Kemira Oyj : Q1 2024 webcast (transcript englanniksi)

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EDITED TRANSCRIPT

KEMIRA.HE - Q1 2024 Kemira Oyj Earnings Call

EVENT DATE/TIME: APRIL 26, 2024 / 7:30AM GMT

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APRIL 26, 2024 / 7:30AM, KEMIRA.HE - Q1 2024 Kemira Oyj Earnings Call

C O R P O R A T E P A R T I C I P A N T S

Mikko Pohjala Kemira Oyj - Vice President - Investor Relations

Antti Salminen Kemira Oyj - President, Chief Executive Officer, Member of the Management Board

Petri Castren Kemira Oyj - Chief Financial Officer, Member of the Management Board

C O N F E R E N C E C A L L P A R T I C I P A N T S

Martin Roediger Kepler Cheuvreux - Analyst

Isha Sharma Stifel Nicolaus Europe Limited - Analyst

Anssi Raussi SEB Enskilda Equities - Analyst

Andrew Noël chemicalESG - Analyst

P R E S E N T A T I O N

Mikko Pohjala - Kemira Oyj - Vice President - Investor Relations

Good morning, everyone, and welcome to Kemira's Q1 2024 results webcast. My name is Mikko Pohjala from Kemira's Investor Relations. And here with me today is our President and CEO, Antti Salminen, as well as our CFO, Petri Castrén.

As you surely have seen, we have earlier today published our Q1 results, and we had a strong start to the year. And during this webcast and during the presentation, Antti will go through the main events of the quarter and also give some reflections from his post as President and CEO.

And then we will go more into the financials, into the details with Petri. And as is the case typically, you can present your questions either on the teleconference line or then you can submit them via the webcast tool to me.

But with this short intro, Antti, I'll hand it over to you.

Antti Salminen - Kemira Oyj - President, Chief Executive Officer, Member of the Management Board

Thank you, Mikko. What a way to start. What a way to start the year. What a way to start my stint as the CEO of Kemira. Really strong start for the year, as you've seen from the results.

It's a great honor to be able to be here presenting these results as the CEO of the company. I've started a couple of first months touring around, meeting our people around the world, meeting our customers, other stakeholders.

And it's been a really great experience to feel the support that I get from the organization, from our stakeholders, people around us, and the unleashed energy that we have in the company. So it's really good starting point to start turning a new page in the history of Kemira.

I'll talk a little bit about the kind of company that I have, in a sense, inherited and starting to kind of turn into the new era. So Kemira today is in excellent shape, and we have an excellent foundation to execute on our growth strategy.

The financial performance as to Q1 is a good evidence of, but also the record high results last year we pulled in and really good results several years before that, are witnessing the resilience of our business model. And also, the oil and gas divestment that we finalized during the first quarter of this year is another step there, kind of focusing the portfolio more and especially, reducing the cyclicality of our business model and, thus, further increasing the resilience of our business model.

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APRIL 26, 2024 / 7:30AM, KEMIRA.HE - Q1 2024 Kemira Oyj Earnings Call

The customer relationships are really strong. That's evidenced by the customer satisfaction; NPS score, record high, way above any industry benchmarks. And also in the practical work, when we talk to the customer teams, there's a lot of co-development projects ongoing with our main customers and so forth.

So really building the new future as our strategy outlines is ongoing. And really strong, good relationships are the foundation of the success.

And also, as I mentioned, the employees, the organization, the people, really highly committed organization and people that -- I have the feeling that the Kemira team, the large global team, is ready really to turn the page and go to the new future, executing the growth strategy.

Now, when we look at the highlights of the first quarter, of course, me stepping into the CEO position, we have basically a relatively new refreshed Management Board in the company. So Harri Eronen took over then the pulp and paper responsibility.

And we have Tuija leading the I&W segment -- she's been there for a year -- and Linus heading the strategy joint last summer. So there's also some new fresh spirit in the MB of the company. I think that's one of the good ways to kind of start implementing the changes and step into new era.

The oil and gas divestment, as I mentioned, was closed on February 2. And you can see the benefits of that already kind of short term in the stronger results in I&W. So basically, the portfolio is stronger in terms of profitability. And then mid and long term, that will be visible in the reduced cyclicality of the business.

I think one of the main news for the first quarter is the sequential volume growth that we witnessed in both of the business segments. So that's kind of a healthy storytelling about the underlying markets being in recovery mode and we being able to benefit from that by getting increased volumes.

