Essity AB (publ) (STO:ESSITY.B)

Investor Day 2019

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May 23, 2019

Watching the webcast. I am Josephine Edgewell, Head of Communications for Essity, and I will be your moderator today. So Essity is a leading hygiene and health company, as you know. And our name stems from the word Essentials and Necessities. We are producing essential products for everyday life and necessities for people's well-being. And that's actually why we are called Essity. We have collaborations with, for example, United Nation to support the United Nations' Sustainable Development Goals. But we also have collaboration with, for example, the Museum of Photography, Fotografiska, and that's why we are here today. Together, we produce joint exhibitions under the theme, Hygiene and Health, where we want to break taboos within different topics, and we want to improve the well-being all around the world. And for those here in Sweden, if you want to see some of the exhibitions, you can do that today after the event. So with this, let's have a look into today's agenda. We will start with our CEO and President, Magnus Groot, going through the highlights of Essity Group and the way forward, followed by our CFO and Executive Vice President, Frederik Runestedt. After that, we will have a joint Q and A and then we'll have the first break. And all the breaks and the lunch are just outside where we also have exhibitions about some of our products and solutions with a special deep dive on medical solutions and also within Torq. After the break, we'll do 2 of our global units with operational global operational services with the President, Robert Schoestrom followed by Donato Georgiou, President for Global Manufacturing. Then we have a joint Q and A, and Magnus will join in all the Q and As. We have lunch, deep dive into Health and Medical with Olszia Kolsru and then Professional Hygiene with President, Dan Lewis. We have a break. And then our 2 other business areas, Consumer Goods with Volker Seller and then Pablo Fuentes for Latin America. Q and A. And then we also have the pleasure to have Vinda here, which is our subsidiary in Asia. And we have the Chairman, Mr. Li Cha Wang and we have Christoph Michalski, Srub of Vinda. Q and A and concluding remarks from Magnus. Some practicalities. You have the bathroom 1 floor below. Exits are here in the back of the room, so you all need to know what that is. With this, it's time for you, Magnus. I hand over for you. Welcome, Magnus Groot. Thank you. Thanks everyone for coming to this 1st SED Investor Day. And I realized talking to some of you outside that many participated in our last Investor Day as SCA. So at that time, we were a hygiene and forest company. And today, we are a leading global hygiene and health company. And at the time 3 years ago, we had not yet announced the split, which of course subsequently happened. And we didn't know about the acquisition of BSN Medical that has led to this transformation. And through these and many other actions, the company looks like this today, sales of close to SEK120,000,000,000 and this is actually the higher numbers than when we were SCA. So we have really recovered from a growth perspective. We have approximately 47,000 employees and we are active in 150 countries. But we have also and of course, maybe most importantly for you here today, created substantial shareholder value. And here is just one graph showing the total shareholder return from 1st January last year of 28%. But even if you go back to the split, which was mid-twenty 17 or longer, SED and previously SGA has continuously outperformed both the MSCI Household Products Index and the Stockholm Top 30 OMX Index. And the reason for this is not all this restructuring, but actually a very, very strong and solid underlying performance in the business, which is where we try to spend 90% of our time. And this is the development on top line over the last 5 years with a growth of 35%. And on the adjusted EBITDA, the operating profit of 36%. Of course, what we didn't anticipate at the time of the last Investor Day and before the split was the unheard of increases in raw material costs, both the duration but also to the extent that the material costs increased to levels we've never seen before during 2017 2018. And the negative impact was over 5% last year. We were able to offset a large part of that, but still had this smaller dent as you can see in the development when it comes to adjusted EBITDA. That's what I was planning to say about the future about the history, I mean, and look at the future based on these 6 strengths, which I think are what will make us successful also going forward. The first being that we are positioned in sectors, industries that will continue to grow and continue to be very attractive, health and well-being. And in these sectors, we have leading and attractive market positions based on our strong brands. And the brands are then, of course, developed not by advertising and promotion, we need that as well, but on a strong innovation funnel so that we can continue to develop better products with an improved consumer experience. Internally, we have a proven track record of focusing on efficiency, cost cutting and cost savings, and we will talk more about that throughout the day as with the other topics to create sustainable profit growth and strong cash flows. But most important of all, this is really the foundation for future success is to have a strong successful winning culture and a very strong management team. And I believe this is the best management team in the world. They're sitting over here. You will meet most of them today. And we have changed the organization slightly from 1st January this year. We have created a smaller and more operational management team. We have trimmed down the staff functions to a minimum. We have the same business units as we had before. They are the ones down in the right hand corner. And in the press release this morning, we actually also gave the relative size of these business units. So starting with the first one there with Ulrica, Health and Medical Solution accounts for 21% of sales and consumer goods 32 percent professional hygiene 21% again and Latin America growing very fast 12%. Not on the picture is Vinda that Josephine spoke about, which is then the last 14%. And as Josephine said, that's a subsidiary. It's listed on the Hong Kong Stock Exchange, but with SDS majority owners. Then a very important change in our structure are the 3 strong global units that you see there to the left that supports the business units. The business units have the full P and L responsibility. So there's no matrix from that perspective. But we see that to continue to improve efficiency, reduce costs, improve quality and the premiumness of our products. We have the global unit global manufacturing managing our 90 sites across the world in a very structured and long term fashion with some programs like tissue road map that you heard about, but also, of course, improving every day. Secondly, global brand innovation and sustainability. And this is an important change where we have moved sustainability from being a staff function into this. And the reason is that looking back, sustainability has been very much focused on the supply chain, which is still incredibly important to reduce emissions and improve energy efficiency and so on. But going forward, and we are incredibly successful in doing that, the emphasis is turning much more to the actual products, the packaging and the sustainability benefits to the users, the consumers, the customers. So we need to get sustainability all straight into our innovation. When we innovate new packaging materials, new materials for the products and also how to manage the post consumption waste. And finally, our other efficiency engine here, which is global operational services that focuses on then efficient end to end processes, including logistics, purchasing, IT and Global Business Services. And everyone is here except Thomas Uhule, who is has other obligations. And out of the 12, worth mentioning, we have 6 different nationalities. So it's a strong international team that we have here together. Getting back to the strong the attractive categories that we're in, this is then the breakdown from 2018. And a difference from 3 years ago was that personal care is a bigger part of the pie and consumer tissue smaller. Two reasons: the acquisition of BSN, the fast growth of some of the personal care categories like incontinence care and fem care, but also the fact that we have been pruning our consumer tissue business in many areas to manage then the very high raw material costs. By geography, not much change with a good balance between Latin America and North America and Asia to balance our leading position in Europe. From a distribution channel perspective, even though the channels are blurring, and we'll talk more about that later, I think it's important to note that we have a good balance. More than 40% of our business is actually in business to business and 58% is then in retail trade. Of course, with digitalization, this is all changing. When it comes to our mix between retailer brands and our own brands and having a strong European base, it is important to be active also in retailer brands. This mix has changed with retailer brands now accounting for 2% less of our total sales, which is very much in line with our strategy. I'd like to add that the retailer brand contracts we have are based on very strong long term partnerships with customers that we've mostly been working with for decades. So we see this more than just private label sales. We're really developing brands here. Favorable market trends and these will help all our categories to continue growing going forward. One big focus today will be the 3 that we have added at the bottom and they are all interlinked because through digitalization, we are able to really develop our business model. But most importantly, it empowers the consumer, but also the customer. And just a reflection here, this could be, of course, the same lady, maybe it is, who's using digital applications here to manage washrooms, buying our products online that she's then using in her leisure time. And I mentioned the consumer trends, putting the consumer in control. And again, when you look at the lady here in the middle, you don't know anymore if she is actually buying baby diapers or is she a facility manager who is sitting at home on a Sunday night ordering tissue for the office on Monday. So the lines and it could be on the same platforms, of course. It could be both on Home Depot or Staples or Amazon. So the lines are really blurring here. Deliberate spending, this is very interesting because the consumer is getting more and more specific in their needs. And just yesterday, I met with our one of our long term joint venture partners, Mr. Takahara, who is the Chairman and CEO of UniCharm, our Japanese counterpart. And we were amazed when we discussed this how similar as many of these trends are when it comes to health and sustainability, specifically, of course, the trends of pure, clean, original and so on that I think you hear about and that we'll talk about more today. And all of these trends, as I said, are many of them are global. This is how the markets have developed. If you remember from 3 years ago, Asia was number 1 then, but of course growing much faster and now clearly the dominant market for our categories. And at the bottom there, these are categories have a total growth of around SEK 118,000,000, which means that we account for about a 10% average global market share. We're happy with how we're positioned with strong positions in Asia, in Latin America that's also growing fast. We are not very active in Africa. And as you can see, Africa, of course, has huge future potential. But today, that's the orange bubble there down at the bottom together with Australia still very, very small. So to capture future growth, we're very much focused on Asia and on Latin America. If you break down this global market, I think it's interesting to just to see the difference on the category breakdown between emerging markets and mature markets where consumer tissue is similar size, 37%. But look at the emerging markets, how big feminine and baby is. These are the first two categories that you invest in when you start having a disposable income. And then over time, the other categories develops being medical solutions, incontinence products, of course, at the population ages and professional hygiene. So that looking to the right and the mature markets, this is a much bigger part of the pie. And we are very happy to be positioned in this second part, which continues to grow even as the market becomes mature, so medical solutions, incontinence products and professional hygiene. This is where we have our leading brands and I'll get back to that shortly. But it's also an area that is not yet as consolidated as some of these other big categories. So it's a good place to be also for the future. And these are global market positions. I call this my bragging slide. I think this is something to be very, very proud of with leading global positions year after year in incontinence products and professional hygiene with TENAN and TORQ and developing extremely well. In Consumer Tissue, we're number 2. This is where we have our 3rd $1,000,000,000 brand, which is Vinda. We'll hear Mr. Lee and Christoph Mikalski talk about that later. Medical solution, which is our new category or group of categories, we are number 4 globally, but with many strong regional local positions. In Baby Care, we have actually slipped down one point from being number 4 globally to number 5. This is a result of the very clear strategy that we have communicated that for Baby Care, we're focusing on margins and profitability rather than growing. And one example of this, we actually announced on Tuesday that we were stepping out of a joint venture in Turkey, which was one of now a small number of the underperforming local positions that where we have tried to turn it around. When it doesn't work according to our kill or cure principle, we decided to step out. Feminine Care, we actually moved down one notch as well, which is kind of strange and I really challenged my team here. How can this be? Because we have been growing our market shares everywhere we are present the last 5 years. Quarter after quarter after quarter, it's a huge success story. The reason is we're not present on all the rapid growing markets, and that's why we are relaunching Feminine this year in China through Vinda. So that's a very important part of our strategy to get back also on a global scale in Feminine Care. And getting into some more details than we usually do, this is the breakdown between some of the more some of the regions. And as you can see in Europe, we have a very, very strong position. And we can use this to get prices up as we have done recently in Consumer Tissue and to really, really create partnerships with the retailers and with big distributors. Also in Latin America, we are now a strong number 2 from a regional perspective, but really challenging the number one actor here and growing very fast and outperforming our main competitor. In Asia, we are strengthening our positions. This is still very, very fragmented, many, many players. So all the opportunities remain here to be number 1 or number 2, but with a very good starting point. While in North America, we are very much focused on professional hygiene and on incontinence care where you know that we have been working hard to turn around our incontinence care business and we will hear about that. It's going very well and we are growing our market shares in incontinence care in North America. Of course, it's not just about market positions. To make them sustainable, you need strong brands. And we usually say, if you look in our annual report, that we have leading market positions being number 1 or number 2 in 90 countries. Doesn't say much. What if these are tiny categories and tiny countries? It doesn't add up too much. So we said let's show some other numbers that really shows that it's more than that. Actually 90% of our branded sales is related to number 1 or number 2 positions, which means that in a category, in a country, we're either number 1 or number 2. And that's, of course, also very much in line with our strategy to be number 1 or number 2 everywhere. How is this going over time? Are we winning or are we losing? And in over 50% of our markets, we have been gaining market shares over the last 3 years. And then there's a significant portion where market shares are stable. This is quite common in our industries. And then we have lost market share as is always the case in some areas. And you know where they are. It's baby where we have been working with our margin improvement program. It's to some extent also in Inco Retail with the entry of new competitors over the last couple of years, something that we are working to address now. And then sustainably, we know that categories and brands are market positions that shows the strength of the brands in another way. So it's different perspectives on the strength of our brands and our market positions. And as I mentioned initially, the strong brands are not based And I was in Mercadona at their annual supplier meeting. It's the biggest retailer in Spain last week when they called together their 100 biggest suppliers. And we got a lot of compliments there because we've done something no other supplier has done. We have put together our own consumer panel with 250 families that report to us continuously year over year over year on how they are using our products sold through Mercadona and how they see different improvement opportunities. So very direct and continuous consumer insight process that really, really, I think, strengthens our position also towards this important retailer and customer. We spend 1.1% of sales in R and D. It doesn't sound that much, but it actually puts us on the top 1,000 companies. This is according to PricewaterhouseCoopers of the biggest investors in R and D in the world, somewhere around place 750. More importantly, innovation companies that get a lot of bang for their bucks. Innovation companies that get a lot of bang for their bucks and we were one of those 88. So we're really focusing on building bigger brands and I will show some examples here. These are brands that we believe can add 0.1% or 10 basis points of sales in the 1st or second year. And of course, that's a huge impact. If just one launch can add that much growth in the 1st year and then continuously, that creates a lot of value. And the growth has to come from not only cannibalizing on existing products, but of course adding something new, so winning market share and also on premiumization, so the ability to take pricing. I think you will see all of these products coming back during the day. Digital transformation has become an increasingly important part of our innovation. Another figure that we've been discussing is the 5% that we sell on group level because when we looked into this in-depth, we realized that we are probably very, very hard on ourselves. When we include the online sales in B2B from our distributors, could be bundled or impacts or other distributors, that number suddenly doubles to 10%. And we will look into how we define our online sales and also how other companies are doing it because it seems that there's no real standard here. So including our B2B online sales, it's closer to 10% than to 5% and growing very quickly. And of course, we want to overtrade here because this is the future. Platforms, customers and consumers, they want to interact with us and that's why platforms are important. Baby clubs, platforms for health care staff and so on, for cleaning, facility management staff, this is a big R and D and innovation area for us going forward. And then, of course, moving then to the next topic, cost efficiency. The real opportunity in the long term to accelerate savings and efficiencies is through robotics, automation and analytics. And while visiting Macadona, I also went to our plant in Valves outside of Tarragona last week. And it's quite amazing. We have and Donato will talk more about this. I've been talking about this for a week now. We have a dozen young engineers from Barcelona. They buy off the shelf sensors, measurement equipment, lasers, and they find ways of improving the quality of our tissue, but also the runnability of our machines in ways that we thought were not possible. And when I asked them, so how much opportunities do you see? And they say, every door we open, we see 5 more doors. And they told me that currently during each 8 hour shift in valves, they collect 500,000,000 data points, 500,000,000 and are applying advanced analytics now on creating virtual sensors to be able to really, really follow how the machines are running. So fantastic and developed by us. Cost savings has been so much of a theme here during the last quarters years that I think I will jump that. You're all aware of the initiatives we have. Sustainable value creation is important, and we have set a number of new targets that are very aggressive. They came out 1 by 1. So I want to give you the overall picture where the most important one is that we have set new targets for greenhouse emissions that have been approved by the science based target initiative that they are on the right level that Essity as a company contributes to keep global warming below 2 degrees, and that's very important to us. This will require investments, but we firmly believe this is the right things to do. Another target I just want to highlight is fiber sourcing because some of you know that we always say that close to 100% of our fiber is sourced either through FSC or PFC controlled or certified wood. And we achieved this target 1 or 2 years ago. So we raised the bar and said it's not enough that it's just stronger requirement. And then again, our target is down to 76%. We raise the bar. We start again. So very important for us. And of course, and increasingly and also with a new organization based on our 3 sustainability pillars of well-being, more from less and circularity, the opportunity going forward to support our customers and consumers in their sustainability efforts to make them successful to find solutions that they can use in their sustainability work. Corporate culture, another bragging slide. Only a few weeks ago, we were elected the most attractive employer in Sweden, which is fantastic considering we've only been around for 2 years based on 6,200 interviews. And it says something about our culture, I think, where to the right, you see the hallmarks of Essity and previously SCA, carrying and collaborating. And to the left are 2 new beliefs that we are focusing very much on, being committed to delivering superior results and having the courage to take the lead. And I'm sure you will see this very strongly from our team here throughout the day. Portfolio strategy. We've taken a bit or we've spoken about all these categories and segments. How do we kind of prioritize? And we try to boil this down to a super, super simple slide. And this is it. It's a pyramid. Very clearly, Medical Solutions is a growth platform both organically and through acquisitions. It's very closely linked to incontinence products, feminine products. We love it. It's a small category, but we're very successful, good margins, very investable. Professional hygiene, same thing. We see that we can grow with digitalizations, with solutions, not just the basic tissue, big opportunities. Baby Care improved by selective presence. Again, we saw the example from Turkey. We are incredibly doing incredibly well in gaining share in most European countries and in a few other positions in Latin America and in Asia, but we still have some work to do here. At the same time, we are investing to grow as well with the launch of Baby in France 2 years ago, which is developing in a good way. Same in Consumer Tissue. So while we've been going through the Consumer Tissue Roadmap talking about restructuring, please remember this is only one part of it. And the most important part is that we're also improving quality for the long term. And we're just now starting up, Pablo, a new beautiful premium tissue machine outside of Mexico City that will really support our growth in premium tissue in Mexico going forward. If we take the same perspective, but now based on the three business segments that we actually report every quarter, just get that. I think this pretty much covers it. Medical Solution, a growth platform, family care, incontinence, medical, grow organically. We know that every investment we make really, really helps the value creation of the company while continuing to improve underperforming baby positions. Just to add here, we have had high investment levels in Personal Care over the last couple of years, as you'll see. And this is something we're doing to improve our competitive position for the long term and it is working. So we're not only buying machines because we're growing. We're replacing old inefficient costly machines that lack flexibility with new low cost, much more flexible machines that we can use to innovate for decades to come. So it's an important point here. Consumer tissue, innovate to increase the share of premium tissue, growth in high margin products. And we do in Consumer Tissue have a lot of high margin businesses as well. So it's not only cutting and restructuring again. And sustainable and cost competitive fiber sourcing, I won't talk more about that now, but Donato will talk about that because we had a press release this morning, a new initiative. We'll talk about it later today. And finally then, professional hygiene. Being the global Schapert, we're the global number 1. We can move this from being a tissue business to a solutions, a platforms business. And the big, big opportunity geographically is to continue to grow double digit in emerging markets where we have a relatively weaker position than in North America and in Europe. So that's a big opportunity here. So that's a summary of where we are and where we are heading. And of course, for this year, to bring us back to reality, the top priorities for this year only a little bit more than 6 months remaining. Innovations will always be on top of our list, but we also continue with price increases, efficiency improvements, cost savings, which has been, of course, a recurring theme also in the quarter reporting. Growing categories with high margins and capitalized on digital opportunities everywhere. That's the short term focus. Thank you very much for listening. So with that, I would like to keep the pace and hand over to Fredrik, who will put numbers to all of this. Looking forward to that. And then we will open up for Q and As after Fredrik's session. Please. Thank you, Magnus. I will not give a lot of numbers, but just a few maybe starting up with a few words about who I am. So I've been with Essity or SCA for a bit over 5 years. And prior to that with the Nordic Bank Nordea as a CFO for about 5 years and prior to that 7 years as CFO for Electrolux. So I kind of like being the CFO. I guess you can interpret that. So what I will talk to you about today is basically three things: a little bit about the recent past financial performance I'll talk a little bit about how we run the company financially and, of course, also finally, how are we going to reach our targets. So that's those are the 3 subjects. And I'll start with the first one, the financial targets. And starting with the first one, we aim to grow our sales organically with more than 3% per year. Secondly, we aim to have a return or adjusted return on our capital deployed of above 15%. We shall at all times maintain a solid investment grade and our dividend policy states that our dividend should be stable and rising. So if I just walk through these and start with the first one, the financial or the organic sales growth, you can see from this slide that we have largely lived up to that target over the last several years. And here I adjust for those deliberate exits that we have made in terms of mother reels as an example or Cure and Kill exits. So the interesting thing is to actually look a little bit underneath these numbers. And what you will see there is that volume contribution or the volume growth is actually quite stable. So volume in our industry will vary to some degree with market development or company specific things, but largely quite stable. And it's also the same for mix. So we continuously contribute to sales growth through mix. So the volatility you see here is pretty much all of it relating to price. So clearly, if you look at, as an example, the final quarter here or Q1 of 2019, the price increases that we have made clearly contributes a lot to organic growth. And turning to financial performance in terms of return of capital employed. Up until 2017, we were clearly heading in the right direction to actually get to these to our target of over 15%. So the last year of or last couple of years of raw material inflation or and and energy has been a quite major disappointment for us. And this is very visible. You'll see it in Consumer Tissue especially, but you'll see it in all business areas. So all our businesses have been very much impacted. And it takes a lot of time to pass this cost inflation throughout the value chain to the end customer and consumers, but we're actually doing that. So if you look at the last quarter or last couple of quarters, all our business areas has had a positive contribution from price increases. Turning to a little bit the details and maybe starting with the inflation on raw material and energy. You can see at the bottom right graph here that, of course, as Magnus already said, 2018 was just monumental from this aspect. But it's also interesting to see this is actually a continuation of several years. So this has been a major challenge to the company. And we have up until 2017 been able to mitigate this to a large extent by the positive contribution that we get from mix. And you see that in the upper left. And of course, innovation is not just paying off in terms of additional growth of sales. It's also clearly paying off in terms of additional profit. And of course, not last but not least, kind of the price has been very, very positive. You can clearly see that. So also in 2015 and now in 2018, we have been able to compensate through price when we have adverse adverse market impact. And cost remains super important for us in every aspect, so whether it's COGS or SG and A. I'll come back to some of these issues in a bit. The balance sheet, we shall at all times maintain when we bought BSM, we did that all debt funded. When we bought BSM, we did that all debt funded. And as we did with Wassa, we maintained that strong ratings. So we have been able to fund large acquisitions. But when we did buy BSN in 2017, we estimated that medical would generate significant cash flow and that our current business would continue to generate stable and increasing cash flows as it had done in the past. Now clearly looking back now in the last couple of years, medical has delivered expected cash flows. And as you can see to the right hand side, we have continued to amortize on our debt, the underlying debt. But of course, once again, raw material has prevented us from deleveraging in the speed we would have wanted to do. So looking at the debt number there, in addition to, of course, amortizing, we've also had some negative impact from pension and also from currency. If you take just using S and P as an example, to be BBB plus we will have to have a net debt to EBITDA below 3 percent and we will have to have free funds from operations divided by net debt of over 30%. And you can see from the bottom left that we are pretty close to these parameters. So right at this point of time, we don't have a lot of space, if you put it that way, in terms of increasing our net debt. So not a lot of space for acquisitions. But as raw material has now stabilized, we expect to continue to deleverage and, of course, through added EBITDA also creates additional space for acquisition as we go forward. So