Ambu Stock

Ladies and gentlemen, welcome to the Ambu Earnings Release Q3 2025-'26 Conference Call. I'm Vicki, the Chorus Call operator. [Operator Instructions]. The conference is being recorded. [Operator Instructions]. The conference must not be recorded for publication or broadcast.

At this time, it's my pleasure to hand over to Britt Meelby Jensen, CEO. Please go ahead.

Thank you, and good morning, everyone, and welcome to this earnings call for our Q3 '25/'26 results. My name is Britt Meelby Jensen. I'm the CEO of Ambu, and I have Henrik Skak Bender, our CFO, with me today. So if we move to the next slide and then the next one again, I'll start with a review of our business and progress before I hand over to Henrik to go through our financials.

And starting on the next slide, please, with the highlights for Q3. Overall, we see a very strong shift towards single-use endoscopy. We continue to lead this conversion to single-use by bringing new innovative solutions to the market that can address a wide range of procedures, also supported by key opinion leaders across the different areas that we are in.

In the quarter, this was most evident in the reacceleration we have seen in respiratory, which, as you know, is the first area we entered. Here, we grew 17.1%, which was driven by our bronchoscopy portfolio, but supported by the strong synergistic effect from our new radio laryngoscope solution, SureSide. In neurology, we grew urology, ENT and GI. We grew 15% in the quarter, resulting in a 16% growth overall of Endoscopy Solutions.

In APM, after 2 quarters of negative growth, we returned to positive growth with 1.6%. And we also announced recently a new solution, Neuroline Concentric that is positioned to support further growth recovery. Our EBIT margin came in at 13.5%, both reflecting increased investments and partly offset both by tariff reclaims and scalability. We expect the reported EBIT margin to land in the upper end of our 12% to 14% guidance. And in line with the communication that we had in Q2, that we were trending towards 10% organic growth for the full fiscal year. We are confirming this as we are updating our revenue guidance to around 10% growth.

So in total, we continue to be very well positioned to deliver strong organic growth and increased profitability over our um-ahead period.

Let's turn to the next page, please. And here, you see a lot of numbers as usual. And overall, these reflect a very strong financial position, cash generation and high revenue growth. So specifically, as I just mentioned, I want to highlight the 16% endoscopy growth and that this segment now represents 64% of our business. While A&PM has turned to positive growth, the volume uplift will take some time. So the low single-digit growth is the driver of our updated revenue guidance for the full year.

Also, let me again here highlight the EBIT margin, which grew 13.5% and again, highlighting that this represents a stronger growth acceleration in the second half of the year as we communicated in November when we started the year. I'll let Henrik cover this in more detail. So overall, we believe it's a strong financial position, and we are continuing to invest a lot in both innovation when it comes to commercial and R&D.

Let's look at the business in more detail on the next slide, please, starting with respiratory, where we posted really strong growth this quarter of 17.1%. And when we look at the rolling 12 months, this is -- this amounts to 11.5%. Single-use is in this segment becoming increasingly the standard of care as there's a lot of room to continue to grow with reusable still making up the majority of the procedures in this segment.

Our growth was driven by our bronchoscope portfolio, so the aScope 4 and aScope 5, where customers are also with the aScope 5 still willing to pay for premium solutions. Sure, as I mentioned in the beginning, is still an important growth driver, and that has both created a new adjacency for our business and also a synergistic market opportunity with our bronchoscope portfolio. So it contributes thereby both as an individual revenue stream and together with the full solutions of bronchoscopes.

When we take a step back, we are very optimistic about the respiratory portfolio in general. And I want to highlight when we look at these numbers that this is a great example of how we are proving that the playbook that we have and that we have used in recent years that works and how we continue to drive new innovation that is differentiated in the market and thereby accelerating growth also in this segment, which was the first we entered, as most of you know now many years ago.

So if we move to the next slide, this is the other part of our Endoscopy Solutions, so urology, ENT and GI. And here, we delivered 15% growth. And when we look at the rolling 12 months, this amounts to 16.9% growth. As we mentioned in Q2, we were impacted a bit by some of the deliberate U.S. commercial adjustments that we did in April that position us well for long-term growth. And we continue to see momentum coming from those adjustments that we made.

But when we look at where the growth is coming from, most of this is really driven by our existing portfolio of cystoscopes and ENT, and it's a continuation of the momentum that we have seen in the last quarters. When we then to comment on the 16.9% rolling growth, this is also the level that you should expect short term for the business.

I believe it's quite solid growth, and we have good solutions in the pipeline on top of this that we will bring to market over the next 2 years that should both support and also strengthen this growth momentum that we see in this group.

So let me move to the next page and to anesthesia and patient monitoring. But before doing that, I think I should clarify that overall, the growth that we see in endoscopy growth in the Endoscopy segment of 15-plus percent this year is something that we believe is very well on track to deliver over the strategy period, 15% to 20% as we set out to do last year and the 15-plus percent growth represents also what we communicated back in November.

So now moving to A&PM, which now represents 36% of our overall revenue of the company. And we returned, as I mentioned, to positive growth of 1.3%. And when we look at the rolling last 12 months, this is then now 1.3%. Patient Monitoring continues to show solid growth here, but anesthesia is where we are seeing the annualization effect from some of the volumes that we lost on selected accounts as we communicated in Q2. It's important to say that we have not seen any further losses in customers in the recent quarter.

The changes that we saw came on the back of 2 years of price increases where it takes some time to get that volume back that we lost. We still expect once this is normalized, that the business will follow the market growth of 3% to 5%, and overall, we believe that when you look at this segment, the growth should going forward be supported by the new MRI and CT compatible electrodes that we recently announced.

So let's move to the next slide and look at the progress that we've had on this strategy. So there's a lot of this slide showing that we have and we are continuing to see a lot of momentum here 9 months into our ZOOM AHEAD strategy. And I'm very pleased with the execution and the speed that we see across the organization.

I'm not going to go through all the details that you see on this slide, but let me just highlight a couple of things here. One is the sure side, reiterating that we are very much on track and very excited about the progress we see on the launch of this and also the very strong positive customer feedback that we continue to get on this solution. Then also the second thing I want to highlight here is our Endo Intelligence, which we launched at our Capital Market Day and where we are continuing to expand our capabilities in this field, and we are continuing also to advance our solution.

And one recent validation of this is the best-in-class cybersecurity validation that we got on our monitors. And this is really crucial for the Endo Intelligence platform because as some of you may recall, we are offering integration into the hospitals and into hospital systems as the only single-use player, something where we are seeing increasing momentum and where the cybersecurity validation is really crucial.

But let's now take a step back and just remind everyone on the strategic priorities that we made with the strategy on the next page. Because when we launched the strategy, we called out urology and respiratory as the key focus areas. And why was that? That was basically because we see a very strong trend towards single-use solutions becoming the standard of care and that this is most profound in these 2 areas. We lead the single-use conversion and also our winning formula, as I alluded to earlier, is very much driven by innovation with the aim of differentiating and for us to provide the full solutions for our customers and continuing to deliver strong commercial execution.

Let me just double-click on these 2 areas, starting with respiratory on the next page before I hand over to Henrik. So respiratory is, as I said, a clear example of how we are winning with the broadest portfolio with a 17.1% growth in Q3 and more to come. We saw competition a few years back, but came back with a full solution that addressed a lot of the different procedures in this segment. You see different parts of our solution on the left-hand side of this page.

And I want to put specific attention to our [ geocyte ] solution that we just brought to market because it is a very nice adjacent new segment for us, but it's also where we see a lot of synergies with our bronchoscope portfolio. If we look at the middle and where we have tried to illustrate where is it really we see the growth coming from in this market. And the biggest growth driver, as you see on the top here is really the conversion from reusable platforms. Despite the respiratory being a more mature market, we still continue to see this as a very strong and by far the strongest driver of growth. Then we are also gaining some market share that we were losing previously. In particular, this is a very U.S.-focused point.

And then lastly, the new product launches with Side can expand the relevance of our procedures and open up for new areas of growth. So this is precisely the split in growth. This is -- sorry, it's not so easy to have a precise split, but this is really how we see some of the key contributors to growth that we want to highlight. And as we look ahead and which is what we have tried to illustrate on the right side of this slide, the next generation of solutions that we have in development will continue to support that we both increase our revenue with existing customers that we expand also the procedure relevance in the existing markets, and this is very much the ICU and OR as we've talked a lot about before.

And then we are also being focused on driving new adoption in new markets where the OR suite, in particular, is an area that -- where there's still a lot of untapped potential. The innovation road map we have, we don't talk a lot about this for competitive reasons, but we do see exciting solutions in development that can strengthen our position in this area. So let me finish off my section here with urology on the next page because urology is, as you know, a market that consists of 2 clinical areas, cystoscopy and uroscopy.

We stepped into cystoscopy as first movers in 2020, and we have had time to build a broader portfolio here. We continue to be market leaders and to gain market share here, which is very much driven by the structural conversion from reusable solutions with a strong momentum also for our premium solution aScope 5 system. For ureidroscopy, we entered this segment more recent, and we launched our first solution into a very competitive market where we were for the first time, not first movers. Therefore, we are still developing our portfolio in this segment.

So again, here, as you see in the middle here, we have tried to illustrate also in how we see growth and where the growth is coming from. And it is, again, also the exceptionally strong conversion from reusable endoscopes, both in ureidrooscopy and cystoscopy, validated by the key opinion leaders and also with an increasing entry of other players. Then we see the single-use market share being more stable in cystoscopy and compared to urethroscopy, where we are gaining share, but from a low base and not at the speed that we were originally planning. Then most of our growth is coming here, as I mentioned before, from existing solutions. So that is very much our cystoscopes that is the main driver in urology in a very fast-growing single-use market.

So while we have the strong offering in cystoscopy performing really well, we will have the same approach in this segment as we -- as I talked about for respiratory, and that is to continue to advance our solutions and our offering and the relevance for more procedures. In ureidroscopy, our strong focus is really to gain share, and we'll do that with our existing solution, but we're also looking to win by bringing new innovation into this segment within the next 2 years that should strengthen our offering in this segment.

So before handing over to Henrik, maybe I should finish by summing up to say that how we see the market is really that single-use is becoming the standard of care and the trend towards single-use is moving fast. We are continuing to lead this. And what is really the most important growth driver is not so much the small market share shifts, but it's really the conversion from reusable where we see our endoscopy solutions growth still at 15-plus percent this year and again, confirming that we are well on track for a CAGR of 15% to 20% over our umeahead strategy period.

So with this, I'll move to the next slide and hand over to Henrik to go through the financials.

Thank you, Britt. Thank you for the update. Good day, good morning to all. I'll now take you through the financial review for Q3. As usual, I'll start with revenue development, then cover regional performance, talk a bit more on margin in particular, cash flow and finally, the updated outlook, as Britt already referred to.

So let's first have a look -- closer look at the reported revenue and organic growth on the next page. Looking at our overall growth performance, we delivered 10.3% organic growth, resulting now in a 12-month rolling revenue of -- organic growth of 9%. As Britt said, this was really driven by strong growth in Endoscopy with now a revenue share of 64% and continuing to increase as endoscopy is outgrowing anesthesia and patient mon.

Respiratory within Endoscopy delivered a particular strong quarter with 17.1% organic growth for the quarter and accelerating 12-month rolling organic growth. While ADM returned to positive growth for Q3 after a more challenging first half, -- it's still a modest growth expected for the rest of the year.

The growth is still challenged with selected customers in U.S., where we're seeing volume declines. And that is still a full year effect that we expect to see across the year, while we are now also seeing positive momentum across the business in many other areas. And that also means that A&PM again, is back in positive volume growth. This change, though, is still the main driver behind our updated organic revenue growth outlook of around 10%. I'll come back to that when I review the outlook in more detail.

Last but not least, FX continued to be a headwind in Q3 compared to Q2, where we continue to see a negative development in the U.S. dollar DKK currency, which continue to be both impacting us negatively on top line, on gross margin and slightly on EBIT margin.

Let's have a closer look at the regional performance on the next page. Overall, we continue to see solid growth across all regions. The strong growth in all regions is within Endoscopy Solutions. Growth in North America continued to be really solid, also Endoscopy Solutions, but still impacted by the lower growth in particular anesthesia on the nonexclusive contracts and the lower volume that I addressed before, and we also mentioned now Q2.

Both EMEA and particular Rest of World are on solid growth tracks, continuing to be driven by the really solid underlying endoscopy growth in all markets. With that, let's have a closer look at margin and start with gross margin. So looking at gross margin, you continue to see a steady -- next page, please, operator. Thank you.

Starting with gross margin, we continue to see a solid developing trend overall, where we are compared to last year, improving our gross margin by 60 basis points for the quarter specifically moving or ending at 59.5% compared to 58.9% for the same quarter the past -- the last year. Though for this quarter specifically, it is a lower level, and that is mainly driven by FX, by the continued FX development and the negative development I just referred to in the U.S. dollar DKK currency.

The underlying trend of the continuous positive development in gross margin and the drivers of those are really still unchanged, being, one, better output efficiency in our manufacturing sites around the world, continuing the journey of being more effective and scaling our footprint, both in China and Malaysia, but in particular, in Mexico. Improved pricing governance across the board, but particular with high focus on A&PM.

And last but not least, a continuous positive driver being that the higher growth in Endoscopy with stronger underlying gross margin continues to drive a better mix -- product mix and therefore, a better gross margin. Let's move on to EBIT. For EBIT specifically, there's a number of things that are moving around, and therefore, I really want to make sure that we are clear in terms of how to look at the reported EBIT and also the many different adjustments that are moving back and forth.

Reported EBIT was 13.5%, an improvement of 2.2 percentage points versus the same quarter of the last year. In our report, this was previously labeled as EBIT before special items, but we don't really have any special items in this financial year nor in the comparison year, we're just calling it reported EBIT.

