Essity’s business model
Essity’s vision is: Dedicated to improving well-being through leading hygiene and health solutions. Our mission is to sustainably develop, produce, market and sell value-added products and services within hygiene and health.
Our business model and value chain start with innovation and product development. Innovation efforts are based on Essity’s objective to enable more people every day to enjoy a fuller life. Essity’s strength is to transform insight about the needs of customers and consumers into leading products and solutions, whereby sustainability, product quality and product safety are of great importance. For example, raw materials sour-cing is conducted centrally in the company, which generates economies of scale and improves the negotiating position. Essity works throughout the supply chain to guarantee responsible raw material sourcing and subjects its raw material suppliers to stringent demands. We manufacture products and offer solutions in Personal Care, Consumer Tissue and Professional Hygiene. Within technology and production, continuous work is ongoing to digitalize, automate and improve efficiency to achieve sustainable, efficient, world-class production.
Essity has sales in approximately 150 countries and our products are distributed in a number of ways, from small convenience stores in rural areas to supermarkets, hospitals and healthcare centers, restaurants, pharmacies and e-commerce. In 2017 the retail trade accounted for 59% of Essity’s net sales, business-to-business for 24% and the healthcare sector for 17%. To contribute to a sustainable and circular society, there is a need for new business solutions and innovations that close the loop, which are key features of the initial innovation work.
- Approximately 48,000 employees around the world.
- Approximately 90 production facilities.
- In 2017, Essity purchased raw materials and consumables for approximately SEK 38bn. Essity’s main raw materials are pulp, recovered fiber and oil-based raw materials. Energy costs totaled approximately SEK 4bn.
- Essity had a solid investment grade rating.
- Equity at the end of 2017 totaled approximately SEK 50bn.
- Net debt amounted to approximately SEK 52bn.
Value added in 2017
proposed dividend per share
educated in hygiene and health
accident frequency rate
One of Essity’s objectives is to generate long-term value for the company’s shareholders and that the Essity share will deliver a higher total shareholder return than competitors. Value for our shareholders is achieved through a positive share price development and dividends. We aim to provide long-term stable and rising dividends to our shareholders.
- The Essity share was listed on Nasdaq Stockholm in Sweden on June 15, 2017. In the period June 15–December 31, 2017, the share price fell 6%.
- The Board of Directors proposes a dividend of SEK 5.75 per share for the 2017 fiscal year.
Customers and consumers
Essity aims to enable more people every day to enjoy a fuller life. We believe that knowledge is the key to increased hygiene and health standards in the world, at the same time as this creates business opportunities for Essity.
- In 2017, Essity educated more than 2.5 million children, women, men, parents, relatives and caregivers throughout the world in hygiene and health.
- 41 innovations that improved our customer and consumer offerings were launched during the year.
Essity’s success depends upon having motivated, competent and result-oriented employees who show great dedication to developing themselves and the company. Our ambition is that all employees will reach their full potential, and assume personal ownership for driving their own development.
- The health and safety of our employees is a top priority at Essity. During 2017, the accident frequency rate fell 6%. 26 production facilities had zero accidents.
- Essity paid approximately SEK 16bn in salary to its employees in 2017.
Essity aims to contribute to a sustainable and circular society, which entails a need for new business solutions and innovations. Essity contributes to the local economy as a major employer and through its community involvement. We understand the importance of taxes in ensuring the development of society and we comply with the tax rules under which we operate. We also comply with all rules requiring us to provide transparent information about our taxes. Aside from income tax, Essity also pays customs duties, property taxes, payroll taxes, pension taxes and energy taxes.
- CO2 emissions in relation to production level were reduced by 1.3%.
- Essity paid about SEK 3bn in income taxes. Payroll taxes for the year amounted to approximately SEK 3bn.
- Essity invested approximately SEK 16m in just over 300 local community involvement projects.
Essity strives to have transparent, long-term relationships with our suppliers to guarantee both high quality and financial stability for both parties. Our objective for responsible sourcing encompasses all suppliers and our Global Supplier Standard serves as a basis for ensuring that the company’s suppliers meet the highest standards in terms of social and environmental responsibility and product safety.
- During 2017, Essity paid approximately SEK 72bn to our suppliers.
- 64% of our procurement spend was sourced from suppliers committed to the criteria specified in Essity’s Global Supplier Standard.