Essity
Essity AB is a Swedish multinational hygiene and health company headquartered in Stockholm that develops, produces, markets, and sells personal care products including baby care, feminine care, and incontinence solutions, as well as consumer tissue and professional hygiene items.[1][2][3]
Formed in 2017 through the demerger of the hygiene and health divisions from Svenska Cellulosa Aktiebolaget (SCA), which retained the forest products business, Essity traces its roots to the 1849 founding of Mölnlycke, a Swedish firm acquired in 1975 whose expertise in hygiene products laid the groundwork for the company's operations.[4][5]
Operating in over 150 countries with net sales distributed across its business areas, Essity claims to support the hygiene and health needs of approximately one billion people daily through leading market positions, such as number one in incontinence products for health care and number two in compression therapy and orthopedics.[6][7]
The company has faced environmental criticism, notably from Greenpeace campaigns accusing it and its suppliers of unsustainable logging practices in northern European forests that exacerbate deforestation and biodiversity loss, though Essity maintains commitments to sustainable sourcing.[8]
Company Overview
Corporate Profile and Business Model
Essity AB is a Swedish multinational company that develops, produces, markets, and sells hygiene and health products, including personal care and tissue items.[1][9] Headquartered in Stockholm, Sweden, the company operates in approximately 150 countries and employs around 36,000 people.[7][10] Essity's operations are structured into three primary business areas—Health & Medical, Consumer Goods, and Professional Hygiene—following a reorganization effective January 1, 2022, to align with customer segments and enhance market responsiveness.[11][12] In 2024, the company reported net sales of SEK 145,546 million, reflecting its scale in serving global demand for essential hygiene solutions.[11] The business model emphasizes innovation in categories such as absorbent hygiene products to address empirical drivers of sector growth, including an aging global population and rising prevalence of chronic conditions that increase needs for incontinence and medical solutions.[13][14] This approach leverages demographic trends and heightened health awareness, rather than unsubstantiated projections, to sustain market positioning amid varying regional demands.[13]
Leadership and Organizational Structure
Ulrika Kolsrud serves as President and Chief Executive Officer of Essity, having assumed the role on June 1, 2025, following her appointment by the Board of Directors on May 9, 2025; she holds an MSc in Engineering and previously led Essity's Health and Medical Solutions division.[15] [16] Fredrik Rystedt acts as Chief Financial Officer and Executive Vice President, overseeing Group Finance, with an MSc in Economics.[15] The Executive Management Team comprises additional roles focused on business areas, supply chain, and functions, though Donato Giorgio departed as President of Global Supply Chain on October 31, 2025, with recruitment for a successor underway.[17] The Board of Directors, elected at the Annual General Meeting on March 27, 2025, consists of nine members, including Chairman Jan Gurander (MSc Econ., appointed Chairman in 2024, with prior experience as deputy CEO and CFO at AB Volvo).[18] [19] Re-elected directors include Maria Carell (MSc BA), Annemarie Gardshol, Magnus Groth (MBA and MSc ME), Torbjörn Lööf, Bert Nordberg, Barbara M. Thoralfsson, and Karl Åberg, alongside new members Alexander Lacik and Katarina Martinson; Ewa Björling stepped down.[19] Governance emphasizes a diversity policy to align board composition with operational needs and development phase, while the Nomination Committee, representing major shareholders, proposes candidates to maintain independence from company management. [20] The Annual General Meeting serves as the highest decision-making body, enabling shareholder influence on key matters such as board elections and remuneration, reflecting post-spin-off structures that prioritize stakeholder commitments including to shareholders.[21] [22] On October 23, 2025, Essity announced organizational changes effective January 1, 2026, aimed at decentralizing decision-making to enhance end-to-end accountability across business units, streamline operations, and foster profitable growth amid economic uncertainties highlighted in the Q3 2025 interim report, which noted solid organic sales growth despite a 4.5% volume decline in certain segments.[23] [24] This shift simplifies the structure by reducing centralized layers, directly linking local accountability to performance outcomes and enabling faster responses to market volatility, as opposed to prior models potentially hindered by hierarchical delays.[25]Historical Development
Origins in SCA and Pre-2017 Operations
