Do you know that 400 million people suffer from incontinence? Last year, two out of five women in the world had to stay home from school or work due to menstruation? 2.4 billion people live without basic sanitation services? More than 1.2 million people die each year from diseases caused by antimicrobial resistance. What do you think about that? Do you care? We do. We want to improve the well-being of everybody by raising awareness, breaking taboos, and driving innovation. How? We are where you are. Our products are in your home, at your workplace, on your vacation. We make everything, from wearable technology for smarter care to digital solutions for sanitation and wound healing. You'll use our products from the day you are born until the day you don't need them anymore. We need more talented people to help us move forward. People who wants to make a career and make a difference. Who want to make the world better by breaking barriers to well-being. Work towards a circular and sustainable society. In the end, we want more people like us. People of all ages and genders, sexual orientation, and ethnicities. That's what makes us better, not just as a company, but as people, because that's what we are, people who care. Warm welcome to Essity's third day of business area web presentations. Today, we are going to talk about our consumer goods business, Josefin. Yes, Magnus. Hello, and a warm welcome also from me, Josefin Edwall. I'm Senior Vice President Communications. You will have replays on essity.com from day 1 and day 2 if you missed them or wanna see them again. Let's look upon today's agenda where the focus is on consumer goods. Magnus will, together with Volker Zöller, our President Consumer Goods, and Pablo Fuentes, President Latin America, go through this business area. Of course, in the end, we have a Q&A session. You will have the details for dialing in on essity.com or on your screen. With that, Magnus, set the scene. To begin with a short recap about Essity Group, in 2021, we had sales of 122 billion SEK. We are active in 150 countries and have 46,000 employees. Our financial targets are very clear, it's to grow annually above 5%. This includes organic growth and acquisitions, we also have a target on adjusted return on capital employed to be above 17%, this target was increased in 2020 when we achieved the previous target to be above 15% for a prolonged period. We also have two financial policies. One is to remain solid investment grade, the other one is to strive for stable and rising dividends. We are presenting ourselves during 2021 in 3 distinct business areas, and from the end of this year, we will also be organized completely according to these 3 business areas. They are distinctly different in terms of customers and consumers. That means that it's also very different how we go to market, the sales channels. We also, to a large extent, have different competitors in these 3 business areas. There are also many things that keep these business areas together, giving strong synergies and benefits of scale, including the supply chain, purchasing, R&D. 3 attractive businesses kept together by strong synergies. Now we will move over to Consumer Goods, and since we are organized in two business units in Consumer Goods and have two presidents here today, I will start with a short introduction of the entire business, and this introduction starts with a short movie. Consumer Goods. Sales of SEK 74 billion in 2021, with an adjusted EBITDA of SEK 7.9 billion, accounting for 55% of group profits. The net sales split according to geo-geographies, we have a little over half of our sales in Europe, with Latin America and Asia making up the remaining part, U.S. and other 3%. In Asia, we are mostly represented through our subsidiary, Vinda, with leading market positions in China and Southeast Asia. Moving to sales split according to categories, our biggest category is Consumer Tissue, that we're splitting now in the sub-category Consumer Tissue private label accounting for 9% of our sales. This is a split we have been doing because of the distinctly different customers and go-to markets between Consumer Tissue branded and retail brands and the private label division. Feminine care, incontinence products retail, and baby care, equally sized. Some key figures, an amazing growth number here, 17.4% in the first 9 months. A lot of this is pricing, but very important we are one of the few, if not only, FMCG companies this year that have been able to combine significant pricing also with growing volumes and mix. A great achievement there leading to an adjusted EBITA margin of 7.3%, significantly impacted by raw material costs and cost for distribution and energy. With that, let's get into more details about consumer goods. Josephine, do you want to introduce our two next speakers? Yes. Thank you, Magnus. Pablo, Volker, join us on stage. Very welcome. Hi, Josephine. ...a little bit about the categories and priorities. It's really good to see you again. Good to see you. Let's just stay a little bit on the current environment. It's been a tough world, it is very turbulent. How is this impacting consumer goods? Volker, do you want to start? I think we are operating in the perfect storm, a situation which is characterized by volatility, uncertainty, ambiguity, and pricing agility is super important. I think so far we are doing pretty well. When I look at the speed and the agility of the price increases, we have implemented, this is really unique. When I look at the level of price increases which we have implemented, this is outstanding if I compare to former pricing rounds, so this is really great. We have been bold to some retailers. We have been very bold. On the other side, the acceptance level of the retailer is pretty high. It's relatively high because we were very transparent with our cost drivers. What was very helpful in this context, we had a good supply situation during the entire period, and we have also overcome some challenges like energy supply challenges and so, and so on. As Magnus said, as a result of that, we have a pretty good volume development despite all the price increases which we have implemented, and I think for me this is a strong indication for the strengths of our brands, but also for the good relationships we have with our retail customers. Good work. It's been a tough work, I know that. For you, Pablo, how have you been managing the situation in Latin America? Sure, Josephine. We have a very strong business in Latin America. We are winning market share in more than 80% of our sales, while at the same time we have been increasing prices quite proactively to compensate all the recent cost increases, and we have also been able, as a result, to protect our margins. I would say we have been quite successful in Latin America as well. Volker, with the high price increases, how has that impacted the volumes? Do you see a downtrading now or...? I mean, first of all, we have strong brands, we have loyal consumers, we