Q1 2024 Coloplast AS Earnings Call

Operator: Ladies and gentlemen, thank you for standing by. Welcome and thank you for joining the Coroplast Interim Financial Statement for Q1 2023-24 conference call. Throughout the recorded presentation, all participants will be listed on an emote. The presentation will be followed by a question and answer session. If you would like to ask a question, you may press star followed by 1 on your touchtone telephone. Please press the start key followed by zero for operator assistance.

Ladies and gentlemen, thank you for standing by.

Thank you for joining the call plus interim financial statement for Q1, 2023 'twenty four conference call.

Throughout todays recorded presentation, all participants will be listen only mode.

Presentation will be followed by a question and answer session. If you'd like to ask a question you May press star followed by wondering if touchtone telephone piece.

Please press the star followed by zero for operator assistance.

Christian Wilhelmsen: I would now like to turn the conference over to Christian Wilhelmsen, President and CEO. Please, go ahead. Good morning. Thank you, Operator, and welcome to our Q1-23-24 conference call. I'm Christian Willemsen, the CEO of Coloplast, and I'm joined by our CFO, Anas Loningskogl, and our investor relations team. We'll start, like we usually do, with a short presentation by Andrus and myself, and then we'll open up for questions. Could I ask you all to please turn to slide number three? We delivered 8% organic growth and a reported AVID margin before special items of 28%. Return on invested capital after tax and before special items was 15%, a level that reflects the full impact of the Kerasys acquisition, which we expect to be the trough.

I would now like to turn the conference over to Kristen Williamson President and CEO. Please go ahead.

Good morning, Thank you operator, and welcome to our Q1 'twenty three 'twenty four conference calls I'm Christian billings from the sea of Cola, plus and I'm joined by our CFO on a floating skull call and our Investor Relations team.

We'll start like we usually do with a short presentation by Andrew and myself and then we'll open up for questions could I ask you all to please turn to slide number three.

We delivered 8% organic growth in our reported EBIT margin before special items of 28%.

Return on invested capital after tax and before special items was 15% a level, which reflects the full impact from the cashless acquisition in which we expect to be the trough.

Christian Wilhelmsen: Satisfied with the solid start of the year, we continue to outgrow the market and help a lot more people with intimate health care needs. Let me start the call today with a few highlights. We had a strong start in our chronic care businesses with both Austin Care and Continence Care delivering 8% organic growth. In Cognizant's care, we're starting to see positive impact from Lugia, our new male intermittent catheter with microholozone technology. The product is now available in 10 markets, with the most recent launches over the last few months in the U.K., the U.S., and Germany. The reception of the product across markets has been fantastic. Based on a recent survey, we know that 95% of healthcare professionals would recommend Lugia to their patients, while 86% of users new to catheterization have reported that they do not worry about urine left in the bladder when using Lugia.

I'm satisfied with the solid start of the year, we continue to outgrow the market and help a lot more people with intimate health care needs.

Let me start the call today with a few highlights.

We had a strong start in our chronic care businesses with both Ostomy care and continence care delivering 8% organic growth.

And your comments care, we're starting to see positive impact from Blue job, a new male intermittent catheter with a micro holds on technology the product is.

Now available in 10 markets.

With most recent launches over the last few months in the U K.

The U S and Germany.

The reception of the product across markets has been fantastic.

Based on a recent survey, we know that 95% of health care professionals would recommend lose out to their patients while 86% of users you would've Katherine nations have reported that they do not worry about joined left in the bladder when using Luchow. These are.

Christian Wilhelmsen: These are very strong numbers. Our newest member of the family, Kerasys, is also off to a good start with a 4% contribution to reported revenue growth in Q1, in line with expectations. The underlying business growth was around 35%, reflecting continued market share gains in the U.S. And last but not least... We've now officially kicked off what I'll call the year of launches with the launches of Biotain Silicone FIT in Mooncare and Peristein Light in Boggs. Biotane Silicone Fit is a new silicone foam dressing for pressure injury prevention and wound management launched in January 2024 in the U.S

Very strong numbers on.

Our newest member of the family care assistance also off to a good start with 4% contribution to reported revenue growth in Q1 in.

In line with expectations, the underlying business growth was around 35%, reflecting continued market share gains in the U S.

Last but not least.

We've now officially kicked off what I'll call the year of launches with the launches of <unk>, so that kind of fit in wound care and <unk>.

Pasty light involved here.

<unk> silicone fit as a new silicon from dressing for pressure injury prevention and wound management that launched in January 2024 in the U S.

Christian Wilhelmsen: This is a strategic product launch that strengthens our advanced dressings portfolio with a U.S. specific office. To reach the full potential of the launch, we have also now invested in a dedicated U.S. wound care organization. As such, with the launch of Biotene Silicone Fit and the expansion of our U.S. wound care sales force, we're well positioned to build a meaningful presence in the world's largest advanced wound care market Peristine Light is a new low-volume transanal irrigation device in bowel care that is designed for ease of use.

This is a strategic product launch that strengthens our advanced dressings portfolio with a U S specific offering.

And to reach the full potential of the launch. We are also now invested in a dedicated U S wound care organization.

As such with the launch of biting so that kind of fit in the expansion of our U S wound care sales force, we're well positioned to build a meaningful presence in the world's largest advanced wound care market.

Firstly in light is a new low volume transient irrigation device and ball care, which is designed for ease of use.

Christian Wilhelmsen: Bowel care is a sub-segment of our condensed care business, and today it's an area where many patients remain untreated. With the launch of Paristine Light, we aim to expand the addressable market and help more people with bowel dysfunction by making transgenital irrigation an option for more patients. Paristine Light will be launched in markets across Europe over the next 12 months, and it's expected to support continued good growth in our bowel Now, let's take a look at today's results in a bit more detail. Please turn to slide number 4.

All care is a subsegment of our contents kept business and today, it's an area where many patients remain untreated.

With the launch of parenting light, we aim to expand the addressable market and help more people with ball dysfunction by making transient on irrigation and options for more patients.

Product will be launched in markets across Europe over the next 12 months and it's expected to support continued growth in our ball care business.

Now, let's take a look at today's results in a bit more detail. Please turn to slide number four.

Christian Wilhelmsen: In Austin, McCay, organic growth was 8% for the first quarter, and growth in Danish Krona was 5%. Our Sincera Mule portfolio was the main growth contributor, followed by the Bravo range of supporting products. Our Sensura and Asura Altona portfolios continue to contribute to growth in the major markets. From a geographical perspective, growth in the quarter was driven by broad-based contributions across emerging markets as well as Europe, mainly driven by the UK. The AustinCare business in China posted mid-single-digit growth in Q1, in line with expectations.

In Ostomy care organic growth was 8% for the first quarter and growth in Danish kroner was 5% awesome soy meal portfolio was the main growth contributor followed by the Bravo range of supporting products.

Our sensor and a sore I'll turn our portfolios continue to contribute to growth in emerging markets.

From a geographical perspective growth in the quarter was driven by broad based contributions across emerging markets as well as Europe, mainly driven by the U K.

The Austin care business in China posted mid single digit growth in Q1 in line with expectations growth was driven by a strong quarter in the hospital channel and a double digit increase in inflow of new patients while the consumer channel remained impacted by lower average value.

Christian Wilhelmsen: Growth was driven by a strong quarter in the hospital channel and a double-digit increase in the inflow of new patients, while the consumer channel remained impacted by lower average values per patient and a bit of a consumer center. Incontinence care organic growth was 8% for the first quarter, with growth in Danish Corona of 4%. Growth in the quarter was driven by solid momentum in intermittent catheters across the SpeedyCath portfolio, with good contribution from both compact, standard, and flexible catheters. Lugia, our new male mitten catheter, also contributed to growth in Q1. Our two smaller segments, continence care, bowel care, and collecting devices, both also contributed to growth.

<unk> per patient and a bit of consumer sentiment.

Incontinence care organic growth was 8% for the first quarter with growth in Danish krone or 4%.

Both in the quarter was driven by solid momentum in intermittent catheter is across the speedy cast portfolio with good contribution.

From both compact standard and flexible catheters luchow on your male intermittent catheter also contributed to growth in Q1.

Our two smaller segments incontinence care ball care and collecting devices. Both also contributed to growth.

Geographical perspective, all regions contributed to sales growth in Q1 led by Europe.

Driven primarily by Germany and France.

Markets, where reimbursement has been recently established or improve such as Poland, Australia, Japan, and South Korea, all continued to perform well in all grew double digits.

Christian Wilhelmsen: From a geographical perspective, all regions contributed to sales growth in Q1, led by Europe, driven primarily by Germany and France. Markets where reimbursement has recently been established or improved, such as Poland, Australia, Japan, and South Korea, all continued to perform well, and all grew. Boyson Respiratory Care posted 7% organic growth for the first quarter, with growth in Danish corona of 6%. Both laryngectomy and tracheostomy posted high single-digit growth in Q1.

Well, it's in respiratory care posted 7% organic growth for the first quarter with growth in Danish krone off 6%.

Both of them are injected me I'm tracheostomy posted high single digit growth in Q1 cost in the quarter includes negative impact from rationalization of noncore low margin products.

And then injected me was driven by an increase in the number of patients served in existing and new markets as well as an increase in patient value driven by the Pobox life portfolio.

Growth in Tracheostomy was driven by continued solid demand and positive impact from forward integration.

Christian Wilhelmsen: Growth in the quarter included the negative impact from rationalizing non-core, low-margin products. Growth in longectomy was driven by an increase in the number of patients served in existing and new markets, as well as an increase in patient value driven by the Provox Life portfolio. Growth in tracheostomy was driven by continued solid demand and a positive impact from forward integration in both European markets and the U.S. From a geographical perspective, all regions contributed to growth led by Europe. In January, we achieved a significant milestone in China where we made the first commercial sale of our voice prosthesis, enabling a laryngectomized patient to regain their voice. China is a good example of how ETOS Medical can benefit from Coloplast's Global Footprint to the benefit of many laryngectomized patients who, until now, did not have access to treatment.

Both European markets in the U S.

From a geographical perspective, all regions contributed to growth led by Europe.

In January we achieved a significant milestone in China. When we made the first commercial sale of a voice plus teases, enabling Atlanta injected mice patient.

