Interim Report First Quarter 2020 - Essity...10 April 23, 2020 Interim Report Q1 2020 SEK 13,080m SEK 12,248m SEK 2,092m SEK 1,069m Net Sales Adjusted EBITA1) Adjusted EBITA Margin1)

Interim ReportFirst Quarter 2020

April 23, 2020 Interim Report Q1 20202

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.

Q1 2020 vs Q1 2019

Summary

Interim Report Q1 20203 April 23, 2020

1) Net sales which excludes exchange rate effects, acquisitions and divestments2) Excluding items affecting comparability

▪ Strong increase in net sales and earnings

─ Partially a consequence of COVID-19

─ Sharp sales increase in March of 19.7%

─ Strong underlying business performance

▪ Higher volumes, better mix and cost savings

▪ Lower prices mainly in Consumer Tissue

▪ Lower raw material and energy costs

▪ Increased sales and marketing costs

Adjusted

EBITA Margin2)Net Sales

Adjusted

EBITA2)

Organic

Net Sales1)

x%

Adjusted

ROCE2)

Adjusted

ROE2)

Operating

Cash Flow

Earnings

per Share

SEK

33,712m

+10.0%

+7.8%

SEK

5,333m

+67%

15.8%

+540bps

18.4%

+710bps

SEK

4.61

+85%

SEK

4,481m

+108%

22.4%

+780bps

Increased Sales and Profitability

28,155

27,17828,664

28,02029,721

29,647

31,112

30,65632,068

32,565

33,686 33,712

-0.1%

+1.8% +1.8%

+3.4%

+2.3%

+1.6%

+3.3%

+4.3%+3.9%

+5.9%

+3.6%

7.8%

-2,00%

0,00%

2,00%

4,00%

6,00%

8,00%

10,00%

25000

27000

29000

31000

33000

35000

37000

39000

Q22017

Q32017

Q42017

Q12018

Q22018

Q32018

Q42018

Q12019

Q22019

Q32019

Q42019

Q12020

Net Sales, SEKm Organic Net Sales Growth, %

Interim Report Q1 2020April 23, 20204

3,437 3,432

3,619

3,119

3,349

3,016

3,451

3,190

3,732

4,176

4,742

5,333

12.2%

12.6% 12.6%

11.1%11.3%

10.2%

11.1%

10.4%

11.6%

12.8%

14.1%

15.8%

7%

8%

9%

10%

11%

12%

13%

14%

15%

16%

17%

2000

2500

3000

3500

4000

4500

5000

5500

6000

6500

7000

Q22017

Q32017

Q42017

Q12018

Q22018

Q32018

Q42018

Q12019

Q22019

Q32019

Q42019

Q12020

Adjusted EBITA, SEKm Adjusted EBITA margin, %

Adjusted EBITA and EBITA margin2)Net Sales and Organic Net Sales Growth1)

1) Organic net sales which excludes exchange rate effects, acquisitions and divestments2) Excluding items affecting comparability

Net Sales

Interim Report Q1 2020April 23, 20205

Q1 2020 vs Q1 2019

Net SalesQ1 2019

Volume Price/Mix Divestment Currency Net SalesQ1 2020

+5.9%

+2.5%+1.9%

+10.0%

Organic Net Sales1) +7.8%

SEK 30,656m

SEK 33,712m

1) Net sales which excludes exchange rate effects, acquisitions and divestments

-0.3%

Adjusted EBITA Margin1)

Q1 2020 vs Q1 2019

Interim Report Q1 2020April 23, 20206

1) Excluding items affecting comparability

▪ Impact from lower raw material

and energy costs +470 bps

▪COGS savings of SEK 260m

10.4%

15.8%+560 bps -30 bps +10 bps

Adjusted EBITA Margin

Q1 2019

Impact Gross

Profit Margin

A&P SG&A

(excl A&P)

Adjusted EBITA Margin

Q1 2020

+540 bps

Raw Material Development

Interim Report Q1 2020April 23, 20207

75

100

125

150

Polypropylene, EUR Propylene, EUR

75

100

125

150

Fluff NBSK EUCA

40

60

80

100

120

140

SOP US SOP EU

Source: Fastmarkets RISI, Fastmarkets FOEX, VDP, Macrobond, Epexspot, ICIS

Oil-based Raw Materials2)

Market Pulp in USD, Europe Paper for Recycling1)

