Q3 2024 Coloplast AS Earnings Call

August 20, 2024

Ladies and gentlemen, welcome to the Coloplast 9-month 2023-2024 earnings release conference call.

Unknown Executive: Ladies and gentlemen, welcome to the Coloplast 9 month 2023-24 earnings release conference call.

Ladies and gentlemen, welcome to the club plus nine month 2023, 24 earnings release Conference call I am sorry, the chorus call operator, I would like to remind you that all participants will be in listen only mode and the call.

I am Shari, the call operator.

So we're starting to wind up the flywheel.

So the growth that we've seen historically from urology will not be as strong as it has been.

So I think this is, of course, mostly relevant for people who have most of their business in the outpatient setting.

Shari: I am Shari, the Carl's Call operator.

I am Shari, the call operator.

I would like to remind you that all participants will be in listen-only mode and the conference is being recorded.

Unknown Executive: I would like to remind you that all participants will be listening on the mode, and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero.

Speaker Change: I would like to remind you that all participants will be in listen-only mode and the conference is being recorded.

Speaker Change: France is being recorded the.

Speaker Change: The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and 1 on your telephone.

Speaker Change: The presentation will be followed by a Q&A session.

Speaker Change: You can register for questions at any time by pressing star one on your telephone for Opera Tor assistance. Please press star and Yeah. The conference must not be recorded for publication or book cost.

Speaker Change: For operator assistance, please press star and 0.

Speaker Change: For operator assistance, please press star and zero.

Speaker Change: The conference must not be recorded for publication or broadcast.

Unknown Executive: The conference must not be recorded for publication or broadcasts.

Speaker Change: At this time, it's my pleasure to hand over to Christian Villumsen, President and CEO.

Speaker Change: And this is the first point.

Speaker Change: But on the other hand, the 2% that we have in this quarter, we also believe clearly is the trough.

Speaker Change: We are doing some activities outside of the U.S.

Christian Villumsen: At this time, it's my pleasure to hand over to Christian Villumsen, President and CEO. Please go ahead.

Speaker Change: At this time, it's my pleasure to hand over to Kristian Villumsen, President and CEO.

Speaker Change: At this time, it's my pleasure to hand over to Christian Williamson President and CEO. Please go ahead.

Speaker Change: Please go ahead.

Christian Williamson: Please go ahead.

Christian Williamson: Thank you very much, operator.

Christian Villumsen: Thank you very much, operator. Good morning, everybody. And welcome to our 9-month 23-24 conference call. I'm Christian Villumsen, the CEO of Coloplast, and I'm joined by our CFO on us learning Skogal and our investor relations team.

Christian Williamson: Thank you very much, operator.

Christian Williamson: Thank you very much operator, good morning, everybody.

Christian Williamson: Good morning, everybody, and welcome to our 9-month 2023-2024 conference call.

Christian Williamson: But, of course, we're pushing hard that the product gets into, as many customers' hands as possible.

Christian Williamson: We were impacted also by back orders in this quarter, and we're coming out of that.

Christian Williamson: But our overwhelming focus is on succeeding, in the U.S. And it will continue to be so.

Kristen billings: And welcome to our nine months 'twenty three 'twenty four conference call I'm Kristen billings from the CEO of Copel, <unk> and I'm joined by our CFO I'm, not starting school ball and our Investor Relations team.

Christian Williamson: I'm Christian Villumsen, the CEO of Coloplast, and I'm joined by our CFO, Anas Loningskogol, and our investor relations team.

Christian Williamson: We are ahead of the launch plan that we have pretty consistently across all the markets that we're in, meaning that customers are voting.

Christian Williamson: To your question on Centura Meo Black, could you just repeat the question again?

Christian Williamson: Building up the next, if you will, the next portfolio of markets is going to be a pretty significant effort.

Christian Villumsen: We'll start with a short presentation by Anderson, myself, and then open up for questions like we usually do. Please turn to slide number three. We delivered 8% organic growth and a reported EBIT margin before special items of 27% in our third quarter. We turned on invested capital after taxing before special items was 15%, reflecting impact from the acquisition of CARESIS. I'm satisfied with our performance. We continue to broadly outgrow the market, and we're delivering solid growth in absolute profits. More importantly, we also continue to help a lot more people who live with inanimate healthcare needs.

Christian Williamson: We'll start with a short presentation by Anders and myself and then open up for questions like we usually do.

Speaker Change: Let's start with a short presentation by Andrew and myself and then open up for questions like we usually do.

Christian Williamson: Please turn to slide number 3.

Speaker Change: Please turn to slide number three.

Speaker Change: Okay.

Andrew: We delivered 8% organic growth in our reported EBIT margin before special items of 27% in our third quarter.

Return on invested capital after tax and before special items was 15%, reflecting impacts from the acquisition of cashless.

Speaker Change: I'm satisfied with our performance, we continue to broadly I'll call the market, we're delivering solid growth and absolute profits. While importantly, we also continue to help a lot more people, who live with intimate health care needs.

Christian Villumsen: Let me start today's call with a few highlights. First, innovation. This is a year with several significant product launches that will support growth off-during Strive 25 but also beyond the strategic period. One of these products is Luja, a new inanimate catheter with micro-hole zone technology. With Luja, we're setting a new standard in inanimate catheterization with a unique technology that enables full bladder emptying in one free flow and therefore addressing key risk factors related to urinary tract infections. We are already seeing significant contribution to continents care growth from the male Luja catheter, which is available to users in now 13 markets.

Christian Williamson: We delivered 8% organic growth and a reported EBIT margin before special items of 27% in our third quarter.

Christian Williamson: In China, unfortunately, not much news to report, I'd say surgical activity levels are, still robust across the different provinces in China, we're seeing decent patient enrollment coming into the business, but the spend levels and the patient values are still depressed compared to pre-COVID, and I've now taken the stance that I'm not going to get more positive until I can actually see it in our numbers, so I'm still looking at a Chinese business that's sitting around mid-single-digit for this year, and then once we get to the a bit of an indication of what the underlying real continence care, so catheter sales growth was doing this year versus last year, is it comparably up 50 bps or anything that we can actually really try to figure out what's going on?

Christian Williamson: When do you plan to launch in the U.S. for this product, and have you been able to charge a premium so far?

Christian Williamson: We don't want to put the technology into the market if we don't have the appropriate pricing. And so there will be a fair amount of clinical and market access work that needs to go into play that it becomes an attractive category in Europe and potentially in some markets in Asia-Pacific.

Speaker Change: Good morning, everybody.

Speaker Change: Let me start today's call with a few highlights.

Speaker Change: Return on invested capital after tax and before special items was 15%, reflecting impact from the acquisition of CARES Sys.

Speaker Change: Thank you.

Speaker Change: So I will have to just – let me just check that.

Speaker Change: But that's more for medium and long-term when we look at it.

Speaker Change: First in there.

Speaker Change: And welcome to our nine-month 23-24 conference call.

Speaker Change: Sure.

Speaker Change: I'm satisfied with our performance.

Speaker Change: I think that we still have a couple quarters to go before we're launching in the U.S.

Speaker Change: Great.

Speaker Change: I'm Kristian Villumsen, the CEO of Coloplast, and I'm joined by our CFO, Annas Lonning-Skogol, and our investor relations team.

Speaker Change: This is a year with several significant product launches that will support golf ball steering strive 25, but also beyond this strategic period.

Speaker Change: We continue to broadly outgrow the market, and we're delivering solid growth in absolute profits.

Speaker Change: More importantly, we also continue to help a lot more people who live with intimate healthcare needs.

Speaker Change: We'll start with a short presentation by Anders and myself and then open up for questions like we usually do.

Speaker Change: Let me start today's call with a few highlights.

Speaker Change: No, so catheters are meaningfully up, Maya, which is also why the entire continence category, is up by a full point.

Speaker Change: Okay, thank you very much.

Speaker Change: Thank you.

Speaker Change: Please turn to slide number three.

Speaker Change: One of these products is Luca on U intermittent catheter.

Speaker Change: We delivered 8% organic growth and a reported EBIT margin before special items of 27% in our third quarter.

Speaker Change: The return on invested capital after tax and before special items was 15% reflecting impact from the acquisition of CARES Act.

Speaker Change: I'm satisfied with our performance, continue to broadly outgrow the market and we're delivering solid growth in absolute profit.

Speaker Change: More importantly, we also continue to help a lot more people who live with intimate health conditions.

Speaker Change: With micro <unk> zone technology.

Speaker Change: First, innovation.

Speaker Change: Catheters are growing fast, and collecting devices, there's also a relatively significant, share of the category still is, of course, a drag on growth, it's about 15% of the total category with very limited growth in it, so if you know that, I think you can backwards map what we're saying about catheters.

Speaker Change: But I'll just revert with an accurate date so you have it.

Speaker Change: Thank you, operator.

Lou: Let me start today's call with a few highlights.

Speaker Change: You should not expect that the product comes with a premium that launches into the existing price structure.

Speaker Change: This concludes the session.

Lou: Well Lou job, we're setting a new standard in intimate and capitalization with a unique technology that enables full bladder empty and one free flow.

Lou: And thank you, everybody, for joining our call.

Lou: Ladies and gentlemen, the conference is now over.

Lou: Thank you for choosing Coruscant and thank you for participating in the conference.

Lou: You may now disconnect your lines.

Lou: Goodbye.

Lou: This is a year with several significant product launches that will support growth both during STRIVE25 but also beyond the strategic period. One of these products is Lugia, our new intermittent catheter with micro-hole zone technology. With Lugia, we're setting a new standard in intermittent catheterization with a unique technology that enables full bladder emptying in one free flow, and therefore addressing key risk factors related to urinary tract infections.

Lou: Thank you.

Lou: Okay, thank you.

Speaker Change: And therefore addressing key risk factors related to urinary tract infections.

Lou: We are already seeing significant contribution to continence care growth from the male Lugia catheter, which is available to users in now 13 markets.

Lou: The next question comes from the line of Neils Granholm, Carnegie, please go ahead.

Lou: The next question comes from the line of Marianne Boulot, Bank of America.

Speaker Change: And we are already seeing significant contribution to continence care graph from the male Lucha catheter, which is available to users and now 13 markets.

Lou: The launch of the female catheter is ongoing, and the product is currently available in four markets where it's received very positive customer feedback.

Lou: Please go ahead.

Christian Villumsen: The launch of the female catheter is ongoing, and the product is currently available in four markets where it's received very positive customer feedback. Another important highlight relevant for our US intermittent catheters business is the publication of a final coding decision for intermittent urinary catheters by the CMS late last week. With this final decision, the existing coding structure for intermittent catheters in the US is updated to include three new codes and, with that, differentiate between hydrophilic and non-hydrophilic catheters. The new coding structure will be implemented as of January 1, 2026. Let me remind you that under the existing coding setup, both hydrophilic and all the generations of catheters are covered by the same codes, which means that patients don't always get access to the latest technology, despite there being good evidence that hydrophilic catheters lead to better clinical outcomes.

Speaker Change: The launch of the female catheter is ongoing.

Speaker Change: And the product is currently available in four markets, where it's received very positive customer feedback.

Lou: Another important highlight relevant for our U.S. intermittent catheters business is the publication of a final coding decision for intermittent urinary catheters by the CMS late last week. With this final decision, the existing coding structure for intermittent catheters in the U.S. is updated to include three new codes, and with that, differentiate between hydrophilic and non-hydrophilic catheters.

Lou: Thank you for taking my questions, first question on the CMS decision, can you talk about the, degree of switching which takes place between the hospital and home care, so what proportion of patients would you estimate actually being switched back to uncoded as they return to home care?

Speaker Change: Another important highlight relevant for all U S. Intermittent catheter business is the publication of a final coding decision for intermittent urinary catheter is by the CMS late last week well.

Lou: My second question is just a kind of housekeeping question on the calculation on your organic, growth, is it correctly understood that you exclude product rationalization from the calculation of your organic growth?

Speaker Change: With this final decision the existing coding structure for intermittent catheters in the U S is update it to.

Speaker Change: To include three new coach and would that dip.

Speaker Change: Differentiate between hydrophilic and non hydrophilic catheters.

Lou: The new coding structure will be implemented as of January 1, 2026.

Speaker Change: The new coding structure will be implemented as of January one 'twenty 'twenty six.

Lou: Let me remind you that under the existing coding setup, both hydrophilic and older generations of catheters are covered by the same codes, which means that patients don't always get access to the latest technology, despite there being good evidence that hydrophilic catheters lead to better clinical outcomes.

Lou: Thank you.

Speaker Change: Let me remind you that under the existing coding set up both hydrophilic and older generations of catheters are covered by the same coach which means that patients don't always get access to the latest technology. Despite there being good evidence the hydrophilic catheter has lead to better clinical outcomes.

Lou: Thank you, thank you, Nils, if you look at the market now in the U.S., you still probably, have about 60% of volumes that are uncoded.

Lou: I don't have accurate data because on the switching that takes place because we don't, run those businesses, we just know that it's happening.

Lou: And you can also see from the fact that a large number of the distribution players have, had a focus on driving uncoded technology and uncoded brands.

Lou: I don't know the exact amount of what that is.

Lou: We just know it's significant.

Lou: And the whole, if you will, strategic opening that's coming now is that once the market, is educated on these new codes, that this in effect becomes impossible.

Lou: So the net impact of that, we don't know what it is yet, but we will, of course, invest, heavily with the commercial muscle that we have to drive the conversion also to the new codes.

Lou: We consider this change, first and foremost, to be a win for patients. Patients will now be guaranteed access to hydrophilic catheters.

Lou: But would you expect the distributors to absorb the entire margin compression that they would, experience when more patients move to coded going forward?

Lou: Well, if you decide to serve the demand, I mean, you're going to have to, you're going, to have to.

Christian Villumsen: We consider this change first and foremost to be a win for patients. Patients will now be guaranteed access to hydrophilic catheters. We also consider it to be a win for innovation. Coloplast has been on the forefront of upgrading the U.S. intermittent catheters market toward hydrophilic technology for many years, and today more than 70% of our U.S. intermittent catheter sales come from hydrophilic catheters. Still, many more patients remain that should have access to better technology, and we will continue to focus on upgrading the market both to hydrophilic catheters and, of course, also to our micro-holzone technology, which sets a new standard in intermittent catheterization.

Lou: So, of course, and this then becomes a question on what will happen with the distribution, landscape and I think that you will see some level of consolidation on how many people will participate in that game.

Speaker Change: We consider this change first and foremost to be a win for patients.

Speaker Change: Patients will now be guaranteed access to hydrophilic catheters, we also considered to be a win for innovation.

Lou: We also consider it to be a win for innovation.

Speaker Change: Innovation.

Speaker Change: Coloplast has been on the forefront of upgrading the U.S. intermittent catheters market toward hydrophilic technology for many years. And today, more than 70% of our U.S. intermittent catheter sales come from hydrophilic catheters.

Speaker Change: But that notwithstanding, the companies or the distributors that have partnered with, us and have had good growth with us also have profitable growth, even at, if you will, the hydrophilic margin that they get.

Speaker Change: This is a year with several significant product launches that will support growth both during Strive 25 but also beyond the strategic period. One of these products is LUJA, our new intermittent catheter with micro-hole zone technology.

Speaker Change: <unk> plus has been on the forefront of upgrading the U S intermittent catheter market toward hydrophilic technology for many years.

Speaker Change: And today more than 70% of our U S intermittent catheter sales come from hydrophilic catheters.

Speaker Change: Still, many more patients remain that should have access to better technology, and we will continue to focus on upgrading the market both to hydrophilic catheters and, of course, also to our micro-hole zone technology, which sets a new standard in intermittent catheterization.

Speaker Change: Still.

Speaker Change: Many more patients remain that should have access to better technology, and we will continue to focus on upgrading the market both tied to Philly catheters and of course also to our micro holds on technology, which sets a new standard and intermittent catheter ablation.

Speaker Change: With Lugia, we're setting a new standard in intermittent catheterization with a unique technology that enables full bladder emptying in one free flow, and therefore addressing key risk factors related to urinary tract infections.

Speaker Change: Next, I'd like to turn to Kerasys.

Speaker Change: Okay.

Speaker Change: Yes, good morning.

Christian Villumsen: Next, I'd like to turn to Carasus. The business continues to grow at a strong double-digit growth rate of around 35% and continues to take market share in the biological segment of the advancement care market. Performance and integration are both on track. So far, there's been limited impact on sales and operations from the draft local coverage determination policy announced earlier this year where Carasus was not included on the draft list of covered products. As part of the LCD consultation period in June, we submitted comprehensive documentation to support Carasus in getting back on the list of covered products.

Speaker Change: Next.

Speaker Change: I'd like to turn to care for us.

Speaker Change: The business continues to grow at a strong double-digit growth rate of around 35%, and continues to take market share in the biologic segment of the advanced wound care market. Performance and integration are both on track.

Speaker Change: All right.

Speaker Change: Thank you for taking my question.

Speaker Change: The business continues to grow at a strong double digit growth rate of around 35% and continues to take market share in the biologics segment of the advanced wound care market.

Speaker Change: And then let's turn to your second question around the product rationalization.

Speaker Change: Maybe two questions.

Speaker Change: The first one on Halo, wondering how has been the feedback since the launch in the U.K., and if you have any update regarding Germany?

Speaker Change: For months and integration.

Speaker Change: On track.

Speaker Change: So far, there's been limited impact on sales and operations from the draft local coverage determination policy, announced earlier this year, where Kerasys was not included on the draft list of covered products. As part of the LCD consultation period in June, we submitted comprehensive documentation to support Kerasys in getting back on the list of covered products.

Speaker Change: So far that's been limited impact on sales and operations from the draft local coverage determination policy announced earlier this year, where care says what's not included on the draft list off covered products.

Speaker Change: As part of the L. C D consultation period in June.

Speaker Change: We submitted a comprehensive documentation.

Speaker Change: To support cases, and getting back on the list of covered products.

Speaker Change: Our position is unchanged.

Christian Villumsen: Our position is unchanged. We welcome the introduction of a clinical qualification for obtaining coverage, and we perceive it as a positive development, which will benefit patients. We continue to strongly believe that we have the right clinical evidence to prove the strength of Carasus Fishkin and to get us back on the covered list. We continue also to expect that final LCD policy to be announced sometime in the second half of 2024. At the same time, we also continue to develop additional clinical evidence on Carasus. A new randomized control clinical study comparing the performance of Carasus Fishkin to standard care in the treatment of complex diabetic foot ulcers is pending publication.

Speaker Change: Our position is unchanged.

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

Speaker Change: We welcome the introduction of a clinical qualification for obtaining coverage.

Speaker Change: And we perceive it as a positive development, which will benefit patients.

Speaker Change: We continue to strongly believe that we have the right clinical evidence to prove the strength of Kerasys fish skin, and to get us back on the covered list.

Speaker Change: We continue to strongly believe that we have the right clinical evidence to prove the strength of care assist fishkin and to get us back on the covered list.

Speaker Change: We continue also to expect a final LCD policy to be announced sometime in the second half of 2024.

Speaker Change: We continue also to expect a final LCD policy to be announced sometime in the second half of 'twenty 'twenty four.

Speaker Change: At the same time, we also continue to develop additional clinical evidence on Kerasys. A new randomized controlled clinical study comparing the performance of Kerasys fish skin to standard of care, in the treatment of complex diabetic foot ulcers is pending publication. This is the largest Kerasys study to date, with a sample size of more than 250 patients, and we look forward to sharing the results very soon.

Speaker Change: At the same time, we also continue to develop additional clinical evidence on cashless, a new randomized control clinical study comparing the performance of care, especially to stand up care in the treatment of complex diabetic foot ulcers is pending publication.

Christian Villumsen: This is the largest Carasus study to date, with a sample size of more than 250 patients, and we look forward to sharing the results very soon.

Speaker Change: This is the largest care studied to date with a sample size of more than 250 patients and we look forward to sharing the results very soon.

Speaker Change: Before I move on to the details by business area, let me provide a brief update on our newly established distribution center in the U.S. During Q3, Coloplast established a new distribution hub to serve its chronic care, advanced wound dressings, and skin care businesses in the U.S. The U.S. is a strategic focus market for us, and given the expansion that Coloplast has experienced in the U.S. over the last years, there was a need to consolidate our distribution operations previously located in two centers.

Speaker Change: And the second question on wound care, if we look at the advanced wound dressing site, so where you had the 10 percent organically, just wondering if there is any specific region that was stronger that led to this 10 percent growth?

Christian Villumsen: Before I move on to the details by business area, let me provide a brief update on our newly established distribution center in the U.S. During Q3, a coal plus established a new distribution hub to serve its chronic care, advanced wound dressing, and skin care businesses in the U.S. The U.S. is a strategic focus market for us, and given the expansion that Coal Plus has experienced in the U.S. Over the last years, there was a need to consolidate our distribution operations previously located in two centers. The new setup is expected to drive scale benefits while supporting future growth.

Speaker Change: Before I move onto the details by business area. Let me provide a brief update on our newly established distribution center in the U S.

Speaker Change: And maybe if you had a feedback as well on the U.S. launch of the silicone fit franchise.

Speaker Change: Thank you.

Speaker Change: During Q3 our.

Our coal plus established a new distribution hub to serve its chronic care advanced wound dressings and skin care businesses in the U S.

Speaker Change: Thank you, Marianne.

Speaker Change: So quickly on Halo early days, remember this is going to be a long category build.

Speaker Change: The U S is a strategic focus market for us and given the expansion that cold plus has experienced in the U S over the last years.

Speaker Change: So we're deep in the education effort of both patients and healthcare professionals in the, UK.

Speaker Change: We're tracking well in the UK, still no answer from the German authorities who are delayed, in their response.

Speaker Change: There was a need to consolidate our distribution operations previously located in two centers.

Speaker Change: The new setup is expected to drive scale benefits while supporting future growth.

Speaker Change: The new set up is expected to drive scale benefits, while supporting future growth.

Speaker Change: This new setup has, however, resulted in short-term supply disruptions during Q3, mostly impacting the chronic care business, and it has detracted around 20 basis points from the group's organic growth in the quarter.

Christian Villumsen: This new setup has, however, resulted in short-term supply disruptions during Q3, mostly impacting the chronic care business, and it has detracted around 20 basis points from the group's organic growth in the quarter. It's also resulted in extraordinary costs in the quarter, which are expected to persist into Q4. We are working hard on resolving these short-term challenges, and we expect to be back to normal operations in the U.S. by the end of Q4.

Speaker Change: This new set up has however resulted in short term supply disruptions during Q3, mostly impacting the chronic care business and it has detracted around 20 basis points from the group's organic growth in the quarter.

Speaker Change: It's also resulted in extraordinary costs in the quarter, which are expected to persist into Q4.

Speaker Change: We are working hard on resolving these short-term challenges, and we expect to be back to normal operations in the U.S. by the end of Q4.

Speaker Change: We are working hard on resolving these short term challenges and we expect to be back to normal operations in the U S. By the end of Q4.

Speaker Change: Please turn to slide number four.

Speaker Change: So we don't know where this will land in Germany yet. On Wooncare, as you'll recall from my opening remarks, the quarter is a little skewed by, order patterns in Germany ahead of a price increase in Germany.

Christian Villumsen: Dr. Paret, please turn to slide number four. In Austin, we care organic growth was 7% for the first nine months, and growth in Danish Grona was 6%. Organic growth in Q3 was 8%, and growth in Danish Grona was also 8%. Our sensora muportfolio continues to be the main growth driver, followed by the Brava range of supporting products. Our sensora and our solar alternative portfolios also continue to post solid growth in the merger markets. From a geographical perspective, all regions contributed to growth in the quarter, with broad-based contribution across the merger markets in Europe driven by the UK.

Speaker Change: Please turn to slide number four.

Speaker Change: In Ostomy care organic growth was 7% for the first nine months and growth in Danish kroner was 6% organic growth in Q3 was 8% and girlfriend Danish Krona was also 8%.

Speaker Change: In Austin-McHare, organic growth was 7% for the first nine months, and growth in Danish, Krona was 6%.

Speaker Change: We're also getting good growth from emerging markets.

Speaker Change: Organic growth in Q3 was 8%, and growth in Danish Krona was also 8%.

Speaker Change: So you shouldn't expect as strong a quarter in Q4.

Speaker Change: Our Sensura MU portfolio continues to be the main growth driver, followed by the Bravo, range of supporting products.

Speaker Change: Since from your portfolio continues to be the main growth driver for us.

Speaker Change: All up by the Bravo range of supporting products Awesome, SURA and a sore alternate portfolios also continue to post solid golf in emerging markets.

Speaker Change: Our Sensura and Assura Alterna portfolios also continue to post solid growth in emerging, markets.

Speaker Change: From a geographical perspective, all regions contributed to growth in the quarter, with, broad-based contribution across emerging markets in Europe, driven by the U.K.

Speaker Change: From a geographical perspective, all regions contributed to growth in the quarter with broad based contributions across emerging markets in Europe, driven by the U K.

Christian Villumsen: In the US, growth in the quarter improved; however, below our expectations and included impact on the establishment of the new coal plus distribution center that I explained earlier. Contents care organic growth was 8% for the first nine months, and growth in Danish Grona was 6%. In Q3, organic growth was 8% and growth in Danish Grona was 9%. Growth in the quarter was driven by good momentum in intermittent catheters across the Speed Cath portfolio and the male Lucha intermittent catheter, which made a strong contribution to growth in our third quarter. A bowel care business also contributed to growth driven by Peristine Plus in Europe as well as the US.

Speaker Change: In the U.S., growth in the quarter improved, however, below our expectations, and included, impact from the establishment of the new Coloplast Distribution Center that I explained earlier.

Speaker Change: I'm looking at a Q4 that's sitting at mid to high single-digit type of range.

Speaker Change: In the U S growth in the quarter improved a little below our expectations and included impacts from the establishment of the new coal plus distribution center that I explained earlier.

Speaker Change: The launch of the Biotin Silicone Fit product in the US, still early days, but a good level, of activity, good opportunity pipeline.

Speaker Change: The next question comes from the line of Christian Ryan, Denske Bank.

Speaker Change: And we are already seeing significant contribution to continence care growth from the male allugia catheter which is available to users in now 13 markets.

Speaker Change: Continence care organic growth was 8% for the first nine months and growth in Danish kroner was 6% and.

Speaker Change: In Austin-McHare, organic growth was 8% for the first nine months, and growth in Danish, Krona was 6%.

Speaker Change: Please go ahead.

Speaker Change: The launch of the female catheter is ongoing. And the product is currently available in four markets where it's received very positive customer feedback.

Speaker Change: Hi.

Speaker Change: In Q3, organic growth was 8%, and growth in Danish Krona was 9%. Growth in the quarter was driven by good momentum in intermittent catheters across the SpeedyCath, portfolio and the male Lugia intermittent catheter, which made a strong contribution to growth in our third quarter.

Speaker Change: Hello, Christian and Andersen.

Speaker Change: In Q3 organic growth was 8% and our growth in Danish kroner was 9%.

Speaker Change: Another important highlight relevant for our U.S. intermittent catheters business is the publication of a final coding decision for intermittent urinary catheters by the CMS late last week. With this final decision, the existing coding structure for intermittent catheters in the U.S. is updated, to include three new codes and with that, differentiate between hydrophilic and non-hydrophilic catheters.

Speaker Change: Growth in the quarter was driven by good momentum in intermittent catheter us across the speed of cat portfolio and the male Luchow catheter, which made a strong contribution to growth and also at quarter.

Speaker Change: Thank you for taking my questions.

Speaker Change: The new coding structure will be implemented as of January 1, 2026. Let me remind you that under the existing coding setup, both hydrophilic and older generations of catheters are covered by the same code, which means that patients don't always get access to the latest technology despite there being good evidence, that hydrophilic catheters lead to better clinical outcomes.

Speaker Change: We consider this change, first and foremost, to be a win for patients. Patients will now be guaranteed access to hydrophilic catheters.

Speaker Change: We also consider it to be a win for innovation.

Speaker Change: I have two as well.

Speaker Change: Coloplast has been on the forefront of upgrading the U.S. sediment and catheters market toward hydrophilic technology for many years. And today, more than 70% of our US intermittent catheter sales come from hydrophilic catheters.

Speaker Change: Our bowel care business also contributed to growth driven by Peristine Plus in Europe, as well as the U.S. From a geographical perspective, growth was broad-based across regions, led by Europe, especially France and the U.K. Markets where reimbursement has been recently established or improved, such as Poland, continued, to perform well and grew double-digit.

Speaker Change: Obama care business also contributed to growth driven by parents team plus in Europe.

Speaker Change: Many more patients remain that should have access to better technology and we will continue to focus on upgrading the market both to hydrophilic catheters and of course also to our micro hosone technology which sets a new standard in intermittent catheterization.

Speaker Change: As far as the U S.

Christian Villumsen: With geographical perspective, growth was broad-based across regions, led by Europe, especially France and the UK. Markets where reimbursement has been recently established or improved, such as Poland, continue to perform well and grew double-digit. In the US, growth in the quarter was impacted by the establishment of the new coal plus distribution center. Voice and respiratory care posted 10% organic growth for the first nine months, with growth in Danish Grona of 8%. In Q3, organic growth was 11% and growth in Danish Grona was 9%. Reported revenue includes negative impact from product rationalization of 1% in the first nine months of the year and 2% in Q3.

Speaker Change: Next, I'd like to turn to Kerasys.

Well the geographical perspective growth was prospect broadbased across regions led by Europe, especially France and the U K.

Speaker Change: The business continues to grow at a strong double-digit growth rate of around 35% and continues to take market share in the biologic segment of the advanced home care market.

Markets, where reimbursement has been recently established or improve such as Poland continued to perform well and grew double digits.

Speaker Change: In the U.S., growth in the quarter was impacted by the establishment of the new Coloplast, Distribution Center.

Speaker Change: The first is to the CMS coding update.

Speaker Change: In the U S growth in the quarter was impacted by the establishment of the new coal plus distribution center.

Speaker Change: And given that this is first implemented on 1st of January, is there an opportunity that, we might actually see a differentiation in the fees for the different categories when the fee schedule for that year is announced in, I would imagine, about a year's time?

Speaker Change: And maybe as a tag-on to that, I would think from the discussion that we've already had, on this call that we could expect some lobbying from distributors arguing that they should get a higher reimbursement level for the coded categories.

Boyfriend respiratory care posted 10% organic growth for the first nine months with growth in Danish kroner of 8%.

Speaker Change: Voice and respiratory care posted 10% organic growth for the first nine months, with growth, in Danish Krona of 8%. In Q3, organic growth was 11%, and growth in Danish Krona was 9%.

Speaker Change: Now we are in the voice and respiratory care.

Speaker Change: So is that a sort of possible outcome?

In Q3 organic growth was 11% and growth in Danish kroner was 9%.

Speaker Change: Reported revenue includes negative impact from product rationalization of 1% in the, first nine months of the year and 2% in Q3.

Speaker Change: Revenue includes negative impact from product rationalization of 1% in the first nine months of the year and 2% in.

In Q3.

Christian Villumsen: I am very satisfied with this performance, which continues to be at the upper end of our guidance range for voice and respiratory care, and it is driven by broad-based contributions from both low endectomy and trikeostomy. Growth in low endectomy in Q3 was high single-digit driven by an increase in the number of patients served in both existing and new markets, as well as an increase in patient value which is driven by the Provox Life portfolio. Growth in trikeostomy in the quarter was double-digit driven by continued solid demand and positive impact from forward integration. From a geographical perspective, all regions contributed to growth led by Europe, as well as solid contribution from the U.S.

Speaker Change: I am very satisfied with this performance, which continues to be at the upper end of our guidance range for voice in respiratory care.

Speaker Change: Performance and Integration are both on track.

Speaker Change: I am very satisfied with this performance, which continues to be at the upper end of, our guidance range for voice and respiratory care, and it's driven by broad-based contributions from both laryngectomy and tracheostomy. Growth in laryngectomy in Q3 was high single-digit, driven by an increase in the number of patients, served in both existing and new markets, as well as an increase in patient value, which is driven by the Provox Life portfolio. Growth in tracheostomy in the quarter was double-digit, driven by continued solid demand, and positive impact from forward integration.

Speaker Change: It's related to the divestment of a small company.

Speaker Change: That's the first question.

Speaker Change: So far, there's been limited impact on sales and operations from the draft local coverage determination policy announced earlier this year where CARES was not included on the draft list of covered products, as part of the LCD consultation period in June. We submitted comprehensive documentation to support Kerasys in getting back on the list of covered products.

Speaker Change: We did end of Q1 call MC Europe that is reflected here.

Speaker Change: And then the second question is to the gross margin.

Speaker Change: And it's driven by broad based contributions from both laryngectomy.

Speaker Change: And tracheostomy.

Speaker Change: Our position is unchanged.

Speaker Change: Girlfriend living tectum in Q3 was high single digit driven by an increase in the number of patients served in both existing and new markets as well as an increase in patient value, which is driven by the pro box life portfolio growth.

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

Speaker Change: We continue to strongly believe that we have the right clinical evidence to prove the strength of Keras's fish skin and to get us back on the covered list.

Speaker Change: We continue also to expect a final LCD policy to be announced sometime in the second half of 2024.

Speaker Change: At the same time, we also continue to develop additional clinical evidence on KERASIS. A new randomized controlled clinical study comparing the performance of KERASIS-Feshkin to stand-of-care in the treatment of complex diabetic foot ulcers is pending publication.

Speaker Change: Growth in tracheostomy in the quarter with double digit 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, as solid contribution from the U.S.

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

Speaker Change: Well, a solid contribution from the U S.

Christian Villumsen: In advance, One Care organic growth was 10% for the first nine months and growth in Danish Grona was 42%. Organic growth in Q3 was 13%, and growth in Danish Grona was 51%. Reported growth for the period includes impact from the acquisition of Caruses. The advance wind dressing business grew 10% organically in the first nine months, and Q3 organic growth in advance wind dressing was 13%, which includes benefit from a lower baseline last year and from order-facing in Germany. From a product perspective, the Biotene silicon portfolio was the main growth contributor, while from a geographical perspective, growth was driven by Europe, especially Germany, as well as the solid contribution from the major markets.

Speaker Change: In advanced wound care, organic growth was 10% for the first nine months, and growth, in Danish Krona was 42%.

Speaker Change: In the bathroom care organic growth was 10% for the first nine months and growth in Danish kroner was 42% well.

Speaker Change: Organic growth in Q3 was 13%, and growth in Danish Krona was 51%. Reported growth for the period includes impact from the acquisition of kerosene.

Speaker Change: Organic growth in Q3 was 13% and growth in Danish kroner was 51% reported growth for the period includes the impact from the acquisition of terraces.

Speaker Change: The advanced wound dressings business grew 10% organically in the first nine months and Q3 organic growth in our advanced wound dressings was.

Speaker Change: The advanced wound dressings business grew 10% organically in the first nine months. In Q3, organic growth in advanced wound dressings was 13%, which includes benefit from a lower, baseline last year, and from order facing in Germany. From a product perspective, the Biotene Silicone portfolio was the main growth contributor, while from a geographical perspective, growth was driven by Europe, especially Germany, as well as a solid contribution from emerging markets.

Speaker Change: 13%, which includes benefit from a lower baseline last year and from water facing in Germany.

From a product perspective, the biotech silicon portfolio was the main growth contributor while from a geographical perspective growth was driven by Europe, especially Germany as well as a solid contribution from emerging markets.

Speaker Change: Revenue from Kerasys amounted to $730 million Danish Kroner in the first 9 months and $269 million Danish Kroner in Q3. The underlying revenue growth was around 35% in both periods.

