Essity Ab Class A · OMXSTO:ESSITY_A
Essity Ab Class A — Investor Day (2024)
166 slides from Essity Ab Class A's investor day presentation, 2024
Slide 1: Accelerating Profitable Growth CMD 2024
Accelerating Profitable Growth CMD 2024 1 ESSITY INTERNAL
Slide 2: Agenda – Essity Capital Markets Day in Valls, Spain
AGENDA – Essity Capital Markets Day in Valls, Spain Essity Group – Accelerating profitable growth Accelerating Magnus Groth, Sahil Tesfu, Fredrik Rystedt Profitable Global Supply Chain – Driving margin expansion Growth Donato Giorgio, Miriam Guasch, Ilham Smaali Site visit Health & Medical - Grow to
Slide 3: Forward-looking statements
Forward-looking statements Certain statements in this presentation includes forward-looking statements, including statements reflecting management’s current views relating to the growth of the market, future market conditions, future events, financial conditions, and expected operational performance
Slide 4: Slide 4
Slide 5: Strong platform for accelerating profitable growth
Strong platform for accelerating profitable growth Magnus Groth President and CEO
Slide 6: Essity – A leading hygiene and health company
Essity – A leading hygiene and health company 147 Net sales 2023 SEKbn 150 Sales in countries 36,000 employees 72 Production facilities
Slide 7: Three attractive business areas
Three attractive business areas Health & Medical Consumer Goods Professional Hygiene Holistic health and Personal and home Hygiene management medical solutions hygiene for all stages solutions for a broad along the continuum of care 20% of net sales of life Accelerate high-margin 54% of net sales se
Slide 8: Leading with strong brands where we compete
Leading with strong brands where we compete #1 or #2 #1 90% 60% of branded sales of branded sales Source: The information has been compiled by Essity for presentation purposes based on external market sources and internal estimates covering categories and markets where Essity is present (some catego
Slide 9: Strong financial development
Strong financial development Sales EBITA excl. IAC +82% +115% 18.9 147.1 SEKbn 131.3 14.7 109.6 13.9 102.0 102.2 101.5 12.3 94.5 11.8 11.5 12.0 88.0 88.0 10.9 81.0 9.8 8.8 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Note: 2014-2020 excl. Vinda’
Slide 10: High EPS growth
High EPS growth CAGR +7.2% 2017-2023 SEK 16.9 per share SEK 11.2 per share +51% 20171 2023 EPS development excl. IAC 1 Adjusted for US Tax reform 2017
Slide 11: We have done the hard work
We have done the hard work Simplified Value creating organization & Innovated for Delivered on acquisitions, strengthened superiority sustainability divestments capabilities Restructuring, Supply chain Built leading cure or kill optimization brands
Slide 12: In better shape than ever
In better shape than ever More Strong Attractive Pricing Lower efficient financial portfolio power volatility production position
Slide 13: Accelerating profitable growth and reaching financial targets
Accelerating profitable growth and reaching financial targets Annual Organic EBITA Margin Sales Growth >3% excl. IAC >15%
Slide 14: Increased distribution to shareholders
Increased distribution to shareholders Dividend Share buyback program +35% SEK 7.75 SEK 3bn SEK 5.75 • Essity B share buyback program of SEK 3bn • From June 17, 2024 and extends until AGM 2025 2018 2023 Dividend policy: Long-term stable Ambition to use as a recurring part of and rising Essity’s capi
Slide 15: Be the undisputed global leader in hygiene and health
Essity’s vision Be the undisputed global leader in hygiene and health
Slide 16: We are committed to profitable growth
We are committed to profitable growth • Gearing towards growing markets / categories • Focusing on opportunities with high-margin potential • Competing where we have the right to win • Earning the right to grow • Committing to invest to support ambitions • Capturing efficiency gains across the value
Slide 17: Executive Management Team
Executive Management Team Group Functions Magnus Groth President & CEO Fredrik Rystedt Sahil Tesfu Jessica Alm Mikael Schmidt Anna Sävinger Åslund CFO and EVP, Head of Chief Strategy Officer, Chief Communication Chief Group Function Chief HR Officer, Group Function Finance Group Function Officer, Gr
Slide 18: Clear path to accelerating profitable growth
Clear path to accelerating profitable growth Sahil Tesfu Chief Strategy Officer
Slide 19: Essity’s global market growth exposure
Essity’s global market growth exposure North America Europe Asia 2-3% 1-2% 3-4% Global Latin America Other 2-3% 2-3% 4-5% Health & Medical 3-4% Consumer Goods 2-3% Professional Hygiene 2-3% Note: “Essity present” market growth rates expressed as compound annual growth rate 2023-2029 Source: The info
Slide 20: Favorable trends driving market growth
Favorable trends driving market growth Rising levels Aging Rise of Spread of Evolving of disposable global chronic infectious well-being incomes population conditions diseases awareness
