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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
CONSUMER STAPLES
In Q1 earnings it firmly rejected any link between bondholder demands for EoD trigger/par call & returns to shareholders. Still, hard not to interpret today's announcement as a reiteration of mgmt.'s already firm belief EoD was not triggered, no firm view from us to fight bondholders.
- New targets include annual organic sales growth>3% (technically unch from prev. >5% which included 2% from acquisitions). Adj. EBITA margin >15% (prev. >13.5%).
- SEK 3b (~€270m) buyback initiated, financed from operating cash flows post. dividends. Its guiding to continuing buybacks into the future. It has a "stable & rising" dividend policy, it did SEK5.1b (€450m) last year.
- Reminder Essity is facing Bondholders claiming event of default (demanding a par call) after its divestment of a SEK19b stake in Vinda late last year.
- Company has been firm its legal advice says otherwise, pointing to Vinda stake not meeting the >10% turnover OR total asset requirement (it sees ~8.5% on sales). It also added license agreements it has with Vinda as buffering that legal position.
- We would exercise caution for shorts, mgmt added in 1Q earnings "we have not received any formal requirement for accelerated payments."
- Mgmt has increased available credit facilities from €2b/SEK22b to €5.9b/SEK66b.
Press conference at 8am London; https://essity.videosync.fi/2024-06-17
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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