Huhtamaki Oy Ser 1

Good morning all and welcome to Huhtamäki's Investor Call for the first quarter of 2025. My name is Christian Tammela, VP of Investor Relations. Today, we have a presentation from our President and CEO, Ralf K. Wunderlich, and followed by our CFO, Tuomas Geust. After that, we will have time for Q&A as always. So with further ado, handing over to Ralf.

Thank you so much, Christian, and good morning to all of you. Very happy to be here again and report on our first quarter results. We're also happy to say that we had a stable performance in a very volatile environment. The uncertainty in the environment clearly increased during the quarter. However, our financial performance was stable and at prior years level. We are also proud to say that our program to improve efficiency is proceeding well. and we are now at total savings of 87 million, with a cost to achieve of 25 million by the end of quarter one, hence really tracking well. We have also taken actions in our three focus areas, which I alluded to during our last call. Let's turn over and look at the tariff situation for Ruta Marki. Look, overall, the situation is evolving every day and it is way too early to draw conclusions. We are well positioned to manage the situation. Our business is mostly local and it's local for local with both the supply side and the demand side being local. So we are well positioned from that perspective to deal with the situation. We are monitoring and we are adapting to changes which might come. We talked about our strategy last time and I am happy to confirm that we still see it very much intact and we are supporting it with those three areas, our focus areas, and those will help us to drive our profitable growth forward. Those are number one, profitable growth supported by all levers, organic and inorganic. Second one is about disciplined capital allocation. And the third one is all around increased accountability and hence also increasing the speed of execution. Let me dive into a bit of detail on those. And I'm going to start on the right side with accountability and speed of execution. We are happy to report that over the last quarter, we worked on a number of those areas. We already on day one announced that we are splitting food service and fibre into two different businesses. They have very different focus areas and now they can manage those in a much more dedicated fashion. We also announced that we have now a global procurement organization. That procurement organization will make us even more competitive and will help us to drive for profitable growth. And then we are empowering the business segments in a number of different areas. We already announced that sustainability, especially operations and product related sustainability will be moved to our segments who can then implement much faster. The very same is true and already announced for our business development and strategy function. They will be close to their businesses, they will know what's happening in the markets and hence they will be able to support the businesses and the segments to act and react much faster. We are now also planning to bring human resources operations as well as local IT support towards the segments to strengthen them even more. Now the center and the functions in the center, which will remain in the center, are all about very specific expertise or center of expertise, governance, coordination, and all areas where we will create value by having those functions combined and coordinated in the center, namely tax, treasury, and procurement. We talked about disciplined capital allocation last time, and this remains a very important part of what we are doing. We are scrutinizing all CapEx. We are making sure that we are deploying it behind the most value creative projects. And then finally, we want to continue our profitable growth agenda. It's an environment which is very difficult and uncertain, and still we have an agenda of organic growth and inorganic growth, and we need to use both levers. On the organic side, we need to be even closer to our customers, continuously improve our relationships, and deliver on