On the adjustments, to reach what we call in our presentation, adjusted EBIT, this is really what you could say, a like-for-like comparison from previous year. Unlike in Q1 and Q2, where we saw a positive effect from these adjustments, it's really a different adjustment here in Q2.

The underlying building blocks are as follows. We still paid tariffs in the quarter, but these were lower than in Q1 and Q2, following the trend, as we said from the start, that the paid tariffs in the first half will be higher than the paid tariffs in the second half. And we still consider or expect this number to decrease further, ending basically at a run rate cost of around 1 percentage point negative effect for tariffs that we will carry over into the next financial year, something that we will also come back to.

On refunds, we received slightly less than DKK 40 million back from the U.S. government on the reclaimed IEEPA tariffs. This is slightly less than DKK 40 million because there's also an FX adjustment and smaller transfer pricing adjustments. But as you can see in our interim report Note 4, this is really the difference between the balance that we communicated in Q2 and the balance that we're now communicating as still outstanding in Q3.

In addition to that, after the closing of the quarter, we received additional DKK 85 million, which were not recognized in Q3, but will be recognized instead in quarter 4, one of the reasons why we are also now communicating a higher landing point of our EBIT margin for the full year in the upper range of our guidance of 12% to 14%. As the refunds were larger than the expenses in Q3, net impact on tariffs for this quarter, unlike previous quarters, was slightly positive.

In addition to that, we also had a smaller impact from FX, as I also mentioned earlier, if you compare this quarter to the previous 2 quarters, particularly driven by the U.S. dollar DKK development. Altogether, this means that the adjusted EBIT, as referred to here on the slide, landed at 12.5%. This is below quarter 1 and quarter 2 adjusted EBIT of DKK 15.2% and 14.5%, respectively. We did indicate in our last quarter that we did expect quarter 3 to be a bit lower than quarter 4, and that's also part of what you're seeing here.

And we are comfortable today reiterating that quarter 4 will be higher, both on retail, partly driven by tariffs, but also on the underlying EBIT. Q3 specifically was impacted by a few small time costs, particularly the commercial expansion that we mentioned in our Q2, where we did do extra investments, particularly in the U.S. to expand our sales force, and there's also always a couple of ramp-up costs on those. This is part of the selling expense line.

And secondly, we had a number of strategic projects that also were expensed in the admin line. And altogether, this contributed from -- to a slight step down in the adjusted EBIT margin from what we saw in Q1 and Q2, but we are comfortable that this will turn around for Q4.

Looking specifically at Q4, the step-up in the adjusted EBIT margin will mainly be driven by 3 factors. First, as implicit in our underlying updated guidance, we still expect higher growth in Q4, and that will drive an overall better operating leverage. Secondly, we expect a better gross margin, partly because of the continued improvement of mix towards endoscopy and partly because of geographical mix as we are expecting higher growth in U.S. Lastly, and the biggest driver of this will also be a lower OpEx ratio in the fourth quarter, particularly driven by operating leverage, as I mentioned also with a higher growth, particularly in the lines of selling expenses and admin where we do expect to see higher leverage for quarter 4.

So net-net, we are seeing what we see as a positive development. The quarter 3 is affected by a few onetime costs that are mainly impacting our admin and selling expenses. But overall, we are well on track. And with what we see for quarter 4 and the guidance where we're now expecting to land in the upper end of the 12% to 14%, we feel very comfortable about it.

Last but not least, coming back to my point about tariffs, I also just want to reiterate that the tariff cost, the underlying tariff costs are still developing as expected, and we will, we believe, end at a point where at the end of the year, we'll still be carrying around a negative 1 percentage point of impact before any tariff refunds as a negative impact we will also carry into next year. Exactly how we will end up accounting for the remaining outstanding refund claims is still an open question.

We have another DKK 70 million that could either be paid as part of Q4, i.e., if they are paid to us before end of September or could be paid later in the year. We maintain the view that we are conservative on this and we will therefore not recognize any of the tariff -- outstanding tariff reclaims until they are ultimately paid to our accounts. With that, let me move on to cash flow. We continue to see a really strong cash flow driven by both and mainly a stronger operating leverage from our improved underlying EBITDA, but also with a positive development in net working capital. The underlying EBITDA is obviously also here helped by the stronger or the additional reclaims of tariffs.

But overall, the main driver of this is really our operating leverage. That also means that we are reporting a net free cash flow for the quarter of DKK 154 million. And we continue, therefore, also to see a stronger and stronger cash conversion now for the quarter specifically at 48% and therefore, also reiterating that for the full year, we're still expecting a cash conversion above 40%. With that, on the last page, let me turn to outlook.

So ultimately, we are today, as Britt also mentioned in our opening, updating our outlook as extension of our updated view of the A&PM expectations for the full year. We are therefore now guiding towards around 10% organic growth, which really reflects that the anesthesia and patient monitoring is now expected to be very low single digit, positive but very low. We continue to see positive volume uptake in A&PM. And with that momentum we're seeing both in quarter 3 and also what we've seen since we closed the quarter, we feel comfortable that we can deliver on this.

Very importantly, again, to highlight, as Britt also did in our closing, we are seeing really solid underlying growth in Endoscopy with a continuing strong momentum, and we're therefore still guiding for plus 15% organic growth in Endoscopy, which keeps us within the 15% to 20% organic growth CAGR throughout our season period. On EBIT margin, we are maintaining our EBIT margin guidance of 12% to 14%. We still expect the uptick in quarter 4, as I just explained on the previous page. This will be supported by they claims, but also by a stronger underlying EBIT margin for the fourth quarter.

Last but not least, as I also just mentioned, our cash conversion remain on track to deliver a 40% cash conversion for the full year in alignment with previous guidance and in alignment with our long-term target.

With that, I want to hand it back to the operator for Q&A.

[Operator Instructions]. The first question from Thyra Lee, UBS.

My first question is just on margins. So I really appreciate the color that you gave on the Q3 specific factors on the underlying margin or what you're calling adjusted EBIT now. Could you just provide a little more color on why exactly the things we see in Q3 would be one-off and not persist into Q4? And for instance, surely investments in commercial expansion within the Euro ENT and GI segment doesn't just drop off? And that was just one part of the bit that you highlighted there.

And my second question, please, is one of our top incoming is what this all means for 2027. There's a lot for us to consider right now. Would it be possible for you to just speak through the key moving parts on both the top line and margins for next year, especially in light of the current inflationary context.

Thank you, Thyra. Thank you for your attention and for good questions. Perhaps I start with margin and then we can talk a little bit more about the longer term. I just want to caution today, of course, we are still within the current financial year. And only as part of Q4, we will start really talking about the guidance for next year.

So the answers for the longer term will still a little bit await what we will come in -- we will comment on our Q4. On the margin, I think the point of one-offs are really to, I think, spell out 3 main things. First, you can say that for the quarter, the commercial investments that you rightfully put are investments mainly in people, as we also mentioned in our Q2. This is particularly in U.S. focused on how we are more deliberate and you can say, focused in our ENT and urology sales forces where we've added more people.

The one-off cost element of this is that there were always some ramp-up where people are onboarded, trained and before they hit the ground running on the sales teams, you don't really see the full operating leverage. And that will impact the first quarter in particular, when you're staffing up and spending cost on recruiting and onboarding. The second and equally big, if not bigger element is that we had a couple of strategic projects.

We continuously invest in expanding our understanding of customer patterns of strategic opportunities and also long-term opportunities for us. And we have had a couple of projects that we were running just before some of our expenses for those were included in admin costs. These are not things that will reoccur. These are studies that are now over, and therefore, I'm also again referring to those as one-off.

The last, which is, of course, a difficult one and not exactly a one-off is this question of FX where, again, if you compare quarter 3 to quarter 2, that continuous decline of the U.S. dollar DK is still impacting us negatively for the quarter alone, even though we, over time, have that natural hedge that I've talked about before, where we will see also a reduction in COGS, but with some delay. And therefore, there's still some timing effect in COGS for Q3 that is impacting us negative.

If you look at the longer term, I guess, what we can say today is really what Peter already said. I think, one, we feel on a good track on endoscopy, plus 15% growth for this year and within the long-term CAGR of 15% to 20%. On margin, I think the overall themes are the same. And I just want to reiterate again because that's also been a question on tariff, we are seeing the run rate cost still for next year being around that negative 1 percentage point before any tariff refunds going into next year. So I think that's as far as we'll go.

There's still a lot of things we can see that we are executing on as planned on the operating leverage. And today, I think it's still a bit too early to talk about what would be potential inflationary topics for next year. Most of these are things we can manage and navigate mid- to long term. So I will postpone that more detailed answer to our Q4.

Yes. And maybe just a few comments on the revenue. And I've already said that, and again, we cannot be too specific. But if we look at what we see as the trend in respiratory, I think I mean, the growing momentum that we have from the broader portfolio, I think that's -- I mean, that's very much supporting our delivery on the strategic -- on our ahead strategy, sorry, with a strong continued momentum expected in respiratory.

And then as we talked about urology, EMC and GI, I mean we are also here continuing to lead the conversion to single-use and feel very confident also around the level that we have seen when we look at the recent rolling 12 months and continuation of that and around that level. So I think that's as specific as we can be now. But we continue to be very focused on endoscopy, and we are really on plan to continue to deliver strong growth across all segments here.

Next question from Martin Brenoe, Nordea.

I have 2, if I may. Actually, I would maybe just like to understand also the margin a little bit better. So I'll try to slice it and dice it a little bit differently. Maybe if you can just talk about the commercial investments that you have had in this quarter.

Based on my math, and you can correct me if I'm wrong here, but it seems like a distribution ramp-up cost of around DKK 30 million from Q2 to Q3 when I take out all of the tariff FX impact quarter-over-quarter. Can you maybe just elaborate a little bit on what that actually is going to be sort of what is that investment targeting?

And how should we view sort of the step-up in distribution costs from here on? Is this sort of a front-loading of investments into next year? Or should we expect to see a gradual ramp-up of commercial investments during the next couple of quarters as well? Just to understand whether you front-loaded your investments a little bit here or whether this is something that is maybe more of a reaction to the increase in competition that you're seeing in the urology segment?

Yes. So good question, Martin, and I can certainly go a little bit more deep into it. So obviously, you could say from one perspective, with the tariff regs and more money in the bank, we are looking at are there certain things we would we would do differently. But the first key answer is we have not front-loaded massive cost. I think on the transfer of production, there are certain one-off costs and also some that land in the distribution line when you're transferring production lines. They have not been accelerated massively, but we are continuing to invest in the scale-up, and that's part of what you're seeing here.

Except for that, and without going into the specifics of the math that you're highlighting here, around EUR 30 million, I think the key point we want to make is we continue to invest in the commercial organization. We've tried to be quite clear when we do it. And in Q3, we specific -- sorry, in Q2, we specifically called out the fact that we were investing in U.S. in that separation of the urology and ENT sales force because we see so much opportunity for both.

And now here in Q3, we have that basically settled. So therefore, we're not expecting a further gradual step-up in this cost line into Q4. That's more or less all run rate into the Q3 number you already see here. And I know this has been a debate we've had before when exactly are these materializing. But I think, therefore, the key statement is for Q4 alone, there's not an expected big step-up in commercial costs.

Longer term, I do want to -- a key point I want to reiterate is we continuously look for growth investments, of course, and some of those have longer payback than others. And that's still something we are continuously evaluating when we look at the long-term picture. But for the short term and more specifically for Q4, as I said also in my update on the underlying EBIT margin or the adjusted EBIT margin, we're actually expecting to see a higher level of leverage also on the commercial cost into Q4 given that we already made these investments and the costs were in Q3.

Just my second question, please, would be on the urology and C and GI. [indiscernible], this is maybe more to you in terms of the trajectory that we're seeing. Is this a gradual slowdown that we've been seeing for many quarters now with a few bumps, you can say, during the last maybe 2 years or so. So what should be -- what should make the market and analysts and investors believe that we will see an inflection point in this slowing segment altogether? Is it product launches?

And if that is the case, which product launches should we look for in which segment? Is it new markets that you're entering reimbursements, tenders? Anything that can provide a little bit of comfort to investors and analysts would be super helpful to get in that segment.

Thank you for that question, Martin. And let me maybe take a step back to say, I mean, last year at the Capital Market Day, where we talked about the market potential. And then you can say, has anything changed since what we communicated there. And I would say, I mean, the only main thing that has really changed from there is when we look at Uredro, as I alluded to in my presentation, that we are not gaining market share as fast as we expected in that.

And then you can say why is that? I think there are 2 things to this. One is the fact that it is a much more crowded market with many more players, and we have also talked about this before. And then the combination of that and that these sales cycles are longer because we have -- I mean, these procedures are more complex. But other than that, nothing has changed. Then if I answer your question of why is it you should believe that we will continue to grow here. We are right now, as I alluded to my presentation, seeing most of the growth coming from aScope 4 Cysto and aScope 4 rhinlLaryingo in this segment specifically. And these are both solutions that have been in the market for 6, 7 years.

And we do have improved solution in develop that we will actually bring to market that can also address a broader market and different procedures. And that is really back to, I mean, the playbook that I alluded to that this is when you look a couple of years out, what should make you comfortable that we will continue to have growth. At the same time, we are very focused on our solution and how we are differentiating on our solutions. So that's also where when we look at the full solution, the intelligence comes in where we have the opportunity with technology to also improve how we are adding value to our customers.

And this is where we are by far leading relative to all other players in the market. As I mentioned, we do have integration into hospital systems, which is significantly improving their workflow efficiency. We are the only company that has that. We are very far ahead also because we have very strong documentation on cybersecurity, and we are seeing the customers adopting that. And then we have some more groundbreaking solutions when it comes to Endo intelligence in development that I'll not go too much into for competitive reasons.

