Good morning and welcome to Essity's presentation of the Q4 and full-year 2025 results. Here to take us through the highlights, we have our CEO, Ulrika Kolsrud, and our CFO, Fredrik Rystedt.

After the presentation, we will open up for your questions. If you'd like to ask a question, you just have to dial in and press *1.

With that, let's get started. I'll hand over to our CEO.

Ulrika, the floor is yours.

Thank you, Sandra. Also from my side, welcome to this webcast.

The final quarter of 2025 confirms that we are standing strong in a continued challenging market environment. We continue to grow in our strategic segments such as incontinence care, wound care, and premium products in professional hygiene, and we strengthen market shares across our different branded categories.

We're also strengthening our profit margins. Actually, we are strengthening our profit margins in all three business areas in the quarter, and we deliver a stronger result than last year's same quarter.

When it comes to volumes, sequentially, we have stronger volumes, stronger volume in Q4 versus Q3. Looking at quarter over last year's quarter, however, there is a flat volume growth.

That, together with the fact that we are then lowering prices in order to compensate for lower input costs, is resulting in that we are reporting a negative organic sales growth. That underpins the importance of the initiatives that we took last quarter to accelerate profitable growth.

We are now operating in the new organizational setup with decentralized decision-making, with end-to-end accountability, and with even sharper focus on our most attractive categories and segments. We are starting to implement our cost-saving program.

In the quarter, we also strengthen our position for profitable growth by acquiring the Edgewell feminine care business in North America. Now with the brands Carefree, Stayfree, and and Playtex in our bag, we are more than doubling our personal care sales in the US, in line with our focus on high-yielding categories in attractive geographies.

Another key highlight of the quarter is that we again got recognized for our strong sustainability performance. We were awarded we were awarded for the EcoVadis platinum medal, recognizing our sustainability performance, placing us among the top 1% companies worldwide that they are assessing when it comes to sustainability performance.

Also, we have been placed on the CDP prestigious A List. I would say sustainability performance is important in all of our business areas, but not the least in the healthcare sector.

Many of our customers in the healthcare sectors have high ambitions when it comes to sustainability. One good example of that is one of our biggest customers, NHS in the UK.

They continue to pursue ambitious sustainability agenda, even if there's financial pressure with with increasing demand for healthcare and funding under pressure. Speaking about funding under pressure, we talked already last quarter about that we see in some selected markets that there are some cuts in funding, and and we continue to see that, for example, in Indonesia.

That does not, however, prevent us from growing. Quite the contrary, we have a positive organic sales growth in Health & Medical, and we grow volumes both in incontinence care as well as in medical solutions.

If we double-click on medical and medical business, this is the 19th quarter consecutive quarter that we grow the medical business, and we grow in all three therapy areas. A critical success factor behind this good performance in in Health & Medical is of course our strong and unique offers that we have.

We continue to strengthen those offers. In the quarter, we upgraded one of our flagship products in the TENA assortment, the belted TENA Flex product.

This product is specifically easy and ergonomic for caregivers to use on bedridden patients. In this quarter then, we upgraded it with an even better comfy stretch belt.

The elasticity is better, it adapts easier to different body types, and thereby you can use this product for more patients. Also in the quarter, we relaunched one of our unique offers in the advanced wound care assortment, the Cutimed Sorbact product.

In connection with that, we kicked off a new brand campaign for Cutimed on the theme of "Imagine a world where wounds would heal faster." In this campaign, we showcase how our unique offers are helping healthcare to improve patient outcomes and reduce healthcare costs, thereby improving health economic or bringing health economic benefits.

It's of course leveraging these these unique advanced solutions that is helping us and contributing to our performance in wound care and allowing us to gradually strengthen our strengthen our positions in this in this category. Strengthened positions is also the theme if we go to Consumer Goods.

In the quarter, we strengthened our branded market shares in 65% or in more than 65% of our business. This is not only attributed to one of the categories, but it's actually contributing from all different all four categories.

Looking at looking at incontinence care, there we strengthened our market shares, and also it's a fast-growing category. As a result of that, we saw good very good growth in incontinence care.

In feminine care, we were impacted by a one-off, but underlying, we continue to perform very nicely also in this category. That is demonstrated through the market share development that we see.

In fact, in feminine, we grew our market shares in in 80% of our business, and we had also some good records that we that we saw in the quarter. One very exciting of those is that we now in Mexico have 62% market share in feminine care.

As Mexico is one of our most important markets for feminine. Another exciting development in the quarter in feminine was that we we now are back to growth in Knix washable absorbent underwear.

That is thanks to new retail listings, higher prices, as well as product launches. Then if we move to Baby Care and Consumer Tissue, here we saw an organic net sales decline.

This is for the same reasons that we have talked about previous quarters. In baby, we are impacted by the lower birth rates and also the fierce competition that we see and consumers being more price-sensitive than what we have seen before.

