Q3 2025 Coloplast AS Earnings Call

Okay.

And our Investor Relations team, we will start with a short presentation by honest with myself and then open up for questions.

Speaker #3: Good morning, ladies and gentlemen, and welcome to Coloplast's interim financial statements for the first nine months of 2024–2025. My name is Youssef, the correspondent operator.

Youssef (Chorus Call Operator): Good morning, ladies and gentlemen, and welcome to Coloplast A/S's interim financial statements for the first nine months for 2025. My name is Youssef, the Chorus Call Operator. I would like to remind you that all participants will be in listen-only mode and that this conference will be recorded. The presentation will be followed by a question-and-answer session. To ask a question, you can press star and one on your telephone at any time. For operator assistance, please press star and then zero. The conference will not be recorded for publication or for broadcast. At this time, it's my pleasure to hand over to Lars Rasmussen, interim CEO. Please go ahead.

Please turn to slide number three.

It has now been three months since I took over as interim CEO and by focused during this period has been to continue to work on preparing the new company strategy.

Speaker #3: I would like to remind you that all participants will be in listen-only mode and that this conference will be recorded. The presentation will be followed by a question-and-answer session.

With our new strategy, we are reinvigorating the focus on delivering the best customer experience by putting the customer at the center of everything we do.

Speaker #3: To ask a question, you can press star and one on your telephone at any time. For operator assistance, please press star and then zero.

Speaker #3: The conference will not be recorded for publication or for broadcast. At this time, it's my pleasure to hand over to Lars Rasmussen, Interim CEO.

This also means delivering a step change and innovation to solidify our position as the innovation leader in our industry I firmly believe our new strategy will create value for all of our stakeholders.

Speaker #3: Please go ahead.

Speaker #4: Good morning, and welcome to our nine-month 2024-2025 conference call. I'm Lars Rasmussen, interim CEO of Coloplast, and I'm joined by CFO Anders Lonning Skogard and our investor relations team.

Lars Rasmussen: Good morning and welcome to our nine-month 2024/25 conference. I'm Lars Rasmussen, interim CEO of Coloplast A/S, and I'm joined by CFO Anders Lonning-Skovgaard and our investor relationship. We will start with a short presentation by Anders and myself and then open up for questions. Please turn to slide number three. It has now been three months since I took over as interim CEO, and my focus during this period has been to continue the work on preparing the new company strategy. With our new strategy, we are reinvigorating the focus on delivering the best customer experience by putting the customer at the center of everything we do. This also means delivering a step change in innovation to solidify our position as the innovation leader in our industry.

Customers shareholders employees and partners and I look forward to sharing.

More at our capital markets day on the second of September.

To support the successful execution of the new corporate strategy and to simplify our organizational structure, we have decided to organize ourselves differently with a number of changes to the executive leadership team effective immediately.

Speaker #4: We will start with a short presentation by Anders and myself, and then open up for questions. Please turn to slide number three. It has now been three months since I took over as interim CEO, and my focus during this period has been to continue the work on preparing the new company strategy.

Going forward, our commercial organization will be divided into two business units chronic care and acute care.

Speaker #4: With our new strategy, we are reinvigorating the focus on delivering the best customer experience by putting the customer at the center of everything we do.

This structure allows us to respect the differences in market dynamics.

But on these needs and patient pathways.

As part of chronic care, we are establishing a new chronic care commercial organization and the new chronic care R&D function.

Speaker #4: This also means delivering a step change in innovation to solidify our position as the innovation leader in our industry. I firmly believe our new strategy will create value for all of us here: stakeholders, customers, shareholders, employees, and partners. I look forward to sharing more at our Capital Markets Day on the second of September.

The chronic care commercial organization combines our OSM incontinence.

Lars Rasmussen: I firmly believe our new strategy will create value for all of our share stakeholders, customers, shareholders, employees, and partners, and I look forward to sharing more at our Capital Markets Day on the second offset. To support the successful execution of the new Coloplast A/S strategy and to simplify our organizational structure, we have decided to organize ourselves differently with an outbound change to the executive leadership team effective immediately. Going forward, our commercial organization will be divided into two business units: Chronic Care and Acute Care. This structure allows us to respect the differences in market dynamics, customer needs, and patient preferences. As part of Chronic Care, we are establishing a new Chronic Care commercial organization and a new Chronic Care R&D function.

And voice in respiratory care sales and commercial organization under one leader as these businesses. She had the same market and customer dynamics.

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Speaker #4: To support the successful execution of the new Coloplast strategy and to simplify our organizational structure, we have decided to organize ourselves differently, with a number of changes to the executive leadership team, effective immediately.

VP of voice and respiratory care will step into the role of executive Vice President of chronic care commercial.

We are establishing the standalone chronic care R&D functions with a goal of creating a step change within innovation, bringing new products faster to the market.

Speaker #4: Going forward, our commercial organization will be divided into two business units: Chronic Care and Acute Care. This structure allows us to respect the differences in market dynamics, customer needs, and patient pathways.

And building further R&D compensates competencies that will strengthen core stability.

To drive value from our products the leader of the new chronic care anti organizations would be an astros used who will retail in coral crest in November.

Speaker #4: As part of chronic care, we are establishing a new chronic care commercial organization and a new chronic care R&D office. The chronic care commercial organization combines our off-the-conference and voice and respiratory care sales and commercial organizations under one leader.

It will be part of the EOG and report to the CEO.

The new acute acute care area includes interventional royalty advanced wound dressings and cases.

Lars Rasmussen: The Chronic Care commercial organization combines our hospital constants and Voice and Respiratory Care sales and commercial organizations under one leader, as these businesses share the same market and customer dynamics. Our leader now represents currently the Executive Vice President of Voice and Respiratory Care, which steps into the role of Executive Vice President of Chronic Care commercial. We are establishing the standalone Chronic Care R&D function with the goal of creating a step change within innovation, bringing new products to the market, and building further R&D competencies that will strengthen Coloplast A/S's ability to drive value from our products. The leader of the new Chronic Care R&D organization will be Rasmus Hjulst, who will rejoin Coloplast A/S in November and will be part of the ESG and report to the CEO. The new Acute Care area includes Interventional Urology, Advanced Wound Care, and Kerecis.

These treatment areas are characterized by premium products like Corcoran penile implant the <unk> finished.

Speaker #4: As these businesses share the same market and customer dynamics, our leader will also spend time currently as Executive VP or Voice and Respiratory Care, and will step into the role of Executive Vice President of Chronic Care Commercial.

<unk> skin portfolio and our wound dressings.

Most of the products and technologies and these businesses are used in the hospital setting or in specialized private clinics, where innovation and clinical outcomes are critical.

Speaker #4: We are establishing the stand-alone chronic care R&D function with the goal of creating a step change within innovation, bringing new products faster to the market and building further R&D competencies that will strengthen Coloplast's ability to drive value from our products.

Effective immediately we are emerging advanced wound dressings and carries us into a new owner tissue repair organization within acute care.

The goal is to become an innovation leader in this area to create a strong global footprint by merging these two complementary businesses.

Speaker #4: The leader of the new Chronic Care R&D organization will be Rasmus Hjulst, who will rejoin Coloplast in November and be part of the ERT, reporting to the CEO.

And ultimately transform the business into a stronger value creation contributed contributor for the group.

Moving on tissue repair will be led by executive Vice President firsthand Sigrid Olsen Fasten will report to the CEO and be part of the DLC.

Speaker #4: The new acute care area includes interventional neurology, advanced wound dressings, and diuresis. These treatment areas are characterized by premium products like the COLOPLAST penile implants, the diuresis fit skin portfolio, and our wound dressings.

Lars Rasmussen: These treatment areas are characterized by premium products like the Coloplast penile implants, the Kerecis split skin portfolio, and our wound dressings. Most of the products and technologies in these businesses are used in the hospital setting or in specialized private clinics where innovation and clinical outcomes are critical. Effective immediately, we are merging Advanced Wound Care and Kerecis into a new Wound and Tissue Repair organization within Acute Care. The goal is to become an innovation leader in this area, to create a strong global footprint by merging these two complementary businesses, and ultimately transform the business into a stronger value creating contributor for the group. Wound and Tissue Repair will be led by Executive Vice President Fatam Sigurd Jonsson. Fatam will report to the CEO and be part of the ESG.

There are no changes to the intervention royalty business, which will continue under the leadership of executive Vice President Trump jobs.

Speaker #4: Most of the products and technologies in these businesses are used in the hospital setting or in specialized private clinics where innovation and clinical outcomes are critical.

I'd like to congratulate Caroline firsthand and Osmose under new rules and I'd also like to thank Nick like Google, who live quarter class for his dedication and contribution to the company through many years.

Speaker #4: Effective immediately, we are alerting advanced wound dressings and diuresis into a new wound and tissue repair organization within acute care. The goal is to become an innovation leader in this area to create a strong global footprint by merging these two complementary businesses and ultimately transform the business into a stronger value creation contributor for the group.

And finally I'd also like to mention the search for cordless, New shield is progressing well and remains on track.

Please turn to slide number four.

We delivered 7% organic growth and a reported EBIT margin before special items of 28%.

In our third quarter as expected.

Adjusted return on invested capital after tax and before special items was 15% on par with last year.

Speaker #4: Wound and tissue repair will be led by Executive Vice President Ferdinand Sigur Jónsson. Ferdinand will report to the CEO and be part of the ERT.

Before we look at the details on performance, let me speak to two significant proposals that were made over the summer by the U S centers for Medicare and Medicaid mitigate services. Please turn to slide number five.

Speaker #4: There are no changes to the interventional neurology business, which will continue under the leadership of Executive Vice President Thomas Jónsson. I'd like to congratulate Caroline, Ferdinand, and Rasmus on the new roles, and I'd also like to thank Nikolai Bull, who will lead Coloplast, for his dedication and contribution to the company through many years.

Lars Rasmussen: There are no changes to the Interventional Urology business, which will continue under the leadership of Executive Vice President Thomas Jones. I would like to congratulate Caroline, Fatam, and Rasmus on their new roles. I would also like to thank Nicolai Buhl, who leads Coloplast, for his dedication and contribution to the company through many years. Finally, I would also like to mention the search for Coloplast's new CEO is progressing well and remains on track. Please turn to slide number four. We delivered 7% organic growth and a recorded EBITDA margin before special items of 28% in our Q3, as expected. Adjusted return on invested capital after tax and before special items was 15%, on par with last year. Before we look at the details on performance, let me speak to two significant proposals that were made over the summer by the U.S. Centers for Medicare and Medicaid Services.

The first proposed rule announced on the searches of June is related to our chronic care business in the U S where the CMS proposed that medical equipment, such as Ostomy, tracheostomy and erotic uratic and supplies.

Speaker #4: And finally, I'd also like to mention that the search for Coloplast's new CEO is progressing well and remains on track. Please turn to slide number four.

It should be included in the list of items that CMS may subject to competitive bidding.

Speaker #4: We delivered 7% organic growth and recorded an EBIT margin before special items of 28% in our third quarter, as expected. Adjusted return on invested capital after tax and before special items was 15%, on par with last year.

This means that the categories can be considered to be eligible for competitive bidding, but it does not necessarily mean that they will be subject to competitive bidding.

The size of our total U S chronic care businesses around 12% of group sales and we are primarily present in the market as a manufacturer.

Speaker #4: Before we look at the details on performance, let me speak to two significant proposals that were made over the summer by the U.S. Centers for Medicare and Medicaid Services.

Given the complexity of the matter and the U S market. We are unable to provide an estimation of potential financial impact at this point in time.

Speaker #4: Please turn to slide number five. The first proposed rule, announced on the 30th of June, is related to our chronic care business in the U.S., where the CMS proposed that medical equipment such as ostomy, tracheostomy, and neurological supplies should be included in the list of items that CMS may submit for competitive bidding.

Lars Rasmussen: Please turn to slide number five. The first proposed rule announced on the 30th of June is related to our Chronic Care business in the U.S., where the CMS proposed that chronic care medical equipment such as ostomy, tracheostomy, and neurological supplies should be included in the list of items that CMS may subject to competitive bidding. This means that the categories can be considered to be eligible for competitive bidding, but it does not necessarily mean that they would be subject to competitive bidding. The size of our total U.S. Chronic Care business is around 12% of group sales, and we are primarily present in the market as a manufacturer. Given the complexity of the matter and the U.S. market, we are unable to provide an estimation of potential financial impact at this point in time.

If the competitive bidding is implemented we expect potential financial impact in 2027 at the earliest earliest.

The second proposed rule announced on the 14th of July is related to skin substitutes.

The CMS has proposed a fixed payment of $125 per square centimeter to be applied to all skin substitute in 2026.

Speaker #4: This means that the categories can't be considered to be eligible for competitive bidding, but it does not necessarily mean that they will be subject to competitive bidding.

In the outpatient setting around 20% of total cash is sales are derived from the outpatient setting and covered by Medicare.

Speaker #4: The size of our total U.S. chronic care business is around 12% of group sales, and we are primarily present in the market as a manufacturer.

<unk> currently has true product brands in the outpatient setting Mary Jane and shield with an average price of $110 per square centimeter.

Speaker #4: Given the complexity of the matter and the U.S. market, we are unable to provide an estimation of potential financial impact at this point in time.

We perceive this change is positive both for cases and also for the patients and we welcome the effort by the resources.

Speaker #4: If the competitive bidding is implemented, we expect the potential financial impact in 2027 at the earliest. The second proposed rule, announced on the 14th of July, is related to skin substitutes.

