Interim Report Q2 2017
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2 July 18, 2017
Interim Report Q2 2017
Magnus Groth, President and CEO
3 July 18, 2017
Interim Report Q2 2017
Summary Q2 2017 ▪ Essity listed on Nasdaq Stockholm on June 15, 2017 ▪ Acquisition of BSN medical completed ─ Excellent strategic fit supporting our vision ─ Combining hygiene and health for improved well-being ▪ Closure of Professional Hygiene production plant in North America ▪ 18 innovations launched in all categories ─ Brands such as Jobst, Libero, Libresse, Lotus, Nana, Tempo, TENA and Tork
4 July 18, 2017
Interim Report Q2 2017
Financial Summary Q2 2017 vs Q2 2016 Net Sales
Adjusted EBITA2)
Adjusted EBITA Margin2)
SEK 28,155m +12.7%
SEK 3,437m +17%
12.2% +40bp
Organic Sales1)
Organic Adjusted EBITA
Operating Cash Flow
-0.1% x%
0%3)
SEK 2,412m -20%
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 July 18, 2017
Interim Report Q2 2017
Financial Summary Q2 2017 vs Q2 2016
1) 2)
Adjusted ROCE1)
EPS
Adjusted EPS2)
13.7% SEK x
SEK 2.39
SEK 3.06x
Adjusted Return on Capital Employed calculated on annualized Q2 2017 Adjusted EBITA (excluding items affecting comparability) / Capital Employed as per June 30, 2017 Excluding items affecting comparability and amortization of acquisition related intangible assets
6 July 18, 2017
Interim Report Q2 2017
SEK
Innovations Q2 2017 ▪ 18 innovations launched in all categories ─ Brands such as Jobst, Libero, Libresse, Lotus, Nana, TENA, Lotus, Tempo and Tork
7 July 18, 2017
Interim Report Q2 2017
Personal Care
Net Sales
Adjusted EBITA1)
14.9%
SEK 10,851m
Q2 2017 vs Q2 2016
SEK 8,427m
Adjusted EBITA Margin1)
SEK 1,614m
+28.8% SEK 1,073m
12.7%
+220bp
Q2 2016
Q2 2017
+50%
▪ Net sales increased 28.8% ▪ Organic sales decreased 0.1% ▪ Adjusted ─ ─ ─ ─ ─ ─ ─
Q2 2016
EBITA1)
increased 50%
Acquisition of BSN medical Higher volumes Cost savings Improved profitability in Incontinence Products in North America Positive effect from exiting Baby Care in Mexico and hygiene business in India Higher raw material costs Investments in increased marketing activities
▪ Adjusted EBITA margin1) 14.9% ▪ Adjusted ROCE2) 24.2%
1) Excluding items affecting comparability 2) Adjusted Return on Capital Employed (Adjusted EBITA / Capital Employed) excluding items affecting comparability
8 July 18, 2017
Interim Report Q2 2017
Q2 2017
Q2 2016
Q2 2017
Organic Sales
Personal Care
By Region
By Product Segment
Q2 2017 vs Q2 2016 ▪ Organic sales decreased 0.1% ─ ─ ─
-0.1%
Price/mix -0.5% Volume +0.4% Negative impact of ~1% related to closures of Baby Care Mexico and hygiene business in India
Total
▪ Mature markets ─
Western Europe ─ Good growth for Baby Care and higher sales for Feminine Care ─ Flat sales for Incontinence Products ─
─
% of Personal Care Net Sales:
Good growth in Retail but lower sales in Health Care
North America ─ Higher sales in Incontinence Products
▪ Emerging markets ─
─ ─
Latin America 0% ─ Good growth for Incontinence Products and Feminine Care ─ Lower sales in Baby Care mainly due to exiting Baby Care in Mexico Russia -19% Asia -5%
1) Not included in Personal Care’s organic sales for Q2 2017
9 July 18, 2017
Interim Report Q2 2017
+1.1%
-1.8%
Mature Markets
Emerging Markets
63%
37%
+1.4%
+2.0% -4.8%
Incontinence Baby Products Care
42%
22%
-0.7%1)
Feminine Medical Care Solutions
16%
20%
Medical Solutions BSN medical acquisition ▪ BSN medical consolidated from Q2 2017 ─
Included in Personal Care under category Medical Solutions
▪ Successful start of integration ─
Organizational changes implemented
─
Joint strategy for combined business unit delivered
▪ Q2 2017 organic sales1) decreased 0.7% ─
Negative impact from lower number of invoicing days
▪ Adjusted EBITA margin2) 17.1%
Q2 2017
SEKm
Net sales
2,096 -0.7%
─
Integration cost impact -1.5%
─
Venezuela business impact -1.0%
Organic sales1) vs Q2 2016
─
Negative impact from lower absorption of fixed cost due to lower sales
Adjusted EBITA2) Adjusted EBITA margin2)
1) Sales which excludes exchange rate effects, acquisitions and divestments. Not included in Essity’s reported organic sales for Q2 2017. 2) Excluding items affecting comparability
10 July 18, 2017
Interim Report Q2 2017
359 17.1%
Consumer Tissue Q2 2017 vs Q2 2016
Net Sales
Adjusted EBITA1)
SEK 10,449m SEK 10,043m +4.1%
10.7% SEK 1,072m
Q2 2016
▪ Adjusted EBITA1) decreased 6% ─
Higher raw material and energy costs
─
Higher volumes
─
Cost savings
▪ Adjusted EBITA margin1) 9.7%