the basics. It's all around the basics. on time, in full, in spec, all the time, hassle-free for our customers that will help us to grow organically. And then we have the inorganic side. And it's important for us to find projects which obviously need to fit nicely into our strategy, are financially sound, offer us clear synergy opportunities, are in segments in which we are strong already with strong teams, And we are looking at board-ons, which are in-products and technologies which we know well, with management teams which fit nicely into our culture. I'm very happy to announce that we were able to sign and close, in fact, late last evening, an acquisition of Selwyn Farms in North America. It's a one-factory, privately-owned company. of sales with sales of approximately 20 million US dollars. It's in the egg business and flat egg and cartons egg packaging business, which fits really nicely to what we see as a growth driver for our North American business going forward. So it's a nice addition to what we think is a very clear strategic move for us. Let me turn to our business performance. From a group perspective, we see that a number of our key performance indicators are exactly in line with what we delivered in Q1 last year. So net sales in line, Although comparable growth was slightly decreasing by 2%, adjusted EBIT spot on last year with 98.5% and also our EBIT margin with 9.8% exactly in line with last year. We are proud to say that our adjusted EPS, however, did improve by 7% and stands now at 59 cents. We reduced our capital expenditure by 6.5 million and still are able to support our business growth really nicely. Some details about our segments. Let me start with food service. The soft demand in food service continues also in the quarter and we saw a decline of comparable growth of 4% in the quarter. That resulted also in a decline in EBIT. However, we were able to compensate a part of that decline with our efficiency measures and our cost out measures. So we are a couple of million, 2 million down on last year with a margin of 8.5%. It's important to state that in food service, our raw material input costs remained at the same levels as last year. Let me turn to North America. And as anticipated in the last quarter's result, we saw a very strong pull into Q4. And that pull of Q4 was, of course, then seen in the first couple of months of the quarter in 2025, as well as seasonality of our Easter holidays, which this year are much later, end of April, so in Q2. So both of that didn't help our top line and our comparable growth in North America did decrease by 3%, driven by both volume as well as pricing. I'd like to state, though, that two out of our three categories were at last year's level, namely food service as well as consumer goods. The sales decrease, which I was just talking about, really happened in the retail tableware category. Also in North America, raw material input costs remained at previous year's level. Our margin in North America for the quarter is 11.7% and we are showing an adjusted EBIT of 40.5 million euros. Let me turn now to flexible packaging. In flexible packaging, our focus on margin improvement continued and yielded in good results. We were able to really work on our cost out as well as on our overall product mix quite a lot. And we saw that even though that our comparable growth declined by 2% in our adjusted EBIT, which significantly improved by 5 million. And it stands now at 26.6 million with a margin of 8.1%. As in North America and food service, also in flexible packaging, raw material input costs remained at last year's level. And last but not least, fiber packaging. Fiber packaging continued its very strong performance. It did grow comparable growth by 10%, both driven by price and volume, and was able to bring this to the bottom line. So adjusted EBIT improved by 40%, now at 12.3 million with a margin of 12.8%. Here we were able to... with the input costs, raw material input costs, which did increase to pass on those additional costs to our customers. I'd like to give and hand over now to Thomas Goist, our CFO, to walk you through our financial review.

