Orkla ASA
OSE:ORK
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Orkla ASA
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Good morning, everyone, and welcome to this Q1 presentation for Orkla. We have summarized this first 3 months as a quarter below expectations. Actually, the underlying business continued to perform well, but several factors have offset our improvements in the quarter.Despite underlying growth in our Branded Consumer Goods business, we see a flat organic growth performance. And there are 3 main reasons for this. The first one is that we have lost the Wrigley distribution agreement in Confectionery & Snacks; secondly, is the timing of Easter; and thirdly, the cold first quarter delayed seasonal sale of our ice cream ingredients business. Now let me add some more granularity to these effect.Easter took place in Q1 this year compared to Q2 last year. As a result, our Norwegian businesses had 3 fewer sales days, which is only partly compensated for increased Easter demand. Adjusting for both Easter timing and the loss of Wrigley distribution leaves an organic growth rate, which is estimated to be in line with the market development. And Easter effects will even out between quarters, we have addressed the loss of Wrigley distribution by launching our own chewing gum under our toothpaste brand, Solidox, which you saw the ad. The launch has been well received and has already taken 17% market share with one of their big retailers in Norway, REMA 1,000.When we launched the distribution agreement with Unilever's HPC products in 2016, we launched complete series of skin care products under the Dr. Greve brand. And actually, after only 1 year, Dr. Greve have become #1 brand in the leading -- and taken a leading market position in both the lotion and shower.Our focus on operational efficiency and cost continues. Underlying fixed cost is down, but this is partly offset by increased advertising investment in the quarter.Jotun had yet another challenging quarter. They continue to grow both volumes and sales, but profits were significantly impacted by higher raw material prices and weak results in the Marine segment.All in all, our earnings per share continued -- from continued operations came to NOK 0.68 in Q1, down 12% from the same quarter last year. But now, let me share some more details on the organic growth development in the quarter.We continue to see moderate growth across our core markets. Our Foods and Food Ingredients business experienced quite good organic growth in the quarter, but this was largely offset by the loss of Wrigley distribution in Confectionery & Snacks and also the timing of Easter, which is impacting, especially, in Norway.Growth in Food was broad based with exception of Norway, where Easter effects were clearly negative in the quarter. Ingredients had a good growth in bakery, and vegan-based products, but that was partly offset by delayed in ice cream season.When it comes to Wrigley, Orkla had approximately NOK 250 million in sales from the Wrigley distribution agreement, and that corresponds to approximately 4% of Confectionery & Snacks sales and adjusting for this effect in Q1 would increase Confectionery & Snacks' organic growth to approximately 1.5%, and on the total for Branded Consumer Goods the total would be 0.8%.The timing of Easter and the difference in number of sales days can have quite large effect on sales between Q1 and Q2 between years.Overall, timing on Easter had the largest effect on Care where there is no consumption effect, there's only the effect of less sales days, followed by Foods and Orkla Food Ingredients. The effects on Confectionery & Snacks is believed to be neutral, overall.In organic growth terms, the effect on Branded Consumer Goods from the Easter -- the timing of Easter is believed to be a little bit more than 1% in the quarter.Flat growth is clearly unsatisfactory. However, adjusting for Easter effects, which should even out in Q2, improves the picture somewhat. Adjusting also for the loss of Wrigley distribution renders an underlying growth more in line with the market where we operate. The launch of Solidox chewing gum will hopefully see the same success as we have seen with Dr. Greve and, over time, compensate for the loss of the Wrigley distribution.So moving over to the cost side. I think you have seen this before, my famous black over red. It's very simple, but still it's very important KPI for us. We need to keep a healthy gap between sales and fixed cost growth. And the fallen organic growth in Q1 has narrowed the gap, but lower underlying fixed costs has contributed to a positive gap, as you can see on the graph. And supply chain efficiency is obviously the most important driver of fixed cost improvement. So let's move on to the status of our factory footprint program.Since we started the supply chain program, we have decided to close down 30 factories, and actually, 24 factories are physically closed down. But as part of our structural growth agenda, the M&A we have done, we have added or acquired 30 factories, leaving us at the same number as when we started the program.But over the same time, our sales has grown 37%, effectively increasing the average turnover or revenue per factory by the same amount. And this is, obviously, very crude KPI, but nonetheless, it's an indication