Ladies and gentlemen, welcome to the Duni Interim Report. Today, I'm pleased to present President and CEO, Robert Dackeskog, and CFO, Magnus Carlsson. For the first part of this call, all participants will be in listen-only mode, and afterwards, there'll be a question and answer session. I will now hand over to Robert Dackeskog. Sir, please go ahead. Thank you. Welcome for today's Q4 presentation from us in Duni Group, from me, Robert Dackeskog, and Magnus Carlsson. This is our first report as we both started here, 1st of January. For me, it's great to be back in Duni. Really inspiring and, of course, also a bit challenging at the current situation we are in. Really nice to be back. The period in short here, of course, we're hit by the second wave of COVID-19 that has broken the recovery trend we had in Q3. The important markets we are operating in and the segments, they've been fully or partly closed, especially, I think in the middle of Europe, where we have Germany, Holland, Switzerland, Spain, France. Those has been very closed. A little bit maybe different from the Nordic area. We have a very strong takeaway trend that continues for us. We also had a good cost control and risk mitigation that has decreased our net debt in the quarter. Yearly, we have saved SEK 270 million, including the government support. We are, I think, very well-positioned for the future. We have worked on taking the next step in the reorganization, where we actually have put the two segments. They have become two business areas and with full value chain responsibility, which is the major difference there. There's a large uncertainty ahead here. The restrictions from Q4 are continuing, as we are. We'll see where that takes us. A little bit 2020 Q4 highlights. We have a net sales that is down by 24%. From SEK 1.6 last year- SEK 1.2 this year. Of course, as I said, the recovery trend from Q3 were interrupted here by the new restrictions. It's mainly the Duni segment, where sales dropped significantly as, of course, the restaurants are forced to close down on premises. The sit-down dining in the key markets isn't there. The retail channel is impacted, but less. Of course, it's less private parties are held, so we see a drop there as well, of course. The BioPak segment continues to grow as takeaway then benefits from the restrictions and restaurants move into more takeaway. If we look at the operating income, it's down SEK 148 million versus last year, from SEK 199- SEK 51. Of course, the lower sales of volumes in the Duni segment has generated limited fixed cost coverage for us. With cost reduction program, which we initiated in March 2020, the BioPak growth has supported our result in a positive way. If we look then at the full year, 2020 year to date, highlights, it's a little bit the same as we have in the quarter four, -19% on the net sales. From SEK 5.5 billion- SEK 4.5 billion this year, 2020. Here's the same, in a way, the Duni segment, much lower volumes that has dropped due to the restrictions. Despite we had a great start in the year in January, February, and mid-March, actually, before the corona hit us. The BioPak segment growth trend has boosted more by this, of course, because of the demand on take-away increasing. If we look at operating income for the whole year, we are down by SEK 384 million versus last year, from SEK 533 million- SEK 149 million. The volume decreases, of course, here as well. The high share of the fixed cost in the Duni segment has, of course, then impacted the result in a major way. We are having a major focus, of course, on adjusting the production capacity, cost reduction programs, and also gaining from government support, together with lower raw material cost and the BioPak growth has actually strengthened the result in that sense. I hand over to Magnus, who will go through both segments, Duni and BioPak. Thank you very much, Robert. Since this is the first time I have the honor to share our result as Duni CFO, I would like to very quickly present myself. My name is Magnus Carlsson, and although I am new as CFO, starting from January 1st, as Robert, I have been in the company for 10 years with various positions within finance and corporate development. Even though it's currently challenging times with the pandemic, I'm thankful to be part of the great journey ahead with Duni. I will now go through our two segments more in detail, and I'm starting with the Duni segment, representing our products like napkins, table covers, and candles. Already mid-October, it was apparent that a second wave were approaching and restrictions were being implemented throughout Europe. Our main customers, like restaurants and hotels, were once again forced to close. At least to adapt to a much lower demand, which naturally had spillover effects to Duni. Sales was down with 38%, from SEK 1.1 billion, as you can see, to SEK 670 million. The decrease was also broad across all regions and product categories, but more severe in the traditional restaurant segments with products like table covers and premium napkins. Retail channel, as well as some hygiene assortment, had a more stable development. Duni segment is characterized of own production. We have factories in Germany, Poland, and Sweden and so on. Consequently, with a vertically integrated value chain. This is for sure an advantage for us, in times with high volatility in volume, as we have seen with a sharp decline in the fourth quarter, we are hurt with limited coverage for our fixed costs, especially connected to our factories. We have been working very hard to mitigate this effect, and we try as much as possible to quickly adapt and to variabilize our costs. A cost reduction program, governmental support, and