Earnings Call: Q1 2015

Apr 30, 2015

Hello, and welcome, everyone, to SCA's First Quarter Report for 2015. My name is Josephine Edgewell, and I'm Head of Communication for SCA. And today with us, we have Magnus Groot, our CEO for SCA and also our CFO, Frederic Roestek, will join on stage. Magnus will now introduce our report. I hand over to you, Magnus. Thank you, and welcome, everyone. Starting with the general market conditions, we continue to see slow growth in hygiene in mature markets and good growth in emerging markets. In Forest Products, we see increasing demand for sawn timber and for kraftliner while we continue to see declining demand for publication paper. So no changes in the general market conditions. Moving now then to FCA's performance in the Q1. We had good growth in both in sales and in operating profit. And growth in emerging markets, 11%. Actually growth in mature markets was also quite good, 4%, so well above the underlying market growth. We had a strong cash flow, an improvement with 37% and higher sales and profits in all our three business areas. We continue to work with efficiency, and this is incredibly important, especially now to offset The increase we have in raw material costs, and this is a theme we'll get back to, but the increase year over year, so Q1 over Q1 last year, was SEK 721,000,000 and also quarter over quarter sequentially, we had a significant increase in raw material costs and most of this is related to the strong dollar since many of our raw materials are denominated in dollars. And in numbers, sales increased by 15%. And then excluding acquisitions and divestments the exchange rate effects, we had an increase of 6% organically. Operating profit, likewise, then excluding onetime effects, excluding the effect of currencies and also taking out the forest swap that we had in the Q1 last year, we had an increase of the operating profit of 6% to SEK 2,872,000,000. Operating margin had a slight increase of 10 basis points and earnings per share rose by 15%. And as I already mentioned, a strong improvement in cash flow with 37%. Moving over to our strategic priorities. We continue again to be consistent with the strategy that we set 3 years ago focusing on 3 areas: efficiency, innovation and growth. Maybe I'd like you to have a look at this picture of growth because I took it myself in India. So actually this is a mom and pop store, which then is a family owned very small outlet. And here is a consumer who is looking at 1 of our Libro packs and actually buying a full pack. Normally in these types of stores, they buy a single diaper or maybe a 2 pack diaper. So really interesting to see the interaction here and why they choose Libro instead of other possible brands. And what I want to emphasize when it comes to these three priorities is that they go together that we need to look at the entire value chain that when we innovate, we innovate in a way that we make sure that we also improve our efficiencies, our efficiencies in producing the products, but also logistics So all this goes together and this is something that we're driving very hard because in the last couple of years, we very much focused on basic savings, so cost cutting. But now we need to look at saving and cutting costs in a smarter way, looking at value engineering, material rationalization, reducing the number of suppliers, improving our logistics footprint and there's still a lot to do in this area. Moving over to innovation. Here are some examples. And I'd like to focus on toilet tissue today and the innovation we have here, which is a launch all over Europe. And it's actually the first time we make a toilet tissue relaunch all over Europe because our toilet tissue positions are based on many acquisitions with many different trademarks. And again, I think this shows the benefits of scale because what we're doing for the first time is that when we improve the product quality, we also come with a new design. But now we have the same design. I have some samples here. So this is the Swedish toilet tissue that you can buy in the store. And this is the German one. And if you check here, it's the same pack design here with this heart here. And in this way, of course, we save a lot of time on designing different packs and so on, and we also get a more consistent brand building. And it's all based on our brand equity, which is Love Your Skin, in this case, when it comes to toilet tissue. And another example is that so this was a very popular product in France. It's a 5 ply that we acquired with GP 3 years ago. And now we're rolling out this product all over Europe. So this again is the German version that we're just launching now. And the benefit the customer claim is that with 5ply you only have to take 1 sheet at a time instead of taking several sheets at a time. So it's some examples of what we're doing. And with that, I'd like to hand over to Frederik to dig more into the details, and then I will come back with the financials for the individual business areas. So please, Frederic. Thank you, Magnus. I will start with showing you the development of sales. And as you alluded to, Magnus, we grew our sales by 15% in the quarter