Coloplast A/S (COLOB) Earnings Call Transcript & Summary

Good afternoon. I'm glad to welcome you to this year's Annual General Meeting in Coloplast. As always, we will have our general meeting in Danish, and it will be translated into English directly on the company website so that our shareholders all over the world can follow the proceedings. I would also like to extend a warm welcome to those of you following the general meeting in that manner. First of all, let me present the Board and the executive leadership team. I have our Deputy Chairman, Niels Peter Louis-Hansen; and our CEO, Kristian Villumsen. The remaining AGM elected members of the Board are Annette Brüls, Carsten Hellmann, Jette Nygaard-Andersen and Marianne Wiinholt. This year, we've had an election of the employee-elected Board members in Coloplast. The employee-elected members are elected for a period of 4 years. The election resulted in reelection of the existing 3 members who are Thomas Barfod, Roland Vendelbo Pedersen and Nikolaj Kyhe Gundersen. They [have as been] elected for another 4-year term. Congratulations. The other members of our executive leadership team are Anders Lonning-Skovgaard, Allan Rasmussen, Nicolai Buhl Andersen, Paul Marcun and Dorthe Ronnau. According to the Articles of Associations, we will appoint a Chairman of the AGM. And just like last year, it will be Niels Kornerup from the law firm Bech-Bruun. And I will now pass the floor to Niels Kornerup. Welcome once again.

Thank you very much for appointing me Chairman of this AGM of Coloplast. I look forward to a good discussion and a good development of the meeting. If you have brought along the mobile phone, please silence it so that we can have a good and calm meeting. I would point out that the press is welcome and that there is access to make audio recordings or sound recordings but only for reporting purposes. I have the job of making sure that this meeting has been [duly and lawful convened] and is quorate in relation to the business on the agenda. Before the meeting, I found that meeting notice was sent down in due time and also meet all the legal requirements contained in the Articles of Association and in Danish company law. On the agenda, we have 2 proposals concerning amendments to the Articles of Association. This is 71 and 72. In order to be adopted, they require minimum half of the share capital to be represented at the AGM that appears from Article 11 of the company's Articles of Association. And before the meeting began, I found that this requirement has been met. So I find that this ordinary general meeting is duly and lawfully convened and is quorate in relation to the business to be transacted. I take it that we can all agree there appears to be no objections, so I will enter that into the protocol. The access control has found that -- and now I get figures fresh off the press. 114 people are present in the room, 78 shareholders and 36 are guests, journalists, advisers and so on. Also before we started when counting proxies, postal votes, et cetera, 88% of the votes are represented, and that is after deducting treasury shares and 78% of the share capital is represented at the meeting that again after deduction of treasury shares. The Board has received proxies and postal those corresponding to 99.6% of the represented votes and 99.3% of the represented share capital. And all this -- well, the final figures will be appearing in the protocol from the meeting. According to Danish Company Law Section 101(5), there must be a complete explanation of the voting in relation to every resolution put to the vote of [AGM], explaining how many votes are in favor, how many are against. Also even if the outcome of the vote is fairly obvious. This may be departed from provided that the shareholders at the meeting agree. We have agreed to depart from this principle on previous occasions, and I can see that we will do the same thing this year. Thank you very much. Because of the requirement concerning being quorate. I must ask those who decide to leave the meeting in the course of proceedings to deregister outside at the hospitality desk. This doesn't apply, of course, if you stay for the whole meeting and leave after the meeting has been adjourned. If you wish to take the floor, I would like you to approach me and we have seats reserved up here in the first row, so that we -- you can come up here one at a time before you take the floor in order to have a smooth takeover from one speaker to the next. Now with these words of introduction, I'd like to embark on the meeting proper. This is the agenda. You See it on the screen behind me, and it has been sent out to shareholders. Item 1; is preparation of annual report, corporate releases and documents for internal use at the AGM in English; 2, report on the business of the company in the past fiscal year; 3, presentation and approval of audited annual report; 4, a decision concerning the appropriation of profit according to the approved annual report; 5, presentation and approval of the remuneration report; 6, approval of the company's remuneration for the present fiscal year; and then 7, as I said before, we have 2 proposals from the Board concerning amendments to the Articles of Association, an update of authorities and to the introduction of English as the group's working language; and then Item 8, election of members to the Board of Directors; 9, election of auditor; and 10, authority to the Chairman of the meeting to make effect registration of what has been adopted at the meeting; and then 11, any other business. So the first item is new because this is a proposal from the Board to the effect that the annual report, corporate releases and documents for the AGM, internal use will be prepared in English. It will appear from the convening notice that these documents will be in English. But for the time being, the Board will make sure that a number of documents including the annual report, the convening notice, proxies, et cetera, will still be available in Danish. The technical reasons why this is the first item on the agenda. Because if we approve this before, we approved the annual report, we make it possible for the company's auditor formally to sign the English language version of the annual report already this year. I would refer you to an article 101(a) in Danish company law concerning this type of proposal. Are there anyone wishing to speak on this? That does not seem to be the case. I take it then that the AGM has approved the proposal. Thank you very much. Which brings us to the next items on the agenda, which are now Items 2 to 5, which we will, as per tradition, deal with in one go: report from the Board presentation approval of annual report, decision concerning appropriation of profit and then presentation and approval of the remuneration report. I will now hand over to the Chairman of the Board, who will deal with the presentation of the documents contained in the next or first now for items. You have the floor, sir.

