Rockwool A/S (ROCKB) Earnings Call Transcript & Summary

Dear shareholders, good afternoon, and welcome to the ordinary AGM of ROCKWOOL 2021. I wish we could all be here in the flesh, but due to the circumstances, that is still not possible, we still follow the guidelines issued by the Danish authorities to take care of personal safety, and we look forward to your backing and support. I dearly hope that next year, we can be together again in an ordinary physical meeting. In pursuance of Article 7A of the Articles of Association, we have decided to appoint Attorney at law Niels Heering as Chairman of our meeting. I hand over to the Chairman of the meeting.

Thank you very much for appointing me Chairman of the meeting. This meeting is sent directly through a webcast on the website of ROCKWOOL. It will be recorded, and it will, therefore, be available on the website after the meeting. First of all, I'd like to find out about the legality of the convening of the meeting and whether it is quorate. The convening notice was published on the company's website and on NASDAQ Copenhagen on the 11th of March. On that same date, it was sent to all shareholders having requested such a notice to be sent to them. The mode of convening the meeting prescribed in the Articles Association have thus been complied with. And it contained all the information that is required under the Danish Companies Act and the Articles of Association and all the information about the meeting since the convening was announced have been made available on the company's website. Then there is a question of whether we are quorate with regard to the business to be transacted. So let's have a look at the agenda. It is now on the slide. First, we will have the report from the Board of Directors on the company's activities during the past financial year; two, presentation of annual report with audit's report; three, adoption of the annual report for the past financial year and discharge of liability for management and Board of Directors; four, presentation of an advisory vote on the remuneration report; five, approval of the remuneration paid to the Board of Directors for 2021, '22; six, allocation of profits according to the approved accounts; seven is election of members to the Board; eight, appointment of auditors; under 9, we have a number of proposals from the Board of Directors and shareholders. From the Board of Directors, we have 3 proposals. We'll get back to them when we reach that item on the agenda, and that also applies to the 2 proposals we have from shareholders. We'll get back to them later. The agenda contains all the items that must be contained in an agenda at an AGM according to the articles, and then we have the proposals. When we look at 9B and 9C, to be adopted, the proposals here require the presence of minimum 40% of all voting rights in the company that is in order for us to be quorate and the support of minimum 2/3 of both the votes cast and the share capital represented at the AGM. And I can inform you that today, although we are not an awful lot of people present physically, 89.7% of the total voting rights are represented here, and 72.45% of the total -- percent of the total capital is represented one way or another. So the requirement with regard to being quorate has been met. All other proposals only require a simple majority, and the vote under Item 4, the remuneration report, is only advisory. So I find that the AGM has been legally and lawfully convened and is quorate with regard to all the business on the agenda, so let's move on to the items for practical reasons and because they are interconnected. And since we have no one physically present in the room apart from a small group, we will deal with items 1 to 6 in one go so that we have the Board of Directors' report and the annual report in one go. So Mr. Kähler, the Chairman of the Board will deal with this, and then it will be possible to put questions. But since we have no specifical presence apart from us 3, we will do this in a slightly different manner from usual. I will then present other proposals under Items 4 to 6 until we go to the formal approval. So I will now hand over to the Chairman of the Board, Thomas Kähler.

