Good day. Thank you for standing by. Welcome to the Scandinavian Tobacco Group Q1 results call for 2021. At this time, all participants are in a listen only mode. After the presentations, there will be a question and answer session. To ask a question during this session, you will need to press star one on your telephone. I must advise that this conference is being recorded today on Thursday, the 6th of May 2021. I would now like to hand the conference over to your first presenter today, Torben Sand. Please go ahead. Yes. Good morning. Welcome to this conference call in relation to our financial results for the first quarter of 2021. Please turn to page number two. My name is Torben Sand, Head of Investor Relations of the Scandinavian Tobacco Group, and I am, as usual, joined by our CEO, Niels Frederiksen, and our CFO, Marianne Rørslev Bock. The agenda for this webcasted conference call is the highlights for the first quarter of 2021, including an update of Agio. Following this, we will give you the overview of the performance in our three commercial divisions and the group, including an update on key financial developments. Finally, we will take you through the outlook for 2021 and take your questions at the end. Before we start, I ask you, as usual, to pay attention to our disclaimer on forward-looking statements in the back of this presentation. With this, please turn to slide number three, and I will leave the word to Niels. Thank you, Torben, and a very warm welcome and good morning to everyone on the call. Overall, in the first quarter of the year, Scandinavian Tobacco Group delivered a stronger than expected financial performance, driven by higher than anticipated net sales and synergies relating to the Agio integration. The quarter was, as expected, impacted by timing of orders, which makes a direct comparison to the first quarter of last year more difficult. The key financial highlights are, net sales grew organically by 12.5% to DKK 1.9 billion. EBITDA before special items was DKK 527 million, displaying a 49% organic growth versus last year. Adjusted earnings per share more than doubled to DKK 3.4. Free cash flow before acquisitions was DKK 89 million, 27% lower than last year. Return on invested capital improved to 10.7% against 7.2% last year. Demand for our products continued to be driven by changes in consumer behavior impacted by the COVID-19 pandemic, with higher tobacco consumption across many product categories and markets. The impacts have turned out to last longer than originally anticipated. However, the strong net sales performance is also a result of our efforts in improving the customer service offerings in the handmade cigar category, as well as the launch of the Forged Cigar Company. Furthermore, the better than expected results are a function of the intensive work we have delivered in improving our cost efficiency and by a fast and dedicated integration of Agio Cigars. The integration of Agio Cigars is progressing ahead of plan, with cost savings exceeding our original expectation. As an example, the headcounts required have turned out to be lower than anticipated. We now expect savings in 2021 to be about DKK 100 million, compared with the previous expectations of between DKK 70 million and DKK 80 million. The total net synergies to be achieved by the end of 2022 is revised up by DKK 25 million to a level of DKK 250 million. We are very excited about having made this important acquisition, which already today adds significant value to Scandinavian Tobacco Group. The next important steps in the integration plan is the integration of production facilities with the intent to close down three of our factories during the year. The closures are also driving some of the special costs that were already expensed in 2020 and which will impact the 2021 numbers, especially the cash flow number. Based on the stronger than expected first quarter and the outlook for the remaining part of the year, we are raising our full year guidance. Due to the unusual low transparency for the full year, we are introducing a range in the guidance. At the end of this presentation, we will give more details on the guidance for 2021, but the headlines are, organic EBITDA growth in the range of 12%-18%, up from previously more than 7%. Free cash flow before acquisitions in the range of DKK 1 billion-DKK 1.3 billion, up from more than DKK 1 billion previously. Adjusted earnings per share growth of more than 25% versus previously more than 10%. Based on this overview, I will now leave the word to Marianne, who will take you through the recent developments by division and give you the financial overview. Please turn to the next slide. Thank you, Niels. The high consumption of handmade cigars continue to benefit our division, North America Online and Retail. The division reported net sales of DKK 564 million in the first quarter, an increase of 15%, composed by a 26% positive organic net sales growth and a negative exchange rate effect of 11%. The dynamics behind the strong performance in net sales are the same as in recent quarters and since the outbreak of COVID-19 pandemic, with the overall increase in demand in handmade cigars and the shift of consumers to online platforms continuing. Our North American online channels continue to experience an increase in the