Welcome to the Novozymes Q3 conference call. Throughout the call, all participants will be in listen-only mode, and afterwards, there'll be a question and answer session. Today, I am pleased to present Tobias Cornelius Bjørklund, Head of Investor Relations. Please begin your meeting. Thank you, operator, and welcome, everyone. My name is, as announced, Tobias Bjørklund, and I'm the Head of Investor Relations here at Novozymes. At this call, our CEO, Ester Baiget, and our CFO, Lars Green, will review our performance for the first nine months of 2021, as well as the outlook for the full year. Also present at this call are Tina Fanø, EVP Agriculture and Industrial Biosolutions, Amy Byrick, EVP Strategy and Business Transformation, Anders Lund, EVP Consumer Biosolutions, and Claus Fuglsang, CSO, EVP of Research and Development. The entire call will last for about 45 minutes, including time for questions at the end. Before we begin, I would like to remind you all that the information presented during the call is unaudited and that management may make forward-looking statements. These statements are based on current expectations and beliefs, and they involve risks and uncertainties that could cause actual results to differ materially from those described in any forward-looking statement. By that, I'll now hand you over to our CEO, Ester Baiget. Ester, please. Thank you. Thank you, Tobias, and thank you all for calling in. Could you please turn to slide number two? First of all, I would like to express my appreciation to those who attended our virtual Capital Markets Day last month. I hope you felt the excitement from all of us on the team when we shared our renewed strategy, Unlocking Growth Powered by Biotech. It's the start of a journey where we will prioritize, strengthen, secure the delivery of our strategic direction, both short and longer term, and where we invest to secure a longer period of sustained growth. The ambition being to double our reported sales by 2030 sustainably. We're setting off at a good pace for 2021, building on a solid foundation for the years to come. Now, let's look at the highlights of the first nine months of the year. We delivered a solid performance with 6% organic sales growth in the first nine months and 7% in the third quarter. The good sales performance is also reflected in strong earnings, return on invested capital and free cash flow, not only year to date, but also in the third quarter alone. In three of our five business areas, we delivered a strong double-digit organic sales growth. Our well-diversified end market exposure across more than 30 industries is showing its strength in a volatile environment. In particular, food, beverages, and human health, as well as grain and tech processing did very well. Bioenergy is recovering from last year's COVID-19 impact and also posted double-digit growth for the nine months. Agricultural, animal health and nutrition perform as expected with a strong growth in the third quarter, and while household care grew by 3% in the third quarter, this was a bit softer than we originally projected. With the first nine months of the year now in the books, we are narrowing upwards the 2021 outlook range for organic sales growth from previously 4%-6% to now 5%-6%. The updated sales outlook remains subject to some destocking in the fourth quarter, especially in food, beverages, and human health. We're also lifting the outlook for EBIT margin from previously around 26% to now around 27%. This also leads to an increased outlook for free cash flow of DKK 2.8 billion-DKK 3.2 billion and ROIC, including goodwill of 20%-21%. When it comes to innovation, we've launched 8 products so far this year, including 4 here in the third quarter. One of the third quarter launches is the exciting broad market launch of our freshness technology for laundry called the Pristine, while the other 3 are new sustainable solutions for agriculture. We also signed an exciting long-term collaboration agreement with Anuvia Plant Nutrients to develop solutions that reduce the need for synthetic fertilizers in commercial agriculture. With that, let's now review each of the five business areas in more detail, and let's start with household care. Could you please turn to slide number three? Thank you. The performance in household care was flat in the first nine months and fell slightly short of our expectations against a tough comparable from last year. The nine-month performance was supported by increased enzymatic penetration in emerging markets and the freshness platform. Developed markets were softer than expected, mainly due to a more challenging European market in the third quarter. The third quarter weakness in Europe was due to a decline in detergent volumes and private label customer difficulties, which we expect to continue into the fourth quarter. On the innovation front, as we mentioned, we launched Pristine, our first broad market freshness solution. Pristine addresses some of the largest unsolved consumer challenges, setting a new global standard for detergent performance. We expect additional launches over the coming years, enabling further penetration into additional formats and markets. Looking