Embla Medical hf. (EMBLA) Earnings Call Transcript & Summary

Good morning, and welcome, everybody. Welcome to Össur Capital Markets Day. My name is Niels Jacobsen. I'm Chairman of Össur. I'm CEO of William Demant Invest. And that's the reason for my presence here today. William Demant Invest have invested in Össur since 2004, and the company and the profile and purpose align well with our investment philosophy of owning significant shares in medical device companies that are operating in markets with sustainable favorable growth dynamics. And as you probably know, William Demant Invest is an evergreen investor, meaning that we own our companies on a long-term basis, and we operate our companies not in a way for selling them again. We really think that having this long-term perspective and running the companies in a long-term perspective makes a difference compared to how we see private equity run companies with a view to sale as the main purpose. Over the last 2 decades, Össur have grown consistently through organic growth and acquisitions. The company continues to mature and develop its business model with a goal of improving the mobility of more individuals. The business environment has been challenging in recent years, and several factors have impacted growth, which has been lower than we expect for Össur. However, the business has also been resilient and is very well positioned to take advantage of opportunities in this industry. After leading Össur successfully for 26 years, Jon Sigurdsson stepped down last year, and Sveinn Sölvason took over as CEO. And the new executive team is consisting of both new members and individuals that have been with the company in a long tenure. Sveinn and his team will today present their future vision for the company, and I'm confident that the strategic focus that will be presented will support continued growth of Össur. And with these closing comments, I will hand over to Sveinn. Thank you.

Welcome to Össur's Capital Markets Day. It's fantastic to be here with all of you today. It's -- we appreciate that greatly that you take time out of your busy schedules to be with us for the next 4 hours. In the room, we have people that have followed Össur for a long time and have been investors in Össur for a long time and also people that are newer to the case. We're also broadcasting this live. We have also a virtual audience. Welcome to those of you who are listening also. And over the next 4 hours, we will go through our strategy and prioritization over the next couple of years. And here, you have the agenda for the next, yes, 4 hours. We have also Fleur Jong with us, who is one of our Össur ambassadors. She will give us a little break from discussing strategy and talk about her -- what she is doing and the amazing things that she is doing. And she is actually the world record holder in long jump for Paralympians and also 100-meter run. And her world record is 6.30, isn't that right? 6.34. And this stage is, I think, 6 meters. So that just puts it in a little bit into perspective. And she is truly a good example of what it means to live life without limitations. So thanks for being with us here today, Fleur. This is a team that will present here today. This is the Össur executive team. And we did change this to a structure or how we manage the business in quarter 3 last year because ultimately, we're in the business of providing solutions for mobility challenges. And these mobility challenges are the same everywhere in the world. But patient journeys, competitive dynamics and how solutions are paid for differs. So we need a structure that allows for flexibility to apply what is relevant in each and every market. And also -- and so Ólafur is here, and he will present -- is responsible for the commercial framework or the growth framework that is executed in the regions. Gudjón is leading EMEA and APAC, and Christian, Americas. And then we have the functional leaders, Egill on manufacturing and operations; Hildur, R&D; Margrét on people, strategy and sustainability; and Arna on finance. This is a team that has been with us for a long time and has a long tenure in the industry. So what I was going to cover here in this opening session is, first and foremost, go through the main messages, what we would like you to take away from this program today. Then a few slides on how Össur looks like now, the markets we compete and what has happened since the last Capital Markets Day. And then we look forward and talk about our strategic priorities and then, ultimately, what that means for you in terms of how we intend to grow the business. So the main messages that we hope that you will take away from this program is, first and foremost, that Össur is well positioned in the market that provides products and services to people with mostly a chronic mobility challenge. We're presenting our new strategy Growth'27, which is a combination of priorities that have been successful for the company in the past but also new priorities. But most importantly, it presents how we will be successful in operating in a whole value chain that, again, mostly serves people with a chronic mobility challenge, everything from product to patients. And it is about continued growth, growth because we have strong opportunities in our core markets, growth because we are now have an opportunity to capture more value of each mobility solution that is created and growth because there's still an opportunity to drive consolidation in the overall mobility market. And our objective is to accelerate organic growth. We're going to continue to execute on our Bracing Simplified strategy. Christian will talk about that. And acquisitions will also continue to be a theme. We still see opportunities to selective acquisitions to strengthen our execution in our markets. We're going to also continue to focus on our foundational pillars: sustainability, scalability and our people. And then we're also providing better transparency on our sales segmentation that is more in line with how we think about the business going forward. And that is another major topic that our business mix has changed over the last couple of years where we have divested part of our bracing business, invested in strong assets on the prosthetic side and strong companies on the patient care side. So now 80% of our business is in providing solutions for chronic mobility. So these will be the main messages, and I'll repeat that at the end of the program. And we'll -- this is what we're going to spend the time and going through today. But now just a few slides on how Össur -- how our business looks like today. Our vision is to enable life without limitations, and we do that by improving people's mobility. And this is a key point that we are in the business of supplying products and service to people that have a lifetime mobility challenge of some sort. And we're going to be referring a lot to the concept of chronic, and we refer to the people that use our products as patients. But you're going to look at Fleur later, and when you look at Fleur, the last thing you think is that she is a patients, and we -- patient. And we talked about this with her yesterday, and she had a good answer and said that, "Yes, initially, when I was amputated, I am -- I consider myself a patient. But then gradually, I become a client. And now I consider myself a consumer." So I thought that was a pretty good answer. And this is how Össur looks like today. We are a 50-year-old company. We have 50 years of experience in mobility. We operate in 36 countries and have over 4,000 employees. Most of our business is in the reimbursed health care markets that have a well-funded reimbursement system and protocols for how amputees and people with other chronic mobility challenges are served. This is the bulk of our business. This is, however, a mix that we will see change over the next years as most of the people that need our products reside in other markets. If we also revisit a little bit what has happened since we met last time at the Capital Markets Day 4 years ago. Niels touched a little bit on this. The business environment has been a little volatile. Growth has not been where we wanted. But the business has also been resilient. We've grown the business in all our segments and regions, and profitability remains strong despite these short-term turbulence around supply chain challenges. But fundamentally, there's no structural change in how we see profitability develop for the business. We've also continued to invest in R&D. We've grown our investment and innovation at a faster pace than we've grown our overall organic business. And last year, we launched our new version of the Power Knee, which is again an example how Össur has been or is able to change the dynamics in prosthetics and provide solutions that drive even more mobility and more functional upgrade for amputees. Market access was a major theme at our last Capital Markets Day. And then we presented plans that, by this time, we would have gone direct in 10 new markets, and we've executed on that. We are -- since our last Capital Markets Day, we've gone direct in 9 new markets, and Ólafur will touch a little bit on that later. And this -- and we see the highest relative growth rates in private pay markets, where the ability to invest in good health care solutions is increasing. And then again, this point on business mix, which I mentioned earlier, our business mix has changed fundamentally over the last 4 years. We've divested part of our bracing business. We've acquired strong assets in Prosthetics, College Park and Naked Prosthetics, which we announced in quarter 3 last year. And then we've acquired strong patient care companies in all of our -- or in virtually all of our core markets. So now again, 80% of our business is centered on providing products and solutions for chronic mobility. This is our playing field. These are the markets we compete in Prosthetics here. We are 1 of the category leaders in this $1.4 billion to $1.5 billion market. In bracing, we're now a smaller, more focused player. And then there's the patient care side. This is the front end of the value chain. This is where those that need our products come for service, maintenance, upgrades and renewals of their mobility solutions. This is still a fragmented space, and it -- and let's say, business mix and patient mix differs between countries, ultimately driven by how the different reimbursement systems have decided to pay for these types of solutions. But this is now our playing field after we have taken the step to also be at the front end of the value chain. We are now operating in a larger market. So that was the -- sort of the background. If we now look forward and talk about our Growth'27 strategy, which is a strategy that we've still developed with broad participation within the organization. We've talked to the people that use our products and our customers. And we're excited to be here today to also -- to share this with you how we intend to prioritize for the next couple of years. And if we start by putting things a little bit into historical perspective, Össur started as a small patient care facility in Iceland 50 years ago. And it took 25 years that ultimately led to the development of the silicon liner, which is still one of our most important products. What -- all amputees use a pair -- 1 or 2 pairs of liners every year. That laid the foundation for building the business in terms of more product and more geographic access, building our commercial capabilities in more markets. And all of these remain valid themes. But over the last 10 years, we've built up a presence again at the front end of the value chain, owning and operating companies that are servicing the patients that need our products. And now we are, you could say, in the middle of the river in this maturity stage and, again, at an exciting point in the company's development because this opens up further growth opportunities. And Growth'27 is all about how we position Össur to be successful as a vertically integrated provider of mobility solutions, mostly again for chronic conditions. Also in shaping our strategic priorities, we've looked at the main -- or taking a view on the main industry trends. Consolidation, there's a continuous consolidation at all levels of the value chain in the O&P market. Reimbursement continues to be a major theme as well. There's a continuous demand for more productivity, more efficiency, demonstrating outcomes to the payers that pay for our products. Health care consumers and is also a major trend. People are more -- or those that use our products are increasingly aware of what options are out there, especially in private markets -- private pay markets. Digitalization is impacting how products are delivered or how full solutions are delivered and also having an impact on the traditional, let's say, channel structure. But very importantly, for how we understand our Growth'27 strategy is the fact that the O&P clinics, which is our -- this is where we are strong. This is where we have relationships. This is where we now own patient care facilities, our O&P clinics, but this is, again, where we have very strong commercial relationships in all of our core markets. These businesses, they are serving other chronic mobility challenges as well, not just amputations but also other chronic mobility changes, and you'll hear more about this today. So we strategically need to address all of those challenges. And what that means for Össur is that we are transitioning from being a niche product business operating in these 2 small markets, Prosthetics and Bracing & Support, to operating in a larger market being more patient-centric, more patient-driven, focusing on selected chronic mobility categories but also individuals that need a more short-term solution on the Bracing & Support side. And this offers opportunities because -- and growth opportunities because we would be -- our strategy is to capture more of the value of each mobility solution that is created. It's also an opportunity to address, again, broader set of chronic mobility categories. And we have direct access to patients, which is critical for our innovation work and direct access to the -- to payers that decide what is paid for. And that's also critical when it comes to creating more access for high-end devices in terms of demonstrating the health economic benefits of using good mobility solutions. So this is the company that we are building: a patient-centric business focusing on chronic mobility challenges. When it comes to growth in this space, we need to address the right patient groups with the right solutions and deliver those solutions in the most effective manner. And therefore, our growth drivers, our patient reach, innovative solutions and O&P value creation. Patient reach, in the short term, is more about driving patient volumes in our patient care facilities but also, especially in private pay markets, finding innovative ways to drive volume and awareness in terms of what is available. Innovative solutions, that is where we are strong. And in the short term, that is where we will see the most impact on growth. We have a very strong product pipeline, especially on the bionics, and Hildur will talk more about that later. And then the O&P value creation theme, that is about how we deliver as effectively as possible the mobility solutions that our customers or patients need. We need to do that well in our own facilities. And if we own patient care facilities and if we do that, that drives strength that we can leverage as a better, stronger commercial partner to our independent clinics. So these themes are reinforcing. And executing well on these themes will make us successful in this whole ecosystem. There's also the element of time with regard to these themes. Our maturity on innovative solutions is higher and on O&P value creation. And again, this is where we'll see more growth driven in the short term. The concept of patient reach is something we'll see mature within the organization. As time goes, we will start to report more on number of patients served. But also remember, we are -- the people that need our products and services have a chronic -- this is part of their life. And there are so many other things that need to work out well in order to keep mobility levels at the right level. And the applicability of these themes is also different, very different, whether you're in a reimbursed environment or whether you're in a private pay environment. So keep that in mind. But most of the day today will be around going through these things, explaining how we intend to prioritize and where we are going to focus. So that is the main -- that is the essence of what we're going to spend most of the time on here today. We're going to continue to be focused on growth through acquisitions. M&A has been -- or acquisitions has been a major growth theme for us historically, and we'll continue to look at opportunities to grow the business through acquisitions, around reaching more patients, about acquiring product or technology that broadens our access. And we're going to -- we continue to be disciplined on our capital allocation, use our strong free cash flow to grow the business and return remaining free cash flow to our shareholders in the form of share buybacks. So what does then all of this mean for you? What does it mean for growth? The structural aspects that drive demand for our products and services in this industry are favorable. There's more tailwind than headwind. Our business mix now, compared to a couple of years ago, also has more favorable underlying growth dynamics. As again, we've -- are a little bit smaller on the bracing -- off-the-shelf bracing side. We are bigger on Prosthetics and bigger on patient care. And executing on our growth themes, it is our intention to drive an acceleration in organic growth rate. And in the short term, that is all about executing on our bionic strategy, growing in emerging markets and capturing more value of each mobility solution that is created. And for you to form an opinion on our ability to be at the upper end of that range, those are the key themes in the very, very short term. So those are my final remarks for this opening session. This is a slide that you'll -- we'll refer to again and again today just for you to understand where we are in talking through the components of our Growth'27 strategy. Thank you.

Thank you, Sveinn. My name is Edda, and I'm the Investor Relations Director of Össur, and I will be moderating the Q&A sessions we will have throughout the day. So we will be taking questions now, both from the live audience, and we'll be passing on microphones to those of you who will raise your hand, and I kindly ask you to state your name and your question clearly into the microphone. And for those of you who are watching this Capital Markets Day online, you're welcome to type in your questions in the question option in front of you on the screen. And remember, you're able to type in your questions throughout the presentation, and you do not need to wait for the Q&A sessions to start. So while we wait for the audience to raise their hand, we have already one question here from a virtual attendee. So the question is, is it fair to say that acquiring patient care is a defensive strategy? And will it not dilute your margins?

Well, there's an element of it being defensive, surely. But we believe that it is -- we are in the business of acquiring patient care and being in the whole chain because we think it is about growth. And at the end of the day, the reason we are in the whole chain is that we are capturing more of the value of each mobility solution that is created. And yes, on average, margins are a bit lower in a typical or an average patient care facility compared to our wholesale product business. But there are also O&P operators that are higher and lower, and there's -- again, depending on product mix and patient mix. But at the end of the day, we're in the business of creating shareholder value by growing cash flows. And that's what we're going to do and create synergies and drive return on invested capital by capturing more value of each mobility solution that is created. That is how we think about it. And it also drives more resilience in our business because what we are inherently acquiring when we are investing in an O&P clinic, we are buying a base that -- of patients that consistently need to upgrade, maintain and renew their mobility solution. And it's our job to make sure they get better solutions and drive productivity in how these mobility solutions are created. So holistically, this drives more resilience and positions Össur stronger to grow going forward. That is how we think about it.

Thank you. And we have a question here from Wei.

