Welcome everyone to this announcement of our '23 Annual Results. Following a record-breaking '22, the year '23 confronted us with the most significant demand decline in the European Cardboard Industry in the last 50 years.

This downturn can be attributed to 4 main factors. Firstly, a prolonged reduction in supply chain inventories after an extreme buildup the year before driven by supply shortages and the energy crisis.

Secondly, high inflation has led to changes in consumer behavior and resulted in a decreased consumption of daily goods packaged in cartonboard. Thirdly, Russia has been a vital export market for the European cartonboard industry and this business disappeared factually overnight.

This has been less visible in the booming time in '022, but showed its full impact from autumn 20 to 1. And then was especially hard hit given its strong exposure to exports to Russia.

And last but not least, the weak and very competitive overseas export markets contributed to a drastic reduction in capacity utilization across the entire European cardboard industry. Consequently, markets were down up to 20% and price pressure for both virgin and recycled cardboard increased significantly throughout 2023.

And these challenging conditions were particularly reflected in the week 23 volume development and financial performance of the MM Board & Paper division. In contrast, our Packaging division managed to deliver a strong performance amid an also weak packaging market and despite exiting its highly profitable Russian assets.

Here, we have shifted our focus towards Western Europe and the U.S. With our recent acquisitions in the resilient pharmaceutical packaging sector, which has been successfully integrated in '23.

And we are pleased that they performed well above our high expectations. And today, approximately a quarter of our packaging sales comes from the resilient pharmaceutical sector and we see substantial potential for further value enhancement.

Despite these overall challenging markets, we've continued our strategic transformation towards enhanced competitiveness and creating a long-term perspective for MM through more efficiency, sustainability and innovation. Above all, we've almost finalized our extensive CapEx program of the MM Group.

Having started in 2021, the focus has been on cost and energy efficiency, technological modernization and enhancing product quality at our most competitive sites across both divisions. The Packaging division has already benefited from these measures in 2023 and that is one reason for the good results.

On the contrary, the Board & Paper division had to bear additional standstill costs on top of a weak market in 2023. But from '24 on, Board & Paper will benefit from these investments in cutting edge technology, product quality, improvements and sustainability at our Frohnleiten, Neuss, [Koligchevo] and Kotkamills.

MM has increased its commitment to sustainability, and we are proud that we are awarded a AAA rating by the global nonprofit environmental organization CDP for our leadership in transparency and performance regarding climate change, forest and water management. We are the only European paper and packaging company to receive this AAA rating.

And this marks a significant progress from our CD score 3 years ago. Our strategic sustainability focus aims to capitalize on the growth opportunities presented by packaging from renewable resources with recycling at scale.

Recyclability is not enough anymore. We're already in the next stage.

Our customers want a guarantee that almost all of their packaging is indeed recycled. And with a recycling rate in Europe of more than 80%, we can give this promise and we're eager to improve further.

This includes, in particular, replacing plastic packaging and thus plastic waste and the reduction of our carbon footprint through various projects from photovoltaic installations to adjustments in production processes. Procurement market prices for electricity and gas were significantly lower than in '22, but still above previous year's levels.

Prices for paper for recycling and pulp were declining in the first half of the year, but showed an upward trend thereafter and especially now in the New Year. And last but not least, inflation has notably increased personal but also other service costs.

So overall, it's a quite mixed picture. In anticipation of the demand decline, we've reduced our packaging capacity by closing a production site in Germany and our paper capacity by shutting down 1 paper machine at MM Karton.

On top, our profit and cash production program has included significant cost and working capital reduction as well as CapEx curtailments. This is already significantly contributed to reducing net debt in 2023.

And the cost benefits will mainly become visible with some delay in 2024. At this point, I extend sincere thanks to all our employees for their commitment, their creativity and their loyalty during these challenging circumstances.

And also, sincere thanks to our shareholders for their trust in economically windy times. And now I want to hand over to our CFO, Franz Hiesinger.

He will present our financial results and after that, I will return with an outlook for the current year.

Our financial performance throughout '23 was characterized by different developments across our group. In the Board & Paper division, we faced challenges from unprecedented market related and investment related downtime with underutilization at our plants by over 20%.

At the same time, we experienced strong price pressure due to market weakness, which could not be offset by lower raw material and energy costs. As a result, following a relatively strong Q1, Board & Paper faced losses in the subsequent 3 quarters, resulting in a significant earning shortfall compared to the record-breaking results in '22.

In contrast, MM Packaging achieved the best financial results ever, showcasing solid developments throughout the year in a weakening market. This success was driven by well-balanced core business and the encouraging performance of our pharmaceutical acquisitions in the first full year with MM.

