Ambu A/S (AMBUB) Earnings Call Transcript & Summary

[Presentation] [Interpreted] With this brief film about Ambu's founder, Holger Hesse, who would have turned 120 a couple of weeks ago, I would like to welcome you all to this year's general meeting. It's a different AGM this year. Because of the COVID-19 situation, we have asked our shareholders to follow the AGM online instead of coming in-person. We do this to protect our employees and shareholders, but of course, also to show community spirit, the spirit that hopefully will bring us all safely through Christmas and towards brighter times. To have a good debate at the AGM, shareholders, the ones who follow the AGM via VP AGM portal will be able to ask questions in the chat function. The Chairman of the AGM will read out the questions, and then you can all hear the answers. The Chairman of the AGM is appointed by the Board of Directors. And we have appointed attorney at law, Niels Kornerup, and I give him the floor forthwith.

[Interpreted] Thank you very much for appointing me to be Chairman of the AGM of Ambu. I hope we'll have a very good AGM with a good debate. As the Chairman of the Board mentioned, we have a special way of handling the AGM this year because of the COVID-19 situation. I hope you have understanding for this. And it's our premier for an electronic dialogue with the shareholders who follow the AGM through the VP shareholder portal. There's a chat function, which the Chairman of the Board also mentioned, and I'll return to that in a moment. Alright, now, I want to mention that the shareholders who want to take part in the electronic debate need to log in and follow the AGM via the AGM portal of VP. You cannot ask questions electronically if you are following the AGM on the webcast on the company website. I also want to mention that the broadcast to everyone occurs with a slight delay of 20 to 40 seconds, depending on the Internet connection. We take that into account during the AGM, and I'll also return to that in a moment. Recordings from the webcast will also be stored so you will be able to see -- or once again, see the AGM on the company website as of tomorrow. My first task as Chairman of the AGM is to ensure that the AGM has been convened in accordance with the articles and ensure that we have a quorum. According to Article 10, Section 3 and 4 in the Articles of Association, the convening notice has to be sent out at least 3 and a maximum of 5 weeks before the AGM, both on the website and to the shareholders who have asked to be notified directly. The convening notice was sent out on the website of ambu.com with the complete proposals on the 13th of November this year. Under Investor Relations on the company website since the 13th of November, it has been possible to order an access card and give a proxy and vote by postal ballot. Various information has been available on the website of the company, and that is in accordance with Article 10, Section 4 and 5 in the Articles of Association and the Danish Companies Act. I can also mention that the convening notice was published via NASDAQ Copenhagen on the 13th of November this year. So the same day as on the website. Unless there any objections, I will conclude that this ordinary annual general assembly has been convened correctly and that we have a quorum for the agenda. Just before we started, 1 shareholder is present in the room. And I want to thank the shareholders who have decided to follow the AGM via webcast. We have received a number of proxies and votes. And 21.16% of the votes are represented here today, and that is [ 57.70% ] of the shareholder capital without any own shares. We have also received proxies and personal ballots correlating to 69% of the votes and 89.45% of the represented shareholder capital. The final and precise numbers appear from the protocol of the meeting. At early AGMs, I've mentioned the Danish Companies Act Section 101, Para 5, which requires a statement for all votes for each decision about how many vote for, against and how many abstain, even though the result is quite clear. We can disregard this requirement if there's agreement among the shareholders in the room, and I can conclude that we can disregard the requirement today as we have done in previous years. I now will explain how the debate and especially the electronic communication will take place and how it will be handled in practice. Everything happens through the VP Securities portal, which can be accessed via Ambu's website. Shareholders who follow the AGM via the VP portal can see the AGM live and can ask questions of management and the Board of Directors, and thus, take part in the debate. It will not be possible to vote electronically, and therefore, all shareholders have been asked to either vote by personal ballot or by proxy. And the vast majority of the shareholders have followed that suggestion, and I thank you very much for that. Through the portal, it's possible to ask questions for the items on the agenda when I open up for the debate on the individual items. [Operator Instructions] As the debate is in writing, I want to encourage people to be quite precise and concise in their questions. In that way, we will have a good handling of all the written questions. And as the Chairman mentioned, I will then read out all the written questions, and then they will be answered. As I also mentioned initially, there's a delay of between 20 and 40 seconds due to the Internet connection. Therefore, every now and then, I'm going to slow down to ensure that we are all synchronized between what happens in the room and what you see on the screens. So there will be small breaks, and that's not because any of us have forgotten where we got to, but it's just to ensure that we are all synchronized. Of course, we understand that it takes a little while to formulate a question. So of course, we'll set aside time for that. If you have a longer question as a shareholder, I would encourage you to send us a warning in the same way as you send the question. So you could just send a message saying question upcoming. Then we know that we need to wait for the question. And hopefully, that'll make things easier. If you have any questions regarding the technical side of things like how to ask questions, you can contact VP Securities where -- who have employees ready to answer questions. And their number is 4358-8894, and I repeat, 4358-8894. If you are abroad and you need