Essity has reported “record growth and higher sequential profit” in its half-year results.
Year-on-year net sales increased 27.8% to SEK 72,230m, while sales growth including organic sales growth and acquisitions amounted to 19.0%.
Operating profit before EBITA amounted to SEK 4,313m, a drop from SEK6,937m in the year-ago period.
Adjusted EBITA amounted to SEK5,984m, down from SEK7,017m.
The business said “higher costs for raw materials, energy and distribution had a negative impact of 12.4 percentage points on the margin”.
The margin was positively impacted by higher volumes, higher selling prices and a better mix.
In its Consumer Goods division, during January – June 2022 compared with the corresponding period a year ago net sales increased 26.0% to SEK 43,956m.
Sales growth, including organic sales growth and acquisitions, amounted to 16.9%.
In its Consumer Tissue segment, during the period organic sales growth amounted to 15.8% and for the Consumer Tissue Private Label Europe division to 25.1%.
The sales growth was mainly the result of price increases, but volumes were also higher.
The group also implemented price increases, and further increases will be carried out in the second half of 2022.
It said its assets in Russia have been impaired by approximately SEK1.6bn and work has been initiated to exit the Russian market.
Magnus Groth, Essity President and Chief Executive, said the results showed “record growth and higher sequential profit.”
“In a turbulent world, Essity stands strong. We have further strengthened the company through significant price increases, successful product launches, increased productivity and leading sustainability work.
“In July, we announced the acquisition of two companies in leakproof apparel to become the fastest growing company in Intimate Hygiene.”
He added that during the second quarter of 2022, net sales increased 31% to approximately SEK 38bn, while sales growth, including organic sales growth and acquisitions, amounted to 20.6%.
He said: “We implemented significant price increases, while we had higher volumes in all business areas.
“Price elasticity in our categories is low and our brands are strong. Essity’s market shares increased for approximately 50% of branded sales in the retail trade over the past 12 months.
“This was the result of long-term investments in innovation, digitalisation and marketing.”
E-commerce sales increased organically by 25% to around 15% of net sales, while organic sales growth for the group was 17.8%, of which price/mix accounted for 14.1% and volume for 3.7%.
Groth added: “Raw material, energy and distribution costs continued to rise in the second quarter, negatively impacting the adjusted EBITA margin by 12.8 percentage points.
“We offset a large share of this through significantly higher selling prices, a better mix and higher volumes.
“We also continued to improve productivity through increased efficiency in our production facilities, material rationalisations and digitalisation of processes.”