Ilja Orre: Good morning, everyone, and welcome to Huhtamaki Q3 Results Presentation. My name is Ilja Orre. I am the VP of Investor Relations. Today's presentation will be a management discussion followed by a Q&A session. With that, I will hand it over to our President and CEO, Ralf Wunderlich.
Ralf Wunderlich: Thank you, Ilja, and great to have you on board with us. For those who do not know Ilja yet, Ilja is with Huhtamaki five years now, Ilja. Started in strategy, then went to North America and worked in our business segment in North America, first also in strategy and then followed in a business role there. Again, great to have you. Welcome, Ilja. From a Q3 perspective, I would like to report that we are very pleased with another quarter of comparable net sales growth. We had 4% in the quarter, and that is in a very soft demand environment. We also delivered a very strong EBIT with a 10.9% margin that is supported by solid performance in Flexible Packaging and Fiber Packaging.
Ralf Wunderlich: Additionally, the quarter was impacted positively by a EUR 23 million revenue recognition from a commercial contract, which was concluded in Foodservice Packaging in our smooth molded fiber operations. North America and Foodservice Packaging were negatively impacted by weak demand, operational challenges, and inflation-driven cost increases. However, we have taken actions to address those issues to support our profitable growth agenda. Now, how are we going to address those challenges? As I said, specifically in North America and Foodservice. We will do that with exactly the same playbook, which we introduced a year and a half ago in Flexible Packaging. That playbook is focusing on three main areas. Number one, commercial excellence. Secondly, procurement. Last but not least, cost out initiatives. Primary objective is to secure our long-term 10% to 12% adjusted EBIT ambition. Let me give you some more details around those activities and actions.
Ralf Wunderlich: Let me start with commercial excellence first. First, it is important for us to fill our growth pipeline and to have the resources to support that growth pipeline delivery. Secondly, we have to take even more pricing actions to preserve the leakage which we are seeing from cost inflation, especially in freight and distribution. We have to make sure we pass those on. Secondly, procurement. We have had a year, we have had significant direct and indirect input cost increases. Those are accelerating, and we need to push against those and mitigate those inflationary impacts. Those are stemming largely from the Middle East crisis, which we have seen since end of February this year. Last but not least, cost out. All cost levers will need to be addressed. Potential restructurings and productivity need to occur. All those levers are important to us.
Ralf Wunderlich: Let me just give you a couple of examples of what we have done now already. We have suspended our production in smooth molded fiber in our Sacramento facility in the US. We are doing a lot of work, as you know, in our startups, and here I am really pleased to report that especially in Hammond, we are seeing great progress on that startup at the end of the quarter already. So there is a lot going on, and hence I am very confident that we will execute these actions with the playbook, which we have introduced a year and a half ago, and we continue to fine-tune. Let us move over to the business performance, first in the quarter. It is the second quarter in a row with comparable growth. In the quarter itself, we see 4% comparable growth. Year to date, we are seeing 2% comparable growth.
Ralf Wunderlich: Especially pleasing to see that both our Flexible Packaging and our Fiber Packaging businesses continue to show good volume growth. It is also a quarter where we see first time that currency FX has started to turn positive. However, year to date, you still see a -67 negative currency impact on the top line. Let us have a look at the P&L in a bit more detail. Strong EBIT margin, as I reported on the first slide, of 10.9% and EUR 110.5 million in absolute euro terms, respectively. EPS did grow 10% to EUR 0.68 per share. CapEx is in line with last year in the quarter. Our disciplined capital allocation continues. It is really important, and it is the sixth quarter in a row where we are showing and posting positive cash flow. Year to date, it is a similar picture. Strong margin over 10%, landing at 10.4%. EPS is up 3%.
Ralf Wunderlich: On the free cash flow, as I said, we are having six quarters in a row positive. We are setting us up for a strong finish to the end of the year as well. Let me move to Foodservice Packaging. Demand is again very weak, and it is below last year's level. That is not a great starting point. However, the business continues to take significant cost out so that the underlying are performing still at around 8% margin. That is, of course, taking out the revenue recognition from a commercial contract, which was concluded in the quarter. So I am taking that out when I talk about the 8% for the year-to-date margin of the segment. Actions to support the commercial excellence, procurement and cost out, which I talked about before, are being implemented also in Foodservice Packaging.