have product superiority in many, many, many areas, and we have a tiering strategy, and this allows the consumer to choose between different performance levels of a brand, and I think this is very, very, very helpful, so you can stay with the beloved brand. There is a trend of downtrading consumer. I would say for Europe it's a very soft trend. There are a couple of countries like the U.K., for example, where the trend is a little bit stronger, and this is something we have to watch out very, very carefully. We are of course already checking our innovation funnel. We are reviewing our assortment, and if this trend would emerge, would strengthen, of course we will adjust our promotion strategy. Product claims are very, very important. From that point of view, I think we are very well prepared for this to manage this trend. We should not forget, in Europe we have a dual track strategy, if this trend would strengthen, we would always balance between the branded portfolio and the retail brand portfolio. Good to hear. Good to hear. In your region, Pablo? Sure, Josephine. We are used to operating on certain volatile environments in Latin America. We have a broad product portfolio that covers different tiers and segments. This helps us navigate the different economic cycles in a very good way. We also have very empowered local teams that act in a very agile and flexible way in each of the different markets. If we look into the favorable trends, the long-term trends, how would you say they impact your business, Volker? I think these emerging trends are absolutely in line with our focus areas and our priorities, if I should mention a couple of them. I think we see an increasing interest in hygiene and health, sorry, which is very beneficial for us. This has accelerated significantly during the COVID time. We see demographic shifts happening, which is for example good for our incontinence category, but will also give us the possibility to build new categories. Menopause is one of them. I will talk about this a little bit later on. We see a re-emerge of sustainability, very much in line with our strategy, reuse, reduce, recycle. Last but not least, a growing adaption of the e-commerce business, which is fully in line with our strategy win in digital, and Pablo myself will talk about this later on as well. Very much in favor of us. I actually have to say, I know both of you are really focused on sustainable solutions. You are, like me, very much advocating for equality, supporting women, et cetera, et cetera, and we will hear more about that. The trends in Latin America, Pablo? Yes, the trends are very similar to what Volker mentioned. I would also mention that Latin America is a land of opportunity for Essity. We have more than 600 million people, out of which 120 million are middle to upper class. Categories are still under-penetrated, most of them, so there is still high growth opportunity. There are channels like e-commerce that have quite high growth opportunity still. Really good. I will now leave the two of you to deep dive further into consumer business. Thank you. Thank you, Josephine. Before we look in the various categories we are managing, and look at the addressable market growth. Basically this is the size of the four categories we are active in. Our estimate, it's a EUR 93 billion market, very, very significant market. The estimated growth rates for the future is higher than 3%. Europe and North America are supposed to grow slightly below the 3%, while Latin America and Asia should grow above the 3%. This is an important slide because it really shows the strengths of our brands. We have 90% of our branded sales with number one or number two positions in the country. We believe this is really super important and super relevant for the future because in retail, I think in both geographies, in all geographies, it will be more and more difficult to keep a number three or a number four brand on shelf. This is our category portfolio. We have consumer tissue with bathroom tissue, household towels, hankies, and facial. We have baby care with open diapers and pant diapers. We have incontinence products in the retail channel. Ulrika was talking on Wednesday about incontinence in the healthcare channel, and we have feminine care. What you can already see on this slide is that we talk more and more about three categories, because incontinence products in retail and feminine care products are merging closer and closer together to a category which we call intimate hygiene, and Pablo will talk about intimate hygiene a little bit later on. We believe this, we have a very good portfolio because it gives us scale to be competitive, but at the same time also the negotiation power towards our retail customers. In fact, we are, in most of our retail customers, we are amongst the top 10 non-food suppliers, so pretty strong positions. In some of our customers even, we have a number two position, so very strong. This slide shows some of our brands, very strong and trustful brands. Also the products which we are producing in each category, and then we are going to deep dive in Consumer Tissue as our first category. This is our biggest category. We have a global number two position, and this despite the fact that we are not present in North America. We are enjoying number one market leadership in Europe and in Asia. Asia via our holding in Vinda, and we have a number three market position in Latin America. Pablo. No, sorry, we start with Europe. I was too fast. European market, we estimate the European market to be a EUR 10 billion market, growing between 1% and 2% also in the future. Current market growth is approximately on this level, between 1% and 2%. Value growth, of course, significantly higher, driven by pricing. Essity, we are enjoying a number 1 position, very strong number 1 position with 27% of market share, I think what is equally important with a relative market share to the number 2 is more than 2. Now we go to Latin America. Yes. Thank you, Volker. Latin America market, it's $5 billion with an estimated growth of 2%. We have a very strong position in those markets where we have chosen to compete and participate. We have leading brands there, and our focus is on continue building our brands and of course in profitability as well. Good. Consumer Tissue strategy. What is our strategy? It's about acceleration of the value creation, margin expansion. It starts with building leading, trusted, and purposeful brands, and this goes far beyond product performance. A very good example is a activation we did lately in Hungary on the Zewa brand, where we talked about gender equality, and we won a couple of awards and a lot of recognition what we are doing. This is what we mean with a purpose behind a brand. The other one is about acceleration of the premium tier. I will come back to that. Up trading of the consumer by defending also the good tier. There are a couple of good examples you will see later on. One is our premium toilet