Slide 21: Growth Pillars
>3% Annual Organic Sales Growth Nurture the CORE >2% Expand for MORE >1% Growth Pillars Continue to EXPLORE
Slide 22: Health & Medical
Health Health & & Medical Medical Nurture Nurturethe Expandfor for the Expand CORE CORE MORE MORE >6% Organic sales growth >3% >3% >3% >3% >4% Incontinence Wound Com- Ortho- Geographic Total Products Care pression pedics expansion Health & Medical Logo too big – please change in Slide Master
Slide 23: Consumer Goods
Consumer Goods Nurture the Expand for CORE MORE >16% >14% Organic >11% sales growth >6% >3% >3% >2% >1% Incontinence Feminine Baby Consumer Absorbent Inco Inco Total Products Care Care Tissue Apparel US Men Consumer Goods
Slide 24: Professional Hygiene
Professional Hygiene Nurture the Expand for CORE MORE >8% >8% Organic >6% sales growth >4% >2% 0% Strategic Base Wiping & Soap & Geographic Total systems systems Cleaning1 Sanitizer expansion Professional Hygiene 1 Non-woven products
Slide 25: Accelerating profitable growth – Key building blocks
Accelerating profitable growth – Key building blocks Nurture the Expand for CORE >2% MORE >1% >3% Professional Consumer Hygiene Health & Professional Goods Medical Hygiene Consumer Goods Health & Medical Sales Ambition Today
Slide 26: Strong track record of profitable growth
Strong track record of profitable growth Net sales CAGR TENA Sorbact & Incontinence Feminine Care Tork Pants Hydrofera Brazil Latin America PeakServe CAGR 1999-2023 CAGR 2021-2023 CAGR 2019-2023 CAGR 2019-2023 CAGR 2019-2023 17% 18% 26% 8% 51% Incontinence Advanced Incontinence Feminine Professional
Slide 27: Ready to accelerate our profitable growth agenda
Ready to accelerate our profitable growth agenda Growth mindset Robust strategies Strong growth platform >3% Annual organic sales growth
Slide 28: Maximizing shareholder value by accelerating profitable growth
Maximizing shareholder value by accelerating profitable growth Fredrik Rystedt CFO and Executive Vice President
Slide 29: An attractive business portfolio
An attractive business portfolio Health & Medical Professional Incontinence Hygiene Products Health 20% Care 12% 26% Medical Solutions 8% 9M 2024 Baby Care 5% Consumer Incontinence Tissue Products 31% Retail 8% Feminine Consumer Goods Care 10% 54%
Slide 30: Strong performance
Strong performance Net sales SEK 144bn SEK 119bn +22% 2018 9M 2024 12M rolling EBITA margin excl. IAC 14.3% 10.9% +340bps 2018 9M 2024
Slide 31: Strong performance
Strong performance ROCE excl. IAC 17.6% 12.0% +560bps 2018 9M 2024 Net Debt/EBITDA excl. IAC 3.0X 1.1X 2018 9M 2024
Slide 32: The value creation journey
The value creation journey 2018 Return Increase Star Value Growth Health Creator & Medical ROCE > Hurdle rate Prof. Hygiene ROCE = Consumer Hurdle rate Goods ROCE < Expand Margin Value Hurdle rate & Turnover Destroyer 3% Growth
Slide 33: The value creation journey
The value creation journey Health 2024 Return Increase Star Value Growth Prof. & Creator Hygiene Medical ROCE > Hurdle rate Consumer ROCE = Goods Hurdle rate ROCE < Expand Margin Value Hurdle rate & Turnover Destroyer 3% Growth
Slide 34: Increasing value creation through profitable growth
Increasing value creation through profitable growth Return Increase Star value growth creator ROCE > Hurdle rate Essity ROCE = 2018 Hurdle rate ROCE < Expand margin Value Hurdle rate & turnover destroyer 3% Growth
Slide 35: Increasing value creation through profitable growth
Increasing value creation through profitable growth Return Increase Star value growth creator ROCE > Hurdle rate Essity 2024 ROCE = Hurdle rate ROCE < Expand margin Value Hurdle rate & turnover destroyer 3% Growth
Slide 36: Mix, volume and savings driving improved gross profit
Mix, volume and savings driving improved gross profit Gross profit margin excl. IAC, % Mix and underlying volume net sales impact 2.9% 2.8% 40% 2.5% 2.6% 1.0% 30% -1.0% -1.3% 2018 2019 2020 2021 2022 2023 2024 9M COGS cost savings, SEKbn 20% 1.0 1.1 1.1 0.5 0.7 0.4 -1.0 10% 2018 2019 2020 2021 2022
Slide 37: Moving towards our targets
Moving towards our targets
Slide 38: Our financial targets optimize shareholder value
Our financial targets optimize shareholder value Annual Organic EBITA Margin Sales Growth >3% excl. IAC >15%
Slide 39: Accelerating profitable growth: path to target delivery
Accelerating profitable growth Path to target delivery EBITA margin excl. IAC target Operating Growth Mix product Efficiency leverage investments >15% & portfolio 14.3% >3% Annual Organic Sales Growth EBITA margin excl. IAC 9M 2024
Slide 40: Financial restrictions and policies
Financial restrictions and policies Maintain Long-term a solid stable and Capital Structure investment Dividend rising grade rating dividends Moving towards our targets
Slide 41: Capital structure policy