number of active customers, as well as improved customer retention rates, which both are important drivers for organic growth rates. Part of the increased consumption relates, as previously mentioned, to more smoking occasions. We will again emphasize that a substantial part of the strong performance is also a result of our intensified focus on improving customer service. For example, by upgrading our website platforms, extended consumer profiling, introduction of a club model, and many other initiatives to professionalize the division further. EBITDA before special items increased by 48% to DKK 99 million, with an EBITDA margin before special items of 17.5% versus 13.6% last year. The margin improvement was driven by an improved gross margin reflecting low promotional spend and scale benefits, as continued efficiency improvements lowered the OPEX ratio compared to last year. The three newly opened super stores in Fort Worth, Texas, and Lutz and Tampa in Florida have performed well since the opening but are still not fully up and running due to local restrictions. Please turn to slide number five. Looking into 2021, we expect the high consumption of handmade cigars will continue, with growth rates substantially lower than in recent quarters, as consumption started to accelerate during the second quarter of 2020 and onwards. Although uncertainty into the second half of the year remains high as visibility is low, we have, in our base case scenario, assumed only a slightly positive organic net sales growth during the remaining year. We expect our online business will be able to maintain a large part of the new active customers who have either entered the category or engaged with our online platforms. We also expect that our retail network will deliver growth over the year as restrictions are being lifted. Overall, we expect that North America Online and Retail will deliver positive organic growth, not only for the full year, but also in the second half of 2021. The online business has experienced an increase in promotional activities from competitors in recent months after unusually low activity throughout most of 2020. Consequently, we do expect that marketing expenses will increase compared to last year. EBITDA margin is likely to decrease compared to 2020. In the end of the presentation, under the detailed guidance discussion, we will talk through the different scenarios anticipated in the low as well as the high end of the guidance range we have introduced. With this, please now turn to slide number six. In the first quarter of 2021, the division North America Branded and Rest of the World, as expected, recovered from the soft fourth quarter 2020, driven partly by timing of orders. The reported growth in net sales was 17% to DKK 693 million, composed by a 23% organic net sales growth and a 6% negative exchange rate effect. For the first quarter 2021, the development was driven by the continued strong demand in handmade cigars and smoking tobacco, especially fine-cut tobacco. North America Branded and Rest of the World also include our global travel retail business. It remains to be negatively impacted by travel restrictions and border closures. The launch of the Forged Cigar Company, the new national distribution network, has been well received and has come off to a good start. EBITDA before special items increased by 56% to DKK 274 million, with an EBITDA margin before special items of 39.5% versus last year of 29.6%. The margin improvement was realized with an improved gross margin driven by product mix and price increases. An improved OPEX ratio, which decreased due to lower expenses due to vacancies, freight and travel, and general efficiency improvements. Please turn to slide seven. The increased consumption of handmade cigars will obviously also benefit North America Branded as the largest brand owner in the U.S. during the remaining year. The division is expected to deliver positive organic net sales growth driven by the same dynamics mentioned for North America Online and Retail. Travel and tourism supporting our global travel retail business is expected to return to more normal levels in the second half of the year. We are maintaining a higher inventory position than normal to ensure stable supply during the uncertain demand situation we are in, impacting our cash flow position for the year. This brings us to the update for the last division, Europe Branded. Please turn to slide eight. During the first quarter, the total market recovered slightly but remained impacted by COVID-19 in most markets. The integration of Agio has, as Niels mentioned before, performed very well and is ahead of plan. The volume market share in key markets has improved slightly, which is an important indicator for the successful commercial integration we executed last year. For the division Europe Branded, both the reported and organic net sales decreased by 7%. The termination of a distribution agreement impacted negatively by 2%, whereas the remaining decline can be explained by continued impacts from COVID-19, hoarding in some countries ahead of excise increases in the first quarter of 2020, and timing of orders. The market share within machine-rolled cigars in our most important markets improved slightly and was 33.3% versus 33.1% in 2020 and 32.7% in the first quarter