Essity reports net sales increase in Q1 results

Hygiene products group Essity has announced a net sales increase of 10.9% to SEK28,020m in its first quarter results, helped by increased volumes and cost savings.

Compared with the same period a year ago, operating profit before amortisation rose 6% to SEK 2,760m, while the group’s adjusted EBITA increased 7%.

Higher volumes, a better price/mix, cost savings of SEK232m and the acquisition of BSN medical had a positive impact on earnings.

While higher raw material costs had a negative impact of SEK 755m on earnings, the company – which was spun off from SCA in 2017 – said this was partially offset by price increases mainly in consumer tissue in Asia and professional hygiene.

Price increases were also implemented in consumer tissue in Europe during the quarter.

Essity also launched four innovations to strengthen its product offering and increase efficiencies in its consumer tissue and professional hygiene segments.

For its consumer tissue segment, it added that the European market demonstrated “low growth” while the Chinese consumer tissue market noted higher demand.

Net sales for the segment increased 5.1% to SEK 11,003m year-on-year.

In February, the company announced it was restructuring its production facility in Santiago, Chile, to strengthen its presence in the country’s consumer tissue and professional hygiene segments.

In April, it announced it was to restructure its consumer tissue production in Spain, announcing plans to close its production facility in La Riba and close one of its tissue machines at its site in Allo.

It said the move was to further increase production efficiencies, increase cost and capital efficiency, and bolster its efforts in the consumer tissue segment.

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