But I think that's all thinking around the solutions that we bring, moving from providing a single scope with aScope 4 Cysto and aScope 4 Rranularinko to a broader solution offering is really what should drive the growth, and we are seeing some of that momentum now, and that's going to improve as we are bringing new solutions to market in the next couple of years in this segment. And then the last one in GI, from a lower base, we see continuously strong growth percentage-wise.

And we are also seeing good momentum with the new approach we took in this segment with our aScope Gastro that we are getting momentum we have been very clear about that we have not allocated a lot of commercial resources to this because we wanted to learn and see how is it that we can really in this being the -- by far, the biggest endoscopy segment, how we can also drive the conversion in this segment as we have done in other segments. And I think we are getting much closer to, I mean, understanding what is our approach and what is it will take to also for the customer to gain the same efficiency improvement and quality in their work from our single-use solutions. So that's also why we are very confident on this segment.

And then maybe finally on uredoo, I mentioned in my presentation that we are also working on improved solution and a broader portfolio from what we -- from our aScope ured that we launched. So that's also where we believe that, that should clearly differentiate us in the market.

The next question is from Anchal Verma, JPMorgan.

I have 2, please. One is just looking at your midterm targets. If we look at your EBIT margin target that you had released around a year ago, which was for around 20% margins by FY '28 and over 20% by FY '30. Looking at where we are right now, can you help us understand that bridge from, let's say, from around 12% this year and that's calculated from an underlying ex tariff refunds basis. How would that trajectory look? Are you still comfortable around those targets? And do you think there is any risk to those targets?

And then the second one, again, on the midterm guidance was around a patient monitoring, you had upgraded that guidance to 3% to 5% top line growth. How are we thinking of that business longer term? And how do you believe volumes will develop? Again, are you comfortable with that range? And do you think there's any risk to the upper end of that guidance?

Thank you, Anchal, and great to have you back. Thank you for the questions. So let me start on margin. I think the first thing I want to remind us all is that when this 20% target was set actually originally back in ZOOM IN strategy and reiterated in our Capital Markets Day last year around this time, we also caveated that we will evaluate potential growth investments along the way and growth remains our first priority. That doesn't mean that I'm today changing the target, but I just want to remind us all that, that's been the balancing act all along.

The key components of how we get from today to reaching that level in '27, '28 are the same. It is still a combination of gross margin and OpEx ratio, of which OpEx ratio will be the vast majority of that. And that's also why we keep talking about this operating leverage point and how we see this leveraging across our organization.

Besides that, for today, Anchal, I don't want to go further in detail on exactly how this will pan out. I think with also where the focus has been in question so far, we will focus more on how we land today and how we show that gradual improvement in the EBIT margin with a continuous higher growth in EBIT than we see on the top line, what we are also expecting for this year, if you adjust for both terersin and out and FX, we will see a gradual improvement this year, and we expect to continue to be able to deliver on that. On the A&PM side, if I turn to that, I think also a good question. I think, obviously, this year, the growth trajectory looks very different.

But I want to remind you, if you go back and look across last year and this year, we're still actually solidly within our growth guidance of 3% to 5%, clearly, a little bit lower than we have been on anesthesia, but solidly still within the guidance if you consider the price increases we've done. And therefore, with what we know today and what we see and back to Britt's point, the new product also in particular for the neurology segment, we don't see any reason to change our view on the long-term growth trajectory for the A&PM segment or business area with a 3% to 5% CAGR growth across the period.

That's very clear. And just a quick follow-up on margins and input cost inflation. I appreciate you won't be able to share much thoughts into next year. But just trying to understand, do any of the contracts include pass-through pricing or inflation clauses?

So today, I cannot comment sort of on the specifics of all contracts. But typically, there is not a direct one-to-one pass-through. And I also just want to remind us all that some of the cost inflation that I know a number of other companies are talking about is still not really that impactful for us, neither on plastic resin or silver prices or the like.

So net-net of the external factors, it's still FX that's by far the single biggest impact here. And with that, I'm also really saying, Anchal, that we have time sort of in our commercial model if we see a structural change in the underlying cost of a component or a raw material that we can go out and change our contracts commercially because in many of our contracts, we have annual reviews of pricing where we have a chance to do that. In the ones that are longer, then we typically manage and we can manage also with efficiencies in our operating setup. So net-net, cost inflation still is not a big theme in Germany.

The next question is from Wei Zhou, SEB.

It's Wei from SEB. Also 2 from my side. I do one at a time. Firstly, I noticed that you highlight the ASC potential for nonrespiratory endoscopy portfolio. But to my knowledge, this is also a segment where the customers are more price sensitive. Is it fair to understand that you would be more willing to compromise your gross margin to pursue the growth? And what are the strategic priorities?

Yes. No, thank you for that question, Wei. And it is true that, I mean, we are looking at expansion into different segments and very much also are close to how the market is converting where we are seeing that the market is converting with more and more procedures being done in the ASCs, the ambulatory centers. So therefore, I mean, that's a place that we're also playing. And we are playing a bit with our pricing in terms of some of these segments, but also with a very clear price for. And this is also where I want to highlight that this is necessary to play in this segment, as you say.

But when we look at our total pricing and how our -- how we look, we are still priced at a significant premium to our other single-use players and also that some of these selected customers. I mean, we evaluate carefully how we use the price then to get volume.

And this is worth noticing that when we look to the ASCs, we are very focused on where we see the high volumes and -- but we do see back to the trend that I mentioned that they are -- given more procedures are moving there, they are also looking for a more comprehensive portfolio where our aScope 5 system in some cases, becomes attractive for them. And that's a different price point. So it's very important to highlight that on the pricing, we are very focused on avoiding dilution, but more looking at keeping the price at a competitive level where we are, again, at a significant premium to the other players in the market.

Okay. That was clear. And then my next question on cystoscope specifically. I know you have given some price concession due to the competition. Is it possible to quantify the gross margin impact here in Q3?

Thank you, Wei. So it is correct that we, as Richard said, in selected markets, selected accounts, now we've talked about ASCs are doing sort of strategic pricing, i.e., slightly lower prices at a premium to competition, but still lower versus where we came from. We're not going to quantify exactly what that means on gross margin. I think, again, balancing back versus FX effect is a bigger impact on this than these underlying trends.

So I think if you look at the overall picture, this is certainly something we are very focused on and extremely focused on in terms of the investments we're making in innovation and commercial execution to continue to differentiate ourselves. But we're not at the stage where we're seeing a wider price erosion at a bigger scale. We are more now focused on how do we continue to drive that differentiation also forward also for the segment.

And then mindful that the segment split, which we also discussed in the previous session, I think in Q2, you asked the question where -- what is the split between hospital and ASC or in Europe outpatient, where, of course, when you go more in the outpatient ASC segment, it is at a lower gross margin level than what you see in hospital, but not something that has a big effect at the group level.

Okay. If I may follow up on the gross margin. So if I understand correctly, you are expecting an improvement here in Q4. Could you name what will be the main drivers here?

Yes, of course. So it is correct. We are expecting an improvement. And as I said in my update on the EBIT margin, it is really a combination of the factors that we talked about before. I think the first one is that we are expecting higher growth overall and growth here also is a scale factor for the indirect production cost, so the fixed cost under gross margin for our factories, higher growth in endoscopy, which again is a net better gross margin, and that will also explicitly be the case for Q4.

And then, of course, I'm not referring to FX, but because we don't know where that will land exactly that is the one open caveat, which could push us one way or the other. But really, those 2 factors being the same as we've talked about before, are really what we expect to also see materializing in Q4 and therefore, with a higher gross margin as a net.

The next question from Delphine Le Louet, Bernstein.

Two questions on my side, please. One, dealing with the commercial and the commercial approach. I was willing to know what is new and specifically into the U.S. in your commercial approach that you've been putting in place over the past 6 months that will start to be visible in the next semester?

And the second question, because there is a lot of question mark here regarding this, let's say, bucket of investment cycle, but just CapEx. So just willing to know how should we read the breakup of that envelope coming up in between the manufacturing and the commercial next year?

Okay. I'll maybe start with your first question, Delphine. Thank you for that and let Henrik comment on the CapEx and breakup. When it comes to the commercial approach that we have taken, what we communicated also last quarter and what we did starting from April was that we -- I mean, we did an adjustment of the commercial setup in U.S. basically as a result of how, I mean, the customers have been changing and also where the decision-making is taken.

So we have made a much more structure that is centered around the customers itself and the hospitals, so we can leverage much more our portfolio across the different parts of the hospital. And then we have also doubled down on the potential that we have to see how is it that we have a setup where we can leverage that at the same time as going much deeper and being more specific on the different specialties that we are in where we see momentum. So that has really been the driver of setting that up. And I will say when we spoke in early May in connection with our Q2, this was relatively new.

I will say now a couple of months later, this has actually gone very well. And we -- I mean, we see we have settled in adjusting to this very fast, and we are continuing, of course, to practice on how we do that. But it's very much that, I mean, focusing on the decision-makers where we are strengthening our approach and not just the clinicians as a result of how the market is moving.

And then we talked about also other outpatient settings where patients are increasingly being treated to make sure that we have a setup that addresses that.

Yes. So building on that, I just want to -- and thank you for the good questions. As always, Delphine, I just want to reiterate what I said also before in a positive sense, we are able to attract really good commercial talent also in U.S. And therefore, we have actually had a lot of people, good people coming on board. That's also some of the one-off onboarding costs that I referred to earlier in terms of commercial investments that obviously gives us the -- puts us in a position to then also accelerate our efforts into the market, as Britt explained.

In terms of the investments rest of the year and into next year, I just want to make sure I split it in 2. So obviously, we're doing investments that are impacting our OpEx and investments that are impacting our CapEx. On the OpEx side, this is mainly investing in the commercial field force, where, of course, we are -- the run rate level we are seeing now here in Q3 and which will be carried into Q4, if you exclude these one-offs that I have talked about, it's really also a run rate level we are expecting to carry into next year.

A lot of these commercial field force investments have been a high focus of ours over the last 18 months. And in most countries, we are really now more doing small adjustments, but major adjustments. And therefore, we will continue to do those investments, but we are into a large now at a place where we're also more focused on making sure we scale the investments we've done at the right level in the right pace.

Except for that, if we then turn on the CapEx side, which I also heard you ask about, I think we are still investing obviously significant in innovation. You will also see that our capitalization rate have gone up a little bit for the quarter to be very detailed, but this is more a matter of the maturity of our portfolio and the total level of spend we have continuing to put into innovation, and that's still increasing at a solid, but also high pace because we see significant opportunity.

And as Britt said, with several product launches coming up. That's an area we're investing in and an area where we're also already investing and will continue to invest in the production ramp-up needed for those production lines. That does not mean new factories. It means products maturing the production lines and being ready for the commercial launches that will come at the scale that they are required. And those investments are also still being made and something that will carry into next year.

We have the overall capacity in terms of physical space to manage these investments, but it still requires equipment training. And obviously, we're looking also at automization as we scale our manufacturing sites to a larger extent and with that also looking for better output efficiency.

And just a quick follow-up on this one. Where are we in terms of the margin difference, gross margin difference in between Mexico and Malaysia?

So we're still at a place where you could say if you look at the landed cost of the product, excluding all tariffs, today, there is 10% tariff on products being imported from Malaysia to U.S. But even excluding that, on a landing margin, i.e., if you improve production cost and the distribution cost to the customer, it's the same level for Mexico and Malaysia.

This was the last question. I would like to turn the conference back over to Britt Meelby for any closing remarks. Thank you.

Thank you for that, operator, and thank you to everyone for listening in on today's call, and thanks, in particular, also for the very good questions.

Hello, and good late morning to everyone, and welcome to our Q2 Earnings Call for Ambu, where we'll go through our business highlights and financial results from the second quarter in our fiscal year. So my name is Britt Meelby Jensen. I'm the CEO of Ambu. And with me today, I have Henrik Skak Bender, our Chief Financial Officer.

So let me start with the business highlights from the first 6 months of our financial year, starting talking about our key growth driver, Endoscopy Solutions where we are leaders in the single-use market and where we are continuing to drive a structural conversion in the market from reducible to single-use. We delivered in the first half of the year, 14.1% growth. The guidance, which we are on plan with for the year on Endoscopy Solutions is plus 15% revenue growth. We also -- when we set that guidance back in November, we said that we will have a higher growth in the second half of the year than the first half of the year. So with 14.1% for the first half of the year, we are on plan to deliver on that.

Also, when we look at what is driving the business, we continue to see increasing traction from our new launches. I'll get back to that later in my presentation. But it's also important to highlight that the growth momentum and what is really driving the conversion from reusable to single use, it's very much the solutions that we have had in the market for many years. And this is an important highlight because this is 1 of the main dynamics of the business model that we have that we are -- with the big white space we have to capture from hospitals and clinics using reusable we can deliver growth on our solutions many years after they have been introduced to the market.

But other than driving the progress with our existing solutions, innovation continues to be a key lever in our business as we progress. And that's why I'm happy to also report that we have good momentum on our next-generation Endoscopy Solutions across a number of the areas that we are in. And we are also expanding our EndoIntelligence investments into the software, AI-driven solutions that is going to make an even greater impact for our customers as we look ahead.

So overall, if I comment on the EBIT margin, we are at -- when we adjust that for tariffs and FX, we are at 14.8% EBIT for the first 6 months of the year. If you look at the net taking into account the tariffs and FX, we are at 10.8%. The guidance that we set out in the beginning of the year said 12% to 14% Here, as with the revenue, we also said that we are going to be higher in the second half of the year than the first half of the year. So that also means that when it comes to our EBIT margin and profitability, we are on track to deliver on that.