Lars Rasmussen: If the competitive bidding is implemented, we expect potential financial impact in 2027 at the earliest. The second proposed rule announced on the 14th of July is related to skin substitutes. The CMS has proposed a fixed payment of $125 per square centimeter to be applied to all skin substitutes in 2026 in the outpatient setting. Around 20% of total Kerecis sales are derived from the outpatient setting and covered by Medicare. Kerecis currently has two product brands in the outpatient setting, Mary Jane and Shield, with an average price of $110 per square centimeter. We perceive the sales as positive, both for Kerecis and also for the patients, and we welcome the effort by the authorities to increase the quality of care for Medicare recipients with the policy changes.

To increase quality of care for Medicare pays Medicare recipients with the policy changes.

Both policies are currently in the commissioning period, and we expect an update on both.

To be published in late 2025.

Speaker #4: The CMS has proposed a fixed payment of $125 per square centimeter to be applied to all skin substitutes in 2026, in the outpatient setting.

And now let's take a closer look at today's results. Please turn to slide number six.

Our Q3 performance was driven by broad based growth across our chronic care businesses, which.

Speaker #4: Around 20% of total diuresis sales are derived from the outpatient setting and covered by Medicare. The diuresis currently has two product brands in the outpatient setting, Merigen and Shield, with an average price of $110 per square centimeter.

I'm very satisfied with.

On the other hand, our advanced wound care business fell short of expectations impacted by preventative and voluntary product return.

In the Chinese room pricing business as well as a quarter with lower than expected gross for operators, which I'll cover more in detail.

Speaker #4: We perceive these changes as positive, both for diuresis and also for the patients, and we welcome the effort by the authorities to increase the quality of care for Medicare patients, Medicare recipients, with the policy changes.

Let's look at the performance by business areas in Ostomy care organic growth was 6% for the first nine months and growth in Danish kroner was 5%.

Speaker #4: Both policies are currently in the commenting period, and we expect an update on both to be published in late 2025. And now, let's take a closer look at today's results.

In Q3 organic growth was 6% with growth in Danish kroner of 2%.

Lars Rasmussen: Both policies are currently in their commencing period, and we expect an update on both to be published in late 2025. Let's take a closer look at today's results. Please turn to slide number six. Our Q3 performance was driven by broad-based growth across our Chronic Care businesses, which I am very satisfied with. On the other hand, our Advanced Wound Care business fell short of expectations, impacted by a preventative and voluntary product return in the Chinese wound dressing business, as well as a quarter with lower than expected growth for Kerecis, which I will cover more in detail. Let's look at the performance by business areas. In Ostomy Care, organic growth was 6% for the first nine months, and growth in Danish kroner was 5%. In Q3, organic growth was 6% with a growth in Danish kroner of 2%.

On an.

Our central mill portfolio it continues to be.

The main growth driver followed by the Provost supporting products.

Speaker #4: Please turn to slide number six. Our Q3 performance was driven by broad-based growth across our chronic care businesses, which I'm very satisfied with. On the other hand, our advanced wound care business fell short of expectations, impacted by preventative and voluntary product returns in the Chinese wound dressing business, as well as a quarter with lower than expected growth for diuresis, which I'll cover more in detail.

Our ensure and assure a certain portfolios continue to post solid growth in emerging markets.

From a geographical perspective growth in the quarter was broad based in Europe, The UK, Germany, and Italy were the main.

Were the main contributors.

The U S continued its solid momentum in Q3.

Contribution from emerging markets, excluding China improved in the quarter driven by an increase in the level of tender activity.

Speaker #4: Let's look at the performance by business areas. In Ostomy Care, organic growth was 6% for the first nine months, and growth in Danish Corner was 5%.

And China posted low single digit growth in line with expectations.

In constant care organic growth was 8% for the first nine months, while growth in Danish kroner was 6%.

Speaker #4: In Q3, organic growth was 6%, with growth in the Danish corner of 2%. Our surgical review portfolio continues to be the main growth driver, followed by the BRAVA supporting products.

The organic.

Q3 growth was 8% growth in Danish kroner was three.

Lars Rasmussen: Our suture and mule portfolio continues to be the main growth driver, followed by the Bravo supporting products. Our suture and the suture alternative portfolios continue to show solid growth in emerging markets. From a geographical perspective, growth in the quarter was broad-based in Europe. The U.K., Germany, and Italy were the main contributors. The U.S. continued its solid momentum into Sweden. Contributions from emerging markets, including China, improved in the quarter, driven by an increase in the level of tender activity, and China posted low single-digit growth in line with the expectations. In Continence Care, organic growth was 8% for the first nine months, while growth in Danish kroner was 6%. The organic Q3 growth was 8%, while growth in Danish kroner was 3%. Growth in Danish kroner was 3%. Growth in the quarter was driven by the main Luja™ catheter, which performed strongly across the key European markets.

It was at 8%.

Growth in Danish kroner was 3%.

Speaker #4: Our surgical and laser alternative portfolios continue to boost solid growth in emerging markets. From a geographical perspective, growth in the corner was broad-based in Europe.

Growth in the quarter was driven by the mail due to catheter.

Which performed strongly across the key European markets.

The launch of <unk> for women concluded in April and the product also performed well and contributed to growth <unk>. Our previous generation of catheters also contributed to growth.

Speaker #4: The UK, Germany, and Italy were the main contributors. The US continued its solid momentum in Q3. Contribution from emerging markets excluding China improved in the quarter, driven by an increase in the level of tender activity, and China posted low single-digit growth in line with expectations.

Driven primarily by the emerging markets region.

Our power care business also made a solid contribution to growth to growth driven by <unk> and plus in Europe, while collecting devices made a modest contribution to growth.

Speaker #4: A constant care organic growth was 8% for the first nine months, while growth in Danish Corner was 6%. The organic Q3 growth was 8%, while growth in Danish Corner was 8%, while growth in Danish Corner was 3%.

From a geographical perspective, all regions contributed to growth markets were reimbursed.

Where reimbursement has been recently established an improved such as Poland continued to perform well and grew double digits.

Whereas in respiratory care posted 9% organic growth for the first nine months with growth in Danish kroner of auto and 9% in Q3 organic growth was 9% while growth in Danish kroner was 8%.

Speaker #4: Growth in the corner was driven by the main luteal catheter, which performed strongly across the key European markets. The launch of Luteal for women concluded in April, and the product also performed well.

Lars Rasmussen: The launch of Luja™ for women concluded in April, and the product also performed well and contributed to growth. SpeediCath®, our previous generation of catheters, also contributed to growth, driven primarily by the emerging markets region. Our Bowel Care business also made a solid contribution to growth, driven by Peristeen Plus in Europe, while Collecting Devices made a modest contribution to growth. From a geographical perspective, all regions contributed to growth. Markets where reimbursement has been recently established or improved, such as Poland, continue to perform well and grew double digits. Voice and Respiratory Care posted 9% organic growth for the first nine months, with growth in Danish kroner of also 9%. In Q3, organic growth was 9%, while growth in Danish kroner was 8%.

Gross and learned victory in Q3 with double digit growth driven by an.

Speaker #4: And contributes to growth. SpeedyCat, our previous generation of catheters, also contributes to growth, driven primarily by the emerging markets region. Our bowel care business also made a solid contribution to growth, driven by previous plus in Europe, while collecting devices made a modest contribution to growth.

An increase in the number of patients served in existing and new markets as well as an increase in patient value driven by the product's life portfolio.

Growth in <unk> in Q3 was high single digits and driven by continued solid demand and from a geographical perspective, all regions contributed to growth.

Speaker #4: From a geographical perspective, all regions contribute to growth. Markets that have been reimbursed have recently been established or improved, such as Poland, which continued to perform well and grew in double digits.

Driven by Europe, and the U S.

In advanced wound care organic growth was 9% for the first nine months and growth in Danish kroner was negative 1%.

Impacted by the divestment of the skincare.

Speaker #4: Voice and respiratory care posted 9% organic growth for the first nine months, with growth in the Danish corner also at 9%. In Q3, organic growth was 9%, while growth in the Danish corner was 8%.

Business in December 2024.

In Q3 organic growth was 4% and growth in Danish kroner was negative minus 8%.

This was the main growth contributors in advanced wound care with growth of 26% in the first nine months.

Speaker #4: Growth in laryngectomy in Q3 was double-digit and driven by an increase in the number of patients served in existing and new markets, as well as an increase in patient value, driven by the Provoked Slide portfolio.

Lars Rasmussen: Growth in laryngectomy in Q3 was double digit and driven by an increase in the number of patients served in existing and new markets, as well as an increase in patient value driven by the Provox Life portfolio. Growth in tracheostomy in Q3 was high single digit and driven by continued solid demand. From a geographical perspective, all regions continue to grow, driven by Europe and the U.S. In Advanced Wound Care, organic growth was 9% for the first nine months, and growth in Danish kroner was negative 1%, impacted by the development of the skin care business in December 2024. In Q3, organic growth was 4%, and growth in Danish kroner was minus 8%. Kerecis (QRSS) was the main growth contributor in Advanced Wound Care, with growth of 26% in the first nine months.

<unk> posted 17% growth impacted by a slowdown in the outpatient setting at the end of the quarter.

The slowdown was a consequence of the NCD delay announced in mid April which cost a market shift to high priced products.

Speaker #4: Growth in tracheostomy in Q3 was high single-digit and was driven by continued solid demand. From a geographical perspective, all regions contributed to growth, particularly driven by Europe and the US.

The inpatient setting continued to deliver solid growth and was the main contributor in Q3.

Speaker #4: In advanced wound care, organic growth was 9% for the first nine months, and growth in the Danish corner was negative 1%. This was impacted by the development of the skin care business in December 2024.

We expect the growth momentum installations to improve in Q4 following the shift in the market in Q3, and we had a good start to the quarter in July.

<unk> operating profit margin, excluding PPA amortization was 12% in the first nine months and 13% in Q3.

Speaker #4: In Q3, organic growth was 4%, and growth in the Danish corner was negative at -8%. Diuresis was the main growth contributor in advanced wound care, with growth of 26% in the first nine months.

The advanced wound dressings business grew 1% organically in the first nine months interest free the business posted negative 2% growth impacted by a preventative and voluntary product Richard in China.

Speaker #4: In Q3, diuresis posted 17% growth, impacted by a slowdown in the outpatient setting at the end of the quarter. The slowdown was a consequence of the LCD delay announced in mid-April, which caused a market shift to high-priced products.

Lars Rasmussen: In Q3, Kerecis (QRSS) posted 17% growth, impacted by a slowdown in the outpatient setting at the end of the quarter. The slowdown was a consequence of the LCD delay announced in mid-April, which caused a market shift to high price products. The inpatient setting continued to deliver solid growth and was the main contributor in Q3. We expect the growth momentum in Kerecis (QRSS) to improve in Q4, following the shift in the market in Q3, and we had a good start to the quarter in July. Kerecis (QRSS) operating profit margin, excluding PPE amortizations, was 12% in the first nine months and 13% in Q3. The advanced wound dressings business grew 1% organically in the first nine months. In Q3, the business posted negative 2% growth, impacted by a preventative and voluntary product return in China, which detracted significantly from growth.

Which detracted significantly from growth during.

During the quarter, we decided to initially initiated a product return of all Biogen adhesive foam pricing in China.

Following a sampling inspection by the authorities on three product loss, which found that the products do not meet the local technical requirement.

Speaker #4: The inpatient setting continued to deliver solid growth and was the main contributor in Q3. We expect the growth momentum in diuresis to improve in Q4 following the shift in the market in Q3, and we had a good start to the quarter in July.

The safety of the product is not compromised and the product.

Continue to comply with the technical standards elsewhere, the negative impact from this product return was around 20 million Danish kroner in the third quarter.

Speaker #4: Diuresis operating profit margin, excluding PPM monetizations, was 12% in the first nine months and 13% in Q3. The advanced wound dressings business grew 1% organically in the first nine months; however, in Q3, the business posted negative 2% growth, impacted by a preventative and voluntary product return in China.

And we expect additional negative impact of around 60 million Danish kroner in Q4.

Our European dressings business was up against a high baseline due to the timing of orders in Germany last year and provided limited offset to the impact of the products, which are in China.

Speaker #4: With distraction significantly affecting growth, during the quarter we decided to initiate a product return of all biotin adhesive foam dressings in China. Following a sampling inspection by the authorities on three product lots, it was found that the products do not meet the local technical requirements.

In insurance the reality organic growth was 1% for the first nine months and growth in Danish kroner was also 1% in Q3 organic growth was 4% and reported growth in Danish kroner was 1%.

Lars Rasmussen: During the quarter, we decided to initiate a product return of all Biatain® Adhesive foam dressings in China. Following a sampling inspection by the authorities on three product lots, which found that the products do not meet the local technical requirements, the safety of the product is not compromised, and the products continue to comply with the technical standards elsewhere. The negative impact from this product return was around 20 million Danish kroner in the third quarter, and we expect a distant negative impact of around 60 million Danish kroner in Q4. Our European dressings business was up against a high baseline due to the timing of quarters in Germany last year and provided limited offset to the impact of the product return in China. In Interventional Urology, organic growth was 1% for the first nine months, and growth in Danish kroner was also 1%.

Growth in Q3 was driven by good momentum in the U S men's health business.

The women's health business also contributed to growth driven by improved momentum and lower baseline last year.

Speaker #4: The safety of the products is not compromised, and the products continue to comply with the technical standards elsewhere. The negative impact from this product return was around 20 million Danish kroner in the third quarter, and we expect an additional negative impact of around 60 million Danish kroner in Q4.