Speaker Change: So when I try to back out the acquisitions of ATOS and Kerasis from the gross margin, in the quarter, the gross margin is still below 66%.

Christian Villumsen: Revenue from Carossus amounted to 230 million Danish kroner in the first nine months and 269 million Danish kroner in Q3. The underlying revenue growth was around 35% in both periods. The inpatient channel and surgical wounds were the main contributors to growth. Carossus operating profit-modding, excluding PPA modernization, was around 10% in both periods, in line with our expectations. In interventional urology, organic growth was 4% for the first nine months, and growth in the Danish corner was 3%. In Q3, both organic growth and reported growth in Danish Corner were 2%. The men's health business in the US was the main growth contributor in the quarter, while both women's health and the bladder health and surgery businesses detracted from growth.

Speaker Change: The inpatient channel and surgical wounds were the main contributors to growth.

Speaker Change: This is the largest CARES study to date, with a sample size of more than 250 patients and we look forward to sharing the results very soon.

Speaker Change: Revenue from cashless amounted to 730 million Danish kroner in the first nine months of 269 million Danish kroner in Q3.

Speaker Change: Underlying revenue growth was around 35% in both periods the inpatient channel and surgical wounds were the main contributors to growth.

Speaker Change: Aerospace operating profit margin, excluding PPA amortization was around 10% in both periods in line with our expectations.

Speaker Change: And intervention all urology organic growth was 4% for the first nine months and growth in Danish kroner was 3%.

Speaker Change: In Q3, both organic growth and reported growth in Danish kroner were 2%.

Speaker Change: The men's health business in the U S was the main growth contributor in the quarter, while both women's health and the bladder health and surgery businesses detracted from growth.

Christian Villumsen: The women's health business continued to be impacted by competitive pressure. The bladder health and surgery business was negatively impacted by back orders, which emerged as a result of constraint supply capacity. We are already seeing an improvement in the back order situation here in our fourth quarter, and as a result, we expect growth in interventional urology to return to mid-single digit in Q4. From a geographical perspective, the US was the main growth contributor in Q3.

Speaker Change: The women's health business continued to be impacted by competitive pressure the bladder health and surgery business was negatively impacted by back orders, which emerged as a result of constrained supply capacity.

Speaker Change: We are already seeing an improvement in the back order situation here in our fourth quarter.

Speaker Change: And as a result, we expect growth in interventional urology to return to mid single digit in Q4.

Speaker Change: Kerasys operating profit margin excluding PPA amortization was around 10% in both periods in line with our expectations.

Speaker Change: Okay.

Speaker Change: Whereas if we go back to the period prior to these two acquisitions, it was sort of, comfortably in the range of 67 to 69%, so one to three percentage points higher.

Speaker Change: Before I move on to the details by business area, let me provide a brief update on our newly established distribution center in the U.S. During Q3, Coloplast established a new distribution hub to serve its chronic care, advanced wound dressings and skin care businesses in the U.S. The U.S. is a strategic focus market for us, and given the expansion that Coloplast has experienced in the U.S. over the last years, There was a need to consolidate our distribution operations previously located in two centers. The new setup is expected to drive scale benefits while supporting future growth.

Speaker Change: From a geographical perspective, the U S. What's the main growth contributor in Q3 with this.

Christian Villumsen: With this, I will now hand over to Anders, who will take you through the financials and outlook in more detail. Please now turn to slide number 5.

Speaker Change: I will now hand over to Anders who will take you through the financials and outlook in more detail. Please.

Anders: Please now turn to slide number five.

Anders Lonning: Thank you, Christian, and good morning, everyone. Report a revenue for the first nine months of the year increased by 1.8 billion Danish corner or 10% compared to last year. Organic growth contributed 1.4 billion Danish corner or around 8% to report a revenue.

Anders: It's also resulted in extraordinary costs in the quarter, which are expected to persist into Q4.

Anders: Thank you Christian and good morning, everyone.

Anders: We are working hard on resolving these short-term challenges and we expect to be back to normal operations in the U.S. by the end of Q4.

Revenue for the first nine months of the year increased by 1.8 billion, Danish kroner or 10% compared to last year.

Christian Williamson: Organic growth contributed 1.4 billion Danish kroner or around 8% to reported revenue.

Speaker Change: Our quad revenue from coast acquisition contributed with 730 million things corner to reported revenue in the first nine months of the year.

Anders Lonning: A quiet contribute with 730 million Danish corner to report a revenue in the first nine months of the year, reflecting nine months of impact. A quiet revenue contributed around 4% to report a revenue in the first nine months.

Christian Williamson: Reflecting nine months of impact.

Christian Williamson: Acquired revenue contributor around 4% to reported revenue in the first nine months.

Anders: Anders, can you talk about what's the main delta versus where you were at that time?

Anders Lonning: One exchange rate had a negative impact of 305 million Danish kroner on report a revenue or around 2% related to the depreciation of the US dollar, the Japanese, and their basket of emerging markets, currencies against a Danish kroner, most notably the Argentinian peso. Please turn to slide number 6. Growth profit for the first nine months amounted to 13.6 billion Danish corner, corresponding to a growth margin of 68% compared to 67% last year. The growth margin was positively impacted by the inclusion of carousels, which contribute with around 100 basis points. In addition, favourable development in input cost, price increases, and a baseline benefit of around 40 basis points from the Italian payback reform also had a positive impact on the growth margin.

Christian Williamson: Foreign exchange rates had a negative impact of 305 million Danish kroner, unreported revenue or around 2% related to the depreciation of the U S dollar the Japanese yen and that basket of emerging market currencies against the Danish kroner, most notably the Argentinean peso.

Anders: Thank you.

Anders: And how plausible the pathway back for the, say, old Coloplast, excluding ATOS and Kerasis, is to that gross margin level?

Christian Williamson: Please turn to slide number four.

Christian Williamson: Thank you.

Christian Williamson: Please turn to slide number six.

Christian Williamson: In ostomy care, organic growth was 7% for the first nine months, and growth in Danish corona was 6%.

Christian Williamson: Thank you, Christian.

Christian Williamson: Organic growth in Q3 was 8%, and growth in Danish corona was also 8%.

Christian Williamson: Gross profit for the first nine months amounted to $13 6 billion Danish kroner corresponding to a gross margin of 68% compared to 67% last year.

Christian Williamson: Our Sonsura MU portfolio continues to be the main growth driver, followed by the Bravo range of supporting products, our Censora and Asora Alterna portfolios, also continue to post solid growth in emerging markets.

Christian Williamson: From a geographical perspective, all regions contributed to growth in the quarter with broad-based contribution across emerging markets in Europe driven by the UK.

Christian Williamson: The gross margin was positively impacted by the inclusion of cases, which contributed with around 100 basis points. In addition, favorable development and input cost price increases in our base start benefit of around 40 basis points from the Chilean 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 double digit rate inflation in Hungary and ramp up cost at our manufacturing sites in Costa Rica. The growth margin also included a negative impact from currencies of around 80 basis points.

Christian Williamson: The positive development in the above mentioned factors was partly offset by double digit wage inflation in Hungary, and ramp up costs at our manufacturing sites and Costa Rica.

Christian Williamson: The gross margin also included a negative impact from currencies of around 80 basis points.

Anders Lonning: I would also like to share that here in July we hatched around 70% of the expected electricity consumption in Hungary for 25. At a price of around 100 euros per megawatt hour compared to 150 euros per megawatt hour which is in the price we hatched. , here in 24. Operating expenses for the first nine months amounted to 8.1 billion Danish Corona. They liked for like increase in operating expenses, excluding inorganic impact from carousels, was 383 million Danish Corona or 5% compared to last year, in line with expectations. Carousels contribute with 698 million Danish Corona to operating expenses, of which 77 million Danish Corona were related to the PBA and motivation included under distribution cost.

I'd also like to share that here in July we hedged around 70% of the expected electricity consumption in Hungary for 25 at a price of around hundred euros per hour compared to 150 euros per hour.

Christian Williamson: Our which isn't the price we hitched.

Christian Williamson: Here in the 'twenty four.

Christian Williamson: Operating expenses for the first nine months amounted to <unk> eight.

Christian Williamson: <unk> 8.1 billion things corner.

Christian Williamson: For like increase in operating expenses, excluding inorganic impact from Kocis was 380 free.

Christian Williamson: <unk> corn or 5% compared to last year in line with expectations.

Christian Williamson: Paris is contributor was 698 million Danish kroner to operating expenses of which 77 million Danish kroner were related to the PPA amortization included on the distribution cost.

Anders Lonning: The distribution to sales ratio for the first nine months was 33%, compared to 31% the last year and includes impact from carousels and related PBA and motivation costs, as well as increased level of commercial activities, including activities related to product launches here in Q3.

Christian Williamson: The distribution to sales ratio for the first nine months was three.

Christian Williamson: 3% compared to 31%.

Christian Williamson: Last year and includes the impact from kisses and related PPA amortization costs as well as increased level of commercial activities, including activities related to park launches here in Q3.

Anders Lonning: Distribution cost in Q3 also included extra and extraordinary cost related to the newly established US distribution center. These extra and cost are expected to continue into Q4. The app into sales ratio for the first nine months was 5% on par with the last year, primarily impacted by the inclusion of carousels. The R&D to sales ratio for the first nine months was 3% of sales compared to 4% last year. Overall, this resulted in an increase in operating profit before special items of 7% for the first nine months, corresponding to an EBIT margin before special items of 27% compared to 28% last year.

Christian Williamson: Distribution costs in Q3 also included extra in extraordinary costs related to the newly established U S distribution Center.

Christian Williamson: From a geographical perspective, the U.S. was the main growth contributor in Q3.

Christian Williamson: And the U.S. growth in the quarter improved, however, below our expectations and included impact from the establishment of the new Coloplast Distribution Center that I explained earlier.

Christian Williamson: Continence care organic growth was 8% for the first 9 months and growth in Danish Corona was 6%.

Christian Williamson: In Q3, organic growth was 8% and growth in Danish Kroner was 9%. Growth in the quarter was driven by good momentum in intermittent catheters across the SpeedyCath portfolio and the male Lugia intermittent catheter, which made a strong contribution to growth in our third quarter. A bowel care business also contributed to growth driven by Paristine Plus in Europe as well as the U.S.

Christian Williamson: With geographical perspective, growth was broad-based across regions, led by Europe, especially France and the UK.

Christian Williamson: These extraordinary costs are expected to continue into Q4.

Christian Williamson: Markets where reimbursement has been recently established or improved, such as Poland, continue to perform well and grew double digit.

Christian Williamson: The admin to sales ratio for the first nine months was 5% on par with last year.

Christian Williamson: Primarily impacted by the inclusion of courses.

The antitrust sales ratio for the first nine months was 3% of sales compared to 4% last year.

Well this was solid and an increase in operating profit before special items of 7% for the first nine months corresponding to an EBIT margin before special items of 27% compared to 28% last year.

Ladies and gentlemen, welcome to the Coloplast 9 Month 2023-24 earnings release conference call.

Shari: Ladies and gentlemen, welcome to the Coloplast 9 Month 2023-24 earnings release conference call. I am Shari, the Curlschool Operator. I would like to remind you that all participants will be listening on the mode and the conference is being recorded.

Anders Lonning: The EBIT margin in the first nine months included a negative impact of around 100 basis points from the inclusion of carousels, including the PPA and motivation costs. Currencies also had a negative impact on the reported EBIT margin of around 100 basis points, mostly related to the depreciation of the US dollar and the basket of emerging market currencies against the Danish krone, as well as the appreciation of the Hungarian forint against the Danish krone. Financial items in the first nine months were at expense of 621 million Danish corner compared to a net expense of 628 million Danish corner last year, during mostly by interest expenses related to the financing of the access medical acquisition.

Christian Williamson: The EBIT margin in the first nine months included negative impact of around 100 basis points from the inclusion of keratosis, including the P. P. A M. A C section cost.

Speaker Change: I am Shari, the Curlschool Operator.

Speaker Change: I would like to remind you that all participants will be listening on the mode and the conference is being recorded.

Christian Williamson: Parents, whose also had a negative impact on the reported EBIT margin of around 200 basis points, mostly related to the depreciation of the U S dollar and a basket of emerging market currencies against the Danish kroner.

Speaker Change: The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone.

Shari: The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero.

Speaker Change: For operator assistance, please press star and zero.

Christian Williamson: As well as the appreciation of the Hungarian forint against the things cool.

Speaker Change: The conference must not be recorded for publication or broadcast.

Shari: The conference must not be recorded for publication or broadcast.

Christian Williamson: Financial items in the first nine months, we're at a net expense of 621 million Danish kroner compared to a net expense of 628 million things corner last year.

Speaker Change: At this time, it's my pleasure to hand over to Christian Villumsen, president and CEO.

Shari: At this time, it's my pleasure to hand over to Christian Villumsen, president and CEO. Please go ahead. Thank you very much, operator.

Speaker Change: Please go ahead.

Speaker Change: Thank you very much, operator.

Speaker Change: Good morning, everybody.

Christian Villumsen: Good morning, everybody. And welcome to our 9 Months 23-24 conference call. I'm Christian Villumsen, the CEO of Coloplast, and I'm joined by our CFO, I'm us learning Skogor and our investor relations team. We'll start with a short presentation. I'm joined by Anderson, myself, and then open up for questions like we usually do. Please turn to slide number three. We delivered 8% organic growth and a reported EBIT margin before special items of 27% in our third quarter.

Christian Villumsen: And welcome to our 9 Months 23-24 conference call.

Christian Williamson: Driven mostly by interest expenses related to the financing of the excess medical acquisition.

Christian Villumsen: I'm Christian Villumsen, the CEO of Coloplast, and I'm joined by our CFO, I'm us learning Skogor and our investor relations team.

Anders Lonning: The tax expense in the first nine months was 1 billion Danish corner, with a tax rate of 22% compared to a tax rate of 21% last year. As a result, net profit before special items for the first nine months of the year increased by 7% compared to last year. Diluted earnings per share before special items increased by 1% to 16.87 Danish kroner and include impact from the equity rates in August 23.

Christian Williamson: The tax expense in the first nine months was 1 billion Danish kroner with a tax rate of 22% compared to a tax rate of 21% last year.

Christian Villumsen: We'll start with a short presentation.

Christian Villumsen: I'm joined by Anderson, myself, and then open up for questions like we usually do.

Christian Williamson: As a result net profit before special items for the first nine months of the year increased by 7% compared to last year.

Speaker Change: Please turn to slide number three.

Speaker Change: We delivered 8% organic growth and a reported EBIT margin before special items of 27% in our third quarter.

Christian Williamson: Diluted earnings per share before special items increased by 1% to 16 point.

Speaker Change: We turn on invested capital after taxing before special items was 15% reflecting impact from the acquisition of CARESUS.

Christian Villumsen: We turn on invested capital after taxing before special items was 15% reflecting impact from the acquisition of CARESUS. I'm satisfied with our performance. We continue to broadly outgrow the market, and we're delivering solid growth in absolute profits. More importantly, we also continue to help a lot more people who live with inanimate healthcare needs.

Speaker Change: 87 things Kona and include impact from the equity raise in August 23.

Anders Lonning: Please turn to slide 7. Operating cash flow for the first nine months was an inflow of 718 million Danish kroner compared to an inflow of 2.3 billion Danish kroner last year. The development in cash flows was driven by a higher income tax paid in the second quarter related to the access medical intellectual property transfer, with a negative impact of 2.5 billion Danish corner. The tax payment will be offset by reduced tax payments in the following years starting Lentilier. The tax payment was also partly offset by an increase in operating profit and an improvement in changes in working capital.

Speaker Change: I'm satisfied with our performance.

Speaker Change: Please turn to slide seven.

Speaker Change: We continue to broadly outgrow the market, and we're delivering solid growth in absolute profits.

Speaker Change: Operating cash flow for the first nine months was an inflow of 718 million Danish kroner compared to an inflow of $2 3 billion Danish corner last year.

Speaker Change: More importantly, we also continue to help a lot more people who live with inanimate healthcare needs.

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

Speaker Change: Let me start today's call with a few highlights.

Christian Villumsen: Let me start today's call with a few highlights. First, innovation. This is a year with several significant product launches that will support growth off during strive 25, but also beyond the strategic period. One of these products is Luja, a new inanimate catheter with micro-hole zone technology. Luja, we're setting a new standard in inanimate catheterization with a unique technology that enables full bladder emptying in one free flow, and therefore addressing key risk factors related to urinary tract infections.

Speaker Change: First, innovation.

Speaker Change: This is a year with several significant product launches that will support growth off during strive 25, but also beyond the strategic period.

Speaker Change: And things going on.

Speaker Change: The tax payment will be offset by reduced tax payments in the following years starting from this financial year.

Speaker Change: One of these products is Luja, a new inanimate catheter with micro-hole zone technology. Luja, we're setting a new standard in inanimate catheterization with a unique technology that enables full bladder emptying in one free flow, and therefore addressing key risk factors related to urinary tract infections.

Speaker Change: The tax payment was also.

Speaker Change: Partly offset by an increase in operating profit and an improvement and changes in working capital.

Anders Lonning: Caslow from investing activities was an outflow of 904 million Danish loaner compared to an outflow of 655 million Danish loaner last year. Capix in the first 9 months amounted to around 5% of sales on power last year. As a result, the free Caslow for the first 9 months was an outflow of 186 million Danish loaner compared to an inflow of 1.7 billion Danish loaner. Excluding impact from the extraordinary tax payment of 2.5 billion Danish loaner, they adjusted free Caslow in the first 9 months of 2324 was an inflow of 2.3 billion Danish loaner. The trading 12 months cas conversion was 82%.

Speaker Change: Castro from investing activities was an outflow of 904 million Danish kroner compared to an outflow of 600.

Speaker Change: 55 million Danish kroner last year.

Speaker Change: We are already seeing significant contribution to maintenance care growth from the male Luja catheter, which is available to users in now 13 markets.

Christian Villumsen: We are already seeing significant contribution to maintenance care growth from the male Luja catheter, which is available to users in now 13 markets. The launch of the female catheter is ongoing, and the product is currently available in four markets where it's received very positive customer feedback. Another important highlight relevant for our U.S, intermittent catheters business is the publication of a final coding decision for intermittent urinary catheters by the CMS late last week.

Speaker Change: And the first nine months amounted to around 5% of sales on par with last year.

Speaker Change: As a result, the free cash flow for the first nine months. It was an outflow of one of an 86 million Danish kroner compared to an inflow of $1 7 billion things corner.

Speaker Change: The launch of the female catheter is ongoing, and the product is currently available in four markets where it's received very positive customer feedback.

Speaker Change: Excluding impact from the extraordinary tax payment of $2 5 billion Danish kroner, the adjusted free cash flow in the first nine months of 'twenty three 'twenty four it was an inflow of $2 3 billion Danish kroner.

Speaker Change: Another important highlight relevant for our U.S, intermittent catheters business is the publication of a final coding decision for intermittent urinary catheters by the CMS late last week. With this final decision, the existing coding structure for intermittent catheters in the U.S, is updated to include three new codes and with that differentiate between hydrophilic and non-hydrophilic catheters.

Christian Villumsen: With this final decision, the existing coding structure for intermittent catheters in the U.S, is updated to include three new codes and with that differentiate between hydrophilic and non-hydrophilic catheters. The new coding structure will be implemented as of January 1, 2026. Let me remind you that under the existing coding setup, both hydrophilic and older generations of catheters are covered by the same codes, which means that patients don't always get access to the latest technology, despite there being good evidence that hydrophilic catheters lead to better clinical outcomes.

Speaker Change: The trailing 12 months cash conversion was 82%.

Anders Lonning: Networking capital amounted to around 27% of sales compared to 26% last year. Impacted by timing and country sales mix.

Speaker Change: Net working capital amounted to around 27% of sales compared to 26% last year.

Impacted by timing and country sales mix.

Anders Lonning: We now expect the networking capital to be around 26 for this financial year. The long term expectation of networking capital to sales ratio of around 24% has still unchanged.

Speaker Change: I expect the net working capital to be around 26 for this financial year. The long term expectation of net working capital to sales ratio of around 24% is still unchanged.

Speaker Change: The new coding structure will be implemented as of January 1, 2026.

Speaker Change: Let me remind you that under the existing coding setup, both hydrophilic and older generations of catheters are covered by the same codes, which means that patients don't always get access to the latest technology, despite there being good evidence that hydrophilic catheters lead to better clinical outcomes.

Anders Lonning: At the same time, we also adjusted the full year 2324 guidance on Capix, now expected around 1.3 billion Danish loaner, from previously around 1.4 billion Danish loaner.

Speaker Change: At the same time, we also adjusted the full year 'twenty three 'twenty four guys.

Speaker Change: Guidance on Capex now expected around 1.3 billion things corner from previously around one 4 billion things corner.

Christian Williamson: With this, I will now hand over to Anders who will take you through the financials and outlook in more detail.

Christian Williamson: Two really good questions.

Anders Lonning: Now let's look at the financial guidance for the year. Please turn to slide 8. Our financial guidance for 2324 financial year is largely unchanged. We are attracted to the liver good year with growth above the market and the significant growth in absolute profit. The organic revenue growth for the year is still expected around 8%, and the underlying assumptions on the performance by business area and geographies are unchanged. Our report revenue growth in Danish loaner is still expected to be between 10 and 11% and continues to assume around 4% is points contribution from carriages and between 1% to 2% percentage points negative impact from currencies.

Speaker Change: Now, let's look at the financial guidance for the year, Please turn to slide eight.

Speaker Change: We consider this change first and foremost to be a win for patients. Patients will now be guaranteed access to hydrophilic catheters.

Christian Villumsen: We consider this change first and foremost to be a win for patients. Patients will now be guaranteed access to hydrophilic catheters. We also consider it to be a win for innovation. Coloplast has been on the forefront of upgrading the U.S, intermittent catheters market toward hydrophilic technology for many years, and today more than 70% of our U.S, intermittent catheter sales come from hydrophilic catheters. Still, many more patients remain that should have access to better technology, and we will continue to focus on upgrading the market both to hydrophilic catheters, and of course also to our micro-holzone technology which sets a new standard in intermittent catheterization.

Speaker Change: Our financial guidance for 224 financial year, it's largely unchanged. We are on track to deliver a good year with growth above the market and the significant growth in absolute profit.

Coloplast representative: We also consider it to be a win for innovation. Coloplast has been on the forefront of upgrading the U.S, intermittent catheters market toward hydrophilic technology for many years, and today more than 70% of our U.S, intermittent catheter sales come from hydrophilic catheters.

Speaker Change: The organic revenue growth for the year is still expected around 8% and the underlying assumptions on the performance by business area and geographies are unchanged.

Speaker Change: Still, many more patients remain that should have access to better technology, and we will continue to focus on upgrading the market both to hydrophilic catheters, and of course also to our micro-holzone technology which sets a new standard in intermittent catheterization.

Speaker Change: Our reported revenue growth in Danish krone is still expected to be between 10, and 11% and continues to assume around four percentage points of contribution from kocis and between 1% to 2%.

Speaker Change: Percentage points negative impact from currencies.

Speaker Change: We continue to expect the reported EBIT margin before special items of 27% to 28% with unchanged underlying assumptions of our gross margin of around 68%.

Speaker Change: Next, I'd like to turn to Kerasus.

Christian Villumsen: Next, I'd like to turn to Kerasus. The business continues to grow at a strong double-digit growth rate of around 35% and continues to take market share in the biological segment of the advancement care market performance and integration are both on track. So far, there's been limited impact on sales and operations from the draft local coverage determination policy announced earlier this year where Kerasus was not included on the draft list of covered products.

Speaker Change: Prudent management of operating expenses and the negative impact from kids this of around 100 basis points, including.

Speaker Change: The business continues to grow at a strong double-digit growth rate of around 35% and continues to take market share in the biological segment of the advancement care market performance and integration are both on track.

Speaker Change: Around 100 million Danish kroner in amortization charges.

Speaker Change: I now expect negative impact from currencies of around 70 basis points from previously around 50 basis points.

Speaker Change: So far, there's been limited impact on sales and operations from the draft local coverage determination policy announced earlier this year where Kerasus was not included on the draft list of covered products. As part of the LCD consultation period in June, we submitted comprehensive documentation to support Kerasus in getting back on the list of covered products.

Anders Lonning: For 2324, I expect around 80 million Danish loaner in space items related to the ongoing integration of assets. The net financial expenses for 2324 I now expect around minus 850 million Danish loaner impacted by interest expenses. No changes to our assumptions on effective tax rates expected at around 22%.

Speaker Change: Turning to free trade for I expect around 80 million Danish krone, and special items related to the ongoing integration of axis.

Speaker Change: Our position is unchanged.

Christian Villumsen: As part of the LCD consultation period in June, we submitted comprehensive documentation to support Kerasus in getting back on the list of covered products. Our position is unchanged. We welcome the introduction of a clinical qualification for obtaining coverage, and we perceive it as a positive development which will benefit patients. We continue to strongly believe that we have the right clinical evidence to prove the strength of Kerasus fishkin and to get us back on the covered list.

Speaker Change: The net financial expenses for 'twenty three 'twenty four I now expect around minus 850 million Danish kroner impacted by our interest expenses.

Speaker Change: No changes to our assumptions on effective tax rates expected at around 22%.

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

Unknown Executive: Thank you very much, Operator. We are now ready to take questions. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touch-tone telephone. You will hear a tone to confirm that has entered the queue. If you wish to move yourself on the question queue, you may press star and two. Anyone has a question or a press star and one at this time?

Christian Williamson: Please now turn to slide number 5.

Christian Williamson: Yeah, so I think the reason that the CMS has put in place now an implementation period, for Gen 1 2026 is that they recognize that the change here in coding will affect a lot of commercial payers also.

Speaker Change: Thank you very much operate them, you're not ready to take questions.

Speaker Change: We continue to strongly believe that we have the right clinical evidence to prove the strength of Kerasus fishkin and to get us back on the covered list.

Christian Williamson: Foreign exchange rates had a negative impact of 305 million Danish Kroner on reported revenue or around 2% related to the depreciation of the U.S. Dollar, the Japanese Yen and a basket of emerging market currencies against the Danish Kroner, most notably the Argentinian Peso.

Christian Williamson: I don't have at this stage an indication that we're going to be looking at a different fee, schedule.

Speaker Change: We will now begin the question and answer session anyone who wishes to ask a question press star and one on the touch tone telephone you would hit attuned to confirm this event to the queue.

Christian Williamson: Please turn to slide number 6.

Christian Williamson: Of course, I'd welcome that, but I don't have an indication that that will happen.

Christian Williamson: Gross profit for the first 9 months amounted to 13.6 billion Danish Kroner corresponding to a gross margin of 68% compared to 67% last year. The gross margin was positively impacted by the inclusion of carers which contributed with around 100 basis points.

Christian Williamson: In addition, variable development in input 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. The positive development in the above mentioned factors was partly offset by double-digit wage inflation in Hungary and ramp-up costs at our manufacturing sites in Costa Rica.

Christian Williamson: The gross margin also included negative impact from currencies of around 80 basis points.

Speaker Change: We continue also to expect that final LCD policy to be announced sometime in the second half of 2024.

Christian Villumsen: We continue also to expect that final LCD policy to be announced sometime in the second half of 2024. At the same time, we also continue to develop additional clinical evidence on Kerasus. A new randomized controlled clinical study, comparing the performance of Kerasus fishkin to standard care in the treatment of complex diabetic foot ulcers, is pending publication.

Christian Williamson: I would also like to share that here in July we hedged around 70% of the expected electricity consumption in Hungary for 2025 at a price of around 100 Euros per megawatt-hour compared to 150 Euros per megawatt-hour which is in the price we hedged last year.

Christian Williamson: In fact, the CMS document quite explicitly says that there's no change to the fee schedule.

Speaker Change: If you wish to remove yourself from the question queue, you May press star two.

Speaker Change: At the same time, we also continue to develop additional clinical evidence on Kerasus.

Speaker Change: Anyone has a question of press star and one at this time.

Speaker Change: A new randomized controlled clinical study, comparing the performance of Kerasus fishkin to standard care in the treatment of complex diabetic foot ulcers, is pending publication. This is the largest Kerasus study to date with the sample size of more than 250 patients, and we look forward to sharing the results very soon.

Jack Reynolds: The first question comes from the line of Jack Reynolds, RBC Captain Markets. Please go ahead.

Speaker Change: The first question comes from the line of check My notes RBC capital markets. Please go ahead.

Christian Williamson: The next question comes from the line of Veronica Dubajowa from Citi.

Christian Williamson: Please go ahead.

Christian Williamson: Hi, guys.

Jack Reynolds: Hi there, thank you for taking the questions. I had three, please. The first is on commercial costs. So I'm just wondering where these are focused.

Speaker Change: Hi, there thanks for taking the questions I had three please the first is on commercial costs. So I was wondering where these are focused where they really focused on the needs of women.

Christian Villumsen: This is the largest Kerasus study to date with the sample size of more than 250 patients, and we look forward to sharing the results very soon.

Jack Reynolds: Were they focused on loser women or other products, and were they higher than expected, and how do you expect these costs to progress through Q4?

Speaker Change: Before I move on to the details by business area, let me provide a brief update on our newly established distribution center in the U.S. During Q3, a coal plus established a new distribution hub to serve its chronic care, advanced wound dressing, and skin care businesses in the U.S. The U.S, is a strategic focus market for us, and given the expansion that coal plus has experienced in the U.S, over the last years, there was a need to consolidate our distribution operations previously located in two centers. The new setup is expected to drive scale benefits while supporting future growth.

Christian Villumsen: Before I move on to the details by business area, let me provide a brief update on our newly established distribution center in the U.S. During Q3, a coal plus established a new distribution hub to serve its chronic care, advanced wound dressing, and skin care businesses in the U.S. The U.S, is a strategic focus market for us, and given the expansion that coal plus has experienced in the U.S, over the last years, there was a need to consolidate our distribution operations previously located in two centers.

Speaker Change: The products with a higher than expected and kind of how do you expect these costs to progress through Q4.

Jack Reynolds: The next question was on the distribution centre. Could you indicate the rough size of the cost headwind here and how much do you expect these costs to continue in Q4? And then, of course, whether you expect a rebound in the kind of lost chronic care revenues once these issues are sorted.

Speaker Change: The next question was on the distribution center and could you indicate the rough size of the cost headwinds here how much do you expect these costs to continue in Q4.

Speaker Change: This new setup has, however, resulted in short-term supply disruption during Q3, mostly impacting the chronic care business, and it has detracted around 20 base points from the group's organic growth in the quarter. It's also resulted in extraordinary costs in the quarter which are expected to persist into Q4. We are working hard on resolving these short-term challenges, and we expect to be back to normal operations in the U.S, by the end of Q4.

Christian Villumsen: The new setup is expected to drive scale benefits while supporting future growth. This new setup has, however, resulted in short-term supply disruption during Q3, mostly impacting the chronic care business, and it has detracted around 20 base points from the group's organic growth in the quarter. It's also resulted in extraordinary costs in the quarter which are expected to persist into Q4. We are working hard on resolving these short-term challenges, and we expect to be back to normal operations in the U.S, by the end of Q4.

And then of course, whether you expect a rebound in kind of a lost coordinate care revenues once these issues assorted.

Jack Reynolds: And then the third question is on guidance. So, given the higher costs in Q3, do you think that the low end of the margin guidance feels realistic? Thank you.

Speaker Change: It's good question is on guidance, so given the high costs in Q3.

Speaker Change: Do you think that the low end of the margin guidance Ah stay with food.

Speaker Change: Realistic thank you.

Christian Williamson: Operating expenses for the first nine months amounted to 8.1 billion Danish Kroner. The like-for-like increase in operating expenses, excluding inorganic impact from kerosene, was, 383 million Danish Kroner, or 5% compared to last year, in line with expectations. Kerosene contributed 698 million Danish Kroner to operating expenses, of which 77 million, Danish Kroner were related to the PPA amortization included on the distribution cost.

Christian Villumsen: Yeah, so thank you for the questions. Let me dive into it. So our operating expenses for the third quarter, yes, we invested quite a bit into commercial activities to launch our products, and that was also included in Q3. And it's a bit more than we also included in the first half of the year. On top of that, as we have talked about, we have also included costs related to the new distribution centre in the US. So in the quarter we included something around extra 15 million, and we are now expecting it would be around 50 million for the year.

Speaker Change: Yeah. So.

Speaker Change: Thank you for the questions, let me dive into it so our operating expenses for the third quarter.

Christian Williamson: The distribution to sales ratio for the first nine months was 33%, compared to 31% last, year, and includes impact from kerosene and related PPA amortization costs, as well as increased level of commercial activities, including activities related to product launches here in Q3.

Speaker Change: Yes, we invested quite a bit into our commercial activities to launch our products and and that was also included in Q3 and it it's a bit more than that we also included in the first half of the year.

Speaker Change: In the U.S., growth in the quarter was impacted by the establishment of the new Coloplast Distribution Center.

Speaker Change: On top of that as we have talked about we have also included costs related to the new distribution center in the U S. So in the quarter. We included something around the extra 15 million and we are now expecting it would be around 50 million for the year and so it will increase too.

Speaker Change: Distribution costs in Q3 also included extraordinary costs related to the newly established U.S. Distribution Center. These extraordinary costs are expected to continue into Q4.

Speaker Change: The admin to sales ratio for the first nine months was 5%, on par with last year, primarily, impacted by the inclusion of kerosene.

Speaker Change: Dr. Oliver, Dr. Al, Oliver Metzgerjonsson, Dr. Oliver Metzger, Dr. Oliver Metzgerjonsson, Dr. Oliver Metzgerjonsson, Dr. Oliver Metzgerjonsson, Dr. Oliver Metzgerjonsson, Dr. Oliver Metzgerjonsson, Dr. Oliver Metzgerjonsson, Dr. Oliver Metzgerjonsson, Dr. Oliver Metzgerjonsson, Dr. Oliver Metzgerjonsson,[inaudible] Oliver Metzgerjonsson, Dr Oliver Metzgerjonsson, Dr. Oliver Metzgerjonsson, Dr. Oliver Metzgerjonsson,[inaudible] Revenue from Kerasis amounted to 230 million Danish corner in the first nine months and 269 million Danish corner in Q3.

Christian Villumsen: Dr. Oliver, Dr. Al, Oliver Metzgerjonsson, Dr. Oliver Metzger, Dr. Oliver Metzgerjonsson, Dr. Oliver Metzgerjonsson, Dr. Oliver Metzgerjonsson, Dr. Oliver Metzgerjonsson, Dr. Oliver Metzgerjonsson, Dr. Oliver Metzgerjonsson, Dr. Oliver Metzgerjonsson, Dr. Oliver Metzgerjonsson, Dr. Oliver Metzgerjonsson,[inaudible] Oliver Metzgerjonsson, Dr Oliver Metzgerjonsson, Dr. Oliver Metzgerjonsson, Dr. Oliver Metzgerjonsson,[inaudible] Revenue from Kerasis amounted to 230 million Danish corner in the first nine months and 269 million Danish corner in Q3. The underlying revenue growth was around 35% in both periods.

Speaker Change: The R&D to sales ratio for the first nine months was 3% of sales, compared to 4% last, year.

Christian Villumsen: So it will increase to around 35 extra in Q4. In terms of our guidance, so we are expecting to deliver within our guidance for the year, the level of 27 to 28% on the EBIT margin and delivering an organic growth of around 8%. So that's what we are going to deliver.

