Half Half-year R ear Repor eport 2020 t 2020 This presentation - - PowerPoint PPT Presentation

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Half Half-year R ear Repor eport 2020 t 2020 This presentation - - PowerPoint PPT Presentation

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Half Half-year R ear Repor eport 2020 t 2020 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

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Half Half-year R ear Repor eport 2020 t 2020

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July 13, 2020 Half-year Report 2020 2

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 and sustainability

report for a better understanding of these risks and uncertainties.

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H1 2020 vs H1 2019

Summar Summary

Half-year Report 2020 3 July 13, 2020

1) Net sales which excludes exchange rate effects, acquisitions and divestments 2) Excluding items affecting comparability

▪ Strong performance in a challenging environment ▪ Sales negatively impacted by COVID-19 and related lockdowns ▪ Significant profitability improvement

─ Better mix ─ Significant cost savings ─ Lower raw material and energy costs ─ Lower volumes ─ Higher distribution costs ─ Increased sales and marketing costs ─ Lower prices in Consumer Tissue

▪ Strong cash flow and balance sheet

Adjus Adjusted ted EBI BITA A Mar argin gin2)

2)

Net S et Sales ales Adjus Adjusted ted EBI BITA2)

2)

Organic ganic Net S et Sales ales1) x% x% Adjus Adjusted ted ROCE CE2) Adjus Adjusted ted ROE2) Oper perating ting Cas Cash h Flo low Ear arnings nings per S per Shar hare

SEK SEK 62,119m 62,119m

  • 1.0%

1.0%

  • 0.9%

0.9% SEK SEK 9,115m 9,115m +32% +32% 14.7% 14.7% +370bps +370bps 15.6% 15.6% +370bps +370bps SEK SEK 7.58 7.58 +32% +32% SEK SEK 8,827m 8,827m +50% +50% 19.5% 19.5% +100bps +100bps

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Q2 2020 vs Q2 2019

Summar Summary

Half-year Report 2020 4 July 13, 2020

1) Net sales which excludes exchange rate effects, acquisitions and divestments 2) Excluding items affecting comparability 3) A revaluation of deferred tax reduced taxes with SEK 253m in the second quarter of 2019

Adjus Adjusted ted EBI BITA A Mar argin gin2)

2)

Net S et Sales ales Adjus Adjusted ted EBI BITA2)

2)

Organic ganic Net S et Sales ales1) x% x% Adjus Adjusted ted ROCE CE2) Adjus Adjusted ted ROE2) Oper perating ting Cas Cash h Flo low Ear arnings nings per S per Shar hare

SEK SEK 28,407m 28,407m

  • 11.4

11.4%

  • 9.3%

9.3% SEK SEK 3,782m 3,782m +1% +1% 13.3 13.3% +170bps +170bps 13.1% 13.1% +20bps +20bps SEK SEK 2.97 2.97

  • 8%

8%3) SEK SEK 4,346m 4,346m +17% +17% 15.1% 15.1%

  • 380bps

380bps3)

▪ Strong underlying business performance in a challenging environment ▪ Sales negatively impacted by COVID-19 and related lockdowns and destocking ▪ Adjusted EBITA margin improvement ▪ Increased market shares in many markets ▪ Online sales increased with 350 bps to 14% of sales ▪ Successful innovations

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Positiv

  • sitive

e Long Long-ter term m De Development elopment

28,155 27,178 28,664 28,020 29,72129,647 31,112 30,656 32,068 32,565 33,68633,712 28,407

  • 0.1%

+1.8% +1.8% +3.4% +2.3% +1.6% +3.3% +4.3% +3.9% +5.9% +3.6% 7.8%

  • 9.3%
  • 15,00%
  • 10,00%
  • 5,00%

0,00% 5,00% 10,00% 15,00% 20,00% 25,00% 30,00%

20000 22000 24000 26000 28000 30000 32000 34000 36000 38000 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Net Sales, SEKm Organic Net Sales Growth, %