Thank you, Ralf. Happy to take over at this point and continue where Ralph stopped. The heading here says a lot, EPS driven by lower financing costs. So as Ralph said, we managed well in this volatile market to defend both our top line and our adjusted EBIT on previous year's level, reminding you of the fact that quarter one is normally one of the quarters which have variations between years. So that's also to be accounted for when we look at some of the numbers which I will be presenting. So the EBIT margin, we remain on previous year's level with a slightly improved EBITDA margin. And looking at the parameters contributing to that one, we are still getting the biggest benefits in our gross margin from value add. So managing the cost levels well, and obviously for industrial company, managing cost levels are significantly important when the top line is still moderately soft. Looking at the other lines of this more detailed, P&L, you can see that we have benefits from FX. The benefits from FX participate both to the top line and to the EBIT. And then on top of that one, we can conclude that our net financial items are contributing positively to the EPS. So it's really that part which is contributing positively as the adjusted tax rate remains on previous year's level You might remember that last year in Q1, we had a negative impact in financing cost from the devaluating Egyptian pound, which is not in the like for like numbers yet. Looking at the currencies, currencies are obviously a theme of interest for a company which has a lot of business in the US. The US dollar has been quite fluctuating over the last weeks, as we all know, going from up to weakening to 1.15 roughly. And you can see that compared to where we reported in the Q1, where the average rate was at a From our point of view, a good level of 105, closing rate 108. But as I said, the predictability of the US dollar is quite difficult at this point of time. Other currencies are mainly trending negatively in the first quarter, especially when looking at the closing rates. Happy to state that we remain on a good leverage level, so at a net debt EBITDA of two. So our deleveraging down to the two level stays firm. Our gearing is at 0.59, so also there we have improved over the last year significantly. And then if we think about the cash position, we have strong cash in the balance sheet and unused committed facilities of 404. So we are well positioned in volatile times. Our net debt is down to 1.252 billion. The loan maturities are on a healthy level. We are obviously, as you have seen, actively renewing our debt structure in order to maintain the maturity at a good level. Our average maturity is now at 2.9 years, when it was at the end of Q1 2025 at 2.6. Maturing facilities coming up, for instance, should shine here in Q2. The cash flow was a disappointment. It's a negative one, but there are some excuses to it as well, partly the seasonality in Q1, where the Easter this year in North America is in April, end of April, sorry, so really at the back end of the time. But clearly, looking at the working capital here, we are We are fat on both inventory and then you can see that we have been active in paying our trade payables. So cash flow is and remains a focus area and we are actively working to turn the trend positive. But I would say seasonality or timing is the main element here. As Ralph alluded to, our capital expenditure is on a lower level than previous year. We are not shying away from doing capital in the areas where we find the returns and where we believe the timing is right, but we are quite strict on going ahead of the curve when it comes to capital. Looking at the balance sheet, the balance sheet movements are to a great extent FX related beyond what I already said about the working capital. So main movements here coming from FX revaluations. And then looking at the return on investment, where we have been ticking upwards over the last year. We are now at 12, we were at 12.1 at the back end of last year, but as you can see, we are improving significantly versus previous year. Reminding you of the fact that it's quite a lagging indicator, so coming through slowly. When we turn to the long-term ambition, the long-term ambition, as you might recall, was launched in 2023. Here we have the story of compatible net sales remaining below our target ambition, so a minus two in the quarter for compatible net sales growth. uh adjust the debit margin uh slightly below uh our range as you recall we ended up for the first time on a full year basis last year at 10.1 and And then looking at the return on investments, there we are still 1% point below our lower corridor of the ambition. Net debt debit, as stated, remains on the low end of the corridor. And then today we will have the AGM deciding on the payout of the dividend. On the short-term risks and uncertainties, there is a small update with regards to the trade tariffs, including them in the risk profile. Beyond that, our outlook on short-term risks and uncertainties remain unchanged. And with that one, I would open up for questions and answers.