Thank you very much. Dear shareholders, it is hard to believe, but it was just 3 weeks before our last general meeting that the WHO declared that the COVID-19 outbreak was a global pandemic. At that time, markets were falling, and the global health crisis had become an economic crisis, nationwide lockdowns, shutdowns to some sectors of the economy, rising unemployment, billions of corona in government relief packages, where that became the new normal. There was considerable uncertainty regarding market development. But we have shown strength and resilience in our company. I'm proud of the way management and employees have handled the crisis. ROCKWOOL's employees turned their homes into offices, schools and child care centers. They quickly adapted to new online tools and ways of working and also to inconvenient, but important, new habits for keeping each other safe, all while continuing to do their job. We achieved the highest ever customer satisfaction score in 2020, and that shows us that despite the new ways of working, we did succeed in servicing customers skillfully and efficiently. Society is gradually coming back from this health crisis and economic crisis, but the global community has not solved the biggest crisis, the climate change crisis. Fortunately, our company is in a fortunate position. We can help with that challenge via building renovations at more energy-efficient facilities. The pandemic has obliged us to look critically at the space as we work, live and learn and recover. And we need homes, offices, schools, hospitals that are fire safe and energy efficient. And obviously, hopefully, they should be made from sustainable materials. That's far from being the case today, but renovation can make it possible. Renovation also creates local jobs. It makes urban spaces more attractive to residents and workers and cuts energy consumption and emissions. And we know buildings, that's one of the biggest sources of emissions. We develop products that make a positive impact on people's lives. We call it, We Enrich Modern Living. We really mean that. We have considerable opportunities. We can help solve these challenges in the short and long term. Our products contribute positively towards saving energy and reducing global emissions, but obviously, we also focus a lot on decarbonizing our own processes. I'll come back to that in a minute. Despite the global pandemic, we have delivered good results in the year under review. We focused on safety. We adjusted capacity and operations to specific market conditions, and we strengthened our work in online sales, service tools and options for customers. Despite some virus-related delays, we continued our investments in new capacity and green melting technology. Our ongoing factory project in the U.S. is expected to start operations later this year. Successful pilots for electric melting technology in Moss in Norway started in December last year, and the expansion of our factory in Neuburg in Germany was completed in June last year. We also made 2 minor acquisitions, a Swedish company that makes acoustic ceilings. They're now part of ROCKWOOL, and we've acquired Singapore company based there and specializing in fire protection and insulation. Jessica Jonasson became a new Senior Vice President for Human Resources last year and the first of May this year, and Anders Espe Kristensen will become our Senior Vice President for the Systems division. So these are 2 new faces. At the end of 2020, we announced our new ambitious decarbonization targets and committed ourselves to the science-based target initiatives. These targets commit ROCKWOOL to reduce the life cycle greenhouse gas emissions by 1/3 by 2034. The target also includes a reduction of absolute emissions, so we must reach considerable carbon reductions per tonne of oil produced in order to take into account the emissions that we have resulted from our expected growth in the period. Such targets are really challenging for an energy-intensive company such as ours, and it requires considerable efforts to reach them. But it is important as it can be a broadened commitment. We must have a platform where we can show the way for decarbonization and sustainable growth. Our partnership with SailGP started very well before the pandemic knocked it off course. But again, we adapt and we established a new initiative, Team ROCKWOOL Racing so that the athletes in SailGP team, these athletes, they continue training, and we strengthened our cooperation. SailGP is an exciting sport. We can use it to create more awareness of our brand and our sustainable story. We are proud to be a sponsor -- proud sponsor of the Danish SailGP team. And in Bermuda later this month, the 2021 season will start and the rate will actually come to Argus Denmark in August this year. Now okay, let's have a look at our sustainability results. We published our sustainability report on the 18th of March of 2020. It gives a comprehensive overview of the impact of our company and our products and society and what we do to increase positive benefits while reducing the environmental impact from operations to ensure data quality. Our sustainability goal performance was externally verified for the first time in 2020. The big news story in this year sustainability report is our global decarbonization commitment. I mentioned that before. We're one of the few energy-attentive manufacturing companies whose decarbonization targets have been verified and approved by science-based target initiative, the SBTi. We chose to cooperate with SBTi because we believe it's important to have an independent verification tool and system to ensure our goals are science-based and help achieve the goals of the Paris agreement. It's also important to ensure that the public can have confidence in our goals. SBTi allows us and others to hold us accountable because there is a scientific base to decarbonization there. SBTi is a well-respected collaboration partner between CDP, formally known as Decarbon Disclosure Project, the World Resource Institute, The World Wildlife Fund and the Worldwide Fund for Nature as a School and the United Nations Global Compact. The sustainability report also has many inspiring examples of how products make a difference in people's lives in the communities where they live. It's a great reminder of the many applications and benefits we have discovered over the years through constant research and development of our core material, stone wool. We made good progress towards our sustainability goals in 2020. It strengthened the sustainability of our business by meeting or exceeding 2 of the 6 interim goals 2 years ahead of schedule. These 2 goals are the reduction of production waste go into landfill by 40%. We reached 50%, and improvement of water efficiency at our factories by 10%. We reached those 2 ahead of time. We also made good progress on 2 of the remaining 4. We had fewer lost time incidents in 2020 than in '19, but we did not quite reach the goal for the LTI rates. That's incidents based on the number of hours worked. But again, the safety of our colleagues and others working at our locations, at our sites, that's always our highest priority. True cost that is part of Standard & Poor's Global for the second time around classified all of our products as STT positive, so they contribute positively towards achieving the UN sustainable development goals. Furthermore, we expect that we estimate that 95% of the revenue from our insulation business is taxonomy-eligible in the EU climate mitigation category, so we do contribute to sustainable development in Europe, and we support our positive impact on the environment. So it strengthens our position among customers that really focus on ESG, and we help contribute towards a more sustainable society. Before I move on to our financial results, I'd like to comment on a couple of other points. Technological innovation is going to be all important if we are to reach out decarbonization goal. We achieved 2 important marks in 2020 specifically regarding our core melting technology. Based on our 2 Danish factories, we converted the largest melting ovens. We started using natural gas instead of coal. And that was possible because of many years research and development and innovation by our engineers and our production teams. With the purchase of certified climate-neutral biogas from the result of this year, we've reduced our CO2 emissions in Denmark by more than 70% compared with 1990. Our work for innovative technology won an award last month. The Danish Society of Engineers gave us that, the 2020 European Business Award for the Environment. And we can be -- we can take pride in that. We're also proud that we are now using our first large scale electric melter in Moss in Norway. It's the biggest in the industry. This electric melter reduces CO2 emissions from Moss by 80% compared with the previous technology. The electric melter also makes it possible to melt greater amounts of recycled material so that the amount of waste going to a landfill is reduced by 99%. With this new technology, we can also recycle a significant amount of materials we receive back from the market. Earlier this year, we received a separate business award in Norway, the Technological Innovation. We've carried out and the electric melt contribution to environmental protection and reducing CO2 emission. So we hope to use that experience elsewhere also in our global operations in the years to come. After a sharp pullback in the second quarter of 2020, construction activities recovered in most markets in the second half of the year as countries emerge from lockdowns and governments focused on these relief packages. Many European countries understood that deep energy renovation of existing buildings, that is an effective and efficient recovery vehicle that creates jobs to simulate spending and also contributes towards long-term climate of the sale of insulation materials for building renovations recovered faster than sales for new construction. This was particularly clear in Southern Europe, where the market dropped significantly in the second quarter but also bounced back quickly in the second half of the year. Constant pressure from legislators and consumers strengthened our demand for noncombustible building materials in the U.K. Right then. Let me move on to our financial results in the year under review. Despite the COVID