Thank you. This is the Swedish Match full year 2020 telephone conference, and with me today are Lars Dahlgren, our President and CEO, and Anders Larsson, our CFO. In the investors section of our swedishmatch.com website, you'll find the presentation for today's call, which is intended to be viewed in conjunction with our prepared commentary. We encourage you to follow along with that presentation. After our prepared commentary, we will be taking questions. During today's call, there may be certain comments that constitute forward-looking statements and are subject to risks and uncertainties. Management believes that these statements are based on reasonable assumptions, but can give no assurance that expectations will be achieved. Risk factors are outlined in the latest interim report and annual report, which are available on our website. Swedish Match assumes no obligation to update information concerning its expectations. A recording of this call will be made available on the Swedish Match website. Slide three of this presentation reiterates the headline bullets from our interim report released this morning, and we refer you to the report rather than repeating them on this call. Slides four and five are also included for your reference, with slide four illustrating the growing importance of our smoke-free product segment, and slide five showing the geographic split for each of our product segments, as well as the group. With that, I will hand over to Lars, who will begin on slide six. Thank you, Emmett. The fourth quarter proved to be a strong finish to what has been an impressive 2020. The Swedish krona has strengthened versus the US dollar and other currencies, so our reported fourth quarter results somewhat masks the profit growth of more than 20% in both our smoke-free and cigar product segments. The financial performance in both the fourth quarter and full year would not have been possible without the remarkable and diligent efforts of our dedicated employees, ensuring that our consumers continue to have access to the Swedish Match brands that they enjoy. While changes to consumer behavior, travel restrictions and other governmental actions brought on by the pandemic have impacted volumes as well as planned activities for 2020, we have remained vigilant in complying with COVID-19 regulations and protocols, and in pursuing market opportunities that present themselves in the market in which we compete. Turning to the operational and financial developments of our product segments during the quarter, we have summarized some of the most notable highlights on slide six. ZYN in the U.S. continued to drive sales and operating profit growth for our smoke-free segment, but Scandinavia also performed well on an underlying basis. In our cigar segment, we had another very strong quarter for our HTL varieties, and we were particularly pleased to note the progress in our Dominican facility in further adjusting to the new operating environment with COVID-19 related precautionary measures implemented. On an underlying basis, our lights businesses have delivered solid results over the course of the year and on a full year basis, matches in particular improved its performance markedly versus the prior year. This past year also proved to be very active, an active year on the regulatory front. At the core of our regulatory strategy is a firm belief that consumers and societies are better off when properly informed about the health effects of our smoke-free products relative to cigarettes, and that attractive low-risk products that appeal to broader parts of the cigarette smoking population is a critical prerequisite for harm reduction to be effective on a wider scale. In the U.S., the adoption of ZYN Nicotine Pouches by smokers is evidence of this point, we were pleased to be the first company to have filed its PMTA applications for nicotine pouches with the FDA in March of 2020. Our cigar operations also engaged extensively with the FDA during the year, as SE applications were filed for our entire cigar portfolio. In Europe, the regulatory environment for smoke-free products remains underdeveloped at best and counterproductive at worst. Swedish Match remains a strong advocate for responsible, proportionate and harmonized product and marketing regulations and considers the current regulatory situation in Europe unsustainable. Turning to the next slide, we also made good progress on several fronts with regards to sustainability in 2020. I think it's quite evident that we are firmly committed to improving public health, given our investments in our smoke-free businesses and the establishment of ZYN Nicotine Pouches as the largest single brand of nicotine pouches on the U.S. market and in the world. I also would like to highlight another key area where we took important steps during this past year: greenhouse gas emissions. Our 2020 science-based target with a reduction of 12% from 2017 levels was not achieved despite a significant improvement per unit of sales. However, in 2020, we started to note tangible results from several of the initiatives that we have worked on for some time, particularly from our engagement with suppliers. In the past year alone, the reduction was 7% versus the prior year, despite the impressive growth of our business. Our growth ambitions remain intact, but we raised our CO2 reduction targets for the coming years to reflect our commitment to the science-based targets and the Paris Agreement. On slides eight and nine, we have provided the most important drivers for the financial development of the smoke-free product segment. With stellar growth over the year, ZYN Nicotine Pouches now contribute with the majority of the sales and earnings in our U.S. smoke-free business. During the 4th quarter, Swedish Match has seen continued increases in store velocities, maintain excellent store visibility, and also expanded distribution somewhat. Year-on-year growth was impressive. The slight sequential decline in shipments relative to the third quarter should be seen against the background of the temporary inventory build at a major distributor towards the end of Q3, as well as normal seasonal fluctuations that we typically see in the U.S., with one attributing factor being fewer shipping days in Q4. On the ZYN marketing side, the organization has been creative in managing challenges related to COVID, the COVID-19 situation. We are pleased that we could increase