To ask a question, please dial pound key 5 on your telephone keypad. To enter the queue, if you wish to withdraw your question, please dial pound key 6 on your telephone keypad. The next question comes from Louis Merrick from BNP Paribas. Please go ahead.

Morning, Ralph and Thomas. Thank you for taking my questions. Just to start, if you could give a bit greater detail on the cadence of the volume development in the quarter, uniquely what you've seen early into Q2. Were there any differences really to call out between the months across the business, or is it fairly consistent throughout the quarter? And I've got one more follow-up. sorry louis we have a quite a difficult time uh getting getting your uh question uh i don't know if it's an echo echo in your background or whether it's our system okay maybe i can just repeat um if you could just give us a bit of a greater detail on the cadence of the volume development throughout the quarter i mean was there any sort of differences to call out during the quarter i know you mentioned in North America, they ought to pull forward and whatnot, but is there any sort of differences other than that to call out in the development for volumes through the quarter?

Yeah, thanks, Luis, for the question. Yeah, look, I think you could divide the quarter really in two parts. And we saw the beginning of the year, January and February, much softer than March. And as I alluded to, that was driven by a pull from volumes into 2024, especially in North America. uh so that is that's really explaining a part of it the other part in north america as i mentioned was explained or is explained by the seasonality of of easter which is then also seen on the balance sheet side with increased inventory so there is that story and and mainly mainly in the retail market and we see of course now with easter in april we see that of course going now in our direction in April with Easter now in April. So we, of course, see that trend now reverting into the other direction for April. If you look at the two others, so for food service, we see pressure already since a number of quarters. People just don't have the spending power to go back to QSR. in the way we are hoping for. We see promotions coming. We see more and more promotions coming from our customers to bring the traffic back up. We see slight improvement, but we don't see the improvements we would like to see yet for our customers there. So that continues and it's a soft market on the QSR side. On the flexible packaging side, however, we we purposely wanted to look at our mix and we wanted to make sure that that we grow in areas where we are strong and we have higher yields and those where we don't we are not we are not that keen to grow as much so there's much more of that happening with our own management as you can see in the results of flex or flexible packaging as well which which were um five million or so up versus last year so that's that's much more of of a choice we are seeing. And then, as I mentioned, the one the one exception to that is the fiber business, where we can still see also really good volume growth other than also a price impacts which are positive. So I would I would say that's that's kind of, again, the summary of those markets. We we see we see no big change of those trends in the second quarter other than the seasonality, which I mentioned with Easter coming up now in in Q2.

Thank you. And when you're speaking with your customers, what are they telling you about their current inventory levels? And given the current macro uncertainty, should we be thinking about possible de-stocking effects in the coming quarters?

Yeah, look, we see, especially in North America, we see that inventory was built significantly at the end of last year. We see that and we see that our customers, they are now working a lot from inventory. So we see that impact clearly. we we have seen and that's maybe because of the environment and the discussions around tariffs that customers in in general did stock up quite a bit so now working with the stocks just to see on how things are developing over the next weeks or months so we see that happening as well okay thank you I'll turn it over

The next question comes from James Perry from Citi. Please go ahead.

Good morning. Thanks for the presentation. I'd just like to talk a little bit more about fiber packaging. Obviously, you have a strong 10% comparable growth when most of the other businesses seem to be down low single digits. What do you think is driving the outperformance, would you say, compared to the other businesses? Do you think the conditions allow for sustained growth of this level throughout 2025, or was this mostly short-term or due to easier comparison basis? Thanks.

Yeah, thanks, James. So, look, I think our fiber packaging business is well positioned to continue its strong path. And in fiber packaging, you know that all of that depends on not having avian flu in in some of our geographies which we currently don't have a lot of that impact in any of our fiber businesses across the world so that's of course helpful but i think we are doing lots of things right and the management team is very committed they know their customer base they know their asset space so there's there's a lot of of things happening in that business which is just helping us to perform well and maybe outperform the market slightly so we are very proud of very proud of that I talked, James, in the beginning about delivering on the basics. It sounds very simple, but it is a big thing to be hassle-free for your customer, to deliver all the time in full, in spec, and make their life very easy. And if you think about egg packaging and you think about farmers, they just can't afford not to have the packaging there. They need to sell their eggs. Most of our fiber business is for the egg business, so they just need to have it. You're doing a good job there and we are benefiting from that.

Thank you.

The next question comes from Maria Wickstrom from SEB. Please go ahead.

Yes, thank you. This is Maria from ICB. Thank you for taking my question. I wanted to touch upon still the Easter impact in the US, given you have three different segments in the US. So if I would think that the Easter impact had the biggest impact in the retail tableware segment. And then if you discuss a bit about the profit, the adjusted EBIT down 15% in North America on the sales study, just down a few percentage points. Why did magnitude is so much bigger in the adjusted EBIT, please?

