Huhtamäki Oyj (HUH1V) Earnings Call Transcript & Summary

Good morning, all, and welcome to Huhtamäki's Q3 2025 Results Call. My name is Kristian Tammela, VP of IR. Today, we have, as usual, a presentation first by President and CEO, Ralf Wunderlich; and then followed by our CFO, Thomas Geust. And after the presentations, we will have a lot of time for Q&A. So without further ado, let's get started and handing over to Ralf.

Thank you, Kristian, and good morning also from my side. Thank you for dialing in. And I'm starting with an overview of higher level of the group. Very happy to share with you today that we saw profit improvements for the group, specifically driven by 3 segments: Flexibles, Fiber and Foodservice in a what we see as still pretty volatile and soft market environment. Also happy to share that we have both, in the quarter as well as year-to-date, seen strong volume growth in 2 of our segments, namely Fiber and North America. The margin improved to now 10.3% in the quarter. And for the first time, all of our 4 segments delivered greater 9% EBIT margin. Headwinds from FX, especially the U.S. dollar, persisted, impacting our top and bottom lines. We have seen a weak quarter in North America, and we'll further comment on this in a bit when we come to the segment presentations. I'm also proud to see that our 3 value drivers continue to progress very well and are showing impacts. Let me use that as a bridge then to the drivers. Driver number one is growth. And we want to use all levers, which we have to drive profitable growth. First one, organic. Initiatives which we kicked off are very focused, and they are focused on both the JKAs, our global key accounts as well as small and medium customers, especially the later one where we have a very small share with, are in focus, and we are starting to build good relationships in all our segments. As I mentioned before, we have seen volume growth, both in the quarter and year-to-date in Fiber North America. And of course, that's in a volatile and soft market, very encouraging. On the inorganic side, we are proud to say that the integration of Zellwin Farms is tracking very well, and it's delivering both top line as well as bottom line as by promise. We're also managing our pipeline actively. It's a long pipeline. And as you know, we are focused on small bolt-ons. So that will take some time, and we will do that in a very disciplined way. Second point and second driver is capital discipline. After significant investments over the last years and with very disappointing growth after those investments, we have started to be much more disciplined already at the back end of last year. We continue to be very disciplined, and we are going ahead with the guideline of 80-80-80-10, which is EUR 80 million approximately for growth; EUR 80 million for productivity; EUR 80 million for maintenance; and EUR 10 million for, what we call, license to operate. That context will continue. But we are ahead of our target, and we might end this year at a lower number, as you can see from the Q3 track, which we have. Third driver for value for us is accountability. We have changed to now empower our segments. We will have faster decision-making and faster speed of execution. We have also decided that tax and treasury will remain in the center and now procurement is also handled directly from the center for all our segments. The reason for that is that we will see direct bottom line impact by those 3 functions. All other functions are supporting the segments and are guiding our reporting, our coordinating, our controlling and ensuring that at Huhtamäki, we have one language. Let me swiftly go to the business performance. And let's start with net sales. As mentioned, similar market conditions in Q3 as we had in H1, pretty volatile and very soft demand. With the FX impact now accelerating in the quarter and now over 4% or EUR 44 million in the quarter alone, we have a very, very negative impact just from FX alone. And you see the acceleration by comparing quarterly numbers to year-to-date numbers, where year-to-date, we are at approximately 2%, but in the quarter, it was more than 4%, as mentioned just a second ago. Our organic growth continues to be impacted and stands now at minus 0.9%, just under 1% year-to-date. Again, I would like to stress that we are seeing volume growth in North America and Fiber, and we are actively working also in the other segments to come back to volume growth. Good to see that [indiscernible], and that's what we call the acquisition line here is delivering on the top line, as I mentioned before, also on the bottom line. Now looking at the profits. And we see that the adjusted EBIT was standing at the