Orkla ASA
Q4 2016 Earnings Call Transcript

Published: 9 Feb 2017

[Executives:]

Peter Ruzicka - President and CEO Jens Bjorn Staff - Executive Vice President and Chief Financial Officer

[Analysts:]

Preben Olsen - Carnegie Investment Bank Martin Stenshall - Danske Bank

[Peter Ruzicka:]

Okay. Good morning, everyone to Orkla’s Q4 Presentation. With also your presenter [ph] today, you have had seen the excluding preview of the new ad of Pizza Grandiosa which is of course very well-known brand in Norway. And actually in 2016, we sold more than 24 million Pizza Grandiosas in Norway. And for the first time in several years, we managed to increase our market share by as much as 2.5 percentage points. And also for the first time, we sold Pizza Grandiosa for more NOK 1 billion in 2016 and that’s why I have this t-shift today. I promised Grandiosa team that if you have two consecutive quarters with market share growth or a full year market share growth, I promise to wear Grandiosa t-shirt on the quarterly presentation, so that’s why. But then let’s go to the financial figures and 2016. I’ll remind you that we had a very, very strong Q4 2015 with 4.1% organic growth. But still looking at Q4 2016, we see solid improvement in both Branded Consumer Goods and in Orkla Investments. The business area, Care had a quite slow start to the year but has improved during the year and has three consecutive quarters of organic growth. Confectionery snacks delivered another very strong quarter. And I am also happy to see that we have an underlying margin improvement and despite a dilution from M&A. The acquisitions we did in 2016 and actually also in 2015 are going according to plan with synergies at or above target level. In my presentation, I will focus on the full year results and hence we’ll come back to the details on the quarter as well as full year. When we are leaving 2016, entering into 2017, we have branded consumer goods company that are much stronger. Our revenues increased 14% during the year. That’s partly due to organic growth and of course also due to M&A activities. Our adjusted EBIT increased 19% supported of course also by M&A but also strong cost development and synergies throughout the value chain. And our earnings per share increased by 30%, boosted by very good profit from Sapa. And the Board of Directors proposed to increase the dividend from NOK 250 to NOK 260 per share. In 2016, we ended the year with an organic growth of 1.8%. That is partly healthy volume mix and partly price. Of course the organic growth is also supported by contribution from distribution agreement then especially from PepsiCo. We have seen organic growth despite headwind on raw material prices especially in Food Ingredients. I will come back to that. In sum, we see that the markets where we are operating are growing. However, the growth is somewhat lower towards the second half of the 2016 and the beginning. And we believe the growth is more in line at approximately 2%. So that means with our 1.8%, we are slightly behind what we believe is the market growth. Oops, I am sorry. I am sorry I mixed up a little bit here. Okay. If we look at the strategy that we communicated during Capital Markets Day in September 2015, we promised to continue to reallocate capital from non-core assets into Branded Consumer Goods companies. And I think we have done that quite successfully during the year. So I think we can take off that. As mentioned, our organic growth is somewhat below what we estimate as the market grows, so I take that off as a yellow. We also promised to deliver an EBIT growth of 6% to 9% on the business we have at the time when we announced targets in September 2015. And we see a growth of 6.8% so we can also take that off. And we also promised to keep a stable dividend of at least 250 and board is as I mentioned proposing an increased dividend of NOK 0.1 to 2.60 [ph] for 2016. So I think we can take off that as well. These are the growths I talked about. We see Orkla Food has growth of 2.3%, of course supported by the distribution agreement with PepsiCo. Confectionery snacks delivers another very strong year well above market growth in their categories. As mentioned, Care had somewhat slow start but had the three last quarters with organic growth. So altogether, we are quite satisfied with development in Care and especially the second half of the year. And Orkla Food Ingredients as mentioned has seen a quite deep decline in some major raw material prices that hits the top line. And that is especially in marzipan and in butter blends. So that’s about top line and I will talk about out our cost development. We have earlier we have communicated this KPI black over red, quite simple metrics where the black illustrates the organic growth, and the red illustrates development in fixed cost level. And despite pushback from inflation and despite increased volumes, I am very