Yeah, thanks. Thanks, Maria. So the three segments which we have in North America, are not of the same size. So the retail tableware business is the largest size. And we have with our China product also a high-end product in the market. So it is a very important segment within our North American portfolio for us. So seeing retail not growing or in fact having negative growth is impacting our North American business quite a bit as we can see. Now, the good news here is, as I mentioned before, and it's important to really see the two factors driving that. One is there was, especially on the retail tableware side, where you have a large portion being imported into the market. We clearly saw a pull into Q4 last year where speculation of tariffs happened and we saw stocking happening, especially in that market in Q4. and then and that's that's a clear factor as well the late easter the seasonality of that is clearly then pushing away sales in retail especially from march into april so that's that's the other factor which look we were we were clearly aware of and we worked especially especially to make sure that we are able to deliver then in

in april to the retail and the other markets hence as my cfo reported we saw the inventory build there as well hopefully that helps you maria yes absolutely thank you this very helpful uh then i wanted to touch upon uh the raw material uh outlooks uh and um especially now as we've seen the oil price uh to come down quite a bit so do you think i mean if uh If we see resin prices following the oil price as they typically does, do you see a short-term margin gain from lower raw material bills?

Yeah, we see certainly for the next quarter, we see your material input prices going sideways. So we don't, of course, we are monitoring like you are what's happening there, but we don't see any short-term impact to us in either way, neither positive nor negative. So we see that certainly for the next quarter going sideways. And then not only on the oil side, but also, of course, on the whole tariff situation, we are going to monitor and adapt accordingly. But from today's perspective, we see all of that going sideways and the tariff side, as I mentioned in my opening, not being a big impact to us with our local to local business model.

Thank you. And then my final question, as you mentioned here, that the volumes were down, but sales prices were up. So can you classify that in which segment you saw the sales price coming up in Q1?

Yeah, so we saw sales prices going up, especially in two of our segments. So we saw them, as I mentioned, going up nicely on the fiber side and on the flexible side. On the fiber side, really driving the higher input cost on the fiber side. So we were able to recover those and pass those on. And then on the flexible side, it was driven by mix, by focus on higher end products, higher value added products. So we saw those two having price mix positive impacts, whereas food service in North America, as reported before, had negative price mix impacts.

Perfect. Thank you, Ralph. This is very helpful. I have no further questions.

The next question comes from Kevin Fogarty from Deutsche Bank. Please go ahead.

Hi, morning everyone, and thanks for taking the questions. If I could have two, please. Firstly, just in terms of the programme to improve efficiencies, I just wondered if you could tell us of the remaining kind of efficiencies to be realised, what do you think the sort of cadence might be over the next couple of quarters in terms of when they're realized. And just secondly, appreciate it's small in nature, but today's acquisition, just wondered if you could provide a bit more detail in terms of what you think that brings you, either in terms of presence or technology or the attractions you saw there would be useful. Thanks.

Thanks, Kevin, for those two questions. We are, of course, extremely pleased that we are tracking, continue to track positively with regards to our cost efficiency program. And I mentioned it last quarter. And of course, every quarter I report about this, I'm getting more confident that we will be able to close that project ahead of time. We communicated that it will take us three years. We are halfway through it and we are very confident, having now delivered, as I mentioned, 87 million, that we will close and be able to deliver on our promise of the 100 million ahead of time. So, very confident. We delivered 11 million. during the quarter so it is continuously going in the right direction and lots of actions are in place and the same is true for the cost to achieve we are now at 25 million so significantly lower than the cost to achieve which we communicated also here we are very confident that we will be able to remained below the cost to achieve which was communicated so very pleased with this program it is essential in times where the markets are soft let's be clear i reported that three of our segments did not see comparable growth right we as a company you know we didn't see comparable growth this quarter so it's extremely important to drive our efficiency programs to make sure we get support on the cost side second point and i'm really glad you are asking about about the acquisition. Of course, we are extremely happy that we were able to sign and close that acquisition, even though it is a small one, but it is exactly what we want. We are looking for bolt-on acquisitions. We are looking for acquisitions which fit exactly to what we want to do invest into segments which are higher yielding than others in geographies where we have very strong management teams with products and technologies which we understand really well And of course, you know, they need to be financially very sound. Selwyn Farms is going to be a creative for us in year one. And that is both in terms of margin and in terms of returns. So it's it is a tick tick, even though it's small. We will deliver on that project and we will get, as I mentioned last time, we will get confidence for us internally, but also for you externally, build up by doing those smaller bolt-ons. That's exactly what we want to drive here.

