Interim report third quarter 2021

Posted: October 22, 2021 at 12:33 am MDT|Update: 2 hours ago

STOCKHOLM, 22 October 2021 / PRNewswire / –

JANUARY 1STSEPTEMBER 30, 2021

(compared to the corresponding period one year ago)

  • Organic net sales increased 1.6% and were negatively affected by the COVID-19 pandemic and associated restrictions and blockages. Net sales fell 3.5% to 87,641m SEK (90,796). Sales growth was strong for the third quarter of 2021 and organic revenue increased 7.4% compared to the third quarter of 2020.
  • Market share increased for approximately 70% of branded retail sales in the most recent 12-month period
  • E-commerce sales grew organically from 16.3% to around 14% of net sales, which translates to around 12 billion Swedish kronor.
  • In emerging markets, which accounted for 38% of revenue, organic revenue increased 8.2%.
  • Operating income before amortization of acquisition-related intangible assets (EBITA) decreased by 16% to SEK 11,047 million (13,177)
  • Adjusted EBITA decreased by 20% to 10,603m SEK (13 234)
  • Adjusted EBITA margin decreased 2.5 percentage points to 12.1% (14.6)
  • Adjusted return on capital employed decreased by 2.3 percentage points to 13.4% (15.7)
  • The profit for the period was SEK 7,592 m (8,718)
  • Earnings per share were 9.45 SEK (10.80)
  • Cash flows from current operations were SEK 4,744m (8 560)
  • Essity has chosen new areas of activity of January 1, 2022. The areas of activity will be Health & Medical, Consumer Goods and Professional Hygiene. As a result of its higher growth ambitions, Essity has also decided on a new sales growth target of over 5%, which includes both organic growth in sales and acquisitions.

SUMMARY OF THE THIRD QUARTER 2021

Sales growth was strong in the third quarter and organic revenue increased 7.4% compared to the same period a year ago, of which volume was 4.2% and price / mix 3 , 2%. Sales growth, including organic sales growth and acquisitions, was 9.7%. Sales were positively impacted by more favorable market conditions and a growing awareness of the importance of hygiene and health. Essity’s organic revenue increased by 1.9% compared to the third quarter of 2019. Personal Care and Professional Hygiene recorded very favorable organic sales growth during the third quarter of 2021 compared to the third quarter of 2020 Medical Solutions posted strong growth and organic sales increased. 9.7%, with good growth in all product segments.

Organic revenue in mature markets increased by 5.9%. In emerging markets, which accounted for 36% of revenue, organic revenue increased 10.2%.

During the quarter, Essity:

  • Launch of innovations that help improve well-being and increase sustainability in all product categories under leading brands such as TENA, Tork, Jobst, Libero, Plenty, Saba, Tempo and Zewa.
  • Increased market share for approximately 70% of branded retail sales in the most recent 12-month period
  • Organic increase in e-commerce sales from 21.7% to around 14% of net sales
  • Implementing price increases and preparing for further increases to offset higher costs of raw materials, energy and distribution
  • Achieving continued savings of SEK 219m. The Manufacturing Roadmap program runs until 2025 and is expected to contribute to Essity’s total annual savings of 500 SEK1000 m.
  • Completion of the acquisitions of the Australian hygiene company Asaleo Care and the Colombian hygiene company Productos Familia SA
  • Continuation of the company’s sustainable development efforts and start of tissue production in Mannheim, Germany, made from wheat straw pulp that will initially be used in tissue paper products for the German retail market under Essity’s market leading brand for household napkins and toilet paper, Zewa. Also invested in the world’s first paper machine using a fully geothermal steam drying process at the Kawerau production site, New Zealand.
  • Continuation of the process of creating the Consumer Tissue Private Label Europe division in the Consumer Tissue business area. The work is proceeding as planned and should be completed by the end of the year. The scope of the division has been widened. The division will have approximately 1,900 employees and seven production facilities in Belgium, France, Germany and Italy. Proforma revenue for the first nine months of 2021 amounts to approximately 5 billion Swedish kronor.

After the end of the quarter, Essity has:

  • Decided on new areas of activity of January 1, 2022. The areas of activity will be Health & Medical, Consumer Goods and Professional Hygiene. As a result of its higher growth ambitions, Essity has also decided on a new sales growth target of over 5%, which includes both organic growth in sales and acquisitions.

The Group’s adjusted gross margin for the third quarter of 2021 decreased 3.7 percentage points year-on-year to 28.7%. The gross margin was positively impacted by higher volumes, higher prices, an improved mix and cost savings. Higher costs for raw materials, energy and distribution reduced the margin by 6.7 percentage points. The Group’s adjusted EBITA margin decreased 2.9 percentage points to 11.5%. Selling costs, excluding marketing costs, decreased in absolute terms and as a percentage of sales. Investments in growth increased marketing costs in absolute terms, but decreased as a percentage of net sales. Adjusted EBITA, excluding currency effects, decreased by 11%. The adjusted return on capital employed is 12.3%. Earnings per share increased 21% to SEK 3.90.

FUTURE RELATIONSHIPS

The 2021 year-end report will be published on January 26, 2022. Essity’s annual report for 2021 will be released during the week starting February 28, 2022. In 2022, interim reports will be published on April 28, July 21 and October 27.

CAPITAL MARKETS DAY 2021

Essity will host a Capital Markets Day on November 3, 2021.

ANNUAL GENERAL MEETING

Essity’s annual general meeting will be held at Stockholm to March 24, 2022.

INVITATION TO PRESENTATION OF THE THIRD QUARTER 2021 REPORT

Along with the publication, a telephone and web presentation will take place where the President and CEO Magnus groth present the report and answer questions.

Presentation

Dated: Friday, October 22, 2021

Time: 9:00 am CET

Link to the web presentation: https://essity.videosync.fi/2021-10-22-q3

To participate by phone, call: +44 (0) 207 192 80 00, +1 631 510 74 95 or +46 (0) 8 506 921 80. Please call well before the start of the presentation. Specify “Essity” or the conference ID number. 9798955.

Stockholm, 22 October 2021

Essity Aktiebolag (released)

President and CEO

For more information, please contact:

Fredrik rystedt, Chief Financial Officer and Executive Vice President, +46 (0) 8 788 51 31

Johan karlsson, Vice-President Investor Relations, Group Function Communications, +46 (0) 8 788 51 30

Joséphine Edwall Björklund, Senior Vice President, Group Function Communications, +46 (0) 8 788 52 34

By Lorentz, Vice President Corporate Communications, Group Function Communications, +46 (0) 8 788 52 51

NB:

This report has not been reviewed by the Company’s statutory auditors.

This information is information that Essity Aktiebolag (publ) is obliged to make public in accordance with the EU Market Abuse Regulation. This report has been prepared in Swedish and English versions. In the event of variations in the content between the two versions, the Swedish version will prevail. The information has been submitted for publication, through the contact person indicated below, at 7:00 am CET to 22 October 2021.

Karl Stoltz, Press Relations Manager, +46 (0) 8 788 51 55

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SOURCE Essity

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