Kemira Oyj (KEMIRA) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to Kemira's Q3 2021 Results Webcast. My name is Mikko Pohjala, Kemira's Investor Relations. And here with me today, I have our President and CEO, Jari Rosendal; as well as our CFO, Petri Castren. Earlier today, we published our Q3 report with record revenue. And today, as is our typical case, so we'll go through the results, first, by Jari and Petri the figures and the operative summary, and after that, you will have the chance to ask questions either via the teleconference line or then via the webcast tool. With that, I'll hand over to Jari for the update.

Thank you, Mikko. Good morning on my behalf also. Third quarter was a continuation of a good start to the year. And despite the challenges that we see in the marketplace from raw material availability, high cost and logistics costs. Market demand for our products have been good also to our services and have been improving during Q3, which shows in our revenue growth. Input costs are up strongly, but also sales prices increases are starting to show in the numbers. Added volumes and added sales prices have offset the EUR 100 million added cost from input costs year-to-date. However, capacity utilization is starting to be on a high level in our key product categories. So summary from Q3, record high quarterly revenue, as Mikko mentioned. It's good to point out that historically, Q3 is our strongest quarter in the fiscal year and Q4, Q1 typically much weaker. Strong demand continued, as said, and especially sequentially compared to Q2 and even Q1. Raw material inflation, you can see in the EBITDA percentage that was impacted and mitigation ongoing for the increase of raw materials. The new product lines in the United States for emulsion polymer and deep dry polymer in South Korea are ramping up as we speak. And today, we also announced the payment date of the second installment of our dividend from 2020 paid on November 4, and it's 25 -- EUR 0.29, correction. And our outlook for '21 is unchanged. So here are the main figures for the year -- sorry, for the quarter. Revenue of EUR 693 million, and 16% up year-on-year organically and an all-time record for quarterly revenue. All market segments grew and Oil & Gas recovery was strong, but our core businesses in Pulp & Paper and water treatment grew by 11%. So that was great to see. Operative EBITDA EUR 116 million, with a 16.7% margin. As said, raw material increases continued and is expected to continue also in the coming quarters, especially in Q4. In July, we expected that raw material prices would start to settle in the second half. That didn't happen. So sales price increased. Volume helped us. But further volume growth, especially sequentially, not that easy as utilization rate is high. Then Pulp & Paper. A reasonably good quarter. Board, tissue and pulp demand continued as strong. Printing and writing continues to recover sequentially. Sales price increase is going through, and we've been able to keep the customers running, which is very important for us and obviously for the customers as there are disruptions in the value chain. And we did receive a compensation payment for emission rights and it all was booked in Q3 last year, it was booked half in Q3 and half in Q4. So that helped our Q3 in Pulp & Paper on a group level. Petri will explain that a bit more. As said, for Pulp & Paper, the South Korea polymer investment is ramping up, and we announced in Q3 that we will add ASA sizing capacity to our site in Nanjing, China. That's 1 of our 2 global ASA manufacturing sites. The other one is in Austria. And this is on the back of the increasing demand from -- especially from packaging and board. Pulp & Paper revenue EUR 391 million, with a EUR 64 million of operative EBITDA, including that emission right compensation. A good result from the Pulp & Paper team. Industry & Water did very well and water business for us is very strong. Municipal market is solid, and we saw some growth. Also industrial water market strong, and growth was seen. In Oil & Gas, shale market demand continued to recover, but margins are not on the level we would like them to see. So work