Wei from SEB. I have 2 questions. Firstly, on the organic growth guidance. Just looking back before the COVID time, you were growing 5% stable growth for many years. Now you're guiding 5% to 7%, and -- but the 7% looks quite ambitious to us. Could you maybe elaborate a bit on the assumption for you to deliver the 7%? I mean you talked about the emerging market strategy. You're talking about the bionic strategy, but you have had those strategy for years. What has changed your view for you to be more upbeat about the long term?

One aspect is change in business mix. If we look at the underlying growth in the business mix that we operate today, it's closer to 6% than 5%. Also U.S., we reported 4% organic growth last year but that if you adjust for Russia, if you adjust for the Walter Reed, we're at 6% and also in 2019, which is again the last sort of normalized year. You'll hear later that we have a very strong pipeline on bionics. And again, our ability to execute that remains one of our biggest opportunities because the penetration and the utilization of these high-end devices is still extremely low. But in order for us to do that, we need to work on all the stakeholders. There's -- and the reimbursement side is hugely important to how we educate and influence those that take decisions on what mobility devices are available in each and every market, we need to be better there. And also -- yes, and then commercially drive the adoption of these products. And we see last year, just the introduction of the Power Knee had a very positive impact on our overall growth. Still the unit volumes are still very low. But we always ask this question: why hasn't it happened faster if you look historically around bionics? But it is -- again, it's a fragmented landscape. You need to convince many systems, but ultimately, the health economics are solid. They are solid. Let's say, for every individual that is using a high-quality mobility device, they will -- it will be -- that is more efficient for the system. But that is our job. That is our job to convince payers to use bionics. And again, we're confident that around the opportunity, and our pipeline has -- is very, very robust, and you'll hear more about that later from Hildur.

Okay. We have the next -- do you have another question, Wei?

Follow up on this. And could you also indicate on the margin? If -- for you to deliver the 7%, so would that -- at the expense of a big ramp-up in OpEx investment? That's all for me.

That's a very fair question, Wei. I mean the way we -- let's say, we have our own internal margin guidance, let's say, but we decided not to give like a medium-term guidance with respect to margins, mainly because part of our strategy is to grow through acquisition, and that simply boxes us in too much to provide detailed targets on EBITDA margin guidance. But the philosophy or let's say, how we look at it going forward is that we -- our goal is to continue to deliver, let's say, gradual increase in our operating margin driven by scale. Again, if we are successful on the acquisition side, we will have a bigger base to work with. But it is the same themes as we have been working with historically. It's product mix, unit cost efficiency, some scalability and principally -- or G&A and sales and marketing infrastructure and the opportunities we have to be more effective in delivering within our clinics that will drive our ability to gradually increase margins. But then yes, we will buy companies. And most often, they are operating at a little bit lower margin, but the main thing is that you need to form an opinion on whether there is an opportunity to grow margin in the base business.

Okay. Thank you. Now we will move on to a question from Christian.

Christian Ryom from Danske Bank. Sveinn, can you clarify a bit for us these 2% to 3% acquisitive growth that you're targeting? Should we think of that as being only or mostly patient care clinics? Or is there also, say, technology acquisitions within that, particularly your ambition to expand into, say, other kind of chronic mobility care?

Let's say, we -- historically, we've -- our capital allocation over the last 10 years has been more heavy on patient care. But there's been solid acquisitions around, for example, Touch Bionics, Upper-X business and Naked Prosthetics last year and College Park. So we continue to scan for opportunities around product and technology that will strengthen our platform and also technology that can help us deliver more effectively in the end-to-end chain. But let's say, there are also definitely opportunities to continue to grow on the patient care side. And we are screening actively in all our key markets, typically focusing on patient care facilities that are more heavy on prosthetics. And I can sort of -- the dynamics are a little bit different market by market. But we'll continue to focus on all 3 buckets.

So maybe just to make sure that I have the correct understanding. So basically, you are saying that we should expect an acquisitive mix that is somewhat similar to what you've had in recent years but that is more heavy on patient care, albeit still with some technology.

That's a fair assumption. Yes.

Okay. We'll take one question from the virtual audience, and then we'll move on to Niels. The question is with regards to the new sales segmentation and the logic behind that.

Well, the new segmentation reflects the better -- the business that we are running today. We are running our Prosthetics business, where our success is based on as many people as possible using our products where we're going to continue to leverage our strength in driving clinical preference for our prosthetic components with our O&P clinical customers. Then there's the bracing business, which is, again, partly O&P but partly also other channels, and it enables us to be more specific about the dynamics and drivers around that business. And then there's the front end of the value chain, which is the service maintenance renewal business, where we will, over time, start to be more transparent also on patient volumes and being able to explain in more detail also -- frankly, going back to explaining the operating dynamics in the business. This simply gives us a platform to have a more constructive, more transparent performance management dialogue with our shareholders.

Okay. Niels, go ahead.

It's Leth from Carnegie. You alluded to the fact that your patient care business fits products -- third-party products to many of your end users. Could you talk about what proportion of the products that are fitted to the end users in your own clinics are actually supplied internally and what would be the potential to increase the internal supplies and to actually acquire technologies to the end users, which you do currently not produce in-house?

Yes. Our goal on the patient care side has to be and will continue to be to provide the best possible care to each and every individual that comes into our patient care facilities. We have great products and great technology that are applicable to a very big part of it, if you just take the amputee space. But there will be instances where there are -- there is a user who is simply -- has always used a different technology. And we we'll never force that because that's our job because if we compromise on that, then our competitiveness, we believe, is not there. So there continues to be an opportunity to utilize more of our products in the patient care facilities that we use. But in terms of where we are on that journey, that varies a little bit compared to, in many cases, how long we've owned those entities and -- but in many cases, they have been good Össur customers previously. But this will -- there is still an opportunity to grow, let's say, call it a little bit faster in our own patient care facilities than you would say for the rest of -- or average for the rest of the market.

Just to follow up. So I guess that the product replacement cycle is pretty long among your end users. So if one of your end users use a competitive product, it would obviously take you some time to convert this patient to your own products. So if you have a clinic that purchases, say, 50% of their products from your business, it's not easy for you to increase that to 80% or 90% within a year or 2. It will take longer compared with, for example, the hearing aid industry.

Yes, that's correct, Niels. It will take longer, and maybe getting up to 90% is surely a stretch. But there's also -- and when -- we'll talk more about this later today, is that there are certain parts of the solution that needs to be changed once or twice a year, which is maybe the consumables part. But then microprocessor, controlled knee or something like that, you're right, that is a replacement cycle of 3 to 5 years. So -- but again, it depends a bit on the patient population that you get with each and every acquisition. And then we've been targeted in choosing companies that have a favorable demographics among their patient population that is -- fits our product portfolio and strategy.

Okay. Next question is from Benjamin.

Benjamin from ABG. Just to recap from the last CMD, looking at your new 5-year growth targets of around 5% to 7% organic growth, where do the exoskeleton fit in this? Is this something that provides an upside to the current target for the next 5 years? Or is this something that is incorporated already?

We'll touch on this also later today. And that's a good question because it addresses the picture that I was going through earlier that there are, for example, stroke patients find their way to our patient care facilities. So they're typically having like some sort of customized orthosis or an off-the-shelf brace in some shape or form to help them increase their mobility levels. There is, let's say, when it comes to exoskeletals or bionic bracing, that is very close to our competencies in mobility, both our intellectual property and our knowledge and experience in bringing complex medical devices to market and creating reimbursement for those devices. Reimbursement is starting -- there's an element of reimbursement in some of our biggest markets today already around certain types of exoskeletals. And this is what we mean with the fact that we are now in the whole chain and we are servicing and addressing patients with these types of indications, opens up opportunity for us to also leverage our knowledge and participate in these markets. But the answer to whether that is actually part of our growth plans in the short to medium term, the answer to that is no.

Okay. We have a question here from the virtual audience. The question is you announced your 5-year growth ambition to the market. I was surprised that you did not include an EBITDA margin ambition as well. Why not? And how should we interpret that?

I addressed this partly earlier. A part of -- let's say, when it comes to how margin will develop, will again be dependent on what -- how our acquisition strategy will develop because we -- and that provides some level of unpredictability, let's say. So our decision was not to give specific margin guidance but rather talk about the things that are moving our profitability and explain that. And that's what we're going to do today. So we're not going to provide a specific guidance in terms of where we think the margin will be within the next 5-year period.

Okay. Thank you, Sveinn. That concludes the Q&A session for now. And I would like to welcome Ólafur Gylfason to the stage. Thank you.

Good morning, everyone. I will be covering patient reach today, which is 1 of our 3 growth drivers. As Sveinn mentioned earlier, our biggest growth opportunity is to reach more patients with chronic mobility challenges. And the key topics for me today is to explain to you why chronic mobility is a priority; also go through the patient journeys, the dynamics there and what is the key to success; and then, finally, call out the main growth opportunities in patient reach. So before we go into the patient reach, just a little background on our stakeholders. So we have typically 4 stakeholders that we focus on: certified prosthetist and orthotist as we call CPOs, typically in the O&P clinic. We have the payers, typically public or private insurance, referrals, typically physicians or rehab doctors and then the patient, what it is all about. And if you look a little bit at the history of Össur, the CPOs, that has been our focus over the past decades. We have built up a very strong relationship with this target group. And we believe that the CPOs and Össur together has basically been the foundation of a great growth in technology trade-up. As we grew, there was a more need for going in relationship with payers, quite many markets that we had challenges getting the products listed, and there's been a lot of effort making sure that our customers, our CPOs are able to get paid for the product. And then in recent years, going into the patient care, we have been connecting to referrals and the patients. So if we look at the patient population, the big picture there. We estimate the market to be $13 billion to $14 billion in patient care. And above 80%, like Sveinn mentioned, is patient with chronic mobility challenges. And there is one thing they have in common. They are -- have chronic mobility challenges for life, and they need service for life. Then we have chronic -- nonchronic patients. Quite a lot of that population comes into the O&P clinic as well. And we have developed a different strategy to address them. We call it Bracing Simplified. And my colleague, Christian, he will go through that later on today. Then we have those 2 segments that we are focusing on that should be the underlying part of our growth: prosthetics and orthotics. And we have often called our business, Prosthetics and Bracing & Support. Bracing & Support is a much broader definition of those devices. And orthotics is basically a subsegment of that, that we are focusing on in the O&P channel. And if we look first at the prosthetics, this is a pretty well-known space for us. This is what we have concentrated on. You don't get service if you're an amputee except in an O&P facility. So they all go into the O&P clinics. We believe there are around 30 million patients out there that are in a need of improved mobility. And what always strikes us when we look at this, and if we just look at the pie there, 10 million lower-limb amputees, and less than half of them get prostheses so they are able to walk. So a majority of them are simply not walking. And that just is striking for us. And I mean this is our mission. This is why we exist as a company. We want to go after this population and improve their mobility. And then we have a 20 million population of amputees with upper limb loss. And that ratio is much higher. And the challenge there is also a lot about awareness. So quite often, the physician simply doesn't refer, doesn't prescribe. And it somehow gets lost, and millions of people simply don't have anything to improve their mobility. So that's definitely a huge opportunity. Then on the right side, the orthotics, there's a lot of -- or much bigger area of population. We are talking about hundreds of millions or even above 1 billion people that have indications like stroke, osteoarthritis, et cetera. And a much smaller amount of that group goes into the O&P facility, still quite a lot, still a lot of opportunities. And we have not done much to really take that like we have done in prosthetics. And we have identified stroke as the next big thing for us. We think we can help a lot of people that have challenges due to stroke. And we will dive a bit deeper into that in the innovation solution chapter. Hildur will explain a bit further. But it -- we believe this is the most likely next thing to be able to commercialize and bring into the world. So let's dive then into the chronic patient. And from now on, I'm going to just focus on amputees and the Prosthetic business because we know so much about it, but you can definitely apply the material that I shared with you into the other side, the orthotic part. So if we look at a chronic patient, I have a -- there's a woman here called Paola Antonini, a fantastic ambassador of Össur, goes throughout the world to present our solutions and help us getting the message to the market. See, if she wants to be able to walk and have a leg, she needs 10 different body parts, if you will, to be able to walk. And you see those body parts there, and actually 9, if you count, but you need 2 liners if you want to live a pretty normal life. You need to wash it and have another one meanwhile you dry it up. So 10 components. And this provides a tremendous challenges. She has to get a new liner, maybe every 6 months, new knee, maybe every 3 to 5 years. There are issues, challenges. She has a socket that is produced, handcrafted, quite often in the workshop. If she has a volume fluctuation with the stump, she has to go back in and get help on that. And it's just a challenge to be an amputee. And important to keep in mind, above 70% of Össur revenues are coming from patients that are already on prosthesis. So that is kind of what Sveinn was talking about. We just want to take care of this population much better than we have done. And we think we have so much more to do to improve their mobility, create solutions like one leg, make it think in more harmony, et cetera, et cetera. So maybe one more slide on the patient population, and that relates to this big opportunity in emerging markets. So you see on the graph here, the gray shaded area, these are number of amputees in the world, the 30 million. And you can see how they distribute depending on development of our markets. The right side, the blue area, this is Össur sales. And the yellow area is the Össur sales in the emerging markets. And what strikes you when you look at this picture, above 80% of all amputees are in the emerging, meaning less than 20 out in the Western world, but 90% of our revenues stay in the Western world market. We are direct in all of those markets, 22 countries, and have established a pretty good business there. And the reason for this obviously is funding reimbursement and historic presence of Össur in those markets. And still a lot of opportunities there. I will comment to that a bit later. But it screams at us, of course, the opportunities on the emerging markets. And the reason for that is the opposite: limited funding, limited infrastructure. And what we have done, we have kind of split the emerging markets into basic and then developing. And as Sveinn mentioned, we have made a specific effort on that in the recent years. We're very successful. It's going very well, and we can see how growth picks up very fast as soon as we have established a good ground in those markets. And we will continue to do that. So just to explain a bit those 2 different worlds. I will go into the patient journeys. We believe it's really, really important to understand this space well to be able to continue to be successful and to increase the growth opportunities that we have because there are a lot of opportunities. The trick is how are you going to capture them. So still same color applied here. The blue area is the developed markets, and you can see our stakeholders there at the top, same stakeholders, and what strikes you with developed market, even though we dive deeper into the amputees that are fitted, only half of lower-limb amputees in this country -- in Western world are getting prosthesis. The other half is not. And we have reimbursement. It's -- there is funding. And we have established patient care. There are people that can receive them. So our approach on this, first and foremost, that's where we come from. That's what we know, functional trade-up. We see big opportunities continue to innovate and get solutions, and this is a lot of elderly patients that are not getting their prostheses. We think we can increase that rate with better solutions for elderly, the low active patients. But at the same time, it's not going to be easy if we come with cool products like we are about to launch, where you have a patient that is not even able to stand up and go to the restroom. We are providing -- want to bring a product to the market that does that, and actually, our Power Knee, that is for higher active, does that. We want to have a product that allows people to stand up, help them stand up, go to restroom, but it costs money. So we need proper access to the prescribers and the payer and convince them that the health economics and the clinical benefits are there. So it is not easy but definitely an opportunity. And then lastly, you have to have a very strong presence in the O&P and make sure that -- because it's a lot of work for the O&P clinics to do this work, to get all the paperwork, and they might not be successful with a few of them. And so we have to have people that are able and willing to do it in the patient care. So that's kind of the high-level approach on developed markets. And then you go to the emerging markets, it's very difficult to find a common thread in those markets. But what is common is that the fitting rate is really, really low. There is a lot of private pay. When we estimate, 70%. So there is funding out there. The trick is to find that. And then lastly, in some markets, there is simply no patient care, and they don't know where to go. So that stops it from people getting protheses. And our approach, again, functional trade-up, make sure we have the right solution, affordable, durable, et cetera, access to the private pay and find ways to create patient care. So that's kind of the 2 approaches, if you will, in those 2 big markets. So I have 2 examples. One on the established markets. And what we have been doing in the established market very, very successfully is to do this functional trade-up, as Sveinn mentioned, our silicon liners, the suspension to the body. People -- 30 years ago, no one was using it. They were all using straps or something for $30. Now everyone is using it, $200, $300 or even more on the average. Same was with the carbon feet that we have today. Everyone was using a wooden leg, wooden ankle. Now it's carbon ankle. And we see exactly the same apply to bionics, absolutely the same. But when we were trying to sell the liners, I mean, we got so much pushback from payers, from referrers all around. And we just are experiencing exactly the same with the bionics. And the -- so we have given out the number 21%, which is the bionic sales as a ratio of our full prosthetic sales. And we think there is still a lot of opportunities to go for. You see the colored dots there. They are an indication of our maturity with stakeholders in the Western world. And North America and DACH, we are pretty well established, and then there are opportunities there as well but even further in the other areas. And what we are doing -- happy doing, want to put much more effort on is to drive preference and value among all stakeholders. We have the bionic with a patient in need. For the referrer, it's the clinical benefit. It's the health economic benefits. It's improved quality of life for the patient, and in the patient care, we are expanding Össur partnership and acquiring our own patient care to make sure that our people are able to fit it. So that's kind of a relatively high level, the approach that we will continue to do to increase the growth of bionics. And it has to be mentioned that the pipe of new products in bionics is extremely attractive for us at the moment. It takes so many years to develop those products, and we've been waiting a long time from -- for our colleagues and R&D to get the cool and fancy products out, and Hildur will talk about it later, and it's very, very exciting. And Hildur and Gudjón, my colleagues, will talk more about this in more details: Hildur on innovative solutions and Gudjón on the O&P value creation. So then on the emerging markets, I'll give you 2 examples of what we are doing that we are very excited about. And these are pilots. We have -- we've been doing both of those for a few years, so in COVID maybe it hasn't helped too much. We have built a partnership. We are working on ways to create new ways to serve amputees in Zambia in Africa. So we partnered up with a fantastic local team there. They have a patient that is without the service. They don't know where to go, and they can't get prosthesis on her leg. There is funding. There are, for example, mining companies and money -- external monies interested to go into Africa that are willing to pay. So we have established kind of a joint-effort O&P clinic and a mobile clinic. So we simply have created products that are very simple to use, very effective. You can fit them in a day. You simply drive to the patient. You find the patient, serves them on the spot where they are. And voilà, you have a full-fledged O&P value chain. And this is going very promising. And if this will work, there are big opportunities to scale these to countries like India. Then the other opportunity is access to private pay in China. And again, it is very different depending on markets, but we are hopeful that we are building up something that is scalable there. We have a lot of patients that have money in China. And there is a relatively good setup in that market. So what we have been doing over the past 2 years or so, we have been building up a team of, we call them social media influencers. They become Össur ambassadors. They're quite popular. You see 2 examples of them on the screen do all kinds of fancy stuff and get a lot of attention, and they attract the patients that are in need into our Össur website and teams, and that team has built -- established a group of VIP customers or O&P partners, and they refer them -- the patients into those clinics. And we have a patient on Össur mobility solution. So not a complex model, but sometimes, simple things are the best. And this is very promising as well. So that concludes my chapter and just the key message, just to repeat what I've been going through, what we think is the key to continue to grow and, hopefully, grow a bit faster than we have done historically. Majority of patients in O&P channels are chronic patient, and they need service for life, and we want to be that partner. Less than half of all new amputees are fitted with prosthetic solutions. Huge opportunity, not easy but huge opportunity. Potential to develop further chronic mobility solutions like for stroke patients. And personally, I'm very excited about this. We've been watching this for 10, 15 years. And the trick always when you come out with new innovation is the timing. Is the timing correct? And I cross my fingers. I think the timing is coming now. Then we have further growing bionics through functional trade-up in developed markets and make sure that we drive preferences with value to all stakeholders that I went through. And then finally, what I just finished going through, develop new ways to reach patients in emerging markets like in private pay. So thank you.

