OM:ESSITY B

Stock Analysis Report

Executive Summary

Essity AB (publ) develops, produces, and sells personal care, consumer tissue, and professional hygiene products and solutions worldwide.

Rewards

Trading at 43.7% below its fair value

Earnings are forecast to grow 11.43% per year

Earnings grew by 34.3% over the past year

Risk Analysis

Has a high level of debt

Unstable dividend track record



Snowflake Analysis

Solid track record second-rate dividend payer.


Similar Companies

3M

NYSE:MMM

Share Price & News

How has Essity's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ESSITY B has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.0%

ESSITY B

-1.3%

SE Household Products

1.0%

SE Market


1 Year Return

30.4%

ESSITY B

0.002%

SE Household Products

22.5%

SE Market

Return vs Industry: ESSITY B exceeded the Swedish Household Products industry which returned 0% over the past year.

Return vs Market: ESSITY B exceeded the Swedish Market which returned 22.5% over the past year.


Shareholder returns

ESSITY BIndustryMarket
7 Day-2.0%-1.3%1.0%
30 Day-2.2%-0.8%0.6%
90 Day0.8%-2.2%8.4%
1 Year33.3%30.4%2.5%0.002%27.6%22.5%
3 Yearn/a-6.0%-11.9%34.2%13.7%
5 Yearn/a25.4%12.1%61.8%27.0%

Price Volatility Vs. Market

How volatile is Essity's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Essity undervalued compared to its fair value and its price relative to the market?

43.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ESSITY B (SEK295) is trading below our estimate of fair value (SEK524.24)

Significantly Below Fair Value: ESSITY B is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: ESSITY B is poor value based on its PE Ratio (20.9x) compared to the Household Products industry average (18.6x).

PE vs Market: ESSITY B is poor value based on its PE Ratio (20.9x) compared to the Swedish market (18.6x).


Price to Earnings Growth Ratio

PEG Ratio: ESSITY B is poor value based on its PEG Ratio (1.8x)


Price to Book Ratio

PB vs Industry: ESSITY B is overvalued based on its PB Ratio (4x) compared to the XE Household Products industry average (2.1x).


Next Steps

Future Growth

How is Essity forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?

11.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ESSITY B's forecast earnings growth (11.4% per year) is above the savings rate (-0.4%).

Earnings vs Market: ESSITY B's earnings (11.4% per year) are forecast to grow faster than the Swedish market (9.4% per year).

High Growth Earnings: ESSITY B's earnings are forecast to grow, but not significantly.

Revenue vs Market: ESSITY B's revenue (3.1% per year) is forecast to grow slower than the Swedish market (4.5% per year).

High Growth Revenue: ESSITY B's revenue (3.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ESSITY B's Return on Equity is forecast to be low in 3 years time (18.5%).


Next Steps

Past Performance

How has Essity performed over the past 5 years?

14.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ESSITY B has high quality earnings.

Growing Profit Margin: ESSITY B's current net profit margins (7.8%) are higher than last year (6.4%).


Past Earnings Growth Analysis

Earnings Trend: ESSITY B's earnings have grown by 14.8% per year over the past 5 years.

Accelerating Growth: ESSITY B's earnings growth over the past year (34.3%) exceeds its 5-year average (14.8% per year).

Earnings vs Industry: ESSITY B earnings growth over the past year (34.3%) exceeded the Household Products industry -34.3%.


Return on Equity

High ROE: ESSITY B's Return on Equity (18%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Essity's financial position?


Financial Position Analysis

Short Term Liabilities: ESSITY B's short term assets (SEK45.5B) do not cover its short term liabilities (SEK47.0B).

Long Term Liabilities: ESSITY B's short term assets (SEK45.5B) do not cover its long term liabilities (SEK60.7B).


Debt to Equity History and Analysis

Debt Level: ESSITY B's debt to equity ratio (88.9%) is considered high.

Reducing Debt: Insufficient data to determine if ESSITY B's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: ESSITY B's debt is well covered by operating cash flow (34%).

Interest Coverage: ESSITY B's interest payments on its debt are well covered by EBIT (11.6x coverage).