talking a little bit about the future. It's as I already mentioned, we strive to reach more than 50% of adjusted return on capital employed, and we are currently at 12. We have many initiatives to become more efficient in terms of usage of capital. So we want to invest into more higher yielding categories or businesses or segments. And of course, we work to constantly to become more efficient in terms of capital. But clearly, the majority of this improvement will have to be through margin or will be through margin. So I'll touch a little bit about how we intend to do exactly this. But before I do this, if you look at this slide and this matrix, we call it the value creation matrix, and it's a simplified way of explaining how we manage our group and all the units within our group financially. So if you look at the x axis, what you see there is basically growth. And if you look at the y axis, you see the return. And you also see the expression there hurdle rate. And what we have done there is we have set a hurdle rate for Essity as a company and we've adjusted that depending also for individual countries depending on the differences of interest rate. It's largely based on the WACC rate, but adjusted for slightly higher normalized interest rate. So we have a higher, you can say, internal hurdle rate than perhaps you would calculate when you use your WACC rate. So this is really simple. If you're below that hurdle rate, we will focus or that unit will focus most of the resources or efforts on trying to improve capital efficiency or raise the margin. And if you happen to be above, then of course most of the focus will be towards growth. So it's kind of a simple way of doing this and you'll see more of that as we progress. But using our different categories as the example, so consumer tissue has a fairly low capital turnover and a fairly low margin. And most of the growth you'll see in consumer tissue will be related to emerging markets. Now here, clearly, the focus is all about actually increasing margin. And if you look at the European or mature markets business, it's very much about cost and of course also related innovations, and you saw an example previously. So very much about raising margins and in the emerging markets, finding the healthy balance between growth and margin. Now looking at Baby, also here in our terminology, underperforming, but the problem is slightly different for Baby. Here, it's not about all of the business underperforming. Here, there are selective parts of Baby which we need to address. So in that sense, addressing these different units under, for instance, the Cure and Kill program is very clear. And you'll see some more details on Baby just in a couple of seconds. Turning to Professional Hygiene. Capital turnover and margin is much better than Consumer Tissue. And in fact, the business is much more sticky because of the proprietary or captive dispenser based system. So this is, from that angle, more value creative or more profitable. But also here, we have the ambition to grow especially in emerging markets, in adjacent businesses, and we believe we can also enhance margins. Turning to Inco. Most of the Inco business is really delivering high return, and the focus is, of course, naturally to continue to grow that business and to expand that growth. But there are possibilities also here for margin expansion and one example there is clearly, for instance, Brazil. Taking our newest addition, Medical, the return on operating capital for Medical is very, very high. When I say operating capital, I simply just deduct the acquisition related intangibles. So we paid a high price for it. But if you take away the intangibles that we don't reinvest in, of course, the operating profit is very high. So this is super value creating when we grow it. And this is basically what we intend to do. Of course, obviously, North American business has to grow much, much better than it does, but there are also so many other opportunities in the medical area. And finally, Feminine, we're profitable. We have a super good return wherever we are in terms of Aufen million. So the story for us is pretty much all about growing. Now if you sum all of this up and you look at Essity as a whole, we have a good return, but of course we will have to improve. It's not all about growth and it's not all about margin. It's basically doing both and creating a situation where we become, in our terminology, star value creator. So a little bit to sum up the financial role of these categories or our categories, I think what I've been wanting to portray here is that the value creators of our group, basically professional hygiene, it's Inco, it's medical and it's feminine. Those are the 4. And baby and consumer tissue more have the role of cash flow generators. Now this is these statements are true on aggregated level, but it's not necessarily true by segment because if you look at Consumer Tissue just as an example, there's super good parts or segments of consumer tissue that has a very high return and we really want to grow it. And of course, there are also parts of, for instance, INCO or medical where return has to improve. So it's not a general statement, but Armagnaga, it is. And perhaps stating absolutely the obvious, the synergies are really strong with all of these categories in either go to market, in innovation, in manufacturing or in procurement. So just using a couple of examples, Feminine or perhaps Inco Retail would not be as profitable without the go to market synergies with consumer tissue. Professional hygiene would not be as profitable without the procurement and manufacturing synergies with consumer tissue. And medical would not be as profitable without the go to market synergies with Inco. So these are just obvious examples why we actually have the shape and form that we have. Turning a little bit, how are we going to do this? And I'm not actually going to spend so much time on all of these issues because this is what you're going to hear the rest of the day. So we are working along all the three dimensions or value creation drivers, growth, margin and capital, and you'll hear all about that during the day. So I'll just spend time on a few of these things. And starting with the first one, Cure and Kale or margin improvement through Cure or Kill. And it's a program that we originally started in 2016. So what we did, we defined we just looked at all our units in our company and we defined all the underperformers. And for each of these units, we set a very firm business plan, clear actions, clear targets and a timetable. And for all of those that had a business plan, we constructed a business plan that had an NPV higher than 0, we those became the cure candidates. And for all those that were below NPV, below 0, yes, they became the exit candidates. So if you look at all of these candidates, roughly about 10% of all of group sales were in these underperforming units. And out of those 10%, 10% or roughly about 1% of the group sales were basically exit. And you know most of those. India is a good example. Baby Brazil was another one. In 2018, so last year, we redefined this program. We raised the bar a little bit and we also included those that had not yet been fixed. And we created a second version, tracking and following up in exactly the same way. And if you look at these programs combined, up until the end of 2018, approximately €1,000,000,000 of value created or additional margin. And just one way of showing how do we work with this, and I promised you before just showing some details about Baby. And this is quite interesting because if you look at Baby, as I said, it is not performing where it should be. But if you actually look at the details, you can see that we got businesses here that produces really good returns and even businesses that produce really good return and growing as you can see. But there is a cluster there bottom left and these are the Cure and Kill candidates. Magnus talked about the exit of the Turkish joint venture earlier this week. Well, that's the spot to the far right hand corner. That's the value destroyer here that you see. So it's a very consistent program. And one other way of showing exactly this, this is a little bit far fetched perhaps, but if you look at most of the cure candidates, they actually are in emerging markets. Not all of them, there are some in also mature, but most of them are. And you can see from this slide that we have improved the margin in emerging market quite consistently over the last several years and also in a very, very challenging 2018, margins were largely stable. And this is basically cure and kill. So cost. We are engaged in cost in so many different ways. And starting with COGS to the upper left, we have consistently been able in negotiations with our suppliers, material rationalization, product cost fix, logistics, all sorts of areas, we've been consistently saving approximately SEK 1,000,000,000 per year. It doesn't get any easier, but that's been roughly the number. And as you can see here, we have the ambition to do exactly that also in 2019. The reason I say ambition and not will is simply this consists of several hundreds of projects, and it's impossible to estimate the exact value or outcomes of all of those. In the Q3 of last year, we also announced what we call a very creative name, a cost saving program that's targeted towards SG and A, so different from COGS. And we said that we are committed to reaching a run rate saving of CHF 900,000,000 at the end of 2019. That program is going according to plan. We're still committed to that number. And here, we estimate that roughly about €600,000,000 of that €900,000,000 will actually come in the books of 2019. Once again, uncertain, could be lower, could be higher, but this is the approximate ambition that we have. Now these programs and we got a few tissue roadmap or cost saving program as just examples, and you'll hear about that later. They're great and quite useful from time to time. But over the longer perspective, what is even more valuable is a robust cost culture. And I just took the example here at the bottom. You can look at our travel cost as an example, but this is just representing the continuous cost saving that we do pretty much everywhere. And I could have used conferences here, office space or usage of consultants or some other thing. We save in every area, which is extremely valuable. Capital efficiency is really key, and working capital is one of those areas. Now if you look at this slide, it doesn't look good because we actually trend in the wrong direction. Most of this deterioration in the last couple of years is actually due to technical things like raw material increase and to some degree also country mix. But clearly, we have probably, to be fair, been more focused on raising prices and making sure that we keep our volumes in a very tough market situation than we have focused on working capital. And here there are many, many things that we can do. So as just an example, using statistical forecasting and demand planning will over time bring our inventory down. Using machine learning in our dunning procedures will impact the accounts receivables and there are many, many other projects just like this. CapEx, we've been fairly stable as you can see. 2018 was a slight uptick. We spent some more and you've heard one example here with Latin America Premium Paper. We have a technology shift in ink. We spent some money in terms of how in personal care capacity. This year, we expect that number to be roughly SEK6 1,000,000,000. And speaking of the capital allocation that we do, I said we want to over allocate to high yielding businesses. If you look at the right hand side, you can see we are doing exactly that. So in comparison to depreciation, we overspend in terms of personal care. We underspend in terms of consumer tissue and pretty much in line for professional hygiene. Now this is only mature markets, but we also execute on a very aggressive growth strategy for emerging markets. So looking to the left, you can see that over 50% of our CapEx actually goes to emerging markets, representing only 35% of our sales and 30% of depreciation. So finally, this is great steering company. It works for us. It's really helpful, but it's not feasible to do this and execute unless we have the proper incentive programs to do exactly that. And we got 2. We got the long term incentive programs. You see it at the bottom here. It's total shareholder return in comparison with our competition. So if we outperform, we get rewarded. If you look at the short term incentive of the upper part, it's very consistent with the value creation matrix that you saw before. So for the value creation drivers growth, capital and margin, so if you happen to be a manager for a low yielding business, you will have a set target that is much more weighted to margin and capital. And if you have more of the growth orientation, then you will have a much bigger weight on the organic sales growth. So this is how we basically tie the incentive programs to our financial steering. So key takeaways, I hope I've been able to convey how we run the company that we are really, really committed to deliver on the strong superior results and to maintain that financial strength that's super important to us. I hope financial targets. And of course, finally, that we are really relentless in our effort to drive growth, to drive margin enhancement and capital. Thank you very much. Thank you, Felix. And please stay on the scene. And please Magnus join. So, let's open up for the first question. So raise your hand and when you get the microphone, please state your name and where you are from. Let's start with the back. Thank you, Margarita. Thanks very much. It's Ian Simpson of Barclays. A couple of questions, if I may. On ROCE, with your 15% target, I think you talked about how ROCE was 10.9%, but if you adjusted for BSN, it was 12%. And then when you talked about getting to 15%, I think you talked about getting the 12% to the 15%. So that 15% ROCE target, is that adjusting for BSN? Or is that as you report? And then secondly, that very useful color on your portfolio strategy. You made it pretty clear that consumer tissue you see as being your least attractive category. But not only is it your largest category by some way, it grew ahead of the business in the most recent quarter and in line with the overall business last year. So it looks to be a growth business as much as anything else rather than a cash cow. Thank you. Yes. Maybe I can start with the first question. So well, I actually maybe that was a confusing slide, because there were actually 2 sets of numbers there. 1 was the margin and the other one was ROCE. So if you look at the ROCE, it is 12%. So it's going from the reported 12% to the 15%. The adjustment you mentioned for BSN is actually looking back prior to the acquisition of BSN, so for the years 2016 and 2015. We only have one target, which is basically the above 15% and that's with BSN and with reported numbers, so 12% to 15% basically. And second question? And second question, maybe I could fill in on that. Yes, we had very strong growth in Consumer Tissue. A lot of that is pricing. So we're actually creating a lot of value currently in Consumer Tissue through the price increases that we put in place over the last 9 months. In addition, we are growing strongly also in China in Vinda, which is a slightly different proposition because we are committed to being the number one player, but increasingly also looking at increasing margins in Vinda. So it's not growth at any cost. They will grow to maintain the position, but with gradually increasing margins in China. But a lot of the growth you saw in the recent quarter is actually is price. So we're creating value currently quarter over quarter here also in Consumer Tissue. Good. And next question. You already have the mic, I see. Oscar Lindstrom from Danske Bank. I'd like to ask a question regarding the cost save programs and the Cure or Kill 2.0 program, which you mentioned here in the presentation. Now you reiterated your ambition to reduce costs by about $1,000,000,000 in this year. How should we sort of view your ambitions for the years beyond 2019? And what's the sort of how long can you go on saving significant sums of money from your operating costs going forward? And then what happens when you do reach 15% ROCE? Yes. I mean, it's always we never give forecast longer than the incumbent year of course because it's really difficult. It's as I said many, many different projects. And of course you'll hear more about for instance issue road map and other things related to cost as we go forward. If you take the consumer the cost saving program on SG and A, I mentioned that we approximately will have €600,000,000 and of course the run rate savings should be €900,000,000 So there will be additional next year just we will be executing this year, but of course you'll have additional savings coming along next year. And the constant savings that we make, it's always difficult to estimate. But so we cannot really give you estimates like that. It's very, very difficult. I guess we can only underline, like Fredrik did in the presentation, that this will be a strong focus for us going forward. And the way to do it is, I mean, we can't identify today opportunities for cost savings 3 years from now. We're doing that continuously going along. And so far, we have been able to find new opportunities every year in new areas. And of course, that's also our ambition going forward very much because efficiency will be a key in achieving 15%. And then when that happens, there's no reason to stop. So efficiency will remain as a key. I mean, in the long term, if you have the lowest cost base, you're always on solid ground compared to your competition in the long term. So that's something we're striving for every day. Thank you. Okay. Next questions we have in the back, Margherita. I see Stellan with the glasses. Yes. Yes. Thank you. Stellan Helstrom with Nordea. We saw that you have many strong market positions, but they were maybe not so strong overall in baby diapers. And I would imagine that there is some correlation between a strong market position and profitability. And I was just wondering how compatible is it then that you want to improve your margins in baby diapers partly by even shrinking the business? And maybe also a comment there on how you view the your expansion in France and how that also fits in with this given that or is that something that we could see more of that you need to grow as well while also shrinking? Yes. And we have been quite transparent on the baby business that it's and you could really now also see it in the matrix here that actually Western Europe is a very, very healthy business where we have the scale in our plants, we have the communication, we have the product superiority, we have the brands, both our own brands and retailer brands that are very, very successful and winning. So we're actually gaining market share on an aggregated basis since a couple of years in Western Europe. And then we have these underperforming positions that are mainly then in emerging markets. And as you see, there are a few left even though many of them are quite small now. So we continue that process. We also have 2 big value positions in emerging markets, Malaysia being the biggest one where we are the market leader. That also has the scale and the strength of the brand and the innovation power to remain healthy and to develop going forward even though the Malaysian economy has had some negative impact on also the baby business there and I think all FMCG categories. And then with Familia in Latin America, that's our 3rd big baby position in Colombia and in Ecuador and to some extent in Peru. We've had a big kind of improvement program. We're not planning on exiting that business, but to really invest to turn around that business that has been challenged. And one of the products that we've been seeing here on the slides and that we can talk more about today is the launch of baby pants in Colombia and in these markets as a way of really differentiating. So we are upgrading in this area. But as that gradually improves, which we've seen recently, that really also helps the overall performance of Baby. So solid in Western Europe and then improvements then in these other emerging big emerging markets positions and then some pruning left to do in smaller emerging market positions. Okay. Margrethe, you can continue there on the 3rd row. John Ennis from Goldman. As an example. Is it sustainable to effectively keep that business? Or does that end up effectively falling into the cure or kill category? And what would be the cure strategy for that type of business? I mean, is it solely dependent on M and A to boost your scale? And then a sort of second question would be, when you look at your value creation matrix, if you strip out the cure or kill zones, would you would that be enough to get Essent into that top left quadrant? Or is that still not enough to necessarily get into the top half of that matrix? Does that make sense? I think it's a difficult question to you. I didn't actually fully understand it, but thank you, Michael. I'll repeat it after. Okay. So the first question, we can definitely turnaround our U. S. Medical business even though position number 12, of course, looks far away, this is very much an aggregate position in especially compression therapy and we'll hear more from Ulrike in a short while. We are the market leader with the strongest brand. We are taking strong measures to improve the performance there. We have the right to win in compression in America. When it comes to wound care and especially advanced wound care, we are growing very fast because we have a product assortment that is attractive and from a small base. So even if we're small there, we see that we have the products and again the assortment that's necessary to succeed there. And together with our growing and improving Inco position that strengthens our go to market, we believe that we will be successful there. So and going outside in the break, soon, we will talk about the continuum of care and how our different categories link together. And we believe that that's something that BSN lacked in North America that we can now add through Essity, which will make us able to turn around the medical business in the U. S. Stand alone. Then of course, if there eventually would be acquisitions opportunities, we will definitely look at them. Okay. Thanks. Frederic, I'll repeat the second one. I just wondered if you when you strip out the cure or kill program, which is you said was meant to be 10% of sales with both low returns and low growth. If you strip those out, where does S and T sit on that matrix? Is it in the top left quadrant? Or is it still not enough to get into it? Is it still enough to take up? Exactly. Not really, no, because of course, obviously, price increases that we are executing on is a very, very key component to raise for instance consumer tissue. So there's a multiple of things. Curacao is one of them, but we are engaged into cost programs as you say or as I talked about before price increases and continued innovation. So getting to where we want to get is a combination of many things. Yes. And just to make up the math, some of the businesses that are in the Q and K program, they are they don't have a shorter target to reach the absolute hurdle rate value creating hurdle rate. We give them a chance to first maybe get to breakeven and then to really create value. So there could be also a stepwise return here in some of these cases. So there is a business plan to get to value creation positive position and it's just a matter of time. And so there are milestones to pass on the way. Ian, I think the gentleman next to you, so we can say chime, yes. Thanks. Fahambe, Credit Suisse. Just one quick question well, a broad question actually on emerging markets. Could you give us a bit more detail in how you're balancing emerging market top line growth with profitable growth, particularly if you're planning to expand presence in Asia, LatAm, etcetera, and recent experiences with baby diapers in Brazil, India and now Turkey haven't have been disappointing. And just an add on, if you were to do this organically, could you give us past experience on how long it's taken in a particular market to reach sustainable margins? Thank you. Yes. A lot of questions there. To rise with the tide, as you can see from one of my slides of growth, we would should be balanced fifty-fifty in emerging markets and mature markets, and we're not. So we should grow relatively faster to get to that in emerging markets. And then of course you get into so what does that cost and how much does that impact margins. Clearly, we have increased our margin focus in our big emerging market positions with Vinda. And you can ask Christoph as much as you like about that later. Look forward to that. And Latin America very much so as well. So we need to grow with improved margins going forward. We are not planning on entering any new big markets in the foreseeable future. So we hope to avoid ending up with things that we would then subsequently have to kill or that would be a drag on margins for the long term. Having said that, there are still areas where we are not profitable. And Frederic, you mentioned Brazil and the Inco business that's again growing after a couple of really, really difficult years, I think, for everyone where we are now adding the medical business and actually a very healthily growing Torque professional hygiene business. But I mean, it could be up to 10 years before you start making money in a big market like that easily. And that's why we are so restrictive with putting new stakes in the ground. We believe that we can grow the relative share of emerging markets fast with improving margins with the positions we have. And one reason why it hasn't grown faster compared to 3 years ago because it hasn't really changed is that with the acquisitions of Wassa, which was in North America, a mature market and then with the acquisition of BSN, which is also mostly in mature markets, that kind of set us back in the balance. So actually, Asia and Africa has been growing much, much faster, but being set back by these acquisitions in the mix. Thank you. Okay. We do that one. And then we'll soon have a break. And Lindes, then you will have the last question. I know that. I see you. Okay. Good morning, gentlemen. It's Guillaume Delmas from Bank of America Merrill Lynch. My first question is on your non retail business. So when we think about professional hygiene, the institutional channel for INCO or BSN Medical, your Medical Solutions business. I mean, it strikes me that these three businesses have 2 things in common. 1, it's superior margins, but also the fact that in the last couple of years, organic sales growth has been well below your 3% long term ambition for the 3 of them individually. So my question is, how do you plan on addressing this? And is maybe the fact that we haven't seen 3% plus organic sales growth for these 3 businesses evidence that the institutional channel, B2B channel has less growth and less pricing power. And second question is on your cost savings. Magnus, you mentioned the digital opportunity there with robotics, with automation. When do you expect that to meaningfully contribute to your COGS savings? Thank you. Yes. And yes, the first question, it's a good reflection. I am firmly convinced that we can grow over 3% in all these B2B areas and that we have had specific issues to address. In professional hygiene. It's been very much the negative growth that we've been seeing in North America and that's where we saw a positive shift now in the Q1. And other than that, if you take Europe and the Merlin market, which has grown really, really fast, that should put us on a pace on growing above the 3%. Inco, we know that in many of these markets tough cost pressure, big tenders and that there's a delay in recovering rising raw material costs because only 1 third of the volumes are tendered every year. So there's really a lag there and we've been on something of a negative balance there for the last couple of years. In some markets also with a very strong starting point, it could be situations where most of the tenders are held by us and we have more to lose them to gain. So this kind of goes in waves in Inco. To really get back to growth at a higher rate there, It will be a lot about innovation in order to get long term pricing also. And then BSN, very much now still at the last stage of integration and learning about the company. We know what to do, and I'm very convinced that we'll get back to above 3% growth in Inco. We were close in the Q1. And the other question Digital. Digital, I believe it's already contributing meaningfully even if we don't follow that or don't even understand sometimes. But I mean we are I mean, one thing we'll talk about, Donato, is that we are now using vision systems, for instance, on our personal care lines that completely replaces manual quality control. I mean, that's a very tangible example, and we have numerous examples. To what the size that is, we don't know, but it's we're seeing the benefits. But also on SG and A, if you look at the cost savings program, this run rate of €900,000,000 not a small part of that is actually related to exactly what you talked about. So robotics is actually quite it's a sizable number. So it's already happening. Okay. Last question, Linus. One question and then we can continue in the break. Thank you very much. It's Linus Lasen with SEB. And you make it extremely clear how the 2 tissue businesses, Consumer Tissue and Away From Home Tissue, differ not only in terms of returns, but also in the way you prioritize your capital allocation and the way you do business. And two questions in relation to that. First, when you talk about Consumer Tissue and you say you will be will have a selective presence. And now with Tissue Roadmap nearing an end, my question is, how will you keep that structural change momentum going beyond 2019 2020, hopefully? And also something that you talked about, you mentioned on the away from home tissue side that you're looking at adjacent products. That's nothing new to you. But I'm just wondering whether you are signaling some kind of step change, if this will be a bigger part of your professional hygiene business going forward? First question, I think we can say for Donato, who will talk after the break, because which is Tissue Roadmap 3.0. So how do we continue on this path of structurally improving our profitability of Consumer Tissue, which is very important and both through then efficiency improvement, but again, quality improvements and premiumization. But let's leave that, if you're okay with that, to Donato to explain. And then the second one, when we look at our professional hygiene business, we leave that to Don also, We it's actually slightly different. We have markets where we're incredibly strong on selling systems, solutions, adjacent products, just like soaps, we said it a 1000000 times and having really, really good margins and growth and outperform the competition. And then we have other markets and areas where we are not applying the full force of the torque concept. And that's something that you will see Don talking about how we're now rolling that out in all our markets. And this very much applies to North America, where we've been less sophisticated in a way of having an end user customer focus and more kind of pushing our products through the distributor system. So Dawn will cover that as well. Great. Okay. So now let's take a 15 minutes break. Let's meet here 11:30. And also I got some questions. The presentation, they will be available after this event on sity. Com as well as the replay of the webcast. Okay. So see each other again 11:30. You protected because we all need that extra help to go the distance. I discovered Tena Lady Discrete. It's designed to be super thin with fast absorption and still protects you from leaks. So I get all the discretion I need while wearing whatever I want. Join the 1,900,000 British women who trust TENNA. It's a big game. The stadium is full. There's 1 minute to halftime. You prepared the washrooms. It's one of the most crucial moments for you and your team. 