Essity (ESSITY) Q4 2024 earnings summary

Executive summary

• Achieved record sales of SEK 146 billion and highest profit ever in 2024, with strong volume growth in high-yielding segments and robust cash flow generation.

• Divested Vinda, resulting in a more attractive portfolio, significant capital gain, and net debt reduction.

• Announced new financial targets, initiated a share buyback program, and proposed a 6.5% dividend increase to SEK 8.25 per share.

• Innovations and product launches contributed to market share gains, higher gross margins, and sustainability progress.

• CEO Magnus Groth announced his resignation and will remain until a replacement is found, with departure set for 2025.

Financial highlights

• Net sales for 2024 reached SEK 145.5bn, down 1% year-over-year, with organic sales growth up 1.8% (excluding restructuring).

• EBITA excluding IAC was SEK 20.3bn, up 8% year-over-year; EBITA margin excl. IAC improved to 14.0%.

• Earnings per share increased by 10% year-over-year, reaching SEK 29.83 for total operations.

• Full-year profit for the period more than doubled to SEK 21,048m, driven by the Vinda divestment.

• Proposed dividend of SEK 8.25 per share, up 6.5% from previous year.

Outlook and guidance

• Focus for 2025 on accelerating profitable growth in high-yielding segments, expanding in North and Latin America, and driving innovation and operational efficiency.

• Continued progress on ESG, digitalization, and operational efficiencies remain key priorities.

• CapEx expected to be SEK 8–8.5 billion in 2025, mainly for capacity investments.

• A&P as a percentage of sales to increase moderately in 2025.

• Share buybacks to become a recurring part of capital allocation.