Good day, and welcome to the Q1 twenty eighteen Sora Enso Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Ola Payanen, Head of Investor Relations. Please go ahead, ma'am.
Thank you, Sefi. Good afternoon, everyone, and welcome to STORAN's Q1 twenty eighteen conference call. And I will hand it over now to our CEO, Karl Thorsten. Karl, please go ahead.
Thank you, Ulla. And let us start with the first slide. And this is, as you know, a result that has been preannounced already the April 13 when we went out with the preannouncement. However, we will now go through some of the details where we will not do the pre announcement. So first of all, it is a very good start and a very promising start of this year.
So sales are up 3.3. And if you exclude the divested Kummer, it's actually a growth of 4.5%. This is the fifth consecutive quarter with top line growth. And we came in with an operating EBIT of EUR $369,000,000, which is an increase by amazing 72% compared to the same period last year. EBIT margin was 14.3%.
That is the highest quarter since 02/2001. We had a strong operational performance and the profit improvement program that we announced in conjunction with Q4 announcement in 2017 is actually improved and is going into execution and is basically concluded. But now the savings will get to EUR 70,000,000 compared to the previously announced EUR 50,000,000. EPS came in stronger. Cash flow was stronger than last year.
And the balance sheet has continued to strengthen. So net debt to EBITDA is now 1.3% versus 1.9% a year ago. Operating return on capital employed for the third quarter in a row at 17.7%. We have been above 13% for three quarters in a row, but this is the highest return on capital employed in the single quarters since February. The wood situation in The Nordics, type up, been managed after the mild winter and the extraordinary snowfall in the middle of Sweden.
So if we then go into the next slide, and this is just a bigger picture of what later on Sepul will talk about, it is about what happened in the first quarter compared to the year ago quarter. So first of all, we had a record EBIT in Consumer Board, driven by growth and strong operational performance. We have the fourth consecutive quarter of record sales and EBIT in Packaging Solutions. We have an all time high result in biomaterials despite some headwinds. I will come back to that later on.
We have the highest first quarter for Wood Products and we have the highest EBIT margin in ten years for Paper. So as you can see in the graph there, especially in the improvement areas of Consumer Board. Basically, onethree is coming from European mills, twothree is coming from Dayhai. And in Packaging Solutions, about slightly more than million euros is coming from Valiquel's kraftliner as well as China Packaging and the rest coming from our testliner as well as a strong performance in the core units. When it comes to the biomaterials, which is improving by 93%, as we said here, it gained some headwinds.
And the headwinds here are basically coming from that we'll be running the pulp mills on a slightly lower capacity for the Nordic mills due to the Thai food situation, basically holding back about 30,000 tonnes of pulp production. And we also, for the Latin American mills, had some issues with shipping dates, which is about 20,000. And then coming back to the very positive development in paper of a 64% improvement compared to a year ago. With that, I just want to highlight some of the important transformation steps that have been concluded in the 2018. So Biofood Shipping Center in Germany has been sold.
The
Hainola corrugated plant has been shut down. And we have also made a deal of selling of Rio Grande Do Sul plantation. Believe that the transaction will be concluded during Q2. When it comes to new investments, as part of the consolidation of the corrugated business in Finland, we have opened up the new and expanded corrugated unit in Lakhty. The skewed environmental performance improvement investment is concluded and we have started production in Huston Biocompetent.
And Seppo will mention some more about that when it comes into that part. So then before handing over to Seppo, I just want to continue to raise the importance of our transformation. As you can see in the results improvement year over year means that the focus we have done in our investments and also the focus in our new product development is paying off with substantially accelerated profitable growth. We are today having 70% of the sales coming from the four growth divisions and over 80% of the profit. With that, I would like to hand over to Setyl.
Thank you, Karl. And I start by looking at some of the key figures for the quarter we are reporting today. So first of all, sales line top line up 3.3% year on year, built against another quarter of growth. And operational EBIT up 72%, so we are not only growing, but we're also improving profitability at the same time. So profitable growth continues.
Operational EBIT margin at record high level of 14.3% and earnings per share up to €0.35 a share from €0.14 a share a year ago. Operational return on capital employed at 17.7%, clearly above the targeted 13% level. And cash flow from operations continues to improve at €229,000,000 We also reduced net debt by almost €05,000,000,000 compared to a year ago. And that reduced net debt to last twelve months of, let's say, EBITDA to 1,300,000,000.0 We were at 1,900,000,000 a year ago. Moving then to our divisions and I start with Consumer Board, where record operational EBIT was reported.
