Half Year 2026 Ottobock SE & Co KgaA Earnings Call

August 13, 2026

[Company Representative] (Ottobock): Welcome to Ottobock conference call following the publication of our financial results for H1 2026. Today's speakers are Oliver Jakobi, CEO, and Dr. Arne Kreitz, CFO of Ottobock. Before we start the presentation, please note that the call will be recorded. After the presentation, we will open the line for questions. If you wish to ask a question, please use the raise hand function at the bottom of your Zoom screen. If you dialed in via phone, please press star nine on your telephone keypad to ask a question. Further instructions regarding the Q&A session will be provided later by the moderator. With that, I hand over to you, Oliver.

Operator: Welcome to Ottobock conference call following the publication of our financial results for H1 2026. Today's speakers are Oliver Jakobi, CEO, and Dr. Arne Kreitz, CFO of Ottobock. Before we start the presentation, please note that the call will be recorded. After the presentation, we will open the line for questions. If you wish to ask a question, please use the raise hand function at the bottom of your Zoom screen. If you dialed in via phone, please press star nine on your telephone keypad to ask a question. Further instructions regarding the Q&A session will be provided later by the moderator. With that, I hand over to you, Oliver.

Speaker #1: Welcome to Ottobock's conference call following the publication of our financial results for the first half of 2026. Today's speakers are Oliver Jacobi, CEO, and Dr. Anna Kreitz, CFO of Ottobock.

Speaker #1: Before we start the presentation, please note that the call will be recorded. After the presentation, we will open the line for questions. If you wish to ask a question, please use the raise-hand function at the bottom of your Zoom screen.

Speaker #1: And if you dialed in via phone, please press *9 on your telephone keypad to ask a question. Further instructions regarding the Q&A session will be provided later by the moderator.

Speaker #1: And with that, I hand over to you, Oliver.

Oliver Jakobi: Yeah, thank you. Also from my side, a warm welcome from Duderstadt. Let me start with the headline. Strategically and operationally, we are fully on track. In Q2, we have seen a strong demand in our key markets. The timing effects we have seen beginning of the year are normalized now. Second key message we want to deliver is our organic core revenue. We grew with 6.7% in H1, with 8% in Q2. This is driven by EMEA on a broad base, as well in B2B, as well as in B2C. The underlying EBITDA margin improved even more strong than the revenue. We are now on 25.3% in Q2, 27.9%. On the M&A side, we also fulfilled our plan. We acquired one technology company, Fesia, functional electrical stimulation company from Spain.

Speaker #2: Yeah, thank you, and also from my side, a warm welcome from Dudelstadt. And yeah, let me start with a headline: strategically and operationally, we're fully on track.

Speaker #2: So, in the second quarter, we have seen strong demand in our key markets, and, yeah, the timing effects we saw at the beginning of the year are normalized now.

Speaker #2: Second key message we want to deliver is our organic core revenue. So we grew with 6.7% in the first half year, with 8% in the second quarter.

Speaker #2: So this is driven by EMEA, on a broad base. So as well in B2B, as well as in B2C. The underlying EBITDA margin improved even more strong than the revenue.

Speaker #2: So, we are now on 25.3% in Q2, 27.9%. On the M&A side, we also fulfilled our plan. We acquired one technology company—Fas (Functional Electrostimulation Company) from Spain.

Oliver Jakobi: We acquired a leading patient care company in Norway, and the signed Human Mobility divestment also took place. That what we already discussed during our meetings earlier. Everything well on track. With this, we decided to narrow our guidance. We are lifting the low end from 5% to 6% growth, and keeping the upper end with 8%. We are increasing our EBITDA margin guidance from above 26.5% to above 27%. If we have a look into the regions, I would start then probably with the left side, with the Americas. Here, the key message is that the main market, the US market, is actually on a positive side. We have on the B2B side in the US, a 1% growth in H1, with 4% in H2.

Speaker #2: We acquired a leading patient care company in Norway. And the signed human mobility divestment also took place. So that what we already discussed during our meetings earlier.

Speaker #2: So everything well on track. With this, we decided to narrow our guidance. So we're lifting the lower end from 5 to 6% gross and keeping the upper end with 8%.

Speaker #2: And we are increasing our EBITDA margin guidance from 26.5 above 26.5% to above 27%. If we have a look into the region, so I would start in probably with the left side with the Americas.

Speaker #2: So here, the key message is that the main market, the US market, is actually on a positive side. On the B2B side in the US, we had 1% growth in the first half of the year, with 4% in the second half of the year.

Speaker #2: B2C is still seeing good gross momentum in H1 in the US. The situation is a little different in Canada, and especially in Latin America.

Oliver Jakobi: B2C still with good growth momentum in H1 in the US. A little bit different, the situation in Canada and especially in Latin America. In Canada, we had last year a War Amps program, which in the moment is on hold. That's why the Canadian numbers are below play here. We do have timing effects in Latin America. In the main market, Brazil, there are elections ahead, therefore, there's a blackout period and no tenders performed. We do expect here also better development from the second half, first of all, especially. EMEA, now accounting for 75% of our revenue, performed very strong. We had a very strong B2B business, double-digit growth in H1, which was driven, first of all, by many different markets.

Speaker #2: So, in Canada, we had last year the so-called 'War Amputees' program, which at the moment is on hold. That's why the Canadian numbers are below the prior year.

Speaker #2: And we do have timing effects in Latin America, Latin America, so in the main market, Brazil, there are elections ahead. Therefore, there's a blackout period and no tenders are performed.

Speaker #2: So we do expect here also better development from the third and fourth quarter especially. EMEA, now accounting for 75% of our revenue, performed very strong.

Speaker #2: We had a very strong B2B business, so double-digit growth in the first half of the year, which was driven, first of all, by many different markets.

Speaker #2: So, Western Europe, but also export and the EMEA markets—Russia and Ukraine. But also, really important to note are the innovations. The Patient Care business in Western Europe had very good momentum in the second quarter.

Oliver Jakobi: Western Europe, but also exports and the EMEA markets, Russia and Ukraine, but also really important to note are the innovations. The patient care business in Western Europe had very good momentum in Q2. So with 6.3, 6.4 growth, we are back on track, so growing slightly above the market in Q2. APAC, 3.6% growth in H1. There are two factors important to mention. First of all, we had a very strong comparative year or comparative period last year, with high growth momentum. Then we have this year some timing effects. With the relatively small sales in this region, a tender which is postponed like, for example, now in India or a reimbursement gap, which we have seen now for one, two months in Australia, have a direct impact.

Speaker #2: So with 6.3, 6.4 gross. We are back on track. So growing above slightly above the market in the second quarter. APEC, so 3.6% gross in the first half of the year.

Speaker #2: There are two factors important to mention. First of all, we had a very strong comparative year, or comparative period, last year with a high gross momentum.

Speaker #2: And then we have this year some timing effects. So with a relatively small sales in this region, a tender which is proposed postponed, like for example now in India, or a reimbursement, yeah, reimbursement gap, which we have seen now for one, two months in Australia, have a direct impact.

Speaker #2: But these are timing effects, so the catch-up will follow. Therefore, we're also confident that we'll overperform there in the second half of the year. Next.

Oliver Jakobi: These are timing effects, so the catch-up will follow, and therefore we are confident also to over-perform there the H2. Next. Regarding the acquisitions, I mentioned already we acquired Blatchford in Norway. Norway was a white spot on our patient care landscape. Norway is a very attractive market for patient care, very profitable. We had a unique chance to acquire the market leader. This has happened in May, and integration is already going forward, and so far, very good momentum we can see there. With Fesia, we acquired a company which is leading in the functional electrical stimulation. We are already in this business. We have a distribution business in this field. But what we were missing was the possibility to influence also the innovation path, then the regional expansion.