Great. That's helpful, Conor. Thanks very much. Thank you.

The next question comes from Victoria Adesina from Barclays. Please go ahead.

Hi there, yeah, Victoria here on behalf of Glorys Jane. So just two from me. When we're thinking about capital allocation, is there any chance that we could see some share repurchases coming from the company? Obviously, you just mentioned the Bolton M&A there as well. Is that going to be focused across all segments or particular segments are a higher priority than others? And the last question for me is just if there are any early observations since the PPWR implementation?

Yeah, thank you. Thank you, Victoria. So let me make sure I remember all your three questions. So let me start with capital allocation, capital discipline. So we are looking at overall capital discipline in various ways. number one we want to create shareholder value by investing into our business and that's true both for the organic side as well as the inorganic side so we will support organically our business in those three big areas which i mentioned to you which is is around maintaining the assets which we have which is around efficiency and productivity and which is around supporting growth. And then there's always this underlying smaller part, which is the license to operate, which is, you know, sustainability, which is safety, which is regulations. So all of those points we need to also have. And then we need capital to invest into the inorganic side, like now with Selwyn Farms. It's a smaller acquisition, but still, you know, it's an acquisition which we need to finance. And that's where we need our capital for. And then how do we return capital to shareholders? It's first and foremost with wire dividends. We're having a 3% dividend yield. If approved today in the AGM, which will start in a couple of hours, if approved there, we will have and we will see the 16th year in a row of Hutamaki where we see increasing dividends. So that's extremely important. We will have a CAGR of 8% on our dividend side. And then if we don't find ways to allocate capital in a way that we see returns coming, we will look at other means. We are not close to looking at other means of returning capital to shareholders. But first and foremost, we believe that investing back into our business is the best way to get capital working in the ways shareholders create value. We can create value for shareholders. Second question is around the boat on acquisitions and in which segments we do those. So I mentioned that we are going to be very clear about the segments we want to invest. We want to invest in segments which are higher yielding. We want to invest in segments which have teams, which can take on acquisitions, even smaller boat on acquisitions. We want to invest where we know the technology and the product really well. So, look, we have, of course, a couple of our segments which are performing really well. So likelihood that we would invest in those is higher than the others. Having said that, and the two others, we have certain spots and markets and geographies where we are also performing really well. So as long as we take what we say are our four criterias, we are open to look at both on acquisitions in our segments. And then the third point was around PPWR and the implementation, which is coming closer. So it's going to be implemented in August 26. Look, there are no news from our side on that side. So we are well prepared. We think we are ready to support our customers with the new regulations, and we are very supportive of them. Answers your questions, Victoria?

Yeah, these are helpful. Thank you.

The next question comes from Cole Hawthorne from Jefferies. Please go ahead.

Morning. Thanks for taking my questions. I'd just like to understand how you see sequentially volumes from here. Is it right to assume that Q1 is the weakest quarter of the year you know there was pull forward into Q4 last year and there was a timing of Easter so volume should still sequentially be better in 2Q due to benefits from Easter despite the QSR softness and secondly on North America I just like the moving parts of how you see EBIT performing into the second quarter Retail tableware is your highest margin business. It was impacted by pull forward. I'm just wanting to understand how you see that kind of retail tableware business going forward from here and how it might improve your margins and the EBIT performance in second quarter and third quarter. Thank you.

