Elekta AB (publ) (EKTAB) Earnings Call Transcript & Summary

Good morning, everyone, and warm welcome to Elekta's Capital Markets Day 2023. My name is Cecilia Ketels, and I will guide you through today's event here in our Crawley office. I also want to say warm welcome to Elekta's President and CEO, Gustaf Salford.

Thank you. Thank you, Cecilia. And it's absolutely amazing to be here in our cornerstone office in the U.K., England and to have a Capital Markets Day with all of you again. And I also would like to welcome you online to participate in this event, and I'm really looking forward for the next couple of hours.

And we have an exciting agenda. Who are the speakers, and can you tell me what are the topics?

I think we have a really, really interesting agenda, as you can see here in the background. And it is really focused on our strategy, ACCESS 2025, and we'll go through the different pillars. And I also have a team, my management team, coming presenting to all of you the different areas. And we also have a very, very special guest, and that's Dr. Alison Tree that would talk about Unity and what's happening in MR-guided radiation therapy.

And after approximately an hour, there will be a 10 minutes' break. For those of you who are online, you have received a telephone number. So if you want to queue up for questions, you can do that throughout the event and then come back and follow the presentation. But Gustaf, let's kick this off by having a seat.

Perfect. Thank you.

So Gustaf, let's reflect on what happened since the last CMD.

I think we have been -- a lot has happened to start with. And we, at Elekta, we've been really focusing on delivering on ACCESS 2025 with all its components of accelerating innovation, big focus area, being the customer companion, but also driving these partnerships and forming the partnerships in the cancer care ecosystem and of course, driving adoption of radiotherapy around the world. But there has also been a lot of resilience activities and excellence activities. And I also would like to say that all of this is really done with sustainability in mind as well. So sustainability is a big part of our strategy.

But some of the expectations we had 2 years ago didn't materialize. Can you elaborate on these and the impacts it had on Elekta?

Absolutely. So when we met 2 years ago at the Capital Markets Day 2021, since then, a lot has happened. It was at the height of COVID. We saw the effects. We then saw the supply chain challenges around the world that developed into component shortages, that kind of developed into inflation and all of those drivers as well. And then together with the war in Ukraine, all of this has been quite a challenging environment to act in. However, I think we have done a lot through our resilience programs to offset the effects as much as we could showing growth during that period. But I also look forward to the second half of ACCESS 2025 in the next 2 years to take the good momentum we saw in the last 2 quarters and continue into the next years.

And can you describe what you and your executive team has been driving when it comes to the strategy?

Absolutely. So we have been very oriented on kind of delivering on ACCESS 2025. And on the slide here, you can see a couple of those areas. It has been a lot to drive product launches from all the innovation investments we have done. So we have seen CMM, so Comprehensive Motion Management. We have seen Esprit coming out to the market, now treating patients. We've also seen Elekta ONE that was really the key, key, key launch we had at ASTRO in a big software suite that we will talk a lot about during the next couple of hours. But we also drove the Unity clinical adoption, getting this fantastic new technology accessible to more patients. We formed and deepened many partnerships, and we see that bearing fruit. And we continue to drive resilience areas, a bit more maybe than we planned initially, but that was because of this environment -- the environment around us. And of course, getting to sustainable targets and validate it, that was also a key event for us.

So nice development in challenging time. But how do you see the coming 2 years until '24, '25?

I think it's really about taking this momentum that we've seen and then bring that into the next couple of years. It is about driving profitable growth, really creating shareholder value will be one of my key focus areas and also the team and the whole company. And we will do that through profitable growth, margin expansion, but it's also to continue the product launches, more product launches as we go quarter-over-quarter, year-over-year to bring Elekta ONE out there, but also a lot of focus on software that I look forward to launch. Service, a key focus there for Elekta, and we are expecting that to grow faster than the installed base growth globally. And we'll also continue to drive the partnership expansion and also get the leverage from Elekta ONE on our full suite of products.

Understand. And how would you describe the Elekta? What will be the success for Elekta driving us?

Yes, I think that's a great question and a question I get a lot. And for Elekta, what has always made us successful and the core of what we do is this big focus on radiotherapy. That is our core. That is what we do here in Crawley as well, one of the first places in the world to produce linear accelerators actually. But it's also throughout the years and the decades to have versatile solutions. We are not really telling the customers what solutions they should have. We're open in architecture, both from the device side but also on the software side. We have a culture of innovation. Elekta's had many of the first in this industry. If it's IGRT, so image-guided radiotherapy. If it's MR-guided radiotherapy. So that is part of our DNA. And I think going forward, it is this commitment to partnerships because we cannot do it all, and we are very proud of our open model, and that is also about partnering with other players in the cancer care ecosystem.

And if we now turn to the market development, I think it's going to be more convenient for you if you're standing from screen and present that. Please, Gustaf, the scene is yours.

Thank you. Thank you so much. Excellent. So I'm just planning to take you through a couple of slides and pictures on the market update for us as a company in the radiotherapy market. So we need to start, as always, on kind of the problem we are trying to solve or being part of the solution for, and it's of course, cancer. And cancer is expected to be one of -- or the biggest cause of death in the next decades. So we're moving from one pandemic, the COVID pandemic into a cancer pandemic in all regions and countries around the world. Every year, 10 million people die of cancer, and 20 million get their cancer diagnosis. And I think this trend will just accelerate in the coming years, resulting in 30 million deaths in 2030. What we are part of is to drive the life expectancy up. And in this slide, you will see that cancer survivorship or life expectancy has gone from 50% to 70% over the last decade. That's an amazing, amazing development. And every year, we see this improving and improving. But this is for the U.S., this data. So it's not the same around the globe. And we need to bring these new technologies, if it's radiotherapy or cancer care as a team sport, other therapies, to continue to improve the survival of cancer patients. We need to think about it in two different ways. It's both about improving the clinical outcome for the very difficult cancers to treat, as you see here. But that's not enough. We will also need to improve operational efficiency. And these two areas, you'll see the guiding stars, you can say, of how we think about innovation and development of our solutions and services going forward. Radiotherapy should benefit 50% of cancer patients around the world. That's not the case today. It's part of 40% of the curative treatments. So if we look a bit on the trends, as I and we as a company see them, we have oncology trends of health systems that needs to keep demonstrating value of cares. What they need is really intelligent workflows and very important, personalization to improve outcomes. What we are doing as Elekta is bringing I mean the best technology throughout our different devices, but also with Elekta ONE as a key component to glue it all together. There's also this constant evolution of new oncology treatments and technologies. So we need to be part of that as well. We need to focus on the interoperability of technologies and disciplines across the cancer care ecosystem. And that's really what we are doing with our partners to work on interoperability together with imaging companies, software companies and other device manufacturers to make that happen for our customers and for their patients. And the third key trend is really about the shortage of skilled professionals in all countries, I was saying. So we need to take a bigger role also in services and upskilling of professionals. And we need to build this into our products as well as solutions, but we also need to work a lot with education and training of radiation oncologists, medical physicists, RTTs in order to have -- to close this gap. That will be key for the next years and decades. For our product portfolio, we have a market-leading position #1 or #2 in all our segments. And for linacs and on the Gamma Knife side, we have around 5,300 external beam devices in the installed base. And we have launched the Elekta Esprit that we're very proud of. And then, of course, brachytherapy, close to 2,000 brachytherapy afterloaders and devices. And also, we have oncology informatics on Elekta ONE that is being -- taking this full portfolio together and doing more with less, and personalize the different treatments. So as I said, this is the biggest asset Elekta has, our installed base, and we work with it to include, increase the service components, but also the software components on this. And if I turn a bit to the service part, a very important part of Elekta's portfolio, it is 40% roughly of our revenue and increasing you've seen over the years. And I often focus on bringing service revenue to grow faster than installed base growth, and that's what I expect to continue in the next years because then I know that we bring value to the installed base. From the regional dimension, you can see that Elekta is quite well diversified in our three main regions. We have around 120 markets, we sell to 40 offices around the world. And you can see it's very well distributed. In Americas, U.S. is, of course, a key market for us. It's about 75% of our revenue. Elekta's strategy in the U.S is more about gaining share because it's quite a mature market and drive product launches and also partnerships. For Europe, it's about 80% in EMEA and MEA is 20%. Here, it's driving growth a lot in emerging markets, but also parts of Europe is -- has a big gap in radiotherapy. And for APAC, area that I believe will be one of our key growth areas going forward, China is 50%, and we expect the other market in Southeast Asia to continue to drive a lot of growth for Elekta. So just to conclude a bit on the market. We have seen Elekta coming from a situation where we grew close to 10% pre-COVID going through a couple of challenging years, but now we have seen coming back to this 4% over the period and better in the last quarters. And looking forward into the next 2 years, we expect more than 7% growth on revenue. For the market, we expect 6% to 8% globally and 8% to 10% in emerging market, 7% to 8% for software. So that's a key growth driver in our portfolio. Mature, 2% to 4% and solutions, 5% to 6%. So with that, I would like to conclude and hand it over to Tobias. Thank you.

Well, thank you, Gustaf, please have a seat. And yes, now we're going to talk our CFO, Tobias Hagglov, who is to reflect upon what the financials impact have on our -- the business. And here, we have Tobias Hagglov on stage. But before you take that forward-looking statement, looking what to expect for the coming 2 year, can you please give us -- remind us where we stand today?