happy to see that the gap is increasing. And this is thanks to restricting in supply chain closing down factories and also through continuous efficiency in our operations and of course also supported by successful integration of acquired companies during the year. We have also talked earlier a lot about utilizing the strength that lies within Orkla and we have done quite a lot of things. We have during 2016 announced closure of eight factories and as I said we started this restructuring program. We have announced closure of 23 factors altogether in 2.5 years. And less fewer factories, bigger fewer factories means that we can invest more in technology, more in automation, more in innovation and less in maintenance of buildings and old equipment. But there is a lot more to do realizing synergies throughout Orkla. For incidence we have in Orkla due to of historic reasons, we have 27 different ERP systems, so we have started a project to see if it’s feasible to develop and implement one common ERP system for the whole of Orkla. But we also see a lot of very good sales initiatives throughout the company. We have lot more cross boarder innovations taking successes from one market, introduce it other markets often under local brands but the same product and based on the same consumer insight. We are sharing innovations, sharing consumer insights cross markets, cross business areas and business unit. And we're also leveraging on our sales force in the markets where we operate. And I think one very good example is Orkla Foods Norway, they have now taken over the sale and distribution of confectionary and snacks products in the Urraca channel. And that means that we will have a more powerful sales organization for confectionary snacks in this channel as well as we will reduce cost. And during the year, we have also coordinated and set up a central export organization to coordinate all the export initiatives we do in the different business units and business areas into each single export market. And as I think I said when we introduced or presented Q3, we also established an online store at Alibaba and the Tmall in China selling Orkla products from several different companies and categories. During the year, we have also reallocated capital from non-core to our investment to Branded Consumer Goods. We have freed up approximately NOK 8.1 billion of cash from non-core and invested approximately NOK 2.7 billion in M&A in Branded Consumer Goods. We have exceeded Granges fully and through the acquisition of Hamé in Czech Republic, we have really strengthened our position in Central and Eastern Europe together with our current business there Vitana. So now in Czech Republic Slovakia, we are the largest supplier to the food retail sector. We have also doubled our business in painting tools through the acquisition of Harris in UK and we already had a painting tool business in UK. And those two combined will give us a very, very good position as well as possibility to utilize synergies as we go along. And when it comes to divestment, we will as I said earlier, we will continue to divest assets from Orkla Investments, but for us, it's more important to realize what we believe is fair value than time. We are not in a hurry. And I think Sapa is one such good example that being patient pays off. Sapa had a very, very strong 2016 with EBIT improvement of 57% from NOK 1.4 billion to close to NOK 2.2 billion, really impressive performance. And that is thanks to partly the value added strategy that Sapa has taken on. That means that we are going out of commodity products, standardize profiles with low margins into more sophisticated products where we do more machining, more advanced surface treatment, and working closer with the customers to make more specialized products where the value add is higher. But Sapa’s performance is also improved by reduced cost in extrusion Europe as well as successful restructuring of building and construction, as well as position tubing. So I think we can say today that the Sapa joint venture has been really successful. This shows the historical development in EBIT and return on capital employed. And Sapa JV reached the targeted synergies one year ahead of plan and 30%-40% ahead of what we believed was possible. And actually due to a very strong performance and a very strong balance sheet, Sapa is almost debt free by the end of 2016. The Board of Sapa propose dividend to shareholders of NOK 3 billion. But I also like to remind you and you can see that on the graphs there that we are of course facing more tougher comparables as we go ahead. But we still see potential improvement by doing more of the value add activities and utilizing the synergies that lies within Sapa they also have a project called 1-Sapa actually, so we see an improvement potential ahead. So now Jens will take you through the details of Q4 as well as the full year figures.