of 2020. EBITDA before special items increased by 69% to DKK 179 million, with an EBITDA margin before special items of 28.5% versus 15.7% last year. EBITDA before special items was negatively impacted by a fair value adjustment of Agio inventories in the first quarter of 2020 of DKK 39 million. Excluding the fair value adjustment, the EBITDA margin would have been 20.8% in the first quarter of last year. The strong improvement is a result of savings from the Agio integration Fueling the Growth, but also improved pricing. Please turn to slide number 9. Our focus within Machine-rolled cigars remains to improve our volume market share positions at the same time as optimizing the value share further through effective price management. Overall, the division is expected for the full year to realize a slight decrease in organic net sales due to the loss of the mentioned low-margin European distribution contract. Furthermore, the next steps of the integration of Agio Cigars remain the key priorities and will be announced about DKK 100 million in expected synergies in 2021, where most will impact the division Europe Branded. Profit margins are expected to improve from the level seen in 2020. For this, please turn to slide number 10, and I will give you selected financial highlights for the group. For the first quarter 2021, net sales increased by 7% to DKK 1,833,000,000. Gross profit before special items increased by 22%, and EBITDA before special items increased by 62% to DKK 527 million. The increase in net sales was composed by a 12.5% organic net sales growth and a 5.2% negative contribution from exchange rate development, primarily the US dollar. The increase in gross profit was driven by the organic growth in net sales. The gross margin was increased by 6.2 percentage points to 50.7%. 2.2 percentage points of this improvement relate to the fair value adjustment of inventories in Agio Cigars in the first quarter of last year of DKK 39 million. Excluding this fair value adjustment, all three commercial divisions delivered improved gross margins. The EBITDA margin before special items was 28% in the first quarter versus 18.5% last year. Excluding the fair value adjustment, the margin improved by 7.3 percentage points, driven by the gross margin improvement, Agio integration synergies, and underlying cost efficiencies across our operations. Special items was negative by DKK 17 million, with DKK 5 million expense in relation to integration of Agio and approximately DKK 10 million expense in relation to changes in our manufacturing footprint. Special items was negative by DKK 155 million in the first quarter of 2020, primarily impacted by Agio integration costs. Adjusted earnings per share was DKK 3.4 per share, compared with DKK 1.6 per share, more than a doubling. The increase in percentage points is inflated by the fact that the first quarter is a small quarter. Finally, the free cash flow before acquisition decreased by DKK 33 million to DKK 89 million for the quarter. Working capital had a negative impact on the cash flow by DKK 280 million, with significant impact from a planned higher level of inventories of finished goods, including excise and tax stamps. The expected normalization of the level of payables partly deferred as a consequence of inventory-related purchases. With this, now please turn to slide 11. During the first quarter, the net interest-bearing debt increased by DKK 116 million to DKK 3,390 million. Compared with the interest-bearing debt by the end of the first quarter of 2020, it decreased by DKK 1,064 million, driven by the underlying cash flow generation. The leverage ratio declined to 1.7 times by the end of the first quarter, compared with 1.8 times at the end of 2020. As part of our financial policy, we have stated that any excess capital, taking into account potential acquisitions and other liquidity needs, will be returned to shareholders. As part of this commitment, we initiated a share buyback program in August last year with a size of total value of DKK 300 million. This program was finalized in February, and almost three million shares were repurchased. The formal procedure to cancel two and a half million of the shares not required for the long-term incentive program is ongoing and will be concluded shortly. This will bring the share count down to 97 and a half million shares. At the AGM 14th April 2021, it was approved to pay six and a half DKK ordinary dividend per share, implying a payment of about DKK 625 million, and it has also been decided to execute another share buyback program of up to DKK 600 million with a purpose to adjust the capital structure. Including the full size of the current share buyback program and the dividend payment, Scandinavian Tobacco Group will distribute almost DKK 1.2 billion to its shareholders during 2021. Now, please turn to slide number 12, and I will now leave the words back to Niels. Thank you, Marianne. Before going into detail with our revised guidance, I would like to give you some comments on the ongoing developments on the regulatory side, especially so in the U.S. The Biden administration has reignited the focus on previous plans to ban certain flavors in tobacco products and to reduce the nicotine content in combustible cigarettes and are drawing many headlines. Hence, the FDA