Essity (ESSITY) Q4 2024 earnings summary

Executive summary

• Achieved record sales of SEK 146 billion and highest-ever operating profit exceeding SEK 20 billion for 2024, driven by strong volume growth and robust cash flow generation.

• Divested Vinda, resulting in a more attractive portfolio, and introduced new financial targets and a recurring share buyback program.

• Innovations, efficiency improvements, 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 succession planned for 2025.

Financial highlights

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

• EBITA excluding IAC was SEK 20.3 billion, up 8% year-over-year, with a margin of 14.0%.

• Earnings per share excluding IAC was SEK 19.29, up 10% year-over-year; proposed dividend of SEK 8.25 per share, up 6.5%.

• Operating cash flow for the year was SEK 17.2 billion, with net debt reduced to just under SEK 31 billion.

• Return on capital employed improved to 17.6% for the 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 emphasis on ESG, digitalization, and sustainability progress.

• 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.