SIG Group AG (SIGN) Earnings Call Transcript & Summary

Good afternoon, everybody. Good afternoon to those who join us virtually today. A warm welcome to you and literally a warm, if not hot welcome to everybody here in the room. It's great to have you here. It's great to spend time face-to-face. And for those that are with us here today, we had the pleasure to go with you through what we call the trade show to talk already more about our business and give some insights. And we appreciate that you stay with us also in this heat room here. We are in the shift power here in Zurich, which is a room that suits us well because we welcomed you in an area where we could feature our FMCG part. We featured our product, you could experience them. And now we are on the shop floor. Now we create value together at least virtually this afternoon. The world is facing great challenges. One of those challenges is to feed a growing world population. We have 8 billion people on our planet. And every year, another 18 million people going to be added to this number. Most of them going to be added in the emerging markets and in cities. At the same time, the world is fighting climate change. Many of our customers, if not all of them, have big pledges to decarbonize their value chains, and we must reduce carbon. We also have to reduce plastic and extract these challenges present an opportunity for packaging because packaging can be part of the solution. And SIG's packaging is part of the solution. SIGs packaging provides long shelf life products that are shelf stable at ambient temperature for up to 12 months, that prevents food waste. You avoid the need of a cool chain which lowers the CO2 footprint. What we hear more and more also in an inflationary environment, consumers are conscious about the best before date, they rather put something on stock that is longer -- has a longer shelf life. All our substrates, and you saw them, the ones that are here physically, we featured the spouted pouch, the bag-in-box in our carton business, which is 80% of what we sell are the lowest carbon choice substrates across their field of application. And also, we offer across all those substrates, the best before the best package to product ratio, which means what is the package intensity to pack a liter or whatever quantity of the product that our customers feel. Our solutions are designed for circularity. That includes the renewable content but also the recycling aspect. We want to be part of the solution, and we provide solutions -- sustainable solutions for the global liquid, food and beverage market. And we want to create value for our consumers, for our customers, for our employees and for our shareholders. But also, we want to create an impact on our environment. On the planet and to society, and we have this net positive ambition where we want to give more back than what we extract. And that's what we want to talk about here today. And we have put a full and hopefully fun agenda together for you. I said it before, we had already the opportunity to go through the trade show. We will also put it up on website later this week, so that those that weren't with us can have an impression too. We're going to talk about, and I'm going to kick it off with a slight look back. I want to talk about what happened since the IPO because it's the foundation of who we are today. Then you're going to hear from my colleague, Christoph who is our Senior Vice President, Commercial, how we create value for our customers in the solution selling that we do. In other words, how we go to market. Ian is then taking over and talking about how he with his technology team and his production team is delivering innovation on time, in full at the request of quality. And I'm super excited that we have here today the President, Scholle IPN, Ross Bushnell. He's going to be on stage to talk more about the 2 substrates, bag-in-box and spouted pouch, and how they create value for their customers. And even more important, how together we create more value for customers, for employees and for our shareholders. We will then break and have a Q&A before we after the coffee break, going to go into the regional facets of our business. That's where the point of impact is. You're going to hear it from us from a global perspective, but where we really make the difference, that's with the local team. You're going to hear from our regional presidents how they do create value for our customers. Before then Frank is going to wrap it up and translates the value for our customers into the value that we financially report, the value for our shareholders. We have then another Q&A later on. Now allow me to look back for a couple of minutes, delivering on our IPO promise. If you look at the financial performance of the business since the IPO, we have delivered within our midterm growth guidance of the 4% to 6%. And this against the backdrop of a world that went through a number of challenges. And I don't need to repeat and you went and live with them with us that there was the pandemic or the market currency crisis. But we have delivered our growth, and we have delivered the growth last year with 6.6% and delivered a record margin of 27.7%. And that, I think, is the characteristic of the financial profile, the strong recurring cash flows the best-in-class margins and above market growth. And that's what we are committed to continue to deliver. And that's how we want to show today how we're going to deliver on that. Allow me to look back in terms of how we expanded the business. We expanded the business along 3 dimensions, along geographies, along categories and along channels. Some of the highlights and many of them you have heard before, but I think putting them together gives you the full picture. From a geographic perspective, we talked at IPO about moving into new territories. We moved into the neighboring countries to Brazil. We moved into Japan. We moved into India. You're going to hear a lot about India. India is a super exciting opportunity for us and to put a plant into India is top on our wish list. We also acquired the remaining 50% of our joint venture in the Middle East and have now full access to the market, and it's an exciting market, as you're going to hear from Abdelghany later today. We put a new plant into China for Asia Pacific that was done during the [indiscernible] came on stream on time in full, delivered through the Chinese team without the help of the global team that couldn't fly in, and also, we have currently a plant under construction in Mexico, which come onstream early next year. On the category side, we ventured into plant based, which has always been an attractive category for us in the U.S. And now more and more important also in Europe, which is from a growth rate perspective in a generally rather not growing market like Europe, a super attractive opportunity. And we entered into water, and we expanded the reach of the beverage carton into categories where the beverage carton originally wasn't established. We also added with the acquisition of Evergreen Asia the chilled segment to our business, which we deemed to be an attractive category in Asia. And that's the aspiration where we want to grow it, and we're going to talk about and hear from Lidong about that. And last but definitely not least, we added Scholle IPN to the family with the great substrates that you saw before with the bag-in-box and the spouted pouch, but also very importantly, with the technical capabilities. And I hope we're going to be able to bring that across today why we as a team are so excited to have them embolden their capabilities and how together we can grow faster by moving their substrates onto the emerging markets platform that we built. All that growth, all this expansion was fueled by the innovation, innovation that really goes along 3 dimensions. It goes along the dimension of sustainability, it goes along the dimension of consumer benefits, better pouring capabilities, for example, it goes along the dimension of deliver best total cost of ownership to our customers because low waste rate, high efficiency that translates into lower total cost of ownership. We talked about the aluminum free. And I think folks the ones here in the room that ventures through the trade show, but also the ones that follow us from home or office have heard about that. We have established a standard in the industry by bringing aluminium free structures to the market. Years back to 2010, we have brought the first structure, by now we have the fourth generation structure out there. We are able to mimic the barrier properties of the aluminum foil by 100%. So we can literally pack what we can pack in an allo pack or a pack that contains Alu-foil also in a Alu-free one, which is super important. And now we're going to hear in a minute what the next milestone is. We deliver paper straws in order to cater the demand of our customers, driven by regulatory changes. We also -- you remember that we launched combismile, and we hear from Lidong how that has become a relevant part of the business in Asia. We brought further differentiation. I want to just point out 1 combivita that we launched late last year, which also comes with the new machine platform where we set again an industrial standard with 80,000 packs to our output liter packs. And we complemented that with our digital offering where we create value for customers by helping them to drive overall equipment effectiveness up. Now all in all, I dare to say SIG is stronger than ever. And you're going to hear from us today about the combined business than large platform that we represent. And I think as such, we're going to create value for our consumers, our customers, employees, shareholders and the environment as this is deeply embedded in our strategy, the whole ESG ambition that we have is integral part of our business, and I hope I'm going to bring this across today. Now the platform that SIG represents today I think it's unique in its form and shape because what we can offer to the food and beverage industry is a unique offering, and it comes with capabilities, which are relevant for all 3 substrates. 80% of what we sell is the aseptic carton, but we have this exciting opportunity to drive bag-in-box and spout-to-pouch further. Now if you look at this combined and a large platform, we are a global leader. We are in a global leadership position and we deliver solutions to resilient and growing end markets. That's what we define as the attractive industry that we operate in and the industry structure we enjoy and also the end markets we cater to. We have, on the other hand, a winning business model, and I want to talk about -- more about that in a minute, but part of that is definitely the sustainability feature is also our multifaceted growth strategy along geographies, categories and channels. And we're going to hear more about the other aspects of it. And all that translates into the strong financial profile, which is altogether footed on our ESG ambition of becoming net positive as a business and delivered through the team, you're going to see over the course of today here on stage, a team that is diverse and global as our markets and I'm very excited for you to have the chance to hear to my colleagues. Now allow me to elaborate on one of the other aspects of this presentation. And the first point I want to make is when we do the global leadership. You see we are the #1 in bag-in-box. We are a strong #2 in aseptic carton as well as spout-to-pouch. And this comes with capabilities that we have that are kind of integral of all those solutions. We have best-in-class ESG profile, and I'm going to talk about that, but we also have this proprietary and fast, flexible filling technology. You know the output of our machine, the latest one 18,000 per hour. I think we have a true opportunity to drive the output of spout-to-pouch and bag-in-box up and set a new industrial standard. We have a well-established network of field service engineers have these capabilities on the digital front. And we do that for our own equipment that is in the market. We can do the very same for the spouted pouch lines as well as for the bag-in-box filling machines. And I think that's what we do as an industry partner that also has the capability to not only sell empty containers, but to develop, codevelop with the customers what is put into the container. So the product. That's why you're often going to hear us talking about product, but we mean what customers put into our own products. And that's the FMCG approach that we have. That's why we have these tax centers, these capabilities to codevelop. Now let me briefly touch on the attractive end markets. I mean fundamentally, what drives demand for our end markets is population growth, disposable income growth. But what kind of amplifies that is the need for sustainable solutions, is the need for food safety, for health and quality. You see the global food market is expected to grow, give or take 3%. And you see that our own aseptic carton market has a faster growth rate for the reasons that we cater to the sustainability demand for the reason that we cater to the quality and food safety demand. And if you look at bag-in-box and spouted pouch, they are similar to faster growth rate. And if you then look to the emerging markets, and remember, over the last 10 years, we have changed our footprint from being a European-centric, 2008, 77% of revenues in Europe. So a truly global business where today 66%, give or take, come from outside Europe. That's where we're positioned. We are positioned in this faster-growing market, and we have the ability to continue to outgrow the market by delivering share gains. I think, if we move on to the second part, the winning business model and sustainability is a key feature in there. We are the lowest carbon footprint solution. Here is an example for liquid dairy. The same is true for noncarbonated juice and food products. Let me show you on our road map, how we want to evolve that. And we had a number of discussions already in alu-free. But we believe that the future of the beverage carton is going to be alu-free I said before, we are, as the only one today able to alu-free solutions that provide the barrier properties that one would have in a barrier in a pack with alu-foil. But what we want to achieve is cost parity because today, those packs still come with a long cost. And that is not good enough. That is not good enough to make an impact because we feed in this entry level of process and packaged food, affordability is an issue. And if you want to make an impact in terms of CO2 reduction, we need to be able to do that at cost parity. And we have a line of sight. And it is also the reason how we started to talk to Scholle IPN because that's what their core competencies, barrier films. And this is what we need in order to replace the alu-foil. And you see here at the ambition. We have talked about the left-hand side of the chart already. We have brought pack without alu-foil. We have a pack that is 100% from renewable sources and the polymers come from forestry ways, so 100% linked to the forest. So a packed 100% linked to the forest. We now have brought EVO, which comes at the same barrier qualities. And the next step is to drive that in the near term to cost parity. And if you think beyond what is the future of the beverage carton is to increase the fiber content. Ideally, at one point, we get into the paper recycling stream. So for us, there is clearly a vision of the perfect package. The perfect package removes carbon from the atmosphere because it comes from the forest, which is a carbon thing. The perfect package is fully recyclable and this all over the world. There is infrastructure available and that is true for paper. And this is why we want to drive it into this direction. Allow me to talk briefly about the multifaceted growth strategy. We talked about geography expansion, category expansion, channel expansion. And there, truly, we have plenty of opportunities, both for the aseptic carton, but also the additional substrates. The aseptic carton, we made a presence now in markets like India, like the neighboring markets to Brazil, like Japan. These are markets where we have ample room to grow. And I think you're going to hear from my regional colleagues how they intend to do so. But we also have this opportunity to bring the substrates of bag-in-box and spouted pouch to the emerging markets platform that we built. And what is an emerging markets platform, it's customer access, it's local presence, it's our tech centers in the regions in China and Middle East and so on and so forth, where we can codevelop and that's what we can do for all substrates that we offer. It's the category expansion where we venture into new categories. Remember, we co-created an entire category of ambient yogurt with fruit pieces because you're the only one that has this capability to fill that. And on the channel expansion, Food service is a fantastic opportunity. Also in the emerging markets. People want to take their family out for dinner with rising income. And I think from their perspective, also in the mature market, we call labor is short or costly. There is a growth in foodservice. And also, the channel includes the e-commerce opportunity where aseptic is the solution for it because you don't need a cold chain. Our winning business model is also based on the system business approach. And I think that's the common denominator of our business. We have machine, we have consumable and they have service. And if you look at the split of revenue of SIG carton with the new combined business, it's almost the same. It's about 15% to 85% between consumables and machines. And we are fully integrated from a value chain perspective, Scholle has capabilities that are from the spout to the film to the machine, to the printing, similar to our solution. And we are deeply embedded in the customers' value chain that leads to this long-term customer relationship. And coincidently, in both businesses, it is the last 30 years with the top 10 account. Now you're going to hear more of that also from Christoph later on. But I want to make the point that these characteristics of SIG, have the platform we built translated historically, and I'm convinced will going forward into best-in-class financials. We will continue to deliver above market growth. We believe there is an acceleration opportunity of growth, and that's why we're confident to guide for the after half of the [ 4% to 6% or 5% to 6% ] We talked about that before. We also believe there is a continued opportunity for margin expansion, not only in the acquired business and not only due to synergies but also in our established core business, there is a margin expansion of, give or take, 100 bps plus that we can deliver on and work on by the midterm. Now all of that is rooted in our ESG ambition and growing our business means we have an opportunity to increase the positive impact. You have heard about our way beyond good before that's our net positive ambition that we summarize along climate positive, forest positive, resource positive and food positive. Now all of these positives will probably allow us to speak to you on an entire Capital Markets Day. So I keep it short here. But there is plenty of resource on our website, in our CSR report. We are very happy to go into further engagements with our CSR team on that to talk about that because it's something we truly believe we have a lot to offer. And you see also that is acknowledged by EcoVadis, by MSCI and other sustainably rating agencies. But I mean, they all look at it through their own lens, and we like to engage with our customers and our investors in dialogues because there's much more that we can offer around that, and that's what is summarized in this picture here. So allow me maybe to double-click on one aspect, though, is for us positive because it's truly one of our most important raw material source of where our cartons originate from. And already today, 100% of what we supply is FSC-certified, comes from Forest Stewardship Council approved sources. So sustainable forestry management. And for us, it is important to work with associations like the FSC organization, which is a multi-stakeholder organization. It represents the growers. It represents people like us, but also it represents the NGOs, the public eye. And they give the standards. And by that, they also ensure a higher standard. We work with university. We work with ASI and the aluminium side. We work with other standard setters there in order to continuously push further to the next level. Now I want to share with you what Kim Carstensen, the Director International of FSC thinks about SIG because I think he appreciates to having us a partner to drive the cause of sustainable forestry management. But please hear it from Kim.

I'm giving you this message today because I really care about the world's forest. I love forest because they are so nice places to be. You can do a forest walk, you can be in the forest and you can really enjoy life. But even more than that, they are so important for humanity, hundreds of millions of indigenous people who live in the worlds forest. And they are also important for wild life for species of animals and plants the biodiversity that we all depend on. Plus, not least also, they are very, very important for the world's climate. Forests store enormous amounts of carbon. And without that carbon in the forest, it will be impossible to combat climate change. So we need to protect the workforce. Companies can do a great effort to actually help the protection. What they can do is that they can make sure that they source responsibly from the world's forest. The forest materials that they buy, the work the paper can be responsibly sourced and that can be proven by means of [indiscernible] FSC certified. SIG is a good example of going way beyond good. They have led the interest in terms of getting FSC certification of their products. Already in 2009, they had worldwide chain of custody certification. And since 2021, they have 100% of their liquid packaging material FSC certified. This is impressive and I think a very good example for the rest of the industry and for everybody who works with SIG.

