Axfood AB (publ) (AXFO) Earnings Call Transcript & Summary

Welcome to the Axfood Q3 2023 Report Presentation. [Operator Instructions] Now I will hand the conference over to speakers, CEO, Klas Balkow; and CFO, Anders Lexmon. Please go ahead.

Well, good morning everyone. And thank you for joining today's call. As you heard, together with our CFO, Anders Lexmon, it is time for us to present to you Axfood's interim reports for the third quarter 2023. As always, in the investors section of our website, you will find the presentation material for today's call and the recording will also be made available after the presentation. And with that, please turn now to page number 2 and we'll get started. Here you'll find today's agenda. First, I would like to give you a brief market overview. And then a review of our third quarter performance. After that, Anders will take you through the financials. And following Anders' part, I will talk about the progress we're making with our new logistical platform and also the outlook for the year before we open-up for questions. We are now on page number 3 and let's go straight to page number 4 and then take a look at the development during the quarter; first, for the market and then for Axfood. Market growth amounted to just over 6% during the third quarter. The annual inflation rate continued to come down significantly on a sequential basis and amounted to 9.1%, if you compare that to 14.5% during the second quarter and 20.1% during the first quarter this year. While our market growth has continued to be lower than the overall food price inflation, the gap has narrowed a lot over the past couple of months, which implies that the volume mix component is not as negative as before; although it is still weak and even more so if you look back 2 years instead of just 1. With that, consumers are still very much under pressure financially as the cost of living has gone up dramatically over the past year. And as before the third quarter was characterized by an ongoing strong focus on value for money and a high level of activity in the market. Let's go to the next slide please, number 5. If you then look at Axfood, we are continuing to perform very well. Our growth rate was 13% in the third quarter, which was double the rate of the market. Increased customer traffic resulted in higher volumes and this represents a larger part of the overall growth compared to previously, but pricing was of course also highly significant contributor to our growth. With our wholesale brand strategy and strong market presence, we have a favorable position in this market where value for money is more important than ever for our consumers. If you look at the e-commerce, our sales [Technical Difficulty] slightly more than 8%. We are clearly winning also here and obviously growing a lot faster than the market where growth is basically flat. Overall, the performance of the e-commerce channel on the market is weak and the penetration level was only 3.6% of total grocery retail sales in the third quarter. Please go to the next page number 6. Looking at our net sales, our consolidated net sales for Axfood grew by almost 9% during the third quarter. This increase is attributable to high food price inflation, but also an increase in new customers. While growth was mainly driven by Willys, all our segments reported high-single-digits or even double-digit sales growth in the quarter. Let's go to next page, page number 7, and if you look at our profit, in total, group operating profit amounted to slightly more than SEK 1 billion and the operating margin was 5.1%. The reported operating profit includes items affecting comparability of minus SEK 60 million related to the restructuring of our logistical operations and more specifically the transition to the new logistics center in Boston. The adjusted operating profit, which excludes items affecting comparability increased approximately 8%. The increase was mainly the result of strong growth and effective cost control. Overall, this compensated for lower gross margin in the segments, also negative currency effects, as well as costs associated with higher rental levels and salary increases also had a negative impact on profit. The negative effect from the discontinuation of reduced payroll taxes for young people amounted to minus SEK 49 million. And if you look at the adjusted operating margin is unchanged compared to prior year at 5.4%. Let's now dig into our various segments, and turning to page number 8, we'll look into Willys. Willys once again reported exceptional growth, reaching an impressive 16% this quarter. Like-for-like retail sales increased by slightly more than 12% and the favorable development was attributable to volume growth from higher customer traffic as well as pricing. I'm also pleased to see that our cross-border trade grocery chain Eurocash noted a healthy sales increase. Our operating profit increased 8% and amounted to SEK 652 million corresponding to an operating margin of 6%. The very strong growth in like-for-like sales and effective cost control compensated for a lower gross margin. With the high activity level in the market, we have not fully passed through supplier price increases to the consumers, but also cost associated with high rental levels and salary increases negatively impacted the profit. Moving now to next page, page number 9 and let's talk a little bit more about Willys. Willys' momentum is indeed very strong. The number of new customers is continuing to grow at a rapid rate and new and existing customers alike are becoming increasingly loyal and shopping more at the chain. On this slide, you see a chart