Essity AB (publ)

Good morning and welcome to SRE's year end report 2020. And to summarize, we are happy today to present the highest adjusted operating result ever for SRE. This is 17.6 million, an increase with 11% compared to 2019. And this was achieved through a margin improvement of 220 basis points to 14.5% for the year. And considering, of course, the huge uncertainties throughout this year of the big pandemic, ending up with an organic net sales of minus 1.9% shows how resilient our different businesses are in very turbulent circumstances. Also operating cash flow was very strong, over 16 billion. And we, based on this from the board, recommend to the annual shareholders meeting to increase the dividend with half a krona to six kronors and 75 öre for the year. and i think this six-year development shows the strength of having a number of categories that benefit from different market circumstances but with the foundation of all being related to hygiene and health which is of course of growing importance not least through this pandemic and in this perspective the small declining growth of 1.9 percent in in 2020, I think really shows how resilient we are after having average annual increases of over 5 billion. And maybe even more stable to the right here is The adjusted EBITDA, which has grown with over 10% per year over the last six years, an annual increase of approximately 1.4 billion per year, and 2020 was not an exception, actually a year where adjusted EBITDA grew even more than on average. And there are ups and downs, but overall S&E has a very, very strong combination of businesses that together create this stability and solid growth, both in EBITDA and net sales. And underlying this, which is very, very important for the future, is an improvement in margins, both in mature and emerging markets. But the key message here is that since 2015, margins in emerging markets have nearly doubled from 6.5% to 12.9%. And emerging markets include Asia, Latin America, and Eastern Europe. And this is very positive for the future, considering that this is where the growth is in the long term. So really giving us the opportunity to invest in growth for the future in emerging markets without a major negative impact on margins. And this is based on the strategies that we've been talking about for years now, which is premiumization, innovation, cost efficiency in everything we do. And we will continue on this journey going forward. Just a short view of what we achieved in 2020 before we turn to the quarter four numbers. In spite of lockdowns and restrictions, we had a very ambitious launch program for innovations. And here are just some examples of the different innovations and the different brands that have been supported. And we were also agile and disruptive internally in quickly adjusting our launch programs to adapt to the need for hygienic and health products supporting, of course, fighting the pandemic. And here are some examples. Soaps and sanitizers, where sales were up close to 40% for the year. converting air dryers to torque peak serve so don't dry your hands on air dryers because they blow water droplets throughout the washrooms and i mentioned this before but just a reminder One year ago at this point last year, we had no plans to produce face masks. And now this is a growing business with production in three countries. So very agile from the entire organization here. And of course, repositioning existing products to really underscore the hygienic benefits of these products. And the results are clear. Over 90% of our branded sales have number one or number two positions on the markets where we're active. And maybe more importantly, over 60% of our market positions in retail branded are growing and over 20% are stable. And for those of you who participated in the Capital Markets Day in May 2019, you might remember that this number was at that time over 50%. So we are continuing to grow market shares in many more markets and categories than we did one and a half years ago. And of course, this also relates to our digital transformation, which flows through the entire organization and looking at e-commerce specifically in the end that accounted for 15 billion of sales last year. And in the fourth quarter, this was 15% of sales. And to give some more feel for what we're doing in all these areas, I'm going to show two short videos, one about Tena SmartCare, which is a new product launch that we're very excited about, and the other one about what we're doing in digitalization in supply chain and specifically in manufacturing.

By introducing Tenor SmartCare Change Indicator, a sustainable and revolutionary digital technology, Tenor has taken incontinence care to a new level. With the reusable Change Indicator, caregivers receive notifications to their smartphone when it's time to consider change. TenorSmart Care Change Indicator helps to ease the stress of uncertainty for caregivers, reducing the need for unnecessary checking, as well as helping improve efficiency and daily practice at care homes. The TenorSmart Care Professional Care Dashboard for Care Homes provides a complete overview of data on notifications and product changes to facilitate planning and optimize routines. With Tenna's Smart Care Change Indicator, we provide a higher level of comfort and quality of life. Tenna. The more we connect, the better we care.

I think that's a great tagline. The more we connect, the better we care. Moving over then to the second short movie about manufacturing and digitalization.