paper offer. Another one is our box strategy, which we have in the hanky and facial segment. Differentiation with sustainability, very, very, very important in the consumer tissue category. A very nice example actually you see here on the slide. It's a pack shot of the Zewa bathroom tissue which we have launched beginning of 2022 with Wheat Straw content. Another one is, for example, our coreless offer, our coreless products, which we have started in France and in Germany, and this year we have launched also in the United Kingdom. This is what we mean with sustainability. Differentiating for us, the sustainability needs to sit in the core assortment. It's not about an incremental SKU, competence SKU. We are changing the entire bathroom tissue range in Zewa, and later on, we will also change our household towel. Really sustainability in the core of our products. Winning in high-margin segments. A very good example is moist toilet paper. I will also talk about this segment a little bit later on. We have launched in a couple of countries some years ago. Meanwhile, in Europe, we have market leadership basically in every country where we are present. The segment is growing very, very nicely, and it's of course also a higher profitability than we have with our dry toilet paper. In the Consumer Tissue category, important competitive cost structure. I think you're all aware what we have done in the last years with the Consumer Tissue Roadmap. We'll of course continue our activities with the Consumer Tissue Roadmap. We are addressing non-performing segments of the business in the Cure or Kill exercise. It's also a lot of programs which we are running in the supply chain in order to improve our efficiency. Concerning the consumer tissue private label division in Europe, I will come back on a later stage. Consumers want to protect our environment and can do this best with small and daily changes. Zewa offers the first ever toilet paper containing straw. Products are rotating really well. Great market feedback. The insight behind our innovation is convenience and less waste. The innovation is a longer roll with no tube. Our consumers love this. Hundreds of reviews talking about how great the innovation is. True innovation in the category. Consumers told us that they didn't really feel totally clean after their bathroom routine. We are providing moist toilet tissue that are fully flushable and made from 100% plant-based fibers. Consumer acceptance has been super strong in all the markets we have launched. It's a superior value proposition. These were some of our colleagues talking about innovation, sustainability, but also premiumization. To illustrate this a little bit, this is a very interesting slide. What you can see on this slide is our premium bathroom tissue portfolio in 2017. When you add the good and the better tiers or the two lower tiers of this segment, then 92% of our business was sitting in these two tiers. With our premiumization strategy, we have really transformed the portfolio. We have now more or less one quarter of our portfolio sitting in moist and best. Why is this important? Number one, our margins are better. Number two, the retailer margins are better in this segment. Number three, consumer loyalty is significantly higher in this segment. This is a nice example what we mean with premiumization and how we are transforming assortments. Let's have a look at, Latin. Yes. The same trend that Volker presented in Latin America with our Regio and Familia brands, we are number 1 in key markets for us like Mexico, Colombia, Ecuador, but we're also number 1 in the premium segment in all of these markets behind all the investments we have done in innovation, technology and of course brand building. Same trend as you presented, Volker. We go to the consumer tissue private label division in Europe. I mean the figures, net sales roughly EUR 700 million. This is, of course, these are 2021 figures. Net sales are significantly higher because of all the pricing plus a very positive volume development. We have seven sites, Belgium, France, Germany, and in Italy, and we have approximately 1,900 employees in this new division. We have set up this division in order to really meet the specific needs of private label customers in Europe. It should be a self-sufficient organization with the full value chain integrated. What we have done so far, we have communicated our intention to set up this private label division in quarter three 2021. We have confirmed the scope, defined the scope in quarter four 2021. The organization is live. The organization is actually very successfully operating when it comes to volume and pricing development in the market since quarter one this year. Right now we are in the process to dedicate the assets. That means we are moving between the consumer tissue private label factories, the seven factories you see on this slide, and the remaining factories of SCT and consumer tissue. We are moving the volumes in order really dedicate the sites to also this volume. In progress, on plan, and so far we are very happy with the progress. We are switching to the next category, which is the baby category. European baby market, we estimate the market to be a EUR 4 billion market also with some predicted growth. SCT number two market position, very good market position with 13%. What is behind this business? It's our very successful branded business with the Libero brand in Scandinavia, Libero brand we are also leveraging in Hungary, in Middle East, Africa, et cetera. Actually the majority of this business is a retailer brand business with leading retailers in Europe. Our strategy also here, it's a lot about premiumization. Product superiority is very important. We want to strengthen our leadership in the Nordic countries while at the same time developing a profitable retailer brand business in Europe. Differentiation with sustainability also in this category, more and more important as sustainability aspect. I will show you an example in a minute. It's most probably the category where we currently have the highest cost focus on to. In order to stay and improve cost competitiveness, it's also a lot working with mix because we have a very nice super premium offer, which I will show you now. These are some figures from the Scandinavian market. We have reached now a market share in 2021 of more than 60%, peaking, for example, in a country like Sweden with more than 70% market share, uplift of the market share of 9 percentage points. Really significant. One of the big reasons behind that is that the Libero Touch assortment, our super premium offer, has meanwhile reached 30% in the entire portfolio. It's a very successful launch. Needless to say, of course, behind these figures is also a very successful digital Libero Club, which we are running in the Nordic countries. Good. This is a recent addition which we have done to our portfolio. It's a great example how innovation and sustainability go hand in hand. It's a reusable