[Jens Bjorn Staff:]

Thank you, Peter. And as Peter mentioned, we saw progress both from the Branded Consumer Goods operations, as well Orkla Investments in 2016. Let's start by looking out some of the details items on the P&L. First, I'm pleased to report that the group EBIT improved by 19% in the fourth quarter, due to progress within Branded Consumer Goods and the good contribution from Orkla Investments, mainly related to the sale of real estate assets. Restructuring and M&A activities within Branded Consumer Goods both resulted in continued costs on the line item, other income and expenses. Strong growth from Sapa lifted profits from JVs and associates to NOK 161 million. I'll come back to more of the details on these line items later on. Overall profit before tax increased by 42%, ending at NOK 1.3 billion in the quarter and this equates to earnings per share or 1.09 kroner and that's an increase of 49%. Branded Consumer Goods revenues also rose 5%. And the next slide shows the drivers behind this growth. Revenue growth was mainly driven by acquisitions, primarily Hame and Harris for 2016. Our growth has now been in the company for a year and is included in the like-for-like figures in Q4. Organic growth should be seen against a very strong Q4 in 205. When sales were boosted as Norwegian food retailers competed to offer the cheapest Christmas products and that's as you know includes many Orkla products. In the first time - for the first time in a while, we have a negative currency consolidation effects, due to a stronger Norwegian kroner. And if the exchange rates remain unchanged, we will continue to see a negative translation effects going into 2017. Looking more on the details of our aggregated performance in the Branded Consumer Goods area, higher sales, cost improvements and acquisitions resulted in an EBIT growth of 5%. Our reported EBIT margin was on par with Q4 in 2015, despite as Peter mentioned the dilutive effects from acquired companies and distribution agreements. And we see continued improvements on underlying margin of around 60 basis points for 2016. That's driven by cost actions and synergies from acquisitions. Looking at each business area, I'll start with Oracle Foods. Compared with a very strong Q4 in 2015, foods had moderate organic sales decline this quarter. Cost programs had positive effects on the profit. Higher one off costs in 2015 also explained part of the improvement in 2016. The acquisition of Hame contributed to reported growth both on sales and profits, but had dilutive effect on the margins us did the PepsiCo distribution agreements. And as you know we focus a lot all innovations in Orkla. And I'll give you a few examples going through each of the business areas. Several companies within the foods have responded to the organic vegetarian and healthier trend. For example as you see pictures here, the launch of a frozen vegetarian single serving meal was a strongest launch for Orkla Foods Sweden in 2016. And then moving on to Confectionery & Snacks, I'm pleased to report another very strong quarter. The organic growth rate is nearly 5% over the year and that this is due to a broad based sales growth in most or our markets especially in Norway and Sweden. Innovations and new business such as distribution agreement with PepsiCo contributed to the sales growth. In the rest of the portfolio also showed growth measured against a very strong quarter in 2015. This sales growth in combination with lower advertising costs and cost improvements especially within our Latvian business resulted in EBIT improvements. And the next I'm really pleased that Orkla Care delivered another quarter of organic growth. After a challenging start of 2016, Care improved steadily during the year and finished the year with an impressive 2.3% organic growth. For the full year, Orkla Care achieved positive organic growth, despite still challenging market conditions. And I'm happy to see signs of improvement in the weight management categories as well in homecare segment in Q4. The EBIT decline in Q4 was due to the termination of the Unilever distribution agreement and the sale of Cederroth products or brands Asan and Allevo and higher marketing costs. And this higher marketing cost is describable to the Dr. Greve line extension. In terms of innovation, the most important launch for 2016 in Care was the extended Dr. Greve range Granges in Norway. This required some additional investments as I said, but it has already become a great success with number one positions in several categories. M&A had dilutive effect on Care margin in addition 2015 figures included as I said Unilever distribution with strong high margin sales. Lastly, let's look at Food Ingredients. The organic sales decline in Orkla Food Ingredients was related to price deflation in almonds and butter blends as also Peter mentioned. In addition, the loss of a tender contract in Norway in Q3 impacted sales in Q4. We have implemented costs programs and savings including