Thank you, Ólafur. Now we move into the next Q&A session, and we will go about things the same way as we did in the first Q&A session. So please raise your hand if you have any questions here from the live audience, and for you who are watching online, please write your question in the question option box in front of you. So while you're raising your hands here, I will read out the first question. Ólafur, so here's a question on who makes the decision on which mobility solution a patient gets and how can you influence that choice.

Thank you. Yes, it has been historically, I think, above 90% the CPO. He is the decision maker. That is, of course, the reason why we have spent all our sales and marketing money mostly on this group. But as you grow and have a stronger presence, it changes because we have kind of reached a certain level with that. And what we are experiencing is the patient is becoming a bigger decision maker. And Sveinn described it so well with our conversation with Fleur last night, where she describes, "Yes, I was a patient, I didn't have a clue. I just did was I was told, totally. Then I became a client. Now I'm a consumer, and I'm telling my CPO what I want. And I think this will increase, especially because this is so -- something has changed in the world with prosthesis." 20 years ago, people were hiding this. Today, you watch Super Bowl, and I saw on the -- last on the -- or the one before, 3 amputees in advertisement on Super Bowl, where hundreds of millions were watching. So I kind of have to hold myself with the excitement of the opportunities with that, which I think is very different from other healthcare, that there is something there that can make us grow faster.

Okay. And we have a question here from the audience.

Yes, a couple of questions, if I may. It's Christian again from Danske Bank. So First question is do you have the right -- do you believe you have the right portfolio in place now to target emerging markets at large? I know you've sort of -- part of the motivation for the College Park acquisition, as I understood, it was also to expand into more affordable prosthetic solutions. So do you have the portfolio in place or are more development acquisitions required?

So I'm not sure if we need to acquire more products for that. Maybe, to get some local products, we have. We are lacking, like in Africa, if you go to those markets. And we have had R&D helping us out develop a very simple robust solution that can last as long as possible with the least maintenance. So we will continue with that. But then in some local markets, it takes time to develop people away from their habits, so we might acquire a local player, but we have a pretty broad portfolio for the -- for example, in China, the portfolio fits perfectly into the private pay [ rate ]. But there is some work to do, and my gut is that we need to figure that out ourselves more than acquiring it. And then on the orthotics side, there is a lot of opportunities there. We haven't -- we've done some work there, but I think there is room for improvement in that space, which we intend to put more focus on now with more clarity on the indications we're going to serve.

Great. And then a second question. So -- and this is on the financial incentives for fitting bionic solutions. Can you talk about whether there is -- and I assume this is different market by market. But in your largest markets, whether there is a difference in the financial incentive from, say, you owning a vertically integrated O&P clinic. Does that make it easier to fit a bionic solution rather than, say, a non-vertically integrated independent clinic?

Yes. And I have to be careful what I say here to the financial audience, I can easily talk to my customers. Do you want me to make a go at this way? Or do you want to take it later on? Yes. So we have good margin, obviously. And when we sell the products into our own clinics, it is very healthy and good for us. And the more we sell fit -- our own products in our own clinics, we will get more profit. There is no doubt about that, and it's more beneficial for us owning the whole value chain than being an independent O&P player, if that answers the question.

No. No. I think the question was actually more whether, say, an independent is disincentivized to fit bionics because they might be able to keep a larger margin on fitting a mechanics.

Okay, got your question. That's an easier question. So yes, this is a constant battle, but the trick is if the CPO doesn't do his best to keep his patient and keep them mobile and start to make profit on it and help them with lower mobility, you will probably end up in trouble. But there are limitations, without a question. For example, with the Power Knee, we were selling very few pieces until, I think 1 or 2 years ago, we got an [indiscernible] approved. It's a system in the U.S. that -- just a fixed price you get. And it totally changes the game for the CPO. And it doesn't matter whether that's our own clinics or independent. And that is really the effort that we need to make more of in the payer area in the Western world. And we have done a good job in both in Germany and the U.S., and we have people on the ground that just think about this and nothing else. But we need to do better in some of the other established markets.

Okay. Then we'll be taking one question here from Wei after I read this question out loud. So we will have two questions, and that will conclude this Q&A session. So I'll first read this question out loud to you. How do you view the competitive environment in China and the strategic ambitions of local players?

Yes. China is a bit tricky place. We have maybe just been -- yes, we're fortunate. Over the last 7 years, we -- 8 years, we went direct in China. It's been a very successful journey. And so far, we have basically been tapping into the premium market. And that is okay. That is totally fine for the Chinese market and the Chinese setup, if you will, what the Chinese want. If you dive too deep into the market and you own a big cake of the public market, then it's more challenging. And we haven't stacked into the tenders there yet. So that is one of the big decisions we have to make in coming years. How -- but today, we're in a very good spot, and we do not worry about local governmental changes that will affect our success there at the moment.

Okay. Thank you. We will take one question from Wei.

Yiwei from SEB. A question on the general market. We heard already, there is a [ staff ] shortage for the CPOs before the COVID time. And now it's probably accelerated a little bit. So you are an important industry stakeholder. And how have you sort of -- or how will you address this issue? And is there a sort of opportunity for you or sort of more challenge you are seeing? Could you maybe comment on this?

Yes. [indiscernible], my colleague in the O&P value creation session, will probably address it better. But we see opportunity to dive deeper in the value chain. Today, there is -- in almost every workshop or O&P clinic, there is a workshop where people are manufacturing the sockets as an example. We have been waiting for years to find the right paradigm shift to change this and bring that probably just to the manufacturers like us. And that will make the life much easier for the CPO, and we will sort out some of that shortage without a question. And then just more efficient and effective solutions, we have a direct socket as an example, there you can cast the prosthesis in a day, which is unique in the world. No one else is able to do that. And that saves time, and you can hopefully sort out some of those challenges.

Yes. So [ Hildur Einarsdottir ] will dive into this question after the coffee break. But I would like to thank you, Olafur. And I am very proud to now be introducing to the states, our Team Össur memer Fleur Jong.

Thank you very much. And thank you for having me here. Thank you for inviting me, and I'm very excited to speak to you today. First, I want to tell you something that I experienced a few weeks ago. A few weeks ago, I was training at a sports facility, and the sports facility is also a location where my CPO is located. We have the luxury of having an athletics track, and in the middle is the prosthetic shop. And I was just training. And while I was taking a break in between my runs, there was, I think, 70-, 80-year-old man walking into the prosthetic shop with his wife, just normal. That's what happens on a normal day there. And it was not that much later that I noticed that he also had 2 prosthetic legs exactly like me, 2 lower limb amputations. And he was walking pretty well, with all due respect to his age. Because right now, I'm 27, I am an athlete. I'm fit. I'm walking very vividly. But sometimes I do wonder what it's like when I get older. I mean it seems to be that getting older makes you move a little bit more difficult. And I don't know what that's going to be like having 2 prosthetic legs. So just seeing that man walk into the prosthetic shop, realizing he had to 2 prosthetic legs just like me, I was like, "Okay, there's a hope for me, too, when I get older." And I decided to walk up to him and tell him that. Because as an athlete, I go to a lot of places and also [ give ] clinics with a lot of kids, a lot of young people. But I don't encounter senior people that much with prosthetic leg. So I decided to walk up to him and sounding like, "Hey, I'm Fleur, I have the same amputation as you do." It's a little bit weird start of conversation, but that's what happens. And I just wanted to say hi and introduce myself and tell him that I thought it was very inspiring to me and very hopeful to me to see him walk like this. But he had been in the prosthetic shell the whole morning, and he had seen me running and jumping around. So he immediately countered me back and he told me, "No, wait, I've seen you run around all morning, and you are inspiring to me because if you can do all those extreme things on the track, why wouldn't I be able to just still walk." And he told me that it was just his goal to, at his age, be still able to walk from his house to the cafe so he could have a date night with his wife until he would pass away actually. And I thought, yes, of course. This is the way it goes. I have my goals on the track, and he has his goals just in life, and it was really, really inspiring to me, I think it was one of the most special encounters I had in my life so far because him and I both resembled something. We both resemble how we feel free to do whatever we like and have goals and be ambitious about it each in our own way. But while still using but also needing the service of our prosthetic company and prosthetic legs and there's -- that's absolutely fine and great. Now I lost my legs 10 years ago due to a blood bacteria, and my body went into a toxic shock. And the shock is actually what caused my blood to only have blood flowing to my brains, my longs, my heart, just to give me a life and not so much to my feet, but also not to my fingers. So they had to be amputated. And I was 16 at a time, that's already an age where figuring out who are you, who do you want to be? How do you get there? So I was pretty scared and insecure. And I was also a little scared about my possible new life, I didn't know what it was going to look like. I didn't have any knowledge about it. And when I first got my prosthetic legs, it felt -- it really felt like a product, like a product is put on me, and this is what you have to deal with, good luck. I was like yes, I'm not sure how to do this. But while working with my CPO, but also getting into sports, I soon learned how to move with my new legs. I learned how to walk, how to skip a little bit, how to walk the stairs up and down, how to walk through steep declining sidewalks, which is a challenge in the beginning. And I started feeling more comfortable. So while being taken back and being a little bit shocked by what had happened to me and how my first prosthetic legs felt and moved, I started getting more comfortable. A sports really helped me in that. It really grew back like kind of my confidence. And throughout the years, my legs have -- yes, they kind of became more feeling like legs, not products anymore. They're my legs. They're not just prosthetic legs, they're my legs. And that's really helping me. And even now, we're 10 years later, and we're still tailoring, more tailoring, more training, we're looking all into the details of my legs because as a person, we all evolve mentally, physically, and I need my likes to keep up with me actually. We need to keep working on it, keep tailoring it. And it's just about keeping yourself, but also your legs in the best shape possible because that's the most important thing. Now when I started getting into sports, I first entered the track at a Paralympic Talent day. I was just there to figure out what sport I was going to like. I had a new body, a new life, I thought I might as well look for a new sport. I was always dancing and playing tennis. I didn't want to play tennis anymore because that would mean if you have a disability that they put you in a wheelchair. I was like, no, I don't think that's necessary. So I don't want to do that anymore. Dancing, I still kept falling a lot because I was not balanced that right. I still had to practice a lot. So I went to the track and the coach there talked to me, I trained, I did like a little clinic. There were other athletes there. And I was just absolutely amazed by how much all these athletes did on their daily prosthetics. Because what I saw on website, on YouTube, I saw people flying on the track with blades. And I thought that's when I'm going to see all clinic long, but I didn't. I only saw them training on their daily prosthetic legs. And just to give you an idea of what I'm able to do nowadays on my prosthetic legs, I compiled a little video for you. [Presentation]