needs to be done. Raw materials continue to creep up all the time. I&W organic growth 23%, but when we look at the water treatment side, which is the big portion of it, 11% growth, which is very nice to see. Sales price increase is also ongoing, but they come through with a lag. Revenue EUR 301 million in Q3 with the 17.4% margin, which one can be very happy about and a strong Q3 performance from the I&W team. Then shale -- or sorry, Oil & Gas. And as said, shale continued to recover. Oil & Gas is roughly 10% of our revenue. So it's good to keep in context. WTI for shale was and is over $80 per barrel. Volume is back, as you can see from the EUR 75 million revenue on a quarterly basis, but as I said, prices are not there yet and profitability is not there where we want to see it. And raw material availability, especially North America has eased a bit, but not on the cost side. CEOR market continues solid and we have mostly formula pricing there. And the same formula pricing applies for our oil sands tailings treatment chemistry which goes to Canada. And I'd like to remind that during October, that treatment stops. And in the next winter months, there won't be revenue coming from the tailings treatment part as the waters are frozen. And already discussed at the EPAM line in Mobile, Alabama is ramping up as we speak. And a year ago, we were worried that is it the wrong time of that big investment to come online this time, but actually now that demand is recovering, the timing is quite good. From time to time, I talk about customer satisfaction, and you can see from the graph that that's continued to improve, which is good to see, but also a bit of a surprise because we've been pushing sales prices really strongly and continue to do so. But as we have been keeping customers running and our delivery reliability has been high, we get the appreciation from the customers as they seem to have also good demand in the markets for their products. Our products help to improve customer resource efficiency. In Pulp & Paper, our products are improving, manufacturing process, operativeness, enabling better resource efficiency, improving runability, quality and content of recycled paper. In water, chemical water treatment has been proven that it is the most compact, thinking of the customer plant size and smallest environmental print. Oil & Gas, even if it has sometimes a bad name, we optimized the well performance for the customers or the oil well gas, well performance and we substantially reduced the energy need and water use in that operation. Customers give us their feedback, a good grade for supporting them in their sustainability efforts. Then EU taxonomy is coming and requirements for reporting start early next year. And based on our very preliminary analysis, the first delegate acts of 1 and 2 are not so relevant for Kemira as they are for high emission type of operations, and we are not very high in those emissions and doesn't concern us at this point. Naturally, we keep on working our own emission reduction. Delegates 3 and 6 will be more relevant to us as it's related to water and life in water and these type of activities and more supporting us. So our project is ongoing to analyze these and then the taxonomy reporting will start early next year. As a last summary, gradually returning to new normal after COVID-19, it is taking longer than any of us have expected. Raw material and logistics price pressures are continuing and will continue and getting also quite faster. So it's hard for us to keep up even if we work on sales prices. We ramp up the new capacities of new lines and stay agile to react to any movements in the market conditions. We have the new bleaching capacity under construction in Uruguay, and that's ongoing, and we will start now to build the new ASA line capacity in China. The bio-based drive for new bio-based products in our portfolio is proceeding well, and we have some positive news from test runs with the customers. And we keep our people safe and secure supplies to our customers. High focus on the increased raw material environment. I conclude my presentation here and ask Petri to give more insight on Q3 numbers.

