STOCKHOLM, April 23, 2021 /PRNewswire/ --
JANUARY 1 – MARCH 31, 2021
(compared with the corresponding period a year ago)
- Net sales declined 18.3% to SEK
27,528m (33,712)
- Organic net sales declined 9.9% and was negatively impacted by
the COVID-19 pandemic and related restrictions and lockdowns, and
in comparison the stockpiling in the first quarter of the preceding
year.
- Market shares increased in many markets for the most recent
12-month period
- E-commerce sales increased organically by 14% and accounted for
approximately 13% of net sales
- In emerging markets, which accounted for 39% of net sales,
organic net sales increased 4.2%.
- Operating profit before amortization of acquisition-related
intangible assets (EBITA) decreased 31% to SEK 3,664m (5,316)
- Adjusted EBITA decreased 32% to SEK
3,608m (5,333)
- Adjusted EBITA margin decreased 2.7 percentage points to 13.1%
(15.8)
- Adjusted return on capital employed decreased 4.9 percentage
points to 13.5% (18.4)
- Profit for the period was SEK
2,552m (3,610)
- Earnings per share were SEK 3.04
(4.61)
- Adjusted earnings per share were SEK
3.14 (4.83)
- Cash flow from current operations was SEK 695m (3,044)
- Entered into agreement with Australian hygiene company Asaleo
Care to acquire remaining shares
- After the end of the quarter, Essity entered into agreement to
acquire approximately 44% of the Colombian hygiene company
Productos Familia S.A. Essity has also announced price increases
due to higher raw material costs.
SUMMARY OF FIRST QUARTER OF 2021
Improved market conditions resulting from the ongoing
vaccination programs are expected to result in increased demand for
several of Essity's product categories. One example of this is the
increase in demand in Professional Hygiene in North America in the first two weeks of
April 2021. Another example is the
recovery in China, where sales
were significantly higher during the first quarter of 2021 compared
with the first quarter of 2019.
During the first quarter, Essity has continued to position the
company for future profitable growth, for example, by:
- Entered into an agreement with the Australian hygiene company
Asaleo Care to acquire the remaining 63.8% of the shares in the
company. Essity is the largest shareholder with a holding of 36.2%
of the shares. The acquisition of Asaleo Care will enable
profitable growth in Australia,
New Zealand and the Pacific
region.
- Expanded the offering of reusable products through the launch
of TENA Silhouette washable absorbent underwear within Incontinence
Products, the Libresse® V-Cup menstrual cup within
Feminine Care and the Tork microfiber cleaning cloth within
Professional Hygiene.
- Increased market shares in many markets over the most recent
12-month period.
- E-commerce sales increased organically by 14% and accounted for
about 13% of net sales.
After the end of the first quarter:
- Entered into an agreement to acquire approximately 44% of the
Colombian hygiene company Productos Familia S.A. After closing of
the transaction Essity's ownership in Familia will amount to at
least 94%. Essity has been an owner in Familia since 1985, and
currently owns 50% of the company. The purchase price amounts to
USD 1,540m (approximately
SEK 13bn) for 100% of the company on
a debt free basis. With the acquisition Essity is building a
stronger platform in Latin
America.
- Essity has also acquired the distribution rights to the wound
care technology Sorbact® in Australia and New
Zealand.
- The Manufacturing Roadmap program extends until 2025 and is
expected to contribute to Essity's total annual cost savings of
SEK 500-1,000m through the optimization of the production
structure, productivity improvements and raw material and energy
savings. These measures facilitate growth without investments
increasing at the same pace. Working capital is expected to
decrease by more than SEK 1,000m. The
objective is to also utilize new production methods to reduce
exposure to wood-based fresh-fiber pulp by approximately 10%, which
will result in reduced volatility for the company's profitability.
The program will also lead to that the company's sustainability
targets within the Science Based Targets will be achieved
faster.
- Announcement of price increases within Consumer Tissue due to
higher raw material costs. These were announced in Essity's key
markets and the percentage increases are on average in the mid to
high single digits. Some effect from the price increases is
expected already at the end of the second quarter of 2021 but with
the main impact in the second half of 2021. Essity is preparing
price increases in other product categories impacted by higher raw
material costs.
The Group's organic net sales in the first quarter of 2021
declined by 9.9% compared with the corresponding period a year ago,
of which volume accounted for -8.9% and price mix for -1.0%. The
COVID-19 pandemic with the extensive restrictions and lockdowns had
a negative impact on sales, primarily within Professional Hygiene
and Medical Solutions. Furthermore, the comparative figures were
affected by the strong sales growth that resulted from stockpiling
in the first quarter of the preceding year by consumers and
distributors. Stockpiling in the first quarter of the preceding
year explains approximately half of the reduction in organic net
sales. Organic net sales in mature markets declined 18.3%. In
emerging markets, which accounted for 39% of net sales, organic net
sales increased 4.2%.
The Group's adjusted gross margin for the first quarter of 2021
decreased by 0.6 of a percentage point year on year to 32.2%. The
gross margin was positively impacted by lower raw material costs
and an improved mix. Lower prices, lower volumes and higher
distribution costs had a negative impact on the gross margin.
The Group's adjusted EBITA margin decreased 2.7 percentage
points to 13.1%. The margin was negatively impacted by lower
absorption of fixed costs as a result of lower sales. Sales costs
decreased in absolute terms but increased as a share of net sales.
Investments in growth increased marketing costs in absolute terms
and as a percentage of net sales. Adjusted EBITA, excluding
exchange rate effects, decreased 24%. Adjusted return on capital
employed decreased 4.9 percentage points to 13.5%. Earnings per
share amounted to SEK 3.04.FUTURE
REPORTSIn 2021, interim reports will be published on
July 16 and October 22. The 2021 Year-end report will be
published on January 26, 2022.
INVITATION TO PRESENTATION OF THE INTERIM REPORT FOR THE FIRST
QUARTER OF 2021
In conjunction with publication, a telephone and web
presentation will be held where President and CEO Magnus Groth will present the report and answer
questions.
Presentation
Date: Friday, April 23, 2021
Time: 9:00 a.m. CET
Link to web presentation:
https://essity.videosync.fi/2021-04-23-q1
To participate by telephone, call: +44 (0)207 192 80 00, +1 631
510 74 95 or +46 (0)8 506 921 80. Please call well in advance of
the start of the presentation. Specify "Essity" or conference ID
no. 8865436.Stockholm, April 23,
2021
Essity Aktiebolag (publ)
Magnus GrothPresident and CEO
For further information, please contact:
Fredrik Rystedt, CFO 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
Per Lorentz, Vice President
Corporate Communications, Group Function Communications, +46 (0)8
788 52 51
NB:
This information is such that Essity Aktiebolag (publ) is
obligated to make public pursuant to the EU Market Abuse
Regulation. This report has been prepared in both Swedish and
English versions. In case of variations in the content between the
two versions, the Swedish version shall govern. The information was
submitted for publication, through the agency of the contact person
set out below, at 7:00 a.m. CET
on April 23, 2021. Karl
Stoltz, Media Relations Manager, +46 (0)8 788 51
55karl.stoltz@essity.com
This information was brought to you by Cision
http://news.cision.com
https://news.cision.com/essity/r/interim-report-first-quarter-2021,c3331986
The following files are available for download:
https://mb.cision.com/Main/15798/3331986/1406179.pdf
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SOURCE Essity