Ralf Wunderlich: Track record shows that the segment is able to take. Now we have to start being much more successful on the top line and find areas to grow and fill our pipeline in Foodservice as well. Let me move over to North America. Clearly, the performance in the quarter is disappointing. We have had challenges. They are really focused on 2 areas. First one is a weak top line. Second one is that cost inflation, mainly in freight and distribution, did hit us even more than we thought it would. Now, on the top-line side, we see particularly weak in Foodservice and in the quarter itself in retail. Good progress, though, in Hammond, as I mentioned before, and I mentioned before that we suspended Sacramento.
Ralf Wunderlich: There are now also actions in place to attack the cost inflation, which I talked about in freight and distribution, that we will make sure that we pass those on to our customers swiftly. Year to date, top line is also negative, but it is 3% negative versus the significant decrease in the quarter itself. Of course, that is having a strong impact on the EBIT reduction in North America. Coupled with the inflationary pressure, which we are seeing again, mainly on freight and distribution, we come to a year-to-date performance of 8.2% margin. In the quarter, we delivered better operating cash flow, and that is translating then also in better operating cash flow for the year to date in our North American business. Look, the playbook is in place. The playbook is proven. We have done it before in Flexibles. We will do this again here in North America.
Ralf Wunderlich: There is no doubt that we will get this business back to where it needs to be, which is above 10% EBIT margin. I feel very confident that our North American team will get there. It is an attractive market. We have a strong team there, so we will get this back on track. Let me move to Flexible Packaging. Flexible sustained its good momentum. I am really proud of the segment's performance here. Healthy volume growth, also good on passing on the raw material price increase, which we have seen in Flexible Packaging, and we have had also a very positive mix effect. Continuous focus in the segment on their cost management and the turnaround activities. They were the ones where we implemented the playbook, which we are now using in North America and in Foodservice. That is, of course, supporting their performance again.
Ralf Wunderlich: All their regions are up both in top line and in EBIT. Again, really proud of the performance there. Also proud of what they are doing on cash flow. For the year to date, they are ahead of last year. You see the impact of the raw material price increases in the quarter itself, but they are defending their year-to-date performance on cash as well. Last but not least, our Fiber Packaging segment. Steady growth with a good profitability continues here. It is another very strong quarter for our Fiber segment, with improved profitability again. Comparable growth in the quarter was 3%. Year to date, it is even 5%, with volume growth, again, all over the regions which we are playing in our Fiber segment. Stable and improving demand in our egg and food markets.
Ralf Wunderlich: Our Foodservice markets, which we are serving with the cup carrier, was weaker, but it is the smallest of the three segments we are serving within Fiber. We will continue to invest in this business, and we are looking forward to hopefully another strong finish to the year with our Fiber. Let me pass on and hand over to our CFO, Thomas Geust.
Thomas Geust: Thank you, Ralf. In the quarter, the currency turned positive, as Ralf already alluded to here earlier. We had roughly EUR 11 million positive translation in the net sales and EUR 1.6 million on EBIT. However, when you look at the year-to-date numbers, you see the significant negative still of roughly EUR 67 million negative impact on net sales, while the impact on EBIT was still -EUR 4.7 million. Of the currency translation, a big part alludes to the USD currency. When you look at the development of the USD, you can see that we have an average rate still of 1.16 in the quarter and 1.14 at the end of the quarter, so the closing rate. If you look at the currency yesterday, it was at 1.11, so the trend has continued positive throughout the quarter.
Thomas Geust: Maybe highlighting a few of the other currencies also on that slide, we have British pound, Chinese renminbi, and Australian dollar also trending positively. Turning over to the profit and loss. Here we see that the growth of 5% on top line is nicely converting into EBIT growth of 10%, and that then delivering an EBIT margin of 10.9% in adjusted terms. The strongest operational improvement we see in our Flexible Packaging and Fiber Packaging segments, while then the conclusion of commercial contract in Foodservice Packaging provide additional support to the top line and adjusted EBIT. Looking at the finance cost of roughly EUR 70 million in the quarter, that is slightly elevated, but here I consider that the year-to-date numbers represent a good assumption for our run rate.
Thomas Geust: That combined with the efficient tax rates delivers adjusted EPS of EUR 0.68, which is up 10% to prior, and also the year-to-date EPS of EUR 1.88 is improving versus prior year. In the cash flow, as said by Ralf, we have now six consecutive positive cash flow quarters coming in with year to date free cash flow of EUR 79 million, down versus previous year. However, I would conclude this more on timing as well as some of the elements which I will allude to when going through the bridge. On the EBITDA, the main reason for the decline is a positive IAC booked in 2025, so the comparability being impacted by that one. Our working capital is inflated, mainly related to the inflated raw material coming out of the Middle East crisis. That one is obviously stabilizing as time goes along.
