#Sweden #Market Growth #Stockholm #Essity #profitability

Essity's Q2 2026 Report Overview

In its recently released report for the second quarter of 2026, Essity has demonstrated a notable increase in net sales, climbing 2.6% to SEK 35,061 million compared to SEK 34,185 million in the previous year. This growth is attributed to higher volumes, strong product offerings, and effective management strategies. Despite facing a volatile external environment characterized by ongoing economic pressures, Essity has maintained its profitability.

Financial Performance Breakdown

Essity reported organic sales growth of 0.3%, fueled primarily by a 1.4% increase in volume, although some price adjustments resulted in a -1.1% decline in price/mix. The company's EBITA for Q2 stood at SEK 4,105 million, a decrease from SEK 4,628 million year-on-year. When excluding items affecting comparability (IAC), EBITA was slightly higher at SEK 4,685 million. The overall EBITA margin fell by 0.3 percentage points to 13.4%.

The return on capital employed (ROCE) declined to 14.0% from 16.7% a year ago, while ROCE excluding IAC was also down slightly to 16.0%. The profit for the period decreased to SEK 2,693 million from SEK 3,053 million in the previous year, and earnings per share reduced to SEK 3.94 from 4.39.

One of the key points for investors was the initiation of a new share buyback program amounting to SEK 3 billion, launched on May 12, 2026. This program is seen as a commitment by Essity to enhance shareholder value.

Strategic Insights from the CEO

CEO Ulrika Kolsrud shared insights on the company's performance, noting that while higher volumes and a better product mix were key factors in achieving sales growth, the context of rising geopolitical tensions and inflation contributed to increased operational costs. Despite these challenges, profitability remained steady, particularly within the Health and Medical sectors, Personal Care, and Professional Hygiene categories.

Significant growth was observed in incontinence products and feminine care segments, while consumer tissue products experienced a downturn due to price and volume decreases. The company is actively working to reverse this trend by securing profitable volumes and increasing prices to manage rising costs.

Innovation and Agility

Innovation was highlighted as a cornerstone of Essity's business strategy, with new product launches reported across all segments. Advances in AI technology are being leveraged to enhance product development speed and efficiency. A new group-wide AI model for procurement was introduced, which aims to streamline operations and elevate data quality throughout the supply chain.

Essity is also optimizing its organizational structure and rolling out cost-saving initiatives to boost resources available for investments in R&D and marketing. This strategic direction seeks to solidify the company's market positions and foster expansion in promising categories.

Looking Ahead

As Essity looks to the future, the company remains dedicated to enhancing its market presence through innovation and strategic growth initiatives, even amid ongoing global uncertainties. In the latter half of 2026, positive trends following its organizational restructuring are anticipated, as well as further efficiency improvements.

Despite the external pressures, including rising costs related to goods and transportation, Essity is committed to managing these challenges through effective pricing strategies. The overarching goal remains clear: strengthening market positions and driving long-term value for all stakeholders.

The Q2 presentation also included a live webcast, where CEO Ulrika Kolsrud and CFO Fredrik Rystedt provided further insights and entertained questions from participants, contributing to transparency and investor engagement.

For more details, access to the full report is available through Essity's investor relations or via the provided link.