Speaker #2: So regarding the acquisitions, so I mentioned already we acquired Bledford in Norway. So Norway was a white spot on our patient care landscape. Norway is a very attractive market for patient care, very profitable.

Speaker #2: And we had a unique chance to acquire the market leader. This happened in May, and the integration is already moving forward. So far, we are seeing very good momentum there.

Speaker #2: With Fasia, we acquired a company which is a leader in electrostimulation. So we are already in this business. We also have a distribution business in this field.

Speaker #2: But what we were missing was the possibility to influence also the innovation path. Then the regional expansion and of course what we do have here now is higher margin.

Oliver Jakobi: Of course, what we do have here now is higher margins. When you are coming from the distribution business towards your own business, you also propose a higher margin. We are very much looking forward with this business. Definitely a growth driver for the coming years. And the divestment of our wheelchair business. We spoke about this. We had a signing with DHCare in June, and the closing is expected to be at the end of the year. We are in the moment in the operational separation of the business. We are very happy to have a partner who is a strategic buyer. That means the business will continue, and it is going very well forward.

Speaker #2: So when you're coming from the distribution business towards your own business, you also of course a higher margin. So we are very much looking forward with this business.

Speaker #2: So definitely a growth driver for the coming years. And the divestment of our wheelchair business. So we spoke about this. We had the signing with DH Care in June.

Speaker #2: And the closing is expected to be at the end of the year. So, we are currently in the process of operational separation of the business.

Speaker #2: We are very happy to have a partner who is a strategic buyer. So that means the business will continue. And it's going very well forward.

Oliver Jakobi: For us as a management team, but also for the organization, it is really good to focus even more now on our core business, prosthetics and neuro-orthotics. Because the wheelchair business, anyhow, we had a lot of projects running there, and it was a bit of distraction from the core business. This is now gone. Therefore, we will focus on the core business and also report from next year on only the core business. This core and non-core will be not there anymore. Now I am handing over to Arne, who will guide you through the financials.

Speaker #2: So for us, as a management team, but also for the organization, it is really good to focus even more now on our core business.

Speaker #2: So prosthetics and neuroorthotics. Because the wheelchair business anyhow we had a lot of projects running there and was a bit of distraction from the core business.

Speaker #2: So this is now gone. Therefore, we will focus on the core business and also, from next year on, report only the core business. So this core and non-core will not be there anymore.

Speaker #2: And now I'm handing over to Arne, who will guide you through the financials.

Speaker #3: Thank you, Oliver, and happy to take you through a bit more of the details of the financials. Again, starting with the big picture, which we're looking at very positively.

Arne Kreitz: Thank you, Oliver. I am happy to take you through a bit more of the details of the financials. Starting with the big picture, we are looking very positively on. We have reached our plans for Q2, which means strong organic growth of 8% in Q2, leading to an H1 growth of 6.7%. Exactly the acceleration that we also highlighted on our previous call. Previous call, we had been discussing the 5.1% in the first quarter. I think it is good to see that we now have reached the 8%, so being on a very good track on the top-line development. Same holds true for the underlying EBITDA side. We arrived at EUR 207 million in the first half of 2026, which means a 25.3% margin. What is always important is the comparison to the comparator a year or half year last year.

Speaker #3: So we've reached our plans for Q2, which means strong organic growth of 8% in Q2, leading to an H1 growth of 6.7%. So exactly the acceleration that we also highlighted in our previous call. In the previous call, we had been discussing the 5.1% in the first quarter.

Speaker #3: I think it's good to see that we have now reached 8%, so we are on a very good track in terms of top-line development.

Speaker #3: The same is also true for the underlying EBITDA side. We arrived at €207 million in the first half of 2026, which means a 25.3% margin. And what is always important is the comparison to the comparator a year ago or the half year last year.

Speaker #3: And here we can see a 2.2 percentage increase by looking specifically into the second quarter. We're talking about a 2.8 percentage increase to 27.9%.

Arne Kreitz: Here we can see a 2.2 percentage increase. If I am looking specifically into the second quarter, we are talking about a 2.8 percentage increase to 27.9%. I want to say the pattern that if we are growing strong on the top-line side, then we can immediately see this also in the strong EBITDA performance. That we have been seeing in Q2, 8% on the top line translating to a strong margin of 27.9%. Free cash flow and the cash conversion are actually strong. Good operational performance, but we have a special effect on the tech side. We have a bit of timing effects, which will normalize in the course of the year. All in all, we can see in Q2 a special effect of EUR 35 million. EUR 25 million of that will normalize in the course of the year.

Speaker #3: So when I say that the pattern is, if we're growing strong on the top-line side, then we can immediately see this also in the strong EBITDA performance.

Speaker #3: And that we've been seeing in Q2, 8% on the top line translating into a strong margin of 27.9%. Free cash flow, in the cash conversion actually strong.

Speaker #3: So good operational performance, but we have special effect on the tech side. So we have a bit of timing effects which will normalize in the course of the year.

Speaker #3: So all in all, we can see in Q2 a special effect of 35 million, 25 million of that will normalize in the course of the year.

Speaker #3: It's a bit the timing of the pre-tax payments, which last year had been at Q3 and now this year in Q2. But that will normalize and there's a second effect also on the income tax, which is that some of the tax refunding that we're expecting will move into the next year.

Arne Kreitz: It is the timing of the pre-tax payments, which last year had been at Q3, and now this year in Q2, but that will normalize. There is a second effect also on the income tax, which is that some of the tax refunding that we are expecting will move into the next year. Also a timing effect, but most likely only happening next year. If I am normalizing for the tax effect, we would actually see also a strong performance on the free cash flow development. Going a bit deeper into the revenue development, if we are looking into the development in B2B and B2C, we see an 8.7% increase in the first half year, with 11.7% in Q2, so very strong development on the B2B side. Please keep in mind that we are looking into a strong comparator quarter also last year.

Speaker #3: So, also a timing effect, but most likely only happening next year. If I'm normalizing for the tax effect, then we would actually also see a strong performance on the free cash flow development.

Speaker #3: Going a bit deeper into the revenue development, if we look at the development in B2B and B2C, we see an 8.7% increase in the first half of the year.

Speaker #3: With 11.7% in Q2, so very strong development on the B2B side. The increase—keep in mind that we're comparing against a strong comparator quarter last year.

Speaker #3: So, we are actually happy with the 11.7%. And I think it’s really showing strong momentum that we’re continuing to see on the B2B side.

Arne Kreitz: We are actually happy with the 11.7% and think it is showing really the strong momentum that we are continuing to see on the B2B side. On the patient care side, we are looking at 4.2% of a year-to-date performance. The first quarter we had been at 4.7%, so a bit slower on the second quarter. If I am looking a bit more into the details, then we can actually see that the core regions in Western Europe and North America actually had been performing very well with beyond 6% growth in the first half of the year. We had a bit of special effects and timing in the smaller regions, specifically APAC and LATAM, and that is a little bit mixing up the picture. From our point of view, that will also normalize in the course of the H2.

Speaker #3: On the patient care side, we're looking at 4.2% of a year-to-date performance. The first quarter we had been at 4.7%. So a bit slower on the second quarter.

Speaker #3: If I’m looking a bit more into the details, then we can actually see that the core regions in Western Europe and North America had actually been performing very well, with growth beyond 6% in the first half of the year.

Speaker #3: We had a bit of special effects and timing in the smaller regions specifically in APAC and LATAM. And that is a little bit yeah, mixing up the picture.

Speaker #3: But from our point of view, that will also normalize in the course of the second half of the year. So, if we're looking into the core regions, which are clearly Western Europe and North America, we're also looking into strong top-line development on the B2C side.

