Chat with Fredrik Rystedt, CFO of Essity. We're also joined by Sandra Åberg, Director of Investor Relations. I'm Victoria Nice, I'm the Lead Analyst on Essity at Société Générale. The format of today's session is gonna be a 50-minute fireside chat, which includes questions submitted in advance from investors on the line. The plan is to cover the recent strategic review news, the outlook for top line and margin in the nearer mid-term, and then briefly touching on some of the longer-term developments. On that note, I guess we should kick off, starting with the strategic review. Consumer Tissue is still the group's largest category exposure at over 40% of group. If the recently announced reviews of Vinda and the European Private Label Tissue business are to result in disposals, this would take Consumer Tissue to below 30%. Just wondered if you could touch on why specifically the company decided to review these two units? Were any other businesses assessed, and can we conclude that the remainder of branded Consumer Tissue is now considered core? Yeah, thanks. Thanks for allowing me to be here to start with, Victoria. I'll be glad to answer your questions. Obviously, I think we've been relatively public with our kind of long-term ambition to continue to grow in areas where the return is attractive, where margins are high and capital usage is low. Obviously, Consumer Tissue from that perspective is on the lower end of the spectrum when it comes to return. That's the reason why we have wanted to kind of in average, grow more in other high yielding areas. If you look at history, it's been a bit the opposite. There's been a very significant, of course, obviously attractive, but still significant growth in Vinda. We've also seen on the back of significant cost increase in pulp that just kind of the sheer net sales value of Consumer Tissue has increased as a consequence. In reality, Consumer Tissue as percentage of group sales has actually come up despite our kind of intention or strategy to reduce it. Basically, you can say that portfolio composition is the solution to address this and simply make Consumer Tissue a smaller part of our total net sales. We have assessed pretty much all our different assets and Consumer Tissue assets. The Private Label Division and Vinda are two Consumer Tissue units within the group that can be separated from the rest of the company without impairing our competitive advantage in other fields, so to speak. We are very much an integrated company. We sell of course both Personal Care products like incontinence, retail or feminine or baby products within our Consumer Goods setup. Of course, Consumer Tissue is an important part there. Specifically Vinda and the Private Label Division, you can say we are able to dispose of them without actually impairing our competitive power in any other area. This was the reason why we chose these two for the strategic review. Thank you. I think you've suggested that the potential disposals would actually be accretive to return on capital employed. A number of investors have noted that the 17% adjusted return on capital employed target by 2025 is unchanged currently. Is it fair to say that this would be reviewed or updated if Essity were to dispose of these businesses? Yeah. I think, to say the obvious fact, the 17% ROCE target relates to existing businesses, and that was set in the third quarter of 2020. Before that, we had 15% ROCE. For both these targets, the 15% and then subsequently the 17%, we said that that is for existing units. If we acquire or divest any business, we will reassess or review those targets and potentially come up with new ones. We've acquired quite a few companies since 2020. We have not changed that target, so, yeah. I think in the case of Vinda and Private Label, should those be divested, then we will most likely come back with or revisit those targets in some way. Thank you. Very clear. Then just thinking about any potential dyssynergies or stranded costs if, again, these reviews do lead to disposals. For example, could a disposal of Private Label, for example, see the average price per unit of pulp increase if Essity would potentially become a smaller buyer of pulp in that instance? Yeah, that's not our belief that that will happen. I mean, you're asking a general question on stranded cost and there are certain cost items that of course, where we actually have scale. There is an element of that, but it's really not very material. When it comes specifically to your question about pulp costs, we believe that we are sizable enough in the remaining parts of the business to continue to justify attractive procurement costs. We are not deeming that to be particularly material either. Okay, thanks. And then just on the timing. So far, Essity said they're not in a rush and timing is favorable as Private Label, which will be separate by year-end, has recovered from COVID inflation and you expect Vinda recovery to build through the year as inflation eases. Should we see a conclusion as a 2024 event at the earliest or perhaps even later for Vinda if volatility in China pulp prices means that recovery takes a bit longer? I mean, we haven't really kind of given a time perspective, but having said that, obviously when you start a strategic review, you create a kind of an element of uncertainty as to the future, and uncertainty is never good for any business, you can say. I think maintaining