It was driven by strong growth and improved operational efficiency. Sales were up 6% and reached all time high of €646,000,000 Operational EBIT was up 49% to record high quarter one of €91,000,000 This is driven by KI mill ramp up that continues successfully and strong operational performance increasing the volumes of our European mills. Operational return on capital improved 18.5%, still slightly below the strategic target, but clear improvement compared to a year ago. And Firewood Seating Centre divestment was completed in January as announced earlier. Then next comes Packaging Solutions division where another record quarter is reported.
It was actually fourth consecutive quarter with record high sales and profitability. And sales increased 15% to record high Q1 of €333,000,000 thanks to favorable pricing environment as well as continued growth in our China packaging unit. Also operational EBIT reached all time high level of €61,000,000 a big increase of 154% year on year. And operational return on capital at record high 27.7% compared to 11.1% a year ago. We finalized consolidation of corrugated packaging manufacturing in Finland and have created now center of excellence in Lofty.
In connection to this project, we are now also permanently closed our corrugated plant in Hainor, but we continue protein manufacturing there as earlier. Then moving to our Biomaterials division, We are also reporting all time high results despite the headwinds relating to wood sourcing situation in the Nordic countries, Finland and Sweden as well as some negative foreign exchange impact mainly coming from U. S. Dollar. Sales were up 7% and operational EBIT 93% reaching all time high of €102,000,000 Operational return on capital also clearly above the targeted 15% level at 17.6%.
We also completed during the quarter our ever top performance investment of €16,000,000 at the Sputzer mill. I'm very proud also to tell about the innovation award we have received for Linea by Stora Enso, our Linea product that is a renewable replacement for oil based ceramic materials. Next, looking at Wood Products where record high first quarter is reported. Their sales increased 4% including excluding the divested Bulmerkip and the Baltic Wood Supply operations. Operational EBIT was up 32% to record high first quarter reported result of €29,000,000 and highest since 02/2007.
At the 1,000 mill, LVL production ramp up continues and we have now reached EBITDA breakeven there. And ramp up is expected to be completed in mid-twenty eighteen. In Sweden, we are proceeding as planned with the CFT investment in Gruve and this investment is scheduled to begin production during the first quarter next year. We have also started production of bio composite granulates at our Hiltemir in Sweden and commercialization is in process with several customers already. Then moving to Paper division, where we are reporting highest first quarter EBIT margin in ten years.
Sales increased three percent to €372,000,000 and operational EBIT increased 64% to €69,000,000 Cash flow after investing activities to sales ratio was 6.2%, thanks to increasing profitability and continued good working capital management. It's slightly below the targeted 7% level, but not far away. Then I will review the strategic targets where we can also see good progress. And as you can see a lot of the traffic lights are turning to green and yellow. The rest of these are fixed cost to sales, where the targeted level is 20.
Positive thing here is that we are now moving the right direction from 25% level where we have been earlier, and now we are reporting 22.6%. That is a significant improvement compared to year ago when we were 24.1%. Debt ratios clearly developed at strategic maximum levels and operational return on capital, like I mentioned earlier, at 17.7% compared to targeted 13%. Looking at the divisions, Consumer Board slightly below the 20% targeted level at 18.5 And Packaging Solutions clearly above the targeted 20% and a great improvement compared to 11% level a year ago, so now at 27.7%. Also, fiber U.
S. Division is now clearly above the target in 15% level at 17.6%. Also there significant improvement compared to a year ago when we were slightly below 8%. Food Products continued solid steady performance and return on capital above 20% strategic target level. And Paper at 6.2% cash flow after investing activities to sales ratio, slightly below the 7% targeted level.
With that, I hand back to you, Karl.
Thank you very much, Stefko. So regarding the guidance for the 2018, so sales are estimated to be similar to or slightly higher than the amount of €2,579,000,000 recorded in the 2018. Operational EBIT is expected to be in line with or somewhat lower than the €369,000,000 recorded in the 2018. The impact of annual maintenance shutdown is expected to be approximately €40,000,000 higher than in the 2018. Nordic wood supply situation expected to continue to be tight.