However, packaging results were not sufficient to offset the shortfall in Board & Paper, leading to a significant decline in both our group top-line and bottom-line performance compared to the previous year's record results. As such, group sales of €4.2 billion were down 11%.

With €229 million adjusted operating profit, we achieved an operating margin of 5.5%. The operating margin in Board & Paper was slightly negative with minus 1%, whereas in packaging, it was 10.2%.

Adjusted EBITDA of €450 million represents an EBITDA margin of 10.8%. In light of these circumstances, ensuring a secure and solid financial foundation to navigate effectively through this challenging period became our paramount priority.

This was achieved through the diligent execution of a profit and cash protection plan, which centered around 3 cash generating initiatives: cost saving measures across all areas, a significant reduction in working capital and reductions in CapEx cash outflows. Through these initiatives, we have achieved an impressive cash flow from operating activities of about €790 million and a free cash flow of about €370 million in '23.

Thanks to the strong cash generation, we managed to reduce our net debt from €1.5 billion to below €1.3 billion. The net debt to EBITDA ratio stood at 2.8 times and the equity ratio was unchanged at 40%.

The escalating interest rate environment underscores the advantages of our long-term financing strategy with more than 60% of our debt bearing favorably fixed interest rates since early '21. By the end of the year, our cash position amounted to more than €750 million despite an intensive investment program with CapEx of above €420 million and after distributing dividends of €84 million to our shareholders, which represented a payout ratio of about 24%.

Since a weak market demand might not be over yet, preserving financial stability with a solid balance sheet and sufficient liquidity continues to be our top priority. So we will carry on our profit and cash protection program to secure the long-term development capabilities of MM.

This includes maintaining strict control over working capital, minimizing CapEx cash outflows and adhering to our long-term dividend policy, which entails distributing a third of our earnings. Consequently, we will propose a dividend for '23 in the amount of €30 million, which is €1.5 per share at the forthcoming Annual General Meeting.

The times will undoubtedly change to the better. But until then, our focus is on weathering the storm robustly, conserving resources but also taking on opportunities that may arise.

From a financial standpoint, we have taken the necessary actions in a timely manner and are well positioned for the future. Thank you.

So what is our outlook for '24? What we have observed, and this is very positive, is a positive volume trend for our Board & Paper division in the first 2 months.

However, margin pressure has continued. Even as the inventory reduction in the supply chain approaches completion, the sluggish economic overall climate in Europe coupled with restrained consumer spending suggests only a slow market recovery.

Given the challenging conditions in non-European export markets, we anticipate therefore continued oversupply and muted capacity utilization in Europe. And as a consequence, we are intensifying our profit and cash protection program in 2024, supplemented by targeted structural adjustments.

And recent cost increases will be offset by corresponding price adjustments. CapEx in '24 are projected to be around €300 million including carryovers from the previous year.

And the focus will be very narrow and it will be on selective projects to enhance our competitive edge. Despite these short-term challenges, which we see and maybe for the whole of '24, maybe for the first half year, I stay optimistic.

MM will benefit from its stable, value adding and well diversified packaging business as well as from its competitive asset base in Board & Paper. We are well financed.

But most important of all, we have a strong team to successfully navigate the ongoing challenging market with more sustainable and innovative packaging solutions.

Good morning, and welcome on the part of MM Group. My name is Stephan Sweerts-Sporck, Heading Investor Relations and Corporate Communication.

It's a great pleasure to have you joining this Q&A conference and our '23 annual results, which we released this morning. Besides the press release, a video statement from our management board has been published on our website, mm.group.

In this call now, we want to provide with the possibility to direct question on today's communication to our CEO, Peter Oswald and our CFO, Franz Hiesinger. Since this call addresses an international audience, we would very much appreciate your questions to be asked in English in the following Q&A session.

Before we go for that, Peter, may I ask you to start off with a short summary of our key messages?

Yes. Thank you, Stephan.

Good morning, everyone also from my side. I'm not going to repeat our announcement, but let me just try to get to the main point.

And the main point was that in 2023, MM experienced 2 very contrasting developments. For MM packaging, it was a record year with a strong performance.

Our operating margin cracked the 10% hurdle. Despite the slow market, we strongly improved results.

Thanks to our innovative products, our superb sales team, our superior logistics network and last not least our great cost position and we've improved cost recently very much. Our organization focusing on distinct market segments has been crucial as well as well as our CapEx program in 2021 and 2022, which improved mainly our operating costs.

Our acquisitions of ESNT Pack and Essentra have developed beyond expectations. And while pharma coming from a very low profitability is still below our average operating margin, we are confident about our progress in the coming years.

And whilst we expect headwinds in 24 packaging first from increasing cartonboard prices and secondly, from rather low volumes, our market leadership gives us a very strong position. And we have a lot of possibilities for sales help.

