SCA Press Backgrounder Innovation at SCA Updated September, 2014 SCA is a leading global hygiene and forest products company. The Group develops and produces sustainable personal care, tissue and forest products. With brands such as TENA, Tork, Libero, Libresse, Lotus, Nosotras, Saba, Tempo and Vinda our innovations become essentials for everyday life, for millions of people around the world. At SCA we believe that everyone should have the opportunity to live life to the fullest, and we are committed to creating value for people and nature. SCA develops innovative solutions that make it easier to live a healthy and sustainable life. With innovations like the TENA U-test we improve quality of life for individuals suffering from incontinence issues. A test card for detection of urinary tract infections, placed directly into the incontinence pad, avoiding painful procedures and suffering. Or the TENA Wet Wash Glove, enabling full body cleansing without the need for soap or water, improving care and at the same time supports the daily tasks of caregivers. The Wet Wash Glove is also highly appreciated by SCA's all-female team, Team SCA in the Volvo Ocean Race, sailing around the world without access to showers. By providing innovative and IT-based hygiene solutions like the Tork Bloe washroom service or the tablet app ‘Ella’s Hand Washing Adventure’ we ease facility management and reduce the risk of diseases spreading. The Bloe toilets have odor control, automatic water reduction and it wirelessly sends information on usage and when it's time for cleaning. Tork’s playful tablet app, Ella’s Hand Washing Adventure educates children about good hand hygiene. These are just a few examples of how our innovations make life easier for people every day. SCA’s way of working with innovation is deeply embedded in the Group’s strategy and business model. Innovation activities are based on market trends, customer and consumer insight, new technology and business models, with sustainability and product safety integrated into the process. SCA’s presence in both mature and emerging markets provides a good understanding of trends and customer and consumer needs. For SCA, innovation work involves increasing customer and consumer value by developing new, attractive products and services, evolving and improving existing offerings, and expanding the range. Innovation programs also encompass production and work processes, with the aim of achieving a more efficient and resource-efficient operation. Open innovation SCA encourages open innovation, which means using external sources in conjunction with in-house resources as an integral part of the process. Open innovation brings a number of benefits, such as providing input from adjacent industries, speeding up development processes and cutting costs. 1 SCA primarily uses open innovation for partnering with suppliers and selected start-up companies to fast track their initial product or business model developments. Employees who are encouraged to be innovative SCA depends on motivated, competent and high-performing employees who have a personal drive and who are encouraged to be innovative. Our corporate culture is highly conducive to innovation. To create an innovative work environment SCA encourages everyone to think outside the box. We motivate employees by providing them with responsibility and expecting accountability and by giving and receiving continuous feedback. To take further advantage of the employees’ creativity and good ideas, SCA has created an internal innovation platform called ICON (Idea Collaboration Online). ICON is not limited to product innovations; employees can also contribute proposals to ICON, such as those with the potential to benefit manufacturing, logistics or marketing. SCA’s intellectual property activities The number of patent applications is directly related to SCA’s research and development activities. In 2013, SCA submitted 50 such applications. We manage all intellectual property (patents and trademarks) through a dedicated organization responsible for the filing, opposition and trading of patents. Innovation is also one of SCA’s strategic priorities and is crucial for future success in meeting customer and consumer needs. 2 Innovations and launches 2013-2014 Below you will find some great examples of innovations creating improvements for people, the environment and finances. Tork EasyCube Tork EasyCube is an intelligent system developed together with facility service companies. Based on real-time data from smart dispensers, Tork EasyCube empowers facility managers and their teams to move from static cleaning schedules to cleaning when needed. Tork Bloe Bloe is a new service solution based on real-time data from connected toilets and urinals with a sleek design. It provides end-users with an elevated washroom experience and cleaning providers with insights about visitors and usage. It also includes integrated screens for visual communications aimed at visitors, and innovative features to automatically facilitate cleaning, control odors and reduce water usage. A unique ventilation system with aromatic oils creates an invigorating fragrance throughout the washroom. Tork Sanitizing Wet Wipe Wet wipes for cleaning and sanitizing restaurant tables, provided in a discreet and portable solution. Tork Intuition Sensor The innovative sensor-controlled Tork Elevation foam soap dispenser is specially developed for hygiene critical operations such as food and healthcare, but is also suitable for office use. The risk of spreading infections and bacteria is removed by eliminating the need to touch the soap dispenser. TENA U-Test A new test card in the incontinence product that can discover urinary tract infections. The test card is placed in an incontinence product, and when the product is replaced, the a staff member checks the card’s two fields. This method makes diagnosis simpler for the care staff and more comfortable for the patient compared with providing a urine sample, which may have to be done using catheters. 