Thank you for choosing to participate in this year's AGM I've been looking forward to telling you about the past year. Our mission is to make life easier for people with intimate health care needs. That's why I'm proud that our company has helped more than 2 million people worldwide this year. We've done so by setting the standard for innovation within our categories and delivering products that make a clinical difference all over the world. Finally, we've continued to support our users directly. We have welcomed 250,000 new users to the Coloplast Care program. This way of running the company, working closely with both health care professionals and users benefits the individual user in their homes. It also helps the health care systems by keeping people out of hospitals. And this is important in a world where the number of elderly people is rising steadily and it is also good business. Consequently, I'm very pleased with the result this year. In 2021 to '22, Coloplast delivered 6% organic growth and EBIT margin before special items of 31% and a return on invested capital after tax and before special items of 27%. That's a solid performance, particularly as 2022 will be remembered as one of the most challenging years the world has seen for decades. In addition to the COVID-19 pandemic, high inflation, disrupted supply chains and rising interest rates had a visible impact on the global economy. All companies have had to adapt to that new reality, and Coloplast is no exception. So on behalf of the Board and myself, I would like to start by expressing my sincere thanks to the management and all employees of Coloplast for having made another extraordinary effort this year. In a challenging year, Coloplast once again took market share across business areas, and we made good progress with our strategy. That leads me to the Board of Directors and our collaboration with the executive leadership team. This year, we welcomed Annette Brüls as a new member of the Board of Directors. She has extensive managerial experience from the global med tech industry and profound insight into the U.S. market. Within that, I'm pleased to note that we still have an equal representation of men and women among the shareholder-elected members. One of my focus areas as Chairman is to involve the Board of Directors in key strategic decisions. During the year, the Board has worked closely with the executive leadership team to find out how to tackle COVID-19 in China, the war in Ukraine and rising inflation. Furthermore, the Board has been involved in important discussions on innovation, digitalization, sustainability, culture, acquisitions and the company's global commercial activities, not least in the U.S. and China. Open discussions between the Board and executive leadership team are important. It's essential that the decisions we make today support the long-term value creation for our stakeholders. Users, health care professionals, employees, societies and shareholders. The annual evaluation of the Board conducted with external assistance this year concluded that there is strong collaboration between the executive leadership team and the Board. It was emphasized that we have a high degree of satisfaction with the current range of competencies. And in the long term, we want to strengthen our competencies within innovation, and I look forward to continuing the good relationship in the coming year. Now I will focus on the company's Strive25 strategy. In 2020, Coloplast launched a new 5-year strategy, Strive25, focusing on innovation and growth. This strategy is supported by annual investments of up to 2% of revenue and innovation and commercial initiatives. That is on top of the existing R&D sales and marketing budgets. These investments are aimed at boosting growth across all of our business areas. A part of the strategy is also to actively look for acquisition targets to further strengthen our growth opportunities. So let me start my review of this year's Strive25 results by presenting our most recent acquisition, Atos Medical. The acquisition of Atos was officially approved and completing on the 31st of January this year. And on the 11th of May, funding was in place with the bond issue worth DKK 16 billion. Atos Medical is Coloplast's largest acquisition ever. Therefore, I'm pleased to say that just 10 months after the acquisition, I can confirm the strategic rationale and growth expectations. Atos Medical delivers high single-digit organic growth and solid EBITDA margins in the mid-30s. Growth opportunities in the market remain high as many patients do not affect to treatment of products, and the integration of the company is progressing according to plan. Coloplast and Atos Medical are kindred companies that can learn a lot from each other. Both companies help people with chronic conditions, both are undisputed market leaders and both believe in a business model based on innovation, long-term partnerships with health care professionals and direct support for users. Both companies are also fighting for better access to improve products and treatment. Before I continue, I would like to present Morton's story. Cancer of the voice box meant that Morton had to undergo a total laryngectomy in 2021. Today, he uses from Atos Medical. [Presentation]

