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Essity (SE:ESSITY.A)
:ESSITY.A
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Essity Aktiebolag
(ESSITY.A)
Rating:71Outperform
Price Target:
kr308.00
▲(12.41%Upside)
Essity Aktiebolag (ESSITY.A) vs. iShares MSCI Sweden ETF (EWD)
Market Cap
kr190.09B
Dividend Yield3.01%
Average Volume (3M)7.20K
Price to Earnings (P/E)15.2
Beta (1Y)0.16
Revenue Growth-8.34%
EPS Growth-31.13%
CountrySE
Employees36,000
SectorConsumer Defensive
Sector Strength63
IndustryHousehold & Personal Products
Share Statistics
EPS (TTM)4.43
Shares Outstanding58,973,656
10 Day Avg. Volume10,113
30 Day Avg. Volume7,202
Financial Highlights & Ratios
PEG Ratio-0.39
Price to Book (P/B)2.43
Price to Sales (P/S)0.00
P/FCF Ratio21.73
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
Essity Aktiebolag Business Overview & Revenue Model
Company DescriptionEssity Aktiebolag (ESSITY.A) is a global leader in hygiene and health products, headquartered in Stockholm, Sweden. The company operates in three main business areas: Personal Care, Consumer Tissue, and Professional Hygiene. Essity's core products include incontinence products, baby diapers, feminine care products, consumer tissue such as toilet paper and kitchen rolls, and a range of products for professional hygiene in public and workplace settings. Essity is committed to improving well-being through its products and sustainability initiatives.
How the Company Makes MoneyEssity makes money through the sale of its diverse range of hygiene and health products across its three main business areas: Personal Care, Consumer Tissue, and Professional Hygiene. Revenue is generated from both retail sales to individual consumers and bulk sales to businesses and institutions. In Personal Care, Essity earns through products like incontinence care, baby care, and feminine care, often collaborating with healthcare providers and leveraging strong brand names like TENA and Libero. In Consumer Tissue, revenue comes from the sale of toilet paper, facial tissues, and paper towels, with well-known brands such as Lotus and Tempo. Professional Hygiene focuses on supplying businesses and institutions with hygiene solutions under brands like Tork. The company also engages in strategic partnerships and acquisitions to enhance its market presence and leverage synergies across its operations. Essity's earnings are significantly influenced by its global distribution network, brand strength, and ongoing innovation in product development.
Essity Aktiebolag Earnings Call Summary
Earnings Call Date:Apr 24, 2025
(Q1-2025)
| % Change Since: -3.86%|
Next Earnings Date:Jul 17, 2025
Earnings Call Sentiment Neutral
Essity's Q1 2025 earnings call presented a mixed picture. While there were several positive elements such as strong cash flow, a new share buyback program, and limited impact from tariffs, the company faced challenges with higher costs and volume declines in key segments.Q1-2025 Updates
Positive Updates
Strong Cash Flow and Balance Sheet
Essity reported a strong cash flow and a solid balance sheet. The company has continued to reduce its net debt, which is now close to SEK27 billion, with a net debt to EBITDA ratio of roughly about 1.
New Share Buyback Program
Essity announced a new SEK3 billion share buyback program to allocate its strong operating cash flow. The program begins immediately and extends until the next AGM.
Product Superiority
Essity reported that 71% of its branded sales are perceived to be superior in terms of price, mix, and product attributes and features, which drives customer preference and purchase intent.
Limited Impact from Tariffs
Essity indicated that the impact from tariffs is limited due to its global business model, where products are typically produced and raw materials sourced where they are sold.
Negative Updates
Higher COGS and SG&A
The company faced challenges with higher costs of goods sold (COGS) and selling, general and administrative expenses (SG&A), primarily due to inflation and investments in growing the business.
Volume Declines in Professional Hygiene
Essity reported a decline in volumes for its Professional Hygiene segment, particularly in North America, attributed to softer demand in the foodservice space.
Weakness in Baby Care Segment
The Baby Care segment saw a decline of 6.5%, attributed to lower demand and strong competitive pressures with high-priced promotions.