Thomas Geust: And then we have our capital expenditures, which is roughly EUR 20 million lower than previous year, really reflecting the disciplined capital allocation that we have been applying, while at the same time allowing for investments in the growing businesses. When looking at the net debt leverage and liquidity, I would conclude that with EUR 1.2 billion of net debt, we continue to deleverage. Our net debt/EBITDA ratio is now 1.9x, which is below our ambition corridor of 2 to 3. We also improve on gearing, which is now 0.58. Looking at the liquidity position at the end of the quarter, we had EUR 364 million of cash equivalents and EUR 450 million available of unused committed credit facilities. We conclude that our balance sheet remains strong.
Thomas Geust: Also on the debt structure, you can see our continuous work on maintaining a healthy loan maturity, that combined with efficient financing terms. Our average maturity has now been extended to 3.9 years versus 3.6 end of Q3 2025. We have also continued with refinancings throughout 2026 with the extension of the RCF as the latest example. Continuing to the more detailed balance sheet, as already mentioned earlier, our balance sheet remains strong with equity roughly EUR 2 billion. Beyond already highlighted topics, I would also like to highlight the improved adjusted return on investments, which is now 12.3% versus 11.9% prior year, as well as the adjusted return on equity of 13.8%. Additionally, I would like to highlight that the balance sheet is impacted by currency movements alone on the equity, roughly EUR 186 million of negative currency translation differences.
Thomas Geust: Looking at the progress towards our long-term ambitions, I would conclude that we are currently meeting our ambition for three of the parameters: adjusted EBIT margin, net debt/EBITDA, as well as dividend payout. For the adjusted return on investments and comparable growth, we are still trailing behind, however, seeing some positive development in that one lately. Looking forward, we have no changes to our outlook nor to our short-term risks and uncertainties. With that one, I would actually hand back to Ralf for his concluding remarks.
Ralf Wunderlich: Yeah, thanks, Thomas. Look, you have seen the slide before from Thomas where he was showing the trend towards our ambition, and I am specifically proud to say that after years of negative or no growth, which we have seen, we are seeing this year over the first three quarters, positive growth of 2%. So really proud of the team to deliver in a very soft market that growth. Also really proud to see continuing over 10% EBIT margin. In the quarter, 10.9%, clearly supported by Flexible Packaging and the commercial conclusion of a contract, but still it is clearly above the 10% for the year-to-date numbers, which is, of course, very, very good news for us. It is great that in the segments where we have work to do, we have a playbook in place which will help us to turn those into the right direction.
Ralf Wunderlich: With that, I would like to hand over to all of you for your questions. Please go ahead.
Operator: If you wish to ask a question, please dial #5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial #6 on your telephone keypad. The next question comes from Hai Huynh from UBS. Please go ahead.
Hai Huynh: Good morning. Thank you for taking my questions. I guess, first of all, in North America, the 9% comparable sales decline, how much of that is due to end market weakness? In terms of pricing, are you not able to pass on prices anymore from raw material costs? Where are you seeing changes in market share over the past quarter?
Ralf Wunderlich: Yeah. Thanks, Hai, for your question. Let me go one by one. The market, really the market in Foodservice Packaging specifically, was very weak in North America in the quarter. We did not lose market share with any of our customers during the quarter compared to the same quarter last year at all. Retail was weak as well, but retail in Q3 is normally weak. It is the softest quarter which retail has. It was specifically weak this year. Again, we did not lose any market or any customer in any of the markets. But we are seeing a very weak, unexpectedly weak market with consumer confidence in North America at a low point. Hopefully that helps a bit to question one and three.
Ralf Wunderlich: Question two in the middle was with regards to passing on cost increases, and here I would like to highlight this is mainly due for freight and distribution. That is really what we are talking about. The strong increases in fuel prices, the availability of truck drivers in the North American market is really the issue here for us. We are negotiating typically freight distribution prices in the beginning of the year, and then it is during the year, very difficult to pass them on. We are doing it now in an exercise, which is very tough, but I am really proud of the North American team that they are going to customer by customer to have those discussions earlier than January, where it typically happens, to make sure that we get those hopefully passed on and see the benefit already in the next quarter.