Speaker Change: Around 35 extra in Q4.

Speaker Change: Voice and Respiratory Care posted 10% organic growth for the first nine months, with growth in Danish Corona of 8%.

Speaker Change: And in terms of our guidance. So we are expecting to deliver within our guidance for the year.

Speaker Change: In Q3, organic growth was 11% and growth in Danish corn was 9%.

Speaker Change: Supported revenue includes negative impact from product rationalization of 1% in the first 9 months of the year and 2%, and Q3.

Speaker Change: I am very satisfied with this performance, which continues to be at the upper end of our guidance range for voice and respiratory care, and it's driven by broad-based contributions from both laryngectomy and tracheostomy. Growth in laryngectomy in Q3 was high single digit driven by an increase in the number of patients served in both existing and new markets, as well as an increase in patient value which is driven by the Provox Life portfolio.

Speaker Change: Growth and tracheostomy in the quarter was double-digit, 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 as solid contribution from the U.S.

Speaker Change: In advanced wound care, organic growth was 10% for the first nine months, and growth in Danish corona was 42%.

Speaker Change: Overall, this resulted in an increase in operating profit before special items of 7% for the, first nine months, corresponding to an EBIT margin before special items of 27%, compared to 28% last year. The EBIT margin in the first nine months included negative impact of around 100 basis points, from the inclusion of kerosene, including the PPA amortization costs.

Speaker Change: Organic growth in Q3 was 13% and growth in Danish kroner was 51%. Reported growth for the period includes impact from the acquisition of kerosene. The Advanced Wound Dressings business grew 10% organically in the first nine months and Q3 organic growth in Advanced Wound Dressings was, 13% which includes benefit from a lower baseline last year and from order facing in Germany.

Speaker Change: Currencies also had a negative impact on the reported EBIT margin of around 100 basis points, mostly related to the depreciation of the U.S. dollar and a basket of emerging market currencies against the Danish kroner, as well as the appreciation of the Hungarian for rent against the Danish kroner.

Speaker Change: Level of 27% to 28% on the EBIT margin and delivering an organic growth of around 8% or so.

Speaker Change: From a product perspective, the Biotene Silicone Portfolio was the main growth contributor, while from a geographical perspective, growth was driven by Europe, especially Germany, as well as a solid contribution from the major markets.

Speaker Change: Financial items in the first nine months were at a net expense of 621 million Danish kroner, compared to a net expense of 628 million Danish kroner last year, driven mostly by interest expenses related to the financing of the ATSOS medical acquisition.

Speaker Change: Revenue from CARES has amounted to 730 million Danish kroner in the first nine months and 269 million Danish kroner in Q3.

Speaker Change: The tax expense in the first nine months was 1 billion Danish kroner, with a tax rate of, 22%, compared to a tax rate of 21% last year. As a result, net profit before special items for the first nine months of the year increased, by 7%, compared to last year.

Speaker Change: The underlying revenue growth was around 35% in both periods. The inpatient channel and surgical wounds were the main contributors to growth.

Speaker Change: Diluted earnings per share before special items increased by 1% to 16.87 Danish kroner, and include impact from the equity raise in August 23.

Speaker Change: Please turn to slide 7.

Speaker Change: Operating cash flow for the first nine months was an inflow of 718 million Danish kroner, compared to an inflow of 2.3 billion Danish kroner last year.

Speaker Change: Keras' operating profit margin excluding PPA amortization was around 10% in both periods, in line with our expectations.

So that's our that's what we are going to deliver.

Speaker Change: 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 Danish kroner. The tax payment will be offset by reduced tax payments in the following years, starting, from this financial year. The tax payment was also partly offset by an increase in operating profit and an improvement in changes in working capital.

Speaker Change: In interventional urology, organic growth was 4% for the first nine months and growth in Danish coroner was 3%.

Speaker Change: Cash flow from investing activities was an outflow of 904 million Danish Kroner compared to an outflow of 655 million Danish Kroner last year.

Speaker Change: In Q3, both organic growth and reported growth in Danish kroner were 2%.

Speaker Change: Capex in the first nine months amounted to around 5% of sales on par with last year.

Speaker Change: The men's health business in the U.S. was the main growth contributor in the quarter while both women's health and the bladder health and surgery businesses detracted from growth.

Speaker Change: As a result, the free cash flow for the first nine months was an outflow of 186 million Danish Kroner compared to an inflow of 1.7 billion Danish Kroner. Excluding impact from the extraordinary tax payment of 2.5 billion Danish Kroner, the adjusted free cash flow in the first nine months of 2023-2024 was an inflow of 2.3 billion Danish Kroner.

Speaker Change: The women's health business continued to be impacted by competitive pressure.

Speaker Change: The trading 12-month cash conversion was 82%.

Speaker Change: The bladder health and surgery business was negatively impacted by back orders, which emerged as a result of constrained supplier capacity.

Speaker Change: Networking capital amounted to around 27% of sales compared to 26% last year, impacted by timing and country sales mix. We now expect the networking capital to be around 26% for this financial year.

Christian Villumsen: Okay, so let's follow up on the U.S. chronic care. So I'm expecting a rebound in sales once it is exhausted. So what we've said previously was chronic care US is now in the second half of the year going to be sitting at around high single digit from previously around double digit.

Speaker Change: We're already seeing an improvement in the backorder situation here in our fourth quarter and as a result we expect growth in interventional urology to return to mid-single digit in Q4.

Okay fair enough I'll follow up on the.

Speaker Change: From a geographical perspective, the U.S. was the main growth contributor in Q3.

Speaker Change: U S chronic care and you're expecting a rebound in sales positions.

Speaker Change: Got it.

Speaker Change: Yeah. So what we what we've said previously it was chronic care U S. Ah Ah is now in the second half of the year going to be sitting at around high single digit from previously around double digit.

Speaker Change: Okay, great. Thank you.

Maja Pataki: The next question comes from the line of Antelbehrma JP Morgan. Please go ahead.

Speaker Change: The next question comes from the line of Tyler The Hammer J P. Morgan. Please go ahead.

Speaker Change: The long-term expectation of networking capital to sales ratio of around 24% are still unchanged. At the same time, we also adjusted the full year 2023-2024 guidance on Capex, now expected around 1.3 billion Danish Kroner from previously around 1.4 billion Danish Kroner.

Speaker Change: Good morning.

Speaker Change: So if that happens, it will be, of course, a welcome development on our part either through, an increase in hydrophilic reimbursement or, if you will, a decrease in non-coded.

Maja Pataki: Hi, good morning. I have two questions, please. The first one is on the CMS decision for new codes for hydrophilic catheters. The fee schedule remains unchanged. I was wondering were you expecting to achieve some premium pricing?

Speaker Change: Hi, Good morning, I have two questions. Please the first one is on the CMS decision for new codes for hydrophilic catheters.

Speaker Change: Schedule remains unchanged and I was wondering what are you expecting to achieve some premium pricing and if so are there any reasons why CMS hasn't all forget pricing benefit.

Maja Pataki: And if so, or any reasons why CMS hasn't offered a pricing benefit, so it's very to assume the tailwind will come from easy prescription and hence a potential volume uplift.

So is it fair to assume that tailwind will come from Egypt prescription in hands of potential volume uplift.

Maja Pataki: And then the second question would just be a bit more around your cost structure for next year, please. Can you provide some more color on the magnitude of improvements around COG's inflation you've seen thus far? And how should we be thinking about it going into next year? Are there any offsets we need to be mindful of?

Speaker Change: And then the second question would just be a bit more around them.

Speaker Change: Our cost structure for next year piece can you provide some more color on the magnitude of improvement around Cogs inflation, you've seen thus far and how should we be thinking about it going into next year are there any offsets we need to be mindful of.

Speaker Change: Now let's look at the financial guidance for the year.

Speaker Change: And thank you for taking my questions.

Maja Pataki: Thank you for those.

Speaker Change: I will now hand over to Anders who will take you through the financials and Outlook in more detail.

Speaker Change: Thank you for those let me let me speak to the CMS decision and then Andrew can speak to your question on.

Christian Villumsen: Let me speak to the CMS decision, and then Anders can speak to your question on COGS. So, we were really not expecting a change in the fee schedule. Of course, had there been, had there been a change, that would have been a double good news, but the draft didn't propose a change in fee schedule. So, for us really, the big news here is that CMS finally recognizes that technology matters, and this is just really good news for patients. It's really good news for anyone who cares about innovation. And if you look at the, if you look at the fee schedule, it didn't make that distinction.

Speaker Change: Please turn to slide 8.

Speaker Change: I have three, please.

Speaker Change: Our financial guidance for 2023-2024 financial year is largely unchanged. We are on track to deliver a good year, with growth above the market and a significant growth in absolute profit. The organic revenue growth for the year is still expected around 8%, and the underlying assumptions on the performance by business area and geographies are unchanged. Our reported revenue growth in Danish Kroner is still expected to be between 10-11%, and continues to assume around 4% contribution from currencies and between 1-2% negative impact from currencies.

Speaker Change: We continue to expect a reported EBIT margin before special items of 27-28%, with unchanged underlying assumptions of a gross margin of around 68%. Improved management of operating expenses and a negative impact from currencies of around 100 basis points, including around 100 million Danish Kroner in amortization charges. I now expect negative impact from currencies of around 70 basis points from previously around 50 basis points.

Andrew: On Cogs.

Speaker Change: For 2023-2024 I expect around 80 million Danish Kroner in special items related to the ongoing integration of assets.

Speaker Change: The net financial expenses for 2023-2024 I now expect around minus 850 million Danish Kroner impacted by interest expenses.

Andrew: So.

Speaker Change: No changes to our assumptions on effective tax rates expected at around 22%.

Andrew: Please now turn to slide number five.

Andrew: Yep.

Andrew: We're really not expecting a change in the fee schedule of course had there been had there been a change that would that would've been a you know double double good news, but the the draft didn't propose a a a change in fee schedule. So for so for us really the the big news here is that our CMS.

Andrew: Thank you very much operator, we are now ready to take questions.

Andrew: Thank you, Christian, and good morning, everyone.

Andrew: Reported revenue for the first 9 months of the year increased by 1.8 billion Danish Kroner, or 10% compared to last year. Organic growth contributed 1.4 billion Danish Kroner or around 8% to reported revenues.

Andrew: Required revenue from Kerosys acquisition contributed with 730 million Danish Kroner to reported revenue in the first nine months of the year.

Andrew: Supported revenue in the first nine months. Foreign exchange rates had a negative impact of 305 million Danish kroner on reported revenue, or around 2%, related to the depreciation of the US dollar, the Japanese yen, and a basket of emerging market currencies against the Danish kroner, most notably the Argentinian peso.

Andrew: We will now begin the question and answer session.

Andrew: I think the rational system, of course, would pay more for modern technology than it would, for old technology.

Andrew: It's finally recognizes.

Andrew: Please turn to slide number 6.

Andrew: That a technology the technology matters and that this is this is just really good news for patients. It's really good news for anyone who cares about innovation.

Andrew: Gross profit for the first nine months amounted to 13.6 billion Danish Kroner, corresponding to a gross margin of 68% compared to 67% last year. The Gross Margin was positively impacted by the inclusion of kerosene, which contributed with around 100 bases. In addition, variable development in input costs, pricing.., and a baseline benefit of around 40 basis points from the Italian payback reform also had a positive impact on the gross margin. The positive development in the above-mentioned factors was partly offset by double-digit wage inflation in Hungary and ramp-up costs at our manufacturing sites in Costa Rica.

Andrew: The Gross Margin also included negative impact from currencies of around 80 basis points.

Andrew: Anyone who wishes to ask a question may press star and 1 on their touch-tone telephone. You will hear a tone to confirm that you have entered the queue.

Andrew: If you wish to remove yourself from the question queue, you may press star and 2.

Andrew: Anyone who has a question may press star and run at this time.

Andrew: And if you if you look at the if you look back since reimbursement was established for intermittent catheter in the U S. A the fee schedule didn't make that distinction.

Andrew: The first question comes from the line of Jack Reynolds, RBC Capital Markets.

Andrew: Our view has always been, Christian, that the current reimbursement levels were adequate, to support modern technology and that the perversity of the U.S. system was that it didn't distinguish between modern and old technology.

Andrew: Please, go ahead.

Andrew: And that comes in now, and that, I think, is also what will drive the change, that it, will be significantly more challenging to drive this switching behavior.

Andrew: Hi there.

Andrew: Thank you for taking the questions.

Andrew: I had three, please.

Andrew: The first is on commercial, costs.

Andrew: But, of course, this assumes that we can educate the market, physicians, and consumers still.

Andrew: So I'm just wondering where these are focused.

Andrew: Were they focused on loser women or other products?

Christian Villumsen: And so, you've had really what I'd call a perversity in the US market where a lot of players were incentivized to basically offer patients all technology that we would see in third world countries. And this decision is a chance to change that. So, it rewards innovation, and it rewards companies that are concerned with that and not companies that are concerned with and preoccupied with selling cheap products.

Andrew: And were they higher than expected?

Speaker Change: And so you've had you've.

Speaker Change: You've had really what I'd call up diversity in the U S market where.

Andrew: Yeah, and Chris, let me take your second question around the gross margin.

Andrew: And yes, before acquisitions of Atos carousels, our gross margin for the remaining part of the business is down in the level of two percentage points.

Speaker Change: A lot of players we're incentivized to basically offer patients all technology that we would we would see in third world countries.

Speaker Change: And and this decision is.

Speaker Change: Is a is a chance to change that so it it rewards innovation and it rewards our comp.

Speaker Change: He said that are concerned with that and not and not companies that are concerned with.

Speaker Change: Preoccupied with selling cheap cheap products now, it's not a silver bullet.

Christian Villumsen: Now, it's not a silver bullet. So, the code change and the reason that the CMS has proposed an implementation date of January 1 is that they recognize that this is not just going to happen, need to happen if you will, for Medicare; this will need quite a bit of change across a very large number of commercial payers. So, there'll be a lot of work associated with that. But we will, of course, be focused hard on helping make this happen, and that this becomes a reality, and that the intent behind the policy also comes to fruition.

Speaker Change: The underlying revenue growth was around 35% in both periods. The inpatient channel and surgical wounds were the main contributors to growth.

Speaker Change: So the code change and the reason that the CMS has proposed a a unimplemented date of January one is that are they recognize that this is.

Christian Villumsen: The inpatient channel and surgical wounds were the main contributors to growth. Kerasis operating profit-modding, excluding PPA modernization was around 10% in both periods in line with our expectations. In interventional urology, organic growth was 4% for the first nine months and growth in Danish corner was 3%. In Q3, both organic growth and reported growth in Danish corner were 2%. The men's health business in the U.S, was the main growth contributor in the quarter while both women's health and the bladder health and surgery businesses detracted from growth.

Speaker Change: Kerasis operating profit-modding, excluding PPA modernization was around 10% in both periods in line with our expectations.

Speaker Change: Not just gonna happen need to happen. If you will at four four for Medicare. This this would need to quite a bit of change across a very large number of commercial payers. So there'll be a lot of work associated with that but we will of course, a be a focused hard on helping oh no I'm on helping make this happen.

Speaker Change: In interventional urology, organic growth was 4% for the first nine months and growth in Danish corner was 3%. In Q3, both organic growth and reported growth in Danish corner were 2%.

Speaker Change: And that this becomes a reality and that the intent behind the policy also comes to also comes to fruition. So net net a very positive news, we still have very large volumes of patients in the U S market that are on uncoated products and they really shouldn't be.

Speaker Change: The men's health business in the U.S, was the main growth contributor in the quarter while both women's health and the bladder health and surgery businesses detracted from growth.

Christian Villumsen: So, net net, very positive news, we still have very large volumes of patients in the US market that are on uncoated products, and that really shouldn't be.

Speaker Change: The women's health business continued to be impacted by competitive pressure.

Christian Villumsen: The women's health business continued to be impacted by competitive pressure. The bladder health and surgery business was negatively impacted by back orders which emerged as a result of constraint supply capacity. We already seeing an improvement in the back order situation here in our fourth quarter and as a result, we expect growth in interventional urology to return to mid-single digit in Q4. From a geographical perspective, the U.S, was the main growth contributor in Q3.

Speaker Change: The bladder health and surgery business was negatively impacted by back orders which emerged as a result of constraint supply capacity. We already seeing an improvement in the back order situation here in our fourth quarter and as a result, we expect growth in interventional urology to return to mid-single digit in Q4.

Andrew: And how do you expect these costs to progress through Q4?

Andrew: I just want to circle back, Christian, to kind of how quickly you think this reimbursement, change can translate into that change in the prescription paradigm and I guess how much investment in education will you need to do on the physician level to ensure that the scripts are written for the correct codes and that physicians understand the value of the hydrophilic category?

Andrew: So that has really impacted our gross margin for our, you can say, main business.

Anders Lonning: Yeah, so, thanks to Christian. Then, to your second question around, you can say cost development into the next financial year. So, I would say that the moving parts that we talked about at the Meet the Management early June still stands. So, I'm still looking into raw material prices are coming down as a result of lower inflation levels. As I said, we have also now hedged electricity prices at a lower level for next year compared to this year, and we will also continue to be prudent in terms of our spending across the organization. We will continue to ramp up cost in Costa Rica.

Speaker Change: Yeah. So thanks to Christian and then to your second question around <unk>, you can say cost development into two the two next financial year. So I would say that the the are the moving parts that we talked about at the meet the management early June is still stance and so I'm still looking into raw material.

Andrew: So apologies, it's just sort of a multi-part, but if you could talk through what you specifically, as Coloplast and as industry need to do to do that and how long you think that might take and how much investment that might necessitate, that would be helpful as a starting point.

Andrew: And then sort of related to that, I guess, you know, obviously your catheter business, is both a wholesale and a distribution business.

Speaker Change: From a geographical perspective, the U.S, was the main growth contributor in Q3.

Speaker Change: With this, I will now hand over to Anders who will take you through the financials and outlook in more detail.

Anders Lonning: With this, I will now hand over to Anders who will take you through the financials and outlook in more detail.

Andrew: And when we look ahead, that's also why we are becoming optimistic that the inflation levels are coming down, energy are coming down, and also the salary levels.

Speaker Change: Prices are coming down as a result of lower inflation levels.

Andrew: I also have an expectation that it will come down to lower levels into 2025.

Andrew: So that's how we see it. And the price increases we have actually experienced over the last couple of years have not been able to compensate for these significant price increases on the input costs.

Speaker Change: I would also like to share that here in July we hedged around 70% of the expected electricity consumption in Hungary for 2025, at a price of around 100 euros per megawatt hour compared to 150 euros per megawatt hour which is in the price we hedged.

Speaker Change: As I said, we have also now hitched electricity prices at a lower level for next year compared to this year and we will also continue to be prudent in terms of our our spending across the organization.

Speaker Change: Operating expenses for the first nine months amounted to... 8.1 billion Danish Kroner.

Anders: Please now turn to slide number 5.

Anders Lonning: Please now turn to slide number 5. Thank you, Christian, and good morning, everyone. Report a revenue for the first nine months of the year increased by 1.8 billion Danish corner or 10% compared to last year. Organic growth contributed 1.4 billion Danish corner or around 8% to report a revenue. Acquired revenue from Caesarsk Acquisition contributed with 730 million Danish corner to report a revenue in the first nine months of the year, reflecting nine months of impact.

Speaker Change: The like-for-like increase in operating expenses excluding inorganic impact from curses was 381 billion Danish Kroner, presented the results of the residency Hello delegates and good evening Dear comrades and fellow participants.

Speaker Change: Carers has contributed with 698 million Danish Kroner to operating expenses, of which 77 million Danish Kroner were related to the PPA amortization included under, The distribution to sales ratio for the first nine months 33% compared to 31% last year and includes impact from kerosene and related PBA amortization costs as well as increased level of commercial activities, including activities related to park launches here in Q4. Distribution costs in Q3 also included extraordinary costs related, Newly established U.S. distribution center.

Speaker Change: These extraordinary costs are expected to continue, The Admin to Sales Ratio for the first 9 months was 5% on par with the last year, primarily impacted by the inclusion of, The R&D to sales ratio for the first 9 months was 3% of sales compared to 4% last year.

Speaker Change: Overall this resulted in an increase in operating profit before special items of 7% for the first 9 months, corresponding to an EBIT margin before special items of 27% compared to 28% last year. The EBIT margin in the first nine months included negative impact of around 100 basis points from the inclusion of kerosene, including the PPA amortization.

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

Anders: Report a revenue for the first nine months of the year increased by 1.8 billion Danish corner or 10% compared to last year. Organic growth contributed 1.4 billion Danish corner or around 8% to report a revenue. Acquired revenue from Caesarsk Acquisition contributed with 730 million Danish corner to report a revenue in the first nine months of the year, reflecting nine months of impact.

Speaker Change: We will.

Speaker Change: Continued to ramp up cost in Costa Rica, and we will also.

Anders Lonning: We will also see, you can say, negative impact from carousels as a result of their lower margin, and basically the new thing compared to what we talked about back in early June, that is, if-Effects is giving us more equipment and also into Q4 than we saw earlier this year and especially driven by the US dollar and some selected emerging markets currencies. But in general, the main drivers that we are looking into from this year into next year, as we described early June, still stands.

Speaker Change: See you can see a negative impact from tariffs as a as a result of the lower margin.

Speaker Change: Currencies also had a negative impact on the reported EBIT margin of around 100 USD.

Speaker Change: And basically the new thing compared to what we talked about back in early June that is FX effects is giving us more headwind.

Anders: Acquired revenue contributed around 4% to report a revenue in the first nine months. One exchange rate had a negative impact of 305 million Danish corner on report a revenue or around 2% related to the depreciation of the U.S, dollar, the Japanese Jan, and their basket of emerging markets, currencies against the Danish corner, most notably the Argentinian peso.

Anders Lonning: Acquired revenue contributed around 4% to report a revenue in the first nine months. One exchange rate had a negative impact of 305 million Danish corner on report a revenue or around 2% related to the depreciation of the U.S, dollar, the Japanese Jan, and their basket of emerging markets, currencies against the Danish corner, most notably the Argentinian peso.

Speaker Change: And also into Q4 than we saw earlier this year, and especially driven by the U S dollar and some selected emerging markets occurrences.

Speaker Change: Mostly related to the depreciation of the US dollar and a basket of emerging market currencies against the Danish pound, as well as the appreciation of the Hungarian Ferenc against... Financial items in the first nine months were at a net expense of 621 million Danish Kroner compared to a net expense of 628 million Danish Kroner last year, driven mostly by interest expenses related to the financing of the ATSOS medical, The tax expense in the first nine months was 1 billion Danish Kroner with a tax rate of 22% compared to a tax rate of 21% last year.

Speaker Change: As a result, Net Profit before Special Items for the first 9 months, year increased by 7% compared to last year.

Speaker Change: Diluted Earnings Per Share Before Spatial IT, 87 Danish Kroner and include impact from the equity race in Aarhus.

Speaker Change: But in general the main drivers are that we're looking into them from this year into next year. As we described through to June is still things.

Anders: Please turn to slide number 6.

Anders Lonning: Please turn to slide number 6. Growth profit for the first nine months amounted to 13.6 billion Danish corner corresponding to a growth margin of 68% compared to 67% last year. The growth margin was positively impacted by the inclusion of Caesarsk, which contributed with around 100 basis points. In addition, favourable development in input cost, price increases, and a baseline benefit of around 40 basis points from the Italian payback reform also had a positive impact on the growth margin.

Anders Lonning: Thank you, and just a follow-up while we're on the topic of cost piece. At the topic side, should we continue to expect higher commercialization costs and or the extraordinary cost related to the new distribution center in the U.S. expected to continue to next year as well. So my expectation, as I just said earlier, we are expecting something around a 50 million extraordinary cost split between Q3 and Q4 for this year. Moving into next year, we expect the challenges we are currently having. But the distribution center to be solved, and we will not have any extraordinary cost. That's my current expectation.

Speaker Change: Please turn to slide 7.

Speaker Change: Thank you and just a follow up while we're on the topic of cost piece and the Opex side should we continue to expect higher commercialization costs.

Speaker Change: Growth profit for the first nine months amounted to 13.6 billion Danish corner corresponding to a growth margin of 68% compared to 67% last year. The growth margin was positively impacted by the inclusion of Caesarsk, which contributed with around 100 basis points. In addition, favourable development in input cost, price increases, and a baseline benefit of around 40 basis points from the Italian payback reform also had a positive impact on the growth margin.

Speaker Change: Operating cash flow for the first nine months was an inflow of 718 million Danish Kroner compared to an inflow of 2.3 billion Danish Kroner last year.

Speaker Change: The development in cash flows was driven by a higher income tax paid in the second quarter related to the Atos Medical Intellectual Property Transfer with a negative impact of 2.5 billion. The tax payment will be offset by reduced tax payments in the following years starting from this financial year.

Speaker Change: Partly upset by an increase in operating profit and an improved, Cash flow from investing activities was an outflow of 904 million Danish Kroner compared to an outflow of 640 million Danish Kroner.

Speaker Change: 5 million danish kroner last year, CABX in the first nine months amounted to around 5% of sales on par with last year.

Speaker Change: As a result, the free cash flow for the first nine months was an outflow of 186 million Danish kroner compared to an inflow of 1.7 billion Danish kroner, to the impact from the extraordinary tax The payment of 2.5 billion Danish Kroner, the adjusted free cash flow in the first nine months, before with an inflow of 2.3 billion.

Speaker Change: The Trading 12-Month Cash Conversion was, Networking capital amounted to around 27% of sales, compared to 26% last year. Impacted by timing and country sales.

Speaker Change: We now expect the net working capital to be around $26 billion, for this financial year.

Speaker Change: At the same time we also adjusted the full year 23-24.

Speaker Change: Guidance on CapEx now expected around 1.3 billion Danish Kroner from previously around 1.4 billion Danish Kroner.

Speaker Change: Or the extraordinary costs related to the new distribution center in the U S expected to continue into next year as well.

Speaker Change: So my expectation is it just that the earlier, we are expecting something around 50 million extraordinary costs are split between Q3 and Q4 for this year moving into next year.

Speaker Change: Now let's look at the financial guidance for the year.

Speaker Change: The positive development in the above mentioned factors was partly offset by double the rate inflation in Hungary and ramp up cost at our manufacturing sites in Costa Rica.

Speaker Change: Please turn to slide 8.

Speaker Change: Our financial guidance for 2023-2024 financial year is largely on... We are on track to deliver a good year with growth above the market and a significant growth in absolute returns. The organic revenue growth for the year is still expected around 8% and the underlying assumptions on the performance by business area and geographies are on, Our reported revenue growth in Danish kroner is still expected, between 1-2% Percentage points negative impact.

Speaker Change: Continue to expect a reported EBIT margin before special items of 27-28%, with unchanged underlying assumptions of a gross margin of around 60%.

Speaker Change: Student Management of Operating Expenses, and the negative impact from cases of around 100 basis points, including around 100 million Danish Kroner in amortization.

Speaker Change: I now expect negative impact from currencies of around 70 basis points from previously around 50 basis points.

Speaker Change: For 2023-2024 I expect around 80 million Danish Kroner in special items related to the ongoing integration of, The Net Financial Expenses, 23, 24, I now expect around minus 850 million Danish Kroner impacted by interest.

Speaker Change: No changes to our assumptions on effective tax rates.

Anders Lonning: The positive development in the above mentioned factors was partly offset by double the rate inflation in Hungary and ramp up cost at our manufacturing sites in Costa Rica. The growth margin also included negative impact from currencies of around 80 basis points. I would also like to share that here in July, we hedged around 70% of the expected electricity consumption in Hungary for 25. At a price of around 100 euros per megawatt hour compared to 150 euros per megawatt hour, which is in the price we hedged.

Speaker Change: The the challenges we are currently having at the distribution center to be solved and we will not have any extraordinary cost that's my current expectation.

Speaker Change: The growth margin also included negative impact from currencies of around 80 basis points.

Maja Pataki: Perfect, thank you.

Speaker Change: Thank you very much.

Speaker Change: Thank you.

Speaker Change: I would also like to share that here in July, we hedged around 70% of the expected electricity consumption in Hungary for 25. At a price of around 100 euros per megawatt hour compared to 150 euros per megawatt hour, which is in the price we hedged.

Maja Pataki: The next question comes from the line of Maya Pataki, Kepler Shubhangi. Please go ahead. Good morning. Thanks for taking my questions. I have two as well, and first I would like to go back to your growth, particularly looking at the continent's care growth. Which is very solid with the eight percent growth, but following your very optimistic commentary to meet management and all the divisional heads that were super excited about, you know, the reception of it. I'm a bit puzzled that we don't start to see this, you know, the positive feedback being reflected in organic growth, could you.

Speaker Change: Operator, we are now ready to take.

Speaker Change: The next question comes from the line of my appetite key Kepler. Please go ahead.

Speaker Change: The next question was on the distribution centre.

Speaker Change: Great.

Speaker Change: We will now begin the question and answer session.

Speaker Change: Could you indicate the rough kind of size of the cost headwind here?

Speaker Change: So maybe from the path of a distributor, if you can talk through whether you think there, might be some backlash from some of the distributors towards your products, given that you are the player who's most actively pushed for this change, that will be a detriment to their profitability.

Speaker Change: That makes sense.

Speaker Change: Anyone who wishes to ask a question may press star and 1 on the touch-tone telephone. You will hear a tone to confirm that you have entered the queue.

Speaker Change: Yeah. Good morning, Thanks for taking my questions I have two as well and first I would like to get back to your growth, particularly looking at the Companys care growth.

Speaker Change: , here in 24.

Anders Lonning: , here in 24. Operating expenses for the first nine months amounted to 8.1 billion Danish Corona. They liked for like increase in operating expenses, excluding inorganic impact from carousels, was 383 million Danish Corona or 5% compared to last year, in line with expectations. Carousels contribute with 698 million Danish Corona to operating expenses, of which 77 million Danish Corona were related to the PBA and motivation included under distribution cost. The distribution to sales ratio for the first nine months was 33% compared to 31% the last year and includes impact from carousels and related PBA and motivation costs as well as increased level of commercial activities, including activities related to product launches here in Q3.

Speaker Change: Like she's very solid with 8% growth, but following your very optimistic commentary it to meet the management and all the divisional heads and we're super excited about the reception of it.

Speaker Change: Operating expenses for the first nine months amounted to 8.1 billion Danish Corona. They liked for like increase in operating expenses, excluding inorganic impact from carousels, was 383 million Danish Corona or 5% compared to last year, in line with expectations. Carousels contribute with 698 million Danish Corona to operating expenses, of which 77 million Danish Corona were related to the PBA and motivation included under distribution cost.

Speaker Change: If you wish to remove yourself from the question queue, you may press star and 2.

Speaker Change: I'm a bit puzzled that we don't start to see this deposit their feedback are being reflected in the organic growth could.

Speaker Change: Anyone who has a question may press star and run at this time.

Speaker Change: Could you.

Maja Pataki: Sorry, could you maybe give us an indication when you do anticipate or when you do expect to see an acceleration in continent's care growth coming through because of the rollout of Lujia? That would be my first question. And then looking at the second question, it would be around China. Could you give us just a bit of an update on what is happening in the market and whether you've got a bit of a better feeling for when that market could start coming through?

Speaker Change: The first question comes from the line of Jack Reynolds, RBC Capital Markets, please go ahead.

Speaker Change: Sorry could you maybe give us an indication when you do anticipate or when you do expect to see an acceleration in continence care gross coming through because of the rollout of our future.

Speaker Change: Helo, diolch am y cwestiynau.

Speaker Change: The distribution to sales ratio for the first nine months was 33% compared to 31% the last year and includes impact from carousels and related PBA and motivation costs as well as increased level of commercial activities, including activities related to product launches here in Q3. Distribution cost in Q3 also included extra and extraordinary cost related to the newly established US distribution center. These extra and cost are expected to continue into Q4.

Speaker Change: Rydw i wedi cael tri, os gwelwch yn dda.

Speaker Change: Y prynhawn yw ar y costau cymdeithasol.

Speaker Change: That would be my first question and then looking at the second question and it will be around China could you give us just a bit just an update on what is happening in the market and whether you've got a bit of a better.

Speaker Change: Feeling for when that market could start to recover thank you.

Christian Villumsen: Sorry to recover thank you thank you Maya to get to good questions I'll say on on Lujia I am still I am still very optimistic. Thank you so much for the second question. I would like to ask you a few more questions in a bit in catheter, which is the main category. It's the bowel category, and then it's the category of collecting devices to look at the underlying growth of the catheter business. It is sitting very well, and that's also why the entire category is up a full point compared to the other category. The male catheter is in 13 markets. It is right now shaping up to be the strongest launch we've ever done in condoms care, and the female product is now by now only in four markets. Remember, Maya, it's a chronic category, so we're starting to wind up the flywheel. This was this is the first point, but of course we're pushing hard that the product gets into as many customers' hands as possible. We are ahead of the launch plan that we have pretty consistently across all the markets that we're in, meaning that customers are voting.

Anders Lonning: Distribution cost in Q3 also included extra and extraordinary cost related to the newly established US distribution center. These extra and cost are expected to continue into Q4. The app into sales ratio for the first nine months was 5% on par with the last year, primarily impacted by the inclusion of carousels. The R&D to sales ratio for the first nine months was 3% of sales compared to 4% last year. Overall this resulted in an increase in operating profit before special items of 7% for the first nine months, corresponding to an EBIT margin before special items of 27% compared to 28% last year.

Speaker Change: And how much you expect these costs to continue in Q4?

Speaker Change: So that's my second question.

Speaker Change: Thank you very much.

Speaker Change: Felly, rwy'n cwestiynu sut y mae'r rhain yn seiliedig.

Speaker Change: Thank you Mike to get are two good questions are all I'll say on Lucha I am still I am still very optimistic.

Speaker Change: And then, of course, whether you expect a rebound in the kind of the lost chronic care revenues once these issues are sorted?

Speaker Change: And then my third question is on CARISs and the 35% growth rate, you know, I think when, you started at the beginning of the year, your ambition had been to grow a bit more than that for the year.

Speaker Change: The next question comes from the line of Shabanjee Gupta, HSBC.

Speaker Change: Sure.

Speaker Change: The app into sales ratio for the first nine months was 5% on par with the last year, primarily impacted by the inclusion of carousels.

Speaker Change: Hum.

Speaker Change: A oes ganddyn nhw seiliedig ar Luser Women neu eraill o gynnyrchau?

Speaker Change: Yeah for us and a bit in catheter, which is the main category. It's the ball category and then it's a category of collecting devices, you'll hit the underlying growth of the of the AR of the catheter business. It is a it is sitting is sitting very well and that and that's also why the the entire category is up.

Speaker Change: A oes ganddyn nhw fwy na'n gobeithio?

Speaker Change: A sut ydych chi'n gobeithio bod y costau hyn yn datblygu drwy Q4?

Speaker Change: And then the third question is on guidance.

Speaker Change: Please go ahead.

Speaker Change: The R&D to sales ratio for the first nine months was 3% of sales compared to 4% last year.

Speaker Change: Y cwestiwn nesaf yw ar y sefydliad cymdeithasol.

Speaker Change: So given the higher costs in Q3, do you think that the low end of the margin guidance feels realistic?

Speaker Change: A allwch chi ddangos y ffyrdd o'r costau yma?

Speaker Change: A sut ydych chi'n gobeithio bod y costau hyn yn datblygu drwy Q4?

Speaker Change: Thank you.