In Consumer Tissue, it's the weak consumer sentiment that makes the growth happening mostly in the mid- and low-tier segments, and we also lost some private-label contracts due to pricing. Then it's very encouraging to see that we are growing our branded business both in baby as well as in Consumer Tissue.

That's a testament to the effect of our launches and our marketing activities. They are really paying off.

We continue to have a very high activity level in Consumer Goods. As you can see here on the on the slide, there are many different launches to talk about in the quarter, but in the interest of time, I I have to choose one of them.

I choose to talk about the upgrade of our thin assortment, our thin towels, in feminine care in Latin America. Having thin feminine pads is of course more discreet and comfortable than using thick pads when you when you have menstruation.

Even so, many women actually choose thick pads because they don't fully trust the leakage security of the thinner ones. Now with this upgrade, we are introducing a new core technology that we call Smart Protect that manage even sudden gushes, and thereby increase leakage security.

For that for that benefit, we have two actually two benefits of that. One is of course that we strengthen our superiority even further in this ultra-thin segment in the market, but also that we move consumers from the thicker pads to the thinner pads, which is a benefit because we normally have higher profitability in this segment.

Now the activity level was also very high in Professional Hygiene in the quarter. Here market growth continues to be depressed following the the weak market weak consumer sentiment, and we see that as impacting our our sales.

We are responding to that by continuing to have selective price adjustments, continuing to work with joint sales plans together with our distributors, and also adapting our assortment. In this situation, it's super important to be competitive in all different price tiers.

In the quarter, we launched some what we call volume fighter specifications to make sure that we are we are at the right price point for the customer. We expect this to pay off in the coming quarters, but what has already paid off is really our push in the premium segments.

We continue to see strong growth in our premium segments in Professional Hygiene like Tork Skincare and Tork PeakServe. We also continue to develop these products even further.

In the quarter, we launched an an automated sensor-based dispenser for PeakServe, in addition to the manual one that we have already. That will broaden the relevance of this premium solution in the market.

We are also broadening the relevance of our centerfeed dispenser solutions. The centerfeed dispenser solution allows you to take one sheet at a time, which is more hygienic, and it also it also controls consumption, it's cost-efficient for our customers.

Now in some in some segments, it's more important with design than in others. A good example of that is in restaurants that have an open kitchen.

Then of course you you are very dependent on a good good-looking dispenser. If you see on this picture, the the black, stylish dispenser here is what we launched in the quarter, and that is really a very strong fit into this type of environments.

I would even call it decoration. It's really it's really nice.

Also, we launched a new refill paper with a natural color that also has a lower price point. That is then an excellent choice for those customers who are either either very price-sensitive and/or want to work with their sustainability image.

Now all all of these innovations that I'm talking about, they have two purposes. One is to expand the relevance of of the product, but also of course to drive product superiority.

With product superiority, we mean that it's the the preferred choice by customers and consumers. Looking across categories in 2025, we we reached a record level when it comes to product superiority, and that of course makes us very well-equipped to continue on that positive market share growth that we have seen in the fourth quarter of 2025.

Now after all of this talk about products and innovations, I'm sure you guys want to hear a bit about the figures behind this. Over to you, Fredrik.

Thank you, Ulrika, and I will put a few numbers to what you have been talking about here. As you can see and you've already mentioned it, we actually had in terms of organic sales, a negative development during Q4.

This is basically driven by price decline and a slight volume decline. It's maybe worth noting or perhaps repeating what you said, Ulrika.

We are taking market share, this is very much a market issue. If we actually look at the sequential development of volume, it's always a little bit of seasonality, but nevertheless, you can see that we actually grew our volume sequentially between Q3 and Q4 with just under 2%.

It's a good momentum despite the fact that we have a decline versus Q4 of 2024. Some of you will actually remember that Q4 of '24 was very strong, we also have a bit of difficult comparables.

Now, as before, the volume decline is very much driven by, same as in Q3, our baby business, our Consumer Tissue business, and also Professional Hygiene. These all are leading to the group decline of volumes of -0.2%.

Just really brief, Health & Medical, you've said it, Ulrika. We had a good volume development in both Inco Healthcare and medical.

If you look at the medical area, actually all therapy areas and especially wound care, so that story, you will remember. If you talk about price and mix, largely flat in Health & Medical.

Consumer Goods, Inco really, really doing very well in terms of volume, Inco retail. Feminine is as well.

It's a positive volumes, just under 1% of positive volumes. That is actually despite a fairly weak market in Europe.

Overall, you can say we are growing, but the European market is a bit challenging. Ulrika talked about a one-time issue in feminine, and that is related to an adjustment that we have made of customer rebates in Latin America.