recently announced its plans to ban menthol in cigarettes, including roll your own, and to ban all characterizing flavors in cigars. Though these plans and proposals will certainly take years to implement, it is important for me to remind you that we still only have a limited exposure to flavorized tobacco products in the U.S. The share of net sales of flavorized cigars constitute about 5% of our group net sales, and should the bans be implemented, we do expect to be able to migrate part of the flavorized cigar consumptions into our non-flavorized cigar portfolio. Finally, the so-called MOMMA's Act bill, referred to under various names over the years, have been reintroduced. The bill, aiming at increasing excise taxes on all tobacco products, including cigars, has been introduced several times in the past five years, and it has never passed into law. At present, we believe the chances of the MOMMA's Bill passing remain remote also for this year. That said, a possibility of federal tobacco tax increase does exist, as tobacco tax increases remain popular with this opposition. Turning to Europe, the two major pieces remain unchanged. The Tobacco Excise Directive, with potential revisions being the tax differential between fine-cut and cigarettes or cigarettes and cigars, renewed minimum excise duty rates, and taxation of new product categories. The Tobacco Products Directive, where the issues most relevant to the Scandinavian Tobacco Group are potential ban on characterizing flavors for our product categories and certain ingredients, as well as potential EU introduction of plain packaging for some product categories. There's not much new to mention with the work on both directives ongoing and a formal draft proposal only expected late in the year or next year. With this, please turn to slide number 13. I'll now turn to the expectations for the full year and our revised financial guidance. As the first quarter numbers and the first indications of our April performance suggest, we've had a strong start to 2021, as both net sales and synergies from the acquisition of Agio Cigars exceed expectations, we have raised the full year guidance. I would like to emphasize that uncertainty remains high. The COVID-19 pandemic continues to impact business performance in most of our markets, and is expected to have implications for consumer behavior and overall tobacco consumption also during the coming quarters. As the visibility of the market development remains low with some societies opening up while others reintroduce restrictions, we are unable to predict consumer behavior and consumption with a normal level of accuracy. Given these circumstances, we've decided to introduce a range for our expected organic EBITDA growth and free cash flow performance. We now expect organic growth in EBITDA in the range of 12%-18%, up from previously 7%, free cash flow before acquisitions in the range of DKK 1 billion-DKK 1.3 billion, up from previously more than DKK 1 billion, and adjusted earnings per share more than 25% versus previously more than 10%. The high end of the guidance range for organic EBITDA growth is based on a positive organic net sales growth during 2021. In this scenario, demand for handmade cigars in the U.S. remains strong across all channels, also in the second half of the year, impacting both North America Online and Retail, and North America Branded and Rest of the World. Furthermore, a gradual normalization of the European markets is assumed with a continued opening of societies positively impacting volumes in Europe Branded. In this scenario, organic net sales growth will exceed 5%. The low end of the guidance range assumes that net sales for the group equalizes in the second half of the year with consumer behavior in the U.S. market reversing and the restrictions and border closures in Europe prevailing. Independent of the level of growth in net sales, organic EBITDA growth is expected to be supported by additional synergies from the integration of Agio Cigars of about DKK 100 million, previously DKK 70 million-DKK 80 million, and the full year effect of Fueling the Growth. The guidance range for free cash flow before acquisitions is based on the expectations for EBITDA. The free cash flow before acquisitions is still expected to be impacted by relatively high investments in production footprint and digitalization initiatives, with a total CapEx expected at DKK 410 million, as well as a negative impact from payables in the level of DKK 150 million due to timing effects between 2020 and 2021. For the full year, the expectations for total CapEx and working capital movements can be impacted by decisions to delay investments and to change inventory positions should COVID-19 or the development in consumer demand across our product categories necessitate that. The guidance for the adjusted earnings per share of more than 25% compared with previously more than 10%, includes a positive impact from the share repurchases of around DKK 0.4 per share, and a negative impact from currency developments. As always, the guidance and assumptions are based on current exchange rates. This concludes our presentation for today's call. I'll hand the word back to the operator and take questions. Thank you very much. Thank you. If you wish to ask a question over the telephone, please