Capital structure policy Net debt Net Debt / EBITDA 70 5 SEKbn 62.9 4.5 3.0 60 Max net 53.7 4 debt / EBITDA 50 3.5 2.0 3 40 3.1 2.5 29.1 30 2 20 2.0 1.5 1.1 Normal 1 operation 10 1.1 0.5 0 0 2022 2023 9M 2024 Net debt, SEKbn Net debt / EBITDA excl. IAC
Slide 42: Strong development of cash flow
Strong development of cash flow 19.9 17.7 15.6 16.0 11.1 13.6 SEKbn 12.4 9.9 11.4 11.0 9.2 7.7 7.7 5.7 2018 2019 2020 2021 2022 2023 9M 2024 12M Rolling Free cash flow Operating cash flow
Slide 43: Investing for profitable growth
Investing for profitable growth Capital expenditure 3Y average CAPEX / operating assets % ~7.5 SEKbn 6.9 6.8 Incontinence Products Feminine Care 5.2%1 Medical Solutions 4.4% 4.6% Baby Care Professional Hygiene 2022 2023 2024E Consumer Tissue CAPEX CAPEX/net sales 1 Net sales 9M 2024 12 months rollin
Slide 44: Capital allocation toolbox
Capital allocation toolbox Free cash flow Dividend Share buybacks Deleverage M&A Stable and rising Recurring within Unless large Strategic and the boundaries of acquisition value creating operating cash flow after dividends
Slide 45: Future acquisitions
Future acquisitions Rationale M&A Priorities • Growth contribution Health & Medical Consumer Goods Professional Hygiene • Advanced wound care • Feminine Care • Soap & sanitizer • Add capabilities • Compression therapy • US presence • Wiping & cleaning • Portfolio shift • US presence • D&E presence
Slide 46: Long-term implication from targets and policies
Long-term implication from targets and policies Annual Organic Sales Growth >3% Above market Strong EBITA1 EBITA margin organic sales and EPS1 excl. IAC >15% growth growth Long-term stable Dividend and rising Recurring share buy back Maintain a solid Rising dividend within the Capital investment bou
Slide 47: Q&A
Q&A
Slide 48: Global Supply Chain - Driving margin expansion
Global Supply Chain - Driving margin expansion Donato Giorgio President Global Supply Chain
Slide 49: End-to-end Essity supply chain
End-to-end Essity supply chain Global procurement Warehousing Manufacturing Distribution 72 Production sites in 15,000 Deliveries per day 32,000 Suppliers >200 Loading-points globally 27 Countries 3,500 Full truck loads per days Supply chain Planning and Logistics Hub, distribution in 150 countries
Slide 50: Essity manufacturing footprint
Essity manufacturing footprint Professional Medical Hygiene Solutions Consumer Australasia Tissue Personal Contract Care Manufacturer
Slide 51: Supporting profitable growth
Supporting profitable growth People Customers Operations Sustainability • I Care and RESH • Voice of the customer • TPM • Sustainability • Employee experience • Supply planning • Supplier value creation • Logistic and distribution • Digitalization KPI KPI KPI KPI • Safety/TRI • Customer satisfaction
Slide 52: Safety first
Safety first Total Recordable Injuries per 1 000 000 working hours1 7.7 6.9 Integration of Familia and Asaleo -62% 9M 2024 4.7 vs 2019 4.2 3.2 2.9 1.8 0.9 2019 2020 2021 2022 2023 9M 2024 2025 2027 Ambition Ambition 1 (F+LTA+RWC+MTC)*1.000.000 / Total working hours
Slide 53: COGS efficiencies and savings
COGS efficiencies and savings Footprint Supplier value Material Energy Digitalization Distribution optimization creation rationalization savings & automation & logistics Estimated future annual COGS savings SEK 0.5-1bn
Slide 54: Global Supply Chain - Driving margin expansion
Global Supply Chain - Driving margin expansion Ilham Smaali Vice President Planning & Logistics
Slide 55: The end-to-end customer centric supply chain you can trust
The end-to-end customer centric supply chain you can trust Customer Demand Supply Transportation Procurement Manufacturing Warehousing Customer demand planning planning & distribution Sales & operational planning Digitalization & automation
Slide 56: Essity’s SBTs
Essity’s SBTs Essity’s emission targets1 validated by Science Based Targets initiative (SBTi) Near-term target 2030: Long-term target 2050 Scope 1 and 2 -35% Near-term target 2030: Scope 3 -35% Net zero Outcome 2023 Outcome 2022 Scope 1 and 2 Scope 3 1 All targets are relative to a 2016 baseline. Ne
Slide 57: Our approach to supply chain sustainability
Our approach to supply chain sustainability Short-term Mid-term Long-term • Energy efficiency • Adopt new technologies from • Disruptive breakthrough • Material optimization other industries innovation through R&D and • Renewable energy new technology • Alternative materials • Hydrogen/geothermal •
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Slide 59: Global Supply Chain - Driving margin expansion
Global Supply Chain - Driving margin expansion Miriam Guasch Operations Director Manufacturing Spain
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Slide 61: Special safety measures for today’s tour
Special safety measures for today’s tour Pedestrians must use sidewalks Attention to the truck and forklift and crosswalks. traffic. In case of interaction, stop and give them priority. Safety cap, hearing protection Always use the handrail when and reflective vest are go up or go down the stairs. m
