Value creation for SCA’s stakeholders
SCA’s vision and strategic framework have clear connections to SCA’s stakeholder groups and aims to deliver maximum long-term value creation. SCA sustainably develops, produces, markets and sells value-added hygiene and forest products, thereby creating value for shareholders, customers and consumers, suppliers, employees and society. Operations are based on a sustainable business model with a focus on value creation for people and nature.
SCA’s overall objective is to generate long-term value for the company’s shareholders and that the SCA share will deliver a higher total shareholder return than competitors. This is achieved through a positive share price trend and through dividends. SCA aims to provide long-term stable and rising dividends to its shareholders. When cash flow from current operations exceeds what the company can invest in profitable expansion over the long term – and under the condition that the capital structure target is met – the surplus shall be distributed to the shareholders.
- SCA’s share price rose 4% in 2016. The Board of Directors proposes an increase in the dividend by 4.3% to SEK 6.00 per share for the 2016 fiscal year. Accordingly, dividend growth in the most recent five-year period amounted to 7.4%.
CUSTOMERS AND CONSUMERS
SCA wants to reach more people by promoting a global dialog about hygiene, health and well-being that contributes to improved knowledge and quality of life, in connection to SCA’s products and solutions. What makes SCA successful is the understanding, knowledge and insight about the needs of customers and consumers and the ability to transform this into innovative offerings that increase quality of life and make life easier for people. SCA strives to offer the best value for customers and consumers with affordable hygiene solutions to everyone and by adapting its offering to local and regional market conditions to increase hygiene standards worldwide.
SCA held the number one or two position in at least one hygiene product segment in some 90 countries and offered a broad portfolio of products ranging from the premium segment to the economy segment. SCA introduced 23 innovations during the year. SCA continued to educate young women about menstruation and puberty, as well as educating children about the importance of hand hygiene and providing training for nurses in the field of incontinence care.
SCA strives to have transparent, long-term relationships with its suppliers to guarantee both high quality and financial stability for both parties. Purchasing accounts for SCA’s single largest expense. To achieve economies of scale, input goods, such as pulp, electricity and chemicals, are purchased centrally. SCA’s goals in the area of responsible sourcing encompass all suppliers. The SCA Global Supplier Standard serves as a basis for ensuring that the company’s suppliers meet the highest standards in terms of social and environmental responsibility and product safety.
SCA paid approximately SEK 79.2bn to its suppliers during 2016. At the end of 2016, 46% of the sourcing costs for the hygiene operations were from suppliers, that had undertaken to comply with the criteria in SCA’s Global Supplier Standard. Of Forest Products’ 23 largest suppliers, 87% had signed the supplier standard.
SCA’s success depends upon having motivated, dedicated and performance-driven employees. As a global employer, SCA aims to offer new opportunities for employees to develop and realize their full potential. The company values the experiences employees can obtain from work in different geographies, roles, functions or business areas. Value is created for employees by offering professional development opportunities and a stimulating, safe and healthy work environment. SCA offers employment terms and benefits that are in line with prevailing market terms.
During the year, SCA paid approximately SEK 15.8bn in salaries to its employees.
SCA contributes to the local economy as a major employer in many regions and through its community involvement. Aside from income tax, SCA also pays customs duties, property taxes, payroll taxes, pension taxes, and energy taxes. Social challenges can serve as a source of innovation and development for companies’ business models and product offerings. SCA’s operations related to health and hygiene provide excellent solutions to some of the challenges faced by society in both mature and emerging markets. SCA also participates in the community through projects with a clear link to the company’s values, expertise, operations and geographic presence. The focus of these projects is on hygiene and health, often related to women and children.
SCA paid approximately SEK 3.8bn in income tax in 2016. Payroll taxes for the year amounted to approximately SEK 3.4bn. SCA invested approximately SEK 32m in 400 local community involvement projects during the year. During 2016, two million people worldwide were given hygiene training by SCA.