Half-year Report 2020 July 13, 2020 5

3,437 3,432 3,619 3,119 3,349 3,016 3,451 3,190 3,732 4,176 4,742 5,333 3,782 12.2% 12.6% 12.6% 11.1% 11.3% 10.2% 11.1% 10.4% 11.6% 12.8% 14.1% 15.8% 13.3%

7% 8% 9% 10% 11% 12% 13% 14% 15% 16% 17%

2000 2500 3000 3500 4000 4500 5000 5500 6000 6500 7000 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Adjusted EBITA, SEKm Adjusted EBITA margin, %

Adjusted EBITA and EBITA margin2) Net Sales and Organic Net Sales Growth1)

1) Organic net sales which excludes exchange rate effects, acquisitions and divestments 2) Excluding items affecting comparability
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Str Strengt engthene hened d Mar Market et Shar Shares es and Br and Brands ands

Half-year Report 2020 July 13, 2020

Essity has a market share of 30% or above in 40% of its market positions

~90% >60% 40%

Essity has position #1 or #2 in ~90%

  • f our branded sales

6

~60%

Essity’s branded market share has improved in ~60% of its market positions in the past 3 years

Positive development past 6 months and long-term

Essity’s branded market share in retail has improved in >60% of its market positions in the past 6 months

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Net Net Sales Sales

Half-year Report 2020 July 13, 2020 7

Q2 2020 vs Q2 2019

Net Sales Q2 2019 Volume Price/Mix Acquisitions Divestment Currency Net Sales Q2 2020

  • 9.8%
  • 0.2%

+0.5%

  • 11.4%

Organic Net Sales1) -9.3% SEK 32,068m SEK 28,407m

1) Net sales which excludes exchange rate effects, acquisitions and divestments

+0.1%

  • 2.0%
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Adjust Adjusted ed EBIT EBITA A Mar Margin gin1)

1)

Q2 2020 vs Q2 2019

Half-year Report 2020 July 13, 2020 8

1) Excluding items affecting comparability

▪Impact from lower raw material and energy costs +510 bps ▪COGS savings of SEK 127m

11.6% 13.3% +320 bps

  • 30 bps
  • 120 bps

Adjusted EBITA Margin Q2 2019 Impact Gross Profit Margin A&P SG&A (excl A&P) Adjusted EBITA Margin Q2 2020

+170 bps

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Raw Raw Ma Material terial De Development elopment

Half-year Report 2020 July 13, 2020 9

50 75 100 125 150

Polypropylene, EUR Propylene, EUR

75 100 125 150

Fluff NBSK EUCA

40 60 80 100 120 140

SOP US SOP EU

Source: Fastmarkets RISI, Fastmarkets FOEX, VDP, Macrobond, Epexspot, ICIS

Oil-based Raw Materials2) Market Pulp in USD, Europe Paper for Recycling1)

Index 100 = July 2017

1) Sorted Office Paper. Index in local currencies. EU refers to Germany 2) Polypropylene major feedstock of non-woven material, Propylene major feedstock of SAP material 3) Electricity Germany. Natural Gas, TTF Index

50 100 150 200

Electricity, EUR Natural Gas, EUR

Energy Prices3)

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CO COVID VID-19 19

Half-year Report 2020 July 13, 2020 10

Secure Business Success Contribute to Society Care for Our People

Top priorities

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▪ Positive feedback from customers appreciating our support, service and delivery reliability ▪ Successful innovations ▪ Increased presence and activity in digital sales channels ▪ Strengthened market shares in many markets ▪ Significantly increased awareness of hygiene and health

Half-year Report 2020 July 13, 2020 11

Secur Secure Busine Business ss Success Success

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Inno Innova vations tions

Q2 2020

July 13, 2020 Half-year Report 2020 12

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Incr Increased A eased Awar areness of eness of Hygiene and Health Hygiene and Health