To regain levels.

China is a good example of how he touched medical can benefit from coal plus global footprint to the benefit of the many land victimised patients.

Who until now did not have access to treatment.

Yeah. It tells the medical team is now able to utilize our well established best in class infrastructure and business support functions, enabling.

And then to focus on building the standard of care in commercializing the portfolio to reach many more patients.

Finally, I'm also happy to say that in addition to the continued good performance in voice and respiratory care. We also continue to make good progress on the integration of VITAS medical into the coal plus infrastructure across key markets, allowing us to reap the anticipated synergies in 'twenty three 'twenty four.

Organic growth in advanced wound care for the first quarter was 9% and growth in Danish kroner was 40%, which includes the impact from the <unk> acquisition.

Christian Wilhelmsen: The eighth house medical team is now able to utilize our well-established, best-in-class infrastructure and business support functions, enabling them to focus on building the standard of care and commercializing the portfolio to reach many more patients. Finally, I'm also happy to say that, in addition to the continued good performance in voice and respiratory care, we also continue to make good progress on the integration of ETOS Medical into the Coloplast infrastructure across key markets, allowing us to reap the anticipated synergies in 23-24. Organic growth in advanced wound care for the first quarter was 9%, and growth in Danish corona was 40%, which includes the impact from the Kerosis acquisition. The advanced wound dressings business grew 9% in the first quarter, which includes benefit from a lower baseline last year.

The advanced wound dressings business grew 9% in the first quarter, which includes benefit from a lower baseline last year.

Growth in the quarter was broad based with solid contributions from Europe, especially Germany, the U S and emerging markets led by China.

The biotech silicon portfolio continued to be the main growth contributor in the quarter.

This is revenue amounted to 229 million Danish kroner in Q1 with underlying revenue growth of around 35%.

The hospital channel and surgical wounds were the main growth contributors and ketosis operating profit margin, excluding PPA amortization was around 10% in Q1.

And intervention all urology organic growth was 5% for the first quarter up against the high baseline last year.

Growth in Danish kroner was 2%.

Our men's health business in the U S was the main growth contributor in the quarter, followed by the Endo urology portfolio, including solid contribution from our first laser equipment.

Christian Wilhelmsen: Growth in the quarter was broad-based, with solid contributions from Europe, especially Germany, the U.S., and emerging markets led by China. The Biotene Silicone portfolio continues to be the main growth contributor in the quarter. Kerasys's revenue amounted to $229 million Danish Krona in Q1, with underlying revenue growth of around 35%. The hospital channel and surgical wounds were the main growth contributors.

The cilium fiber laser drive.

Would you a graphical perspective the U S was the main growth contributor in Q1.

And with this.

I'll now hand over to Anders who'll take you through the financials and outlook in more detail. Please turn to slide five.

Thank you Christian and Hello, everyone.

Total revenue for the first quarter increased by 501 million things corner around 8% compared to last year.

Christian Wilhelmsen: And Caries' operating profit margin excluding PPA amortization was around 10% in Q1. In Interventional Urology, organic growth was 5% for the first quarter, up against a high baseline last year. Growth in Danish Kona was 2%. A men's health business in the U.S. was the main growth contributor in the quarter, followed by the indoor urology portfolio, including solid contribution from our first laser equipment, the Thulium Fiber Laser Drive.

Any growth contributed 459 million Danish kroner, all around 8% to reported revenue.

Wired revenue contributed 229 million things coma to reported revenue for the first quarter or around 4%, reflecting free months of impact from the coast acquisition.

Foreign exchange rates had a negative impact of 187 million things Kona unreported revenue.

Mainly due to the depreciation of the U S dollar argentinean peso against the things corner.

Please turn to slide six.

Gross profit for the first quarter amounted to $4 5 billion things Cuomo corresponding to a gross margin of 68% on par with last year.

Gross margin was positively impacted by the inclusion of <unk>, which contributed with around 100 basis points.

Anders: From a geographical perspective, the U.S. was the main growth contributor in Q1. And with that... I'll now hand over to Anders, who will take you through the financials and outlook in more detail. Please turn to slide number five. Thank you, Christian, and hello everyone.

In addition to lower freight rates price increases and based on benefits of around 40 basis points from the tenant payback reform also had a positive impact on the gross margin.

The positive development in the above mentioned factors was partly offset by raw material price increases double digit wage inflation in Hungary, and ramp up costs at our manufacturing site in Costa Rica.

Anders: Reported revenue for the first quarter increased by 501 million Danish Kroner, or around 8% compared to last year. Organic growth contributed 459 million Danish Kroner, or around 8%, to reported revenue. Acquired revenue contributed 229 million Danish Kroner to reported revenue for the first quarter, or around 4.5 million Danish Kroner, reflecting Fremont's impact from the kerosene. Coin exchange rates had a negative impact of 187 million Danish Kroner on reported revenue, mainly due to the depreciation of the U.S. dollar and the Argentinian peso against the Danish krona.

Gross margin also included a negative impact from currencies of around 100 basis points.

Operating expenses for the first quarter amounted to $2 7 billion things corner they'd.

The like for like increase in operating expenses, excluding inorganic impact from ketosis was around 88 million things kona or 4% compared to last year.

Joseph contributed with 222 million things corner to operating expenses of which 26, we didnt things corner in PPA amortization included under distribution costs.

Yeah.

The distribution to sales ratio for the first quarter was 32% compared to 31% last year.

Anders: Please turn to slide 6. Gross profit for the first quarter amounted to 4.5 billion Danish Kroner, corresponding to a gross margin of 68%, on par with last year. The gross margin was positively impacted by the inclusion of kerosene, which contributed to around 100 basis points of carbon dioxide. In addition, lower freight rates, price increases, and baseline benefits of around 40 basis points from the Italian Payback Reform also had a positive impact on the Gross Domestic Product. The positive development in the above-mentioned factors was partly offset by raw material price increases, double-digit wage inflation in Hungary, and Ramp-Up Costs, our manufacturing site in Costa Rica. The Gross Margin also included a negative impact from currencies of around 100 B.C. Operating expenses for the first quarter amounted to 2.7 billion Danish Kroner.

And includes impact from the coast acquisition, and an increased level of commercial activities.

The admin to sales ratio in the first quarter was 5% on probably last year and was primarily impacted by the inclusion of campuses.

R&D to sales ratio for the first quarter was 4% of sales on par with last year.

All this resulted in an increase in operating profit before special items of 3% for the first quarter corresponding to an EBIT margin before special items of 28% compared to 29% last year.

The EBIT margin for the first quarter contained to around 100 basis points negative impact from the inclusion of cases in line with our expectations.

<unk> had a negative impact of around 120 basis points on the reported EBIT margin, mostly related to the depreciation of the U S dollar and the Argentinian peso against the things corner as well as the appreciation of the Hungarian forint against the Danish kroner.

Financing items in the first quarter were a net expense of 253 million Danish kroner compared to a net expense of 300 and.

Anders: The like-for-like increase in operating expenses, excluding inorganic impact from caresses, was around 88 million Danish Kroner, or 4%, compared to last year. Chaos contributed 222 million Danish Kroner to operating expenses, of which 26 million Danish Kroner in PPA amortization was included under distribution code. Distribution to sales ratio for the first quarter was 32% compared to 31% last year and includes the impact from the KFC acquisition and an increased level of commercial. The admin-to-sales ratio in the first quarter was 5% on par with last year, and was primarily impacted by the inclusion of Kerosene. The R&D to sales ratio for the first quarter was 4% of sales, on par with last year. Overall, this resulted in an increase in operating profit before special items of 3% for the first quarter, corresponding to an EBIT margin before special items of 28% compared to 29% last year.

34 million Danish kroner last year, driven mostly by interest expenses related to the financing of the <unk> medical acquisition as well as losses on balance sheet items denominated mostly in U S dollar and Argentinian piece one.

The tax expense in the first quarter was 342 million things corner with a tax rate of 22% compared to a tax rate of 21% last year.

The tax rate continue to include parts of impact from the transfer of <unk> medical.

Interacts with provinces to Denmark.

As a result, the net profit before special items for the first quarter increased by 8% compared to last year.

Diluted earnings per share before special items increased by 2% to 5.4 or five things cool down and include impacts from the equity raise in August 23.

Please turn to slide seven.

Operating cash flow for the first quarter amounted to 1.8 billion Danish kroner compared to 487 million things corner last year.

The positive cash flow the development was mainly driven by phasing of income tax paid which benefited from the Hs medical IP transfer.

As communicated in November following the IP transfer there will be an extraordinary mayor nip tax payment of $2 5 million things corner opinion.

Anders: The EBIT margin for the first quarter contained around 100 basis points of negative impact from the inclusion of kerosene, in line with our expectations. Currencies had a negative impact of around 120 basis points on the reported EBIT margin, mostly related to the depreciation of the US Dollar and the Argentinian Peso against the Danish Kroner, as well as the appreciation of the Hungarian Forint against the Danish Kroner. Financial items in the first quarter were a net expense of 253 million Danish Kroner compared to a net expense of 300 million Danish Kroner and 34 million Danish Kroner last year, driven mostly by interest expenses related to the financing of the Aetas Medical Acquisition, as well as losses on balance sheet items denominated mostly in US dollars and Argentinian dollars. The tax expense in the first quarter was 342 million Danish Kroner at a tax rate of 22%, compared to a tax rate of 21% last year.

Opinion things corner for full year 'twenty, three 'twenty, four mostly impacting our second quarter.

Changes in working cabinets were also had a positive impact on the cash flow, mostly driven by the stabilization trend in inventories as well as trade and other payables.

Castro from investing activities was a net outflow of 267 million things corner at a similar level to last year.

The capex to sales ratio was around 4% compared to around 5% in the first quarter of last year.

As a result, the free cash flow for the first quarter was an inflow of $1 5 billion things corner compared to an inflow of 212 million things called out last year.

The trailing 12 months cash conversion for the first quarter was 87%.

Net working capital amounted to around 26% of sales at the end of Q1 on par with last year.

We continue to expect the net working capital to be around 25% in 'twenty three 'twenty four and return to our long term expectations of around 24% at the end of the strategic pivot.

