Swedish hygiene products maker Essity has reported second-quarter core earnings above expectations, citing cost savings, while volumes rose in nearly all of its categories.
The maker of Tork and Libresse brands posted adjusted earnings before interest, tax and amortisation (EBITA) of SEK 5.40 billion (€467 million) for the quarter ending in June, compared to SEK 4.62 billion (€399.8 million) a year ago.
Analysts were expecting EBITA of SEK 4.79 billion (€414 million), according to LSEG data.
Operating Profit
The company said it reported its highest operating profit to date in the quarter.
'The quarter shows the results of our greater emphasis on profitable volume growth based on attractive product offerings, increased investments in sales and marketing, and cost savings,' Essity said in a statement.
Essity's quarterly sales volumes rose by 0.4% compared to a year earlier, reversing a trend after six consecutive quarters of volume losses.
Meanwhile, the Swedish firm's price/mix, a metric that reflects how much it sold its products for, fell by 1.3%.
Consumer goods companies have been increasing prices since the pandemic to combat escalating costs, but premium brands are under pressure due to budget-conscious shoppers seeking better value from unbranded products.
'Better Shape Than Ever'
"Essity is in better shape than ever, reporting strong second-quarter earnings with good underlying growth and its highest operating profit (EBITA) to date," commented Magnus Groth, chief executive (pictured). "All business areas achieved higher EBITA margins compared with the preceding year.
"Favourable long-term market trends, combined with Essity’s successful innovations, strong brands and efficiency efforts, provide us with a platform to continue to increase the company’s value creation going forward."
Additional reporting by ESM
