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Essity - Interim Report Quarter 2, 2025
Quarter 2, 2025
CEO’S COMMENTS For the second quarter, we achieved a positive organic sales growth and earnings of SEK 4.7 bn. The quarter was dominated by a weak economy and an uncertain external environment, yielding limited volume growth. Our stable performance despite challenging market conditions demonstrates the strength of Essity’s broad portfolio of essential solutions for better hygiene and health. Organic growth in a weak economy In Consumer Goods, Incontinence Products Retail and Feminine Care reported strong growth, while the Baby Care market remained challenging with low birth rates and intense competition. Reduced activity in the hotel and restaurant sector resulted in lower demand in Professional Hygiene and, in the healthcare sector, weaker conditions in certain markets negatively affected sales for Incontinence Products Health Care. Despite these challenges, we delivered yet another quarter of positive organic sales growth. Continued sequential improvement in margins The company’s gross margin improved, both compared to the second quarter of 2024 and sequentially, as higher sales prices offset increased costs of goods sold, including trade tariffs. However, the limited volume growth resulted in lower cost coverage, thereby negatively impacting earnings. In addition, both net sales and earnings were negatively impacted by currency translation effects. Overall, we delivered stable earnings of SEK 4.7bn and the EBITA margin excl. IAC continued to improve sequentially. We are continuing to accelerate profitable volume growth through marketing campaigns, intensive customer engagement activities and a clear focus on the value segment. In parallel, we will need to reduce the company’s cost level and enhance efficiency in all parts of the business. Investments for the future Our solutions are necessary regardless of the economic situation and we are working continuously to strengthen our offering across the low-cost – value – premium spectrum to meet the different needs and financial situations of customers and consumers. One example is the upgrades carried out in Consumer Tissue, Cushelle Simply Soft and Lotus Comfort, which were launched last quarter to reinforce the value segment and attract price-sensitive consumers. Aligned with our strategy, we are implementing several initiatives to grow in our most profitable categories in attractive markets. We are seeing good effects of several growth initiatives, for example in JOBST Lymphology, Cutimed Advanced Wound Care, TENA Men, Tork PeakServe and Tork Skin Care. I see significant potential in the company and it is with great enthusiasm that I take on the task of accelerating Essity’s profitable growth together with all fantastic employees.” Increased focus on customers and consumers This is my first interim report as President and CEO. I see significant potential in the company, and it is with great enthusiasm that I take on the task of accelerating Essity’s profitable growth together with all fantastic employees. Since assuming my role, I have focused on broadening my view of the company by seeking external perspectives and spending time out in the organization. It is inspiring to meet so many committed and knowledgeable colleagues and I never cease to be impressed by the strong culture here at Essity. By further strengthening our customer and consumer focus, we will continue to develop and increase our competitiveness in order to grow and gain market share. We currently touch the lives of 1 billion people every day in 150 countries, meaning that 7 billion people have yet to discover our products. We strive to reach more people with our leading hygiene and health solutions, improving the quality of life of those we reach while creating long-term shareholder value. Ulrika Kolsrud, President and CEO |
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