Earnings Call: Q3 2013

Oct 18, 2013

Welcome to SCA's Third Quarter Report Press Conference here at our headquarters at the Waterfront Building in Stockholm. My name is Josephine Edwell and I'm Head of Communication for SCA. And today, our President and CEO, Jan Johansson, will go through the report. And in the end, we will have a Q and A session where also our CFO, Len Mac Persson will join on stage. So I'll hand over to you, Jan. Thank you very much. And once again, welcome to the first meeting of this kind in our head office. If I start a little bit with the macro situation, in general, we still have a very weak economy in Europe. The unemployment rate is still on a very high level. The trade is still weak or even going down in many countries. And of course the situation in U. S. Is not helping neither the global market or the U. S. Markets. But in spite of that, if we look at our categories, we have had a categories, we have had a reasonably strong quarter with growth both in emerging markets and even in the mature markets. We're still impacted by currency movement. Of course, we have our strong Swedish currency, but also weakening of some of the currency in emerging markets, which has an effect in particularly on the translation, not necessarily on the transaction side. When it comes to the forest industry, I'm getting back to that of course later, we still see a difficult situation on publication paper. News is down by 6% and then LWC down by 8 percent year to date. So the development, the structural development is continuing in that part. And of course the weaker economy is also impacting that. But having said that, we have the 2nd strongest result in SCA in Q3. So we have been managing reasonably well even though we have a difficult macro perspective around us. If we look at our efficiency program, I'm not going to dig into this. The only thing I'm saying is that we are on plan and everything is going as we have communicated. And there is no reason to believe that it should not continue in that way. Coming into a summary between Q3 and Q3, we do have a sale growth in the company. And of course, we are still impacted by acquisition and divestments. So we always try to show the sort of apple to apple situation. I come in some of the figures later on how that has impacted. We also have some growth in the forest industry and everything except publication paper is doing quite well at the moment. And we also are improving our EBIT compared to Q3. Higher volume has impacted the result by €300,000,000 We also have higher prices that has impacted the result by some €140,000,000 and cost saving Q3 to Q3 is about €550,000,000 One negative aspect of this is, of course, if you look at the operating cash flow that has decreased. But the main part of that is receivables. If you look at inventory, it actually has a positive impact on the cash flow. And receivables of course impacted also by increased sale, but also some prepayment or early payment through to our suppliers. So it's all in control. It's due to when the end of the month is coming. If it's coming on a Friday or Saturday or Monday of course you have a big swing on the working capital. But the most important thing inventories is still going down and have a positive impact on the cash flow. Looking at this one, if we look at the sales, we have a negative impact SEK1.4 billion on the Q3 results and acquisition on sales, sorry, and acquisition a positive impact of NOK 340,000,000 And what we have to remember also going forward is that the remedy package that we were forced to sell when we acquired the GP will also have an impact on Q4 and Q1 because we divested most of it in Q1, but still had some of it left in Q2 this year. And the total remedy package Q3 has an impact of €450,000,000 in sales and some €28,000,000 in the result. And all in all €2,000,000,000 in sales and around €300,000,000 in EBIT when you look on a yearly basis for the remedy package. We continue to strengthen our balance sheet. The gearing is down up to 0 point 52. And you know that we have a target of 0.7. So we're still below the target when it comes to debt to equity ratio. Sequentially, we have flat sales in the group and and summer months are normally a little bit weaker than the spring and autumn month. In spite of that, we have increased some of our profitabilities and we in particular in tissue. Cost savings continue coming. We have some €72,000,000 in tissue compared to Q2. And also in forest cost savings coming in by some €50,000,000 We had some lower sales in baby and I'll get back to that when I get into Personal Care. And on the 9 months year to date, we have negative currency impact of SEK 450,000,000. We also have seen energy costs coming up with some SEK 210,000,000. We have a positive impact of raw material of SEK 153,000,000 but of that SEK 183 is in forest which means that we have a higher raw material price in our hygiene business. Savings is up to €1,200,000,000 compared to last year. And if we look at the divestments, it's negatively impacting us with some SEK 2,500,000,000, but acquisition positively SEK 5,800,000,000. So it's a mixture all the time of divestment and acquisitions. So coming into Personal Care, we do have still a good growth in incontinence product both in mature markets and in emerging markets. We are still growing in Europe. Even though the market is not