Health and surgery segment continued to detract from growth with around $10 million gains colon negative impact in the quarter.

The segment is showing early signs of recovery and recovery across key accounts. However, the timeline for full recovery.

Speaker #4: Our European dressings business was up against a high baseline due to the timing of orders in Germany last year and provided limited offset to the impact of the product return in China.

<unk> answer.

From a geographical perspective, the U S was the main growth contributor in Q3, while Europe detracted from growth due to the product recall.

Before I hand over to Anna to take us through the financials I would like to provide a brief update on the status of the clinical study for <unk>.

Speaker #4: In interventional neurology, organic growth was 1% for the first nine months, and growth in the Danish corner was also 1%. In Q3, organic growth was 4%, and reported growth in the Danish corner was 1%.

Lars Rasmussen: In Q3, organic growth was 4%, and reported growth in Danish kroner was 1%. Growth in Q3 was driven by good momentum in the U.S. men's health business. The women's health business also contributed to growth, driven by improved momentum and lower baseline value. The better health and surgery segment continued to detract from growth, with around 10 million Danish kroner negative impact in the quarter. The segment is showing early signs of recovery across key accounts. However, the timeline for full recovery remains uncertain. From a geographical perspective, the U.S. was the main growth contributor in Q3, while Europe detracted from growth due to the product recall. Before I hand over to Anders Lonning-Skovgaard to take us through the finances, I would like to provide a brief update on the status of the clinical startup for Incibia.

The 12 months of patient follow up which is required by FDA for our pre market approval submission is completed and we now continue preparing for the <unk> for the FDA submission.

Speaker #4: Growth in Q3 was driven by good momentum in the U.S. men's health business, with the women's health business also contributing to growth, driven by improved momentum and a lower baseline last year.

Launch of <unk> is expected to be in the first half of the next strategic period.

Speaker #4: The better health and surgery segment continued to detract from growth, with around DKK 10 million negative impact in the quarter. The segment is showing early signs of recovery across key accounts; however, the timeline for full recovery remains uncertain.

With exact timing dependent on receiving clearance.

From DSD.

But what are your ASP, please turn to slide number seven.

Thank you Lars and good morning, everyone reported revenue for the first nine months increased by 836 million Danish kroner or 4% compared to last year organic growth contributed $1 3 billion Danish kroner or around 7% to reported revenue.

Speaker #4: From a geographical perspective, the U.S. was the main growth contributor in Q3, while Europe detracted from growth due to the product recall. Before we hand over to Anders to take us through the financials, I would like to provide a brief update on the status of the clinical study for Entyvia. The 12-month patient follow-up, which is required by the FDA for our pre-market approval submission, is completed, and we are now continuing to prepare the dossier for the FDA submission.

We knew from divested operations, mostly related to the divestment of the skincare business in December 24th.

Lars Rasmussen: The 12-month patient follow-up, which is required by the FDA for our pre-market approval submission, is completed, and we now continue preparing for the dossier for the FDA submission. Launch of Incibia is expected to be in the first half of the next strategic period, with exact timing and non-receiving clearance, from the FDA. Over to you, Anders. Please turn to slide number seven. Thank you, Lars Rasmussen, and good morning, everyone. Reported revenue for the first nine months increased by 836 million Danish kroner, or 4% compared to last year. Organic growth contributed 1.3 billion Danish kroner, or around 7% to reported revenue. Revenue from divested operations, mostly related to the divestment of the skin care business in December 2024, reduced reported revenue by DKK 237 million, or around 1%.

Reduced reported revenue by 237 million Danish kroner or around 1%.

Foreign exchange rates had a negative impact of 252 million Danish kroner, unreported revenue or around 1% mainly related to the depreciation of the U S dollar and a basket of emerging market currencies against the <unk> com.

Speaker #4: The launch of Entyvia is expected to be in the first half of the next strategic period, with exact timing depending on receiving clearance from the FDA.

Please turn to slide eight.

Gross profit for the first nine months amounted to $14 2 billion Danish kroner corresponding to a gross margin of 68% on par with last year.

Speaker #4: Over to you, Anders. Please turn to slide number seven.

Speaker #5: Thank you, Lars, and good morning, everyone. Reported revenue for the first nine months increased by 836 million Danish kroner, or 4%, compared to last year.

The gross margin was positively impacted by a favorable development in input cost price increase and constant product mix, partly offset by ramp up cost at our manufacturing sites in Costa Rica and possible.

Speaker #5: Organic growth contributed 1.3 billion Danish kroner, or around 7% to reported revenue. Revenue from divested operations, mostly related to the divestment of the skin care business in December 2024, reduced reported revenue by 237 million Danish kroner, or around 1%.

Gross margin also included a small negative impact from currencies of around 10 basis points.

Operating expenses for the first nine months amounted to $8 5 billion things corner, a 4% increase from last year.

Speaker #5: For the exchange rate, there was a negative impact of 252 million Danish kroner on reported revenue, or around 1%, mainly related to the depreciation of the US dollar and various emerging market currencies against the Danish kroner.

Lars Rasmussen: Foreign exchange rates had a negative impact of DKK 252 million on reported revenue, or around 1%, mainly related to the depreciation of the U.S. dollar and the battle of emerging market currencies against the Danish Krone. Please turn to slide eight. Gross profit for the first nine months amounted to DKK 14.2 billion, corresponding to a gross margin of 68%, on par with last year. The gross margin was positively impacted by a favorable development initiative cost, price increase, and country and product links, partly offset by ramp-up costs at our manufacturing sites in Costa Rica and Portugal. The gross margin also included a small negative impact from currencies of around 10 basis points. Operating expenses for the first nine months amounted to DKK 8.5 billion, a 4% increase from last year. The distribution to sales ratio for the first nine months was 33%, on par with last year.

The distribution to sales ratio for the first nine months was 33% on par with last year.

The increase in distribution cost was driven by continued commercial investments in <unk> and higher sales activities across markets.

Speaker #5: Please turn to slide eight. Gross profit for the first nine months amounted to DKK 14.2 billion, corresponding to a gross margin of 68%, on par with last year.

This is the.

Distribution costs also included around 30 million Danish kroner extraordinary costs related to the new distribution center in the U S. In the first half of the year.

Speaker #5: The gross margin was positively impacted by a favorable development in input costs, price increases, and country and product mix, partly offset by ramp-up costs at our manufacturing sites in Costa Rica and Portugal.

The IP to sales ratio for the first nine months was 4% compared to 5% last year.

It includes positive impact from a high baseline in the first half of the year as well as benefit from synergies from the excess medical integration.

Speaker #5: The gross margin also included a small negative impact from currencies of around 10 basis points. Operating expenses for the first nine months amounted to DKK 8.5 billion, a 4% increase from last year.

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

Overall this resulted in an operating profit before special items of $5 7 billion Danish kroner in the first nine months and a 4% increase compared to last year.

Speaker #5: The distribution-to-sales rate for the first nine months was 33%, on par with last year. The increase in distribution costs was driven by continued commercial investments in carousels and higher sales activities across markets.

The EBIT margin before special items in the period was 27% on par with last year.

Lars Rasmussen: The increase in distribution cost was driven by continued commercial investments in Kerecis and higher sales activities across markets. The distribution cost also included around DKK 30 million extraordinary costs related to the new distribution center in the U.S. in the first half of the year. The admin to sales ratio for the first nine months was 4%, compared to 5% last year, and includes positive impact from a high baseline in the first half of the year, as well as benefits from synergies from the Atos Medical integration. The R&D to sales ratio for the first nine months was 3% of sales, on par with last year. Overall, this resulted in an operating profit before special items of DKK 5.7 billion in the first nine months and a 4% increase compared to last year. EBITDA margin before special items in the period was 27%, on par with last year.

The EBIT margin in the first nine months continues to include negative impact of around 100 basis points from the inclusion of characters, including PPA amortization costs in line with expectations as well as around 30 basis points benefit from the divestment of the skincare business.

Speaker #5: Distribution costs also included around DKK 30 million in extraordinary costs related to the new distribution center in the U.S. in the first half of the year.

Speaker #5: The admin to sales ratio for the first nine months was 4%, compared to 5% last year. This includes a positive impact from a high baseline in the first half of the year, as well as benefits from synergies from the adjusted medical integration.

Currency had a small negative impact on the reported EBIT margin of around 10 basis points in the first nine months.

<unk> items in the first nine months were a net expense of 875 million Danish kroner compared to a net expense of 621 million things corner last year.

Speaker #5: The R&D to sales ratio for the first nine months was 3% of sales, on par with last year. Overall, this resulted in an operating profit before special items of DKK 5.7 billion in the first nine months, reflecting a 4% increase compared to last year.

The increase in net financial expenses was mostly driven by a noncash impact from loss and balance sheet items in Q3.

Primarily related to the depreciation of the U S dollar against today's corn.

Speaker #5: The EBIT margin before special items in the period was 27%, on par with last year. The EBIT margin in the first nine months continues to include a negative impact of around 100 basis points from the inclusion of carousels, including PPA and monetization costs.

The ordinary tax expense in the first nine months was 1 billion Danish kroner with an ordinary tax rate of 22% on par with last year.

Lars Rasmussen: EBITDA margin in the first nine months continues to include a negative impact of around 100 basis points from the inclusion of Kerecis, including PPA amortization costs, in line with the expectations, as well as around 30 basis points benefit from the divestment of the skin care business. Currency had a small negative impact on the reported EBITDA margin of around 10 basis points in the first nine months. Financial items in the first nine months were at a net expense of 875 million Danish kroner, compared to a net expense of 621 million Danish kroner last year. The increase in net financial expenses was most driven by non-tax impact from losses on balance sheet items in Q3, primarily related to the depreciation of the U.S. dollar against the Danish kroner.

The total tax expense in the first nine months was $1 8 billion things corner impacted by the transfer of the cases intellectual property from Istent to Denmark.

Speaker #5: In line with expectations, as well as around 30 basis points benefit from the divestment of the skin care business. Currency had a small negative impact on the reported EBIT margin of around 10 basis points in the first nine months.

As a result of the extra warranted extraordinary tax expense the effective tax rate in the first nine months amounted to 40%.

Adjusted for the Ketosis IP transfer net profit before special items in the first nine months was $3 8 billion gains corner at $15 million decrease compared to last year.

Speaker #5: Financial items in the first nine months were at a net expense of DKK 875 million compared to a net expense of DKK 621 million last year.

Impacted by the higher level of net financial expenses.

Speaker #5: The increase in net financial expenses was primarily driven by a non-cash impact from losses on balance sheet items in Q3, which was related to the depreciation of the U.S. dollar against the Danish krone.

Adjusted diluted earnings per share before special items decreased by 1% to 16 76 days.

Please turn to slide number nine.

Speaker #5: The ordinary tax expense in the first nine months was 1 billion Danish kroner, with an ordinary tax rate of 22%, on par with last year.

Lars Rasmussen: The ordinary tax expense in the first nine months was 1 billion Danish kroner, with an ordinary tax rate of 22%, on par with last year. Total tax expense in the first nine months was 1.8 billion Danish kroner, impacted by the transfer of the Kerecis intellectual property from Iceland to Denmark. As a result of the extraordinary tax expense, the effective tax rate in the first nine months amounted to 40%. Adjusted for the Kerecis IP transfer, net profit before special license in the first nine months was 3.8 billion Danish kroner, a 15 million decrease compared to last year, impacted by the higher level of net financial expenses. Adjusted diluted earnings per share before special license decreased by 1% to 16.76 Danish kroner. Please turn to slide number nine.

Operating cash flow for the first nine months was an inflow of $4 4 billion Danish kroner compared to an inflow of 718 million Danish kroner last year impacted.

Speaker #5: Total tax expense in the first nine months was DKK 1.8 billion, impacted by the transfer of the carousels' intellectual property from Iceland to Denmark.

Impacted by the tax payment related to the excess medical intellectual property transfer.

The underlying development in operating cash flow was positive driven mostly by lower income tax paid and an increase in operating profit.

Speaker #5: As a result of the extraordinary tax expense, the effective tax rate in the first nine months amounted to 40%. Adjusted for the carousel's IP transfer, net profit before special items in the first nine months was 3.8 billion Danish kroner, a 15 million kroner decrease compared to last year.

Cash flow from investing activities was an outflow of 861 million Danish kroner compared to an outflow of 904 million things corner last year Capex.

Speaker #5: Impacted by the higher level of net financial expenses, adjusted diluted earnings per share before special items decreased by 1% to DKK 16.76. Please turn to slide number nine.

Capex in the first nine months was 5% of sales against 4% last year.

As a result, the free cash flow for the first nine months was an inflow of $3 5 billion Danish kroner compared to an outflow of 186 million gains corner last year.

<unk> the positive impact from the skincare divestment and the negative impact from the tax payment related to the excess medical IP transfer last year. The adjusted free cash flow for the first nine months was an inflow of $3 3 billion Danish kroner or a four.

Speaker #5: Operating cash flow for the first nine months was an inflow of 4.4 billion Danish kroner compared to an inflow of 718 million Danish kroner last year.

Lars Rasmussen: Operating cash flow for the first nine months was an inflow of 4.4 billion Danish kroner, compared to an inflow of 718 million Danish kroner last year, impacted by the tax payment related to the Atos Medical intellectual property transfer. The underlying development in operating cash flow was positive, driven mostly by lower income tax paid and an increase in operating profit. Cash flow from investing activities was an outflow of 861 million Danish kroner, compared to an outflow of 904 million Danish kroner last year. CapEx in the first nine months was 5% of sales against 4% last year. As a result, the free cash flow for the first nine months was an inflow of 3.5 million Danish kroner, compared to an outflow of 186 million Danish kroner last year.