Slide 62: Q&A Global Supply Chain
Q&A Global Supply Chain
Slide 63: Health & Medical
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Slide 64: Health & Medical – Grow to Scale
Health & Medical – Grow to Scale Ulrika Kolsrud President Health & Medical Holistic health and medical solutions 20% of Group net sales 9M 2024 along the continuum of care
Slide 65: A global multi-category business
A global multi-category business Net sales split 9M 2024 18% North America 6% Latin America 65% Europe 6% Asia 5% Other • • • 58% 20% 10% 12% Incontinence Compression Orthopedics Wound Care Products Health Care Therapy
Slide 66: Long-term performance
Long-term performance Net sales SEK 28bn SEK 22bn +28% 2019 9M 2024 12M rolling EBITA margin excl. IAC 19.6% 16.9% +270bps 2019 9M 2024
Slide 67: Good growth and higher margins 9M 2024
Good growth and higher margins 9M 2024 Organic sales growth EBITA excl. IAC Gross margin excl. IAC EBITA margin excl. IAC 3.3% SEK 45.2% 19.6% Excl. exits 4.2% 4,148m +550bps +560bps
Slide 68: Critical success factors
Critical success factors Pricing excellence combined with market shaping Continued focus on differentiated value propositions, incl. successful M&A Cost saving through technology and value engineering Simplified operating model, reducing operating expenses
Slide 69: Well positioned to accelerate profitable growth
Well positioned to accelerate profitable growth Market1: #1 #5 EUR ~17bn 3-4% #1 #3 1 Market size 2023 and market growth rates expressed as compound annual growth rate 2023-2029 Source: The information has been compiled by Essity for presentation purposes based on external market sources and inter
Slide 70: Current environment and trends
Current environment and trends • Aging population • High prevalence of chronic conditions • Funding constraints and customer consolidation • More home care and self-contribution • Higher sustainability demands
Slide 71: Well equipped to accelerate profitable growth
Well equipped to accelerate profitable growth Strong innovation capabilities Superior and holistic solutions providing health economic benefits Broad channel presence Unique set of capabilities combining consumer and medical expertise
Slide 72: Incontinence Health Care
Incontinence Health Care Lead and shape the market Leverage the superior TENA total care offer • Product superiority Market1: • Wide assortment EUR ~5bn • Digital solutions for care efficiency • Training & Tools for care givers 2-3% Ambition Essity #1 with Grow market share of above 25% market 1 M
Slide 73: Wound Care
Wound Care Take the lead Focus on competitive advantages, leveraging our unique solutions e.g. Market1: • Infection management/prevention • Skin integrity EUR ~6bn • Exudate management ~4% Ambition Essity #5 with Grow market share of above 7% market 1 Market size 2023 and market growth rates expre
Slide 74: Compression Therapy
Compression Therapy Strengthen #1 position Delight all stakeholders Market1: • Superior comfort for the Consumer • Best convenience for the Customer EUR ~2bn • Health economic benefits for the Payer 3-4% Ambition Essity #1 with Grow market share of above 14% market 1 Market size 2023 and market gr
Slide 75: Orthopedics
Orthopedics Strengthen position in fracture management and physiotherapy Build on market leadership in fracture management Market1: Focus on where we have the right to win EUR ~4bn • In the cast room • In the pharmacy, leveraging TENA’s position 3-4% • With our superior physiotherapy offer Ambitio
Slide 76: Proof points of strong profitable growth
Proof points of strong profitable growth Examples of sales growth 9M 2024 25% 0% MS Home Delivery UK: Sorbact / Hydrofera Blue: US Lymphology Braces & Support Pharmacy Poland 11% 20% / 12% 16% #2 in 3 years
Slide 77: Growth drivers to accelerate profitable growth
Growth drivers to accelerate profitable growth Expansion Commercial – geographies, Value creating Innovation channels, excellence acquisitions continuum of care 80
Slide 78: Commercial Excellence
Optimal Seamless go to market omnichannel experience Commercial Excellence World class Market commercial capabilities Text shaping
Slide 79: Ida Emus, VP Sales & Marketing Region UK, Ireland & South
Ida Emus VP Sales & Marketing Region UK, Ireland & South
Slide 80: Shaping the market
Shaping the market Getting paid for the value we create • Targeting the hidden costs of health care • Partnering with our customers for Value Based Procurement • Examples of market shaping successes – Integration in care routines within Incontinence and Wound Care – Multi-supplier tenders
Slide 81: Product innovation
JOBST® Cutimed® Confidence Sorbion Carbon+ Product innovation Leukoplast® Skin Sensitive Text TENA® PROskin
Slide 82: Anand Chandarana, VP Global Marketing & Innovation, Medical
Anand Chandarana, VP Global Marketing & Innovation, Medical
Slide 83: Sorbact technology
vzzsorbact: TECHNOLOGY & essity Capital Markets Day 2024
