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

So good morning, everyone. And welcome to this Ambu Capital Market Day, March 2023. It has been almost 4 years since we last hosted an event like this. So we have been looking very much forward. For Ambu, we see a future full of potential. We think we are strongly positioned as a business to deliver on that potential, and we hope to convince you about the same during today. So I know most of you know our business very well. You also know the products we bring to the market. But let me just kick this meeting off by telling you what is the everyday life of our customers, hospitals and clinics when they do endoscopy. So every year, 200 million people in the world go through an endoscopy procedure, either as a simple check for cancer or as a more specialized procedure. This is a fact. But what's not so commonly used is that this involves a lot of complexity. And let me walk you through some of the steps of what actually happens when an endoscopy procedure is done. So first, the physician has to go and get a clean and well-functioning endoscope. So ideally, this is in storage. It's not always the case. It can be for service or repair. And it can be borrowed by another department or at cleaning. But let's presume it's available. Then the next step is to go and get the towel and bring that to the room where the procedure is done. Then the procedure is taking place. The physician performs it, and he may sometimes experience some variation in performance due to wear and tear of the endoscope that is being used. Once the procedure is done, the endoscope is put on a tray and it's transported to the nearby cleaning facility. Here, the cleaning procedure takes place. This can consist of over 100 steps. And after completion, it's stored in a drying chamber. Due to focus on patient safety, this procedure has over the years, only become more cumbersome. So before the scope is used again, it's checked for performance and functionality. And if it's good, it's ready to be used again. But sometimes, this is not the case and then the endoscope is sent for repair. If this is the case, a supplier is called, they will come in and pick up the endoscope and transport it to external repair. It can stay with the supplier sometimes for weeks until it's fixed and ready to use again. And when the repair is completed, the endoscope is transported back to the hospital and ready to be used for the patient. And then the procedure and this journey starts all over again. So this has been the procedure in hospitals when doing endoscopy for decades. There has been very few changes to this way of doing endoscopy. But let's now assume a world where the basics of endoscopy is fundamentally changed. In this case, the physician goes to the storage and collect the endoscope, given it has never been used before, it's fully sterile, and there's no need to worry about availability. Then here, he takes the monitor along with him and goes to the procedure room where the procedure is performed. Then the procedure is performed. This is typically happening in the same way as with the reusable endoscope. The only difference being that the physician can be sure that there's no wear and tear due to previous use. And then when the endoscope is used, it's either being discarded or the endoscope is sent to recycling purposes. And that's it. The key takeaway here is that endoscopy with a single-use endoscope, a physician can perform as many procedures as he wish or she wish during the day without worrying about either whether there's a scope available, if there's potential variation in the performance of the scope or if there's a colleague available to be able to do the cleaning. If we look at the patients, they also experience benefits from this. They can rest assure that they will not be exposed to any infection or bacteria from previous use of the endoscope. Best evidence showing that readmission rates to hospital after using a single-use scope is more than half compared to when using a reusable scope. On top of this, patients also experienced far less cancellations. More specifically and according to a study, 59% fewer procedures are canceled when using a single-use endoscope. So today, you'll hear much more about the growing market that we have here in Ambu and that we serve and the substantial unmet needs that I just alluded to. You will also hear about how we first -- we were the first to invest in single-use endoscopy and that we, today, have a unique position with our solutions to address the patient needs. And then we'll also show how our business model is proven to deliver on this. And last but not least, we'll talk about how we deliver sustainable growth. We are targeting a 5-year CAGR, as you'll hear about later today, of more than 10% when it comes to organic revenue growth, and we target to reach an EBIT margin around 20% in 5 years from now with potential trade-offs allocated to growth investments. So today, you will hear from myself, I'm Britt Meelby Jensen, the CEO of Ambu. You will hear from my 2 colleagues, Thomas Frederik Schmidt, our CFO. You will hear from Bassel Rifai, who's our Chief Marketing Officer and also responsible for sales in EMEA and APAC. We are also very pleased that we have 3 external speakers with us today. We have Dr. Sachdeva, who will speak to you shortly around what considerations and value his hospital has from single-use. You will hear from Dr. Shah as well, who will talk about the latest innovation and single-use endoscope benefits. And then we'll hear from Dr. Babou who will talk about the importance of single-use and -- in relation to sustainability and share some interesting finding from some studies that he has performed. From the Board of Directors, I'm also pleased that today with us in the room, we have our Chairman, Jorgen Jensen with us. And we have our Board member, Simon Hesse with us today as well. So the agenda that we are to get through today is, as you can see up here. We'll start before the break with an introduction, then an update on the strategy and the business and then we'll have the external presentation around how single-use is used in the hospital and the value of this. Then after the break, we'll dive into our solutions and we'll have an external speaker to share some of his perspectives on innovation in this field. And then finally, after the lunch break, we'll cover our execution, which includes our transformation project, we'll cover sustainability, our people and then we'll also cover our financial targets. During the day, we'll also host 2 Q&A sessions, 1 right before lunch and 1 at the end of the day, where people in the room are able to ask questions and we'll get back to more details on this. So the mandatory disclaimer here, and then let me move in to the introduction and also the strategy update. So most of you are familiar with Ambu. We were founded 85 years ago. Our revenue last year was around DKK 4.5 billion, more than half of that from our endoscopy solutions and then the other half, our anesthesia and patient monitoring business. Our products are sold roughly in 100 countries, and we have just over 4,500 employees. We are a growth company. So our business has over the past 5 years roughly doubled. If we look at our endoscopy solutions business, that has more or less quadrupled in this period with 29% reported CAGR in the period. Let's look at the details in our endoscopy business. So from this fiscal year, we are reporting on sales in Pulmonology and then separately on sales in everything in Endoscopy Solutions, excluding Pulmonology. If we look at the Pulmonology revenue first, this has, over the past years has grown by 16% CAGR. As you see, it has been highly affected by COVID. So the fiscal year '19/'20, it took a big jump when COVID first came. And then later, our revenue in this category was last year under pressure as we were seeing hospitals using some of the inventories that they had -- which they had bought during COVID. Then over the past 3 to 4 years, we expanded into new segments. We expanded into ENT some 3, 4 years ago. The following year, we expanded into Urology. And most recently, we went into the largest segment in Endoscopy, Gastroenterology. So we went in a 4-year period from only being in Pulmonology to being in all 4 major Endoscopy segments. On top of that, last year, we expanded our market in Pulmonology addressing around 60 procedures more as we launched our aScope 5 addressing the interventional pulmonology being the most advanced procedures. So all this is achieved because we have great people at Ambu who is working hard every day, but it's also driven by the favorable market dynamics. And if we look at market dynamics, there's the dynamics around the overall endoscopy area, which is growing driven by mainly 3 factors. One being that the number of patients are growing, partly related to the aging population. Secondly, it's because more people are getting access to health care. And then thirdly, there's an increase in procedures that used to be done invasive but are now done using endoscopy. When we then look at single-use endoscopy, there's additional benefits. I've highlighted 4 up here, one being the efficient workflow where because you don't need to go through the cleaning process, you save significant amount of time, more precisely 1 hour and 16 minutes when using a single-use endoscope. You also have better availability. As I mentioned, 59% fewer appointments are canceled when using a single-use endoscope compared to reusable. We have also proven strong health economic benefits from using a single-use endoscope. And then lastly, but also very important, we have an increased focus on patient safety as the patient is exposed to a fully sterile endoscope that is used for the first time. So why Ambu is positioned well to grow in this area? Well, there's basically a couple of things that I would like to highlight. One is that we have deep customer relationships and also a strong customer understanding now across all these 4 segments. We have a comprehensive portfolio that we have built over these last years. We have know-how in innovation and manufacturing. We have a direct commercial infrastructure in all key markets. We have higher-quality solutions. And then we have a clear sustainability agenda as well, which is also addressing the needs of our customers. So back to our products, as I alluded to, we are in the 4 major segments. And as you can see on this one, we have products across all 4 segments on the market. And we have also across all 4 segments, the products marked with the green dot products in development that will be launched near term. So we are very excited about this portfolio and how this has expanded. And we're announcing today for the first time that with the gas -- within gastroenterology where we launched a gastroscope last year, we now also have a gastro large in pipeline, which Bassel will talk more about later today. All of these products are hooked up to a system where we have our aBox 2 and our aView 2 Advanced that has the software that supports all our endoscopes across all segments. So how do we bring all these products to market? For us, it's very important that we select and chase the highest value opportunities that we see out there. And basically, this requires that we have a very flexible model when it comes to both the customers that we're addressing, how we are set up in terms of our commercial field force and also how we work in innovation using the technology that we have with the modular setup that we have implemented over the past couple of years. Because one thing we know is that not all segments will develop with the same pace. This is something we have experienced ourselves, where we saw a significantly higher uptake when it came to our cystoscope in urology compared to our duodenoscope. And there are 3 main things that drives this difference in uptake across the markets. One is the customer willingness to adopt a new single-use endoscope. The second one is different requirements to product performance, and then each of the segments that we address also have different regulatory and clinical recommendations. So if we look at what we have done as a management, when I came in together with Thomas and worked together with the management team, there were some questions around the previous strategy. Because as you see up here, it was clear that our EBIT margin and our cash flow had been declining. This was because we had assumed quite a high uptake for our duodenoscope, and we had set our investment levels accordingly. Not only had we invested in that, but we had also invested in many other areas, which is what you can see from the comprehensive pipeline that we're excited to have today. But we had simply too many projects, and we were spread too thin. So this is what we started to address. So as a new management, we very quickly got on board and saw a need to turn this situation around. So after a couple of months, we did a cost reduction program where we unfortunately had to say goodbye to some colleagues. We also started the work on a new strategy where a big component on that was a transformation program. So we make sure that we continue to also increase our profits. Our strategy was, first and foremost, a growth strategy that was centered around the customer. And if we look at who the customer is, our customer basically consists of a large group of shareholders that are all in the health care systems. If we zoom in on the biggest stakeholder in this, the hospitals, they have a lot of needs and challenges that has been important to address with our strategy. So they see financial pressure right now in the hospitals worldwide. They struggle with capacity management, partly also with increasing age in the population. They face staff shortages. Also, there's a lot of regulation that they need to comply with. They need to integrate new technology. And then what is #1 on their agenda is patient safety and care. So this has been the basis for the strategy that we developed and launched mid-November. So our strategy, which will form the structure of the rest of the day, is, first and foremost, developed with a vision and an ambition from us as a management team to deliver strong profitable growth. The way we want to focus on this is through 4 specific areas. The first one is around our solutions. We get there to make sure that we bring solutions that give value for our customers. It's about execution where it's both about optimizing how we work and also making sure we are more profitable. Sustainability is a zoom area that is very important because we believe that being environmental responsible is closely linked to also good business results. And then last but not least, the way we deliver success as a business is by focusing on our people and making sure that we bring people together in one shared culture. But the strategy is about delivering strong profitable growth. And what that means is basically what we give our estimate on and our target and our commitment on today with our long-term financial targets. Last fiscal year, we delivered 4% organic growth and 3% EBIT. For this year, we are maintaining the guidance of 5% to 8% revenue -- organic revenue growth and 3% to 5% EBIT. But then as a long-term financial target, we believe that we should deliver a 5-year CAGR organic revenue growth of above 10%. The growth should primarily come from the endoscopy solutions where we expect to deliver between 15% and 20% growth. And then when it comes to our EBIT margin, we expect to deliver in 5 years from now around 20% EBIT margin, of course, making sure that we have the right balance between investing in growth, which is our #1 focus but still also, we believe that we should be a company that is at significantly higher EBIT margins than we have seen until today. So to sum up this introduction, I've talked about the growing market and also our ambition to expand our leadership in single-use. I'll remind you what we expect to do to deliver on this. It's about our delivering on our Zoom In strategy that we'll go into detail with today. It's about being disciplined in our capital allocation and also successful with our transformation program. And then it is also about our focus on sustainability. So with this, I'm very pleased to invite our first external speaker on stage, Dr. Ashutosh Sachdeva. Dr. Sachdeva, he is an associate professor of Interventional Pulmonology at the University of Maryland in the U.S. And in addition, he is also part of the hospital administration. Today, he's going to share his view on single-use endoscopy and what that does for the U.S. health system. He will also talk about some of the challenges that many systems have been facing post pandemic and also how single-use endoscopy has mitigated these and increased patient care. So Dr. Sachdeva, please join me on stage. Thank you.

Thank you, Britt. Thank you and great presentation. Can everybody hear me? How is the energy in the room, investors? So I'm an investor, too. I invest in human capital, and you guys invest in technology that helps me invest in my human capital. And I will share some stories that I've shared with the Ambu team, but I want to bring you to my university hospital. Britt did a phenomenal job talking about where the single-use endoscopy is going, and I'll just build upon that. So currently, I'm Chief of -- section of Interventional Pulmonology and I have a leadership responsibility to take care of 4 interventional pulmonologist, a big bronchoscopy team. And as the pandemic unfolded, a lot of other responsibilities that I could not imagine. And the last slide that Britt showed the customer is not just the patient. The customer is not just the health care provider. The customer is the entire team, including the payers, insurers, practitioners and so on. We already have seen that there is a shortage of health care workers, both in the United States, across the globe, no matter which country you go, you cannot churn out professionals in 1 year, 1 day. Our health system invested about $4 million just to take care of grants that will offset the cost of education for nursing. So that is the level of investment that health systems are doing and that's not enough. We have been apprised of health care-associated infections. That was a very big task. The CMS provided guidance on how to reduce it, how the incentives were given back to the hospital and we were doing great until the pandemic happened. The data from New England Journal suggested that during the pandemic, the line infections, those are the simplest to capture, went up by 28%. The other health care-associated infection, ventilator-associated pneumonia is how we are capturing. They went up, up to 40%. And part of the issue was that we didn't have enough human capital to actually take care of the patients or they were overworked, overwhelmed. And then you have probably been reading in the newspaper about the FDA recommendations, starting with the cost contamination with duodenoscope, ERCP procedures. And then most recently, the guidelines to sterilize or recommendations to sterilize bronchoscopes. So it's just going to continue to evolve because we are uncovering a lot of things that were either underreported, underidentified or we didn't have the tools to focus on because there was no need for them as we are doing things the old way, right? Who's an interventional pulmonologist, you might be wondering, some of you, maybe you all know. I'm a plumber of the airways, but our field is at an inflection point. We are seeing a lot of growth in terms of the number of vendors industry investing in technology that can help treat pulmonary diseases. So the market landscape is tremendous, but I'm going to stay focused on the complex airway procedures that have evolved, advanced diagnostic and therapeutic procedures where we add on cryotherapy, biopsying the lung in a different way, tumor debulking, using electrocautery, all that can be done for a single patient in a single setting and they don't have to come back for repeated procedures. A big area is COPD and how we address the treatment for these complex diseases that are global problem is not just unique to the United States. Over the past few years, during the pandemic, my role also evolved into helping the health system identify where we could create more value by decreasing the cost, decreasing the cost not just by saying that we are going to introduce single-use bronchoscope, but looking carefully at what is costing us. The biggest cost is in the repairs. When you have short staff, when you have to transport the bronchoscope from one place to another or any type of endoscope from one place to another or you have not enough time to invest in our trainees where they are using the scopes as they want, which is fine. Everybody -- most physicians have this experiential learning model and they want to experience what's happening. But you can certainly reduce that -- the drivers for causing the scope damage. So this past few years has really opened my eyes on how things should be and how they have been. I always say, time is the most valuable commodity that we can give to our patients. Is that really happening? And each one of us is going to be a patient 1 day. And I think that's the whole truth in this world. So that is the most valid statement, then how do we bring time? And the best way to bring time back to our patients is to ensure that our health care teams are not overstretched. We have the time to spend with our patients to understand and that is the real investment we can do. The patients will go to the nth degree to follow their health care providers, and I've shown that repeatedly in my own system. This is my health care system. So this is a last picture taken with a non-digital camera. So I've saved this, and I present it. On the bottom portion, you see the oldest medical school that is University of Maryland still functioning retro hall. It used to be an anatomical theater, and that's our flagship hospital. We have a 13 hospital health system that is trying to and now effectively implementing the strategy to be one arms, University of Maryland medical system. So there is commonality. There is decrease in wastage. There is a strategic growth that is more on a hub and spoke model where you can invest in one particular hospital to do the high-quality care in certain areas and the other health system -- other smaller hospitals, community hospitals to partner and create more value. Just like any other health system, we are facing a lot of dynamics that pandemic has uncovered. It has done a lot of bad and a lot of good and you all are very smart people in this room to know that. We are struggling with labor shortage, and we are investing both money, time and strategically getting the health care teams back in action. I'm proud to say that I did not lose a single of my team members to another health system. We have only grown as our bronchoscopy team. Part of the reason is that I am proactive and I invest in my team. And you have to continue to invest to make sure that you don't lose your team members. We worked and worked through the workflow and processing challenges. We actually constantly -- every month, we look at the cost of repairs. We look at strategies to implement certain action plan. One of the things that I've tried over the 10 years is educating the team members. It sounds great, but the team members keep changing. You have to do a continuous process, and it's very hard to monitor. So while education seems to be a great way and it should be done, but it's not in lieu of technology, making things more efficient for us. So we have seen that single-use endoscopy was able to help support our patient care in a better and transformative base. We started in the pre-pandemic area. It was very slow as the pandemic hit, we partner with vendors like Ambu and others, and that was a transformation. It helped us get to the patient bedside without having the staff to assemble, disassemble the scope. That was the biggest risk factor for cross-contamination apart from the ability to clean the scopes down in the central sterile processing. A part of the scope cleaning is done by humans. It's not automated. A part of the scope cleaning is automated. So when you are talking about humans and they are overworked, pressured, no matter where you go in the world, it is going to be a challenge. So you'll have to live with the errors that happen. We clearly saw an inflection point post pandemic, and that has to this point sustained because we started looking at things that made more sense that created more value. I would say I was a little bit skeptical in the beginning, and I'm talking about a decade from this time point and we have evolved in our thinking as well. We also saw that it was not just the ICU, but my colleagues in ENT, urology, urology is one space where there is so much scope damage. Part of the reason is that they have to do retroflection almost go backwards and then shoot fire lasers in areas of kidney that actually require a lot more manipulation. So the energy delivered in those small spaces cause scope damages. $0.5 million contract that we have, service contract with the vendors, goes to manage the urology scope damages. We have a person who's dedicated to educate, prevent scope damages. And time and again, we see these in ebbs and flow and I think we try to manage or mitigate, but it doesn't work that way. It has clearly helped us mitigate some of the costs and the cost is not just the capital purchase of the equipment, but a major cost goes into the repairs and so forth. It has helped with the workflow and I'll share some -- not patient stories, but my staff stories and improved staff satisfaction and retention. I firmly believe that, that is helping us. And we continue to -- we will continue to see the evolution of this single-use endoscopy in future as well. So to go back to what I've been talking, and I'll keep it very simple. In the pre-pandemic, things were already under pressure, right? But we all said build resilience, that's the way to go, right? We do a lot of resilience, education and so on. During the COVID, we -- it uncovered some of the challenges, and we were able to adapt and adopt both the single-use bronchoscopy. So the benefits have been very clear. We also found that the transition is easy to do. It is not cumbersome. The health systems can adopt. The staff experiences improved the workflow and the ability to focus more on the important tasks, which being time and efficiency. And then we could expand it to other areas of skill building. This is my bronchoscopy supervisor. I'm going to -- want you to hear directly from her mind. So... [Presentation]