We've increased those, and that has actually impacted sales and the pricing components, and this is why you see a negative organic sales growth for feminine. This is temporary for the quarter.

It will go back to normal in the next quarter. If you actually adjust for that, we've stated that the underlying good growth is good.

What we mean by that is that organic sales growth would have been low single digits, to give you a little bit of perspective. When it comes to baby, again, we are gaining in our branded business in the Nordics, but we are losing, continuing to lose in the rest of the retail branded business in Europe, and overall volumes are down with approximately about 4%.

That's also for the market as a whole, it's not just us, but it is a very competitive market in Europe, and this is also why we are losing volumes. Finally, Consumer Tissue, we're struggling a bit with volume there, -2%, and this is all actually related to private label.

We have talked about this before, there's no news here. We've lost a few contracts on the back of pricing.

Of course, we have always prioritized margin over volume, but of course we don't want to lose volume, we have selectively actually reduced prices in Consumer Tissue, and hopefully that will pay off as we go forward. Ulrika, we've talked about Professional Hygiene, and this is of course still leading to a slight volume loss of about a 0.5%, and there are signs here of at least stabilization of the HoReCa markets.

Here we're hoping for better conditions going forward, but there, time will tell. To summarize maybe for the group, -0.2 in terms of volume, -0.9% in terms of price, and mix is actually flat, so that sums it up a bit.

Then if I go to the margin, you can see that we've actually improved our margins both if you compare it between Q4 of '24 and Q4 of '25 and sequentially. It's not only for the group; it's actually for all the business areas.

Gross profit, as you can see, increasing by 180 basis points, and this is on the back of lower COGS, as we flagged when we talked to you last or after Q3, so that actually happened. We've maintained a very good price management in the quarter, all of that leading to that very good improvements of the gross profit margin.

The COGS reduction is all about I should say raw material, energy. We're proud of that.

We managed, under tough conditions, to reach also our COGS savings of just above SEK 500 million. You will know our target for the year was 500 to a billion, and we said we were struggling to reach that range.

In the end, we actually managed to do that, and that contributed to that margin enhancement. As you can see, and we've said that, we want to fuel our growth.

We want to fuel our innovations that we put on the market, we are spending more in terms of A&P, and that's both percentage of sales-wise and as an absolute number. When it comes to SG&A here, you see that it's actually favorable.

We have reduced, in terms of absolute, also in constant currency, we have reduced our spending in terms of SG&A. This is due to, of course, a tight cost control.

That's not surprising to you. We've reduced our travel, as an example, with more than 30%.

We have a bit of lower bonus accruals, and there is also a bit of one-time here that is positive. It's not as good as you see here; there is a bit of one-time.

If you look at the overall group, there is also positive and negative one-time impacts in the result. Overall, the one-time impacts are balancing off for the group as a whole.

All in all, we're quite proud of our SG&A performance. Let me then just talk a little bit about the SG&A program, the cost-saving program that we have launched previously.

As we're aiming for a run rate saving of 1 billion towards the end of '26. Now we are actually aspiring to reach quite a part of this saving already throughout this year, but that will be more towards the latter part, you can expect more of the savings.

Far, we have realized very, very little, and we've also put fairly little in terms of restructuring charges. We expect the cost of this program to be a bit over 1 billion, approximately 1 billion, SEK 1.1 billion in restructuring charges.

Let me end this part with a little bit of guidance for Q1, as we normally do. We expect actually COGS to be slightly lower, partly from savings, but also a little bit from currency, a positive currency impact in raw material.

Slightly lower COGS, so that is what we expect. We are expecting a slightly higher SG&A, and please remember, I'm now giving you guidance Q1 of '26 versus Q1 of '25.

We are expecting slightly higher SG&A, and this is primarily driven by higher A&P in line with our ambition to fuel growth. Customary, and you know that, we also give you a little bit of guidance for the full year.

We expect CapEx, to start with that, between SEK 8 to 8.5 billion, a bit higher than we had in '25, and this is actually partly phasing and just ambitions to grow as we go forward. We expect other costs, or the corporate costs if you will, to be approximately 1.3, very similar to this year or to 2025.

Structural tax rate to be between 25 to 26%. Then finally, on the COGS savings, we remain with our estimated range of SEK 500 to 1 billion.

Let me move on then to the cash flow side. We're quite pleased with the cash flow here in Q4.

This is driven by obviously a good cash surplus, the margins was good. This was a good operating cash surplus, but we also had good working capital management.

Inventory days came down a little bit, continued to do that, and we had unchanged credit days both in receivables and payables. All fine in terms of working capital.

Net cash flow was also quite strong. This cash flow has driven a continued strengthening, of course, of our balance sheet.

Net debt/EBITDA is approximately 1 here as you can see at the end of the year. We've continued to repurchase shares in line with our program that we launched with SEK 3 billion, and so far, we have purchased 9.2 million shares or totally SEK 2.4 billion.

