Good morning, ladies and gentlemen, welcome to the annual results call 2022 of Mayr-Melnhof Karton AG. At this time, all participants have been placed on a listen-only mode. The floor will be open for questions following the introductory statements. Let me now turn the floor over to your host, Stephan Sweerts-Sporck. Good morning and welcome on the part of Mayr-Melnhof. I'm Stephan Sweerts-Sporck, heading Investor Relations and Corporate Communication at MM. It's a great pleasure to have you joining this Q&A conference call on our 2022 annual results, which we released early this morning. Besides our press release, a video statement on the results by the management board has been published on our website, www.mm.group. In this call, we want to provide you now with the possibility to direct questions on today's communication to our CEO, Peter Oswald, and our CFO, Franz Hiesinger. Since this call addresses an international audience, we shall very much appreciate your questions to be asked in English in the following Q&A session. Before we go for that, Peter, may I ask you to start with a short summary of our key messages? Yeah. Thank you, Stephan. Good morning and welcome to everyone. Thank you for participating. I want to be very brief. In 2022, MM was growing strongly and our strategic decision yielded good results. With a strong balance sheet, we will propose to increase dividends by 20%. This is all good news. If we look to the more recent development, the consumer board markets have declined significantly by roughly 20% year-on-year, depending what area how you define Europe exactly, even more if you include Russia. As the safety figures show, this has continued until at least February, and my reading of March is that it's pretty much the same. My reading is that this talking has not yet run its full course, and that we might be in for a few more difficult weeks and maybe months. With this, I want to finish and Franz and I are looking forward to your questions. I just want to hand over to the moderator who will give you a short technical introduction how to ask questions in the system. Yes. Thank you very much. Ladies and gentlemen, if you would like to ask a question now, please press nine, followed by the star key on your telephone keypad. If you wish to cancel that question, please press nine, followed by the star key again. Please press nine star now to state a question. There is one first question coming from Michael Marschallinger, Erste Group. Yes. Good morning, everybody. Thanks for taking my questions. I have two, and the first one would be on the volumes of board and paper. They dropped quite significantly now in the fourth quarter, down to 500,000 tons. Give me a comment on the outlook, further market-related machine downtimes. You know, at 75% capacity utilization, should we assume that this as a run rate now for the first quarter or should we expect a further drop in volumes and capacity utilization on the first quarter? Yeah. If I may answer that. Thank you for the question. I think the number is roughly right. That is the fact of the first quarter, with very little visibility towards the second quarter because our order books are typically in a range anywhere from 10 to 30 days. It would be very speculative to make any predictions here. As I said in my introductory words, we see from our customers that stocks are still on an elevated level, so in the packaging companies. We also see some evidence that stocks with the customers of the packaging companies, so the brand owners, for instance, have too high stocks, and therefore we should not assume that this situation changes immediately. Yeah. Understood. The second one on your hedges in the video message is that you're significantly hedged on the energy side. Could you be more specific, as for electricity, natural gas, what's happening for 23 and 24? Now, yeah. for 2023, we are fairly high leverage. let's say in a range of above 70%. for the next year, we are also leveraged, but to Sorry. Yeah, not leveraged, hedged, but to a lower degree. This, so to say, is for us a stabilizing factor because our customers want that we can guarantee them prices and have no sudden upcharges, et cetera, like we had last year. With these hedges, we can guarantee that. However, just to emphasize it, of course, we have an overall inflation, which is driven like by personal costs and service costs, et cetera. This is something we have to pass on to our customers. Okay. Thank you. Thank you. At the moment, there seem to be no further questions. If you still have a question at this point, please press nine followed by the star key on your telephone keypad. The next question comes from Markus Remis, Raiffeisen Bank International. Yeah. Good morning, gentlemen. A couple of questions, please. Firstly, following up on the energy topic. When you say, more than 70% of your needs are covered, I guess that is basically a forward buying. Is that gas and electricity, or