SCA (SCA) Q2 2024 earnings summary

Executive summary

• Net sales rose 15% year-over-year in Q2 2024 to SEK 5,291m, driven by higher prices, volumes, and positive currency effects.

• EBITDA increased 11% to SEK 1,888m, with a margin of 35.7%, supported by price increases and favorable currency movements.

• Strategic investments in Obbola, Ortviken, and Gothenburg are finalized and ramping up, boosting delivery volumes.

• Stronger market for fiber-based products and higher harvesting of own forest, though wood raw material costs increased.

• Q2 2024 saw sequential and year-over-year improvements in net sales and EBITDA, mainly due to higher selling prices and volumes in key segments.

Financial highlights

• Net profit reached SEK 960m in Q2 2024, or SEK 1.37 per share, with an effective tax rate around 20%.

• Operating cash flow was SEK 526m in Q2 and SEK 1,203m for H1 2024, down from SEK 1,851m a year earlier.

• Net debt increased to SEK 11,829m at June 30, 2024, due to dividend payments; net debt/EBITDA at 1.8x, net debt/equity at 11.4%.

• EBITDA margin for Q2 2024 was 35.7%; H1 2024 margin was 35.4% (down from 40.0% in H1 2023).

• Net profit for H1 2024 was SEK 1,749m, with a net margin of 17.8%.

Outlook and guidance

• Expect continued positive demand and sequential price increases for fiber-based products in Q3.

• Raw material costs, especially for wood, are expected to continue rising.

• Renewable energy segment faces continued short-term pressure, with improvement expected in 2025 as mandates increase.

• Q3 earnings expected to be negatively impacted by a SEK 60m effect from a recovery boiler leakage in the Pulp segment.

• Pulp market expected to remain tight after summer due to maintenance stops and limited new capacity.