Now I've been a professional athlete for over 7 years now. And there has also not been a year that has been the same. We're constantly changing. We're developing me. We're developing the gear. We're looking for change, and we're ultimately always looking for improvement as well. So in Tokyo 2021, I experienced my first big win at the Paralympic Games, so on the biggest stages in the world. And I brought the video of my first and eventually my winning jump, and I brought the raw material because Tokyo 2021 was pretty special, empty stadium, COVID, everything like locked away safely, sort of. So I want you to see my jump, but I also want you to pay attention to what you hear in the stadium because it's pretty weird. [Presentation]

So after the competition, there was a lot of talk about why I said woopsie. Because it had aired and I didn't know. I said woopsie because I made a deal with my coach to slowly get into it, get into the competition, field has gone a little bit weird in the stadium being empty, but also quiet, try to also not get distracted or taken back by it, but just slowly build up your competition. And then I jumped a new world record in my first attempt and it ended up being the winning jump. That was not the deal, but it worked. I won. So it was amazing to feel that, well, actually, 9 years after I lost my legs, to be able to put out such an accomplishment. And actually, a few weeks ago, I improved the mark that I jumped there, 6 meters 16 to 6 meters 34, so we're going to try to keep improving that. But of course, now what? As Sveinn told you, I also have the world record in 100 meters. I broke it last year, and I ran 12.46, and that made me also the first woman to go below 12.5 seconds, which was really a benchmark in female sprinting. And it made me the fastest woman on blades ever. So that was a very proud moment. So now what? What do we do to keep improving. Well, together with my team, I am going to have to redefine the limits of what we think is possible. And even in the most exaggerated way, try to live this ultimate life without limitations in every possible way. Now from a practical point of view, this year is the world championships. Finally, there's a big championship again. And it's the only title I do not yet have. I have the European title, over 100 and in the long jump. I've got the Paralympic title in the long jump, but I don't have a world title yet. So that's definitely the goal for this year. And next year, of course, is going to be an even bigger party because then we have another Paralympic Games. And this time, it's in Europe again. So my expectations are high for it, and I don't expect a quiet stadium at all. Now regarding all the work that we do on sockets, on alignments, but also on training, not much has changed. Of course, I've been an athlete for 7 years. So we have learned a lot. My team learned a lot. I learned a lot, my CPO learned a lot, my coach learned a lot. I think together with Ossur, we learned a lot, and we've really gotten to know each other so much better that we can go into the slightest details. The slightest details of my training, the slightest details of my material. Every bolt, every alignment, it matters. And we are just never done learning. And I truly believe that is the attitude that we've got to have, and I'm very happy to have a team around me that believes exactly the same. We're constantly trying to be innovating and trying new things and well, in my case, stay ahead of the competition because the targets are on my back and no one else's. So I have to be careful there. So it's just very special. And from the moment I lost my legs to the moment I got my first prosthetic legs. I think throughout the 10 years, I just -- I love how my legs are not just a product anymore. And this, but also this, it's all part of my body. And I'm proud of it to be part of my body. And that is also what I want other people, the younger generation, the current generation, the older generation, I want everyone to know that. I want them to see me on the track. I want them to see me here. I want them to see me in commercials because it's increasing and increasing. And I want them to see that having prosthetic legs is also something to be proud of. I mean even if I put on my blades, I just feel like an increasement of a level of coolness, it's just very, very nice to experience that. And I think it really doesn't matter whether it's about me trying to break new records and more records on the track or it's about that 80-year old man who just wants to still be able to go on a date with his wife. I just hope that these legs will just last a lifetime with me and that I'll be able to live a happy life and enjoy everything I'm able to do right now. And I hope I can turn 80 in a way that, that old man also turned to 80 and still be able to walk to go on a date with my future husband. Thank you so much.

Thank you, Fleur. That was truly inspirational. I think I -- my eyes are a bit watery. And from the audience here, I can see, I'm not the only one. So thank you once again. And now we will be heading into a coffee break, and we will be back at 10:15 sharp when Hildur Einarsdottir, EVP of R&D, is going to take the stage. [Break]

Welcome back, everyone. We're going to dive straight into it. And I'm going to tell you about innovative solutions, which, as [ Sveinn ] introduced to you before, is one of the 3 key pillars of our Growth'27 strategy. Our innovative pipeline is expected to contribute significantly to our growth in the coming 5 years. There is nothing new there. Innovation has always been at the core of us, a key factor for growth in the past. What is, however, different is that our corporate vision is giving us an opportunity to look at innovation and innovative solutions in a broader sense than in the past. Today, I'm going to walk you through our innovation strategy. I'm going to give you examples of where we believe there is opportunity for growth in the short term, growth within [ reach ], based on solutions that we have recently launched or are about to place in the market, but also provide you with insights into some of the future avenues that we have started to explore in order to contribute to growth further into the future. I chose this picture specifically because I will be talking about clinical benefits and long-term impact of our solutions to our patients that are chronic. But I think it's good to remember going into that, that it is also about developing for people's day-to-day life to make sure that people can go to the pool or to the water slide park with the kids and not worry about their prosthetics. And that is what truly allows us to live up to our vision to enable people to live life without limitations. So let's start with our innovation strategy. Our innovation strategy follows the corporate vision. And I think it's good to recap a little bit on where we're coming from. We're coming from being a provider of products, a manufacturer. But the way Össur has been evolving over the past years, stepping more and more into patient care, is putting us in a good position in an external environment that is changing. We see payers looking more and more at the total cost of care and the long-term benefits that any type of healthcare solutions that are provided, can bring. And this rhymes really well with Ossur's innovation strategy past and present because we are always innovating to benefit our patients in the short term, but also looking at how our solutions can impact people in the long term in a positive manner. So the environment is changing. We have the solutions to support that change, and we are also in patient care. So this puts us in a perfect position to make this transition from being a provider of products to being a provider of lifetime health services. And being in the whole value chain, like [ Sveinn ] described before, gives us great opportunities on the development side because being closer to our patients, being closer to our payers, prescribers and practitioners always has really good [ input ] into our development efforts and R&D work. We, of course, always want to capture commercial opportunities with our solutions while being very patient-centric and aim to drive better health outcomes. And our competitive advantage continues to be in our very strong and extensive intellectual property portfolio. There are 3 interlinked areas that I think are critical to develop successful solutions. Technology and innovation is one. And technology can do many wonderful things, and it's easy to get excited about new tech, as engineers can tell you all about that. But technology alone doesn't cut it. The only way technology and innovation become impactful is when they are perceived by our patients as truly transformational. And that is what we always strive to do. But in order to develop transformational solutions, we need to understand our patients from a clinical perspective, but also from personal preferences and lifestyle perspective. And that is how we can drive outcome. And it's not enough to have access to great technology and develop great products. We, of course, need to make sure patients have access to our products. And this is why we put high focus on collecting evidence and being able to interact with payers and reimbursement systems around the world to ensure access to our products. And when we talk about long-term impact, and Fleur actually mentioned it before in a very nice setting, it is our patients are chronic, and it is so important for them to preserve their rest of their body as well as possible so that they can become 80 or 90 and go on a date. And I take our Pro-Flex foot as an example. This is our flagship foot. And it gives the user an instant gratification. They find it to be comfortable. It gives them a large range of motion and a push in every step. So they like it. And we tick that box of mobility and benefits. But what we also know is that particular design reduces a strain on people's knees. What the strain on your knees mean, it often develops into conditions such as osteoarthritis. Osteoarthritis is a terminal very difficult for [indiscernible] people to pronounce. But more importantly, it is also a very common condition for amputees because they are constantly compensating for their limb loss and for sometimes their lack of good prosthetics by placing more weight and more strain on their [ sound ] limb. So this is why we want our designs to not only cater for the patients and their lifestyles right now, but can give them a great opportunity to be mobile in the long term. Our innovation core is in prosthetics. That is where we come from, and that is where the biggest intensity of our investment in R&D is and continues to be. We want to have solutions that cater for every state in people's lives, from postoperative care to rehabilitation to normal life and again, to [ alterate ] because we need to make sure the care we provide and the solutions can cater for every state in people's lives. And I actually like to say, our solutions accompany people through life. So we've gone through why we innovate. And I think it's good to shift gears and talk about where we think growth is in reach -- within reach, based on the solutions we have recently launched or about to introduce. And I'm going to give you three examples, and they relate to the opportunities that were mentioned in the patient reach section on the commercial side. One is to contribute to higher fitting rates of amputees. Two is to increase the penetration of bionics and thirdly, to continue to drive functional trade-up. So let's dive into those individually. Olafur explained before the low fitting rates of low active -- lower limb amputees. They are very low, 40% to 60% in the developed healthcare markets. And we believe by innovating in the socket space can give us an opportunity to drive adoption of prosthetic solutions in large patient groups, in the elderly population as well as in some of the rural areas. We believe we can shorten rehabilitation timing with that impact cost in a positive manner. So we talk about innovation in sockets. What is the socket? The socket is the only thing on the prostatic lag that is truly custom. It is built around the residual limb of the individual, and it attaches the leg or the knee and the foot to the rest of the body. And the conventional way of making a socket is very complex, and it can often be the reason why people are deemed unfit for prosthetic care. It's a very iterative process. It requires the patient to come back iteratively to the O&P clinic. And that is often for elderly amputees, just it's a physical process. Our solutions are intended to remove these complex processes, they ensure that you get a good fitting socket within an hour or 2 instead of sometimes weeks, which means that people can get up faster and be mobile faster. And this also gives us an opportunity to fit people outside of the clinic. You can do this in the clinic, if you like, but you can also do it in the hospital, in the rehabilitation centers and care homes or in rural areas. So that gives us an opportunity to access patients that currently don't get the prosthesis. And we know it is much better clinically for people to be mobile following an amputation. It increases -- improves people's quality of life and actually increases their life expectancy. So it is our duty to affect these low fitting rates as well as we can. And there is an opportunity in it for us, both on the patient care side but also on the product side. Another opportunity we discussed is in bionics. And here, we have both an opportunity to increase our market share, but also to increase the bionic market as a whole. Like Olafur mentioned, 21% of our prosthetic sales came from bionics last year. And bionics contributed to 1 percentage point increase of our organic growth in that same year. And that is mostly attributed to the Power Knee launch that we had in that year, and it goes to show how impactful our bionic launches can be. If we look at the graph here and the light area, it's indicative of the volume of patients. You have the low active population, which is a bigger population. But in the solid blue, you have the moderate-to-high active population. That's a smaller population in terms of volume, but this is where reimbursement is established in [indiscernible] markets. This is where our intensity in development has been for the past years. And our pipeline has been developed truly to tap into those opportunities to increase our market share in this segment, but also to increase the bionic market in general by merging into the low active patient segment. There, reimbursement is evolving, but we have shown that we can drive reimbursement. The reason why powered prostatics are reimbursed in the U.S., for example, are because of our innovation efforts as well as our interaction and efforts with the payers in the U.S., both on the knees and on the ankles. So we believe we can and we should do the same for the low active population because studies have shown that Bionic are very cost-effective solutions. They reduce the likelihood of falls and reduce the likelihood of hospitalization following falls, which, of course, can be costly. So Power Knee has been mentioned here before. It's a good example of where we're able to drive functional upgrade, giving people a solution that gives them more functionality and couple that with groundbreaking technology. Another example of functional upgrade, coupled with groundbreaking technology, is our [ Air fit ] solution that we are very proud to have recently placed on the market. This solution addresses a major clinical challenge for amputees. It is a liner and the socket. Basically, the liner goes straight onto the residual limb. The socket goes on top, and then everything else is attached to the socket. Aligner and the socket are the foundation for prosthetic use. If you can't wear your socket and/or the aligner, you don't have a leg to use, and that obviously has an impact. So sweat remains the leading challenge for amputees and their leading complaint for kind of the day-to-day life and what affects them the most in their day-to-day lives. Sweat within the system is something that most amputees recognize, and many of them develop some sort of skin issues in relation to this. And skin issues might sound lightweight. But if you think about the older population, [indiscernible] patients, healing wounds that start to form with the -- on the residual limb can be very challenging and costly and actually, once or oftentimes, the root cause for amputation of the [indiscernible] patients. But also importantly, for our higher active amputees when they can't wear their prosthesis, this is where they truly experience their disability. So that is what we want to do. So what's [ Air fit ]? It is a fully-breathable liner in a socket. It's the world's first 3D-printed silicon liner that is fully breathable and ensures that there is no buildup of sweat and humidity within the socket. So all of those solutions we have discussed, and we can have a look at them later on and understand, but they all have the potential to give people this instant gratification, but also long-term clinical benefits. And as for the other solutions that I mentioned before, we have ongoing clinical trials in every area that are intended to capture the biggest impact of our solutions and give us data to work with to interact with our payers. So we spoke about some opportunities we have to capture growth short term. Let's look at some of the examples we have been looking at for the longer term. And those examples, they touch our participation in the future of healthcare to drive functional trade-up in prosthetics, as we have done in the past, and to shape new solutions in the O&P space, as was mentioned here before. And we spoke about our goal, why do we innovate it is to innovate for the short term, but also for the long term. We're solving clinical challenges, but also bringing long-term benefits. And the more payers are looking at the long-term benefits, the more opportunities we see with data collection and being able to interact digitally with all Ossur legs and all our Ossur arms, gives us a very good option to build platforms that can benefit everyone in our value chain. If we look at the payer and the reimbursement, our ability to capture data on patient groups and show health trajectories throughout their day or week or month in comparison to other solutions can be very strong to drive patient engagement tools to give people individual training experiences or even networking with other amputees can also be impactful. But it also allows us to -- allow our clinicians to have remote interactions with their clients or their patients when that is applicable. And of course, data and more knowledge of our solutions out there give us a much better opportunity to service our products in the future, but also feeds into our development efforts. So in my mind, when it comes to our future potential of being a provider of lifetime healthcare, this data element is a crucial part. We have introduced the concept of mind controls in the past. Mind controls are our objective to provide amputees with more control over their prosthesis. And to date, our biggest focus has been on the IMES system. The IMES system relies on implanted sensors that are implanted in the muscle body of the residual limb, and we pick up signals from those sensors to decide and control the prosthesis. And this is, of course, quite a complex journey when we're going invasive. It will add to the value chain and the stakeholders because you're including surgeons and other health practitioners that are currently not in our value chain. But we have been taking very considerate and pragmatic steps, I would say, on this journey. And this year was a big milestone for us when we started our clinical trials in Europe for upper limb amputees. And these trials will run throughout this year and into the next year. And those will shape our future steps and define our route to a marketable product. However, what we also believe is that we can tap into some of the technology advancements that are happening in the world in order to drive mind controls in a noninvasive way. And artificial intelligence and machine learning are definitely areas where we feel we can utilize to better adjust every single product to each individual. And this is a route that we are taking in an exploratory phase at the moment, but that we truly believe gives us a good opportunity for the near-term future. And developing prosthetics, it is really a very clear journey. We have a perfect example in front of us of a healthy leg or a healthy arm. So we know where we want to go, and we're convinced that the next big step in prosthetics is to give amputees a more intuitive and direct control. So these are kind of our efforts on that. And finally, we discussed before that there are various conditions being treated within the O&P clinics. Amputees are obviously a sizable part and where our focus is and the intensity of our investment. But we also want to see can we apply our extensive knowledge in mobility, both from an engineering IP perspective for application and clinical perspective as well. And the neurological space is a sizable one. Majority of those individuals coming into the O&P clinics have suffer from strokes and are getting some sort of relatively simple braces. But there is an opportunity there to further develop. Majority of stroke survivors actually experienced mobility challenges. And the rehabilitation of stroke patients is a very manual one. It often requires 2 physical therapists for an extensive time of a very repetitive training. And we have indications that wearable robotics or exoskeletals can help in this scene, both to reduce the labor intensity of the training, but also to improve the symmetry and gait of that individual. So we have started this journey, and we actually also had a big milestone this year when we are starting clinical trials, both in the U.S. and in Europe, on our concepts in this field, and it will be exciting to see kind of where that takes us. And in parallel, we are investigating other potential indications, of course, within the O&P channel. So to summarize, we believe we are in a good position to transition from being a provider of products to being a provider of lifetime health services. Our innovation investment is based on commercial opportunities, focusing on proven long-term benefits for O&P patients. And I iterate, proven, that's critical from reimbursement and payer perspective. We continue to drive functional trade-up, coupled with groundbreaking technology. And we are planting seeds in other chronic categories that are cared for in the O&P clinic. So with that, I will close.