growing very much, we are gaining market share. We are driving penetration and we drive penetration. It's always difficult also to look at the market share because those market shares were not there until you actually penetrate them and got them into the market. Baby, we had some strange development in the market. The market in Europe in many countries is down in Baby during the summer. I think mainly all countries except Germany is down. And one reason which may sound a little bit strange is that it's been a very warm summer in many parts of Europe. And when it's a very warm summer, you tend not to put diapers on your children. But in Germany, at least in the western part of Germany, it was a cold summer. So the baby sale was actually up in the western part of Germany. It was even down in Sweden because we had such a warm summer. At least that is what we believe because we don't really understand why it's down. And of course the weak economy, Greece is down by 12%. It's not only the sun. It's also because of the weak economy. But overall, we believe it is due to that. And we have to see now in Q4 if it was actually that and the sales is picking up. And this is the market that is down. So it's not only our sales, it's the market sales. Feminine is doing great, very strong. We are growing in all parts. We are growing profitability. This is the smallest of our categories, but one of the most profitable that we have. And we also have an ambition to continue to grow the feminine market. Growth in emerging markets is continuing. And of course, we see some slowdown due to the general weak economy in the Western world, but less in our categories than maybe in other categories in the emerging markets. A slight even though we had a positive even though we had a positive impact on volume of SEK 125,000,000, we also had a positive pricemix of SEK 32 1,000,000 and cost saving of SEK 90,000,000. But then we have currency, negative raw material and also we invested some €82,000,000 more in the market during the quarter compared to Q3. So that is sort of consuming the improvement. But the important thing is volume positive, price mix positive, cost save positive. Market activities we can always drive or not drive, so that's within our control. Then of course currency we can't do anything about it is what it is. Coming to tissue, a very positive development. We are now in Q3 on a return on capital employed of above 14% in tissue overall. And you know that we have a target of 15%. We have a growth in all our areas in consumer tissue and away from home. Emerging market has continued to grow quite well. We are in the middle of the process to have an offer on Vinda as you know. And the dividend day is today in Vinda. So we have seen some movement in shares, but our estimate was that everyone will keep the share so they get the dividend and then they will sell it. So we are still very positive that we will reach the target to get above 50% or 50.1% in Vinda and it will be open until the 28th October if I remember right now. So now from today and going on then we will see the movement of share and if we are on track. And the one sort of indicating that we are on track is the share price never had never been above our bid. It's always been below our bids. That's for me, it's at least an indication that it will be accepted. Also quite substantial improvement of profitability. Higher volumes has a positive impact of SEK160 1,000,000 prices SEK70 1,000,000 cost saving SEK300 1,000,000. But then we also have higher energy raw material costs negatively impacting by €80,000,000 and currency around €40,000,000 in negative impact. Coming into Forest Products, and as I said, our sawmills operations are doing better. Our kraftliner is doing better and our pulp business is doing better, but we do have a challenging situation on the publication paper. And if we look at the decreased sales, the lower prices has impacted the publication paper by 5% compared to Q3 last year. And then of course the others are then having a positive impact. We continue to drive the cost saving very strongly. We have a positive impact of €160,000,000 on cost saving. We have higher prices of some €40,000,000 and we also have lower material costs here in particular the wood raw material which has impacted by €45,000,000 but energy cost is going up. So we have €80,000,000 higher energy costs. So everything is moving in the right direction except publication paper. Going forward in because I know I will get that question, the price increases in publication paper, It's probably an opportunity for next year to increase the newsprint. We believe it will be more assumption we have. So to summarize, we have higher sales and profit in Tissue and Forest, higher sales, slightly lower profitability in Personal Care and you know the reasons behind that now market activities among others. Efficiency program on track. Vinda and of course we are now also walking into India. So that's very exciting. We also have several We also have several new product launches during the quarter. And you of course all understand the importance of innovation that we do get new product, new launches into the market and that is accelerating. And of course in doing that that will also impact short term the margin is slightly negative. But of course with new feature on the market there's an argument to discuss with the