Q3 2026 Carl Zeiss Meditec AG Earnings Call

August 6, 2026

Speaker #2: Give me person to person. Gonna get me.

Operator 1: Sie hören Musik, bis der Konferenzleiter die Konferenz eröffnet.

Speaker #1: Die höheren Musik will der Konferenzleiter die Konferenz eröffnet.

Operator 2: Give me person to person. Don't you keep me waiting on the line. Operator.

Speaker #2: Give me person to person. Don't you keep me waiting all my life. Yeah, yeah.

Operator 1: Ladies and gentlemen, hello. Welcome to the Carl Zeiss Meditec AG Analyst Conference Nine Months 2026 Results. The conference will be recorded. At this time, all participants have been placed on a listen-only mode. The floor will be open for questions following the presentation. Let me now turn the floor over to your host, Sebastian Frericks, Head of Investor Relations.

Operator: Ladies and gentlemen, hello. Welcome to the Carl Zeiss Meditec AG Analyst Conference Nine Months 2026 Results. The conference will be recorded. At this time, all participants have been placed on a listen-only mode. The floor will be open for questions following the presentation. Let me now turn the floor over to your host, Sebastian Frericks, Head of Investor Relations.

Speaker #3: Ladies and gentlemen, hello and welcome to the Carroll ZEISS MEDIATEC AG Analyst Conference, nine months, 2026 results. The conference will be recorded. At this time, all participants have been placed on a listen-only mode.

Speaker #3: The floor will be open for questions following the presentation. Let me now turn the floor over to your host, Sebastian Freritz, Head of the Investor Relations.

Speaker #4: Hello, everybody. Good afternoon. Welcome to our nine months analyst conference. Our CEO, Andreas Pescher, and our CFO, Justus, will present the nine months figures to you, guide you to cover the key business topics and provide the outlook for you.

Sebastian Frericks: Hello, everybody. Good afternoon. Welcome to our nine-month analyst conference. Our CEO, Andreas Pecher, and our CFO, Justus Wehmer, will present the nine-month figures to you, guide you, cover the key business topics, and provide the outlook for you. Thank you for your flexibility for having this call a bit unusually so in the afternoon. After the presentation, we will address your questions. With that, without further ado, Andreas, please go ahead.

Speaker #4: Thank you for your flexibility for having this call a bit unusually, so in the afternoon. After the presentation, we will address your questions, and with that, without further ado, Andreas, please go ahead.

Andreas Pecher: Superb. Thank you, Sebastian. Good afternoon to the analysts, investors. Welcome to the nine months 2025/2026 analyst conference at Carl Zeiss Meditec. I'm currently traveling at the US West Coast. More to that later. We have to schedule this call in the European afternoon. Really apologies for the scheduling constraints and big thanks for your flexibility. I wanted to make sure I can also speak to you, and also apologies if my voice is having a little trouble here. I caught a small sore throat, so I hope I'm still going to be understood well. I'll begin with an overview of our nine-month results, then Justus will take you through the financial performance in more detail. After that, we'll cover several key topics, including the appointment of the new head of ophthalmology. I'm traveling with him here.

Speaker #5: Superb. Thank you, Sebastian. Good afternoon. The analysts, investors, welcome to the nine months, 25, 26 analyst conference at Carroll ZEISS MEDITEC. I'm currently traveling at the US West Coast.

Speaker #5: More on that later. So, we have to schedule this call in the European afternoon. I really apologize for the scheduling constraints, and a big thanks for your flexibility.

Speaker #5: I wanted to make sure I can also speak to you and also apologize if my voice is having a little trouble here. I caught a small sore throat, so I hope I'm still going to be understood well.

Andreas Pecher: I caught a small sore throat, so I hope I'm still going to be understood well. I'll begin with an overview of our nine-month results, then Justus will take you through the financial performance in more detail. After that, we'll cover several key topics, including the appointment of the new head of ophthalmology. I'm traveling with him here.

Speaker #5: I'll begin with an overview of our nine months results, and then Justus will take you through the financial performance in more detail. And after that, we'll cover several key topics, including the appointment of the new Head of Ophthalmology, traveling with him here.

Speaker #5: The launch of the ZEISS Ultrasonic Aspirator, our strategic partnership with the AYA Group, two advanced refractive workflow in China, and the status of the first profit op initiatives.

Andreas Pecher: The launch of the ZEISS Ultrasonic Aspirator, our strategic partnership with the Aier Group to advance the refractive workflow in China and the status of the first Profit Up initiatives. We'll conclude with an update on our financial 2025/2026 outlook. Of course, following the presentation, we'll be happy to take your questions. With that, let me start with an overview of our nine-month performance. Looking at revenue and EBITDA, it remains below the prior year, while the recovery of Q3 partially offset the headwind from the H1. Order entry in nine months amounted to EUR 1.606 billion, down 5.5% year over year and down 3.3% on an FX-adjusted basis. We did achieve solid order growth in EMEA while demand in the Americas and APAC remained weak.

Speaker #5: And then we'll conclude with an update on our financial 2025, 26 outlook. And then, of course, following the presentation, we'll be happy to take your questions.

Speaker #5: And with that, let me start with an overview of our nine months performance. So looking at revenue and EBITDA, it remained below the prior year, while the recovery of Q3 partially offset the headwinds from the first half.

Andreas Pecher: With that, let me start with an overview of our nine-month performance. Looking at revenue and EBITDA, it remains below the prior year, while the recovery of Q3 partially offset the headwind from the H1. Order entry in nine months amounted to EUR 1.606 billion, down 5.5% year over year and down 3.3% on an FX-adjusted basis. We did achieve solid order growth in EMEA while demand in the Americas and APAC remained weak.

Speaker #5: Order entry in nine months amounted to 1.606 billion down 5.5% year over year, and down 3.3% on an FX adjusted basis. We did achieve solid order growth in EMA EA, while demand in the markets and the APAC remained weak.

Speaker #5: Order backlog stood at 432 million, largely unchanged compared to the end of Q2, but higher than at the beginning of the fiscal year. Revenue for the nine months amounted to 1.554 billion euros, representing a 2.2% decline year over year.

Andreas Pecher: Order backlogs stood at EUR 432 million, largely unchanged compared to the end of Q2, but higher than at the beginning of the fiscal year. Revenue for the nine months amounted to EUR 1.554 billion, representing a 2.2% decline year over year. On a constant currency basis, revenue declined 0.7%, mainly in this case due to the US dollar. Factoring in all currency headwinds, mainly the Chinese yuan, arising from German exports invoiced in foreign currencies to the ZEISS group distribution network, FX-adjusted revenue was broadly stable. The weaker ophthalmology business was the key factor holding back revenue development. A key reason for the decline, aside from FX, was the already known headwind in the IOL business due to the recall of the bifocal IOL in China since the start of the fiscal year.

Speaker #5: On a constant currency basis, revenue declined 0.7%, mainly in this case due to the US dollar. The factoring in all currency headwinds, mainly the Chinese one, arising from German exports, invoiced in foreign currencies to the ZEISS Group distribution network, affects adjusted revenue was broadly stable.

Andreas Pecher: Factoring in all currency headwinds, mainly the Chinese yuan, arising from German exports invoiced in foreign currencies to the ZEISS group distribution network, FX-adjusted revenue was broadly stable. The weaker ophthalmology business was the key factor holding back revenue development. A key reason for the decline, aside from FX, was the already known headwind in the IOL business due to the recall of the bifocal IOL in China since the start of the fiscal year.

Speaker #5: The weaker Ophthalmology business was the key factor holding back revenue development. A key reason for the decline, aside from FX, was the already known headwind in the IOL business due to the recall of the bifocal IOL in China since the start of the fiscal year.

Speaker #5: Also, refractive consumables came in weaker particularly in Asian markets outside of China. And looking at the revenue mix, equipment accounted for 49%, consumables for 41%, and service for 10% of total 9 million revenue.

Andreas Pecher: Refractive consumables came in weaker, particularly in Asian markets outside of China. Looking at the revenue mix, equipment accounted for 49%, consumables for 41%, and service for 10% of total nine-month revenue. Adjusted EBITDA came in at EUR 124.5 million, with an adjusted EBITDA margin of 8.0%, compared with 11.1% in the prior year. Reported EBITDA amounted to EUR 108.4 million, with a margin of 7.0%. Looking at operating results, they were pressured by continued FX headwinds in Q3, an unfavorable product mix, particularly weaker consumables, and several one-off items. We will take a closer look at these one-off items later in the presentation. Stripping out one-offs, our core operating expenses remained stable. With that, I'd like to hand over to you, Justus.

Speaker #5: Adjusted EBITDA came in at 124.5 million, with an adjusted EBITDA margin of 8.0% compared with 11.1% in the prior year. Reported EBITDA amounted to 108.4 million, with a margin of 7.0%.

Andreas Pecher: Reported EBITDA amounted to EUR 108.4 million, with a margin of 7.0%. Looking at operating results, they were pressured by continued FX headwinds in Q3, an unfavorable product mix, particularly weaker consumables, and several one-off items. We will take a closer look at these one-off items later in the presentation. Stripping out one-offs, our core operating expenses remained stable. With that, I'd like to hand over to you, Justus.

Speaker #5: Looking at operating results, they were pressured by continued FX headwinds in Q3, an unfavorable product mix—particularly weaker consumables—and several one-off items. We will take a closer look at these one-off items later in the presentation.

Speaker #5: And stripping out one-offs, our core operating expenses remained stable. And with that, I'd like to hand over to you, Justus. Yeah, thank you, Andreas.

Justus Felix Wehmer: Yeah. Thank you, Andreas, and a warm welcome from my side to all of you as well. I'll walk you through the SBU performance, starting with Ophthalmology. In the first nine months, reported revenue came in at EUR 1,191,000 million, down 4.8% year-over-year, and on a currency-adjusted basis, revenue declined by 2.9%. Equipment sales declined by 3%, while consumables sales declined by 5.7%. Revenue was mainly pressured by foreign exchange headwinds, the suspension of bifocal IOL sales, and its associated inventory scrapping in China and softer refractive treatment pack sales in Asia. The successor bifocal IOL, which received license in Q2, cannot yet be commercialized until it is relisted under the next value-based tender. Following the postponement of the VBP process, it is now expected to take place in September or October, with implementation around December of this calendar year.

Justus Wehmer: Yeah. Thank you, Andreas, and a warm welcome from my side to all of you as well. I'll walk you through the SBU performance, starting with Ophthalmology. In the first nine months, reported revenue came in at EUR 1,191,000 million, down 4.8% year-over-year, and on a currency-adjusted basis, revenue declined by 2.9%. Equipment sales declined by 3%, while consumables sales declined by 5.7%.

Speaker #5: And warm welcome from my side. To all of you as well. I walked you through the SBU performance starting with Ophthalmology. In the first nine months, reported revenue came in at 1 billion 191 million euro, down 4.8% year over year.

Speaker #5: And on a currency adjusted basis, revenue declined by 2.9%. Equipment sales declined by 3%, while consumables sales declined by 5.7%. Revenue was mainly pressured by foreign exchange headwinds, the suspension of bifocal IOL sales, and its associated inventory scrapping in China, and softer refractive treatment pack sales in Asia.

Justus Wehmer: Revenue was mainly pressured by foreign exchange headwinds, the suspension of bifocal IOL sales, and its associated inventory scrapping in China and softer refractive treatment pack sales in Asia. The successor bifocal IOL, which received license in Q2, cannot yet be commercialized until it is relisted under the next value-based tender. Following the postponement of the VBP process, it is now expected to take place in September or October, with implementation around December of this calendar year.

Speaker #5: The successor bifocal IOL, which received license in Q2, cannot yet be commercialized until it is relisted under the next volume-based tender. Following the postponement of the VVP process, it is now expected to take place in September or October, with implementation around December of this calendar year.

Speaker #5: The delay in the VVP process is unfortunately yet another headwind to our revenue, as the negative impact of the delayed relaunch outweighs the benefit of continued better pricing for some of the.

Justus Felix Wehmer: The delay in the VBP process is unfortunately yet another headwind to our revenue, as the negative impact of the delayed relaunch outweighs the benefit of continued better pricing for some of the IOL models. Refractive procedure volumes softened in South Korea and Southeast Asia, while China continued to show slight year-to-date growth. The start into the main summer peak season in June, however, was weaker on a year-over-year basis. We are seeing a pattern of somewhat later peak in consumption. We'll continue to watch the trends closely as we get the July and August data. Equipment sales remained sluggish, in particular, the cataract and diagnostic equipment. Gross margin declined by 1.5 percentage points, reflecting foreign exchange headwinds, the scrapping of bifocal IOLs, weaker consumable sales, and inventory devaluation at Katalyst following the measures to wind down the Katalyst portfolio, which I will discuss in more detail in this presentation.

Justus Wehmer: The delay in the VBP process is unfortunately yet another headwind to our revenue, as the negative impact of the delayed relaunch outweighs the benefit of continued better pricing for some of the IOL models. Refractive procedure volumes softened in South Korea and Southeast Asia, while China continued to show slight year-to-date growth. The start into the main summer peak season in June, however, was weaker on a year-over-year basis. We are seeing a pattern of somewhat later peak in consumption.

Speaker #5: Models. Refractive procedure volumes softened in South Korea and Southeast Asia, while China continued to show slight year-to-date growth. The start into the main summer peak season in June, however, was weaker on a year-over-year basis, we are seeing a pattern of somewhat later peak in consumption, and will continue to watch the trends closely as we get the July and August data.

Justus Wehmer: We'll continue to watch the trends closely as we get the July and August data. Equipment sales remained sluggish, in particular, the cataract and diagnostic equipment. Gross margin declined by 1.5 percentage points, reflecting foreign exchange headwinds, the scrapping of bifocal IOLs, weaker consumable sales, and inventory devaluation at Katalyst following the measures to wind down the Katalyst portfolio, which I will discuss in more detail in this presentation.

Speaker #5: Equipment sales remained sluggish, in particular the cataract and diagnostic equipment. Gross margin declined by 1.5 percentage points, reflecting foreign exchange headwinds, the scrapping of bifocal IOLs, weaker consumable sales, and inventory devaluation at catalyst following the measures to wind down the catalyst portfolio which I will discuss in more detail in this presentation.

Speaker #5: These effects were partly offset by tariff refunds on which I will also provide you with some numbers later on in the presentation. OPEX ratio increased by 3.9 percentage points, mainly driven by the extraordinary IVO write-off, legal expenses, and profit up related effects, stripping out these one-off items core OPEX remained roughly stable.

Justus Felix Wehmer: These effects were partly offset by tariff refunds, on which I will also provide you with some numbers later on in the presentation. OpEx ratio increased by 3.9 percentage points, mainly driven by the extraordinary IVO write-off, legal expenses, and Profit Up related effects. Stripping out these one-off items, core OpEx remained roughly stable. As a result, EBITDA margin for Ophthalmology declined to 5.2%, significantly below prior year level. Looking at the revenue split, Ophthalmology accounts for 76% of total revenue. Within Ophthalmology, consumables represent 50%, equipment accounts for 41%, and service contributes 9%. Turning to Microsurgery, revenue and EBITDA margin were above prior year, supported by strong Q3 revenue growth and robust delivery of neurosurgical systems. Revenue in the first nine months reached EUR 362 million, up 3.8% year-over-year. On an exchange rate-adjusted basis, revenue grew by 7.1%. Both equipment and consumable sales increased.