chassis and a disposable inlay, and that stands for great performance but also comfort for the baby, at the same time, less waste and higher sustainability. This was developed based on consumer insights. We have launched this now in Germany and in the Scandinavian markets. The first feedback of our customers is absolutely excellent. We go to our next category, or let's start about intimate hygiene. Thank you, Volker. Sure. Now we talk about intimate hygiene, with our intimate hygiene approach, we follow our consumer target groups across many different life stages. For example, we have products for menstruation, we also have products for daily intimate care, like daily liners, washes, soaps. We have products for light to moderate incontinence, like for example, absorbent underwear. More recently, we also have products for leak-proof, like for example, reusable absorbent underwear, activewear, swimwear, and products for menopause as well. With our intimate hygiene umbrella, we cover a broad set of life stages, leveraging our strength, our core competence on intimate hygiene. One of the most exciting categories in the intimate hygiene arena, certainly one of the fastest growth in the consumer goods landscape, is leak-proof apparel. The reason why this category is growing so fast and is so attractive, it's because it's leverage, and it targets key consumer needs. On sustainability, for example, it offers reusable products like absorbent underwear, activewear, swimwear. It also offers comfort, fit, and discretion in these products better than traditional products. There is much more availability and awareness as they go to market for these categories, mostly through direct-to-consumer channels. In Essity, we have become, in just a few years, market leader in this very exciting category. We achieved this by very quickly and in a very agile and flexible way, launching with our own brands into this leak-proof assortment of products. We also did two very successful acquisitions, Knix, which is a market leader in North America, and Modibodi in Australasia. With this, we now cover most of our markets and are the global market leader. I will ask Joanna Griffiths, President and Founder of Knix, to share some perspective about leak-proof category. Hello, I'm Joanna Griffiths. I'm the Founder and President of Knix, the direct-to-consumer intimate and leak-proof apparel brand that is on a mission to empower people everywhere to be unapologetically free. A little over a decade ago, we helped invent this now growing leak-proof apparel category by being one of the first to market with these groundbreaking products. Speaking of products, we're product innovators. We love to reinvent what products can mean for our customers and our community by thinking about the impact that they have on their everyday lives. We've built Knix as a best-in-class digital-first brand, meaning that over 95% of our sales come direct to consumers exclusively through our own websites. Over the past few years, we've built roughly a 30% market share in North America within the leak-proof space. We're a multi-generational brand that serves our customers through every phase of life. With our Gen Z brand, KT by Knix, we're there for customers, teens and tweens from first period onward, and then our growing assortment of products is catered to people's unique life phases and stages as they go through every chapter of their life. I will talk about feminine care, which is also under our intimate hygiene umbrella. Aligned with our ambition to be the fastest-growing feminine care business in the world, we have built very strong positions, as you can see in Europe, in Latin America, and more recently in Asia, where in China we are building the largest or one of the largest and fastest-growing feminine care business for us. As you can see in Latin America with our Saba and Nosotras brands, we are the market leader, and we have been gaining share over the last years consistently year after year. In Europe, Volker? In Europe, we have a number three position. We estimate the market to be roughly a EUR 2 billion market with also some predicted growth in the coming years. We have a 10% market share. As we are not present in every country, our market share in the countries where we are present is significantly higher. Thanks, Volker. As I said, our ambition is to be the fastest-growing feminine care business in the world, and our strategy is really to have an obsession around product superiority through innovation in our products. Leverage, as I already mentioned, leakproof, which is the fastest-growing segment in this category. Migrate from menstruation brands to really daily intimate care assortment of products, which is a bigger addressable market. Expand geographically into what we call white spaces. I already was talking about China, the U.S. Hispanic population, Brazil, Argentina, with high growth opportunities for us. Continue building purposeful brands like for example with Tom Organic, where we have truly superior organic credentials. I will talk about a success story that we are really proud of, and it's our Saba feminine care business in Mexico. In just 10 years, we started with 25% market share, and today we have 55% market share with a clear leadership. The way we achieve this is of course, with a strong focus on product superiority, but also with a very disruptive way of engaging and communicating with consumers and a super agile, flexible, and entrepreneurial go-to-market and execution in the local market. Really proud about this success story. In Latin America, we have been growing consistently across all of our key markets above the market. As I said, we are a very strong number one player with our Saba and Nosotras brand. Also globally, we have number one, number two positions in more than 90% of our branded sales, and we are increasing market share in 70% of our branded sales. Really strong and successful business for us. Now we go into incontinence care. Thank you, Pablo. Let's have a look at incontinence care products in the retail channel. We have a global number two position, but strong market leadership in Europe and in Latin America, while we have a number three position in Asia and a number four position in North America. When you look at the European market, the European market has grown significantly in the last years. We estimate to be now a EUR 1 billion market. Predicted growth rates also for the future between 5% and 6%. It's also where historically we have been, and we believe with demography, but also with breaking taboos, we will really achieve, and this will fuel the growth. As a team, as I said, market leader number one with a market share of 42%, so a very strong market position. In Latin America, we are number 1 position, and our focus is, of course, to continue gaining market share with our very strong TENA brand, but also in growing the category as penetrations are still low and there are still very high growth opportunities in all the