Essity AB (publ) (ESSITYB) Earnings Call Transcript & Summary

Good morning, everybody, and welcome to Day 3 at the conference. It's my great pleasure to welcome to the stage, Fredrik Rystedt, Executive Vice President and Chief Financial Officer of Essity. Fredrik's going to give a presentation, and then we'll have time for a good Q&A session at the end of that. So Fredrik, thank you very much, and over to you.

Thanks, Tom. Thank you. So let me just start. I'll try and give you a good picture of what the situation is pretty much now and of course, perhaps more important. What are we doing in the long term? So first of all, we are a leading and of course, obviously, global hygiene and health company, and our purpose is to break barriers to well-being. So very, very clear purpose. And to give you an overview, this is what we looked like in 2021. So a turnover of roughly SEK 122 billion, so equating to about EUR 12 billion, profit of close to 14 billion. We're in 150 countries and roughly about 46,000 employees. So just to give you a bit of a picture, and we are divided into 3 business areas. We actually just recently changed that as of January 1. So health and medical, consumer goods and professional hygiene. So if you start to the left, there health and medical, this is where we have our Medical Solutions business. This is also our incontinence healthcare business. So same customers, same way of addressing the go-to-market. And this is representing roughly about 20% of what we do, more in profit, but in terms of sales, roughly about 20%. We take consumer goods, these are all a retail consumers all over the world. And what this is, is feminine, it's incontinence retail, it's baby care, and it's also our consumer tissue business. And you can see the brand names that we use there underneath the different pictures. And the final part, so consumer goods representing about 60%. And if you take Professional Hygiene, the remaining 20%, that is basically hygiene solutions like tissue dispensers or soap or sanitizers for the B2B market. So if you look at these -- the market positions that we have for all of these 3 areas, you can see it's basically global leading positions for all of them. So we're typically very strong wherever we are. Some of these numbers here, you see #5 and 6, which may not sound that impressive. But that's not because we're small wherever we are. It's a matter of geographical presence. So if you take feminine here as an example, wherever we exist in any of the markets we are, we're typically #1 or #2, but we're simply not existing in every market. So generally, very strong market position. So you can clearly see that from this slide that if you take here our branded sales, which is the absolute dominating part of what we do in 90% of all the branded sales, we are in a 1 or 2 position. And these global market positions have actually strengthened throughout several years. So this is not just now. It has increased. And right now, if you just use this year as an example, you can see that 55% approximately, there about of our market positions or market shares are continuing to strengthen. There's a small part that's contracting somewhat and the rest is roughly flat. So we're continuing to strengthen the market positions also in these tough times. And this is a bit something we're quite proud of because we are more aggressive and we have been. We know that in terms of price increases to compensate for fluctuations in raw material, et cetera. I'll come back to that in a second. But we have been more aggressive than every one of our competitors to continue to take market share is something that we are really very proud of. Now we have set very clear and ambitious financial targets for what we do. So if you look at the annual sales growth, it should be more than 5%. And this is divided basically in 2 parts. So the organic sales growth more than 3% per year. And we're basing this on an expected kind of overall global market growth of 2.5%, 3% roughly, and a continued ambition to take market share. And the remaining 2% of acquired growth is basically what we have done and what we believe that we are generating, self-generating in terms of cash flow. And there are many, many potential targets in the pipeline. I'll come back to that. The second target, adjusted return on capital employed more than 17% by 2025. Actually, in fact, we changed that target from more than 15%, just 1.5 year ago in 2020. And the reason we actually changed that to more than 17 or increased it was simply that we actually reached our own target in 2020. So this is still the target, and we are convinced that we'll get there. I'll show you that later. Good. So just to give you a bit of history here, this is -- perhaps it's always more interesting to look forward. But nevertheless, looking a bit on history, you can see that we have continuously delivered on our sales growth. We've had a very, very good development, and the same goes for, of course, the operating profit. Now from this slide, you can very see -- very easily see the impact of the pandemic. We have a large sale to, for instance, the hotels, restaurants and catering, in Professional Hygiene business. And there's been many other impacts from the pandemic. So it's very clear here to see. And now, of course, we are recovering quite quickly in terms of sales. When you look at the EBITDA, and you also see here, obviously, the impact on the margin, very clearly, you can see the impact of inflation or super inflation or whatever you call it here in the last year 