SCA raises the value of its forest assets

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| Source: Svenska Cellulosa AB SCA
SCA raises the value of its forest assets 

Significant synergies through P&G acquisition
SCA implements measures to enhance competitiveness

SCA is raising the value of its forest assets by SEK 5,200 million to SEK 23,300
million based on sustained higher timber prices.
SCA is also carrying out a number of measures to enhance competitiveness. The
acquisition of Procter & Gamble's European tissue operations this autumn
generates significant synergies within sales and marketing, enabling an improved
production structure amounting to a value of approximately SEK 700 million
annually. 

In addition, a review has been carried out of tissue operations that are not
directly affected by the acquisition from P&G and within other business areas.
The review has led to the Group implementing efficiency enhancements and
impairment of some non-current assets in conjunction with restructuring. The
cost of all these measures will amount to SEK 4,900 million which will be booked
in the fourth quarter. Of this amount, impairment charges account for SEK 3,700
million and net cash expenditure after some disposals for SEK 700 million. The
improvement in operating profit will have full effect after three years when it
will amount to approximately SEK 1,400 million per year, including synergies
from the P&G acquisition.

SCA's President and CEO, Jan Johansson: “Growth and profitability will be our
priorities over the next few years. The P&G acquisition gives us unique
opportunities to develop our brand platform while improving the efficiency of
our production structure.” 

The acquisition of P&G's European tissue operations was carried out this autumn
for SEK 4,725 million. The EBITDA margin in the acquired operations amounts to
approximately 12% before synergies. The acquisition strengthens SCA's position
as the leading player in Europe with a market share of approximately 30% in
consumer tissue and strong brands within handkerchiefs, kitchen rolls and toilet
tissue. The acquisition will enable SCA to more quickly implement the strategic
shift of its product portfolio towards an increasingly higher proportion of
brand-related sales. 

A new brand platform for all European markets is now being developed with the
aim that the product portfolio should consist of a few strong brands in order to
ensure marketing synergies.

The synergies from the acquisition are expected to have full effect after three
years and will then amount to SEK 700 million per year. Synergies arise both
within sales and marketing and by improving the production structure in order to
achieve better logistics and service. The intention is to further optimize
production through concentration to a lower number of units thereby enabling the
phase-out of approximately 100,000 tonnes of capacity.

Higher forest valuation
SCA is Europe's largest private forest owner with 2.6 million hectares of forest
land. The company has performed a review of forest asset valuations and assessed
that timber prices over time will remain at a higher level than was used in
earlier appraisals. The new valuation will be SEK 23,300 million before tax, an
increase of SEK 5,200 million, and is based on a higher timber price but with an
unchanged discount rate of 6.25%. The revaluation will be reported in the
results for the fourth quarter of 2007. 

Measures within packaging and sawmill operations
In order to further strengthen competitiveness within the European packaging
operations, approximately 80 million m2 of corrugated board and 200,000 -
300,000 tonnes of paper capacity will be phased out. It is primarily a changed
customer structure that has made these measures necessary in order to create
long-term competitiveness. 

Production adjustments and personnel cutbacks will be carried out in the Swedish
sawmill operations.

Total effects 
The total cost of all these measures is SEK 4,900 million, which will be booked
in the fourth quarter. Of this amount, SEK 3,700 million is impairment of
non-current assets and SEK 1,200 million cash expenditure. At the same time,
disposals are expected to provide SEK 500 million. Net cash expenditure is
therefore expected to be SEK 700 million. An estimated 1,400-1,700 positions
will be affected by these measures.  The improvement in operating profit will
have full effect after three years when it will amount to approximately SEK
1,400 million per year, including synergies from the P&G acquisition.

Business group  Total cost Cash        Disposals Impairment Annual
                SEKm       expenditure SEKm      SEKm       improvement
                           SEKm                             in operating
                                                            profit, full
                                                            effect
                                                            SEKm
Tissue,         3,750      600                   3,150      1,150
incl. synergies
Packaging       900        500                   400        150
Forest Products 250        100                   150        100
Total           4,900      1,200       500       3,700      1,400





A phone conference takes place today, December 19, at 09.00 CET. Visit
www.sca.com for more information.

For further information please contact
Bodil Eriksson, SVP Corporate Communications, +46-8 7885234
Pär Altan, VP Media Relations, +46-8 7885237
Johan Karlsson, VP Investor Relations, +46-8 7885130

This report has been prepared in both Swedish and English. In case of variation
in the content of the two versions, the Swedish version shall prevail.


NB
This information is such that SCA must disclose in accordance with the
Securities Markets Act. The information was submitted for publication on
December 19 at 08.00 CET.