We're roughly about 80% through this year's program. Let me then finalize with a little bit of overview of 2025.

In many aspects, this was a good year. We had an organic sales growth of 0.9%, and this is despite challenging market conditions.

We actually had growth in all our business areas. We maintained our volumes, and price management remained strong for the entire year.

In terms of margin, we've already talked about that, but it was a very very good year in terms of margin. In fact, if you look at that operating margin of 14.1%, it's the second-highest we've ever had.

It's second only to the artificially high margin during the pandemic that was caused by all the panic buying, for those of you who remember. This is, from an historic perspective, a very attractive margin.

Then turning a little bit to what does that imply, and some of you may have seen from the report that our EPS growth was, if you look at it between 2024 and 2025 in nominal terms, roughly about 1% growth. Now of course the Swedish krona has strengthened a lot, if you actually look at the EPS growth in comparable currencies, you will see a growth of roughly about 8%.

This is quite consistent with the long-term growth of about 6% if we start with the birth of Essity as the first year. Continued good performance, and this is of course on the back of good margins, the growth we've had, and of course also a shrinking finance net as our net debt has reduced.

Finally then, the board has or will propose to the AGM a dividend increase of SEK 0.50 to SEK 8.75. This represents an increase of about 6%.

If you look at, once again, from the birth of Essity, you can say this is consistent with the growth that we've had, roughly about 6% or a total growth of 52%. With those words, leaving over to you, Ulrika.

Yes, thank you, Fredrik. With that, we are leaving a solid 2025 behind us.

We finished the year with stronger market shares, with continued growth in our strategic segments, and not the least, with strengthened profit margins. It's been from an external perspective a quite turbulent year with a lot of geopolitical uncertainty and a weak economy, and that has of course impacted also our industry.

We see that the resilience that we have shown during this is really a sign of strength. As Fredrik has shared, we have grown organically during the year.

We have strengthened our profit margins, and we have now the strongest profit margin in 5 years, and we have delivered a solid result. We are proud over this, but we're also determined to accelerate our profitable volume growth and to speed up our progress towards our financial targets.

Therefore, the initiatives that we've launched earlier than in 2025 with the reorganization, with the cost-saving program, and with the acquisition of the Edgewell feminine care business in North America. We bring those initiatives with us together with then the very strong financial position we have into 2026, where we remain fully committed to our strategy to drive profitable volume growth.

We will do that by first and foremost making sure that we have the customer and consumer at the center in everything we do. We will also do that by continuing on the path to strengthen our market shares and our product superiority.

We will of course integrate the Edgewell acquisition to strengthen our personal care position in North America, and we will implement our cost-save programs, both the COGS cost-save program that Fredrik was talking about, as well as then the SG&A cost-save program, where we have the ambition to reinvest the majority of that into fueling profitable growth. Also, we will fully leverage our new organizational setup with end-to-end accountability, with more decentralized decision-making, and also with even sharper focus on our most attractive parts of our business, so that we can unleash the full power of our fantastic Essity teams and also to make the boat go faster.

Speaking about our fantastic Essity teams, you have the opportunity to meet some of them if you join us in our Capital Markets Day on the 7th of May. We will host that in our Mölndal office in Sweden, which is our largest office, and you don't want to miss the opportunity of hearing more about our strategy to drive profitable growth and to be able to see some of our R&D laboratories in this facility as well as production facility in the neighborhood.

I really hope to see all of you there.

Thank you, Ulrika, and thank you, Fredrik, for that walkthrough. Now we are ready to take your questions.

To ask a question, you need to press *1. I can see already that we have a long list of analysts that want to ask a question, and therefore, I kindly ask you to ask one question at a time so everyone gets a chance.

Ulrika and Fredrik, are you ready to open up for questions?

Yes.

Perfect. We have the first question from Niklas Ekman, DNB Carnegie.

Hi, Niklas.

Hi. Good morning.

Thank you. Can I start asking about kind of your priorities for '26 here?

Obviously, volumes have been weak now for some time, and now you have a couple of quarters with pretty strong margin expansion. How do you view that now in '26?

Are you willing to sacrifice some of that margins in order to restore volume growth, or are you more optimistic maybe about the market now having had some kind of cyclical headwinds that they might turn to some tailwinds in '26, or your thinking there on the mix between organic volume growth and margins and what your priorities are? Thanks.

As we have talked about previous quarters as well as in this quarter, we are doing selective price adjustments in order to fuel volume growth, and also we have the intention to increase our A&P investments. We have seen that the investments that we do in A&P is paying off very nicely, as you saw in the market share development.

That we will do, and then the volume growth will give us operating leverage, and thereby also securing the profit margins. Since we talk about this on how to drive volume growth, I want to mention one thing that we're also very proud of in 2025 that will support volume growth in '26, and that is our innovation delivery in the year.