Balance Sheet

Inventory Level: ESSITY B has a high level of physical assets or inventory.

Debt Coverage by Assets: ESSITY B's debt is not covered by short term assets (assets are 0.9x debt).


Next Steps

Dividend

What is Essity's current dividend yield, its reliability and sustainability?

1.95%

Current Dividend Yield


Dividend Yield vs Market

company1.9%marketbottom25%1.6%markettop25%4.7%industryaverage2.4%forecastin3Years2.5%

Current dividend yield vs market & industry

Notable Dividend: ESSITY B's dividend (1.95%) is higher than the bottom 25% of dividend payers in the Swedish market (1.63%).

High Dividend: ESSITY B's dividend (1.95%) is low compared to the top 25% of dividend payers in the Swedish market (4.65%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, ESSITY B has been paying a dividend for less than 10 years.

Growing Dividend: ESSITY B has only been paying a dividend for 2 years, and since then payments have not increased.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (40.8%), ESSITY B's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: ESSITY B's dividends in 3 years are forecast to be well covered by earnings (45.4% payout ratio).


Next Steps

Management

What is the CEO of Essity's salary, the management and board of directors tenure and is there insider trading?

4.9yrs

Average management tenure


CEO

Magnus Groth (56yo)

2.9yrs

Tenure

kr20,443,383

Compensation

Mr. Magnus Groth, MBA, MSc Econ, ME, has been President and Chief Executive Officer of Essity Aktiebolag (publ) since 2017 and has been its Director since 2016. Mr. Groth served as the Chief Executive Offi ...


CEO Compensation Analysis

Compensation vs Market: Magnus's total compensation ($USD2.15M) is about average for companies of similar size in the Swedish market ($USD1.82M).

Compensation vs Earnings: Magnus's compensation has been consistent with company performance over the past year.


Management Age and Tenure

4.9yrs

Average Tenure

54yo

Average Age

Experienced Management: ESSITY B's management team is considered experienced (4.9 years average tenure).


Board Age and Tenure

3.9yrs

Average Tenure

59yo

Average Age

Experienced Board: ESSITY B's board of directors are considered experienced (3.9 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Buykr199,81531 Jul 19
Annemarie Gardshol
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares700
Max Pricekr285.45
Buykr1,091,69522 Jul 19
Louise Svanberg
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares3,940
Max Pricekr277.08
Buykr422,42307 Jun 19
Tuomas Yrjölä
EntityIndividual
Shares1,454
Max Pricekr290.53
Buykr444,80005 Jun 19
Ulrika Kolsrud
EntityIndividual
Shares1,600
Max Pricekr278.00
Buykr328,78528 May 19
Anna Aslund
EntityIndividual
Shares1,150
Max Pricekr285.90
Buykr852,90017 May 19
Robert Sjöström
EntityIndividual
Shares3,000
Max Pricekr284.30
Buykr600,28017 May 19
Volker Zöller
EntityIndividual
Role
Senior Key Executive
President of Consumer Goods
Shares2,100
Max Pricekr286.00
Buykr721,81207 May 19
Carl Fredrik Rystedt
EntityIndividual
Shares2,600
Max Pricekr277.62
Buykr843,00002 May 19
Mikael Schmidt
EntityIndividual
Role
Chief Legal Officer
Senior VP of Group Function Legal Affairs
Shares3,000
Max Pricekr281.00
Buykr1,522,80029 Apr 19
Magnus Groth
EntityIndividual
Role
Chief Executive Officer
President
Shares5,400
Max Pricekr282.00
Buykr357,00029 Apr 19
Josephine Edwall-Björklund
EntityIndividual
Shares1,275
Max Pricekr280.00
Buykr87,28028 Dec 18
Annemarie Gardshol
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares400
Max Pricekr218.20

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Magnus Groth (56yo)

    President

    • Tenure: 2.9yrs
    • Compensation: kr20.44m
  • Don Lewis (58yo)

    President of Professional Hygiene

    • Tenure: 7.9yrs
  • Johan Karlsson

    Vice President of Investor Relations

    • Tenure: 0yrs
  • Volker Zöller (52yo)