help, you need to remember to call the Danish area code, which is 0045 or +45. The numbers are also available in the convening notice. I also want to ask the shareholder who is present here today to signal to me if he wants the floor. And because of the COVID-19 measures, there will be a microphone handed -- or directed towards the speaker to limit any exposure or contact. The agenda for the AGM is -- has been sent out to you, and it's also on screen now. And we'll start with the management report; then we'll have the annual report and financial statements for approval; then the remuneration report; and Item 4, appropriation of profits in compliance with the approved annual report; Item 5, remuneration of the Board of Directors by the financial year 2021; six, election of Chairman of the Board; election of Vice Chairman of the Board; eight, election of other members of the Board; nine, election of auditor; ten, proposals from the Board of Directors. There are 2 proposals from the Board of Directors to amend the Articles of Association; 10.1 about the register of shareholders; and 10.2 about electronic AGMs; and then Item 11, authorization to the Chairman of the meeting. And with that, we go ahead with the agenda. And as always, we cover the first items in unison. So management report, annual report, remuneration report and appropriation of profits en block. And the Chairman of the Board, Lars Rasmussen; and the CEO, Juan Jose Gonzalez, will deal with the report. First, I give the floor to the Chairman of the Board about the management report, and then the CEO will give us the financial report and talk about the strategies and the outlook for the current financial year. Juan-Jose Gonzalez will speak English, and it's possible to have simultaneous interpretation if you want to listen to that part of the speech in Danish. And of course, there's also interpretation into English if you don't understand Danish. And with that, I give the floor to the Chairman of the Board, Lars Rasmussen.

[Interpreted] As in many other companies, the financial year has been characterized by the COVID-19 pandemic with fluctuations in demand and a lot of practical challenges from lockdowns, et cetera. On behalf of the Board of Directors, I would like to thank our employees for ensuring continuity throughout this difficult year. From a management point of view, it's been a very important priority that Ambu's employees have been able to still take care of their work as safely as possible. Therefore, work at home, distance, high hygiene, digital ways of communicating have been very important to Ambu's employees. Ambu has been strengthened in the financial year of '19/'20. With an organic growth of 26% and the launch of 3 new products, ambu has expanded its position as a leading company in single-use endoscopes. The commercial infrastructure, sales and marketing has increased significantly throughout the year, primarily in the U.S., but also in Europe and Japan to support the current and future product launches. The 3 new products which have been launched in '19/'20 are 2 single-use endoscopes, a cytoscope and a duodenoscope, and a new generation of the aView monitor, i.e., the monitor used with the scopes. These are important products as they reduce the patient's risk of acquiring an infection, and they mark Ambu's entrance into the market for urology, i.e. the urinary tract, and GI, the gastrointestinal tract. The 3 products also reflect the technological development Ambu drives when it comes to single-use equipment and which makes us the market leader. As part of maintaining this position in the forefront, Ambu has invested in innovation and increased development by 80%. The plan for future product launches, i.e., the pipeline, is extended. So we now have 20 planned launches for the next 3 years. The investments are to ensure the long-term value creation in Ambu. The share price has developed positively throughout the year. It's increased by 58% from DKK 114 to DKK 180, which has brought our market cap to DKK 44.6 billion as of September 30, 2020, when the financial year closed. On the graph on the left, you can see the development in the share price and our market cap over the past 10 years. 10 years ago, the share price was DKK 7, so it's been a significant increase of, on average, 38% a year. The graph on the right shows the share price compared to the C-25 index. Management remuneration has been described in the Remuneration Report for '19/'20, which shows changes in the remuneration policy, which were decided last year. That means that management's share-based pay is now based on shares instead of options, and the maximum value of share pay is 4x the base pay, and there are no longer parallel share programs. With an organic growth of 26%, it was above the target of 16% to 22%. And because of that, the management will get close to its maximum bonus and has been allocated the maximum in possible share instruments. The 3-year share program called Big 5 from 2017 to '20 is finished with an allocation of 21% of the share instruments. The target for the 3 years were ambitious, and the allocation degree of 21% is a consequence of the fact that the long-term goals in that period were only achieved to a limited extent. The purpose of the remuneration policy as a noble management instrument is to ensure a clear correlation between the return the shareholders receive and the pay management receives. We believe the remuneration policy is in correlation with good practice with similar companies in Denmark. Over the financial year, the Board of Directors has had 11 meetings. There have also been meetings in the committees, the Remuneration Committee, the Audit Committee and the Nomination Committee. In accordance with the recommendations for corporate governance, the work has been evaluated in an external study. That has given us further inspiration to a Board that is already well functioning. I mentioned the remuneration of the management, and now I want to mention remuneration of the Board of Directors. As you can see on the graph, Ambu's Board receives -- is among the lowest paying of the C-25 companies. We don't find that appropriate. So under Item 5, we propose that the remuneration of the directors are increased next year. We continuously look at the recommendations for corporate governance, and we comply with them. The new recommendations were published a year ago and will enter into force as of the financial year '21/'22. And we don't believe it'll result in many changes for Ambu. Finally, I want to mention that I will be stepping down as Chairman of the Board today. The reason for that is a potential future conflict of interest. It might occur if Coloplast at some point might decide to go into the area of scopes. I've decided to step down as Chairman of Ambu to make it quite clear that both Ambu and I live up to the highest standards of corporate governance. And with that, I want to end my part of the report and let Juan-Jose go through the strategy and financial results. But before that, you'll see a small selection of... [Presentation]