consumers with the customers on a different price level. So all in all, it's very positive to get new products on the market. We have also inaugurated the first wind park with Statkraft. And in the first phase, it will produce some 200 gigawatt hours, but then it will go up to some 350 during the startup phase of the wind park. And this is as you know just the beginning of a major investment in wind power in Sweden where we are not really investing, but we have the land for the investment. We also are continuing to get credits for our sustainability work, which we think is very important. As you know it's even though we have a difficult situation in the market, it's still something that consumers are looking very much at and customers even more. And today as you know also the shareholder base is growing very much when it comes to sustainability funds. So I think we have almost 80%, 85% of all the sustainability funds in Europe as shareholders in SA today. So with that, ladies and gentlemen, I would like to open the floor for questions. Lennart, Josephine? Thank you very much. It's Linus Larsen with SEB. First of all, congratulations on a fantastically strong tissue result in the 3rd quarter. And regarding tissue where you had price mix improvement of some SEK 80,000,000 sequentially, cost savings improvement sequentially of around SEK 70,000,000 Looking into the Q4, you have been talking about the price increase coming through late in Q3. You have continuous cost savings coming through. Are these sequential improvements that we see in Q3 and Q2 also indicative for the sequential improvement going into the Q4? Or is it even better? Or anything deviating from this trend? We will see since some of the price increases were late in Q3, you will see some price increases in Q4. And of course, the cost saving will continue. It will not be a straight line in the cost saving. I mean, it will be depending where we are on the projects. So from that perspective, yes. Then we're in Q4, we have some 2 days less invoicing days or something like that. So I mean you have to look at the totality. But you are right in the assumption that price increases will come in a little bit more in Q4 cost saving absolutely. And then we have Q4 with Christmas and some fewer invoicing days. So tissue volumes Q4 and Q3? Well, I'm not going to give you the volumes. And also partly relating to tissue on the energy cost side, you said that you have seen some energy cost increases. And if you could shed some light on where and what and what to expect as we go into the Q4 where you have some potential seasonal effects as well? Well, I guess that looking at the situation at least in Sweden you will see higher energy prices going forward. Nuclear is not doing very well. There's very little water in the system. So my assumption is that energy prices will come up. And in the rest of the world, I would guess more or less flattish depending on the U. S. Situation also if that will have an impact, but at least we are saved until probably next year now I guess. Thank you. And next question? Oscar Lindstrom from Danske Bank. I'd like to ask some questions about the Personal Care division. First of all, regarding the still declining EBIT in absolute terms sequentially. You cited the sort of weaker than you cited the sort of weaker than expected baby diaper market in Europe and then also some higher A and P costs. Is that sort of the entire picture? Because we've seen this trend now while this is the Q4 in a row. Is there anything else that you see sort of increasing competition in this segment or reasons for the well this negative trend? Well, I mean, as I said, we had a positive volume impact and a positive pricemix impact in Personal Care. So from that perspective, no. But of course, there's always tough competitions. And in a weak economy, the competition even increases because you want to attract consumers. But you have to remember that you're talking about a business area with a return on capital employed of about 28% and some of the categories far above that. So from my point of view, you have to balance the profitability with the growth on the margin. So the margin is one percent you probably would prefer that. So it's always a balance between profitability and margin. You talked a little bit about the product launches, which are should come in towards the end of the year or next year and then being one of the reasons for the higher A and P spend that we've seen in this past quarter. Should we expect the product launches to have a positive impact on earnings next year? Absolutely. Okay. Very good. And a little bit about the cost savings as well and this goes for the group as a whole. They came in at a very nice click this quarter. Could you sort of specify some of the specific actions Because we haven't really seen any mill closures on the tissue side, for example, or sort of large cost saving activities? So I presume there's a lot of sort of smaller actions going on a little bit under the radar screen. Well, I mean, you have different, of course, for forest. And in personally, in Hygiene, you have Georgia Pacific and you have the saving program. But the low hanging fruits are already picked out of course and that's when you reduce administration and sales force and marketing force. So now we're into the heavy stuff in the production side. And I mean it's very