Thank you, Hildur. Now we move into a Q&A session, and I just want to remind everyone the format of the Q&A session. So we'll be taking both questions here from the live audience. Welcome to raise your hand if you have any questions. And I kindly ask you to state your name and the question clearly into the microphone. And for those of you who are watching the Capital Markets Day online, you are welcome to write in your questions in the Question option in front of you on the screen, and you can do so throughout the day. You don't need to wait for the Q&A sessions to start.

So while you're raising your hands here, I can see two hands already. I have already received one question here. Can you elaborate on the product pipeline for 2023 to 2027? And what products you are launching this year?

So our main focus last year, this year and the next is on bionics. We launched the Power Knee last year with great success. We are just about to launch the next generation of PROPRIO FOOT, which is our bionic ankle. And we are then in the process of releasing our next generation of the RHEO KNEE as well. Those are kind of all products in those kind of moderate-to-high active population where reimbursement is fully established. And we are then working on a low-active solution, as you saw in the graph before, that is intended for that population. We are planning to introduce that to select customers this year and be available in the market in the next year.

Perfect. Yes?

Thank you. So could you provide an update on the progression of reimbursement for your mind-control prosthesis? Are you in discussions with healthcare authorities? Or is it still too early?

I would say, I mean, we will rely on the reimbursement setup that we have for our bionic devices, and that is a critical part of the pathway, is to make them compatible with the mind control system. Our focus, to date, has been more in relation to the protocols that we're running on the clinical, but also our interaction with FDA, actually, on how you can bring products like this to market. But we're in kind of the early stages on the reimbursement side, I would say, for that solution in particular.

And would there be any established reimbursement codes for the bionic brace systems that you and some other companies are developing?

That would maybe more be applicable on the exoskeletal side. We believe that most of the code sets that would apply to mind controls would be from prosthetics in particular.

Thank you. And we have another question here from Christian.

Christian again from Danske Bank. So a couple of questions. First on mind control. So you touched very briefly on it on the slide, so the potential for noninvasive mind control, so basically neuro-electric prosthetics. How big a potential do you see for that? Is that something that you're also investing into? And will that play any meaningful role within this current strategy period?

I believe so. I think, I mean, as soon as you're not invasive, your timelines, obviously, and complexity levels get lower. But also technology advancement in other bigger fields, we can rely on and kind of follow -- be fast followers there. And the way we sense and process information from sensors in our devices today is pretty good. But it is this kind of personalization of the behavior of the prosthesis that we want to achieve and being able to adapt to the individual, their gait patterns there, where their safety margins are in terms of not falling and things like that, we can definitely utilize that. And I think the noninvasive route is definitely a shorter-term thing.

Okay. Great. And then a second question, particularly on this or specifically on this low-active Power Knee. How should we think about, say, the near to medium-term commercial opportunity for this? So within the next 3 to 5 years? Is this something that you believe have significant -- over that horizon or is it akin to when you first launched the Power Knee many years ago and really a market that has to be built over a fairly long horizon?

I think it definitely needs to be built up over time. I don't think it's going to take us maybe as long because we have established both the understanding of the [ Power ] platform and what that does clinically. And so we are very focused on collecting the evidence and driving the development of that product to specifically cater for the needs of that population. And like I said before, I mean cost effectiveness of solutions for the elderly population is a key thing and for independence. And I think also when we talk about kind of quality of life -- and the first step in being mobile is actually to stand up. And that is sometimes what these amputees struggle with because when you stand up from a seated position, if you use any other knee than a Power Knee, you will rely completely on your [ sound ] side while doing that. You can try it at home tonight. And then I think it's very difficult in heels. But think about it, you stand up 60, 70 times per day, and that relies both -- I mean, both -- it's straining on your body, but also for those elderly and more frail amputees, can be impossible to do. So it's important just to -- if we only use the motor power to get people out of a chair, that's a win already. But then it has other benefits in working as well.

Okay. We'll be taking the next question from Yiwei.

Yiwei from SEB. Just a question on the PROPRIO feet. I remember the previous version when you launched it, you have talked about the adoption has been challenged by not technically, but basically, the mechanic feet wasn't good enough. So the adoption rate was low. So now you're talking about the next generation. Should we expect this to be a major launch for you? Or is it still the same expectation in terms of the patient adoption?

I think, I mean -- and you're right, absolutely. The mechanical feet are still very strong, and that is where our stronghold is as well. But the adoption of bionics, in general, obviously, is kind of gradually increasing. We believe that -- for example, one of the features of this new generation is that it's waterproof. So it kind of that -- this has sometimes been the challenge with bionic products versus the mechanical ones, is that the mechanical ones maybe tolerate more in terms of the environment. So that has been a big focus for us for the PROPRIO FOOT, but also for the other bionic products that we are launching. And so I think we should expect -- it's not going to be a huge jump. I think the ankle -- and there's always going to be a more gradual increase than what you would see on knees, in my mind.

Is it possible to indicate the increase in the adoption rate for the previous version over the last 5 years, let's say?

Yes. I don't have it from the top of my head, but that is something that we can definitely look into, for sure.

Okay. Thank you. Then we're talking about bionic throughout the day, and we have a question here with regards to the Power Knee. The question is, have you been able to sell Power Knees according to demand in 2023? And when do you foresee that competitors would be launching competing products?

Yes. So we obviously saw a huge demand for the product last year, and -- which required us to scale up in terms of manufacturing and throughput, and we have been able to meet that demand this year, absolutely. In terms of competition, I think we're definitely seeing competitors realizing the benefits that a powered platform can bring. So I think we should expect competition to be visible in the coming years, while we in parallel continue to build on our very well-protected, from an IP perspective, powered platform, going forward. Maybe one thing because you asked about before the product launches also, I should have mentioned that on the upper limb side, we have big efforts on the -- on our next generation of [indiscernible] electric hand. So just so that we keep that as well.

That's very good. Thank you, Hildur. And another question here from the virtual audience is with regards to reimbursement, which is very important in our business. And the question is, are you actively driving reimbursement change by engaging with reimbursement authorities?

I would say, we're doing that in pockets and especially in markets like France and the U.S., where we have close interaction with the payers and the reimbursement authorities. In France, for example, we've run extensive clinical trials when we launched new products. We have about 50 patients in the study for our bionics this year, for example. And so I would say, and our focus continues to increase in this area, both to make sure we have the right relationships, but -- and we kind of drive the conversation, but also to capture the data and the evidence that we know our products can bring.

Okay. Thank you. We'll be taking the last question now, and it's from the virtual audience as well. Can you speak to digitization of your product development and trial process and how that impacts the development time line of new products?

Well, I think if we talk about digitalization of the products themselves in the field, that is like I have mentioned before, something I think is going to be critical and gives us a very strong advantage going forward. We are already able to collect data and evidence on the bionic devices, but there is nothing to say we can't do that on the mechanical legs and arms as well. When I think -- the question is also about our development times and the way we develop. There are big improvements and technology advancements happening in parallel fields. And the way we can actually drive software development and do software testing, for example, using a digital twin. That is completely transforming the way we develop and the way we can test and run with our software and firmware development a little bit parallel to the hardware side. So that definitely has the potential to change the way we operate and work and give us the ability to be more -- and work in a more of an agile environment on the digital side.

Thank you very much, Hildur. So that's it for this Q&A session, and I would like to welcome Gudjon Karason to the stage.

So hello, everybody. I will be having the pleasure of talking about one of the growth drivers, the O&P value creation. We have established how it is important to reach out to our patients and Hildur in an excellent manner, I have to say, presented our innovative solutions. But I will be talking about the last element, we believe, is going to help us to grow the business going forward. So what is that O&P value creation? Basically, we believe it closes the circle. It is what connects the 2 elements we've already spoken about. And this is, as we have heard about one of our ways to be able to, as I sometimes say, get a seat at the table. We are -- by being present in patient care, we are able to interact in a completely another level with the -- with some of the key stakeholders that all are very clearly mentioned. And by having direct access to the patients, we also get better information, better knowledge, and we are able to collect better data than we have been able to do so far. This focus on the whole value chain is also something that brings us efficiency. We can now look at the whole -- how we generate value and how we can improve and how we can apply the technology we have in the company in the best possible manner. I spent more than a decade talking about how we should not go into patient care. I was on the product side. I was in R&D. Products, the thing. One of the things was that we were very afraid of it because we thought everybody will be against us. The world has changed. And one of the key benefits of being in patient care is that we are a better partner to our customers, and I will go more into that later. So what I will talk about is where we come from and where we are today. And when it comes to patient care, I will talk about what we believe are the key value drivers in the O&P clinic space. And I will mention some of the initiatives that we are going to be focused on in the near term. So Sveinn already established that the company is founded as an O&P clinic, more than 50 years ago in Iceland and that clinic is still going strong. And even though the company then went into the product side of the business, as I explained, we saw an opportunity now 10 years ago, to go with a significant effort into the patient care, and that happened in Scandinavia. Since then, we have grown both organically and we have acquired more clinics. And today, we have clinics in 11 countries. We -- there are around 200 locations, and these clinics are in all of our 3 regions: EMEA, APAC and Americas. What has been happening in the last few years is more of an effort to reform to improve the business in the clinics, in the patient care. This has been a lot to do with alignment, defining the key processes and how we can improve on those, finding these economies of scale because as we grow bigger, we see more opportunities to be simply more efficient in running these clinics. And then like Hildur also mentioned, we have a lot of technology, but we also have other things, the supporting functions in the company where we can find synergies with acquired clinics. But we've spoken a lot about O&P clinics, and we've seen some very impressive people wearing prosthetics, but I think I would like to spend a few words on explaining what happens within the clinics. Olafur already established that we have many different types of patients, and every single patient has their unique challenge. This is not a mass manufacturing facility, this is a facility where understanding the need of the individual is key. We know from before that the absolute majority of these patients have chronic mobility challenges. So that they -- and that means that the connection, the relationship most of the time actually with the clinician is extremely strong. We can all relate to our dentist. We have a relationship with our dentist. We want that person to help us and we want them to care what happens. It's exactly the same in Ossur. And it's also important to understand that when we innovate, we have to do it together with the clinician and the patient. They do not want to experiment unless they really trust us. So being close to the CPO, being close to the patient allows us to innovate better. That is my excuse why I -- when I was working in R&D, I was not far as -- nor near as good as the people that are working there now because now it's a lot easier. I try to tell myself that at least. In the clinics, we do both products and service. So this is not just a product delivery, this is definitely a place where you add a lot of value through the service that you provide. There can be simple products. We mentioned before that some of the solutions we deliver are off the shelf, that was -- there is one message. But there's still a significant element of service you have to choose the right products. You have to train. You have to teach. So it's very important to realize that whatever it is, there's always a high service element. And that is of course, capturing a bigger share of the value when we are presenting the -- when we have our presence in the patient care, we get a bigger part of the total value of the patient. But the more complex solutions, as Hildur explained, requires multiple visits and a lot of -- the bigger part of the element is service. And as we have also heard before, we are basically stepping into a market, a market that is roughly 3x bigger than the component market. So a lot of opportunity for growth. And then the question becomes, how are we creating value? Is it just making it easier for us? Or is there a true value to be had? We mentioned some of the key trends, and we definitely see the shortage of clinicians. We have good ways to tackle that. But also, we are able to train -- we are able to help by training more people when we are closer to the action. We are very happy to see that there's a new generation of CPOs coming, a lot more focused on the patient than the technology, not technology in terms of innovation, but they are not as interested in plaster of Paris as they are in how the person is doing, and that is helping us in the development. We definitely have to take reimbursement into account. Reimbursement is -- these are just the rules of the game. We can sometimes influence them, but every day work is done according to the rules of the game, and that is always the case in all our markets. And they differ a lot, but now we know them a lot better because we are in the game. We are not on the outside -- we are not in the stadium watching, we are in the field playing the game. Digitalization is definitely a driver. We are well equipped to participate in that change and have multiple solutions we are working on there. The numbers in the table are representative of U.S. clinics. It's a big chunk of the market. So it is something that we can use as a reference point. And then how are we impacting. Absolute best way is to grow the revenue. And we do that in 2 ways. We help more people. And the second way, we help them more. We help more people by attracting them to the clinic and by expanding our offering to other categories. And we can help them more with the help of great solutions like the ones Hildur is explaining. And another -- and I have to mention it another big opportunities when we reach further into the chain of health care, we go into the hospitals, into the doctors and is not cooperating. And this has proven to be a way to increase the number of people getting prosthetics because we can talk to them prior to the amputation. So when you amputate, do like this. And that is not possible if you're only a manufacturer. And this is something that we have good data showing that this is possible. And this will help us in the developed market in the Western world. We can also lower the cost of run clinics to efficiency, and that has to do both with the manufacturing technology and the G&A cost. Before anyone asks so how much will you increase it? We will not report on that. We will not talk about how much we're going to increase the profitability. But this is one of the reasons why Sveinn is relatively confident when it comes to the question. So will it not -- will our profitability not go down when we acquire more clinics. Our efforts on improving the efficiency on the clinical side, you may wonder why isn't that getting bigger. The reason is that when Hildur mentioned that we can do a socket in only a couple of hours than multiple visits, we want the clinician to use the time saved with the patient. I told you before, the interaction, the training, the relationship, that's the value. So we are not saying just take more patients, we are saying, be better clinicians. And therefore, we are not saying that we're going to save a lot of time on the clinical time but on the technical time and the DNA time, definitely. And over to some of the things we are doing to improve the life of the CPO. An Ossur portal is an example. It's a platform where you can order the products where you can order the components. And yes, we -- I think we -- most of us have seen a web shop, but that is something -- this is something way beyond that. The building in the intelligence necessary to select the right componentry is what is helping the CPO and also, again, helping them create more time for the patient. Another element was also mentioned the patient engagement doing this together with the patient, not locking yourself in the backroom while you flip through 10 catalogs, but doing it on the screen in front of the patient. That is what increases the engagement and make sure that the user, as we've heard before, makes it to their prosthesis. Not a device, you hate to see every morning, but something that is -- something you generated together with a clinician. It helps with collecting data. I always do what Hildur tells me. So we do that. And it also helps with -- helps the clinician to remember when is the time for renewal, when is it time for service and it makes sure that we maximize both the clinical and the commercial benefit you can reach. These quotes from a couple of clinicians. In the U.S., a good example of how the new generation of CPOs is more focused on the patient than being allowed to hammer together their unique set of componentry. But the portal goes beyond just ordering the different components. A traditional method of building a prosthetic leg is quite labor intensive and complex. And it will -- most of the time, it involves components from multiple manufacturers, where one of the key challenges is knowing the comparability not legal, but functional comparability of the different components, what works well together. And you can just imagine when you have found your solution, you stick to it. Why should you take the risk? And of course, when we innovate, we want people to try out our new solutions. One of the big developments that have happened lately is that we have started selling complete legs. Some of you may be surprised, but we are actually just in the starting blocks there. This industry has been the same way dental and audiologists were working decades ago, meaning that people are buying componentry and assembly locally. We are now moving to a new era, a new way of working, where Ossur as a manufacturer is capable of delivering the full set of everything that is needed, a full leg. Adding to that, the shock technology already explained, we are able to serve the patient at a completely different level. It is not only in terms of clinician time, but it's also everything to do with safety and regulatory compliance. And in general, this is a whole new platform for my colleagues in R&D to work from when they can start looking at a whole solution and develop on that. So I am pretty certain that this is a future that -- we will see in the future how this will explode. We sometimes get stuck in technology, as Hildur said, and it's very reassuring that when we then launch this, we see that the acceptance goes up and we have seen that our customers using this technology are more loyal than others, meaning that they simply use more products. And what's even better, we see that they are able to see more patients because they see the benefits of this technology. This is now available in selected markets. We are launching it in more markets in coming years. And we do believe that this will contribute to our future growth. As a final remark, I'm going to mention a bit how we see the possibility to utilize our O&P model, the operating model, in an emerging market. We all know what is happening in Ukraine. And what has happened is that there is -- as an impact of the war, we are seeing a huge unmet need of -- with amputee -- number of amputees is unclear, but numbers as high a 10,000 or 15,000 have been mentioned. And this is not only soldiers, this is also civilians, both grownups and children. And we are lucky enough to be able to help. We've been working with others to -- with donating both componentry and training. And this has been very well received. And now we are at the point that we are evaluating how we'll take the next step. We are determined that we will continue to help. But what we see is a proof how our technology and our knowledge on how to fit the patient is something that can be turned into a turnkey solution for these areas were basically nothing functions. The interest stream, and I'm very happy to be working in a company that is able to help in this manner. So to summarize. We've been expanding in the O&P clinics in the patient care. And that, we believe, has allowed us to be a better partner to not only the clinics where we have invested, but in the whole market. And I do believe that this is helping the whole industry because this has been a way for us to launch new innovation. We can launch in our own clinics faster and thereby, we can upgrade the whole market. Examples of innovation are the portal and select concepts. And in the end, we know that our presence in the patient care will allow us to capture a bigger part of the value generated in the industry as a whole. Thank you. And before we take a Q&A, I would like to invite my colleague, Christian Robinson, to talk about bracing simplified.