a healthy pace in these strategic reviews is of importance. Of course, with that said, we haven't given an end date, but we shouldn't kind of drag on with this for a very long time. That's not the intention. Time will tell, of course, but it's not the intention to drag out for years to come, so to speak. That's not the intention. Okay. Then just many consumer peers that we cover have struggled historically to implement strategic direction of Chinese subsidiaries specifically and eventually exited sort of due to challenges that that can create. Do you anticipate that exiting Vinda would lead to obviously lower volatility and better returns? Yeah, let me just state something that's very obvious to us. Vinda is a great company. It has market-leading positions or market-leading position in China and also elsewhere in Asia, and a really well-run company. This has nothing to do with China per se. We're very happy with the development of Vinda. We're happy about the management and the products and the way the business is conducted there. This is only a result of our ambition to reduce Consumer Tissue as a percentage of total net sales. I wouldn't agree necessarily with your commentary. This is only relating to Consumer Tissue. Fair enough. One thing that we're often asked about is how could a potential disposal of Vinda look? Could it be sold on the market or back to the company, as suggested in recent press reports? Is it possible that any exit could be gradual, once started, or that Essity may even retain some of its stakes still? Yeah. I think we are at a very early stage, Victoria, on the strategic review. Kind of giving any strong views on how this will be done would be much premature. I simply just don't have the answer. I think one answer, however, when you say, are we gonna sell off this in pieces, I think I just wanna make one statement here. I think it's super important that a potential divestment of Vinda is a solution that we find that's very good for Essity, but also for Vinda as such. Of course, obviously Vinda is selling products under some of our brand names like Tork, TENA, Libresse, and so it's important that this is a good transaction for all. Selling it in pieces, I would doubt that. That would not be our preference. You speak about the Essity brands. Does Vinda's licensing of those into at least 2025 prevent a potential trade sale in that instance? I don't think anything is nothing prevents anything. I think we will find solutions. This, when it comes to the trademarks that we have, as I said, TENA, Tork and Tempo and Libresse, I think we will find solutions for that. That's one of many things that we are working on during this strategic review process. I don't see any obstacles. Great. If we turn now maybe to look at sales growth and starting with volumes. On a full year basis, Essity is still expecting positive volume growth. Should we think about volumes building sequentially as pricing laps and the drain from Russia also annualizes from Q2, or is there any reason why this wouldn't be the case? I think it's really, really difficult to predict a kind of sequence for volume. Our estimate for the year as a whole is slightly positive volume. Of course, this is inherent also in our strategy. If you look at our long-term target for net sales growth, it is basically organically 3% and including acquisitions around 5%. If you look at how we define those 3%, then volume is the majority of that. Over time, we see ourselves growing in terms of course, on the back of underlying market growth and on the back of continuous strengthening market share. Needless to say, I think volume growth is inherent in our business model. For any given year or any given quarter, there may be volatility for all sorts of reasons around pricing or underlying market conditions. I can only refer to kind of our assumption for the year. What we are planning for is a full year growth of volumes, and we still believe that. Great. If we flip back to the Q1 where volumes beat expectations despite pricing coming in, again, also ahead of expectations, we just wanted to touch on two specific dynamics to help us think about future progression. The first was in Professional Hygiene, where volumes dropped off in Q4 versus 2019 levels and then recovered into Q1. We wondered whether Q1 benefited from a catch-up perhaps related to timing of price increases at all, which might not be there in Q2. If that's the case, is there any way to quantify this? Specifically on Professional Hygiene, volumes in Professional Hygiene? Yeah. No, I can't really comment on it really, if this is the case. We've seen generally a lot of volatility in volumes depending, of course, on one of the factors being price increases and/or general price movements. There has also been, you can say, an elevated volume volatility over the last couple of years. I wouldn't kind of. Part of it has been related to price, part of it has been to restocking or destocking. I can't really comment specifically on volumes. As a general remark, Victoria, we have over the last couple of years, we've been very vocal on that, we've always been kind of putting margins ahead of volume development. It is our role as market leaders on so many markets and categories to make sure that we compensate for the cost inflation that we have seen. We have been deliberately sacrificing volumes to achieve that target, and we've also achieved