Operations and structure

Essity divides and reports its operations according to three business areas – Personal Care, Consumer Tissue and Professional Hygiene. Personal Care includes the Incontinence Products, Baby Care, Medical Solutions and Feminine Care product segments. Consumer Tissue includes toilet paper, household towels, handkerchiefs, facial tissues, wet wipes and napkins. Professional Hygiene includes complete hygiene solutions, including toilet paper, paper hand towels, napkins, hand soap, hand lotion, hand sanitizers, dispensers, cleaning and wiping products, Internet of Things sensor technology as well as service and maintenance.

Europe is Essity’s largest market. The Group also holds strong positions in North America, Latin America and Asia. Expansion takes place both through organic growth and acquisitions.

Organization

Essity has the following four business units:

• Health and Medical Solutions, which offers incontinence products in Europe and North America and medical solutions in Asia, Europe and North America.
• Consumer Goods, which offers consumer tissue, baby care and feminine care in Europe, the Middle East and Africa.
• Latin America, which offers consumer tissue, baby care, incontinence products, medical solutions, feminine care and professional hygiene in Latin America.
• Professional Hygiene, which offers professional hygiene in Europe and North America.

In addition to the business units, Essity has established three global units:

• Global Hygiene Category (GHC), with global responsibility for customer and consumer brands and innovation.
• Global Hygiene Supply Tissue (GHS-T), with global responsibility for sourcing, production, logistics and technology in Consumer Tissue and Professional Hygiene.
• Global Hygiene Supply Personal Care (GHS-PC), with global responsibility for sourcing, production, logistics and technology in Personal Care.

The organization has six Group functions: Finance, Human Resources, Sustainability, Legal Affairs, Communications, and Strategy and Business Development. Strategy and Business Development is also responsible for the Group’s Global Business Services (GBS) and IT Services. GBS has global responsibility for providing professional and transactional services in finance, HR administrative support, organization of master data, and office-related support and service to all units within Essity.

In the subsidiary Vinda, a listed Asian hygiene company in which Essity is the majority shareholder, Essity exercises influence via its Board representation.

Events during the year

On April 3, 2017, the Group closed the acquisition of BSN medical, a leading medical solutions company. BSN medical develops, manufactures and sells products within wound care, compression therapy and orthopedics. The purchase price for the shares amounts to EUR 1,394m, and takeover of net debt to EUR 1,321m. Essity has consolidated BSN medical as of April 3, 2017.

On April 5, 2017, the Annual General Meeting of SCA resolved, in accordance with the Board of Directors’ proposal, to distribute all shares in Essity Aktiebolag (publ) to SCA’s shareholders. The Essity Aktiebolag (publ) share was listed on Nasdaq Stockholm on June 15, 2017.

During the first quarter of 2017, the hygiene business in India was discontinued because of the company’s assessment that profitability could not be achieved within a reasonable time frame.

During the year, a decision was taken on restructuring measures in tissue production in the UK and US. Moreover, a decision was made to invest in tissue operations in Mexico and the UK, and Baby Care operations in Europe.

Organization