Essity - Interim Report Q3 2017

STOCKHOLM, Oct. 26, 2017 /PRNewswire/ --

JANUARY 1 – SEPTEMBER 30, 2017

(compared with the corresponding period a year ago)

• Net sales increased 8.2% to SEK 80,601m (74,466)
• Operating profit before amortization of acquisition-related intangible assets (EBITA) rose 31% to SEK 8,953m (6,831)
• Adjusted operating profit before amortization of acquisition-related intangible assets (EBITA) rose 11% to SEK 9,786m (8,797)
• Adjusted EBITA margin increased 0.3 percentage points to 12.1% (11.8)
• Adjusted profit before tax rose 5% to SEK 8,562m (8,119)
• Profit for the period increased 86% to SEK 5,719m (3,072)
• Earnings per share increased 86% to SEK 7.44 (4.01)[1]
• Adjusted earnings per share increased 32% to SEK 8.77 (6.66)[1]
• Cash flow from current operations declined 4% to SEK 6,055m (6,313)
• The acquisition of BSN medical, a leading medical solutions company, was consolidated as of April 3, 2017. Since the acquisition date, BSN medical has impacted consolidated net sales by SEK 4,162m and adjusted EBITA by SEK 756m.

[1] Indicative earnings per share on the assumption that the number of issued shares in Essity as of September 30, 2016 corresponded to the number of issued shares in Essity on September 30, 2017 (702.3 million).

SUMMARY OF THIRD QUARTER 2017 

The Group's net sales for the third quarter of 2017 increased 7.7% compared with the corresponding period a year ago. Organic sales increased by 1.8%, of which volume accounted for 2.2% and price/mix for -0.4%. In emerging markets, which represented 34% of net sales, organic sales rose by 6.8%, while in mature markets organic sales declined by 0.8%. Organic sales were negatively impacted by a lower market growth due to such factors as price pressure and as a consequence of Essity's decision to discontinue certain underperforming market positions and contracts as part of the company's focus on profitable growth for increased value creation. During the quarter, 13 innovations were launched that strengthened Essity's customer and consumer offering in all categories.

The Group's adjusted EBITA in the third quarter of 2017 increased by 10% compared with the corresponding period a year ago. Excluding currency translation effects and the acquisition of BSN medical, the adjusted EBITA declined by 1% compared with the corresponding period a year ago. The decline was mainly the result of higher raw material costs and lower prices. Higher volumes, cost savings and other measures to improve profitability had a positive impact on earnings.

The Group's adjusted EBITA margin increased 0.3 percentage points to 12.6%. The adjusted return on capital employed was 13.8%.

For the third quarter of 2017, the acquired company BSN medical's organic sales rose by 1.7%. The adjusted EBITA margin for the acquired company was 19.2% and was negatively impacted by approximately 0.4 percentage points as a result of integration costs.

INVITATION TO PRESS CONFERENCE ON Q3 2017 INTERIM REPORT

Media and analysts are invited to a press conference, where this interim report will be presented by Magnus Groth, President and CEO.

Time: 10:00 CET, Thursday, October 26, 2017
Location: Essity's headquarters, Waterfront Building, Klarabergsviadukten 63, Stockholm, Sweden

The presentation will be webcasted at www.essity.com . To participate, call: +44 (0)20 7162 0077, +1 646 851 2407 or +46 8 5052 0110. Specify "Essity" or conference ID no. 962907.

For further information, please contact:
Fredrik Rystedt,
CFO and Executive Vice President
+46 8 788 51 31

Johan Karlsson
Vice President Investor Relations
Group Function Communications
+46 8 788 51 30

Joséphine Edwall-Björklund
Senior Vice President
Group Function Communications
+46 8 788 52 34

Media Relations
Group Function Communications
+46 8 788 52 20

NB:
This information is such information that Essity Aktiebolag (publ) is obligated to make public pursuant to the EU Market Abuse Regulation. This report has been prepared in both Swedish and English versions. In case of variations in the content between the two versions, the Swedish version shall govern. The information was submitted for publication, through the agency of the contact person set out below, at 08:00 CET on October 26, 2017. This interim report has not been reviewed by the company's auditors.                      

Karl Stoltz, Media Relations Manager, +46 8 788 51 55

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SOURCE Essity