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

Good morning, everyone, and welcome. Welcome to Gothenburg, and welcome to Essity's Capital Markets Day 2026. It's great to see so many of you here. And we also have a strong virtual audience and a warm welcome to you as well. My name is Sandra Aberg. I'm Head of Investor Relations, and I will moderate today's session. We are here at our largest office. This is our global center of excellence. Here, all our key functions are represented across business areas. We have R&D, we have procurement, we have our commercial teams. Last time we met, we talked about accelerating profitable growth. Since then, we have made solid progress in many areas. Today, we will be taking this further, accelerating progress by sharpening our focus and execution. To tell you about the actions and the key initiatives that we are taking on, we have prepared the following agenda. We will start with our CEO, Ulrika Kolsrud, and we will have a short Q&A included here. After that, we will turn to our business areas, and we will start with Health & Medical and then move to Personal Care. After Personal Care, we will have a bit of a longer break. And when you're back, we will continue with Consumer Tissue and Professional Hygiene. Then we will take a step back and look at the full picture as our CFO, Fredrik Rystedt, will take us through the financials. Then we will conclude the day with a Q&A. So I encourage you to take note to the presentations you remember all the questions that you're going to ask. And we take questions from the room, but also from our virtual audience. So please, if you're joining online, submit your questions through the platform. After the questions, it's time for R&D tour and the lunch. And for those of us who are going on site visit, the buses will leave from here to Lilla Edet or Falkenberg at 2:00. Are you excited to get started? I am too. Okay. Let me welcome our CEO, Ulrika Kolsrud, but before, this is Essity. [Presentation]

Thank you, Sandra, and good morning, everyone. Also from my side, warm welcome to this Capital Markets Day in Gothenburg, in the Gothenburg office that I consider the heart of Essity. Besides what Sandra talked about, this is the place where many of the unique solutions and offerings that we have in our portfolio have been developed over the years. It's also very special for me to welcome you here today since this is -- has been my workplace for many years. Now since I stepped into the role as CEO some time ago, we have made a review of our business, a thorough review to identify improvement opportunities to make sure that we have the best possible conditions for profitable growth. That has resulted in that we have taken some initiatives, and it's -- for one example that we have done is that we have reshaped our organization. So today, we are working in a simplified organization, decentralized where we have end-to-end accountability. With that, we become faster in decision-making, faster in execution and not the least faster in responding to evolving customer and consumer needs. Another initiative that you recognize, I think, is that we have in connection to our reorganization, we have also initiated and are executing on an SG&A cost-saving program. And that will free up resources that we intend to invest further in further growth. We have also completed an M&A, an M&A that is expanding feminine care into North America, and that is also creating a growth platform for Personal Care, our Personal Care business in that attractive geography. One other thing that we have done is to really review our optimal portfolio composition to maximize value creation. And what that has resulted in is the initiative to do a strategic review of our Consumer Tissue business. And let us stay a little while on that. So our Consumer Tissue business is a very strong. It's a great business in our portfolio. It has strong offers, many unique offers and offerings. It has leading market positions, well-established and strong customer relations. And over the years, we have improved the performance of this business quite considerably. And also, when you will listen later on to Volker's presentation, you will see that we see the potential for further value creation in this business. At the same time, as you all know, we have the ambition in Essity to drive a portfolio shift where we make sure that a bigger part of our portfolio is with the highest value-added and highest return products and categories in order to unlock the full potential of Essity. So the intention, the aim with the strategic review is to create the best possible conditions for both Consumer Tissue as well as for the group to develop to its full or their full potential. So we will assess different strategic alternatives. What you, of course, think about then is that one of those alternatives could be a separation. But I want to emphasize that no such decision has been taken. So we will also continue to develop the Tissue business, make sure that it's as successful and value-creating as possible within the Essity portfolio. And you will see what those plans and priorities look like when Volker presents later today. Now just a short reminder of what we're talking about when we talk about the Consumer Tissue business. We're selling toilet paper, hand-house towels -- household towels, I was going to say. Household towels is the right word. Napkins, facial tissues, moist toilet papers and hankies as well. And we do that under strong leading brands like Zewa, Cushelle, Familia, Regio and also under strong retailer brands and with private label. Consumer Tissue stands for 31% of our net sales, so SEK 45 billion (sic) [ SEK 44 billion ] . Profit margin, 11.9%. And we're talking about some 13,000 employees and 29 production sites. And as I said, leading positions. We are #1 in Europe and #2 in Latin America. I think I'll stop there now, Sandra, to because, of course, later on, you will hear much more about the Consumer Tissue business from Volker. So let's save that for later.

Perfect. We plan to have a short Q&A now on this specific topic.

So we take questions from the floor, of course, but also from those of you joining online, just submit through the platform. I think we have a question already. [Operator Instructions]

Niklas Ekman here from DNB Carnegie. Can I ask a little bit when you talk about the strategic review and of course, recognizing that you are now starting this process, but can you say anything about the different alternatives that you're considering? Is this -- could this be a flotation of the entire business? Could this be a divestment of part of the businesses? And I'm also curious the size of your Consumer Tissue business. Is that something that could be sold to a competitor? Or would that be tricky from a competitive standpoint?

I think as you pointed out, I mean we are just initiating the strategic review, and we are looking broadly at different strategic alternatives. So out of those alternatives, it could be, as I said before, different types of separation. Divestment of the full Consumer Tissue business of parts could also be a spin-off. So different options. And of course, when it comes to competition rules and so on, it depends on different markets, and it looks very different from market to market.

I have a question here. Johannes?

[ Johannes Grunselius ], SB1 here. So I have -- my question on the strategic review is sort of the time frame. Are you committed to any sort of time when you want to sort of complete the review?

No, we're not committing to a specific time, although we will progress as quickly as possible, of course, and also provide regular updates. Looking at this type of review when we are assessing multiple scenarios, our expectation is that, that would take some 6 to 12 months.

Just behind you.

It's Karel Zoete with Kepler Cheuvreux. Can you speak about the synergies of Consumer Tissue on the one hand with -- on the retailer side and the assortment in the commercial space? And on the other end, the integration with the Professional business on the production side?

You basically answered the question. I mean we have dependencies on the commercial side between Consumer Tissue and Personal Care when it comes to our portfolio to retailers, and we have dependencies on the back end in supply chain and in R&D between Professional Hygiene and Consumer Tissue. So that we do. And the impact of that will be part of the assessment.

We have a question from Aron -- okay, perfect. Oskar, please.

Oskar Lindstrom from Danske Bank. Just a question about what is it you're going to do for almost 12 months in the strategic review? Are you already now, for example, beginning with a legal separation of these and operational separation of this business? Or is it merely sort of a desktop exercise that you're commencing now?

It's merely a desktop exercise. So we will not proceed with any of those separation actions until we have come to a conclusion. So it's doing the assessment as well as planning for what that assessment could turn into. So yes, desktop exercise. But it's -- I mean it carries some complexity and it's multiple scenarios. And as I said, we will proceed as quickly as we can.

Yes. I just want to follow up on one of the questions about synergies. Is there any risk of dissynergies when it comes to procurement? And how important is the tissue business in your negotiations with suppliers for things like pulp? And would you then expect to pay higher prices for some of those key inputs for the rest of the business if Tissue was no longer part of your business?

I would say that is also part of the assessments in the strategic review. However, also without -- potentially without the Consumer Tissue business, we will have a big scale when it comes to procurement.

Great. No questions from our online audience. Any more questions here? No, I think that's all. Then I hand over to you. Back to you.

