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

Good afternoon. In my capacity of Chairman of the Board, it's my pleasure to welcome you to this year's Annual General Meeting of Ambu A/S. Welcome to all shareholders and everyone else with an interest in Ambu. It's my first Annual General Meeting in my capacity of Chair of the Board. And I can assure you, it's been an interesting year: a year of growth, a year of expansion and a year of challenge. But most of all, it's been a year in which we have continued making a positive difference for doctors and their patients. The Chairman of this year's AGM has been appointed by the Board. This is provided for by Article 41 in the Articles of Association, and we have decided to appoint attorney at law, Niels Kornerup, Chairman of the meeting, and I will now hand over the meeting to him.

[Interpreted] We will have a good meeting and good debate. And as the Chairman mentioned, we are going to have the meeting in the same manner as last year because of the COVID-19 situation. So I'm inviting shareholders to participate digitally as far as possible, and I hope for your understanding. Shareholders who wish to participate in this way must log on through the InvestorPortal, so it's not possible to ask questions digitally if you follow the AGM through the webcast only. And I have to mention that the transmission to those of you who follow the AGM through webcast has a delay of about 20 seconds depending on your Internet connection. So we take this today into consideration, and I'll get back to that very shortly. Also, I can tell you that the recordings of the AGM will be recorded and will be made available on the home page so that you can see or watch -- or rewatch the AGM as of tomorrow, I suppose. But now my first task is to check whether the AGM has been duly convened and is competent according to Article 10, Section 3 and 4 of the Articles of Association. The notice had been sent out at least 3 and more than 5 weeks before the AGM through the home page and in writing to the shareholders who have asked for this. And the notice have been posted on the home page, ambu.com, and the complete text has been posted on the 15th of November this year. So unless there are any differing opinions, I can say I -- note that this meeting has been duly convened according to the Articles of Association and the agenda. A little pause to see whether there are any digital comments, there are not. So I take notice that this AGM has been duly convened and is competent to make decisions, and we note that in the record. Before we began, I was told that 79.39% of the votes represented and 54.31% of the share capital is represented again excluding own shares. A number of shareholders have followed the invitation to vote by mail or proxy and participate in that way. 99.68% of the represented votes have arrived by mail or proxy, which corresponds to 99.9% of the represented capital -- shareholders are represented by 99.9% of the represented votes and 99.9% of the share capital represented. In previous years, I've mentioned the company's Article 101, Section 5, which says that a complete record of voting must be made for every item of the AGM even though the result may be said to be quite clear, given the vote figures we have just heard. And we may dispense from this if we have unanimity about that, and I now will allow myself to note that we dispense with that rule. We do that. We have consensus, and thank you very much. Now I'll get back to how the debate and especially the electronic communication will be handled. As I said, everything takes place through the webcast on the InvestorPortal, which you can access through Ambu's home page. And we here in the rest of the room will concentrate on getting the best possible transmission and do that also by speaking [indiscernible]. Shareholders who follow the AGM in the InvestorPortal can follow the proceedings live and put questions to us electronically and participate in that way. It's not possible to vote and it's not possible to vote that way, as I said, and shareholders have been invited to vote by mail or proxy. Through the portal, you can ask questions to individual items on the agenda when I open up the debate for individual items. [Operator Instructions] The debate is going to be in writing. So I'll ask you to put your questions in the shortest and precise way possible and I'll then read the questions and we'll answer them from the roster. Now as I mentioned, we have a delay of about 20 seconds depending on your Internet connection. And for that reason, from time to time, I'll slow down so that we can synchronize what goes on in this room with what you see on your screen. So from time to time, you will experience pauses not because I or anybody else has forgotten what he or she wanted to say, but simply because we are trying to synchronize. We do understand that it may take a bit of time to write your questions -- to put them into writing and we will take that into account. So if shareholders have questions, which it will take some time to write then please send us a message worded as, for instance, question on its way or similar so that we know that we should wait for your question before moving on to the next agenda item. If you have questions of a technical nature, please get in touch with your next Securities on phone number 4358-8894. I repeat, 4358-8894. And that's where you'll find some very capable technicians who will be able to deal with your questions. And please don't use the web. Don't you use the home page for technical questions. And of course, if your phoning from abroad remember to dial 0045 or +45 before the number. Now if somebody -- some of the shareholders in the room, which will speak, then please make yourself known to me, and we'll make sure that your question will be transmitted and I'll make sure that everybody gets to speak. The agenda is on the screen behind me. We'll begin with a report of management about the activities of the past year and then the yearly report and accounts for approval -- remuneration report for approval. Item 4, the Board proposal for appropriation of profits in accordance with the approved report. Point 5, approval of Board remuneration for the year 2021/'22. Item 6, election of Chairman of the Board; 7, Vice Chairman. Point 8, election of other board members. Item 9, election of auditors. Item 10, proposals from the Board. We have 3 proposals. The first one is 10.1 is indemnification of Board members and members of the executive management; 10.2, an update of the remuneration policy; and the last one, item 10.3, a renewal of the Board's authorization to increase the B share capital. And 11, the Chairman's authorization. And with this, we are ready to embark on the agenda proper, and we'll take the first 4 items as one. That's how we usually do it in Ambu's AGMs and Jorgen Jensen and now Juan Jose Gonzalez will take care of the initial items. Now first, I give the floor to Chairman of the Board, Jorgen Jensen, who is going to speak on behalf of the Board and present the report for 2021. And then I'll give the floor to CEO, Juan Jose Gonzalez, who is going to speak about the report for 2021 and speak about expectations for this year. Mr. Gonzalez will speak in English, and we have simultaneous interpretation into Danish if you wish to hear the CEO's intervention in Danish and just as the Danish speeches will be interpreted into English. And with that, we will begin with a video. [Presentation]

