Essity (ESSITY) investor relations material

Executive summary

• Q3 net sales rose 4.1% to SEK 36,060m; organic sales declined 0.3%, with stable volumes and positive product mix.

• Adjusted EBITA was SEK 4,725m, down 7% YoY; margin declined to 13.1% from 14.6%, while operating cash flow reached SEK 5,783m.

• Performance remained resilient amid higher raw-material and energy costs, with priorities on profitable growth, pricing and efficiency.

Financial highlights

• Q3 profit was SEK 2,346m versus SEK 3,358m; EPS was SEK 3.47 versus SEK 4.86. EPS excluding IAC and acquisition-related amortization was SEK 4.92 versus SEK 5.01.

• Gross margin was 30.0% versus 33.5%; gross margin excluding IAC was 31.7% versus 33.4%.

• COGS increased SEK 658m YoY and SEK 510m sequentially; Q3 components included SEK 245m energy, ~SEK 420m raw materials and SEK 75m distribution, partly offset by ~SEK 180m savings.

• Price/mix impact was -0.2%: price -0.5% and mix +0.3%; sequential prices increased across all four business areas.

• Operating cash flow increased 9% to SEK 5,783m; 9M operating cash flow rose 22% to SEK 12,927m.

Outlook and guidance

• Q4 COGS expected to be significantly higher YoY and sequentially, driven by raw materials and energy; no specific Q4 amount was given.

• Pricing will continue to offset cost increases; consumer tissue price recovery typically takes ~two quarters, with further increases and negotiations planned.

• Q4 SG&A excluding A&P expected around the Q4 2025 level or slightly lower, and slightly lower sequentially; savings expected to exceed Q3’s ~SEK 150m.

• Q4 A&P expected slightly above Q3; volume recovery in Health & Medical and Professional Hygiene anticipated, but timing and magnitude remain uncertain.

• Priorities include pricing while protecting market share, cost controls and savings, feminine care acquisition integration, and the Consumer Tissue strategic review.