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

50

75

100

125

150

175

200

Electricity, EUR Natural Gas, EUR

Energy Prices3)

InnovationsQ1 2020

April 23, 2020 Interim Report Q1 20208

Manufacturing

of surgical and

face masks for

health and

elderly care as

well as for our

employees

Personal Care

▪ Organic net sales increased 8.8%

─ Volume +6.9% and price/mix +1.9%

─ Partially impacted by COVID-19

─ Sharp sales increase in March of 17.0%

▪ Higher volumes, higher prices, better mix and cost savings

▪ Lower raw material costs

▪ Higher distribution costs

▪ Increased sales and marketing costs and MDR

▪ Acquisitions of ABIGO Medical and Novioscan

Q1 2020 vs Q1 2019

Interim Report Q1 2020April 23, 20209

SEK 12,669mSEK 11,535m

Q1 2019 Q1 2020

SEK 2,039m

SEK 1,540m

Net Sales Adjusted EBITA1) Adjusted EBITA Margin1)

+32%+9.8% 13.4%

16.1%

+8.8%

Total Mature

Markets

Incontinence

Products

By Region By Product Segment

Emerging

Markets

+7.5%

+11.8%

+5.6%

+15.5%

Baby

Care

Feminine

Care

% of Personal

Care Net Sales: 64% 36% 46% 17% 18%19%

-0.1%

+11.5%

Medical

Solutions

Organic Net Sales

1) Excluding items affecting comparability

Q1 2019 Q1 2020 Q1 2019 Q1 2020

+270

bps

Consumer Tissue

▪ Organic net sales increased 4.3%

─ Volume +3.7% and price/mix +0.6%

─ Partially impacted by COVID-19

─ Sharp sales increase in March of 19.5%

▪ Higher volumes, positive mix, cost savings but lower prices

▪ Lower raw material and energy costs

▪ Higher distribution costs

Q1 2020 vs Q1 2019

Interim Report Q1 2020April 23, 202010

SEK 13,080m

SEK 12,248m

SEK 2,092m

SEK 1,069m

Net Sales Adjusted EBITA1) Adjusted EBITA Margin1)

+6.8% +730

bps8.7%

16.0%

Q1 2019 Q1 2020

+4.3%

Total Mature

Markets

Organic Net Sales By Region

Emerging

Markets

+8.9%

% of Consumer

Tissue Net Sales: 57% 43%

-0.8%

+96%

1) Excluding items affecting comparability

Q1 2019 Q1 2020 Q1 2019 Q1 2020

Professional Hygiene

▪ Organic net sales increased 12.2%

─ Volume +7.9% and price/mix +4.3%

─ Partially impacted by COVID-19

─ Sharp sales increase in March of 24.5%

▪ Higher volumes, better mix, higher prices and cost savings

▪ Lower raw material and energy costs

▪ Higher distribution costs

▪ Increased sales and marketing costs

Q1 2020 vs Q1 2019

Interim Report Q1 2020April 23, 202011

Q1 2019 Q1 2020

SEK 7,957m

SEK 6,867m

Net Sales Adjusted EBITA1) Adjusted EBITA Margin1)

+88%+15.9%

+670

bps

17.5%

10.8%SEK 741m

SEK 1,393m

Q1 2019 Q1 2020

+3.0%

+15.2%

% of Professional

Hygiene Net Sales:

+0.8%

Total Mature

Markets

Emerging

Markets

82% 18%

Organic Net Sales By Region

1) Excluding items affecting comparability

Q1 2019 Q1 2020 Q1 2019 Q1 2020

+12.2%

COVID-19

Interim Report Q1 2020April 23, 202012

▪ Leading hygiene and health solutions

▪ Educational efforts on importance of hand hygiene

▪ Manufacturing of surgical and face masks in Sweden,

US and Mexico for health and elderly care as well as

for our employees

▪ Supporting NGOs, local initiatives and WHO Covid-

19 Solidarity Response Fund

▪ Positive feedback from customers appreciating our

support, service and delivery reliability

Secure

Business

Success

Contribute

to Society

Care for

Our People

SummaryQ1 2020

Interim Report Q1 2020April 23, 202013

▪ Strong increase in net sales and earnings

─ Partially a consequence of COVID-19. Sales in

future quarters will be adversely impacted

─ Strong underlying business performance

▪ Acquisitions of ABIGO Medical and Novioscan

▪ Increasing importance of hygiene and health