Orkla ASA
Q1 2018 Earnings Call Transcript

Published: 25 Apr 2018

[Executives:]

Peter Ruzicka - CEO Jens Staff - CFO

[Analysts:]

Martin Stenshall - Danske Bank

[Peter Ruzicka:]

Good morning, everyone, and welcome to Q1 presentation for Orkla. We have summarized this first three months as a quarter below expectations. Actually the underlying business continued to perform well, with several factors have offset our improvements in the quarter. Despite underlying growth in our brand consumer goods business we see a flat organic growth performance. And there are three main reasons for this, the first one is that we have lost the regular distribution every month in confectionary and snacks; secondly it's the timing of Easter; and thirdly, the cold first quarter delayed seasonal sale of our ice cream ingredients business. But let me add some more granularity to these effects. Easter took place in Q1 this year compared to Q2 last year. As a result, our businesses have three fewer sales days which is only partly compensated for increased Easter demand. Adjusting for both Easter and the loss of regular distribution, the organic growth rate, which to be in line with the market development and Easter effects will even out between quarters, we have addressed the loss of distribution by launching our own chewing gum under our toothpaste [indiscernible] which you saw the ad. The launch has been well received and has already taken 17% market share with one of their big retailers in Norway and Denmark 1,000. When we lost the distribution agreement with Unilever's HPC product in 2016, we launched complete series of skin care products under the brand. And actually after a very warm year, Dr. Greve had become the number one brand in the leading - and taken a leading market position in both the lotion and shower. Our focus operational efficiency and cost continues. Underlying fixed cost is down, but this is partly offset by increased advertising investment in the quarter. We had yet another challenging quarter. They continue to grow both volumes and sales, but profits were significantly impacted by higher raw material prices and weak results in the marine segment. All in all, our earnings per share continued - from continued operations came to NOK0.68 in Q1, down 12% from the same quarter last year. But now let me share some more detail on the organic growth development in the quarter. We continue to see Martin growth across our core markets. Our foods and Food Ingredients business experience quite good organic growth in the quarter, but this was largely offset by the loss of regular distribution in Confectionery & Snacks and also the timing of Easter, which is impacting, especially in Norway. Growth in food was broad-based with exception of Norway, but Easter effects were clearly negative in the quarter. Ingredients had a good growth in bakery, and vegan-based products, but that was partly offset by delayed in ice cream season. When it comes to Wrigley, Orkla had approximately NOK250 million in sales from the regular distribution agreement. And that corresponds to approximately 4% of Confectionery & Snacks sales and adjusting for this effect in Q1 would increase Confectionery & Snacks' organic growth to approximately 1.15% and on the total for Branded Consumer Goods the total would be 0.8%. The timing of Easter and the difference in number of sales days can have a quite effect on sales between Q1 and Q2 between years. Overall, timing on Easter had the largest effect on Care, but there is no consumption effect. It is only the effect of less sales days, followed by Foods and Orkla Food Ingredients. The effects on Confectionery & Snacks is believed to be neutral, overall. In organic growth terms, the effect on Branded Consumer Goods be a little bit more than 1% in the quarter. Flat growth is clearly unsatisfactory. However, adjusting for Easter effects, which should even out in Q2, improves the picture somewhat. Adjusting also for the loss of regular distribution and underlying growth more in line with the market where we operate. The launch of Solidox chewing gum will hopefully see the same success as we have seen with Dr. Greve and overtime compensate for the loss of the regular distribution. So moving over to the cost side. I think you've seen this before, my famous black. It's a very simple, but still it's very important KPI for us. We need to keep a healthy gap between sales and fixed cost growth and the fallen organic growth in Q1 has a narrow the gap, but lower underlying fist costs has contributed to a positive gap as you can see on the graph. And supply chain efficiency is obviously the most important driver of fixed cost improvement. So let's move on to footprint program. Since we started the supply chain program, we have decided to close down 30 factories, and actually 24 factories are physically closed down. But as part of our structural growth again M&A we have done, we have added or acquired 30 factories, leaving us at the same number as when we started the program. But over the same time, our sales has grown over 37%, effectively increasing the average turnover or revenue per factory by the same amount. And this is, obviously, very crude KPI, but nonetheless it's an indication that we are