investments in modernizing production facilities. Additionally, the company's focus on eucalyptus pulp production and expanding presence in Asia contribute to its growth momentum.

Forest

Expected Growth: 3.2%

The 3.2% growth in Forest segment of Svenska Cellulosa Aktiebolaget SCA (publ) is driven by increasing demand for sustainable packaging, strong pulp prices, and efficient production processes. Additionally, strategic investments in forestry management and wood supply chain optimization have contributed to the segment's growth.

Renewable Energy

Expected Growth: 5.0%

SCA's 5.0% growth in Renewable Energy is driven by increasing demand for sustainable forestry practices, government incentives for bioenergy production, and strategic investments in wind power and biogas facilities. Additionally, growing electricity demand from data centers and electrification of transportation fuels growth in this segment.

7. Detailed Products

Tissue

SCA's tissue products include toilet paper, paper towels, and handkerchiefs, designed for personal hygiene and household use.

Forest Products

SCA's forest products include sawlogs, pulpwood, and bioenergy products, sourced from sustainably managed forests.

Packaging Paper

SCA's packaging paper products include kraftliner, sack paper, and containerboard, designed for packaging and transportation.

Pulp

SCA's pulp products include bleached and unbleached pulp, used in the production of paper, board, and tissue products.

Renewable Energy

SCA's renewable energy products include bioenergy, heat, and power, generated from sustainable forestry and waste management.

Wood Products

SCA's wood products include sawn timber, planed goods, and engineered wood products, designed for construction and furniture making.

8. Svenska Cellulosa Aktiebolaget SCA (publ)'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Svenska Cellulosa Aktiebolaget SCA (publ) is medium due to the availability of alternative products such as recycled fibers and other sustainable materials.

Bargaining Power Of Customers

The bargaining power of customers for Svenska Cellulosa Aktiebolaget SCA (publ) is low due to the company's strong brand reputation and diversified customer base.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Svenska Cellulosa Aktiebolaget SCA (publ) is medium due to the company's dependence on wood pulp and other raw materials.

Threat Of New Entrants

The threat of new entrants for Svenska Cellulosa Aktiebolaget SCA (publ) is low due to the high barriers to entry in the pulp and paper industry.

Intensity Of Rivalry

The intensity of rivalry for Svenska Cellulosa Aktiebolaget SCA (publ) is high due to the competitive nature of the pulp and paper industry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 11.01%
Debt Cost 5.01%
Equity Weight 88.99%
Equity Cost 5.76%
WACC 5.68%
Leverage 12.37%

11. Quality Control: Svenska Cellulosa Aktiebolaget SCA (publ) passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Navigator

A-Score: 6.2/10

Value: 6.0

Growth: 4.8

Quality: 5.7

Yield: 10.0

Momentum: 1.0

Volatility: 9.7

1-Year Total Return ->

View Full Report
Stock-Card
BillerudKorsnäs

A-Score: 5.0/10

Value: 7.3

Growth: 4.9

Quality: 4.6

Yield: 5.0

Momentum: 3.0

Volatility: 5.0

1-Year Total Return ->

View Full Report
Stock-Card
Stora Enso

A-Score: 4.7/10

Value: 8.5

Growth: 1.3

Quality: 2.9

Yield: 5.6

Momentum: 6.0

Volatility: 3.7

1-Year Total Return ->

View Full Report
Stock-Card
Holmen

A-Score: 4.6/10

Value: 4.3

Growth: 4.6

Quality: 5.9

Yield: 3.1

Momentum: 1.0

Volatility: 8.7

1-Year Total Return ->

View Full Report
Stock-Card
Mondi

A-Score: 4.5/10

Value: 6.1

Growth: 2.0

Quality: 2.8

Yield: 10.0

Momentum: 1.0

Volatility: 5.0

1-Year Total Return ->

View Full Report
Stock-Card
SCA

A-Score: 4.1/10

Value: 3.4

Growth: 1.8

Quality: 5.8

Yield: 3.1

Momentum: 1.5

Volatility: 8.7

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

117.05$

Current Price

117.05$

Potential

-0.00%

Expected Cash-Flows