at the full year, we will continue to focus on penetration in emerging markets. The freshness platform will continue to grow, and we are excited about the long-term potential of Pristine. The performance in Europe was softer than expected in the third quarter, and we also expect this to continue in the fourth quarter. In summary, the full-year performance in household care is now indicated around flat, which follows a 5% growth from last year. Please turn to slide four. Thank you. In food, beverages, and human health, we saw a strong and better than expected performance with 15% organic sales growth in the first nine months. The strong performance was broad-based with all sub-areas growing in the double-digit range, including solid traction in human health. Growth was a result of high consumer demand and increased penetration driven by innovation, especially within the health-focused categories. If we look at the third quarter in isolation, performance was once again strong and above expectation, with 16% organic sales growth year-on-year. The strong and broad-based momentum continued and was further amplified by raw material inflation among our customers. In contrast to our expectations, the third quarter performance continued to be supported by high customer stock levels and high consumer demand. Looking at the full-year performance, the strong underlying growth in food is mainly driven by innovation, increased penetration of enzymatic solutions in emerging markets, and our consumer health-focused solutions. In addition, our sales benefit from elevated ingredient prices. Our beverages businesses is expected to grow, mainly driven by a gradual recovery in brewing following last year, which was negatively affected by COVID-19 restrictions. Human health is estimated to grow organically in the double digits driven by innovation and cross-selling. Following a better than expected first nine months of the year, we are raising the full-year growth indication for food, beverages, and human health. We now estimate the business to grow organically by low double digits, including a fourth quarter assumed to be impacted by customer destocking and softer consumer demand. Could you please turn to slide number five? Organic sales in bioenergy grew 12% in the first nine months. While the performance was enabled by our strong sales organization and close interaction with our customers, it came on top of soft baseline, including COVID-19 implications, the last year. Outside of North America, Latin America performed very well, driven by the expansion of starch-based ethanol production. Looking at the Q3 performance, bioenergy grew 5% organically, following a relatively normalized year-on-year baseline. Growth was driven by a starch-based ethanol expansion in Latin America and solid performance for biodiesel in Asia Pacific. For the full year, we expect sales in bioenergy to grow high single digits driven by the gradual recovery in U.S. ethanol production, continued capacity expansion of corn-based ethanol production in Latin America, biodiesel expansion, and market penetration supported by innovation. Please, turn to slide number six. Thank you. The strong nine months performance in grain and tech processing was broad-based and ahead of expectations with a 12% organic sales growth. Both grain, which accounts for roughly 70% of the business, and tech grew double digits in the first nine months. The performance in grain was driven by starch and vegetable oil processing and supported by increased demand for Novozymes yield-enhancing solutions that help offset the very high commodity prices. The double-digit growth in tech was led by a recovery in global textile volumes following last year COVID-19 disruption. In the third quarter, sales grew 4% organically on top of a 9% comparator from last year. This was better than expected and primarily due to continued high customer inventory levels. For the full year, sales in grain and tech processing are indicated to grow at high single digits. Grain will be driven by innovation and market penetration, while the recovery in the global textile industry will be the main growth driver in tech. Please turn to slide number seven. Agricultural animal health and nutrition sales declined 3% organically in the first nine months. The decline was in line with expectations and mainly due to negative base effects from the roughly DKK 60 million, one related to the former BioAg set up in Q2 last year, and a difficult comparator following the stockpiling in animal nutrition in the first half of last year. Performance was strong in the third quarter and as expected, with both agricultural and animal health and nutrition growing in the double-digit range. However, the 16% year-on-year organic growth was based on a soft comparator from last year. It was also a busy quarter on the innovation side with 3 product launches for the U.S. agricultural market and a new collaboration with Anuvia Plant Nutrients. For the full year, we assume low single-digit organic sales growth in animal health and nutrition overall. With that, I will hand over to Lars for a review on the financials. Lars, please. Thank you, Ester. Please turn to slide