Hello, welcome to SCA's third quarter report press conference. My name is Joséphine Edwall-Björklund. I'm head of communication for SCA. Today our CEO, Jan Johansson, will go through the highlights from the report. After that, we will have a Q&A session where also our CFO, Lennart Persson, will join the stage. Over to you, Jan.
Thank you very much. Good morning, ladies and gentlemen. We are very much still in a transition process in SCA after the divestment of packaging, acquisition of Georgia-Pacific. This is, of course, also reflected in the report. As an example, we have restated the packaging operations so we can compare year-on-year. We have not restated the Australian business, which is then, of course, need to be dealt with in the reporting. The integration so far of the Georgia-Pacific acquisition has gone according to plan. The business is in line what we assumed in the acquisition assumption or a little bit better. We have not yet seen any of the synergies from that acquisition in the P&L because we are just in the beginning of the integration phase of GP.
If we start to look at the environment we are in, we are not very much helped by the market development or the economic development in the world as you all know. In Europe, for example, the expectation this year is a decline of the economy of some 0.2% in the euro area, with some 0.5%. The consensus for next year is a moderate growth of 0.2% in EU area and 0.5% in European in total. That is something we, of course, need to adapt to and manage in our businesses. Having said that, we still see a very good growth in emerging markets, both in tissue and personal care. We also see some growth in Europe in some of our categories, and I will get back to that.
The sales and result is, of course, impacted by GP, I will comment on that when it's relevant. The business area within SCA today that are impacted by the situation is, of course, our forest operation. I will get a little bit deeper into that when we come into forest, what is happening and what we assume will continue. Looking at the summary of the result, we do have like-for-like a growth of some 16%. We had a negative currency impact on sales of about SEK 1 billion Q3 to Q3. Of course, that is mostly then the translation part when we translate everything to SEK. The major transaction impact of the currency is, of course, in the forest operations. Tissue acquisition positively impacting. GP has an impact of some 10% Q3 to Q3 of the sales increase of 16%.
We do have higher volumes excluding the GP acquisition also. We have higher prices. As I said, a very strong growth in our emerging markets. Forest, from a market perspective, volume is down. We have not lost volumes, but we have seen price decreases in our portfolio. We also have a nice improvement of our result. Of that 20% increase, GP is about 9%. An important aspect of coping with the situation we see in Europe is, of course, efficiency, productivity. If we look at the current cost saving program we have in the company, we have annualized reach so far 427 million, but in the Q3 result, 100 million is impacting that. On the year-to-date, we have an impact of some 250 million SEK from the cost saving program. Looking from a different perspective, once again, 1 billion impact of currency.
We are for the first time now above 10% in a long time in EBIT margins. I think last time was 2007. After all the transactions we have made this year, we are still on a gearing debt to equity ratio of 0.59. Still a reasonably strong balance sheet in the company. We also see a positive improvement of our cash flow, which of course is one of our priorities in SCA today. Looking Q3 to Q2, we have sales growth of some 13%. We have a negative currency impact of 900 million SEK, translation most of that Q3 to Q2. Of the growth, GP is about 11%. We also have an improvement of profitability in all our categories in hygiene, both in personal care and tissue. If we look at the tissue improvement of 28%, GP is about 17% of that.
As you know, we had GP in from the 20th of July, which means it was not a complete quarter. Coming into personal care, we have a good growth in incontinence care. In Europe year-to-date, we had a growth of 4%. Q3 to Q3, we had a growth of 3% in Europe. Overall, a 9% growth, of that, 6 is acquired. That is then our Chinese acquisition and our Brazilian acquisition that has a positive impact on the sales. Baby increase in sales is mainly from Europe. That is after the restructuring of the baby business in Europe, where we were able to win substantially volumes in new contracts. We also have a 9% impact from acquisitions in the baby growth. Feminine is 100% organic growth. It's mainly coming from emerging markets.
The increase in the result of 23% is, of course, higher volume. It's also cost saving. Of the cost saving I previously mentioned, about 55% is coming from personal care. We have a higher level of saving in personal care today than we have in tissue. We have a reasonable margin of a little bit more than 30% overall in the personal care business today. Coming into our tissue operations, the growth in consumer tissue Q3 to Q3 is mainly from the acquisition. Almost 100% is coming from the acquisition. Then I'm including both GP and PISA. As you know, we also acquired 50% of PISA. Now we have 100% ownership of that. If you look at the tissue increase, some 18% is coming from acquisition. The remaining is organic growth. Emerging markets, the growth of 20%, 7% is coming from acquisition.
