Essity AB’s Leadership Shift: Can Ulrika Kolsrud Turn the Tide for a Struggling Hygiene Giant?

Essity AB, the Swedish multinational behind brands like TENA and Tork, has appointed Ulrika Kolsrud as its new President and CEO, effective June 1, 2025. The move comes amid a period of stagnation for the hygiene and health solutions provider, with investors questioning whether internal continuity or fresh leadership could breathe life into its lackluster performance.

Kolsrud, a 28-year Essity veteran, brings deep institutional knowledge to the role, having led the company’s Health & Medical division since 2019. Under her stewardship, that division achieved 2.1% volume growth in Q1 2025 through price/mix improvements, a standout performance amid broader underperformance. Yet the appointment has raised eyebrows: the board’s rejection of external candidates and delayed decision-making process have fueled skepticism about whether Kolsrud’s tenure will prioritize bold innovation or reinforce the status quo.

A Company in Transition

Essity’s challenges are manifold. Q1 2025 results revealed a mere 0.4% rise in net sales to SEK34.98 billion, missing consensus estimates by SEK1.2 billion. Margins also contracted, with EBITA excluding IAC dropping to 13.5% from 14.0% in the prior year. The steepest blow came from the North American Professional Hygiene division, which accounts for ~30% of sales, where weak B2B demand sent shares plunging 7.02% on April 24.

Investors are now asking whether Kolsrud can reverse these trends. The board’s emphasis on her “engaging and positive leadership style” and her role in driving strategic priorities—such as customer focus, innovation, and operational excellence—suggests a focus on continuity. But the market has already spoken: since its 2017 spin-off from SCA, Essity’s stock has returned just 36%, lagging far behind the Stockholm Stock Exchange’s 100%+ rise.

The Path Forward: Growth, Margins, and Sustainability

Kolsrud inherits a company at a crossroads. To succeed, she must:

1. Revive North American Professional Hygiene: The division’s collapse in Q1 underscores execution gaps in a critical market. Kolsrud’s ability to stabilize this segment—and replicate the Health & Medical division’s success—will be pivotal.
2. Boost Innovation and Profitability: The board’s mandate to “accelerate innovation” must translate into tangible products and margin improvements. With EBITA margins now at 13.5%, restoring them to 14%+ is non-negotiable.
3. Leverage Sustainability as a Competitive Edge: Essity’s recognition on CDP’s “A List for Climate” in April 2025 is a positive signal. Investors will watch for progress in areas like geothermal-powered production and plastic waste reduction, which could differentiate the company in an ESG-conscious market.

Risks and Skepticism

The appointment carries risks. Kolsrud’s lack of external experience may limit her ability to introduce transformative strategies, especially as rivals like Kimberly-Clark and Procter & Gamble invest in digital tools and sustainability. Meanwhile, the board’s SEK3 billion share buyback program and dividend hike to SEK8.25 per share signal confidence, but these moves alone won’t address the core issue: Essity’s inability to sustain top-line growth.

Conclusion: A Make-or-Break Year

Kolsrud’s tenure will hinge on whether she can deliver three things: margin recovery, a turnaround in North American sales, and innovation that resonates with consumers and investors. The clock is ticking:

• Margin Target: Restore EBITA to 14%+ by early 2026.
• Sales Growth: Reverse the 0.4% Q1 sales increase to at least 3–4% annual growth.
• Market Confidence: Turn the stock’s 7% Q1 decline into a sustained rebound.

If Kolsrud succeeds, Essity could reclaim its position as a hygiene leader. Fail, and the board may face calls for a more drastic leadership overhaul. For now, the market’s verdict is clear: continuity alone won’t be enough.

In a sector where sustainability and agility are paramount, Kolsrud’s blend of institutional knowledge and fresh strategic vision will need to prove itself—or Essity risks becoming a footnote in the hygiene industry’s evolution.