moving in the right direction. I would also like to mention that the target for us is not to have a few factories as possible, but it's the target is to have a competitive and efficient supply chain that can support all our businesses. And moving towards fewer, larger production units those are the same cost, but it also allow us to invest more in innovations in automation, robotics instead of spending cash on maintenance or losing buildings, and so on. As I said, our supply chain needs to support our business model, and it needs to help us to deliver tailor-made products to the local consumer. So we need to have good flexibility as well. And supply chain efficiency is a continuous process for us. There are two plans that we are currently being investigated to be closed and discussion with an over-affected people are ongoing according to the rules, usual practices, the laws and regulations. And those two factories are in Sweden and one in in Finland. I would also like to mention that no decision has been taken on those two factories yet. The bar chart to the right on this slide illustrates the improvement we have achieved in fixed cost in relation to sales. And actually, this is essentially the same as the black over red, but shown over here relation to sales. I'll then give you a more complete picture of how margins have developed. Reported EBIT margin was down 50 basis point compared to the same quarter previous year. M&A explains a part of this, but there is still a net underlying margin decline of 30 basis point. And this is clearly not illustrative for the potential we have in our business and this is somewhat disappointing. I will comment briefly on both the variable cost and other cost to give you a better understanding of this development in the quarter. Variable cost essentially represents our contribution ratio, that means contribution margin over sales. Increasing raw material prices have pressured margins through 2017, and price action started to show effects towards the end of last year. Raw material prices have stabilized in 2018, and they are relatively flat compared to the previous year. However, since the large part of what we sourced is down in euro and to some extent in U.S. dollar, margins are sensitive to currency fluctuations. And both the SEK and the NOK has weakened versus euro by approximately 5% and 7% respectively since Q1 2017. And given that, about 1/3 of our Sweden is in euro and 1/4 is in Norway, the effects volatility will impact margins short-term, explaining part of this 30 basis points decline in the quarter. However, there is also a negative mix effect notably from lower sales in Norway due to Easter - timing of Easter. The other cost is fixed cost and advertising. And as shown on the previous slides, we have seen a continued, positive development in fixed cost. So this is largely offset by increased depreciation and advertising in expense in the first quarter. And the low growth in the quarter also means we see limited fixed cost leverage. This should clearly improve as Easter effects revert in Q2. However, my focus is not running Orkla by quarter-by-quarter, but it's more on the long-term value creation over time. So if you look at the two most important drivers behind our EBIT target of 6% to 9% that is organic growth and it's margin improvement - underlying margin improvement. And since 2014, we have managed to deliver on average organic growth of 1.6% and an average annual improvement in our underlying margin of 50 basis points. And in terms of growth going forward, we continue to see an overall moderate market growth of around 2% in our markets. And this, of course, varies between regions. And we see higher growths in the Baltics, Central and Eastern Europe and in India compared to what we see and expect in Scandinavia. But equally important is also the channel shift where online and nongrocery channels have higher growth that we see in traditional growth rate channels. And it is a very high priority for us to be present in all the channels where consumer expect to find our products. So overall, our target remains to grow at least in line with the markets where - which we currently estimate to grow at around 2%. One Orkla is all about how Orkla can operate more efficiently across our supply chain and factory footprint are key components have made significant progress since 2014 by closing down 24 factories and are actually closer of 30. But a lot more to do in this area. We constantly seek opportunities to operate more across business areas and across geographies to better leverage on innovations, our go-to-market organizations and our support functions. We don't have an explicit target for underlying margins, but we see no less potential going forward, and we're confident that we will deliver on our EBIT growth of 6% to 9% in the full period 2016 to 2018. Before I leave the floor to Jens, who will go through the financials, I'd also like to announce that we scheduled our next Capital Day's - Capital Markets Day on 31st of October, where we'll go through and update our strategy, our plans and also targets for the next three-year period. So then I will leave the floor to Jens, who will go through the detailed financials and development by business area.