simple. We have a perfect plant managed by perfect manager and perfect people And then we copy that all over the world. And of course, it takes time before you have changed the perfect managers and etcetera, etcetera. But it's actually going quite well. And the potential that we have mentioned here, I don't have any doubts whatsoever that we're going to reach now. But of course, it takes a longer time to change a plant than to ask 50 people in administration to leave the company. And that's why we have 2015 2016 as the target when it will be 100% done. And forest is also absolutely according with the plan with the SEK 1,300,000,000 So we are delivering what we have promised to deliver so far and I'm sure we will continue with that when it comes to costs. All right. Thank you. And then on the 4th. Lars Schell by Credit Suisse. Just a couple of follow ups on the cost savings. Looking at the 2 major programs in the hygiene, one seems to be running a bit of shorter schedule. You've got €130,000,000 in the Productivity and Efficiency program versus a target of €200,000,000 with not a great deal of incremental I suppose in Q3. Should we still expect the 200 number that would in turn imply of course a significant step up in cost savings in Q4, while the other program is running actually ahead of the full year target already now. Any thoughts on that target actually moving up? When you talk about the full year target, are you referring to the annualized saving? Right. Which is not necessarily on a yearly basis. It's annualized. So I mean it can go over the full year also. I don't know if you want to answer that Leben. I mean, it is. As you said, we have announced that. And I mean, when it comes to in the quarter, it's also depending on that, your the P and L impact this Q4 or if it is coming after the year. And it's an open question, of course. But it is as we have said, it is going according to plan and we will deliver it. So the answer is you can't take the annualized figure and put all of that in Q4? No. I appreciate that. But it was sort of a incrementally it was not that much in Q3. But to reach the run rate target for the full year, you need to step up the run rate meaningfully actually in Q4. That was really my question if that's in the cards. But I'm not sure I would have communicated the €200,000,000 we said roughly as an annualized at the year end. Yes. And then on the Forest Products side, can you I mean, it was a big step up on a sequential basis. Can you just try to run through again what sort of moving parts? And if we go into Q4, if we should expect any disturbing sort of maintenance works that would actually bring down the margins a bit? You're talking overall or the cost saving program or overall? Overall. And especially I suppose someone else in the store in fact talked about very strong forestry results. Is that one part of the positives in Q3? Lena, do you want to comment on that? I can comment Q4 then, but We can see in the if you compare the Q3 with the Q2, we had more maintenance stops in the Q2, even if we had in the kraftliner also in the Q3, costing us €60,000,000 We have some remaining costs for also for the quarter 4 coming from the stops. And then, of course, we have seen profit improvements in not in publication paper, but in the other. And then when it comes to the forest operation, it depends also on how much are you harvesting on your own or how much are you harvesting on purchased. Final question. And when you're looking on your growth initiatives have been very sort of tissue heavy if you like and less so on the Personal Care where you actually as you highlighted your margins and returns are much higher. There's one former I suppose partner or employee in Domtar running a show that is trying to buy a lot of Personal Care assets and there's more per se now in Europe. Why are you not in the running for these sort of assets? Are they not attractive? Or do you not focus on Personal Care growth? It's a big question. But if you look at portfolio today, we have some 38% of the sales in Personal Care in Emerging Markets and some 18% 19% in Tissue. So we are from that perspective more into Personal Care in Emerging markets. When we look at you're referring to Dontar or Correct. And what they have been acquiring has not been of any interest for us. Would you like to grow in Personal We We are growing. I mean, we acquired Every Beauty in China as an example. Yes, I mean what we need especially in the emerging market or any market you need either baby or tissue as a driver into the market. You need the volume to carry out the products. And normally there is less competition in tissue than in baby if you go into an emerging market for many reasons. I mean it's more capital and it's a different business than the Personal Care business. But overall in the portfolio, I would like to have a better balance between Personal Care and Tissue. So from that perspective, you're right. And if there would be any good assets for sales fits our portfolio, we will certainly look at that. But we are not prepared to pay sky high prices and never get a return on it. Okay. Okay. So let's open up I think we have some questions also from the webcast and the telephone conference. So let's take one question there first and then we'll go back to the audience. So operator, can we have one question from the telephone? You can