Net sales and earnings
Net sales
Essity’s net sales in 2020 declined 5.6% compared with the corresponding period a year ago to SEK 121,752m (128,975). Organic net sales, which exclude exchange rate effects, acquisitions and divestments, declined 1.9%, of which volume accounted for –2.3% and price/mix for 0.4%. Sales were negatively impacted by the COVID-19 pandemic and the related lockdowns and restrictions. Organic net sales declined 4.5% in mature markets and increased 2.6% in emerging markets. Emerging markets accounted for 37% of net sales. Exchange rate effects reduced net sales by 3.7%. Acquisitions increased net sales by 0.1% and were largely attributable to the acquisition of the medical solutions company ABIGO Medical AB. Divestment of a partly owned company in Turkey reduced net sales by 0.1%.
Earnings
The Group’s adjusted gross margin increased 3.0 percentage points to 32.5% (29.5) compared with the corresponding period a year ago. The gross margin was positively impacted by a better mix in all business areas, lower raw material and energy costs and cost savings. Continuous cost savings amounted to SEK 1,056m. The Group’s adjusted EBITA margin rose 2.2 percentage points to 14.5% (12.3). Sales and marketing costs increased as a share of net sales.
Essity’s adjusted operating profit before amortization of acquisition-related intangible assets (adjusted EBITA)1) increased 11% (16% excluding currency translation effects, acquisitions and divestments) in 2020 to SEK 17,626m (15,840).
Items affecting comparability amounted to SEK –59m (–713) and were impacted positively as a result of the Dutch pension plan being reclassified from a defined benefit to a defined contribution scheme during the second quarter of 2020 due to a contract renegotiation. Restructuring costs and impairments had a negative impact.
Financial items decreased to SEK –958m (–1,309). Lower interest and lower average net debt had a positive impact.
Adjusted profit before tax1) increased 15% (20% excluding currency translation effects, acquisitions and divestments) and amounted to SEK 15,859m (13,753).
The tax expense, excluding effects of items affecting comparability, was SEK 4,054m (2,987).
Adjusted profit for the period increased 10% (15% excluding currency translation effects, acquisitions and divestments) and amounted to SEK 11,805m (10,766).
Profit for the period increased 15% (20% excluding currency translation effects, acquisitions and divestments) to SEK 11,747m (10,212). Earnings per share were SEK 14.56 (13.12). The adjusted earnings per share were SEK 15.45 (14.69).
Key figures
The adjusted return on capital employed1) was 15.7% (13.8). The adjusted return on equity1) was 18.3% (18.4).
SEKm |
2020 |
2019 |
2018 |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
Net sales |
121,752 |
128,975 |
118,500 |
|||||||||
Adjusted EBITA1) |
17,626 |
15,840 |
12,935 |
|||||||||
EBITA |
17,567 |
15,127 |
11,560 |
|||||||||
Adjusted operating profit1) |
16,817 |
15,062 |
12,203 |
|||||||||
Items affecting comparability |
–59 |
–713 |
–1,444 |
|||||||||
Operating profit |
16,758 |
14,349 |
10,759 |
|||||||||
Financial items |
–958 |
–1,309 |
–1,157 |
|||||||||
Adjusted profit before tax1) |
15,859 |
13,753 |
11,046 |
|||||||||
Profit before tax |
15,800 |
13,040 |
9,602 |
|||||||||
Adjusted tax1) 2) |
–4,054 |
–2,987 |
–1,490 |
|||||||||
Tax2) |
–4,053 |
–2,828 |
–1,050 |
|||||||||
Adjusted profit for the period1) |
11,805 |
10,766 |
9,556 |
|||||||||
Profit for the period |
11,747 |
10,212 |
8,552 |
|||||||||
|
||||||||||||
Net sales, share of Group
Adjusted EBITA1) and adjusted EBITA margin1)
1) Excluding items affecting comparability.
Adjusted earnings per share1)
1) Excluding items affecting comparability and amortization of acquisition-related intangible assets.
2) Indicative earnings per share on the assumption that the number of issued shares in Essity as of December 31, 2016 corresponded to the number of issued shares in Essity on December 31, 2017 (702.3 million).