Other Group information

Parent Company

The Group’s Parent Company, Svenska Cellulosa Aktiebolaget SCA (publ), owns most of the forest land and other real estate relating to forestry operations, and grants felling rights for standing timber to the subsidiary SCA Skog AB. The Parent Company is otherwise a holding company with the main task of owning and managing shares in a number of business group companies and performing Group-wide management and administrative functions. In 2016, the Parent Company recognized operating income of SEK 539m (430) and profit before appropriations and tax of SEK 42,902m (10,097). During the year, the Parent Company’s net divestments in shares and participations in companies outside SCA amounted to SEK 6m (–7). Investments in property and non-current assets totaled SEK 165m (157) during the year. Cash and cash equivalents at year-end amounted to SEK 0m (0).

Research and development (R&D)

Research and development (R&D) costs during the year amounted to SEK 1,258m (1,093), corresponding to about 1.1% of consolidated net sales. R&D is coordinated and conducted from a global perspective. Product development is carried out in close cooperation with the local units, as well as through direct collaboration with customers. A slightly more long-term approach is adopted when it comes to R&D in the fields of materials and technology.

Holdings of treasury shares

SCA implemented a directed cash issue of a total of 1,800,000 shares in 2001. These shares were subsequently acquired by SCA to be used for transfer to senior executives and key individuals under the employee stock option program. The program ended in 2009. Following the share split in 2007 and transfer of the shares under the concluded program, the company holds a total of 2,767,605 treasury shares. The Board was not authorized to repurchase shares in 2016.

Share distribution

During the year, 2,847,037 Class A shares were converted into Class B shares. The proportion of Class A shares was 9.2% at year-end.


The Board of Directors proposes an increase in the dividend by 4.3%, to SEK 6.00 per share (5.75), or SEK 4,214m (4,038). Accordingly, dividend growth over the most recent five-year period amounted to 7.4% and during the last ten-year period 4.1%. The record date for entitlement to receive dividends is proposed as April 7, 2017.

Environmental impact in Sweden

In 2016, SCA conducted 13 operations for which a permit is required in Sweden. Operations for which permits are required accounted for 15% of consolidated net sales. Five permits relate to the manufacture of pulp and paper. These operations impact the environment through emissions to air and water, solid waste and noise. Seven permits relate to the production of solid-wood and value-added products, and biofuel. These operations impact the environment through emissions to air and water, as well as noise. One permit relates to the manufacture of fuel pellets. This operation affects the environment through emissions to air and water, as well as noise.

Guidelines for remuneration of senior executives

The Board of Directors has decided to propose to the AGM 2017 the following guidelines for determining salaries and other remuneration for senior executives to apply for the period following the AGM.

“Remuneration of senior executives will be a fixed salary, variable remuneration, additional benefits and pension. Senior executives include the President, the Executive Vice President, Business Unit Presidents and equivalents, and the Central Staff Managers. The total remuneration is to correspond to market practice and be competitive in the senior executive’s field of profession and linked to the manager’s responsibility and authority. Variable remuneration is to be limited and linked to the fixed remuneration, based on performance results in relation to annual and long-term established targets. In the event of termination of employment, the notice period should normally be up to two years if termination is initiated by the company, and up to one year, when initiated by the senior executive. There will be no severance pay. Pension benefits should, wherever possible, only include defined premium pension benefits and entitle the executive to receive a pension from the age of 65. Variable remuneration is not pensionable income. The Board of Directors has the right to depart from the established guidelines if there is an individual case with special grounds. The guidelines do not take precedence over compulsory conditions in accordance with labor legislation or collective agreements. Furthermore, they are not applicable to existing contracts.”

For information concerning the company’s application of previously agreed guidelines and information on the company’s calculated expenses for remuneration of senior executives, see Note C3.

Use of non-International Financial Reporting Standards (IFRS) performance measures

In July 2016, the European Securities and Market Authority (ESMA) issued guidelines for reporting alternative performance measures in company financial statements and prospectuses. Alternative performance measures related to performance measures not included within the framework of IFRS. These performance measures have been developed to help users of financial statements, investors and management to analyze the company’s operations, and several of these are generally accepted financial key figures.

These alternative performance measures can be found in the Board of Directors’ Report, the financial statements and the notes. A description of the performance measures and how they are used is presented in Note A2, Use of non-International Financial Reporting Standards (IFRS) performance measures.