different incontinence segments and channels. This is a quite impressive slide because we have 80% of our sales in position number 1 or position number 2. As I said already at the beginning, this will be even more critical in the future. We can really build on very strong market position. Some of these positions we have market shares of more than 30%, so really leading positions. Looking at our strategy, it's definitely about leading and shaping the category. Rica was already touching this on Wednesday. It's about the strengths of the trustful TENA brand. Everything what we do is about the TENA brand. Innovation and product superiority, very important. Our target is to have in every segment we are acting product superiority. This is the category where you also will hear a lot in the coming quarters and coming few years about innovation and new launches. This category, an increasing strong focus on sustainability, one of the reasons why we have launched some of the products now with a paper packaging. Pablo was talking about leak-proof apparel, also important in this category because we also want to have here a reusable offer, not only disposable products. Last but not least, winning in high opportunity markets and segments. Two examples is of course the pants segment, but also the TENA Men, where we believe this is margin accretive, but at the same time also we expect to see higher growth rates compared to the category growth you have seen on the last slide. Good. I promised to say a couple of words about menopause. Menopause is for us the next big area where we want to break taboos. It affects by definition, of course, half of the population. It's a taboo. It has really remained a taboo topic which leaves a lot of women unprepared for this very transitional life stage. Let's start with a short video. Nobody warns you about this stuff. The fondness with which you remember sleep. Mom? The occasional pelvic floor betrayals. It's like shedding your skin, but sweatier. Then it ends, and you're more yourself than you ever were. Mom, what's the menopause like? To get older. We know that more than 50% of menopausal women are experiencing unpleasant symptoms like strong periods, irregular periods, like vaginal dryness, like hot flushes, incontinence, et cetera, et cetera. They struggle to find help and guidance. This is exactly what we want to do. We want to offer adequate support in that. This is why we have launched Issviva platform. This is a new brand for Essity. We have launched in the U.K. and in Brazil, Issviva. It's very much about knowledge, expertise. It's about solutions and products in the area of menopause. Some of these products are in the current portfolio of Essity, in the incontinence, in the feminine side. They're adapted to the period of menopause. Some others will be additions to the portfolio. I think we have even some here. Here we talk about things like vitamins and pills, which will be new in our assortment in the future. A very, very, very exciting project activity. We believe this is a very big opportunity because until 2025, 1 billion women will be going through the menopausal phase. I think this is a very, very big business opportunity for us in Latin America, but of course also in Europe. Good. This was what we had planned to say about the categories. Let's have a look at activation, how we are doing this. In Europe, we have a very well-established go-to-market framework. I've been presenting this a couple of times at pharma couple market days. It has proven to be also very robust and successful in the challenging environment we are experiencing right now. It's a big part of our value creation story. Right now, where is the focus? The focus is on managing price thresholds, but also price pack architecture after all the price increases we have implemented in the various categories. It's about promotional strategy, where we want to basically meet new shopper experiences. Last but not least, it's also a lot about in-store communication, where we are trying to change the perception value for money in the current recessionary, high inflationary environment. That's what we are doing in Europe. Pablo, what are you going in to do in Latin America? Yeah, in Latin America, in the modern trade, we have the same dynamics and priorities as Volker presented, but what is truly unique and different in Latin America is the traditional channel. We serve millions, really millions of mom-and-pops daily with our broad consumer good portfolio in a very successful way, and we think, we believe this is a competitive advantage for us in Latin America. What about channels, Volker? Well, channels, I think we have a very fair distribution above all the critical channels, most important channels, hypermarket, supermarkets, drugstore in Europe. This is important for us. We have increasing shares in e-commerce. This is also very important. Year 2020, 2021 were the years of e-commerce. I think in Europe, we have been growing more than 40% in both years. It's still growing, but, I think on a lower level, but remaining basically all the gains during the COVID period, which is important. Our target is to have minimum the fair share in the online channel what we have in the offline channel. We have achieved this most probably in most of the country category combinations, so we are pretty successful here. In the short term, we are focusing on discount channel. It's important in Europe, the discount channel. We believe in this high inflationary recession environment, our presence in discount has to be strengthened. This will be the channel which is growing faster than the other ones. Last but not least, both of us, we are focusing on direct to consumer, and for us, direct to consumer is much more than a sales channel. It's direct interaction with our consumer. It's a source for innovation and a lot of insights which we are generating. Go-to-market in Latin America. Yeah, in Latin America, in our channels, same as in Europe, we follow an omni-channel approach to really offer a consistent experience to our consumers across the different touchpoints. E-commerce, of course, super high priority, and we have higher market share online than offline in all of our key markets in Latin America. Also, as you said, Volker, super important and a key priority for us is Direct to Consumer as a better way, more direct and more intimate way to engage with our consumers. And in Latin America, we set 18 Direct-to-Consumer platforms that have been quite successful. For this, I would like to share a video of one of our success cases on Direct to Consumer. Brazil is one of the biggest markets in the world with a very complex go-to-market because it has thousands of retailers distributed all across the country. It also has a big opportunity because it has one of the highest digital buyers penetration in the world. Taking in consideration all of this, we decided to launch our first D2C for incontinence in LatAm. This platform has allowed us to build a direct