Half Year 2024 Coloplast AS Earnings Call

Operator: Ladies and gentlemen, thank you for standing by. Welcome and thank you for joining the Coloplast Interim Financial Statement for the H1-2023-24 conference call. Throughout today's recorded presentation, all parties will be in the listen-only mode.

Ladies and gentlemen, thank you for standing by.

Speaker Change: Welcome and thank you for joining Colo flushed interim financial statements for each one and 2023 24 conference call.

Speaker Change: Today's recorded presentation, all participants will be in the listen only mode. The presentation will be followed by a question and answer session.

Operator: The presentation will be followed by a question and answer session. If you would like to ask a question, you may press the star key followed by 1 on a touchtone telephone. Please press the star key followed by zero for operator assistance.

Speaker Change: I would like to ask a question you May press star followed by one on it that storm telephone.

Speaker Change: Please press the star key followed by zero for operator assistance.

Operator: I would now like to turn the conference over to Kristian Villumsen. President and CEO, please go ahead. Thank you very much, Operator. Good morning, everybody, and welcome to our half-year 23-24 conference call. My name is Kristian Villumsen, I'm the CEO of Coloplast, and I'm joined by our CFO, Annas Lonning-Skogol, and our investors.

Speaker Change: I would now like to turn the conference at a Christian Williamson President and CEO. Please go ahead.

Christian Williamson: Thank you very much operator.

Christian Williamson: Good morning, everybody and welcome to our half year 'twenty three 'twenty four conference calls.

Christian Williamson: My name is Kristen Bell and sudden I'm, the CEO of Cole placid, I'm joined by our CFO on a stunning skull and our Investor relations team.

Kristian Villumsen: So we will start, like we usually do, with a short presentation by Anders and myself, and then we will open up for questions. Please turn to slide 6.

Kristen Bell: Let's start like we usually do with a short presentation by Andrew and myself and then we will open up for questions. Please turn to slide number three.

Kristian Villumsen: We delivered 8% organic growth and a reported EBIT margin before special items of 27% in the second quarter. Return on invested capital after tax and before special items was 15%, reflecting the impact of the acquisition. We continue to broaden the outlook of the market, and more importantly, we continue to help people who live within the health care system. At the same time, we also continue with our year of launch. Today we announced four new launches in our chronic care product line. One of the new products that we're launching is Halo. This is the world's first digital ostomy leakage notification system.

We delivered 8% organic growth in our reported EBIT margin before special items of 27% in the second quarter.

Kristen Bell: If you turn on invested capital after tax and before special items was 15%, reflecting impacts from the acquisition of cashes.

I'm satisfied with our performance.

Kristen Bell: We continue to broadly outgrow the market and more importantly, we continue to help.

Kristen Bell: People, who live within health care needs.

Kristen Bell: At the same time, we also continue with our year of launches.

Kristen Bell: Today, we announced four new launches in all chronic care businesses.

Kristen Bell: One of the new products that we're launching is halo.

Kristen Bell: This is the world's first digital Ostomy leakage notification system and it has now received national reimbursement in the U K.

Kristian Villumsen: It has now received national reimbursement in the UK, as of the 1st of July. And while this is a launch in only one market for now, it confirms the need for innovative and clinically relevant solutions in all categories. This is how we continue to lead our category.

Kristen Bell: As of the first of July.

Kristen Bell: And while this is a launch at only one market for now.

Kristen Bell: Confirms the need for innovative and clinically relevant solutions in all categories.

Kristen Bell: This is how we continue to lead our categories by raising the bar and bringing differentiated technologies to the market.

Kristian Villumsen: By raising the bar and bringing differentiated technologies to the market. Before going into our usual half-year strategic update and the details of today's results, I'd like to provide our thoughts on the proposed local coverage determination policy for skin substitute grafts, published on the 25th of April and is relevant to the new member of the Coloplast Group. Please turn.

Kristen Bell: Before going into our usual have you a strategic update on the details of today's results.

Kristen Bell: I'd like to provide our thoughts on the proposed local coverage determination policy for skin substitute grafts that was published on the 20th of April and is relevant for the newest member of the coal plus group parishes.

Kristen Bell: Please turn to.

Kristen Bell: Slide number four.

Kristian Villumsen: Let me start with the facts. On the 25th of April, seven medical administrative contractors brought forward a draft local coverage determination policy in which two coverage qualifications for skin substitute grafts were introduced. The first qualification relates to a technical requirement, which carries... The second qualification relates to a clinical requirement, which Keresis does not meet, and therefore Keresis is not included in the draft coverage policy. The draft policy covers the Medicare portion of outpatient sales, which includes both physician offices and hospital outpatient departments, and it affects around 20% of carcinogenesis. The majority of the remaining 80% of sales are related to in-hospital sales covered by DRG codes where the reimbursement environment is stable. The process from here is the following.

Let me start with the facts.

Kristen Bell: Well the 27th of April seven medical administer contract has brought forward a draft local coverage determination policy in which to coverage qualifications for skin substitute grafts were introduced.

Kristen Bell: The first qualification relates to a technical requirement, which characters meats.

Kristen Bell: The second qualification relates to a critical requirement, which based on the assessment cashless does not meet and therefore this is not included in the draft coverage policy.

Kristen Bell: The draft policy covers the Medicare portion of outpatient sales, which includes both physician offices and hospital outpatient departments.

Kristen Bell: And it affects around 20% of cashless revenue.

Kristen Bell: The majority of the remaining 80% of sales are related to in hospital sales covered by DRG codes, where the reimbursement environment is stable.

Kristian Villumsen: Until the 8th of June, there will be a consultation period in which affected parties can provide their comments to the draft policy, as is the norm. After the consultation period, there will be a final policy, typically published at least 45 days before implementation. The implementation date has not been announced.

Kristen Bell: The process from here is the following.

Kristen Bell: Until the Ace of June there's a consultation period in which affected parties can provide the comments to the draft policy as is the norm.

Kristen Bell: After the consultation period, there will be a final policy typically published at least 45 days before implementation date.

Kristen Bell: The implementation date has not been announced we expect that it will be up to half a year. After the consultation period ending with a final decision to be published.

Kristian Villumsen: And we expect that it will be up to half a year after the consultation period ends with the final decision being published. My perspective on this draft policy is that this is a quality document that sets out a sensible set of objectives for the category. Sounded, and good clinical practice. It explicitly reviews... Clinical Evidence for every single product in the category as a basis for recommendation to either include or exclude the product from the covered list. The decision to exclude caries from the covered list is rational on the basis of the clinical evidence that is reviewed in the draft policy. And this is important.

Kristen Bell: And implement it.

Speaker Change: My perspective on this draft policy is that this is a quality documents.

Speaker Change: Sets out a sensible set of objectives for the category.

Speaker Change: And good clinical practice.

It explicitly with us.

Speaker Change: Clinical evidence for every single product in the category.

Speaker Change: The basis for our recommendation to either include.

Speaker Change: Or exclude the product from the covered lives.

Speaker Change: The decision to exclude care assist from the cupboard list as rational on the basis of the clinic, but instead is reviewed in the draft policy now.

Speaker Change: No.

Speaker Change: And this is important.

Kristian Villumsen: Clinical evidence on Keresis, which was reviewed in the draft policy, does not include a Randomized Controlled Clinical Study from 2023 by Lent. However, we strongly believe that this study fully satisfied the LCD requirement for quality evidence that demonstrates the product's safety. Effectivity and Positive Clinical Outcomes in the Function as a Graph for Diabetic Patients. The 2023 LANCES study on chronic diabetic foot ulcers is a randomized controlled clinical trial with a sample size of 102 patients, and it provides high quality evidence with a low risk of bias.

Speaker Change: The clinical evidence on care CIS, which was reviewed in the draft policy does not include.

Speaker Change: A randomized control clinical study from 2023 by Lantus.

Speaker Change: We strongly believe that this study fully satisfy the LCD requirement for quality evidence that demonstrates the product safety.

Speaker Change: Effectiveness and positive clinical outcomes and the function of the graft, but diabetic foot ulcers.

Speaker Change: The 2023 Atlanta studying chronic diabetic foot ulcers is a random randomized control clinical trial with a sample size of 102 patients.

Speaker Change: And it provides high quality evidence with a low risk of bias demonstrating.

Kristian Villumsen: Demonstrating the safety, effectiveness, and positive clinical outcomes of the CARIS, Fiske, and Graft compared to standard of care in the treatment of chronic diabetes, the study found significantly higher rates of complete wound closure at 12 weeks with kerosis compared to standard of care. This study also found a Greater Mean Percent Wound Care of Wound Area Reduction at 12 Weeks with Care Assists Compared to Standard. The average number of applications used to achieve closure was 5.9, and the study also had up to one year follow-up. Census Publications

Speaker Change: Demonstrating the safety effectiveness and positive clinical outcomes of the tariffs is for skin grafts compared to standard of care in the treatment of chronic diabetic foot ulcers.

Speaker Change: The study found significantly higher rates of complete wound closure at 12 weeks with care as compared to standard of care.

Speaker Change: You also found a great I mean percent wound care a wound area reduction at 12 weeks with caris as compared to standard of care.

Speaker Change: The average number of applications to use to achieve closure was $5 nine in the study also had up to one year follow up period.

Speaker Change: Since its publication.

Speaker Change: This study.

Kristian Villumsen: [inaudible] has been used to obtain commercial coverage from almost 50 payers, which has resulted in more than $100 million in added liability. Following the announcement of the draft policy, we conducted a review of the studies behind products that were included on the covered list and found that our 2023 study from Lanta is not only on par with, but in many cases also superior to, the clinical evidence that substantiates [inaudible] The process that I described earlier is designed to rectify potential errors. That's why there's a consultation period during which we will submit a 2023 clinical study, which has been omitted from the review. We will submit evidence to the record.

Has been used to obtain commercial coverage from almost 50 payers, which has resulted in more than $100 million added lives in the U S.

Speaker Change: Following the announcement of the draft policy, we have conducted a review of the studies behind products that were included on the covered lives and we found that our 2023 study from Lantus.

Speaker Change: He is not only on par, but in many cases also superior to the clinical evidence that substantiates coverage and the draft policy.

Speaker Change: The process that I described earlier, it's assigned to rectify potential tariffs.

Speaker Change: There's a consultation period during which we will submit a 2023 clinical study, which has been omitted from the radio.

Speaker Change: If things happen.

Speaker Change: We will submit evidence to rectify this.

Kristian Villumsen: Of course, we cannot exclude some level of short-term disruption in the market as a result of the draft policy, but given the feedback that we've received during last week... We feel confident that there won't be a significant impact on our sales in the second half of the financial year, and therefore, we also maintain our financial assumptions on the CARES list. I welcome this introduction of Clinical Qualification for Obtaining Coverage. We perceive this as a positive development which will benefit patients, and we also believe in the process outlined by the authorities as both fair and reasonable.

Speaker Change: Of course, we cannot exclude some level of short term disruption in the market as a result of the draft policy, but given the feedback that we've received during last week from our customers and our field force, we feel confidence that that won't be significant impact on our sales in the second half of the financial year and therefore, we also maintain our financial assumptions on cashless.

Speaker Change: In summary.

Speaker Change: We welcome this introduction of clinical qualification for obtaining coverage we perceive this as a positive development development, which will benefit patients.

Speaker Change: And we also believe in the process outlined by the authorities, both fair and reasonable.

Kristian Villumsen: I strongly believe that we have the right clinical evidence to prove the strength of keratosis fish skin and to get us back on the covered list. Please turn to our half-year strategic update. Please turn to slide number five. First on Gulf.

Speaker Change: And we strongly believe that we have the right clinical evidence to prove the strength of care, such as fishkin and to get us back on the covered lives but that.

Speaker Change: Let's turn to our half year strategic update please turn to slide number five.

Speaker Change: First on calls.

Kristian Villumsen: With our STRIVE25 strategy, we set out to actively pursue M&A opportunities to build growth and value creation options for the mid and long term. The two most significant investments we made, ATOS Medical and Care Assist, are both performing in line with our expectations with a strong future. ATOS Medical has performed consistently in line with our guidance of 8-10% gross and EBITDA margin in the mid-30s level since becoming part of Coloplast Now, almost two years ago.

Speaker Change: With us drives 25 strategy, we set out to actively pursue M&A opportunities to build growth and value creation options for the mid and long term.

Speaker Change: The two most significant investments we made a tough medical and cancer are both performing in line with our expectations with a strong future outlook.

Speaker Change: <unk> medical has performed consistently in line with our guidance of 8% to 10% growth and an EBITDA margin in the mid thirty's level since becoming part of the coal plus group now almost two years ago.

