Tissue maker Essity sees market recovery after record 2020 profit (updated)

Vinda International Holdings

27/01/2021 12:36

* Q4 less bad than feared as demand from retailers grew
    * Proposes dividend of 6.75 SEK/share for 2020, up 8% from
2019
    * CEO sees Professional Hygiene recovery from H2 
    * Shares up 

 (Adds CEO comment, shares, background, detail)
    STOCKHOLM, Jan 27 (Reuters) - Swedish hygiene products maker
Essity  ESSITYb.ST  expects demand to gradually recover this
year as COVID-19 vaccinations accelerate and restrictions ease,
after a record 2020 profit despite lower sales.
    The world's biggest maker of hygiene products for offices
said that while organic sales slid 2% in the year due to the
pandemic and related lockdowns, big cost cuts and lower pulp
costs helped boost operating profit by 17% to 16.8 billion
crowns ($2.0 billion).
    Fourth-quarter profit fell 8% from a year earlier to 4.19
billion crowns as the division that makes products for offices,
restaurants and hotels suffered from the stay-at-home trend. But
the fall was smaller than feared as other divisions' higher
sales to retailers helped compensate partly.  urn:newsml:reuters.com:*:nL8N2K04E2
    Shares in Essity were up 2.7% at 1224 GMT as the world's
second-biggest maker of consumer tissue such as toilet paper and
handkerchiefs with brands such as Lotus and Vinda also proposed
a higher dividend for 2020 than in 2019.  
    "The COVID-19 pandemic has had a major impact on people and
the global economy. Vaccinations have started and market
conditions are gradually improving. Increased awareness of
hygiene and health is positive for Essity," it said in a
statement. 
    Chief Executive Magnus Groth said the first division to
benefit as economies reopen would be Professional Hygiene. "We
expect to see that from the second half of the year," he told
Reuters. 
    He told analysts and reporters on a call that while he saw
pulp prices rising in the first quarter he expected effects for
Essity to be relatively small.  urn:newsml:reuters.com:*:nFWN2K20H8
    The rival of Procter & Gamble  PG.N  and Kimberly-Clark
 KMB.N  said its board proposed a dividend of 6.75 crowns per
share for 2020, up 8% from the dividend paid for 2019. 
    ($1 = 8.3257 Swedish crowns)

 (Reporting by Anna Ringstrom; editing by Johannes Hellstrom,
Niklas Pollard and Emelia Sithole-Matarise)
 ((anna.ringstrom@thomsonreuters.com; +46 8 502 423 74; Reuters
Messaging: anna.ringstrom.thomsonreuters.com@reuters.net))