Justus Wehmer: These effects were partly offset by tariff refunds, on which I will also provide you with some numbers later on in the presentation. OpEx ratio increased by 3.9 percentage points, mainly driven by the extraordinary IVO write-off, legal expenses, and Profit Up related effects. Stripping out these one-off items, core OpEx remained roughly stable. As a result, EBITDA margin for Ophthalmology declined to 5.2%, significantly below prior year level.

Speaker #5: As a result, EBITDA margin for Ophthalmology declined to 5.2%, significantly below prior year level. Looking at the revenue split, Ophthalmology accounts for 76% of total revenue, within Ophthalmology consumables represent 50%, equipment accounts for 41%, and service contributes 9%.

Justus Wehmer: Looking at the revenue split, Ophthalmology accounts for 76% of total revenue. Within Ophthalmology, consumables represent 50%, equipment accounts for 41%, and service contributes 9%. Turning to Microsurgery, revenue and EBITDA margin were above prior year, supported by strong Q3 revenue growth and robust delivery of neurosurgical systems. Revenue in the first nine months reached EUR 362 million, up 3.8% year-over-year. On an exchange rate-adjusted basis, revenue grew by 7.1%. Both equipment and consumable sales increased.

Speaker #5: Turning to microsurgery, revenue and EBITDA margin were above the prior year, supported by strong Q3 revenue growth and robust delivery of neurosurgical systems. Revenue in the first nine months reached €362 million, up 3.8% year over year. On an exchange rate-adjusted basis, revenue grew by 7.1%.

Speaker #5: Both equipment and consumable sales increased, gross margin remained 2.4 percentage points below prior year, still pressured by currency effects and higher amortization of capitalized R&D.

Justus Felix Wehmer: Gross margin remained 2.4 percentage points below prior year, still pressured by currency effects and higher amortization of capitalized R&D. EBITDA margin improved to 12.7%, up 0.4 percentage points year-over-year. Looking at revenue split, Microsurgery accounts for 23% of total revenue within Microsurgery, equipment represent 78%, service 14%, and consumables 8%. Let me walk you through our regional development. EMEA continued to deliver solid growth, while APAC remained below the prior year level. Let's start with the Americas. The region accounted for 25% of group revenue. Revenue in the Americas came in at EUR 397 million, down 2.6% year over year, while exchange rate adjusted revenue increased by 3.6%. The US grew slightly on a constant currency basis, while Latin America declined. Moving to EMEA, the region represented 33% of group revenue and delivered solid growth across all core European markets.

Justus Wehmer: Gross margin remained 2.4 percentage points below prior year, still pressured by currency effects and higher amortization of capitalized R&D. EBITDA margin improved to 12.7%, up 0.4 percentage points year-over-year. Looking at revenue split, Microsurgery accounts for 23% of total revenue within Microsurgery, equipment represent 78%, service 14%, and consumables 8%. Let me walk you through our regional development. EMEA continued to deliver solid growth, while APAC remained below the prior year level.

Speaker #5: EBITDA margin improved to 12.7%, up 0.4 percentage points year over year. Looking at revenue split, microsurgery accounts for 23% of total revenue, within microsurgery equipment represents 78%, service 14%, and consumables 8%.

Speaker #5: Let me walk you through our regional development. EMEA continued to deliver solid growth, while APEC remained below the prior year level. But let's start with the Americas, the region accounted for 25% of group revenue, revenue in the Americas came in at 397 million euro, down 2.6% year over year, while exchange rate adjusted revenue increased by 3.6%.

Justus Wehmer: Let's start with the Americas. The region accounted for 25% of group revenue. Revenue in the Americas came in at EUR 397 million, down 2.6% year over year, while exchange rate adjusted revenue increased by 3.6%. The US grew slightly on a constant currency basis, while Latin America declined. Moving to EMEA, the region represented 33% of group revenue and delivered solid growth across all core European markets.

Speaker #5: The US grew slightly on a constant currency basis, while Latin America declined. Moving to EMEA, the region represented 33% of group revenue and delivered solid growth across all core European markets.

Justus Felix Wehmer: Revenue in EMEA reached EUR 509 million, up 5.4% year over year, and exchange rate adjusted 5.8%. Finally, Asia Pacific represented 42% of revenue, including China at 23%. APAC revenue amounted to EUR 648 million, down 8.7% year over year or down 7.6% on an exchange rate adjusted basis, with growth in India but weaker revenue in China, Japan, and South Korea. Turning to the P&L, nine-month margins fell below prior year while core operating expenses remained stable. Gross profit declined to EUR 793 million, with gross margin decreasing to 51% from 52.7% last year. Gross margin remained below prior year, driven by exchange rate and unfavorable product mix. In particular, weaker sales of intraocular lenses and refractive treatment packs. This was partly offset by tariff refunds. We received an overall tariff refund of EUR 20.8 million during the third quarter.

Justus Wehmer: Revenue in EMEA reached EUR 509 million, up 5.4% year over year, and exchange rate adjusted 5.8%. Finally, Asia Pacific represented 42% of revenue, including China at 23%. APAC revenue amounted to EUR 648 million, down 8.7% year over year or down 7.6% on an exchange rate adjusted basis, with growth in India but weaker revenue in China, Japan, and South Korea. Turning to the P&L, nine-month margins fell below prior year while core operating expenses remained stable.

Speaker #5: Revenue in EMEA reached €509 million, up 5.4% year over year, and exchange rate adjusted, 5.8%. Finally, Asia Pacific represented 42% of revenue, including China at 23%.

Speaker #5: APEC revenue amounted to 648 million euro, down 8.7% year over year, or down 7.6% on an exchange rate adjusted basis, with growth in India, but weaker revenue in China, Japan, and South Korea.

Speaker #5: Turning to the P&L, nine-month margins fell below the prior year, while core operating expenses remained stable. Gross profit declined to €793 million, with gross margin decreasing to 51% from 52.7% last year.

Justus Wehmer: Gross profit declined to EUR 793 million, with gross margin decreasing to 51% from 52.7% last year. Gross margin remained below prior year, driven by exchange rate and unfavorable product mix. In particular, weaker sales of intraocular lenses and refractive treatment packs. This was partly offset by tariff refunds. We received an overall tariff refund of EUR 20.8 million during the third quarter.

Speaker #5: Gross margin remained below prior year, driven by exchange rate and unfavorable product mix. In particular, weaker sales of intraocular lenses and refractive treatment packs, this was partly offset by tariff refunds, we received an overall tariff refund of 20.8 million euro during the third quarter, out of the refunded tariffs around 11.5 million had been paid in fiscal year 24, 25, and around 9.3 million euro had been paid in 25, 26.

Justus Felix Wehmer: Out of the refunded tariffs, around EUR 11.5 million had been paid in fiscal year 2024/2025, and around EUR 9.3 million had been paid in 2025/2026. I will come back to this on the next slide as we discuss adjusted EBITDA. OpEx ratio increased to 45.6%, mainly driven by the lower sales base and one-off items. These one-offs included the extraordinary impairment of capitalized R&D at Infinite Vision Optics, IVO, legal expenses, and Profit Up measures. Excluding these one-offs, core OpEx was broadly in line with previous year level. EBIT declined to EUR 87.4 million, and EBITDA declined to EUR 108.4 million. Adjusted EBITDA amounted to EUR 124.5 million, corresponding to an adjusted EBITDA margin of 8%, and earnings per share was at EUR 0.80, and adjusted earnings per share was at EUR 1.02, both below prior year.

Justus Wehmer: Out of the refunded tariffs, around EUR 11.5 million had been paid in fiscal year 2024/2025, and around EUR 9.3 million had been paid in 2025/2026. I will come back to this on the next slide as we discuss adjusted EBITDA. OpEx ratio increased to 45.6%, mainly driven by the lower sales base and one-off items. These one-offs included the extraordinary impairment of capitalized R&D at Infinite Vision Optics, IVO, legal expenses, and Profit Up measures.

Speaker #5: I will come back to this on the next slide as we discuss adjusted EBITDA. OPEX ratio increased to 45.6%, mainly driven by the lower sales base, and one-off items.

Speaker #5: These one-offs included the extraordinary impairment of capitalized R&D at Infinite Vision Optics (IVO), legal expenses, and profit-up measures. Excluding these one-offs, core OPEX was broadly in line with the previous year—declining to €87.4 million—and EBITDA declined to €108.4 million.

Justus Wehmer: Excluding these one-offs, core OpEx was broadly in line with previous year level. EBIT declined to EUR 87.4 million, and EBITDA declined to EUR 108.4 million. Adjusted EBITDA amounted to EUR 124.5 million, corresponding to an adjusted EBITDA margin of 8%, and earnings per share was at EUR 0.80, and adjusted earnings per share was at EUR 1.02, both below prior year.

Speaker #5: Adjusted EBITDA amounted to 124.5 million euro, corresponding to an adjusted EBITDA margin of 8%, and earnings per share was at 80 euro cents, and adjusted earnings per share was at 1 euro and 2 cents, both below prior year.

Speaker #5: Let's have a brief look at the bridge from EBIT to EBITDA and two adjusted EBITDA for the nine months of this fiscal year. EBIT amounted to 87.4 million euro, as stated before, regular amortization of purchase price allocations amounted to 20.9 million euro, including dork and cogent surgical.

Justus Felix Wehmer: Let's have a brief look at the bridge from EBIT to EBITDA and to adjusted EBITDA for the nine months of this fiscal year. EBIT amounted to EUR 87.4 million, as stated before. Regular amortization of purchase price allocations amounted to EUR 20.9 million, including DORC and Kogent Surgical. This led to EBITDA of EUR 108.4 million and an EBITDA margin of 7%. Special items included US tariff refunds for fiscal year 2024/2025, legal expenses in connection with a lawsuit related to former IanTech in the US, scrapping of bifocal IOLs, extraordinary R&D impairment, Profit Up related expenses, and other one-offs. As discussed on the previous slide, we received US tariff refunds of EUR 20.8 million for both fiscal year 2024/2025 and the nine months of 2025/2026. The fiscal year 2024/2025 figure of EUR 11.5 million was excluded under our adjusted EBITDA as it pertains to the previous year's period.

Justus Wehmer: Let's have a brief look at the bridge from EBIT to EBITDA and to adjusted EBITDA for the nine months of this fiscal year. EBIT amounted to EUR 87.4 million, as stated before. Regular amortization of purchase price allocations amounted to EUR 20.9 million, including DORC and Kogent Surgical. This led to EBITDA of EUR 108.4 million and an EBITDA margin of 7%.

Speaker #5: This led to EBITDA of €108.4 million, and an EBITDA margin of 7%. Special items included US tariff refunds for fiscal years 2024 and 2025, legal expenses in connection with the lawsuit related to former IANTEC in the US, scrapping of bifocal IOLs, extraordinary R&D impairment, profit-up related expenses, and other one-offs.

Justus Wehmer: Special items included US tariff refunds for fiscal year 2024/2025, legal expenses in connection with a lawsuit related to former IanTech in the US, scrapping of bifocal IOLs, extraordinary R&D impairment, Profit Up related expenses, and other one-offs. As discussed on the previous slide, we received US tariff refunds of EUR 20.8 million for both fiscal year 2024/2025 and the nine months of 2025/2026. The fiscal year 2024/2025 figure of EUR 11.5 million was excluded under our adjusted EBITDA as it pertains to the previous year's period.

Speaker #5: As discussed on the previous slide, we received US tariffs refunds of 20.8 million euro for both fiscal year 24, 25, and the nine months of 25, 26.

Speaker #5: The fiscal year 24, 25 figure of 11.5 million euro was excluded under our adjusted EBITDA as it pertains to the previous year's period. The remainder of the 9.3 million euro is contained in the nine-month adjusted EBITDA figures, because they had been mainly in Q1 and Q2 of this same year.

Justus Felix Wehmer: The remainder of the EUR 9.3 million is contained in the nine-month adjusted EBITDA figures because they had been mainly in Q1 and Q2 of this same year. The net impact on the nine-month period, and therefore also on our guidance, is zero. Adjusted for these special items, EBITDA amounted to EUR 124.5 million, with an adjusted EBITDA margin of 8%. A quick overview of the cash flow statement. The nine-month operating cash flow was strong and net financial debt reduced. Operating cash flow came in at EUR 146 million, significantly above prior year. The improvement was driven by better working capital, mainly lower trade receivables, US tariff refunds, and lower income tax payments reflecting the earnings development. Investing cash flow turned negative at EUR 83.5 million, primarily reflecting higher receivables against treasury of Carl Zeiss AG. CapEx ratio was 2.6% compared with 3%.

Justus Wehmer: The remainder of the EUR 9.3 million is contained in the nine-month adjusted EBITDA figures because they had been mainly in Q1 and Q2 of this same year. The net impact on the nine-month period, and therefore also on our guidance, is zero. Adjusted for these special items, EBITDA amounted to EUR 124.5 million, with an adjusted EBITDA margin of 8%.

Speaker #5: The net impact on the nine-month period, and therefore also on our guidance, is zero. Adjusted for these special items, EBITDA amounted to €124.5 million, with an adjusted EBITDA margin of 8%.

Speaker #5: A quick overview of the cash flow statements: The nine-month operating cash flow was strong, and net financial debt was reduced. Operating cash flow came in at €146 million, significantly above the prior year.

Justus Wehmer: A quick overview of the cash flow statement. The nine-month operating cash flow was strong and net financial debt reduced. Operating cash flow came in at EUR 146 million, significantly above prior year. The improvement was driven by better working capital, mainly lower trade receivables, US tariff refunds, and lower income tax payments reflecting the earnings development. Investing cash flow turned negative at EUR 83.5 million, primarily reflecting higher receivables against treasury of Carl Zeiss AG. CapEx ratio was 2.6% compared with 3%.

Speaker #5: The improvement was driven by better working capital, mainly lower trade receivables, US tariff refunds, and lower income tax payments reflecting the earnings development. Investing cash flow turned negative, at 83.5 million euro, primarily reflecting higher receivables against treasury of Carl Zeiss AG.

Speaker #5: CAPEX ratio was 2.6%, compared with 3% prior year, and net financial debt reduced to €234.8 million as of June 30, 2026. And with that, I hand it over to you, Andreas.

Justus Felix Wehmer: Prior year, the net financial debt reduced to EUR 234.8 million as of 30 June 2026. With that, I hand it over to you, Andreas.

Justus Wehmer: Prior year, the net financial debt reduced to EUR 234.8 million as of 30 June 2026. With that, I hand it over to you, Andreas.

Speaker #5: Thank you. Justus, and now let me move to the key topics. And let me actually start with personnel. We're making progress on building the team of the future.

Andreas Pecher: Thank you, Justus. Now let me move to the key topics. Let me actually start with personnel. We're making progress on building the team of the future for Meditec. We've appointed Andreas Fölker as the new Head of Ophthalmology, effective August 2026. Brand new. The ophthalmology segment has previously been led by Magnus Reibenspiess, who has served well in a double role as Chief Commercial Officer since December 2025. Andreas has more than two decades of global med tech leadership experience from Fresenius Medical Care and VIVONIC before that. In his former role, he held P&L responsibility for an approximately EUR 800 million therapy system portfolio at Fresenius Medical Care, where he had led strategy, product and portfolio management, R&D, and major transformation programs.

Speaker #5: For MEDITEC, we've appointed Andreas Völker as the new head of Ophthalmology. Effective August 2026, so brand new. And the Ophthalmology segment has previously been led by Magnus Reinspies, who has served while in the double role as Chief Commercial Officer since December 2025.