Kristian Villumsen: Integration is also tracking well, and we expect to deliver up to 100 million kroner in operational sanity. In both categories, in which ATOS Medical is present, for injectomy and tracheostomy, significant white space, coupled with a strong commercial model and a strong team, gives us confidence that ATOS Medical will continue to be a good growth contributor and value creator in the long run. The performance of Kerasys in the first six months is in line with our business. This is a strategic fit that's been confirmed. Despite the short-term noise which the draft policy on local coverage determination has created, we remain convinced about the strength and clinical differentiation of FishSkin technology.

Speaker Change: Integration is also tracking well and we expect to deliver up to 100 million Kona in operational synergies.

Speaker Change: In both categories in which a tough medical was present when injected knee and tracheostomy, we see significant white space.

Speaker Change: This coupled with a strong commercial model and a strong team gives us confidence that a toss medical will continue to be.

Speaker Change: A good growth contributor and value creator in the long term.

Speaker Change: The performance of care assist in the first six months is in line with our business case.

Speaker Change: The strategic fit that's been confirmed and despite the short term noise, which the draft local coverage determination policy has created we remain convinced about the strength in clinical differentiation of the fishkin technology.

Kristian Villumsen: With the strong commercial execution from the CARES team, we're confident that the business will continue its strong double-digit growth trajectory and become the category leader in biologics over time. Let's turn to innovation. This is a big year for us, with several significant launches that will support our growth during STRIVE25 but also beyond this. Lugia is a new intermittent catheter with a micro-hole zone technology.

Speaker Change: With the strong commercial execution from the cares his team we're confident that the business will continue its strong double digit growth trajectory.

Speaker Change: The category leader in biologics overtime.

Speaker Change: Next let's turn to innovation.

Speaker Change: This is a big year for us with several significant launches that will support our growth doing strive twenty-five but also beyond this strategic period.

Kristian Villumsen: We're setting a new standard in intermittent catheterization with technology that enables full bladder emptying in one free flow, and it addresses key risk factors related to urinary tract infection. Lugia is now available to mail users in 13 key markets. We've initiated the launch of Lugia for Women with Denmark and Italy as the first launch markets, and other key markets will follow over the next 12 months as we obtain. At Austin McCarrick, we're very pleased with the news on HALO, which, as I mentioned earlier, has been granted national reimbursement in the UK as of the 1st of July at the expected reimbursement.

Speaker Change: With little job.

Speaker Change: New intermittent catheter with a micro holds on technology, we're setting a new standard in intermittent catheter <unk> with a technology that enables full bladder empty and one free flow and it addresses key risk factors related to urinary tract infections.

Speaker Change: <unk> is now available Tamil use us in 13 key markets and here in May.

Speaker Change: We've initiated the launch of Lucia for women with Denmark, and Italy as first launch markets in other key markets will follow over the next 12 months as we obtain reimbursement.

Speaker Change: In Ostomy care, we're very pleased with the news on Halo.

Speaker Change: Which as I mentioned earlier has been granted national reimbursement in the U K as of the first of July at the expected reimbursement level.

Kristian Villumsen: Work to obtain reimbursement in the second focus market, Germany, is ongoing, and we expect to receive a decision from the authorities in the coming months. In May, we also initiated two launches that strengthen our biggest brand in ostomy care, Sensoramil. The first launch represents a significant expansion of the Sensura Mio portfolio with black bag variations that provide more choice for people with a, The second launch is a variant of the Sensura Mu Convex, which strengthens our position in the 2P and convex segments of the Osteocamera.

Speaker Change: Work to obtain reimbursement in the second focus market, Germany is ongoing and we expect to receive a decision from the authorities in the coming months.

Speaker Change: Yeah.

Speaker Change: It may we've also initiated two launches that strengthen our biggest brand in ostomy care since or a meal.

Speaker Change: The first launch represents a significant expansion of the <unk> portfolio with black back variance, which would provide more choice for people with a stomach.

Speaker Change: The second launch is a variant of the sensor them, you'll come backs, which strengthens <unk> position in the two piece and compact segments of the Ostomy care market.

Kristian Villumsen: On sustainability, we continue to make good progress across all our initiatives. I'd like to call out the latest results of our employee engagement survey, where we maintain a solid score of 8.1, ahead of the industry benchmark of 7.8, which I'm. Finally, we're off to a good start with our global operations plan, which is the process to establish a new manufacturing site in Portugal. Currently, the largest site for Coloplast to date is on track, and the site is expected to be operational in 2026.

Speaker Change: On sustainability, we continue to make good progress across all of our initiatives I'd like to call out the latest results of our employee engagement survey, where we maintained a solid school of $8. One ahead of the industry benchmark of seven eight which I'm pleased with.

Speaker Change: Finally, we're off to a good start with our global operations plan six process to establish a new manufacturing site in Portugal, which will be the largest site for coal plus to date is on track and the site is expected to be operational in 'twenty 'twenty six.

Kristian Villumsen: In addition, the procurement program we launched as part of Global Operations Plan 6 is also making good progress and is expected to deliver savings that will support our long-term EBIT margin guidance of more than 30%. Let's take a closer look at today's results. Please turn to slide 16.

Speaker Change: Additionally, the procurement program, we launched as part of the global operations plan. Six is also making good progress and is expected to deliver savings that will support our long term EBIT margin guidance of more than 30% now.

Speaker Change: Let's take a closer look at today's results. Please turn to slide number six.

Kristian Villumsen: In ostomy care, organic growth was 7% for the first six months, and growth in Danish kona was. Q2 Organic growth was 7%, with growth in Danish Kona of 4%. Our Sensura MU portfolio continues to be the main growth driver, followed by the Bravo supporting products, and our Sensura and Sensura Alterna portfolios continue to post solid growth in emerging markets. From a geographical perspective, growth in the quarter was driven by broad-based growth in emerging markets, led by China and Latin America.

In Ostomy care organic growth was 7% for the first six months and growth in Danish kroner was 4%.

Speaker Change: Q2 organic growth was 7% with growth in Danish kroner or 4%.

Speaker Change: Awesome. So Romeo portfolio continues to be the main growth driver followed by the Provost supporting products and all sensor array and the sore alternative portfolios continue to post solid growth in emerging markets.

From a geographical perspective growth in the quarter was driven by broad based golf in emerging markets led by China and Latam.

Kristian Villumsen: Europe also made a good contribution to growth, driven by the UK and Germany. The U.S. had a soft quarter with continued impact from water phasing, but the underlying demand in the U.S. ostomy care market continues to be strong, and we now expect growth in the U.S. ostomy care business to be in the second half. In condensed care, organic growth was 8% for the first six months, and growth in Danish kroner was 5%. In Q2, organic growth was 8%, and growth in Danish kroner was 5%. Wealth in the Quarter was driven by solid momentum in intermittent catheters across the SpeedyCath portfolio, with good contribution from compact, standard, and flexible cast.

Speaker Change: Europe also made a good contribution to growth driven by the U K and Germany.

Speaker Change: The U S had a soft quarter with continued impact from water phasing and the underlying demand in the U S. Ostomy care market continues to be strong and we now expect growth in U S. Ostomy care business to be second half weighted.

Speaker Change: In continence care organic growth was 8% for the first six months and growth in Danish kroner was 5%.

Speaker Change: Q2 organic growth was 8% and growth in Danish kroner was 5%.

Speaker Change: Also in the quarter was driven by solid momentum in intermittent catheter has to cross the speedy cat portfolio.

Speaker Change: Good contribution from compact standard and flexible catheter is looser.

Kristian Villumsen: Lugia, a new male mitten catheter, also contributed to growth in QT. Our bowel care business also made a solid contribution to growth, driven by Peristin Plus. From a geographical perspective, growth was broad-based across regions, led by Europe, in particular the UK and France.

Speaker Change: Just on your mail in a mid and catheter also contributed to growth in Q2.

Speaker Change: Oh, Paul care business also made a solid contribution to growth driven by Paris theme plus in Europe.

Speaker Change: From a geographical perspective growth was broad based across regions led by Europe in particular, the U K and France.

Kristian Villumsen: Markets where reimbursement has recently been established or improved, such as Poland, continue to perform well and grow double-digit. Boys in Respiratory Care posted 10% organic growth for the first six months, with growth in Danish Korner of. In Q2, organic growth was 13%, and growth in Danish corn was 10%. Supported revenue includes a negative impact from product rationalization of 1% in the first six months of the year and 2% next year. Rawls and larygectomy revenue in Q2 was double-digit and 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 PROVOX live support.

Speaker Change: That's where reimbursement has been recently established or improve such as Poland continued to perform well into double digits.

Speaker Change: Well, it's a respiratory care posted 10% organic growth for the first six months with growth in Danish kroner of 8%.

Speaker Change: In Q2 organic growth was 13% and growth in Danish kroner was 10%.

Speaker Change: Reported revenue includes negative impact from product rationalization of 1% in the first six months of the year and 2% in Q2.

Speaker Change: We're often they rejected in Q2 with double digit 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 <unk> life portfolio.

Kristian Villumsen: Growth in tracheostomy in Q2 was also double-digit and driven by continued solid demand and a positive impact from forward integration. From a geographical perspective, all regions contributed to growth, led by Europe as well as saw a contribution from the U.S.

Speaker Change: Ralph and tricky Ostomy in Q2 was also double digit and driven by continued solid demand and positive impact from forward integration.

Speaker Change: From a geographical perspective, all regions contributed to growth led by Europe as well a solid contribution from the U S.

Kristian Villumsen: In advanced wool care, organic growth was 8% for the first six months, and growth in Danish corn was 38%. Q2 Organic Growth was 8%. The Gulf and Danish Corner was 36 miles.

Speaker Change: In advanced wound care organic growth was 8% for the first six months and growth in Danish kroner was 38%.

Speaker Change: Q2 organic growth was 8%.

Speaker Change: And growth in Danish kroner was 36% reported growth for the period includes impact from the acquisition of Kerr says.

Kristian Villumsen: Reported growth for the period includes the impact from the acquisition of... The advanced wound dressings business grew 8% organically in the quarter and also 8% in the first six months. The Biotene Silicone Portfolio is the main growth contributor from a product perspective, while from a geographical perspective, growth was brought about by growth across. Parasys' revenue amounted to 461 million Danish kroner in the first six months and 232 million Danish kroner in Q2. The underlying revenue growth was around 35% in both H1 and Q2. The Inpatient Channel and Surgical Wounds were the main growth contributors.

Speaker Change: The advanced wound dressings business grew 8% organically in the quarter and also 8% in the first six months.

Speaker Change: Biting silicon portfolio was the main growth contributor from a product perspective, while from a geographical perspective growth was broad based across regions.

Speaker Change: Aerospace revenue amounted to 461 million Danish kroner in the first six months of 232 million Danish kroner in Q2.

Speaker Change: The underlying revenue growth was around 35% in both each one and Q2.

Speaker Change: The inpatient channel and surgical wounds were the main growth contributors terraces. Its operating profit margin, excluding PPA amortization was around 10% in both periods.

Kristian Villumsen: Kerasys' operating profit margin excluding PPA amortization was around 10%. In intervention meteorology, organic growth was 5% for the first six months, and growth in Danish corn was 4%. In Q2, both organic growth and reported growth in Danish corn were 5%, both against a high baseline last year. The men's health business in the U.S. was the main growth contributor in the quarter, followed by the endo-urology portfolio, including solid contributions from our first laser equipment, the ethylene fiber laser drive. Women's Health Business Detracted from Growth in the Quarter, impacted by competitive pressure.

Speaker Change: And then interventional urology organic growth was 5% for the first six months and growth in Danish kroner was 4%.

Speaker Change: In Q2, both organic growth and reported growth in Danish kroner was 5%.

Speaker Change: In both periods was against the high baseline last year.

Speaker Change: The men's health business in the U S was the main growth contributor in the quarter.

Speaker Change: Follow up by the Endo urology portfolio, including solid contributions from our first laser equipment, that's truly fiber laser drive.

Speaker Change: The women's health business detracted from growth in the quarter impacted by competitive pressure.

Kristian Villumsen: We expect continued soft momentum in the women's health business and therefore we now expect growth in the interventional urology business to remain at a mid-single-digit level in the second half. From a geographical perspective, the U.S. was the main growth contributor in Q2. It was followed by Europe, most notably.

Speaker Change: We expect continued soft the momentum in the women's health business and therefore, we now expect draw from the interventional urology.

Speaker Change: Business to remain at mid single digit level in the second half of this year.

Speaker Change: From a geographical perspective, the U S was the main contributor in Q2. It was followed by Europe, most notably France with this I'll now hand over to Andrew who will take you through the financials and outlook in more detail. Please turn to slide seven.

Anders Lonning: 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 7. Thank you, Christian, and good morning, everyone.

