Essity: Year-end Report 2019
STOCKHOLM, Jan. 22, 2020 /PRNewswire/ -- JANUARY 1 - DECEMBER 31, 2019 (compared with the corresponding period a year ago)
SUMMARY OF THE FULL YEAR AND FOURTH QUARTER OF 2019
Both growth and profitability increased for Essity in 2019. The Group's organic net sales rose 4.5%. Adjusted EBITA increased 22% while the adjusted EBITA margin rose 1.4 percentage points to 12.3%. Earnings were positively impacted by implemented price increases, a better product mix, higher volumes, cost savings and lower raw material costs. Stock revaluations due to lower raw material prices and higher distribution costs had a negative impact on earnings. Investments to increase growth resulted in higher sales and marketing costs. The adjusted return on capital employed rose by 1.8 percentage points to 13.8%. Earnings per share increased 17% to SEK 13.12. The Board of Directors proposes an increase in the dividend of 9% to SEK 6.25 per share.
During the year, we increased growth, improved profitability and strengthened our competitiveness for the future through:
The Group's net sales increased 8.3% in the fourth quarter of 2019 compared with the corresponding period a year ago. Organic net sales increased 3.6%, of which volume accounted for 2.3% and price/mix for 1.3%. In emerging markets, which accounted for 37% of net sales, organic net sales increased 6.6%, while the increase in mature markets was 1.9%.
The Group's adjusted EBITA in the fourth quarter of 2019 increased 37% compared with the corresponding period a year ago. Earnings were positively impacted by higher prices, a better product mix, higher volumes, lower raw material and energy costs and cost savings amounting to SEK 206m, of which SEK 202m were related to the cost-savings program. Investments to increase growth and higher costs for incentive programs resulted in increased sales and marketing costs. Higher distribution costs and stock revaluations due to lower raw material prices had a negative impact on earnings. Lower pulp prices have resulted in price pressure in the market for consumer tissue. In the Consumer Tissue business area, we have finalized some negotiations and agreed on price decreases in Europe. The agreed price decreases are on average low single-digits and will have an impact in the first quarter of 2020. The Group's adjusted EBITA margin increased 3.0 percentage points to 14.1%. The adjusted return on capital employed rose 3.7 percentage points to 16.4%. Operating cash flow increased 46%. Earnings per share were SEK 3.87.
Essity's Annual Report for 2019 is intended to be published in the week beginning March 9, 2020. In 2020, interim reports will be published on April 23, July 17 and October 22.
ANNUAL GENERAL MEETING
Essity's Annual General Meeting will be held in Stockholm on April 2, 2020.
INVITATION TO PRESS CONFERENCE OF YEAR-END REPORT FOR 2019
Media and analysts are invited to a press conference at which President and CEO Magnus Groth will present this Year-end Report.
Date: Wednesday, January 22, 2020
Time: 9:00 a.m. CET
Location: Essity's headquarters, Waterfront Building, Klarabergsviadukten 63, Stockholm, Sweden
Link to Web presentation: https://essity.videosync.fi/2020-01-22-q4
The press conference will be webcast at www.essity.com. 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 conference. Specify "Essity" or conference ID no. 3561699.
Stockholm, January 22, 2020
Essity Aktiebolag (publ)
President and CEO
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 January 22, 2020.
For further information, please contact:
CFO and Executive Vice President
Vice President Investor Relations, Group Function Communications
Joséphine Edwall Björklund
Senior Vice President, Group Function Communications
Vice President Corporate Communications, Group Function Communications
Media Relations Manager
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