Andreas Pecher: Andreas has more than two decades of global med tech leadership experience from Fresenius Medical Care and VIVONIC before that. In his former role, he held P&L responsibility for an approximately EUR 800 million therapy system portfolio at Fresenius Medical Care, where he had led strategy, product and portfolio management, R&D, and major transformation programs.

Speaker #5: Andreas has more than two decades of global MedTech leadership experience, from Fresenius Medical Care and Vivonic, before that, and in his former role, he held P&L responsibility for an approximately 800 million euro therapy system portfolio at Fresenius Medical Care, which he had led strategy, product, and portfolio management, R&D, and while major transformation programs.

Andreas Pecher: He successfully drove the commercialization of innovative dialysis platforms, led significant portfolio and organizational transformations, and brings extensive international experience across the US, China, and other growth markets. His combination of innovation leadership, operational excellence, and value-creation focused business transformation makes him an excellent fit to lead the next phase of transformation and growth in our ophthalmology business. Andreas and I are actually currently spending time in the US. Well, important time to spend with our customers and our teams. From the get-go, he gets sort of the first impression on what our challenges are, but also what our opportunities are. With that, I move on, I'd like to present an innovation in our microsurgery business, the ZEISS TorUS ultrasonic aspirator. This has been presented at AANS 2026. It is still pending FDA 510 clearance, which we expect towards the end of the calendar year.

Speaker #5: He successfully drove the commercialization of innovative dialysis platforms, led significant portfolio and organizational transformations, and brings extensive international experience across the US, China, and other growth markets.

Speaker #5: So his combination of innovation leadership, operational excellence, and value-graded or value creation focused business transformation makes him an excellent fit to lead the next phase of transformation and growth in our Ophthalmology business.

Speaker #5: And Andreas and I are actually currently spending time in the US, while important time to spend with our customers and our teams. So from the get-go, he gets sort of the first impression on what our challenges are, but also what our opportunities are.

Andreas Pecher: Andreas and I are actually currently spending time in the US. Well, important time to spend with our customers and our teams. From the get-go, he gets sort of the first impression on what our challenges are, but also what our opportunities are. With that, I move on, I'd like to present an innovation in our microsurgery business, the ZEISS TorUS ultrasonic aspirator. This has been presented at AANS 2026. It is still pending FDA 510 clearance, which we expect towards the end of the calendar year.

Speaker #5: With that, I'd like to move on and present an innovation in our microsurgery business that ties to the Taurus Ultrasonic Aspirator. This has been presented at AANS 2026.

Speaker #5: It is still pending FDA 510K clearance. We expect towards the end of the calendar year. The Taurus Ultrasonic Aspirator builds on the cogent portfolio and is designed for tissue removal, throughout cranial and spinal procedures.

Andreas Pecher: The TorUS ultrasonic aspirator builds on the Kogent portfolio and is designed for tissue removal throughout cranial and spinal procedures. The device combines three tissue removal modes in one system. These modes are ultrasonic ablation of soft and fibrous tissue, ultrasonic bone cutting, and ultrasonic bone dissecting or dissection using torsional motion technology. This product is highly differentiated from competing solutions. It's quite a unique three-in-one device that can replace three incumbent devices in the operating room that are typically used for the soft tissue aspiration, bone dissecting, and bone cutting. It is designed to integrate with the ZEISS KINEVO 900 S visualization system, enabling system parameters to be displayed directly in the microscope's field of view during the procedure. Out of the Kogent acquisition, we've already successfully introduced the electronic bipolar forceps. The TorUS ultrasonic aspirator represents an important milestone in our instruments strategy.

Speaker #5: The device combines three tissue removal modes in one system. These modes are ultrasonic, ablation of soft and fibrous tissue, ultrasonic bone cutting, and ultrasonic bone dissecting.

Speaker #5: Or dissection, using torsional motion technology. This product is highly differentiated from competing solutions. It's quite a unique three-in-one device, that can replace three incumbent devices in the operating room.

Andreas Pecher: It's quite a unique three-in-one device that can replace three incumbent devices in the operating room that are typically used for the soft tissue aspiration, bone dissecting, and bone cutting. It is designed to integrate with the ZEISS KINEVO 900 S visualization system, enabling system parameters to be displayed directly in the microscope's field of view during the procedure. Out of the Kogent acquisition, we've already successfully introduced the electronic bipolar forceps. The TorUS ultrasonic aspirator represents an important milestone in our instruments strategy.

Speaker #5: There are typically used for the soft tissue aspiration, bone dissecting, and bone cutting. It is designed to integrate with the size Kinevo 900S visualization system, enabling system parameters to be displayed directly in the microscope's field of view during the procedure.

Speaker #5: And out of the Cogent acquisition, we've already successfully introduced the electronic bipolar forceps. Now, the Taurus Ultrasonic Aspirator represents an important milestone in our instruments strategy.

Speaker #5: And building on our strong position in neurosurgical and spinal surgical microscopes, we're expanding our presence in the operating room and extending our workflow offering beyond visualization to treatment.

Andreas Pecher: Building on our strong position in neurosurgical and spinal surgical microscopes, we're expanding our presence in the operating room and extending our workflow offering beyond visualization to treatment. Moving on. In June, we announced a strategic agreement with Aier Eye Hospital Group, for the purchase and installation of 25 ZEISS VISUMAX 800 femtosecond lasers across multiple Aier Hospital locations. The rollout is expected to start later in 2026 across domestic and international sites. This strengthens our position in the global refractive market, supports higher surgical efficiency and patient outcomes. Together with Aier Group, we will explore deeper collaborative innovation in areas such as international expansion, integrated digital workflows and platforms, and AI-assisted diagnosis. Needless to say, we're quite happy about this deal.

Speaker #5: Moving on, in June, we announced the strategic agreement with IRI Hospital Group for the purchase and installation of 25 ZEISS VISUMAX 800 femtosecond lasers across locations.

Speaker #5: The rollout is expected to start later in 2026 across domestic and international sites. This strengthens our position in the global refractive market, supports higher surgical efficiency, and improves patient outcomes.

Andreas Pecher: The rollout is expected to start later in 2026 across domestic and international sites. This strengthens our position in the global refractive market, supports higher surgical efficiency and patient outcomes. Together with Aier Group, we will explore deeper collaborative innovation in areas such as international expansion, integrated digital workflows and platforms, and AI-assisted diagnosis. Needless to say, we're quite happy about this deal.

Speaker #5: Together with IRI Group, we will explore deeper collaborative innovation in areas such as international expansion, integrated digital workflows, and platforms, and AI-assisted diagnosis. And needless to say, we're quite happy about this deal, as we have commented about throughout the year, the CAPEX environment in China and across most of APAC has not been easy lately, and replacement of these machines to China's largest private hospital operator is signaling the continued high interest in our refractive technology and the Zeiss Visomax 800.

Andreas Pecher: As we have commented about throughout the year, the CapEx environment in China and across most of APAC has not been easy lately. Replacement of these machines to China's largest private hospital operator is signaling the continued high interest in our refractive technology and the ZEISS VISUMAX 800. Globally, we have recently reached 1 million cumulative SMILE pro procedures being performed on VISUMAX 800. With that, over to you, Justus.

Speaker #5: Globally, we have recently reached 1 million cumulative smile probe procedures being performed on Visomax 800. And with that, over to you, Justus.

Speaker #4: Thank you, Andreas. So a quick glance on the status of the profit op program. During Q3, first initiatives related to this program have been launched.

Justus Felix Wehmer: Thank you, Andreas. A quick glance on the status of the Profit Up program. During Q3, first initiatives related to this program have been launched. I'm pleased to report that we have entered into talks with the labor representatives here in Germany. Constructive way in making good progress. Let me flag a few decisions taken in the initial phase of the project. On operations, we are consolidating handpiece production by closing the DORC site in Westerburg, Germany, and shifting all handpiece production to Chesterfield, US, allowing us to improve scale and operational efficiency. We also plan to establish a production site in India to improve flexibility and cost competitiveness. We are joining the site being constructed in Bangalore by ZEISS as a manufacturing hub. This will further help us diversify our footprint and create a more balanced exposure to geopolitical risks.

Justus Wehmer: Thank you, Andreas. A quick glance on the status of the Profit Up program. During Q3, first initiatives related to this program have been launched. I'm pleased to report that we have entered into talks with the labor representatives here in Germany. Constructive way in making good progress. Let me flag a few decisions taken in the initial phase of the project.

Speaker #4: I'm pleased to report that we have entered into talks with the labor representatives here in Germany. It's a constructive way and we are making good progress. So let me flag a few decisions taken in the initial phase of the project.

Speaker #4: On operations, we are consolidating handpiece production by closing the dock site in Vesterbro, Germany. And shifting all handpiece production to Chesterfield, US, allowing us to improve scale and operational efficiency.

Justus Wehmer: On operations, we are consolidating handpiece production by closing the DORC site in Westerburg, Germany, and shifting all handpiece production to Chesterfield, US, allowing us to improve scale and operational efficiency. We also plan to establish a production site in India to improve flexibility and cost competitiveness. We are joining the site being constructed in Bangalore by ZEISS as a manufacturing hub. This will further help us diversify our footprint and create a more balanced exposure to geopolitical risks.

Speaker #4: We also plan to establish a production site in India to improve flexibility and cost competitiveness. We are joining the site being constructed in Bangalore by Zeiss as a manufacturing hub.

Speaker #4: This will further help us diversify our footprint and create a more balanced exposure to geopolitical risks. A decision on which products will be manufactured there has not yet been made.

Justus Felix Wehmer: A decision on which products will be manufactured there has not yet been made. On organization layers and portfolio decisions, we will merge surgery anterior segment and the surgery posterior segment. That means bring together the cataract and retinal business. This will enable us to better integrate clinical workflows, strengthen our customer offering, and generate greater recurring revenue synergies. We will wind down the Katalyst portfolio by the end of this fiscal year, as it largely overlaps with DORC instruments. This is expected to impact annual revenue in the mid-single digits EUR million range, while the Kogent portfolio will continue to be manufactured in Chesterfield. This portfolio optimization will not have a significant impact on the Chesterfield production site overall. Its capacity will be refilled with handpiece production, what I just mentioned, and expansion of Kogent product portfolio.

Justus Wehmer: A decision on which products will be manufactured there has not yet been made. On organization layers and portfolio decisions, we will merge surgery anterior segment and the surgery posterior segment. That means bring together the cataract and retinal business. This will enable us to better integrate clinical workflows, strengthen our customer offering, and generate greater recurring revenue synergies. We will wind down the Katalyst portfolio by the end of this fiscal year, as it largely overlaps with DORC instruments.

Speaker #4: On organization layers and portfolio decisions, we will merge surgery anterior segment and the surgery posterior segment. That means bringing together the cataract and retinal business.

Speaker #4: This will enable us to better integrate clinical workflows, strengthen our customer offering, and generate greater recurring revenue synergies. We will wind down the Catalyst portfolio by the end of this fiscal year, as it largely overlaps with our instruments.

Speaker #4: This is expected to impact annual revenue in the mid-single digits million euro range. While the cogent portfolio will continue to be manufactured in Chesterfield.

Justus Wehmer: This is expected to impact annual revenue in the mid-single digits EUR million range, while the Kogent portfolio will continue to be manufactured in Chesterfield. This portfolio optimization will not have a significant impact on the Chesterfield production site overall. Its capacity will be refilled with handpiece production, what I just mentioned, and expansion of Kogent product portfolio.

Speaker #4: This portfolio optimization will not have a significant impact on the Chesterfield production site overall. Its capacity will be refilled with handpiece production, what I just mentioned, and expansion of cogent product portfolio.

Speaker #4: We will sunset Quartera and focus on Eva Nexus as the primary anterior and posterior device, leveraging the popularity of the dork technology in the surgical market and its large installed base.

Justus Felix Wehmer: We will sunset QUATERA and focus on EVA NEXUS as the primary anterior and posterior device, leveraging the popularity of the DORC technology in the surgical market and its large installed base. It is still too early to quantify the exact phasing of savings, but as I told you in the last call, there will be a certain time to implementation and transition for many of the measures involved, leading to a back-end loaded realization of the savings, with comparatively little impact on next fiscal year yet. We will continue to update you on the progress of the Profit Up program and provide transparency on the expected financial benefits as we make progress with the labor bodies and the implementation advances. Turning now to the outlook section. The outlook remains broadly unchanged. For fiscal year 2025-2026, we continue to expect revenue in the range of approximately EUR 2.2 billion.

Justus Wehmer: We will sunset QUATERA and focus on EVA NEXUS as the primary anterior and posterior device, leveraging the popularity of the DORC technology in the surgical market and its large installed base. It is still too early to quantify the exact phasing of savings, but as I told you in the last call, there will be a certain time to implementation and transition for many of the measures involved, leading to a back-end loaded realization of the savings, with comparatively little impact on next fiscal year yet.

Speaker #4: It is still too early to quantify the exact phasing of savings, but as I told you in the last call, there will be a certain time to implementation and transition for many of the measures involved.

Speaker #4: Leading to a backend-loaded realization of the savings, with comparatively little impact on next fiscal year yet. We will continue to update you on the progress of the profit op program and provide transparency on the expected financial benefits as we make progress with the labor bodies and the implementation advances.

Justus Wehmer: We will continue to update you on the progress of the Profit Up program and provide transparency on the expected financial benefits as we make progress with the labor bodies and the implementation advances. Turning now to the outlook section. The outlook remains broadly unchanged. For fiscal year 2025-2026, we continue to expect revenue in the range of approximately EUR 2.2 billion.

Speaker #4: Turning now to the outlook section, the outlook remains broadly unchanged. For fiscal year 25/26, we continue to expect revenue in the range of approximately €2.2 billion.

Justus Felix Wehmer: Adjusted EBITA margin is expected to be between 8% and 10%, as the 9-month adjusted EBITA margin has already reached 8%, and given that Q4 typically delivers above average top line and margin, we believe the lower end of the margin guidance is well supported at this stage. Where exactly we end up within the range will be determined by the shape of the typical year and sales ramp in the equipment business on the one hand, as well as the trend in the Chinese summer peak season for refractive consumables on the other hand, which, as discussed before, has been starting off on a relatively weak note in June. The current business trend is therefore pointing more towards the lower parts of the range.

Justus Wehmer: Adjusted EBITA margin is expected to be between 8% and 10%, as the 9-month adjusted EBITA margin has already reached 8%, and given that Q4 typically delivers above average top line and margin, we believe the lower end of the margin guidance is well supported at this stage.

Speaker #4: Adjusted EBITDA margin is expected to be between 8 and 10 percent, as the nine-month adjusted EBITDA margin has already reached 8 percent. And given that Q4 typically delivers above-average top line and margin, we believe the lower end of the margin guidance is well supported at this stage.

Justus Wehmer: Where exactly we end up within the range will be determined by the shape of the typical year and sales ramp in the equipment business on the one hand, as well as the trend in the Chinese summer peak season for refractive consumables on the other hand, which, as discussed before, has been starting off on a relatively weak note in June. The current business trend is therefore pointing more towards the lower parts of the range.

Speaker #4: Where exactly we end up within the range will be determined by the shape of the typical year-end sales ramp in the equipment business. On the one hand, as well as the trend in the Chinese summer peak season, for refractive consumables on the other hand.

Speaker #4: Which, as discussed before, has been starting off on a relatively weak note in June. The current business trend is therefore pointing more towards the lower part of the range.