Svenska Cellulosa Aktiebolaget (SCA) was established on November 27, 1929, as a Swedish forestry company specializing in pulp and paper production, drawing on vast timber resources to support industrial output.[26] Initially focused on forest products, SCA's involvement in hygiene items emerged from its pulp expertise in the mid-20th century, enabling the production of absorbent materials for disposable goods.[27] The hygiene division's modern foundations were laid in 1975 through SCA's acquisition of Mölnlycke AB, a Swedish firm producing disposable hygiene products, which brought specialized manufacturing capabilities in areas like tissue and personal care.[27] This move integrated consumer-oriented operations into SCA's portfolio, fostering innovations such as the Tork brand for professional hygiene, which originated from a 1968 Swedish wipe product called "All-Tork"—derived from "torka," meaning "to dry" or "wipe."[28] Similarly, the TENA brand for incontinence products was developed within the division during the 1970s and expanded through the 2000s, targeting aging populations with absorbent solutions.[29] Further milestones included strategic acquisitions to build scale: in the early 2000s, SCA purchased Georgia-Pacific's tissue operations, enhancing its away-from-home and consumer tissue segments.[4] By 2016, the hygiene division generated about 85% of SCA's total sales, reflecting its shift toward stable, demand-driven revenue from personal and professional hygiene needs, in contrast to the forestry arm's exposure to commodity price volatility.[30] The push for separation arose from structural mismatches: hygiene operations, less capital-intensive and more cash-generative due to recurring consumer purchases and innovation margins, diverged from forestry's high-investment, cyclical profile tied to raw material extraction.[31] SCA's 2016 announcement highlighted that isolating hygiene would enable focused strategies, better capital allocation, and potentially higher market valuations for each entity, as hygiene's growth trajectory outpaced forest products.[32]2017 Spin-off and Initial Independence
Essity was formed through the demerger of SCA's hygiene and health products division, approved by SCA shareholders at the annual general meeting on April 5, 2017, which authorized the distribution of all shares in the subsidiary SCA Hygiene AB (renamed Essity Aktiebolag) to SCA shareholders on a one-for-one basis.[33] The last trading day for SCA shares entitled to the distribution was June 9, 2017, with Essity shares commencing trading on Nasdaq Stockholm on June 15, 2017, establishing it as an independent entity focused exclusively on hygiene and personal care products, distinct from SCA's forest products operations.[34] This separation enabled market valuation based on Essity's specialized hygiene portfolio, free from the diversified risks of SCA's timber and pulp-centric business.[32] Post-spin-off, Essity faced immediate operational challenges in disentangling integrated supply chains previously shared with SCA, particularly in securing external sourcing for key inputs like pulp, which had been supplied internally at cost.[35] The transition required negotiating new procurement contracts amid volatile market conditions, including a sharp rise in global pulp prices starting in late 2017, which pressured margins and necessitated rapid adjustments to raw material hedging and supplier relationships.[36] These disruptions were compounded by the need to integrate Essity's operations into standalone financial reporting and compliance frameworks, though the company's pre-existing global manufacturing footprint mitigated some short-term production risks.[37] As an independent entity, Essity shifted strategy toward accelerating profitable growth through enhanced innovation and market penetration, with research and development expenditures reaching SEK 1,239 million in 2017, equivalent to 1.1% of net sales, focused on developing superior hygiene solutions.[38] The company emphasized global expansion by leveraging its presence in approximately 150 countries, prioritizing organic growth in high-potential segments like professional hygiene and personal care while streamlining go-to-market models for efficiency.[39] Essity's B shares debuted on Nasdaq Stockholm at around SEK 240, but declined 6% from listing through December 31, 2017, closing the year with a market capitalization of SEK 164 billion amid investor concerns over pulp cost inflation.[40] In 2018, the stock underperformed further with an annual return of approximately -6.6%, reflecting broader sector pressures from raw material volatility, though analysts noted the spin-off's success in unlocking value through focused management and eventual cost-saving initiatives.[41] Investor reception was cautiously positive for the demerger's strategic rationale, valuing Essity's leading positions in growing hygiene markets despite early profitability squeezes.[42]Expansion, Acquisitions, and Restructuring (2018–2025)
In July 2022, Essity announced the acquisition of an 80% stake in Canadian leakproof apparel provider Knix Wear Inc. for approximately US$320 million, with the deal finalized on September 1, 2022, to expand its offerings in period and incontinence products.[43][44] Concurrently, Essity acquired Australian firm Modibodi Pty Ltd, a leader in leakproof apparel, for AUD 140 million (about SEK 985 million) on a cash- and debt-free basis, with integration completed on August 1, 2022, strengthening its position in absorbent hygiene innovations.[45][44] These moves targeted growth in the emerging leakproof clothing segment, combining Essity's manufacturing scale with the brands' direct-to-consumer expertise. In February 2022, Essity acquired U.S.-based Legacy Converting Holdings LLC, a professional wiping and cleaning products firm, for US$40 million, enhancing its professional hygiene portfolio amid rising demand for industrial solutions.[46] In September 2022, the company reorganized its structure into four business units—Consumer Goods Americas, Consumer Goods EMEA & APAC, Professional Hygiene, and Medical Solutions—to enable more focused strategies and agile responses to regional market dynamics.