Essity (ESSITY) Q1 2026 earnings summary

Executive summary

• Achieved organic sales growth of 0.4% year-over-year, driven by higher volumes and increased market shares in branded retail sales.

• Profit margins improved, with EBITA margin excluding IAC rising to 13.9% (up 40bps year-over-year), and strong operating cash flow maintained.

• Completed major acquisition in North American feminine care, contributing 1.1% to net sales and doubling personal care sales in the U.S.

• Launched a SEK 3 billion share buyback program, with new and recurring programs announced to run until at least the 2027 AGM.

• Transitioned to a new organizational structure with four business units: Health and Medical, Personal Care, Consumer Tissue, and Professional Hygiene.

Financial highlights

• Net sales for Q1 2026 were SEK 33,177m, down 5.1% year-over-year due to currency effects; in constant currency, sales increased by SEK 528m or 1.5%.

• Organic sales growth was 0.4%, with volume up 1.1% and price/mix down 0.7%; the North American feminine care acquisition added 1.1%.

• EBITA margin excluding IAC improved to 13.9%, with segment margins: Health & Medical 18.4%, Personal Care 15.4%, Consumer Tissue 10.7%, Professional Hygiene 16.1%.

• Operating cash flow reached SEK 4,354m, up 16% year-over-year.

• Net debt at SEK 24.5 billion, with net debt/EBITDA ratio at 0.96.

Outlook and guidance

• Expect higher COGS and SG&A in Q2 2026 due to salary inflation and IT costs; cost savings from SG&A program to materialize more in H2 2026.

• Pricing actions and selective price increases underway to offset rising input costs, especially in Latin America and parts of Europe.

• Management expects continued growth in high-return categories, leveraging recent acquisitions and product launches.

• Long-term margin target remains above 15%.