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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.

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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 Q3 2025 Earnings: A Mixed Bag

SCA reported a net sales decrease of 5% to SEK 5 billion, driven by negative currency effects and lower prices. EBITDA decreased 18% to SEK 1.6 billion, driven by negative currency effects, lower prices, and higher maintenance stop costs. The company's EPS came in at SEK 1.19, slightly below estimates of SEK 1.23. The EBITDA margin stood at 33%, indicating a relatively stable performance despite challenging market conditions.

Publication Date: Oct -27

📋 Highlights
  • EBITDA and Margin:: EBITDA reached SEK 1.64 billion with a 33% margin in Q3 2025.
  • Forest Segment Growth:: Sales increased 14%, EBITDA rose 17% YoY due to stable wood supply and higher harvesting levels.
  • Pulp Segment Decline:: Sales fell 21%, EBITDA dropped 57% YoY driven by lower prices and higher wood costs.
  • Containerboard Mixed Performance:: Sales rose 10% from volume/price growth, but EBITDA fell 39% due to maintenance costs and higher raw material expenses.
  • CapEx Guidance:: 2025 CapEx estimated at SEK 2.8 billion, with strategic spending decreasing in 2026 by ~SEK 200 million.

Segmental Performance

The Containerboard segment saw sales increase by 10%, driven by higher delivery volumes and prices. However, EBITDA was down 39% due to planned maintenance stops and higher wood raw material costs. The Forest segment reported a 14% increase in sales and a 17% increase in EBITDA, driven by higher harvesting levels. The Pulp segment saw a 21% decrease in sales and a 57% decrease in EBITDA, mainly due to lower prices and higher wood raw material costs.

Guidance and Outlook

SCA expects a cost pressure in its solid wood business, with prices for pulpwood stabilizing and decreasing. The company is focused on ramping up its big projects, with Obbola expected to produce 600,000 tonnes in 2025 and 700,000 tonnes in 2026. As Ulf Larsson noted, "We are focused on ramping up our big projects, and no new big projects will be started due to market uncertainty."

Valuation

SCA's current valuation metrics indicate a P/E Ratio of 23.9, a P/B Ratio of 0.87, and an EV/EBITDA of 12.23. The Dividend Yield stands at 2.33%. Analysts estimate revenue growth at 3.6% for next year. Given the current valuation, the stock appears to be fairly priced, with the market expecting moderate growth.

Operational Highlights

The company's CapEx guidance for 2025 and 2026 indicates a decrease in strategic CapEx in 2026. SCA expects to invest around SEK 2.8 billion in 2025, with a slight increase expected in 2026. The company's focus on organic growth and its cautious approach to M&A suggest a disciplined approach to capital allocation.

3. NewsRoom

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

Sep -10

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

Apr -26

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

Apr -21

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

Oct -26

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

Oct -09

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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: 6.5/10

Value: 6.4

Growth: 4.8

Quality: 5.7

Yield: 10.0

Momentum: 2.5

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
BillerudKorsnäs

A-Score: 4.8/10

Value: 7.9

Growth: 4.9

Quality: 5.0

Yield: 5.6

Momentum: 0.5

Volatility: 5.0

1-Year Total Return ->

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Stock-Card
Holmen

A-Score: 4.6/10

Value: 4.1

Growth: 4.6

Quality: 6.2

Yield: 3.1

Momentum: 1.0

Volatility: 8.7

1-Year Total Return ->

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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 ->

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Stock-Card
SCA

A-Score: 4.2/10

Value: 3.6

Growth: 1.8

Quality: 6.6

Yield: 2.5

Momentum: 2.0

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
Stora Enso

A-Score: 3.7/10

Value: 8.3

Growth: 1.3

Quality: 2.1

Yield: 6.2

Momentum: 1.5

Volatility: 3.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

123.0$

Current Price

123$

Potential

-0.00%

Expected Cash-Flows