Speaker #4: The guidance excludes special items in the mid-double-digit million euro range, including costs related to R&D reprioritization, the scrapping of bifocal IOLs, legal expenses, and the costs related to the profit-op program.

Justus Felix Wehmer: The guidance excludes special items in the mid-double digit million EUR range, including costs related to R&D reprioritization, the scrapping of bifocal IOLs, legal expenses, and the costs related to the Profit Up program. As discussed on the Q2 earnings call, based on our current assessments together with our auditors, we expect a goodwill impairment of approximately EUR 150 million in the ophthalmology SBU in Q4 2025-2026. This impairment relates mostly to the already mentioned IanTech acquisition, and will have no impact on adjusted EBITA or cash flow. Our midterm and long-term guidance remains unchanged. For the midterm, fiscal year 2028, 2029, and beyond, organic revenue growth is expected to recover to at least a mid-single digit percentage rate. Adjusted EBITA margin is targeted to recover to above 15% in the medium term.

Justus Wehmer: The guidance excludes special items in the mid-double digit million EUR range, including costs related to R&D reprioritization, the scrapping of bifocal IOLs, legal expenses, and the costs related to the Profit Up program. As discussed on the Q2 earnings call, based on our current assessments together with our auditors, we expect a goodwill impairment of approximately EUR 150 million in the ophthalmology SBU in Q4 2025-2026.

Speaker #4: As discussed on the Q2 earnings call, based on our current assessments, together with our auditors, we expect a goodwill impairment of approximately 150 million euro, in the ophthalmology SBU in Q4 25-26.

Justus Wehmer: This impairment relates mostly to the already mentioned IanTech acquisition, and will have no impact on adjusted EBITA or cash flow. Our midterm and long-term guidance remains unchanged. For the midterm, fiscal year 2028, 2029, and beyond, organic revenue growth is expected to recover to at least a mid-single digit percentage rate. Adjusted EBITA margin is targeted to recover to above 15% in the medium term.

Speaker #4: This impairment relates mostly to the already mentioned Yantec acquisition, and will have no impact on adjusted EBITDA or cash flow. Our mid-term and long-term guidance remains unchanged.

Speaker #4: For the mid-term, fiscal year 28-29 and beyond, organic revenue growth is expected to recover to at least the mid-single digit percentage rate, adjusted EBITDA margin is targeted to recover to above 15 percent in the medium term.

Speaker #4: In the long term, EBITDA margin is expected to increase to the previous target range of 16 to 20 percent. With that, I'd like to conclude the presentation.

Justus Felix Wehmer: In the long term, EBITA margin is expected to increase to the previous target range of 16% to 20%. With that, I'd like to conclude the presentation and open the floor for your questions.

Justus Wehmer: In the long term, EBITA margin is expected to increase to the previous target range of 16% to 20%. With that, I'd like to conclude the presentation and open the floor for your questions.

Speaker #4: And open the floor for your questions.

Operator 1: Ladies and gentlemen, if you have joined by telephone and would like to ask a question, please press star nine and the pound key on your telephone keypad. If you would like to withdraw your question, press star three and the pound key. If you are connected online and listening via the web interface, please click the telephone handset button and then the raise hand icon. This will allow you to ask your question verbally as well. The first question is from Mr. Oliver Reinberg from Kepler Cheuvreux. Mr. Reinberg, the floor is yours. Your line is open.

Operator: Ladies and gentlemen, if you have joined by telephone and would like to ask a question, please press star nine and the pound key on your telephone keypad. If you would like to withdraw your question, press star three and the pound key. If you are connected online and listening via the web interface, please click the telephone handset button and then the raise hand icon. This will allow you to ask your question verbally as well. The first question is from Mr. Oliver Reinberg from Kepler Cheuvreux. Mr. Reinberg, the floor is yours. Your line is open.

Speaker #1: Ladies and gentlemen, if you have joined by telephone and would like to ask a question, please press star nine and the pound key on your telephone keypad.

Speaker #1: If you would. Withdraw your questions, press star 3 and pound key. If you're connected online and listening via the web interface, please click the telephone handset button and then the raised hand icon.

Speaker #1: This will allow you to ask your question verbally as well. So, the first question is from Mr. Oliver Reinberg from Kepler Cheuvreux. Mr. Reinberg, the floor is yours.

Speaker #1: Your line is open.

Oliver Reinberg: Hey, good afternoon, thanks so much for taking my questions. Two question blocks, if I may. Firstly, on China effects, can you just provide a bit of more color what kind of decline you have seen in June, also how treatment packs overall have developed in Asia in Q3? I think so far you talked about a slight growth in China. Can you just update us on the full year assumption in this regard? Also if you have any kind of color if this kind of weakness has already translated into pricing pressure, that would be helpful. Second question just on 2026. I appreciate that's a bit out, but it would be great to get expectation, the wide ballpark. Can you just talk about the pulls and pushes for next year and whether you are fully committed to EBITDA growth next year?

Speaker #4: Good afternoon, and thank you so much for taking my questions. I have two question blocks, if I may. Firstly, on China refractive—could you just provide a bit more color?

Speaker #4: What kind of decline have you seen in June, and also how have treatment packs overall developed in Asia in the third quarter? And I think so far you’ve talked about slight growth in China.

Speaker #4: Can you just update us on the kind of fully assumption in this regard, and also if you have any kind of color, if this kind of weakness has already translated into pricing pressure, that would be helpful.

Oliver Reinberg: Can you just update us on the full year assumption in this regard? Also if you have any kind of color if this kind of weakness has already translated into pricing pressure, that would be helpful. Second question just on 2026. I appreciate that's a bit out, but it would be great to get expectation, the wide ballpark. Can you just talk about the pulls and pushes for next year and whether you are fully committed to EBITDA growth next year?

Speaker #4: And then, second question—just on 2026. I appreciate that's a bit out, but it would be great to get expectations in the right ballpark.

Speaker #4: Can you just talk about the holds and pushes for next year, and whether you are fully committed to EBITDA growth next year? Thank you.

Oliver Reinberg: Thank you.

Justus Felix Wehmer: Oliver, thanks for the questions. To give you a little bit of color. I think to start with year-to-date, in terms of procedures in China, we still see slight growth in the neighborhood of 2% to 3%. That is the good news. However, it's also fair to say that we have seen this melting down somewhat over the last two months. If we take the single data for month June and the very fresh data that we just received last night out of our Chinese team, we know that in June we were 8% below prior year, and 5% in July below prior year. That is basically where we are right now. Explanations that we see is that apparently the pull-in of the military-related treatments has been somewhat stronger this year, and therefore, so to speak, this portion is right now missing in the summer peak.

Justus Wehmer: Oliver, thanks for the questions. To give you a little bit of color. I think to start with year-to-date, in terms of procedures in China, we still see slight growth in the neighborhood of 2% to 3%. That is the good news. However, it's also fair to say that we have seen this melting down somewhat over the last two months.

Speaker #4: Oliver, thanks for the questions. So to give you a little bit of color, I think to start with, year-to-date, in terms of procedures in China, we still see slight growth in the neighborhood of 2 to 3 percent.

Speaker #4: That is the good news. However, it's also fair to say that we have seen this melting down somewhat over the last two months. And if we take the single data for month June, and the very, very fresh data that we just received last night out of our Chinese team, we know that in June, we were 8 percent below prior year, and 5 percent in July.

Justus Wehmer: If we take the single data for month June and the very fresh data that we just received last night out of our Chinese team, we know that in June we were 8% below prior year, and 5% in July below prior year. That is basically where we are right now. Explanations that we see is that apparently the pull-in of the military-related treatments has been somewhat stronger this year, and therefore, so to speak, this portion is right now missing in the summer peak.

Speaker #4: Below prior year. So that is basically where we are right now. And explanations that we see is that apparently the pull-in of the military-related treatments has been somewhat stronger this year.

Speaker #4: And therefore, so to speak, this portion is right now missing in the summer peak. So I hope that gives you a little bit of better understanding.

Justus Felix Wehmer: I hope that gives you a little bit of better understanding. You were asking about the remainder of RTP in Asia. I think there are different factors that apply to different countries. I'd say Indonesia and Thailand, sorry. There you have more recently quite a lot of political instability, as you can read in the news, and that is clearly not helping investment decisions. That is one factor. In South Korea, I think we have reached already with the VisuMax roll-in that started, the VISUMAX 800 roll-in that started in Korea, as you know well earlier than in China. I think somewhat a level of saturation. Therefore, out of Korea, we also haven't seen any kind of significant growth contribution during the course of this year. You had a question on the pricing pressure, whether we see there is some pricing pressure already.

Justus Wehmer: I hope that gives you a little bit of better understanding. You were asking about the remainder of RTP in Asia. I think there are different factors that apply to different countries. I'd say Indonesia and Thailand, sorry. There you have more recently quite a lot of political instability, as you can read in the news, and that is clearly not helping investment decisions.

Speaker #4: You were asking about the remainder of RTP in Asia. I think there's different factors that apply to different countries. I'd say Indonesia and Philippines no, Indonesia and Thailand, sorry, there you have more reasonably quite a lot of political instability, as you can read in the news.

Speaker #4: And that is clearly not helping investment decisions. So that is one factor. In South Korea, I think we have already reached—with the Mark's role in that—the Visamax 800 role in that started in Korea, as you know, well earlier than in China.

Justus Wehmer: That is one factor. In South Korea, I think we have reached already with the VisuMax roll-in that started, the VISUMAX 800 roll-in that started in Korea, as you know well earlier than in China. I think somewhat a level of saturation. Therefore, out of Korea, we also haven't seen any kind of significant growth contribution during the course of this year. You had a question on the pricing pressure, whether we see there is some pricing pressure already.

Speaker #4: I think somewhat a level of saturation, so therefore out of Korea, we also haven't seen any kind of significant growth contribution during the course of this year.

Speaker #4: You had a question on the pricing pressure, whether we see there some pricing pressure already. That is not the case. I can clearly at this point confirm that we are still, in in terms of our price realization, for the treatment packs in China, tracking according to our expectations.

Justus Felix Wehmer: That is not the case. I can clearly, at this point, confirm that we are still, in terms of our price realization for the treatment packs in China, tracking according to our expectations. 2026, you wanted to get a little bit of color on what is it what we see for next year. Obviously, a somewhat bold moment to give you an answer on that. What I can share with you right now is that we would, over the course of next year, obviously, number one, expect some more momentum out of the integration of our DORC sales organization into the ZEISS sales organization, because that has advanced throughout this year. We think that we are now basically in a position to get more traction in terms of roll-in and with that, of course, order generation.

Justus Wehmer: That is not the case. I can clearly, at this point, confirm that we are still, in terms of our price realization for the treatment packs in China, tracking according to our expectations. 2026, you wanted to get a little bit of color on what is it what we see for next year. Obviously, a somewhat bold moment to give you an answer on that.

Speaker #4: 2026, you wanted to get a little bit of, yeah, color on what is it, what we see. For next year, obviously, a somewhat bold moment to give you an answer on that.

Speaker #4: But I mean, what I can share with you right now is that we would, over the course of next year, obviously number one, expect some more momentum.

Justus Wehmer: What I can share with you right now is that we would, over the course of next year, obviously, number one, expect some more momentum out of the integration of our DORC sales organization into the ZEISS sales organization, because that has advanced throughout this year. We think that we are now basically in a position to get more traction in terms of roll-in and with that, of course, order generation.

Speaker #4: Out of the integration of our DORC sales organization into the ZEISS sales organization—because that has advanced throughout this year—and we think that we are now basically in a position to get more traction in terms of roll-in and, with that, of course, order generation.

Speaker #4: I think we would see or expect at some point next year then also clarity at least on the NVDP, as we said, right now on the our estimation is that by end of this year, it should kick in.

Justus Felix Wehmer: I think we would see or expect at some point next year also clarity, at least on the VBP. As we said right now our estimation is that by end of this year, it should kick in. Obviously it's a lot of speculation right now, but frankly spoken, after now a delay of almost nine months, I would be already satisfied to have it behind us and have the results. With that, having better clarity on what we can expect in terms of volumes and especially at which sort of pricing. Beyond that, please understand, speculations on the US, I think I have stopped trying that, yeah, because we have too often changes in tariff announcements and tariff applications. For EMEA at least, considering that this year, against all odds, so to speak, quite a solid development.

Justus Wehmer: I think we would see or expect at some point next year also clarity, at least on the VBP. As we said right now our estimation is that by end of this year, it should kick in. Obviously it's a lot of speculation right now, but frankly spoken, after now a delay of almost nine months, I would be already satisfied to have it behind us and have the results.

Speaker #4: And obviously, it's a lot of speculation right now, but frankly spoken, after now a delay of almost nine months, I would be already satisfied to have it behind us and have the results and with that having better clarity on what we can expect in terms of volumes and especially at which sort of pricing.

Justus Wehmer: With that, having better clarity on what we can expect in terms of volumes and especially at which sort of pricing. Beyond that, please understand, speculations on the US, I think I have stopped trying that, yeah, because we have too often changes in tariff announcements and tariff applications. For EMEA at least, considering that this year, against all odds, so to speak, quite a solid development.

Speaker #4: Beyond that, please understand, speculations on the US, I think I have stopped trying that, yeah, because we have too often changes in tariff announcements and tariff applications.

Speaker #4: And for EMEA at least, considering that this year against all odds, so to speak, in the scheme of bigger. Quite a solid development, I would at least right now expect this to continue and, yeah, I think this is my five cents at this point in time.

Justus Felix Wehmer: I would at least right now expect this to continue. Yeah, I think this is my 5 cents at this point in time, Oliver. I hope that helps you a little bit.

Justus Wehmer: I would at least right now expect this to continue. Yeah, I think this is my 5 cents at this point in time, Oliver. I hope that helps you a little bit.

Speaker #4: Oliver, I hope that helps you a little bit. Perfect. That's good color. Thanks so much. Thanks.

Oliver Reinberg: Perfect. That's good color. Thanks so much.

Justus Felix Wehmer: Thank you.

Justus Wehmer: Thank you.

Operator 1: Next question is from Jonathan Unwin from Barclays. Please go ahead. Your line is open.

Operator: Next question is from Jonathan Unwin from Barclays. Please go ahead. Your line is open.

Speaker #1: Next question is from Jonathan Unwin from Barclays. Please go ahead. Your line is open.

Jonathan Unwin: Hi. Thank you for taking my questions. You mentioned that you expect to be closer to the bottom end of the margin range for this fiscal year. I'm just wondering what's happened in the last quarter to make you feel that the full guidance range that you set at Q2 is no longer in play. Is it really the refractive treatment pack weakness you've seen in Q3 in China and earlier on in the year, in APAC? Is there something else to call out? If there is something else, just interested to hear how you expect those areas to play out in FY 2027. I was wondering if you could also confirm whether you had expected a tariff refund in when you set the margin guidance of 8% to 10%. Was that expectation already baked into that margin? Thanks.

Jonathon Unwin: Hi. Thank you for taking my questions. You mentioned that you expect to be closer to the bottom end of the margin range for this fiscal year. I'm just wondering what's happened in the last quarter to make you feel that the full guidance range that you set at Q2 is no longer in play. Is it really the refractive treatment pack weakness you've seen in Q3 in China and earlier on in the year, in APAC?

Speaker #5: Hi, thank you for taking my questions. You mentioned that you expect to be closer to the bottom end of the margin range for this fiscal year.

Speaker #5: But I'm just wondering, what's kind of happened in the last quarter to make you feel that the full guidance range that you set at Q2 is no longer in play?

