#Sweden #Stockholm #Essity #Q2 report #Ulrika Kolsrud

Essity's Quarter 2 Results: A Detailed Look

Essity, a leading hygiene and health company, released its interim report for quarter 2 of 2025, revealing that net sales dropped by 6.6% year-over-year, amounting to SEK 34,185 million compared to SEK 36,617 million in the previous year. Excluding currency translation effects, net sales actually increased by SEK 699 million. This report highlights an organic sales growth of 1.9%, driven primarily by price and product mix changes at 1.7%.

Despite the economic setbacks, the company managed to achieve a positive organic sales growth. The CEO, Ulrika Kolsrud, who took the helm on June 1, 2025, noted that the quarter's performance showcased the strength of Essity’s extensive portfolio that prioritizes health and hygiene solutions, even in uncertain market conditions. The slight growth was mainly supported by robust demand in sectors like Incontinence Products and Feminine Care, while the Baby Care segment faced challenges due to low birth rates and fierce competition.

Financial Performance Analysis

The report also indicated a 12% decrease in earnings before interest, taxes, and amortization (EBITA), bringing it to SEK 4,628 million down from SEK 5,237 million. Adjusted for specific costs, the EBITA declined by 13% to SEK 4,693 million. Moreover, the EBITA margin decreased from 14.7% to 13.7%.

Ulrika emphasized that despite facing a tough external economic environment, the company’s gross margin saw sequential improvement due to higher sales prices balancing out the increased costs of goods sold, which included impacts from trade tariffs. Nevertheless, the limited volume growth translated into lower cost coverage, adversely affecting profit margins. The currency translation effects further added to the complexities of the financial landscape.

Investments for Sustainable Growth

In response to the challenging market, Essity has set in motion strategies aimed at propelling profitable growth. A new share buyback program valued at SEK 3 billion was initiated on April 24, 2025, showcasing confidence in the company's future prospects. The management is also dedicated to optimizing costs and enhancing efficiency across all areas of the business. Noteworthy investments include enhancements in product lines such as Consumer Tissue, Cushelle Simply Soft, and Lotus Comfort, which aim to attract a price-sensitive customer segment.

Outlook and Future Focus

Kolsrud, in her inaugural interim report, expressed her enthusiasm for the company's potential for growth. Her commitment promises to cultivate a stronger customer and consumer focus, which is vital for Essity in its ongoing efforts to develop competitive strengths and capture greater market share. Presently, Essity's products impact the lives of one billion individuals across 150 countries, leaving significant room for growth with seven billion individuals yet to experience their innovative solutions.

Ulrika stated, "I see significant potential in the company, and it is with great enthusiasm that I take on the task of accelerating Essity's profitable growth together with all fantastic employees."

Live Presentation of the Report

For stakeholders and interested parties, a live webcast led by CEO Ulrika Kolsrud and CFO Fredrik Rystedt will present the interim report on July 17, 2025. They will discuss the financial results and answer questions from participants.

In conclusion, despite the challenges posed by economic instability, Essity’s quarter 2 report indicates resilience and a forward-thinking approach under new leadership. The company continues to innovate and adapt, laying the groundwork for sustained growth and enhanced market presence.