SCA Green Bond

Johan Rydin, Group Treasurer

March 16, 2016 2

SCA – a Leading Global Hygiene

and Forest Products Company

SCA

This is SCA

March 16, 2016 SCA 3

Personal care, tissue

and forest products Sales in about

100 countries Many strong brands

Europe’s largest

private forest

owner

44,000 employees Sales in 2015

SEK 115bn

SCA was founded in 1929

Forest

Products

SCA Group Sales by Business Area 2015

4 March 16, 2016 SCA

Tissue

Net Sales

SEK 115 bn

Personal

Care

55% 30%

15%

Global Market Positions

March 16, 2016 5

Incontinence products:

1

AfH tissue:

1

Consumer tissue:

2

Baby diapers: 4

Feminine care: 5

SCA

March 16, 2016 6

Group Targets Sustainability is part of SCA’s business model

People Targets Nature Targets Financial Targets

SCA

People & nature

innovations

Hygiene solutions

Code of conduct

Employee health &

safety

Climate & energy

Fiber sourcing &

biodiversity

Water

Return on capital

employed

Organic sales growth

Capital structure

SCA Green Bond

March 2014, SCA became the first Nordic

listed corporate to tap into the emerging

green bond market

A 5 year dual tranche SEK 1.5bn was issued

SCA 7 March 16, 2016

Background Beginning 2014

Medium term funding requirement in SEK

Initiative from Executive Management

Enhance green profile

Support emerging asset class

SCA 8

Group Treasurer: • There is no price advantage?

• Is this true investor

diversification?

• New processes and

additional work?

• How can we earmark the

money?

• How should the bond be

documented?

CEO and CFO: What about

issuing a Green Bond?

March 16, 2016

Preparatory Process

SEB arranger

Cross functional working group

SEB, CSR, Energy , Communications & Treasury

Green Bond framework setting out criteria

Second Opinion

Segregation of Green Bond funds

Documentation

EMTN program

Senior unsecured

Green bond content documented in subscription agreement and in note

to bondholder

SCA 9 March 16, 2016

Second Opinion on Green Bond

Framework by CICERO Second opinion in order to:

Secure that SCA has a prudent framework for selecting projects and that definitions agree

with international standards

Allow the investor to get a fast overview around SCAs selection and reporting process

CICERO (Center for International Climate and Environmental Research - Oslo)

Independent, not-for-profit, research institute

Established by Norwegian government in 1990

Conducts research and provides information and advice related to national and

international issues related to climate change and climate policy

Assessment of SCAs Green Bond framework and policies (9 page summary)

SCA 10 March 16, 2016

Renewable energy

Wind power

Geothermal

Biomass boilers, sludge incinerators and combined heat and power production (CHP)

Fuel-switching from carbon-intensive fuels to biofuels

Biofuel from forest waste

Energy efficiency

Energy savings according to SCA’s ESAVE program (including replacements of pumps, compressors, fans or lighting)

Investments in production technologies and manufacturing process

Water & waste management

Sustainable forestry

SCAs Green Bond Framework and CICEROs Second opinion published on www.sca.com

SCA’s Green Bond Framework List of eligible projects sectors

SCA 11 March 16, 2016

Green Bond Account

Proceeds from the issue held at separate account - ”SCA Green

Bond Account” - within SCAs Swedish cash pool

Account debited with amounts corresponding to green bond

investments

SCA 12 March 16, 2016

SCA 13 March 16, 2016

A Four Week Process

Issue process

SCA hosted an investor lunch presentation on 24 March

The transaction was announced as a 5 year SEK floating rate benchmark

Green Bond in the morning the following day, with a price guidance of 3m

Stibor+70bps

Good investor interest and the book reached in excess of SEK 1bn within 30

minutes

Several investors indicated a preference for a fixed coupon and, consequently,

the transaction was supplemented with a fixed leg of SEK 0.5bn

The book closed around SEK 3bn

Strong demand and the composition of the book allowed SCA to reach a final

price to 3mStibor +68bps and MS+68bps for the floating and fixed tranche

respectively

SCA 14 March 16, 2016

March 16, 2016 SCA 15

Ongoing Process

SELECTION OF ELIGIBLE PROJECTS

The Eligible Projects are selected by SCA’s Environmental Affairs and Energy

Department together with the Treasury Department

TRANSPARENCY

To enable investors to follow the development and to provide insight to prioritised

areas, SCA provide an annual investor letter including (1) a list of projects financed,

(2) a selection of project examples and (3) a summary of the Issuer’s green bond

development. The investor letters is available on SCAs webpage

SCA 16 March 16, 2016

Green Bond Examples of investments so far

• As of April 2015 - 1 029 MSEK of the Green Bond Proceeds had been used in

accordance with the Framework

March 16, 2016 SCA 17

New lime kiln

489 MSEK Energy project

392 MSEK

New water

treatment systems

28 MSEK

Munksund BioCoop Lasso, Ecuador

Future Green Bond Issuance

Will a yield discount develop for the asset class?

How will the bulk of SCA s normal bond issues be affected?

Green Company vs. Green Bond

Will there be changes to the process and compliance?

SCAs SEK 7.8 billion Östrand pulp mill investment has parts

qualifying for Green financing

SCA 18 March 16, 2016