our targets in that respect. We'll see as we go forward, but the only comment I can really make, more as a general comment for the group as a whole, is the total volume. Exactly how that will play out category by category or in different quarters is very difficult to say. Still, sort of sticking on Professional Hygiene, Essity has been able to manage prices quicker in the division due to shorter contract lengths and volumes, again, has stayed recently very resilient. We wonder whether pricing has been less difficult in this area because Professional Hygiene customers are perhaps less price sensitive given that Essity products are a small part of their outgoings. Would you say that's a fair comment or assessment? Yeah, I think we're very happy with the price management and how that's been executed in Professional Hygiene. Generally just very pleased with the performance. I think it's both internal execution that's been well done. I think to some extent, a large portion of the Professional Hygiene business is related to sales or related to dispenser sales or system sales. Of course, that's slightly more sticky. In that sense, you can say it's less price sensitive. Of course, competitive pressure is always high in any given industry, so I don't think it's the only area. Perhaps a bit, it's been a bit more, I should not use the word easy 'cause that's not true, but it's been slightly easier perhaps to increase prices there. Still, we're very happy about the execution. Just sort of touching on that dispenser system point that you made. Does the sort of sophistication of those systems, which has evolved quite significantly over the last few years, if we think about things like Tork PeakServe, does that sort of make it more difficult then for customers to switch than perhaps five years ago? Yeah, you can perhaps argue in that way that dispensers are generally, it's not only our dispensers, it's also of course dispensers from competitors, that you have the products that you have, so to speak, that fits in those dispensers. In a way, yes. Of course, you can always change dispensers, obviously. I think the whole point with our dispenser solutions is actually to save costs for... I mean, of course it needs to look attractive and we believe it does. You also need to ensure that you create a cost in use, so cost of use for our customers that is attractive. Of course, the cost element is, will always be there for customers. It's not that they're completely price ignorant. On the contrary, they're very mindful of price. With our dispenser solutions, we're able to provide solutions with attractive cost for our customers. Using this as a springboard then into pricing more generally. Essity still took pricing in Q1, particularly in Health & Medical and parts of Consumer Goods, mostly in Personal Care, as we understand. Should we expect pricing in Professional Hygiene and Consumer Tissues to flatten off from here as raw material inflation is easing? Or would you say that further pricing is still needed in these areas? We don't really comment on pricing per se. You can say it's been a bit easy from a communication perspective in the last couple of years because every single cost line has been increasing sequentially every quarter. It has been very obvious that the pricing needs to come up, right, for our products. Now we are in a different situation. We see that a lot of input cost or materials are falling and of course, that creates a kind of a different story when it comes to absolute pricing. If you look at our margins and if you look at our progression in terms of profit, what you can see there, and we have showed that, is that the kind of gap between price and cost needs to continue to grow a bit. We have set very, very clear long-term targets, or it's not long-term anymore. We want to reach and we're committed to reach 17% ROCE by 2025, which means that we need to continue to strengthen our margin. Part of that story is continuation of the increase of the price and cost gap. Basically, where that needs to happen more than anywhere else is in the Health & Medical sector, and we continue that journey in Q1. For the other areas, More or less, we have compensated to a large extent. I think pricing when it comes to our products, will be very much depending on what now happens in relation to our input cost. It's difficult to give a view, but the overall price cost gap for the group as a whole needs to continue to increase. That makes sense. I guess one thing we're seeing in the press more and more these days is sort of demands from governments for retailers to start lowering prices. Just wondered in that context, have retailers begun to push for price decreases in Essity products? If not, why not? Yeah. I think there is no retailer on this planet that has not pushed for price decreases, even in the times when costs went up. They would always do that, of course. When it comes to legal pressures, of course, it's as I've already alluded to, it's very clear when you look at our margin development or result development, that we still have not fully compensated when it comes to price cost gap. We think that the retailer pricing, I don't really wanna comment on that. If your question is, are retailers pushing for lower prices in more general terms? Yeah, they've always done that, also in times when input costs go up. They will continue to do that, of course. Okay. Going back