Essity: Q2 preview: COGS, Comps and Consumer Tissue set to weigh on Q2

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Essity: Q2 preview: COGS, Comps and Consumer Tissue set to weigh on Q2

Equity Research

European Consumer Staples

18 June 2026

Essity

Q2 preview: COGS, Comps and

Consumer Tissue set to weigh on

ESSITYb.ST/ESSITYB SS UNDERWEIGHTQ2

Unchanged

COGS are set to increase in Q2, and with a 1–2 quarter lag European Consumer NEUTRAL Staples

Unchangedbetween cost inflation and pricing, we see any pricing offset

as H2-weighted. Consequently, margins could be squeezed in Price Target SEK 220.00 Unchanged

Q2, with execution on volume growth still uncertain. CT exit Price (16-Jun-26) SEK 264.70

Potential Upside/Downside -16.9%still causing uncertainty to mid term EPS. UW, PT SEK 220.

Source: Bloomberg, Barclays Research

We enter Q2 with a more challenging set-up for Essity, as the cost environment inflects

Market Cap (SEK mn) 180527

from tailwind to headwind. After benefiting from lower input costs in Q1, particularly from

Shares Outstanding (mn) 681.95

favourable pulp and FX dynamics, we now expect a reversal, with higher energy, pulp and

Free Float (%) 88.79

oil-derived inputs feeding through into the P&L. At the same time, pricing actions remain

52 Wk Avg Daily Volume (mn) 1.4

largely in negotiation across most categories and geographies, implying an inevitable lag

Dividend Yield (%) 3.24

before these offsets come through. Looking ahead, COGS pressure is likely to build further

Return on Equity TTM (%) 14.94

through the year, given the lagged impact from both pulp and oil derivatives, alongside

Current BVPS (SEK) 126.56

increasing energy costs. Source: Bloomberg

As a result, we see Q2 as the quarter where margins come under pressure, with little

Price Performance Exchange-STOpricing to offset. The focus then shifts to how much pricing Essity can take in H2 without