that we are moving in the right direction.I would also like to mention that the target for us is not to have a few factories as possible, but it's -- the target is to have a competitive and efficient supply chain that can support all our businesses. And moving towards fewer, larger production units not only saves cost, but it also allow us to invest more in innovations in automation, robotics instead of spending cash on maintenance of roofs and buildings and so on. And as I said, our supply chain needs to support our business model, and it needs to help us to deliver tailor-made products to the local consumer, so we need to have good flexibility as well.And supply chain efficiency is a continuous process for us. There are 2 plants that are currently being investigated to be closed and discussion with unions and over-affected people are ongoing according to the rules, usual practices, the laws and regulations. And those 2 factories are one in Kumla in Sweden, and one in Turku in Finland. I would also like to mention that no decision has been taken on those 2 factories yet.The bar chart to the right on this slide illustrates the improvement we have achieved in fixed cost in relation to sales. And actually, this is essentially the same as the black over red, but just shown in relation to sales. I will then give you a more complete picture of how margins have developed.Reported EBIT margin was down 50 basis point compared to the same quarter previous year. M&A explains part of this, but there is still a net underlying margin decline of 30 basis points. And this is clearly not illustrative for the potential we have in our business, and this is somewhat disappointing. I will comment briefly on both the variable cost and other cost to give you a better understanding of this development in the quarter.Variable cost, essentially, represents our contribution ratio, that means contribution margin over sales. Increasing raw material prices have pressured margins through 2017, and price actions started to show effects towards the end of last year.Raw material prices have stabilized in 2018, and they are relatively flat compared to the previous year. However, since a large part of what we sourced is done in euro and, to some extent, U.S. dollar, margins are sensitive to currency fluctuations. And both the SEK and the NOK has weakened versus euro by approximately 5% and 7%, respectively, since Q1 2017. And given that about 1/3 of what we source in Sweden is in euro and 1/4 is in Norway, the effects volatility will impact margins short term, explaining part of this 30 basis points decline in the quarter. However, there is also a negative mix effect, notably from lower sales in Norway due to Easter -- timing of Easter.The other cost is fixed cost and advertising, and as shown on the previous slides, we have seen a continued positive development in fixed cost. So this is largely offset by increased depreciation and advertising in expense in the first quarter. And the low growth in the quarter also means we see limited fixed cost leverage, this should clearly improve as Easter effects revert in Q2. However, my focus is not running Orkla by quarter-by-quarter, but it's more on the long-term value creation over time.So if you look at the 2 most important drivers behind our EBIT target of 6% to 9%, that is organic growth and it's margin improvement -- underlying margin improvement. And since 2014, we have managed to deliver an average organic growth of 1.6% and an average annual improvement in our underlying margin of 50 basis points. And in terms of growth going forward, we continue to see an overall moderate market growth of around 2% in our markets. And this, of course, varies between regions. And we see higher growths in the Baltics, Central and Eastern Europe and in India compared to what we see and expect in Scandinavia.But equally important is also the channel shift where online and non-grocery channels have higher growth than we see in traditional grocery channels. And it is a very high priority for us to be present in all the channels where consumers expect to find our products. So overall, our target remains to grow at least in line with the markets where -- which we currently estimate to grow at around 2%.One Orkla is all about how Orkla can operate more efficiently across our value chain. Supply chain and factory footprint are key components where we have made significant progress since 2014 by closing down 24 factories, and now it's actually closure of 30. But there are a lot more to do in this area. We constantly seek opportunities to cooperate more across business areas and across geographies to better leverage on innovations, our go-to-market organizations and our support functions. We don't have an explicit target for underlying margins, but we see no less potential going forward, and we are confident that we will deliver on our EBIT growth of 6% to 9% in the full period 2016 to 2018.Before I leave the floor to Jens, who will go through the financials, I'd also like to announce that we scheduled our next Capital Days -- Capital Markets Day on 31st of October, where we will go through an update on our strategy, our plans and also targets for the next 3-year period.So then I'll leave the floor to Jens, who will go through the detailed financials and development by business area.