I'll come back later in my presentation to Anesthesia and Patient Monitoring where we had a decline of 2.5% in the quarter following a strong year last year, but this also means that we see a slightly different expectation for this year than we had originally expected going from mid-single digit to low single digit. And on the basis of this, we can also see that relative to the guidance for the full revenue growth that we announced in November of 10% to 13%. We see now that we will land in the lower part of this. Therefore, we have been transparent and down or adjusting, sorry that to 0% to 2%. So we're still within the guidance that we communicated in November, but it's -- we are expecting to land in 10% to 12% rather than 10% to 135.

Let's look at the numbers now from Q2. So in Q2, the overall Endoscopy revenue growth was 13.8%. So close to the first quarter of this year. As I just mentioned, we had a decline of 2.5% in Anesthesia and patient monitoring and thereby having a total revenue growth organic of 7.3% in the second quarter. Still, we have endoscopy solutions making up now 63% of our total revenue. When it comes to the EBIT margin, we delivered 11% growth on that one. If we look and adjust for tariffs and FX, it would have been 14 -- or it will be 14.5%. In terms of free cash flow, we had a free cash flow of DKK 104 million, which is very much in line with our expectations.

So let's now dive into the segments, starting with endoscopy and starting with our respiratory business. So in the quarter, we grew 12.2% organically within respiratory. And if we look at the rolling 12 months, this is 10.1%, so slightly lower than this. And if we look also at what we delivered, the first half in total, it's 10.3%. So we are seeing a slightly stronger growth in Q2 for the respiratory business. So this momentum that we see in this part of the business is very much driven by, on 1 side, the bronchoscope where we are continuing to see a solid increase in penetration, both when it comes to aScope 4 and aScope 5.

And then on top of that, we are also seeing increasing momentum on the SureSight portfolio that we have launched -- and in the quarter that we are in now, we are starting in the U.S., bringing out the full -- doing the full commercial launch of our shoreside mobile, which means that we're expanding the portfolio that we didn't do in the previous quarter. So overall, we see the continued strong momentum on SureSight, helping to generate a bigger franchise for sure side alone but also we have the synergies with the with the bronchoscope that is also helping and will, in the coming quarters, help fuel the growth when it comes to respiratory. So overall, we are quite pleased to see the good momentum in this segment in particular also because we see ample opportunity to continue to also here increase and drive the structural conversion from reusable to single-use. And we are, by far, leading this in this segment.

Now let me turn to the other part of Endoscopy, where we still report on urology, ENT and GI together. So in this segment, we grew 15.5% in the quarter, and if we look at the overall rolling 12 months, we had 18.3%. And if we look at the total for the first half of '25, '26 million, we are at 18.2%. So if we take a step back and zoom in on urology specifically, the overall driver of the growth is still continues to be our Cysto scope. And this is again because we see the continued structural conversion to single-use in this business.

When we stood here beginning of February reporting on Q1, we said that we had seen a slightly higher number of orders towards the end of Q1 that we thought would impact this quarter that we're in with slightly lower growth rates. And this is also the key explanation between the 15.5% growth in the quarter relative to the 18.2% that we see for the total of this first half of 25, 26. So overall, this is where we are trying to be as transparent as we can around some of the quarterly fluctuations when we can see those having an impact on the coming quarter.

Also, when we look in this segment, we have new solutions that are coming out. We are still seeing continued growth and good customer feedback on these. And we are continuing to expect those to continue to make up bigger share of the total revenue in this segment. What we also see is what we have talked about a number of times now is that the there's slightly long sales cycles in the hospitals and also when they are to embed new solutions into the clinical workflows, which is the case when they're switching from reusable to single use. This is taking some time but we are very much tracking that progress and is happy to see that this progress is building over time, and we have a very strong opportunity pipeline that is turning into real orders and also rebuying customers is increasing quite a lot.

Now let me turn to Anesthesia & Patient Monitoring. So here, we saw a decline of 2.5% in the quarter. If we look at the rolling 12 months, we were at 2.5% increase. And also, please keep in mind that last year, we grew 9.9% in total for this segment. If we look at the split in the quarter between Patient Monitoring and Anesthesia, we saw patient monitoring being up by 0.4%. And then we saw Anesthesia being the 1 dragging this down by a 4.4% decline.

Now let me just take a couple of seconds to talk about what is the dynamics that happened here. So everyone understands this because, and this is very much a U.S.-focused thing, and it's also very much related to a part of the Anesthesia portfolio, where you may remember that around 2 years ago, we went out and said that we are going to customers some of the larger customers asking for significant price increases for a part of the business where we were simply not profitable. And at that time, we said maybe this will result in negative growth because we do have to get the prices up. Otherwise, we are willing to walk away. What happened at that time was that we actually were successful getting the higher price increases.

The customers did not walk away but what we did trade, which is fully normal in these situations was that we went in some of the big contracts from being an exclusive supplier to giving up that exclusivity. Then we have been trending well with no impact on volumes until recently and until this quarter where we start to see that some of these customers who accepted the higher prices but opened up for other suppliers that they are starting to now buy from some other suppliers. So this is, in essence, what is driving the minus 2.5%. And I also have to say that the volumes that we are seeing that we are not getting now is going to continue into the next couple of quarters as well.

So these are basically the dynamics, but very much something that we have been in control of ourselves because for this business, which is not -- the key part of our ZOOM AHEAD strategy or where we focus the most, we have to make sure that we are profitable and that we also set the prices at levels that makes sense. Hopefully, this is clear, and this is also the reason why we are taking down the guidance for this segment for '25, '26 from mid-single digit to low single digit.

Let me move towards to some of the progress that we're making with the ZOOM AHEAD strategy because we -- since we launched that October 1, we have had a lot of good momentum and good progress across the business. And here's a few of the highlights. So 1 thing that I want to call out is that we have made some enhancements to the commercial setup in the North America organization that we implemented April 1, where we are basically taking a step back together with Scott Heinzelman, who joined us as President of North America end of August last year to see how is it that we see the changing customer needs in the space and how are we then adjusting our setup to best serve our customers.

So this is something that we have implemented. It has been implemented very well with minimal disruption but it's something that we are continuing to get settled in on, which will bring us long-term opportunities for driving sustainable growth as we are able to better serve the customers and cater for the different stakeholders that we serve.

Then on innovation there continues to be a lot happening, and we're investing quite well into innovation. We had in this quarter the CE mark for the SureSight portfolio in Europe as we announced -- some we expect. We also, with the whole SureSight solution, which is receiving a lot of positive feedback from customers received a design award, the Red Product Design Award. When it comes to the cystoscopy portfolio, we have strengthened that with accessories that are enabling both stent removal and foreign body retrieval. So this is a way that we are continuing to implement and expand the portfolio that we have around the aScope system.

I mentioned intelligence -- EndoIntelligence earlier in my presentation. This is also an area where we continue to invest as we see very big synergies with the endoscopy solutions that we are offering in making sure that we can improve the efficiency in the hospitals and that we can even also in the future support much better diagnosis and treatment using some of the new technologies that are now available.

And then last, on the business platform, we are continuing to improve our ramp-up in Mexico, and we are on plan on accelerating that to make sure that we have a much stronger global footprint when it comes to manufacturing to first and foremost, to supply our North America customers but also in general to make sure that we have the flexibility that is required to operate in the world that we are operating in right now.

Let me finish with a couple of words on innovation and where we are on our journey towards global endoscopy leadership. So if we look at our ZOOM AHEAD strategy, we are on track to deliver on that. And there's really 2 key things that is driving our success with ZOOM AHEAD. The first one is commercial execution with the portfolio that we already have in the market and the second one is innovation. So if you look to the left part of this slide, this is familiar to several of you. This is an overview of the market where we have a lot of white space, meaning that when the market is fully converted from reusable to single use, which still has a number of years to go. We are looking into a DKK 190 billion market.

If we then look at the penetration levels today where we are, by far, the market leader, these vary across the segments with the largest penetration in respiratory, which is where we started, and we have really been spearheading that conversion. What is -- what we are very successful with right now and where we see the growth coming from is very much driving the conversion from reusable to single-use with what you see in the middle of this page, the existing portfolio that we have across the different segments where we are present in all major segments, less focused today on the gastroenterology but what I can also say is when we look ahead, we are investing heavily into innovation and into the future. So we have a very attractive bronchoscope solution in development, and we have further expansions also of our video laryngoscope portfolio in development.

In urology, we also continue to innovate with next-generation solutions on the endoscope with added features, which really is both about increasing the quality for existing procedures but also expanding the market as we can deliver a solution that fits more procedures than we do today. And then on the ENT with RhinoLaryngo, we have a next-generation solution in development. And then we also have a number of interesting developments in gastroenterology as well.

And then last but not least, because we are building everything on one software platform, it means that the hardware and the software that we are developing fits across the portfolio, which is really a key value driver for customers as they can use our systems across the full portfolio but it's also a way for us to easier leverage new technology to drive benefits across all the categories here.

So both we are doing specific targeted software AI-driven solutions but we are also looking at solutions that supports very much the efficiency and the in the hospitals and clinics with our EndoIntelligence.

So with that, I will conclude my presentation and hand over to Henrik to go through the financials.

Thank you, Britt. Good morning, good late morning to all on the call. I'm happy to take you through the financials. Narrow a little bit in on what are some of the geographical drivers of growth beyond what Britt already talked about talk about margin and share some more light on our considerations on guidance.

So let me start with growth again. As Britt introduced, we had an overall organic growth for the second quarter of 7.3%, bringing our year-to-date growth close to 8%. Rolling 12 months, that means that we are now at an organic growth level at 9.4%. Considering the fact that there's been a lot of still depreciation of the U.S. dollar, if you look at the growth in report currency, the reported growth was only just above 1% and 1.2%, mainly again driven by the U.S. dollar depreciation. The growth overall was highly driven by Endoscopy, our main growth driver of the business with a year-to-date growth of 14.1% and 13.8% growth for the quarter, continued really strong results where we feel we are on plan and on track versus our guidance for the full year.

On A&PM, we had a lower quarter, which is also why we're updating our guidance, which is what I'll come back to. And as Britt explained, this purely relates to our North American business where we saw a decline in our anesthesia sales, specifically on selected customers.

And with that, let me share a little bit more on what does the growth look like if we look at our different regions, split geographically. EMEA and Rest of World continued the very solid track we've been on for many quarters. In EMEA and Rest of World, we see continued really strong industry solutions growth and also positive growth, both in anesthesia and in patient monitoring. For rest of world specifically, we have had a couple of quarters with low growth. We saw a bigger high growth in this quarter, and this really comes back to the timing of orders that we've talked about in previous quarters, where we see bigger orders in single quarters, therefore, bigger actuations, whereas in EMEA and North America, it's more steady development.

Coming back to North America. As Britt explained in the just above 6% growth, 6.1% to be exact. We actually see very, very solid Endoscopy Solutions growth still a track we've been on for a long time. And where in particular also our SureSight launch is having really positive effects and really positive reception from the customers. On the other hand, this is also the market where we then see the negative effect from Anesthesia, where they are on selected customers have been lower volumes. On nonexclusive contracts, something that we are, of course, still working on mitigating. But really coming back to Britt's point, from the premise that we also have set certain margin targets that we're not compromising. And therefore, we still observed some of the volume losses and are managing how we can make sure we regain volumes still at the right margins.

If we then turn to gross margin. We feel, again, a good start of the year, a 60.5% gross margin for the first half year and 60.3% for the second quarter specifically. This is positively improved by a continued better absorption of fixed cost, i.e., better utilization of our production facilities. In Mexico, specifically, we continue the ramp up. Secondly, a continued positive development in our product mix with now ES representing more than 60% of our total sales, 63% to be exact and A&PM representing a lower and lower share. And with ES having a higher gross margin, that supports our gross margin. That said, particularly in the second quarter, but also for the first half, we continue to also be negatively impacted by FX, which is the only reason why we're not actually growing more in this segment.

We continue to focus on how we drive pricing governance, both for our A&PM business, but also within Endoscopy Solutions, balancing organic growth opportunities against making sure we continue to deliver gross margin improvements.

If we then turn to EBIT margin. As Britt also explained in the first page, we continue to see solid traction on our overall EBIT margin expansion plan. If we adjust for tariffs and FX, our second quarter was a 14.4% EBIT margin adjusted. And for the first half, that means we are close to 15% on our adjusted EBIT margin, again, adjusting for tariff and FX costs. In the second quarter specifically, we again had more than DKK 50 million recognized in tariff costs, and also had negative effects from FX, particularly the U.S. depreciation I talked about before.

In our Q2, we are also now communicating the number of IE EPA tariff that we have paid, both for this financial year and for the last, and I just want to reiterate, as stated in the financial statement that we have not recognized any of those as income in the statement yet and still also that our guidance does not take into account if we manage to reclaim any of those. If we look, therefore, on the right side on the EBIT margin development, of course, the reported margin development, as guided and communicated in our Q4 has been lower for the first 2 quarters for the first half year of this financial year as expected. But with our mitigation plans on tariffs and the higher growth expected for the second half of the year, we are comfortable that with 10.8% realized EBIT margin for the first half, we're still safely within the guidance of delivering 12% to 14% on the full year.

Turning to cash flow. Second quarter, as expected, delivered a solid cash flow, reminding us all that seasonality in our cash flow is that the first quarter is usually lower, second quarter better and third and fourth quarter, typically the best. Particularly in second quarter, the positive free cash flow was driven by solid operating performance but also a better development and decrease for the full year, strengthening our financial position even further.