Nobody likes to go down to the basement. So you can increase the daily procedure capacity. And I think it's in a good way, and there are various models. The scope is readily available. There's a lot of challenges that happen with transportation. And then faster turnaround makes the pressure on the staff a little bit easy. This is one of the staff members talking about time and risk mitigation benefits. [Presentation]

And the other thing that fundamentally changed was how we educate our learners, how do we import this deliberate practice model repetitive and sustainable model, right? So we have high fidelity models that cost a lot and everybody's financially cash strapped. So how do we do that? And I went to our fellowship program Director, Dr. Holden, and asked, you do monthly courses, how has using a single-use bronchoscope helped you? And we have medical models and you will see outside. [Presentation]

And Dr. Holden has a very large fellowship at the University of Maryland and is my colleague in Interventional Pulmonology. So as we will see that Britt talked about it, we have expanded into areas in ENT, Urology, many other ICUs, education and training. Before this talk, I was talking to our ENT colleague, and I said, "Hey, do you guys use disposable scopes or single-use scope for your procedure?" And she said, "Yes, our residents love it." It's nice for the faculty to be able to review their exams much better than pushing around. Who does the pushing around in the hospital? Either the resident or the staff, right? So the big guys know it. So clearly, it has value creation and workflow improvements. There is clearly organizational impact on equipment setup. I'm not saying that reusable scopes are not meaningful, it's just that there are a lot of areas, opportunities where we could use single-use scopes. And then cost reduction for me is -- the biggest cost reduction is the repairs and patient benefit from decreased cost contamination. Is my team very happy? I don't know if it's a video or -- but thank you. Thank you, again. Yes.

Thank you very much. Dr. Sachdeva. It was very interesting to get a sneak peek into your daily life, treating patients. And I think also particularly interesting to hear how easy it is to -- for your staff to be trained to use single-use endoscopes and also I think what we all appreciate how much time is freed up from doing the reprocessing and the cleaning and actually to do real patient care. So thank you very much again for sharing your perspectives on this. So the next topic we have before we dive into our strategy is a focus on our business model. So this is basically how we are set up to win and basically how we are set up to create value for our customers. So how we work in Ambu? It's basically the full value chain we have is with a very strong focus on innovation that is driven out of customer needs. It's set up in terms of manufacturing to make sure that we can produce high-quality products and then is our commercial organization that makes sure also that our products get out to our customers and bring the value there. So that's really the interaction across all these functions that -- plus some of the staff functions that we have and support functions that is how we work here at Ambu every day. So if we start with our innovation, we basically have a couple of major innovation hubs. We have people sitting here in Ballerup. Then we have an innovation center in Augsburg, which we set up a couple of years ago after the Invendo acquisition and where we are next door basically to one of the biggest TI hospitals in Germany based in Augsburg. Then we also have a growing Center of Innovation in Malaysia, and we are in -- with our production in the other places where we produce. We also have people in innovation to make sure we have that handover from innovation to manufacturing. We are around today 370 people in innovation at Ambu. So if we look at how we work, we basically create value for health care professionals and with health care professionals. And this is how we have operated since we were founded. I have 3 examples up here that you see that are very different, but that all underlines how we work. The first one is our famous Ambu Bag, which was launched in the 50s, which is used for respiratory needs. And that is still a big product today. And as you can see from the top to the bottom picture, I mean, there has been some evolution, but it's basically, I mean, the same concept of product. Then we were the first to develop a single-use endoscope some 15 years ago with the aScope Broncho. And last year, we launched the fifth generation of this scope. And this is also a result of continuous collaboration with our customers. And then the third example is how we moved from Pulmonology with our bronchoscope into other segments, the ENT segment, Urology and latest Gastroenterology. So all these are examples of how, we, in innovation work closely with our customers. But let's look at what -- how we work and what delivers value. And there are basically 3 main components that are very important in our daily work with innovation. The first one is around proprietary technology. So we have and developed a lot of IP, and that is related to the key features of our endoscopes such as imaging, which is a key feature across most of our endoscopes. It's about maneuverability, making sure that when it gets into the edges that it can maneuver in the way that is needed for the specific procedure. It's around the systems, the software, which is becoming a more and more important part. And then it's about sustainability and a number of other areas. Then we are also working with modularity. So basically, while it's important that we address the specific needs of the segments that we address, there's a lot we can do to add scale to our innovation and manufacturing by having a modular approach using some of the same features and learning from the different scopes. It's also helping to get faster to market and it's helping to decrease the risk in the development projects when we have proven something already works from a technical perspective. Then we don't do the work alone. We partner first and foremost with customers, but we also have a number of development partners that are quite important for us in how we work and innovate here at Ambu. So if we look at how we -- what that leads to, basically, as you can see on the top here, we have spent a lot of -- we spent a lot of money on innovation because this is very important. We went from some years back to be at levels of 6%, 7% of our total revenue. Then as we increased in the past couple of years, our investment levels, we were all the way up to 13% of our revenue. And now this year, we expect to spend 8% roughly of our revenue on innovation, which is in line with industry benchmarks and what we believe is meaningful with the type of business we are. With all this innovation, we also developed a lot of IP, which is important to have patents in our industry. We basically sent in 3x more applications in 2021 than 3 years before that as we were ramping up in innovation. And then also, we expanded our portfolio, as I alluded to, on moving into more segments. So as we move ahead, it's very important for us to remain customer-centric. We believe we have the right organization. We have rightsized the organization last year in connection with the cost reduction. And then also this matches -- and the capabilities we have matches our overall priorities. So if we look ahead in terms of innovation, what is important, I think we have still strong opportunities to continue to evolve how we work within our different segments, which, as I mentioned before, some of them, we are quite new into only in a couple -- for the last couple of years. And we do have innovation projects that are quite far ahead in all these segments. We work very closely in our innovation team in project teams. So -- and so we believe that being focused in different projects on our solutions, it is what makes us deliver the strong solutions to our customers. And with that, we have plenty of opportunities both to improve the offering that we have for the targets that we are currently addressing. We have opportunities also to expand the target groups as is an example with our aScope 5 and then also to bring over the years and more long-term additional value by looking into other ways where we can meet the needs of our customers. So this is how innovation in Ambu is really one of the key parts of our DNA that is very important to drive continued growth. Then comes operations. Today, we have 4 factories around the world in Xiamen in China, in Penang in Malaysia, where most of the endoscopy manufacturing is done. We -- in Noblesville in the U.S. And then last year, we opened a factory in China, our largest and most modern factory to date, where we will also produce a lot of our endoscopes going forward and some of our anesthesia and patient monitoring products. So we believe in our manufacturing, we have a number of competitive advantages. Cost leadership, I mean, we were the first to develop endoscopes. We are the ones with the broadest portfolio. So there is a lot of synergies in terms of cost. Also, we have proven during COVID and day-to-day that we have a very robust and resilient manufacturing setup with manufacturing around different parts of the world. With the opening of Mexico, we have ample of capacity also for the next many years that allows us to grow in line with our strategy. With Mexico, we also -- given roughly half of our revenue today comes from the United States, it's a big benefit to be able to produce close to our customers, that also adds flexibility and it reduces transportation. And then finally, we were one of the first companies in the medtech industry to fully complete our upgrade to be in compliance with the medical device regulation that is new within the EU. So overall, I feel quite comfortable that we have a unique and highly competitive manufacturing setup that can deliver the high quality of products that Ambu stands for. Then the last part of our business model is our commercial organization. We have roughly 800 people in Ambu commercial functions and we are present with direct sales force across all the major markets worldwide. Both in the U.S. where we have close to half of our revenue in Europe and then also in the rest of the world where Japan, Australia and China are places where we have our own direct sales force. We are in these places because we value to be close to our customers. And as I mentioned in my introduction, the customers, that's an ecosystem of different stakeholders in the health system. And we have a commercial setup that make sure that we address all these needs and also are well aware of the different influences they have in the decision-making process. So in many of our markets, we have a sales setup with 3 specific sales forces, 1 that goes to the hospitals addressing pulmonology and gastroenterology, 1 that focused on ENT and urology and then 1 that focus on anesthesia and patient monitoring. Other than the field force that is out with the hospital, we have a number of other capabilities, such as inside sales, so people sitting in the -- in our offices, supporting our customers. We have tender support and a number of other capabilities that we share across the different markets we operate in. Then one thing when it comes to commercialization, there's one thing we have not talked a lot about externally and that I think it's important to also clarify and align on and that's our launch process. So what happens when you launch new products in our industry. If you compare an endoscopy launch with many other medtech products, the sales cycle varies slightly and is slightly longer when it comes to endoscopy. And let me go through some of the main steps because what we basically experienced despite having differences across different countries and different segments, overall, it's a 6- to 12-month process to launch a new product. What happens is that we are, of course, preparing well in advance. When we get the regulatory approval, what we do is that we do what we call a controlled market release. So basically, we go out to customers, having them try our product, which I mean, they're allowed to, now the product has been approved. This is something that often takes 12 weeks where the customers get familiar with the products, and we get feedback, making sure that also the product delivers on the expectations that we set. And then we start to go broader out basically engaging with the customers, doing product demonstrations. I mean they do their clinical evaluation using the products. And then what happens in most hospital is that there's a value committee at the hospital that will then look at the offering and also look at the costs and benefits. And this whole process takes a number of months varying across customers. And then finally, we are able to have a contract. And then, of course, the job is not done there because then typically they will gradually increase the use of our endoscopes. And we are, of course, focused on both getting new customers, but with that specific customer to make sure that they can see the benefits for even more patients. But I think this is also why when we launch a new product, we don't see an immediate fast ramp-up but that it takes time. And what we have learned is that it's very important that we make sure that the customers get properly familiar with the product and that we also get the feedback and get comfortable that the products also fulfill the expectations that the customers have. So in conclusion, to sum up on our business model, we have our customer-focused innovation, which is based on key proprietary technologies and a modular setup that basically drives -- reduces the risk of products not working. It drives scale and it also drives time to market being faster. Our manufacturing, we have set up with our new factory in Mexico, making sure we have ample of capacity to also fulfill our growth strategy. And then when it comes to commercialization, we have direct sales forces in all major markets. And the key focus when it comes to commercial is that we have the flexible approach that I talked about in the introduction. So we make sure that we invest and adjust so we go where the biggest return on investment is for Ambu. So with that, I'm happy to announce that we have a short break. You can stretch your legs, restrooms, as Nicolai said, are outside and get some coffee, and then we'll meet back here in 15 minutes. Thank you. [Break]

