- Essity is one of the holdings which I have held the longest (held since spin off from SCA AB)
- Defensive qualities in an uncertain time
- Benefits from several structural trends (aging population, higher disposable income in emerging markets, greater hygiene awareness and the prevalence of chronic conditions)
- Solid brands with market leading positions
- Geographical sales dispersion
About the company
The company is a leading global hygiene and health company and was spun off from Svenska Cellulosa in 2017. Essity is derived from «essentials» and «necessities» and is a good description for a company with solid defensive qualities. Their product lines are within personal care, consumer tissue and professional hygiene, and they serve the retail market as well as business-to-business and the healthcare sector.
Net sales in 2019 amounted to approximately SEK 129bn (EUR 12.2bn)
Sales are conducted in approximately 150 countries under the leading global brands TENA and Tork, and other strong brands, such as JOBST, Leukoplast, Libero, Libresse, Lotus, Nosotras, Saba, Tempo, Vinda and Zewa. Essity has about 46,000 employees.
Trends and growth drivers
The company is positively affected by several structural trends, which ensures future sales growth.
- Growing and aging population
- Higher disposable income and living standards
- Greater awareness of hygiene and health
- Increased access to health care
- Increased prevalence of chronic conditions (e.g. incontinence)
- Increased raw material prices
A diversified brand portfolio offers several advantages. For one, when some products struggle, others absorb the loss and buy time to enable needed corrections.