Yes. Thank you. Then we move on. And as -- I don't know if you said that, Sandra, but of course, today, during today, when you do the R&D lab visits and go to the plants and also here today presenting, you will meet many of our highly talented and experienced and highly engaged employees that we have across Essity. And we -- when we come to work every day, we do that with a clear purpose, and that is to create value. And we do that when it comes to creating value for the consumers and customers that we serve. And in fact, every day, there are more than 1 billion people across 150 countries that use our products, that rely on our brands. And when we talk about creating value, then, of course, we want to make sure to create values for those customers and consumers that we serve, both the ones that rely on us today as well as the ones that we will capture for tomorrow. And by that, we will create shareholder value. And we have the strong financial fundamentals and a solid financial foundation in order to create shareholder value. Our earnings per share in 2025 was SEK 18.37, and that is 50% up versus 2021. We again raised our dividends by 6% to SEK 8.75 per share, fully in line with our policy to provide long-term stable and rising dividends. And then we also have launched yet another share buyback program. When it comes to total shareholder return, as you can see on this graph, we are outperforming our peer group. So that says something about our performance in the industry. That said, we have higher ambitions than what we have delivered in the past years. And in order to enhance shareholder value, we intend to sharpen our performance or strengthen our performance and accelerate profitable growth. And we are very well positioned to do exactly that. Yes. Did I click? No. Okay. We are very well positioned to do exactly that, I wanted to say, because here in our portfolio, we have the TENA brand, the world-leading and recognized expert in incontinence care brand. It offers high-quality, reliable solutions for all different types of needs across all sales channels. We also have Tork in our portfolio, another million -- multimillion-dollar brand, multibillion-dollar brand, I should say, that also has been able to transform what was once a tissue business to become a holistic system solution business, professional hygiene business. And it's well placed to continue to shape the future. We have Tempo in our portfolio, Tempo that for many is synonymous with hankies. So we hear people say, could you please give me a Tempo when they mean, could you please give me a hankie? The same goes for Leukoplast, another strong brand in our portfolio and which many people use generically for medical adhesive tape. So this Leukoplast brand is well recognized for superior fixation properties, good staying power, connected with skin integrity. Then we have Saba and Nosotras in our portfolio, winning brands in feminine care in Latin America that are gaining shares every year on already very strong positions. And we have many other global, local and regional brands that have very strong positions. And this branded portfolio stands for 80% of our business, and we have a #1 position in 60% of our market and category combinations in the branded business. And if you include also our second positions, it's as high as 90%. So again, strong positions, leading brands that makes us well positioned to capture market growth and the markets we're in are growing. We have a market growth exposure of some 2% to 3%. I have to click harder, I learn now. We have a market growth exposure of 2% to 3%, and that is driven by very and supported by very strong global mega trends. The global population is aging, as I think we all know, and we see an increased prevalence for chronic conditions. This is increasing demand or driving demand in many of our categories. Worthwhile mentioning is that not all demographic trends is playing to our favor. We have in baby care, a declining market since the birth rates continue to fall. But then you have to remember, baby business is roughly 5% of our sales. Incontinence care is roughly 20% of our sales. So it's 4x as big. That makes us perfectly placed to really capitalize on the demographic developments. Also, what we see is an increased awareness and importance of hygiene driven by the spreading of infectious diseases and also by the increased awareness about the connection between hygiene and health. And on top of that, consumers place more and more emphasis on their personal well-being, and we see also rising living standards in D&E markets that is driving growth in these markets. So there are certainly a lot of market growth opportunities to capture for us with our brands and positionings. And over the past years, we have actively reshaped and managed our portfolio in order to be as aligned as possible with these growth opportunities that we have in the market. So today, Personal Care, Health & Medical and Professional Hygiene and especially the fastest-growing segments in these businesses stand for a bigger share of our portfolio. And that, of course, makes us very well placed to continue to drive profitable growth and accelerate profitable growth. It makes us well positioned to deliver on our financial targets that I think you all recognize. We aim to grow above 3% organically at a profit margin of 15%. We also have a very strong foundation in place in order to deliver on these ambitions. And for one thing, we have a very competitive and strong assortment, and you will see that later today in the break when you go through our exhibitions. We measure how big share of our products that is the first choice by consumers and customers. We refer to that as superiority, super important in order to drive market share growth and pricing power. And as you can see behind me here, it's at a high level, and it continues to increase. And that is the result of impactful innovations that we have brought to the market year after year. I mean every year, we bring new products to the market could be anything from game-changing concepts to small but meaningful upgrades, all of them contributing to sustained value creation. And I wanted to take the opportunity now just to share 2 examples on 2025, one that is about raising the bar and one that is about adapting to the current market environment. And if we take raising the bar first, we launched SmartPROTECT on our feminine pads in Latin America in the year. This technology is a new absorption core technology that makes sure that you can capture the liquid that heavy and very rapid flows very quickly. Of course, makes the consumer feel more confident in their everyday life, also allows us to move consumers from thicker pads to thinner pads, which is good for the consumers' discretion, but also for our profitability because normally, we have higher profitability on these products. So this is really raising the bar with the new technology. The other example, Cushelle Simply Soft that you see to the right here is a new toilet paper that we launched to adapt to the current market situation. We all know that in 2025, consumers were more hesitant or holding on to their wallets a bit more than what they normally do. And then, of course, we adjusted our innovation priorities to make sure that we have as competitive assortment as possible across all the different pricing tiers. And this is one result of that where we then offer the Cushelle softness at an everyday price. So addressing the increasing pricing sensitivity among consumers, yet not compromising on the brand's quality promise. So 2 examples from 2025, and we will keep the innovations coming. The ones at the back there, they nod, who are working with this. We will keep the innovations coming because one of the very important key foundations that we have in place that gives us a good platform is our robust innovation engine that we have. We have a good combination of strong in-house capabilities with also strong external collaborations and partnerships. We have globally organized our R&D. So it's scaled to build really deep expertise. At the same time, we operate R&D centers across different parts of the world so that we can see the different consumer insights that are local and also be as quickly as possible to react to specific market needs, a very good combination. What you all know because we have talked about that so many times is that we base our innovations on insights, consumer, customer and shopper insights. And it's when those insights really are married to or meet a new technology advancement, that's when the magic happens. And we have certainly a very good productivity and outcome from our innovation engine. 50% of the sales we have is generated from products that have been put on the market or upgraded within the last 3 years. Many of them are unique, and we want to keep it that way. So that's why we have over 1,000 patent families covering our portfolio. And then I think the margin, that they are margin accretive, speaks for itself. That tells us that it's a clear evidence that they bring real value to customers and consumers. So you will have the chance to go through -- go to the R&D labs later today, and then you will get a glimpse of this innovation work that we have. What you will also see then is how we use digital tools and also AI in our product development in order to cut the timing of development, the lead time as well as costs. But of course, with that said, leveraging digital solutions on AI is not something that we only do in R&D. It applies across the value chain. Supply chain, of course, an obvious area for AI and digitalization. Some examples in transport, demand and supply planning, we base that on AI algorithms. And where we apply intelligent process control, we can reduce our waste by up to 20%. And for those of you who were in Valls 1.5 years ago, quite many, I recognize, you -- I think you have a good understanding of the level of digitalization that we have in our supply chain. But we have examples from other parts of the organization as well. If you look at marketing, for example, we use AI in claims development, and that is actually improving the productivity of that process by 75%. And then alongside with using digitalization and AI to become more efficient internally, our digital agenda is a lot about winning with customers and consumers. So we are continuously expanding our online presence. So in 2025, we increased e-commerce by 13%. And later today, you will hear Pablo talk about our Tork omnichannel customer experience platform, something that is highly appreciated by our Tork customers. What is also very, very appreciated by our customers is our progress on sustainability. We are committed to our science-based targets, and we are well on our way to deliver on the 35% reduction of CO2 emissions by 2030. And question is, how do we get there? What is making us progress? Well, one thing is back to innovation actually because we make sure that the vast majority of our innovations have a positive impact on sustainability. Then furthermore, we are working very systematically and structurally to improve our resource efficiency in different energy efficiency programs and material saving programs and so on. And a good example is actually what you see on this picture. So a teaser for those of you who will go to Lilla Edet later today. This tissue production facility, I would say, is a flagship site for sustainable tissue production. It's the first ever large tissue mill that is operating without any fossil CO2 emissions using biogas and renewable energy. Lilla Edet is also very much in the front line when it comes to circularity, high share of recycled fibers, high share of post-consumer recycled plastics in the packaging. So for those of you, you have -- that are going there, enjoy. We have some internal people here today, and I hope you agree with me that one of the areas that actually influences the engagement in our organization is that we are progressing on sustainability. It's important for people also internally. And we have a very high engagement in our organization. In fact, if you look at employee satisfaction, it's 4 percentage points above benchmark. And this our ability to attract, develop and retain key talents and keep them highly engaged is really a critical success factor for us. So with this, I think I have -- I hope at least that I have given you a good perspective of our strong foundation, our strong platform, our strong offers, our strong innovation capabilities, the way we progress on digitalization that we are leading in sustainability and also the fact that we have highly engaged employees. And that is a very strong foundation and something to build on. But in order to accelerate our growth pace, in order to move faster towards our financial targets and to enhance value creation, we also need to change. And we started that change journey with the initiatives that I talked about initially. So we are doing the SG&A cost-saving program in order to free up resources to be able to invest in growth. We have completed the M&A in North America that I talked about, and we are now then also operating in a reshaped organization. And now we will leverage that new organization in order to drive performance. So what you will see today is that we will have clear financial goals per business area, and you will see that there are targeted initiatives and plans in order to reach those goals. Also with the new setup that we have and aligned incentives, we really make sure to drive accountability and delivery. So very important improvements for us and steps to take on our change journey, but we have more to do. And in order to unlock our full potential, I will drive actions in 4 different areas. One is to continue to lower our cost base. So to keep us competitive and also to really free up resources so that we can invest in growth, we need to reduce our cost base further. So alongside with the SG&A program that we are running, we will also focus on reducing production costs. And Fredrik will come back and give you more details on the opportunities that we see in this area. Then innovation, we will intensify innovation where it matters the most. So I talked about our very robust innovation engine and that it has a high productivity. And that is true. Then, of course, we want to accelerate market share growth even further. And to do that, we need to get even more output of our robust innovation engine by really prioritizing the highest impact innovations. And now with having innovation integrated into the business units, we will have a better way to be precise in our prioritization. So to really intensify innovation where it matters the most. Then, invest to grow. I've talked about our superior offers. I've talked about our strong brands, our leading positions. We have something fantastic to invest behind. So we have all the reasons to invest more in order to grow more. To do that, though, we will then need the savings that I was talking about because this is not about compromising on margin. It's about freeing up resources that we can reinvest in growth. And when we do that, we will make sure to prioritize the areas where we have the highest return on investment. And finally, accelerate the portfolio shift. I talked about that we have a more attractive portfolio today than we had some years ago, but we have more work to do. So we will focus even more on the areas, the categories and segments where we have the highest profitability and the highest potential for profitable growth. And we will do that both in our organic agenda as well as in our inorganic growth. And that brings me to the M&A strategy where this is very well reflected because the categories that we will focus on when it comes to M&A priorities are the same as you have heard before. It is feminine care, it's incontinence products, expanding also to continence care, it's wound care and it's strategic products and segments in Professional Hygiene. When it comes to geographies, North America remains a key priority as do also D&E markets and geographic white spaces. And first and foremost, we see M&A as a vehicle to expand presence and to build scale, but we also use it to acquire know-how, to acquire new innovations, which complements then our in-house innovation and to gain access to new channels. So with this, I hope that you have a better perspective on how we will now use and leverage the strong platform that we have and what we will do differently and better in order to move us from the 1% growth roughly that we are at today towards our target of about 3% organic growth. Then now when we move into the business unit presentations or business area presentations, you will get a better view of where that growth will come from. You will see that our core business still offers plenty of growth opportunities. So growing the core remains our biggest or largest growth pillar. On top of that, we will expand for more, and you will see in the business area presentations that we have clear priorities for where we want to expand. And of course, we will continue to explore. What was once explorations like our digital solutions in Tork, for example, is now a key part of our core business. As we grow, we will improve or strengthen our profit margins through operating leverage. We will also, by growing the fastest in the highest margin segments, improve profit margin through mix. And in parallel with that, continue to drive savings and efficiency and capture efficiency gains to structurally improve our margins. And I think with that, it's time to look at how all of this comes live in our different business areas, personal Care, Health and Medical, Consumer Tissue and Professional Hygiene.

Thank you, Ulrika. Thank you for outlining how we will accelerate our progress and how we will strengthen our value creation in the future. You have the opportunity to interact with Ulrika later on today. So take that. Now we will turn to the business areas to understand their key initiatives and priorities to accelerate the progress that Ulrika talked about. We will start with Health & Medical, and I'm pleased to introduce to you, Anand Chandarana, President, Health & Medical. Anand joined Essity in 2020. He has more than 20 years of experience from MedTech, and he stepped into his role as President, Health & Medical in September last year. Welcome, Anand and Health & Medical.

Good morning, everyone. It's my privilege actually and my pleasure to talk with you this morning about Health & Medical. And Sandra, you maybe sound very old with giving my experience away. I'm the newbie when it comes to the President for Health & Medical. And as I said to you, I would like to tell you a little bit more about this beautiful business area and all the prospects we have ahead. It's a core and resilient part of Essity is Health & Medical, and it operates in noncyclical reimbursement-backed categories. So you can say demand is durable and it's unrelenting, and I'll talk to you about that in a minute. It's a value-creating portfolio today, and we're stepping up the pace to focus our investments in areas where returns and profits and growth are higher over the coming years. So for the next 15 minutes, I'm going to explain to you who we serve, where we play, why we win, I'll try to convince you of that. And then I'll also talk about the key levers that we're prioritizing to increase value creation over time. So as I said before, Health & Medical is serving high-frequency, high-cost conditions that are undermanaged today. So demand is structurally strong and our solutions sit in care routines and care pathways. They're deeply integrated. What that means is that our solutions and our business is sticky. Our ambition is to be the undisputed leader in preventing and managing the conditions we serve. And namely, that's Incontinence Care, it's Wound Care, it's Compression Therapy and it's Orthopedics. In 2025, we delivered through a lot of hard work amidst headwinds, SEK 27.5 billion in net sales, an 18% margin. The sales are split as you see on the screen. So 58% the lion's share comes from Incontinence Care products, and that is our cash and stability engine. Wound Care represented 21% of sales, and that is our mix-driven margin expansion engine. You'll learn more about that in a little while. Compression represents 10% of sales is what I would term a value unlock. We're going to shift focus from one segment of compression over the coming years to another segment where returns are higher. And Orthopedics represents 11% of sales, and that's our disciplined value extraction cash generation engine. You see the growth of 1% there shown on the screen. That's what we delivered in 2025, and that takes some doing, of course, but that's not something we're satisfied with, and I'll share with you in a moment what our ambitions and expectations are going forward. The potential is substantial. Our addressable market is somewhere north of EUR 17 billion, and that's growing between 3% and 4% depending on the subcategory. We lead de facto in incontinence health care and in compression therapy. In Wound Care, as you see, we're a challenger globally with a strong position in Europe. In Orthopedics, probably what matters to you is that we're #1 where we choose to play and where we choose to focus, which is fracture management and physiotherapy. A little bit about the categories and their characteristics. So all categories, as Ulrika already mentioned, benefit from tailwinds. And those are specifically aging demographics and unfortunately, the increasing prevalence of chronic conditions. So as I said before, demand is durable, but also, I would say, unrelenting from a business perspective that enables us to have stable earnings across cycles. Our solutions happen to be, as I said before, very well integrated, deeply integrated through a lot of hard work and through a lot of trust earned with our customers in care delivery models. So that leads to high switching costs. And so we have good positions that we can build upon. Now when looking forward, and you know this already, health care systems around the world are under pressure. Their budgets are under pressure. And in the short term and in the long term, actually, they're asked to do more with less. So what we do here and now is we try to counter price pressure, which is a manifestation of this pressure that's applied to health systems. We try to counter that with selling the value and ensuring focuses on total cost of care where we can actually show superiority. In the medium term, the growing pressure on health care systems actually creates care gaps. And we choose in Essity to see those care gaps as unmet customer needs. And if you can meet those needs with innovation and evidence that proves you can improve outcomes with lower cost, we actually believe there are rewards there to be earned. Winning at scale in these categories, these Health & Medical categories also requires upfront investment, serious upfront investment. And that's in things like specialized sales forces. It's in things like clinical evidence, it's market access infrastructure, compliant manufacturing. These are things, of course, advantages that compound over time for us. So we believe this is a positive situation for an incumbent size and scale of Essity. Now I said to you, I'll explain to you who we serve. And this is our 4 key stakeholders. We'd like to group them in this way, but we serve and delight simultaneously, by the way, in order to achieve success and earn the rewards we do. So on the left-hand side, you see health care systems and providers shown there. That can be insurance providers. It can be hospital systems, it can be care homes, nursing homes. These are the systems. And what they care about is overall outcomes, patient outcomes and total cost of care, and that's what we serve them with. You see the next segment, which is caregivers, broadly speaking. So that's health care professionals, clinicians, physicians, nurses, but increasingly, it's also family caregivers. And for them, what matters is that we provide intuitive, dependable solutions that flow and fit perfectly within their workflows. That's really important to them, and that's what we do. The third segment you see is patients and consumers. And this could be any one of us, it could be any one of our families. But what matters to us and to them is that solutions are easy to access where they want to buy. They're easy to use and that they do what they say on the tin. It's a very English term, but they do what they're supposed to do to improve well-being. The last stakeholder group that you see there is trade and channel partners. This could be pharmacists, it could be medical distributors, et cetera. What happens -- what's important to them is that we help them convert demand efficiently and effectively, and that's through the right commercial models and it's through the right service and supply. Now I can tell you all about how well we serve these customers simultaneously, as I described. That's the kind of the name of the game. But I thought it would be good for you to hear from some of our customers themselves. So let's see what they say. [Presentation]