investment levels relative to previous quarters and look forward to further stepping up our activities in 2021. On the competitive side, we have seen a further ramp-up during the fourth quarter with relatively aggressive distribution builds, as well as the continuation of deep price promotions in selected markets and chains. For Scandinavia smoke-free, there were several unusual factors that impacted the reported performance. Similar to the second and third quarters, travel restrictions negatively impacted overall shipments but also elevated domestic Norwegian shipments. However, in December, shipments to Norway declined significantly as the trade and distributors destocked ahead of the January excise tax cut. In January of this year, as expected, inventories in Norway were replenished. Similar to the preceding quarters in 2020, on an underlying basis, Scandinavia smoke-free generated increased operating profit relatives of the prior year during Q4. For moist snuff, the volume shipment decline in the fourth quarter is not representative of our performance, and we remain very pleased with Longhorn's progression, both from a share and profitability perspective. For chewing tobacco, 2020 has been a year of unusually resilient consumer demand, and also in the fourth quarter, Swedish Match delivered increased operating profit despite slight declines in shipment volumes impacted by timing. Longer term, we consider other markets outside of the U.S. and Scandinavia, to represent an important growth opportunity for the company. Anders will now provide some further details on the smoke-free performance, starting with ZYN in the U.S. Thank you, Lars. Slide 10 is included for reference and illustrates the impressive growth trajectory for ZYN on a 12-month rolling basis. Slide 11 provides more details on the category development and market shares based on MSA data that captures shipments from distributors to the trade. Given the increased attention from competitors on the nicotine pouch category, it is encouraging to note the resilient market share for ZYN in the fourth quarter. Given the gradual ramp-up in competitive activity, when we look forward, we expect to see both an acceleration in consumer awareness and adoption of nicotine pouches, as well as some share pressure for Swedish Match as competitors continue to build distribution and manufacturing capacity. Slide 12 illustrates the great potential for the nicotine pouch category in offering adult cigarette smokers a viable and satisfying alternative. The adoption speed is rapid, and the trajectory in the West, where the category has been gradually established over the course of the past 4+ years, provides a clear indication of both the commercial and harm reduction potential. On that point, findings from some relatively recent consumer studies have been enlightening. While we are still gaining a large share of our user base from moist snuff consumers, it appears now that an even larger share is coming from people who smoked or used vaping products in the last 12 months. Also encouraging, the data confirmed that consumer interest in ZYN is virtually nonexistent among non-tobacco or non-nicotine users. Turning to some details for Scandinavia on slide 13. Despite the COVID-19 situation, the smoke-free category continued to demonstrate healthy growth in the fourth quarter, and Swedish Match estimates the Scandinavian consumption, including Finnish consumption, to be up by close to 4% for the full year, despite the restrictions faced by Finns. Across markets, nicotine pouches drove the growth, and Denmark was the fastest-growing market in the region, with a consumption that is estimated to have tripled during the year and now amounts to about 15 million cans. On slide 14, we illustrate share developments within the Scandinavian smoke-free market as reported by Nielsen. Swedish Match's Q4 market share declined marginally by 3/10 of a share point on a sequential basis relative to the third quarter and by close to three points on a full-year basis, demonstrating the importance of our objective to improve the share trajectory within the fast-growing nicotine pouch segment, as most of the decline is attributable to a changed segment mix. For snus specifically, depicted on slide 15, Swedish Match continued its positive trajectory in the fourth quarter with further sequential share gains driven by the strong performance in Norway. Slide 16 shows the market share for Swedish Match within nicotine pouches and this segment share of the overall market according to Nielsen. While the recent trend for Swedish Match's market share within nicotine pouches has been more stable with sequential share gains in both Norway and Denmark, we are far from satisfied with the absolute level and the full year performance. Turning to slide 17 and the U.S., our moist snuff business delivered on several important strategic objectives during 2020. Our Longhorn franchise continued to gain strength and appreciation among both retailers and consumers as its simplified pricing and promotional structure helped to further enhance brand equity. The moist snuff category showed good growth in 2020, likely impacted by COVID-19 effects on consumption patterns, and Longhorn alone represented a very respectable share of the overall category volume growth. Pouches continued to outpace traditional loose formats in terms of growth, and over the past several years, Swedish Match has been successful in achieving its goals of gaining share within this attractive segment. For chewing tobacco, the COVID-related impact on consumer demand is quite notable as the flat category development for 2020, as depicted on slide 18, stands in stark contrast to the historical trend of declining volumes of around 6%. Similar to previous years, Swedish Match successfully realized a positive price mix effect on its portfolio, despite continued growth of the value price segment as depicted on slide 19. During the fourth quarter, Swedish Match gained share within the value segment but lost share in the premium segment. Given Swedish Match's portfolio weighting to the premium segment, the growth of the value price segment resulted in a slight overall share erosion for Swedish Match. For the full year, with share gains within both the premium and value price segments, Swedish Match's share within the overall category was stable despite shifts in segment mix. We will end this smoke-free part of