versus same quarter last year and organically with 6%. And as you can see on this slide, we increased pricemix and we also increased volume. If you look at the first one, the price and mix, it was actually all over the company largely. So we had for all business areas growth. Forest, of course, as a consequence, partly of currency, up by 5%, if you take personal care, roughly about 2% and Tissue about 1%. Volume, this is largely an issue for hygiene. So it's pretty much equally distributed between hygiene and personal care. And of course, currency is just translation on the back of largely weaker Swedish krone. So again, a strong sales growth. If you look at the different regions and mature and D and E markets for us, you can see that mature markets increased by 4%. And if we start by Western Europe, we had a good growth in actually Baby and Pen Pro and Incontinence. Baby diapers, as you will recall, we had a new contract last year, a private retail brand contract, and that is part of that story. But we actually also grew in the retail brand side. Fenpro, we had significant market investments during the Q1, and that was part of the reason for the growth. And also incontinence, despite and Magnus will come back to that a little later, despite Procter and Gamble launch, we continue to grow at healthy levels also for incontinence. Slightly lower growth for away from home tissue, and that was largely on the back. As you will recall, we announced a price increase as of 1st January, and there was a little prebuying in the Q4. So the slow there was a little slower growth in this quarter. But again, tissue continued to do well. The picture in the United States is or North America is somewhat more mixed. Lower sales for Inco on the back of P and G launch and a good growth for away from home tissue. And this is partly a reason of actually a fairly weak quarter last year. You will remember the harsh winter that we suffered from Q1 2014. We didn't have that this year. So it was actually much better and, of course, also a reasonable quarter this year. Emerging markets, quite strong across the board and particularly so in Latin America and Russia. This is in Latin America, Pempro products and predominantly also Inco. So good performance. Russia, pretty much across the board and also for Tissue. Some of you may have seen Vinda announcing this morning. So a very, very good growth for Vinda. But we also continue to grow in Latin America and Russia. So a strong performance for both mature and for E markets in terms of sales. So this is a little bit how the change of profit is distributed and the different factors. And one thing that you should really note here is, of course, the very significant impact that Magnus mentioned to the €721,000,000 in raw material. This is actually 20 7% of our profits in Q1 2014. So it's very rare that we have this kind of impact. This is largely in actually significant more significant for Personal Care, but tissue is also a very big portion of the profit for tissue. So of course, this is on the back of the dollar strengthening. In fact, if you look at the tissue, 90% of the increase of raw material comes from the dollar strengthening. The same figure for Personal Care is about 65%, and if you take the group as a whole, about 80%. So of course, the dollar impact is very significant in the raw material numbers. As you can see, we compensated in price mix and also volume. If you take the price, price mix, roughly about €250,000,000 of that €550,000,000 that you see there is relating to ForEx. But we also had positive price increases in Personal Care and Tissue. We've increased prices in Latin America. We've increased prices in Russia. And we've also increased, as I said, prices in away from home in Europe. So good performance. And mix was also positive across the board. Volume, this is largely hygiene growth on volume. Personal Care, roughly about €5,000,000 on average and €4,000,000 for Tissue. So that's the composition of this and currency, as I said, our foreign results. Finally, just a word on cash flow. Magnus said that operating cash flow increased by €37,000,000 If you include also strategic investments, as you can see here, we increased roughly about 60% in cash flow. So it's a good quarter for us in that sense. Most of that comes from the cash surplus. And you will note that if you actually look at the operating cash surplus, it is slightly bigger improvement than what you would see in our EBIT figure. And that, of course, has to do with the fact that last year, quarter 1, we had part of our EBIT was related to a Forest Swap capital gain. That €152,000,000 doesn't actually impact cash flow. So that's why the operating cash surplus is a slightly bigger improvement than what you would see in our EBIT. And we also have higher depreciation this year. So overall, good performance. If you look at working capital, this is normal seasonal patterns that you would see. We have given a forecast for the year of approximately 6 percent or 6.5 percent perhaps at prevailing currency rates. And we are still about at that level. It's slightly lower in the quarter, but that's more of a phasing issue. So we're pretty much in line