quarter at EUR 100.3 million. If we add the EUR 4 million FX impact, then we would be, in fact, 2% above last year quarter and spot on year-to-date, if again, including the FX impact, which for year-to-date is over EUR 5 million. Our quarterly margin increased now to 10.3%. And even year-to-date, we are double digit at 10.1%, which is again slightly ahead of year-to-date last year's margin. We are very proud to see our EPS growing 2% year-to-date. On a side note, if you would adjust the quarterly EPS by the currency, we would also have a 3% EPS growth in the quarter. Capital discipline is allowing us to have a very strong support from capital expenditure, which, of course, is impacting -- positively impacting our cash flow. So you see that we are 26% down quarter-over-quarter on capital expenditure and 18% down year-over-year. Now going to the segment specifically. And as always, let's start with Foodservice. The demand in Foodservice remained unchanged versus H1. On a comparable FX, we are spot on last year. And I want to stress that because it's after 8 quarters of decline, it's the first quarter that we are now back on being spot on with the prior. The increase in net sales came especially from Western Europe and Middle East, Africa, supported by price and mix improvements. Adjusted EBIT is above 9% margin again, both in the quarter and year-to-date. This is, of course, also driven by cost focus, cost management and margin management, and that will remain key. Our adjusted EBIT is 5% ahead of prior in the quarter and just at minus 2% year-to-date. And Foodservice continues to focus on cash flow. And again, here, capital discipline is supporting a very strong operating cash flow delivery. Now North America. North America had another strong volume quarter, and I want to stress that even though the North American numbers are disappointing that the volume was strong in North America, and that was driven by mix, by pricing and by volume. But pardon me, the mix impact in the quarter was negatively as the price impact was negatively. So volume positive and price/mix negatively. So the total comparable growth in the quarter stands at minus 3%. Year-to-date net sales stands at minus 1%. So the disappointing EBIT was impacted by, as I mentioned before, by price, by mix and by cost headwinds, specifically operating cost increases, transport, energy cost increases. I encourage you to look at the full year margin as, again, the quarter was impacted by those very high impacted on the transport, energy and other operational cost increases. So we are running at a margin of 11.4% year-to-date, which, as anticipated already earlier in the year, is driven -- clearly driven by pricing, which we were holding on for 2 years after the spike of raw material prices in '22. So this is now the more normalized EBIT percentage, which we are seeing. Moving on to Flexible Packaging, where we have a much stronger story to tell. Even though the volume side continues to be soft, we continue to focus on price, mix and turning around our underperforming units. And we are seeing in the quarter and year-to-date encouraging results on all of those elements. We have had unfavorable FX, but again, strong price and margin management. We were able to increase the EBIT in the quarter versus last year by 28% with a very strong double-digit margin for Flexibles in the quarter. However, here, the EBIT absolute and relative was impacted by raw material decreases, which we will need to pass on, on Q4. Hence, also here, I would encourage you to look at the year-to-date EBIT margin, which is more what we see our business currently traveling at. But even that one is 2 points ahead of what we have seen last year. So we are now at 8.8% margin. Flexibles also delivered very strong cash flow, and we also were very disciplined on the capital expenditure side. Let me move on to Fiber Packaging now. Fiber Packaging continues to show very strong performances as they have done in the 2 quarters prior to that. Net sales was driven by volume, price and mix and resulted in a strong quarter with 9% growth and year-to-date, even a double-digit 10% growth. Net sales growth, combined with cost management, drove also a very strong EBIT improvement, again, both in the quarter and year-to-date. Our margin stands now at 12.6% for the quarter and similar at 12.4% year-to-date. As Fiber is performing very well, we continue to invest. In fact, Fiber is the only segment where we have seen growth in capital expenditure. This is again totally in line with our capital discipline, where we want to invest behind those segments, which are performing very well. Thomas, would like to pass on to you to give us an update on the financials.

