Year ear-end end Repor eport 2019 2019
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 and sustainability report for a better understanding of these risks and uncertainties. 2 January 22, 2020 Year-end Report 2019
Summary Summar Organic ganic Adjus Adjusted ted Adjus Adjusted ted 2019 vs 2018 Net S et Sales ales Net S et Sales ales 1) EBI BITA 2) EBI BITA A Mar argin gin 2) 2) 2) ▪ Strong organic net sales growth and higher adjusted EBITA margin SEK SEK SEK SEK 12.3% 12.3% 128,975m 128,975m +4.5% +4.5% 15,840m 15,840m ▪ x% x% Higher volumes, higher prices, better mix +140bps +140bps +8.8 +8.8% +22% +22% and cost savings ▪ Lower raw material costs but negative impact from stock revaluation Oper perating ting Ear arnings nings Adjus Adjusted ted Adjusted Adjus ted Cas Cash h Flo low per S per Shar hare ROCE CE 2) ROE 2) ▪ Investments in growth increased sales and marketing costs SEK SEK SEK SEK ▪ EPS increased 17% 15,639m 15,639m 13.8% 13.8% 18.4% 18.4% 13.12 13.1 +58% +58% ▪ The Board of Directors proposes an increase of the dividend with 9% to SEK 6.25 1) Net sales which excludes exchange rate effects, acquisitions and divestments 2) Excluding items affecting comparability 3 January 22, 2020 Year-end Report 2019
Summar Summary 2019 2019 Strong growth and higher profitability ▪ Successful innovations strengthening market positions and brands ▪ Price increases and improved product mix ▪ Online sales increased to approx. SEK 13bn ▪ Cost savings of approx. SEK 1.1bn ▪ Our initiative “Cure or Kill” has increased profitability in several markets ▪ Strong performance in Latin America and Asia ▪ Improved cash flow and strengthened balance sheet ▪ Continued work to contribute to a sustainable and circular society 4 January 22, 2020 Year-end Report 2019
Summary Summar Organic ganic Adjusted Adjus ted Adjus Adjusted ted Q4 2019 vs Q4 2018 Net S et Sales ales Net S et Sales ales 1) EBI BITA 2) EBI BITA A Mar argin gin 2) 2) 2) ▪ Strong organic net sales growth and higher adjusted EBITA margin SEK SEK SEK SEK 14.1% 14.1% 33,686m 33,686m +3.6% +3.6% 4,742m 4,742m x% x% +300bps +300bps ▪ Higher volumes, higher prices, better mix and +8.3% +8.3 +37% +37% cost savings ▪ Lower raw material and energy costs but Oper perating ting Ear arnings nings Adjusted Adjus ted Adjus Adjusted ted negative impact from stock revaluation Cash Cas h Flo low per Shar per S hare ROCE CE 2) ROE 2) ▪ Investments for growth and incentive programs SEK SEK increased sales and marketing costs SE SEK K 4,753m 4,753m 16.4% 16.4% 19.9% 19.9% 3.87 3.87 +46% +46% 1) Net sales which excludes exchange rate effects, acquisitions and divestments 2) Excluding items affecting comparability 5 January 22, 2020 Year-end Report 2019
Increased Incr eased Sales Sales and and Pr Profita ofitability bility 7,00% 7000 16% Net Sales and Organic Net Sales Growth 1) Adjusted EBITA and EBITA margin 2) 39000 6500 15% 6,00% +5.9% 37000 6000 14.1% 14% 5,00% 5500 35000 13% +4.3% 33,686 12.8% 4,00% 12.6% 12.6% +3.9% 5000 4,742 12.2% +3.6% 12% +3.4% 33000 +3.3% 32,565 11.6% 32,068 4500 3,00% 11.3% 4,176 11.1% 11.1% 11% 31,112 +2.3% 30,656 31000 4000 3,732 2,00% 10.4% 3,619 10.2% +1.8% +1.8% 29,721 10% +1.6% 3,451 3,437 3,432 3500 3,349 28,664 3,190 29000 3,119 1,00% 28,155 29,647 3,016 28,020 9% 3000 27,178 27000 0,00% -0.1% 8% 2500 25000 2000 -1,00% 7% Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2017 2017 2017 2018 2018 2018 2018 2019 2019 2019 2019 2017 2017 2017 2018 2018 2018 2018 2019 2019 2019 2019 Net Sales, SEKm Organic Net Sales Growth, % Adjusted EBITA, SEKm Adjusted EBITA margin, % 1) Organic net sales which excludes exchange rate effects, acquisitions and divestments 2) Excluding items affecting comparability 6 January 22, 2020 Year-end Report 2019
Net Net Sales Sales Q4 2019 vs Q4 2018 +8.3% Organic Net Sales 1) +3.6% SEK 33,686m +5.0% +1.3% -0.3% +2.3% SEK 31,112m Net Sales Volume Price/Mix Divestment Currency Net Sales Q4 2018 Q4 2019 1) Net sales which excludes exchange rate effects, acquisitions and divestments 7 January 22, 2020 Year-end Report 2019
