Essity sales volumes fall 0.1% in third quarter as earnings and margin decline
Key Facts
Essity reported a 0.1% decline in sales volumes in the third quarter of 2026 compared with the same period a year earlier, according to the company's quarterly earnings report, alongside lower earnings and margins. Organic sales also fell, declining 0.3% during the period, despite an increase in reported total sales. Net sales reached 36,060 million Swedish kronor, compared with 34,638 million kronor in the third quarter of the previous year, according to the report. The rise in nominal sales was accompanied by a decline in earnings before interest, taxes and amortisation, excluding items affecting comparability. Those earnings totalled 4,725 million Swedish kronor, compared with 5,056 million kronor in the corresponding period a year earlier.
The margin on earnings before interest, taxes and amortisation, excluding items affecting comparability, fell to 13.1% in the third quarter, according to Essity. The company had reported a margin of 14.6% in the same period a year earlier, with profitability declining despite higher net sales. Profit for the period was 2,346 million Swedish kronor, compared with 3,358 million kronor a year earlier. In contrast to earnings, operating cash flow rose to 5,783 million Swedish kronor in the third quarter, compared with 5,324 million kronor in the corresponding period. The company said in its report that it faced "cost pressures" amid increasing burdens on its operations.
In its operating performance breakdown, Essity attributed the decline in consumer tissue sales volumes primarily to production restructuring in Latin America, according to the third-quarter report. This followed a quarter in which the company recorded sales volume growth, according to its results for the second quarter of 2026. Volume growth was 1.4% year on year at that time, before turning to a slight decline in the latest period. On profitability, the margin on earnings before interest, taxes and amortisation, excluding items affecting comparability, was 13.4% in the second quarter. Third-quarter performance was therefore weaker than the preceding quarter in terms of the direction of sales volumes and the level of the profit margin, alongside their year-on-year declines.
Against the backdrop of the results, Essity had announced an agreement in August 2026 to acquire Kenvue's feminine care business in Brazil, according to the acquisition statement. The agreement set the purchase price at 284 million U.S. dollars for the company's feminine care operations in the Brazilian market. Essity said the agreed price was on a cash- and debt-free basis. Closing remains subject to regulatory approval and the fulfilment of customary closing conditions set out in the agreement. Completion of the acquisition is also contingent on completion of the Kimberly-Clark and Kenvue transaction, according to the terms Essity announced in its statement.
Alongside the acquisition agreement, the strategic review of the consumer tissue business includes an assessment of its future place within Essity, according to the earnings report. As part of the review, the company is considering the option of "separating the business", according to its account of the alternatives under consideration. The assessment also includes retaining the consumer tissue business within the company. Essity expects the feminine care transaction in Brazil to close in the second quarter of 2027, according to the acquisition statement. For upcoming financial disclosures, the company's financial calendar sets 21 January 2027 as the date for announcing fourth-quarter and full-year 2026 results.