Essity Interim Report Quarter 1, 2025

Quarter 1, 2025 highlights:

Net sales increased 0.4 percent to SEK 34,976m (34,850)
Organic sales growth amounted to 2.1 percent, of which volume accounted for 0.0 percent and price/mix 2.1 percent.
EBITA increased 4 percent to SEK 4,718m (4,523)
EBITA excl. IAC decreased 4 percent to SEK 4,706m (4,880). Excluding currency translation effects, EBITA excl. IAC decreased by 2 percent.
EBITA margin excl. IAC decreased 0.5 percentage points to 13.5 percent (14.0)
ROCE amounted to 16.7 percent (15.9) and ROCE excl. IAC to 16.7 percent (17.2)
Profit for the period, total operations, amounted to SEK 3,083m (11,493)
Earnings per share, continuing operations, increased to SEK 4.43 (3.51). Earnings per share, total operations, decreased to SEK 4.43 (16.21).

After the end of the first quarter, it was announced that Essity’s board of directors had resolved on a new share buyback program for SEK 3bn beginning on April 24, 2025.

CEO’S COMMENTS

Essity began the year with positive organic sales growth in all business areas, stable profitability and continued strong cash flow. In these turbulent times, Essity’s strength becomes clear – with production close to our customers and consumers, we deliver leading hygiene and health solutions that are needed every day.

Higher sales and a strong product portfolio:

All business areas reported positive organic sales growth for the first quarter of 2025 compared to the same period in 2024. Growth was primarily driven by higher prices. In Health & Medical and Consumer Goods, volumes were higher, while volumes were lower in Professional Hygiene, mainly due to lower demand in North America.

During the quarter, we achieved product superiority of above 70 percent, meaning that customers and consumers rate Essity’s products as the best in the market for more than 70 percent of the company’s offerings. This is the highest percentage to date and the increase is the result of our latest product launches.

Stable profitability and strong cash flow:

Earnings (EBITA excl. IAC) were slightly lower, mainly due to the higher cost of goods sold while higher sales prices increased earnings. EBITA margin excl. IAC was lower compared with the first quarter of 2024 but higher compared with the fourth quarter. Cash flow continued to develop strongly, mainly due to the robust earnings, and the company’s financial position is good.

New share buyback program:

The share buyback program that began in June 2024 was completed during the quarter, resulting in approximately 10 million shares being repurchased for SEK 3bn. The Annual General Meeting in March 2025 resolved to cancel own shares, which also took place after the end of the first quarter. The aim is to continue buying back shares as a recurring part of Essity’s capital allocation, and on April 23 the Board of Directors resolved on a new SEK 3bn program, beginning on April 24, 2025.

Limited impact from trade tariffs:

Essity has sales in approximately 150 countries, but we expect that the changed trade tariffs will only have a limited impact on the company. Our production is close to our customers and consumers, with approximately 70 production facilities worldwide. For the parts of our operations that are nonetheless affected, we are reviewing our flows and actively striving to optimize our production and supply chain.

Looking ahead:

We remain committed to our ambition to accelerate the company’s profitable growth during the year. We will achieve this through value-creating innovation, strong brands, efficiency improvements and by continuing our successful sustainability work.

Magnus Groth, President and CEO

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