Thank you, Ralf. And I'm starting off with the main topic actually for the quarter, and that is the currency. Currency and its negative translation impact to our results is visible clearly in both top line and in EBIT. You can see it accelerating to EUR 44 million net sales impact in the quarter, EUR 4 million in EBIT; and year-to-date, EUR 66 million and EUR 5 million on EBIT. I would like to remind you here that our P&L is valued at average rates, while the balance sheet is valued at closing rates. So we see the impact immediately in the balance sheet while we come with a lag in to the P&L. Of course, the biggest currency impact will come from the USD. There, we have a drop now of the USD to a $1.12 average rate, while we, in the closing rate, already see the $1.17. Looking at the currency last -- yesterday and today, we are roughly at $1.16. So USD, obviously, being a very important currency, but you can see that we are trending negatively on basically all currencies in the closing rates and only Thai baht and British pound is positive in the average rates. I would like to remind you also about that in our top 10 country revenues, we have only Germany and Spain denominated in euros. So currencies are and will remain one of the core topics when it comes to translation of profits. So the main impact in North America, but also in Flexibles, you will see significant currency -- negative currency impacts. Then moving on to the more detailed P&L and adding on top of what Ralf said, we are still seeing tailwind in value add. Otherwise, I would say the core of our continued positive profit development operationally really comes from the activities we have done ourselves. You will find that on personnel costs, we are still up year-to-date. But actually in the quarter, we were trending already positively compared to prior year, just as one example. The EBITDA is progressing ahead of EBIT, indicating that we are seeing a strong operational performance in our profitability, but also showing that we still have assets available for delivery. Other items in the P&L to address is the net financial items where we had a few one-offs last year, partly explaining the significantly lower finance cost; however, we are also moving downwards on finance cost from a structural point of view. The tax rate remains at roughly previous year's level. So we are at 23.4% of tax rate. So also there, a consistent delivery. So if you look at the EPS, I would claim that despite the hit from the currency, we have made a good job at maintaining the EPS at roughly previous year's level on the quarter and actually improving year-to-date on EPS. Moving to the cash flow. Cash flow progress since the low Q1 has been good. We have now -- you will also find in this bridge that the sort of abnormal or nonoperational items, proceeds from selling assets and the CapEx part are balancing each other off. So one could say that the cash flow development comes purely from the operative activities as well as from lower taxes. So progress on cash flow is good. We are anticipating also quarter 4 to be a positive cash flow quarter. So good development based on our capital discipline also in the cash flow -- on the cash flow side. Net debt to EBITDA, you recall that we got an upgrade from S&P on our rating. We are nowadays a BBB- company. That is really driven from the discipline we have seen on deleveraging our net debt. We are at 2 in the end of the quarter. So similar level as previous year and staying very focused on this key parameter. Gearing is at 0.65. And as you can see, we have sufficient cash and cash equivalents available at the amount of EUR 328 million at the end of the quarter. On top of that, we obviously have our revolving credit facility available. Another element, which we have been focusing on in order to be a predictable company is obviously working around our loan maturity structure. We have highlighted on this page the key events we have been going through this year. So in June, we signed a EUR 150 million Schuldschein. You recall that we entered an EMTN program for bond issuance program. And under that one, we issued our first bond in the quarter. And in connection to that one, we also set out a voluntary tender offer for repurchase of some of the outstanding bonds. So a disciplined approach in order for us to have a predictable maturity available in our loan facilities. Moving over to the balance sheet. In the balance sheet, obviously, the translation impact of currencies has a significant impact. You can see that alone in the equity line, we have a EUR 232 million negative impact. I would also highlight that on the working capital, we are up roughly EUR 67 million. And with that one, I would highlight that core items come from, for instance, receivables. So working through this balance sheet towards the end of the year will be core, including delivery of the inventory. Looking at then the return on investments, you remember me highlighting that this comes with a significant lag. So we are slowly but surely moving towards our long-term ambition, which is a 13% to 15% ambition on return on investments, adjusted return on investments. Beyond that one, we are continuing now in the threshold of the 10% to 12% on adjusted EBIT. We are in line with our net debt-to-EBITDA ambition. And as you recall, we have paid the dividend this year in line with our ambition as well. So the only part we are really still lagging is the comparable growth. And with the comparable growth, we would also see a positive development into our return on investments. Our outlook and short-term risks remain unchanged. And with that one, I will then open up for Q&A.

