Slides
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Report for quarter 4 and full-year 2024 January 23, 2025
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Magnus Groth President and CEO Every day our brands care for the hygiene and health of a billion people across 150 countries
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Essity – A leading hygiene and healthcompany 146 Net sales 2024 SEKbn Employees36,000150 Sales in countries 20.3 EBITA excl. IAC 2024 SEKbn
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4 Key achievements 2024 • Highest profits ever and good volume growth in high yielding segments • Strong cash flow generation and solid balance sheet • Divestment of Vinda resulting in a more attractive portfolio • New financial targets and share buyback program • Impactful innovations driving market shares, efficiency improvements and good progress on sustainability In better shape than ever 4
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Financial summary 2024 5 Operating cash flowOrganic sales growth +4.6% Organic: +3.8% ROCE excl. IACEBITA margin excl. IAC 14.0% +120bps 17.6% +120bps +1.8% excl. restructuring +0.2% Net sales SEK 145,546m -1% EBITA excl. IAC SEK 20,344m +8% SEK 17,242m -3% 2024 vs 2023 Report quarter 4 and full-year 2024 EPS excl IAC1) Proposed dividend2) SEK 19.29 +10% SEK 8.25 +6.5% 1) Earnings per share excl. IAC and amortization of acquisition-related intangible assets, continuing operations 2) Board of Directors proposal per share
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Earnings per share excl. IAC and amortization of acquisition-related intangible assets 1) Adjusted for US Tax reform 2017 2) Continuing operations 20171) SEK 12.3 per share SEK 19.3 per share 20242) High EPS growth +10% vs 2023 Alt 2 +57% CAGR +7%
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7 Dividend SEK 8.25 per share +6.5% 2018 2019 2020 2021 2022 2023 2024 5.75 6.25 6.75 7.00 7.25 7.75 Proposed Dividend 20241) 1) Board of Directors Proposal 8.251) Dividend, SEK per share Report quarter 4 and full-year 2024
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8 Strong long-term financial development Note: 2014-2020 excl. Vinda’s published figures; 2021-2023 Vinda classified as discontinued operations 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 20242014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 SEKbn 8.8 9.8 10.981.0 88.0 94.5 12.3102.0 11.8 102.2 13.9 14.7109.6 101.5 11.5 12.0 131.3 Sales EBITA excl. IAC 147.1 18.9 88.0 +80% +132% 145.5 20.3 Report quarter 4 and full-year 2024
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Impactful innovations 2024
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Product superiorityand leading market positions 40% 56% 59% % of sales with superiority (product, brand, price) 64% 2017 2020 2023 2024 90% of branded sales #1 or #2 position >40% Increasing market shares 2024 incl stable ~65% of branded sales in retail
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Good progress on sustainability Health & Safety Greenhouse gas emissions Outcome 2024 vs 2016 -27% Target 2025 TRI1) vs 2019 -75% Outcome 2024 vs 2019 -66% 1) Total Recordable Injuries per 1 000 000 working hours (F+LTA+RWC+MTC)*1.000.000 / Total working hours Target 2030 SBT Scope 1 and 2 vs 2016 -35% Report quarter 4 and full-year 2024 11
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Q4 2024
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13 Summary Q4 2024 EBITA excl IACOrganic Sales Growth +4.6% Organic: +3.8% ROCE excl IACEBITA Margin excl IAC 13.1% -20bps 17.1% +/-0bps SEK 4,969m +2%+4.9% excl. restructuring +3.9% Q4 2024 vs Q4 2023 Report quarter 4 and full-year 2024 Strong organic sales growth • All business areas contributing and strong growth in high margin segments • Higher volumes and sales prices, positive mix Higher profit but lower margin • Higher margins in Health & Medical and Professional Hygiene • Lower margin in Consumer Goods mainly related to Consumer Tissue and increased costs partly due to stronger dollar • Cost savings of SEK 430m
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Health & Medical Holistic health and medical solutions along the continuum of care Grow to scale 20% of net sales 2024 Three attractive business areas Consumer Goods Personal and home hygiene for all stages of life Accelerate high-margin categories 54% of net sales 2024 Professional Hygiene Hygiene management solutions for a broad set of commercial applications Expand global leadership 26% of net sales 2024 Report quarter 4 and full-year 2024 14