the presentation with slide 20, providing a snapshot of new products, packaging, and markets, which we have launched over the past year for snus and nicotine pouches. Despite the challenges brought on by COVID-19, our dedicated product development, supply chain, and sales and marketing organizations have continually adapted to provide consumers with new and upgraded offerings across our markets. We look forward to another active year in 2021. Turning to our next largest product segment, cigars, on slide 21. Our strategic objective for our cigar product segment is to maximize long-term profitability and cash generation. Through our approach, we have been able to record operating earnings growth and market share gains by participating in the overall growth of the category by benefiting from the consistent migration of consumer preferences away from HTL to natural leaf cigars, and by increasing list prices when market dynamics allow. With COVID-19 impacts on consumer demand as well as challenges in our supply chain for natural leaf cigars, 2020 has been an unusual year. Category growth was very strong, Swedish Match's ability to fully participate in the growth of the natural leaf segment was hampered by COVID-related production constraints at our Dominican facility, most notably in the second and third quarters. Production of natural leaf cigars has reverted to pre-COVID levels in the fourth quarter of 2020, we experienced market share growth within the natural leaf segment toward the tail end of the fourth quarter. Our ability to manufacture HTL cigars at our U.S.-based facility helped to mitigate our natural leaf production shortages, resulting in an impressive increase in shipment volumes of HTL varieties. It should be noted that while not representing a significant part of our overall portfolio, we took consumer prices up on our value price offering Jackpot during the fourth quarter from three for $0.99 to three for $1.90. In addition, we announced a price increase to the factory selling price of our White Owl HTL cigars in January 2021 of $0.01 per stick, the full benefit of which will not be realized due to increased federal excise taxes on the price increase. Pricing continues to represent a significant potential earnings driver in a category that has not experienced much in the way of consumer price inflation in the past 5-10 years. Slide 22 illustrates the acceleration in volume growth that we experienced over the course of 2020, as well as the dynamics behind our overall market share gain for the year. Despite the pickup in share within natural leaf late in the fourth quarter, Swedish Match's share within that segment was lower than in 2019 on both a fourth quarter and full year basis. With impressive performance during the year of our HTL varieties, the overall market share ended on a higher level in 2020 than in 2019. Slide 23 illustrates the composition of our cigar portfolio by type of cigar, demonstrating our continued tilt towards the faster-growing natural leaf segment despite the supply chain issues experienced in 2020. Moving on to slide 24 and our lights product segment. The light segment delivered another good quarterly result on an underlying basis. While the reported numbers for the year 2020 and 2019 both were impacted by income of one-time character, including capital gains related to our asset realization program in Brazil, the underlying results for both lighters and matches have been consistently good over the course of 2020. Match volumes grow in 2020, largely attributable to solid performance in the important Brazilian market. While lighter volumes were down for the full year impacted by COVID-19 related restrictions, the fourth quarter reverted to volume growth, delivering the strongest volume performance of the year coupled with a good mix. In addition, complementary products in Brazil continued to generate strong growth in local currency for the year. On the regulatory front, on slide 25, we have summarized the more notable regulatory events which have occurred during the fourth quarter. In California, the flavor ban for tobacco products, which also included a statewide ban of flavors for nicotine pouches, has been suspended at least until after a referendum in November of 2022. Swedish Match's non-flavored offerings of ZYN are already available in California, and ZYN with 4 new flavored SKUs in popular nicotine strengths is well-positioned in the event of a flavor ban versus the other larger nicotine pouch competitors. In Norway, it is encouraging that the authorities may have considered the difference in risk profile in their decision to cap the tax on snus, but not for cigarettes. In Germany, a number of local authorities, referring to food regulations, have imposed sales bans on nicotine pouches, and while these decisions have been appealed, Swedish Match has halted sales pending legal review. On slide 26, we have summarized relevant metrics for our interim report relating to finance cost, our financial position, and earnings per share. Net finance costs during the quarter were in line with the levels that we experienced during the past few quarters, bearing in mind the one-time charge during the third quarter related to the adverse Swedish ruling in an ongoing tax case. The weighted average interest rate of our loan portfolio at December 31 was 2.07% compared to 2.08% at the end of 2019. In December, we did a top issue of EUR 50 million on our existing 2025 bond with an all-in fixed interest rate in SEK of 1.4%. In January 2021, we repaid SEK 750 million of debt, and an additional SEK 1.1 billion will be repaid during the third quarter. The weighted interest rate on these repayments is notably lower than the current weighted average of our loan portfolio. The capital duration at year-end was 3.7 years with 98% of the bond portfolio subject to fixed interest rates. The EPS bridge illustrates the components of our 27% full-year growth in adjusted EPS. The adjustment highlighted in the EPS bridge refers to the tax expense and interest in total, SEK 286 million related to the mentioned adverse Swedish tax ruling. While we funded the full amount of the judgment during the third quarter, we continue to believe that our position is justified, and a leave to appeal has been filed with the Supreme Administrative Court of Sweden. During 2020, we made share repurchases in the amount of SEK 3.1 billion, which means that this year SEK 5.1 