Speaker #5: Impacted by the tax payment related to the adjusted medical intellectual property transfer, the underlying development in operating cash flow was positive, driven mostly by lower income taxes paid and an increase in operating profit.

34% increase compared to the adjusted free cash flow from last year.

Yeah.

The trailing 12 months cash conversion was 83% while the fee cash flow to sales ratio was 16%.

Speaker #5: Cash flow from investing activities was an outflow of DKK 861 million compared to an outflow of DKK 904 million last year. Capex in the first nine months was 5% of sales, compared to 4% last year.

Net working capital amounted to around 26% of sales impacted primarily by decreasing trade payables now.

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

Speaker #5: As a result, the free cash flow for the first nine months was an inflow of DKK 3.5 billion compared to an outflow of DKK 186 million last year.

We continue to expect organic revenue growth for the year to be around 7% with the following updated assumptions and advanced wound dressings. We have now included the negative impact from the product return in China, which will have a total impact of around 80 million Danish kroner in the year of which <unk>.

Speaker #5: Excluding the positive impact from the skin care divestment and the negative impact from the tax payment related to the adjusted medical IP transfer last year, the adjusted free cash flow for the first nine months was an inflow of DKK 3.3 billion.

Lars Rasmussen: Excluding the positive impact from the skin care divestment and the negative impact from the tax payment related to the Atos Medical IP transfer last year, the adjusted free cash flow for the first nine months was an inflow of 3.3 billion Danish kroner, or a 44% increase compared to the adjusted free cash flow from last year. The trading 12-month cash conversion was 83%, while the free cash flow to sales ratio was 16%. Networking capital amounted to around 26% of sales, impacted primarily by decreasing trade payables. Now let's look at the financial guidance for the year. Please turn to slide number 10. We continue to expect organic revenue growth for the year to be around 7%, with the following updated assumptions.

60 million Danish kroner in Q4.

We expect this negative impact will be offset by good performance in the other businesses business areas. In Q4, we expect a pickup in momentum in our chronic care businesses into Q4 supported by emerging markets Tinder facing us.

Speaker #5: All have a 44% increase compared to the adjusted free cash flow from last year. The trading 12-month cash conversion was 83%, while the free cash flow to sales ratio was 16%.

Speaker #5: Networking capital amounted to around 26% of sales, impacted primarily by a decrease in trade payables. Now, let's look at the financial guidance for the year.

As already mentioned the growth momentum for cases in Q4 is also expected to pick up.

Finally in entering two honestly, we continue to expect a flattish growth rate for the year with continued uncertainty in the recovery of the bladder health into jewelry business.

Speaker #5: Please turn to slide number 10. We continue to expect organic revenue growth for the year to be around 7%, with the following updated assumptions.

Next the reported revenue growth in Danish kroner is now expected to be between three and 4% from previously around 4% reported revenue growth continues to assume around two percentage points negative impact from currencies.

Speaker #5: In advanced wound dressings, we have now included the negative impact from the product return in China, which will have a total impact of around 80 million Danish kroner in the year, of which 60 million Danish kroner in Q4.

Lars Rasmussen: In Advanced Wound Care, we have now included the negative impact from the product return in China, which will have a total impact of around 80 million Danish kroner in the year, of which 60 million Danish kroner in Q4. We expect this negative impact to be offset by good performance in the other business areas in Q4. We expect a pickup in momentum in our Chronic Care businesses into Q4, supported by emerging market tender staging. As already mentioned, the growth momentum for Kerecis in Q4 is also expected to pick up. Finally, in Interventional Urology, we continue to expect a flattish growth rate for the year, with continued uncertainty in the recovery of the bladder health and surgery business. Next, the reported revenue growth in Danish kroner is now expected to be between 3% and 4% from previously around 4%.

And around 1%, one five percentage points negative impact from the skin.

Speaker #5: We expect this negative impact to be offset by good performance in the other business areas in Q4. We expect a pickup in momentum in our chronic care businesses into Q4, supported by emerging markets and tender-facing.

<unk> divestment.

The EBIT margin before special items is still expected to be 27% to 28% and the assumptions laid out in may and largely unchanged.

We expect a strong into the year in terms of the EBIT margin enabled by prudent management of Opex and scale effect.

Speaker #5: As already mentioned, the growth momentum for carousels in Q4 is also expected to pick up. Finally, in interventional neurology, we continue to expect a flattish growth rate for the year, with continued uncertainty in the recovery of the better health and surgery business.

Currencies are expected to have around neutral impact on the EBIT margin.

For 'twenty four 'twenty five I still expect around 450 million things Kona and special items. In Q4, we will have a significant level of special items, partly related to organizational restructuring, China and cost optimization across into into urology business.

Speaker #5: Next, the reported revenue growth in Danish kroner is now expected to be between 3% and 4%, down from previously around 4%. Reported revenue growth continues to assume around 2 percentage points negative impact from currencies and around 1.5 percentage points negative impact from the skincare divestment.

Lars Rasmussen: Reported revenue growth continues to assume around 2 percentage points negative impact from currencies and around 1.5% negative impact from the skin care divestment. The EBITDA margin before special items is still expected to be 27% to 28%, and the assumptions laid out in May are largely unchanged. We expect a strong end-to-the-year in terms of the EBITDA margin, enabled by prudent management of OpEx and scale effects. Currencies are expected to have around a neutral impact on the EBITDA margin. For 2024/2025, I still expect around 450 million Danish kroner in special items. In Q4, we will have a significant level of special items, partly related to organizational restructuring in China and cost optimization across the Interventional Urology business, both of which will have a positive impact on the profitability and value creation beyond this financial year.

Both of which we have.

Positive impact on profitability and value creation beyond this financial year.

The net financial expenses for 'twenty, four 'twenty, five and now expected at around minus $950 million range corner impacted by the weaker U S. Dollar in Q3 two.

Speaker #5: The EBIT margin before special items is still expected to be 27% to 28%, and the assumptions laid out in May are largely unchanged. We expect a strong end of the year in terms of the EBIT margin, enabled by prudent management of OPEX and scale effects.

To be partly offset by the recent improvements in.

<unk>.

And there are no changes to the assumptions on the ordinary effective tax rate and capex.

Speaker #5: Currencies are expected to have a neutral impact on the EBIT margin. For 2024/2025, I still expect around 450 million Danish kroner in special items. In Q4, we will have a significant level of special items, partly related to organizational restructuring in China and cost optimization across the interventional neurology business.

Our net working capital.

I now expect the net working capital ratio to be around 25% impacted by the lower level of absolute sales our long term expectations of around 24% are unchanged.

Finally, a brief update on tariffs our products in the chronic care categories continued to be exempt from tariffs and as such the financial impact on core pest from U S. Tariffs is still expected to be immaterial.

Speaker #5: Both of which we have a positive impact on the profitability and value creation beyond this financial year. The net financial expenses for 2024/2025 are now expected to be around minus DKK 950 million, impacted by the weaker U.S. dollar in Q3.

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

Lars Rasmussen: The net financial expenses for 2024/2025 are now expected at around 950 million Danish kroner, impacted by the Visa U.S. dollar in Q3. To be partly offset by the recent improvements, and there are no changes to the assumptions on the ordinary and effective tax rate on capitals. On networking capital, I now expect the networking capital ratio to be around 25%, impacted by the lower level of absolute sales. Our long-term expectations of around 24% are unchanged. Finally, a brief update on tariffs. Our products in the Chronic Care categories continue to be exempt from tariffs, and as such, the financial impact on Coloplast A/S on U.S. tariffs is still expected to be immaterial. 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 you May press star and one on the telephone.

Speaker #5: To be partly offset by the recent improvements in, and there are no changes to the assumptions on the ordinary effective tax rate on CapEx.

So to confirm that you have entered the queue. If you wish to remove yourself from the question queue. You May Press Star and then two questions on the phone a Rick question disabled loudspeaker modal asking a question in the interest of time. Please limit yourself to two questions. Anyone has a question you May press star one at this time.

Speaker #5: On networking capital, I now expect the networking capital ratio to be around 25%, impacted by the lower level of absolute sales. Our long-term expectations of around 24% are unchanged.

Question comes from Hassan Al <unk> Barclays. Please go ahead.

Speaker #5: Finally, a brief update on tariffs. Our products in the chronic care categories continue to be exempt from tariffs. As such, the financial impact on Coloplast from U.S. tariffs is still expected to be immaterial.

Good morning, and thank you for taking my questions I have three please firstly laws, we've seen a couple of impactful product recalls lately as well as execution issues, which you've talked about and addressing can you talk about some of the proactive steps you are taking on product quality to prevent some of these recalls.

Speaker #5: Thank you very much. Operator, we are now ready to take questions.

Speaker #2: We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their telephone. You will hear a tone to confirm that you have entered the queue.

Youssef (Chorus Call Operator): We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and then two. Questioners on the phone are requested to disable loudspeaker mode while asking a question. In the interest of time, please limit yourself to two questions. Anyone who has a question may press star one at this time. Our first question comes from Hassan Al-Wakil, Barclays. Please go ahead.

Recurring should we expect to hear more about recalls as part of any type.

<unk>.

Secondly related to that what are your expectations on recovering our sales given the recent experience with the recall and bladder health, while European hospitals sourced Chinese alternatives do you see a similar risk.

Speaker #2: If you wish to remove yourself from the question queue, you may press star and then two. Questioners on the phone are requested to disable loudspeaker mode while asking a question.

Speaker #2: In the interest of time, please limit yourself to two questions. Anyone who has a question may press star one at this time. Our first question comes from Hassan Al-Wakil, Barclays.

China set by attained adhesives.

Yes.

Gladhill from surgery, showing some early signs of recovery across key accounts do you expect this better than expected performance in <unk>.

Speaker #2: Please go ahead.

Speaker #3: Good morning, and thank you for taking my questions. I have three, please. Firstly, Lars, we've seen a couple of impactful product recalls lately, as well as execution issues.

Hassan Al-Wakil: Good morning, and thank you for taking my questions. I have three, please. Firstly, Lars, we have seen a couple of impactful product recalls lately, as well as execution issues, which you have talked about and are addressing. Can you talk about some of the proactive steps you are taking on product quality to prevent some of these recalls from recurring? Should we expect to hear more about recalls as part of any deep dive exercise? Secondly, related to this, what are your expectations on recovering lost sales, given the recent experience with the recall in bladder health, where European hospitals sourced Chinese alternatives? Do you see a similar risk here in China for Biatain® Adhesive? Then thirdly, on Interventional Urology, you noted that bladder health and surgery are showing some early signs of recovery across key accounts.

FY 'twenty five given the better year to date performance versus guidance.

And if you could also talk about the improvement in women's health and whether you view this as a stabilization or recovery in the ceilings business really trying to get a sense on your thoughts for 2026 for interventional urology.

Speaker #3: Which you've talked about and are addressing. Can you talk about some of the proactive steps you are taking on product quality to prevent some of these recalls from recurring?

Speaker #3: Should we expect to hear more about recalls as part of any deep dive exercise? Secondly, related to this, what are your expectations on recovering lost sales given the recent experience with the recall in bladder health, where European hospitals sourced Chinese alternatives?

So I will take your first question Hassan.

And I'll say it will take will take the two other.

So I.

I think that the situation that we have with <unk>.

The recall of <unk>.

Speaker #3: Do you see a similar risk here in China for biotin adhesive? And then, thirdly, on IU, you noted that bladder health and surgery are showing some early signs of recovery across key accounts.

Youll article products, where we had a breach of the sterilization barrier.

It was.

Something that everybody who has been in this business for some years.

Speaker #3: Do you expect this better-than-expected performance in IU for FY25, given the better year-to-date performance versus guidance? And if you could also talk about the improvement in women's health and whether you view this as a stabilization or recovery in the slings business. I'm really trying to get a sense of your thoughts for 2026 for Interventional Urology.

Hassan Al-Wakil: Do you expect this better-than-expected performance in Interventional Urology for FY25, given the better year-to-date performance versus guidance? If you could also talk about the improvement in women's health and whether you view this as a stabilization or recovery in the slings business, really trying to get a sense on your thoughts for 2026 for Interventional Urology. Thank you.

<unk> faced in some shape or form now this was.

A pretty big one of course for you already.

Therefore, it was also show noticeable.

But.

But what we experienced in China is something that we've never tried before and then steps. There is no comparison between the two because we have no.

We have no customer complaints on the.

Speaker #3: Thank you.

Speaker #4: So I will take your first question, Hassan, and Aras will take the two others. I think that the situation we have with the recall of the urological products, where we had a breach of the sterilization barrier, was something that everybody who has been in this business for some years has faced in some shape or form.

Lars Rasmussen: I will take your first question, Hassan, and I will take the two others. I think that the situation that we have with the recall of the urological products, where we had a breach of the sterilization barrier, was something that everybody who has been in this business for some years has faced in some shape or form. This was a pretty big one, of course, for urology, and therefore it was also so noticeable. What we experienced in China is something that we never tried before, and there is absolutely no comparison between the two because we have no customer complaints on the Biatain® Adhesive foam dressings products. The products work perfectly fine. We observed no changes to what we normally see, but this is a special technical specification for China that only exists in China.

The biotech foam products.

The product works perfectly fine.

We observed no changes to what we normally see.

But this is a suspicion technical.

Specification for China that only exist in China.

And to top it off then.

Our thoughts as find they take a batch and then these tickets ambry from the beds, if they find something up against the specification that doesn't.