All right. Let me start by articulating how bracing fits into Ossur's strategic framework. What we've been explaining to you here today is about how Ossur is increasingly transforming into a patient driven organization that serves a population of people with chronic or recurring mobility impairments. And with in bracing, we provide solutions for addressing this category of people, principally with our osteoarthritis products, which has been an area of key growth and brand strength for us. We also provide products that serve people have temporary or acute injuries. And what I can tell you is we've got a very strong portfolio of products that goes from cervical collars, back braces, knee braces, walker boots and other related bracing products that solve fundamental health care problems in both the chronic and acute segments. And I've experienced this personally in my life. Over the last few years, my mid-life crisis sporting endeavors have required that I've used an Ossur wrist brace, neck cervical collar and rigid and soft ligament knee braces. And I made a very questionable decision at 40 years old to enter into a jujitsu tournament last year. And after spraining my LCL, lateral cruciate ligaments, I was wearing 2 Ossur knee sleeves. And not as impressive as floor, but that gave me the confidence to go and actually do quite well, and I won both categories in which I entered. So I'm very grateful for Ossur's products for giving the confidence of out of shape middle aged man to do something new in the sporting world. Today, I'm going to talk a little bit about how bracing has developed in recent years, and I'm going to provide some insights into our bracing simplified strategy. All right. We've seen big changes in the bracing landscape over the last few years. And we've also restructured our business in important ways to better position it for growth and success in today's market. In 2020, we pruned our bracing business. We divested in some areas that were non-focused lower growth areas, [indiscernible] is a manufacturer of soft goods and compression therapy products distributed primarily through pharmacy channels in France. We also divested 2 distribution entities in the United States. In 2021, there was a big change in the U.S. market. Competitive bidding was a program that was introduced through the U.S. Medicare administration and affected off-the-shelf bracing categories for both knee and back braces. Fortunately, the impact from that program wasn't as bad as we had feared because we prepared in advance. We help our customers implement custom-fit bracing protocols, and we streamline our bracing business to make it more efficient. It's a 3-year program. It's ending in 2023. We don't know yet. There's been no announcement as to whether the program is going to be expanded whether the same categories are going to be rebid or whether there's just going to be some continuation of the status quo. Then in 2021, we refreshed our bracing strategy with this bracing simplified strategy. I'm going to cover it in more detail on the following slide. But essentially, it's a strategy that's designed to help us innovate in areas outside of just product development, principally in experience, customer service and partnership. It's also designed to help us to run our business more efficiently. The net result of all these changes is now we have a bracing business that's smaller, more agile, more focused and with a strategy that's better suited for the current bracing market. We've also been able to launch products in key categories. Our universal adjustable cervical collar, Miami J Select, Unloader One X, our unique patented clinically proven flagship OA brace CTi3. Most recently, it's an innovative new carbon composite dual upright ligament knee brace. Been very happy about these product launches. We see the bracing market growing about 2% to 3% a year. Last year, we grew in line with the market at 2%. That included some planned product rationalization. Some of the fundamental growth drivers that we see, number one, aging population with an increasing prevalence of osteoarthritis. Also, people are trying to stay more active as they're older. Another condition that we see for growth is that there's an opportunity to differentiate in this market based on service, partnership and overall experience. And what we see and what we believe is with our target customers, they're willing to pay a premium for that differentiated experience, even when there's a perceived lack of differentiation in some product categories. In addition, we've been pleased with our ability to raise prices in recent years in the current environment. Most of our sales for bracing are in the American and European markets. We do have some sales in Europe and emerging markets. Our sales are primarily through reimbursed channels, both public and private means. This is important for us as a bracing company as there are some critical barriers for entry, principally with quality and regulatory, especially with advent of MDR in Europe. And also as to be a large-scale bracing player in the reimbursed space, you need to have critical distribution and service capabilities. As with prosthetics, most of our sales in bracing are through the O&P channel. In the U.S. and some other markets, we do have other focus customer segments. In the U.S., we're focused also on hospitals and orthopedic clinics. And one more point is even though we do have, to some extent, a separate sales channel focus between prosthetics and bracing in the U.S., we're able to enjoy the benefits of scale, shared back office, logistics and infrastructure and so forth. All right. When we set out to refresh our bracing strategy in 2020, we wanted to accomplish 2 things. First, we wanted a strategy that was not as dependent on product innovation, which in the bracing world has become an increasingly expensive and a less effective way of driving growth. Instead, we wanted to innovate in other areas. And second, we wanted a strategy that would provide a framework for running our business more efficiently in streamlining it. And our bracing simplified strategy aims to achieve these objectives through 4 key pillars. First, the core identity of our bracing business, what we want to achieve is we want to be the trusted partner to our customers. We've implemented a new sales training methodology, which is based on value-based selling. So instead of having a sales rep show up, pull some products out of the bag, talk about random features and benefits, we train our sales reps to go in, to conduct discovery, understand what the needs and the problems are that our customers face, explain and articulate how our products and solutions can solve those problems and then quantify the impact for our customers. So we're trying to help our customers grow their business, reduce their costs, make more money, make business overall easier. Customer convenience. It's not just about ease of doing business, it's also about reducing complexity for our customers. I'll give you an example. One of the biggest problems that health care providers have faced in recent years, especially our customers, and there was a question about this are staffing shortages. It's difficult and expensive to train new employees. And instead of doing what we've historically done to help our customers train their employees on bracing protocols, which is send academy team members to in-person in-service trainings, what we've done is we've invested and shifted our resources into a curated digital education platform. So what we're able to do is we're able to quickly produce high-quality co-branded education that's specific for a particular customer with their bracing protocols. So when a customer has a new employee, they're able to take this digital education, which has been deployed into their own content and learning management system and very quickly ramp up their new employee. So it's much more convenient for the customers and it's more cost-effective for us. In addition, we have a digital inventory and practice management solution that we offer to our orthopedic clinics in the United States, solve a whole host of problems for those customers. And what we see is when they go on to this platform, we have significantly less churn and a lot higher growth rate with these customers. With product confidence, we want to provide a simple product portfolio that's high value. And something significant that we've done is we brought in an external firm to train us on how to value engineer our products. And what value engineering is, as you take a product, you add quality or necessary and then you remove unnecessary features of cost to create a product that's higher value. An example of this is when I was growing up at a mountain bike that had 2 gear shifters, 2 derailers and 2 sets of multiple gears. You had 27 total possible gear combinations. If you go buy a mountain bike now, what do you get? You get 1 shifter, 1 derailer and you've only got 12 possible gear combinations. It's easier to use, it's less prone to failure and it's cheaper to produce. We're also focused on streamlining our portfolio. We believe that by reducing the number of product variants and the number of components that go into our products, we can provide simpler more easily understood portfolio of products for our customers, and we'll also have a product portfolio that's easier to manage, cheaper to manage and that we can grow faster. Finally, responsibility. This is about reducing not only our carbon footprint, but the carbon footprint of our customers. And Margrét is going to cover this in detail, but I'll just share a few thoughts as they pertain to bracing where we've started our responsibility journey is packaging. And I know at first glance packaging might seem boring, but I can tell you, packaging has never been so exciting for us as it is now in bracing. We have new environmentally friendly packaging and it's better for the environment, but it has the added value of costing less for us and delivering benefits to our customers. It takes up less space for them to store, so it's easier to store, critical in hospitals, and it's also easier to dispose of. So that's it for bracing simplified. Thank you all very much.

Thank you, Christian. I would like to welcome Gudjon back to the stage, and we'll do a Q&A session with both of these gentlemen. So we have questions already here. I would like to take the first question from Benjamin?

Benjamin from ABG here. So the first question is regarding the complete leg order is for your leg. Could you just elaborate a little bit about how far you are versus main competitors such as [indiscernible] that is offering? And also, looking at the end users, it seems like a product that will be quite suitable for emerging markets where there aren't that many patient sites. But looking at the Western markets, how would these patients sites that you don't own respond to this offering because it would takes some of their workflow way, I guess?

Okay. Yes. I do believe with that as I said before that we are in the forefront of this development, and others will be trying. But there are only very few companies capable of putting together a complete leg. And we definitely will see all the others do that. The differentiation will be in the platform. And we, as a company, have been investing heavily in our fundamental processes in the systems, and that will -- that is allowing us to do a quite good solution when it comes to the system running behind the scenes. And so we do believe that, that will allow us to be more advanced and react quicker to the needs of our clients. To the second part of your question, yes, we are -- we have already seen this opportunity that we can deliver to places where you need more -- to assist more. Yes, since I mentioned Ukraine, that was the solution that we used because not only does it simplify the ordering process, but it guides people. It's an educational I think that we can help them in defining a good combination. And as you can imagine, there's a huge need for training and education. Christian mentioned our efforts in digital training, and that is another link to that. When it comes to selling to others, it is highly depending on the type of customer. This is maybe not for everybody, but there is -- in all our markets is a very significant part of the market that are independent O&P clinics as we call them. Meaning that they are not linked to any specific manufacturer, and they are just looking for efficiency and safety. And even though this, like many other things will take some time, change is always good if you don't have to do it yourself. So it is going to take some time, but this is definitely something that will grow in those -- with those customers.

And just one last follow-up question regarding the value accretion that you get from this complete leg. Do you have any examples of a patient you had before this offering? And then looking at how much more value actually you captured by offering the full leg?

We have multiple examples. My thoughts are just about what am I allowed to promise to you guys. The -- like I said before, most clinicians have their own combination. They have their own favorite componentry. And they are not really eager to test something new. They need -- that needs a very controlled environment. The -- ordering a complete leg will mean that they -- yes, they will give it a go. And as we can prove to them, that the combinations work very well, that is sticky, that is meaning that they will continue. I think I will try to answer you in that this -- in the manner that in any area in our product portfolio, where we have been weaker, this is a method to level the playfield, and we are able to sell the full solution where we may have been only selling parts of it.

Okay. We will move on to Wei.

