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

Good afternoon. I am Thomas Kahler, and I'd like to welcome you all to Rockwool A/S Annual General Meeting here in 2023. In accordance with Article 8a of our Articles of Association, the Board has chosen lawyer Anders Ørjan Jensen from Gorrissen Federspiel as our Chairman of the AGM. So I hereby give the floor to you, Anders.

Thank you, Thomas. As you know, the first thing that I have to do is to decide whether the AGM has been lawfully convened and is quorate concerning the items on the agenda. I have reviewed it in advance, and I can tell you that in accordance with the articles, the AGM must be convened with minimum 5 weeks and maximum -- minimum 3 weeks and maximum 5 weeks' notice by publication on the website. And to shareholders, a notice must be sent if they have so requested. So on the 7th of March, the publication was made on the website of the AGM and Nasdaq Copenhagen, too. And also a letter or other communication e-mail has been sent to shareholders who so requested. So the company is also in compliance with all -- with requirements concerning the articles and the company's act. The AGM must be held here on Zealand total tradition. We are also in compliance with that because we are here at Roskilde Convention Center. So my conclusion is that the AGM has been lawfully convened. When it comes to the agenda, we have the standard items here at Rockwool. We have 2 proposals from the Board. One concerning the authorization to acquire treasury shares; and secondly, a proposal to spend DKK 100 million on the reconstruction of Ukraine. We'll get back to that. All items on the agenda today can be adopted with simple majority, and there are no special requirements concerning quorum and so on. So we are quorate concerning all the business on the agenda. We have a good turnout. 154 access cards have been requested, 90 or a bit more have turned up here, a bit more than that perhaps. We have 56% of the total shares, and 76% of all votes are represented. Looking at proxies and postal votes, about 99% has been given in that way. True to tradition here in Rockwool, we'll deal with the first 3 items jointly, so the report, the presentation of the annual report and also the proposal concerning the appropriation of profits. And the Chairman of the Board, Thomas Kahler, will do that. Please turn off your mobile phones or put them on silent, so we're not disturbing the process. And Thomas, I give you the floor, so you can give the report and give your presentation of the annual report.