Speaker Change: Just curious if you think there's anything you can do to get that growth to accelerate, as you move into the fourth quarter and into next year, or this is it, and given the changes in the market, you know.

Speaker Change: Hi.

Speaker Change: Overall this resulted in an increase in operating profit before special items of 7% for the first nine months, corresponding to an EBIT margin before special items of 27% compared to 28% last year. The EBIT margin in the first nine months included negative impact of around 100 basis points from the inclusion of carousels, including the PBA motivation cost.

Speaker Change: Yeah.

Speaker Change: We should be more anchoring towards a slightly lower growth rate here going forward, thanks.

Speaker Change: Thanks for taking my question.

Speaker Change: A full point compared to last year.

Speaker Change: So thank you for the questions.

Speaker Change: My first question is on continent scale.

Speaker Change: The male catheter is in 13 markets. It is right now shaping up to be the strongest launch we've ever done in continence care.

Anders Lonning: The EBIT margin in the first nine months included negative impact of around 100 basis points from the inclusion of carousels, including the PBA motivation cost. Currencies also had a negative impact on the reported EBIT margin of around 100 basis points, mostly related to the depreciation of the US dollar and the basket of emerging market currencies against the Danish corner, as well as the appreciation of the Hungarian variant against the Danish corner.

Speaker Change: Let me dive into it.

Speaker Change: So could you give us a split of volume versus price increase in continent for Q3?

Speaker Change: And the female product is now by now only in in four markets remember my it's the quantic category.

Speaker Change: Currencies also had a negative impact on the reported EBIT margin of around 100 basis points, mostly related to the depreciation of the US dollar and the basket of emerging market currencies against the Danish corner, as well as the appreciation of the Hungarian variant against the Danish corner.

Speaker Change: Was there any increase in reimbursement prices?

Speaker Change: So we're starting to wind up the flywheel and that this is this was this is the first point, but.

Speaker Change: Ac yna, wrth gwrs, a oes gennych chi'n gobeithio ymgyrch yn y math o ddarganfyddiadau cronig wedi'u cael unwaith y bydd y materion hyn yn cael eu seiliedig?

Speaker Change: And second, on your midterm margin targets for catheters, you're expecting over 20% in 2025-2026.

Of course, we're pushing hard that the product gets into as many customers hands as up as possible. We are ahead of the launch plan that we have pretty consistently across all the markets that we're in meaning that customers are voting.

Speaker Change: So our operating expenses, for the third quarter, yes, we invested quite a bit into commercial activities to launch our products. And that was also included in Q3.

Speaker Change: Financial items in the first nine months were at a net expense of 621 million Danish corner compared to a net expense of 628 million Danish corner last year. During mostly by interest expenses related to the financing of the access medical acquisition.

Anders Lonning: Financial items in the first nine months were at a net expense of 621 million Danish corner compared to a net expense of 628 million Danish corner last year. During mostly by interest expenses related to the financing of the access medical acquisition. The tax expense in the first nine months was 1 billion Danish corner with a tax rate of 22% compared to a tax rate of 21% last year. As a result net profit before special items for the first nine months of the year increased by 7% compared to last year. Diluted earnings per share before special items increased by 1% to 16.87 Danish corner and include impact from the equity raise in August 23.

Speaker Change: Ac yna, y cwestiwn nesaf yw ar y gwybodaeth.

Speaker Change: Felly, oherwydd y costau mwyaf drwy Q3, a oes gennych chi'n credu bod y ddifrif o'r gwybodaeth mawr yn teimlo'n gwirioneddol?

Speaker Change: And it's a bit more than we also included in the first half of the year. On top of that, as we have talked about, we have also included the costs related to the new distribution centre in the U.S. So in the quarter, we included something around extra $15 million.

Christian Villumsen: in favor of Luja and the technology. So this will, of course, continue into next year in the next strategic period.

Speaker Change: In favor of off Lucia and the technology. So this will of course continuing to into next year and the next strategic period on.

Speaker Change: The tax expense in the first nine months was 1 billion Danish corner with a tax rate of 22% compared to a tax rate of 21% last year.

Christian Villumsen: On China, unfortunately, not much news to report. I'd say surgical activity levels are still robust across the different provinces in China. We're seeing decent patient enrollment coming into the business, but the spend levels and the patient values are still depressed compared to pre-COVID. And I've now taken the stance that I'm not going to get more positive until I can actually see it in our numbers. So I'm still looking at a Chinese business that's sitting around mid-single, dedicated for this year. And then once we get to the end of the year, we'll start talking about guidance for next year.

Speaker Change: On China, Unfortunately, not much news to report I'd say, our surgical activity levels are still robust.

Speaker Change: As a result net profit before special items for the first nine months of the year increased by 7% compared to last year.

Speaker Change: Across the different provinces in China.

Speaker Change: We're seeing decent patient enrollment coming into the business, but.

But the spend levels and the patient values are still depressed compared to pre COVID-19.

Speaker Change: Diluted earnings per share before special items increased by 1% to 16.87 Danish corner and include impact from the equity raise in August 23.

Speaker Change: And I have a I have now taken the stance that I'm I'm not going to I'm not going to get more positive until I can actually see it in our numbers. So I'm still looking at our Chinese business that that's sitting around that mid single digit for this year and then once we get to the to the end of the year well, we'll start talking about a guy.

Speaker Change: Please turn to slide 7.

Anders Lonning: Please turn to slide 7. Operating cash flow for the first nine months was an inflow of 718 million Danish corner compared to an inflow of 2.3 billion Danish corner last year. The development in cash flows was driven by a higher income tax paid in the second quarter related to the access medical intellectual property transfer with a negative impact of 2.5 billion Danish corner. The tax payment will be offset by reduced tax payments in the following years starting Lentilier.

Speaker Change: Operating cash flow for the first nine months was an inflow of 718 million Danish corner compared to an inflow of 2.3 billion Danish corner last year.

Speaker Change: The development in cash flows was driven by a higher income tax paid in the second quarter related to the access medical intellectual property transfer with a negative impact of 2.5 billion Danish corner. The tax payment will be offset by reduced tax payments in the following years starting Lentilier. The tax payment was also partly offset by an increase in operating profit and an improvement in changes in working capital.

Speaker Change: For for next year, but right now.

Christian Villumsen: But right now, I'm not seeing a lot of reasons to be more optimistic.

Speaker Change: I'm not seeing a lot of reasons to be more optimistic.

Speaker Change: Yeah, so, um...

Maja Pataki: Okay. Christian, maybe a quick follow-up on that, because you've also highlighted that you have three different kinds of businesses and continents care. Maybe I'm wrong, but my recollection was that last year's numbers were negatively impacted due to some back orders and collecting divides. So we're really lacking the comparable numbers. Could you give us a bit of an indication of what the underlying real continent's care, so catheter sales growth was doing last year versus last year? Is it, you know, comparably up 50 bips or anything that we can actually really try to figure out what is going on.

Speaker Change: Okay Christian maybe a quick follow up on that because he's he's also highlighted that you have three different kind of business as incontinence care.

Speaker Change: Thank you for the questions.

Speaker Change: Let me dive into it.

Speaker Change: Maybe I'm wrong, but my recollection was at last year's numbers was negatively impacted due to some back orders and collecting device. So.

Speaker Change: So our operating expenses for the third quarter, yes, we invested quite a bit into commercial activities.

Speaker Change: Thank you.

Speaker Change: Thank you, and that was also included in Q3 and it's a bit more than we also included in the first half of the year.

Anders Lonning: The tax payment was also partly offset by an increase in operating profit and an improvement in changes in working capital. Caslow from investing activities was an outflow of 904 million Danish corona compared to an outflow of 655 million Danish corona last year. Capix in the first nine months amounted to around 5% of sales on power last year. As a result, the free Caslow for the first nine months was an outflow of 186 million Danish corona compared to an inflow of 1.7 billion Danish corona.

Speaker Change: On top of that, as we have talked about, we have also included costs related to the new distribution center in the U.S. In the quarter we included something around extra 15 million and we are now expecting it will be around 50 million for the year, so it will include, around 35 extra in Q4.

Speaker Change: Were really lacking the comparable numbers could you give us a bit of an indication of what's the underlying real continence care. So a catheter sales growth was doing.

Speaker Change: In terms of our guidance, so we are expecting to deliver within our guidance for the year the level of 27-28% on the EBIT margin and delivering an organic growth of around, So that's what we are going to deliver.

Speaker Change: Okay, fair enough.

Speaker Change: Caslow from investing activities was an outflow of 904 million Danish corona compared to an outflow of 655 million Danish corona last year.

Speaker Change: Last year this year versus last year, I said, you know comparably up 50 bps or anything that we can we can actually really.

Speaker Change: Capix in the first nine months amounted to around 5% of sales on power last year.

Speaker Change: Tried to figure out what is going on whats going on thank you.

Christian Villumsen: What's going on? Thank you. No, so catheters are, they're meaningfully up, Maya, which is also why the entire category, the entire continent's category is up by a full point. Catheters are growing fast, and collecting devices that there's also a relatively significant share of the category still is a, of course, a drag on growth. It's about 15% of the total category with very limited growth in it. So if you know that, I think you can back what's met with what we're saying about catheters. Thank you.

Speaker Change: So Catherine our though there are meaningfully up my App, which is also why the entire category. The entire continence category is up by a by a full point a catheter is are are growing fast.

Speaker Change: As a result, the free Caslow for the first nine months was an outflow of 186 million Danish corona compared to an inflow of 1.7 billion Danish corona.

Speaker Change: Excluding impact from the extraordinary tax payment of 2.5 billion Danish corona, they adjusted free Caslow in the first nine months of 2324 was an inflow of 2.3 billion Danish corona. The trading 12 month Cas conversion was 82%. Networking capital amounted to around 27% of sales compared to 26% last year, impacted by timing and country sales mix. We now expect the networking capital to be around 26 for this financial year.

Anders Lonning: Excluding impact from the extraordinary tax payment of 2.5 billion Danish corona, they adjusted free Caslow in the first nine months of 2324 was an inflow of 2.3 billion Danish corona. The trading 12 month Cas conversion was 82%. Networking capital amounted to around 27% of sales compared to 26% last year, impacted by timing and country sales mix. We now expect the networking capital to be around 26 for this financial year. The long-term expectation of networking capital to sales ratio of around 24% has still unchanged. At the same time, we also adjusted the full year 2324 guidance on Capix, now expected around 1.3 billion Danish corona from previously around 1.4 billion Danish corona.

And collecting devices that there's also a relatively significant share of the category is still is a.

Speaker Change: Of course, a drag on growth, it's about 15% of the of the total category with with very limited growth in it so.

Speaker Change: If if you know that I think you can you can backwards map with what we're saying about catheters.

Speaker Change: Thank you.

Niels Granholm: The next question comes from the line of needs, ground home, Carnegie. Please go ahead.

Speaker Change: The next question comes from the line of Scott Home Carnegie. Please go ahead.

Speaker Change: The long-term expectation of networking capital to sales ratio of around 24% has still unchanged.

Niels Granholm: Thank you for taking my questions.

Speaker Change: Can I just follow up on the US chronic care?

Speaker Change: Thank you for taking my questions first a question on the CMS decision can you talk about the degree of switching which takes place between the hospital and home care. So.

Niels Granholm: First question on the CMS decision. Can you talk about the degree of switching, which takes place between the hospital and home care? So what proportion of patients would you estimate actually being switched back to uncoded as they return to home care?

Speaker Change: At the same time, we also adjusted the full year 2324 guidance on Capix, now expected around 1.3 billion Danish corona from previously around 1.4 billion Danish corona.

What proportion of patients would you estimate the high food being switched back to uncoated as they return to them here.

Speaker Change: Now let's look at the financial guidance for the year.

Anders Lonning: Now let's look at the financial guidance for the year. Please turn to slide 8. Our financial guidance for 2324 financial year is largely unchanged. We are attracted to the liver good year with growth above the market and the significant growth in absolute profit. The organic revenue growth for the year is still expected around 8% and the underlying assumptions on the performance by business area and geographies are unchanged. Our reporter revenue growth in Danish corona is still expected to be between 10 and 11% and continues to assume around 4% is points contribution from carriages and between 1% to 2% percentage points negative impact from currencies.

Speaker Change: Please turn to slide 8.

Niels Granholm: My second question is just a kind of housekeeping question on the calculation on your organic growth. Is it correctly understood that you exclude product rationalization from the calculation of your organic growth?

Speaker Change: And my second question is just to kind of housekeeping question on the calculation on your organic growth you said curriculum student debt.

Speaker Change: Our financial guidance for 2324 financial year is largely unchanged.

Speaker Change: We are attracted to the liver good year with growth above the market and the significant growth in absolute profit.

Speaker Change: Product rationalization from the calculation of your organic growth. Thank you.

Niels Granholm: Thank you. Thank you, Nell. If you look at the market now in the US, you still probably have about 60% of volumes that are uncoded.

Speaker Change: The organic revenue growth for the year is still expected around 8% and the underlying assumptions on the performance by business area and geographies are unchanged.

Speaker Change: Are you expecting a rebound in sales once these issues are sorted?

Speaker Change: Thank you. Thank you announced if you look at it.

Speaker Change: If if if you look at the market now and in the U S. You still probably have about 60% of volumes.

Speaker Change: Our reporter revenue growth in Danish corona is still expected to be between 10 and 11% and continues to assume around 4% is points contribution from carriages and between 1% to 2% percentage points negative impact from currencies.

Speaker Change: And that all uncoated.

Christian Villumsen: I don't have accurate data because on the switching that takes place to kiss, we don't run those businesses. We just know that it's happening. and you can also see from the fact that a large number of the distribution players have had a focus on driving on coded technology and on coded brands. I don't know the exact amount of what that is. We just know it's significant. And the whole, if you will, strategic opening that's coming now is that once the market is educated on these new codes, that this in effect becomes impossible. So the net net impact of that, we don't know what it is yet, but we will, of course, invest heavily with the commercial muscle that we have to drive the conversion also to the new codes.

Speaker Change: I I don't have a accurate data because.

Speaker Change: On the switching that that takes place to kiss, we we don't run those businesses, we just know that it's happening.

Speaker Change: We continue to expect a reported EBIT margin before space items of 27th to 28% with unchanged underlying assumptions of a growth margin of around 68%. Food and management of operating expenses and a negative impact from carriages of around 100 basis points, including around 100 million Danish corona in amortization charges. I now expect negative impact from currencies of around 70 basis points from previously around 50 basis points.

Anders Lonning: We continue to expect a reported EBIT margin before space items of 27th to 28% with unchanged underlying assumptions of a growth margin of around 68%. Food and management of operating expenses and a negative impact from carriages of around 100 basis points, including around 100 million Danish corona in amortization charges. I now expect negative impact from currencies of around 70 basis points from previously around 50 basis points. For 2324 I expect around 80 million Danish corona in space items related to the ongoing integration of assets. The net financial expenses for 2324 I now expect around minus 850 million Danish corona impacted by interest expenses. No changes to our assumptions on effective tax rates expected at around 22%.

Speaker Change: And you can also see from the from the fact that.

Speaker Change: A large number of the distribution players have had a focus on driving on driving our uncoated and coated technology in Unquoted uncoated brands I don't know the exact amount of of what that is we just know it's significant.

Speaker Change: And the the whole if you will.

Speaker Change: Strategic opening that's coming now is that once the market is educated on these new codes that the this in effect it becomes impossible.

Speaker Change: For 2324 I expect around 80 million Danish corona in space items related to the ongoing integration of assets.

Speaker Change: So without that the net net impact of that we don't know what it is yet but.

Speaker Change: The net financial expenses for 2324 I now expect around minus 850 million Danish corona impacted by interest expenses.

Speaker Change: But we will we will of course invest heavily with the commercial muscle that we have to to drive the conversion also to the new codes.

Speaker Change: No changes to our assumptions on effective tax rates expected at around 22%.

Christian Villumsen: But would you expect the signatures to absorb the entire marching compression that they would experience when more patients move to coded going forward? Well, if you decide to serve the demand, I mean, you're going to have to; you're going to have to. So, of course, Niels, this then becomes a question on what will happen with the distribution landscape. And I think there you will see some level of consolidation on how many people will participate in that game. But that's notwithstanding the companies or the distributors that are partnered with us and have had good growth with us also have profitable growth, even if you will, if you will, the hydrophilic margin that they get.

Speaker Change: But we do expect to see pictures to absorb the entire.

Speaker Change: Thank you very much Operator, we are now ready to take questions.

Shari: Thank you very much Operator, we are now ready to take questions. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touch tone telephone. You will hear a turn to confirm that you have entered the queue. If you wish to move yourself on the question queue you may press star Anyone has a question or a press star and one at this time?

Speaker Change: Marching compression that they would experience a win.

Speaker Change: All patients moved to coat it going forward.

Speaker Change: We will now begin the question and answer session.

Speaker Change: Well, if you decide to serve the demand.

Speaker Change: Anyone who wishes to ask a question may press star and one on the touch tone telephone. You will hear a turn to confirm that you have entered the queue.

Speaker Change: Yeah, I mean, you're gonna have to you're going to have to.

Speaker Change: So of course, our analysis. This then becomes a question on what will what will happen with the distribution landscape and I think that you will see some level of consolidation on how many people will participate.

Speaker Change: If you wish to move yourself on the question queue you may press star Anyone has a question or a press star and one at this time?

Speaker Change: The first question comes from the line of Jack Reynolds, RBC Captain Markets.

Jack Reynolds: The first question comes from the line of Jack Reynolds, RBC Captain Markets. Please go ahead. Hi there, thank you for taking the questions.

Speaker Change: In and in that game, but that notwithstanding the the companies or the distributors that are partnered with us and have had good growth with US also have profitable growth even at if you will if you will the hydrophilic margin.

Speaker Change: Please go ahead.

Jack Reynolds: Hi there, thank you for taking the questions.

Speaker Change: I had three please.

Christian Villumsen: I had three please. The first is on commercial costs. So I'm just wondering where these are focused. Were they focused on loser women or other products and were they higher than expected and kind of how do you expect these costs to progress through Q4?

Speaker Change: The first is on commercial costs.

Speaker Change: So I'm just wondering where these are focused.

Speaker Change: Were they focused on loser women or other products and were they higher than expected and kind of how do you expect these costs to progress through Q4?

Speaker Change: That they get.

Speaker Change: Okay.

Christian Villumsen: Okay. All right.

Speaker Change: Alright, then and then to your second question around the parking at restaurant Ization now beyond the Weizmann respiratory care.

Anders Lonning: And then let's then to your second question around the product and rationalization.

Speaker Change: The next question was on the distribution center.

Christian Villumsen: The next question was on the distribution center. Could you indicate the rough kind of size of the cost headwind here? How much do you expect these costs to continue in Q4? And then of course, whether you expect a rebound in kind of a lost chronic care revenues once these issues are sorted?

Anders Lonning: Now we are in the voice and respiratory care. It's related to the divestment of a small company we did in the Q1 call MC Europe that is reflected here. Okay.

Speaker Change: Could you indicate the rough kind of size of the cost headwind here?

Speaker Change: It's related to the divestment of a small company with at the end of Q1 called M. C. Europe that that is reflected here.

Speaker Change: How much do you expect these costs to continue in Q4?

Speaker Change: And then of course, whether you expect a rebound in kind of a lost chronic care revenues once these issues are sorted?

Speaker Change: And then the third question is on guidance.

Christian Villumsen: And then the third question is on guidance. So given the higher costs in Q3, do you think that the low end of the margin guidance feels realistic, thank you. Yeah, so thank you for the questions. Let me dive into it. So our operating expenses for the third quarter. Yes, we invested quite a bit into commercial activities to launch our products and that was also included in Q3 and it's a bit more than we also included in the first half of the year.

Speaker Change: Okay. Thank you.

Veronika Dubajova: Thank you. The next question comes from the line of Veronica Dubayova from City.

Speaker Change: Yep, so Veronika, thank you for three good questions.

Speaker Change: So given the higher costs in Q3, do you think that the low end of the margin guidance feels realistic, thank you.

Naranja <unk>: The next question comes from the line of Naranja <unk> from Citi. Please go ahead.

Veronika Dubajova: Please go ahead.

Veronika Dubajova: Hi, guys. Good morning. And thank you for taking my questions. I have three, please. I just want to circle back, Christian, to kind of how quickly you think this reimbursement change can translate into that change in the prescription paradigm. And I guess how much investment in education will you need to do on the physician level to ensure that the scripts are written for the correct codes and that physicians understand the value of the hydrophilic category. So apologies, it's just sort of a multi part. But if you can talk through what you specifically co-plastic in the industry need to do to do that.

Hey, guys. Good morning, and thank you for taking my questions I have three please well I just wanted to circle back Christian team kind of how quickly you think it's reimbursement change can translate into that change in the prescription paradigm and I guess, how much investment in education.

Speaker Change: I'll say on the catheter opportunity related to the CMS decision, we still need to work this through with our team on exactly how we're going to go about it.

Speaker Change: Yeah, so thank you for the questions.

Speaker Change: Let me dive into it.

Speaker Change: So our operating expenses for the third quarter. Yes, we invested quite a bit into commercial activities to launch our products and that was also included in Q3 and it's a bit more than we also included in the first half of the year. On top of that, as we have talked about, we have also included costs related to the new distribution center in the US.

Speaker Change: Do you want a physician level to ensure that the script all waiting for the correct codes and that physicians understand the value of the hydrophilic category. So.

Christian Villumsen: On top of that, as we have talked about, we have also included costs related to the new distribution center in the US. So in the quarter, we included something around extra 15 million and we are now expecting it would be around 50 million for the year. So it will increase to around 35 extra in Q4. In terms of our guidance, so we are expecting to deliver within our guidance for the year, the level of 27 to 28% on the EBIT margin and delivering an organic growth of around 8%. So that's what we are going to deliver.

Speaker Change: So I apologies it just kind of a multipart, but if you could talk through what you specifically called passionate industry need to do to do that and how long you think that might take and how much investment that Mike.

Speaker Change: So in the quarter, we included something around extra 15 million and we are now expecting it would be around 50 million for the year.

Veronika Dubajova: And how long do you think that might take, and how much investment that might necessitate that would be helpful as a starting point. And then, sort of related to that, I guess, you know, obviously your catheter business is both a wholesale and a distribution business. And so maybe from that half of a distributor, if you can talk through whether you think there might be some backlash from some of the distributors towards your products given that you are the player who's most actively pushed for this change that will be a detriment to their profitability. So that's my second question.

Speaker Change: That would be helpful as a starting point.

Speaker Change: And then sort of related to that I guess, you'll obviously your catheter business is both a wholesale and a.

Speaker Change: So it will increase to around 35 extra in Q4.

Speaker Change: In terms of our guidance, so we are expecting to deliver within our guidance for the year, the level of 27 to 28% on the EBIT margin and delivering an organic growth of around 8%.

Speaker Change: And distribution business out so maybe from that cash because they just strip here.

Speaker Change: You can talk through.

Speaker Change: Whether you think there might be some backlash from some of the distributors towards your product given that you are that player who's Merck actively push cycles change that will be a detriment to their profitability.

Speaker Change: So that's what we are going to deliver.

Speaker Change: Okay, so let's follow up on the US chronic care, so I'm expecting a rebound in sales. So what we've said previously was chronic care US is now in the second half of the year going to be sitting at around high single digit from previously around double digit.

Christian Villumsen: Okay, so let's follow up on the US chronic care, so I'm expecting a rebound in sales. So what we've said previously was chronic care US is now in the second half of the year going to be sitting at around high single digit from previously around double digit. Okay, great, thank you.

Speaker Change: My second question.

Veronika Dubajova: And then my third question is on terraces and the 35% growth rate. I think when we started the beginning of the year, your ambition had been to grow, but more than that for the year. Just curious if you think there's anything you can do to get that growth to accelerate as you move into the fourth quarter and into next year, or this is it and given the changes in the market. and we should be more anchoring towards the slightly lower growth rate here, going forward. Thanks.

Speaker Change: And then my third question is on terraces and 35% growth rate Yeah. I think when you started at the beginning of the year. Your ambition has been to grow a bit more than that for the year. I'm. Just curious if you think there is anything you can do to get that to accelerate as he made some changes.

Speaker Change: Okay, great, thank you.

Speaker Change: Quarter, I didnt connect share or additional gait pattern given the changes in the market.

Speaker Change: The next question comes from the line of Taldarama, JP Morgan, please go ahead.

Taldarama: The next question comes from the line of Taldarama, JP Morgan, please go ahead. Hi, good morning. I have two questions please.

Speaker Change: We should be more inclined towards slightly lower growth rate here going forward. Thanks.

Christian Villumsen: Yeah, so, Veronica, thank you for three good questions. I'll say on the Catherine opportunity related to the CMS decision, we still need to work this through with our team on exactly how we're going to go, exactly we're going to go about it. I'm not imagining that this would trigger a significant increase in, if you will, in cost to do this. We have a very sizable setup and a very sizable muscle in the US that for a long time has been driving the conversion to hydrophilic. And of course, now we are now getting the tailwind from the authorities actually recognizing the distinction and technology that we've been talking about for, I think the original reimbursement got introduced in 0809, something like that.

Speaker Change: Hi, good morning.

Speaker Change: Yep.

Speaker Change: So.

Speaker Change: I have two questions please.

Speaker Change: Veronica Thank you for for three good questions I'll say on the on the on the catheter opportunity related to the CMS decision.

Speaker Change: The first one is on the CMS decision for new codes for hydrophilic catheters.

Taldarama: The first one is on the CMS decision for new codes for hydrophilic catheters. The fee schedule remains unchanged. I was wondering, were you expecting to achieve some premium pricing? And if so, are there any reasons why CMS hasn't offered a pricing benefit? So it's fair to assume the tailwind will come from easy prescription and hence a potential volume uplift.

Speaker Change: The fee schedule remains unchanged.

Speaker Change: I was wondering, were you expecting to achieve some premium pricing?

Speaker Change: We still need to work this through with with with our team on exactly how we're going to go how exactly we're going to go about it I'm not imagining.

Speaker Change: And if so, are there any reasons why CMS hasn't offered a pricing benefit?

Speaker Change: I'm not imagining that this would trigger a significant increase in, if you will, in cost to do this.

Speaker Change: So it's fair to assume the tailwind will come from easy prescription and hence a potential volume uplift.

Speaker Change: That this would this will this would trigger a significant increase in our if you will in cost to do this we have a very sizable setup.

Speaker Change: And then the second question would just be a bit more around your cost structure for next year, please.

Anders Lonning: And then the second question would just be a bit more around your cost structure for next year, please. Can you provide some more color on the magnitude of improvement around COG's inflation you've seen thus far? And how should we be thinking about it going into next year? Are there any offsets we need to be mindful of? Thank you for those.

Speaker Change: We have a very sizable setup and a very sizable muscle in the U.S, that for a long time has been driving the conversion to hydrophilic.

Speaker Change: And a very sizeable muscle.

Speaker Change: Can you provide some more color on the magnitude of improvement around COG's inflation you've seen thus far?

Speaker Change: In the U S that for a long time has been driving the conversion to to hydrophilic.

Speaker Change: And how should we be thinking about it going into next year?

Speaker Change: Of course, we are now getting the tailwind from the authorities actually recognizing the distinction in technology that we've been talking about for, I think the original reimbursement got introduced in 2008 or 2009, something like that.

Speaker Change: And of course now Oh, we we are now getting the tailwind from the the authorities actually recognizing.

Speaker Change: Are there any offsets we need to be mindful of?

Speaker Change: Thank you for those.

Speaker Change: Let me speak to the CMS decision and then Anders can speak to your question on cogs.

Christian Villumsen: Let me speak to the CMS decision and then Anders can speak to your question on cogs. So, we were really not expecting a change in the fee schedule. Of course, had there been, had there been a change that would have been a double, double good news, but the draft didn't propose a change in fee schedule. So, for us, really, the big news here is that the CMS finally recognizes that technology matters.

Speaker Change: The distinction and technology that we've been talking about for I think the original reimbursement got introducing oh, eight or nine something like that so we've been driving this for a long time.

Speaker Change: And we are now expecting it will be around $50 million for the year.

Speaker Change: We've been driving this for a long time, but it's not, like I said in my opening remarks, it's not a silver bullet.

Speaker Change: So how much of that is dependent on the top line growth?

Anders: So, we were really not expecting a change in the fee schedule.

Christian Villumsen: So, we've been driving this for a long time.

Speaker Change: And third, on China, after me, care business, which has been weak for quite a while now.

Speaker Change: So is there some loss of market share?

Speaker Change: Could you help understand what exactly is happening there?

Speaker Change: So what we what we've said previously was chronic care U.S. is now in the second half of the year going to be sitting at around high single digit from previously around double digit.

Speaker Change: It, but it's not a like I said in my opening remarks, our it its not a silver bullet.

Speaker Change: Thank you.

Speaker Change: Great, thank you.

Christian Villumsen: But it's not, like I said, in my opening remarks; it's not a silver bullet. So the education needs to happen. And you need to cover thousands of customers. You need to work through a very large number of payers. So, of course, it will be a prolonged push.

Speaker Change: Thank you.

Speaker Change: Let me see if I remember all of what you've asked for.

Speaker Change: Of course, had there been, had there been a change that would have been a double, double good news, but the draft didn't propose a change in fee schedule.

Speaker Change: I thought the so the education needs to happen.

Speaker Change: The education needs to happen, and you need to cover thousands of customers.

Speaker Change: So if you look at the continent's care growth, it's driven by growth across the SpeedyCath portfolio, but mostly by the new launches.

Speaker Change: And are you you need to cover our thousands of customers you need to work through a very large number of payers. So of course, it will be a prolonged push but it it. It I think net net good news for good news for patients. Good news for people, who believe in and are in the technology to you.

Speaker Change: You need to work through a very large number of payers.

Speaker Change: So this is LUJA, and it's the recent set launch that we have, and in addition, also really good growth from the SpeedyCath portfolio in emerging markets.

Speaker Change: We have, and I'll remind you that, of course, we have higher pricing on LUJA, so there is a mixed effect in the growth also.

Speaker Change: So, for us, really, the big news here is that the CMS finally recognizes that technology matters.

Speaker Change: So it will increase to around $35 extra in Q4.

Speaker Change: So, of course, it will be a prolonged push, but I think net-net, good news for patients, good news for people who believe in the technology.

Speaker Change: But when I look at the launch performance, we are well ahead on value, we are well ahead on volume.

Speaker Change: In terms of our guidance, so we are expecting to deliver within our guidance for the year, the level of 27% to 28% on the EBIT margin and delivering an organic growth of around 8%.

Speaker Change: So that's what we are going to deliver.

Christian Villumsen: But I think net net good news for good news for patients, good news for people who believe in the technology. The second part of your Catherine questions related to whether this is a backlash. Remember that the work here has now been led by; it is a coalition of manufacturers. And I would say I also think the distributors should be concerned that patients actually get on good technology. And this is also what CMS is basically spelling out now. That there is evidence that this hydrophilic technology does make a difference for a large number of patients. And therefore, it deserves separate codes.

Speaker Change: And this is just really good news for patients.

Christian Villumsen: And this is just really good news for patients. It's really good news for anyone who cares about innovation. And if you look back since reimbursement was established for intermittent catheters in the U.S., the fee schedule didn't make that distinction. And so, you've had really what I'd call a perversity in the U.S, market where a lot of players were incentivized to basically offer patients all technology that we would see in third world countries.

Speaker Change: The second part of your catheter question is related to whether there's a backlash.

Speaker Change: It's really good news for anyone who cares about innovation.

Christian Villumsen: And this decision is a chance to change that. So, it rewards innovation and it rewards a company that are concerned with that and not companies that are concerned with and preoccupied with selling cheap products. Now, it's not a silver bullet. So, the co-change and the reason that the CMS has proposed an implementation date of January 1 is that they recognize that this is not just going to happen, need to happen, if you will, for Medicare, this will need quite a bit of change across a very large number of commercial payers.

Speaker Change: The second part of your a Catholic questions related to whether there's a backlash remember that the the walk here has now been led by our it it is a coalition of manufacturers.

Speaker Change: Remember that the work here has now been led by, it is a coalition of manufacturers, and I would say I also think the distributors should be concerned that patients actually get on good technology.

Speaker Change: And if you look back since reimbursement was established for intermittent catheters in the U.S., the fee schedule didn't make that distinction.

Christian Villumsen: So, there'll be a lot of work associated with that. But we will, of course, be focused hard on helping make this happen and that this becomes a reality and that the intent behind the policy also comes to fruition. So, NetNet, very positive news, we still have very large volumes of patients in the U.S, market that are on uncoated products and they really shouldn't be.

Speaker Change: And I would say.

Speaker Change: And so, you've had really what I'd call a perversity in the U.S, market where a lot of players were incentivized to basically offer patients all technology that we would see in third world countries.

I also think the distributor should be concerned that patients actually get on get on on on good technology and this is also what CMS is basically spelling out now that there is evidence that that this hydrophilic technology does make a difference for a large number of patients and it therefore, it deserve separate separate.

Speaker Change: And this is also what CMS is basically spelling out now, that there is evidence that this hydrophilic technology does make a difference for a large number of patients, and therefore it deserves separate codes.

Speaker Change: And this decision is a chance to change that.

Speaker Change: So, it rewards innovation and it rewards a company that are concerned with that and not companies that are concerned with and preoccupied with selling cheap products.

Speaker Change: Codes are part of course are that they are more expensive.

Speaker Change: But, of course, they are more expensive products, so they will put some pressure on margin.

Christian Villumsen: But, of course, they are more expensive products. So they will put some pressure on margin. On caruses, we're still on plan. We are seeing that on the LCD that it's a bit harder to initiate new accounts in the outside hospital setting. But we're still on plan.

Speaker Change: That's a product so they will put some pressure on margin.

Speaker Change: On Kerasys, we're still on plan.

Speaker Change: On on care says, we are where we're still on plan, we are seeing that oh on the LCD that it it's a bit harder to initiate a new accounts.

Speaker Change: Now, it's not a silver bullet.

Speaker Change: We are seeing that on the LCD that it's a bit harder to initiate new accounts in the outside hospital setting, but we're still on plan.

Speaker Change: So, the co-change and the reason that the CMS has proposed an implementation date of January 1 is that they recognize that this is not just going to happen, need to happen, if you will, for Medicare, this will need quite a bit of change across a very large number of commercial payers.

Speaker Change: In the a and the.

Speaker Change: Outside hospital setting.

Speaker Change: But we're we're we're still on plan acceleration on the business will come from of course, a decision hopefully a positive decision on an L. C. D. And then the continued commercial expansion as we get people up the productivity curve.

Speaker Change: Acceleration on the business will come from, of course, a decision, hopefully a positive decision on LCD, and then the continued commercial expansion as we get people up the productivity curve.

Christian Villumsen: Acceleration on the business will come from, of course, a decision, hopefully a positive decision on LCD. And then the continued commercial expansion as we get people up the productivity curve. That's helpful.

Speaker Change: So, there'll be a lot of work associated with that.

Speaker Change: But we will, of course, be focused hard on helping make this happen and that this becomes a reality and that the intent behind the policy also comes to fruition.

Speaker Change: That's helpful.

Speaker Change: Thanks, Christian.

Speaker Change: And, Jason, can I just, going back to that first question, I mean, I guess the way to ensure that you get the right script written is, I mean, my question is really you are going to have to educate a different customer, right?

Speaker Change: If I look at the, I think the second question was to the distribution of volume and value, of our business in the U.S., when we say IC or coded technology in the U.S., 70% of our business is on that, but that's not volume.

