CEO’S COMMENTS
High sales growth and sharp earnings improvement
Essity performed well in the second quarter with continued high sales growth and higher
margins. We are following our plan to achieve our target of a return on capital employed
of above 17% by 2025. Essity has now completely exited the Russian market and the
ongoing strategic review of ownership in Vinda and Consumer Tissue Private Label
Europe is proceeding according to plan.
Increase in sales and higher earnings
During the second quarter, net sales increased 15.8% and sales growth, including organic sales growth and
acquisitions, amounted to 8.7%. Sales prices were higher and the product mix was better. The lower volumes are
mainly the result of our focus on margin improvement, resulting in us exiting certain volumes with unsatisfactory
profitability. Adjusted EBITA increased by 49% and the adjusted EBITA margin by 2.4 percentage points to 10.7%.
The margin was positively impacted by higher selling prices, a better mix and cost savings. Earnings per share
increased to SEK 3.53.
Essity has exited Russia
Since the start of Russia’s war against Ukraine, we have been fully focused on exiting Russia. Work commenced in
April 2022 and this has now been completed.
Strategic review
During the quarter, a strategic review was initiated of our ownership in the Asian hygiene company Vinda and
Consumer Tissue Private Label Europe with the aim of reducing Consumer Tissue’s share of the company’s total
sales. The process is proceeding according to plan and various options are being explored that may result in
divestments, although no such decisions have yet been taken. Excluding these businesses, Essity’s organic sales
growth would have amounted to 8.0% and the adjusted EBITA margin to 12.5% during the second quarter of 2023.
Sustainable innovations for improved well-being
During the quarter, innovations were launched in all business areas that strengthen our customer and consumer
offering and reduce our environmental impact. Our two leading brands, Tork and Libresse, launched Tork Period
Care dispenser, which offers feminine care products in public restrooms. We are continuing to build on our globally
leading position in leakproof apparel and expanded our offering in Latin America with reusable pads under the
Saba and Nosotras brands. Our sustainability work was recognized when we were once again awarded a Platinum
medal by EcoVadis.
Progress toward our return target
The adjusted return on capital employed increased to 13.2%. We are working in a focused manner – through
innovation, value-generating customer offerings, strong brands, efficiency improvements and sustainable, profitable
growth – to achieve our target of an adjusted return on capital employed of above 17% by 2025.
Magnus Groth
President and CEO