Arne Kreitz: If we are looking into the core regions, which is clearly Western Europe and North America, we are also looking into a strong top-line development on the B2C side. Moving on to the regions, 9% in EMEA, already explained by Oliver. Continued strong momentum, broad-based. We also, again, have been seeing some momentum in Russia, Ukraine. I know that there are particular questions around that, so we can see 1% to 2% of a spike event impact, if we are looking into the numbers. If you look into that, you can see that the majority of the growth is really broad-based and not spike event-driven. From that end, we are looking into a strong performance all in all in the EMEA. Americas, a bit mixed. Actually good recovery on the US side, we had been a bit lighter on the first quarter.

Speaker #3: Moving on to the regions, 9% in EMEA. Already explained by Oliver, so continued strong momentum broad-based. And we also again have been seeing some momentum in Russia-Ukraine.

Speaker #3: I know that there are questions around that. So we can see 1 to 2% of a spike event impact if we're looking into the numbers.

Speaker #3: But if you look into that, you can see that the majority of the growth is really broad-based. And not spike event driven. And from that end, we're looking into a strong performance all in all in EMEA.

Speaker #3: Americas—a bit mixed. Actually, good recovery on the US side. We had been a bit lighter in the first quarter; now we're seeing a catch-up, arriving at 4% on the B2B side.

Arne Kreitz: Now we are seeing a catch-up arriving at 4% on the B2B side, even stronger on the B2C side. We think a good momentum on the US side, which is a bit mixed up by Canada and LATAM and by the effects that Oliver already explained. Again, bit of a mix of effects. The key message is that in the most important market, in the US, we think we have seen in Q2 the positive development that we also had been foreseeing when we talked about Q1. On APAC, 3.6% and a bit slower growth in the second quarter. Here you just need to keep in mind that, if I am looking into Q2 and we are talking about EUR 26 million of revenue, if we then have some tender business moving into the third quarter, that already has a relevant impact then on the relative growth rate.

Speaker #3: Leaving stronger on the B2C side. So we think a good momentum on the US side. Which is a bit mixed up by Canada and LATAM.

Speaker #3: By the facts that Oliver already explained. So again, bit of a mix of effects. But the key message is that in the most important market in the US, we think we have seen in Q2 the positive development that we also had been foreseeing when we talked about Q1.

Speaker #3: On APAC, 3.6%. And a bit slower growth in the second quarter. And here you just need to keep in mind that, I mean, if I'm looking into Q2, then we're talking about €26 million of revenue.

Speaker #3: If we then have some tender business moving into the third quarter, that already has a relevant impact on the relative growth rate. So, nothing structural.

Arne Kreitz: Nothing structural, no change in the general market condition. This is a bit of timing, which we will see recovering in H2 this year. Underlying core EBITDA set up by 2.2%. If we are looking into the regional split, then we can see again, that all regions have improved in their profitability. With the good growth that we have been seeing in EMEA, of course, we can also see the strongest impact then on the top-line side, was reaching 26% in the EMEA region. All in all, you can see that our efficiency measures are really broad based and across the organization, and that is why we keep seeing this positive margin development basically across the entire organization. Underlying net income, we are also seeing continued good momentum. Keeping the big picture, top line, we have been growing by 6.7%. EBITDA have been growing by 18%.

Speaker #3: No change in the general market condition. This is a bit of timing which we will see recovering in the second half this year. Analyzing core EBITDA setup by 2.2%.

Speaker #3: If we're looking into the regional split, then we can see again that all regions have improved in their profitability, with good growth that we've been seeing in EMEA.

Speaker #3: Of course, we can also see the strongest impact on the top-line side, with reaching 26% in the EMEA region. But all in all, you can see that our efficiency measures are really broad-based and across the organization.

Speaker #3: And that's why we keep seeing this positive margin development basically across the entire organization. Analyzing net income, we're also seeing continued good momentum. And keeping the big picture, top line we had been growing by 6.7%.

Speaker #3: EBITDA had been growing by 18%. Now looking into the underlying net income, we're growing at 24%. That's again the typical logic in our P&L.

Arne Kreitz: Now looking into the underlying net income, we are growing at 24%. That is again, the typical logic in our P&L. When we are growing strongly on the top-line side, this translates into an overproportionate growth on the EBITDA side. Then everything which is coming below the EBITDA is pretty stable. Depreciation is stable. Financing costs have been lower because of the lower debt level that we saw in H1 and also lower interest rates that we have been facing. The tax rate has also slightly improved compared to last year. I want to say if the top line is growing well, as EBITDA is performing, then this translates nicely into strong net income development. Free cash flow, already described. Again, not an operative topic. We are seeing that the cash conversion continues to be strong and improving. If you take the tax effect into consideration, then this normalizes.

Speaker #3: When we're growing strongly on the top line side, this translates into an overproportionate growth on the EBITDA side. And then everything which is coming below the EBITDA is pretty stable.

Speaker #3: So, depreciation is stable. Financing costs have been lower because of the lower debt level that we saw in H1, and also the lower interest rates that we've been facing.

Speaker #3: And then the tax rate has also slightly improved compared to last year. So, when I say, if the top line is growing well, the EBITDA is performing, and this translates nicely into strong net income development.

Speaker #3: Free cash flow, already described. Again, not an operative topic. We're seeing that the cash conversion continues to be strong and improving. If you take the tax effect into consideration, then this normalizes.

Arne Kreitz: There is a little bit of working capital effect also in H1, specifically on the receivable side, which had been a bit up, but that is more like also now a bit of timing. On the specific date of when H1 ended, receivables been a bit up, but that is a timing effect which will normalize also in H2. The really impact that you need to understand for the free cash flow is the tax effect, and that is what I already explained earlier. Net debt and leverage. You can nicely see the trend that we have been on now for a long time. In Q2, we see a slight increase towards 2.5 turns, which is driven by the acquisition, but also the dividend payments, which had happened in May.

Speaker #3: There's a little bit of working capital effect also in the first half year specifically on the receivable side, which had been a bit up.

Speaker #3: But that is more like also now a bit of timing. So on the specific date of when H1 ended, receivables been a bit up.

Speaker #3: But that is a timing effect, which will normalize also in the second half of the year. So the real impact that you need to understand for the free cash flow is the tax effect.

Speaker #3: And that's what I already explained earlier. Net debt and leverage. You can nicely see the trend that we have been on now for a long time.

Speaker #3: In Q2, we see a slight increase towards 2.5 turns, which is driven by the acquisition but also the dividend payments that happened in May.

Arne Kreitz: We are expecting for the full year that we are going below 2 turns. If you recall, that is exactly our capital allocation policy. We always said during the IPO, our target is to go below 2. Despite the large amount of acquisitions and dividend payments that we have been doing this year, we will see that we are continuing to move into our targeted below 2 range. That brings me to the guidance, which with all the positive developments that we have been seeing in Q2, we decided to narrow. We are foreseeing, on the top line, a 6% to 8% increase in the course of the year.

Speaker #3: We're expecting, for the full year, that we are going below two turns. And if you recall, that's exactly our capital allocation policy. We always said during the IPO our target is to go below two.

Speaker #3: And despite the large amount of acquisitions and dividend payments that we have been doing this year, we'll see that we're continuing to move into our targeted below two range.

Speaker #3: That brings me to the guidance. Which with all the positive developments that we've been seeing in Q2, we decided to narrow. So we are foreseeing on the top line a 6 to 8 point percent increase in the course of the year.

Speaker #3: So, as you recall, the way we're setting the guidance, we always want to have a good chance to end up in the upper half of the guidance.

Arne Kreitz: As you recall, the way we are setting the guidance, we always want to have a good chance to end up the upper half of the guidance, and that is why looking into the 6% to 8% and also into the narrowing of the guidance, we are actually looking very positively into H2. On the EBITDA side, we have raised from beyond 26.5% to beyond 27%. Also to put this into context, last year we had been arriving at 26%. We always said for the midterm guidance that we are expecting a 1 percentage point increase per year. That we are now putting the guidance to go beyond 27% is clearly indicating that we are on a good track regarding the EBITDA margin development. To sum it up, I think, Q2, we saw the growth and improved profitability, as we said it would.

