Organic growth and sequentially higher margin in a weak economy
STOCKHOLM, July 17, 2025 /PRNewswire/ --
Quarter 2, 2025
- Net sales decreased 6.6% to SEK 34,185m (36,617). Excl. currency translation effects, net sales increased SEK 699m.
- Organic sales growth amounted to 1.9%, of which volume accounted for 0.2% and price/mix 1.7%
- EBITA decreased 12% to SEK 4,628m (5,237)
- EBITA excl. IAC decreased 13% to SEK 4,693m (5,398). Excl. currency translation effects, EBITA excl. IAC decreased 4%, corresponding to SEK 211m.
- EBITA margin excl. IAC amounted to 13.7% (14.7)
- ROCE amounted to 16.7% (17.9) and ROCE excl. IAC to 16.9% (18.5)
- Profit for the period, total operations, amounted to SEK 3,053m (3,333)
- Earnings per share, total operations, amounted to SEK 4.39 (4.72)
- A new SEK 3bn share buyback program was launched on April 24, 2025
- Ulrika Kolsrud assumed her role as new President and CEO on June 1, 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
Invitation to presentation
President and CEO Ulrika Kolsrud and Executive Vice President and CFO Fredrik Rystedt will present the interim report at a live webcast and teleconference at 09:00 CET on July 17, 2025.
Link to the live presentation, which can also be viewed afterwards:
https://essity.videosync.fi/2025-07-17
Contact information for conference call with the possibility to ask questions:
UK: +44 (0) 33 0551 02 00
USA: +1 786 697 35 01
SWE: +46 (0) 8 505 204 24
Please call in well in advance of the start of the presentation. Indicate: "Essity".
For additional information, please contact:
Fredrik Rystedt, Executive Vice President and CFO, tel: +46 (0) 8 788 51 31
Sandra Åberg, Vice President Investor Relations, tel: +46 (0) 70 564 96 89
Per Lorentz, Vice President Corporate Communications, tel: +46 (0) 73 313 30 55
NB: This information is such that Essity Aktiebolag (publ) is obligated to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. This report has been prepared in both Swedish and English versions. In case of variations in the content between the two versions, the Swedish version shall govern. The information was submitted for publication, through the agency of Karl Stoltz, Public Relations Director, at 07:00 CET on July 17, 2025.
This information was brought to you by Cision http://news.cision.com
https://news.cision.com/essity/r/interim-report-quarter-2--2025,c4208087
The following files are available for download:
https://mb.cision.com/Main/15798/4208087/3583270.pdf | Essity Report ENG |
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