Even if the top line was shrinking, but the volumes underlying are kind of giving of good confidence on future growth of the company. The political strikes in Finland had a very limited impact in our result, again, witnessing the resilience of our business model. And then, of course, during the Q1, the annual general meeting approved the increase of the dividend, which is in line in our dividend policy of paying competitive and, over the time, increasing dividends.

If we look a bit in more detail, the financial results -- so as I commented, the volume growth is what I'd like to focus on here. Because that is really kind of telling that quarter on quarter, the volumes are improving in both segments. And the organic growth that we report is, of course, still declining. But there, we need to remember that the comparison point a year ago was extremely strong Q1 in '23, driven by the energy-intensive bleaching chemistry and the really high -- extraordinary high caustic prices.

So that should be normalizing as we move forward and get to the Q2. The comparison point should be more normalized in a sense. So even there's an organic revenue decline, but the underlying volumes were growing. And what is also really important to acknowledge here is that, sequentially, quarter on quarter, our prices stayed stable.

So even if we look at the world economy going into this year, it seems that it's softening and a bit soft, which, typically, is reflected in some release on the raw material sites and so forth. But despite this softness, overall economical softness, we were able to hold to our prices, which is, I think, another evidence of the good work that we've been doing over the past few years on building our pricing capabilities and our position on the market and the strong customer relationships that we have.

Operative EBITDA margin, stable year on year, on the record-high level. So it's good to remember that even if there was not a huge increase in the margins, but we are on the best level ever for this company and, steadily, about 20% level in terms of EBITDA. So really good performance there as well, and the whole organization has contributed really well to this.

Cash flow, strong and really, at all possible respects, really good strong start to the year. If we then look a bit deeper into the pulp and paper, again, just repeating that despite of the strikes in Finland and, say, roughly EUR10 million top-line impact of that, the volumes grew.

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APRIL 26, 2024 / 7:30AM, KEMIRA.HE - Q1 2024 Kemira Oyj Earnings Call

So if it would not be for the strikes, the volume growth would have been even stronger. And that market recovery you've seen also yesterday from many of our big customers, announcing their results and commenting on the outlook for the year, so it's very evident from their results as well that the underlying pulp and paper market is at the steady recovery mode right now.

And then if we look at the industry and water, also here, we had volume growth. And also here, we were sequentially able to hold the margins. And here, of course, when you look at the I&W numbers, you have two sets of numbers because of the oil and gas divestment, so the externally reported. And then, internally, we are, of course, following the like-for-like comparison without oil and gas because that's what the management should be focused on.

And here, I'd like to turn the focus on the extremely high return on capital employed at 35%, which is really not only good for us, but I think it's industry-wide really stellar performance. And it's, again, another evidence of the portfolio actions that we've been doing and their impact. So the divestment of the oil and gas business did not only help us improve the margins, but it's also visible in the return on capital employed. So the portfolio in I&W being, in that sense, much healthier than previous.

Then looking a bit forward and our strategy, as mentioned, the strategy as such, which we've, of course, started to review now is unchanged. The fundamentals behind that are very valid, and we are very confident that executing on this strategy will get us to a growth trajectory in the future.

The three main pillars of the strategy are the growth in the water treatment side of the business, then growth in the renewable solutions, and growth in the digital services-led sales. And there, if we look at the water treatment area, there, we are really looking at geographical expansions to the areas in the world where we are not that strong yet and technological additions into our portfolio.

So technologies that help us serve better the same client base, the customer base that we are serving today in the water industry and expanding our reach to the total water treatment chemicals market as the main vehicles to grow there. When we look at the renewable solutions area, there, we are nicely on the kind of trajectory to reach our communicated over EUR0.5 billion revenue target by 2030 from there.

'23 was a bit of a dip there, but that's to a high degree explained by, basically, the collapse of the pulp and paper market in the -- one year ago, spring '23. Because big part of the renewable sales today are going to the pulp and paper markets. But I'm really confident that we are back on the trajectory this year.

And there, some of the highlights where we have been progressing very well are the so-called biomass balanced polymers, which, especially in the water treatment area, are selling now well across the Europe. And we are getting a good start in the US as well for those. So replacing a fossil-based polymers in the water treatment by biomass balanced equivalents. So that's progressing well.