Speaker #4: Now, this was a pretty big one, of course, for urology, and therefore it was also so noticeable. But what we experienced in China is something that we never tried before.

Mitch.

Then we will get a fine on top of that.

Which.

Factors bigger than the value of the of what they take out.

Speaker #4: And there's absolutely no comparison between the two because we have no customer complaints on the biotin foam products. The products work perfectly fine; we observed no changes to what we normally see. But this is a special technical specification for China that only exists in China. To top it off, if the authorities find discrepancies, they take a batch and then they take a sample from the batch.

So so we don't remove it from nabokov, because any quality issues, but there is a specification which is super special that we cannot live up to.

In the end.

And we.

Of course, we are open to discussions with.

With.

With the market about this because absolutely no safety concerns.

But.

But this is just a very slow moving train we have also issued.

Lars Rasmussen: To top it off, if the authorities find they take a batch and then they take a sample from the batch, if they find something up against the specification that does not match, then we will get a fine on top of that with factors bigger than the value of what they take out. We do not remove it from the market because there are any quality issues, but there is a specification, which is super special, that we cannot live up to. We, of course, have opened discussions with the market about this because there are absolutely no safety concerns. This is just a very slow-moving train. We have also issued access. We try to get access for new products or for substitute products to the market, which is also just moving very slowly.

Excess.

No.

Sort of.

We tried to get access for our new products are substitute products to the market, which is also just moving very slowly. So so I think that this is something that does have an effect. Both this year and next year on wound care.

Speaker #4: If they find something up against this specification that doesn't match, then we will get a fine on top of that, which is, you know, factors bigger than the value of what they take out.

Speaker #4: So we don't remove it from the market because there are any quality issues, but there is a specification which is super special that we cannot live up to.

Because of the character of how this works.

This is what you can.

Expected in the current market environment. Unfortunately, but it has absolutely nothing to do with the quality.

Speaker #4: And we, I mean, of course, we have opened discussions with the market about this because there are absolutely no safety concerns. But this is just a very slow-moving train.

Yeah.

So hassan in relation to you our urology.

Question, Yes, we had a good Q3 with.

4% growth.

Is it driven by good growth within men's health women's health and to some extent also early recovery within the bladder health.

Speaker #4: We have also issued access, sort of, you know, we try to get access for our new products and substitute products to the market, which is also just moving very slowly.

We continue to expect mens and womens health with good growth rates into Q4, but we still have some uncertainty in terms of the recovery.

After the recall we did in back in December.

Speaker #4: So, I think that this is something that does have an effect, both this year and next year, on wound care. Because of the character of how this works.

Lars Rasmussen: I think that this is something that does have an effect both this year and next year on Advanced Wound Care because of the character of how this works. I think this is what you can expect in the current market environment, unfortunately, but it has absolutely nothing to do with the quality. In relation to your urology question, yes, we had a good Q3 with 4% growth, really driven by good growth within men's health, women's health, and to some extent also early recovery within the bladder health. We continue to expect the men's and women's health with good growth rates into Q4, but we still have some uncertainty in terms of the recovery after the recall we did back in December.

And the moving parts into next year.

Of course, we continue to expect our men's and women's health at the current rates and then we will be obligated to an easier baseline, especially from from Q2 due to the recall.

Speaker #4: I think this is what you can expect in the current market environment, unfortunately, but it has absolutely nothing to do with the quality.

Speaker #5: Yeah, so Hassan in relation

We are expecting that our IU business will pick up in terms of growth into 'twenty five 'twenty six.

Speaker #4: To your urology question, yes, we had a good Q3 with ups in growth. It was really driven by strong growth within men's health, women's health, and, to some extent, also early recovery within bladder health.

Okay. Thank you.

Yes.

Our next question comes from Martin <unk> Seb. Please go ahead.

Yes.

Speaker #4: We continue to expect growth rates for men's and women's health to remain strong into Q4, but we still have some uncertainty regarding the recovery after the recall we did back in December.

Right yes.

I will limit myself to two questions. So I'll ask also on time and.

Just on <unk>.

Could you maybe elaborate a little bit of that filing we will not get any results.

Speaker #4: And the moving path into next year, of course, we continue to expect men's and women's health at the current rates. And then we will be up against an easier baseline, especially from Q2, due to the recall.

Lars Rasmussen: The moving path into next year, of course, we continue to expect men's and women's health at the current rates, and then we will be up against an easier baseline, especially from Q2 due to the recall. We are expecting that our Interventional Urology business will pick up in terms of growth into 2025/2026.

Right now also so how comfortable are you with.

The regulatory acceptance.

Of the product and then secondly lots of course appreciate that.

<unk>, two which will now also you will come with new long term targets.

Speaker #4: And so we are expecting that our IU business will pick up in terms of growth into 2025/2026.

But if you just can you know broad based look at the two divisions here at the corner Caf business.

Acute care chronic care very stable growth a highly predictable.

Speaker #3: Perfect, thank you.

Hassan Al-Wakil: Perfect. Thank you.

<unk> K I should read that.

Speaker #2: Our next question comes from Martin Parkoy, SCB. Please go ahead.

Youssef (Chorus Call Operator): Our next question comes from Martin Parkoy SEB. Please go ahead.

That is a little bit more of a chronic rollercoaster growth with very different growth rates. So so how do you see the growth trajectory for these two business users with respect to stability.

Speaker #6: Yes, Martin Parkoy, SCB, and I will limit myself to two questions so I also have time. Just on Entyvia, can you maybe elaborate a little bit on that?

Lars Rasmussen: Yes. Martin Parkoy SEB, I will limit myself to two questions so others also have time. Just on Incibia, can you maybe elaborate a little bit on that? Your filing will not get any results right now. How comfortable are you with regulatory exceptions of the product? Secondly, Lars, I appreciate that two weeks from now or so you will come with new long-term targets. If we just can broadly look at the two divisions you now made, the Chronic Care business and the Acute Care. Chronic Care, very stable growth, highly predictable. Acute Care, should we see that as a little bit more of a gonic roller coaster growth with very different growth rates? How do you see the growth trajectory for these two business uses with respect to stability? Martin, let me start with the Incibia update.

Okay.

So Martin let me start with the <unk> update and so as we just mentioned and we are on plan and we are still very comfortable that we are getting it through the FDA process in the U S and we still expect they'd be able to launch this solution in the <unk>.

Speaker #6: Now you are filing; we will not get any results right now. So how comfortable are you with regulatory acceptance of the product? And then secondly, Lars, of course, I appreciated that in two weeks from now you will come with new long-term targets. But if you can, you know, provide a broad-based look at the two divisions you have now: the chronic care business and the acute care.

First part of the next strategic.

So overall, we are on plan with the <unk>.

Speaker #6: Chronic care shows very stable growth and is highly predictable. In contrast, acute care can be seen as a bit more of a chronic roller coaster, exhibiting very different growth rates.

Launch.

Yes.

Yes.

And lastly, yeah. So so on the.

On the question that you have on Nick on chronic and acute.

Speaker #6: So how do you see the growth trajectory for these two business uses with respect to stability?

Acute care.

So.

So.

There is a reason why we divided the company into two business units now first we have.

Speaker #4: So, Martin, let me start with the Entyvio update. As we just mentioned, we are on plan, and we are still very comfortable that we are getting through the FDA process in the U.S.

We have the size and scale now for the two parts of the business.

Lars Rasmussen: As we just mentioned, we are on plan, and we are still very comfortable that we are getting through the FDA process in the U.S., and we still expect that we are able to launch the solution in the first part of the next strategic process. Overall, we are on plan with the Incibia launch. Lastly, on the question that you have on Chronic and on Acute Care, there is a reason why we divided the company into two business units now. First, we have the size and scale now for the two parts of the business for them to, in a sense, have their own home. We will have Chronic Care with approximately 20 billion in annual sales, and then the Acute Care with approximately 8 billion.

Them to in essence have the open hole, so we will have.

Chronic care with approximately $20 billion.

Annual sales and.

Speaker #4: And we still expect that we are able to launch the solution in the first part of the next strategic process. So overall, we are on plan with the Entyvia launch.

And then the acute care with approximately $8 billion.

We recognize that have done that for many years that is at.

A distinct difference in the market environment, whether you are in chronic care in acute care.

Speaker #4: And last, so on the

And chronic care is in.

Speaker #6: Question that you have on chronic and on acute care. There is a reason why we divided the company into two business units now.

And the nature of course significantly more chronic and stable.

Then what we see on the other side.

So so that's no change to what it was beforehand.

But what we.

Speaker #6: First, we have the size and scale now for the two parts of the business. For them to, in a sense, have their own home.

What we tried to do with this move is that we also.

We also giving.

With that I am not chronic care inside a quarter past a home where they.

Speaker #6: So we will have chronic care with approximately $20 billion in annual sales, and then the acute care with approximately $8 billion. We recognize and have done that for many years that there is a distinct difference in the market environment, whether you are in chronic care or you are in acute care.

Some that I liked them and where we give freedom to operate in a different way than they've had when they have been part of the chronic care organization. So so so now we finally have decides to do that.

Lars Rasmussen: We recognize and have done that for many years, that there is a distinct difference in the market environment, whether you are in Chronic Care or you are in Acute Care. Chronic Care is, in nature, of course, significantly more chronic and stable than what we see on the other side. That's no change to what it was beforehand. What we try to do with this move is that we are also giving things that are not Chronic Care inside of COLOPLAST A/S a home where they have some that are like them and where we give freedom to operate in a different way than they've had if or when they have been part of the Chronic Care organization. Now we finally have the size to do that.

And with <unk>. We also have a leader that can take a big part of that organization in and put some innovation into it because this is a market where we are even more dependent on innovation and on the chronic care side because of the type of business that it is.

Speaker #6: And chronic care is, in nature, of course, significantly more chronic and stable than what we see on the other side. So, that's no change to what it was beforehand.

Sure. So the core of your question is.

On the call for your question yes.

Acute care is.

Speaker #6: But what we try to do with this move is that we are also giving things that are not chronic care inside of Coloplast a home where they have some that are like them.

Is different and more volatile and that's expressed also with just the movements that we saw this just this quarter on.

On <unk> and <unk> as we also said for July.

Just saw pick up immediately so so so it's two different parts of our business.

Speaker #6: And where we give freedom to operate in a different way than they've had, if or when they have been part of the chronic care organization.

Speaker #6: So now we finally have the size to do that. And with Fathom, we also have a leader who can take a big part of that organization and put some innovation into it, because this is a market where we are even more dependent on innovation than on the chronic care side, due to the type of business that it is.

Yes.

Lars Rasmussen: With Fatam, we also have a leader that can take a big part of that organization and put some innovation into it because this is a market where we are even more dependent on innovation than on the Chronic Care side because of the type of business that it is. So, to the core of your question, yes, the Acute Care is different and more volatile, and that is expressed also with just the movements that we saw this just this quarter on Kerecis and where we, as we also said for July, just saw a pickup immediately. So, it is two different parts of our business.

Our next question comes from Graham Doyle UBS. Please go ahead.

Hey, good morning, guys. Thanks for taking my questions. Just two please so firstly on <unk> could you just gives us high growth.

Non physician office setting.

And maybe just expand a little bit more as to like.

Speaker #6: So the core of your question is: are two the core of your question? Yes, acute care is different and more volatile, and that's expressed also with just the movements that we saw this quarter on carousels. As we also said for July, we just saw a pickup immediately.

What are the incentives for physicians within the traditional static to go to higher priced products.

And then the second point.

Our strong competitive bidding.

A little bit more color on what is U S.

Theory.

Is it possible to catch it.

Of that 12% of sales what Medicare.

Speaker #6: So it's two different parts of our business.

Medicare advantage just to get a little bit of Teletherapy fantastic. Thank you.

Thanks, a lot Graham let me take the first question in relation to <unk>. So in Q3, we saw some.

Speaker #4: Yes.

Speaker #2: Our next question comes from Graham Doyle, UBS. Please go ahead.

Youssef (Chorus Call Operator): Our next question comes from Graham Doyle, UBS. Please go ahead.

Speaker #7: Good morning, guys. Thanks for taking my questions. Just two, please. So, firstly, on carousels, could you just give us a sense as to how growth was in the non-physician office setting?

Graham Doyle: Good morning, guys. Thanks for taking my questions. Just two, please. Firstly, on Kerecis, could you just give us a sense as to how growth was in the non-physician's office setting? And maybe just explain a little bit more as to what are the incentives for physicians within the physician office setting to go to higher-priced products? The second point, a strong competitive bidding. You can show a little bit more color on what is U.S. chronic in theory, but is it possible to sort of split out of that 12% of sales what's Medicare and maybe even what's Medicare Advantage? Just to get a little bit of color there. It would be fantastic. Thank you.

Pretty specific dynamics, especially towards the end of the.

Of the quarter.

As you know the NCD that was previously announced was again.

Speaker #7: And maybe just explain a little bit more as to what the incentives for physicians within the physician office setting are to go to higher-priced products?

Elite and we saw towards the end of the quarter that there's some high priced products reentered the market and that had some impact on our sales, especially in June.

Speaker #7: And then the second point, a strong competitive bidding. You gave us a little bit more color on what is U.S. chronic in theory, but is it possible to sort of split out of that 12% of sales, what's Medicare and maybe even what's Medicare Advantage? Just to get a little bit of color therapy?

And we see those as a one off and we already saw a bounce back in our growth already in July.

And so we are expecting that our care system sales in Q4 will be better than in Q3 due to the bounce backs.

