Thir hird Quar Quarter ter 2019 2019 This presentation may - - PowerPoint PPT Presentation
Interim Interim Repor eport Thir hird Quar Quarter ter 2019 2019 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
October 25, 2019 Interim Report Q3 2019 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
report for a better understanding of these risks and uncertainties.
Q3 2019 vs Q3 2018
Interim Report Q3 2019 3 October 25, 2019
1) Net sales which excludes exchange rate effects, acquisitions and divestments 2) Excluding items affecting comparability▪ Strong organic net sales growth and higher adjusted EBITA margin in all business areas ▪ Higher prices, better mix, higher volumes and cost savings in all business areas ▪ Lower raw material and energy costs but negative impact from stock revaluation ▪ EPS increased 150% to SEK 3.53
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 32 32,565 ,565m +9 +9.8% .8%
+5.9% +5.9%
SEK SEK 4,17 4,176m 6m +38% +38% 12 12.8% .8% +2 +260 60 bps bps
20.1% 20.1% 14.3% 14.3% SEK SEK 3.53 3.53 +150% +150% +73% +73%
3,437 3,432 3,619 3,119 3,349 3,016 3,451 3,190 3,732 4,176 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 28,155 27,178 28,664 28,020 29,721 29,647 31,112 30,656 32,068 32,565 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019
SEKm
October 25, 2019 Interim Report Q3 2019
12.2%
4
12.6% 12.6% 11.1% 11.3% 10.2% 11.1% 10.4% 11.6%
Adjusted EBITA2)
SEKm
Net Sales
Adjusted EBITA Margin2)
+1.8% +1.8% +3.4% +2.3% +1.6% +3.3% +4.3% +3.9%
Organic Net Sales1)
+5.9% 12.8%
Interim Report Q3 2019 October 25, 2019 5
Q3 2019 vs Q3 2018
Net Sales Q3 2018 Price/Mix Volume Divestment Currency Net Sales Q3 2019
+2.1% +4.3% +3.8% +9.8% Organic Net Sales1) +5.9% SEK 29,647m SEK 32,565m
1) Net sales which excludes exchange rate effects, acquisitions and divestments 1)
Q3 2019 vs Q3 2018
Interim Report Q3 2019 October 25, 2019 6
Adjusted EBITA Q3 2018 Price/Mix Volume Raw Material Energy Cost Savings COGS Cost-savings Program Other Currency Adjusted EBITA Q3 2019
Organic Adjusted EBITA +31%2)
SEK 3,016m
+38%
SEK +614m SEK +367m SEK +409m SEK +57m SEK +92m SEK -773m SEK +215m SEK 4,176m
1) 1)
1) Excluding items affecting comparability 2) Excluding items affecting comparability, currency translation effects and acquisitionsSEK +179m
▪ Higher sales and marketing costs ▪ Stock revaluation ▪ Higher distribution costs
Interim Report Q3 2019 October 25, 2019 7
75 100 125 150
Polypropylene, EUR Propylene, EUR
75 100 125 150
Fluff NBSK EUCA
50 75 100 125 150
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 Index60 85 110 135 160 185 210
Electricity, EUR Natural Gas, EUR
Energy Prices3)
▪ Lower COGS savings in Q3 2019 due to temporarily higher production and distribution costs mainly due to disruptions related to ─ Start-up of new production capacity ─ Higher pace of product launches ─ Higher demand ▪ Changed ambition for COGS savings 2019: SEK 600-700m ▪ Savings from ─ Tissue Roadmap ─ Operational efficiency improvements ─ Material rationalization ─ Sourcing savings
SEK 92m in Q3 2019
Interim Report Q3 2019 October 25, 2019 8
Q3 2018 Q3 2019
SEK 179m in Q3 2019
Interim Report Q3 2019 October 25, 2019 9