Yes, I can. And good morning, everyone. Really nice to be here. Looking where we are, this is where we are. We will continue the momentum we're in. If I look back here over the past year that just passed, we were able to turn a soft performance in the first half to a strong second. We have been able to ramp up sales growth. We have addressed cost. We have seen that the FX rates have turned to be EBIT margin accretive and the results you see here, a substantial, improved operating margin in the fourth quarter of '22, '23. This, we aim to continue. And so today, I will talk about our outlook, and I will talk about how we will achieve it. And as you know, as we presented here during the Q4 earnings release, we will grow more than 7% per year. The outlook also contains an EBIT margin expansion over the period. And also to distribute at least 50% of our net income to our shareholders in the form of dividends. So this will be done with a constant focus on driving shareholder value. Gustaf, he was into it and looking at our revenue and the revenue development. And clearly, the case has been that following the pandemic, the market has been hampered by the customer readiness amongst our customers. What we see now is an expectations of an increased growth rates in the market. And looking ahead in our outlook, we have a revenue growth of more than 7% per year. It will be driven by an accelerated backlog conversion backed up by the market recovery, as I just mentioned. We look into a continued solid to strong growth of our service sales. And also what we see is that prices are coming up on our order intake. So in the P&L, we expect by the end of this year and more so in next year, also a gradual price increase. We have a strong backlog. We have more than SEK 40 billion in our backlog. This is a backbone for growth. As you see here, over the past 3 years, we have been running with an average book-to-bill ratio of about 1.2. And in this fiscal year, we expect 35% of this backlog to be generated in revenues. So that was the top line. Now moving here down further into the P&L. I will now double click on this and look into the drivers and how we, as a company, will focus on drive shareholder value, both over this period but also beyond that. When we look at the gross margin, it's no doubt, I mean, you have seen here over the last years that our gross margin has been under pressure. Inflationary pressure is still ongoing. And we also see that just our growth profile of growing areas such as the solutions and such as the emerging markets, which are relatively lower gross margin also hamper the gross margin as such. However, we are not standing still. We will drive, and we will improve our gross margin. The volume contribution that I just mentioned will contribute with scale into our fixed cost in the COGS. The price increases gradually towards the end of this year and into next year will also contribute. You saw that we very successfully were taking out cost last year. And within our COGS, this will now be followed by taking out product costs with COGS reduction initiatives. And we also see some favorable trends that supply chain are easing and logistics costs have come down. So all in all, we're targeting a gross margin improvement with the majority in next fiscal year. Looking at SG&A. Clearly, here, we see the salary inflation around us, and that is ongoing. But what we will do here is to continue the very nice positive momentum we're in, driving the productivity of actually ensuring a faster sales growth than a cost growth year by driving productivity within SG&A. In this, we will also do selective investments mainly within customer-relating activities and revenue-generating activities in order to remain competitive. When we look at our R&D, this is clearly something which is vital when you look at Elekta's long-term competitiveness, profitability, margin expansion. And I'm very proud to work with the team here. You will later on, listen in to Maurits, Anish, et cetera, and the work that is ongoing. And you have seen over the last years just here, we have launched the Elekta's very Comprehensive Motion Management and also the Elekta ONE. And these innovations are vital, not just to our customers, but also from a financial perspective, in the long-term view of driving shareholder value. When we look over this period, we do expect, as you see here, that the gross R&D as a percentage of sales are coming down that the net R&D is moving upwards, following higher amortization levels and the consequences you see on this slide is that the gap between the gross and the net R&D is narrowing. So, then looking to a slide that I think we have received some questions over the last quarters about. This is actually then a summary, illustrative scenario for our operating margin and how you can think upon it. Yes, we will drive margin expansion. Yes, we will drive shareholder value. This will be a combination of sales and cost activities; volume contribution, given scale, as I just mentioned; price mix to be positive; offset the ongoing inflation with COGS reduction initiatives; continue our efforts on SG&A; following the higher amortization, net R&D will lower the operating margin, while actually FX here, given the current FX levels, will be a positive item here when you compare the years. So...

Thank you, Tobias, for giving these financial implications on the P&L. But what about cash flow and capital allocation?

Yes. Thank you, Cecilia. Of course, when you run and drive shareholder value, it's not just about the P&L. It's also about cash flow and the balance sheet productivity. And you saw that we ended last fiscal year very strongly here in Q4. We were able to substantially reduce working capital, and we were able to deliver a record strong cash flow for Elekta. This work and this emphasis will continue in order to drive shareholder value. And where will the cash go? Yes, in our plan, it includes a continued dividend to our shareholders. It also includes to continue to expand our portfolio and offering and it will also include the great journey we're on to expand our geographical footprint and grow there.

And do you have any closing remarks?

Yes. So these are my closing remarks. Product launches to accelerate order growth. We have talked about the market recovery and acceleration of the backlog conversion to drive revenue growth. We will drive margin expansion here by revenue growth, price increases, cost productivity. We will continue our focus on cash conversion and working capital. And our capital allocation is planned to include dividends and also continued investments both in our portfolio and geographical expansion. Thank you.

Thank you, Tobias. Thank you. And we have heard Tobias talking about that we will continue to invest selectively in innovation. So let us now hear Maurits Wolleswinkel, who is responsible for our R&D. Welcome on the scene, Maurits.

Thank you so much, Cecilia.

And you were presenting the R&D strategy at our latest CMD as well. Can you please start by updating us what have we updated in our product portfolio since then?

Absolutely, Cecilia, and good morning, everyone. And I can say that a very delighted and proud person is standing in front of you because if I look 2 years back, of course, the Elekta portfolio, we have introduced new capabilities and new breakthrough innovations to the market. Starting with Comprehensive Motion Management, and it's truly comprehensive. Secondly, a brand-new Gamma Knife, the Esprit. Then we brought imaging into the brachytherapy room with Elekta Studio, and more recently, at ASTRO, we introduced Elekta ONE. And I would say, one of the largest product introductions we did in software for Elekta. So let's start with Elekta ONE. So what is Elekta ONE? First of all, it's a unified software environment and it really builds on the backbone of MOSAIQ. So MOSAIQ is still there. But what we actually do on top of MOSAIQ, we're building brand new applications in 4 areas: workflow management, treatment applications, real-world outcomes and in the future also a new integrated console environment. And important to mention in this respect, and that's my second point, this is an evolving ecosystem. And why is that relevant? Because our customers will not lose any functionality along the way. The third point I would like to highlight here as well is that Elekta in their software effort continue to remain committed to open interoperability. So how does Elekta ONE fit into the innovation agenda? We actually shared 2 years ago and maybe you remember and recall this overview. And I'd like to actually highlight the objectives, the aims we set out for ourselves in the 3 areas we highlighted. So the first one is what we said for every treatment, we actually want to make it a personalized treatment. The second thing we said is that with the data, we want to radically reduce and elevate productivity by as much as 50%. And we think that's a very realistic goal. And then thirdly, we want to work towards integrated decision support into every treatment. So these are the goals. But if I take these 3 goals, I can summarize them into bringing more personalized treatment to the patients in the clinics with less effort. And a way to bring that to life is actually to take a look at radiation therapy course of treatment. So in today's conventional IGRT treatments, we have a quite intense phase of treatment planning, then we have delivery of multiple fractions with review moments in between that can be 25, 30 fractions, taking as much 8 weeks of treatment. Now with higher personalization and better imaging, we actually can make every treatment session a treatment in itself. And with more personalization, we can also deliver more dose treatment session. And the result of that is what we call hypofractionation. And in combination with adaptation, we can really shorten the treatment course but also do it with less effort. So better for the patient and also better for the clinic. Now if you have even superior imaging at the point of treatment and also have imaging while you're treating and delivering the beam, you can even further push the boundary. And that's what we do with MR-guided, what I would say, ultra-hypofractionated treatment, bring it back to even as small as 1 week in just two fraction and more about it in a later session. So let's zoom in a little bit on the 3 focus areas I mentioned earlier. So Unity clearly is our flagship product when we talk about personalization. Comprehensive Motion Management is doing well. We start to treat the first patients, and we plan to roll out this solution this fall to all our customers as well. But the point I want to make is that Elekta is extremely well positioned in bringing this personalization to the clinic. Across our portfolio, whether it's MR-linac, brachy, neuro, but also enabled barrier software, we are bringing personalization to the clinic, and we're uniquely positioned in that respect. You also see here an adaptive CT-linac. So let's take a closer look at our plan of how we bring adaptive treatments to the CT-linac space as well. And important to mention there as well that we see adaptive treatments as a workflow. A number of capabilities need to bring to the clinic inside the treatment room but also outside the treatment room. So we're not anticipating to introduce a complete new system but bring these capabilities in steps to the customers. We will not only bring them to the customers as new product, but more importantly, also as upgrades. That means that our customers cannot only buy the new products but also basically bring the upgrades to their existing products as well. So it's a very important strategy in how we bring adaptive to our CT-linac. The second point is about productivity. So with Elekta ONE, we are introducing three brand-new products built from the ground up, smart view bringing mobility to our customers. The second one is smart flow that is also a new protocolized-based workflow that really brings next level of automation, but also very important, brings this connectivity to third-party vendor agnostic applications as well. And the third one is auto planning. Auto planning, that's really a breakthrough as well. Treatment planning that can take as long as 1.5 hours, we bring back to just 1.5 minutes. So we're extremely confident that our aim to reduce the efforts by 50% while delivering more personalization is very feasible. So the third element about integrated informatics. So what are we doing there? We're actually bringing our data analytics and outcome portfolio together in such a way that we connect the underlying data so that the sum of these solutions is bigger than the individual basis. Integrated Informatics is very much also about data and AI. And that brings me to the next topic. AI is a big topic and a lot is happening in that space as well. And I just want to highlight three initiatives we take that's a little bit more forward-looking. The first one is that we see already in the marketplace quite some autocontouring solutions, but they typically contour the critical structures. What we are focusing on is the more difficult problem is to look at actually the target, the tumor. The second example is around bringing real-time motion management tracking to the CT-linac portfolio as well. And the third element and the third example I want to mention as well that's actually coming out of one of our investments I introduced 2 years ago is one of the tough problems is what we call 4D cone beam CT that takes really minutes of calculation times. Now with applying generative AI, we can do it in just a few seconds. So a lot of exciting stuff. That brings me to my final concluding slide. I'm extremely proud as I'm pleased with all the innovations we bring to our customers. But also, actually what it will do for the business of Elekta. With Elekta ONE, we generate new upselling capabilities. We will accelerate our transition to SaaS. And with our delivery solutions approach, we will shorten the time to value, but also bring more high-margin upgrades to the market as well. So more personalization with less effort is not only bringing value to our customers but also to Elekta. Thank you.

Thank you very much, Maurits. Please have a seat. And let us continue with Elekta ONE. Look here for some more information. [Presentation]

We heard previously Gustaf emphasizing sustainability as being part of all business aspects of Elekta. And we would like to share with you some more insights on our sustainability agenda, and the most suitable person to do that is our Head of Sustainability, Hilma Nordquist. Please, welcome on the stage. So Hilma, we would like to know what drives -- what Elekta is driving when it comes to sustainability and especially when it comes to our product offering?

