SCA pack profits slump as plant closures complete: with video

The Swedish paper and packaging giant this morning reported 2009 turnover of SEK110bn (£9.6bn), a half-percent increase on 2008. However, pre-tax profit climbed 28% to SEK8bn.

However, operating profit in the company’s packaging division, which accounts for 25% of sales, dropped from SEK1.4bn in 2008 to just SEK413m in 2009. The company blamed poor

Jan Johansson, SCA president and CEO, said today that the company’s restructuring programme, which was outlined last April, had completed and had already led to cost savings of around SEK300m by the end of December 2009. 

Under the plans, SCA closed 11 factories and cut staff numbers by around 1,500. One plant to close was the New Hythe testliner plant in the UK. The company’s restructuring costs for 2009 were revealed today to have reached SEK1.4bn, or around £125m.

Demand for corrugated was also weak in 2009, the company reported, and SCA cut production by 350,000 tonnes during the year.

However, Johansson also said that the decline in demand for corrugated had stopped and gave a cautiously optimistic outlook for 2010. “Demand for packaging is expected to strengthen, and in Europe there are indications of market growth of 2%-3%,” he said.

The numbers come three weeks after Alcan veteran Michael Cronin was named as the new head of SCA Packaging.

Cronin’s predecessor Phil Almond exited SCA last August when the company said it needed a president “capable of leading major changes and with thorough industrial experience”.

Click on the video screen below for more views on the results from Jan Johansson.

SCA FULL-YEAR RESULTS 2009
All figures in SEKm

Overall
Turnover 110,857m (2008: 110,449m)
Operating profit 9,648m (2008: 8,554m)
Restructuring costs 1,458m (2008: 0)
Pre-tax profit 8,004m (2008: 6,237m)

Packaging division
Turnover 28,359m (33,441m)
Operating profit 413m (2008: 1,493m)

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