billion has been returned to our shareholders via share repurchases and dividends. Slide 27 restates our 2021 outlook from the interim report. On the point of expected negative translation effects, you may want to take note of some of the more important average exchange rates versus the SEK. The average exchange rate in the first quarter of 2020 for the U.S. dollar was $9.67, the NOK 1.02, and BRL 2.18. With that, operator, please open up the line for questions. Thank you. Ladies and gentlemen, if you have a question for the speakers, please press zero one on your telephone keypad, and you enter queue. After you're announced, please ask your question. Our first question comes from the line of Niklas Ekman from Carnegie. Please go ahead. Thank you. Yes, a couple of questions, if I may. Firstly, on ZYN, if you could comment a bit on the competitive environment. There's been a lot of talk about Dryft BAT having accelerated its rollout recently. You mentioned this on the call here as well on Altria. Can you just elaborate a little bit on how their capacity constraints compare to you? The store rollout, store availability, how that compares to ZYN. Just an indication here would be very interesting, please. I mean, first of all, this is Lars here. You should, of course, speak to them on the specific details. What we do note is a rather significant increase in distribution during the fourth quarter, especially towards the tail end of the fourth quarter when we talk about BAT and what's now Velo, which effectively was the Dryft product. In terms of capacity, there we rely on what they communicate and what you read, where Altria, as you probably know, speak about an annualized capacity of 50 million cans by now, but removing capacity constraints going forward. While we haven't seen any specific communication on capacity for BAT. You would assume that they have installed capacity or invested in capacity to be able to cater to the increased distribution that they are driving right now. They are relatively aggressive also when it comes to offers to the consumers, and, you know, whether this is temporary, should say, trial offers or not, that remains to be seen. Consumer prices down to $0.99 per can, et cetera, are relatively frequent. Have you [inaudible] manufacturers take around $3? Sorry, your line was severely cut there, but I heard. Sorry about that. Just a question if you had responded to that, or are you sticking to around $3 per can in manufacturer's take for ZYN? Our Q4 net take is close to $ 3. We have continued to have relatively limited promotion as of this stage. Excellent. Thank you. Just also a general question on the underlying market for smoke-free products. How much of nicotine pouches, how much of this growth has been at the expense of moist snuff? How much do you think is incremental and mainly at the expense of cigarettes? If you could just elaborate on kind of the long-term trends you're seeing. I mean, I think we need longer data periods to be able to give more accurate answers to those type of questions, especially in a year like 2020 impacted by COVID. We, you know, we did see a category growth of around 3% in moist snuff. We continue to note that the relative performance within the moist snuff category was the weakest in the Western region, where the nicotine pouch category is most developed. I mean, official cigarette numbers don't really indicate any detectable impact from nicotine pouches per se. At the same time, as Anders explained, on consumer research suggests that when we previously have been talking about half of the consumers being sourced from smoke-free and half from other, most notably cigarettes and vape products. There are indications in this latest round of research that the share of consumers coming from cigarettes and vape may be a bit more than 50% for ZYN. Good. [inaudible] are you following your competitors or are you leading price hikes? I didn't hear the first part of your question, but we don't comment on future pricing activities. Sorry, the question was if you were the first to raise prices in cigars or if you were following your competitors. If you take the Jackpot brand there, our one of our competitors, at least, have been fairly inactive in that segment, which is something that may be related to production constraints. In that sense, we were leading, you can say. Okay. Very good. Thanks for taking my questions. The next question comes from the line of Richard Felton from Goldman Sachs. Please go ahead. Hi, good afternoon. Thanks for taking the question. Two from me. The first one is on slide 12, where you've changed the slide slightly and now show nicotine pouches compared to the cigarette category, where previously you were showing it compared to moist snuff. Does the change in this slide and some of your comments about the consumer research that you've been doing, should we interpret that as, you know, the way that you're thinking about this opportunity, or the opportunity for nicotine pouches in the U.S. slightly differently to previously? Related to that, the 4% versus the cigarette category that you've achieved in the western region, is that a reasonable benchmark for what you think that the nicotine pouches category can achieve nationally? What do the sort of the consumer surveys that you've referenced, you know, suggest as a, you know, a plausible target? That's my first question. Yeah, thanks for that question. When it comes to these nicotine or, sorry, moist snuff benchmarks, if you listen to our calls over the past years, we've been pointing out that we have provided these benchmarks to give a good reference point for the size of the category. Recognizing that consumers are also to a large degree sourced from not only cigarettes. Our view is and continues to be and is further strengthened by recent consumer research that we expect to see the share of, so to say, cigarette smokers and vapors as share of the inflow to nicotine, the nicotine pouch category to increase over time as the category becomes more established in the broader parts of the population. So yes, I would say that it is more relevant, we think, to view the size of the U.S. cigarette market as an indication of the long-term potential. We know from our experience in Scandinavia that once you really find satisfying alternatives that reaches beyond a niche acceptance among consumers that firmly become established, then the potential relative to