Excellent. Thank you, Cecilia. I'm excited to be here. It's a great honor to be presenting the sustainability agenda to you. Before moving into how we're dealing with combined innovation and sustainability, I wanted to just walk you through some high-level activities that we're driving across ES&G. In the environmental space, we're working with measuring and reducing our emissions according to the Paris Agreement and we recently had our targets validated by the Science Based Targets initiative that Gustaf mentioned earlier on. We -- also, in our social area, we're, of course, driving access to health care through our core business, but we're also working with protecting and supporting people across our value chain from the workers in our supply chain, working with our own workforce, caring for them and also, of course, making sure that our patients that are treated by machines are done so in a safe way. And in the governance area, we're working with making sure that we're running an ethical business in everything we do. We have recently issued a sustainability -- or signed a sustainability revolving credit facility at EUR 250 million, which was a follow-up on the sustainability-linked bond that was issued 2 years back. And I will be focusing mostly on environmental topics in my presentation today and how we are working with our environmental agenda to make sure that we can grow our business in a sustainable way over the longer term. What you see on the screen now is a visualization of Elekta's value chain emissions. So we have a majority of our emissions in the use phase of our products. This is primarily driven by the power consumption of our products, SF6 gas use when running the product, some packaging and end-of-life treatment of our materials. You also see that we have a significant part of our emissions in the supply chain, the materials that we source as well as logistics that we're running. Only a smaller part of the Elekta value chain emission come from our own operations. That's referring to our facilities, the car fleet that we're running and the power that we procure to run our operations. That's quite common for companies only to have a significantly -- or to have a small proportion of your emissions in Scope 1 and 2. And as you can see, we have the majority of our emissions in Scope 3. And we're working on our methodology to constantly become better at measuring this in different ways. With this understanding of our emissions, we can also then work in a coherent way with reducing emissions across our value chain. And we have, during the last year, designed and set targets for ourselves in order to be able to do so. We have set 4 science-based targets. We've recently had them validated as well, which is a big step forward for us. And I'll walk you through the targets one by one. So looking first at our own operations. This is then Scope 1 and 2 for those of you who are -- so looking at own operations. We're working with reducing those emissions in absolute terms by almost half in the next 10 years. This is about us transitioning our car fleet to a greener one. We're also going to transition our power consumption in our own operations to renewable electricity. We have another target for our supply chain. This is about motivating and engaging with our suppliers to enable them to set their own targets for working with their environment work. And this is a way for us to really scale up climate action in our supply chain. This is a common way for companies to address supply chain emissions. And we have started with this work and engaged suppliers, and we're being tracked in all of this. We will be reporting on the progress in the -- for the first time in the next annual report coming out in a few weeks' time. So -- and so far, we're seeing good progress on the numbers here. Moving to the last target. We have set an Elekta-specific target for our emissions, which is about us wanting to reduce emissions from our products per treatment course that we deliver because we see a need to increase number of treatments that we deliver over time, and we want to make sure that we deliver cancer in an environmentally sustainable way as we grow our business. This is where it gets more exciting and when we're -- when I will be moving into the innovation part of my section. So I suggest Maurits, why don't you join me and we can deep dive a little bit more into this target. Excellent. So Maurits, we've been talking about this target during the design phase of it, and we acknowledge that we want to be able to make sure that we can continue to treat more people in an environmentally sustainable way in the longer term. So we are tracking now emissions from how we're using our products and then tracking that per treatment course that we managed to deliver globally. This is very exciting. It's an Elekta-specific target that we have designed for ourselves. And I wanted to -- I mean I mentioned before that Scope 3 emissions from Elekta products are primarily driven by the power consumption running our machines. And I was thinking maybe you can elaborate a little bit on how we are innovating to reduce those emissions.

Yes. Happy to, and I think it's well known that linacs are, I would say, energy hungry. So this has been an attention point for quite some years, actually already at Elekta. Maybe good thing to mention here, first of all, is that today, the Elekta linacs are up to 40% less in energy consumption compared to competitive systems. And it is really a competitive advantage for Elekta, and we see more and more customers asking for that. And so I think that's an important point to make here as well. So we're doing pretty good. But that's during the delivery of the beam when the patient is treated. So the next thing we're now doing is all the time around it, call it the standby mode, the idle mode, but also during QA. So we're now really zooming in how we can reduce the energy consumption in the nontreating time. So a lot of attention. Yes.

Brilliant. I also heard you speak about hypofractionation in your previous presentation here, and it's one of the ways for us to drive a number of treatments that we can deliver. Perhaps you can elaborate on that thing.

Yes. And the statement I made about more personalization with less effort actually very nicely dovetails with the sustainability goals we have set for ourselves as well. Because if you provide more dose per fraction and we can limit the number of fractions, that means also being able to treat more patients on a single linac. It makes radiation therapy more accessible, but also less visits of the patient to the clinic as well. And one of the studies actually showed is the highest CO2 emission is actually caused by the number of visits that the patients need to do traveling from them home to the clinic. So a lot of exciting things there as well.

Excellent. Yes. I mean if you can travel less to the hospital, that's a big deal for the patient and for the environment. So good. Excellent. So it's clear that when we're working towards this target, innovation will be critical both for driving down our what we call the numerator and the denominator, driving up the denominator here. So thanks for sharing your views there.

Thank you.

It sounds really exciting to shape the future innovation with the same or better performance and less emissions. And that will conclude the first strategic pillar. Thank you, Hilma and Maurits. And Maurits, can you please come up and join us because together with some of your colleagues, we want to move into the second strategic pillar, which is -- that is driving partner integration across the cancer care ecosystem. And with me here, I have Habib Nehme, our Chief Commercial Officer. I have Carlos Castilleja, our Head of Americas. And Elekta has, as the largest stand-alone radiotherapy company, chosen to collaborate with strong partners in bringing together the expertise in cancer care continuing. And you were recently appointed Chief Commercial Officer, but already in your previous role, you were highly involved in the partnership. So Habib, if you can please start telling me what are the advantages with a model that Elekta has chosen?

Thank you, Cecilia. It's a great opportunity as well for Elekta and the industry. The core advantage of the partnership is that we're bringing to our customers comprehensive solutions going from diagnostic, planning, treatment, and this is worldwide, not only focused on our region. Second one is improving the customer experience because we are allowing them to have multiple technical choices going as well from diagnostic workflow and that would tailor the solutions to their patients they are treating and giving care for. Another key advantage is to keep Elekta with the open design, open flexibility, like Gustaf talked about, the open architecture, right? And not forcing the customers to go to rigid and a forced architecture and close one. The other main advantage, and my colleagues would agree with me, is that giving to our sales force opportunity to partner with the other companies to elevate the discussions and the value proposition to the C-suites of the main private oncology companies and IDNs worldwide. And us, as an independent RT company, making us focusing on our core business, which is the precision radiation medicine with more competitiveness.

And from a commercial point of view, what have we achieved with our partners so far?

Yes. I mean the last 18 months been very active where -- with the partners. We have mapped the organization, the processes put in place, the steering committees and we signed globally the regional agreements, and we started working on opportunities, filling the funnels. We have managed as well to put in place the value propositions going from diagnostic, as we said, to treatment. And we streamlined channels. We know where to go, how to go and start winning. We start winning in mature market, in -- as well in emerging markets. And this is great opportunities for us because we know that 7% to 8% of the opportunities are bundled with imaging. So we are working in a competitive way, therefore, and still 90% -- around 90% are independent RT, I would say, solutions.

Some countries with example of that?

We have Romania, we have India, we have Tanzania, we have -- and you see it's like mature markets and emerging markets. So very promising, I would say, partnership.

Thank you. And Carlos, you are Head of Americas and therefore, covering the largest radiotherapy market in the world, the U.S. market. What opportunities do you see with this partnership in the U.S.?

Yes. I think we first have to recognize a few things, right? One is that we have the complete radiotherapy portfolio in the market. But yet, patients can't be treated on our solutions unless they get diagnosed, which takes testing and imaging and so forth. And at the same time, we need to also recognize that large IDNs, integrated delivery systems and large cancer networks manage majority of the cancer centers in the U.S. So the partnerships -- a partnership with like imaging partners allows us to unlock the full patient journey as Habib was talking about, right, from the diagnostics to survivorship activity as well as the opportunity to hone in on the executive level that where the decisions are being made.

Yes. And if we look at the R&D part of it, and that's your area, Maurits, we are talking and working on increasing the interoperability between our open system and those of our large partners. Can you describe what improving interoperability means in this context?

Yes. Yes. Happy to. First of all, let's define what interoperability means, and that means exchange of data and information. And you do that for two reasons that you don't need to redo certain efforts. So typing, again, diagnosis, for example, into a different system. So you want to limit that for efficiency reason, but you also want to increase it for quality reasons. So that in all these handovers, you don't make mistakes. So these are the two reasons why interoperability is important. We distinguish two types of interoperability with our partners, interoperability across the cancer care continuum. So how do we link diagnosis, if you see in the picture here, with treatment as well. But also within treatment, we have partners, simulators, pieces of software where we also have interoperability with. Now what we are trying to do is to further strengthen and deepen that interoperability. And since Elekta essentially is taking ownership over the end-to-end RT treatment journey, we sort of own the rich data and context that we can share with our interoperability partners to increase the interoperability to make more efficient but also safer. So it's a very important topic.

And previously, you were presenting the R&D strategy. So what role has and will partnership have in that R&D strategy?

Yes. Partnerships is very important as well, and they are sometimes also related to interoperability, of course. But there's more than that. We see a lot of innovation in radiation oncology. And Elekta -- I see Elekta as the integrator in the radiation oncology department and beyond. That's our goal as being the integrator. And as an integrator, we need to do two things right, that the totality works together in a good way. And the second thing what we need to do right is that we always are ahead of the curve. So we have the latest innovations. So we continuously are thinking about what do we want to do in-house ourselves and where do we need to partner because we don't need to do everything ourselves as long as we continue to be the oncology integrator. That's the approach.

Got it. And the final question to you, Habib, on the commercial side, what can we expect for the future there when it comes to partnership?

Yes. I mean, let's summarize it. We'll continue as Elekta to reach out to the installed base of our partners, and we see that more than 50% worldwide. We'll continue together to offer standardized services and solutions to work on common training programs, educational programs for our customers with maybe co-marketing and co-distribution as well, common financial solutions together. So together, we'll be strong.