press *1 on your telephone and wait for your name to be announced. If you wish to counter that request, please press the # key. Once again, it's * and 1 on your telephone if you wish to ask a question. Your first question today comes on the line of Mathias Nielsen of Nordea. Please ask your question. Thank you very much. Starting on the positive note, I'm a bit surprised about the large guidance upgrade. It's less than two months since you handed out the initial guidance. What is it that is actually triggering this? Is it March and April that has been extremely strong compared to your expectation, or is the earnings predictability just extremely pure? What is the story behind this massive guidance upgrade only 55 days or 56 days after the first one? Let me try to answer that, Mathias, and thanks for the question. We knew that the Q1 would be a strong Q1, but Q1 was actually stronger than we expected. We also saw Agio synergies coming in much stronger than we expected. I think the difficulties that we have in the situation that we are in is to predicting the future. When we went to the market, as you say, 56 days ago, we were trying to predict how we would look into the second half, but we actually need the spring months, so April, May into June, to really understand the handmade market in the U.S. Based on the knowledge that we had at that time, we believed that we would be able to exceed the 7% EBITDA growth. That was our guidance at that point. Looking at the very strong Q1 and reassessing how we think that Q1 and the remaining quarters will pan out, we decided to upgrade the guidance and introduce the range. We can talk a little later also on the upsides and downsides within that range, because I hope the range also indicates to all of you the difficulties that we have predicting the performance in the remaining year. I think it is important to understand that we cannot Only build the guidance on the Q1 performance that has to do our forecast for the remaining year, which we take back in April. Great. Thanks a lot for that. Maybe follow up on that, or at least related to that. Now we had a strong 2020, and now it looks also like 2021 will be very strong. What should we think about 2022? Maybe if you take your high end and the low end range and play along with those scenarios, what is the expectations for 2022? Could you maybe give us a little color on what you think about that? That is also a question we are obviously looking at. We are clearly not guiding 2022 at this stage. I think that the factors that we are considering or reviewing is some of the same that are affecting 2020 and 2021, and that is what is going to happen to the handmade demand once COVID-19 normalizes. Also, how quickly will COVID-19 normalize? Clearly, we expect that some of the impact of the tailwind we've received from COVID-19 will be impacted potentially in 2022. I think it's important to remember that the engagement we've seen with handmade cigars in 2020 and 2021 indicates that if we return to decline rates for the handmade, which we assume we will, we think it will decline from a higher level. The second thing which is important to remember is that our online business has seen a significant inflow of new active customers. We are seeing increasing retention rates. We are seeing increasing average order values. These are all elements that will support us also going into 2022. Of course, it's too early for us to predict, but these are some of the key factors we're looking at. Then we are continuing to drive our efficiency agenda, which will of course also support our earnings capability going beyond. Just when you say decline, that you expect a decline, is that in organic sales, or is that in volumes, or is it a mix? If we look at our handmade category in the U.S., we previously said we see it declining 1% to 2% maybe every year, then offset by price increases. We think that that decline rate is going to be, let's say, what we will return to. That's our best guess at the moment. We are investing also in the course of 2021, more resources into understanding the U.S. consumer and the behavior. Hopefully in the course of this year, we will be able to give you more, let's say, concrete indications of how we see demand also in 2022. Great. That was very clear. The last question. With the strong integration of Agio, more acquisitions like this would probably be nice if you ask investors. I guess you would not say anything about the potential new deal at this call. Maybe you can put a few words on whether the pandemic has made it more or less easy to strike a deal, and whether you are comfortable with closing a new deal at this point in terms of internal capacities. Obviously, as you say, we like acquisitions, and Agio is a really good example. I think also we are actually very pleased with the Thompson acquisition we did back in 2018. We actually don't see the pandemic in itself creating more interest in engaging with us. I think that the main reason for that is many of them are probably in a good situation like we are. We do believe that when we get to 2024 and everyone have to comply with Track and Trace, which is the new EU legislation, we hope that that's a piece of complicated legislation that may lead some people not to want to do the investments. Here I can remind you that