We increased our share of sales that is generated through innovations, and also the superiority record that I talked about earlier, that shows that we are strengthening our offers to consumers and customers, and that is the base for driving volume growth. Then of course we need to make sure we have the right price positioning and that we support those fantastic offers with A&P investments.

Very good. Thanks.

Do you see any risk of margins, or are you looking at maybe sacrificing some of these strong margins now to accelerate growth, or do you think that you can do both?

Our ambition is to do both. In some areas, of course, when we have selective price adjustments, that will have an impact on margin short term, but in other areas, we have opportunities to go in the other direction.

That is a continuous work that we do to optimize this.

Maybe to add if I may, Niklas, as you are aware of, and we communicated last quarter that the cost-saving program will generate fairly significant savings. Of course, we are aiming to use those funds to actually do what Ulrika was talking about here in terms of fueling growth, both in terms of selective price decline, but also A&P spend.

This is a way to make sure that we can do both, just to emphasize.

Very clear. Thanks.

I'll jump back in the queue.

Thank you, Niklas. Next up is Charles Eden from UBS.

Hi, Charles. Let us hear your question, please.

Hi. Thanks for taking my question.

Excuse me. You mentioned the lower volumes and prices in Consumer Tissue private label.

Are you able to quantify the organic sales decline for that business in Q4? Can I ask whether the continued challenges of this unit makes you reconsider whether this asset is indeed core to Essity going forward, as you concluded at the most recent strategic review of this asset?

Then if I can sneak a clarification question, it's the usual one for me, Fredrik, on the group EBITDA bridge of the SEK 749 million cost of goods sold tailwind in the quarter. Can you help break that down between raw mats, energy, distribution?

I've got the SEK 190 million benefit from COGS savings in Q4 from the press release. Thanks.

If we start with the second question maybe there with the reconsidering, we are continuously looking at our portfolio in evaluating and optimizing our portfolio. Then, Fredrik, maybe you can help on the details of Of course.

private label, yeah, and the private label part.

Charles, we are not giving the details specifically as to the individual components, I'm not going to say that. Of course we've already alluded to that the majority of the decline in volumes of the 2%, or just under 2%, is coming from there.

It's worth noting that the performance or actually EBITA is really, really good with Consumer Tissue private label, and we've always had a bit of volume volatility in Consumer Tissue private label, I don't think you can draw the conclusion that it's a bad business. In fact, it actually is generating quite a healthy margin and good profit.

It's just that for the time being, volume is actually low. Should I answer also you were asking for the breakdown of COGS, right?

Was that your question there, Charles?

Yes, please.

Yeah. The majority was related to raw materials, so that was about two-thirds, give and take.

Then we had energy, how shall I say, more or less the rest. Then if you look at the other COGS, which was basically volume decline or less absorption plus new lines, etc., that was about the same as the cost-saving program, to give you a little bit of indication.

Does that answer your question, Charles?

It does. Thanks, Fredrik.

Thanks.

Thank you, Charles. Then let's move to the next question.

Warren Ackerman from Barclays, please.

Good morning, Ulrika and Fredrik. It's Warren Ackerman here at Barclays.

Could you maybe sort of dive a little bit deeper on the A&P spend? You're talking about the increase to help drive the volume.

My guess is it's going to be funded from the savings, but are you able to say I think it's around 5% of sales at the moment, but how much do you want to increase that by? What is your current A&P mix in terms of online, digital?

How do you measure the returns on that investments? What kind of tools do you have to sort of figure out where and how you allocate that spend?

It sounds like it's going to be a big part of the story for this year, just keen to understand a bit more on the details.

I can answer to some extent today, but I would also then invite you to the Capital Markets Day and talk more about this in detail. Of course we are eager to measure the return of our marketing investments, we do that on a regular basis.

It's by doing research on what we produce, as well as following up that the activation is having the effect that we expect, both when it comes to purchase intent, when it comes to awareness, and at the end of the day, that it's generating the sales and the repurchase that we are expecting. That we do on a continuous basis to make sure that we allocate the investments to where they do the best job for our brands.

That was one question. The other question was more about how much we intend to increase A&P.

We haven't specified that, and of course it's connected also to the innovation that we put on the market because that always has an impact on the A&P spend. Generally speaking, we are of course convinced, and Ulrika, you gave a couple of examples here, that A&P in general is fueling growth and is also profitable.

You were asking there, Warren, about how we actually track profitability, return on market investments that we do. We believe we are reasonably good at it.

It's, of course, as you always know, it's really very difficult to exactly have a scientific way of measuring, but we think we are pretty okay with measuring return of market investment. To allocate where to put it, I think we are doing it reasonably okay.