that we have shown before, with the number of new members in Willys Plus which is Willys loyalty program. And the number here is growth by rate. In 2021, the average monthly growth rate was approximately 25,000 in terms of [Technical Difficulty]. That figure went up quite a lot last year to just over 35,000 new members per month on average. This year, the average is almost 42,000, so even higher. And although the monthly growth rate has come down somewhat if you compare it with the last winter, it is still significantly higher than what we saw prior to 2022. And August actually represents the highest growth rate since March. And the total number of members in Willys Plus is now more than 3.5 million. Turn now to page 10 and quite recently, we commissioned a broad survey to dig deeper into the changed shopping behaviors among consumers over the past year. Among other things, the survey covered where consumers usually do their grocery shopping and also if they had changed recently. And 18% of respondents replied that they have changed their behavior and started to shop for grocery in a different store than in the past. Of course, of the consumers that have started to shop at Willys which represents quite a decent chunk of the 18%, a full 81% stated that they were satisfied with their experience. And I should add that only a small percentage stated that they were not satisfied, the rest replied that they were not sure or uncertain. And lastly, when asked about intended loyalty, a very high percentage, a full 78% of new Willys customers stated that they would continue to shop at Willys also when the food price inflation pressure eases. So, to sum-up, many have discovered Willys last year, and in general, they are very happy with the experience and intend to continue to shopping there in the future. This is, of course, a survey and so results should be viewed cautiously. However, with that said, all these figures are very positive sign for us. Let's now move on to Hemkop, then we are now on page number 11 and we'll dig into the Hemkop segment. Net sales growth for Hemkop was strong at 11%. Retail sales growth was 8%, which was higher than the market. Retail sales on a like-for-like basis increased 6% and overall growth for the stores in the Hemkop chain was better than the growth for the Tempo chain. The operating profit for Hemkop amounted to SEK 78 million and the operating margin was 4.4%. And similar to the situation for Willys, positive effects from growth and effective cost control were offset by negative effects from a lower gross margin as well as higher rental levels and salaries. Let's go to page number 12 and I'll talk a little bit more about Hemkop. Hemkop is also performing very well. And this is actually the fourth consecutive quarter in which they are outperforming the market growth. Adding on to that, when looking at Hemkop's performance, you really should be comparing it to the growth in the segment Hemkop is in, which is a traditional grocery. And in terms of that comparison, the outperformance is even more significant. And to us, there are multiple reasons behind Hemkop's strong growth; first they maintain a high pace in store refurbishment, which yields modern and attractive stores. And second, they continue to work on the price value proposition mainly [Technical Difficulty] offering with especially competitive prices on a large selection of products in the stores. Hemkop is also strengthening its assortment in many ways including meal kits and ready-made food. And lastly, Hemkop is solidifying its sustainability position by offering a wide assortment of sustainable and healthy products, as well as providing guidance and incentives to responsible consumption. With that, let's move to Snabbgross, moving to page number 13. At the same time we are seeing a certain slowdown in the cafe and restaurant markets from previously high levels, obviously now, this has an impact to Snabbgross to some extent. However, Snabbgross' affordable and flexible offering have resulted in good growth and it's clear that they are taking market shares in this environment. Sales increased 9% in total and 7% on a like-for-like basis and developments in the newly established stores and sales to consumers through the member base Snabbgross club store concept contributed also to this growth. Operating profit in the quarter was lower compared to prior year and amounted to SEK 86 million corresponding to an operating margin of 6%. Growth in like-for-like sales was offset by negative effects from costs related to new stores and high costs related to rental levels and salaries. Let's now go to the last segment Dagab on page number 14. Net sales for Dagab increased 9% in the quarter, mainly attributable to sales to food retail stores. Sales to convenience stores also increased, however, at a slower rate. And in general, right now the food retail market is stronger than the convenience trade which [Technical Difficulty] reflected here. Throughout this year, Dagab's profit is impacted by cost-affecting comparability related to the new logistics platform. In total, reported operating profit amounted to SEK 280 million excluding costs affecting comparability, the adjusted operating profit amounted to SEK 340 million and the adjusted operating margin was 1.8%. The higher profit was primarily driven by the strong growth, a negative currency effect contributed negatively while synergies from Bergendahls acquisition had a positive effect on profit. And now it's time for Anders to talk you through the financial development in the quarter. So, please go to next page, page number 16, Anders, please go ahead.