pandemic, we had a satisfactory result. Our net sales fell by 3.7% local currencies. The EBIT margin was 13%. That was down 0.5% from last year. And our profit was EUR 251 million. That was a 12% decline from the year before. Sales in the Insulation segment declined overall, mainly in the markets where there were these shutdowns because of the COVID pandemic. Sales were better in markets where construction stayed alive and was considered an important part of the recovery. The Systems segment saw a increase in sales in 2020, primarily driven by a grow down and a good second half year for Rock Phone and Rock panel in Europe. The return on invested capital was 17.6% compared to 21.7% in 2019 as a result of higher investments and lower profit. At the end of the year, the group had a net cash positive position of EUR 95 million and unused committed credit facilities of EUR 630 million. On behalf of the Board of Directors, I want to thank our CEO, Jens Birgersson, the group management and our 11,500 dedicated employees for the results you have all contributed to achieving in a uniquely challenging year. You've done extremely well, a sterling effort. Thank you very much. Now let's take a look in more detail at the different business areas and geographic regions. Globally, net sales were EUR 2.6 billion, a decline of 3.7% in local currencies. Foreign exchange rate had a negative impact on our revenue, 1.9% because of the U.S. and Canadian dollars and the Russian ruble, resulting in a sales decrease of 5.6% in reported figures in 2020. Regionally, sales in Western Europe declined by 4.8% in local currencies even if the Nordic markets and the Netherlands showed good growth. Sales in Eastern Europe were down 2.1% in local currencies, but especially in Hungary, Romania and Russia, they bounced back from the decline in the pandemic and delivered a full year sale at the level or higher than 2019. Rest of the World sales declined by 1.9% in local currency. Sales in Asia affected by pandemic slowdowns and building activity, while in North America, Insulation sales were overall flat. In technical insulation, there was a slowdown in the oil industry, particularly in the U.S. and in Asia. Sales in the Insulation segment was EUR 1.9 billion, a decline of 5.8% in local currencies and 7.8% in reported currencies. That was mainly the reduction in Central Europe and in technical insulation. Building insulation in North America ended 2020 with good growth despite the pandemic. The systems segment amounted to EUR 688 million, an increase of 2.7% in local currencies, including 2.4% from the acquisition of Para Phone and 1.3% in reported figures. This growth was driven primarily by growth and a good second half year of the year for Rockfon and Rock Panel in Europe. The Insulation segment in 2020 accounted for 74% of group sales. The Systems segment was then 26%. In 2019, the split was 75:25. Compared to the outlook, the guidance we had in the annual report 2019, obviously, the COVID-19 pandemic disrupted sales growth and market dynamics, especially in the second quarter, but sales then recovered partially in the second half of the year. The group EBIT was EUR 338 million in 2020, a 9% decrease from 2019. The EBIT margin was 13%. That's a decrease of 0.5 percentage points compared to 2019. Operational cost savings combined with lower raw material prices led to an EBIT increase of 9% in local currencies in the second half of the year. The EBITDA margin full year to 13% was actually at the upper end of the latest guidance we've given because of good sales in December. Operational efficiency improved throughout the year as we continue to prioritize cost savings. This led to a focus on driving efficiency while still investing in new competencies in digitalization and growth initiatives, and that helped deliver improved profitability for the group as a whole. Adjusted for the -- there was a legal settlement to the North American Rockfon case in '19, but suggesting for that, the EBIT margin for 2020 was only 0.2% below the record year 2019, and that was mainly because of the negative currency impact. If you look at profitability per segment, The EBIT in the Insulation business reached EUR 236 million, with an EBIT margin of 10.7%. That was 0.6 percentage points down from '19. Operational efficiency at the factories could not fully compensate the start-up costs at the German factory and then the electric melter project costs in Norway combined with the overall lower capacity utilization because of these sales decrease. In the Systems segment, the EBIT was EUR 102 million with an EBIT margin of 14.8%, down 0.3 percentage points to -- compared to '19. Adjusting for the positive impact from, again, this legal settlement involving Rockfon in 2019, the EBIT margin increased 1.1 percentage points, and both businesses contributed positively. Now due to the increased uncertainty because of the COVID pandemic because we wanted adequate funding, ROCKWOOL decided to draw down EUR 150 million. This allowed the group to maintain its investment program, pay out dividend to the shareholders and carry out the share buyback program that had been adopted. As an extra security measure, an agreement will also reach to extend the guarantee credit facilities by a further EUR 200 million. At the end of 2020, the group had a net positive cash position of EUR 95 million, down EUR 117 million from EUR 19 million. In addition, the group had unused credit facilities worth EUR 630 million. Cash flows from operating activities were EUR 438 million, up from EUR 402 million in '19. And this indicates a stable inflow of cash from operations. Free cash flow flows were EUR 76 million, an increase of EUR 74 million compared to '19, primarily due to lower investments and lower working capital. The investments in the year under review were EUR 362 million. This was a decrease of EUR 38 million compared to '19, but that's in line with the most recent guidance we gave. Compared to our expectations we announced in February 2020 some investment expenditure relating to ongoing factory projects in the U.S. and Norway and the relocation project in China, they were postponed from '20 to '21 because of COVID-related delays. The largest individual investments in 2020 related to the factory projects in the U.S., Norway and Germany. In December 2020, as planned, we received EUR 1 million extra grant from Chinese authorities in connection with the relocation of all our factories in China. So the total grants received now amount to EUR 19 million. In February 2020, ROCKWOOL acquired Parafon acoustics ceiling. It's a Swedish ceiling tile factory, and its Nordic sales organization that are not part of ROCKWOOL in our Systems segment. September 2020, ROCKWOOL acquired the assets of Best of Fire and Thermal Limited. The Singapore business specializes in supplying fire protection and thermal insulation in the marine sector and the building sector in Singapore. They are now part of our Insulation segment. The consideration for both businesses was EUR 19 million in total. Both ROCKWOOL share classes share categories saw increase. The ROCKWOOL A share was up 44% and the B share, 45% up compared with a decline of 4% in the Benchmark Index Stocks Euro 600 Construction and Materials and an increase of 34% in the NASDAQ OMX C25 Index in 2020. In line with our policy to pay out a stable dividend, at least 1/3 of the net profit after tax, we are pleased to propose a payment of a dividend of DKK 32 per share for the 2020 financial year. There'll be a formal [ letter ], of course, later this afternoon. On the 6th of February 2020, ROCKWOOL started its first share buyback program up to EUR 80 million, completed as planned 12 months later. In 2020, a total of 345,584 shares were bought back. The transaction value was about EUR 77 million. The ROCKWOOL Foundation participated proportionally at their ownership. As part of this Annual General Meeting, the Board of Directors proposes that shares purchased under this program will be canceled. Now if we take a look at the rest of 2021. COVID-19 and its variants will continue to be the primary challenge for global health and for a stable economic recovery. It's still too early to say about the anticipated -- acceleration of global vaccinations is encouraging, and we must expect that it will have a positive effect on overall economic activity. So we do expect construction size to remain open even if we were to see increasing infections because more and more governments understand there are many governments that have recognized them -- the governments have recognized the economic climate and health benefits of building renovation. So there's focus on that. Let's focus on noncombustible recyclable building materials, and that will have positive influence on our market, particularly in the medium to long-term effect. It will be a medium to long-term effect on our market. We are financially strong. Our core material has grown a number of applications and increasing relevance for society and the challenges it faces. We continue to invest in R&D and technology to improve our products and services so our business can be more sustainable, so we can best -- as best as possible, meet customer needs and meet also society's expectations of us as a credible green company. In accordance with relevant legislative requirements, ROCKWOOL published this remuneration report for 2020 in connection with the annual report earlier this year, and there's going to be an advisory vote here at the AGM on the remuneration report. It has an overview of the remuneration allocated to ROCKWOOL's Board of Directors and executive management. The remuneration for the Board of Directors was EUR 728,000; executive management, that was EUR 3.26 million. The remuneration is in accordance with our remuneration policy that was approved at the general meeting last year. The remuneration can be seen from the presentation given. And there is more information in the remuneration report that you can find on the company's website. On behalf of the Board of Directors, let me conclude by thanking the corporate management and executive management team and all the employees for the hard work and outstanding results in a uniquely challenging year. Job well done, I must say. I also want to thank you, our loyal shareholders, for your continued support and investment in the ROCKWOOL Group. Thank you very much.