cigarettes is very big. As you know, in Sweden, Norway, it's actually even surpassed cigarettes. On the second part of your question, generally, we see when we look at velocity levels so far, we continue to see similar trajectory in the so-called expansion markets compared to what we saw in the West. From that point of view, a conclusion could be that, you know, 4% after a similar amount of time in the expansion market could be a reasonable estimate of how the category will develop. However, having said that, you know, there are reasons why it could be both stronger and weaker than that. Stronger, one reason clearly is that, first of all, the western region, you should remember, has been sort of, say, established over time. I think it's fair to characterize the western region as, you know, relatively fully in distribution now, but that hasn't been the case over the entire four-year period. Also, we have a completely different competitive situation now in the expansion markets compared to what was the situation in the west when the category was established and built that could speak for an even faster adoption. However, you know, there may be differences in consumer preferences, to the extent that, for those that coming from moist snuff and so forth, when you look in the rest of the country, you will market the product in more states with relatively low taxation on smokeless products, meaning that the price difference may be more notable between nicotine pouches and moist snuff. Of course, there are, you know, other alternatives being marketed and developed. We expect our competitors not only to focus on nicotine pouches, but also on other next-generation products in their portfolio. Sorry for the long answer. Thanks. Appreciate the color. Just one follow-up, if I may, on cigars, where profitability was very strong in the second half. I appreciate some of that boost is from your operating leverage and temporary COVID factors, but also some positive mix within your HTL portfolio and some of the pricing that you referenced. Can you maybe help us understand and quantify those factors and maybe how we should think about margins for cigars in FY 2021? Thanks. Hello, Anders here. You're right that, I mean, we have seen efficiency gains from our HTL production over the course of this year. Of course, given the COVID situation, it's a bit tricky to foresee how that will play out over the course of this year. We are happy with the performance and hopefully we can continue to benefit from those efficiency gains throughout this year and while also growing within natural leaf, which is still our aim for 2021. Great. Thank you. The next question comes from the line of Andreas Lundberg from SEB. Please go ahead. Yeah. Thank you, and good afternoon, everyone. If I move to Scandinavia, I think you reported some snus shipment volumes down 9% year-over-year. Could you perhaps provide a little more color on the dynamic of this decline, you know, when it comes to COVID, Norway, you know, Finnish consumption, et cetera? That's my first. Hello, Andreas. Anders here. There was a quite steep decline in the fourth quarter and a big piece of that is the stocking effect ahead of the Norwegian tax decrease in general this year, which was quite notable, I think. It's fair to assume that that was an impact of around three million cans, which has come back from what we see in January now. I think if you adjust for that factor, you get a better sense of the underlying performance in so to say, a COVID environment with all the mix effects going on last year and continue to do so this year. Thank you. That I understand. Then on Norway and the tax reductions, can you say anything about what that has meant for the category here when it comes to, you know, for instance, manufacturer pricing, positioning for certain products at the start of 2021? Thank you. It's a pure tax change, and it's a weight-based tax in Norway. There you can say there is an ad valorem component because there is VAT on the excise tax. It varies a little bit from chain to chain. Generally, largely the Norwegian trade has adjusted its prices in line with the tax decrease, including the VAT effect. On the Swedish Match side, we have done it similar. We had already before the tax cut was decided, communicated to our trade, our so to say, what has at least historically been annual, what I would call normal inflation level type price increases. Nothing different in that respect on the manufacturing side, for Swedish Match at least. Okay. That goes for all your products, or has anything, you know, changed internally between various products or the market? I mean, there can be slight differences within the portfolio, but generally that is the case. Okay. Thank you so much. The next question comes from the line of Faham Baig from Credit Suisse. Please go ahead. Hey, guys. Thank you for the question. I've got three on ZYN if that's okay. Firstly, your market share seem to be holding up extraordinarily well despite despite you mentioning competition increasing price promotion and also distribution. Could you maybe suggest why that might be and what you believe ZYN is holding up so well? Related to that, you highlighted you stepped up marketing investment in Q4, and you're going to do a further step up in 2021. Could you help us give some quantification of what that marketing step up might look like? I know to your margins in ZYN, for example, in Q4, were about 55%, if I've done my math correctly. Any comment on margin potentially for ZYN in 20 21 might be a helpful indication for us to understand that a bit more. The final question I have on ZYN is you mentioned competition talking about capacity and no longer being constrained in 2021. Could you please give us an update on where your capacity lies for 2021, when you're likely to be no longer under constraint? Slightly related to that, I believe your current CapEx plans are such that you're targeting around 240 million cans as a run rate for 2021. Could you just remind us of your plan beyond 2021 and going into 2022 and thereafter, please? Thank you. All right. A comment on the market share, as we said in the prepared commentary, we are very pleased with the resilience during the fourth quarter. We did see that one of the big competitors was particularly active in the third quarter with price promotions. While still seen in the market from that particular competitor have been scaled down