Slide 84: Accelerating profitable growth – Key building blocks
Accelerating profitable growth – Key building blocks Nurture the CORE Expand for MORE >3% >3% >4% >6% >3% >3% Sales Incontinence Wound Orthopedics Compression Geographic Ambition Today Products HC Care expansion
Slide 85: Growth drivers to accelerate profitable growth
Growth drivers to accelerate profitable growth Expansion Commercial – geographies, Value creating Innovation channels, excellence acquisitions continuum of care 88
Slide 86: Grow to scale – Priorities
Grow to scale – Priorities • Organic volume growth throughout the business • Value creating acquisitions to strengthen market presence • Margin expansion through operating leverage and efficiency improvements • Innovation for differentiation, cost position improvements and sustainability • Shape the
Slide 87: Health & Medical Q&A
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Slide 88: Global Brand, Innovation & Sustainability
Global Brand, Innovation & Sustainability - Fueling profitable growth Tuomas Yrjölä President - Global Brand, Innovation & Sustainability Meta Redstedt Global Master Brand & Communication Director
Slide 89: Every day our brands care for the hygiene and health of 1 billion people
Every day our brands care for the hygiene and health of 1 billion people across 150 countries
Slide 90: ~65 million people trusting Essity
~65 million people trusting Essity incontinence solutions for bladder leakage each year
Slide 91: ~200 million women+ using Essity
~200 million women+ using Essity period care products every year
Slide 92: ~100 billion times each year someone cleans or dries hands
~100 billion times each year someone cleans or dries hands using Essity tissue on the go 95
Slide 93: Barrier breaking innovations, courageous brand building
Barrier breaking innovations Courageous brand building Globally scaled, locally relevant 96
Slide 94: We innovate for profitable growth
We innovate for profitable growth Our principles Insights led – falling in love with the problem Superiority driven – noticeably better in-use New user focused – driving penetration Margin steered – driving mix improvements Sustainable – social & environmental Ownable – ensuring IP protection 97
Slide 95: We have stepped up our innovation capabilities
We have stepped up our innovation Stepping upcapabilities our Innovation Capabilities • Virtual Product Development • Rapid Prototyping • Rapid prototyping • External • VirtualCollaborators and product development Partnerships • Superior research excellence • Superior Research Excellence • Sustainab
Slide 96: Tork OptiServe
Tork OptiServe® Insight: 85% of facility managers use two or more types of toilet paper systems New Tork OptiServe® One Coreless solution - many efficiencies Superior user experience 3x more paper to reduce run outs More sustainable, no core! Ownable and patented Text290 guests served 92% less packa
Slide 97: Our innovations drive profitable growth
Our innovations drive profitable growth Superiority Innovation rate % net sales with consumer or 61% >50% % of net sales coming from new rolling 3 years products, B2C customer preference Margin accretive +25% Bigger launches +3pp Average gross profit of rolling 3 years Average launch sales size inno
Slide 98: Our innovations are sustainable
Our innovations are sustainable Innovation % that yielded social and/or environmental improvements 85% 86% 68% 59% 2021 2022 2023 9M 2024 101
Slide 99: Building leading brands
Building leading brands Our principles Distinctive – unique Consistent – across touchpoints & over time Visible – top of mind awareness Superior – better than other brands
Slide 100: Brand building example: Essity’s V-Zone brands
Brand building example: Essity’s V-Zone brands Distinctive Superior Consistent Visible
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Slide 102: Stepping up our brand building capabilities
Stepping up our brand building capabilities • Brand content at scale with AI and automation • Performance marketing at scale with AI and off-shoring • Marketing insights with AI (e.g., insights mix modelling, claims) • Leveraging 1P (first party) data to increase demand
Slide 103: Proud of our portfolio of leading brands
Proud of our portfolio of leading brands 90% of branded sales in No 1 & 2 positions EUR EUR EUR >2bn >1bn <0.5bn
Slide 104: Our brands keep getting stronger
Our brands keep getting stronger % of sales with leading brand equity 63% 63% 62% 57% 2017 2020 2023 9M 2024
Slide 105: Global incontinence market & TENA
Global incontinence market & TENA If Inco was a Market Branded country, it Size sales would be the EUR ~13bn ~91% 3rd biggest TENA TENA Global #1 / TENA Size Global 18% (MS) EUR ~2.5bn Presence ~99% 81 markets branded
Slide 106: Purpose: rewrite the story around continence challenges
Purpose: rewrite the story around continence challenges Positioning: a leading force for positive change Women Men Care giving relatives Professional decision makers
