Other Group information
The Group’s Parent Company, Essity Aktiebolag (publ), is a holding company with the main task of owning and managing shares in a number of subsidiaries and performing Group-wide management and administrative functions. The company’s corporate registration number is 556325-5511, and the address is: Box 200, SE-101 23 Stockholm, Sweden. In 2017, the Parent Company recognized operating income of SEK 367m (–) and profit before appropriations and tax of SEK 1,681m (–244). The Parent Company was dormant for much of 2016. Capital expenditures totaled SEK 0m (7) during the year. Cash and cash equivalents at year-end amounted to SEK 0m (0).
Research and development (R&D)
Research and development (R&D) costs during the year amounted to SEK 1,239m (1,211), corresponding to about 1.1% of consolidated net sales. R&D is coordinated and conducted from a global perspective. Product development is carried out in close cooperation with the local units, as well as through direct collaboration with customers.
Holdings of treasury shares
Essity Aktiebolag (publ) holds no treasury shares.
Between the listing on June 15, 2017 and December 31, 2017, 453,501 Class A shares were converted into Class B shares. The proportion of Class A shares was 9.1% at year-end.
The Board of Directors proposes a dividend of SEK 5.75 per share or SEK 4,038m. The record date for entitlement to receive dividends is proposed as April 16, 2018.
Environmental impact in Sweden
Essity Aktiebolag (publ) is conducting one operation in Sweden for which a permit is required relating to tissue manufacturing. This operation impacts the environment through emissions to air and water, solid waste and noise.
Essity’s statutory sustainability report, in accordance with the requirements of the Swedish Annual Accounts Act, is found in the chapter Risks and risk management and in the chapter Notes to non-financial information in the Board of Directors’ Report. This sustainability report for Essity Aktiebolag (publ) encompasses the entire Group. More information on non-financial accounting principles can be found in Note H1.
Guidelines for remuneration of senior executives
The Board of Directors has decided to propose to the AGM 2018 the following guidelines for determining salaries and other remuneration for senior executives to apply for the period following the AGM.
“Remuneration of senior executives will be a fixed salary, variable remuneration, additional benefits and pension. Senior executives include the President, the Executive Vice President, Business Unit Presidents and equivalents, and the Central Staff Managers. The total remuneration is to correspond to market practice and be competitive in the senior executive’s field of profession and linked to the manager’s responsibility and authority. Variable remuneration is to be limited and linked to the fixed remuneration, based on performance results in relation to annual and long term established targets. In the event of termination of employment, the notice period should normally be up to two years if termination is initiated by the company, and up to one year, when initiated by the senior executive. There will be no severance pay. Pension benefits should, wherever possible, only include defined premium pension benefits and entitle the executive to receive a pension from the age of 65. Variable remuneration is not pensionable income. The Board of Directors has the right to depart from the established guidelines if there is an individual case with special grounds. The guidelines do not take precedence over compulsory conditions in accordance with labor legislation or collective agreements. Furthermore, they are not applicable to existing contracts.”
For information concerning the company’s application of previously agreed guidelines and information on the company’s calculated expenses for remuneration of senior executives, see Note C3.
Use of non-International Financial Reporting Standards (IFRS) performance measures
In July 2016, the European Securities and Market Authority (ESMA) issued guidelines for reporting alternative performance measures in company financial statements and prospectuses. Alternative performance measures related to performance measures not included within the framework of IFRS. These performance measures have been developed to help users of financial statements, investors and management to analyze the company’s operations, and several of these are generally accepted financial key figures. These alternative performance measures can be found in the Board of Directors’ Report, the financial statements and the notes. A description of the performance measures and how they are used is presented in Note A2, Use of non-International Financial Reporting Standards (IFRS) performance measures.