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The call presented a constructive operational and financial picture: underlying constant‑currency sales growth, broad-based volume improvement, margin expansion, strong cash generation, balance sheet strength and strategic progress on M&A and sustainability. However, near‑term risks were highlighted — notably a reported sales decline from FX, Consumer Tissue softness in Europe, acquisition-related margin drag and expected input cost inflation with lagged P&L effects. Management emphasized pricing agility, ongoing integration and a continued cost‑savings and innovation agenda to protect margins. Overall, positives (organic/volume momentum, margin expansion, cash flow, completed strategic acquisition and share buyback) moderately outweigh the risks tied to commodity cost inflation, integration transition costs and some regional category weaknesses.
Guidance from the call was that Q2 will see higher COGS versus Q2 2025 and higher SG&A (mainly salary inflation and IT), with only small additional offset from the cost‑saving program in Q2; management emphasized they will “rebalance” by implementing selective price increases over time (oil‑based inputs have a c.4–5 month lag) rather than giving a short‑term margin forecast (long‑term EBITDA margin target remains >15%). Practical metrics mentioned: Q1 delivered SEK 4.4bn cash flow (SEK 3.0bn after finance/tax), net debt SEK 24.5bn (net debt/EBITDA ~1.0), reported sales −5.1% (FX), +1.5% in constant currency (organic +0.4%), volume +1.1% (Personal Care +3.5%, Professional Hygiene ~+1.9%, Consumer Tissue ~−0.5%), gross profit margin improvement ~60bp and group margin +40bp, Q1 cost savings ~SEK 130m with full‑year COGS savings target SEK 500–1,000m, energy hedges covering roughly 60% of exposure for the rest of the year, and the Feminine Care acquisition (paid ~SEK 3bn) is expected to be a near‑term margin drag (~10bp group, ~70bp Personal Care) to be recovered via integration synergies.
Reported sales declined 5.1% (driven by a stronger SEK / currency translation) while sales increased ~1.5% in constant currency (roughly SEK 0.5 billion). The acquisition of the North American Feminine Care business contributed ~1.1% of the CC increase and organic sales growth contributed ~0.4%.
Group volume growth of 1.1% in Q1. Personal Care volumes up 3.5% (strong incontinence and feminine care performance), Professional Hygiene volumes up ~1.9% (including >10% growth in Tork PeakServe and +5% Tork Skincare), while Consumer Tissue volumes were slightly down (~-0.5%).
Group margin increased by ~40 basis points in the quarter; gross profit improvement accounted for ~60 basis points (benefitting from lower COGS, positive FX effects and ~SEK 130 million of savings realized in Q1). All business areas except Consumer Tissue strengthened margins.
Seasonally strong operating cash flow of SEK 4.4 billion in Q1 and cash flow after finance and taxes of SEK 3.0 billion. Net debt at SEK 24.5 billion with net debt/EBITDA ~0.96–1.0, supported by a >SEK 3 billion reduction in pension liabilities in the quarter.
Completed acquisition of Edgewell's Feminine Care assets in North America (OB, Playtex, Carefree, Stayfree) effective 2 Feb, more than doubling Essity's Personal Care sales in the U.S.; acquisition is strategic priority and integration work (business continuity, customer engagement, supply chain and brand/innovation synergies) is underway.
Board announced a new share buyback program of SEK 3.0 billion starting 11 May 2026 through AGM 2027; SEK 600 million of buybacks were executed in the quarter, indicating continued shareholder return focus.
Product launches and upgrades include leakproof apparel (new teen range and Smart Protect technology reapplication), upgraded Libero (softer Libero Touch) supporting Baby branded growth and market share gains, and Zewa Wisch&Weg Smart (coreless technology applied to household towels). Branded Consumer Tissue continued to gain market share and grow volumes.
Inaugurated a new biomass boiler at the Kunheim factory (France) covering ~70% of steam needs at the plant, reducing natural gas dependency by >50% and cutting paper-machine carbon footprint by >40% — demonstrating tangible execution on net-zero ambition and improved long-term cost resilience.
Continued strength in Medical Solutions (consecutive growth in Wound Care) and highlighted brand credibility via JOBST compression garments being used by NASA (Artemis II), reinforcing product performance under demanding conditions.
Good morning, and welcome to Essity's presentation of the Q1 2026 results. Here to take us through the highlights of the quarter, we have our CEO, Ulrika Kolsrud, and our CFO, Fredrik Rystedt. After their presentation, you have the opportunity to engage directly with us. [Operator Instructions] Now enough of me, let's get started. Ulrika, please take us through the quarter.
Thank you, Sandra. And also from my side, welcome to this webcast. We started the year with organic sales growth coming from volume growth, and we continued to win the relative game, strengthening market shares in our branded business in retail. We furthermore strengthened our profit margins and delivered a strong cash flow. Then besides these solid results, we had 3 major events in the quarter, the decision to launch a new share buyback program of SEK 3 billion well in line with our ambition to have share buybacks as a reoccurring part of our capital allocation. We also completed our Feminine Care acquisition in North America, now more than doubling our Personal Care sales in the U.S. And we have the organizational change, meaning that we now report in our 4 new business units, Health & Medical, Personal Care, Consumer Tissue and Professional Hygiene. And let's start with Health & Medical, where we continued on our track record of consecutive growth in Medical Solutions.
We were especially pleased in the quarter with the continued good growth in Wound Care across geographies. Q1 was, however, a weaker sales quarter for Incontinence Care in Health Care. Given the financial pressure that we see in health ...