Impacts are expected to be at the same level or lower than in the first quarter, which is also approximately €10,000,000 as we stated in the report. These impacts are included in the above guidance. And as you can see in the second quarter, it's a number of annual maintenance shutdowns: Beihai, Daimler, Walthaus, Enocell and Ullo. Before going into the Q and A session, I just want to repeat some of the highlights. It is about accelerated profitable growth.
Sales growth five consecutive quarters, a strong improvement in EBIT margin and prices and mix optimization, combined with continued successful ramp ups of our strategic investments supported by improved and strong operational performance, is part of the reason why we are getting to this level. We had a record high return on capital employed of 17.7, the highest since year February. Balance sheet continues to strengthen where we are having a net debt to EBITDA of SEK1.3 billion, an improvement by SEK0.6 billion versus the year ago period. And we actually repaid in the rolling twelve months SEK485 million of net debt. And this is a clear indication that we are moving from asset transformation to innovation and sales transformation.
Before going into the Q and A, I would like to remind you and welcome you to participate in our Capital Markets Day here in Helsinki, the November 7. With that, I hand over to Ula to take care of the Q and A.
Okay. Thank you, Karl. So operator, please help us to start with the Q and A.
Certainly. Thank you. We will take now our first question from Michael Jas from Kepler Cheuvreux. Please go ahead.
Yes. Hello. Good afternoon, everybody. Congratulations to a very good result, first of all. Then secondly, I have two questions.
One is around Packaging Solutions or the first one. Could you please elaborate a little bit on how you see this development where we can see that paper recycling prices are coming down quite substantially. Is there a risk there for the testliner pricing? And could it spread to kraftliner? Or is the market simply so strong with good demand?
That would be the first question. And then the second one would be around wood pricing in Scandinavia. Some of your competitors have been telling us that they see wood prices starting to move up in especially Sweden. Do you see that situation also in Finland? Those are my two questions.
Thank you.
So first of all, if I look upon in to the cross liner, so we see both improving demand year over year when it comes to cross liner and test liner or RCP based containerboard. And we also see prices at the moment going into next quarter to be slightly higher. Over time, it will be an impact if RCT container board are falling down and those boards come down in price. It could affect. But remember, there is very limited supply of cross liner.
And the end users are basically a totally different, has to do lot more with food and it's a global product, while RCP based or kraftliner board are more of a regional. They travel about 1,000 kilometers.
Okay.
When the it comes wood prices, yes, it's been a bit price increases. We have three. Can you hear me, Mikael? Yes, yes, I can hear you. Because there was some so when it comes to wood prices in Sweden, yes, there is some pressure upwards.
But you have to remember that the issue in the first quarter in Sweden, which on margin affected prices was that there was so much snow, especially where we have our wood supply in the middle of Sweden, there was not a lot enough with transportation. We had wood. So that was the difference. In Finland, it was opposite. It was a very, very wet winter or mild winter.
And here we've also seen a pressure on prices. But we are talking a couple of percentage points, but that also affected a little bit. And we see this tight wood situation going into Q2 as well. And the effect we had in the first quarter was around €10,000,000 and we believe it's €10,000,000 again, and that's included in our guidance. Okay.
Many thanks. Thank you for the congratulations.
Thank you very much. Ladies and gentlemen, we take now our next question from Lars Kjellberg from Credit Suisse. Please go ahead.
Thank you. I just want to come back to the variance versus your original guidance to for the quarter that we just got out of. I mean, you had a you clearly exceeded that guidance. I just wanted to check with you what variables can then appreciably better than you had expected to drive that SEK $369,000,000 operating profit?
Yes. Thank you, Lars. It's Zeppey here. And I recall that you were a bit skeptical on our guidance. I guess we can say that we were happy that we were wrong, if I can But say so
we are at the difference. Roughly half
is coming from the more positive pricing environment in Paper Packaging Solutions compared to what we expected. Another positive thing was that the mills were operationally running very well. So operational efficiencies were clearly better. That's roughly one third of the difference. And the rest is then coming from somewhat higher volumes, especially in Consumer Board business in Europe.
To be very frank, Lars, as we're saying it, we were obviously we underestimated the pricing dynamics and especially for paper. Worked with paper for a long time and it's been a very unique quarter. And we managed that extremely well because we probably read the situation in China and the impact pretty fast. So we were fast on the board with the price increases and they came in better than I anticipated. And then when you run a maintenance free quarter, you usually get good operational performance, but not as good because so we were a bit nervous.