Company Guidance
During Essity's Q1 2025 earnings call, the company reported a solid start to the year with higher sales and strong cash flow across all business areas. The Health & Medical and Professional Hygiene sectors experienced growth in sales, driven by positive price and mix contributions, though Professional Hygiene saw a decline in volumes. Despite higher COGS, attributed mainly to raw materials and distribution, and increased SG&A expenses due to inflation and business investments, Essity maintained a stable volume performance. The company announced a SEK3 billion share buyback program, leveraging its strong operating cash flow. Essity's global production and sourcing strategy mitigates the impact of tariffs, particularly in North America, where 90% of Professional Hygiene products are locally produced. The company also highlighted successful product launches, contributing to a superior product perception rate of over 70%, and expects further improvements throughout the year.Essity Aktiebolag Financial Statement Overview
Summary
Essity Aktiebolag presents a solid financial profile with strong operational margins and effective cash flow management. The company's strategic focus on deleveraging has improved its financial stability, although revenue growth remains flat. Continued emphasis on enhancing return on equity and maintaining cash efficiency will be crucial for sustained financial performance.Income Statement
Essity Aktiebolag has demonstrated consistent revenue generation with a stable gross profit margin of approximately 32% over the TTM period. The net profit margin for the TTM stands at 8.63%, which is a notable recovery from the previous year's performance. Although revenue growth has been flat, the company has maintained strong EBIT and EBITDA margins, indicating efficient cost management and operational stability.75
Positive
Balance Sheet
The balance sheet reflects a strong equity position with an equity ratio of 46.3% in the TTM period. The elimination of total debt in the TTM indicates a significant deleveraging effort, enhancing financial stability. However, the lower return on equity (ROE) of 15.85% suggests room for improvement in generating returns from shareholder investments.70
Positive
Cash Flow
Essity's cash flow performance is robust, with a favorable operating cash flow to net income ratio of 1.28 in the TTM. The free cash flow to net income ratio is 0.71, indicating efficient cash conversion. Although there was a decline in free cash flow compared to the previous year, the overall cash flow management remains strong.80
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 145.67B | 145.55B | 147.15B | 156.17B | 121.87B | 121.75B | Gross Profit |
| 47.14B | 47.13B | 45.13B | 37.23B | 35.09B | 39.44B | EBIT |
| 18.59B | 18.30B | 17.75B | 9.48B | 13.20B | 16.76B | EBITDA |
| 26.20B | 26.14B | 20.90B | 15.44B | 20.45B | 24.89B | Net Income Common Stockholders |
| 12.57B | 20.89B | 9.55B | 5.57B | 8.62B | 10.23B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 12.66B | 15.62B | 5.19B | 4.50B | 4.09B | 5.15B | Total Assets |
| 171.24B | 185.28B | 202.99B | 210.60B | 175.05B | 154.65B | Total Debt |
| 0.00 | 43.78B | 60.98B | 66.58B | 56.83B | 45.88B | Net Debt |
| -9.77B | 32.81B | 55.83B | 62.29B | 52.93B | 40.90B | Total Liabilities |
| 91.54B | 96.54B | 123.59B | 134.04B | 106.54B | 91.30B | Stockholders Equity |
| 79.29B | 88.31B | 70.85B | 67.35B | 59.87B | 54.35B |
| Cash Flow | Free Cash Flow | ||||
| 8.88B | 9.40B | 14.68B | 5.92B | 7.31B | 11.21B | Operating Cash Flow |
| 16.04B | 16.80B | 21.57B | 12.87B | 14.67B | 17.82B | Investing Cash Flow |
| -4.87B | 9.41B | -7.11B | -14.50B | -12.13B | -7.09B | Financing Cash Flow |
| -12.55B | -22.34B | -11.55B | 1.81B | -3.81B | -8.38B |
Essity Aktiebolag Technical Analysis
Negative
274.00
Price Trends
278.78
Negative
280.65
Negative
288.50
Negative
Market Momentum
-0.44
Positive
43.87
Neutral
7.78
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SE:ESSITY.A, the sentiment is Negative. The current price of 274 is below the 20-day moving average (MA) of 277.68, below the 50-day MA of 278.78, and below the 200-day MA of 288.50, indicating a bearish trend. The MACD of -0.44 indicates Positive momentum. The RSI at 43.87 is Neutral, neither overbought nor oversold. The STOCH value of 7.78 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SE:ESSITY.A.
Essity Aktiebolag Peers Comparison
Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | kr8.32B | 11.29 | 11.91% | 2.01% | 13.81% | 31.44% | |
77 Outperform | $9.93B | 15.76 | 11.12% | 2.79% | 1.61% | 30.09% | |
72 Outperform | kr8.89B | 15.17 | 12.49% | 1.89% | 5.86% | 33.17% | |
71 Outperform | kr190.09B | 15.20 | 3.01% | -8.34% | -31.13% | ||
71 Outperform | kr4.65B | 19.23 | 6.76% | 4.87% | 1.68% | -38.11% | |
65 Neutral | $8.89B | 15.01 | 4.75% | 203.76% | 3.54% | -2.49% | |
62 Neutral | kr1.28B | 33.60 | 1.23% | 2.32% | -0.35% | ― |
* Consumer Defensive Sector Average
Performance Comparison
SE:ESSITY.A
Essity Aktiebolag
274.00
4.41
1.64%
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55.89%
SE:DUNI
Duni AB
99.00
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-2.11%
SE:MSON.B
Midsona AB Class B
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0.25
2.99%
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.