Andrew: Thank you Christian and good morning, everyone.

Anders Lonning: Reported revenue for the first six months increased by 1 billion Danish Kroner, or 8%, compared to last year. Organic growth contributed 950 million Danish Kroner, or around 8%, to reported revenue. The acquired revenue from Keres' acquisition contributed 461 million Danish Kroner to reported revenue in the first half of the year, reflecting six months' impact. The required revenue contributed around 4% to reported revenue in the first six months. Foreign exchange rates had a negative impact of 341 million Danish Kroner on reported revenue, or around 3%, mainly due to the depreciation of the US dollar and the Argentinian peso against the Danish kroner. Please turn to slide 8.

Andrew: Reported revenue for the first six months increased by 1 billion things qunar or 8% compared to last year.

Andrew: Organic growth contributed 950 million.

Andrew: These corner all around 8% to reported revenue.

Andrew: Acquired revenue from the cares this acquisition contributed with 461 million things corn up to report revenue in the first half of the year.

Andrew: Reflecting six months impact.

Andrew: Quad revenue contribute around 4% to reported revenue the first six months.

Andrew: Foreign exchange rates had a negative impact of 341 billion things on reported revenue or around 3%, mainly due to the depreciation of the U S dollar and the Argentinean peso against the Danish kroner.

Andrew: Please turn to slide eight.

Anders Lonning: Gross profit for the first six months amounted to 9 billion Danish Kroner, corresponding to a gross margin of 68%, against 67% last year. The Gross Margin was positively impacted by the inclusion of Kerosene, which contributed around 100 basis points. In addition, lower freight rates and energy costs, price increases, and a baseline benefit of around 40 basis points from the Italian Payback Reform also had a positive impact on the Gross Margin.

Andrew: Gross profit for the first six months amounted to 9 billion things coma corresponding to a gross margin of 68% against 67% last year.

Andrew: The gross margin was positively impacted by the inclusion of <unk>, which contributed around 100 basis points.

Andrew: This shouldn't lower freight rates and energy cost price increases and the benefit of baseline benefit of around 40 basis points from the tenant payback reform also had a positive impact on the gross margin.

Anders Lonning: The positive development in the above-mentioned factors was partly offset by raw material price increases, double-digit wage inflation in Hungary, and ramped-up costs at our manufacturing sites in Costa Rica. The gross margin also included a negative impact from currencies of around 90 basis points. Operating expenses for the first six months amounted to 5.4 billion Danish Kroner.

Andrew: The positive development in the above mentioned factors was partially offset by raw material price increases double digit rates and tracing in Hungary and ramp up costs at our manufacturing sites in Costa Rica.

Andrew: The gross margin also included a negative impact from currencies of around 90 basis points.

Andrew: Yeah.

Andrew: Operating expenses for the first six months amounted to $5 4 billion Danish kroner.

Anders Lonning: The like-for-like increase in operating expenses, excluding the inorganic impact from kerosene, was 194 million Danish Kroner, or 4% compared to last year. The increase includes the impact from company-wide salary increases as of January 1st. CARES has contributed 447 million Danish Kroner to operating expenses, of which 51 million Danish Kroner were related to the PPA amortization included under distribution costs. The distribution to sales ratio for the first six months was 32%, compared to 31% last year, and includes the impact from caruses and related PPA amortization costs, as well as an increased level of commercial activity. The admin-to-sales ratio for the first six months was 5%, compared to 4% last year.

Andrew: The like for like increase in operating expenses, excluding inorganic impact from cases was 194 million things corner of 4% compared to last year.

Andrew: The increase includes impact from company wide salary increases as of January 1st.

Andrew: <unk> contributed 447 million things corner, so operating expenses of which 51 million things corner, but related to the PPA amortization included under distribution costs.

Andrew: The distribution to sales ratio for the first six months was 32% compared with 31% last year.

Andrew: And includes impact from Kocis and related PPA amortization costs as well as increased level of commercial activities.

Andrew: Yeah.

Andrew: Yeah, that'd be to sales ratio for the first six months was 5% compared to 4% last year.

Anders Lonning: Primarily impacted by the inclusion of carers, the R&D to sales ratio for the first six months was 3% of sales, on par with last year. Overall, this resulted in an increase in operating profit before special items of 5% for the first six months, corresponding to an EBIT margin before special items of 27% compared to 28% last year. The EBIT margin in the first six months included a negative impact of around 100 basis points from the inclusion of kerosene, including PPA amortization costs.

Andrew: Primarily impacted by the inclusion of keratosis.

Andrew: The R&D to sales ratio for the first six months was 3% of sales on par with last year.

Andrew: Overall this resulted in an increase in operating profit.

Andrew: Profit before special items of 5% for the first six months corresponding to an EBIT margin before special items of 27% compared to 28% last year.

Andrew: EBIT margin in the first six months included negative impact of around 100 basis points from the inclusion of characters, including PPA amortization costs.

Anders Lonning: Currencies also had a negative impact on the reported margin of around 110 basis points, mostly related to the depreciation of the US dollar and the Argentine peso against the Danish kroner, as well as an appreciation of the Hungarian Forint against the Danish kroner. Financial items in the first six months were a net expense of 418 million Danish Kroner compared to a net expense of 524 million Danish Kroner last year, driven mostly by interest expenses related to the financing of the ATSOS medical acquisition as well as losses on balance sheet items denominated in mostly Argentinian pesos. The tax expense in the first six months was 697 million Danish Kroner at a tax rate of 22% compared to a tax rate of 21% last year.

Andrew: Currencies also had a negative impact on the reported margin of around 110 basis points, mostly related to the depreciation of the U S dollar and the Argentine peso against the things corner as well as appreciation of the Hungarian forint against the things corner.

Andrew: For me Slide Simpson. The first six months were a net expense of 418 million Danish kroner compared to a net expense of 524 million things corner last year.

Andrew: Driven mostly by interest expenses related to the financing of the Atlas medical acquisition as well as losses on balance sheet items denominated in most of the Argentinian peso.

The tax expense in the first six months was 697 million Danish kroner with a tax rate of 22% compared to a tax rate of 21% last year.

Anders Lonning: As a result, net profit before special items for the first half of the year increased by 8% compared to last year. Diluted earnings per share before special items increased by 2% to 11.08 Danish Kroner and included the impact from the equity raise in August 2014. Please turn to slide 9. Operating cash flow for the first six months was an outflow of 772 million Danish kroner compared to an inflow of 1.2 billion Danish kroner last year.

Andrew: As a result net profit before special items for the first half of the year.

Creased by 8% compared to last year.

Andrew: Earnings per share before special items increased by 2% to 11.08, Danish krone and include impact from the equity raise in August 23.

Andrew: Please turn to slide nine.

Andrew: Operating cash flow for the first six months was an outflow of 772 million Danish kroner compared to an inflow of $1 2 billion things corner last year.

Anders Lonning: The development in cash flows was driven by a higher income tax paid in the second quarter related to the ATSOS medical intellectual property transfer with a negative impact of $2.5 billion. However, the tax payment will be offset by reduced tax payments in the following years, starting from 2023-2024. Tax payment was only partly offset by improvement in changes in working capital and an increase in operating profit of 5%. Cash flow from investing activities was an outflow of 554 million Danish kroner compared to an outflow of 381 million Danish kroner last year.

Andrew: The development in cash flows was driven by higher income tax paid in the second quarter related to the Atlas medical intellectual property transfer with a negative impact of $2 5 billion.

Andrew: Things coma, the tax payment would be offset by reduced tax payments in the following years, starting from 'twenty three 'twenty four.

Andrew: Tax payment was only partly offset by improvement in changes in working capital and an increase in operating profit of 5%.

Andrew: Cash flow from investing activities was an outflow of 554 million million Danish kroner compared to an outflow of 381 million things corner last year.

Anders Lonning: CapEx in the first six months amounted to 4% of sales compared to 5% of sales in the same period last year. As a result, the free cash flow for the first six months was an outflow of 1.3 billion Danish Kroner compared to an inflow of 795 million Danish Kroner last year. Excluding the impact of the extraordinary tax payment of 2.5 billion Danish Kroner, the adjusted free cash flow in the first six months of 2023-2024 was an inflow of 1.2 billion Danish Kroner.

Andrew: Capex in the first six months amounted to 4% of sales compared to 5% of sales in the same period last year.

Andrew: As a result, the free cash flow for the first six months was an outflow of $1 3 billion Danish kroner compared to an inflow of 795 million things corner last year, excluding impact from the extra ordinary tax payment of $2 5 billion things corner. The adjusted free cash flow in the first six months of 'twenty three 'twenty four.

Andrew: It was an inflow of $1 2 billion things corner.

Anders Lonning: The trading 12-month cash conversion was 87%, and networking capital amounted to around 26% of sales, on par with last year. We continue to expect networking capital to be around 25% in 2023-2024 and to return to our long-term expectations of around 24% at the end of the strategic period. Lastly, the Board of Directors approved a half interim dividend of 5 Danish Kroner per share corresponding to a total interim dividend payout of approximately 1.1 billion Danish Kroner.

Andrew: The trailing 12 months cash conversion was 87%.

Andrew: Net working capital amounted to around 26% of sales on par with last year.

Andrew: We continue to expect 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.

Andrew: Lastly, the board of directors approved a half year interim dividend of five things corner per share corresponding to a total interim dividend payout of approximately $1 1 billion things corner.

Anders Lonning: Before we move to the financial guidance, I want to provide an update on the earner for CARES. The earn-out level for CARES has been adjusted to 20% of the total earn-out potential, and the adjustment has been set off against Goodwill. I would like to note, as we did at the time of the acquisition, that the earn-out was based on a very aggressive management growth case. The business is delivering in line with expectations for the Coloplast case, which is included in our financial guidance, and we are satisfied with the progress made so far. Now, let's look at the financial guidance for the year. Please turn to slide 10.

Andrew: Before we move to the financial guidance I want to provide an update on the earn out for keratosis.

Andrew: We're not liver for ketosis has been adjusted to 20% of the total earn out potential.

Andrew: The adjustment has been set off against goodwill.

Andrew: I would like to note as we did at the time of the acquisition that the earn out was based on a very aggressive management growth case.

Andrew: The business is delivering in line with expectations to the quarter past case, which is included in our financial guidance and we are satisfied with the progress made so far.

Andrew: Now, let's look at the financial guidance for the year, Please turn to slide 10.

Anders Lonning: The financial guidance on organic growth and EBIT margin for 2023-2024 is largely unchanged, and most assumptions laid out in November still hold. We continue to expect organic revenue growth of around 8% for the full year, with the following assumptions. Continued good momentum during the year in chronic care for our European and emerging markets businesses. China chronic care is still expected to grow at a mid-single-digit level.

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

Andrew: We continue to expect organic revenue growth of around 8% for the full year with the following assumptions.

Continued good momentum during the year and chronic care for European and emerging market businesses.

Andrew: China chronic care is still expected to grow at a mid single digit level.

Anders Lonning: Growth in the U.S. chronic care business is now expected to be second-half weighted due to auto-purchasing patterns impacting the U.S. ostomy care business in the first half. Advanced Wink is still expected to deliver growth above the mark. Boys in respiratory care is still expected to grow at a level of 8-10%.

Andrew: Growth in the U S. The chronic care business is now expected to be second half weighted due to.

Andrew: Auto purchasing patterns impacting the U S Ostomy care business in the first half.

Andrew: Advanced wound care is still expected to deliver growth above the market.

Andrew: Boston respiratory care is still expected to grow at a level of 8% to 10%.

Anders Lonning: Finally, one change since our guidance in February is our intervention reality business, where we now expect growth in the mid single-digit level from previously high single-digit levels impacted by softer momentum in our women's health business. We are adjusting our reported revenue growth in Danish Kroner to 10-11% from previously around 11% impacted by currency. CARES is still expected to contribute around 4 percentage points to reported revenue growth. We continue to expect a reported EBIT margin before special items of 27-28%, which assumes a gross margin of around 68 percent.

Andrew: Finally, one change since our guidance in February is our interventional urology business.

Andrew: We now expect growth in the mid single digit level from previously high single digit level impacted by softer momentum in our women's health business.

Andrew: We are testing our reported revenue growth in Danish kroner to 10% to 11% from previously around 11% impacted by currencies.

Andrew: I guess this is still expected to contribute around four percentage points to reported revenue growth.

Andrew: We continue to expect the reported EBIT margin before special items of 27% to 28%.

Andrew: Which assumes a gross margin of around 6% to 8% prudent management of operating expenses.

