Essity AB

Latest Results (28.07.2026):

Essity AB — Quarter 2, 2026: Net sales rose to SEK 35,061m (+2.6% y/y) with organic sales growth of 0.3% (volume +1.4 pp, price/mix -1.1 pp). EBITA was SEK 4,105m (‑11%), and EBITA excl. IAC was SEK 4,685m (flat y/y) with an EBITA margin excl. IAC of 13.4% (down 0.3 pp). Profit for the period was SEK 2,693m (‑12%), earnings per share SEK 3.94 (‑10%); EPS excl. IAC and amortization was SEK 4.82 (+2%). The quarter showed resilient profitability despite cost inflation and weaker Consumer Tissue sales.

Key group financials

Net sales Q2 2026: SEK 35,061m (+2.6%). Organic sales growth: 0.3% (volume +1.4%, price/mix -1.1%). EBITA Q2: SEK 4,105m; EBITA excl. IAC: SEK 4,685m. EBITA margin excl. IAC: 13.4% (13.7% a year ago). Profit for period: SEK 2,693m. EPS: SEK 3.94; EPS* (excl. IAC & acquisition amortization): SEK 4.82.

Profitability & costs

Gross profit margin Q2: 32.6% (‑0.7 pp), gross profit margin excl. IAC 32.6% (‑0.8 pp). Higher distribution and energy costs raised cost of goods sold; savings in COGS of about SEK 160m partly offset this. Sales & admin costs were 19.3% of sales (down slightly), with marketing at 5.3%; sales/admin savings ~SEK 100m. IAC amounted to SEK ‑580m (mainly relating to the cost savings program).

Cash flow and balance sheet

Operating cash flow Q2: SEK 2,790m (up 81% y/y), driven by improved working capital. Net debt at June 30, 2026: SEK 28,462m (increase vs Dec 31, 2025). Net debt/EBITDA excl. IAC: 1.11 (improved from 1.33). Interest‑bearing gross debt: SEK 38,547m. Average debt maturity ~2.8 years.

Capital allocation — share buyback & dividends

New SEK 3bn share buyback program announced; program commenced May 12, 2026. Between May 12 and June 30 Essity repurchased Class B shares for SEK 554m (2,117,242 shares cited earlier in report); holdings at June 30 were 3,357,365 own shares (0.5% of total). Ordinary dividend paid (impact on net cash flow noted).

Business area highlights — Health & Medical

Net sales Q2: SEK 6,918m, organic +3.1% driven by higher volumes and positive price development. EBITA excl. IAC: SEK 1,310m (+13%); EBITA margin excl. IAC 18.9% (improvement from 17.2%). Strong growth in North America and Europe; Medical Solutions and Incontinence Products performed well.

Business area highlights — Personal Care

Net sales Q2: SEK 8,815m (+14% reported, organic +3.8%), driven by Incontinence Products and Feminine Care (volume + favorable mix). EBITA excl. IAC: SEK 1,131m (roughly flat); margin pressure from lower prices and higher marketing and costs related to the North America feminine care acquisition transition.

Business area highlights — Consumer Tissue

Net sales Q2: SEK 10,202m (‑4% reported; organic ‑5.3%). Declines driven by lower volumes and previous price reductions; higher branded volumes in Europe but overall margin and EBITA excl. IAC fell (EBITA excl. IAC SEK 988m, ‑21%). Management has initiated a strategic review of the Consumer Tissue business.

Business area highlights — Professional Hygiene

Net sales Q2: SEK 9,127m (+1% reported; organic +2.1%). Growth driven by higher volumes and premium products; EBITA excl. IAC SEK 1,573m (+3%) and margin expansion helped by stable COGS and lower sales & admin costs.

Items affecting comparability, taxes & H1 2026

IAC Q2 before tax: SEK ‑580m (primarily cost‑savings program). Tax rate Q2: ~24.7%; tax excl. IAC ~25.2%. First half 2026: net sales SEK 68,238m (‑1%), EBITA excl. IAC SEK 9,288m (‑1%), profit for period H1 SEK 5,594m (‑9%), operating cash flow H1 SEK 7,144m (+35%).

Management view & outlook

CEO: Q2 showed higher volumes and resilient profitability despite volatile external environment and cost inflation. Management highlights ongoing efficiency programs, continued innovation (including AI use), the Consumer Tissue strategic review, and expectation of positive effects from the new organizational structure and implemented savings in H2 2026.