number eight. Our performance for the first 9 months of the year was strong and ahead of our expectations for sales, earnings, and cash flows. Sales grew 6% organically and by 5% in reported Danish krone and included a 3 percentage points contribution from M&A and about a 4 percentage point headwind from currencies. The reported gross margin was strong at 58.2%, 200 basis points above last year's margin. The third quarter gross margin was also strong at 57.9% and above expectations. Production efficiencies from stronger sales and productivity improvements were the main drivers of the margin improvement in both the first nine months and the third quarter. Higher raw material costs had a slight negative impact on the gross margin for the first nine months and a bit more of a negative impact in the third quarter. The EBIT margin was also strong at 28.8%. It was mainly driven by gross margin improvements and came despite higher operating costs, currency headwinds, and acquisitions. The 29.1% margin in the third quarter was also strong and was based on the same drivers and explanations as for the nine months, except that currencies provided a slight tailwind compared to the third quarter of last year. The first quarter one-offs and the effect from the two recent Human Health acquisitions had roughly a net neutral impact on the reported EBIT margin for the first nine months. The EBIT margin for the third quarter was slightly higher than the reported 29.1% when adjusted for the headwinds from Microbiome Labs acquisition and the third quarter year-on-year tailwind from currencies. Net investments were on par with last year, both in the nine months and in the third quarter. Free cash flow, excluding acquisitions, was strong at DKK 2.7 billion in the first nine months and DKK 900 million in the third quarter. The performance was driven by the higher net profit and an improved earnings quality. The return on invested capital including goodwill was 22.1% for the first nine months of 2021, and 21.4% for the third quarter. This was 2.9 and 2.5 percentage points higher respectively than in the same periods of 2020. Both the nine months and the third quarter improvements were driven by higher net operating profit after tax, which more than offset an increase in average invested capital following the two Human Health acquisitions. Please turn to slide nine for the updated 2021 outlook. Although some of our end markets remain volatile in the wake of the pandemic, and we continue to experience elevated customer inventory levels, we are narrowing our outlook range for organic sales growth to 5%-6%. Primarily Food, Beverages and Human Health and Grain and Tech Processing have performed better than expected and are now estimated at low double-digit growth and high single-digit growth respectively. Bioenergy is indicated to end the year at the upper end of the previous range with high single-digit growth. The Household Care business softened somewhat in the third quarter relative to our expectation, which is assumed to carry over into the fourth quarter and is now expected to end the year around flat. The indication for Agriculture, Animal Health and Nutrition is maintained at low single-digit growth. Sales in reported Danish kroner, including currency and M&A, are expected to be roughly on par with the organic sales growth. The raised EBIT margin outlook of around 27% includes a negative impact mainly from acquisitions and a slight headwind from currencies. The supportive margin contributions from sales growth and productivity improvements are expected to be partly offset by higher raw material and freight costs, as well as continued strategic reinvestments and increased commercial activities. The outlook for the return on invested capital including goodwill is raised to 20%-21% and includes negative effects mainly from acquisitions. The free cash flow before acquisitions is raised and now expected at DKK 2.8 billion-DKK 3.2 billion, supported by higher sales and an improved operating cash flow. With this, I'll hand back to Ester for a wrap-up before we open up for questions. Ester, please. Thank you. Thank you, Lars. Please, turn to slide number 10. Thank you. We delivered a very satisfactory set of results for the first nine months of the year, with solid organic sales growth of 6% and a strong financial performance of close to a 29% EBIT margin. Consequently, we are upgrading our full-year outlook. We now expect organic sales growth of 5%-6%, an EBIT margin of around 27%, a ROIC including goodwill of 20%-21%, and a free cash flow before acquisitions of DKK 2.7 billion-DKK 3.2 billion. At our Capital Markets Day last month, we shared our growth-focused strategic agenda until 2025, including our ambition to double sales by 2030, and with a clear focus on prioritization, sustainability and profitability. As sustainability forms parts of everything we do, we are excited to share our thoughts and ambitions at the COP26 event next week in Glasgow, where companies, governments, regulators, and many other stakeholders come together to drive the world's climate position and agendas forward. At Novozymes here, we believe our biotechnology solutions provide answers