relationship with our consumers, but also has helped us to know more about the digital buyers, improving continuously the cost of acquisition and the conversion rate. Just for you to have an idea, the average of conversion rate in Brazil is 1%, while we have achieved 2.5% with an 80% of repurchase. There have been two critical things to achieve these results. The creation of the TENA Club, that is a membership program that accounts now for 30% of the sales, and the internalization of the operation that has allowed us to be more flexible, to improve our forecast accuracy, and also to improve our margins. As you can imagine, the D2C has become very relevant for the business. It is now the third most important client in... within the business, accounting for 4% of the sales. The most important of all is that it has helped us to deliver the best brand experience for the consumers. Perfect. Now we go to priorities, Volker. Very impressive figures. Let's conclude this part of the presentation with a summary of our priorities. We will continue with the strong pricing execution in all categories and of course also with our efficiency programs which we are running throughout Essity. You have seen the many examples of innovation and sustainability and how innovation and sustainability play together. We will continue our value creation journey with a lot of innovation and sustainability also in the future. We are focusing on winning customers, winning channels. We just talked about e-commerce and direct to consumer. We believe we have a very competitive and superior go-to-market approach, which we continue to develop and adjust to the environment. I think our aspiration is very clear. We continue to be the fastest-growing company in intimate hygiene, a clear focus area. While at the same time, we will maintain the margin focus in Consumer Tissue and in the baby category. Having that said, I hand over to Magnus. Very interesting. Thank you very much. Before we move to questions and answers, of course, today Volker and Pablo, you have been presidents of consumer businesses in Essity. We will do some changes from the beginning of next year. Volker, you will continue to be in charge of Consumer Goods in Europe, Middle East, India and Africa. While Pablo, you will move on to take over responsibility for Professional Hygiene globally. Looking forward to see the progress there. We had some very interesting presentations on Professional Hygiene yesterday. What we're creating now is a North American consumer goods entity, which will be headed by Andres Gomez, and I would like him to present himself. Hello, everyone. I am Andres Gomez, and it is an honor to be here with you. As a quick self-introduction, I have developed my career over the last 15 years in the consumer goods industry through different leadership positions, including supply chain, innovation, sales, marketing, talent development, including the wonderful experience to be Grupo Familia's President and CEO for the last five years. I have a background as an engineer, and also I have a master's degree in business administration. After Grupo Familia's acquisition in 2021, I joined Essity's family as sales and marketing VP for the Andean and Caribbean region. Now, one year after, I was invited, starting on December 31st, to lead the newly created Consumer Goods Americas business unit at Essity. This new business unit has great opportunities ahead since the market where we play represents currently close to $40 billion and serves over 1 billion people. We have many strengths to bring this opportunity through our superior and innovative solutions by keep building stronger brands, by gaining more agility, and being fully customer-oriented and 100% consumer-centric. We already hold over 23 leading positions in four categories. We have also a robust footprint with state-of-the-art technology in 16 production sites across America. Especially, we count on over more than 3,000 very talented people directly connected to the business unit, guided by a common purpose and a very strong culture. I am totally committed to keep supporting Essity's purpose to break barriers for wellbeing and contribute to a healthy and sustainable future, to bring a circular society while creating value for all of our stakeholders. Thank you very much. You heard Andres talking about our company's purpose, breaking barriers to wellbeing, and I hope that you have, during these three days and today, heard what my colleagues are doing in order to support this purpose and, of course, support the business. With this, we will open up for the Q&A. You have all the dial-in details on your screen and on essity.com. Before opening up, Magnus, your key takeaways from this day? My key takeaway from this day and the 2 previous days, it's so interesting. Even though I work with this every day, I learn something new every time. I'm very proud about all the achievements this year and excited about the opportunities going forward. Most of all, I feel that this new way of working in 3 distinct business areas with 2 business units in consumer goods is the right way forward because there is a clear difference. We will be able to serve our users, our consumers, customers, patients even better with this new way of organizing ourselves from the beginning of next year. Really looking forward to the opportunities that will bring. Okay, over to the questions. Please, operator, help us opening up. Certainly. As a reminder, ladies and gentlemen, it is star one if you would like to ask a question. The first question today comes from Oskar Lindström of Danske Bank. Hi, good afternoon, everyone. Thanks for these presentations. Two questions from my side. The first one is on the volatility and cost inflation that we've seen coming from raw materials over the past really year and a half, and it's been quite extreme. Including the effect that it's had on operating margins in the Consumer Goods business area. Following this, I mean, do you feel that there's a need for you to, in any way, sort of change your pricing mechanism or how you set prices, I mean, as a consequence of this? Has it sort of given you any food for thought that you need to perhaps change anything in your business? That's one question. My second question is a little bit more specific about the Knix and Modibodi acquisitions. At the time of the acquisition, you gave us the growth numbers and some financials for 2021. If you would care to comment on the sort of growth that you've seen year to date for these two businesses, that would be very interesting or any other comments about those two businesses. Thank you. When it comes to the pricing mechanisms, they have already changed significantly. Maybe you want to talk to that. Yeah, I can take, for example. ...Consumer Tissue in Europe as an example. I think we have changed everything. We have changed the rules of the game in this category. At the beginning, I talked about speed and agility and level of price increases. When you