Interim ReportThird Quarter 2019

October 25, 2019 Interim Report Q3 20192

This presentation may contain forward-looking statements. Such

statements are based on our current expectations and are subject

to certain risks and uncertainties that could negatively affect our

business. Please read our most recent annual and sustainability

report for a better understanding of these risks and uncertainties.

Q3 2019 vs Q3 2018

Summary

Interim Report Q3 20193 October 25, 2019

1) Net sales which excludes exchange rate effects, acquisitions and divestments2) Excluding items affecting comparability

▪ Strong organic net sales growth and higher

adjusted EBITA margin in all business areas

▪ Higher prices, better mix, higher volumes

and cost savings in all business areas

▪ Lower raw material and energy costs but

negative impact from stock revaluation

▪ EPS increased 150% to SEK 3.53

Adjusted

EBITA Margin2)Net Sales

Adjusted

EBITA2)

Organic

Net Sales1)

x%

Adjusted

ROCE2)

Adjusted

ROE2)

Operating

Cash Flow

Earnings

per Share

SEK

32,565m

+9.8%

+5.9%SEK

4,176m

+38%

12.8%

+260 bps

20.1%14.3%

SEK

3.53

+150%

+73%

3,437 3,4323,619

3,1193,349

3,016

3,451

3,190

3,732

4,176

Q22017

Q32017

Q42017

Q12018

Q22018

Q32018

Q42018

Q12019

Q22019

Q32019

28,155

27,178

28,664

28,020

29,721 29,647

31,11230,656

32,06832,565

Q22017

Q32017

Q42017

Q12018

Q22018

Q32018

Q42018

Q12019

Q22019

Q32019

Increased Sales and Profits

1) Excluding exchange rate effects, acquisitions and divestments2) Excluding items affecting comparability

SEKm

-0.1%

October 25, 2019 Interim Report Q3 2019

12.2%

4

12.6% 12.6% 11.1% 11.3% 10.2% 11.1% 10.4% 11.6%

Adjusted EBITA2)

SEKm

Net Sales

Adjusted EBITA Margin2)

+1.8% +1.8% +3.4% +2.3% +1.6% +3.3% +4.3% +3.9%

Organic Net Sales1)

+5.9% 12.8%

Net Sales

Interim Report Q3 2019October 25, 20195

Q3 2019 vs Q3 2018

Net SalesQ3 2018

Price/Mix Volume Divestment Currency Net SalesQ3 2019

+2.1%

+4.3%

+3.8%

+9.8%

Organic Net Sales1) +5.9%

SEK 29,647m

SEK 32,565m

1) Net sales which excludes exchange rate effects, acquisitions and divestments

-0.4%

Adjusted EBITA1)

Q3 2019 vs Q3 2018

Interim Report Q3 2019October 25, 20196

AdjustedEBITA

Q3 2018

Price/Mix Volume Raw Material Energy Cost SavingsCOGS

Cost-savingsProgram

Other Currency AdjustedEBITA

Q3 2019

Organic Adjusted EBITA +31%2)SEK 3,016m

+38%

SEK +614m

SEK +367m

SEK +409m SEK +57m SEK +92mSEK -773m

SEK +215mSEK 4,176m

1) 1)

1) Excluding items affecting comparability2) Excluding items affecting comparability, currency translation effects and acquisitions

SEK +179m

▪ Higher sales and marketing costs

▪ Stock revaluation

▪ Higher distribution costs

Raw Material Development

Interim Report Q3 2019October 25, 20197

75

100

125

150

Polypropylene, EUR Propylene, EUR

75

100

125

150

Fluff NBSK EUCA

50

75

100

125

150

SOP US SOP EU

Source: Fastmarkets RISI, Fastmarkets FOEX, VDP, Macrobond, Epexspot, ICIS

Oil-based Raw Materials2)

Market Pulp in USD, Europe Paper for Recycling1)

Index 100 = July 2017 1) Sorted Office Paper. Index in local currencies. EU refers to Germany 2) Polypropylene major feedstock of non-woven material, Propylene major feedstock of SAP material 3) Electricity Germany. Natural Gas, TTF Index

60

85

110

135

160

185

210

Electricity, EUR Natural Gas, EUR

Energy Prices3)

