Interim Interim Repor eport Q3 2017 Q3 2017
This presentation may contain forward-looking statements. Such statements are based on our current expectations and are subject to certain risks and uncertainties that could negatively affect our business. Please read our most recent annual report for a better understanding of these risks and uncertainties. 2 October 26, 2017 Interim Report Q3 2017
Ma Magnus Gr gnus Groth, oth, Pr President and CEO esident and CEO
Summar Summary Q3 2017 Q3 2017 Q3 2017 vs Q3 2016 ▪ Organic sales 1) increased 1.8% ▪ Adjusted EBITA margin 2) increased 30 bp to 12.6% ▪ Adjusted ROCE 2) 13.8% ▪ Strong contribution from efficiency improvements ▪ 13 innovations launched in all categories ─ Brands such as Cutimed, Edet, Leukoplast, Libero, Lotus, Saba, Tempo, TENA, Tork and Zewa 1) Sales which excludes exchange rate effects, acquisitions and divestments 2) Excluding items affecting comparability 4 October 26, 2017 Interim Report Q3 2017
Financial Financial Summar Summary Q3 2017 vs Q3 2016 Net Net Sales Adjust Adjusted EBIT BITA 2) Adjusted EBIT Adjust BITA A Mar Margin 2) 2) 2) SEK SEK SEK SEK 12 12.6% .6% 27 27,178 ,178m 3,43 3,432m 2m +30bp +30bp +7.7% +7 .7% +10% +10% Organic Sales 1) Or Or Organic Adjust Adjusted EBIT BITA Op Operating ting Cash Cash Flow 1) SEK SEK +1 +1.8% .8% -1% 1% 3) 3) x% x% 3,33 3,337m 7m 1) Sales which excludes exchange rate effects, acquisitions and divestments 2) Excluding items affecting comparability 3) Excluding items affecting comparability, currency translation effects and acquisitions 5 October 26, 2017 Interim Report Q3 2017
Financial Summar Financial Summary Q3 2017 vs Q3 2016 Adjust Adjusted ROCE OCE 1) EPS EPS Adjusted EPS Adjust EPS 2) 2.98 2.98 3.17 3.17 13 13.8% .8% SE SEK K x SE SEK K x SEK SEK SEK SEK 1) Excluding items affecting comparability 2) Excluding items affecting comparability and amortization of acquisition related intangible assets 6 October 26, 2017 Interim Report Q3 2017
Initia Initiativ tives es an and d Rec ecog ognition nitions ▪ Essity and Microsoft partner on Internet of Things ▪ Recognition in European Parliament for recycling service for Tork paper hand towels ▪ Essity and United Nations Foundation convene Global Dialogue on UN Sustainable Development Goals ▪ Essity recognized by CDP* as world leader for its action on forests and water *CDP is a not-for-profit that runs the global disclosure system for investors, companies, cities, states and regions to manage their environmental impacts. 7 October 26, 2017 Interim Report Q3 2017
Inno Innova vations f tions for or People eople and and Na Natur ture Q3 2017 ▪ 13 innovations launched in all categories ─ Brands such as Cutimed, Edet, Leukoplast, Libero, Lotus, Saba, Tempo, TENA, Tork and Zewa 8 October 26, 2017 Interim Report Q3 2017
Per ersonal Car sonal Care Adjusted EBITA 1) Adjusted EBITA Margin 1) Net Sales 14.9% SEK 10,449m 12.8% SEK 1,556m +210bp Q3 2017 vs Q3 2016 +24.9% SEK 8,362m +45% SEK 1,072m ▪ Net sales increased 24.9% ▪ Organic sales increased 3.0% Q3 2016 Q3 2017 Q3 2016 Q3 2017 Q3 2016 Q3 2017 ▪ Adjusted EBITA 1) increased 45% ─ Acquisition of BSN medical ─ Higher volumes ─ Cost savings ─ Improved profitability in Incontinence Products in North America ─ Positive effect from closure of Baby Care in Mexico and hygiene business in India ─ Lower prices ─ Higher raw material costs ▪ Adjusted EBITA margin 1) 14.9% ▪ Adjusted ROCE 1) 16.0% 1) Excluding items affecting comparability 9 October 26, 2017 Interim Report Q3 2017
Organic Sales Per ersonal Car sonal Care By Region By Product Segment Q3 2017 vs Q3 2016 5.2% ▪ Organic sales increased 3.0% +4.6% % +3.0% 2.9% ─ Volume +4.9% +1.9% 1.7% 1) ─ Price/mix -1.9% 0.1% ─ Negative impact of ~1% related to closures Total Mature Emerging Incontinence Baby Feminine Medical of Baby Care Mexico and hygiene business in India Markets Markets Products Care Care Solutions ▪ Mature markets % of Personal ─ Care Net Sales: 64% 36% 43% 21% 16% 20% Western Europe ─ Good growth for Baby Care ─ Flat sales for Feminine Care ─ Flat sales for Incontinence Products ─ Good growth in Retail and flat sales in Health Care ─ North America ─ Higher sales in Incontinence Products ▪ Emerging markets ─ Asia +1% ─ Latin America +3% ─ Good growth for Incontinence Products and Feminine Care ─ Lower sales in Baby Care mainly due to closure of Baby Care in Mexico ─ Russia -10% 1) Not included in Personal Care’s organic sales for Q3 2017 10 October 26, 2017 Interim Report Q3 2017