to many of the pressing needs that the world is facing, and we will make sure our voice is heard, not only at this important event, but also beyond. By this, let's begin the Q&A session. Operator, if you could please go ahead. Thank you. Ladies and gentlemen, if you wish to ask a question, please dial zero one on your telephone keypads now to enter the queue. Once your name has been announced, you can ask your question. If you find your question has been answered before it's your turn to speak, you can dial zero two to cancel. Once again, that's zero one to ask a question or zero two if you need to cancel. There'll be a brief pause now while we register your questions. If you wish to ask a question, please dial zero one on your telephone keypad now to enter the queue. Once your name has been announced, you can ask your question. If you find your question is answered before it's your turn to speak, you can dial zero two to cancel. Once again, that's zero one to ask a question or zero two if you wish to cancel. Our first question comes from the line of Gunther Zechmann of Bernstein. Please go ahead. Your line is open. Hi. Good morning. Thanks for taking my questions. The first one is on the guidance. If I look at how you changed and increased the guidance throughout the year, you started 2%-6%, then 4%-6%, and now 5%-6%. So if I was a cynic, I would say that you have become not more optimistic but less pessimistic throughout the year. So my question is what would you need to see to become more optimistic as well? The second one, maybe for Anders on the household care side, could you just help us understand the two moving parts you highlight there between lower detergent volumes in Europe and to private label customers that have gone down? If I take Ester's comments from the prepared remarks that you expect that to continue in Q4, shouldn't we expect that to take four quarters to annualize? Or do you expect those volumes to be absorbed by other players that you may have exposure to? Thank you. Thank you. I'll answer your first question and then I'll pass it to Anders. First, we know you're not a cynic, so we're bringing, as we've always done, the best guidance based on how we read the market and how we embrace a very volatile dynamics that we're living. We started with 2%-6% because that was the way that we're reading it. Then as we move forward and firmly one quarter after the other, we narrow it to 4%-6%, and now we're bringing upwards 5%-6%. We're earning the trust of the results of the three quarters that we have behind us, but also the confidence of the work that we're doing from a lot of self-help, bringing innovation and capitalizing on 20% growth on emerging geographies, and then also capitalizing on a good market dynamics that will lead to an increased demand of many of our solutions that provide higher yield. It's a combination of both self-help, living in a market that continues to be dynamic, and then also in a market that we think, particularly in human health, in food and health, that there is high levels of inventory that we foresee this destocking in Q4. I'll pass it to Anders Lund that is also going to build up on the read on household care and the momentum that we're seeing in Q4 building on my answer too. Yeah. Thanks for the question, Gunther. Europe is impacted by a few different reasons, and that's also why we call it out. First of all, the market, according to Nielsen, is down 5% on laundry for the first nine months. That impacts our business. The reason behind that impact seems to be that consumers are washing less. They are staying more at home, and from that perspective, they're washing less. Maybe the other thing that has happened this year compared to last year was that you may remember we called out that last year consumers were trading up. Now they're actually trading down, or you can say maybe some of that is neutralizing some of that up trading we saw last year. The last piece that we call out here on Europe is the two private label customers that's gone out of business. To the short-term impact, obviously we see that in our books. I don't expect this to be sort of a four-quarter annualizations. Others will pick up that volume. Consumers and consumer demand is of course the same regardless of these two players being out of the market. We are seeing it in this quarter and probably also in the next quarter in our books. Don't expect that to be something that will carry into next year. Thank you both. Thank you. Our next question comes from the line of Søren Samsøe of SEB. Please go ahead. Your line is open. Yes. Good morning. First a question on the implied Q4 margin of around 22%, significantly less than around 29% you reported in the first nine months. Just if you could bridge the gap, what's different in Q4? Second question is regarding the higher electricity prices. How do you see, or in general, the high input cost, how do you see that hitting you in Q4 and also next year? Also just tell us how much you had been impacted negatively on electricity prices if you had not been hedged in Q3. Thank you. I'll pass the word to Lars to answer both of your question on margin and also electricity and raw material