SCA (SCA) Investor Update summary

CTMP investment

• Planned SEK 1.45bn investment at Ortviken to produce 300,000 tonnes of CTMP pulp annually, using existing infrastructure; production expected to start in early 2023.

• Investment expected to add ~SEK 0.3bn to annual EBITDA.

• Existing 100,000-tonne CTMP capacity at Östrand would be phased out when the new line starts, allowing a future increase in kraft pulp production there.

Publication paper proposal

• Consultations initiated on discontinuing publication paper production at Ortviken; negotiations cover the closure plan, CTMP investment and effects on other operations.

• Western European publication paper demand declined ~5% annually since 2008; pandemic-related demand fell a further 30–40%.

• Three Ortviken paper machines generated ~SEK 4bn in annual sales; weak demand and pricing led to negative profitability.

Expected impact

• Proposed closure would affect ~800 employees, mainly at Ortviken; consultations and efforts to find solutions for affected employees were planned.

• Non-recurring closure costs with cash flow effects estimated not to exceed SEK 0.9bn, plus an impairment of ~SEK 1.1bn.