[Foreign Language] Now let's talk about innovation. That is one of the key areas of the Strive25 strategy. Morton's story is a good example of the difference that the right treatment and great products can make in a person's life. Atos Medical's Provox Life is a new generation of products comprising so-called HMEs and plasters and tubes that improve the patient's ability to speak and breathe. Provox Life was developed in close collaboration with users and health care professionals worldwide. And these products set the standard for innovation in the market. Provox Life is just one of many examples. Our ambition is to set the standard for innovation within all of our business areas. This includes the Chronic Care business and Coloplast's clinical performance program. This program is important because clinical evidence and data play an increasingly important role in our dialogue with health care systems. We need to be able to document the value we create to users, to health care professionals and not least to payers. This past year has brought significant progress. We pilot launched the world's first digital Ostomy product, Heylo, to hundreds of users in Germany and the U.K. This product has been developed to prevent leakage, which is a major concern for people living with Stoma. Heylo has been well received by the users. The clinical studies are progressing according to plan, and we expect to launch into 2023. We also made good progress with our new catheter platform, Luja, with micro-hole zone technology. Luja aims to provide better and safer emptying of the bladder, thereby reducing the risk of urinary tract infection. This product will be launched in the second half of '22 to '23. This past year has, however, also brought challenges. After careful consideration, we have decided to move our focus from the development of the next Ostomy platform to other promising R&D projects. We will reallocate resources and focus on other Ostomy Care technologies and projects. This decision is a result of new MDR rules that is EU legislation regarding approval of medical devices. The new rules categorize substance in the device as a medicinal product, which makes the device Class III device in the EU. Class III classification would involve further investments and delay the launch considerably. Furthermore, Class III classification is not in line with Coloplast's overall regulatory strategy for Ostomy Care. Within the Continence Care, we launched the SpeediCath Flex set this year, thereby expanding our portfolio of flexible catheters. The set solution offers a bag system that meets the needs and preferences of certain users. Within Wound Care, we have a special focus on the two fastest-growing segments, Silicone and Fiber, and we now have the strongest product portfolio in the company's history. In Interventional Urology, we are continuously seeking attractive opportunities within new segments. We now enter the laser segment with the launch of the company's first fiber laser device, thulium fiber laser drive. Among other things, this device ensures faster and more targeted treatment of kidney stones. We also initiated clinical studies of the INTIBIA device. INTIBIA is an implantable device for treatment of overactive bladder and as a result of the acquisition of the med tech company 9 continents in 2020. So overall, we are making solid progress within innovation. We have high expectations of these products, which are set to drive the company's value generation. And that leads me to another key area that is growth. Because Strive25 is a growth strategy with ambitious targets. Once again, we outperformed the market and gained market share across business areas. This was achieved as COVID-19 gradually loosens its grip on the world, with China as an exception. In China, shutdowns impacted growth this year. All the same, we maintained a strong position within Ostomy Care across all channels and the long-term potential of the Chinese market is intact. In the U.S., the Ostomy Care business delivered double-digit growth. This was due to an expansion of the sales force as well as contracts with the 2 largest GPOs in the U.S., Vizient and Premier. These contracts give us access to 75% of U.S. hospitals. We also made investments within Interventional Urology as well as our new business area, Atos Medical, also known as Voice and Respiratory Care. Investments in commercial activities boost growth. When the company grows, we are helping even more people with intimate health care needs. More and more people can avoid hospitalization and live the lives they want. This benefits not only individuals but also health care systems and the societies that we're all a part of. That leads me to another topic that is important for our strategy as well as the societies we operate in, sustainability. Sustainability remains at the top of the board's agenda and for good reason. Sustainability has become a prerequisite for operating in the market as a responsible company. It has become a competitive advantage. And hence, it's essential that Coloplast delivers on its ambitions. Sustainability is an enterprise theme in Strive25. We have allocated DKK 250 million to support a sustainable development. Let me highlight some of this year's achievements, starting with the focus area of CO2 emissions. We reduced our Scope 1 and 2 emissions by 8% since 2018 to '19. 72% of the energy we consume now comes from renewable sources. We have installed electric heat pumps at our sites in Hungary and phased out the use of natural gas at our site in China. And recently, we signed our first major power purchase agreement, securing renewable electricity for our sites in Denmark. This year, our reduction targets were validated by the science-based targets initiative. This validation confirms that our efforts will contribute to limiting global warming to 1.5 degrees as outlined in the Paris agreement. Another focus area is products and packaging. Here, we are working to find more sustainable solutions without compromising on product safety and clinical performance. Plastic waste is a key issue here. Plastic waste is a worldwide challenge, and we're committed to finding scalable solutions. Our priority is to bring more renewable materials into our product and packaging and to increase recyclability. At the same time, we want to reduce production waste. We will continue to increase our recycling rate, which is currently at 71%. We're also working with the leading manufacturers, partners and research institutions to map potentials for plastic recycling. I believe that such partnerships are essential to reaching our targets. And now I will turn to a key theme in our strategy and our history of value creation, unparalleled efficiency. Like any other global company, Coloplast has experienced increased pressure on input costs over the last year. This includes higher prices for raw materials, freight and energy and inflation in general. At the same time, disrupted supply chains and high wage inflation in Hungary have led to extraordinary challenges. We have launched a number of initiatives to meet these challenges. We have increased our focus on raw materials and are in close dialogue with our suppliers. We have built up larger stocks to further strengthen our reliability of delivery. We have a strong focus on energy procurement, and we are continuously working to find alternative sources of energy, primarily wind and solar. Furthermore, an extensive automation program will reduce the impact of wage inflation in Hungary. We're making good progress with the implementation, which will make our production more effective and create higher output without increasing the number of operators. We expect to have fully implemented the program by the end of 2022 to '23. By then, we will have avoided hiring 1,000 new operators. Finally, we opened our second factory in Costa Rica earlier this year. The establishment of the 2 factories in Costa Rica aims to support Coloplast's high growth. At the same time, we would like a more global and diversified production network. We expect that 25% of our overall production will come from Costa Rica by the end of this strategy period. We will continue to deliver strong results and unparalleled efficiency with Strive25. Initiatives in our Global Operations Plan 5 will have a positive impact on the profitability level in the long term. At the same time, our business support center in Poland and the global IT organization are continuously making the company's processes more effective. However, these initiatives have not been able to offset the rising input costs over the past year. The uncertainty in the global economy affect all companies, including Coloplast. Still, we are one of the most profitable companies in our industry, and we are committed to maintaining this position. Now I'd like to address the part of the strategy at the heart of the company: leadership, culture and organization. Our success depends upon our ability to attract and retain competent employees. And that's why we need to be as capable at retaining employees as we were before COVID-19. This should be viewed in the context of a challenging labor market in which an increasing number of people are changing jobs frequently or have decided to leave the labor market entirely. I'm also pleased to note that employee satisfaction remains high in the company. Twice a year, we collect feedback from the organization via global employee service. And the most recent figures from '21, '22 show a very high level of engagement. More than 90% of our employees participated and we got a score of 8.2 out of 10. So we are in the top 25% compared with other companies in health care. Coloplast is still working to improve the gender balance at managerial level. We are committed to a 40-60 gender distribution at all management levels and on our Board of Directors by 2030. In '21, '22, 45% of all Coloplast managers were female. At senior leadership level, the figure was 21%, but a level just below direction level. The split was 40-60, which indicates that we have strengthened our female senior leadership pipeline. That was my review of the company's strategy, Strive25. Before I report on the financial highlights of the year, I'd like to address the war in Ukraine. We currently have an office with 6 employees in Ukraine. We have an office in Russia with approximately 50 employees. Since the outbreak of the war, our priority has been the safety of our Ukrainian employees and their families. We've offered Ukrainian employee assistance to leave the country if that was what they wish to do. Our organizations in Poland and Hungary have assisted employees and immigrated families with shelter, jobs and resource. We've also made several large product donations to emergency aid organizations. We've also focused on securing access to our products in both Russia and Ukraine. Together, which service a total of more than 100,000 people with intimate health care needs in these 2 countries, often artery people who are heavily dependent on our products. And that's why medical devices, like, for instance, medicines, are exempt from the sanctions. The war in Ukraine is sad and distressing, and I hope a peaceful solution will be found. I'd like to take this opportunity to thank everyone at Coloplast who has been involved in the management of this crisis during the year, not least those employees who are