In summary, therefore, looking at our guidance for the full year. We are, as Britt communicated earlier, narrowing our top line revenue growth guidance from previously 10% to 13% and to now 10% to 12%. This is driven by our Anesthesia and Patient Monitoring business, where previously, we were guiding mid-single-digit growth. With the lower volume on the selected U.S. accounts and the traction we see right now, we are updating this to low single digit, and this is really driving the effect on the total overall organic growth guidance.

On Endoscopy Solutions, again, we are maintaining the guidance of plus 15%, which assumes an acceleration for second half, which is what we're still targeting and seeing in trends. and particular on respiratory, assumes an acceleration of our respiratory growth where the SureSight launch and our continued momentum on driving more sales on that and the whole bronchoscopy portfolio is really driving this acceleration and still feel comfortable that we can deliver on that.

On the EBIT margin, we are maintaining the guidance at 12% to 14%. As said, again, second half, as we guided from the start will be higher growth and lower tariff costs. And therefore, we feel we are on a good track to deliver on that. Last but not least, cash flow conversion, as I just said, also on good track even though we are lower year-to-date, as the typical seasonality for our business is that we will have a higher cash flow in the second half and with higher growth and higher margins, this will be even further supported.

Last but not least, as part of our Q2, we are now also announcing and have started an extension and addition of the share buyback program. We previously announced in Q4 that we would do a DKK 150 million program share buyback program that we launched and have completed. Here, as part of Jotun, we are now launching another additional share buyback of DKK 300 million, starting today and ending no later than 30th of September, i.e., at the end of our financial year. That means that combined, we will this year be having a total share buyback expected of DKK 450 million, which is really a reflection of the very strong balance sheet that we have and the continued strong cash flow position and strong free cash flow.

I also want to reiterate, this does not change our ambition on M&A but puts it into the perspective that organic growth is our main focus. And M&A will more be an accretive lever for technology or solutions that supports our overall solution but not be big or massively transformational. Therefore, we feel comfortable that we can deliver on this and still maintain a very solid financial position.

With that, I thank you for your attention and hand it back to the operator for questions.

[Operator Instructions] The first question comes from the line of Thyra Lee, UBS.

Congratulations on the buyback. If I just do the math in respiratory and acceleration over 11.4% delivered in 2025 would imply H2 delivery of at least 13%. And then in the express business delivery the same as in '25, would imply H2 delivery of at least 21%. Could you maybe speak to the visibility you have within these 2 areas for acceleration in growth and some color on the expected phasing between Q3 and Q4, please?

Absolutely happy to take the question. So in short, you could say it is 2 slightly different drivers of the growth that makes us comfortable on maintaining the overall plus 15% endoscopy growth. Respiratory, it's very much a momentum of conversion of new customers. That means that even that we are just above 10% growth for the first half, we are still maintaining the view that we will land the year above the 11.3% and that we had for the full year, sorry, last year. It's really a conversion of new customers, and this is therefore a momentum building across the quarters.

Secondly, I also want to remind you that the comparables at the end of the year from last year are a little bit weaker relatively speaking. And therefore, if you look in absolute terms, it's actually on respiratory, more a continuation of the acceleration you're already seeing in the numbers from Q1 into Q2, further to Q3 and 4, that will drive this effect.

On uro, ENT and GI, you're also right that it requires a higher growth for the second half to deliver close to or at same level of the uro growth that we had for the full year last year. In this area, it is mainly single-use conversion of existing solutions, particularly cystoscopy and our rhinolaryngoscope in ENT that are driving this, supported by more and more sales on the ureteroscopy product though still that is coming from a low base and not a very big contributor. So on the uro and ENT and GI side, it is more an organic conversion from reusable to single-use. One of the key factors for us to continue to drive that is commercial efforts, which is also why, as Britt highlighted, we have invested in an updated structure in U.S. particular, where we still see a lot of potential. Of course, there is always a balance of how fast you see the impact of such an investment but this is why we continue to hear us talking about investments because it's really about bringing hand and feed salespeople and support staff to the customers to drive this continued conversion.

The next question comes from the line of Tobias Nissen, Danske Bank.

I have 2, if that's okay with you. I know they already said only one but I was just surprised by the magnitude of the order facing headwind here in the second quarter. Were you also surprised to this and to what extent is a smaller headwind? And that's also just on the more than 15% organic growth for Endoscope Solutions for this year, it just seems that sales continue to be very lumpy. We have talked about this earlier but what gives you more comfort in this into the second half of the year. And what is actually needed for you to reach the top end of the guidance here around this 12% organic growth, right?

And then just another one, Henrik, on cost inflation. Many of your MedTech colleagues, they mentioned the disruption from the Middle East and everything but you don't really talk much about it here in your presentation. so what are we looking into? I know plastics is not a big part of the cost of the endoscopes, but just general inflation seems to be going 1 way and that's up right. So I just wanted to give you any thoughts on this.

Yes. No, thank you for the question, Tobias. And maybe I can start with the top ones and then Henrik can comment on that. So in terms of the order phasing and what you refer to as urology where we only, I should say, report on the full category, urology, ENT and GI. So I mean we are not specific on how much each contributes. But I would say, are we surprised -- I mean, we are not really surprised with the visibility that we have into the business, which is also why, I mean, we saw clearly an increasing order pattern I mean, just before the new year last year, so that was also why we were very explicit as we could see this in our communication around Q1 to say that we are expecting a lower level I think in general, as I think we have both been alluding to, we see that conversion continuing to happen to -- from reusable to single use, which continues to be the main driver of our of our business.

And we continue to see a strong -- in particular, when you look at the volume, we see conversions both happening very much on the U.S. side and on the Europe side and on the -- on the value side, we also see a healthy development across here. So I think we -- I mean, we continue to be very excited about how customers are converting from reusable to single-use and also how we leading that conversion and looking ahead can continue to lead that both with our existing portfolio and as we get new innovation in the market.

That also means that we are -- when you look at the 15-plus percent that we expect for the year, that also means that we are quite comfortable that this is where we will land Henrik alluded to the respiratory segment and what we really see as a benefit in the business is that we have multiple parts of the business contributing to the growth, and that's where the respiratory growth that we see and the momentum we see in respiratory picking up, which is then also, you can say, being a bigger supporter of getting us above the 15%, as we have talked about. And we see the momentum driving in that direction, both on that side, but also continuing momentum on the other areas.

So in general, I think it's -- I mean you find a few segments, a few areas in MedTech, where you see such a strong growth as we see in the business and also even when we look at others in endoscopy and how their growth rates are, I think we are quite pleased with what we see and also the structural foundation in the market is still very much in our favor in the conversion. And then I will also say when you look a little further ahead, how treatment is changing and where patients are treated is changing from in hospitals, more and more outpatient is clearly also in favor of our solutions because that's where they are more reluctant to make the big capital investments but rather go directly to a single-use offering.

And our portfolio today in most of the areas. Still, we are a little further behind when it comes to GI but they can actually address a vast amount of the procedures that they need to do in these outpatient setting. So I think that's making us very confident when we look ahead.

And to supplement, I heard you ask about what could -- what should then drive us potentially to the top end of the growth guidance? I think there are mainly 2 things. One, on the respiratory side, as Britt said, if the conversion picks up even faster. What we have experienced, as we've also mentioned in the call here that -- it's a really positive reception of our products. We now have our mobile solution in the market also. We are continuing to see this pickup. And if we suddenly see bigger accounts convert faster than we expected right now, that could be 1 of the things that would drive us to the top end of the updated guidance.

The other element is really A&PM. And I think that is why we really focus on that in the top or in the revenue guidance update that if we manage to convert some of these lost customers mind you, again, we're not off contract. We're still on contract or successfully implement price increases in other areas, which we're also working on that could counter some of the negative effects we've seen year-to-date, particularly on anesthesia. So those 2 things would be the drivers that could bring us up towards the upper end of the guidance. But I just want to reiterate what Britt and I said with the trend we're on right now, we are on the updated guidance, but we are on the lower end of that guidance on revenue.

In terms of cost inflation, we don't talk about it a lot, to be honest, because we're not directly influenced. I will say 2 things. So I think 1 is, obviously, in the end, with a structurally higher oil price, there will be effects across the supply chain. We're extremely focused on supply chain reliability because that is what matters so much for our customers. And it also means that actually in our cash flow or in the net working capital inventory specifically, we are continuously investing in having a solid inventory are finished but also component for our products. That also means that I think any cost inflection inflation will not really hit us for this financial year. And given that our financial year ends end of September, timing means that it's not going to have any real impact on this year. If it structurally continues, of course, that's something we need to consider for next year.

But then I think there's also a question of what you then do on pricing. So net-net, that is why we don't talk a lot about in the message because it doesn't really matter for now in the second quarter nor for this calendar or this financial year for Ambu.

The next question comes from the line of Martin Brenoe, Nordea.

Congrats with the good start here with the respiratory and the SureSight launch and also the share buyback, I think you're being rewarded for that. So well done. A couple of questions from my side. I actually have a few but I'll start with 2 and then jump back in the line. Maybe first on the sure side. and the upside that you see here as a potential acceleration. Can you maybe -- just to put a few words on the CE mark that you got for SureSight in Europe? And how you see the potential adoption rates could look like in Europe versus the U.S. how much that could contribute both short term and medium term? That's the first question.

And then on the second question, given that you have quite a steep margin step-up assumption here in H2 and don't lower the margin assumption even with the top line guidance being lowered. Can you maybe help us bridge a little bit how you get from your Q2 margin to your H2 margin in terms of gross margin expansion from scale, mix, price increases, lower tariff impact would be an FX would be super helpful if we could get a little bit more nuances on what is the biggest drivers of the margin upside here in the short term?

Thank you, Martin. Let me talk about the SureSight question, and then I'll hand over to Henrik to elaborate on the margin. So when we look at the SureSight, we launched that just over a year ago now in the U.K. and shortly thereafter in the -- now in the U.S. and shortly thereafter in the U.K., first with the first wave of blades and then we added some months later, a second wave of blades. We now have 10 blades available for the SureSight side. And then we got approval of the mobile version, so where the version that has a small screen on top that you can put in your pocket and bring everywhere you go. But that's only going to be commercially available later in the quarter that we're in now, so later in Q3.

So that also means that the penetration that we have had on SureSight has been very promising, but also gradually as we have had customers that were waiting for parts of the portfolio because they -- before they fully switch. But in general, again, we are -- as I -- as I said, we are very happy with that uptake.

Now we have also got it approved or the CE mark in Europe. And Europe is a little bit of a different situation than U.S. and U.K. in the sense that the market for video a wrinkle scope is much less mature than what we see in U.S. and U.K. However, it is a market that is growing. So what this means for those that are not so much into this is basically that for intubation, where -- which is where Laryngoscope is primarily used. You have 1 with a camera, which has a lot of benefits, I mean, reducing the risks for that you don't get it right, making sure that everything is integrated safely. And this is also the reason why that -- the video laryngoscope solutions have been growing so much in U.S. and U.K. But this is where the maturity level for video laryngoscope is slightly lower in Europe.

So they much more use a solution that does not have a camera, which is also referred to as a direct laryngoscope. So that also means to answer your question on what to expect that you should expect for the rest of Europe a slower uptake because there's part of the market that is already out there, looking for a solution like ours, and they're not at all used to a solution like ours that also is on the screen together with the bronchoscope. So that is going to be exciting for them, and we see a lot of excitement.

But there's also, on the other hand, a change in behavior because you will need them to a much larger extent, use the video laryngoscope instead of a direct laryngoscope without a camera. And that typically -- when you're changing behavior that typically takes a little longer. So that's also why we don't want to be too bullish on the uptake in Europe because it can take longer as we are changing habits of physicians. So hopefully, that makes sense. We are not putting a number on here but just to say that's what the situation is.

Exactly. And therefore, building that I think also we are therefore not talking about the SureSight launch in EU being a real upside at the short term. It could be at the long -- mid- to long term, but not at the short term, only for U.K. and U.S.

On your margin question, I think really, you should view it as mainly an OpEx ratio reduction for the second half, driven by 2 things: one, tariff costs that we talked about already from the start of this financial year, where, as I've said before, we have a very high level of transparency of what is impacting us now in Q3 and actually into Q4, there is a 3-month delay between what we pay at import and what we expense. And we are in a slightly more favorable tariff regime right now, still more uncertainty but I think good transparency in terms of what will happen or what will impact us in this financial year. That's 1 key element of the improved OpEx ratio. The second is really also higher organic growth, which drives a higher leverage on the cost base, generally speaking.

Lastly, and a minor part of this is also that with higher sales in the second half, we are also expecting a slight improvement in the gross margin but it's a smaller FX. On FX, I don't dare to give a view these states. It's been going up and down. So I think in our guidance, we also accommodate as we illustrated in the updated FX assumptions also that things can move up or down. Obviously, right now, the U.S. dollar has been moved a little bit in a better direction the last 1.5 months but it's very difficult to predict what will happen there.

What we are expecting and we'll see is that the lag effect from the fact that we have lower COGS on some of our production sites from an FX advantage, Malaysia and Mexico specifically will help us a little bit on gross margins. So there is an effect there but it's a minor effect. So again, it's really tariff and operating leverage on our OpEx base that's going to lift the margin in the second half.

The next question is from Yiwei Zhou, SEB.

Also I will keep wishing 2. Firstly, just on the Lexi products, the new guidance, low single digit. If I under correctly, you steer and to do close to mid-single digit in the second half. But please correct me if I'm wrong, the loss of the volume contracts should also impact here in the second half. So what visibility do you have to accelerate the growth in the second half? That's my first question.