[Interpreted] With this video as an introduction to single-use endoscopy, I wish to emphasize that our long-term strategy is precisely the continued establishment and expansion of this market. Single-use endoscopy is one of the most attractive markets in med tech. In the past year, we have seen that the 3 prime drivers in the market have grown, drivers that helped expand the market from a total potential of approximately DKK 3 billion today to approximately DKK 15 billion in 2025. First of all, there is continued and increased control on -- focus, sorry, on infection control. This focus is on the part of the regulatory authorities, public and private payers and the health care systems. Also COVID-19 pandemic reminds us all of the importance of minimization of contamination. Over the years, we have seen the U.S. health authorities, the FDA, communicate about infections in connection with endoscopes for the urinary tracts and the airways. This underpins the need for single-use endoscopies. Secondly, it remains vital for health care systems all over the world for single-use endoscopy to improve work processes and efficiency. Single-use endoscopes help improve productivity. We have seen this most recently with the success achieved by our most recent launches in ENT and urology. And thirdly, by means of single-use endoscopes, we can very swiftly bring new technology in the hands of the users. This year, for instance, we saw how our development teams were capable of responding to user feedback and launch our aScope Duodeno 1.5 in record short time. We also see more competitors entering the field, and this makes us believe even more that the market for single-use endoscopy will grow rapidly in the future. The Ambu case is a growth case. We invest in the creation and the leadership in the market for single-use endoscopy. We launched the world's first single-use bronchoscope in 2009, and today we remain the biggest across a number of clinical areas. Last year, our revenue passed the DKK 4 billion mark. Earnings before tax came to DKK 340 million and earnings ratio of 8.5%. And we sold more than 1.5 million endoscopes. We continued our momentum from the past year by achieving 60% in organic growth. This will appear from the diagram on the screen, on the left-hand side of it. On the right-hand side of the screen, you see the diagram reflecting growth in the Visualization area, which came to 31%. Both growth rates, mind you, come on top of a year with very high growth rates last year. I believe that we are entitled to take pride in the growth achieved this year, in particular, because of the global uncertainty that has prevailed a year in which the fight against the COVID-19 pandemic has continued to play a major role and created unforeseen circumstances. I also wish to point out that the growth achieved in the year was below our expectations. And this is because like most other international businesses, we were affected by disruptions in the global supply chain. On the Board, we have followed developments in the COVID-19 pandemic very closely. And on an ongoing basis and in close dialogue with the Ambu management, we have related actively to the change in circumstances caused by the pandemic. There is still disruption such as increased pressure on hospitals and cancellation of planned treatments and examinations, delays and more -- or higher shipping prices and the lack of labor in certain sectors and a higher inflation rate. Many of these macro trends have affected companies across sectors and some have been more specific to companies in the health care sector. But Ambu has a very special and very important role to play. We help society reduce contamination. We help increase infection control. We enable hospitals to be better at delivering health care services in a healthy and safe manner, or to put it differently, Ambu helps save lives worldwide. The best thing we can do for Ambu and for our customers is to continue developing innovative single-use equipment, take it to market and expand our organization and our infrastructure. In that way, we secure long-term growth. Looking ahead, our strategy is actually fairly simple. First of all, we intend to build the most comprehensive and most technologically advanced portfolio within single-use endoscopy. We also wish to make sure that there is a full product portfolio that accompanies it. Secondly, we intend to use our production setup, which is characterized by a high volume and low cost, to offer hospitals a cost-neutral transition to single-use equipment. And thirdly, we intend to maximize the advantages offered by our pioneering status. We will, at a high speed, develop our commercial infrastructure, which is tailor-made to deal with single-use equipment. These 3 pillars of our strategy will enable us to maintain our position as leading player in single-use endoscopy. Our prime task is to improve treatment of patients by delivering innovative products for doctors and nurses. We have a responsibility to act responsibly in relation to one another, our partners and the environment. Ambu has 4 overall targets for sustainability towards 2025. We must halve our CO2 emissions. We must make all packaging reusable or compostable. We must phase out PVC from 95% of our new products. We must achieve a rate of 40% of women in management positions. And we are doing an ongoing effort to meet these objectives. One of the achievements in the past year is our commitment to adjust our objective for the reduction of CO2 emissions. Our objective now tallies with Science Based Target initiative and the Paris Agreement's ambition to keep global temperature increases below 1.5 degree Celsius. The new target we have set for the CO2 reduction is at least as ambitious as the current target. And with these words, I'll now hand over to our CEO, Juan Jose Gonzalez, who will deal with the next part of the management report.