So we've heard the report from the Board of Directors, and we have received 2 written interventions. One is from Klaus Jorgen Sorensen, and I'm going to read it out because the shareholder is not present, as recommended. So I'm quoting here. My name is Klaus Jorgen Sorensen. I represent the Danish Association of Shareholders. Danish Association of Shareholders safeguards the interest of small and medium-sized shareholders. We work to develop a healthy share culture in Denmark. The Danish Association of Shareholders participates every year in a number of AGMs in Denmark to give information about our associations, hallmarks and what we find important for shareholders. This year, we are focusing on good investor guidance in the time of COVID. We are focused on succession planning and on whistleblower schemes, and I'll come back to that. Thank you to the Board of Management for the annual report and the review. The annual report is very thorough. It's about 120 pages. It covers an excellent summary and an excellent ESG report and an excellent corporate governance report. The negative impact on the financial statements here because of COVID, so a decline of 12% compared with '19. But it's positive to see the customer satisfaction is growing again. This is the sixth year in a row. The dividend, you are not changing that. You are proposing a DKK 32 per share. It's about 1/3 of the net profit after tax. And compared with the share buyback of EUR 77 million combined with that necessarily satisfactory. The Danish Association of Shareholders is pleased about the development in the price for the share. ROCKWOOL's B share increased by 45%, the A share 44%, much better than the OMX C25 with an increase of 34% and a decline of 4% in index stocks, Euro 600 construction and materials. Now expectations concerning 2021 are subdued because of the impact of COVID-19, and you expect increased cost of energy. How have you converted? How have you changed here with COVID? How do you guide investors now that there is so much uncertainty? What is ROCKWOOL thinking about how to best utilize this and how to make the best strategy, succession planning? Even a good management and good leadership needs new profiles. What is ROCKWOOL doing to ensure the talent, that young management candidates are prepared to take over from the current leaders when that time comes? The Association of Shareholders is happy to see that ROCKWOOL has a whistleblower hotline. And in 2020, there were 9 incidents that are all being examined. Finally, let me wish Board and management, employees and shareholders a good 2021. And Thomas Kähler will give a reply to this question -- these questions.