And the really exciting part is that by growing the business, we increased the positive impact. And that has multiple advantages. It also gives our people a purpose. It makes SIG place where you can truly have a positive contribution to some of the world's bigger problems. And I think that's also leading into the last building block of our investment case, the management team, the reason why many of us are with the company. I think it's a company that we truly enjoy to be at the forefront of setting standards in an industry and solving some of the problems that humanity faces that our planet faces. That is obviously something that keeps people going far beyond this team that you see on the page here. And it's the team far beyond this page that makes us great, and that's what we always saw we remember. But here on the team, you see a diverse global team, a team that stands for the markets where we operate. And I hope you're going to see across the day and maybe you experienced already that it's fun to work with these guys, and that it's fun to work together that we have a mission, and the mission is to create value, create value for our consumers, create value for the customer that we work with, create value for the environment, create value for our colleagues and employees and create value ultimately also for our shareholders a function of that. And we do that along the lines of growing the business along geographies, along categories, along channels with our innovative solutions and always with sustainability deep in our heart. With this, I will conclude the opening speech for today. And I think you're going to hear much more how we deliver this value from my colleagues over the course of the later session today. But before we go into that, before we listen to Christoph, I would like to introduce to you, Francisco, I wasn't able to remember all his credentials. Francisco is a former executive of Coca-Cola. He was there the Chief Growth Officer and he also -- he was a senior adviser to the CEO. And since 2020, he's an adviser to be, he is the Board member and an adviser to various companies, primarily start-ups. And he has not only excellent knowledge as a function of his career of the beverage market but also of the trends of tomorrow. And I believe it gives you an opportunity to see from him and hear from him, he sees those opportunities. And I think it explains also why we are excited and how we're going to create value against the backdrop of these trends. He is normally based in Atlanta. Francisco, good to see you and see you here on screen. But I think right now, you, I believe, are in New York. So thank you so much for being with us. We appreciate despite your busy schedule that you take the time for us today. And with this, I hand it over to you.

Thank you, Samuel. It is a pleasure to be here. As you mentioned, I spent 3 decades with Coke and in the next 9 minutes, I will share a personal perspective on food and beverage. And of course, the opportunities that I believe this represents for a company like SIG. So maybe we can move to the next slide. Let me spend 2 minutes on the looming question about the inflation and recession. That is the elephant in the room. Progress and economic growth do not happen as a straight line. There are natural fluctuations on a long-term trend that is unequivocally upward. And economic deceleration is most probably upcoming. Having said that, the state of companies and household balance sheet and the strength of the financial system are clearly better than in previous recessions. Central banks are taking measures to rebuild their toolkit to acting such scenarios, and this is clearly shifting how investments are being evaluated and prioritized. In this scenario, food and beverage categories are significantly more written. It is much easier to postpone updating your car, your phone or your kitchen than postponing a meal. Consumers may trade down, they may reduce portions of frequency of premium choices. But in the added inventory, consumers will do everything possible to keep up their daily satisfaction to fill their stomach and energize their bodies. You may see the middle ground of undifferentiated brands squeezed, but the appetite for innovation and the need to hit key price points by adjusting packaging architecture will be up for demand by all categories and players as they try to keep consumer rituals in effect. Consumers are back to a new normal where commuting, traveling, outing, convenience are back on the game. A market where you complement home packages with solutions to support on-the-go and on-premise is healthier both in terms of brand building and margins. Leading players in large and emerging food and beverage categories will be seeking for partners that can help them connect with consumer needs in multiple occasions in an effective and efficient way. Let's go to the next slide, please. I will allude to 4 mega trends that are behind this mission. First, a growing emerging middle class has been demanding for protein for their diet for the past decade. And that trend is not going to stop in the next 20 years. In emerging countries, animal protein, including dairy, will double again in the next 2 decades as they continue to close the gap with developed countries per capita protein intake. Plant protein will continue to bring innovation to this trend, both in the form of sophisticated solutions for highly environmentally conscious income consumer as well as affordable, efficient solutions for the lower purchasing power consumers. Established brands and emerging players will continue to innovate in this space fueling past growth. This type of problems will demand packaging solutions that enable them to protect the nutrients at the same time that facilitates distribution by being in-shelf stable. Let's move to the next slide, please. Players will continue to innovate blurring categories while satisfying consumer nutritional needs in new and better ways. This is the second megatrend. Science has educated consumers to seek nutritious energy functional beverages more than ever. Brands will get sharper at educating and engaging consumers on the benefits of new ingredients, using ultrafiltration for fabric elements from dairy and plan to reduce or even eliminate undesired ingredients like fat or lactose while increasing and improving those ingredients that have purposeful benefits like protein. This innovation game will continue to expand the demand for filling and packaging technologies that relevantly differentiate brands helping them to create engaging credentials and solutions for consumers. Incumbent categories will have to reengage consumers as for example, ready-to-drink tea is looking to reset their sales after years of struggle. Packaging is an important element on this reinvention. Food and beverage foundries will continue to blur as players offer easier ways to consume fiber, proteins, mineral, enzymes and other important dietary elements. This is a dynamic space where cross-category knowledge will enable partnerships to innovate and shape the future of beverage solutions. Let's move to the next slide, please. The third megatrend is about experience, Millennials care for experiences, they do not care about products or stuff. They do not need to own the space. They much rather get experiences. As consumers return to traveling, commuting the quick service restaurant and the institutional eating and drinking industry is getting back on its speed. Now they are forced to offer a variety of packages as they themselves are becoming an omnichannel or others can come from different digital services, not only in the consumer across the cashier. And delivery is not only happening by a consumer taking a trade in the quick service restaurant, but it is happening at a pickup window or through the delivery partners. Packaging solutions like bag-in-box remain efficient for this channel while adding solutions for all the needs become the relevant ability for preferred partners. The Indigo space will continue to offer outstanding possibilities. Vending machines can offer better products than ever within our [ reach ] and desire. The same way that Japan exploded to over 1 million vending machines in the 1990s. Costa coffee vending machines will expand service hours while reducing the labor needed to serve consumers. Next slide, please. The fourth megatrend is undeniably sustainability. It is not only happening with opinion leaders and governmental authorities. The consumer has grown committed to be part of a solution. They are prone to act supporting the brands that are doing the right things and penalizing the ones that are part of the problem. Leading companies are making hard factual commitments to change their value chain, making them much more sustainable, fast-moving consumer goods are being demanded to influence at the whole value chain to ensure that their whole footprint becomes positive for environmental society. Partners leading in this phase will have a seat at the table, building strategic value beyond transactional value. Strong credentials in sustainability will enable stronger ties with clients opening opportunities for deeper partnerships with brands. Please let's put the final slide. In summary, there are future backed capabilities that enable successful transformation to capture a lion's share of the growth opportunity in food and beverage packaging. It starts with efficiency and productivity, no questions, but requires highest level of engagement on innovation and sustainability. Having 3 decades of relationships with clients is a great asset, adding to this, a strong sustainability and innovation agenda, enables relations to move from transactional to strategic from being a commodity to being a partner, a strategic partner. If I now comment on 3 additional characteristics to watch. In these environments, cash generating business models with healthy margins to make a difference. It is much better to have cash in hand than a promise of an uncertain great vision. Second one, the right exposure is important. Western economies for sure, but growth in countries to play a role in Western value chains and non-conflicted categories in those super large growth, high-growth economies. Finally, leadership. Leadership does make a difference, a big difference. Good leadership never waste a good crisis. In front of a crisis, a lot of people freeze or fly, I like the ones that fight. As other players become shy about the opportunities and conservative about growth, the ones that double down on the right capabilities expand their advantage and emerging stronger. I hope you have a productive day. I could have talked an hour about this subject, but I think this should give you an idea of how we think about it. Samuel?

Francisco, thank you so much for your insights. Very helpful, gives a broader perspective on the industry. We really appreciate the time you spent with us, and have a good day in New York. Thanks a lot. And with this, I would like to open up the next part and ask my colleague, Christoph on stage. He's going to talk about how we work with customers, our go-to-market strategy. and then he will hand it over to Ian, who talks about how, based on Christoph's input, he's going to deliver innovation to the market. So taking away, Christoph.

Thank you very much, Samuel. I'm Christoph Wegener, Senior Vice President, Commercial at SIG. It's a pleasure for me to be here with you. Samuel talked about our multifaceted growth strategy and the key enablers of a system offering, consumer-centric innovation and solution selling. I will build on that and talk a little bit more about how this all comes together in our go-to-market strategy. Our go-to-market aims at delivering a perfect package to our customers, and that perfect package consists of multiple elements. On the one hand, as I said, a system offering. So packaging solutions, filling technology and technical services. And each one of these elements deliver unique capabilities to our customers whether that is our unrivaled size flexibility in our packaging, whether that is our unique capability to fill particulates with our filling technology, whether that is leading total cost of ownership and operation or whether it is our leading sustainability performance of our solutions. And all of these elements, the system offering as well as the best-in-class capabilities and the sustainability leadership position are also embedded in our new and extended portfolio, the spouted pouch as well as the bag-in-box. Through consumer-centric innovation, we ensure that we maintain a premium positioning of our packaging systems in the market. And I'll talk a little bit about that in a minute. If we can go on that slide back, please because it doesn't end there. We not only just want to sell packaging systems. We want to help our customers to turn them into a commercial success. And that starts with supporting them in their product innovation, it continues with advising them on the right package for their respective product for the consumer or the channel that they target. And it finally ends in helping them to design smart production lines for their smart factories. But I will also expand on that in a minute. So as I said, consumer-centric innovation is key for us to maintain a premium positioning in the market. But why consumer-centric. In reality, we are a B2B2C company. Our packaging ends up in the hands of consumers. And that is why we put consumers at the start of our innovation process. Obviously, we monitor consumer trends like premiumization, sustainability and convenience. But we also have to translate those into innovative packaging formats. And we do this through a structured iterated process that starts with ethnographic research. Ethnographic research is basically all about observing consumers how they interact with packaging, because packaging tends to be a low involvement product. Consumers don't really think about it. They just use it. That is why we believe by watching them how they interact throughout the consumption cycle, we learn what really drives, for example, convenience. So we watch them how they pick the pack from the shelf, how they hold it, how they open it, how they drink from it, how they close it and how they dispose it. And from that, we take clues that we can translate into design requirements that deliver convenience to consumers. Now based on these design requirements, we develop prototypes that we put into functional testing. And functional testing is quantitative. It's all about how fast can the consumer open the pack? How fast can you close it? Can you open with his left hand with his right hand as we learned at the pouch booth. And that is really then where we have a quantitative assessment and where we ask the customer, the consumer to rank the satisfaction of their experience. And eventually, this iterative process leads to a packaging prototype that we believe delivers convenience to consumers. That is translated into requirement specifications that then Ian and the R&D team engineers into a packaging system. But as I said, it's not just about delivering innovative packaging to consumers and to our customers. It's also about helping them to turn those into a commercial success. And commercial success really starts with a great product, a great product that our customers fill in our packs. And we want to help our customers to develop these great products as a strategic partner. That is why we have invested into tech centers, 4 globally, where we can work with our customers to co-create innovative recipes. We can help them to pilot them on processing equipment, to pilot them on our filling lines, how to fill it into our packs, and some of our tech centers are even food certified, which means we can do small batch productions and launch them into the market for tests. This way, we really position ourselves as an innovation partner to our customers. We help them to reduce time to market and cut their innovation cycle. While the tech centers are the asset base, if you want, the program around this is what we call the [indiscernible]. That is a structural process where we really help our customers to incubate product ideas and to bring them to market fast. We also availed this program to start-ups. And in the last 2 years, we've actually helped start-ups to launch very innovative product concepts into the market. Some examples you see here on the right-hand side. And with that, really are part of the innovation of the FMCG industry. But that's the product. Obviously, we also consult and advise our customers on the right packaging. And as we learned in the trade show today, right packaging can differ. So depending on the consumer, depending on the channel or the consumption occasion that our customers target with their product, we can offer them the right package. So for example, if you have a baby food puree that you want to pack in small sizes and you target kids and then on-the-go occasion the pouch is the right package. It offers the right opening, the right product evacuation and it offers the right size. If we think about -- or if our customer wants to target a family in home with plant-based in 1 liter, carton is probably the right choice. And if we think about food service and our customers want to expand into food service, then bag-in-box is the right package of choice. So with the broadened offering of packaging, we can really help our customers now to tap into multiple growth opportunities, consumers, occasions as well as channels. But all of our offerings have won in common. They're system-based. They are flexible. They deliver leading total cost of ownership and leading sustainability performance. Obviously, it doesn't stop with a perfect pack or the perfect product. We also have to industrialize ideas. And for that, of course, our core deliverable is filling systems into the factories of our customers, filling systems for carton, for bag-in-the-box as well as pouch. The technical service, whether that's a field service engineer that physically goes there and ensures the equipment runs or whether that is remotely through our reliability centers. But we also want to punch above our weight. And if customers want to implement new greenfield projects or end-to-end brownfield expansions. For that, we have build an ecosystem of industry partners where we work with ingredient suppliers that supply ingredients for new products. We work with processing equipment suppliers like GEA, Cronus, SPX that supply the processing and we work with software providers like ProLite that offer manufacturing execution systems, which is the software backbone of the modern factory. So we really bring together all of these elements in a best-of-breed approach and can help our customers to implement full end-to-end factories, greenfield and brownfield. You will hear later more about from our regions, how we execute that. You will hear great examples of product innovation. You will hear examples of how we have implemented end-to-end greenfield as well as brownfield projects. So I'll leave that to the regions. But before that, I want to hand over to Ian, who will expand more on the innovation theme.