Thank you very much, Jorgen. It's a pleasure to have you as our Chairman. Jorgen spoke about our vision and strategy for the company. Let me now talk about the progress over last year, 2021. First of all, in terms of context, it was a year with significant volatility on the back of COVID-19 pandemic, especially in the second half, with COVID delta variant, the world was under significant pressure. The intensive care units in hospitals being overwhelmed, elective procedure being depressed, disruptions in terms of supply chain and raw material and logistics inflation. It is understanding why some companies will choose to stop and wait, to wait for more stability before they continue with their journeys. But that was not the decision we make. We believe that in spite of all the volatility, the best thing we could do for the company was to move forward to maximize our first-mover advantage and continue to lead the creation of a single-use endoscopy market. And our 3 priorities were, number one, to ensure that we fulfill our responsibility with society. Many of the Ambu pros are using the treatment of COVID-19 patients, whether it is our resuscitators or our single-use bronchoscopy. We focus on making sure that those products were available there wherever they were needed the most. We also focused around bringing new products to market, to create new single-use endoscopy segments. And finally, we work on strengthening our infrastructure and capabilities in terms of innovation, manufacturing and our commercial infrastructure. So let's look at the results. First of all, we achieved a very important milestone last year. For the first time, single-use endoscopy accounted for over half of the global sales of a company. And as you can see, has been a remarkable journey from the time we started to what it has become today, the #1 growth engine for Ambu. Now when you look at single-use endoscopy, the track record over the last 3 years is remarkable. Our 3-year compound annual growth rate in terms of revenues was 37%; in terms of volume, 40%. And we actually, in 3 years, triple our volume exceeding the 1.5 million scopes. Now it's not just this rapid growth what is distinctive about last year. We placed very important bets. We have always had a commanding position in pulmonology, where we have been the #1 player with over 95% global market share. But we also place bets in 2 new markets, in ENT and cystoscopy within urology. These 2 markets are 6x bigger than pulmonology, are markets where contamination is not really an issue. We basically tested our value proposition on the basis of bringing technologically advanced products with attractive economics and just with a benefit around convenience and flexibility. And as you can see, last year, we continued to rapidly grow these new platforms. We became the #1 player in ENT. And on the back of our Cysto launch, we also became the #1 player in urology overtaking Boston Scientific that has been in this market for 6 years. It just gives you a good hint in terms of the ability that we have not just in terms of bringing new products but also commercializing. And as you can imagine, we are just starting and we expect that ENT and Cysto will continue to be important growth engine for the company as we move forward. Now we also placed an important bet in GI. We finished last year with the launch of our Duo 1.5. And this is a very important launch. We believe that duodenoscopy is going to be one of the largest single-use segment by 2025. Whether it is the risk around contamination or the special reimbursement to incentivize hospitals to migrate, there are all the conditions for single-use to penetrate this segment rapidly. So let me share with you the feedback from top key opinion leaders around the world on our duodenoscope 1.5. [Presentation]

