Essity 1Q 2019 Results: Adjusted EBITA up 2 Percent from Year ago

Figures compared with the corresponding period a year ago:Figures compared with the corresponding period a year ago:• Net sales increased 9.4 percent to SEK 30,656m (28,020)

Organic net sales increased 4.3 percent
Organic net sales increased 5.1 percent, excluding the lower sales of mother reels due to production closures
In emerging markets, which accounted for 37 percent of net sales, organic net sales increased 9.1 percent
Operating profit before amortization of acquisition-related intangible assets (EBITA) increased 9 percent to SEK 3,002m (2,760)
Higher raw material and energy costs had a negative impact of SEK 1,017m on earnings
Profit for the period increased 12 percent to SEK 1,929m (1,726)
Earnings per share increased 20 percent to SEK 2.49 (2.08)

This is part of the transcript from Essity’s first quarter 2019 financial results conference call in late April with CEO Magnus Groth.

“We continue to see higher distribution costs in all parts of our business. We had some plant maintenance stop that took longer. It cost more than we had expected in the quarter. That's all managed now. We have stock reevaluation due to the lower raw material prices, some lower volumes produced in parts of the business that also affected negatively.

“The trade tariffs that we continue to see between Canada and the US, in spite of that there is now an agreement in some of the other tariffs, and higher A&P on Krona basis but on as a percentage of sales basis coming down, but since we growing so fast the overlaying piece is going up slightly. So that's some of the impacts affecting negatively in the quarter the other line.

“Raw material development looks slightly more positive than what we see now for a number of years. However, some words of caution here, because there are some delays, as you know, from when the prices move until we see them in our numbers.

“But actually for consumer tissue we continue to expect a significantly higher raw material cost in the second quarter compared to the first quarter, and this is not so much because of pulp price, which is actually coming down a little bit because of a very negative currency impact.”

Back to Tissue360 Newsletter