Half-year Report 2020

July 13, 2020 Half-year Report 20202

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.

H1 2020 vs H1 2019

Summary

Half-year Report 20203 July 13, 2020

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

▪ Strong performance in a challenging environment

▪ Sales negatively impacted by COVID-19 and

related lockdowns

▪ Significant profitability improvement

─ Better mix

─ Significant cost savings

─ Lower raw material and energy costs

─ Lower volumes

─ Higher distribution costs

─ Increased sales and marketing costs

─ Lower prices in Consumer Tissue

▪ Strong cash flow and balance sheet

Adjusted

EBITA Margin2)Net Sales

Adjusted

EBITA2)

Organic

Net Sales1)

x%

Adjusted

ROCE2)

Adjusted

ROE2)

Operating

Cash Flow

Earnings

per Share

SEK

62,119m

-1.0%

-0.9%

SEK

9,115m

+32%

14.7%

+370bps

15.6%

+370bps

SEK

7.58

+32%

SEK

8,827m

+50%

19.5%

+100bps

Q2 2020 vs Q2 2019

Summary

Half-year Report 20204 July 13, 2020

1) Net sales which excludes exchange rate effects, acquisitions and divestments2) Excluding items affecting comparability3) A revaluation of deferred tax reduced taxes with SEK 253m in the second quarter of 2019

Adjusted

EBITA Margin2)Net Sales

Adjusted

EBITA2)

Organic

Net Sales1)

x%

Adjusted

ROCE2)

Adjusted

ROE2)

Operating

Cash Flow

Earnings

per Share

SEK

28,407m

-11.4%

-9.3%

SEK

3,782m

+1%

13.3%

+170bps

13.1%

+20bps

SEK

2.97

-8%3)

SEK

4,346m

+17%

15.1%

-380bps3)

▪ Strong underlying business performance in a

challenging environment

▪ Sales negatively impacted by COVID-19 and

related lockdowns and destocking

▪ Adjusted EBITA margin improvement

▪ Increased market shares in many markets

▪ Online sales increased with 350 bps to 14% of sales

▪ Successful innovations

Positive Long-term Development

28,15527,178

28,66428,020

29,72129,647

31,11230,656

32,068

32,565

33,68633,712

28,407

-0.1%

+1.8% +1.8%+3.4%

+2.3%+1.6%

+3.3%+4.3% +3.9%

+5.9%

+3.6%

7.8%

-9.3%

-15,00%

-10,00%

-5,00%

0,00%

5,00%

10,00%

15,00%

20,00%

25,00%

30,00%

20000

22000

24000

26000

28000

30000

32000

34000

36000

38000

Q22017

Q32017

Q42017

Q12018

Q22018

Q32018

Q42018

Q12019

Q22019

Q32019

Q42019

Q12020

Q22020

Net Sales, SEKm Organic Net Sales Growth, %

Half-year Report 2020July 13, 20205

3,437 3,432

3,619

3,119

3,349

3,016

3,451

3,190

3,732

4,176

4,742

5,333

3,782

12.2%

12.6% 12.6%

11.1%11.3%

10.2%

11.1%

10.4%

11.6%

12.8%

14.1%

15.8%

13.3%

7%

8%

9%

10%

11%

12%

13%

14%

15%

16%

17%

2000

2500

3000

3500

4000

4500

5000

5500

6000

6500

7000

Q22017

Q32017

Q42017

Q12018

Q22018

Q32018

Q42018

Q12019

Q22019

Q32019

Q42019

Q12020

Q22020

Adjusted EBITA, SEKm Adjusted EBITA margin, %

Adjusted EBITA and EBITA margin2)Net Sales and Organic Net Sales Growth1)

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

Strengthened Market Shares and Brands

Half-year Report 2020July 13, 2020

Essity has a market share of 30% or

above in 40% of its market positions

~90%

>60%

40%

Essity has position #1 or #2 in ~90%

of our branded sales

6

~60%Essity’s branded market share has

improved in ~60% of its market

positions in the past 3 years

Positive development past 6 months and long-term

Essity’s branded market share in retail has

improved in >60% of its market positions

in the past 6 months

Net Sales

Half-year Report 2020July 13, 20207

Q2 2020 vs Q2 2019

Net SalesQ2 2019

Volume Price/Mix Acquisitions Divestment Currency Net SalesQ2 2020

-9.8%

-0.2%+0.5%

-11.4%

Organic Net Sales1) -9.3%

SEK 32,068m

SEK 28,407m

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

+0.1% -2.0%

Adjusted EBITA Margin1)

Q2 2020 vs Q2 2019

Half-year Report 2020July 13, 20208

1) Excluding items affecting comparability

▪ Impact from lower raw material

and energy costs +510 bps

▪COGS savings of SEK 127m

11.6%

13.3%

+320 bps -30 bps -120 bps

Adjusted EBITA Margin

Q2 2019

Impact Gross

Profit Margin

A&P SG&A

(excl A&P)