[Jens Staff:]

Thank you, Peter. As Peter mentioned, we saw progress in the underlying business this quarter, but several factors and special items offset the improvement in this quarter in specific. Let's start by looking at some of the important items in the P&L. Despite being a challenging quarter, we improved operating results by 7% in Q1. I'll briefly comment on the main levers. Adjusted EBIT for the Group was flat following a slow start in the Branded Consumer Goods, lower results from Orkla Investments and the temporarily higher HQ costs. I'll revert to the development in the Branded Consumer Goods area later on. Results from Orkla Investments included effects from a sale of a real estate property in Bergen Q1, last year. There were no transactions in this quarter. Results from Hydro Power were up 9%, following higher power prices and somewhat lower volumes. HQ costs for this quarter increased, and increase was mainly driven by timing effects. The cost on this line item should come down to a run rate of approximately NOK85 million to NOK90 million per quarter, of course, depending on the development of the Orkla share. Other income and expenses will vary over time depending on the a level of M&A activity and the restructuring activity, and the minus NOK27 million that we saw this quarter was related to supply chain restructuring activities that we do. Profit from associates, as Peter mentioned, was down 50%, and that's predominantly driven by Jotun. And I will revert to more details on Jotun later on. Regarding financial items, our debt level has come down as a result of the sale of Sapa. While net debt remains low, we still carry gross debt of approximately NOK5 billion, of which 2/3 is at the fixed interest rates and the average interest rate levels is approximately 3.5%. Our cash holdings and cash deposits, of course, carry lower interest rates. In addition, last year's financial items included sale of shares gain on sale of shares. And that we have non-periodic financial items of approximately minus NOK25 million and that is primarily driven by the relative effects on interest rate swaps. And last year, we had the same items, but then the opposite effects - the very positive derivative effects. The underlying tax rate is approximately 22%. As a result of the above, earnings per share ended NOK0.68 and that's down 12% from last year. Let's now turn to the performance in the Branded Consumer Goods area and then starting with the top line. This quarter, we lifted revenues in the Branded Consumer Goods area by 7.5%. As you noted, organic growth was almost flat at 0.1%. Adjusted for the lost Wrigley contract, as Peter mentioned, organic sales were up 0.8%. And in addition, we believe, the timing of Easter had a negative effect of more than 1% due to fewer and that's especially in Norway. But of course, it's hard to estimate these Easter effects precise, so this is our estimate. The Norwegian krone has weakened against most of our main trading currencies in the Q1 versus last year. And this gave a positive translation effect of 3.6% for Branded Consumer Goods. On the other hand, this positive translation effects mean higher costs on imported goods and raw materials. M&A contributed with almost 4% in Q1, mainly related to the HSNG and Riemann acquisition within Care, acquisitions bolt-ons within Food Ingredients. But we also have some negative structural effects due to the sale of assets. For instance, like K-Salats in Foods. Let's turn to the each of the business areas and then start with the largest one, namely Foods. Orkla Foods has a broad-based growth with positive impact from price increases. On the other hand, mentioned fewer sales stays due to the timing of Easter had the opposite effect. We grew EBIT by 2%. This was mainly driven by sales growth, positive currency translation effect and cost improvements. But this was partly offset by higher advertising investments in the quarter. The structural changes that I mentioned, for instance, K-Salats, also reduced EBIT in the quarter. In total, this resulted in flat margin development. Let's look at Confectionery & Snacks. After strong end of the last year, organic growth in our Confectionery & Snacks business dropped by 2.8%. The entire decline was caused by the loss of the description agreement with Wrigley. And adjusted for this, as Peter mentioned earlier, the organic growth would've been 1.5%. Profitability on this lost Wrigley agreement was a par with the average EBIT margin in Confectionery & Snacks. As Peter said, we launched our chewing gum on the well-known toothpaste brand, Solidox, which have had done a fairly good start and we are pleased with that start. Our markets outside Norway had a good sales on profit growth. And in Norway, the lack of the large price campaigns before and during Easter had a negative impact on the volumes sold. Cost improvements from supply chains continue to give effects on delivery