SCA (OM:SCA B) One-Off Gain Drives Margin Beat, Raises Questions on Sustainability vs. Market Narratives

Svenska Cellulosa Aktiebolaget (OM:SCA B) posted a net profit margin of 16.5% for the last twelve months to September 2025, up from 15.6% last year, with earnings growth of 15.3% year over year. This marks an end to a trend of five-year average annual declines of 9.8%. Notably, results for the period include a SEK1.8 billion one-off gain, shaping both the profitability profile and future expectations, as earnings and revenue growth projections of 7.3% and 3.5% per year respectively are set to trail the broader Swedish market.

See our full analysis for Svenska Cellulosa Aktiebolaget.

Next, we will compare these headline results to the market’s most-talked-about narratives to see where consensus meets surprise and which assumptions might need a second look.

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One-off SEK1.8 Billion Gain Distorts Margin Trends

• The latest period’s net profit margin of 16.5% was lifted by a SEK1.8 billion one-off gain, which is not expected to recur in future periods.
• According to the analysts' consensus view, margin improvements linked to investments in new containerboard capacity and vertical integration are thought to be sustainable.
  • Consensus narrative expects profit margins to grow further to 20.1% in three years, underpinned by efficiency from new facilities.
  • However, the material impact of the one-off gain challenges how much of the recent margin boost reflects the long-term margin profile and whether efficiency alone will continue to outweigh cost and market pressures.
• What remains up for debate is whether future results, stripped of one-time gains, can meet consensus optimism that margins will trend toward 20.1%.
• The story of SCA B’s margin trajectory is now partly a test of how much recurring operating performance can be isolated from exceptional items and whether ongoing investments and regulatory tailwinds can sustain this upward path.

Surprise resilience could keep this margin run going, but whether it is all operational remains to be seen. 📊 Read the full Svenska Cellulosa Aktiebolaget Consensus Narrative.

DCF Fair Value Runs Ahead of Peers

• SCA B’s Price-to-Earnings Ratio sits at 24.1x, materially above both its direct peer average (15.1x) and the broader European forestry industry (15.9x). Yet, the shares still trade about 6.4% below their DCF fair value of SEK137.90 at the latest closing price of SEK129.60.
• Analysts' consensus view reports that, despite a valuation premium on near-term earnings, some models see the stock trading below estimated intrinsic value.
  • Consensus narrative points to a 9.8% implied upside versus the analyst price target of SEK139.08, suggesting upside if medium-term profit forecasts are achieved.
  • However, the DCF model uses assumptions for future earnings growth (7.3% annually, below the Swedish market rate) that may be at risk if profit drivers normalize and headline numbers fade once the one-time gain is lapped.

Long-Term Growth Forecast Trails Market

• SCA B’s forecast annual earnings growth of 7.3% and revenue growth of 3.5% over the next few years trail the Swedish market’s consensus rates of 12.6% and 3.9% respectively.
• Analysts' consensus narrative highlights that, even as major investments and a push into renewables set the stage for sustainable expansion.
  • Core forecasts assume profit margins continue to rise, but muted revenue and earnings growth relative to peers reflect industry headwinds and conservative volume projections.
  • With substantial capex already completed, SCA’s ability to deliver sustained profit increases and match broader market growth will depend on the ramp-up of new capacities and resilience against regulatory and input cost shocks.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Svenska Cellulosa Aktiebolaget on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

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A great starting point for your Svenska Cellulosa Aktiebolaget research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

See What Else Is Out There

SCA B’s moderate growth outlook and profit margins depend heavily on one-off gains and efficiency programs. Long-term forecasts trail the Swedish market average.

If you want steadier expansion and less reliance on exceptional items, discover companies delivering consistent results via stable growth stocks screener (2098 results) right now.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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