Speaker #5: Is it really the refractive treatment pack weakness you've seen in Q3 in China and earlier on in the year in APAC? Or is there something else to call out?

Jonathon Unwin: Is there something else to call out? If there is something else, just interested to hear how you expect those areas to play out in FY 2027. I was wondering if you could also confirm whether you had expected a tariff refund in when you set the margin guidance of 8% to 10%. Was that expectation already baked into that margin? Thanks.

Speaker #5: And if there is something else, just interested to hear how you expect those areas to play out in also confirm whether you had expected a tariff refund in when you set the margin guidance of 8 to 10 percent.

Speaker #5: So was that expectation already baked into that margin? Thanks.

Justus Felix Wehmer: Yeah, I think the explanation for the. Do we have a noise? I'm not sure. Maybe you can go on mute. We see the weaker indications for the refractive business that we start with, you know that the leverage of this business is massive, is probably the key indicator for the margin profile that we expect for Q4. That brings us to this lower range of the margin as we have just explained in the presentation. I think beyond that, there is no specifics. I could potentially add that we also know, of course, that in Q4 we always have two effects. Number one, MCS device business coming in strongly with better margins. Against that, you have the stronger diagnostical device revenue, especially from the US. There, of course, then again, the question is how will the currency fare?

Speaker #4: So yeah, I think the explanation for the do we have a I'm not sure. Maybe you can go unmute. So we see that weaker indications for the refractive business that we start with, and you know that the leverage of this business is massive.

Justus Wehmer: Yeah, I think the explanation for the. Do we have a noise? I'm not sure. Maybe you can go on mute. We see the weaker indications for the refractive business that we start with, you know that the leverage of this business is massive, is probably the key indicator for the margin profile that we expect for Q4. That brings us to this lower range of the margin as we have just explained in the presentation.

Speaker #4: Is probably the key indicator for the margin profile that we expect for Q4 and that brings us to this lower range of the margin as we have just explained in the presentation.

Speaker #4: I think beyond that, there is no specifics. I could potentially add that we also know, of course, that in Q4, we always have two effects.

Justus Wehmer: I think beyond that, there is no specifics. I could potentially add that we also know, of course, that in Q4 we always have two effects. Number one, MCS device business coming in strongly with better margins. Against that, you have the stronger diagnostical device revenue, especially from the US. There, of course, then again, the question is how will the currency fare?

Speaker #4: Number one, MCS device business coming in strongly with better margins. And again, that you have the stronger diagnostical device revenue, especially from the US.

Speaker #4: And there, of course, then again, the question is how will the currency fare? And because both MCS and CDM are strong businesses in the fourth quarter in the US, and there currency can either be in your favor or potentially come in as a more stronger headwind.

Justus Felix Wehmer: Because both MCS and CDM are strong businesses in Q4 in the US, there currency can either be in your favor or potentially come in as a stronger headwind. From our current estimates, these two key factors combined explain why we are currently guiding more for the closer end. In terms of the question on whether we had expected the refund when we had designed the guidance. Most likely. Yeah. It was somewhat expected. Yeah. Of course, not knowing what exactly would be the outcome of the US justice who was taking this case up. Yeah. Okay. Thank you.

Justus Wehmer: Because both MCS and CDM are strong businesses in Q4 in the US, there currency can either be in your favor or potentially come in as a stronger headwind. From our current estimates, these two key factors combined explain why we are currently guiding more for the closer end. In terms of the question on whether we had expected the refund when we had designed the guidance. Most likely. Yeah. It was somewhat expected. Yeah. Of course, not knowing what exactly would be the outcome of the US justice who was taking this case up. Yeah. Okay. Thank you.

Speaker #4: That from our current estimates, these two key factors combined explain why we are currently guiding more for the closer end. In terms of the question on the whether we had expected the refund when we guidance yeah, it was kind of yeah, somewhat expected.

Speaker #4: Yeah. Of course, not knowing what exactly would be the outcome of the US justice who was taking this case up. Yeah. Okay. Thank you.

Speaker #1: Okay. Thank you. The next question is from Oliver Metzger from Auto BHF. Your line is open. You can go ahead.

Operator 1: Okay. Thank you. The next question is from Oliver Metzger, from Oddo BHF. Your line is open. You can go ahead.

Operator: Okay. Thank you. The next question is from Oliver Metzger, from Oddo BHF. Your line is open. You can go ahead.

Speaker #2: Okay. Good afternoon. Thanks for taking my questions. First was also on refractive in China. So you still see some slight growth and I assume that just on the back of Smile Pro, you still have a positive volume price effect.

Oliver Metzger: Okay. Good afternoon. Thanks for taking my questions. First was also on refractive in China. You still see some slight growth, I assume that just on the back of SMILE pro, you still have a positive volume price effect. Does it mean that actually you see the underlying market is shrinking? Second question is about your TORUS ultrasonic device. Will you execute the sale by yourself, or do you plan also to partner this device? Last question is quick on microsurgery. Yeah, we saw now some encouraging development for some quarters. You already made a comment for Q4. How should we think? Would you consider the trough now is over that we progress from this current slow growth level? Thank you.

Speaker #2: So that doesn't mean that actually you see the underlying market is shrinking. And second question is about your tourist ultrasonic device. So will you execute the sale by yourself, or do you plan also to partner this device?

Oliver Metzger: Will you execute the sale by yourself, or do you plan also to partner this device? Last question is quick on microsurgery. Yeah, we saw now some encouraging development for some quarters. You already made a comment for Q4. How should we think? Would you consider the trough now is over that we progress from this current slow growth level? Thank you.

Speaker #2: And last question is quickly on microsurgery. So yeah, we saw some encouraging development for some quarters. You already made a comment for Q4. How should we think?

Speaker #2: Is what you consider the draft now is over? And so that we progress from this current slow growth level? Thank you.

Justus Felix Wehmer: Thank you, Oliver. Refractive in China, your question on the slight growth. Yes, of course, we do have the benefit of the higher pricing for the SMILE pro treatment pack that is helping, but we are not seeing a shrinkage of the market, to be clear here. I would argue probably the reason that Aier has put in this 25 VisuMax order is also an indication that a shrinkage is not something that is considered to be happening anytime soon. So much on that. On the TORUS, we are considering to use the same channels to address our customers as we do right now, which is a mix of direct and indirect sales, depends a little bit on the regions in the world.

Justus Wehmer: Thank you, Oliver. Refractive in China, your question on the slight growth. Yes, of course, we do have the benefit of the higher pricing for the SMILE pro treatment pack that is helping, but we are not seeing a shrinkage of the market, to be clear here. I would argue probably the reason that Aier has put in this 25 VisuMax order is also an indication that a shrinkage is not something that is considered to be happening anytime soon.

Speaker #4: Thank you, Oliver. So refractive in China, your question on the slight growth, yes, of course, we do have the benefit of the higher pricing for the Smile Pro treatment packs.

Speaker #4: That is helping, but we are not seeing a shrinkage of the markets, to be clear here. And I would argue probably the reason that AR has put in this 25 Visumax order is also an indication of that.

Speaker #4: A shrinkage is not something that is considered to be happening anytime soon. So much on that. On the torus, we are considering to use the same channels to address our customers as we do right now, which is a mix of direct and indirect sales, depends a little bit on the regions in the world.

Justus Wehmer: So much on that. On the TORUS, we are considering to use the same channels to address our customers as we do right now, which is a mix of direct and indirect sales, depends a little bit on the regions in the world.

Speaker #4: But obviously, this is strategically a device that extends our current pure single hardware play into a what we would call a not yet a workflow, but at least a workbench because everywhere where our microscopes are being used, you will find devices that do the application of this torus.

Justus Felix Wehmer: Obviously, this is strategically a device that extends our current pure single hardware play into a, what we would call, not yet a workflow, but at least a workbench. Because everywhere where our microscopes are being used, you will find devices that do the application of this TORUS. With that, I think it's highly complementary. What's also worth mentioning, it comes also with a consumable portion. That means that the end pieces being used on the TORUS are consumables, which, as you also know, strategically, has always been our target to extend our instrument and recurring revenue portion in MCS. Finally, your question on has MCS basically passed the inflection point, and are we more confident going forward? I would say at least the indicators in terms of order book and project pipeline are giving us some reasons to believe that this is the case.

Justus Wehmer: Obviously, this is strategically a device that extends our current pure single hardware play into a, what we would call, not yet a workflow, but at least a workbench. Because everywhere where our microscopes are being used, you will find devices that do the application of this TORUS. With that, I think it's highly complementary. What's also worth mentioning, it comes also with a consumable portion.

Speaker #4: And with that, I think it's highly complementary. And what's also worth mentioning, it comes also with a consumable portion. That means the end pieces being used on the torus are consumables which, as you also know, strategically has always been our target to extend our instrument and recurring revenue portion in MCS.

Justus Wehmer: That means that the end pieces being used on the TORUS are consumables, which, as you also know, strategically, has always been our target to extend our instrument and recurring revenue portion in MCS. Finally, your question on has MCS basically passed the inflection point, and are we more confident going forward? I would say at least the indicators in terms of order book and project pipeline are giving us some reasons to believe that this is the case.

Speaker #4: And finally, your question on has MCS basically passed the inflection point and are we more confident going forward? I would say at least the indicators in terms of order book and project pipeline are giving us some reasons to believe that this is the case.

Justus Felix Wehmer: As we have learned in the last years, you are never safe from tariff discussions or tariff impacts, especially in our core market, US. Generally, Oliver, yes, I would say we are hoping for some reasonable growth next year.

Speaker #4: And as we have learned in the last years, you are never safe from tariff discussions or tariff impacts, especially in our core market, US.

Justus Wehmer: As we have learned in the last years, you are never safe from tariff discussions or tariff impacts, especially in our core market, US. Generally, Oliver, yes, I would say we are hoping for some reasonable growth next year.

Speaker #4: But generally, Oliver, yes, I would say we are hoping for some reasonable growth next year. Yeah.

Speaker #2: Okay. You just let me just build on the second point on the torus. Actually, here on the West Coast, we're just spend some time with one of our larger and actually largest customers and one of our long-standing partners that together with him, we're serving this customer.

Oliver Metzger: Okay.

Andreas Pecher: Justus, let me just build on the second point on the TORUS. Actually, here on the West Coast, we just spent some time with one of our larger, actually largest customers and one of our long-standing partners that together with him, we're serving this customer. He is quite aware of the TORUS. He's very excited actually about it. That's a good signal that this is something that he's really happy to bring into the market. Talking to some of the customers, they're really curious. We have quite some hopes that this will be a good product.

Speaker #2: He is quite aware of the torus. He's very excited actually about it. So that's a good signal that this is something that he's really happy to bring into the market.

Speaker #2: And talking to some of the customers, they're really curious. So we have quite some hopes that this will be a good product. Okay. Great.

Oliver Metzger: Okay, great. Thank you very much.

Speaker #2: Thank you very much.

Operator 1: Thank you. The next question is from Richard Felton from Goldman Sachs. You can go ahead. The floor is yours.

Operator: Thank you. The next question is from Richard Felton from Goldman Sachs. You can go ahead. The floor is yours.

Speaker #1: Thank you. The next question is from Richard Felton from Goldman Sachs. You can go ahead. The floor is yours.

Speaker #2: Thank you very much. Thanks for taking my questions. The first thing I wanted to come back on, you mentioned that there's certain products that are sort of being phased out or wound down as part of the profit up initiatives.

Richard Felton: Thank you very much. Thanks for taking my questions. The first thing I wanted to come back on, you mentioned that there's certain products that are sort of being phased out or wound down as part of the Profit Up initiatives. Do you have any sort of firmer views at this stage of how much of a headwind that's going to be on revenue into 2027, just so we can get models in the right place? Sorry to follow up on the 2027 point again, but we're getting quite a lot of questions from investors on it, so maybe just helpful to clarify. As you head into sort of 2027, I guess, sort of what are the kind of the main building blocks for the bridge for margin?

Speaker #2: Do you have any sort of firmer views at this stage of how much of a headwind that's going to be on revenue into 2027, just so we can get models in the right place?

Speaker #2: And then sorry to follow up on the 2027 point again, but we're getting quite a lot of questions from investors on it. So maybe it's just helpful to clarify.

Richard Felton: Sorry to follow up on the 2027 point again, but we're getting quite a lot of questions from investors on it, so maybe just helpful to clarify. As you head into sort of 2027, I guess, sort of what are the kind of the main building blocks for the bridge for margin?

Speaker #2: But as you head into sort of 27, I guess sort of what are the kind of the main building blocks for the bridge for margin?

Speaker #2: I think you said that on the cost-saving side, you don't really expect to see that much of an impact yet. I guess China refractive remains uncertain.

Richard Felton: I think you said that on the cost-saving side, you don't really expect to see that much of an impact yet. I guess China refractive remains uncertain. VBP potentially unlocks some more bifocal sales. What else should we kind of keep in mind when we're trying to think about numbers heading into 2027? It'd be really helpful just to get a sort of broad view of main drivers as you see them currently. Thank you.

Speaker #2: VBP potentially unlocks some more bifocal sales. What else should we kind of keep in mind when we're trying to think about numbers heading into 2027?

Speaker #2: It'd be really helpful just to get a sort of broad view of main drivers as you see them currently. Thank you.

Justus Felix Wehmer: Richard, of course. Happy to take these questions. On the products that we are taking off, I think you can expect this to be a rather mild impact of anywhere mid to a high single digit EUR million. Because as you just heard, we're talking about instruments predominantly here with Katalyst. From that perspective, it shouldn't be something of material headwind on the top line. Just as a disclaimer, however, all decisions in terms of portfolio alignment or portfolio shaping have not yet been taken. We keep you posted if there was more to come, and if so, what exactly will be the impact. From what we have shared with you here in this call, it's roughly what I said, mid to a high single digit. Building blocks for next year.

Justus Wehmer: Richard, of course. Happy to take these questions. On the products that we are taking off, I think you can expect this to be a rather mild impact of anywhere mid to a high single digit EUR million. Because as you just heard, we're talking about instruments predominantly here with Katalyst. From that perspective, it shouldn't be something of material headwind on the top line.

Speaker #4: Good chat. Of course. Happy to take these questions. So on the products, that we are taking off, I think you can expect this to be a rather mild impact of anywhere mid to high single-digit million.

Speaker #4: Now, because as you just heard, we're re talking about instruments predominantly here with catalyst. And from that perspective, it shouldn't be something of material headwind on the top line.

Speaker #4: Just as a disclaimer, however, the all decisions in terms of portfolio alignment or portfolio shaping have not yet been taken. So we keep you posted if there was more to come and if so, what exactly will be the impact.

Justus Wehmer: Just as a disclaimer, however, all decisions in terms of portfolio alignment or portfolio shaping have not yet been taken. We keep you posted if there was more to come, and if so, what exactly will be the impact. From what we have shared with you here in this call, it's roughly what I said, mid to a high single digit. Building blocks for next year.

Speaker #4: Yeah. But from what we have shared with you here, in this call, it's roughly what I said. Yeah. Mid to high single-digit. Building blocks for next year.

Speaker #4: I mean, if we just look at this year's numbers and look at what are the key distractors, so to speak, then obviously this nightmare of the IOL revocation associated with the scrapping that was necessary that was await that we clearly wouldn't expect to be repeating itself.