Thank you, Peter. As Peter mentioned, we saw progress in the underlying business this quarter, but several factors and special items offset the improvement in this quarter in specific. Let's start by looking at some of the important items in the P&L.Despite being a challenging quarter, we improved operating results by 7% in Q1. I'll briefly comment on the main levers. Adjusted EBIT for the group was flat, following a slow start in the Branded Consumer Goods, lower results from Orkla Investments and the temporarily higher HQ costs. I'll revert to the development in the Branded Consumer Goods area later on.Results from Orkla Investments included effects from a sale of a real estate property in Bergen, Q1 last year. There were no transactions in this quarter. Results from Hydro Power were up 9%, following higher power prices and somewhat lower volumes. HQ costs for this quarter increased, and the increase was mainly driven by timing effects. The cost on this line item should come down to a run rate of approximately NOK 85 million to NOK 90 million per quarter, of course depending on the development of the Orkla share.Other income and expenses will vary over time, depending on the level of M&A activity and the restructuring activity. And the minus NOK 27 million that we saw this quarter was related to the supply chain restructuring activities that we do. Profit from associates, as Peter mentioned, was down 50%, and that's predominantly driven by Jotun, and I'll revert to more details on Jotun later on.Regarding financial items, our debt level has come down as a result of the sale of Sapa. While net debt remains low, we still carry gross debt of approximately NOK 5 billion, of which 2/3 is at fixed interest rates and the average interest rate levels is approximately 3.5%. Our cash holdings and cash deposits, of course, carry lower interest rates.In addition, last year's financial items included sale of shares -- gain on sale of shares. And then we have non-periodic financial items of approximately minus NOK 25 million, and that is primarily driven by derivative effects on interest rate swaps. And last year, we had the same items, but then the opposite effects, very positive derivative effects. The underlying tax rate is approximately 22%. As a result of the above, earnings per share ended at NOK 0.68, and that's down 12% from last year.Let's now turn to the performance in the Branded Consumer Goods area and then starting with the top line. This quarter, we lifted revenues in the Branded Consumer Goods area by 7.5%. As you noted, organic growth was almost flat at 0.1%. Adjusted for the lost Wrigley contract, as Peter mentioned, organic sales were up 0.8%. And in addition, we believe timing of Easter had a negative effect of more than 1% due to fewer sales days, and that's especially in Norway. But of course, it's hard to estimate these Easter effects precise, so this is our estimate. The Norwegian krone has weakened against most of our main trading currencies in Q1 versus last year. And this gave a positive translation effect of 3.6% for Branded Consumer Goods. On the other hand, this positive translation effects mean higher costs on imported goods and raw materials.M&A contributed with almost 4% in Q1, mainly related to the HSNG and Riemann acquisition within Care, acquisitions and bolt-ons within Food Ingredients. But we also have some negative structural effects due to the sale of assets, for instance, like K-Salats in Foods.Let's turn to each of the business areas and then start with the largest one, namely Foods.Orkla Foods has broad-based growth with positive impact from price increases. On the other hand, they mentioned the fewer sales days due to the timing of Easter had the opposite effect.We grew EBIT by 2%. This was mainly driven by sales growth, positive currency translation effects and cost improvements. But this was partly offset by higher advertising investments in the quarter. The structural changes that I mentioned, for instance, K-Salats, also reduced EBIT in the quarter.In total, this resulted in a flat margin development. Let's look at Confectionery & Snacks.After a strong end over the last year, organic growth in our Confectionery & Snacks business dropped by 2.8%. The entire decline was caused by the loss of the distribution agreement with Wrigley. Adjusted for this, as Peter mentioned earlier, the organic growth would have been 1.5%. Profitability on this lost Wrigley agreement was at par with the average EBIT margin in Confectionery & Snacks. As Peter said, we've launched our own chewing gum under the well-known toothpaste brand, Solidox, which have had done a fairly good start, and we are pleased with that start.Our markets outside Norway had a good sales and profit growth. And in Norway, the lack of large price campaigns before and during Easter had a negative impact on the volumes sold. Cost improvements from supply chains continue to give effects on delivered results, but are offset by the negative volume mix, which led then to an EBIT decline of 7%. In total, EBIT margin fell back by 100 bps as a result of this mentioned volume mix effect.Let's move on to Care. Total revenues in Care were up by 12%, mainly driven by M&A and currency translation effects. Organic growth was slightly down. All business units in Care were impacted by fewer sales days in the quarter as the result of the mentioned timing of Easter. In addition, as communicated in February, we had high HPC campaign activity in Q4, which also impacted the sales in Q1.Orkla Health and Pierre Robert both had good organic growth in most markets. We also grew our painting business organically in most of the markets. However, our U.K. operations still experienced sales decline, that's because of a lost contract that we had in 2017. And this in sum then resulted in a negative organic growth for House Care. But we do believe a gradual improvement from the second half of this year.In sum, EBIT