Essity's Q3 2025 Report: Insights on Growth Strategies and Performance

Overview of Essity's Q3 2025 Financial Performance

Essity has released its interim report for the third quarter of 2025, reflecting a complex yet strategic approach to navigating the current market challenges. Overall, the company reported a decline in net sales by 4.5%, amounting to SEK 34,638 million, down from SEK 36,274 million in the same quarter last year. However, when excluding the effects of currency translation, net sales actually showed an increase of SEK 322 million. This highlights Essity's resilience and its focus on organic growth amidst fluctuating market dynamics.

Key Financial Highlights

Despite the reduction in overall sales, key performance indicators demonstrate that Essity is effectively managing its profitability. The company achieved an EBITA of SEK 5,152 million, slightly up from SEK 5,130 million in the previous year. Excluding the impact of income after certain costs (IAC), EBITA was recorded at SEK 5,056 million, which is a decline of just 1% year-over-year. Notably, when currency translation effects are excluded, EBITA increased by 5%, indicative of improved operational efficiency.

Moreover, the EBITA margin, excluding IAC, rose by 0.5 percentage points to 14.6%. This improvement is attributed to enhanced gross margins driven by increased sales volumes and prices, along with cost-saving initiatives that lower the cost of goods sold.

Strong Cash Flow and Profitability

Profit for the period from total operations showed a positive trend, rising to SEK 3,358 million from SEK 3,329 million, effectively translating to a higher earnings-per-share figure of SEK 4.86, up from SEK 4.73. Such strong results have prompted Essity to focus keenly on measures aimed at sustaining profitable growth moving forward.

CEO Ulrika Kolsrud’s Insights

Ulrika Kolsrud, Essity’s President and CEO, expressed optimism regarding the company's outlook. She stated that their strategic efforts to enhance growth and streamline costs have begun to yield results, despite challenges in the marketplace. The CEO emphasized the introduction of new organizational changes alongside a cost savings program to position Essity for profitable growth.

Launch of Growth-Enhancing Measures

To facilitate a more conducive environment for expansion, Essity is implementing critical measures. The company is transitioning towards a more decentralized decision-making model, aimed at boosting accountability and operational efficiency across its various product categories. This restructuring is designed to sharpen the organization's customer-centric approach while enhancing its agility and responsiveness.

In conjunction with this organizational shift, Essity has initiated a cost savings program targeting primarily sales and administration costs, sidelining marketing expenses. With anticipated annual savings of approximately SEK 1 billion expected by the end of 2026, these changes are set to be reinvested into profitable growth initiatives.

Product Innovation Driving Growth

Innovation continues to play a pivotal role in Essity’s growth strategy. For example, the launch of the TENA ProSkin Stretch Day and Night incontinence product illustrates the firm’s commitment to tailor its offerings to meet the specific needs of customers and healthcare professionals. This innovative product simplifies patient care and helps reduce costs associated with continence care, a crucial factor in today's tightly-budgeted healthcare environments.

Positive Organic Sales Growth

For the third quarter, Essity was pleased to report positive organic growth compared to the previous year, primarily supported by higher pricing strategies. While volumes and product mix contributed positively, the company acknowledged that the Consumer Tissue segment faced challenging growth conditions, particularly in Europe. In contrast, sectors such as Incontinence Products, Feminine Care, and Medical Solutions thrived, showcasing strong growth figures.

Looking Ahead

As Essity continues to optimize its operations and respond to market demands, the leadership remains focused on achieving financial targets, expanding market shares, and maximizing its product portfolio's potential. CEO Ulrika Kolsrud remains confident that these newly launched initiatives will position Essity favorably for enhanced growth in the future.

Invitation to Q3 2025 Presentation

Stakeholders are invited to join Ulrika Kolsrud and CFO Fredrik Rystedt for a live webcast detailing the interim report on October 23, 2025, at 09:00 CET. This session will provide additional insights and an opportunity for questions from investors and analysts.

For further information, please contact the Essity investor relations team, who are on hand to assist with any queries regarding the financial report or upcoming initiatives.