minding reductions to mitigate this negative effect. Profits were hurt by weak profitability in butter blends and this effect will be out of the comparable figures as from Q2 in 2017. Poor performance in two local companies also added impact on profits in the quarter, and corrective actions have been implemented. Let's not forget that we have increased exposure in ice cream ingredients and are therefore more influenced by seasonal variations. And as you might guess, this have negative impact on the results in the winter season. Food Ingredients launched several new products under the Naturli brand which is a 100% organic and plum based brand. And the brand has more than doubled its revenues from approximately NOK 50 million in 2014 to approximately NOK 108 million going out of 2016. So overall, Q4 has been good quarter with EBIT growth of 5% in the Branded Consumer Goods area. And with that let's look at Orkla Investments. Starting with two fully consolidated areas, namely Hydro Power and Financial Investments. In Hydro Power, higher prices did not fully compensate for a lower production. And this resulted in a drop in EBIT from Q4 2015. For the full year, higher prices resulted in EBIT growth despite lower production levels, so the opposite for the rest of the year. And at the end of the year looking at the reservoir levels, we expect lower productions, lower production from Hydro Power going into the first quarter in 2017. In line with our strategy, we continue to free up capital through sales of shares and real estate assets. At the end of the year, our remaining portfolio of shares is close to zero while real estate portfolio had a book value of around 1.3 billion. The real estate portfolio will increase in value as we start building the new headquarters later this autumn or later. Let’s look at the largest assets within investments and that’s Sapa and Jotun. As Peter mentioned, Sapa has improved steadily over many consecutive quarters. And in Q4 underlying EBIT continued to increase. And this increase was driven by a higher share or value added business as well as internal continuous improvements. The demand for external products increased both in Europe and North America. In Europe, the level of growth has increased and we expect the moderate growth rate to continue. Also in North America markets are expected to grow moderately. Then moving on to Jotun. Jotun continues to deliver volume growth and solid underlying profitability in 2016 measured against a record year of 2015 and in fact although somewhat lower 2016 is actually the second best Jotun year ever. Jotun had continued good development in the Decorative Paint segment and then notably the Middle East and Southeast Asia. And sales growth was however offset by weaker marine and offshore markets especially during the second half of 2016. Higher provisions for claims on currency losses from the devaluation of the Egyptian pound resulted in profit decline for the fourth quarter and for the full year. Jotun continues to invest in increased production capacity in line with the company’s growth strategy and the investment activity in 2016 was mainly related to new production facilities in Oman, the Philippines, Myanmar and Malaysia. In addition to the R&D and new headquarter office buildings in Sandefjord, Norway. So to recap, a strong progress seen from Orkla Investments both from the fully consolidated businesses, as well as joint ventures and associates. Moving on to the net debt, operating cash flow was impacted by somewhat higher CapEx and working capital levels. Both relate to the structural changes in the supply chain in the branded consumer goods operations. In 2016, we have closed down six factories and started the process of closing down another eight. And we believe that CapEx levels will remain around the current level as we see now 4% of sales during the transformation phase. And then we shall revert to closer to historical levels which is closer to 3% of sales. The future investments should however be more focused on increased efficiency and innovation capabilities instead of maintaining a lot of smaller factories. Regarding working capital, inventory levels will most probably continue to be at the high level during this transformation. In the long run, we should be much more effective with our working capital with a more efficient supply chain structure. At the end of December, net interest bearing debt to EBITDA was 1.5 times and that's well below our targeted range. And the average maturity on net interest bearing debt was 3.3 years with an average interest costs or 1.7% in the quarter. And now let's look at the dividend. We’ve paid a stable NOK 2.50 over the recent years. The Board proposes to increase the nominal ordinary dividend level to NOK 2.60 for the financial year 2016. And finally, I may remind you all and I hope to see many of you at our Investor Day in Norway in June. And with that, I will leave the floor back to Peter for his final remarks.