Hello, everyone. It's difficult not to look at that video Working Ambu and get emotional in terms of thinking what makes Ambu a unique company. And I will say it's our people. It's the culture and the values that we show every day. And everything we will talk about today, our strategy, the progress, our financial performance at the fore reflects the dedication and courage and commitment of all the Ambu employees globally. Now when we talk about Ambu, we also talk about the single-use endoscopy market. And that market is considered one of the most attractive markets in medtech globally. It's a market that today, it's $500 million, and it is forecasted by 2024 to be around $2.5 billion. There are very few markets that have developed so rapidly. And the main reason why this market is emerging is because if you look at endoscopy today, if you look at how endoscopy is being done, reusable endoscopy, if you look at the technology available today, you wouldn't do it in the way it is being done. You wouldn't invest $100,000 in towers and reusable scopes that will break or cannot be cleaned and sterilizing in a way to avoid the risk of contamination, a system that doesn't give you a lot of flexibility and convenience. And that's why single-use endoscopy propose a better way to go about it. It allows you to give you 100% sterilization. It give you a more compelling economic offering. It give you the flexibility to be able to do endoscopy in different sites of care and in different parts of hospitals. It also reflects all the rapid technology advancements, whether it is sensors or image enhancement software or mechanics. These technologies are moving very rapidly and are allowing single-use endoscopy to perform at a very high level and competitive to reusable endoscopy. And finally, it's receiving all the support from governments, regulators and associations around the world, whether it is the FDA or CMS in the United States or NICE in the United Kingdom or all the major pulmonology associations around the world. And they believe that single-use endoscopy can play a very important role in the execution of endoscopy procedures. Now within this market that is being created, we will expect competition. And there are major player announcing that they will enter into this market, and they are showing very high levels of commitment. So the question is, what is the ability of Ambu to compete, to create this market and to make sure that we maintain a leading position there? And there are 3 reasons why we will be able to compete. Number one, we are today the global leader in single-use visualization. We have been in this market for 10 years. We actually created this market. We have deep experience in terms of what it takes for a hospital to migrate from reusable to single use. We have a modular innovation engine and high-scale locos manufacturing that allow us to bring to market significant innovation at a higher scale and at a price point that allow hospitals to migrate without incurring into higher cost. And finally, we have a dedicated commercial organization, which is 100% focused on single-use visualization. And it is on the back of that, that we have created an incredible growth engine for the company. And as you can see, this business, which was a fraction a decade ago, today represents about 50% of the global sales of the company, and we are just starting. Now it's difficult not to talk about the achievements last year without referring to COVID-19. And I guess when we all look back, we could have probably guessed that, at some point, the world will face a pandemic of these proportions. COVID-19 is not the first one that we all faced as a society. And yet, the scale, the mortality, the unique characteristics of a virus really put significant pressure across health care systems and economies around the world. The impact will be felt for many years, still. And the mortality rate and what we are facing today and what we will probably face during the winter is going to continue to challenge all of us. It's important for you to know that everyone at Ambu understood our responsibility as our products are used in the treatment of COVID-19 patients. And we prioritize to make sure that we brought our products right where they were needed the most, whether it is around rapidly expanding our manufacturing capacity, airfreighting our products to the countries and cities that were under the most pressure or making sure that we understood from governments and different organizations in terms of how best we could be more helpful. And that has been a very important achievement of the company. Now what COVID-19 also did was increase the focus on infection control. In the middle of a pandemic, the ability to restart elective procedures really depends on whether you can actually treat a patient without compromising its health or the health of the next patient. And in the middle of all of this, the awareness of what single-use endoscopy can do, whether it is in pulmonology or urology or GI, significantly expanded. And that's why we say that in spite of all the challenges that we have faced, we believe that Ambu and the single-use endoscopy market will emerge from this pandemic with more attractive prospects. Now our strategy is very simple, it is to maximize our first-mover advantage. It's around focusing on the highest potential segments and geographies. The U.S., Japan, Western Europe are going to be critical for the future of the company. The segments, whether it is cystoscopy or ureterscope or duodenoscopy or bronchoscopy, to understand what is a relative level of attractiveness of single-use and how best to enter there. Our strategy also is focused around scaling our innovation and manufacturing engines. We built our R&D center in Germany. We expanded our R&D centers