Thank you, Christoph. Good afternoon, everyone. I'm Ian Wood, the Chief Technology Officer, and it's a pleasure to have the opportunity to talk to you about the work of my team this afternoon. You've just heard from Christoph, about how his marketing team identifies insights and needs from consumers and direct customers in our attractive end markets. And I'm going to talk to you about how we innovate and develop new products to meet those needs and ensure also that our manufacturing footprint is positioned to deliver those products to the customers on time. I'm also going to show you how our newly enlarged business combination is only going to accelerate the delivery of our innovation pipeline and position us even better to grow and deliver continuous cost productivity. But let me start with innovation. Christoph introduced this wheel on the left, talking about the different elements of our system. And my R&D team works hand-in-hand with Christoph's product managers to develop the system to make sure that we continue to deliver our unique technology advantages that Christoph mentioned. Now we spend about 3% of our revenue on R&D, split between our engineering teams in Europe, China and now the U.S.A. And that spend is split fairly equally in 3 key areas: increasing sustainability, improving package differentiation and convenience and improving equipment performance to deliver on our lowest total cost of ownership promise. Starting with sustainability. That's all about reducing CO2 footprint, improving the recyclability of our packaging materials and increasing the amount of renewable content. Now we're proud that our packaging solutions are already the best in these aspects across their different applications, but we want to be even better. The key to being better is to be able to replace the aluminum layer in our packaging material that's key to reducing the CO2 footprint. And the technical challenge here is to find the material or materials and be able to process them that can deliver the same great barrier performance, so barrier to oxygen transmission, water vapor, light, those barrier features that give our products the 1-year shelf life at ambient conditions, find a material that delivers the same great properties at or better cost than aluminum. And here, we have some recent innovations such as our signature [ EvoPac ] which is the first aseptic carton in the world. It's aluminum-free with full barrier properties, same great shelf life applicable to all our formats and all product categories. We also have progress in moving towards mono-materials, and mono-materials are important because they improve the recyclability of packaging. And here, we have some innovations with the RecShield, polymer film applied to our pouches from our colleagues from Scholle IPN. Now moving to package convenience and differentiation. What's important here is new shapes, new closures and the ability to fill the widest variety of products so that our customers can develop their categories differentiate their products on their shelf and that consumers can have the perfect experience, whether that be on-the-go, at home or in a food service outlet. Recent innovations here include our combismile package. My colleague, Lidong will later talk about how we're really winning in the market in China with that package, also our new Vita package and many exciting different shaped pouches. Turning lastly to equipment performance and total cost of ownership. What's important to our customers here is increasing machine speed, more packs filled per hour. Improving performance, more reliability, more uptime, more overall equipment effectiveness and ease of use for our customers' operators. And here, we've been working hard to deliver our fourth generation machine launched late last year, which I'm proud to say, is the fastest 1-liter aseptic carton machine on the market. Equally, some of our latest pouch machines are also increasing speed and leading to lower total cost of ownership for our pouch customers. Now one key lever in improving total cost of ownership for our customers is machine performance, uptime, overall equipment effectiveness and a key initiative for us to improve that is our digital service initiative. Now about 80% of our carton volume is processed on fillers which are connected, which allows us to collect data on the performance of the filler number of packs produced but also the asset condition. And we've been working with our partner, GE Digital, to leverage that data connectivity with 2 software applications, asset performance management and field service management. These tools allow us to practice preventative and condition-based maintenance, improve the productivity of our 600 field service engineers and create a continuous improvement wheel when it comes to machine maintenance. They also allow us to establish reliability centers 4 in the world where some of our best engineers can provide remote support to our customers and to our field technicians wherever and whenever they need it. And all of this is helping to improve the efficiency of our customers' machines in the field. So I'm proud of what our engineering teams have been delivering recently. And I can promise that there's a lot more to come, thanks to our enlarged competency base with our new bag-in-box and pouch colleagues as well as our expanded network of technology partners that we've been developing recently. I mentioned GE Digital, but there are many more examples, particularly in the field of material science and advanced materials. Now this network of technology partners has many complementary skills and faces many similar technology challenges. And I really believe that by working together, we will accelerate delivery of innovations. Let me just give a couple of examples. In the pouch business, there's a fantastic opportunity to develop higher-speed pouch machine with in-line aseptic processing and in-line sterilization of packaging material. That really would be a world first in the pouch industry. Now it just so happens that key competence of our carton team is in-line sterilization and in-line aseptic processing at high speeds up to 24,000 packs an hour, and we already have a joint team working on that development. But it's not all one way. We talk about how we try to replace aluminum. And typically, we are looking to replace aluminum with polymer films that include those barrier properties. And a core competence of our bag-in-box and pouch teams is, of course, polymer films, and we already have a joint team testing the application of that polymer film, the RecShield in our aseptic cartons. So to conclude, we're only going to accelerate delivery of innovation, and that means that you will see many more exciting products packed in SIG packaging in supermarkets in EU. Now let me turn to operations. We're constantly developing our manufacturing footprint to make sure that we can support the growth of the business and deliver continuous cost productivity and ensure supply continuity to our customers. In the last few years, we opened our new plants in China to supply all of Asia on time and on budget at the beginning of last year despite the obvious challenges of doing that through the pandemic. We're well underway with constructing our plant in Mexico, and I expect to open that on time at the beginning of next year. and we're currently scouting for locations for a new plant in India. But it's not all about investing in new plants in the same period, we've closed down our production facility in Melbourne, transitioning supply to our cost-efficient plants in Asia, and we've sold that paper mill in New Zealand, transitioning supply to third-party suppliers. And both of those transitions have delivered significant cost productivity. We now have a truly global footprint, which is bringing us closer to more of our customers, giving us a greater low-cost country presence and more capacity for growth. And this footprint includes many common manufacturing processes such as injection molding, printing, lamination and that is going to give us many opportunities to enhance performance. And speaking of performance, we have a proven operations playbook for delivering growth, productivity and sustainability. And you can expect to see this playbook applied to our newly enlarged footprint. Some key elements include our SIG Excellence System, which is a set of expectations around how our plants should be run according to lean manufacturing principles, continuous investment in automation and speed increase and having visited many of the plants from the Scholle IPN business and confident that there are opportunities here. Centralized procurement ensuring that we leverage our global volumes to achieve best value. And of course, we're now much bigger purchaser of both polymer and liquid paperboard, and I'm equally confident that there will be benefits here. I'm proud of our -- we achieved carbon neutral production in 2021, thanks to our renewable energy program and has significant on-site solar energy generation capacity. You also can expect to see us bring the new sites into that program. We will continue to optimize the footprint, making best use of our low-cost factories, and of course, all of this with a common safety, quality, delivery and cost performance framework. So to conclude, we're an innovation leader in sustainable packaging, and you can expect to see that accelerate. And our expanded footprint ensures that we have the capacity for growth and productivity for years to come. I now invite Samuel back on stage.

Thank you very much, Ian. And the reason why you see back -- to see me back on stage is because I wanted to use the opportunity to introduce to this form more formally a new colleague to the family. Ross Bushnell, who joins me on stage here is with us, I think, technically in the third week. But we know each other much longer, obviously, as part of the process. We had the opportunity to work together in the integration planning. So a warm welcome, and we're now all delighted to hear from you what you bring to the family and how together we can grow faster. So thanks for being with us and a warm welcome.

I'm Ross Bushnell. I'm President of Scholle IPN, and I'm incredibly excited to be here and talk to you about how I think we can really be better together with the SIG. We've got a really amazing platform that you've heard from the guys that are far more technically proficient than I am. So I'm just going to talk to you about the business and how I think we come together, what I think is really an exciting part of how we're going to really drive this sort of better together philosophy throughout our business. So to start with on the first slide, talk to a little bit about who we are, where does Scholle IPN come from? Where do we play? And we really do have an interesting array of products and packages that come into the marketplace. And it's really farm to factory. You see in the first 2, and then restaurants or retail on the second 2 pieces, and we'll elaborate on that more, but it goes to the show that we go everywhere from a 1,300 liter bag on the farm to for process fruit, mostly tomatoes, but also mangoes and a handful of other crops around the world, and then roll into our bag-in-box offerings and our drum bag offerings in the food and manufacturing production areas. And then what you really see or rather don't see in a lot of the [indiscernible] base, but it's really a bag-in-box market. And I'm going to talk a bit more about that later as we hone in on one of our key customers are McDonald's. The bottom line is really an exciting piece for us. The retail space is an area that we saw really take off during the pandemic and continue to grow for us. So we're excited about that opportunity. We see also a hand in glove fit, you heard Christoph earlier talking about B2B2C, and that's our B2B2C really is, this retail collaboration, this retail front and where we -- a customer really touches holds and manages our product portfolio. So let's talk a little bit about sort of where we are on -- in terms of the QSR play. We love McDonald's. We love them. I'm from the U.S. So it shows, I know. But the fact is we're really excited about this relationship. It's been forming over the years. We work with not just the McDonald's Group, but many, many of their suppliers. So we're ingrained in their business. We're incredibly proud to be able to say that 21 out of 28 BIB slots in McDonald's restaurants on a global basis are ours. So that's a relationship, you can't formulate overnight. It's one that really has been built over the years and has been built around incredibly high quality, tremendous service and capability and cooperation with -- and development with a lot of their key suppliers. So you see the Carpigiani machine next to it. And it's a frozen dessert machine that everybody wants it gets an ice cream or a shake and McDonald's may well have seen -- but what you see when you open the door, is our bag-in-box are actually bag and fitments in their system. So we work with these automated smart systems to make sure that we give the perfect pack size. We have the perfect capability. And most importantly, that perfect fitment that works with their business so that we create this relationship, the stickiness of the relationship with the customer, and we expect to maintain those relationships for years, decades to come. So we're really, really excited about the relationship that we have with McDonald's. Let's talk a little bit about sustainability because -- we've had a chance to chat a few last night and more today. Those of you at home, we haven't really gotten a chance to talk to this, but sustainability is really core to who we are. Scholle IPN is a 75-year-old business that basically came about to replace rigid packaging. So from the very foundation of who we were, it was about reduction. It was about taking material out of the process, providing a better product for better -- that provides better service for our end customers. And that's evolved over the years to not just be a bag-in-box play but also a pouch play. And we demonstrated a bit today for those that were here. Just how we're moving along, and I'll talk to a little bit about that pouch business in just a bit. But to me, the -- we really do like to focus on where we've come with bag-in-box. We were the first ever bag-in-box package that was recognized as 100% recyclable from the Association of Plastic Recyclers. Hopefully, you had a drink out of one of them earlier today. But it's, again, a step in the direction of we need to be the solution provider for sustainable packaging for liquids around the world. And we take that wholeheartedly. So when you look a little bit about CO2 emissions and the key metrics that people want to look at, what you see is a 59% reduction in CO2 versus the jar in baby food. You see a 67% reduction in wines. So I know the sound of the cork is intriguing, but if you want to save the economy by box wine, we would appreciate it, and I know our customers would too. We'll slide on to talk a little bit more about sustainability. And again, this is the -- what is the bag-in-box do for us? What does it -- how does it help drive sustainability. You see the picture here on the right, it is 86% reduction of 1-liter bottles, when you compare our 8-liter bag-in-box to 8, 1-liter bottles of essential water, and we're incredibly proud of that. This -- if sustainability starts with reduction, once again, we're at the forefront of how that plays out. So we love this offering. We love that capability, and we'll continue to drive it. And I talked about Carpigiani before, but really all smart manufacturers and smart dispensers are solving a problem for QSRs around the world. So they're helping where labor is a shortage. They're helping with time and efficiency and all sorts of capabilities that, frankly, QSRs are desperate to come across. So we're excited what we bring there, and we look forward to really continuing to build and develop on those fronts. One more quick one before a video here. The new standard, we think, is our IBMS capability, the new standard in pouch manufacturer. Really, this is our proprietary technology that brings induction sealing in line with our capabilities around film and fitment. These 3 platforms, we've talked about a lot over the last 1.5 days or so, and we're really, really building all aspects, film, fitment and equipment to drive efficiency and to drive ultimately our offering into the sustainable platforms. This collective allows us to put a mono-polymer pouch into the marketplace at a competitive level where we can really attack that 99% of products that were launched last year in multi-material pouches. 1,200-plus launches, 99% of them were multi-material. So we see a huge opportunity here to grab and to run with. One of our key customers also agrees with that. And I'd like to share just a minute here with the Frederic Mathis from Materne, and let him share a little bit about how he and Scholle IPN have worked over the last 15 years.

We are working now more than 10 years with Scholle IPN. We did a lot of projects with them. We changed the face of the market first with a 2D revenue evolution. So we came out with a win cap, which changed completely the phase of the market. Then we went further by saving 40% weight with [indiscernible] This was possible thanks to a long-term relationship and partnership we have with IPN, thanks to a strong development team. Ready to break paradigm and to move to new levels, putting a question what they already do. The same are now with [indiscernible] thanks to this long-term collaboration, we are now able to put on the market the first full [indiscernible] structure. And the next step for us will be to continue to work on [indiscernible], so to be even more sustainable into welcoming next generation machines.

So I hope you figured you could take a lead from that is that Frederic has been part of almost part of our organization for years. he pushes us on every platform, on film, on fitment, on equipment. He's always asking for the next step that relationship goes back 15 years, and he's been there 15 years of that relationship. So a tremendous person that really believes in our capability and has driven our business relationship a long way in the organization. So finally, I get to flip switch and talk a little bit about just what does bring us together? What do excite me, what it does happen? And I think you start with a common platform. You can see the diagram. But in effect, we start with these resilient and growing end markets and we share a lot of these markets, we share a lot of commonality on that front so it really makes sense that we work together both the former Scholle IPN business and SIG, we're really excited about that potential. We're leaders in sustainable packaging and have been. It's not just something we picked up last month, last year or 2 years ago, or when somebody decided it was a good idea, we have been about sustainable packaging for a long time. We're leaders in high barrier and aseptic packaging. We started an aseptic in the 1960s and developed a bit further in the 1980s. So we've been in that space a long time. And SIG, as you know, has really been in that space from the outset. So there's a lot of commonality around aseptic packaging in an area that we really do think we can continue to build on. And we have winning business models with long-standing customer relationships. One of the things we talked about early on in the relationships was there are top 25 customers in each company actually average 30-plus years of tenure. I think that speaks to who we are, how we go to work, how we deliver for our customers and the kind of company we want to be long term. And now I think there's some gives and takes from each of us that we can drive to. You see that on the Scholle IPN side, we do a lot of co-development with our customers. You saw that with Frederic, he was a great example of how we go down that path. And we have huge capabilities in ceiling, filling and connection technology that hopefully, we can find ways to grow and utilize across the SIG platform. We have a global footprint. It's true, but we have a stronghold in North America that we really think is going to be advantageous for both of our businesses as we continue to work together in that area. We also play significantly in industrial and institutional markets. And again, an area that the SIG team has a real opportunity for growth. And so we're excited about how that plays. But then we get huge benefits. We get the opportunity to work with a customer-centric organization, that whole retail side where we're really taking off on building on that platform. The tech centers that we see from SIG are stunning. We're incredibly excited to be a part of that. We can't wait to get our equipment in those tech centers and be part of this global platform working together. Solution selling is a strength. It's really who SIG is, and it's something that we have some experience with, but we can get a whole lot better with. And we're really excited to learn more about that front. We have a global footprint, and it's true, but the emerging markets of -- in particular, Middle East, Africa, Southeast Asia and Mexico, we think have huge potential, especially for our pouches, but also for bag-in-box, and we just barely tapped the surface. So you're going to hear from my colleagues now on the regional levels and hopefully, we can better understand what those opportunities look like. And then finally, category expansion. The SIG team have a tremendous relationship with multinational corporations, and they have these regional champions. We've already worked with our sales organization to get aligned in that same platform, and we're incredibly excited to really build from that experience and make sure that we are optimizing that relationship with every customer. So that's it. I want to thank you all for listening, especially in the warmth. And I appreciate your time. Look forward to questions and look forward to working with you all in the future.

Thank you so much, Ross. Super interesting to learn more about your business. Super interesting to understand the sustainability trenches, how you work with customers. And we're going to hear more of the customers. You're going to have the voice of the customer with us after the coffee break. For now I would invite Ian and Christoph back on stage, and we would open it up for a Q&A. Here in the room but also for you that join us online, Ingrid would read your questions that you can post, and we're very happy to answer the questions, and we will then have a second Q&A more for the region.

I see here a question in the room from Lars. Lars, I think you will get a mic.

Still struggling a bit, the overlap. If you were to single that 1 specific or maybe 2, to be generous, why this becomes a better business combining the 2?

If you ask me, and I think you have summarized it very nicely, I think it gives us the opportunity to benefit from technical capabilities, capabilities that are going to drive the beverage carton into the next generation through the next S-curve because I believe there is a reason why our beverage carton industry has 2 main players, why we operate at the margin levels that we do. It's not trivial to create a sterile environment to fill a steroid product into a sterile container and close that and keep it shelfed stable at ambient temperature. And then it's because we have the machine capabilities. That's why we have the barrier capabilities. And those barrier capabilities evolve. We need a solution for aluminum. And that's where Scholle IPN comes into play. And I think that's a truly exciting part. And the other one is, it is an opportunity to create continued emerging market growth by bringing the substrate to spare a pouch and bag-in-box with us combined to the next level and to those platforms that we build, which I think, it's a unique platform to the 2 points that you asked for.

I'll even throw in a third, if you will, take a bonus for it, is speed. Speed on the pouch side, speed on the bag-in-box side is something that we fundamentally think that if we crack that code and can get to these large players and large markets at a speed that's considerably more closely tied to cartons, I think we changed the game. And I think that Ian and his team bring us the technology and the capability that gives us the speed to really fundamentally change our approach.

Just one more, please.

Go ahead.

Yes. So the geographic footprint, as you pointed out, is somewhat different. Is that a meaningful cross-selling opportunity for SIG to expand in the Americas or North America, specifically? And for you in the emerging market, is that something that will really drive benefits and potential synergies?

Why don't we let Christoph kick it off here.