Speaker #7: Fantastic, thank you.

Speaker #4: Thanks a lot, Graham. Let me take the first question in relation to carousels. So in Q3, we saw some pretty specific dynamics, especially towards the end of the quarter.

Lars Rasmussen: Thanks a lot, Graham. Let me take the first question in relation to Kerecis. In Q3, we saw some pretty specific dynamics, especially towards the end of the quarter. As you know, the LCD that was previously announced was again delayed, and we saw towards the end of the quarter that some high-priced products reentered the market. That had some impact on our sales, especially in June. We see those as a one-off, and we already saw a bounce back in our growth already in July. We are expecting that our Kerecis sales in Q4 will be better than in Q3 due to these bounce backs. In terms of the whole reimbursement, as you have noticed and that we also said earlier, there has been a new skin substitute price communicated over the summer, and that is now being discussed, and we are putting our inputs into this.

In terms of the whole reimbursement.

As you'll have noticed that we also said that earlier.

There has been.

Our new skin substitute price.

Communicated over the summer and that is now being discussed and we are putting our inputs into this.

Speaker #4: As you know, the LCD that was previously announced was again delayed. And we saw towards the end of the quarter that some high-priced products re-entered the market.

And we expect it will be implemented from from January 26 combined.

Speaker #4: And that had some impact on our sales, especially in June. We see those as a one-off, and we already saw a bounce back in our growth in July.

Combined with the new coverage policy, the LCD policy as well so theres a quite a few moving parts.

Impacting the curse is sales.

And on your second question so.

Speaker #4: So we are expecting that our carousel sales in Q4 will be better than in Q3 due to these bounce backs. In terms of the whole reimbursement, as you have noticed and that we also said earlier, there has been a new skin substitute price communicated over the summer.

Actually it is a little bit.

Your line is a little bit blurred so.

So what I think that I picked up was that you wanted to comment on the on the proposal for competitive bidding for projects for the chronic part of the business.

<unk>.

And as we also said at the presentation, it's hard for us to give an estimation of the impact of it right now but but.

Speaker #4: And that is now being discussed, and we are putting our inputs into this. We expect it will be implemented from January 26, combined with the new coverage policy, the LCD policy as well.

But for the least rethink that.

Lars Rasmussen: We expect it will be implemented from January 2026, combined with the new coverage policy, the LCD policy as well. There are quite a few of the moving parts impacting the Kerecis sales. On your second question, your line is a little bit blurred. What I think that I picked up was that you wanted to comment on the proposal for competitive bidding for the Chronic Care part of the business. As we also said at the presentation, it's hard for us to give an estimation of the impact of it right now, but at least we think that when we look at the ability to do competitive bidding on a product area, for example, like Ostomy Care, you would tend to think that if you do competitive bidding, it's because the product range would be something which is close to generic.

At least we think that that when we look at the ability to do competitive bidding on some on a product area for example, like Ostomy care.

When you would.

Speaker #4: So, that is quite a few of the moving parts impacting the carousel's sales.

To think that if you do competitive bidding it's because the product.

Range would be something which is close to generic.

Speaker #6: And on your second question, so I'm actually - there's a little bit your line is a little bit blurred. So what I think that I picked up was that you wanted to comment on the proposal for competitive bidding for the chronic part of the business.

And.

And what we've learned over the years is that.

That is the absolute contrary when we talk about.

The Ostomy care products, we have more than 2000 different skus on.

On the base level inside of Austin kept because it's so specialized so we think that if you want to have a competitive bidding on this enforced people over on something which is different than what they usually do.

Speaker #6: And as we also said at the presentation, it's hard for us to give an estimation of the impact of it right now, but at least we think that at least we think that when we look at the ability to do competitive bidding on a product area, for example, like ostomy care, when you would tend to think that if you do competitive bidding, it's because the product range would be something which is close to generic.

Youre going to spend multiple factors of what you spent today with all the health care professionals that are trying to help us out afterwards, but of course. This is all subject to the negotiations that we go on if that becomes.

A reality.

But it doesn't seem like a logical step for something to do competitive bidding that's not the same as it doesn't happen, but we are just wondering how would that play out.

Speaker #6: And what we have learned over the years is that that is the absolute contrary when we talk about ostomy care products. We have more than 2,000 different SKUs on the base level inside of ostomy care because it's so specialized.

Lars Rasmussen: What we have learned over the years is that that is the absolute contrary. When we talk about the Ostomy Care products, we have more than 2,000 different SKUs on the base level inside of Ostomy Care because it's so specialized. We think that if you want to make competitive bidding on this and force people over on something which is different than what they use today, you're going to spend multiple factors of what you spend today with other healthcare professionals that are trying to help this out afterwards. Of course, this is also up to the negotiations that will go on if that becomes a reality. It doesn't seem like a logical step for something to do competitive bidding on. That's not the same as it doesn't happen, but we are just wondering, how would that play out?

Thank you apologies my line went dead.

Of the 12.

So you said 12% of sales.

U S chronic care.

It could be.

Roughly broadly captured by this just hold that 12 do you know how much is Medicare.

I appreciate it may not be thank you.

Speaker #6: So, we think that if we want to make competitive bidding on this and force people over on something which is different than what they use today, you're going to spend multiple factors of what you spend today with other healthcare professionals that are trying to help this out afterwards.

So our estimation it is quite difficult to estimate because most of our revenue is part of our manufacturing business, but at a high level estimate is around 50%.

Speaker #6: But, of course, this is also subject to the negotiations that will go on if that becomes a reality. However, it doesn't seem like a logical step for something to do competitive bidding on.

Okay perfect. Thank you very much.

Our next question comes from Jack Reynolds clock RBC capital markets. Please go ahead.

Speaker #6: That's not the same as it doesn't happen, but we are just wondering, you know, how would that play out.

Thanks for taking my questions Hey familiar O'shea.

Speaker #7: Thank you. Apologies, my line might have been a bit unclear. Just of the 12 in the release date, you said 12% of sales is U.S. chronic care, which in theory could be roughly broadly captured by this.

Talk through the rationale behind that and stretching the R&D.

Hassan Al-Wakil: Thank you. Apologies. My line might have been a bit unclear. Just of the 12% in the release date, you said 12% of sales is U.S. Chronic Care, which in theory could be roughly broadly captured by this. Just of that 12%, do you know how much is Medicare? I appreciate it may not be very clear.

Franchise related chronic care, where instead of just that one of the benefits.

Are you expecting to be able to realize.

Speaker #7: Just of that 12, do you know how much is Medicare? I appreciate it may not be very clear.

And then second question on the CRE side.

You mentioned the search is on track.

What does this mean and when do you expect to finish the recruitment process and having a new more permanent CEO.

Speaker #4: So, Graham, our estimation is quite difficult to determine because most of our revenue is part of our manufacturing business. However, a high-level estimate is around 50%.

Lars Rasmussen: So, Graham, our estimation, it is quite difficult to estimate because most of our revenue is part of our manufacturing business, but a high-level estimate is around 50%.

Thank you.

So on the R&D changes.

First.

Innovation matters.

Speaker #7: Super clear. Thank you very much.

Hassan Al-Wakil: Super clear. Thank you very much.

In a market like ours.

And.

Do you just see it whenever you're bringing relevant.

Speaker #2: Our next question comes from Jack Reynolds-Clock, RBC Capital Markets. Please go ahead.

Youssef (Chorus Call Operator): Our next question comes from Jack Reynolds Clark, RBC Capital Markets. Please go ahead.

And to the market you also see it more or less immediately on on the gross numbers. So so thats never going out of fashion.

Speaker #8: Thanks for the question. Two for me also. Can you talk through the rationale behind kind of integrating the R&D franchises within chronic care? Kind of where are the synergies there?

Graham Doyle: Thanks for the questions, two for me also. Can you talk through the rationale behind integrating the R&D franchises within Chronic Care? Where are the synergies there? What are the benefits that you are expecting to be able to realize? The second question on the CEO process. You mentioned that the search is on track. What does this mean? When do you expect to finish the recruitment process and have a new, more permanent CEO in place? Thank you.

We want to.

To have an even stronger pipeline. That's also why we elevated to the.

Speaker #8: What are the benefits that you expect to be able to realize? And then the second question on the CEO process. So you mentioned that the search is on track.

Judy.

Secretary leadership team, but there's another reason for it and that also is that.

As we.

Moving into the next 20 periods.

Speaker #8: So, kind of what does this mean, and when do you expect to have finished the recruitment process and have a kind of a new, more permanent CEO in place?

<unk>.

We are also super focused on our bottom line and start out that the closer collaboration we have between R&D and <unk>.

Speaker #8: Thank you.

Speaker #4: So on the R&D changes, first, innovation matters in a market like ours. You just see it whenever you bring relevant innovation to the market; you also see it more or less immediately in the gross numbers.

Lars Rasmussen: On the R&D teams, first, innovation matters in a market like ours. You just see it whenever you bring a relevant innovation to the market. You also see it more or less immediately on the growth numbers. That's never going out of fashion. We want to have an even stronger pipeline. That's also why we elevate this to the executive leadership team. There's another reason for it, and that also is that as we move into the next strategy period, we are also super focused on our bottom line.

And our manufacturing part we are we need if we need to as close as possible.

Collaboration between those two parties to also make sure that on top of being a super innovative product to the customers that we also develop the.

Speaker #4: So, that's never going out of fashion. We want to have an even stronger pipeline; that's also why we elevate this to the executive leadership team.

The products in a way, where we are able to derive maximum value of them. When it comes to both gross margin, but also what what is the cost of establishing manufacturing for them and so on and Thats. The step change that we want to pursue and that is why it becomes part of the executive leadership team. So that we make sure it doesn't become a silo.

Speaker #4: But there is another reason for it, and that also is that as we move into the next strategy period, we are also super focused on our bottom line.

So.

On the CEO search.

We expect.

We are searching for.

Externally that's why we have a search.

Speaker #4: And there's no doubt that the closer collaboration we have between R&D and our manufacturing part, we or we need as close a possible collaboration between those two parties to also make sure that on top of being a super innovative product to the customers, that we also develop the products in a way where we are able to derive maximum value of them when it comes to both gross margin, but also what is the cost of establishing manufacturing for them and so on.

Lars Rasmussen: There's no doubt that the closer collaboration we have between R&D and our manufacturing part, we need as close as possible collaboration between those two parties to also make sure that on top of being a super innovative product to the customers, that we also develop the products in a way where we are able to derive maximum value of them when it comes to both cross-margin, but also what is the cost of establishing manufacturing for them and so on. That's a step change that we want to pursue, and that is why it becomes part of the executive leadership team so that we make sure it doesn't become a silo of its own. On the CEO search, first, we expect we are searching for a CEO externally. That's why we have a search.

Secondly, we have a search company conducting the search.

Coral crest is the largest.

U S medical device company. So so there's definitely both attention and interest.

For the position.

It is a global search that we are conducting so it takes time to speak to the different.

People, who are on the shortlist.

And that is when we say it's progressing as planned that is if we have the interest that we expect it and and more so we have a.

Speaker #4: And that's a step change that we want to pursue. That is why it becomes part of the executive leadership team, so that we make sure it doesn't become a silo of its own.

Very good candidates.

In process.

But it takes the time it takes to.

Speaker #4: On the CEO search, first, we expect that we are searching for a CEO externally. That's why we have a search. Secondly, we have a search company conducting the search.

To get to a handshake and what the timing is it's super hard to put a fixed.

<unk>.

Because you know how it is.

Lars Rasmussen: Secondly, we have a search company conducting the search. Coloplast A/S is the largest EU medical device company, so that definitely posts attention and interest for the position. It is a global search that we are conducting, so it takes time to speak to the different people who are on the shortlist. That is when we say it's progressing as planned. That is, we have the interest that we expected, and more so, we have very good candidates that are in process. But it takes the time it takes to get to a handshake, and what that time is, it's super hard to put a fixed deadline on because you know how it is. You have somebody who is ready to take a position, or you have somebody who is in a competitive environment where they need to go on a garden leave.

Somebody who is ready to take a position or you have somebody who is in a competitive environment, where they need to go on a garden leave that of course all.

Speaker #4: COLOPLAST is the largest EU medical device company, so there's definitely both attention and interest for the position. It is a global search that we are conducting, so it takes time to speak to the different people who are on the shortlist.

Put differently.

Highlights on this and we.

We're not at a point in time, where I can be more precise than this.

That's great. Thank you.

Yes.

Speaker #4: And that is when we say it's progressing as planned. That is, we have the interest that we expected, and more so, we have very good candidates that are in process.

Our next question comes from Asian, with Morgan Stanley. Please go ahead.

Good morning, Thanks for taking my questions.

I have two as well.

First one is on carousel.

I assume your outpatient segment.

Speaker #4: But it takes time to get to a handshake, and what that time is, it's super hard to put a fixed deadline on.

Klein, so lets say flattish for the quarter. It would imply your in patient segment grew 20% or so which is below your midterm target of 30%.

Speaker #4: Because you know how it is: you have somebody who is ready to take a position, or you have somebody who is in a competitive environment where they need to go on a garden leave. That, of course, would put different timelines on this.

Is this consistent with your expectations or was there a slowdown in demand in the inpatient setting as well.

Second question on the competitive bidding program I appreciate the complexity and estimating that impact for you, but do you at least share your competitors' view that this would largely be negative for a distributor is not manufacturers and that the pricing reductions could be in the range of 30%.

Lars Rasmussen: That, of course, all would put different timelines on this, and we are not at a point in time where I can be more precise than this.