with our forecast here as well. Magnus? Thank you, Fredrik. So something then about our three business areas again and something of a repetition. But anyway, focusing now on Personal Care. In this part of the business, we had an organic sales growth of 6%, which is then a mix of pricemix2 and volume 4. Strong growth in emerging markets, as you can also see here at the bottom of the slide, 10% when it comes to Personal Care categories. And when you look at the different categories growth, you can see the fantastic phenomenal 16% in Feminine, which is very much based on the boost plans that we have been talking about now for a year. We're actually putting more A and P behind our feminine category, and we're seeing the results now. And this is also linked to the product launches that we've done over the last couple of years. And also Baby Diapers, partly because of now fully delivering on this big European retailer brand contracts, but we have a very good performance also in our branded business. And in Sweden, we are well over 60% now in market share, which we haven't been for over 5 years. We've been around 55%, but I think we have a recipe that's working also now on our branded products in the Nordic market. Operating profit also increased 6% on higher volumes, higher price mix and cost efficiencies. And the higher raw material costs here, out of the €710,000,000 is almost half of it is relating to Personal Care. So that shows the huge influence on Personal Care. And I know there will be questions here, but what about the benefits of the lower oil prices since we have a lot of oil based products in Personal Care? Well, there's a delay. And today, we see the benefits in oil based price in the oil based products coming late quarter 2 and then second half of the year primarily. We also invested, as I already mentioned, behind the Feminine incontinence products with the fight against Procter and Gamble's incontinence launch and also based on our opening of our first manufacturing facility in India to support that growth, which is moving according to plan in a good way. Tissue, sales growth 18%. And Vinda, our company in China, actually grew over 20% in the quarter, which was very promising considering what you read about China kind of slowing down slightly. And as you can see here, the organic sales growth of 5% is based on improvement in pricemix also for Tissue and a volume improvement of 4%. And operating profit up 12%. Again, higher volumes, higher price mix and cost savings. And as we already mentioned now, but it is a theme, the higher raw material costs basically coming from the dollar strengthening. And when you look at it quarter over quarter, we also have a significant difference. We already mentioned that or quarter over quarter compared to last year, it was €721,000,000 of higher raw material costs. But if we compare quarter 1 to quarter 4, it was actually €277,000,000 of increasing raw material costs. So this has also continued from the Q4 into the Q1. And looking then down at the bottom here, you can see again the growth of 14% in emerging markets, but actually 4% in mature markets is also very good. And that Consumer Tissue is the big growth this time. In a way from Home Tissue, that's 2%. We have a strong growth in the Americas, which are picking up and a slower growth in Europe, again, due to pre buying end of last year in Europe in anticipation of a price increase that we did from 1st January. Finally, Forest Products, sales growth of 8%. Price mix volume and currency, strong growth for kraftliner and Pulp. Operating profit increased 56%, which is, of course, amazing. This is very much currency related. So in Forest Park, we have a very strong positive impact of this. Higher prices, lower energy costs and continued cost savings here as well. So a positive development. And with that, I'd like to summarize the Q1. Good growth in both sales and operating profit, strong growth in emerging markets, cash flow and the highest sales and profits comes from all the three business areas. And the global environment, not much changed during the Q1. Again, low growth in mature markets, good growth in emerging markets, continued increasing raw material costs due to the dollar and a competitive market environment. And looking forward, we continue with this, which is, of course, keeping the momentum in the business, which is incredibly important. And our other priority, which we're also working with, there's a note in the report, which is then to work with our confidence building, especially here in Sweden. And we have decided then to hand back one of the company claims, which is on a lease that expires next year in about, I think, October next year. And since we're not using it, we are handing that back prematurely. So those are 2 priorities that we are driving very clearly forward. And I'm very happy to see that we are keeping the momentum in the business in a very good way and that everybody is focusing on their plans and delivering to those plans. Thank you for listening. Okay. Thank you, Magnus. And with this, we open up for Q and A. This is Stellan Harstun with Nordea. I have two questions. First, on the sort of raw material