PPT - Market Update Handout January 2012 · PPT Stockholm 2012-01-26 Market Update Macro Economy Fiber markets Tissue Packaging Graphic Paper Summary SCA Business Intelligence. 2

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Market Update PPT Stockholm 2012-01-26

Market Update

Macro EconomyFiber marketsTissuePackagingGraphic PaperSummary

SCA Business Intelligence

2

Economic outlook

Market Update

Macro EconomyFiber marketsTissuePackagingGraphic PaperSummary


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Market pulpWorld-20 shipments up 3.5% in 2011 – thanks to China

Source: PPPC, PPI Europee

N.B. NBSK price at low level, first entry of the monthMarket Pulp/2011-12-22/mj

High producer inventories have put pressure on prices; stocks down in December – enough for price turnaround?

Sources: PPPC (inventories), RISI (price)

.

Updated: 2011-12-22

Days of supply 34 (38) Days of supply 34 (38)


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Pulp prices in China close to bottom, huge imports expected to reach China in January

Source: GTIS (imports), FOEX (price Europe), RISI PPI Asia (price China)

Imports updated until: Dec-11

Prices updated until Nov and Dec-11


Recovered paper, Europe:Price erosion halted in January

Prices updated until: Dec-11


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Recovered Paper, ChinaOCC price edging up in December

Source: GTIS (imports), RISI World Recovered Paper Monitor (price)

Updated until: dec ‐11 (imports) & jan ‐12 (price)


Market Update

SummaryMacro EconomyFiber MarketsTissuePackagingGraphic PaperSummary


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Tissue – competitive mature markets; rapid Chinese expansion

Stable underlying demand for Consumer Tissue, but competitive retail markets puts pressure on all suppliers of FMCG Price increases in 2h 2011 Demand for Commercial

Tissue in line with general economic recovery Huge expansion of

Chinese capacity 29 PM decided 2011-2012 38 more planned , not yet

confirmed


Market Update

SummaryMacro EconomyFiber MarketsTissuePackagingGraphic PaperSummary


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Corrugated – demand slowing down after weak cyclical recovery; prices peaked in Q3

Sources: SCA (Europe), RISI Paper Packaging Monitor

2009: ‐ 6.3%2010: + 4.9%2011: 1‐11 + 0.8%

2009: ‐ 7.7%2010: + 3.5%2011: 1‐11 + 0.5%

Corrugated prices updated until: Nov-11

Corrugated Volumes updated until: Nov-11

US Volumes updated until: Nov-11

US Prices updated until: Nov-11


European containerboard prices down

Prices updated until: Jan-12

Volumes updated until: Dec-11 US Volumes updated until: Nov-11

US Prices updated until: Nov-11

Sources: SCA (Europe), RISI Paper Packaging Monitor


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Market Update

SummaryMacro EconomyFiber MarketsTissuePersonal CarePackagingGraphic PaperSummary


Advertising markets have picked up, but not much in print

‐36%

‐28%

‐20%

‐12%

‐4%

4%

12%

20%

95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12

Quarterlymagazine ad page index, USASource: Nielsen Source: Nielsen

Source: RISISource: IFO


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Print share of advertising decliningWestern Europe

Adspend in printed media and on the Internet

US$ billions

Source: ZenithOptimedia, Advertising Expenditure Forecasts October 2011

Media share of adspend 2010

0

20

40

60

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Print

Internet


Stagnant magazine advertisingInternet adspend growing fast

Adspend in Magazine and on the Internet, Western Europe

US$ billions

Source: ZenithOptimedia, Advertising Expenditure Forecasts October 2011

Media share of adspend 2010

0

10

20

30

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Internet

Magazine


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New actors, new business models, new media, new advertising channels


The Tablet – a game changer?Yes!


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Daily newspaper circulation Germany

-2,7%

20

22

24

26

28

30

32

34

36

38

-83 -85 -87 -89 -91 -93 -95 -97 -99 -01 -03 -05 -07 -09 -11

Mill

ion

co

pie

s

Printed Sold

Annual Change in Printed :

Source: IVW

Media/2011-11-24/mj


Consumer magazine circulationGermany

Source: IVW

Media/2011-11-24/mj


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Newsprint Global demand 2000-2010, -1.8% p.a.

0

10000

20000

30000

40000

-00 -01 -02 -03 -04 -05 -06 -07 -08 -09 -10

North America Western EuropeChina Latin America

33%

28%

5%5%

29%16%

27%

14%6%

37%

2000 2010

38,9 mt 32,3 mt


NewsprintDemand and Capacity Changes 2000-2010

-10 -5 0 5 10

Total

Others

Latin America

Other Asia

China

Eastern Europe

Western Europe

North America Capacity

Demand

Source: Pöyry

Million tonnes


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Printing and Writing PaperDemand and Capacity Changes 2000-2010

-10 -5 0 5 10 15 20

Total

Others

Asia

Eastern Europe

Western Europe

North AmericaCapacity

Demand

Source: Pöyry

Million tonnes


Newsprint: Shipments from Western European producers down 3% in 2011

Sources: Cepiprint (shipments), RISI (price)

Updated: 2012-01-16


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LWC Paper: Weak demand in Western Europe partly compensated by strong exports; total shipments down 1% in 2011

Updated: 2012-01-16

Sources: Cepiprint (shipments), RISI (price)


0%

5%

10%

15%

2009200820072006200520042003200220012000199919981997199619951994199319921991

EBIT margin

Long term profitability trending down

Source: JP Smart Terminal

% Weighted Average EBIT margin for top 20 Paper and Paperboard producers in Western Europe


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European Consolidation 2000-2010 Top 3 producers, Capacity share

0% 10% 20% 30% 40% 50% 60% 70%

Tissue

Containerboard

Cartonboard

Uncoated WF

Mechanical P&W

Newsprint

Paper & Board2000

2010

+8%


Outlook 2012

Slower global growth - Europe near recession

• Weak underlying P&B demand in Mature Markets; better in D&E; China will be key

Pulp and Recovered Paper • Prices seem to have bottomed after 6-8

months decline, next move up

Tissue • Fair demand in competitive markets

Packaging• Slowing demand and pressure on prices

Graphic Paper• Trend shift in media consumption; lower

demand I all mature markets

Poor Industry profitability• Consolidation and closures


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Documents

PPT - Market Update Handout January 2012 · PPT Stockholm 2012-01-26 Market Update Macro Economy Fiber markets Tissue Packaging Graphic Paper Summary SCA Business Intelligence. 2