Thank you very much. Good afternoon, once again, everybody. On the screen, you have the items we are going to go through this afternoon, and it will probably be not a surprise to any of you that I'll begin my report by speaking about the situation in Russia and in the Ukraine, because both in the Board and in the management, we find it important to inform our shareholders about our decision to maintain our ownership of our activities in Russia. The war in Ukraine is terrible, there's no other way to put it. The war has been devastating for both the country and the people. No one should therefore be in any doubt that we at Rockwool condemn it in the strongest possible terms. But then why stay in Russia? Because we are convinced that this is the least bad option we have. And it is so because we are convinced that the Russians would never accept that Rockwool is closing down its business. The entire business will therefore continue with [ old autos ], not just all our factories, but also our unique and world-leading technology would be taken over by the Russians if Rockwool decided to leave the country. The consequence would be that all the economic benefits of the business, the profits, the cash flows, everything, would be in Russian hands from day 1 if we withdrew. So not just a tax on any potential profits. No, the entire profit and all future cash flows. I am well aware that what we are talking about here is a controversial viewpoint. And therefore, it's also important to remember that there are 2 types of foreign companies in Russia, and that's something which unfortunately rarely is written about in the press. The first kind of companies are companies like Rockwool, that is to say companies that can continue the operations without any problems after a takeover or, say, just as if nothing had happened. So it's business as usual. The Russians wouldn't lack anything at all to be able to continue running Rockwool's business themselves. And then there's a second type and most on that category, namely foreign companies that can effectively shut down their Russian activities, typically, by stopping the supply of the goods or components to Russia that are crucial for them to continue production and sales. So the question is whether it would represent any value for the Russian if they took over. And it's quite obvious that a going concern with production, customers and employees has a completely different value. And therefore, the Russian government would have a huge interest in keeping it going. In this way, Rockwool would leave assets worth billions of kroner to the Russians by companies that have the opportunity to shut down business activities from the outside the country will rarely leave anything of significant value behind. At the same time, it's also important for me to remind you that the factories have been operating independently from the rest of Rockwool since last spring. This means that they do not receive any supplies of any kind, and they also do not receive any spare parts. And that is no form of support or management involvement now from the headquarters in Denmark nor from other Rockwool companies. In other words, we neither export products or components to the Russian market nor import products from the Russian market. Yes, we still earn the business, but since last year, only as passive shareholders. Rockwool has thus reduced its ownership to be a passive ownership, that is without daily control and without involvement from the management in Denmark. So Again, Rockwool as a company could easily lever our share. But what matters, the actual business would continue without us without any problems. As a result, we would have given it all to the Russians or sold it too far below the market price. And therefore, I believe that it will be interesting for you as shareholders to put the amounts we are talking about into perspective. The value of Russia's -- of Rockwool's -- sorry, Rockwool's Russian subsidiaries is the same order of magnitude as the total Danish military and humanitarian support to Ukraine over the past year. And remember, this is not something that would be taken from the Russians, no. On the contrary, it's something we would be giving or selling for a pittance to the Russian regime. We simply cannot see how such a gift to Russia would in any way benefit Ukraine, let alone serve to end the war more quickly. But if it's not about the money, what is it then? Well, then it must be to send a clear signal, a signal on the scale of DKK 5 billion to DKK 6 billion, DKK 5 billion to DKK 6 billion, and that's just from Rockwool. Could one imagine that there might be better and more sensible ways to send such a signal? I honestly think there are. And that's also why we find it hard to see how it could be morally or ethically better to give it all away to the Russians or sell it for a pittance rather than as shareholders retain ownership of our business. Given the Russian assets of such high value would in no way contribute to end the war more quickly. And as we have said many times before, by retaining ownership of the Russian operations, we ensure that the Russians derive far fewer economic benefits from it than if we were to withdraw. In short, we are doing what is least good for the Russian regime. Perhaps, some of you may be wondering why we don't just drop our passive ownership and give up our shares or why we don't put the Russian business up for sale and patiently wait for an offer to be approved by the Russian authorities. The answer to both questions is exactly the same. Because by doing so, we would be giving a huge gift to the Russians, and it would only be an empty gesture to Ukraine. Because once again, our 4 factories will just continue operating as if nothing had happened. They would employ the same employees. They would pay the same taxes, and they would do so from day 1 because their factories can continue to operate independently and therefore will, of course, do so. Some have suggested that we solve the problem by moving the factories out of Russia or by destroying them. They have probably never seen a real Rockwool factory and, therefore, do not understand what it would take to dismantle and move the extensive production equipment at our factories, which, for the most part, are integrated into the very large building structures. Even in a country where the authorities will accept us dismantling and moving the equipment from our factories out of the country, it would be extremely difficult and takes several years. In Russia, the authorities would, of course, not allow it. Blowing up the factories is completely absurd. It's impossible and would be seen as an act of terrorism. So every time we discuss the options we have, and believe me, we do that continuously, we come to the same conclusion. Keeping our Russian operations is the least bad option among the only bad options available remaining, as I said, a passive owner. At first glance, leaving Russia would probably look more politically correct. But the result, giving away billions of kroner worth of assets to -- without making any positive difference whatsoever. Well, we simply won't put our name to that. Instead, we do believe that with your support as our shareholders, we can make a real positive difference by contributing hundreds of millions to reconstruction activities in Ukraine. It's probably not necessary to say this here in front of you, our shareholders, but it's important for me to reiterate, so there's no doubt. In Rockwool, we, of course, comply with all sanctions, also new sanctions if there are more. And of course, we comply with all other sanctions around the world in exactly the same way. And exactly this question of sanctions is my cue to give you a brief update on the letter we received from the Danish Business Authority a month ago on February 28. The Danish Business Authority has confirmed to Rockwool that it was a media article that prompted them to initiate an investigation into whether Rockwool has violated one or more sanctions in relation to our business activities in Russia. And yesterday, Tuesday, we have received the decision of the Danish Business Authority, and I'm very pleased but not surprised to be able to tell you that the authority has confirmed to Rockwool that we have not gone against any sanctions, and they have now closed the case. As I said, it was a media article, which prompted the authority to start this investigation. And speaking of the press, I assume that many of you in this room are also worried about the media coverage we have been exposed to. And some of you may ask, aren't you at all worried? And of course, we are. I do not like, and no one, none of my colleagues like the critical comments that have been made about Rockwool. Rockwool must understand, of course, the way the press works and the way the press thinks. And I think we have that. But when some journalist criticized Rockwool for doing business in Russia before February 24 of last year, well, I think that they are completely wrong because, as you all know, not only Denmark, but many other EU countries hosted political and business dedications from and in Russia, right up to the Russian invasion of Ukraine. And during that same period, Denmark and Europe as a whole bought energy from Russia, DKK 4 billion every day. Nevertheless, one occasionally comes across writings that can be difficult to understand or relate to. The problem is often the premise that certain journalists that don't. By that, I mean that journalist in question take as to appoint for the departure that one can appropriately view the past through today's lenses. In other words, they believe that it's perfectly acceptable to use the present and thus the knowledge and insight we all possess today when evaluating and judging other's behavior in the past. At least, that's what some journalists do, those who have chosen to focus on the period before Russia's invasion of Ukraine. And thus, exposure are good, even though until 2022, it was a completely common practice for companies to do business in Russia. Now this is just to emphasize, as clearly and as explicitly as I can, here in