Speaker Change: That's helpful. Thanks, Christian and can can.

Veronika Dubajova: Thanks, Christian.

Veronika Dubajova: And Jason, can I just go back to that first question? I mean, I guess the way to ensure that you get the right script written is, I mean, my question is really, you are going to have to educate a different customer, right? I mean, I think you've been focusing your education on the patient. Are you going to have to focus more on the physician to make sure that they're writing the correct script? We've been doing both, Veronica, also historically. So the Australian's always been, if you will, against or with a headwind from, if you will, a dealer incentive to vote for a non-coated product. The recipe has always been to drive demand, clinical demand and consumer demand.

Speaker Change: Just going back to that first question I mean.

Speaker Change: Yes, the way to ensure that you get the right script right.

Speaker Change: That's a value number.

Speaker Change #100: I mean my question is really you are going to have to educate and different customer right. I mean, I think you've been focusing your education on the patients are you gonna have to focus more on the physician to make sure that they're writing the correct scrub through everything we've been doing that also okay.

Speaker Change: So, NetNet, very positive news, we still have very large volumes of patients in the U.S, market that are on uncoated products and they really shouldn't be.

Speaker Change: I mean, I think you've been focusing your education on the patient.

Speaker Change: Are you going to have to focus more on the physician to make sure that they're writing the correct script, or you think you can do that for patients?

Speaker Change: Yeah, so thanks to Christian.

Anders Lonning: Yeah, so thanks to Christian. Then, to your second question around, you can say cost development into the next financial year. So, I would say that the moving parts that we talked about at the meet the management early June still stands. So, I'm still looking into raw material prices are coming down as a result of lower inflation levels. As I said, we have also now hedged electricity prices at a lower level for next year compared to this year.

Speaker Change: Then, to your second question around, you can say cost development into the next financial year.

Speaker Change: Okay.

Speaker Change: We've been doing both, Veronica, also historically.

Speaker Change: I'd say if I look at the market today, our assessment, about 60% of that market still, needs to be converted, still needs to be converted.

Speaker Change #100: We've been doing both of them are on a call. So historically so the.

Speaker Change: So our strategy has always been, If you will, against, or with a headwind from, if you will, a dealer incentive to vote for a non-coded product, the recipe has always been to drive demand, clinical demand and consumer demand.

Speaker Change: So there are a lot of patients who are on old technology, and there's been a lot of, people in that market who've invested in driving old technology.

Speaker Change #100:

Speaker Change: So, I would say that the moving parts that we talked about at the meet the management early June still stands.

Our strategy has always been.

Speaker Change #100: If you will against it or where the headwind from if you will of.

Speaker Change: So, I'm still looking into raw material prices are coming down as a result of lower inflation levels.

Speaker Change #101: A dealer incentive to vote for a non coated product. The the recipe has always been to drive demand clinical demand and consumer demand. So we've we've been focused on educating clinicians for for many years and we will continue that process.

Speaker Change: So of course, this should change, and more than anything, I think it will be driven by, a change in volume, so more patients will, in effect, come on to hydrophilic technology.

Speaker Change: It will be much, much more difficult to switch people away, just given the dedicated codes.

Speaker Change: As I said, we have also now hedged electricity prices at a lower level for next year compared to this year.

Christian Villumsen: So we've been focused on educating clinicians for many years, and we will continue that process.

Speaker Change: So we've been focused on educating clinicians for many years and we will continue that process.

Speaker Change: And we will also continue to be prudent in terms of our spending across the organization.

Anders Lonning: And we will also continue to be prudent in terms of our spending across the organization. We will continue to ramp up cost in Costa Rica. We will also see, you can say, negative impact from carousels as a result of their lower margin. And basically, the new thing compared to what we talked about back in early June, that is if- Efex, Efex is giving us more hitment and also into Q4 than we saw earlier this year and especially driven by the US dollar and some selected emerging markets currencies. But in general, the main drivers that we are looking into, from this year into next year, as we described early June is still stands.

Speaker Change: Okay, thanks, and sorry, one final one, quick reminder, what proportion of Scripps are product, specific in the U.S. market at the moment?

Veronika Dubajova: Okay, thanks, and sorry, one final, one quick reminder of what proportion of scripts are product specific in the US market at the moment. Very low, very low, okay. Okay, thank you so much.

Okay. Thanks.

Speaker Change #102: One final one quick reminder of what more proportionate scraped product because I think in the U S market at the moment.

Speaker Change: We will continue to ramp up cost in Costa Rica.

Speaker Change: Very low.

Speaker Change #102: Very low.

Speaker Change: We will also see, you can say, negative impact from carousels as a result of their lower margin.

Speaker Change: But we don't know.

Speaker Change #103: I don't know.

Speaker Change: Okay.

Speaker Change #104: Okay. Thanks, guys so much.

Speaker Change: Thank you guys so much.

Speaker Change: The next question comes from the line of Graham Doyle from UBS.

Speaker Change: And then the final question you had on ostomy China is, so like I said to an earlier question, a pretty good activity, if I look at surgeries and the inflow of patients, much more cost-conscious So this is still a business that's sitting at mid-single-digit, mid-single-digit-plus, for now.

Graham Doyle: The next question comes from the line of Graham Doyle from UBS. Please go ahead. Good morning, thanks, guys. Just a couple on, just following from Veronika's questions there in terms of your exposure in concerns or in catheters, roughly, how much is, is via Medicare versus the commercial insurance, presumably the vast majority. And then, in terms of the mechanism under this new reimbursement, when it comes to the actual prescription, so it gets written for, let's call it the correct code now. Presumably, there's still that sort of discretion in narrower, but still discretion in terms of which manufacturer the distributor then chooses to be able to know how specific that can get.

Speaker Change #104: The next question comes from the line of Anchal Verma, JP Morgan, please go ahead.

Speaker Change #104: The next question comes from the line of Graham Doyle from UBS. Please go ahead.

Speaker Change: And basically, the new thing compared to what we talked about back in early June, that is if- Efex, Efex is giving us more hitment and also into Q4 than we saw earlier this year and especially driven by the US dollar and some selected emerging markets currencies.

Speaker Change #104: Please go ahead.

Speaker Change #104: Okay.

Speaker Change #104: Good morning.

Speaker Change #104: Fair enough.

Speaker Change #104: Thanks, guys.

Speaker Change #105: Hi, good morning.

Speaker Change #105: Hi, Good morning, Thanks, guys and just just a couple on just follow up with Veronica as questions. There in terms of your exposure.

Speaker Change #105: Can I just follow up on, the U.S. chronic care?

Speaker Change #105: So are you expecting a rebound in sales once these issues are sorted?

Speaker Change #105: Just a couple on, just following up on Veronika's questions there, in terms of your exposure, Just be able to know how specific that can get.

Speaker Change #105: And the one on your mid-term care assist margin, how much of that is dependent on top-line, especially if there is a possibility that the product might not be covered under Medicare?

Speaker Change #105: I have two questions, please.

Constance catheters, roughly how much is it.

Speaker Change #106: Medicare versus commercial insurers, presumably the vast majority.

Speaker Change: But in general, the main drivers that we are looking into, from this year into next year, as we described early June is still stands.

Speaker Change #106: And then in terms of them the mechanism under this new.

Speaker Change #107: This new reimbursement when it comes to the actual prescription so it gets written for let's call. It the correct code now.

Speaker Change #107: The first one is, on the CMS decision for new codes for hydrophilic catheters, the fee schedule remains unchanged.

Speaker Change #107: I was wondering, were you expecting to achieve some premium pricing?

Speaker Change #107: And if so, are there any reasons why CMS hasn't offered a pricing benefit?

Speaker Change: Thank you.

Speaker Change #107: So is it fair to assume the tailwind will come from easier prescription and hence a potential volume uplift?

Speaker Change: And just to follow up while we're on the topic of cost piece, at the topic side, should we continue to expect higher commercialization costs and or the extraordinary cost related to the new distribution center in the US, expected to continue to next year as well.

Anders Lonning: Thank you. And just to follow up while we're on the topic of cost piece, at the topic side, should we continue to expect higher commercialization costs and or the extraordinary cost related to the new distribution center in the US, expected to continue to next year as well. So my expectation as I just said earlier, we are expecting something around a 50 million extraordinary cost split between Q3 and Q4 for this year. Moving into next year, we expect the challenges we are currently having at the distribution center to be solved and we will not have any extraordinary cost. That's my current expectation. Perfect.

Speaker Change #107: And then the second question would just be a bit more around your cost structure for next year, please.

Speaker Change #107: Presumably there is still that sort of discretion narrower, but still discretion in terms of which manufacturer.

Speaker Change #107: Can you provide some more color on the magnitude of improvements around COGS inflation you've seen thus far?

Speaker Change #107: And how should we be thinking about it going into next year?

Speaker Change #107: Are there any offsets we need to be mindful of?

Speaker Change #107: Thank you for those.

Speaker Change #107: Let me speak to the CMS decision and then Anders can speak to your question on, on Cogs.

Speaker Change #107: We were really not expecting a change in the fee schedule, of course, had there been a change that would have been double good news, but the draft didn't propose a change in fee schedule.

Speaker Change #107: So, for us, really, the big news here is that CMS finally recognizes, that technology matters, and this is just really good news for patients.

Speaker Change #107: It's really good news for anyone who cares about innovation.

Speaker Change #107: Just to be.

Speaker Change #107: Yeah.

Speaker Change #107: And if you look back since reimbursement was established for intermittent catheters in the US, the fee schedule didn't make that distinction.

Speaker Change #107: So what we've said previously was chronic care U.S. is now in the second half of the, year going to be sitting at around high single digit from previously around double digit.

Speaker Change #107: Specific that can get up.

Speaker Change #107: And so you've had, You've had really what I'd call a perversity in the U.S. market where a lot of players were incentivized to basically offer patients old technology that we would see in third world countries.

Speaker Change #107: Okay.

Speaker Change #107: And then one quick one, given how speedy the proposal and update was, it's different, but, for this, say, versus the wound LCD, and we've seen some other LCDs withdrawn last week in other categories, have you any sense as to when we might get an answer on that?

Graham Doyle: And then one quick on given how speedy the proposal and update was different, but for this favors the wound LCD, we've seen some other LCDs withdrawn last week in other categories. And have you any sense as to when we might get an answer on that? Has there been any more discussion around it? And are physicians expecting it today, given we're already into late August night? Thank you very much.

Speaker Change #107: And this decision is a chance to change that.

Speaker Change #107: And then one quick one given high speedy.

Speaker Change #107: The proposal.

Speaker Change: So my expectation as I just said earlier, we are expecting something around a 50 million extraordinary cost split between Q3 and Q4 for this year.

Anders Lonning: Thank you.

Speaker Change #107: It's different but for this.

Speaker Change #108: Favors the wound LCD and we've seen some other LCD is withdrawn last weekend and other categories and have you any sense as to when we might get an answer on that has there been any more discussion around it.

Speaker Change: Moving into next year, we expect the challenges we are currently having at the distribution center to be solved and we will not have any extraordinary cost.

Speaker Change #107: Has there been any more discussion around it?

Speaker Change #107: And are physicians expecting a delay, given we're already into late August now?

Speaker Change #108: Okay.

Speaker Change #108: <unk> expecting it.

Speaker Change #108: Sure.

Speaker Change #108: Thank you very much Oh, thank you Graeme and so the the short answer on on if you will the the the pay a distribution of the market is that we don't have a strong data on that I I can't lock.

Speaker Change #107: Thank you very much.

Speaker Change: That's my current expectation.

Speaker Change #107: Thank you, Graham.

Graham Doyle: Thank you, Graham. So the short answer on if you will, the pay a distribution of the market is that we don't have a strong data on that. I can't look internally on all the all the plants that are distributed partners serve, but I would I would imagine that it probably follows the broader population distribution. And of course, we still have to win; we still have to win with the brand, but we have been winning with the brand for more than a decade. And that this will now happen on the back of a lucha launch that our belief is that this will set a new standard in the category also in the US.

Speaker Change #107: So the short answer on, if you will, the payer distribution of the market is that we don't, have strong data on that.

Speaker Change: Perfect.

Speaker Change: Thank you.

Speaker Change: The next question comes from the line of Maya Pataki, Kepler Shavrof.

Maja Pataki: The next question comes from the line of Maya Pataki, Kepler Shavrof. Please go ahead. Yes, good morning. Thanks for taking my questions. I have two as well. And first I would like to go back to your growth, particularly looking at the continent's care growth, which is very solid with the 8% growth. But following your very optimistic commentary to meet management and all the divisional heads that were super excited about the reception of it, I'm a bit puzzled that we don't start to see this positive feedback being reflected in organic growth. Could you, sorry, could you maybe give us an indication when you do anticipate or when you do expect to see an acceleration in continents care growth coming through.

Speaker Change #107: I can't look internally on all the plants that our distributor partners serve, but I would, imagine that it probably follows the broader population distribution.

Speaker Change: Please go ahead.

Speaker Change #108: Internally on on all the all the plants that are stupid or partners served but I would I would imagine that it probably follows the broader population distribution.

Speaker Change: Yes, good morning.

Speaker Change: Thanks for taking my questions.

Speaker Change: I have two as well.

Speaker Change: And first I would like to go back to your growth, particularly looking at the continent's care growth, which is very solid with the 8% growth.

Speaker Change #107: And, of course, we still have to win with the brand.

Speaker Change #108: So it rewards innovation and it rewards companies that are concerned with that and not companies that are concerned with.

Speaker Change #108: And of course, we still have to win we still have to win with the brand.

Speaker Change #108: I'm preoccupied with selling cheap, cheap products.

Speaker Change #108: Now, it's not a silver bullet.

Speaker Change: But following your very optimistic commentary to meet management and all the divisional heads that were super excited about the reception of it, I'm a bit puzzled that we don't start to see this positive feedback being reflected in organic growth.

Speaker Change #108: But we have been winning with the brand for more than a decade.

Speaker Change #109: But we have been winning with the brand for a for more than a decade and this will now happen on the back of a baluja launched that our belief is that the this will set a new standard in the category also in the U S.

Speaker Change #109: So the code change and the reason that the CMS has proposed an implementation date of January 1 is that they recognize that this is not just going to happen, need to happen if you will for Medicare, this will need quite a bit of change across a very large number of commercial payers.

Speaker Change #109: And this will now happen on the back of a LUJA launch that our belief is that this will, set a new standard in the category, also in the U.S. And I'll just reiterate what I said earlier, that the LUJA launch is, by now, the most, successful or fastest uptake that we've ever had in the catheter category.

Speaker Change #109: So there will be a lot of work associated with that.

Speaker Change #109: We will of course be focused hard on helping make this happen and that this becomes a reality and that the intent behind the policy also comes to fruition.

Speaker Change #110: So net-net very positive news, we still have very large volumes of patients in the US market that are on uncoded products and they really shouldn't be.

Christian Villumsen: And I'll just reiterate what I said earlier that the Lucha launch is by now the most successful or fastest uptake that we've ever had in the catheter category. So, so we feel optimistic about our position, and we'll make it tough to compete on the LCD.

Speaker Change: Could you, sorry, could you maybe give us an indication when you do anticipate or when you do expect to see an acceleration in continents care growth coming through.

Speaker Change #110: And I'll just reiterate what I said earlier that they are the lose your launch is the.

Speaker Change #111: By now the most successful fastest uptake that we've ever had.

Speaker Change: Because of the rollout of Luja, that would be my first question.

Christian Villumsen: Because of the rollout of Luja, that would be my first question.

Speaker Change #111: In the catheter category.

Speaker Change #110: So we feel optimistic about our position, and we'll make it tough to compete.

Speaker Change #111: So so what we we feel optimistic about our position and will make it tough to compete.

Speaker Change: And then looking at the second question, it would be around China.

Christian Villumsen: And then looking at the second question, it would be around China. Could you give us just a bit of an update on what is happening in the market and whether you've got a bit of a better feeling for when that market could start to recover. Thank you.

Speaker Change: Could you give us just a bit of an update on what is happening in the market and whether you've got a bit of a better feeling for when that market could start to recover.

Speaker Change #110: On the LCD, we have no news to report.

Speaker Change #112: On the LCD, we are we have no news to report.

Christian Villumsen: We have no news to report. I mean, I'm still expecting that we get a decision sometime in the fall. Right.

Speaker Change #110: I'm still expecting that we get a decision sometime in the fall.

Speaker Change #112: Still expecting that we are we get a decision sometime in the fall.

Speaker Change: Thank you.

Speaker Change: Thank you, Maya, to get two good questions.

Christian Villumsen: Thank you, Maya, to get two good questions. I'll say on Luja, I am still very optimistic. In a bit in catheter, which is the main category, it's the bowel category, and then it's the category of collecting devices. To look at the underlying growth of the catheter business, it is sitting very well, and that's also why the entire category is up a full point compared to last year. The male catheter is in 13 markets.

Speaker Change #110: Great.

Speaker Change #113: Great. Thank you very much of a super helpful. Thanks, guys.

Speaker Change #113: Yeah, so thanks, Christian.

Unknown Executive: Thank you very much. Super helpful.

Speaker Change #113: Thank you.

Speaker Change #113: Thank you very much.

Unknown Executive: Thanks, guys.

Speaker Change #113: That was super helpful.

Speaker Change: I'll say on Luja, I am still very optimistic.

Speaker Change #113: Thanks, guys.

Speaker Change #113: The next question comes from the line of Anshul Verma, J.P. Morgan.

Speaker Change #113: The next question comes from the line of Martin Brenner from Nordea.

Speaker Change #113: I'm sorry, I'm not getting that question.

Martin Brenoe: The next question comes from the line of Martin Brenner from Nordea. Please go ahead. Thank you very much for taking my questions. I'll just take one from out that since most of my questions have been answered. Just on the supply disruption, can you maybe just elaborate a little bit on exactly what happened here? And just, you know, how sure are you that this will be fixed in two fall? And just from, you know, an observation from one of your peers, they've been saying that they've taken a lot into the market shares in the U.S. in North America.

Martin <unk>: Then to your second question around, you can say, cost development, to the next financial year.

Martin <unk>: The next question comes from the line of Martin <unk> from Nordea. Please go ahead.

Martin <unk>: Please go ahead.

Martin <unk>: What's the question?

Martin <unk>: Hi.

Martin <unk>: Thank you very much for taking my questions.

Martin <unk>: So you've mentioned you are expecting 20% operating margin for care assists in 2025-2026, so how much of this is dependent on top-line here?

Martin <unk>: As I said, we have also now hedged electricity prices at a lower level for next year compared to this year.

Martin <unk>: Thank you very much for taking my questions I'll, just take a one foot out that.

Martin <unk>: We will also continue to be prudent in terms of our spending across the organization.

Martin <unk>: We will continue to ramp up costs in Costa Rica, we will also.., a negative impact from kerosene as a result of their lower margins.

So most of my questions have been answered just on the supply disruption can you maybe just elaborate.

Speaker Change: In a bit in catheter, which is the main category, it's the bowel category, and then it's the category of collecting devices.

Martin <unk>: Good morning.

Martin <unk>: I'll just take one for now, since most of, my questions have been answered.

Martin <unk>: I have two questions, please.

Martin <unk>: The first one is on the CMS decision for new, codes for hydrophilic catheters, the fee schedule remains unchanged.

Martin <unk>: Just on the supply disruption, can you maybe just elaborate a little bit on exactly what happened here?

Speaker Change: To look at the underlying growth of the catheter business, it is sitting very well, and that's also why the entire category is up a full point compared to last year.

Speaker Change #115: A little bit on exactly what happened here.

Speaker Change #115: Just you know how sure I've got this will be fixed in Q4 and just from.

Martin <unk>: And just, you know, how sure are you that this will be fixed in Q4?

Speaker Change #116: And observation from one of your peers, they've been saying that they've taken market share in the U S. In Ostomy care is that also a part of the explanation why you might have seen a little bit of a we get growth compared to your expectations here. Yeah. That's my question. Thank you.

Martin <unk>: And just from, you know, an observation from one of your peers, they've been saying that they've taken market shares in the U.S. in Oslo-McCair.

Speaker Change: The male catheter is in 13 markets.

Martin Brenoe: Is that also part of the explanation while you might have seen a little bit of a weaker growth compared to your expectations here? That's my question.

Martin <unk>: Is that also a part of the explanation why you might have seen a little bit of a weaker, growth compared to your expectations here?

Speaker Change: It is right now shaping up to be the strongest launch we've ever done in continents care.

Christian Villumsen: It is right now shaping up to be the strongest launch we've ever done in continents care. And the female product is now by now only in four markets. Remember Maya, it's a chronic category, so we're starting to wind up the flywheel. And this was the first point, but of course we're pushing hard that the product gets into as many customers hands as possible. We are ahead of the launch plan that we have pretty consistently across all the markets that we're in, meaning that customers are voting, in favor of Luja and the technology. So this will, of course, continue into next year in the next strategic period.

Martin <unk>: That's my question.

Speaker Change: And the female product is now by now only in four markets.

Christian Villumsen: Thank you. Thanks, Martin.

Martin <unk>: I was wondering, were you expecting to achieve some premium pricing?

Martin <unk>: Thank you.

Martin <unk>: Well, of course the business needs to continue to grow, and so we need to continue to grow, at a CAGR of 30%.

Speaker Change #117: And basically the new thing, compared to what we talked about back in early June, that is the effect.

Speaker Change #117: Thanks, Martin, yes, so the effort to consolidate our two distribution centers into one we've we've run into some what I'll call just operational snacks.

Speaker Change #117: And if so, are there any reasons why CMS hasn't offered a pricing benefit?

Christian Villumsen: Yes, so the effort to consolidate two distribution centers into one, we run into some, if what I'll call, just operational snacks. Of course, I'm not satisfied with this. We didn't plan for this, and whenever a customer places an order with us, and we're not able to fulfill it, we're not living up to the basic promise that the company is making. I can assure you that the people who are responsible for this know that we are not satisfied with this, but we have a lot of people working on bringing productivity back up. And we're already seeing productivity improve, and we are still expecting, with everything that we know, that by the end of the quarter, we will be out of the woods and have a good performance again.

Speaker Change #117: Thanks for watching!

Speaker Change #117: More than we saw earlier this year and especially driven by the US dollar and some selected emerging markets, but in general, the main drivers that we are looking into, from this year into next year as we described.

Speaker Change: Remember Maya, it's a chronic category, so we're starting to wind up the flywheel.

Speaker Change #117: So is it fair to assume the tailwind will come from easier prescription and hence a potential volume uplift?

Speaker Change #117: Thanks, Martin. Yes, so the effort to consolidate two distribution centers into one, we've run, into some of what I'll call just operational snags.

Speaker Change: And this was the first point, but of course we're pushing hard that the product gets into as many customers hands as possible.

Speaker Change #117: Thank you.

Speaker Change #117: And just to follow up while we're on the topic of costs, please, at the OPEC side, should we continue to expect higher commercialization costs and or the extraordinary costs related to the new distribution center in the U.S. expected to continue to next year as well?

Speaker Change #117: Of course, I'm not satisfied with this.

Speaker Change #118: So my expectation, as I just said earlier, we are expecting something around 50 million extraordinary costs.

Speaker Change #118: Q3 and Q4 for this year.

Speaker Change #118: We we didn't plan for this and whenever a customer places an order with us and we're not able to fulfill it would not living up to the basic promise that the company is making.

Speaker Change #118: Moving into next year, we expect the challenges we are currently having at the distribution center to be solved, will not have any extraordinary cost, that's my current, Perfect, thank you.

Speaker Change #118: And then the second question would just be a bit more around your cost structure for next year, please.

Speaker Change #118: Of course, I'm not satisfied with this. We didn't plan for this, and whenever a customer places an order with us and we're not able, to fulfill it, we're not living up to the basic promise that the company is making.

Speaker Change #118: We need to deliver that.

Speaker Change #118: So this is a business that starts with a very favorable gross margin position, so it scales, very favorably, but we need the growth.

Speaker Change #118: It's not a cost exercise.

Speaker Change: We are ahead of the launch plan that we have pretty consistently across all the markets that we're in, meaning that customers are voting, in favor of Luja and the technology. So this will, of course, continue into next year in the next strategic period.

Speaker Change #118: The last question comes from the line of Marco Cox from Barclays.

Speaker Change #118: The next question comes from the line of Maja Pataki.

Speaker Change #118: I can assure you that the people who are responsible for this know that we are not satisfied with, this, but we have a lot of people working on bringing productivity back up, and we're already seeing productivity improve, and we are still expecting with everything that we know that by the end of the quarter, we will be out of the woods and have a good performance again.

Speaker Change #118: Please go ahead.

Speaker Change #118: I can assure you that the people who are responsible for this no debt.

Speaker Change #118: Kepler-Chabra, please go ahead.

Speaker Change #118: That Oh, we are not satisfied with this but we have a lot of people working on bringing productivity backup.

Speaker Change #118: Hi there, Marco from Barclays, speaking on behalf of Casanova Kill.

Speaker Change #118: And Oh, we're already seeing productivity.

Speaker Change #118: Most of my questions have already been asked, but I just had one follow-up question on care, assists.

Speaker Change #118: You mentioned the fact that you're seeing it harder to initiate new accounts outside, of the hospital sector.

Speaker Change: On China, unfortunately not much news to report.

Christian Villumsen: On China, unfortunately not much news to report. I'd say surgical activity levels are still robust across the different provinces in China. We're seeing decent patient enrollment coming into the business, but the spend levels and the patient values are still depressed compared to pre-COVID. And I've now taken the stance that I'm not going to get more positive until I can actually see it in our numbers. So I'm still looking at a Chinese business that's sitting around mid-single, dated for this year. And then once we get to the end of the year, we'll start talking about guidance for next year. But right now, I'm not seeing a lot of reasons to be more optimistic.

Speaker Change #118: I was just wondering to what extent do you see this?

Speaker Change #118: Improve and we are still expecting with everything that we know that by the end of the quarter.

Speaker Change #118: Is it only minute or are you starting, to see it slow down at a faster rate?

Speaker Change: I'd say surgical activity levels are still robust across the different provinces in China.

Speaker Change #118: We will be out of the woods and have and have Oh. Good good performance again, I'm not saying this related to.

Speaker Change: We're seeing decent patient enrollment coming into the business, but the spend levels and the patient values are still depressed compared to pre-COVID.

Speaker Change #118: I'm not seeing this related to the ostomy sales in the U.S.

Christian Villumsen: I'm not seeing this related to the ostomy sales in the U.S. I still see underlying good demand. Thank you. Maybe, Martin, we still see double-digit volume growth in our backs and plates business in the acute channel in the U.S. with this, basically means that a lot of patients are coming out on a coal plus product.

Speaker Change #119: I'm I'm not seeing this related to the Ostomy sales in the U S I still see underlying a bit demand.

Speaker Change: And I've now taken the stance that I'm not going to get more positive until I can actually see it in our numbers.

Speaker Change #119: Yep.

Speaker Change #119: Okay. Thank you maybe just some quick follow ups, maybe Martin I'll still say me, but we are just reiterate we still see double digit volume growth in our bags and plates business in the acute channel in the U S. With this basically means that a lot of patients are coming out on a core plus product.

Speaker Change: So I'm still looking at a Chinese business that's sitting around mid-single, dated for this year.

Speaker Change #118: I still see underlying good demand.

Speaker Change: And then once we get to the end of the year, we'll start talking about guidance for next year.

Speaker Change: But right now, I'm not seeing a lot of reasons to be more optimistic.

Speaker Change #120: Okay that makes a ton of sense, maybe just one quick question also just reflecting on <unk> comments on the on FX and now we see a little bit of.

Speaker Change: Okay.

Speaker Change: Christian, maybe you could follow up on that, because you've also highlighted that you have three different kind of businesses and continents care.

Christian Villumsen: Okay. Christian, maybe you could follow up on that, because you've also highlighted that you have three different kind of businesses and continents care. Maybe I'm wrong, but my recollection was that last year's numbers was negatively impacted due to some back orders and collecting devices. So we're really lacking the comparable numbers. Could you give us a bit of an indication of what the underlying real continents care, so a catheter sales growth was doing last year versus last year is it, you know, comparably up 50 bips or anything that we can actually really try to figure out what is going on.

Let's call it some some unlucky event and now you're you're reaching this EBIT margin of 27% around that level, a little bit above but still about 27%.

Speaker Change: Maybe I'm wrong, but my recollection was that last year's numbers was negatively impacted due to some back orders and collecting devices.

Speaker Change: So we're really lacking the comparable numbers.

Christian Villumsen: How, you know, that's a bit far away from 30%; that's my first sort of observation. That's quite obvious.

Speaker Change #120: Now.

Speaker Change: Could you give us a bit of an indication of what the underlying real continents care, so a catheter sales growth was doing last year versus last year is it, you know, comparably up 50 bips or anything that we can actually really try to figure out what is going on.

Speaker Change #121: So that's a bit far away from 30%. That's my first sort of observation that's quite obvious.

Anders Lonning: But can you maybe just help us a little bit of, you know, how the trajectory of the EBIT margin expansion should look like back to the 30% also with flagging a little bit off of some headwinds going into the next fiscal year, that would be super helpful. Thank you. Yeah, so Martin, let me take your question around that. So I think I talked to some of the moving parts into into next year early and also at the meet the management back in June. So it's clear that we are expecting that our margin will improve as a result of some of these moving parts, especially raw materials; price levels are coming down.

Speaker Change #122: But can you maybe just help us a little bit of how the trajectory of the EBIT margin expansion should look like back to the 30% also with flattening a little bit off of some headwinds going into the next fiscal year.

Speaker Change: What's going on?

Christian Villumsen: What's going on? Thank you. So catheters are, they're meaningfully up Maya, which is also why the entire category, the entire continent's category is up by a full point. Catheters are growing fast and collecting devices that this also relatively significant share of the category still is a, of course, a drag on growth. It's about 15% of the total category with very limited growth in it. So if you know that, I think you can back what's met with what we're saying about catheters. Thank you.

Speaker Change: Thank you.

Maya Pataki: So catheters are, they're meaningfully up Maya, which is also why the entire category, the entire continent's category is up by a full point.

Speaker Change #122: Super helpful. Thank you.

Speaker Change #122: Yeah.

Speaker Change #123: Yeah. So let me take take care of your question around that so so I think I talked to some of the moving parts into into next year early and also at the meet the management back in June and so so it's clear that we are expecting that our margin will improve as a result of some of these are moving.

Speaker Change #118: Can you provide some more color on the magnitude of improvements around COGS inflation you've seen thus far and how should we be thinking about it going into next year?

Speaker Change: Catheters are growing fast and collecting devices that this also relatively significant share of the category still is a, of course, a drag on growth.

Speaker Change #118: Are there any offsets we need to be mindful of?

Speaker Change #118: Thank you for those.

Speaker Change #124: Pops, especially raw materials prices are coming down.

Speaker Change: It's about 15% of the total category with very limited growth in it.

Speaker Change #118: Let me speak to the CMS decision and then Anders can speak to, your question on COGS.

Speaker Change #118: So we were really not expecting a change in the fee schedule.

Anders Lonning: In patient levels are coming down. We continue to be prudent on costs. And we expect that also to continue into the following years. Andreas, and then on top of that we will also expect that the carousel's underlying margin will improve. We have an ambition that the carousel's business will grow on an average of 30% over a three-year period, and at the same time we will improve the margin until 25-26 to 20%. So those are some of the moving parts, but of course everything starts with the growth, and we are committed to deliver growth in the level of 8-10%.

Speaker Change #118: Of course, had there been a change, that would have been double good news.

Speaker Change: So if you know that, I think you can back what's met with what we're saying about catheters.

Speaker Change #124: Patient lives are coming down we continue to be prudent on costs.

Speaker Change #118: But the draft didn't propose a change in fee schedule.

Speaker Change #118: So for us, really, the big news here is that, CMS finally recognizes that technology matters.

Speaker Change #118: And this is just really good news for patients.

Speaker Change #118: It's really good news for anyone who cares about innovation.

Speaker Change #125: And we expect that also to continue into the following years and then on top of that you would also expect that the cares as underlying margin will improve and we have an ambition that the cares. This business will grow on an average of 30% or three year period and at the same time, you will improve the margin.

Speaker Change #118: And if you look back since, reimbursement was established for intermittent catheters in the U.S., the fee schedule didn't make that distinction.

Speaker Change #118: And so you've had really what I'd call a perversity in the U.S. market where a lot of players were incentivized to basically offer patients old technology that we would see in third world countries.

Speaker Change: Thank you.

Speaker Change #118: And this decision is a chance to change that.

Speaker Change #118: So it rewards innovation and it rewards companies that are concerned with that and not companies, that are concerned with and preoccupied with selling cheap products.

Speaker Change #118: Now, it's not a silver bullet.

Speaker Change: The next question comes from the line of needs, ground home, Carnegie.

Niels Granholm: The next question comes from the line of needs, ground home, Carnegie. Please go ahead. Thank you for taking my questions. First question on the CMS decision. Can you talk about the degree of switching, which takes place between the hospital and home care? So what proportion of patients would you estimate actually being switched back to uncoded as they return to home care?

Speaker Change: Please go ahead.

Speaker Change: Thank you for taking my questions.

Speaker Change: First question on the CMS decision.

Speaker Change: Can you talk about the degree of switching, which takes place between the hospital and home care?

Until 'twenty five 'twenty six or 220 per cent. So so those are some of the the moving parts, but of course everything starts with the growth and we are committed to deliver growth in the level of 8% to 10%.

Speaker Change: So what proportion of patients would you estimate actually being switched back to uncoded as they return to home care?

Anders Lonning: So scalability across our P&L will also contribute to the margin, and so we deliver the 30% into the next-to-CD period.

Speaker Change #125: So scalability across our P&L will also contribute to the margin.

Speaker Change: My second question is just a kind of housekeeping question on the calculation on your organic growth.

Christian Villumsen: My second question is just a kind of housekeeping question on the calculation on your organic growth. Is it correctly understood that you exclude product rationalization from the calculation of your organic growth? Thank you. Thank you, Nils. If you look at the market now in the US, you still probably have about 60% of volumes that are uncoded. I don't have accurate data because on the switching that takes place to kiss, we don't run those businesses.

Speaker Change #125: And so we deliver them.

Speaker Change: Is it correctly understood that you exclude product rationalization from the calculation of your organic growth?

Speaker Change #125: These 30% into the next strategic period.

Speaker Change: Thank you.

Christian Villumsen: Thank you so much, and that's a Christian Felist.

Speaker Change #125: Got it very clear. Thank you so much that's in our Christian for list.

Speaker Change: Thank you, Nils.

Speaker Change: If you look at the market now in the US, you still probably have about 60% of volumes that are uncoded.

Aizia Nour: The next question comes from the line of Aizia Nour, Morgan Stanley. Please go ahead.

Speaker Change #126: The next question comes from the line of I I use yeah, nor Morgan Stanley. Please go ahead.

Aizia Nour: Hi, good morning. Thanks for taking my question. Just standing in for Octavis. One question I had was on the Women's Health business. Do you observe any changes in patient behavior based on your commercial efforts so far and based on the demand trends you're seeing?

Speaker Change: I don't have accurate data because on the switching that takes place to kiss, we don't run those businesses.

Speaker Change #127: Hi, Good morning, Thanks for taking my question just standing in for Rob Davies. One question I had was on the women's health business do you observe any changes in patient behavior based on your commercial efforts, so far and based on the demand trends Youre seeing could this business continued to be in decline in 2025.