Yes. I mean you're talking about 2 reasons, right? The Americas is one. And there, obviously, Scholle has a bigger business, longer established, and they're particularly strong also with dairy customers. So there was 1 question before also I'll set booth, Saputo is one big example, -- where it's a large dairy, we are not present, and that is a big opportunity where Scholle can help us. Then there are customers where we are both present and where we believe we can even grow faster. So co-pack us with a broader solution set we can help them to attract more business. So there's also in the U.S., a lot of opportunities. And then, of course, I mean, if I pick in a developed market or an emerging market like Middle East, Africa, where Scholle is almost not present whatsoever, but we have a very established, almost now 20-year-old presence. We have the brand, we have the customer access, and that's almost -- that's a very low-hanging fruit to bring the product in, presented to customers and grow it. So in both markets, we do see significant potential, yes.

The other question here in the room. And Ingrid, you would tell us if there is someone online.

Thank you for the presentation and the effort you had to put up. It was so far, very interesting. If we can dig a little bit more in this question on the cross-selling? Can you share with us how do you plan to go about it? Because I skimmed quickly to the next presentations that are coming up from the agents, I didn't see 1 single pouch on that, but I didn't read it. So maybe -- so I wonder who does what? What is Ross doing to drive this cross-selling? What are the other guys that are coming up, doing to drive the cross-selling, like really concrete, if possible?

Yes, I think if you look again through, you will see some spouted pouches in the presentation. But I think it's a good question. So how do we go after the synergies on the top line because it's all about the top line. We quantified the cost synergies there. We're going to work on them, but it's all about the top line synergies. And the way how we look at it is, we look at it, that Ross is the owner of the global business of Scholle IPN, but he works with us closely. We have basic coloration model and we have an integrated model. In those geographies where we have both an established presence in the U.S., but also in Europe, the team is going to continue to work in their current structure because there's no kind of meaningful synergy created by putting them together. In any event, we want to keep the sales managers separate because it's already a complex system to sell a beverage carton. It's a complex system to sell spare pouch. It's a complex system to sell a bag-in-box. But on the sales management layer, there is synergy in the marketing layer and the commercial excellence layer, there's synergy. And in those markets where we have a strong presence, the emerging markets and you guys are just about to enter or not yet present. That's where we kind of start to go with the integrated model and our team, build up and host those dedicated sales forces that you, from a global perspective, leading guide with the system background. We now and Christoph, if you can talk to that go through, very intense exercise on cross-selling opportunities and how we plan to go after them. And I think you're going to hear in the regions later on early leads that we already have there. And I think there is truly exciting what comes up there. Maybe you want to talk about this cross-lead generation.

Yes. I mean we've already, in the last couple of weeks, spent a lot of time on the road. We've been all over the world, bringing the teams together, starting with product training, starting with unifying the go-to-market approach. And just to give you a very, very concrete example of how this could work. So regularly, we do with our customers, what we call innovation workshops. So we really map out what are the occasions, the consumers and the categories that they are present and where do we see from our end growth opportunities for them. So in the past, for example, food service opportunities, we simply couldn't offer a packaging solution, right? We had the customer, they saw the opportunity, but we couldn't be the supplier of choice because we didn't have a solution. So that approach of mapping out their portfolio, mapping out the market opportunities, that's really the solution selling aspect of it. And with the broader portfolio, obviously, we have more options. Now that's identifying the opportunity. If you then want to configure the right system, of course, the product specialist needs to come and say, okay, that's the right machine. That's the right film. This is how we will set up. But the approach now to customers is with the broader portfolio, we can do a much better market screening. We can help you to leverage more opportunities. You'll also have 1 customer example later in the Southeast Asia section. 1 customer really talking about, this is what I use my brick carton for, this is what I use my pouch for, different categories, different consumers. So that will really be the approach.

On the America maybe? How do you drive it there? Because there, you are both present, but as far as I understand, Scholle is much stronger...

Absolutely.

Calls to everybody. So you should have a step up and say it's tomorrow.

We are very positive...

Why don't you guide for us then?

We will guide you on the specific region, but we definitely have an excitement about that because what these guys offer us is a seat at the table with the big guys in the food service industries. You have heard him talking about McDonald's. And that's where the standards for the rest of the world is set. He's in 21 out of 28 bag-in-box positions in McDonald's. And that's an opportunity for us. If you look behind the counter at Starbucks, you see both bag-in-box, you see also carton solutions, but I think that's where we can really benefit from the presence they have in the U.S. Thanks, Alessandro. Jörn, Please go ahead.

Just quickly 2 questions, please. The first one is you have the target by 2030 to have a product which is fully recyclable in the paper recycling circle. Why does it take so long? What is really the bottleneck here to develop the polymers for this? And the second question would be, please, to better learn about Scholle IPN, I understand you're not providing historic numbers, but what were the challenges and the things not going well in the last 3 years at Scholle.

Ian, why don't you take the first one.

Yes. Let me start with the challenge on getting to this 90% paper so that we can be recycled in the standard paper stream. Today, we are at between 75% to 80% paper, and we need a certain amount of polymer in order to make the thing liquid proof and to provide the ceiling capability. When the carton is formed in the machine, equally when the pouch, you heat the polymer, it melts a little bit, and that forms the ceiling, makes the thing leak-tight. And we have been, over the years, we have a great track record of lightweighting, reducing the thickness of the polymer in order to be more cost competitive and more sustainable. But there comes a point where there's a limit to how thin you can make that polymer layer and still achieve high-quality ceiling. That's also something which is barrier for competitors. So that is the challenge. We need to find materials, I think, other than polymers, which can give us that ceiling capability with significantly thinner layers, and we are trialing a number of exciting materials with good potential, but that is just a difficult technical challenge.

Do you want to take the second one?

Sure. Yes. Look, I think fundamentally, if you say what are the challenges? It's been how do we move up the ladder on this whole recyclability on this sustainability metric? And how do we get -- make sure that we are engaged and focused around those core markets and those core opportunities that we have every right to win in? So let's make sure that we -- every step we take is in a market we think we can really be very, very good at, and let's not get distracted by a lot of other pieces. So probably more so over the last 2, 3, 4 years, we've really honed in on. What is it we're really good at? What is it that David can develop from a film perspective? What can a [ Bell ] do from an equipment perspective. And what can Tony bring us from a film perspective, that really allows us to win in the liquid packaging space. Don't get distracted about other packaging opportunities, but really say, this is where we want to be. This is where we think we can own a position. And this is where we spent the last couple of years really focusing on development on those arenas. And I think that what you're going to see and what we're already seeing in the marketplace is that those opportunities are really going to pay off in the long run.

I think Christian has a question over there. I think there's 1 more question there, I see.

Yes. A follow-up on your strong relationship to McDonald as well as Starbucks, I think, that's a U.S. relationship, right, that's not a global relationship. Is that correct?

No, the McDonald's relationship is global. And of course, Starbucks is based in Seattle. So we work closely with Starbucks and expect that relationship to continue to develop on a global scale as well.

Okay. But then there must be some solutions already in place for other markets in -- for Starbucks. And I wonder who are your competitors there? And what do they do better so that you haven't, yes, got that relationship on a global basis?

What we see on that Starbucks front is, first of all, new market development, so their coffee market today, what they're putting into our bag-in-box is really this notion of iced coffee market for them is outside -- in retail is relatively new. So what they asked us to work with Pepsi to create a system where we could bring this to the marketplace. We've done that in a really successful way over the last year. We expect that to expand. It won't be a product for every market around the world, but we think it will be a substantial product in North America and in other parts of the world where iced coffee and cold coffee are preferred. But then we look at what is traditional and there's a lot of drugs and a lot of other things behind the counter. We'll work with them on developing this stuff. So there's rigid plastic. There's all sorts of other -- there's metal cans. There's all sorts of other substrates that are there today, if you look behind the counter, our mission is to how do we turn that into bag-in-box and pouches in their space.

I think we had a question over there. Thank you, Christian. If you pass on the mic.

A question on -- I mean, you have talked a lot about the new machine, the new system, you want to develop for the pouches. My question is more on net CapEx as a percentage of revenue and all the research and development costs. So do we need to expect that going to be up -- to go up in the near future?

We're going to have Frank on stage, who's going to wrap it up also from a financial perspective in the second Q&A. So I would say, generally, we should maybe try to get the financial questions there. But to answer your question, we are comfortable with the 7% to 9% net CapEx of revenue. And we also keep working with this around 3% of revenue is the R&D spend in order to deliver on what we showed you before and what we talked about here. Is there any other question here in the room? I see over there, just right behind you, [indiscernible].

Yes. You talked a lot about sustainability that I just want to know how much of your package is linked -- financial package is linked to sustainability targets?

Of our financial package, as a leadership team, we have obviously based, we have an STI and we have a long-term incentive. And out of the STI, we introduced that metric last year. And this year, it's 10% of the short-term incentive. But I want to make the case that for us in order to place a filling machine, very often, sustainability is the angle to get into a customer. If you look at overall, the volume that we sell it is still in the single-digit percentage point in terms of all free. Again, we need to get to this inflection point of cost parity. But for us to give the customer the option to be alu-free is a compelling reason to buy an SIG filler, the key cause, he can run both over such a filler. And I think what I want to say is that sustainability and an incentive to drive sustainability is inherent in our business model. If we scale, if we grow, we continue to do a good impact. Thanks for your question. I don't know if there are another question here in the room. I think over there.

Yes. Can you comment on market structure in bag-in-box, I mean you're not #1, who's #2? And what are the market shares differences? And then the same in pouches. I mean, here you're #2, who's #1? And also in that respect, the technology differentiation, also in carton is different within the raw filled and the in sleeve filled, there is also a technology difference, similar to that in the other 2 areas?

I think obviously, this question goes to you. I think, from a market structure perspective and also from the technological differentiation, we already explained in earlier calls that the market structure is not so dissimilar. In that respect, that obviously, the bag-in-box, you guys are #1, you can elaborate on that. But then you have these 3 fields, retail, industrial and institutional. You have mainly 1 relevant player there. I mean in spite of pouch, it's not more fragmented, but I think...

Yes, you've hit it on. We talked a bit offline as well. Is it -- there's no -- there tends to be focus. Our competition tends to focus on a particular market. We look more broadly across all the markets. And we're grateful for that opportunity because it allows us and affords us more approach. But you might run into one significant competitor in industrial, a different one altogether on the retail side. So it just depends on where the market is and where we're playing and which part of the world we're in any given moment because there are some stronger regional players and fewer global players in this space. So -- and the same pouches is we consider ourselves to be roughly #2 in that space. We don't like being #2. We'd like to change that. But we will continue to grow and drive in that. But there are a handful of players out there that you talk to Guala certainly, is one of those players and one that we run into on a number of fronts in a number of markets. So we continue to make sure that we're bringing more value and growing our position in that pouch market more readily.

But I think it's interesting also when you explained to me the technological differentiation what makes a back-in box special and how you differentiate through your technological capabilities like equation rates, things like that. I think that's super interesting to hear from you as well how you compete through that.

Yes. Look, and it's the fitments and the capability that we develop within those fitments and how we've developed a relationship with our customers on that respect, that locks us in. But traditionally, we've had a higher-quality bag offering less quality issues, less breakage, less spillage, less issues, and then utilizing technology that helps with the evacuation. When you think about the cost and the environmental impact of wasted food, it's dramatic. It fundamentally impact -- it moves the needle. More than any waste and plastic packaging would, food waste moves the needle. And so evacuation rate is really critical. And we're 99% plus coming out of a bag-in-box. And you're talking about a $150 bag of syrup, it matters. It matters to the retail. When you're doing this over and over and over again, that difference might be 2%, 3%, 5%. And we are able to really fundamentally different ourselves and differentiate ourselves with our customers' customers as well.

Excellent. Thank you. I would suggest that we take the 1 question from online, and then we can also mingle during the coffee break and continue the dialogue. But Ingrid, over to you.

Thank you, Samuel. So we have a question from Peter Manuel. He asks, how much of Scholle's revenue comes from McDonald's? And how big is the share of the top 5 customers with Scholle and SIG?

The overlap customer, I guess. But what we discussed already. It is discussed already that through incidentally, the top 10. In your case, it's [indiscernible], case it's about the 1/3.

Yes.

Obviously, we don't comment on specific customers, but that's the one. I think the overlap comes mainly in those geographies where we're both present. I hope this answers the question. Is there another online question? If not, I would suggest if that works for everyone that we get -- moving back to the refreshment bar, I have a cold drink. We also will be there for time to engage. I would kindly ask you to be back here in the room at 03:30. Thank you so much, and see you at the coffee and refreshment bar. Thank you. [Break]

Welcome back after the break. I see there are still a number of empty seats. People are coming back into the room here, but we want to kick it off and we want to continue because there is exciting stuff coming in the agenda. And this is how we deploy all of that, what you just heard from Christoph, from Ian, from Ross and myself. We're going to talk about how we create value for our customers -- together with our customers in the regions. And we are so proud that we can introduce you today to 2 customers that join us here on stage, and they will be introduced by the respective regional presidents, but we also have more customer testimonials that are going to come over video. So it's really about the voice of the customer, and it's also about how our teams hand-in-hand in partnerships work with our customers and make them successful because they will make all of us successful. So I got to introduce to you José Matthijsse. She runs Europe for us. José, with this, I would say, over to you.

Thank you, Samuel. I joined SIG 1.5 years ago, and I'm very happy I did so. I have a long-standing experience in fast-moving consumer goods. And with that, I bring the voice of the customer of our customer closer to SIG. And it's super exciting to see what opportunities packaging has to offer to our customers and to work with that. We are growing in Europe, and we're growing in Europe because of SIG's technology, because of SIG's system, because of our sustainable solutions, because we're able to enter new categories and to grow our customer base. But as Samuel just has said and you've heard it this morning, and for those of you who have been following SIG for a long time. We value long-lasting relationships with our customers. So I'm super happy that Thorsten Oberschmidt from Hochwald is today with us. He came from Germany to talk live to all of you because he is one of those customers with whom we value the relationship very much. Liquid dairy in Europe is a stronghold. I think we should go 1 slide back, by the way. The slight ticker is going slightly too fast. Liquid dairy is a stronghold in Europe, and that's because our customers in Europe, they value efficiency very much. SIG wins with total cost of ownership, because we supply, we deliver that high efficiency, high output high flexibility and low waste. That's the promise that we give our customers and that we live up to. With a continued increased investment in connected machines and the reliability centers, our operational efficiency will go even further up or the operational efficiency of our lines at our customers, I should say. But that will go even further up, and that's very good and needed. Together with S-IPN, we now have 8 production sites, 8 manufacturing sites and 2 assembly sites. And it's super cool to see how our sales forces are already generating leads, like we are only weeks into this process right now. But in Spain, for example, some dairy customers of SIG have been introduced to Scholle systems, and they are very keen on that, and the folks are going very well. Likewise, in Italy, some food customers of Scholle are now opening the door to SIG, and we're talking to them about our solutions for food, where it normally would have maybe been more difficult to get insight. Now food is one of those categories that we are growing in beyond liquid dairy and that's important for us. We need to grow into other categories. So one of those other categories is, of course, plant-based, which is growing very fast. That allows us to drive new customers and to also get new customers interested in discovering carton. So we're able to get customers from other types of packaging into the beverage carton industry. An important reason for that, now we can change the slide, are our sustainable solutions, which are proven had the work for a long time already at customers, and they're absolutely most innovative in our industry. That's acknowledged by our customers and especially in Europe, it's very important for our customers as well. We have a broad range of sustainable solutions, structures without aluminum, structured with plant-based polymers. There's different solutions for different customer needs. It's growing fast. And our customers also acknowledge not only that we are the leader today, but that we continue to invest in R&D on this field or in this field. And that's also important because the customers know that the restrictions or the questions on sustainability will only become bigger and bigger. And they are looking, not only for the sustainable structure of today, but also the sustainable structure of the future. and we ensure them with our investments in R&D that we will also be able to lead that future with them. Now that not only talks to our existing customers, but it attracts new customers as well. And that gives us the opportunity to work into the different categories. Of course, plant-based is the fastest growing of that. It attracts a lot of start-ups and new brands. And SIG is very well positioned with many co-packers across Europe because our filling lines are very flexible. So if a customer has to change often between recipes or pack types, then our machines, how do I say that, are sure to give a very short change over time. An example on the slide is Framptons in the U.K. that has launched over the past month, 8 brands in plant-based. Now that sounds like a lot, and these are all starting products, of course. But one of these products and one of these brands will grow and become very big. And now that they're available in carton on and in our dome packaging, I am sure that by the time that they are the loved brand for the retailers, they will stick with us. So we're happy and keen to be available and to be working with these co-packers. Nevertheless, there are 2 big players in the plant-based segments, and we have serious talks with them as well. And I'm sure in the second half of this year, I can have more concrete news about that as well. In the water category, some of you are aware of this. Volvic wanted to improve on their sustainability promise and was looking for more sustainable structures. They have worked with us to put up a beautiful combismile line in their facilities in France. Last year, they launched flavored water in portion packs, both adult flavors as well as children's flavors. And this year, they will launch regular mineral water, all in on-the-go packaging for on-the-go consumption. And we saw the trend earlier on when Francisco Crespo was talking about on-the-go consumption. It's a trend in Europe. That will slow down maybe a little bit because of COVID, but it's definitely there to stay. Now SIG is traditionally strong in food, so we're happy there. We see a lot of traction in food. It's a growing category and it's growing in carton. The drivers behind that are, again, sustainability our life cycle analysis compares very well to some other of the packaging, but also cost considerations. So we see now a transition starting from can to carton. Another of those examples where we are able to generate new business coming from other types of packaging is the last one on this slide, it's Euromilk in Eastern Europe, a customer with whom we have a long relationship as well that have PET and carton next to each other and also now says we are transitioning from PET into carton. And they not only do that with liquid dairy but also with their RTDs and their plant-based drinks. So we have on this slide, 2 examples of new customers, 2 examples of existing customers. Like I said already at the start, we are very happy to grow with existing customers as well. And with that, I'm introducing Thorsten Oberschmidt, the Chief Operations Officer of Hochwald, who will talk to you about why he chose to work with SIG for all the filler lines or almost all the filler lines in their new greenfield in [indiscernible] that are currently running, as we speak. So we delivered up on our promise. But also, and I'm excited to announce that they also chose to launch our first Neovita machine, which will be placed in Kaiserslautern. But Thorsten is much better equipped to talk about all of that. So I hand over quickly to you. Please go ahead and take over.