Anders Lonning: Prudent management of operating expenses, a negative impact from currencies of around 100 basis points, including around 100 million Danish Kroner in amortization charges, and finally, a negative impact from currencies of around 50 basis points. For 2023-2024, I still expect around 50 million Danish Kroner in special items related to the ongoing integration of ATSOS Medicare. The net financial expenses for 2023-2024 are still expected to be around minus 750 million Danish Kroner, mostly related to interest expenses related to the ATSOS medical finances.

Andrew: Negative impact from cases of around 100 basis points, including around 100 million things combing, the amortization charges and finally negative impact from currencies of around 50 basis points.

Andrew: For 'twenty three 'twenty four I still expect around 50 million Deniz corning's basically items related to the ongoing integration of Atlas medical.

Andrew: The net financial expenses for 'twenty, three 'twenty four I still expect it to be around minus 750 million Danish kroner, mostly related to interest expenses related to the excess medical financing.

Anders Lonning: I would also like to share that we have secured the refinancing of the two-year bond related to the financing of Athers Medical Acquisition expiring on the 19th of May. The impact of the refinancing is included in net financial expenses, as mentioned earlier.

Andrew: I would also like to share that we have secured the refinancing of the two year bump related to the financing of excess medical acquisition expiring 19th of me the impact of the refinancing is included in the net financial expenses.

Andrew: I mentioned earlier.

Anders Lonning: No changes to our assumptions on the effective tax rate and capital, which is expected to be around 22% and 1.4 billion Danish Kroner with respect. We are off to a good start. We are significantly outgrowing the market in chronic care and in our advanced wound dressings business. Our newest members of the family, ASOS Medical and Caresys, are both delivering double-digit growth. We are continuing our year of launches with the introduction of new products in chronic care, which will support our long-term growth. And we are looking at inflationary pressure across the cost categories coming down. Overall, we are on track to deliver another solid year with organic growth of around 8% and an EBIT margin of 27 to 28%.

Andrew: No changes to our assumptions on effective tax rate and Capex.

Andrew: It is expected to be around 22% and $1 4 billion things corner respectively.

You're off to a good start.

Uh huh.

Andrew: And if it can be outgrowing the market and chronic care and in our advanced wound dressings businesses. Our newest members of the family Atlas Medical and <unk> are both delivering double digit growth.

Andrew: We are continuing our year of launches with the introduction of new products in chronic care, which will support our long term growth.

Andrew: And we are looking at an inflationary pressure across all cost categories coming down would be on track to deliver another solid year with organic growth of around 8% and an EBIT margin of 27% to 28%.

Kristian Villumsen: And I feel confident about our long-term financial guidance, with growth of 8 to 10% and returning to an EBIT margin of 30% by the end of this strategic period, excluding currencies, and an EBIT margin of more than 30% in the long term. Finally, before we move to Q&A, I would like to remind you that we will host and meet the management event here in Denmark on June 6th this year. We look forward to seeing many of you in person in June.

Andrew: I feel confident about our long term financial guidance with growth of 8% to 10% and are returning to an EBIT margin of 30% by the end of this strategic period.

Crude in cases, and then EBIT margin of more than 30% long term.

Andrew: Finally, before we move to Q&A I would like to remind you that'd be hosts and meet the management event. He in Denmark on June six this year.

Speaker Change: Look forward to seeing many of you in person in June thank.

Kristian Villumsen: Thank you very much, Operator. We are now ready to take questions. Thank you. Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone who wishes to ask a question may press star followed by 1 on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star followed by.

Speaker Change: Thank you very much operator, we're now ready to take questions.

Speaker Change: Thank you.

Speaker Change: Ladies and gentlemen at this time, we will begin the question and answer session.

Speaker Change: Anyone who wishes to ask a question you May press star followed by one on the touch tone telephone.

Speaker Change: If you wish to remove yourself from the question queue.

Speaker Change: You May press star followed by two.

Operator: If you are using speaker equipment today, please lift the handset before making your selection. Anyone who has a question may press star followed by 1 at this time. One moment for the first question. The first question is from the line of Anchal Verma from J.P. Morgan. Please go ahead. Hi, good morning.

Speaker Change: If you are using speaker equipment today.

Speaker Change: Lift the handset before making their selections.

Speaker Change: Anyone who has a question you May press star followed by one at this time.

Speaker Change: One moment for the first question please.

Speaker Change: Yeah.

onshore Vermont: The first question is from the line of onshore Vermont from JP Morgan. Please go ahead.

Anchal Verma: I have two questions, please. One on margins. How should we be thinking about phasing for the full year? You've previously indicated that you expect equal phasing between H1 and H2, and that's despite a more H2-weighted top-line growth. So are there any costs in H2 that we should be aware of that would prevent an acceleration in H2 margins? Just want to understand a bit more about

onshore Vermont: Hi, Good morning, I have two questions. Please.

onshore Vermont: One on margins, how should we be thinking about pacing for the full year. You've previously indicated that you expect equal phasing.

onshore Vermont: <unk> and <unk>.

onshore Vermont: Despite a more <unk> topline grills.

Vermont: Are there any costs at HQ that we should be aware of that would prevent an accelerated margin just trying to understand a bit more on phasing.

Kristian Villumsen: And then the second question is on the LCD draft proposal. You mentioned that the 2023 clinical study wasn't included by the MACs. Just want to understand, was there a reason that the MACs didn't consider or omit the study at first instant itself while drafting the proposal?

Vermont: And then the second question is on the LCD Draft proposal.

You mentioned that.

Speaker Change: Thank you Lindsey clinical study wasn't included by the Max just trying to understand was there a reason that the Max didn't consider will remit the study at the fish.

Speaker Change: It sounds like you're asking the proposal.

Anchal Verma: Alright, thanks for your questions. Let me start with the first one around the phasing of our margin. So, as we have said since we started the year, we expect to deliver a full year margin between 27 and 28 percent. We are expecting the facing in the second half to be similar to the first half.

Speaker Change: Alright. Thanks for your question. So let me start with the first one around the facing of our margin and so as we have said since we started the year, we expect to deliver our full year margin between 27 and 28%.

Speaker Change: We are expecting facing.

Speaker Change: Facing in the second half to be similar to the first half.

Kristian Villumsen: I am also optimistic about our input costs, so raw material costs are starting to come down, and I'm expecting that to continue into the second half and specifically into the next. And then I also just would like to call out the effects. We had quite an impact from FX in the first half, and my expectation is that that will ease in the second half, so we for the full year will sit with an impact from FX of around 50 basis points. So I would say those are the two main ones I would call out in the second half.

Speaker Change: I'm also optimistic about our input costs and so our raw material costs are starting to come down and I'm expecting that to continue into second half and specifically into to next year.

Speaker Change: And then I also just would like to call out the FX.

Speaker Change: Quite in quite an impact from FX in the first half and my expectation is that that will ease in the second half. So before the full year will sit with the impact from FX of around 50 basis points. So I would say those are the two main ones.

Speaker Change: Call out into the into the second half our underlying operating expenses I still expect those to develop.

Kristian Villumsen: Our underlying operating expenses, I still expect those to develop at a lower growth rate than the top-line costs. And to your question on the LCD, we don't fully know. We know that the methodology and the document very clearly state what clinical data has been taken into consideration for every single product.

Speaker Change: At a lower growth rate than the topline growth.

Speaker Change: And to your question on the LCD.

We don't fully know we know that the methodology and the document very clearly states what clinical data has been taken into consideration for every single product.

Speaker Change: That's been with you.

Speaker Change: We are speculating that this may have been related to the time of the publication of our clinical data.

Speaker Change: Even the time of the indexing of the related articles in relevant search engine tools that that we simply have not come up in the search that's been done for the people doing the lit with you.

Kristian Villumsen: [inaudible] that we've simply not come up in the search that's been done for the people doing the literature search, but we're speculating. But the most important fact is that we have the clinical evidence to support the efficacy of the technology, and that we're going to submit it during the hearing period. And we will, of course, be present at the hearing. And I'm also very confident that our customers, who are using the product today, will make sure that the LCDs understand. Thank you. The next question is from the line of Jack Reynolds Clark with RBC Capital Markets. Please go ahead. Hi there, thank you for taking the questions. Two for me also, please.

Speaker Change: But we're speculating.

Speaker Change: But the the.

Speaker Change: The most important fact is that we have the clinical evidence.

Speaker Change: To support the efficacy of the technology and that we're going to submit it and in.

Speaker Change: And the a hearing period.

Speaker Change: And we will of course be present at the hearing and I'm also very confident that our customers who are using the product today, we will make sure that the LCD misunderstand. This.

Speaker Change: Terrific. Thank you that's cash.

Speaker Change: Thank you the next.

Speaker Change: Question is from the line of Jack When then Sklar with RBC capital markets. Please go ahead.

Jack Reynolds: The first on continent care, I was just wondering could you run through how you're kind of planning to approach the launch of Luger Women? Are there synergies there with the male version, and how quickly are you kind of expecting meaningful gross contributions there? And then on Halo, again, how are you approaching this launch in the UK? And can you update us on expectation for reimbursement in Germany and any other geographies that you're in discussions about at the moment? Thank you, Jack.

Speaker Change: Hi, guys. Thanks for taking the questions. Two for me also please the first on contents Cat I was wondering could you could you run through how you're kind of planning trying to target.

Jack Reynolds: The launch of new to women.

Jack Reynolds: Kind of other synergies that with minimal version and how quick can you kind of expecting meaningful growth contributions.

Jack Reynolds: And then on highlight them again, how youre approaching this launch in the U K.

Jack Reynolds: And can you update us on expectations for reimbursement in Germany and in any other geographies.

Speaker Change: Got it okay. Thank you.

Kristian Villumsen: Good questions. Remember, the mail version of the product has already been in the market for a good time. The mail segment is about two-thirds of the market.

Speaker Change: Yep. Thank you Jack good questions.

Speaker Change: So on an Lou job.

Speaker Change: Remember the.

Speaker Change: The male version of the product that's already been in market now for a good time.

Speaker Change: Segment is about two thirds of the market.

Kristian Villumsen: So now making the female version available, that's been a natural ask from day one from every customer is, you know, when are we going to have an offering with the same technology for women? And we have that now. I'm expecting that we're going to be rolled out in the main markets over the course of the next roughly 12 months and that we're going to see an equally positive reception. We've got a lot of clinicians excited about this and a lot of patients on the meal product with. The stories of improvement in their daily lives that we are also picking up on and sharing.

Speaker Change: So now making the female version available is.

That's been a natural ask from day, one from every customer to say you know what are we going to have a what are we going to have an offering with the same technology for women in that and we have that now I'm expecting that we're going to be.

Speaker Change: All doubt in the main markets over the course of the next roughly 12 months.

Speaker Change: And that we're going to see an equally positive receptions, we've got a we got a lot of clinicians.

Speaker Change: Excited about this and a lot of a lot of patients on the mill product.

Speaker Change: With.

With this the stories have improvement in <unk>.

Speaker Change: In their daily lives that we are also picking up and sharing.

Kristian Villumsen: The reimbursement goal is to get a premium for the existing product, and so far, so good. We're following the plan just like we did for the mail problem. On Halo, this has been a major milestone for us.

Speaker Change: Reimbursement goal is.

Speaker Change: To get a premium to the existing product and so far so good with following with following the plan just like we've been doing for.

Speaker Change: For the male product on Halo.

Ben: This is Ben.

Ben: Major milestone for us it's been a product that's been underway for a long time.

Kristian Villumsen: It's been a product that's been in development for a long time, and it is quite different than the launch that we have with LUJA in that this is not just new to Coloplast, it's new to the world. There is no such category out there today.

Ben: And it is quite different than the launch that we have with our with looser in that this is not just a neutral coal plus it's new to the world. There is no such.

Ben: Category out there today.

Kristian Villumsen: So we are, in effect, building the segment of the market, and I think that comes with, The focus initially will be engaging with clinicians so that they are familiar with the product, that they're familiar with the patient initiation process, that patients get initiated in a good manner, and we get them rolled on and connected to the service that's related to the product. So this is a slow build over time. So you should not expect that this is a category that quote-unquote explodes from one day to the next, uh... and uh... but it will contribute both to uh... growth in the category and, of course, it'd be a significant value increase. We have received the reimbursement in the UK that we have asked for.

Ben: So we are in effect building this segment of the market and I think that comes with it.

With responsibility that we take this technology to market with a lot of discipline.

Ben: So the focus initially will be.

Ben: Engaging with with clinicians that they are familiar with the product.

Ben: That they are familiar with the Ah.

Patient initiation process.

Ben: Since get initiated.

Ben: And in a in a good manner, we get them rolled on and connected to the service that's related to the product.

Ben: And I'm expecting it to basically have.

Ben: A type of profile that looks like when we also initiated the concave category. So this is this is a slow build overtime.

Ben: So you should not expect that this is a category that quote unquote explodes from one day to the next.