Speaker #4: And we are not at a point in time where I can democratize this more than we already have.

Speaker #7: That's great, thank you.

Hassan Al-Wakil: That's great. Thank you.

Speaker #4: Thanks.

Thank you.

Speaker #2: Our next question comes from Ayesha Noor. Morgan Stanley, please go ahead.

So thanks, a lot for your questions in terms of cases.

Youssef (Chorus Call Operator): Our next question comes from Ayesha Noor, Morgan Stanley. Please go ahead.

Speaker #9: Good morning, and thanks for taking my questions. I have two as well. The first one is on carousels. If I assume your outpatient segment didn't decline, so let's say it was flattish for the quarter, it would imply your inpatient segment grew around 20% or so, which is below your midterm target of 30%.

Ayesha Noor: Good morning. Thanks for taking my questions. I have two as well. The first one is on Kerecis. If I assume your outpatient segment didn't decline, so let's say flattish for the quarter, it would imply your inpatient segment grew 20% or so, which is below your midterm target of 30%. Is this consistent with your expectations, or was there a slowdown in demand in the inpatient setting as well? Second question on the competitive bidding program. I appreciate the complexity in estimating that impact for you, but do you at least share your competitor's view that this would largely be negative for distributors, not manufacturers, and that the pricing reductions could be in the range of 30%? Thank you.

In the outpatient setting as I mentioned earlier.

We had.

And negative growth in the in the in the Q3, but the underlying on the inpatient was positive.

Speaker #9: Is this consistent with your expectations, or was there a slowdown in demand in the inpatient setting as well? Second question on the competitive bidding program.

In terms of the competitive bidding.

And can you just repeat that.

Yes, so it's just a I appreciate the complexity and estimating because you didn't provide guidance as to how this would impact your sales or earnings for 2006 or 2007, when do you expect it to be implemented.

Speaker #9: I appreciate the complexity in estimating that impact for you. But do you at least share your competitors' view that this would largely be negative for a distributor, as opposed to manufacturers, and that the pricing reductions could be in the range of 30%?

But do you at least share your competitors' view that this would be largely negative for distributors and at the pricing reductions could be in the range of 30%.

Speaker #9: Thank you.

Speaker #4: Thank you for your questions. In terms of carousels, in the outpatient setting, as I mentioned earlier, we had negative growth in Q3, but the underlying performance in the inpatient setting was positive.

Lars Rasmussen: Thanks a lot for your questions. In terms of Kerecis (QRSS), in the outpatient setting, as I mentioned earlier, we had negative growth in Q3, but the underlying on the inpatient was positive. In terms of the competitive bidding, can you just repeat that?

So we mentioned.

That impact process around that.

The 12% are impacting around 12% of group revenue I said earlier that the Medicare.

Percentage of our total sales in the U S is around 50% it is super difficult for us to estimate what what is going to be the price.

Speaker #4: In terms of the competitive bidding, can you just repeat that?

Now I'll be moving into the hearing process and that is going on for some time and then we expect a conclusion doing awesome.

Speaker #9: Yeah, so just to appreciate the complexity in estimating, because you didn't provide guidance as to how this would impact your sales or earnings for 2026 or 2027 when you expect it to be implemented.

Ayesha Noor: Yeah. So, I just appreciate the complexity in estimating because you didn't provide a guidance as to how this would impact your sales or earnings for 2026 or 2027 when you expect it to be implemented. Do you at least share your competitor's view that this would be largely negative for distributors and that the pricing reductions could be in the range of 30%?

Expecting if there will be an impact it would be in from 27 and onwards.

Speaker #9: But do you at least share your competitors' view that this would be largely negative for distributors? And that the pricing reductions could be in the range of 30%?

Okay. Thank you.

Okay.

Our next question comes from Burma Jpmorgan. Please go ahead.

Hi, Good morning, two questions from me as well please.

Speaker #4: So, we mentioned that the impact for us is around 12%, affecting approximately 12% of group revenue. I stated earlier that the Medicare percentage of our total sales in the U.S. is around 50%.

Lars Rasmussen: We mentioned that impact for us is around 12% or impacting around 12% of group revenue. I said earlier that the Medicare percentage of our total sales in the U.S. is around 50%. It is super difficult for us to estimate what is going to be the price. Now we are moving into the hearing process, and that is going on for some time. Then we expect a conclusion during autumn. We are expecting if there will be an impact, it will be from 2027 and onwards.

The first one is just on taxes again do you expect the LCB Phil go ahead.

Is it likely that the payment proposal take over its essentially is that in either scenario.

Put the LCD and the meat pricing to go to if there is no scenario how would your assumptions change next year.

Speaker #4: It is super difficult for us to estimate what the price is going to be. Now we're moving into the hearing process, which is going to take some time.

Given competitive products.

The market on the lower price.

Speaker #4: And then we expect a conclusion during autumn. We are expecting, if there will be an impact, it will be from the 27th onwards.

The second question is.

Around your full year top line guide, which has been reiterated.

A headwind and wound care and I. Appreciate you briefly touched upon the potential upside from other parts of the business correctly pushy on some more granularity on where you expect the business will perform better than expected in Q4, I think your assumption at Q2 and the guidance.

Speaker #9: Okay, thank you.

Ayesha Noor: Okay. Thank you.

Speaker #2: Our next question comes from Anshal Verma, JP Morgan. Please go ahead.

Youssef (Chorus Call Operator): Our next question comes from Anshal Verma, JP Morgan. Please go ahead.

Speaker #10: Hi, good morning. Two questions for me as well, please. The first one is just on carousels again. Do you expect the LCD to still go ahead?

Ayesha Noor: Hi. Good morning. Two questions from me as well, please. The first one is just on Kerecis again. Do you expect the LCD to still go ahead, or is it likely that the payment proposals take over?

So I think that if I take the first one and then on the on the cases.

We cannot assure by anything else than the LCD and moves on and that would be from first of January that is what we know at this point in time.

Speaker #10: Or is it likely that the payment proposals take over? So, essentially, is it an either/or scenario? Or do we expect both the LCD and the new pricing to go through?

Anshal Verma: Essentially, is it an either/or scenario, or do we expect both the LCD and the new pricing to go through? If it is an either/or scenario, how would your assumptions change next year for Kerecis, given competitive products may still remain on the market, obviously at a lower price? The second question is around your full-year top-line guide, which has been reiterated despite the headwinds in Wound Care. Anders, I appreciate you briefly touched upon the potential offsets in other parts of the business, but could I please push you on some more granularity on where you expect the business will perform better than expected in Q4 versus your assumptions at Q2 when the guidance was set?

It's a pretty visible.

What is going on in the market. So if we can find tons of data in there and what we could see was that.

Speaker #10: If it is an either/or scenario, how would your assumptions change next year for carousels, given competitive products may still remain on the market? Only if you had a lower price.

Here in.

In June when the LCD was was and also to be postponed we sold a 40 competitors as they came back and.

Speaker #10: And then the second question is around your full-year top-line guidance, which has been reiterated despite the headwinds in wound care. I appreciate you briefly touched upon the potential offsets in other parts of the business, but could I please push you for some more granularity on where you expect the business will perform better than expected in Q4 versus your assumptions at Q2 when the guidance was set?

So that also means that we would expect that.

As we sdsu's enforced from.

From the first of January.

The high number of competitors there than leaving the area again because.

There are three things that are so much higher priced than what.

What is the current statistics and we also noticed some of the competitors. They would have the cost prices that are higher than the current <unk>.

Speaker #4: I’ll take the first one. Then, on the carousels, we cannot assume anything else than the LCD moves on, and that will be from January 1.

Anders Lonning-Skovgaard: will take the first one. On the Kerecis, we cannot assume anything else than the LCD moves on, that would be from January 1st. That is what we know at this point in time. It is a pretty visible, you know, what is going on in the market. You can find tons of data in there. What we could see was that, here in June, when the LCD was announced to be postponed, we saw that 40 competitors came back in. That also means that we would expect that, as the LCD is enforced from January 1st, a high number of competitors are then leaving the area again because, you know, there are dressings that are so much higher priced than what is the current suggestion.

Reimbursement price would be so in that sense, we have we have a pretty good idea that.

There will be.

<unk> per player.

But of course everything.

Everything is the proof is in the putting our we've also been able to pick our fair share of that up.

Of course, if we see.

And in relation to your second question the full year Slash Q4 assumptions and yes, we are expecting a strong Q4 across our chronic business driven especially by emerging markets and the tenders that we have talked about all year that is coming through and we also expect.

Continued.

From innovation, especially here in Europe.

Anders Lonning-Skovgaard: We also know that some of the competitors will have the cost prices that are higher than the current or the new reimbursement price would be. In that sense, we have a pretty good idea that there will be more wounds per player. Of course, everything, the proof is in the pudding. Are we also then able to pick our fair share of that off? That is, of course, to be seen.

And we expect as I said earlier, our strong <unk> growth in Q4 better than Q3 and that is then offset by the China product return as we talked about so we are expecting the full year.

Growth to be around the guidance of 7%.

Okay. Thank you very much.

Yeah.

Youssef (Chorus Call Operator): In relation to your second question, the full-year/Q4 assumptions, yes, we are expecting a strong Q4 across our Chronic Care business, driven especially by emerging markets and the tenders we have talked about all year that are coming through. We also expect the continued impact from innovation, especially here in Europe. We expect, as I said earlier, a strong Kerecis growth in Q4, better than Q3. That is then offset by the China product return, as we talked about. So we are expecting the full-year growth to be around the guidance of 7%.

Our next question comes from my assessment Pataki Kepler Cheuvreux. Please go ahead.

Yes. Good morning, Thank you very much for taking my questions.

I would like to start with with the reorganization of the business.

Specifically getting back to the astonishment off an R&D organization within chronic care.

Based on what you said earlier to the question I'm wondering is it.

Is it that you want product faster than the market or do you want to have product in the market that are.

And that are profitable because.

If we look back to the previous.

Uh huh.

Strategic period, I mean, we had D R.

Anshal Verma: Perfect. Thank you very much, Arthur Pierre.

The clinical performance programs, which were specifically focusing on training, bringing meaningful innovation to the market now Unfortunately that did not yield the growth acceleration that you were hoping for.

Lars Rasmussen: Our next question comes from Maya Stephanie Padacki-Kepler Chevreux. Please go ahead.

Hassan Al-Wakil: Yes. Good morning. Thank you very much for taking my questions. I would like to start with the reorganization of the business, and Lars, specifically getting back to the R&D establishment of an R&D organization within Chronic Care. Based on what you said earlier to the question, I am wondering, is it that you want products faster in the market, or do you want to have products in the market that are profitable? Because if we look back to the previous strategic period, we had the clinical performance programs, which were specifically focusing on bringing meaningful innovation to the market. Unfortunately, that did not yield the growth acceleration that you were hoping for. I am just trying to understand, what is it really? Is it the timing? Is it the cost? Is it products that are likely to get the reimbursement? Any color on that would be very helpful.

Just trying to understand what is it really is it the timing is it cost is it product that are likely to get the reimbursement.

Any color on that would be very helpful.

And then also with regards to the guidance.

You have reiterated guidance on organic growth and on FX and the impact on skincare and maybe thats very curious to ask but you're against chronic ROIC has no tranche, 4% to 3% to 4% is it the uncertainty on the organic side of the business.

Or is it a question more of the FX impact. Thank you.

So.

<unk>.

The reason for the expectations to targets that we that we're putting on R&D is actually if you ask for more so yes, we want to get.

New products faster to the market.

Okay.

And as you noted has been a whole reset of the quality management system over the last many years. So so so demands have gone up so so so we.

Hassan Al-Wakil: Then, Anders, also with regards to the guidance, you have reiterated the guidance on organic growth and on FX and the impact on skincare. Maybe that is very tedious to ask, but your Danish kroner growth has moved from 4% to 3% to 4%. Is it the uncertainty on the organic side of the business, or is it a question more of FX impact? Thank you.

We will take a second look at the way that we are organizing our product development. So that we can get products to the market.

That's the one thing the second thing is that we.

We also think that there is an opportunity to get more value out of the products that we are having in the market and that both coasts. Both for gross margin, but also for the Capex that you need to put into establishing manufacturing for new products to the market. So those articles that's that's the whole reason for.

Anders Lonning-Skovgaard: So, Maya, the reason for or the expectations, the targets that we are putting on R&D is actually we ask for more. Yes, we want to get new products faster to the markets. As you know, there's been a whole reset of the quality management system over the last many years. Demand has gone up. We would take a second look at the way that we are organizing our product development so that we can get products to the market faster. That's the one thing. The second thing is that we also think that there is an opportunity to get more value out of the products that we are having in the market. That goes both for gross margin, but also for the CapEx that you need to put into establishing manufacturing for new products to the market. So those are the goals. That's the whole reason for this change.

For this change it is a step up of.

You could say the technological ambition in the company.

This strategic period as we are also stepping up our ambition on on what should the cosmos experienced when the when the.

Having business for the quarter, plus but but it's it's very evident of cost states.

That innovation is a major growth driver.

In all medical device companies. So it is.

Is the next level that we have that we're after here.

And then in relation to your second question.

FX.

So it's specifically the U S dollar has impacted us too to guide now 3% to 4% reported growth.

Thank you.

Anders Lonning-Skovgaard: It is a step up of, you could say, the technological ambition in the company, in this strategic period, as we are also stepping up our ambition on what should the customers experience when they are having business with COLOPLAST. It's very evident, of course, that innovation is a major growth driver in all medical device companies. So it's the next level that we are after here.

