*

Essity launches cost-cutting program targeting annual

savings of

SEK 1 billion

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Price hikes drive Q3 core profit beat

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Company faces consumer down trading in price-sensitive

tissue

market

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Professional Hygiene business sees reduced demand in hotel

and

restaurant sector

By Vera Dvorakova

Oct 23 (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.

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.

Essity's much larger U.S. peer Procter & Gamble ( PG ) 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)