3 TENA Identifi TENA Identifi is a breakthrough innovation for continence care, developed on the basis of a distinct need of our customers in elderly care. The solution is based on a sensor product that registers urination patterns (how much urine comes and when). After three days’ observation, the care staff can discern a pattern of frequency and volumes that provides entirely new opportunities to determine a continence plan and apply incontinence products as necessary. SCA thereby supports customers by addressing higher demands for active continence care. The value is both financial and qualitative; a clear basis is provided to the care staff for improving their work and the individual obtains a more dignified existence. The product was launched in 2013, in Denmark as the first country. TENA Wet Wash Glove The TENA Wet Wash Glove enables full-body cleansing without the need for soap or water, thus improving care while facilitating the work of caregivers. Libero open diapers A thinner baby diaper with more efficient materials, a smarter design and improved fit. Lower weight provides resource optimization, more efficient transportation and less waste. Between 1987 and 2013, the climate impact of Libero’s open diapers decreased by 52%. Libresse Multistyle Liners/Curvefit Libresse Multistyle Liner is a new most absorbent liner designed to fit any style of knickers. The curvefit liner is uniquely shaped to perfectly fit body shape for maximum comfort. Notes • • SCA is the majority shareholder in Vinda International Holdings Limited (“Vinda”). In October, 2014 SCA transferred its hygiene business in China (Mainland China, Hong Kong and Macau) to Vinda. The companies have signed an agreement regarding the exclusive license to market and sell the SCA brands; TENA, (incontinence products) Tork (Away from Home tissue), Tempo (consumer tissue), Libero (baby diapers), and Libresse (feminine care) in China (Mainland China,Hong Kong and Macau). With this agreement, Vinda will hold the rights to these product brands in these Chinese markets. Vinda also acquired SCA’s Dr P and Sealer brands in China. During Q2, 2014 SCA floated its joint venture, Asaleo Care, in Australia, New Zealand and Fiji on the Australian Securities Exchange. SCA’s holding in Asaleo Care amounts to approximately 32.5%. Asaleo Care manufactures and markets consumer tissue and Away-from-Home (AfH) tissue, diapers, feminine care products and incontinence care products. Leading brands include TENA, Tork, Sorbent, Libra and Treasures. TENA and Tork will continue to be owned by SCA but will be licensed to Asaleo Care for sales of products under these brands in Australasian 4 SCA in short SCA is a leading global hygiene and forest products company. The Group develops and produces sustainable personal care, tissue and forest products. We were founded in Sweden in 1929 through a merger of 10 Swedish forest operations. However, our history dates back several hundred years before that, as the oldest of those operations was established in 1673. SCA is headquartered in Stockholm, Sweden. Our services and solutions are used by millions of people throughout their lives: from early childhood, through their teens and adulthood and into old age. We bring innovative, sustainable and value-added products to the world. SCA has 44,000 employees. Sales in 2013 amounted to SEK 93bn (EUR 10.7bn). The Group has sales in about 100 countries under our leading global brands TENA (incontinence products) and Tork (away from home professional hygiene products), as well as local and regional brands such as Libero, Libresse, Lotus, Nosotras, Saba, Tempo and Vinda. Our hygiene products, such as baby diapers, toilet paper, napkins, incontinence products, kitchen rolls, feminine-care products, facial tissues and handkerchiefs, are used by millions of people through their whole lives. Sustainability is an integral part of our business model and is fundamental in everything we do. As Europe’s largest private forest owner, SCA places considerable emphasis on sustainable forest management. SCA has 2.6 million hectares of forestland – almost the size of Belgium. The Forest Products business area offers Publication Papers, Kraftliner (packaging papers), Pulp, Solid-wood Products and Renewable Energy. Our forest is a unique resource, contributing positively to the environment and supporting our sustainability agenda. It is a source of valuable and renewable raw materials, and also provides living space for a multitude of flora and fauna. The forest absorbs carbon dioxide, regulates water flows and generates value for society in the form of such pursuits as hunting, fishing and recreation. It enables energy through wind power and biofuels. Responsible forestry and reforestation can be one of the solutions to climate change. SCA has a net growth in our forest and we replace every tree harvested in our own forests with three new ones. Our growing forests absorb 2.6 million tons of carbon dioxide annually, which widely exceeds the carbon emissions from our own production. Health and hygiene are essential for every individual’s well-being and sense of dignity. SCA’s solutions improve hygiene standards throughout the world. We share our expertise and educate on the importance of good hygiene practices. We engage in activities across the globe to teach young women about menstruation and puberty and educate children about the importance of proper hand hygiene. SCA has trained 10,000 nurses from 1,200 hospitals throughout China on issues related to incontinence and elder care. Rising global population, increased life expectancy, a greater number of elderly citizens and a higher standard of living all contribute to a growing demand for hygiene products, creating opportunities for SCA. Our employees around the world unites under SCA’s core values; respect, excellence and responsibility. These values are rooted in the company's history; common goals and shared ambitions going forward inspiring and challenging the organization. 5 Notes to editors Latest press releases: http://www.sca.com/en/Media/Press-releases/ Download high resolution images and videos: http://www.sca.com/en/Media/Pressimages-and-films/ Interim reports: http://www.sca.com/en/IR/Reports/Interim-reports/ Annual reports: http://www.sca.com/en/IR/Reports/Annual-reports/ Sustainability reports: http://www.sca.com/en/IR/Reports/Environmental--social-reports/ SCA is a leading global hygiene and forest products company. The Group develops and produces sustainable personal care, tissue and forest products. Sales are conducted in about 100 countries under many strong brands, including the leading global brands TENA and Tork, and regional brands, such as Libero, Libresse, Lotus, Nosotras, Saba, Tempo and Vinda. As Europe’s largest private forest owner, SCA places considerable emphasis on sustainable forest management. The Group has about 44,000 employees. Sales in 2013 amounted to approximately SEK 93bn (EUR 10.7bn). SCA was founded in 1929, has its headquarters in Stockholm, Sweden, and is listed on NASDAQ OMX Stockholm. For more information, visit www.sca.com. 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