indeed, ma'am. And that comes from Bank of America Merrill Lynch from Kartik Swamy. Your line is now open. Hi, everyone. Thank you for taking my question. Kartik Swamy Nathan calling from Bank of America Merrill Lynch. My first question was getting a little bit of color on what's happening in emerging markets because looking through your prior presentation over the past couple of quarters, it seems there was quite a dramatic slowdown in EM Growth in Personal Care. And I was wondering whether there are any particular geographies where you've been impacted more than others. And I recall during the management presentation just now, you mentioned certain segments of the market were worse than others. And also whether there are any kind of specific factors over the quarter such as weather that might have impacted you? It's the main reason for the lower growth compared to previous quarter is actually that we are running out of acquisition. So it's more comparable now quarter to quarter. And previously we had acquisition impacting the emerging market quite substantially. But having said that as you normally see in China and I mean we told you a little bit about the summer in Europe that we were surprised. But in China, it's a fact that during summer babies doesn't carry diapers. So that's also one reason why you see a little bit lower growth in Q3. But otherwise in general terms, it has not happened anything on the market when it comes to our categories that should make you worried about the growth so far. Currency, yes, because the currency is getting weaker in a lot of emerging countries and that is of course impacting when we translate it into Swedish currency, but otherwise not. Acquisition summer currency. Okay. Thank you. And my second question was on Kraftliner. If you could give us a little bit of color as to whether you're still seeing weakness in pricing post the summer and what demand has been like? The demand has been kept up. We have had some stops during Q3 in our kraftliner mills. But the inventories are slightly higher in Q3 than they were in Q2. And we don't see at the moment anyway a possibility to increase the kraftliner even though testliner prices are going up. And of course, if testliner continue to go up that's a good indication to increase kraftliner. But at the moment, we feel it's not the right time to do it. Do you think it will take until the end of the year to destock that extra inventory? Or could it be faster than that? No. I guess you will since December is very slow in the packaging business overall, I guess you will have to see until quarter 1 before it's turning. Okay. And my final question was just on the sequential movement on prices for Personal Care. If you could just remind us whether you already scheduled some increases or whether there'd be some contracts rolling over with increases into Q4 versus Q3 to pass the raw materials and other cost inflation? In Personal Care? Yes. We I mean, normally when it comes to branded business, you need to have some new feature in the market to increase prices, which we are introducing. But the impact of that will come first in Q1. So I guess no major price changes in Q4. Excellent. Thank you very much. Thank you. So let's go back to the floor and we have a question there. Hi. This is Stellan Hester with Nordea. I had a question on A and P spending. And I think you said before that you expected A and P spending in the second half for hygiene to be on par with the first half. And I'm just wondering if you're sticking to that or if there's something that has changed in the overall picture that makes you want to change that? Well, if you compare Q2 to Q3, I think we said it would be flattish. And I mean I think it was €17,000,000 higher. So for me that is flattish. And I don't expect it to grow in Q4. So the phasing is that it's a little bit more in? Okay. Yes. Yes. Also given that you have a lot of new products coming up, do you see more A and P spending next year? Is that too early to talk about? No, I don't really see any reason for that in the way we see the business today. It's I mean A and P most of the sales today are on P on promotion and the consumer behaviors are changing day to day. So you will I think all time you will see less A and more P. And today almost all sales in the retail chain is on promotion. So if I follow the sales week by week, it can be like this depending on your promotion or not. So but no not really, not any higher. It's different. It's shifting to promotion from A. But overall, I don't see any reason for any substantial increase in it. Thank you. We have more questions from the telephone I hear. So operator, we can take another question from the telephone please. Thank you, ma'am. And from JPMorgan, you have a question from Celine Panuti. Your line is now open, ma'am. Yes. Good morning. In fact, I have a few questions. The first one is on the baby market. I mean, you explained what you thought was a decline over the summer. Can you say whether I mean, I don't know if you can track market share given that a lot of your market is in business is in private label. But do you have a sense of whether your contract are still running or have you seen some maybe contract loss? So how do you fare in terms of market share? And my next I mean the second part of that question is, is there any news that we can you can share with us on what's