[47][48] Facing supply chain disruptions and inflationary pressures in the early 2020s, Essity adjusted its financial targets in June 2024 to emphasize organic growth over acquisitive expansion, setting an annual organic sales growth goal exceeding 3% and an EBITA margin above 15% excluding items affecting comparability.[49] In October 2025, Essity initiated further restructuring measures, including workforce reductions, to bolster profitability amid economic weakness, with associated costs to be reported in the Q3 interim report.[23] For the second quarter of 2025, Essity reported organic sales growth of 1.9%, driven by pricing amid limited volume gains in a subdued economic environment, with net sales at SEK 34.2 billion and earnings of SEK 4.7 billion reflecting sequential margin improvements through cost controls.[50][51] These results aligned with the company's focus on resilience, prioritizing core hygiene segments despite broader market headwinds.Products and Brands
Core Product Categories
Essity's core product categories include personal care for individual hygiene management, consumer tissue for everyday household applications, and professional hygiene solutions tailored for commercial and institutional settings. These categories emphasize functional performance metrics, such as fluid absorbency rates exceeding 300 times the material's weight via superabsorbent polymers in personal care items, tensile strength in tissues to prevent breakage under wet conditions, and dispensing efficiency in professional systems to minimize hygiene risks like bacterial cross-contamination.[52][53][54] In personal care, incontinence products like absorbent pads and underwear incorporate DuoLock core technology, which divides absorption zones to enhance leakage prevention and promote rapid moisture wicking, supporting up to 12 hours of protection in moderate to heavy flow scenarios. Feminine care items, including pads and panty liners, utilize similar layered absorbents for odor neutralization and skin dryness, while baby care diapers feature breathable cores optimized for high-capacity fluid lock-in to reduce skin irritation from prolonged exposure. Essity holds leading positions in these subcategories, including global #1 in incontinence retail and #5 in feminine and baby care.[55][56][57] Consumer tissue products comprise toilet paper, household towels, and facial tissues engineered for balanced softness and strength, with select lines achieving equivalent performance to wood-pulp variants in metrics like brightness and wet tensile durability through alternative fiber blends. These items prioritize quick disintegration for septic safety alongside absorbency for spill management, positioning Essity as the third-largest global supplier with dominant European market share.[54][57] Professional hygiene solutions focus on integrated dispensing systems for tissue, wiping materials, soaps, and sanitizers, which facilitate controlled usage to enhance hand-drying efficacy and reduce waste—dispensers maintain fullness rates of 99% via sensor connectivity in monitored installations. Tork systems, for instance, support data analytics that correlate with 75% fewer user complaints on availability and improved cleaning efficiency in high-traffic venues like hospitality. Essity leads in European professional tissue and holds top positions in North American foodservice napkins.[58][59][60] Across categories, Essity's R&D targets material innovations that sustain core efficacy metrics, such as absorbency and durability, amid shifts toward fiber alternatives without compromising verified performance benchmarks.[54]Key Brands and Portfolio Strategy
Essity's core brand portfolio centers on global leaders TENA, focused on incontinence and feminine care, and Tork, specializing in professional hygiene solutions, which together underpin the majority of its branded sales across consumer and professional segments.[61] Regional brands such as Lotus for tissue products complement these, enabling market penetration in Europe and select emerging regions where local preferences influence consumer choice.[61] The 2023 acquisition of Knix Wear Inc. integrated leakproof apparel into the portfolio, enhancing Essity's position in direct-to-consumer channels for absorbent hygiene innovations.[62] The company's portfolio strategy emphasizes a dual-track approach: bolstering proprietary brands for premium positioning while maintaining competitiveness in private-label segments to expand margins and volume.[63] This involves global standardization of core offerings like TENA to leverage economies of scale and brand equity, balanced against regional adaptations for brands like Lotus to address varying cultural and regulatory demands.[64] Rationalization efforts include divestments of non-core assets, exemplified by the March 2024 sale of Essity's 51.59% stake in Vinda International Holdings for focus on high-margin hygiene categories, yielding proceeds to reinvest in strategic growth areas.[65] Branded sales contribute significantly to Essity's performance, with the company securing number 1 or 2 market positions in 90% of such volumes as of 2024, driven by TENA and Tork's leadership in their respective categories.[6] In commoditized hygiene markets, where products risk price-based competition, branding cultivates consumer loyalty through perceived reliability and innovation—evident in TENA's dominance in the approximately €13 billion global incontinence sector, where branded products account for around 91% of sales due to trust in efficacy and comfort over generics.[63] This causal link supports sustained pricing power and repeat purchases, as empirical market share data correlates strong brand equity with above-market growth rates exceeding 3% organically.[66]Operations and Global Reach
