STOCKHOLM, April 23, 2020 /PRNewswire/ -- JANUARY 1 - MARCH 31, 2020
(compared with the corresponding period a year ago)
- Net sales increased 10.0% to SEK
33,712m (30,656)
- Organic net sales increased 7.8%
- The COVID-19 pandemic resulted in a sharp increase in sales and
earnings in March 2020 as a result of
stockpiling among consumers and distributors
- In emerging markets, which accounted for 35% of net sales,
organic net sales increased 4.0%
- Operating profit before amortization of acquisition-related
intangible assets (EBITA) increased 77% to SEK 5,316m (3,002)
- Adjusted EBITA increased 67% to SEK
5,333m (3,190)
- Adjusted EBITA margin increased 5.4 percentage points to 15.8%
(10.4)
- Profit for the period increased 87% to SEK 3,610m (1,929)
- Earnings per share increased 85% to SEK
4.61 (2.49)
- Adjusted earnings per share increased 69% to SEK 4.83 (2.86)
- Cash flow from current operations increased 25% to SEK 3,044m (2,434)
SUMMARY OF THE FIRST QUARTER 2020
The Group's net sales increased 10.0% in the first quarter of
2020 compared with the corresponding period a year ago. Organic net
sales increased 7.8%, of which volume accounted for 5.9% and
price/mix for 1.9%. In mature markets, organic net sales increased
10.2%. In emerging markets, which accounted for 35% of net sales,
organic net sales increased 4.0%.
The COVID-19 pandemic resulted in a sharp increase in sales in
many markets for Consumer Tissue, Incontinence Products,
Baby Care, Feminine Care and
Professional Hygiene as a result of stockpiling among consumers and
distributors. In March 2020, organic
net sales for the Group increased 19.7% compared with March 2019. Organic net sales for Personal Care
rose by 17.0%, for Consumer Tissue by 19.5% and for Professional
Hygiene by 24.5%. Sales in future quarters will be adversely
impacted by the stockpiling seen in March and sales in Professional
Hygiene will also be negatively impacted by reduced travel, fewer
restaurant visits and more people working from home. In the
long-term, the COVID-19 pandemic may lead to increased demand for
hygiene and health products due to, for example, a greater focus on
hand hygiene.
During the COVID-19 pandemic, Essity has three main priorities:
care for our employees, continuing to operate a successful business
and contributing to society. To maintain a safe work environment
for our employees, satisfy increased demand and safeguard
production and logistics, we have carried out measures in all parts
of the business, including new ways of working for our employees,
production adaptations and securing transportation. We have
increased our presence and activity in digital sales channels. We
contribute to society by delivering our leading hygiene and health
solutions. In Sweden, the US and
Mexico, we are investing in the
production of surgical masks and face masks for the healthcare
sector and our employees. We support the WHO COVID-19 Solidarity
Response Fund and several local initiatives.
The Group's adjusted gross margin for the first quarter of 2020
increased 5.6 percentage points to 32.8% compared with the
corresponding period in the preceding year. The gross margin was
positively impacted by higher volumes, a better mix and costs
savings. Continuous cost savings amounted to SEK 260m. Lower raw materials and energy costs
increased the gross margin by 4.7 percentage points. Lower raw
material costs were primarily the result of lower pulp prices. Our
production facilities outside of China did not experience any major production
disruptions due to the COVID-19 pandemic, although distribution
costs have increased. Lower prices, mainly related to Consumer
Tissue in Europe and Asia, had a negative impact on the gross
margin. The Group's adjusted EBITA margin rose 5.4 percentage
points to 15.8%. Investments in growth increased sales and
marketing costs, also as a share of net sales. Adjusted EBITA for
the first quarter of 2020 increased 67% compared with the same
period in the preceding year. Adjusted return on capital employed
rose 7.1 percentage points to 18.4 percent. Operating cash flow
increased 108%. Earnings per share increased 85% to SEK 4.61.
Essity has a robust financial position and a solid funding
situation. At March 31, 2020, net
debt in relation to adjusted EBITDA was 2.09. The rapid spread of
COVID-19 pandemic and related countermeasures mean the level of
uncertainty in future forecasts is much greater than normal. At the
Annual General Meeting, it was decided not to pay a dividend for
2019. The Board of Directors has announced that it intends to
revisit the issue concerning a dividend later in the year when a
better overview can be gained of the effects of the ongoing
COVID-19 pandemic.
FUTURE REPORTS
In 2020, interim reports will be published on July 17 and October
22.
INVITATION TO PRESENTATION OF INTERIM REPORT FIRST QUARTER
2020
Media and analysts are invited to a telephone/web presentation
at which President and CEO Magnus
Groth will present and answer questions.
Presentation
Date: Thursday, April 23, 2020
Time: 9:00 a.m. CET
Link to web presentation:
https://essity.videosync.fi/2020-04-23-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. 6966854.
Stockholm, April 23, 2020
Essity Aktiebolag (publ)
Magnus Groth
President and CEO
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 07:00 CET on
April 23, 2020. This interim report
has not been reviewed by the company's auditors.
Karl Stoltz, Media Relations
Manager, +46(0)8-788-51-55
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
This information was brought to you by Cision
http://news.cision.com
https://news.cision.com/essity/r/interim-report-first-quarter-2020,c3094893
The following files are available for download:
https://mb.cision.com/Main/15798/3094893/1234365.pdf
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SOURCE Essity