we are quite experienced in doing this. We've already implemented it for our fine-cut business. We've also implemented it for part of our cigar business where we're exporting to Russia. It's an area where we feel we have a good advantage. It is difficult to predict, Mathias, we will look at the acquisitions when they're available. We have to try to work with them when they are there. We don't think so much about whether we are ready or not. We think more about if it's available, how do we then buy and integrate it best possible. Thank you. That sounds like you are ready. Thank you very much. That was all my questions. Thank you. Thank you. We do have two more questions at the moment. Your next question today comes on the line of Magnus Rasmussen of SEB. Please ask your question. Thank you very much. Thank you for taking my questions. I have a couple as well. Maybe starting with the U.S. A lot of retailers is talking about stimulus packages sort of improving their sales because the U.S. consumer has more money in their hands. Is that something that I don't see it written anywhere in your report. I'm just wondering how much of an impact you think that could have had on your business for the quarter? Well, I think that like many other categories, we can see that consumers are being good to themselves during COVID-19. We do see a trend towards buying more expensive cigars. This is not necessarily going from DKK 5 to DKK 25, but it's maybe notching up a bit. This is part of the reason why we are also seeing average order values going up. What we have also tried to do is to maintain a high level of new introductions, especially in the handmade market in the U.S., and we can see that also continuing to get a lot of good traction. Okay. Thank you. Mathias Nielsen, maybe the final one, if you look at our retail outlets, we can actually see that again, we have fewer consumers, but they are clearly spending more. What we call our average ticket or our average order value in the retail is also going up. It is the same type of mechanics. They are kind of spending a little less in the bar, but more on cigars. Okay. Another one to the U.S., more your retail business, I guess, where you are up 27% versus last year. It is clearly a combination of an increased demand, which you talk about, but it must also be an element of conversion towards online, which obviously gains you market share. Can you speak about, do you know what the split is between the two? The first quarter of 2020 had very limited COVID-19 impact in our online business. The big growth we see in online is primarily driven by easier comparisons for that part of the business. Again, we talked about it before, the online business grew in 2020, I think around 20% in net sales, but we see quite big variations across the different months, and the first quarter of 2021 has been very strong, with 27%. What we are also seeing is that consumers are not continuing into online at the same speed as we go into the second quarter. This is exactly as expected. We see retail improving, and this is also what Marianne Rørslev Bock was referred to. The months of the second quarter is really an important point for the online business to understand consumer behavior also for the rest of the year. To what degree can we retain the new customers? We are sure that we'll do that to quite a large extent, to what degree do they take part of their spending and put it back into a regular retail outlet? Okay. Do you have any data suggesting how much demand or volume is up compared to last year? We do not have exact data on the total handmade market in the U.S., it is of course clearly up. We are not giving it a percentage at this point in time, it's clearly up by a noticeable amount. Okay. Thank you. A final question from my side. You established the Forged Cigar Company earlier this year. Could you maybe share a couple of thoughts on what's the reason behind this and how this will help your business going forward? Yes. Over the years, we have been debating whether we were able to support our quite wide portfolio of handmade brands optimally through one sales force. We reopened that discussion in 2020 when we saw a stronger demand for the category and decided to introduce the Forged Cigar Company. The Forged Cigar Company really deals with the part of our brands that are more lifestyle or more boutique-like. These are brands like La Gloria Cubana, it's Diesel, and also we took a brand back from an online retailer where it had been a dedicated brand for them, which is called El Rey del Mundo. We are using that secondary sales force to drive, let's call it our second line of more smaller but still high potential brands. It has received a very, let's say, strong response from the retailers. We are quite encouraged by that at this point in time. Thanks. Sorry, I was on mute. Thank you very much. I have no further questions. Thank you. We do have two more questions on the line at the moment. Your next question comes from Mads Rosendahl of Danske Bank. Please ask a question. Yes. Hi, thank you for taking my question. I just have one. It is relating to the FDA flavored cigar ban. You mentioned that it makes up 5% of your revenues. Could you give some color on the margins of that business compared to the rest of the business? You don't have to