Innovative offerings and medical technology acquisitions
2020 was a strong year of innovation for Essity. We are making use of sensors and new technology to deliver digital solutions that simplify and improve everyday life for customers and consumers. During the year, TENA SmartCare was launched, a reusable sensor that can easily be attached to the outside of a TENA product and notifies the caregiver or family member via an app when the product needs to be changed. COVID-19 has placed higher demands on hygiene and health and we have strengthened our offering to help people to manage the new challenges of everyday life. For example, we broadened our offering to include face masks and increased supply capacity for hand sanitizer.
Acquisitions are one way of further broadening our offering. Through the acquisition of medical solutions company ABIGO Medical AB, Essity owns the unique Sorbact® technology for advanced wound care. We also acquired Novioscan, which is developing a wearable ultrasound sensor for the bladder and provides the user with a discrete notification via an app when it is time to visit the bathroom.
Digitalization and efficiency
We have been investing in digitalization in all areas of the business for several years. From increased automation and robotization of production, logistics and administration to digital offerings and a strong platform for e-commerce. These investments were a major contributing factor to Essity’s high level of delivery reliability during the pandemic. We had the infrastructure in place for the rapid shift to a more digital world. We are now increasing our digital initiatives and investing in a new digital platform. This investment is expected to increase our sales through an even better customer and consumer experience in the form of enhanced flexibility, speed and accessibility. It also enables further efficiency enhancement of sourcing, production, logistics and distribution, which is expected to lead to cost savings and a reduced need for working capital. The initiative goes hand in hand with our new Manufacturing Roadmap program with the aim of optimizing and streamlining all of Essity’s approximately 60 wholly owned facilities for world-class cost efficiency, quality and service levels.
"Our employees have shown an amazing commitment and ability to quickly adapt to help raise the global hygiene and health standard and position Essity for future growth."
In our efforts to reduce climate impact, Essity strives to raise the share of recycled and renewable materials, increase the recycling of products, and launch more products that can be reused. One example of this is our launch of washable absorbent underwear during the year. Under “Pure Natural”, toilet paper, handkerchiefs and facial tissues were launched with an extra soft quality. The tissue is made of certified fiber, of which about 30% is unbleached. The plastic packaging is recyclable and 30% of it is made from recycled plastic.
We are working to achieve a world-class sustainable value chain with three focus areas: reduce the use of fossil fuels and electricity, improve product design and optimize resource utilization. Our targets to reduce carbon emissions are approved by the Science Based Targets initiative and, between 2016 and 2020, we reduced our Scope 1 and 2 carbon emissions by 11%. During 2021, we are starting the production of tissue from wheat straw at our facility in Mannheim, Germany. It is a good example of ground-breaking production that generates a significantly lower climate impact while retaining quality.
Essity is working actively to identify and minimize climate-related risks. We report our conclusions based on the recommendations in TCFD in the chapter Climate-related risks and opportunities. We have also extended our sustainability reporting to comply with the SASB Household & Personal Products Standard.
Sustainability awards and the UN SDGs
In 2020, Essity was included in the Dow Jones Sustainability Europe Index, one of the world’s most prestigious sustainability indexes, in the Household Products category and secured a place on the CDP’s prestigious ‘A List’ for the company’s action to tackle deforestation and to source more sustainable commodities. Essity has also been recognized as one of the world’s 100 most sustainable companies by Corporate Knights.
Essity was a convening partner to the United Nations Foundation’s annual Global Dialogue, where we discussed with our customers how we can contribute to the UN Sustainable Development Goals (SDGs). We support the UN Global Compact.
Diversity and cooperation our strength
In 2020, our employees showed an amazing commitment and ability to quickly adapt to deliver our important solutions to customers and consumers and to help raise the global hygiene and health standard and position Essity for future growth. By applying rapid and concrete measures and delegated responsibility, we quickly found a way to protect our employees’ health, while also maintaining production. The strong earnings reported for 2020 is confirmation of the competent and professional organization we have. I am proud of the culture we have at Essity, where each individual is important, as is the cooperation between us. We value and work to promote increased diversity and inclusion. It makes us stronger when we are different and contribute our unique expertise, background and experience.
Priorities in 2021
Vaccinations have started and market conditions will gradually improve. In 2021, we will work to accelerate growth in Personal Care and prepare for a strong comeback in Professional Hygiene. Within Consumer Tissue, work is continuing to improve structural profitability. Continued digital transformation, the Manufacturing Roadmap and further acquisition opportunities support our strategy for profitable growth. We will continue to lead in the area of sustainability and contribute to the UN Sustainable Development Goals. Together, we make improvements for people and the environment, and create value for our shareholders, customers, consumers, society and employees.
President and CEO
View the full 2020 Annual and Sustainablity report here.
KEYWORDS: Essity, Magnus Groth, OTC:ESSYY