Breaking Barriers to Well-being
Annual and Sustainability Report 2022
Essity is a leading global hygiene and health company. With brands such as TENA, TENA for Men, Knix, TOM Organic, Libresse, Bodyform, Saba, Nosotras and Modibodi, Essity is a global market leader in the fast-growing leakproof apparel segment. The cover image shows TENA Silhouette Washable Absorbent Underwear.
Essity in brief
Essity is a leading global hygiene and health company. We are dedicated to improving well-being through our products and services. Sales are conducted in approximately 150 countries under the leading global brands TENA and Tork, and other strong brands, such as Actimove, JOBST, Knix, Leukoplast, Libero, Libresse, Lotus, Modibodi, Nosotras, Saba, Tempo, TOM Organic, Vinda and Zewa. Essity is listed on Nasdaq Stockholm.
Health & Medical
of net sales
of net sales
of net sales
Sales in approximately
Net sales, SEKm
Adjusted EBITA, SEKm2)
Adjusted return on capital employed2)
1) Relates to average number of part-time and full-time employees during the year and calculated as an average over five quarters.
2) Excluding items affecting comparability.
3) Including organic sales growth and acquisitions.
Net sales split
By business area
Consumer Goods, 61%
Professional Hygiene, 23%
Three new attractive business areas
As of January 1, 2022, Essity has new business areas: Health & Medical, Consumer Goods and Professional Hygiene. The business areas are aligned with the company’s customer and sales channels and will lead to an expansion of the offerings to new and adjacent categories as well as extended service content on the basis of customer and consumer needs.
A new Group organization was introduced as of December 31, 2022 entailing that Essity has four business units aligned with the company’s business areas. The business units are Consumer Goods EMEA, Consumer Goods Americas, Health & Medical and Professional Hygiene. In parallel, the Global Digital & Business Services unit was established.
Acquisition of company in wiping and cleaning products
In line with Essity’s strategy to grow in wiping and cleaning products in Professional Hygiene, the US company Legacy Converting, Inc. was acquired.
Significant price increases to offset cost inflation
Essity has raised its prices in all business areas as a result of higher raw material, energy and distribution costs.
Further efficiency improvements were achieved through the Manufacturing Roadmap program. The company is continuing to work at a high pace with efficiency improvement and energy saving measures as well as raw material rationalization.
Successful innovation and increased e-commerce sales
Focusing on higher customer and consumer value and reduced environmental impact, Essity launched several successful innovations during the year. Examples include toilet paper from wheat straw under the Zewa brand and a climate-smart diaper under the Libero brand. The Issviva brand has been launched as an innovative global e-commerce platform that provides knowledge and solutions for women experiencing menopause.
In 2022, Essity’s e-commerce sales grew 20% to approximately SEK 23bn, corresponding to approximately 15% of net sales.
A turbulent world
2022 was dominated by the war in Ukraine and the resulting human suffering. Essity has made donations to the UNHCR and other international and local organizations. Work is ongoing to exit the Russian market and the company’s assets in Russia have been impaired by approximately SEK 1.7bn.
World-leader in leakproof apparel through acquisitions
Essity acquired 80% of the Canadian company Knix Wear Inc., a leading provider of leakproof apparel for periods and incontinence. The company has a strong presence in the USA and Canada and mainly conducts online sales direct to consumers. Furthermore, the Australian company Modibodi was acquired, a leader in leakproof apparel in Australia, New Zealand and the UK.
Through these acquisitions, Essity is the global market leader within leakproof apparel1), the fastest growing product segment in Intimate Hygiene, which includes Feminine Care and Incontinence Products.
1) Estimate based on market data compiled by Essity.
Essity has received several awards for the company’s sustainability, for example, it was named one of the world’s most sustainable companies by Corporate Knights – its Global 100 list represents the top 1% of companies in the world in terms of sustainability performance. In addition, Essity has been included in S&P Global’s Sustainability Yearbook 2023 as one of the 100 most sustainable companies.
The non-profit environmental organization CDP has recognized Essity for its leadership in sustainability and Essity was awarded a place on CDP’s A list for its work in combating deforestation. Essity was also recognized as a Supplier Engagement Leader by CDP for its successful work with suppliers in the fight against climate change.
Leader once again in diversity
In the UK business daily Financial Times’ annual ranking of diversity work in European companies, Essity was named Diversity Leader for the second consecutive year.
Partnerships and collaboration for greater well-being
Essity has broadened its partnership with the United Nations Foundation by committing to their #EqualEverywhere initiative to accelerate progress toward achievement of the Sustainable Development Goal of gender equality. A new agreement has been signed between Essity and UNICEF in Mexico to educate and drive awareness of the importance of good hand hygiene and to break taboos around menstruation through the “Hygiene is our right” partnership.
Record growth, successful innovations and acquisitions
Every day, we reach more than one billion people with Essity’s leading hygiene and health solutions with strong brands such as TENA, Tork, Leukoplast, Tempo, Libresse and Libero. In 2022, Essity reported record growth and achieved its highest ever net sales. Operating profit before depreciation, amortization and impairment was in line with 2021, despite the strong cost inflation. Through successful innovations and acquisitions, we have strengthened and expanded our offerings for the benefit of customers and consumers around the world.