a bit, and encouraging to notice that ZYN then post-promotion picked up its share in several chains. Towards the tail end of the quarter an impact, or an increase in both distribution and promotional activity from the other large player. The word tail end there is important because you look at the full 13-week period on that slide in the presentation. We should expect that with that type of distribution build and promotional pricing that January market shares will look notably different. What's important, of course, is, you know, what's happening longer term. We remain convinced that we have a very attractive portfolio that stand very well versus competition. On your second question, Anders here, relating to marketing spend. I don't want to disclose the marketing budget for our U.S. operations, but obviously, we do, as also indicated in the outlook, expect to spend more on marketing initiatives. Obviously when you add incremental spending without adding corresponding volumes, that will have an impact on margin. I think it's fair to assume that it will also increase on the per can basis for 2021. I think that is about what I can say on that point. Specifically between the third and the fourth quarter, as Anders said, we did increase spending on the marketing side, which is very positive that we, you know, managed to activate and build the brand more so to say despite the COVID environment. Then you need to factor in also that in the high gross margin category, like nicotine pouches for Swedish Match, of course, those type of volume impacts, when you have a lower volume, that is also seen in the, on the margin side from its absorption effects and so forth. On your question on capacity, we are right now in the midst of starting machinery, so to say, line by line as we speak in this third phase, which is a doubling of the capacity compared to what we had installed before. It's going very well. Then we have taken further investment decision, as you referred to, including buildings expansions and so forth. Now it's going so well. We don't disclose specifically what we think we can manufacture this year. I think the important take is that we are kind of over the hill now, where we feel that capacity, production capacity will not be the constraining parameter for how much nicotine pouches we will sell in the U.S. market, going forward. We intend to make sure with hopefully continued investment decisions that it's going to stay that way. Brilliant. If I could squeeze one more question in. It's related to ZYN. Q4 saw If I look at the underlying trends in Q4 for ZYN, taking into account the three fewer shipping days as well as the inventory adjustment, you still did see a sequential slowdown in the category's growth. Would you expect that underlying growth momentum to increase in 2021 and in Q1 as those capacity constraints are no longer visible and you've got a step up from competition investing behind the category as well? I think longer term, we expect the focus on nicotine pouches in the market to be very positive for the for the adoption of the of the product among consumers. The type of very steep increases that we have seen in our portfolio from the West, where we came from a very, very high market share, now when so to say there is more to be shared in the rest of the countries, although the category may be following the West, that could imply a slower sequential growth for Swedish Match, if we're right in our assumption that the category will continue to grow very well. We will see a bit of pressure on the on the marketing side. When we look at the velocities in the category in Q4, the MSA data did indicate a relatively nonexistent sequential growth in the fourth quarter in the Western region. We wouldn't read too much into this in this short period actually, because it is first of all, it's always difficult around year-end, so you're comparing a year-end 13-week to preceding 13-week. We did actually note a bit of a destocking in California, which is a relatively large part of the Western region ahead of what could have been the flavor ban i n that market. Thank you so much. The next question comes from the line of Gaurav Jain from Barclays. Please go ahead. Hi, good afternoon. I have a few questions. You know, just following up on what you just said on the destocking. Look, you had three fewer shipping days, which anyway would have led to lower inventories at distributors. You are saying there is a further inventory drawdown. How do I triangulate that? If I look at Q1 2021, because it will have three extra shipping days, does it mean that sequentially just what you report would have a much higher growth? Anders here. I didn't follow exactly your math there, on the growth. I mean, what we said in the third quarter was that we had, we have three ex-extra delivery days versus the fourth quarter. We have another, I think it's, two extra versus the fourth quarter now coming in the first quarter. The distributor load that we had in the third quarter, was kind of a one-off for the third quarter. Sure. Okay. Maybe I can follow this up separately, you know, what will be the shipping days every quarter. What I'm trying to understand is that because of fewer shipping days, anyway, inventory would be lower at wholesalers. Why would you have a further inventory drawdown, which is what you are highlighting? I guess the question is that, is there a risk that these inventory drawdowns are sort of forecasting or suggesting a real slowdown in the overall consumer demand? Normally, distributors have the same kind of shipping days as manufacturers. The distributors have a similar pattern to the trade. It's not uncommon to see some drawdowns at the retailer and distributor level during the holiday periods, kind of November, December. That's not uncommon. You see it in chewing tobacco, moist snuff, in several of the categories that we have, where there's a natural drawdown. The two unusual ones when it comes to some reductions are in California, where there was some perhaps some drawdowns with the thinking that the flavored varieties would not be there. That's one. The other one was this major distributor having increased inventories in the third quarter, having reverted back, and that's what gives you that 2+ million can, two million to three million can shift between Q3 and Q4. One is more of an isolated distributor effect, and the other one is an isolated state effect. The fewer