So if I summarize this, Elekta's multiple partnership is a strength to the business. And there's exciting things to come going forward. So now we will take a break. And when we come back, we will dive deeper into the expanding world of treatments of MR linacs. [Break]

Welcome back. Our next strategic pillar is driving adoption. And that is done differently depending on the market. In mature market, it's very much about increasing efficiency, but also about better outcome. And we have asked Dr. John Christodouleas to give the latest news from the MR-linac scene. And John is sharing his time between being an oncologist in Philadelphia and working for Elekta as the Head of Medical Affairs. Please, John, I know you have some fresh news for us.

Thank you, Cecilia. So it's my pleasure to give you a very brief update on our clinical development activities. As likely many of you know, the MR-Linac Consortium is a collaboration between clinicians on the front lines of care and Elekta and Philips with the purpose of defining best practices and evaluating best practices for MR-guided radiation therapy. And as you may have seen from our social media activity last week, we had our annual meeting last week in Amsterdam. And I think it's fair to say that this was our most successful event ever. It was our largest meeting. We had over 600 physicians, physicists, radiographers, RTTs participating, both online and in person. We had over 300 individuals join us in person for this event. It was a truly global event. We had 65 different cancer centers from 26 different countries represented at this conference. And while our -- we had an extra special focus this year on education and training, we still had top-notch research with over 100 scientific abstracts on both technical topics as well as clinical topics. And just to give you a little sense of the kinds of presentations we had at this consortium meeting last week, I want to describe three presentations, three abstracts that actually won awards, the best clinical abstract, the best technical abstract as well as the young investigator award. So the first abstract was by Dr. Jeremy De Leon here on the left side of our screen. Dr. De Leon is from St. Vincent's Hospital in Sydney, Australia. And he described their experience with sim-less prostate SBRT. And just to describe what that means. As you may know, in the conventional workflow in radiotherapy, usually when an oncologist decides to treat a patient, the very next step is to bring the patient back for an imaging session. That's the simulation scan, you're simulating the treatment, sometimes we call that the mapping session, right? Once we get those images, we import them into the software, and we can take a week or 2 to plan the radiotherapy and then we have to bring the patient back for that treatment. But what Dr. De Leon and colleagues realized was that with Unity, you're updating the plan to reflect the day's anatomy every time you see them. So that simulation plan that you create in the beginning and the traditional workflow is really just a rough draft. What they also realized was that all these patients that they're seeing in prostate cancer already have imaging, right? They're getting imaging as part of their diagnosis and that they can use that imaging to create a rough draft plan and so spare that patient that extra visit. So he can go straight to the machine. And that really helps the clinicians with throughput at the clinic level and really minimize the visit burden and travel burden of the patient. And you can imagine in regions of the world where distance to the cancer center is a major obstacle of care, this could be a very big deal. The second and third abstracts here are about utilizing the Elekta Unity in novel ways to identify parts of the tumors that may or may not be more or less radio sensitive. And the second abstract, the middle gentleman is Michael Dubec from the Christie Hospital in Manchester, England. He presented a project on using a novel imaging technique to identify the level of oxygen in different parts of the tumor because we know that oxygen level within the tumor is a surrogate for how sensitive or insensitive it is to radiation. So if you can see parts of the tumor that may or may not have enough oxygen, those parts might benefit from additional radiation therapy -- from additional dose. And that third abstract from Sunnybrook Hospital was looking at a novel way of using Elekta Unity to look at the white matter of the brain. So they were looking at the white matter tracts to see how they were disrupted as potentially a surrogate for whether a tumor is infiltrating in that area or not, okay? So that if there is filtration or regression of infiltration that might tell you how the disease is responding. Now the reason why I really wanted to tell you about these abstracts is because of all these ideas, sim-less prostate SBRT, oxygen enhanced imaging, tractography, these ideas were innovations that we, as the vendor, did not anticipate. This is the future of radiotherapy being defined by the clinics in real time and at a pace that I think we've never seen before in radiotherapy. So I like to say that Elekta Unity is an information-generating machine. And if you give really smart and hard working clinicians lots of valuable information, they're going to innovate. So speaking of really smart and really hard working, it's my pleasure to introduce our guest speaker today, Dr. Alison Tree. Dr. Tree is a Clinical Oncologist at the Royal Marsden Hospital in London. She's also an honorary faculty of the Institute of Cancer Research, where she has led some of the most impactful clinical research in prostate radiotherapy in the last 10 years. Dr. Tree?

Thank you very much. Well, good morning, everyone. It's a delight to be with you, and my job really is to share some of the enthusiasm and excitement there is amongst the clinical community about the Elekta Unity. So there we go. So radiation has been on a massive journey over the last few decades. So starting here with the first ever modern radiotherapy treatment. But ever since then, we've been innovating and changing the way we deliver radiation to improve outcomes for the men, women and children that we treat. So initially, we guided our radiation with pure x-ray beams, which was very crude but did a reasonable job. Then we innovated and included CT scans to improve the quality of the radiotherapy. We then developed intensity modulated radiotherapy, which helped to spare the healthy tissue around the prostate and reduce side effects. We then developed stereotactic body radiotherapy, or SBRT, which helps to give high doses to really difficult-to-control tumors. And then, of course, the pinnacle of all this innovation is the Elekta Unity, which we're now excited to be testing out and learning new things from. And in prostate cancer, which is what I spend most of my life treating, we've been on a journey over the last couple of decades. It's a fairly short innovation window really. So when I started training, we would treat prostate cancer every day, Monday to Friday, over 6.5 weeks. And that did a reasonably good job. It might control about 60% of prostate cancer 5 years later. Then we found out that if we lengthened the treatment, we made it over 7.5 weeks, we could cure more men. Obviously, they had to come for longer but it improved cure rates, which is good. We then innovated and this next tranche of trials combined two things, both shortening the radiotherapy course, which makes the treatment better for the man. He can get his treatment over and done with and get back to normal life and work sooner. But alongside that, we also innovated our technology. We incorporated IMRT. We incorporated some early forms of image guidance. And this further improved the cure rate. So we went up above 90% cancer control in prostate cancer for the first time. And then over the last decade, we've been shortening the treatment even more. So we want to go down to just five treatments in prostate cancer. And we've been testing that in the PACE trials. And that's -- we don't yet have the 5-year cancer control outcomes, but we anticipate that they will be at least as good as the 90% we've seen before. But concurrent with this story, we've also been dropping side effects. So initially, we might experience -- about 1/3 of men might experience some moderate or severe bowel side effects from the radiotherapy with these early trials. Just by improving technology using the same dose, we could drop that by more than half using IMRT and image guidance. And in the PACE trial, where we further innovate the technology, we can drop that down to below 5% of men experiencing what we call bowel bother. So better technology cures more patients with less side effects, and that's a key theme for us moving forward. And John's already alluded to the excitement we have at the moment about making our pathway more efficient. At the moment, when I tell a man he has prostate cancer and needs radiotherapy, he then wait several weeks to actually start that treatment. Can you imagine how stressful that is knowing you have cancer and your treatment hasn't yet started. So we want to try and shorten this pathway to improve outcome for patients and also to reduce anxiety. And that's why we think this simulation-free pathway is a realistic proposition within the next few years. We've got some work to do to make that applicable to all patients. But with the Unity, that actually becomes a vision that we can see. And if you don't have a Unity, obviously, most radiotherapy around the world is still delivered on a non-Unity machine, we know that the images we have are pretty poor. I've put on the screen here two images from a CT scan from one of our normal linear accelerators. And you can see they're blurry. This is actually a picture of the prostate, but you might not be able to see that because it's not very clear at all. And yet this is how we guide our radiotherapy day by day at the moment. And you might just be able to see here a little white dot. Can you see that? So that's a little piece of gold that we've implanted into the prostate to make up for our poor imaging. And this brings me on to the -- 1 of the first of 4 key advantages that we see to the Elekta Unity. So to put these little bits of gold into the prostate, we need to put that probe into the back passage of the patient and pass those three needles forward into the prostate. So this is okay, but it's not a very nice procedure. Men want to avoid it if they can. And with the Elekta Unity, we don't need it. And that's a key advantage. Many men come to me asking to have the Unity specifically to avoid this procedure. The second key advantage to the Unity is that we're doing much more clearly than ever before. So on the left-hand side is the image -- is a CT scan image, in the middle is the prostate, at the back is the rectum. On both sides, you've got the hipbones coming in. But you can see that the prostate is not very clearly seen. So if your -- the precision of your treatment relies on my ability to see the edge of the prostate, that's not going to be the most precise treatment. In contrast, on the image on the right, it's the same orientation. So the hips on the side, prostate in the middle. You can see very clearly the edge of the prostate. So very quickly, you can see that the imaging improves the precision of our treatment. The third key advantage to the Unity in this setting is that we monitor while we treat. So in our normal machines, you might take an image, you'd set the patient up to the right position. And then you turn your imaging off because we can't deliver the radiation at the same time as taking the image. So at the very moment you need the most precision, you turn off your imaging, which doesn't make any sense at all. But with the Elekta Unity, we can get high-quality [ scinti ] MRI images while we deliver the beam. So I know at the very moment, I need to deliver the dose, we can be seeing what we're doing, and if there is any movement, we can stop the beam and carry on when it's safe to do so. And then the fourth key advantage to the Unity is to change the dose whenever we need to. This, to me, is the most exciting part of this machine. So what we normally do is to create a plan for each patient, so it's one personalized plan per patient. But within that patient, from day to day, their anatomy will be shifting. So in this image, this is a CT scan. I've labeled where the prostate is, and behind, you have the rectum or back passage. And from that image in advance of the treatment, we create a perfect radiotherapy dose distribution for that anatomy, which is great. And if nothing ever moved inside us, that would be okay. But sadly, we know sometimes the men turn up for their first treatment. And I think you can probably all see that the prostate here has been squashed forward. The rectum of that passage is very extended. And so we have two options. We can either deliver what we know to be an inferior radiotherapy dose, which could increase side effects or we have to send the patient away without treatment that day. And what we've seen from using the Unity over the last 5 years is we have some patients that -- this is one of my patients where their bowel is totally different every day. It's in a different position. So we know one radiotherapy plan would do a really poor job for this man, decreases chance of cure and increases chance of side effects. And our data would indicate that the Unity can increase the dose to the tumor by up to 10%, and that I would expect to improve cure by a similar amount. The other thing that we've learned as Dr. Christodouleas was just alluding to is we've seen things we didn't understand before. So this machine has enabled us to learn more faster about what we do. So this is one of my patients. I've drawn around the prostate there. This is a side view of the prostate. The prostate is in red and the bladder with the bright urine, you can see above it. So we had five treatments in the Elekta Unity. And by the final treatment, I think you can get an impression just from that image that the prostate is swollen, right? We never knew this happened before until we could image every day with MRI. And in fact, if you look at the population of patients we've treated, the prostate swells by about up to 21%. That's a massive increase in volume, and that threatens our chance of curing the patient because if I take the prostate radiotherapy plan from the first day and apply it to the last day, I'm missing half of the prostate. And the other thing that the Unity allows us to do is to conceive fundamental changes, paradigm shift to the way we deliver radiotherapy. So what we normally do, as we've explained, we draw around the target prostate in this case, which I've drawn around in blue. And then we put up what we call a margin around it. This is a safety margin because we know things can change. Unfortunately, within that safety margin, there are some healthy tissues that aren't cancerous that don't really need to have radiotherapy. In this case, it's the bowel or rectum. At the moment, on our normal machines, we need this margin because the prostate can swell, prostate can move, prostate -- the patient can wiggle on the bed and the cancer can change. So we have no way around this. But now for the first time, we're starting to envision a world where we don't need that margin. We can spare all of that healthy tissue around the cancer and reduce the side effects. So where does the Unity enable us to go in prostate cancer? You can tell from the construction on my slide, I think we're on a journey. We've dropped down from 8 weeks to 4 weeks to 5 days. So the question is how low can we go and still cure prostate cancer. And the Unity allows us the ability to create these beautiful dose distributions on the days anatomy, which gives us the confidence to test really ambitious strategies moving forward. And one of those is the HERMES trial, which we're running at the Royal Marsden. In fact, we've nearly completed the recruitment. It's been a really popular trial. And in this trial, half of the patients get five treatments on Unity and half get two treatments on the Unity. And this is the first time in the world we've ever done two treatments with MR-guided adaptive radiotherapy. And since we started this trial, two other trials that are essentially the same have opened globally. I think that indicates how much excitement there is about this strategy going forward. And if you only get two chances to get it right, which machine do you want your treatment on? I think the problem with the other machines, the non-Unity machines is we rely on CT, which I've just shown you is suboptimal. You need to put gold seeds in for that added security. You need bigger margins and you've got no way out of accounting for this prostate swelling, which remains an issue for many of our patients. So I talked to all about prostate cancer, but I just wanted to mention that this is not just about prostate cancer. This machine perhaps has even more to gain in other tumor types. On these images, this loop, I'm showing you is a patient on the left whose cancer is growing outside of the red area. That's the high-dose radiation area we've designed before treatment. And you can see the white area growing outside is cancer is spreading outside of the area we are radiating. And because we can't adapt to that on our normal machines, that man would be at higher risk of the cancer returning. Actually, this patient was treated on a Unity in Canada. And so they did adapt. They had -- they saw this tumor change and changed the radiotherapy field accordingly. On the right is a different patient whose cancer is shrinking, so you can see the white area shrinking within the red line, and that's good. That means the cancer is responding. But what it does as it shrinks is it brings normal brain into the high-dose radiation area. It means that you're at risk of causing side effects from the treatment. And finally, this machine opens us up to new possibilities, biological targeting. We traditionally treat the whole prostate at the same dose because that's what we could do before. But now I can see the actual tumor, both on the left side, so you've got a -- if you can see that, there's a prostate in the middle and there's a darker area over to the left of the screen, and that's mirrored on the right-hand side. This is a diffusion-weighted imaging. So biologically telling us what's going on within the prostate. And now that we can see this, we can imagine new ways of treating prostate cancer where we put more dose with the tumor is and less dose in the rest of the prostate, where there's no or minimal cancer. And that's what we're testing in the current suite of trials called DESTINATION, where we'll change from our traditional model on the left, where we give the whole prostate a red-hot dose and move the approach on the right where we're giving a really hot dose to the tumor and dropping the dose to the rest of the normal-looking prostate to spare those normal tissues. So this is, I think, the future of radiotherapy, certainly in the prostate and applicable to all the tumor types as well. So if you were to imagine the perfect system for curing cancer with radiotherapy, you'd want to start the radiotherapy immediately with no waiting. We're working on that with our sim-free planning ideas. You want to see the cancer clearly during and before treatment. We can already do that on the Unity. You'd want to change the radiotherapy plan as often as the internal anatomy moves. We can do that now with adaptive radiotherapy and more innovations to come. We want to do all of this in as few treatments possible. Everyone wants to get their cancer treated, cured and get back to normal life. And finally, we want to do all of this with no side effects at all. We're getting better. We're not at zero yet, but we're going to get there. Thanks very much for listening.