front of the company's shareholders that none of us like the criticism. Of course, we don't. And yes, of course, we are all affected by this kind of attention that occurs without saying. But as has always been the case, and it's important for me to highlight, at Rockwool, we care about doing the right thing, even if that might be unpopular in some people's eyes, because the easiest thing would be to decide to leave Russia. It just wouldn't be the right thing to do. As Chairman of the Board, I feel a great responsibility for that. Just as I also feel it creates a possibility to ensure that our decisions in the Board and management live up to Rockwool's long tradition of always placing ethics and integrity at the forefront. What terminates all our considerations in a horrible situation, like the one in Ukraine, is fundamentally about doing what is most ethically correct. And as I've emphasized on previous occasions, we believe that maintaining our passive ownership as a shareholder in the Russian subsidiary today is our only option. To do just that. Otherwise, we wouldn't do it. Now I'd like to take a more concrete look at the situation in Ukraine. First of all, I can tell you that all of our colleagues in Ukraine are safe, and they are all continuing to work as well as they can under these extremely difficult circumstances. We have great respect and admiration for that. It will take many years to rebuild Ukraine. And at Rockwool, we want to support the Ukrainian people in this enormous task of returning to a normal life. At our Extraordinary General Meeting in August last year, you, our shareholders, approved with an overwhelming majority of the Board's proposal to spend between DKK 100 million and DKK 200 million for reconstruction activities in Ukraine. We were and we are very grateful to this tremendous support. I would, therefore, like to give a brief update on where we are today. First, I can tell you that of the DKK 100 million to DKK 200 million that you approved in August, we have spent about DKK 20 million until today. We would have liked to spend more, but we haven't yet been able to really get started on the larger project we are working on. I'll return to that shortly. So this means that there is DKK 180 million remaining. We have -- we are now in the process of transferring that amount to the newly established foundation named Foundation for Ukrainian Reconstruction. And let me just take it here, even though we'll get back to it later, under Item 9b on the agenda. It's about separating the reconstruction efforts in Ukraine from the daily operation of the company. And we have, therefore, decided to establish a new foundation. The new foundation aims to provide support for relevant projects and initiatives earmarked for Ukrainian reconstruction or for supporting Ukrainian refugees. In this way, our intention is to contribute the remaining DKK 180 million, plus an additional DKK 100 million to the new fund to support the reconstruction of Ukraine. It may seem strange that we are asking for more money before using the amount approved by the shareholders last year, and there's a reason for that, of course. It is our expectation that the new foundation will soon be able to engage in a large project, which is the foundation in collaboration with a large Danish engineering firm who is currently in dialogue with the region in Chernihiv about right now. And therefore, it's important for us to be able to allocate and use a necessary amount if the project is to come to fruition, and it's still a condition that the money must only be used in areas under Ukrainian government control or to help Ukrainians in other countries. The Board therefore recommends that the General Meeting dated today approves an additional amount of DKK 100 million for the foundation. If this happens, which we hope it will, a total of DKK 280 million will be allocated to assist and help the Ukrainian population, in addition to the DKK 20 million that, as mentioned, had already been used. The Board believes that the proposal reflects and supports Rockwool's values and activities. And as last year's Extraordinary General Meeting, the Board has not only emphasized that the company has a social responsibility, but also that the conflict in Ukraine constitute a completely extraordinary situation that affects and is of great importance to both the company, our employees in Ukraine and our business partners there. As mentioned, this proposal will be formally voted on later today. Now back in December last year, we delivered a number of weather-resistant tents and portable heating devices to the Chernihiv region. Here, Ukrainians can get coffee or tea, charge their mobile phones, use the Internet or simply sleep if they are without a home. And in several places, there are also special areas for children to play. Thanks to the incredible efforts of many people, Rockwool has delivered more than 300 diesel generators to the Ukrainians. The Chernihiv region can be without electricity for most of the day. And so these generators are extremely important. In this picture, you can see one of the larger 120-kilowatt generators. We delivered this one in January, and it's now installed at the central water pumping station. And this means that the population in the area still has running water when there are power outages. Other generators provide power to residential buildings or to hospitals, fire and police stations and even to a zoo, so the animals can stay warm when the power goes out. In November, we also sent a number of Rockwool winter mats to Ukraine. As many of you probably know, winter mats are typically used on construction sites to prevent the ground from freezing. But in Chernihiv, Ukrainians use them, among other things, as mattresses. In this way, the winter mats help people stay warm, for example, in shelters. So the winter mats turned out to be even more important than we had originally anticipated. And the feedback we received from the Chernihiv region has, therefore, led us to decide to deliver more of these insulation mats. And here, in this image, you see Sergiy and Alena. Sergiy, on the left is our daily manager in Ukraine, and Alena on the right is our customer service and logistics manager. Many people, both in and outside Ukraine, are working incredibly hard to get the help to where it's needed. And what you see in this image is a delivery of Rockwool insulation to the Ukrainians in the area. We are extremely proud of the effort our people are making, and we are very grateful for their tireless dedication. That was a little update on the situation in Ukraine and on the use of the money we have donated. If anything, I've told you here raises questions, we are, of course, ready to answer them later. So let me turn my attention to the rest of the business. First, let me talk about our sustainability results in '22, and after which I'll take you through the group's most important business results from the year under review. Earlier this year, Rockwool received a very special recognition that I'd like to mention. It is the so-called Global 100 sustainability index. This is an index that assesses and ranks the most suitable companies in the world. Behind it is something called Corporate Knights, a leading publication focused on sustainable economy. Corporate Knights compares and ranks the world's largest companies, companies with a turnover of more than $1 billion. They do this by looking at the negative impact of the company's operations and the positive effect that the company's core products and services have on us as people and on the planet. This is the first time that Rockwool has made it under this prestigious Top 100 list. And actually, we were at an impressive #16 among the most sustainable companies in the world, so that really makes us proud. And this is not even all because Corporate Knights also ranks companies by the industry they belong to. And in our industry, that is companies producing building products, we went straight to the top as the global #1. And it doesn't stop here because the international consulting firm, Brand Finance, recently named Rockwool the second strongest brand in Denmark. Last year, we were #3. According to Brand Finance's annual analysis of the most valuable Danish brands, the value of Rockwool's brand continues to rise by 11% compared to last year and by a full 25% since 2020. This says something about the strength and respect that Rockwool's brand has among customers and other stakeholders in Denmark and abroad. So all in all, these recognitions were, of course, a great honor for us to receive. And I'd like to take this opportunity to thank the leaders and employees who in their daily work contribute to Rockwool being ranked so well. Thank you very much. In our sustainability efforts, we may share our progress towards the 11 UN SDGs, the sustainable development goals, and Rockwool has committed to working towards every year. We measure both the impact of our production processes and the effect that the use of our products has. This is what is popularly known as a company's footprint and a company's handprint. Back in 2016, Rockwool set 5 sustainability goals, all of which are to be achieved by 2030. However, because it's important to continuously ensure we work in the right direction, so we set a number of intermediate goals for 2022. I'm happy to tell you that the end of last year, we had reached all of our 5 intermediate sustainability goals. This means that, compared with 2015, we have reduced our CO2 emissions in our production by about 17%. We have reduced the water consumption in our production by about 14%. We have increased the energy efficiency of our own office buildings by about 39%. And we have reduced the amount of production waste sent to landfills by about 51%. And finally, we have increased the number of countries where we offer waste recovery programs. We have increased from 17% in '21 to 19% in '22. Almost 2.5 years ago at the end of 2020, Rockwool committed itself to more ambitious sustainability goals. We did this to bring the company closer to what is called net zero. So that means completely avoiding