experiencing the war at firsthand. With these words, I'll turn to the financial highlights of the year. Coloplast announced its full year results for '21, '22 on the 7th of November. On the very same day, the annual report, sustainability report and remuneration report were published. Organic growth came to 6% measures in DKK, it increased 16% to DKK 22.6 billion. We continue to grow across sales regions and business areas despite the negative impact from COVID-19 in China. Operating profit before special items increased 9% to DKK 6.9 billion, resulting in an EBIT margin before special items of 31% against 33% last year. We're still among the most profitable companies in the med tech industry. But of course, we are affected by extraordinarily high input costs like many other companies in the industry. ROIC after tax before special items was 27% against 45% last year. The decrease is due to the acquisition of Atos Medical. And finally, the net profit for the year after special items came to DKK 4.7 billion, down from DKK 4.8 billion last year. The business areas. Sales of Ostomy Care products generated 7% in organic growth and 10% in reported growth. The SenSura Mio portfolio and the Brava range of supporting products continue to be the main drivers of revenue growth. This year, growth in new Ostomy Care patients returned to pre-COVID-19 levels in most of the world except for China. Europe delivered most of the growth driven by the U.K. The U.S. also showed strong performance, and emerging markets, except for China, also made a sound contribution to growth. Once again, the figures for Latin America were particularly good. In China, COVID-19 restrictions had a negative impact on growth due to a decrease in surgeries and sales activity at the hospitals. The average value per patient remains lower than before COVID-19 because of the economic certainty, which has led Chinese consumers to tighten their purse strings. Ostomy Care revenue amounted to DKK 8.6 billion, corresponding to 38% of total revenue, and we maintain our global leadership position in the Ostomy Care market with a market share of between 35% and 40%. Sales of Continence Care products generated 6% in organic growth and 9% in reported growth. Within Continence Care, growth in new patients also returned to pre-COVID-19 levels in most of the world. SpeediCath intermittent catheters and Peristeen continue to be the main drivers of revenue growth. Growth came from Europe, notably the U.K. as well as the U.S. and Latin America. We also saw double-digit growth in markets where in recent years, we have succeeded embracing the standard of care by improving the reimbursement of hydrophilic catheters. This is relevant in Poland, Australia, Japan and South Korea. In the U.S., growth in the first half of the year was affected by lower growth in new patients because of COVID-19. Growth in new patients normalized in the second half of the year. In the rest of the world, growth in new patients has normalized at pre-COVID-19 levels. Revenue amounted to DKK 7.6 billion or 34% of total revenue. Coloplast remains a global market leader within Continence Care, with a market share of between 40% and 45%. Sales of interventional urology products increased 9% in terms of organic growth and 16% in terms of reported growth. Growth was broad-based, driven by both men's and women's health in the U.S. and Endourology in Europe. Revenue amounted to DKK 2.4 billion or 11% of total revenue. the company's share of the total global market for Interventional Urology products is around 15% to 20%. We made a further provision of DKK 300 million this year in cover of potential settlements and costs related to litigations in the U.S. concerning product liability in connection with transfer surgical mesh products. We've now concluded settlements in more than 99% of all known cases. Sales of wound and skin care products generated 4% in organic growth and 8% in reported growth. The Biatain Silicone portfolio continued to drive growth, but the Biatain Fiber portfolio also made a positive contribution, especially European markets delivered strong results for the year. But emerging markets, except for China, also performed well. Revenue from wound and Skin Care products amounted to DKK 2.7 billion or 12% of total revenue. Our share of the total market for Wound Care products is 5% to 10%. Voice and Respiratory Care delivered high single-digit underlying growth in line with expectations. Our new Chronic Care business area contributed 6 percentage points to reported growth reflecting 8 months revenue. Growth was driven by solid double-digit growth within laryngectomy, which accounts for 2/3 of total revenue growth was contributed by new patients as well as higher patient value, thanks to the introduction of Atos Medical new product life product portfolio. Tracoe also contributed to growth with underlying mid-single-digit growth as expected. The global market for laryngectomy price is between DKK 1 billion and DKK 1.5 billion and the market is growing by 8% to 10% per year. Coloplast share of the total global market is around 85%. And now the financial highlights geographically. In the European markets, organic growth came to 5% revenue to DKK 12.9 billion or 57% of total revenue. In other developed markets, organic growth came to 6%, revenue to DKK 5.8 billion or 26% of total revenue. In emerging markets, organic growth came to 10%. Revenue increased to DKK 3.9 billion or 17% of total revenue. And now the profit for the year. The profit for the year reflects improved efficiencies and tighter management of operating expenses, but also higher activity and investment levels after the phasing out of the COVID-19 restrictions. The profit for the year was also affected by increased input costs and depreciation related to the acquisition of Atos Medical. Gross profit increased by 17% to DKK 15.5 billion from DKK 13.3 billion last year or a gross margin of 69%, which is on par with last year. Operating profit for the year was DKK 6.9 billion before special items or an increase of -- sorry, 9% compared to last year. The EBIT margin before special items were 31% against 33% last year. And now the balance sheet and cash flows. Balance sheet assets totaled DKK 35 billion, an increase of DKK 19 billion since the beginning of the financial year because of intangible assets resulting from the acquisition of Atos Medical. Equity increased by DKK 124 million since the beginning of the financial year to DKK 8.3 billion. The free cash flow for the year was negative by DKK 6.7 billion. The decrease being mainly attributable to larger stocks and prepaid expenses, including expenses in connection with the acquisition of Atos Medical. Adjusted for acquisitions, the free cash flow for the year is DKK 4 billion, an increase of DKK 597 million on the previous year. At the close of the year, net interest-bearing debt amounted to DKK 18.1 billion compared with DKK 2.1 billion last year. The increase being primarily due to the acquisition of Atos Medical. At today's AGM, the Board of Directors proposes the distribution of an additional dividend of DKK 15 per share, which means it comes on top of the half year dividend of DKK 5 per share. This brings the total dividend paid for the year to DKK 20 per share against DKK 19 last year. This means a total payout for '21, '22 of DKK 4.2 billion, corresponding to a payout ratio of 84% before special items. On the last trading day of the previous financial year, that Colopast share was traded at a price of DKK 1,007 at NASDAQ Copenhagen. On the last day of the financial year, which I'm reporting on today, the closing price was DKK 776. In the period from the 1st of October '21 to 13th of September '22, the return on the Coloplast share was negative by 20.4%, including dividends paid out during this period. This should be viewed against the backdrop of a generally declining stock market because of negative developments in the global economy, including increasing interest rates. In the same period, the C25 index that we are part of fell by 22%. The day before the AGM, the closing price was DKK 835 -- DKK 834, sorry. And now to the financial outlook and guidance for next year. Next year, we expect organic growth in the range of 7% to 8% at constant exchange rates and 11% to 12% in DKK, including growth contribution from the acquisition of Atos Medical of around 3 percentage points and a positive impact from exchange rates of around 1 percentage point. The expected organic revenue growth reflects a limited impact from COVID-19 across business areas, except for China. This means sustained momentum in Europe for the Chronic Care business, where growth in new patients has normalized at the pre-pandemic level. This also applies to our Ostomy Care business in the U.S. Continence Care in the U.S. is expected to grow to improve -- to grow because of a normalization of growth in new patients. In emerging markets, we expect broad-based double-digit growth. China is not included because the country is still expected to be impacted by the COVID-19 restrictions. Urology and Wound & Skin Care expected to deliver growth above market level, which is in line with the Strive25 target. But Wound Care in China is expected to be impacted by COVID-19 restrictions. Voice and Respiratory care is expected to grow by 8% to 10%. We expect a reported EBIT margin of 28% to 30% in DKK. The expected EBIT margin reflects increased pressure on input costs, especially from raw materials and from higher electricity prices and wage inflation in Hungary. These costs have, to some extent, been offset by efficiency gains and tighter management of operating expenses. CapEx is expected to come to DKK 1.4 billion, reflecting among other things, investments in automation at the sites in Hungary and China. CapEx also reflects investments in new machinery for existing and new products as well as IT and sustainability. CapEx for Atos Medical is included in the figure. The effective tax rate is expected at around 21%. That was my report for fiscal '21, '22. This ends another chapter in Coloplast 65-year history and a new chapter begins. Once again, I'd like to say special thanks to Coloplast's management and employees for delivering a very solid result for this year. I would also like to say thank you to all our users for trusting our products and services. And last but not least, thank you to all shareholders for your faith in the company. We have now started on a new year. And in many respects, the world is now not what it was just 12 months ago, the list of global challenges along and Coloplast is not immune to their impacts. Nevertheless, I see a bright footer for the company. We focus on long-term growth, we are competitive, and we take market share. We had the highest profitability levels in our industry and across business areas and regions, the growth potential remains significant. There's still millions of people who do not have access to the treatment of the products that they just serve. This year, again, we will work hard to address that situation. And I'm convinced that Coloplast has the model required to make a difference. And what's equally important, we have the values and the culture needed to succeed. With these concluding remarks, I'd like to show you a film that talks to our culture and the values on which we are built. Here it is. Thank you for your attention. [Presentation]