In the last quarterly earnings, we shared the early results of our clinical study. We are at 98.5% success rate, showing that our aScope Duo can perform across all levels of complexity. Similar to pulmonology and ENT and urology, we expect to be the #1 player in single-use duodenoscope in a short period of time. Now why are we able to do this? At the core, we have created a different medical device company, one that have a unique R&D engine. An R&D engine that leverage all the expertise in terms of modularity from automotive with a rapid cadence of consumer electronics, and that allow us to develop multiple products at very high levels of efficiency with a very short time to market. This is at the heart of a company, what allow us to be able to do what most companies cannot do. And let me just give you, as an example, of our pipeline. If you look at the 3 years from 2017/'18 to 2019/'20, we introduced 5 single-use products. Now if you look at the next 3 years, we are planning to introduce 4x the number, 20 new products. That basically means that by 2022/'23, we are going to have the most comprehensive portfolio with the most advanced technology in all the endoscopy segments that we compete. A lot is said about competition entering into single-use endoscopy. If we look at our 2 largest players, in the time that we are introducing 20 new products, they are introducing 2 to 3 each to just give you a sense in terms of the significant competitive advantage that we have in terms of innovation. And the fact that although competitors will have us to open the market, we plan to continue to be the leading player in single-use endoscopy. Now last year, we focused on making sure that we strengthen our infrastructure and capabilities, that we make sure that the 3 main competitive advantage of Ambu continue to be reinforced. In terms of our model and innovation, last year, we built our R&D center in Germany. It's specifically focused in GI products, and we'll be leading the development of our next generation in duodonescope , Gastro, Colon and cholangioscope. We also, last year, announced that we were building our Mexico plant. This is going to be the world's largest single-use endoscopy plant and will allow us to make sure that we maintain our high-scale, low-cost advantage, which is basically what is enabling us to have very attractive margins and pricing that allows hospitals to migrate rapidly from reducible to single-use. And finally, we continue to strengthen our commercial infrastructure. In the U.S., now we have 3 groups: one focused in bronchoscopy in that we'll be launching our aScope 5 and entering into the broncho suite. Another group focused on ENT and urology that will continue to drive a rapid penetration and introduce our next generations in terms of ENT, high resolution and high definition and new indications like FEES and a GI group that is commercializing our Duo 1.5, our Duo 2.0 and then our Gastro, Colon and cholangioscope. It is these 3 competitive advantages, each of them is stronger than a year ago, and combined, what allow us to make sure that we remain the most competitive company in single-use endoscopy. Now to summarize our financial results in 2021. In terms of revenues, we exceeded DKK 4 billion for the first time. We grew 16% on the back of 26% growth the previous year. We enhanced our gross margin from 62% to 62.4%. And we delivered an EBIT of DKK 340 million with 8.5% margin. Now we are facing a similar condition to the ones we faced at the beginning of last year. And that world is being challenged by a new variant of COVID. We know that Omicron is going to put significant pressure on all health care systems around the world. It's a time of change and challenge. And similar to what we did last year, we will continue to invest significantly behind the company to make sure that we maximize our first-mover advantage. And our guidance for the new year reflects that. We have a sales growth target of 15% to 19% and an EBIT margin of 7% to 9%. With this guidance, we consolidate Ambu as one of the fastest-growing medical devices companies globally. Now everything that has been achieved and everything that will be achieved in the new year, all that is thanks to the perseverance and dedication and ingenuity of the Ambu colleagues around the world. Our organization in manufacturing in Asia Pacific and the U.S., our R&D centers, our commercial organizations and everybody that is working in headquarters and around the world to make this possible. We all have different backgrounds and come from different places and have different roles in the company, but we share a common aspiration: a desire to bring single-use endoscopy to all the health care systems around the world. Because it's better for patients because we believe that patients deserve a product without any risk of contamination. Because it's better for health care systems to be able to have affordable, advanced technology that gives them the convenience and flexibility to do more with less, especially if they are facing labor shortages. And because it is better for the world because single-use endoscopy is not only going to have a positive impact in the developed world, in Europe and the U.S. and Japan and Australia, but especially in emerging markets, in Latin America, in Asia Pacific and in the Middle East. This is our aspiration, and I look forward to give you an update next year. Thank you very much.

[Interpreted] As announced by the Chairman of the meeting, I will now go over items 3 and for on the agenda. First of all, the remuneration report, which appears at the same time as the annual report. The relation report gives a detailed overview of the components of remuneration to Ambu's top management. As I said, our revenue increased 16% in the fiscal year after an increase of 26% the year before. Only a handful of med tech businesses were capable of growing revenue in 2 digit terms in the first year of COVID-19 and repeat the success the following year. But our ambitions were higher. We have set a target of revenue growth between 17% and 20% for the year. And against this backdrop, neither the CEO or the CFO will receive any long-term incentive pay, also called LTI, for the year. The short-term incentive pay, STI, is paid out at 11% of the maximum amount. And this is in accordance with the level of fulfillment of the objectives defined by the beginning of the year. So the payout ratio of the year is 0% and 11% in reflection of the difficulty of the year, both in terms of external and internal challenges, but also a year in which, in particular, the recently launched cystoscope exceeded the original expectations. Now I'd like to proceed to the appropriation of profits. For a number of years, we have maintained a policy of paying dividends in the region of 30% of the result for the year. However, the Board assesses its dividend policy on an ongoing basis, which means that we check whether major investments, acquisitions of companies, anything else that affects our debt structure ought to give rise to an adjustment of our dividend policy. With an equity capital of DKK 3.95 billion and an equity ratio of 69%, the Board feels that the financial reserves at the present stage are satisfactory. And that's why we wish to continue the dividend policy hitherto pursued by Ambu by paying out 30% of the profit for the year, DKK 247 million. So we proposed that a dividend be paid of DKK 0.29 per share or a total of DKK 75 million, which means that the remaining DKK 172 million, according to our proposal, will be transferred to the reserves. The similar values for last year will appear in brackets on the slide. The dividend will be available to shareholders at some point within the coming 2 to 3 bank days. Ambu relates to the recommendations for good corporate governance on an ongoing basis, and I can inform you that we follow all recommendations. The new recommendations will take effect, for us, effective from the fiscal year just started, which is 2021/'22. And we believe that the new recommendations will only lead to few changes in Ambu. The annual evaluation of the Board has been carried out internally, and the conclusion was that there is a good cooperation between executive management and Board. Ambu's share price has demonstrated a lot of volatility in the course of the fiscal year. As a result of the impact of both internal and external factors, I believe that everyone that follows us today know this very well. From opening to closing of the fiscal year, the share price increased 5% from DKK 180 to DKK 190. And at the end of the fiscal year, our market value was DKK 48.2 billion. And for your information, yesterday, when trading closed, our share price was DKK 179.75. Ambu has been a good long-term investment. This appears from the graphs on my slide here. In the period from 2011 to 2021, the share price has increased from DKK 7 to DKK 190. The average annual growth in the share price has been 39% in this period, which is considerably above the C25 Index. With these words, I end the management report and give the floor now to the Chairman of the meeting.

