Essity Reports Mixed Tissue Performance in Q2 2026 as Consumer Tissue Faces Cost Pressures; Strategic Review Underway

Hygiene and health company Essity reported second-quarter 2026 results showing resilient profitability and higher volumes across most business areas, while its Consumer Tissue division continued to face pressure from lower prices, reduced volumes and rising production costs. The company also confirmed that a strategic review of the Consumer Tissue business remains underway as part of broader efforts to improve long-term value creation.

Group net sales increased 2.6% year-on-year to SEK 35.1 billion, while organic sales growth was 0.3%, supported by volume growth of 1.4%. EBITA excluding items affecting comparability (IAC) totaled SEK 4.69 billion, corresponding to a margin of 13.4%. Operating cash flow improved to SEK 2.79 billion, and a new SEK 3 billion share buyback programme commenced during the quarter.

Consumer Tissue remains under pressure

Consumer Tissue reported net sales of SEK 10.2 billion, down 4% year-on-year. Organic sales declined 5.3%, reflecting both lower volumes and the impact of previous price reductions introduced when raw material costs had eased in earlier periods.

The division reported:

• Organic sales growth: -5.3%

• EBITA excluding IAC: SEK 988 million

• EBITA margin excluding IAC: 9.7%, down from 11.7%

• Gross profit margin excluding IAC: 19.4%, compared with 21.9% a year earlier

• Operating cash flow: SEK 413 million

Essity said higher branded sales volumes in Europe partly offset weaker overall demand. However, profitability was negatively affected by lower selling prices, declining volumes and higher costs of goods sold. The company noted that increased input and transportation costs have not yet been fully offset through pricing.

Management said the Consumer Tissue business is working intensively to secure profitable volumes and implement price increases to counter the latest cost inflation.

Tissue innovation continues

During the quarter, Essity introduced Regio Rinde+ in Mexico, where the Regio brand is the market leader. The new product is a larger toilet paper roll sold individually, designed to provide greater consumer value while strengthening the brand's position in Mexico's important single-roll segment.

Within Professional Hygiene, Essity also launched an upgraded Tork Mini Jumbo dispensing system that improves paper dispensing, reduces waste and simplifies refilling for customers.

Strategic review of Consumer Tissue

A major development during the quarter was Essity's announcement that it had initiated a strategic review of its global Consumer Tissue business area.

According to the company, the review will evaluate strategic alternatives aimed at creating the best possible conditions for both Consumer Tissue and the wider Group to develop to their full potential while maximizing value creation.

Chief Executive Officer Ulrika Kolsrud also confirmed that portfolio optimization remains a priority, highlighting the strategic review alongside the recently completed acquisition in the Feminine Care business.

Other business areas outperform

While Consumer Tissue weakened, the Group reported stronger performances elsewhere:

• Health & Medical achieved 3.1% organic sales growth, supported by higher volumes, particularly in Medical Solutions and wound care.

• Personal Care delivered 3.8% organic growth, driven by Incontinence Products and Feminine Care.

• Professional Hygiene recorded 2.1% organic growth, benefiting from higher volumes and increased sales of premium products.

AI and operational improvements

Essity said artificial intelligence is increasingly being integrated across its operations. During the quarter, AI supported faster product development, while a new group-wide AI procurement solution was deployed to improve purchasing efficiency and data quality. The company also continued implementing its cost-saving programme and new organizational structure aimed at accelerating profitable growth.

Sustainability progress

The company reported that its absolute Scope 1 and 2 greenhouse gas emissions have been reduced by 29% compared with the 2016 baseline over the latest 12-month period. Sustainable innovations represented 79% of innovation activity, and Essity received an "A" Supplier Engagement Assessment rating from CDP for the seventh consecutive year.

Outlook

Essity expects the benefits of its new organizational structure and efficiency initiatives to become more visible during the second half of 2026. Management said geopolitical uncertainty continues to increase costs for raw materials and transportation, and these pressures will be managed through further pricing actions. The company reiterated its intention to strengthen market positions, increase investments in innovation and continue optimizing its portfolio, including the ongoing review of the Consumer Tissue business.