Hai Huynh: Thank you. Just a follow-up on-
Ralf Wunderlich: Hi.
Hai Huynh: Yeah, sorry, just to follow up on that. In North America, I realize that the demand is weak, but how much of the underperformance is also the existing issue of ramping up the factories, the sites? Do you expect utilization or site efficiency to get to a good level by Q4, or is that going to be more of a H1 2027 story?
Ralf Wunderlich: We have seen at the end of the quarter significant progress in Hammond. That is one of the two startups, if you remember, and that is frankly the larger of the two. So very pleased with the end of the quarter performance in Hammond. That is of course only really six weeks. But we are expecting this to continue. Then of course, in the H1, it will get stronger and stronger. But pleased with the progress. We are, as I said, a couple of quarters ago, we have implemented a task force specifically to address the startups in North America. We see the progress in the quarter. We will see more in the next quarter and then more in H1. So looking forward to those achievements.
Hai Huynh: Thank you. My last one is on the contract for Foodservice. Now that you have terminated that smooth molded fiber contract, how should we think about the normalized or going forward type of EBIT for the segment? Has this traditionally added anything in terms of the EBIT or is it actually dilutive to the margins for the segment itself?
Ralf Wunderlich: No, it has added EBIT to the segment. You could think on a 2026 year to date, you would think about anywhere between maybe EUR 4 to 6 million EBIT impact on that one, which of course we will not see going forward.
Hai Huynh: Very clear. Thank you.
Operator: The next question comes from Maria Wikström from SEB. Please go ahead.
Maria Wikström: Yes. Hello. This is Maria Wikström from SEB. I have three questions. I will take them one by one. First, I wanted to get a feeling for the volume growth across different segments. I mean, you had 4% organic growth for the group level. But if you could talk about it on a volume terms across the different segments, please.
Ralf Wunderlich: Yeah. Hi, Maria. You know we are not disclosing specific volume numbers, but I am very happy to give you a feel around how we are doing. You would have in Flexible Packaging and in Fiber Packaging positive volume in a year-to-date perspective, and you would have specifically in Flexible Packaging very good volume growth year to date and in the quarter as well. But you know that we do not report on specific volume numbers, Maria. But hopefully the flavor helps.
Maria Wikström: Yes. Thank you. Then I wanted to get a bit of the bridge for the North American EBIT trend as you are EUR 21 million below the last year level. So if you could provide a bridge that how much is Hammond and Paris, Texas, I mean, how much is this distribution cost to get a little bit of the flavor. I mean, what is behind this EUR 21 million drop year over year?
Ralf Wunderlich: The 9%, which we are down on top line, I would help you by saying this comes at a healthy margin. Call it more than half of the shortfall in the quarter would be due to that. To help you with the P&L and distribution and freight costs are 2% of the P&L up this year versus last year. So it is a significant 2% on a year to date. If you think just on the freight one, if you see our 8.2% year to date, it is a 2% on freight and distribution. Then the rest would be top line. The startups have an impact, but as I mentioned already in the quarter, we are seeing positive development in Hammond and then the other startup in Paris, Texas, we will also get right over the next couple of quarters.
Maria Wikström: Perfect. My final question is on the discontinued Foodservice. I do not know, should I call it project or the client contract? Just to get a flavor, if this is a kind of saying as well that this plastic to paper trend is taking a breather in the current economic situation or what would be the reason behind for the discontinuation?
Ralf Wunderlich: Yeah. The reason behind is, I think a couple of reasons. First, of course, various materials compete with each other. If you see paper, smooth molded fiber, plastics, aluminum, all those different substrates compete with each other. There is always a question for the customer, how is the consumer taking on my product? Are they taking it because of pricing? Are they taking it because of performance? Are they taking it for any sustainability reasons? What is really the reasoning? Those decisions the customer take whenever they take them. For us, it is really good that we are material agnostic, so we can serve various materials to the customer. Obviously we are not happy sometimes with some of their decisions, but then, other segments where we can use other materials are benefiting.
Ralf Wunderlich: We see this as our focus is not just one material, not just smooth molded fiber, but it is material agnostic, Maria.
Maria Wikström: Yes. Thank you very much. I have no further questions at this time.
Ralf Wunderlich: Maria.
Operator: The next question comes from Pallav Mittal from Barclays. Please go ahead.
Pallav Mittal: Hi. A couple of questions. I will take them one by one. You have highlighted potential for restructuring alongside your operational efficiencies and cost reductions. Do you think the challenges in North America and Foodservice in particular, warrant a more sort of fundamental reassessment of your manufacturing footprint rather than the incremental efficiency measures that you are talking about?
