Acquisitions, investments and divestments

Essity acquires 75% of ABIGO Medical AB

On February 27, 2020, Essity announced that the company had signed an agreement to acquire 75% of the Swedish medical solutions company ABIGO Medical AB. The company as a whole is valued at SEK 900m on a debt-free basis. ABIGO Medical AB develops, manufactures and markets products including the Sorbact® technology, which is a clinically established innovation for advanced wound care. The company has about 170 employees and reported net sales of approximately SEK 403m in 2019. ABIGO Medical AB was a key partner and sub-supplier to Essity. The transaction, which was subject to customary regulatory approvals, was finalized on April 30, 2020.

Essity acquires 100% of Novioscan B.V.

On April 1, 2020, Essity announced that the company is strengthening its offering in incontinence products through the acquisition of the Dutch company Novioscan. The company develops a wearable ultrasound technology that monitors the bladder and enables continence control. The purchase price is approximately SEK 70m on a debt-free basis.

Essity divests partly owned company in Tunisia

On October 21, 2020, Essity announced that the company is divesting its 49% stake in Sancella Tunisia to the other owner Sotupa. Sancella Tunisia offers a range of Essity’s products and brands in Tunisia, Algeria, Morocco, and Libya. Essity will retain a presence on these markets through license and distribution agreements. In 2019, Sancella Tunisia reported net sales ofSEK 575m. The divestment was completed in December 2020 and gave rise to a gain of SEK 29m, which was recognized as an item affecting comparability in the fourth quarter of 2020.

Investment in digital transformation

Essity’s digital transformation will accelerate in the years ahead through a new digital platform. This will further strengthen the Group’s customer and consumer offerings, generate significant cost savings and reduce the need for working capital. This digital investment is expected to amount to approximately SEK 2.6bn. Of this amount, approximately SEK 1.4bn will comprise costs that will be charged to the 2020–2024 period, and SEK 1.2bn will comprise capital expenditures. A positive sales and earnings impact is expected gradually from 2022. In the short term, costs are expected to be offset by savings in other areas. The digital platform will enable automation in all parts of the value chain, simplification and economies of scale, and greater visibility and predictability based on high-quality data collection and advanced analytics.