Medical Solutions Medical Solutions BSN medical acquisition ▪ Successful start of integration ─ Organizational changes implemented ─ Joint strategy for combined business unit delivered Q3 2017 organic sales 1) increased 1.7% ▪ Adjusted EBITA margin 2) 19.2% ▪ Q3 2017 SEKm ─ Integration cost impact -0.4% Net sales 2,066 Organic sales 1) vs Q3 2016 +1.7% Adjusted EBITA 2) 397 Adjusted EBITA margin 2) 19.2% 1) Sales which excludes exchange rate effects, acquisitions and divestments. Not included in Essity’s reported organic sales for Q3 2017. 2) Excluding items affecting comparability 11 October 26, 2017 Interim Report Q3 2017
Consu Consumer mer Tissue Tissue Adjusted EBITA 1) Adjusted EBITA Margin 1) Net Sales SEK 10,164m 10.9% SEK 10,066m 10.2% Q3 2017 vs Q3 2016 -1.0% -70bp SEK 1,110m SEK 1,023m -8% ▪ Net sales decreased 1.0% ▪ Organic sales increased 0.7% Q3 2016 Q3 2017 Q3 2016 Q3 2017 Q3 2016 Q3 2017 Adjusted EBITA 1) decreased 8% ▪ ─ Higher raw material costs mainly due to higher pulp prices ─ Lower prices in Europe ─ Higher volumes ─ Cost savings ─ Lower energy prices ▪ Adjusted EBITA margin 1) 10.2% ▪ Adjusted ROCE 1) 9.8% 1) Excluding items affecting comparability 12 October 26, 2017 Interim Report Q3 2017
Organic Sales By Region Consu Consumer mer Tissue Tissue +6.9% Q3 2017 vs Q3 2016 +0.7% ▪ -3.6% Organic sales increased 0.7% ─ Volume +1.4% ─ Price/mix -0.7% Total Mature Emerging ▪ Mature markets Markets Markets % of Consumer ─ Western Europe Tissue Net Sales: 57% 43% ─ Lower sales due to lower prices and lower volumes ▪ Emerging markets ─ Asia +11% ─ Latin America +2% ─ Russia +2% 13 October 26, 2017 Interim Report Q3 2017
Pr Prof ofessional Hyg essional Hygiene iene Adjusted EBITA 1) Adjusted EBITA Margin 1) Net Sales 15.8% SEK 6,725m 15.4% SEK 1,060mSEK 1,023m SEK 6,635m -40bp Q3 2017 vs Q3 2016 -1.4% -3% ▪ Net sales decreased 1.4% ▪ Organic sales increased 1.2% Q3 2016 Q3 2017 Q3 2016 Q3 2017 Q3 2016 Q3 2017 ▪ Adjusted EBITA 1) decreased 3% ─ Higher raw material costs mainly due to higher recovered paper and pulp prices ─ Lower volumes ─ Better price/mix ─ Cost savings ▪ Adjusted EBITA margin 1) 15.4% ▪ Adjusted ROCE 1) 20.7% 1) Excluding items affecting comparability 14 October 26, 2017 Interim Report Q3 2017
Organic Sales By Region Pr Prof ofessional Hyg essional Hygiene iene Q3 2017 vs Q3 2016 +13.2% ▪ Organic sales increased 1.2% +1.2% -1.1% ─ Volume -0.4% ─ Price/mix +1.6% Total Mature Emerging Markets Markets ▪ Mature markets % of Professional Hygiene Net Sales: 82% 18% ─ Flat sales in Western Europe ─ Lower sales in North America due to lower volumes ─ Positive price/mix in North America and Western Europe ▪ Emerging markets ─ Asia +25% ─ Latin America +12% ─ Russia +1% 15 October 26, 2017 Interim Report Q3 2017
Fredrik Rystedt, edrik Rystedt, Ex Executiv ecutive V e Vice ice Pr President and C esident and CFO FO October 26, 2017 16 Interim Report Q3 2017
Net Net Sales Sales Q3 2017 vs Q3 2016 +7.7% +8.2% -2.3% SEK 27,178m Organic Sales +1.8% +2.2% SEK 25,235 m -0.4% Net Sales Price/Mix Volume Acquisition Currency Net Sales Q3 2016 Q3 2017 17 October 26, 2017 Interim Report Q3 2017
Adjust Adjusted ed EBIT EBITA 1) 1) Q3 2017 vs Q3 2016 +10% Organic Adjusted EBITA -1% SEK +397m SEK -51m SEK 3,432m SEK -115mSEK +159m SEK -466m SEK 3,114m SEK +342 m SEK +16m SEK +36m Adjusted Price/Mix Volume Raw Energy Cost Other Acquisition Currency Adjusted EBITA Material Savings EBITA Q3 2016 Q3 2017 1) Excluding items affecting comparability 18 October 26, 2017 Interim Report Q3 2017
Raw Ma Raw Material terial De Development elopment Paper for Recycling 1) Market Pulp in USD, Europe Index 100 = January 2016 Index 100 = January 2016 150 150 125 125 100 100 75 75 50 50 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 SOP US SOP EU Fluff NBSK EUCA 1) Index based in local currencies 19 October 26, 2017 Interim Report Q3 2017
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