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Essity's Plan for Profitable Growth

Essity, a leader in hygiene and health products, has publicly announced an ambitious plan to enhance its conditions for profitable growth. As part of this initiative, the company is set to implement a series of organizational changes and cost-saving programs that aim to optimize its operations significantly.

Organizational Overhaul

Starting from January 1, 2026, Essity will decentralize its decision-making process. This change is aimed at increasing accountability across various product categories, allowing for a more consumer-centric approach. According to Ulrika Kolsrud, President and CEO, the restructuring will enable Essity to sharpen its focus on innovation, marketing, production, and sales within four specific business areas: Health Medical, Personal Care, Consumer Tissue, and Professional Hygiene.

This strategic realignment will not only simplify the corporate structure but will also create clearer responsibilities within business areas, thereby enhancing operational efficiency. Each segment will have dedicated leaders accountable for all aspects of product management, ensuring that the company's strategic initiatives align with the segments that offer the highest growth potential.

Cost-Saving Initiatives

In conjunction with the organizational changes, Essity is rolling out a cost-saving program aimed at achieving annual savings of approximately SEK 1 billion by the end of 2026. This initiative is primarily directed at reducing sales and administrative expenses. Importantly, the marketing costs have been excluded from this scope to ensure that promotional efforts can continue unabated.

The company anticipates that part of these savings will stem from the new organizational structure, enabling reinvestment in profitable volume growth. Presently, Essity is committed to reporting savings generated through this program in addition to the ongoing costs savings associated with goods sold, aligning with their already established target of SEK 0.5 to 1 billion in annual savings.

Leadership Changes

As part of this strategic transformation, there have been significant appointments within Essity's leadership. Tuomas Yrjölä, who had been serving as President of Global Marketing Innovation, will take on the role of President of Personal Care. Volker Zöller, the current President Consumer Goods EMEA, will now lead the Consumer Tissue division. Anand Chandarana and Pablo Fuentes will assume leadership positions for Health Medical and Professional Hygiene, respectively.

These leadership changes reflect Essity's commitment to fostering agile decision-making and innovation directly aligned with market needs.

Looking Ahead

The newly structured organization will be visible in the company's financial reporting as of the first quarter interim report for 2026. The strategic realignment, alongside the cost-saving measures, suggests a pivotal move towards not only enhancing profitability but also accelerating growth rates moving forward.

In summary, Essity's initiative marks a significant shift in how the company operates, moving toward a more accountable and agile structure, while also positioning itself to meet the challenges of modern consumers in the hygiene and health market. With these changes, Essity is setting the stage for a robust growth trajectory that aligns closely with its commitment to sustainability and customer satisfaction.