I promise you that neither -- none of those customers had said those things under duress. They were very willing to share their positive experience with us. At the end, they are only some of many thousands that we serve every day. And as I said, not only do we need to serve them, we need to serve them simultaneously in order to ensure that we earn the rewards that is our business. And of course, satisfying and delighting these stakeholders is what earns us the right to grow our business and in order to expand our margins. So over the coming years, our ambition is to have an organic growth somewhere between 3% and 4% and to have, simultaneously, again, margins above 19% EBITDA. And how will we do that? We're going to do that through better mix. We're going to focus on the higher return segments of our portfolio. We're going to protect our cash engines, as I described earlier on, and that's going to be through disciplined capital allocation and disciplined investment. I'll talk to you about the levers that we have for our business, and they can really be summarized with these 3. And what I intend to do over the next few minutes is just talk to them individually. So if I take the first lever, this is about expanding leadership in Continence Care. So there are 2 parts of this. The first part is nurturing our core. Our Incontinence products are our core so nurturing the core. The second part is expanding for more. And there's a little bit of difference between the 2 but they're very linked. So if I go back to nurturing the core, that is about ensuring that our lion's share of our business, 58%, our dependable and foundational value engine is continuing to grow. Growth has been depressed over the last few years, but we're well positioned to turn that around. Let me give you some examples. 50% of the sales of Incontinence Healthcare products goes via tenders. And those tenders are the key to our success. Winning tenders is the game, you could say. And how we win is by shaping tenders so that they are focused not only on price, but they also include consideration of outcomes, total cost of care and things like sustainability. And of course, that's backed and underpinned by having a good product portfolio and the relevant evidence in order to prove that. This takes years the shaping of tenders takes years. And when you do that successfully, when you've earned the trust of the customers to have those criteria embedded into the specifications, then you win big. So just to give you an example, in 2025, we won or retained business globally around EUR 84 million. And that's with a considerable price premium versus our competitors. That's a very important thing to know. Now if I go back to expanding for more. Today, we work on managing incontinence, treating incontinence. Actually, tomorrow, what we will do is expand to prevent and reduce solutions. And that will do 2 things. One, it will increase the relevance of Essity and specifically of TENA, the brand TENA across the continuum of care. That reinforces the core business. And secondly, it allows us to get into attractive adjacent profit pools. Research indicates, of course, that we will be able to not only attract or go into those attractive profit pools, we will also be able to reinforce the core business, which is significant and sizable. And so later this year, an example of us expanding into the prevent and reduce area is the launch of our TENA SmartCare bladder sensor to consumers in the Netherlands. And you can learn more about this at the back of the room in the break. This is a very cool wearable ultrasound device, which notifies the user of when they need to go to the toilet. It's a super cool technology, and it can be game-changing and life-changing for some of the patients and some of the sufferers that, of course, are troubled and deal with incontinence. As I said, I urge you to go and find out more about it at the back of the room, very very cool. If I talk to our second lever, this is about Advanced Wound Care. We want to accelerate growth in Advanced Wound Care. Broadly speaking, our Wound Care portfolio is split into 2. We have the traditional wound care product, and we have the advanced wound care products. Traditional wound care is a commoditizing marketplace. Therefore, we are shifting our focus into advanced wound care, over-indexing our investments in innovation, sales force, et cetera, into the advanced segment and specifically the area that is associated with managing and treating infections. Here, we have unique technologies and fantastic solutions for our customers, and we believe we have the right to higher growth going forward. We back this focus on Advanced Wound Care with specialist selling, with investments in evidence, so substantiation to prove our value and of course, with selective M&A. And maybe a proof point to share with you is that we've done some of the selective M&A over the last few years. We acquired ABIGO, Sorbact Technology in 2020. And if I look at the growth of dressings with this unique Sorbact Technology, which you'll find out more about in the lab tours later, that has grown 17% CAGR, '22 to '25, which is fantastic, and it tells you that we have something on our hands here, which is very interesting and allows us to invest more. We did another transaction. We acquired the Hydrofera portfolio, largely focused in North America, in the U.S. And that portfolio has grown 14% CAGR, '22 to '25 since we've acquired it. So this is what we'll do more of. More investments in specialist sales forces, more investments in evidence, more investment in innovation and selective M&A. The third lever I'd like to share with you is focusing and leveraging our strong position in Lymphology. Now without getting too technical, Lymphology is about treating diseases related to the lymphatic system. And one of the most common conditions in Lymphology is lymphedema. And this is where people unfortunately suffer from swollen limbs and swollen body. This occurs after cancer treatment. It can be associated with chronic venous disease. It can be associated with obesity. It's a really sad condition for people and their saving grace is to use compression garments. And as you heard before from one of our polite customers, it's the Rolls-Royce. JOBST is the Rolls-Royce of compression garments. So we have a fantastic solution here. Lymphology as a disease area is underdiagnosed and underpenetrated. So we win when diagnosis improves and reimbursement improves. It's structurally higher margin than other parts of the compression marketplace, and that's why we're over-indexing and overfocusing on this going forward. One proof point to share with you when we unlock diagnosis, unlock reimbursement, we can drive growth is what's happened in the U.S. In 2021, there was an act, which is called the Lymphedema Treatment Act, which was passed in the U.S. That opened up reimbursement through Medicare or compression garments related to lymphology. Since then, we have grown our sales 18% CAGR, '22 to '25. So this, of course, now gives us confidence to invest more in this specific space. Ulrika talked about the M&A priorities earlier on. And unsurprisingly, they match our focus, our 3 levers going forward. So we want to do M&A where it's value creating and has a strategic fit in the Continence care space, specifically in the adjacencies of prevent and reduce solutions. We want to do M&A in the Wound Care space, specifically Advanced Wound Care with a focus on key geographies to attain scale or to boost our innovation going forward because we have the channel and we have the sales force, of course, that is interfacing with the customers and is trusted. And in compression, we want to look at adjacencies to expand our lymphology value proposition. I hope that makes sense. Lastly, I'd like to leave you with a recap of why we win across the stakeholders that I described before. We earn our place in standards of care by focusing on evidence and outcomes. We launch and deliver solutions that are fit for workflows for caregivers, easy to adopt. We offer reliable service and supply, which is critical in the health care environment in which we operate. And we convert demand efficiently and effectively through channel reach and commercial excellence. So to conclude, Health & Medical, me, my team of 6,000 are ready to accelerate profitable growth through laser focus and investment in the highest margin, highest growth categories over the coming years. I hope that excites you as much as it excites me. Thank you very much.

Thank you, Anand. That was a very good presentation. It was very clear. It was also very nice to hear our customers and how they appreciate our solutions and that we actually make a difference in people's lives.

Very good, thank you.

And it was clear to me also the growth levers that you are pulling now.

Before I let you go, I have 2 questions. You talked a lot about mix-led growth. And I know there is a lot of focus on volume growth out here. How do you see the balance between mix and volume going forward?

It's a very good question. I knew you're going to ask me questions. So thank you for that, Sandra. When I talk about mix-led growth, I actually mean driving volume growth, but in the segments where we have the right to win, where the margins and the growth is structurally the highest. So it is still volume growth, but it's focusing on the areas that we want to drive, if that makes sense.

Makes sense, right?

We will not drive volume growth across the portfolio. It doesn't make sense, it's not high-quality growth, and it's not value creating to do that. So we're really focused.

Good. Focus is good. Then if you were to leave us with your 3 key messages from your presentation, what would that be?

Well, I hope that you agree that the prospects of underlying market growth for Health & Medical, number one are strong. And you can see that in the durable. And we are fantastically positioned to win. Number 2 is this mix-led growth. We're only going to focus over index on the areas where we have the right to win and where quality growth is high. And the third thing I wanted to remember as a result of the second point, is that we will, by doing this, reduce our exposure to higher commoditized categories. And that is really important to the future, then we put ourselves in a very good position to continue driving profitable growth ongoingly. Makes sense?

Yes, makes sense. Thanks a lot, Anand, for an insightful presentation. Yes. And you will have the opportunity to ask questions to Anand later on today.

Thank you.

So now we will move from Health & Medical to Personal Care from patients and health care to consumers and retail. At the same time, a clear connection with the TENA brand, which we serve across channels. I'm pleased to introduce to you, Tuomas Yrjola, President, Personal Care. Many of you met him at our last Capital Markets Day when he was leading innovation and brand. Since January 1, he is now heading our Personal Care division. Welcome Tuomas and Personal Care.

Thank you for the applause. Thank you, Sandra. Good morning, everyone. Good to see many of you. I agree with Anand. Anand said Health & Medical is a beautiful business. But I have good news for you because Personal Care is also a beautiful business. And in my first 4 months running it end-to-end, it just has confirmed to me that we'll make it even more beautiful. So that's what I'm going to talk to you today is, first of all, explain to you why I believe it's beautiful, but also where the opportunity lies and how we're going to really accelerate growth in Personal Care, especially now in this new setup. So let's start with what is Personal Care. We obviously serve consumers from all the way through every life stage from the first, second, a baby is born, we're there, all the way to the -- as we take care of the elderly ones at home. So you're very well aware, we do this via 3 categories: Baby Care, Feminine Care as well as Incontinence Care. If you look at how does the business split in terms of size, what you'll notice is, in fact, 80% -- close to 80% of Personal Care sales is Feminine and Inco. Baby represents about 20% of our business. And if you look back over the years, what you'd see is that we've grown Feminine Care significantly. So Feminine Care used to be the smallest part of our portfolio, and it's become actually the biggest part as we've driven so much share growth across markets year after year in over 80% of our sales, we keep growing share on Feminine Care. We've obviously accelerated a lot our inco business at the back of consumers moving also from the health care channel into retail. And on Baby, we've just strengthened the positions where we've continued to play. I think the other thing that is very interesting to look at is our geographical diversification. So when you look at it, we've got about half of our business in Europe and over half comes out of Americas. You'll see Latin America plays a significant role, which is still fast-growing area, obviously, as the category still develop. And increasingly, obviously, North America plays a big role for us, especially after the acquisition of Edgewell, and now North America is already 9% of our sales. Now that's the sales today. But if you look at the opportunity we have ahead, it's significant because personal care market is over $17 billion in sales where we play. And there's a lot of tailwinds in terms of growth, and we expect the market to grow between 2% to 3%. Now if you look at the growth within those categories, such as incontinence, you'd see high single-digit growth as obviously the penetration and aging plays into our favor. Now if you look at our positions, we've got very strong positions. If you start on the incontinence where we're #1 in Europe, we're #1 in LatAm. We're a challenger. We're #4 in North America. But if you actually double-click on it, when you look at Canada, we just became the #1 brand. So we came from #2 to #1. So now we're leaders in Canada. And I'll talk about what we're doing in U.S. where we're a challenger, but we're growing double digit there, and we have a good formula to accelerate growth. Feminine Care, similar, we have very clear leadership positions across Latin America, #1 there. We're #3 in Europe. And again, thanks to the Edgewell acquisition, now we're #3 in North America on Feminine Care as well, which gives us a great platform for further growth. On Baby Care, we're very focused on where we compete. So Baby Care, we're focused on Europe. We've got obviously a very strong position here in Nordic with Libero, which is an outright market leader in all the Nordic countries. And then we have selected few retailer brand customers where we have very long-term partnerships in Europe that gives us scale and this overall #2 position in the European market. Ulrika talked about the strength of our brands. And in Personal Care, we're very pleased to have a portfolio of leading brands. TENA, obviously, the global #1 -- we've got on Feminine Care, lots of locally relevant brands. We call them the V brands. And the whole idea there is that they're locally very relevant, but we're driving global scale in terms of how we platformed the product, the design, the advertising as well as innovation program. And then we obviously have a lot of local, very strong brand category combinations. I already mentioned Libero. And obviously, you've got brands that we've acquired and added to the portfolio, such as Modibodi or Knix, which help us serve a different demographic, for example, like in the category of leakproof. What this gives us is a portfolio where 90% of our sales were either #1 or #2. It gives us real relevance with our retailers because we are the ones who drive category value, we drive category growth and the retailers are very dependent on the partnership with us as we grow these categories further. Now if you look at Personal Care categories, what makes personal care attractive for a company like us? Why are we so excited about personal care? The first thing is that if you look at the usage of the category, it's very repeating, right? So it's not cyclical. Once you're in these categories, it's a daily use product, which drives a lot of loyalty and repeat. So the demand is not cyclical. The other thing is the growth is driven by penetration, demographics. We've proven that in all these categories with innovation, you can create value, you can drive premiumization. And most importantly, these are categories that are used in [indiscernible] moments where product performance matters. So the cost of a product failing is significant. And therefore, the consumer is looking for always the best performance and the brand that provides this drives a lot of trust and loyalty in the relationship. I'm sure there's a lot of parents out there who either have babies or have had babies. You all remember if the diaper leaks at night, while the whole family is peacefully at sleep, the cost of that moment of disrupting sleep or product not performing, you always remember that, and then you start to question the choice of the product. That won't happen to you when you use a Libero product, but that's because we're so focused on delivering, again, superior performance and building that trust. And this means that brands in these categories have a very high share of the sales compared to many other FMCGs. Right. So how are we going to accelerate this? And what does the future look like? So you saw last year, we grew 3%, but our intent is to accelerate top line a lot more. So we believe we can grow this business between 5% to 6% in terms of top line. And when you look at our EBITDA margin, we expect that to grow above 16%. So you might be wondering how are you going to do that? And let me explain to you what our growth formula and strategy is. So we're going to be focused on growing the core business as well as expanding for more. And I'm going to double-click on each of these, but majority of the growth will come from the core. And it's going to come from fueling this successful recipe we've got on TENA as well as on Feminine. So that's where the majority of the growth is going to come from. We're going to continue to innovate and drive superiority on our product assortment that's going to drive a lot of mix. And obviously, we're going to win with digital, whether it's in the way we engage with consumers, like with the Libero Club or with winning in e-commerce channels. And then on top of this growing core, we're going to really expand for more, which is more places. North America is a big part of it, more users, TENA Men. We talked about it, some of you who were involved, that gives further upside and then new formats, which is the leakproof category. Right. So what is the growth recipe on TENA and Feminine? Ulrika talked about how we've driven the superiority or preference of our products, and this is what it looks like for TENA. So if you go a few years back, we actually had part of our assortment, which was not competitive versus the market. So we put all our focus on how do we really ensure that majority of our assortment is consumer preferred. We made our products much more discrete, higher performing, more modern, more feminine or more masculine in the case of men. And now you see that over 70% of our assortment is consumer preferred. So what does that lead to once you have that? What we're starting to see in terms of the data is once consumers use TENA, the repeat level we're seeing is significantly higher than competition. That's thanks to the superiority that we have on the assortment. The other thing we work very hard on is how do we step change the creative -- the performance of our advertising. And now when we look at how our advertising performs in the market, what you'll see is that the cut-through versus competition is significantly higher. This creates a positive cycle because we've got winning advertising that drives trial. Once people try our products, it leads to higher repeat. Again, this is high gross margin business, and that creates the flywheel, which we are continuously fueling. Fem Care, very similar. And a good example of how we're driving feminine is we're driving a lot of premiumization. We're focusing on unmet consumer needs. In this case, this is our latest launch, which is our premium product called the Ultimate, where we discovered that there was a consumer segment who was very dissatisfied, especially when they had a heavy flow that I want a product that truly performs for that. So we designed our best products to meet that need. It's premium because the expectation is also higher. And what we're now seeing in the markets where we've launched is we're building significant share in the premium assortment. I don't think we've shown you enough advertising. So I'll show you the ad that brought this to life so you can get to feel what is behind the success of this product. [Presentation]