There was a lot of moving, especially in the packaging mills. The full two, if you get just zero five percentage or one percentage point higher overall equipment efficiency is huge. So that was the effect.
Understood. So with that said, can you sustain the sort of efficiency? Of course, now you're going into maintenance periods. So how should we think about that efficiency ratio going forward? I mean, you this was, of course, a very good quarter in aspects, right?
But what sort of impact do you see as you enter you could essentially got maintenance the balance of the year every quarter. So is this as good as it gets from an efficiency standpoint? But then, of course, there are other potential drivers such as price and whatnot happens that can shift the numbers, right? But in terms of efficiency, is this as good as it gets in your view?
So obviously, in our guidance, we are indicating given and also given the number of €40,000,000 in impact from the maintenance in the second quarter. And also because when we talk about these annual shutdowns, it's pulp mills. And starting up the pulp mill after annual shutdown is always a bit of a risk and that we know. So that is a risk factor, could be more. And hopefully, we are getting better.
Then if you look on the pricing side, I would say basically most prices are either stable or slightly higher with the exception of if I everything is stable or slightly higher, so that's a positive. And then we have said that it's a tight wood situation and we are harvesting and trying to refill. We don't really know how wet the spring will be. That's a negative. So we think it's going to be like the first quarter.
So now you understand the ups and downs.
For sure. Just two more questions, if I may. The regarding the Sol divestiture, what sort of value do you expect to capture there? And also if you can comment a bit on the Chinese market situation because what we can read from the outside from the likes of RISI is that most things seems to be very quiet and slow demand in China. And what we hear from companies active in China is the opposite.
It's going to be interesting to hear your take on what is actually going on in China.
So when it comes to the Ryugaan and Ruzul, it's a cash consideration, 33,000,000. We are selling it basically at the book value. But in that, when we sell it, we have to back out what we call cumulative translation effect. So what will be shown is a loss of €5,000,000 But this is an asset that we have not been able to utilize. It's in an area where we have no investments alternative.
So this is part of what we call cleaning out and getting to get a more focused asset structure. Understood. When it comes to China, it comes to China is that it seems like the rules that were basically implemented as of the March 1, they are sticking to it because we have various reports of very deep inspections in China on the purity of the imported recycled paper. And there's been a number of according to our understanding, a number of rejects. And what we see then on the demand side is that some production will cease, especially smaller mills, but the demand for high quality version folding boxboard or more advanced boards like liquid, they continue to grow.
That's what we see.
So you're not seeing the demand weakness at all in sort of the IV boards?
Not in the areas that we are addressing.
Understood. Very good. Thank you.
Thank you, Lars.
Thank you, ladies and gentlemen. We now move on and take our next question from Robin Santavirta from Carnegie.
Thank you.
Regarding the new board machine in Beihai, obviously, you said that you reached EBITDA breakeven in Q4 last year. Could you comment on the financial performance now in Q1? And when do you expect that machine to reach EBIT breakeven?
So as we said in conjunction with the Q4, we wanted to tell you when we reached an EBITDA breakeven. Now it's part of the optimization of the product portfolio. We are not disclosing, as you can see, separate profitability or income statement of that mill. But the mill is proceeding according to plan and it's ramping up and it's qualifying more and more high quality boards and it's according to that. And as you can see, reaching 18.5% on Consumer Board on return on operative capital employed tells everybody that we are going in the right direction.
I will not disclose because it now is part of the global product portfolio. We are exporting from Beihai mill to Europe at the moment.
I understand. Regarding plantations then in Beihai or in the region Guangxi, what will you do with those? And what are they contributing positively on the bottom line for the group at the moment or negatively?
So we are in a process as a consequence of the negotiations we are having that we are in a process of returning certain lands because if we as we have said, we will not build the pulp mill. We need less plantation, only enough to secure for the CCNP partner. And obviously, you don't get returns over 20% of the plantation in isolation. So they are not contributing to the targeted level of consumer board. And there they are a drag.
But we continue to harvest our share of goods with our local markets and that is of course helping cash flow.
Good. Thanks. And then finally in terms of the Biomaterials division, you mentioned you lost some volumes due to the Nordic harvesting problem. You also mentioned something about Latin America, I assume, Peracela and Montes De Plata. What is going on there?
And is that sort of problem something that you carry with you for the future quarters?