Thank you. Thank you, Dr. Tree. So we'll take just a few minutes while we still have you here to ask you your thoughts about Comprehensive Motion Management. Obviously, we were at the MR-Linac Consortium meeting last week, and there was a lot of buzz generated. What are your initial impressions based on what you've heard? And just to acknowledge, we know that you haven't had that upgrade yet at the Marsden?

Yes. No, it's coming very soon, I hear. Yes, there's a massive amount of excitement within the community about the CMM strategy. We can now start to imagine these kind of ambitious visions for other tumor types and not just prostate and pelvic tumor types, but liver tumors, upper abdominal tumors, pancreatic cancers, where historically, we've not done the best job. I think the ability to track and gate is really key. That's important for those, but also in prostate cancer, what we see it's not so much movement with respiration obviously down in the pelvis, but we can see the prostate drifts sometimes as we're treating, and that's quite difficult to handle. But what this new strategy will enable us to do is to just tweak the plan as we go if the prostate is sinking as the man relaxes on the bed, and we can just make slight adjustments while we treat. And I think that's going to be critical for prostate.

Right and critical to do that quickly so that the treatment times don't expand. Exactly.

Yes, absolutely.

Great. So gating and true tracking, obviously, are sort of the headline innovations within this latest innovation. But there's a whole set of innovations that are coming up with this release. Are there other bits that intrigue you based on what you heard?

Yes, absolutely. Well, I think one of the key things that I've shown you is that it's -- the imaging is critical, right? That's why this machine is so different to everything else because of the MRI. But there are shades of MRI. We want to keep innovating with the MRI protocols, and we've worked with Elekta and several other of the MR-Linac Consortium sites to make sure that the images that come out of the Unity are perfect for each different tumor type in what need to be slightly different to visualize structures or different cancers and also to bring out that biological targeting we want to do. So some of that is coming out in this new release.

Yes. And of course, we're very grateful to you and everyone within the MR-Linac Consortium for working so closely together with us to help make sure that we have the most appropriate imaging sequences available to you. Great. Okay. Thank you. That's it. Thank you very much.

Thank you.

Thank you so much John and Dr. Tree for sharing your views and the latest news with us. And we're going to continue with drive adoption. And we talked about mature markets very much. And if we go to emerging market, focus is more on increasing the installed base and what Elekta has been doing here, our Chief Commercial Officer will walk us through. So please, Habib, welcome back on stage.

Thank you. Hello, everyone. Very pleased to be here with you today. Just so you remember, in June 2021, Elekta talked about this strategy, the emerging markets. And we talked about five main pillars or approaches. And here, we're going to tell you and discuss that Elekta walk the talks. The first one, which was improving the coverage and going local and having a local presence. And we see since that time, we gave access to more than 200 million people on the planet access to radiotherapy by installing more than 500 linac, including China in the emerging markets. And more than this, we went direct in five major countries with a midsized, I would say, population. We went direct in Egypt. We went direct in Thailand. We went direct in Indonesia, in Philippines, in Romania. We went direct as well in the neuro business in Turkey. And this is giving access and being locally present for more than 0.5 billion of the population worldwide. Second one, with the technology comes the human capital. And it's very important radiotherapy is how we can educate and train the human capital in these markets and sustain it, to sustain the solution. So since that time, we trained and educated more than 31,000 -- we provided more than 31,000 trainings and webinars, either like physically or virtually. Third pillar of this strategy is partnering with the ministries of health because they are key in order to drive the adoptions in the countries. And we see Elekta since that time are the major partner in the Ministry of Health in South Africa, in Egypt, in Morocco, even in India with the aims where we have the major, I would say, thought of developing radiotherapy in India. The fourth one is accelerating the transfer of technology, the transfer of know-how of radiotherapy from mature market to emerging market. And we partnered with many groups, operators, either in France, in Europe, to operate, transfer the knowledge, make the planning in Africa, in Rwanda, in Senegal, in Togo or from India to the emerging market in Kenya or as well from Singapore, Malaysia to India. So we have a successful partnership with these investors in these countries. The fourth one is -- the fifth one is developing the right product for siteability, serviceability, for comprehensive application for this market. And we have a lot of examples with the Harmony, with the brachytherapy that are adapted to the needs and the mix of cancer in these countries. So is this a short-term strategy for the ACCESS 2025? Even we are halfway, and we are well entrenched in order to deliver on the ACCESS 2025, we see that is as well a long-term and sustainable strategy because in these emerging markets with high demographics come high incidence of cancer. So this is done or designed and implemented to last and to be successful. So what it is for Elekta balance sheet, for Elekta revenue and profit? If we combine the pillars of strategy that we're talking about, for example, parting with the ministry of health or strengthening our partnership, this is accelerating our socket in the greenfields in these emerging markets. And we see that 60% of the revenue in these emerging markets coming from the solution. However, there is a double benefit as well. As we go direct with a local presence, we are building more on services on the existing installed base. So we're bringing more service offering on the existing installed base. With the greenfield new installed base as well, we are offering from day 1 comprehensive services, packages and more, we are offering software as a service. So there is a double benefit, double effect because there is a top line increase, but as well this acceleration, accretive margin increase with the services constituting 40% of the revenue. So we are having double benefit on the top line acceleration and on the bottom line with the margin. Thank you.

Thank you, Habib. And before we leave this strategic pillar and move to the last one, we have one important market that over the years has increased the installed base, but there is much more to come. I'm talking about China. Look at this.