Thank you very much. I'll try to give a reply. First, that was the question of how we have converted, how we have changed because of COVID-19. The safety of our employees and servicing our customers have been the most important point for us. In 2020, we were quick. We adapted production to demand when there was a decline and when it came back up. We suspended our guidance for a period in 2020 when external factors made it difficult for us to predict how the market was going to get through the lockdowns. Our guidance for 2021, well, there's also uncertainty about when the markets will be back at the level before COVID, and there's also an assumption that green transition that requires a lot of funding will really take off but in the coming years. There was a question of turning the situation into a strategy. Well, we believe energy efficiency and renovation of existing buildings will be an important growth potential for ROCKWOOL. Also because of our work with ESG and the adoption of our marketing, we have ensured that we are in a favorable position when this important work is to be started across the countries in Europe and North America. And another question here had to do with talent development. We are developing a new succession plan. There's a new process for all layers of management in the organization, and it will be part of it as are the processes that focus on developing and retaining talented employees. So we look at development potential at the same level, at a high level in the organization. We expect this initiative will make us even better at developing good candidates for leadership and specialist positions at all levels.

And we have a second written contribution from a shareholder by the name of Boris Ryman. And I will now read it out as I did with this one. In my capacity of shareholder for a long time and analytic of fundamentals, I use accounts as a basis for my assessment of a company's health. This applies to both annual accounts and quarterly accounts. I can warmly recommend shareholders to study the accounts in general and ROCKWOOL's accounts, in particular. If, as a shareholder, you wish to obtain more understanding of the figures, ROCKWOOL's accounts are a very good example, a textbook example, actually, and I can only commend both Board and management. It's wonderful to see that the high level of ethics that pursued for many years is continued. What is quality in accounts? Well, first of all, I wish to mention 3 tables: consolidated income statement, consolidated cash flow and consolidated financial balance. Operating income gives us a very important information about the company's operating profit -- operating income. This is related to revenue. And this year, this is 13%, and that's a fine achievement because an average of the best performance found a couple of years ago was 14%. So ROCKWOOL is really one of the good boys in the class also at the international level. And this is very important. It's the operating income table among the 25 large Danish companies, perhaps 5 behaved properly and decently and include depreciation and write-downs in income statement. And I'm sure, internationally, the performance is poorer. Other companies use all sorts of tricks to get depreciation and write-downs out of the way by putting them in the cash flow table. This is a way of embellishing the operating accounts. Another example is balance, assets and liabilities. One of the items is intangible assets. Intangible means something you cannot really grasp such as goodwill and licenses. And in the accounts, you find total intangible assets. And the relationship here is 6.6%, a very fine low figure. This means that management throughout makes sure that an acquisition is followed up by write-downs. Thank you very much to Board and management. You make sure that equity is not eroded. Companies use all sorts of tricks, and there are many of these companies. And they don't use write-downs. They book these amounts under intangibles. Many large companies have both 30% and 40% in intangibles, and some call it hot air. This is very rarely described in the newspapers. They simply don't have the time. If the poor-performing companies are to be put under pressure to behave decently, it requires better international standards. But standardization work in relation to IFRS is very slow. It would be fine if the CFO would tell the AGM about the development that ESMA is currently starting. This is the EU Financial Supervisory Authority, and this looks promising. It's going to be a pretty quiet affair this year at the AGM. I've tried now to blow a little life into it. And, of course, Boris Raymond would like to have some replies to this from a CFO. But for reasons of COVID-19, the CFO is not present, so it will be the Chairman of the Board.