situation and what you can do in terms of pricing, if you can give any flavor on what you're seeing going forward in all of the business and maybe in Consumer Tissue in particular? Yes. And we already increased prices primarily in Latin America and in Russia and other emerging markets. And what we are working with now is increasing tissue prices in Europe, which takes longer. But I expect that we will see increases in the second half of the year also in Europe. Thanks. Also a question on incontinence care, if you can give some flavor on recent developments, maybe in particular in Europe, what do you see? In Europe, the trend continues that we see a much higher growth of the entire category. And we believe this is because of the increased advertising and promotion that both we and Procter and Gamble are doing now, fighting it out. When it comes to Procter's market share, it remains under 10%. It's leveling off there, which is, of course, encouraging for us. And actually, what we see now is because they launched almost a year ago that and when that happened, we said that maybe the volume growth is due to also pre buying or the customers filling the cupboards with products, but we know now that this is an increased penetration. So actually more consumers are using more incontinence products. Thanks. And then Yes. Thank you very much. Linus Lassen with SEB. Just following up on the margins and which were the lowest they had been for quite a few quarters now in both Personal Care and in Tissue. Just to understand where we are in that cycle, you've told us pretty clearly what the reasons behind are. But what was the raw material cost increase sequentially in both those two divisions? Yes. And overall in hygiene, sequentially, it was, as I mentioned, euros 277,000,000 And the split, I'm not sure about. Do you have that split? Yes. Personal Care is about €45,000,000 sequentially and the rest is largely tissue. Okay. Great. And just coming back to what you said about price on a total basis for tissue as a whole, Q2 on Q1, what kind of expectation do you have there? I think you should expect an effect in primarily in the second half of the year because those negotiations are ongoing into the Q2. Great. You've also said that one of your key priorities is to keep the pace up given everything that has happened in the group recently. What does that mean in terms of M and A activity? Is that a valid comment also for your acquisitive growth agenda? Yes. And of course, we don't comment on acquisitions, but we're continuing as we've done before, of course, in looking at different opportunities. And as we stated before, we look primarily into emerging markets for opportunities and also especially in the Personal Care categories. That's where we are looking for M and A opportunities as before. No change. No change. Okay. Thank you very much. Then we have a question here, Sibyl. Thank you. Mikael Joffs, Kepler Cheuvreux. Could you give us some update on the situation with Vinda now that you have sort of put in your personal care products into that company? And sort of basically tell us how that is progressing. I would say it's progressing very well in cooperation between SCA and Vinda. These categories are new to Vinda, but of course, Vinda has the distribution network, the sales force, the go to market and so on. We're not yet seeing it in increased sales in Personal Care. That's not part of the growth that you see here in Personal Care in the Q1. But I think we have good plans and we have a good momentum and good cooperation there. Thank you. Any more questions from the floor? No? Then we open up from the telephone. So operator, do we have any questions? Thank you. We do have questions on the phone lines. Your first question comes from the line of Celine Canuzzi. I have a few questions, if you do not mind. Coming back on the raw material question, can you give an idea of with the EUR 700,000,000 cost extra cost you see in Q1, what should we be looking for in the coming quarter if you give us an idea of the magnitude coming through? That's my first question. Thank you, Celine. I will hand over to Fredrik. Yes. Good morning, Celine. Good morning. I'll try and answer. I think let me start by a couple of different things. We mentioned last quarter that we purchased raw material in dollar denominated raw material for approximately €13,000,000,000 So of course, that impact will be there also in Q2 because it's likely that dollar euro as an example will be lower in Q2 twenty 15 than it was in 2014. So that's easy to not easy, but it's possible to calculate. The other factor is, of course, raw material related to oil. And of course, we've seen that decline. And as Magnus alluded to, we'll see much more of that impact in Q2 and even more so in Q3 and Q4. So if you sum that up a little bit, what you would expect for Personal Care is if you compare to last year, raw material costs, you will see Personal Care being flat to maybe slightly up. And sequentially for Personal Care related to Q1, it's likely that prices will be lower. If you take tissue, it's, of course, a more challenging picture. So prices will remain or costs will remain higher in comparison