happening relating to Kimberly Clark leaving this market? My second question is as well on baby, Personal Care. You mentioned just now that you have increased A and P. I was wondering whether there was as well other investment. For instance, in India, do you have as well more salespeople or headquarter costs? And to which extent you can quantify that if that has been already taken in the Q3? And finally, in tissue, you grew quite well 4% growth in volume. Is it can you break down what has been the growth in Western Europe please? Thank you. Yes. If I look at take the first question, as you know, we are very big in private label in Europe. It's about fifty-fifty of our sales. And we haven't we have not lost any contracts in private label. And private label is gaining market share in Europe and Proctil is losing. And if you look at the markets where we do have branded which is mainly the Nordic market and Russia, we if you compare Q2 to Q3, we are a couple of points down in the Nordic market. But it's too short period to tell if we're losing market share because it depends very much on promotion and not promotion. So the major impact as far as I can see it anyway is that the market is down and not that we are down. Emerging markets, we are still gaining market shares. So that's not a problem. The market is a market. It's not SAE. And the second question was Kimbrikla, India. Sorry. And in the second. And India, of course, we are investing in India now and that will have an impact on the margin. But still it's very small figures. It's not really something you can highlight. Kimberly Clark is closing down. They are still selling on the markets in some categories. We are of course, targeting some of their customers, not all. And we will continue to gain on this. We are more we're probably more going in our thoughts for not building a new brand in a country where we don't have a brand today because the risks and the costs are too high. So we probably go for the private label part of it rather than the branded part. It's not 100% decided, but at least that's the way we see it today. Okay. And my other question was on the growth in tissue. What has been the driver for that? We Q3 to Q3, you're correct, Nelaneth. I think acquisition is positively 3% We are growing in U. S. In away from home. But we also have a growth in Europe both in away from home and Consumer Tissue even though if it's slower in Consumer Tissue. And we do gain market shares in Europe at the same time. And we have a target to actually to continue to gain market share from the position we have today. We are not allowed to acquire anything more in Europe and Tissue, but we are going to get a higher market share by organic growth. May I just come back to one question that was asked and I would like some clarification. In terms of raw material bill, as we look into the Q4, what kind of inflation are you looking at? And is there any specific differences, for instance, in personal care versus tissue? We still see part of the pulp coming up, but we also see some other parts coming down. So overall, I will call it flattish Lena if you take the total portfolio. But of course, from an individual category it can be up, but for another one it could be down. But overall it's flattish. And in Personal Care, are we seeing raw material inflation in oil based raw mats? No, we don't see that. All right. Thank you. And as you know, we also have a delay of 3 to 6 months for enterprise changes in oil based materials. All right. Thank you. So operator next question from the telephone please. Thank you, ma'am. From Barclays Bank, you now have a question from the line of Ian Simpson. Your line is now open sir. Thank you very much and good morning gentlemen. Just a couple of quick questions from me. Firstly, looking within Personal Care, you mentioned that Feminine Care had done very well in emerging markets. It would be great if you could just remind us what proportion of that Feminine Care business is emerging markets and perhaps talk a little bit about the drivers within that as to what did cause that growth? Secondly, you talked, if I heard you correctly, about how there are 2 fewer invoicing days in the Q4. It would be great just to sort of hear a little bit more about that and whether that's going to affect your whole business? And then just lastly, it would be great if you could talk a little bit about incontinence and specifically how you sort of feel the branded part of your incontinence business has been performing and whether you're happy with the level of A and P that you're currently pushing behind that with a view to next year? Thanks very much. If I start with the last one, we only have branded business in continents all over the world. And I mean, of course, we would like to grow that faster since it's such a good category for us and the penetration is still as you know very low. But we have to balance that with the margin impact of actually driving penetration. So we try to have a decent growth without destroying the margin. And as you know also we have an extremely strong position globally and in all markets we are. So we are spending the A and P we think is the level to drive penetration without destroying margins. When it comes to Feminine, I actually said that we have been doing very well all over the place. Even in Europe, we have improved Feminine and growing market share and growing profitability. So it was not only in emerging, but in market part of it. And feminine in the group is 19% of sales around that, 14% of the sales. So it's a small category, but actually with the highest gross margin. What was the third one? I forgot. Was it the third one? It was the third question was just for some color on the 2 fewer invoicing days in the 4th quarter? And just sorry just on Feminine, what proportion of your Feminine business is emerging market? Thank you very much. 65%. 