costs. Yes. Thank you, Søren, for that question. To the first one on the implied guidance for Q4, you are right that if you sort of look at the Q4 EBIT margin, then whether we are sort of at the upper or the lower end of around 27% gives you sort of an EBIT margin for the quarter of somewhere between 20%-24%. That's of course lower than the 29% we have year to date. The difference we see here is a combination of two factors. One is that on our cost of goods sold, on our gross margin, we are still in the third quarter only to some extent impacted by the increasing input costs. They started to increase in the beginning of the year. With an inventory turnover of 5-6 months, we start to see that impact here in Q3. It will have full impact from Q4, when sort of we in April or so had reached the new level. We will have a higher impact of the raw material cost in the fourth quarter compared to the third quarter and also the first nine months, obviously, if you look at that comparison. The other thing is that, with the sales expectations for fourth quarter, there is also a less scale to sort of count on from the gross margins. Those two factors mean that we have a lower expectation for the gross margin in the fourth quarter compared to the first nine months. We also on operational expenses looking at an increased cost level in the quarter. It's a combination of continued investment in our commercial activities, in particular in emerging markets. We are also starting now to implement on our strategy, the Unlocking Growth, where we are investing in new capabilities to implement on this strategy. We are also seeing an increased cost for trial activity, be that clinical trials for our human health programs, but also some trial activity in the ag space, and for animal health. It's a combination of costs that we see drive future growth in emerging markets. Obviously the other costs will also drive future growth, but they are more discrete in nature, and therefore, when you sort of take the second part of your question looking at next year, this, the fourth quarter operating margin should not be seen as the new level going forward. We are still preparing our plans for next year, we're not going to provide any guidance. I'll just remind you what we said at the launch of our Unlocking Growth strategy, that we have a long-term ambition now of being at 26% or above, and with no single year below 25. That's still how we see it. Your second question on input costs. I think as I said in my first answer here, we are still to see the full impact of those raw material costs, and they will be here in our books from the fourth quarter. We have them in our balance sheet now, and so we know they will come. I... To give you an idea of the magnitude, it is probably around a one percentage point impact or so of raw materials. That's before we then continue to see the improvements from productivity and scale, as we have had, you know, for years and years. That 1% is sort of around the raw material in isolation. Electricity, that's of course a component of our cost of goods sold. We do hedge that energy cost, and then therefore the impact is limited in our numbers in Q3. It is sort of included in the one percentage points of input cost that I spoke to on the margin. I think that is a pretty elaborate outline of the impacts we have from these input costs and the Q4 margin, and also sort of our thinking around what that means going forward. Okay. Thanks for the answer, Lars. Thank you. The next question comes from the line of Lars Topholm of Carnegie. Please go ahead, your line is open. Thank you, first congrats with another strong quarter. A couple of questions on my side. In connection with the answers to Søren's questions just now, I assume part of the input cost inflation will be passed on. I wonder to what extent this would actually boost your organic growth, simply because it gives an opportunity for some pricing impacts that you may not always have. Then I simply have two household questions on numbers. If I look at R&D costs for the quarter of DKK 435 million, that's the lowest in many years. I wonder if there's a specific one-off reason for that, or if you, Ester, have just fired a lot of your scientists and are gonna do with fewer going forward. Likewise, if I look at the Q3 cash flow statement, there are DKK 690 million in non-cash items. I know that DKK 353 million is depreciation and amortization. I wonder what the rest is. Thank you. Thank you, Lars, and thank you for the congrats of the quarter. Yes, it's been a good quarter, and we feel very pleased about it. I'll answer your first question, and then I'll pass it to Claus to ease your concerns on our commitment to R&D, and then Lars build up on your question on cash flow. To your question on price and the very rapid demand dynamics that we see. We do see, as everybody else, the increase on commodity prices, and that affects both sides of our envelope. As Claus mentioned, increases on raw materials, but also changing dynamics on many of the markets that we present. We're capitalizing on that momentum on two ways. From one side, many segments like agricultural, like animal feed, like, starch or grain, the