[Interpreted] Thank you on behalf of the shareholders for the report for the year 2021 and for the report on remuneration for the same and the proposal for appropriation of profits. Before opening the debate, I have to inform you that these reports have been signed by Board and executive management and has been approved by the auditors without comment. I refer you to Pages 88, 90 of the yearly report for the year 2020 to '21 if you wish to check that this is correct. Now I want to get out to mention that the Board proposal for appropriation of profits amounts to DKK 0.29 per share of DKK 0.50 corresponding to a total amount of DKK 25 million to be paid out and this leaves equity of DKK 3.5 billion to DKK 3.9 billion. Now having said this, I open the debate and nobody seems to have asked for the floor but we have a bit of delay. So I will slow down my rate of speech in case somebody wants to send us a question. No? That does not seem to be the case. So I think that even taking into account the delay, we have given sufficient time. Right, so on that basis, I consider closed this part of debate. And based on the votes given, I note that the AGM has taken note of the report from management and the Board and the remuneration report and also has approved the proposal for appropriation of profit. With that, we have closed items 1 to 4, which quite naturally leads us to item 5, the approval of the Board of Directors' remuneration for the financial year 2021 to '22. And the Board proposes -- the proposal is presented in the notice, but I can just recapitulate that the ordinary members of the Board of Directors receive a basic remuneration DKK 350,000. The Chairman receives 3x that sum, that is DKK 1,050,000. The Vice Chairman receives thrice the basic remuneration, DKK 700,000. And in addition, each member of the Board committee receives DKK 175,000. The Chairmanship and members of the Board committees receive DKK 117,000 per committee seat. And so the figures are unchanged with respect to last year. As you can read in the notice, the Board of Directors now also proposed that the Chairman of the Innovation Committee and the Nomination Committee be paid a fee for their work. So the figures are unchanged, but the number of fees has been expanded. And would anybody like to take the floor in this context, in the room or around the world? No? That does not seem to be the case. Right, so I noticed that the Board's proposal has been approved, which is absolutely unproblematic given the proxies given to the Board. This leads us to item 6, election of Chairman of the Board. The Board of Directors proposes reelection of Jorgen Jensen as Chairman of the Board. About Jorgen Jensen's executive positions, I can refer you to Page 36 of the annual report. Are there any other candidates for the post? No? That does not seem to be the case. So Jorgen Jensen has been reelected. Congratulations on the reelection and good luck with your future work. This leads us to item 7, election of Vice Chairman of the Board. The Board to propose reelection of Christian Sagild as Vice Chairman, and Christian Sagild's executive positions can be found on Page 36 of the annual report. Are there any other proposals from that post? That is not the case. In that case, Christian Sagild is reelected as Vice Chairman, and congratulations and good luck to you as well. This leads us to item 8 on the agenda, election of other members of the Board. The Board proposes that Henrik -- the following members be reelected: Britt Meelby Jensen and Henrik Ehlers Wulff. As mentioned previously, Mr. Mikael Worning is not up for reelection. The Board proposes to elect Susanne Larsson and Michael del Prado. Susanne Larsson is with us today. May we see your face? Would you come up here?