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Then I continue on being a sponsor for strategy, M and A and CIO. And from 1st January this year, I'm responsible for Global Operations Services. We are a new unit, but the things we're doing is not new as such, but we're combining them in a new way. And on the slide, you see a lot of facts about our units. So for instance, we have approximately 2,000 FT feet feet feet feet feet feet feet feet feet feet feet feet feet feet feet Es. We are handling 2,300,000 orders per year, over 4,000,000 invoices. We are managing big part of working capital in Essity, and we are delivering 9,000 deliveries today every day. And as Josephine said, we're managing approximately 7,000,000,000 euros in cost. If you look into the SEK 7,000,000,000, we are managing 100% of raw materials and consumables sourcing, half of this G and A cost, 100% of distribution logistic cost and approximately onethree of COGS. We do that via our main functions, global sourcing, global supply, global business units Services and Global IT and Digital Transformation. Magnus talked about trends. Important to understand for us. We need to understand them in more details as well how do they impact the different parts we're working with. Sustainability, digital, our main trends impacting everything we do, but we also see some other trends. So if you look into supply chain, logistic costs are going up everywhere. Why? Because of different things, sustainability, labor, supply decreasing in parts of the world in terms of truck drivers, for instance. We also see new technology coming, self driving trucks, new machines, new technology in warehouses and things like that. We also have to reduce CO2 emission. In sourcing, you see consolidation on the supplier side, pulp manufacturers, chemical companies, etcetera. We need to understand how are we really working with them in the best way to, I would say, offset the negative parts of the consolidations to make it more positive. We also have to manage political risks. We have Brexit. We have potential trade wars, etcetera. We have to make the supply chain resilient. So if something happens in one part, we need to be able to source products or material from other parts. In Business Services, I would say digitalization, digitalization, digitalization is impacting everything we do. And we're also leveraging all that kind of trends into new technology and new way of working. Digitalization as such has been on the agenda many years now and the buzzword is becoming reality. And you saw Magnus earlier. I will show some examples. All my colleagues later on will talk about how are we implementing new technology in our business and making business out of it. Importance of data, data mining, all this kind of master data, whatever you call it in data, we now understand better how we can compute data, utilize data in manufacturing, in sales, in product development, in internal processes, etcetera. How can we use advanced analytics, machine learning, AI, etcetera, etcetera? Important to say, with all this, you also see a trend. Cybercrime is really also a threat that we need to take into account in whatever we do, and we do. We're working very closely with a couple of the biggest companies in the world, protecting ourselves as good as we can in this area. Priorities. We have 4 priorities. The first one is meet customer expectations with the right quality of service, meaning we need to work hand in hand with our business units and understanding the customer demand, the customer requirements. We need to understand the different customer segments so we can deliver the right service level to the right customer. 2nd target priority, continuously optimize cost and working capital. It's not only about cost reduction. It's about the right cost reduction so we can continue to deliver good service to our customers. We need to keep the customer happy. We need to deliver according to the expectations the customer has. And we need to optimize working capital accordingly. We can reduce working capital, but if that would impact negatively our service levels, the customer would be unhappy. So we need to balance this every day with every customer. 3rd priority, support profitable growth with scalable solutions. We have heard we have organic targets, 3%. We would like to add M and As on top of that without increasing the cost in the same pace. So what we are doing, we will provide platforms, process platforms, system platforms, so we can grow the business without scaling up the cost in the same way. Drive digital business transformation. In S and T, we talk about digital business transformation. It needs to be business driven. This needs to contribute to the business. So it's both from a business perspective and from a technology perspective. In operational services, we are the engine from the technology part of it and understand the business demand. Then we work hand in hand with all the stakeholders within the company. So what are we doing? Global Business Services 2.0 means that we already have been running a program in that part of the business. It's very much about reducing cost, increased efficiency, increased productivity, increased quality in what we're doing. Started in this setup 2012. We have been taking out 220 FT feet feet feet feet feet feet feet feet feet feet feet feet feet feet feet feet feet feet feet feet feet feet feet feet feet feet feet feet feet feet feet feet feet feet feet feet feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Approximately payments by 40%, in invoice handling by 20%, taking away manual work by 15%, etcetera. So productivity is super important in this part of the business. And how do we do that? We have already started with robot robotics processes. So we have done RPAs. This year, we have put in a lot of RPAs, reducing work by 30 FT feet feet feet feet feet feet feet feet feet feet feet Es. We will continue to do that. Organization, we have gone from a regional based organization to a truly global process oriented organization end to end. The beauty with that is that now we'll be able to drive economy of scale, process harmonization, end to end thinking, utilizing new technology. Going forward, we are building our digital operational platform. What is that? That's really, I will say, our process machinery. How do we process everything? We take it in. How can we prove it? How can we increase productivity in the processes using RPAs, using advanced analytics, using AI, etcetera? The idea is for 'nineteen to implement this on 100 processes, increase quality, increase productivity, minimize manual work. We will also use process analytics in processes. Previously, when you have to improve a process, you're starting to talk with people about postage and how do you do and things like that. Now we can actually use a digital tool. We go right into the system. We can see how many times do we touch an order, for instance. And we know that we are touching 90% of an order coming into us, even the EDI orders today. And how do you know that? Because we do this with analytics. Then actually we can also see where do we have the bottlenecks. Why are we doing this? And we should be able to today we have 90% we touch. It should be 10%. So we have huge improvement areas here to work with. Will not happen in one day, but we know what to do. Data mining, customer payments. If we understand the customer payment behavior, we can actually predict how they would pay. And that's what we're doing now. We know then we can be preemptive. We can send dunning letters. We can do a lot of different things actually to take away manual work, trying to get money we don't get in time, sending out a lot of letters talking to the customers. If we do it right from the first, we will minimize the manual work. We will improve the payment time and reduce working capital and save cost. We are in many places today with transactional services. We have to be in less places going forward. And we are establishing global service desks within the company to support everything we do internally instead of having a lot of different service techs everywhere. And we will use virtual assistance, robotics and things like that. Supply Chain Development. Our ambition is to create the best in class supply chain organization and way of working in Essity. We're starting from a distributed supply chain some years ago. We have been in a project for some years. Now we established this as one global unit, focused on sales and operational planning process, take care of all transporting, do all the forecasting both in demand planning and supply planning. We have done the first part. I will give you an example in just in a minute. Going forward, we will create the best sales and operational planning process there is. We will do that with transport planning, demand planning, supply planning, use digital tools, integrate fully, limit all kind of manual work, believe in statistical forecasting, AI, etcetera. We also need to look into our footprint of warehouses, distribution, etcetera. And that's what we do across all BUs, across all categories, across all geographies. Demand planning. We were coming from a very manual work in demand planning going into more or less fully digitized. We are today in 33 countries with this. We do it in 7 categories, 80% of the volume we have in the business today are now on statistical forecasting demand planning. We're using machine learning. We're using time series. And what have we done? Basically, we have been from process in regional to multicountry standard processes. We go from moving average to dynamic statistical forecasting. We go from manual promotion forecast to machine learning. We go from high manual to enrichment by exception. And we go from custom demand planning process to demand planning industry best practice. We will do the same in supply planning, just starting up, and we are doing the same now in transport planning. Global sourcing. You have seen on the charts earlier today that, that's been a tough situation for companies like us in raw material. So we have put a lot of focus on raw material savings, pulp savings, flexibility programs, etcetera. And during from '16, we have delivered €185,000,000 in savings. Going forward, we will continue with what we call fiber optimization, but also how can we replace one material with another, one raw material with something else. So that's the thing that we made an announcement this morning. You will hear more about it. Can we replace 1 fiber with other fiber and mix it into the overall mix and manufacture the same quality of products going forward. We will focus more on indirect sourcing, given the fact that there's been so much focus on raw materials. We have done a good job in indirect, but we can do more. So that will we will start a program doing that. We will use digital in everything we do, AI, advanced analytics. Digital transformation. We started some years ago, 2014, with 1 program within Esity. And we are on all aspects, customer, consumers. They do the digital enabled products, and they do the operational services. And where we will find most of the savings and the pure money, it's in operational processes, end time processes, advanced analytics, AI, robotics, etcetera. With that said, we also are in the challenge that, I will say, all big companies start to say, how do we gain the capabilities we need? So we need to upscale, right scale, new skill in the organization because we can't just hire new people. We need also to train the people we have who understand the current business we have. We are running a portfolio of activities, and we are now bringing internal stuff to the external world. So in the middle here, you have this beautiful baby that's a chatbot in the Libroclub, which we have been on the chatbot, virtual assistants for a year or more internally. Now we're bringing it externally, creating a lot of more interaction with the consumers directly also. We have the digital enabled products. And how do we work with digital transformation? We have one program we prioritize together. We have one budget, and we steer the business priorities together in the management team. So we have cost in control, we have priorities in control, and we are delivering projects on time, on budget. To give you one example, smaller business led initiatives, that is Torque EasyCube. Some years ago, we thought this is an opportunity. Let's innovate around it, build it. We build it on small technology to start with. Then we saw we need some platform to put it on. And now we have put it on Asia platform with Microsoft, who also contributing with the ecosystem when we'll continue to develop this. Entrepreneurial activities has been done with SensaSure SmartCare. And the same thing, we acquired the company. They developed it, leave it separately outside S and T, but still with S and T people. Then we put it on the Asia platform. We can roll it out. It's a very solid platform that will be robust and will work. A few bigger programs that we asked to finalize an internal HR program with HR process, HR platform. We select one tool for the whole company. We decide what to do and then we roll it out on time, on budget. Key takeaways. We are delivering value across the whole value chain and necessity. We're driving efficiency and effectiveness. We are delivering savings. We will continue delivering savings. We are driving the digital business transformation agenda. And we have a lot of other things to do as well that will bring value to the table later on. Thank you. Thank you, Robert. And Robert will be back for the Q and A session. And now it's time for our next presenter, Mr. Donato Georgiou, who is responsible for Global Manufacturing, a unit that every day produces 93,000,000 products for personal care. And also I learned 12,000 tons of tissue products. Donato, please welcome on stage. And there you have the clicker. Thank you, Josephine. At our mills, we recover wastepaper. Before turning it into pulp, the fibers are washed several times. The other main raw material is pulp based on virgin fibers from responsibly grown trees. The pulp is mixed with water and ingredients. The suspension is pumped into the paper machine. Water is removed in each step of the process. The tissue was winded up on a core and it has become a mother reel. In the converting, the mother reel is unwound, embossed with different designs and cut into individual roles or to folded products. The products are packaged and moved to the finished goods warehouse. Diapers, feminine products and incontinence products consists of a pad with super absorbent the top sheet and a backsheet of non woven fabric, which gives the diaper a comfortable shape and helps prevent leakage. The products are manufactured in a continuous process. The absorbent pad and the 2 sheets are formed. Stretched elastic bands are attached. The absorbent pad and the backsheet are joined together. The top sheet are fed into place. The endless sheet with the complete diapers is cut, folded and stacked into a bag for its final sealing and packing. Welcome in our beautiful factories, one of the key elements of our value creation journey. Just quickly introduce myself. I am since January in charge of Global Manufacturing Tissue and Personal Care. And for the last 4 years, I've been leading the tissue manufacturing with technology. You can imagine the tissue road map has been one of my key elements. And since 10 years in SCA, SCT and before in Procter and Gamble, produce more or less everything from toilet paper to Gucci perfumes. So that's quick story. The how do we will take the lead in shaping the future of manufacturing these categories? Just to introduce, we have the 90 production sites. The where we are absolutely proud is that we have mixed factories, consumer tissue professional hygiene, and now we are going to the next step to have Consumer Tissue Professional Hygiene Personal Care. So what we want to share is that we have manufacturing excellence capability and excellence in way of delivering in each one of our factories. And whatever makes sense to produce over there, we do there at the best and the best cost. And this is our footprint now is really becoming our competitive advantage. The priorities I will cover, of course, start with safety and then we will do cost innovation and we will finish with a beautiful innovation that we just launched today as one of the best example of what SCT stands for. And talking about what SCT stands for, we are a great company and our highest priority in manufacturing, but starting from the CEO, is the health and safety of our people. Tissue, personal care, but particularly tissue factories, are very dangerous. In our industry, there are very bad safety incidents, and we are absolutely proud to say that we lead the development of safety in tissue as well as in personal care. We have the we added the ambitious target to reduce 50% accident frequency rate, and we are now at 39%. Quite confident we will get there. But I can tell you, each single accident for us is too much. We are not working to reduce the accident and the incident. We are working to make a total risk free environment every single day. And in some elements of tissue competitors, this is something that is not believable, but we demonstrate to the world that we have factories that are running since 10 years without a single incident. And a lot of people around the world believe this is not possible, and we demonstrate this is possible. Talking then about COGS optimization. Of course, in strong collaboration with Robert, team in sourcing and then with the business unit, We work in SEK 85,000,000,000. We have SEK 85,000,000,000 of COGS, so quite big part of the cost of the company. And what I want to share with you is that we have activities in different areas with different approach that have to touch all the different elements of the COGS because each different element is particular and each different element needs different excellence. So first of all, state of the art manufacturing performance, which we have been building with TPM, lean manufacturing, automation, and I will show a bit later that we are now introducing a stronger digitalization to keep this state of the art, optimize raw material cost in use, environmental footprint, energy, water and customer proximity. Just some examples, I mean, of course, these are not all but some example. Productivity improvement in pieces per FTE or tons per FTE, even though this is we are now introducing high quality paper where we need less tons to make the consumer usage is continuously our focus. And year over year, we are improving it, not least with digitalization improvement, as I will show in a second. Energy consumption, in particular in tissue, it's a massive energy consumption. I don't know how many of you are engineers. If you are engineer, you know a terawatt of energy is quite a lot of energy. You can move cities with that. And with the program organically that we have between 2,008 2018, we have basically saved 1 terawatt of energy, which were re equivalent to EUR 40,000,000 and is, of course, a lot of improvement for the environment. Just a small, but I think significant example for plastic and for sustainability, just the use of stretch film. So the stretch film for the pallet, improvement with sourcing and also with the functions how we design the products. In 2 years, we have reduced 7 40 tons, so 13%. The saving is EUR 1,000,000. I mean, cost saving and cost consciousness for us is something important. Every 1,000,000 count, every sec count, but 7 40 tons of plastic reduction is something that is massive for the environment. And as Magnus and Frederic said before, we have hundreds of this project. So the beauty and our key value is that we collaborate with all the function within the company every day to come with something like this. And every day, something like this in each factory, in the long term, makes a big difference for the planet and, of course, for our value creation journey. I want to give just digitalization. Industry 4.0 in manufacturing, we can keep conferences for days and tons of book about what Industry 4.0 Manufacturing. I have quite long and bright experience in manufacturing, and I want quickly to give you my summary of strategy of what we are doing, what we are going to do. I think it's very famous that in the past 20, 30 years, I'm sure you know, Toyota Production System, lean manufacturing, total predictive maintenance, agile productions and basic level of automation. So today, we talk about digitalization, but we have LGV, AGV, Automated Guided Vehicle, since 15 years in our factories. This was, with a certain time, made possible to get to very good results, very good productivity, very good cost improvements. What we believe that will make the difference now going forward will be possible, building on these elements that, by the way, few companies really have because few everyone has been talking about lean manufacturing since 20 years, but few companies outside automotive has really been able to introduce lean manufacturing, particularly if we talk in a category like tissue. But if we introduce the three elements of self control machines and self control machines means a machine that is able to start, run the best possible material usage and slow down what is needed in a completely automatic way, it's the best level of cost. Our machine has to be like a 787 Dreamliner for Boeing, take off, run and land completely automatic with minimum energy usage. And they said that 787, not 7 37 MAX because that will be an issue. So it's the real one, the right one. Predictability, plus, plus, plus. What Robert just shared with the production planning, demand planning completely in algorithm, we need production factories that take the order, produce exactly what is needed at the moment is needed and get out of the factory very quick. If you still have machines that are stopping and they have breakdowns and they are not predictable at the minute, you cannot do that. You cannot fulfill the demand that we have, and this is very difficult. And transparency in real time in the data, so real time flow of supply chain data transparency, These are the three elements which makes us believing that introducing this on a very high level of lean manufacturing and excellence in TPM that we have. Introducing this will make the improvement bigger and faster. And this is the example that Magnus just mentioned on valves. Valves, among many other factories that we have, like August and in personal care, a factory that has always been top notch in delivering. Now we see the people naturally transforming and putting digitalization over there. And as Magnus said before, we see performances and results that we would not consider imaginable just 2 years ago. Then, for instance, concrete example in digitalization in tissue. In a tissue plant, normally you see people take the sample of the paper. By the way, when you take the sample, the paper is already in the storage. This is not effective. What we have now, we have a completely automatic and continuous re monitoring of the production. So we use algorithm to predict parameter and avoid basically sampling rate. This is, first of all, in tissue, cost of pulp and cost of material is very big. Whenever you can optimize it, it's really big advantage. Absolutely the same in Personal Care. In Personal Care, the normal way is to take sample of the product, look at this product, measure the parameter and make like the Japanese were teaching 30 years ago, the statistical process control point by point and extrapolating. This is today old. Today, each single of the 1,000,000 of pieces that comes out of our factories, each single pieces is controlled by automatic vision system, automatic algorithm that have monitoring of each single pieces. This is, of course, number 1, excellent for our cost in use of material, and this is where we can get the competitive advantage. But number 2, and I have, for instance, incredibly proud to share with you is that we are best in class in quality. We are best in class in quality in personal care product as well in tissue product. Here, you can see in 2 year in 2.5 years, 2 years and onefour, 3 years and onefour, we basically reduced consumer complaint by 57% coming from one level which was already best in class. And when I say best in class, I know because we for instance, we are shipping ink to Japan. We have Japanese customer, and you can count that Japanese, they complain on every single minimal thing, and we compare with that. We have Mercadona, for instance, where we are collaborating very good to make the best diaper absolutely. And what, for instance, makes also us going to the next level is that consumer complaint is not reported like on the old way, just on the telephone, the hotline, but this includes social media complaints. So we have our factory, our customer service that are connected with social media, and we take in also what report or people report or read in social media. Then I will just I just keep quickly the tissue road map. I have to go back. Then of course, a big element of the COGS improvement we had in the last 3 years was this famous tissue road map. You know the story. You know the background. SCA in tissue was coming from a rapid organic growth and a lot of M and A. And M and A that was coming from acquiring the European Procter and Gamble Tissue factories to acquiring the local family owned company. So we had all kind of geographical and also capabilities spread, I would say, puzzle. What we wanted to do, we wanted to transform this to the greatest opportunity we have and that we manage it. So we did, we basically classified an A, B, C, D. D were the not recoverable, so cure or kill basically in these in the factories. These were the kill cases where unfortunately, we had factories where technology that were obsolete, wrong location, wrong structure and eventually inserted in the wrong market. So we had to take care to sell or close or reconvert these factories. Of course, this is not fun at all in our job, but we had to take care of the business. And then we had the A factories, the factories that are, like we mentioned, valves and others, where these factories are state of the art, we know that every technology we bring there, every innovation we bring there will deliver quick result fast. They have the right technology, the right structure, the right capability, and they are in the right place. Of course, B, you can understand, is a sub of that. And then we had C, which is basically the case where we have to see factories that needs to be pumped up and really reshaped in a good way from a technological and structural point of view or fracture that we have to dispose. On this, we have done intense work. This is intense and a lot of not pleasure work to have 8 site closure, 15 paper machine closed with 320,000 tons. And by the way, we closed this 320,000 tons, and we are still producing the same quantity of before to serve the finished product because our my colleague in business unit are growing. So this gives you the idea in the factories that we are not closed and that we were focusing how much productivity and how much organically improvement we created, and we had to reduce 1400 FT feet feet feet feet feet feet feet feet feet feet feet feet feet feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet. We but without promising anything that I cannot do, you understand that we had one structure that was not clean. And now we transform this into an opportunity because now our strengthened structure, our optimized footprint makes possible that we can allocate the right product in the right factory. We can focus on fewer factories and pushing all our technological innovation and things and focusing our capabilities. So would say, for SCT, the beauty is still to come because now the cleanup activity hopefully has been done. Of course, we will continue always keeping maintenance on this thing. But now we transform a problem and an opportunity to take the lead. And talking about taking the lead, what makes me really, really proud to present to you in the name of the company this morning is this project, this press release we had today, where we announced that we'll invest around SEK 400,000,000 in Mannheim factory in Germany, which is our biggest tissue factory and one of the most advanced in the world, to start alternative fiber production from agriculture byproduct. This is this will deliver same pulp quality and same product quality as fresh wood fiber. So it's not at all a quality compromise. We always want only to increase our quality. And this is, of course, best case for commitment to deliver more with less and circular economy. Dramatically less energy, water and chemical usage, up to 50% CO2 reduction end to end in the full tissue supply chain from old forest to the consumer, reuse of product or local farmers and annual growth cycle. Just for you to understand, wheat tissue produced wheat straw has been used since 1960s to produce tissue. This is not a new thing. The new thing is the new proprietary process that we will use to produce tissue in a very high quality in the best environmental way. Because in the past, the problem of using With withdrawal was the generation of sulfur products coming out, which were environmental not good, number 1. And number 2, they were not cost competitive. We will have the most clean pulp production in the world with a cost competitive solution using this proprietary process that we signed where we have the worldwide exclusivity for tissue. And having said that, I just introduced you on this with the video. And this is the beauty of our manufacturing world. Ready? Thank you, Dimato. You skipped your key takeaways in order to save time. Thank you. So Robert Mainas, please join us on stage for this Q and A session. And who would like to start? I see somebody there. I'm blind by the lights, but Margherita, you see there? Yes. Thank you. Gustavo Scheren from Pareto. If we could elaborate a little bit more on the fiber investment that you announced today then. Curious about what you think could be the sort of mid- to longer term scale of your fiber sourcing from this area? Also the or any color on sort of return levels? It sounds that they're likely to be quite high. So yes, please. You see from the video at the end, it says now we're aiming to have 3 sustainable way of producing tissue, from fresh wood fiber, recycled fiber and agricultural waste. What we are doing now, we are investing in Manheim in this first big scale installation. Our aim is to start it up end of 2020, as is stated in the press release. And then base of that, continue this development, innovation, then we'll evaluate what makes sense to do, where makes sense to do and how to develop. At this stage, we cannot say more because really, this is the first time we're integrating something in this way. So to add to that, yes, so this is a test even though it's a large scale test. And of course, we our ambition is that this would be then cost competitive remains to be seen. We will not, however, become our own pulp supplier. We have an exclusive agreement. This is proprietary to us. We want to do everything we can to make this work to put pressure also on the fresh fiber suppliers and the other fiber suppliers and then see how this should then eventually be commercialized. It doesn't have to be us investing in it going forward. It's a way to find new sources of competitive fiber and to put pressure on existing suppliers. That's the main purpose at this point in time. Do you want to say anything about return levels? It's too early to say again. It's a test facility even if it's a full scale facility. Thank you. Next question. Okay, Maljarvierta, it's in front. Fahan Bank, Credit Suisse. Just quickly on the EUR 400,000,000, this might be a question for Frederic. Is that incremental CapEx? That's No, it's included in the €6,000,000,000 this year. So and some also for next year. Okay. And the second question is on digitalization. I guess a number of companies and the industry is talking about it. A lot of companies have needed to invest have to have well, put out