came in at 8.4%. This improvement was mainly driven by M&A positive translation effects, yes. Margin were down 40 bps in the quarter because of negative dilution effects from M&A and higher input costs by a weakened Norwegian krone and Swedish krone against euro.Lastly, let's look at the Food Ingredients.Food Ingredients grew the top line by 20%, of which 1.7% was organic improvement. Most parts of the business, like bakery ingredients and vegan products, all had good progress. Sales were, however, negatively impacted by the cold weather, which delayed ice cream sales in our main markets. In addition, fewer sales days in -- because of Easter also impacted the top line and then especially in Scandinavia. We lifted EBIT by 7.5%, driven by M&A.The delay in sales -- of sales of ice cream ingredients clearly impacted the profits and was only partly offset by solid profit improvements in our bakery business. Also, on the positive side, I'm glad to see good results in the turnaround companies that were not performing last year. They now show positive results. So overall, EBIT margin was slightly down in the quarter.So to sum up, the Branded Consumer Goods operations have good underlying progress, but is impacted by several negative temporary factors in Q1. Let's proceed to Orkla Investments.As mentioned in Hydro Power, higher power prices and somewhat lower volumes drove an EBIT growth of around 9%. Our real estate had no transactions this quarter, and the book value is about the same level as last quarter.Jotun, on the other hand, had another challenging quarter. Jotun continues to deliver growth in both volumes and operating revenues, except for marine coatings, which is heavily impacted by the cyclical downturn in the shipping industry. Marine coatings experienced a significant decline in results due to lower sales and a sharp increase in raw material prices. This explains more than half of the decrease in the total results year-to-date.Higher raw material prices negatively affected profitability also in the other segments, but Decorative Paints continues to deliver good results. When it comes to raw material prices, it's expected to increase further, but the growth is expected at a lower rate. Implementation of measures to improve profitability, like price increases and cost control, will continue going forward in Jotun.Lastly, let's look at the cash flow and debt development.Here, you see the main drivers behind the operating cash flow development, excluding financial investments. And [indiscernible] cash flow from operations was impacted by a seasonal buildup of working capital and higher replacement investments. When comparing to cash conversion in Q1 last year, it's worth noting that the lower seasonal buildup was partly helped by positive nonrecurring VAT effects. Working capital remains a clear focus area for us, and as Peter mentioned in our lastly quarterly update, that we are moving towards fewer and larger suppliers with better payment terms. And this work, of course, continues.Net replacement investment was somewhat higher than the same quarter last year, mainly related to the ongoing ERP project and supply chain restructuring. And then finally, let's looks at the net debt development.At the end of last year, net debt was around 0, and since then, our debt position increased by NOK 0.5 billion from expansion and NOK 0.4 billion mainly from taxes, and then cash flow from operations reduced net debt by NOK 0.2 billion. And this takes us to a net debt of approximately NOK 0.6 billion at the end of the quarter. So it's fair then to say that we have a very strong financial position.And before I leave the floor back to Peter, let me remind you also about our financial calendar for the upcoming period. And as Peter said, we have set a date for the next Investor Day. And of course, hope to see many of you in London on the 31st of October.So with that, let me leave the floor back to Peter for his final remarks.
Thank you, Jens. I'll just give some final remarks and to sum up the quarter before we go to -- move on to Q&A.As mentioned, the underlying business continues to perform well, but several factors have offset our improvements in the quarter, as we have been through, both Jens and myself.So in sum, performance in Q1 has been below our expectations. Organic growth was impacted by the loss of Wrigley distribution, timing of Easter and a delayed ice cream season. Adjusted for Wrigley and Easter, we estimate our organic progress to be in line with the market growth. As you also have seen, we continue to realize cost improvements from working more as One Orkla, and our cost programs are proceeding as planned. This quarter, these effects were offset by higher input costs due to weakened NOK and SEK and negative mix effect, especially, Norway, due to the timing of Easter.Jotun continues to grow, both in volume and in sales, but weak Marine results and substantially higher raw material prices impact profit. But this is a cyclical business, we have seen this before, and we are probably at the bottom of the cycle and it will pick up again going forward.When it comes to market growth, going forward, we continue to see or we expect quite soft market growth. But we expect a rebound from Easter in the second quarter this year. We still face, of course, uncertainty regarding raw material prices and currency fluctuations going forward, but we continue to realize effects from cost improvements and price increases.As I mentioned, our target remain unchanged. We will work closer as One Orkla, we will continue to create top line growth and we will continue to realize cost effects from our cost improvement program, and we are committed to deliver the 6% to 9% EBIT growth.Before we open up for Q&A, I would like to show you a few of our most recent innovations. As you see here on the stage, Bare Bra, our breakfast cereal's portfolio is growing. In Norway, this range is launched