Thank you for the kind words. We appreciate it. Boris Ryman would like to hear more information about ESMA. ESMA is the EU's securities and market supervision authority, and it works to increase protection of investors and create stable and well-organized capital markets. Among its objectives is to facilitate the implementation of a uniform and structured reporting taxonomy in the EU to enhance transparency of the capital markets and make data more easily accessible to analysts, investors and other stakeholders. The compulsory implementation of the new digital taxonomy has been deferred to 2022 because of COVID-19. However, ROCKWOOL has decided to implement it already now in relation to the digital reporting. The digital annual report for 2020 is available on our website.

Thank you. Since there are no further contributions from shareholders, I will go over to the formal process in relation to items 1 to 6 that we have now been dealing with in one go. Item 1, the proposal is from the Board of Directors that the AGM makes note of the Board's report. And I find that this is the case. Item 2, we heard the report from the Board of Directors. And there is a proposal in Item 3 that the annual report be approved and that members of Board and management be discharged of liability. I can also refer you to the Annual Report, Page 109 to 111, for the unqualified audit report. There are no reservations. No additional information. And I also make the conclusion here that the annual report for 2020 has been approved. The Board also proposes that members of Board and management, the discharge of their responsibility in relation to the annual report 2020, that too has been approved in the absence of objections or comments. Item 4, the presentation and advisory vote on the remuneration report. And we know that the company has prepared a remuneration report for the year 2020. And according to the Danish Companies Act, it must be submitted to the AGM for an advisory vote. The Board would like to point out that a report has been prepared in accordance with applicable legislation and applicable recommendations for good corporate governance and is intended to create more transparency in the reporting of remuneration to management. And it's available on the company's website. It includes remuneration paid to the company's Board and management for fiscal 2020. The Board proposes, of course, that the report be approved. And we have heard no objections, no comments, no questions, so I find that it has been approved in an advisory vote. Item 5, the Board proposes that the AGM approve the remuneration to management in the period until the AGM in 2022. And we find the numbers on the slide now. The proposal is that the base fee for ordinary members be DKK 360,000, twice that amount to vice chairs and 3x that amount to chairs. And then there's an additional fee or remuneration. If you are a member of the Audit Committee and the Remuneration Committee, DKK 300,000 for the Chair, DKK 180,000 for members of the Audit Committee and DKK 90,000 for members of the Remuneration Committee. And it should be pointed out that the proposed level of remuneration is unchanged from last year. We have received no contributions from shareholders with regard to the remuneration level, so I take it that this has been approved. With regard to Item 6, distribution of profit. The proposal is, as the Chairman said, that a dividend be paid of DKK 32 per share of DKK 10. That is a total payout of EUR 94 million. And the proposal will -- well, not only it's on the slide, but it's also available in the annual report in a number of places, for instance, Page 57, 58 and 62. And here, you see at group level, the distribution of profit. We have heard no objections concerning this proposal. Also the proposal for the payment of a dividend of DKK 32, so I find that this has been approved. On the Article 13A, Board members are elected by the AGM for a 1 year at a time. Søren Kähler has turned 70, so he will leave the Board. This is in accordance with Article 13A. Therefore, the Board proposes the reelection of the other members of the Board: Thomas Kähler; Carsten Bjerg; Andreas Ronken; Jørgen Tang-Jensen; and Rebekka Glasser Herlofsen; and that a new member be elected, namely Carsten Kähler. And I would also add that the Board has 3 employees elected members, Connie Enghus Theisen, Christian Westerberg and Rene Binder Rasmussen. The background and the management positions of the candidates to Board membership are available in annex 1 to the convening notice and also in the Annual Report on Pages 52, 53. There is a duty to inform about this, and this has been done in the places I've just referred to. If these candidates are all elected, the Board expects to appoint Thomas Kähler chair and Carsten Bjerg vice chair. We have not received any comments to this proposal, so I find that Thomas Kähler, Carsten Bjerg, Andreas Ronken, Jørgen Tang-Jensen, Rebekka Glasser Herlofsen have all been reelected. And Carsten Kähler is a new member of the board. According to Article 20, we also need to appoint an auditor for 1 year, and the proposal is for PricewaterhouseCoopers to be elected. The audit committee, it is stated in the convening notice, has not been affected or influenced by third parties and has not been subject to any agreements with third parties that will limit the AGMs election of certain auditors or audit companies. I find that PricewaterhouseCoopers has been reelected. Item 9, a number of sub items here: 3 proposals from the Board of Directors; and 2 from shareholders. The first proposal is from the Board and has to do with authorization to acquire treasury shares. And as always, the proposal is for the company to buy treasury shares, both A shares and B shares at a total nominal value of up to 10% of the company's share capital. Also, the proposal is that the share -- price paid for these shares must not depart more than 10% on from the listed price at the time of the acquisition. I have not received any objections or comments, so I find that this proposal has been carried. 9B, this was also referred to by the Chairman in his report. There's a proposal, also in continuation of the share buyback program to reduce the company's share capital from a nominal amount of DKK 219,749,232 to DKK 216,207,090 by the cancellation of A and B shares that have been bought back. And as a consequence, there should be an amendment to Article 3A concerning the size of the share capital. And the details were described in the convening notice and also appears on the screen. We have not received any contributions from shareholders in relation to this, so I take it that it has now been approved. 9C, the third proposal from the Board of Directors. The proposal is for the AGM to approve the amendments to the articles proposed by the Board. There's a proposal to the effect that the Board be authorized to decide to convene and organize future AGMs as completely electronic meetings in case extraordinary circumstances prevail. In case it is deemed appropriate and that if it's possible to have the meeting in a safe manner. This should be a new Article 6F in the Articles of Association. The second amendment to the Articles of Association concerns an update in relation to the remuneration report in future. It will be presented on an annual basis for an advisory vote in the same way as we did it today and, therefore, it is proposed to amend Article 10 by adding a new Item 4 on the agenda with standard items for the AGM. I have not received any comments, so I find that this proposal has been approved. And now we go to 9D. So this is Timothy L. Ross, who has proposed that the company should prepare a population assessment that goes beyond the existing disclosures and those required by law of the results of the company policies and practices to minimize the adverse environments of the community impacts, particularly to children, from the company's citing and operation of this manufacturing facilities. Such assessment and disclosure should be made at reasonable costs. The meeting confidential information should be updated at regular intervals in line with changes in the company's footprint and operations. The full proposal and the shareholders' motivation are described in the complete proposals. The Board has said they do not support the proposal. Mr. Ross has sent further motivation, and he has asked that I should read it out, and that will be in English. And I quote "Dear Chairman, Board of Directors and fellow shareholders. I regret once again that I cannot attend the meeting in person. I would very much like to present these remarks face-to-face, but safety and proper risk management prohibits my presence. I thank Mr. Heering, Chairman of the meeting, for presenting my comments to you this afternoon. So you may better understand what I'm seeking, I will begin by reading my submitted proposal in part." So that -- and that's a quote within the quote, so that shareholders can understand and manage risk more effectively as shareholder proposes that ROCKWOOL prepare and publish an assessment above and beyond existing disclosures and those required by law of the results of company policies and practices to minimize the adverse environmental and community impacts, particularly to children from the company's citing and operation of its manufacturing facilities. And now the response from the Board of Directors. It quotes, the Board of Directors appreciates the concerns expressed by the shareholder. While noting this proposal is close to identical to the one submitted in 2019 and 2020 and reiterating that it believes that the company adequately discloses relevant risks and material impacts via its annual report and sustainability report. The Board of Directors further notes that the company observes local and national regulations when locating new manufacturing facilities unquote from the Board response. And back to Mr. Ross. When I saw the directors response, I said, well, let's take a look at the documents the Board refers to and see the relevant risks and material impacts they considered. First, this is how the risk and material impact are determined. I quote from the 2020 annual report, all managing directors and our subsidiaries and group functional HEPs must ensure that the risk review within their areas of responsibility is conducted at least once a year and that risks are discussed, described scored for severity and likelihood and quantified in terms such as predicted financial impact from that. Note that nothing prohibits evaluating the risk facing the company more than once a year, and the statement seems to encourage to do so. The company found that in 2020, the most likely risks with the highest financial impact were climate risks, competition non-compliance and cyber threats. The change from 2019 was to drop financial risk and corruption and bribery while adding climate risk. Only these 3 risks are disclosed and discussed with investors, even after a shareholder has brought a specific risk to the attention of the Board of Directors 2 years ago -- 2 years in a row. No discussion of the company's approach to ensuring appropriate risk management is occurring even after the pandemic underway is still having an impact on the company. I take no comfort in the Board's response and the very limited disclosure of the risk faced by the company. The second reason the Board gave for voting against my proposal was, "the Board of Directors further notes that the company observes local and national regulations when locating new manufacturing facilities." Back to Mr. Ross's motivation, a major point of my proposal is that the Board should prepare and publish an assessment above and beyond existing disclosures and those required by law. Please note that the proposal doesn't just ask ROCKWOOL to follow local and national regulations but that the disclosure and assessment of the results of the company's policies and practices on siting and operating its manufacturing facilities should comply with the relevant portions of OECD guidelines for multinational enterprises and relevant guidance thereto. In other words, international guidelines. The company states on Page 35 of the annual report that we continuously aim to minimize the impact of our processes on people and the environment. For some environmental areas, we have internal mandatory minimum requirements. In case where our own requirements exceeds legal requirements, our standards prevail. That was from the annual report. And back to the motivation, how can you aim to minimize the impact on people and the environment when there is no policy in place to consider the impact on the very bedrock of community, its children? For instance, no environmental impact statement was performed in Jefferson County West Virginia prior to locating the new factory very close to several schools, and the directors have rejected my proposal to adapt a policy to disclose the results of the company's management of such impacts. Without the policy, I have proposed the company is setting itself up for the same problems in their next location that they have encountered in Jefferson County, especially now that the issues have been raised by U.S.-based activists who are making their concerns widely known. I'm talking about environmental justice here. There is a huge financial and public relations risk to the company if school children are impacted and the possible monetary risk will increase every time ROCKWOOL insists its current policies are good enough. The company's current position is that if they build another factory next to a school to a school, they will follow the same process they have followed in the past. Looking at the experience in Jefferson County, over the past 3 years, adopting the policy I propose seems like a financial smart thing to do. Perhaps ROCKWOOL would have avoided a nearly 2-year delay in starting production could have avoided the costs and delays from numerous flow shoots and the international spotlight on the situation in West Virginia from the Washington Post and a very recent summary article in Vice News perhaps even decided to choose a better location if the policies I propose were in place. Accusations of environmental injustice will increase as more and more people realize that those benefiting from ROCKWOOL's products will primarily be in urban areas, while the poor neighbors of the factory will be the ones that suffer. ROCKWOOL boasts that over the lifetime of its product, they will save 100x the carbon emitted in its manufacturing, but the company makes no mention of where that carbon will be emitted, and there is no mention of PM2.5, particularly. In the case of Jefferson County, there is no mention of where 133 tonnes of PM 2.5 will go. There are 4 schools within 2 miles of the factory in Jefferson County. Did ROCKWOOL investigate the health hazards to children that would spend their entire school career feeling the impact of the factory emissions? No. And if ROCKWOOL had asked where the water for their factory would come from, they would have learned it would come from wells subtitle acquired from the elementary school and poor neighborhood across the road. And now the acquisition of the schools well and us ROCKWOOL's Water is under litigation. The great Danish philosopher Soren Kierkegaard wrote, "Life can only be understood backwards, but it must be lived forward." To me, this means that the best way to identify risk to further to the future, my present is to look at mistakes and successes of the past and adjust your actions accordingly. I firmly believe that if Kierkegaard was a shareholder, he would support my proposal. But dead philosophers can't vote. Last thing, I'll ask all of you to support my resolution, and we'll close with a statement that I think is made by a great American philosopher, Mr. [indiscernible] and Dr. Martin Luther King, Jr. and a quote is here. "The time is always right to do what is right." You should start now by doing a small part to treat people with dignity, courtesy and respect. Thank you all for considering my remarks and proposal." I know that the Chairman of the Board would like to comment on that On behalf of the Board of Directors, so over to the Chairman of the Board.

Thank you for this intervention. Yes, I'm just going to repeat what the Board says, the Chair has already rated out. You can see it also in the material. We take it seriously, the worry is shared, the worries specified by the shareholder, but also sees that the proposal is practically the same as the one made in '19 and '20. The Board finds that the company appropriately gives information about relevant risks and significant consequences in the annual report and the sustainability report. Furthermore, the Board finds that the company does observe local and national rules and regulations when citing new production facilities. So the Board of Directors does not support the proposal.