Hello. Good morning. I'm Gong Anming, Head of Elekta China. Today, I'm very excited to share some up-to-date reflections regarding Chinese RT market with you. First, as the Chinese RT marketing benefits from [indiscernible], we have seen strong market growth and expect to maintain this strong growth going forward. As a part of the Fourteenth Five-Year Plan, Chinese government has implemented national and regional health care reforms with the goal of expanding high-quality medical care at provincial and county levels. Consequently, we have been involved in a significant number of [indiscernible] tenders over the past 6 months and achieved double-digit growth that means Elekta has been and it continues to be the market leader for RT in China. Our solutions exist in all the leading health care institutions differentiate ourselves as a primary RT provider as a market leader with over 11 players in China health market. We have still achieved more than 45% of linac market share in 14 national medical centers even during the pandemic. We completed the installations of Elekta Unity in top 3 RT centers and top 3 general hospitals in China Mainland. All 3 national neurosurgical centers have chosen Elekta neuro solutions. Not only that, a local team has also made a breakthrough to bring Elekta's neuro solutions to top conventional RT centers help us expand our neuro business outreach. We achieved 100% share of record in top 10 general hospitals and cancer centers as needed localized OS solution as office. Localization plays a vital role to business growth in China. I'd like to share our organization initiatives and the fruitful results. Since the last CMD, we have further strengthened our positions by localizing our entire linac TPS and MOSAIQ product portfolio in anticipation of changes to policy. Considering the shortage of qualified RT professionals is one of the most important bottlenecks in Chinese RT market. We have continued to invest in training and education of health care professionals, further support the growth of qualified RT professionals as the market grows. Even during the past 3 years, we have delivered training to more than 30,000 health care professionals by utilizing online or hybrid approaches. We will continue to educate oncologists, physicists, technicians on our best-in-class products and also to improve system quality for operating service, driving quality assurance with our customers through increased [indiscernible] by new offerings. Particularly in March, we announced a joint venture with Sinopharm to further improve access and the quality of care as the market grows. The joint venture will deepen our market access by expanding our service and the sales coverage as well as enabling us to more solutions of capital financing. In addition to our leading informatics solutions offer, we have a tradition of using the best software partners to always cater to local needs and provide optimal solutions for our customers. Our customers will continue to benefit from the best combination of Elekta solutions and third-party applications going forward within a promising product pipeline with high interest for broad company growth in China market. It is expected to drive all the competition ramp-up from the [ COVID ] already. We also expect to see continued health development from local competitors in China. I'm confident that our split of localizing our product portfolio, supporting China RT market and the continued partnership with Chinese ecosystem players at the present today. I am very sure that we will maintain our growth trajectory. Thanks for your time. See you later.

That was our Head of China, Anming Gong. And now the last strategic pillar of today is being the lifetime companion. And that's very much about working with our customers and raising the already high service quality and raising customer satisfaction even further. And Anish Patankar, you're welcome on the scene. You are our Head of Software. Can you please elaborate on what we have done in this area lately?

Absolutely. So I'm going to talk a little bit about Software as a Service and as it relates to Elekta ONE. And coming from the Silicon Valley, these are exciting times for software in the health care space. So now how has Elekta or any other medical device companies sold software traditionally? Customer buys a license for the software. Elekta will go and deploy the software on a server on the customer premises. Customer will then use the software. And then at a certain point in time, the license for the software is renewed. The whole cycle repeats itself. Now a couple of years ago, to be really a modern software company, Elekta changed that model. We started offering our informatics software as a service, meaning the software is hosted in the cloud and the customer pays a subscription fee for the software every year. And I'm happy to state that since we took that first software order as a SaaS for our informatics solution, last year, 15% of all of our informatics software orders were for SaaS. And building on this initial success, we're going to -- or we plan to offer Elekta ONE primarily as Software as a Service. So what are the benefits for our customers with this SaaS commercial model? As we showed you the product strategy for Elekta ONE, there's an underlying Elekta platform that goes with every product for Elekta ONE. What this means is that Elekta can offer different software packages to our customers and customers can choose the right level of functionality that works for their workflow. Secondly, if customers want to have all the solutions from Elekta as part of Elekta ONE, fantastic. But if they have 1 or 2 applications from other vendors, we are committed to making sure that the Elekta ONE applications seamlessly interoperate with those applications as well. Our commitment to the open ecosystem of software continues. And most importantly for our customers with the streamlined workflow in Elekta ONE with smart view, smart flow, auto planning, our aim is to reduce the cost of every treatment in radiotherapy by 50%. That's a big ambition we are moving towards. What does this mean commercially for our customers? Every software package will have clear pricing based on patient volumes. There will be a single service agreement. Customers do not have to plan in advance if they need so many X number of licenses for physicians, Y number of licenses for dosimetry and so on. We have unlimited licenses. They can choose to scale up and down based on how they're evolving the needs of the clinic, if they're expanding, if they're getting acquired, it's seamlessly taken care of. The other thing is upgrades. They are baked into the subscription itself. There's no upgrade fees that the customers have to pay later on. It's all taken care of as part of the subscription. And most importantly, for the CIOs and the IT people at the hospital, they don't have the burden of procuring hardware, upgrading the operating systems, making sure the latest security patches are installed. Elekta takes care of all of that in the background, allowing the IT people, the CIOs, to focus on serving their stakeholders, the clinicians and patients. Now what does all of this focus on SaaS mean for Elekta in terms of efficiencies and costs, right? Most importantly, SaaS packages allows us to deliver a lot more value and a lot more product at the customer side. And this allows us to capture, on average, 80% more revenue per SaaS customer compared to the traditional license customer, and that's big. Secondly, SaaS allows Elekta and the customer to be true lifetime companions. We have had zero attrition to date for any customer adopting SaaS from Elekta. On the efficiency side, since we have the Elekta ONE platform, customers can seamlessly go from one software package to a higher-level, higher-functionality package. It's easy for us to add more solutions on top of the platform. It's a simple amendment to the SaaS contract they already have. The service contract continues to cover everything that they have and a single invoice continues to go to the customer. So very seamless operating model, allowing them to choose the right functionality level based on where they are in their clinical needs. The other thing, of course, is for us to have the conversation with the customer about moving to SaaS, every touch point we have with the customer, be it a contract renewal, be it a conversation about adding more products from Elekta ONE or be it just a curiosity about the cloud, every such touch point for the customer is an event for us to have that conversation that SaaS is that going to work for them or not. On the cost side, we are partnered with Microsoft Azure Cloud to deliver the SaaS solution to our customers. With that we instantly get a global footprint, delivering the solution worldwide. We get best-in-class product and cybersecurity from Microsoft and allows us to focus on building the applications of Elekta ONE, improving oncology care rather than investing in building the infrastructure for providing the cloud. And then having control of this infrastructure, having full insight into the customer environment, we can proactively and rapidly respond to any configuration needs for the customer, any support needs for the customer, really boosting customer satisfaction and, at the same time, keeping the cost of service for Elekta incredibly low. So really, really interesting development for SaaS, for us and for our customers. The excitement for the SaaS model in our customers is truly global, both in mature markets and in our growth markets. Here's a great testimonial from HealthCare Global Enterprises and Elekta, a huge hospital chain, 24 locations across the length and breadth of the country. 270-plus oncologists working there, treating 200,000 patients every year. And if you look at the quote from Dr. Shantanu, they have really implemented our informatics solutions comprehensively, medical oncology and radiation oncology as Software as a Service, and they have standardized their workflow, achieved great levels of streamlined workflows, allowing them to focus on what matters most, treating patients effectively. And this excitement is translating not only to not only to growth markets, but also to mature markets. And please don't take my word. See it for yourself in the video from our mature market customers. [Presentation]

Thank you, Anish, for explaining the SaaS model and Elekta ONE for us. In October 2022, we increased our value-added service as we launched Elekta Care 360. This was support and identify need at our customer. And let us now hear what Fox Chase Cancer Center says about this solution. Please. [Presentation]

So Fox Chase is an American company. And we ruled out the Elekta Care 360 in the U.S. So let us hear some more about the U.S. market. And I welcome back Carlos Castilleja, the Head of Americas.

Thank you, Cecilia, for having me.

We just heard Christine and [ Tee ] talking about the productivity gains from Elekta Care 360. I would assume that productivity is something that several customers are wanting and especially in the U.S. market. What is your view on that?

Yes. I would obviously say that productivity is top of mind for the majority of the cancer centers right now. I mean if you, in fact, look at 50% of the health systems are reporting some kind of financial challenges as well as we know that staffing is up by at least 5x. So these challenges are creating the need for U.S. cancer centers to really look at opportunities around operational efficiency and our solution set with -- you're talking Elekta Care 360, the SaaS solutions and even Elekta ONE as you heard a little bit today offer these activities.

And do you have some customer examples?

Yes, we do. Actually, I mean -- well, we heard recently just with Fox Chase and Christine, right, with the Elekta Care 360 commissioning services saving them weeks on in on commissioning time so they can be up in treating patients faster. I could mention the centers like Moffitt Cancer Center, Cooper MD Anderson, also taking advantage and looking for pursuit of operational efficiencies using MOSAIQ and the SaaS model as well. So I would use some of these as some of the examples, but there's many more.

Sure. And what other market dynamics do you face in the U.S. market?

Yes, market dynamics in the U.S. I would first want to start by recognizing that therapeutic therapies have decreased mortalities by around 3%. And this is absolutely great for those dealing with cancer. But however, there is still a strong demand and adoption for advanced therapies. So with the challenges that we just talked about with productivity, I would also say that U.S. customers are really looking for differentiated advanced therapies. And that's where our portfolio is really today, Cecilia, setting the market -- competitive market edge with our advanced therapies and portfolio of -- suite of portfolios.

And I'm sure you have some examples here.

Of course, I do. Absolutely. You can talk about -- Cleveland Clinic is a long-time Gamma Knife user. Most recently and even this week, I believe, they're going live or starting the installation at least with the new Esprit, looking -- they were looking to take some competitive edge as well as you can look at Robert Wood Johnson up in the Northeast corridor of the U.S. where they fully adopted the adaptive story with buying 3 Unities within that health center. And then lastly, there's Atrium Health, which is a key strategic competitive account. So again, a competitive account, but yet they've decided to move forward with Elekta Brachy Studio.

Great. So what do you say are the critical factors for success in the U.S. going forward?

