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Risk management

Essity is exposed to a number of risks that could exert a greater or lesser material impact on the Group. These risks are generally defined as factors that impact Essity’s ability to achieve established targets for the Group. This applies to both financial targets and targets in other areas.

Many of the risks described could have a positive or negative impact on the Group. This implies that if a risk develops in a favorable manner or if risk management is successful in counteracting the risk, target fulfillment could exceed expectations. From this perspective, risk could also entail opportunities for Essity. Examples include the GDP trend and the economic situation, the cost of input goods, customer and consumer patterns, and movements in market prices.

Essity’s structure and value chain

Essity’s structure and geographically dispersed business entails in itself a certain degree of risk reduction. Essity conducts operations in three business areas that deliver to entirely or partially different customer segments and end-users.

The operations are influenced to varying degrees by the business cycle and general economic prosperity and their competitive situations also differ. Essity’s products are sold through many different channels and distribution paths. The operation has a large geographical spread. Sales are conducted in approximately 100 countries worldwide and manufacturing is pursued at about 100 production units in some 30 countries. Sales are often based on local manufacturing. Essity’s structure also ensures that the raw material flows are, to a certain degree, integrated from forest land to the finished consumer products. 

Last updated: 6/13/2017