Thank you, Klas. During the first 9 months, net sales for the Group increased with 12% to SEK 16 billion. Total sales increased by 16%, which was clearly higher than the food retail market in total, where growth amounted to 8%. The operating profit excluding items affecting comparability of minus SEK 179 million increased by SEK 292 million to SEK 2.8 billion. The increase is mainly explained by the strong growth and effective cost control, partly offset by lower gross margins in the segment and increased costs related to rent and salaries. The operating margin excluding items affecting comparability was unchanged at 4.6%. Items affecting comparability pertained entirely to parallel warehouse operation during the transition to the new logistics center in Balsta. Last year, items affecting comparability included a capital gain of SEK 221 million for the divestment of Mat.se. And let's then turn page to page number 17. And let me then continue with the cash flow. Compared with last year, the operating cash flow was SEK 64 million lower this quarter in spite of strong growth and a stronger underlying operating cash flow. This is mainly explained by negative working capital development and higher interest costs. The cash flow from investment activities of SEK 307 million was in line with the CapEx Q3 last year. At the end of the third quarter, we utilized approximately SEK 1.5 billion of our credit facilities, approximately SEK 0.6 billion more than in Q2. Let's then turn page to page number 18. Coming over to the financial position, the net debt increased compared to last year due to higher leasehold debts connected to the new logistics center in Balsta. Compared to Q2 this year, interest-bearing loans has increased due to higher utilization of the credit facilities although the net debt ratio was unchanged at 0.3. The equity ratio has been fairly stable over the last couple of years. The equity ratio at 22.7% was in line with prior year's Q3 trend except last year's level, which was elevated due to the rights issue. Total investments excluding leasehold for the first half year was SEK 292 million lower compared to last year. Now, we see a lower pace in investments related to logistics [Technical Difficulty]. However, the investment in the retail operation was higher. We have a high ambition of new store establishment this year, and we have already established 9 Group-owned stores year-to-date. We expect the CapEx for the full year in the upper end of our guidance of SEK 1.8 billion to SEK 1.9 billion. And let's then turn to page number 19. As I mentioned before, the cash flow for the first 9 months was negatively affected by the development of the change in working capital, which also has an impact on the net working capital as a percent to Group sales. The ratio is now minus 3.2%. Reversal of this effect is expected gradually in the coming quarters as the warehouse transition progresses. The capital employed has increased over the last years, mainly due to the recognition of leasehold debt which have had a diluting effect on the return on capital employed. However, the return on capital employed is quite stable looking back at the recent quarters. And by that Klas, I hand over to you.

Thank you, Anders, and we are now on page 20 and we're going to look into our strategic agenda and outlook and sum up. But I'm not going to go through our fully broad agenda, as you are well aware, we have a broad agenda for future development of Axfood. Now let's turn to page 21 and I would like to focus today on the progress on our new logistical platform and how this is proceeding. First, our new highly automated logistical center in Balsta outside Stockholm is a large-scale project that represents a completely new way of running our warehouses and logistic operations. The transition to Balsta progressed during the third quarter with a focus on continuing to scale-up and stabilize the operations. A growing number of stores and larger volumes were connected to the flow of the dry range during the quarter and the first deliveries of refrigerated items from Balsta to stores were recently made. In addition to scaling up the center in Balsta, we also continue our efforts to strengthen other parts of our new logistics platform. Planning for the new high-bay warehouse in Backa, Gothenburg is underway and at the new fruit and vegetable warehouse in Landskrona, testing of IT solutions and control system is underway now that when we have the automation solution that has been fully installed. And as a quick reminder, the investments in Balsta is expected to result in SEK 200 million to SEK 300 million in annual efficiency improvements beginning in the second half of 2024, which will then increase to SEK 300 million to SEK 400 million at full capacity. Turn now to page number 22. While we are focusing on delivering affordable good and sustainable food here now and developing our operations to enable greater efficiency going forward, we must not lose sight of the longer term challenges. We recently presented a new version of Food 2030 which is Axfood's proposal for a sustainable food strategy filled with 125 recommendations that can make a real difference in accelerating the green transition. We see it as a leading player in the food retail industry. We want to take the lead in promoting a sustainable food [Technical Difficulty] Sweden, and Food 2030 is an important part of our work to influence decision-makers and drive industry solutions forward. Let's now go further and we are now on page 23. Our outlook for the year is unchanged and it covers investments, items affecting comparability and new store establishments. In terms of capital expenditures, just to reiterate what Anders said, we expect to be in the upper range of our guidance. And for new store establishments, we maintain a high pace compared to previous years, as we see more room for us to strengthen our presence in the market. So far this year, we have opened up 9 new stores, a historically high number, 5 new Willys, 2 Willys Hemma, and one 1 Hemkop, and 1 new Snabbgross. Please now turn to page 24. And if I should try to sum up, in the light of the uncertain world around us, I must say I am humbled to summarize a strong third quarter for Axfood. In our market, which is highly characterized by focus on price value as consumers grapple with ongoing cost of living pressures, we have a very strong position. Consequently, we continue to deliver very high growth in the third quarter; growth that was double the rate of the market, which is in line with the overall trend during the past couple of quarters. It is clear that more and more consumers appreciate our offerings. We continue to see a large inflow of new customers in the third quarter and volume increased. We have a strong financial position and a solid strategic agenda. And together we will maintain a high pace in our efforts to strengthen the Group for the future at least with investments in the new logistics platform, which will bring us efficiencies and reduce costs. Turn to page number 25, and before we go into the Q&A session, just a reminder that our Capital Market Day this year will be held on November 24. The event will be held at our new highly automated logistical center in Balsta outside Stockholm, and it will start at 9 AM and is estimated to end at 1 PM followed by lunch. At this event, we will cover many areas that are of importance for our group, including but not limited to our new logistics platform. And more details around the event is available on our website. And with that, please turn to page number 26 and I would like to hand over to the operator to open-up the line for questions. Thank you.