to Q2 also last year and also sequentially. So that gives you a rough picture. But again, the €13,000,000,000 gives you a good view. And as I I think we also talked about, we purchased roughly about €7,000,000,000 in oil related products per year. And of course, there is a positive impact from oil having come down. Okay. Thank you very much. That's very helpful. My next question is on the volume, which were quite good in the quarter. Now you were as well some easy comp because of away from home in the U. S. I think as well Russia last year was an easy comp on volume. So question is anything that we should that is material enough for you to flag and whether or whether, in fact, you see better momentum in general in volume and whether that kind of level should be expected to continue in the coming quarters? I can comment on that and then you can correct me, Frederic. But I think we see a good momentum in when it comes to volume. No major changes even though volumes were very high in some areas in the Q1, of course. We see that we have a good volume development in those categories. Okay. In Away From Home in the U. S, I think you flagged that to be a good performance. Can you talk about what is the underlying market doing? Because I think there was some issue with pricing in the previous quarter. So beyond the easy comp, what are you seeing in the marketplace? Yeah, I think approximately a year ago, first, we had the winter storms, and then we actually had a change negative price mix effect in the away from home market in the U. S. And that is gradually recovering. So we're gradually seeing improved volumes, but also improved price mix in the U. S. Okay. And then look at innovation in an integrated way. Is there a bit look at innovation in an integrated way, is there a bit more meat on the bone or indication you could give us for us to get a sense of magnitude of what to expect from the savings? I think that the expected savings that I see in the estimates and the market reports are quite accurate, which means that we have maybe a slightly slower pace of savings in the Q1 than we expect going forward. Okay. Thank you. Thanks. So operator, I suggest you just take all of the rest of the questions that you have online. Thank you. Your next question comes from the line of Riccardo Romiatti. Please ask your question. Hi, it's Peter Testa. Maybe just to follow on from a couple of Celine's questions, please. When you look at just to help us make our calculation, when you look at the effect of inventory as it delays the raw matFX increase coming through. Can you give us some guidance as to how we should think about the inventory cycle delaying the impact coming through on a sequential basis, please? How many months and how long we should when we're doing our moving averages? Fredrik? Yes, I can try and do that. I'm not sure I can enlighten you that much more. The inventory is not really the main issue. It's actually the delay in the contract. So if you take, for instance, fluff pulp, the delay between the actual price decreases is roughly about 70 days. So typically, for quarter 2 in 2015, we would negotiate the price in mid Q1. So February would actually define the prices for Q2. If you take oil based material, you will understand we negotiate the price roughly 4 to 6 months in advance. So this is why you would see the oil price come down in towards the latter part of last year and you see the impact towards the well, Q2 or the latter part of this year. So it's not about really the inventory cycle or turnover that much. It's much more related to the cycle times of the markets and the negotiation of contracts. And would the inventory cycle have any impact on how FX earns its way through on raw mat? Because you would hold, for example, raw mat and work in process and maybe finished goods through the chain at an FX rate of December January and so on, think about the lag? Yes. Yes, that's true, Peter. You will have exactly that impact, but that impact is relatively short because the actual throughput time or inventory turnover is relatively quick, as you can see from our balance sheet. So it's rather quick and typically within any given quarter. Right. Okay. And then just on prices, can you give us some understanding as to how sequentially prices work through Q1 versus Q4 and the extent to which you think based upon prices achieved at the end of the quarter, you have momentum going into Q2? I don't think we can give that much more guidance actually more than what we have given. Right. Okay. And then specifically on cost savings, can you just say what the cost saving impact was in Q1, please, year over year? Do we publish that or Yes. I mean, I know the number, but Yes. We don't normally typically publish the number exactly. We have done that in accordance with the different programs. And as you will recall, both the IMPROVE program and Perform TO Grow has now expired. We don't do that. But if I just anyway allude to it, we have roughly the same efficiency gain as we had Q1 of last year. So we continue in line with our aspiration to save roughly at the same pace, and we've done that also this quarter. Is there anything you can say on the