F3. Joint ventures and associates
AP ACCOUNTING PRINCIPLES
Joint arrangements
SCA classifies its joint arrangements as joint ventures or joint operations, which are presented in further detail in Note F4.
Joint ventures
Joint ventures are defined as companies in which SCA together with other parties, through an agreement, has shared control over operations. A joint venture entitles the joint owners to the net assets of the investment. Joint ventures are recognized in accordance with the equity method, meaning that a net item including the goodwill will be recognized for each joint venture in the balance sheet. A share in profits is recognized in the income statement as “profit from holdings in joint ventures.” Share in profits is calculated on the basis of SCA’s share of equity in the respective joint venture. Joint arrangements recognized in accordance with the equity method are initially measured at cost. Measurement of acquired assets and liabilities is carried out in the same way as for subsidiaries. SCA’s single largest joint venture is Bunzl & Biach Gesellschaft m.b.H., Vienna, which supplies the hygiene business with raw materials.
Associates
Associates are companies in which the Group exercises a significant influence without the partly owned company being a subsidiary or a joint arrangement. Normally, this means that the Group owns between 20% and 50% of the votes. Accounting for associates is carried out according to the equity method and the companies are initially measured at cost. Valuation of acquired assets and liabilities is performed in the same manner as for subsidiaries and the carrying amount for associates includes any goodwill and other Group adjustments.
The Group’s share of profit after tax arising in the associate after the acquisition is recognized on one line in the consolidated income statement. Share in profits is calculated on the basis of SCA’s share of equity in the respective associate. Asaleo Care in Australia was reclassified as an associate when SCA decreased holding following the company’s flotation on the Australian stock exchange.
SEKm |
2015 |
2014 |
2013 |
||
|
|||||
Joint ventures |
|
|
|
||
Value, January 1 |
122 |
837 |
771 |
||
Investments |
– |
129 |
10 |
||
Net increase in joint ventures 1) |
4 |
–165 |
–49 |
||
Remeasurement effect upon changes in holdings |
– |
– |
46 |
||
Reclassification between subsidiaries and joint ventures |
– |
– |
37 |
||
Reclassification between joint ventures and associates |
–8 |
–719 |
– |
||
Translation differences |
–4 |
40 |
22 |
||
Value, December 31 |
114 |
122 |
837 |
||
|
|
|
|
||
Associates |
|
|
|
||
Value, January 1 |
966 |
183 |
1,486 |
||
Investments |
68 |
– |
1 |
||
Company acquisitions |
– |
– |
58 |
||
Company divestments |
– |
– |
–13 |
||
Net increase in associates 1) |
41 |
101 |
104 |
||
Impairment of associates |
–62 |
– |
– |
||
Reclassification between associates and subsidiaries |
–7 |
–72 |
–1,454 |
||
Reclassifications due to changes in the acquisition balance sheet |
– |
–11 |
– |
||
Reclassification between joint ventures and associates |
8 |
719 |
– |
||
Translation differences |
–50 |
46 |
1 |
||
Value, December 31 |
964 |
966 |
183 |
||
BS TF3:1 Value, December 31, joint ventures and associates |
1,078 |
1,088 |
1,020 |
||
Joint ventures and associates
Recognized joint ventures and associates mainly operate in the forest products industry, with the exception of Vinda and Asaleo Care Ltd, which operate in tissue and personal care products.
Asaleo Care Ltd
As of 2014, Asaleo Care Ltd in Australia is recognized as an associate in accordance with the equity method, following the flotation of the company on the Australian Securities Exchange (ASX). In connection with the flotation, SCA’s participation decreased to 32.5%. In 2015, the company implemented a program to repurchase shares from the market, in which SCA did not participate. This caused SCA’s participation in Asaleo Care to increase to 34.7% during the fourth quarter. Asaleo Care manufactures and markets consumer tissue and AfH tissue, baby diapers, feminine care products and incontinence products. SCA has licensed its Tork and TENA brands to Asaleo Care for sale in Australia, New Zealand and Fiji.
Vinda
In 2013, SCA acquired additional participations in Vinda and the company became a subsidiary, in which SCA currently has a holding of 51.4%. The company primarily operates in the markets in Hong Kong, Macau and China. Refer also to Note F2.
Bunzl & Biach
Bunzl & Biach is a joint venture that operates in the recovered paper market and supplies raw materials to SCA’s hygiene business.