Speaker #3: And that's why looking into the 6 to 8% and also into the narrowing of the guidance, we're actually looking very positively into the second half of the year.

Speaker #3: On the EBITDA side, we've raised from beyond 26.5% to beyond 27%. And also to put this into context, last year we had been arriving at 26%.

Speaker #3: We always said for the midterm guidance that we're expecting a 1 percentage point increase per year. So, the fact that we're now putting the guidance to go beyond 27% is clearly indicating that we are on a good track regarding the EBITDA margin development.

Speaker #2: Yeah. So to sum it up, I think the second quarter we saw the growth and improved profitability as we said it would. And as Ana said, we are very positive for the second half of the year.

Oliver Jakobi: To sum it up, I think, Q2, we saw the growth and improved profitability, as we said it would.

Arne Kreitz: Arne said we are very positive for H2. The innovations are coming to the market, so the demand is continuously high. Therefore, we narrowed our guidance, still keeping in mind that we want to be reliable and, of course, deliver to our promises. With this, I think we open up the session for questions.

Oliver Jakobi: Arne said we are very positive for H2. The innovations are coming to the market, so the demand is continuously high. Therefore, we narrowed our guidance, still keeping in mind that we want to be reliable and, of course, deliver to our promises. With this, I think we open up the session for questions.

Speaker #2: The innovations are coming to the market. So the demand is continuously high. So therefore, we narrowed our guidance. Still keeping in mind that we want to be reliable and of course deliver to our promises.

Speaker #2: So and with this, I think we open up the session for questions.

Speaker #1: Ladies and gentlemen, we will now begin our question and answer session. If you have a question, we ask that you please use the raise hand function at the bottom of your Zoom screen or star nine if dialed in by phone.

Operator: Ladies and gentlemen, we will now begin our question and answer session. If you have a question, we ask that you please use the raise hand function at the bottom of your Zoom screen or star 9 if dialed in by phone. When it is your turn, you will receive a prompt. Please unmute or press star 6 to ask your question. If you want to withdraw your question, please lower your hand using the raise hand function or by pressing star 9. Thank you, and a moment for the first question, please. We will take our first question from Hugo Soltic with BNP Paribas. You may now unmute your line and ask your question.

Speaker #1: When it is your turn, you'll receive a prompt. Please unmute or press star six to ask your question. If you want to withdraw a question, please lower your hand using the raise hand function or by pressing star nine.

Speaker #1: Thank you. And a moment for the first question, please. We'll take our first question from Hugo Solvid with BNP Paribas. You may now unmute your line and ask your question.

Speaker #4: Hi, guys. Hope you can hear me okay. Thanks for taking my questions, and congrats on the prints. Just a few, please. On the guide range—so thank you, Anne, for already pointing to the top end of that new 6% to 8% guide.

Hugo Soltic: Hi, guys. Hope you can hear me okay. Thanks for taking my questions and congrats on the prints. Just a few, please. On the guide range, well, thank you, Arne, for already pointing to the top end of that new 6% to 8% guide. Just want to understand, are you guys to the low end at 6%, which would imply the significant deceleration into H2? In other words, what needs to go wrong here for us to start thinking about the low end? Going on M&A, EUR 112 million deployed year to date, your guide was EUR 40 to 50 million. Should we assume that you will pause here into H2 and possibly also into 2027? If you can update us on what the funnel for the acquisition is looking like. You mentioned Norway being very attractive market. Can you expand a bit on that?

Hugo Solvet: Hi, guys. Hope you can hear me okay. Thanks for taking my questions and congrats on the prints. Just a few, please. On the guide range, well, thank you, Arne, for already pointing to the top end of that new 6% to 8% guide. Just want to understand, are you guys to the low end at 6%, which would imply the significant deceleration into H2? In other words, what needs to go wrong here for us to start thinking about the low end? Going on M&A, EUR 112 million deployed year to date, your guide was EUR 40 to 50 million. Should we assume that you will pause here into H2 and possibly also into 2027? If you can update us on what the funnel for the acquisition is looking like. You mentioned Norway being very attractive market. Can you expand a bit on that?

Speaker #4: But I just want to understand how you guys put the low end at 6%, which would imply a significant deceleration into H2. In other words, what needs to go wrong here for us to start?

Speaker #4: Thinking about the low end, and second on M&A, €112 million deployed year to date. Your guide was €40 to €50 million. Should we assume that you will pause here into H2, and possibly also into 2027? If you can update us on what the funnel for acquisition is looking like?

Speaker #4: And you mentioned Norway being a very attractive market. Can you explain a bit on that? And lastly, if I may, just in terms of the directionally, the margin between B2B and B2C—obviously, strong uptake in H1—but can you help us understand if you've already also seen an increase in Q1 and in Q2?

Hugo Soltic: Lastly, if I may, just in terms of the directionally, the margin for between B2B and B2C, obviously strong uptake in H1. Can you help us understand if you have also seen an increase in Q1 and in Q2? I am not sure that we have been provided with the details back in the Q1 interim statement. Thank you.

Hugo Solvet: Lastly, if I may, just in terms of the directionally, the margin for between B2B and B2C, obviously strong uptake in H1. Can you help us understand if you have also seen an increase in Q1 and in Q2? I am not sure that we have been provided with the details back in the Q1 interim statement. Thank you.

Speaker #4: I'm not sure that we've been provided with the details back in the Q1 interim statement. Thank you.

Speaker #2: Yeah. So I mean, the guidance, so 6 to 8, as I said in my last words. So we want to promise to we want to deliver to our promise.

Arne Kreitz: Yeah. The guidance, so 6% to 8%, as I said in my last words. We want to deliver to our promise, and of course, we would like to end up in the upper half of the range we are giving. That is why we do not foresee any major hurdles. As we said before, we have to deliver. We have to show that we are reliable. That is why we picked up the 6% to 8%. If something is clear more towards end of Q3, then, of course, we will change the guidance accordingly. Second question regarding M&A. We always gave a range, yeah. We also said if there are good opportunities, then this range might exceed. We do have the financial flexibility. That was, from the very beginning also important for us to note.

Oliver Jakobi: Yeah. The guidance, so 6% to 8%, as I said in my last words. We want to deliver to our promise, and of course, we would like to end up in the upper half of the range we are giving. That is why we do not foresee any major hurdles. As we said before, we have to deliver. We have to show that we are reliable. That is why we picked up the 6% to 8%. If something is clear more towards end of Q3, then, of course, we will change the guidance accordingly. Second question regarding M&A. We always gave a range, yeah. We also said if there are good opportunities, then this range might exceed. We do have the financial flexibility. That was, from the very beginning also important for us to note.

Speaker #2: And of course, we would like to end up in the upper half of the range we're giving. So that's why we do not see 4C any major hurdles.

Speaker #2: But I mean, as we said before, yeah, so we have to deliver. We have to show that we are reliable. And that's why we picked up the 6% to 8%.

Speaker #2: If something is clear, more towards end of Q3, then of course we will change the guidance accordingly. Second question regarding M&A. So we always gave a range but we also said if there are good opportunities then this range might exceed.

Speaker #2: So we do have the financial flexibility that was from the very beginning also important for us to note. So if we can see that there are good targets on the market, then we also would react accordingly.

Arne Kreitz: If we can see that there are good targets on the market, then we also would react accordingly. That doesn't mean that now we exceeded our M&A budget and we have to stop. We are still looking, and if there are good opportunities on the market, we also would continue. It doesn't mean that we put it now on hold for H2 of this year or maybe even 2027. Therefore, everything is fine there. And margin. On the third one, B2B, B2C margin, and I can share that we are continuing to see the improvement both on the B2B and on the B2C side. Along the same logic that we set, when B2B is running well, we see typically good mix effects, and a bit more scalability on the B2B side. That's why good development on the B2B side.