higher commodity prices, they lead also to a higher value that our solutions bring in. We're capitalizing there on stronger demand, and of course also, collecting our fair share of that value, through price. As always, as we mentioned many times, the way that Novozymes maximizes its growth, which is our main focus and priority, is through top line growth, it's through volume growth, it's through penetrating share, and by bringing the right price for our innovation. That's what we're continuing to deliver. With that, I'll pass it to you, Claus. Thank you, Ester, and thanks Lars also for the question. If you recall in the spring, we did streamline the R&D organization. As you also know, in connection with Capital Markets Day, we did also announce that we'll keep a level of investments in R&D high at 13%. We have in this year been shifting some of these activities, streamlining in the beginning of the year. Also, we are high on the sales guidance of the year. Relatively you could say when you compare numbers on ratios somewhat lower on the R&D's expenditure. We do expect that some of these investments that we carry going forward will be in R&D, keeping the 13%. the DKK 435 million, is that a run rate going forward or is it going to be higher? We would expect it to follow the line of sales growth. Growing R&D and staying within the 13%. That I didn't understand, Claus, with all respect. DKK 435 million, is that a number we should expect going forward or will it go up? It will go up. Thank you. Thank you. So- Our next question comes. Oh, sorry. Yeah, there was one more question. I will take that on the cash flow and the reversals with no effect. As you say, Lars, the key component of that is depreciation and amortization of DKK 353 million that you can see in the accounts. The second component is our corporate tax. You can also see that in our accounts. That's DKK 211 million for the quarter. Those are elements of the P&L, but they are not paid at the same amount in the same quarter because they are typically paid, for instance, in Denmark, corporate taxation is paid twice a year. The last component of sort of significance is unrealized gains and losses from exchange rates. Those are the three main components in that DKK 690 number of Q3. Thank you very much for answering my questions. Thank you. Our next question comes from the line of Alex Jones at Bank of America. Please go ahead. Your line is open. Excellent. Thank you very much for the opportunity. Two questions, if I can. The first one following up on the household care question. You mentioned the dynamics in Europe. Is that something that you believe could spread to other regions or do you think that's an isolated phenomenon in Europe, in terms of sort of volume decreases for the market? The second question on the ag and animal division. I think if you compare this quarter to 2019, you're still slightly below 2019 levels, despite perhaps a better market environment. Could you just give us a bit of color around what's happening there and how we should think about that into next year? Thank you. Anders and Tina, could you take the questions please? Yes. I think what's going on in Europe. Again, we have to go back to taking a look at what happened in 2020. Here Europe was one of the reasons we also called out, where we really saw this both consumer spike in demand, and we also saw the premiumization more pronounced than we did in other parts of the world. From that perspective, that reversal cannot happen because it did not happen in 2020, especially in the emerging markets. I do not expect that will be something that will carry into other regions going forward. Again, I look at it as an isolated thing, and I actually look at half of what's going on in Europe relates to what's not happening this year, but what actually happened last year. Thanks, Alex. On the agriculture and animal health and nutrition question, and the performance versus 2019. Overall, our business is doing as expected. What you have to look at is that we have a number of very strong drivers behind this. Ester talked a bit about it earlier with the high commodity prices, which is also supporting that segment and increasing the value of our solutions. On top of that, innovation is an important driver. We launched some three products in ag this quarter, and also in earlier quarters we on the livestock production side have launched a number of also exciting products. For example, the ProAct 360 as well as the Balancius. Underlying, we see a good growth there. Much has happened since 2019. I think going back and talking to that specifically, I think it's more important to look ahead and focus on the drivers we have there. The drivers here are the underlying need for a more healthy planet. It is the innovation, and then it is also our go-to-market setup, which we have changed quite significantly as we you could say moved away from the one partner setup which we had before on the agriculture side. That's also why we have the new launches in order to support that more direct go-to-market model which we have in agriculture. I hope that answers your question. That's great. Thank you. Thank you. Our next question comes from