Thank you very much. No other comments have been received to that. And on behalf of the proxies and personal votes received and the big shareholders' votes, this proposal has not been adopted. It has been adopted by far more than 90% of the adoptees. So let's go to 9E, a proposal from another shareholder, Katherine. We are under 9E, and that's a proposal to the effect of the company prepare a report to be updated twice a year with information about policies and procedures in relation to the giving referring or incurring our contributions or expenditures to: A, participation or intervention and campaigns on behalf of or in a position to a candidate to a public office; or B, to affect the general public or a segment of it in connection with an election or a vote and monetary and nonmonetary contributions and incurrence of expenditures spent in a similar manner. The proposal is for the report to contain information about the identity of the recipient and the amount paid out and the title of the person or the persons in the company that are responsible for making the decision. The proposal is to publish the report on the website of the company within a 12-month period. The full proposal and the shareholders' motivation is described in the complete proposals. The Board has announced that it does not support the proposal. We'll come back to that. And Katherine Joswick has sent a brief motivation of the proposal. She has asked me to read it out, and I will do that. And this is in English. In 2020, the heightened risk posed by engaging in political activity makes its paramount that companies adopt policies to govern their political participation and disclosure and disclose political expenditures. Whether a company is directly contributing to our spending in elections or indirectly participating through payments to political or app organizations, formal policies, commits, senior management and directors to responsibly -- to responsible participation in national politics. Such transparency and accountability in corporate electoral spending allows for the exercise of appropriate oversight over actions that otherwise can create material risks to the reputation and financial position of the company. Relevant actions include contributions and expenditures on any activity considered involvement in local political and activities under the OECD guidelines for alternate enterprises or intervention and political campaigns under the U.S. Internal Revenue Code or similar legal or policy frameworks globally, such as direct and indirect contributions to political candidates, parties or organizations and independent expenditures or electioneering communications on behalf of local state provincial or national candidates. Disclosure is in the best interest of the company and its shareholders. The U.S. Supreme Court recognized this in its 2010 Citizens United decision, which sits, and there's a quote, "disclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages" from the decision. While the company publishes certain information about this sustainability and ethics programs, such as its whistleblowers hotline, it does not currently disclose sufficient information, if any, about its expenditures in election-related spending from corporate funds. In relation, relying on publicly available data would not provide a complete picture of the company's electoral spending. For example, the company's payments to nongovernmental organizations or trade associations that may be used for election-related activities. It's a part of opposition to local voting for candidates or issues are undisclosed and unknown. This proposal asks the company to disclose all of its electoral spending, including payments to trade associations, advocacy groups and other organizations, which may be used for electoral purposes, particularly in the United States, which is a target market for the company's expansion. This proposal would bring our company in line with a growing number of leading companies, including over 332 companies or over half of the U.S. S&P 500 that disclosed some of all of their election-related spending or that prohibits at least 1 type of such spending. For these reasons, we urge your support for this critical governance reform. And this is also here with gives us format, distributions and prevailing. Thank you very much. The Board notes that the company complies with all local and national provisions concerning the disclosure of expenses to an expenditure to lobbyism and political contributions, and thus, we feel that the current disclosure of information is sufficient. We would point out that the shareholder is residing in the U.S., and we can inform you that ROCKWOOL does not make any political contributions, monetary or nonmonetary in this country. And we do not support the proposal. And we can now conclude, in the absence of other comments to this proposal that on the basis of votes received through proxies, postal votes and from the major shareholders, the proposal has been rejected, much more than 90% of the votes were against. And now Item 10, the last item on the agenda, any other business. Here, it is possible to make comments or other contributions, but we have received nothing from the shareholders, so I find that the formal agenda has been exhausted. And I'd like to hand back to the Chairman of the Board for a final comment.

Thank you very much. And thank you, Niels Heering, for once again taking us so expertly through the agenda. I'd also like to thank my colleagues on the Board of Directors for excellent cooperation in the year under review. And Søren Kähler, in particular, is resigning from the Board. He has made a great effort over the last 8 years. Carsten Kähler congratulate you are with being newly elected, and I congratulate the rest of the Board with reelection. Well, now there would normally have been a guest speaker from one of our business areas who would come and talk to us about the company. But in the circumstances we have this year and inspired by our commitment to CDP, we have made a video instead, and we're going to play that now. So that's it. Thank you very much for your virtual participation here in the AGM. I hope we will meet physically next year. Thank you. [Presentation]

2020 was a year that we'll never forget. Together, we face the most unpredictable global challenge in living memory. The past year has been a true test of our resilience personally, professionally and as a society. But together, we stood firm in the face of a unique and unprecedented threat. Strong foundations help us to remain resilient when things become a little uncertain. Where we've been forced to spend time apart, we've stood together. And where we faced adversity, we've adapted. You could even say we've learned to thrive in the new normal despite missing the old times every now and again. Well, Thank you. Unexpected obstacles come in many shapes and sizes. But when we invest in the right building blocks, they keep us strong and ready to bounce back from trying times. And as we enter a new era of recovery, we have a renewed focus on what's important, our health, our family, community and the planet around us.

It is fair to say that 2020 will be a year we will never forget. The pandemic is hopefully weakening a script, but the challenges will be with us for some time. In any crisis, challenges come with opportunities and lessons for us all. For ROCKWOOL, the last year showed who we are and what we can do. We got knocked around but reacted calmly and quickly. Without panic, we quickly adjusted the business to reflect changing conditions, and we did it while keeping ourselves safe and continuing to deliver for our customers. Looking at the outside world, I'm encouraged to see political leaders increasingly understand that buildings play a pivotal role in addressing the health and economic challenges brought on by the pandemic as well as the climate crisis that becomes more urgent everyday. Many governments are now ceasing the opportunity to green recovery, to tackle all 3 challenges at once leveraging climate initiatives to spur economic growth and create healthier, safer communities. Perhaps 2020 will go down as the trigger year for getting serious about energy efficiency and climate change. We can be proud of the contribution we make and optimistic about the future.