[Operator Instructions] The next question comes from Lewis Merrick from BNP Paribas.

Just starting with North America. As you went through a somewhat disappointing quarter for profitability, you mentioned pricing and costs. Can you just explain those various parts in tad more detail? And equally, what gives you confidence in the margin bouncing back to the year-to-date levels as you spoke of? And I've got one more to follow.

Very relevant question, Lewis. Thanks for asking that. So let me start on the pricing side. You will recall that in 2022, the raw material prices spiked and then we saw reductions of those over the last few years. We were able to hold on, on those advantages, those pricings for quite a while. With now a softer market, that was just not possible anymore. So we had to go back and pass on those benefits back to customers. We anticipated this the whole year. So that happened. Now as you can also see, and I mentioned that we benefited from getting more volume, not just maintaining, but growing volume in North America, which is a soft market currently. So we are very convinced that, that was the right move for us to do going forward. So that's now at the level which it should be, so I'm confident on the pricing side going forward. On the second point, on cost, there are a few points I'd like to mention, which might give you some comfort. Number one is there were some costs: energy cost, transport costs, which did hit us in the quarter quite a bit, but we see those getting more in line in Q4 and then going forward, number one. Number two, we did prebuild quite a lot of inventory in the quarter for the seasonality. Seasonality is now again much stronger in North America. We saw at Easter already, when we had the Easter seasonality, and we are seeing this with the order intake now also for North America Q4 already. So seasonality is strong. We had to build inventory, which increased our cost as well. As did and part of that was, of course, also building inventory for our new -- or our 2 start-ups, which I mentioned, Paris and Hammond, and the additional volumes, which is great news, unfortunately, came with increased cost as we are ramping it up. We had to increase our cost to make sure that we are ramping it up correctly those 2. So those were costs which, again, we will manage going forward, which gives me also confidence. And then lastly, again, with the seasonality, I think the way to look at this really is if either you look at the year-to-date margins or, in fact, you say it's H1 and H2, where Easter can vary between 2 quarters impact and the same then, of course, Q3, Q4 with a very strong Thanksgiving seasonality, which can or cannot impact the end of Q3 strongly or the beginning of Q4 strongly, depending on when you start building your inventory. So with other words, when our customers are then ordering from us. That gives me the confidence that I see Q3, Q4 together, and I see the year-to-date numbers that we will get the cost back under control, especially in Paris and Hammond, the 2 start-ups that we have the pricing now at a level, which we think is the new level going forward and that we will manage, again, the demand of the seasonality better.

Very clear. And then just on Flexible Packaging, clearly, great to see the improvements in profitability in that division. My math puts that -- at least part of that down to improvements in the Indian entity, but it would seem there is improvements elsewhere also. I know you mentioned cost tailwinds, which will then need to be passed on in the next quarter. But can you just give a bit of extra color on what drove the improvement there this quarter and also equally on the sustainability of that going forward?

Yes. Also, that's a very relevant question, Lewis. So I think on Flexible, there are a number of points. Really, it's not just India or Turkey, the turnarounds, which are, of course, helping us, especially if you compare this to, frankly, the years before, not just prior. So that's helping us, and that's -- we are seeing this now in every quarter. Q1, we saw a bit; Q2, we saw more; Q3, we see that. So that's helpful. But we are seeing also the same in other units. Flexibles, because of soft demand started cost-out programs early in the year everywhere, not just in those 2 where we have the turnaround teams, but in every unit. And that's now giving us the benefit on the cost side on Flexibles. They are very stringent on managing margin. They don't take any more negative margin orders. So they are very stringent and diligent and disciplined, I should say, on the management of their margin. So that's really great to see. And as I mentioned, we had in the quarter specifically a very positive impact from raw material where we saw a decline. And you know that Flexible is, in fact, the segment where we have to pass on most with automatic clauses. So we will see that impact now reversing in Q4. So we think, again, it's the other direction than North America, but we think the way to look at Flexible is more like the year-to-date margin, which we are super proud of because it's a 2 point ahead of what we have seen in prior year.

The next question comes from Samu Wilhelmsson from Nordea Markets.

Maybe only one question for me. Given now that the inflation is now, of course, waiting on end demand for branded products. And according to my understanding, customers for you are most like big brand companies. So I was wondering that could you comment on your -- either your willingness on or your ability to try to gain these like smaller local customers to combat these kind of problems arising from...

Yes, that's great. Thanks for that question. Look, we -- on the smaller and medium-sized customers, which are under focus, we have lots of activities kicked off, and we see good discussions. I got to be transparent that those discussions will take time before we see the benefits. This is not -- never going to be a quick win. We just needed to start it, knowing that they are, of course, supported by competitors since years. So we know it's a starting point, and we know that those discussions will end up in better relationships and then eventually, we will get our chances. So we have started that knowing that we will not get a small or a short-term impact, knowing it will be relatively small this year, and then we will see this ramping up over the next years. So -- but it was important to start. And yes, you are right, with the global key accounts, of course, they are seeing and you have seen their numbers, and you will see more reports coming out shortly. They are having similar issues on relatively soft demand as well, which is then what we are seeing as with most of them, we have long-term contracts. So there is -- a quick share win is always going to be, again, difficult. So we are supporting them. We believe that they will come back, and we are sure that demand will come back, but we don't see it coming back at short term.

The next question comes from Maria Wikstrom from SEB.

This is Maria Wikstrom. I wanted to touch upon the North America, given that I think the kind of soft guidance, I mean, earlier have been that the margins on North America around 12-ish level, and now we were a bit above 10% in Q3. So how should we -- I mean, see, is this around -- I mean, if we talk about like annual EBIT margins in the coming years, I mean, is this still valid? Or has something changed in the profitability of North America?