in Denmark and Malaysia. We announced that we will be building a new single-use manufacturing plant in Mexico. All those reflect our focus on making sure that we compete by leveraging our competitive advantages. We also announced very important investments to build our best-in-class commercial organization to enter into GI and urology, markets that we believe will be very important as these market develop. And finally, we also set very key concrete metrics around sustainability. We also focus around our talent. Over the last year, around 1,000 people joined the company across manufacturing, innovation and our commercial organizations. In making sure that we were able to onboard them from the top endoscopy companies and medical device companies around the world, we made sure that they understood our culture and values, the way we operate, our strategy and priorities. And to maintain our performance has not been easy, but that has been a key priority for us. And it is very encouraging to realize that talent that work in endoscopy, that understand the market and live it every day can see that shift from reusable to single-use and can see how Ambu is well positioned to become a major player there. And on that basis, leave their jobs and join the company. Now at the heart of the company, it's our unique R&D engine. It's an R&D engine that reflects all of our expertise in terms of single-use endoscopy, combined with the expertise in modularization from the automotive industry; with the rapid innovation cadence of consumer electronics; and to create something that has not been built before within medical devices; and add in the organization that is able to come up with products very rapidly, that is able to move to the next-generation of technology at a significant scale. And that can be seen in our pipeline. If you look at the last 3 years, we introduced 5 new products. And if you compare that with the next 3 years, we will be introducing 20 new products, 4x more launches. We will bring an innovation cadence that will be very difficult to match in single-use endoscopy. This will allow us not only to enter across all the major endoscopy segments, but in every endoscopy segments to make sure that we have a complete offering in terms of sizes, specialty scopes, and on the back of that, become the partner of choice to health care systems. We can actually already start to see that. The announcements in terms of GPO, preferential agreements, in the U.S. is a very good example regarding how health care systems see the value of Ambu's broad portfolio, see the incredible potential of our pipeline and why, as they also look to embrace single-use endoscopy, they see Ambu as the ideal partner. Now it is not just about financials and building a company. It's also around making sure that our impact on the environment and society in general is a positive one. And we have significantly increased our focus on sustainability. Last year, we achieved our target of being 100% phthalate-free. We have clear targets around PBC-free for 95% of our new products, around 100% recycling and reusable or compostable packaging by 2025, around reducing our carbon emission by 50% by 2025 and increasing our level of diversity. We are committed to this objective. We believe it reflects the values of the company, the values upon which the company was founded, a company that is not only going to be known for innovation, but also for its positive impact in the world. Now all of this strategy has been translated into a very strong performance. Last year, we grew 26% in revenues, on the back of our single-use endoscopy division growing 81%. On the back of our investments, our EBIT margin reached 12%, and we sold over 1 million endoscopies. That's 5x more volume than the next competitor in single-use endoscopy and further strengthening our high-scale, low-cost manufacturing. Now when you look at those results from a P&L point of view, you can see here a comparison between '18/'19 with '19/'20. You see that 26% organic growth, but you also see a very positive increase in our gross margin. This is because our single-use endoscopy products have a higher gross margin. And as we grow that division, you will see year-over-year positive improvements in our gross margin. You also see the major commitments we have made, especially in terms of our commercial infrastructure. Our selling and distribution costs increased 61%: to prepare to enter into GI and urology, to get ready for the introduction of these 20 new products over the next 3 years. And all this translated in a 12% EBIT margin. Now if you look at this from a cash flow point of view, all these investments also translated into a negative free cash flow of minus DKK 133 million, which is about 4% of our annual revenue. Our total net interest debt increased from about DKK 1 billion to DKK 1.3 billion, which gave us a net interest-bearing debt over EBITDA of 2.2. And our working capital increased to DKK 581 million, and this also reflects the fact that we went directly in the U.S. and Japan after terminating the distributors. Now these investments were not just for last year. These investments will pay off in 2020 and 2021, and our guidance reflects that. We have said 17% to 20% guidance in terms of revenue growth. The full year effect of our investments will make our EBIT margin to be around 11% to 12%. And we have a target of 1.3 million to 1.4 million endoscopy unit sales. And on the back of this, we will consolidate our position as not just the largest but also the fastest-growing single-use endoscopy player. Now we have a unique position for value creation. Our 2025 aspiration is to be the broadest and most innovative player in single-use endoscopy. Our aspiration is to be a company which is more global, that have a major commercial presence across all the key markets and a company to be known not just for its growth profile, but also with strong top-tier shareholder returns and environmental credentials. We believe this is possible to achieve. And I would like to thank Lars for everything he did over the last year. We took very important decisions, and we clearly finished the year as a stronger company. And I'm looking forward to see the appointment of Jørgen Jensen as our new Chairman. We have an excitement journey -- an exciting journey in front of us, and I look forward to his collaboration and leadership to make sure we meet our aspiration. Thank you very much.