I can take that. So I think 2 things to bear in mind. I think 1 is that -- we are on these contracts nonexclusive, which means there is still a discussion, can we get some of it back in the forecast or the guidance we put forward now, we are assuming that we will not necessarily win these back. We're still in fit for Other customers, so we have been both winning and losing some also over the last 2 years, and there are a number of opportunities we're looking at, which makes us comfortable if we look at our normal win rates that we will gain some traction to replace some of what we lost. The other bigger factor is really that remind you again, we've talked about this before, but the price effects on the A&PM business were highest in last financial year. In first half and much lower in second half. So there's also a little bit of an impact of the comparables are slightly easier when you go to the second half. I think if you combine those 2, that means, as you say correctly, we are expecting we get back to that mid-single-digit growth level for A&PM in the second half, which will bring the full year to that low single-digit expectation.

Great. Is it possible to indicate the phasing when exactly can you retain the positive growth? Should we expect that part growth already.

So we are not guiding on quarter specifically. But I think what I will say is with some of the negotiations we're in, we are expecting that it will improve gradually across Q3 and Q4. So it's probably likely more improvement in Q4 than it is but I don't want to be more specific than that.

And then my next question is regarding agent. We have heard some companies talking about the cost benefits and savings from the adoptions recently. So where is Ambu on this journey I mean, I guess if you don't do it or if you have not started, I guess some -- probably some of your Chinese competitors already started looking at.

And maybe I can answer that, and Henrik, you feel free to add. I think what's very important when it comes to AI, it's something that we are pursuing in 2 different ways: one, in connection with our solutions where we do have active projects that we are running in terms of using AI technology to improve the performance of our existing solutions to also bring additional features to our existing solutions. So that's where we see huge opportunities to make even greater benefits for our customers and how they both diagnose, treat and so forth. So this is an area that we are focused a lot on both when it comes to our internal development, but also when it comes to looking externally and partnering with different types of companies and that. So I think that's end customers.

And so that's one part where we are actually very excited about the opportunity. And we do think that we have an opportunity to lead in that space, but we are also very much considering how is it actually also the regulatory landscape is evolving. So the solutions that we bring for that we have a good understanding of the regulatory pathway for approval, which is both in Europe but also with the FDA evolving and a lot is happening there right now. So that's 1 area that we are very focused on. The other area is obviously internally in the company, and we take 2 different approaches here.

One, how is it that we can improve our efficiency and how we actually operate in a smarter way. We have a number of things that we have already implemented to do that, not always only to improve the efficiency but actually also to improve the quality in what we do. So I think that's an important way to look at it. But over time, of course, it is to a key contributor to driving a more scalable business. The other thing is when it comes to internal opportunities to improve how we serve our customers. And that's also where we see a number of things that we can leverage technology to even set us up to do that to even serve our customers better. We are not talking so much about that externally.

Right now, we have a lot -- a number of different things, both happening locally as test to make sure that we get it right before we scale it and some more global initiatives. But it's something that we think that we need to think carefully and be prudent in how we invest, but we see a lot of potential for Ambu and with our culture in our way of operating, we should be able to gain a lot of benefits in this in the next 1, 2 years.

And just to supplement, I would say, without linking it specific to margin targets. I think in our view on the internal side, less so AI is about efficiency. It's actually more about agility in our business back to a bridge point in how we serve our customers and scalability in our business. So if anything, particularly from an internal side, this makes us more comfortable in our ability to deliver a scalable business model faster. And that for us is a really positive, you can say, in terms of the growth story and the growth ambitions we have ahead of us.

Okay. Is it possible to quantify a bit about those benefits? Or it is still very early stage.

It's still too early. And I think for us, again, the main priority is driving more growth. So I think the only comment I would make is if we see an opportunity for adding more agility, more customer focus in our business or better scalability faster. We will make that investment. Even if it's short term comes at a slight margin impact because we still believe that the main driver for us is to putting ourselves -- in to put ourselves in the best position to drive growth. And therefore, I'm not going to split it into what does it mean for margin short term, midterm and long term, but it's more our ability to deliver on the long-term growth we feel more and more encouraged and technology will help us more and more on that journey.

We have a follow-up question from Thyra Lee.

I just had a quick follow-up on my first question -- now I appreciate you don't want early focus on the for performance. But I was just wondering if we could get a directional idea of whether Q3, Q4 portfolio will be more balanced or whether you are expecting a very backloaded year.

I can comment briefly. So I think, again, it's 2 slightly different dynamics. So on respiratory, I think you should expect that gradual acceleration, where we're expecting Q3 to be another gradual acceleration and likely also Q4 because it is really customer conversion. I think on our uro, ENT, GI, it's a slightly different dynamic because there are many subsegments in that. So there were more expecting it to go back to a steady state here from Q3 into Q4. The only, you can say, a factor on that is that, as Britt mentioned, we have implemented this new commercial setup in U.S. It was just changed, and U.S. is a very big driver of growth for this. With this change also sometimes come a little bit of implementation slag, which could mean that for the Q3 could be a little bit lower and then Q3 a little bit higher. But this is more internally driven in terms of how do we make sure people have focus the right places.

We talked about in Q4 last year how focus on urology had taken focus away on E&T. So some of these dynamics is what we are investing in making sure we become more clear on but also means in the very short term, can sometimes create a little bit of unclarity that we're then working through. So I think the sum of the part is on respiratory, it's really that customer conversion. On urology, ENT and GI, it's more internal execution that can drive some differences between Q3 and Q4.

And I think maybe just a quick comment to what Henrik said, that also means that, I mean, we have been sitting looking at some of those different dynamics and what we can expect from those. And this is factored in how we look at the plus 15% for the full year, just to fully clarify that, even though that you may see slightly higher growth rates in the Q4 relative to the Q3 exactly. appreciate that.

We have a follow-up question from Martin Brenoe, Nordea.

Just 2 quick follow-up questions, I hope. The first 1 is on the cost inflation. You're not seeing too much disruption in the supply chain. But I guess that it's called the supply shock for a reason that you actually get surprised somehow. The in-sell that I'm getting at the moment is that plastic prices are surging plus 50% to 100% at the moment on the contracts. So I assume that you have some long contracts, but can you maybe tell me bit about your exposure to the plastic prices? And also maybe just a few words on how the -- at least the proportion of the contracts that is inflation linked somehow to raw material. That's my first question.

And then on the second question, I get that it's still too early to really say too much on the ureteroscope. But when I try to assess your portfolio within the ureteroscope, it doesn't look like it's extremely competitive or commercially differentiated even when I compare it to some of the competitors that you are maybe looking at inferior I look at the sizes of the scopes and sort of the tubes and the different settings. Also, on that note, Boston Scientific has its fluid management system cleared by the FDA in March, which I guess is a bit more locking their customers in making it more difficult to take market shares from them. So can you maybe put a few words on how you see your ureteroscope portfolio and the breadth of that and the need potentially for organically innovating your portfolio here and potentially also looking at what Boston Pacific is doing, buying assets that can help you accelerate closing the gap to your main competitors in this space?

Yes. No, thank you. Let me comment on this. Maybe starting with the with our ureteroscope. So I think if we look at that, we have basically launched our first version, if you will, of first generation of our ureteroscope that we have been working on for a couple of years that we are bringing out to the market where we do see some differentiation when it comes to -- I mean, to what is out there also in terms of -- that we have on the system and the software and how we have connectivity into the hospital systems with which no other single-use suppliers have. So we do see that we have some strength.

But having said that, I think it's also important and that's some of what you allude to, to take a step back and say that we are actually entering a market that is characterized by slightly more complexity than I mean cystoscopy, as an example, meaning that the procedures where you use a ureteroscope for primarily kidney stone management, that's unlike cystoscopes, it's hours long procedures where you use lasers and a lot of other equipment. So that means that when we go to our customers, they will have a number of different providers of different solutions.

And you can say, we are now have our foot into this market with the first generation. And we have a number of development projects that in place that should strengthen that solution in a couple of ways that I cannot talk about more externally. But that's very much how we see this that this is our entry into a market of higher complexity than some of the other segments, and we will gradually strengthen some of the portfolio around that to be -- I mean to drive our share in this market.

When it then comes to Boston, I mean, they're much more a urology player. And I think the fluid system that they have -- I mean, we are also looking at different acquisition opportunities. It may not be a fluid management system necessarily. But I also do think that they need something to support the whole urology franchise because there -- I mean there, ureteroscope has been in the market for around 8 years now, and it's clearly -- I mean, not 1 where we see them out there when we are getting new customers. And we also see last year in the recent quarter from Boston Scientific, you see recent quarter, almost flat in urology. So that's I mean there's definitely not the same momentum in their business right now. More to say that, I mean, this is a foot into this market, and we see a lot of potential and also see some options on how we can further strengthen our position.

Maybe I can just put a few comments on the plastic and the cost inflation. And then Henrik can add. I mean, it's I agree with you around, I mean, that we do follow closely the whole situation with prices also on plastic and have done so for a while. And it's very clear that there is -- I mean, there is a reason to -- for us right now to be close to our suppliers. Fortunately, we have several suppliers. And we have also, I mean, managed to get some good contracts that I cannot come into -- go into detail with. We also -- as Henrik said before, we also have -- I mean, to prepare for an unpredictable world, we also have, I mean, a good level of inventory also on the plastic side that keeps us going for some time.

And then at the end of the day, I think we can all conclude that the market is more unpredictable, also that mean ultimately these prices will -- price increases if they happen and become drastically, they will also fall on to customers because everyone else, I mean, that we are competing with will face the same. We have the benefit of being leading so we can buy volumes that some of the others are not able to. So relative to the industry, we are quite well positioned. And relative to our own situation, we are taking a number of different measures and bringing different suppliers into play to make sure that we are super focused on keeping the cost down of all material that we are using.

Plastic is not the key driver of our cost, I should say. But nevertheless, this is, of course, important.

And just supplementing very briefly, just to remind us of 2 things. On the Endoscopy portfolio, we have on our handles Bioplast, which is less related to all. That's not why we implemented it but it's less dependent or linked to oil price and plastic is a small fraction of the cost of an endoscope. On A&PM, particularly the anesthesia products, it's a different situation. Plastic is a much bigger fraction of the cost but this is also a business area like we've discussed before, where we have a much better practice of then being able to push cost increases to our customers. And this is a general challenge for all suppliers within that space. So should that be a structural change. We also believe that's something we can manage towards the customer.

So net-net, this is why we don't think it's -- it is not a challenge in Q2. We don't see it as a challenge for H2, but it's something we're observing closely to Britt's point. And I just want to come back to what I said earlier. For us, it's really all about supply chain reliability. In a long-term conversion like the 1 we're on, that is the 1 key thing, success parameter for us, and then we can manage around that.

The next question is from Delphine Le Louet, Bernstein.

Yes. Just as a follow-up or a wrap up. come back into the evolution of the order intake that you're seeing into the Euro division? And any changes or possibly changing you want to flag regarding the dynamic versus last year? And also possibly another very quick 1 regarding the gross margin difference in between the Endoscopy and the APM.

Yes. I can take the last piece quickly. So we don't comment on the gross margin, specifically for the 2 businesses separate. But just as I said earlier today, and I've said in previous calls, Endoscopy has a higher gross margin, everything else equal than our A&PM business. So in a longer-term perspective, that also means a higher growth in Endoscopy Solutions than A&PM, which is what we are guiding for and targeting. Will, of course, be helping and supportive trend towards driving up the gross margin.

Do you want to comment on that?

Yes. And then maybe on the growth and the order intake and specifically on uro, ENT and GI, you can say we were very clear last time that for after Q1, slightly higher growth than we expected to orders coming in towards the end of the quarter. So we would see that impact in Q2, which it did. So I think that's very much on plan. When we then, to your question, look at Q3, Q4, we don't -- I mean those dynamics that we saw around Q1, Q2 are washed out, if you will. So we don't have anything to -- that we can see right now that should impact I mean, that's split necessarily. I think it's -- I mean, the comparators are -- I mean, less easier in Q4 than Q3 is -- I mean, there's 1 comment that I will make.

But in general, I think while we do see fluctuations quarter-over-quarter as that's the nature of our business, we don't see anything that should -- I mean, in terms of order timing that we are looking into right now that should have an impact on the quarters to come.

And I think in terms of predictability, just also reiterating this growth is coming from conversion from existing customers and removing more of their volume from reusable to single use.

We have some often very good transparency on that and it is converting new customers to our single-use solutions, which, of course, there's always some timing dependency sometimes of what you land, when and exactly in what quarter. But on both, we see a very clear trend towards higher single-use penetration, as Britt said, and with our position, therefore, we feel really good about that trend. And then there can be these quarterly fluctuations, which we're trying to be more transparent and clear on.

That was the last question. I would now like to turn the conference back over to Britt Meelby for any closing remarks.

Thank you, operator, and thank you to everyone for joining our call today. Thank you for great questions as well and wishing everyone a great day.

Ladies and gentlemen, welcome to the Ambu Q1 2026 Conference Call. I am Valentina, the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast.

At this time, it's my pleasure to hand over to Britt Meelby Jensen, CEO. Please go ahead.

Thank you very much, and good morning, everyone. Welcome to this Q1 2025-'26 quarterly call. I'm here this morning with our Chief Financial Officer, Henrik Skak Bender, and we will go through our results, and I'll start with a business update.

So if we look at Page 3 as a start and then moving into Slide 4, starting with the headlines for this call. So on the back of a strong Q1 and even a strong H1 last year, we have delivered a very solid Q1 for this year with strong revenue growth. In particular, on our endoscopy business. We said in November that our growth was going to be stronger in the last part of this fiscal year compared to the first part of this year, but we are quite satisfied with the strong start of the year that we have had.

In particular, what I want to highlight is that we have had very strong momentum across all our endoscopy business areas. We continue to see a very strong underlying momentum in conversions from reusable endoscopy to single-use, where we are both winning new customers on a very high rate, as well as we are increasing the penetration with existing customers. In particular, we had a strong quarter on respiratory, but also the other areas look strong. I'll comment on that in a short while.

