Operations in 2016
Net sales
SEK 33,651m
Adjusted operating profit1)
SEK 4,255m
Adjusted operating margin1)
12.6%
Net sales decreased by 2% to SEK 33,651m (34,344). Organic sales, which exclude exchange rate effects, acquisitions and divestments, increased by 3%, of which volume accounted for 2% and price/mix for 1%. The divestment of the baby diaper business in South Africa decreased net sales by 1%. Organic sales increased by 2% in mature markets and by 3% in emerging markets. Emerging markets accounted for 41% of net sales. Exchange rate effects decreased net sales by 4%.
For incontinence products, under the globally leading TENA brand, organic sales increased by 2%. Growth is attributable to emerging markets and Western Europe. For baby diapers, organic sales decreased by 1%. Western Europe showed high growth, while sales in emerging markets decreased. For feminine care products, organic sales increased by 10%, attributable to emerging markets and Western Europe.
The adjusted operating profit1) rose 7% (10% excluding currency translation effects and divestments) to SEK 4,255m (3,990). Profit was favorably affected by higher volumes, a better price/mix and cost savings. Higher raw material costs had a negative earnings effect. Selling costs were higher, and investments were made in increased marketing activities. The British pound and Mexican peso have weakened against several trading currencies, which had a negative earnings effect.
The adjusted operating margin1) was 12.6% (11.6).
The adjusted return on capital employed1) was 31.8% (29.2).
The operating cash surplus amounted to SEK 5,314m (5,018). Operating cash flow amounted to SEK 4,723m (3,792).
Capital expenditures amounted to SEK 1,896m (1,743).
Targets
- Annual organic sales growth of 5–7%
- Return on capital employed of 30% over a business cycle
Outcome 2016
Organic sales
+3%
Adjusted return on capital employed1)
31.8%
1) Excluding items affecting comparability.
SEKm |
2016 |
2015 |
||
|
||||
Net sales |
33,651 |
34,344 |
||
Operating cash surplus |
5,314 |
5,018 |
||
Change in working capital |
289 |
–314 |
||
Current capital expenditures, net |
–805 |
–840 |
||
Other operating cash flow |
–75 |
–72 |
||
Operating cash flow |
4,723 |
3,792 |
||
Adjusted operating profit 1) |
4,255 |
3,990 |
||
Adjusted operating margin, % 1) |
12.6 |
11.6 |
||
Capital employed |
13,665 |
13,148 |
||
Adjusted return on capital employed, % 1) |
31.8 |
29.2 |
||
Strategic capital expenditures |
|
|
||
plant and equipment |
–1,091 |
–903 |
||
company acquisitions/divestments |
197 |
23 |
||
Average number of employees |
13,154 |
12,688 |
||
No. of employees at Dec. 31 |
13,072 |
12,700 |
of the business area’s net sales in 2016. In emerging markets, organic sales increased by 3% in 2016.