emissions of CO2 into the atmosphere. Our goals have been verified and approved by the Science Based Targets initiative. This is a nonprofit organization that, among others, collaborate with the United Nations and with the World Resources Institute. In our ambition to approach 0 emissions, we have set targets for a 38% reduction in factory's absolute greenhouse gas emissions by 2034 and a 20% reduction in our nonfactory-related absolute greenhouse gas emissions throughout the life cycle, again, by 2034. In both cases, these goals compares -- compare with our emission levels in 2019. Now what makes these goals particularly challenging is the fact that they measure absolute reductions. This means that even if Rockwool grows as a business, builds more factories, producers more stone wool, which we certainly plan to do, we still need to reduce our total emissions to achieve our goals. In fact, Rockwool today is one of the few energy-intensive manufacturing companies in the world whose emission reduction goals have been verified and approved by the Science Based Targets initiative. So to put things a bit more in perspective, while we have grown by about 8% since 2019, our emissions in absolute terms have decreased by 4%. So in other words, it's got to do with much more than just reducing the amount of CO2 we emit per tonne of stone wool produced. One of the most important ways to reduce carbon emissions is by transitioning from coal and coke to less CO2 intensive energy resources. Last year, it was -- we converted our factory in Flumroc in Switzerland to electricity. This is a very comprehensive process. We expect that to be completed next year. In the U.S., in our factory in Mississippi, we have converted the melting furnace from coal to natural gas. This is a transition that we expect will reduce our annual CO2 emissions at that factory by 30%. And we're also exploring other ways to reduce carbon emissions. In the U.K., we are testing with various partners green hydrogen as a new fuel source. All in all, we consider the many new initiatives as very important in Rockwool's green transition. From a business perspective, '22 was yet another extraordinary year for Rockwool's business driven by the global economy. In the first half of the year, we experienced a high demand for our insulation products. We saw record high volumes and -- that were produced and sold, right? The second half of the year was significantly more challenging, negatively affected by Russia's invasion of Ukraine by rising energy prices. And also there was inflation and the level of interest rates. These factors change the picture significantly and contributed to a decline in construction activity in many of our key markets. Despite these unpredictable macroeconomic conditions, we continue to invest in capacity expansion and in improving the efficiency of our factories. To be a bit more specific, this involves further automation, faster production lines and more efficient maintenance processes. We increased the growth and capacity in Toronto, Canada, and the Rockfon capacity in Cigacice in Poland. In France, we continued the preparations for our new factory in Soisson, where we hope to start construction soon. We also continue to develop and nurture our relationship with customers, including the difficult communication about the need to raise prices when we were hit by both quick and substantial cost increases. So a big pat on the back should be given to our sales and customer service teams. They have helped ensure that our so-called Net Promoter Score remained at a high level, despite these quite many challenges. For those of you who don't know that concept, the Net Promoter Score, I can tell you it's a widely used method for measuring different stakeholders' perception of a company based on simply one question. The question is how likely are you to recommend Rockwool to a friend or a colleague. In Rockwool, the score also remained high in '22, something that is very important for us, obviously. In '22, Rockwool achieved a record turnover of EUR 3,907 million, that's in Danish kroner just under DKK 29 billion. This is an increase of 27% from the year before primarily driven by a strong demand in the first half of the year, as indicated, and price increases throughout the year. Turnover increased significantly in almost all European and Asian markets, while it remained stable in North America. In the Insulation segment, our turnover amounted to EUR 3,034 million, that's about DKK 23 billion. That was an increase of 29% in local currencies. And all markets and businesses continued to contribute to solid growth primarily driven by higher sales prices. In the Systems segment, our turnover was EUR 873 million, so just under DKK 7 billion. That was an increase of 6% in local currencies. Rockfon and Rockpanel performed well, while sales at Grodan continued to be negatively impacted by lower sales in North America. However, the situation did improve in the fourth quarter. Despite continued high inflation in energy and commodity prices, we achieved an EBIT margin of 10.3% for last year as a whole. Adjusted for costs and provisions for emergency aid and reconstruction in Ukraine of EUR 13 million last year, the EBIT margin ended at 10.6% for the full year, a decrease of 2.4 percentage points from '21. So even if the profit margin ended up lower than we expected at the beginning of the year, we are very pleased that it remained in double digits, despite the significant inflation, especially in the third quarter. In the Insulation segment, the increases in sales prices did not fully offset the impact of inflation when looking at the cost of energy, production materials and logistics. EBIT amounted to EUR 312 million, with an EBIT margin of 9%. This represented a decrease from '21 of just over 1 percentage point. Adjusted for cost of emergency aid and reconstruction in Ukraine, the EBIT margin was 9.4%. We saw a similar story in the Systems segment. Here, we generated an EBIT of EUR 90 million with a margin of 10.3%. This was a decrease of almost 6 percentage points compared with '21. The lower margin in the Systems segment is primarily due to a negative product mix, combined with the significant inflationary pressure, which was not fully offset by higher sales prices. If we look at our shares, well, there was a decline in both share classes in '22. The Rockwool A share fell by 31%, and the Rockwool B share fell by 43%. These declines in '22, they should be compared with the decline of 13% in the benchmark index, STOXX Europe 600 Construction & Materials, and a 14% decline in NASDAQ OMXC25 in that index. Well, as you know, it has been our policy to pay out a stable dividend of at least 1/3 after tax. So we are pleased to propose a dividend of DKK 35 per share for the 2022 financial year, just as we did in '21. And there'll be a formal vote on this later on today on the agenda. So that brings me to the expectations for this year, '23. At the end of 2022, the global growth picture pointed towards a market turndown. This also applies to the European construction sector, where especially residential construction is expected to decline. Commercial construction is expected to perform moderately better, but is also expected to lose momentum in '23. Overall, we expect that the difficult macroeconomic conditions will continue throughout '23. Or to put it differently, we expect a decreasing demand, and we anticipate that the level of uncertainty will remain high. This is the basis on which we expect a decline in '23 in net revenue of up to 10% in local currencies. And we expect an EBIT margin of between 8% and 10%. On the positive side, the political environment for energy efficiency and building renovation is becoming increasingly favorable. We expect that the agenda for better energy efficiency in both Europe and North America will accelerate renovation rates in the medium term. And this will also create greater demand for our circular non-combustible stone wool. The European Parliament has recently approved a directive on energy performance of buildings, energy optimization of buildings compared with the Danish building regulations. So this is EU legislation that, for example, will require that all buildings in low, that is poor energy classes, are to be renovated. For buildings that are not attentive for residential use, this must be done by 2030, while the -- for residential properties, the deadline is 2023. This means that around 29% of European buildings are to be renovated. This is something like between 50 million and 60 million buildings. That's quite a lot, isn't it? This and other expected initiatives to improve energy efficiency in the building stock contribute to our strong belief in the future, which is why we continue to invest in more capacity to support Rockwool's long-term growth. We expect our investments this year to be in the range of EUR 400 million compared with EUR 328 million last year. So we have issued the annual report, but we've also published the remuneration report for 2022. It contains an overview of the remuneration for Rockwool's Board of Directors and executive management for '22, and we will present this report for an advisory vote later today. As you know, last year the remuneration for the Board of Directors was EUR 729,000, about DKK 5.5 million. The remuneration for the executive management were EUR 3,834,000 or around DKK 29 million. These amounts are in line with Rockwool's remuneration policy, which was approved at the AGM in 2020. The figures you can see here from the slide behind me, and you can find more details in the remuneration report on our website. Finally, and on behalf of the full Board of Directors, I'd like to end by thanking all of our employees and the entire management team for their great efforts and the good results they have achieved in a very challenging '22, which was characterized by a range of very special circumstances. My very last word had a big thank you go to you, our loyal shareholders. Thank you for your continued support and for your investment in the Rockwool Group. We really appreciate that. So thank you very much.