Thank you. Thank you for inviting me here. Hello. My name is Thorsten Oberschmidt. As already said, I'm the Chief Operating Officer of the Hochwald Foods Group in Germany. If you flip 1 Slide. We are #3 in the German dairy market basically, and we are a German cooperative, but we think of ourselves about being also cooperative, which is quite important to do this big projects that I will talk about in a second. What are we as a company, we employ roughly 2,000 people. We manufacture our products out of 2.2 billion kilogram of milk in 9 factories. And we are on our way being more an international dairy supplier, not so much their producer internationally because our heart is, of course, Germany, but we are selling our products and to now almost 50% to the world outside of Germany. And our annual turnover, just to mention that, is roughly EUR 1.7 billion a year. Yes, this is our project. In 2017, the Board of Hochwald decided to replace 2 older factories to buy a new 1. Because we still believe then in the future of dairy and we still believe in the future of selling dairy to directly to consumers, not so much just to other businesses as a lot of our competitors do. So we decided to build a new factory close to Cologne which , for us, basically at the optimum of our milk streams and of our supply areas in Germany. It's a fairly big plant with 60,000 square meter of floor area, 100 vessels, a 50,000-pallet highway store, and we want to manufacture products out of roughly 800 million kilograms of milk a year. And for that, we needed -- where we need 7 filling lines currently. There is space for another 5 lines. So well, however, SIG does the job, there is a chance for another 5 lines in line in that factory. What was important for us to choose the right partner or supplier for that for this task or for this project. And we try to get almost 330-degree view to filling lines, which includes, of course, total cost of ownership, mechanical efficiency, flexibility. Market needs, of course, sustainability gets by day to day, more important, of course, aseptic performance because we are selling a milk product, a UHT product to the customers and, of course, waste levels, which is, again, more or less not just a question of yields, it's also a question of sustainability. And we had quite some time, maybe a long-ish process on the decision. And in the end, it turned out for us that it's right to invest in 15 lines from SIG. Then there is 1 -- what it's called cup filling line, which is can't be supplied by SIG and 1 another liquid paperboard supplier, but this is more reasons and means of differentiation of products at the market. Yes, in the end, it's not that SIG was best in every category, to be quite open and frankly, but as a total package of flexibility, total cost of ownership, it fell for us being the right decision. That is I don't want to go through all the lines that we set up in this factory. But we -- as a big private label manufacturer, it's quite important for us to be flexible in the terms of differentiation of product at the market and, of course, productivity because we have to supply at lowest cost. That is why we found a setup that gives us all the green lines being as productive as it can be and the red lines which gives us extra flexibility to be responsive to market needs in terms of packaging, especially when it comes to different formats and secondary packaging. So we were looking to get a very balanced setup. And this is, of course, one of the big pluses of the SIG system because it's possible to have different formats just on 1 machine with low change over time. Yes, this is a setup. And what is next? You don't make this decision for 15 lines just to decide in 2 years in a different direction. You do this decision to go a long way. And this is what we are planning to do with SIG. So there is a story to be continued. And this is what we are looking to. We are looking to next level maintenance, which means in the end that we don't want to buy the well, all in package in terms of maintenance, we want to get a tailor-made. We want to get the stuff from SIG integrated in our factories when it comes to train our people and to plan for our maintenance and when it comes to the point that we need to do that very efficient. Then of course, yes, we decided to be the partner for prototyping the SIG Neo. One reason is we want to grow with this new package, our plant-based portfolio. Another reason for us is that we want -- we are looking into spinoffs from the SIG Neo to the third generation that we just installed in [indiscernible]. So we want to continuously improve our installed base. We want to take new developments from the new generation of machines and try to improve the performance of the lines that we already have. Yes, this is a little bit just -- well, after 4 years of working for this project, there would be, of course, a lot more to tell, but time is already over. Thanks again for inviting. And well, looking to a good future in this collaboration. Thanks.

Thank you very much. Thank you very much for this convincing story on our technology, our productivity that we offer flexibility and partnership. I hope that informed you a lot about Europe. We're open for questions later on. But right now, I hand over to Abdelghany, my colleague who runs the Middle East.

Thank you, José. Good afternoon, all. I'm glad to be with you today again. My name is Abdelghany. I look after Middle East, Africa. I've been with SIG now for 5.5 years, and I come with 25 years before in the FMCG. Middle East, Africa, super exciting region. Why so? It's the fastest-growing population region. It has the increasing GDP per capita. It's mainly driven by urbanization and rising disposable income. It also is driving the change in lifestyle in terms of consumption, towards more processed and packaged food, and this is where SIG is playing an important part in that. Aseptic, this is where we play. And why it's fit for Middle East Africa. Think about aseptic as the best offer for a very high diverse region, which actually lack cold chain. So this is the right carrier for that product. sustainability, although still underdeveloped in Middle East, Africa, apart from South Africa, yet actually, with the offering that Samuel's talked about, our extensive offering of sustainable packs really provide us as the right partner for our customers for today and tomorrow. Our unmatched flexibility in terms of size and shapes is making us the right partner for our customers in the region. And why so? Middle East Africa is a price-sensitive market. Affordability is a very key aspect in this region, especially in today, high inflation environment. That easily gives our customers the opportunity to downsize in the same pillar in order to maintain price points for its consumer. Our leadership position in digital and now expanding that into remote service, 24/7 is the right capability. for our diverse region with relatively limited talent and capability, where we can actually avail the right resources remotely to ensure our machines, runs at its best performance. In the coming slides, I'll shed more lights on our strategy on how to grow in this super exciting region, how and what. Remember, we've made a promise some time ago that we will shift more of our focus in today. And why so? We all know dairy is more resilient. We all know that there is a huge demand, as Francisco said, for a very good, affordable source of protein, and that's where dairy plays in. In the region, just think of the per capita consumption of dairy and compare it to Europe, we're talking less than 10% per capita consumption. So think with me the highest growing population region with this kind of low per capita consumption. And when you think of that, don't only think of the 4 liter, which is super low, think that we have also huge diversity in the region. Let me give you an example. In Nigeria, they only consume 1 glass of milk per year, 1 glass. So the opportunity in simple words, it's huge. Let me tell you how are we really driving our dairy. But before I said that, I said we made a promise that we will shift our focus more in dairy. I hope that the chart tells you that moving from 42% contribution of our business into now 64 is really a proven record. But let me tell you how are we doing that. We've leveraged our integration with SIG to really push innovation. We've really leveraged our consumer-centric methodologies that have been talked between Christoph and our solution selling capability into the market. We've been able to convert Lactalis in South Africa from competition to 100% share of wallet and really avail to the market, both economy and premium range in the whole fledge of our different sizes. We've also been able to allow [ Medic ] in Saudi Arabia to increase their market share on the same seller, they are today taking the advantage producing all the way from 500 gram, all the way into the promotional 1.1 liters, not only in dairy but in cooking cream, all in the same pillar. What an unmatched capability. And not only, yes, we're not focusing on liquid dairy only. We actually want to go more into value-add. But why so? Value-add, we can easily fetch higher price, but it's not a matter of high price, it's actually our capability to enable value add. We've talked about our unique capability in terms of filling particulates, high viscosity and more of sustainable structure. Let me give you a clear example. Danone in Saudi Arabia, we've converted them from fresh, as you can see on the chart, into aseptic, our recent smile introduction. So now Danone in Saudi Arabia will not only avail that to their limited closed location because it's fresh, think about now of the opportunity of expanding this aseptic into the whole range. We've also been pushing leveraging Nigeria, evaporated success story into Ghana and into Libya and introducing that. We're not only focusing on value add in terms of dairy, but we're really having the focus of food. We went into Baladna, which is our market leader in Qatar, 100% share of wallet, and now enable Baladna on the same filler that produce dairy and juice to also introduce Feta cheese. And last but not least, I think you probably have read that we've worked with Arla in Saudi Arabia, where they wanted to localize their production of food, and they have looked into what is the perfect pack, and the choice was SIG. We've launched, and now we're starting up -- or actually we started up in January, our first dedicated food filler that enable Arla today to serve soups and sauces into the market. So I'm super excited about the ability that we're doing with category, but is it only a category that we're focusing on. Middle East, Africa is a huge market. So geographical growth is a fundamental element for our success in SIG. As you probably know, we're currently present in 17 countries out of the 70 countries. Just to give you a rough number, that covers 45% of the population, 53 countries opportunity, wow. But do we want to be in all these markets on one go? For sure, not. Priority is the name of the game. So how are we addressing that? We work on 3 main levers. We work on really establishing the right target market or should I call the right target customers that in a market that can become a customer production hub that not only serve the market where it exists, it serves all its neighboring markets. For example, in Ghana, in West Africa and recently in Mauritania, where actually, they are serving Mali, Niger and Senegal. And only in Mauritania, you might think it's a small country, but between Mauritania and its 4 neighboring countries, we're adding 20% more population. So we moved from 45% into 65% population. So we talked about category, dairy, food, and value add. We talked about geography. Can we do that without building our capability for sure not. So we really leverage now our power of being a full member of SIG. And we've opened our technology center in November last year. Christoph talked about technology center, which is currently Food certified, it really offers a unique opportunity to our customers to avail B2B2C, and that's actually where we play. This is where we actually co-create with our customers, all the way from idea, all the way to market launch. What a unique unmatched capability in this region. And I'm so proud to say that it's not been built for my region. It's built for my region and my colleagues, and I actually collaborate, just to give you a perspective, with Angela on AP South, bringing her customers into my region, for example, in India, and actually, we open markets together. Not only technology center, probably you know that we opened our reliability center in 2018. And in 2020, with the acquisition of SIG to the joint venture, we opened the story of Al Marai, the regional player, where we actually improved their performance by 6 percentage points. By the way, Al Marai is a regional strong player. That was our pilot story in 2020. We never stopped at that time. We actually took that pushed the digital tools. Ian talked about 80% of our fillers are connected. We're not only doing that. We're having asset health monitoring. Probably you've seen that today with [ IoT ] and digitals. And actually, we're pushing that. To just give you a perspective, applying asset health monitoring within Al Marai, which is Phase 2, we've been able to reduce the unplanned downtime by 30%. Baladna, the market leader in copper, said, "I don't want to have people on ground. I'd rather utilize your remote service." And we said, absolutely fine. There fillers runs like a clock. And last but not least, Juhayna in Egypt, one of the market players, they are really good customers. And they come back and say, "Hey, we want to move from good to grid." And we said, "Hey, that's actually us." We took our SIG excellence system that Ian has talked about, which is actually a blend of lean and digital and actually, we've applied that. And before I talk about it, let's hear the customer themselves. [Presentation]

What an outstanding story, but let me put some numbers behind the story. So we went in 12 weeks effort, 12 weeks joint effort, and we've improved performance by 12 percentage points. What does 12 percentage point mean -- it means every day of 24 hours, you produce 27 hour output, 3 hours, 3, on an outstanding performance in 12 weeks. And I'm not going to stop. I mean, we actually stopped the implementation. I was actually talking to well before I come into the event, and I was super thrilled hearing him says, "Hey, we did not stop. We're still applying SIG excellence system, and we gained more percentage points, wow. So really an outstanding performance, which actually Middle East is looking for. And before I move in, I mean, allow me also to give the chance to introduce 1 of our other strategic customers, so moving south to South Africa, and let me introduce Eduard Loubser, our loyal customer from FAIR CAPE. Eduard?