All right. Welcome back, everyone. Britt introduced me earlier. My name is Bassel Rifai, I'm the Chief Marketing Officer for Ambu, and I also lead our sales teams for Europe and Asia. Britt also shared earlier that one of the key parts of our Zoom In strategy is to provide innovative solutions to address customer needs. And for us, that for Ambu, that's a very important part because that's also a big differentiator for us as a company. Actually, when it comes to customer needs, we believe that we're one of the best in terms of being able to identify what those are in single-use endoscopy. And then we're also -- believe also that we're the best in terms of translating into innovative solutions. And those 2 things combined, the fact that we can identify customer needs and translate it into innovation, that's actually 2 of the key things that made us the world leader in single-use endoscopy over the past years. So for this session, I'm going to go deeper in to those 2 things. So part 1 is going to be really just to better understand what are the customer needs that drive the transition to single-use, and we'll talk about it in terms of needs and will also translate it in terms of market value and market potential. And then part 2 is going to be around basically a deep dive into each of the 4 segments we compete in. And then what is our plan to win. What's the progress we've made, what's our upcoming pipeline and what do we expect in terms of outlook. And then we're also going to have a chance to hear from Professor Pallav Shah, who is a Professor of Respiratory Medicine in the U.K. And Professor Shah is going to talk about what advanced bronchoscopy is kind of some of the main trends in that segment and then specifically, what the role of single-use can be in pulmonology going forward. So that will be the plan. And then -- if I can just -- as we go through the session, I think that there's probably 3 key things that you should take away from today. One of them is that single-use endoscopy is an attractive and fast-growing market. So we expect it to grow from roughly DKK 5 billion today to something closer to DKK 15 billion to DKK 20 billion over the next 5 years. So almost tripling or quadrupling. The second thing is that with our focus on innovation, Ambu is very well positioned to continue to be the world leader in the segment. And then the final thing is that for our other 2 segments in our business, anesthesia and patient monitoring, those are going to continue to be steady, stable growth contributors and profitable growth contributors for us as a company. So let's dive in, starting with customer needs. Now when it comes to customer needs, maybe I'll start by sharing that this reflects 15 years of Ambu experience, almost 15 years in single-use endoscopy. And basically, the reason this is so important is because when we decide to enter into a new market, one of the first things we ask ourselves is -- what are the -- across these 4 customer needs, what are the main segments where these play a critical role. That's where we start, and that's where we enter into build a foothold and then expand over time. That's been our strategy success in the past, and that's kind of the winning formula for Ambu to apply to future segments. So let's start with the customers. I'll go through them left to right. And I mean, you've heard already a lot from Britt and also from Dr. Sachdeva on the role of workflow and availability when it comes to single-use endoscopy. I mean, basically, reprocessing reusable endoscopes is a big challenge. And because of the increased focus on regulatory scrutiny, quality assurance, infection prevention, that challenge is only going to get bigger and bigger. And the bigger that challenge gets, the more attractive single-use endoscopy becomes. The third one is economics, and this one is also quite straightforward, is basically that for many procedures, if a doctor switches from a reusable endoscope to a single-use endoscope, they'll save money for their health system because reusable endoscopes are expensive, complex, fragile devices that often break and repair costs can run into the thousands. And then the fourth key unmet need is around patient safety and Dr. Sachdeva talked a little bit about it. But basically, cross-contamination is continuing to be a growing issue because you use a scope in one patient, then you have to clean it, then you use it in the next patient and you have to take a lot of steps in between, a lot of manual steps, a lot of steps with humans involved and humans can be prone to error. And there's increasing and increasing awareness that cross-contamination in reusable endoscopy is a big issue. And then, of course, the more focus there is on that, then the greater the need is going to be towards single-use endoscopy. So those are the 4 main things. The main kind of customer needs that are driving the interest in single-use endoscopy. And again, it's important because basically, when we started in the segment, we always start from what needs are we addressing here, build a foothold and then expand over time. And a great example of kind of this winning approach is what we've done in pulmonology. So for pulmonology, we launched our first single-use endoscope in 2009. And when we launched, even though pulmonology overall is a 5 million procedure market, we were targeting a very specific niche and only that niche in the operating room. And then basically with every generation that passed, then we were able to target more procedures in the operating room, then we were able to expand from the operating room to also the ICU. And then as you also heard with the launch of aScope 5, now we've been able to also expand into the broncho suite. And it just shows that for us, success is all about entering into a market, starting with the segment where the unmet need is greatest and then building over time. That's been our success -- our path to success in the past, and that's going to be our path to success in the future. So those are the customer needs and kind of our approach to identifying target markets. The next question is, what does it translate to in terms of the overall endoscopy market? And I'm going to take you through it in 2 slides. We're going to go through 1 slide, which talks about how we look at the market overall in terms of volume and then we'll talk about what it translates to in terms of value. So if we step back now away from pulmonology, overall looking at endoscopy, we see endoscopy as a 100 million procedure segment. Every year, 100 million procedures are done -- endoscopy procedures are done in the main markets we compete. Actually, if we look globally, it's closer to 150 million or 200 million. But 100 million in the main segments we compete. And then you can see how they break down between the 4 key areas: Pulmonology, Urology, ENT and GI. And then the second thing is, within that 100 million you can see, first of all, what is Ambu sales volume today. So we sold 1.7 million single-use endoscopes last year. So we're less than 2% of the overall endoscopy market. You can also see how it breaks down. If you use -- if you include competitors in that, too, then it's just over 2% of endoscopy market is single-use. And then if we just look at what are the target markets we compete in today, the areas that we focus on, that's 16 million procedures, 16 million procedures we target with our current portfolio. And then if you add to that, our near-term pipeline, the pipeline that Britt shared earlier, that 16 million becomes 23 million. So the 3 main takeaways from this is, number one, even within the existing areas we compete, there is significant headroom for future growth. We're operating in -- we've sold 1.7 million endoscopes last year and we're operating in a 16 million procedure segment. The second key message is that the target segment itself is going to grow over time. So even when we launch our -- just when we launch our new term portfolio, that 16 million will become 23 million. And then, of course, I mean, the third key takeaway, which is potentially the most exciting for the long term is that even when we've gone through this entire growth agenda and achieved all the targets and financials that we are going to lay out today, that will still only represent that we're targeting and going after a quarter -- less than 1/4 of the endoscopy market, which means that the long-term potential for single-use endoscopy is significant. Now I mean, if this is the picture in terms of the value or the procedure volume and the segments we target. Then, of course, the 2 key questions are, what do we expect the single-use penetration to be within those segments? And then what does that translate to in terms of market value? So let's talk about that. And basically, I mean, the overall takeaway is that we expect the single-use endoscopy market to more than triple over the next 5 years to grow from DKK 5 billion to somewhere between DKK 15 billion to DKK 20 billion. And I'll kind of walk you through how we see that. But basically, we start on the left with the target market with near-term pipeline. Those are the same slide -- the same numbers you saw on the last slide, the 23 million procedures that we target with our current portfolio, combined with our near-term pipeline. Then the second chart is what would happen if that entire market, all that 23 million procedures transition from reusable to single-use, theoretically what's the value of those segments? And you can see for Pulmonology, it will be DKK 8 billion, for Cystoscopy DKK 7 billion and so on and so forth. But of course, those segments are not all going to transition to 100% over the next 5 years. So then the question is, what do we assume in terms of 5-year penetration, and you can see that on the third column. And it basically shows that you have some segments like Cholangio, which is already fully transitioned to single-use. Then you have areas like Pulmonology, which is we expect to be more than half single-use in the next 5 years and so on and so forth. You can see the different segments at different stages of penetration. And for all this analysis, by the way, we don't include anything about the Colonoscopy segment, which, of course, is a huge segment in terms of procedure volume, but where we still have some work to do to understand what the potential can be. But if we just take that market potential, the 100% penetration, multiplied by what do we expect penetration to be and then add those all up, you get to the DKK 15 billion to DKK 20 billion target market that we expect over the coming years. And I think the 2 main takeaways from this is, of course, number one, that this is a very attractive, fast-growing market that we compete in and that we're a market leader in. And then number two, which is important also is that it's a very well-balanced market outlook because historically Britt also shared this that, historically, we were very dependent on Duo for our success. And what you see here is not an outlook that says we need to make one big bet and hope that or we now expect that it pans out. It actually says that we a bunch of different markets in different stages of maturity, different risk levels, all of which are contributing to the overall single-use value of DKK 15 billion to DKK 20 billion. And that's a very important thing in terms of -- also how we run this company to maximize value and also to minimize risk. So then stepping back and again, putting the entire thing in terms of volume or in terms of value, this is what it looks like. It's a DKK 5 billion market today. It's growing to DKK 15 billion to DKK 20 billion in 5 years. And of course, the long-term outlook and the key question is, what will happen beyond those 5 years, because then if you start saying what will happen to those -- if those entire 23 million target procedures at some point migrate to single-use, that could be a DKK 45 billion market. And then what if at some point in the distant future, the entire world of endoscopy translates into single-use. And that, of course, would be a significant long-term potential. So that's basically where we are in terms of market. That was Part 1. And then now let's move to Part 2, which is all about if that's the market and those are the segments we're competing in and where we see the potential, what is our plan to win in each of those segments. I'm going to go through each of the 4 segments, which is Pulmonology, Urology, ENT and GI. And then I'm going to start with Pulmonology. And as we've often shared, for Pulmonology, returning this segment to growth is a key priority for Ambu. And basically to achieve this, we have 2 focus areas. Number one is to grow and defend our position in the OR and ICU. And then number two is to drive conversion to single-use in the Broncho suite. For the OR and ICU, this is a 3 million procedure segment and it's a segment that's 2 main dynamics. Number one is it's 40% penetrated into single-use, and that means there's plenty of headroom to grow. And the second is we have competitors coming in, and that means we need to find ways to also defend and differentiate ourselves. And from an innovation perspective, basically, our plan to respond to that is that we wanted to have a -- or we plan to have a market-leading total airway portfolio. And for us, that will include our bronchoscope, aScope 4 platform and aScope 5 platform. It's going to include our VivaSight too, which we're very to relaunching and that's a unique solution for one-lung ventilation. There's no other competitor that has something like that on the market. And it's also going to include our Shore size, which is our next-generation video laryngoscope. And the important thing about this is that all of these are going to be stand-alone differentiated solutions. But on top of that, they're all going to be connected to the Ambu ecosystem to our aView 2 Advance platform and our aBox 2 platform. And that basically means that compared to today, where we have aScope 4 facing some competitive threats from kind of me-too products with some differentiators. If you fast forward to when we launch these products, we will basically have a market-leading portfolio in the OR and ICU. And when we have that, combined with our dedicated commercial infrastructure, those are going to put us in a very strong position to defend and grow our business in those segments. And then second priority for Pulmonology is to enter into the Broncho suite. And the Broncho suite, as Dr. Shah is going to share more about in a second, is a 2 million procedure segment where doctors are doing some of the most advanced bronchoscopy procedures. It's a segment that's almost fully reusable today because up until today, no single-use endoscope has been able to meet the performance requirements of these doctors in this advanced setting. And that is until today because now with the launch of aScope 5, for the first time, there's a single-use scope out there that's starting to meet those needs. And we're actually -- we're very proud to share some of the -- we're proud to see some of the evidence that's coming out, clinical evidence -- preclinical evidence that's talking about aScope 5, not just being the market-leading single-use bronchoscope, which is something, of course, we're proud about and expected, but also that it's starting to be on par or superior to reusable endoscopes in many important areas. And that is -- that's kind of a first for endoscopy. So it's worth kind of recognizing that for a moment. Up until now, in the world of endoscopy, basically if a customer was transitioning from a reusable endoscope to a single-use endoscope, it was usually because they were getting some sort of convenience or safety benefit, but not because they were getting a performance benefit, there were actually, in many cases, willing to accept some performance trade-offs in exchange for all the other benefits. But with aScope 5, for the first time, we're going to be launching a scope -- we are launching a scope that carries all the benefits of single-use and on top of that, it has the performance competitor or improvements that allow it to go head-to-head against the reusable endoscope. So that -- and that's also the experience we're having now that we're going to the commercial launch. We're continuing to see very positive feedback in a clinical setting and papers coming out on our product being used in some advanced procedures. But to share more on that, I'm actually going to welcome Professor Shah to the stage. So Professor Shah is a Professor of Respiratory Medicine in the U.K., and he's going to share more about what's happening in advanced bronchoscopy today and then also what the role is that single-use can play. So Professor Shah?

Thank you, Bassel. Thank you very much. It's a pleasure to be with you to really share with you my kind of passion and enjoyment in respiratory medicine. Now a lot of you will be familiar with some of the growth areas in technology and I think a lot of innovation and investments done in pharma. And also, if you look at devices, you have a huge amount of investment in cardiovascular and also gastroenterology. But what I'd like to show you today is really respiratory is where the growth area is. This is where Ambu can make a difference. This is where there is a lot more growth potential compared to all of these other areas of medicine. And also, what I just want to try and give you a flavor for it. I mean I can't show you all the things we can do in 15, 20 minutes, but what I can do is give you a flavor for what's the direction of growth, what's the kind of innovation potential, where are we compared to just being in the ICU where Ambu was being used to my bronchoscopy suite, where we have a lot of complex procedure and we're really transitioning towards that panacea that people used to talk about 10 years ago. Natural orifice transesophageal surgery. So that's really where the direction we're going into. And you can see that we've got a portfolio of procedures that not only looks at diagnosis, because traditionally bronchoscopy was diagnosis. It was all about diagnosing lung cancer, and that was about its potential. And now I'm going to share with you kind of therapeutic procedures in emphysema, in asthma, in COPD, chronic bronchitis. If you look at COPD, the prevalence globally is 10% of the population over the age of 40. So this is a huge growth market. And if you marry it with the right tools, there we have a lot of potential. So traditionally, as you've kind of heard, we used to think of single-use scopes as you know used for very simple basic procedure, have a quick look at the airway, maybe get some saline samples from it, maybe use it for intubation. But what I'll show you is that we've got the potential now to have a reusable -- a disposable single-use scope, which can fulfill virtually all of my needs. And also, if you look at the device field, 10 years ago, before the Bovine spongiform crisis, we were using reusable instruments as well, not just reusable scopes, but reusable instruments, reusable needles, reusable forceps and now that market is completely single-use disposable instruments. And I think this is the next step forward to going completely disposable. And also some of the procedures I'm going to show you are going to be -- they're invasive procedures. They're not just a simple diagnostic procedure. You have the potential to introduce infections into these patients with reusable scopes and, therefore, a single-use makes a lot more sense. So a part of this portfolio, you can see that the current aScope 5 that's been introduced meets a lot of the characteristics that I'm looking for, for a whole variety of procedures. Now for example, when we perform endobronchial valve placement for emphysema, we have to quite often get to very difficult anatomical areas. The right up below apical segment has quite a curve and our standard instruments sometimes don't allow it. So our current gold standard is the Olympus scope. And you can see with that scope, with the tool in place, the deflection that we can achieve at maximum is about 160 degrees. But with Ambu scope, I can almost get a look literally on itself with 180-degree turn. And that will allow me to place these tools much more effectively and more precisely. And in fact, this is a valve procedure that I did with the current aScope 5 a few months ago. So with this procedure, you can see that, we essentially -- this is in emphysema, where you get hyperinflation. Normally, you have surgery for this procedure. Patients in the ICU for like 5 days, maybe 10 days. I can do a procedure where the patient just comes in. We use a catheter-based technology. We place these one-way valves into the airway. These one-way valves allow the lung to deflate and have the same effect as lung volume reduction surgery, but without all the kind of complications and risks associated with it. Now that valve I placed, as you can see, it goes quite high up in the apical segment and normally it'd have been a bit more challenging to place that valve with the conventional scope, whereas it's a lot more simplified with the current aScope 5. So much more refined procedure. We normally need excellent optics for this procedure because I want to place that valve with micro precision. So before with single-use scopes, that was not possible. We couldn't get the kind of refinement visually that we'd like. We couldn't get the flexibility we'd like. But with the aScope 5, it actually meets my needs and maybe almost is more superior to the current gold standard. So it allows us this kind of precision placement where we can literally deploy the valve and place it like a leaflet rather than firing it like a bullet, which we would have to do without the precision there. This is another area. So this patient with a tumor. This tumor is in the trachea. If we do not do anything, basically, this patient would get infections and start going into palliative care and suffocation. But again, with flexible devices, we can do diathermy to resect this tumor. So just with one quick moment with a snare, we've literally resected most of that tumor away. You can use coagulation probes to debride the tumor from the side, free it up and then again put a snare over it. So these are procedures we need a bit of technical finesse, we need the right amount of vision to be able to see it properly, but also this -- Ambu scope is the only scope which has the ceramic tip in it. It's the only single-use scope, which allows us to use electrical tools, which have the risk of causing electrical energy, shocks, fires, et cetera. And yet we can achieve this also with disposable scopes. And in this patient, we virtually debulked the whole tumor in the space of 10 minutes with this kind of flexibility. So again, really just showing you the kind of breadth of procedures we can perform and the utility of these kind of systems. Here's another one. This is the treatment we do for asthma. I mean in asthma, there's a huge unmet need. In the Western world, if you look at just Europe, there are about EUR 300 million spent each year trying to look after these patients in hospital. And yet, we have therapies, which are still underexploited. This is bronchial thermoplasty where we use radio frequency energy to ablate the smooth muscle. In asthma, it's the smooth muscle that causes the constriction. The airway is tightened up. That's why the patient feels breathless and cannot really get the gas exchange they need. If you thermo-ablate and destroy the smooth muscle, that relax -- that constriction of the smooth muscle is eradicated and these patients feel much better. There are fewer exacerbations, they're less breathless. And again, I'm trying to demonstrate to you a procedure and potential, which can be very comfortably and easily done through aScope 5. aScope 5 has a scope, which has an outer diameter of 4.2 millimeters. It has an inner diameter of 2 millimeters. So I can comfortably pass this tool into the more distal airways that I need to. And therefore, really quite efficiently and easily do this procedure with aScope 5. So -- and you've seen the quality of the imaging and everything, and you can see how we're transitioning to being able to do these things really quite precisely. Now this is another interesting procedure. Now in this patient, they had cancer, they had radiotherapy. And basically, the left main bronchus had completely disintegrated. The gastroenterologist had put an esophageal stent in. But when I did my camera procedure, I could actually see the metal work of the esophageal stent in the left main bronchus. That's not a great idea. And therefore, I had to put another stent in into the airway to protect that airway and stop food from going into the wrong place into the lungs. So here, we have a thin scope. So this scope has an external diameter of 2 millimeters, so I can pass it along my endotracheal tube and actually very carefully under direct vision place a stent with utmost precision. I mean this is in real time, but you can see it looks like it's in slow motion, just really slowly kind of deploying and there's a metal work what you can see from the esophagus, which is the esophageal stent penetrating into the left main bronchus. But really just trying to illustrate to you the precision that we need with these kind of procedures, the finesse and the quality of imaging that we need and that's why the aScope 5 makes a huge difference to us because it will allow us to facilitate these kind of procedures. So now effectively, I've created another artificial airway where this now forms the lumen of the airway and reduces the chance of food and debris going from the esophagus into the left lung. More developments of chronic bronchitis does not have a treatment. It affects 10% of the population like I mentioned. And this is a treatment where we can use liquid nitrogen to freeze the epithelium. It ablates the epithelium immediately and that allows the epithelium to grow from the stem cells and the regenerated epithelium is younger and also has less goblet cells and the patients make less mucus. What's the problem with this procedure? Well, liquid nitrogen freezes the airway to minus 196 degrees, but also it's a gas that expands to 700 tonnes of its volume. So if this gas cannot escape properly, that patient literally will be blown up. So here you have a tool where -- with the Ambu scope, we can actually use a very thin scope. So there's lots of space around it. We can put our tools in. We have a good vision and yet it allows that gas to escape. If the gas can easily escape, then you're not going to get that complication. So another area where just having a different tool just helps us make it happen. And this, I'm just showing you another variation of the tumor. So I showed you the hot treatment earlier, which was the electrocautery, but we can very similarly do stuff with ice. So here we have a cryoprobe and effectively, what we can do is to apply to the tumor and then basically use that as a way of resecting the tumor. It needs less precision and skill than the snare and the electrocautery method and again, just facilitates it. In this kind of situation, I want a tool that will give me plenty of suctions. If there is any bleeding, then I can very comfortably suction away the blood and manage this procedure carefully. So what I've tried to do is show you just the kind of glimpse of all the kind of things we can do. But in the real terms to do all of this in my bronchoscopy suite, I need a portfolio. You can't just have one spanner in your toolbox. You need a variety of tools to be able to do your work. And I know everything is a Philips screwdriver. You need different kind of tools and instruments to really achieve your work. Now if you think about most of these scopes cost GBP 30,000, I'm not how much that is in Danish kroner. But so just having one of there all of this is going to invest about GBP 300,000. I've got 40 in my bronchoscopy suite. We're an international center. We can afford to do that, but not every hospital can. So how can you reduce the cost? There's a huge capital cost with these kind of tools. So you can't make the most of them, then it doesn't really work. But all of a sudden, you now have these disposable scopes. I'm not making any capital investment. So I have a niche procedure. So for example, for that stent, I've the ultrathin bronchoscope would be perfect for that. I only use it 10 times a year. Is it really worth spending GBP 50,000 on a scope, which I'm going to use 10 times a year? Or is it better to have a disposable single-use scope, which I can use as and when I need it, and I'm using it on a pay-per-use basis. So for me, having a wide range of toolbox, which Ambu has now achieved with this aScope 5, I've got 4 different products, and I'm sure we'll have 3 or 4 more products very quickly. Plus the life cycle of your tools are much quicker. When you have a system where you're using disposable products, you can create new tools very quickly. Whereas if I'm going to have a reusable system, it's going to take me 5 years, 8 years to go from development through to product delivery. And you could probably squash this development into kind of 2 years. So there are so many drivers that are going to push all of this towards single-use. The versatility and diversity of the procedures we can do, the invasiveness. So now that we're doing invasive procedure is no longer good enough to have a disinfected scope. Remember, our reusable scopes are not sterile. They're just disinfected. So there is a driver for using sterile instruments and sterile scopes. And that, again, is achieved through using the single-use products. Other people have already talked about the workflow, the repairing costs. When you're doing invasive procedure and you have these remarkable tools you're putting through, when you're training people, but even when you're developing new techniques and new procedures, there's a high tendency to breakages and damaging reusable scopes. And again, you can see how it's much more sensible economically and in terms of workflow as well and in terms of not having to suspend your service because you've destroyed all your scopes. Really, that's a big driver for single-use instruments. So just to reiterate it, I think I hope I've shown you that interventional pulmonology is going to outstrip gastroenterology and hopefully, cardiovascular 1 day in terms of growth potential. I can best chose the -- the numbers there are different scale. But we're going to be on their coattails and really run this area through. So with that, I'd like to thank you.