Now this stands in contrast to MM Board & Paper, where we had to take significant market downtime, because of a very weak market, which was roughly 18%, 19% down last year. And on top, we shouldn't forget that we were rebuilding 3 machines, which were requesting significant downtimes of 3 of our mills.

Now, looking where we stand now, I think we have to face the fact that the industry has significant overcapacities also after rebounding volume. We have done our homework by selling 2 mills and closing 3 less competitive machines.

And on top of taking out higher cost machines, which is one way to improve your results, our response has been reducing costs mainly energy and personal costs via CapEx and also organizational changes and to improve product quality via innovation and our CapEx as well. And while it will take some time until our new and improved products go through the approval process with our customers, our pipeline makes us very confident that we will get additional business and can therefore improve our results in the course of '24.

Yes, I want to leave it with this. And now our CFO, Franz Hiesinger and I are happy to take your questions.

Seems that I've been so confusing that there are no questions anymore.

I will have three on your Board & Paper division. First one, in the outlook you mentioned that you expect the capacity utilization in Europe to remain dampen.

Can you maybe give us a hint now there was the capacity utilization in the fourth quarter in Board & Paper? And you said in the first two months, the volumes are picking up now, where it is now at the moment?

Should I take them one by one?

Yes, please.

Okay. Yes.

So I mean, it's always very confusing, so to say, what different people mean by capacity utilization. But let's say, compared to if we ran full speed, our capacity utilization was somewhere around 80% and that was more or less 75% to 80% throughout the year.

So the same or no improvement in Q4. What we've seen now for -- we don't have a significant industry data only for January.

And therefore, we have to see how this develops. But for our group, it has improved to above 90%.

Also in this respect, my second question because in the fourth quarter, your sales were up slightly in comparison to the first quarter. However, results adjusted EBIT was down [60].

Now with volumes picking up at capacity utilization above 90, as you said, so can we expect the EBIT to go to a positive reach again already in first quarter?

Yes, I think we have two things. So the good news is that volumes are materially up.

The other thing is that prices are down. So we have a constant slide of prices throughout last year and this has unfortunately continued in Q1.

So without making a concrete prediction, you should not expect it because prices are at the low level. We are out now with price increases for the second quarter and if they go through, then we can see an improvement in the results.

But let's say, compared to -- so Q1 compared to -- of this year to last year will be, yes, higher volumes at lower prices, significantly lower prices. And the cost -- some costs obviously have come down, wood costs, for instance, but the number, of course, for instance, paper for recycling is up and also personnel costs are up into the high inflation.

And then also coming to my third and last question. So you said price increase in the second quarter.

Then on top, you said in your video statement, you see then the benefits from strategic transformation instead already also in the second quarter later. And what does that mean for the full year and for the second half to think this will be these two effect price increases and strategic transformation will bring margins in the second half of back to normalized levels.

What we've seen in the past from 7%, 8% or is too early? If you could give some comment on that, please.

Yes. I don't have this crystal ball.

I mean, what we see very clearly is thanks to our CapEx that will improve cost structure. Secondly, we have a better process to higher-quality products business services, et cetera.

And that is very, very well taken up by our customers. So this is encouraging.

However, we should also not forget what I highlighted in my introduction that in our industry, the customer cannot just switch from one minute to the other, but we have to go through this quality approval processes and qualifications of products, the homologation and that takes some time. So I think it will be very backloaded towards the second half of -- to see the benefits flow through overall will be mainly in the second half.

For some cost items, obviously, it's already the first half will be in the second half.

Yes, although I had an issue with getting through, but here I am. First question relates to the cash flow development in the final quarter, which was absolutely stellar.

I'm struggling to see reconcile the drivers. Apparently, it was working capital.

But I mean, doing the math I don't think that this was an operational improvement only. So can you outline what has happened in Q4 with the capital?

I think you're absolutely right. So first of all, we did indeed do a lot operationally and we shouldn't forget that the result is not as fantastic as I would like it because we build up working capital strongly the year before.

So it was a natural reaction and it was also carried by two things. One is obviously that our, let's say, inventory came down by volume in a significant way, but we shouldn't forget that prices pay huge roll because prices declined throughout the year.

Obviously, it also means that the valuation of our both receivables and our stocks were much lower. But on top of that, we use both this is quite common more factoring.

Can you give us a bigger order factoring level at year-end and where it was at the end of 2022?

Yes. Maybe I'll hand over here to Franz.

Yes, good morning. So we have basically increased our factoring volume by around EUR200 million.

And overall, we had a working capital improvement in this year, EUR470 million, including this EUR200 million.

Is that now a level that you consider kind of a sustainable or stable going forward?

Generally, yes, it will obviously depend. So to say, I think in terms of volume reduction, we can do some -- a bit of more work.