Thank you very much for the report on the company's activities for the past year, the presentation of the annual report and the presentation of the remuneration report as well as the presentation of the distribution of profit. Before opening up the debate, I should inform you that the annual report has been signed by the Board and the executive leadership team and that it has received an unqualified auditor's report, as you can see in the annual report on Page 123. Before we start the debate, I remind you that as the Chairman also said, the Board proposes a dividend for the financial year 2021 to '22 of DKK 15 per share of DKK 1. This is in addition to the extraordinary dividend paid out in connection with publishing the half year accounts where the company paid out a dividend of DKK 5 per share. That takes the total dividend to 90% of the year's group profits corresponding to DKK 4,247 million. With those words, I would like to open up for the debate.

And we start with ATP, represented by Mr. Claus Berner Møller. If anybody else wants to take the floor, please let me know. But for now, I pass the floor to Mr. Claus Berner Møller.

Thank you very much. My name is Claus Berner Møller, and I represent ATP. I would like to thank you for the report and the presentation of the annual report. 2022 was a difficult year for many companies due to political challenges, supply chain challenges and high inflation. For companies like Coloplast, which is subject to price regulation. Inflation is a particular problem because the inflation cannot be outweighed. With targeted price increases where possible and a strong focus on costs, Coloplast has limited the loss on the EBIT margin to about 2 percentage points. The effect from new amortizations and acquisitions is the reason for half of this decline. That is a good result that we, as shareholders, appreciate. On the other hand, we also have to look at the risks that are entailed by this very strict risk management. We can see that top line growth will decrease in coming years because you haven't made the necessary investments in order to secure future growth. CEO, Kristian Villumsen, points out in the annual report that the necessary investments in R&D and growth initiatives have been carried out. And I was really glad to read that note from him. The most positive news last year was the acquisition of Atos Medical. But then we have been told that integration is going along as planned and that Atos is contributing to the overall business. That leads me to the following question. What should we expect of synergies from the acquisition of Atos Medical? And what have these 2 organizations been able to learn from each other? Throughout the past year, Coloplast has increased its focus on ESG, and I'm very satisfied to see that. One of the most important challenges is CO2 emissions under Scope 2 and 3, you've you have achieved a reduction of 8% and you have a goal of 100% by 2030. When it comes to your Scope 3 emissions, we have seen a small step back this year. And I understand that you're in a close dialogue with the most important suppliers. My question is, therefore, what are the greatest barriers in order to reach your ambitious goal of a 50% reduction of your Scope 3 emissions per product by 2030? And what are the most important steps that you're going to take? Within ESG, you also focus on gender diversity. One of your goals for 2030 is that women should constitute 40% at the senior leadership level. However, the share of women have fallen last year from 24% last year to 21% this year. Of course, I understand that in an individual year, you can see a setback. But when that happens, of course, it is relevant to ask what steps you are planning to take to reach your goal in 2030. Other than that, I would just like to wish you the best of luck in the years to come.

Thank you very much to Claus Berner Møller from ATP, and I pass the floor to the Chairman of the Board.

Thank you very much. Thank you for your positive comments. To your question about what synergies to expect from the acquisition of Atos Medical and what the 2 organizations can learn from each other. I can tell you that Coloplast and Atos Medical are 2 companies that match very well. We have a chronic business model. Our Ostomy and Continence Care business are for people who need constant care and chronic care after their illnesses or operations. And the same can be said about Atos Medical. So we have a strong cultural fit here. And Atos Medical, as we see it, can benefit from our strong commercial presence across geographies because Coloplast are very strongly present in emerging markets, whereas Atos Medical doesn't have a large organization in China, for instance, where about 1/5 of all laryngectomy procedures are carried out globally. So of all procedures in the world about 1/5 take place in China. And here, Atos Medical don't have their products today. And of course, that will mean that once the products are registered, they can get out there. On the other hand, we can learn from Atos on several issues. Atos successfully selling directly to consumers. They have a strong clinical program and they just launched a very strong new program as well. Just to mention a few examples. To your question about CO2 reductions. It's true that Scope 3 is difficult, and you can't do this on your own. We want to promote our sustainability within all of our key areas without compromising on product safety or our clinical performance. And on top of that, we also produce plastic products, which is also a problem or plastic waste is a general problem in the world. So we have the responsibility to address that problem and try to make improvements. And we do that in collaboration with our stakeholders across the supply chain. Looking at raw materials, they constituted 68% of our Scope 3 emissions in 2021 to '22. Now we have a collaboration with about 50 suppliers. And we are bringing on board more and more suppliers to our supplier sustainability program. So we work with our suppliers to bring down our emissions for existing and future products. Another area that's important is goods transport, which constituted 15% of our emissions last year. And here, we want to replace air transportation with seafreight not because we want to fly our products around the world, but sometimes it's important and we have to do it. So we need to be transparent and make sure that we have our products where they need to be. We also work with bringing down the number of business -- the amount of business travel. During COVID, we found out that we can sometimes meet virtually, and we want to bring down our emissions from business travel and thereby using more digital opportunities for meeting online. Our ambition for Scope 3 emissions was approved by the science-based targets initiative this past year. And we think that is a very important milestone because that means that somebody is looking over our shoulders and making sure that we are well on track to reaching our goals and that we are not doing any green washing. Finally, there was a question about diversity. In 2021 to '22, we had we saw that 45% of all managers in Coloplast were women and for executive management, it was only 21%. And just below top management, we have about a 40-60 distribution and that's about equal. And that's where we are now. But to promote this area even further, we have launched a number of initiatives. We have established a global equality and diversity committee, and they are going to present concrete plans to increase diversity, and this will include training and education. We also work actively with diversity in our talent development program, and we are looking at the working conditions for selected groups of employees. It could be maternity and paternity leave and so on. So we do have a number of initiatives covering these areas.

Thank you very much. And this was the Chairman's reply to the ATP pension fund. The next speaker comes from the Association of DNA shareholders represented here by Bjarne Kongsted. You have the floor, sir.