Critical factors for the U.S. going forward. Interesting question. But ultimately, there's three things I see that are really key for us moving forward and really putting a strong trajectory in our growth. First of all, I talked about two of them, right? First is the productivity. We need to continue to solve our challenges for our customers. And that's with our solutions that we mentioned earlier, Elekta Care 360, SaaS and Elekta ONE as an example. But at the same time, we need to drive adoption in those differentiated advanced therapies. That's where, again, we have the competitive edge. And so you talk about MR-linac adoption, you're talking about CT adaptive linac, create new opportunities for Gamma Knife, create new opportunities for Brachy. And then lastly, I would say that we need to accelerate our market approach. And one of those ways of approaching is going to be with partnering with and leveraging our partnerships with like the imaging partners and looking at those opportunities and looking where we can take advantage. But also I'd say that we are going to grow new competitive sites as well as -- to say we're going to grow new sites as well as competitive flips. And we'll do that by strategically selling and as well as having sales hunters actively going after competitive sites and national accounts. And with those three areas, I believe that we'll continue to have a strong trajectory over the years, and we'll also be able to become a stronger partner with our companions and deliver in best cancer care.

Well, thank you so much, Carlos, for your view on the U.S. market.

Well, now we have gone through all four strategic pillars, and we made room for your questions. And we will take questions from our audience here in Crawley as well as for those of you watching us online. And for those online, please use the telephone number that you have received to sign up for questions. And we will be right back. So we have several listeners queuing up for questions. And I'm just going to ask you to ask only two questions. And please, the first question, then let us answer that before you do the second question. But let's start on the floor here. David, can you -- we can take your questions, please.

David Adlington, JPMorgan. Just a question on the R&D spend. Obviously, that's been quite volatile to what has been recognized on the P&L. It was 10% historically, 8% last year. I think peak was 12%. I know it's going to be going up from here. Maybe just give us some help in terms of how much it could go up. Could it go by about 12% level or possibly even higher?

So this will be a question for our CFO, Tobias?

Yes. Hello, David, and thanks for the question. I think what we've shown here today actually was that we expect the gross R&D to decline and continue to do so over this period while actually, you will see the net R&D to increase following the amortization. And you will see that gap to narrow. So that is actually what you will see here over this time frame.

Any help in terms of when and where that might peak?

Sorry?

Any help in terms of when and where that might peak in terms of percentage of sales?

In terms of net or gross R&D?

Where the net R&D in terms of percentage of sales comes out on the P&L?

I think in terms of the gross R&D, we have already peaked in terms of the -- as a percentage of sales. And you will see in absolute terms that it's fairly stable, maybe a slight uptick now given the severe inflation that we're on. In terms of the net R&D, that will go up and narrow it. And you will see that closing up during this time period.

Okay. And then second question, just in terms of the cost per treatment, looking at it down by 50%. Just wondered what the key source of that cost savings is going to be. Is it in the planning side, somewhere else? And how do you translate that into additional revenues or value for Elekta?

Maybe Maurits?

Yes. I'm happy to take that question. I think there are a few factors there. First of all, it's driven by automation. Auto planning is one of that. Protocolization also drives automation. So yes, essentially, we will be able to treat more patients on a single linac. But the opportunity for Elekta is to sell these new capabilities that enable that automation into the installed base and our customers. So yes, we will lower the cost for clinicians and for our customers. But we'll do that through upselling the capabilities that are required to do that.

And is that a recurring revenue stream? Or is that a stream that you recognize upfront?

Depends on what we bring to the market. But as Anish pointed out, our intention with Elekta ONE is to lead with subscription. So we will see a number of elements being brought to market through subscription. But we still have, of course, hardware to sell as well that typically will not be sold that way.

Thank you. And the next caller will be from a listener. Please, Kristofer Liljeberg, Carnegie, the line is yours.

Hope you could hear me. Sorry, I'm not there. So my first question if you could update me on your development work on the new linac platform. The reason I'm asking is that you said here during the presentation that you're not planning to come out with a completely new product or CT adaptive treatment.

Okay. It's Maurits.

Yes. Yes. I'm more happy to take that one. So a year ago, I think it was the Capital Markets Day at [indiscernible], we indicated that we will bring a CT adaptive linac solution within the next 3 years. But we didn't say how we are going to do it. And today, we explain how we bring it to the market. And as I indicated, we see adaptive as a capability and not as a system. And the different capabilities, the online adaptation, the integrated workflow, the better image quality, see them as building blocks that we bring to the markets in the form of new capabilities or new systems as well, but also as upgrade. So don't expect a new adaptive linac. We will basically bring adaptive treatments and capabilities as new systems but also as upgrades to our installed base. So that's our approach.

But does this mean that you're not planning to launch a new platform because I thought it was also a COGS reduction initiative involved in that.

When it's concerns adaptive, this is the approach. Now there are more things we do when it concerns cost reduction, integration of elements. We also look at gantry structures, how we can simplify that. Some of them will be introduced through upgradable functionality. Some of them will also be under the hood. So the customer will not see it, but it's a cost reduction for Elekta.

Yes, I can maybe add into that, Kristofer, that the COGS reduction that you will see here that is not dependent on a new platform. We do it with the current product offering that we have.

And from a marketing and pricing point of view, you don't think it's important to have a completely new platform, new brand name, et cetera, for a new linac?

So I mean we modeled that as well. And we believe the combination of bringing new capabilities to the market, and of course, we will put a nice package around that with the upgrade packages actually will optimize the value we bring to the market, but also to our customers. And we believe it's actually a very -- and we talked about it quite a bit with some customers as well. It's a very attractive approach. So instead of selling one new linac with these unique capabilities, we basically say, we can elevate your whole clinic to the latest level with new linacs but also by upgrading your existing. And it's very appealing because they really want to elevate the standard of treatment and not be dependent on a single linac, but be able to do these new treatments on all the linacs. So it resonates very well with our customers.

Okay. One more question, and that's -- you have, of course, this large backlog you could sell from both probably this year and next year. But could you also comment on the new order demand?

Gustaf, please?

Yes. I can start. Hi, Kristofer. We see -- I mean, as I mentioned a bit in the beginning that the demand for radiotherapy is there because during COVID, it was not maybe the area that many health care systems focused on. It was other areas. But the cancer care backlog has been -- being built up now during the last couple of years. So we foresee good demand across the geographies into next year. I think we had some very big orders, of course, in last year in Europe, particularly. I don't think they will come back in the same way as we saw there. But still in other parts of Europe, Middle East, Africa, China, of course, ASEAN countries, we see good demand. As well in the U.S., it's more of a market share gain market for Elekta. And with what Carlos talked about, it is really about breaking into new accounts and grow with the larger systems in the U.S. So we foresee a good and healthy demand into next year. And then, of course, it's about bringing the backlog to the customers and install new machines to drive the revenue growth going forward.

Thank you, Kristofer. And then we'll take a question from the audience here. Please, Lisa Clive from Bernstein.

Question about reimbursement for Unity. Around the launch, there was a lot of talk about differentiated reimbursement and also a need to change the coding towards a sort of by cancer type way of reimbursing. Does Unity need separate reimbursement in order to reach its full potential? My understanding is the units that you've placed have been mainly in academic centers. They can use their research budgets to justify the much higher purchase price. So I guess I'll ask this question in two parts. Can you just discuss it in context of the relatively new bundled reimbursement system in the U.S. and then very broad brush second part, how it fits in with reimbursement outside the U.S?

So let's start with our CEO, and then maybe John also can add on that.

Yes. So I'll start. So of course, reimbursement is extremely important around the world for what we do. But it's also important to say for radiotherapy, we have good reimbursement levels in many markets. For Unity, you can use those codes already now and have a very profitable system in most markets. But of course, we see this benefit that Dr. Tree talked about, the value, the improved outcomes that will come to also -- to cater for higher reimbursement levels. So we're working on that iterative process. And we're focusing a lot on the U.S., of course, because it's the biggest health care market in the world. And I think, John, you can talk a bit more about, I mean, what we're doing and so on.

Yes, we're working very closely with the professional society in North America, ASTRO, which you may be familiar with, to make sure that we ensure that our users, clinicians have fair and adequate and also stable reimbursement. And what I would say in our largest market, in the United States, we do have adaptive planning codes or replanning codes. And -- but what we don't have is MR-specific codes yet. Of course, it just came out. And this is a very lengthy process. So we want to make sure that the reimbursement that is currently enjoyed by our clinicians is stable over the long term, which is why we're working with the professional societies to do that. And then you -- on the second part, if I just might add, you talked about the bundled payment schemes that are coming out. Well, in my view, the Unity is sort of the perfect system, right, because if you're trying to lower cost, the first thing that you'd want to do is really drive hypofractionation and automation, right? And it's -- that tool has been designed for both of those things because all the imaging enables automation because that's the information you use to drive automation. And of course, the increased precision enables hypofractionation. So right now, I think we are positioned to flourish in the current market and should bundle payments arise in the U.S. market, we're very well positioned as well.

I think it's interesting to hear the different time aspect from the capital market and in the radiotherapy just came out from 2018. And maybe the capital market has another -- just came out for aspects on the timing. Did you have another question?

And then just outside the U.S., you obviously deal with a whole host of reimbursement systems. So just commentary on that would be helpful.

Yes. I mean I think our strategy there, of course, we want 212 countries to have fair and adequate and stable reimbursement for MR-guided therapy but we focus on the largest markets China, France, Germany, the U.K. And every one of those has its own problem and challenge, right? And so we -- again, just those three pillars, fair and adequate reimbursement and stable reimbursement. And we have a team, both at the corporate level, but also in the local environments working with the professional societies to move -- and the agency -- the appropriate agencies to move that ball forward.

Thank you. And we have another question on the floor, please.

Rickard Anderkrans from Handelsbanken. So first one, I believe at the last CMD, you mentioned that around 50% of new orders came from emerging markets. How has that developed? And should we interpret it that roughly 50% of the current order backlog comes from emerging markets? Or could you add some flavor to that?

So I think it's a question for maybe Habib.

Yes. I mean we're growing in the emerging markets, and we are accelerating as well the backlog transfer. I think during COVID, there have been kind of some disruptions in the supply chain globally. But actually, we have a strong backlog, which is transferring. And as well, we are gaining shares in many markets there.

Thank you, Rickard. Did you have another question?

Yes, yes. Just a quick follow-up. So can you comment on the share of the group backlog for emerging markets just to get a sense of...

Gustaf?

I think it's been fairly stable over these couple of years. I mean we've seen quite a volatile development in some of the emerging markets. I mean, China was down initially of COVID and then it came back up dramatically, I would say, in December, November time frame. But as a share of total, I think, is fairly flat compared to what we saw 2 years ago. Going forward, I mean, I expect those, as I mentioned in my section, emerging markets to grow faster. And the good thing is that greenfield growth comes also with the service contract that Habib spoke about previously. And what we start to see is that with that scale and debt services and software installations, the profitability of emerging markets starts to develop very nicely in that backlog.