65%. Thank you. We have some extremely strong position in emerging markets when it comes to feminine and very high market share. It's also when we talk about this, our small acquisition in Brazil are gaining market share. So we were soon number 1 on the market if we are not already number 1 on the market. So all our personal care products are actually doing great in emerging markets. Invoicing days you're an expert on What was the question about that? 2 less days what is the impact? I mean it is if you have a 20, 22 each month, you can take a percentage point of 60 for 2 days in the high end part as well at least. 60? For a quarter, it is 60 days invoicing days roughly and if it is too less. Yeah. So I mean the invoice the sales is 100% determined of the invoicing days. So if it's less invoicing days we get less sales. If it's more, we get more sales in a quarter. And that's affecting all three business units. So there are no changes in terms of how invoicing works in each one. All three business units have had 2 fewer days in the 4th quarter. Maybe not in forest. But in hygiene we often see that pattern. Okay. Thank you very much. But over a year, we normally should have the same number of invoicing days. Thank you. Okay. Next question from the telephone. Operator, please. Thank you, ma'am. And now from Redburn, you have a question from William Houston. Your line is now open, sir. Hello there. You mentioned maintenance shutdowns coming in some effect in Q4. Could you just talk about what scale those will be and how those compare to Q4 last year, please? And then secondly on the wind power given the opening of your wind farm, can you just talk about when you expect to be seeing some profit impact from those projects please? Should I start with the wind and then you take the first one? If you look at the wind power, it depends what kind of deals we have because we have a number of setups in the market. The simplest one is that you lease the land and then we get the revenue immediately. Then you have one that we build the windmills and as soon as the windmill starts to work, we get part of the revenue of the windmills. And then we have a third one where when the park is finished, we get an ownership of that park as we have Stuttgart. And then in that deal we'll get 40% of the ownership. And then we have another well, the 4th is that we have a combination of getting ownership and getting a competitive supply of energy from their existing production today. So there's a huge bunch of different setups. But overall before you see a real good or a real big impact of this, I would guess it's another 3, 4, 5 years ahead, because it takes such a long time to get the permits and then you need to build it etcetera. So it's a long term project and but without any cash out or investment for us. So that's of course the beauty of it. And then could you repeat the first question again? And then Leonard you can answer that. Yes. Sorry. On the maintenance shutdown side, you mentioned that you're expecting still some maintenance shutdown impact in Q4. Could you just quantify the impact you're expecting and how that compares to Q4 last year, please? It for this year, it is SEK 25,000,000 SEK 30,000,000. I don't remember what we had in the 4th quarter last year. Compared to £60,000,000 then in the Q3. Yes. Okay. And sorry, can I just lastly on the invoicing days, could you just is that a year on year you expect to less inventory days in sorry, invoicing days in Q4? Or is that a quarter on quarter comment, please? It was compared to quarter 3 this year, quarter 4 this year compared to quarter 3. Okay. So year on year, your invoicing days will be the same in Q4 of this year than last year? I have not looked at that. Okay. Thank you very much. But I mean but I think the Christmas holiday will have almost the same number of red days as last year. Okay. Thank you. In part of the world. Yes. And Europe is the main part of all. So operator, let's continue with the next question from the telephone. Thank you very much, ma'am. Now from ABD, you have a question from Martin Balby. Your line is now open, sir. Maybe this has been answered, but those tissue price increase announcements you had there and you realized in September, how large were those? 