Our next question comes from multi threat not there. Please go ahead.

Hello, everyone and thank you for taking my questions I have two questions. Please the first one is on the reorganization of the.

Of the chronic care on the dedicated R&D to chronic care, which I guess makes sense given the limited successful launches in recent years could you maybe.

Help us understand that first of all will you provide an update at our pipeline.

The CMT.

Youssef (Chorus Call Operator): Maya, in relation to your second question, it is FX, so it is specifically the U.S. dollar that has impacted us to guide now 3% to 4% reported growth.

To help us with the building blocks on where you see improvements on the R&D side and chronic care and can you. Maybe also now you may.

Making the announcement often you are.

Head of R&D and chronic care, what will be the first area to look at.

Anshal Verma: Thank you.

Hs medical Ostomy and Continence care, where do you see the most potential and that's the first question and then I'll I'll take.

Lars Rasmussen: Our next question comes from Martin Brenno, Nordea. Please go ahead.

The one after that second one after that.

Graham Doyle: Hi, Lars and Anders. Thank you for taking my questions. I have two questions, please. The first one is on the reorganization of the Chronic Care and the dedicated R&D to Chronic Care, which I guess makes sense given the limited successful launches in recent years. Could you maybe help us understand, first of all, will you provide an updated pipeline on the CMD to help us with the building blocks on where you see improvements on the R&D side in Chronic Care? Can you maybe also, now you are making the announcement of a new Head of R&D in Chronic Care, what will be the first area to look at, whether it's Atos Medical, Ostomy Care, or Continence Care? Where do you see the most potential? That is the first question, and then I will take the second one after that.

So we're not going to present, you with a pipeline on the on the on the.

Capital market day.

So so and maybe maybe just to take a step back margin right now.

We are in the process of launching Luca that is what is.

Driving the very nice growth that we have on on constant care. We also have the black back and since <unk> with the <unk> cutting in the market now.

Which means that.

We have so much to work with right now.

In the first period of this strategic period.

And so so there.

Very optimistic about gross four four for the two big businesses in coral crest.

What we talk about with the R&D re org.

Anders Lonning-Skovgaard: We are not going to present you with a pipeline on the cancer market. Maybe just to take a step back, Martin, right now we are in the process of launching Luja™. That is what is driving the very nice growth that we had on Continence Care. We also have the Biatain® Adhesive foam dressings and SensureMU with the two-piece coupling in the market now, which means that we have so much to work with right now in the first period of this strategic period. I am very optimistic about the growth for the two big businesses in Coloplast A/S. What we talk about with the R&D reorg is that we think that there are more opportunities when we look into the speed to markets, which is super important year over year going forward.

Is that.

We.

We think the Tam opportunities when we look into the speed to market, which is super important.

Going forward.

And we.

Also set from my end I think onetime earlier that we think that we can we can definitely drive more value out of what behalf.

If you look at the at our.

EBIT margin over the last this strategic period and also our gross margin development. We think that there is something that we can work on there.

And does that.

Simply Ikea extra and that is what we are releasing here.

So that's the whole work, but it's not like we have something which is broken.

It is something that works really well and we want to take it one much of.

That's very clear and just the second question, which would also be on compressors.

It's mainly on also on the on the real.

Because I think that the philosophy earlier was to keep the rest is separate from that.

Anders Lonning-Skovgaard: As I also said to Maya and I think one time earlier, we think that we can definitely drive more value out of what we have. If you look at our EBITDA margin over the last strategic period and also our gross margin development, we think that there is something that we can work on there. There is simply a year extra, and that is what we are releasing here. That is the whole work. It is not like we have something which is broken. It is something that works really well, and we want to take it one notch up.

What you could maybe call it the legacy business.

And that would be no synergies between the two at least in the short term. So what has driven the change behind this and what does it mean in terms of consolidating or the organization do you see a redundancy in the organization.

Kind of see fewer employees to drive each sale from here on and can you. Maybe just you know that's been somebody.

News out on <unk> also the price cap.

Probably not a part of that.

The business case in the beginning there we still think that's the case of Korea is intact.

Youssef (Chorus Call Operator): That is very clear. Again, then just the second question, which would also be on Kerecis. It is mainly on also on the reorg, because I think that the philosophy earlier was to keep Kerecis separate from what you could maybe call the legacy business, and there would be no synergies between the two, at least in the short term. So what has driven the change behind this, and what does it mean in terms of consolidating the organization? Do you see a redundancy in the organization? Are we going to see fewer employees to drive each sale from here on? Can you maybe just, you know, there has been so many news out on Kerecis. Also, the price cap was probably not a part of the business case in the beginning. Do you still think that the case of Kerecis is intact?

Still the same in your view or has that actually been any changes to the structural case effect dresses. So.

I think that we can all agree that this is a very dynamic market.

Okay.

And just just within the last quarter. There has been several news on on how this is going to be reimbursed.

I will say that.

If they play out like they being.

Charge offs now this is positive.

Because this gives more people access to much better treatment at them in a much more affordable way and actually.

It also turns out that.

For US there is an upside on the prices for this so.

So there will be fewer competitors than there would be for us.

Youssef (Chorus Call Operator): Is it still the same in your view, or has there actually been any changes to the structural case of Kerecis?

Better prices.

So that is positive.

It is.

<unk>.

<unk>.

Anders Lonning-Skovgaard: I think that we can all agree that this is a very dynamic market. Just within the last quarter, there has been several news on how this is going to be reimbursed. I must say that if they play out like they are being told to us now, this is positive because this gives more people access to much better treatment in a much more affordable way. Actually, it also turns out that for us, there is an upside on the prices for this. There will be fewer competitors, and there will be for us, better prices. That is positive. It is why do we do this reorg? We just have to admit that Fatam Sigurd Jonsson and the team that he has created is almost like a force of nature when it comes to innovativeness. They are so super innovative.

What do we do this re org so.

So.

We just have to admit that that first home and the team that he has created it's kind of almost like a force of nature. When it comes to innovate in this.

So super innovative.

<unk>.

And we Havent, we simply don't have that level of innovation is in our current book of business.

So the sort of.

The expected sort of rub off effect of that is.

Is something that we would like to have.

It's also very important to say that.

Fair, Tom who is now the new EVP for this.

He he is a very energetic person. So he also since day, one have asked us Ken.

Can I do more and of course, we think that this. This this is just a happy marriage of fast times ambition and also a need for current wound care business.

We are super aware of course that there is a big difference between.

Normal wound care dressings and <unk>.

Anders Lonning-Skovgaard: We simply do not have that level of innovativeness in our current Advanced Wound Care business. The expected rub-off effect of that is something that we would like to have. It is also very important to say that Fatam Sigurd Jonsson, who is now the new EVP for this, he is a very energetic person. He also since day one had asked us, "Can I do more?" Of course, we think that this is just a happy marriage of Fatam Sigurd Jonsson's ambition and also a need for our current Advanced Wound Care business. We are super aware, of course, that there is a big difference between normal wound care dressings and biologic dressings. That will also be reflected in the organization under Fatam Sigurd Jonsson. Of course, it is a major step up also for Fatam Sigurd Jonsson in a big organization.

And biologic dressings, and Ed will also be reflected in the organization onto fertile.

But of course it is a major step up also for us.

<unk> organization.

So so he gets significantly more resources to work with than he has ever tried before in his current position.

But we think that this is this is a very.

Okay.

Very very positive story and most times when companies are being smaller companies are being acquired by bigger companies you will see that the founder of the small company will leave.

The new company in frustration, because it's hard to work together and they can't get it that way and so this is a super nice collaboration.

And we are growing from this so I see it is all upside.

And then the Martinez.

Our focus on delivering on the business case of a growth of 30% CAGR over three years and improve the EBIT margin for cases before amortization of the 20% that is still intact, we are still focusing on delivering those numbers.

Anders Lonning-Skovgaard: He gets significantly more resources to work with than he has ever tried before in his current position. We think that this is a very, very, very positive story. Most times when smaller companies are being acquired by bigger companies, you will see that the founder of the small company will leave the new company in frustration because it is hard to work together, and they cannot get it their way and so on. This is a super nice collaboration, and we are going from this. I see it as all upside.

Makes sense. Thank you so much for answering my questions.

The next question comes from Veronica Dubai Yorba. Please go ahead.

Hi, Laurence.

And thank you for taking my question I'll also keep it to.

I apologize to circle back to the same thing.

Randy reorganization that we have in addition, just curious whether.

We should expect this to drive higher <unk> and R&D.

R&D spending going forward and just maybe a conceptual question I mean, I think the old coal plants.

Youssef (Chorus Call Operator): Martin, our focus on delivering on the business case of a growth of 30% CAGR over three years and improve the EBITDA margin for Kerecis before amortization of the 20%, that is still intact. We are still focusing on delivering those numbers.

And a 12 four sometimes even let's say around 4% of sales.

Down a lot.

Just curious if you think this level of spend is appropriate if you look at the next strategic PRA I. Appreciate the business has changed in terms of competition. If you can maybe talk through that that would be helpful.

Anders Lonning-Skovgaard: Makes sense. Thank you so much for answering my questions.

And then my second question is just a follow up on the impact in China.

Lars Rasmussen: The next question comes from Veronica Dubayova City. Please go ahead.

Wanted to understand whether this.

$60 million quarterly revenue run rate is it more or less and I guess you sort of said you can expect us to be a headwind also for fiscal 2016 should be take the 60 million that you're guiding for in the fourth quarter and multiply that by Q3 for next year kind of what what's the sort of thing that you should be putting into our model for that thank you bye.

Ayesha Noor: Hi, Lars. Hi, Anders, and thank you for taking my questions. I will also keep it to two. Apologies to circle back to the same things. On the R&D reorganization spend, just curious whether we should expect this to drive a higher growth in R&D spending going forward. Maybe a conceptual question. I think the old Coloplast A/S often used to spend between 4%, sometimes even, let's say, around 4% of sales. This has come down a lot to around 3% now. Just curious if you think this level of spend is appropriate as you look at the next strategic period. I appreciate the business has changed in terms of composition, but if you can maybe talk through that, that would be helpful. My second question is just to follow up on the impact in China.

Thank you Veronika and you were the Lucky one because you got the last questions in here for this for this session but.

So on R&D.

I would now.

Iterate, what I think has been said many times and I know that I've said it myself. Many times, we don't have a fixed number on what we want to spend on R&D. We don't put a part of called on the table and then invite people to see how they can spend it.

We go the other way around.

Ayesha Noor: I just want to understand whether the $60 million is the quarterly revenue run rate. Is it more or less? I guess, Lars, you sort of said that you expect this to be a headwind also for fiscal 2026. So should we take the $60 million that you're guiding for in the fourth quarter and multiply that by 2, by 3 for next year? What's the sort of thing that we should be plugging into our models for that? Thank you, guys.

So we challenged the organization to bring us more growth more profitable growth.

And if we can find very good business cases, and this this is what we.

This is what we are funding because as I said a couple of times also during this presentation.

Innovation drives topline growth.

Anders Lonning-Skovgaard: Thank you, Veronica. You were the lucky one because you got the last question, Cynthia, for this session. On R&D, I would now reiterate what I think has been said many times, and I know that I've said it myself many times. We do not have a fixed number on what we want to spend on R&D. We do not put a pot of gold on the table and then invite people to see how they can spend it. We work, we go the other way around. We challenge the organization to bring us more growth, more profitable growth. If we can find very good business cases in this, this is what we are funding. As I said a couple of times also during this presentation, innovation drives top-line growth and value creation in this business environment that we are part of.

<unk> creation in this business environment that we are part of.

And therefore, we would welcome if we had to spend more because that was also a bit because we were convinced that we have.

The more you could say profitable growth underway than we have today and so I can't give you a number but but we only invest in things where we think this is going to.

Knocked the ball out of the field so to speak.

Yes.

And Ronny cap.

In terms of the product return in wound care, China, you should expect that our Q4.

Estimate of around $60 million that is the peak because that includes also inventory reduction product return et cetera.

We will see an impact into into next year as well and that is something we are currently evaluating also it's also depending on how fast we are converting to other products in our portfolio.

Anders Lonning-Skovgaard: Therefore, we would welcome if we had to spend more because that would also be because we were convinced that we have more, you could say, profitable growth on the way than we have today. I cannot give you a number, but we only invest in things where we think this is going to knock the bone out of the field, so to speak.

But we will have an impact.

Q1, Q2 Q3.

Before we are <unk> based on Q4 of next year, but the overall.

Impact that's something we are currently assessing.

Okay. That's really helpful. Thank you Bob.

Youssef (Chorus Call Operator): Yes. To your second point, Veronica, in terms of the product return in wound care China, you should expect that our Q4 estimate of around 60 million, that is the peak, because that includes inventory reduction, product return, etc. We will see an impact into next year as well. That is something we are currently evaluating. It is also depending on how fast we are converting to other products in our portfolio. We will have an impact Q1, Q2, Q3, before we are up against an easier baseline Q4 next year. The overall impact, that is something we are currently assessing.

Alright.

We'd like to thank all of you to list for listening in and for all of your questions and we're looking forward to seeing you in the next.

Thank you very much.

Ayesha Noor: Okay. That's really helpful. Thank you both.

Youssef (Chorus Call Operator): With that, we would like to thank all of you for listening in and for all of your questions. We are looking forward to seeing you in the next period. Thank you very much.

Lars Rasmussen: Ladies and gentlemen, the conference is now over. Thank you for choosing Coloplast A/S, and thank you for participating in the conference. You may now disconnect your lines.

Hassan Al-Wakil: Thank you.