Still a very good organic growth in our emerging markets. Looking at the EBIT increase, of course, acquisition, higher prices. We have improved mix in the system, but we also have lower raw material costs. Cost saving here of the figure I mentioned is about 30% is coming into tissue, and the remaining 15% is coming into our forest operation. Looking at forest, we are kind of a perfect storm in our forest operations, where you have a structural change at the same time as you have the economic development in Europe. News volumes is down 10% year-to-date. The magazine paper is down 6% year-to-date. On top of that, we also have the stronger Swedish currency, of course, hitting the forest operation. Looking at kraft liner here, we do have a much stronger position from a market perspective in kraft liner.
The inventories is actually down 23% compared to last year. We have seen price increases during the quarter. We will continue to increase prices, where the next price increase will be about EUR 50, of which EUR 15 we have received already in September. We feel quite confident that we will be able to achieve the remaining price increases. We also had some extra costs during Q3. We had a repair stop in Obbola that had an impact of SEK 35 million. We also had a repair stop in Östrand with an impact of some SEK 25 million. In Q4, we will have the repair stop in Munksund, and that will also have a SEK 35 million impact on the result. The negative currency impact is as much as SEK 200 million, here we are talking about transaction and not translation, so it's real money in currency impact.
Looking at the market situation here, we don't see any possibility to increase any prices for the rest of the year. That goes for everything except, as I said, kraft liner. The market is still very weak in our sawmills, even though we have a good volume. Of course, impacted by the construction industry that is weakening. Also, we do see some negative impact on the home care business, which normally is quite untouched by the economy situation. Now it's so severe in some countries that people are actually buying less even to repair their houses. The pulp situation, the pulp price is sliding up. Looking at the short fiber, it's higher than we saw last year, about 40% higher, long fiber is about 8% lower than we saw last year.
There is a lot of resistance in the market for increasing prices for obvious reason, because there is no growth there. We do see a lot of new products coming in particular in the short fiber side in Latin America. I don't expect any major changes in the pulp prices, but there will be some price increases. As we always say in SCA, the best situation for us is actually high pulp prices, but stable. We manage very good. It's more difficult to take the swings in short terms in pulp prices. Positive on kraft, but no major positive impact in the rest of the operation in forest. Looking at a summary of this: strong hygiene business, continued growth in that business.
There will not be any major price increases for the rest of the year, because there are no fundamentals for that. We generated strong cash flow. Efficiency program is starting to deliver, and of course then we have a major impact once we get into the synergy case of GP. We use this few months to the end of the year to really dig into the different processes and where we should start so we can speed it up after the year end. We have also divested Aylesford, our 50% ownership. As you saw from the report, we had a write-down of SEK 850 million, of which SEK 140 is impacting the cash.
Now we have mainly after the investment in Ortviken, we have our old machine from '52 that is producing news, we have been quite clear that that will also be closed down in due time. We have also, as you may have seen, been included in Dow Jones Sustainability Index. Maybe the most positive thing, at least from my point of view, is that we do see a lot of new innovations coming out on the market in all our categories. That is, of course, the future and the future margin drivers for us to really get out with new things on the market. Whether it's a big innovation or a small innovation, they are as important. The improvement we have seen in margins in hygiene now is of course very positive, but it's not a level we are satisfied with.
Of course, we would like to improve that going forward. We need to do that mainly short-term, I think by reducing our own costs and working with the productivity and efficiency within the hygiene business. With that, ladies and gentlemen, Joséphine, do you want to join me?
Yeah. Good. Lennart. Let's open up then for the Q&A session. Let's start over there.
Lars Kjellberg, Credit Suisse. Could you please go through, again, the sort of margin progression in personal care and tissue, sort of a bridge from Q2 to Q3 with regards to your own cost savings, raw material cost savings? Also, if you can try to clarify the actual organic growth, like for like in the tissue business, excluding all effects from divestitures, et cetera, and acquisitions, of course.
Well, when it comes to the organic growth, I think you can get that from the figures I gave you, what was coming from GP, because GP is the main thing. The smaller acquisition in Latin America doesn't impact us very much, and Everbeauty is still in transition into the company. Coming into the bridge, maybe Lennart, you have that.
Yeah.
Without giving too many details.
