E8. Equity
AP Accounting principles
Transaction costs directly relating to the issue of new shares or options are recognized, net after tax, in equity as a reduction in the issue proceeds. Expenditure for the purchase of own shares reduces retained earnings in equity in the Parent company and the portion of consolidated equity that pertains to owners of the Parent company. When these shares are sold, the sales proceeds are included in retained earnings in the equity pertaining to owners of the Parent company.
Equity totaled SEK 68,507m (63,342; 62,801) at December 31, 2021. Page Statement of change in equity shows the Consolidated statement of change in equity.
The tables below show specifications of reserves and income tax attributable to components in other comprehensive income.
|
Revaluation reserve1) |
|
Hedge reserve2) |
|
Fair value through other comprehensive income |
|
Translation reserve |
|
Total reserves in Equity |
||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
SEKm |
2021 |
2020 |
2019 |
|
2021 |
2020 |
2019 |
|
2021 |
2020 |
2019 |
|
2021 |
2020 |
2019 |
|
2021 |
2020 |
2019 |
||||||
Value, January 1 |
107 |
107 |
107 |
|
141 |
–206 |
245 |
|
10 |
8 |
4 |
|
323 |
6,375 |
4,647 |
|
581 |
6,284 |
5,003 |
||||||
Fair value through other comprehensive income |
|
|
|
|
|
|
|
|
0 |
3 |
6 |
|
|
|
|
|
0 |
3 |
6 |
||||||
Cash flow hedges: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Result from remeasurement of derivatives recognized in equity |
|
|
|
|
4,142 |
–9 |
–725 |
|
|
|
|
|
|
|
|
|
4,142 |
–9 |
–725 |
||||||
Transferred to profit or loss for the period |
|
|
|
|
–1,363 |
473 |
112 |
|
|
|
|
|
|
|
|
|
–1,363 |
473 |
112 |
||||||
Acquired cash flow hedges |
|
|
|
|
11 |
|
|
|
|
|
|
|
|
|
|
|
11 |
|
|
||||||
Translation differences in foreign operations3) |
|
|
|
|
33 |
–6 |
10 |
|
– |
– |
– |
|
4,559 |
–7,246 |
1,859 |
|
4,592 |
–7,252 |
1,869 |
||||||
Gains/losses from hedges of net investments in foreign operations |
|
|
|
|
|
|
|
|
|
|
|
|
–1,012 |
1,504 |
–168 |
|
–1,012 |
1,504 |
–168 |
||||||
Tax on items recognized directly in/transferred from equity |
|
|
|
|
–744 |
–109 |
138 |
|
0 |
–1 |
–2 |
|
208 |
–310 |
37 |
|
–536 |
–420 |
173 |
||||||
Other comprehensive income for the period, net of tax |
– |
– |
– |
|
2,079 |
349 |
–465 |
|
0 |
2 |
4 |
|
3,755 |
–6,052 |
1,728 |
|
5,834 |
–5,701 |
1,267 |
||||||
Transfer to cost of fixed assets concerning hedged investments, net of tax |
|
|
|
|
1 |
–2 |
14 |
|
|
|
|
|
|
|
|
|
1 |
–2 |
14 |
||||||
Value, December 31 |
107 |
107 |
107 |
|
2,221 |
141 |
–206 |
|
10 |
10 |
8 |
|
4,078 |
323 |
6,375 |
|
6,416 |
581 |
6,284 |
||||||
|
|||||||||||||||||||||||||
|
2021 |
|
2020 |
|
2019 |
||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
SEKm |
Before tax |
Tax effect |
After tax |
|
Before tax |
Tax effect |
After tax |
|
Before tax |
Tax effect |
After tax |
Actuarial gains/losses on defined benefit pension plans |
–148 |
–13 |
–161 |
|
–202 |
280 |
78 |
|
482 |
54 |
536 |
Fair value through other comprehensive income |
0 |
0 |
0 |
|
3 |
–1 |
2 |
|
6 |
–2 |
4 |
Cash flow hedges |
2,779 |
–744 |
2,035 |
|
464 |
–109 |
355 |
|
–613 |
138 |
–475 |
Translation differences in foreign operations |
5,480 |
– |
5,480 |
|
–8,092 |
– |
–8,092 |
|
2,095 |
– |
2,095 |
Other comprehensive income from associated companies |
15 |
–3 |
12 |
|
–20 |
4 |
–16 |
|
–14 |
4 |
–10 |
Gains/losses from hedges of net investments in foreign operations |
–1,012 |
208 |
–804 |
|
1,504 |
–310 |
1,194 |
|
–168 |
37 |
–131 |
Other comprehensive income for the period |
7,114 |
–552 |
6,562 |
|
–6,343 |
–136 |
–6,479 |
|
1,788 |
231 |
2,019 |
At December 31, 2021, the debt/equity ratio amounted to 0.81 (0.67; 0.81). Changes in liabilities and equity are described in the Financial position section. Essity’s target for capital structure is to establish an effective capital structure, while at the same time ensuring long-term access to loan financing. Cash flow in relation to net debt is to be taken into consideration with the aim of maintaining a solid investment grade rating.
Essity has a credit rating for long-term debt of Baa1 from Moody’s and BBB+ from Standard & Poor’s. Essity’s financial risk management is described in the Risk and risk management section. The Essity share section outlines Essity’s dividend policy, while its capital structure is described in the Objectives, targets and outcomes section.