Win in chosen geographies and categories
We aim to hold a number one or number two position in the geographies and product categories where we choose to operate. We compare ourselves with the best competitors in each product category in each geographic market and aim to perform better or in line with the best competitor. Essity is the global market leader in Incontinence Products under the TENA brand and in Professional Hygiene under the Tork brand. Essity also has strong brands and market positions in Baby Care, Feminine Care, Medical Solutions and Consumer Tissue under such brands as Jobst, Leukoplast, Libero, Libresse, Nosotras, Regio, Saba, Tempo, Vinda and Zewa.
Essity has a clear priority for which geographic markets it wants to operate in, and which categories it will offer in these markets. Sales are conducted in approximately 150 countries. In approximately 90 of these, Essity holds the number one or two position in at least one product segment. We prioritize investments and growth in market positions where profitability is high. By focusing on innovation and improving and expanding our customer and consumer offering, we strengthen our market positions and brands. Innovation and product launches are important for improving our price and product mix, and increasing our sales. Investments could, for example, take the form of innovation initiatives, marketing activities and upgrades of machines or new machines.
Addressing weak market positions
During the year, Essity continued work to address weak market positions with inadequate profitability. In, for example, Incontinence Products in North America, actions taken have led to continued profitability improvements, while organic sales have also increased. The hygiene business in India was discontinued in 2017 because of Essity’s assessment that profitability could not be achieved within a reasonable time frame.
Launch of Lotus Baby in France
Essity’s Lotus brand holds a strong position in consumer tissue in France. In 2017 we also launched Baby Touch diapers and wet wipes under the Lotus brand in the country.
Essity aims to increase the emerging markets’ percentage of net sales and earnings, since these markets’ potential for growth is higher because market penetration of hygiene and health products is lower than in the mature markets. We are prioritizing growth in selected emerging markets such as China, Southeast Asia, Latin America, Eastern Europe and Russia, where we have strong market positions. In 2017, the emerging markets’ share of net sales was 35% and organic sales in emerging markets increased 5.3% during the year.
Consumer Tissue in Mexico
In recent years, Essity’s Regio brand has grown into what is now a market leader in consumer tissue in Mexico. To further enhance the product offering of high-quality tissue under the Regio brand and to increase the efficiency of production, while securing capacity for future growth, a decision was taken in 2017 to invest in tissue production in one of our facilities in Mexico.
Expanding the customer offering
To broaden our product categories and strengthen market positions, we work continuously to improve and expand our customer and consumer offering. For example, Essity offers wet wipes, skincare products and soap. Expanding the customer offering is also about providing service and solutions to customers and consumers.
Acquisition of BSN medical
The acquisition of BSN medical, a leading medical solutions company that develops, manufactures, markets and sells products within wound care, compression therapy and orthopedics, was closed in 2017. The business is included as the product segment Medical Solutions in our Personal Care business area and occupies leading market positions in a number of attractive medical solutions product categories. The acquisition creates a new growth platform for Essity in a new area with future potential for industry consolidation. Essity’s incontinence business, with the globally leading TENA brand, shares similar positive market characteristics, customers and sales channels with Medical Solutions, which provides opportunities for accelerated growth through cross-selling.