Essity has reported a mixed set of results for the first quarter of 2026, combining modest organic growth and improved margins with a decline in reported sales due to currency headwinds and a challenging global environment.

 

Net sales for the quarter fell by 5.1% year-on-year to SEK 33.2 billion. However, excluding currency effects, sales increased, supported by positive volume development across several business areas. Organic sales growth reached 0.4%, driven primarily by a 1.1% increase in volumes, while price and mix had a negative impact.

 

Despite the decline in reported sales, profitability showed resilience. EBITA decreased by 6% to SEK 4.45 billion, but the EBITA margin excluding items affecting comparability improved to 13.9% from 13.5% a year earlier. The improvement reflects higher volumes, lower raw material costs, and continued pricing discipline.

 

“We started 2026 with a positive volume trend, increased market shares and higher margins,” said CEO Ulrika Kolsrud. “At the same time, we continued our efforts to accelerate growth through acquisitions, innovation, and organizational changes.”

 

Essity’s Personal Care division emerged as the strongest performer in the quarter, delivering organic growth of 4.1%. Growth was fueled by strong demand for incontinence products and feminine care, supported by both higher volumes and improved pricing. The segment also benefited from a favorable product mix and increased market shares across key brands.

 

The company completed the acquisition of Edgewell’s feminine care business in North America on February 2, strengthening its presence in a strategically important market. The acquisition contributed approximately 1.1% to group sales and nearly doubled Essity’s footprint in Personal Care in North America.

Health & Medical and Professional Hygiene also reported positive organic growth of 0.5% and 1.9%, respectively, supported by solid volume trends and stable demand, particularly in North America.

 

In contrast, the Consumer Tissue segment continued to face challenges, with organic sales declining by 3.5%. The decrease was driven by lower prices and weaker volumes, particularly in private label products. While branded products performed better and gained market share, the segment weighed on overall group performance.

Regionally, North America and Latin America delivered strong growth, while Europe recorded a decline, largely due to the weaker performance in Consumer Tissue.

 

The quarter was also marked by heightened geopolitical tensions, including the war in Iran and conflicts in the Persian Gulf region, which have contributed to rising oil and gas prices. These developments are increasing production and transportation costs across industries, including tissue and hygiene manufacturing, while also putting pressure on consumer purchasing power.

 

Essity acknowledged that such external factors are contributing to a more volatile operating environment. However, the company emphasized that demand for its products remains relatively stable due to their essential nature. Its reliance on local and regional supply chains, combined with flexible pricing strategies, is expected to help mitigate the impact of ongoing global uncertainty.

 

Essity’s gross margin increased to 33.5%, supported by lower input costs and operational efficiencies. Operating cash flow rose 16% to SEK 4.35 billion, reflecting improved working capital management.

The company maintained a solid financial position, with net debt declining to SEK 24.5 billion and a net debt-to-EBITDA ratio of 0.96.

 

Following the completion of a SEK 3 billion share buyback program in March, Essity announced a new buyback initiative of the same size, set to begin in May 2026 and run until the 2027 Annual General Meeting.

The company also continued to advance its innovation agenda, launching new products including softer baby diapers, upgraded incontinence solutions, and more sustainable tissue products such as coreless paper towels.

 

Looking ahead, Essity remains focused on driving volume growth, strengthening its market positions, and improving profitability. While geopolitical risks and macroeconomic uncertainty persist, the company believes its operational flexibility and strong portfolio of essential products position it well for continued resilience.