Essity, a global hygiene and health company whose brands include TENA, Tork, Cushelle, and Bodyform, has published its Q3 2024 Interim Report. Essity has a significant manufacturing and commercial presence across the UK and Republic of Ireland (ROI), including five manufacturing sites which employ around 1,400 people and four offices.
Q3 2024 saw Essity in the UK and ROI undertake, progress and complete several strategic moves to enhance operations and business performance.
During the quarter, Essity made a series of senior hires in the UK and ROI to help drive forward the next stage of the business’ journey. These include the appointment of new commercial directors for both the consumer goods and professional hygiene (out of home) areas of the business, aimed at driving profitable growth and commercial initiatives for Essity’s much-loved brands. In addition Essity appointed an experienced senior public affairs manager, who will set and drive forward the business’ public affairs and societal impact agenda.
Essity also began to roll out a new five-year strategy to support the continued success of its consumer goods business, which represents brands such as Cushelle, Plenty, Bodyform and TENA and supports retail customers.
From an operational perspective, the business successfully completed a major SAP update, overhauling its existing IT systems to futureproof and enhance operations. The strategic investment boosted the IT systems that support all employees, suppliers and customers across the UK and ROI business.
Essity has also continued to make good progress on a major £30m state-of-the-art recycled fibre facility in Prudhoe, Northumberland, which is set to become one of the UK’s most advanced wastepaper recycling plants. The innovative facility will enable Essity to recycle used paper tissue and turn it into new paper, reducing the demand for virgin wood fibre when creating products.
Comment: Lee Doherty, VP Consumer Goods UKI & MEA
The third quarter was characterised by strong earnings with profitable growth and record-high cash flow. Our focus on growth resulted in higher volumes and increased market shares all over the world.
Volume growth and higher market shares
Every day Essity cares for the hygiene and health of a billion people across 150 countries. Our solutions are needed regardless of the economic situation and we are working to constantly increase the value of customer and consumer offerings. Although the global economy remains challenging, we have higher volumes in all categories, excluding restructuring.
Growth was strong in health and medical, especially in Europe and Latin America. Our TENA Pants in Incontinence Products Health Care continued to drive both volume and higher margins and it is gratifying to see that the products are appreciated by both caregivers and patients. Growth was also particularly high in wound care products under our Leukoplast and Cutimed brands.
We continued to gain market share in consumer goods, a result of our long-term work on innovation combined with investments in marketing. Growth was strong in Europe, but the development was also favourable in Latin America. In professional hygiene, growth was affected by restructuring, but underlying growth was strong, especially in the premium range.
Strong earnings
All business areas contributed to the group’s good profitability. Earnings were positively impacted by the economies of scale we achieved through higher volumes and by a favourable product mix. We have also had good price discipline, despite lower costs of goods sold, and sales prices were higher compared with the second quarter of 2024. We continued to realise high cost savings through continuous efficiency improvements and have so far this year achieved more than SEK 1bn in savings. Combined, this led to a strong result for the quarter.
Record-high cash flow
The operations generated strong cash flow during the quarter and net debt was further reduced. Our share buyback program is ongoing and by the end of the quarter, we had repurchased about four million of Essity’s Class B shares.
All business areas contributed to the group’s good profitability. Earnings were positively impacted by the economies of scale we achieved through higher volumes.
Looking ahead
With customers and consumers at the heart of our business, we will continue to win in the growing hygiene and health market through successful innovation, leading brands, sustainability and efficiency.
At the Capital Markets Day on 3 December in our production facility in Spain, we will provide deeper insights into the operations and how we are working toward our vision – to be the undisputed global leader in hygiene and health.
Essity is in better shape than ever. Globally we are seeing market share gains and higher volumes which are delivering profitable growth for the company. Pleasingly in Q3 2024 our 2050 net zero goals were validated by Science Based Targets initiative (SBTi) which demonstrates our commitment and action on sustainability. In the UK and ROI, we successfully delivered a significant all-company systems upgrade in Q3 2024 which further strengthens our ability to deliver a fast, reliable and efficient customer and supplier experience.
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