Dear ladies and gentlemen, welcome to the conference call of Mayr-Melnhof Karton AG. At our customer's request, this conference will be recorded. As a reminder, all participants will be in a listen-only mode. After a short presentation, there will be an opportunity to ask questions. If any participant has difficulty seeing the conference, please press star key followed by zero on your telephone for operator assistance. May I now hand you over to Stephan Sweerts-Sporck, who will lead you through this conference. Please go ahead. Hello, and welcome on the part of Mayr-Melnhof. My name is Stephan Sweerts-Sporck, heading Investor Relations and Corporate Communications. It's a great pleasure to have you joining this conference on short notice about our latest news from this morning, MM acquires Essentra Packaging. Peter Oswald, our CEO, will be sharing with you now the highlights of this transaction and its impact on MM Group. This will be based on the presentation which has been made available on the homepage of our corporate website, mm.group, simply mm.group. It's the download at the second square, showing the green presentation cover. After the presentation, we will enter into a Q&A session in which Peter and our CFO, Franz Hiesinger, will be happy to answer your questions. Since this call is directed to an international audience, we would very much appreciate your questions to be asked in English. Peter, may I ask you now to start with your comments. Thank you, Stefan. Welcome to everyone. Thank you very much for joining. I'm very pleased about our acquisition of Essentra Packaging. It is a perfect fit in our core business of folding cartons, and I would like to thank our team for the fantastic work they've done to make this deal happen. We had a very, very thorough due diligence, which has convinced us that we can bring a lot of value to this business. MM is, as you know, the European leader in cartonboard and folding cartons, but we had so far only a limited presence in pharma packaging. With the acquisition of Essentra Packaging, we will become a global leader in secondary pharma packaging. We like pharma packaging for a number of reasons. It's a growing business, given the aging of our society. It's a resilient business because it depends little on the business cycle, and it is a business with high switching costs. We specifically like Essentra Packaging because it is a global business with long-term relationships to 19 of 20 leading pharma companies. It is a global platform for further growth in a still fragmented market. Geographically, it is very complementary to our pharma packaging. We believe that pharma packaging will consolidate over the next years, as pharma customers will require more innovation, system solutions, and very important, compliance with ESG rules. This gives a competitive advantage to packaging companies and specifically to pharma packaging companies with many production sites. I would kindly ask you to move now to page four of the presentation, and let's look together at some key figures of Essentra Packaging. As you can see, sales in 2021 were at around EUR 430 million, so I'm preferring euros. With regards to EBITDA, it is somewhat difficult to determine it because it is a carve-out. Based on our assumption of necessary divisional overhead costs, we have identified the pro forma adjusted EBITDA of EUR 37 million in 2021. While the business has made good progress over the last years, it is financially underperforming. The key point and our key message is we at MM have the competence and the synergies to improve this. Essentra Packaging has a customer base of more than 800 customers, and again, the 19 important customers are the biggest pharma companies globally. It employs about 3,500 employees, and it has 21 manufacturing facilities across 10 countries in Europe and the Americas. Let's move on to page five, where we can see the products. The company produces three different products. That's very important because they are a system, and pharma companies want more and more that the whole system is provided by one company. The most important product, accounting for about half of the turnover, are folding cartons. Leaflets are very important, accounting for about 30% of the business, and also labels. Very focused label production for pharma needs. We'll be really in a position to provide a comprehensive service to our customers. If we look to the next page six, you see here the map with an overview about the plants, and let me just run through them. Starting now with the orange plants in Europe. There are three plants in Ireland, highly specialized. Ireland is a very important hub for the pharma industry. Production, we are especially focused on short runs, which is important because there are a lot of test runs. A strong presence in the U.K., also with highly specialized plants on either folding carton or leaflets and labels. Plants in the Netherlands, in Germany, in Poland. Two plants in Italy, again, one specialized on folding carton, one specialized on leaflets. A small plant in France. Two plants in Barcelona in Spain, both in the Barcelona hub as well as in the Madrid hub. There is a strong presence in the U.S. with four plants in mainland U.S. and two plants in Puerto Rico. You may ask why Puerto Rico. Puerto Rico is a very important pharma hub for the U.S. pharma industry, with all major players having a significant presence