Essity sign on office
While Covid-19 has had a negative effect on sales, Essity said that “profitability has developed positively”

Essity has reported net sales negatively impacted by the Covid-19 pandemic and related lockdowns in its year-end report but added that “profitability has developed positively”. 

Group net sales dropped 5.6% to SEK121,752m during January–December 2020 compared with the same period a year ago. 

Organic net sales declined 4.5% in mature markets and increased 2.6% in emerging markets. Adjusted EBITA increased 11% to SEK 17,626m.  

In the fourth quarter, group net sales declined 8.1% year-on-year to SEK 30,956m.  

Sales were negatively impacted by the Covid-19 pandemic and related lockdowns and restrictions, which mainly impacted its Professional Hygiene and Medical Solutions divisions. 

In the Consumer Tissue business, lower prices and higher promotional activity had a negative impact on the gross margin. 

Net sales for the sector in 2020 were up 0.6% year-on-year to of SEK50,221m, while organic net sales increased 4.1%.  

Volumes accounted for an increase of 5.7% and the price/mix a decrease of -1.6%.  

Organic net sales increased 1.7% in mature markets and in emerging markets and organic net sales increased by 6.9%. Adjusted EBITA increased 51% to SEK8,045m. 

In the fourth quarter of 2020 compared with a year ago, net sales for Consumer Tissue decreased 1.5% to SEK13,070m while organic net sales increased 5.6%. 

Volumes accounted for an increase of 9.1% and the price/mix a decrease of 3.5% as a result of lower prices and a better mix.  

While the pandemic and related lockdowns has had a negative effect on Essity’s sales, the company said that “profitability has developed positively”. 

In 2020, it achieved its highest adjusted EBITA and the highest adjusted EBITA margin ever.  

The company also increased its market shares in many markets as well as increasing its online sales to SEK15bn for the full year. Online accounted for 15% of net sales in the fourth quarter. 

It also accelerated its digital transformation and launched digital options, such as TENA SmartCare, as well as broadened its offering with face masks and expanded supply capacity for hand sanitiser. 

It added that it has “significantly strengthened” its balance sheet and financial position, which will “enable a higher rate of acquisitions”. 

“Vaccinations have started and market conditions are gradually improving. The increased awareness of hygiene and health is positive for Essity.”