[Interpreted] Thank you very much for the Management Report for the financial year '19/'20 and for the Remuneration Report. Before I open the debate, I want to mention that the Annual Report has been signed by the Board and management and that there are no audit comments. And that appears from Page 90 to 93 in the Annual Report. Also want to mention that the Board proposes that we pay out dividends of DKK 0.29 per share. That corresponds to 30% of the net profit for the year, which is DKK 73 million, and the rest of the profit of DKK 168 million will be transferred to the reserves. I will now open the debate and will also make a small break in the transmission so that the shareholders have time to write their questions.

[Interpreted] [Operator Instructions] And while you write your questions or think about how to -- what to ask, I want to take the first intervention that has already been sent in, and that's a comment from the Danish Shareholders Association. And he writes, "Thank you to the management for a good management report. In the Danish Shareholders Association, we greatly appreciate that we stick to shareholders' democracy where contributions are read out and answered by management. Ambu has a large number of private investors, and the need for an ongoing close dialogue also outside the general meeting has never been greater. We would, therefore, like to invite the company's CEO to meet virtually or physically directly with the private Danish investors in 2021. We are happy to provide monitors or facilities. At last year's Annual General Meeting, we commended the management for maintaining the overview with strategic adaptation in a very changeable time. The past year has, in many ways, proven to be even more volatile in the world around us. So again, this year, I want to praise the good way you've handled the corona crisis and for having brought the company's share price back on track. Ambu's new management has chosen a more aggressive growth strategy than before, and the coming years must prove to shareholders that the expected growth can be realized. The first question I want to ask is, what 3 selected risks does management consider to be the 3 most significant for Ambu in the next 12 to 18 months? And second question, if you look at growth opportunities in the coming years, I want to ask, have there -- any new needs arisen during the COVID-19 pandemic that Ambu can address with new applications in the coming years? Third, one of -- thirdly, one of the important things for the Danish shareholders is successions, ensuring that we have good management candidates available. So my third question is, can you elaborate on how you retain and develop new strong management candidates to ensure that we have plenty of potential managers who are qualified towards 2025 and 2030? Another one of our important matters is whistleblower schemes, which we have seen become more current and which will become a requirement in '21 by EU requirement. So the question is, can you tell us how you work with the whistleblower scheme and whether there has been any use made of the whistleblower schemes in the past 12 months? In closing, we would like to wish Ambu all the best for 2021, and we hope we'll have a more predictable year." And these questions will now be answered, says the Chairman; 2 by Juan-Jose Gonzalez, and he will kick off.

Let me start addressing the first question around the risk. And I would say that the main risk for the company is around market creation. It's a fact that the single-use endoscopy market is just starting to be created. And it's difficult to know 3 things: number one, what will be the ability to penetrate each of the specific endoscopy segments; number two, what generations of technology will be required to drive significant levels of penetration; and number three, in which segment we will face more or less competition. And I will say, at the core, those are main risks that face the company. Now as I said, the future may be beyond our vision, but it's not entirely beyond our control. Ambu will play a very important role on determining how large the single-use endoscopy market is going to be. And that's why we invest so aggressively on innovation. That's why we talk about going to the next generations very rapidly, entering all the major endoscopy segments. That way, you see investments in our commercial infrastructure. I believe that the success of the single-use endoscopy market is tied to the success of Ambu and that we will play a very important role on fulfilling that aspiration. Now in terms of new needs emerging from COVID-19 -- from the COVID-19 pandemic, I will say there are 2 things. One is there is a need for much higher levels of infection control. How do you really avoid cross-contamination? And some of the way health care system manage contamination levels today vary significantly across geographies and across different endoscopy procedures. And I think on the back of COVID-19, it is clear now that those -- that management have to be improved. And as hospitals look to improve their infection control performance, single-use endoscopy is clearly a solution across, again, all the key endoscopy procedures. And then the second need is around pent-up demand. At the heart of the COVID-19 pandemic, there was a significant reduction in terms of elective procedures. So as vaccines are rolled out, and we go back to normal, there is a large number of procedures that have to take in place. And it's important that these procedures happen because of the impact in terms of patient health. Cancer screening, diagnostic, annual checkups, all this has to happen, and hospitals that have reusable endoscopy have a fixed number of procedures that they can do. And they are also seeing that with single-use endoscopy, they actually can increase the number of procedures that they can do every day, every week without significant investments. And the combination of this higher need of infection control and higher need to deal with pent-up demand is actually going to make the single-use endoscopy market accelerate. Now I'll leave you with Lars. He's going to answer the other 2 questions.