Slide 107: Pants: we have built the product category
PANTS: WE HAVE BUILT THE PRODUCT CATEGORY Net sales EUR >800m 17% Net sales CAGR 1999-2023 EUR 18m 1999 2004 2009 2014 2019 2023
Slide 108: TENA for Women – a new generation of underwear
TENA FOR WOMEN – A NEW GENERATION OF UNDERWEAR 8% Net sales CAGR 2019-2023
Slide 109: TENA Men: product superiority & strong activation
TENA MEN: PRODUCT SUPERIORITY & STRONG ACTIVATION 13% Net sales CAGR 2019-2023 112
Slide 110: Protective boxer
— PROTECTIVE BOXER WASHABLE AND REUSABI Le FOR DRIPS-& DRIBBLES YOUR BOXERS BUT BETTER
Slide 111: Caregiving relatives: a proven recipe for growth
CAREGIVING RELATIVES: A PROVEN RECIPE FOR GROWTH IN AN UNTAPPED SEGMENT ~5% Net sales CAGR 2019-2023 In 2035 2 out of 3 adults will be caregivers in some form
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115
Slide 113: Professional decision makers: a proven business model
PROFESSIONAL DECISION MAKERS: A PROVEN BUSINESS MODEL BRINGING VALUE TO CUSTOMERS ~4% Net sales CAGR 2019-2023 ”Value is about more than unit prices! It is about efficiency and maximising business’s time and resources to give the best possible care”. 116
Slide 114: We keep raising the bar
We keep raising the bar % Global sales with superiority (product, brand, price) 80% 59% 61% 56% 40% 2017 2020 2023 9M 2024 Ambition
Slide 115: Demonstrations of category innovations and Planning & Logistics Hub
Demonstrations of category innovations and the Global Planning & Logistics Hub In the canteen and office In the tent Health & Medical Consumer Goods Global Planning Professional & Logistics Hub Hygiene
Slide 116: Consumer Goods
Consumer A 00 DT OTOH SS 10! kin mecisoar 35555 BD OQ) CI JD rain BD SID OF ovine
Slide 117: Consumer Goods – Accelerate high-margin categories
Consumer Goods – Accelerate high-margin categories Volker Zöller President, Consumer Goods EMEA Andrés Gómez Hygiene management Personal and 54% of Group net sales President, Consumer Goods Americas solutions for a broad home hygiene 9M 2024 set of stages for all commercial of life applications
Slide 118: Leading positions in an attractive market
Leading positions in an attractive market Market1: #1 or #2 EUR ~33bn >90% 2-3% of branded sales 1 Market size 2023 and market growth rates expressed as compound annual growth rate 2023-2029. Source: The information has been compiled by Essity for presentation purposes based on external market sou
Slide 119: Leading positions with increasing market shares
Leading positions with increasing market shares % of branded sales #1 or #2 position Increasing shares Increasing or stable >90% 53% 71% Market share development Q3 2024 vs moving annual total (12 months rolling)
Slide 120: Global presence with strongholds in Europe and Latin America
Global presence with strongholds in Europe and Latin America Net sales split 9M 2024 4% North America 26% Latin America 66% Europe 1%Asia 3% Other 15% 18% 9% 58% Incontinence Feminine Care Baby Care Consumer Tissue Products Retail
Slide 121: Good volume development and higher margins 9M 2024
Good volume development and higher margins 9M 2024 Organic sales growth EBITA excl. IAC Gross margin excl. IAC EBITA margin excl. IAC SEK 29.3% 12.4% -1.1% 7,264m +240bps +40bps
Slide 122: Long-term performance
Long-term performance Net sales SEK 78bn SEK 76bn +3% 2019 9M 2024 12M rolling EBITA margin excl. IAC 12.4% +150bps 10.9% 2019 9M 2024
Slide 123: Critical success factors
Critical success factors • Consumer insights driven innovations • Speed to market and innovation frequency • Powerful and trusted brands • Superior go-to-market excellence incl. point of sales • Strong retailer relationships • Agile pricing power • Cost efficient end-to-end supply chain
Slide 124: Market environment requires agility
Market environment requires agility Pre-Covid: Quality & sustainability Covid: Availability & hygiene Inflation: Accessibility & affordability awareness Organizational agility and revenue management as relevant as ever
Slide 125: Demonstrated agility
Demonstrated agility • Shorter customer contracts • Net revenue management • Capability building • Input cost management 128
Slide 126: Feminine Care, Incontinence Products
Feminine Care Incontinence Products Intimate Hygiene Text
Slide 127: Incontinence Retail
Incontinence Retail Leading and shaping the category • Strengthen #1 position in Europe, Latin America and Canada • Drive trial and penetration with innovation, market entry points and brand building to break taboos and stigmas • Accelerate further in Tena MEN and the US Market1: Ambition: EUR ~5bn
Slide 128: TENA in Brazil
Incontinence TENA in Brazil Market share development Brazil1 32% 27% 24% 23% 21% 16% TENA Essity Competitor 1 Competitor 2 #1 in Brazil MS 32%1 1 Value share excl. inserts, August 2024 Source: Closeup
Slide 129: Feminine Care