did you refer to gas only? It is a bit different. We don't want to go into these details, but I was referring basically to overall energy. All right. Okay. For us, gas is more important than electricity. Yeah, sure. Okay. I mean, we've seen quite a drop on the energy market. I mean, to which extent do you think your kind of prices that you've locked in are competitive with the current spot prices? At the current spot prices, it is still very competitive. Okay. if the gas price fell or would fall to EUR 20 per MWh, or we would see electricity costs below EUR 100, then it would definitely be a disadvantage... Mm-hmm. That we expect. All right. Yeah. What's your... I mean, the general feeling on the pricing side. I mean, basically waste paper has come down quite significantly. Energy is coming down. Your customers have well-filled inventories. I mean, I guess that must exert price pressure. Is that something you're already feeling? With regards to that, I think you've implemented a much shorter term-driven pricing strategy over the course of last year, if I'm not mistaken. Compared to the past, is it then fair to assume that the price decline will be felt much quicker, I guess? Yes. The two topics, I mean, on recycled carton board, so WLC, we've seen a strong decline in waste paper prices, even though one has to be careful because not all grades fell so much. Therefore, some of that will have to be passed on to customers. On FBB, so the virgin carton board, we see a fairly stable picture, because wood costs, industrial wood costs are rather up than down. Therefore, yes, energy costs are somewhat lower. But with integrated mills, you do not have. I mean, energy costs are significant, but not so high. Therefore, here the price level is fairly stable. Overall, yes, especially in our contracts with our F&G customers and other customers, we have moved to typically quarterly price adjustments, whereas previously there have been a number of contracts with half-year price adjustments. Also the formulas are somewhat different, that it refers not to average prices over long periods, but to spot prices. Both effects mean that price adaptations are quicker done. We always knew about that. Obviously, in a market with rising prices, that was a big problem for us. In a market with declining prices, obviously, we would like the opposite, but that's not fair to our customers. I think the situation which we have now, where we try to manage the margin, is the right approach. If we have cost reductions, we are, so to say, happy to pass them on. Equally, where we have increasing prices and with the situation has changed very much compared to last year's, it's now not the big price spikes like with energy, or raw material, but now it's more about the, let's call it, general inflation or core inflation. Now the challenge and the task for us is to make sure that these prices, can be passed on to the customer. It's a more complex situation. Yeah. Would you say that the price cost spreads, that you will be able to sustain them at, yeah, at comparable levels and that then the earnings pressure will basically come from the lower, utilization rates? Is that a fair assumption? Exactly. Do you think it's just the one? Yes. Yeah. Okay. That is the situation as it is now. All right. Are you mulling plans to take out capacity beyond say the down times, I mean, in case there is a more of a prolonged weakness in the market? Any plans already in the drawer? I mean, what's your take on your competition? Are you seeing any similar actions with your capacities is idle but, yeah, just temporarily taken out? I mean, we have taken the measure to take out one of the board machines in our Količevo mills. We have reduced capacity. We've currently no plans to take out machines permanently. Also because we feel that the machine park we have now is very competitive and therefore wouldn't be justified to take any capacity out. Right. on your- On a- ... on your peers. Yeah. On your peers, behavior. They also do standstills because, yeah, the lower order intake hits everyone. Yeah, I hope that some of them, who have less, competitive, mills or machines take the right action. What's your general take on the price discipline in the market? Are you concerned that there will be a fight for market share, via lower pricing? Look, we are always in a very competitive market, and I think, generally everyone tries to get market share, but I haven't seen, or we haven't seen any unreasonable prices so below costs. Okay. Yeah, final question. I mean, the CapEx volume, I think it was maybe EUR 50 million or so, above what you've most recently guided in 2022. Now, there's also quite an uptake in 2023 with some more than EUR 400 million. I mean, is that a reflection of the general inflationary environment? Are there any extra projects coming on stream? Also then maybe looking beyond 2023, then kind of a decline to the EUR 300 million level, a realistic scenario? I mean, one, the