#Sweden #share buyback #Stockholm #Essity #SEK 3 billion

Essity’s Share Buyback Program: An In-Depth Look

In a significant move aimed at reinforcing shareholder value, Essity's Board of Directors approved a new share buyback program amounting to SEK 3 billion. The decision follows a mandate from the Annual General Meeting held on March 27, 2025, and marks an important step in the company's ongoing commitment to capital allocation strategy. The buyback program is set to commence on April 24, 2025, and is anticipated to extend until the next Annual General Meeting in 2026 at the latest.

Financing and Objectives

The funding for this share repurchase will be sourced from the cash flow generated through Essity’s current operations, post the distribution of the ordinary dividend. This strategic approach illustrates the company's ambition to maintain a consistent buyback schedule as part of its overall financial strategy. The intent is to enhance shareholder returns while ensuring that the organization continues to operate effectively within its financial means.

Independent Management by BofA Securities

To ensure the program's efficacy, Essity has appointed BofA Securities Europe SA to manage the buyback initiative. Importantly, they will independently determine the timing of the purchases, ensuring that the program is executed outside of Essity's direct influence. This is designed to enhance transparency and integrity in the buyback process.

As per the company's announcement, the repurchase will take place on Nasdaq Stockholm, aligned with the rules and regulations governing issuers. The implementation will adhere strictly to the EU Market Abuse Regulation (MAR) and the rules set forth by the European Commission’s Delegated Regulation 2016/1052, commonly known as the Safe Harbour Regulation.

Acquisitions and Limitations

The share buyback program is structured with specific terms and conditions. Shares are to be purchased within the prevailing market price range on Nasdaq Stockholm, ensuring adherence to fair trading practices. All transactions under this program will be settled in cash, reflecting a straightforward financing approach.

Significantly, the Annual General Meeting has limited the buyback to a maximum of 10% of the total outstanding shares at any given moment. Currently, Essity has a total of 693,054,489 shares, with a breakdown of 58,973,654 Class A shares and 634,080,835 Class B shares. Notably, 782,500 Class B shares are currently held in treasury.

Repurchased shares are expected to be canceled after buyback completion, thereby decreasing the total number of shares in circulation and potentially increasing the value of remaining shares.

Transparency and Reporting

Essity emphasizes transparency in its operations, with weekly updates on share repurchases to be made available on its official website, www.essity.com. This commitment to disclosure is crucial for maintaining investor confidence and market integrity.

In closing, Essity’s SEK 3 billion share buyback initiative reflects a strategic commitment to enhancing shareholder value through disciplined capital management. As the program unfolds, stakeholders will be keenly observing how these purchases impact the company's overall share structure and market perception in the coming years.