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, innovation, and portfolio optimization, including the divestment of Vinda.

• Strong cash flow generation, solid balance sheet, and successful share buyback program, with 1.1% of shares repurchased and 2.2 million shares held at year-end.

• Proposed dividend increase to SEK 8.25 per share, up 6.5% from previous year, continuing a trend of dividend growth.

• Innovations and product launches contributed to market share gains and higher gross margins, with new products averaging 3% higher gross margin than those replaced.

• CEO Magnus Groth announced his departure during 2025.

Financial highlights

• Net sales for 2024 reached SEK 145.5 billion, down 1.1% year-over-year due to Russia divestment and currency effects, but organic sales growth was up 1.8% (0.2% reported).

• EBITDA/EBITA exceeded SEK 20 billion with a 14% margin; return on capital employed (ROCE) improved to 17.6%.

• Earnings per share increased by 10% year-over-year to SEK 19.29 excl. IAC; full-year profit for the period more than doubled to SEK 21,048m, driven by the Vinda divestment.

• Dividend proposed at SEK 8.25, up 6.5% from previous year.

• Net debt/EBITDA improved to 1.16, with net debt just under SEK 31 billion.

Outlook and guidance

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

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

• A&P spending as a percentage of sales will increase, supporting profitable growth.

• Digital investments and related costs will remain elevated in 2025.

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