Essity Business Model Canvas

Essity actively partners with technology firms and academic bodies to pioneer advancements in hygiene and health products. These collaborations focus on developing novel materials, like advanced absorbents, and integrating smart technologies, such as connected dispensers, to improve user experience and efficiency. For instance, in 2024, Essity continued its work with material science innovators to explore biodegradable and compostable alternatives for single-use products, aiming to reduce environmental impact.

These strategic alliances are crucial for Essity's innovation pipeline, enabling the company to stay at the forefront of product development and manufacturing. By working with research institutions, Essity gains access to cutting-edge scientific knowledge, accelerating the translation of new ideas into market-ready solutions. This approach has led to advancements in areas like water-saving technologies for hygiene products and the development of more sustainable packaging solutions, reflecting a commitment to both performance and environmental stewardship.

Key areas of collaboration include:

• Development of advanced absorbent materials: Partnerships with material science companies to create more efficient and sustainable absorbency technologies.
• Smart dispensing systems: Collaborations with tech firms to integrate IoT capabilities for better hygiene management and reduced waste.
• Circularity initiatives: Working with research institutions and recycling technology providers to enhance product recyclability and explore closed-loop systems.
• Digitalization of manufacturing: Partnering with automation and AI specialists to optimize production processes for greater efficiency and reduced environmental footprint.

Essity actively collaborates with influential non-governmental organizations (NGOs) and international bodies to amplify its mission. Partnerships with entities such as the United Nations Population Fund (UNFPA), UNICEF, and the Global Handwashing Partnership are central to this strategy. These alliances are crucial for driving global initiatives focused on hygiene and health education, extending Essity's reach into communities and addressing critical societal needs.

These collaborations allow Essity to transcend purely commercial objectives, tackling significant societal challenges that directly impact well-being and sustainability. For instance, Essity's work with UNFPA supports programs aimed at improving menstrual health and hygiene, a critical area for gender equality and education. In 2023, Essity's initiatives with partners reached millions of individuals, providing access to essential hygiene products and knowledge.

• UNFPA Partnership: Focused on improving menstrual health and hygiene globally, contributing to education and empowerment for women and girls.
• UNICEF Collaboration: Supports child health and hygiene education programs, particularly in schools, fostering healthy habits from a young age.
• Global Handwashing Partnership: Essity contributes expertise and resources to promote handwashing with soap as a critical public health intervention.
• Impact: These partnerships underscore Essity's dedication to its core purpose of breaking barriers to well-being, aligning business goals with broader social impact.

Essity leverages a robust global distribution and sales network, reaching an impressive 150 countries. This vast infrastructure ensures their hygiene and health products are accessible to diverse customer segments, including consumers, healthcare providers, and businesses worldwide.

This expansive network is fundamental to Essity's market penetration strategy, enabling efficient product delivery and strong brand presence across numerous geographies. It underpins their ability to serve both developed and emerging markets effectively.

• Global Reach: Approximately 150 countries covered.
• Customer Segments: Serves individual consumers, healthcare institutions, and businesses.
• Market Penetration: Facilitates broad accessibility and brand presence.
• Operational Efficiency: Supports efficient delivery of hygiene and health solutions.

Essity's robust financial standing, demonstrated by its strong net sales and profitable growth throughout 2024 and into Q1 2025, is a cornerstone of its business model. This financial strength ensures the company possesses the necessary capital to fuel critical investments in research and development, pursue strategic acquisitions, and fund its ongoing operational needs. A healthy balance sheet and consistent cash flow generation are vital for maintaining operational stability and executing ambitious future expansion plans.

Key financial highlights underscore this strength:

• Net Sales Growth: Essity reported strong net sales performance in 2024, with continued positive momentum in the first quarter of 2025, indicating sustained market demand and effective sales strategies.
• Profitability: The company has maintained a focus on profitable growth, with key profitability metrics showing resilience and improvement in 2024 and early 2025, supporting reinvestment.
• Cash Flow Generation: Essity consistently generates healthy operating cash flow, providing the liquidity needed for operational expenditures, debt servicing, and strategic capital allocation.
• Balance Sheet Strength: A well-managed balance sheet with manageable debt levels and sufficient liquidity empowers Essity to navigate market fluctuations and capitalize on growth opportunities.

Essity cultivates robust, strategic partnerships with its major retail and distribution clients via specialized key account management. This approach fosters joint planning, streamlined inventory control, and customized promotional assistance, proving crucial for maximizing product visibility and sales.

These vital B2B connections are essential for optimizing product placement and driving significant sales volumes. For instance, in 2024, Essity reported that its top 10 retail accounts contributed over 40% of its total revenue, underscoring the importance of these relationships.

• Dedicated Key Account Managers: Specialists focus on building and maintaining deep relationships with large retailers.
• Collaborative Planning: Joint efforts in forecasting, promotions, and product assortment ensure mutual success.
• Inventory Optimization: Efficient stock management reduces costs and ensures product availability for consumers.
• Tailored Marketing Support: Customized campaigns and in-store activations drive brand awareness and sales for partners.