Thank you, Jari. So from my point of view, I always open this up with sort of key points. And I think the key points in the report really are the strong organic volume growth, also our ability to now move the inflationary pressures to sales prices and thirdly, we are making a sort of a forward-making comment that this inflationary pressure -- inflationary environment is expected to continue. But looking at the quarter, so record revenue, as Jari said, almost EUR 100 million reported revenue increase, which for us is quite significant. The 16% organic growth splits to 10% volume growth, one can say somewhat volume recovery from the lows of COVID in 2020 and also 6% year-on-year price increase. But even excluding the Oil & Gas, the organic growth 11%, very strong. So growth, very strong across all our businesses. Looking at the price improvement, EUR 38 million. I think that's quite significant, considering that the same number was EUR 13 million -- actually, I'm sorry, EUR 12 million in Q2. And actually, still in Q1, it was a negative EUR 13 million. So don't want to make a straight line out of this, but obviously, we are now moving in the right direction and have visible sort of proof of the liability to move on these prices to our customers, in a way, indication of our pricing power. Although as you can see from the following slide, this comes with a lag. Also year-on-year, particularly when the change has been as dramatic is sort of masking the story, we're also following it on consecutive quarters. And this, we don't report out. But Q3 over Q2, we had roughly 3% price increase, roughly EUR 20 million impact on a quarter. So we'll -- that's sort of a demonstration of some of the activities. Still, raw material inflation continued at higher rates, which resulted in the margin depression. In the last 2 quarters, the year-on-year increase has been actually over EUR 100 million. Actually, throughout the year, it has been EUR 100 million increase. And this has now accelerated in Q3. So it makes quite remarkable trends if you sort of look at the last few quarters. And as Jari said, variable costs include this onetime specific item, EUR 7 million. So this is the compensation -- or emission rights compensation here in Finland, EUR 7 million, which was all received and accrued in Q3 of this year. Whereas last year, this was received in Q3 and Q4 and at a smaller rate. And why this way? This is a site specific, so all of our manufacturing sites, which are eligible in Finland did receive a positive decision in Q3 of this year. And I think it's good to note here that this compensation scheme is actually ending after this year. So we won't see this same number in '22. Currency, another big issue at [ 1.16 ] euro-dollar which is the biggest impact for us, and that comes from translation. And so therefore, a smaller impact as you -- compared to what you have seen in previous quarters. This -- actually, you can compare the increase in raw material costs to the time of 2010 and 2011 after the financial crisis. And similarly, as then, as you can see from the chart on the sort of the early years 2010, 2011, we also had quite significant sales price increase following the cost curve. But due to the magnitude of the curve increase that we are seeing now the net impact was EUR 24 million negative for the quarter, which again is visible here on the right. And as Jari mentioned, after Q2, we were hopeful that we would have been seeing the peak of the raw material pressure during summer months. But indeed, that's not the case, and we see the continuing inflationary pressures for Q4 and the coming quarters. Both of these trends are expected to continue, meaning the inflationary pressures as well as our ability to put these prices to our customers. This is really a high priority for us at this time. And as Jari mentioned, Q-on-Q or quarter-on-quarter, we're now, in most of our product lines, very close to capacity. So following volume increases will not be easy. So as this year, a lot of the inflationary pressure was compensated by volume increase, next year, that will be somewhat more challenging. And as a reminder, Q4, Q1 will be seasonally lower months. Cash flow. Last time I spoke to a bit more about the net working capital and how it impacts our cash flow. And the simple truth is that growth consumes net working capital. And as our inventories and receivables offset or the impact more than the offsetting payable increase. What I -- as a CFO, I'm still happy that our inventory rotation is actually faster than it was last year, and our receivables rotation is very stable at around 45 days and has remained there constantly and it's a good quality and relatively short rotation period for receivables. Also reminding that during Q3, we paid out the CDC settlement payment, EUR 22 million, and this was accrued already in Q2 and announced in around that time. For CapEx, we are making a slight adjustment. So up to now, we have been guiding towards roughly EUR 200 million of CapEx. Now we believe that because of some delays and slowness in some of our projects, we will be falling slightly below EUR 200 million CapEx for the year. Capital efficiency remained at a good level. So 12% is sort of a level where we have been saying it's good and in terms of return on capital efficiency. And really balance sheet, nothing really to report out, no new financings during the quarter. This time, we decided to bring this chart on our electricity and energy costs because of the global sudden and rapid increase in electricity costs across the board. And as you can see, energy and electricity represent about 10% of our costs, about EUR 170 million. And from the middle, you see how it splits. So almost 40% is Finland and 30% in U.S., where we have the biggest chlorate plants, which are electricity consumers; and then third, 30% is rest, meaning South America, Asia and Europe, of course, rest of Europe. And we are relatively well protected. So in Europe, about 2/3 of our electricity costs, it comes either at cost or is it at hedge. And elsewhere, we also have. So in Finland, we do get this electricity at cost from our ownership in Pohjolan Voima, PVO and Teollisuuden Voima, TVO and that's sort of the Mangala concept where we get the electricity at cost. And obviously, that helps now. In U.S., we don't -- I'm sorry, and also the additional point is that the -- some of the open part, which we don't get at cost is then hedged in with [ Pohjolan ] A bit longer-term electricity forwards. In U.S., there is no effective hedging market as far as we know. But the customer contracts are formula-based. So here, the electricity costs are passed on to the customers whether they go down or up. However, this comes with a lag. And then in South America, where most of the electricity and energy is consumed in the chemical islands, we actually have a fixed price, very symbiotic relationship with the pulp mills where we get the electricity. So we don't have an open position there for electricity cost. But nevertheless, roughly 30%, 40% of our electricity costs is sort of an open position and rest of it is either hedged or at fixed term. The electricity price increase also had a consequence that we evaluated our TVO and PVO ownerships, the value of the assets in our balance sheet, and that resulted in an increase of EUR 32 million. But this goes directly to balance sheet, other comprehensive income and tax accounts, so it does not have any P&L impact. Outlook unchanged. And again, assumptions for the Q4 are similar than the whole year. So COVID-19 continues to cause some uncertainty, but still markets are expected to remain strong throughout '21. Inflationary pressures and supply chain challenges are expected to continue. And again, this seems to be pretty much a mainstream view regardless of the industry you are talking about or following and certainly seems to be with us through '21. And regarding '22 assumptions, we will revert back when we report our Q2 results and full year results in February. With that, I'll conclude my remarks and we're now ready to move to Q&A. Operator, please.