Now, let's look at take a look at the guidance for 'twenty three 'twenty four financial year.

Please turn to slide number eight.

The financial guidance on organic growth and EBIT margin for 'twenty, three 'twenty four unchanged and the assumptions laid out in November still hold.

Continue to expect organic revenue growth of around 8%, which assumes continued good momentum during the year with growth across businesses and geographies in line with our strike zone five ambitions.

Anders: The tax rate continued to include a positive impact from the transfer of AITAS medical and intellectual property to Denmark. As a result, the net profit before special items for the first quarter increased by 8% compared to last year. Diluted Earnings Per Share Before Special Items Increased By 2% to 5.45 Danish Kroner and include the impact from the equity race in August 2020. Please turn to slide 7. Operating cash flow for the first quarter amounted to 1.8 billion Danish Kroner, compared to 487 million Danish Kroner last year.

With the exception of China.

We now expect reported revenue growth in Danish kroner to be around 11% from previously around 12% impacted by currencies.

Carol says is still expected to contribute around 4% and this points to the reported revenue growth.

We continue to expect our reported EBIT margin before special items of 27% to 28%, which assumes a cross margin of around 68% prudent management of our operating expenses negative impact from kocis of around 100 basis points, including around 100 million things corner in amortization charge.

And finally, you can see the impact from currencies of around 50 basis points.

But 'twenty three 'twenty four I still expect around 50 million things corner and special items related to the ongoing integration of <unk> medical.

The net financial expenses for 'twenty three 'twenty four are now expected at around minus 750 million Danish kroner impacted mostly by losses on balance sheet items due to the devaluation of the Argentinian peso.

Anders: The positive cash flow development was mainly driven by the phasing of income tax, which benefited from the ATOS medical IP transfer. As communicated in November, following the IP transfer, there will be an extraordinary net tax payment of 2.5 million Danish Kroner, a billion Danish Kroner for a full year 2023-2024, mostly impacting our sector. Changes in working capital also had a positive impact on cash flow, mostly driven by a stabilization trend in inventories as well as trade and other assets. Cash flow from investing activities was a net outflow of 267 million Danish Kroner, at a similar level to last year.

Our effective tax rate is still expected to be around 22% positively impacted by the transfer of the AIDS us medical intellectual property.

And Capex guidance for 'twenty three 'twenty four is unchanged at around one 4 billion things corner and includes investments in establishing our new manufacturing site impossible.

With this I will hand over to Christian for final remarks, Please turn to slide nine.

Thank you very much and this so.

<unk>.

We delivered a solid start of the year and once again showed the strength of our business model and chronic care significantly outgrowing the market.

We continued with the launch of a new male intermittent catheter luge out, which we expect will set a new standard of care and intermittent catheter ablation.

And we kicked off a year of product launches with the launch of biotech silicone fit and passing light and I look forward to continue expanding our product offering with new innovation in the coming quarters.

Anders: The capex to sales ratio was around 4%, compared to around 5% in the first quarter last year. As a result, the free cash flow for the first quarter was an inflow of 1.5 billion Danish kroner, compared to an inflow of 212 million Danish kroner last year. Trading 12-month cash conversion for the first quarter was $87,000. Networking capital amounted to around 26% of sales at the end of Q1. On top of that, we continue to expect the net working capital to be around 25% in 2023-2024 and return to our long-term expectations of around 24% at the end of the strategic year. Now let's take a look at the guidance for the 2023-2024 financial year. Please turn to slide number 8.

It was also the first full quarter with care assist where we continued to see strong growth and continued adoption of the fishkill technology in the U S.

At the same time deflationary pressure, we've been experiencing over the last several quarters continues to come down.

Most recently, we've seen a positive development in the inflation levels in Hungary.

Now down to a single digit level as well as a positive trend in the electricity prices in Hungary.

In summary, I feel confident about our long term growth prospects up 8% to 10%.

And returning to an EBIT margin of 30% by the end of this strategic period, excluding cashes and also confident about an EBIT margin of more than 30% in long time.

Finally before.

Anders: The financial guidance on organic growth and EBIT margin for 2023-2024 is unchanged, and the assumptions laid out in November still hold. We continue to expect organic revenue growth of around 8 percent, which assumes continued good momentum during the year, growth across businesses and geographies in line with our Strive25 ambition. With the exception of China, we now expect reported revenue growth in Danish kroner to be around 11 percent from previously around 12 percent impacted by current... Kerosene is still expected to contribute around 4 percentage points to the reported revenue growth. We continue to expect a reported EBIT margin before special items of 27-28%, which assumes a cross-margin of around 68%. Pluton Management of our Operating Expenses, negative impact from currencies of around 100 basis points, including around 100 million Danish Kroner in amortization charges, and finally, negative impact from currencies of around 50 basis points, 23-24 I still expect around 50 million Danish Kroner in special items related to the ongoing integration of Aether Smart. The net financial expenses for 2023-2024 are now expected to be around minus 750 million Danish Kroner, impacted mostly by losses on balance sheet items due to the devaluation of the Argentinian peso.

Before we move to Q&A I'd like to mention that we will host a meet the management event in Denmark on June six this year at the event.

You'll have a chance to meet the board and management team and I will give an update on the business and main strategic themes will also host a dedicated session on campuses, which will be represented by its founder effect on particularly on Sun and his team.

We look forward to meeting many of you in person in June and with that thank you very much operator, we're now ready to take questions.

Ladies and gentlemen at this time, we'd be begin the question answer session anyone who wish to ask a question you May press star followed by one on the touch tone telephone.

If you wish to remove yourself from the question queue. You May press star followed by two.

If you didn't get speaker equipment today, please lift the handset before making your selection.

Well the question with breast I don't want at this time.

The first question will come from the line of Jack Daniel's Clark with RBC capital markets. Please go ahead.

Hi, there thanks for taking the questions.

I have three paid two on guidance and then one on highlights and so you've kind of given your commentary that the start of the fiscal year around kind of phasing through.

Through the year with a one kind of expect it to be a bit lower than I used to.

The strong start Tonight, one imply that you're expecting kind of a slowdown in Q2, Oh actually exactly have meaningful upside to that 8% what kind of revenue guide for the full year.

Suddenly on the Boston Garden.

Our expectations around margin in each one.

Without came in quite strong so does this kind of leave room for upside.

Outside to the full year.

Christian Wilhelmsen: Our effective tax rate is still expected to be around 22%, possibly impacted by the transfer of the ATOS medical intellectual property. And CAPEX guidance for 2023-2024 is unchanged at around 1.4 billion Danish Kroner and includes investments in establishing our new manufacturing site in Portsmouth. With this, I will hand over to Christian for final remarks. Please turn to slide 9.

And it's a question around Halo could you give us an update on kind of where you are with your conversations with the regulator here.

Thank you.

Alright, Thanks, a lot the checkpoint for your question. So let me start with the guidance and the facing for the rest of the year.

So as we just said there'll be a satisfied with the start of the year in Q1.

Off on our organic growth expecting it, especially in the second half to accelerate also as a consequence of improvements within our urology business.

And the more impact from the innovation and the launches that we are going to do throughout the year.

In terms of the margin and it gets to be off to a bit better start than we thought back in November in our first quarter.

Christian Wilhelmsen: Thank you very much, Anders. We delivered a solid start to the year and once again showed the strength of our business model in chronic care, significantly outgrowing the market. We continued with the launch of our new male intermittent catheter, LUJAB, which we expect will set a new standard of care in intermittent catheterization, and we kicked off a year of product launches with the launch of Biotin Silicone Fit and Parastine Light, and I look forward to continuing expanding our product offering with This was also the first full quarter with Kerasys where we continued to see strong growth and continued adoption of the FishSkin technology in the U.S. Meanwhile, at the same time, the inflationary pressure we've been experiencing over the last several quarters continues to come down.

And that also means that the people I'm I'm actually expecting first half and second half with the current knowledge to be similar.

Please remember that if we aren't going to have an increase in salaries you January 1st off around double digit in Hungary, and that will have some negative impact, but overall, we are satisfied with the start of the year and I'm still expecting people to live within the guidance of 27 to 28 on the margin.

And Jack to your question on Halo, we have no news to report a whistle basically waiting answers in the next few months from a from the authorities and we still expect a launch in the first half of 'twenty 'twenty four.

That's great thanks very much.

The next question will come from the line of Hasan how Lucky with Barclays. Please go ahead.

Christian Wilhelmsen: Most recently, we've seen a positive development in inflation levels in Hungary, now down to a single-digit level, as well as a positive trend in electricity prices in Hungary. In summary, I feel confident about our long-term growth prospects of 8 to 10 percent and returning to an EBIT margin of 30% by the end of the strategic period, excluding CARIS, and also confident about an EBIT margin of more than 30% in the long term. Finally, before we move to Q&A, I'd like to mention that we will host a Meet the Management event in Denmark on June 6th this year. The event will give you a chance to meet the broader management team and we'll give an update on the business and main strategies. It will also host a dedicated session on kerosene and will be represented by its founder, Ferdinand Sigur Jönsson, and his team. We look forward to meeting many of you in person in June. And with that, thank you very much. Operator, we're now ready.

Hi, Good morning, Thank you for taking my questions I've got two please.

Firstly can you talk a bit more about the order phasing in the U S. In Ostomy care and whether we should expect higher growth in Q2 for motives that didn't make it into Q1.

And and how meaningful they were and then secondly on on China.

If you could talk about the recovery in new patient discharge is here.

And whether you're seeing any improvement in average basket sizes, and I guess your thoughts around the Chinese market for the remainder of the thank you.

Thank you Hassan so yes, there was a bit of a Q1 softness on U S Ostomy care, which is a.

Pretty much down to order phasing by by one of our major distributors I regard this as a business as usual.

Underlying demand a good patient acquisition momentum and I still expect for the U S business to deliver a year with a with high single digit.

Operator: Question. Ladies and gentlemen, at this time we begin the question and answer session. Anyone who wishes to ask a question may press star followed by 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star followed by 2.

Gross.

We are still enjoying I think real benefit from the expansion stuff, we got that we got from <unk>.

The increase in in that.

The G P O axis and the expansion of the sales team.

So that that basically boils down to double digit growth in ostomy care and high single digit growth in chronic care.