to what you said on Health & Medical, pricing has obviously been slower to catch up given the long contract structures, which means it takes longer to pass pricing through. Are changes to contract structures possible moving forward? I guess similar to what you achieved in Consumer Tissue with shorter contracts over the last couple of years. Yeah, I think to a degree, that's possible. I think, however, if you look at the kind of totality of the healthcare side, it's not likely that it will materially change. It's been kind of three-year contracts or tenders for a very long time, and you have these reimbursement systems, both of them inflexible from a pricing perspective. Of course, I think that what we have seen to a larger extent are clauses within those contracts that adjust for inflationary pressures, as an example. The fundamental structure of the market is probably unlikely to change. These are fairly rigid systems. I doubt it. We won't probably see the same kind of movement there, so it simply will take long, a bit longer. Having said that, of course, this is kind of a big disadvantage, as you obviously have seen over the last couple of years when input cost is increased, but it's also an advantage when input costs go the other way. Okay. And I guess putting sort of the pricing into context more broadly, how do Essity's pricing levels compare to competitors and even Private Labels currently? Are competitors mostly still catching up after Essity was quite early to take pricing? Does that actually mean that the price gap to Essity brands is now becoming relatively smaller? Yeah, I think it's a very, very difficult question to answer because there are so many geographies, so many categories, so I can't really say that. I mean, more as a potentially general comment, we tend to be tilted in general for most of our categories and geographies, towards the more, a bit more premium-oriented brand. As, if you take it as an average, we're typically priced higher, and this is not just because we're premium, we also have very strong brands. The brand equity of our different products and brands will just simply carry a higher price. Generally, I guess we are slightly higher, but I think that largely markets have caught up, I think competitors. There is a bit of a phenomenon when it comes to specifically Consumer Tissue and Private Label, because what we have seen there, if you look at Private Label, in more general terms, sales price is typically lower. That's part of the, of course, the story of Private Label. As a consequence, you will also have a higher portion of net sales that's basically input cost, raw material. If you have very significant cost increases in, let's say, pulp or similar, then obviously the prices of Private Label needs to go up a lot more. We can clearly see that within Essity, that where we have raised the prices the absolute most is actually in Private Label Consumer Tissue. This is basically where we have increased prices the most. If you look at retailers, you will not see the corresponding movement. Price because if you kind of take that development, that would have meant that the price gap between branded and Private Label should have narrowed over the last couple of years, but that's not been the case in retailers. On the contrary, you can see that they've held back on price increases on Private Label to support sales of Private Label and increase branded a bit more. I guess that what will happen here, if input costs come down, is that if anything, the difference between Private Label and branded will probably not increase a lot. I think it's a reasonably good story for branded products as we go forward. Great. Then just thinking about Essity's competitive advantages, we've seen that high service levels have really helped Essity versus many smaller players who actually struggled and even shut down production in some instances. I just wondered, are advantages from having that more stable supply chain receding a little bit now as the cost environment is more favorable? Could that potentially make either pricing or volume stickiness a bit more challenging from here? I don't wanna speculate on this. I can clearly see, I mean, if you look at the last several years here, during COVID, we continued to produce all the time. All our plants did. We were able to maintain production, we were able to maintain service levels, and we have been able to maintain good service levels also in times of significant disruptions. Clearly this is, of course beneficial to customers. I'm pretty convinced that we have an advantage there from a pricing perspective. Of course, you can argue that as disruptions in the world diminish a bit, that advantage goes away. I don't think that customers, and I can't say this becomes very speculative, but I think that in general, as a customer, retailer or institution or whoever you happen to be, you wanna continuously work with someone that you can trust to deliver under all circumstances that may or may not occur. I think that advantage of service levels or stability in supply in general will remain a benefit. That's absolutely our assumption. To quantify that, I can't do that. That's fair enough. If we switch now maybe to margin outlook and everyone's favorite topic of raw materials. You said in Q1 that raw materials are expected to be lower sequentially. Should we think about this as higher year-on-year still? With raw