[Operator Instructions] Our first question comes from the line of Martin Roediger from Kepler Cheuvreux.

I have 3 questions and all are on pricing. You say you have raised selling prices by 6%, obviously, in acceleration versus Q2. And I recall the massive price hike announcements in recent months. Would you say that the structure of contract duration has changed compared to 1 year ago, so enabling you to implement the price hikes quicker than it would have been a year ago? The second question is on the 6% price hike split for the 2 segments. Did both segments equally benefit from the 6% price hike or was one segment more in favor? I assume Oil & Gas benefited the most from pricing and thus industry water. Is that correct? And then thirdly, going forward, I understand that the price hikes will further accelerate in Q4. So would you say that the industry water would benefit even more? Or is there a change within the split of the price hikes for the segment?

Okay. If I'll start, so broadly, the contract sort of structure with the customers is very similar than a year or 2 years ago. But there are some mutually agreed sort of checkpoints within the volume contracts that we can quarterly also check the prices on the back of the input costs, whether they go up or down, the pressure has now been clearly up lately. But broadly, we're in the same situation, and attempting to make it faster with the customers so that we don't have the 1-year contract lag time to negotiate the next time. More successful on that in the Pulp & Paper side. The municipal side, that tends to be quite frigid on the annual contracts. And Oil & Gas is more open. But good to remember that we are not satisfied with the Oil & Gas business profitability yet. Then the split between the segments, I would say, sort of equal in a sense. Their volumes and revenues are a bit different, too, so with that weight probably. But as a trend, our Pulp & Paper segment is slower to react and to gain from those then and our I&W segment historically and even now has been which you can see in the margin difference, especially if you take the EUR 7 million away from the Pulp & Paper Q3 result or half of it compared to last year. And going forward, I think we push hard. It's not easy. Our customers obviously feel the pain as well as we do on the input costs. Luckily, demand is quite good. But I'd like to remind that Q1 typically, from a demand point of view, is slower. We won't have the oil sands, tailings, winter coming reduces water treatment needs and seasonality. Also, Oil & Gas tends to historically slow down in the shale business during Q4 and Q1 to be see how it is. So we're a bit nervous on how then this is going to go as raw materials and transportation costs continue to go up, not flattening out.

Martin, if I just want to make sure that I heard you correctly when you said the numbers, the 6% increase that we report is year-on-year in comparison. So that's over Q3 of last year. And then I volunteered the roughly 3% increase quarter-on-quarter, so Q3 over Q2, which we don't typically report out.

The one thing that Petri mentioned in his talk was also something that you need to know that our capacity utilization is good and high but means that sequentially, we won't have the volume benefit anymore. So it's more weight to the pricing side and less from the volumes, which we have clearly recognized.

And the next question comes from the line of Anssi Kiviniemi from SEB.

It's Anssi Kiviniemi from SEB. Perhaps the pricing situation has already dealt with the previous questions. But perhaps 1 question on variable costs and energy cost. I mean, when we went from Q2 to Q3, we saw a big increase in year-over-year cost pressure in variable costs, especially. Could you elaborate a bit on what's the impact of energy, is there any? And when we go forward, you explained quite nicely on your energy platform and how is it split and how it functions. But could you indicate anything on 2022 cost pressure from energy. How should we look at that? Is it EUR 10 million issue, EUR 20 million issue or something like that? Or is it nonexistent?

If I try to do that, I don't have a stock answer to that, but I would say the impact is -- I can't say that the impact is -- doesn't exist because we certainly saw electricity costs increasing in North America. And as I explained, the model is such that we sort of take the preceding 3 months of average electricity cost and then that becomes the formula price for the following 3 months. So certainly, we saw some single million -- perhaps low single million impact already in -- just in North America alone from electricity. And then obviously, we are a consumer of natural gas and in some places for our asset utility in some of our plants. So I'll guide you that the net impact was single millions in -- as a part of that variable cost equation, but I don't have a stock precise answer.

Maybe adding to that, that's the variable cost side, but then comes the customer demand side that they are also a big user of electricity, and they are big users of natural gas. And how that will then, from an availability point of view and then a cost point of view, to start to impact them. And we know some paper mills that use natural gas for the drying part of the paper machine are worried and considering what to do next if gas prices and availabilities stay on this level.

