Leader in an attractive and growing hygiene and health market
Essity is a leading global hygiene and health company. Shifts in global demographics such as population growth, due primarily to a lower infant mortality rate and increased longevity, and higher disposable income point to continued good growth for hygiene and health products. An increased prevalence of chronic diseases and greater life expectancy of people with chronic diseases, also support future growth in the market for health products.
Strong presence in emerging markets
Essity holds a strong position in several key emerging markets, such as China, Latin America and Russia. We are the majority shareholder in Vinda, one of China’s largest hygiene companies. Emerging markets accounted for 35% of Essity’s net sales in 2017. The growth potential for hygiene and health products is substantial in emerging markets where market penetration is significantly lower than in mature markets and where urbanization, infrastructure and the retail trade are evolving rapidly. Increased disposable income leads to higher standards of living and to more people prioritizing hygiene and health. Consequently, demand and market penetration for hygiene and health products are rising in emerging markets.
Leading market positions and strong brands
Essity has sales in approximately 150 countries. We are the global market leader in incontinence products under the TENA brand and in professional hygiene under the Tork brand. In addition, we have strong brands and market positions in the markets for baby care, feminine care, medical solutions and consumer tissue. Essity holds the number one or number two position within at least one product segment in approximately 90 countries.
Essity’s offerings simplify everyday life for millions of people worldwide. Innovations and product launches are a top priority when it comes to delivering increased customer and consumer value, as well as reducing resource consumption in all stages of the value chain. We strive to create market-leading digital products and solutions in hygiene and health. In 2017, we further developed our customer and consumer offering and launched 41 innovations.
Focus on efficiency improvements and cost savings
Essity continuously works to improve efficiency in order to thereby strengthen competitiveness, cut costs and improve earnings. A more efficient value chain can be achieved by streamlining the supply chain and leveraging economies of scale. Improved capital efficiency, lower costs and strengthened cash flow are made possible through efficiency improvements and savings measures, as well as the optimization of capital employed in all parts of the company. Essity has global units, for example, for innovation and brand activities, as well as production, sourcing and logistics, to generate cost synergies and enable efficient resource allocation.
Profitable growth and strong cash flow
Through continuous work to grow profitable market positions, improve or exit underperforming positions, successful innovations and efficiency improvements, Essity has demonstrated profitable growth and strong cash flow.
Between 2014 and 2017, Essity’s net sales increased 24.2%, of which organic sales grew by 10.0%. During the same period, adjusted EBITA1) increased 41% and adjusted EBITA margin1) increased from 10.8% to 12.3%. The company has generated strong cash flow and in 2017 cash flow from operating activities amounted to SEK 12,729m.
1) Excluding items affecting comparability.