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Essity’s Interim Report Quarter 3, 2025
CEO’s Comments: Our efforts to drive growth and reduce costs have yielded results and the third quarter developed favourably in continued challenging market conditions. In parallel, we are today launching measures aimed at creating better conditions for profitable growth – an organizational change and a cost savings program. Positive organic sales growth Organic growth was positive compared with the third quarter of the previous year, mainly driven by higher prices. Volumes and product mix also contributed positively. All business areas reported positive organic growth. Growth remained strong in Incontinence Products Retail, Feminine Care and Medical Solutions. However, Consumer Tissue noted negative growth, driven by lower volumes in Europe. In Professional Hygiene, Baby Care and Incontinence Health Care, we reported a positive volume development compared with the first half-year, although markets remained challenging. Strengthened margins The company’s gross margin improved as a result of higher volumes and prices, in addition to lower costs of goods sold, including cost savings. We have reduced sales and administration costs compared with the second quarter of this year, and are delivering a strengthened margin of 14.6 percent, profit of more than SEK 5bn and strong cash flow. Market-tailored innovation Innovation is the main driver of growth for the company and our launches are tailored to the situation of our customers and consumers. One example is the launch of TENA ProSkin Stretch Day & Night, a new unique incontinence product that is easy to put on and take off, making it easier for both the patient and healthcare professionals. The product helps reduce the cost of continence care, which is especially relevant in the light of tight healthcare budgets. “Today, I am launching measures that create better conditions for Essity to increase its growth rate going forward.” Measures to increase growth rate With the aim of increasing our growth rate, and considering the current economic climate, we are launching a number of measures today to faster achieve the company’s financial targets: We are making an organizational change that will decentralize decision-making and strengthen end-to-end accountability for each product category. A simplified structure with a more well-defined allocation of responsibilities enhances the company’s customer and consumer focus, while increasing our speed, agility and operational efficiency. The change also facilitates increased strategic focus on the categories with the greatest potential for profitable growth. In parallel, a cost savings program is launched, mainly encompassing sales and administration costs excluding marketing costs. The program is expected to generate annual cost savings of approximately SEK 1bn, with full effect by the end of 2026. The organizational change will contribute to reducing costs. The savings will mainly be invested in profitable volume growth. This program is in addition to our annual savings in costs of goods sold of SEK 0.5–1bn. These measures will contribute to our goal of reaching more people with our leading hygiene and health products, capturing market shares and maximizing the potential of our product portfolio. Ulrika Kolsrud, President and CEO |
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