So that combination of superior product, very strong advertising. Many of our categories still have taboos. That's why you see why we're kind of breaking the taboos as part of our brand building. And this combination is really part of the success recipe that makes us win both on TENA and Feminine. So beyond product and advertising, what's really important is that we win in the way we engage with our consumers -- and that's obviously increasingly -- or only almost through digital. And I think a great example of our digital capability is the Libero Club here in the Nordic region. So you might not know that about 80% of any new parent who has a baby in the Nordic market is part of our loyalty club. So we have over 1.2 million parents in that database. So it's the biggest baby club or community in Nordic market. And what this allows us to do is, obviously, we track and we connect with our consumers already from pregnancy. So even before the baby is born, which allows us to guide the consumer through the journey of all the stages in the baby development from newborn all the way to toddler. What it also allows us to do is obviously to recommend the right products, drive mix, and it drives a lot of stickiness and repeat. But what it also creates is very high return on investment because we can target our messaging one-to-one instead of going via mass media. So all this is really relevant. It's not only relevant for baby in the way we win in the region because we own this relationship one-to-one, but obviously, it gives us great capability and insight in terms of how to do this in more places across our categories, which have very similar dynamics. Speaking of digital, the other part where we're really focused on in our categories is to accelerate and win even more on e-commerce. I think a great example of that is the biggest e-commerce market in the world, which is U.S., where especially on TENA, we've been very focused on being digital first, winning in e-commerce first to prove our right to win in the North American market, specifically in the U.S. market. So we put a team in place, great capabilities in place. We've made sure that we've got the right assortment for e-commerce, right logistics setup, right communication and the result is starting to speak for itself. So what we're seeing in Amazon and in e-commerce is we have 4x higher share, so which proves to us that the U.S. consumer likes TENA, they want to buy TENA once we make it available. And what this allows us to do now is to start having discussions also on how do we expand, obviously, our distribution and offering in the brick-and-mortar world. So as it proves to us that we can do it with Amazon, we can do it in one of the most competitive markets in the world, which is U.S., gives us great confidence that we can do this everywhere and reapply the e-commerce learnings that we're generating in the U.S. market. So this is obviously a big part of our grow more in the North America strategy. So one part is fuel the momentum we've got on TENA, not only on Amazon, but expanding, obviously, the distribution. And now we have a great opportunity to do that as we've acquired the Edgewell Feminine business, which gives us a platform on go-to-market to really drive superior solutions, both on feminine as well as on TENA to the U.S. market. So we're very early in the integration, but we're very pleased to see the strength of the brands that we've acquired. Many brands like Carefree or Playtex have been over 5 decades in the U.S. market, have very high trust. We're very excited as we now look to plug all the innovation capability, all the brand-building capability we have in-house with Essity and put these 2 things together to really fuel the growth in this very attractive North American market. TENA Men is another great opportunity, continues to be. We've talked about it before. You've heard the stats, 1 in 4 men over 40% -- over 40 years have some sort of incontinence, whether it's like leaks or more severe, but only 1 in 10 use purpose-made products. whether it's like leaks or more severe, but only 1 in 10 use purpose-made products. So massive penetration opportunity. We've been very focused on accelerating and driving as the leader, the penetration of this category with purpose-made products, great advertising, increasing visibility in store because retailers really want to support this is high margin. And what we're starting to see is great acceleration of the top line. So if you look at between 2021 and '25, we, in fact, grew 14%, our TENA Men business, and we're just fueling this growth further because it's, of course, very attractive, value creating for us as well as all our retailer partners. But the upside is still significant because the penetration -- the changing penetration, changing habits takes time. So we're just going to continue to fuel this. Speaking of penetration, the other area where we see significant upside is the whole leakproof category. We're obviously very early getting into it, acquiring the leading brands that have built this category, whether it's Knix that originated from Canada is strong in the U.S. market or Modibodi, which originated in Australia, both creating, building a category -- new category over the last 10 years, building penetration. And they're very set up to win because they're very omnichannel, digital first started in D2C, now becoming more and more omnichannel. And the opportunity we see now is to replicate that in more places, so building this category and equally driving further scale between these different businesses because we operated them separately in the past to preserve the business model. But now we're creating one leak-proof platform as part of this new organization, which gives great opportunity to see how do we drive further synergies in sourcing, in innovation, how we go to market as well as how we distribute. So we see great upside in fueling this growth even further. So I talked a lot about organic growth, the core as well as the more. But on top of that, we're obviously very focused on M&As in Personal Care. Ulrika outlined the company level priorities. And for Personal Care, when you look at it, Feminine Care, obviously, we want to continue to look for opportunities to geographically expand. Again, the Edgewell is a good example of doing that. You've seen that geographically, we're not yet everywhere, but everywhere where we play, we win. So we want to win in more places. Anand talked about the move to Continence Care, which means that on TENA, we want to look for opportunities to also work on prevention or reduction of incontinence and through that, expand our brand to the full continuum of care. And then obviously, we're looking for adjacent categories to expand our footprint in retail, give us further scale, and that will be in places where we could either leverage our existing brands and expand our offering or leverage our go-to-market or other capabilities such as innovation or brand building. So with this, I hope you've understood why I believe it's a beautiful business, and we're going to make it even more beautiful. Personal Care is really a business which has high margins, I dare to say we're very good at it, but we can get even better. So therefore, we see significant opportunities to accelerate. We've got the brand portfolio where we're leading. We've got the capability of innovation, how to drive superior products, which, again, in these categories truly matters. And those of you in the room will take you to the lab, so you'll see firsthand the people and the capability who are behind all this great work. And we've got strong geographical diversification. So we're placed in the right places to really fuel the growth and take personal care to the next level. Thank you.

Thank you, Tuomas, for the presentation. At least you convince me that this is a very beautiful business.

Great, I've got one.

Before the break, I just have one question for you. I know you're meeting up with your leadership team later today and tomorrow. What are your main priorities? What will you be discussing?

We're going to talk profitable growth. So keep fueling growth. We were pleased, as a new team, we've got great new team in place. We're pleased with quarter 1. We need to obviously repeat. So we're excited about growth, continue to invest. We've got great innovation plans, great advertising going. So that's a big part. Obviously, Edgewell integration, a big priority. And then just leverage this new setup to really fuel it further.

Good luck.

Thank you.

Thank you, Tuomas. Now we will have a break. For those of you joining us online, we will be back at, let's see, here 11:15. See you then. [Break]

Great. So welcome back from the break. I hope you took the chance to recharge, explore the demos and connect with the team. Now we will turn to Consumer Tissue.

I'm pleased to introduce to you, Volker Zoller, President, Consumer Tissue. He will talk about his business and initiatives to drive profitable growth and stable returns. Welcome Volker and Consumer Tissue.

So thank you, Sandra. And let's talk a little bit about Consumer Tissue, most probably a category, which is a little bit more in the focus than usually. As most of you know, Consumer Tissue is the category, is the business unit where we are producing sustainable, affordable, high-quality tissue products for end consumers. When you are looking at our business portfolio, it's very much in line how the market is structured. Around about 2/3 sits in the bathroom tissue category, almost 1/4 is household towel and napkins, more than 10% is hankies and facials and the remaining 2% is moist toilet paper. Looking at financials, 2025, we had sales of roughly SEK 43 billion, which is 31% of the group. You have seen this on an earlier slide. We had a relatively flattish top line development. Volumes roughly 0.5% down, mix 0.5% down, pricing slightly more than 1% up. We delivered an EBITDA of more than SEK 5 billion, which is approximately 27% of the group profit, so not on the fair share. And that was the clear priority for 2025. We saw a margin improvement from 9.9% in 2024 to 11.9% in 2025. From a geographical point of view, roughly 80%, almost 80% of our business is in Europe, almost 20% of our business is in Latin America and the remaining 2% are in New Zealand. Let's have a look at the characteristics of the Consumer Tissue. First of all, it's a very good news. It's a resilient demand. Our consumers are every day in touch with our products. And actually, when you think a little bit about, there are very, very few categories where the consumer is in touch every day with you. The second one, which is also good news, it's a very important category for our retail customers. Why? It's a destination category. It's a traffic builder. It's highly promoted. You bring shoppers into the shop. They buy, of course, also other stuff. So very, very relevant category for our customers. It has relatively high entry barriers because it's capital intensive. Sometimes we don't like it, sometimes we like it. And you need a lot of technical know-how. For the ones of you going to afterwards, you will see that it's almost an art to produce a high-quality tissue paper. And last but not least, we are always talking or very often talking about a commoditized category. I think you are looking a little bit geographically, but also into the segments, you find pockets of growth and you find areas where you also have a very good profitability. The addressable we go -- the addressable market we are in is estimated to be something like EUR 18 billion. This is approximately 26% of the global market. Why 26%? Because we are not in Asia, we are not in North America. So we are in 26%. The market growth has slowed down a little bit recently, but it's estimated to grow between 1% and 2%, different by geography in the coming 5 years. We are enjoying very strong market positions, very strong #1 position in Europe, market share of approximately 25% relative market share to the #2, more than 2. So very, very healthy and strong position. #2 market position in Latin America with a market share of approximately 20% and equally a #2 market position in New Zealand with a market share of 35%. We are talking very often about the Consumer Tissue category. In reality, we are serving 3 very distinctive businesses with very different customer and consumer needs. Around about 50% of our business, we are doing with our own brands. Brands you have seen on the last slide mentioned by Ulrika, brands like iconic brands like Tempo. This is also where the majority of our innovation goes to. But then we have another 30%, which we call retail brand business. These are long-lasting strategic relationships with selective retail customers. We are working with joint business plans, very long-term oriented. And here, you have a little bit different dynamics. I will come back to this in a minute. Then there's another 20%, which is more the tender-driven, more price-focused segment. And this is what we call private label, and this is what we have carved out in 2022 in the so-called private label division with 7 factories reporting to this division. Our goal is to grow between 1% and 2%. Translated is in the main segments, we want to grow with the market and in selective segments like hankie and facial, like moist toilet paper, we want to clearly outperform the market. So in total, slightly -- growing slightly faster than the market. And we strongly believe that we can deliver a sustainable margin -- EBITDA margin of more than 12%. What is our way towards profitable growth? I want to deep dive on 4 different chapters. Of course, there are a couple of more pillars there, but let's focus on 4 chapters. Number one is that we want to grow, of course, with our brand -- of our own brands. And actually, this is a continuation of a journey because when you look now short term on the last 2 quarters, we are winning market share in 55% of our markets. and we are winning or keeping market share in 75% of our markets. So recently, very good development on the branded side. I will deep dive a little bit on the retail brand business. I will talk about the supply chain efficiency, which when you look at our P&L structure, is absolutely crucial for success in the consumer tissue category. And then I will talk a little bit later on about reducing the volatility of our margins. Let me start with talking about the branded business. I get very often the question in this VUCA world, how is the consumer doing? How is the consumer feeling? We do not have one consumer. We have multiple consumers. We have very, very loyal brand buyers. They want to have the best product. This is why superiority is very, very important for us. But also and then accelerated by the rising energy prices, we have a more value focused. I would not call it a down-trading shopper, but a more value-focused shopper. And if you want to stay relevant with your entire business, you have to focus on both -- basically on both segments. And this is a shift we have done in the strategy that we have a higher penetration, meanwhile, also what we call the good tier. You see on the left side here in the premium tier is the majority of our innovation. And a lot of this, you can see on the booth here in the break where we have launched now Cushelle is part of our proposition. We have a couple of years ago, already launched Cushelle products, and they are performing extremely well with high consumer loyalty in bathroom tissue. And meanwhile, we have launched the first household to also with a coreless proposition, and it's in the market. We have launched a couple of new paper packaging, also addressing new consumer needs, switching from plastic packaging into paper packaging. And of course, we have on the moist, we have new varieties addressing changes in the consumer landscape. So high focus on our premium segment and of course, also on the growth in this segment. But equally important is, and Ulrika was mentioned this in the example of Simply Soft on the Cushelle proposition. Equally important is that we have increased our exposure to the value tier because for us, it's much better to keep a consumer on the brand than to gain it back from a competitor or from a private label. This is an example, just to show you an example, we have said that we are stepping up in A&P investment. And partly, of course, we will use the savings are coming from our cost saving program to invest more in A&P and Consumer Tissue branded business. This is an example from the U.K. It's a 360 activation of our kitchen towel, household towel brand, Plenty. And we have been doing this. You can see this here with Facebook, with TikTok, with Instagram, et cetera. So very, very, very digital, plays a more and more important role for us. But we have also used retail media activation with the Tesco customer, and it pays back. We have an 18% market share in Plenty reach with this activity. It's the highest market share, which we have more than 2 years. And when you look at Tesco, where we have done additional customized activation in store, we have even reached a 25% market share. So we see that the additional investments in A&P, in media and others are paying back with profitable growth. Expanding with the winning retailer brands. As I said, this is a business that has a long-term orientation. This is very relationship-based what we are doing here. We're working with joint business plans. We are very often the sole supplier to a category. This is also why service levels play an important role. If we do not deliver, they don't have products in the store. It's very quality focused, higher quality aspiration than maybe in some other parts of the segment. And also, we are leveraging the sustainability credibilities, which Essity of course, has. So this is a very, very nice business and developing very nicely. The third part, I was expecting a movie actually. Do we have a movie? [Presentation]