Also, the collaboration that we have with some of our partners in the biobased, IFF and Danimer, those both are progressing really well. And I'm very confident that later, going into the year, we come out with commercial launches on really innovative new products for several application areas on this bio domain.

And then when we look at the digital services revenue there, we actually -- last year, we reorganized a bit and formed a kind of Kemira-wide platform to accelerate the development of new solutions for the digital phase. And now during a couple of first months, I've started a review and project on looking at how can we further and better use artificial intelligence to support our service business and innovation in this company. So a lot of good work going there as well.

And I think these pillars are forming a good basis for future growth of this company, future profitable growth, starting from this good profitable level. And balance sheet, really strong. So that gives us a good basis and good ammunition to execute on the strategy.

So with these words, I hand it over to our CFO, Petri Castrén, who will go a bit deeper into the financials. And the floor is yours, Petri.

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APRIL 26, 2024 / 7:30AM, KEMIRA.HE - Q1 2024 Kemira Oyj Earnings Call

Petri Castren - Kemira Oyj - Chief Financial Officer, Member of the Management Board

Very good. Thank you. Thank you, Antti. So excellent performance from '23 continued into Q1. And as typical, I'd like to point out a few things.

And I think the key takeaways from this quarter are: volumes, the volume pickup -- and I'd give you a little bit more data on top of what Antti was saying; our management of pricing -- I'll give you some additional data there as well; and also, the resilience of our business model.

And now post the oil and gas divestiture, we are really a lot less cyclical. And, of course, the predictability of our pricing based on longer-term contracts. And also, the predictability of -- relatively good predictability of our volume demand really gives us a good basis to really claim that our business model is really resistant or -- resilient is the word that I was missing for a second.

Here's the traditional revenue and profitability bridge based on our reported numbers. When you read our report, you also see that we separately give comments on oil and gas adjusted basis. But here is the bridge on the reported basis.

As Antti was saying, management is really looking at the business now sort of post -- sort of pro-forma basis, adjusted for the divestment. And therefore, my sort of volume comments and other comments that I offer here are sort of based on that sort of analysis.

But still, for clarity, the EUR763 million reported revenue that you see here and the EUR162 million of EBITDA, this still includes one month of oil and gas revenue. So the closing was February 2.

So we have the January revenue included in the reported numbers. The adjusted numbers, EUR719 million revenues and EUR159 million of EBITDA in the report, those exclude the January oil and gas revenue and related profit.

So looking at the revenue bridge, as you move past the divestment impact, next in the bridge, you look at the volumes. And Antti was already talking about the volume growth. So there's a 1% positive volume growth.

And the impact of the strikes in Finland, the political strikes, was roughly 1% on a group level and about 2% for the pulp and paper segment. Because this really impacted the pulp and paper segment, not I&W really at all.

Moving from volumes to pricing. This is sort of the last quarter when we have a tough comparison. You may remember that year ago, in Q1 of '23, we still had very high caustic prices. We had very high electricity prices. And that's, of course, reflected in the comparison period.

And that's also reflected in our sales prices because we were able to pass through a lot of those extra costs to our customers. So the 9% price decline, more than half is explained by those impacts alone: the caustic price and the electricity price. And actually, we're only looking at the electricity price in the Nordics, where we track it separately.

So the impact of those is more than half of the 9%, which then, of course, means that the rest of the portfolio, the pricing was holding up really well and well below 5% annual price decline. And if you compare that to the rest of the industry -- and I've been sort of glancing through the various reports that have come out -- a number of chemical companies have reported price declines of significantly higher than 5% or so. So I think this is a very nice comparison and, obviously, a big driver for our good quarterly performance.

Of course, there are competitive pressures in the marketplace. But our organization, our salespeople, our customer-serving teams, have really done a good way to demonstrate the value of our products to our customers.

Then if we turn our attention to the profitability bridge. Sales prices I already commented. Then, of course, the next item, besides the divestment impact, is the change in variable costs.

And then the variable costs then include the mirror image of the electricity, meaning that a big part of the variable costs is also impacted by the caustic, which is partially a pass-through item for us. And then, of course, some of that high electricity was visible in our variable costs.

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APRIL 26, 2024 / 7:30AM, KEMIRA.HE - Q1 2024 Kemira Oyj Earnings Call

So the key point, I think, which we are paying attention to a lot, and you perhaps should also, is the net impact. And the net impact of minus EUR10 million, I think it's a good outcome, particularly at this point of the cycle, since we are already well underway -- under the variable cost reduction cycle so that we've been able to manage it to this level is really good, particularly as the volumes are picking up.