Hello, everybody, dear shareholders. So I will turn this into English. A Swede living in Göteborg on the West Coast of Sweden, married with 2 grown-up children, a son and a daughter. Professionally, I've worked for around 30 years, and I've spent my experience, mainly global-listed industrial companies like the SKF group and the Gunnebo securities group. Since a couple of years back, I've also been exposed to the health care industry and the medical device industry through the current assignment I hold within Mölnlycke securities. My work life experience covers all spectrums of finance, business control, IT, strategy and business development and IT. I've led many change management initiatives and transformational tasks to try to improve ways of working in the organizations I've been part of. I've held CFO positions in listed companies and currently I hold the CFO position in Mölnlycke health care. This includes then finance, IT, global business services, strategy, M&A and indirect procurement. I have also owned experience from Board and Audit Committee. First, operationally, being the Secretary of the Board in companies where I've worked and also managing a lot of the audit committee work. In addition to that, I've also been part of Boards previously. So I hold board positions in Mercuri Urval, an executive search company, and I've shared foundational work at the university in Göteborg. I currently hold another Board position in a Danish European company named DOVISTA, where I'm also sharing the Audit Committee. And today, I'm here because I'm both excited and honored to be considered for the election of the Board of Ambu, where I'm also intended to share the Audit Committee. Ambu is a highly reputable company with a long origin, started 1937 with the founder family remaining as shareholders in the company. Ambu, having been in the market for a long time, still has a first-mover advantage in the single-use endoscopy area. And I look very much forward to be part of this exciting journey ahead. And I will do my utmost to support the opportunities and challenges that Ambu will face. I believe I'm equipped to support Ambu in the profitable growth journey that Ambu is embarking on. And by that, I thank you.

[Interpreted] Thank you very much, Susanne Larsson, for the introduction. Unfortunately, Michael del Prado was prevented from coming to Copenhagen because of the COVID-19 restrictions. And that's why we have a video with a presentation of Michael. It was recorded in connection with a video conference. So we apologize for the quality of the images.

I'm glad to be here, although virtually because of the pandemic-related travel challenges. I'm Michael del Prado. I'm 58 years old, narrowed to Joy for close to 30 years and we are blessed with now 3 grown children. I've been a global health care leader for about 35 years, 25 years of which has been in medical technology or medical devices. I've lived and worked and led multibillion-dollar businesses in the 3 major regions of the world: Asia Pacific region, in the Europe, Middle East and Africa; and the United States. My career culminated as company Group Chairman of Johnson & Johnson Medical Devices, having global responsibility for Ethicon, the largest and most comprehensive surgical company in the world with revenues in excess of $8 billion and benchmark market shares and financial performance. I served in the Group Operating Committee of Johnson & Johnson Medical Devices, the management Board of J&J Medical Devices for 10 years and also was the Lead Director in our joint venture between J&J and Verily, Google Life Sciences that sought to create this new and exciting market of digital surgery. I believe that my long and successful experience as a transformational global health care leader lends itself to contribute significantly to the Ambu board. I would like to highlight just 3 areas. I can help advice and shape strategy and good governance that would position Ambu to attain and sustain market leadership, drive financial performance and ensure that the people, systems and processes are fit to support a business that's built to last. I would also help oversee and guide the innovation agenda, shaping the portfolio, developing and delivering products that truly address unmet clinical needs. I'd also like to give my perspectives in market development and global commercial expansion. My familiarity with the global business landscape, the regulatory framework is very diverse and customer dynamics can help Ambu gain a stronger foothold in the most attractive markets of the world. I'm personally very excited to be considered for election in the Ambu Board. Ambu has had a long and proud legacy of innovation and leadership in very important areas of health care. But there are still many areas of unmet needs in health care that require even more innovative approaches and solutions. From what I've seen, Ambu is really well positioned, especially to lead the way in the fast-growing single-use endoscopy segment. This is a market that I've been watching for many years and it has evolved rather well. I look forward to be part of this exciting story and help propel Ambu forever forward. Thank you so much, and have a good day.

[Interpreted] Thank you very much to Michael del Prado. I can inform you that the other management positions of the candidates appear on Page 36 of the annual report and information about Susanne Larsson and Michael del Prado's executive positions appear in press release #17 of 2021. So with these words, I'd like to hear on the candidates, there's a request for the floor. Mr. Demant, Jens Frederik Demant, you have the floor. I'm sorry, my memory failed me. just for a second there.

[Interpreted] I am Jens Frederik Demant. I'm not here to put up my own name on the list of candidates. It has to do with Susanne Larsson. She's been proposed by the Board and she has explained about all her qualifications. And I have no reason to query it, but I would like to say that her English is excellent. But I'm good with languages, I can tell that she's Swedish. I'm just saying that since we're in Denmark and we have 3 Nordic countries usually, we can actually speak our mother tongues and we still understand one another. So I would have preferred you to speak in Swedish. Thank you.