This gives you a little bit of flavor how important, not only a relationship but also what they are really focusing on, continuous product development. It's not so much about innovation. It's really product development, service, high quality, et cetera. The third aspect, which will drive growth is supply chain efficiency. And I got a lot of questions, so how many sites do we now have in the new organization in the end-to-end organization. And I think I said also in the break, a lot of questions, what I think about end-to-end organization for Consumer Tissue. For Consumer Tissue, this is a huge business enabler because the nature of our business is a little bit different than the ones which we have with global brands, et cetera. We have more local brands. We have a higher share of retail brand business and Personal Care. So the closer you are to a customer, the more agility and the more speed you have. And this is why I strongly believe that the new organization, having end-to-end, I mean, you could say everybody is in the room when you take holistic decisions will be a big performance enabler for the Consumer Tissue part. So we have 22 sites supplying consumer tissue products in the integrated supply chain. And we have, since 2022, 7 sites in the carved-out Consumer Tissue private label division. So overall, 29. The first bullet point here, safety first is nothing else than a reconfirmation of a commitment. Whatever we do, the most important thing is safety in our factories, not only in the factories, but of course, working in a supply chain with a higher risk. This is definitely important. But then as I said earlier, we see the new organization really as an enabler to increase supply chain efficiency because now we are moving from functional mastery into true end-to-end. And I said to some of you in the break is when I have now my new management team together, I have the category there. I have always the voice of the consumer there. I have the commercials there. I have always the voice of the customer there. I have also the supply chain there. And this gives us a lot of speed and agility. Operational excellence, so if end-to-end organization is the enabler, operational excellence will be the result. And we are focusing on reduction of product cost fixed. We know we have improvement potential when it comes to machine efficiency and especially asset utilization. We also believe that we have further possibilities to improve the manufacturing footprint, both in Europe and in Latin America. And last but not least, pulp mix. You know that we are working a lot with pulp mix and pulp prices are raising. So optimizing the pulp mix per contract is also a huge value creation. A lot of discussions were also about volatility, and I was listening carefully to the last quarter 1 report, Ulrika and Fredrik were presenting and one of you said we are noticing a reduced volatility of the consumer tissue margins. Yes. And we did a lot about that. We had a discussion about it, and we did a lot about that. So what did we do? Number one is we have shorter contract length. That gives us faster possibilities to adjust pricing with customers, more open contracts. We have more index contracts. What is the index contracts? Basically, you have a review of the cost driver clauses every 3 months and you adjust accordingly. It can be good, can be bad or can go up, can go down. But basically, you are much more agile with pricing in both directions. And last but not least, we have also made some significant changes in our portfolio, especially in the private label division, which is the most volatile when it comes to margin. We have made some mixes so we have discontinued some very volatile contracts in order also to smoothen the margins here. So the corridors of volatility, yes, it's still a volatile business, but I mean, they are much smaller than in the past. Since 1st of January, we have also the virgin fiber purchasing, so the pulp buying in the responsibility of the business unit. And that gives us also a different possibility because we can better synchronize how we are purchasing fiber and how we are pricing in the marketplace. So the expectation is also here that we come to a further reduction of volatility of the Consumer Tissue margin. Let me close with this slide why not only Anand and Tuomas have very interesting businesses. I think you see a EU President here with a lot of confidence. I think we have a business with a lot of strength. It's a global business. We have the scale. You have seen our market shares. We have a very broad portfolio, which also makes you more resilient when the consumer is down trading or some trends are happening. With our size, we have the negotiation power in the procurement side, but especially also towards our customers. Our customers are also consolidating, and we are doing much more business with trade alliances, for example, than in the past. You have seen that we have the leading brands. I think we are outperforming definitely our shares in the branded segment are significantly higher than in the other areas. We are leveraging what we call the triple track model, having brand, retail brand and private label. That means we are one of the really few ones in consumer tissue who can manage an entire category for a retailer. We have the strong relationships. No, we did not pay the customers. You heard in the video. They are really convinced that the relationship, a partnership with Essity is developing a lot of value. And last but not least, and convince yourself also when you look at the R&D list, we have the innovation, and we have a very, very strong sustainability offer, which is in a disposable category like consumer tissue, very, very important. So a lot of confidence for the future, a lot of work ahead of us. Thank you.

Thank you Volker. Clear overview of your global Consumer Tissue business and the initiatives you're taking for further profitable growth and more stable returns and reducing volatility. All clear. Yes. And very great to hear about the consumers that the customers really appreciate our products and our services.

Yes, they do. I think we have -- when you look at some segments, I mean, I think I was mentioning the Tempo brand as one example. There's an extremely high shopper loyalty. We have others where we have the superiority with our TAD and digital with the highest absorvency, and we have shoppers that would never take any other product than the Messi product. So superiority is driving, of course, shop and consumer loyalty.

And you also explained to us the advantages with the end-to-end organization. That was clear. I need to leverage that.

Yes. I think I hope it was very clear. Of course, we are coming from, as I said, functional mastery. We know we were optimizing very much our silos. Now we have an end-to-end organization where my management team has also now, for example, examined the innovation part and the supply chain part. And a lot of commercial decisions, which we are taking have a very strong impact on the supply chain. And when you're further away in your functional silos, then you hear very late what has been happening there. And now we are in one room, and you can literally say in one room and you have a much more holistic and a much faster decision-making and agility and speed in Consumer Tissue is crucial to succeed. It's absolutely crucial. So I feel extremely comfortable with the new organization, with the new end-to-end organization, having really supply chain innovation and the commercial in one room and taking decisions together.

Good to hear. I have a more short-term question that I know is a question from many. If we now look at the current cost environment, how are you managing this?

What a surprise? I got this in little break. I said no, we talk about the coming years, we talk about the future. You want to talk about the next quarter. I mean, obviously, you can see what is happening in the marketplace. Pulp prices are increasing since October last year. Now of course, with the situation, political situation, energy prices are rising as well. We have offset a lot with cost-saving activities, but we have reached, of course, a level where price increases are not avoidable, and we are in the middle of implementing price increases to mitigate that. So this is where we are right now. So a lot of activity to our customers. The understanding of the customers is pretty big because everybody sees what's ongoing in the world. So this is, of course, now short term, our task to implement the necessary price increases to recover the margins and [indiscernible].

Yes, we always compensate input cost increases with price increases on our products. Thank you very much, Volker. You have the chance to ask Volker more questions during the Q&A. Thank you for now.

Thank you.

Next on the agenda is Professional Hygiene. I am pleased to introduce to you Pablo Fuentes, President, Professional Hygiene. Pablo will take us through his business and how he is driving volume growth with his leading Tork brand. Welcome, Pablo, Professional Hygiene.

Hi. Good afternoon. Happy to be here with all of you, and we are going to talk about our beautiful professional hygiene business as well. I think this picture that you see here is -- represents our business in a really good way. This is our PeakServe dispenser that we launched a few years back. It's highly innovative, highly differentiated, protected by many patents, and it's been very successful in high-traffic areas. It delivers high load continuous delivery of product, and it makes a big difference for our customers. And the great thing about this dispenser is that it only works with torque products. It's a system. So we sell dispenser and refill. It's a system sell. So if you think about it, it's like Gillette with a razor refills or an espresso with a coffee capsule coffee machine. It's a system selling that, of course, adds value to our customer, but it's also profitable for us. So in our business, we like to say that these are cash generation machines. And we have 30 million dispensers around the world that we're constantly refilling with Tork products, right? So we have 30 million cash generation machines around the world. So this is, I think, a great business model for us. And 1.5 years ago in Barcelona in the last Capital Market Day, you may remember that we talked about tissue refills being our core. And then we had these adjacencies, soap sanitizer, wiping and cleaning. Now we are shifting our strategy, and we are focusing on the full portfolio as our core. Of course, we shift this because we're aiming for higher growth all across. And as we shift our strategy, we shift also our innovation approach to the whole portfolio and our go-to-market approach towards the whole portfolio so that we grow all across in a good way. 84% of our business is tissue, but we have this fast-growing wiping and cleaning and soap sanitizer. And again, we focus now on the full portfolio. It's a full solution selling. Europe and North America is still an important part of our business, but we have a fast-growing and profitable emerging market base in LatAm, Middle East, India and Africa that is also very important for us. We are the #1 global professional hygiene company and the #1 brand globally in Professional Hygiene. And of course, this gives us tremendous scale benefits. If you think about R&D, innovation, go-to-market, access to global customers. We get really good benefits of our global scale. We also focus on one brand, and we invest to create brand equity, brand power that fully translates into purchase intent in the B2B world with the #1 global brand in professional hygiene. In terms of some of the dynamics in the category, this is a stable nondiscretionary category. It has this recurring dynamics that I was explaining with the cash generation machines, right? You have a system and you're recurrently selling refills. It's a stable category, but with the rising hygiene standards that Ulrika was talking about, our differentiated systems actually make a difference. It actually addresses some of the rising hygiene standards. Emerging markets is still a low penetration in terms of these professional hygiene systems, and we see high growth through penetration. And of course, innovation, as you hopefully saw understand and you will see later on in the lab, makes a difference. It actually makes a difference to our customers and the performance in their businesses. We really are everywhere. We are focused on adding value to our end customers. We get relationship insights on our end customers, and we are quite visible. Of course, very cool, our recent acquisition of the Camp Nou, which is, as you know, where the Barcelona football team plays. So if you ever go there, you will see Tork. But more importantly, I hope when you flew into [ Gothenburg ] or when you fly out today, you will see our beautiful Tork dispensers in the airport. They are supporting the performance of the airport, and they are connected with our Tork Vision Cleaning to create cleaning routines for facility management. So hopefully, you will all see that in the airport. Now it's not moving. We have a strong hold in the washroom. We have a strong washroom portfolio of products, and this allows us to be present across the different segments in the B2B environment. While we leverage our strong washroom expertise, we also aim to grow outside of the washroom. For example, in the foodservice area, we are very strong with those dispensers that you have in your tables. It's Xpressnap, which is the world's #1 mapping dispenser, the world's #1, and it's very important in the food service area. And we're also strong in wiping and cleaning in, for example, kitchens in the restaurant and in industrial and in commercial applications. So we have a really broad presence across the segments and a really deep understanding of the dynamics and the needs of these different segments in the B2B world. In terms of our go-to-market, we, of course, are very focused on adding value to our end customer, to the airports, to the stadiums, to the offices, to the industries. And then with our sales force, we work with distribution partners, with other stakeholders like facility management because they help us amplify our business, our presence, our selling approach to grow more. Then, of course, we have a strong sales force that we are constantly challenged to be more agile, more flexible because we also have a channel shift from offline to online. And we really need to be, as Ulrika was explaining, omnichannel. We need to be present across all the channels to really capture growth. And our sales force needs to have this flexibility, the agility, the capabilities, the training. So we're constantly challenging and developing our sales force to create growth opportunities for us. We are well positioned to deliver on our targets. We aim to grow 2% to 3% and then, of course, do this while we have more than 18% EBIT margin. And we will achieve these targets with a very clear growth model. 60% of our business is this fantastic strategic products that you saw on the stand. These are highly differentiated. We have been growing twice the market, and we will accelerate and continue growing twice the market with our strategic segments. And where we are shifting our strategy is in the 40% base assortment. You may remember in the past, we focused on improving profitability. We even did some restructuring of the business. But now we have a profitable base assortment. It's good products supported by our Tork brand, and the focus is to grow in line with the market. So with this growth model, it's how we will continue developing the business. Now how are we going to grow or continue growing and accelerating twice the market in strategic products through innovation and R&D investment. We have this approach of global platforms, global product platform, global technology platform. So one platform, for example, could be PeakServe, if we pick one. PeakServe, you will see everywhere around the world, emerging mature markets. And of course, we leverage R&D technology in this platform. And then we can also manufacture and roll out in a seamless way globally by keeping few global platforms. So PeakServe is one platform. Xpressnap that you have on your tables is a global platform. We have soap sanitizer platform. We have this SmartOne, which is a fantastic toilet paper system that reduces 40% usage. That's another global platform, both mature and emerging markets. In terms of the base portfolio, as I mentioned, it's now profitable and the focus we're having in terms of our go-to-market is to expand our customer base to those customers that fit well with this base assortment. Of course, this is a competitive marketplace, so we need to be super good in productivity in our value chain. So we are highly focused. And now with the new end-to-end model we have in the company, it allows us to seamlessly work on reinvesting what we do in productivity to stay competitive commercially pricing promotion-wise with this portfolio. And then we also launched some volume fighters to drive growth. And we want to grow in line with the market, of course, watching out profitability as well in this 40% of our business. Washroom, as I mentioned before, is our stronghold. And the shift in our strategy that we are doing now in our go-to-market with our sales force, with our distribution partners is that the best for our end customers is to have a full bundled solution with one brand, one product integrated in the washroom. So in this picture, just to take as an example, this could be one washroom where you see PeakServe, high-traffic, very differentiated dispenser. You will see a toilet paper cordless differentiated dispenser, soap sanitizer, air care. You will see our period care dispenser where we synergize with Thomas' personal care, fem care business. And all of this -- we have hair care, by the way, as well. And all of this is connected with our Tork Vision Cleaning. When we connect the dispensers, we have these apps and algorithms to optimize cleaning routines for facility management companies. This can save up to 20% labor cost for facility management companies and eliminate runouts. Runouts is a big issue in an airport or in a restaurant if there's no paper in the dispenser. So through data, through insights, through traffic patterns, we actually optimize cleaning routines. We also have Tork paper circle where we recycle back to the factories actually in Lilla Edet you will see that later today. We recycle back to the factory our products because most of our products are made of recycled fiber. So this is actually good for us and good from a sustainability perspective for our customers. Outside of the washroom, we also think about food service as a bundle as well. Imagine if you go to a restaurant, then you see the full bundle of Tork products in the washroom. You see our Xpressnap dispenser in the tabletop. And if you go to the kitchen, you will see our wipers, which are purposely made for cleaning kitchen, for cleaning the tabletop. You saw some of those products, I hope, in the stand. So we sell a full bundle of products to food service, and we have an expertise in food service. We are also aiming to grow faster in industrial applications. And it's the same through the washroom stronghold, we sell outside of the washroom, wiping and cleaning that is purposely made for industrial cleaning. And we also have even now some soaps purposely made for cleaning in wash stations in the machines, for example, and we have some products that are also on the stand. So we go outside of the washroom towards these applications to continue driving growth. We also see e-commerce as an important growth opportunity for us. What we have learned and what we have found with e-commerce is that we attract a new customer pool that was a white space for us. And this is a small, medium businesses that actually access the category, learn about the category and buy the category online. And now we have created a purpose-made portfolio of products for e-commerce. We have a dedicated sales force. And for example, with Amazon, which is an important partner with us, we have grown actually very successfully in both North America and Europe, and we have a global partnership with them to develop B2B with Amazon, among other e-commerce customers that we have. Emerging markets is another important building block for us. We have a strong presence in Latin America. We are building a presence in Middle East, India and Africa. We use our strategic portfolio again, with these global platforms that we roll out to these markets. And you will see us in many places, we were just in the break talking about the Dubai Airport, among many other places, of course, where you will see our fantastic Tork business in emerging markets. And we want to double the size or double the sales in the next 5 years in emerging markets. So now I will show you a quick video. It's [indiscernible], an important customer for us in Europe and how we drive with them omnichannel and sustainability. So let's see the video. [Presentation]

