Essity president and chief executive Magnus Groth

Essity has announced sales growth of 4.5% year-on-year with organic sales up 3.3%.

In the period 1 January – 31 December 2021, net sales also increased 0.1% to SEK121,867m.

Market shares increased for 70% of branded sales in the retail trade; E-commerce sales increased organically by 15.9% to approximately 14% of net sales, corresponding to SEK17bn. 

Operating profit before EBITA decreased 20% to SEK14,051m while profit for the year was SEK9,810m.

Magnus Groth, President and Chief Executive, said: “Primarily within Professional Hygiene, sales were negatively impacted by the Covid-19 pandemic and the related lockdowns and restrictions.

“At the same time, our hygiene and health solutions are more important than ever, and we can see a rapid increase in sales when societies re-open and restrictions are lifted.”

He added that due to “significant cost inflation”, adjusted EBITA fell 22% to SEK13,680m: “Higher costs for raw materials, energy and distribution reduced the margin by 4.8%.
“Higher volumes, higher selling prices, a better mix and efficiency improvements had a positive impact on earnings.”

During the year, emerging markets accounted for 38% of net sales and organic sales growth was 8.8%.

Groth also announced that further price hikes will be implemented in 2022 to offset strong inflation costs: “We have taken strong actions to address the significant challenges in our operating environment.

“We implemented price increases in all business areas and further price increases will be implemented in 2022 to offset the strong cost inflation.”

Acquisitions completed during the year included Australian hygiene company Asaleo Care, Latin America’s hygiene company Familia, and in Medical Solutions the company presence acquired US-based Hydrofera, AquaCast Liner, sports tape brands Coach, Elastikon and Zonas.

Essity also finalised the acquisition of ABIGO Medical AB in advanced wound care.

Last week, the company announced it has acquired US professional wiping and cleaning company Legacy Converting for $40m.

The company produces sanitising and disinfecting wet-wipes, chemical-ready wipes and dry wipes.

Groth said: “During the year we launched innovations with a focus on greater well-being, sustainability and digitalisation, helping us to increase our market shares for approximately 70% of branded sales in the retail trade.”

Essity has also committed to achieving net zero emissions of greenhouse gases by 2050: “Between 2016 and 2021, we reduced our carbon emissions under Science Based Targets, Scope 1 and 2, by 15%,” he said.

“Through innovation, digitalisation, sustainability initiatives and efficiency improvements, we are increasing the company’s competitiveness.

“Our new target for sales growth of more than 5% includes both organic sales growth and acquisitions. We are prioritising to grow in the categories with the highest profitability.”