2021. And of course, this is still ongoing. So obviously, you can say, in the midst of a quite turbulent period, and we've lived through now a few years here, a very challenging environment with the pandemic and, now of course, the war in Ukraine and very significant inflation, but we have mitigated quite a lot there. Many of these impacts, and perhaps equally important, we have continued to execute on our long-term strategic agenda. And I won't go through all of these, but just to give you a couple of examples, if you just take this quarter, first quarter of 2022, we increased the selling price or the average prices on our consumer goods category with 7%. We did the same 7% for Professional Hygiene, a bit less on the health and medical, simply because it's a bit more rigid to that market and the need for price increase is slightly lower. But you'll see much more price increases as we now go along in -- going forward here in Q2 and of course, thereafter. We've continued to maintain a low cost base. And as I said, we continued also to look forward in terms of innovation pace. We have not slowed that down. We have not taken out marketing spend. We are continuing to build our brands, and of course, our general platform. And we have strengthened, which is incredibly helpful. And here, this is one of the very few areas where the pandemic has actually been helpful. We strengthened the e-commerce growth. And now as a total of our sales, it represents 14%. So very helpful. All of those investments we have done throughout many years in e-commerce actually paid off. But you can see here, we've also done a lot when it comes to the long-term agenda. I'll come back to that, but we've made several acquisitions. We continue with our digitalization journey. We continue with our sustainability road map and many more things. It's quite easy in turbulent times that everyone just gets very focused on the short term, and it's incredibly important that we do that and manage the result better than competition. But it's equally important for the long-term value creation that we execute on the long-term agenda, and we've done exactly that. So I'll turn a bit to kind of, yes, the future looking, the strategy, what are we actually up to? What do we want to become? And just to start, perhaps with the absolute obvious, we feel privileged. I think we are privileged in the sense that the general market trends, the world trends, of course, working in our favor. And just to mention a few here, growing in aging population is, of course, an obvious benefit for people like us in the business of incontinence or Medical Solutions as an example. The general -- and I think you will notice that yourself. There is an increased awareness about hygiene and health and of course, also the connection to well-being. It's been strengthened a lot by the pandemic and, of course, very helpful for us. And we are also in parts of our business into chronic diseases. And here, obviously, age and other things is, of course, continuing to increase the prevalence for such conditions. So generally, these are just a few examples. These are basically the priorities that we have. These are the strategic priorities that we have. So we will continue our transformation journey. We are, of course, and this is absolutely essential to continue to innovate because if we don't, we just basically die. And if we do, we continue to strengthen our brands and we prevail. We have to digitalize and are so tremendous benefits in doing just that. Sustainability is, of course, an absolute mass, but it's also a business. It's a very, very profitable thing to engage into. So it's not just a must, it is also quite profitable. And we continue our spread to grow in emerging markets. I'll show you a little bit on all of these. And to start with the transformation, some of you that know us will know that where we want to allocate, over allocate resources is in the high-yielding parts of our business. So basically, you would find Feminine there, Medical Solutions, Incontinence retail, Professional Hygiene and at least parts of that whereas if you look at baby and consumer tissue, those are areas which should be value-creating. That's their financial role, but not to be growing more than the market. And the ambition there is to support growth in the other areas. And when I talk about basically expanding it's both inorganic and organic. So just as examples here, in the last 15, 16 months or so, we have continued to do acquisitions. And 4 out of these acquisitions that we have made has been in the medical space, but we've also continued to expand as an example, in the Personal Care and Professional Hygiene space with Asaleo Care and Professional Hygiene with wipers and cleaners, very, very high gross margin products with legacy converting in the U.S. there. So it's a very active M&A agenda, and that will continue alongside the organic journey. Now I talked about the innovation and of course, I mean you meet so many companies here, they all be talking about innovation, but it is for us extremely true, of course. And if you look back, we have generated approximately about 1% of increase in sales per year from our innovation. So we have speeded up our efforts in this area, and we will continue to do so and put the relevant marketing spend behind it. So this is very key for the expansion and continued fulfillment of the target that I described earlier in terms of margin and sales growth. So this is incredibly key for us. The digitalization area, I can speak for a couple of hours on