I hope this shows some of what I was talking about in terms of the omnichannel approach in the market. And in terms of our M&A priorities, we see 4 different opportunities. One opportunities, how do we strengthen our washroom bundle that I was talking about. The other opportunity is how do we strengthen surface cleaning as we go outside of the washroom into surface cleaning in the different areas that I was explaining. Another opportunity that we see is we have a very strong go-to-market in B2B. How can we add some categories, perhaps first as adjacencies to synergize with our strong go-to-market. And then, of course, geographical expansion in line with our growth aspiration. So I hope with this short presentation, you get a good sense that we are really gearing up for volume growth and that we have a great solid business going forward. Thank you.

Thank you, Pablo. So impressive to see the global reach of Tork, and thank you for sharing all your growth initiatives, initiatives that actually paid off already in Q1, right? Yes. Keep on going. As you focus on volume growth, how do you then manage volume versus margins going forward?

Yes. I think we are well positioned today. Of course, with the 60% that is strategic to grow, continue growing and accelerating at least twice the market. It's a profitable proposition is differentiated. And then the base assortment, we have worked really hard and now we are in a good position of profitability to drive also growth in line with the market. So it's profitable growth.

Now we move into the final session before our Q&A starts. But before that, let us show you how Essity shapes the future of hygiene and health. [Presentation]

So now is when we bring it all together. I'm pleased to introduce our CFO, Fredrik Rystedt, who will take us through how our progress actually shows in financial terms and how we are moving towards our targets. Fredrik, great to have you here. Please go ahead.

Thank you. So you have heard my colleagues talk about all these beautiful businesses and equally beautiful initiatives to generate profitable growth in the future. And what I will actually do is to put some consolidated numbers to all of what you have heard. Now I'm going to actually start by talking about the history. Now I can see that most of you think that the future is so much more interesting than the history. But nevertheless, it's important to recognize what has been delivered in order to also provide a bit of credibility to the future journey. And bear with me, I'll come back to the future in just a few minutes. So starting with what we have achieved in the past couple of years when it comes to margin and return. So as you can see, we've improved our operating margin with nearly 300 basis points and our return on capital employed with nearly 500 basis points. And of course, this has trickled in, as Ulrika said in her initial comment, into a steadily increasing earnings per share. Now most of this improvement has been driven by a gross margin increase. So a very significant one. And your question, I can see that on your faces, how is that even possible? Now first and foremost, we've done many things. We've addressed underperformers. You know that. We've talked about that a lot. And at this current moment, we don't have any material unit in the company not creating value. So we've worked very hard with addressing underperformers. We've worked with premiumization, innovation. We've worked with efficiency. We've become much more price agile. And last but not least, we have worked with our portfolio to optimize that and grow businesses with high returns. And of course, one thing that is quite actually interesting, I think, is that many people tend to tell us that we are a volatile company. You heard actually Volker talk about this before. We get that a lot. You're a volatile company and you're actually more volatile than your competitors. And this just isn't so. So if you look at the volatility in 2 different periods. And on the left-hand side here, you see the volatility between 2018 and 2023. You can see it was SEK 1.9 or 190 basis points. This is the standard deviation in our EBITA margin. And then you can see the volatility in the last couple of years. So these are numbers that you saw, among others, but not just in Consumer Tissue, but the entire group. So we have reduced volatility quite considerably. The way this has been done is, of course, price agility and less dependency on input material that is moving a lot, but also premiumization and many other things. And if you actually compare to our competitors, you'll see that our volatility is actually lower, and it has been also in previous years. So it just isn't so. We are not a particularly volatile company. Now you may wonder what companies are actually hiding behind -- which companies do you choose, which are hiding behind these numbers. These are the absolute biggest companies that you would find in the sectors we're in. So in fact, we are not a volatile company. Now we have worked a lot with margin, profitability, but we've also generated quite considerable cash flow. So as you can see, our operating cash flow has been steadily very high, and this has led to a continuous reduction of our net debt. It's not only the operating cash flow, it's also divestment, as you know, but we now have the strongest balance sheet that we have ever had with a leverage ratio, net debt to EBITDA of roughly about 1.0. And this has allowed us to continuously generate a stable and, of course, also increasing dividend, as you can see. And of course, this year was no exception. And you are also aware that we have recently introduced a new tool when it comes to shareholder repatriation, so a share buyback program. And we're now into our third year with a program size of SEK 3 billion, as we've also had in the previous couple of years. Now the Capital Market Day today and you -- of course, you've noticed that is about growth. It's about, of course, organic sales growth. So let me talk about that for a few moments. So if you look back 5 years, you can see we've generated a healthy 6% in organic sales growth. It's a good number. And I think what is -- what we're actually more proud over is where that growth has actually come from. So if you look at this slide on Personal Care there, you can see that we've generated the organic sales growth in Personal Care, where the return is absolutely highest in Inco Retail and in family -- and if you look at Professional Hygiene, you heard Pablo previously talked about our trust or our ambition to continue to grow strategic products, and this is where the return is the highest we've done exactly that also in the past. Health & Medical consistently high profitability and good growth in both areas. So Consumer Tissue is a bit different. Here, you can see the highest return actually in Consumer Tissue is the branded segment. And that's where we've seen the lease growth retailer branded is also a good return, and that is compensated. But the reason this has been the case is, of course, down trading that we have seen in the last several years. Now great picture, I think, but there is one little thing that is quite obvious, and that is a lot of this growth has come from price. And we have an aspiration and so many initiatives to achieve growth through volume, and this is what you have also heard. Now when it comes to the future, you've seen all my colleagues here illustrate and of course, Ulrika, the group target and the goals that we have for each of our business areas. And the way we are intending to achieve that is, of course, obviously, through innovation, it's winning in the right attractive segments and in the right product areas. And of course, we are willing to put some money behind that in terms of A&P spend, where additional SG&A where that brings additional sales. I'll come back to that. But before that, when it comes to margins, same thing here, we have defined the goals for the business areas, all leading up to the target for the group of more than 15%. Pricing discipline will remain very key as will mix. And of course, we have defined all sorts of savings program that I will talk about in a few minutes. Now one thing that is very clear is that in the priority of growth and margin, what we intend to do is to secure that we get to the growth rate that we want to get to and through that growth rate also generate operating leverage and thereby going to our higher margin aspiration. So growth first, we add sustained margins and then reaching the margin target, if that makes sense. Now you've heard of all of these initiatives. I will only talk about 3 things that are common to all our business areas. Obviously, we will, and we have already, but we will also, going forward, increase our A&P spend with 30 basis points or more than that, approximately when we look at our future plans. And we will, of course, protect our margins through being mindful of costs. So cost-saving program, both in terms of COGS, but also in terms of SG&A. Let me talk about these 3 components a bit and actually start with the cost or the COGS. You heard us talk about this quite a long time, many different initiatives in the field of COGS. But one thing that has actually happened is when you come to fixed production costs, that has actually increased quite considerably in the last several years. You can see that you don't have the numbers here, but you can see on the shape of the graph there, fixed production cost has increased. Why is that? Well, obviously, we've seen quite some salary inflation over the last several years. And we have seen very little, if any, production volume growth in our business. And as you can understand, that means that the fixed production cost has actually increased per unit. Now this is not sustainable. So we have defined a number of different initiatives to secure that we come down in this field and become much more competitive. And of course, this will also trickle into the overall cost savings that we are paying for of SEK 0.5 billion to SEK 1 billion per year. We will continue with everything else that we have done in this field. So we still remain with that target savings but of course, we are -- and it's not if, when we also do the improvements in the fixed production costs, the quality of the savings will increase as we go forward. You've heard about the savings program that we had launched in terms of SG&A. And is on the back of the organizational change, we have set our targets that we will reach SEK 1 billion in cost savings at the end of 2026 as a run rate. And this is, of course, on the back of creating a leaner and more efficient organization, and this also brings lower personnel costs. So this is something that we have embarked on. We are well into that program, and we will deliver at the end of the year as we have promised. And of course, we're also entertaining lots of other cost-saving initiatives like lower travel, like being more efficient using consultants and many, many other things. And of course, part of this or most of it, we are using to secure that we get additional growth. And this is basically what I already mentioned, we will increase our spending in A&P with 30 basis points and more in the future years. Now it's not a surprise that most of the spending we have in A&P relates to the retailer and the branded products that we have for the retail segment. So feminine, incontinence and of course, also baby and it's not a perhaps a big surprise that these areas will receive most of the money. But to be fair, and you've heard that from my colleagues, we will increase A&P spend in all of our areas as we go forward to fuel the growth that we would like to reach. Now to sum all of this up, when it comes to margins, this is the path that you will see going forward for us to reach -- I have 2 weak hands apparently. Thank you, that was very quick. Good so the path to reaching our overall margin target is very simply a sum of what I've just been talking about. Innovation is very key, will remain very key. COGS savings, as I've just talked about, SG&A savings. Now the A&P investments that we were just discussing or I was just discussing, clearly takes a bit of margin space. And then the operating leverage will do the rest. This is not just something I make up. This is -- it says illustrative, and it is, of course, obviously, because you don't have any numbers on it. But what you see in front of us are the concrete plans that we are working on to actually achieve. Now we don't have ambitions only in the field of margin and only in the field of growth. We are also looking at our balance sheet. If you look back a little bit in recent years, you have noticed perhaps that our working capital has actually increased a bit. So if you look historically, we've been at about 6%, 7%, and in the recent couple of years, about 8%, 9%. Now why is that? Well, there are many reasons. But one of them is that there is a structurally higher working capital. As an example, you've got regulated payments, regulations in various European countries, just as an example. So there are structural reasons for the increase, but we can do better. And we have identified a set of activities that actually will take working capital down. So if you take inventory, not least partly as a consequence of the new organization, much better volume forecast not building inventory that we really don't need. And we've also multiple activities for accounts receivables and accounts payables. So there are concrete activities behind the ambitions that you see. Now if you look at cash conversion, we've actually been doing quite well. I showed you earlier that we had generated a lot of operating cash in the past, and we aim to do that also as -- if we go forward. Now you can see that we've been occasionally low, occasionally much higher, but we should sustainably over time, be at approximately 90% or there above in terms of cash conversion. Now if I look at the balance sheet, perhaps from a more holistic perspective, how do we actually allocate our cash flow? Well, first and foremost, we want to invest in our own business, we want to do capital expenditure that provides value. And you may wonder why is that? I'll show you that in the next couple of slides. But for now, I'll just say that this is the first priority. Now after that, having done that, our net cash flow after financial net after taxes, the first priority there is dividend, and we have a policy stating that we want to achieve stable and rising dividends. And as I showed earlier, that's exactly what we have done. So that's the priority. We want to continue to amortize our debt. If we don't do any M&A, we would typically plan for a continuous amortization of our debt. And what is left of the net cash flow is available for share buybacks, and you've seen us done exactly that. Now M&A, you heard Ulrika talk about it and my colleagues as well. And we intend to continue to do that. And if we do that, of course, needless to say, we will then amortize less or not at all. And we are prepared to also increase our leverage ratio. So under normal circumstances, we should be about around -- between 0 to 2x. We're currently about 1x. And under, you can say, extraordinary circumstances, we can go according to our capital restriction or capital policy up to 3.0x. So the question is, why is it such a great thing to invest in our own business. I showed you earlier, and you might have noticed that we have a return on capital employed of roughly about 17%. It's really high, but if you actually look at that or decompose that number a bit, you will detect that we have a significant amount of acquisition-related intangibles. So we -- that's just a consequence of the many acquisitions that we've made in the past. If you actually look at our operating return without those and you can see that our return is approximately 35%. So we have an amazing return in all our business areas and in average of 35%. Don't worry now. We are, of course, always targeting to yield a good return on all our assets. The only reason I'm showing you this is just to illustrate what a fantastic return we actually have on the capital that we have invested into our company. And we also have very, very high IRRs typically on the CapEx that we do. And these are some examples to what you see there to the ride. So if you go and take a look at the future, what we actually aim to do is to increase our capital expenditure a bit. We have been historically, if you look back many years, we've been above 5%, 5% to 6% maybe are in that ballpark. And then in the last 5 years, partly due to COVID, partly due to hyperinflation, we've been much lower. And we intend, due to the fact that we are able to generate very significant returns partly because we believe that we can grow quite considerably, we will most likely or we will increase our capital expenditure to a level of about 6% or there above. So this is a change where we want to invest more into our own business. Now if you look at that graph to the right, you can see where does our investment go? And it's not a surprise that if you compare it to the size of the asset base, most of it goes to the high-returning parts like feminine like Inco Retail is exactly the same as we have on A&P. And we also invest into Inco Healthcare and Medical and much less on Consumer Tissue and in the paper-making parts of Professional Hygiene. We see a potential to improve both margin growth and result in return if we invest a bit more, not least actually in Professional Hygiene. Now this is the full story. But of course, none of this would not -- would work if our people all of us in Essity, wouldn't understand how to behave also from a financial steering point of view. So we educate our people in value creation. We educate what drives value, what is the role of growth? How does it work when you increase margin? What does that do to value? We actually educate both online, and we also have courses for all our managers and most of the employees of the Essity Group. But education and knowledge is not only -- it's not enough. We also need to make sure that we incentivize people in the correct way. We've got multiple programs and of course, like sales bonuses or similar, but we have 2 main programs for the management of the company for all our management the short-term incentive program and the long-term incentive program. So if I start with the STI, it's actually based on 3 main KPIs, organic sales growth, as you can see, EBITDA margin and operating cash flow, all of them very, very centric for value creation. We basically have different weights depending on where you happen to be in your performance. So typically, a unit with a very high return will have much more weight for organic sales growth. And if you have too low return, then, of course, we got much higher weight on either cash flow or EBIT margin or both. And we complement these with special types of KPIs like cost savings or innovation, KPIs or similar. So very efficient and very much tied into the interest of the company and hopefully also the interest of all of you. We have a long-term incentive program. It's based on to 80% TSR and to 20% on sustainability and the 80% is, of course, if we do better than our peers, we get rewarded. If we do not do better, then we don't get rewarded and if we are on the trajectory to fulfill Science Based Targets, we get rewarded. Otherwise, we don't. And of course, all of the reward gets invested into the Essity share. So we have a similar interest as you all. With those words, thank you very much.