President and CEO
Health & Medical
Comprehensive health and medical solutions along the continuum of care
Personal and home hygiene for all stages of life
Hygiene management solutions for a broad set of commercial applications
Building innovative brands for customers and
Growing positions in East Asia, Latin America and the
World-class operational efficiency and service
Leading in the fastest growing sales
Committed to sustainable solutions and net zero emissions by
Winning with people and
We aim to retain and strengthen our product category leadership and to build number one or two market positions by launching innovations based on customer and consumer insights that boost sales and build leading brands.
Essity strives to increase the company’s share of sales and earnings in emerging markets, mainly in East Asia and Latin America, where the use of hygiene and health solutions is significantly lower than in mature markets. In addition, Essity continues to see significant growth opportunities in the USA for all three business areas.
Essity drives world-class efficiency and service excellence in all aspects of the business and has an agile organization that focuses on continuous improvements and cost savings. One initiative is the Manufacturing Roadmap program, which was launched in 2020 and aims to optimize the production structure, improve productivity and deliver raw material and energy savings.
In 2022, Essity’s e-commerce sales grew 20% to SEK 23bn, corresponding to approximately 15% of the company’s net sales. The rise in e-commerce sales also offers higher profitability with a better product mix as a result of increased sales of premium products and own brands.
Sustainability is integrated into Essity’s strategy and a priority for long-term profitable growth. We are committed to reducing our climate impact, protecting biodiversity, contributing to a circular society, and achieving net zero emissions by 2050.
Essity’s offers attractive, inclusive, and sustainable workplaces with committed employees that help break barriers to well-being in a unique corporate culture.
Financial targets and outcomes
Annual sales growth1)
In 2022, sales growth, including organic sales growth and acquisitions, amounted to 17.7%, of which volume accounted for 1.7%, price/mix for 14.0% and acquisitions 2.0%.
1) Including organic sales growth and acquisitions.
Adjusted return on capital employed1)
Target by 2025:
In 2022, return was negatively impacted by significant cost inflation, mainly for raw materials, energy and distribution. Earnings were positively impacted by significantly higher selling prices, higher volumes and a better mix.
1) Excluding items affecting comparability.
Capital Structure Policy
Maintain a solid investment grade rating
Solid investment grade rating
Net debt amounted to SEK 62,869m. Net debt in relation to adjusted EBITDA1) amounted to 3.08.
1) Excluding items affecting comparability.
Long-term stable and rising dividends
The Board of Directors proposes an increase in the dividend of 4% compared with 2021 to SEK 7.25 per share for the 2022 fiscal year.
1) Board of Directors’ dividend proposal.
Sustainability targets and outcomes
Share of packaging manufactured from renewable and/or recycled material
Essity is striving for 100% recyclability and 85% renewable or recycled material in the company’s packaging. This target applies to both paper and plastic packaging for Essity’s brands.
Share of total purchase cost from suppliers that comply with Essity’s Global Supplier Standard
Essity has a Global Supplier Standard to ensure responsible business operations and respect for human rights in the company’s supply chain.
Subject to material or energy recovery
Resource efficiency and the reduction of waste are important in Essity’s production facilities. The target is that all production waste will be subject to material and energy recovery by 2030, which reduces greenhouse gas emissions.
Share of FSC™ or PEFC™-certified fresh fiber
Through certifications such as the Forest Stewardship Council (FSC) and the Programme for the Endorsement of Forest Certification (PEFC), Essity ensures sustainable fiber sourcing, thereby preventing deforestation and promoting biodiversity.
Health and safety
Decrease in total recordable incident rate compared with 2019
The Total recordable injury (TRI) figure includes Lost time accidents (LTA), Restricted work cases (RWC) and Medical treatment cases (MTC). All of Essity’s production facilities are conducting purposeful and systematic work with safety issues.
Science Based Targets
Target 2030 (compared with 2016):
Scope 1 and 2 -35%
Scope 3 -18%
Essity’s climate-affecting emissions are divided into three different classes (Scope) depending on origin. Scope 1 and 2 are directly linked to Essity’s production. Scope 3 reports indirect emissions in Essity’s value chain.
1) Outcome in 2021
Gender distribution at management levels
Essity’s target is that gender distribution at all management levels (Executive Management Team, senior management, middle management) is to be within the interval 40/60% no later than 2025, where the majority group based on gender is to constitute no more than 60%. The target is reported at an aggregate outcome level for the three management levels.
Share that yielded social and/or environmental improvements
Sustainable innovations are measured as the share of revenue from innovations launched in the most recent three years. For example, 2022 saw the launch of Leukoplast Eco, Libero Touch hybrid diaper, as well as leakproof apparel under such brands as Libresse, Bodyform, Saba, TOM Organic and TENA.
Business Ethics and Code of Conduct
Share of new employees who received training in the Code of Conduct
The Code of Conduct describes how employees are to act, how the company operates, stakeholder expectations of Essity, and Essity’s commitment to human rights. All wholly owned subsidiaries are bound by the Code of Conduct.
Essity is active in an attractive hygiene and health market with leading market positions and strong brands in the company’s three business areas: Health & Medical, Consumer Goods and Professional Hygiene. Within the respective business areas’ customer and sales channels, we are broadening our solutions for improved well-being for customers and consumers and investing in long-term, rising value creation.
Sustainability is and has been high on our agenda for many years. Essity improves the well-being of people through its leading hygiene and health solutions. We are committed to reducing our environmental impact, reduce waste and providing circular solutions, and protecting and restoring biodiversity.