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Hygiene Products Group Essity Eyes Negative Sales Impacts From Pandemic

Swedish hygiene products giant Essity said on Thursday hoarding in March and the fact that many people have been staying at home because of the coronavirus pandemic would negatively impact sales in coming quarters.

Essity said in March it had boosted its output to beyond its normal full capacity to cope with higher demand across markets for most of its products, especially toilet paper, as the coronavirus drove consumers to stockpile.

It said on Thursday sales in March jumped 20% organically from a year earlier. In the full first quarter, growth was 8%.

"Sales in future quarters will be adversely impacted by the stockpiling seen in March and sales in Professional Hygiene will also be negatively impacted by reduced travel, fewer restaurant visits and more people working from home," it said.

Increased Demand

In the long term, however, the pandemic may lead to increased demand for hygiene and health products due to, for example, a greater focus on hand hygiene, it said.

It reported a 67% jump in quarterly operating profit before amortisation and items affecting comparability to 5.33 billion crowns ($528 million), in line with a preliminary reading published April 14.

Essity is the world's second-biggest maker of consumer tissue such as toilet paper and handkerchiefs, under a wide range of 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.

The rival to Procter & Gamble and Kimberly-Clark said the pandemic and related measures to contain it meant uncertainty about future earnings was much greater than normal.

News by Reuters, edited by Checkout. Click subscribe to sign up for the Checkout print edition.

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