Oliver Jakobi: If we can see that there are good targets on the market, then we also would react accordingly. That doesn't mean that now we exceeded our M&A budget and we have to stop. We are still looking, and if there are good opportunities on the market, we also would continue. It doesn't mean that we put it now on hold for H2 of this year or maybe even 2027. Therefore, everything is fine there. And margin.

Speaker #2: That doesn't mean that now we've exceeded our M&A budget and we have to stop. We are still looking, and if there are good opportunities on the market, we would also continue.

Speaker #2: So, it doesn't mean that we put it now on hold for the second half of this year, or maybe even 2027. Therefore, everything is fine there.

Speaker #2: And on the third one, B2B and B2C margin, what I can share is that we're continuing to see improvement both on the B2B and on the B2C side.

Arne Kreitz: On the third one, B2B, B2C margin, and I can share that we are continuing to see the improvement both on the B2B and on the B2C side. Along the same logic that we set, when B2B is running well, we see typically good mix effects, and a bit more scalability on the B2B side. That's why good development on the B2B side.

Speaker #2: So, I mean, along the same logic that we said—yeah, when B2B is running well, we typically see good mix effects and a bit more scalability on the B2B side.

Speaker #2: That's why there is good development on the B2B side, and B2C is continuing to show step-by-step improvement on the margin side. So, from that end, that is well on track, and the margin improvement is coming from both businesses.

Arne Kreitz: B2C is continuing to show the step-by-step improvement on the margin side. From that end, that is well on track, and margin improvement is coming from both businesses.

Speaker #4: Thank you. And on what makes Norway attractive market? Thank you.

Hugo Soltic: Thank you. And on what makes Norway attractive market? Thank you.

Hugo Solvet: Thank you. And on what makes Norway attractive market? Thank you.

Speaker #2: What makes Norway interesting is the reimbursement system. So you know that normally our B2C business has a lower EBITDA margin than the B2B business. In this case, the B2C margin is similar to the B2B business.

Arne Kreitz: What makes Norway? The reimbursement system. You know that normally our B2C business has a lower EBITDA margin than the B2B business. In this case, the B2C margin is similar to the B2B business, so it's very attractive. And the point is there that we have a very good reimbursement in neuro-orthotics. At the moment, there was no one really covering this area. Now we have the opportunity with acquiring the market leader, really to set there the standard and grow in the field of neuro-orthotics in Norway.

Oliver Jakobi: What makes Norway? The reimbursement system. You know that normally our B2C business has a lower EBITDA margin than the B2B business. In this case, the B2C margin is similar to the B2B business, so it's very attractive. And the point is there that we have a very good reimbursement in neuro-orthotics. At the moment, there was no one really covering this area. Now we have the opportunity with acquiring the market leader, really to set there the standard and grow in the field of neuro-orthotics in Norway.

Speaker #2: So it's very attractive. And it also shows this the point is there that we have a very good reimbursement in neuro-orthotics. And in the moment, there was no one really covering this area.

Speaker #2: So now we have the opportunity with acquiring the market leader really to set there the standard and grow in the field of neuro-orthotics in Norway.

Hugo Soltic: It is very clear. Thanks so much.

Hugo Solvet: It is very clear. Thanks so much.

Speaker #4: Is there a clear "Thanks so much"?

Speaker #1: Our next question comes from Oliver Rainberg with Kalpa Chevrolet. Please unmute your line and ask your question. Oliver, please feel free to unmute your line and ask your question.

Operator: Our next question comes from Oliver Reinberg with Kepler Cheuvreux. Please unmute your line and ask your question. Oliver, please feel free to unmute your line and ask your question.

Speaker #4: Yeah. Hi, good afternoon. Can you hear me?

Oliver Reinberg: Hi. Good afternoon. Can you hear me?

Speaker #2: Yeah.

Arne Kreitz: Yep.

Speaker #4: Perfect. Perfect. Two questions from my side. One on this kind of spike events. Thanks for providing the color. I think you mentioned there was a kind of 1 to 2% contribution from that year on year.

Oliver Reinberg: Perfect. Two questions from my side, one on this kind of spike events. Thanks for clarifying the color. I think you mentioned there is also kind of 1% to 2% contribution from that year-on-year. I think this is a year-on-year comparison. Can you just give us a flavor, like, what kind of contribution from Russian, Ukrainian sales you now see versus the pre-war baseline, just to get a flavor there? Can you just talk to, I think large part of this is funded by Europe. Is there any kind of development? Also, I think you mentioned, or it sounded like there is an upside to the scenario. So far you have not incorporated any kind of more spike events into your guidance, because now we are seeing kind of some contributions coming in. Have you now incorporated with the kind of top-line change or not yet?

Speaker #4: But I think this is a year-on-year comparison. Can you just give us a flavor, like what kind of contribution from Russian or Ukrainian sales you now see versus the pre-war baseline, just to get a flavor there?

Speaker #4: And can you just talk to, I think, large part of this is funded by Europe. Is there any kind of developments? And also I think you mentioned or it sounded like there's an upside to the scenario.

Speaker #4: I mean, so far, you have not incorporated any kind of more spike events into your guidance, but now we're seeing kind of some contributions coming in.

Speaker #4: Have you now incorporated the kind of top-line change, or not yet? That would be question number one. And secondly, on the Norway deal, it still looks like a reasonably full price for the asset.

Oliver Reinberg: That would be question number one. Secondly, also on the Norway deal, it still looks like a reasonably full price for the asset. Can you just give us a bit of flavor when you expect to earn your cost of capital on this kind of acquisition, and whether we should expect any similar deals going forward of that kind of magnitude? Thank you.

Speaker #4: Can you just give us a bit of flavor when you expect to earn your cost of capital on this kind of acquisition and whether we should expect any kind of similar deals going forward of that kind of magnitude?

Speaker #4: Thank you.

Speaker #2: Okay, so I would take the spike topic. I mean, pre-war and now, it's very difficult to assess. We didn't have an infrastructure in Ukraine at all.

Arne Kreitz: Okay. I would take the spike topic. Pre-war and now, it is very difficult to assess. We did not have an infrastructure in Ukraine at all, and it was a relatively small market for us, we have to admit. Therefore, here we definitely have seen a major uplift, but from a very low base. We normally do not provide any market details, but here we have seen quite a huge impact. On the Russian side, we were there already. We had quite a valid business there. I think we are growing there with the reimbursement in the civilian market. I think the overall information, which was important to note, is that basically nothing has changed in Russia in terms of market participants' competition. Everybody who was there before is still there.

Oliver Jakobi: Okay. I would take the spike topic. Pre-war and now, it is very difficult to assess. We did not have an infrastructure in Ukraine at all, and it was a relatively small market for us, we have to admit. Therefore, here we definitely have seen a major uplift, but from a very low base. We normally do not provide any market details, but here we have seen quite a huge impact. On the Russian side, we were there already. We had quite a valid business there. I think we are growing there with the reimbursement in the civilian market. I think the overall information, which was important to note, is that basically nothing has changed in Russia in terms of market participants' competition. Everybody who was there before is still there.

Speaker #2: So therefore, and it was a relatively small market for us. We have to admit. So therefore, here we definitely have seen a major uplift.

Speaker #2: But from a very low base. So we normally do not provide any market details, but here we have seen quite a huge impact. On the Russian side, so we were there already.

Speaker #2: We had quite a valid business there, and I think we are growing there with the reimbursement in the civilian market. So I think the overall information, which is important to know, is that basically nothing has changed in Russia in terms of market participants and competition.

Speaker #2: So, everybody who was there before is still there. But also in Russia, the reimbursement grew, which doesn't mean necessarily that a lot of new patients are served in the civilian sector.

