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Essity’s net sales increased 10.9 per cent in Q1 2018

Photo: Essity
Photo: Essity
Published by
Simon Matthis - 09 May 2018

Essity has published its financial report for the first quarter of 2018. The Group’s net sales for the first quarter of 2018 increased 10.9% compared with the corresponding period a year ago. Organic net sales increased 3.4%, of which volume accounted for 2.5% and price/mix for 0.9%. In emerging markets, which represented 35% of net sales, organic net sales rose 6.3%, while the increase in mature markets was 1.6%.

During the quarter, four innovations were launched that strengthened Essity’s customer and consumer offering. Within Tissue Roadmap, investments and further restructuring measures were decided to strengthen the product offering and increase efficiency in Consumer Tissue and Professional Hygiene.

The Group’s adjusted EBITA in the first quarter of 2018 increased 7% compared with the corresponding period a year ago. Excluding currency translation effects and acquisitions, adjusted EBITA declined 5%. Higher volumes, a better price/mix, cost savings of SEK 232m and the acquisition of BSN medical had a positive impact on earnings. Higher raw material costs had a negative impact of SEK 755m on earnings. The higher raw material costs during the quarter were partially offset by price increases mainly in Consumer Tissue in Asia and Professional Hygiene. Price increases were also carried out in Consumer Tissue in Europe during the quarter, which have yet to impact earnings. The Group’s adjusted EBITA margin decreased 0.4 percentage points to 11.1%. The adjusted return on capital employed was 11.9%.

Organic net sales for the acquired company BSN medical for the first quarter of 2018 were in line with the corresponding period in 2017. The adjusted EBITA margin for the acquired company was 17.5% and was negatively impacted by about 0.2 percentage points due to integration costs. The integration is proceeding according to plan and generating the expected synergies.

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