Thank you, Eladib. Yes, it is always amazing listening to you. So full of confidence. Samuel and Eladib, it's fantastic to be here today. So it's a privilege and a wonderful occasion. My brother, Melt, would have been loved here -- to be here today, but he had to get a Schengen visa, and the tedious processing it from Africa. I was fortunate to travel through Europe with my family a little while ago. So I have been issued a 3-year multiple entry visa, which is quite scarce for a South African to get, but I'll come back to that one, and that is why I am the chosen one today. I'm [indiscernible] to talk about South Africa and Africa because that is where we operate. So quickly, I only have 8 minutes. There's already streams gone, that's not me. South Africa has a population of 60 million people, and we're governed by a constitutional democracy that forces us to have an election every 5 years. Our constitution recognizes as well the independence of the court. And together with a strong civil society, we can maintain an order in South Africa. Our next election is in 2024. And we counted them to the current regime, which is the African National Congress. I think you might be remember the name of Nelson Mandela much better. We're confident that they're going to be outlook into 2024 and we will have a coalition government as we do have quite a strong and growing position in South Africa. And that's politics I'm done with that. Let's talk about Africa. This north of us lies an amazing continent, dark and mysterious. I have been privileged to have traveled there a lot. Currently, there's 1 billion people in Africa. Eladib talks about the number of consumers there is. That number is going to grow to 3 billion people by 2050, an enormous growth in customers. I've traveled Africa a lot. 20 years ago, 25 years ago, if you ever wanted to travel through Africa, you needed a proper 4x4. In South Africa, he uses Toyota. I walked down the stays a little while ago to look at the cars downstairs and there was this beautiful Thunderbird. But taking that out of the equation, today, if you travel to Africa all these beautiful Mercedez and BMWs, you are able to travel through Africa because the roads are there today. If you travel to a little remote town in Africa today, you will be able to order a cold beer. And the guy be on the counter is going to talk in his [ offer ]. Africa is rapidly changing. Africa is one of the large potential growth opportunities in the world, an area reaching natural resources and highly undercapitalized if you look at its potential in the future. But Africa is catching quickly. It's catching the western world. Africa is going to be there within 10 or 20 years, and we need to prioritize that. We have to take the cognizance of the fact that China is heavily investing in the infrastructure. We are in South Africa are poised to grab these opportunities. We have a well-developed infrastructure. We have excellent highways, excellent roads, ports, harbors. We are the gateway to Africa because it is lying on our doorstep. Now South Africa is a member of many free trade organizations, Europe, Asia, and we can call them. We have in 1 of the few countries that has an independent and privately owned reserve bank. And it's main work is to protect our currency, that 0.75 basis points of yesterday did hurt our currency, let's say. But the interest must be bad, that it must be a balance and sustainable economic growth path that they must follow. Second, it varies, closer to heart, closer myself. In 1672, a town just south of Geneva called [indiscernible], there was a guy called Nicolas [indiscernible]. He immigrated to South Africa. What the parallel start that must have been. And that's why I thought I'm going to get a Swiss citizenship, but gave at least a 3-year visa. Now our family-owned business was founded in 1876 by that up its first dairy plant in 1955. And we're 5 brothers in the business. We started to take a dairy in about 30 years ago, in 1995, I think. Today, we employ 1,500 employees and have grown into a corporate business with all the structures to ensure good corporate governance at the highest level with our emphasis on people. Our role as a family has changed to be a responsible shareholder focusing on the strategies and the way forward for the company. We walked the talk when it gets to vertical integration. I think we have seen some of the photos, the video outside, we have [indiscernible] 2,600 cars and produce about 100,000 of milk a day under 1 facility. That's just 1 of them. We are situated in Cape Town, South Africa. I still believe one of the most beautiful cities in the world. It's in the Western Cape province, which is 1 of 9 province in South Africa and approximately 3x the size of Switzerland. The fantastic thing of Switzerland is it doesn't matter where you are, you're always 3 hours away from another place, not in Cape Town. We own 35% of the market in South Africa when it gets to fresh. And due to the fact that fresh one is declining and aseptic filling was growing, we decided in 2016 that we need to enter this market. Today, we own 70% of that market in -- within 5 years. Sold 85 million cartons last year in the Western Cape. So for interest rate, South Africa is experiencing double-digit growth in the aseptic filling as well. We have won numerous awards. And as the time is over, I'm not going to go into that at all. Although we did one of the best long-life milk in South Africa, again, yes. Culture eats strategy for breakfast, Peter Drucker said. Someone asked us many years ago, what is your culture in your business? And after long and our deliberation, we came out and like 12-year-old boy say, I must say conceive the idea. I don't know where it gets that. But eventually, we decided on a matter of do the right thing. We're going to enforce that in our business. We're going to start to get that as a culture. Culture is something that you have to drive. Culture is something that you have to teach. Culture is something that you have to be yourself. Otherwise, it won't become automatically in new business. We had [indiscernible] driving growth based on uncompromising quality, that's number first thing. And secondly, a commitment to ethical business practices. We're doing the right thing always in the back of man. -- everywhere in the business where you go, you will find process, advertising, do the right thing. Human right, state of human rights, have a positive attitude, seek opportunities for self-development, be honest and ethical. Everywhere you go, you'll see those posters. Yes, amazing. The only way to feed 8 million people is through commercial farming. It must be sustainable. The processing and marketing of nutritional food and digital information. You have to have that. There is no other way to feed this world. To be sustainable business must contribute to the well-being of this planet and its people. And that is where we get to the 3 pillars of sustainability, which we've talked a lot about today. And the first one is social welfare in no particular order. We do inspire to play a meaningful role in our communities. Through the involvement in uplifting and training of our own employees, we believe rather to use and train an employee, then be stuck with unskilled labor force. So that's 1 of our highest priorities. We have an NGO called [indiscernible], where we have forced into partnerships with organizations, that's not in our community. And through that [indiscernible] all began. It kept him going. The second one is animal welfare. We have committed to environmental sustainability by protecting our natural resources. We take care of our environment through sustainable agricultural production processes. We have to do that. There's no other way. In order to fulfill our abutment to our model and to further reduce our carbon footprint. A couple of years ago, we put the first solar plant on the roof of our dairy. And last year, we launched a megawatt plant at our distribution facility. [indiscernible], of which South Africa has so much to offer. There's a lot of space left in that area in South Africa. Now SIG is a highly innovative packaging concepts with its money technology that clearly fits into this category of arcade as well. Animal welfare is the foundations on which we build our business ethics. We understand that if you treat your cars well with consideration for health and well-being that she will be a productive animal. We like to call a happy car. Our farmers are all audited on these 3 pillars whenever we do the statutory order, enforcing them to live up to the values of beat as such. To enter Africa, you need the right product, the right packaging and the right partners. And that is where SIG has played such a pivotal role in our business 5 years, 6 years ago. Since our inception in 2016 in the UHT product category, Eladib and his team is playing an instrumental role in helping us to build a brand. And we're in the process of installing another machine. You said it's on the ship, a fantastic, Juhayna is waiting for it. With SIG technical experience and flexibility, as we have to run many lines, 19 in total on 2 machines currently. Combined with the commitment of doing the right thing, we are running our operation according to SIG themselves. You saw it out there to be in the top 10 in our group. And due to our vertical integration, we do have a food processing company called [indiscernible]. And we're currently investigating the sustainable bag-in-a-box solution because that is what you need to enter Africa, it's a perfect fit -- will be a perfect fit for us in order to export to Africa. We are the gateway to Africa. And with SIG as our partner, we will take on this momentous task. And I'm confident that we will be successful. It's going to take some time, that we know. Eladib, thanks for your input. Thanks for inviting me. Thanks for your friendship. Thanks for your leadership. We will go a long way. I thank you for that.

Thank you, Eduard. It's actually a pleasure and honor working with you. And as I said, the machine is on the ship. And also, it's a great honor to actually working with you as 1 of our first customers to introduce bag-in-a-box quite soon. So to conclude, EMEA is really a growth region for SIG. Our growth focus, as you've heard, is category expansion, focused on dairy value-add and food, geographical expansion is definitely a great opportunity. We have the right tools capabilities. You've heard about technology center, you've had about reliability centers. You heard about our all great tools with SIG. And now to conclude with our expanded offer of the Scholle IPN, what best can we offer to our customers and cater for their needs about that. Thank you for listening. And I'll now hand over to Ricardo that talks us to the Americas. Ricardo?

Thank you, Abdelghany. Hello, everyone. So my name is Ricardo Rodriguez. I'm President and General Manager for Americas, SIG in Americas. I joined the company 17 years ago -- sorry, 19 years ago. I'm [indiscernible]. And very, very glad to speak about this amazing region, Americas, right? So America is a very diverse region, first of all, where SIG is very well positioned to keep delivering growth in key markets. So we start with the U.S. and Canada. U.S. and Canada are our co-packing markets. where we operate with a solid base of co-packers. They are mostly focused on food service, but also in the fast-growing categories like plant-based beverages, food, and also nutritional drinks. Mexico. Mexico is a large market, highly consolidated, very strong in dairy, where we operate with all the leading liquid dairy companies. Brazil. Brazil is the second largest carton asset market globally, where we see strong presence of regional leaders and also global accounts. Over there, we have built a solid base of customers. I will also talk about the neighboring countries of Brazil. So the so-called the region that we call PACCE, Peru, Argentina, Chile, Colombia and Ecuador. And over there, we have made very important inroads in the last 3 years. So in this large region, we have been expanding our business consistently in the last year. So we have -- we are showing double-digit growth, so close to 14% constant currency within the period '18 to '21. This has been driven by, first of all, the successful partnerships, but also best-in-class TCO, filler flexibility, which plays a very important role, especially inflationary environment and also the format innovation. So now with the bag-in-box and this [indiscernible] pouch business. We understand we are even better positioned to enter multiple accounts to grow in multiple accounts using the cross-selling opportunities. and also considering given the strong footprint -- production footprint in the region. So having said that, let's better explore the positive outlook of this region, starting with North America. In North America, we are if we are working on specific initiatives to accelerate growth. So we're starting with categories. We plan to keep delivering innovation in format and shape in the U.S. and Canada through our co-packing hubs, delivering innovation to serve our fast-growing categories like plant-based, like nutritional drinks and food, as we see in the chart on the top right. So in terms of channels, food service and quick service restaurants. They also operate through our co-packers, and they are growing consistently, especially after the pandemic, where when driven by when the consumption of NCSD and soft serve ice cream has been really growing strongly. So moving to Mexico. Liquid dairy remains the most important segment. And we have over there innovated with innovative formats and also with superior our best-in-class TCO. They are really key to success. So our new production plant in Queretaro, which goes live in Q1 '23, will serve the whole North America markets -- capital markets, allowing SIG to react better and faster. So this new production plant has a very flexible layout, and we have a starting capacity of equivalent to 1 billion packages per year. With this plant, SIG will be allowed to serve the region with full potential and to enter new categories in North America. Imagine, for instance, the school milk program in the U.S., which is equivalent to 7 billion packages per year and which is gradually shifting from fresh to carton aseptic. Complementing our growth strategy in North America, the recent acquisition of Scholle IPN definitely amplifies our presence in that market and creates cross-selling opportunities. So instead of talking more, why don't we hear from the customer perspective, from the client perspective, what they are experiencing, how they are experiencing the partnership with SIG.

Hello, everyone. I'm Eduardo Ramirez, Commercial Director for Coca-Cola Santa Clara. I'd like to share with you some thoughts based on my experience working with SIG. The relationship between Santa Clara and SIG began in 2006, while my experience is more recent. In 2012, when the Coca-Cola Company acquired Santa Clara, I had an active role in due diligence. And I understood all the potential of combining a Coca-Cola brand with a unique technology and package solution of SIG to become the most preferred brand within white and flavored milk. For the past years, we have been continually growing double-digit year-over-year. And today, our production capacity is not enough to satisfy the demand of our clients. The most recent decision to bring 3 new fillers to our installed base is the evidence of 2 main assets that Santa Clara has the strong commitment to become the most important brand within the dairy market and that we see SIG as the right partner to achieve our objectives. I'm confident that the reliable technology offered by SIG and the very talented and passionate teams of both companies have been and will continue to be the perfect combination to write a unique story within the Coca-Cola system worldwide.

Fantastic. So after this amazing testimonial from a liquid dairy major player in Mexico, let's move further south and better understand how we are succeeding in South America. So innovative formats and volume flexibility are driving our expansion in major clients in this area, not only in core segments like the liquid dairy, but also in the emerging categories, like plant-based and nutritional drinks. The expansion in the neighboring countries of Brazil in partnership with global accounts and regional leaders is also generating many opportunities for SIG and is leveraging our production capabilities, so our production footprint in Brazil. By the way, we have, after implementing a number of projects in these neighboring countries, we have just signed some weeks ago our first filler in Colombia. So complementing the SIG value proposition, we are leveraging our digital capabilities to strengthen our offering. So based on that, SIG has set up a reliability center in Brazil, where we service our fillers and monitor OEEs all remotely. In addition, our best-in-class track-and-trace solution is giving customers opportunities to differentiate through product traceability, through certificate of origin, OEE improvement and definitely logistics controls. Moreover, the spouted pouch to fill fruit puree in Chile. And the Bag-in-Box supplied to agriculture solutions in Brazil, they are showing very exciting opportunities. So in a nutshell, as mentioned in the beginning, Americas is a resilient market where SIG shows a very solid trajectory of growth, which is expected to continue as we first partner with the right guys. So with co-packers in the U.S., with the leading brands in Latin America to serve the growing categories; two, offer filler flexibility and best-in-class TCO; three, innovating formats and also through digital; fourth, expand geographically as we have seen in the neighboring countries of Brazil; five, expand our production footprint, which is the case of the new Mexican plant. So once again, instead of sharing additional facts, why don't we hear from the CEO of Nestlé in Brazil about the partnership with SIG.

good morning, everyone. It is a pleasure to talk to you about our relationship between Nestlé and SIG. We have started to work with SIG in Nestlé Brazil in 2018. From this point, we took a decision to start moving all our lines or many of our lines from Tetra to SIG, and it has been a great, great experience. First of all, all the KPIs that we had committed in terms of productivity, in terms of speed, in terms of flexibility have been more than achieved. This has been a very great surprise for everybody because we know that sometimes when we have new projects, what we put on the plans and what we achieve can be different, and in this case, was not. There is also another part which is the sustainability point of view. In the sustainability, back there, we were the first company to introduce the paper straw on our NESCAU brands. And the paper straw was a huge partnership with SIG, and we use this as a flagship in order to explain all the commitments and all the challenges that we have in the sustainability front. So we have many other initiatives with SIG, but it has been a great journey, and we are very excited to see the next steps, the new proposals that we have together with SIG that can be a partner for innovation, for productivity and for sustainability with us. Thank you very much.

So I hope you have enjoyed the video. I'm really very proud of the words I have heard. So with that, I conclude on Americas and hand over to my colleagues in Asia, more precisely to Lidong in China.

Thank you, Ricardo. Good afternoon, ladies and gentlemen. This slide summarize the Asia Pacific region, where you can see our general successful factors, including our ability to innovate, our lowest overall TCO, our sustainability capabilities and, of course, we will capitalize on cross lead generations following our recent acquisitions. I will take you through Asia Pacific North and Angela will take you through Asia Pacific South. For those of you who don't know me, my name is Fan Lidong. I'm the President and General Manager of Asia Pacific South. I have been with SIG for 12 years and in the packaging industry for more than 30 years. Packaging in China has changed a lot over this time and so have the ways in which people consume. Packaging has played a central role in meeting the evolving needs of the consumer and in helping food and beverage companies to constantly innovate. Today, I will share with you how China continues to be a large and growing market despite the restrictions imposed due to COVID. Let me remind you that China's per capita consumption of raw milk is today about 30 kilos per year. 25 years ago, it was barely 3 kilos per year. And there is still much potential to grow when you look at Taiwan and Japan, who have a consumption of 70 kilos per person per year. SIG has the product and the capabilities to grow in this exciting market and our recent acquisition of Evergreen Asia will allow us to accelerate the growth in the chilled and the aseptic market. Our proximity to the customer and our strong local relationships have been key in establishing our presence supported by our manufacturing operations since 2004. Key to the growth in our share of aseptic carton supplied to 18% has been the strong relationships with our both Yili and Mengniu. Yili and Mengniu are not only 2 largest dairies in China, they are among the largest dairies in the world. We have worked closely with them to co-develop new categories such as Ambient Yogurt. Until now their business has been mainly focused on aseptic dairy, but they are looking into diversify more into chilled. Through Evergreen, we will be ideally placed to accompany them on their journey and to further impact our relationship with them. In addition, the Evergreen Asia acquisition brings us a number of new customers, including large regional players. With our focus on technical excellence, underpinned by our tech center and our strong local service teams, we can provide these customers with new levels of efficiency and innovation. Innovation is very much in our DNA as our strong track record shows. Given the changing diets and the consumer preference, in 2018, we opened our eighth servicing tech center here in Suzhou, representing a significant milestone from SIG presence in China. Our promise of excellence engineered solutions delivered has gone hand in hand with innovation. For example, in 2017, we launched the combismile, enabling us to expand into a premium segment for liquid dairy. Since 2017, we have sold 5.6 billion units of combismile and they contribute 20% to our total volume growth in China in 2021. Today, combismile is sold across the globe but continues to be produced here in Suzhou. We are excited that in Q2 of next year, we will be launching our differentiated small format, which will be used to pack liquid dairy, ranging from 200 milligram to 350 milligram. The consumer is demanding new, creative and innovative packaging solutions, and there is a strong demand in this category for packaging with a large sport and a convenient way. Besides our strong position in white milk, we have expanded into categories, including flavor milk and yogurt, and we see new opportunities in adjacencies like plant-based milk and of course, chilled milk. In the chilled milk segment, Evergreen is the leading manufacturer for the table top format with a share of around 50%. We expect that the increasing number of consumers of chilled milk are thirsty for innovation and for formats that reflect their modern lifestyle. With our R&D capabilities, our experience of launching new formats, we are ideally placed to maximize the chilled milk opportunity and to help our customers drive further growth in the segment. Of course, we are doing all of this with a focus on sustainability. We are driving the introduction of ALU-free cartons in China as our customers increasing their focus on sustainability. Yili announced in December last year that it will launch their first ALU-free aseptic carton. The brand is certain, which is positioning a high-end white milk segment. We have set ourselves a business target to strengthen our sustainable portfolio. We are aiming to upgrade all of our position of portion packs produced by SIG China to be ALU-free within the next 5 years. In January 2022, we announced the acquisition of a chilled dairy business of Evergreen Asia. We are excited to increase our exposure to liquid dairy. In China, milk is increasingly seen as an important source of protein, good for health, representing an attractive growth opportunity for chilled as well as for aseptic milk. As chilled milk is mainly consumed at home, this acquisition broadens our consumption opportunities and our format range with an increase in family size packs. The share of chilled milk in China is still relatively low and it has strong growth prospects. We are ideally placed to maximize this opportunity and to help our customers grow further growth in the segment. As part of the acquisitions, we have identified cost synergies of EUR 6 million. These synergies will come from savings and efficiency improvements in production, procurement and the back-office operations where we see tangible revenue synergies and commercial opportunities. Now I would like to share a short video from our customer, New Hope Chairman, Mr. Xi Gang. New Hope is the fourth largest dairy in China, and their strategy is go fresh.