No. So there are different problems. The 30,000 tons is that we took an active decision to run the mills slightly lower in order to not have the risk of running out of wood. It was very tight. The 20,000 tons is actually that we couldn't do revenue recognition because of delayed shipments out of the Porsche.
So it's basically something with the month end, but it's a timing issue, yes.
Thanks. And can I very clear? Can you also comment on you mentioned, I think, Q4 that you had some weak pricing contracts in the biomaterials division and that was sort of part of some contracts that you have made for a longer term. What is the situation related to that now?
We still have some of that left, but they are diminishing over time.
So significantly less. And I think you can also see the profitability development of the division.
So we have some long term contracts on fixed prices that look to be good at a certain point in time. And then most of them we are out of. We still have some left, but it's in a totally different dimension. All right. That is clear.
Thank you.
Thank you very much. Now we move on and take a question from Kevin Helliger from Goldman Sachs.
Hi guys, good afternoon. I was just wondering if you could first talk a little bit about the paper markets. Prices have obviously been going up, which we can also see in this 1Q results. Do you still think there's further margin expansion to come from the price cost spreads, like ignoring maintenance cost impacts into the second quarter and third quarter? Or have you achieved everything in the first quarter?
No. I would say that if I'm getting you right, we have a big maintenance in paper for the second quarter, and that's all for me. That's a big machine, two big machines actually and a pulp mill. And we see pricing for paper actually stable going into the next quarter.
Okay. I was just trying to see I understand the maintenance impact. I was just trying to say, ignoring that, would you then still see price but you see prices more stable quarter on quarter?
Because a lot of the contracts that we have now signed up, they are more than a quarter, half year.
Yes. No, I was just trying to understand if you have achieved everything in 1Q But or it was coming with a
you have to understand what has happened in the market. It's been quite a lot of closures plus that recycled paper could not be used in a lot of the grades in China, which means that a lot of volumes have been actually going to China. So Europe is exporting quite a bit. And that's keeping
Yes, yes, yes. No, exactly. And that was why I was trying to understand if there's more positive momentum in paper prices.
So we see them stable. But obviously, everybody is working on it. And some we have got a number of comments coming in that some big newspapers and printers has actually less paper than they wanted because they thought it's going to be like usual and things. The dynamic has changed. And I believe that we will probably see demand decline continuing, but maybe not in the short.
Okay, excellent. Could you give a rough split of the maintenance cost between divisions on a quarter on quarter basis?
We don't we give a totality. We don't give the split. But if you look, Beja is a fairly big mill, but it has this is a CPMP, not a chemical pulp mill. Hengla and Warkau, they have chemical pulp mills. And that will affect obviously the packaging solution.
ENOcell is dissolving pulp and obviously will have an impact. And then Ulo mill is a big mill. So I think if you and then you should know about the impact is also of lost revenues included. Yes.
Okay. Thank you. And then lastly on FX, can you give a rough split of because obviously you haven't seen the full impact yet because of hedges, but how much of the dollar move versus the euro would you say is already in your 1Q results?
Well, if you look at the foreign exchange FX in Q1, we have talked about €40,000,000 FX negative, mainly coming from the dollar. One-four.
Yes, yes. But Positive
coming from Swedish krona offsetting the dollar effect.
Yes. But assuming all FX stay at spot, will that negative effect increase or decrease over the year?
For the full year,
FX will be around some €70,000,000 Okay. Thank you
very much.
Thank you very much, ladies and gentlemen. We now take a question from Antti Kotraburi from Danske Bank.
Yes, hi. Two questions from me. Firstly, still on paper prices. You mentioned that Q2 will be stable compared to Q1. A little bit on a broader perspective because there seems to be some attempts to raise prices going this summer.
Do you share the view that there is still room to increase prices in Europe in graphic paper? That would be the first question. And secondly, if you could discuss a bit about the
cost
situation outside of the wood cost, what do you see? Is there something that we should be aware of going into Q2, Q3 now?
I think there are some possibility for graphic papers, yes. Let's see how that plays out and how fast it can be implemented. But so that I agree it could be. When I said paper stable that's to the whole and there's many grades in it. Deal with that.
But that is not it's going to be minor possibilities.
Yes. Do you care to comment about the different grades?
No. I always take paper as a whole. And yes, you understand, we are working and we have been working for every year, every quarter, every month trying to raise prices. Now so we know how to try and we managed to do it in certain grades for the first half of fifteen years. So we are working on it.
