The Swedish multinational Essity released its financial results for the first half of 2023. According to the company, comparing the same period year on year, net sales increased by 20.2% to SEK 86,856 million. Sales growth, including organic sales growth and acquisitions, amounted to 12.8% of which volume accounted for -3.1%, price/mix for 14.6% and acquisitions for 1.3%.
Operating profit before amortization of acquisition-related intangible assets (EBITA) increased by 101% to SEK 8,660 million. Along those lines, adjusted EBITA increased 51% to SEK 9,059 million and adjusted EBITA margin increased 2.1 percentage points to 10.4%.
Profit for the period increased 139% to SEK 5,254 million, while cash flow from current operations totaled SEK 1,264 million. Return on capital employed increased to 10.8% and adjusted return on capital employed to 11.4%.
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.
According to Essity, the lower volumes in the quarter are mainly the result of the focus on margin improving, which results in the company exiting certain volumes with unsatisfactory profitability.
In this sense, the 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 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,” commented President and CEO Magnus Groth.
According to the company, it has now completely exited the Russian market and its ongoing strategic review of ownership in Vinda and Consumer Tissue Private Label Europe is proceeding according to plan.
“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”, added the executive.