incremental investment in upskilling and rescaling their employees and increasing their exposure to digital activities. Do you think you can become more digital within the current business plan successfully? Could it take you a longer time? How do you think about maybe making incremental investment on this? Yes. I can speak for manufacturer and then Robert for the full company because what I see in the sites, the smartest and best ideas and actually ideas that bring most returns are the ideas that cost close to nothing. So it's to what we are trying to do is, as Magnus said before, it is young that we are changing the role of engineer in factory. We are changing the role of process engineer. If you are smart today, you can buy a sensor for €20, €50. And by the way, the end of the things that you can do is the same that you could do 10 years ago. The only thing is that 10 years ago, to do the same thing, it costs the same sensor. It costs €200,000, €200,000 minimum. And today, it costs €20,000,000 You put in and you run and you try and you try and eventually fail or go quickly up. So it's the cost is not the biggest part. And the training program and the, let's say, upgrading of our workforce is something that we have always been doing and we will continue to do. This is why I brought from lean manufacturing programs to digitalization program. So it, yes, can be done in the existing business plan. Robert? Yes, that's correct. And if you look at the whole company, we are training people every day more or less in digital. That's probably to raise, I would say, the overall base of knowledge in the company. And then we are, of course, recruiting also people every day that are coming with the knowledge. As you know, we will not find all the people outside Essity and we can't. We also have train our people and upscale our people. We also need people to understand our business. You can't take an engineer with only digital capabilities and believe they will be good in manufacturing tissue, for instance, or sell a product. So the combination is really essential with, call it, an old capabilities and combine it with new capabilities. The thing here is that you don't need that many people who understands the new technology as such because we also have a big community within us who understand general technology. But the ones who understand the new technology, we collect them and put them in center of excellence and then they spread it out with other people. We learn from projects and then we scale up. So with that said, we also need to bring in more people. The beauty with the company, like I said, we also have turnover in personnel. So once someone is leaving, we are really keen on finding the right person bringing them in. From an investment perspective, we are scaling up, if you would call it an IT investments over time. But as I said earlier, we do it in a rigid cost control. So all budgets goes with me in IT. So we don't have any pools of money just going away somewhere. So we have it under control, but we prioritize within the executive management what is most prioritized and how do we run it. So for us, that's a good model that works. Yes. So you could do more with more money, but we think we are at a nice good balance where we are and don't expect to see that we will increase investments for these reasons going forward. Okay. Next question over here. Hi. This is Anat here from Morgan Stanley. One quick question from me. You've given a great presentation about how much you've improved in terms of efficiency, in terms of new technology. My understanding was that we had a lot of wood to chop in terms of upgrading technology, given we've grown historically with M and A. How far behind or ahead of the curve we are versus competition now, especially the newer projects which have come on board in consumer tissue, for example? You mean talk about the tissue roll maps? Yes. We are I can say we are on top or on part of in tissue, we are absolutely hired in technology. What we develop in paper machines, which are the core technology, we develop our own process developments. You see that with Wausau, we bought the Atmos. We have the other Atmos in close time. There are no companies at the moment that are able to run Atmos in a decent way, and we run-in a best possible way. So tissue, we are leading the technology. And in personal care, we are state of the art. Simple as that. From a cost position, I feel that we are competitive in personal care without doubt with the large factories that we have now throughout the world. In tissue, yes, we have many sites that are state of the art and incredibly cost efficient, but you have a curve here. And as we said initially, even though we've seen huge savings from tissue roadmaps so far, this is where the continued savings will have to come in the coming years. Of course, our competitors are also doing whatever they can to become efficient, but there's more potential here going forward. Okay. Last question before we go to lunch. Yes. Thank you. Karl Johndt Handelsbanken. A sustainability related question. You said that packaging and consumables was 25% of your COGS, and you showed an example plastic packaging and reduction. Yet I don't see any sustainability targets related to the use of plastic packaging, which is very of course, very prevalent in your company? We did through our cooperation in Elend Mercorto Foundation together with 99 other companies. We just signed the Common Pledge align in the sand, which means that we are all setting a target to have all our packaging to be recyclable by 2025. So that's our first plastic target and there will be more to come as we develop them. So we have a target there. That was set 6 months ago. All right. Thanks, Paul. Okay. Now we will have lunch here in Stockholm. It will be served outside and you have also the exhibition and I encourage you to go there. We have our expert in Medical Solutions, Doctor. Carsten Hemmerich. And in front of you, you have this with some products from Medical Solution necessity in our daily lives. So let's meet again 10 past 1. Thank you. The breast towels have a breathable top layer, so you feel fresh, while the secure fit shape keeps you protected because we all need that extra help to go the distance. It's new Lotus Moltenell Sontube. I discovered Tena Lady Discrete. It's designed to be super thin with fast absorption and still protects you from leaks. So I get all the discretion I need while wearing whatever I want. Join the 1,900,000 British women who trust TENNA. It's the big game. Hold ups, mess, empty dispensers could mean fans risk missing out on the action. Of course, this isn't news to you. But what might be is the launch of the new Tork Peak Serve Continuous Hand Tow System, the highest capacity hand towel system on the market. With Torq DeepServe, you're armed with 2 50% more towels that dispense fast, improving the washroom flow for any crowd. Because as you know, the less time they spend in the washroom, the more they can spend with your business. With Torque Peaks Okay. Welcome back. I hope you are energized after the lunch. Normally, you are not after lunch, but I hope you had fruitful discussions and maybe saw some of our demonstrations. Now it's time for the session about the business units, and we will start off with Health and Medical Solutions. In front of you, you have this, Tiana Silhouette, something we just launched. And our President, Oluska Karl Sroudd, will talk more about this, of course, Tiana and the interesting products we have in the medical area. So with this, you will soon see the results. I was out shopping with my daughter. She held up a pencil skirt. I don't think so, I said. Not because of my incontinence. I just prefer minis. No news. Thank you, Josephine. Just like Donato and Robert, I'm quite new in this specific position, started 1st January, but far from new in the company. I've been with Essity or SCA since 'ninety five, and I've had the opportunity to work in the different parts of the value chain and also across many of the different categories. And now it's I feel it's a privilege to work with Health and Medical Solutions, not the least because we so strongly support well-being for people, for patients, for consumers and also help caregivers to provide the best possible care in a cost efficient way. And in hand in hand with that mission goes the healthy business. We have strong brands in high margin categories and growing categories. As Magnus said, we stand for 21% of SCT sales, whereof 68% is incontinence care. And then wound care, compression therapy and orthopedics is 13%, 9% 10%, respectively. We have a global coverage, 70% of sales in Europe, 20% in North America and 10% is Rest of the World, which is Middle East Africa, Japan for incontinence products and APAC for medical solutions. And we're also we are present across all the relevant channels is one of our key strengths. It allows us to follow the consumer journey and adapt if sales growth shift from one channel to the other. Talking further strengths, of course, our leading positions is a fantastic platform for further growth. We are global market leaders with Tiana in incontinence products, and Tiana is the expert brand. And we're also global market leaders in compression therapy with Jopst. And we have global coverage and many other great brands in medical solutions that have a strong heritage like LeucoPlast. What sets us apart from many other medtech providers, so basically from all medtech providers is our specific combination of categories that we have, because that enables us to provide integrated therapy solutions. And we're also very proud of the product solutions and the product assortment we have with a lot of innovative solutions and a lot of cutting edge technologies. Talking about channel presence and that we're present in all channels being one strength that we have actually further strengthened by the acquisition of BSN Medical. As you can see in the picture here to the right, that shows the sales split we have between incontinence products and medical solutions in the different channels where we operate. And that illustrates very clearly that we have complementary channel strengths. So for example, we are very strong in hospitals with acute wound care and with fracture management, and that we can leverage to strengthen Tiena position in hospital. And we have a very strong position in nursing homes with Tiena that we can use to expand our assortment with medical solutions. And also, I would say we benefit, of course, from joint negotiations in, for example, the pharmacy. Just one recent example there is in Denmark, where we just got listed with Leuco Plus, thanks to the strength we have with Tiena. Another benefit that we have with now combining Medical Solutions and incontinence products is that it creates a new innovation platform. Many people suffer from incontinence and other medical conditions. And with us now having a broader scope, we can take a more holistic perspective on the patient and on the caregiver and innovate to solve their needs. Also, we have complementary competencies. So for example, the strong medical expertise and broad medical expertise and experience of clinical studies and data in medical is beneficial for Tiena. And the capabilities and know how we have in marketing and branding in Essity is something that we can leverage for medical solutions and to build the medical brands. And speaking about the brands, let's have a look at those and also the product assortments that goes with them. So for incontinence products under the brand of TENA, we have, of course, incontinence protection. But we also provide, for example, skincare, which is especially adapted for elderly skin. And then we have this product, which I think is one of the most known in the medical assortment, the LeucoPlas product. And this is part of a very wide assortment of acute wound care products that we have where we have, for example, surgical tapes and post op dressings and adhesive bandages and so on, both for health care as well as for at home. We also have Advanced Wound Care under the Cutumet brand, covering all stages of the healing of chronic wounds. And if you have not yet been out to visit the exhibition where you can see how we use the specific products, I really recommend you to do so because you can learn a lot on the specific products when you do that. And there you can also see what we offer under the Jobs brand, which is compression garments and products, both for lymphology as well as for phlebology. And we have both ready made products as well as custom made products in that assortment. When it comes to orthopedics, I think for those of you or those of us, because that certainly goes for me, who have overestimated your physics in the running track, you might have come across this product, which is in our physiotherapy segment. And besides that, we have also casting and splinting, braces, orthopedic soft goods and so on in the orthopedic assortment with the main brands being Delta, Cast and Actimove. Looking at the split of these different segments. If you look at Wound Care, it's roughly seventy-thirty, acute advanced. Looking at compression therapy, it's roughly seventy-thirty phlebology, lymphology. And looking at ortho pedics, with more than half of our sales is in fracture management. And for all medical categories, I would say that the dominating channel is the health care channels. But also for incontinence products, we sell most of our products through health care channels. So 70% is through health care channels. Retail is growing, and that is now 30% of the sales. Now before we look closer at our position and the market view, let's look a bit on the reason to be for those categories and for those markets, which is actually the conditions that we treat, and we start with incontinence. Incontinence is defined as a set of chronic diseases, and there are more than 400,000,000 people that are affected by this. And that's probably much more than most people are aware of. 1 out of 3 women over 35 and 1 out of 4 men over 40 suffer from incontinence. The awareness is probably even smaller for lymphedema. 1 out of 6,000 are born with lymphedema, which is swelling than of legs or arms. And roughly 150,000,000 people get or have lymphedema that they get from, for example, cancer treatment or from infection. This is not something that you can cure, but you can reduce the swelling and you can control and maintain the swelling through adequate care and through compression stockings. And when we talk lymphology, that is about the disorders of the lymphatic system. When we talk phlebology, that is about disorders of the veins. And here, when we have very mild cases of chronic venous insufficiency, as you see on the first pictures here to the left, then compression stockings is the accepted standard of care. When we talk more severe cases like you have on the pictures to the right, a leg venous ulcer may appear and then you need other products. And that's a typical example of where our integrated therapy solutions come into play. Because what you need to do if someone has a venous leg ulcer is you need to remove the liquid and rebuild tissue, and you do that with our Cutumed range. And then you need to reduce the swelling and prevent reoccurrence, and you do that with our jobs range. So we have all the products that are needed to treat this condition. And looking at other types of chronic wounds, there are also diabetic foot ulcers, where also our compression or sorry, our orthopedic assortment is included in the therapy solution in the integrated therapy solution. Another very widespread chronic wound is pressure ulcers. And it's not at all uncommon that bedridden people, elderly people in nursing homes suffer both from incontinence as well as from pressure ulcers. Chronic wound, the definition of that is that it doesn't heal in 6 weeks. And 1.6% of the population suffer from this type of wounds. Normally, it comes or is based on underlying chronic diseases. Acute wounds, on the other hand, that is caused by external damage of the skin, could be by surgery or it could be by the daily life and the small or big accidents that happens in daily life like on these pictures. And by the way, can you tell which of these wounds that is protected with the LOCO plus dressing? Can you tell? No. Good. It is the left the right one. It is the knee. And that shows very clearly, of course, how transparent and pliable our assortments our products are. It's almost like a second skin. And I can again you can see much more of that in the exhibition. So I really recommend you to go there. Talking orthopedic injuries, we could do for hours because there are so many. But if we talk about one, the most common one is ankle sprains. 20,000,000 ankle sprains in U. S. And Europe under a year, that shows just how common it is. And for those type of injuries, the normal treatment is that you need immobilization with fracture management. You need stabilization with braces and support, and you need to prevent reoccurrence with physiotherapy products. And again, we have products that support the full continuum of care. So the high prevalence of these different conditions is also what is driving then the market size and the market growth. Looking at the global incontinence market, it's €9,400,000,000 and it's growing by 5% to 6%. Europe is slower, that's 2% to 3% growth. We are strong global market leaders with 20% share of market, which is almost twice as much as the closest competitor. And in Europe, we have as much as close to 40% of the market. North America, there we are number 4 with a moderate share in U. S, but a leading position in Canada. And if we move to Medical Solutions, there, the categories are growing 3% to 4%, and we are number 1 in compression therapy, number 3 in orthopedics sorry, yes, in orthopedics and number 5 in wound care. Then if you add that up together, that makes us number 4 globally in the categories where we compete and number 1 in Europe. But behind these figures, there is and I think Magnus was talking about that also, there is some very strong local positions and strong segment positions. For example, we are number 1 in fracture management, which gives us a very good door into the hospitals. And also number 5 in wound care might not sound too impressive, but we have, for example, a leading position in acute wound care in Germany, which is our biggest market. So there are many of those examples across the 100 plus markets where we sell our products, and that is, of course, a very good base for continued further growth. And there is a lot of growth to capture because if we look at the market trends, they are supporting continued growth in the categories we operate in. The demographic trends are certainly playing in our favor. All of our categories are driven by an aging population. And also, on top of that, we see that the prevalence of chronic diseases like obesity and diabetes and so on are increasing. Also, we see that penetration is increasing, driven by a higher awareness of health and hygiene, generally speaking, and a higher access to health care in D and E markets. And I think we all can relate to that we want to take a bigger part or active role in our own treatment as well. So there is much more self diagnosis and self treatment, which also influences the demand. So there is clearly higher demand of our products and our categories, and there is clearly a higher demand of health care. At the same time, the budgets, the public funding is not increasing in most markets. So of course, that puts some pressure on the system, and that leads to cost pressure. It leads to reimbursement changes. It leads also to more self contribution. And also, we see market consolidation both in health care and retail, which adds on to that cost pressure. And this is, of course, a challenge for us. But at the same time, we see that as opportunity, and we see a lot of opportunities in that as I will also talk a bit more about later. So what is our ambitions then in this market context? Well, for incontinence products, our ambition is to continue to strengthen our global market share position and to shape the category by driving penetration and increasing awareness. Also in compression therapy, our aim is to strengthen our global market leader position. And when it comes to wound care, we want to accelerate the growth, both to strengthen positions, but also for Advanced Wound Care to create more scale. And in Orthopaedics, we want to maintain and build on and leverage the number one position we have in fracture management and by that, grow the full orthopedic assortment. And what is the common denominator between these category ambitions? That is to generate profitable growth. And in order to do so, we aim to accelerate growth across markets and channels. We aim to leverage our excellent go to market model to bring new consumer and customer value through innovations to shape the health care market and needless to say also to continuously and relentlessly improve efficiency and reduce cost. And we're going to look at some of these priorities. We start with the first one to see now what have we achieved so far and what will we do moving forward. And if we look at incontinence products for Europe in Health Care, we have grown above the market. A big part of that business is tender driven. So of course, our tender excellence process is a very important part for us to succeed with that. But I would say another key critical success factor for us is the service we provide to nursing homes, what we call as Tiana Solutions. There, we have I mean, we have worked with health care professionals over decades, and we have developed very good best practice care routines. And based on that, we educate and train nurses, and we combine that with our high quality products and with access to expertise. And I was just in a nursing home not so a few weeks ago actually, and it was amazing to see the difference our Tiena staff is making in the nursing home and the loyalty that creates. So this is really a key success factor for us. Also part of the success recipe is to continuously actively work with mix improvements by innovation or by expanding the offer to adjacent products as well. Also, we, of course, implement price increases now following the increasing raw material costs. But as someone said before, a big part of our sales is tied up in multiyear contracts, so it does take some time. But we have other things, other tools as well we can upsell within our existing contracts. And that means basically that we sell higher value products by talking total cost of care instead of cost per piece. Moving forward, we aim to just continue to execute on this success recipe. If we move to retail in Europe, their competition has intensified quite a bit, with Procter and Gamble entering the category, with local competitors being more and more aggressive and with retailer brands expanding. But we have benefited from the accelerated market growth that has followed both that we and others have invested more in the category. And we are very clearly market leaders with roughly 50% share of the market. And how we have succeeded with that is that we have also increased our investments in advertising and promotion. And not the least, we have accelerated our innovation program. So as an example, we have invested in new technology in order to be able to provide more discrete and feminine Tiena pads assortment. And this innovation program continues. We just recently, as you saw in the TVC, launched the first black protective underwear ever in Europe. And we, at the same time, upgrade our brand. So you see a new logo type, a new packaging design and also revitalized communication. And that is to create more appeal for the women and men who come into the category and specifically in the retail segment. So let's have a look again on how that looks. And you being a mom would have a few surprises. Bigger boobs. Burst. Nobody mentioned incontinence, though. A little bit of we is not going to stop me being me. So the consumers will meet a new Tena, both in the shelf as well as on TV. Moving across the Atlantic to North America. There, we have managed to turn around the business in recent years. We worked with cost savings across the full value chain and got back to black figures in 2016, earning the right to grow. And in 2018, we grew in all parts of the business. And we will continue to create value by leveraging now the new technology that we have put in place for our briefs, which gives us a more cost efficient as well as better product, but also by having a more rigorous approach how to identify and secure new customers and also by leveraging the quite solid position we have in the Pads segment and differentiated concept of intimates in order to create a sustainable position in U. S. Retail. Also, we will grow e commerce, which is a very important tool for us in North America and not only in North America. In 2018, we grew 16% in e commerce in self pay. And more importantly, I would say, is that we have more than fair share in that channel. So I would say we are very well positioned in order to capture the growth in this highly growing category. And we will continue on that path when it comes to Tiena and also explore this more when it comes to Medical Solutions where we do not have the same maturity today. And I think we can accelerate that quite a lot using the capabilities and the know how we have with Tiena. Speaking Medical Solutions then, how are we doing there? Well, we have accelerated growth in 2018 in in a number of markets: U. K, Nordics, India, Netherlands and some others. We have also started to capture the benefits from this complementary channel strength and a stronger portfolio leveraging cross selling. But even so, we did not live up to the growth expectations last year. And the reason for that was because we were struggling in our 2 biggest markets, Germany and U. S. We took some corrective actions to that and have changed the sales and marketing setup in Germany and also sharpened our value propositions, and that has paid off. And now we put a lot of focus, of course, on doing the same in North America. We have put a new leadership in place since February and combining the 2 organizations. We are sharpening the value propositions. We are in the middle of the integration project, but we've already made some changes in the sales setup, which allows us to better leverage the integrated therapy solutions. And also, of course, we will take the learnings and reapply what we can from the turnaround of incontinence products in North America. That was the first priority. Now let's move to the second priority, which was about leveraging an excellent go to market. And when we design a go to market in our business, there are many things to consider beyond the basic go to market model and optimizing channel presence. So very important, who is the payer? Is it the user him or herself who is paying? Or is it reimbursed? And if it's reimbursed, is it fully reimbursed? Or are we talking a co payment model where the user is paying part of the cost? Or are we talking a top up model where the consumer can pay to get a better quality than what the reimbursement system allows? And then, of course, are we talking publicly funded? Or is it private insurance companies that are financing the products? Equally important, who is making the brand decision? And here, we often have to consider 2 decision making processes. So we have to win twice. 1st, we have to get on the list of short list of products that the health care providers can choose between. We need to get the license to sell, you could say. And that would normally be with, for example, hospital management or a group buying group of a consolidation of hospitals. And then we want to be the choice at the final selection. And the decision maker there could be the prescriber. It could be a user him or herself. So all of these different call points, the full set of call points, all of these things to consider looks very different from market to market and also very different from channel to channel. So consequently, we design our go to market locally. At the same time, we develop and deploy global processes to drive commercial excellence. Then if you look at those stakeholders that I talked about, they also have quite different interests, everything from health economics to the tangible services that you provide to the clinic. So in summary, you could say that we designed our go to market to leverage the multi category portfolio and to leverage our scale while targeting the specific needs for each of the stakeholders at the call points based on channel segmentation. Equally important as the channel segmentation is the target group segmentation. So just to take an example, if you're a caregiving relative and you buy products for your mother that you care for, incontinence mother, for example, you probably have very different needs in terms of products and communication than a woman who is entering the category and just have started to experience mild bladder weakness. Even if you buy the products both of you buy the products in the e commerce channel. And I think this, to me at least, illustrates the complexity that we have to deal with in this market. And in my view, our ability to manage and leverage that complexity is one competitive advantage for us. Irrespective of target group or channel, innovations is, of course, important to deliver on customer expectations. When it comes to Medical Solutions, we leverage a lot the medical expertise in order to deliver relevant innovations. And the examples here to the left are both addressing health care challenge to prevent infections. So it's leukoplasts with antimicrobial features in the spools, and it's a combination of a unique sore back technology and one of our phones into an innovative new dressing. At the same time, we leverage Esity's know how in marketing and consumerization in order to improve the appeal of our products, as we have done here with jobs adding more colors and patterns and both improving the appeal, but also providing new news to the medical device shops. So innovation is an important growth driver. But what this picture shows is that the share of sales of our different segments in Medical Solutions looks very different from market to market. That's based on historical focus, different assortments. But what that means is that we have quite a big opportunity already with an existing assortment just by rolling out what we already have in the assortment. Moving to incontinence products. There, a recent success story is our pants growth. Pants is the excellent choice for a mobile user. It's easy to take on, take off. It's underwear like and so on. It's also a high margin segment that increases the value of the category. So they're all the reasons to drive pants penetration and conversion. So we have had a quite extensive launch program over the years in order to drive pants conversion. An example is that we have invested in new technology in order to have an affordable range and we have also gone gender specific. And there are many other examples. And that have paid off certainly. And I think that is an excellent example of how innovation drives profitable growth. Now we also have high expectations on what you see to the right there, relaunching our Tiana assortment in health care with skin health features. We know that elderly skin is more fragile, so addressing this makes us more relevant both with consumers and with customers. Another important area for innovation is sustainability. We have mentioned that a lot today already. But here, just to mention a few examples from an HMS perspective. Tiena Solutions, it does not only reduce the cost of care in the nursing home, but it also has some clear sustainability benefits, improving well-being being one of them and reducing waste being another one of them. Another achievement is that we have reduced the carbon footprint forefront of sustainability by leveraging tenant solutions, by continuously reduced carbon footprint, also by reducing plastics as well as post consumer waste. And there, we have an initiative, a pilot ongoing right now with a partner, Renui, in order to address post consumer waste. Also, our digital solutions play a role in sustainability as they do in shaping the health care market. I talked about this that the health care system is under pressure. And also, we will be fewer and fewer people to care for more and more elderly people. So that puts the system under even more pressure. And this is, of course, a challenge for society. And we want to be part of the solution to that challenge. We want to be the best partner to health care in order to reach their goals in providing the best quality of care, respecting budgets and respecting staff limitations. And here, digital solutions play an important role. Probably remember when we launched T and Identifi some years ago, we that is then a data driven continent assessment tool for the nursing a data driven continents assessment tool for the nursing homes. That has we have learned a lot from that launch, and we've also seen very clear benefits from it. Just an anecdotal example is the nursing home that just got an award the other day for their work with Continence Care. They had both reduced costs and significantly improved well-being. And Tien Identifi was their vehicle to succeed with that. So now we are expanding this to pants as well. At the same time, we are launching the next generation digital solution, which is TENA SmartCare, which is a digital change indicator. And this is only the start of the journey of how we can transform elderly care with digital solutions. And this is relevant also for Medical Solutions, to provide adjacent services based on digital technologies. The example I brought here is Jobs LEXPERT, which helps then fitters of compression stockings to measure their patients in an efficient and accurate and dignified way. And just to quote a customer in a medical device shop in Germany, she said that, well, this device, of course, helps me with the patient, but also it makes my shop look much more modern and attractive. So there are many benefits with having digital solutions. And for us, of course, it's supporting and strengthening our product offers. It's creating new revenue streams, and it's also creating the connection, the direct connection with the caregivers. And I would say that is not the least important because in this rapidly changing market that we're in, an environment that we're in, for us to build and own the connection, the direct connection with consumers and customers will be increasingly important. And there also our websites come into play. We have for our TENA websites, we have 14,000,000 visits across the 38 markets where we have it. And we have then also this target specific for 6 different target groups. And here, we can create that direct connection, both with caregivers as well as with users and consumers. And we can shape health care market in the sense that we spread awareness and increase the knowledge. And it also calls to action. It generates samples as well as purchases because we have the web shop attached to it. Last but not least, we shape the health care market and improve well-being and also, at the same time, grow our business by improving penetration or increasing penetration. 