Essity (ESSITY) investor relations material

Strategic direction and portfolio review

• Initiated a strategic review of the Consumer Tissue business, assessing alternatives including separation or divestment, with a 6–12 month timeframe for evaluation and a focus on maximizing value creation.

• Accelerating portfolio shift toward higher value-added, higher return products and categories, supported by targeted M&A in Feminine Care, Wound Care, Continence Care, Professional Hygiene, and geographic expansion, especially in North America and emerging markets.

• Emphasis on differentiated innovation, operational efficiency, and value-creating acquisitions to drive profitable growth.

• Triple-track strategy in Consumer Tissue: own brands, retailer brands, and private label, leveraging strong retailer partnerships.

• Decentralized organization with end-to-end accountability and clear financial goals for each business area.

Financial performance and targets

• Achieved a 50% increase in earnings per share since 2021, with 2025 EPS at SEK 18.37; dividend per share up 25% vs 2021, and recurring share buybacks totaling SEK 9bn (2024-2026).

• Group targets: annual organic sales growth above 3% and EBITA/profit margin above 15% (excl. IAC), with clear financial goals per business area.

• Strong financial fundamentals in 2025: net sales SEK 138bn, EBITA margin 14.1%, ROCE 17.2%, net debt/EBITDA 1.0.

• Outperformed peer group in total shareholder return (+10% 2021-YTD 2026 vs -19% for peers) and improved operating margin by nearly 300 basis points.

• Operating cash flow remains strong, supporting a robust balance sheet, ongoing investments, and a cash conversion ambition above 90%.

Business area growth strategies

• Health & Medical targets 3–4% organic sales growth and margins/EBITA above 19%, focusing on high-return segments like incontinence care, advanced wound care, lymphology, compression therapy, and orthopedics.

• Personal Care aims for 5–6% organic sales growth and EBITDA/EBITA margin above 16%, leveraging strong brands, innovation, digital engagement, and North America as a key expansion area.

• Consumer Tissue targets 1–2% organic sales growth and sustainable EBITDA/EBITA margin above 12%, focusing on branded growth, supply chain efficiency, and margin stability, with leading positions in Europe and Latin America.

• Professional Hygiene targets 2–3% organic sales growth and EBIT/EBITA margin above 18%, with innovation, global platforms, emerging markets, and rapid e-commerce growth as drivers.