All right. And a question on Elekta ONE as well. So what share of the customer base do you target will adopt Elekta ONE over time? And how quickly do you think that can be achieved just to get a sense of the magnitude.

Yes, I would let the Anish to answer that at least first.

So Elekta ONE, I mean, we target everybody, right? I mean there's no reason to say it's only for these customers or another set of customers. The idea is, of course, that existing customers of our systems today be it the planning system or the informatics systems, they are all targets for Elekta ONE. We made a statement that our current MOSAIQ, the informatics system continues to be the backbone. So there's no loss of functionality for any of our customers. And we provide all the benefits that we outlined in detail, and we intend to offer it as a service. So the target is everybody who has a linac, who's in radiotherapy and also outside of radiotherapy. It's also -- it also has solutions for medical oncology for patient engagement and so on. So it's really a comprehensive suite of solutions integrated and offered by Elekta.

All right. So you're expecting 100% penetration over time then? Or just -- just to get a sense of the ambition.

The ambition, yes, of course, right? The ambition is definitely we take it to everybody. The uptick, of course, will be gradual over time.

Okay. And the next question will be from the webcast. Please, Veronika Dubajova from Citi. The line is yours.

Thank you, Cecilia. And thank you for the event today. I hope you hear me okay. And apologies I can't be there in person. Maybe I can just start with thinking about the backlog and sort of single customer and regional risk that you see in there. Gustaf, I don't know if you're able to comment on some of the recent news around GenesisCare, but also just give us some reassurance in terms of when you look at the backlog at, let's say, the top 5 customers, what proportion of that do they account for?

So let our CEO answer that.

Yes. So let me start. Now I think there are lots of questions on GenesisCare at the moment. They're going through a Chapter 11 process in the U.S. And they have two parts of their business, is U.S. and then rest of the world. And it's a long-time partner for us. So we try to support them throughout this process they're in right now. And we look forward to continue to supply GenesisCare around the world with linacs and all our product suites going forward. But it's a bit early to say exactly what consequences on backlog and so on will be. If you look at the top 5 customers, I think GenesisCare is a very big one. Most of the other customers we're having that top 10 list is significantly smaller, I would say. And overall, on the backlog, we go through it every quarter, development of the customers and so on, and we have a very healthy backlog of this more than SEK 40 billion that we will install and deliver to our customers over the next 3 years. On the service side, it's right, 50% of our backlog. And those service contracts is also often CPI adjusted, so we continue to adjust those prices to protect margins going forward as well. So I see limited risk for our order backlog. It is in good shape.

That's very clear. And then maybe just a follow-up on the bundled payment model in the U.S. And if you're hearing anything new about whether this will be resurrected and what the time line might look like for implementation?

Yes. I can -- I'll take that one. I mean I think it's a simple answer. Unfortunately, it's still on hold. There's been conversations that are ongoing. There's obviously continued changes throughout the normal CMS process of doing evaluation of the codes. But at this point, it's been, what I would say, definitely kind of on hold, so unfortunately.

But you're not expecting it to kind of come back anytime soon. Is that fair?

I mean it's hard to say. I mean, ultimately, it's a reiterated process that continues through the cycle and they could add things into that -- into each of those cycles. We just don't know. It's -- we still continue to work with the agencies and industry leaders and we continue to go forward, but I couldn't speculate on when and how it would go.

But we are prepared.

We are prepared and still quite satisfied with what's out there today.

Thank you, Veronika. Did we have another question? Yes, here in the audience?

Mattias Vadsten from SEB. You talked about it in the presentation, but any further color on the differences today versus in the past in terms of Elekta in the aftermarket context? Do you simply have better capabilities today and solutions to address the aftermarket? Or is there also an internal focus to be more aggressive to capture this potential? And two, if you could provide any assessment in terms of the aftermarket and hardware sales in context to the 7% midterm sales growth target, that would be interesting as well.

Yes, please.

I will start. Aftermarket is and has always been important for Elekta. So it is our installed base. I referred it to the biggest asset we have because we can put new innovation on top of that installed base. That's difficult for other vendors to do if you're a pure-play software company. I think what Maurits presented, how we can bring the installed base to becoming adaptive, is a huge aftermarket opportunity. What Anish talked about with Elekta ONE, bringing that to glue together the whole radiotherapy department together with the imaging department, also huge aftermarket opportunity. It's also good from a shareholder perspective because it is driving better margins and recurring business to increase the stability of our revenue streams across the periods. So I think all of this is a big part of our focus, and you heard us talking about it. It's also part of what Habib talked about going into new markets. So we have physical presence in places like Philippines, Thailand, Indonesia because that drives service growth, it drives aftermarket opportunity and also this close customer relationship that you get from the aftermarket. To quantify it is quite difficult. But I mean, it should be a growth driver, quite a stable growth driver for Elekta and big part of what Tobias talked about in our margin expansion over the next 2 years.

My next one is on price increases. If you could spend some time to talk about what the price environment has been like over the past 5, 10 years prior to the pandemic? And if you could help us in any quantification or discussion around the magnitude of price increases in realized term because that's difficult to assess.

Thank you, Mattias. We'll take Gustaf again.

Absolutely. So I'll just kick off because I talked to many of you and many online about the price development over the years. And historically, I mean, in medtech, you've seen -- you launch a product, you got the price increase and then over time, the cycle, it went down with a couple of percent per year. It was kind of an S curve. Today, in a high inflation environment, it's not the same. So I mean all medtech players have then increased price working with that. We have realized around 3% to 5% since the inflation started. Our ambition is to drive that through innovation, but also through price increases because we have the inflation on our material costs. I think going forward, I think we primarily will increase prices with new innovation because that is when you bring value to the customer and they accept price increases. So that's still -- but over the last 1, 1.5 years, we have raised prices to offset inflation and also adjusted our service contracts linked to the indexes we have in them. So I think that's a bit of the background. And maybe Habib...

Yes. I mean our focus on prices didn't start like 1 year ago with the inflation, started 3 years ago, 3, 4 years ago, where we started building very robust structure of value-based model pricing and all the infrastructure of IT, of the analytics and as well of having the culture of pricing across organization so -- which allow us to react very quickly to inflation. And we can see that when we took the mix of regions, the mix of products, we have accretion of around 3.9% to 5% that we start seeing it as a revenue and as a margin on the revenue. So yes, it allows us to react very quickly to the inflation, and we see it on the results.

And I can just add on that. And so actually, what we see on the order intake for like-for-like products is that we have turned this to actually be an erosion flattish. And now we see that, yes, what you mentioned here, Habib, the positive development for prices, which then later on, towards the end of this year and into next, will start to materialize in the P&L in terms of revenue.

Thank you, Mattias. See we have another question from the audience here. Yes, please.

So the typical 2 questions. It's Richard Gordon from Highclere. The first one is just my understanding of the Unity product that is much larger than a traditional linac. So you can't just replace one with the other and often requires sort of new build space or incremental space at the hospitals. So just wondering, to what extent does that potentially slow down the take-up of Unity because it's just so much larger?

Yes, John, please.

Yes. So I wouldn't say that it's so much larger. It does require a deeper pit than the conventional linear accelerator. But I think that, that's a challenge that actually we've been getting better at managing. The bigger issue for us, certainly in the beginning, was getting the magnet into the departments. And like anything else, with innovations, we've been able to do that better and better and more cheaply. So I think over time, obviously, centers are building new spaces. They're seeing the future with us. So they're building spaces that are more easily accessible and appropriate for multiple MR-Linacs actually, and we are getting better at figuring out how to get those units into place with the least amount of disruption.

Yes. And I'd add to that -- a little bit of addition to that is I think, again, speaking more of the Americas, but getting in front of that with the strategic planning with these health systems and having these conversations is key where it's not only us, but obviously, our competitors are having conversations and sharing. So they're building larger vaults and accommodating for what they may not know exactly they will be delivering. Of course, we want it to be a Unity and -- but getting in front of it. And at the same time, I echo the word, it's not necessarily a challenge. It's something that needs to overcome, but it would happen with other products as well.

Yes. And one thing to add. I mean Unity, as referred to, is becoming more standard of care. So it's becoming a part of radiotherapy. So when our sites plan, think about it, they always have part of the discussion about the MR-guided radiation therapy, and they think about the vaults. And then we have had a dramatic learning curve, also down here in Crawley, about how to install faster, bring up the patient volumes as quickly as possible, workflow, software to enable that to truly be a clinical and very profitable system for our customers. And bringing down for the patients from weeks and weeks into a 1-week treatment is just fantastic. And I think that will also be a big part of the growth journey for Unity going forward.

Great. And the second one, and I apologize if I misheard this, but I think there was a comment earlier that the Elekta machines were using 40% less energy than competitive products. So I just wanted to check if I heard that right. And if that is the case, how is that achieved? Because it sounds like quite a competitive advantage.

Yes. And I think this is one of the hidden gems I think we had, and we start to actually communicate more about it because it's a bit technical how we get that. It's the whole design of the beam line and how we control that beam line. But yes, our energy consumption is substantially lower. Now energy prices has come down a little bit, but especially at the peak half a year ago when electricity was so expensive, we were talking about like tens of thousands a year in savings on an energy bill. So that's big, yes.

Well, thank you. It's time to wrap this up. Thank you all for participating here today in Elekta's Capital Markets Day 2023. And all the materials, the PowerPoint and the recording of the webcast will be available on the webcast after this. So Gustaf, may I ask you to summarize what we have been discussing here today? What are the key takeaways?

Absolutely. So I'm happy to summarize the day. So first of all, thank you so much for listening in to our Capital Markets Day. We started about -- talking about the first 2 years, the first half time of ACCESS 2025, where Elekta delivered growth under very challenging circumstances. We also talked about fantastic innovations. We talked about the launch of Elekta ONE and what it can do for our customers and their patients, more personalization with less effort. We also had a fantastic speech from Dr. Tree, talking about what MR-guided radiation therapy can do for patients. And I'm really looking forward to the second half of ACCESS 2025 to bring the fantastic momentum and all the investments we have been making over the last 2 years into the second half and continue to drive value for our customers, their patients, but of course, also our shareholders. So thank you for joining us.