So the net impact, EUR10 million, is almost fully offset. And round numbers is offset by the volume growth. So a good outcome.

I think the final comment I point out here is fixed costs, so fixed cost increase of EUR5 million. Again, I think that's a good outcome since we all know that we're all fighting against global inflation, impacting salaries, impacting all the services that we buy. So in that context, it's a very good outcome.

So conclusion, the normalization of caustic prices and electricity costs has eliminated some of the extra benefit that we still enjoyed in Q1 of '23, yet we're still able to maintain the EBITDA margin at the same level as last year.

This is a new slide, again, trying to prove the point of the resiliency of our end markets. And the slide is about 12-month trailing average of our volumes and now after the oil and gas exit.

So obviously, over the last maybe eight years, we've gone through a number of cycles. And you'll see that, typically, the volume changes on this sort of cycle. 12-month trailing period have been less than -- plus or minus 5%.

Now last year was clearly a bigger one, roughly 10%, on the back of what Antti was also describing as a very abnormally bad year for the pulp and paper industry. And also, '23 was also impacted by our exit from Russia because we exited the Russian business after the Ukrainian war started in '23.

So obviously, the volume decline was visible in the '23 numbers compared to '22. Having said that, we have managed the profitability through these cycles extremely well.

Variable costs, the headline says stabilizing. If you look at the big changes, you might wonder why we are saying that. But if we exclude the electricity costs and we're looking at consecutive quarters, this really looks a lot more stable. So our forecast for consecutive quarters and also the last quarters of -- couple quarters of history is already relatively stable variable costs.

History, they have been declining still a little bit in the last couple quarters. Now our forecast is that we will remain roughly flat or roughly stable across the basket of raw materials that we buy. Of course, there are some areas where we have pressures, typically supply-issue related. But then there may be some relief on some others.

So across the basket, we're looking at the relatively calm variable cost environment -- knock on wood because surprises are always the one thing that we are mindful of. But those surprises are not visible. And again, I sort of commented on our ability to hold on to the pricing.

A little more data on the strength of the balance sheet that Antti was already talking about. So 0.6 net leverage and net debt below EUR400 million. So obviously, very strong numbers. And here, I would sort of almost -- I have to comment that the strong balance sheet is an enabler. But of course, it's not a target on its own right, let alone a strategy on its right.

But it obviously -- it does provide us tools to execute our growth strategy, whether it would require external or inorganic -- inorganic or organic investments. Antti was talking about -- commenting on the high capital efficiency, the 35% return on capital efficiency for our industry and water segment. Of course, it highlights really the value of our efficient manufacturing network in the business.

I guess, it's fair to say that it also includes somewhat older plans that while they have been very well maintained, I argue, they have been, perhaps, depreciated below their replacement costs. So that's sort of a comment there. So the 35% is not a threshold for new investments, not even the 21% for the new company, but rather, something in the mid-to-high teens.

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APRIL 26, 2024 / 7:30AM, KEMIRA.HE - Q1 2024 Kemira Oyj Earnings Call

Cash flow. Again, strong quarterly cash flow, basically unchanged from last year. Last few years have been a bit atypical from the seasonality point of view because of the big swings in costs. But if we are sort of in a normal environment, our typical seasonality is that Q1 is weaker from cash flow point of view versus the rest of the year.

And this is really driven by -- that we pay out most of our annual incentives during the Q1. We also pay a little bit higher level of cash taxes based on last year's performance. And also our CapEx cycle is also driving the cash flow so that we often have a lot of capital investment completions in Q4. But those end up being cash outflows then in Q1.

Our supplementary pension fund, Neliapila, returned EUR12 million in Q1. And this supplementary pension fund, if some of you -- if you are less familiar with that, first of all, it is a pension fund that was closed more than 30 years ago for new members. So it has, all in all, its 12 active members. But it has still a pool of over 1,000 retirees for which we are managing.

But nevertheless, it is in strong financial position. It has a capital surplus of approximately EUR100 million. And as it is in the run-off phase, we will be gradually reducing the surplus. And that's why, I think, last year, we took a roughly similar amount. And absent of really big shocks, this trend should continue.