On margins, Henrik will come back to this, but we continue to drive a very high operational leverage while we invest in growth. So that's the balance that we continue to focus on. And then we are adjusting for temporarily high tariff costs that we have seen and also some FX headwind.

Finally, what has been a highlight for this quarter is that we launched our ZOOM AHEAD growth strategy. We see that this is being well adopted, and we see strong early momentum as we continue to be on track for delivering on our full year outlook.

Please turn to the next page and let us then look at the financial results from Q1. And if we look at our overall business, we now have Endoscopy Solutions making up 63% of our total revenue and Anesthesia Patient Monitoring 37%. Overall, the business grew 8.6% on the quarter. And that is a split between Endoscopy Solutions of 14.4%, and then almost flat -- as anticipated -- on Anesthesia and Patient Monitoring, with minus 0.1% growth.

On the profitability side, we delivered DKK 164 million EBIT margin before special items, and that corresponds to a 10.5% EBIT margin. And then we had a free cash flow of DKK 13 million.

Before diving into the segments, if we move to the next slide, I'd like to talk a little bit about the market that we operate in. And here, I have 2 key points that I would like to highlight. The first one is that we, as a company, are benefiting from an overall trend towards an increase in global procedures performed with an endoscope, whether it's reusable or single-use. And when at our Capital Market Day, we communicated an underlying growth rate of around 5%. And if we look at the quarter that we just exited, we see also an endoscopy volume growing at around that number. So I think that's one thing that, of course, affects our business.

If we then look at what is a stronger growth driver for us, then it's the single-use endoscopy penetration. And here, we see across all 4 areas that we are in a very strong increase. If we take respiratory first, here, we see efficiency and economics is really supporting the conversion from reusable to single-use. And we do also have some flu-related demand that is increasing the penetration in this segment.

Then in urology, we also see the accelerated conversion in particular with cystoscopes, but also with our newly launched ureteroscopy market. And this is again driven by efficiency and economics among the customers. And on the ureteroscopy side, also a move towards single-use because of the tough procedures and the scopes being more fragile by nature.

Then on the ENT market, this is a market for single-use that is in particular strong in the U.S. and in the U.K. And here, we continue to see a strong growth in single-use endoscopy penetration, very much driven by moving from reusable to single-use when performing the procedures.

Then -- gastroenterology, this is a market that has not really converted to single-use. It's the lowest single-use penetration of just below 1%. However, where what we track is some niches that are out of the suite, where we see a very nice and solid conversion to single-use as they are seeing the benefits of these solutions in the clinics.

So if we then move to the portfolio and some of the highlights on the next slide of progress across our portfolio. Then I'm excited about our respiratory area, where we have recently introduced our SureSight Mobile. So this I'll come back to later, but it's basically a handheld and much more mobile version of our video laryngoscope solution. And this one, we have introduced so far in North America and Great Britain.

Then when it comes to urology, what we see here is two things. One, we see a continuous penetration increase of our advanced solutions, aScope 5 Cysto and also aScope 5 Uretero. And then what we have launched in the quarter is aScope 4 Cysto in China, which is locally manufactured at our factory in China. And this is the first time we're introducing this solution in China.

Then when it comes to our EndoIntelligence, we are also continuing to focus on this as an area of growing importance; and here, we have, in the quarter, advanced our documentation to help optimize efficiency for our customers and reduce the administration burden. And we are also continuing to expand our capabilities that can support our hospitals in integration to the EMR systems at the hospital, where they can upload pictures and videos to the patient files.

Now let's look at the results in the different areas, starting with respiratory. So this is an area where we continue to see very strong momentum across respiratory. We saw organic growth in the quarter of 8.3% against a very strong Q1 last year. And if we look at where the growth is coming from, it's actually driven by the broad bronchoscopy portfolio we have with different sizes, both across aScope 4, but also strong growth with our aScope 5, where we see customers being willing to pay for these premium solutions. And then we have SureSight, the SureSight video laryngoscope that we launched around a year ago that, that is starting to generate meaningful revenue.

So when we take a step back and look at some of these strong trends that we see in this market and to guide a little on what to expect when you look ahead, we expect an acceleration in our growth levels in this segment for the coming quarters, which will be driven by both the aScope 4 and aScope 5 increased penetration and also driven by increased adoption of our SureSight solution and cross-selling of that into bronchoscopes.

Talking about SureSight, let's move to the next page and look at the launch of our mobile version, which is expanding our overall portfolio in respiratory. So maybe a short recap on what we have shown before that the video laryngoscope market, if we look at the U.S. where the market is largest, this represents a DKK 4 billion market in the U.S. alone.

If we then look at laryngoscopy, it's also a method that is increasingly done using a video laryngoscope instead of direct laryngoscope. So that's basically using a laryngoscope with a camera. And in the U.S., this method represents now 50% of all intubations that are done in the U.S., and it's a number that we see growing with around 20%.

Then moving to our own solution. So we have launched the SureSight Mobile, which is basically the solution that you see at the top picture here on the slide. And what this supports is very much emergency airway management because it's a product that you can basically see the picture from the intubation directly on the screen. It means that you can have it in the pocket in an ambulance at different parts of the hospital and then have easy access to that, which opposites the Connect version that you put into and connect with 1 of our 2 screens, the aView 2 Advance or the aBox 2.

So overall, this is a very strong addition to the already attractive portfolio that we have in respiratory. It works with the same 10 blades that we have launched for the SureSight Connect, where we launched, as a reminder, 5 blades together with the Connect version around a year ago. And just before summer, we launched the additional 5 blades. So we now have 10 blades that both support this SureSight Mobile version as well as the SureSight Connect.

So now let's move to the other endoscopy segment on the next slide, which is Urology, ENT, and GI, which is a segment that has become slightly higher than the respiratory segment now with a 21% growth in the quarter versus last year.

So momentum is strong, as I mentioned in the beginning, across all the different areas that we have here with urology being the largest and biggest growth contributor, something we also expect will continue. When we look at urology, growth was primarily driven by continued penetration of our aScope 4 solution, where, again, revenue is coming from continued new customers being added as well as increasing penetration with existing customers.

And then we also see revenue increasing from our more newly launched solutions, and that is our aScope 5 Cysto and our aScope 5 Uretero, reflecting also -- I mean, the speed of the uptake of these solutions in particular -- when it comes to our ureteroscope, reflect the length of the sales processes that is slightly longer for these at the hospitals because these are more complex procedures by nature.

So in these segments, we -- if we look at what we expect as we look ahead, we did see a strong underlying momentum, which we expect to continue. What we also saw was that towards the end of the quarter, we saw a slight increase in the number of orders that came in before year-end, which also means that we think that there are good reasons why the growth in the coming quarter can be slightly lower than the 21% that is highlighted here. But I do want to say that this is more the timing of orders that is a result of that, and it's not related to the underlying growth momentum that we see in urology as well as the other segments represented here.

So before leaving endoscopy, maybe on the next slide, let me briefly comment on EndoIntelligence, which is our area of growing importance that supports our endoscopes across all the areas that we operate in within endoscopy. Because where we really stand out is that we have one software platform, our EndoIntelligence, that all our endoscopes connect to.

So that basically means, and we see health systems paying more and more attention to this that we -- that they can have our -- either our aView 2 Advanced or our aBox 2 and then basically, they can use our full endoscopy portfolio on these monitors. And it's exactly the same user-friendliness, the same functionality that you have for a number of the functions. So it's very easy to use across all the different areas. And this is where we are unique with our broad portfolio. Then it also has a lot of benefits and scale advantages because as we invest in advanced software features, we can also easily apply these across all the different areas that we are in. And an example here is also that we are working on, and that we launched for training purposes, is the AI bronchoscopy navigation training, where basically you can use the solution to see where in which parts of the lungs you have expected, something that is not available on our aView 2 Advanced or aBox 2 yet, I should say, but which is again part of our overall EndoIntelligence offering.

When we then look ahead, there's a lot of development ongoing within this area, where we are looking at how we can -- solutions that can improve our navigation, detection, and documentation in the different areas, as we see a clear need and demand for among our customers. Also, we see increasing benefits of using technology to improve our image quality across the different areas, which again is a key lever to improve detection rates.

Then last but not least, the whole integration with connected devices and with the hospital systems is also something that we see is remarkably increasing or easing the workflow at the hospitals, which is a key focus as they are overburdened with a lot of administration and still face in many countries, staff shortages. So overall, an area that we will continue to talk more about and integrate in the solutions that we have.

Then let me briefly also comment on the next slide on our Anesthesia and Patient Monitoring business, because this was more or less flat versus last year when we look at it organically. Our Anesthesia declined by 1.2% and Patient Monitoring grew then on the other hand, 1.1%. We still see the same dynamics in these markets as previously. And you may remember that last year, we grew in the quarter 18%, very much driven by selective high price increases. So we are more back to normalized growth levels now, where you should expect going forward growth around 3% to 5%, as we have communicated.

Also, you should expect the growth coming a lot from volume increases, but also still have some price increase development, although much more modest that we have seen in the past couple of years. And looking at the coming quarters, we remain very confident around, again, the dynamics in this segment and that we continue to see nice growth rates driven by already very strong solutions as well as a highly loyal customer base.

So before handing over to Henrik, let's move to the next slide and let's -- well finish with a few highlights on the key focus areas of our strategy.

So customer centricity remains a key area where we are doing a lot of initiatives to continue to serve our customers better. What I want to comment on in this quarter specifically is our Recircle Program. So our program, where we take back endoscopes for recycling, which is live in 4 markets and where we have now expanded to cover 50 hospitals and over 100 clinical departments. And in the quarter, we also expanded this to not only include the endoscopes, the full range of endoscopes, but also now the SureSight blades.

On innovation relating to the EndoIntelligence, that we discussed, we continue to also strengthen our capabilities within software and AI technology and have some very strong capabilities to drive the innovation in this area specifically.

Then on the business platform, an important point here is that we continue to invest in expanding our commercial execution to support the high-growth agenda that we have. And then also what we do is that we continue to also have our Mexico factory improving both utilization and output, which is very much supporting specifically the growth in North America.

So with that, let's move to the next slide. This concludes my presentation, and I'll hand over to Henrik to go through the financials.

Thank you, Britt. Good morning, and welcome to the call, everybody listening in. Happy to take over and take you through a couple of key notes on the financial review. Before we go to the next page, I just want to reiterate what Britt also opened the call saying we are very happy with the solid start of the year and very satisfied both with the results, but also in particular on the strategic progress.

With that note, let's take us to Page 15. So overall, as Britt opened was saying earlier, we had a growth of 8.6%. Adjusting for FX, the reported growth was 3.2%. We continue to still be impacted by a U.S. dollar/DKK depreciation, which impacts our reported growth, particularly for North America, but also with the mix of FX, the growth in the Rest of World, something that I'll come back to later.

Overall, the growth is particularly driven by Endoscopy Solutions now representing 63% of our total revenue and a total growth for the quarter of 14.4%. Anesthesia, as Britt just mentioned, had a negative growth, while Patient Monitoring had a slightly positive growth, meaning that overall, that segment was more or less flat.

With that, let's have a closer look at the geographical split of our growth on the next page. Overall, we're still on a very, very solid growth trajectory for our key markets in North America and for EMEA, both growing close to double digits. The solid growth in North America, particularly driven by Endoscopy Solutions and for EMEA, driven by both Endoscopy Solutions and actually also still our Anesthesia and Patient Monitoring business.

For Rest of World, we did see a decline in organic growth, mainly driven by order fluctuations, as we do see in some of these markets, very big orders for one quarter or the other, as many of these markets are still covered by distributors, which means that there will be order fluctuations across the year. Looking at the same numbers in reported currency, North America growth was almost flat because of the USD/DKK depreciation, and the Rest of World had a higher negative growth again in reported currency because of the negative FX effect.

If we then turn to margin and start with gross margin. Overall, our gross margin was in line with expectations. We had a solid first quarter at 60.8%, which is lower than last year same quarter, but higher than the average for the full year last financial year. The overall gross margin is continuing to increase, driven by a combination of higher endoscopy sales versus A & PM, continued stronger and strengthened price governance and as Britt mentioned on the strategic update, and increasing utilization, particularly of our Mexico factory, which helps us ensure that we have lower production overhead and therefore, supports an increase in gross margin. Overall, we therefore feel well on track on how gross margin should develop both for this financial year, but also towards our long-term targets, supporting our EBIT margin expansion journey.

Speaking about EBIT margin, let's go to the next page. Overall, the EBIT margin for Q1 landed at 10.5% reported, which was a decline of 5.6 percentage points versus the same quarter last year. We did, as communicated in our Q4, expect and also report a significant cost of tariffs, which is driving down the EBIT margin for the quarter. And combined with that, we also had a negative development in FX, meaning that if we adjust for the combination of the two, we saw an underlying adjusted EBIT margin of above 15%, which actually is very well in line with our EBIT margin expansion plan for this year and again, also for the long-term targets.

Overall, therefore, we feel on a solid start. As Britt said also in our opening, we communicated that we see a lower EBIT margin for the first half, and we are going to see a higher EBIT margin for the second half of this fiscal year, and this represents a solid start in accordance with our plans.

Turning to free cash flow. We did report a low free cash flow for the first quarter. Overall, this is fully in line with the typical pattern of our free cash flow, where we always pay bonuses and tax in the first quarter. And therefore, this is also in line with expectations. Specifically, the free cash flow for the first quarter was impacted by negative development in net working capital, in part due to us lifting some of our safety stocks across the world to manage and mitigate some of the political uncertainties we see. Furthermore, the free cash flow was also impacted, of course, particularly by the higher tariff costs for this quarter, specifically if you compare this quarter to the same quarter last year. But overall, on free cash flow, also a solid start.