there. As you can see on the right-hand side, we have the existing MM plants, and you see that it's very complementary. At the moment, Essentra Packaging doesn't have the position. It has a very small position in France, whereas there are four legacy MM plants with a very good position both in folding carton and leaflets. Recently we have acquired Eson Pac, which has a strong presence in the Nordic market, so Sweden and Denmark. This gives us a perfect coverage of Europe and a strong position, especially in the eastern half of the U.S. and in Puerto Rico. Moving on to the next page and just finalizing before I'm very happy together with Franz Hiesinger to take your questions. Summarizing it, Essentra Packaging is a unique opportunity for MM to become a global player in secondary pharma packaging, and this will enable us to offer to our customers more innovation and more sustainability. We like pharma packaging because it is a stable, resilient business with high cash generation, and it's a growing business. Most importantly, it is at the core of our core competence, and so we have substantial synergies on several levels. We have synergies with our pharma packaging business, our health business. We have synergies with the overall packaging group because of our deep expertise in operational excellence in folding carton production. We have synergies together with MM Board & Paper, where we are an important supplier to the pharma industry with our high-quality FBB cartonboard. Last but not least, the market is still a very fragmented market. A lot of local purchasing is happening. To a certain extent, that will stay. The top 20 pharma companies will require more and more innovation, more and more system solutions, and this will give us a fantastic platform to satisfy their needs, but will also give us the opportunity to grow both organically and potentially with smaller bolt-on acquisitions. I think that was the presentation, and we are now looking forward to your questions. Ladies and gentlemen, if you have a question for a speaker, please dial zero and one on your telephone keypad now to enter the queue. Once your name has been announced, you can ask a question. If you find your question is answered before it is your turn to speak, you can dial zero and two to cancel your question. If you're using speaker equipment today, please lift the handset before making your selection. One moment, please, for the first question. The first question is from Matthias Greifenberger, Deutsche Bank. Your line is now open. Yes, good morning, gent. Thanks for taking my questions. The first one is a bit on the profitability. Why has it been underperforming in the current environment? Is this cartonboard costs not being passed on? How difficult is it for them to pass on price increases on their end? How competitive is the pharma packaging industry? What's the margin of your pharma packaging business, and what do you think that Essentra can get to? Obviously, three questions packed in one. I'll leave it at that and back with the second one. Thanks. Yeah. Thank you very much. In terms of profitability, this is clearly below the industry standard and also below our numbers. Instead of saying, we've spent a lot of time on the due diligence. I personally visited a third of the plants covering more than half of the turnover to be sure that we understand if we really can bring something to the party and increase profitability. I would see the main areas for improvement in operational. Excellent. Machine speed, et cetera, improvements in the supply chain, and also the synergies and the cooperation. There was an issue of a lack of cartonboard where we can add a lot of value and also make the customers comfortable that they have the backward integration and can rely on the supplier. Yes, I hope this answers your question. Okay. Maybe more strategically, so you've now done the two fresh fiber packaging acquisitions, and you are now doing a deal that's a very nice fit. I think this is fresh fiber packaging, if I'm not mistaken. Yes. My question is with Količevo and Kotka, how much of tonnage or revenues can you actually downstream integrate? If so, is this also your goal? I mean, is this the goal for the next five years to make Mayr a more downstream integrated business, or as much as possible downstream integrated with downstream acquisitions, especially in pharma, where you said there's lots of consolidation going on? The answer is the downstream integration is not important for us. Different to the corrugated industry, folding cartons are a much more bespoke and differentiated business and much less of a commodity, especially in pharma. Because of the regulations et cetera, it's much more difficult to change suppliers. We see it more from the other side. We want a very resilient, strong packaging business. Of course it is an advantage for the packaging business that it can offer the backup to the customers to say that we can guarantee, so to say, our own cartonboard supplies. In terms of Because it is very high margin, so high gross margin, business, the consumption of board is relatively small in this area, and our integration does not play a very important role from a board and paper perspective. Okay, thank you. Thank you. The next question is from Markus Remis with RBI. Your line is now open. Yeah, good morning, gentlemen. Two questions, please. Firstly, related to the industrial