Essity (ESSITY) Q1 2026 earnings summary

Executive summary

• Achieved organic sales growth of 0.4% year-over-year, driven by higher volumes and increased market shares in branded retail sales.

• EBITA margin excluding items affecting comparability (IAC) rose to 13.9%, up 40bps year-over-year.

• Strong operating cash flow and robust balance sheet maintained, with net debt reduced to SEK 24.5bn.

• Completed major acquisition in North America, doubling personal care sales and contributing 1.1% to net sales.

• Launched a SEK 3 billion share buyback program as part of ongoing capital allocation.

Financial highlights

• Net sales for Q1 2026 were SEK 33,177m, down 5.1% year-over-year due to currency effects; in constant currency, sales increased by SEK 528m or 1.5%.

• EBITA margin excl. IAC improved to 13.9%, with segment margins: Health & Medical 18.4%, Personal Care 15.4%, Consumer Tissue 10.7%, Professional Hygiene 16.1%.

• Operating cash flow reached SEK 4,354m, up 16% year-over-year.

• Net debt at SEK 24,538m, with Net Debt/EBITDA ratio at 0.96.

• Gross margin improved by 60 basis points, mainly from lower COGS and positive FX impact.

Outlook and guidance

• Management expects continued growth in high-return categories, leveraging recent acquisitions and product launches.

• Cost savings from SG&A program to materialize more in H2 2026.

• Pricing actions underway to offset rising input costs, with selective increases already announced in Latin America and parts of Europe.

• Aim to maintain volume growth while compensating for cost increases with price adjustments.