ETTYF - Essity AB (publ) (ETTYF) Q2 2024 Earnings Call Transcript
2024-07-21 23:09:07 ET
Essity AB (publ) (ETTYF)
Q2 2024 Earnings Conference Call
July 18, 2024, 03:00 ET
Company Participants
Sandra Aberg - VP, IR
Magnus Groth - President, CEO & Director
Fredrik Rystedt - CFO, EVP & Head, Group Function Finance
Conference Call Participants
Charles Eden - UBS
Patrick Folan - Barclays
Victoria Nice - Bernstein & Co.
Niklas Ekman - Carnegie
Linus Larsson - SEB
Oskar Lindstrom - Danske Bank
Jeremy Fialko - HSBC
Karel Zoete - Kepler
Thomas Sykes - Deutsche Bank
Presentation
Sandra Aberg
Yes, good morning and very welcome to Essity audio presentation of Second Quarter 2024 Results. My name is Sandra Aberg, Head of Investor Relations. And Joining today are CEO, Magnus Groth, and our CFO, Fredrik Rystedt. Magnus and Fredrik will take us through the results after that, you are very welcome with your questions.
Now I leave the line over to you, Magnus, please.
Magnus Groth
Thank you, Sandra, and welcome, everyone, to our Q2 interim report 2024 and assets summary, equity had a strong performance in the second quarter with high underlying volume growth, our highest EBITDA operating result to date with higher margins in all three business areas. We continued to show solid cash flow. And not to forget that during the quarter we announced a share buyback program and new ambitious financial targets.
So summing up the numbers, organic sales growth was slightly down minus 0.9%. Underlying, as I mentioned, we had the volume growth of 0.4%. But with the taking into account the restructuring that we have done in primarily Professional Hygiene and some extent in health and medical, underlying volume growth was actually 2.9%. And EBITDA, excluding IOC, as I said, is the highest so far, close to SEK3.4 billion, an increase was 17% and our EBITDA margin ended at 14.7%.
I'd like to bring your attention to our return on capital employed development, which is not anymore one of our financial targets. But if you remember, our previous financial target was to achieve a return on capital employed above 17% in 2025. And this was including the inbound, excluding them that we said that should be then about 18% because I mean, there was a drag on return on capital employed. And we actually hit that 18% number and even 18.5% already in this quarter. So the targets that we have actually have for next year. And since we're now buying back shares, it could be interesting to look at earnings per share growth, even though, of course, the impact from the share buyback program, it's very very small so far. And as you can see, there's an increase year-over-year of 37%.
Looking at the development, then over the last number of quarters, it's clear to the left, the sales and organic sales growth numbers, how we've come out of a very inflationary environment and then a period of the some extent, lower costs. And now in the quarter close to zero growth again. So a big pickup from Q1 there going forward, our ambition is to continue to grow volumes, market size, the good margins, of course, we are aiming for continuing our positive growth trajectory, EBITDA and EBITDA margin. I think that's pictured to the right there. Graph talks for itself, the 14.7%, but actually good margins overall in the last number of quarters. So and a strong development over a number of quarters....
Essity AB (publ) (ETTYF) Q2 2024 Earnings Call Transcript