And any indication in 2022, how should we look at that?

Well, as Petri mentioned, we don't talk about '22 yet. And we'll tell you more in February when we announce the full year results. But as we said, the inflationary pressures will continue the next quarters to come. So that's how much we're opening up.

Okay. Then my housekeeping question. On the operative delta bridge, there was others line, plus EUR 5.5 million. What was included there?

Yes, that's sort of a accounting speak or CFO speak, that's a variance. But that's -- so which cannot be allocated to either price or volume. But mainly, it is higher capacity utilization. So the negative variances are smaller than they were last year. So simply put, higher utilization rate.

Maybe we could take 1 question here between from the webcast since this is related to the variable cost theme. So Antti Koskivuori from Danske is asking, how do you see variable costs to develop in Q4? So do we expect costs to increase sequentially?

Well, I think we've kind of given a few hints that it's likely to increase in Q4 over Q3. So...

Yes. So not easing up and seeing it increase sequentially, unfortunately.

Unfortunately.

Then we turn back to the operator.

And the next audio question comes from the line of Robin Santavirta from Carnegie.

Now firstly, looking at your delivery and performance in Q3, it's very good. And the question I have is related to availability of raw materials, any supply chain disruptions you might have and then related to production, for example, in China. Is all of that sort of running as normal in Q3? And is the outlook sort of for Q4 also normal? So it to be hurt more coming from higher cost than from potential disruptions of production, supply chain or similar issues?

Maybe to conclude that not a lot of things are normal this year, but still doing fairly well. Mitigating those materials are going up. Transportation, we talk about the cost, but it's also double or even more longer delivery times for long-term shipments and availability of truck drivers like every industry seems to have. So it's impacting us also. So delays in some deliveries might delay the time from point of purchase order to us delivering and invoicing, so that we are seeing. So time lag is something to take into account. China also curbing electricity and gas supply. So that has meant that some customers are also curbing their production because of lack of energy. And then there are various things. And let's remember that in January, Olympics are coming. So how will that, in China, affect the industry and is the government somehow then curtailing production there. We haven't seen anything yet operationally. We did quite well in Q3 from the planned operation side. Transportation, we could say it's under control, but it's a nightmare. And I don't have to talk about Brexit and the drivers in U.K.

All right. And then a question related to the sales price increases. Obviously, you're in the same kind of situation as a lot of other companies today. Now say, price increases will be quite significant, could this impact than demand? Is that something that you're worrying about if the higher sales prices, which probably will be quite significant when we start '22 could impact demand?

Well, that would be a natural reaction from the markets, depending on the whole value chain on how it works. But that's something that we need to consider and be worried about that also at some point, like I was discussing energy cost in Europe, some are considering whether to take a time out and not pay these prices. So assuming that something will happen, but hard to quantify so far.

I understand. And then finally, just for Petri. I think I missed the emission rights sales, the P&L impact in Q3, what was it? And what was it compared to last year's Q3?

So this was not an emission rights sale, but this was a compensation, it's the compensation scheme here in Finland, where we received EUR 7 million in Q3 of this year. Last year, we received about EUR 5 million, and that was split between Q3 and Q4, almost equally, so roughly EUR 2.5 million, EUR 3 million each quarter in 2020. And so there was a good favorable 3, 4 -- EUR 4 million, EUR 5 million favorable comparison in Q3 versus last year, and then also implies that there will be a negative favorable comparison in Q4 when we don't get that in Q4 of this year. And if you didn't hear, I also made a reminder that this compensation scheme is ending in Finland. So this will -- we will not get this similar number or similar compensation next year. The Finnish government is still thinking about how they want to sort of support electrification of industries. But the -- as the rules and the guidelines are not yet published, we don't know whether this will have impact. And if yes, to what extent?

And the next question comes from the line of [ Esko Sanias ] from Berenberg Bank.

Congratulations on the results of the quarter. My question is about utilization levels in the Industry & Water division, particularly regarding the Oil & Gas plants. How do you feel about your efficiency levels there? How much capacity will be available in the next quarters and the outlook in terms of utilization and efficiency?

As said, across the board, utilization is high. And then we do have these 2 lines coming online as we speak. So the EPAM line in North America, still at, say, 60%, 65% utilization rate and our South Korean dry polymer site exceeding 50%. So there's a bit more, but compared to the EUR 2.6 billion of revenue, it's not a big increment. So utilization rate high, and that's why we implied that volume help won't be there so much in the future.