CapEx, again, similar to last year. And the total CapEx for '24 ought to be similar or slightly more than the CapEx of last year, particularly, if you look at the number without oil and gas. And Antti was talking about our renewable business, renewable chemistries. So this now assumes that we will have a start of some additional investments into renewable chemistries.

The assumptions for '24 are largely the same as when we first published them a couple of months ago in February. Volume growth in pulp and paper markets and steady market in water segment -- water treatment. We assume that there will be no further major disruptions from political strikes in Finland or any other material disruptions to our operations.

It is still early in the year, and the last couple of months have shown that there have been new risks in the global environment. Not particular business, but the new geopolitical risks that I'm referring to, particularly the Middle Eastern crisis and tensions is just to mention one, one that has not really impacted us much. But it is there, and hopefully, it does not escalate.

Against this backdrop, we have kept our outlook for the year unchanged: revenue between EUR2.7 billion and EUR3.2 billion, and EBITDA between EUR480 million and EUR580 million. Those are compared to slightly below EUR3.4 billion reported revenue and EUR667 million of reported operative EBITDA. Or adjusted for oil and gas divestment, those numbers would be slightly below EUR2.9 billion and EUR595 million of operative EBITDA.

Finally, I mentioned our Capital Markets Day, which we plan to host in Finland in September this year. September 26 is the date. So that's an invitation. Please mark your calendars. We would love to see you here in Finland.

That's when we plan to update you on our strategy and priorities, the strategy work that Antti was talking about. And this is also a date when we plan to provide an update on our long-term financial targets.

With that, we're ready to move to Q&A session.

Q U E S T I O N S A N D A N S W E R S

Mikko Pohjala - Kemira Oyj - Vice President - Investor Relations

Thank you, Petri and Antti. So just as a reminder, you can post your question on the teleconference line. But we have a number of questions from the webcast tool already. So maybe we start with that and then let people on the teleconference line digest their questions first.

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APRIL 26, 2024 / 7:30AM, KEMIRA.HE - Q1 2024 Kemira Oyj Earnings Call

Maybe we start with the outlook. So you touched upon this, Petri. So this is a question from Antti Koskivuori from Danske, regarding the unchanged guidance. So strong Q1 implies annualized EBITDA run rate of approximately EUR640 million. Could you walk us through the negative drivers for the coming quarters?

Petri Castren - Kemira Oyj - Chief Financial Officer, Member of the Management Board

Shall I try that?

Mikko Pohjala - Kemira Oyj - Vice President - Investor Relations

Yeah.

Petri Castren - Kemira Oyj - Chief Financial Officer, Member of the Management Board

Okay. Obviously, we can do the math, the multiplication up to 4 at least. So we know the numbers. I don't think there's really much anything to say that this is still early in the year. And there are these uncertainties that I mentioned.

Our outlook assumes no political strikes. We have no certainty on that one. Our outlook and our view is sort of hinging that there will be no other political risks arising from some of the global tensions.

Let's see. Let's hope that none of those materials -- but we know all about those. But obviously, it is a good start for the year. And I think I'll leave the comments to that.

Mikko Pohjala - Kemira Oyj - Vice President - Investor Relations

Thank you, Petri. Then let's continue. The next question from the webcast comes from Petri Gostowski from Inderes. Two questions here.

If we take the first one, how would you compare the impact of the strikes quarter on quarter? Will the impact differ on Q2 from what we saw in Q1?

Petri Castren - Kemira Oyj - Chief Financial Officer, Member of the Management Board

Why don't you take that?

Antti Salminen - Kemira Oyj - President, Chief Executive Officer, Member of the Management Board

Yeah, I can take that. So as we mentioned, so the impact on quarter one of the strikes in Finland was roughly EUR10 million on top line and a couple of millions in the result, so not material. And we don't expect any major impact on quarter two if there are no new strikes. So from the now-ended strikes, minor impact in Q2.

Mikko Pohjala - Kemira Oyj - Vice President - Investor Relations

Indeed, indeed. Then the second question from Petri Gostowski is, was there some difference in volume development in municipal industrial customers in industry and water?

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APRIL 26, 2024 / 7:30AM, KEMIRA.HE - Q1 2024 Kemira Oyj Earnings Call

Antti Salminen - Kemira Oyj - President, Chief Executive Officer, Member of the Management Board

No material difference. So basically, the volume development was a bit stronger in industry and water segment than pulp and paper because pulp and paper was impacted by the strikes. But overall, quite steadily, across the businesses that we run, we see positive volume development.