Ralf Wunderlich: Yeah. It did break up a little bit, but if I get the question correct, you are asking about restructuring and maybe a more comprehensive analysis of the footprint. If that was the question, then I agree with you. It is not just working a little bit on productivity and just taking some costs out. It is a wider question. You heard me saying already last year that we are looking at plant by plant performance. We have closed nothing to do with what we are now doing in Foodservice or in North America. We have closed, also last quarter, a factory in Flexibles in India, so in Baddi specifically. So we are doing this because when we do not see a way forward for a plant, then we do this. If we are revisiting now the overall footprint in Foodservice in North America, then it is a bigger work.
Ralf Wunderlich: We are doing this because we want to have the footprint which has the right capacities and the right locations to serve our customers. So that is really important because we want to have a competitive platform here, not just to react at the moment, but to have a platform which serves us going forward. Hopefully that was your question.
Pallav Mittal: Sure. If I can-
Ralf Wunderlich: I struggled to really understand it. I hope I answered it.
Pallav Mittal: Yeah. If I can ask one on capital allocation. So your net debt EBITDA is around 1.9x, below the target that you have, 2x to 3x. How should we think about capital allocation? Is there more thought given to share repurchases, especially given where the shares are trading or you are still focused on bolt-on M&A?
Ralf Wunderlich: Yeah, look, same answer as before. We are really on our three value drivers. If you think about them and you think about our profitable growth, capital allocation, and then the means of getting there by clear accountability. We want to drive profitable growth. In profitable growth, we absolutely want to do inorganic, but we will stay very disciplined. There is just no way that we will get out of our strategic and financial requirements for any M&A. But we want to do it, and we are in the market. When there is a right opportunity, we want to have a strong balance sheet, which allows us to do it. If we will not find it, that is the moment where my board will definitely consider doing share buybacks. For the time being, we are optimistic that there is opportunity for us on the inorganic side as well.
Pallav Mittal: Roger. Thank you.
Operator: The next question comes from Kevin Fogarty from Deutsche Numis. Please go ahead.
Kevin Fogarty: Hi. Morning, everyone, and thanks for taking my questions. Two, if I could do, please. First, just in terms of North America and potential there, could you quantify the extent of the cost out actions you intend to take there? In terms of the timing we might see those kind of realized, if you could sort of help on that would be quite useful. The second point, just I guess sort of going back to the one-off kind of boost, I guess, in Foodservice. Obviously, if we adjust for that, it is clearly sort of reasonably weak performance there. I just wondered if you could help us with any kind of near-term outlook you can see for Foodservice. What are customers kind of saying about the near-term demand outlook? Is there anything you can point to any improving underlying trends there in terms of end markets?
Kevin Fogarty: That would be quite useful.
Ralf Wunderlich: Yeah. Hey, Kevin, and thank you for your two questions. North America specifically, our target is to get the segment back to 10%+ EBIT performance. That is our clear target and our ambition. Our ambition is to be between 10% to 12%, but our clear target now, we are at 8.2% year to date. We need to bring this back to double digit. That is the target which we have. We feel confident that with the actions which we have identified, we will get there. So that is on North America and hopefully gives you some flavor there. On Foodservice specifically, the market is weak and the market is soft. So for us, it is really important that we get our pipeline filled all the time. We have seen before, and Maria had that question before with regards to various materials and our customers look at that.
Ralf Wunderlich: That can also play in our advantage. We are also, in Foodservice, material agnostic. We do, of course, paper, we do smooth molded fiber, but we also do plastics, especially rPET, recycled PET, we do. So we got to play our card on material agnosticity side even better than we did so far, and our pipeline needs to focus on that one even stronger. I am, again, confident that we will get this one right in Foodservice. This will take a bit of time. I do not think the pipeline will be executed in the short term, but it will be. So we are optimistic on that side. We are working. In the meantime, they continue to focus on self-help. We just do not sit back and wait for the market to turn. In Foodservice, it might take, with consumer confidence, a bit of time.
Ralf Wunderlich: So we have to work on the self-help side to make sure that we deliver on the bottom line.
Kevin Fogarty: Okay. All right. Thanks very much.
Operator: The next question comes from Cole Hathorn from Jefferies. Please go ahead.