All right, thank you, Professor Shah. We like a bit of competition between pulmonology and GI doctors. That's good. I mean sitting aside, of course, first of all, it's amazing to see just what advancements have happened in bronchoscopy. Those are a lot of things that Professor Shah shared would be things that either wouldn't have been treated in the past or would have been treated using a much more invasive means of endoscopy. I remember other one is a less invasive way of doing health care. And that's, of course, one of the main kind of macro drivers behind this. So thanks for sharing that and also for sharing the role that aScope 5 and Ambu can play. And that's, by the way, also from Ambu's perspective, why -- because of those drivers, that's why for us, one of our main priorities is to enter into the Broncho suite. And then just the time it kind of wrap things up in pulmonology just between the plans to enter the Broncho suite and then to grow and defend our position in the OR and ICU. We believe that we're going to be well positioned to have sustained growth in pulmonology over the coming years. So now moving forward and the plan now for the rest of the session, I have 40 minutes on the clock, but I have a few segments to go through. So I want to take you through ENT, Urology and GI. And of course, within GI, there's a few subsegments. So this is going to be the marathon session, but hopefully, a lot of insights for you to all take away. And starting with ENT. So for ENT, this is our second entry into endoscopy, starting with Broncho then we went to ENT. For ENT, we entered in 2018, '19, and we've had a lot of adoption, mostly because of our workflow and availability benefits of single-use, not as much around repair or cross-contamination for these kind of more simple procedures. And for us, the 2 key objectives is, number one, to continue to commercialize aScope 4 platform and continue to drive growth there. And the second is to unlock a new path to the market, expanding into the outpatient setting with next-generation ENT high-resolution scope. And before I dive in, I just want to share one customer story for ENT. So we don't unfortunately have a live customer here, but I want to share the story of Jackie Mojica, who's the speech pathologist in New York City. And like many other clinics, Jackie is struggling with all the workflow challenges. She is based in New York City where space is at a premium, so they also don't have a bunch of room to have all the infrastructure around cleaning, drying, culturing, sampling, et cetera. And so for them, transitioning to single-use was a clear option. And when they took the decision to switch, you can see the feedback here that they see improved operating efficiency. They don't spend time on logistics and they can see more patients in a day. And of course, I mean, that is -- it's quite simple there, health care professionals want to see more patients in a day and anything that can support them to do that is, of course, something that they're going to have a lot of interest in. And it is customers like Jackie, who are continuing to rapidly adopt the ENT scope. So we launched, again, in 2018, '19. Last year, we sold over 300,000 ENT scopes. Stepping back, it's a 17 million procedure market. And the main focus we've had so far is just one segment, which is the inpatient procedures. But the key thing is that for the future, we want to expand also into an outpatient setting. The challenge with that has been that we've had a barrier, which is the image quality of our fourth-generation platform in the same way that for Professor Shah, we couldn't enter into the Broncho suite with aScope 4, but we could with aScope 5. Our plan will be for ENT that we go from just covering the inpatient setting to also being able to go into the outpatient setting. And when we do that, we're going to -- we're going to more than triple the addressable market for our ENT platform. So that will set us up for a strong continued growth in the ENT segment. And then let's turn to Urology. For Urology, we basically have 2 main priorities. Again, this is a segment we entered into a year after ENT, so 2019, '20. And here, we basically have one goal, which is to continue the successful expansion of aScope 4 Cysto, together with Cysto HD. And the second one is to enter into the ureteroscopy segment, and that's a segment where single-use is established and already fast growing and we have a huge potential to continue to expand the market with competing players and also to take market share. So for Cysto, like ENT, it's been all around workflow and availability. Overall it's a 10 million procedure segment. And as I shared, we sold over 400,000 units last year. The main focus here has been on the hospital setting. And one of the key priorities we have is when we launched the Cysto HD scope, similar to what we're doing in ENT, it will allow us to expand the types of procedures that we can cover. So in the case of Cysto, 1 key area that we haven't been able to cover is bladder cancer screening, detection and so forth. And once we launch the Cysto HD scope, that's going to unlock an additional, that you can see here, 2.5 million procedures in the market. So like ENT, it's going to be a segment where we have a lot of runway for continued growth on the back of our current product, which this year, and we expect for the future, will continue to have high momentum and then also with our next-generation product. All right. So moving on to Uretero. This again is our second priority within Urology is to enter into the Uretero segment. This is a segment that has already progressed in the transition from reusable to single-use. Reusable ureteroscopes are, you've seen they're long, thin, flexible, fragile scopes. More than any -- and they're being used in procedures for stone treatment. So when you are doing a kidney stone treatment removal, that means you're passing through lasers, other like aggressive instrumentation. Sometimes you're also having to really aggressively maneuver the endoscope to try to get to the position of stones. So for all those reasons, ureteroscopes are very frequently breaking. Those studies coming out that say -- come out and say that forgetting about the capital investment, forgetting about reprocessing, forgetting about all, if you just look at the repair cost per procedure for ureteroscope, it's $450 on average. So then if you can imagine adding everything else around that, the value proposition for single-use becomes very clear. It's mainly about economics, and it's mainly because when you transition from a reusable ureteroscope to a single-use, you save money. Because of that, the market has already transitioned somewhere between 20%, 25% transition to single-use. So our plan is going to be to launch a high-performing ureteroscope. And with that, the goal will be to enter the market, expand the market ourselves and also take share from existing players based on our performance and based on our commercial infrastructure. And that's actually an important point, because 4 years ago, I mean, urology is a great example of a segment that we had no customer relationships. We had no sales force. We had no product 4 years ago. And then if you fast forward to today, it's an area where we have one of our most attractive segments that we compete in and with even more runway ahead when we launched the ureteroscope. So it's a good example that we have -- with the modular innovation and with our approach to selling single-use endoscopes, those can successfully allow us to enter into new segments where we didn't -- we haven't previously participated in. Okay. So that's ENT and Urology. Now moving on to GI. So for GI, basically, there are 2 main, I'd say, takeaways for the GI section. Number one is, it is -- as you saw earlier, it is a very large market. And in that market are many attractive segments for us to go after. And then the second thing is that we are very well positioned to enter into this market and to drive a market creation and the plan will be to do it through a focused approach. And when we say focused approach, we say it for a very specific reason, which is that we want to maximize value and we want to minimize risk. That's how our approach to entering new markets in line with the Zoom-In strategy. So in GI, there are 4 very different segments. Gastro, Duo, Colon and Cholangio. Each of those first 4 -- I'm going to go through each one of them. They all have very different dynamics. The common thing about all of them is that we're going to take that same approach of entering in a given target market and then expanding stepwise over time. I'm going to spend a little bit more time on Gastro and Duo, and then we'll go more quickly through Colon and Cholangio. So let's start with gastro. And for gastro, I mentioned earlier, it's a 28 million procedure market. So a huge market, very similar conditions to what's driven single-use endoscopy in other segments. So there's a lot of procedures taking place outside the GI suite, in the operating room and intensive care, sometimes even the ER. There's a need for customers -- for health systems to do more and more procedures, growing waiting list issues and so forth. And all that is coming up against capital constraints and labor shortages. So those are like the macro conditions that are driving the need for single-use gastroscopy. And on the back of that or with that environment, we launched aScope Gastro and aBox 2. When we launched, our initial focus is 2 million procedures taking place outside the GI suite. And again, I mean, you could look at that and say, 28 million procedures and here we've already decided to focus on 2 million. But I think one of the key takeaways from today is that when we start with 2 million, it doesn't mean we ignore the other 26 million. It means that when you're entering into new market, the best place to start to maximize value and minimize risk is the areas where there's the biggest need. That's the clearest way to gain a foothold. And then once you have that foothold, you can continue to expand over time. It's a very resource-efficient way for Ambu as a company to enter into a new segment. So the plan will be to enter into this 2 million procedure segment. And then, of course, we will opportunistically also chase other parts outside the 2 million. So if I look at it today, we have a growing base of reusable customers. A lot of those customers are surgeons or customers doing procedures outside the GI suite, but we also have a healthy amount that are doing cases inside the GI suite, either because they need to scope with a backup or for the typical logistics cases, nights, weekends, out of hours, those types of things or for specific procedures where they want some of the performance characteristics of our scope. So well, the focus will be the 2 million, but of course, we opportunistically look outside of there as well. So now in terms of the 2 million, there is 1 customer here I can share a little bit of our customer story from. So I'll start with -- and I think we have to play the video here. I'll start with the video from a general surgeon in the U.S. on what their experience has been since adopting aScope Gastro. [Presentation]

I mean it would have been great to have him here in person, but at least good to hear from Dr. Washington. And for me, I mean, for sure, 2 key messages that came across, and I thought were very important from that video. Number one is he talked about, it's made my staff happier. And efficiency, making staff happier, especially I think everyone here hears the new stories about the challenges that hospitals are having, the challenges with staff turnover, the challenges with burnout, which are real issues that health systems are facing and they're struggling and they don't see a clear -- an easy fix or an easy solution. So the fact that we can contribute alleviating that a little bit is a strong signal. And then the second thing, which really, of course, excited me is that eventually reusable scopes will be a thing of the past. Now I shared earlier that even in our 5-year assumptions, we think only a small part of the market will be transitioning to single-use, but then it is kind of exciting to hear that someone speak about that, because when we think long term, of course, this is a very large procedure segment. So the opportunity could be significant. And then the last thing I want to share on Gastro is kind of an exciting update and a new piece of information that we wanted to share with this group is that we have identified another attractive niche within gastroscopy. And it's for specialty procedures that require a scope with a large working channel. Procedures like bleed management or necrosectomy, procedures where you want a large working channel either because it offers better suction, so you can manage a bleed or where it allows you to pass larger instruments. And we've taken a decision, and we've had some development on this ongoing to add to our pipeline, large working channel gastroscope. And that's a project that's under development. And when we launch, it will expand the addressable market that we reach in Gastro by 75%, so from 2 million to 3.5 million procedures. So between Gastro and the progress we're seeing in terms of adoption, rebuying customers and the future launch of Gastro Large, then that's going to position us well to start to create a single-use market in this segment. Next, let's switch to Duo. And for Duo, I thought -- we want to share some perspectives on Duo and also share a little bit about the history of Duo and the history of Ambu in Duo because it is quite a journey we've been through in this segment. And unlike other segments, Duo has been one where the main driver towards single-use has been around patient safety. And it started in 2019. Well, it started before that, but I think there was growing awareness. And finally, in 2019, the FDA issued a report warning health systems about issues with contamination of reusable duodenoscopes. Duodenoscopes are one of the most complex and difficult to treat -- or difficult to clean endoscopes in any -- in the world of endoscopy. They have some very intricate parts that it's very difficult for any human or automated reprocessor to fully clean. So cross-contamination from one patient to a next between cleanings is a growing issue. After the FDA issued this warning, the next thing they did was to issue guidance -- soft guidance, it wasn't something that was enforced, but it was clear guidance to health systems saying, you should not use reusable duodenoscopes because of the risk of cross-contamination. You should transition to either single-use duodenoscopes or reusable duodenoscopes that have detachable disposable components that facilitate cleaning. And then later that year, they put in place specific reimbursement just for single-use duodenoscopes. That started in the government healthcare and Medicare and then it expanded also into private insurance market in the U.S. So that was the backdrop, the customer need and the clinical need and patient safety need behind which Ambu launched its Duo 1.0. And for Duo 1.0, because of the urgency and the clinical need, Ambu got breakthrough designation status for Duo 1.0. That's kind of a designation that's only awarded to maybe 5% or I think a little bit less than 5% of all medical devices. So it allowed fast-track approval of our products because of the customer needs. Then we launched Duo 1.0. And what we learned was that this was a much more challenging and clinically complex environment. We underestimated the complexity. We underestimated the complexity of the procedure and we underestimated the high bar that advanced GI endoscopists have for the performance of a duodenoscope. We ran a clinical trial, and the results from that trial was that our Duo 1.0 was able to successfully complete 85% of procedures. And just for reference, for ERCP, a typical quality metric will be 93% or above. Most doctors will say they wanted to be between 93%, 95% completion rate to say this is acceptable. So then, of course, we took the feedback. We saw that this wasn't meeting our customer needs. We decided to pause the commercialization. We decided to take the feedback and make some incremental improvements to the product, still within the kind of 1.0 generation, but what improvements we could make to address some of these challenges. Nine months later, we launched Duo 1.5. And the thing that we are very excited about 1.5 was that then as we went through the clinical trial, we actually found out that this was a step change in terms of product performance. So those same clinical trial sites, the same doctors went from an 85% success rate to a 96% success rate. And as I said, that's in line with ERCP kind of quality metrics. But then as we moved more towards commercial launch, what we realized is that although doctors are able to successfully complete the procedure with 1.5, they're still having some challenges with the scope and those challenges will become barriers to adoption. And they gave us very clear feedback. I mean these are doctors now that we have growing deeper relationships with. And they shared with us that we have 3, and not to get technical, areas that we need feedback, which is we need to improve the image quality, we need to improve the elevator performance of our scope and we need to improve the ability to pass instruments through the scope. And that's basically where we are today that because of those challenges, we're seeing a limited adoption of Duo 1.5, and then we're looking more towards the future and what to expect from Duo 2.0 and the future beyond that. And for us, the -- I think there's 2 key messages to share when it comes to Duo 2.0 -- or to the Duo segment. Number one is that we continue to believe in this segment and continue to believe it's going to be an important market opportunity for the future. I mean you can see it here, it's a 1.4-million procedure segment. So when you compare that to 28 million gastroscopies, it sounds small. But -- and even within that 1.4 million, we're only going to start targeting 1/4 of that, 350,000 procedures -- 350,000 because those are the procedures that take place with high-risk patients, patients that are immunocompromised or infected, the ones where if you ask most ERCP doctors, that's where I want to use a single-use scope or low-volume centers. Those are centers that are doing 100 ERCPs a year, 200 ERCPs a year. Those centers are actually some of the highest variability in terms of reprocessing standards. And so for them, single -- transition to single-use can be a good option. And even if we just start -- look at that 350,000 procedure segment, then if that transitions to single-use, it represents a DKK 4 billion market opportunity. So in terms of procedure numbers, it always appears smaller. But for Duo, the value per product or per case is so high, that this continues to be a very attractive segment for us. So that's number one. And then number two is that we do expect to meet performance requirements with Duo 2.0. Again, we've gotten very clear feedback on the 1.5 platform. We've taken very specific decisions to continue development of Duo 2.0 rather than kind of rush it to market. And the purpose of that was to make sure that the very specific feedback we got, we address in this generation. So in this generation, you're going to see improvements in image quality, improvements to elevator performance and improvements to the ability to pass tools. We've taken the latest development versions. We've had preclinical testing with U.S. and European doctors, and we've continued to get positive feedback on this generation of the product. So the plan will be -- as we continue development and then get to launch, the plan will be to launch it in a very focused way, specifically targeting these 350,000 procedures in ERCP. And then just to round things out when it comes to GI, we have colonoscopy, which is our third segment. Colon is a segment which we've probably gotten the most questions about. Why are you continuing with Colon, should we pause Colon? And actually, we talked a little bit about it in November that if this was a product that was early on, had a lot of investment ahead of us. In the context of the Zoom-In strategy, we might have taken the decision to pause Colon, and that would have been the right decision. But the reality has been that -- there have been a lot of development synergies between the gastroscope and the colonoscope. They basically have gone hand-in-hand for a lot of the way. And most of the investment in the colonoscope is behind us. So when we look at it objectively, the correct business decision is to finalize the colonoscope and launch and bring it to market. And when it comes to the market, in many ways, it is a market that's very similar to gastro, where it's a very large volume segment and there are niche areas like colorectal surgery that can be attractive, procedures taking place outside the GI suite. But at the same time, we know it's a product where the performance requirements are very high, high in terms of very specific handling and in terms of image quality. So our plan with the colonoscope is we're not going to go into a full commercial launch because that will also represent the investment and resource and risk that represents. Instead, we're going to bring it to market. We're going to test it in a few key centers. We're going to get product feedback on the performance of the product and also where it can fit. And then once we get to that point, we'll take a decision on where to proceed from there. And then finally for Cholangio, this I shared earlier as a segment. That's already transitioned to single-use. So these are -- even compared to uretero, these are longer, thinner, more fragile scopes. So the repair costs had become very high and the movement towards single-use already happened. Our plan here is to develop a best-in-class solution. And then when we launch this product, we expect to both continue to expand the market and then also take share from the existing competitor. So stepping back for GI overall. I mean, basically, I think there's 3 main takeaways when it comes to our position and approach in GI. Number one is, as I shared, this is a very large and attractive market that can have very -- like many attractive niches for us to enter into. Number two is, based on what you've seen, we've made significant progress on our innovation agenda. And then the final thing is that we expect that with the focus areas that we have with the targeted approach towards our launch, we're going to be in a very strong position to enter into this market and start to create the market and be the market leader in GI. And then just to round things out now, we've covered endoscopy. Now the last thing we want to cover is just anesthesia and patient monitoring. And these segments represent our heritage. These segments are areas where we have a very strong portfolio, a very strong position in the market, a strong brand reputation. And the focus for us in these segments is going to be on optimizing the portfolio, driving continued profitable -- sustained profitable growth. Optimizing the portfolio across anesthesia and patient monitoring and then making select innovation bets, especially within patient monitoring. So let me share a little bit more about what that means. In terms of anesthesia, there are 3 areas we compete, resuscitators, masks and circuits. Overall, it's a DKK 3 billion value market, and it's growing at low single digits. The main growth drivers are demographics, and we also benefit from some favorable mix shift in the way treatment is done moving from endotracheal tubes to laryngeal masks. But in general, it's just quite a steady slow growth segment. For us, we have a very strong value proposition and a strong position in the market and a big focus is going to be just around optimizing profitability and that's going to happen in the context of this business and also in the context of the transformation program, which Britt has spoken about. And then finally, when it comes to patient monitoring. Again, here, we're also in 3 segments, cardio and then 2 segments within neurology. This is a DKK 4 billion segment growing low single digits. And in this segment, for the most areas, we are a high-quality premium player. So in this area -- in this part of the market, we have an opportunity to strengthen our portfolio also with some incremental innovation. And between optimizing our profitability across anesthesia and patient monitoring and introducing some select innovation, we'll be in a strong position to drive stable profitable growth in these 2 segments while we focus our future growth also towards endoscopy. So just to wrap up my section before we move towards Q&A, again, I think there's 3 key messages to take away from innovation and how we plan to provide innovative solutions to address true customer needs. Number one is single-use endoscopy is a large, attractive, fast-growing market. We expect it to more than triple over the next 5 years from DKK 5 billion today to DKK 15 billion to DKK 20 billion in 5 years' time. Ambu is well positioned to continue to be the world leader in this segment. We're the world leader today in each of the segments we compete and we expect to be the world leader in all segments in the future. And we're going to do that through our focused approach to innovation and our targeted approach to commercialization. And then finally, when it comes to anesthesia and patient monitoring, we expect these businesses to continue to drive stable profitable growth for Ambu. So with that, I will ask Britt and Thomas to join me on stage, and we'll start a Q&A session.