1 out of 8 of patients with lymphedema are using compression stockings. And we know that, that is part of the best possible care that they could get. So 7 out of 8 are either not diagnosed or they are diagnosed but not treated or they are treated but not ideally treated because without compression stockings. And if we look at male incontinence, only a fraction are aware of that there are purpose made products available. And we see studies that say that 3% only are using purpose made products. So of course, what that means is that there is a huge opportunity for us to increase penetration of our products across our categories, but not the least for male incontinence and for lymphology. So with that, I hope that I have left you with the conclusion that we are very well positioned to drive profitable growth through our market leading position on Tiena and our market leading position on JOBST and through our other strong positions in the Medical Solutions categories and through our excellent channel presence and our strong customer and consumer offers today and in the future. And I also want to highlight this again, the favorable market trends because the demand of our product, there will be more and more people that need our products. And we are committed to support them to lead healthy and active lives. And that goes also for astronauts. They also need our products in order to deliver their mission and stay healthy. So I can proudly share with you that with our jobs assortment, we have 100% share of market in space. With that, I say thank you. Thank you, Olivia. Impressive 100% market share in deep space. And I would like to add actually that with the compression stockings, not only for the ones with lymphedema. I normally wear them on events like this. I realized I was in a hurry this morning. I don't have them. But I encourage you when you travel, sit still like this. Compression stockings are really, really good. As you have heard the whole day, innovation is very important for us. And a very innovative man was Mr. Konrad Jobst. And in the break, again, I encourage you to see Mr. Carsten Henrich. I see you over there. And maybe you can tell the story how Mr. Jobst invented the stockings in the 1950s. So with this, we're going to go deep dive into our next leading brand, Torque, and to the professional hygiene business with Mr. Don Lewis. And with professional hygiene and Torque, we can help customers to think ahead and support business for big crowds. So with this, Don Luis will soon enter the stage. Into our latest high traffic venue solution to get your venue crowd ready because the more people that come, the more your business will thrive. So bring on the people, bring on the crowds. Good afternoon, everybody. So welcome to be in front of this crowd this afternoon. A little bit about myself. I'm President of Professional Hygiene. I've been in this role for a little over 3 years. Prior to that, for 4 years, I was President over the Americas with all the categories Consumer and B2B in North and South North and South America. And prior to that, President of the Tissue Business in North America. I've come to Essity through acquisition. I've been with the company 16 years, which I think is a really good sign that our company values people that come in from acquisitions that we make. I've been in the B2B business for 30 years, so I'm very experienced in this area, and I'm very passionate about it too. I'll be the only one not speaking about consumer goods this afternoon, but hopefully, you'll find it as exciting as I do. So if I may, let me begin by letting you know how our sales are split. Our net sales by region are pretty evenly spread between Europe and North America, 48% North America, 51% Europe. And you can see a sliver of sales in the Middle East and Africa. This has been a good growth business for us, although it's very small right now. We brought this into the business unit a little over a year ago, and I'm happy to say we've grown at a very good rate of speed, and we've had over 50% growth in our strategic products. So that's a good story. To let you know about our end customer segment, we're very super focused on our segment strategy. Part of our new marketing organization that we developed through our go to market is focused by segment, and we use the segment expertise to fuel our innovation. We not only focus on these 5 segments, but there's many subsegments and micro segments underneath that we focus on. The biggest is hotels, restaurants and catering. This is a large area for our company, particularly in North America, where one out of every 2 napkins is made by Essity and the Torque brand. Commercial buildings being 2nd, we're a little stronger in Europe than we are in North America. The other public interest, industrial, where we're looking to grow, but in selective geographies where we could find the most profitable opportunities and health care is a good opportunity for growth. If you can see if you had a chance to hopefully see some of the displays, the one is the, the glasses that we have for the virtual reality. We work with the World Health Organization on this to really help that need of hand hygiene and help educate healthcare professionals. So if you haven't got a chance already, please look at that. Our strengths, a great global business and a great global brand, a very strong innovation pipeline. And you'll see through the presentation, this is the cornerstone as to what we do. A highly experienced sales and marketing team, very tenured, but we're also adding new talent to the organization to help take us to where we want to go in the future. Strong environmental position and expanding digital capabilities. We've made a lot of inroads over the last 2 years to really strengthen what we do here. Superior go to market, when I took over the Transatlantic organization, one of the first things we did was work at how we could leverage our skills across the Atlantic and also make sure that we're leveraging the market muscle, but also looking at how we could enhance marketing, digital, business development and so on, and activating an omnichannel approach. We want our customers to be able to buy from us any way they want to buy. So we're number 1 professional hygiene brand in the world, and I'll give you a couple of facts. We're in a 111 markets, so we have a vast presence. 200 plus patents, you can't have this sort of innovation without protecting it. And we not only protect it through patents, but we enforce our patents. That's always a good complement. We have people trying to copy our products everywhere in the world. 95% of our global sales come from positions where we have number 1 or number 2 market share. So though you can't see with the blue color there, which is where we're present, most of these we have a very strong number 1 or number 2 position. And we've placed over 6,500,000 dispensers over the last year and on an annualized basis. This is important because this helps the pull through of our product, but it's also a lot of our innovation and it locks in our customers and creates a lot of brand loyalty. And torque, our brand is super important. Recently, we added the tagline, Think Ahead. A matter of fact, I made it the topic of my leadership conference this year. And you'll see how think ahead goes hand in hand with our ambition. Our offer for a long time, you've known we've made tissue towel, napkins, toilet paper, Toipa, facial tissue, wipers cleaning products, dispensing systems, but we've really been expanding our skin care offering and we've had double digit growth, cleaning, maintenance as you'll see from our Easy Cube and our Torque Paper circle. So a couple of new areas as we expand our portfolio. That's why we really changed to professional hygiene versus traditional away from home because it leaves us a lot of opportunities for expansion of our portfolio. The professional hygiene market globally, we have a 19% number one share. It's a bit of an optical illusion. It doesn't look like it on this slide, but trust me, we're the number one global position. In Europe, we have a very strong position with 31% market share and 23% in North America. A couple of things that I'd like to point out about the 2 mature markets. As you can see from Europe, we have a very large market share, and it's not it's very fragmented after that. We have a number 2, a number 3, which make up about half of it, and then it's extremely fragmented. In North America, it's much more consolidated. 3 players make up almost 3 fourths of the marketplace. So it's a little different. It's also the same from the customer perspective. We have much more customer consolidation in North America than we have in Europe. So our customer insights are the same throughout the world, but what we do from a channel perspective is a little different and how we compete in the marketplace is a little different. These are some of the trends impacting professional hygiene. I'm not going to go through all of these, but if you could look at the top row, I think you'll see through, the items that I present today that they're all pretty important to our future and plays well to our innovation: well-being, cost consciousness and an increased customer experience digitalization and technology and growth in e commerce and office channel. So these play very well to how we're positioned for these future trends. Couple other ones I'll focus on is the circular, society and sustainability right in our sweet spot and certainly disruptive business models. As you know, we're working to be disruptive. There has been more partnerships and alliances, and a lot of this is our big customers are getting bigger, which means with our global reach, we're best positioned to help them with their future needs. As I mentioned, we updated our go to market strategy and being the global shaper of professional hygiene solutions. This is something I brought to the table a few years ago because it's one thing to be number 1 in market share, but it's even more important to be viewed as the market shaper. And I want to stress this with everything we do, including innovation. That's why I think ahead tagline that I mentioned that goes along with our Torque brand is so important because to be the market shaper, we have to have the insights to always be thinking ahead of our customers' needs. If you think of their job running a business, they have a lot of things that are important to them in each day. I'm not saying that our products are one of them, but the easier we can make the purchasing of our products, the better we make their lives. So we want to think ahead so that they don't have to. And I want everybody in my organization to make sure they think ahead every day to look around corners so that we're prepared for the future and we can continue to be the market shaper. The heart of what we do is to best serve our end customer. That's the most important thing we can do. And it's the insights of our end customers, which drives our segment strategy and which also drives our innovation strategy. Enhance our value proposition. We need to make sure that people know what the Torque brand stands for. We have a very strong position, but it could always be better. So we need to make sure that the enhanced value proposition is known by everybody. And transforming our channel partnerships, we have a long tradition of going to market with distributor partners who will continue to be important to us, but we have to make sure that our end customers can buy any way that they want, whether it be e commerce through traditional distribution or any other channel that they want to buy from. So we want to make sure that we're there for everybody. Our priorities for growth, for profitable growth more importantly, return growth in North America and I'll come back to that in a moment, execute our segment strategy build upon our Toric brand commercialize our innovations grow our strategic products and improve our cost position, working in tandem with Robert's team and Donato's team and scale digital. Returning to growth in North America. As you know, 3 years ago, a little over 3 years ago, we purchased Wausau Paper in North America. I'm happy that we delivered on our synergies that we publicly committed that we would. We did have a little bit of something that we didn't unprecedented raw material increases. In North America, in particular, it was recycled fiber. So where we had planned on growing, all of a sudden, a lot of the business that looked profitable didn't any longer because of this change. So we did shed some unprofitable business. If we wouldn't have, it would have had up to a 2% impact on our margin. But as you can see, we've kept pretty steady margins over that time frame. So we were able to mitigate a lot of that through price increases and through shutting of business. Margin improvement continues to be a focus, price increases and improving our product mix. And really, returning to growth has to do with strategic products, go to market capabilities and our e commerce strategy. So I can tell you that we're positioned very well now. The majority of that is behind us, and we're positioned in a good place to grow for the future. Our end customer strategy is very holistic. It's really powered by digital transformation, way of working in collaboration. It's part of the theme of my whole management organization, looking at standardizing processes. We even had our leadership meeting this year, which is usually getting our top leaders from top across the globe together, and we did it virtually. We were able to hit 5 times the amount of people that we hit at 10% of the cost. So we need to walk the walk. E commerce, I'll come back to. Automation and robotics, we're looking at every opportunity, whether it's invoice processing, rebates to make sure we use automation, and we're using robotics for a lot of our product testing. Data driven decisions, business analytics, CRM dashboards, digital enabled solutions. As you can see, we offer both from a customer purchasing perspective and from digital enabled projects and search and digital marketing. Digital enables us to offer good shopping anywhere, anytime by multiple touch points to our customers. And it's really holistic, e commerce activation, a 360 account approach and 360 brand activation. Why this is so important to have this holistic approach? You could look at digital as if you're adding a room to your house. You can frame the room and just leave it alone or you could build a room, you could make sure that it's completely decorated, that it's got good music, good artwork and it's very inviting for people to come into. We want to create an experience that's very inviting for people to come into this exact same experience that they would have if they had face to face contact with us. We celebrated an anniversary last year, 50 years of torque. So we celebrated across all our businesses and organizations. And I think you can see by some of these slides, these visuals that I won't go through, it's always been a cornerstone of what we do. And it will continue to be the cornerstone in each and every year as we come out with new innovations, and more importantly, looking at blockbuster innovations. Strategic products. This has been a very good growth story. And our strategic products are differentiated. They usually have some sort of proprietary nature. They have good cost and use stories, good sustainability messages, and they bring us much better than average profitability and hopefully bring value to our customers as well. We've been very focused on growing this. This is mixed development. It's driven by our innovation pipeline, our sales compensation program and even the programs that we have with our customers. You can see now half of our products transatlantically that we sell come from strategic products or non commodity type products. If you went back in history and I don't have the comparables because we used to be aligned differently, but 15 years ago, we were in single digits and we've come a long way since then. Torq EasyCube, hopefully you've seen some of the updates that we've done. Number 1 software for data driven cleaning. This IoT endeavor that we've done has proven to be very successful, but we're still learning as we go. We not only have the sensors in the dispensers, but we also offer digital cleaning platforms and also dashboards that they can use. We also have claims, 20% cleaning hours saved, 30% higher customer satisfaction and 99% fully stocked washrooms. And these are claims that we stand behind. And we've taken a step further. Certainly, when we introduced it a few years ago, it was in its infancy. But now we have a platform for digital cleaning that can not only be used with our products in the washroom but could be used throughout the whole facility. If you remember, if any of you heard me present at the last Capital Markets Day, I referenced the bottom left corner, Groenaloon's Amusement Park and how they had had, great customer satisfaction, always had stock dispensers. They had less turnover of their facilities people. And now I have all these customers to talk about and many, many more. We've won several awards, as you can see, cleaning and hygiene awards, inner clean awards for innovation, ISSA, International Sanitary Supply Association Award for Innovation, and we have a great group of end customers. Sodexo, who is a partner of ours, I met with them. They invited me to their headquarters last year because they were actually awarding their internal people on an innovation team that they had. And the innovation team was awarded because was rewarded because of the work that they had done with us with Torque EasyCube. And it's a good segue into a video I'm going to present, and I think you'll recognize the end customer of somebody you've probably heard of before. So there's nothing that makes you prouder than a customer's innovation, our Torque PeakServe, and this is really revolutionary. I was at the ISSA show, the sanitary show, which is the largest in North America, and I had a very discriminating customer come up to me that never gives compliments and said, you really have a game changer here. And I said, I know we do. And if you look at this product, it's not a folded tile, it's not a rolled tile, it's completely different, it's a continuous fold tile, 35% more capacity than any product on the market, 600 more guests served 2 50% more capacity than any standard tile system. It's compressed, so you get 2 times the product in the same amount of space, 3 seconds as far as customers flowing through, and it really cuts the time in big events. So you could imagine this is a very big product for us. I'm going to show you another slide for another video clip. It's a big game. It's a big game. Hold ups, mess, empty dispensers could mean fans risk missing out on the action. Of course, this isn't news to you, but what might be is the launch of the new Torq Peak Serve Continuous Hand Towel System, the highest capacity hand towel system on the With Torq Heat Serve, you're armed with 2 50% more towels that dispense fast, improving the washroom flow for any crowd because as you know, the less time they spend in the washroom, the more they can spend with your business. The big game, morning rush at the airport or sell out concert, bring on the people, bring on the crowds. So if this cooperates, I'm going to quickly show you a little bit about it. Oreca was nice enough to let me do some subliminal advertising. First of all, this is the way it comes, 2 types of packages, both easy to carry and remember it's compressed. It has easy carrying handles on the facility, it's very easy to maneuver. Also think that with the compression, it takes up little space in a facility and it also you can ship a lot more cases per truck. So that's some of the initial advantages. The dispenser is high capacity. It's a beautiful looking dispenser and has a very low profile, about 10 centimeters. When filling the dispenser, and I'll pretend it's not filled, you have these small packages which has a hook and loop design. So you could put the product in either way and it won't jam the dispenser. Just lift this up, push up and it's as easy as that. As far as loading, you just bring the product through such as that, put it down and like that it's loaded and ready to go. So you can see it's pretty easy and it's nice looking and it's efficient. 2 other features you can see by the side if it needs filled and there's also an indicator light as well. So this is our new blockbuster. And what's even more important, not only is it a good product and demonstration, but the growth has been phenomenal. We've exceeded our expectations. You can see since launching last year, we're up over 300%, very great trajectory. And as the customer said, we do have a game changer here. So I hope you can see the value in this system. I'm super excited about it as is our sales force. These are some of the initial successes we've had. Even though we've not had this in the market long, we've already won awards and we have many, many visible accounts in several segments, airports, sports, leisure, education and industry. So we're just getting started and many, many good opportunities ahead of us. And last but not least, we talked about professional hygiene and sustainability performance, well-being, Torque EasyCube certainly helps well-being. From a more from less, we have 2 products in particular, our cordless tissue and our interfolded napkin, which we've talked about for many, many years, was probably our last super big blockbuster and 25% guaranteed savings. The new thing that goes with circularity is our torque paper circle. Last year at the Amsterdam InnerClean show, I presented on behalf of our company, and one of the other presenters was the President of Commerce Bank, and he presented about the Torque Paper Circle just because of the value that it brought to his organization. And what it does is it allows the opportunity for our customers to actually put what was before washroom waste or use paper towels into a receptacle. We get it picked up, we take it back to our plants and I just visited our plant in Kostein, and we do a great job there, the team. And they've got a great visual for our customers to go through if they care to visit. They take the product, they make it back into usable product and send it back to the customer. So it's a totally circular operation. It really doesn't isn't a product, it's a solution that we solve, and we're getting great, great response from customers. We actually can't keep up with the demand on this. So it shows how sometimes innovation comes from products, but sometimes it comes from solutions and ideas. So I urge you please, the 4 things I spoke about are on display. If you haven't seen them yet, please make sure you do before you leave at the break. And the other thing is a 40% reduction in carbon footprint. So by doing this, not only do we help them with marketing material, but they can say that they've reduced their carbon footprint in this area by 40%. And there's not many ways that you can do that this easily. In conclusion, key takeaways. I hope you can see the strength of the global brand that we have. Our innovation and sustainability continue to be a core. We take sustainability into account when we look at all of our innovation. Strong go to market, a full e commerce approach and delivering profitable growth with opportunities both in mature and in emerging markets. And one thing I want to leave you with, not counting today, I'll bet you that all of you have something in common and that's that you've used the Toric product this week, whether you know it or not, I guarantee you, I mean, everybody in this room has probably used it. So please continue to do that. And please continue to support us. We have 50 years behind us, but in many ways, we have the best ahead of us. Thank you very much. Please stay. Thank you, Don. Super exciting, so much innovation and digital elements, not the least paper circle, which really support a circular society. And of course, I know you always have the customer in focus. So with this, Magnus, Ulurukska, please join on stage. And I'm told we should be a little bit closer to the light for the ones on the webcast. So who would like to start with the first question? No hands. Over there. It's in the right hand. Excellent. Oscar Lindstrom with Danske Bank. And this is to you, Ulrika, I believe. Within the Medical Solutions category, I mean, which segment do you find most interesting in terms of growth potential for Essity and why? I think all the segments have good growth potential. But of course, a segment like lymphology, for example, where there is also a very low penetration has other opportunities than the ones that are more highly penetrated. So it's smaller today, but has a big opportunity, thanks to that as well. But all of them have good growth opportunities. Then you could say fracture management as an example is today you can see a shift from fracture management into more orthopedic soft goods, for example, in mature markets. But on the other hand, you start you use more and more fracture management in D and E markets. So also there, there are growth opportunities. And following up on that, do you believe the growth is going to be primarily organic? Or would you need to do acquisitions in order to achieve that growth within these segments? I think we have very strong opportunities to grow organically. But then as Magnus said, the strategy is both to grow organically and through acquisitions. All right. Thank you. Next question, Margherita. John Ennis from Goldman. A couple for you, Don, actually. When you sell a dispenser, do you tend to lock in long term contracts with those customers? And if so, how long is the average duration of those contracts? And if possible, could you give us the sort of retention rate you see in your business? And then a sort of follow-up to that as well. You talked about placing 6,500,000 dispensers this year. Are they largely to new customers? Or is that really a function of your existing customers effectively upgrading their dispenser solutions? Thanks. For the most part, we lock in our customers for a 3 to 5 year period. And we look at definitive ROIs when we do that to make sure it's a win win. In many cases, we also use it as a way to capture data back as well too and insights from the customers. So that's it depends market to market, but on average, that's the range. When you look at the second part of your question, retention is always an issue. We have very strong potential. I can't give you the exact number, but it's always a number that we're looking at making even higher. But with our Dispenser Solutions, I know we're way above the competition. Your second question, if you could repeat it, please? Yes. Sorry. It was just you mentioned that you've placed 6,500,000 dispensers. I wanted to know, is that largely to existing customers that are upgrading their solution? Or is it to new customers that you The majority is not. It's usually new customers. There's sometimes that we'll do upgrading. If we have a usually, our it's not a fact that our dispensers wear out. They're made very, very strong. So we're usually not replacing because of that. Sometimes when we go through a next generation upgrade to help the appearance and even help our brand get out there, we will proactively upgrade, but the majority of them are new installations. Hi, thanks. Faham Bey, Credit Suisse. Two questions as well, one for each. Firstly, on Medical Solutions, when Magnus bought the business a couple of years back, he did say he's going to use this as a platform to enter adjacent Medical Solutions or Health Solution categories. Is there can you highlight any categories today that could potentially interest you? And secondly, to Don, you said you want to get North America back to growth. Are we in a position today where you feel the business is now sustainable when it comes to the businesses post the Warsaw acquisition? And apart from the innovations, which seemingly are fantastic, what other initiatives do you have? I will preempt the first question because actually I don't remember that statement. I said that Medical Solutions was a platform for growth in medical for sure, that we were happy with BSN actually because it was a step up for us when it comes to being more sophisticated than some of our other categories, but still something that we understand and feel have many similarities in many ways with our existing categories. So that was but the platform for growth, I would rather that we if the opportunity arises to grow through acquisitions that we grow in existing categories, particularly in wound care and in advanced wound care, but also in compression, as I mentioned earlier. So that's really where we're putting our focus. We don't want to get scattered into too many small categories and segments. So we will primarily be looking at existing segments within Medical. To answer your question on my business, I absolutely do feel that we're positioned for growth. The integration is behind us. We've done a couple of things. We've realigned our sales