Thank you to the Chairman. And it's now possible to comment on this report or make questions, and I'm being told at ATP that Bjørn Hansen from the Danish Association of Shareholders wish to take the floor, but let's go on ATP, Mark Jessen. Please go ahead.

Thank you very much. I am Mark Jessen, and I represent ATP. Thank you to the Chairman for this excellent report. When one looks back on the past year's events in and around Rockwool, it's very hard to feel out of breath. First of all, the war in Ukraine, great price increases, ongoing investments in factories and the green change and a construction sector, which is losing pace, that's what I'm going to talk about today. You may ask how Rockwool has navigated through such stormy waters, and I would say that they have done so with a great sense of responsibility. First of all, there were a few words about the tragic war in Ukraine, which has been so important for Rockwool over the past year. In ATP, we still feel that it's hard for an outsider to decide what's the right thing to do for individual companies, for complexities are very different from company to company. Some companies have only a small presence, few assets and can, without any risk to people or operations, leave Russia. Other companies have a greater presence, a large number of assets, and the consequences of leaving Russia may be hard to assess, especially in the long term. Rockwool is an example of a company where the consequences will be very hard to assess in the long run. Media coverage over the past year has given the impression sometime that Rockwool has not taken the situation seriously. In our dialogue with the management, we get the opposite impression. We see a company which takes its responsibility very seriously indeed. On today's agenda, we have the establishment of the foundation for the reconstruction of Ukraine. I find it relevant that Rockwool as a leading supplier of building materials takes an active part in the reconstruction of Ukraine and thus supports the foundation. Now I'm going to look at Rockwool's business and the great price increases and increased investments, which we experienced in 2022. In the Insulation business, Rockwool took on its responsibility as a market leader. Rockwool went to the customers early on and explained that prices would rise, and these price increases would, albeit the increases in prices in general in the market, I'm sure that our customers would not applaud in the short term, especially not as Rockwool was one of the first companies to speak about this. But the operation worked out. And with a 2-digit EBIT increase, Rockwool showed a great feat of navigation in stormy waters. But now a question, if we look at the longer-term situation, we must say that the company has delivered a very stable EBIT margin, in line with expectations and with other companies' results. So my question is, is Rockwool satisfied with an EBIT margin around 13%? Or do you see the potential for a higher EBIT margin? And of course, I'm taking into account the present day difficulties. Now the energy crisis has also increased the demand for insulation in the long term. So here, too, Rockwool has a responsibility as a market leader. And once again, Rockwool invests in capacity increase and green changes. And some investors may find these priorities difficult to understand. But having said all this, I really find that Rockwool has understood its responsibility. There is, however, one area where ATP would like Rockwool to move its responsibility to a slightly higher level, and I'm talking about transparency for shareholders. This became very important during this year when the share price dropped to about half its former value. And in certain cases, the price of shares was directly correlated to the price of energy because investors had a hard time seeing how energy prices would affect the value of the company. And that is not a good position for a large listed company. And so I'd like to ask the company. Are there any reflections on how to help the share market -- the stock market understand the financial development better without harming our competitiveness? And now to end, I'd like to extend my best wishes for everybody in Rockwool during the coming year, a year which will probably have a great deal of uncertainty for all of us, but I'm sure that the management will make decisions, which will navigate us through stormy waters safely. Thank you.

Thank you. And Jens Birgersson will react to this question, and [ Klaus Johansen ] will be the next speaker.