Yes. So thanks a lot, Bassel, first of all, for a very comprehensive and good presentation. So what we'll do now is to open up a Q&A session. It's only for people in the room that can ask questions. And given we'll have a second Q&A session towards the end of today, I think questions around our financial sustainability, execute -- our transformation program -- I mean, should be saved for the last section when we have been through those. But everything that covers our portfolio, the market, what we have gone through, I think it's relevant to ask questions now. So we have 2 of our good colleagues with mics in the room and we'll take the questions by -- if you raise your hand, then you should only post a question when you get a mic. I think we'll -- I think Niels you were first, so we'll start with Niels with the first question.

It's Niels Leth from Carnegie Bank. So a question on your strategy and the discussion whether you should address a few categories in its debt or to go broader across multiple categories. Have you made any considerations around focusing on fewer categories, but then or for multiple products within those categories, say, tools, softwares, et cetera, rather than spread your resources across multiple categories and within endoscopes? And would you not be concerned that single-use endoscopes in, say, 10 years will be a commodity product? And in order to own each of the categories, you would need to have a deeper assortment within each category?

So I think I can start that and then you're free to add, Bassel. I think we have had obviously a lot of considerations around what is the right approach when we look at our different segments, also acknowledging that we have an attractive and relevant portfolio of endoscopes across those portfolios. And the approach that we have taken now has been to say, I mean, we have this portfolio, we have a lot of synergies, both in our development, I mean, with the software and the systems that support that. And then we also believe, given we were first in endoscopy, we have very strong knowledge and experience on how to sell single-use endoscopes into hospitals. So given -- as we were embarking on our new strategy, we had the portfolio that we have, our decision was to focus on the portfolio and move forward with that full portfolio. And then as Bassel explained, then be much more targeted in how we promote our products. And I think we can do that because we already have a very good knowledge of the customers based on some of our experience. So that's our approach now. Also, as I shared in my introduction, we know that these segments will not all develop in -- at the same speed because decision-making is different across the segments. Requirements for product performance will vary and there are different clinical and regulatory recommendations. So it's with all this in mind, we said, I mean, let's use the knowledge we have and go in with a more targeted approach in each of the segments because we have the products and we have that knowledge. Then when you ask about the long term, I mean, in 10 years, I mean, it's very hard to predict exactly what is the slope going to be in the different segments when it comes to uptake. So that's also why we believe it's very important that we are close to the customers and close to our execution. And we would not rule out that we would look into go deeper by offering other products in different segments long term. But we think for now, we have a clear benefit in the offering we have. We are also not so -- we are not so sure that this will, in 10 years, be a commodity market because we see from our interactions with customers that there's still a lot of requirements to functionalities such as image quality and so on. Things that are not easily -- easy to commoditize because it puts a requirement on the quality of the scopes. And that's where our experience and low-cost production, we basically believe that we are positioned to be ahead here even should there over time be more players and a cost pressure. We do believe that more players also has advantages because that also helps create awareness around single-use endoscopy, which we cannot alone as Ambu do.

David Adlington, JPMorgan. So recently, Verathon indicated they expect to be #1 in bronchoscopes in the U.S. this year. I just wondered if that was something you recognize? And if so, what are you going to do to sort of counter that expectation? And possibly related to that, obviously, video laryngoscope, I just wanted to get an update on the timing of launch of that, please.

Yes. So I think, Bassel, do you want to answer this.

Sure, yes. We heard that -- also heard that announcement. I think when we're looking at the market, there may be some specific segments where that's the view of things. When we look overall at bronchoscopy in the U.S., we are confident that we are and we will continue to be the market leader. I shared earlier that our key priority is to return pulmonology to growth and behind that, the main focus is to defend and grow in the OR and ICU. So that's going to continue to be an important stronghold for us. And because of that, also the video laryngoscope is a top priority project for us in the moment. We're not communicating about specific time lines when it comes to our pipeline. But I think what you're observing in terms of the competitive dynamics is exactly also what we're seeing. That's if for us, pulmonology is a key priority then making sure that we have the right product portfolio and the right commercial focus is going to be a big focus for us as a company.

Yes. And in terms of time lines, I mean, we don't communicate time lines for our launches for competitive reasons. Thanks, David.

Zhou Wei from SEB. And I'm trying to limit my question to 2 for now. Firstly, you mentioned the financial pressure on the hospitals, which is also a big topic for the entire health care sector. Do you see this as an opportunity or a concern when you're selling the new products? I'm asking because we also hear from the doctors saying the number of single-use products they can use is very limited. They cannot use more because the hospital already were equipped with reusable scopes, and then they don't have additional resource for single-use. Would you comment on this?

I think I can comment on that. So basically, you can say it's true that in terms of the financial pressure that we see hospitals are under, there's -- I mean, to us, a positive and a potential threat. The potential threat in that hospitals are more ask to use their reusable scopes, but also a positive because when you are to have reusable scopes in the practice in the hospital, it comes with a huge capital investment. And we know that in many countries, I mean, U.K. where I was a couple of weeks ago visiting customers, a lot of their reusable setups are getting too old and have to be replaced. So they continue to see, I mean, their scopes break down. And we heard earlier also the price of buying one new scope. So we can also see that being a driver because you don't have to make these big investments into the reusable setup. But of course, I mean, the financial department of the hospital, we do see them encouraging the doctors to perform more scopes with reusable. But at the same time, then the other driver that is in favor of us is the staff that you need, and that's a shortage that we see both in Europe and U.S. that the staff needed for being able to reprocess the reusable scopes is a bottleneck combined also with the cost that every time you have to cancel a procedure, that comes with a lot of cost that people are not able to work. So I think net-net, we do see this as a benefit. But of course, there is also, I mean, the pressure on using more of the reusable in some cases.

Very helpful. My second question is regarding to the FDA's warning letter sent to Olympus last week regarding the disposable cap version duodenoscope. So what are you hearing from your customers? Do you consider this as a positive trigger for you?

Do you want to...

Yes. And maybe just for -- yes, for everyone's benefit, of course, there was a warning letter sent to Olympus from the FDA, which was talking about some observations they have when it comes to complaints -- complaint reporting and like some other kind of standards and processes around the latest reusable duodenoscope with the disposable end cap. And I think -- of course, when we saw the launch of this generation of product, we think that for us, as a company where we see that patient safety is a top priority and where cross-contamination in Duo is a big issue, then the disposable end caps is kind of -- we see it as a partial solution. And we've even seen studies come out now that show that the contamination rate is dropping with the disposal end caps, but it's not dropping to 0. And if it's not a 0, that means it's not the right long-term solution for patient care. Last week's FDA warning letter is just one in a string of activities or events we continue to see that show that the FDA is getting more and more focused on cross-contamination as an issue. We're continuing to call out when issues related to quality that can have impacts on patient safety are coming up, and we expect those all to be macro drivers towards single-use, especially in Duo but also overall for the market.

Christian Ryom from Danske Bank. A couple of questions from me as well. First, on the aScope Broncho 5. Can you talk a bit about your expectations for the shape of the adoption curve here? My reason for asking is that Dr. Shah, of course, made a very compelling presentation of how this could be used for some quite advanced therapeutic procedures. And my thinking is this is somewhat resembling what you were trying to penetrate into with the duodenoscope also some quite advanced therapeutic procedures. So should we expect that this is for -- in the case of most doctors, something that will take a long time for them to get familiar and comfortable with or do you see another rationale at play here given your existing presence in the pulmonary space?

Yes. Maybe I can cover that. I think the first thing to just calibrate is when we talk about duodenoscopes, it is at the far extreme of complexity, both in terms of the procedures and then also in terms of the endoscopes themselves. The complexity of the endoscope, the performance requirements and so forth. So even here, when we hear say, okay, we're moving from the fourth generation that was covering simpler procedures in the OR and ICU to the fifth generation, it's still like fundamentally as a product, a simpler product. It has 2-way bending. It's much -- it's fairly straightforward to maneuver. The nuances aren't as specific as for GI scopes. So it's not at the same level of complexity. And therefore, we don't expect it to have anything close to the same, let's say, launch curve as duodenoscope. I think at this point, we are -- at this point, we have high confidence that it's meeting customer requirements in a fairly straightforward way. And now the more -- the main thing that we're focused on is the commercialization process for the sales cycle. And Britt shared a bit about that earlier that it's -- of course, we go to our customers. And one thing that has happened is, Yiwei brought up with hospital constraints is we do see a longer approval processes, value analysis meetings are happening less frequently and so forth. So that's the focus we put now is just how do we continue to drive the sales funnel and sales cycle because we have a high confidence now that the product is meeting performance requirements and it's addressing unmet needs that our customers have.

Great. And then a second question, which is more for understanding. So the new gastro launch that you're announcing today, should we think of that as a new product -- a new separate product category, which will be introduced at a higher price point? It sounds like it's more complex niche procedures than the existing gastroscope is targeting. Or should we essentially think of it as in the same vein as on the bronch side where you also have different scope sizes that are sold at not too different price points?

I mean I think it's probably a little bit early for us to talk about pricing. But what I would say is in terms of the value to the customer, of course, it brings the value of the single-use endoscope like our gastro. And then on top of that, it has some benefits of the large working channel. So I think that's how we're looking at this as a product.

Yes. So I think we can have a few final questions before lunch. I think Martin?

Martin from Nordea. Yes. Just one quick question following up on the gastro. I think it's quite early that you launched a new size to your product since you barely just launched the first gastro. Is that -- are you doubling down on confidence here? Or is that more a reflection of the feedback that you have received that you have a higher chance of succeeding in a different sort of category size?

Yes, I would -- I would say that it's -- overall, when we look at the gastro market, we see it as having many attractive niches, and we've been looking at what are the right ways to target each of those niches. It happened to be that the first opportunity we had was for standard gastroscope, but we also see that as a very attractive niche that a large working channel gastroscope can fill. And so we thought it was important to bring that into our pipeline. And actually, we benefited a lot from modular innovation in that aspect. So it's not that we launched. And then we say, "Oh, wow, now we have a barrier or we see a need, and now we want to create a new generation to address that." Actually, it's that -- a lot of the things that we did to develop and launch the gastroscope are some of the same things that we can benefit from for a Gastro Large. And the plan will be that those 2 coexist with gastro, which we continue to see positive feedback like we shared and continuing like steady growth of rebuying customers will continue to grow. And in this specific therapeutic gastroscope when we continue development and bring it to market, we'll also have its own niche in the market where it will continue to grow.

Rickard Anderkrans, Handelsbanken. Just one question for me, please. So on the slides, you expect single-use endoscopy market to grow about 25%, 30% per year for the next 5 years. But you guide for 15% to 20% CAGR in 5-year for the Endoscopy Solutions segment. So how should we think about that sort of below market growth? Is there an ASP dynamic from bronchoscopy or anything else we should think about in the guidance in relation to the market growth?

Yes. I can take this. So basically, what we do expect is also that we will no longer be alone. I mean we were the first and we were alone for many years in pulmonology, but we do expect and to some extent also, I mean, hope that there will be more competition. So we will not take the full market by ourselves, but we believe that, I mean, the more competition will also be able to have a larger share of voice supporting the use of single-use. So that's how to think about that. I think we'll take the last question from Niels and then I think you all deserve a lunch break.

Bassel, you mentioned a 40% conversion rate. I think it was in the area of pulmonology. Could you just repeat whether this is within your existing 3 million procedural core segment? Or is it in the total market? And secondly, what are you actually doing to protect your market share in the 3 million procedural market where you already have a strong position? There are many, many new players entering this space. The procedures are more simple. And so what are you doing to protect your strong position?

Yes. So yes, first of all, just to the first question is, it's a 40% penetration in the OR and ICU. It's now 5 million pulmonology procedures, 3 million of that is an OR and ICU, and we see that as being about 40% penetrated. And I shared earlier that 2 main things are happening. That means there's room for further penetration, but there's also competitors coming in. Now when it comes to competition, we are still the world leader in bronchoscopy. And we have, on the one hand, a strong portfolio. And on the other hand, we have a dedicated commercial infrastructure. And those benefits -- those 2 main, let's say, differentiators, combined with the full, let's say, ecosystem offering that we have at Ambu are the main ways that we go into our customers and say, let's stay with Ambu and grow with Ambu. And for the most part, the competitors that are coming in, and we're seeing most of -- we see competitors globally. I think the bigger presence is in the U.S., and then we're seeing less competitive impact outside the U.S. For the most part, they're coming in with more or less me-too products, maybe with some slight differentiators. So -- and of course, in a growing market with increasing competition, they will take some part of the market. But for us, what's very important is that if we want to continue to be the market leader, if we have a market-leading portfolio and if we have a market-leading commercial infrastructure, that should be a recipe for us to maintain market leadership. It doesn't mean that competitors aren't going to come in and take some share of the market, but we want to still maintain our position as a market leader. And then of course, as the market grows, that will represent how we can sustain growth for the coming years.