force. We've added to our end customer sales force. We've also realigned and changed some capabilities, rotated some personnel through. We've also augmented that from the side. I brought in a new Head of Marketing, a new Head of E Commerce with a lot of experience. The Head of Marketing, I actually brought in from Latin America, a lot of consumer experience, which because we compete also with consumer companies, it's really important that we have that look to help take us where I want us to go. And also, the Head of E Commerce brings a wealth of experience and has really helped catapult us very quickly into these areas. So those are 2 things that we didn't have before as well. We're also strengthening our sales operations and business development. So that was part of our go to market that was in parallel. So we had a lot of things going on at the same time. Now it's time to take a deep breath and really execute. So I do feel confident. Guillaume Delmas from Bank of America. My first question is for Don. You showed a slide that was indicating 1% to 2% category growth in North America and Europe for professional hygiene. I was surprised by this number. I think it would be more particularly given the premiumization opportunities and also what we're already seeing in the category. And secondly, by how much do you think you can outperform that category growth given your scale and technology advantage? And my second question is on the Medical Solutions incontinence categories. You talked about some structural pricing pressures. Should we conclude that mix is the new price in that particular channel? Or do you actually see some pockets where you would have strong pricing power? And becoming a one stop shop combining Medical Solutions and Inco, does it give you more pricing power? Thank you. So as far as the growth in Professional and Hygiene, historically, that's 1% to 2% has been pretty historic. That's the mature markets, that's pretty much what they grow. Now what we do feel is that we can grow a little faster than the market, and we can grow a lot faster than the market in our strategic products. On top of that, within my business unit, we have emerging areas. Eastern Europe is growing very fast, Russia is growing fast. I mentioned Turkey or Middle East and Africa. So those areas outside of my business unit, and I know Paolo will talk about it and probably Christophe as well, in the emerging markets, we can grow even faster than that. So if you put them all together, we'll definitely grow faster than the market. And to answer your question then on incontinence and medical, I would say, if we talk incontinence, yes and yes, in a sense that, yes, of course, it's a lot about improving mix. But on the other hand, we are implementing price increases and we'll continue to do I think to do so. I think the difference may be between consumer goods, for example, or consumer tissue is that it takes longer time since we have such a big part of the business tied up in long term contracts. And then with the pressure on the health care system, of course, that requires that we adapt to that. And we work with finding win win win solutions. So solutions that are good for health care, so we can provide be part of a solution to the lowest possible total cost of care, that solutions that are good for the patient, but also solutions, of course, that allows us to have sustainable business. And that is it's a lot about driving innovation in the right direction. And then there are some markets. When we talk about reimbursement changes, it's not in all places that it's going down in an amount of money per person. There are also markets that are actually expanding reimbursement. So there are some areas where it goes in that direction as well. Okay. I think there, Arghariata, in the end. Thanks very much. Just looking at that Strategic Products segment, could you talk a little bit about the contract design in there? So is it when a customer signs up for 3 to 5 years or whatever, do you agree that you revisit the price after a certain amount of time depending on what's happened to raw materials or whatever? And then secondly, thinking about away from home tissue more generally in bathrooms? Are you able to give us any sense of what the sort of per capita differentiation would be with emerging markets versus mature? Thanks. The first part of your question as far as the strategic products goes, it depends. We have several types of products in there. If the products are strategic products that are definitely hand in glove with the dispensing system, then we're more apt to have a longer agreement. Some of the strategic products are profitable and value add, but would be less dispenser driven. So in those cases, we would not have as long as an agreement. So the average time when you have the contractual support, it varies per market and per products, but it could be 1 year to 3 years depending on the situation, often with escalators that you could put in from a price perspective. So there's not one easy answer to that question. Per capita varies a lot. I've seen the per capita numbers, to be honest, I can't recite them off the top of my head. But in many emerging markets, it's less but growing. Do we have here? Yes. It's a question about North America for Inco and Medical Devices. Really, now that the restructuring has happened and the new leadership is in place, how should we assess whether that is a success for you, whether you're happy with progress there? Is it going to be an issue of market share? Is it going to be particular products that you want to see succeed? Or is it more about profitability within, say, 2 to 3 years that we should be focusing on? What we are aiming for is to get to growth on Medical Solutions in North America. So that would be the KPI to follow. Yes? Yes, because growth also I mean, margins are not the issue. It's actually growth. And we've been losing volume over the last year or 2. So I mean a rather important impact on the overall growth of this category. So if we return to growth and then get the additional benefit of scale there, I mean, that's the trick, just to support exactly what you said. And it's different. Now you asked on Medical Solutions. On incontinence products, it was different. So on incontinence products, it was a profitability issue to start with. So as I talked about there, we first needed to earn the right to grow by bringing up the profitability. And now it's a combination of growth and profitability, whereas on Medical Solutions, it's the growth we want to get at. So a final question before we take the break. Yes? Yes. Karl Johan Svancken. Maybe a follow-up on the Inco in the U. S. I mean, now you have a number 4 position and maybe 11% market share. So you're roughly where Professional Hygiene was before the Wausau acquisition. So is there any sort of benefit from scale in Inco in the U. S. That might motivate you to grow non organically in the U. S? Or is the sort of business structure fundamentally different from Professional Hygiene? What I mean to you? In health care, we seem to be growing fine and gaining market share in the last year or 2 organically. So really doing well. They're just winning tenders with a strong go to market and an improved product range and all the good things that we've been mentioning here. In retail, scale is a real issue because we're at or just below 6% market share in retail and we're just clinging onto the shelf as things are now in much better shape than 3 years ago when we were also losing a lot of money, which we're not anymore. And we have an assortment that is relevant and that keeps us on the shelf, but this is not sustainable. In order to really be stable in U. S. Retail, we need to double that share approximately to stay relevant. And we have plans for that over the next year or 2, but that's going to take a number of years. It's not anymore again a profitability issue that we're losing lots of money, but this is something we need to fix in the U. S. Okay. Right on time. Let's have a 20 minute break, and we meet again 10 to 3. Thank you. The breast towels have a breathable top layer, so you feel fresh, while the secure fit shape keeps you protected because we all need that extra help to go the distance. Stay home because of my sensitive bladder? Not a chance. I discovered TENNA LEVI Discrete. It's designed to be super thin with fast absorption and still protects you from leaks. So I get all the discretion I need while wearing whatever I want. Join the 1,900,000 British women who trust TENNA. It's a big game. Mess, empty dispensers could mean fans risk missing out on the action. Of course, this isn't news to you. But what might be is the launch of the new Tork Peak Serve Continuous Hand Tow System, the highest capacity hand towel system on the market. With Torq DeepServe, we're armed with 2 50% more towels that dispense fast, improving the washroom flow for any crowd. Because as you know, the less time they spend in the washroom, the more they can spend with your business. Business. With Torque Peak Serve, you can also refill twice as fast whenever it suits you, freeing up more time for you and your team, time to respond to the mess and those unpredictable challenges that come with big crowds, making your guests experience better overall. So whether it's the big game, morning rush at the airport or a sellout concert, bring on the people, bring on the crowds. For the discretion I want and the security I need. Need it. 2, plenty handy towels. 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And Volker Zeller is responsible for that in Europe, among lots of other things. And soon, you will meet Volker Zeller from Consumer Goods. So good afternoon. Before the break, we spoke about the B2B part of our business. Now it's time for business to consumer. My name is Volker Zoller. I'm 25 years almost 25 years with the company, had senior management positions in controlling, supply chain, logistics, sales and marketing, and since slightly more than 4 years now, the Business Unit President for Consumer Goods. Consumer Goods is roundabout onethree of the entire asset in net sale, the biggest business unit which we have. From a geographical scope, we have 86% of our business in Western Europe. We have 11% of our business in Eastern Europe. This includes Russia and the remaining 3% in Middle East and Africa. Categories perspective, 2 thirds of our business are in the consumer tissue category, while 1 third is in the personal care category and Baby is roundabout half of that. What do we consider as our strengths? We have a pretty strong market position. We are among the top 10 non food suppliers in every European retailer. Partly, we are even in number 1 and number 2 position here. This is super important because then we have also the negotiation power. We have a European footprint, European footprint in sales and marketing but also in the supply chain, important in the consolidating retailer landscape. We have a dual track strategy. That means we are committed to the branded business, but also the retail brand business. This gives us the possibility to use the economies of scale of our retail brand business in the brands, but also the innovation power of our branded business for our retailer brands. To preempt the question, the split in consumer goods is roughly 50% branded business and roughly 50% retailer brand business. This is different category by category, but for the business unit, it's roughly half half. We have a very good go to market program. I will talk about this a little bit later on. We have a rich innovation pipeline, which is really very much driven by consumer insights and has always sustainability in the focus. And we have strong presence in all channels that includes, and I will talk about this a little bit later on, also the e commerce, the online channel. Our categories, consumer tissue, you can see here, we are working with CEVA, Lotus, Kushel, Aided, Tempo, very, very strong brands, all having a number 1 and number 2 position, but we are working with regional local brands. What we have done in the last years, we have moved the positioning of these brands closer together. It allows us to work with the same innovation pipeline and also with the same communication assets. So we are creating scale behind that. Baby Care, LibreGrow, of course, our leading brand here. But I will also talk about Lotus Baby in France, our launch, which we did some 2 years ago. What you can see also on this slide, of course, historically, it's a lot about open divers and pan divers. But also, we heard a couple times today the word adjacent products. We have extended the assortment with wipes, with lotions, with washes using the strengths of our brands here. Ulrika talked about Inco, our TENA brand in the retail channel. I will come back to this a little bit later on. Feminine care, here actually we work with 4 different brands in Europe. But what you can see on the slide is the look and feel of the brands is very similar. And also here, we are creating synergies using the same innovation pipeline, using the same communication assets, and you will see some of them. Also here, you can see on the lower part, yes, it's about towels and liners. But also here, we have added tampons. We have been adding wipes. We have been adding a lot of other products using the strengths of our 4 brands here in Europe. Last but not least, 2% of our sales. On the right hand side, you see the Beauty Care category, where we have D Makeup as our brand in Europe here with number one positions in the German speaking countries and especially in France. Market shares, very strong position in Consumer Tissue Europe. We have a market share of 28%, relative market share to the number 2, more than 2%. So relatively or very healthy market share. You can see baby care, 14% market share. We have been taking the number 2 position from Kimberly Clark a couple of years ago. And year by year, we are basically expanding the gap to Kimberly Clark, who is the number 3 in Europe. Feminine Care, 10% market share in Europe. This is a little bit misleading figure because we are not present in every country in Europe. In the countries where we are active, our market share is significantly higher. And then inco in the retail channel, we have more than 50%, very, very strong market position. What is happening in the retail market? What are the trends in the retail market? Private labels are increasing. Retailers are supporting their own retailer brands in order to get more independent from fast moving consumer good players, but we see also brands growing here. And I think this is very much in favor of our dual track strategy. These are exactly the segments where we are active We get very often the question, what about disruptive brands? In tissue and baby, they are not playing any role. What you see is in the feminine category, a couple of distinctive propositions coming on the market. They are not taking significant share at the moment, but it's super important for us to keep the innovation potential in this category very high to find exactly these brands. From a channel perspective, e commerce and discount are the 2 fastest growing channels in Europe. E commerce, we are investing, and Robert was talking about this, a lot in recruitment. We are recruiting externally capabilities, talent, but we're also, at the same time, developing talent and capabilities within our own organization. And discount, we have a pretty strong presence here. We are one of the biggest suppliers to the in the retailer brand to discount us, but we have also an increasing share, I should say, a carefully increasing share with our brands here. Brands and discount is not without risk, as some of you might know. Another trend, we see buying alliances and buying groups with increasing strengths. So in the past, we have been negotiating locally, then we have been negotiating internationally some contracts. Today, we are negotiating with buying alliances, which represent multiple retailers cross border. And also, we have adjusted our organization in the last one and a half years, and we have now introduced so called international key account managers who have the mandate to negotiate with these buying alliances independent from the regional perspective. Another one, and we'll just see a couple of examples in my presentation, it's about digital marketing, digital consumer, life on demand. Our marketing mix has tremendously changed over the last years, and you will see, I think, a couple of nice examples. Last but not least, super important sustainability. Nothing in this slide. You should also see the announcement of this morning, which is a super exciting announcement that we are investing a significant amount of money in alternative fibers to serve exactly this purpose sustainability. It's more than plastics. I think it's a very, very hot topic in the discussion at the moment. And I think we have a very strong sustainability strategy here. And I think this is something which is a competitive advantage for us. Our category strategies, in a summary, I think no surprise, improved profitability in the light what has been happening in the last 18 to 20 months on the pulp market with energy prices, but also with logistics costs. It's about improving the profitability. We have offset with the price increases, a big part of the negative cost impacts of the last months here, but we are also committed to further margin improvements here. Within the portfolio, very clearly, the strategy is to grow our strong brands, while the retailer brands are more supposed to be relatively stable and not growing. But within retailer brands, we are trying to work with the mix. So we have a couple of retail brand contracts where we have very healthy and good margins. We have with others which have less good margins. And therefore, we will very much work with the mix. Maybe improved profitability also here, but the challenge is a completely different one because we have some, as Magnus said and the more Frederic said in the morning, we have some very, very healthy businesses and some businesses which really are under challenged. And this comes also here, the cure or kill into play. I mean, to avoid any misunderstanding, the focus is always on the cure part, and the kill is the last option. And what we have announced on Tuesday with Hildes was basically then the exit of a business because we had no recipe to win with our partner here. Feminine, we have very good innovation. We have very good communication assets. We have been outperforming the market now for many, many years. This is about growing the segment. Grow above the market, gain market share, this is what we are doing. We are very successful, and we will continue with that. What are our priorities for growth? As I said, we are focusing on high margin products, high margin segments. That means we want to grow with the brands faster than with the retailer brands, and we want to grow with the person care categories faster than with the T shirt category. But we also want to grow with tissue category. It's super important to bring innovation to work against the commoditization of our categories. And this innovation needs to be driven by consumer insights, but also have sustainability in mind. And you will see a couple of examples. Digital marketing, I will talk about that. I will talk about go to market excellence, what does it mean. Short term pricing focus is very important for us, of course. It's about consumer tissue, but not only about consumer tissue. Price mix in Europe in all categories at the moment is positive, which I think is a very good sign. And last but not least, it's about the execution of our efficiency programs. Donato talked about the tissue roadmap, but we have also the group wide cost saving program. And we have smaller initiatives like value engineering, material rationalization, which really help us to improve our margins here. This is our go to market program. It consists of 9 different blueprints, which we are continuously developing and upgrading. And basically, we have 2 very big advantages with this go to market program. I think this is really state of the art, not only versus our direct competition, but I would say in fast moving consumer goods. One advantage is we can serve every customer in every country with the same commercial approach. In a consolidating retailer landscape, this is a very, very big advantage. The second advantage which we have, we can roll out best practices in our own organization and increase effectiveness of our organization. Some examples of the 3 blueprints which are currently in rollout in Europe. Perfect Store initiative helped us to increase the distribution of our products in France and in Germany by 7% to 8%. Sales force effectiveness helped us that our field sales people in Germany can visit 30% more stores, but they are also visiting the right stores where they can really drive sales and purchase. And the last one is trade spend, also very important. We are very transparent in which retailers, in which channels we are investing, that we are investing in the right counter performance here, so to get the right return on investment in these categories. This is talking about innovation, Pretty cool example, one of our latest launches. It's a cordless, I could even say the first truly cordless toilet paper in Europe here. We have been launching this mid-twenty 18 in Germany and France. It's based on the inside never run out, so you have doubled the number of sheets on the roll. Nevertheless, it fits into every dispenser. We have a lot of countries where you have dispensers, so you cannot increase the diameter of the roll here. And also sustainability, of course, no core. You have less packaging. And of course, you have a much more effective transportation, which helps us. This helps us also to ask for a premium selling price. So the margin of this product is better. With the specification, it's super relevant for online purchase because you have a better utilization of the transport. The good news also, it's incremental. So it's not cannibalizing with the products which we have already on shelves. This is good news for the retailer. It's a high repurchasing rate, so the consumer likes the product. And very, very important for us, we are attracting loyal retail brand shoppers back to the branded category. So this is a very nice example. It's not only our view. You can see on the slide, this is in 2019 the product of the year in Germany and in France. Another example for insight driven innovation from the fem care category here. We have a lot of consumers who have worries about chemicals in the product, and we have launched this range in 2 countries in the Nordic countries last year the 2 other countries. This year, we are basically in the launch of this one. And this is a so called free from range, no allergens, no dyes, no fragrances. And when you believe in market research, Nielsen says this concept has an outstanding probability of success. So also a very, very nice innovation based on consumer insights. Capital Market Day 20 16, I was on stage and I talked about adjacencies, how can we stretch our strong brands into new territories. And one of the examples was the moist toilet paper here. Also based on an insight, onethree of the consumers are not feeling clean after the normal bathroom routine with dry toilet paper. We have been launching wherever we had strong brands, we have been launching moist toilet paper. This is an example now from France, L'Otus maybe, but we have also Tempo and Ceiba, others. We have been almost doubling market share in the last 2 years. Needless to say, this is margin enhancing this category. So we have higher margins than in our dry toilet paper. And you can also see here the growth 50% in 1 year, 20% in another year. Very nice innovation, which works very, very well. Staying in France, baby. Talked a lot about baby, especially financials. This is our baby launch in France, which we have done some 2 years ago. Where are we? We have roughly 6% market share at the moment. We have some periods where we're also above 6% market share. In strategic retailers, which have been supporting this launch from the beginning, we have even double digit market share, which I think is a great achievement after 2 years. And we have a very good distribution of these products. We have close to 80% weighted distribution, which, of course, is a request to be successful. The consumer liked the products very much. 96% of the consumers who use the product recommend the product. This is a super strong figure for all, not marketeers. And the repurchasing rate consequently is extremely high. What we have to manage now is to bring more consumers in touch with this product, and this is exactly what we are doing in 2019. We will relaunch the qualities, and I think there is a lot of confidence in the organization that we make Lotus Baby in France a success. Another example from the baby category, actually here from the Nordic countries. Somebody said today, mix is the new pricing. To a certain extent, yes. I think sometimes we are struggling to implement price increases, and then I think you can improve your margins working with mix. We have put a premium range, the so called Libero Touch range, on top of our Libero Standard range. It's a fantastic quality based again on an insight. The insight is I always want to have the best perfect fit for my baby. And I think it helped we could position this range 25% above the normal range. It's already close to onefour of our business in Nordics. And then with the mix, of course, you have very nice margin effects. Joseline was talking about Tempo. Tempo is our flagship brand in Germany and in Italy. We are peaking in market shares at the moment. In Germany, we have 30% market share. In Italy, we have close to 30% market share. This is extremely good. And also here, this is based on a super cool innovation pipeline on very good brands. Tembo at the moment is growing 3 times faster than the market, and we can justify with the quality and with the strength of the brand approximately 30% pricing premium. And also here, the last innovation which we have launched is the so called washing machine resistance. I think you're all consumers. You know this. You opened a washing machine, you forgot a handkerchief in one of your shirts and then everything is fluffy, not with Tempo. This is washing machine resistant. So basically, you keep the consistency of the product. No worries about that. What we are doing also is we are working a lot with designers at the moment. We make limited editions from these designers. And I mean, offtake is great, and I think this is a real success story. We talked about digital today a lot. Digital has really changed the marketing landscape. We get very often the question, how much money are you really spending on digital? The answer, of course, is different category by category and geography by geography because the digital consumer is the reality in some countries and maybe the future in some other countries. But in average, we are spending 25% of our advertising money on digital marketing today. So it's quite a significant part. And you can imagine, of course, you need also completely different skills to do that. This was a campaign we started already 2016, Blood Normal, and then we have evolved and developed this campaign. You can also see the power of social media here because we have launched this campaign in 5 countries, and then it's spread out to 32 countries, partly where we even do not have the brands present here, and it has a reach of 800,000,000 consumers. I mean, a great achievement. And I think also externally, the record lies, maybe the highlights we won in the Cannes Festival 2 Lions here. So I think we are really state of the art when it comes to digital marketing. And this is really to continue our journey with breaking taboos, with stimulating a dialogue about certain things where most probably our society has not been talking in the past, empowering women, etcetera. I think you know this very well. Another great example of a journey is this part here. This is the Baby Club, the Libero Baby Club in the Nordics, and it shows a little bit the dynamics of digitalization and what we are doing. The Libero Baby Club in Sweden was founded in the '80s as a postal club. So basically, we have been sending out by mail letters to young parents in order to advertise our products and offer some consultancy. Beginning of 2000s, Internet, we have changed to an e mail based club, makes communication more efficient. You can be faster. You can customize a little bit. A couple of years ago, we have changed to a platform, interactive, so suddenly two way communication. And now mobility, live on demand, since beginning of this year, we have basically the club in an app, which is very much appreciated by the consumers. By the way, this was when we launched the club, this was the number one download in Sweden in this week with more than 20,000 downloads on the 1st day. So I think it's really well accepted. Robert in his presentation was already talking about the next evolution step, which is a chatbot, which we are testing at the moment here. This is a super cool recruitment tool. We are in 1 to 1 communication with 80% of the new parents here in Sweden, our target group. And we collect a lot of data from them, the age of the baby, the size of the baby, the weight. So we can customize our product offer for them, but also the consultancy. So it's much more than a selling tool. I think the consultancy aspect is a very important one. And as a result of that, LIBORO market share in Sweden here peaking 63%. I think I cannot stop without talking at least a couple of words about e commerce. E commerce is round about 4% to 5% of our business. Last year, it was 4%. This year, it's closer to 5%. More than 80% of this business, we are doing with omnichannel retailers. So to the retailers, we are also doing normal shelf business. 