Operator: If you are using speaker equipment today, please lift the handset before making your selection. Anyone who has a question may press Starter 1 at this time. The first question comes from the line of Jack Reynolds-Clark with RBC Capital Markets. Please go ahead. Hi there, thank you for taking my questions. I have three, please, two on guidance and then one on HALO.

To your second question on China.

We had a good quarter.

The the graph is mid single digit is so as you can see in the commentary, but the inflow of patients is now double digit and then if I look at the absolute number of patients that are coming into the business.

We're back to where we were pre COVID-19.

I saw it it actually looks a it actually looks quite healthy and a good meaningful activity level. The basket size is still it's still it's still soft so nothing nothing really new to report there and I think like I've said in previous quarters.

Christian Wilhelmsen: So given your commentary at the start of the fiscal year around phasing through the year with H1 kind of expected to be a bit lower than H2, does the strong start in H1 imply that you're expecting kind of a slowdown in Q2 or actually is there a meaningful upside to that 8% organic revenue guide for the full year? Similarly, on margin guidance, obviously, you had your expectations around margining in H1, but the result came in quite strong, so does this kind of leave room for, as I said, an upside for the full year? And on the third question about Halo, could you give us an update on kind of where you are with your conversations with the regulator here? Thank you for watching!

Is just attached to sentiment around around the economy.

Making good progress on the consumer initiatives that we that we have in China. So all told my basic stance on China is still one of optimism.

This this will be the if you will the largest demographic a burden of any country in human history, and there'll be plenty of work for for us to do on the medium and long term, but a good quarter.

Very helpful. If I could just follow up on China, given the first commercial sale of the voice prostheses last month.

How do you see a toss medical in China shaping out over the medium term and what are the next milestones we should be looking out for thank you.

Christian Wilhelmsen: All right. Thanks a lot, Jack, for your questions. Let me start with the guidance and the outlook for the rest of the year. So, as we just said, we are satisfied with the start to the year in Q1. We are on our organic growth track, expecting it, especially in the second half, to accelerate also as a consequence of improvements within our urology business and more impact from the innovation and the launches we are going to do throughout the year. In terms of the margin, yes, we are off to a bit better start than we thought back in November for our first quarter. And that also means that we will, I'm actually expecting the first half and second half with the current knowledge to be similar.

Yeah. So thank.

Thank you for that question of course that the.

The implant of the first voice plus thesis in China was a big milestone both for us, but not least for for Chinese patients. So you should remember that about 2020 plus percent of the new patients worldwide in our inland injected me.

Or in the Chinese market and until now they haven't had access to this technology.

So the real work has begun of training doctors are getting the products registered in accounts by accounts Ah training nurses that also a part of the procedures getting the getting the the cat program around this up and running.

Christian Wilhelmsen: Please remember that we are going to have an increase in salaries here on January 1st. And, Jack, to your question on HALO, we have no news to report. We're still basically waiting answers for the next few months from the authorities. We still expect a launch in the first half of 2025. That's great. Thanks very much.

It's going to be it's going to be a long haul, but it is significant and but of course part of why we believe that a task will continue to grow.

Very strongly also over the medium and long time Hasan. So it's it's it's really good news.

And the key K P. I is a lot more patients into the business and many more hospitals.

With the with the procedures established.

Perfect. Thank you.

Yeah.

Christian Wilhelmsen: The next question comes from the line of Hassan Al-Waqeel with Barclays. Please go ahead. Hi, good morning. Thank you for taking my questions. I've got two, please.

The next question comes from the line of Robert Davies with Morgan Stanley. Please go ahead.

Yes, Thanks for taking my questions. My first one was just if you could touch on the advanced skin care Division unnoticed civil once a few quarters, you've been seeing quite good growth momentum just wanted to drill in a little closer and.

Christian Wilhelmsen: So firstly, can you talk a bit more about the order phasing in the US for ostomy care and whether we should expect higher growth in Q2 from orders that didn't make it into Q1, and how meaningful they were? And then secondly, on China, if you could talk about the recovery in new patient discharges here and whether you're seeing any improvement in average basket sizes, and I guess your thoughts on the Chinese market for the remainder of the year. Thank you. Thank you, Hassan.

See what was sort of underpinning that and then the second question was just on intervention urology.

Which is obviously kind of come down.

Was there anything above and beyond sort of difficult comps from last year, that's worth calling out in an interventional urology or all of a sudden it. Thank you.

Thank you for those two questions. So yes.

Christian Wilhelmsen: So, yes, there was a bit of Q1 softness in U.S. ostomy care, which is pretty much down to order phasing by one of our major distributors. I regard this as business as usual. There's strong underlying demand, good patient acquisition momentum, and I still expect the U.S. business to deliver a year with high single-digit growth. We're still enjoying, I think, real benefit from the expansions that we got from the increase in GPO access and the expansion of the sales team. So that basically boils down to double-digit growth in ostomy care and high single-digit growth in chronic conditions.

Skincare is seeing a good class a there is some impact from COVID-19 for a long time and that the category has basically re rebounding. That's also a better baseline benefit in our in the quarter, but on the whole good momentum.

In the business, we're seeing broad based pick up across our across the regions in the U S.

So I'd say, probably nothing else to remark around your question to skincare, the interventional urology, there's a bit of a baseline in the figures we had a we had a very strong Q1.

Last year, but we are also seeing a bit of softness in Europe, I am expecting that business to accelerate from here over the coming quarters and the IU business to deliver a high single digit growth for for the year. We've got really good momentum in North America, and a number of good activities underway. So so.

Christian Wilhelmsen: To your second question on China, we had a good quarter. The growth is mid-single-digit, as you can see in the commentary, but the inflow of patients is now double-digit. And if I look at the absolute number of patients that are coming into the business... we're back to where we were pre-COVID. So it actually looks quite healthy and is a good, meaningful activity.

We will deliver a good year.

Sorry, maybe just to follow up on that where where in Europe is that a specific country that youre seeing regions or is that just kind of a more broad based phenomenon.

It's a it's a bit broad based I would say.

Pardon.

But it's mostly it's mostly around our single use devices.

Mhm, Okay. Thank you that was all my questions.

The next question is from their only cut the way of Citi. Please go ahead.

Hi, guys. Good morning, Christian Andrew Thanks for taking my questions I have three please.

Christian Wilhelmsen: Basket size is still soft, so there's nothing really new to report there. And I think, like I've said in previous quarters, this is just attached to sentiment around the economy. We're making good progress on the consumer initiatives that we have in China. So all told, my basic stance on China is still one of optimism. This will be, if you will, the largest demographic burden of any country in human history, and there'll be plenty of work for us to do in the medium and long term, but a good quarter. Very helpful.

First one is on terraces at the 35% growth rate in the quarter.

Just curious if there was any phasing or seasonality in here just slightly surprised by the magnitude and I know this is very simple math, but if I look at that number you had given us for September it it doesn't seem like the fourth quarter has seen any sequential quite a strange caris its revenues.

I get it we don't have the baseline I'm extrapolating from a single months, but just love to hear how you feel about the 35%.

Christian Wilhelmsen: If I could just follow up on China, given the first commercial sale of the voice prosthesis last month, how do you see Atos Medical in China shaping out over the medium term, and what are the next milestones we should be looking out for? Yeah, so thank you for that question. Of course, the implant of the first voice prosthesis in China was a big milestone, both for us but not least for Chinese patients.

To the extent that your expectations for the full year or maybe anchoring closer to 30%, 40% that would be helpful to know.

My second question is on a topic of portfolio rationalization can you quantify the headwinds and let US know whether this is something that we should be expecting for the remainder of the year and maybe if you can comment on what exactly is being rationalized that would be super helpful. And then my last question and it's a blue giant big congratulations on lawn.

Christian Wilhelmsen: So you should remember that about 20 percent to 20 plus percent of the new patients worldwide for laryngectomy are in the Chinese market, and until now, they haven't had access to this technology. So the real work has begun of training doctors, getting the products registered in accounts by accounts, training nurses that also are part of the procedures, getting the care program around this up and running. And it's going to be a long haul, but it is significant, but, of course, part of why we believe that ATOS will continue to grow very strongly also over the medium and long term. Hassan. So it's really good news. And the key KPI is bringing a lot more patients into the business and many more hospitals with the procedure established. Perfect, thank you.

In 10 countries.

I would love to get an update on where we are with premium pricing in particular, I guess in the U S, which had been which is potentially a big opportunity for you guys. Thanks, so much.

Thank you Veronica three good questions. The first one on care says we're on plan and the ramp continues so remember here the expansion that we're driving now with this business is.

As a as really adding quite a lot of people and and what happens as we bring them board is of course that they need to be trained they need to get in territory get their arms around the business and the customers.

So that that improves month on month. So my expectation is also as we move through the year that you're going to see.

Some acceleration from where we are now.

I'll just remind you that what we've set for the business as a CAGR.

Christian Wilhelmsen: The next question comes from the line of Robert Davis with Morgan Stanley. Please go ahead. Yes, thanks for taking my questions. My first one was just if you could touch on the advanced skincare division.

That's a footprint.

At us there.

Product rationalization.

I'll say as much as the the the tracheostomy and and let me Jackie businesses are comfortably and high single digit.

So these are we.

We had a a part of the portfolio, which was in niches and low margin.

Christian Wilhelmsen: I noticed over the last few quarters you've been seeing quite good growth momentum. I just wanted to drill in a little closer and see what was sort of underpinning that. And then the second question was just on interventional urology, which has obviously kind of come down. Was there anything above and beyond sort of difficult comps from last year that's worth calling out in interventional urology, or was that it?

Products that we also distributed.

That just didn't make sense to keep in the portfolio you should regard this.

As a temporary impact and I expect the business to be also comfortably.

In the 8% to 10% range that we have guided for for the year Lou just going well.

It is also going well and in the U S and that we've seen price premiums depending on market mid single to high single digit.

Christian Wilhelmsen: Thank you. Thank you for those two questions. So, yes, skin care is seeing good growth. There will be some impact from COVID for a long time, and the category is basically rebounding. There's also a bit of baseline benefit in the quarter, but on the whole, good momentum in the business. We're seeing broad-based pickup across the regions in the U.S. So, I'd probably say nothing else to remark on your question about skin care. The interventional urology, there's a bit of a baseline in the figures.