Thank you for your questions, Mark. I hope the interpreters can understand my Swedish. Anyway, ATP has been talking, and they have had a dialogue with me for quite a long time. We meet every quarter, and I really appreciated the transparency and the advice that we get from ATP. And I really appreciate the dialogue that we have had in the past period. You came out very early. You understood the details of our decisions concerning Russia. You understand the way we acted. Thank you for that. When it comes to our EBIT margin, we've always -- I mean, we've never really set a maximum target, but we have set a bottom threshold, right, and that has worked. So we've grown about 5%, 6% a year in recent years, and investments have been about 10% of revenue in terms of our capacity. So as to benefit from the capital investors, we have had to work with these margins and goals. We have sustainability goal for the company, so that we could be a company with a sustainable growth. But looking to the future, I think it's quite clear that automation, productivity development, higher efficiency and, perhaps, also increased demand in the medium term, increased demand for insulation materials, well, in that light, you could probably argue that we could aim for a higher margin. But before we do that, we'd like to see a certain amount of stability because in recent years, the market has been going up and down. There has been war. There has been COVID and what have you. So it's going to be interesting to see what the situation is like in 2 or 3 years from now when if we have a more stable market in 2 or 3 years from now. But management, we are market leaders. We do not mind higher margins. That is for sure. But when we look back over the last few years, we can see what happened also in the last quarter. And these last quarters, there's been a huge increase in energy prices. But still, we have been able to deliver, and we are pleased that we have been able to perform reasonably well. And we'll have to see how energy prices have influenced Rockwool. You talk about energy prices as something bad for Rockwool, but we must bear in mind that higher energy prices are good for Rockwool because the more expensive the energy, well, the cheaper it is, relatively speaking, to insulate buildings. So the cash compensation that the government has given that was, I mean, EUR 700 billion, a huge amount that governments have released, right? So we must expect that energy prices will continue to be high. There was a question of transparency also, should we be more transparent? I think that if we have been more transparent in regard to what happened month by month, we would have created panic among shareholders. I think what we did was better, to sort of go quietly with price increases, and we did succeed in matching our price increases with the increase in energy prices. So we do feel we can be quite sort of comfortable that we will continue in this way. Are we continuing a high degree of transparency? Yes. We like dialogue, so that you understand us. But we are also very cautious because the thing is that we are the company in the industry that is leading in terms of stone wool. And whenever we talk about how we act, there's also a risk that we will reveal a lot about our benefits. There are no other stone wool suppliers that are as productive as we are, and we certainly do not want to tell our competitors anything about that. Thank you.

Thank you. And Klaus Jorgen Sorensen will have the floor. And Bjorn Hansen said that he would like to speak also. He'll speak after the representative of the Danish Shareholders' Association.

Thank you to the Chairman and management for a full report and a good review of the annual report. So as you heard, I'm Klaus Jorgen Sorensen. I represent the Danish Association of Shareholders. We cater for the interest of minor shareholders. We are working for a healthy share culture in Denmark. We have about 17,000 members of our association. It is very positive that Rockwool is holding a physical general meeting where shareholders can meet Board and management. Thank you. We hope you'll continue to do that. We participate in a number of general meetings this year. We focus on company's performance based on 3 important criteria: transparency, decency and skills. Rockwool provides a full transparent annual report and sustainability report. Rockwool is a solid company with very low debt and has delivered good results over the years, and you focus on climate challenges and the green transition and how Rockwool can contribute to solving these challenges. '22, you saw a record high turnover, particularly the second half of the year was challenging based on the increase in inflation, interest rates going up and certainly the war in Ukraine and Rockwool's activities in Russia. Rockwool has explained why the company cannot just withdraw from Russia and the dilemma of giving and know-how and values to Russian interests. Rockwool says that you comply with all international sanctions, and you've decided to stay in Russia as the least bad option. The Danish Association of Shareholders expect Rockwool to behave responsibly and not only focus on the bottom line. That is why we agreed it that at an extraordinary general meeting in August last year, Rockwool decided to offer assistance to Ukraine for the reconstruction of the country. The share price of the B share fell by 43% in '22 compared with a decline of 14% on the C25 Index and STOXX Europe 600 Construction & Material fell 13%. I have a couple of questions. Now do you make deliveries to Russian military directly or indirectly through third countries? How can you make sure that this is not happening? Second question. What are your considerations concerning a possible expansion of production in China based on your experience with Russia and possible international sanctions against China if the situation concerning Taiwan develops into a military conflict? Thank you. I wish Rockwool all the best going forward.

Thank you. Thomas Kahler will give the reply. And Bjørn Hansen, you'll have the floor afterwards.

Thank you very much. Thank you for your intervention and you've got questions that also give me the opportunity to explain this thing about Russia a bit more. Rockwool A/S or Rockwool Russia, none of us make supplies to the Russian military neither directly or through third countries. Let me also mention that stone wool products are harmless. Not classified as harmless and not classified as dual-use products. I mean they cannot be used for anything wrong, if you like. With the purpose of complying with sanctions and trade restrictions that exist at any given time, the Rockwool Group has established a full compliance program concerning sanctions and export controls. In addition to the requirements of different sanctions, Rockwool has introduced a number of measures itself to protect us against not complying with sanctions. We have special rules for sales to customers in a number of countries to reduce the risk that sales to these countries could be used to avoid sanctions. The rules have been designed on the basis of the best practice guidelines of the European Commission concerning due diligence and implementation of compliance programs. So that was the first question concerning Russia. The second question concerning China, I can be briefer there because we are a small player in the Chinese market. We have no current plans to expand our production there. And as I said previously, we will certainly comply with all applicable sanctions at all times. I hope that was enough as a reply to your question.

Thank you very much. Now Mr. Bjørn Hansen and if anybody else would like to take the floor, of course, you are most welcome.

Right. Thank you for giving me the floor. My name is Bjørn Hansen. I've participated in these meetings for many years. Thank you very much, Tom, for the explanations. And thank you to our Swedish CEO. I think his Swedish gets better and better. It's a pleasure to hear him. I love Swedish. Now we've heard a great deal about Ukraine and I think it's an excellent idea to expand the foundation. I'll pass it on to the people I represent in Denmark and abroad one's attitude to the company changes. I was against the idea originally, but Swedish diplomacy maybe good here. You have proven your abilities previously. I hope that this reconstruction foundation can really generate billions for the company, I hope so. And when you look at the winter mats, for instance, I think that's a brilliant little idea. Now Tom also talked about a directive which is to be implemented in Danish legislation. I'd like to hear a little bit about that. I don't know quite when it's going to happen, but I brought a leaflet folder. It's a folder from a Danish Swedish chain called XL-BYGG. It's probably also English capital and capital from a lot of other countries. And individual construction supply shops have been carrying Rockwool products until last year. And now they seem to be introducing other products as well. And I don't know why. This is taken up in Denmark, Sweden and Norway. Why don't you let them know how much you are giving to the reconstruction of Ukraine? I think that might change their perception of Rockwool, make it more possible. Now I'll leave the folder here. It's about new climate requirements in [indiscernible] I don't know how much of this is Danish, but Swedes and Norwegians and Fins are usually very good at this. Many years ago, when I proposed Spain as the market people say, "Oh, no, no, it's too hot, no possibilities there." But now I see that the countries with the warm climate use more and more insulation material, and we shouldn't leave all of that to French companies, but a producer of stone wool, Rockwool, like us should have good possibilities. But now my question. I don't think you've done very much about shipping, but we have recently participated in a couple of general meetings for shipping companies. And only yesterday, we heard about Maersk. Maersk are not always at the forefront of things, but other shipping companies are now insulating their ships. The Swedes were good one, but they aren't as big as they used to be. Unfortunately, people remember in the 1960s when I worked as a second engineer on the Pacific, we sailed from Hawaii to Los Angeles to Canada and experienced cold and heat. But the Swedes had worked out that it might be useful to insulate the partitions on board ships. Now we are going to change over to green and the methanol tanks are gigantic, and they need to be insulated. I think you ought to look at that and go down and talk to the European Commission and talk to them because they adopt a lot of things in the green area, and there are millions to be made there, especially when the market is on its way down as it is now, but I don't think you need to be affected because you have good old customers all over the place. And it was good to hear you, Tom, talk about Germany and France, where they haven't lost great market share. So it's a matter of timing. But now first and foremost and to end, Ukraine, you must keep trying. I don't know if you have any factories there at all, but it doesn't matter if the future may show that there's a potential for a factory for the reconstruction of Ukraine because it will be paid for by the EU and by the USA. Thank you.

Right. I'll hand you all this material, Thomas, so you can answer Mr. Hansen's questions and comments. Thank you.