this, and I won't do that. But obviously, I mentioned before the advantages that we see on e-commerce. And we've set there a target that we should be bigger in every market we are in every category. We should be bigger in the online side than we are in the offline. That's the explicit target because, obviously, if the e-commerce side is growing faster, then over time, we will grow on the absolute market share, and with a couple of very small exceptions, we are actually. So we are -- we have a very, very favorable position on the e-commerce side, and we'll continue to invest into that part. Digital Solutions, I can talk a lot about our sensors for bladder control or for incontinence where we were able to, even you if you have an elderly person that needs incontinence product, you can track whether it needs to be changed on your phones as an example, or we have dispenser based or sensor-based dispenser systems, which makes cleaning for janitors and cleaning companies, highly efficient and many other solutions, and you'll see a lot more to come in the coming years. And actually, just -- it says your digitalization and operations, perhaps that sounds pretty obvious to everyone. But I was in the last couple of days, I've been in Spain, I visited our hub in Barcelona, where we do now statistical forecasting, machine learning, demand planning. We do automated supply or production planning for our -- by line, by SKU for all the world pretty much in 1 hub and more or less optimized. And we also basically direct all our transportation from that hub. It was a fantastic experience. The only negative side, it made me feel very old because I think the average age was kind of 26 years old. They had at least 2 degrees and 3 previous jobs. So it made me feel a bit lazy and a bit old, but it's amazing what we can do with the digitalization. We do the same in the plants. We have now virtual sensors that control every step of the production process. We are the only ones doing this so far, and it creates an advantage. So there are many, many ways. And as I said, I can go on for a long period of time in this area. Just as a final thing, maybe to say here is that, perhaps it's not the best timing in the world, but we are in the midst of changing our entire ERP platform. And we put the first pilot in place, 2 May. So it's very much on -- in progress. And of course, that will, over time, enable a much, much better data availability, predictability and analytical capabilities and one of many benefits. Now this is -- I'll talk a little bit about sustainability, and you may wonder why do I have this wonderful picture of a plant. This happens to be a plant for consumer tissue that's all fired with biogas. But I could have showed you a picture of another plant in cost time all fired by hydrogen, or another paper machine that's fired or energized by geothermal or perhaps the alternative fiber plant that we put in place in Germany, utilizing instead of cutting down trees, utilizing waste from our agricultural waste to [indiscernible] and we manufacture -- pulp from that pumping it directly into the paper machine with a carbon emission less than 50% of ordinary carbon. So there are many, many activities just like this. And of course, sustainability is, as I said, a business for us. We do many -- and we are into products that has an impact on environment. And of course, changing that, making products more reusable or recyclable or environmentally friendly, in general, consuming less materials, less energy, that is a very, very primary focus for us. And you see a couple of examples here with washable underwear, and you will see much more coming in that area or reusable microfibers in the professional area, or [ menstrual cups ] as an example. So of course, a very exciting area for us also in the product field. Now also here, I could speak for a long time, but we've set very rigid targets for pretty much all areas of ESG. So everything from diversity, equity and inclusion to the environmental parts like plastic. And in this particular case for carbon emission with the science-based targets and the net zero ambition for 2050. And these are not just statements on this slide. These are not just numbers that we put here. We have very rigid plans for exactly how to get there. So of course, once again producing good results for the group. This is bragging slide, you can say, and it's pretty much useless in the sense that getting recognitions is -- there is no value per se in doing that, but it is nice to still being recognized for something that we put so much effort into being triple rated by MSCI or Diversity Leader by Financial Times. It is actually still a good feeling and self-confidence building for the organization. So the final part, growing in emerging markets. We continue to do that. Asia, Latin America, Eastern Europe, parts of Middle East continue to be very exciting areas. And what is actually good is that, over time as these markets have matured a bit for us with game scale, the contraction versus mature markets in the margin gap as is very clear here to see. So it used to be incredibly costly to grow in these parts of the world, much less now as we have gained in premiumization as we have gained in overall mix and, of course, not least scale. So we will continue, and we want to be, as an example, the fastest-growing hygiene and health company in Latin America, and we are. We want to grow very fast in all of these areas, and we are. Improving efficiency, well, manufacturing road map is one of these names that we use. It's