▪ Adjusted ROCE2) 9.8%
1) Excluding items affecting comparability 2) Adjusted Return on Capital Employed (Adjusted EBITA / Capital Employed) excluding items affecting comparability
11 July 18, 2017
9.7% -100bp
SEK 1,010m -6%
▪ Net sales increased 4.1% ▪ Organic sales increased 0.1%
Adjusted EBITA Margin1)
Interim Report Q2 2017
Q2 2017
Q2 2016
Q2 2017
Q2 2016
Q2 2017
Organic Sales By Region
Consumer Tissue
+3.8%
Q2 2017 vs Q2 2016 +0.1%
-2.5%
Total
Mature Markets
Emerging Markets
56%
44%
▪ Organic sales increased 0.1% ─ ─
Price/mix +0.1% Volume 0.0%
▪ Mature markets ─
% of Consumer Tissue Net Sales:
Western Europe ─ Lower sales due to lower prices and lower sales of mother reels
▪ Emerging markets ─ ─ ─
Asia +5% Latin America +3% Russia +8%
12 July 18, 2017
Interim Report Q2 2017
Professional Hygiene Q2 2017 vs Q2 2016
Net Sales
Adjusted EBITA1)
SEK 6,866m SEK 6,471m +6.1%
SEK 940m SEK 917m
Adjusted EBITA Margin1) 14.5%
13.4%
-110bp
-2%
▪ Net sales increased 6.1% ▪ Organic sales increased 0.8%
Q2 2016
▪ Adjusted EBITA1) decreased 2% ─
Higher raw material costs mainly due to significantly higher recovered paper prices
─
Lower volumes
─
Higher energy costs
─
Better price/mix
─
Cost savings
▪ Adjusted EBITA margin1) 13.4%
▪ Adjusted ROCE2) 17.8%
1) Excluding items affecting comparability 2) Adjusted Return on Capital Employed (Adjusted EBITA / Capital Employed) excluding items affecting comparability
13 July 18, 2017
Interim Report Q2 2017
Q2 2017
Q2 2016
Q2 2017
Q2 2016
Q2 2017
Organic Sales By Region
Professional Hygiene
+15.7%
Q2 2017 vs Q2 2016 ▪ Organic sales increased 0.8% ─ ─
▪ Mature markets ─ ─
+0.8%
Price/mix +2.6% Volume -1.8%
Lower sales in Western Europe and North America due to lower volumes Positive price/mix in both regions
Total % of Professional Hygiene Net Sales:
▪ Emerging markets ─ ─ ─
Asia +28% Latin America +12% Russia +10%
14 July 18, 2017
Interim Report Q2 2017
-1.8% Mature Markets
Emerging Markets
83%
17%
Fredrik Rystedt, Executive Vice President and CFO
15 July 18, 2017
Interim Report Q2 2017
Net Sales Q2 2017 vs Q2 2016 +12.7%
Organic Sales -0.1%
16 July 18, 2017
SEK 24,983m
+0.5%
-0.6%
Net Sales Q2 2016
Price/Mix
Volume
+4.4%
SEK 28,155m
Currency
Net Sales Q2 2017
+8.4%
Acquisition
Interim Report Q2 2017
Adjusted EBITA1) Q2 2017 vs Q2 2016 +17% Organic Adjusted EBITA 0% SEK +359m SEK 2,939m
SEK +141m
SEK +32m
SEK +135m SEK 3,437m
SEK -441m SEK +319m
SEK +24m
Cost Savings
Other
SEK -71m
Adjusted EBITA Q2 2016
Price/Mix
Volume
Raw Material
Energy
1) Excluding items affecting comparability
17 July 18, 2017
Interim Report Q2 2017
Acquisition
Currency
Adjusted EBITA Q2 2017
SOP US 1)
SOP EU
Interim Report Q2 2017
NBSK
EUCA
Jun-17
May-17
Apr-17
Mar-17
Jan-17
Dec-16
Nov-16
Oct-16
Sep-16
Aug-16
Jul-16
Jun-16 Fluff
Index based in local currencies
18 July 18, 2017
May-16
Jun-17
May-17
Apr-17
Mar-17
Feb-17
Jan-17
Dec-16
Nov-16
Oct-16
50
Sep-16
50
Aug-16
75
Jul-16
75
Jun-16
100
May-16
100
Apr-16
125
Mar-16
125
Feb-16
150
Jan-16
150
Apr-16
Index 100 = January 2016
Mar-16
Index 100 = January 2016
Feb-16
Market Pulp – Europe
Jan-16
Recovered Paper1)
Feb-17
Raw Material Development
Cash Flow Q2 2017 vs Q2 2016 Q2 2017 SEKm
Q2 2016 SEKm
4,686
4,114
Change in working capital
-873
-76
Restructuring costs and other operating cash flow
-358
-173
-1,517
-1,291
1,938
2,574
Operating cash surplus
Capital expenditures (including strategic)
Operating cash flow including strategic capital expenditures
19 July 18, 2017
Interim Report Q2 2017
Items Affecting Comparability Q2 2017 Q2 2017 SEKm
Costs related to the split of the SCA Group into two listed companies
20 July 18, 2017
-40
Restructuring costs related to closure of Professional Hygiene plant in the US
-255
BSN medical, including integration and transaction costs and revaluation effects pertaining to inventory valuation in connection acquisition balance
-290
Other
+109
Total items affecting comparability
-476
Interim Report Q2 2017
Magnus Groth, President and CEO
21 July 18, 2017
Interim Report Q2 2017
Summary Q2 2017 ▪ Essity listed on Nasdaq Stockholm on June 15, 2017 ▪ Acquisition of BSN medical completed ─ Excellent strategic fit supporting our vision ─ Combining hygiene and health for improved well-being ▪ Closure of Professional Hygiene production plant in North America ▪ 18 innovations launched in all categories ─ Brands such as Jobst, Libero, Libresse, Lotus, Nana, Tempo, TENA and Tork
22 July 18, 2017
Interim Report Q2 2017
Q&A