And operator, if I may continue here, related to the new investments. So a question from Petri Gostowski from Inderes. So could you somehow comment on the expected operative EBITDA impact from the new ramp-ups in Q4 and going into early 2022?

The ramp-up impact in P&L in Q4, not material at all, not material at all. And particularly, the EPAM plant in the U.S., which is ramping up, its producing volumes. But as Jari was saying, even the margins are below -- as we're filling up the plant also, the margins are not at the level where we would like them to be. So this year impact is not much. Next year, hopefully more.

Good. And then we hand back to the operator if there are further questions on the line.

We have 1 more audio question from Harri Taittonen from Nordea.

Well, on the pricing, I think there was in a way like 2 waves of price increases. First was around Christmas last year, and then there was another wave sort of midyear based on your announcement. I mean, how have those gone? Is the first one pretty much in place and sort of if you can kind of just describe a little bit on how the pricing is moving against those sort of initiatives that you have made?

Right. So we have announced in different regions at different times, but you're right and as we said in the summer, we thought that it will ease off, it didn't. So we needed to start another set of announcements. The announcement timing is one thing. Then it's contract by contract by contract negotiating customer by customer. So that's pretty steady. Obviously, summertime is a bit slower and then Christmas time a bit slower, but it tends to be sort of second half of this year and early part of next year that are those times. So -- and you can see from the numbers that Petri explained that it's been speeding up, not as fast as I would like to see it as volumes are fading away, but at least to the right direction.

Okay. Okay. On the key sort of raw material components, is there sort of a -- how far can you see the cost level in the main kind of items? I know that, of course, some of the things are moving quite quickly [indiscernible] derivatives but all that. But if you think of the sort of the main, you have listed them in your presentation. Is there sort of some areas where you already know the cost quite far out? Or is it sort of a -- what's the visibility?

A good question, but I don't think I can give you a very precise answer. In some areas, we do have annual contracts. And we already know that the annual contract, for example, some of our coagulant, we haven't talked about coagulant here much, that those are increasing and those increases are coming. And they are sort of long-term fixed-price contracts, and we know that this will be hitting and with a fair amount of certainty. But really on some of the other feedstocks, it is really difficult to say. And -- so the longer you try to forecast, the more hazy the visibility is. Unfortunately, this is that way. And besides, it's not only the feedstock, actually, the feedstock price is sort of a relatively smallish part of that, but we have simply an on-demand between supply and demand, and there have been some sort of disruptions. It took a long time for the industry to recover from the storms of -- winter storms in Texas last winter and some of the hurricanes. So those are all disturbing the supply-demand balance, which may actually have a bigger impact on the, for example, acrylonitrile cost or something like that, which we buy. And that -- and therefore, the link, the feedstock is not very good. And that's another reason why, for example, we cannot hedge these prices. We've been looking at whether we could be hedging because the feedstocks are traded and you could hedge those. But the link is not strong enough that we could do that.

Also, the market is not working yet recovery from these disruptions. So the arbitrage between regions can be quite big, and that's because of the ports not working well and maritime not working as well as historically. So you can see huge sort of feedstock and raw material price differences between regions and really fast developments.

Right, right, right. Okay. Maybe sort of 1 last question, if I may, on the sales business. I mean, you talked about the consolidation that is in the market on the demand side has continued in 5 years massively. And I'm just wondering now if the sort of volumes are recovering and the -- well, not at all, but still recovering well, but you are still not happy with the margins and prices. Has it got to do with the market structure? Or is it more to do with that you're basically filling up the plant, and that's the main reason why you are seeing the lower margins?

Input costs have continued to go up. So when we increase prices and input costs continue to come up. So we're sort of in competition with keeping up or trying to get ahead. Second, when the market started to recover, there was a lot of capacity in the marketplace. So it's not like there's scarcity of product yet. It's getting to a more balanced situation. So not so much from the market structure and that point of view. And Petri has been talking about the receivables, so we have had no issues there at all. So it gives that it's a solid thing, but it's just the recovery that is happening, 83% year-on-year, so that gives you the number.

And as there are no further audio questions, I'll hand it back to the speakers.

No further question from the webcast too either, so this concludes our call today. If there are any further questions after this, so please reach out to me. But with this, we thank you for participating, and wish you a nice day ahead. Thank you.

Thank you.

All right. Thank you.