Feminine Care Accelerating growth • Strengthen leadership in Latin America and grow in Europe while expanding in key growth segments. • Fuel success with: – Superior protection and comfort – Breaking taboos and stigmas Market1: Ambition: EUR ~7bn Grow 1-2% Europe Latin America above the #3 MS 10%
Slide 130: Feminine Care: #1 in Latin America
Feminine Care #1 in Latin America Market share development Mexico 60% 35% TENA 31% Saba Nosotras 25% 18% #1 #1 #1 18% in Brazil in Mexico in Colombia Essity Competitor 1 Competitor 2 MS 60% MS 60% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 1 Value share, Aug
Slide 131: Feminine Care: Fastest growing player in Europe
Feminine Care Fastest growing player in Europe • Extending assortment and formats in high value segments Nordics France • Winning with consumers and shoppers #1 #2 • Increasing availability in fastest growing retail channels • Creating value through net revenue management initiatives 6% Essity net s
Slide 132: Consumer Tissue
Consumer Tissue Driving margin expansion • Value creation over volume • Winning across pricing tiers, strengthen mid-tier offer • Trading up consumers • Leading with sustainability • Dual track strategy – strengthening own brands, winning with retailer brands Market1: Ambition Grow in EUR ~17bn Lati
Slide 133: Consumer Tissue – Winning in high margin segments
Consumer Tissue – Winning in high margin segments 7% 16% Market growth Essity growth CAGR 2019- CAGR 2019- 2023 2023 Source: Nielsen/IRI value CAGR 2019-23, Germany, Austria, Switzerland, Netherlands, France (Top 5 markets)
Slide 134: Consumer Tissue: Winning in high margin segments
Consumer Tissue Winning in high margin segments 100% 20% 5% Recycled Less CO2 Market share fibers footprint Familia Green BRT & HHT1 1 Bathroom tissue and household towels only Source: Nielsen (market growth and Essity sales growth) ESSITY INTERNAL
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Slide 136: Baby Care
Baby Care Winning with branded portfolio and leading retail brands • Winning at point of market entry • Winning with product superiority, tiering and differentiation • Driving loyalty across life stages through superior insights and loyalty EUROPE platform Market1: Ambition: GLOBAL EUR ~4bn Grow ~
Slide 137: Accelerating profitable growth – Key building blocks
Accelerating profitable growth – Key building blocks Nurture the CORE Expand for MORE >14% >11% >3% >16% >1% >3% >2% >6% Sales Incontinence Feminine Baby Consumer Absorbent Inco Inco Ambition Today Products Care Care Tissue Apparel US Men Retail
Slide 138: Accelerate high-margin categories – Priorities
Accelerate high-margin categories – Priorities • Strengthen leading positions in Europe and Latin America and grow in white spaces • Invest to grow in highest margin categories – Innovate for product superiority driving differentiation and cost competitiveness – Invest in brand building to win at po
Slide 139: Brands
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Slide 140: Professional Hygiene
Professional Hygiene $ ———— TORK Think ahead.
Slide 141: Professional Hygiene – Expand global leadership
Professional Hygiene – Expand global leadership Pablo Fuentes President, Professional Hygiene Matt Urmanski VP Sales & Marketing North America Hygiene management 26% of Group net sales solutions for a broad 9M 2024 set of commercial applications
Slide 142: Tork impacts our customers’ business
Tork impacts our customers’ business The busiest room in the building makes a real difference 44% 73% say a bad restaurant 44% avoid eating and 1 in 6 of office building people have left a complaints are about restroom experience drinking in a stadium job due to a poor will impact willingness to lim
Slide 143: A leading global business
A leading global business Net sales split 9M 2024 43% North America 8% Latin America 44% Europe 1% Asia 4%Other 86% 11% 3% Tissue, Services Wiping & Soap & & Solutions Cleaning Sanitizer
Slide 144: Adding value to customers around the world
Adding value to customers around the world Empire State Building Wembley Stadium Grupo Nutresa food processing sites Port Aventura World Recreation Park United Nations Headquarters New York, NY, USA London, UK Latin America Spain New York, NY, USA Allianz Arena Dubai International Airport Royal Pala
Slide 145: Professional Hygiene products
Professional Hygiene products Tissue, Wiping & Soap & Services & Solutions Cleaning Sanitizer
Slide 146: Shaping the market through customer knowledge and segment insights
Shaping the market through customer knowledge and segment insights HoReCa Commercial Industry Healthcare Hotels / Lodging Passenger Terminals, Retail Manufacturing, Transportation, Short- and long-term care institutions and Food services Offices and Recreation Food Processing, Other Ind. and Health
Slide 147: Current environment and trends