look what happened this year in Europe, I mean, on the 24th of February started this terrible war. Afterwards, the energy prices went really crazy. When you look at our quarter 2 pricing, we have already implemented a big part of the price increases. I think we had a very similar situation actually summer in September, where the energy markets were really going up, and we were going out with, and we're clearly communicating that we are going to raise prices also in quarter 4. The speed and agility of price increases is completely different. We have also changed a lot of patterns. We had customers with one-year contracts, impossible to keep in this current environment, so we are maximum committing ourselves for three months at the moment. We were also more direct. We were really bolder. I mean, we had really acceleration and escalation with a couple of retailers. I think we have really changed everything. We have challenged everything, and I think so far we can be pretty happy. More to come. We need further price increases, very clear. Good. The second question was about Knix and Modibodi. That's for you, Pablo. You will continue to work with that partly in your new role. We don't typically provide any specific numbers, but how are we doing now with these acquisitions? Yeah. With these acquisitions, growth continues to be in a very good level. As I already mentioned, there is a very positive trend from a consumer perspective, and these companies are really disrupting different categories in a very successful way. The growth that we saw before we acquire them, we continue to experience a really growth momentum in these two companies. Thanks, Pablo. Thank you. Our next question comes from Charles Eden of UBS. Hi. Good afternoon. Thanks for taking my questions. I've got two, please. Firstly, it's just on the retailer and private label share via various consumer goods categories. I think last time you disclosed this was 2020, and you talked about 32% of consumer tissue sales being retailer brands or private label, and it's 43% for baby and a much smaller 6% for feminine care. Are those still the right ballpark exposures across those product categories? And is it fair that most of this exposure is in Europe for each of consumer tissue, baby, and feminine on the private label side? Second question, you mentioned the importance of the discount retail channel in Europe. Can you just remind us what your exposure is to the discounters as a percentage of your total European sales? Thank you. Okay. Since the first question is a global question, I'll try to answer that myself and then you can chip in here, Volker mostly. As you say, Charles, private label is almost entirely a European phenomena. The numbers in detail, I don't have them in front of me, but I think you can call the investor relations, Johan or Sandra, and you will get an update on those numbers. I mean, from our perspective, our strategy has clearly been to grow our presence in the branded part of the business. That's the two categories we typically have a private label business is, as Volker mentioned today, Consumer Tissue and baby care. How that's growing, I think from a volume perspective, it should be quite stable compared to the numbers you mentioned. From an overall sales perspective, it could be quite different depending on the pricing actions where we need to take more price in private label than in the branded part of the business. When it came to the second, I think the discount channels are actually quite well covered by our private label division. Volker would be my guess. I think the answer we have to split. Yeah in two answers. One is private label. We have a pretty high exposure, and this business will be managed in the future by the new Consumer Tissue private label division in Europe. We have a quite high exposure to hard discount, especially to the German hard discounters, which are trading in many countries in Europe. When I was talking about increasing exposure presence, I was very much talking about the branded business. I think a real figure for Europe doesn't make a lot of sense, but we will do this tactically in the countries where believe this is really adding value and where the discount chain will really grow faster than the other channels. Thank you. The next question comes from Victoria Nice of SG. Hello there. Thank you for the presentation. You talk a lot about the transition towards reusable products. Just wondered whether we should assume that Essity would not look to expand capabilities further through M&A in disposable segments. You also mentioned vitamins as a new product area. Could you talk a little bit more about that and how Essity is building capability in this area? Thank you. I'm not sure I caught your first question there, Victoria, if you could repeat that. You talk about the sort of transition to reusable products and just thinking about M&A, would it mean that you would not look to do M&A in disposable segments? We could still consider doing M&A in disposable segments. Of course, also in medical, all those products are more or less disposable at some point. That's could clearly still happen as an answer to your first question. To your second question, absorption technology, actually, the knowledge and expertise that we have in that area is highly relevant also for reusable products, and this is something we learned when we launched our own leak-proof apparel under our own strong fem care and intimate brands like TENA, Libresse and our other brands. Of course, we are also now learning very much from our acquisitions, Modibodi and Knix and sitting together, especially in the sourcing area, how we can source in the most efficient way since these are products that we are not producing ourselves. I think if I might add, I think this is a fantastic opportunity for us. As you said, we come from the absorbency side. We have the knowledge very much, of course, from our incontinence care business. They come very more from the fashion side. If you put both together, this is a fantastic proposition which we can give to our consumers. This is why we highly believe in putting the two businesses or the two focus areas together. Okay. Thank you. Then vitamins? Vitamins. Yes. Issviva. This is an area where for sure partly we have the competence, but most of the competence we have not. We are working very selectively with partners because this also is a lot about innovation and continuous news to the category. We have selected partners which will provide us also the knowledge here, and we are building basically, we are using this journey to build our own knowledge. I think we decided that we really want to be fast in this market. We want to build a category, and that means that we need cooperations, and there are different ways to cooperate here in order to accelerate the market entry and the scale of these D2C platforms in especially in U.K. and in Brazil. Of course a further rollout is also planned. This is really we work with partners