Exactly. You will find that also on our website. When it comes to tissue, we have some smaller going from quarter two to quarter three. We have some 3% coming from raw material, and then it is, as Jan said, the acquisitions, of course. Very much of that is coming from the acquisition side. But we have also positive cost saving, as Jan talked about, out from the SEK 100 we saw in addition during the third quarter. I think that's what we can. We have seen higher energy costs in the third quarter. That's roughly. Then it is small plus or minus volumes, price, et cetera.
Costs.
In the tissue. In personal care, it is the same, some 4% coming from raw material and from cost saving. On the other line, we have 4%. Half of that is from the cost saving.
If I may come back just to the organic growth in tissue, that really means that if price is slightly up, you actually have volume contraction X the acquisitions then. Is that the way to interpret that? If you got 100% from Georgia-Pacific.
100% was consumer tissue, not all the tissue, not away from home.
Of the division, we have minus 2% on organic volume, so to say.
Okay, thank you.
We have a question there, yeah. Excellent.
Oskar Lindström from Danske Bank. I'd like to continue on this sort of hygiene margin track. Ahead of this report, you highlighted that the Georgia-Pacific tissue business had a lower EBIT margin than your own business, and I think you mentioned a level around 8%, or that's a level that was discussed. Could you tell us what the EBIT margin level of the acquired Georgia-Pacific tissue business was during the third quarter?
It's lower than SCA margin, higher than the level you mentioned. That is as far as I can go.
Okay. Coming also back to this issue of raw material costs, which seem to be one of the main factors, excluding the acquisitions, for driving the stronger EBIT for the tissue division during the quarter. To what extent were you able to benefit from very low spot prices on pulp? Is that something that was a bit exceptional during the quarter that you don't expect to see going forward?
No, most of the pulp we are buying is on contract. If any, it's very small amounts.
Very small
very small on spot.
All right. Thank you. Moving on to personal care, where also lower raw material costs seem to have been an important part behind the sequential EBIT margin improvement. Could you give some more details as to what was behind that and what the outlook is?
I think in personal care, the raw material has significantly lower value than you see in tissue. As you know, we have a four to six month delay on the price changes in our oil-based materials. We did see oil price go down four to six months ago. Then, of course, we get the benefit on that. Now we have seen it's coming up during the last maybe two, three months, and that will, of course, then have an impact in four to six months' time in personal care.
Following up on personal care, you now have been in possession of the Everbeauty business for more than one full quarter. Could you tell us a little bit about how that business is developing? It appeared from the press release when you acquired it that the margins were very low. Is that something we should expect to continue to be the case?
Well, I think as we said during presenting that acquisition, it's not going to change the margins of SCA in total in a while. It's quite a minor thing in our portfolio, and we're using the time now to really understand the business, to decide where we should be, where we should not be, how should we integrate it with the current business we have in the area, et cetera. You can expect that it will be similar for at least a short time period.
Right. On the synergies from the Georgia-Pacific tissue business, how should we expect those to come in? Front-loaded? Back-end heavy?
Well, people are always in the front, and plants are always in the end. I would say, Mats, a bulk of this is coming from the factory side.
Factory. That would be, we said
Use the mic, please.
Two to three years' time, we will have the full synergies in.
Right. We really shouldn't expect the bulk of this to come in.
No
as back-end loaded. You talked about the negative FX effects, if I look at your deviation table, which you published on your website, the quarter-over-quarter effect seems to have been fairly small.
I think the problem with that is that the currency impact on forest, you will see in the price mix and not in currency.
Right.
You see it in price and not in currency. That was quite a substantial part.
Yeah. All right. Thank you. Those were my questions.
Sophia. There.
Mikael Jofs from Cheuvreux. I'd like to continue, a short question on personal care and super absorbents, given that one of the larger producers faced production problems. Do you see any effects from that in the short term?
Yeah, there was a very sad explosion in Japan, in Nippon, which is producing 20% of the global supply of that. We have, of course, very closely looked into that, but we can't really see that it will have an impact on us since we have very firm contracts with our suppliers.
Okay. Then just a housekeeping question. I noticed that in your intragroup deliveries, that they're down quite a lot between Q2 and Q3. Is that just a function of the new structure of SCA?
Interesting question. Do you have an answer?
No, I have not, but it differs from time to time, but partly it is due to the change in the structure.
Okay. Many thanks.
Do we have anything here in the middle? No?
Okay.