programs, program specific, just update? Yes. The remaining program is the Georgia Pacific integration where we have now achieved €90,000,000 out of the synergy savings that will end up at €125,000,000 by the end of next year 2016. And we are on plan, and we expect to achieve the full savings according to plan. Okay. And last question on product launches. Can you give any sense as to how you think the phasing of product launch impact will come through this year based upon your declared plans? We have a good funnel for Innovations this year. The sales increase from innovations typically has a 6 to 9 month delay after the initial launch because you have a rollout and then you need customer acceptance, you do all the advertising and promotion and so on. So the sales improvements that we see this year based on innovation is coming from launches we did basically last year, last fall. Yes. Yes. Yes. Okay. Thank you. Thanks. Thank you. And your next question comes from the line of Kartik Swamy. Please ask your question. My questions have been answered. Thank you very much. Your next question comes from the line of Oskar Lindstrom. Please ask your question. Yes. Hello. I'd like to look a little bit at the organic growth in Europe, which was yes, you had some maybe easy comps in some markets, but it was fairly strong at 4%. And you allude to the fem care segment being one of the drivers here. This organic growth rate that we saw in mature markets in Q1, is that a pace that we should expect it to continue at for the rest of this year? I mean, have you changed something to increase the pace sort of sustainably? I don't think that we can state that clearly because you also have to remember that we don't promote or market the full 12 months in any category. Typically, you have a program where you do advertising and promotion maybe 7 to 9 months depending on the category and then you also have quarters where you don't do as much. And so there could be variations between quarters, which are then explained by this phenomena. But overall, I think we have a good growth momentum also in Europe. All right. Well, thank you. Thank you. Do we have any more questions, operator? Yes. And your next question comes from the line of Ian Simpson. Please ask your question. Thank you very much. Good morning, gentlemen. You talked about sort of moving away from sort of basic cost programs to trying to sort of build operating efficiency into innovation and kind of looking holistically throughout the whole business. Are you able to give any more color? I mean, obviously, I understand your retrospective numbers, but just a few examples of the sort of things that you're doing just to help us better understand what that consists of. Thank you very much. Yes. I mentioned some examples, I think, initially. One is actually, the products I just showed here earlier, the toilet tissue that I showed, we have a new embossing technique called NetFIP that actually increases the bulk and softness of the toilet tissue, but with a lower grammage. So there's value engineering. We actually use less pulp in the same toilet roll, but with the perceived increased softness and bulk, so thickness. So that's one example. Another example is that we can be better at designing, for instance, folding a diaper. So when it is in a pack, the packs fit perfectly to the pallet in the truck and not to 95%. And then, of course, immediately you improve the logistic costs by just having better truck fill. So those are examples of designing for cost efficient. So one another one is that every time we innovate, we also understand can we use this using fewer raw materials, fewer suppliers, fewer base streets than we had before instead of adding new specifications and new base streets. That's another example. Thank you very much. And just one follow-up, if I may. So your growth in Russia was 27% in Personal Care and 15 tissue. Are you able to sort of decompose that at all into price and volume? I mean, would we be right in thinking that all or more than all of that was price? So were volumes down in Russia? I don't have the exact number. Maybe you have it, but volumes are also up actually. Yes, it's both. It's actually both price. So price is a significant portion of it, but we continue to grow actually volume wise in all of the categories. Thank you very much. Thank you. And your next question comes from the line of Kari Rinta. Please ask your question. Yes. Thank you. Karin Rinta, Handelsbanken. First a clarification, this raw material headwind of EUR 700 plus 1,000,000 that you saw in Q1, Did you say that 80% of that was FX and 20% then the sort of the underlying local currency prices for raw materials. Did I get that right? Yes. Okay. Then a more strategic question on Feminine Care. You are showing good organic growth, but you're still pretty small in that category. So what are you what would be the benefits of being larger player in this category? And are you happy with growing organically? Or is this one of your key focus areas when it comes to acquisitions in emerging markets and maybe Europe as well? Yes. As I stated, Personal Care is a focus area for acquisitions, and Feminine is part of that. And