also additional external sales from our paper mill has contributed positively to the result in the quarter. If you look in 2020 in total, we can confirm that we have been severely impacted by the pandemic, with a reduction of the volume equal to almost one third. As I commented just now in the fourth quarter, the decrease is valid for all regions, but as you can see, it's particularly south of Europe with their sharp lockdowns that has been very much affected with a sales decline of almost 50%. Although this year has been very tough for Duni segment, I think the cost-saving program and the ambition for us to be more flexible with high volatility is something that we will be beneficial from once we see a normalized situation. If we now move over to BioPak, which is offering sustainable food packaging, we continue to see a strong demand. This is mainly driven by two factors, similar to the previous quarters. The first one is the shift from plastic solutions to more eco-conscious products on different fiber solutions. Second, that the industry are now actively looking for takeaway solutions and sealable solutions for their food packaging. Australia continued to indicate solid growth, started already in the third quarter, when the restrictions were lifted. There's been some local or regional lockdowns in Australia as well as New Zealand, but in general, a much better situation than we have seen in Europe. Fourth quarter shows an improvement in the result, I think both in absolute terms and as well as the operating margin, which is now close to 10% for the quarter. Looking on the complete year, we have seen a healthy operating leverage on the additional volumes, and that has consequently strengthened the margin with one percentage points. However, by the end of this year, we experienced difficulties in securing products from Asia due to the shortages on containers, and this is a result, you can say, from the change patterns in world trade. Consequently, it's not only Duni affected by this, but more or less all the industry and everyone purchasing from Asia. We are in a good position with close contact to freight forwarders as well as our Asian suppliers. Of course, this is something that we'll continue to work with in 2021. Thank you. All right. If we look ahead here on the COVID-19 situation and actions and outlook, of course, we continue with the cost control and risk mitigation. That's very important as we are in a little bit defense position still with the restrictions going on. We have a very strong liquidity, which is great. The board suggests to the annual general meeting in May 2021 that no dividend should be paid out. We have a very high focus here on helping our customers in this difficult situation, of course. We need to create new concepts, definitely in the take-away area. On the increased hygiene and outdoor products, there's a big potential, of course, and we saw that last year when the summer came. I think the demand to eat out and travel will still be there, of course, when it opens up, it's expected to boom once possible then. Of course, it's still very difficult to forecast, but the ongoing vaccination here gives good hope of a return to a more normal life for all of us. Yeah, we'll see when that happens. On a little bit broader point here, I think we are very well positioned for the future. The big trends here of digitalization, customer experience, and sustainability have definitely increased during the pandemic, these are areas that we are focusing on. Also the hygiene have become more increasingly important. I think it's quite interesting that Duni was actually built on hygiene in 1949 when the company was founded. That's quite interesting. Of course, we try to make significant changes and efforts in all areas we are working in. We will be very well positioned for the post-pandemic world when people start to travel more and meet and eat and so on. A little bit our two brands here, they will become more business areas with full responsibility now for the value chain. That's a step we're taking, and I think that will actually also increase our possibility to be much faster in the future. Okay, great. I hand over to Magnus again with the financials. Thank you again, Robert. Yes, if we start with the income statement. As previously communicated, sales are down with almost SEK 400 million in the fourth quarter. This is fully derived from Duni segment. For the whole year, the decrease is more than SEK 1 billion. The sharp decrease in demand as a result from the pandemic and lockdown is also visible in our gross profit, which has been burdened with less fixed cost coverage and less efficiency in logistics, for instance, with lower utilizations. Fourth quarter is also normally our seasonally strongest one with Christmas sales driving the demand for napkins and table covers. Not being able to sell these high margin products is partly the explanation for the drop in the gross margin of 10 percentage points. If you look on indirect costs below gross margin, it's down with more than SEK 120 million. Looking at our total program, including costs connected to secure gross profit, that equals 270 million SEK, as Robert mentioned earlier. As communicated in a separate press release end of January, the result is down significantly and ended on SEK 51 million versus previous year on SEK 199 million. For the full year, we ended on SEK 149 million, and that is a significant drop from the 2019 number, which were best yet with SEK 533 million. As you also can see in earlier communicated, we have high financial costs, it's partly related to that with dealer renegotiation, adapting our bank covenants to better reflect the current business environment burdened by