Current environment and trends • Increased demand in commercial and industry segments • Robust category growth in emerging markets • Sustainability growing in importance due to regulations and efficiency benefits • Acceleration of digital buying in B2B
Slide 148: Long-term performance
Long-term performance Net sales SEK 38bn SEK 31bn +23% 2019 9M 2024 12M rolling EBITA margin excl. IAC 17.8% 14.5% +330bps 2019 9M 2024
Slide 149: Strong underlying performance 9M 2024
Strong underlying performance 9M 2024 Organic sales growth EBITA excl. IAC Gross margin excl. IAC EBITA Margin excl. IAC -3.8% SEK Excl. 31.5% 17.8% restructuring 5,012m +320bps +180bps +2.1%
Slide 150: Critical success factors
Critical success factors Benefits from restructuring High growth in strategic systems and premium segments Pricing power and agility Omnichannel flexibility Profitable growth in emerging markets
Slide 151: Well positioned to shape the market and accelerate profitable growth
Well positioned to shape the market and accelerate profitable growth North America Europe #2 #1 Market1: EUR ~13bn Global Latin America #1 2-3% #1 Essity #1 with market share of 25% 1 Market size 2023 and market growth rates expressed as compound annual growth rate 2023-2029. Source: The informati
Slide 152: Accelerating profitable growth through strategic systems
Accelerating profitable growth through strategic systems CAGR Ambition Share of NS 60% >6% Grow 2X 2019 – 2023 market Text 9M 2024
Slide 153: Tork PeakServe and Xpressnap
Tork PeakServe Xpressnap® Powerful CORE Winning in the washroom Innovations Leading in food service CAGR >50% Text CAGR >4% 2019 – 2023 2019 – 2023
Slide 154: Soap & Sanitizer, Vision Cleaning, Wiper Systems
Soap & Tork Vision Sanitizer Cleaning Completing the bundle Leveraging data and technology to power growth Expanding in key segments for MORE Text Wiper Systems Unlocking growth in Industrial segment
Slide 155: Clear #1 in Europe
Clear #1 in Europe Winning with customers • Profitable business with further growth opportunities • Accelerate growth in strategic systems and adjacent EUROPE categories Market1: • Leverage cross-European scale EUR ~4bn • Differentiate with leading sustainability credentials and product superiority
Slide 156: #2 in North America
#2 in North America Improved profitability • Reduced cost through restructuring of manufacturing footprint NORTH AMERICA • Life cycle management on low value, non-strategic NORTH AMERICA Market Size 2023: product offering and customers Market : 1 EUR ~XBN • Stronger focus on sales of strategic portf
Slide 157: Strong growth of strategic systems in North America
Strong growth of strategic systems in North America Sales development of strategic systems 1,200 North America 1,000 +65% 800 600 400 200 0 2020 2021 2022 2023
Slide 158: Emerging markets
Emerging markets Accelerators for profitable growth • High market growth and low penetration • Expand and invest in Latin America and selected Example countries in MEIA to accelerate profitable growth Latin America • Successful model with Tork branded products and Market1: strategic systems EUR ~1bn
Slide 159: Sustainability focus areas distinguish Tork with customers
Sustainability focus areas distinguish Tork with customers Materials & packaging Use & waste Carbon Hygiene for all Responsible sourcing Reducing waste Lowering carbon Dedicated to raising impact hygiene standards For the planet For people
Slide 160: Omnichannel flexibility meets customers where they are
Omnichannel flexibility meets customers where they are Tork Sales on Amazon.com CAGR 63% 2019 2020 2021 2022 2023
Slide 161: Accelerating profitable growth – Key building blocks
Accelerating profitable growth – Key building blocks Nurture the CORE Expand for MORE >6% >2% >8% >8% >4% 0% 3.4% Sales Strategic Base Wiping & Soap & Geographic Ambition Today systems systems Cleaning1 Sanitizer expansion 1 Non-woven products
Slide 162: Expand global leadership – Priorities
Expand global leadership – Priorities • Strengthen global #1 position • Increase sales of strategic systems, wiping & cleaning and soap & sanitizer • Innovate for superior and sustainable Tork PeakServe photo solutions • Win with omnichannel • Accelerate profitable growth in emerging markets
Slide 163: Professional Hygiene Q&A
Professional Hygiene $ ———— TORK Think ahead.
Slide 164: Path to organic sales growth target >3%
Path to organic sales growth target >3% Nurture the Expand for CORE >2% MORE >1% >3% Professional Health & Consumer Hygiene Professional Goods Medical Hygiene Consumer Goods Health & Medical Sales Ambition Today 168
Slide 165: Path to EBITA margin excl. IAC target >15%
Path to EBITA margin excl. IAC target >15% EBITA margin excl. IAC target Operating Growth Mix product Efficiency leverage investments >15% & portfolio 14.3% EBITA margin excl. IAC 9M 2024
Slide 166: Every day our brands care for the hygiene and health of a billion people
amg | Y sae ff \ Every day our brands care for the hygiene and health of a billion people across 150 countries. 4 TORK [stan <