material levels where they are currently, at what point does the company see deflation year-on-year? Yeah, we actually refrain from commenting year-on-year. It becomes really difficult for everyone to kind of follow that because in the end, there has been a very significant spike during 2022, and then, relatively stable in Q1. As we then, suggested here in the last quarter disclosure, we believe that costs will come down a bit here in Q1, and also likely for coming quarters. That's our belief. Exactly when you can say the average to the average meets, that's a bit difficult to speculate on at this point in time. I think from now on, we will refrain from commenting. We will just basically say that where do we believe that in the coming quarters these costs will go sequentially. Okay, that's super helpful. Actually on energy, you said that the proportion of energy hedged in Q1 and Q2 is about 60% of Essity's usage. This compares to more like 70% through last year. We've had a few questions as to whether that lower level of cover is intentional as perhaps spot prices are expected to be more favorable. What portion of the remainder of 2023 usage is hedged? Yeah. For the year of 2023, it's roughly the same level, so it's about 60%. Your question, is it intentional? Yeah, it is absolutely intentional. Of course we will within the range that we have set in our energy hedging policy, we will always manage, so to speak, the exact level. Of course, time will tell where energy will go. Right now, it looks very favorable from the spot market perspective. Of course, that being slightly lower in terms of hedge levels is of course obviously beneficial in comparison to the higher levels we've had before. It's intentional. Cool. If we think about A&P is expected to be higher in 2023, but in Q1 it was flat year-on-year at around 5% of sales. How should we think about the quantum and the phasing of that higher spend through the year? Should we see this higher spend as a more normalized level moving forward? Yeah, I mean, first of all, when you say it was flat, it was in terms of percentage of sales. You gotta remember that we've also increased net sales very, very significantly as you saw. In absolute terms of obviously, the A&P has increased. We've maintained throughout the last several years a fairly high level of A&P, and this is very much intentional because we have continued throughout this period of turmoil, we have continued to launch new products, so the rate of innovation has maintained on roughly the same level, so a continued high pace of innovation. As we put innovation on the market, we also put A&P money behind it. We have continued to be aggressive also in times of tough circumstances. We are reasonably good at tracking return of investment when it comes to A&P, our general belief is that we have a very healthy return, both from a growth and margin perspective. We believe that there is an upside from an overall margin and return point of view from perhaps even slightly increasing A&P. Exactly as to how we sequence that in throughout the year, that I cannot comment because it will very much depend on exactly when we put different launches and different marketing plans, et cetera. Generally speaking, we are happy with the high level of A&P we have, and we see a potential positive value creation from potentially increasing it further, but we will see as we go forward. Is there a greater element of spend on promotions currently and through the year expected? I guess how is Essity balancing promotions with pricing in the current context? Yeah, I mean promotion is, of course, obviously an element of pricing, so there are many kinds of ways that you can adjust your pricing. Either you do that through much more, more promotions, or you do it with price adjustments or whatever. I think generally. We look at this as pricing in more general terms. Your question is, will promotion increase as we go forward? I don't wanna speculate, but if we see a very significant and decline of input cost, I think it's likely that potentially part of that will come out as additional promotion. Most likely, but it's very difficult to tell. Maybe on cost savings, you talked in Q1 about more opportunities from efficiencies as a result of the new organization put into place last year. Are you able to give some more color on what and where those might be? No, I think in more general terms, we are working with cost efficiencies both in COGS. We have our program that we refer to as the Manufacturing Roadmap. Mm-hmm. Of course, this is, it consists of a great many projects that we run in both our manufacturing or factory setup and how we manage flows. It's in distribution, it's in logistics. Of course, you have now seen a period of time where a lot of efforts within the factory setup has been, or a lot of focus has been, upholding service levels or managing disruptions. Our hope there is that as the world stabilizes a bit, we'll be able to focus more on underlying efficiency improvements. I think it's fair to say that when it comes to COGS, we have been able to continue to actually save money under the surface, but there has also been so much inflationary pressures on pretty much everything that it's been a bit hidden. Underneath, there has been a continuous high activity. We hope, as the world settles a bit, that we can focus even more on the COGS savings and that we also can see a bit