Thank you. Karri Rinta, Handelsbanken. A question on cash flow. There was quite sizable working capital release in the third quarter. Typically, you would see that in the fourth quarter. Do we still have working capital to be released in the fourth quarter, or was there something that made it happen sooner this year?
I think when we look at the working capital, you may see some deviation from the normal standard, since we're now digging into the GP acquisition also, and then they had a slightly different view on working capital than we have. Give us a few quarters, and then you will see the normal pattern on working capital.
Okay. The comment you made on Ortviken, I believe, in terms of the newsprint machine, and you mentioned due time, it will most likely be closed down. Is that due time influenced by what happens in the market, or is it more your reinvestment needs, i.e. when you have to invest, you don't do it, you close it down? Would you do it for market purposes?
It's more an internal process, I would say, than a market process. Since we have now invested in the PM5 in Ortviken into a completely new grade that is not really on the market today, then at a certain period, we will use the PM2 as a test machine rather than producing full volumes. I can't give an exact date, but it's not, of course, too far away.
Okay. Finally, in terms of fourth quarter, you typically would see some seasonality in the fourth quarter that helps the margins both in tissue and personal care. How should we view that now in the light of Georgia-Pacific and very strong margins that we already saw in the third quarter?
Well, as you know, we have different seasonalities in the company. The strongest season in the U.S. is normally when they start to eat ice cream, and in Europe, when we get sick and use handkerchiefs. I don't believe that the seasonality will be any different this year than any other year. The only difference maybe from the past two, three years is that we have a lot of red days in the calendar. It's a bad year for companies. We have 2% less invoices days in Q4 than in Q3.
All right. Thank you.
Okay. I hear we also have questions from the phone conference, let's open up for them. Operator, can you help us with the first question, please?
Certainly. Your first question comes from Peter Thiel. Please go ahead announcing your company name.
Yes, it's Peter Thiel for One Investments. I had two questions, please. One is just on operating costs. If you look at operating costs, excluding extraordinaries, it's a very muted development year-over-year and sequentially, despite integrating Georgia-Pacific. I was wondering if you could just help us understand what you've done at the SG&A level to deliver that result or what happened. The second question, please, was just on the material cost side on the hygiene products businesses. I was wondering if you could just help us give some understanding of what sort of visibility you have of sustaining the benefit you've seen so far going forward based upon your contract exposure, please.
Well, I think the first question is the efficiency program we're running now is also very much directed to the SG&A, hopefully we'll see a further improvement on that side going forward, since we have still some more savings coming in from the program we started last year. The second question, Lennart, I'm not sure I understood that. Do you?
I'm not sure.
Okay. If I could, sorry, just ask one follow-up on the first question, then I'll re-ask the other one, please. I would have thought there would have been some step up because of the integration of Georgia-Pacific in the quarter. I think you talked about cost savings of 100 million in the quarter, which is, compared to the size of the Georgia-Pacific business net, I would have thought there would have been some increase. I'm just curious as to whether there's anything else I didn't understand, FX or something else.
If you look quarter-over-quarter, it is mainly the impact you're talking about. If you look compared to last year, it is of course also that in the comparison year, we have Australia and New Zealand in the figures as well.
Right. Okay. The question I was just trying to understand was you've had some substantial benefits on material costs so far this year on the tissue and the personal care businesses. I was wondering, based upon your contracted position, the degree to which we could see that going forward, or maybe even trying to understand your contracted position versus fresh contracts you write today, the extent which you have visibility over this benefit going forward, because it has been pretty important.
We have some delay of four to five days to the market price and what we pay to our suppliers. That is the absolute bulk of the pulp supply we have today.
Okay. Would you expect this sort of run rate of benefits to carry on through the rest of the year into early next year, or is it not so? What do you think?
Everything else alike, we see some slight increases in pulp now, but with the contraction situation we have, it is four to five days before we see that coming into our P&L. Of course, looking at the peak prices, et cetera, it's not the whole truth because then you, of course, have a lot of rebates in the system also. My view is that I don't expect any major change in that side during Q4.
Okay. Is the tissue business ultimately pricing? Does it somehow ultimately reflect the material position as well with some sort of timeline on the tissue side?
It depends on the different parts we are in the world. Looking at the result now, even though it's quite a nice improvement of profitability, it's still not enough. We will not very easily or gladly give away anything of that margin, if that is an answer to the question.
Yes, it is. Thank you very much.
Okay, I suggest we take the second question from the phone conference. Operator, please help us.
The next question comes from Stephan Luck. Please go ahead announcing your company name.
