Essity has reported “high profitability and strong cash flow” in its Q1 results, as all three business areas increase their margins.
Net sales decreased year-on-year by 4.1% to SEK34,850m, while organic growth amounted to -4.0%.
EBITA increased 4% to SEK4,523m and operating cash flow increased 48% to SEK 4,253m.
The company also completed the divestment of all shares in the subsidiary Vinda.
Total operations profit for the period was SEK11,493m compared to SEK2,703m in the same period a year ago.
Magnus Groth, Essity President and Chief Executive, said: “Essity had a strong first quarter with all three business areas increasing their margins.
“Volume growth excluding restructuring was positive. Our focus as we move forward remains on growing volume and gaining market share with good profitability.
“During the quarter, we received the proceeds from the sale of shares in Vinda of approximately SEK19bn, which together with sustained high cash flow strengthened the balance sheet.”
He added that volume growth was “positive” for the quarter, except for the impact of restructuring measures implemented in Professional Hygiene and contracts exited in Incontinence Products Health Care.
“The pace of innovation is high, which provides us with a good foundation for growth moving forward and to gain market shares.
“Margins were higher for all business areas. We have had a good price discipline despite lower costs for raw materials and energy compared with one year ago. The gap between our sales prices and costs has thus increased.”
Following the divestment of Essity’s shares in Vinda, the transaction entailed a profit from divestment of approximately SEK9bn.
“We also continued to generate strong cash flow in operations, providing us with a good financial position. Essity is in better shape than ever,” Groth added.