Thank you, Fredrik. Thank you for a good walk-through of how our progress actually how it looks in financial terms but also what it takes.

The fantastic businesses in financial terms. Yes.

And also what it takes going forward? Yes. I'm sure there are many questions for you, but we will address those in a short while. So thanks for now.

Thank you.

That actually ends today's presentations. I hope that you found the presentations and the day valuable and interesting. I'd like to have a clear view now of how Essity is moving faster towards its target. I will now invite the presenters to join me here on stage for a Q&A.

Perfect. All set. Yes. Well done. Clear the chairs. Okay. So we will take questions now from the room, but also those of you joining online, please submit your questions through the platform. We will address as many questions as possible, of course. Yes. We have a first question from Niklas.

Niklas Ekman from DNB Carnegie. Can I start on the topic of input costs. If you can just elaborate a little bit on what kind of magnitude you're seeing just to put this in perspective. We can obviously see what's happening with pulp. We can see what's happening with oil and natural gas, but it's still maybe a little bit challenging to see from the outside exactly how the mix of this impact. How would you put this in context to say the cost increases you saw maybe 2 years ago compared to what you saw the massive increases you saw 4 years ago? And also how you -- how much better prepared do you think you are today? You elaborated a bit on this in the presentation here before. But yes, that's my first question.

Yes, maybe I can start. I think you have so much more to bring. But I can start. I think 2 things. I mean, we're sensitive for, obviously, as many others in terms of energy as an example. And in terms of oil-based products like plastic and back sheets are superabsorbents and things. We have a lot of lag impact. So of course, it takes a bit of time. I think it's difficult to answer your question exactly how much because to be fair, we actually change this by the day. So it's not easy to answer. But of course, the magnitude is much less, Niklas, than it was 2, 3, 4 years ago. And from where I'm sitting, I think we're so much better prepared this time than we were last time. We're much more agile, not just us. It's also other competitors, it's also retailers and others. So I think we're much more agile, generally speaking. I think one thing, and Sandra, you mentioned it actually earlier, we have compensated, and we look back 30, 40 years, we've always compensated headwinds in terms of costs with pricing. But with that, and we -- I have no doubt that we'll do it this time as well. So of course, we're used to it, but it's never nice, when these things happen. But I'm sure Volker or Pablo or...

Would you like to add something...

No, I can just add. I think you cannot compare this to 2022. 2022, it came as a shock overnight. The magnitude of change was much, much bigger, and we had also applied different models. I think we believe it's a more sustainable cost change at the moment. It's why you have to also apply different ways of increasing prices. For example, we work very much in '22 with surcharges. This is most probably not appropriate tool right now, but you cannot compare with 2022. And then now, of course, pulp and energy for Consumers Tissue comes together, which makes the need for price increases quite obvious. But I think with all the educational stuff we did with our retail customers in 2022 is a much better understanding. They are really taught on high price impact and on pricing, energy was something very new because it didn't play -- I mean, we didn't have this volatility in the past. So I think with all the things which we discussed with our retail customers, the understanding there today about energy prices in the market, I think there's a much bigger, better starting point to implement prices right now.

Can I also -- is it okay if I follow-up?

Okay. Yes.

Just a quick follow-up. Are you seeing in terms of price increases, are you seeing the same kind of action from your competitors? Or is there any risk that you end up raising prices and competitors don't and you end up at a disadvantage?

No. I mean, of course, I cannot tell you it is like this, but when you'll follow the public information, when you follow the news, competitors are out with very similar price increase at the moment because I mean look at the cost structure and then look, I mean, tissue is our pulp, the global market. Energy prices are also usually moving more or less in the same direction. So I would assume every tissue supplier has a need to increase prices at this time. But again, guessing.

Yes, I'll maybe go one step further in that we're actually now seeing competitors move in the health and medical categories on price. And some of them don't have the scale that we do to sustain, so they have to move faster and harder. So now I would say we are doing the same thing.

We have a question here. Yes.

It's Warren Ackerman at Barclays. I'm a little bit surprised that there hasn't been more discussion on AI today, obviously, past approaches for consumers is changing radically, digitizing supply chains, returns on marketing spend, winning in data is going to be a key battleground for FMCG companies in the next decade. I'd love to hear a little bit from the panel, where you are in terms of AI. Your competitors are going very, very fast, is changing every day. And then for Fredrik, in terms of cost, in terms of savings, are we at peak head count now? Are we going to start seeing that G&A line coming down as you replace people with computers?

I can start on AI because I shared some examples earlier today on typical applications that we have for AI that was just scratching the surface to give some examples. So I would say, across our value chain, we are applying digital tools, including AI in order to become more efficient and also looking at how we can use that in our go-to-market in a good way. So that is clearly something we focus on. And maybe you guys want to share some examples from your respective areas. I know [ Thomas ], for example, the work we do on marketing with continent at scale and so on, I think is an interesting example.

Yes. So obviously, AI gives a lot of opportunities. I mean one is on the speed and the cost of developing communication assets. So we're applying a lot. I mean some of it we've moved, in fact, into in-house, and we're able to obviously reduce a lot of the cost and speed that it takes to develop assets. But also like the example I gave on the Liberal Club is a good example where we have masses of first-party data, which obviously we're then able to use our AI algorithms in terms of creating customized content based on the data and individual consumer that we serve versus going with mass marketing, communication, which gives us a lot of first-hand experience on how to be data-based and leverage again data better. The lead proof companies that we've acquired have what most of them have started with a direct-to-consumer approach, which also gives us a lot of new capability and experience again in how to drive digital first businesses. So I think we have quite a few, not only experimentations but concrete things going on. And you'll see when we do the tour, you'll see also how we leverage AI in terms of product development. So how do we design products, leveraging AI versus the more traditional older tools. So those would be some of the key areas.

Anand you had an example?

First of all, it's a good observation that we didn't talk about it so much on the stage, but please don't let that reflect how much we talk about it behind the scenes. I can reassure you with that. If Ulrika talked about across the full value chain, if I give you a good couple of examples of where we use it operationally. So we use AI and customer services for order processing. What was done by manual people before is being processed by AI, and it's fabulous and it saves time and actually, it's extremely accurate. We're also using AI to train our salespeople. Virtual training materials and these things are very impressive, supporting our salespeople on how to handle objections, how to handle indifference, very important when it comes to price increases. We're also helping our sales managers on how to coach their employees too. So many things in the back end and as well as all of the full organization, leveraging AI tools in office suites like Microsoft, for example, to improve our efficiency and effectiveness. It's a big movement. It's happening rapidly.

Yes. I can add to what Anand was saying in the B2B landscape but first, I think we were discussing in some of the workflows, customer service, but other workflows that we have in our transactional processes we already have concrete cases of AI driving productivity. And when it comes to our go-to-market in the B2B landscape, the sales force part specially with a small customer that is very costly for us to serve with physical sales force. We are starting to implement some AI tools that actually deliver a more efficient cost to serve with this type of customers. So it's early days, but we are, of course, testing and learning.

And we are not talking about AI because it has become so normal for us. I mean we have it everywhere. I mean marketing, content management, when you look at net revenue management tools in sales, for example, if you go to a factory, predictive maintenance, it's present in all areas. So for us, it's a norm.

And you happen to sit next to our new Chief Digital Officer. So in the break later on. You can catch him and talk more about this. Okay. I will interrupt with a question from our virtual audience. Niklas [ Antman ] he asks, and this is a question for you, Fredrik mostly because it's on your presentation. In order to reach your 3% organic revenue growth, and 60% EBITA margin target, is it required to increase CapEx sales from 5% to 6%? Or should the increase in CapEx compared to sales by 100 basis points resulted in a faster growth and higher margins than stated in the target.

I think it's a great question. I don't understand the question fully, but of course, we -- both the estimate on CapEx and the [ 3 and the 15 ], if I take all of them, they're consistent with each other. But of course, it's a bit about faster execution, getting to the [ 15 and to the 3 ] in a faster way and paving the way for the future. But generally speaking, as a general answer to this question, all 3 of those things are consistent with each other.

Okay. Let's hope he's happy with that answer. Then we also have a question from Charles Eden from UBS. And this is regarding the strategic review that we announced yesterday, how much overlap is there in the production footprint between Consumer Tissue and Professional Hygiene. Is there a significant number of sites which share production of these two product categories? Or are they largely already separated? Who would like -- would you like to start as well?

I think we have -- in Consumer Tissue. We have seen it early on, we have 22 factories. I think we have very dedicated factories like in [ Zewa ] for example, or [indiscernible] they are very professional Hygiene factories. And then we have a couple of factories which have a 90-10 relations. So very dedicated, and they're actually very, very few actually too which are very, very mixed and one of them you might see in the afternoon today, if we delay this one, it's actually our most shared factory between Consumer Tissue and Professional Hygiene. So the majority of the Consumer Tissue factory, which uses a minor part, less than 10% of Professional Hygiene products.

