Essity has announced a net sales decrease of 18.3% to SEK27,528m in its Q1 results, but said it expects improved market conditions resulting from vaccination rollouts to boost demand in several product categories.
Organic net sales declined 9.9%, negatively impacted by the Covid-19 pandemic, related restrictions and lockdowns and the stockpiling of products in the first quarter of 2020.
Market shares increased in many of the company’s sectors over the past 12 months and e-commerce sales increased 14%, accounting for 13% of net sales.
Emerging markets accounted for 39% of net sales and organic net sales increased 4.2%.
Operating profit before EBITA decreased 31% to SEK3,664m while profit for the period was SEK2,552m compared with SEK3,610m a year ago.
Essity also boosted its presence in Australia, New Zealand and the Pacific region after entered into agreement with Australian hygiene company Asaleo Care to acquire the remaining 63.8% shares in the company.
It is now the largest shareholder with a holding of 36.2% of the shares.
Essity has also acquired 44% of the Colombian hygiene company Productos Familia, increasing its presence across the Latin America market.
It also boosted its medical solutions offering after agreeing to acquire the remaining 25% shares of Swedish medical solutions company ABIGO Medical.
In its Consumer Tissue division, price hikes were announced following the impact of higher raw material costs.
The price increases were in the mid to high single digits and the main impact of the increase is expected in the second half of 2021.
Essity is also preparing price increases in other product categories impacted by higher raw material costs.
It added that it expects to see improved market conditions resulting from ongoing vaccination programmes, following which it expects to increase demand for several of its product categories.
In particular, it noted an increase in demand in its Professional Hygiene sector in North America during the first two weeks of April 2021.
And following the recovery in China, it said that sales were “significantly higher” during the first quarter of 2021 compared with the first quarter of 2019.