18%, we are doing with the so called pure players who have only an online presence here. The business is in double digit growth. Quarter 1 this year, we are even growing a little bit faster. And I think what is also very important to know is the online shopper ticks differently than the one who buys in the store. So we also had to customize our offer with products, with subscription models, etcetera, etcetera, to the needs of an online shopper. What are the key takeaways from the presentation? We will continue our focus on the high margin products. So we will see also in the coming years a lot of portfolio changes within consumer goods. We have made significant progress. We also had a pressure from the cost side, of course, with our price increases and more to come in 2019. Very important very important part, meanwhile, of our marketing mix. And I think we prepare for the future with go to market, with sustainability, but also with a lot of innovation. I will not stop without a short fun fact here. I talked so much about strong brands. When do you think you really reached the status of a strong brand? When others are trying to copy you. This is from a German museum. This is a collection of 100 more than 130 fake copies of our Tempo brand. You can find everything from Tango to Trump is also here. So a lot of fake copies, no further comments here. But believe me one thing, there is only one original Tempo, and this is from Essity. Thank you very much. Thank you, Volker. And again, a tempo is always a tempo. I learned when I went to Germany, you don't ask for a hanky or handkerchief, you ask for a temple. And Falko, I have to say, I'm impressed how you have balanced the price increases and cost focus, at the same time driving innovation and customer and consumer focus. Volker was also talking about breaking taboos. That is very important because taboos and poor hygiene and health is a huge barrier for people's well-being all around the world. In Mexico, for example, 9 out of 10 girls and women are being abused because of taboos and poor knowledge. And also, many women and girls are being harassed at schools, in public places, at home and in different opinions different occasions. This is not okay. And together with UNICEF, our leading brand, Saba and Essity, we have partnered with UNICEF to really try to drive a change, to empower these girls and women and to have better well-being. Pablo Fuentes from our great business unit in Latin America will talk about this and everything else he is doing for this business unit. Pablo Fuentes? Hi, I'm Pablo Fuentes. A little bit about myself. I have been in SET for more than 13 years and working in the FMCG industry close to 25 years in finance, commercial, operations and general management roles. When it comes to Latin America, it's 12% of the sales of the company. And as you can see, we manage all SET categories within our business units, and we are present in most countries in Latin America. Actually, Mexico and Colombia are the 7th and 8th most important countries for the company worldwide. We are present in Mexico, Central America, Brazil and Chile through SCT. And the rest of South America, we manage most of it through a joint venture, it's called Familia. And we have you will see through the presentation that we have outstanding brand equities across the region. Actually, a good example, and we were just talking about it yesterday, few weeks ago in the newspaper in Colombia in the front page, Ipsos, you know Ipsos, they did a survey of the most important companies in Colombia. And Familia, our company, our brand, was recognized as the number one in terms of awareness among all the companies, all the industries in the whole country. So that speaks for the kind of equities we have in Latin America. We have a high speed to market. We normally are faster than the market to bring relevant innovations to the market. And we have strong go to market capabilities. We have excellent execution in the point of sales, and we listen actively to our consumers and are able to bring relevant innovations to the market. We have a good mix of global innovations, but sometimes we also do local innovations that are more specific, more relevant to emerging markets. We have a broad range of products, as you can see from this slide, in all the categories. In some cases, like in Consumer Tissue, Baby Care or Feminine Care, we have local brand names, as you can see. But we always align with the global technological platforms and brand positions so that we can leverage our global scale while staying relevant locally. The hygiene market is worth $12,000,000,000 the hygiene and health market, and it's split evenly between modern trade and traditional trade. It's mostly a branded market, around 90% of it. Latin American consumers are very emotionally connected and loyal to brands. We have a changing retail landscape, especially emergence of smaller format stores like discounters, convenience stores, drug stores, but also web platforms like and others that are growing very rapidly. Typically, our categories are underdeveloped in terms of consumption per capita. But with the emergence of middle class, the expectation is that the consumption per capita will continue to grow in the future. We are number 1 in Feminine Care, Incontinence and Medical Solution. And in the case of Consumer Tissue, Professional Hygiene and Baby, where we are, in the countries where we are, in the segments where we are, we are quite relevant and strong. Some examples of our market share in Feminine Care with Enosotras brand. We have 65% share in Colombia and in Mexico with Saba, 50% share. In incontinence, in Colombia, we have more than 85% market share. We are number 1 in most of the countries in Latin America or number 2 in a few others. Medical solution, we are number 1 in a highly unconsolidated and high growth market. Consumer Tissue, we have the number one brand in Mexico with Reggio and the number one brand in Colombia and Ecuador with Familia. And Professional Hygiene with Torque, we are very relevant, especially in the differentiated strategic segments. And in Baby Care, we have very strong positions in Colombia and Ecuador. Our priorities. We are very well positioned with our brands, with our innovations to outperform in fast growing markets. We have been growing at a very good level on a very high pace in medical, and we want to sustain this high growth to reach scale. We are transforming ourselves in digital marketing and e commerce to continue leading in our digital transformation. We want to leverage our go to market and innovation. And together with my friend Donato, we see manufacturing as a competitive advantage. We have been investing in technology to differentiate our products and also we have strong focus on cost reduction. In terms of our strategies in Consumer Tissue, as I said, we want to continue growing in a profitable way, leveraging our very strong branded positions. In professional hygienic, about boosting sales with Torque brand. And in personal care, we want to leverage our number one position in Inco to continue developing the category in terms of penetration, distribution and consumption per capita. In Medical Solutions, it's all about growth. As you said, Magnus, we already have good margins. It's about growing and scaling the business. In Baby Care, it's a selective approach, and we want to improve profitability where we are. And in Fem Care, it's about fueling growth. As I have told you, we have very strong brand equities in fem care, and we are moving from menstrual hygiene into daily intimate care, which is a more much bigger category, much bigger market where we have the right to win. In terms of our go to market excellence model, same as in Volker, we have very strong collaboration and cooperation with our customers, and we have several joint business plans with B2B and B2C customers. We were awarded the number one supplier from Walmart among all non food suppliers, and we have many other awards in B2B and B2C. We also have a key account management approach by channel. As you know, in emerging markets, there are very different types of channels. So we adapt our products, promotions, sales force structure, service level logistics, depending on the specific needs of each of these very different channels. We also, through our strong brand equities, are able to increase prices as we get cost increases, for example, in raw materials and energy. We are really proud, and I presented to you also some progress in the last Capital Market Day about our Feminine Care success story in Mexico. 10 years ago, we were the number 3 brand. And today, you can see we are the number one brand with 50% market share. You can see also on the bullet points the great recipe that we followed in terms of consistency, in communication, in brand building, in innovation and in execution. When we started this journey, we had a really great advertisement with a very catchy challenge to our consumers, and it was give Saba just one of your days. And this became actually quite well known in Mexico. And then as we were being very successful and we were migrating from menstrual hygiene to daily intimate care, today, our positive challenge is no longer GIVSADA one of your days. It's GIVSADA all of your days, and it's working very well, of course. Some of our cool innovations, we are launching panties to address the nighttime segment. As you saw in the advertisement, we are launching a 2 in 1 daily intimate liner. We are also upgrading our daily intimate washes around our strategy. So many different types of innovations and news to consumers. We are also very proud, and Josephine, you talked about this, of our sustainability and social efforts. Through our Feminine Care category, we have reached 70,000,000 young girls and adolescents through different programs. We signed an agreement with UNICEF to engage in a dialogue against violence among adolescents. We launched an anti bullying campaign that became viral actually in South America, and we reached 60,000,000 girls and adolescents. And you should see it when you go online. It's a very, very good campaign. And going school by school, educating young girls and adolescents about menstrual and intimate hygiene, we have cumulated in the last 3 years 1,100,000 schoolgirls. Don, you talked about professional hygiene and together with your support, we have built this business in a very rapid way in the last years. And as you can see, and this happens in most categories in emerging markets and in Latin America, when you have low income per capita, you have low consumption per capita. But of course, as income per capita grows, as middle class grows, the expectation is that the categories will continue to grow. We started in Brazil the torque journey 2 years ago. You mentioned this, Magnus, and we have been very successful so far in Brazil with torque. Consumer tissue, our priority is to continue growing in the middle tier and also up tier our consumers to more premium assortment. There are also some underdeveloped high growth, high profit segments like household towel and moist toipa, where we are focusing to grow through our strong brands. We are investing in technology. This is a great technology that we can use less fibers and at the same time, give consumers softer products. We are just starting this great new machine in Mexico to produce more premium products at a lower cost. We are addressing also underperforming parts of our business through our Cure or Kill program. And one example is in Chile, where we restructured our asset base, our portfolio to be more profitable. And of course, we continue in this category to be very focused on cost reduction and efficiency. In Baby, we are disrupting the market. We know from other countries in Asia, in Europe that pants for Baby is a better product for consumers and is more profitable. Today, most of the market in Latin America is open diapers, and we want to change that. So we have very aggressively introduced our pants into Colombia and Ecuador. We are also upgrading our open diaper platform to offer, again, a dual benefit for consumers, a thinner, better product for us, a more profitable solution. We are also changing our communication, talking more to millennials through digital media. And also in this category, we have strong focus on efficiency. We have been talking about our journey in incontinence in Brazil. And you may remember in 2011, we acquired a small local company. And today, we have grown to become number 2 player with 20% market share. We did this by leveraging our global regional expertise with TENA. We changed the brand, the assortment, the technology. We invested in local production, and we have grown in a very successful way. It is a market that still has many opportunities in terms of distribution to 80,000 drugstores, in terms of penetration consumption per capita, especially on the light ink, one pan segments. Medical solution is also a growth opportunity. We want to roll out all the global products that Ulrica presented, expand geographically in Latin America, increasing our presence in all the medical, specialized stores and hospitals. And also, we are doing some great cross selling opportunities. There are certain products in medical that are quite as Enrique explained, that are quite relevant and useful for retail. And we have so good and strong presence in retail that we are bringing those products with our retail sales force and expertise. At the same time, INCO, which is typically a retail product for us, we are bringing into the institutional segments through the medical expertise. So good opportunities also in the cross selling side. Digital, while it's still small in Latin America, I don't know if you knew about this, but there are 451,000,000 digitally enabled consumers in Latin America. And we already have the presence of Amazon and PayPal, for example. So the conditions are set for high growth. And of course, we have been working very actively with our existing customers to start and lead in e commerce. We created one of the first joint business plans with Walmart that only has digital sales and KPIs. We have developed our own DTC platforms with TENA in a few countries. And it's not only about engaging with consumers in our platform, it's also about doing web shops and subscriptions. And so far, so good actually. We also shifted our A and P from offline to online gradually. And last year, we reached 106,000,000 consumers through our digital marketing campaigns in Latin America. We also launched a startup accelerator program. And today, we engage with 20 startups in Latin America. There are many, many startups and entrepreneurs in Latin America. And actually, one of these startups has already launched a product that you can see on the picture. It's a platform that connects elderly population with caregivers. So in a way, it's an Uber for caregivers. And this is very relevant in emerging markets where you don't have the physical infrastructure for this kind of matching and services. So technology is compensating for the lack of infrastructure with this platform. Hopefully, you can also see it online. It's called Kermi. So in a nutshell, we are very well positioned in Latin America through our strong brands in attractive markets that are growing. We are leveraging our innovations to continue growing, and we are well positioned to win. Thank you very much. Thank you, Pablo. I want to highlight actually that what you've done for the brand Saaba with your innovation and the marketing has been like a role model for the whole Essity Group. And your digital initiative will be interesting to follow. Personally, I am passionate about the UNICEF Corporation. And I know that together with UNICEF, Pablo and his team also try to educate young boys because if you want to have a change here, you need to start there. So thank you for this. Now actually, it's time for the Q and A. So Pablo and Volker and Magnus join me on stage. And why the team is entering? Who wants to start with the first question? It's here again. Thanks, guys. Faham Bey, Credit Suisse. Two questions, please. Firstly, on pants. I guess that goes for baby and adult as well. There's a lot of talk about pants and the high growth and the high margin opportunity there is in the category. Could you give us a sense of size? So what proportion of sales is pants now? How does that compare to the market index? And some growth rates would be fantastic. And one separate question. Longer term, recycled diapers seems to be coming up a lot and hearing a lot about it. What threat or benefit do you see from those going forward? Yes. Sorry, I missed your last question. The first question, because we just looked at it the other day, which was the pant diapers, it's quite varying. So you have very advanced markets like Sweden, for instance, where almost more than half is pant diapers, while in many markets now, pants are reaching 30%, which seems to be some kind of natural saturation point in many places. So between 10% to 30%, I would say, is where it's heading in many markets. That's kind of an average that I would give you. While in Latin America, for instance, we start from 0 more, it's 1%. So it's a huge opportunity for a first mover advantage there. I don't know if you want to add something. No. Well, it's fair to say that the growth happens in the pan segment, while the open segment is more or less flat. And I think this is also why we are focusing a lot of our innovation and activation on the pant segment. And then it was recycled diapers. Recycled diapers, yes, that's a big theme and there are numerous initiatives ongoing. We are in an initiative that I think Luka mentioned covering both Baby and Inco and maybe you want say something about it. This is a project we are doing with a Dutch retailer. I think we can we are allowed to name also the retailer as Coitart, which is one of our strategic retail brand customers. And this is really a pilot project where we are recycling, we are collecting baby diapers. It's a pilot project to be very clear. But it's also about testing and developing the technology. It's not so easy to separate a diaper in the different parts here. But I think we are both committed, the retailer and us plus there is a third party, of course, involved in that. And I think we have to find a solution to waste. And this seems to be, from a technology perspective, something you really can develop with a lot of potential. So this is a project which is ongoing. We have also Inco, where we can collect from elderly homes, for example, INCO products, and they are also part of this project. Yes, Guillaume? It's Guillaume from Bank of America Merrill Lynch. Two questions for me. The first one is on Baby Diaper in Europe. I thought the slide you showed about personalization and the use of digital in Sweden was particularly interesting. I mean, it looks like an absolute game changer for the next decade. Now my question on this is how scalable is this initiative? And do you have to be an ultra dominant player like STT in Sweden to actually get that to work? And in other words, in countries where you are a distant number 2 to Procter and Gamble, I mean, does it need to create a gap that's going to be very difficult to bridge because they're going to be the leader in terms of data collection? And my second question on Latin America, I mean, we've been hearing for quite some time now the disruption coming from local small players. How are you finding your life in LatAm? Are players like CMPC disrupting the market and making your life more difficult? Thank you. Eric, I can start. I mean, first of all, you don't need to be an ultra dominant player, but you need scale behind that. And then the question is, how do you get the data in order to recruit consumers, new parents on my platform here? And then, of course, the strong market share helps, and the market share here, of course, helps us very much. The question is more how can I get this data in order to attract that? And I think there are many, many, many possibilities where, for example, a pilot actually for France at the moment with a company which is working in a completely different area. They are more into baby equipment, pumps and stuff like that. And basically, you pump this you buy this equipment before the baby arrives here. And I mean, we are cooperating in terms of data to acquire data from them in order to recruit potential new consumers. So the challenge is more to recruit basically consumers and bring them on our platform. I don't think a super dominant or whatever strong market share is a precondition. It helps, and you need definitely scale. So with Volker, it's promising to launch a baby club soon in France. We have scale in I mean, yes, for France is, of course, something we want to do that we have the technical solution. So it's more a question of translation and getting scale. And now with a 6%, 7% market share, it's more than worth thinking about that. Thank you. To your second question, you're right. Local competitors are very active in Latin America. And the way we deal with this is speed to market. For us, it's very important to maintain a very high speed to market and also our cost position. And this is why I mentioned in my presentation, for us and this is why we have a business unit for Latin America, we have a very focused approach on maintaining this advantage on being global, but at the same time acting locally with high speed to market and with the right cost structure. Okay. Next question. Yes, John. John Anderson from Goldman. And I had a question just on the sort of structure of your business unit. So I wondered why is it strategic to have Latin America separate from Professional Hygiene the consumer goods business units. So I guess what's the rationale for that setup? And then how do you best share best practices between those business units? Because there's obviously a great deal of overlap. I believe that's you Pablo. We were just saying it's for you, Magnus. I can take it. Yes. As we were talking, we have a focused approach on emerging markets where because of the nature and the under development of our categories, it's very important to move quickly, to grow in a fast way. So we have decided as a company to keep a focused approach on an important emerging market region for all categories. And in Inco, for instance, there is no health care or B2B sector yet. There is in Brazil to some extent, but not in any of the other countries. So it's actually all retail. And in the same way, even though Torque Professional Hygiene is business to business, it's underdeveloped. And you're so used, Pablo, to working in all the different channels in this very complicated landscape that it's much more efficient for you to also work with Torq than using all the solutions and all the knowledge from the global operations to move quickly forward in each separate country. But I was over in Costa Rica some time ago and I met a fantastic sales guy, Luis. He had just signed up from Pepsi, I think, and had a history from McKinsey. And he was so successful. In 2 years, he had just grown the torque business like this. And I asked him, so what are you doing? And he said with his background. So I found all this fantastic material on how to sell torque, looking at websites, looking at the processes, the solutions, the tools and so on. And then I applied them all rigorously in the market and sales took off. So it's also a story I'm telling internally a lot when I'm out and about that we have the solutions. We can make it work when we really scale and use those benefits locally. Any more questions? Yes, in the end. Could you speak tell a little bit about the current pricing environment in Consumer Tissue in Europe? Obviously, over the last few quarters, you have had a good pricing momentum to recoup some of the steep pulp price increases that we have seen. Has the sort of fall back a bit in the pulp price? Has that put a stop to the momentum or I mean, first of all, I think what happened in the last 2 years, you could even say mid of 2017, we have never seen before. And as I said earlier, I'm 25 years in the business. Basically, we started what we call a step number 1 of price increases. And when the price increases were implemented, basically, we already could go for the next wave of price increases. We have a couple of customers in Europe where we had 5 price increases within the calendar year or within 15 to 16 months. So I think this is a third momentum here. What we call a step number 2, wave number 2 of price increases, we have defined is everything what we are going until mid of this year. As we said earlier in the quarter one report, a big part of the price increases you see already in the quarter one, some more to come in quarter 2. And then we really have to carefully evaluate what is the situation in mid of the year. Is there still pricing momentum here at the moment? But we are still increasing prices currently. So here we have Monica in the front. Just a question on LATAM specifically. How do you manage your opportunity to get top line growth and momentum and gain share with your margin and profitability targets? As I understand, EMs would, as you've highlighted, seen a lot of local competition. So you probably have to be aggressive on A and P, innovations. There's a lot of costs involved. So how do you marry the 2? Yes, that's a very good question actually. And it varies category by category. As I explained, in the case of baby, for example, we have a selective approach and a clear priority is to improve profitability. In other categories like feminine care, it's all growth and expanding the market where we play. So we balance it category by category. And of course, as Frederic explained, we all have targets on growth and on profitability. So we need to always have this delicate balancing act of growing in a high growth market, but not forgetting about the margins, of course. Good. Any last questions? Okay. Final questions here, Kari. Yes. Thank you. Started thinking about use of social media channels in marketing because now a lot of your products are related to changes in either you get pregnant or you start to mention it so that how opportunistically are you using the new social media platforms to capture those customers when they start to do Google searches when their sort of social media use patterns show that they are prone to start using some of these products? I can take it. I wouldn't say that social media is opportunistic. Think in Feminine Care, of course, you have a couple of times in your life, the probability to change a brand is higher than in other times. And of course, baby diapers is also clear. But I think we have a very clear strategy when we are recruiting, how we are recruiting. And I think the key challenge is also how to keep them basically loyal to our brands and so on. So I think there is a thorough strategy behind that, which we are also testing in certain markets and so on. So I don't think this is an opportunistic approach, but we are there is a lot of thinking behind that. You mentioned that sorry, this Feminine Care strategy or campaign that you launched in 5 countries and then it spread virally to 32 countries. So do these new tools make it easier to enter new markets, new geographies? I mean, this is opportunity and sometimes also challenge at the same time. The costs for go to market have never been as low as they are at the moment, and this is why these disruptive brands play in certain categories, as I said earlier, not really in our business at the moment, but in other categories. They already play a role. I mean, basically, it's a chance for us because we have a very good digital activation. We have differentiating product offer to go into new countries with especially feminine, but to a certain extent also incontinence. But of course, it's also in the parts where we have strong positions is something to watch out for us where we have to defend. But you are right, it offers for us, I think, more opportunities than risks. Okay. Thank you, Volker. Thank you, Pablo. Thank you, Magnus. So now it's time for our last presentation before Magnus will make his conclusion remarks. And it's our subsidiary Vinda, which is a leading hygiene company in China and the number 1 in tissue. And Vinda is also our partner in Asia and, of course, in China. And I'm so happy to have the Founder and Chairman, Mr. Liqiang Wang here, who is a fantastic entrepreneur and businessman, and I've heard you are a star in your country. And besides Mr. Lu, we have Ms. Vicky Tan, who is the CFO. And Vicky, you will also translate for Mr. Li. Just translate that he's a star in his country. And that he is a great entrepreneur and businessman. And then the third person is our great colleague, Mr. Christoph Michalski, who is the CEO of Vinda. So the stage is yours. Thank you. Dear Mr. Groff, SFOs and Investors, good afternoon. I'm Lichao Wang, Chairman and Director of Vinda. And I'm also the Founder of Vinda. It's my pleasure to participate in SRT's Capital Some of you may know Wyndham very well and some may not. Vinda is SRT's largest strategic partner in Asia. The relationship between Vinda and SRT can be traced back to 2,007 over the past 11 years. The innovative and unique collaboration between Vinda and Siti allowed the 2 companies to enjoy complementary advantages. 3 years ago, I was here to share Wyndham's story and evolution. Wyndham continues its strong growth momentum with strong presence in Asia's hygiene market in terms of market share. Today, Christophe, our CEO and I will walk you through the way winter has come so far, how we are doing and our plan for the future and our business opportunities in Asia. Winder was founded in 1985. Winder was once a very small factory in a small town. With our commitment to quality excellence in sales execution and innovation, Vindar has earned high recognition from consumers, business partners and investors and we got listed in Hong Kong Stock Exchange in 2007. When the market had another notable milestone in 2016, we integrate SCA's business in Southeast Asia, Taiwan and South Korea, then became an Asia Hygiene company with 14 advanced production base and over 10,000 employees. Vinda scales up from a tissue focus only company to a full fledged hygiene company focused on tissue, incontinence care, feminine care and business care. Today, we manage not only the Vinda brand, but also other 9 key hygiene brands, including Tempo, Talk, Tanner and Lipress. We have business presence in over 10 countries. Winder is not complacent about accomplishments. We excel in innovation and give full play to the advantage of a leading industry player. Leveraging our competitive edge, this result in strong growth in our business over the past few years. In 2018, our revenue increased to HKD14.9 billion representing a CAGR of 21.3% since listed. We have also achieved 13.4% of organic sales growth in the Q1 of 2019. I set Upwinda with a very simple intention. That is to provide high quality tissue product for every household in China. Our mission to provide high quality hygiene products and service never changed. Today, we aspire to build a broader blueprint from 1,300,000,000 to 2,000,000,000 of target consumers across Asia. We are making strides towards our vision of to become Asia's first choice for hygiene products and services. We invest focused not only on branding, but also to be a risk at worst and sustainable growth company. We always adhere to our core principle of sustainability, innovation, professionalism and integrity. That's why Vinda has remained trustworthy and has been able to go so far despite the intense competition. Here, I want to give you a bit history about Vinda. In the past 30 years, Vinda has been highly regarded in many aspects. In the first stage, Wyndham started from scratch and then attained economics of scale. Windho was the 1st Chinese tissue company to adopt a branding strategy and international manufacturing standard. Winder was also the 1st China Tissue Company to use 100% virgin pulp for raw material. In fact, 34 years ago, no one in China has ever thought about the need to brand a pack of tissue. Yet, I upheld my belief that only a brand can strive success in long run. Over 30 years, Wyndham brand has become widely recognized on the back of our commitment in quality. We are now the number one tissue player in China in terms of market share. In the second phase, Vinda focused on improving its organizational structure and building up the talent pool. We introduced the cutting edge manufacturing facilities into our operation and carry out standardized management for quality assurance. Windho was the 1st China tissue company to be equipped with a fully automatic warehouse. The surface for Winda is internationalization. Vinda became a listed company in Hong Kong in 2007. In terms of business development in 2014, WinDa integrated SCA's Hygiene business in Mainland China, Hong Kong and Macau. And in 2016, WinDa integrated SCA's business in Southeast Asia, Taiwan and South Korea, which opened to new opportunity with foothold extended to an Asian market. In 2018, our TENS factory has been put into operation in Yangjiang, which located in the coastal city in South China, marking an important move to support our growing demand in China and also export to Southeast Asia. We believe in collaboration rather than go it alone. Vinda needs support from its business partner. SAA became our strategic shareholder before Vinda went public. Since 2013, SDA became the majority shareholder of EsaT. This also reflects EsaT's confidence in Vinda's capability. Vinda and Essity share the same vision on brand management, product quality, care for community, corporate governance and sustainability. The 2 company has formed mutual trust. Our collaboration with Assertib presents a huge opportunity for internationalization of our business. The complementary collaboration allow us to maximize synergy so far to realize a win win situation. While Vinda maintain its status as an independent company, this brings great advantage to Vinda. For example, as a listed company, corporate governance and transparency can be enhanced, which gives stakeholders like suppliers and customers greater confidence and also unable to attract best talents. Also, Vindra can tap the capital market to fund its business development. Of course, a listed company is abided by listing rule. Even 2 companies are under the same roof, we are obliged to maintain independence and confidentiality during day to day communication and follow the established procedures. The innovative