[Operator Instructions] The next question comes from Gustav Hageus from SEB.

I have a few if I may. Firstly, thanks for the chart on page 9. I think it was really useful to see the cohorts, just to get some more clarity on that, should we interpret that as you have basically gotten 400,000 new customers last year and roughly 400,000 new customers this year to Willys. And if you could -- like roughly how big of a share of sales does those 2 cohorts represent?

Gustav, well, even if we're not sharing exact number of representing the sales, it is clear that the new customer that comes in are -- well, we view them as very positive customers. They are shopping broadly as families into Willys. So it is a clear shift of its healthy customers, if I may say so, that now joins into Willys. And the trend as we have reported. You see, this is a new customer that comes in and the increase in new customers is clearly lifted up over the couple of years now. And which of course is a positive sign and as we try to comment here, even if it's just surveys, of course, it is important for us to understand how they view Willys when they come in as new customers and how they see outperformance and what they like and what they potentially not like about Willys, and I think the number there states for itself, that is we got a very positive response from customers that come into Willys. So you're right that we have lifted up the number of members now to more than 3.5 million members in our loyalty program for Willys.

Sure. And on that survey, I guess, I mean it's really optimistic obviously that 78% say that they will stick with Willys when inflation eases, but that would also, I guess, suggested 22% will not and thus inflation…

No, I think that's what I commented on that, they said they are very positive, but there is also a high percentage that says that we'll see and is just a few percentage, I think 5% or so that they will probably go back. So again a survey, but it's almost 4 out of 5 are very positive today and some of them is uncertain.

Sure. I'm just curious because I haven't seen any inflation since February really. Have you started to see any gross churn in that customer intake or can see that already in your data?

You mean churn that they are leaving or what do you mean?

Yes, or decreasing their share of wallet perhaps in essence, do you see any…

No. Not any significant changes versus what we've seen before. I think as you're saying inflation is not -- food prices are fairly stable, but year-on-year effective inflation rate is going down.

Sure. Okay. And then just nitty-gritty, the electricity support of SEK 60 million, is that a part of your non-recurring items in this report or is that just over the revenue line?

No. It's included in the EBIT.

So not adjusted for in the adjusted EBIT now.

No.

The next question comes from Fredrik Ivarsson from ABG Sundal Collier.

First, maybe a general question, you mentioned in the report that the price increases by suppliers weren't fully sort of offset by consumer inflation. So when I look at the macro statistics on a market level, of course, the CPI PPI Delta has been positive for a few months as you know, so how should we, sort of, read this macro statistics versus your statement here? And when do you think that this sort of pattern might revert?