say the exact margins, but just Is it a very discount-like product or is it a high margin product? We don't actually have that data available, and I'm also not sure that you should be concerned about that. I think what we are watching is really what I refer to as the likely retention rate. We do have some experience with this because in our online business, we have certain states that have flavor restrictions. We can see that at least for the handmade category, the consumer is willing to switch to a fairly good extent. We don't have that experience for any of the other categories at the moment. Okay. Thank you. Thank you. We do have one more question at the moment, but as a reminder, if you wish to ask a question, it's star and one on your telephone. Your next question comes on the line of Gaurav Jain from Barclays. Please go ahead. Your line is now open. Hi, good morning. It's actually Pallav Mittal from Barclays asking on behalf of Gaurav Jain. Thank you for taking my questions. My first question actually relates to the North America business. Obviously, another strong quarter of organic growth. Can you just help us better understand the dynamics, both in pricing as well as the volume? Because obviously volumes are strong, but how is pricing in the market? You've obviously said that you expect promotional spend to step up in the remainder of the year. Are you seeing that already in April and May? I think if we look at 2020 first, we clearly saw pricing or promotion reducing or pricing improving in the online and retail business as competitive pressure went down. We also saw the same thing in our branded business where the need for promotional pressure was less. As we move into 2021, we are seeing that some of the promotion pressure is increasing again, it's still too early to predict exactly where we'll be for the year. We are expecting it to go up, the promotional pressure, and hence put a downward pressure on pricing. We certainly see, across the industry, let's call it a willingness to take price increases, also because everyone are facing pressures in their value chain, right? We all have the same issues with transportation and lead times and stuff like that. I think that when we look at 2021, the big question is going to be where do we end up on promotional pressure? We need another quarter to be a bit wiser on that. Okay. Thank you. Just moving to the European Branded Division. When you made the Agio acquisition, I remember one of the points was that you thought if you could grow market share, this could obviously lead to greater pricing power. You said already that you actually expect next year that, obviously throughout the year, that volumes will actually decline in Europe and continue to decline. Now that you're growing market share ahead of expectations, do you think you can increase that pricing power even more than you probably previously had thought when you initially made the Agio acquisition? It's certainly on our agenda, but as I always say, the balance between price increases and volume declines, it's a difficult balance to walk in the sense that we try to take as many price increases as we can, and we try to become more intelligent about how we take price increases by building our consumer understanding. We also think about what competition does, and we also think about what is the impact to the total market development when we take price increases. Obviously you can say that the stronger our market position is, the more courageous we get. I can't get any more precise than that, but we feel we are in a good spot in the European markets. We are in a better spot in the places where we have strong market share. Also because in the lower market share markets, we are more depending on activating our brands and pushing them. Here, COVID-19 have really reduced our ability to influence the market. Take a market like Germany, where there's been lockdowns for extended periods. We simply cannot do the, let's call it the in-store work that we would normally do. Thank you very much. That's very helpful. The final question from me, I appreciate the brick-and-mortar stores are still a relatively small part of your business. When we spoke about it in the past, you mentioned that it could actually potentially lead to higher gross margins as people spend more money at the bar, which is a higher gross margin part of the business for you. Are you seeing that already as stores reopen in the U.S.? The composition of cigar sales and bar sales is improving, but is still below historic trend. There's no doubt that consumers are, let's say, becoming more courageous, going back to the stores, but they are spending less time in the bar. They are in smaller groups. In the past, you may see eight, 10 people come in at the same time. Now they come in maybe two, three, four. It's not fully there yet, but the recovery of retail is encouraging, if you want, both on the cigar and the bar side. Okay. Thank you very much. That's very helpful. That's all the questions from me. Thank you. It appears there are no further questions at this time. Please continue. Well, then I will thank everyone for listening in and for asking questions, and wish everyone a continued good day. That does conclude our conference for today. Thank you all for participating. You may now disconnect.