more impact on the P&L. When it comes to SG&A, a bit the same thing. We are working on many different fronts to become more efficient there. We are creating hubs for our, some of our back office functions, and we're adding constantly functionality to those hubs. There are many, many different activities when it comes to cost control and cost reductions and of course, maintaining an adequate cost culture is so essential for our business. I think we've done that, so we'll continue as we go forward. Great. Just, and sort of taking SG&A aside, just specifically focusing on this year, I think you highlighted that we should expect cost to build within SG&A just in the near term. Could we expect or should we expect that to be smooth, or could there be some spikiness related to sort of the phasing of some of those salary increases coming through? I guess is there an offset to this, perhaps versus bonus payments and provisions for that being lower versus last year at all? Yeah, it's, I mean, bonus payments, I can't really comment on bonus payments. It's still kind of... It's just May, right? I can't really comment on the outcome of bonuses. That's premature. When it comes to your question on sequencing, yeah, I mean, as always, you will see a bit of salary increases coming in more towards Q2 than what we had in Q1. From a resource perspective, we're not anticipating more headcount, as an example, or more people. We're not adding resources from an SG&A perspective, but we, of course, see a slightly higher inflation than we have seen when it comes to salaries and wages. It's higher this year than we've seen previous years. My comment earlier when it comes to higher SG&A cost is mainly based on inflation rather than resources, if you understand. Yeah. Now if we sort of move to more longer term developments, so I think, I guess, the cost base Manufacturing Roadmap probably feed into this as well. Just if you could be a little bit more specific on the initiatives and the priorities to achieve that adjusted return on capital employed target by 2025. Yeah. Thanks for the question because we are, as I, as I alluded to earlier, we're very committed to that 17% target. We have defined something that we internally refer to as Roadmap to 17%. What we have done there is that we have set targets for every, of course, obviously business area or, and in fact, actually every unit that takes us combined to the 17%. Internally, there are many roadmaps. Of course the prescription or the recipe will be different depending on the unit. If I kind of sum that up in a bit of more holistic perspective, then as I, as I described earlier, the price cost gap will still need to increase some, and mainly that is the case in Health & Medical. There are pockets, other pockets in the, in the group where price cost gap needs to continue to widen, either through cost decreases or price increases or whichever. The price cost gap needs to increase mostly for Health & Medical, but also in some other pockets. That's part of the element. That's a big portion. Second, we know that we have been able to generate a mix improvement or margin improvement through mix for a large number of years, and this ties in well to what we talked about before with the A&P. Innovation and constantly putting that on the market is bringing higher and better mix performance and margin enhancement. Of course, incredibly important. A third element obviously is exactly what we alluded to, Manufacturing Roadmap, but also other efficiency gains. We still have a lot of efficiency that we should take out of our business, and both in COGS and particularly in COGS, but to some smaller degree also in SG&A. Those are the three, you could say, main components. Of course, in addition to that, we continue to work on also other fronts like investing or you can say allocating resources to the high-yielding areas and making that a bigger portion of our business and thereby increasing the overall average return. There is a final component, and that's capital efficiency. Largely, if you take the journey from where we were at the beginning of, or where we are at this point in time in terms of ROCE to where we wanna be in 2025, there is also a bit of capital efficiency, and mainly you can say that relates to working capital management and even more specific in terms of inventory, and we manage that in many different ways. There are quite detailed plans to get to the 17%, but these are the general highlights. Also one of the things that we can't avoid if we're thinking about the longer term is sustainability. Essity is a leader in this area, and just wondered if perhaps you could run us through your prioritized areas for the business looking forward. Yeah, I mean, first of all, this is not something that you wanna avoid. To your question, there is just the opposite because I think our general kind of view and, I guess this is shared by many, is that those that can manage sustainable development and sustainability in general in a good way, those companies will prevail and those that do not do that, they'll simply eventually become non-competitive or even die. It's not something we avoid. It's on the contrary, we want to continue to grow there, and we do that on many different fronts. Of course, if you take the environmental side, we attack that subject in many different ways. Everything from kind of how we save on energy in our processes or