Essity Reports Q3 2025 Results: Growth Amid Challenges and Strategic Changes

Essity’s Q3 2025 Interim Report Overview

Essity, a global leader in hygiene and health products, has released its interim report for the third quarter of 2025, revealing a nuanced performance that underscores both the challenges and enhancements within the company. The report outlines a 4.5% decrease in net sales, totaling SEK 34,638 million, compared to SEK 36,274 million from the previous year. However, excluding the effects of currency translations, the company actually experienced a minor growth in net sales, rising by SEK 322 million.

Amid these figures, there is good news from Essity regarding organic sales growth, which clocked in at 0.9%. This growth stemmed primarily from a strategic increase in prices, with volume contributing 0.2% and the pricing mix accounting for 0.7%. Furthermore, EBITA saw a slight increase to SEK 5,152 million from SEK 5,130 million, although EBITA, when adjusted for items affecting comparability, dipped by 1% to SEK 5,056 million. This reflects a more detailed financial landscape, as the EBITA margin excluding IAC grew by 0.5 percentage points to reach 14.6%.

Interestingly, the company also reported a profit for the period across all operations, which rose to SEK 3,358 million from SEK 3,329 million, alongside an increase in earnings per share, now at SEK 4.86 compared to SEK 4.73 last year.

Organizational Changes and Cost-Saving Initiatives

In response to the current market conditions, Essity is implementing significant organizational changes and launching a cost-saving program, aimed at creating more favorable conditions for profitable growth. The CEO, Ulrika Kolsrud, emphasized that the company will decentralize decision-making, thereby enhancing accountability for each product category. This strategic shift is intended to improve efficiency, customer focus, and speed within the organization.

Essity is also poised to save around SEK 1 billion annually through this cost-saving program, focusing primarily on reducing sales and administration costs, while preserving marketing expenses. The initiated changes are expected to be fully effective by the end of 2026, and the savings generated will mainly be reinvested into profitable growth strategies.

Positive Trends in Specific Product Lines

Encouragingly, all of Essity’s business areas reported positive organic growth, with particularly robust performance in its Incontinence Products Retail, Feminine Care, and Medical Solutions segments. However, the Consumer Tissue segment faced some challenges, primarily related to lower volumes in Europe. Nevertheless, the sectors of Professional Hygiene and Baby Care also exhibited positive volume development compared to the first half of the year, despite ongoing market challenges.

Essity's gross margin improved due to higher sales volumes and prices, as well as a reduction in the cost of goods sold, which complemented ongoing cost-saving efforts. The improved financial metrics point to a company well-positioned to navigate a challenging economic landscape with resilience and strategic foresight.

Focus on Innovation

Essity's growth strategy is heavily reliant on innovation, tailored specifically to customer and consumer needs. A notable example from the report is the introduction of TENA ProSkin Stretch Day & Night, a groundbreaking incontinence product designed for ease of use by patients and healthcare professionals alike. This innovation not only addresses immediate healthcare needs but also contributes to cost reductions in continence care, an area critically affected by tight healthcare budgets.

In summary, while Essity navigates a complex market with mixed results, its proactive measures, innovative product launches, and strategic organizational changes signify a forward-thinking approach committed to achieving higher growth rates. As the company embarks on this journey, all eyes will be on its ability to adapt and thrive in an ever-evolving industry landscape.

Future Engagement

For those interested in further details, President and CEO Ulrika Kolsrud, alongside Executive Vice President and CFO Fredrik Rystedt, will discuss the results in-depth during a live webcast scheduled for October 23, 2025. This presentation aims to provide insights into the company’s future direction and answer any pressing inquiries from investors and stakeholders.