results, but are offset by the negative volume mix, which led them to an EBIT decline of 7%. In total, EBIT margin fell back by 100 bps as a result of this mentioned volume mix effect. Let's move on to Care. Total revenues in Care were up by 12%, mainly driven by the M&A and the currency translation effects. Organic growth was slightly down. All business units in care were impacted by fewer sales days in the quarter as a result of the mentioned timing of Easter. In addition, as communicated in February, we had high HPC campaign activity in Q4, which also impacted the sales in Q1. Orkla Health and both had the good organic growth in most markets we also grew our painting business organically in most of the markets. However, our U.K. operations still experience the sales decline that is because of for last contract we have in Yosemite. And this in some resulted in negative organic growth for House Care. But we do believe a gradual improvement from the second half of this year. In some EBIT came in at 8.4%. This improvement was mainly driven by M&A positive translation effect. Margin were down 40 bps in the quarter because of negative dilution effect from M&A and higher input costs by a weakened Norwegian krone and Swedish krone against euro. Lastly, let's look at Food Ingredients. Food Ingredients grew the top line by 20%, of which 1.7% was organic improvement. Most parts of the business like bakery ingredients and products all had will progress. Sales were, however, negatively impacted by cold weather, which delayed ice cream sales in our main markets. In addition, fewer sales days because of Easter also impacted the top line and especially in Scandinavia. We lifted EBIT by 7.5%, driven by M&A. The delay in sales - of sales of ice cream ingredients clearly impacted the profits and was only partly offset by solid profit improvements in our bakery business. Also on the positive side, I'm glad to see would results in the turnaround companies that were not performing last year. They now show positive results. So overall EBIT margin was slightly down in the quarter. So to sum up the Branded Consumer Goods operations have good underlying progress, but this impacted by several negative temporary factors in Q1. Let's proceed to Orkla Investments. As mentioned in Hydro Power, Hydro Power prices, and somewhat lower volumes drove an EBIT growth of around 9%. Our real estate had no transactions this quarter, and the book value is about the same level as last quarter. Jotun, on the other hand, had another challenging quarter. Jotun continue to deliver growth in both volumes and operating revenues, except for marine coatings, which is heavily impacted by the cyclical downturn in the shipping industry. Marine coatings experienced a significant decline in results due to lower sales and the sharp increase in raw material prices. This explains more than half of the decrease in the total results year-to-date. Higher raw material prices, negatively affected positively also in the other segments, but that Decorative Paints continues to deliver good results. When it comes to raw material prices, it's expected to increase further, but growth is expected at a lower rate. Implementation of measures to improve profitability, like price increases and the cost control, will continue going forward in Jotun. Lastly, let's look at the cash flow and debt development. Here you see the main drivers behind the operating cash flow development, excluding financial investments. And pre-order cash flow from operations was impacted by a seasonally build-up of working capital and higher replacement investments. When comparing to cash conversion in Q1 last year, it's worth noting that, that the lower seasonal build-up was partly helped by positive nonrecurring VIT effects. Working capital remains a clear focus areas for us and, as Peter mentioned in our lastly quarterly update, that we are moving towards fewer and larger suppliers with better payment terms and this work, of course, continues. Net replacement investment was somewhat higher than the same quarter last year, mainly related to the ongoing ERP project and supply chain restructuring. And then finally, let's looks at the net debt development. At the end of last year, net debt was around 0 and since then, our debt position increased by NOK0.5 billion from expansion and NOK0.4 billion mainly from taxes. And then cash flow from operations reduced net debt by NOK0.2 billion. And this takes us to net debt to approximately NOK0.6 billion at the end of the quarter. So it's fair, then to say, that we have a very strong financial position. And before I leave the floor back to Peter, let me remind you also our bout our financial calendar for the upcoming Peter. As Peter said, we had set the date for the next Investor Day and of course, hope to see many of you in London on the 31st of October. So with that, let me leave the floor back to Peter for his final remarks.