[Interpreted] The question regarding new management candidates in the pipeline, that's a very good question and very important question because every company depends on its ability to develop also when it comes to human resources. And when you have a company which has such a high growth as Ambu has, you're always a small step behind when it comes to managers because we are growing so fast that you easily use up your pipeline. But when you look at a company like Ambu, which has such an ambitious strategy, it's also a very attractive place to work. So we have the ability to attract new, very competent employees. And we can also provide them the opportunity for a career because we are growing, and therefore, we constantly need to employ new managers. So there are great opportunities in Ambu. So we need to employ competent people, of course, but also employ people who are ready to not just get a job, but get a career because that's what we can offer in a company like Ambu because we have this growth. And we are also a very profitable company, so we can invest in management development. So we are running to keep people -- keep attracting people, but we're also an attractive employer. So it's something we're very focused on also in day-to-day management because human resources are so important. Now the question about the whistleblower schemes, that's another thing that is very important because no matter how well a company is doing, you can get your reputation ruined if you don't behave the way you're supposed to. So therefore, it's important that we get the input as to how we do things internally but also externally. And that's why the whistleblower scheme is an important source of information so that we can follow up all the time because, of course, management can't be everywhere at once. So this is important information to get, and therefore, we are happy with the whistleblower scheme. It's easy to access it. You can access ambu.com. And at the bottom of the page, you can click with the whistleblower scheme and report whatever you might have to report. And we constantly encourage our collaborators and our employees to report whatever it might be because we want to catch things early. Thank you.

[Interpreted] Thank you very much for the answers to the Danish Shareholders Association. I want to ask if anybody else wants the floor. I do understand somebody has used the chat function and written a question. And of course, it's positive that, that opportunity has been used. The question is from [ Kurt Birke ]. "I want to start by commending the management and the Board of Directors for the excellent financial figures with an organic growth of 26%. There's no doubt that the competition for single-use endoscopes will be strong in future. So it's important to invest in new scopes and -- in order to maintain first or second position in the strategic segments. Therefore, I agree with the Board and with the management that it's important that Ambu continues to have an offensive investment strategy, of course, then resulting in a lower EBIT for a while. This was a comment. Now I also have a question. It's unpleasant that there are shareholders in number who send anonymous e-mails in order to push the Chairman of the Board out of the Board based on erroneous information. Why didn't the Board -- Chairman of the Board of Directors not just stay and wait to find out who was actually behind this anonymous e-mail?" So this was a question from [ Kurt Birke ]. I give the floor to the Chairman of the Board for the answer.

[Interpreted] Right, [ Kurt Ahling Birke ]. Thank you for the question. That's a question I've answered many times since I made the decision I made about stepping down. It's not that an e-mail was sent to the Board of Directors and to share analysts. It was also sent to all newsrooms in Denmark. Not to me, but it was forwarded to me. So it was not a shareholder who was interested in the value creation. It was a shareholder who wanted to provoke some kind of drop in the share price, I believe. I think that must be the conclusion when you look at the total picture. And you're quite right, there is no conflict of interest. Coloplast is a distributor of one of our products at the moment, and we knew that when I started in the company. But the reason why this e-mail was sent was that at the Coloplast Capital Market Day, there was a question to the management at Coloplast about urology, which is a small segment of Coloplast, only about 10%. And the question was whether the Coloplast might grow in that sector in future, and they didn't rule it out. And that's the reason why there's the whole debate. And of course, then you can ask, should Coloplast have said, no, we're not interested or should they have said, we need the appropriate growth possibilities? And I think Coloplast should be open to develop wherever they want. And if we look at it the other way around, if Ambu wanted to go into Stoma, I would have a conflict interest -- of interest the other way, and we would have to deal with it there. So you can say there's no conflict of interest now. But if Coloplast wants to move into this sector in 5 years' time, then there might be something. And didn't you already know that as Chairman of the Board in both companies? And even though I wouldn't have known, it would be difficult to convince people of that. So the debate alone could damage Ambu, and it could damage me in the longer term. And I don't think that's fair to me or to Ambu. So therefore, I've removed any doubt, and maybe you can discuss whether it was the right thing to do. But for me, it was the right thing because we're in a time -- we live in a time with a lot of transparency, both in the Boards and in day-to-day management. And I think it's very important to have a quiet setting where there's no discussion about things that are irrelevant. So that's my assessment. And it is a question of assessment and discretion because there's no conflict of interest now, but I want to ensure that there won't be one in the future either. And therefore, I'm stepping down.