[Interpreted] Thank you, Mr. Demant for your contribution. Are there anyone else that wish to take the floor on this point? It doesn't seem to be the case. We have no electronic questions or comments. So I find that all candidates have been elected -- or reelected for a period of 1 year. I wish you godspeed for the next 12 months. The Board also has 3 employees that have been elected to the Board by their colleagues. The elections took place last month and the 3 new members are elected and will join the Board in connection with this AGM. And they are Charlotte Elgaard Bjornhof, Jesper Bartroff Frederiksen, and Thomas Bachgaard Jensen. Congratulations to you all. So henceforth, the Board looks like this. Mr. Jorgen Jensen, Chair; Christian Sagild, Vice Chair; Britt Meelby Jensen, Susanne Larsson, Michael del Prado; Henrik Ehlers Wulff, Charlotte Elgaard Bjornhof, Jesper Bartroff Frederiksen and Thomas Bachgaard Jensen. We also have to say goodbye to people after these elections. The 3 employee-elected board members, Thomas Lykke Henriksen, Jakob Koch and Jakob Bønnelykke Kristensen will leave us and also Mikael Worning. And I'd like to hand over the floor to our Chairman of the Board.

[Interpreted] Mikael Worning has been a member of Ambu's Board for 11 years, which means that he has been with us on a unique journey. He has made a clear imprint on the company and contributed to deciding the strategic line and give width with to the discussions on the Board. And in this way, he has, over the years, contributed to our development and it is also thanks to him that we have been so successful. Personally, it's been my pleasure to work with Mikael in the past year. And on behalf of the entire Board, I'd like to thank him for a major effort throughout his period on the Board and the commitment that he has shown to the very last day. Thank you very much for your efforts in relation to Ambu for the past 11 years. Also, thank you to the employee-elected board members, Thomas Lykke Henriksen, Jakob Koch and Jakob Bønnelykke Kristensen, who are leaving us. Thank you very much for a job well done. Jakob Koch and Jakob Bønnelykke Kristensen (sic) [ Thomas Lykke Henriksen ] for the past 4 years and Jakob Bønnelykke Kristensen 8 years. I'd like to thank you for constructive contributions and valuable perspectives. You are resigning from the Board now, but you will still be among us in the company.

[Interpreted] Thank you very much. We have now exhausted item 8 on the agenda. So we will now go to item 9, which is the election of auditor. And the proposal is, from the Board, the reelection of the auditors and there is also a recommend. There's a recommendation from the Audit Committee that has not been affected by any third parties. So Ernst & Young are up for reelection. Are there any other candidates? There doesn't seem to be the case. I find that Ernest & Young has been reelected auditors of the company, which brings us to item 10 on the agenda, proposals from the Board of Directors.

[Interpreted] We have 3 proposals, item 10.1, indemnification of members of the Board of Directors and the executive management; 10.2 update of the remuneration policy; and 10.3, renewal of the Board of Directors' authorization to increase the B share capital. 10.1, as I said, is a proposal for indemnification of members of the Board and executive management. And as described, the Board proposes that the general meeting adopts an indemnification program covering members of the Board and the executive management supplementing the company's directors and officers' liability insurance. Taking always into consideration the conditions of that insurance, I'm going to refer you to the notice, which describes this proposal in detail. And we need a simple majority for this. Does anybody want to speak about this? Yes, Mr. Demant, you have the floor, sir.

[Interpreted] Yes. I am Jens Frederik Demant, and I don't -- this is not the first time I'm speaking in a C25 company with such item on the agenda, and I must say I do not approve of the idea of an indemnification clause. I think that if you are a proper person, a decent person, there's no reason to be afraid. The argument has been some time, I don't know if this is the case here, that the price of insurance is ever increasing. I'd say, well, then don't have an insurance. I think that if people who want to be a member of the Board are decent people, are honest people who want to able -- or willing to put their hand in the fire, well, that's the kind of people we need, people who are willing to take on responsibility. And if they act in a proper and decent fashion, there's no reason to have an insurance. Nothing to be afraid at of, and I vote against this proposal.

[Interpreted] Right. Does anybody else want to take the floor to this item? That does not seem to be the case. In that case, on the basis of the votes cast, I note that 99.4% vote in favor of this item. So even taking into consideration Mr. Jens Frederik Demant's comments, I note that this proposal has been adopted. Item 10.2, the Board of Directors proposes to update the remuneration policy and the proposal has been available on the company's home page since this was put forward. And there are 4 points mainly. The Ambu's possibility of compensating members of the Board in connection with the travel to board- and committee-related meetings outside their country of residence to an authorization to the company to set the scope of the indemnification program for both directors and executive management as presented in the proposal, which we have just adopted. And Item 3, extraordinary remuneration, for instance, sign-on bonuses, retention bonuses, in special cases, but always on the basis of a recommendation from the Remuneration Committee and with a constant reporting and still with a maximum of 25% for the total remuneration and not the regular remuneration. And then, finally, Item 4 a change to the rules on clawback in accordance with the new rules on good corporate governance and a reference to Section 416 of this recommendation. And does anybody want to take the floor? No? That doesn't seem to be the case. And these proposals require simple majority. There's no indication of anybody who wanted to take the floor. So on this basis and having counted the votes, we see that 99.43% vote in favor and so this proposal is adopted. Thank you very much. With that, we arrive at item 10.3, a renewal of the Board of Directors' authorization to increase the B share capital. The Board proposes that the existing authorization of the Article of Association, Article 9e, which allows the Board of Directors to increase the B share capital with and without preemption rights be carried forward to 14 December 2026 and so Article 9e will need to be changed as mentioned in the notice. And I now open up the debate. And here, we need a qualified majority. Jens Frederik Demant has asked for the floor. Please step up here, sir.