Good. Thank you. I think it's time for lunch. I think everyone deserves a lunch break now. So we'll have a couple of minutes to stretch the legs and then the lunch will be served at the tables in this room. So don't go too far from your chair. So thanks. And then we'll have the clock up here. We should be back in 35 minutes to start again. [Break]

So welcome back from the lunch break. I think we should have fresh coffee at all tables or it's coming in a second. So I hope you had a nice lunch, and we are ready now to kick off the final session. In the final session, we have the 3 remaining focus areas in our Zoom-In strategy that we're going to go through. We'll then finish with Thomas talking about our financials and financial targets, and then we have a Q&A session before we close the meeting in this room and head out for those that are in the room next door for product demonstrations afterwards. So I'm going to talk about the second Zoom-In area, which is about excelling in execution across our value chain. So a large focus in this area is to make sure that we have an efficient and scalable business model to grow from. The strategy is very much about growth, and we need to make sure that we also, as an organization, are able to scale up and follow as we grow. So while this is specifically important, I think you all remember this slide that I showed in my introduction this morning that we are in a situation where we have had our margins declining. We've had a negative cash flow in the past quarters. So this just puts even more focus on why it is we under execution have launched a transformation program with a key focus to improve our profitability. So how we focus on this, there are 3 things essentially that we see as focus areas in execution with our transformation program. And this is number one, to accelerate our journey to profitable growth. We have to do better in this area. Secondly, it's about creating more financial flexibility to invest in opportunities. We are not exactly at the stage that we would like to be here. And then lastly, it's to build a strong foundation to scale from, as I just mentioned. So this is not something that happens from 1 day to the next. So we launched mid-November a transformation program which consists of 3 phases. It's a program that we expect to run for approximately 3 years. It's also a program that includes a number of activities that I'll come back to, but there's also an element of culture and culture change here because this is also about our mindset. This has been very well received internally so far. We have spent -- when we launched the strategy, we focused a lot on making sure that it was cascaded out in the organization and that each department had made specific plans of what is it that they can do and they are going to do to contribute not only to the growth strategy because that's very important, but also to this transformation program. So it is today anchored well in the different functional areas that we have. So the first phase is where we are now and that is a mix of scoping the different initiatives, understanding how rigid we are getting more out of the different areas that we're in, but it's also about execution because there are some obvious things that we focus on. That is also relevant for our second phase, which we label in the second half of this year where there's a focus on what we call the more quick wins, and I'll come a little bit more back to that. And then we have a Phase III, which is over the next couple of years where our focus is very much on how we said that we build a sustainable foundation for the future. So some of the initiatives that we implement are also well rooted in the organization. So some of the things that we are focusing on are more short-term quick wins and others are more long term and take some time to implement. You will see that shortly. So if we look at our P&L, it's -- I mean this -- we are doing addresses all levels of the P&L. We have 6 specific initiatives where 3 of them will have a direct impact on the gross margin, and the other 3 will focus on our EBIT margin. So when it comes to our gross margin, it's -- as you can see on the benchmark that we have up here, we are below industry benchmarks. This is not where we should be. So the 3 things we have focused on here is pricing, optimizing that, both for in-market and launch products. It's about our COGS, how do we reduce our COGS on different products and it's about our portfolio streamlining. And then when it then comes to the EBIT level, where we are also not at the target we have set and what can be expected in our industry. We have 3 initiatives addressing that. One is around sales force effectiveness. How we said we optimize that, we already talked about that during the day, what should our operating model look like and then our ways of working. So there's a lot of details behind this. I'll share some of the headlines to give you a flavor of what it is we are doing to get to where we want to do in terms of the targets that we are communicating and that Thomas will elaborate on later today. So when it comes to the 3 initiatives that focus on the gross margin, one is about optimizing our pricing. So in the past years at Ambu, price increases has not been a strong focus. The focus has been very much on building an endoscopy market. So it has been very much focused on the volume and getting products out and a bit less on pricing, so that we're going to change. Then secondly, we all know there has been inflation, and that has, of course, also increased our cost for raw material and labor, so putting an increased pressure on our pricing. So what we are doing here right now, we have already strengthened the governance, and this is what we are rolling out because we need stronger governance on pricing. This is a lever that is filtering as you know, all the way through. We are also looking to the extent possible, and it's not possible everywhere because a lot of our business is contracted. It's about at least adjusting our prices for inflation. And then it's also when we launch new products that we increase our capabilities. So we are much more strategic about what is the price we take when we bring products out because it's always much more challenging to change the price significantly if you launch a product at the wrong level. Secondly, there's something around COGS reductions that is a focus as well. A big part of our COGS relates to the material, and we have strong partnerships here. And given back to what I talked about before, in innovation and how we set up our products, it has more been a focus to get with speed to market than actually the solution. So we have implemented a number of initiatives here to also make sure that we address the obvious design and material changes. We have a dedicated procurement program that is already running, and then we have some production efficiencies that we can see that we can capture. Some of it helped by our factory in Mexico. And then the last one in this category is around portfolio streamlining. So we have looked at the whole portfolio, a lot of our anesthesia and patient monitoring products, as an example, we have great variation in our contribution margins. So there's an obvious way to improve that. And then also, again, here, we can strengthen our governance where we have operated fairly decent when it comes to these areas. So this is where we are looking into adjusting our pricing and potentially discontinuing some of the products that are not generating the profit levels that we believe we need to have. And also, we are seeing some obvious areas where we can make a conversion to different products that are also higher margin. So these are the 3 things that we essentially are doing as part of our transformation to have a direct impact on increasing our gross margin. There's, of course, a lot affecting the gross margin related to product mix and so on, but that we keep a little separate from this specific initiative. Then when it comes to our -- I mean, our EBIT and our operating expenses, there are also 3 focus areas that we have. One is around sales force effectiveness. Again, I mean, we have moved, as we have talked about a couple of times today from pulmonology into 4 different segments in a relatively short time. And we have launched our new CRM system a couple of years ago. So we have a very good system in place, but we are not using it sufficiently also to understand how is it we invest across the sales force to drive the maximum efficiency. So that's a focus that we have in terms of optimizing our resource allocation in the field. We have also a focus on we call it here omnichannel approach, but how is it really we sell to our customers, what habits have changed and how do we even leverage -- even better leverage other ways than actually driving out to the hospitals to see the doctor in person. And then the CRM, there's obvious ways where we can improve the use that we have of that and also get more efficiency. Then comes the operating model, and that's basically also how we operate on a daily basis. With the high investment levels that we have had in the past couple of years, we have brought in a lot of new people. We scaled that back as you've heard a bit over the summer. But when you bring in a lot of people in a short time and you also have COVID, so most people are not seeing each other in person, that leads to inefficiencies. So that, combined with the fact that we have been very decentral in the past, gives obvious opportunities for us to improve our efficiency scaling in our support functions, which has not been a focus before, having a different balance between centralization and decentralization. There are things where we don't really need to reinvent the wheel in all markets at the same time. And then also business services globally, there is some obvious scale that we can do there, which we haven't done. Then the third and last point that we are addressing under our transformation program is our ways of working. How is it we operate as a business. And that's back to some of what I alluded to that our fast expansion in terms of number of people has led to inefficiencies in the way we work. We have a lot of great people here, a lot of them when I came in, came to my office with a lot of obvious ideas to how can we do things better. We did an engagement survey as well a couple of weeks after I joined. And there were a lot of comments, and it was very clear that there are areas where we can optimize how we work. Also not only improving our profitability, but actually also improving our engagement, another very important topic that I'll come back to. So we are in the process of simplifying and clarifying our business processes and also defining much better our roles and responsibilities and that should also bring efficiencies and thereby also help increase our profitability as a company. So all this is organized under a central program internally here, our transformation program. I'm in the steering committee, and I'm quite close to this together with my executive leadership team colleagues because we believe this is important. We believe with the ample growth opportunities we have as a company, which you have seen earlier today, it is a vital importance that we built a strong, efficient and scalable business model because this is the way that we should be better positioned to also capture all the opportunities we have in the right way. So I'll conclude this section on the transformation program and how we excel in execution by recapping that we have a transformation program that is in focus. I look forward to report our progress on that to you in the next period as we are making progress. Also, we have -- it's a program that we have launched that we believe is not happening this year. So it's a 3-year program, but we are, of course, very focused on driving efficiencies as fast as we can and also getting the organization with us. And then it's very much focused on improving our gross margin and EBIT, where we have clear KPIs internally that we track in order to deliver this. So I think that was what I wanted to cover on this Zoom-In area where we talk about our execution. Now I want to switch to the next Zoom-In area, which is a very important area for us. It's an area that we are focusing on to an increasing extent because we believe it's a good business. It's something that benefits the customers. It benefits the environment and it benefits us as a business. It's about sustainability. And before we -- to explain to you with Bassel what we are doing, how our focus is in this area, I'd like to invite our third external speaker up. Dr. Michael Baboudjian, is an Assistant Professor in Urology on the University Hospital in Marseille. He is a co-author of actually 2 game-changing studies that have been completed around focusing on the environment footprint of doing endoscopy, also looking into single-use endoscopy. So I'm very pleased to have you here today. So thanks a lot, and I'll leave directly to you.

So thank you for the introduction. I'm Michael Baboudjian, a medical doctor, and urologist in Marseille, France. And I would like to thank all the Ambu team for the invitation for this very important day for the company. So in this presentation, I would like to share with you first my experience with a single-use cystoscope that we use, one from Ambu. And in the second part, we will talk about sustainability in endoscopy. So for those are still sleeping after the lunch, you have here 2 key messages that you can take home with you. The first one is single-use endoscope address true customer needs by answering availability. You can use it when you want, where you want. Consistent endoscopy performance, since you start every procedure with a new device and no risk of cross-contamination compared to the other ones. And the second message refers to the 2 publications that we did in collaboration with Ambu, we compared the cost and environmental impact of single-use and reusable cystoscope, and we found many advantages in favor of the single-use device. And I will explain and develop a little bit more in the next slides. So how the story begins. The story begins in my hospital in 2020, and at this time, we had 8 reusable cystoscope and 2 associated endoscopy video colonoscope. And it was the end of life of the reusable material. What does that mean? We have a loss of image quality and the loss of deflection capacity of the endoscope. So we needed to replace the materials that we have. And at this time, we were contacted by Ambu to make some trials with a single-use cystoscope that is only cystoscope that is currently available in France. And we -- the trial were successful, and we are an academic center. So we did 2 evaluation of the cost and the environment of the cystoscope compared to the reusable one. And now we have implemented an exclusive use of the single-use cystoscope into my hospital. So why endoscopy and cystoscopy is important in Urology, the left side of the slide, you can see a cystoscopy and the cystoscopy, you can see a lot of tumors inside the bladder. So it's a very important tool to diagnose, treat and monitor patients with a lot of pathology from the urethra and the bladder. It's 3 million procedures per year in Europe and 4.5 million per year in U.S. How can we do a cystoscopy? Until now, it was using a reusable material. And there are a lot of limitation for us urologists by using the reusable material. The first is the risk of breakage and the unit availability of the material, I can give you one example. I used to do my cystoscopy in one afternoon, every week. And I have 2 room for doing that. 3, 4 patients each room. And sometimes I had only one reusable cystoscope. And for cleaning the cystoscope for sterilize, we need 30 minutes. So I need to wait 30 minutes between each patient. I couldn't work like that. The second limitation we have already talked about it, is the loss of image quality and deflection capacities over time because we reused the material. And there are also a lot of limitation about sterilization. The first one is risk for the patient himself because if you don't clean well the cystoscope, you can transmit to another patient, protein, DNA, bacteria with the risk of cross-contamination leading to nosocomial infection. Second risk of sterilization of reusable material is the exposition of health care workers. For example, in my institution, we use peracetic acid to clean the endoscope. By using peracetic acid, you can lead some programs to healthcare workers, such as air or respiratory symptoms. And the last limitation is the environmental impact. Since for sterilization for one procedure, you will produce 800-gram of waste and you will use 60-liter of water. So here come the single-use devices with many benefits, but also criticism. What are the benefits? The first one is the immediate availability of the material. You can use it when you want and where you want. And here, you can see the suite case with the cystoscope and the TV, and we can go do a cystoscopy everywhere for example, a patient in intensive care unit and treated, she cannot move. We go to the patients. We have a constant image quality since we start every procedure with a new device and we avoid the sterilization and all limitation related to the sterilization. But there are a lot of criticism. Since you -- the single-use cystoscope is discarded immediately after use, it has been supposed that the environmental footprint of the single-use cystoscope is higher than the reusable one. And this limitation come while healthcare represents 5% of global greenhouse gas emission. And if healthcare system was at state, you can see, they will be the fifth larger emitter on the planet. But are we sure that our environmental footprint of single-use cystoscope is higher than the reusable one. Let's give a look of what we do when we use a reusable cystoscope. For sterilization, do you remember, we consumed 800-gram of waste. We produce 800-gram of waste and 60 liters of water. And in my center, for example, we performed 1,500 procedures per year. So it's equivalent to 95,000 liter of water per year. If you report to all cystoscopy performed in Europe and U.S., you can imagine the results. And if you look at -- what we produce using a single-use cystoscope, we have 200-gram of waste, which is the weight of the cystoscope, and we do not use water since there is no sterilization. So after this brief and very simple comparison, but that on the amount of waste generated, we did life cycle assessment. What is a life cycle assessment is strategy and validated method to evaluate the carbon footprint of a product, and we take into account the world life cycle of this project from raw material traction, the production, the packaging, the transportation, news and end of life. And we compared in that study, the life cycle of the single-use cystoscope by Ambu and the life cycle of a reusable endoscope. And as you can see -- you can see the result, we have evaluated 5 different endpoints. The first one, and everyone knows here is the climate change. So the production of CO2, methane that will lead to an increase in temperature in atmosphere and [ ozone ]. And we have evaluated other endpoints such as mineral resource depletion, relating to the scarcity, ecotoxicity for the fauna and flora population, acidification, eutrophication. In blue, you have the results using the reusable cystoscope and in green using the single-use cystoscope. And we found that the carbon footprint of the single-use cystoscope was lower for each endpoint that we have assessed compared to reusable one, quite surprising. But this is why that kind of strategy are needed to have a greater healthcare. So we published 2 very important studies in 2 journals with high availability among urologists, and we can think about the next step to be even more greener like we're taking some parts of the single-use devices and think about the set of production, transportation, packaging. Thank you for attention.

All right. Thank you, Michael. And it was great. Dr. Baboudjian, it was great to hear everything you shared in terms of not just the benefits of aScope Cysto and the overall health system, but also some of the groundbreaking work that you and your colleagues are doing in terms of looking more at the sustainability impact. I mean, in general, just so everyone knows, sustainability in endoscopy is a very like high-profile topic not just because of reusable versus single-use, but because the environmental footprint of reusable endoscopy is so high compared to other departments in the health system. So there's a lot of focus on how we can make endoscopy more green. There's even societies called green endoscopy, which are just focused on that. So it's a very important topic where I think you're bringing a lot of important facts and data to the table. And for Ambu, I mean, sustainability is also the third pillar of our strategy for a reason. I think as Britt shared, it's -- of course, it's the right thing to do, and it's important thing for us as a company, but it's also very important for our customers. And you can imagine that when you talk about going from reusable to single-use products, the immediate reaction that can have is about what's going to be the impact on the environment. And it's very important for us as a company that we can clearly articulate not just what is a true waste associated with reprocessing reusable endoscopes versus single-use and the fact that single-use can unexpectedly be better for the environment. That's one key thing to do. But then the other thing is we've talked a lot about there's going to be more competition in single-use endoscopy. And then the question is how can we as a company also differentiate ourselves? And for us, we believe it's very important as a company that sustainability becomes a true source of competitive advantage for Ambu in endoscopy. So I'm going to share a little bit more about what we're doing on that front. And for me, there's -- I think there's 2 key things to take away from this session. Number one is that we have made significant progress when it comes to sustainability as a company over the past couple of years. And because of that, we are recognized as a leader in the industry, also by external rating agencies, and I'll share more on that. Then the second thing is that despite that, we are pleased, but we're not satisfied. And so we have a very strong commitment to continue to do more. That's why taking leaps in sustainability is such a key part of our strategy. So let's dive into what we've done so far. And basically, I mean, I shared, we've taken major steps over the past years. And there's been a couple of key areas that we've been focused on. And I think a lot of companies were trying to elevate their, let's say, sustainability baseline or hygiene has been very important, which is -- number one, we have established a baseline, and that means we basically understand what is the overall scope of our emissions. We've done a materiality assessment of what different things could be impacting our ESG performance. We've set some specific targets. So for example, in the case of greenhouse gases, we committed to reduce our CO2 emissions by 50% compared to our 2019 baseline by 2025. So those are key things we've done as part of our baseline. And then we've also put in place multiple partnerships and strategic initiatives. I won't go through all of them that we have. Here's just a few like kind of key examples. I mean one is that we've signed up to science-based targets. And that's an important step that it basically means that's a commitment to reduce carbon emissions in line with what's needed to keep the temperature rise to below 1.5 degrees Celsius. The second one is Operation Clean Sweep, which is an industry kind of initiative. And the idea for this is to basically better manage plastic waste coming from our production sites. It includes certain specific commitments we make to make sure that we're being very efficient with the plastic that we use. And then the third one is Plastic Bank. Plastic Bank is basically a plastic offset program. So it means that for every kilogram of plastic associated with our single-use endoscopes that are used by customers, we will collect. And we do collect 1 kilogram of ocean-bound plastic so that it can be recycled for other purposes. That's, of course, our long-term goal is to be truly circular, but that's an important first step that while we're still navigating all the regulatory environment and local infrastructure needed to truly do recycling at scale at hospital systems that we have this sort of plastic offset program in place. And I think for us, what's like very encouraging is that external agencies have recognized that on the back of all these initiatives, we are a leader when it comes to sustainability. So we got a AA rating from MSCI. Just to put it in perspective, every competitor that we talked about today, the reusable ones, the single-use ones that have come up, every one of them is in the average rating, whereas Ambu is rated AA and rated as a leader. So already today, for ourselves, that's great and also when we go to customers and increasingly customers, especially in Northern Europe, in the U.K. and the Nordics, increasingly in Germany. When they put out tenders to get products listed for their health system, they, of course, have a scoring system that says 30% for price, 40% for product quality, et cetera. And now they're starting to have 5% for sustainability -- 10% for sustainability, and we see it growing more and more because of the increasing focus. And the more that happens, the more we want to be positioned as a leader in sustainability, so that we can be the ones partnering with those accounts and taking -- and maintaining our market leadership. So this is important because it says what we're doing is already industry leading, but it's also important because commercially, it's impacting our customers and our business. So with that, we are -- I would say we're pleased, but we're not satisfied. So for us, we are committed to take further steps. That's why it's a key part of the strategy. And there's 2 main areas we're going to be focusing on for the future. Number one is our commitment to circular products and packaging, and I'm going to share more on that in a second. And the second is to approach net zero emissions. And I think another thing we're excited to share today is that we will plan to have a long-term plan in place for how we will reach net zero by the end of -- the plan in place by the end of this fiscal year so that we clearly communicate what will be the long-term road map to reach net zero emissions as a company. So let's take them one at a time, and I'll start with circular products and packaging. And when it comes to circular products and packaging, we have 3 key initiatives and some very specific and ambitious targets. The first one is circular product, and that includes bioplastics in all of our endoscopes. And bioplastics, I've actually brought an example here. So one of these is a bioplastic-based endoscope handle and the other one is a fossil fuel plastic-based endoscope handle. You can't tell the difference between them. but one of them has a 70% lower CO2 footprint than the other one because one is derived from fossil fuels, and it's extractive and the other one is derived from bio-based sources, things like food waste. So we're -- part of our plan is to introduce bioplastics into our entire fleet of endoscopes in the future. And we're going to be the first company that does that, and that's just a statement of our commitment to be sustainable. The second one is around circular packaging. And when it comes to circular packaging, we've already have our secondary packaging is made out of renewable hardboards. And now we're going to incorporate these same bioplastics into our primary packaging for high-volume products. And then finally in terms of recycling. For recycling, we've already made some important steps forward in many markets. With many customers, we formed partnerships to see how can we recycle our products. And it's not straightforward because there's regulations in each country. There's different rules around handling of medical waste. There's different rules around recycling of medical waste. But the important thing is for us to get started. And that's why we decided many of the major countries we operate in to start to push the boundaries of if we want to achieve this, what types of partners we have locally, what types of things can we do? And the idea will be that by 2025, we have a recycling offering in all of our major markets, something that we can actually scale. So that's commitment #1 to circular products and packaging. And then the second one is around operating responsibly and approaching net zero emissions. And again, this is one where we've also made great strides. So one area that we can talk about is around optimizing production. So just to give aScope Broncho as an example, we've more than half the carbon emissions per endoscope from aScope 1 to aScope 4. And we're going to go even lower with aScope 5. So that's already significant progress we've made in terms of approaching net zero. And then we're also transitioning more of our manufacturing footprint towards renewable energy. And then for the future, again, I shared briefly, our goal is to build a long-term road map to reach net zero. And the idea is that we will have that road map in place by end of this fiscal year. It's going to include 2 main things. Number one is the extended use of renewable materials and recycling products and packaging. And the second one is to approach 100% renewable energy. And just to give you a sense, in our manufacturing sites, we were at less than 10% a couple of years ago. Last year, we were above 20%, and we're going to continue to move towards 100% renewable. So that in a kind of brief summary is where we are when it comes to taking leaps towards a sustainable future. I think, again, the main thing to take away is that we have made significant steps on the back of that. We are recognized as an industry leader. The second thing is that we're committed to take further steps for the future. And then finally, that we have very high ambitions and targets, and we're going to exit this fiscal year with a very strong plan in place to deliver on them. So with that, I'm going to hand it over to Britt to share more on the last area of our Zoom-In strategy, which is to bring people together in one shared culture.