[Interpreted] Thank you to the Chairman of the Board. That was the answer for [ Kurt Ahling Birke's ] comment and question. Are there any other questions or remarks? That does not seem to be the case. And you have had the chance to write any remarks. So I can simply note that the debate has been exhausted. That leads me to take note of the fact that the AGM has taken note of the Management Report, adopted the Annual Report for '19 and '20, adopted the Remuneration Report and approved the allocation of profits as proposed by the Boards because we have between 98.9% and 100% of the votes, and that leads me to establish that there is significant support for these proposals from the shareholders. That and Item 1 to 4 of the agenda. And that leads me to Item 5, which is the remuneration for the Board of Directors. The Board proposes that the remuneration be changed. And here, we refer to the report of the Chairman of the Board in which he explained the background for the proposal. The basic remuneration for the Board is proposed to amount to DKK 350,000 instead of DKK 300,000. The Chairman will receive 3x the basic remuneration. That means DKK 1,050,000. The Vice Chairman twice the basic fee, which is DKK 700,000. In addition, each member of the Audit Committee and the Remuneration Committee will receive a remuneration of DKK 117. The fee for the members of the committees will be changed to DKK 117,000. The members of the Nomination Committee do not receive separate remuneration. So there was an addition so that the members of the committees will receive DKK 117,000 instead of DKK 100,000. I now ask if any shareholders have any questions or remarks about this. And here, again, this delay in the broadcast can be relevant. So therefore, we will wait for a little bit so as to make up for this delay of 20 to 40 seconds. As we wait for any incoming remarks, I can note that this proposal can be adopted by a simple majority. And of the 452 million votes, all votes have voted in favor of the proposed remuneration for the Board of Directors. So I can simply note that nobody wants to take the floor. And on the basis of the votes cast, I establish that the proposal has been adopted. Moving on to Item 6 on the agenda, election of the Chairman of the Board. As it was published on the 9th of November 2020 and as we heard from the Chairman of the Board, Mr. Lars Rasmussen is not up for reelection as Chairman of the Board. And the Board of Directors proposes election of Jørgen Jensen as Chairman of the Board. Are there any other candidates? Should anyone else want to put forward their candidacy, please do so now. Luckily, we do have Mr. Jørgen Jensen with us here today so that you can see who he is, and I will briefly give the floor to Jørgen Jensen.

[Interpreted] Thank you, Niels, and also thank you to the Board of Directors for proposing me as Chairman of Ambu. I also hope to be elected very soon. I've followed Ambu for many years as an investor. I think Ambu is a very exciting company with a great potential. Therefore, I'm also pleased to tell the shareholders that today I have increased my investment in Ambu. And I look forward to working with the management, with the Board of Directors and all the very good employees in actually achieving our potential and our targets.

[Interpreted] Thank you very much to the candidate for -- to be Chairman of the Board. And I want to check whether anybody wants the floor or wants to become a candidate. And while we wait, I can say that 99.6% of the votes cast are for Jørgen Jensen. And as there are no signals as to anyone wanting the floor, I conclude that Jørgen Jensen has been elected Chairman of the Board, and I congratulate you and wish you all the best in your future work at Ambu. The next is the Vice Chairman of the Board. Mikael Worning is not up for reelection this year after being Vice Chairman for many years. Therefore, the Board proposes new election of Christian Sagild, who has been a member of the Board since 2012. And if there are any other candidates, I would like to hear from them now. While we wait, I can mention on behalf of Ambu that Ambu wants to thank Mikael Worning for his major efforts for Ambu and for the development of the company. On behalf of the company, I've also been asked to express the company's pleasure at knowing that he will continue as an ordinary member of the Board, which we will get to in a moment. But because of the COVID situation, I, as the Chairman of the AGM, bring forward these thanks. You can see information about Christian Sagild and his activities on Page 37 of the Annual Report. And while I wait for any comments, I can say that 99.5% of the votes casted are for Christian Sagild as new Vice Chairman. And as there are no other candidates also, Christian Sagild is now elected Vice Chairman of the Board. Congratulations to Christian Sagild. That brings us to Item 8 on the agenda, election of the other members of the Board. And the Board proposes reelection of other members, which is Britt Meelby Jensen, Mikael Worning, Henrik Ehlers Wulff. And under -- as under other items, I want to ask, whether anybody wants the floor or wants to become a candidate, they must signal now. And again, on Page 37 in the annual report, you can see details about these persons. As was clear in the notice, one from 2020, Oliver Johansen is not running for reelection. And again, because of the COVID-19 situation, I've been asked to thank Oliver Johansen for his time in Ambu's Board and for his major contributions. And with that, I want to ask whether there are any other candidates or any comments. And again, I can say that a vast majority of the votes already cast are for the candidates. That's more than 99% for. So again, I can just conclude that there are no other candidates, no comments, so the candidates are elected. And congratulations to the 3 of you, and also, God speed for