Speaker Change: We just know that it's happening, and you can also see from the fact that a large number of the distribution players have had a focus on driving on coded technology and on coded brands.

Christian Villumsen: We just know that it's happening, and you can also see from the fact that a large number of the distribution players have had a focus on driving on coded technology and on coded brands. I don't know the exact amount of what that is. We just know it's significant. And the whole, if you will, strategic opening that's coming now is that once the market is educated on these new codes, that this in effect becomes impossible.

Speaker Change: I don't know the exact amount of what that is.

Aizia Nour: Could this business continue to be in decline in 2025?

Aizia Nour: And then, second question is a really quick one on Centura Mio Black. When do you plan to launch this in the US, and have you been able to charge a premium for this product so far?

Speaker Change #128: And then second question just a really quick one on since you're a meal black when do you plan to launch this in the U S and have you been able to charge a premium for this production.

Christian Villumsen: Let me take those questions. The first one on Women's Health, I'm not really seeing a significant change in the dynamics and the category; the whole category is still depressed.

Speaker Change #129: So let me take those questions. The first one on women's health I'm I'm, not really seeing a significant change in the dynamics in the category that the whole category is a is it still the still depressed. It is a little too early we have a large number of oh.

Speaker Change: We just know it's significant.

Speaker Change: And the whole, if you will, strategic opening that's coming now is that once the market is educated on these new codes, that this in effect becomes impossible.

Christian Villumsen: It is a little too early. We have a large number of initiatives in motion, both on the sales force side, on the marketing side, on the education side, and of course I'm expecting that to also reap some results, but it's too early to judge. But this will also impact the Erology business moving into next year.

Speaker Change #129: Initiatives in motion.

Speaker Change: So the net net impact of that, we don't know what it is yet.

Christian Villumsen: So the net net impact of that, we don't know what it is yet. But we will, of course, invest heavily with the commercial muscle that we have to drive the conversion also to the new codes. But would you expect the signatures to absorb the entire marching compression that they would experience when more patients move to coded going forward? Well, if you decide to serve the demand, I mean, you're going to have to, you're going to have to.

Speaker Change #129: Both on the on the on the Salesforce side on the marketing side on the education side.

Speaker Change: But we will, of course, invest heavily with the commercial muscle that we have to drive the conversion also to the new codes.

Speaker Change #129: And of course, I'm expecting that to also reap some results, but it's too early to judge but this will also impact the urology business moving into a into next year.

Speaker Change: But would you expect the signatures to absorb the entire marching compression that they would experience when more patients move to coded going forward?

Christian Villumsen: So the growth that we've seen historically from Erology will not be as strong as it has been, but on the other hand, the 2% that we have in this quarter, we also believe clearly is the trough. We were impacted also by back orders in this quarter, and we're coming out of that.

Speaker Change #129: So the so the the the growth.

Speaker Change #130: Growth that we've seen historically from urology will not be as strong as it has been but on the other hand, the AR the 2% that we have in this quarter. We also believe it clearly is the trough. We were impacted also by back orders in this quarter and where we're coming out of that.

Speaker Change: Well, if you decide to serve the demand, I mean, you're going to have to, you're going to have to.

Speaker Change #100: So, of course, Niels, this then becomes a question on what will happen with the distribution landscape.

Christian Villumsen: So, of course, Niels, this then becomes a question on what will happen with the distribution landscape. And I think there you will see some level of consolidation on how many people will participate in that game. But that's notwithstanding the companies or the distributors that are partnered with us and have had good growth with us also have profitable growth even if you will, if you will, the hydrophilic margin that they get.

Christian Villumsen: To your question on Centura Mio Black, could you just repeat the question again? When do you plan to launch in the US for this product, and have you been able to charge a premium so far? I will have to just let me just check that. I think that we still have a couple of quarters to go before we're launching in the US. But I'll just revert with an accurate date, so you have it.

Speaker Change #130: To your question on soy meal black.

Speaker Change #101: And I think there you will see some level of consolidation on how many people will participate in that game.

Speaker Change #131: But could you just repeat the question again.

Speaker Change #132: When do you plan to launch in the U S. For this product and have you been able to charge a premium so far.

Speaker Change #102: But that's notwithstanding the companies or the distributors that are partnered with us and have had good growth with us also have profitable growth even if you will, if you will, the hydrophilic margin that they get.

Speaker Change #133: So I will have to just let me just check that I think that we still have a couple of quarters to go before where we're launching an app in the U S.

Speaker Change #102: Okay.

Speaker Change #102: All right, Niels, then to your second question around the product and rationalization.

Anders Lonning: Okay. All right, Niels, then to your second question around the product and rationalization. Now we are in the voice and respiratory care. It's related to the divestment of a small company we did end of Q1 called MC Europe that is reflected here. Okay.

Okay.

Speaker Change #133: I'll just I'll just revert with an accurate date. So you. So you have it you should not expect that the that the product comes with with a premier that launches into the existing price structure.

Speaker Change #102: Now we are in the voice and respiratory care.

Veronika Dubajova: Thank you.

Christian Villumsen: You should not expect that the product comes with the premium launches into the existing price structure. Thank you.

Speaker Change #103: It's related to the divestment of a small company we did end of Q1 called MC Europe that is reflected here.

Okay. Thank you.

Marianne Bulot: The next question comes from the line of Marianne Boulot, Bank of America. Please go ahead. Yes, good morning. Thank you for taking my question.

Speaker Change #134: The next question comes from the line of Bank of America. Please go ahead.

Speaker Change #103: Okay.

Speaker Change #103: Thank you.

Speaker Change #104: The next question comes from the line of Veronica Dubayova from City.

Veronika Dubajova: The next question comes from the line of Veronica Dubayova from City. Please go ahead. Hi guys, good morning and thank you for taking my questions. I have three please. I just want to circle back, Christian, to kind of how quickly you think this reimbursement change can translate into that change in the prescription paradigm. And I guess how much investment in education will you need to do on the physician level to ensure that the scripts are written for the correct codes and that physicians understand the value of the hydrophilic category.

Speaker Change #135: Yes, good morning.

Speaker Change #135: Yes. Good morning. Thank you for taking my question and maybe two question. The first one on the Halo wondering how has been the feedback since the launch in the U K and if you had any update regarding Germany and a second question on on the wound care. If we look at the advanced wound dressing side. So.

Marianne Bulot: Maybe two questions. The first one on Halo, wondering how has been the feedback since the launch in the UK and if you had any update regarding Germany. And the second question on one carry, if we look at the advanced one dressing side, so where you had the 10% organic, we're just wondering if there is any specific region that was stronger that led to this 10% growth. And maybe if you had a feedback as well on the US launch of the Silicon Fit franchise. Thank you, Marianne.

Speaker Change #104: Please go ahead.

Speaker Change #105: Hi guys, good morning and thank you for taking my questions.

Speaker Change #106: I have three please.

Speaker Change #107: I just want to circle back, Christian, to kind of how quickly you think this reimbursement change can translate into that change in the prescription paradigm. And I guess how much investment in education will you need to do on the physician level to ensure that the scripts are written for the correct codes and that physicians understand the value of the hydrophilic category.

Speaker Change #135: Where you had the 10% organically just wondering if there is any.

Speaker Change #136: It's a region that was stronger that led to the 10% growth and and maybe she had a feedback as well on the U S. Now that you have there.

Speaker Change #136: Silicon fifth franchise. Thank you.

Speaker Change #137: Thanks for taking my questions.

Speaker Change #137: Thank you Marianne so quickly on on Halo early days remember this is going to be a long category built.

Speaker Change #108: So apologies, it's just sort of a multi part, but if you can talk through what you specifically call a class in the industry need to do to do that and how long you think that might take and how much investment that might necessitate that would be helpful as a starting point.

Christian Villumsen: So apologies, it's just sort of a multi part, but if you can talk through what you specifically call a class in the industry need to do to do that and how long you think that might take and how much investment that might necessitate that would be helpful as a starting point. And then sort of related to that, I guess, you know, obviously your catheter business is both a wholesale and a distribution business.

Christian Villumsen: So quickly on HALO early days, remember this is going to be a long category build. So we're deep in the education effort of both patients and health care professionals in the UK. We're tracking well in the UK; still no answer from the German authorities, who are delayed in their response. So we don't know where this will land in Germany yet.

Speaker Change #138: I have two as well.

Speaker Change #138: So where we're deep in the AR in the education effort of both patients and health care professionals and are in the U K where.

Speaker Change #139: Where we're tracking well in the U K still no still no answer from the German authorities, who are delayed in their response and so we don't know where this will land in a in Germany.

Speaker Change #108: And then sort of related to that, I guess, you know, obviously your catheter business is both a wholesale and a distribution business.

Speaker Change #109: And so maybe from that half of a distributor if you can talk through whether you think there might be some backlash from some of the distributors towards your products given that you are the player who's more tactically pushed for this change that will be a detriment to their profitability.

Christian Villumsen: And so maybe from that half of a distributor if you can talk through whether you think there might be some backlash from some of the distributors towards your products given that you are the player who's more tactically pushed for this change that will be a detriment to their profitability. So that's my second question. And then my third question is on terraces and the 35% growth rate, I think when we started at the beginning of the year, your ambition had been to grow, but more than that for the year.

Speaker Change #140: And first, I would like to get back to your growth, particularly looking at the continence care growth, which is very solid with with the 8% growth.

Speaker Change #140: But following your very optimistic commentary at the meat management and all the divisional heads that were super excited about, you know, the reception of it, I'm a bit puzzled that we don't start to see this, you know, the positive feedback being reflected in organic growth.

Speaker Change #140: In Germany, yet on wound care as you'll recall from my in my opening remarks, the quarter is a little skewed by order patterns and in Germany.

Christian Villumsen: On one care, as you'll recall from my opening remarks, the quarter is a little skewed by water patterns in Germany ahead of a price increase in Germany. We're also getting good growth from the emerging markets. So you shouldn't expect as strong a quarter in Q4. I'm looking at a Q4 that's sitting at the mid-to-high single-digit type of range.

Speaker Change #140: Okay, thank you.

Speaker Change #140: And following on from that, how strong do you think keratosis is in other indications such as vascular and pressure ulcers?

Speaker Change #140: Maybe just one quick follow-up.

Speaker Change #141: Ahead of our ahead of a price increase in Germany. We're also getting good growth from from E emerging markets.

Speaker Change #140: Maybe, Martin, I'll just say, we still see double-digit volume growth in our bags-and-plates, business in the acute channel in the U.S., but this basically means that a lot of patients are coming out on the Cool Plus product.

Speaker Change #109: So that's my second question.

Speaker Change #110: And then my third question is on terraces and the 35% growth rate, I think when we started at the beginning of the year, your ambition had been to grow, but more than that for the year.

Speaker Change #140: Okay, that makes a ton of sense.

Speaker Change #142: You shouldn't expect a stronger quarter in Q4, yeah I'm looking at a Q4, that's sitting at the mid to high single digit type of range.

Christian Villumsen: The launch of the Biden Silicon Fed part in the U.S. still early days, but a good level of activity, a good opportunity pipeline.

Speaker Change #143: The launch of the <unk> bites and silicone fit part and in the U S still early days, but a good level of activity good opportunity pipeline.

Speaker Change #111: Just curious if you think there's anything you can do to get that course to accelerate as you move into the fourth quarter and into next year or this is it and given the changes in the market.

Christian Villumsen: Just curious if you think there's anything you can do to get that course to accelerate as you move into the fourth quarter and into next year or this is it and given the changes in the market.

Speaker Change #112: We should be more anchoring towards the slightly lower growth rate here, going forward.

Christian Villumsen: We should be more anchoring towards the slightly lower growth rate here, going forward. Thanks.

Speaker Change #112: Thanks.

Christian Ryan: The next question comes from the line of Christian Ryan.

Speaker Change #143: Could you...

The next question comes from the line of Christian or I Am That's K Bank. Please go ahead.

Speaker Change #143: Maybe just one quick question, also just reflecting on Andrew's comment on FX, and now we see, a little bit of, let's call it some unlucky event, and now you're reaching this EBIT margin of 27% around that level, a little bit above, but still around 27%.

Speaker Change #113: So, Veronika, thank you for three good questions.

Christian Villumsen: So, Veronika, thank you for three good questions. I'll say on the catheter opportunity related to the CMS decision, we still need to work this through with our team on exactly how we're going to go about it. I'm not imagining that this would trigger a significant increase in, if you will, in cost to do this, we have a very sizable setup and a very sizable muscle in the U.S, that for a long time has been driving the conversion to hydrophilic.

Christian Ryan: Dan Skabank, please go ahead. Hi, hello Christian and Anderson. Thank you for taking my questions. I have two as well. The first to the CMS coding update and given that this is first implemented on a first of January, is there an opportunity that we might actually see a differentiation in the fees for the different categories when the fee schedule for that year is announced? I would imagine about a year's time. And maybe I'll tag on to that. I would think from the discussion that we've already had on this call that we could expect some lobbying from distributors arguing that they should have get a higher reimbursement level for the coded categories.

Speaker Change #143: That's a bit far away from 30%.

Speaker Change #143: Sorry, could you maybe give us an indication when you do anticipate or when you do expect to see an acceleration in continence care growth coming through because of the rollout of LUJA?

Speaker Change #143: Hi, Hello, Christian and I listen I. Thank you for taking my questions I have two as well the first to say to the CMS coding update and and given that this is first implemented on our first of January and is there an opportunity that we might actually see a differentiation in the.

Speaker Change #114: I'll say on the catheter opportunity related to the CMS decision, we still need to work this through with our team on exactly how we're going to go about it.

Speaker Change #143: That's my first sort of observation.

Speaker Change #143: That's quite obvious, but can you maybe just help us a little bit of how the trajectory, of the EBIT margin expansion should look like back to the 30%, also with flagging a little bit of some headwinds going into the next fiscal year?

Speaker Change #143: That would be super helpful.

Speaker Change #143: That would be my first question.

Speaker Change #143: Thank you.

Speaker Change #115: I'm not imagining that this would trigger a significant increase in, if you will, in cost to do this, we have a very sizable setup and a very sizable muscle in the U.S, that for a long time has been driving the conversion to hydrophilic.

Speaker Change #144: A vies for the different categories when the fee schedule for that Yeah, It's announced and I would imagine about a year's time.

Speaker Change #144: Yeah.

Speaker Change #144: Maybe just to tag onto that I I would I.

Speaker Change #145: I would think from the discussion that we've already had on this call that a we could expect some lobbying from distributors.

Speaker Change #116: And of course, now we are now getting the tailwind from the authorities actually recognizing the distinction and technology that we've been talking about for, I think the original reimbursement got introduced in 0809, something like that, so we've been driving this for a long time.

Christian Villumsen: And of course, now we are now getting the tailwind from the authorities actually recognizing the distinction and technology that we've been talking about for, I think the original reimbursement got introduced in 0809, something like that, so we've been driving this for a long time. But it's not like I said in my opening remarks, it's not a silver bullet, the education needs to happen. And you need to cover thousands of customers, you need to work through a very large number of payers, so of course it will be a prolonged push.

Speaker Change #146: And that they should get a higher reimbursement level for the <unk>.

Speaker Change #147: Coded cat categories. So is that a sort of a possible outcome. That's the first question and then the second question is to the gross margin.

Christian Ryan: So is that a possible outcome? That's the first question.

Speaker Change #147: And then looking at the second question, it will be around China.

Speaker Change #147: Could you give us just a bit of an update on what is happening in the market and whether you've got a bit of a better.., feeling for when that market could start to recover.

Speaker Change #147: Thank you.

Anders Lonning: And then the second question is to the gross margin. So when I try to back out the acquisitions of ATOS and Kerasis from the gross margin, the quarter, the gross margin is still below 66 percent. Whereas if we go back to the period prior to these two acquisitions, it was sort of comfortably in the range of 67 to 69 percent. So one to three percentage points higher.

Speaker Change #148: So and when I try to back out the acquisitions of asos and terrorists from the gross margin in the quarter. The gross margin is still below a 66% and whereas if we go back to the period. Prior to these two acquisitions. It was sort of comfortably in the range of 67.

Speaker Change #117: But it's not like I said in my opening remarks, it's not a silver bullet, the education needs to happen.

Speaker Change #118: And you need to cover thousands of customers, you need to work through a very large number of payers, so of course it will be a prolonged push.

Speaker Change #149: 69%, so one to three percentage points higher.

Speaker Change #118: But I think net net good news for patients, good news for people who believe in the technology.

Christian Villumsen: But I think net net good news for patients, good news for people who believe in the technology. The second part of your catheter questions related to whether this is a backlash, remember that the work here has now been led by, it is a coalition of manufacturers. And I would say, I also think the distributors should be concerned that patients actually get on good technology. And this is also what CMS is basically spelling out now, that there is evidence that this hydrophilic technology does make a difference for a large number of patients and it, therefore, it deserves separate codes.

Anders Lonning: And as can you talk about what's the main built versus where you were at that time and how plausible the pathway back for the, say, old color plus excluding ATOS and Kerasis is to that gross margin level. Thank you.

Speaker Change #150: And just can you talk about what's the main delta versus where you were at that time.

Speaker Change #118: The second part of your catheter questions related to whether this is a backlash, remember that the work here has now been led by, it is a coalition of manufacturers.

And and how plausible the pathway back for the say old cooler Plas, excluding eight doesn't care. If this is a true to that gross margin level. Thank you.

Anders Lonning: Thank you, Christian, for really good questions. Yeah, so I think the reason that the CMS has put in place now on implementation period for Gen1, 2026 is that they recognize that the change here in coding will affect a lot of commercial payers also. I don't have at the stage an indication that we're going to be looking at a different fee schedule. Of course, I'd welcome that, but I don't have an indication that that will happen. In fact, the CMS document quite explicitly says that there's no change to the fee schedule. So if that happens, it will be, of course, a welcome development on our part either through an increase in hydrophilic reimbursement, or, if you will, a decrease in non-coded.

Speaker Change #150: Thank you Maja, two good questions.

Thank you Christian to a really good two really good questions. Yeah. So the I think that the reason that the that the CMS has put in place now on implementation period for Jan One 2026 is that they recognize that the the change here and coding will affect a lot of <unk>.

Speaker Change #118: And I would say, I also think the distributors should be concerned that patients actually get on good technology.

Speaker Change #150: So the code change and the reason that the CMS has proposed an implementation date of January 1 is that they recognize that this is not just going to happen, need to happen, if you will, for Medicare.

Speaker Change #150: Yeah, so Martin, let me take your question around that.

Speaker Change #119: And this is also what CMS is basically spelling out now, that there is evidence that this hydrophilic technology does make a difference for a large number of patients and it, therefore, it deserves separate codes.

Speaker Change #150: This will need quite a bit of change across a very large number of commercial payers.

Speaker Change #150: So there will be a lot of work associated with that.

Speaker Change #150: But we will, of course, be focused hard on helping make this happen and that this becomes a reality and that the intent behind the policy also comes to fruition.

Speaker Change #150: So net-net, very positive news.

Speaker Change #151: Payers also I don't have at the state as an indication that we're going to be looking at a different a different fee schedule of course, I'd I'd want I'd welcome that.

Speaker Change #119: But, of course, they are more expensive products, so they will put some pressure on margin.

Christian Villumsen: But, of course, they are more expensive products, so they will put some pressure on margin. On caruses, we're still on plan. We are seeing that on the LCD that it's a bit harder to initiate new accounts in the outside hospital setting. But we're still on plan, acceleration on the business will come from, of course, a decision, hopefully a positive decision on LCD. And then the continued commercial expansion as we get people up the productivity curve. That's helpful, thanks Christian.

Speaker Change #151: But I I don't have an indication that that that will happen in fact, the the the seamless document quite explicitly says that theres no change to the to the fee schedule. So if that happens.

Speaker Change #119: On caruses, we're still on plan.

Speaker Change #119: We are seeing that on the LCD that it's a bit harder to initiate new accounts in the outside hospital setting.

Speaker Change #152: It will be of course, a welcome development on our part either through an increase in hydrophilic hydrophilic reimbursement or if you will it decrease in our non coated.

Speaker Change #119: But we're still on plan, acceleration on the business will come from, of course, a decision, hopefully a positive decision on LCD.

Anders Lonning: I think the rational system, of course, would pay more for modern technology than it would for all technology. Our view has always been Christian that the current reimbursement levels were adequate to support modern technology, and that the perversity of the U.S. system was that it didn't distinguish between modern and old technology, and that comes in now, and that I think is also what will drive the change, that it will be significantly more challenging to drive this switching behavior. But of course, this assumes that we can educate the market, physicians, and consumers still.

Speaker Change #152: I think the the.

Speaker Change #119: And then the continued commercial expansion as we get people up the productivity curve.

Speaker Change #152: The rational system of course will pay more for modern technology than it would for for all technology. Our view has always been question that the that the current reimbursement levels were adequate to support modern technology and that the the perversity of the U S system was that it didn't distinguish between modern and old technology that comes in.

Speaker Change #120: That's helpful, thanks Christian.

Speaker Change #121: And Jason, can I just go back to that first question.

Veronika Dubajova: And Jason, can I just go back to that first question. I mean, I guess the way to ensure that you get the right script written is, I mean, my question is really, you are going to have to educate a different customer, right? I mean, I think you've been focusing your education on the patient, are you going to have to focus more on the physician to make sure that they're writing the correct script?

Speaker Change #122: I mean, I guess the way to ensure that you get the right script written is, I mean, my question is really, you are going to have to educate a different customer, right?

Speaker Change #152: Now that I think is also what will drive the change that that.

Speaker Change #123: I mean, I think you've been focusing your education on the patient, are you going to have to focus more on the physician to make sure that they're writing the correct script?

Speaker Change #152: It will be significantly more challenging.

Speaker Change #123: We've been doing both, Veronica also historically. So the, our strategy has always been...

Veronika Dubajova: We've been doing both, Veronica also historically. So the, our strategy has always been... If you will, against or with a headwind from, if you will, a dealer incentive to vote for a non-coated product, the recipe has always been to drive demand, clinical demand and consumer demand, so we've been focused on educating clinicians for many years and we will continue that process.

Speaker Change #152: To drive this switching but switching behavior are bought up.

Speaker Change #152: Of course this assumes that we can educate the market physicians and consumers are still.

Speaker Change #150: So I think I talked to some of the moving parts into next year early and also at the, meet the management back in June, so it's clear that we are expecting that our margin will improve as a result of some of these moving parts, especially raw materials, price levels are coming down, inflation levels are coming down.

Speaker Change #150: We continue to be prudent on costs, and we expect that also to continue into the following, year.

Anders Lonning: Yeah, and then Chris, let me take your second question around the gross margin.

Speaker Change #150: And then on top of that, we will also expect that the Keres' underlying margin will improve.

Speaker Change #153: Yeah, and Chris Let me take your second question around the gross margin and <unk>.

Speaker Change #124: If you will, against or with a headwind from, if you will, a dealer incentive to vote for a non-coated product, the recipe has always been to drive demand, clinical demand and consumer demand, so we've been focused on educating clinicians for many years and we will continue that process.

Anders Lonning: And yes, before acquisitions of answers, carousels, our gross margin for the remaining part of the business is down in the level of two percentage points. And it is really driven by the significant higher input costs that we have seen over the last couple of years: higher energy, higher inflation in Hungary, and also the ramp up of cost at Costa Rica. So that has really impacted our gross margin for our, you can say, main business.

Speaker Change #154: Yes before acquisition, so that's us keratosis, our gross margin for the remaining part of the business is down in the level of two percentage points and it is really driven by the significant higher input costs that we have seen over the last couple of years.

Speaker Change #124: Okay, thanks, and sorry, one final, one quick reminder of what proportion of scripts are products specific in the US market at the moment?

Veronika Dubajova: Okay, thanks, and sorry, one final, one quick reminder of what proportion of scripts are products specific in the US market at the moment? Very low. Okay, thank you so much.

Speaker Change #155: Higher energy high inflation in Hungary.

Speaker Change #155: And also.

Speaker Change #155: The ramp up of cost at Costa Rica, so so.

Speaker Change #124: Very low.

Speaker Change #124: Okay, thank you so much.

Speaker Change #155: It has really impacted our gross margin for a four hour you can see main business.

Speaker Change #124: The next question comes from the line of Graham Doyle from UBS.

Graham Doyle: The next question comes from the line of Graham Doyle from UBS. Please go ahead. Good morning, thanks guys.

Anders Lonning: And when we look ahead, that's also why we are becoming optimistic that the inflation levels are coming down, energy are coming down, and also the salary levels. I also have an expectation that it will come down to lower levels into 25. So that's how we see it. And the pricing increases we have actually experienced over the last couple of years have not been able to compensate for the significant pricing increases on the input cost. Great, that makes sense.

Speaker Change #156: And and when we look at hit that's also why we are becoming are optimistic that the inflation levels are coming down energy are coming down and also the salary levels. I also have an expectation that it will come.

Speaker Change #124: Please go ahead.

Speaker Change #124: Good morning, thanks guys.

Graham Doyle: Just a couple on, just following from Veronika's questions there, in terms of your exposure in concerns or in catheters, roughly, how much is, is via Medicare versus the commercial insurance, presumably the vast majority, and then in terms of the mechanism under this new reimbursement, when it comes to the actual prescription, so it gets written for, let's call it the correct code now. Presumably, there's still that sort of discretion, narrower, but still discretion in terms of which manufacturer the distributor then chooses. We just feel to know how specific that can get.

Come down to lower levels into 25. So it was so so that's that's how we see it and the the price increases we have actually experienced over the last couple of years have not been able to compensate for the significant price increases.

On the input cost.

Speaker Change #156: Great that makes sense. Thank you very much.

Graham Doyle: Presumably, there's still that sort of discretion, narrower, but still discretion in terms of which manufacturer the distributor then chooses.

Anders Lonning: Thank you very much.

Shabanji Gupta: The next question comes from the line of Shabanji Gupta, HSBC. Please go ahead. Hi, thanks for taking my question.

Speaker Change #156: The next question comes from the line of Shebang Gupta HSBC. Please go ahead.

Graham Doyle: We just feel to know how specific that can get.

Graham Doyle: And then one quick on given how speedy the proposal and update was different, but for this savers the wound LCD.

Christian Villumsen: And then one quick on given how speedy the proposal and update was different, but for this savers the wound LCD. We've seen some other LCDs withdrawn last week in other categories. And have you any sense as to when we might get an answer on that? Has there been any more discussion around it? And are physicians expecting it today, given we're already into late August night? Thank you very much. Thank you, Graham.

Speaker Change #157: Hi, Thanks for taking my question.

Shabanji Gupta: My first question is on continent's guess. So could you give us a split of volume versus price increase in continent for Q3? Was there any increase in reimbursement prices? And also regarding the new policy on catheters, you mentioned that 70% of your catheter revenue is from hydrofilic, and some of your peers have mentioned about 60%.

Speaker Change #158: First question is on continents guess so.

Shebang Gupta: You gave us a split off volume wasn't price increase in content in Q3 was there any increase in reimbursement places.

Graham Doyle: We've seen some other LCDs withdrawn last week in other categories.

Graham Doyle: And have you any sense as to when we might get an answer on that?

Speaker Change #160: Oh I'm sorry regarding the new policy on Catheters are you you mentioned that 70% of you got it.

Graham Doyle: Has there been any more discussion around it?

Graham Doyle: And are physicians expecting it today, given we're already into late August night?

Speaker Change #161: Our revenues are from hydrophilic anchor Murphy appears has mentioned about 60%.

Graham Doyle: Thank you very much.

Graham Doyle: Thank you, Graham.

Shabanji Gupta: So when it is already the predominant type of catheters, so what really did want to reach from this policy is just volume increase from prescription.

Speaker Change #126: So the short answer on, if you will, the pair distribution of the market is that we don't have a strong data on that.

Christian Villumsen: So the short answer on, if you will, the pair distribution of the market is that we don't have a strong data on that. I can't look internally on all the, for all the plants that our distributor partners serve, but I would imagine that it probably follows the broader population. Distribution, distribution. And of course, we still have to win, we still have to win with the brand, but we happen winning with the brand for more than a decade.

Speaker Change #162: It was already at a pretty dominant type of capital released advantage from this policy. Its just a volume increase from description.

Speaker Change #127: I can't look internally on all the, for all the plants that our distributor partners serve, but I would imagine that it probably follows the broader population.

Shabanji Gupta: And second on your midterm margin targets for cadres is you're expecting over 20% in 25, 26%. So how much of that is dependent on the top line growth?

Speaker Change #163: And second on your margin target Oh, let's look out as soon as you're expecting over 20% and 25 26. So how much of that is dependent on the top line growth.

Speaker Change #127: Distribution, distribution.

Speaker Change #127: And of course, we still have to win, we still have to win with the brand, but we happen winning with the brand for more than a decade.

Shabanji Gupta: And third on China has to meet care business, which has been weak for quite a while now. So is there some loss of market share? Could you help understand what exactly is happening there?

Speaker Change #164: On China After me, Oh, God business, which has been weak for quite a while now so is there some loss of market share could you help understand what exactly is happening there.

Speaker Change #127: And this will now happen on the back of of a luge launch that our belief is that this will set a new standard in the category also in the US.

Christian Villumsen: And this will now happen on the back of of a luge launch that our belief is that this will set a new standard in the category also in the US. And I'll just reiterate what I said earlier that the luge launch is by now the most successful or fastest uptake that we've ever had in the catheter category. So we feel optimistic about our position and we'll make it tough to compete.

Christian Villumsen: Thank you. Let me see if I remember all of what you asked for. So if you look at the continent's care growth, it's driven by growth across the speedy cath portfolio, but mostly by the new launches. So this is Luja; it's the recent set launch that we have, and in addition, also really good growth from the speedy cath portfolio in emerging markets. We have, and I'll remind you that, of course, we have higher pricing on Luja. So there is a mixed effect in the growth also, but the when I look at the launch performance, we are well ahead on value.

Speaker Change #163: Q.

Speaker Change #163: Thank you let me let.

Speaker Change #165: Let me see if I I remember all of what you've asked for so if you look at the the continence care growth.

Speaker Change #127: And I'll just reiterate what I said earlier that the luge launch is by now the most successful or fastest uptake that we've ever had in the catheter category.

Speaker Change #165: It's it's driven by growth across the speedy caf portfolio.

But mostly by the new launches. So this is a loser, it's and it's the the recent set launch that that we have and in addition, also really good growth from the speed of cat portfolio in emerging markets, we have and I'll remind you that of course, we have higher pricing on lucha.

Speaker Change #165: I'll say on LUJA, I am still very optimistic.

Speaker Change #165: For us, intermittent catheters, which is the main category, it's the bowel category, and then it's a category of collecting devices.

Speaker Change #127: So we feel optimistic about our position and we'll make it tough to compete.

Speaker Change #165: If you look at the underlying growth of the catheter business, it is sitting very well.

Speaker Change #165: And that's also why the entire category is up a full point compared to last year.

Speaker Change #165: The male catheter is in 13 markets. It is right now shaping up to be the strongest launch we've ever done in continence care.

Speaker Change #165: And the FEMA product is now, by now, only in four markets.

Speaker Change #165: Remember, Maja, it's a chronic category, so we're starting to wind up the flywheel.

Speaker Change #165: And this is, this was, this is the first point, but of course we're pushing hard that the product gets into as many customers' hands as possible.

Speaker Change #127: On the LCD, we have no news to report.

Christian Villumsen: On the LCD, we have no news to report. I'm still expecting that we get a decision sometime in the fall. Thank you very much. Super helpful. Thanks, guys. Thank you very much for taking my questions.

Speaker Change #127: I'm still expecting that we get a decision sometime in the fall.

Speaker Change #165: So there there is a there is a mix effect in the graph also but the one when I when I look at the when I look at the the the launch performance. We are well ahead on value. We are well ahead on volume.

Speaker Change #165: We are ahead of the launch plan that we have pretty consistently across all the markets that we're in, meaning that customers are voting, in favor of LUJA and the technology.

Speaker Change #127: Thank you very much.

Speaker Change #165: So this will, of course, continue into next year and the next strategic period.

Speaker Change #127: Super helpful.

Speaker Change #127: Thanks, guys.

Christian Villumsen: We are well ahead on volume.

Christian Villumsen: William. If I look at the, I think the second question was to the distribution of volume and value of our business in the U.S. When we say IC or coded, coded technology in the U.S. 70 percent of our business is on that, but that's not volume. That's a value number. I'd say if I look at the market today, our assessment about 60 percent of that market still needs to be converted. Still needs to be converted. So there are a lot of patients who are on all technology, and there's been a lot of people in that market who've invested in driving all technology.

Speaker Change #127: Thank you very much for taking my questions.

Speaker Change #166: If I look at the I think the second question was to the distribution of volume and in value of our business in the U S.

Speaker Change #127: I'll just take one for now that since most of my questions have been answered.

Martin Parkhi: I'll just take one for now that since most of my questions have been answered. Just on the supply disruption, can you maybe just elaborate a little bit on exactly what happened here? And just, you know, how sure are you that this will be fixed in two-fall? And just from, you know, an observation from one of your peers, they've been saying that they've taken negative access in the U.S, in North America. Is that also a part of the explanation while you might have seen a little bit of a weaker growth compared to your expectations here?

Speaker Change #127: Just on the supply disruption, can you maybe just elaborate a little bit on exactly what happened here?

Speaker Change #166: When we say a I C or codell coated technology in the U S. 70% of our business is on that but that's not volume that's a value number I'd say, if I look at the market today, our assessment about 60% of that market is still needs to be converted.

Speaker Change #127: And just, you know, how sure are you that this will be fixed in two-fall?

Speaker Change #165: We still have very large volumes of patients in the U.S. market that are on uncoded products and they really shouldn't be.

Speaker Change #165: Yeah.

Speaker Change #127: And just from, you know, an observation from one of your peers, they've been saying that they've taken negative access in the U.S, in North America.

Speaker Change #165: So thanks, Christian.

Speaker Change #166: Still needs to be converted so there are a lot of patients who are on old technology and there's been a lot of people in that market, who have invested in driving old technology.

Speaker Change #165: Then to your second question around, you can say, cost development, into the next financial year.

Speaker Change #127: Is that also a part of the explanation while you might have seen a little bit of a weaker growth compared to your expectations here?

Speaker Change #127: That's my question.

Christian Villumsen: So, of course, this should change. And more than anything, I think it will be driven by a change in volume. So more patients will, in effect, come on to hydrophilic technology. It will be much more difficult to switch people to switch people away. It's just given the dedicated codes.

Speaker Change #165: So I would say that the moving parts that we talked about at the meet the management early June still stands.

Speaker Change #127: Thank you.

Speaker Change #166: So of course Oh.

Speaker Change #165: So I'm still looking into raw material.

Speaker Change #127: Thanks, Martin.

Speaker Change #165: Electricity prices are coming down as a result of lower inflation levels.

Speaker Change #128: Yes, so the effort to consolidate two distribution centers into one, we run into some, if what I'll call just operational snacks.

Martin Parkhi: That's my question. Thank you. Thanks, Martin. Yes, so the effort to consolidate two distribution centers into one, we run into some, if what I'll call just operational snacks. Of course, I'm not satisfied with this. We didn't plan for this, and whenever a customer places an order with us, and we're not able to fulfill it, we're not living up to the basic promise that the company is making. I can assure you that the people who are responsible for this know that we are not satisfied with this, but we have a lot of people working on bringing productivity back up.

Speaker Change #165: As I said, we have, also now hedged electricity prices at a lower level for next year compared to this year.