Manufacturing and Supply Chain
Essity operates approximately 50 production facilities across more than 30 countries, focusing on the manufacture of tissue, personal care, and professional hygiene products.[67] These sites produce core categories such as absorbent hygiene items and tissue papers, with capacities measured in thousands of tons annually, as detailed in company reports.[68] For instance, the company maintains eight facilities in the United States and six in the United Kingdom, supporting localized production to minimize logistics dependencies.[69][70] The supply chain emphasizes responsible sourcing of raw materials, particularly wood-based fresh fiber, with Essity procuring around 3.5 million tons annually, 98% of which is pulp from external suppliers.[71] Lacking full vertical integration post its 2017 spin-off from SCA, Essity relies on pulp producers while implementing policies to address risks at the forest management stage, including certification requirements for sustainable origins.[72] Suppliers must adhere to the company's General Supplier Standard, covering quality, ethics, and environmental criteria, with coverage extending to all raw material providers.[73] To enhance resilience against disruptions, such as those experienced post-2020 from global events, Essity employs risk-based assessments, including Sedex self-assessments and ethical audits for high-risk suppliers, alongside AI-enabled procurement for agility.[74][75] Potential vulnerabilities, like sudden shortages of key inputs, are mitigated through diversified sourcing and limited buffer stocks, though these can elevate costs if production halts occur.[76] Efficiency initiatives include the ESAVE and MSAVE programs, which target reductions in energy, materials, and waste across facilities, contributing to ongoing productivity gains and cost minimization.[77] In 2021, 64% of production waste underwent material or energy recovery, aligning with a 2030 target of 100% recovery to lower emissions and resource use.[78] Investments in automation and process optimization support these metrics, enabling continuous improvements in output per unit of input.[79]Market Presence and Distribution
Essity conducts sales in approximately 150 countries, with a primary focus on Europe, where it derives 60% of its 2024 net sales, followed by North America and Latin America at 17% each, Asia at 2%, and other regions at 4%.[80] Its largest individual markets by sales volume include China, the United States, Germany, France, and the United Kingdom, reflecting established positions in both mature and developing economies.[81] Emerging markets collectively account for 26% of net sales, underscoring Essity's strategy to capitalize on rising hygiene and health awareness in regions with improving living standards.[82] Distribution occurs through a mix of retail channels for consumer products, such as tissue and incontinence items sold in supermarkets and pharmacies, and business-to-business (B2B) channels for professional hygiene solutions like dispenser systems targeted at institutions and away-from-home settings.[83] E-commerce has emerged as a growth vector, with sales reaching SEK 23 billion in 2022 amid a 20% annual increase, driven by digital platforms from retailers, direct-to-consumer sales, and harmonized B2B experiences across global brands.[84][85] To align with diverse markets, Essity adapts offerings to local consumer preferences, such as varying product formats and packaging informed by purchasing behavior insights, while ensuring compliance with regional regulations on product safety and materials.[86][87] In Latin America, for instance, investments like a new distribution center in Colombia—its second-largest market in the region with over SEK 5.2 billion in 2024 sales—enhance supply efficiency amid growing demand for brands like Regio and Familia.[88] This localized approach supports penetration in high-potential areas without uniform standardization.[89]Financial Performance
Revenue Growth and Profitability Metrics
Essity achieved net sales of SEK 145,546 million in 2024, reflecting organic sales growth of 0.2%, with volume contributing 0.5% and price/mix subtracting 0.3%; excluding restructuring and exited contracts, organic growth reached 2.5%.[90] [91] Adjusted EBITA for the year totaled SEK 20,344 million, yielding a 14% margin, the company's highest on record, supported by pricing initiatives that offset input cost fluctuations and subdued volumes amid global economic pressures.[7] [6] In the first half of 2025, economic headwinds persisted, yet Essity maintained positive organic growth; Q2 net sales fell 6.6% to SEK 34,185 million (currency-adjusted increase of SEK 699 million), driven by 1.9% organic growth comprising 1.7% from price/mix and 0.2% from volume.[50] Earnings for the quarter reached SEK 4.7 billion, sustained by cost controls and a resilient product mix despite weaker consumer demand.[50] Q3 2025 showed continued resilience, with net sales at SEK 34,638 million (down 4.5%) and organic growth of 0.9%, fueled by higher prices alongside modest volume and mix gains across business areas.[24] Adjusted EBITA rose to SEK 5,056 million, achieving a 14.6% margin through effective pricing discipline and operational efficiencies that mitigated inflationary and currency impacts.[24]| Metric | 2024 Full Year | Q2 2025 | Q3 2025 |
|---|---|---|---|
| Net Sales (SEK million) | 145,546 | 34,185 | 34,638 |
| Organic Growth (%) | 0.2 | 1.9 | 0.9 |
| Adjusted EBITA (SEK million) | 20,344 | 4,700 (approx.) | 5,056 |
| EBITA Margin (%) | 14.0 | ~13.7 | 14.6 |