Hi, guys. I have two quick questions. Firstly, on the AMP spend, that was quite volatile between Q1 and Q2. How was it in Q3 versus last year?
If I remember rightly, it was on a similar level. Yes. Similar level as last year.
Okay, perfect. My second question is if you've seen any sort of aggressive movements from your competitors on the tissue side here in an attempt to grab some shares following your acquisition of Georgia?
Well, one would have expected that maybe during the long time we had to deal with this in the EU, and of course, during the long time, the people in GP knew that they were going to be acquired by SCA, but we haven't seen anything, actually. They've been running the business very well.
Okay, perfect. Many thanks.
Thank you.
Good. Let's continue with the phone conference. Operator, let's have the third question.
We have the next question from Linus Larsson. Please go ahead, announcing your company name.
Yes, thank you. It's SEB Enskilda. Just to follow up on the AMP question that we just had. Do you have a guidance for the full year how 2012 AMP spend will be compared to 2011 expressed as a absolute number or as a percentage of sales, the way you prefer?
[Linus], you have any idea? I think it will be in the same level as last year.
Plus, minus.
Then you are referring to an absolute number, or?
Absolute number.
What does that mean for Q4 versus Q3?
Yeah, it's rather something we don't really want to communicate because then, of course, we give all the answers to our competitors also.
We have quite a big flexibility in this, of course, depending on the needed promotions, depending on our competitors who are acting. Sometimes it's very reactive, sometimes it's very planned actions.
Tend to be more and more reactive because the buying behavior in the consumers is changing for more buying in the shop than deciding in their house if they want to buy something.
Mm-hmm. What do you sense now among your competitors? If you look at Europe in personal care and tissue, what's your sense of promotional activity among your competitors?
In the baby business, it's always high everywhere. It's always a tough competition, in particular also since the private label is a very big part of it in Europe. In continents, very different depending on if it's the healthcare or the home care or the retail business. The general statement will be that there is always tough competition somewhere in our business all the time.
Mm-hmm. On tissue? Any remarks, comments?
From a European perspective, tissue is more impacted of the private label movements and the retailer movements than the competitors' movements.
Mm-hmm. Is there a downgrading taking place right now in consumer tissue in Europe? If so, where and how?
I think we see the same behavior as we saw in 2008, 2009. Not really downgrading, but smarter shopping, waiting for promotions, maybe buying bigger packs, et cetera. Overall, especially in the southern part of Europe, the spending per week is going down from a consumer perspective, but not really in our area because these kind of products, it's very difficult to reduce your spending.
You need an alternative, and that may be more expensive.
Great. Just also on the cost side, at least sometimes in the past, you've had some quite significant energy cost increases in the fourth quarter. Do you have any suggestion as to the cost development for energy in the fourth compared to the third quarter?
Normally, you would see an increase in the fourth quarter due to the weather conditions, that's what we're assuming also.
How much is hedged on the gas and electricity side, respectively?
For the fourth quarter?
Yes.
I don't have a figure for that.
Okay.
Thank you.
That would be it then. Thank you.
We have another question from the floor now.
Oskar Lindström from Danske Bank. The past 12 months really have been very intensive in terms of M&A activity from your side. Will you keep this up going into next year as well? Was this a bit of an exceptional year in that regards?
I think when it comes to getting the right position in the right geography in the world, we will continue to look at acquisitions. The main focus now will be integration of what we have acquired, taking up opportunities, and organic growth.
All right. Thanks.
Okay, no more questions from the room. I hear there are two more questions from the telephone line. I suggest we take them. Operator, you need to help us here.
The next question comes from Johan Sjöberg. Please go ahead, announcing your company name.
Yeah, it's Carnegie. Just looking at the tissue operation, sorry for boring you to death with all these tissue questions here. If you look at your deviation analysis here, you have other having both results in the third quarter compared with the second quarter with SEK 293 million. Just looking at your Q3 results here, GP reported EBIT of SEK 182, which I guess is part of that. My question is, what is the other SEK 100 million?
It's a combination of lower AMP, SG&A. You have the cost component into that, and some distribution, et cetera. It's a lot of small things, acquisition and cost is the main part of it.
Okay. Also, if you look at these one-offs that you would take going forward in order to derive the synergies from GP, EUR 130 million, I think you have guided for here. This cost of SEK 115 during the quarter, is that part of that, or does that come on top of everything?
We don't have any GP in the figures yet.