And I am expecting that this will gradually impact the congress kicked off and allow us to accelerate so so far so good.

Thanks for that question might be just to follow up on that all the loopnet price premium, but have you been able to obtain a separate code in the U S or is the price premium will be coming from your ability to charge a higher price to the distributors.

It is the latter.

Excellent. Thank you guys so much.

Christian Wilhelmsen: We had a very strong Q1 last year, but we are also seeing a bit of softness in Europe. I am expecting the business to accelerate from here over the coming quarters and the IU business to deliver high single-digit growth for the year. We've got really good momentum in North America and a number of good activities underway. So we will deliver a good, And sorry, maybe just to follow up on that, where in Europe is that a specific country that you're seeing regions in, or is that just kind of a more broad-based phenomenon? It's a bit broad, I would say.

The next question comes from the line of Lisa Clive with Bernstein. Please go ahead.

Hi, I just have a question on your Ostomy portfolio I'm really just wanted to know given your.

Wide portfolio across flat contacts campaigns with the come back sometime case coming in at higher price points.

Where are you in terms of getting that have all the patients who could be on those products on them today I'm just trying to understand if there's a mix opportunity here. Obviously it takes time to educate patients get them to trade up.

Yeah on existing patients and then just making sure the right new patients get on them, but would you say that you.

Christian Wilhelmsen: But it's mostly around our single-use. Mm-hmm. Okay. Thank you. That was all my questions.

Have penetrated most of that potential upside or is there still a fair amount to go Oh, that's a that's a lot to go for US a lot to go for it. So you would say concave install small.

Christian Wilhelmsen: The next question is from Veronica Dubejova with Citi. Please go ahead. Hi guys. Good morning. Christian Anders.

Christian Wilhelmsen: Thanks for taking my questions. I have three, please. The first one is on CARES and the 35% growth rate in the quarter. I'm just curious if there was any phasing or seasonality in here. Just slightly surprised by the magnitude. And I know this is very simple math, but if I look at the number you had given us for September, it doesn't seem like the fourth quarter has seen any sequential growth rate in CARES' revenues. I get it.

But both of the products are doing both of those categories are doing extremely well and we.

We're unique with the offering and concave.

And in complex, where we're doing we're doing very well.

It's going to be in my mind, a 10 year run.

On on mix here.

If not more so there there's plenty of work plenty of work to do and then of course. This is also a part of our of our if you look at our performance we are growing.

Significantly above market part of that is also that we have a strong offering in higher value segments.

Okay, and then a somewhat related.

Christian Wilhelmsen: We don't have the baseline, so I'm extrapolating from a single month, but I just would love to hear how you feel about the 35%. And to the extent that your expectations for the full year are maybe anchoring closer to 30% than to 40%, that would be helpful to know. My second question is about ATOS and the portfolio rationalization. Can you quantify the headwind and let us know whether this is something we should be expecting for the remainder of the year? And maybe if you could comment on what exactly is being rationalized, that would be super helpful.

Question on your continent portfolio in the U S has historically just been a really low end market and I know your mix has been probably better than the market, but where are you on kind of approaching full penetration of hydrophilic catheters.

I think that full penetration of hydrophilic, it's going to take a very long time. Unfortunately spot. So I'll just for reference I will sell all I'll say, we we've been doing this work for about 30 years in Europe.

And and reimbursement for hydrophilic catheter is keen from memory, it's probably 13 14 years ago and in the U S.

And back in 2008, and so just shortly after I joined the company.

Christian Wilhelmsen: And then my last question is on MUJA, and big congratulations on launching in 10 countries. Would love to get an update on where we are with premium pricing, in particular, I guess, in the US, which is potentially a big opportunity for you. Thanks so much. Thank you, Veronica.

And.

I would probably a third of the way.

But in volume terms, you still have that very very high number of patients that are still on old technology.

So the if you will the strategic intent of the company.

This entire period has been converting the market to hydrophilic.

And that remains the strategic intent now with loose out of course, we have an even stronger offering them. We've had historically so that conversion will continue but if if if underneath your question. There's a worry that this this opportunity fully penetrated by no means that's a very very long way to go before we have a successor.

When he converted at the U S market.

Okay, that's very clear thank you.

Christian Wilhelmsen: Three good questions. The first one on Kara says, "We're on plan, and the ramp continues." So, remember here that the expansion that we're driving now with this business is really adding quite a lot of people. And what happens as we bring them on board is, of course, that they need to be trained.

The next question is from I'm trying to get them up with J P. Morgan. Please go ahead.

Hi, Good morning, and thank you for taking my question.

I have three tier one is on your cost inflation assumption, Dave lots, you'll remain unchanged and now that you have a bit more visibility can you just talk to where you've seen potential upside or downside.

Christian Wilhelmsen: They need to get on the territory, get their arms around the business and the customers, so that improves month on month. So my expectation is also, as we move through the year, that you're going to see some acceleration from where we are now. I'll just remind you that what we've set for the business is a CAGR. ATOS, the product rationalization, I'll say as much as the tracheostomy and laryngectomy businesses are comfortably in the high single digits. So these are, we had a part of the portfolio that was in niches and low margin products that we also distributed that just didn't make sense to keep in the portfolio.

This potential opportunities.

The comfort level, both Oh, Virginia, and in Texas, and then secondly on the FX impact at the margin level I believe you pointed out to 50 bps.

Did it impact on yet that seems to have remained the same as previous communication just checking if there's an uptick in that given an X number and then lastly can you just share your expectations for pricing for the year. Please.

Yeah. So thanks, a lot for those three questions. So let me start with the first around the cost inflation them and if we look at our the raw materials. So we have set a yeah. When we started the year, we are expecting raw material prices to increase around 5%.

Christian Wilhelmsen: You should regard this, Thank you, as a temporary impact, and I expect the business to also be comfortably in the 8-10% range that we have guided for the year. Luge is going well.

For the year.

And that's still our assumption when data set we are starting to see inflation coming down.

Christian Wilhelmsen: It's also going well in the U.S., and we've seen price premiums, depending on the market, mid-single to high-single digit. And I am expecting that this will gradually impact continence care growth and allow it to expand. So, so far, so good. Thanks for that, Christian.

So the inflation levels in Hungary in the Q1 was around 8% and now the inflation levels forecast for Hungary in 'twenty four is around 5%. So it is starting to come down. So so that's at least a positive and the other one we are following closely that's entity and so the entity.

Christian Wilhelmsen: Maybe just to follow up on that on the LUJA price premium, have you been able to obtain a separate code in the U.S., or is the price premium really coming from your ability to charge a higher price to the distributor? It is the latter. Very quick. Excellent. Thank you guys so much. The next question comes from the land of Lisa Cleaves and Bernstein. Please go ahead.

As you all are aware, we have hitched. It this year, but right now the energy is also coming down to a level of around or lower than 100.

Euros per megawatt so that will also give us some tailwind, especially into next year.

Christian Wilhelmsen: Hi, I just have a question about your ostomy portfolio. Really just wanted to know, given your wide portfolio across flat, convex, and concave, with the convex and concave coming in at higher price points, where are you in terms of getting sort of all the patients who could be on those products on them today? Just trying to understand if there's a mixed opportunity here.

So I would say inflation levels less input cost are becoming.

Turning to look better and I'm starting to be more optimistic.

In terms of that especially into next year.

So so that was the first question the second around our FX assumptions so as.

As I said in the opening remarks, we are expecting a headwind from FX at the full year level of around 50 basis points given the current spot rates so no changes to that.

Christian Wilhelmsen: Obviously, it takes time to educate patients, get them to trade up, you know, on existing patients, and then just make sure the right new patients get on them. But would you say that you have penetrated most of that potential upside, or is there still a fair amount to go? Oh, that's a lot to go. That's a lot to go for. So you would say concave is spelled small.

And then the third question around prices. So we continue to work on increasing our prices and we also doing that in 'twenty three 'twenty four and again, we are looking into a year with a positive price levels.

Liberals are so so that's a positive but not as much as the last year and this is still under the assumption you're not going to see any pick or health care forms. So so so that's that's all of you are short term, but long term I'm still expecting that we will see a price pressure, especially if there are new.

Christian Wilhelmsen: But both of the products are doing, both of those categories are doing extremely well, and we're unique with the offering in concave and in convex. There's going to be, in my mind, a 10-year run on mix here, if not more. So there's plenty of work, plenty of work. And, of course, this is also part of, if you look at our performance, we are growing significantly above the market. Part of that is also that we have a strong offering in higher value. Okay, and then a somewhat related question on your continence portfolio. The US has historically just been a really low-end market. And I know your mix has probably been better than the market, but where are you on the kind of approaching full penetration of hydrophilic catheters? Oh, I think the full penetration of hydrophilic is going to take a very long time, unfortunately.

Care reforms are coming up but right now there is no big ones in the horizon.

Thank you that's very helpful.

The next question is from Christian Ryan we dumped Keybanc. Please go ahead.

That's good morning for taking my questions I have two as well and the first is actually a follow up on the last question on price.

So and that's can you help us with how much of the price increases that you're expecting for this year, you've been able to implement all ready yet in Q1, and what might be the end and how large incremental opportunities you see for the coming quarters.

And specifically whether that is sufficient to offset the.

Christian Wilhelmsen: But just for reference, I'll say we've been doing this work for about 30 years in Europe, and reimbursement for hydrophilic catheters came from memory, it was probably 13, 14 years ago in the U.S., and back in 2008, so just shortly after I joined the company. And we're probably a third of the way there. But in volume terms, you still have a very, very high number of patients that are still on old technology. So the, if you will, the strategic intent of the company for this entire period has been converting the market to hydrophilic. And that remains the strategic intent. Now, with LUJA, of course, we have an even stronger offering than we've had historically, so that conversion will continue. But if, underneath your question, there's a worry that this opportunity is fully penetrated, by no means.

The headwind that you're likely looking into on higher blue collar wages.

Understand it here from Q2.

And then the second question.

Is on you're a U S wound care opportunity.

And the investments that you've made in connection with the new biotech fit.

