Essity 'Well-Positioned' To Tackle Marketplace Competition, Says Analyst

By Steve Wynne-Jones
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Essity 'Well-Positioned' To Tackle Marketplace Competition, Says Analyst

Consumer tissue and hygiene products manufacturer Essity is 'well-positioned' to take on its rivals in what remains a competitive marketplace, a leading industry analyst has said.

Anubhav Malhotra of Liberum was commenting following the announcement of Essity's Q4 and full-year results, in which it posted a net sales increase of 8.8%, to SEK 128.9 billion (€12.2 billion) for the year.

Sales Performance

Essity's personal care business saw sales up 7% for the year, albeit with profits affected by higher raw material and energy costs.

Its consumer tissue business, meanwhile, saw a sales rise of 11%, with profits higher due to higher prices and improved volumes, while its professional hygiene arm saw net sales rise 105.

"Essity reported another strong set of results in 4Q’19 with organic sales growth of 3.6% (volume +2.3%), slightly above consensus expectations of 3.5%," Malhotra commented.


Noting that Consumer Tissue prices have been "re- negotiated down low-single digits in Europe to reflect the lower input costs", he added that "Essity’s price discipline, innovations and cost-savings program during the high input cost environment over 2017-19, leaves it well positioned to negotiate with customers and fight competition in the current lower input costs environment".

'Successful Innovations'

Commenting on its full-year performance, Essity said that 'successful innovations and investments in sales and marketing [...] strengthened our market positions and brands', while its new product innovations have 'enhanced customer and consumer value and reduced environmental footprint'.

In emerging markets, which account for 37% of its sales, organic net sales were up 9.1%, while in Latin America, sales were up 10%, and in Asia sales rose by 11%.

The group has established additional sustainability targets for packaging with a special focus on plastic packaging, it said. It is also investing in sustainable technology for alternative fibre for tissue production.

© 2020 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.

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