Swedish hygiene products group Essity has reported a marginal rise in its second-quarter core earnings as the initial bulk-buying of toilet paper and other products eased as countries emerged from the lockdown.
Operating profit before amortisation and items affecting comparability grew 1% to SEK 3.78 billion (€360 million) from last year, despite an 11% sales drop as lower pulp and energy costs and efficiency measures boosted the gross margin.
"Sales were negatively affected by the COVID-19 pandemic and related lockdowns as well as inventory adjustments following the stockpiling that took place among consumers and distributors in March 2020," the company said.
Essity is the world's second-biggest maker of toilet paper and handkerchiefs with brands such as Lotus, Edet, Tempo and Vinda. It is the global leader in hygiene products for businesses under the Tork brand, and in incontinence products with TENA.
Essity had warned in April that bulk-buying of toilet paper and other products, which heavily boosted its first-quarter profit, could slow sales ahead and that the pandemic caused uncertainty about future earnings.
Operating profit at Essity, which competes with Procter & Gamble and Kimberly-Clark, came in at SEK 3.64 billion (€350 million), slightly above analysts' average expectations of SEK 3.52 billion, according to Refinitiv data.
"Eventually, the COVID-19 pandemic may lead to increased demand for the company's leading hygiene and health products as a result of increased awareness of the importance of hygiene and health," it said on Monday.
Essity said it had increased its market share in many markets on the back of high delivery reliability and product launches as well as increased activity in digital sales channels.