under Toro brand, Bare Bra, but in Sweden, Finland and the Baltics, it's known as Paulúns. And through line extensions and international expansion, we have grown the total Paulúns range by 42% annually since 2010, and it reached approximately SEK 250 million in sales last year.In Q2, we are also extending the portfolio in Orkla Soumi and we are launching several more SKUs in the Baltic countries. And the good thing about this, this is a very good One Orkla example: produced at the same factory, it's the same product, but launched under different brands in the different markets to meet the local consumers.Our vegan brand, Anamma, recently reached SEK 100 million in turnover for the last 12 months. Sales were lifted by the launch of Anamma vegan formable meals in February. And actually, after just 5 weeks on the market, it was already the fourth largest item in the entire frozen vegetarian category with a value share of 4%.And in true One Orkla spirit, we are also launching Anamma in Lithuania in Q2. And speaking of Anamma, last quarter, I told you that we had been chosen as -- to produce McDonald's McVegan burger from Anamma. It was launched in Sweden and Finland in the beginning of this year, and the launch has been very well received. And so far, we have sold more than 1 million vegan burgers, and that is far above our expectations.OLW lentil chips is a lighter chips with less fat and more protein. It was launched in Sweden earlier this year, and it was voted taste winner by Swedish newspaper, Aftonbladet, earlier this year. And sales has already exceeded our expectations, and the launch has even contributed to growth of the entire Snacks category in Sweden.As an example of how we take successful products from one market to another, I have also included the new Grumme cleaning system, being launched in Sweden. This allergy-friendly mopping system is already a great success in Norway and is now being launched under local brand, Grumme, in Sweden. But again, it's based on the same consumer insight, it's the same product, but launched under a local name. And actually, our Grumme brand in Sweden was recently voted #2 environmental brand of all brands in Sweden.And the last one is a new launch under the Naturli' brand, dairy-free ice cream, launched in Denmark. It's 100% plant-based, and it comes in 4 flavor. So before we go to Q&A, we will just hope for warmer weather and a good ice cream season in Q2.With that, I would like to open up for Q&A.
Yes, no questions from the audience? Okay. Are there any questions from the web?
Yes. The first question comes from Ray [indiscernible] [ Triflecta Consulting ]. How good is the listing of [ Vil ] , he also says that it's a great chocolate, by the way, and Solidox so far?
The listing of?
Vil and Solidox so far?
I think I will recommend him to take a look in the stores in Norway to see how the distribution of the listing is, but it is quite good. Sorry, I'm not able to answer exactly on [ Vil ]. When it comes to Solidox, it's listed in 2 out of 3 food retailers in Norway and more or less in all gas stations and convenience stores.
Okay. I have another question from the web, if there is nothing else here. It's from John Ennis of Goldman Sachs. He actually has 3 questions. I'll just take them one at a time. You reiterated the 6% to 9% medium-term EBIT target, but can you confirm that you believe this level of growth is achievable also in 2018 despite the slow start in Q1?
As I showed, I showed the rolling 12-month development in organic growth and underlying margin improvement. And as we have explained, there are several reasons why we see a somewhat disappointing development in Q1. That was loss of the Wrigley distribution agreement, it's the timing of Easter, which had an opposite effect last year. And we also mentioned that in Q1 that Q1 was so much stronger than otherwise expected due to timing of Easter. And thirdly was the slow start or late start of the ice cream season. And then we had headwind on currency, on SEK and NOK versus euro. We have seen this before. We are, in general, over time, we are able to compensate for either increased raw material prices or currency fluctuations and price increases, but that is delayed in our main markets, as we have explained many times before, yes? So we believe we will be able to deliver this 6% to 9%.
Okay. Thank you. His second question is will we continue to see margin contraction from currency fluctuations going forward or are you taking price to offset these higher costs?
We don't guide on margin development, but Peter said that we believe that we will be grow EBIT by 6% to 9% and then with the top line that we see in the market that implicitly means that we should see margin improvement also this year. And Peter explained the reason for the negative mix effect and hence the margin effects this quarter, driven primarily by Easter. And of course, you have to look at it at this not quarter-by-quarter, but the full first half year because the Easter comes every year, but we don't know, it can vary which quarter it is. And then having the majority of the businesses in Norway, which is the most affected in -- when it comes to Easter, the shops are closed. If you look at the composition of the businesses that we have in the Norway, 40% of Care sales is in Norway, 1/3 of Food sales, 1/3 of Confectionery & Snacks and only 10% of the Food Ingredients business, so the mix in itself is dilutive. This is not permanently, this is temporary. So that means that -- and we still have the same level of fixed cost, but [indiscernible] and sales less. So looking at this in sum, we expect that looking at the first half year, the picture will be different. So a long answer, but I just tried to explain what are the negative mix effects is for Easter. And then looking at the full year, as Peter said, 6% to 9% EBIT growth implicitly means at least 45 to 50 basis points of underlying margin improvement.
