Generate increased shareholder value through profitable growth
Essity works to generate long-term value for its shareholders and that the Essity share is to have a higher total shareholder return than competitors.
Essity focuses on profitable growth in order to increase the Group’s value creation and the total shareholder return. We prioritize growth in our product categories with the highest margins and our ambition is that these will account for an increasing share of Essity’s net sales. In addition to organic sales growth, Essity sees an opportunity to also grow through acquisitions. With respect to underperforming market positions, we are primarily focusing on improving profitability. To strengthen competitiveness and improve profitability, Essity is also constantly working to reduce the cost base related to cost of goods sold as well as costs for sales and administration.
Shareholder value is achieved through a positive share price trend and dividends.
Read more about the Essity share in the chapter Share.
Target
Outcome 2018
Organic sales growth1)
Target
Annual organic sales growth of above 3%.
>3%
Outcome 2018
2.6%
Adjusted return on capital employed2)
Target
Adjusted return on capital employed of above 15%.
>15%
Outcome 2018
12.0%
Policy and outcomes 2018
Dividend policy: Essity aims to provide long-term stable and rising dividends to its shareholders. When cash flow from current operations exceeds what the company can invest in profitable expansion over the long term, and under the condition that the capital structure target is met, the surplus shall be distributed to the shareholders.
The Board of Directors proposes a dividend of SEK 5.75 per share for the 2018 fiscal year.
Capital Structure Policy: Essity’s target is to have an effective capital structure at the same time that the long-term access to debt financing is ensured. Cash flow in relation to net debt shall take into account the target to maintain a solid investment grade rating.
In 2018, Essity had a solid investment grade rating.
1) Net sales excluding exchange rate effects, acquisitions and divestments.
2) Excluding items affecting comparability.
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