First Read Essity: Feedback from CFO virtual sell-side meeting

研报英文原文证据摘录

First Read Essity: Feedback from CFO virtual sell-side meeting

negotiations. Not the first time this has happened.

Suzano x Kimberly Clark market implications: Difficult to know the impact for sure.

From Essity's perspective, the acquisition is not due to consumer tissue being a very

attractive market, but rather being in a captive pulp market, such that pulp continues to

create value. In the markets where Essity competes, there is not any free capacity. Essity's

Branded business is not impacted by the combination, but the private label market

remains more uncertain, so overall: positive in the short term, neutral in the long term.

Essity is a customer of Suzano's.

Health & Medical volume growth: Wound Care over 7% in volume, continues to be

very strong. But H&M volumes held back by Incontinence (60% of the business).

Health & Medical margins: Expect unit cost headwinds in Q3, given the 4-5 months

lag versus oil-price inflation, given processing, inventories. Pricing offsets take longer to

implement.

Professional Hygiene volume growth: Decomposing the Q2 growth, continue to do

very well in Strategic Products. Skincare also did well. Had been the case in previous

quarters as well. For the base assortment (non-system based), launched fighter

products, with selective pricing actions (big change vs Q4 25 and Q1 26). In Essity's

estimate, the world cup and the 250 celebration were not a material benefit.

Consumer Tissue review options: Consumer Tissue very integrated within the

company (production with Prof. Hygiene, commercially with Personal Care), so working

on defining what the separate entity would look like. Will formulate a memorandum

while the process is finalised, and only then would reach out to interested parties. Would

prefer to divest the whole business.