COGS Savings

▪ Lower COGS savings in Q3 2019 due to temporarily higher

production and distribution costs mainly due to disruptions

related to

─ Start-up of new production capacity

─ Higher pace of product launches

─ Higher demand

▪ Changed ambition for COGS savings 2019: SEK 600-700m

▪ Savings from

─ Tissue Roadmap

─ Operational efficiency improvements

─ Material rationalization

─ Sourcing savings

SEK 92m in Q3 2019

Interim Report Q3 2019October 25, 20198

-40 bps

Q3 2018 Q3 2019

Cost-savings ProgramSEK 179m in Q3 2019

Interim Report Q3 2019October 25, 20199

▪ Main impact in SG&A costs

▪ Expected annual cost savings of approx SEK 900m with

full effect at the end of 2019

▪ End of Q3 2019 annualized run-rate cost savings SEK 799m

▪ Headcount reduction of approx. 880 positions out of 1,000

▪ Ambition for cost savings 2019: SEK 600m

17.6% 17.2%

Reduction of SG&A as % of Sales

-40 bps

Improving Everyday Life through Innovations

Interim Report Q3 2019October 25, 201910

Personal Care

▪ Organic net sales increased 4.5%

─ Volume +3.3% and price/mix +1.2%

▪ Higher prices, better mix, higher volumes and cost savings

▪ Raw material and energy headwinds with negative impact of

-100 bps on adjusted EBITA margin

▪ Higher distribution costs

▪ Investments in growth and costs related to implementation of

Medical Device Regulation increased sales and marketing

costs

▪ Exit of open baby diapers in Russia

Q3 2019 vs Q3 2018

Interim Report Q3 2019October 25, 201911

SEK 12,216mSEK 11,408m

Q3 2018 Q3 2019 Q3 2018 Q3 2019 Q3 2018 Q3 2019

SEK 1,739mSEK 1,565m

Net Sales Adjusted EBITA1) Adjusted EBITA Margin1)

+11%+7.1% +50

bps

13.7% 14.2%

+4.5%

Total Mature

Markets

Incontinence

Products

By Region By Product Segment

Emerging

Markets

+3.3%

+5.9%

-0.5%

+10.7%

Baby

Care

Feminine

Care% of Personal

Care Net Sales: 63% 37% 44% 19% 18%19%

+1.5%

+6.9%

Medical

Solutions

Organic Net Sales

1) Excluding items affecting comparability

Consumer Tissue

▪ Organic net sales increased 8.1%

─ Volume +4.9% and price/mix +3.2%

▪ Higher prices, better mix, higher volumes and cost savings

▪ Lower raw material and energy costs but negative impact

from stock revaluation

▪ Higher distribution costs

▪ Investments in growth with higher sales and marketing

costs

Q3 2019 vs Q3 2018

Interim Report Q3 2019October 25, 201912

SEK 12,220m

SEK 10,912m

SEK 1,319m

SEK 635m

Net Sales Adjusted EBITA1) Adjusted EBITA Margin1)

+12% +500

bps5.8%

10.8%

Q3 2018 Q3 2019 Q3 2018 Q3 2019 Q3 2018 Q3 2019

+8.1%

Total Mature

Markets

Organic Net Sales By Region

Emerging

Markets

+4.3%

% of Consumer

Tissue Net Sales: 54% 46%

+12.8%

+108%

1) Excluding items affecting comparability

Professional Hygiene

▪ Organic net sales increased 5.0%

─ Volume +3.2% and price/mix +1.8%

▪ Higher prices, better mix, higher volumes and cost

savings

▪ Lower raw material and energy costs but negative

impact from stock revaluation

▪ Investments in growth with higher sales costs

Q3 2019 vs Q3 2018

Interim Report Q3 2019October 25, 201913

Q3 2018 Q3 2019

SEK 8,131m

SEK 7,309m

Net Sales Adjusted EBITA1) Adjusted EBITA Margin1)

+33%

+11.3%

+250

bps

15.8%13.3%

SEK 970m

SEK 1,288m

Q3 2018 Q3 2019

+5.0%+4.4%

% of Professional

Hygiene Net Sales:

+8.1%

Total Mature

Markets

Emerging

Markets

80% 20%

Organic Net Sales By Region

1) Excluding items affecting comparability

Q3 2018 Q3 2019 Q3 2018 Q3 2019

Continuing the Digital Journey

Interim Report Q3 2019October 25, 201914

Essity with the Tork brand launches

Virtual Reality app for Hand Hygiene education

Clean hands save

lives in healthcareSEK 9bnin online sales 9M 2019

Approx 10% of Group Net Sales

Summary

▪ Strong organic sales growth and improved

profitability in all business areas

▪ EPS increased 150% to SEK 3.53

▪ Continued high innovation pace improving

well-being and strengthening our brands

▪ Investments in growth with higher sales and

marketing costs but lower as % of sales

▪ Continued cost and efficiency focus

Interim Report Q3 2019October 25, 201915

Q3 2019

Q&A