Yes. Thanks, Maria. So I think we are very consistent to how we guided after the Capital Markets Day a few years back, the North American profitability, which was between 11% and 12%. So we are at 11.5% now. We think, again, if you take -- which will be seasonality driven a strong Q4, that we will be in that range of 11% to 12%, and that's the way we are thinking about North America going forward. The 13.9%, which we have seen last year as the highest was clearly impacted by a pricing, which we were holding on after the raw material spikes a few years back. So the 11% to 12% guidance, which we have given some time back is how we see this, and we are very confident that we will deliver on that.

Okay. And then I wanted to touch upon, given that the North America is kind of like 3 different businesses. So if you could talk about the volume development, I mean, in Retail Tableware and Foodservice and then the Retail Packaging, please?

Yes. So we don't give specific volume guidance, but I give you a flavor. And the flavor is that from a volume perspective, we are doing well in all our different segments, which we are driving in North America, specifically well in Foodservice. But again, also on the Retail side, we are pretty happy with positive volumes, and we are seeing seasonality. So the next quarter is the big quarter as a reminder. So we don't have huge variations. We have volume growth year-to-date and in the quarter in North America, I'm pretty proud of that.

All right. And then my final question on CapEx, I mean, which was down year-over-year in Q3. I mean, is this kind of the quarterly run rate we should expect, I mean, for the Q4 as well? Or is this something specifically why the guidance -- why the CapEx figure was lower in Q3?

No, you should always expect in packaging that the last quarter is the highest quarter with regards to CapEx. So there's always a ramp-up over the year on CapEx projects coming and then, of course, also being paid to our suppliers. So that one, you should expect a stronger Q4. But I think our overall capital discipline is showing clear improvements year-over-year. So that would be the flavor I would give you.

Significantly down towards previous year though.

The next question comes from Hai Huynh from UBS.

I have a couple of questions, please. So on Foodservice, are you seeing any early signs of demand stabilization for -- within Q4 in the U.K. and Northeastern Europe? And on Fiber Packaging, how sustainable do you think the strong volume growth in egg and food packaging is?

Yes. Thank you, Hai. So we see early signs that take our largest customer that the promotional activities are showing impacts. So how sustainable that one is, the next quarters will show, but we see that, again, who is doing promotions sees traffic coming back and sees there an uptick. So that we have clearly seen in the quarter, specifically in the 2 markets you mentioned, and there specifically in Western Europe. But also in the U.K., promotions are showing first results, but Western Europe even stronger. So it's a quarter we are super proud of the quarter being flat versus prior. As I mentioned, 8 quarters in a row negative. But it's too early to tell that this is going to continue. So I would say we think it's still going to be relatively soft before demand really comes back, but we also see that promotions are increasing and increasing. And towards the end of the year, again, we are hopeful that our customers will do their promotions. And of course, we will support those. On Fiber, so the strong growth, which is really driven by all 3 elements: by volume, by price and by mix. We see this now not happening in 1 quarter, but we see this now happening for the whole year quarter after quarter, in fact, month after month. So we are very confident that our segment is strong, well prepared, very close to their customers. They are working, as a reminder, not with global key accounts. They are working pretty much with local small accounts. And they know how to build relationships with those. They know how to serve them well, and that's clearly showing the benefit now. And I mentioned also that we are investing behind Fiber. So we are confident of the Fiber performance, that's one. I wanted to mention on Fiber as well that we -- wasn't a big impact, but we had a fire in one of our 3 South African plants at the end of the quarter. So this is going to be back in Q4. That plant, it's not material, but just as a factual update on you on the Fiber side, as you are asking, Hai.

Sorry, and I forgot one last question, if you don't mind. So net debt EBITDA now 2x at the bottom end of the range. And you mentioned capital discipline. So are you planning to deleverage further then? Or are there other spending or returns that you're considering?