That's right, Jens. ROCKWOOL is right there where economic, social and climate recovery come together. And when we talk about recovery, it's really important that we talk about our buildings. Buildings account for more than 1/3 of all carbon emissions worldwide. And with the pandemic still a factor in people's lives, our homes are more than just where we live. In many cases, they have become our place of work, a classroom for our children or even an auditorium. It is encouraging to see that the European Union has placed such a strong focus on the renovation of buildings as an effective way to jumpstart the economy while achieving climate targets. The European Commission sees doubling the renovation rate over the next 10 years as essential to meeting its 55% carbon emission reduction goal. Renovating those buildings to be more energy efficient will save energy and reduce emissions while creating healthier and safer places for people to live, work, learn and recover, and it can create up to 18,000 jobs per EUR 1 billion invested. This is especially important in times of economic recovery. ROCKWOOL products play a big part in making that happen. As you say, Jens, there are challenges out there, but we have a good reason to be optimistic about our future.

While the future is exciting and as new innovative solutions help us to become even more energy efficient, our collective footprint will be much reduced. But we also know that sometimes it takes a little energy to create these sustainable solutions that can significantly reduce energy consumption on a long-term basis. Sorry, guys, my laptop died, story of 2020. But while I go and find my charger, Anthony, as a global manufacturing company, ROCKWOOL's production process inevitably has some environmental consequence. How mindful of that are you? And how can ROCKWOOL positively contribute to global climate goals?

So you're right about the environmental impacts, but perhaps not entirely as you might think. So ROCKWOOL is already a net carbon-negative company in that in the lifetime of the building insulation products that it sold in 2020, it will be saving 100x the carbon emitted in the energy consumed in production. We're really proud of this. And what's more, in 2020 for the second time, true cost part of the Standard & Poor organization, classified 100% of our products as being SDG positive, meaning that they will have a positive impact in reaching the United Nations sustainable development cost. But of course, we also know that we need to continue to minimize the environmental footprint of our production. And that's why in 2020, on top of the 6 sustainability goals that we set back in 2016, that we would set science-based targets. And those science-based targets are reducing our absolute life cycle greenhouse gas emissions by 1/3 in 15 years, so by 2034. Reduction of emissions from any business growth will be on top of that. To underline this ambition level, ROCKWOOL is one of the few global energy-intensive companies that have verified approved science-based targets by the Science-Based Target Initiative Organization. Getting to these targets will contribute to helping to achieve the global ambition of zero carbon emissions in 2050.

Well, that is fantastic news, and these science-based targets are the gold standard in goal setting. It's about doing what's right, not just what's easy or convenient. And these targets are clear, consistent, long-term and transparent. They also help businesses like ROCKWOOL to plan ahead and set strategy to address global challenges. But of course, targets are nice, but action is ultimately what's important, and ROCKWOOL is leading the way in the face of a changing planet to take us into a new era of green recovery. So Bjorn, tell us a bit more about these targets and how we plan to achieve them.

Well, it's not going to be easy. In fact, it's actually going to be quite challenging to reach the decarbonation targets that Anthony speaks about. And we're building our decarbonization strategy on 3 pillars: first is to improve the energy efficiency of our operations; second is technology innovation; and thirdly, how can we exploit the inherent circularity properties of stone. And I would like to speak a little bit more about the technology innovation. Let's take for an example the large-scale electrical melter we have piloted in Moss in Norway. Here, we have built the biggest electrical motor for stone wool in the world, and this type of technology is really efficient to use in countries where the electrical grid has already been decarbonized. In fact, using this very advanced melting technology in Norway has helped us reduce our carbon emissions with more than 80%. This has helped us switch from coal to natural gas or biogas. And as an example, we have converted our 2 Danish factories to natural gas in 2020 and certified climate-neutral biogas in 2021. This has helped us reduce our carbon emissions in Denmark with more than 70%. We still have a lot of ground to cover to reach our decarbonization goals, but I'm sure we will get there.

More efficient buildings, innovation and technology. They're all fantastic ways to enrich modern living, and that begins in our factories and offices. But healthy habits aren't just made indoors, despite the fact that we've spent a little bit more time there than we'd like in 2020. As we enter an era of recovery, we have renewed opportunity to get back outdoors into the elements and to do the activities that we enjoy. And there's no better showcase for the elements than the sport of sailing, with boats racing on the ocean, powered only by the wind. So when ROCKWOOL and SailGP came together in a groundbreaking partnership around the Denmark SailGP team led by Nicolai Sehested, it was a perfect fit. With Season 2 of SailGP about to get underway, lookout for ROCKWOOL at the heart of the action.

We have a lot to look forward to this season. At Denmark's SailGP team, we're really proud to represent ROCKWOOL, and we're reaching some of the world's most iconic cities alongside the best sailors in the planet in SailGP. The partnership between ROCKWOOL and the Danish SailGP team is much more than just a traditional sports sponsorships. As a team, we are casting ROCKWOOL's image. The company eases and purpose gives our team strong foundations, and the Danish heritage is in our DNA. SailGP is powered by nature It gives us a unique global platform to tell the world about what ROCKWOOL, its leadership and the solutions that it provides. As a sports event, SailGP has the most skilled sailors, we're looking at champions, around the world of adventures, record breakers and the fastest boats. But it's about far more than just top levels sport. Ultimately, it's about showcasing a better future and bringing people together around a common goal. The boats we race are the height of technology and innovation. The [ camera ] has already broken the 100-kilometer barrier, and we're always pushing for more performance and faster seats. And just like ROCKWOOL, SailGP is making progress of the 2. SailGP has bold ambitions to be the world's most sustainable purpose-driven sports and entertainment platform. Using its global reach to drive chains, we make action-orientated plan, standing events, venues, tech partners and athletes. As an important trust department to SailGP, ROCKWOOL's playing a key role in that journey, and I believe that together, we will achieve something truly great through this collaboration. Season 2 of Sail GP begins in Bermuda on the 24th and 25th of April. And we hope you will tune in and support us as we race for ROCKWOOL and fly the Danish flag on the global stage. We hope to make you proud.

2020 was a year we'll never forget. But together, we can make 2021 a year to remember for the right reasons. We've all shown adaptability, commitment and resilience. And we've also shown that even in unpredictable circumstances, together, we can achieve something remarkable. But we're not done yet, and we're not standing still. Together, we can build a better future.