you. So the Board now consists of Jørgen Jensen, Chairman; Christian Sagild, Vice Chairman; Britt Meelby Jensen; Mikael Worning; Henrik Ehlers Wulff; and also the 3 employee-elected directors, Thomas Lykke Henriksen; Jakob Bønnelykke Kristensen; and Jakob Koch. That was the end of Item 8, and that brings us on to Item 9 on the agenda, election of auditors. Here, the Board of Directors proposes reelection of Ernst & Young Godkendt Revisionspartnerselskab, based on the recommendation from the Audit Committee. And I have to note that the Audit Committee's recommendation has not been influenced by third parties and has not been subject to any agreement with a third party restricting the general meeting's election of certain auditors or audit firms. Are there any other proposals or remarks regarding this item? And here, again, this delay in the broadcast has to be made up for. But in all fairness, this is not an item that usually gives rise to any debate or other candidates. And I can note that 99.85% of the votes cast adopts the proposal of the Board to reelect Ernst & Young as the company auditor. That leads me to Item 10 on the agenda, proposals from the Board of Directors. Here, we have 2 proposals, Item 10.1 on the keeper of the register of shareholders and Item 10.2 regarding authorization to hold completely electronic general meetings. Item 10.1 about an update of Article 5, which is to be amended to make VP Securities the new keeper of registers. The reason being that the former keeper of the register of shareholders, VP Investor Services, have merged with VP Securities earlier this year. And that means that VP Securities now needs to appear in the Articles of Association as the keeper of the register of shareholders of the company. So it is a mere formality, but let me ask if anybody has any questions or remarks. It's not a very controversial proposal, and I can tell you that 100% of the votes cast are in favor. So there is no indication at present of anybody wishing to take the floor. So I can safely conclude that this proposal has been adopted. Item 10.2 on the agenda. Here, the Board of Directors proposes that the Board of Directors is authorized to resolve that the company's general meetings solely shall be held electronically without any physical attendance. That is as a completely electronic general meeting in accordance with Section 77.2 of the Danish Companies Act. The proposal is made for creating a new Article 10A in order to create the greatest possible flexibility for the company as a part of the preparation and holding of the company's general meetings, taking into account the COVID-19 situation and the increasing digitalization of the society. Let me here say that it is only the idea of this proposal that this should be taken into use under exceptional circumstances at that -- and that under normal circumstances, the AGM will be held physically. I can refer to the concrete wording of the new Article 10A, which will be seen on the screen now. Does anybody wish to take the floor in this respect? And while I wait for you to write any questions out at the screens, I can tell you that this requires a qualified majority for this proposal to be adopted. And I can note that 96.66% of the votes cast are in favor of this proposal. I do not see any indication that any comments are on the way. And with the votes cast, as I mentioned, I can conclude that this proposal has been adopted with the required qualified majority. That leads me to the final item on the agenda, Item 11. Here, the Board of Directors proposes that the Chairman of the meeting, that is me, with full right of substitution, be authorized to apply for registration of the resolutions passed and to make any such amendments thereto as the Danish Business Authority or other authorities may require or request as a condition for registration or approval as well as to continuously make and apply for registration of linguistic and other non-substantive adjustments to the company's Articles of Association. And with those slides, I open the debate. This does not usually lead to any heated debate, and I can note that everyone has voted in favor of this proposal. Are we receiving any remarks or comments? That does not seem to be the case, and that means that Item 11 has also been adopted. That leads me to say that our agenda has now been exhausted, and we now only have any other business. Does anybody want to take the floor here with any praise or criticism? Here, you can say anything concerning the company. However, you cannot table any new proposals under any other business. This is the last chance to take the floor should you wish to do so. I do not see any indication that anybody wishes to take the floor. That means the agenda is exhausted. No more shareholders want to take the floor. Thank you for a good and orderly AGM under these extraordinary circumstances and for the authorization to hold electronic AGMs. For me, it only remains to resign as Chairman of this AGM, and I pass the floor back to the Chairman of the Board to round off. The floor is yours.

[Interpreted] Thank you, Niels, for a very good chairmanship of the AGM. And welcome to you, Jørgen, as new Chairman of the Board. Congratulations on your election. I would also like to thank Ambu shareholders for a good AGM in spite of the fact that we couldn't look at each other's faces this year, but it has been interesting to follow the review of the year and hear about the strategy for the future. And finally, I once again want to thank the employees of Ambu for their enormous effort this year. There have been stumble blocks and special challenges, but their dedication and will to find good solution has been clear throughout. Also, thank you to my colleagues in the Board of Directors. And with those words, thank you for today and very happy holidays. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]