Wei from SEB. Also, a question on the Ossur leg solution and also the portal digital platform. When you implement or market those new strategy to your own clinic and the independent O&P clinics, I guess there's a huge difference. Could you maybe comment on the progress and also the main challenges or pushbacks from those independent clinics? And -- yes.

Our own clinics are, in some cases, leading, but not in all. Like I said before, one of the key benefits is that you get complete solutions if they are already buying complete Ossur solutions. The benefit of the portal is not as huge, then it's more a convenience. The -- I think it's safe to say that it is -- there are multiple things that we need to take care of. One of the things is the connection to all their local ERP systems and all kind of data that they need to get, and that may mean that people are not that eager to log into another platform. But as soon as we get people to test and see the benefits of doing that, then we normally see. And we track very carefully how many are buying and leaving and how many are buying and staying and we are getting better and better as we develop. We have a lot of good people developing our digital solutions. And as many people in here probably know better than I, it is all about being agile, being fast in meeting the customer demand. And by doing that, we have been improving a lot. We have done that mainly in the U.S. market. And please step in Christian at any point. And -- but we feel now that we are at the stage that we can take it to other markets. We do know that markets are different. We've been around for a while. So we are not expecting it will go easily, but we will definitely find a way to put this to use in all our key markets.

Just want to follow up on this. So could you maybe provide a sort of or indicate a trend with the independent big clinics? How has the adoption been so far in the U.S.?

Of the Ossur leg program in particular, it's been very good. It's been very successful. And I think one of the things that's been great about it is it helps us target customers that might not have otherwise been a focus customer for us. And it's really exciting because you see customers that have been struggling with staffing issues or that are trying to start up a business, and we're able to achieve a much higher penetration in terms of product than we otherwise would. So it's been very favorable for us. I would say one of our biggest challenges has just been scaling the program and the complexities of scaling custom manufacturing. So it's just been challenges from growth essentially.

Okay. That would be the last question of this Q&A session. If there are any more questions, we will also have a Q&A session at the end today where we'll have a Q&A panel where all of the executive management will be up on stage. So thank you very much, Christian, and thank you, Gudjon. And now I'd like to welcome Margrét Lára on to the stage.

Hi. So now you have heard about our growth drivers and bracing simplified. A lot of things that we're going to do. But we are also going to work on our sustainability commitment. And it's one of the foundational pillars of our growth '27 strategy. We believe that sustainable growth is the only way to build a successful and responsible business for the benefits of future generations. Our sustainability commitment is called Responsible for Tomorrow. We have 3 main pillars of our commitment. It's about our environment, it's about our people, and it's about the business that we conduct. And then in the center of all is our mission and purpose that we improve people's mobility so they can live a life without limitations. We have 3 the main pillars of our sustainability commitment. And in those 3 pillars, we have metrics and action items and targets that we are working on. And we, of course, support the United Nations Sustainable Development Goals, and we have selected and have metrics in place for 6 of the 17 goals. And those are linked to our sustainability commitment. So let's now dive into each of the pillars of the sustainability commitment. When looking closer at our environmental pillar, we are reducing the environmental impact by focusing on our operations, our products and our supply chain. For our operations, we've been carbon neutral for Scope 1 and 2 and selected 3 emissions now for the -- for 2 years, and we have actively been improving our energy efficiency. We now source 99% of electricity from renewable energy sources. And last year, we're committed to setting science-based emission reduction targets that are in line what climate science deems necessary to limit global warming. And I heard in the lobby this morning that people were missing the global warming here in Copenhagen, but so -- but we are working now on these targets, and we will submit them for validation for -- to the science-based target initiative later this year. We are -- you heard Christian talk about the environmental impact of our packaging. And we are working on reducing the environmental impact of our products and packaging. And we have marked opportunities for improvements through our life cycle analysis on key products. We have already implemented improvements on selected packaging. And we are committed to continue our packaging journey. It's a win-win for us and our customers and the environment. We also have marked the main emissions in our supply chain, and we are launching a supplier sustainability program this year with the aim of reducing our supply chain emissions. So all those milestones that we are working on now will lead to the target of being net zero in 2050. And through our people pillar, we take responsibility for enhancing the social well-being for people and communities, focusing on our customers, our employees, our suppliers and communities. You've heard Olafur, Hildur and Gudjon talk about our -- the shifting rate of prosthetics. And it is an unacceptable fact that people are not able to stand up, like Hildur talked about, a part of being mobile. And our biggest positive impact to the communities and to our customers is through our products. And UN sustainability development goal #3 on good health and well-being is a primary call for us. And we have a project ongoing related to that goal where we're designing functional products for the elderly population. And it is even -- the testing rate for the elderly population is lower than you heard from Ólafur and Hildur. It's only 30% to 40% of new lower limb amputees that are functional products. Meaning that 60% to 70% of people are not getting prosthetic products, which reduces their life expectancy and mobility. So we have announced now 3 products related to these initiatives and the fourth one will come out early next year. Then it's our employees. Our greatest assets. And we just got the results from a workplace survey where we see that our engagement scores are increasing between years. Very happy to see that. We, of course, in place diversity, equity and inclusion in our organization, and we monitor the gender split in the organization very carefully. And currently, we are quite even gender split with 51% male and 49% female. And of course, our employees are able also to register as non-binary in our systems. Currently, the female in management positions is -- the ratio is 38%. And we aim to increase that ratio and have it more in line with our overall gender split. And we have a target on the overall gender split. We want to be at 50%, plus/minus 10 percentage points in the organization. We launched a give back program 2 years ago, whereas we assure employee can give back to their communities, get 1 day per year with -- pay to give back to their communities. And this program has turned out to be a win-win program for everyone. It's a positive impact of our communities, but also a great team building efforts within our organization. So 4,000 employees can go 1 day a year and get back to their communities. And you heard Gudjón talk about the human rights that we're providing in Ukraine by providing our products to the victims of the war. So it is good to be able to give back to the communities. Then it's our last pillar, which is our business. And we believe that integrity and transparency are the foundation for a responsible business, and we practice sound governance in all our activities and ensure transparent reporting of our business practices. As a part of being a responsible business, we encourage our employees, business partners and customers and all stakeholders to raise any observations or knowledge of misconduct or unethical behavior in our whistleblower system. It's called Össur speak-up line. We launched new Code of Conduct last year, and we are in the process of training our employees on new Code of Conduct, and we've already trained 73% of our employees. We are like other companies preparing for the new CSRD regulations to take effect in '24. And we will, of course, be ready and prepared to report accordingly when that comes. So to sum this up, our purpose places us in a unique position to contribute in a meaningful way to the society. We will continue through the design and market functional products for elderly amputees. And this, of course, relates to the action items for goal #3 on good health and well-being. And we need to get more elderly amputees on prosthetics. We have committed to science-based targets last year, and we are submitting our targets this year. And sustainably, this is now working on our ESG risk rating scores, and you will see that in the coming weeks, the results of that work. But sustainability is impacted throughout our organization. It's a simple model that we have in the organization for everyone to understand what sustainability is about. It's about the environmental impact. It's about our people and the business that we conduct. And we have to ask now to be responsible for tomorrow. And here, we can see a message of our sustainability commitment. [Presentation]

Good day, everyone. I'm going to talk about Össur financials, and I will tie Growth'’27 strategy to our financial ambitions. So Össur has a solid and focused business. Business, which is resilient and has been growing. Growing in all regions where we operate, growing through challenges in external environment in last years. We have made prosthetic product acquisitions to strengthen our product portfolio. And we also acquired patient care companies, both in Americas and in Europe. And in emerging markets, reaching patients through direct market access model. Bracing & Supports has been streamlined. We've made some divestments. And we have implemented embracing Simplify strategy, as Christian talked about earlier. Looking ahead, we see opportunities to deliver strong organic growth and margin expansion. For 2023, we are guiding sales growth to be between 4% and 8%, and EBITDA margin to be between 17% and 20%. So key topics I'm going to talk about today is how business mix has changed and has been changing, and our new sales segmentations. Financial ambitions of Growth'27 and strong cash growth -- a strong cash generation. Our business mix has changed significantly over the last 5 years. And we see focus on chronic mobility challenges, it has been increasing. The change has been driven by organic growth, by acquired growth and divestments like we -- like I mentioned earlier. And as you can see, over the last 5 years, patient care have grown materially and is now 36% of sales. At the same time, Bracing & Supports has decreased to 19%, while prosthetic product sale is stable around 45%. As our business has changed, we are introducing new sales segmentation. We are introducing a new salesman patient to increase transparency and to provide more visibility into our sales performance. Current segment reporting is focused on product delivery, that is prosthetic and Bracing & Supports. New segmentation reporting better reflects our current business model as a vertically integrated provider of mobility solutions. We will now provide both total product sales and external product sales and report patient care as a new segment. We will also continue to report organic growth, acquired growth and local currency growth for the segment as we have done in the past. For more details, I would like to refer to our announcement from last night, where you can see new sales segmentation for the last 3 years. But then let's talk about financial ambitions for Growth'’27. Our sales growth ambition is 7% to 10% a year sales growth on average in local currency, as we talked about earlier this morning. Our ambition for organic growth is 5% to 7% yearly sales growth on our rates and to grow additional 2% to 3% through acquisition. Our ambition is to gradually increase EBITDA margin. And historically, EBITDA margin has been between 18% and 22%. EBITDA margin is though subject to acquisition, currency movement and changes in business mix. Capital allocation remains unchanged. We will prioritize growth opportunities. We will do value-add investments and acquisition. At the same time, we will always focus on maintaining a healthy balance sheet and target range remains between 2 and 3x in net interest-bearing debt to EBITDA. We will also continue to return excess capital to shareholders via purchase of own shares. In following slides, I will go into a bit more details about our financial ambitions, starting with sales growth. So I'll just share this slide with you this morning. The interest rate fundamentals are positive and estimated market growth is between 3% and 4%. Historically, Össur has grown organically between 4% and -- 4% and 6%. But with changes in business mix, we believe that our current portfolio has on average, more favorable organic growth potential or on a normalized base around -- in the range of 5% to 6%. You heard Ólafur, you heard Hildur, Gudjón earlier this morning, talk about how we'll drive targeted initiatives across the 3 growth drivers. Our ambition is to strive for accelerating organic growth through execution of Growth'27 initiatives. And as has been mentioned this morning, in short to medium term, it's all about Bionics. It's about annuity markets, and it's about capturing more of the value of each leg we built. Hence, going forward, we see organic growth and put our organic growth ambitions to be in the range of 5% to 7%. There will also -- there has been and will be a continued focus on investment opportunity, investment in new technology and to expand the product portfolio and investment opportunities to gain. We also see opportunity investment to gain market access. Focus on value-add acquisition will continue to be part of our growth strategy, with 2% to 3% acquisitive growth per year on average. Our ambition is to increase our EBITDA margin, and we see several opportunities to do so. We will continue to see positive effect from product mix as prosthetic is growing faster than the rest of the portfolio. Also, as the supply chain normalize, we will get back to seeing improvement in unit cost reduction of 2 to 3 years, but this is very integral part of our manufacturing process to currently and constantly improve our processes and our unit cost. We have operating leverage in mainly G&A but also on S&M. And if we look at those items together, we've seen historically, 25 to 75 basis point increase in EBITDA margin as a result of this dynamic. We will continue to adjust pricing as the investment system adjust to inflationary environment. And we further -- as we further expect normalization of some items like freight, that has been extraordinary high in recent years, but it's already coming down. We will also see some margin increase due to that. And as Gudjón mentioned this morning, we are yet to harvest more scalability in our patient care platform as we continue to develop that. On the investment side, it is mainly continued focus on investment in R&D. It's about expanding in emerging markets and the digitalization initiatives. Acquiring companies in most cases, have lower margins and FX will, of course, continue to be both positive and negative. These are the main building blocks that we expect to move our EBITDA margin going forward. On this slide, we have some householding items. Össur has a history of healthy balance sheet and strong cash generation with majority of EBIT being converted into free cash flow. In 2022, free cash flow was impacted by inventory buildup, while both accounts receivable and accounts payable stayed stable. Due to supply chain challenges and shortages of some components, we decided to increase our safety stock, just to ensure product delivery to our patients. As the situation normalize and all else equal, we expect inventory to come down and reduce between $10 million and $15 million over time. Effective tax rate is in the range of 23% to 24%, and we have a stable CapEx around 4% of sales. Net interest bearing debt, like I mentioned earlier, target stays in 2 to 3x. And excess capital will be returned to our shareholders via purchasing our own shares. At year 2022, the leverage ratio was above our target of [ 3.2% ]. Because of that, we stopped our share buyback program. Not stopped, we posted, just to have that said correctly, but we will evaluate on a quarterly basis when to start the program again. Over to summarize. We have introduced new sales segmentation reporting to better reflect our current business and to increase transparency. Our ambition is to grow sales 7% to 10% yearly on average. And our ambition is to gradually increase the EBITDA margin over time. The main drivers being positive product mix, scalability in manufacturing and operating leverage on fixed costs. We will deploy our strong cash generation for strategic investment and acquisitions. And with those key messages, I complete the financial overview. Thank you all.

Thank you very much, Arna. Now I would like to welcome our executive management to the stage, and we will have our Q&A panel. While they are walking up on stage, I would like for you to watch a video on the screens. [Presentation]

Well, thank you. Yes, that deserves the claps, definitely. It's always good to go into a Q&A session with goosebumps. So now we have welcomed here back on the stage all the presenters and the executive management team. I would especially want to welcome Egill Jónsson, EVP of Operations, also on to the stage.

So now we will be taking the first question. If we can move the microphones over here, and I will read the question that we have from the virtual audience to start with. And this is -- I would like to direct this question to you, Arna. Are you going to raise capital to accelerate the Growth'27 strategy since your leverage is above your target leverage range?

So as I talked about earlier, we have a strong cash generation. And in a normal year, we are seeing around $70 million free cash flow from our business. We believe that this cash generation will be -- will enable us to continue with strategy we have today. And when we add to that, that we are decreasing our inventory and seeing a reduction of between $10 million and $15 million, we believe we will be -- and we will be with this in the target range this year.

Thank you. We have a first question here from Yiwei.

Yiwei from SEB. I think Arna has partially answered my question. The 2% to 3% acquisitive growth, should we expect a stable contribution over the coming years? Or it will be a fluctuation? I'm asking because, as I can see, the leverage and the balance sheet doesn't look like you have a lot of room in the short term to do acquisition. At the same time, if you want to resume the share buyback program?

We should expect some fluctuations in terms of contribution from M&A as we've seen historically. We are -- we have an active pipeline. We are always screening for the right opportunities along the 3 M&A categories that we have talked about here today, but you can expect some fluctuation. But in a normal year, on average, 2% to 3% from our -- from an M&A strategy. And as Arna mentioned, our free cash flow is strong. And the last normal year, if you look at 2021, we created something like $76 million to $77 million in free cash flow, and acquiring 2% to 3%, that can mean anything between $30 million, $40 million, $50 million, depending on, again, most deposit type of assets that we are buying. So we still have ample headroom within our organically generated cash flow to support our overall growth strategy.