[Peter Ruzicka:]

Thank you, Jens. I'll just give some final remarks and sum up the quarter before we go to move onto to Q&A. As mentioned, the underlying business continues to perform well, that several factors have offset our improvements in the quarter as we have been through both Jens and myself. So in sum, performance in Q1 has been below our expectations. Organic growth was impacted by the loss of Wrigley distribution, timing of Easter and a delayed ice cream season. Adjusted for Wrigley and Easter, we estimate our organic progress to be in line with the market growth. As you also have seen, we continue to realize cost improvements from working more as One Orkla, and our cost programs are as planned. This quarter, these effects were offset by higher input costs due to weakened NOK and SEK and negative mix effect, especially Norway due to the timing of Easter. Jotun continues to grow both in volume and in sales, but weak results substantially higher raw material prices impact profit, but this is a cyclical business, we have seen this before, and we are probably at the bottom of the cycle, and it will pick up again going forward. When it comes to market growth, going forward, we continue to see or we expect a quite soft market growth, but we expect a rebound from Easter in the second quarter this year. We still face, of course, uncertainty regarding raw material prices and currency fluctuations going forward, but we continue to realize effects from cost improvements and price increases. As I mentioned, our target remain unchanged. We will work closer as One Orkla, we will continue to create top line growth, and we will continue to realize cost effects from our cost improvements program, and we are committed to deliver the 6% to 9% EBIT growth. Before we open up for Q&A, I would like to show you a few of our most recent innovations. As you see here on the stage our portfolio is growing. In Norway, this range is launched under brand by the but in Sweden, Finland and Baltics, it's known as Pauluns. And through line extensions and international expansion, we have grown the total Pauluns range by 42% annually since 2010, and it reached approximately SEK 250 million in sales last year. In Q2, we are also extending the portfolio in our and we are launching SKUs in the Baltic and the good thing about this is a very One Orkla example produced at the same factory, it's the same product, but launched under different brands in different markets to meet the local consumers. Our vegan brand, Anamma, recently reached SEK 100 million in turnover for the last 12 months. Sales were lifted by the launch of Anamma vegan formidable in February. And actually, after just five weeks on the market, it was the fourth largest item in the entire frozen vegetarian category with a value share of 4%. And One Orkla spirit, we are also launching Anamma in Q2. And speaking of Anamma, last quarter, I told you that we had been chosen as - to produce McDonald's McVegan burger from Anamma. It was launched in Sweden and Finland in the beginning of this year, and the launch has been very well received, and so far we have sold more than 1 million vegan burgers. And this is far above our expectations. OLV lentil chips is a lighter chips with less fat and more protein. It was launched in Sweden earlier this year, and it was voted taste winner by Swedish newspaper earlier this year. And sales has already contributed to growth of the entire snacks category in Sweden. As system being launched in Sweden this system is already a great success in Norway and is now being launched under local brand in Sweden. But, again, it's based on the same consumer insight, it's the same product but launched under a local name. And actually, brand in Sweden was recently voted number two environmental brand of all brands in Sweden. And the last one is a new launched under the brand, Daily Free Ice Cream, launched in Denmark. It's 100% plant-based, and it comes. So before we go to Q&A, we'll just hope for warmer weather and a good ice cream season in Q2. With that, I'd like to open up for Q&A.

[A - Jens Staff:]

Yes. No questions from the audience. Okay, are there any questions from the web? Yes the first question comes from [indiscernible]. How good is the listing of will and also says its great chocolate by the way, and so little so far [indiscernible].

[Peter Ruzicka:]

I will recommend to take a look in the stores and we are glad to see how the distribution is, but it is quite good. I'm not able to answer exactly on will. When it comes to Solidox, it's listed two out of three food retailers in Norway and more or less in all gas stations and convenience stores.

[Jens Staff:]

Okay. I have another question from the web if there is nothing else here. It's from John Ennis at Goldman Sachs. He actually has three questions. I'll just take them one at a time. You 6% to 9% EBIT target, do you believe this level of growth is achievable also in 2018 despite the slow start in Q1?

[Peter Ruzicka:]

As I showed, I showed 12-month development in organic growth and underlying margin improvement and Q1 that was lost of the Wrigley distribution agreement, it's the timing of Easter, which had an opposite effect last year, and we also mentioned that in Q1 that Q1 was so much stronger than, otherwise, expected due to timing of Easter. And the thirdly was late of SEK and NOKversus euro. We have seen this before. We are, in general, over time, we're able to compensate for either increased raw material prices or currency fluctuations in price increases, but that is delayed in our main markets as we have explained many times before, yes? So we believe we will be able to deliver this 6% to 9%.

[Jens Staff:]

Okay. Thank you. His second question is, will we continue to see margin contraction from currency fluctuations going forward or are you taking?

[Unidentified Company Representative:]

On margin development, but Peter said that we believe that we will be grow EBIT by 6% to 9% and then with the top line that we see in the market that implicitly means that we should see margin improvement also this year. And Peter explained the reason for the negative mix effect and hence the margin effects this quarter driven primarily by Easter. And, of course, you have to look at it at this not quarter-by-quarter, but the full first half year. Because the Easter comes every year, but we don't know it can vary which quarter if it is and when it comes to Easter, the shops are closed. If you look at the composition of the businesses that we have in the Norway, 40% of care sales is in Norway, 1/3 of food sales, 1/3 of Confectionery & Snacks and only 10% of Food Ingredients business, so mix itself is dilutive. This is not permanently, this is temporary. So it means that the - and we still have the same level of fixed cost, but then three less. So looking at this in some, we expect that looking at the first half year, the picture will be different. So a long answer, but I tried to explain what are the negative effect mix effects is for Easter and looking at the full years, as Peter said, 6% to 9% EBIT growth implicitly means at least 45 to 50 basis points so underlying margin improvements.