No, of course, that macro you're looking at is in a broad scale and it's not that there has been a dramatic change, but as we have reported, when we got this high inflow of price increases that was not fully reflected in the consumer prices, I would say overall in general in the market and we still have not reached that level, but as I pointed out, we have not seen many price increases recently in this quarter. So that has not changed, but you have not lifted up, but the gap hasn't narrowed yet and obviously there tends to be a time lag in this.

Yes, of course, still somewhere to go I suppose. Good. And second one, you say, positive mix supported in Willys. Can you give some color to this statement because it was somewhat, I guess, surprising to me given that there is still, I assume some downtrading in the market, so.

Yes, it's more related to what we've seen. You had a higher negative effect where you got even further increase versus if you look at year-on-year. So it's just a minor lift up on that versus, but it's still also versus year-on-year. So you're rightly so that, you know, you still have people buying campaigns, but there is a minor change in terms of -- could be seen as more of a, going back to a little bit more normal shopping behaviors, but it's early to say.

And then a last detailed question on the negative FX impact in Dagab, if it's any chance to give us a ballpark figure on that impact?

Well, we haven't outlined that, but as you are well aware, and if you look at it, it is significant negative FX effects at this stage and so we are still not around that part, even if we're not giving out the number we have commented on it because, of course, it's a big hit.

The next question comes from Daniel Schmidt from Danske Bank.

Couple of questions from me and we talked about sort of the consumer behavior and you mentioned it few times and also the inflation being sort of flat-lining since February. Is that sort of just a coincidence that also private label share of your sales is also coming down since the start of the year, is that a sort of a function of what you mentioned in terms of normalization of behavior?

I'm not sure I would like to say it's coming down. We have seen and I don't think…

Yes. It's up year-over-year of course, I'm just saying sequentially.

Yes. The trend is there and I think for us it's, we see a very positive overall trend of our private label that has steady growth and of course you have some seasonal effects around that, but you have to look at it overall of the long-term trend. And I still think that is gradually improving in terms of growth rate for us or share of sales and obviously, this is an impact for us where we want to launch more relative products that the consumer likes to see and likes to have I think Garant is doing a really nice job now adding also more sustainable products into the assortment and we're driving that agenda. So I think the development there is in the right direction. You cannot see it as a you know any change which you started to see I think, not at least.

It's more seasonality than basically.

Yes.

Then maybe jumping onto Willys and I think you also mentioned that Eurocash performed well in the quarter. Was that a similar growth to what Willys had basically.

Well, I won't say it's at Willys level, it is a healthy growth. And as you know it's been a discussion around that where we see how is the trading, on the cross border trading. And as we know it's been slightly, the traffic over the cross border has been slightly lower, but we are on a healthy base here, particularly where we were before the pandemic and all of that. So I think they're doing a good performance and they are showing a good growth. So now Willys' exceptional but Eurocash is doing a good growth.

And then maybe on sort of the new store target that you always have for each year and you have 10 to 15 this year and I think you were at 9 year-to-date, leaving Q3. I assume you know where it's going to end up with, do you know what the number will be leaving 2023 behind.

Yes. We will be good in the range, if I say so, it will be in the good range.

And on that topic you also had I think at the last CMD, you gave out target for Willys stores 25 new stores on 2020 to 2024. And I think you're at 20 now. Is that sort of well within reach to get to 25 a year from now?

If it's 5 more to go you mean.

Yes, exactly.

Well, I think will give you the guidance now in -- when we report the fourth quarter, we'll give you guidance on that in terms of number of stores, but I want to point out that we see still obviously a lot of opportunities for expanding our store network. Then it's connected with many things in terms of where we can find locations where we can get the authority to approve food retailer. And also as you may, I mean, I'm sure you're aware of, of course, there are lot of things are going on in the building market where some projects is being delayed and some is moving forward, but we'll give you a more specific number when we come few months from now.

Yes, sure. And then finally just you also mentioned, Klas, that the food retail market is doing a lot better than the convenience market and of course makes sense. But also sort of looking external sales for Dagab, which I think were down 3%, is that also including City Gross and how is City Gross performance in relation to what we just talked about.

External sales includes also City Gross and it includes -- we have several players in the external part, some of the larger one is of course is of course, City Gross and Mathem but also a lot of other actors in that. So, you're right that our internal part is moving better forward at this stage, but external one is a little bit lower, is lagging a bit.

And City Gross doesn't stick out when it comes to that particular part of your sort of sales exposure there somewhere in between what we just talked about or.