The EUR 130 million will come in the coming quarters or years here?
It will probably not be anything in Q4. It will be in the next year.
We still have some costs not taken from the October 2011 program.
Yeah.
Yes, if you look at these costs in order to derive synergies, will they come as of 2013 and onwards, we say?
Yes.
Okay. Then, just also looking at your synergies, when will they start to kick in then?
Well, they will start to kick in at the same time. As we said, when it comes to the synergies from the operations, from the production, that will take a little bit longer time, even though costs can come a little bit earlier. They will be a little bit later also, of course. As soon as you have identified and done your negotiation with the unions, you have to take on the costs, even though you haven't seen the saving of the costs.
Okay. Also, just looking at European tissue operations, now you have a big bulk of your tissue operations being in Europe. What do you say is an organic growth rate for tissue in Europe long term? Given the population and stuff like that.
Depends if you look at the market growth or if you look at the ambition we have.
Market growth.
We assume a growth in line with GDP in Western Europe, but of course substantially higher in Eastern Europe and Russia.
Okay, you include both price and volumes here, I guess. If you just look at volume growth, what is the volume growth that you have?
I was actually talking about volume.
Okay. All right. Thank you very much.
Thank you.
Then the last question from the phone conference operator. The last question is from Celine Pianucci. Please go ahead, announcing your company name.
Yes, good morning. It's Celine Pianucci from JPMorgan. I have three questions. First is on the raw material. Can you give us a bit of an outlook for where you feel you will be in 2013? The follow-up question I have on that is that we've seen now for several quarters that raw material has been a tailwind for most of your hygiene divisions, and at which point you will need to price this back to your consumer and pricing will turn negative, which we have not seen yet. That's my first question. My second question is, in August, later August, when you gave your conference call, you guided that raw material will be a headwind for personal care in Q3, and it happened to be a tailwind. You've mentioned that you have four to six months delay in cost in what you see versus the spots.
I'm wondering what is it that happened in September that you didn't know in August. My third question is on incontinence. Some of the other staples company have seen some pressure coming from Europe in any kind of products that are sponsored, so to speak, by the governments. Could you give us a bit of your feel of what's going on right now in the institutional business, and whether the cut and the austerity measure we see for most of those governments have started to have an impact on your incontinence business? Thank you.
Okay. See if I remember all three. To start with, when it comes to raw material, with the current economic environment almost all over the world, we don't assume any major increases in raw material for next year. It's more a currency game, actually, than a raw material game, and I'll get back to that. When it comes to raw material this year, we actually had quite some headwind in the first half of the year due to the currency situation. If I remember rightly, I think we had an increase of 6% in Europe of pulp during the first six months. That was mainly due to the currency changes, since we operate in EUR and we buy in USD. We have not been helped by currency until the third quarter.
Okay.
Looking at the situation, the competitive situation, it always of course depend on the competition, whether or not we need to reduce prices, and the raw materials is one component, but of course there's a lot of other components into that at the same time. Having said that, I think that you and the market should be aware of that the level we are on today is not enough. We need to generate a higher margin and a better return on capital employed in our tissue business. I think all our competitors are in the same situation. It's not as we are doing extremely well. We need to do better, and we, of course, have to try to let our customers to understand that also, even if it's not always easy.
When it comes to the SAP prices, I can't really remember if we said that it will be a headwind in Q3 or not. We saw all prices coming up, and of course, at a certain time, the four to six month will hit the raw material prices. I can't really recall that we said that it would all come in in Q3, since we have this delay, and the prices actually went down in the beginning of the year. Logically, it should not come in in Q3. If we said that, I'm sorry, because that was probably answering some other question. Inco, of course, there is a pressure on the healthcare system in Europe in many places, and they all try to cut costs.
I think the best way for any healthcare institutions today to cut costs is actually to work with SCA, with the knowledge we're having in incontinence. That is also what we are trying to discuss with all our customers. The price of a diaper is 3%, 4%, 5%, 6%, 7% of the cost of an incontinence patients. Sometimes we are successful, sometimes we are less successful. Looking at the development so far, we are doing quite well even in that segment.
Can you share the growth maybe in incontinence Europe institution versus retail?
The only thing I can share with you just now is the overall growth, and that's 4% year-to-date in Europe.
Thank you.
Okay. Any final questions from the room? It seems to be none. With this, I think we can conclude today's press conference. Thank you, Jan, thank you, Lennart, and thank you all for attending.
Thank you very much.