Essity (ESSITY) Q2 2026 earnings summary

Executive summary

• Achieved positive organic sales growth in Q2 2026, driven by strong volume development in Health & Medical, Personal Care, and Professional Hygiene, despite a volatile geopolitical environment and cost inflation.

• Three out of four business units (Health & Medical, Personal Care, Professional Hygiene) grew; Consumer Tissue faced lower sales and volumes.

• Maintained resilient profitability and margins, supported by cost-saving initiatives and ongoing innovation and marketing investments.

• Strategic initiatives included the integration of the North American feminine care acquisition, a share buyback program, and a strategic review of Consumer Tissue.

• Continued portfolio optimization and digital innovation, including AI-powered solutions and new product launches.

Financial highlights

• Net sales increased to SEK 35.1bn in Q2 2026, up 2.6% year-over-year, with 0.3% organic growth and 1.7% from the North American feminine business acquisition.

• Volume growth: Health & Medical +3.1%, Personal Care +3.8%, Professional Hygiene +2.1%, Baby Care -3%, Consumer Tissue -5.3%.

• EBITA excl. IAC was SEK 4,685m (margin 13.4%), while profit for the period declined 12% to SEK 2,693m.

• Operating cash flow improved to SEK 2.8bn, up 81% year-over-year.

• Net debt/EBITDA excl. IAC at 1.1, with net debt at SEK 28,462m.

Outlook and guidance

• Expect significantly higher COGS in Q3 2026, especially from oil-based materials and energy; price increases already implemented will become visible in Q3 P&L.

• Continued focus on cost reductions, growth investments, innovation, and portfolio optimization.

• SG&A expected to rise year-over-year in H2 due to low Q3 2025 base, IT costs, and inflation, despite ongoing cost savings.

• Strategic review of Consumer Tissue business ongoing, expected to take 6–12 months.

• Committed to annual organic sales growth above 3% and EBITA margin above 15% (excl. IAC).