Whether those salesforce investments off already fully reflected in Q1, and then I'd also be interested in you could if you could talk about the opportunity to say cross leverage at the yeah. The commercial resources that you have a but with terraces for this new product. Thank you.

Oh, I think Christian let me start with the first one around the pricing facing throughout the year. So we had a number of price increases are already here in the first quarter and there will be more coming up especially throughout this quarter.

Christian Wilhelmsen: That's a very, very long way to go before we have successfully converted. And that's very clear. Thank you. The next question is from Angel Verma with J.P. Morgan. Please go ahead. Hi, good morning. Thank you for taking my question. I have three, please.

So that is our current plants and it is a cross them.

Both the Europe, but especially emerging markets and to some extent the U S.

And whether that is going to offset.

The the blue collar and salary increases that that's.

Anders: One is your cost inflation assumptions. They've largely remained unchanged. I'm mad that you have a bit more visibility.

It's not fully going to offset that because of the blue collar inflation levels of salary levels. We're going to have increased from January 1st is around 10%.

Anders: Can you just talk to me about where you've seen potential upside or downside and where the potential opportunities still lie at the cost and optics level, both opportunities and uncertainties? And then, secondly, on the FX impact at the margin level, I believe you pointed out 50 bits of feed that is an impact for the full year. That seems to have remained the same as per your previous communication. Just checking if there's an update to that, given the recent FX move. And then lastly, can you just share your expectations for pricing for the year, please? Yep, so thanks a lot for those three questions. Let me start with the first concern around cost inflation. And if we look at raw materials...

Across our Hungarian the sites.

And to your second question on the biotech silicone fit.

Fifth launch in the U S. So.

So yes question. So this was a this was the launch that we have been waiting for that that we have a competitive portfolio that we know that we can convert our ideas and and the hospitals with.

Most of the investment in sales forces reflected is reflected here in Q1, we continue to run.

The the to a wound care team separately.

So of course, you will see the Kerr says team are they're going to basically recommend a biotech dressings.

To be used in connection with the Fishkill technology not not other dressings.

But the volume is relatively modest and my expectation is also over time that youre going to see that we'll be able to make a combination parts between.

All our foam and adhesive technology and the Fishkin Suskind technology, there are a number of opportunities to do that but for now two separate sales teams.

That's very clear thank you very much.

The next question from Julia Dumont B Jefferies. Please go ahead.

Anders: So we have set, when we started the year, we were expecting raw material prices to increase around 5% for the year. That is still our assumption. After that has been said, we are starting to see inflation coming down. The inflation levels in Hungary in Q1 were around 8%, and now the inflation level forecast for Hungary in 2024 is around 5%. So it is starting to come down, so that's at least positive.

Yes, good morning, gentlemen, thanks for taking my questions I'm left with two at this time.

The first one relates to gross margin, obviously, you've already discussed the cost phasing throughout the year, but you had previously indicated that you were targeting around 68% gross margin for the full year.

Is that the expectations are a little too cautious and do you believe you can do a little more on that side.

And the second one is a more broader question on the stride twenty-five ambition and more particularly to the long term margin objective of going back to 30% plus by the end of the of this strategic period.

Anders: And the other one we are following closely is energy. So energy, as you all are aware, we have hedged this year. But right now, energy is also coming down to a level of around or lower than 100 Euros per megawatt.

Now that the dust has settled around the acquisitions in most markets seems to have stabilized broadly speaking do you have increased confidence in that target for me how much you're seeing in your business in the in the past few months and quarters.

Anders: So that will also give us some tailwind, especially into next year. So I would say inflation levels slash input costs are becoming, or it's starting to look better, and I am starting to be more optimistic in terms of that, especially into next. So that was the first question. The second related to our FX assumptions. So, as I said in the opening remarks, we are expecting a headwind from FX at the full-year level of around 50 basis points, given the current spot rates. So, no changes to that.

Yeah. So let me take your question Julien. So your first question around the gross margin, yes, I am still expecting it to end the year with around 68% and so and that includes benefits from the cares as the acquisition of around to Uh Huh.

On that basis points. So so that's our that's what we are expecting for the full year end.

And in terms of your second question and now we're moving into next year and the following years.

They'll committed excursus two to deliver around 30% into next year and also including cases overtime to deliver on our long term margin guidance and as I sit there just earlier, especially on the input cost we are starting to be come more optimistic when you look at.

Anders: And then the third question around prices. So, we continue to work on increasing prices, and we're also doing that in 2023-2024. And again, we are looking into a year with positive price levels. So, that's positive, but not as much as last year. And this is still under the assumption that we are not going to see any bigger healthcare reform.

Inflation levels, especially in eastern Europe, and also starting to look at the energy levels that also are coming down compared to the levels. We look at for this year, So and we will continue with our.

Anders: So that's our view short term, but long term, I'm still expecting that we will see price pressure, especially if there are new health care reforms coming up, but right now, there are no big ones on the horizon. Thank you, that's very helpful. The next question is from Christian Ryan with Danske Bank. Please go ahead. Yes, good morning for taking my questions. I have two as well.

You can see being prudent on costs and how we allocate our resources. So are you still comfortable that we will deliver on our long term.

Growth and margin guidance.

Thank you.

Yeah.

The next question is from Audi blow with Bank of America. Please go ahead.

Hey, good morning, and thank you for taking my question I have two on the wound care business. So the first one is I'm curious it's been maybe wondering if you could provide a bit of an update on how is the customer feedback and the sales force on the ground and the second one is on the launch of the new product and whether you expect to see any acceleration or.

Anders: The first question is actually a follow-up on the last question on price. So, Anders, can you help us with how much of the price increases that you're expecting for this year you've been able to implement already here in Q1 and how large the incremental opportunities you see for the coming quarters and specifically whether that is sufficient to offset the headwind that you're likely looking into on higher blue-collar wages as I understand it here from Q2. And then the second question is about your U.S. wound care opportunity and the investments that you've made in connection with the new Biotin Fit, whether those Salesforce investments are already fully reflected in Q1, and then I'd also be interested in you if you could talk about the opportunity to cross-leverage the commercial resources that you have with Kerasis for this new product. Thank you.

The meaningful contribution this year. Thank you.

Thank you.

I think the best way to judge our customer feedback as to look at the growth rate.

Our customers are voting.

Well if you if you look at how fast Caris has just moved up the league table in the biologics segment.

It's basically a testament too, but I think two things one is the strength of the technology.

And the clinical relevance of the technology and the other one is the strength of the team.

And so with the growth rates that we have here and the acceleration that that I'm expecting. This this can only happen. If if we do good work on the ground and customers seem to continue to provide that feedback certainly also what I spent some time in the field late last year with our with the carriers as team and.

Anders: All right, Christian, let me start with the first one around the pricing phasing throughout the year. So we have had a number of price increases already this in the first quarter. There will be more coming up, especially throughout this quarter.

And came up came away very very positive about our our field presence and the quality of the people that we have in the field.

When it comes to the new product you shouldn't expect a lot of impact from the bites and silicone fit this year. It is a it's a relatively long sales cycle. When you look at the <unk> in the U S.

Anders: So that is our current plan. And it is across the year, both Europe but especially emerging markets and to some extent, the U.S., and whether that is going to offset the uh... blue-collar uh... salary increases that that's uh... It's not fully going to offset that because the blue-collar inflation levels or salary levels we are going to or have increased by around 10% across our Hungarian sites.

So this will this will be a gradual pick up with the impact starting to be meaningful next year.

Okay. Thank you very much and maybe just a quick follow up on the on their curious as side. You mentioned that you were you know gaining market share anything we could track in terms of Kpis and how and where your expectations are in terms of margin for this year.

Anders: And to your second question on the biotain silicone fit launch in the US. So yes, that was the launch that we had been waiting for, that we have a competitive portfolio that we know that we can convert IDNs and hospitals. So most of the investment in Salesforce is reflected here in Q1. We continue to run the two wound care teams separately.

On on margin.

Sorry, what was your quite short paresis sorry.

Sorry.

I'm in for you curious is could you maybe comment and anything that we could track in terms of market share gains and what you're seeing and if you have any expectations on the margin for care assessing two this year.

Christian Wilhelmsen: So, of course, you will see the Kerasys team is going to basically recommend biotain dressing to be used in connection with the fish skin technology, not other dressings. But the volume is relatively modest. And my expectation is also, over time, that you'll see that we'll be able to make combination products between our foam and adhesive technology and the fish skin technology. There are a number of opportunities to do that. But for now, I have two separate cell phones.

What we are.

We are we guided for 30% CAGR growth for the business, what I'm, saying is that I'm expecting the business. After this quarter.

To accelerate as we as we move through the year and then you should expect at least this margin level.

That we that we posted this quarter at least.

Okay. Thank you.

The next question will come from the line of Matt The S O hook Bloom with hundreds of banking. Please go ahead.

Yeah.

I guess as much.

Christian Wilhelmsen: That's very clear. Thank you very much. The next question is from Julien Dourmois, from Bichapris. Please, go ahead.

Two questions. Please both on carrier space.

So personally I have told them up on a previous question we don't.

Christian Wilhelmsen: Yes, good morning, gentlemen. Thanks for taking my questions. I'm left with two at this time.

Have all the quarterly performance of the basket, but mainly the towards the as we have been sort of guessing the distribution or would you perhaps help us frame expectations into Q2.

Christian Wilhelmsen: The first one relates to gross margin. Obviously, you've already discussed cost savings throughout the year, but you have previously indicated that you were targeting around 68% gross margin for the full year. Is that expectation now a little too cautious? And do you believe you can do a little more on that side?

This is sequentially up or flat in Q2 last year trying to get a better understanding for and as Cincinnati of this rapidly building business and then secondly, when I try to back out the girl small I mean, who cares. This in light of let's say this number you gave us for carriers, just amortizations and opex, including in cares is under 10% EBIT margin.

Anders: And the second one is a more broader question on the Strive25 ambition, and more particularly the long-term margin objective of going back to 30% plus by the end of the strategic period. Now that the dust has settled around the acquisitions and most markets seem to have stabilized, broadly speaking, do you have increased confidence in that target from what you've seen in your business in the past few months and quarters? So, let me take your questions, Julian.

Okay.