Thank you for your comments -- thank you for your questions and comments. You didn't have many real questions, but I will try to address the most important topics beginning with the fact that it's important that people understand the good things we do. We are much criticized for staying in Russia, but we do good things -- try to do good things, as I mentioned in my report, and we can't really see how getting out of Russia would be very useful. But working actively in Ukraine, well, we hope that, that will be able to make a difference where it's needed. We do that because we believe it to be the right thing to do, and we hope that people will understand that. Winter mats, it's a brilliant product. We've had it in Denmark for many, many years, but we hope that this will help spread the knowledge about this wonderful product which has all sorts of potential for use, which we hadn't really realized. Now if I understand things and if I got the gist of what you said, more energy is now used to cool buildings than to heat them. So I used to say in gist that when we have finished energy renovating all the buildings in the cold countries, we can move on and do the same thing in the so-called warm countries and many other countries with the warm climates, actually subsidize electricity in order for people to be able to afford cooling their houses. We are present in Spain. We've had a large factory there for many years. We are very pleased with that, but there are many other countries where we can continue geographically growth. Now you asked about shipping. Shipping is actually a large business area for us. Thermal insulation is also a way of reducing the energy consumption of both ships and of course, Rockwool also has a number of other good qualities. It's fireproof which is useful aboard ships and I am quite sure that our products can also be used on tankers for ethanol tanks or other things. And the last thing you asked about, do we have a factory in Ukraine? We don't have such a factory yet. But of course, when you see images from Ukraine, there is no doubt at all that there will be a great need for construction materials in that country when the situation normalizes, which we hope it will do soon. So I think it's a very charming thought to set up production in Ukraine within a short time span. Until then, we must simply be pleased that we have factories in Poland, which is quite close to the Ukraine border. So we have a sales organization in Ukraine, and we have already, before the war, had an export of products into Ukraine. I hope I answered your questions and your comments. Thank you very much.

Thank you. I don't know if there are any other questions or comments concerning the report or the annual report. If not, I'll just go through the individual adoption process. First, we had the overall report if there are no questions. It has been -- you've taken note of it. Items 2 and 3. That was the presentation and the annual report and the discharge to management and Board. Any questions or comments concerning those items? Not the case. So they have been duly adopted. The annual report has been duly approved and the proposal for discharge has also been duly approved. Then there is the remuneration report. It is an advisory vote, we have on that. I think we do not need an actual vote. It's more sort of a matter of approval. You talked about the remuneration report, Thomas, in your report. Are there any questions or comments? Not the case. So that has also been duly approved. That brings us to Item 5, which is the approval of the Board fee for the coming period until the next AGM. And here, the proposal is unchanged. Fees, you can see the slide behind me, basically, DKK 400,000 for ordinary Board members, twice that for the Vice Chair and 3 times for the Chairman. And supplementary fees for membership of the Audit Committee and the Remuneration Committee. As you can see here, if you remember, the remuneration committee, you get DKK 100,000. If you are member of the Audit Committee, you get DKK 200,000. And if you're a Chairman of the Audit Committee, you get DKK 330,000. No questions, unchanged and duly approved. That brings us to the allocation of profits. As Thomas described, it's proposed to pay a dividend of DKK 35 per share of nominally DKK 10, corresponding to a total dividend payment of EUR 102 million. Are there any questions or comments concerning that? That is not the case. So this has already been duly approved. That brings us to Item 7, which is election of members for the Board. Let me start here by referring to the information in the annual report concerning the self-evaluation of the Board. Once a year, the Board carries out a general self-evaluation, focusing on the composition, competencies and results achieved. This evaluation is based on a questionnaire -- a detailed questionnaire. Every 3 years, you also have assistance from an external advisor, next time is in '24. As said in the annual report, the Board concluded on the basis of the latest evaluation that the Board's composition was adequate for the Board to carry out its assignments and for the long-term value creation. But there are a few proposals concerning changes to the Board because Carsten Bjerg has said that he's not running again, and there's one more candidate on the list. So I'm going to take you through the Board proposal of members for the Board. First, we nominate Thomas Kähler for reelection. We nominate Jørgen Tang-Jensen for reelection. Rebekka Glasser Herlofsen also for reelection. Carsten Kähler for reelection and Ilse Irene Henne for reelection. And there is a proposal for newly electing Jes Munk Hansen who's sitting right over here. As you've seen, Jes has a lot of experience. He's the CEO of TERMA Group, and he will add competencies in strategic management research and sales to the Board. As described in the convening notice, the Board expects to have the same Chairman, Thomas Kahler, and Jørgen Tang-Jensen will be the new Vice Chair. There are also 3 members elected by the employees on the Board. Connie Enghus Theisen. You can see here, Christian Westerberg and Berit Kjerulf. The convening notice has an appendix that describes all the backgrounds and jobs of the Board members. I refer you to the information concerning these other assignments that members have in other companies. I'm not going to read them all out here, but please refer to the convening notice. Are there any comments or questions concerning this proposal from the Board? That is not the case. I congratulate the people with reelection, especially Jes Munk Hansen, you are the newly elected member and the other members have been duly reelected. It brings us to the election of auditor. The proposal is to reelect PwC. Any questions or comments concerning that? Not the case. So it has been duly approved. Under 9, we have 2 topics. One is authorization to acquire treasury shares, own shares. We have that every year. It's not a big surprise, but this is a proposal for the Board to be authorized to purchase A or B shares with a total value -- nominal value of 10% of the company's share capital. And there's a limit here. The company cannot own more than 10%. And the price may not deviate by more than 10% from the price of the share at the stock exchange. Any questions or comments concerning this item? Not the case. So this has also been duly adopted. And that brings us to 9b. As Thomas mentioned in his presentation, he talked about using DKK 100 million extra to support the reconstruction of Ukraine. As mentioned, there was some money left over from the approved amount from last year. So this proposal also says that the DKK 180 million should go into the newly established foundation. In addition, the Board is proposing that the AGM should approve an additional DKK 100 million to the foundation for the reconstruction of Ukraine. It's still a condition that money spent in Ukraine cannot be used in areas that are not under the control of the Ukrainian government. Are there comments or questions? That is not the case. So this has been duly approved. That brings us to Item 10, that's any other business. You can have the floor if you want. Not the case. So Thomas, over to you to round off the AGM. And I'll take the brochure with me.

First of all, thank you for your ongoing support to our support activity in Ukraine. And also thank you very much for leading us so competently and so securely through yet one more AGM. Before closing this formal part of the meeting, I'd like, on behalf of the Board and myself, I'd like to thank Carsten Bjerg for his huge contribution during the past 12 years, which he has spent in Rockwool's Board. Thank you very much for your valuable contribution on the Board in committees and as Vice Chairman. We have a tradition whereby after the formal part of the AGM, we have present speaker, Rockwool's own [indiscernible] is responsible for corporate communication in our marketing team, and he is going to share part of his great insight into the core qualities of Rockwool and after Klaus' speech, there will be nothing else on today's program. So I'll ask you very much -- I'll thank you very much for being here. Thank you for your support to Rockwool. And now, Claus, over to you. Show us a wonderful world of Rockwool.