Thank you, Bassel, for a great presentation. So as I hope you heard from Bassel, we are very focused on sustainability as a key area, not only for the sake of the environment, but also for the sake of our business. So all what you have heard today is only possible to do because of the people that we have and because of the focus we have of bringing all our colleagues together. So this is what I'm going to talk to you a little bit about now. And this is also the last topic in our strategy. So the last Zoom-In area. So this is an area that I personally find very important. I mean for us to be able to create value for our customers, for us to be able to create strong business results, we are only able to do that if we have engaged, motivated, capable people working at Ambu, and we are very fortunate that we have a lot of those. Our people are spread across our sensors and our organizations globally. And we have a lot of people that have been with us for many years, and we have also people that have joined us more recently. So together, I feel very comfortable and very proud about the team that we have. What I'll talk to you about now is first give you a little fact around our organization. I'll talk about our leadership, how that is set up, and then I'll talk about our focus areas in the strategy. But let's start with some facts. So we are around 4,500 colleagues here at Ambu. So we are a global company with a strong purpose, which is in our DNA. Our employees are spread across more than 22 countries, 4 production facilities, 3 innovation centers. And then if we look at the gender split, we are very focused on making sure that we have a diverse and inclusive workforce. So when we look at the overall workforce, we are slightly more females than men. When we look at our leadership levels, it's a little bit the other way around. We have 42% of our leadership positions being held by women. I think this is a decent number, but we continue to have a strong focus on this because we want to continue to do better not only across all leadership levels, but also at the senior level in the company. So while we are proud to be a global diverse leader, let's take a look at the leadership team. So we have a very strong and focused executive leadership team. So based on the strategy that we launched mid-November, last month, we made some changes to the leadership team internally simply to reflect that we have the best possible team to deliver on the strategy that we have set out. So this is -- the changes we have made, we have both made the team slightly smaller than what we had before. And then we have made some changes that we are going in the next couple of months, we expect to be able to announce a new Head of Innovation or R&D, which I'm currently leading interim together with a very strong leadership team in that function. We are also expecting a new Chief Operating Officer, will join us and that we can announce that in the next couple of months. And then Bassel having been responsible for the global marketing is transitioning in to be responsible as President for EMEA and APAC. So we are also looking to bring a new colleague on board here. So I think when we have these positions complete, I think we have a very strong team. And also, again, if we look at the levels that we have in the leadership team that is below. We have around 80 people in what we call the global leadership team with very diverse backgrounds, very strong experience. Many have been with Ambu for many years and some have been with Ambu less. So I feel quite comfortable about the structure that we have and the capabilities we have. But again, I think it's fully normal when we embark on a new strategy and look into the future, we have to assess what are the capabilities. It's the leadership team that sets the example and that also sets the direction for the rest of the organization. Other than a leadership team, we also have a very strong and very diverse Board of Directors. We have our Chairman and Simon present here today. I think also the Board has many different skills and capabilities, both from different functional areas, but also from different geographies. Half of our market is in the U.S., and it's great that we welcomed as the second American citizen on our Board, Shacey Petrovic, who is the former CEO of a successful high-growth medtech company Insulet in the U.S. who joined our -- who was elected to join our Board in December, together with Simon Hesse, who is other than his capabilities also representing our A shareholders. So I think management and the Board, we have a very close collaboration. I believe we very much discuss openly both the opportunities we have, the challenges we have. And I think we benefit from the skills that we have in the board. And I think there do a pretty good job in also challenging us as a management, which we appreciate. So if we look at our focus in the organization, we are very fortunate to have a strong heritage to build on with the long history we have as a company. And that really is something that means something for people working at Ambu. The purpose has, as I mentioned, been in our DNA for many years, and it remains also very strong in the DNA. We have a lot of passion among our people, that passion is driven very much by the strong difference we make for patients, for people out there. Our products touch over 100 million patients every year, something that people here in Ambu are very proud about, and that means something when we go to work every day. And I think we have a number of the core elements to build a strong culture with focus on diversity and inclusion being very important, also with focus on performing. We are very focused on having both a high-performing culture, but also 1 that has a very strong customer centricity, we are all here because we do a difference for customers. So that is something that is a key focus across all areas of the company. And then because talent is what makes us deliver good business results. We are very focused on both retaining and maintaining strong results. So all this and in the strategy that we have 3 headlines that I'll go through in terms of how we are successful to create that 1 shared culture. The first 1 is what I was alluding to now about talent. In the past, we had less focus on talent development. This is something, as we have a lot of very talented people. We focus very much on that, making sure we give opportunities to people, but also making sure that we develop people internally, but also are able to attract talent from outside. So we have a good mix in how we drive the business forward. That goes for all levels of the organization, but with a specific focus also on making sure that we have the right leadership capabilities, which is where it all starts in terms of executing on our strategy. Then ways of working. I talked about that under our transformation program. We simply believe and again, as I mentioned, we have heard from our people that there are opportunities to strengthen how we work, and that's something that we have focused initiatives on as well, which are shared among all colleagues because we believe that making a commitment to people, we hold ourselves responsible, which I think is important. And then we are trying again to make a scalable model to simplify our processes and really make sure we are set up in a way where we can drive fast progress. And that also, again, focuses on our culture, how we build a diverse and inclusive culture with a high level of engagement. As I mentioned, when I just joined other than speaking to people, I did an engagement survey, and we saw definitely a number of areas for improvement. We did that before the summer. We're going to repeat it because we want to, again, see the progress that we are making because if we don't have a highly engaged organization with strong talent and capabilities, we are not able to deliver the strong business results that we would like to do. So I think that concludes my focus on people, focusing on executing and delivering on our strategy is all about our people. We believe that despite being spread around the globe that the 4,500 people, we have can and are coming together in one shared culture and then with a focus on talent, ways of working and our culture is what we believe is our way forward. So with that focus on our people, I think it's a nice segue to hand to something that also involves people, and that's our financials, it's people that will deliver and make you happy, Thomas. So let's move on to the finance section.

Yes. Thank you, Britt. And I'm looking forward also to this financial presentation. Today, we have gone through, Bassel has presented the market size, the market potential that we operate in. We've shown our strategy. We've talked about how we execute on that strategy. we have shown our business model, our innovation model and also the innovation pipeline that we have. Our approach on sustainability and also our one shared culture. So key important part in terms of the strategy driving forward. We've also seen some great presentations by our external speakers that really truly speak to how single-use is disrupting and certainly also is already changing clinical practice. So I will try to bring that all together in the financial update. And I will also answer, of course, questions not only in the Q&A, but also hopefully during the presentation, of how that translates into the Ambu financials, how Ambu will deliver on strong profitable growth and certainly also what our long-term financial targets are. We started -- or Britt started the day also with this slide, we're basically our Zoom In strategy aims to unlock the high potential that we have in terms of driving profitable growth through a very disciplined capital allocation. Firstly, we are extremely well positioned in a large and very attractive market with substantial growth opportunity. Bassel also spoke to that earlier today, a market size of roughly DKK 15 billion to DKK 20 billion. Secondly, we have a very rich pipeline, as we also spoke about. Currently, we have 9 endoscopes in our pipeline, which was also shown in the development, which was also shown by Bassel, a unique innovation engine where we quickly can adapt and adjust new technology into our portfolio and where we can take advantage of that in order to truly deliver new solutions that cover unmet medical needs. And thirdly, I do think that we have a very strong business model as we've also presented today. We are pioneering single-use endoscopy. We have operations expertise that really can continue to drive -- drive high-quality products and produce it at low cost. And we have a sales and marketing organization that is very close to our customers, helping us really to drive the transition to single-use also. And in order to get there and behind that, we need disciplined capital allocation to ensure that we invest in the right segments, in the right businesses with the highest value. So how do we improve then our financial performance to do exactly just that? We certainly come out of a year '21, '22 with a financial performance that was not at a satisfactory level. Where we saw organic growth of 4%, EBIT margin of 3% and a significant negative cash flow of DKK 458 million. Therefore, we took some immediate actions with our restructuring program or with asset list here, our cost reduction program that was to fix some of the very short-term financial improvements but also importantly, to create a platform from where we could further grow and improve. Thirdly, we then also -- or secondly, we then also looked at our finance operating model, which is now fully aligned with our Zoom-In strategy, and a finance model that really, again, will allow us to allocate the right sources to the highest value opportunities that we have. I won't go too much into detail or actually won't go into detail with our cost reduction program. We have earlier spoken about that. We have also earlier detailed in terms of what exactly that we did with our cost reduction program. However, I do think that it's important to note that this was and has been an important first step in creating this platform from where we could really thrive and create further performance improvements. And this slide was basically to show that we have actually succeeded in what we set out to do. We've seen the benefits fairly quickly of that restructuring plan, as we've also shown in our Q1 results that we fairly recently also communicated. And on top of that, as Britt also just in one of the previous sessions showed, we have a transformation program that also addresses pricing, COGS improvement, streamline -- further streamlining of our low profitable segments, sales force effectiveness, operating model and ways of working that will continue to help drive our profitability upwards. We've also taken time to have a closer look at the financial operating model that we have to make sure that we change that model and Zoom In on the key areas in terms of how we improve further performance and how we actually also can help focus on executing on our strategy. And 4 elements in our financial operating model, one, we have installed a very strict governance and disciplined cash flow management. We are working relentlessly to improve amongst others, our net working capital, especially inventory levels are in focus, but we are certainly also improving cash collection and payment terms across the entire company. Cash flow will be a key element and is a key element in terms of how we also fund our growth journey. Alongside cash, we're also driving cost efficiencies and tight cost management throughout the company through a structured prioritization and where we are allocating and deploying resources to the segments, markets and businesses, as mentioned, with the highest value opportunities. This means also that we are continuously working to streamline, as mentioned before, also our portfolio really to put a high focus on the highest profitable areas of our business. Our financial governance model is also one of the cornerstones in our operating model and where we are increasing our standardization and thereby also secondly, the automation throughout our financing processes, and we will take a much broader look of how we utilize global business services set up. That should help for better scalability throughout the Ambu world. It will certainly help on efficiencies, and it will also help on our cost position. And last but not least, in the model, we will also aim to strengthen our balance sheet, obviously, in order to provide sufficient financial strength and flexibility to fund our growth. This, we will do by having a look at our capital structure, but also by reducing debt and thereby also reducing gearing financial gearing. An important step also in really providing flexibility of investing into the strategy and investing into our growth path. This brings us then to the financial targets that we have. First and foremost, cash flow. Once again, cash flow is very important for us. And we want and we will become a positive cash flow generating company. That is really truly key for our strategy. And the key areas to improve and drive positive cash flow is, on one hand side, our EBITDA. Long-term target -- we have a long-term target of double-digit revenue growth that will certainly help on the EBITDA and drive EBITDA, but we also have the impact from the transformation program mentioned just before and also the cost containment measures that we have in place. So that all should help driving cash flow upwards from our operating activities. CapEx, we aim to normalize at a level of roughly 9% of our revenue. This corresponds fairly well to also what we've seen within the industry. And we can certainly benefit also if we look at our innovation from our modularization concept, efficiencies in our cost model and structure and we can thereby also improve cash flow, but still make sure that we deliver high quality and high innovative products that I am convinced of. Net working capital, as mentioned before, we target roughly approximately 20% net working capital towards revenue. And a key driver of that will also be that we lower our inventories. We've built over the past time way too high inventories. So we've now put in place a very clear plan in terms of how we will reduce inventories. We've started that and we are seeing the benefits of that also. And we will, at the same time, of course, not only optimize, but also guarantee that we have undisruptive supply of our products to the market. As mentioned also just before, not only inventories and focus, but certainly also our cash collection and our payment terms, we are working diligently with in order to also improve our net working capital in that respect. All of this is, of course, important, all 3 areas, in order to become a positive generating -- positive cash flow generating company. Here to the left-hand side of the slide is the target that we've set ourselves for this year, which is an improvement of DKK 350 million to DKK 450 million this year. And as of next year, we do expect to become a positive cash flow generating company. In creating a strong balance sheet, our target is also on the financial leverage side to improve in that level and to come below 2.5x EBITDA on our financial gearing. We do have a clear long-term plan in place in terms of how we will improve on exactly just that. We have focused on EBITDA improvement. I've spoken about the free cash flow management that we are improving and also our disciplined capital allocation model, all that combined will help us and long-term drivers in the direction of coming below 2.5x EBITDA on the gearing level. And we are following that plan, and we are committed to that plan that we will do. However, also in the current times and the current environment with geopolitical uncertainties, high economic uncertainties, we aim actually to accelerate that deleveraging of our financial leverage so that we have ample buffer within that target of 2.5x financial gearing or EBITDA. Therefore, we actually also find it very prudent in this current time to consider a capital raise of approximately 5% of our company's B shares outstanding. This will certainly, as mentioned, strengthen our balance sheet, but also give us ample room and flexibility, operational and financial flexibility and ensure that we can focus on our strategy in delivering high profitable growth. And with that, also, of course, reaching our financial targets. And our financial targets, first and foremost, Britt has mentioned this earlier in today's presentation. We are today confirming and maintaining our financial guidance for '22, '23, meaning organic revenue growth between 5% and 8% for the company and an EBIT margin before special items between 3% to 5%. And as mentioned also, we have -- we are on track on our guidance for this year as we've also stated in the Q1 results and update. Today, we are then also specifying our long-term targets. And on revenue growth, long-term target is a 5-year compounded annual growth rate for revenue above 10%. Our biggest growth driver, as we've also seen and heard today, is within the endoscopy solution part of our business. And here, we do expect a target of 15% to 20% CAGR over the same 5-year period. We have a lot of great pipeline products also in the endoscopy solutions. But also, therefore, many different options and many different possibilities of how we can secure that 15% to 20% CAGR. I will, in the next slide, just have some of the examples in terms of how we will do exactly just that or get there. Anesthesia and patient monitoring is a very stable business of ours, a very steady growing business of ours and we do set a target over the 5-year period, a CAGR of 2% to 4% growth in our anesthesia and patient monitoring business combined. We've also mentioned in this part of the business also that we're also addressing lower-margin products, lower margin part of that business. So that's also where we are zooming in on streamlining some of that portfolio, but again, over the 5-year period, we have a target of 2% to 4% growth. The streamlining will, however, help in improving profitability also in that area. And talking about profitability, our long-term target on EBIT is, as stated here, approximately 20% EBIT margin target in 5 years. We do expect within the next 2 years to actually get into double-digit EBIT figures, or as I said here above 10%. This comes from the financial operating model. As just mentioned earlier, it comes from our go-to-market focus. It comes from us making sure that we invest into the high valuable segments of ours, but it also is important to state that there will be potential trade-offs within our target of 20% EBIT margin as trade-offs based on the growth investments as we see them come through. A little bit more flavor to the double-digit growth within Endoscopy Solutions and some of the main drivers we also see there. We've gone through the business of our Endoscopy solution business. These are some of the drivers within that part of our business. Important will be that we protect our bronchoscopy business in OR and ICU that we enter and gain traction in the Broncho suite with our aScope 5 launch that we further expand in ENT and also launch ENT hybrid solution that we further penetrate the market within urology, including also new launches of our urethroscope and our cystoscope HD in that segment that we continue to grow or that we grow gastro in targeted segments. And when launching our Duo 2.0 that we focus on selected ERCP procedures. Again, these are some of the drivers within the scope of us targeting above 10% compounded annual growth rate. It will be important to stress that balancing growth and profitability and investing in the segment with the highest growth is really fundamental of us achieving the long-term targets. So we will consistently and continuously review and make sure that we adapt and change our investment policy. Reaching the gross -- sorry, the EBIT margin of approximately 20% will be driven by improvement in gross margin and scale in our OpEx. And scale in our OpEx to start with that is expected to deliver the most significant addition or improvement into our EBIT margin. And this is again due to benefits of our go-to-market model, our transformation program, the financial operating model that I've talked about, the commercial excellence, efficiency improvements and scalability throughout our organization. Gross margin improvement, we do expect through portfolio streamlining, again, price adjustment, price monitoring and a clear price strategy, cost of goods improvement, not only on the low-margin products, but also throughout some of -- or the entirety of our business. And last but not least, also scale from our Mexican production plant as we ramp that up. Before coming to the final slide, again, I just -- in a -- with a bit of an illustrative slide. Just again, want to stress the importance of how we will balance growth and profitability with a flexible approach and, again, investing in the high-value opportunities as they occur. We are developing the single-use market. We do have a clear plan in terms of how we will do that. But we also know that there are certainly some uncertainties in terms of how fast these markets will develop. So some may develop faster than others, and therefore, it's important that we quickly can adapt and change our investments to these new learnings as we grow. So that will really be important that we make sure that we invest into the value propositions, the value opportunities, and therefore, balance, again, the growth with profitability. We have a number of options that are before us, and that will be a key element as we also go through. That brings me to my key takeaways before we then head into a Q&A session. And key -- 3 key takeaways is: one, of course, our long-term targets with revenue growth, as mentioned, for the next 5 years with a CAGR of above 10%, and an EBIT margin ratio of approximately 20% in 5 years. We will increase our operational flexibility by zooming in and reducing our financial leverage to be below 2.5x EBITDA. And we will ensure value creation by balancing growth and profitability. With that, thank you, and we will then now move into a Q&A session. Thank you.