Arne Kreitz: But also in Russia, the reimbursement grew, which does not mean necessarily that a lot of new patients are served in the civilian sector. But the level of reimbursement per patient grew quite significantly. This we have seen. There is an upselling effect more than a quantitative effect. We said already several times, we are not taking part in any military tender or whatever. This is more a part which is closed for foreign companies, so it is more served by Russian companies.

Oliver Jakobi: But also in Russia, the reimbursement grew, which does not mean necessarily that a lot of new patients are served in the civilian sector. But the level of reimbursement per patient grew quite significantly. This we have seen. There is an upselling effect more than a quantitative effect. We said already several times, we are not taking part in any military tender or whatever. This is more a part which is closed for foreign companies, so it is more served by Russian companies.

Speaker #2: But the level of reimbursement per patient grew quite significantly. So this we have seen. So there's an upselling effect more than a quantitative effect.

Speaker #2: We said already several times, so we are not taking part in any military tender or whatever. So this is more a part which is closed for foreign companies.

Speaker #2: So it's more served by Russian companies, and therefore, for us, we do not see really more and more of this spike impact in Russia, while we do see it in Ukraine.

Oliver Jakobi: Therefore, for us, we do not see really more and more of this spike impact in Russia while we do see it in Ukraine. There definitely we have this increased patient base. To give you maybe an overview, we had a pre-war quantity of 8,000 to 10,000 prosthetic fittings per year. We have now, since the beginning of the war, roughly 150,000 new amputees, additional to the pre-war number. You are right, at the moment, due to infrastructure constraints, they are not all yet fitted. If we are talking about a four-year, four-and-a-half-year now time period, there is quite a backlog, plus additional, now we are coming into the refitting phase.

Speaker #2: So there, definitely, we have this increased patient base. To give you maybe an overview, we had a pre-war quantity of 8,000 to 10,000 prosthetic fittings per year.

Speaker #2: And we have now since the beginning of the war, we have roughly 150,000 new MQTs so additional to the pre-war number. And you're right in the moment, due to infrastructure constraints, there are not all yet fitted.

Speaker #2: So if we're talking about four-year or four-and-a-half year now time period, there is quite a backlog plus additional now we are coming into the refitting phase.

Speaker #2: It means besides those who are not fitted yet, the ones who were fitted in the very early stage of the war, they already due to a new fitting.

Arne Kreitz: It means besides those who are not fitted yet, the ones who were fitted in the very early stage of the war, they are already due to a new fitting. There we do expect further acceleration, and even increasingly, as longer the war continues. Norway, happy to talk a bit about it. First of all, the mechanics of the Norway deal. First of all, it is a strategic deal. Oliver said it was a wide spot on the landscape, but we had not been present. Following our invest in the best strategy and looking for the market leading players in order to further evolve on our integrated B2B and B2C business, I think this is a deal which is really spot on and where we have been looking for a longer time. It is clearly following a strategic direction.

Oliver Jakobi: It means besides those who are not fitted yet, the ones who were fitted in the very early stage of the war, they are already due to a new fitting. There we do expect further acceleration, and even increasingly, as longer the war continues.

Speaker #2: So there we do expect further acceleration and yeah, even increasingly as longer the war continues. And Norway.

Arne Kreitz: Norway, happy to talk a bit about it. First of all, the mechanics of the Norway deal. First of all, it is a strategic deal. Oliver said it was a wide spot on the landscape, but we had not been present. Following our invest in the best strategy and looking for the market leading players in order to further evolve on our integrated B2B and B2C business, I think this is a deal which is really spot on and where we have been looking for a longer time. It is clearly following a strategic direction.

Speaker #3: Norway to talk a bit about it. So first of all, the mechanics of the Norway deal. First of all, it's a strategic deal. As Oliver said, it was a wide spot on the landscape.

Speaker #3: But we had not been present. So, following our "Invest in the Best" strategy and looking for the market-leading players—in order to further evolve our integrated B2B and B2C business—I think this is a deal which is really spot on.

Speaker #3: And where we've been looking for a longer time. So it's clearly following a strategic rationale. Regarding the financial parameters, I would consider it to be a good deal.

Arne Kreitz: Regarding the financial parameters, I would consider it to be a good deal. You need to understand that the standalone margin of the patient care business in Norway is already very high, and it is probably the highest that we have in the network, and well, it is the highest that we have in the network. Then you need to understand that the pre-owner has been Blatchford. You can understand that they have penetrated the product into the channel. We see a good opportunity to bring our high margin products better into the market, and keep that share up. As Oliver said, this whole field of neuro-orthotics, which is a clear future growth field for us, and where reimbursement has been established also for the high-end solutions, that is a completely, I would almost say, untapped field that we can now penetrate into Norway.

Speaker #3: that the standalone margin of the patient care You need to understand network. And then you need to understand that the pre-owner has been ledged for it.

Speaker #3: So you can understand that they have penetrated the products into the channel. So we see a good opportunity to bring our high-margin products better into the market and keep that share up.

Speaker #3: And as Oliver said, this whole field of neurothotics, which is a clear future growth field for us, and where reimbursement has been established also for the high-end solutions, that is a completely I would always say untapped field that we can now penetrate into Norway.

Arne Kreitz: It has a lot of good parameters on the profitability of the business and the synergies and upsides associated to it. Regarding the capital cost, we clearly will be earning our capital cost with that deal. If you take the, I don't know, 8.5%, 9% of WACC, then we are clearly expecting that we are going beyond the capital cost. It is a strategic sound deal that will give us a good upside on the top line, but also on the margin side, B2B and B2C, and it will also earn its capital cost.

Speaker #3: So, it has a lot of good parameters on the profitability of the business, and the synergies and upsides associated with it. And regarding the capital cost, we clearly will be earning our capital cost with that deal.

Speaker #3: So if you take the, I don't know, 8.5%, 9% of WEC, then we're clearly expecting that we're going beyond the capital cost. So it's a strategic sound deal.

Speaker #3: It will give us a good upside on the top line, but also on the margin side, both B2B and B2C. And it will also earn its capital cost.

Speaker #1: Okay, perfect. Thanks so much.

Oliver Reinberg: Okay, perfect. Thanks so much.

Speaker #3: Thank you.

Oliver Jakobi: Thank you.

Arne Kreitz: Thank you.

Speaker #4: On our next question comes from Anna Ratcliffe with Bank of America. Please unmute your line and ask your question.

Operator: Our next question comes from Anna Radcliffe with Bank of America. Please unmute your line and ask your question.

Anna Radcliffe: Hi. Thanks for taking the questions. I wanted to dig in a bit on Americas. I appreciate the commentary on LatAm and Canada, but on the 4% organic growth in the US, it seems maybe a bit below expectations. Is there anything to flag on the US MPK K2 reimbursement? Is that still a meaningful tailwind for 2026, and how do you see US growth playing out through the balance of the year? Then just on the margin guidance raise, how much of that is favorable mix through just an increasing number of MPKs being sold versus an improvement in cost savings and different initiatives? What do you expect for inflation through the H2 of the year? Thanks again for taking the questions.

Anna Ractliffe: Hi. Thanks for taking the questions. I wanted to dig in a bit on Americas. I appreciate the commentary on LatAm and Canada, but on the 4% organic growth in the US, it seems maybe a bit below expectations. Is there anything to flag on the US MPK K2 reimbursement? Is that still a meaningful tailwind for 2026, and how do you see US growth playing out through the balance of the year? Then just on the margin guidance raise, how much of that is favorable mix through just an increasing number of MPKs being sold versus an improvement in cost savings and different initiatives? What do you expect for inflation through the H2 of the year? Thanks again for taking the questions.

Speaker #5: Hi, thanks for taking the questions. I wanted to dig in a bit on America's. I appreciate the commentary on Latcham and Canada, but on the 4% organic growth in the US.

Speaker #5: Give me maybe a bit below expectations. Is there anything to flag on the US MPK K2 reimbursement? Is that still a meaningful tailwind for 2026?

