Essity Reports First Quarter 2025 Results: Sales Growth and Strong Cash Flow

Essity's Q1 2025 Financial Report

Essity, a leading global hygiene and health company, has released its interim report for the first quarter of 2025, showcasing solid performance with notable growth in net sales and strong cash flow. The report indicates that net sales rose by 0.4% to SEK 34,976 million, compared to SEK 34,850 million in the same quarter of the previous year. Organic sales growth reached 2.1%, with price increases substantially contributing to this achievement, while volume growth remained static.

In terms of profitability, the company’s EBITA increased by 4%, amounting to SEK 4,718 million, compared to SEK 4,523 million in Q1 2024. Despite some pressures on margins due to rising costs, EBITA margins excluding items affecting comparability (IAC) experienced a slight decrease, falling to 13.5% from 14.0%. This was attributed primarily to the higher cost of goods sold, although the increase in sales prices helped to offset these impacts somewhat.

A significant highlight from the report includes the profit from total operations for the period, which amounted to SEK 3,083 million, significantly down from SEK 11,493 million in the previous year. Earnings per share saw a modest increase in continuing operations, rising to SEK 4.43 from SEK 3.51. Nonetheless, total operations reported a decrease in earnings per share from SEK 16.21 to SEK 4.43.

CEO's Insights

In a comment regarding the results, Magnus Groth, Essity's CEO, noted that the company kicked off 2025 with positive organic sales growth across all its business lines, bolstered by stable profitability and substantial cash flow. Groth emphasized the importance of resilience during turbulent economic times, expressing confidence in Essity's ability to deliver essential hygiene and health solutions that consumers rely on daily.

Groth highlighted that all business areas reported positive organic growth compared to Q1 2024, with health and consumer goods leading the charge. However, the professional hygiene segment experienced reduced demand, particularly in North America, resulting in lower volumes. Despite this, the company achieved an impressive product superiority rating, with over 70% of its offerings ranked favorably by customers—indicating strong market competitiveness.

A Commitment to Shareholders

One of the most noteworthy announcements in the report includes the initiation of a new share buyback program totaling SEK 3 billion, set to begin on April 24, 2025. This follows the completion of a previous buyback program in June 2024, which successfully repurchased about 10 million shares, demonstrating Essity’s commitment to returning value to its shareholders.

Furthermore, Groth reassured stakeholders that the potential impacts of recent trade tariff changes are expected to be limited, thanks to the company’s proximity to key customer bases and its extensive network of production facilities worldwide, which stand at around 70.

Looking ahead, Essity remains focused on accelerating profitable growth throughout the year through innovation, maintaining strong brand equity, improving operational efficiency, and continuing its sustainability initiatives. The company’s positive trajectory and proactive approach are reassuring as it navigates the evolving market landscape.

Upcoming Presentation

To provide further insights into these results, Groth and Executive Vice President and CFO Fredrik Rystedt will host a live presentation and teleconference at 0900 CET on April 24, 2025. Interested parties can access the presentation via a dedicated link provided in the report.

In conclusion, Essity's performance in Q1 2025 underscores its strategic initiatives and readiness to tackle challenges, positioning the company for continued progress in the health and hygiene sector.