here which have the competence and years of experiences working with supplements, for example. Thank you. Once again, just as a reminder, if you would like to ask a question, please press star 1. The next question comes from Alexander Vilval of Pareto Securities. Hello. Thank you for taking my questions also. I would just like to follow up on the first question, I think. Regarding the, different contract lengths and so on, when it comes to selling, would you expect that the displayed 2 quarter lag when it comes to compensating raw material costs, will that be shorter in the future? Is that a safe, bet? Also a follow-up on that, which products and/or categories would you say would display the strongest price resilience if we were to see, a different cycle when it comes to raw materials with perhaps falling pulp prices? Thank you. Very good. I really look forward to listening both to Volker and Pablo when it comes to the lag, which is quite different between different categories. Yeah. Different also from different geographies. Maybe, Pablo, you want to start because you're really fast at adapting prices. Yeah. We have been historically quite fast to adapt price increases because we have so much volatility and uncertainty in some of our regions. We are well equipped, and we have been quite successful, as I already mentioned in the presentation, to catch up quickly and protect our margins while continue to invest in our brands, which is also very important as we go through these cycles. I think for Europe, I think as long as we are in this volatile in this environment, of course we have to be also very agile with our pricing model. I don't see any change. Long term, of course, we are not interested to negotiate continuously prices with our customers. I think it's really about value creation in the category. This is more our understanding of a partnership. I think we can might go to a longer period, but most probably never to the periods like annual contracts which we had in the past. I think in the near future, as long as these markets stay volatile as they are, we have to be also super agile. I think this is accepted by all retail customers. Okay. Where are we most resilient then? Do you want to start, Pablo? Yeah. I think, the type of products that we have are quite resilient. Of course, what we see is the stronger the brands, the stronger we invest behind our brands. This really helps us in maintain a willingness to pay and as you say, the right resilience of our products through these, different cycles. I think it's the same for you. Must-have brands, strong brands which need to be on the shelf, high consumer loyalty. These are the most resilient brands which we have for the businesses, parts of the business. The other ones, of course, it's a different situation. It's very similar. Yeah. With strong brands, we talk about brands with the product superiority always, which means that customers and consumers, they might try something else, but as long as we have product superiority, they will eventually come back to us, which makes, of course, those brands the most resilient. Thank you. Again, if you would like to ask a question, it is star one. We have a question from Faham Baig of Credit Suisse. Hi. Good afternoon, guys. This is Faham Baig from Credit Suisse. Thanks again for the presentation. A couple of questions from me if that's okay. Could you give us an update on where we are on the Cure or Kill program? Maybe give us a brief history on how much of the portfolio you may have already cured or killed and what the ambitions are for the next stage of the program. Secondly, on consumer tissue in Europe, we've been through a highly volatile and challenging environment which, Volker, you've defined as the perfect storm. When that storm comes to an end, how do you see industry returns comparing to when we first went into the storm? Thank you. Okay. Maybe I'll start with the Cure or Kill, which is a program we started six, seven years ago already. Initially, we had a look at our entire footprint, very much focusing on our plants, our production footprint, but also on the strength of our brands and our market positions. For the first two, three years, we saw that many of those positions were unsustainable. They weren't cost efficient, the brands were not strong enough. We didn't have product superiority. We actually killed. We left or sold a number of those positions, having a significant impact on top line of 1%-2% per year for the first two, three years. Eventually, the program turned into becoming a management tool that we are using every year, which means that. Approximately 10% of sales. The product category, market combinations that have the lowest relative performance, they are always in Cure or Kill. This has changed dramatically with the costs and with the development in the different markets. We focus in on those for 18 months and do everything we can to make them cure, of course. Again, there are examples. I think this year, Pablo, you took out the baby diapers business in Latin America, for instance, where it doesn't work. So it's less visible in the top line, but it's contributed several billion SEK, actually to our adjusted EBITA over the seven years, so it's a very, very efficient tool. What we're seeing now and going forward is that we will do a renewed effort based on the current market circumstances. The previous programs have been very much focused on consumer tissue and baby and look wider into all our categories in all our markets. We think that it's possible to see more opportunities for this program as it continues going forward. What happens when we come out of the perfect storm in Europe specifically. I mean- Volker? Yeah. Let's talk about Consumer Tissue in Europe. I must say I'm very confident on this market. Why? Pricing was the dominant element for many, many years. I think in the last three years, I would also include the COVID period here, many of our retailers have made an experience, some of them a very, very painful experience. I think supply security, and I would also say financial robustness play a completely different role than the pricing element. I think, as I said, some of them have very made very bad experiences. I see us at Essity very well positioned in this environment. My other firm belief is sustainability is absolutely key. We are leading. We have many. I talked today about Cushelle, about Wheat Straw. We have packaging solutions which are absolutely superior, so we have a lot to offer. I must say, I'm very, very confident for the big players that we can come to very, very strong performance levels after the perfect storm, but also after COVID. Good. I actually see that there are no more questions, and it's time to wrap up. Thank you, Magnus. Thank you, Volker. Thank you, Pablo. Of course, thank all of you who have listened and joined, hopefully the three days. You will find the replays on essity.com. With this, we wish you a nice weekend. Thank you and goodbye. Bye. Bye.