of course, if you have a nationwide marketing campaign and you have 30% market share instead of 15%, then the cost per liner or per towel is half for that marketing campaign. So the scale benefits are huge in marketing and in other areas. Okay. And then finally, incontinence, now that you have had about a year to study Procter and Gamble's market entry, are you happy with your the way that you with your product portfolio, how your products are positioned and that you're still pretty much 100% focused on the brand Tiena? Or do you see maybe you should diversify in the same way that Procter and Gamble is doing? We will continue to focus on T and N. We have a good product range, but of course, we are working to continuously adapt and improve the product range to really mitigate and meet Proctor in the different markets. And your next question comes from the line of Do Haysom. Good morning. I have two questions on the Forest Products division. Firstly, could you give us an update on how successful your €40 a tonne kraftliner price increase has been? And secondly, what are you thinking about for the kraftliner mills strategically now as kind of taking over the CEO role. Would you be thinking about finding them a new home if you were offered a good price? First of all, the kraftliner prices, we are achieving not all of it, but more than half of it, to give you an estimate. And when it comes to the strategy, we have a long and successful strategy of being a hygiene and forest products company, and we stick to that strategy. So no plans at the moment to divest any of the cost line? We stick to our strategy. Sure. Thank you. Thank you. And your next question comes from the line of Robert Waldschmidt. Please ask your question. Two questions, if I may. Coming back to Western Europe and, in particular, Diapers. You've discussed a strong result driven both by own brand and branded. You clearly mentioned the contract win a year ago as driving own brand. I just wanted to see if you're also taking share within own brand or if the share gains are principally related to the branded portion of the business. And then second question would be with respect to the significant number of launches that we've seen in the quarter. Can you just give some color on the phasing of the A and P, I would presume, to support the launches you would have had a heavier weighting of A and P in Q1, which obviously might settle down as we go through the rest of the year? Thank you. Okay. So starting then with the branded business, the Libro business, which we have in the Nordics, in Russia and some Eastern countries, we are actually gaining market share in most of these markets under our own brand, Libro, including Russia. So I think we found a marketing formula that works. When it comes to the retailer brands or private label, which we're offering then in other countries in Central Europe and in the U. K. Actually, most of our customers there are also gaining market share. So it's not only that this one contract is now being fully delivered. It's also that we have a good modern product offering. And I think we were actually voted the best diaper in Spain here just a few days ago, which is then not under our own brand, but under our customers' brand. So it shows that the product is very competitive. And in the second question, so about AMP, we had slightly higher AMP in the Q1 maybe than you will see in the coming quarters, but we will see a slightly higher A and P this year than last year. I think that then gives you a range. Okay. Thank you. Thanks. Thank you. Your next question comes from the line of William Houston. Please ask your question. Hi. Two questions from me, please. 1 on the capacity closures in tissue that have been announced in France. Could you just talk briefly around those? What the kind of time scale is there? And whether that's it for capacity closures or you would expect any more? And secondly, on the diaper lines in Spain, are those both up and running now? And how you talked about selling the capacity in the Polish mill, which is freed up. Can you just talk about whether that's fully done now as well, please? Thank you very much. Okay. So we haven't announced any capacity closures in France, but we are in union negotiations. And we are not in a position to announce anything before those union negotiations are finalized. And those union negotiations are progressing according to plan. And this is, of course, an important part of our GP integration and GP synergy program. So that's that. When it comes to the 2 baby lines in Valt in Spain, both are up and running. The second line is still on its running in curve, but according to plan. And thirdly, we actually have a very good capacity utilization in all our personal care meals now in Europe. So we have a high capacity utilization all over. So we needed those two lines in Spain. Brilliant. Thank you very much. Thank you. And your next question comes from the line of Erik Sjogren. Please ask your question. No, we seem to have no more questions. I see this on my computer here in the front. So with this, do you have any final conclusion, Magnus? Then you're done. Thank you very much for listening.