Justus Felix Wehmer: If we just look at this year's numbers and look at what are the key distractors, so to speak, obviously this nightmare of the IOL revocation associated with the scrapping that was necessary, that was a weight that we clearly wouldn't expect to be repeating itself. Yes, of course, on the other side, we have the uncertainty of the fee on pricing, and I think it is also fair to assume that it will be a steep impact. On the other side, there's also the volumes associated to it that, like in the first tender that we participated, could potentially then provide some upside for recovery. Will this all come in in 2027? Obviously not so sure. Over the course of two years, I think they are conceptually at least should be an opportunity, and especially with a better ability to plan and schedule.

Justus Wehmer: If we just look at this year's numbers and look at what are the key distractors, so to speak, obviously this nightmare of the IOL revocation associated with the scrapping that was necessary, that was a weight that we clearly wouldn't expect to be repeating itself. Yes, of course, on the other side, we have the uncertainty of the fee on pricing, and I think it is also fair to assume that it will be a steep impact.

Speaker #4: And yes, of course, on the other side, we have the uncertainty of the on pricing. And I think it is also fair to assume that it will be a steep impact.

Speaker #4: But on the other side, there's also the volumes associated to it that, like in the first tender that we participated, could potentially then provide some upside for recovery.

Justus Wehmer: On the other side, there's also the volumes associated to it that, like in the first tender that we participated, could potentially then provide some upside for recovery. Will this all come in in 2027? Obviously not so sure. Over the course of two years, I think they are conceptually at least should be an opportunity, and especially with a better ability to plan and schedule.

Speaker #4: Will this all come in in 27? Obviously, not so sure. But over the course of two years, I think there are conceptually at least should be an opportunity and especially with a better ability to plan and schedule.

Speaker #4: I think the other point that I already mentioned is MCS, that there is some cautious optimism for a better start into the new fiscal year.

Justus Felix Wehmer: The other point that I already mentioned is MCS, that there is some cautious optimism for a better start into the new fiscal year. Obviously, as Andreas just highlighted, the fact that we do have some hopes for this new product giving us a little bit of new upsides and opportunities. Again, I wouldn't generate here too high hopes, but maybe we can be surprised because the reception so far has been very well. We clearly can say that we have a value proposition that is unique, and there is no competitor in the market right now who can offer a device with these three modularities. It is quite a good differentiator.

Justus Wehmer: The other point that I already mentioned is MCS, that there is some cautious optimism for a better start into the new fiscal year. Obviously, as Andreas just highlighted, the fact that we do have some hopes for this new product giving us a little bit of new upsides and opportunities.

Speaker #4: And obviously, as Andreas just highlighted, the fact that we do have some hopes for this new product giving us a little bit of new upsides and opportunities.

Speaker #4: Again, I wouldn't generate here too high hopes, but maybe. Be surprised because the reception so far has been very well. And we clearly can say that we have an value proposition that is unique and there's no competitor in the market right now who can offer a device with this three modularities.

Justus Wehmer: Again, I wouldn't generate here too high hopes, but maybe we can be surprised because the reception so far has been very well. We clearly can say that we have a value proposition that is unique, and there is no competitor in the market right now who can offer a device with these three modularities. It is quite a good differentiator.

Speaker #4: So, it is quite a good differentiator. I think last but not least, I would dare to mention that the exchange rates, after two years being a heavy, heavy headwind for us, right now at least, indications are more reasonable for next year.

Justus Felix Wehmer: Last but not least, I would dare to mention that the exchange rates, after two years being heavy headwind for us, right now at least, indications are more reasonable for next year. The absence of further headwinds from the exchange rate would already also be a meaningful improvement in our P&L. I leave it there. There's a lot of speculation, of course, about refractive and how it ventures and, of course, as you know, that is ultimately always going to be a decisive factor. Being now in the third year of a market in China that has been challenging, but in which we have been able to solidly defend our position, and to defend our margins, at least we have proven that we can cope with it now.

Justus Wehmer: Last but not least, I would dare to mention that the exchange rates, after two years being heavy headwind for us, right now at least, indications are more reasonable for next year. The absence of further headwinds from the exchange rate would already also be a meaningful improvement in our P&L. I leave it there.

Speaker #4: And the absence of further headwinds from the exchange rate would already also be a meaningful improvement in our P&L. And, yeah, I think I'll leave it there.

Justus Wehmer: There's a lot of speculation, of course, about refractive and how it ventures and, of course, as you know, that is ultimately always going to be a decisive factor. Being now in the third year of a market in China that has been challenging, but in which we have been able to solidly defend our position, and to defend our margins, at least we have proven that we can cope with it now.

Speaker #4: There's a lot of speculation, of course, about refractive and how it ventures. And of course, as you know, that is ultimately always going to be a decisive factor.

Speaker #4: But being now in the third year of a market in China, that has been challenging, but in which we have been able to solidly defend our position.

Speaker #4: And to defend our margins, I think at least we have proven that we can cope with it. So I think that's what I, at this point in time, could share with you.

Justus Felix Wehmer: I think that's what I, at this point in time, could share with you.

Justus Wehmer: I think that's what I, at this point in time, could share with you.

Speaker #2: Thanks. That's really helpful.

Richard Felton: Thanks. That's really helpful.

Operator 1: Thank you. The next question is from Falko Friedrichs from Deutsche Bank. You can go ahead. The floor is yours.

Operator: Thank you. The next question is from Falko Friedrichs from Deutsche Bank. You can go ahead. The floor is yours.

Speaker #1: Thank you. The next question is from Falco Friedrichs from Deutsche Bank. You can go ahead. The floor is yours.

Speaker #3: Thank you. Good afternoon. I have two questions, please. The first one, given your comment that you're trending toward the lower end of this year's margin guidance, and it sounds like there is, unlikely going to be a big step up in margins next year either, do you still have an unchanged confidence in delivering this more than 15% margin target in fiscal 28, 29?

Falko Friedrichs: Thank you. Good afternoon. I have two questions, please. The first one, given your comment that you're trending toward the lower end of this year's margin guidance, it sounds like there is unlikely going to be a big step up in margins next year either. Do you still have an unchanged confidence in delivering this more than 15% margin target in fiscal 2028, 2029? Can you just give us a little bit more comfort on the points that are giving you this confidence? Then secondly, a question for Andreas. Are you able to share if the ZEISS Group has already started to increase its shareholding in Carl Zeiss Meditec since the announcement in June? If yes, potentially also give us an indication of the magnitude. Thank you.

Speaker #3: And can you just give us a little bit more comfort on the points that are giving you this confidence? And then secondly, a question for Andreas.

Falko Friedrichs: Can you just give us a little bit more comfort on the points that are giving you this confidence? Then secondly, a question for Andreas. Are you able to share if the ZEISS Group has already started to increase its shareholding in Carl Zeiss Meditec since the announcement in June? If yes, potentially also give us an indication of the magnitude. Thank you.

Speaker #3: Are you able to share if the ZEISS group has already started to increase its shareholding in Carl Zeiss Meditech since the announcement in June?

Speaker #3: And if yes, potentially also give us an indication of the magnitude? Thank you.

Justus Felix Wehmer: Hey, Falko. Let me start with trying to give you a little bit more comfort. In terms of the 15% in 2028, 2029. I think it is clear, in order to achieve this, we need to execute diligently on our Profit Up program. The one message that we want to get across today is that, although obviously we cannot share more details, especially on the headcount reductions, given here the negotiations with the workers' councils, I would already consider it a positive that we are in constructive discussions and negotiations, and we are not seeing here red flags on the, so to speak, on the campus or anything of that nature. I think overall, there's a very reasonable progress.

Justus Wehmer: Hey, Falko. Let me start with trying to give you a little bit more comfort. In terms of the 15% in 2028, 2029. I think it is clear, in order to achieve this, we need to execute diligently on our Profit Up program.

Speaker #4: Hey, Falco, then let me start with trying to give you a little bit more comfort. In terms of the 15% in 28, 29, I think it is clear in order to achieve this, we need to execute diligently on our profit up program.

Speaker #4: And the one message that we want to get across today is that although obviously we cannot share more details, especially on the headcount reductions given here the negotiations with the workers' council, but I would already consider it a positive that we are in constructive discussions and negotiations and we are not seeing here red flags on the, so to speak, on the campus or anything of that nature.

Justus Wehmer: The one message that we want to get across today is that, although obviously we cannot share more details, especially on the headcount reductions, given here the negotiations with the workers' councils, I would already consider it a positive that we are in constructive discussions and negotiations, and we are not seeing here red flags on the, so to speak, on the campus or anything of that nature. I think overall, there's a very reasonable progress.

Speaker #4: So I think overall there's very reasonable progress. And with that, I do hope that we can implement the headcount reductions according to our plans, and we'll see then most likely at the end of next fiscal year, but more accentuated in the fiscal year after, the expected payroll impact.

Justus Felix Wehmer: With that, I do hope that we can implement the headcount reductions according to our plans, and we'll see then, most likely in the end of next fiscal year, but more accentuated in the fiscal year after, the expected payroll impact. That is first of all helping us, of course, on the OpEx. Associated with it, of course, there's a plentitude of other measures that all need some ramp-up timing, but will then also continue to deliver. I think we shared with you last time, the program in itself should have a net impact of EUR 160 million.

Justus Wehmer: With that, I do hope that we can implement the headcount reductions according to our plans, and we'll see then, most likely in the end of next fiscal year, but more accentuated in the fiscal year after, the expected payroll impact. That is first of all helping us, of course, on the OpEx. Associated with it, of course, there's a plentitude of other measures that all need some ramp-up timing, but will then also continue to deliver. I think we shared with you last time, the program in itself should have a net impact of EUR 160 million.

Speaker #4: On, and that is first of all helping us, of course, on the OPEX. Associated with it, of course, there's a plentitude of other measures that all need some ramp-up timing but will then also continue to deliver.

Speaker #4: And I think we shared with you last time the program in itself should have a net impact of 160 million. 160 million on top of a normalized performance given that, as I just outlined, we think that we should eliminate for the next year two of the key headwinds, which is the extraordinary situation of this revocation of a length, basically a part of our core IOL business.

Justus Felix Wehmer: EUR 160 million on top of a normalized performance, given that, as I just outlined, we think that we should eliminate for the next year, two of the key headwinds, which is the extraordinary situation of this revocation of a lens, basically a part of our core IOL business, and the heavy headwinds from exchange rates that in total can also contribute already a meaningful whatever, 2 to 3 percentage points of margin improvements. Yeah. MCS, as I also mentioned, with a somewhat stronger perspective. I think all of that I would right now consider as key components for the associated recovery. As we said, with the institution of a commercial officer and a stronger and more focused Sales push of our entire portfolio and bundling, we are obviously also outside of China expecting over the course of the next two years, some more returns.

Justus Wehmer: EUR 160 million on top of a normalized performance, given that, as I just outlined, we think that we should eliminate for the next year, two of the key headwinds, which is the extraordinary situation of this revocation of a lens, basically a part of our core IOL business, and the heavy headwinds from exchange rates that in total can also contribute already a meaningful whatever, 2 to 3 percentage points of margin improvements.

Speaker #4: And the heavy headwinds from exchange rates in total can also contribute, already, a meaningful—whatever—2 to 3 percentage points of margin improvements. And MCS, as I also mentioned, with a somewhat stronger perspective—I think all of that I would right now consider as key components for the associated recovery.

Justus Wehmer: Yeah. MCS, as I also mentioned, with a somewhat stronger perspective. I think all of that I would right now consider as key components for the associated recovery. As we said, with the institution of a commercial officer and a stronger and more focused Sales push of our entire portfolio and bundling, we are obviously also outside of China expecting over the course of the next two years, some more returns.

Speaker #4: And yeah, and as we said, with the institution of a commercial officer and a stronger and more focused sales push of our entire portfolio and bundling, we are obviously also, outside of China, expecting, over the course of the next two years, some more returns.

Speaker #4: So I leave it there. The whole program is set up of 130 individual measures. We can certainly not cover all of them, but I think the management team of Meditech is fully committed to execute and deliver on it.

Justus Felix Wehmer: I leave it there. The whole program is set up of 130 individual measures. We can certainly not cover all of them. I think the management team of Meditec is fully committed to execute and deliver on it. Whatever happens outside is one thing, but we will certainly ensure that we get the contribution out of the program. I think then the question was to Andreas.

Justus Wehmer: I leave it there. The whole program is set up of 130 individual measures. We can certainly not cover all of them. I think the management team of Meditec is fully committed to execute and deliver on it. Whatever happens outside is one thing, but we will certainly ensure that we get the contribution out of the program. I think then the question was to Andreas.

Speaker #4: And then whatever happens outside is one thing, but we will certainly ensure that we get the contribution out of the program. And I think then the question was to Andreas.

Speaker #4: Yeah.

Speaker #2: Yeah. I'll take the second one. Thank you, Falco. Maybe just one last little bit of flavor on the profit up. You just mentioned it, right?

Andreas Pecher: Yeah. I'll take the second one. Thank you, Falko. Maybe just one last little bit of flavor on the Profit Up. You just mentioned it, right? The management team is very focused on that program. The intensity and the focus on operational execution is quite strong. I think that's specifically where the program where, of course, it takes a little bit to have the measures come in. This is what I typically look at very closely. How do we track? How do we work on it? If there are setbacks, how do we deal with it? I certainly see a lot of seriousness, a lot of focus on that. That makes me quite confident that we will get to what we want to achieve. Maybe coming to your second question on the share buyback. Well, we had the announcement, right?

Speaker #2: The management team is very focused on that program and the intensity and the focus on operational execution is quite strong. And I think that's specifically what the program where, of course, it takes a little bit to have the measures come in.

Andreas Pecher: This is what I typically look at very closely. How do we track? How do we work on it? If there are setbacks, how do we deal with it? I certainly see a lot of seriousness, a lot of focus on that. That makes me quite confident that we will get to what we want to achieve. Maybe coming to your second question on the share buyback. Well, we had the announcement, right?

Speaker #2: This is what I typically look at very closely. How do we track it, how do we work on it? And if there are setbacks, how do we deal with them?

Speaker #2: I certainly see a lot of seriousness, a lot of focus on that. That makes me quite confident that we will get to what we want to achieve.

Speaker #2: And maybe coming to your second question on the share buyback, well, I mean, we had the announcement, right? That we wanted to have a buyback of less than 200 million euros.

Andreas Pecher: That we wanted to have a buyback of less than EUR 200 million, and stay below the 70% holding. Well, I don't have any knowledge about the percentage of purchased shares right now. We intentionally set it up that way, right? To have the fairness to all the investors. Maybe to give you the flavor there, it's an 8 months period from mid-June till the end of February. So far, 1.5 months have passed on that. That's the facts that I know. The rest, I don't know. I hope that helps you a little bit, Falko.

Speaker #2: And as they below the 70% holding, and well, I mean, I don't have any knowledge about the percentage of purchased shares right now. We intentionally set it up that way, right, to have the fairness to all the investors.

Speaker #2: Maybe to give you the flavor there, I mean, it's an eight-month period from mid-June till the end of February. And so far, one and a half months have passed on that.

Speaker #2: That's the facts that I know. The rest I don't know. I hope that helps you a little bit, Falco.

Speaker #3: Yes, it does. Thank you.

Falko Friedrichs: Yes, it does. Thank you.

Speaker #1: Thank you very much. And the next question is from Antja Verma from J.P. Morgan. You can go ahead, your line is open.

Operator 1: Thank you very much. The next question is from Anchal Verma from J.P. Morgan. You can go ahead. Your line is open.