Speaker Change #166: This this this should change and more than more than anything I think it will be it will be driven by a change in in volume. So so more patients will in fact come on come onto our hydrophilic hydrophilic technology.

Speaker Change #165: And we will also continue to be prudent in terms of our spending across the organization.

Speaker Change #165: We will continue to ramp up cost in Costa Rica.

Speaker Change #165: We will also see, you can say, negative, impact from curses as a result of their lower margin.

Speaker Change #165: And basically, the new thing compared to what we talked about back in early June, that is, if FX. FX is giving us more headwind and also into Q4 than we saw earlier this year and, especially driven by the US dollar and some selected emerging markets currencies.

Speaker Change #165: But in general, the main drivers that we are looking into from this year into next year, as we described early June, still stands.

Speaker Change #165: And just a follow-up while we are on the topic of cost, please.

Speaker Change #165: Thank you.

Speaker Change #165: At the OPEC, side, should we continue to expect higher commercialization costs and or the extraordinary costs related to the new distribution center in the US expected to continue to next year as well?

Speaker Change #129: Of course, I'm not satisfied with this. We didn't plan for this, and whenever a customer places an order with us, and we're not able to fulfill it, we're not living up to the basic promise that the company is making. I can assure you that the people who are responsible for this know that we are not satisfied with this, but we have a lot of people working on bringing productivity back up. And we're already seeing productivity improve, and we are still expecting with everything that we know that by the end of the quarter, we will be out of the woods and have a good performance again.

Speaker Change #130: I'm not seeing this related to the ostomy sales in the U.S.

Speaker Change #167: It will be a much much more difficult to switch people to switch people away. It just given the the dedicated coats and then the final question you had on Ostomy China.

Speaker Change #167: On China, unfortunately, not much news to report, I'd say surgical activity levels are still robust across the different provinces in China.

Christian Villumsen: And then the final question you had on Austamy China. So like I said to an earlier question, a pretty good activity. If I look at surgeries and the inflow of patients, much more cost-conscious consumers, a way more challenging consumer channel, where some of the local low-cost players are picking up some share. And so that is part of the game now when Chinese consumers are where they are. And I am really not willing to become more positive until I can see it in the actual behavior by the Chinese consumers. So this is still a business that's sitting at mid-single-digit, mid-single-digit plus for now.

Speaker Change #167: We're seeing decent patient enrollment coming into the business, but the spend levels and the patient values are still depressed compared to pre-COVID.

Speaker Change #167: Yeah, So like I said to an earlier question.

Speaker Change #168: Pretty good activity if you will.

Speaker Change #168: If I look at surgeries in the inflow of patients.

Martin Parkhi: And we're already seeing productivity improve, and we are still expecting with everything that we know that by the end of the quarter, we will be out of the woods and have a good performance again. I'm not seeing this related to the ostomy sales in the U.S. I still see underlying good demand. Thank you.

Speaker Change #168: Much more cost conscious consumers are a way more challenging consumer channel.

Speaker Change #169: Where are where some of the local low cost players are picking up are picking up some share.

Speaker Change #169: And and so that that is part of the game now when Chinese consumers are where where they are and that I am I'm really not.

Speaker Change #131: I still see underlying good demand.

Speaker Change #169: And I've now taken the stance that I'm not going to get more positive until I can actually see it in our numbers.

Speaker Change #169: Willing to take to become more positive until I can see it in the actual behavior by the by the Chinese consumers.

Speaker Change #132: Thank you.

Speaker Change #133: Maybe Martin, we still see double-digit volume growth in our backs and plates business in the acute channel in the U.S, with this basically means that a lot of patients are coming out on a coal plus product.

Christian Villumsen: Maybe Martin, we still see double-digit volume growth in our backs and plates business in the acute channel in the U.S, with this basically means that a lot of patients are coming out on a coal plus product. Okay, it makes a ton of sense.

Speaker Change #169: So I'm still looking at a Chinese business that's sitting around mid-single digit for this year.

Speaker Change #169: This is still a business that's sitting at mid single digit mid single digit plus for for now.

Speaker Change #169: And then once we get to the end of the year, we'll start talking about guidance for next year.

Speaker Change #169: But right now, I'm not seeing a lot of reasons to be more optimistic.

Christian Villumsen: And the one on your mid-term care system margin, how much of the independent on top line, especially if there is a possibility that the product might not be covered under Medicare. I'm sorry, I'm not getting that question. What's the question? So you mentioned you are expecting 20% margin for creating margin for care services in 25, 26, so how much does this independent on top line? Well, of course the business needs to continue growth. And so we need to continue to grow at a care of 30%, we need to deliver that. This is a business that starts with a very favorable growth margin position.

I've got one on your midterm margin how much of that extra dependent on top line, especially if there is a possibility of that.

Speaker Change #169: Okay.

Speaker Change #134: Okay, it makes a ton of sense.

Speaker Change #135: Maybe just one quick question also, just reflecting on Anders' comment on FX, and now we see a little bit of, let's call it, some unlucky event.

Anders Lonning: Maybe just one quick question also, just reflecting on Anders' comment on FX, and now we see a little bit of, let's call it, some unlucky event. And now you're reaching this EBIT margin of 27% around that level, a little bit above, but still around 27%. How, you know, that's a bit far away from 30%, that's my first sort of observation that's quite obvious. But can you maybe just help us a little bit of, you know, how the trajectory of the EBIT margin expansion should look like back to the 30% also with flagging a little bit of some headwinds going into the next fiscal year. That would be super helpful. Thank you.

It might not be covered under Medicare.

Speaker Change #170: I'm, sorry, I'm not getting that question, what's the question.

Speaker Change #136: And now you're reaching this EBIT margin of 27% around that level, a little bit above, but still around 27%.

Speaker Change #169: So my expectation, as I just said earlier, we are expecting something around 50 million, extraordinary costs split between Q3 and Q4 for this year.

Speaker Change #170: Oh. So you have mentioned you are expecting to any person margin accretive margin for cancers in 'twenty five 'twenty six how much yes. This is Jim.

Speaker Change #169: Moving into next year, we expect the challenges we are currently having at the distribution center to be solved, and we will not have any extraordinary costs.

Speaker Change #137: How, you know, that's a bit far away from 30%, that's my first sort of observation that's quite obvious.

Speaker Change #169: That's my current expectation.

Speaker Change #170: Yeah.

Speaker Change #169: Perfect.

Speaker Change #169: We have an ambition that the Keres' business will grow on an average of 30% over a three-year period.

Speaker Change #171: Well of course, the business needs to continue to grow.

Speaker Change #138: But can you maybe just help us a little bit of, you know, how the trajectory of the EBIT margin expansion should look like back to the 30% also with flagging a little bit of some headwinds going into the next fiscal year.

Speaker Change #172: And so we need to continue to grow at a CAGR of 30% we need to deliver that.

Speaker Change #169: Thank you.

Speaker Change #169: And at the same time, we will improve the margin until 25, 26 to 20%.

Speaker Change #169: The next question comes from the line of Maya Pataky, Kepler Chevreux.

Speaker Change #169: So those are some of the moving parts.

Speaker Change #169: But of course, everything starts with the growth, and we are committed to deliver growth in the level of 8% to 10%.

Speaker Change #173: This is a this is a business that starts with a very favorable gross margin position.

Speaker Change #138: That would be super helpful.

Speaker Change #138: Thank you.

Christian Villumsen: So it also, it scales very favorably, but we need the growth. It's not a cost exercise.

Speaker Change #174: So it it also it scales very favorably, but but we need we need the growth.

Speaker Change #139: Yeah, so Martin, let me take your question around that.

Anders Lonning: Yeah, so Martin, let me take your question around that. So I think I talked to some of the moving parts into, into next year early and also at the meet the management back in June. So it's clear that we are expecting that our margin will improve as a result of some of these moving parts, especially raw materials, price levels are coming down. In patient levels are coming down, we continue to be prudent on costs.

Speaker Change #140: So I think I talked to some of the moving parts into, into next year early and also at the meet the management back in June.

Speaker Change #173: Yeah.

Speaker Change #173: It's not a cost exercise.

Speaker Change #173: Yeah.

Speaker Change #141: So it's clear that we are expecting that our margin will improve as a result of some of these moving parts, especially raw materials, price levels are coming down.

Marco Cox: The last question comes from the line of Marco Cox from Barclays. Please go ahead. Hi there, Marco from Barclays speaking on behalf of Hassan Albuquil. Most of my questions have already been asked, but I just had one follow-up question on care sets. So you mentioned the fact that you're seeing it harder to initiate new accounts outside of the hospital set. I was just wondering, to what extent do you see this? Is it only minute, or I haven't seen it slow down at class the rate? And following on from that, how strong do you think the virus is in other indications such as vascular and pressure losses?

Speaker Change #173: The last question comes from the line of Mark Wilcox from Barclays. Please go ahead.

Speaker Change #173: Christian, maybe a quick follow-up on that because you've also highlighted that you have three different kind of businesses in continence care.

Speaker Change #173: Please go ahead.

Speaker Change #173: So scalability across our P&L will also contribute to the margin.

Speaker Change #173: And so we deliver the 30% into the next strategic period.

Speaker Change #173: Yes, good morning.

Speaker Change #173: Got it.

Speaker Change #173: Maybe I'm wrong, but my recollection was that last year's numbers was negatively impacted due to some back orders on collecting devices.

Speaker Change #173: Hi, there Mark Hurd from Barclays I'm speaking on behalf.

Speaker Change #141: In patient levels are coming down, we continue to be prudent on costs.

Speaker Change #175: Most of my questions have already been all I just had one follow up question on carriages.

Speaker Change #173: Thanks for taking my questions.

Speaker Change #173: Very clear.

Speaker Change #141: And we expect that also to continue into the following years.

Anders Lonning: And we expect that also to continue into the following years. Andreas, and then on top of that we will also expect that the carousel's underlying margin will improve. We have an ambition that the carousel's business will grow on an average of 30% over a three-year period, and at the same time we will improve the margin until 25-26 to 20%. So those are some of the moving paths, but of course everything starts with the growth and we are committed to deliver growth in the level of 8-10%, so scalability across our P&L will also contribute to the margin, and so we deliver the 30% into the next-to-CD period.

Speaker Change #173: I have two as well.

Speaker Change #142: Andreas, and then on top of that we will also expect that the carousel's underlying margin will improve.

Unknown Executive: Thank you so much, and I have a question for this.

Speaker Change #176: So we're really lacking the comparable numbers.

Speaker Change #176: So you made that that you'll see that Honda to initiate new accounts outside of the hospital setting.

Speaker Change #143: We have an ambition that the carousel's business will grow on an average of 30% over a three-year period, and at the same time we will improve the margin until 25-26 to 20%.

Speaker Change #176: Could you give us a bit of an indication of what the underlying real continence care, so catheter sales growth was doing this year versus last year?

Speaker Change #176: Just wondering.

Speaker Change #176: Is it comparably up 50 bps or anything that we can actually really, Try to figure out what is going on, what's going on.

Speaker Change #178: Thank you.

Speaker Change #178: The next question comes from the line of Niels Granholm, Carnegie, please go ahead.

Speaker Change #176: <unk> spend.

Speaker Change #178: No, so catheters are, they're meaningfully up, Maja, which is also why the entire category, the entire continence category is up by a full point. Catheters are growing fast, and collecting devices, there's also a relatively significant share of the category still, is a, of course, a drag on growth.

Speaker Change #178: Thank you for taking my questions.

Speaker Change #178: It's about 15% of the total category with very limited growth in it. So if you know that, I think you can backwards map what we're saying about cattle.

Speaker Change #178: Do you see this as it.

Speaker Change #178: Thank you.

Speaker Change #178: Only my needs.

Speaker Change #178: Are you starting to see it's laid out.

Speaker Change #178: And following on from that.

Speaker Change #144: So those are some of the moving paths, but of course everything starts with the growth and we are committed to deliver growth in the level of 8-10%, so scalability across our P&L will also contribute to the margin, and so we deliver the 30% into the next-to-CD period.

Speaker Change #178: How strong do you think Harrison.

Speaker Change #178: And has there been any change in your thinking about how you can use your sales force to increase sales in other indications away from DFUs and VLUs?

Speaker Change #178: Indications such as.

Speaker Change #179: Professional and has there been any change in your thinking about how your sales force.

Marco Cox: And has there been any change in your thinking about how you can use your sales force to increase sales in other indications away from BF using BLUs? And further, one of your peers talked about actually launching outside of the U.S. with their biologics portfolio as early as HMV. I was wondering if there was any change in your thinking there as well, on the timeline to launching outside of the U.S. given potential drag in the U.S. We could see from the reimbursed changes. Thank you.

Speaker Change #179: Increased sales in other indications away from D C.

Speaker Change #178: And further to that, one of your peers talked about actually launching outside of the U.S. with their biologics portfolio as early as H2 this year.

Speaker Change #179: Yeah.

Speaker Change #179: And that one of your peers.

Speaker Change #179: Batch launching outside of the U S.

Speaker Change #144: Thank you so much, and I have a question for this.

Speaker Change #178: So I was wondering if there was any change in your thinking there as well, on the timeline to launching outside of the U.S. given the potential drag in the U.S, we could see from the reinvestment changes.

Speaker Change #180: H M D.

Speaker Change #178: Thank you.

Speaker Change #180: Was wondering if there was any.

Speaker Change #180: And there as well on the timeline launching outside the U S.

Speaker Change #144: The next question comes from the line of Aizia Nur, Morgan Stanley.

Aizia Nur: The next question comes from the line of Aizia Nur, Morgan Stanley. Please go ahead. Hi, good morning. Thanks for taking my question, just standing in for Octavis. One question I had was on the Women's Health Business. Do you observe any changes in patient behavior based on your commercial efforts so far and based on the demand trends you are seeing? Could this business continue to be in decline in 2025? And then second question is a really quick one on Centura Mio Black. When do you plan to launch this in the US and have you been able to charge a premium for this product so far?

Speaker Change #181: A potential drag in the U S. We could see the reinvestment. Thank you yeah. So a good good question. So it so when I look at the account by account performance and the outside hospital setting we're not losing accounts. So the accounts that we're doing business with.

Speaker Change #145: Please go ahead.

Christian Villumsen: Yeah, so a good question. So when I look at the account-by-account performance in the outside hospital setting, we're not losing accounts. So the accounts that we're doing business with already are staying with Caruses. We have a good relationship there and good performance there.

Speaker Change #146: Hi, good morning.

Speaker Change #181: First question on the CMS decision, can you talk about the degree of switching which takes place between the hospital and home care?

Speaker Change #181: And first, I would like, to get back to your growth, particularly looking at the continence care growth, which is very solid with the 80% growth.

Speaker Change #181: Thank you so much Anders and Christian for this.

Speaker Change #181: Yeah.

Speaker Change #147: Thanks for taking my question, just standing in for Octavis.

Speaker Change #181: What proportion of patients would you estimate actually being switched back to uncoated as they return to home care?

Speaker Change #181: But following your very optimistic commentary at the meat management and all the divisional heads that were super excited about the reception of it, I'm a bit puzzled that we don't start to see this, you know, the positive feedback being reflected in organic growth.

Speaker Change #181: Could you, sorry, could you maybe give us an indication when you do anticipate or when you do expect to see an acceleration in continence care growth coming through because of the rollout of LUJA?

Speaker Change #148: One question I had was on the Women's Health Business.

Speaker Change #149: Do you observe any changes in patient behavior based on your commercial efforts so far and based on the demand trends you are seeing?

Speaker Change #181: That would be my first question.

Speaker Change #181: The next question comes from the line of Aisha Noor, Morgan Stanley.

Speaker Change #181: So good question.

Speaker Change #181: My second question is just a kind of housekeeping question on the calculation on your organic growth.

Speaker Change #181: Is it correctly understood that you exclude product rationalization from the calculation of your organic growth?

Speaker Change #181: And then looking at the second question, it will be around China.

Speaker Change #181: Please go ahead.

Speaker Change #181: So when I look at the account by account performance in the, outside hospital setting, we're not losing accounts. So the accounts that we're doing business with already are staying with keratosis.

Speaker Change #181: Could you give us just a bit of an update on what is happening in the market and whether you've got a bit of a better feeling for when that market could start to recover?

Speaker Change #181: Hi, good morning.

Speaker Change #150: Could this business continue to be in decline in 2025?

Speaker Change #181: Already our are staying with with care since we have good relationship there and good performance there, but we have had a couple of instances where potential new accounts are basically awaiting a final decision on when.

Speaker Change #150: And then second question is a really quick one on Centura Mio Black.

Speaker Change #181: Thank you.

Speaker Change #181: Thanks for taking my question.

Speaker Change #181: We have good relationship there and good performance there.

Christian Villumsen: But we have had a couple instances where potential new accounts are basically awaiting a final decision on LCD. This doesn't for now, at least materially impact the business. Remember, this is just 20% of the current caruses business. The footprint is mainly in the acute setting. And it will also continue to be mainly in the acute setting.

Speaker Change #181: Thank you, Maya.

Speaker Change #181: Just signing in for Rob Davies.

Speaker Change #181: One question I had was on the women's health business.

Speaker Change #150: When do you plan to launch this in the US and have you been able to charge a premium for this product so far?

Speaker Change #181: Two good questions.

Speaker Change #181: Do you observe any changes in patient behavior based on your commercial efforts so far and based on the demand trends you're seeing?

Speaker Change #181: But we have had a couple instances where potential new accounts are basically awaiting a final decision on LCD.

Speaker Change #182: Thank you, Niels.

Speaker Change #182: I'll say on LUJA, I am still very optimistic.

Speaker Change #182: This doesn't, for now at least, materially impact the business.

Speaker Change #182: If you look at the market now in the U.S., you still probably have about 60% of volumes, that are unquoted.

Speaker Change #182: I think that the market will be very positive for us.

Speaker Change #182: Intermittent catheters, which is the, main category, it's the bowel category, and then it's a category of collecting devices.

Speaker Change #182: L C D. This doesn't.

Speaker Change #182: If you look at the underlying growth of the catheter business, it is sitting very well.

Speaker Change #183: For now at least materially impact the business remember this is just 20% of the of the current tariffs as a business. The footprint is mainly in the acute setting.

Speaker Change #150: So let me take those questions.

Christian Villumsen: So let me take those questions. The first one on Women's Health, I'm not really seeing a significant change in the dynamics and the category. The whole category is still depressed. It is a little too early. We have a large number of initiatives in motion, both on the Salesforce side, on the marketing side, on the education side, and of course I'm expecting that to also reap some results, but it's too early to judge.

Speaker Change #183: I don't have accurate data because on the switching that takes place because we don't run those businesses.

Speaker Change #150: The first one on Women's Health, I'm not really seeing a significant change in the dynamics and the category.

Speaker Change #183: Could this business continue to be in decline in 2025?

Speaker Change #183: Remember this is just 20% of the current keratosis business.

Speaker Change #183: We just know that it's happening.

Speaker Change #183: And you can also see from the from the fact that, A large number of the distribution players have had a focus on driving uncoded technology and uncoded brands.

Speaker Change #183: I don't know the exact amount of what that is, we just know it's significant, and the whole, if you will.

Speaker Change #183: Strategic opening that's coming now is that once the market is educated on these new codes that this in effect becomes impossible, So the net net impact of that, we don't know what it is yet, but we will of course invest heavily with the commercial muscle that we have to drive the conversion also to the new coast.

Speaker Change #183: And then the second question is a really quick one on Centura Meo Black.

Speaker Change #183: The footprint is mainly in the acute, setting. And it will also continue to be mainly in the acute setting.

Speaker Change #183: But would you expect the dissipators to absorb the entire.., margin compression that they would experience when more patients move to coded going forward.

Speaker Change #150: The whole category is still depressed.

Speaker Change #183: And it will also continue to be mainly mainly in the acute setting I am seeing Ah I am seeing a number of accounts in dermatology pick up.

Speaker Change #183: Well, if you decide to serve the demand, I mean, you're going to have to, you're going to have to, So, of course, Niels, this then becomes a question on what will happen with the distribution landscape, and I think that you will see some level of consolidation on how many people will participate in that game.

Christian Villumsen: I am seeing a number of accounts in dermatology pickup, but we still continue to serve existing customers. Now, the product is indicated for all types of wounds. And we have, I think, good clinical evidence to support it and also in other indications. And I'm still seeing very strong and patient demand in surgical wounds. Otherwise, we couldn't be growing at the rates that we're growing.

Speaker Change #150: It is a little too early.

Speaker Change #151: We have a large number of initiatives in motion, both on the Salesforce side, on the marketing side, on the education side, and of course I'm expecting that to also reap some results, but it's too early to judge.

Speaker Change #183: I am seeing a number of accounts in dermatology pickup.

Speaker Change #183: But we still continue to serve existing customers.

Speaker Change #183: But but we still we still continue to serve our existing.

Speaker Change #184: Existing customers now the product is indicated for all types of wounds.

Speaker Change #184: But that notwithstanding, the companies or the distributors that have partnered with us and have had good growth with us also have profitable growth, even at, if you will, the hydrophilic margin, that they get.

Speaker Change #184: All right, and then to your second question around the product rationalization, now we are in the voice and respiratory care, it's related to the divestment of a small company we did end of Q1 called MC Europe that is reflected here.

Speaker Change #184: The next question comes from the line of Veronika Dubajova from Citi, please go ahead.

Speaker Change #184: Now the product is indicated for all types of wounds.

Speaker Change #184: And and we have I think good good clinical evidence to support it and and also in other indications that I'm still seeing very strong in patient.

Speaker Change #151: But this will also impact the Erology business moving into next year.

Christian Villumsen: But this will also impact the Erology business moving into next year. So the growth that we've seen historically from Erology will not be as strong as it has been, but on the other hand, the 2% that we have in this quarter, we also believe clearly is the trough. We were impacted also by back orders in this quarter and we're coming out of that to your question on Centura Mio Black. Could you just repeat the question again?

Speaker Change #152: So the growth that we've seen historically from Erology will not be as strong as it has been, but on the other hand, the 2% that we have in this quarter, we also believe clearly is the trough.

Speaker Change #184: Demand in and surgical wounds, otherwise, we couldn't be growing at the rates that were growing.

Speaker Change #184: And we have, I think, good clinical, evidence to support it and also in other indications.

Speaker Change #184: And I'm still seeing very strong inpatient demand in surgical wounds.

Speaker Change #184: Okay.

Speaker Change #184: Otherwise, we couldn't be growing at the rates that we're growing.

Christian Villumsen: And in terms of all US, you had a question on all US. Yeah, I'm so I think this is, of course, mostly relevant for people who have most of their business in the outpatient outpatient setting. We are doing some activities in outside outside of outside of the US but our overwhelming focus is on succeeding in in the US. And it will continue to be so. Building up the next, if you will, the next portfolio of markets is going to be a pretty significant effort. We don't want to put the technology into the market. If we don't have the appropriate pricing.

Speaker Change #184: And in terms of Oh.

Speaker Change #184: Hi, guys.

Speaker Change #184: O U S. A you had a question on an O U S. Yeah. So.

Speaker Change #153: We were impacted also by back orders in this quarter and we're coming out of that to your question on Centura Mio Black.

Speaker Change #184: I think there. This is of course, mostly relevant for people who have most of their business in the outpatient the outpatient setting.

Speaker Change #153: Could you just repeat the question again?

Speaker Change #185: Good morning, and thank you for taking my questions.

Speaker Change #185: We are doing some activities in outside outside of our outside of the U S. But our overwhelming focus is on succeeding in the U S.

Speaker Change #154: When do you plan to launch in the US for this product and have you been able to charge a premium so far?

Christian Villumsen: When do you plan to launch in the US for this product and have you been able to charge a premium so far? I will have to just let me just check that. I think we still have a couple of quarters to go before we're launching in the US, but I'll just revert with an accurate date. So you have it, you should not expect that the product comes with the premium launches into the existing price structure. Okay, thank you.

Speaker Change #185: I have three, please.

Speaker Change #185: I just want to circle back, Christian, to kind of how quickly you think this reimbursement change can translate into that change in the prescription paradigm, and I guess how much investment in education will you need to do on the physician level to ensure that the scripts are written for the correct codes, and that physicians understand the value of the hydrophilic category?

Speaker Change #185: So that's my second question.

Speaker Change #185: So apologies, it's just sort of a multi-part, but if you could talk through what you, specifically Coloplast and its industry, need to do to do that, and how long you think that might take, and how much investment that might necessitate, that would be helpful as a starting point.

Speaker Change #185: And it will it will continue to be so building up the next if you will the next portfolio of markets is it's going to be a pretty significant effort. We don't want to put the technology into the market that if we don't have the appropriate pricing.

Speaker Change #155: I will have to just let me just check that.

Speaker Change #185: And then my third question is on Keras's and the 35% growth rate.

Speaker Change #185: And then sort of related to that, I guess, you know, obviously your catheter business is both a wholesale and a online, distribution business.

Speaker Change #185: I think when we started at the beginning of the year, your ambition had been to grow a bit more than that for the year.

Speaker Change #185: And so maybe from that path of a distributor, if you can talk through whether you think there might be some backlash from some of the distributors towards your products, given that you are the player who's most actively pushed for this change, that will be a detriment to their profitability.

Speaker Change #185: Just curious if you think there's anything you can do to get that growth to accelerate as we move into the fourth quarter and into next year, or this is it, and given the changes in the market, you know, We should be more anchoring towards a slightly lower growth rate here going forward.

Speaker Change #185: Yep, so...

Speaker Change #156: I think we still have a couple of quarters to go before we're launching in the US, but I'll just revert with an accurate date.

Speaker Change #185: Veronika, thank you for three good questions.

Speaker Change #185: I'll say on the catheter opportunity related to the CMS decision.

Speaker Change #185: We still need to work this through with our team on exactly how we're going to go about it.

Speaker Change #185: I'm not imagining that this would trigger a significant increase, if you will, in cost to do this.

Speaker Change #185: We have a very sizable setup, and a very sizable muscle in the U.S. that for a long time has been driving the conversion to hydrophilic.

Speaker Change #185: And of course now, we are now getting the tailwind from the authorities actually recognizing the distinction in technology that we've been talking about for, I think the original reimbursement got introduced in 08 or 09, something like that.

Speaker Change #185: So we've been driving this for a long time.

Speaker Change #185: That's helpful.

Speaker Change #185: But it's not, like I said in my opening remarks, it's not a silver bullet.

Speaker Change #185: Thanks, Christian.

Speaker Change #185: So the education needs to happen and you need to cover thousands of customers, you need to work through a very large number of payers.

Speaker Change #185: And do you think, can I just, going back to that first question, I mean, I guess the way to ensure that you get the right script written is, I mean, my question is really, you are going to have to educate a different customer, right?

Speaker Change #185: So of course it will be a prolonged push.

Speaker Change #185: I mean, I think you've been focusing your education on the patient.

Speaker Change #185: But I think net-net good news for patients, good news for people who believe in the technology.

Speaker Change #185: Are you going to have to focus more on the physician to make sure that they're writing the correct script?

Speaker Change #185: The second part of your Catholic question is related to whether there's a backlash.

Speaker Change #185: Or do you think you can do that for the patient?

Christian Villumsen: And so there will be a fair amount of clinical and market access work that need to go into play that it becomes an attractive category in Europe and potentially in some markets and Asia Pac. But that's more for medium and long term when we look at it.

Speaker Change #185: Very low.

Speaker Change #185: And so there will be a fair amount of clinical and market access work that need to go into play that are it becomes up unattractive category in in Europe, and potentially in some markets and in Asia Pac, but that that's more for medium and long term when we look at it.

Speaker Change #185: Remember that the work here has now been led by, it is a coalition of manufacturers.

Speaker Change #185: We've been doing both, Veronika, also historically.

Speaker Change #185: Very well.

Speaker Change #185: And I would say...

Speaker Change #185: So our strategy has always been.

Speaker Change #157: So you have it, you should not expect that the product comes with the premium launches into the existing price structure.

Speaker Change #185: Okay, thank you guys so much.

Speaker Change #185: I also think the distributors should be concerned that patients actually get on good technology.

Speaker Change #185: Thank you, for many years and we will continue that process.

Speaker Change #185: The next question comes from the line of Graham Doyle from UBS.

Speaker Change #185: And this is also what CMS is basically spelling out now, that there is evidence that this, Hydrophilic technology does make a difference for a large number of patients and therefore it deserves separate codes.

Speaker Change #185: Okay, thanks.

Speaker Change #185: Please go ahead.

Speaker Change #185: But of course they are more expensive products so they will put some pressure on margin.

Speaker Change #185: And sorry, one final one quick reminder of what proportion of scripts are product specific in the US market at the moment?

Speaker Change #185: Morning, thanks guys.

Speaker Change #185: On Kerasys, we were still on plan.

Speaker Change #185: Just a couple on, just following up on Veronika's questions there.

Speaker Change #185: We are seeing that on the LCD that it's a bit harder to initiate new accounts, uh... in the uh... in the uh... Outside Hospital Setting.

Speaker Change #185: In terms of your exposure in consonants or in catheters, roughly, how much is via Medicare versus say commercial insurers, presumably the vast majority?

Speaker Change #185: But we're still on plan.

Speaker Change #185: And then in terms of the mechanism under this new reimbursement, when it comes to the actual prescription, so it gets written for, let's call it the correct code.

Speaker Change #185: Acceleration on the business will come from of course a decision, hopefully a positive decision on LCD and then the continued commercial expansion as we get people up to productivity culture.

Speaker Change #185: Presumably, there's still that sort of discretion, narrower, but still discretion in terms of which manufacturer the distributor then chooses, just to be able to know how specific that can get.

Speaker Change #157: Okay, thank you.

Speaker Change #185: And then one quick one, given how speedy the proposal and update was, it's different, but for this, say, versus the Wound LCD, and we've seen some other LCDs withdrawn last week in other categories.

Speaker Change #185: Have you any sense as to when we might get an answer on that?

Speaker Change #185: Has there been any more discussion around it?

Speaker Change #157: The next question comes from the line of Marianne Boulot, Bank of America.

Marianne Bulot: The next question comes from the line of Marianne Boulot, Bank of America. Please go ahead. Yes, good morning. Thank you for taking my question.

Speaker Change #185: And are physicians expecting a delay, given we're already into late August now?

Speaker Change #185: Thank you very much.

Speaker Change #185: Thank you, Graham.

Speaker Change #185: So the short answer on, if you will, the payer distribution of the market is that we don't have strong data on that.

Unknown Executive: Great, thank you.

Speaker Change #185: I can't look internally on all the plants that our distributor partners serve, but I would imagine that it probably follows the broader population distribution, and of course we still have to win, we still have to win with a brand, but we have been winning with a brand for more than a decade and this will now happen on the back of a Lugia launch that our belief is that this will set a new standard in the category also in the U.S.

Speaker Change #157: Please go ahead.

Speaker Change #185: Great, thank you.

Speaker Change #185: Great. Thank you.

Speaker Change #185: And I'll just reiterate what I said earlier, that the LUJA launch is by now the most successful or fastest uptake that we've ever had in the catheter category.

Unknown Executive: Thank you, operator. This concludes the session, and thank you everybody for joining our call.

Speaker Change #185: So we feel optimistic about our position and we'll make it tough to compete.

Speaker Change #157: Yes, good morning.

Speaker Change #185: Thank you, operator.

Speaker Change #185: Thank you operator.

Speaker Change #185: On the LCD, we have no news to report.

Speaker Change #185: This concludes the session and thank you everybody for joining our call.

Speaker Change #158: Thank you for taking my question.

Speaker Change #185: I'm still expecting that we get a decision sometime in the fall.

Speaker Change #185: This concludes the session and thank you everybody.

Speaker Change #185: Thank you very much.

Speaker Change #159: Maybe two questions.

Marianne Bulot: Maybe two questions. The first one on Halo, wondering how has been the feedback since the launch in the UK? And if you had any update regarding Germany, and the second question on one carry, if we look at the advanced one dressing side. So where you had the 10% organically, just wondering if there is any specific region that was stronger that led to this 10% growth. And maybe if you had a feedback as well on the US launch of the Silicon State franchise. Thank you.

Speaker Change #185: It was super helpful.

Speaker Change #185: Thanks, guys.

Speaker Change #160: The first one on Halo, wondering how has been the feedback since the launch in the UK?

Speaker Change #185: The next question comes from the line of Martin Brenoe from Nordea, please go ahead.

Speaker Change #185: For joining our call.

Speaker Change #185: And that's also why the entire category is up a full point compared to last year.

Speaker Change #185: When do you plan to launch this in the U.S., and have you been able to charge a premium for this product so far?

Speaker Change #185: And in terms of... Oh, OUS.

Speaker Change #185: I thank you very much for taking my questions.

Speaker Change #185: The, male catheter is in 13 markets.

Speaker Change #185: So let me take those questions.

Speaker Change #185: You had a question on OUS.

Speaker Change #185: I'll just take one for now that since most of my questions have been answered.

Speaker Change #185: It is right now shaping up to be the strongest launch we've ever done in continence care.

Speaker Change #185: The first one on women's health, I'm not really seeing a significant change in the dynamics in the category.

Speaker Change #185: Yeah.

Speaker Change #186: Just on the supply disruption, can you maybe just elaborate a little bit on exactly what happened here?

Speaker Change #186: And the female product is now, by now, only in four markets.

Speaker Change #186: The whole category is still depressed.

Speaker Change #186: And just, you know, how sure are you that this will be fixed in.., to fall.

Speaker Change #160: And if you had any update regarding Germany, and the second question on one carry, if we look at the advanced one dressing side.

Speaker Change #186: Remember, Maya, it's a chronic category.

Speaker Change #186: It is a little too early.

Unknown Executive: Ladies and gentlemen, the conference is now over. Thank you for choosing cars, call and thank you for participating in the conference. You may now disconnect your lines.

Speaker Change #186: And just from, You know, an observation from one of your peers.

Speaker Change #186: Ladies and gentlemen, the conference is now over.

Speaker Change #186: Ladies and gentlemen, the conference is now over thank you for choosing chorus call and thank you for participating in the conference.

Speaker Change #186: We have a large number of initiatives in motion, both on the Salesforce side, on the marketing side, on the education side.

Speaker Change #186: They've been saying that they've taken market shares in the U.S. in Oslo Mercure.

Speaker Change #186: And of course, I'm expecting that to also reap some results, but it's too early to judge.

Speaker Change #186: Is that also a part of the explanation why you might have seen a little bit of a weaker growth compared to your expectations here?

Speaker Change #186: But this will also impact the urology business moving into next year.

Speaker Change #186: That's my question, thank you.

Speaker Change #186: Thank you for choosing Carlskoll and thank you for participating in the conference.

Speaker Change #186: Thanks, Martin.

Speaker Change #186: Yes, so the effort to consolidate two distribution centers into one, we've run into some what I'll call just operational snags.

Speaker Change #186: Of course, I'm not satisfied with this.

Speaker Change #186: We didn't plan for this and whenever a customer places an order with us and we're not able to fulfill it, we're not living up to the basic promise that the company is making. I can assure you that the people who are responsible for this know that we are not satisfied with this, but we have a lot of people working on bringing productivity back up, and we're already seeing productivity improve, and we are still expecting with everything that we know that by the end of the quarter, we will be out of the woods and have a good performance again.

Speaker Change #186: You may now disconnect your lines, goodbye.

Speaker Change #186: I'm not seeing this related to...

May now disconnect your lines Goodbye.

Speaker Change #160: So where you had the 10% organically, just wondering if there is any specific region that was stronger that led to this 10% growth.