Great. And I have another question regarding the 2% organic growth in Patient Care in 2022. Is it possible to split the growth to the same clinic growth and the -- clinic growth -- I guess most of that will come -- has been come from the same clinic growth.

That's a good question. We'll continue to sort of develop our reporting on the Patient Care sector. And I also expected to start to report on sort of development in patient volumes year-over-year. The 2% growth was very much impacted by the fact that at the beginning of last year, we stopped the business with the Walter Reed partner in the U.S. So on a normalized basis, we are growing faster than the market in 2022. So -- but yes, same-store growth is a metric that we will look into providing because ultimately, that will give the best indication of how our organic business is developing.

We'll be taking the next question from Christian.

So a couple of questions from my side as well. So -- can you give us some kind of an indicative margin potential as you see it for the patient care business? So you mentioned in the presentation that U.S. clinics in general is delivering a margin of around 8% for the market. I'm assuming that's an EBIT margin. Correct me if it's EBITDA instead. But what is -- how do you see the sort of potential when these are mature, fully integrated into your business?

Yes, it is EBIT margin, what we showed earlier, and that is reasonably indicative of, let's say, the profitability level in an average patient care business. However, it does differ. It differs because of, let's say, the patient types that are treated in O&P clinics and reimbursement systems. And for example, in Europe, your typically more mature systems that have a more diversified portfolio and on average, perhaps a little bit lower profitability. While in other markets, which are more heavy on prosthetics, you see higher margins. And the assets that we've acquired are both above and below that industry benchmark, but I think that's a reasonable indication we were to work with. In terms of, let's say, where we can take our platform, we are not going to put a specific target on that. But as Gudjón mentioned, there is a significant opportunity to increase productivity and how mobility solutions are created. Because -- and drawing parallels to other industries, dentistry, hearing aids, others, there's a lot of activity at the front end of the value chain to take customizing solutions. And there's a -- and at the end of the day, the opportunity and our job in this industry is to drive more quality and more productivity and how these solutions are created. And that is going to drive margin expansion in our underlying business, but also it's going to position us better as a stronger partner for inter patent clinics. Because it's -- and that's again a strength we derive from being in the whole value chain is that we can do these things at scale and then share those benefits and act as a more comprehensive partner for independent clinics. And that's again a key element of how we derive strength from being in the whole value chain.

Maybe a quick second question, if I may. So given that you're now growing in patient care, should we still think of your R&D investment level as being 5% of total sales? Or will that essentially keep a fixed ratio to your product sales?

We have historically invested at a faster pace in R&D than we've grown our top line. So if you saw on Arna's EBITDA speech, we intend to continue on that path. And as Hildur talked about the intensity in our R&D investment today is on what we are good at. That's the core in creating prosthetic products to solve the unmet need there is in that market. However, as we start to look at how we operate in the whole chain, we would start to see where we can also channel some of our innovation efforts into, again, being more efficient in the delivery process. So we will continue to grow R&D at a faster pace than our organic growth sales growth.

Okay. We're getting questions also from the virtual audience, and I would just like to remind you for those of you who are watching the Capital Markets Day online that you can type in your questions in the question function on the screen in front of you. I will be taking the next question here from Benjamin.

Benjamin from ABG. My question is regarding the EBITDA margin, as you mentioned before. So while I do understand you are not providing any 5-year target due to rational flexibility, all else equal with this Growth'27 strategy and on numerous opportunities to improve the EBITDA margin. Would it be fair to assume that the EBITDA margin over the next 5 years would peak above 22%?

Difficult to say.

I understand that you're fishing for a number here. Now Arna has the disadvantage of that me have previously been here also I have a tendency to jump on this finance questions. So I apologize on that. What -- I understand you want us to be more specific on margins. I fully understand that. Just a few things for you to think about, let's say, on margin -- and core EBITDA margin 10 years ago when we started this journey of building a business at the front end was about 18%, 19%, 10 years ago. Now it's 1/3 of our business, and the margin is still similar. What that means is that we've had an underlying improvement in the underlying business. That's what we're always trying to explain. There's an underlying gradual increase in our margin through product mix, through cost efficiency and scalability on the OpEx side. And now we're talking about the opportunities we have in delivering full solutions and delivering mobility solutions more effectively. And with more scale and with good execution on those initiatives, we will see an increase in margin. But that is subject to what happens on the M&A side because the margins differ in terms of what companies and types of companies we will acquire. So that is the hesitancy in terms of providing a specific guidance on margins as we feel that boxes us in terms of -- and will create complexities as our business mix changes. But yes, we do have an opportunity, and that is our job to deliver profitable growth. And now being in the whole chain, capturing more profit from every solution that is created, and that is ultimately the logic of being mostly integrated and provides resilience and strength to our business model.

Thank you. I'll be taking a question here from the virtual audience. And the question is, I'm going to -- it could be directed at multiple EVPs here on stage. So now it's a question who is going to jump for it. No, I'm going to pick a few. So you wait and see. But what exactly does the inventory contain? Are these individual components or finished products? Is there a risk with regard to depreciation?

I think it's obvious that I should take this question. It's quite a normal question. The answer is, it's both. It's both raw materials and components and finished goods, especially in Bracing & Supports. And that part ties to the troubles we had with Asia throughout the COVID. Not the Asian manufacturing, but the transportation was kind of screwed in COVID. So we have too high of -- I know, or we have a high inventory of Bracing & Supports. We are definitely on the way scaling it down. But we have, as well, fortunately best inventory of components and raw materials for the bionic platform. Last year, we had supply problems on the [ bionic ]. The good thing is we are absolutely kind of in a way better mode now due to the inventory. By the way, we will need to keep a high inventory there for a while, but we will then start scaling it down when we are kind of -- when the supply chain issues are more behind us.

Okay. And we have a question here from Helgi.

Helgi from Arion Bank in Iceland. First of all, thank you guys for a great event. It's really informative, and thank you, analysts, for good questions. There are a few of us here from Iceland today in the audience. And just it's more of a comment than a question that just saying that you set a unique company and I mean you're doing really well. And we're just saying that the Icelandic Stock Market really misses you. And if you -- I don't know if you can take the discussion with your shareholders and on the board level to maybe consider returning to some extent, being listed in Iceland because the market -- since you delisted a few years ago, the market has really grown. There are more international investors looking at Iceland or part of international indexes now. So just -- yes, that's more sort of a comment to you guys to take with you. Thanks again. Great event.

Thank you, Helgi. It's good to hear that we're missed. And I would like to direct that comment to Sveinn for you to elaborate on.

Well, the Icelandic Stock Exchange or our access to capital, so the Icelandic Stock Exchange was fundamental to what we are as a company today, and I don't think we would have gotten to where we are today without the support from Icelandic Pension Funds and Icelandic institutional investors and the Icelandic public that supported the business. So we will forever be grateful for that. And that's, again, sort of a -- just a good example of how being a listed company opens up for access to capital and creates value and creates growth. We decided to take the step to list the business here in Denmark as should have grown. And here in Denmark, we have a good, let's say, investor base and investor community that has been successful in investing in Medtech and health care companies, and that has been a good thing for us. And -- but let's say -- and we don't have, at the moment, plans for relisting in Iceland, but that's certainly as we go forward, we keep all options open. But thanks for the positive comments. I appreciate that.

Okay. I would like to take the next question here from Niels.

So I now believe you said in combination with the full year report that you expected this year to start on a strong note. We are a bit further into the year. Could you just confirm that you expect this year to begin pretty strongly?

I -- yes, now going back to like quarterly expectations, I mean, we are optimistic on this year. That's why we guided 4% to 8%. The last couple of years have been turbulent because of COVID, because of supply chain complications, also because simply the intensity and the engagement at the front end of the value chain, has just been lower in this post-COVID period. So we expected volumes to come up and activity to come up. And again, we have -- we've never had such a strong pipeline on bionic launches as we have today. So our assumptions on the year, I can confirm that those have not changed.

Thank you, Niels. And also a reminder to those of you who are watching this live here, if you have any questions, please raise your hand, and we will pass on the microphone. So we have a question here.

[indiscernible] Regarding supply chains, have you changed your supply chains, so you get supplies for more close to the market?

We have changed in some cases, suppliers because we had -- during the COVID situation, we faced all kind of challenges and problems we never faced before. Even with suppliers we have been working with problem-free for 20 years, certainly there became a problem. So definitely, in some cases, we have just been getting new, better, more reliable suppliers. But not kind of focusing on the distance. For instance, we still get a big part or a majority of our products, Bracing & Supports from Asia. And it is, at the moment, quite solid, as I mentioned. We have not had problems there within manufacturing. It was more hiccups in the transportation. But definitely, in some cases, we have selected new more reliable suppliers. And in some cases, we are as well going for second source to be more on the safe side than we did before COVID.

Thank you. And we have another question here. If you could pass the microphone to Christian. He has already grabbed the microphone.

Just a follow-up and a question for clarification. So -- on the slide you've shown a number of times today, you have this expectation for 3% to 4% market growth. And one of the detractors that you mentioned is pricing. But you put that in brackets that it's a short-term thing. Can you maybe clarify to us how we should understand that?

The pricing in the markets where we generate the bulk of our business has been stable. Reimbursement is stable and pricing is all a sequel stable year-over-year. And on the prosthetic side, we grow by more people having access to better technology and also better access in private pay markets. And on the Bracing side, it's just the traditional health care growth drivers, aging population, demand for more active lifestyle, the prevalence of osteoarthritis, et cetera, that drives volume growth. So pricing -- but if anything, if we look again over the last 10 years, there's been an increased willingness to pay for good mobility solutions. And we see more and more markets being receptive to Bionics. Just last year, and you correct me, if I'm wrong, like, for example, in Belgium, we now have reimbursement for Bionics, which we've not had historically. Some of the big systems in Europe, NHS around 2019. So it's not many years where the system has been open for paying for these products. So -- if anything, there's more willingness to pay, but we can do more there. If we are to succeed with our growth plans over the next 5 years, we need to continue to invest more effort and get better in influencing reimbursement and those that decide in terms of what is paid for.

I can also add if I may, to the [indiscernible] -- the reimbursement levels are often indexed in times of high inflation, they will go up, but there's a time lag. So we may see -- the development of reimbursement will be in line with inflation, but it will take some time. And that sometimes can cause a short-term impact.

Thank you. So here's a question from the virtual audience with regards to sustainability. So I'm directing this question at you, Margrét Lára. The question is, are your sustainability targets tied to management compensation and to your financing costs?

Yes. We got an approval of a long-term incentive program, new long-term incentive program in the Annual General Meeting in March. And we have tied sustainability targets to the executive team's long-term incentive plan and also to the short-term incentive plan this year. In our financing agreements, we also have sustainability targets.

Another question from the virtual audience. I would like to direct this to you, Hildur. You mentioned the new product innovation. I believe you called it a breathable liner. Can you elaborate on that and the potential you see for it?

Absolutely. And -- for those of you here, we have a sample here on the stance that we can look at later. So this is a solution. This is a system. It's a liner and a socket combined, where we have built internally capabilities to 3 different silicon, utilizing and building on the Össur known comfort and suspension of the silicon that we use in our typical liners and bringing into that, the breathability, that is, in our mind, critical for amputees to really reduce this sweat buildup in the socket and reduce the impact that it has on their daily lives. However, like I mentioned before, it is not only about the comfort for the patient in the short term. It is also about the long-term impact. And like we discussed, sweat can lead to skin issues, and skin issues can lead to other complications that are both costly and time consuming to impact. And that is what our clinical studies are focused on to show the impact that we can have in the long and the short term to benefit the payers and the total cost of care for the patient. So when it comes to the potential and the benefit for the users, I think that's undeniable. And then it's up to us to carry that through and ensure that people have access to that type of solution, based on the evidence and the potential.

Okay. Thank you. Another question here is on Bracing, Christian, directing this at you. Can you tell us -- you talk about a differentiated experience. Can you please -- embracing, can you please elaborate on what you mean by that?

Yes. I think -- we think of experience in terms of ability to generate value, increase revenue, reduce costs, improve quality of life for our customers. And I think we see doing that on 2 big trends that exist in medtech. One is this ecosystem of services and products. And how can you have an overall ecosystem that's complementary to the overall experience. We did that with our digital inventory management system, for example. Also, you see trends in medtech that have to do with this omnichannel concept, more touch points. We have a new digital marketing platform, curated digital educations. We're finding new ways to interact with our customers and engaging with them through different curated channels. And the net effect of that, it becomes easier to do business and reduces complexity for our customers.

Okay. And then one question on emerging markets, Ólafur, directing this at you. Can you tell us what are your most important emerging markets?

Yes. I mean in terms of, let's say, success over the past few years, we can definitely call out China, Brazil and South Africa. These markets have done really, really well by doing -- building up the infrastructure, did that probably close to a decade ago. And now there are just other markets coming strong in that we went direct in the past few years, to name a few. East Europe is coming strong in. We've gone to Mexico recently. Yes, and then there are on the horizon some other markets that we are looking to build establishment in.

Thank you, Ólafur. That will be the last question of today. If you have any further questions, you're welcome to contact me in Investor Relations. And if you would like to set up a meeting as well, please feel free to contact me as well. Any final words, Sveinn?

Yes. Thank you, Edda Lara. Just a few words at the end. I've been -- on Saturday -- I have the privilege of being in my new role in Össur for a full year. And it's been a pleasure timing around to our locations and been in all our regions, met a lot of our customers, the people that use our products. And our strength as a business is our purpose. We have a very, very easily understandable purpose, and you saw that earlier with Fleur talking about what she is doing and how she lives her life. And this is our, I think, our most valuable asset. It drives engagement. It drives energy in the organization, and it's a privilege to be a part of that journey. Now we -- this team here and the whole Össur team, we're building a patient-centric health care company that is going to take the lead in developing solutions for individuals that have a chronic mobility channels. We talked about the structural growth opportunities we have in our core markets. Ólafur talked about the low fitting rates, the low penetration of bionics and opportunity in emerging markets. And Hildur talked about the opportunities or how we're focusing in terms of what problems are we solving. And then finally, on the O&P value creation topic, this is where we have an opportunity to change this industry. To change our mobility solutions are created to create more efficiency and more quantity and being laser focused on developing the best possible patient care. And that's our job, and that's how we're going to drive organic growth rates. We thank you all for being here today. All of you are also a big part of this journey. I want to thank also the people that have produced this event, and the whole Össur team and my colleagues here on the Össur executive team, and thanks a lot for being with us here today. We greatly appreciate it. Thank you.