We can't give you exact answers to your question as to how much or exactly how much the return is; it varies a lot. Generally speaking, we will increase, and we think we know where to increase.

Maybe just to clarify quickly, Fredrik, from a modeling point of view, another way to ask it is of that billion SEK savings, how much of that will be sort of allocated sort of to reinvestment? It's just or maybe another way to ask it is that 5%, how does that benchmark against peers?

From a modeling point of view, do we stick

in 6%, or it's quite a big swing factor, any kind of help would be useful. It's a great question, and of course we got this question last quarter that is this going to impact in the end the EBIT margin or EBIT line, and we said yes, it will, indirectly.

It's not so that we are putting the savings to our income statement or to the EBIT line immediately. We are investing it, and through that return on market investment, we believe that over time, we will both get operating leverage or growth and then, of course, margin enhancement.

It's not all about A&P. It is also about a combination of selective price increases that we partly have already done, but we'll do, and A&P increases.

It's actually both. It's very difficult to give you specific details on exactly where.

It's many different combinations, but over time, we think it will be profitable. Your final question as to how do we compare, quite difficult to answer that.

We are making a lot of benchmarking and trying to kind of adjust for the differences in structures and categories, but I think overall, there is an upside for us to do this.

Got you. Thank you.

Thank you, Warren. Let's continue then with a question from Johannes Grunselius from SB1 Markets.

Hi, Johannes. Good morning, everyone.

I have a question on COGS again, if you can dive in a bit more there. Because, Fredrik, you mentioned here you will have slightly lower COGS year-over-year in Q1.

In Q4, you obviously had a tailwind year-over-year of 749. It's such a huge opex COGS base, maybe you can provide a range or something on the year-over-year tailwind in Q1.

That would be very appreciated, if you can give any indications, please.

We can. Thanks, Johannes, for the question.

We have chosen to guide only on COGS as a totality because understanding all the ins and outs doesn't make things easier to actually grab. We are typically reasonably accurate when it comes to the estimate of the entire COGS number, and this is why we are giving it to you.

As I said, raw material is They're a bit in and out there or positive and negatives, but it's largely going to be a bit positive, as an energy as well, perhaps. If we compare then Q1 versus Q1, we're going to continue to have a little bit of unfavorable volume comparisons.

We're going to have a bit of cost for new lines that we're putting in place in Q1, and then we'll have a bit of cost savings. All in all, this will give a slightly lower cost, the main driver actually still being raw material.

If you think about the main driver of raw material, it's actually mainly favorable FX, actually.

Okay. Can I put the question in this way, if we look at COGS sequentially, are you thinking about more stable COGS or are COGS perhaps up a bit, Q1 over Q4?

It's mainly stable, mainly stable, you can say.

Okay. Oh, that's very valuable to know.

Thank you. Sure.

Thank you, Johannes. Let's move to the next question.

Aron Adamski from Goldman Sachs. Hi, Adam.

Let us hear your question, please.

Hi. Good morning, Ulrika, Fredrik, Sandra.

Thanks for taking my questions. First, I had a follow-up on growth expectations for 2026.

Against the backdrop of lower input cost environment that you highlighted, would you expect price to be negative for the entirety of '26? Given that context, would you expect to achieve a better organic sales growth in '26 than you have done in '25?

Then a second quick follow-up on the A&P discussion. Can you please give us a sense of how the advertising step-up is going to be phased through 2026?

Is it going to be more front-loaded, and therefore, could we expect the margin delivery to be relatively weaker in the first half of the year, given everything you said on volume, price adjustments, and cost savings delivery? Thank you.

I almost forgot the first question. What was the first question again?

Just on pricing expectations for '26.

Oh, yeah, it was pricing and volume expectations. That's true.

We need to be agile and want to be agile when it comes to pricing because it's of course dependent on what happens in the market environment. We are adapting to both, of course, what happens with input costs, but also what happens when it comes to demand and need to adapt to that situation as well as being fully equipped to capture the market growth when the wind is turning.

Therefore, of course there are scenario planning and so on, but to be agile is most important. When it comes to organic growth, yes, our ambition is clearly to move towards our financial target with 3% organic growth, our ambition is to accelerate our growth.

Again, we are in a volatile environment, what is so important for us, and that's why it's so great to see that we are strengthening market shares in this quarter, because when the market is as volatile as it is, what we can focus on a lot is to win the relative game. What we see in the quarter is that we're doing exactly that.

What's also important for us is that we win where it matters the most, and that is to drive our strategic segments. That was an answer to say that we need to stay agile and see what happens in the market and then adapt to that.

Perfect, Aron. Does that answer your question?

Just on the second question on the phasing of margins, I suppose, through 2026. Maybe if you could give us a bit more color on how the step-up in A&P is going to be phased, and how is that going to impact the margin phasing through the year?

Thank you.