Cole Hathorn: Morning. Thanks for taking my question. I would just like to follow up on North America and particularly the volume side of things. Foodservice being weak is easy to understand with the footfall data and the challenged consumer. But I would like a little bit of color on the retail paper plates side of the business. Is Q3 more a bit of a destock, restock? Just trying to think about that retail plates business because it is higher margin for you and how we should think about it into Q4. Will there be a seasonal improvement into Q4? Is the underlying volumes just more temporary weakness? Thank you.
Ralf Wunderlich: Yeah, Cole. Look, it is exactly the way you are describing it. We had a quarter without any festivals. We had a strong finish in the last quarter. That is really a quarter-over-quarter impact between Q2 and Q3. If you think about Q4, you are spot on. You will have Halloween, you will have Thanksgiving, you will have Christmas. We are, of course, expecting Q4 seasonality to be significantly stronger than we have had it in Q3, which is normal seasonality over year. We are not expecting anything different there. Q3 was weaker than we thought, but that has the impact of the quarter-over-quarter performance there.
Cole Hathorn: Thank you. I would like to move on to the positive, which is Flexible Packaging. In a very volatile raw material environment, the team has done very well. I am just wondering, can you give any color of what is supporting this performance? I know you talked about a bit of volume growth across the Flexible Packaging. Do you think this is consumers down trading to cheaper plastics business? Can you give us a little bit of help of what is supporting the Flexible Packaging volumes and performance?
Ralf Wunderlich: Yeah. Cole, on the first, happy that we are talking about the positives, let me start with that comment, which is really a standout performance here. I think it's due to a couple of things. Firstly, the segment started implementing a new operating model early on last year. They went very decentralized, and with that approach, they were able to attack and win local and regional customers very early on. Served them well, so they could gain a lot of momentum with local and regional customers. That's why I mentioned also that they are growing in every single market where they are playing. That's extremely encouraging to see. That is supporting the overall growth. The second one, of course, is also then the cost out, which they have said. So the performance is supported by the playbook, which was implemented last year.
Ralf Wunderlich: That is one of the reasons why I feel so confident about using the same playbook now in North America and Foodservice Packaging. That playbook allowed the segment to get to a very different cost base. That different cost base, again, is benefiting us in two folds. One is it enables us to gain more customers, because we can share some of those costs with our customers and gain some of them with that. On the other side, of course, a part of that is also flowing to the bottom line. So it has an advantage both directly to the bottom line, secondly, enabling us to be more competitive in the market and gain volumes with that. So very pleased, very proud of the performance which we are seeing in Flexible Packaging.
Cole Hathorn: And then finally, if you allow me, it's probably a little bit more difficult one to answer, but when I think about the operational challenges of ramping up Paris and Hammond, you've talked about this and a plan in place, but are there any specifics that you can give? Is this the layout of the factory that is being challenged? Is it the distribution? Is it the P&L management, the sales? Could you give a little bit of color of what are the operational challenges and how you're addressing those?
Ralf Wunderlich: Yeah, maybe that helps. Give you an example about Hammond. In Hammond, we installed six machines. Those six machines are supposed to be used for relatively straightforward products. North American market on the egg side is having big volumes on standard formats, typically either 12 or 18 counts for egg packaging. Now, we also tried to go into a higher value-added mix there by having many different colors, many different labels. But that's not what the US market is. So we are currently working hard on getting the mix into the factory, which we can run very efficiently with the machines which we have installed. So that shift towards a different mix is taking some time.
Ralf Wunderlich: As I mentioned, we have seen significant progress by changing that mix and now running the machines at the speed they are supposed to run with the right mix of 18 or 12 count eggs and not having too many color changes, label changes, or print changes. More straightforward, more using what the US market is all about, which is long runs and using the machines which are very efficient with regards to the mix which is there in the North American market. That is an example. There is a similar example, if it helps you also on paper. Similar example, we have installed a very, very significant print line, which can do more colors than we had before, which can do wider prints than we had before. But again, also here we have to adjust, together with our customers, the mix of the products which we are running.
Ralf Wunderlich: Think about a machine which is significantly wider. So you need to change all the specs which you have had, all the formats which you have had. That takes time and of course, also for the operators. It is a big adjustment of running a very different type of machinery. So maybe those two simple examples help you to understand the issues, Cole.
Cole Hathorn: That is helpful. Thanks very much.
Ralf Wunderlich: That concludes our presentation. Thank you for those that called in. Thank you for your time.
Operator: The host has ended this call. Goodbye.