[Peter Ruzicka:]

Okay. Thank you, Jens. Before we open up for Q&A, I will just give some comments about what we’re doing going forward and also show you some of our launches. We will continue to deliver on our strategy and we will continue to have high operational focus. And that means that we will have very high focus on the black over red KPI which is as you have seen have had very good development the last two years. But prior to that, it had a development where the cost increased too much. So that’s important KPI. We will continue to realize synergies throughout the whole organization in supply chain in the whole value chain but also in SG&A and in sales and marketing and operating more as one Orkla. There is a lot of synergies from acquisitions and we will continue to realize those synergies and that is of course an important way for value creation, but actually the greatest potential lies in our existing business by improving our existing business on a day-to-day basis. We believe we are well on track to deliver on the financial targets that we set out in Capital Markets Day September 2015 and we’ll work hard to achieve the goals and to keep organic growth at a positive level. And just regarding organic growth, we have seen that a lot of our peers in Europe in the Western markets experience decline in Q4. So compared to that we are happy with our organic growth of course in 2016 but even in fourth quarter even though it was low and we would like it to be higher. But before I finish, I’m like to show you a selection of our new innovations and I think this shows the strength of our innovation culture and how we respond to consumer trends that we see becoming more and more important. We have had a huge success with the healthy Falun brands in Sweden for quite a few years. These are products that respond to the consumer trend healthy eating, healthy living better for you and it was launched also in Denmark and Finland last year with great success. We are now launching it in Norway the same products but under a local Norwegian brand Bare Bra and these are healthy breakfast products granola, porridge and musli and also super rich for dinner will be launched now in February. In Sweden, we are now also launching Palun soup [ph] that you might you saw it on ad movie. These are chilled super healthy and clean vegan soups. And actually one portion of this soup is cover 30% to 40% of your daily need for vegetables. And we see an increased demand for both vegetarian and vegan food. And we’re also launching three new easy to cook vegan dishes under our Anamma brand in Sweden. And we see especially this trend this consumer trend is very strong and much stronger in Sweden and part of Denmark than it is in Norway, but Norway is coming. I mention consumer trends and other important trend is that people want to indulge but at the same time they’re also looking for healthier way to indulge with healthier snacking. So we are launching a new range of nut bars and snacks, perfect when you are a little hungry and you want a healthier snack. Popcorn, three different tastes and popcorn are naturally high on fiber and there’s probably the most healthy snack you can eat. New nuts produced dry roasted without oil and without added salt. And also the Kornmo brand in Norway which is well known I think for all the regions are launched whole grain, they launch a whole grain biscuits in Norwegian markets. And last but not least, Saetre cookies or snackers introducing a new biscuit with less salt and fat than competing products and of course completely without palm oil, which is also an important consumer trend we see. When we acquired Cederroth in Sweden, we also acquired the brand Grumme which is the Swedish brand for an environmental friendly detergence. We are now made a complete makeover of the design but also introduce Grumme with new and improved more efficient formulation. And it’s also more environmentally friendly. And last but not least, as Jens also mentioned Orkla Food Ingredients have this Naturli brand and we are also launching organic smoothies under the Naturli brand. There is no dairy products included, it’s just fruits and no added sugar at all. So this is the most healthy smoothie on the market. So to conclude 2016, we are very pleased to report progress both in Branded Consumer Goods and in Orkla Investments. But we are facing strong comparable quarters as we go ahead and we have strong focus to continue to deliver organic top line and of course bottom line. We will continue to improve our cost position and I am very pleased that we achieved underlying margin improvement in this quarter as well as 2016 in total and we will continue the hard work to reduce our costs and to improve margins as we go forward. But there is still a great potential, we still have even though we’ve closed down 23 factories, we still have 105 left, so we still have something to do also in 2017 and maybe even in 2018. And of course as I’ve said many times, utilizing the scale, utilizing the synergies that lies within Orkla working more us One Orkla. So we will continue. So with that, I will open up for Q&A.

[Q - Preben Olsen:]

Preben Olsen, Carnegie. You got to help me out with the Orkla Care result you seems - you seem rather satisfied that I don’t quite understand that because it’s about a year ago, you sold off Asan brand and about a year ago you handed back the Unilever brand. For the past three quarters, you’ve been delivering better results EBIT wise in Orkla Care, this time you’re well below and you have even had to spend more advertising money on your Dr. Greve brand which has been in the stores for more than a year. So I’m just wondering, what’s really happened in Q4, why the more advertising spend and why suddenly a bit below last year? Thank you.

[Peter Ruzicka:]

Well, as mentioned, we had both Asan and the Unilever brands in Q4 2015 with very good contribution. There also the figures for 2016. And that’s part of the explanation. We have also introduced the new brand Dr. Greve and we have supported Dr. Greve with quite substantial marketing efforts as well as increased marketing in total in the Care division.

[Jens Bjorn Staff:]

Yeah, now adjusted for the items that Peter explained now we see underlying growth in bit in Care that is quite close to the underlying growth that we see for the total BCG area.

[Unidentified Analyst:]

Looking into 2017, you have seen that Norwegian retail has made some promises to not increase the prices you have seen this introduction the best strategy by it and you also see some increasing illness to increase the share of private label in stores. So can you try to give some comments on how this is going to impact you and your products in 2017 and how you see to deliver organic growth and margins in 2017?

[Peter Ruzicka:]

Yeah, well first of all I'd just remind you that only 30% of our revenue is in Norway, 70% is outside Norway. We are best friends or at least we try to be best friends with all our customers. We saw a quite tough price competition by the end of 2015 and also towards Easter 2016 in Norwegian market, which of course drove volumes, but also hampered profitability for the retailers. We don't see this, I think the competition between the retailers in Norway is somewhat intensifying, but this is nothing different than what we've seen in other markets where we operate. I'm not saying that it's going to be easy. It's a tough job to fight against our competitors, and of course fight against private label, but we have done that for many years and we believe we will be able to do that also in 2017 and onwards.