Okay. We have come to the final part of the day, our Q&A session covering, I mean, the most recent topics, but also the rest of the day. So I think we should just get started. I think, Christian, you were first this time with your hand up.

Great. It's Christian again from Danske Bank. A couple of questions. First, to you, Thomas, and probably also to you, Britt, on the motivation for this consideration around doing an issuance of B shares. So when I look at your cash flow guidance for this year and next year and also the '25 guide for the EBIT margin that implies that you will be well below your gearing target at the latest by 25% and probably well before that. So with that in mind, why do the equity raise now? Are there some potential investment opportunities that you are afraid that you might be locked out of if you don't pursue an equity raise now?

Yes, I can maybe start, and you can add Thomas. I think it's, of course, something that we have discussed quite a lot also with our Board. And you can say, as we have previously communicated, we made a plan to and have a plan that we continue to follow on getting to the target leverage without having to raise equity. I think as we are looking at the world around us to see how that is evolving combined with the fact that we are well aware, as communicated, that we will, for the next couple of quarters have a leverage that is slightly above our target. So that has really been the consideration for us to say. But given that we are a growth company, we have lots of growth opportunities, then it may be prudent given the geopolitical and economic uncertainty, we don't know these days what will happen tomorrow that we take action and then improve our operational flexibility and get the leverage down faster than we have in our current plan. So that has been some of the considerations that we have had behind. I don't know if you want to add?

I think you've covered it quite well, but it has, as Britt said, it's been -- we have a clear plan ahead of us, and we will not deviate from that plan. But with the uncertainty, with the macro economical environment that we are in, we do think that it's prudent that we accelerate that deleverage.

Great. And then maybe a second question. So, Thomas, you outlined that for the EBIT margin bridge, you're basically seeing slightly greater potential over the medium term from scale on OpEx, but also significant potential on the gross margin. When we look at for the near term, so the next couple of years, where is -- is it possible to say where there are more low-hanging fruits in terms of those 2 buckets?

Very, very good question. So we do expect to see improvements in both buckets, is my honest answer. And why do I say that? Again, we've started and really created a platform with the restructuring that we did. We will see further benefits also coming out of that with a different approach that we have taken. Secondly, Britt spoke about the transformation program that goes really across the entire P&L. And we do expect over -- it's a 3-year program that we're targeting, but we do expect that we will see benefits in all of those areas over the coming time. So it will be coming from both those 2 buckets.

Yes. And we don't provide the split, but it's clear that there are some things that are faster implementable on the transformation program. I mean pricing, we are limited on contracts in -- with some customers. So it's not that we can easily increase the prices, but where we see opportunities and also because it hasn't been a past focus area, that's, of course, one that we can do. And then there are some areas related to the COGS that we are also focused on where there you find 2 buckets, some that will take a longer time because it will require some changes and to how we produce and some that are more faster to implement, and we are in the process of implementing those.

So we heard a lot about the interesting opportunities within the Endoscope Solutions, whereas the patient and monitoring devices, anesthesia seems to be a bit less attractive going forward. Working up to today, what are your thoughts about the potential sell-off of the anesthesia and patient monitoring devices? This would, I assume, help you bring down the leverage, and also make you able to focus 100% on the more exciting part of the business.

Yes. So I think very good question. And in the strategy process, we discussed a lot about our anesthesia and patient monitoring business. It's close to half of our business today. And we came to the conclusion that it has been an area that has not been a lot in focus in recent years. We definitely see opportunities to also, I mean, improve profitability. So that can generate cash. And then we frankly also had some discussions around that. I mean if we are to look at divesting that now, we still think it brings value for us as a business. This would also require a lot of work. There are in some of the areas synergies with what we do. So we put that completely to the side and say, let's not do it. Let's not even start to spend time on focusing on sub areas of that right now because that will take away focus from growing, I mean, in the exciting areas where we see we can grow. And we have a very loyal and stable customer base in these areas. So we think it makes you -- makes sense for us to optimize in that and not focus on sell-off in the near future. So we don't have any plans on that.

Second question is regarding the CAGR of 10% for the next 5 years. We do have a lot of exciting product launches coming in the near term. If you look past the next 5 years, what should we think about the CAGR then going forward? Would there be an additional pipeline to sort of fuel the new growth from new products? Or how do you think about that currently?

Yes. I mean I think we should speak in a couple of years. But I mean, I think we are very focused on growth. And what was very clear is also that, I mean, the way that single-use endoscopy is going to grow, and with the huge market potential that Bassel showed, I mean, there's enough potential to grow for many years. And also with our portfolio right now, we focus on -- I mean, with the also near-term pipeline, the products that we have now and then the next step, as I shared with -- under my innovation presentation, how can we even meet the -- I mean, innovates and we meet the targets of -- or the needs of the target customers, expanding that target and then it will be beyond that, that we look at also what Niels was asking about. Is there something we can do where we go more in depth. So I think we have a lot of opportunities, I mean, to grow also post the period that we guide on now. But it is very difficult right now to say how will the slope be. I think it also depends on how many other players will be there. I think if we have more players in the field promoting this, I mean, I also think it may go faster. And I believe we will benefit from that as a company. I think we have Niels, was first and then...

A question on your EBIT margin expectation for more than 10%. So is that specifically for fiscal '24? Or is it fiscal '25?

So as mentioned, within the next 2 years, so we've set a guidance for this year. So in the next 2 years is where we aim to get about.

Yes, we are not most -- Niels, we're not more specific when it comes to the fiscal years. And I think, I mean, the reason for that is, of course, there's a number of things playing in inflation being a big unknown. So that's why we say within 2 years and not more specific on our fiscal year.

Okay. And then on the 10% organic growth CAGR over the next 5 years, could you talk about the phasing of those 10% since you have quite many products being introduced and some of them will have, I guess, a larger effect towards the end of the strategy period. Should we expect an acceleration of the growth, so a little below 10% in the beginning and then accelerating above 10% in the past -- in the last 2 or 3 years of the strategy period?

Yes. I think, to be fair, we don't want to be more specific on our guidance right now. But I think you are right in that, of course, we have -- I mean, we have more products coming in, and they will, of course, help. And then if you combine that with how I shared the launch process that we don't immediately after launch see a very fast ramp up because there's this evaluation process, I think that's, of course, the drivers. But I think Thomas shared also, right now, I mean, there are some uncertainties as to the different segments how fast they will grow. And I think, I mean, the best expert will not be able to get it specifics. So I think for us, this is where it's extremely important that we are very close to the execution and very flexible in that we can, I mean, adjust our resources to where we see the momentum. And that's really what we will do.

I think Yiwei also had a question also here in front.

Two questions. Firstly, one question back to the duodenoscope. I remember previously, you actually target the large centers, high-volume centers. Because, for example, in the U.S., the most approaches are centered in the 500th largest GI clinics. But now as I understand, you start targeting the low-volume centers. What has changed your view here? Is it fair to assume that Boston Scientific, they have -- I mean, have created a barrier of entry for you? And now they are also, I realized they just recently launched the third-generation XLD. And how do you see that product?

Sure. So maybe I can take that one. And to start with, just to clarify, in terms of the segments we're going after, we see 2 main segments to go after. One is the highest risk patients in the high-volume centers and the other is all patients in the low-volume centers. And actually, if you look at some of the publications coming out, from like in the GI community, that's exactly kind of the treatment algorithm that a lot of doctors think and leading KOLs think is going to be the adoption pattern for single-use endoscopes. The high-risk patients often go towards the high-volume centers. Those are the ones that are infected, immunocompromised like higher-risk patients and those should be treated with single-use endoscopes and we're going to compete in that area. And then in the low-volume centers because of the reprocessing standards could not be -- may not be as rigorous, our recommendation is that those should also transition to single-use, and so we will target those, too. Up till now, I think both -- then in terms of the competitive landscape, we still see it as a very blue ocean. So I think as we shared, we've had limited adoption of our Duo 1.5. And we're also seeing, in general, limited adoption of single-use Duo. So it's not that -- there's nothing in terms of competitive barriers to entry for single-use duodenoscope that is making -- having any impact on our commercialization strategy. We'll go after the large centers where we have also our own strong footprint, and we're building a footprint with gastro and we'll expand with Duo, and then we'll also go after the smaller centers. And then in terms of the -- you mentioned then the next iteration of the EXALT D, which we've started to see some communication around. I think it's still early in the launch. I think we've been clear on what customer feedback we've heard for the current model duodenoscope and then the feedback we've heard from ours. And I think we generally hear that we're kind of neck and neck. And I think with the improvements we plan for Duo 2.0, we also have a high level of confidence that we'll be in a strong position to compete in that market. And again, when we go into the ERCP market, it's not that we want to take 100% -- well, we do, of course, but not that we plan to take 100% or Boston, well, it's that we expect it to be a competitive market, and we both can take our fair share.

And then my next question, maybe to Thomas. You mentioned 20% target for the net working capital. Could you maybe give a time line for you to reduce to that level?

So yes, although that we didn't deliberately specify a target. But it's of no secret that in -- if you look to Q1, we were at 25% of our net working capital. So we have some work cut out for us in order to get to the 20%. Year-end last year, we were at 23%. But we've really put in a very detailed plan in terms of how do we really take back the ownership, so to speak, of our inventories. And what I mean with that is really a dedicated plan by when do we need to be where on our inventory. And that will be a big part in terms of how we improve our net working capital. By Q1, we had DKK 1.2 billion of inventory. So as I said, way too high and certainly needs to be normalized. That takes a little bit longer time than just to do it in over a 9-month period and something that we will continue to focus on over the coming quarters and also into next financial year, but the target is clear. We need to get minimally down to that level.

Can we assume that 20% will be also the long-term target?

So that would be the target that we're aiming for to stay within that range, yes. So Rickard...

So you outlined a few scenarios on the Endoscopy Solutions, 5-year sort of trajectory with the different product categories. You previously mentioned that the new launches comes initially with the lower gross margin profile, and you also have different gross margin profiles across the portfolio. So which of these scenarios would you say is the most similar to your current guidance, the current gross margin bridge you provided? Or if you can talk about the sensitivities, how we should think about it because would be interesting to understand?

Yes. So if I just understood your -- just understand your question correctly, Rickard, to your question is out of the pipeline products that we have where, from a sensitivity, what helps from a margin perspective or whatnot? Is that the question?

Yes. So I think it's 2 questions in one, really. So which one of the different scenarios reflects the guidance you provided for the gross margin bridge to 2025 and then sort of -- or it was 5 years out, sorry. And then sort of if you could talk about the sensitivities in which scenario would be a big sort of upside or potential downside to you?

Okay. Good. I understood. So we won't be providing all the different scenarios that we've built. But for sure, we have a number of different scenarios built in, in our long-term planning also. With the caveat, as Britt has also mentioned, that we don't know exactly how fast each segment will uptake. Or said differently, we at least need to have -- be able to have some flexibility within that and also to act from an investment perspective in really fueling some of that growth also, but we will not specify the upper or the lower end of our long-term guidance. But there is, of course, a long-term planning behind with some different scenarios in order to make sure that we, on a top line perspective, get towards the -- above the 10%, and also on our EBIT level, of course, get to the round about 20% in 5 years' time. But again, as I said, we will be balancing growth with profitability. Also important for us is that we really drive value and maximize the value and minimize the risk and that's what we will be doing.

And maybe to clarify for everyone here what you're meaning with this is that what we have said that in terms of our 2 new launches that we launched last year, so our aScope 5 and our gastroscope, their gross margin not in value, but because they are sold at a higher price, but percentage-wise is slightly lower than some of the previous scopes we have. That doesn't mean that, that is like the new trend and that is back to our focus on our COGS levels. But some of that say, I mean, of the improvement in that will come from scale and some of it will come from other initiatives. But -- and why we are in this situation, you could say it's a number of different things, partly because our focus in the past couple of years was more about getting fast to market than on the cost. So that's, of course, something we have changed. But that is, of course, affecting the mix as you are rightly alluding to, but it's not that you should expect the gross margins to go down on the future products because it's not -- I mean, we believe that we are able to launch products that -- at the same percentage of margins as we have seen in the past.

Good point. Christian?

Yes. Actually, just a follow-up on exactly the margin profile on these 2 new products and maybe also understanding how far along you really are in the commercial launch here. Because as I've understood you, the sort of build-up materials in these products are significantly higher than what you'd like them to be. So are you confident that you can bring the margin sufficiently up on these simply through greater scale, better efficiency? Or do you think there's -- you would have to do reevaluate the pricing of these products. And yes, that's 2 questions.

Yes, I think -- and that's a very good question. I think we -- I mean, we are not communicating on the details on that, but I'll say we -- I mean, we definitely have identified ways to get them to a different level. And then I mean we're looking into I mean, the different initiatives, which ones do we pursue and which ones we are not. So we cannot be very specific. But you're right in that this is, of course, also partly related to some material, and that's where the modular approach we have will also give us some benefits that, I mean, was not fully implemented for these products.

I have a question here regarding the raw material. The image sensor and camera is the main production cost, if I remember correctly, still. And earlier this year, your main supply of camera and these are not a major profit warning. And they complain about the slowdown in the consumer electronic demand. And I guess, they also talked about the inventory reduction in the industry, et cetera. And what kind of dialogue do you have at the moment with the supply? Do you have like more room for negotiated price at the moment because they are getting hit right now on the demand. And I guess the -- you asked a more resilient customer for them and...

Yes. I think it's fair to say, I don't think we comment on specific suppliers. But what I can say is that, I mean, part of the reason why we have a high inventory back to Thomas' point, I mean, this is not only finished goods, it's also raw material because we were, you can say, making purchase orders for a different scenario. And then I think that goes back to our downgrades that we had before that we were planning for something different. And that, of course, means that when we have more inventory, I mean, we are using some of that before we are rebuying. And I think we have a good dialogue with our suppliers. I've met with several -- all our biggest suppliers right now. I think, in general, I can say on cameras and sensors and so on, we do benefit. I mean we saw the inflation being quite high, but we also see now given the demand for consumer electronics is declining, that gives opportunities for us in the sense that it's slightly easier negotiations we have with our suppliers than we had in the past.

Great.

And maybe just one small addition, but we mentioned it already, but we are very close with our suppliers and a close relationship also. So it's, of course, normal discussions that we're having throughout with all our suppliers within the current market conditions. And I wanted to say that also because we've also not had any supply disruptions in the past, so that also just speaks to how good and how close relationships we actually have with our partners.

So I think it seems like no further questions. It has also been a long day. So I think we are at the closing remarks before we switch off the camera and go next door for product demonstrations. Thanks a lot for coming to everyone. I hope this was a useful spend of several hours today. I hope also you have a good or at least a better sense of what we are focusing on in our business, me and my colleagues. A lot has been said, a lot has been asked, but I think what I want to leave you with that I can guarantee you that both myself and the rest of the team here, we are 100% committed to deliver on our strategy and to deliver strong profitable growth. We believe we have a strong strategy in place to do that. We also believe that we have strengthened and will strengthen our business model with the transformation program that we have ongoing. We believe we have a great portfolio that also -- a comprehensive portfolio that address the needs out there for the customers and that can also drive improvements in how patient care is done in hospitals with endoscopy. I think the external speakers hopefully gave you not only our words, but some of what they face in their world when doing endoscopy where at least I think it's clear also from visiting customers on a regular basis, there is room for improvement. And why every one of us going to hospitals should not be provided with a fully sterile endoscope when we go into a procedure. That's at least if I have to get a procedure done, what I would like to ask for myself. So I think we operate in a great market with great opportunities. And thanks again, and I think we should just remind ourselves with the small video that we have here in the end. [Presentation]

So that's it. Thanks a lot. And I hope you'll all join me and the team, both for drinks and snacks, but not least for product demonstration. So the exciting part ahead of us. Thank you.