Excluding PPA amortization for the quarter I guess, a step up in the loss more than close to 95%. So can you maybe help me understand where in my triangulation I go wrong as you say it carries this gross margin was broadly in line with previous numbers, which I believe is constructed at roughly 90%.

As much.

So since I think.

Thank you my T is I'll I'll say this much that I'm expecting the business to accelerate.

Anders: So your first question concerns gross margin. Yes, I'm still expecting to end the year with around 68 percent, and that includes benefits from the CARES acquisition of around 100 basis points. So that's what we are expecting for the full year.

Against Q1 over the over the over the coming quarters, you should expect that the Oh, we've already seen in terms of contribution to reported growth should expect that to continue.

It's a fast growing business.

There.

I'm not expecting you know that's a big level of up of seasonality I am expecting to basically accelerate against Q1, which is up as a result of the ramp.

Anders: In terms of your second question, and now we're moving into next year and the following years, we have still committed ex-CARESs to deliver around 30 percent into next year, and also including CARESs over time to deliver on our long-term margin guidance. And as I said just earlier, especially on the input cost, we are starting to become more optimistic when you look at the inflation levels, especially in Eastern Europe. And we are also starting to look at the energy levels that are also coming down compared to the levels we are looking at for this year.

That we're doing on the on the frontline.

To your question on gross margin.

So I'll, just say that the where it's up it's a very healthy gross margin and I can also say that it is a bit over 90.

Thank you so much.

The next question is from my Stephanie Pataki with Kepler. Please go ahead.

Yes, thanks for taking my questions I have two please first on China and yeah, good to be back to growth, but do you reiterate your confidence that China is going to return to double digit growth and I was wondering.

Anders: So, we will continue with, you can say, being prudent on costs and how we allocate our resources. So, we are still comfortable that we will deliver on our long-term growth and margin guidance. Very clear, thank you. The next question is from Ariane Boulot with Bank of America. Please go ahead. Good morning, and thank you for taking my question. I have two on the wound care business.

What are the underlying assumptions to that and I understand it's not going to happen overnight, but it is it is it patient growth that you anticipate is going to accelerate or is it that you expect the share of wallets to increase overtime again or is it coming from different businesses. That's my first question and then.

Christian Wilhelmsen: So the first one is on QRISIS, and I was wondering if you could provide a bit of an update on customer feedback and the sales force on the ground. And the second one is on the launch of the new product and whether you expect to see any contribution or any meaningful contribution this year. Thank you. Thank you. I think the best way to judge customer feedback is to look at the growth. Customers are voting. So if you look at how fast Kerasys has moved up the lead table in the biologic segment, it's basically a testament to, I think, two things. One is the strength of the technology and the clinical relevance of the technology, and the other one is the strength of the team.

Second question around do job, it's great to have the feedback that you've provided.

But some of the market but.

Is there anything that you say is different when you approach the medical community with loose yet that there is a faster ramp up or faster to reorder or easier to sell anything that you could provide just to keep up a P. I appreciate it. Thank you.

Okay. Thank you might've, we could spend the entire call just unload job. It's a it's super exciting but to your first question on.

Christian Wilhelmsen: And so, with the growth rates that we have here and the acceleration that I'm expecting, this could only happen if we do good work on the ground and customers seem to continue to provide that feedback. It's certainly also true that I spent some time in the field late last year with the Kerasys team and came away very, very positive about our field presence and the quality of the people that we have in the field. When it comes to the new product, you shouldn't expect a lot of impact from biotin silicone fit this year.

Yeah.

You know it starts with patient inflow.

And and you know.

To me it is a it's a very important and positive data point that the patient inflow is not back to where we were pre COVID-19 that's growing double digits.

Looking at absolute inflow numbers and a distribution of inflow numbers across regions that's healthy.

And then the other component of the equation is it you know if you the ongoing consumption and how.

How consumers.

<unk> spend their money and I think for four four for us to get fully back we need to see an improvement in that sentiment that I'm not seeing yet, but as soon as I as soon as we see it in our actual data.

Christian Wilhelmsen: It's a relatively long sales cycle when you look at IDNs in the U.S., so this will be a gradual pickup with impact starting to be meaningful next year. Okay, thank you very much. And maybe just a quick follow-up on the curious side. You mentioned that you were, you know, gaining market share. Anything we could track in terms of KPIs and how and where your expectations are in terms of margin for this year? Sorry, what was your question about? For kerosene.

We'll we'll we will we'll certainly communicate that to you, but but the first and most important data point here is that the absolute inflows back.

And then I think that the basic optimism I I have four.

For the the China outlook is part demographic part that's just the size of the economy I E.

So everybody is speculating about how fast it's going to come back and.

And how many bumps in the road, they're going to be.

But but but the Chinese economy is is lodged strong and.

I cannot for the life of me imagine that this is going to go on forever.

Christian Wilhelmsen: Sorry. For QRISIS, could you maybe comment on anything that we could track in terms of market share gains and what you're seeing and if you have any expectations on the margin for QRISIS this year? We've got it for 30% CAGR growth for the business. What I'm saying is that I'm expecting the business after this quarter to accelerate as we move through the year, and then you should expect at least this margin level that we posted this quarter. Okay, thank you. The next question comes from the line of Matthias O. Högblom with Handelsbanken.

So on your second question on Lou job.

This is a different launch.

This is a different product.

And if it comes to market with a stronger.

The level of clinical evidence that anything we've ever we've ever come with it comes with a demonstration tools that are highly intuitive.

It comes with a ton of health care professional and consumer testimonials about the product.

And of course, we are we're using the full effect of the model that we built over the last decade, where we're able to engage consumers.

Consumers and clinicians are directly to make everybody aware that there's now a new offering on the table.

Anders: Please go ahead. Thank you so much. Good morning.

And we can also see that in the numbers, we can see that in the consumer channel. We can see it in the number of of calls that we're getting so I'm I am just very optimistic about the the impact of that technology is going to be.

Anders: Two questions, please, both on Kerasys. First of all, following up on our previous questions, we don't have all the quarterly performance for last year, but mainly the full year. So we've been sort of guessing the distribution over the year. So perhaps to help us frame expectations for Q2, was Kerasys sequentially up or flat in Q2 last year? Trying to get a better understanding of any seasonality in this rapidly growing business. And then secondly, when I try to back out the gross margin for Kerasys in light of the sales number you gave us for Kerasys, the amortizations and OPEX, including for Kerasys, and the 10% EBIT margin for Kerasys, excluding PPA amortizations for the quarter, I get a step up in So can you maybe help me understand where I went wrong in my triangulation?

The most important catheter launch in since I think the original speedy cat.

Got a Christmas just maybe quickly a follow up on.

And that would lead you use you know initially you said like well, we're going to target new clients and then we Gotta go for the conversion is it is it that you can converting or did you winning new customers or patients.

Yes, we're winning we're winning a lot of new patients.

Great. Thanks, a lot.

The next question is from Richard Felton would yes. Please go ahead.

Just just one question for me, please and it's a follow up on China, and the dynamics that you're seeing it looks to me say they kind of you've been flagging can see more weakness in that market for a while but could you maybe add a bit more color on what consumer behavior, you're actually seeing is it a case of less frequent changing with bags is that down trading to local players and.

Anders: As you say, Kerasys' gross margin was broadly in line with previous levels, which I believe have been said to be roughly 90%. Thank you so much, uh... so uh... thank you, Matthias... I'll uh... I'll say this much that I'm expecting the business to accelerate against Q1 over the coming quarters. You should expect what we've already seen in terms of contribution to reported growth. You should expect that to continue, because it's a fast-growing business, uh... that there is, I'm not expecting, you know, a high level of seasonality. I am expecting it to basically accelerate against Q1, which is a result of the ramp that we're doing on the front line. To your question on gross margin, I'll just say that it's a very healthy gross margin, and I can also say that it is a bit over 90%. Thank you so much.

Then to the extent that there is some down trading out of your portfolio are those patients that you would expect to move back into and stakeholder philosophy to products when the macro environment doesn't improve.

<unk>.

Thank you get quiet questions basically say, we're seeing all of the above.

So we have seen we have seen consumption patterns.

<unk>, we have seen an element of down trading.

And of course, some of those some of those customers will be able to win back some some will not.

And we're doing a we're doing a lot of work in the consumer channel right now.

Two to more actively participate in that.

Also.

Selling more resources after campaigns and presence in the consumer channel. So we are definitely.

Christian Wilhelmsen: The next question is from Maya Stephanie Pataki with Cabriolet Chevron. Please go ahead. Thanks for taking my questions. I have two, please.

Acting to it when it's going to when it's going to change.

The.

Christian Wilhelmsen: First, on China and growth, but you reiterate your confidence that China is going to return to double-digit growth. And I was wondering... what are the underlying assumptions for that? I understand it's not going to happen overnight, but is it patient growth that you anticipate is going to accelerate, or is it that you expect the share of wallet to increase over time again, or is it coming from different businesses? That's my first question. And then the second question around LUJA, great to have the feedback that you provided from the market, but is there anything that you say is different when you approach the medical community with LUJA, that there is a faster ramp, or faster reorder, or easier to sell? Anything that you could provide us feedback on would be appreciated. Thank you. Thank you, Maya. We could spend the entire call just on Lujab.

The truth is I don't know Oh, and I hesitate to up to two to protect it I want to see it in our in the in the data first.

But the the the two equations for what are the two components in the equation for running a strong ostomy care businesses strong inflow of new patients and of course, a strong element of retention in service in the consumer channel.

Now, we're seeing the new patient data.

Adjusting that we're coming back to where we were pre COVID-19 and of course, we're working hard.

In the consumer channel and.

So close to it that the you know the second that this starts to change our presence is this full on.

Thank you Christian.

The next question is from NESA Granholm lit with Cowen. Please go ahead.

Yeah.

Thank you first question is household Christian.

Housekeeping question.

Could you update us on your expectations for net financial costs for this year.

Second question on your new wound care sales organization in the U S.

Is this an incremental cost for quarter two onwards or has it been in place for several quarters. Thank you.

Christian Wilhelmsen: It's super exciting. But to your first question on... Thank you. You know, it starts with patient interest. And, you know, to me, it is a very important and positive data point that patient inflow is now back to where we were pre-COVID. It's going double digits. I'm looking at absolute inflow numbers and the distribution of inflow numbers across regions.