the pandemic. Taxes are insignificant and net income just above zero. If you go to the next slide, if you look specifically on our two segments, Duni and BioPak, it is very clear that the losses are fully attributable to Duni segment, and basically all profits have been eroded and related to the sales decrease. We continue to strengthen BioPak, but not close, of course, to compensate for the dramatic decrease of SEK 1.2 billion in lost sales for Duni. Protecting the cash flow has been of highest importance throughout the year, and here I think we can confirm that the situation, bearing in mind, of course, the circumstances, looks slightly brighter. We have managed to keep the CapEx low without taking uncontrolled risks. The additionally working capital followed the development and with insignificant write-downs, and that's indicating good risk control. Inventory at year-end is slightly higher than previous year, and this is mainly explained by higher growth in BioPak and that we are securing deliveries from Asia. It's also related to Duni being able to deliver once the restrictions being lifted. Of course, finally, it was decided at the annual general meeting to cancel the dividend. We have naturally also contributed to strengthen our balance sheet. The learnings we had from the third quarter I think is very important. We saw how quickly the demand returned, reflecting the eagerness for people to come out and socialize. We strongly feel that we are now in good position to support our customers with what they need once the restrictions again are lifted and we can look beyond the pandemic. Operating cash flow is therefore a good thing but of course, been severely impacted by the lower EBITDA. With a positive operating cash flow also for 2020, we can confirm that Duni is still a tough year behind us in a good financial position with our debt being almost more than SEK 200 million lower than a year ago. Of course, the return on capital reflecting the lower profit is down significantly from the levels we have seen a year ago. Finally, our financial targets. Unfortunately, we are not able in 2020 to deliver on these. We can conclude that the significant volume decline resulted in operating margin being 3.3%. As Robert mentioned, the board's recommendation to our shareholders is that there will not be any dividend from the financial year 2020. That was the last slide, and thank you very much for listening, and I think we now hand over to questions. Thank you. Ladies and gentlemen, if you do wish to ask an audio question, please press zero one on your telephone keypad. If you wish to withdraw your question, you may do so by pressing zero two to cancel. Once again, please press zero one to register for questions. Our first question comes from Gustav Hagéus from SEB. Please go ahead. Your line is open. Hi. Good morning, guys. This is Gustav Hagéus with SEB. Thanks for taking my question. It's nice to hear your voice, Robert. We haven't met yet, so look forward to that whenever that's possible. I have a few questions. First, a few shorter ones, and then a little bit more on perhaps directed to Robert what he wants to do if he has any longer-term view. Starting off with your organic decline here in the quarter, if you could put some color on to what extent it refers to price mix or if it's only a volume component, and if there's price pressure in the market, that'd be helpful to understand. Thanks. Great. I maybe start with the first question, what I intend to do. Of course, it's almost two months into the job here. I think for me first, to create stability in the organization is one thing, of course. That's number one here. Of course, then to lay out a plan here in terms of where we want to go. I think we have really good high-level plans in terms of on the sustainability side, digitalization side, and so on, and also driving customer experience. I think next step here is to be more detailed in that, be more specific, actually. It happens a lot, especially if you take sustainability area. A lot of things are happening there. It's maybe be a little bit more specific on the detail actions. It's the how, in a way, we need to create now, and that's what we focus on, start to work on, definitely. Magnus here. Maybe I can answer your second question, Gustav. Thanks. The organic growth, it's related to volume. There are no general price changes. Of course, we have a close dialogue with our customers on that, but it's related to volume, no price changes. Okay. That's reassuring. I'm a little bit interested in where you see intermediate inventories right now. In a situation where societies would open up, people going to restaurants like we've seen in Australia, for instance, would you foresee some type of lag between that happening and your sales to kick off? If you could talk about the lag there, and if you have a view on currently the situation with the channel inventory, if they're historically high or low, that'd be helpful. Thank you. Thank you, Gustav. If I understand it correctly, you mean there is a lag for our customers opening up, or you mean a lag in the inventory? I mean that you're selling to dealers partly, and also your customers probably have a few- Yeah Shelves of inventory themselves. what would you typically- Yeah See if you have demand for your products going up? Yeah. At what stage does that translate to your sales? Exactly. I think referring to the third quarter when we saw the restrictions being lifted during summer, there was a quick jump up in demand for our products, indicating that the inventory at our customers were relatively low. I think we can assume a similar situation that we will quickly come back once the restrictions are lifted. That is also