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Essity Reports Strong Resilience in Q3 2026 Financials

Essity continues to demonstrate resilience in its financial performance for the third quarter of 2026, showcasing stable volumes alongside robust cash flow management. The company's latest interim report reveals a 4.1% increase in net sales, reaching SEK 36,060 million compared to SEK 34,638 million in the previous year. Despite these positive indicators, Essity faced some challenges with organic sales growth, which reported a slight decline of 0.3%.

Detailed Financial Highlights

For Q3 2026, Essity reported the following key financial metrics:

• - EBITA decreased to SEK 3,636 million from SEK 5,152 million last year.
• - Excluding items affecting comparability, EBITA rose to SEK 4,725 million from SEK 5,056 million, indicating ongoing operational strength.
• - The EBITA margin thus narrowed down to 13.1% from 14.6%.
• - The return on capital employed (ROCE) translated to 11.9%, down from 17.9%, while ROCE excluding IAC landed at 15.5% compared to the previous year’s 17.6%.
• - The profit for this quarter stood at SEK 2,346 million, down from SEK 3,358 million, resulting in earnings per share of SEK 3.47.

Essity's operating cash flow remained strong at SEK 5,783 million, up from SEK 5,324 million in the prior period, signaling effective cash management operations.

Strategic Developments and Market Positioning

In addition to ongoing financial management, Essity has been active in expanding its market presence, particularly in the feminine care segment. The company announced its agreement to acquire Kenvue's feminine care business in Brazil, which includes well-recognized brands such as Carefree and o.b. This strategic acquisition is anticipated to close in the second quarter of 2027, strengthening Essity's foothold in Latin America, a vital growth market where it has already established a leading position in incontinence products with its TENA brand.

CEO Ulrika Kolsrud commented on the strong performance amidst challenging economic conditions, stating that the company remained focused on enhancing its market standings while navigating through cost pressures. The third quarter also saw Essity implementing price increases across its product lines in response to rising operational costs and delivering cost savings initiatives according to plan.

Market Trends and Category Performances

Integration of strategic business verticals has yielded notable performance across multiple categories. The Health & Medical segment demonstrated commendable organic growth alongside substantial profitability. Incontinence products showed a continuous uptick in sales while medical solutions and wound care segments reported positive results. Conversely, the Consumer Tissue category witnessed a decrease in sales, primarily influenced by production optimization strategies in Latin America and lesser volumes driven by historical price adjustments.

Essity’s Professional Hygiene segment maintained decent profitability despite not achieving satisfactory volume growth. The decline was evident among smaller distributors who felt the brunt of market challenges. Nevertheless, the company successfully expanded its offerings in strategic products facilitating growth among larger clients.

Product Innovations

A key focus for Essity this quarter was the launch of new and improved products, aimed at enhancing its product range and market competitiveness. Notable mentions include the expansion of JOBST® Elvarex® Soft compression garments, meant to expedite access to patient needs. Such innovations align with the company's commitment to addressing healthcare demands effectively.

Looking Ahead

As Essity continues to adapt to evolving market landscapes, its strategic review of the Consumer Tissue division aims at identifying pathways for either separation or cohesion within the essence of Essity. The company seeks solutions that not only elevate the value of Consumer Tissue but also optimize its broader portfolio.

In conclusion, Essity is poised to confront future growth opportunities while navigating current economic challenges by enhancing efficiencies, fortifying market positions, and expanding its product offerings. The upcoming fiscal strategies will aim greater focus towards profitable growth and maximizing value creation for shareholders, paving the way for sustained development in the multifaceted consumer goods market.

Presentation Invitation

Essity invites stakeholders to a presentation led by President and CEO Ulrika Kolsrud alongside Executive Vice President and CFO Fredrik Rystedt on October 22, 2026, at 0900 CEST. Interested participants can join via a live webcast or teleconference. A direct link to the presentation will be provided on Essity’s website.

For those wishing to ask questions during the call, it is recommended to connect beforehand, ensuring a smooth and informative interaction.

Overall, Essity's interim report for Q3 2026 reflects a cautious optimism driven by robust operational strategies and a clear direction toward long-term value enhancement.