footprint of the target. Are you happy with the setup? Do you see any need for consolidating one or the other plant? That was really the first one. I think the present management has done some consolidation, and this is not a value driver. We don't want to exclude anything, but it is not about consolidation or shutting plants because also our footprint is there. There isn't a big overlap. It's very complementary. It's really about driving operational efficiency, quality, and customer service in terms of supply chain. All right. Can you shed some light on the synergies? I mean, both in terms of top line or on the cost side, and how much of the cost base or in absolute terms do you think you can take out over the next two to three years? Yeah. You know as well that we are very conservative people, so it will be a double-digit million running rate improvements to be achieved in 2024. We will see then as things progress, if we find more synergies, certainly not less. It's in the low teens. Okay. Sorry. On top of that, there will be just to make this clear, one thing is synergy, where there's a real advantage because we combine our sales and other things. The other topic is, so to say, standalone improvements, which will also be an important driver of the profit improvement. Okay. Yeah. One question, just to get a sense of the target's kind of historic profitability. That roughly 9% EBITDA margin that you flagged, is that representative also for prior years? Yes. The profitability was so without going or commenting too much, but Essentra is a conglomerate consisting of three different businesses, and they bought into these businesses, and the trajectory has been after 2014, 2015, not very good. It has a historic problem with profitability. Mm-hmm. Okay. Can you also provide some granularity on the current capacity utilization of the plants? So is there a lot of spare capacity you can build on? Do you see any need for kind of extra investments as the base well invested, and also final question would be on the product offering. Anything you can kind of transfer from Essentra to Eson Pac or vice versa? Yeah. There is spare capacity. Still we will need to make some investments because the age of the machinery, let's say, is a sort of a mixed bag. There are good new and newer machines, but also some older ones which are pretty inefficient. In order to achieve our profit improvements in terms of operating profit, some CapEx will be necessary. Mm-hmm. Sorry? Yeah, please. Can you indicate the capacity utilization rate, roughly? It doesn't make so much sense in this industry because it's not a commodity industry, so sometimes you have a specialized equipment, which is fine if it just runs one or two shifts. Overall, let's say that the company could produce, let's say, 20% more without problem. Mm-hmm. Transfers of volumes, yes, some will take place, but it's more a game of speaking now to our customers and see where we are complementary. If a customer is a customer of Eson Pac, we have good success now to offer services and products in France, for instance, where we have our traditional legacy business. Obviously these opportunities will now become much larger. Okay. Yeah, final question maybe to Mr. Hiesinger. The GBP 312 million that you indicated as purchase price, is that the actual enterprise value? Are there any pension obligations coming on top, maybe in the UK? Or is that excluding pensions? What would be like the book value of the assets or in other terms, will you have to activate significant goodwill? As the GBP 312 million, that is an enterprise value, there are hardly any substantial pension liabilities which we will take over. However, obviously we'll be adjusted with the cash or, let's say at closing, which will be deducted to, right to the equity value. Actually, we expect only a fairly modest goodwill that we have to activate on this transaction. Yeah, that is our current understanding. Obviously we have to look forward to the purchase price allocation to identify all the assets and the remaining different amounts to the goodwill. Okay. That was very clear. Thank you very much. At the moment, there are no further questions. As a reminder, if you would like to ask a question, please press star and one on your telephone keypad. There are no further questions coming in. I hand back to you, gentlemen, for some closing remarks. Yes. Thank you very much. Thanks again to everyone for the questions and for participating. We are all here very excited because it is a major step for MM going forward to have a strong position in a growing, resilient and generally very profitable way. We have done a very thorough due diligence to understand why the current profitability is not up to the level. We are convinced that we have the competence and that we have the synergies to improve this. In this way, I think our shareholders will be very happy in a number of years when we have executed the standalone improvements as well as realized the synergies. In this way, thank you very much. Stefan, do you want to add something? Just say thank you for questions, participation and interest. The next planned news from our side will be the release of half year results on August 11. Wish you a nice Friday and say goodbye. Enjoy the weekend. Thank you. Bye. Thank you. Bye-bye. Ladies and gentlemen, thank you for your attention. This conference has been concluded. You may disconnect.