Essity: Results 3Q 2019

Essity CEO Magnus Groth addressed the company’s third quarter results. “So, a very positive development and this comes from both price/mix and volume, as I mentioned, and all business contributing. We had a slight negative impact outside of the organic net sales from the divestment of a joint venture in Turkey that we had communicated earlier, and that's part of our Cure or Kill program. We had a very positive impact or contribution from the weakening of the Swedish krona of 4.3 percent adding up to a total net sales increase of 9.8 percent.

“Moving on to the adjusted EBITA, again a very positive development and contributions from price/mix, volumes and for the first time, again since Essity was split out from SCA, a good contribution from raw materials. However, this is a mixed picture the SEK409 million you see there is primarily benefiting Consumer Tissue with SEK344 million, Professional Hygiene with SEK170 million, while we still have a negative raw material impact on Personal Care of SEK105 million. And most of this negative impact on Personal Care and actually, overall is a big negative currency impact on raw material costs from the strong US dollar of close to $200 million. Energy was also positive.

“In Consumer Tissue, we expect significantly lower raw material costs in quarter four over last year and lower costs sequentially. While for Professional Hygiene, it looks slightly different with significantly lower costs for raw materials in the fourth quarter compared to last year while we expect the cost to be stable sequentially for Professional Hygiene. And when it comes to energy finally, we expect energy cost to be stable compared to the same quarter last year, but higher sequentially due to seasonal impacts.”

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