and unique model of collaboration between Vinda and EsaT allows us to share resources and complement each other with their respective advantages. Vinda not only has attained the exclusive license for Exertis Global Brands that encompasses the right to develop produce and retail the products, but also has access to ATSETI's rich experience in managing global brands, which enhance our competitiveness in China's hygiene market as well as engage with consumers in China and other Asia countries. Winda also gets support from FFT in R and D. None of our competitors can get such R and D support as Vinda does. The Innovation Center Asia fully backed by SIT was established in 2016 in China. This center continues to provide technical support for Vinda and offer the most innovative products across China and Asia, driving Vinda's continuous growth. Vindus standout among its competitor by adopting the unique model of Sino foreign cooperation. This cooperation with Exity will definitely help vendors scale new heights in the coming decade. This if you look at this slide, the picture on the left bottom is the the one in the middle was me 30 years ago. How much change you can tell from this picture? Last month, more than 800 top players in the tissue and disposal hygiene industry in China attended 26th International Disposal Paper Conference organized by the China National Household Paper Industry Association. This association was established in 1993. Over the past 20 years, China Tissue Company shared their knowledge and information through this platform, promoting the development of tissue industry. Actually, the first annual meeting of the China Tissue Industry was initial and hosted by Vinda in 1994. And at that time, 163 companies participate in it. We also organized a series of seminars focusing on technology exchange for local and overseas company and received very positive feedback. Now the conference is entering its 26th anniversary since then and the China Tissue Industry is heading towards a more healthy business environment with more diversification and innovation. As the leader one of the leader in the industry, Vinda was honored to contribute to the rapid development of the China tissue industry. We are also looking forward to seeing a more mature and influential China household paper industry. There's huge opportunity in China's hygiene market. The size of the country's tissue market reached renminbi78 1,000,000,000 in 2013 and further expand to renminbi 116,000,000,000 in 2018. The tissue per capital consumption in China has risen from 4.8 kilograms 5 years ago to 6.4 kilograms. Although the tissue per capita consumption in the country is above global average, there's still huge room for growth compared to developed countries such as Europe and the U. S. To get those great opportunity for China Tissue Industry. The concept of loosey waters and lush mountains are the most valuable assets put forward by the Chinese government in the case that sustainable development is critical for China's society in the long run. Some outdated production capacity failed to comply with the latest environmental regulation have been phased out by the Chinese government. The paper industry is undergoing consolidation, bringing huge opportunities to companies such as Vinda that adheres closely to sustainable models. Over the last few years, we see higher consolidation in China's tissue market. Number of manufacturer has decreased from 430 to 230 from 2013 to 2018. Chinese consumers are paying more attention to quality lifestyle and crave to quality products, increasing household disposal income, result from urbanization and consumers' quest for quality hygiene products from an ideal context for hygiene business. The aging population will also stimulate the demand for quality hygiene products. The hygiene industry in China holds a bright future in the longer run. As I just mentioned, the consolidation is still going on. We see that the manufacturer with over 50,000 tons capacity now has reduced to around 60 manufacturer only. By 2020, aging population is estimated to account for 17.8 percent of the total Chinese population. But up to now, there's no dominant player in the Chinese incontinence market. We have high confidence in incontinence market, and therefore, we introduced the best incontinence brand from Europe to Chinese consumers. In the Q1 of 2019, our incontinence business in China records double digit organic growth. And feminine care will be another focus for winter this year. We are fortunate enough to have a wide range of prestigious global brands together with fun and extensive sales channel. These two categories will become our engine for future growth. A well established sales network is another key success factor for consumer companies. Distributor channel was the first type of channel that Wyndham developed in early years. We expect an open and transparent system to maintain healthy relationship with our distributors. Vinda keeps pace with the changes in sales channel from time to time. We have been expanding our key account channel since 2010 and establish long term partnership with hypermarkets with nationwide operations such as Walmart, Careful, China Resource, Swankar and Wason's. Today, distributors and key account channels contribute nearly 60% of our revenue. When it comes to e commerce, Wyndham noticed the trend 8 years ago and took the first step to keep ahead of peers by forming an e commerce team. We enjoy 1st mover advantage. We keep up the momentum for high growth in our e commerce sales by adopting creative live show campaigns. Now Windup is one of the leading FMCG companies on all major e commerce platforms in China. In 2018, revenue from e commerce accounted for more than 25% of our total revenue. Moreover, Vinda is expanding its business to away from home segment, our main customer, including star rated hotels and chain restaurants. The joint efforts of Vinda Professional and Talk has been enlarging its shares. An efficient supply chain is indispensable for Windows development. We continuously focus on innovation and advancing our technology. In the 1990s, Windows was the first Chinese manufacturer using Japanese machine. We also established a 1st class production based core Winda tissue paper city in China during that time. In 2012, we introduced the new generation Italian machine and automatic warehouse, which have significantly improved the production quality and efficiency. Tissue is our core business. We operate 10 advanced tissue production base in 9 cities across China and adopt internationally managed standard in factory management. The desired annual tissue capacity will reach 1,250,000 tons by the end of this year. Year of Excellence, Year of Personal Care is the theme we initiated in the Windows Top 100 Management Meeting this year. We must step up efforts to develop our Personal Care business, especially those of incontinence and feminine care, while also keep developing tissue business. Our goal is to add impounders to the personal care business by expanding local production. Notably, we will launch feminine care products in the Chinese market later relaunch the feminine care products in the Chinese market later this year. We also have 2 production base in Malaysia and Taiwan. All these factories will be instrumental to Vinda's development into a leading hygiene company in Asia. Today, Vinda has scaled the heights in sales, production capacity, scale and brand awareness. I believe Vinda will have an even brighter future. Now I would like to give the floor to our CEO, Christophe. Christophe will give more colors on Windows business and its future prospects. Thank you. Thank you, Mr. Li. Thank you, Vicki. Thank you, Mr. Li. In the interest of time, I will focus my presentation only on 3 subjects. The first one is to give some color what it means to grow by 10% a year and the challenge that those things are bringing. The second one, I will talk about digital and the e commerce side. And the third one, I will talk a little bit about our effort on sustainability as a Chinese company. So you will find basically more slides in the presentation, which is, I think, available, but I only focus on those things. So here you see since listing, Vinda has grown by 21.3%. And if you grow by 21.3%, that's great when you're small because it's feasible. This quarter, we have grown by 13.7%. And if you extrapolate that on a year, it basically means with 1,200,000 tons of tissue, you have to build a factory every year. And in 3 years, we need to build 2 factories a year. And that is a huge challenge. It's a challenge from a manufacturing perspective to integrate new facilities. It's also a challenge to get your suppliers aligned. And the only reason why Vinda is able to do that is because we modelized our factories. So when we go out and buy ground, we buy grounds for 500,000 tonnes and start to build for 120,000 tonnes. And as the time goes by, we will add the same type of capacity. Mr. Lee talked about the innovation capabilities of Vinda, and they are by far not just because of consumer products or branding or promotion and things like that. It is also we have developed systems where basically buy 2, 30,000 tons machine. We put them side by side. It's only one team running them. So it's like having the personnel for a 60,000 ton machine, but you have basically 2 side by side. And this allows us with this technology to train people in one factory and then basically take the most experienced people in the new factories to start them up and then move the personnel around. And you cannot imagine how difficult it is to find really qualified staff in China and to keep them over a long period of time. And one of the ways how we address that, we tend to be mainly in Tier 3 and Tier 4 cities in manufacturing. And within those cities, clearly, Vinda is one of the very important employers. And therefore, a lot of people with good qualification tend to be quite loyal to our business. But the second part is, it's not the loyalty of the people, it's also the automization, and Mr. Lee talked about that. When you go to any site in Vinda, you will only find basically quite empty manufacturing sites and empty warehouses. Because of the lack of people and this challenge to get talent, we have automized a lot. And with the high as the rising salaries in China, this is also a good commercial perspective. The second aspect I would like to talk is about e commerce, the digital revolution in China. So if you go to China today, you will see what maybe Europe will look in 10 or 15 years. In China, the Internet penetration is only 60%, but that's 800,000,000 consumers. And 98 of them are actually 98% of them are actually doing it via their phones, okay? So it's a huge market. If you go to Beijing and Shanghai and Guangzhou, penetration is 100%. And the only reason why it's not 100% across China is because we still have a few areas, which are not very rich and where basically the development has not reached yet. So if you look at this, we have also very important Internet player in China. And you probably know Tencent and Alibaba. Just to give you an example, the key difference between an Alibaba and an Amazon in the old days, what Alibaba immediately realized that the value is in the data and not in the e commerce. So it becomes a payment system, an insurance system. It becomes a e commerce player, it becomes just a facilitator. And if you look at the numbers of Alibaba, they are staggering. The turnover of Alibaba is RMB 270,000,000,000 which is the same in krones. But the profit of the company is RMB 70,000,000,000 which basically is kind of a 30% margin. And if you take their main competitor, jd.com, which operates more like Amazon in the past and is more an e commerce player or e commerce supermarket, the profitability is far from there, and they're basically held up in their growth by the physical infrastructure that they're putting in place. So why have we been so incredibly successful in e commerce? And we showed you the number of 25%. Actually, the number in China is 31%, okay? So why have we been so successful? The first reason is 8 years ago, when the e commerce revolution started, so to say, or was in its infancy, Vinda realized we cannot give that to the sales force because it will just die. It will be too small and not important, and we don't know how to do it, and we have important things to do and things like that. And therefore, the e commerce function was basically given to marketing. And marketing realized that, oh, you can sell something, but you can also do great marketing. So when I hear the numbers from Pablo and Volker, I'm very happy that it went from 0% to 25% in digital. We spent 100% of our A and P money on digital because that is where the consumers are, and we cannot compete with advertising rates and television, which are, for our product, irrelevant and also too expensive. So then we developed this channel. And I think until 2 years ago, we had a very continuous approach. We are market leader in jd.com and Tmall, Alibaba, Xunning and other platforms. But now things going the other way. So all the e commerce players, in particular Alibaba, realize they have had the information and data of 20% of Chinese consumers. And every more data they want from them will be more and more expensive. So they need to find other people where they get the data for to improve their services and get people into their business. And that is why they're investing now in offline. So Alibaba only 2 years ago started to invest in RT March, and I think the deal was completed last year. And what we see now is basically new formats of supermarkets coming up, where you go into supermarkets and certain things you can pick up and take home if you wish to, but you can also scan them and get them 2 hours later delivered to your home. And this is not just for fresh food or staples or whatever. You can also say, please cook me that, and I take it home or you send it to me. So it becomes a very, very interesting way and a different experience for shopping. And it's a huge opportunity for people like Alibaba to collect additional data. And as you know, China is very controlled. So the Chinese government is a real player in the economy. And you heard about the state owned enterprises. You heard about the banking system. And Alibaba and Tencent have basically broken the monopole, especially in the financial consumer market. So in China, no credit cards. What do they do? They create Alipay and they create WeChat Pay. And basically, these financial instruments have become a very, very significant part of consumer life. And the same is also true with insurance. So Alibaba is a major insurance seller now to consumers in China, but also to businesses. And what Vinda I think makes Vinda successful is we are not set in our ways. We are operating in a very fast changing environment. And when I talk to people about our strategy, it is so high level that it gives you the opportunity to actually fine tune as you go along. The last point and I'm sorry, I'm a little bit over time. The last point I would like to talk about is about sustainability. 3 years ago, when you were in Beijing or in Shanghai, you couldn't breathe for, say, 180 days a year. It was quite tough because, I mean, it's half of the year, and we like to breathe every one minute at least. And the Chinese government has started to put very, very serious programs in place. So the challenge for China is that air quality should improve by 30% in the current 5 year plan. I think Beijing and Shanghai have already achieved a 12% to 13% improvement of air quality and the whole of China is at 7%. And if you're interested, this is not government numbers. These are numbers which you can find on your phone. It's called Air Matters. It's an app worldwide. You can see air quality. And this change is dramatic. And Vinda clearly also contributes to that. So wherever we can, we go out of coal, we go to natural gas. We always look at cost as well because clearly that's important. We do a lot of recycling. Water is expensive in China, and we have reached in some factories up to 99% of recycling rate like in Donato's units, which are state of the art. SO2 emissions is going down. CO2, I talked about. No, etcetera, etcetera, etcetera. So it's a major, major part. And in Vinda, we use this type of numbers not as competitive advantage to our competitor to our customer or consumer. We actually use it with the government to tell we are responsible citizen, we are expanding very fast, and we need industrial ground. We need support in order to continue to develop. And I'm pretty sure that in the next 10 to 20 years, Windho will continue on that path. And with that, thank you very much. And I think you have 2 more slides to show before we start. It's your disclaimer you normally have. Don't you want to show that? No, disclaimer, yes, sure. Here we go. Thank you. And here's the disclaimer. Yes. You normally want to show that. And then I ask Magnus to join us on stage. And then Nicolas, can we please have the Q and A slide? So who wants to start with the first question? Yes, Oscar, down there. Thank you for those presentations. Very interesting again. I have two questions. First one is about the Chinese tissue market, which I read the growth in the Chinese tissue market slowed quite substantially last year compared to previous years. I read about a number of about 4% growth last year versus historical growth of 8% to 10%. Is that your view as well? And what do you believe is behind this? And then my second question, if I may, is, I mean, Vinda has now expanded outside of China into other regions of Asia. And you mentioned in your presentation internationalization. Is Vinda interested in a broader global presence as well? Thank you. Thank you, Oscar. I think coming to the first question, data in China is a murky affair, okay? So I think the data you have probably seen, what I see at the China Tissue Federation that over the last 10 year, year in, year out, the volume growth of tissue has been between 5% 6%. And I haven't heard the number 4%, it was still 5%. Value growth is different. So last year, with the efforts of Vinda and other key competitors, there were actually some price increases in the market. And if I recall well, the Nielsen number of value growth last year was around 14%, okay? So quite significantly more. And I think it's a mixture of price increases, a mixture of improving the portfolio premiumization of the products which are sold and then inaccuracy because China is a big market and neither Nielsen nor Kantar will basically supervise the whole market. So that's one. 2nd question, internationalization, etcetera. I think Mr. Lee said it very clearly. Our ambition is to become a leading hygiene company in Asia. From our setup, clearly, we could take the Vinda brand worldwide, and we sell some products here and there, especially with Alibaba online. However, when it comes to the arrangement with Essity, the license of our brand and technologies in Personal Care are limited to the countries of Asia. And frankly, if you operate in a country like China, I found it already difficult sometimes to look at Southeast Asia because the Chinese opportunity is so gigantic that even sometimes we need to remind ourselves that it's an important business as well. It's growing at lower rates. But nevertheless, it's in the high single digit growth numbers, which is very respectable. So I think Vinda's strategy will be number 1, tissue in China number 2, Personal Care in China number 3, Southeast Asia, North Asia to develop the business we bought And then I think number 4 for us is a little bit the we need to be get better at B2B. I think we're in the same development stage as Pablo that we are starting, we are learning, and it's a huge opportunity across Asia in tissue and in incontinence care. Good. Next question. Yes. Yes. I think I recall in the last Capital Markets Day that you saw some great opportunities for feminine care products then as well in China. And I was wondering, it seems then that you're doing a relaunch now and if you can talk about maybe why this didn't progress as you thought and what you're doing now to improve that? Okay. So when I started 3 or nearly 4 years ago, I had a huge ambition. And the huge ambition was to say, we need to be really big in feminine and really big in Inco. And in my little bit naive understanding at the time was, well, a product like Libreess, which was so successful in Europe, which we had relaunched and was really doing well, would be a great idea for China. And how was I surprised by putting the product in the first launch in the market that actually the marketing mix maybe, but the product quality of a good European product is definitely not a premium product in China. And why is that? That is because the Chinese market is much more influenced by premium brands from Japan and Korea. And the softness of these products and the packaging quality of these products and the execution of the whole consumer mix is, I would argue, quite superior of what we would find acceptable in Europe. So if you take Libero, you know Libero, you've seen the shares, all Swedes in the room are happy. Chinese consumer looked at Libero and say, well, it's not really soft enough, and we don't like the print on your plastic because it's not clear enough and things like that. So there are differences. And what we have learned in the last years is to take the SET technology, to take the best practice in branding and marketing and then the Vinda Innovation Center in Xinhua, so in Xiamen, in our home base, is basically adapting these products to the market. So what we have done in the last 2 years is to buy machines in order to develop to be able to produce products to higher quality standards. Initially, we imported and that was also not very good because of length of supply chain and things like that. And we are now finally happy to use all the learnings we had from Librece in the world, especially also from the examples that Pablo mentioned in Latin America, and are now preparing our real launch in the market. I'm very confident. So it doesn't mean we haven't grown. We have grown 30% in Feminine over the last 30 years 3 years. So it's not an issue of growth, but I'm much more ambitious than that when it comes to future market shares. So that is the learning, and that's where we are. One more question, if I may. I remember also back then that you said you talked about your you had a far better market share in the e commerce channel than overall. And also wondering there if you can update us on how you have been able to defend that share? Okay. So when we started 8 years ago, we had the amazing market share of 100% of a very small business. So it was great. Clearly, today in China, the e commerce channel is not a niche channel anymore. It's a large channel, and everybody is there. So our share in e commerce will always be larger in e commerce than it is offline, and that has to do with the fact that Heng An's sales force is double our size, and they're bettered on the sales force on the ground and we bettered on e commerce. That's normal. However, in e commerce, over time, the consumer will decide. It's not a niche anymore. So it's now about consumer preferences again and the strength of our brand. And I think with the Vinda brand and the Tempo brand, we have some fantastic brands. Vinda is structured from mass market to really premium and Tempo put the super premium on top. So we are covering the whole market, which allows us price increases as we have done and which allows us, I think, to win the game in to defend our share in e commerce. But it's not because we were there first today. It's because consumer preference will drive choice. Good. And then Margarita, yes. Thanks. Fahambe, Credit Suisse. Quick question from me. Clearly, you well, you just mentioned that your sales force is half the size of your competitor. And online has helped you get that distribution expansion into cities outside Tier 1, Tier 3, etcetera. Do you feel now that you're equally distributed across China? Or can we still expect further distribution gains from Vindya? Yes, you can. Because Vinda, when Mr. Li 30 years ago created Vinda, it was basically, as you said, a small factory in the south of China, okay? So our market share in the Guangdong region, which is not big for China, it's only 100,000,000 people, is 40%. And then over time, we move to the west, to the center, sorry, Hubei province around Wuhan, etcetera. And our market share is around 25%. And then we move to the east, and there we are now close to 20%, growing very fast. And then you go to the north, and we're about 12%. And then you go to the northwest, we might be 10%. So there are still areas where we can grow. But I think that it's not just because of distribution improvements, because the competition in these regions is quite different from very premium market in Shanghai to quite straw pulp type low quality things in the West and the North Sea North Sea and North Sea. That's the policy we learned earlier today. Okay. Okay. But without the phoenix process. So basically, I think it's still the growth will come from our ability to implement our products on shelf and from the innovation and the premiumization we bring to the market. Any more questions? Yes? Thank you. Two questions for me, please. On incontinence in China, SCA started to train nurses, if I remember well, 6, 7 years ago. And on paper, I mean, this addressable market is absolutely huge. Yet when I look at the total sales of Vinda, incontinence remains relatively small. So my question on this is why is it taking so long to get to build a meaningful category? I mean, I know you're starting from scratch there and you have to build a category, but why is it taking so long? And what are the prospects for INCO in China as a result? And my second question is on margins, because few years ago, Vinta had an EBITDA margin, which was more than 500 basis points higher than what it was last year. Putting aside the raw material headwind, is there anything structural there, increased cost of doing business with marketing spend going up faster than sales? Or would it also be down to e commerce maybe being dilutive to your overall margin? Thank you. Okay. Yes, okay. Yes. So maybe let me find the answer, and then Magnus maybe can complement that from an SCT perspective. So first of all, the Chinese incontinence care market is only SEK 7,000,000,000 compared to tissue SEK 88,000,000,000, okay? So therefore, doing big investments and just striving forward creates a loss rather than significant growth in sales. So it's a very tiny market in China today. The reasons are there are a number of reasons for that, but they are changing. The first reason is that China is very future oriented. So before a grandmother would get money from the children who are working, she would rather invest that in the baby because of 1 child, 2 child policy. And therefore, all elderly are generally stepping back in consumption. And then the third reason is, in China, the category is so small, it's very hard to implement it in offline. Online is much more easier because you have the thing there and etcetera. So that is a little bit the thing. And Magnus, maybe you want to add then how we collaborate. And we have the best help you can wish for, I think very clearly. When it comes to nurses, I think we are a little bit slowed down by the regulatory environment in China. So if you want to be a nurse in China, you have to belong to a hospital. So we can train nurses, but we can never train nurses in a way that gives scale because it's so much depends on the medical profession. So what Mr. Li has initiated 2 years ago is that we actually are setting up with a charity in Guangdong a significant nursing home, and we use that as a springboard to demonstrate what good nursing and incontinence care is looking like. But training nurses, we have realized, was a good thing for these particular things, but we were not in control where these nurses then were used, where they then suddenly used in intensive care or where they used in other things because we are not master of the allocation of that resource. Okay? Magnus, do you want to say a few things about incontinence care? Well, only that we are, of course, completely committed to taking the number one position also in China and that we are watching the opportunity develop and trying to find our way. And another thing that maybe you did not mention is that with now the relaunch of Feminine Care, we have an opportunity to add light ink on top of that, which was an area where we didn't really focus. And going forward, we believe that that's an area to grow maybe before going straight to the heavy Inco users in nursing homes, which is, as you described, not a very big part of the Inco market. So we're actually focusing on a different part now also of the Inco market in a relaunch in this area, fitting very closely to our fem care relaunch. And the last question you asked basically on margins and dilution and things like that. So clearly, 2018 was an exceptional year. So I don't we're not going to then. I think we did actually, I think we did quite well. If you think that raw material prices went out by 46% in China, and it's 55% of our cost. So what you have seen in the past since particularly since 2015 is our willingness to invest into Personal Care. And before we reach scale in Personal Care, you will basically see very slight improvement in gross margin, much higher A and P sales and marketing cost and basically a slightly dilution on the bottom line from that. So what we discussed in the board is very clear, and Mr. Li reminds me every day that go for double digit, but make sure you deliver a high single digit EBIT margin in order to keep the house in order. And that's what we try to achieve. So everything which goes above this high single digit EBIT margin is reinvested for growth. When the growth opportunity has superior gross margins than the average of Lindner's company. Thank you, Christophe. I think that was really good concluding remarks. Christophe and Ms. Tan, Mr. Li, they will stay a little bit more after this. So if you have any more questions, we can continue where we also offer some drinks, finger food and some mingling. So thank you, Christophe. Thank you, Mr. Le and thank you, Ms. Tan. Thanks, Ricky. And I want to take the opportunity before I hand over to Magnus to thank all of you joining this day for your participation and the questions. And I hope you enjoyed it when we are describing how we want to improve well-being, but also create value for different stakeholders. And now I hand over to Magnus for the concluding remarks. So I hope to leave you with 2 lasting impressions. One is, of course, that we are completely committed to continuing the value creation journey, and that's what we're working with every day and that we are very, very consistent in our both in our strategy and in our execution. And I think these bullet points summarizes that. But the other maybe more important thing I would like to leave you with is I hope that you now also agree with me that this is, if not the best, one of the best management teams in the world. And with them, definitely, we will continue to be successful because I'm of the firm belief that only by having a winning culture and by working closely together as one team, and I think we heard numerous examples of that today, will we be able to be successful going forward. It's so important now in this fast paced changing environment with sustainability possibilities, digitalization possibilities and all the other things we've spoken about where at the same time we need to become more efficient and raise prices and so on. It can only be done as a team. And I feel myself very proud about what we've heard here today and hope that you feel confident that this is the team that can do it. So also I would like to thank you for your active participation. And before Josephine reminds me, we have one of these as well. Now you've seen it. Thank you very, very much for being so engaged this entire day with a lot of information. So look forward to a little bit of more informal discussions right now.

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