[Interpreted] I'm Jens Frederik Demant, and this proposal entails renewal for 4 years. That's quite a long time and I'd like to know what's the reason for this authorization? And I must admit I haven't prepared properly, but I'd like to know if this authorization gives existing shareholders a preemption right or not?

[Interpreted] There were some specific questions, and I'll give the floor to the Chairman. Please go ahead.

[Interpreted] The reason for asking the AGM for this authorization is that in Ambu, we always wish to be able to ask shareholders for additional capital in the event that we find it necessary. We do an ongoing assessment of our capital reserves, and it's a good possibility to have to contact shareholders. [Interpreted] And then there was a technical question. Perhaps I need the Chairman of the meeting's help here. Yes. The question was whether it was with or without preemptive rights? Both actually. So there's a double possibility here. And with these comments, I'd like to hear if there are other requests for the floor, comments, questions? Mr. Demant, please approach.

[Interpreted] I am Jens Frederik Demant. Just to say that I don't like the possibility of increasing the capital without preemptive rights. So I cannot vote in favor of this proposal.

[Interpreted] Thank you very much to Mr. Demant for his comments. I'd like to hear if there are other requests from the floor? That doesn't seem to be the case. As I said, it requires a qualified majority for this to be carried, and 99.3% have voted in advance in favor of this. And even with Mr. Demant's objection, this proposal has been adopted. And I will, of course, make a note in the protocol that Mr. Demant voted against.

[Interpreted] I said I didn't want to vote. I didn't say I voted against.

[Interpreted] Okay. I will then specify, Mr. Demant. I'm sorry for my misunderstanding. I will enter in the protocol that you wish to abstain from voting. Then there is the authorization to the Chairman of the meeting. I will, given this authorization, be able to report what has been adopted at the meeting to the Danish business agency and to make any required changes and also to make adjustments without any content to the company's articles of association -- if the content of the articles are not affected thereby. Right. This is it. We have exhausted the agenda. We have one item left, any other business, and this is where we also sort of can deal with whatever we haven't been able to the rest of the agenda.

And we now have a question from [ Mr. Vadelyn ]. He asks, is it possible to hear anything about competitors' efforts in relation to the transition to single-use endoscopy? And is it possible to get turnover figures, et cetera. And this is Mr. Gonzalez. You have the floor, sir.

Thank you for the question. First of all, for Ambu to be successful for the single-use endoscopy market to be created, we need competitors to come and help us to make the case to transition reusable to single-use. Now the competitive environments continue to evolve and we see 2 types of competitors. We see medical device companies like Boston Scientific, who are in the tools sector participating in some selected single-use endoscopy segments like bronchoscopy, ureteroscope and duodenoscopy. And then we also see reusable players like Olympus and PENTAX that are also developing single-use portfolios to be able to offer it as a portfolio, so hospital can choose whether they want reusable or single-use. And they are also focused on selected segments, like bronchoscopy, ureteroscope and duodenoscopy. That basically means that if you look at it from an Ambu point of view, in about 10% of the segments where we are going to enter, we will face competition. And Ambu together with medical device companies and reusable players will make the case to transition this market from reusable to single-use. And in the 90% of the rest of the segment, we will be mainly alone driving the creation of this market. Thank you.

[Interpreted] Thank you to CEO, Mr. Gonzalez, for replying to this question from [ Mr. Vadelyn ]. We're still dealing with the item. Any other business, you're welcome to do and say anything you like except putting forward proposals. Would anybody else like to take the floor? I'm looking at the digital gatekeeper. We have not received anything and we haven't received any warnings of questions on their way. And so I take note that nobody else asked to take the floor. And with that, we have exhausted the agenda completely. Thank you very much for allowing us to have this AGM in this orderly fashion. And with that, I will now end my work and give the floor to the Chair of the Board.

Thank you very much. On behalf of the Board, I, too, would like to end this AGM by thanking all our excellent employees for their great work throughout the year and for the results achieved. I'd like to thank Mr. Gonzalez and the rest of the executive management and my colleagues on the Board for excellent cooperation throughout the year. I look forward to take on new tasks together with you. And finally, I want to thank our shareholders for their support. And thank you very much to Mr. Kornerup for leading this AGM. So well, I hope to see you all on the 14th of December 2022 at our next AGM. Thank you very much. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]