Adjusted EBITA Margin

Q2 2020

+170 bps

Raw Material Development

Half-year Report 2020July 13, 20209

50

75

100

125

150

Polypropylene, EUR Propylene, EUR

75

100

125

150

Fluff NBSK EUCA

40

60

80

100

120

140

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

0

50

100

150

200

Electricity, EUR Natural Gas, EUR

Energy Prices3)

COVID-19

Half-year Report 2020July 13, 202010

Secure

Business

Success

Contribute

to Society

Care for

Our People

Top priorities

▪ Positive feedback from customers appreciating our

support, service and delivery reliability

▪ Successful innovations

▪ Increased presence and activity in digital sales channels

▪ Strengthened market shares in many markets

▪ Significantly increased awareness of hygiene and health

Half-year Report 2020July 13, 202011

Secure Business Success

InnovationsQ2 2020

July 13, 2020 Half-year Report 202012

Increased Awareness of Hygiene and Health

Half-year Report 2020July 13, 202013

Leveraging our leading solutions

Anti-bacterial Products Reposition Products

to Hygienic Benefits

Soaps and Sanitizers Tork PeakServe

Personal Care

▪ Organic net sales decreased 9.4%

─ Volume -10.2% and price/mix +0.8%

▪ Sales negatively impacted by COVID-19 and related

lockdowns and destocking

▪ Gradual improvement of sales in June

▪ Higher prices

▪ Cost savings

▪ Lower raw material costs

▪ Lower volumes and higher distribution costs

▪ Lower sales and marketing costs but higher as % of net sales

Q2 2020 vs Q2 2019

Half-year Report 2020July 13, 202014

SEK 10,651m

SEK 12,164m

Q2 2019 Q2 2020

SEK 1,438m

SEK 1,711m

Net Sales Adjusted EBITA1) Adjusted EBITA Margin1)

-16%-12.4%

14.1% 13.5%

-9.4%

Total Mature

Markets

Incontinence

Products

By Region By Product Segment

Emerging

Markets

-12.2%

-3.2%

-15.9%

-0.2%

Baby

Care

Feminine

Care

% of Personal

Care Net Sales: 63% 37% 48% 16% 18%18%

-25.6%

-4.1%

Medical

Solutions

Organic Net Sales

1) Excluding items affecting comparability

Q2 2019 Q2 2020 Q2 2019 Q2 2020

-60

bps

Consumer Tissue

▪ Organic net sales increased 4.3%

─ Volume +4.9% and price/mix -0.6%

▪ Higher volumes

▪ Better mix but lower prices

▪ Lower raw material and energy costs

▪ Higher distribution costs

▪ Higher sales and marketing costs but lower as % of net sales

Q2 2020 vs Q2 2019

Half-year Report 2020July 13, 202015

SEK 12,437mSEK 12,167m

SEK 2,124m

SEK 1,166m

Net Sales Adjusted EBITA1) Adjusted EBITA Margin1)

+2.2% +750

bps9.6%

17.1%

Q2 2019 Q2 2020

+4.3%

Total Mature

Markets

Organic Net Sales By Region

Emerging

Markets

-2.3%

% of Consumer

Tissue Net Sales: 51% 49%

+12.4%

+82%

1) Excluding items affecting comparability

Q2 2019 Q2 2020 Q2 2019 Q2 2020

Professional Hygiene

▪ Organic net sales decreased 30.7%

─ Volume -32.2% and price/mix +1.5%

▪ Sales negatively impacted by COVID-19 and related

lockdowns and destocking

▪ Higher prices and better mix

▪ Cost savings

▪ Lower raw material and energy costs

▪ Lower volumes and higher distribution costs

▪ Lower sales and marketing costs but higher as % of net sales

▪ Higher sales of dispensers and skin care

Q2 2020 vs Q2 2019

Half-year Report 2020July 13, 202016

Q2 2019 Q2 2020

SEK 5,315m

SEK 7,742m

Net Sales Adjusted EBITA1) Adjusted EBITA Margin1)

-53%

-31.3%-430

bps

9.0%

13.3%

SEK 1,026m

SEK 481m

Q2 2019 Q2 2020

-30.8%

% of Professional

Hygiene Net Sales:

-29.5%

Total

Mature

Markets

Emerging

Markets

81% 19%

Organic Net Sales By Region

1) Excluding items affecting comparability

Q2 2019 Q2 2020 Q2 2019 Q2 2020

-30.7%

SummaryQ2 2020

Half-year Report 2020July 13, 202017

▪ Strong underlying business performance in a

challenging environment

▪ Adjusted EBITA margin improvement

▪ Sales negatively impacted by COVID-19 and related

lockdowns and destocking

▪ Increased market shares in many markets

▪ Online sales increased with 350 bps to 14% of sales

▪ Increasing importance of hygiene and health