Okay. Thank you, Jens. His last question is, is the 100 bps margin compression in the Confectionery & Snacks business due to the Wrigley distribution deal being higher margin than the rest of the business or is it more down to negative leverage?
Well, as I said, the margin on the Wrigley agreement, it was -- it marginally affects the margin. Meaning, it was more or less on average Confectionery & Snacks margins. And then I have said that -- or Peter mentioned that it was very low activity before Easter in Norway compared to last year. It was less pick and mix campaigns, and it was less campaigns in general. So that obviously then affects this picture. So we don't guide on margin specifically within each business area, but I have -- and I think I have explained the Easter effects.
Okay.
Martin Stenshall from Danske Bank. Could you please talk a bit about the progress with the supply chain efficiency program? I was just wondering if you could put some comments on the milestones and how that project is going. And then, secondly, could you please comment on the stages of the ERP project implementation?
Okay, I'll comment on the supply chain. I would say that I showed you our progress on factory footprint earlier today. I said that our supply chain improvement is generally in 3 areas. One is factory footprint, where we have announced closure of 30 factories. We are investigating 2 more right now, and we have physically closed 24, and we intend to keep on with optimizing our footprint program. But also, as I mentioned there is no target to have as few factories as possible, but to have efficient factories that are big enough so we can invest in modern technology, automation, but at the same time maintain our flexibility to deliver to the local consumer. The second part is continuous improvement in our supply chain where we are constantly working on improving our current business in existing factories taking out cost, increased efficiency, reduced waste, reduced energy consumption and all the -- sum of a lot of small things that adds up. And the third is in procurement, which is also important part of supply chain, of course. And as we have explained, we are focusing now on fewer bigger supplier, consolidating our purchase with fewer suppliers, meaning, that we will have better payment or better conditions and better payment terms going forward. But this is projects that are taking time, but that will show results down the road. I will leave it to Jens to comment on our common ERP project.
Yes, I can. And then the status is -- the reason for doing this project I have explained earlier. But the status is that we are now in an analysis phase. So we're doing -- this year, we are doing analysis, we are doing design, building templates, and we are also doing some piloting. So that's the main activity in '18. And then, gradually from '19, we will start to roll out this new ERP system. And the first business out will be the Care business area, and then also Food Sweden next year. So from March -- approximately, March, April next year, we will start to roll out. I would say that overall status on this project is that we are performing according to plan. And then, as you know, as a consequence of this ERP project, we will have some, I will call it, front-loaded CapEx profile because the overall cost for the system won't be higher than the alternative cost of changing out a lot of these systems that we have to do anyhow. But the profile of the CapEx will be a little bit more front-loaded. But I have commented on the CapEx level earlier on, and it will be included in this plus, minus 4% of net sales going forward. So no changes there. I don't know if that was a good enough answer, but...
Preben Rasch-Olsen, Carnegie. Quick questions on the Confectionery & Snacks. You do not talking about anything about the higher sugar tax in Norway. Hasn't that impacted your sales at all or have you taken a lot of market shares in Norway?
Yes, of course, we have a sharp increase in sugar tax in Norway, valid from 1st of January this year, that increase was 83%, quite dramatic. And it is hard to say how much that has influenced demand, but what we have seen is that the retailers have had no campaigns on confectionery so far this year or very, very limited compared to last year, especially on pick and mix. That is probably related to their -- that they don't want to upset politicians to sell unhealthy goods. Secondly, we have seen a quite dramatic increase in border sales from Sweden, Denmark, Germany into Norway, both in physical stores from Sweden, without this tax, but also online retailers selling in from both Sweden, Denmark, Germany into Norway. And it's not only that we have this very high -- I think the world's highest sugar tax in Norway. But actually, we also have a possibility -- we just have a possibility to import duty-free, VAT-free, tax-free from online retailers abroad as long as the total value of the invoice is below NOK 350. That does not exactly help.Okay. No further questions? So thank you for coming here today.