▪ Main impact in SG&A costs ▪ Expected annual cost savings of approx SEK 900m with full effect at the end of 2019 ▪ End of Q3 2019 annualized run-rate cost savings SEK 799m ▪ Headcount reduction of approx. 880 positions out of 1,000 ▪ Ambition for cost savings 2019: SEK 600m
17.6% 17.2%
Reduction of SG&A as % of Sales
Interim Report Q3 2019 October 25, 2019 10
▪ Organic net sales increased 4.5% ─ Volume +3.3% and price/mix +1.2% ▪ Higher prices, better mix, higher volumes and cost savings ▪ Raw material and energy headwinds with negative impact of
▪ Higher distribution costs ▪ Investments in growth and costs related to implementation of Medical Device Regulation increased sales and marketing costs ▪ Exit of open baby diapers in Russia
Q3 2019 vs Q3 2018
Interim Report Q3 2019 October 25, 2019 11
SEK 12,216m SEK 11,408m Q3 2018 Q3 2019 Q3 2018 Q3 2019 Q3 2018 Q3 2019 SEK 1,739m SEK 1,565m
Net Sales Adjusted EBITA1) Adjusted EBITA Margin1)
+11% +7.1% +50 bps 13.7% 14.2% +4.5% Total Mature Markets Incontinence Products
By Region By Product Segment
Emerging Markets +3.3% +5.9%
+10.7% Baby Care Feminine Care % of Personal Care Net Sales: 63% 37% 44% 19% 18% 19% +1.5% +6.9% Medical Solutions
Organic Net Sales
1) Excluding items affecting comparability ▪ Organic net sales increased 8.1% ─ Volume +4.9% and price/mix +3.2% ▪ Higher prices, better mix, higher volumes and cost savings ▪ Lower raw material and energy costs but negative impact from stock revaluation ▪ Higher distribution costs ▪ Investments in growth with higher sales and marketing costs
Q3 2019 vs Q3 2018
Interim Report Q3 2019 October 25, 2019 12
SEK 12,220m SEK 10,912m SEK 1,319m SEK 635m
Net Sales Adjusted EBITA1) Adjusted EBITA Margin1)
+12% +500 bps 5.8% 10.8% Q3 2018 Q3 2019 Q3 2018 Q3 2019 Q3 2018 Q3 2019 +8.1% Total Mature Markets
Organic Net Sales By Region
Emerging Markets +4.3% % of Consumer Tissue Net Sales: 54% 46% +12.8% +108%
1) Excluding items affecting comparability ▪ Organic net sales increased 5.0% ─ Volume +3.2% and price/mix +1.8% ▪ Higher prices, better mix, higher volumes and cost savings ▪ Lower raw material and energy costs but negative impact from stock revaluation ▪ Investments in growth with higher sales costs
Q3 2019 vs Q3 2018
Interim Report Q3 2019 October 25, 2019 13
Q3 2018 Q3 2019
SEK 8,131m SEK 7,309m
Net Sales Adjusted EBITA1) Adjusted EBITA Margin1)
+33% +11.3% +250 bps 15.8% 13.3% SEK 970m SEK 1,288m Q3 2018 Q3 2019 +5.0% +4.4% % of Professional Hygiene Net Sales: +8.1% Total Mature Markets Emerging Markets 80% 20%
Organic Net Sales By Region
1) Excluding items affecting comparabilityQ3 2018 Q3 2019 Q3 2018 Q3 2019
Interim Report Q3 2019 October 25, 2019 14
Essity with the Tork brand launches Virtual Reality app for Hand Hygiene education
in online sales 9M 2019
Approx 10% of Group Net Sales
▪ Strong organic sales growth and improved profitability in all business areas ▪ EPS increased 150% to SEK 3.53 ▪ Continued high innovation pace improving well-being and strengthening our brands ▪ Investments in growth with higher sales and marketing costs but lower as % of sales ▪ Continued cost and efficiency focus
Interim Report Q3 2019 October 25, 2019 15
Q3 2019