[Foreign Language]

In conclusion, I'm excited about the growing opportunities in China and the region. We at SIG have the products and the capabilities to grow in this dynamic market. And finally, our acquisition of Evergreen will allow us to accelerate the growth in the chilled and the aseptic market. Thank you. I'm looking forward to seeing you all in person soon. Now let me hand over to Asia Pacific South, Angela.

Thank you, Lidong. Thanks very much. My name is Angela Lu. I'm the President and General Manager of Asia Pacific South. I just recently joined SIG from beginning of this year, came with the FMCD background, 25 years' experience in the F&B industry. So I have spent more than 10 years with Nestlé across dairy and nutritional business in the different countries, including Switzerland, and key Asia Pacific countries such as Thailand, Australia, India, China and also Singapore. So with this, also, I think that this is a great opportunity for me to lead the Asia Pacific South region because our region comprise of Southeast Asia, ANZ, India, Bangladesh and Japan. Our growth strategy in the region, including geographic expansion, especially in India, continue to drive and win in the liquid dairy and also accelerate in the new category. So let's look into the India. Why India is so important for us? India is the #1 aseptic carton market for our region. It's growing at 14%, which is double of the regional average. Liquid dairy and also NCSD are equally important for us because 46% of the aseptic carton market is in liquid dairy, while 54% is in NCSD. We started the journey in India from 2018. That's when we started with the 2 fillers in the market. Now we are operating 9 fillers in the market, and we are deploying 20 fillers in the next 12 months. So by end of next year, we will have 30 fillers in the market operating. With such great momentum, we are aiming at setting up local manufacturing by 2024. So I am extremely excited about this because I believe with the local manufacturing, we can further accelerate the market development India. Why customer trust us? And also what is the reason why we are gaining such a strong momentum. This is really thanks to our system performance. Can you please go back to the previous slide? Thank you. This is really thanks to our system performance and also flexibility of able to feel the different volumes on the same machine, same filler that has enabled our customer to capture critical price points of the INR 10 while maximizing the capital investment and also with the market-leading TCO. So why INR 10 is important? Because in India and also Southeast Asia, many of the consumers still have a very low disposable income. So the low denomination of the coin is very, very important. It's a magic price point to capture the mass market. We also have a very strong system performance and also ease of operation for our machine, and that is much more relevant for India and Southeast Asia markets. So we also continue to win and grow in the liquid dairy with top players across 80 south countries. And also, we are accelerating the growth in the new categories. However, no matter how many of the great stories that I wanted to tell all of you, but in order for us to catch up on the time. So I will -- let's move to the Cimory. Okay. So we believe the acquisition of Scholle IPN and also the announced acquisition of Evergreen Asia is able to further establish SIG as a strategic partner to provide the total filling solution to enable our customers to capture wider consumer needs, different target consumer categories and channels. Cimory is the best example in that. So I will not repeat the slide here. Let's hear from Cimory's CEO, Pat Farell, to talk about why he choose SIG as a partner to deliver his ambition.

My name is Farell Sutantio, and I'm the CEO of Cimory. Cimory is the manufacturer of premium dairy and consumer food products based in Indonesia. The company was founded in 1993, and we listed last year in December in the Indonesian Stock Exchange. We are one of the fastest-growing dairy manufacturers in Southeast Asia. Last year, we managed to grow by 120% in top line. And this year, we are projected to grow another 40% to hit $400 million in revenue. We were able to achieve very strong growth due to our focus on product innovation. In the yogurt segment, we were the first to launch yogurt in the pouch format in Indonesia. The innovation was very well received. And now it is the largest yogurt brand in the country. In the HT milk category, we launched UHT milk in different flavor variants, bringing exciting innovation to an otherwise mature category. Currently, we have perhaps the largest assortment of UHT milk in the world with 16 flavor variants from cashew, almond, banana, blueberry and other formats. Our focus on innovation require partners and suppliers that can offer both reliability and flexibility. And these are the 2 main factors that we considered when we decided to partner with SIG for our new factory. The flexibility of SIG fillers to fill in different size formats allow us to cater to different market segments without compromising machine utilization rates. Prior to the purchase of the SIG machines we are currently installing, we are already partnering with Evergreen for our fresh milk and IPN Scholle for our pouch yogurt. So we were pleasantly surprised to see the acquisition of these 2 companies by SIG. Lastly, as a company that is strongly focused on social impact, we also see shared values with SIG in trying to bring safer and more affordable nutrition to Indonesian people. We hope that going forward, we can partner better with SIG to bring more interesting innovation to the Indonesian dairy category.

So with this, we concluded our regional growth stories. Thank you very much.

Thank you very much, Angela, and all the regional colleagues. I hope we were able to excite you as excited we are about the opportunities there. Now it is the destiny of the CFO to follow business as numbers follow business. Frank join me on stage here. You're going to translate now the value that our colleagues trade for our customers now and how we create value for our shareholders. Over to you, Frank.

Well, thank you, Samuel, for the introduction. And I'm very pleased to see many of you here today, finally in person after all the virtual meetings that we've had. So it's excited that we can have a direct dialogue. You've heard from my colleagues about how SIG is performing strongly, how we have great opportunities in the market and how together with the acquisitions, we're getting stronger. And then really, those achievements and those opportunities, they underpin the best-in-class financial profile that we have delivered and that we expect to deliver going forward. In the next few slides, I want to take you through some key aspects of these profiles. Let's start with a look at the pro forma combined financials that we shared with you previously at the announcement in February. Very clear, it's a best-in-class financial profile that's underpinned by these numbers. You can see that the core remains the carton business. Around 70% of revenue and EBITDA will still be contributed from our traditional business. At the same time, we're excited about the opportunities that are being provided by both acquisitions. So just closed at the beginning of this month, Evergreen Asia, we expect to close soon in the third quarter. We look at these businesses with great growth opportunities, but also these business contribute attractive margins for packaging businesses even if they're lower than our existing margins. And we have clear plans, including particularly the cost synergies to drive the margins up so that we continue to deliver the best-in-class margins and the margin improvement that we have. Also, if you look at adjusted EBITDA minus CapEx as a proxy for cash generation, pro forma is a generation of over EUR 0.5 billion of cash with a 75% cash conversion rate. Clearly, again, a part of a best-in-class financial profile. And I now want to look into more detail at the top line level that we see, where you've seen we've developed since the IPO, a clear performance that we deliver in or above the medium term guidance range of 4% to 6%, and we expect to continue that development even in the upper half post the acquisitions. We have a diverse set of growth drivers, which also support the resilience of the business. Yes, it starts with the underlying market growth. Yes, our markets are growing globally about 3% to 4%, and that is really driven by important trends such as population growth, urbanization, income growth and also the growing trend towards packaged food. At the same time, you've seen and heard how we're gaining and winning with our customers. We're gaining share of wallet from existing customers. We're converting new customers to SIG technology and products that also drives the underlying growth. The other driver is the expansion. The driver -- the categories we see here is in geographies. You've heard about our expansion in India in the Apache regions. We go into new categories, plant-based nutraceuticals, the Ambient Yogurt example in China, this is where we're working with our customers to drive growth. And finally, the channels, the new channels that are particularly contributed by Scholle IPN in the industrial, in the food service and institutional area. Those are all important vectors for growth for us. And last but not least, we see substantial revenue synergies from our acquisitions. We're bringing Bag-in-Box and spouted pouch products to the emerging markets. It's leveraging our platform that we have with the existing customer relationships, the tech centers, the field service forces that are really a growth driver for these businesses. At the same time, we've heard about a lot of cross-selling, cross lead generation and also our innovation that we can leverage here to drive new products and new solutions for those customers. All of this underpins the growth expectation we have for the business and confirms also our medium term expectation to grow in the upper half of the range of 4% to 6%. We now look at the bottom line, at EBITDA, at our margins. Yes, we have delivered best-in-class margins, and we continue to do so going forward. There are 3 really margin drivers that I want to highlight here. We talked about the synergies, EUR 17 million for the Scholle IPN acquisition, EUR 6 million for Evergreen Asia. That's 90 basis points of margin improvements that gives us a good way towards our medium term target of 27% and above. But there are other drivers. Yes, we look at the acquisitions as they drive revenue synergies. Those revenue synergies come with higher margins as we expand in geographies that are attractive as we expand the products that are attractive. Similarly, more of a development toward solution selling at the acquisitions is something that will also drive margins in those businesses. But last but not least, and I think it's important because it is still at the heart of our financial profile. The margin drivers that we've seen in the carton business remain intact and will continue to benefit from those. With the growth comes to operating leverage. Yes, we're growing faster in higher-margin regions in the emerging markets. Innovation allows us to give value-based pricing and our customers value this. And finally, we continue to have efficiency gains in productions that help us drive margin. All of this combined gives for us the confidence that we'll continue to not only deliver best-in-class margins, but also continue the margin expansion to over 27% in the medium term. So if you look at top and bottom line that drives the cash flows for our business and it's really then a question what's the capital allocation that we're driving. Three elements here and really the priorities are consistent with the profile that we've had and will continue. First, investments. You all know our disciplined approach to investments, both in filling machines as well as in our plant and equipment. They are focus on achieving attractive return on capital employed last year at 31%. We continue with this approach, and we also continue to spend approximately 7% to 9% a year of net capital expenditure to revenues, so that we grow the business with our investments. Secondly, dividend. We offer growth to drive our share price, but we're also committed to an attractive current return to our shareholders. We have maintained our dividend policy with progressive absolute dividend growth per share. And we also maintain our payout policy of at least 50% to 60% of adjusted net income. And there's the third element, leverage. Yes, we're repeating effectively the leverage reduction that we've done since the IPO. We want to get about 2.5x in 2024. And in the medium term, unchanged, our target is to delever towards 2x. So the story also with capital allocation stays consistent with the priorities we've had in the past. And it also drives, obviously, our balance sheet and our financing strategy. You've seen how we delevered since the IPO. We've achieved that while also making small acquisitions with a busy buyout of our licensee and also the buyout of our joint venture partner in the Middle East. So there's a clear track record that we've established. And that's also why the rating agencies confirmed our ratings of BBB- from S&P and Ba1 from Moody's, both was a stable outlook because they can see how we're deleveraging with strong cash flows and earnings growth. At the same time, we've said we will have a balanced capital structure. We successfully raised EUR 200 million of equity in the capital raise in May. And we will raise incremental debt of EUR 900 million, where we're currently accessing the German Scholle China promissory note mark, which is a stable and very attractive source of financing for us. We also have access to both the bond and the bank debt market. And all of this gives us the ability to refinance attractively the bridge facility that we have that gives us 18 months to run. With all the financings, if we finish at the current rates, we expect that our total cost of financing will be about 2% of the total debt, including the existing debt as well as the newly raised financing. So if I combine all of this and conclude this, our mid-term financial guidance really underpins that the financial profile remains best-in-class that we continue to deliver revenue growth in the upper half of 4% to 6%. Our EBITDA margin will grow to over 27%. Net CapEx stays between 7% and 9%. And attractive dividends with our dividend policy of a payout of 50% to 60% and growing every year. And finally, leverage remains on the trajectory towards 2x in the medium term with a milestone of 2.5x at the end of 2024. So with that, it's really the summary that we continue to deliver a best-in-class financial profile that also hopefully then delivers value for you. And I would now like to hand over back to Samuel for his conclusion.

Thank you so much, Frank. Why don't you stay with me here because we're going to soon open up for Q&A. I just want to thank you for your attention here in the room and also on the online channel. I hope we were able to bring across, and I started the afternoon with the fact that the world needs more and more safe food, and the world needs more and more sustainable solutions. And I made the bold statement to say that we are part of the solution. And I hope we were able to bring it across with our technology and our capabilities and how we bring it all together in the market. I want to thank our customers, the ones in the room here and obviously, the ones that gave all this great testimonials, for being with us, we're extremely proud to be able to work with you and very grateful that you made the way here or took the effort to capture your thoughts, your feedback to us on video. And I think that's how we operate in partnership, and that's the spirit we wanted to share with you. And with this, I want to take it, not any longer, but really open it up for Q&A here in the room but also online and reinvite my colleagues from the regions back on stage. And also, we're going to see on screen here, Fan Lidong. As a further proof, he's live with us, and it's late in China, but I think thanks a lot, Lidong. Open it up for questions, please.

We need a mic here in the front row. Alessandro Jörn or Jörn Alessandro, I think.

The first question would be, please, on India. Just to double check the 20 new fillers to be installed by 2023. Is this organically? Or is this is including something from Scholle which is now added, just to double check this. And then maybe also regarding the filler plans going into 2025 and to which customers this is going exactly? And the next question, I would -- there is one more.

Sure, yes. So I'll answer this question first. So the 20 new fillers are obviously new because we are still entering the market and then all the fillers that we're going in are the new filler. And it's going to be not actually end of 2023, it's s within the next 12 months, which means it's actually mid of '23 to deploy these -- all of these 20 fillers.

All organic, all SIG.

Yes. Yes. Then 20 -- just now you have another question, '25, right?

Yes, by 2025. I mean this is a filler, right, can be mentioned to extrapolate.

So we are very, very ambitious in the continuously at least 10 fillers each year or even more. So we are looking at continue to maintain this momentum. Then the second one is that, of course, customer-wise, we are looking at all the key top NCSD players and also key liquid dairy players because we are already partnering with all of them already at the moment. So of course, those customers, we will continue to work with them to capture opportunities. They are expanding. We will want to also support them continue to expand in the market.

And the second question maybe on Europe. On your slide, you mentioned you see good growth coming from the trend away from cans and PET towards cartons. This topic is not totally new, but you will send it is, and this is a growth driver. Can you quantify this? This 1, 2 percentage growth to your European performance every year roughly?

No. Right now, I cannot quantify that for you. Sorry, I would not have a number at hand to give that to you. We do see that opportunity. We have lots of talks with many customers about it, but there's some of these trajectories can take very long or very short and go very fast. I wouldn't say that it's this amount within my growth trajectory.

Please go ahead, Alessandro.

2 questions. Can I ask them also one by one?

I think it makes sense.

Great. First, on the -- let's say, on the North American market, I don't know who wants to answer, but you're talking, I missed Ross, but anyone. Maybe you can answer. On the co-packer side, can you share with us how many there are there and how many you work with and how many you can penetrate, thanks to Scholle?

Yes. So I will not have very precise numbers, but I can at least share the order of magnitude, okay? So first of all, in high acid in North America, it means acid products, refreshers, for instance, that we supply Starbucks. We work with literally all of them, okay? So with all the big guys, we are -- we do business with all of them. There are roughly 4 companies that supply in the, let's say, all the co-packing service in carton. And low acid is a different story because over there, we have still a very low penetration in food service. So -- and it's -- and then it's a nice story when we see Scholle. It has excellent contacts with all the big guys in low acid. And then we are talking about a number, less than 10, but let's say, by Scholle, with the Scholle coverage in the U.S.