However, depending on the price development, it might well be that our working capital is slightly going up if prices go up. And obviously, that's something we would hope for.

And factoring in absolute levels, how much is it?

It's about EUR260 million.

Staying with the cash flow. You invested or CapEx was EUR425 million in '23.

I think the most recent guidance, a little bit below EUR400 million. Now you're guiding for EUR300 million in the current year, that's including carryover.

So I was wondering now that actually we've invested a bit more than guided in '23, what the carryover would actually be?

The carryover is out of the open project, which still ongoing but it's not in a huge extent. And as you correctly said, we are guiding now the EUR300 million CapEx payments in 2024 and that is all the same-store profit and cash protection plan, which should take us in this regard.

And maybe coming to operational topic. I mean, what I found particularly striking in the fourth quarter was the performance of Packaging, earnings-wise.

I mean, the margin of 11%, that's very strong. That kind of the result of the cost-cutting measures and all the restructuring that is done in this segment, meaning this is the level that also will be sustainable at least for the next quarters or were there some special effects?

I mean, I guess, a good product mix but anything else that we should consider?

So let's go back what drove it. I think there were some self-help issues.

So for instance, I mean, we had some product innovations and so some a number of customers allocated additional volumes to us because of our product quality. By the way, also because of our improved board qualities, which we have.

That was one thing, then we had the number of cost measures. One thing and this will more or less continue and this is absolutely sustainable, the additional tailwinds, which we benefited from in '23 and also in the first quarter of '24 is obviously a decrease in cartonboard prices.

And once the cycle reverses, and we see it now reversing. So we will have increasing cartonboard prices.

Obviously, there is some delay. Now unlike in the past, when the delay was really very much delayed by up to a year or so, we have no contract in place, which allow for a quicker adjustment to new prices.

But still, there will be some lag of three, four months typically. And this will be a sort of headwind.

On the other hand, a headwind which we like because it will be reflected then in better Board & Paper results.

That's already the prelude for one question because you are flagging some price increases as of the second quarter in Board & Paper. I mean, given trend that we're seeing now on the pricing side, I mean, how confident are you that this goes through?

And in relation to that, is that across the board or is it for specific product areas?

So we have already increased prices for uncoated fine paper. We -- I'm very confident on the recycled cartonboard, so WLC, that we will get a price increase.

There is -- there were also the market leader in FPP. So in virgin cartonboard, we are the number three in the market, and therefore, we are not taking any initiatives there and there seems to be no movement in prices for the second quarter.

So it's a mixed picture.

So paper and recycled cartonboard, but not for virgin fiber?

Yes.

And the final question would be on the restructuring and potential plant closures. I mean, of course, you can't -- or you won't give us concrete details, but can you just outline your general plans?

Is this more of how should I say of the small scale and closure that you're targeting? Or is it more of a comprehensive program?

So I think over the years, we have downtime again, the structural adjustments and they might happen again this year. But let's say, the focus is not on taking plants out simply because almost all our plants and all our paper mills are very competitive.

And therefore, there is generally -- it wouldn't make sense to take them out. So we are not hesitating with a very simple philosophy.

We invest well and structure companies well to be strongly positioned. And if we believe that we will not achieve a strong competitive position, then we close it.

And at the moment, there is very little need. We do have some companies which are loss-making, which are mainly from the Essentra business, but there we have done -- made good progress, so one should never exclude anything because the year has been 10 months to do, but it will not be a major lever, so to say.

It's more on maybe taking some shifts out and other cost reduction programs.

I was wondering if you could comment on your hedging of the energy and the potential impact it might have had on volume declines and potential market share losses in Board & Paper. How is your hedging at the moment?

And yes, did you lose market share because of higher hedges than competitors, for example? And how do you see this going forward?

Yes. So first of all, we haven't lost any market share.

I think we are gaining everywhere market share. In hedging, we always have a continuous policy of hedging a part of our products.

That also depends how efficient the respective markets are. And if we talk about hedging also to add, it doesn't necessarily mean that we use financial instruments.

It's just that we agreed with the seller on a fixed price for a certain percentage. So we do have some hedging, if you call it or fixed prices in place.

And naturally, it's the market prices move up, you benefit from the hedging part. And if prices become cheaper, then you obviously lose out on it.

You're very confident you didn't lose market shares. That's good to hear.

Yes. Note that I know -- I mean, we've now to go through all.

I can't say it for every small part of any business. But overall, we either held it or increased it.

So since there are no more questions, it seems that everything seems to be quite clear as foreseeable, let's say so. We thank you very much for your participation, questions and interest in the company.

Our next results will be Q1 results on the 23 of April. And having said this, we wish you a great day and say goodbye to you.

Bye-bye.

Goodbye.