the line of Thomas Wrigglesworth at Citi. Please go ahead. Your line is open. Hi, thank you for taking my question. Just the one, please. Just some comments around the strong performance in food, beverage, and human health, and then it came in a little bit stronger than we expected. I think it's down to inventories and customer energy. Just some comments around what makes you think that the fourth quarter inventory that the customers will come down, and is there a potential for that to be pushed out to 2022, for example? Just trying to understand the different dynamics sequentially. Thank you. Thank you for your question. Anders, could you please answer it. Yeah. Just a few perspectives of the strong performance. It's driven by strong commercial execution launches, very strong emerging market penetrations. It's also built on a recovery in brewing, and then we're seeing, especially in our baking business, that there are some ingredient shortages in the supply chain that has also benefited our business. The reason we call out and we expect the performance to come down a bit from the very, very high level we are now is that we know for a fact that a few of our large customers, they are running with elevated inventory levels. Already now here in October, we are seeing that leveling. I think that's a good indication that our expectation and what we communicate here is right. The other piece, which is again a little bit more speculative, but the demand in the food and beverage space right now is very, very high. We see all food and beverage companies coming out with very high growth rates. At least we do not believe that level is sustainable. Will that be happening in Q4, or will it happen in Q1? I don't know at this stage, but we expect some of that momentum to be taken away. I'm absolutely sure that we are not looking into a sort of an underlying food and beverage market long-term that will be double-digit on the market side. We'll probably come down to levels which are lower than that. Again, that's built into our Q4 guidance. Understood. Thank you. Thank you. Our next question comes from the line of Charles Eden at UBS. Please go ahead. Your line is open. Good morning. Thank you very much for the questions. Two for me, please. You mentioned the uptick in raw material headwind in Q4 of around 100 basis points, I think, Lars. Are you able to discuss the scale of the headwind that might bring in 2022? Because obviously one would expect it to be higher than that, given the higher value of inventories on your balance sheet, as you mentioned. But how much higher? Are you able to help us in any way on that? Then my second question is on the pricing pass-through. Just on the dynamics of that, is it contractual? Do you have annual negotiations with customers? Is it a bit of both? Obviously, you talked about the input cost inflation, but are you able to pass through some of the higher energy cost headwinds to customers as well? Thank you. Thank you, Charles. I'll answer your question, and then I'll let Lars build on your raw material question, of course. Regarding price, we price for value. That's the way that we set the price of our solutions. The majority of the work on price is when we launch the new solution, when we bring out the product in the market and ensure we get our fair share of value of that innovation that we're bringing in. Then through the life cycle, it's this price elasticity across the life of the product on ensuring that we get our fair share, deserved portion of the value that we bring in. Today, in the environment that we live, we see two aspects. One is an increased need of our solutions, especially in areas where they bring yield enhancements, such as starch or such as agricultural, as Tina mentioned. That, there we are mainly capitalizing on that momentum linked to growth for higher volume and higher demand of our solutions. Then there is also the space on what is our fair share of value, and can we bring that with a higher price? As contract sunset, because yes, we do have contracts in place for a portion, which is not irrelevant for our portfolio. As contract sunset, we bring in the negotiations with our customers, then we ensure that we get the fair share of value from the value that we bring in and the value that our solutions enable. It's a dynamic behavior. The majority of it's set at the beginning, and then also that we leading from both volume growth and from that price readjustments. Lars? Yes. On the raw materials and the input cost, my comments on the 100 basis points of impact in Q4 was also meant to be the level that with the current costs would be the impact in the coming quarters also going into 2022. I qualified that statement also in my earlier answer by saying that when you then look at the total gross margin, then you should also consider our continued efforts in improving productivity on a unit cost level and of course the impact from margin. The 1% is sort of an annualized impact, if you will, from the higher input costs. Okay. Thank you. If I read that correctly, what you're saying is gross margin should be down less than 100 basis points next year because you have some offsets to that. Are there