shipping days, or the fewer days during the holiday season and so forth corresponds to kind of a normal event, if you look at Q4 this year versus Q4 last year. It was really Q3 versus Q4 that we wanted to make sure we highlighted. Sure. That's very clear. My second question is on the losses in, you know, smoke-free, which is outside U.S. and Scandinavia, which were much higher in Q4. In fact, they were as much as in the first three quarters of 2020. Which countries are you investing, and how should we model this for 2021? Like, is Q4 2020 the run rate for every quarter going forward? Yeah. Anders here. I think one needs to be a bit careful of following the kind of quarterly spending here because it is it's not like we have a linear spending across the year. It can vary quarter by quarter a bit. We do expect continued investments going forward. I think it's fair to assume that those will go up on a full year basis. Then how it will look like quarter by quarter is it's not a linear spending. Sure. Okay. My last question is, you know, on the U.S., the six states are now offering MRTP-related excise tax reductions on products which have MRTP, and these number of states seems to be going up. I'm surprised that you are not keen to file an MRTP to just take advantage of these MRTP tax breaks. Could you just help us understand why that is the case? Sure. Nicotine pouches in most states have no tax at all. Getting an MRTP for nicotine pouches really doesn't have an impact on that. One of the things that we saw when we received the MRTP for General Snus is it is a quite positive thing, but it hasn't had a really dramatic impact, any notable impact really, on our overall volumes within the total market. The other thing is that when we do our pricing modeling for our moist snuff, for our snus, for our nicotine pouches, we do it with a comparative set. Nicotine pouches often are priced in line with premium moist snuff or snus products and so forth. Nicotine pouches already have, in most states, a notable tax advantage versus other smoke-free tobacco products. Okay. That's very clear. Thank you. The next question comes from the line of Robert Rampton from UBS. Please go ahead. Good afternoon. Thank you very much for taking my question. Looking at the total category, you've given us some indication of how share is evolving over Q4 and how you expect it to evolve in January. Can you give us some insight into how the category as a whole and your own product did over the quarter and early into 2021? I'm just keen to understand how that growth moves with the, you know, increases and decreases in competitive intensity. That's my first question. Thanks. I mean, if we take the fourth quarter, I don't have that number in front of me what the MSA data showed, but it was similar growth in the expansion markets compared to before, but virtually zero growth in the Western region. On an aggregate level, it was a slowdown for the category. When it comes to January, that is something we need to get back to. I mean, we only have a couple of data points there, and we are already into discussing very detailed data on short periods, which I think is a little bit dangerous in terms of drawing conclusions. As a general comment, you know, we would expect that with increased competitive activity and distribution and builds and so forth, it is natural to expect an increased shipments out to the trade as well. Great. Thank you. That's very clear. Just onto the margin. Can you kinda break down how much of the pressure for ZYN in Q4 was marketing and just how, looking at 2021, how we should think about that in the context of, you know, improved capacity, which I assume would reduce COGS per unit? Yeah, Anders here. I think, I mean, it's, we don't disclose that level of detail of exactly how much was driven by marketing spending on a quarterly basis. As mentioned, we do expect higher spending. You can expect likely some benefits from the higher volumes going forward. You should also remember that, I mean, with those one-time factors on shipments with extra distributor load in Q3 as well, that also had an effect comparing Q3 to Q4. Okay. Cool. Sorry, just my last question. Apologies. Just in terms of the market share evolution in the West versus the national region, could you give us an update on market shares in those two regions for 4Q? Yeah. We continue to have a higher market share in the West. There seems to be a bit of an increased focus from competition to try to make a dent into our strong franchise. Also we've seen very good resilience when competitors have come off promotions. It is notably higher in the West compared to the rest of the country. Okay. Versus previous quarters, is it fair to interpret that as stable? I don't have the exact split on a sequential basis, Q4 versus Q3 in front of me, but I think it was similar trajectory. Maybe a little bit down in the West, given where we were coming from. Okay, great. Thank you very much. The next question comes from the line of Kari Rinta from Handelsbanken. Please go ahead. Thank you, sorry for continuing on the same ZYN. When it comes to the U.S., if you look at the, you've commented you are no longer capacity constrained, whereas your main competitors are, at least for the next six months. Wouldn't it make sense to try to establish as wide of a distribution network as possible ahead of your competitors solving their capacity constraints? Besides capacity, I guess their distribution footprint is the sort of the competitive advantage that they have given their presence in the U.S. Is that part of your sort of marketing strategy for the first half, that you really go all out when it comes to adding new points of sale? That's my first question. I mean, as we responded on an earlier question, when it comes to exact capacities for competitors, you know, you should Ask them in particular in terms of BAT, we are not aware of any disclosed numbers. I would, I would urge you to take more of a view of sort of say what's what is going to drive market share is consumer demand out there in the market rather than focusing on exact capacities month by month. I mean, most manufacturers have the ability to adjust on a short-term basis, and then you have the value of inventory fluctuations and so forth. I would also do the math. If you take a competitor that speaks about 50 million cans annualized capacity, 50 million cans roughly corresponds to 30% of the