part of the explanations why the inventory is not as low as it might have been. We need to be prepared in order to deliver once the restrictions are lifted, which is still uncertain, of course. Okay. If I was to put the question like this, you have a rather high chunk of sales to Australia. I know that's mainly in the BioPak segment, I mean, to take-away and so forth. Australia is rather open, and restaurant visits have been going up at explosive rate once they opened in September, October. Did you see there that sort of tabletop assortment, yours or your competitors follow that suit? Was there any lag in that sense from when Australia opened up, restaurant visits went up, and tabletop assortment demand picked up? Yeah. First of all, main part of our sales in Australia is BioPak related products, not so much to restaurants. It's more of a takeaway, cup and trays and so on. When the sales we have directly to restaurants and so on, it's true, if the restrictions are lifted, and then they are back to more of a normalized situation. Still there are uncertainties of how much they will open up the restaurants. It's not our main segment. Our main is the takeaway segment. That's why we have seen the boost. I think we should be careful not drawing too much from conclusions from Australia being first out, so to say, on the tabletop segment. the Duni segment. It's limited. Right. Okay. Two more broader questions, if I may, and then I'll see if anyone else wants to ask some questions. Robert, when I look at Duni from an outside perspective, it seems a little bit like the organization has lacked a little bit of confidence in terms of the value you bring to your clients, and I'm referencing the ability to raise prices and perhaps be prepared to lose a few clients that aren't prepared for those price increases, but maybe a good move still for profitability. Linked to that question, first of all, if you agree with that, and secondly, linked to that question, how you feel about the R&D content into your products right now? Do you feel that there might be a route to invest a little bit more in R&D so that you down the road get a better price position towards your clients than you have at this stage? That'd be interesting to hear your thoughts on that if you have any. I appreciate that you're quite early on your job. Yeah. Historically, I think in a way, we've been quite good in driving the price, actually, in the market. We have really high premium products, and that's been Duni's strength over maybe 20 years, in a way, or more than that, maybe. I think in a way, we've been pretty okay. Going forward, of course, our company needs to develop the product portfolio in that way you're describing, actually. I think that's what we need to do, and I think, as I said before, it happens so much now within sustainability and so on and on. There's, of course, a lot of great opportunities in those areas. I can't be that specific in a way, but I think definitely we need to look into those areas. I think, as I said, it happens so many things, and it goes quickly, and I think Duni needs to be a little bit more agile in the future. I think that's maybe my aim, definitely. Okay. Lastly then, you mentioned being a little bit more agile, and I think Magnus referenced variabilizing costs. Yeah. Is the vertical integration a holy cow for you? Is that something that you feel is a core for Duni that cannot be touched? I guess why I am asking is that exiting some of your fixed costs in the Duni segment would dramatically lift probably return on capital employed, which sometimes is good for creating value and the perception in the market in terms of quality of the company, so forth. That would be interesting to hear your thoughts. Yeah. I thought you may add on, Robert. Yeah. No, I don't think there are any holy cows, as you put it, Gustav. Being vertically integrated has been a strength for Duni over the years. Of course, 2020 is an extreme situation with the pandemic, and as I mentioned, we have been working hard to variabilize the cost. As we have seen, it's been a strength, but there are no holy cows. Yeah. Normalizing the situation, we also believe that there is a strength to be vertically integrated. Okay. Okay. No. We do look very much on return on assets, of course. That's important for us. Yeah. Okay. Well, thank you for taking my questions. I appreciate, again, that you're new to your job, so look forward to even more granular thoughts going forward. Happy Friday. Exactly. Definitely. Yeah. Thank you. Thank you. Our next question comes from the line of Karri Rinta from Handelsbanken. Please go ahead with your question. Your line is now open. Yes. Thank you. Good morning. I have a few questions, and I will start with the numbers. If I look at the gross profit in the fourth quarter, it dropped quite a bit also compared to the third quarter, so pretty much roughly as much as your revenue declined. Was there anything specific that explained the sequential decline in gross profit compared to Q3? Magnus here. I think there are two explanations for this. One is that the Christmas sales, which is normally a good high-margin business for us, were very limited in the fourth quarter. Second, we saw the pandemic hurting us, and especially for the Duni segment where we have the factories and so on, and then we got less fixed cost coverage. I think those two components hurt us quite some bit in the fourth quarter. Okay. If it wasn't for the pandemic, the only thing we would probably be talking about here is pulp prices, which of course they didn't go up that much in the fourth quarter, but they have since then. We have at least heard a lot of price hike announcements. It's probably not your key concern right now. Correct What should we think about pulp prices for 2021? Correct. I think that has had a limited effect so far. There are indications during fourth quarter that the pulp prices is on its way up. We follow this very carefully, of course. Also we historically been quite good on compensating for that in different ways. Yeah Cost reductions or price compensations. It's true. It's on its way up. All right. The government support that you mentioned and the, I think, SEK 270 million in total in cost reduction in 2020, how much of that roughly was government support? How much of that was temporary cost avoidance, and how much of that should be seen as structural? Around SEK 90 million, so less than of the SEK 270 million. Million. 