Ben: And but it will contribute both to growth of the category and of course, the significant value upgrade we have received the reimbursement in the U K that we have asked for.

Kristian Villumsen: I can't comment on the absolute level on that until it's public, but it will be on the 1st of July. But I'll just say that we're very satisfied with the results. Now the process with the Germans is still ongoing, and everything has been submitted. So, really, we are not expecting that we are going to have to submit more data. The authorities have gotten everything that they need. We are expecting that we will get a decision from them within the next month. Great, thanks very much.

Ben: I can't comment on the absolute level on that until it's public but it will be first of July.

Ben: But I'll, just say that that where we're satisfied very satisfied with the with this now the process with the Germans are still ongoing.

Ben: And everything that's been submitted so so really we are not expecting that we're going to have to submit more data.

Ben: The authorities have gotten everything that they need I, we are expecting that we would get a decision from them within the next month or two.

Speaker Change: Great. Thanks very much.

Speaker Change: Thank you.

Kristian Villumsen: Thank you. The next question is from the line of Martin Parkhi from SEB; please go ahead. Yes, good morning, Martin Parkhi from LTV2.

Speaker Change: The next question is from the line of Martin Farquhar.

Speaker Change: From Seb. Please go ahead.

Speaker Change: Yeah.

Martin Farquhar: Yes, good morning Mountain biker from.

Martin Parkhi: Maybe the last three questions. Firstly, on the Continent Care franchise, 8% organic growth in the first half. Have you assumed accelerating growth in the second half based on the continued rollout of Lucha? And then, secondly, just to be a little bit prejudicial on the Keresis deal.

Martin Farquhar: Maybe just last week questions firstly on the continent.

Martin Farquhar: Franchise and <unk>.

Martin Farquhar: 8% organic growth in the first half have you assumed.

Martin Farquhar: Accelerating growth in the second half based on the continued rollout.

Speaker Change: And then second question just to be a little bit provocative.

Speaker Change: On the tariffs as you know we have seen a reduction of.

Martin Parkhi: Now we have seen a reduction in the earn out. We have seen the risk in the new draft LCD policy. Have you been a little bit naive with respect to the risk in this business that you have acquired?

Speaker Change: The earn out you have seen the risk on the new draft LCD.

Policy.

Speaker Change: Have you been a little bit with respect to the risk in this.

Speaker Change: Business that you have acquired.

Speaker Change: Acquired and.

Kristian Villumsen: And Anders was very firm on sticking to the long-term targets, but I guess that assumes that you will be able to reverse the draft policy. In case it will not be reversed, how will that impact your long-term targets? Thank you, Martin. Two good questions. We're not guiding specifically for continents in the quarters and second half.

Speaker Change: Honest was worried confirm on speaking to the long term targets, but I guess that assumes that you will be able to reverse the draft policy in case, it will not be reversed how does it impact your long term targets.

Speaker Change: Thank you Martin two two good questions.

Speaker Change: We're not guiding specifically for for comments on the on the quarters and second half I'm expecting the good momentum too.

Kristian Villumsen: I'm expecting the good momentum to continue as the rollout of LUJA takes hold. I'll just reiterate that everything that we're doing in these chronic care categories is a long haul, so to speak, getting the product into the hands of clinicians, and they start to initiate patients on them.

Speaker Change: To continue.

Speaker Change: The rollout of La Lucha takes hold I'll, just reiterate that everything that we're doing in these chronic care categories. There their long haul off so to speak.

Speaker Change: Getting that getting the product into the hands of clinicians and they start to initiate patients on them you've seen.

Speaker Change: Some element of acceleration on continence care.

Speaker Change: I'd say at this stage I'm expecting to get momentum behold.

Kristian Villumsen: You've seen some element of acceleration on continence care, and I'd say at this stage, I'm expecting the good momentum to hold. On Kerasys and the LCD, and whether we're being naive, you know, Martin, I'll just reiterate, 80% of this business is in acute care with very stable reimbursement and very strong performance. Kerasys continues to be, by a significant margin, the fastest growing biologics player out there. Now there's a hiccup in 20% of the business with the LCD coverage.

Speaker Change: <unk>.

Speaker Change: And and the LCD and whether we're being naive.

Speaker Change: No Martin.

Speaker Change: I'll just reiterate 80% of this business is an acute with very stable reimbursement.

Speaker Change: The very strong performance catalyst continues to be by a significant margin the fastest growing biologics player out there.

Speaker Change: Now that's a hiccup on 20% of the business with the with the LCD coverage.

Kristian Villumsen: I am actually feeling quite confident about this, I have to say, with the clinical data that we have that we can present. If you read the document from the Medicare Administrative Contractor, it is, as I said in my opening remarks, a rational document. It's a document that sets out the clinical evidence that has been reviewed for every single product. And the intent is to, if you will, clean up the categories, so it's driven by technology that has clinical evidence. I cannot expect anyone to make decisions based on data that they haven't seen.

Speaker Change: I am.

Speaker Change: Actually feeling.

Speaker Change: Confident about this I have to say with the the way that this the the clinical data that we have that we can push that if.

Speaker Change: If you read the document from the Medicare administrative contract. It is like I said in my opening remarks, it's a rational document.

Speaker Change: It's a document that sets out the clinical evidence.

Speaker Change: That has been reviewed for every single product.

Speaker Change: And the intent is to if you will clean up the categories. So it's driven by technology that has clinical evidence.

I I I cannot expect anyone to make decisions based on data that they havent seen.

Kristian Villumsen: So, the process is structured in a way that you can make your voice heard and you can present the evidence that you have, and of course, we're going to do that. I have full confidence that that is going to work and that the people behind this are making rational decisions after having produced this rational document. In the event that it's not rational, remember that this is just beginning, so we're nowhere near the full build-out of the CARES footprint, so the people that we now have dedicated to work in this part of the market, we have plenty of opportunity to redirect them to places in the market where there is coverage or in the inpatient setting where there is payment, so yes, there's a hiccup. But I don't think we Thank you very much.

Speaker Change: So that the process is structured in a way that you can make your voice heard and you can present. The evidence that you have and of course, we're going to do that I have full confidence.

Speaker Change: That that is going to walk on that the people behind this are making rational decisions.

Speaker Change: Having produced this rational document.

Speaker Change: In the event that it is not rational.

Speaker Change: Remember that this is this is a this is just beginning so we're nowhere near the full build out of our of the cast is footprint. So the the people that we now have dedicated to work in this part of the market, we have plenty of opportunity of redirecting them to places in the market where there is cut.

Speaker Change: Rich.

Speaker Change: Or are in the in patient setting whether there is there is payment.

Speaker Change: So yes, that's a hiccup I don't I don't think we're being naive Martin this is say yep.

Speaker Change: This is a.

Speaker Change: A category that we feel strongly about the technology that we feel strongly about.

Speaker Change: And we're not we're not changing an iota around our conviction.

Speaker Change: Yeah.

Speaker Change: Thank you very much.

Speaker Change: Thank you.

Christian Srup Ryom: Thank you. The next question is from the line of Christian Ryom from Danks Bank. Please go ahead. Yes, good morning. I have two questions as well. The first is on Kerasys, too.

The next question is from the line of Christian <unk> from Danske Bank. Please go ahead.

Kristian Villumsen: So going back to Q1, where you also reported 35% organic growth for the business, I understood that you were expecting growth to pick up or to accelerate from that level later in the year. Is there any change to that expectation, and how might this uncertainty we have around DLCDs impact that? And then the second question is on the Women's Health franchise within Interventional Urology. If you can shed a bit more light on the dynamics that you're seeing there and the outlook, maybe also going into next year, for that franchise. Thank you. Yeah, thank you. Thank you, Christian.

Christian Williamson: Yes, good morning, I have two questions as well.

Christian Williamson: On tariffs as well so.

Christian Williamson: Going back to Q1, where you also reported 35% organic growth for the business I understood that.

Christian Williamson: We're expecting growth to pick up a ultra accelerate from that level later in the year.

Christian Williamson: Any change to that expectation on and how might they say hey, this uncertainty we have around the ocd's a impact that and then the second question is.

Christian Williamson: On.

Christian Williamson: The women's health franchise.

Christian Williamson: Franchise within a intervention urology, if you can shed a bit more light on the dynamics that you're seeing there and and and and the outlook. Maybe also going into next year for that franchise. Thank you.

Kristian Villumsen: Good questions. So Kerasys is at a stage and with a performance that's in line with our case. And so all the work now is around the expansion of Salesforce that's ongoing. And like I've talked to you guys about, it does take some time to onboard new employees and get them up to become effective. Now, the adjustment to the provision is against the very aggressive management case, as we also talked about at the time of the acquisition.

Speaker Change: Thank you. Thank you Christian good questions.

Speaker Change: So that.

Speaker Change: <unk> set a stage.

Speaker Change: And with performance that's in line with our case and so all the work now is around expansion of sales force that's ongoing.

Speaker Change: And like I've talked to you guys about it it does take some time to onboard new employees and get them up to become effective now.

Speaker Change: The adjustment to the provision is against the.

Speaker Change: Very aggressive management case like we also talk to at the time of the acquisition. The coal plus case is still a fully intact, which is also why we're not changing.

Kristian Villumsen: The Coloplast case is still fully intact, which is also why we're not changing what we think is going to be the contribution around the business. I expect continued strong performance in line with plan in the coming quarters, but of course, now with the change in LCD acceleration beyond the plan, I'll be a little careful. We'll see how it plays out over the next quarter, and then we'll probably be smarter about the potential impact in Q3, but we feel very, very good about the outlook for the year.

Speaker Change: What we think is going to be the contribution.

Speaker Change: The business.

Speaker Change: I expect continued strong performance in line with plan and in the coming quarters, but of course now with the.

Speaker Change: With the with the change in LCD acceleration beyond the plan.

Speaker Change: I'll be a little careful we'll see how it plays out over the next quarter and then we'll probably be smarter around the potential.

Speaker Change: Impact in Q3, but we feel very very good about the outlook for the year and like I said to the previous question.

Kristian Villumsen: And like I said to the previous question, should this not pan out in our favor, there is plenty of opportunity to redirect this part of the sales force to parts of the market where there is both payment and coverage. Now to women's health, we had a negative development here in Q2. And so this is really related to the sling portion of the women's health business. You should think of that as it's roughly 50-50, the women's health business divided between meshes and slings.

Speaker Change: Should this not pan out in our favor.

Speaker Change: There is plenty of opportunity to redirect this part of the sales force to that.

Speaker Change: Parts of the market, where there is both payment and coverage now.

Speaker Change: Now.

Speaker Change: To our women's health.

Speaker Change: We are.

Speaker Change: We had the negative development here in Q2.

Speaker Change: And so this is really related to the sling portion of the women's health business. You should you should think of that as it's roughly 50 50, the women's health business divided between meshes and slings.

Kristian Villumsen: And we are seeing a new development in the U.S. where sling procedures are going down, and competitive technology in the market is gaining some share. It's not something that I expect to be resolved in the short term. I will need to see how this plays out, but the bulking agent category is gaining traction at the expense of the slings category. Next here, I'd say it's too early to say, bear in mind that the difference between the SLINGS procedure and the bulking agent procedure is that the SLINGS is a permanent solution, so definitely, there will be clinicians that prefer that, and patients that prefer that, versus a bulking agent solution where you have to come back to the doctor at a certain frequency.

Speaker Change: And we are seeing a new development in the U S that the slings procedures.

Speaker Change: Are going down and they are a competitive technology in the market as its gaining some share.

Speaker Change: It's not something that I expect to be resolved.

Speaker Change: Short term I will need to see how this plays out but.

Speaker Change: But the.

Speaker Change: The bulking agent category is gaining.

Speaker Change: Traction at the expense of the <unk> category.

Speaker Change: Next year of that I'd say too early too early to say bear in mind that the difference between the two.

Speaker Change: The flames procedure and the and the Bulking 80 procedures. The slayings is up it's a permanent solution. So definitely there will be clinicians that prefer that the patients that prefer that versus say bulking agent solution, where you have to come back to the doctor with a certain with a certain frequency, but this will be a topic.

Kristian Villumsen: This will be a topic when we get you here in June, and we'll also be wiser in the coming quarters about how this will play out. For now, we're taking a slightly more cautious stand on the outlook for IU for this year, that it's going to continue to grow at the current level.

When we are when we when we get you.

Speaker Change: Here in June and will be will also be wiser in the coming quarters. How this will play out for now we're taking a slightly more cautious stand on the outlook for you for this year that it's going to continue to grow at the current level.

Speaker Change: Perfect. Thank you that's very clear.

Kristian Villumsen: Thank you. That's very clear. Thank you. The next question is from the line of Maja Stephanie Pataki. From Kepler, please go ahead. Yes, good morning.