[Unidentified Analyst:]

Hello, he asked color question about factories, how many ketchup factories do you have or Orkla have in Norway and how many overall?

[Peter Ruzicka:]

I think - I can’t talk about ketchup. The case is that just to answer your first question, we have one ketchup factory in Norway. Orkla, we are market leader in tomato ketchup in nine countries in Europe that’s all the nine countries where we are present. We are in this nine countries, we have seven different brands. We have local strong brands and we have nine different recipes. And we have too many ketchup factories and even though we have nine or seven brands and nine recipes you don't need seven or nine factories. So in the future, we will have fewer factories, I'm not able to tell the exact number, but we will of course have fewer factories also in the future, but in Norway we have one.

[Martin Stenshall:]

Martin Stenshall, Danske Bank. I got two questions. The first one relates to what was so that Sapa the existing Sapa is proposing a dividend of NOK 3 billion, so half away to Orkla. So could you please comment on your views on capital allocation going forward, you talked a bit about debt maturities, you also had a comment about Sapa not being in a hurry, but any comments willing to M&As for Branded Consumer Goods please?

[Peter Ruzicka:]

Yes, I can, the first priority as communicated many times for us when it comes to capital allocation is to grow the Branded Consumer Goods part of Orkla. And it will grow the earnings capacity and future dividend the capacity for us to first priority. And having said that we have a strong balance sheet so that we are able to take advantage of opportunities that will arise according to our strategy.

[Martin Stenshall:]

To be a bit more specific when comes to categories, product categories or regions you're looking at right now for Branded Consumer Goods?

[Peter Ruzicka:]

The first priority is to grow geographically where we have presence today and that is mainly Scandinavia and the Nordics Central Eastern Europe. And then looking at the Food Ingredients and knishes like for instance ice cream ingredients and Wound Care we have a broader European perspective on the growth. So that's a growth call it axis for Orkla.

[Martin Stenshall:]

And the second question is also regarding Sapa. We understand that there is more focus on value added products and services. So it sounds like there could be upside on the operating margin for Sapa. But could you please comment on what kind of effect that let’s say change would have on growth opportunities? Thank you.

[Peter Ruzicka:]

I am not sure if I fully understand your question, but I will try, so then you have to…

[Martin Stenshall:]

Maybe I can repeat the question is basically that we understand there is a bit of a change in focus in Sapa towards more value added products and services and it sounds like there could be margin upside in there will be more value added products, but what kind of impact would that switch have on growth opportunities?

[Peter Ruzicka:]

Well, if you look at the markets for Sapa extrude aluminum there is still the market total market growth is quite limited we’re talking about 1.5%, 2.5% approximately as we believe going forward, but we see that aluminum extrusion is being used in more and more complicated products and especially automotive and transport sector uses more and more aluminum, I think Tesla is a very good example of that were Sapa is a big supplier to Tesla both the first S model X model and so model three. So we don't anticipate very high growth on volume, but we anticipate higher margin development as we go into more value added products, that might also mean that we need to do more investments in more advanced equipment like CNC machines, surface treatment and so on. But I think the important thing is about not fighting for volumes that will lead to decrease margins, but working closer with customers and to develop solutions together with customers and I think we have Sapa is a lot of good examples of that as mentioned for instance with Tesla, but also with a lot of other car manufactures.

[Unidentified Analyst:]

I have one question from Ole Martin Westgaard in DNB regarding Easter effects. How will Easter affect the sales in Q1?

[Peter Ruzicka:]

Well we don't try to predict these effects as you know and don't guide on that, but it's a factor of the matter that in Syria there are more selling days in Q1 this year compared to last year and then you have the Easter last year or in 2015 in Q1 and 2016 or I mean in Q1 in 2016 and Q2 in 2017. So you know that’s and there might be affects that Easter as well because Easter this year comes rather late, so we have the week before Easter that's included in the Q2 and for this year before Easter is a strong. So to sum up more selling days in the first quarter so in theory 6.5% more selling days, however Easter placed in Q2 for 2017 with traditionally some positive Easter effects in the week before Easter. I hope that answered your question.

[Peter Ruzicka:]

Okay. No further questions. Okay, thank you very much for participating, and I hope you all will try our new Grandiosa that will find in the stores in Norway. Thank you.