Well, I don't want to, you know, in terms of City Gross, specific performance on City Gross or any of our external customers, I leave that to them to comment on their performance.

The next question comes from Simen Aas from DNB Markets.

So I have 2 questions for you. So firstly, can you say something about the competitive environment right now? Now that we see that volumes are improving in the industry, do you believe that gross margin pressure should ease going forward and into next year? That's my first.

It's a relevant question, of course, but I mean, what we see is, it's still a very competitive and high activity level in the market. I can only reflect on that overall market growth as you've seen is like 6% and obviously, that is still some volume pressure in the overall market. If it's better now, the gap is improving, the volume is going up, which of course is more positive both that we're getting more consumers back to the overall shopping, but also in general terms. So how this will develop, well, I cannot comment on how the other will actors will act up.

Okay. And then lastly, can you say something about the synergies from Bergendahls. How much is taken out and how much is left on that one?

Well, I think we are in good line with what we said that we were about to do and then of course we are now trimming and working with details on that, but we are moving in line with the target that we had for this year.

The next question comes from Anna Schumacher from BNP Paribas Exane.

I have a couple, if that's okay. Just another question on the competitive environment. Your main competitors ICA and Coop have been open about the price investments they are making, how has that impacted your pricing strategy?

Can you reiterate the question. I'm not sure I understood. It was kind of low quality on the voice there. So take it again, please.

Sorry, just another question on the competitive environment. Your main competitors, ICA and Coop have been open about the price investments they are making. How has this impacted your pricing strategy?

I understand. And well, I think that the whole market has been acting in terms of the -- as we point out in this report is that the price increase that we have received from our suppliers is not fully reflected out in the consumer price. So that is an effect, you can call it an investment or you can call it an effect of the competitive landscape. So, we are still not seeing the full price reflection of what we see from the suppliers yet, that we see that in the report as well. So that is the consequence.

And then you commented that you added new stores to the distribution [indiscernible] and other refrigerated foods, how is it going so far?

No, it's going well. I think in this fall, we've added more stores in the dry range. We have one big move step to do that journey and the chilled refrigerated product is also doing well. So it is a big project. We are taking it step by step to make sure that we keep quality in our deliveries to our stores. It's a fully automated, high technical warehouse and obviously, we are learning every day, but we're also taking good progress -- have very good progress in taking the steps in this transition.

The next question comes from Magnus Raman from Kepler.

Firstly, I have 2 questions here. Firstly on Balsta, these savings targets that you set at Balsta, I guess you had set them already a few years back, and since then we've seen particularly Willys perform very strongly, and could that possibly mean that volumes have grown faster than what you sort of budgeted or expected at that point, when you set the target and thereby that capacity utilization and savings in Balsta proved to be either larger or come earlier than what you have expected.

It's a good relevant question, obviously, as we have guided a bit on the starting phase and then also at full capacity. And obviously continuing to see good growth and we will reach fuller capacity earlier. But we're not there yet. And it's a lot of trimming and it's a lot of learning in that. So I think the guidance that we have, we stick to that, but obviously you're pointing out that continue this trend that we see, we will reach sooner the full capacity and the full savings earlier if that's the case.

Then I have another one, maybe that's for Anders, I'm not sure, but it also relates to, in one way to Balsta. You mentioned here in the report rent levels as a one-off pressure point. How might this be changing when the old warehouses will be discontinued, I guess, in H2 or something next year?

I wouldn't say that we have any big effect on that, Magnus, actually, but of course we are in the middle of double rents now, so you can expect that the rent levels, everything else equal will drop somewhat going forward.

The next question comes from Gustav Hageus from SEB.

Just a follow-up relating to, there was a bit of a news in the local trade press this morning on the 3 Hemkop stores that were converted into ICA. Can you just remind us, is this sort of happening from time to time or is this a unique situation, and what if there's anything that is behind their decision to move from your concept.

No, we see from time to time that independent or some franchisors are moving from one concept to another concept. So that have happened historically and this is another example of that. I think it's, -- we're sad to see them leave particularly now when Hemkop is doing such a good performance in the market but that's their choice and we wish them the best. But to answer your question that have happened historically and sure will continue to happen as well where we see some of the retailers changing.

[Operator Instructions] There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

Thank you. And I just would like to end up with saying thank you for dialing in. And thanks for the questions. And I would like to wish you a good day. Thank you very much.