Essity's Leadership Transition: A New Era for Hygiene and Health Innovation

Stockholm-based Essity AB (publ) has entered a new chapter with the appointment of Ulrika Kolsrud as its next President and CEO, effective June 1, 2025. Kolsrud’s promotion from her role as head of Essity’s Health & Medical division marks a pivotal shift in leadership for a company poised to capitalize on global demand for hygiene and healthcare solutions. This transition could reshape Essity’s strategic trajectory, with implications for investors watching its stock performance and long-term growth potential.

The Leadership Shift: Experience Meets Vision

Kolsrud’s appointment signals a strategic continuity, leveraging her decade-long tenure on Essity’s Executive Management Team and her deep expertise in its Health & Medical division—a segment that includes leading brands like TENA and Leukoplast. Under her leadership since 2019, this division has grown to encompass 5,000 employees and global markets, including expanded operations in Latin America.

Jan Gurander, Chairman of Essity’s Board, emphasized Kolsrud’s “proven ability to drive profitable growth,” a mandate that aligns with the company’s goal to strengthen customer focus and innovation. Her promotion underscores a focus on internal leadership development, a contrast to the external search processes that often dominate corporate leadership transitions.

Strategic Priorities: Restructuring and Innovation

Kolsrud’s rise to CEO follows a significant 2022 reorganization that split Essity into four business units: Consumer Goods Americas, Consumer Goods EMEA, Professional Hygiene, and Health & Medical. This restructuring aimed to streamline decision-making and prioritize geographic and category-specific growth. Key strategic pillars include:

1. Digitalization and Operational Efficiency: Essity’s creation of a Digital and Business Services unit has centralized tech investments, aiming to reduce costs and enhance agility.
2. Sustainability Integration: A new Global Brand, Innovation & Sustainability unit has embedded environmental and social goals into core operations, aligning with investor demand for ESG (Environmental, Social, Governance) leadership.
3. Talent Development: Kolsrud’s “situational leadership” philosophy, which empowers employees across all levels, positions Essity to retain talent and adapt to evolving markets.

Market Context: Hygiene and Healthcare as Growth Drivers

The global hygiene and healthcare markets are expanding, driven by aging populations, rising healthcare spending, and post-pandemic hygiene awareness. Essity’s Health & Medical division, for instance, benefits from the incontinence care market, projected to grow at a 5.6% CAGR through 2030. Meanwhile, its Tork professional hygiene brands cater to the $23 billion global professional hygiene products market.

Investment Considerations: Valuation and Risks

Essity’s 2024 net sales of SEK 146 billion (EUR 13 billion) reflect its scale, but investors will scrutinize profitability. Kolsrud’s emphasis on “profitable growth” could pressure margin expansion, particularly as input costs and supply chain challenges remain risks.

The company’s valuation is also tied to its ability to execute on innovation. For instance, its TENA line, a leader in incontinence care, faces competition from rivals like Kimberly-Clark and Johnson & Johnson. A sustained focus on R&D—accounting for ~2% of sales in recent years—will be critical to maintaining market share.

Conclusion: A Strategic Bet on Health and Efficiency

Ulrika Kolsrud’s leadership transition positions Essity to capitalize on secular trends in healthcare and hygiene, while addressing operational and competitive challenges. With a restructured organization, a focus on digital and sustainability initiatives, and a proven leader at the helm, the company is well-equipped to drive growth.

Investors should monitor Essity’s ability to convert its strategic priorities into financial results. A successful execution could see its stock outperform peers, particularly if profitability improves and innovation pipelines deliver. With a market cap of approximately SEK 170 billion (as of 2024), Essity’s journey under Kolsrud’s leadership will be a key test of its potential to sustain growth in a dynamic industry.

The path forward is clear: leveraging Kolsrud’s expertise in health and medical solutions, accelerating operational efficiency, and embedding sustainability into its DNA. For investors, this is a long-term bet on a company at the intersection of human well-being and global market demand—a compelling narrative for those willing to ride the wave of healthcare innovation.