Speaker Change: Thank you.

Speaker Change: Next question is from the line of module Stephanie Pataki from Kepler. Please go ahead.

Maja Pataki: Two questions from my side as well, please. Anders, I was wondering if you could quantify a bit when you say that raw material prices have started to come down, whether you could give us a bit of a reference on what you've seen from Q1 going into Q2 and how you think this is going to develop throughout the rest of the year. And then coming back to your commentary about US chronic care and calling out that it's going to be more H2-weighted, have there been any orders that have been shifted, or what makes you confident that momentum is going to accelerate in the second half of the year? Thank you very much.

Maja Pataki: Yes. Good morning, two questions from my side as well placed and I'm. Just I was wondering if you could quantify a bit when you say that raw material prices have started to come down, but you could give us a bit of a reference.

Maja Pataki: What you've seen from the Q1 going into Q2, and how you think this is going to develop throughout the rest of the year and then coming back to your commentary about U S chronic care and calling out that its going to be more H two weighted.

Maja Pataki: Have there been any orders that have been shifted or what makes you confident that momentum is going to accelerate in the second half to you. Thank you very much.

Kristian Villumsen: Yeah, so let me start with the first question, Maja, on raw materials. So, as we have said since we started the year, we are expecting raw materials to increase around mid-single digit at a higher level in Q1 and Q2, and then we'll start... Q3 and Q4. Please also remember there is some time lag that is impacting our inventory, so that is also included. But I'm expecting, as I said earlier, that the raw materials are starting to... So for this full year, I'm still expecting around a mid-single.

Speaker Change: Yeah. So let me start with the the first question my around that the raw materials. So as we have said since our since we started the year we are expecting.

Speaker Change: Raw materials two to increase around mid single digits at a higher level here in Q1, and Q2 and then it will start to ease towards free in Q4.

Speaker Change: Also remember there's some.

Speaker Change: A time lag.

Speaker Change: That is impacting our inventory. So that is also included but I'm expecting as I said earlier that the raw materials are starting to ease a further into Q3 and Q4.

Speaker Change: For the full year I'm still expecting around the mid single digits.

Kristian Villumsen: So that's how I and Maya respond to your question on AFTME U.S. I'm looking at a number of different data points to form a judgment on this. The first is, what does the patient inflow look like, and is it increasing month on month? The answer is yes. I'm looking at volume growth in the acute channel and into home health. What does that look like? And we are growing double-digits in both of those channels. And then, finally, I look at the actual sales.

Speaker Change: So that's that's how I see it.

Speaker Change: And Mike to your question on off the U S.

Speaker Change: What we call out an element of order phasing that's also a bit of inventory reduction.

Speaker Change: And there I'm looking at a number of different data points to form a judgment on this the first is what does the patient inflow look like it does is it increasing month on month.

Speaker Change: Answer is yes.

Speaker Change: I'm looking at what does the volume growth in the acute channel and into home health. What does what does that look like and we are growing double digit in both of those in both of those channels and then finally I look at the actual sales out so the demand reported by distributors that's excellent.

Kristian Villumsen: So the demand reported by distributors of products that they're selling continues at high single-digit growth. Had I been looking at different data, I would have been talking about this differently. But the data points around demand and growth are pointing in this direction. And so I'm convinced that we're going to see high single-digit growth in the second half of the year.

Speaker Change: Parts of the selling that continues at high single digit growth.

Speaker Change: I've been looking at different data would have been talking to this differently, but the.

Speaker Change: The data points around demand and growth are pointing in this direction and so I'm I'm convinced that we're going to see high single digit in the second half.

Speaker Change: Thank you.

Speaker Change: Yeah.

Shubhangi Gupta: Thank you. Thank you. The next question is from the line of Shubhangi Gupta from HSBC. Please go ahead.

Speaker Change: Thank you. The next question is from the line of <unk>.

HSBC: HSBC. Please go ahead.

Kristian Villumsen: Hi, thanks for taking my question. Just follow up on the NCD thing. So according to the draft, the proposed policy statement, most of the clinical trials were conducted for a period of 12 weeks. There have been no studies beyond the 12 weeks, and applications average use was, I guess, four times.

HSBC: Hi, Thanks for taking my question.

HSBC: Just follow up on the NCD thing.

HSBC: According to the graph on the proposed well is your statement most of the clinical trials have been conducted for a period of 12 weeks. There have been no studies beyond 12 weeks and application average use was I guess for <unk>. So could you please comment on carousel.

Shubhangi Gupta: So could you please comment on Keres' product? What is the application, and have you conducted longer-term studies to see the product efficacy and safety? And second, right now, Keres' omega-3 is not covered by this document. So while some of the challenges, the peers' products are, so what do you think differentiates Keres' product from the others that are already covered? And also, right now, you say that 20% of your revenues would be impacted by this.

Speaker Change: Oh, what is the application on have you conducted.

Speaker Change: Longer duration studies.

Speaker Change: See the product I think Casey and safety.

Speaker Change: And second right now get a sense of Omega three is not covered under the documents so like some of the challenges that product.

So what do you think differentiate skepticism product.

Speaker Change: From the others that are already covered.

Speaker Change: And also like you say, 20% of your revenues would be impacted by this third do you expect this Polish the conclusion of this policy.

Shubhangi Gupta: So do you expect the conclusion of this policy would extend to other parts of your business as well? Thank you for the questions. I may need some help just restating the second part of your questions. I'm not sure I got all of that.

Speaker Change: Extend to other like the 80% of your business as well.

Speaker Change: Thank you. Thank you for thank you for the questions I may I may need some help on just restating. The second part of your question. So I'm not sure I got all of that.

Kristian Villumsen: So the review, it's a technical review. So there are some technical reviews, and technical requirements around the product where there's an assessment, and it's quite binary whether you meet them or not. And we meet them. And equally, there is a binary view on clinical evidence. It's not clearly specified exactly what criteria to assess clinical performance are necessary. But when we look at the products that have been included, we look at their study size, we look at their treatment results, and we look at their risk of bias.

Speaker Change: So the review as it's a quiet now.

Speaker Change: Quite it's a technical review so theres some technical reviews.

Speaker Change: Technical requirements around the product, where the that's an assessment and that its quite binary whether you meet them or not.

Speaker Change: And we meet them and equally there is a there is a final review on clinical evidence, it's not clearly specified.

Speaker Change: Exactly.

Speaker Change: Exactly what criteria.

Two to assess clinical performance are necessary, but when we look at the products that have been included we look at their study size. We look at their treatment results, we look at their risk of bias.

Kristian Villumsen: Terasys compares favorably with or to many of them, so it is either on par or better with most of the products that are already on that list. And we also have, of course, a one-year follow-up with the patients that were included in the 2023 study. The risk of spillover from this type of review to the acute setting is zero.

Speaker Change: This compares favorably.

Speaker Change: Or two too many of them so either on par or better with most of the products that are already on that list.

And Uh huh.

We also have of course, a one year follow up on the on the patients that were included in the 2023 and the 2023.

Speaker Change: The study.

Speaker Change: The Ah <unk>.

Speaker Change: The risk of it.

Speaker Change: A spillover from this type of review to the acute setting is zero.

Kristian Villumsen: So this part of the hospital part of the market works on DRG codes, very stable, and so this review here pertains to Medicare and it's the outpatient setting. And like I said earlier, if, contrary to our expectations, we were not included in this, we have opportunities to redirect our resources to parts of the market where there is both coverage and payment. But I am absolutely convinced that, given the process and the document that's been laid out, we have a study that completely fulfills the requirement, and that the evaluators will put us back on the list. There's a process for that, and we participate in that process and look forward to getting the results. Of course, it is. It's unfortunate that we've got a hiccup like this, but things happen.

Speaker Change: So this this this part of the that the hospital part of the market works.

Speaker Change: On D O G codes.

Speaker Change: It's very stable.

Speaker Change: And so this this redo here pertains to Medicare.

Speaker Change: And it's the outpatient setting and like I said earlier.

Speaker Change: If if contrary to our expectations that we were not included on this we have opportunities to redirect our resources to parts of the market, where there is both coverage and payment, but I am absolutely convinced that given the process from the document that's been laid out.

Speaker Change: That we have a study that completely fulfilling the requirement and that evaluate us will put us back on the list that's a process for that and we participate in that process.

Speaker Change: And I look forward to getting to getting the results of course it's.

Speaker Change: It's unfortunate that we've got a hiccup like this but things happen.

Speaker Change: Okay.

Kristian Villumsen: Did I miss a part of your question? Oh, I think I asked that in most of the interviews, so they did. I would say that the median usage we saw was four times and only for a duration of 12 weeks. So what are the corresponding numbers for Kerasys?

Speaker Change: Did I Miss a part of your question.

Speaker Change: Okay.

Speaker Change: Oh, I think I had asked that was true.

Speaker Change: And the reviews.

Speaker Change: They had.

So they took the median usage you saw was four times.

Speaker Change: Only in a duration of 12 weeks. So what are the corresponding numbers will get a sense like I think they have mentioned that if the distributions beyond 12 weeks then.

Shubhangi Gupta: Like I think they have mentioned that if it is to be used beyond 12 weeks, then you have to provide a good rationale. Yeah. Yeah. So I think if you look at the average, the median use of Kerasys products, I would say on the portfolio as a whole and not in the study, it's less than four.

Speaker Change: So you have to provide a good rationally yeah. Yeah. So so I think if you look at the average or the median use of care assist products.

Speaker Change: Say on the portfolio as a whole and not in the study. It is a it's a it's less than four.

Kristian Villumsen: If you look at the study, it's 5.9, but the language of the policy, if you read that carefully, the language of the policy around the four applications basically says that if you're not seeing progress after the four applications, you should stop. I mean, who could disagree with that? If you're doing a treatment and the technology is not showing progress, you should stop; that's not a good use of taxpayer money. The key thing and the key language of the document is that this is a clinical evaluation. So if there's a clinical need, of course, you should continue treatment.

Speaker Change: If you look at the study it's five nine but the language of the policy you read that carefully the language of the policy around before applications basically says that if you are not seeing progress after the four applications you should stop.

Speaker Change: Oh, who could disagree with that but if youre, if youre doing a treatment and the technology is not showing progress.

Speaker Change: Stop that's not a good use of taxpayer money.

Speaker Change: The key the key.

Speaker Change: The key thing and the key language of the document is that that this is a clinical evaluation say if there's a clinical need of course, you should continued treatment and by the way. This is not part of the evaluation to be part of the of the inclusion or to be part of the bumped up the coverage.

Kristian Villumsen: And by the way, this is not part of the evaluation to be part of the inclusion or to be part of the coverage. I hope that clarifies things. Next question, please. Thank you. The next question is from Martin Brenoe from Nordea. Please go ahead. I thank you very much for taking my questions. I have two, if I may. The first one is, surprise, surprise, also on caresses.

Speaker Change: I hope that clarifies next question please.

Speaker Change: Thank you. The next question is from the line of Martin <unk> from Nordea. Please go ahead.

Martin Farquhar: Alright. Thank you very much for taking my question. So I have two if I may the first one is surprise surprise also on the <unk>.

Martin Brenoe: The first question would be if you are getting any feedback from any medical doctors or your salespeople as to whether this is already having an impact on the perception of caresses out there. That would be the first question. Thank you. The answer is that both the field force and clinicians are confident that the product will be reinstated. I was at Yuma last week in London and had a chance to engage with a lot of customers and key opinion leaders, a lot of people using the product day to day and are confident that with the clinical study that we have, we are going to get back on. Our field force is also confident.

Martin Farquhar: The first question.

Martin Farquhar: It would be if you are getting any feedback from any medical doctors Oh.

Martin Farquhar: Your salespeople wherever this is already having an impact of the perception of course this out there.

Martin Farquhar: That would be the first question. Thank you.

Martin Farquhar: So.

Martin Farquhar: The answer is that both field force that clinicians are confident that the product will be reinstated outside Uma last week.

Martin Farquhar: In in London, and had a chance to engage with a with a lot of customers.

Martin Farquhar: And key opinion leaders a lot of people using the product a day to day and.

Martin Farquhar: And I'm confident that with the clinical study that we have that we're going to get back on our field forces also confident.

Kristian Villumsen: Okay, thank you Christian. Just a quick follow up on that. I guess that there is a little bit up for discussion, so it sounds like you have your argument straight, but I guess that when we see these regulations coming down, a part of it is also potentially that the regulators are looking at price versus outcome. So is there a scenario where you might be accepted, but you need to do something about the price that you have, which is significantly higher than the standard of care?

Speaker Change: Okay. Thank you. Thank you Kristen just a quick follow up on it.