Half-year Report 2020 July 13, 2020 13

Leveraging our leading solutions

Anti-bacterial Products Reposition Products to Hygienic Benefits Soaps and Sanitizers Tork PeakServe

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Per ersonal Car sonal Care

▪ Organic net sales decreased 9.4% ─ Volume -10.2% and price/mix +0.8% ▪ Sales negatively impacted by COVID-19 and related lockdowns and destocking ▪ Gradual improvement of sales in June ▪ Higher prices ▪ Cost savings ▪ Lower raw material costs ▪ Lower volumes and higher distribution costs ▪ Lower sales and marketing costs but higher as % of net sales

Q2 2020 vs Q2 2019

Half-year Report 2020 July 13, 2020 14

SEK 10,651m SEK 12,164m Q2 2019 Q2 2020 SEK 1,438m SEK 1,711m

Net Sales Adjusted EBITA1) Adjusted EBITA Margin1)

  • 16%
  • 12.4%

14.1% 13.5%

  • 9.4%

Total Mature Markets Incontinence Products

By Region By Product Segment

Emerging Markets

  • 12.2%
  • 3.2%
  • 15.9%
  • 0.2%

Baby Care Feminine Care % of Personal Care Net Sales: 63% 37% 48% 16% 18% 18%

  • 25.6%
  • 4.1%

Medical Solutions

Organic Net Sales

1) Excluding items affecting comparability

Q2 2019 Q2 2020 Q2 2019 Q2 2020

  • 60

bps

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Consu Consumer mer Tissue Tissue

▪ Organic net sales increased 4.3% ─ Volume +4.9% and price/mix -0.6% ▪ Higher volumes ▪ Better mix but lower prices ▪ Lower raw material and energy costs ▪ Higher distribution costs ▪ Higher sales and marketing costs but lower as % of net sales

Q2 2020 vs Q2 2019

Half-year Report 2020 July 13, 2020 15

SEK 12,437m SEK 12,167m SEK 2,124m SEK 1,166m

Net Sales Adjusted EBITA1) Adjusted EBITA Margin1)

+2.2% +750 bps 9.6% 17.1% Q2 2019 Q2 2020 +4.3% Total Mature Markets

Organic Net Sales By Region

Emerging Markets

  • 2.3%

% of Consumer Tissue Net Sales: 51% 49% +12.4% +82%

1) Excluding items affecting comparability

Q2 2019 Q2 2020 Q2 2019 Q2 2020

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Pr Prof

  • fessional

essional Hygiene Hygiene

▪ Organic net sales decreased 30.7% ─ Volume -32.2% and price/mix +1.5% ▪ Sales negatively impacted by COVID-19 and related lockdowns and destocking ▪ Higher prices and better mix ▪ Cost savings ▪ Lower raw material and energy costs ▪ Lower volumes and higher distribution costs ▪ Lower sales and marketing costs but higher as % of net sales ▪ Higher sales of dispensers and skin care

Q2 2020 vs Q2 2019

Half-year Report 2020 July 13, 2020 16

Q2 2019 Q2 2020

SEK 5,315m SEK 7,742m

Net Sales Adjusted EBITA1) Adjusted EBITA Margin1)

  • 53%
  • 31.3%
  • 430

bps 9.0% 13.3% SEK 1,026m SEK 481m Q2 2019 Q2 2020

  • 30.8%

% of Professional Hygiene Net Sales:

  • 29.5%

Total Mature Markets Emerging Markets 81% 19%

Organic Net Sales By Region

1) Excluding items affecting comparability

Q2 2019 Q2 2020 Q2 2019 Q2 2020

  • 30.7%
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Summar Summary

Q2 2020

Half-year Report 2020 July 13, 2020 17

▪ Strong underlying business performance in a challenging environment ▪ Adjusted EBITA margin improvement ▪ Sales negatively impacted by COVID-19 and related lockdowns and destocking ▪ Increased market shares in many markets ▪ Online sales increased with 350 bps to 14% of sales ▪ Increasing importance of hygiene and health

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