Thank you very much, Thomas. I should begin by saying that I have had quite a bad cold. So I may cough from time to time. And my voice isn't quite what it should be. Now back in 1986, I was a newly trained chemical engineer, my specialty was plastics, polymer chemistry. And my first job was in the Rockwool Group. I got that job by something of a coincidence. I happen to see an ad from a subsidiary company, which wanted a person to work with surface treatment. And I thought, well, of course, that's a good place to begin. But my plan was to work with plastic. So after 2 or 3 years with Rockwool, I would try to get a job in a great chemistry group, and that would be my career. So I hope to be able to explain why I changed the direction of my life from plastics to rock. I'll give you, I hope, an insight into the nature of Rockwool, where it comes from and what makes it unique. And yes, it is an energy-intensive process, but our products are not energy intensive, and I'd like to say a few words about how we contribute to the circular economy. And finally, I'll show you how our products contribute to the climate and energy change, which is so needed in the world today. We are a company built on stone and all our business areas -- all our main business areas are built on rock wool and on all the good qualities of stone wool. Now I'd like to be able to say that the Rockwool Group invented stone wool. Unfortunately, I can't say that. Stone wool has existed for millions and millions of years. Stone wool is actually produced by nature during volcanic eruptions. You can find stone wool on Hawaii nature. It's formed during, as I said, volcanic eruptions and you have a hot stream of lava, 1,200, 1,300, and 1,400 degrees. And air is blown through the lava. So stone wool is basically a natural material. And the way the Rockwool Group began producing stone wool in 1938 was actually a copy of what happens on Hawaii. Air was blown through hot lava, hot stone wool. And by doing that, fibers were produced. Later on, that process has been much improved by modern spinning machinery, which are technical wonders. I'd love to show you how that works. But that's the key to our technology. And of course, we need to protect it. So we can't share it. But it's a fascinating process. We have stone mass, 1,200 to 1,500 degrees, molten stone, and then hit some spinning wheels which spin very quickly and this centrifugal power to which the stone mass is subjected, drops are made and these drops are pulled into fibers and we create billions of fibers that way during that process. And because we master that technology better than anybody else, Rockwool Group is now by far the largest producer of stone wool in the world. By being based on stone, we have a large number of advantages. Stone has a very high melting temperature, so it can be used for insulation against cold. That's -- but also high temperatures, it can be used, our product, at temperatures around 650 degrees Centigrade and it protects against fire. Our products are very often used to protect concrete constructions and steel structures. It works very well against fire. You can see that if you visit a fire test institute, not because we test the product, but because our product is used to protect the institutes or buildings and structures and machinery. By being stone based and by having a process which allows us to change the direction of fibers and the contents of stone and so forth, we can produce products which are soft and are useful for the use with the wood in between the beams. So they can be a hard product, which can be used as a facade or roof coverings, and we have also a variation which can be used on the railway structures. So we have the whole range from soft to very hard. And that is what makes Rockwool's stone wool product unique in the world of insulation. There are no other products which cover the entire spectrum as we do. Yes, it competes with paper wool and glass wool and similar products when we talk about softer products. And yes, we can compete with plastic film products in the hard end of the spectrum. We are the only -- our products are only ones which have a high level of functionality across the board. And yes, we need energy to melt our stone mass. And yes, we need to reach 1,500 to 1,550 degrees Centigrade and that's a lot of heat and requires a lot of energy, and we are very conscious of the need to reduce our energy consumption as much as possible as the Chairman explained so eloquently. But one thing is to have an energy-intensive process, that doesn't mean that our products are energy-intensive. But one thing because our products don't contain very many stone fibers, a typical Rockwool insulation product is composed of 98% air, 1.9% fibers and less than 0.1% binder. The fibers have a very large surface area, which enables them to absorb and reflect infrared heat radiation and the fibers are good at keeping still the air, which is very good for insulation, which makes it such a good insulation products. So yes, it takes energy to create the fibers, but we are very good at saving them. And of course, the purpose of insulation is to save energy. And therefore, it's quite natural that our products have a positive energy footprint. But today, we also interested in CO2. And we also have a positive CO2 footprint. Our construction materials have a payback of more than 100 times, and that has been calculated in a very conservative way. We have taken into count that some insulation is used indoors where it doesn't insulate against heat or cold. We have different climate zones around the world. So we can say that we save at least 100 times the energy and the CO2 that's used to create our product. Actually, the products created in 2022, during their life time, if we set that at about 50 years, will save about 5 times the total CO2 emission from Denmark. And the figures are even more fantastic for a technical insulation product where we have a 1,000 time carbon payback and the 2020 products will save more than 1 billion tonnes of CO2 and that's a higher figure that we had not gone -- we've chosen not to write it in our native report. But then it's true. But now how does this compare to other green technologies? Here, we have some of them. If we compare to wind turbines, the largest ones in the very best of circumstances can have a payback of about 50 times. If we look at solar panels, solar panels placed in Portugal, at the optimum position, can have a payback of up to 25 times. This is not to say that we shouldn't invest in windmills and solar panels. And just to say that it makes a lot of sense to begin by reducing the energy consumption before we begin to establish new sources of energy. When you compare to other insulation products, we are quite competitive. Such a comparison, of course, depends on the factory, where was it produced, what are the transport times and what do we compete against and so forth. But here, we have 4 different types of outer walls calculated based on the official Danish government calculation system. For outer wall, same construction, same specifications and it's all based on the environmental calculation supplied by the producers themselves. And what we see here is that, well, insulation is insulation. And of course, there's no real difference. So even when we compare glass wool to celluloses or paper wool, we are absolutely competitive in this example. Now we can look at how Rockwool product contributes to circular economy. And the Chairman has already given a very detailed insight into what we do to improve our own process. So let me try and give you the bird's eye view here. We live in a world in which we have more and more new challenges. We have a climate challenge. We have air pollution challenges. We have waste challenges. We have microplastics as a challenge. And we have discharge and storage of internal chemicals as they're called PFAS or fire inhibitors, and we have problems with our groundwater because of pesticides and so on. And in such a world, obviously, it makes good sense to make demands on manufacturers. Also when it comes to the use of natural resources, there are more and more resources that are becoming scarce and we must take good care of that. So we have. In the circular economy, rule #1 is to see that what you do is tenable, it's durable. The Rockwool Group doesn't know how durable our products are because we've only produced them for 85 years, right? We have not yet seen a situation where the product is no longer there. So not quite good. We've seen it recently. At Kastrup Airport, Copenhagen, Hangar 4 is being renovated. It was built in 1958 and the Danish Technological Institute took samples. What you see are the technical results to have a 65-year-old product that is completely dry, has thermal properties of 35.4 mW/mK, which many modern products cannot reach. That is really incredible. This product was so good that you could easily reuse it. In this case, they were reused at Rockwool factory. So amazing. Obviously, you could say that in terms of business, it will be better if the products would only last for 10 years, and then we could sell more. But seen in a circular economy perspective, this is certainly preferable. Now just think about using raw materials, how we have to take care of the scarce resources. One good thing you can say about stone, it is not a scarce resource. And actually, you could argue that it's a renewable resource. Volcanic activity every year produces a 38,000 times more stone than we can use to make stone wool. There is no risk that we'll run out of stone. That's for sure. This does not mean that we shouldn't create waste. It doesn't mean that we shouldn't avoid queries that could be detrimental to our environment. So it's a good thing that we have fully recyclable products. Our production process makes it easier to take in whole products, melt them and make new products from them. We can do it again and again. And the quality is maintained. Not many of the types of insulation can do that. This is not just theory that we sometimes see when people say, "We are recyclable." This is something we actually do in practice. We have 19 countries where we have this service. We take back products and work actively to have an influence on authorities and regulators to ensure that when we demolish buildings so that materials are separated, so we can get our material back and reuse it. More than 1/3 of all the waste we have in landfills in Europe is waste from building construction and the bigger and bigger share in terms of volume is insulation materials. Let's say, you build a new building in Denmark today. We've been very good at making sure that things are done well, but actually half the volume in a new building is insulation. It means that when, at some point, that building has to be demolished, more than half the volume of the waste is insulation materials. That's why it's important where we have a process where we can reuse materials. Now finally, how can we assist in the necessary transition that we need in Europe and the world to ensure that we can stay at 1.5 to 2 degrees temperature increase? How can we make sure we convert our energy structure to enable that? Well, let me focus on buildings only. But I could also have done it for industries. I could focus on Europe, but I could also focus -- I'm going to focus on Europe. I could also have focused on any other continent. If you look at buildings and where is energy being spent in Europe, where the CO2 come from in Europe, 40% of all the energy we use in Europe is used in buildings at the end of the day. This is far more than what's being used in the industry, far more than what's being used for transport. Buildings are a big energy consumer in Europe. It's the same split we see in all industrialized countries. When you use energy, you emit CO2. 36% of all CO2 emissions in Europe come from buildings. So what's the energy in these buildings being used for? It is not our standby consumption. It is not our TV sets and stereos or PlayStations and similar. They're not the big energy consumers. The biggest energy consumer is heating followed by the heating of hard water. And both these areas we have good solutions of how you can reduce consumption considerably. In recent years, we've been very successful in ensuring that [ the signal ] has been understood politically. So all new buildings in Europe today have a high level of insulation as a starting point. But what does it look like with our existing buildings? We have 25 billion square meters of floor space of building stock in Europe. 75% is residential buildings and 25% is service buildings. That's shopping centers, it's shops, it's offices, what have you, hotels and other functions that we have. Nonresidential, right? If you look at single-family houses, 2/3 of them are -- I mean single-family houses are 2/3 of all houses. In Europe, we live in single-family houses mainly. And the building stock, if you believe the European Commission's expectations concerning demography and economic growth, this building stock will increase to about 30 billion square meters of floor space by 2050. And at the same time, it is thought that 90% of existing buildings will still be there in 2050. This leads to the conclusion that the rate of new construction will be about 1% per year the next 30 years. There will be fluctuation based on economic cycles, but that's the average new construction rate we can expect. And this is not like what we've seen in the last decades. But still, it is more or less constant, the construction of new buildings. It's a good thing that new buildings take -- use very little energy. Since 90% of those that we live in today will still be here in 2050, well, we are not going to be able to reduce the CO2 emissions unless you do something to the existing buildings. I know that some of us believe that, well, we've already insulated the old buildings, but that is really not what the figures show. The European building stock is old. 75% were built before 1990. And the reason why it's important to mention 1990 is that it wasn't until after 1990 that most countries had energy requirements concerning buildings. 75% of our buildings were built before that. We're also old-fashioned in terms of heating. We are not using district heating in Europe or heating pumps. 35% are used -- are heated by gas; 20%, that's wood and wood pellets, 20%. That's the way we heat our buildings in Europe today. And we have now energy classes going from A to G in all European countries. 30% of all buildings are in class F and G. To tell you what that means, I have taken the energy label from the biggest insulation market in Europe, which is France, where new buildings are class A, means less than 50 kilowatt hours per square meter for heating and lighting. For class F and G, they spend about 450 kilowatt hours per square meter per year and more. So this means that 30% of the French building stock uses 10x more energy per square meter per year than new buildings. Let me also make another calculation showing you what's the average insulation thickness in buildings in Europe. And if you do that, it's 35 millimeters, if you look at Rockwool insulation thicknesses. That's very little compared with the insulation thickness in new buildings. You could say the average in Europe, it's more than 240 millimeters thickness. I know in ceilings, these days is not 240, it's even more than that. So we have a building stock which is old, is not efficient, and it has not been insulated recently. How many buildings are renovated each year? A bit less than 1%. How many buildings must be renovated per year for us to succeed with our climate ambitions? More than 3%. So we are facing a challenge where we need to triple our renovation rate in Europe. And that's what being negotiated at present in the EU. The commission has put forward a proposal for a new directive -- a new building directive where, for the first time, demands are made to the member countries concerning concrete reductions. So far, it's been mostly a matter of support schemes. They've been up and down in a typically political fashion, but the commission proposal, which has been or will be strengthened by the European Parliament, indicates that all class F and G buildings, that's about 60 million buildings, should be renovated before 2030, and all buildings should reach at 0 level by 2050. But if we begin by just looking at F and G, well, point one, that is a very profitable investment with a fairly short payback time. The length of the payback period, well, that depends on energy prices, et cetera. But when we did our initial calculations, the oil price was $35 and that was profitable. So it's even more so now. By renovating just class F and G buildings, the CO2 emission of the EU can be reduced by 176 million tonnes of CO2, 4x the total CO2 emission of Denmark. We will reduce our gas import by 45%. We will create 1.8 million extra direct jobs in the construction industry. And the good thing about construction industry jobs is that it can't be exported to China. They will be located in the local area. Also, it will improve people's health for several reasons if we begin by the issue of particle pollution. Particle pollution today is the cause of more than 100,000 premature deaths in the European Union, and particle pollution is the reason why we all have catalysts on our cars, and it's the reason why older diesel cars are not allowed in many cities in Europe. But more than half by far of particle pollution comes from buildings, from heating, especially from the burning of tree and wood and wood pellets. Renovating our buildings would have a huge impact on health. Another thing is that more than 100 million Europeans live in buildings which are damp and hard to heat and often moldy, and the EU Commission estimates that, that results in additional health costs of about EUR 200 billion a year. So every time we invest EUR 1 in energy renovation of buildings, we save EUR 0.42 in hospital and health costs. Of course, it would also be very helpful for all the people today who have difficulties paying for energy and have difficulties paying to heat the buildings they live in. In 2015, it was estimated that about 50 million of Europeans couldn't afford to heat the building to live in. And that figure has not decreased since then. And last thing I'd like to underline is that well-insulated buildings are equal to batteries. For us who have freezers, well, you know that it doesn't matter if you have an outage of 6 to 8 hours, even a couple of days. Temperature will remain more or less constant for that time, and you can just wait for current to coming back. If you have a well-insulated building and a well-functioning supply system with the heat pumps, well, you can regulate heating in all buildings so that you heat when the capacity is low, when there's a low demand of current and you stop heating when there's a great demand. A consultant company called Ecofys has made some calculations and found out that, that would save Europe 57 gigawatt in the electricity production that would equal the entire energy production in the Netherlands and Austria and it would also save us a figure of about EUR 150 billion. Now that's -- this is what I chose to talk about today, but I could have gone on and I haven't talked about fire. I haven't talked about acoustics. I haven't talked about all the things we do in the industry or in the United States or in other countries. But I do hope that I have explained why I am so proud that I moved from plastics to stone. A couple of years ago, I participated in a conference in Austria. I was among the speakers, and I was asked what can you do personally -- what the best thing you personally can do to ensure a good future for us in Europe. And I'm quite proud to say that I'm doing it already working for Rockwool. Thank you. [Statements in English on this transcript were spoken by an interpreter present on the live call.]