#Sweden #financial results #Stockholm #Essity #sales report

Introduction

Essity, a leading global hygiene and health company, has released its interim report for the first quarter of 2026. Despite a decrease in net sales, the company has reported significant positive trends in volume growth and margins. The report provides insights into the company's performance, strategic acquisitions, and future plans.

Key Financial Results

In the first quarter of 2026, Essity's net sales decreased by 5.1%, totaling SEK 33,177 million, down from SEK 34,976 million. Notably, when excluding currency translation effects, net sales actually increased by SEK 528 million. Organic sales growth stood at 0.4%, driven by an increase in volume of 1.1%, although the price/mix factor had a negative impact of -0.7%.

The quarter also marked the completion of Essity’s acquisition of Edgewell's feminine care business in North America, which positively contributed 1.1% to the company’s net sales.

Essity reported an EBITA of SEK 4,448 million, a decrease of 6% compared to the previous year, while EBITA excluding IAC saw a smaller decline of 2% to SEK 4,603 million. However, when adjusting for currency effects, EBITA excl. IAC increased by 5%, translating to an additional SEK 236 million. The EBITA margin improved slightly to 13.9%, compared to 13.5% the previous year.

Profit for the period reached SEK 2,901 million, down from SEK 3,083 million, resulting in earnings per share of SEK 4.23, down from SEK 4.43.

CEO Ulrika Kolsrud announced a new share buyback program totaling SEK 3 billion, set to commence no earlier than May 11, 2026, highlighting the company's commitment to maintaining shareholder value.

Strategic Focus and Future Growth

Positive Volume Trends

Essity has begun the year with an encouraging increase in volumes, especially within its new Personal Care business area. This segment has reported strong performance, primarily attributed to a rise in sales of Incontinence Products and Feminine Care. The Professional Hygiene division also witnessed growth, thanks to strategic initiatives aimed at enhancing volume, coupled with a stable market in North America.

In the Health & Medical segment, sales growth was buoyed by favorable sales trends in Medical Solutions. Conversely, Consumer Tissue experienced a decline, partially due to reduced sales in Private Label; however, proprietary brands continued to perform well during the quarter.

Focus on Innovation

Essity's commitment to innovation is evident in the various product launches that occurred in the quarter. Among the products launched were a new, softer Libero baby diaper, enhancements to parts of the North American TENA range, and coreless household towels under the Zewa brand in Germany. Furthermore, the company strengthened its feminine care offerings by introducing a new range of period pants specifically designed for teenagers, addressing a rapidly growing segment of the market.

Completion of the Edgewell Acquisition

The acquisition of Edgewell's feminine care business is a pivotal growth strategy for Essity. This strategic move nearly doubles the company’s presence in the Personal Care market in North America and includes well-known brands such as Carefree, Stayfree, Playtex, and o.b. The synergy between marketing efforts and high-impact innovations will be vital in enhancing profitability in this segment.

Financial Stability Amid External Challenges

Despite the geopolitical uncertainties present during the first quarter, Essity remains resilient. With a robust portfolio of hygiene and health products, the company is well-positioned to navigate challenges presented by fluctuating economic conditions. Operational flexibility, highlighted by localized supply chains and agile pricing strategies, equips Essity to address market dynamics effectively.

Capital Markets Day

Essity is set to hold a Capital Markets Day on May 7 in Gothenburg, focusing on initiatives that aim to accelerate the achievement of financial targets. CEO Ulrika Kolsrud invites stakeholders to join the presentation, promising insightful discussions on the road forward.

Conclusion

Essity's first quarter of 2026 presents a complex picture with both challenges and opportunities. While net sales have dipped, the upward trends in volume growth, strategic acquisitions, and an unwavering commitment to innovation provide a strong foundation for future success. The company remains focused on reinforcing its market position and delivering value to its shareholders amid a turbulent landscape.