Maybe we don't give those kind of detailed guidance as you've seen, Aron, but just maybe as a little bit of still a hint or two maybe even. You can see that Q4, as we have just reported, was higher than Q4 of '24, so that step-up has already actually happened.

If you remember, I mentioned, maybe you weren't participating, but I actually mentioned that we do expect higher SG&A cost in Q1 on the back of higher A&P, this gives you a little bit of hint. We believe that the higher A&P cost will be there immediately, actually already is there higher, if you see the numbers.

Great. Thank you very much.

Thank you, Aron. Now let's move to Tom Sykes, Deutsche Bank.

Hi, Tom. Please let us hear your question.

Morning. Thank you.

Would you be able to say how the A&P-to-sales for you differs by category? Just what are the categories which would have the greatest elasticity to increased A&P spend, please?

Maybe just in addition is what's happening to your trade retail spend? How big is that in the COGS costs, presumably?

Thank you.

If we look at A&P to sales, it's the categories that you find in personal care that has the consumer brands that has the biggest A&P spend in relation to sales, or I should say A&P investment rather, in share of sales. Then if you look at a category like wound care, for example, you have a much lower A&P in relation to sales.

There, it's much more about the sales force and equipping the sales force with the right products and support, and you find that fueling growth is through the sales force. Then we have everything in between there.

Trade spend.

Thank you. In terms of sort of the elasticity, where do you think the best place to allocate incremental A&P is?

Was it just across the board?

This is more about where we have our most attractive segments and categories. We want to invest the most where we have the highest potential for profitable growth and the strongest reason to win.

I think what you've seen here also now is that we have had good effect of investing, for example, in feminine care as well as in incontinence care. We do want to fuel growth across our categories, but that should give you an indication.

I guess, Tom, your question on trade spend, are you referring then to promotional activity there, I guess, right?

I guess it's, yeah, it's that spend that you might spend with retailers

that That is by far Consumer Tissue, traditionally. The promotional the percentage of all products sold on promotion is by far highest in Consumer Tissue.

Okay. That, okay, so that's just sitting in your reduction of your revenues, is it, in It's just that Yes, it's a pricing issue.

You can say there pricing activity, there's strategic kind of headline pricing, and then you've got tactical pricing. Promotion is a tactical, is what you do on a more temporary basis, it's not list price adjustments,

and there Is there not spend that you would do on like the ad on the websites of major retailers to get up the ladder of people searching for particular categories? That wouldn't Or do you just include that in pricing?

No, there is also brand communication and marketing that we do through the retailers or in connection with the retailers. That is one element.

To Fredrik's point, when it comes to price campaigns, that is that you see in the sales.

Good. Just to clarify, does all your, if you like, A&P-type spend, setting aside any promotion and price reductions, does all of that sit in the A&P line, or does some of it sit also in the COGS line because it's trade spend that goes on?

Not in COGS. It's either sales or A&P.

In this case, what you're referring to is A&P. It's not COGS.

I'm not sure how that could be possible, but we can talk about that offline, but it's not in COGS.

Okay.

Understood. Promotion is in sales, and marketing in A&P.

Perfect. Thanks for your question, Tom.

Next question comes from Karel Zoete from Kepler. Hi, Karel.

Can we hear your question, please?

Yes. Good morning.

Good morning, all. I have two questions if I may.

The first one is in relation to M&A. You've done last year one acquisition, but the market is difficult, certainly in places such as Latin America.

What's hindering you from doing more M&A, or why haven't we seen more acquisitions over the last 18 months, given the very difficult markets? Then the second question is more in relation to Asia.

I think there's still an agreement with Vinda that they can use some of your brands. What's the status of this?

Is this going to be renegotiated in the coming year, or do you have plans to build operations yourself selectively to capture some of the growth in the Asian markets? Thank you.

If I start with the M&A question, maybe you can answer to Asia later. We continue to work actively with M&A, identifying potential targets and assessing potential targets.

As it's part of our strategy to grow both organically, but also inorganically. We clearly have the ambition to do value-creating M&As, but we are to that point very disciplined to make sure that they are value-creating.

That is of course always what we're doing in the screening to make sure that that is the case, and always judging what is the most value-creating. Is it organic growth or inorganic growth?

You could argue, of course, when it comes to valuation, that in order to bridge the potential valuation gap, we need to find quite a lot of synergies then to secure that value creation.

The short answer is that we have the ambition to drive more M&As and are working on that actively. Karel, when it comes to Asia, the story isn't really different there.

When we divested Vinda in 2024, there was a license agreement for these brands, and that expires in 2027. Now as we sold the company, we also granted an option for the buyer to continue licensing these brands for also in the future against, of course, a license fee.

That option has not yet been translated into an agreement, and of course we remain unsure on whether that will actually happen. There are two possibilities here.