Speaker Change #186: I'm not seeing this related to the ostomy sales in the U.S.

Unknown Executive: Goodbye.

Speaker Change #186: I still see underlying good demand.

Speaker Change #186: Okay, thank you.

Speaker Change #186: Yeah.

Speaker Change #186: Maybe just one quick follow-up.

Speaker Change #186: So maybe, Martin, I'll just say maybe we, just reiterate, we still see double-digit volume growth in our backs and plates business in the acute channel in the U.S., but this basically means that a lot of patients are coming out on the Coloplast product.

Speaker Change #186: Yes.

Speaker Change #186: Okay, makes a ton of sense.

Speaker Change #186: [music].

Speaker Change #186: Maybe just one quick question also, just reflecting on Anders' comment on FX, and now we see a little bit of, let's call it some unlucky event.

Speaker Change #186: And now you're reaching this EBIT margin of 27% around that level, a little bit above, but still around 27%.

Speaker Change #186: How, you know, that's a bit far away from 30%.

Speaker Change #160: And maybe if you had a feedback as well on the US launch of the Silicon State franchise.

Speaker Change #186: That's my first sort of observation.

Speaker Change #186: That's quite obvious.

Speaker Change #186: But can you maybe just help us a little bit of, how the trajectory of the EBIT margin expansion should look like back to the 30% also with flagging a little bit of some headwinds going into the next fiscal year?

Speaker Change #186: That would be super helpful.

Speaker Change #186: Thank you.

Speaker Change #160: Thank you.

Speaker Change #186: Yeah, so Martin, let me take your question around that, so I think I talked to some of the moving parts, to next year early and also at the meet the management back.

Speaker Change #186: So it's clear that we are expecting that our margin will improve as a result of some of these moving parts, especially raw materials, prices.

Speaker Change #161: Thank you, Marianne.

Christian Villumsen: Thank you, Marianne. So, quickly on Halo, early days, remember this is going to be a long category build. So, we're deep in the education effort of both patients and health care professionals in the UK. We're tracking well in the UK. Still no answer from the German authorities who are delayed in their response. So, we don't know where this will lead. We don't know where this will lead in Germany yet. On one care, as you'll recall from my opening remarks, the quarter is a little skewed by order patterns in Germany, ahead of a price increase in Germany.

Speaker Change #186: Coming Down, The inflation levels are coming down, we continue to be prudent on costs, and we expect that also to continue into the following years.

Speaker Change #186: And then on top of that, we will also expect that the Keres' underlying margin will, I have an ambition that.., grow on an average of 30% over a three year period.

Speaker Change #162: So, quickly on Halo, early days, remember this is going to be a long category build.

Speaker Change #186: At the same time, we will improve the match, until 25, 26 to 25.

Speaker Change #186: So those are some of the moving parts, but of course everything starts with the growth, We are committed to deliver growth in the level of 8 to 10%.

Speaker Change #186: So scalability across our P&L will also contribute to the market, and and so we deliver the 30% into the next, Got it, very clear.

Speaker Change #186: Thank you so much Anders and Kristian for this.

Speaker Change #186: The next question comes from the line of Aisha Noor, Morgan Stanley.

Speaker Change #186: Please go ahead.

Speaker Change #186: Hi, good morning.

Speaker Change #163: So, we're deep in the education effort of both patients and health care professionals in the UK.

Speaker Change #186: Thanks for taking my question.

Speaker Change #186: Just signing in for Rob Davies.

Speaker Change #186: One question I had was on the women's health business.

Speaker Change #186: Do you observe any changes in patient behavior based on your commercial efforts so far and based on the demand trends you're seeing?

Speaker Change #186: Could this business continue to be in decline in 2025?

Speaker Change #186: And then second question is a really quick one on Centura Meo Black.

Speaker Change #186: When do you plan to launch this in the US?

Speaker Change #186: And have you been able to charge a premium for this product so far?

Speaker Change #186: So let me take those questions.

Speaker Change #164: We're tracking well in the UK.

Speaker Change #186: The first one on women's health.

Speaker Change #186: Thank you for watching!

Speaker Change #186: I'm not really seeing a significant change in the dynamics in the category.

Speaker Change #186: The whole category is still depressed.

Speaker Change #165: Still no answer from the German authorities who are delayed in their response.

Speaker Change #186: It is a little too early.

Speaker Change #186: We have a large number of initiatives in motion, both on the Salesforce side, on the marketing side, on the education side.

Speaker Change #186: And of course, I'm expecting that to also reap some results, but it's too early to judge.

Speaker Change #186: But this will also impact the urology business moving into next year.

Speaker Change #186: So the growth that we've seen historically from urology will not be as strong as it has been.

Speaker Change #165: So, we don't know where this will lead.

Speaker Change #186: But on the other hand, the 2% that we have in this quarter, we also believe clearly is the trough.

Speaker Change #186: We were impacted also by back orders in this quarter and we're coming out of that, to your question on sensorimuBLACK.

Speaker Change #186: Could you just repeat the question again?

Speaker Change #166: We don't know where this will lead in Germany yet. On one care, as you'll recall from my opening remarks, the quarter is a little skewed by order patterns in Germany, ahead of a price increase in Germany.

Speaker Change #186: When do you plan to launch in the U.S. for this product and have you been able to charge a premium so far?

Speaker Change #186: So, I will have to just, let me just check that.

Speaker Change #186: I think that we still have a couple quarters to go before we're launching in the U.S.

Speaker Change #186: I'll just revert with an accurate date so you have it.

Speaker Change #186: You should not expect that the product comes with a premium that launches into the existing price structure.

Speaker Change #186: The next question comes from the line of Marianne Bulot, Bank of America.

Speaker Change #186: Please go ahead.

Speaker Change #186: Yes, good morning.

Speaker Change #186: Thank you for taking my question.

Speaker Change #186: Maybe two questions.

Speaker Change #186: The first one on Halo, wondering how has been the feedback since the launch in the UK?

Speaker Change #186: And if you had any update regarding Germany?

Speaker Change #186: And the second question on wound care, if we look at the advanced wound dressing sites, so where you had the 10% organically, just wondering if there is any specific region that was stronger that led to this 10% growth?

Speaker Change #186: And maybe if you had a feedback as well on the US launch of the silicone fit franchise.

Speaker Change #186: Thank you.

Speaker Change #186: Thank you, Marianne.

Speaker Change #186: So quickly on Halo early days, remember, this is going to be a long category build.

Speaker Change #166: We're also getting good growth from the emerging markets.

Christian Villumsen: We're also getting good growth from the emerging markets. So, you shouldn't expect as strong a quarter in Q4. I'm looking at a Q4 that's sitting at the mid-to-high single digit. The launch of the Biden-Silicon FIT part in the U.S, still early days, but good level of activity, good opportunity pipeline.

Speaker Change #186: So we're deep in the education effort of both patients and healthcare professionals in the UK.

Speaker Change #186: We're tracking well in the UK, still no answer from the German authorities who are delayed in their response.

Speaker Change #186: So we don't know where this will land in Germany yet.

Speaker Change #186: On Wooncare, as you'll recall from my opening remarks, the quarter is a little skewed by order patterns in Germany, ahead of a price increase in Germany.

Speaker Change #186: We're also getting good growth from emerging markets.

Speaker Change #166: So, you shouldn't expect as strong a quarter in Q4.

Speaker Change #186: So you shouldn't expect as strong a quarter in Q4.

Speaker Change #186: I'm looking at a Q4 that's sitting at mid to high single digit type of range.

Speaker Change #186: The launch of the Bison Silicone Fit parked in the U.S. still early days, but a good level of activity, good opportunity pipeline.

Speaker Change #186: The next question comes from the line of Christian Ryom, Denske Bank, please go ahead.

Speaker Change #167: I'm looking at a Q4 that's sitting at the mid-to-high single digit.

Speaker Change #186: Hi, hello, Christian and Anders.

Speaker Change #186: Thank you for taking my questions.

Speaker Change #186: I have two as well.

Speaker Change #186: The first is to the CMS coding update and, Given that this is first implemented on 1st of January, is there an opportunity that we might actually see a differentiation in the fees for the different categories when the fee schedule for that year is announced?

Speaker Change #186: I would imagine about a year's time, and maybe as a tag-on to that, I would think from the discussion that we've already had on this call that we could expect some lobbying from distributors, arguing that they should get a higher reimbursement level for the coded categories.

Speaker Change #186: So is that a sort of possible outcome?

Speaker Change #168: The launch of the Biden-Silicon FIT part in the U.S, still early days, but good level of activity, good opportunity pipeline.

Speaker Change #186: That's the first question.

Speaker Change #186: And then the second question is, to the gross margin... So, when I try to back out the acquisitions of Atos and Kerasis from the gross margin in the quarter, the gross margin is still below 66% Whereas, if we go back to the period prior to these two acquisitions, it was sort of comfortably in the range of 67 to 69%, so one to three percentage points higher.

Speaker Change #186: Anders, can you talk about what's the main delta versus where you were at that time, and how plausible the pathway back for the, say, old Coloplast, excluding Atis and Keratases, to that gross margin level?

Speaker Change #186: Thank you.

Speaker Change #186: Thank you, Christian.

Speaker Change #186: Two really good questions.

Speaker Change #186: Yeah, so I think the reason that the CMS has put in place now an implementation period for Jan 1, 2026, is that they recognize that the change here in coding will affect a lot of commercial payers also.

Speaker Change #186: I don't have at this stage an indication that we're going to be looking at a different fee schedule.

Speaker Change #186: Of course, I'd welcome that, but I don't have an indication that that will happen.

Speaker Change #186: In fact, the CMS document quite explicitly says that there's no change to the fee schedule.

Speaker Change #186: So, if that happens, it will be, of course, a welcome development on our part, either through an increase in hydrophilic reimbursement or, if you will, a decrease in non-coded.

Speaker Change #186: I think the rational system, of course, will pay more for modern technology than it would for old technology.

Speaker Change #186: Our view has always been, Christian, that the current reimbursement levels were adequate to support modern technology and that the perversity of the U.S. system was that it didn't distinguish between modern and old technology.

Speaker Change #186: That comes in now, and that, I think, is also what will drive the change, that it will be significantly more challenging to drive this switching behavior, but of course this assumes that we can educate the market, physicians and consumers still.

Speaker Change #186: And Chris, let me take your second question around the Gross Margin, and yes... 4 acquisitions of Atos, Curtis Grossmarch Remaining part of, and it is really driven by, higher input costs that we have seen over the last couple of years, and and also.

Speaker Change #186: The Ramp-Up of Cost, So that has really impacted our gross margin for our, you can say, maintenance.

Speaker Change #186: And when we look ahead, that's also why we are becoming optimistic that the inflation levels are coming down, energy are coming down, and also the salary levels.

Speaker Change #186: I also have an expectation that.., come down to lower level.

Speaker Change #168: The next question comes from the line of Christian Ryan, Danske Banks.

Christian Ryan: The next question comes from the line of Christian Ryan, Danske Banks. Please go ahead. Hello, Christian and Anderson. Thank you for taking my questions. I have two as well. The first is to the CMS coding update. And given that this is first implemented on first of January, is there an opportunity that we might actually see a differentiation in the fees for the different categories when the fee schedule for that year is announced?

Speaker Change #186: So that's how we see it.

Speaker Change #186: And the price increases we have actually experienced over the last couple of years have not been able to compensate for these significant price increases on the internet.

Speaker Change #186: Great.

Speaker Change #186: That makes sense.

Speaker Change #169: Please go ahead.

Speaker Change #186: Thank you very much.

Speaker Change #186: The next question comes from the line of Shubhangi Gupta, HSBC, please go ahead.

Speaker Change #170: Hello, Christian and Anderson.

Speaker Change #186: Hi, thanks for taking the time.

Speaker Change #186: My first question is on continence care.

Speaker Change #186: So could you give us a split of volume versus price increase in continence for Q3?

Speaker Change #171: Thank you for taking my questions.

Speaker Change #186: Was there any increase in reimbursement prices?

Christian Ryan: I have two as well.

Speaker Change #186: And also regarding the new policy on catheters, you have mentioned that 70% of your catheters, All of which is from hydrophilic, and some of your peers have mentioned about 60%.

Speaker Change #173: The first is to the CMS coding update.

Speaker Change #186: So when it is already the predominant type of catheter, so what really is the advantage from this policy is just the volume increase from prescriptions?

Speaker Change #186: And second, on your mid-term margin targets, for caddices, you're expecting over 20% in 2025-26.

Speaker Change #186: So how much of that is dependent on the top line growth?

Speaker Change #186: And third, on China, after me, care business, which has been weak for quite a while now.

Speaker Change #174: And given that this is first implemented on first of January, is there an opportunity that we might actually see a differentiation in the fees for the different categories when the fee schedule for that year is announced?

Speaker Change #186: So is there some loss of market share?

Speaker Change #186: Could you help understand what exactly is happening there?

Speaker Change #186: Thank you.

Speaker Change #186: Let me see if I remember all of what you've asked for.

Speaker Change #186: So if you look at the continence care growth.

Speaker Change #186: It's driven by growth across the SpeedyCat portfolio, but mostly by the new launches.

Speaker Change #186: So this is LUJA, it's the recent set launch that we have, and in addition also really good growth from the SpeedyCat portfolio in emerging markets.

Speaker Change #186: We have, and I'll remind you that of course we have higher pricing on LUJA, so there is a mixed effect in the growth also, but when I look at the launch performance, we are well ahead on value, we are well ahead on volume.

Speaker Change #186: If I look at the, I think the second question was to the distribution of volume and value of our business in the U.S., when we say IC or coded technology in the U.S., 70% of our business is on that, but that's not volume.

Speaker Change #186: That's a value number.

Speaker Change #186: I'd say if I look at the market today, our assessment is about 60% of that market still needs to be converted, still needs to be converted.

Speaker Change #186: So there are a lot of patients who are on old technology and there's been a lot of people in that market who've invested in driving old technology.

Speaker Change #186: So of course, this should change.

Speaker Change #186: And more than anything, I think it will be driven by a change in volume.

Speaker Change #186: So more patients will, in effect, come on to hydrophilic technology.

Speaker Change #186: It will be much, much more difficult to switch people away, just given the dedicated calls.

Speaker Change #186: And then the final question you had on Austimy, China.

Speaker Change #186: So, like I said to an earlier question, a pretty good activity if I look at surgeries and the inflow of patients, more cost conscious consumers, a way more challenging consumer channel where some of the local low cost players are picking up some share.

Speaker Change #174: I would imagine about a year's time.

Christian Ryan: I would imagine about a year's time. And maybe I'll tag on to that. I would think from the discussion that we've already had on this call that we could expect some lobbying from distributors, arguing that they should have get a higher reimbursement level for the coded categories. So, is that a sort of a possible outcome? That's the first question. And then the second question is to the gross margin. So, when I try to back out the acquisitions of ethos and caruses from the gross margin in the quarter, the gross margin is still below 66% whereas, if we go back to the period prior to these two acquisitions, it was sort of comfortably in the range of 67 to 69%.

Speaker Change #186: And so that is part of the game now when Chinese consumers are where they are and I'm really not sure that we're going willing to to become more positive until I can see it in the actual behavior by the by the Chinese consumer, So this is still a business that's sitting at mid-single-digit, mid-single-digit plus for now.

Speaker Change #186: Thank you.

Speaker Change #186: This product might not be covered under Medicare.

Speaker Change #174: And maybe I'll tag on to that.

Speaker Change #186: I'm sorry, I'm not getting that question.

Speaker Change #186: What's the question?

Speaker Change #186: So you have mentioned you are expecting 20% operating margin for carousels in 2025-2026.

Speaker Change #186: So how much of this is dependent on top line?

Speaker Change #175: I would think from the discussion that we've already had on this call that we could expect some lobbying from distributors, arguing that they should have get a higher reimbursement level for the coded categories.

Speaker Change #186: Well, of course the business needs to continue to grow.

Speaker Change #186: And so we need to continue to grow at a CAGR of 30%.

Speaker Change #186: We need to deliver that.

Speaker Change #186: This is this is a business that starts with a very favorable gross margin position.

Speaker Change #186: So it also it scales very favorably.

Speaker Change #186: But but we need we need to grow.

Speaker Change #186: It's not a cost exercise.

Speaker Change #186: The last question comes from the line of Marco Cox from Barclays, please go ahead.

Speaker Change #186: Hi there, Mark here from Barclays, speaking on behalf of Hassan Al-Bukhil.

Speaker Change #186: Most of my questions have already been asked, but I just had one follow-up question on Keras, Thank you for watching.

Speaker Change #186: I was just wondering.

Speaker Change #186: To what extent do you see this?

Speaker Change #186: Is it only minute or are you starting to see it slow down at a faster rate?

Speaker Change #186: And following on from that, how strong do you think keratosis is in other indications such as vascular and pressure ulcers?

Speaker Change #175: So, is that a sort of a possible outcome?

Speaker Change #186: And has there been any change in your thinking about how you can use your sales force to increase sales in other indications away from BFUs and BLUs?

Speaker Change #186: And further to that, one of your peers talked about actually launching outside of the US with their biologics portfolio as early as...

Speaker Change #186: I was wondering if there was any change in your thinking there as well, on the timeline for launching outside of the US, given the potential drag in the US we could see from the reimbursement chain.

Speaker Change #186: Yeah, so, good question.

Speaker Change #175: That's the first question.

Speaker Change #186: So, when I look at the account by account performance in the outside hospital setting, we're not losing accounts.

Speaker Change #175: And then the second question is to the gross margin.

Speaker Change #186: So, the accounts that we're doing business with already are staying with Kerasys. We have good relationship there and good performance there.

Speaker Change #186: But we have had a couple instances where potential new accounts are basically awaiting a final decision on LCD.

Speaker Change #186: This doesn't, for now at least, materially impact the business.

Speaker Change #176: So, when I try to back out the acquisitions of ethos and caruses from the gross margin in the quarter, the gross margin is still below 66% whereas, if we go back to the period prior to these two acquisitions, it was sort of comfortably in the range of 67 to 69%.

Speaker Change #186: Remember, this is just 20% of the current Kerasys business.

Speaker Change #186: The footprint is mainly in the acute setting, and it will also continue to be mainly in the acute setting.

Speaker Change #186: I am seeing a number of accounts in dermatology pickup but we still continue to serve existing customers.

Speaker Change #186: Now, the product is indicated for all types of wounds.

Speaker Change #186: And we have, I think, good clinical evidence to support it, and also in other indications.

Speaker Change #186: And I'm still seeing very strong inpatient demand in surgical wounds.

Speaker Change #186: Otherwise, we couldn't be growing at the rates that we're growing.

Speaker Change #186: And in terms of... Oh, OUS, you had a question on OUS, yeah, so I think this is, of course, mostly relevant for people who have most of their business in the outpatient setting.

Speaker Change #186: We are doing some activities outside of the US, but our overwhelming focus is on succeeding in the US, and it will continue to be so.

Speaker Change #186: Building up the next, if you will, the next portfolio of markets is going to be a pretty significant effort.

Speaker Change #186: We don't want to put the technology into the market if we don't have the appropriate pricing.

Speaker Change #186: And so there will be a fair amount of clinical and market access work that need to go into play that it becomes an attractive category in Europe and potentially in some markets in Asia-Pacific, but that's more for medium and long term when we look at it.

Speaker Change #176: So, 1 to 3 percentage points higher.

Speaker Change #177: And as can you talk about what's the main built versus where you were at that time and how plausible the pathway back for the, say, old color plus excluding ethos and caruses is to that gross margin level.

Christian Ryan: So, 1 to 3 percentage points higher. And as can you talk about what's the main built versus where you were at that time and how plausible the pathway back for the, say, old color plus excluding ethos and caruses is to that gross margin level. Thank you.

Speaker Change #177: Thank you.

Speaker Change #178: Thank you, Christian, two really good questions.

Christian Villumsen: Thank you, Christian, two really good questions. Yeah, so I think the reason that the CMS has put in place now on implementation period for Gen1, 2026 is that they recognize that the change here in coding will affect a lot of commercial payers also. I don't have at the stage an indication that we're going to be looking at a different fee schedule. Of course, I'd welcome that. But I don't have an indication that that will happen.

Speaker Change #179: Yeah, so I think the reason that the CMS has put in place now on implementation period for Gen1, 2026 is that they recognize that the change here in coding will affect a lot of commercial payers also.

Speaker Change #180: I don't have at the stage an indication that we're going to be looking at a different fee schedule.

Speaker Change #180: Of course, I'd welcome that.

Speaker Change #180: But I don't have an indication that that will happen.

Speaker Change #181: In fact, the CMS document quite explicitly says that there's no change to the fee schedule.

Christian Villumsen: In fact, the CMS document quite explicitly says that there's no change to the fee schedule. So, if that happens, it will be, of course, a welcome development on our part, either through an increase in hydrophilic, hydrophilic reimbursement or, if you will, a decrease in non-coded. I think the rational system, of course, would pay more for modern technology than it would for old technology. The overview has always been Christian that the current reimbursement levels were adequate to support modern technology and that the perversity of the US system was that it didn't distinguish between modern and old technology and that comes in now and that I think is also what will drive the change, that it will be significantly more challenging to drive the switching behavior. But, of course, this assumes that we can educate the market physicians and consumers still.

Speaker Change #182: So, if that happens, it will be, of course, a welcome development on our part, either through an increase in hydrophilic, hydrophilic reimbursement or, if you will, a decrease in non-coded.

Speaker Change #183: I think the rational system, of course, would pay more for modern technology than it would for old technology.

Speaker Change #184: The overview has always been Christian that the current reimbursement levels were adequate to support modern technology and that the perversity of the US system was that it didn't distinguish between modern and old technology and that comes in now and that I think is also what will drive the change, that it will be significantly more challenging to drive the switching behavior.

Speaker Change #184: But, of course, this assumes that we can educate the market physicians and consumers still.

Speaker Change #185: Yeah, and then Chris, let me take your second question around the gross margin.

Anders Lonning: Yeah, and then Chris, let me take your second question around the gross margin. And yes, before acquisitions of answers, carousels, our gross margin for the remaining part of the business is down in the level of two percentage points. And it is really driven by the significant higher input costs that we have seen over the last couple of years, higher energy, high inflation in Hungary, and also the ramp up of cost at Costa Rica.

Speaker Change #186: And yes, before acquisitions of answers, carousels, our gross margin for the remaining part of the business is down in the level of two percentage points. And it is really driven by the significant higher input costs that we have seen over the last couple of years, higher energy, high inflation in Hungary, and also the ramp up of cost at Costa Rica. So that has really impacted our gross margin for our, you can say, main business.

Speaker Change #187: And when we look ahead, that's also why we are becoming optimistic that the inflation levels are coming down, energy are coming down, and also the salary levels.

Anders Lonning: So that has really impacted our gross margin for our, you can say, main business. And when we look ahead, that's also why we are becoming optimistic that the inflation levels are coming down, energy are coming down, and also the salary levels. I also have an expectation that it will come down to lower levels into 25. So that's how we see it. And the pricing increases we have actually experienced over the last couple of years have not been able to compensate for the significant the pricing increases on the input cost. Great. That makes sense. Thank you very much.

Speaker Change #188: I also have an expectation that it will come down to lower levels into 25.

Speaker Change #188: So that's how we see it. And the pricing increases we have actually experienced over the last couple of years have not been able to compensate for the significant the pricing increases on the input cost.

Speaker Change #188: Great.

Speaker Change #188: That makes sense.

Speaker Change #188: Thank you very much.

Speaker Change #188: The next question comes from the line of Shabandh Gupta, HSBC.

Shubhangi Gupta: The next question comes from the line of Shabandh Gupta, HSBC. Please go ahead. Hi, thanks for taking my question. My first question is on continent's case. So could you give us a split of volume versus price increase in continents for Q3? Was there any increase in reimbursement prices? And also regarding the new policy on catheters, you mentioned that 70% of your catheter revenues is from hydrofilic and some of your peers have mentioned about 60%.

Speaker Change #189: Please go ahead.

Speaker Change #190: Hi, thanks for taking my question.

Speaker Change #191: My first question is on continent's case.

Speaker Change #192: So could you give us a split of volume versus price increase in continents for Q3?

Speaker Change #193: Was there any increase in reimbursement prices?

Speaker Change #194: And also regarding the new policy on catheters, you mentioned that 70% of your catheter revenues is from hydrofilic and some of your peers have mentioned about 60%.

Speaker Change #195: So when it is already the predominant type of catheters, so what really did want to reach from this policy is just the volume increase from prescription.

Shubhangi Gupta: So when it is already the predominant type of catheters, so what really did want to reach from this policy is just the volume increase from prescription. And second on your midterm margin targets for cadres, you're expecting over 20% in 25, 26%. So how much of that is dependent on the top line growth? And third on China has to be care business which has been weak for quite a while now. So if there are some loss of market share, could you help understand what exactly is happening there? Thank you.

Speaker Change #195: And second on your midterm margin targets for cadres, you're expecting over 20% in 25, 26%.

Speaker Change #196: So how much of that is dependent on the top line growth?

Speaker Change #197: And third on China has to be care business which has been weak for quite a while now.

Speaker Change #198: So if there are some loss of market share, could you help understand what exactly is happening there?

Speaker Change #198: Thank you.

Speaker Change #198: Let me see if I remember all of what you asked for.

Christian Villumsen: Let me see if I remember all of what you asked for. So if you look at the continent's care growth, it's driven by growth across the speedy cath portfolio, but mostly by the new launches. So this is Luja. It's the recent set launch that we have. And in addition, also a really good growth from the speedy cath portfolio in emerging markets. We have, now remind you that of course we have higher pricing on Luja.

Speaker Change #198: So if you look at the continent's care growth, it's driven by growth across the speedy cath portfolio, but mostly by the new launches.

Speaker Change #199: So this is Luja.

Speaker Change #200: It's the recent set launch that we have.

Speaker Change #200: And in addition, also a really good growth from the speedy cath portfolio in emerging markets.

Speaker Change #201: We have, now remind you that of course we have higher pricing on Luja.

Speaker Change #201: So there is a mix effect in the growth also.

Christian Villumsen: So there is a mix effect in the growth also. But when I look at the launch performance, we are well ahead on value. We are well ahead on volume. If I look at the, I think the second question was to the distribution of volume and value of our business in the US. When we say IC or coded, coded technology in the US 70% of our business is on that but that's not volume.

Speaker Change #201: But when I look at the launch performance, we are well ahead on value.

Speaker Change #202: We are well ahead on volume.

Speaker Change #203: If I look at the, I think the second question was to the distribution of volume and value of our business in the US.

Speaker Change #203: When we say IC or coded, coded technology in the US 70% of our business is on that but that's not volume.

Speaker Change #203: That's a value number.

Christian Villumsen: That's a value number. I'd say if I look at the market today, our assessment about 60% of that market still needs to be converted. Still needs to be converted. So there are a lot of patients who are on old technology and there's been a lot of people in that market who've invested in driving old technology. So of course this should change. And more than anything, I think it will be driven by a change in volume. So more patients will in effect come on to hydrophilic technology. It will be much, much more difficult to switch people away. It's just given the dedicated codes.

Speaker Change #203: I'd say if I look at the market today, our assessment about 60% of that market still needs to be converted.

Speaker Change #203: Still needs to be converted.

Speaker Change #203: So there are a lot of patients who are on old technology and there's been a lot of people in that market who've invested in driving old technology.

Speaker Change #203: So of course this should change.

Speaker Change #203: And more than anything, I think it will be driven by a change in volume.

Speaker Change #203: So more patients will in effect come on to hydrophilic technology.

Speaker Change #203: It will be much, much more difficult to switch people away.

Speaker Change #203: It's just given the dedicated codes.

Speaker Change #203: And then the final question you had on Octomy China is so, like I said to an earlier question, pretty good activity.

Christian Villumsen: And then the final question you had on Octomy China is so, like I said to an earlier question, pretty good activity. If I look at surgeries and the inflow of patients, much more cost conscious consumers, a way more challenging consumer channel. Where some of the local low cost players are picking up some share. And so that is part of the game now when Chinese consumers are where they are. And I'm really not willing to become more positive until I can see it in the actual behavior by the Chinese consumers. So this is still a business that's sitting at mid-single, they did mid-single, they did plus for now.

Speaker Change #204: If I look at surgeries and the inflow of patients, much more cost conscious consumers, a way more challenging consumer channel.

Speaker Change #205: Where some of the local low cost players are picking up some share.

Speaker Change #205: And so that is part of the game now when Chinese consumers are where they are.

Speaker Change #205: And I'm really not willing to become more positive until I can see it in the actual behavior by the Chinese consumers.

Speaker Change #205: So this is still a business that's sitting at mid-single, they did mid-single, they did plus for now.

Speaker Change #205: And the one on your mid-term care system margin, how much of the independent on top line, especially if there is a possibility that the product might not be covered under Medicare?

Christian Villumsen: And the one on your mid-term care system margin, how much of the independent on top line, especially if there is a possibility that the product might not be covered under Medicare? I'm sorry, I'm not getting that question. What's the question? So you mentioned you are expecting 20% margin for creating margin for care services in 25, 26, so how much is this independent on top line? Well, of course the business needs to continue growth.

Speaker Change #206: I'm sorry, I'm not getting that question.

Speaker Change #207: What's the question?

Speaker Change #208: So you mentioned you are expecting 20% margin for creating margin for care services in 25, 26, so how much is this independent on top line?

Speaker Change #208: Well, of course the business needs to continue growth.

Christian Villumsen: And so we need to continue grow at a care of 30%. We need to deliver that. This is a business that starts with a very favorable growth margin position. So it scales very favorably but we need the growth. It's not a cost exercise.

Speaker Change #209: And so we need to continue grow at a care of 30%.

Speaker Change #209: We need to deliver that.

Speaker Change #209: This is a business that starts with a very favorable growth margin position.

Speaker Change #209: So it scales very favorably but we need the growth.

Speaker Change #209: It's not a cost exercise.

Speaker Change #210: The last question comes from the line of Marco Cox from Barclays.

Marco Cox: The last question comes from the line of Marco Cox from Barclays. Please go ahead. Hi there, Marco from Barclays, speaking on behalf of Hassan Albuquil. Most of my questions have already been asked, but I just had one follow up question on care services. So you mentioned in fact that you will see now harder to initiate new accounts outside of the hospital set. I was just wondering to what extent do you see this?

Speaker Change #210: Please go ahead.

Speaker Change #210: Hi there, Marco from Barclays, speaking on behalf of Hassan Albuquil.

Speaker Change #211: Most of my questions have already been asked, but I just had one follow up question on care services.

Speaker Change #212: So you mentioned in fact that you will see now harder to initiate new accounts outside of the hospital set.

Speaker Change #213: I was just wondering to what extent do you see this?

Speaker Change #213: Is it only minute or I haven't seen it slow down at class the rate?

Marco Cox: Is it only minute or I haven't seen it slow down at class the rate? And following on from that, how strong do you think that the virus is in other indications such as vascular and pressure losses? And has there been any change in your thinking about how you can use your sales force to increase sales in other indications away from BF using BLUs? And further to that, one of your peers talked about actually launching outside of the U.S, with their biologic school photo as early as HMV. I was wondering if there was any change in your thinking there as well on the timeline to launching outside of the U.S, given the central drag in the U.S, we could see from the reimbursed changes.

Speaker Change #214: And following on from that, how strong do you think that the virus is in other indications such as vascular and pressure losses?

Speaker Change #214: And has there been any change in your thinking about how you can use your sales force to increase sales in other indications away from BF using BLUs?

Speaker Change #215: And further to that, one of your peers talked about actually launching outside of the U.S, with their biologic school photo as early as HMV.

Speaker Change #215: I was wondering if there was any change in your thinking there as well on the timeline to launching outside of the U.S, given the central drag in the U.S, we could see from the reimbursed changes.

Speaker Change #215: Thank you.

Speaker Change #215: Yeah, so a good question.

Christian Villumsen: Thank you. Yeah, so a good question. So when I look at the account by account performance in the outside hospital setting, we're not losing accounts. So the accounts that we're doing business with already are staying with caruses. We have good relationship there and good performance there. But we have had a couple instances where potential new accounts are basically awaiting a final decision on LCD. This doesn't, for now at least, materially impact the business.

Speaker Change #215: So when I look at the account by account performance in the outside hospital setting, we're not losing accounts.

Speaker Change #216: So the accounts that we're doing business with already are staying with caruses.

Speaker Change #216: We have good relationship there and good performance there.

Speaker Change #217: But we have had a couple instances where potential new accounts are basically awaiting a final decision on LCD.

Speaker Change #217: This doesn't, for now at least, materially impact the business.

Speaker Change #217: Remember, this is just 20% of the current caruses business.

Christian Villumsen: Remember, this is just 20% of the current caruses business. The footprint is mainly in the acute setting. And it will also continue to be mainly in the acute setting. I am seeing a number of accounts in dermatology pickup, but we still continue to serve existing customers. Now, the product is indicated for all types of wounds. And we have, I think, good medical evidence to support it and also in other indications. And I'm still seeing very strong and patient demand in surgical wounds.

Speaker Change #217: The footprint is mainly in the acute setting.

Speaker Change #217: And it will also continue to be mainly in the acute setting.

Speaker Change #217: I am seeing a number of accounts in dermatology pickup, but we still continue to serve existing customers.

Speaker Change #217: Now, the product is indicated for all types of wounds.

Speaker Change #217: And we have, I think, good medical evidence to support it and also in other indications.

Speaker Change #217: And I'm still seeing very strong and patient demand in surgical wounds.

Speaker Change #217: Otherwise, we couldn't be growing at the rates that we're growing.

Christian Villumsen: Otherwise, we couldn't be growing at the rates that we're growing. And in terms of OUS, you had a question on OUS. Yeah, I'm so I think this is, of course, mostly relevant for people who have most of their business in the outpatient outpatient setting. We are doing some activities in outside outside of outside of the US, but our overwhelming focus is on succeeding in in the US. And it will continue to be so.

Speaker Change #217: And in terms of OUS, you had a question on OUS.

Speaker Change #217: Yeah, I'm so I think this is, of course, mostly relevant for people who have most of their business in the outpatient outpatient setting.

Speaker Change #218: We are doing some activities in outside outside of outside of the US, but our overwhelming focus is on succeeding in in the US. And it will continue to be so.

Speaker Change #218: Building up the next, if you will, the next portfolio of markets is going to be a pretty significant effort.

Christian Villumsen: Building up the next, if you will, the next portfolio of markets is going to be a pretty significant effort. We don't want to put the technology into the market. If we don't have the appropriate pricing, and so there will be a fair amount of clinical and market access work that need to go into play that it becomes an attractive category in Europe and potentially in some markets and Asia pack, but that that's more from medium and long term when we look at it.

Speaker Change #218: We don't want to put the technology into the market.

Christian Villumsen: Great. Thank you. Thank you, operator. This concludes the session and thank you everybody for joining our call. Ladies and gentlemen, the conference is now over. Thank you for choosing course and thank you for participating in the conference.

Speaker Change #219: If we don't have the appropriate pricing, and so there will be a fair amount of clinical and market access work that need to go into play that it becomes an attractive category in Europe and potentially in some markets and Asia pack, but that that's more from medium and long term when we look at it.

Speaker Change #219: Great.

Speaker Change #219: Thank you.

Speaker Change #219: Thank you, operator.

Speaker Change #219: This concludes the session and thank you everybody for joining our call.

Speaker Change #220: Ladies and gentlemen, the conference is now over.

Speaker Change #221: Thank you for choosing course and thank you for participating in the conference.

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