[laughter].

So thank you for that so on your first question the net financials I'm expecting around 750 million mm.

Million Danish kroner, it's up.

So what we believe to early in the year due to the Argentinian piece with development and then to your second question around our wound care our expansion in the U S.

Christian Wilhelmsen: And then the other component of the equation is ongoing consumption and how consumers spend their money. And I think for us to get fully back, we need to see an improvement in that sentiment that I'm not seeing yet. But as soon as we see it in our actual data, we will certainly communicate that to you. But the first and most important data point here is that the absolute inflow is. And then I think the basic optimism I have for the China outlook is part demographic, part just the size of the economy. I mean, of course, everybody's speculating about how fast it's going to come back and how many bombs from the road there are going to be.

It will be started out investing into the expansion in Q1, but we will start to have the full impact here from the second quarter.

Okay. Thanks for your question, yes. Thank you.

The last question is from Cai von <unk> with UBS. Please go ahead.

Hi, it's actually a grain from UBS just struggling with the <unk>.

Because of technologies like I'm, just two questions from me please with the HR business on the sales growth. There would you be able to maybe give us a bit of a shape of what page Emmys and that's sort of what is accessories in terms of growth.

A second question on the terraces.

Christian Wilhelmsen: But the Chinese economy is large and strong, and I cannot, for the life of me, imagine that this is going to go on forever. So, on your second question about LUJA, This is a different launch. This is a different product, and it comes to market with a stronger level of clinical evidence than anything we've ever come up with. It comes with demonstration tools that are highly intuitive. It comes with a ton of healthcare professional and consumer testimonials about the product.

Can you maybe help sort of shall we obviously talk about the sort of harder wins or share gains with a superior product, but would you be able to give us a bit of a color in terms of the access to the market you have right now.

What space you have in terms of easier way and so whether it's commercial payers or expansion Medicare I mean really good to get a sense of.

Yeah, Hi, once easier just to access that growth over the next a year or two before youre going head to head necessary. Thank you.

Christian Wilhelmsen: And, of course, we are using the full effect of the model that we built over the last decade where we're able to engage consumers and clinicians directly to make everybody aware that there's now a new offering on the table. And we can also see that in the numbers. We can see that in the consumer channel. We can see it in the number of calls that we're getting, so I am just very optimistic about the impact of that technology. It is going to be the most important catheter launch since, I think, the original Speedy. Got it. Christian, just maybe a quick follow-up on that.

So to your first question on on an ethos that we where we are we're not going to break down the source of growth.

The the way we run the business is like we also run the chronic care business that you. The first job is to win the hospital when the patient and hospital make sure that they get on service get on good consumption patterns and over time of course, you work on your work on both.

Volume of patient product mix and retention and all provide meaningful contribution to growth. You also work on the the geographical if you will a country mix to drive growth and.

Christian Wilhelmsen: With Lujia, you know, initially you said like, well, we're going to target new clients, and then we're going to go for the conversion. Is it that you're converting, or are you winning new customers or patients? Yes, we're winning. We're winning a lot of new, great things. Thanks a lot. The next question is from Richard Felton with GS. Please go ahead.

I'll just reiterate that for pulse then injected mean tracheoscopy natus at both businesses are growing healthy at high single digit. This first quarter on the back of a year, where we grew up we grew double digits. So we're very pleased with where it's at to your question on on care assess.

Christian Wilhelmsen: Thanks. Just one question for me, please, and that's a follow-up on China and the dynamics that you're seeing in ostomy. Look, I know you've been flagging consumer weakness in that market for a while, but could you maybe add a bit more color on what consumer behavior you're actually seeing? Is it a case of less frequent changing of bags?

I'm I'm, a little uncertain, what the what exactly what the question was but the but the growth and the composition of growth of course, that's a that's an element of having a good coverage. We continue to work on expanding commercial coverage.

Can get you the exact I can get you the exact number but right now we're from memory, we're covering about 150 million insured lives.

Christian Wilhelmsen: Is there down-trading to local players? And then, to the extent that there is some down-trading out of your portfolio, are those patients that you would expect to move back into the Coloplast suite of products when the macro environment does improve? Thank you. Thank you. Good questions. I'd basically say we're seeing all of the above.

And of course also Medicare Medicare patients, but we are working continuously to expand that number.

Off now is coming from from a commercial frontline expansion also.

And I I want to say that this is a very competitive space.

Christian Wilhelmsen: So we have seen consumption patterns. We have seen an element of down trading, and of course, some of those customers will be able to win back, some we will not. And we're doing a lot of work in the Consumer Channel right now to more actively participate in that, and also, resources after campaigns and presence in the consumer channels. So we are definitely acting on it. When is it going to change? The truth is, I don't know, and I hesitate to predict it. I want to see it in the data.

And that we are taking share directly from the.

The four companies that are still bigger than us in this space and we will continue to do so the ambition is to build a category leader.

And we are investing to do that.

Great. Thank you one quick follow up just on freight rates obviously.

We're all expecting it to be a helping hand this year on margin is there any sort of issue Orion. These red fee impact right now that youre seeing in rates or is it just kind of keep an eye on us.

[noise].

So no you're not expecting any significant impact from that.

Perfect Super Great. Thanks, a lot guys I appreciate it.

Christian Wilhelmsen: But the two equations for, or the two components in the equation for running a strong osteomy care business are a strong inflow of new patients and, of course, a strong element of retention and service in the consumer channel. Now we're seeing new patient data suggesting that we're coming back to where we were pre-COVID, and, of course, we're working hard in the consumer channel and so close to it that, you know, the second that this starts to change, our presence is full-on. Thank you, Chris, and Jim. The next question is from Nils Granholm-Litz with Carnegie. Please go ahead. The first question is a household question, a housekeeping question.

Yeah.

So that concludes today's conference conference calls. Thank you everybody, we hope to see many of you for our meeting in June of course, we will have a chance to talk again after our.

Q2, thank you very much.

Ladies and gentlemen, the conference has now concluded and you may now disconnect your lines.

Thank you for joining me are never Pleasant day Goodbye.

Yeah.

Yeah.

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Anders: Could you update us on your expectations for net financial costs for this year? Second question on your new wound care sales organization in the U.S. Is this an incremental cost for Q2 onwards, or has it been in place for several quarters? So thank you for that, Nils. On your first question, the net financials, I'm expecting around $750 million, or a million Danish Kroner. It's up versus what we believed earlier in the year due to the Argentinian piece of development.

Yes.

Okay.

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Anders: And then to your second question around our Wooncare expansion in the U.S., we started out investing in the expansion in Q1, but we will start to have the full impact here from the second quarter. Okay, thank you. The last question is from Kaiva Dasbande with UBS; please go ahead. Hi, it's actually Graeme from UBS struggling with the basics of technology today. Just two questions from me, please. With the ATOS business and the sales growth there, would you be able to maybe give us a bit of a shape of what HMEs are and then sort of what accessories are in terms of growth? And then a second question on kerases.

And.

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Christian Wilhelmsen: Can you maybe help sort of – we obviously talk about the sort of harder wins of share gains with a superior product, but would you be able to give us a bit of a color of the access to the market you have right now and how much space you have in terms of easier wins? So whether it's commercial payers or expansion in Medicare, it would be really good to get a sense of how much easier it is to access that growth over the next year or two before you're going head-to-head necessarily. Thank you. So, to your first question on ATOS, we're not going to break down the source of growth. The way we run the business is that we also run the chronic care business. The first job is to win the hospital, win the patient in the hospital, make sure that they get on service, get on good consumption patterns, and over time, of course, you work on both volumes of patients, product mix, and retention.

Okay.

Yeah.

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Christian Wilhelmsen: And all provide meaningful contributions to growth. You also work on the geographical, if you will, country mix to drive growth. And I'll just reiterate that for both Leninjectimine, Tracheostomy, and ATOS, both businesses are growing healthy, high single-digit this first quarter on the back of a year where we grew double-digit. So we're very pleased with where it is. To your question on kerosene

[music].

Christian Wilhelmsen: I'm a little uncertain exactly what the question was, but the growth and the composition of growth... Of course, this announcement about having good coverage; we continue to work on expanding commercial coverage. I can get you the exact number. Right now, from memory, we're covering about 150 million insured lives and, of course, also Medicare patients, but we are working continuously to expand that number.

No.

Yeah.

Okay.

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Okay.

Yeah.

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Christian Wilhelmsen: The growth now is coming from commercial front-line expansion, also, and I want to say that this is a very competitive space, and we are taking share directly from the four companies that are still bigger than us in this space, and we will continue to do so. The ambition is to build a category leader, and we are investing to do that. Great. Thank you. One quick follow-up just on freight rates. Obviously, we're all expecting it to be a helping hand this year in the margin.

Okay.

[music].

Christian Wilhelmsen: Is there any sort of issue around the Red Sea impact right now that you're seeing in rates, or is it just kind of keep an eye on, So, no, we are not expecting any significant impacts. Perfect, super clear. Thanks a lot guys, appreciate it. So, that concludes today's conference calls. Thank you, everybody. We hope to see many of you for our meeting in June. Of course, we'll have a chance to talk again after. Q2. Ladies and gentlemen, the conference is now concluded and you may now disconnect your lines. Thank you for joining and have a pleasant day. Goodbye. A-S-S A-S-S A-S-S A-S-S A-S-S A-S-S A-S-S A-S-S, Asterisk A Asterisk B Asterisk C Asterisk D Asterisk E Asterisk F Asterisk F Asterisk C Asterisk D Asterisk F Asterisk G Asterisk K Asterisk F Asterisk Z Asterisk N Asterisk O Asterisk K Asterisk G Asterisk F Asterisk G Asterisk G Asterisk T Asterisk G Asterisk K Asterisk F Asterisk K Asterisk O Asterisk O Asterisk K, Runnismos Travel Guru Contact us.understandpis.com Thank you for watching & please subscribe! A-B-C-D-E-T-E-R-E-D A-B-C-D-E-T-E-R-E-D A-B-C-D-E-T-E-R-E-D A-B-C-D-E-T-E-R-E-D A-B-C-D-E-T-E-R-E-D A-B-C-D-E-T-E-R-E-D

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