My name is Bjarne Kongsted, and I attend the meeting today in my capacity of representative of the Danish Association of Shareholders and asked for the floor, not to explain about the interests of our association as the speaking on behalf of our shareholders. Sorry about my voice. It's not because I saw a dreary football match from Qatar yesterday. I don't know where it came from. Well, we have an objective of attending about 50 AGMs per year all over the country. And we are pleased to attend the Coloplast AGM. Every year we've been here for a number of years now. When we attend an AGM, we do it not only to strengthen shareholder democracy, but also to explain to management in corporate businesses that we have a catalog of focus areas and that we speak on behalf of our shareholder -- our members, sorry, when we focus on a number of specific areas. We are working with the current areas this year: transparency, decency and competency and of course, COVID, which is always relevant. Transparency has to do with something as mundane as whether it's possible to read the accounts, to see what actually -- what type of information is contained. Is it enough? Is there sufficient diversity on Board and management? Decency is about being decent in the way you do business. If you have shown a lack of judgment in the course of the year, if there have been cases that are very unfortunate bonuses, are they too high? And what about social responsibility? And last but not least, competency. Does the annual results and the budgets reflect a competent effort made by Board and management and does this share price reflect the true value of the company? This was a bit about our focus points in this fiscal year. And I would now like to comment on the accounts themselves and a couple of financial highlights. We are told that the profit ratio is back at 33% more or less on a par with last year. And this is in the fine end of the spectrum. I think it's difficult to find that there's room for improvement here. But in the notes, the company states that they expect a profit ratio below 30% in the current fiscal year. In the current fiscal year, the company has acquired market shares across regions and across business areas. And at the same time, the company delivers the highest earnings level in the industry. As a result, it is recommended by the Board that the annual dividend be increased by DKK 1 to DKK 20 for fiscal '21 '22. DKK 5 of this amount has already been paid out. At one point, the share price was below DKK 740 in the fiscal year, and that gives -- or that means that the dividend of DKK 20 is at a very high level, in particular, if another dividend is paid out next spring. I know that it does not appear in the accounts. An increase in operating profit from 9% to DKK 6.9 billion is fine. But there is an analyst that says that the expectations for '22, '23 are a bit on the weak side, and this has caused Coloplast to announce that they intend to look at savings and optimization initiatives. Organic growth at closing ended at 5%, where the market had expected an increase of 6.2%, and this was immediately reflected in the price of the company's share, but it has come back a bit since then. When I was here last year, I expressed my satisfaction at the increase in dividend of DKK 1 per year. It must have caused some people in the corridors of power to get together because they had decided once again to increase dividend by DKK 1. So we have certain -- we do have very high expectations of next year's accounts. Other industries are fighting with different challenges after the COVID-19 pandemic. And in this connection, I'd like to hear if Coloplast has challenges in relation to insufficient deliveries, both in Denmark and abroad and to what extent the COVID-19 shutdowns in China will affect coming years accounts. There's a certain instability in China these days. I'm sure that will also cause some foreheads to frown in -- on the faces of country managers. Last point on my list is to say congratulations with the final results. Let's hope it is reflected in the share price. A good working year to everyone, Board, management and all employees. Thank you very much.

Thank you very much to the Association of Danish Shareholders. There were a number of specific questions. Let's hear from the Chairman of the Board.

Thank you for the comments, Mr. Kongsted. I'm pleased you didn't propose an increase in dividend of DKK 3. We just managed to give you the DKK 1 you were referring to. Yes, I'd like to comment on the issue of dividend. The thing is we have a policy with regard to excess capital. We paid it out and we mainly paid out in the form of dividends, and we also have a small share buyback program, we buy back shares in the course of the year in order to have sufficient shares for the shares we need in relation to share option programs. So as we continue, I hope to make more money, we'll be able to increase our dividend payouts, but we are not to be considered a bank where we had the money invested in our own band, so to speak. We do intend to use it for some purpose and also to pay it out to shareholders. And then you have a comment about China, and I agree with you. It does give cause to worry. We have invested a lot in China. We have a large commercial organization there. We also have a large plant there, a large organization. Fortunately, we've been able to keep it running. There have been some raw materials that we couldn't get hold of. So the figures from the past year were affected by problems with deliveries but the large majority of activities there have been kept alive. In the guidance that we had, the expectations that we have expressed with regard to the new financial year, we emphasized that plastics is or supplies is something that's very important to us in our production, and we depend on deliveries. And you can clearly see that China doesn't deliver the growth that we've been used to. We've been in China for many, many years, and I simply cannot recall a year with so low growth expectations as in this year and the year before. There are some signs of a change, but it doesn't look very encouraging. So I also cross fingers, I hope things will be working in the right direction, but -- well, I would say we mainly agree with the worries that you expressed in your presentation.

Thank you very much to the Chairman. That was a reply to the Association of Danish Shareholders, Mr. Kongsted. The next speaker is Lars Henrik Nielsen. You have the floor, sir.

My name is Lars H. Nielsen and special greeting to Lars Rasmussen. We also talked at the AGM of Lundbeck in June. You may have noticed my post, which was quite critical in the Facebook Group, Coloplast shareholders. You're going to see 3 slides from me and hear quite a critical speech. I'm trying to reach the ambitious business manager with my speech. Coloplast CEO gets more in his remuneration much more than the ordinary Dane. The CEO, Kristian Villumsen, has got a pay increase of DKK 1.8 million, bringing his annual salary to DKK 21.7 million. That is not appropriate. Later on, you're going to vote on the remuneration for the coming year. And I propose that you reject this proposal. For salaries over DKK 7 million, there are new tax rules underway, they should not have a tax deduction in the company's tax deductible income from 2023. That proposal from the authorities is put forward in order to combat inequalities and distortions of the market. You can read more in the article about that says no tax deductions for extremely high wages from next year. In my Facebook post, you can find a link to that article. It was on the 11th of November 2022. The Board of Coloplast should adapt to the norm of the Danish Parliament for top management wages. So you should stay at the proposed level of DKK 7 million. After the fall of the Berlin Wall, we started the era called Europe of Hope but now it's turned into the Europe of tears because the globalization did not translate into good inclusive societies because the rich only got even richer. An Indian professor told Danish Daily Politiken recently that new liberalism is no longer supported by the general population in advanced societies where inequality has risen over the past 40 years. And now we're back at the level of the 1920s. The AGM of Coloplast is a cathedral for inequality of wages. And this meeting is documentation for this undermining development, a wage increase of DKK 1.8 million for the CEO, while many Danish people are in a desperate situation. I've had a top salary of DKK 35,000 a year. And if I had that wage for my entire life, I wouldn't even reach 1 annual salary of the CEO. I mean what can you spend that much money each year on? Should it be translated into consumption? Can you spend more than DKK 20 million on goods year after year? This afternoon, I would like to compare the top executives in the Danish top 25 companies with the top 25 top-rated chess players. They are fighting for a rating so that they can climb list of chess players, but they do not steal from less privileged people. They only steal ratings from each other from their competitors. So how do you measure the strength of best of the C25 company index? Well, you arrange them by the salaries of the executive managers. These are competitive people who enjoy competing for an attractive target. But couldn't you find something more ambitious than just measuring your success in euros or dollars? Could you create a new doc tram just like the top chess players who take from each other instead of taking from lower ranging players. This wage gap in the system creates gaps and cracks in the system many other places in society. As the old song goes, few have too much and too many have too little. And this is undermining our societal structure. So we have to do away with this market development in top executive pay. There's not much self-criticism in the top of the executive world. And therefore, I propose that we all reject the remuneration for next year.

