Essity has reported organic growth and “sequentially higher margin in a weak economy” in its second quarter results.
Net sales decreased 6.6% to SEK34,185m, while organic sales growth amounted to 1.9%.
Profit for the period, total operations, amounted to SEK3,053m, down from SEK3,333m.
Ulrika Kolsrud, who started her role as the company’s new President and Chief Executive on 1 June, said: “For the second quarter, we achieved a positive organic sales growth and earnings of SEK4.7bn.
“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.”
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, Kolsrud said the company “delivered yet another quarter of positive organic sales growth.”
She added that 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 SEK4.7bn 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
Kolsrud added the company is working to strengthen its 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.
“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.”
She added that since taking on the role, she added: “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.