But I don't want to go into I think that's why in general we said paper are stable. Now when it comes to the cost, you remember in conjunction of the Q when we published the Q4 for 2016, we actually announced a cost reduction program, which now is actually been extended to €70,000,000 and is basically implemented. That was the reason that we needed to keep costs under control even though we felt that 2017 was going to be a good year. So we think we have actually combated the what you could call the cost increases. I don't want to talk about inflation because every cost is specific and cost should go down.
So I think that we have seen a slight and we have counted on something on wood cost. But on top of that, there could be some movements in logistics costs and on chemicals, but we need to combat that quite forward.
But those increase are offset by recycled paper prices coming down. So that we also need to All
right. Thank you very much.
Thank you, ladies and gentlemen. And now we take next question from Gustaf Hansen from Pareto Securities.
Good afternoon. Two questions from my side. First of all, the EUR 10,000,000 negative effect that you guided due to the wood situation in Q2. Do you want to give us any clarification on which segment you think that will affect mostly? Will we see some lower volumes in biomaterials again?
It
will be across all, but the biggest one will be in biomaterials and maybe in the pulp mills for consumable. So what we mean is that we drive down the pulp mill, but making sure that we have full capacity on the board. But on the excess pulp, we might hold down a bit.
Okay. Very clear. And then secondly, just a clarification on your Q2 guidance for operational EBIT. Should we see it as anywhere between plus 10% to minus 25% versus Q1?
Yes, that's correct.
Okay, perfect. Very clear. Thank you.
Thank you. And now our next question will come from Konstantin Wolff from Western Asset Management.
Hello. Thanks for letting me on and congrats on the successful quarter. Just one question from my end on the balance sheet. You talked earlier in the year about potentially tightening the 3x leverage ratio. So curious how your thinking has evolved on that.
Thank you.
No. So obviously, our actions is going to continue to tighten. And I like to have something that starts with one. And this is something we're working on internally. But as you see, you also have to remember we will get 0.6% in due to the if we can conclude directly and we are basically historically taking down by year 0.5 to 0.6.
So that's the math. Thank you. Did you understand what I'm saying? Okay.
Thanks. Yes. Just curious that you haven't just interested that you haven't actually taken the formal three times ratio down to a different I. E. Lower number on paper.
So you still have significant flexibility under that?
Significant flexibility. But this is something that I was saying we are working on.
Perfect. Thank you.
Thank you very much. And we now will take a follow-up question from Lars Kjellberg, Credit Suisse.
Yes, just a quick one. You have obviously kindly listed all the maintenance activities across the various mills. Can you give us in a sense, you called out $40,000,000 for the second quarter, which is effectively coming off a zero base in Q1. How should we view the maintenance cost in the third and the fourth quarter of the current year? Are they going to be similar or smaller than Q2?
I think we have given you the maintenance schedule for the whole year.
For the mills,
but not For the the mills, but not the amounts.
But in general, I think the only additional maintenance mill under maintenance we have this year is pay by mill, the new one. So if you look at the phasing from the last year point, that should get pretty good picture how it will be phasing. Difference was in Q1, for the last year, it's only a couple of million.
Of course. But you have some significant board mills, of course, with attached pulp mills, both Imatra and Skogal, and those tends to be quite costly, right? So I'm just trying to gauge if there's going to be any difference in maintenance costs in Q3, Q4 versus the second quarter. That's kind of what I'm looking for.
Like I said, if you look at the phasing last year, Q3 Q4, that will give you a pretty good big jump.
Yes, it should be. I agree with you. We have the have the Vimatra and Skugal coming into the second half. And we don't expect them to be different this year compared to last year.
Okay. Very good. Thank you.
Thank
you. As there are no further questions at this time, I will hand back to your speaker today for any additional or closing remarks. Thank you.
Okay. Thank you for today's call. And sorry about the little hiccup with the slides in the beginning, but we were able to sort that out. And I will get this final word to Paolo to share with us.
So first of all, thank you for sharing with us even though most of it was known, but I think you appreciated some finer details in what we consider a very promising start of a new year. Hope to see you soon and hope to see you all at the Capital Markets Day in person. Thank you very much.
Thank you.
Thank you very much. Ladies and gentlemen, this will conclude today's conference call. Thank you for your participation. You may now disconnect.