general emissions, so to speak. We have many different fields in which we work. We use hydrogen as an example for one of our plants in Europe or biofuel in another, and soon geothermal in a third as just one example. We are also continuously implementing technologies which basically is bringing much less emissions, green gas, greenhouse gas emissions. We are also working when it comes to sourcing of pulp, as you may be familiar with our alternative fiber sourcing, where we basically produce fiber out of wheat straw instead of cutting down trees. That's one example. We are progressing with that very unique technology and of course, as we perfect that and make that really efficient, we'll continue on that spree. These are some examples of what we do when it comes to our manufacturing footprint, but we work also in many other fronts. We continue to innovate and deploy products which are environmentally sustainable. Of course, I could refer to acquisitions that we've done with Knix and Modibodi with washable absorbent underwear that you reuse instead of using single-use products as an example. There are many other examples. For instance, our diapers with reusable chassis, as we call it, and you just change the core. We work on many fronts also on the product side. In addition, we work with our customers to ensure that they also become more sustainable in various ways, among others, through our Tork PaperCircle, where we take back tissue and remake that into pulp instead of just wasting it. There are many, many areas. Thank you for saying, Victoria, that we're in the forefront. Of course, obviously, we do that because we have a profound belief that this is absolutely crucial to reach where we wanna reach. I would also like just to kind of end this statement by saying it's also profitable, because pretty much everything we do in the field of sustainability is also generating either lower costs from lower material consumption or whatever it may be, or profitable because customers have an interest to pay for the product that we produce or efficient in other terms, in other ways. Generally speaking, this is not a subject for us to avoid, but just the opposite. If we spend just a minute on digital with e-commerce now 15% of sales in 2022. In 2020, Essity announced SEK 2.6 billion digital investments to the end of 2024. Just wondered if you could remind us where the company is on that journey and where you're seeing the main return on investment? Yeah. I think we're in the midst of that project. What that is that we have revisited pretty much all of our business processes in the group with very few exceptions, actually. We have, you could say, redesigned our processes to make them more efficient and of course, also to be able to serve our customers in a better way. Among others, for customers being able to track their shipments all the time and deal with our business 24/7, many, many different kind of customer friendly, if I put it that way, solutions, and efficiency is also part of that exercise. All of that, those process descriptions, we have institutionalized them in a new ERP framework. It's not just ERP, it's many different subsystems as well. We deployed the first version of this in pilot countries as of May last year. It's actually an anniversary now, and we're nearly, you can say, we haven't finished the pilot work. We're still perfecting that and making it the way we wanna make it. As we then have completed that, yeah, the creation of that platform, we will continue to deploy that across the entire group. We're in the midst of it. I think so far, so good. It is a major undertaking, but of course, if you wanna kind of create a new company or redesign all the processes of a company, that is a major undertaking. I think our hopes for this exercise remains very high and so far, so good. Great. Just sort of still related to that, you've been talking more about direct to consumer channels since Knix and Modibodi acquisitions. Where are D2C sales now as a portion of total sales, and where are the biggest opportunities to expand further? I think if you look at our kind of total, you mentioned the figure 15% there, Victoria, and if you look at DTC, it's relatively small still. Within that portion, it's quite small. It's restricted to mainly, you can say, our web shops for incontinence use, our TENA web shops that we have in multiple countries. As you referred to, we also did acquire the two companies, Knix and Modibodi. All of those channels are developing in a very, very good way. You could, among others, see a very healthy growth for Knix here in Q1 and the TENA web shops continue to be strong, or the growth tends to be very attractive there. As an overall context, it's unlikely that for the foreseeable future that that will be the dominating part of what we do. We are still very much working with retailers and their e-channels or pure retailers. That is the absolute majority. DTC for selected product categories, clearly very interesting for us. For the bulk of what we do, it's not the main channel. Cool. Thank you so much. That actually brings us to the end of our session today. Thank you very much, Fredrik, for your time and for a really interesting discussion, and also to everyone else on the line who joined. If you have any follow-ups, you can always reach out to me. Have a good day, otherwise. Thank you very much. Thank you for listening. Thanks, everybody.