Speaker #5: And how do you see US growth playing out through the balance of the year? And then, just on the margin guidance raise, how much of that is favorable mix through just an increasing number of MPKs being sold?

Speaker #5: Versus an improvement in cost savings and different initiatives? And where do you expect for inflation through the second half of the year? And thanks again for taking the questions.

Speaker #2: So yeah, regarding the US business, so no, we do not see any headwind in terms of penetration of the K2 population and others. But you have to keep in mind we had last year mid-double digit or even in the high teens growth in the US market.

Oliver Jakobi: Regarding the US business. No, we do not see any headwind in terms of penetration of the K2 population and others. You have to keep in mind, we had last year mid double-digit or in the high teens growth in the US market. It means we are growing this year from a very high base. That's something what we, of course, always have to keep in mind. The penetration of the K2 population is continuing. We do see still roughly 20% growth rate in this area. But we do have in other areas, of course, a lower growth rate because there the penetration is already on a different level.

Speaker #2: So it means we are growing this year from a very high base. And that's something what we, of course, always have to keep in mind.

Speaker #2: The penetration of the K2 population is continuing. We do see still roughly 20% growth rate in this area. But we do have in other areas, of course, a lower growth rate because there is a penetration is already on a different level.

Speaker #2: So, nothing structural, and we also do believe that in the second half of the year, we will see a little bit more momentum, because we have seen the fourth quarter last year was a little bit slower than the first three quarters.

Arne Kreitz: Nothing structural. We also do believe that in H2, we will see a little bit more momentum, because we have seen Q4 last year was a little bit slower than the first three quarters. We do expect also here to see a steady uplift on the organic growth rate. Regarding the margin, you can see year-to-date, we are up 2.2%. Then also in the guidance, we are reflecting that we are expecting in H2 that there will be a good margin development. The effects are, there is a bit of a margin impact, and there is an impact on efficiency gains, but you also need to keep the scale effect in mind. I keep repeating that.

Oliver Jakobi: Nothing structural. We also do believe that in H2, we will see a little bit more momentum, because we have seen Q4 last year was a little bit slower than the first three quarters. We do expect also here to see a steady uplift on the organic growth rate.

Speaker #2: So therefore, we do expect also here to see steady uplift on the organic growth rate. Martin.

Arne Kreitz: Regarding the margin, you can see year-to-date, we are up 2.2%. Then also in the guidance, we are reflecting that we are expecting in H2 that there will be a good margin development. The effects are, there is a bit of a margin impact, and there is an impact on efficiency gains, but you also need to keep the scale effect in mind. I keep repeating that.

Speaker #3: margin, so you can see year to date we're up 2.2% and then also in the guidance we're reflecting that we're expecting in the second half of the year that there will be a good margin Yeah, regarding the development.

Speaker #3: And the effects are yes, there's a bit of a margin impact. And there's an impact on efficiency gains, but you also need to keep the scale effect in mind.

Speaker #3: I keep repeating that. If we're growing beyond 5%, I typically assume the normal year cost growth is around 4% to 5%. 2%, 3% of inflation.

Arne Kreitz: If we are growing beyond 5%, I would typically assume the normal year cost growth is around 4% to 5%, 2% or 3% of inflation. Then as a growth company, a bit of investment into the company. So when we are growing beyond the 5%, it typically brings us into a good scaling opportunity because again, the global fixed costs are pretty set. Then if we are growing with the high-end components, that gives us a good scale effect. If I say, how does that split, I think there will be a bit of margin upside in the overall year. Then scale and mix, scale and efficiency is probably 50/50 on the drivers of margin improvement. So scale, if I am looking into the 2.2%, then I would say that is 1% and 1% on the efficiency side, and then a bit of additional mix effect that we are seeing.

Speaker #3: Then, as a growth company, a bit of investment into the company. So when we are going beyond the 5%, it typically brings us into a good scaling opportunity because, again, the global fixed costs are pretty set.

Speaker #3: And then if we're growing with a high-end components, that gives us a good scale effect. So if I say how does that split? I think there will be a bit of margin upside in the overall year.

Speaker #3: And then scale and mix—scale and efficiency is probably 50-50 on the drivers of the margin improvement. So scale, if I'm looking into the 2.2%, then I would say that is 1 and 1% on the efficiency side, and then a bit of additional mix effect.

Speaker #3: And then, sorry, the last question was on inflation in the second half of the year. I mean, we've been just running through our forecasting, and I have to say we're not expecting a larger impact of inflation in the second half of the year.

Arne Kreitz: The last bit on inflation in H2. I mean, we have been just running through our forecasting, and I have to say, we are not expecting a larger impact of inflation in H2. Oil price development, we did the calculation, how is that running through into our material cost? That is pretty minor. So expecting maximum EUR 2 million to 3 million of an impact, so that is negligible. Then also on the other supply side, we are not seeing a lot of the push at the moment. From that end, we expect a normal inflation for this year and no impact on the margin side.

Operator: No

Anna Ractliffe: No

Arne Kreitz: the last bit on inflation in H2 of the year. I mean, we've been just running through our forecasting, and I have to say, we're not expecting a larger impact of inflation in H2 of the year. So oil price development, we did the calculation, how is that running through into our material cost? That is pretty minor. So expecting maximum 2 to 3 million of an impact, so that's negligible. Then also on the other supply side, we're not seeing a lot of the push at the moment. From that end, we expect a normal inflation for this year and no impact on the margin side.

Speaker #3: So oil price development, we did the calculation how is that running through into our material cost. That is pretty minor. So expecting maximum 2% to 3 million of an impact.

Speaker #3: So that's an negligible. And then also on the other supply side, we're not seeing a lot of a push at the moment. So from that end, we're expecting normal inflation for this year.

Speaker #3: And no impact on the margin side.

Operator: Our next question comes from Falko Friedrichs with Deutsche Bank. Please unmute your line and ask your question.

Speaker #4: Our next question comes from Falco Friedrichs with Deutsche Bank. Please unmute your line and ask your question.

Falko Friedrichs: Thank you. Good afternoon. I have two questions, please. The first one, could you provide a little bit more color again on the strong 12% organic growth in the B2B business with respect to which products have been driving this the most? Would that be a good indication for what you might deliver in the H2 as well of this year? My second question, and sorry if I missed that on the B2C business, which you mentioned was a tad softer in Q2. Do you expect it to recover now in the Q3 or Q4? I saw the comps are not too easy, but is there still the potential that this bounces back in the H2? Thank you.

Speaker #1: Thank you. Good afternoon. I have two questions, please. The first one, could you provide a little bit more color again on the strong 12% organic growth in the B2B business?

Speaker #1: With respect to which products have been driving this the most, and would that be a good indication for what you might deliver in the second half as well?

Speaker #1: Of this year. And then my second question, and sorry if I missed that, on the B2C business, which you mentioned was a tad softer in Q2, do you expect that to recover now in the third or fourth quarter?

Speaker #1: I saw the comms are not too easy, but is there still the potential that this bounces back in the second half? Thank you.

Speaker #3: Yeah. So regarding the B2B growth, it's actually, I mean, across the products. So we still see strong growth in our high-end products.

Arne Kreitz: Well, regarding the B2B growth, it is actually across the products. We do see still a strong growth in our high-end products, so in the mechatronic area of prosthetics and neuro-orthotics. We also do see over-market growth rate in feet and liner. We launched also some new mechanical knee joints, which are picking up very nicely. It is actually a broad range of products which are fueling the growth. We have in the upper limb prosthetic field, we launched Michelangelo Hand. There we can see quite a good growth momentum. It is not specific one or two products. It is actually on a broader range, which is for us, of course, also a very good indicator for the future. It is more sustainable. On the B2C side, as we mentioned, this is coming more from timing effects of emerging markets.