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15 Health & Medical Organic sales growth +5.6% • Higher volumes +4.9% • Higher prices and positive mix +0.7% • Incontinence Products Health Care +4.4% • Medical Solutions +7.2% Profitability • EBITA excl. IAC SEK 1,361m, +21% • EBITA margin excl. IAC 18.3%, +220bps Q4 – Strong growth and higher profits
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16 Consumer Goods Q4 – Strong growth but cost pressure Organic sales growth +4.5% • Higher volumes in all categories +4.3% • Price/Mix +0.2% • Incontinence Products Retail +11.2% • Feminine Care +3.4% • Baby Care -1.6% • Consumer Tissue +4.3% Profitability • EBITA excl. IAC SEK 2,245m, -13% • EBITA margin excl. IAC 11.0%, -200bps
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17 Professional Hygiene Organic sales growth +1.4%, +5.1% excl. restructuring • Volumes -6.0% • Higher prices and positive mix +7.4% Profitability • EBITA excl. IAC SEK 1,817m, +19% • EBITA margin excl. IAC 18.3%, +260bps Q4 – Strong growthof premium productsand higherprofits
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Every day our brands care for the hygiene and health of a billion people across 150 countries Fredrik Rystedt EVP and CFO
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Strong organic sales growth Price/Mix +1.0% +1.7% +2.2% Volume Excl Restructuring Q4: +4.9% excl. restructuring 19
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EBITA margin excl. IAC Q4 2023 Q4 2024Impact Gross Profit Margin A&P SG&A (excl. A&P) 13.3% -20bps 0bps 0bps 13.1% • Higher COGS • Higher sales prices • Higher volumes • Positive mix Report quarter 4 and full-year 2024 20
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Strong development of cash flow 2018 2019 2020 2021 2022 2023 2024 9.9 15.6 16.0 11.1 9.2 17.7 17.2 7.7 11.4 11.0 7.7 5.7 12.4 11.0SEKbn Operating cash flowFree cash flow 21Report quarter 4 and full-year 2024
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22 Strengthened balance sheet 50.4 50.9 42.7 52.5 54.4 50.9 42.7 55.4 62.9 53.7 30.82.8 3.0 2.3 1.8 2.8 3.1 2.0 1.2 0 0,5 1 1,5 2 2,5 3 3,5 4 4,5 5 0 10 20 30 40 50 60 70 2017 2018 2019 2020 2021 2022 2023 2024 Net Debt, SEKbn Net Debt / EBITDA excl. IAC Report quarter 4 and full-year 2024 SEKbn
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Every day our brands care for the hygiene and health of a billion people across 150 countries Magnus Groth President and CEO
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24 Summary 2024 • High net sales of SEK 146bn and highest profit ever of SEK 20.3bn – margin of 14% • Strong cash flow generation and solid balance sheet • More attractive product portfolio, new financial targets and share buyback program • Health & Medical – strong growth, record high profits and margin +470bps • Consumer Goods – high volume growth, margin -20bps • Professional Hygiene – strong growth in premium segments, record high profits and margin +200bps 24
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Priorities 2025 • Volume growth in high yielding segments • Grow positions in North America and Latin America • Innovation, brands and market shares gains • Operational efficiency and digitalization • Continued progress on ESG Accelerating profitable growth
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This presentation may contain forward-looking statements. Such statements are based on our current expectations and are subject to certain risks and uncertainties that could negatively affect our business. Please read our most recent annual report for a better understanding of these risks and uncertainties.
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Q&A
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Essity – Accelerating profitable growth to drive increased shareholder value Globally leading in attractive and growing hygiene and health markets Leading market positions based on strong brands and successful innovations Sustainability at the core and a winning corporate culture Strong financial position with good, stable cash flow generation and attractive dividend and EPS growth Focus to increase sales in fastest growing and most profitable segments and channels Report quarter 4 and full-year 2024 28