Report for quarter 4 and full-year 2025

Increased market shares and high profitability ended 2025

Quarter 4, 2025

• Net sales decreased 8.2% to SEK 34,695m (37,805).
  Excl. currency translation effects, net sales decreased SEK 400m.
• Organic sales growth amounted to -1.1%, of which volume accounted for -0.2% and price/mix -0.9%
• EBITA increased 9% to SEK 5,005m (4,585)
• EBITA excl. IAC increased 3% to SEK 5,117m (4,969). Excl. currency translation effects, EBITA excl. IAC increased 12%, corresponding to SEK 594m.
• EBITA margin excl. IAC increased 1.6 percentage points to 14.7% (13.1)
• ROCE increased to 17.6% (15.8) and ROCE excl. IAC increased to 18.0% (17.1)
• Profit for the period, total operations, increased to SEK 3,224m (2,893)
• Earnings per share, total operations, increased to SEK 4.69 (4.13)

Full-year 2025

• Net sales decreased 4.8% to SEK 138,494m (145,546).
  Excl. currency translation effects, net sales increased SEK 1,354m.
• Organic sales growth amounted to 0.9%, of which volume accounted for 0.0% and price/mix 0.9%
• EBITA increased to SEK 19,503m (19,475)
• EBITA excl. IAC decreased 4% to SEK 19,572m (20,344). Excl. currency translation effects, EBITA excl. IAC increased 3%, corresponding to SEK 586m.
• EBITA margin excl. IAC increased 0.1 percentage points to 14.1% (14.0)
• ROCE increased to 17.2% (16.9) and ROCE excl. IAC amounted to 17.2% (17.6)
• Profit for the period, total operations, amounted to SEK 12,718m (21,048)
• Earnings per share, total operations, amounted to SEK 18.37 (29.83)
• The Board of Directors proposes an increase in the dividend of 6% to SEK 8.75 per share (8.25)

CEO’S COMMENTS

A quarter with increased market shares, high profitability, growth in strategic segments, acquisition and strong cash flow ended 2025. Organic sales growth for the full-year was positive and the margin increased. This demonstrates the strength of our portfolio of leading hygiene and health products that people need, regardless of the state of the economy or world. Meanwhile, we are focused on increasing the growth rate going forward and are now executing on launched initiatives to faster achieve our Group targets.

Increased market shares

Strong product launches, selective price adjustments and intensified marketing activities yielded higher market shares during the quarter for more than 65% of our branded sales in the retail trade. High growth was reported in several of our strategic segments, including strong brands such as TENA for men, Hydrofera® advanced wound care, Tork Peakserve® dispensers and Saba® night towels. However, organic sales for the Group decreased in the quarter compared with the preceding year. The decline was mainly attributable to price adjustments. The volume and product mix remained relatively stable in a continued challenging market environment.

Higher margins in all business areas

The gross margin improved as a result of lower costs of goods sold and good price management. An increased marketing spend resulted in higher sales and administration costs. All three business areas reported higher EBITA margins excl. IAC. We reported a margin of 14.7%, profit of more than SEK 5bn and a strong cash flow.

Acquisition in Feminine Care in North America

During the quarter, we took an important strategic step by acquiring Edgewell’s feminine care business in North America, including the Carefree, Stayfree and Playtex brands. With this acquisition, which is expected to close in the first quarter of 2026, we are building a stronger Personal Care business in North America in line with our strategy to focus on categories with high potential for profitable growth in attractive geographies.

A stable 2025 and proposal to increase dividend

In 2025, Essity delivered net sales of SEK 138bn and profit of SEK 19.6bn. We grew our sales organically and reported our highest margin in five years, 14.1% year-on-year. We achieved all of this in a year marked by a turbulent external environment and challenging market conditions. The stable cash flow has enabled us to maintain our strong financial position, allowing us to invest in growth while providing returns to shareholders. The second SEK 3bn share buyback program was launched in April and the Board of Directors now proposes an increase in the dividend of 6% to SEK 8.75 per share.

Change to support faster growth rate

Even though we are proud of our strong performance in 2025 given the market situation, we have a clear ambition to accelerate our progress toward our financial targets. During the year, we strengthened our customer and consumer offerings with relevant innovations, made an acquisition and took action to further enhance Essity’s competitiveness and increase our market shares. The new organization featuring decentralized decision-making is effective as of January 1, 2026, and the cost savings program in sales and administration has been initiated. These measures aim to strengthen the focus on our customers and consumers, increase our operational flexibility and invest in profitable growth for an even stronger Essity moving forward.

Ulrika Kolsrud, President and CEO

Invitation to presentation

President and CEO Ulrika Kolsrud and Executive Vice President and CFO Fredrik Rystedt will present the report at a live webcast and teleconference at 09:00 CET on January 22, 2026.

Link to the live presentation, which can also be viewed afterwards:

https://essity.videosync.fi/2026-01-22

Contact information for conference call with the possibility to ask questions:

UK: +44 (0) 33 0551 02 00

USA: +1 786 697 35 01

SWE: +46 (0) 8 505 204 24

Please call in well in advance of the start of the presentation. Indicate: “Essity”.

For additional information:

Fredrik Rystedt, Executive Vice President and CFO, tel: +46 (0) 8 788 51 31
Sandra Åberg, Vice President Investor Relations, tel:  +46 (0) 70 564 96 89
Per Lorentz, Vice President Corporate Communications, tel: +46 (0) 73 313 30 55

NB: This information is such information that Essity Aktiebolag (publ) is obligated to make public pursuant to the EU Market Abuse Regulation. This report has been prepared in both Swedish and English versions. In case of variations in the content between the two versions, the Swedish version shall govern. The information was submitted for publication, through the agency of Karl Stoltz, Public Relations Director at 07:00 a.m. CET on January 22, 2026.

This report has not been reviewed by the company’s auditors.