Thank you very much to Lars H. Nielsen, and I pass the floor to the Chairman of the Board for his comments.

Thank you for those comments, Lars Nielsen. I don't imagine that we will agree completely at this AGM. But I would still like to explain my point of view because this is a global-listed company that we're running. It's not about the wage or the salary of Kristian Villumsen or any other executive leadership member, they have to be remunerated according to market terms and conditions. And we have to compared to what they are paid at our competitors at our neighboring company. It's a minority of companies that have Danish top managers. So of course, we have to compare to the cost of executive leadership elsewhere in Europe, at least, because that is the competition we are part of and that we are facing. We do not operate in a vacuum. We cannot just make it into a chess competition and hope that the best qualified executives want to play along. Of course, you can think that this is the wrong way to construct a society, and that is what I hear you saying, and I completely understand that if you look at a lifelong salary of DKK 20 million compared to an annual salary of DKK 20 million. Of course, you can have your view on that. Those are very large figures indeed. But to us, it's also about what we can compare with. We don't want to pay too much or compensate too much, but we shouldn't pay too little either. It's just to give you some perspective on how we make that assessment when we talk about remuneration. We won't get anywhere with a discussion on this because, of course, this is also about your view on life and your political standpoint. And I don't know whether it's new liberal, but in commercial companies, of course, commercial companies have a liberal agenda basically at. Thank you.

Thank you very much. That was a reply to the question from Lars Nielsen. I have no other speakers -- Bjørn Hansen. You are one of our permanent stock of shareholders at the AGMs.

I think it's fine that the CEO got a pay raise in particular, when it's something that is deserved. And I think that the management deserves pay raise and also the owners. It's good that we have these family-owned business in Denmark because that helps generate growth, but more than growth, also a fine reputation for us. Okay, they may make a couple of million extra, but there lies the problem. So congratulations. But I've said on previous occasions, if there's a deficit then they are not the same number of options and then the pay rises must, of course, be limited. But they have a hard job, and they have to deliver results every single month. And let's hope that this will continue. Now I have handed in some questions. And I have received a phone call from Coloplast concerning having a meeting in future, but I do have a question I'd like to hear from you about now is question #4. Things are happening in Hungary. Things are happening in Costa Rica. It's important for growth in Coloplast also what happens in the U.K., and they have left in EU. I don't know whether they're going to rejoin. I know that Scott and would really like to go back and probably also parts of Northern Ireland. But these are very important markets for Coloplast. So I'd like to hear about your plans for the future here. Will you start up more production if required? And would it be an advantage to do that instead of in Norway, which is a very expensive country to be present in with a plant. And then an old case in the Supreme Court, you -- the judgment was in your favor. It had to do with tax credits for losses sustained in connection with the issue of employee shares at a favorable price. Now the tax authorities always wish to prevent people from getting benefits. Thank you to Mr. Rasmussen. He said that the new corporate tax rate is likely to be in the range of 21% between that and up to 22.6%. That may have a difference of DKK 0.5 billion. We have been given a lot as shareholders and just give the money to us, that's where it belongs. Oh, yes, and by the way, Merry Christmas to all of you.

Thank you very much, Mr. Hansen. You are not old. Of course, you're not. And I don't know if the Chairman of the Board would like to comment?

Well, thank you for your comments. It was just a comment in relation to what you said about the U.K., it's true. It is a very important market for us. And is not a problem to deliver to them, although they are now outside the EU. So we do not have plans of setting up a production plant. We are not shut out of the market entirely just because the U.K. is no longer an EU member. And it's true what you say that our tax rate fluctuates between 21% and 23%. But it depends on things that happen in the course of the fiscal year. We take the view that we pay the tax rate that we are asked to pay. And you can also see publicly what we pay in tax in the EU. We pay our tax with satisfaction. But thank you for your comments.

Thank you very much. I have one more speaker on my list and that is Mr. [Edson], you have the floor, sir.

It's not as if I'm going to take up a lot of time. But I don't know whether you've seen this article from today, it's newspapers. And it made me think of countries such as Hungary, EUR 56 billion, that's what Hungary is likely to miss out on because of its behavior and the EU will not continue payments to that country. And we've got 4 production plants there, and we've had those plants for more than 20 years. I'm not saying that you should divest them or close them down. But any comments in this connection from you?

Thank you, Mr. [Edson]. The Chairman?

Thank you. It's a very relevant question, and we have asked the same question on a number of occasions because when you make a decision to relocate production to a different country, there's a good reason why you should. And we made the decision many years ago, almost 25 years ago to relocate. And the reason was that prices of the kind of products that we produce do not go up a lot, but other prices go up, the prices of transportation of, well, the pay bill, et cetera. So you need to find out how to achieve economies of scale. Produce at a cheaper cost or a lower cost or have administration at a lower cost level. And in those days, we had a very high level of inflation in Denmark. And it was a question of finding out where to relocate production. At the time, it was possible in some areas of Denmark to receive a certain business funding arrangement with local authorities. So it was possible to retake to Northern Jutland. Many industries knew about the same thing, and we were all looking for where to go. We didn't want to go too far away from Denmark, of course. So we looked at Poland and the Czech Republic and the Baltics and Hungary. And we then decided to go to Hungary. So what we wanted to focus on, because the countries were more or less similar in what they had to offer was cooperation with the local authorities. And we have been happy ever since. We have been worried from time to time with regard to the interaction between the EU and Hungary. But we take the view that there may be many things that we disagree about. But they prefer remaining inside the EU than being outside. But that doesn't mean that they are not allowed to challenge the way things work in the EU. So they take it all the way to the limit, but not further. That's why we have maintained our production activities in Hungary. We're very pleased with our activities there. But of course, one should be alert. Thank you.

Thank you to the Chairman for answering the questions of Flemming Else. I have no further speakers. Yes, there's one more. Mr. Frere -- Jens Falkman, the floor is yours.