|
Joint ventures |
|
Associates |
|
|
|
||||||||||||
|
Bunzl & Biach |
|
Asaleo Care Ltd |
|
Vinda |
Total |
||||||||||||
SEKm |
2015 |
2014 |
2013 |
|
2015 |
2014 |
2013 1) |
|
|
|
2013 2) |
2015 |
2014 |
2013 |
||||
|
||||||||||||||||||
Condensed income statement |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net sales |
852 |
776 |
719 |
|
3,946 |
3,890 |
3,943 |
|
|
|
5,706 |
4,798 |
4,666 |
10,368 |
||||
Depreciation/amortization |
–11 |
–9 |
– |
|
–169 |
–154 |
–172 |
|
|
|
–9 |
–180 |
–163 |
–181 |
||||
Operating profit |
31 |
20 |
16 |
|
736 |
375 |
486 |
|
|
|
598 |
767 |
395 |
1,100 |
||||
Interest income |
– |
– |
– |
|
3 |
– |
– |
|
|
|
3 |
3 |
– |
3 |
||||
Interest expense |
– |
– |
– |
|
–64 |
–153 |
–231 |
|
|
|
–51 |
–64 |
–153 |
–282 |
||||
Other financial items |
3 |
1 |
1 |
|
–3 |
–208 |
–54 |
|
|
|
37 |
– |
–207 |
–16 |
||||
Tax expense |
–8 |
–6 |
–4 |
|
–193 |
5 |
–56 |
|
|
|
–109 |
–201 |
–1 |
–169 |
||||
Profit for the period |
26 |
16 |
13 |
|
479 |
18 |
145 |
|
|
|
456 |
505 |
34 |
614 |
||||
Other comprehensive income for the period |
–1 |
– |
– |
|
–49 |
106 |
79 |
|
|
|
118 |
–50 |
106 |
197 |
||||
Comprehensive income for the period |
25 |
16 |
13 |
|
430 |
124 |
224 |
|
|
|
574 |
455 |
140 |
811 |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Condensed balance sheet |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-current assets |
106 |
53 |
56 |
|
3,343 |
3,555 |
3,020 |
|
|
|
|
3,449 |
3,608 |
3,076 |
||||
Current investments |
– |
– |
– |
|
– |
– |
– |
|
|
|
|
– |
– |
– |
||||
Cash and cash equivalents |
10 |
55 |
43 |
|
214 |
226 |
314 |
|
|
|
|
224 |
281 |
357 |
||||
Other current assets |
93 |
98 |
89 |
|
1,159 |
1,161 |
998 |
|
|
|
|
1,252 |
1,259 |
1,087 |
||||
Total assets |
209 |
206 |
188 |
|
4,716 |
4,942 |
4,332 |
|
|
|
|
4,925 |
5,148 |
4,520 |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-current financial liabilities |
50 |
48 |
52 |
|
1,792 |
1,723 |
2,413 |
|
|
|
|
1,842 |
1,771 |
2,465 |
||||
Other non-current liabilities |
47 |
46 |
39 |
|
181 |
78 |
239 |
|
|
|
|
228 |
124 |
278 |
||||
Current financial liabilities |
– |
– |
– |
|
24 |
5 |
18 |
|
|
|
|
24 |
5 |
18 |
||||
Other current liabilities |
16 |
18 |
9 |
|
668 |
658 |
711 |
|
|
|
|
684 |
676 |
720 |
||||
Total liabilities |
113 |
112 |
100 |
|
2,665 |
2,464 |
3,381 |
|
|
|
|
2,778 |
2,576 |
3,481 |
||||
Net assets |
96 |
94 |
88 |
|
2,051 |
2,478 |
951 |
|
|
|
|
2,147 |
2,572 |
1,039 |
||||
Group share of net assets |
47 |
46 |
43 |
|
711 |
806 |
476 |
|
|
|
|
758 |
852 |
519 |
||||
Fair value adjustment |
56 |
66 |
51 |
|
119 |
43 |
258 |
|
|
|
|
175 |
109 |
309 |
||||
Carrying amount of the companies |
103 |
112 |
94 |
|
830 |
849 |
734 |
|
|
|
|
933 |
961 |
828 |
||||
Carrying amount of other joint ventures |
|
|
|
|
|
|
|
|
|
|
|
11 |
10 |
9 |
||||
Carrying amount of other associates |
|
|
|
|
|
|
|
|
|
|
|
134 |
117 |
183 |
||||
BS TF3:2 Carrying amount of joint ventures and associates |
|
|
|
|
|
|
|
|
|
|
|
1,078 |
1,088 |
1,020 |
||||
Market value, December 31 |
|
|
|
|
5,495 |
6,402 |
|
|
|
|
10,834 |
|
|
|
||||
Company name |
Corp. Reg. No. |
Domicile |
Share of equity at December 31, 2015, % |
Share of equity at December 31, 2014, % |
Share of equity at December 31, 2013, % |
Carrying amount at December 31, 2015, SEK m |
Carrying amount at December 31, 2014, SEK m |
Carrying amount at December 31, 2013, SEK m |
Joint ventures |
|
|
|
|
|
|
|
|
Bunzl & Biach GmbH |
FN79555v |
Vienna, Austria |
49 |
49 |
49 |
103 |
112 |
94 |
Asaleo Care Ltd |
61 154 461 300 |
Melbourne, Australia |
– |
– |
50 |
– |
– |
734 |
Other |
|
|
|
|
|
11 |
10 |
9 |
|
|
|
|
|
|
|
|
|
Associates |
|
|
|
|
|
|
|
|
Asaleo Care Ltd |
61 154 461 300 |
Melbourne, Australia |
35 |
33 |
– |
830 |
849 |
– |
Other |
|
|
|
|
|
134 |
117 |
183 |
BS TF3:1 Carrying amount, December 31 |
|
|
|
|
|
1,078 |
1,088 |
1,020 |