a project divided in many, many areas, but we want to continue to build scale and efficiency in our manufacturing operations, our logistics operations and needless to say, also in procurement. And there is a very rigid program that we expect to generate roughly between 500 million to 1 billion a year. And these are net numbers. These are not just savings on one area, and then we take a lot of cost on the others. This is basically also including inflation and other things that may increase the cost. So it's in a very ambitious plan, and we will continue to execute on that so far, so good. We look at the SG&A side, we do many things. I talked about digitalization before, but we've just put a business service center in place where we consolidate -- or 2 actually, where we consolidate pretty much a lot of the administrative tasks in the group, creating more scale and, of course, a higher efficiency. And the cost culture, as you've seen for many years, is very, very strong within the company. So maybe to kind of tie all of this into our financial target, the 17%. So if you look at last year 2021, where was it? It was 12%. And the year before 2020, it was a bit over 15%. So you can say isn't that kind of bold to say we are going to get to more than 17% by 2025. Yes, you could argue that seems a bit tough. But let me take you through how that's going to work because that's still our commitment. That's still our conviction. And the reason is quite simple. When we set those targets, there were basically 4 reasons for I believe that 17% was a reasonable ambition. And the first one was obviously that we have generated through innovation and of course, stronger brands. We have continuously increased our margins through that. And it was our assumption that we will continue to do that. We have seen that's also happening. The second thing was continued efficiency through manufacturing road map. We have continued to do exactly that. The third was the digitalization projects that we are engaged in or the many projects also there we are continuing to execute. And the fourth and final was to grow more in the high-yielding areas. That was the bridge between the 15% to the 17%. Now there was one final assumption that's kind of key. And that was that, whatever happens on the raw material we were going to compensate by price. Price alone. Not mix, not volume, but price alone. And you can say, is that a fair assumption? Yes, pretty much because we have always been able to do that with the time lag, but we've always been able to do that. So when we set that bridge between the 15% and the 17%, our assumption was that pricing was going to be stable, raw material is going to be stable. Now obviously, if you look out the window here, it's obviously not what life has been like. We have seen very significant increases in distribution costs, obviously, energy costs and not least lately, and raw material has completely skyrocketed. So you can question, is it realistic to believe that we can have that assumption? Can we compensate all of these cost increases through price? And I'm sure you all have discussed what's elasticity and perhaps down trading issues throughout these last couple of days. It is still our assumption. We are engaged into products, which is essential for the everyday life of our consumers. And it's not a major part of disposable income. When we look at historic crisis, what we have seen there is that, yes, we see down trading. We don't see much of volume loss because of the essential nature of the products we sell but we see a bit of down trading and especially so in emerging markets. And what happens there is, people obviously, if you have a large unemployment or just a reduction of disposable income, what happens there is a people cut on everything. So they'll cut on all their purchases, but after a while, after some period of time, they realized that what we -- what they buy from us is not a major part of their disposable income. So after a few months, they go back to buy the quality they're used to because that part they can afford. So typically, the down trading that we have seen in history has not been long lived. It has been there, but it has not been long there. So our assumption is or was and it still is that we will be able to compensate by price. Needless to say, we have not seen this kind of development before. So the proof is in the pudding to put it that way, but this is absolutely our assumption. So basically, if you see this, a significant part of that increase from the 12% to 17% will have to come from price. Now originally, when we set the margin or the ROCE difference 15% to 17%, most of that was going to come from margin through the measures I talked about. And now -- so roughly about 2% of margin increase. Now that margin increase will be 2% as before from the activities I mentioned, plus the average price increase that we have to achieve or recover as you can say. So in short, we are still convinced that we will be able to reach the 17% as we have previously described. So perhaps finishing this presentation. Here, you've heard a little bit on the short term, of course, but also on what we continuously execute on every day for the long-term value creation and strengthening of the group. Needless to say, if you look at 2022, there is a significant focus on achieving price increases and we are. We are doing that just about everywhere. We are maintaining very robust cost control and low cost levels. But as I said, we're also continuing on our long-term strategic agenda. Thank you.