3%, 5% or what is it? That's unfortunately nothing we communicate since we have a lot of customers and a lot of negotiations. So we keep that to ourselves. They something that could be speculated upon maybe saying that you had 1% or was that wrong to say that? Too low. No, no, yes, Georgi. No, we can't really get into that because then we will have problems. All right. Thank you. Operator? The only thing I can say when it comes to tissue even though that we do have an improvement over the years now, it's still not enough. We need to improve profitability more in tissue because of the capital we have invested there. So this is not enough. We need to be able to offset raw material cost increases by price increases and we need to deal with normal inflation also. And in doing that, we need to improve the profitability. We are at 14% in Q3. It's not good enough. We need to get up. Okay. I think we have a final question from the telephone. So operator, let's open up for that one. Thank you very much, ma'am. And that's from Societe Generale from Chas Manso. Your line is now open. Yes. Thank you. I have a number of questions. Could we kick off with Q4? I mean in Q3, I think your group organic growth was around 5%, But the comp looks considerably harder in the next quarter by something like 500 basis points. Is that something that we should take into account? Or do you believe that you can offset that? We are not giving any forecast for the Q4, so No, no, no. Okay. Is that comp a real comp that we should be looking at? Real. Could you repeat that please? Well, sometimes when we look at the historical comps, they actually reflect things of even the year before that. And so they're not real comps. And I'm just saying that the Q4 comp is 500 basis points harder than it was in this Q3. And I'm just wondering whether that is something that we should consider a real hurdle for you or not? Sorry, we do not really understand your question. Okay. Well, maybe we take that one offline. Yes. Okay. Yeah, sure. Okay. And then going on, there was some talk about new launches, I think, mostly in the future, next year. Were there any new launches in this quarter that you can talk about or any entries into new markets this quarter that you can talk about? Yes. We had some new launches both in tissue and in feminine, especially in tissue during the brand Tempo, where we have another development on an even softer paper in that one. And we also had in Tianna a new product for light ink in Tiena that's been launched during the quarter. We had new kind of soap released in Colombia that we have a great belief on. We start in Colombia, it's working there. It's sort of an intimate soap. So we have a lot of new things on the market and not necessarily on all markets at the same time because we can test it in one market. If it's working then we can duplicate it in other markets. Great. Thank you. Give us simply give us simply what the organic growth was in your emerging markets versus your mature markets? We'll look it up for you. I don't have it in my memory. We have a growth in Personal Care of 6% in Emerging Markets and we have 13% in Tissue in Emerging Markets. And overall growth in tissue 8% and 5% in personal care. Okay. And on the baby diaper side, Kimberly announced its exit some time ago and we still haven't really seen anything come through. How long do you think it will take until the industry settles, the contracts are reallocated and so it comes through? I mean, we are in the middle of these discussions in different markets today. The problem is of course also that there is not really an overcapacity on Baby in Europe which of course is positive. And they are closing down, so no one is buying their assets. So there will be a deficit of Baby Diapers. And the question is how fast can we cope with that. But I guess it will take probably a year before we have sorted everything out and see where we can get the capacity or anyone else can get the capacity. So it's from that perspective for us a positive situation for consumer and customer a little bit difficult situation. Okay. And on the pulp situation, sort of industry wide pulp situation, My understanding was that there was some kind of major new pulp capacity due to come on stream sometime in the second half that would alleviate the your input costs. Could you sort of update us on that situation whether that's happened or not? Well, I mean you can clearly see on the development of Eucalyptus that the prices are going down. And of course that's because there is a lot of capacity coming out on the market. Other hand, you see the other part of the fiber is actually increasing because there is new no new capacity coming in on the hardwoods sorry on the softwood. And we buy fifty-fifty hard and soft. So for us, of course, it sort of even out the price increases and the price decreases. Okay. And sorry the final one for me. Assuming that the Vinda operation goes through as you hope, just over 50%, what kind of debt capacity do you think you'll be left with? I mean to reach the 50%, we will spend some SEK 3,000,000,000. And as you know, we are at the debt level of €52,000,000 And with an equity of €60,000,000 you have some €9,000,000,000 €10,000,000,000 in before you reach that. So, euros 9,000,000,000, euros 10,000,000,000 debt capacity, Jan? Yes. But I mean, it is not the target for us to go up to the CHF 0.70 billion. But the Vinda acquisition to reach the SEK 50 billion will take SEK3 billion. So it's not we will still have a very strong balance sheet. Lovely. Thank you. Okay. I think we conclude the Q and A session with that. Any final remarks from you, Jan, before we end? I think we said everything in the summary that I mean despite a very tough market, we are still performing reasonably good. We are still growing. We are improving profitability. We have a hiccup in Baby during the Q3. I'm not particularly nervous about that. And otherwise, we are doing quite well. So with that, thank you very much.