Thank you, Cole. So let me start then in more general terms, and then I will move on to your specific North American questions. So look, in general terms, Q1 is, from a seasonality perspective, our softest quarter. There's clearly for us a seasonality which we see globally. Globally, I'll come to North America in a second, which has Q1 as our weakest quarter. Of course, look, all of that depends on how the market will recover on what's happening geopolitically and on the tariff side. So let's put this on the side. What we are expecting is that we are going to see stronger, and again, due to seasonality and due to CapEx, which we have invested, stronger quarters ahead of us. So that's the first general point. You might remember that we have, especially in North America, two investments coming up on stream during the year one egg packaging where we invested in hammond that's not the acquisition we were talking about before but before that we already invested in hammond we are ramping this up during the year we should see an impact in q3 and then we should be at at run rate starting q4 this year on on the hammond side and you might remember that it was an investment of 100 million dollars so we think high level And half of that should result into a sales number. So that's significant. On the very back end side of this year, we will also see in Paris, Texas, an investment coming on the carton side. So this will help us at the back end of this year. So we won't see a lot this year, but it's, of course, helpful to see that investment coming up on stream as well. So overall, with the CapEx, which we have invested in North America and in other segments, combined with seasonality, which will help us, and then hopefully a market which will, during the year, start to recover, we see that the year ahead of us gives us good opportunities. North America specifically. We believe that the retail tableware market is a very strong market. We believe it's a nicely growing market. It was also supported by our competitors who invested heavily in this market. So it's not just us seeing that market being very interesting, but it's seen like that in the industry. uh we are we are a strong player in this uh in this market and yes we have had this as you mentioned correctly we've had that strong impact in in the first quarter due to the two factors the pull into last year and then the push out because of late easter this year so that's that's clearly a factor in retail and which was a q1 effect well thank you and then just as a follow-up are there any

product category where there might be a lot of tariff inflation in the US that may impact your sales. Traditionally, I always used to think about who to market as roughly 60% on the shelf and 40% on the go, but I'm just wondering if there's any product category where there's a lot of import of raw material from your customer side that may drive them to drive race pricing and impact your volumes I wouldn't expect that, but I'm just wondering if there are any specific product categories that may impact the market.

Yeah, look, it's a fair question. Of course, we are monitoring the situation and we are modeling what would happen if, and that work continues. I think our conclusion today is that we shouldn't see any big impact here. So neither from the supply side, as we are dual supplied in pretty much all our raw materials. So we will have supply of our inputs coming from the US and they are getting their supplies mainly from the US as well. So we don't see a significant increase. impact on that side, and the same is true on how we sell our products. It's mainly in the US, so it's really local for local. So we're not expecting that. There are imports, of course, in some categories. Like I mentioned before, on the retail side, we see, of course, imports coming in. So it's to be seen what happens with those. And again, the tariffs are moving in all directions very quickly. and so it needs to be seen what happens once that has settled down and if the terrace would stay high of of course you know then american produced products can get more attractive but this is way too early way too early to to think as as it's so much moving on thank you the next question comes from louis merrick from bnp paribas please go ahead

Hi again, thanks for the follow up. Just on your fine packaging business, prices for OCC have risen quite dramatically in recent weeks. Have you been able to implement positive pricing to offset that cost pressure in Q2 or is it likely to be a lag until Q3 similar to what we saw in Q3 and Q4 of last year?

Sorry, Louis, the line is really not great. I understood that you are asking about raw material costs in fiber. Was that correct? Correct.

And specifically for OCC and how that's going to, have you been able to implement positive pricing to offset that cost pressure?

Yeah, I get your question. Thank you, Louis. Yes. So, yeah, we are seeing the input costs on raw material for fiber going up. We are very close to our customers. We don't have in fiber long-term pricing contracts. So it's moving. The pricing is moving. It's always up to us to be very close and react very quickly when that happens. You have seen in the past that we would have had months where we would have an impact one way or the other, either being a bit too late in passing on or being able to hold on on the higher prices for a bit longer. but that over a year always plays out neutrally. So we are very confident that the higher input costs can be passed on to our customers.

Thank you.

Thank you for attending the event today. That was all on the question side that we had. Again, if you have any follow-up questions, please feel free to reach out to the IR team. And with that, we wish you a great day. Thank you.