Oliver Jakobi: Well, regarding the B2B growth, it is actually across the products. We do see still a strong growth in our high-end products, so in the mechatronic area of prosthetics and neuro-orthotics. We also do see over-market growth rate in feet and liner. We launched also some new mechanical knee joints, which are picking up very nicely. It is actually a broad range of products which are fueling the growth. We have in the upper limb prosthetic field, we launched Michelangelo Hand. There we can see quite a good growth momentum. It is not specific one or two products. It is actually on a broader range, which is for us, of course, also a very good indicator for the future. It is more sustainable. On the B2C side, as we mentioned, this is coming more from timing effects of emerging markets.

Speaker #3: So in the mechatronic area of prosthetics and neuroauthotics, but we also do see overmarket growth. Yeah. So overmarket growth rate in feet and liner.

Speaker #3: So we also launched some new mechanical knee joints, which are picking up very nicely. So it's actually a broad range of products that are fueling the growth.

Speaker #3: We have in the upper limb prosthetic field, we launched a Michelangelo hand. There we can see quite a good growth momentum. So it's not specific one or two products.

Speaker #3: So it's actually on a broader range, which is for us also a very good indicator for the future. So it's more sustainable. On the B2C side, as we mentioned, this is coming more from timing effects of emerging markets.

Speaker #3: We always have, in emerging markets or in some markets, periods where tenders are on hold or are a little bit delayed.

Arne Kreitz: We always have in emerging markets or in some markets, we have periods where tenders are on hold or they are a little bit delayed. That is actually happening this year, or it happened in the Q2. One of the markets, Australia, but especially in Latin America, we have seen here a bigger impact in the Q2. As mentioned before, we do expect that this is only timing. It means in the Q3 or then also in the Q4, this will resolve.

Oliver Jakobi: We always have in emerging markets or in some markets, we have periods where tenders are on hold or they are a little bit delayed. That is actually happening this year, or it happened in the Q2. One of the markets, Australia, but especially in Latin America, we have seen here a bigger impact in the Q2. As mentioned before, we do expect that this is only timing. It means in the Q3 or then also in the Q4, this will resolve.

Speaker #3: And that is actually happening this year or it happened in the second quarter. So one of the markets Australia but especially in Latin America, we have seen here a bigger impact in the second quarter.

Speaker #3: But as mentioned before, we do expect that this is only timing so it means the third or then also in the fourth quarter, this will resolve.

Oliver Jakobi: The core markets or the most important markets where we have stable reimbursement system in North America and Western Europe, we are actually on track.

Speaker #3: The core markets or the most important markets where we have stable reimbursement system. In North America and Western Europe, we are actually on track.

Speaker #1: Okay. Thank you.

Falko Friedrichs: Okay, thank you.

Speaker #4: As a reminder, if you would like to ask a question, please use the raise hand feature. When your name is announced, please unmute and ask your question.

Operator: As a reminder, if you would like to ask a question, please use the raise hand feature. When your name is announced, please unmute and ask your question. Our next question comes from Beatrice Fairbairn with Berenberg. Please unmute your line and ask your question.

Speaker #4: Our next question comes from Beatrice Fairbarn with Berenbach. Please unmute your line and ask your question.

Speaker #5: Hi. Thank you for taking my questions. I just had a couple on the kind of growth side of things. So firstly, could you specify how much of the B2B growth was impacted by these kind of special or timing effects that you've just mentioned?

Beatrice Fairbairn: Hi. Thank you for taking my questions. I just had a couple on the growth side of things. Firstly, could you specify how much of the B2B growth was impacted by these special or timing effects that you have just mentioned? Then just to clarify on the spike event impact, you mentioned it is about 1 percentage point. What is your expectation for the remainder of the year, and how much is factored into the guidance? Apologies if I missed this earlier. Then finally, how much of an impact was FX on the growth margin in Q2? Would you be able to specify that? Thank you.

Speaker #5: And then, just to clarify on the kind of spike event impact—you mentioned it's about 1 percentage point. What is your expectation for the remainder of the year, and how much is factored into guidance?

Speaker #5: Apologies if I missed this earlier. And then finally, how much impact was FX on the growth margin? In Q2, would you be able to specify that?

Speaker #5: Thank you.

Oliver Jakobi: If I got the first point right, B2B and timing effect. There in the B2B business, there were not too many timing effects. There was something in the end of Q1, with the war in Middle East. We had some deliveries delayed, but this was all realized then in Q2. Therefore, the B2B side, we are actually more or less on track. The timing effect was on the B2C side. That was Falko asking now. I hope I explained it so that this will be resolved in Q3 and Q4. Regarding the spike topic, Ana mentioned it. It is on the EMEA growth. We are talking about 1% to 2%, so also 9%. 1% to 2% are affected by spike events. As I also mentioned, this effect is getting smaller and smaller.

Speaker #3: So if I got the first point right, B2B and timing effect. So in the B2B business, we're not too many timing effects. So there was something in the end of the first quarter with the four in the Middle East.

Speaker #3: We had some deliveries delayed, but this was all realized then in the second quarter. So, therefore, the B2B side is actually more or less on track.

Speaker #3: So the timing effect was on the B2C side. I just so that was Falco asking now. I hope I explained it so that this would be resolved in the third and fourth quarter.

Speaker #3: Regarding the spike topic, Ana mentioned it. So it's on the EMEA growth. Yeah, so we're talking about 1% to 2%, and also 9%.

Speaker #3: Yeah. So 1% to 2% are affected by spike events. But as I also mentioned, so this effect is getting smaller and smaller. Yeah. So as more the Ukraine is fitting their patients, this spike event will be slow because the refitting cycles, they are then already considered normal fittings.

Oliver Jakobi: As more the Ukraine is fitting their patients, this spike event will be slow because the refitting cycles there then already considered normal fittings. It is not very often done anymore by the military because people are retiring from military, so they are civilians. They still have the status of veterans, but they are civilians. They are moving into the normal reimbursement, and therefore, that is already for our industry, this is normal course of business. That is what we mentioned before. We are talking about increased patient base which stays now for the next decades in the system. Therefore, this spike impact, we will see decreasing over time. Its impact on margin, on gross margin, I think you asked, right? It is comparatively low, so it is -0.1%.

Speaker #3: So it's not very often done anymore by the military because people are retiring from the military. So they are civilians. They're still at the status of veterans, but they're civilians.

Speaker #3: So, they are moving into the normal reimbursement, and therefore, that's already for our industry. So, this is a normal course of business. Yeah, so that's what we mentioned before.

Speaker #3: So we are talking about an increased patient base which will stay in the system for the next decades. Therefore, this spike impact will decrease over time.

Speaker #3: And yeah.

Arne Kreitz: Its impact on margin, on gross margin, I think you asked, right? It is comparatively low, so it is -0.1%.

Speaker #2: The FX impact on gross margin, I think you asked, right? Is comparatively low, so it's minus 0.1%.

Beatrice Fairbairn: Great. Thank you.

Speaker #5: Great. Thank you.

Operator: This concludes the Q&A session. I will now hand back over to Oliver Jakobi, CEO, for closing remarks.

Speaker #4: This concludes the Q&A session. I will now hand back over to Oliver Jacobi, CEO for closing remarks.

Speaker #3: Okay. So yeah. Then thanks a lot. For the taking part in the call. And I mean, you can not see, but you can hear us.

Oliver Jakobi: Okay. Then thanks a lot for taking part in the call. You cannot see, but you can hear us. The management is satisfied with H1 and optimistic for H2. I hope we answered all your questions. We are looking forward for the next call after Q3. Thanks a lot.

Speaker #3: So the management is satisfied with the first half of the year. And optimistic for the second half of the year. So I hope we answered all your questions and yeah, we're looking forward for the next call after the third quarter.

Speaker #3: Thanks a lot.

Operator: This concludes today's call. Thank you everyone for joining. You may now disconnect.

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