Thank you very much, indeed, Fredrik. [Operator Instructions]

Where would you like me to sit?

Here? Why not, here and the other side. So maybe if I kick off the questions, you obviously mentioned the priority of price increases, perhaps you could walk us through the timing of the price increases, say something perhaps about the scale and what the impact of on-demand you've seen from the price increases that you've put through some more detail that would be great?

Yes. I mentioned what we achieved in kind of the first quarter or compared to 1 year ago. And we've also said that we will continue that execution, and there will be very significant price increases, as an example, in this quarter. So obviously, we'll disclose that when we disclose our Q2 report, but there will be significant price increases, but it will still not be enough. We will not be done by Q2. We'll continue in Q3, we'll continue in Q4 and thereafter. So the thing is that our assumption is not that distribution costs to raw material will now kind of stabilize and then fall rapidly. We assume we're in an inflationary environment. So I think what we will see ahead of us is continuous increases. We'll see that, not on the level necessary at this point of time. It's not huge or massive, but it will be continuous increases. And you'll see that happening. I think the way we execute is a bit different by geography. So typically, we're much faster in areas like Latin America and perhaps China, you could argue and in many emerging markets. In Latin America, as an example, they're much more flexible because of their fluctuating currencies in Europe much more rigid. Generally, there are also differences between the categories, but we execute as fast as we can.

And maybe you could say something about expected demand elasticities across different parts of the group as you push through in the product portfolio, as you push through price increases, [ I mean actually ] you mentioned historically some trading down in response to some price pieces even if that was temporary. But are there any particular areas of the portfolio you think are more susceptible and maybe adjunct to that? Is there a margin impact of if there were to be any trading down gross margin or operating margin impact for this?

Yes. So this is easy to describe in terms of history. It's really simple because we've done tons studies on exactly that. So we know that if you look at kind of down trading, as I said, the volume impact -- also if you look at the kind of financial crisis in the early '90s and 2008, '09 or any kind of historic crisis, you can see that the volume impact is really small. So we just don't have that. And it's obvious when you think about it, I guess most people will continue to actually consume bathroom tissue, as an example. They have continued to use diapers for their babies. Occasionally, you can get in some countries, perhaps you can get slightly less usage, but overall, the volume impact is small. So the down trading is more the factor. And as I mentioned, that has historically been predominantly in emerging markets, and it's been short lived. Now that's history. Looking forward, we just don't have any data points to compare with. So we can only see what's actually happening. As we said in Q1, we didn't see any down trading. Our expectation would be that we should see it. We should potentially, with these kind of price increases and general inflation, we should probably see that in -- also in mature model. So that would be our expectation, but has never been huge, right? So also in times in the emerging markets, it's more kind of in the range of 1%, 1.5%. It's been in that range. So yes, there may be an impact. But to be honest, we cannot actually say that at this point. We can only look at history and then it's only marginal impact, could it be bigger absolutely.

[indiscernible]

Yes, it's a good question. And so when you say I seem very confident, yes, I think -- obviously, it's always difficult, especially these times to forecast the world. Why? I mean anyone has a problem doing that. But what we can basically say is that we are executing on the activities necessary to do that. Then, of course, now if you look at the more longer term, manufacturing efficiency is one of the measures, and we are executing on those productivity improvements. I mentioned digitalization as an example, increasing machine efficiency or transportation or whatever, all of those savings we are executing on. I think when you look at innovation and the mix improvement still happening, in fact, we have increased the speed of our innovation. So those 2 incredibly important parameters we are executing on. If you look at the digitalization, we're doing it in terms of revenue management systems in analytics systems, the general ERP platform and the general efficiency created by all of these measures. So we're executing on the long-term agenda. And then I think the final kind of piece of that parcel beyond just general growth in the high-yielding areas, is this, as I said, the pricing. Our assumption is that we will be able to compensate. As we have done in the past, all the kind of cost increases that we have with price. We have been doing that in the past, and our assumption is still that's the case. Nothing would suggest to us that's not possible. But of course, that's the question mark.

You mentioned the level of innovation being higher. Obviously, you are going alongside that is perhaps the commitment to A&P is the commitment -- commitment to marketing to go alongside that. Is that right that we should have that assumption that as that commitment to the levels of A&P and marketing expenditure, or is that something that you may look at in terms of cost savings at all?

No, I don't think -- honestly, Tom, I don't think we would look at that in the sense of reducing it. And there are a couple of reasons for it because basically, there is a limit or there is an optimum how many innovations a company to put on the market. So there's no point in generating a great innovation if you don't put the appropriate amount of selling efforts behind it or the appropriate amount of marketing money. So it's all just one big puzzle, you can say. So we will continue to innovate. But if we do that, we also need to put the marketing spend on it. So I think, yes, we will continue to invest into marketing. And the other point, just making the obvious statement here is that, I mean, we got roughly about 5% of our sales in terms of marketing costs, just A&P, just to take that as a rough number. And of course, if you look at the magnitude of the cost increases, it's just massive, right? So it's obvious that you cannot save in A&P and fix your margins that you need to do in just big measure or multi-activity program, as you said -- the most important is their price and the continued innovation. If you look at our marketing spend historically, it's been very profitable. We measure it. It's very profitable. So innovation, combined with marketing is very profitable. So no, we wouldn't actually take it out.