Operator: Thank you very much. The next question is from Anchal Verma from J.P. Morgan. You can go ahead. Your line is open.

Anchal Verma: Hi, good afternoon. Just two questions from me, please. The first one, I'm sorry, this is on 2027 again. Just to follow up on your thoughts around how we should be thinking of the phasing into next year. Do you believe it could be a softer start given the market dynamics are weak? Essentially another H2-weighted year, or shall we think of the easier comps in H1 as favorable? The second question is a follow-up on the Chinese refractive trends. When Aier Hospital reported recently, they were pointing to weak June refractive data partly because of the changes in the application process for the military students. How would you extrapolate that on an annual basis? Should we think of it as demand lost? Or is it demand delayed? Thank you.

Speaker #5: Hi, good afternoon. Just two questions for me, please. The first one, and sorry, this is on 2027 again. Just to follow up on your thoughts around how we should be thinking of the phasing into next year.

Speaker #5: Do you believe it could be a softer start given the market dynamics are weak? So essentially another H2 weighted year, or shall we think of the easier comps in H1 as favorable?

Speaker #5: And the second question is a follow-up on the Chinese refractive trends. When IR Hospital reported recently, they were pointing to weak June refractive data partly because of the changes in the application process for the military students.

Anchal Verma: The second question is a follow-up on the Chinese refractive trends. When Aier Hospital reported recently, they were pointing to weak June refractive data partly because of the changes in the application process for the military students. How would you extrapolate that on an annual basis? Should we think of it as demand lost? Or is it demand delayed? Thank you.

Speaker #5: How would you extrapolate that on an annual basis? Should we think of it as demand lost, or is it demand delayed? Thank you.

Justus Felix Wehmer: Starting into next fiscal year, Anchal, typically, as you know, Q4 is the strongest. I think for the 8 years that I'm here, Q1 has always been the softest quarter. I would basically expect that to be fairly similar. The question is, how deep is the trough? At this point in time, at least, I do have a little bit of optimism that the trough won't be that deep as it was last year, because last year was a coincidence of I think two specific factors, both China and the US at the same time, but for different reasons, basically guiding significantly lower into the year. That, as you know, triggered then ultimately also our profit warning. Therefore, I am somewhat more confident that we see a better start into this year.

Justus Wehmer: Starting into next fiscal year, Anchal, typically, as you know, Q4 is the strongest. I think for the 8 years that I'm here, Q1 has always been the softest quarter. I would basically expect that to be fairly similar. The question is, how deep is the trough?

Speaker #4: Starting to next fiscal year, I mean, I'm sure typically, as you know, Q4 is the strongest and I think for the eight years that I'm here, Q1 has always been the softest quarter.

Speaker #4: And I would basically expect that to be fairly similar. The question is how deep is the trough and at this point in time at least, I do have a little bit of optimism that the trough won't be that deep as it was last year because last year was a coincidence of, I think, two specific factors, both China and the US at the same time, but for different reasons.

Justus Wehmer: At this point in time, at least, I do have a little bit of optimism that the trough won't be that deep as it was last year, because last year was a coincidence of I think two specific factors, both China and the US at the same time, but for different reasons, basically guiding significantly lower into the year. That, as you know, triggered then ultimately also our profit warning. Therefore, I am somewhat more confident that we see a better start into this year.

Speaker #4: Basically, guiding significantly lower into the year, and that, as you know, triggered then ultimately also our profit warning. So, therefore, I am somewhat more confident that we see a better start into this year.

Justus Felix Wehmer: China refractive and what you were saying about the military demand, it may be slightly lower in 2026 due to less recruiting, but there's really not good data on it. I really don't want to speculate on what it ultimately means. We have actually been surprised by it in 2 years to some extent, yeah. That means it is not as trivial to predict on that properly and correctly. Therefore, I would refrain from that here today, too.

Justus Wehmer: China refractive and what you were saying about the military demand, it may be slightly lower in 2026 due to less recruiting, but there's really not good data on it. I really don't want to speculate on what it ultimately means. We have actually been surprised by it in 2 years to some extent, yeah. That means it is not as trivial to predict on that properly and correctly. Therefore, I would refrain from that here today, too.

Speaker #4: China refractive and what you were saying about the military demand, it may be slightly lower in 2026 due to less recruiting. But there's really not good data on it.

Speaker #4: So I really don't want to speculate on what it ultimately means. We have actually been surprised by it in two years, to some extent.

Speaker #4: Yeah. And that means it is not as trivial to predict on that properly and correctly. So therefore, I would refrain from that here today too.

Speaker #5: Perfect. Thank you.

Anchal Verma: Perfect. Thank you.

Operator 1: Very much. The next question is from Susannah Ludwig from Bernstein. You can go ahead. Your line is open.

Operator: Very much. The next question is from Susannah Ludwig from Bernstein. You can go ahead. Your line is open.

Speaker #1: Very much. And the next question is from Susanna Ludwig from Bernstein. You can go ahead, your line is open.

Susannah Ludwig: Good afternoon, thanks for taking my questions. I have two, please. I guess first on your midterm guidance of 15%, to what extent do you need refractive procedures in China and APAC to recover from the current lower levels to hit that target? Or maybe another way of asking is, what level of growth in China refractive is baked into that 15% margin? Then, are you able to quantify the EBIT headwinds this year from the lens revocation in China so we can think about the benefit in 2027, assuming VBP comes in at the end of this year?

Speaker #5: Good afternoon, and thanks for taking my questions. I have two, please. I guess first, on your midterm guidance of 15%: to what extent do you need refractive procedures in China and APAC to recover from the current lower levels to hit that target?

Speaker #5: Or maybe another way of asking is what level of growth in China refractive is baked into that 15% margin? And then are you able to quantify the EBIT headwinds this year from the lens revocation in China so we can think about the benefit in 2027 assuming VBP comes in at the end of this year?

Justus Felix Wehmer: I can start on the first question. The second part of the question, simply because of the audio quality, I couldn't fully understand, you can repeat that later, maybe, Suzanne. Midterm, what is it? What kind of growth we would anticipate or hope for in China to get to the 15%? I'd say probably a mild, anywhere low to mid-single-digit percentage rate would be a good tailwind for us, generating volume and the associated margin that certainly would help us on the journey to the 15%. Is it reasonable or unreasonable to expect for that?

Justus Wehmer: I can start on the first question. The second part of the question, simply because of the audio quality, I couldn't fully understand, you can repeat that later, maybe, Suzanne. Midterm, what is it? What kind of growth we would anticipate or hope for in China to get to the 15%? I'd say probably a mild, anywhere low to mid-single-digit percentage rate would be a good tailwind for us, generating volume and the associated margin that certainly would help us on the journey to the 15%. Is it reasonable or unreasonable to expect for that?

Speaker #4: question. The second part of the question, I couldn't simply because of the audio quality, I couldn't fully understand. But you can repeat that later maybe, Susan.

Speaker #4: So midterm, what is it? What kind of growth we would anticipate or hope for in China to get to the 15%? I'd say probably a mild anywhere low to mid-single digit percentage rate would be a good tailwind for us.

Speaker #4: And generating volume and the associated margin that certainly would help us on that on the journey to the 15%. So is it reasonable or unreasonable to expect for that?

Speaker #4: I think we have shared with you in former earnings calls that we clearly believe that there is still a pretty high untapped market in China for myopia treatment.

Justus Felix Wehmer: I think we have shared with you in former earnings calls that we clearly believe that there is still a pretty high untapped market in China for myopia treatment on the one end side, secondly, we still perceive presbyopia treatments as an opportunity, that is actually part of our Profit Up program to push that stronger, invest into this market segment, which we feel is utterly underserved, that could basically provide some additional contributions, even if in the myopic field, the growth rate wouldn't track to what I just said. Now maybe your second question, if you can repeat it once more. I was not clear whether I fully understood it.

Justus Wehmer: I think we have shared with you in former earnings calls that we clearly believe that there is still a pretty high untapped market in China for myopia treatment on the one end side, secondly, we still perceive presbyopia treatments as an opportunity, that is actually part of our Profit Up program to push that stronger, invest into this market segment, which we feel is utterly underserved, that could basically provide some additional contributions, even if in the myopic field, the growth rate wouldn't track to what I just said.

Speaker #4: On the one hand, and secondly, we still perceive presbyopia treatments as an opportunity, and that is actually part of our profit-up program to push that stronger.

Speaker #4: Best into this market segment, which we feel is utterly underserved and that could basically provide some additional contributions even if in the myopic field, the growth rate wouldn't track to what I just said.

Speaker #4: And now maybe your second question, if you can repeat it once more. I was not clear whether I fully understood it.

Justus Wehmer: Now maybe your second question, if you can repeat it once more. I was not clear whether I fully understood it.

Speaker #5: Yeah, sure. And thanks, sir, the color on the first question. The second question is if you could quantify the EBITDA headwind from the bifocal lens revocation in China, this year, just because it helps us think about the benefit for next year because you highlighted that as something that helps is that sort of profit coming back or at least partially.

Susannah Ludwig: Yeah, sure. Thanks for the color on the first question. The second question is, if you could quantify the EBITDA headwind from the bifocal lens revocation in China this year, just because it helps us think about the benefit for next year, because you highlighted that as something that helps. Is that sort of profit coming back, or at least partially?

Justus Felix Wehmer: I think we actually gave you some color on it in the last earnings call, it is clearly, in terms of top line, in the neighborhood of roughly EUR 30 million, with a very healthy margin associated to it, that certainly brings you also to a bottom-line headwind that is significant. Our average margins on the premium lenses is clearly tracking higher than our average margin, and that gives you an indication what was the bottom line headwind.

Speaker #4: So I think we actually gave you some color on it in the last earnings call, but it is clearly in terms of top line in the neighborhood of roughly 30 million and with a very healthy margin associated to it, that certainly brings you also to a bottom line headwind that is significant.

Justus Wehmer: I think we actually gave you some color on it in the last earnings call, it is clearly, in terms of top line, in the neighborhood of roughly EUR 30 million, with a very healthy margin associated to it, that certainly brings you also to a bottom-line headwind that is significant. Our average margins on the premium lenses is clearly tracking higher than our average margin, and that gives you an indication what was the bottom line headwind.

Speaker #4: Yeah. So our average margins on the premium lenses is clearly tracking higher than our average margin and that gives you an indication of what was the bottom line headwind.

Speaker #5: Great. Thank you.

Susannah Ludwig: Great. Thank you.

Speaker #1: Thank you. And the next question is from David Marcheson from Equita. You can go ahead, the floor is yours.

Operator 1: Thank you. The next question is from David Murchison from Equita. You can go ahead. The floor is yours.

Operator: Thank you. The next question is from David Murchison from Equita. You can go ahead. The floor is yours.

David Murchison: Hi, good afternoon, everybody. I have three questions, the first one is a follow-up, a clarification regarding tariffs refund. Because in the press release, I saw the EUR 11.5 million refund, but I didn't see the other EUR 9 million tariffs refund. Is it correct so that you included the EUR 9 million tariffs refund in your adjusted EBITDA, and that it is included in your full-year guidance? The second question regarding the Chinese refractive market. You said that you are aiming to achieve a low single-digit growth, I think in Q4 of the year, despite a market being down around 5% in July. Is it correct that you are targeting low single-digit growth in Q4 of the year, or you are referring to the full year? The third question regarding the gross cost savings.

Davide Marchesin: Hi, good afternoon, everybody. I have three questions, the first one is a follow-up, a clarification regarding tariffs refund. Because in the press release, I saw the EUR 11.5 million refund, but I didn't see the other EUR 9 million tariffs refund. Is it correct so that you included the EUR 9 million tariffs refund in your adjusted EBITDA, and that it is included in your full-year guidance?

Speaker #2: Hi. Good afternoon, everybody. I have three questions. And the first one is a follow-up, a clarification regarding tariffs refund. Because in the press release, I saw the 11.5 million refund, but I didn't see the other 9 million tariffs refund.

Speaker #2: So is it correct so that you included the 9 million tariffs refund in your adjusted EBITDA and did it include in your fuller guidance?

Speaker #2: The second question regarding the Chinese refractive market. You said that you are aiming to achieve a low single digit growth. I think in the last quarter of the year, despite a market being down around 5% in July, so is it correct that you are targeting low single digit growth in the last quarter of the year or you are referring to the full year?

Davide Marchesin: The second question regarding the Chinese refractive market. You said that you are aiming to achieve a low single-digit growth, I think in Q4 of the year, despite a market being down around 5% in July. Is it correct that you are targeting low single-digit growth in Q4 of the year, or you are referring to the full year? The third question regarding the gross cost savings.

Speaker #2: And the third question regarding the gross cost savings. So you're targeting to achieve 200 million cost savings over the next I assume three years while on the other hand, you are targeting to have an increase of infrastructure cost in the region of 40 million is it fair to assume that next year, so in 2027, the cost savings will be at least enough to set the increase of the infrastructure cost?

David Murchison: You are targeting to achieve EUR 200 million cost savings over the next, I assume, 3 years. While on the other hand, you are targeting to have an increase of infrastructure cost in the region of EUR 40 million. Is it fair to assume that next year, so in 2027, the cost savings will be at least enough to offset the increase of the infrastructure cost? Thank you very much.

Davide Marchesin: You are targeting to achieve EUR 200 million cost savings over the next, I assume, 3 years. While on the other hand, you are targeting to have an increase of infrastructure cost in the region of EUR 40 million. Is it fair to assume that next year, so in 2027, the cost savings will be at least enough to offset the increase of the infrastructure cost? Thank you very much.

Speaker #2: Thank you very much.

Speaker #4: And David, thank you. Questions. So, the clarification on the tariffs: the $9 million is what has been associated with revenues in this fiscal year.

Justus Felix Wehmer: David, thank you. Good questions. The clarification on the tariff, the EUR 9 million is what has been associated to revenues in this fiscal year. Therefore, has been shown not as an extraordinary income, but ultimately it's an operating income. That's why we have the separation and the EUR 11.5 million refer to revenues from previous year, and therefore, in terms of accounting standards, it must be considered and shown as extraordinary. That is what I can confirm with regards to that question. On China refractive, again, to clarify what I meant with low single-digit growth, first of all, this refer to where we are after 9 months. I think given that we are currently seeing a somewhat softer development going into Q4, I would clearly say that for the full year, a low single-digit growth would be probably more reasonable.

Justus Wehmer: David, thank you. Good questions. The clarification on the tariff, the EUR 9 million is what has been associated to revenues in this fiscal year. Therefore, has been shown not as an extraordinary income, but ultimately it's an operating income. That's why we have the separation and the EUR 11.5 million refer to revenues from previous year, and therefore, in terms of accounting standards, it must be considered and shown as extraordinary.

Speaker #4: And therefore has extraordinary income but ultimately it's an operating income. And that's why we had the separation and the 11.5 million refer to revenues from previous year and therefore in terms of accounting standards, it must be considered and shown as extraordinary so that is what I can confirm with regards to that question.

Justus Wehmer: That is what I can confirm with regards to that question. On China refractive, again, to clarify what I meant with low single-digit growth, first of all, this refer to where we are after 9 months. I think given that we are currently seeing a somewhat softer development going into Q4, I would clearly say that for the full year, a low single-digit growth would be probably more reasonable.

Speaker #4: On China refractive again, to clarify, what I meant with low single digit growth, then first of all, this refer to where we are after nine months.

Speaker #4: And I think given that we are currently seeing a somewhat softer development going into Q4, I would clearly say that for the full year, a low single digit growth would be probably more reasonable whether it's going to be further melt down or not.