biggest change, actually we feel it was in line with what, with what we planned. We even had some delays. The change is indeed Essentra. We bought here a business which needs substantial improvement. Part of this improvement, not all of it, but a part of it, means additional CapEx. The CapEx for the ex Essentra business and to a certain extent also the Asia-Pacific business have increased this guidance of, I think it was EUR 350-EUR 400. Okay. Beyond for what will happen in your other question was what will happen in 2024 following. I think we are working on a midterm plan. Once we know more about it will be announced. But generally speaking, let's say we are in a mode of growth, but not so much even growth, but more on bottom line improving measures. This will mean further CapEx, for instance, we have also to address to get towards our to reduce our CO2 emissions according to the commitments we've made, et cetera. That will also include some money. At this stage, we do not want to predict the 2024, but rather wait until we have complete approvals from by the executive board and from the supervisory board until we give further guidance to next year. Oh, okay. I mean, the philosophy is very, very easy. If we feel that we can create substantial shareholder value with CapEx, then we will do them. Otherwise not. We do not always get it right. In many cases I think we, so if we can get it right, then we will continue with this policy. All right. Okay, I'll get back into the line. Many thanks. Thank you. Ladies and gentlemen, once more, if you would still like to hand in a question now, please press 9 followed by the star key. As there are no further questions at the moment, I'd like to hand back to the speakers. I would just like to say again, you're very welcome to ask a question. I see it's many of you participating, who usually ask questions. That's the time to raise your hand. We wait still some minutes, one or two minutes before we come to a conclusion if no further questions are asked. And then actually- Can I hand over? Do we have another question? Yeah, there seems to be one follow-up question coming from Markus Remis. Thanks. It's actually, it's actually two. If you could provide us an update with regards to your operations in the Ukraine, how business is progressing there and maybe some indications on, you know, the capacity utilization, et cetera. So I'd be interested to get a sense on the Turkish plants, how business is evolving there with all this economic turmoil the country is facing. Yeah, pleasure. Ukraine, we're very proud that Ukraine continues to produce roughly now at half capacity. This is fairly low, but given our low overhead costs, it means that the plant is profitable. We have from time to time blackouts. Overall, it's amazing how engaged people are and that we can continue. We are producing to a large extent for Western Europe because our customers in Ukraine or some of our customers have been badly hit by the war. We bring the carton boards into the country and export them to Western Europe, and we want to continue it. Overall, Ukraine is a small plant to remind everyone of it. It's not a big issue, but I think it has a high symbolic value. With regards to Turkey, we have in Turkey 4 plants, and unfortunately one plant was in the zone where the earthquake took place. This plant has not been... Fortunately, we had no injuries, no death, and the plant is fully well-built, let's call it this way. It can work. We will start up production in this plant next week. Then we have to evaluate what the overall situation is because a lot of infrastructure has been destroyed, and we need to see at the end of the day, which customers continue production or resume production is probably the better word. Mm-hmm. Overall in Turkey, we are happy with the business. We are suffering from this high inflation accounting. I don't want to get into any technical details, but we think overall so our business there is viable. Yeah, it will so say with no big investments plans, but equally also no plans to reduce our output. We believe that the Turkish market overall is an attractive market. It's a good production site with high productivity, or our plants have high productivity and therefore we continue there as normal. From the, say, volume side, if you compare 2020 to the prior year? The volume was growing. Okay. Yeah. We also see at the moment it's softer. It's more difficult. Overall, it's a fairly stable demand except for the one plant, which is. Yeah. near the Syrian border where obviously we had to stop for some time. All right. Okay. Thank you very much. Thank you, Marcus, for your questions. We are coming here to an end of this Q&A session. Many thanks for questions, participation, and the interest. For your information, our annual report will be available on the fifth of April, and we will release first quarter results on this year on the 25th of April. We wish you good day and say goodbye.