One is that we continue with a license agreement subject to the buyer actually exercising on that option, or if they don't, then of course we get those brands back in Asia. We cannot give you an answer at this point of time as we actually don't know.

All right.

Thank you.

Thank you, Karel. Let's move then to Mikheil Omanadze, BNP Paribas.

Hi, Misha. What is your question today?

Hi.

Morning. Thank you.

I just wanted to zoom in a bit more on your end-market dynamics, where you already provided some helpful color, and overall it seems that the markets remain challenging. If you were to look at your biggest category geography exposures, where would you say you saw the biggest sequential change from the previous quarter in both positive and negative direction in terms of end-market trends and consumer environment?

Thank you.

I wouldn't say that we've seen any big movements between quarter four and quarter three. It's been quite stable when it comes to market environment.

Very clear. Thanks.

Thank you, Mikheil. Next question comes from Henrik Bartnes from ABG.

Hi, Henrik.

Hi. Thank you.

One question from me, please. You have historically talked about seasonal lower volumes in Q1 compared to Q4.

If we look at Q1 sequentially, how should we think about volumes this year? Are there any indication that this year won't show any seasonal lower volumes?

Thank you.

I can maybe answer. We don't give volume estimates.

We can only report what has historically been the case in terms of seasonality. As you rightly say, seasonality would suggest that volumes in Q1 are lower than Q4.

It's not actually one and the same for all our business areas or categories. Some don't have that, but in general, if you look at the group as a whole, clearly volumes are typically, I should say, lower in Q1 versus Q4, but we are not giving an estimate for '26 specifically.

Okay. That's clear.

Thank you.

Thank you, Henrik. Let's now move on to Celine Pannuti from JPMorgan.

Good morning, Celine. Let us hear your question, please.

Thank you. Good morning, everyone.

My question is coming back on the Consumer Goods performance with price/mix negative. I think you mentioned that you had to roll back some pricing in order to keep some of your customer, I think it was in private label.

Does that mean that going forward, we still have to annualized that and so we'll have continued negative pricing? You also mentioned that there was a one-off impact from Latin America.

If you could give us a bit of an idea on that go-forward. I think we lost you.

Your sound is not working, really, we can't really hear your question. Maybe we can just start with the two questions you have now, because then we have to move on.

Is that okay?

Perfect.

Good.

I think I got the question whether the negative price/mix in Consumer Goods would flow into Q1 and Q2. Was that the question, Celine?

I would presume it annualizes if you have made some pricing concession. Then the question is that in the price negotiation that you are going through now in retail.

Right. No, again, we can't comment obviously price negotiations, that's more commercially relates, can't do that.

Of course, as we have lower prices now in Q3 and Q4, and especially here in Q4, there's been a price decline in Consumer Tissue, that will of course obviously continue into Q2. In short, we'll see those price impacts coming or continuing in Q1 and Q2 potentially.

Just how material is the Latin America impact that you mentioned?

We are not actually giving you the exact number there, Celine, and this is for commercial reasons, basically. I gave you a little bit of guidance.

It's always interesting when you say you're not going to give a number, and then you almost do it anyway. I'll do it because if you look at the -0.6 in terms of organic sales growth for feminine in the quarter, and then we also stated that without that, organic sales growth would have been low single digit.

That gives you a little bit of indication as to the size. This is a bit, of course, for the group, not a lot, but for feminine, it is a bit.

It comes out as pricing. That's temporary.

That will not be there in the next quarter.

Perfect. Thanks for your questions, Celine.

Now we will move to our final question, and that question is from Oskar Lindström, Danske Bank. Good morning, Oskar.

Good morning. Just a slightly different question from me.

Following the Edgewell acquisition and an acquisition by another company, you're not going to be sharing, I understand, the brands Stayfree and Carefree between you. Who owns those brands, and who is paying royalties or fees to whom?

We own the brands in the geographies that we are operating the brands with, so that in those geographies, we can actually then do what we think is commercially right to do with those brands.

In short, no royalties paid to anyone.

Wonderful. That's all the question I had.

Thank you very much.

That's what you wanted to know. Thank you for that interpretation.

Thank you, Oskar, for that question. Now it's time to wrap up.

Before we end, I would like to hand over to Ulrika again for final remarks.

Thank you, Sandra. I think thank you for joining us today.

We are leaving, as I said, a solid 2025 behind us, where I think our resilience has really been a critical success factor, and it's especially great to go into 2026 with this good market share momentum that we have talked about today. Finally, I look forward to see you all on the 7th of May in Mölndal, Sweden.

Yes. Thank you for that, Ulrika, and thanks to you for joining.

If you have any further questions, just reach out. We will be roadshowing in Stockholm today, virtually next week, and we will also be in London next week.

See you there, and take care and have a good rest of the day. Bye for now.