[Peter Ruzicka:]

Okay. Thank you, Jens. His last question is, is the 100 bps margin compression in the Confectionery & Snacks business due to the Wrigley distribution deal being higher margin than the rest of the business? Or is it more down to negative leverage?

[Jens Staff:]

Well, as I said, the margin on the Wrigley agreement it was - it marginally effects of margin. Meaning, it was more or less on average Confectionery & Snacks margins. And then, I have said that - or Peter mentioned that it was very low activity before Easter in Norway compared to last year. It was less pick and mix campaign, and it was less campaigns in general. So that obviously then effects this picture. So we don't guide don't margin is each business area, but and I think I have explained the Easter effects.

[Peter Ruzicka:]

Okay.

[Martin Stenshall:]

Martin Stenshall from Danske Bank. Could you please talk a bit about the progress with the supply chain efficiency program. I was just wondering if you could put some comments on the milestones and how that project is going. And then secondly, could you, please, comment on the stages of the ERP project implementation?

[Peter Ruzicka:]

Okay, I'll comment on the supply chain. I would say that I showed you our progress on factory footprint earlier today. But I would say that our supply chain improvement in generally in three areas. One is factory footprint, where we have announced closure of 30 factories. We are investigating two more right now, and we have physically closed 24, and we intend to keep on with optimizing our footprint program, but also as I mentioned there is no targets to have as few factories as possible, but to have efficient factories that are big enough, so we can invest in more technology automation, but at the same time maintain our flexibility to deliver the local consumer. The second part is continuous improvement in our supply chain where we are constantly working on improving our current business in existing factories taking our cost increased efficiency, reduced ways, reduced energy consumption and all this the a lot of small things that adds up. And the third is in procurement, which is also important part of supply chain, of course. And as we have explained, we are focusing now on fewer bigger supplier consolidating our porches with fewer supplies meaning that we will have better payment are better conditions and better payment terms going forward. But this is projects that are taking time, and that will show results down the road. I will leave it to Jens to comment on our common ERP project.

[Jens Staff:]

Yes, I can. And then the status is - the reason for doing this project that I've explained earlier. But the status is that we are now in the end a licensed face. Said during this year, we are doing annualizes, doing the sign building templates, and we are also doing some piloting. So that's the main activity in '18 and gradually '19 we will start to roll out this new ERP system. And the first business result will be the Care business area, and then also Food Sweden next year. So from March approximately, March, April next year we will start to roll out. I would say that overall status on this project is that we are performing according to plan. And then, as you know, as a consequence of this ERP project, we will have some, I will call it, CapEx profile because the overall cost for the system won't be higher the alternative cost of changing out a lot of the systems that we have to do anyhow. But the profile of the CapEx will be a little bit more front-loaded. But I have commented on the CapEx level earlier on, and it will be included in this plus minus 4% of net sales going forward. So no changes there. I don't know if that was a good enough answer, but...

[Unidentified Analyst:]

[Indiscernible]. Quick question on Confectionery & Snacks. You're not talking about anything about the higher sugar tax in Norway. Hasn't that impacted your sales at all or have you taken a lot of market shares in Norway?

[Peter Ruzicka:]

Yes, of course, we have a sharp increase in sugar tax in Norway valid from 1st of January this year, the increase was 83%, quite dramatic. And it is hard to say how much that has influenced demand, but what we have seen is that the retailers have had no campaigns on confectionery so far this year or very, very limited compared to last year, especially on pick and mix. That is probably related to their - that want to politicians to sell unhealthy goods. Secondly, we have seen a quite dramatic increase in border sales from Sweden, Denmark, Germany into Norway both in physical stores from Sweden without this text, but also selling in from both Sweden, Denmark, Germany into Norway. And is not only that we have this very high I think the words high-risk sugar tax in Norway, but we also have a possibility - regional possibility to import our duty-free, VAT free, tax-free from online retailers abroad as long as the total value of the invoice is below NOK350. That does not exactly help.

[Peter Ruzicka:]

Okay. No further questions? So thank you for coming here today.