(Reuters) -Swedish hygiene products maker Essity reported third-quarter earnings above market expectations on Thursday, citing organic growth driven by higher prices, and said it was launching a cost
Essity Unveils Cost-Cutting Plan After Surpassing Earnings Expectations
Essity's Financial Performance and Future Plans
By Vera Dvorakova
Earnings Overview
(Reuters) -Essity reported third-quarter earnings above market expectations on Thursday, citing organic growth driven by higher prices, and said it was launching a cost-cutting programme that would include splitting up its consumer goods business.
Cost-Cutting Measures
The Swedish hygiene products maker is targeting 1 billion Swedish crowns ($106.2 million) in annual savings by the end of next year. That plan will include an unspecified number of job cuts and a split of Essity's Consumer Goods division into separate tissue and personal care units, it said.
Market Challenges and Consumer Behavior
Essity's much larger U.S. peer Procter & Gamble is also undergoing restructuring that will include cutting about 7,000 jobs over the next two years.
"Our efforts to drive growth and reduce costs have yielded results and the third quarter developed favourably in continued challenging market conditions," CEO Ulrika Kolsrud said in the earnings report.
Essity's adjusted operating profit before amortisation (EBITA) fell slightly to 5.06 billion crowns in the third quarter, but exceeded the 4.86 billion crowns analysts polled by LSEG were expecting.
Adjusted EBITA margin rose to 14.6%, versus 13.7% in the second quarter of 2025.
Essity, like many consumer goods companies, has been hiking its selling prices to cover rising costs after a period of price cuts, even as some shoppers seek cheaper alternatives for daily essentials to save cash.
The maker of consumer brands from Lotus paper towels to Libresse feminine products raised its price/mix, a metric indicating the selling price of its products, by 0.7% in the third quarter compared to the same period last year.
"We do see some down trading, especially in Consumer Tissue, where the consumers are more price-sensitive," Kolsrud told Reuters. These consumers tend to turn to private labels and lower-cost products when on tight budgets, she said.
Essity's Professional Hygiene division, which sells napkins and paper towels to restaurants, also saw reduced demand in the hotel and restaurant sector over the past two quarters.
($1 = 9.4155 Swedish crowns)
(Reporting by Vera Dvorakova in Gdansk; Editing by Milla Nissi-Prussak)
