Essity B 260.6 (+3 SEK) on 26-Nov-2022 17:32

Strategic priorities for profitable and sustainable growth

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Profitable and sustainable growth is achieved through Essity’s strategic priorities: continuing the transformation journey, innovating leading brands, accelerating digitalization, leading in sustainability and growing in emerging markets. We are winning with people and culture as well as increased efficiency.

Winning with people and culture

To deliver on Essity’s strategic priorities and achieve profitable and sustainable growth, Essity is endeavoring to attract and develop the most talented employees and create a culture where people thrive and continuously evolve. The right expertise and good opportunities for development and cooperation form the basis for Essity’s success and value creation. We value and work to increase diversity, equity and inclusion. Different backgrounds and experiences lead to successful solutions and results. All employees are to be treated fairly and with respect. Everyone at Essity makes a difference by helping to improve the well-being of people all over the world.

Efficiency in everything we do

Daily improvements are achieved at Essity by focusing on efficiency and quality, which yields greater customer satisfaction, improved profitability and lower climate impact. We strive to increase productivity, reduce material, energy and logistics costs and minimize waste. In parallel, rapid adjustments are enabled for innovations, product adaptations and the best service to customers and consumers. This strengthens the company’s competitiveness, enhances financial performance and reduces environmental impact. Digitalization, innovation, global economies of scale and knowledge sharing contribute to increasing efficiency in the production and supply chain as well as logistics and distribution. During 2021, Essity achieved SEK 698m in continuous cost savings. These include savings in sourcing, production and material rationalization. The Manufacturing Roadmap program extends until 2025 and is expected to contribute to Essity’s total annual cost savings of SEK 500–1,000m through optimized production structure, efficiency improvements and raw material and energy savings. These measures facilitate growth without investments increasing at the same pace. Working capital is expected to decrease by more than SEK 1,000m. The objective is to also utilize new production methods to reduce exposure to wood-based fresh-fiber pulp by approximately 10%, which will result in reduced volatility for the company’s profitability.

Continuing the transformation journey

With the target of growing, both organically and through acquisitions, within the categories and adjacent product areas with the highest profitability, we are continuing our transformation journey.

Innovate leading brands

Successful innovations and strong brands are two of Essity’s strengths and are crucial for the company’s success. Awareness of the importance of hygiene and health and also demand for sustainable solutions have increased. This has favored Essity, as during the COVID-19 pandemic we strengthened and broadened our hygiene and health offering and launched reusable products in several categories.

Accelerating digitalization

The aim of Essity’s digital strategy is to increase sales growth and efficiency. The strategy is based on four development areas: how we interact with customers and consumers, digital solutions and business models, efficiency improvements across the entire business, and building digital expertise in the organization.

Leading in sustainability

For Essity, sustainability is a strategic priority for long-term profitable growth. Our initiatives contribute to a better environment while increasing the competitiveness of the company. Demand for sustainable solutions and the willingness to pay more for these is increasing among customers and consumers.

Growing in emerging markets

Essity is growing in emerging markets where market penetration of hygiene and health solutions is significantly lower than in mature markets. Growth is prioritized in markets where the company already holds strong market positions, such as Asia, Latin America and Eastern Europe.

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