Justus Felix Wehmer: Whether it's going to be further meltdown or not, obviously that remains to be seen. I clearly wanted not to be understood that we expect a low single-digit growth in Q4 for our refractive business in China. On the gross savings, your assumption of next year that potentially savings are roughly on a level that is close to what we will incur as expenses associated to the program that we have mentioned in our last call. I think from our models, at least, we would probably say that this is a reasonable assumption.

Justus Wehmer: Whether it's going to be further meltdown or not, obviously that remains to be seen. I clearly wanted not to be understood that we expect a low single-digit growth in Q4 for our refractive business in China. On the gross savings, your assumption of next year that potentially savings are roughly on a level that is close to what we will incur as expenses associated to the program that we have mentioned in our last call. I think from our models, at least, we would probably say that this is a reasonable assumption.

Speaker #4: Obviously, that remains to be seen. But I clearly wanted not to be understood that we expect a low single digit growth in Q4 for our refractive business in China.

Speaker #4: And on the gross savings, you're assumption of next year that potentially savings are roughly kind of on a level will incur as expenses for the from the headwinds that we had not the headwind, sorry, but for the expenses associated to the program.

Speaker #4: That we have mentioned in our last call. Yeah, I think from. Our models at least, we would probably say that this is a reasonable assumption.

Speaker #4: Yeah.

Speaker #2: Thank you.

David Murchison: Thank you.

Davide Marchesin: Thank you.

Speaker #1: Thank you very much. The next question is from Julian Odor from Bank of America. You can go ahead now.

Operator 1: Thank you very much. The next question is from Juliano Dor from Bank of America. You can go ahead now.

Operator: Thank you very much. The next question is from Juliano Dor from Bank of America. You can go ahead now.

Juliano Dor: Hi. Good afternoon. Thanks a lot for taking my questions. I have three things. The first one, could you just update us on the VBP assumptions you have in terms of price cuts? I think in the past, you mentioned the fiercer competition. Has it changed recently, and do you still expect a pretty nasty one? Secondly, could you just comment about what you're seeing in the US IOL markets, maybe just in terms of procedure growth, in terms of competitive dynamic? That would be helpful. The third one is, I'm just wondering if you factored in any potential headwind from new competition in, let's say, in refractive space in China specifically for either 2027 or for your 2029 targets.

Julien Ouaddour: Hi. Good afternoon. Thanks a lot for taking my questions. I have three things. The first one, could you just update us on the VBP assumptions you have in terms of price cuts? I think in the past, you mentioned the fiercer competition. Has it changed recently, and do you still expect a pretty nasty one?

Speaker #6: Hi. Good afternoon. Thanks a lot for taking my questions. I have three the first one, could you just the data on the VEP assumptions you have in terms of price cuts?

Speaker #6: I think in the past you mentioned the fiercer competition. I mean, has it changed recently and do you still expect a pretty nasty one?

Speaker #6: Then secondly, could you just comment about what you're seeing in the US IOL market, maybe just in terms of procedure growth, in terms of competitive dynamic?

Julien Ouaddour: Secondly, could you just comment about what you're seeing in the US IOL markets, maybe just in terms of procedure growth, in terms of competitive dynamic? That would be helpful. The third one is, I'm just wondering if you factored in any potential headwind from new competition in, let's say, in refractive space in China specifically for either 2027 or for your 2029 targets.

Speaker #6: That would be helpful. And the third one is, I mean, I'm just wondering if you factored in any potential headwind from new competition in, let's say, in refractive space in China specifically for either 2027 or for your 2029 targets.

Speaker #6: And I mean, do you think you will be able to keep either the peak volume market share you have right now or the price intact when the new entrants are there?

Juliano Dor: Do you think you will be able to keep your either the peak volume market share you have right now or the price intact when the new entrants will be there? I'm just asking because the consumables are tied with a very high profitability profile for refractive and any impact on either volume or prices will have probably a pretty nasty impact on the margin assumptions. Thank you.

Julien Ouaddour: Do you think you will be able to keep your either the peak volume market share you have right now or the price intact when the new entrants will be there? I'm just asking because the consumables are tied with a very high profitability profile for refractive and any impact on either volume or prices will have probably a pretty nasty impact on the margin assumptions. Thank you.

Speaker #6: I'm just asking because I mean, the concepts are tied with a very high profitability profile for refractive and any impact on either volume or prices will have probably a pretty nasty impact on the marginal assumptions.

Speaker #6: Thank you.

Speaker #4: Yeah, Juliano. Thank you for your questions. And so VVP assumptions, actually not much more to share, nothing has changed in terms of our expectations.

Justus Felix Wehmer: Yeah. Juliano, thank you for your questions. VBP assumptions, actually not much more to share. Nothing has changed in terms of our expectations. From all what we know, there will be more Chinese contenders and also in the premium segment. Therefore, we would expect at least, I'd say, evenly harsh impact than what we have seen in the first round. On the other side, maybe on a positive note, we have gone through the sampling by the Chinese authorities and have been fully approved and qualified to participate with our product portfolio. I don't want to speculate here, but at least from our understanding, all contenders must actually be approved through this sampling, and it remains to be seen whether everybody will actually get that approval.

Justus Wehmer: Yeah. Juliano, thank you for your questions. VBP assumptions, actually not much more to share. Nothing has changed in terms of our expectations. From all what we know, there will be more Chinese contenders and also in the premium segment. Therefore, we would expect at least, I'd say, evenly harsh impact than what we have seen in the first round.

Speaker #4: There will be from all what we know there will be more Chinese contenders and also in the premium segment. So therefore we would expect at least, I'd say evenly harsh impact than what we have seen in the first round.

Justus Wehmer: On the other side, maybe on a positive note, we have gone through the sampling by the Chinese authorities and have been fully approved and qualified to participate with our product portfolio. I don't want to speculate here, but at least from our understanding, all contenders must actually be approved through this sampling, and it remains to be seen whether everybody will actually get that approval.

Speaker #4: On the other side, maybe on a positive note, we have gone through the sampling by the Chinese authorities and have been fully approved and qualified to participate with our product portfolio.

Speaker #4: And I don't want to speculate here, but at least from our understanding, all contenders must actually be approved through this sampling. And it remains to be seen whether everybody will actually get that approval.

Speaker #4: So from that perspective, my only message is there's so much uncertainty associated with it that we do not have another model, and it remains along the lines of what I just said.

Justus Felix Wehmer: From that perspective, my only message is, there's so much uncertainty associated with it that we do not have another model, and it remains along the lines of what I just said. The US IOL market dynamics, maybe just to clarify again, this market is one where we, I think as frequently discussed in these calls, where to this date, we not really have yet conquered a meaningful stake. Therefore, in terms of dynamics, for us, it means we clearly have to wait for the completion of our lens portfolio, and we do expect by H2 of next year, then finally, the approval of the hydrophobic trifocal lens that will be a meaningful change in our offering and will allow us to start bundling a more reasonable portfolio, having then a monofocal and a trifocal hydrophobic lens.

Justus Wehmer: From that perspective, my only message is, there's so much uncertainty associated with it that we do not have another model, and it remains along the lines of what I just said. The US IOL market dynamics, maybe just to clarify again, this market is one where we, I think as frequently discussed in these calls, where to this date, we not really have yet conquered a meaningful stake.

Speaker #4: The US IOL market dynamics—maybe just to clarify again, this market is one where, I think, as frequently discussed in these calls, where to this date we have not really yet conquered a meaningful stake. Therefore, in terms of dynamics...

Justus Wehmer: Therefore, in terms of dynamics, for us, it means we clearly have to wait for the completion of our lens portfolio, and we do expect by H2 of next year, then finally, the approval of the hydrophobic trifocal lens that will be a meaningful change in our offering and will allow us to start bundling a more reasonable portfolio, having then a monofocal and a trifocal hydrophobic lens.

Speaker #4: For us, it means we clearly have to wait for the completion of our lens portfolio, and we do expect, by the second half of next year, the final approval of the hydrophobic trifocal lens. That will be a meaningful change in our offering and will allow us to start bundling a more reasonable portfolio.

Speaker #4: Having then a monofocal and a trifocal hydrophobic lens but other than that. Dynamics, I think there is other market contenders who can speak more how should I with more competence on it.

Justus Felix Wehmer: Other than that dynamics, I think there is other market contenders who can speak more, how should I say? With more competence on it. New competition in China. Yeah, you're absolutely correct. We are expecting a new competition to enter, and as you can imagine, what we have just spoken about today with our strategic partner, Aier Group, and the installation of another 25 lasers. The idea is, of course, to fill the market as good as possible before anybody else with a reasonable offering and a solid technology can offer the market. We do clearly have in our midterm planning, the expectations that we'll have to deal with headwinds when it comes to margin realization.

Justus Wehmer: Other than that dynamics, I think there is other market contenders who can speak more, how should I say? With more competence on it. New competition in China. Yeah, you're absolutely correct. We are expecting a new competition to enter, and as you can imagine, what we have just spoken about today with our strategic partner, Aier Group, and the installation of another 25 lasers.

Speaker #4: New competition in China—yeah, you're absolutely correct. We are expecting new competition to enter, and as you can imagine, what we have just spoken about today with our strategic partner, AR Group, and the installation of another 25 lasers—the idea is, of course, to fill the market as well as possible before anybody else with a reasonable offering and solid technology can offer the market.

Justus Wehmer: The idea is, of course, to fill the market as good as possible before anybody else with a reasonable offering and a solid technology can offer the market. We do clearly have in our midterm planning, the expectations that we'll have to deal with headwinds when it comes to margin realization.

Speaker #4: We do clearly have in our midterm planning the expectations that we are will have to deal with headwinds. When it comes to margin, realization, but I think today too early to tell or disclose your details because again here the question is what will a new competitor ultimately in terms of procedures what will that company actually be offering?

Justus Felix Wehmer: I think today, too early to tell or disclose here details, because again, here, the question is: what will a new competitor ultimately, in terms of procedures, what will that company actually be offering? Is it comparable to SMILE? Is it more a flap cutting process? Will they have the ability to support the application in the field, which we have learned over the last decade is a key factor, and obviously being able to service 24/7 the systems in the field. There's more to it than just having a technology, and that I think remains to be seen what will be then ultimately the character of the launch and how fast it will be changing the market dynamics. Thank you.

Justus Wehmer: I think today, too early to tell or disclose here details, because again, here, the question is: what will a new competitor ultimately, in terms of procedures, what will that company actually be offering? Is it comparable to SMILE?

Speaker #4: Is it comparable to SMILE? Is it more a flat cutting process? Will they have the ability to support the application in the field which we have learned over the last decade is a key factor and obviously being able to service 24/7 the systems in the field so there's more to it than just having a technology and that I think remains to be seen what will be then ultimately the character of the launch and how fast it will be changing the market dynamics.

Justus Wehmer: Is it more a flap cutting process? Will they have the ability to support the application in the field, which we have learned over the last decade is a key factor, and obviously being able to service 24/7 the systems in the field. There's more to it than just having a technology, and that I think remains to be seen what will be then ultimately the character of the launch and how fast it will be changing the market dynamics. Thank you.

Speaker #4: Thank you.

Speaker #6: Perfect. Thanks. Thanks a lot.

Juliano Dor: Perfect. Thanks a lot.

Julien Ouaddour: Perfect. Thanks a lot.

Sebastian Frericks: There's a question from UBS, Graham from UBS. You had some technical difficulties, therefore, I will read the question. Two questions, actually. I believe the second one has partially been answered, but I'll read both of them just in case. First one, should we model refractive China down in Q4 given exit rate, which I understand was down high single digits? Second question, can you grow EBIT next year given the tariff refund headroom next year versus this year? The cost savings are more back-end loaded. Is next year essentially a consolidation year?

Speaker #5: Hey, there's a question from Graham at UBS. You had some technical difficulties, so I will read the question. There are actually two questions; I believe the second one has partially been answered, but I'll read both of them just in case.

Speaker #5: First one, should we model refractive China down into four given exit rate, which I understand was down high single digits? And second question, can you grow EBIT next year given the tariff refund headwind next year versus this year?

Speaker #5: And the cost savings are more backend loaded so is next year essentially a consolidation year?

Justus Felix Wehmer: Model refractive in China down in terms of revenues. I think I tried as good as I can, Graham, to provide you with the data that we have on hand. They are, as just said, indicating at least June and July, somewhat softer. We have seen, however, years in the past where we had then a rather strong peak later in the season. There's always a bit of a seasonality within the seasonality, so to speak. I would not yet completely give up on it, but I think the key message here today is do not expect any miracles in terms of a big boost for the summer peak. If that was the case, I think then we probably would have seen other numbers here in July.

Justus Wehmer: Model refractive in China down in terms of revenues. I think I tried as good as I can, Graham, to provide you with the data that we have on hand. They are, as just said, indicating at least June and July, somewhat softer. We have seen, however, years in the past where we had then a rather strong peak later in the season.

Speaker #4: Model refractive in China down in terms of revenues I think I tried as good as I can, Graham, to provide you with the data that we have on hand and they are as just said indicating at least June and July somewhat softer.

Speaker #4: We have seen however years in the past where we had then a rather stronger peak later in the season and there's always a bit of a seasonality within the seasonality so to speak.

Justus Wehmer: There's always a bit of a seasonality within the seasonality, so to speak. I would not yet completely give up on it, but I think the key message here today is do not expect any miracles in terms of a big boost for the summer peak. If that was the case, I think then we probably would have seen other numbers here in July.

Speaker #4: So I would not yet completely give up on it, but I think the key message here today is do not expect any miracles. In terms of a big boost for the summer peak if that was the case I think then we probably would have seen other numbers here in July.

Speaker #4: On your question next year consolidation year, I would tend to say and again building on the impacts of the and the backend loaded program profit up program, I would tend to agree with you that we are clearly aiming for some margin improvement next year, but clearly not on a linear projection from here to the 15% target.

Justus Felix Wehmer: On your question, next year consolidation year, I would tend to say. Again, building on the impacts of the back-end loaded program, Profit Up program, I would tend to agree with you that we are clearly aiming for some margin improvement next year, but clearly not on a linear projection from here to the 15% target. I hope that gives you a little bit of flavor. Thank you.

Justus Wehmer: On your question, next year consolidation year, I would tend to say. Again, building on the impacts of the back-end loaded program, Profit Up program, I would tend to agree with you that we are clearly aiming for some margin improvement next year, but clearly not on a linear projection from here to the 15% target. I hope that gives you a little bit of flavor. Thank you.

Speaker #4: I hope that gives you a little bit of flavor. Thank you.

Operator 1: At the moment, there seem to be no further questions in the line.

Operator: At the moment, there seem to be no further questions in the line.

Speaker #1: The moment there seem to be no further questions in the line.

Speaker #5: Okay, then thank you very much to everybody for joining the call. The IR team will be available for follow-up questions over the next few days.

Sebastian Frericks: Okay. Thank you very much, everybody, for joining the call. The IR team will be available for follow-up questions next few days. Enjoy the summer break, everybody. We'll be on the road again in September and talking to many of you. Look forward to the discussions we have into the critical year-end phase. Yeah, looking forward to being in touch. Thank you very much, everybody.

Speaker #5: Enjoy the summer break everybody and we'll be on the road again in September and talking to many of you so look forward to the discussions we had into the critical year-end phase.

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Q3 2026 Carl Zeiss Meditec AG Earnings Call

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