Adjust Adjusted ed EBIT EBITA 1) 1) Q4 2019 vs Q4 2018 +37% SEK +202m SEK -1,340m SEK +4m SEK +1,487m SEK +119m SEK +289m SEK 4,742m SEK +315m SEK +215m SEK 3,451m Organic Adjusted EBITA +29% 2) ▪ Higher sales and marketing costs ▪ Stock revaluation ▪ Higher distribution costs Adjusted Volume Price/Mix Raw Material Energy Cost Savings Cost-savings Other Currency Adjusted 1) 1) EBITA COGS Program EBITA Q4 2018 Q4 2019 1) Excluding items affecting comparability 2) Excluding items affecting comparability and currency translation effects 8 January 22, 2020 Year-end Report 2019
Raw Ma Raw Material terial De Development elopment Paper for Recycling 1) Market Pulp in USD, Europe 150 140 120 125 100 80 100 60 75 40 Fluff NBSK EUCA SOP US SOP EU Oil-based Raw Materials 2) Energy Prices 3) 150 210 185 125 160 135 100 110 85 75 60 Electricity, EUR Natural Gas, EUR Polypropylene, EUR Propylene, EUR Source: Fastmarkets RISI, Fastmarkets FOEX, VDP, Macrobond, Epexspot, ICIS Index 100 = July 2017 1) Sorted Office Paper. Index in local currencies. EU refers to Germany 2) Polypropylene major feedstock of non-woven material, Propylene major feedstock of SAP material 3) Electricity Germany. Natural Gas, TTF Index 9 January 22, 2020 Year-end Report 2019
Matur Ma ture e and Emer and Emerging Mar ging Markets ets Adjusted EBITA Margin 1) Development 14.2% 14.1% 13.4% 13.2% 12.3% 12.3% 12.3% 11.8% 10.9% 10.8% 10.2% 8.5% 8.3% 7.5% 6.5% 2015 2016 2017 2018 2019 Emerging Markets Mature Markets Group Emerging Markets: Share of Net Sales 36% 37% Share of adjusted EBITA 1) 22% 31% 1) Excluding items affecting comparability 10 January 22, 2020 Year-end Report 2019
COGS COGS Sa Savings vings ▪ Cost savings: ─ Full year 2019: SEK 456m ─ Q4 2019: SEK 4m ▪ Productivity improvements from ─ Tissue Roadmap ─ Operational efficiency improvements ─ Material rationalization ─ Sourcing savings ▪ Lower COGS savings in Q4 2019 mainly due to ─ Incentive programs and pensions ─ Distribution costs 11 January 22, 2020 Year-end Report 2019
Cost Cost-sa savings vings Pr Prog ogram am Closed with savings slightly above plan ▪ Achieved cost savings: SG&A as % of Sales ─ Full year 2019: SEK 637m ─ Q4 2019: SEK 202m ─ End of Q4 2019 annualized run-rate cost savings slightly above SEK 900m 17.4% 17.3% ▪ Headcount reduction of approx. 1,060 positions -10 bps ▪ Main impact in SG&A costs ▪ Total restructuring costs of SEK 539m 2018 2019 12 January 22, 2020 Year-end Report 2019
Impr Improving W ving Well ell-being T being Thr hrough Inno ough Innova vations tions Innovations 2019 13 January 22, 2020 Year-end Report 2019
Per ersonal Car sonal Care Adjusted EBITA 1) Adjusted EBITA Margin 1) Net Sales SEK 12,425m 14.1% 14.1% SEK 11,703m SEK 1,756m SEK 1,652m +6% Q4 2019 vs Q4 2018 +6% ▪ Organic net sales increased 2.5% ─ Volume +1.9% and price/mix +0.6% Q4 2018 Q4 2019 Q4 2018 Q4 2019 Q4 2018 Q4 2019 ▪ Higher volumes, higher prices, better mix and cost savings ▪ Lower raw material costs but negative impact from stock revaluation Organic Net Sales By Region By Product Segment ▪ Investments in growth and costs related to implementation of Medical Device Regulation increased sales and marketing costs +8.0% +6.9% ▪ Higher distribution costs +4.6% +2.5% +0.1% -3.4% -0.1% Total Mature Emerging Incontinence Medical Baby Feminine Markets Markets Products Solutions Care Care % of Personal Care Net Sales: 63% 37% 45% 19% 18% 18% 1) Excluding items affecting comparability 14 January 22, 2020 Year-end Report 2019
Consu Consumer mer Tissue Tissue Net Sales Adjusted EBITA 1) Adjusted EBITA Margin 1) SEK 1,767m 13.3% SEK 13,269m SEK 12,094m +110% Q4 2019 vs Q4 2018 +640 +10% bps SEK 840m 6.9% ▪ Organic net sales increased 4.9% ─ Volume +3.6% and price/mix +1.3% Q4 2018 Q4 2019 Q4 2018 Q4 2019 Q4 2018 Q4 2019 ▪ Higher volumes, better price/mix and cost savings ▪ Lower raw material and energy costs but negative impact from stock revaluation Organic Net Sales By Region ▪ Investments in growth increased sales and marketing costs +6.5% +4.9% +3.6% Total Mature Emerging Markets Markets % of Consumer Tissue Net Sales: 52% 48% 1) Excluding items affecting comparability 15 January 22, 2020 Year-end Report 2019
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