category. Swedish Match has, you know, north of 70% of the category in the fourth quarter. I'm not completely sure that it's a correct conclusion to say that competitors, you know, have been capacity constrained in that sense. Of course, it could still have impacted their distribution builds and so forth. Okay. I mean, the question was that if we don't have to think about manufacturing capacity, how big of a competitive advantage is to have a wider distribution network or wider presence in terms of point of sale in the U.S.? I mean, it's clearly an advantage to have a broader distribution. Then you want to have distribution in stores that have good velocities as well, because The products need to move off the shelves and get in the hands of consumers. All right. A follow-up on that. If we look at Scandinavia, I mean, your market share in nicotine pouches is persistently low and, I mean, is that an indication of how I think I have probably posed this question before, but is that an indication of how an important it is to be a first mover? By that token, how worried or not worried should we be about the U.S., or is there something specific? Which specific should we consider when we try to sort of compare the Scandinavian market and the U.S. market in terms of what is a realistic, long-term market share for a, for a market leader? The first mover advantage is a good thing in consumer goods, as you know. I think it's a little bit difficult to draw exact conclusions or parallels between the Scandinavian market and the U.S. market. One, the trade structure is different and so forth, a notable difference is the regulatory framework with the FDA, where you need to go through the PMTA applications to introduce new products in the U.S. market. While as in Scandinavia, that is not the case. That is still the case, as you alluded to, that BAT has a very strong foothold in Scandinavia. They've done a good job on the product and marketing side as well as distribution as well that is helping maintaining their share. All right. Then finally, a short question on the PMTA and FDA that you mentioned. When you filed your application, what kind of guidance did you get from them in terms of how quickly they would get back to you on that? i.e. how long it does it take to get it approved? We know that it's in review and that they are active and, we're refraining from speculating on FDA response time because it's proven very difficult in the history. All right. Fair enough. Thank you. Thank you. We have one final question from the line of Sanath Sudarsan from Morgan Stanley. Please go ahead. Hello. Thank you very much. Quick one from me. First of all, coming back to slide 12, are you able to kind of give us some sense on how the change in consumption has happened, you know, in terms of how much is driven by distribution rollout and how much is driven by consumption increases in the existing source? What I would like to understand is what is the, in your understanding, the peak level of consumption per user per week for this category as it stands? Secondly, I just want to understand also, on the capacity front, you say you will be self-sufficient. Is there a change in the way we should think about the time lag you would take to add incremental capacity? Is it now going to be a faster rollout given, you know, all the basics are in place, or should we assume a similar lag in terms of when this capacity would come on board? The last one on Europe, I appreciate the amount of investment you put in, but could you just run us through some of the key performance metrics, you know, maybe stores added or consumer traction that you received in the last quarter, and what are you aiming at for 2021 along with the capacity you have for, to service that? Thank you very much. I mean, if we, first on the U.S. capacity, nothing has really changed in terms of lead times, I would say. Apart from that, of course, our teams get more and more experienced with installing new equipment. What you see now is more the effect of us having taking a lot of decisions and putting that capital into action. Which means that we now see that, you know, we will be able to stay ahead of the curve. When it comes to the growth and the reference to slide 12. Generally, we have seen the combination of very good velocity growth and distribution build. It's only the later periods in the West where we have seen a little bit more of the build coming from distribution and why we've seen kind of velocities maturing a bit. Still showing good trends if you look over the second half of last year and at a very attractive level. In terms of other markets, we have a small presence in several markets and we don't disclose specifics of each market. What we are looking, of course, at is, you know, establishing distribution in relevant chains and so forth. We are tracking velocities and market share and overall category performance. Can I just come back to that? Sorry, Anders. Just to remind you of the negative effects from the ruling in Germany on chew bags, which has, of course, affected performance in that sub-segment. Sure. Just on Europe, you know, what's the kind of strategy we should think about? I think as someone alluded earlier, there's clearly seemingly a first-mover advantage in the category. Of course, you need a great product, I'm not disputing that. How should we think about your Europe expansion? Is it more of trying to build a category which could be very expensive or is it more on building on some of the platform built by your peers? I mean, it's relatively crowded already in the European market. That doesn't mean that you cannot see there will be markets where Swedish Match goes in first. There have been several markets on the Balkans where that has been the case. That has been the case in Italy, but also actually in Italy, there is a regulatory uncertainty at the moment. Right now, that sales to that market have been halted until we see regulatory clearance. It's a combination, but you see a lot more products in the European market compared to the U.S. market, for example, also from small players that not coming from the big tobacco companies. All right. Thank you very much. Okay. As there are no further questions, I'll hand it back to the speakers for closing remarks. Okay. We would like to thank everybody for listening today and inform you that the release of our first quarter results will be on April 30th. Thank you very much.