    President of Consumer Goods

    • Tenure: 4.9yrs
  • Donato Giorgio (46yo)

    President of Global Manufacturing

    • Tenure: 0yrs
  • Pablo Fuentes (46yo)

    President of Latin America

    • Tenure: 3.9yrs
  • Anna Sävinger-Åslund (50yo)

    Senior Vice President of Group Function Human Resources

    • Tenure: 4.9yrs
  • Fredrik Rystedt (56yo)

    CFO, Executive VP & Head of Group Function Finance

    • Tenure: 2.9yrs
  • Mikael Schmidt (59yo)

    Senior VP of Group Function Legal Affairs

    • Tenure: 7.9yrs
  • Karl Stoltz

    Manager of Media Relations

    • Tenure: 0yrs

Board Members

  • Bert Ake Nordberg (63yo)

    Independent Director

    • Tenure: 3.9yrs
    • Compensation: kr1.12m
  • Maija-Liisa Friman (67yo)

    Independent Director

    • Tenure: 3.9yrs
    • Compensation: kr740.00k
  • Annemarie Gardshol (52yo)

    Independent Director

    • Tenure: 3.9yrs
    • Compensation: kr740.00k
  • Pär Boman (58yo)

    Chairman of the Board

    • Tenure: 3.9yrs
    • Compensation: kr2.63m
  • Barbara Milian Thoralfsson (60yo)

    Non-Executive Director

    • Tenure: 3.9yrs
    • Compensation: kr1.09m
  • Magnus Groth (56yo)

    President

    • Tenure: 2.9yrs
    • Compensation: kr20.44m
  • Örjan Svensson (56yo)

    Employee Representative Director

    • Tenure: 2.9yrs
  • Louise Svanberg (61yo)

    Independent Director

    • Tenure: 3.9yrs
    • Compensation: kr851.00k
  • Ewa Björling (58yo)

    Independent Director

    • Tenure: 3.9yrs
    • Compensation: kr740.00k
  • Lars Sörensen (65yo)

    Independent Director

    • Tenure: 2.9yrs
    • Compensation: kr740.00k

Company Information

Essity AB (publ)'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Essity AB (publ)
  • Ticker: ESSITY B
  • Exchange: OM
  • Founded: 1849
  • Industry: Household Products
  • Sector: Household
  • Market Cap: kr208.628b
  • Shares outstanding: 702.34m
  • Website: https://www.essity.com

Number of Employees


Location

  • Essity AB (publ)
  • Waterfront Building
  • Klarabergsviadukten 63
  • Stockholm
  • Stockholm County
  • 101 23
  • Sweden

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ESWBDB (Deutsche Boerse AG)YesClass B SharesDEEURJun 2017
ESSITY AOM (OMX Nordic Exchange Stockholm)Class A SharesSESEKJun 2017
ETTY.FOTCPK (Pink Sheets LLC)YesClass B SharesUSUSDJun 2017
0RQCLSE (London Stock Exchange)Class A SharesGBSEKJun 2017
0RQDLSE (London Stock Exchange)YesClass B SharesGBSEKJun 2017
ESSIBSBATS-CHIXE (BATS 'Chi-X Europe')YesClass B SharesGBSEKJun 2017
ESSITY BOM (OMX Nordic Exchange Stockholm)YesClass B SharesSESEKJun 2017
ESWDB (Deutsche Boerse AG)Class A SharesDEEURJun 2017
ESSIASBATS-CHIXE (BATS 'Chi-X Europe')Class A SharesGBSEKJun 2017
ESSITYB NBMV (Bolsa Mexicana de Valores)YesClass B SharesMXMXNJun 2017
ESWADB (Deutsche Boerse AG)SPON ADR EACH REP 1 SHSDEEURJun 2017
ESSY.YOTCPK (Pink Sheets LLC)SPON ADR EACH REP 1 SHSUSUSDJun 2017

Biography

Essity AB (publ) develops, produces, and sells personal care, consumer tissue, and professional hygiene products and solutions worldwide. The company’s personal care products include incontinence products, ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/07 22:15
End of Day Share Price2019/12/06 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.