Speaker Change: I guess that there is a little bit up to discussion. So so it sounds like you've got your argument straight, but I guess that when we see these.

Speaker Change: Relations coming down part of it it's also potentially that that debt.

Speaker Change: The regulators are looking at price versus outcome. So is there a scenario where you might be accepted but you need to do something about the price that you have which are significantly higher than the spend out of category.

Martin Brenoe: Well, look at the products that are already approved. So I think that that's the data point that you need to look at. And if you look at our pricing compared to the products that are already approved, we're in the middle of the road. So that's not my concern. This, to me, is a process thing.

Speaker Change: Well look at the products that are already approved.

Speaker Change: So I think that that's the data point that you need to look at and if you look at our pricing compared to the products that are already approved were middle of the road.

Speaker Change: So so that that's not that's not my concern to me.

Speaker Change: This to me is a process thing.

Kristian Villumsen: So if you read the policy document, it really is a good document. The people who made it have thought about it. And they walk through, product by product, whether they're included or excluded and the evidence that they look at to form a judgment. And so if you exclude the most important study that we have around diabetic foot ulcers, of course, I can't expect the people who are forming judgments to reach a conclusion that takes that data into consideration.

Speaker Change: So the if you read the if you read the policy document. It's it really is like a document.

Speaker Change: The people who made it have thought about it.

Speaker Change: And they walked through analytically product by product or whether they are included or excluded and the evidence that they look at the form judgments.

Speaker Change: And so if you exclude the most important study that we have around diabetic foot ulcers of course, I can't expect the people who are forming judgment.

Two you know that.

Speaker Change: Two to reach a conclusion that takes that into consideration we have to put it in front of them.

Martin Brenoe: We have to put it in front of them, so I'm not concerned about the pricing question. Okay, thank you, Christian. Just a quick follow-up to Anders. This earn-out write-down, does that have any impact on the P&L? No, it does not have any impact on the P&L.

Speaker Change: So I'm not I'm not concerned about the the pricing question Martin.

Martin Farquhar: Okay. Thank you Kristen just a quick follow up does this earn out write down does that have any impact on the P&L.

Anders Lonning: It's only... Unknown Speaker 1. Any impact on the balance sheet? Okay, thank you. Thank you very much for taking my question, both of you guys. Thank you. Thank you. The next question is from the line of Marianne Bulot. Bank of America, please go ahead. Thank you very much. Good morning.

No. It does not have any impact on the P&L, it's only it.

Kristen Bell: And impact on the balance sheet, it's against the goodwill.

Speaker Change: Okay. Thank you. Thank you very much for taking my questions. A few guys. Thank you.

Speaker Change: Thank you. The next question is from the line of Marion bullet.

With Bank of America. Please go ahead.

Marion Bullet: Okay. Thank you very much good morning, just a quick question on the on live chat and if he Merrill Lynch and do you expect as well to get a premium pricing as you did for the male version and are we going to see any pricing benefits from the male version coming into into H. Two thank you.

Marianne Bulot: Do you expect as well to get a premium price as you did for the male version? And are we going to see any pricing benefits from the male version coming into H2? Thank you. So, as we've said previously, depending on the market, for the male version, some markets are low, some markets are mid, and some markets are high single digits, depending on the market and, of course, the local pricing situation. And I'll say the same thing for females, but probably more of a wait to mid single digit.

Speaker Change: So I.

Speaker Change: I think we've said previously depending on market.

Speaker Change: For for the male version some market slow some some markets met some markets high single digits.

Speaker Change: Depending on market and of course, the local pricing situation and I'll say the same thing for four four female but probably more of a wait to mid single digits.

Kristian Villumsen: And to your question on whether you're going to see the pricing benefit in the second half, we're really not guiding down to that level. This is all part of driving a common care category with good momentum. We've got good momentum now. You should expect that momentum.

Speaker Change: And to your question on whether you're going to see the pricing benefit in the second half, we're really not guiding down down to that level.

It's all part of driving.

E Commerce care category with good momentum we've got good momentum now you should expect that momentum to continue.

Speaker Change: Thank you.

Kristian Villumsen: Thank you. The next question is from the line of Veronika Dubajova, Pitt City. Please go ahead. Hi, guys. Good morning, and thank you for taking my questions. Apologies, I'm also going to start off with Carissa's. Just kind of a bigger picture question for you, Christian.

Speaker Change: The next question is from the line of Veronica <unk> with Citi. Please go ahead.

Veronica: Hi, guys. Good morning, and thank you for taking my questions I apologize.

Veronica: Fair enough Mike Harrison.

Veronica: Kind of a bigger picture question for you question, obviously, I think you'll see think associated or proposals from CMS that they have concerns longer term about the value of these products offering.

Veronika Dubajova: Obviously, you know, I think the LCC decision or proposal is a huge signal from CMS that, you know, they have concerns in the longer term about the value these products offer. And sort of a provocative question; an apology has been asked, but I want to ask it very directly. Look, even if you get on the list, how do you assess the risk that the longer-term growth potential of this market is just substantially impaired? Because I think part of the value proposition here was one, you'll get to play in the market, but two, also that the market would continue to grow. And I'm just wondering about that.

Speaker Change: Provocative question and apologies if it's been asked but I wanted to ask it very directly.

Speaker Change: Look even if you get on the ladder, how do you assess the risk that the longer term growth potential of this market. It's just substantially impaired because that is part of the value proposition here with one year, you'll get to play in the market to also that the market would continue to grow.

I'm just.

Kristian Villumsen: So that's kind of my first question. I'll let you answer that, and then I have a follow-up after that. But maybe you should start off there.

Speaker Change: Wondering it.

Speaker Change: So that's kind of my first question I'll, let you answer that.

Speaker Change: But maybe you could start off there.

Veronika Dubajova: So, I'll start with a blood observation. The technology works, Veronika. It really works, and I wish you guys would come to some of the customer events that we hold and see the patient's story. This works, and it delivers really, really amazing results.

Speaker Change: Yeah, So I'll start with the blood observation.

Speaker Change: The technology works Veronica.

Speaker Change: It really works.

Speaker Change: And and you know I I wish I wish you guys would come to some of the some of the customer events that we hold and see the see the patient stories.

Speaker Change: This works and it delivers no really really amazing results and when I when I read the policy document.

Kristian Villumsen: When I read the policy document... I am reading a document from people who think rationally about what they want to achieve. They want to put their money, the taxpayers' money, against technology that works. I mean, how can you? I would do the same thing if I were writing that document.

Speaker Change: I am I am reading a document from people who think rationally.

Speaker Change: About what they want to achieve they want a they want to put their money the taxpayer money against technology that works.

Speaker Change: I mean, how can you I would I would do the same thing.

Speaker Change: If I was right in that document.

Kristian Villumsen: So, [inaudible] is the importance of clinical evidence, the importance of running a super professional organization, the importance of investing in market access and government affairs and all that. But at the core, this is about whether the technology works, and that's also what the document says. We're willing to spend money on technology that works and has clinical evidence, and, of course, we're going to prove that. Now, having said that, remember, Veronika, 80% of what we're doing is in acute. www.youtube.com.au The opinions rendered herein are those of the guests and not necessarily those of Douglas Goldstein, Profile Investment Services, Ltd., or Israel National News.

So.

Speaker Change:

Speaker Change: Uh huh.

Speaker Change: You know these things happen, but but I think what it demonstrates.

Speaker Change: Is the importance of clinical evidence.

Speaker Change: Important of running a super professional organization.

Speaker Change: Importance of investing in and market access and government affairs, and all that but at the core.

Speaker Change: This is about whether the technology works and that's also what the document says we're willing to spend money on technology that works and has clinical evidence and of course, we're going we're going to prove that now.

Speaker Change: Having said that the remember Veronica 80% of what we're doing is in acute.

Speaker Change: About 80% of what we're doing as an acute in it and it's growing and and so this is just this is just.

Speaker Change: A portion of the market in the in patient portion of the market. It is paid through DRG codes and I am optimistic and the reason we made this acquisition with just started with a really raw and in depth assessment on whether this works it works and from there everything else flows so I would be.

Kristian Villumsen: And from there, everything else flows from there. So I would be way more concerned about this if we had a process where I didn't have a team that had produced good clinical work and clinical results to submit. But that's not the case.

Speaker Change: Way more concerned about this if we had had a process where I didn't have a team that had produced a good clinical work and clinical clinical results to submit but that's not the case that's not the case.

Kristian Villumsen: The CEO is optimistic about the category and about the technology, but, of course, there are going to be bumps in the road. Here's a bump in the road we're dealing with. Okay. Okay. Thank you. And, um, fine.

Speaker Change: So yes.

Speaker Change: At least the C O us optimistic about about the about the category.

And about the technology, but of course, that's going to be bumps in the road here as a bump in the road with dealing with it.

Okay. Okay. Thank you.

Speaker Change: Hum.

Veronika Dubajova: That's helpful. So I guess if I summarize it, your view is that the longer-term growth potential of this market is really not altered, even if this LCD goes ahead as it's proposed. No, I think maybe even the opposite, Veronika, that what's going to happen as a result of this is all the smaller players that have gone into the category without the clinical work and without the evidence will be thrown out. And as taxpayers, we should welcome that, certainly, as a company preoccupied with doing real innovation, we certainly welcome that.

Speaker Change: Fine. That's that's helpful. So I guess, if I summarize what your view is the longer term growth potential of this market is really not altered E. They missed the south BP goes ahead as its proposed.

Speaker Change: I think maybe even the opposite Veronica.

Speaker Change: What's going to happen as a result of this is all of the smaller players that have gone into the category without the clinical work and with without the evidence will be thrown out.

Speaker Change: And and that U S taxpayers, we should walk on that certainly.

Speaker Change: As a company are preoccupied with doing a real innovation, we certainly welcome that.

Veronika Dubajova: Okay, okay, that's helpful. And then, apologies, my second question is just on Halo. And I might have missed this in your prepared remarks since I was late to the call. But I'm just curious where you are in Germany and your degree of confidence that you can obtain coverage there as well as in the UK.

Speaker Change: Okay. Okay. That's helpful. I didn't apologies my second question is just on Halo and I might have missed it in your prepared remarks I was late to the call.

Speaker Change: I'm, just curious where you are in Germany, and your degree of confidence that you can obtain coverage there as well as in the U K and maybe I don't know if you're able to share that the financial impact of the coverage that you have gotten in the UK for you in terms of how much revenue did that add.

Kristian Villumsen: And maybe I don't know if you're able to share the financial impact of the coverage that you have gotten in the UK for you in terms of how much revenue it is adding per user per day. Thank you. So I can't talk about the actual reimbursement level in the UK; we basically received what we asked for, Veronika, and this will be public information come July 1, but we've been asked not to comment on it prior to the actual go-live date.

Speaker Change: <unk> per user per day. Thank you.

Speaker Change: So I can't talk to the.

The actual reimbursement level and the U K, we basically received what we are what we asked for a Veronica.

Speaker Change: And this will be public information come July one, but we've been asked to not comment on it prior to the actual go live date. It does represent a substantial value upgrade opportunity.

Kristian Villumsen: It does represent a substantial value upgrade opportunity. But you need to think of it as... how we've worked with the concave category. It will be a segment of the market that we develop, and we will be very disciplined about how we go to market. This is not something that we're going to throw on a million people day one.

Speaker Change: But you need to think of it.

Speaker Change: You need to think of it as a.

Speaker Change: How we how we've worked with the concave a category it will be a segment of the market that we develop.

Speaker Change: And we will be very well, we will be very disciplined about how we go to market. This is not something that we're going to.

Kristian Villumsen: We will work with clinicians so they understand how the product works, they understand the value of the product, and they understand how to initiate patients. So it's going to be a gradual build. Now to your question on Germany, of course, having external endorsement in the UK makes me more optimistic that the Germans will come to the same conclusion, but in the end, I need to see the decision. It should be just around the corner. Excellent! That was it for me.

Speaker Change: That we're going to throw on a million people day, one we will work with clinicians that they understand how the product works they understand the value of the product they understand how to initiate patients. So it's going to be a gradual build now to your question on Germany.

Speaker Change: Of course, having having external endorsement in the U K. It makes me more optimistic.

Speaker Change: That the Germans will come to the come to the same judgment, but and then.

Speaker Change: Uh huh.

Speaker Change: Need to see the decision and it should be just around the corner.

Speaker Change: Excellent that was it for me thanks, guys.

Speaker Change: Thanks Rocco.

Kristian Villumsen: Thanks, guys. Thanks, Ron. Thank you. The next question is from the line of Graham from UBS. Please go ahead.

Speaker Change: Thank you. The next question is from the line of from.

UBS: UBS. Please go ahead.

UBS: Yeah.