And do you have an idea if -- once you penetrate then, if there is an additional growth on the North American segment?

I'd say that the low acid is as representative as the high acid. And the highest business for us is absolutely important in the U.S. in terms of -- especially in terms of cash generation.

Okay. Let's leave it at that. My second question is more related on the financial targets. And some of you had a slide at the very beginning where you mentioned the market growth rates of the 3 segments, how you put it up 3.5%, 3.8%, 5.8%, if I'm not mistake. I imagine you want to outgrow that, plus the synergies. Frank talked about that. Everybody talk about it. I come to more than 6%. It's just pure simple mathematics.

Yes. I take that as a positive feedback that we did a good job today in that respect that we were able to share and convey the conviction we have for the market. And I think we also have a track record of outgrowing the market, and that's clearly the ambition. We were clear that we believe that the acquisitions, they are not about the cost synergies. That's attractive. You show it the 90 bps, but it's really about the top line opportunities. And that's why we talk about an acceleration of growth. That's why we guide to all the upper half of the 4% to 6%, and that's a mid-term guidance. The mid-term guidance is something we want to continuously be able to deliver on, and that's the ambition where we are. And I think if you look at each other in a couple of years from now when you say, absolutely, we over delivered. I mean we are the last ones to not change our ambitions. But I think it's a good start, and it's also not something where we want to be in mid-term. It's something and you have seen that since IPO. It's the corridor we usually use to work within a given year.

Right. And the follow-on, so this is questions to be on the CapEx. 7% to 9% seems to me -- at least it's higher than what I had in my model. And I wonder why I thought that Scholle has maybe 4% CapEx. You guys have been at around 8%. So if I make the sum, I don't get to 7%.

Okay. No, I think -- I mean, the guidance of 7% to 9%, yes, we've actually previously guided 8% to 10%, but with the acquisitions and their business model, which is less CapEx intensive and also our increased efficiencies that we have in terms of deploying capital. We've then lowered it to 7% to 9%. And that's, I think, a range that allows us to invest both in the operating assets of our business, the plants, et cetera, as well as also the net filler CapEx in order to grow organically the business. So that's where -- that's the range that I think we're very comfortable with.

I saw that you reduced debt. I just wonder, so Scholle is above 4%.

Yes, that's around about the number. For their business because they don't have the co-investment in the fillers. A Scholle filler is usually a few hundred thousand euros or dollars, whereas our fillers are a couple of millions. So there's also a different kind of order of magnitude in terms of capital required for customers. And so that's where there's a difference in the business model.

Thank you. Question number three, very quick. That's for China. You showed that you work with Yili and Mengniu, then you showed all the #4 dairy players. So we have #3, #4, #5, I wonder about the remaining of the top 10 in China. Do you work with them? Yes or no? Do you have a big share, yes or no? And what is the contribution of Evergreen? Because you mentioned that Evergreen brings a lot of new clients. I wonder if you now can have a full range from 1 to 10.

Yes. If you look at the 1 to 10, 9 of them actually is already our customers, probably one of that is not. But in fact, actually, we have 400 dairy players in China. When we see a small customer, actually, it's not small, regional customers, we better talk about top of the 50 dairy players that probably is -- in this case, I think because they have a long history, they have already penetrated some regional or provincial players that we could benefit.

Yes, I think we can hand it over here. I think you have a mic already. Thanks, Lidong, and thanks, Alessandro for your questions.

Yes. [ Tobias, UBS ]. I had a question still on the synergies and try to understand it a little bit better. If I recall it correctly, 2 regions, you will have not integrated divisions in terms of Scholle and then former SIG, and you will run them separately. And in the other regions, you are probably going to have an integrated model. So I was wondering, do you need different salespeople and who is in charge in these regions where it's not integrated? Is it the regional heads who is in charge of it? Or are you running to, let's say, go ahead in the regions and who is in charge of maybe making sure that also in these regions, you have -- you are getting to the synergies. And to this point, maybe are you speaking to the same people in terms of SIG and in terms of Scholle? Or is this a different kind of organization in this company which are clients, which are, let's say, taking the decision in this regard.

Sure. I mean, we touched on it briefly in the morning. We don't intend to bring together a sales force or the sales manager because it is a complex sale to sell a carton system, a Back-in-Box system and a spouted pouch system. Also Scholle IPN today has dedicated sales force for spouted pouch and Back-in-Box, and we won't change that. We have 3 different sales managers that are professionals in their respective fields. In the normal approach, how we work with customers because we have so many touch points given that we are deeply embedded with our customers that we do codevelopment. We talk of an account team. And an account team normally consists of a sales manager who happens to be the key account manager, the lead and marketing account manager, a service account manager, and they form together the account team. And now in the setup that we're going to go forward, we're going to have whenever a customer uses more than one of our solutions, not only the carton, but like the Cimory example, has also the fresh carton, has also the spouted pouch, then those 3 substrates have one sales manager that has the expertise in the system. But one of the 3 is the lead and is the key account. So the customers have a single point of contact, and we already said today, as Angela's depth of expertise when it comes to FMCD background. So the marketing we provide and also the service account management we can provide. So that forms the account team. It's always the same set up, sales, marketing, service. And if sales goes across multiple substrates, one has the clear lead to the customers on facing escalation point. Now you're absolutely right. It's a bit different between Europe and Americas, where we have both established organizations and basically the rest of the world, where our infrastructure is the perfect platform for Scholle colleague or speculative products to be launched. But it doesn't change anything in this way how we interact with the customer. What I just described is true for all regions. The only thing that is different is that in Europe, we have a European lead, European manager for the spouted pouch and the Bag-in-Box business and someone for the overseeing for the carton business. And the same is true for North America. And there, we don't want to bring together and bring management layers together because there's no synergy created which starts confusion. We want to have eyes and ears out in the market. But there where, for example, Abdelghany is just setting up operations. There is no one there. He is the harbor for all these competencies to build them up and we can leverage our platforms. And that's how we intend to run the business. I think from a global perspective, Ross, who you have met this morning and who has been with us in the first part today, he oversees the entire P&L. And with his central team, he provides the support that Abdelghany needs now to build up his expertise locally. And that's how we intend to run the business.

Okay. And just on my incentive, who is then having the profit in terms of if you are selling more in some of the region of the Scholle. Is it then both of them who are profiting, it's partly shared or --?

It is integrated regions, it's one P&L. So obviously, ultimately, it rolls up to someone like Abdelghany and also to Angela to integrate the P&L. And in the other regions, there's a cross incentivization so that we are fully aligned on what we want to achieve as an organization. I think there's a question over there.

So he mentioned the incentive plan. So I just want to ask you, I looked at the compensation report. And you have been pretty clear now about the targets, you want to focus on top line, you want to focus also on profitability. And yes, on the compensation report, the short-term incentive plan, but also long term, I see it's mostly like absolute, like, I think 75% is like EBITDA growth and the revenue growth, so more top line. So is that going to change now? So why you do not have more like profitability targets in there?

If you look to our LTI, we have 50% on the relative TSR then it is 25% each on free cash flow and also adjusted earnings per share. So if it's a one there is the profitability element clearly in there and also what we then convert into cash. If you look to the STI, I said it before, we have 10% on DSG targets, and the remainder is split between top line, but also clearly, the biggest chunk there is on the EBITDA. So profitability matters. I think from that perspective, we have a very consistent and coherent approach to align interest with our owners. Thanks for your question. Is there another question in the room? Or do we have someone online? Nobody online at this stage. Anybody else here in the room? I see you over there.

Maybe one simple question with the 2 acquisitions of Scholle and Evergreen, how many IT systems are you inherit?

You want to take that?

Yes, I can take that. So Evergreen Asia is on SAP, and we can have a plan to migrate that onto our SAP. So there is some proximity there. Obviously, it's a process. Scholle IPN has its own ERP system. And what we're maintaining is for them to run their operations. We're not going to do open heart surgery, but we will integrate that so that we have visibility of understanding what's happening in the business. So that we get the information that we can analyze the business and manage it while for the operational execution, they maintain their existing system until ultimately, all of the companies will have to make SAP rich and migrate to S/4HANA, and then there could be a migration path to bring them together, but that's down the line.

Thank you. There is one question over here.

Just on India, what are the last crucial hurdles you have to overcome to decide for the manufacturing there? And what are the criteria that you take, is it the same as in China? Yes.

Yes. So yes, so I think there are a few steps that we think SIG is already well-established. We go into the market, we started to grow with the local team. And once the local team is able to grow the business to a certain scale and then we see that we gain enough momentum and the volume is sufficient to start the factory, then that's the point that we decided to do that. I think this model we kept running and also for several locations using the same model, able to do that. So India is also at a junction that we believe we've already built up the momentum. And also, we have very strong local team. We are also partnering with all the key customers already, and that's the point that we decided, definitely, we are looking at starting local manufacturing.

And to find the location, you're currently looking into multiple ones, right?

Yes. Yes. We are scouting in the location in the moment looking into the different location and offshore options.

And that also is a playbook. We obviously look into tax incentive, you look into logistics, customer proximity, but that's an established playbook also there. Yes. Thanks for your question. There is one more. Maybe we go here first, Alessandro, please give this gentleman a chance.

I have an easy question. I saw you had about 31 plants, of which 15 were from IPN Scholle. And if you calculate the average plant revenue, it looks like the IPN Scholle plant is much, much smaller than the traditional SIG plant revenue. Is this -- why is that? Or...

I think it's well observed.

Smaller and it's possible to be bigger or...

I think that's a very good observation. There is -- if you say it's a simple question, it's also I think a simple answer to that. If you look to the CapEx, it needs to put up a Bag-in-Box or a spouted pouch factory, that's a fraction of what it takes to put a carton facility up. Most of you are familiar that also the first step of our manufacturing process with the extrusion is already EUR 40 million to EUR 50 million investment and then comes the finishing lines of the fully integrated one is $100 million plus from SIG. And we tend to have larger scale plants that operate at high output, and then our product travels very well. So we cover long distance. So we have rather this hub system, whereas the Scholle colleagues will be closer to their customers. And Alessandro, please.

One more for Scholle. We heard that the business model of the 2 companies are very similar. Client retention is very high. Client relationship are very long. The pouches are really fit to the machines. So you sort of need to buy a machine that really can run these pouches. But then we hear what you just said about CapEx for a percent of sales because they don't have to build up this co-investment layer that you have at SIG. It means the 2 business at Scholle are ultimately unbundled. So I wonder really how high is the competition in the machine business with Scholle. Are there competitors around who can come and basically pirate your business? How -- honestly speaking how?

We always speak on this, just to get that out of our way. But I think it's a good question. What is the system business on spouted pouch and Bag-in-Box. And I think, Ross, you explained it very well in your section, the capabilities under the roof of Scholle IPN when it comes to spouted pouch is impressive because it's the fitments, it's the filmmaking. It's with bazaar, it's the pouch making, it's the filling, it's the lamination, it's the printing. And there are very few that have these capabilities. And combined with the machines and leading edge machines, I think they have a very unique positioning there. Now obviously, it's not a razor, razor blade. It is not -- it's a system business, and they found other ways to get embedded in the customers' value chain to create this stickiness. On the Bag-in-Box side, it's with the wells that are connected to the freestyle machine that you've seen before on the spouted pouch and other reasons. But I think where we see the opportunity also more and more to go to quasi razor blade is this mono-material solution, where we have discussed that in the trade show this morning for those that follow us online and the engineers have explained that the tolerance between machine and packaging material get smaller and smaller. So this operating window. So that's why it's important that the machine is properly tuned to the consumable. And there is obviously a way to create value for our customers to be the holistic provider of both on the same machine. But if you look to the -- if you step back, look to the installed base, look to the split of revenue between consumables and equipment, it's pretty similar to what we have. It's about 85% consumables, about 15% on the machinery.

But even Scholle just bought IBM a couple of years ago. So in the whole history, they obviously did not really need the machines, at least to grow to define they then bought it.

No, I think to take that a bit apart, the spouted pouch industry is a very fragmented one. I think what Lawrence last built with IPN is someone that was key competence was around connected systems and spouts, then he built on the film angle. And you know the fitment side disconnected systems is how he came in first together with Scholle. And that was the reason why the 2 businesses merged. And at the same time, the business continued to develop the spouted pouch offering, integrated more and more capabilities to build out its system. His understanding was always that the market needs a system provider. That wasn't around in the market. So he started to build that. And obviously, with Scholle was the link of the connectors where he brought them to their backs and that's how they did grow at one point. It took full control. And I said that in other occasions before, when we started to engage with each as the 2 companies and so how are we able to -- what are the areas that we can help each other and initially, it started as an industry talk, we were interested in their film capabilities. I think for Lawrence, it was very appealing to see the capabilities that we, as an established system supplier bring to the table. And that's where we can help to get that to the next level and set the industrial standard for spouted pouch as a system with all components inclusive. And I think on the Bag-in-Box, the system is further established but what it needs is higher speed. And I think Ian brought that up this morning, that's what we stand for in-line sterilization, aseptic filling and high output. And that's, I think, where we have an opportunity to also there establish the industrial standard. But we don't need to wait for that. It's not kind of next 5 years, you do R&D, and then we start to sell. That's a very gradual process. I think Scholle IPN is a wonderful business. It's a high-quality asset. They were able to accelerate growth on a stand-alone basis given the innovation that delivers given the outreach that they have, I think we can now combine that with our capabilities to help to accelerate innovation and with that emerging markets platform to drive growth. But that's how I would disentangle the question, if that makes sense.

Yes, it is very helpful. But let me try one last time from another angle.

Sure. sure.

When I look at Tetra Pak and SIG. But let's say only Tetra Pak is 80% of the market. So in a way, you can consider that as the market. There have been in the -- since 2000, 2003, a couple of, I call them pirates. You call them nonsystem suppliers at a great view that come in and start delivering some sleeves, right? And when I see what the situation is now, it seems to me that there is like some sort of a natural space for them that is probably ranging around 10%, 15% of the market. And then at some point, it's finished because I understand that the client needs also filling machine. So at some point, they come back to you or they come back to Tetra. What is that natural space for pirates in the Scholle IPN business? Are we talking 30%, 40% 50%, 80% because Scholle just started, where is that level? I mean, in a way, it's also an opportunity for us -- but can you share that number?

That number is much higher on the Back-in-Box side than on the spouted pouch side because that business is evolving, right? And I think maybe there's one data point I wanted to correct. Obviously, the markets where we compete Tetra is about 65%, 66%, so we have 22. But I think it gets you to the 12 of the nonsystem suppliers that are an established reality since 20 years now. I think we are clearly in the Back-in-Box space, the overlap equipment and consumable is higher, probably not at the level as we are. But on the spouted pouch, it's lower. And that's where we want to drive it now by integrating with this mono-material. And you saw the opportunity. 99% of the SKU is still not yet recyclable. That's the opportunity, and that's where we can bring these fillers that are fully integrated with online -- in-line sterilization, aseptic and mono-material, fully recyclable solutions. I think we open it up for all the questions. I invite all are here and have a drink with you at the bar to continue to ask all these good questions. We love that. But I'm also a bit conscious of time. We have 3 minutes before the announced end of the session. I also -- when I give people online a chance if there's a question. If not, it's probably even at home, it's too hot. It's definitely far too hot here in the room. So I think we did not only prove our resilience over the last 4 years. I think all of the audience here approved its own resilience over the last 4 hours here with us in this very hot venue. I hope, nevertheless, you enjoyed the time with us. We definitely did enjoy the time with you. It was a great moment to have all of you together, Lidong online. I hope we are able to bring our passion for the industry across, our passion for the upsides that we see and for the passion we have for the business with our customers. So thank you so much for being with us. And I would love to see you maybe at the bar for our last refreshment after this hot afternoon. Thank you very much for joining us online, and have a great rest of today. Thank you.