Mikko Pohjala - Kemira Oyj - Vice President - Investor Relations

Indeed. And within industry and water, rather similar development volume between municipal and industrial customers. Still further questions from the webcast.

This is more of a financial question perhaps for Petri. So from Samu Wilhelmsson, so could you comment more on your near-term finances? You stated that the strong balance sheet is an enabler, and you have EUR456 million of short-terminterest-bearing debt, from which nearly half matures during the next months. Is this maturing debt going to be financed out with cash or refinanced forward?

Petri Castren - Kemira Oyj - Chief Financial Officer, Member of the Management Board

Yeah, it's true that we always have short-term cash because part of our foreign operations are funded with short-term debt. And then, also, we use just for cash management purposes some short-term debt.

But yes, we do have a EUR200 million bond that matures in May, which we intend to pay mostly from cash reserves. We do have already negotiated EUR50 million long-term facility with one of our existing lenders.

It's a long-term loan from a multinational institution, which we then will draw during the year, not necessarily at the same time, but during the year. So net impact is EUR150 million will be paid from cash.

Mikko Pohjala - Kemira Oyj - Vice President - Investor Relations

Good. And maybe here we go to the teleconference. There are still some questions from the webcast, but let's take some questions from the line here in between.

Operator

(Operator Instructions) Martin Roediger, Kepler Cheuvreux.

Martin Roediger - Kepler Cheuvreux - Analyst

Hello, good morning, Antti, Petri, and Mikko. I have two questions, please.

First, on your EBITDA margin, which was stable year over year, great performance. And excluding oil and gas, the margin was actually up to a very great level of 24%. What was the reason for that success?

And the second question is on your financial communication. Just a couple of weeks ago, you issued this warning by the press release about the potential effect of the strike. And now we see that this strike had a very limited impact of just EUR10 million on sales and a few millions on earnings.

Can you explain this kind of financial communication? Or do you regret that you have just issued a warning and then, finally, then the outcome was minor? Thank you.

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APRIL 26, 2024 / 7:30AM, KEMIRA.HE - Q1 2024 Kemira Oyj Earnings Call

Antti Salminen - Kemira Oyj - President, Chief Executive Officer, Member of the Management Board

Yeah, if I take that. So basically, the really good margin performance, especially you were referring to the I&W side and so forth. So as we have been repeating, I mean, this is a result of our really strong position in the selected target markets where we operate and the pricing power and capabilities that we have been developing.

So these are yielding the results. There's no miracles behind it or anything exceptional. As I mentioned in my speech, the kind of exclusion of oil and gas is positively impacting the percentage margins because that was dilutive part of the portfolio. But that's really it.

And when it comes to the communication, I think we needed to do the communication because, at that point, we didn't know exactly how big the impact is. It's good to understand that the impact for us was not coming from our direct raw material deliveries not being able to be delivered or from our products not being able to be delivered to overseas locations.

No, the impact to us came via the pulp and paper customers that we serve. And they were already earlier running down many of the mills and lines that they were operating. And then there's some inventories in the value chain in between. So the impact for our operation comes with the delay.

So at that point, we didn't know how quickly they will be ramping up and so forth. And if the situation would have continued, the impact would have been bigger, and the close-downs in our end would have been bigger.

But our communication was really about the kind of operational ramp-down of some of our lines. Because there was -- at that point, it seemed that there's not enough demand to make any sense to run the factories.

Petri Castren - Kemira Oyj - Chief Financial Officer, Member of the Management Board

And if I continue on that one, so first of all, Martin, we did not issue a stock exchange release. So this was a general press release. And this was really about the situation in the Finnish marketplace, where the political strikes were continuing.

And at the time of the release, there was no end to those -- visible. We, obviously, now are smarter. But at the time of release of that, there was no end to that. And there was also sort of -- important that companies that need to shut down operations and need to put down employees out of work, that we send the message to the economy and to the society at large about that.

So that was not primarily, and actually not at all, meant to be a financial release. But that was in the month of April. And it was really -- if those political strikes would have continued, if we were still in the political strike situation, our customers would be impacted much more than they probably are -- have been. And hence, the impact would have been much more for us.

So in that sense, we need to put that into a context that we had at the time of the release. But it was not a financial release.

Martin Roediger - Kepler Cheuvreux - Analyst

Thank you very much.

Operator

Isha Sharma, Stifel.

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