What brings me here is that Lars Henrik Nielsen, the previous speaker talked about the NV and limits to remuneration and so on. And I would just like to say then that when management is doing well, and the company is doing well, it makes no sense to establish some sort of ceiling of DKK 7 million. They have to be remunerated according to what they deserve.

Thank you to Jens Feldman. I have no further speakers on the speaker's list. Does anyone wish to take the floor? That does not seem to be the case. That means the debate is now closed. I take it that the report has been taken note of, that you have approved the annual report, that you have approved the distribution of profit as proposed by the Board and that you have approved the remuneration report for 2021 to '22. There are no objections from the room. I hear there's a comment here on the remuneration report, and I can tell you that we are putting the remuneration report for a guiding vote, and that is what we've done. And with the votes cast, there are 374 million votes, and we now have 324.6 million votes represented and 309 million of them have voted in favor of the remuneration report. Therefore, we have duly noted your comments in the minutes. And of course, that will be taken on Board. But legally speaking, I can confidently say that the remuneration report has been approved. I hope you agree. That was items 1 to 5 of the agenda, and that leads me to Item 6 of the agenda today, which is the approval of the Board of Directors' remuneration for the current financial year. Here, the Board of Directors proposes that the general meeting approves the following remuneration to the Board of Directors for the financial year 2022 to '23. The members of the Board of Directors will receive a base fee of DKK 450,000. The Deputy Chairman of the Board will receive DKK 787,500, which is a multiple of the base fee and the Chairman of the Board will receive DKK 1,350,000, which is the base fee multiplied by 3. The Board also proposes that each member of the Audit Committee received DKK 240,000 and that the Chairman of the Audit Committee receives DKK 430,000. The Board also proposes a fee to each member of the Remuneration and Nomination Committee of DKK 150,000 and a fee to the Chairman of the Remuneration and Nomination Committee of DKK 250,000. The fees for additional duties associated with the committee work is unchanged. I can also tell you that the members of the Board of Directors are entitled to be reimbursed for certain expenses as described in the remuneration policy, and we just need a simple majority to adopt this proposal. Does anyone wish to speak under this item on the agenda? That does not seem to be the case. And I take it that the AGM has adopted this proposal. Thank you very much. Our next item on the agenda is Item 7, which is also a permanent item on the agenda, which is proposals from the Board of Directors and the shareholders. Today, we have 2 proposals from the Board of Directors, 7 1, which is an update of the authorization in Article 5A and 5B and 7 2 concerning the corporate language. Let's start with Item 7 1, which is the proposal from the Board for an update of the authorization in Article 5A and 5B. The Board of Directors proposes to extend the current authorization to the Board of Directors to increase the share capital with and without preemptive rights for the shareholders, respectively in Articles 5A and 5B of the Articles Association as these authorizations expire on 4th of December 2023, thus expectedly before next year's Annual General Meeting. Because the current wording is valid until the 1st of December 2023, I can tell you that this is a proposal to amend the Articles of Association and that requires that more than half of the share capital is represented, which we sought to begin with, and that we need to third majority. Let me ask if any shareholders want to take the floor under this item on the agenda? That does not seem to be the case. I then take it that the AGM has adopted the proposal. That seems to be the case. And I will take that to the minutes. Thank you very much for adopting this proposal. Our next item on the agenda is Item 7 2. Here, the Board of Directors proposes that the company's corporate language is changed to English to reflect the way the company works today. I refer to article 126 in the Danish Company Act. The requirement for adoption is the same, which is a majority in accordance with the Articles of Association and pursuant to Article 126.3 in the Danish Companies Act. There are no comments here? Yes, there is one comment. That is Mr. Bjørn Hansen. The floor is yours.

Well, I think it's all well and fine that at Board meetings, you can speak English or American, let's just call it English, but I'm already seeing in the accounts that there are many American words. And I think things are really being mixed together in many companies. We recently attended an AGM where a French woman who lives in England and speaks English very well although with an accent spoke, and there was nobody who gave an applause during the entire show. And I call it a show because it really was a show and it's not just any company here in Denmark. Many people like Coloplast and we like that you speak Danish at your AGM and that you have the annual report. It's out here available in Danish and that's excellent. It's a very good company. Please keep up the good work, and it's very good that you speak English. It's very welcome. But please make sure -- and I don't know how because you must have many German investors as well. Can you get anything in German as well? Thank you for the floor.

Thank you very much. Mr. Bjørn Hansen for those comments. Does anyone else want to take the floor under this item? That does not seem to be the case. I can inform you as stated in the convening notice that if this proposal is adopted, there will be a new Article 21 Section 1 in the Articles of Association. And again, we need a 2/3 majority. And as I hear no further comments, I take it that the Annual General Meeting has adopted the proposal. Thank you very much. Which brings us to item 8 on the agenda, election of members to the Board. Now the proposal is that all members elected by the AGM be reelected. They are Sir Lars Rasmussen, Niels Peter Louis-Hansen, Annette Bruls, Carsten Hellmann, Jette Nygaard-Andersen and Marianne Wiinholt. The other management positions of these candidates are available in the annual report and also appear in the convening notice. Are there any other candidates for Board membership? That is not the case. This means that they have all been reelected. Congratulations. You now sit for another 1-year term. We wish you every success. Next item is Item 9, which is election of auditor. The Board proposes the reelection of PricewaterhouseCoopers. The proposal is in accordance with the recommendations from the Board Committee that has not been affected by third parties or have not entered any agreement with a third party that will affect the outcome of this. Any other candidates? That is not the case. I find that PricewaterhouseCoopers has been reelected Auditor of Coloplast. I would also refer you to the convenient notice where it says that next year, a new auditor will have to be found, and the Board expects to propose that EY be elected or appointed auditor next year. And until then, they will appear as a shallow auditor in order to ensure a smooth handover. Okay. We have exhausted our business under Item 9. And now Item 10, authorization to the Chairman of the meeting with a right of substitution to announce what has happened at the meeting that require changes in registrations, et cetera, also to make linguistic editorial corrections in the material coming out of the meeting. Any comments to this? That is not the case. I take this to mean that the proposal has been adopted. This brings us to the last item, Item 11, any other business. Anyone with comments? Praise, criticism? That is not the case. Okay. We have now exhausted the agenda. Thank you for a good and orderly conduct. To everyone, this leaves me with one job of handing over now to the Chairman of the Board for a last comment.

My job is now done.

Well, then I would like to thank the Chairman of the Board for helping us navigate safely through this AGM. Thank you for being here, and thank you for your comments and remarks. The AGM has adjourned. Have a Merry Christmas, everyone. [Statements in English on this transcript were spoken by an interpreter present on the live call.]