other- Mm-hmm. Headwinds to bear in mind to margins for next year? That would be our ambition, yes, because we have continued productivity improvements in our plans. This is too soon to sort of guide specifically for 2022. Everything else being equal, of course, we have an ambition to reduce the impact from higher input costs from continued improvements from productivity. That's clear. Thank you so much. Bye. Thank you. Our next question comes from the line of Sam Perry at Credit Suisse. Please go ahead. Your line is open. Hi, everyone. Just on food and bev, you just mentioned that the medium-term growth is unlikely to remain double digit. However, is it fair to assume that we can still expect it to outgrow household care and the group? Given that, can we probably expect the proportion of R&D and management time allocated to this division to increase? I'll pass the question to you. Tha nks for the question. Anders Lund. Yeah. Let me just clarify. I think what we're calling out is the 15% growth that we're seeing right now is probably not sustainable and definitely not in Q4. Food and beverage is a segment that we're very excited about in Novozymes for a lot of reasons. One is that the whole health trend is very very relevant and predominant among consumers. The second one is the sort of plant-based journey. From that perspective, this is an area that will receive more management attention and also more resources going forward. You may remember we called out these customer co-creation centers that we are doing in Novozymes. A lot of the reason behind that investment actually will support our food and beverage business. Definitely it's a very exciting area. It's also an area that we expect will outgrow household care in the longer run. Great. Thank you very much. Just on household care, are you willing to break out the magnitude of the issues with the two customers? We're not calling out specifically what the magnitude is. We're calling it out because it's meaningful, and it's part of the reason why we are bringing down our guidance to flat. Thank you. Thank you, Anders. Also thank especially for building on our commitment to Unlocking Growth, on our commitment to science, on our commitment to continue to invest in setting the foundation of what is the future of Novozymes. I'll. I think we have time for one last question. Thank you. That question will come from the line of Sebastian Bray at Berenberg Bank. Please go ahead. Your line is open. Hello, good morning, and thank you for taking my questions. I would have two, please. The first one is on the rate of growth in household care, excluding the one-off impacts mentioned for Q3. I'm in particular interested in the freshness platform. Back 3-ish years or so ago, Novozymes was talking about DKK 1 billion of peak sales. Has this product performed in line with the expectations that you had or that you had of it 2 to 3 years ago? My second question is on CapEx. Food and beverage has grown very nicely. I suspect that there might be some additional capital allocated towards it. If I take the guidance as it stands for the construction of the plant-based facility in the U.S., and the generally higher level of investment guided at the CMD, is about DKK 2.7 billion a reasonable number for 2022? Thank you. Thank you, Sebastian. I'll pass the first question to Anders and then let Lars build up on the capital. Don't forget our global footprint and our versatility and ductility from our assets that they support more than one single segment, and also our capability to continue to bring more capacity from our existing footprint by innovation and through science. On the freshness part, we as just to remind everyone that we have only launched this technology up until now with one customer. A few small ones is getting on the broad market solution. On the exclusive product, we are on the plan and expect exactly where we expect it to be on freshness. On the CapEx, for now, I'm going to stick to what we shared with you at the Capital Markets Day that we foresee a bit higher level of CapEx to sales in this strategy period at around 10% of sales. Then on top of that, we are constructing the facility in Blair for our advanced protein business. In total, that project is around DKK 2 billion. It will be constructed over the next couple of years. Then the exact timing of it in the individual years, we will see, and we will come back with specific guidance on 2022 when we announce our full year results end of January. That is helpful. Thank you. If I may just probe the statement on in line with expectations for freshness. I appreciate that with the single customer, the product may be in line with expectations, but is the potential rollout of variants to other customers in line with the timing expectations that you originally had 2-3 years ago? Yes. Timing-wise, we are in line both with what we're coming out with now, but also what we have in the pipeline. That is helpful. Thank you for taking my questions. Thank you very much for all your questions, and then looking forward seeing you, many of you face-to-face in the coming days and looking forward to meeting you first time face-to-face. Wishing you a very nice day.