And one of the factors over the last couple of quarters, I suppose, has been the apparent stress. So maybe other players in the industry and their ability to serve complete contractual requirements may be there are a bit more pressure. They may be under a bit more pressure than yourselves. So maybe putting -- could you describe or talk about your ability to serve versus the peer group and your competitors and therefore, the ability and potential to take some share due to the fact that you're perhaps able to cope with some of the stresses in the different mood?

Yes. I mean the first obvious statement is that it's -- you can say, it's good when competitors are struggling. But to be honest, that's not something we perceive as good generally, on kind of good conditions for the market in general. But we're incredibly proud. And this is not just now, this is throughout the pandemic, and now, we have not stopped our machines. We have never stopped to deliver to any single customer. Throughout this period of time, we've kept everything open. And we have done that with reasonable or good service levels throughout that. Now obviously, we have a more favorable cost position. We have typically higher margins than most of our competitors. So in that sense, we're more resilient. And recently, you saw that we continue, despite being more aggressive than everyone else, and I mean everyone else in terms of price increases, we have continued to take market share, I think one of the reasons is exactly what you mentioned. We have been capable of delivering and some others not.

Okay. One of the things maybe interesting from your slides, obviously, there's the increased sustainability aspect part of your product portfolio. So just interested in the demand levels for more sustainable products as you're bringing those as a larger or maybe advertising renting the sustainability criteria. Is there a -- is that leading to what level of demand are you seeing for those products?

No, it's great actually. I mean, 3, 5, maybe 5 years ago, people, everyone was kind of still aware of sustainability aspects and they would perhaps more look at sustainable products as a preference, but not that willing to pay more. These days that it has changed very much so. So there are many segments of the market building up where there is a price advantage for actually providing. I mentioned before that -- this is not a cost, the way we look at it. This is basically beneficial. So if you take washable underwear as an example, you could argue if you sell single-use laminin products, and quite big volumes of that isn't that detrimental if you then start selling 1 or 2 or washable underwear instead, wouldn't that be kind of detrimental, not at all, in fact, because gross margins on these products are much, much better. And of course, if -- although the absolute volume is a bit lower, it is also for profit or mix purposes, very beneficial. So this is good for the consumer. It's good, obviously, for the environment and with plastic usage and it's also helpful for us. So this is just 1 tiny example. All the examples I showed on the operational side, same thing. So -- and of course, obviously, energy savings also beneficial. So this is not something that you do reluctantly. This is something that we do very progressively and actively and profitable.

And the final question is just in terms of mobility impact, positive or negative...

Sorry what was the word? Mobility.

Mobility actually -- necessarily comment on China lockdowns in winter, but perhaps in the rest of the business, are you able to talk about the impacts of reopening and whether that is happening at a level in line with your expectations in the professional side of the business and the impacts maybe on parts of the health-related categories as well.

Yes. I mean, you specifically mentioned China now, I guess, right?

Mentioning China, if you can make some comments on that, but also in items of the rest of the world as well.

Yes, sure. I mean if you look at just generally speaking, for us, most of our markets are very fast recovering in trans-Professional Hygiene. So we're still below in terms of volume for net sales were a lot higher than we were to pre-pandemic for Professional Hygiene. In terms of volume, we're still 5% or so below. So we expect that to recover in full towards the latter part of this year or may be next, but overall, in terms of sales, we're back. So from that perspective, recovery is quite strong. Specifically on China, I think this is a much trickier thing. And I probably don't know much more than you do in that sense. Of course, they maintain their very rigid COVID policy, and they reopen and then they shut down. If you specifically talk about Professional Hygiene, it has been a bit problematic or not really regain volume from the start of the pandemic. And of course, obviously, lockdown is not good. So China is currently not a great market, obviously. But over time, they'll open up.

Okay. Well, we'll come to the end of our time, Fredrik. Thank you very much indeed for your time today. And thanks very much everybody for joining the sessions.

Thank you.