270 million. SEK 90 million, around that, government support. Okay. SEK 90 million was government support. SEK 180 million, how much of that was just less travel, less meetings, less sort of that comes back when conditions normalize? How much should we expect to be here to stay in terms of structurally lower costs? That is a lot of different components, of course, and I cannot comment on each and every one of them. I think all of it has contributed, sales cost being down, travel costs, et cetera. All costs basically you find in the P&L, but I cannot comment specifically on the type. All right. Fair enough. When we look at your Duni business, how much of that goes via distributors and wholesalers? You do make a comment about your receivables that so far you haven't seen any clear increases in bad debts. Is there any region that you are growing a bit concerned when it comes to your receivables, your customers, and whether they will make it or not? Especially if we talk about distributors and wholesalers, because individual restaurants, of course, will go bankrupt, but the middlemen, how are they doing? Yeah. Of course, absolute main part goes through wholesalers or various distributors and of course that is less risky than going straight to restaurants and so on. We have been following this very carefully and, of course, you see in certain markets are higher risk than others. So far it's been manageable, definitely. Yeah. Of course, the longer we have the pandemic situation with lockdowns and so on, we need to be even more in control of this and manage it in different ways. All right, when does typically Summer is a high season for hospitality. When does it typically sort of get started, the preparations for the summer season, i.e., let's say that lockdowns start to be gradually eased from March? Does that mean that there is still enough time for the hospitality industry to prepare for summer in their usual fashion? When should we become worried about the summer season, assuming that lockdowns are extended beyond February? Well, I think if we look at 2020, it kicked off in May, really. Yeah. If we look at last year in a way, there we had the boom from May, really, and that, of course, was part of the Yeah, depending on the restriction, of course, when there was eased up, last year. No, I don't think it's very difficult and it's impossible to speculate. We should not speculate from that. What we can learn from 2020, as Robert said, is that once it opens up and the restrictions start to lift, the orders are placed and it quickly goes out to the restaurants. There is no long lead time in that sense. Actually, I think only it's a matter of if the restrictions are lifted, it very quickly fills up and the restaurants can open up and serve the customers. That's the learning from last year? That's the learning from last year. We believe it will be the same this year. Yeah. It goes quickly. All right. Thanks. Finally, maybe about BioPak. Do you feel, this is a strategic question, and maybe it's I understand that it might be a bit too early, but do you feel that your BioPak portfolio is as comprehensive as it should be, or are you lacking some products that you could sell to the same customers that you are currently selling your existing products? Yeah. Maybe a bit, but in one way, I think we have a really good portfolio, definitely. With the BioPak range, we are, yeah, in the lead, so to say, in the market as well compared to others. I think we have a good portfolio. Of course, it needs to develop and especially what happens with the trends in the market and so on, those kind of things. Yeah, I think definitely we have a good range. Yeah. Of course, we need to develop it, definitely. It happens a lot of things. I think the customers now, I think that's very positive in a way. They ask for a lot of new ideas in terms of takeaway as well. A lot of actually restaurants that hasn't had takeaway are moving into takeaway. If you take maybe the five-star restaurants today, they Well, five-star or three-star or whatever, the top ones, they didn't have takeaway before. Of course, now what happens is that they try to do that and they need maybe a more interesting packaging than maybe a one-star restaurant then if you compare. I think this is an area we need to explore more. Definitely. Sure. Then one more final question. Yeah. How much roughly is hotels as your sales? Maybe not direct sales, but how much of your products end up at hotels if we look specifically for Duni? Do you have any ballpark estimate that you can give us? I don't have that, right. We do not have the percentage, but it's not the main segment. It's an important segment, it's not the main. All right. Fair enough. Thank you very much. Thank you. Thank you. As there are no further questions, I will return the conference back to you. Yeah. Thank you for today. Yeah, it was really nice to do the first report here and looking forward to do many more in the future. Thank you. Thank you.