Okay. Thanks for that answer. Any more questions from, Karel, please? Sir, you have a microphone already. Go ahead, Oskar.

Oskar Lindstrom from Danske Bank. And today, we heard about your ambitions to increase growth, both sort of price mix and innovations, but also volumes. But you didn't really talk about the fastest-growing market in the world, which is Asia where you actually exited a large business a couple of years now. Have you any thoughts about at least selectively reentering the Asian market in order to achieve the volume growth targets? Is that something that could drive growth?

I can start. And just to be clear, we have presence in Asia with Health & Medical. So our medical solutions is present in many markets. For example, Indonesia, it's a very strong market for us when it comes to Wound Care. But then we have the fact that we have licensed our brands in the other areas to Vinda. So that continues to be operated through our different ownership. That license agreement is in place until beginning '27, and then there is a discussion about renewal or not. Depending on the outcome of that discussion, we will see what happens then. But today, we cannot enter with the other brands in Asia.

Now Karel, let's give her a microphone over here, please.

Regarding M&A, you shared some examples on the Wound Care side. But after a stream of acquisitions, we didn't see a lot over the last couple of years. Market growth has slowed. So what has been hindering Essity to more frequently add interesting assets?

You mean specifically in Wound Care?

Yes, exactly and in general, are there also opportunities to larger deals in H&M?

Very good question and someone that excites me. So may I put it like this. First of all, M&A in the wound care space is attractive, and I think it's important, we want to add scale and innovation to our portfolio, but it's not essential to achieve the growth and the margins that we talked about. So I think that's the first thing I would like to, at least, clarify. We had a couple of transactions at the beginning of this decade. We have ambitions to do more, but they need to be strategically correct we need to be able to see the synergies that we expect. They have to be value creating. So we're quite choiceful. We're happy to be patient, I would say. And then, of course, from a pure transaction perspective, we also need to be very mindful of our multiple as a company and ensuring that we can actually do the transactions, creating value for our investors and stakeholders. That's what I would say. Ulrika, anything?

No, nothing to add. I think that aside, generally speaking. And I would say the same thing that Volker did with AI. The fact that we had a few years with not that many acquisitions does not reflect a low activity level. So this is something we work very actively with to scout for the right M&As and to also then assess them. And there are opportunities that are interesting. At the same time, it has to be value creating. We are very disciplined in that. I always look at what is the most value creating, it's organic growth or inorganic growth?

Yes, we are kissing many frogs hoping to find our prince or princess, big and small frogs to your question specifically, but we're happy to be patient.

Johannes Grunselius, SB1. I have a question maybe to you, Fredrik or -- and the panel, if you can also answer it maybe. But CapEx will then increase. You are excited about that. It means likely a SEK 1.5 billion or something when you step up in the ratio of CapEx to sales, but could you give examples of what kind of investments you are looking at? What's changed there? And also sort of give us an idea of the time lag before the investment starts paying off in revenues and earnings?

Yes, I can do that. I think it's quite clear from what you've heard. And again, you'll hear more from my colleagues, but it's quite clear that we have very high growth ambitions as an example for incontinence. And of course, building capacity to cover that growth is something that's quite crucial to do. So capacity investments is quite key. You also noticed perhaps from that slide I showed that and I mentioned it as well that the CapEx investments in capacity investments in Professional Hygiene has been quite low over the last several years. And this is another example with the excellent profitability and the growth prospects that Pablo talked about earlier. This is an example of an area which we can really, really see creating value as we go forward. So here just a couple of examples, but mainly then capacity related. Now you were asking about what kind of return prospects or pay back or whichever way you put it, it depends a lot. If you do a major capacity in investment in, for instance, Professional Hygiene, then, of course, building time for such a CapEx is quite long and it takes quite some time to actually get the money back, so to speak, but the return is very attractive and if you do a relatively cheap, I shouldn't say cheap, but at least less expensive in feminine care that the payback is much faster. So it varies a bit. But I don't know, if you want to comment some more.

Nothing to add.

It doesn't look that way, no?

We agree.

Good. Aron, please.

Yes. Aron Adamski, Goldman Sachs. I wanted to follow up on the Consumer Tissue and Personal Care. In terms of your go-to-market strategy, how does it work in practice ever since the split into the two units from consumer goods previously. Are you going together to retailers? Or is it run separately, if you could give us some more color on that.

Yes. I mean one precondition when we decided for the end-to-end organization was we are keeping one face to the customer. So the reality is that we have a share for Personal Care, Consumer Tissue sales force. So we have one organization and that gives us the leverage and also the power to negotiate on high level with our customers. And basically, the organization is receiving orders from 2 buses. This is simplified what we are going to do. So Thomas is heading the Personal Care part. I'm heading the Consumer Tissue part, and then we have the commercial part of our organization, shared and the rest, dedicated.

Okay. CTPLD is a different story.

CTPLD is carved out because CT, so Consumer Tissue exclusively reporting to myself. And the other exception is that we have the 7 factories of the CTPLD reporting to the line -- to the General Manager of the Private Area Division. This is why in my slide, I have shown 7 plus 22, 22 are in the integrated supply chain, if a person reporting to myself, also dedicated end-to-end and the 7 out source basically cast out in the private label business.

I think maybe to build on this on actually another part of our go-to-market, which is when we look at incontinence care, we have talked about here that we are present with incontinence care across the different channels. And it's so important to have both the consumer perspective and the customer perspective. So here, we are working with one consumer perspective to follow the consumer journey because it's one brand and the consumer is sometimes moving between channels and that is the strength that we have. At the same time, we utilize the fact that we are experts in health care selling and experts in retail selling. So therefore, it's a split business between Personal Care and Health and Medical. So of course, when designing an organization, these things are important to consider where we really have the benefits of going together with the setup we have and where it's important to split.

Maybe one build is that we also have markets in Personal Care or markets where we don't have Consumer Tissue, but we only have Personal Care, where we have a dedicated, obviously, sales force focused on that. One example is in Australia or, for example, in North America, also in Nordic markets, Consumer Tissue tends to play a smaller role from a branded point of view in certain countries. So we do have the experience of all sort of markets, where we go, purely on Personal Care.

Tom, please?

Tom Sykes from Deutsche Bank. Just to initially follow-up on Warren's question because I think you kind of avoided one part of it, which is we're going to see a wave of the agentic AI coming. So the procurement is going to get a lot tougher. So why is your AI on the cost side and hoping to generate growth better than the AI that's going to come from procurement because they've got a data advantage, it seems like at the moment because they're looking at the data of a lot of suppliers, not just the data of one supplier. And then another question was...

It can wait, and answer that question first, please. Anyone?

Not sure I understood fully.

Could you rephrase the question?

Yes. I guess Well, firstly, are you beginning to see AI used by your customers. So the larger grocery retailers, et cetera, are they using AI, both in assessing the commodity costs and the market growth opportunity to limit or increase pricing or affect your pricing? And as that gets rolled out more systematically, do you think that your productivity initiatives are going to be able to offset that? Or indeed, do you even see it as deflation rate at all?

No, I think -- and I understand it because you say procurement, I was thinking sourcing procurement, but then let's hear about what is happening at the customer side.

I mean, our customers, our more sophisticated retail customers are leveraging AI, definitely. And you are right that negotiations have really professionalized over the years. So basically, it's very data-driven and -- but I think, this is not really influencing how we are acting with our customers. We come very well prepared. I don't think there will be any impact. But you're right, the retail negotiations have professionalized a lot over the last year.

Then maybe to mention, of course, we have talked a lot about expanding our online presence. And of course, e-commerce is a very important sales channel for us. And there, we make sure that we have and that we are well equipped in order to meet the development of AI in that sales channel specifically. That goes across the businesses.

Yes, maybe just to add. I mean I think if the onus, of course, if that develops from the buyer standpoint and it should and it will, that puts the onus on us to differentiate our value proposition even more so that we cannot just be compared side by side with others. Certainly on the health and medical side, that's something that we look at. How can we truly differentiate our value propositions to deliver total value to the customer so that we're not seen side-by-side versus somebody else. But it's, of course, a point that we're thinking about.

Sure. And then just another question was on the margin bridge. It looked like a little -- around half of that was coming from operational leverage. And just to be clear, that meant volume leverage, I guess, what is the level of volume leverage you think you need to get half the at least, I guess, 90 basis points? And is that something that you think, you're going to get over the next 12 months when we're likely to be facing price increases, I guess?

Sure, I'll take. Yes, I think the short answer is it's consistent in the sense that what you saw in the past is consistent, of course, with the 13% and -- sorry, the 15% and the 3%. So I mean we got fixed cost of roughly about 37%, 38%. So you can calculate the growth that it actually takes. It's not a 12-month journey. The targets that we have set is not defined in terms of time, it's, of course, within a reasonable planning horizon. So it's within our planning, but it's not 12 months, Tom.

Any more questions? Yes, Nicklas.

Nicklas Skogman, Nordea. Fredrik, you argue that margin -- Essity's margins are not as volatile as somewhat or some portray them to be. So is margin volatility then not a reason for why you're considering a potential spinoff with this strategic review?

Would you like to comment, Ulrika?

But I think it is, of course, looking at the total portfolio and see how can we improve our composition in the best possible way, creating the best possible conditions for both Consumer Tissue and the group to develop to its full potential. And there, the characteristics of the business, all the characteristics of the business are taken into account and how much they are taking into account is after the assessment.

Okay. And related to that, if it's not higher margin volatility than peers, what do you think explains the valuation discount for Essity compared to some peers?

That is a question I get occasionally and I'm always actually quite surprised because I should ask you, you're the investors, so I can't give you that answer. But I'm sure there are many here that can provide you with an explanation, perhaps.

Well, I think it is the margin volatility.

Then that's great. That's good news because we don't have any. So that's good news.

We have time for one more question. Nicklas, you've already asked a question, is there anyone else that has not had a chance? Good. Then you go ahead.

Okay. Can I follow-up with a question on the Consumer Tissue and the evaluation process here. And coming back to the private label Europe business, when that was evaluated, it became completely separate. And earlier today, you talked about how initially in the next 6, 12 months, this was going to be more of a desktop exercise. So I guess my question is, at the end of these 6 to 12 months, are we going to see this business being completely separated or not?

Well, I -- first and foremost, that was not that -- in this specific position when we had the CTPLD discussion as such. So that was probably a different type of strategic review. What I can refer to is what we're doing now. And what we're doing now is to assess the different strategic alternatives that we could have at the table and also preparing for any potential outcome of that. But we should not proceed with any of those type of the actions before we have a conclusion.

Perfect. That concludes today's Q&A. Now I hand over to you, Ulrika, to the summary of the day.

Yes. You can sit, if you want to here. It's nice to have you here. So thank you for listening. And don't -- I mean you have a lot of exciting things to look at before we close the day. But just to conclude on the hours that we've had together now. Now you have met some of our teams, part of the 36,000 people that we have across the business. And I hope that you have felt how immensely proud we are to work in a global leading hygiene and health company that makes a difference in people's lives. That improves quality of life, that improves well being for over 1 billion people every day. We're immensely proud for that. As excited as we are also I hope you felt how excited we are about continuing to develop our beautiful businesses and increase and enhance our shareholder value. Now the people that sit up here, I think are excellent representatives for one of our key competitive advantages because I wanted to take the opportunity to reiterate our competitive advantages. And one of those is actually the winning culture and the highly engaged and talented people that we have in the organization. What they also embody together is the unique set of the capabilities that we have in the company that sets us apart and that we will leverage even more going forward. And what I'm talking about then is our deep expertise that we have in B2B and in B2C and the deep expertise that we have in med-tech and in fast-moving consumer goods. What I have also have come across during the past 2 hours has been the proven capabilities and strong capabilities that we have in brand building as well as in innovation. And I think one thing that is really a critical success factor in those areas is our ability to scale where it matters, yet being highly locally relevant. I think this is really one of our superpowers, our ability to combine scale with local relevance. And on that note, we have a high share of local and regional supply chains. And that has actually proven to be a strong competitive advantage in the market environment that we're in with a lot of geopolitical uncertainty. Then last but not least, Fredrik, you have talked about our strong balance sheet and that is, of course, also a competitive advantage that we have. The fact that we have the financial flexibility to continue to invest in our business to pursue value-creating M&As and then also provide good returns to our shareholders. Now our strategy is something that you recognize from before. It's totally consistent with how we have worked before. What is different is the way we execute on that strategy. So we've talked today about how we will take even more decisive actions when it comes to lowering our cost base, both to the SG&A cost save program, but also through focus now on production costs. That will free up resources and enable us to finance more behind our brands and behind our superior solutions. So we will invest more to grow more while protecting our profit margins. Then also what we will do is to accelerate the portfolio shift so that we focus even more on the most attractive parts of our business. And we will do that too, more focus on those areas in our organic growth, but also to proceed on our M&A agenda. And I hope that you guys are as excited as we are about what lies ahead for Essity on our path towards our vision to be the undisputed global leader in Hygiene and Health. Thank you.

Thank you, Ulrika, and thanks to all of you for joining us here in Gothenburg, and thanks to you joining us online. We appreciate your time and your engagement.