Yes. Thank you again for that one. So you might remember, Hai, we presented our model on how we are thinking about allocating capital to shareholders. So we have a number of things we are considering. Number one, where we think we have the biggest impact is how can we invest the capital back into the business to continue to grow profitably in our business. Second one, and we have now opened again up the lever of M&A. So we are actively looking at M&A. We did one in April this year, but we are continuing to look at other opportunities. And again, we will be very disciplined. It's super difficult to predict if and when something will happen, but we are prepared if it does. And then we are considering, of course, returning money to shareholders via dividends, which we always did. We are very proud of our long track record of increasing dividends year-over-year. So that's extremely important for us. And of course, we are not excluding other means, which, of course, are up to the Board to discuss, but we are not excluding anything here. So the target is not to be at lower than 2x. We are now at that very bottom end. The target is to be between 2 and 3x, and we are considering all levers. Thomas, anything you want to add from your side?

No, I think you covered it all. So organically, we are still moving towards a continued deleveraging. So we want to use the capital wisely.

The next question comes from Calle Loikkanen from Danske Bank.

I have a couple of questions. And firstly, I mean, it sounds like you're not expecting any major improvements or major changes in demand in Q4. But what are you kind of seeing for 2026 in terms of demand? Are you kind of optimistic for next year? Or what kind of discussions do you have with your customers and so on?

Yes. Calle, thanks for looking ahead. Yes, we -- of course, we see the market being soft on the one side, the market being volatile on the other side. We are seeing that the -- look, the geopolitical issues didn't all go away. So that's still, of course, impacting everybody. Of course, we are seeing that the tariff discussions, even though they don't impact us directly in the U.S. are not improving consumer confidence at all yet. So we are seeing those headwinds. And we -- until the world is changing, we don't see those really helping us. But on the other side, we see that our 3 value drivers are starting to help us. So I made the point about in a soft market, we are having 2 of our segments improving volume, growing. That's really important. We see the other 2, of course, working really hard on making sure that they get closer to customers, new customers, which, of course, this year was always going to be a difficult one to have an impact. But of course, we are super optimistic that this will start showing an impact going forward. We have started, and I mentioned that over the year to really kickstart our investments in the U.S., Hammond and Paris, which is now already showing impacts on the volume side, unfortunately, with increased costs in the quarter. But of course, we are seeing those volumes going to help us going forward into 2026. We have invested, Calle, as you know, in lots of blue loop investments where we still have capacity, and we are actively out in the market selling them. We have a couple of multinationals, which gave us already contracts where we see increased volumes for next year. So yes, are we optimistic for next year? We are. But on the other side, just to make sure I don't lose that point, we are seeing still a market, which is soft, and we are still seeing geopolitical issues in many places, which aren't helpful at all.

Yes. That's very helpful. And my second question was actually on the capacity ramp-up in the U.S. I was wondering that are there any kind of numbers or anything that you can provide in terms of what sort of help you've got from the new capacity in Q3? Anything of the impact in Q4 and perhaps onwards as well? So any kind of additional numbers or anything on that would be helpful.

Carl, we are not giving numbers on those specifically. As mentioned over the year, and I continue to make sure I mentioned that we started at a very low point early this year. We are nicely ramping this up, and we are, of course, getting quite a bit of help. So Hammond is now contributing in the quarter. Paris will start contributing then next quarter onwards.

The next question comes from Morayo Adesina from Barclays. Can you hear me?

Yes, Morayo here on behalf of Gaurav Jain. Just 2 questions to clarify some things on North America. So you mentioned the seasonality in Q4 that is upcoming. Does that mean that you're then expecting an uptick in volume performance in Q4 in North America versus the volumes that are already improving in Q3? And then I just wanted to touch upon the unfavorable sales mix that you highlighted in the report in North America. Could you just clarify, which of the subsegments are making up this unfavorable sales mix?

Yes. Thanks, Morayo. Yes, happy to answer those 2. Let me start with the first one. Yes. Clearly, for us, Easter, number one, and Thanksgiving, even more so are the very -- the 2 very big seasonalities in North America. Thanksgiving is going to drive retail sales, specifically in North America in Q4 as it does in every year, and we have no reason to believe that it wouldn't in Q4 this year. So we are optimistic on that side. There's no doubt about that. On the mix side, I think it's important to see that retail is our largest segment in North America. And as retail is also a high-margin business. That's, of course, with being the largest with regards to volume and the highest margin with regards to the margin side, it will impact positively the mix in Q4 for our North American business. And the focus on branded products also will help us because also there, we see higher margin. So both of those questions, I think, we can give you some comfort.

Thank you for attending this event. There seem to be no further questions. But as always, we remind you that if you have any follow-up questions, feel free to reach out to the IR team. And with that, we hope you have a great day, and thank you from our side.

Thank you.

Thank you.