Graham Doyle: Morning guys, thanks a lot for taking my questions. Just one on Wound and then one follow-up on Halo as well. In terms of the document, as Christian you obviously described it as a very rationally laid out document, one of the potentially irrational things is that you've had the removal of a lot of products as it stands today. Would you be able to give us any context as to... What sort of pressure this might put on the market in terms of the availability of actual product if the rules were to go in place across the market, and I suppose alongside that, the feedback you're getting from physicians.

Good morning, guys. Thanks, a lot for taking my questions. Just one on wound and then one follow up on Halo as well in terms of the document just Chris you obviously described.

Speaker Change: <unk> laid out documents.

UBS: One of the potentially irrational things is you have the removal of a lot of products as it stands today I have you would you be able to give us any context as to what sort of pressure this might put on the market in terms of the availability of actual products.

UBS: Rules, which go in place across the markets and I suppose long side that the feedback youre getting from physicians because to your point earlier, if these products probably do work on and certainly there's no physical data there to justify that and then secondly, just on halo and what sort of central cost in it.

Graham Doyle: To your point earlier, these products probably do work, and certainly there's enough clinical data out there to justify that. And then, secondly, just on Halo, what sort of central cost and central functions should we be thinking about for this product to work, and when we think about launches, what's a viable economic model? Do you need to launch across three, four, five, six, seven countries before this becomes profitable, or is it done on a country by country basis, and some won't make sense, and some will?

UBS: Central functions should we be thinking about for this product to work and when we think about launches Watson a viable economic model do you need to launch a cross.

UBS: 34567 countries before this becomes profitable or is it done on a country by country basis on some what makes sense in some well. Thank you.

Kristian Villumsen: I just want to make sure, Graham, I'm getting your first question correct. Is the question whether we are going to have... volume enough to supply in the event that all these other products are removed, or how many products we're talking about with us? Could you just restate the first part of the question? Yeah, so as it stands today, there's a huge amount of products that would no longer be reimbursed. Correct. And it looks to me like that actually leaves, like, an interesting choice, very little choice for physicians, but potentially from a supply chain perspective, you think the entire industry will change. Do you think that will change how they go about introducing any changes? So could we see a period whereby maybe Medicare says you've got a year to get us this data? Yeah. Potentially,

Speaker Change: But I just want to make sure our grandma I'm getting you're getting your first question correctly. If the if the question whether we are going to have.

Speaker Change: Volume enough to supply in the event that all of these other products are removed or how many products. We're talking about with US could you just restate. The first part of the question. Yes. So as it stands today there is a huge amount of products that would be no longer reimbursed correct exchanges and it looks to me like that actually leaves like it.

Speaker Change: Choice very little choice for physicians, but potentially from a supply chain perspective, you think the entire industry just it might be tight to actually service what does it very well.

Speaker Change: Very kind of severe.

Speaker Change: Chronic disease, and obviously, a big potential risk down the road in terms of what happened next so did that.

Speaker Change: Do you think that's something that the Medicare actually saw debates and the board announced was number two in relation to that is.

Speaker Change: Do you think that will change how they go about introducing any changes so could we see a period whereby.

Speaker Change: Maybe just maybe Medicare says you've got a year to get assess data yep.

Speaker Change:

Speaker Change: Potentially.

Kristian Villumsen: So I would say clearly that if you remove about 200 products from the market, there'll be more room to play for the products that are in the market. That's clear. Now, a couple of things to bear in mind right now. This is a draft policy, so there's no change right now, and there will be no change until the implementation date. So, of course, there's going to be some noise in the market, but until the new policy is implemented, products that are currently being sold can still be sold.

Speaker Change: So I would I would say.

Speaker Change: Clearly if you remove about 200 products from from the market there'll be more room to play for the products that are in market.

Speaker Change: That's clear.

Speaker Change: Now a couple of things to bear in mind right. Now this is a draft policy and so there's no change right now and there will be no change until the implementation date. So.

Speaker Change: Of course, that's going to be some noise in the market but.

Speaker Change: But.

Speaker Change: Until the new policy is implemented.

Speaker Change: Products that are currently being sold can still be sold.

Kristian Villumsen: Now, we have plenty of capacity. So, we can actually scale up significantly to meet demand, but... I don't know whether Medicare would, in effect, basically look at this and have a longer transition period. I don't know.

Speaker Change: Now.

Speaker Change: We have plenty of capacity.

Speaker Change: And so we can actually scale up.

Speaker Change: Significantly too to meet demand, but.

Speaker Change: Whether Medicare would it.

Speaker Change: In effect basically look at this and have a longer transition period, I don't know that probably solicit some input from the app.

Kristian Villumsen: They'd probably solicit some input from the products that remain on the list as to whether they can continue to supply. That's probably the best answer I can give at this stage, but right now, we are not capacity constrained. So I'll answer your second question on HALO. We think of this as a long build.

Speaker Change: From the products that remain on list as to whether they can continue to supply.

Speaker Change:

Speaker Change: It's probably the best answer I can I could give it I can give at this stage, but right now we're not capacity constrained.

Speaker Change: So on your second question on Halo.

Speaker Change: We think of this as a long build it's definitely a case that lends itself to volume.

Kristian Villumsen: It's definitely a case that lends itself to volume, like most of the work that we do. So the more markets we get on, the more patients we get on, the happier we get. So, we will have scalability on what's, if you will, the central cost and the cost that we have around the IT data set up and the app. That is scalable. We've already made that investment, but the ambition is clearly to get this into Germany, also get it off the ground in both these markets and shortly thereafter begin the work on getting the product into. So it will be, because it's new, it will be a longer build and a longer launch sequence than what you're looking at with LUJA and MEO and things like that, where the categories are already established. But it clearly lends itself to scale.

Speaker Change: Like most of the work that we do that so.

Speaker Change: The more markets, we get on the more patients we get onto happier we get.

Speaker Change: So.

Speaker Change: We will have scalability on what's if you will central costs and the costs that we have around the I T data set up and the and the App.

Speaker Change: That is scalable we've we've already made we've made that investment.

Speaker Change: But we are the ambition is clearly to get this into Germany.

Speaker Change: Also get it off the ground in both these markets and shortly thereafter begin to work on getting the product into a into the into the next markets.

Speaker Change: So it will be because it's new it will be a longer built and in the longer launch sequence them, what you're looking at with Luca and the meal and things like that where the categories have already established but it it clearly lends itself to scale.

Speaker Change: Thanks, a lot I appreciate the answers thank you.

Graham Doyle: Brilliant, thanks a lot; I appreciate the answer. Thank you. The next question is from the line of Robert with Davies. Please go ahead. Yes, morning. Thanks for taking my questions. I had three. One was just around the LCD kind of requirements and any additional studies that would be needed to be sort of added. Are you sort of able to sort of budget or get a sense of what would be required from a financial standpoint and timing-wise to get any requisite studies done that you don't have in place?

Speaker Change: Thank you. The next question is from the line of Robert with Davis. Please go ahead.

Robert: So this morning, thanks for taking my questions I have three one was just around we felt could be.

Robert: Kind of requirements and any additional studies that would need to be sort of added.

Robert: Are you sort of able to sort of budget or get a sense of what would be required from a financial standpoint, and timing wise to get and your requisite studies done that you don't have in place I'm just wondering if that was something that.

Robert John Davies: Just wondered if that was something you'd considered or kind of quantified internally so far. The second question was just, I guess, sort of the discretionary spend in China. That's something you've called out on some of the previous quarterly calls. You've seen some headwinds. I just wondered if there are any changes in the dynamics you're seeing from those customers. And then the final one was just around energy costs. Perhaps you can just give us a hint. You may have touched on it earlier, but I might have missed it.

Robert: Considered or kind of quantified into anything so far.

Robert: The second question was just.

Robert: I guess sort of the discretionary spend in China.

It's something you've called out on some of the previous a sort of quarterly calls and you're seeing some headwinds just wondered if there was any changes in the dynamics youre seeing those customers and then the final one was just around energy costs. Perhaps you can just give US you may have touched on it earlier I might have missed it but just where are we in terms of energy costs in the walk ins you had before is that how long before.

Robert: That tails off.

Robert John Davies: But just where are we in terms of energy costs and the lock-ins you had before? Is that, how long before that tails off? Thank you, Robert, good question. So on the first one around clinical studies, I'll reiterate our clear conviction that we have a clinical study that will meet and or exceed the requirements that have been stated in the policy. We have a number of things in review already, so studies that have already been done but not published that will further strengthen our position. My view is that the Lanta study is plenty of documentation that we have a very potent technology that's highly relevant, and that should be covered.

Robert: Thank you Robert Good question. So on the first one around clinical studies, so I'll I'll reiterate RK are a clear conviction.

Robert: Is that we have a clinical study that that will meet.

Robert: Or exceed the requirements that have been that have been stated in the policy. We have a number of things in review already so studies that have already been done, but not published that will further strengthen our position, but but my view is that the Atlanta study is plenty of documentation that we have a very important technology.

Robert: That's highly relevant then that should be covered.

Kristian Villumsen: To your second question on consumer sentiment in China, I'll say I spent a week in China a little earlier a few weeks ago. We've got really, really good momentum in hospitals. Hospital activity is back. Patient inflow is back. But consumer spending is still subdued compared to where we were pre-COVID.

To your second question on consumer sentiment in China.

Robert: I'll say I spent a week in China, a little earlier.

A few weeks back.

Robert: We've got really really good momentum in hospital hospital activities back patient inflows back.

Robert: Consumer spending is still subdued compared to where we were.

Kristian Villumsen: So for now, no change. And then on your final question around our energy hedges, so this year we have hedged at a level of 150 euros per megawatt hour. And into next year, I'm expecting quite a tailwind when I look at the current forward rates and the current spot rates. So that will give us some tailwind into 2024-2025.

Robert: Pre COVID-19.

Robert: So for now no change on that.

And then on your final question around our energy hedges. So this year, we have hitched at a level of 150 euros per megawatt hour.

Robert: And into next year, I'm expecting a quite a tailwind when.

Robert: When I look at the current forward rates at the current spot rates. So so that will give us some tailwind into 'twenty four 'twenty five.

Robert John Davies: Thank you. Maybe you could just squeeze in one follow-up just around this consultation period around the LCDs. If you present your case and it sort of doesn't go in your favor, is there an appeals process, or is there any way to sort of get a sort of second crack at it?

Speaker Change: Thank you and maybe you can just squeeze in one follow up just around this consultation period around the LCD. If you present your case and it doesn't go in your favor is there an appeal process or is there any way to sort of get us into a second crack at it. Thank you.

Kristian Villumsen: Thank you. I think this is it, so the consultation process, you will be heard, there will be a number of meetings that are quite formal. We will have people at those meetings. There will be a solicitation of customer and clinical feedback. And on the basis of that, the reviewers will basically form a process that can be an appeals process.

Speaker Change: I think this is it so the council. The consultation process. You you you will be heard there'll be a number of meetings that quite formal.

Speaker Change: We will have people at those meetings and that will be a solicitation of a customer and clinical feedback.

Speaker Change: And.

Speaker Change: And on the basis of that the review is for basically form process that can be and and and and appeals process.

Speaker Change: Yep.

Robert John Davies: Before the final policy is implemented, but the exact mechanics of that, I'd have to get back on at www.thevenusproject.com. Understand? Thank you very much. Thank you, Operator. There are no further questions at this time. I will hand over to Kristian Villumsen for closing comments. Thank you to everybody who has joined our call today. Thank you for your interest in the company. Should you have any additional questions, please feel free to contact our Investor Relations team.

Speaker Change: Before the final policy is if it is implemented but the exact mechanics of that.

Speaker Change: I'd have to get back on.

Speaker Change: But.

But but you.

Speaker Change: You need to put your best foot forward of course and in the process, where you're supposed to be heard and we will do that.

Speaker Change: Understood. Thank you very much.

Thank you operator.

Speaker Change: There are no further questions at this time I hand back to Christian Williamson for closing comments.

Christian Williamson: But just a thank you to everybody who has joined our call today. Thank you for your interest in the company should you have any additional questions. Please feel free to contact our investor relations team and else. We look forward to seeing you on the road.

Kristian Villumsen: And, else, we look forward to seeing you on the road. Thank you. Ladies and gentlemen, the conference is now concluded. You may disconnect your telephone. Thank you for joining us and have a pleasant day. Goodbye.

Christian Williamson: Thank you ladies and gentlemen, the conference is now concluded you may disconnect. Your telephone. Thank you for joining and have a pleasant day goodbye.

Christian Williamson: [music].

Christian Williamson: Yeah.

Christian Williamson: [music].

Christian Williamson: Yes.

Christian Williamson: Okay.

Christian Williamson: Yes.