Essity actively fosters community around hygiene and health, extending beyond mere transactions. They champion global initiatives and advocate for improved hygiene standards, demonstrating a commitment to societal well-being. This commitment resonates with customers, building loyalty through shared values.

In 2024, Essity continued its focus on these community aspects. For instance, their work with UNICEF on hygiene education programs reached millions of children globally, reinforcing brand trust. This advocacy not only elevates public health but also solidifies Essity's position as a responsible corporate citizen.

• Global Hygiene Initiatives: Essity's participation in programs promoting handwashing and menstrual hygiene education in developing countries.
• Advocacy for Standards: Their lobbying efforts for better public health infrastructure and access to essential hygiene products.
• Value Alignment: Building customer loyalty by connecting with consumers who prioritize health, sustainability, and social responsibility.

Individuals experiencing incontinence and their caregivers represent a crucial customer segment for Essity's Personal Care division, with the TENA brand being a primary focus. This demographic seeks products that provide reliable leakage protection, enhance comfort, and actively promote skin health. The global incontinence market is substantial, with reports indicating it was valued at over $20 billion in 2023 and is projected to continue growing.

Purchasing habits within this segment often lean towards healthcare channels, such as pharmacies and medical supply stores, due to the need for specialized advice and discreet access. However, there's also a significant demand for convenient and private retail options. In 2024, Essity continued to see strong performance in this segment, driven by an aging global population and increased awareness around incontinence management.

• Key Needs: Comfort, reliable leakage protection, and maintaining skin integrity are paramount for individuals with incontinence.
• Purchasing Channels: Products are commonly acquired through pharmacies, specialized medical suppliers, and increasingly via discreet online retail platforms.
• Market Size: The global incontinence market is a multi-billion dollar industry, reflecting the widespread need for these specialized products.
• Brand Loyalty: Trust and efficacy are key drivers of brand loyalty for both the end-user and their caregivers.

This segment targets a broad array of organizations, from corporate offices and educational institutions to hospitality venues like hotels and restaurants, as well as industrial sites and critical healthcare facilities. These businesses and public bodies are essential customers for professional hygiene products and services.

They actively seek solutions that ensure cleanliness and well-being for their staff, visitors, and operational continuity. This includes acquiring dispensing systems for soap and paper towels, as well as various cleaning and hygiene consumables designed for high-traffic environments.

In 2024, the demand for advanced hygiene solutions remained robust across these sectors, driven by ongoing health and safety awareness. For example, Essity reported strong performance in its Professional Hygiene segment, reflecting the continued need for reliable and efficient hygiene management in business and public settings.

• Office Buildings: Focus on maintaining a clean and healthy environment for employees and visitors, often requiring high-volume paper towel and soap dispensers.
• Hospitality Sector (Hotels & Restaurants): Prioritize guest experience and public health, necessitating visible and effective hygiene solutions in restrooms and dining areas.
• Healthcare Facilities: Require stringent hygiene protocols and specialized products to prevent infection transmission, making them a critical and demanding customer base.
• Industrial and Manufacturing Sites: Need durable and efficient hygiene solutions to support worker safety and operational cleanliness in demanding environments.

Essity's Health & Medical segment generates significant revenue through the sale of specialized medical solutions. This includes advanced wound care products like Cutimed and Leukoplast, which are crucial for patient recovery and management.

The company also profits from its compression therapy offerings under the JOBST brand, essential for managing circulatory conditions, and its Actimove orthopedic products, supporting rehabilitation and mobility.

This segment has consistently demonstrated robust growth, often contributing to higher profit margins for Essity due to the specialized nature and value proposition of these medical solutions.

• Advanced Wound Care: Products such as Cutimed and Leukoplast cater to a critical healthcare need, supporting healing and infection prevention.
• Compression Therapy: The JOBST brand is a market leader, providing essential solutions for venous and lymphatic disorders, contributing to improved patient quality of life.
• Orthopedic Solutions: Actimove offers a range of products designed for support, protection, and recovery, addressing a broad spectrum of musculoskeletal needs.
• Revenue Contribution: This specialized segment is a key driver of Essity's overall financial performance, often achieving higher margins compared to other business areas.

Essity's revenue model includes smaller, supplementary streams like licensing agreements. For instance, Essity continues to license its brands to Vinda in Asian markets even after divesting its stake, demonstrating a flexible approach to revenue generation.

Beyond brand licensing, Essity may also earn income from service and maintenance contracts associated with its professional hygiene systems. These agreements ensure the ongoing functionality and upkeep of equipment, providing a steady revenue flow.

• Brand Licensing: Continued agreements, such as with Vinda in Asia, provide ongoing revenue from established brands.
• Technology Licensing: Essity can license its proprietary technologies to other companies in specific regions or sectors.
• Service Contracts: Revenue generated from maintenance and support for professional hygiene solutions.
• Other Minor Income: Potential for miscellaneous revenue from various smaller initiatives or partnerships.