Speaking about solid start and then looking at our outlook on the next page, we therefore also -- as Britt also said in her opening, maintaining the outlook for the full year with a solid growth of 10% to 13% organic driven in particular by Endoscopy Solutions at plus 15% growth. We see still further acceleration in respiratory. As Britt said, for the first quarter, the respiratory growth was impacted by the very high comparables for the same quarter last year, but we see that accelerating throughout the quarter.

On Urology, ENT, and GI, we see a continued momentum versus where we landed full year last year. We had a good first quarter. We are seeing some order patterns that are benefiting Q1, which means that we are seeing slightly lower growth expected for Q2, but overall across the year, a continued momentum versus the same growth levels we saw for the last financial year.

For Anesthesia and Patient Monitoring, despite a flat growth for the first quarter, we still maintain a guidance of mid-single digit as the first quarter was mainly impacted by high comparables.

On EBIT margin, the impact from the external factors, particularly tariffs, we are still seeing playing out, as expected, and these will mainly impact the first half of the financial year. So the first quarter, as we just saw, but also now into second quarter. Overall, we feel on a solid track on delivering on the 12% to 14% guidance despite the tariffs and despite the FX headwinds.

Last but not least, as I said, the first quarter had a lower cash flow and therefore, also lower cash conversion, fully in line with expectations; and we also still feel very comfortable that we'll be able to deliver on the cash conversion guidance for the full year. So overall, again, a solid start of the year, something we are very happy with and also a lot of great progress on our strategic focus areas.

With that, I hand it back to the operator and open for questions.

[Operator Instructions] The first question comes from Thyra Lee from UBS.

I just have two, please. Firstly, I wanted to follow up on your comment about the pull forward into Q1 within the Urology, ENT, and GI business. Could you just give us a little more color on why you saw this customer behavior? If you could size the benefit that it contributed in Q1, and also how you expect Q2 growth to be impacted from this?

Then the second, please. You saw an absolute tariff impact of over DKK 50 million. On my math -- and please correct me if I'm wrong -- this suggests an impact from tariffs only of almost 3.5 percentage points on the margin this quarter, which sits significantly above the average 2 percentage points that you're flagging for this year. Could you just tell us whether we should expect Q2 to also see an impact of above 2 percentage points to a similar quantum, or should it be more in line with 2 percentage points?

Thank you for good questions. Let me answer the first question on Urology, ENT, and GI, and then I'll let Henrik answer on your tariff question.

So I think overall, I think I want to take a step back and say that if we look at the overall business, Urology, ENT, and GI -- and let's maybe focus on urology, which was where your focus was in the question, we see very strong momentum in our urology business. So that means that we continue to see our new -- an inflow of new sizable customers, and we also continue to see an increasing penetration with the customers that we already have. So I think that makes me very confident.

If we look at the past year and as you also see in the slides, the way that we show it and measure internally, we very much focus on the rolling 12 months because we do see some fluctuations quarter-over-quarter. And what we saw, and this is basically also what we are highlighting here.

In the last 4 quarters, we have had growth between 16% and 21% roughly. So that also illustrates that and this quarter, it was 21%. That illustrates some of the fluctuations we have because orders are placed in one quarter relative to another. And we, of course, track our orders, and I do want to highlight that we do not, I mean, encourage with rebates or anything like that customers to buy in one quarter versus another. So let me just make that clear. But what we did see towards the end of Q1 that we are reporting on, we did see a stronger order -- number of orders coming in. So this is basically also when we then look at the overall rolling 12 months and look at how we see the pattern of new customers and increased penetration, that leads us to believe that there could be a slightly lower growth rate in Q1.

So this is basically just what we are -- in Q2, sorry, yes, in our Q2. So this is basically what we are flagging and what to expect. But again, I want to highlight, it doesn't take anything away from the underlying momentum where we see aScope 4 Cysto continuing to be very strong performing and a product that we are selling a lot. And then we do see the growing momentum on aScope 5 Cysto, where actually customers are willing to pay a premium for that product. And then we also see a very good increase in our aScope 5 Uretero. But again, with longer evaluation times and thereby longer selling cycles than we see in the scopes targeting simpler procedures. So I hope that that explains a bit what we see.

Again, highlighting that we don't see any cautious or any need to be negative -- have a more negative view on this segment. It's simply the quarter-over-quarter fluctuations here.

To follow up on the second question and perhaps just a final note on the first, Thyra. I think for us also, we are illustrating this as a symbol and a signal of how we are becoming better and better at understanding the dynamics with our customers and predicting what patterns we should see, exactly, as Britt said, not pushing order flows into the customers, but rather managing it together with the customers.

On the absolute tariff cost, you are right with an above DKK 50 million tariff cost realized in the first quarter. That means an above 3 percentage point negative impact in the first quarter on EBIT margin. And yes, you should expect also an above 2 percentage point tariff cost for the second quarter. That basically brings me back to when we -- as we explained earlier or end of last financial year, the tariff cost impacts our P&L with about a 1 quarter delay. And given that we are still in the tariff regime, where we are moving production to Mexico and thereby compensating for the tariff costs, and we've been doing so for the last 6, 9 months, then there will still be an above average for the year tariff cost impacting us in Q2, which will then go down further in Q3 and Q4.

The next question comes from Jesper Ingildsen from Carnegie.

So I have a couple of questions as well. On the other Endoscopy business, I don't think you've called out specifically how much this phasing is equivalent to, but also whether we should see this in context of the 21% growth you delivered in Q1 or more like against the 20% trend line that we are typically seeing for this segment?

Then maybe on margin, even when adjusting for the tariffs, it seems like you have a pretty big step-up in OpEx here in Q1, and particularly in the administration cost. Anything to call out here in terms of one-offs? Or how should we think of this for the rest of the year?

Then lastly, on the margin side as well. You have updated your FX table in your report as well. So you're obviously assuming more pressure from FX, both on top line and on margin. Maybe if you could specify what kind of pressure we're talking about? And then maybe also similarly, what kind of potential impact we could see from increasing silver prices when it comes to your single-use electrodes?

Thank you, Jesper. I'll maybe take the first one. And I'm not sure. I mean, please correct me if I'm not fully answering your question. But again, the 21% that we -- growth that we had in Urology, ENT, and GI, that -- I mean, we focus mostly on the urology because that is the largest part of this segment. But actually, what -- when we look across, we actually see solid growth across all of these 3 areas. So that's just one thing to be clear about.

Then I think your question was around the effect on the order flow, when we had a higher-than-normal order flow in -- towards the end of December. And maybe just a comment on that also relating to what I said before. I think -- why did we see this, you may ask. I think what -- some of the dynamics that -- I mean, that we expect is that, as you know, many are finalizing their fiscal years of our customers, the 31st of December. And sometimes depending on where hospitals and clinics are in their own budgets and that has actually, we have seen in previous years also has an effect on how they place their orders. So that is what we have seen. It's -- I mean, we are monitoring this obviously very closely into this quarter.

It's not because we are flagging a big concern that we see right now, but it's more as we try to predict the inventories that we know are at the customer levels and when we should expect orders. This is basically where we see some of the quarter-over-quarter fluctuations and which is also why we are -- I mean, we are not really concerned because the key numbers that we track internally, and I know we don't share this is that we see a steady flow of new customers coming in, and we also see when we have the customers in that their penetration.

So the share of procedures where they use our scope relatively to typically a reusable scope that, that is going up. And we do not see anything of concern here. So this is also why we feel quite comfortable around the growth here. So hopefully, this clarifies the answer. And that -- I mean, that is not only for -- that trend for urology, it's also when we talk about ENT and the customers we have in GI.

If we were talking about like, let's say, 1 to 2 percentage point that was -- that supported the growth in Q1 or we're talking a significantly larger contribution.

Yes. So I think we don't size it explicitly, but it's a few percentage points. So I think this is why we want to be a little bit more clear on the impact and therefore, how you should interpret the 21%.

On the margin question, Jesper, then I guess the 2 points you asked about was one on OpEx, OpEx ratio development and second, the impact from FX and other commodity prices.

So on OpEx overall, you're right, there was an increase in the OpEx level, both on selling and distribution costs, where you see obviously the tariff cost impacting. But also on top of that, even if you adjust for that, you can see, as Britt explained also in the strategy update, our investments in commercial execution, i.e., salespeople in the front line, but also the whole infrastructure around our commercial execution still materializing. And this is a part of the plan of expanding our footprint of driving further organic growth and ensuring we have a strong field force in place.

Specifically on admin costs, there's not anything particular to call out. There's a few extra costs related to some of our transfers and implementation of the changes that impacts the quarter 1, but there's not anything other structural to point out and neither a structural higher cost level than what we have been indicating before.

In terms of external factors, you are right. We also in the table called out the FX developments between where were the -- when we reported Q4 last year, i.e., beginning of November and now we start of February. And most notable from that table in the report, of course, is the U.S. dollar drop, which is also what we monitor the closest. And of course, therefore, further drop in the U.S. dollar depreciation versus the DKK would still have a negative impact on our business.

Net-net, the business is still, you can say, naturally hedged with the fact that we have our production across China, Malaysia, and Mexico. but that hedge comes with about a quarter delay, as we also explained in quarter 3 and quarter 4 last year.

So there are still some FX fluctuations, and with the geopolitical uncertainty, that is still a topic that we will follow closely, but might impact one quarter over the other structurally over time. Not something that we are concerned with versus our '27, '28 or '29, '30 targets.

On silver price explicitly, obviously, there's been quite some fluctuation in silver price over the past weeks and even this week. I think the short and the long is that, yes, it impacts our -- some of our BlueSensor business within Patient Monitoring. It's not a significant impact, as I think I explained to a number of you on the call also during the last few months and therefore, not something that we point out specifically.

So in terms of the FX drag and then potentially from silver, it's not like we're looking more towards the lower half of the EBIT margin target for the full year at this point in time.

We don't guide where we are in the range, but just maintain our view that this is still the range despite what we've seen in terms of external headwind.

The next question comes from Martin Brenoe from Nordea.

I actually have a few, but I'll just start with two questions, and then I'll jump back in the queue again. Maybe just catching on what you said in the prepared remarks, Henrik, I noticed that you said that there was an acceleration of respiratory in the quarter. So could you maybe help me explain how that development or trajectory looked like and what the exit rate was in Q1? Let's start there and then take the second question after that.

Sure. So as you correctly noted, both Britt and I talked about an expected acceleration in respiratory. We don't comment on what was it 1 month versus the other. But what we're clearly pointing out is that Respiratory had a, relatively speaking, lower growth in Q1 at the 8.3%, particularly given the high comparables.

For the quarters ahead, we are expecting an acceleration from a combination of the underlying conversion to single-use of aScope 4 and aScope 5, the pickup in a higher ratio of aScope 5 share of that bronchoscopy sales and then specifically the SureSight launch, which now with the mobile increases our ability to do conversions, full conversions at hospitals, which both drive SureSight sales and also drive even more bronchoscopy sales. And that acceleration we expect to see continue throughout the rest of the financial year, not commenting on how we should see one quarter versus the rest, but more commenting on you should see an acceleration across the year.

I just want to remind you all that we also guided for this financial year as part of our guidance, which we released in Q4 that we are expecting an acceleration of the respiratory overall growth, where last year landed at 11.4%, and we're expecting that to accelerate for the full financial year.

Then with the risk of sounding a bit like a stalker here on this call, I noticed, Britt, that you have been in the very East in China, and you also flagged the aScope 4 Cysto launch in China. So I'm just a bit curious about this move that you're making here. Can you maybe just talk a little bit about the sort of the timing of the launch? What is the ASP versus your global ASP of the aScope 4 Cysto in China? And potentially not holding it up against you, but when should we expect China to become a meaningful contributor to your urology franchise?

Yes. No, and thank you for those questions, and happy to comment on China. So basically, maybe where I should start is that China is quite a small part of our business. It's significantly below 5% of our total business. So it's a very small market now. But obviously, I mean, it's a market where we -- despite health care reforms and volume-based procurement, we actually see opportunities. And I think that's really where we have spent some time diving into that to understand more from a -- more the long-term potential and is correct. I was in China last week also to understand a little further and to follow up on some of the decisions we made based on previous visits there.

I would actually say that, I mean, when we look at the market, I mean, despite some companies really being significantly challenged in China, we actually see a healthy potential for our solutions in China. And the key difference relative to other companies, you could say, is that we have actually products that are serving a real need and that are also innovative. And we have spent quite some time understanding the situation with the volume-based procurement before we invest.

I would also say, coming from a very low base, I mean, it will take a number of years before this is meaningful revenue. But we -- as part of the strategy, we also said that we invest in selected markets in Asia. China is one of them. India is another one, again, coming from a low base. But on a longer term, we believe that this is the right thing. We have a manufacturing facility in China that is -- that we have had for over 25 years that is actually running very well. So we can actually leverage that also to -- for our position in China and in urology, where we are very competitive with the solutions that we have.

I think, again, what we are really leveraging here is that we have very strong and attractive manufacturing costs because of our scale relative to many other players. So that also means that we can be competitive. And then we also have solutions that are differentiated on a number of areas, and we continue to invest in innovation to a different level than other players. So that's actually what makes us quite confident. But let me just finish by pointing out that U.S. and Europe will continue to be the biggest opportunity when you -- and where you will see most of the DKK growth coming from in the future.

The next question comes from Tobias Berg Nissen from Danske Bank.

I just have two questions. Also, you mentioned the order pull forward in Urology, ENT, and GI, like suggesting some budget flushing in this area. What kind of similar patterns have you seen, or have you seen a similar pattern in respiratory? And what are the underlying, you can say, customer dynamics here? And also in terms of flu, anything specific to call out here also into year-end and perhaps something you've seen here in January? That would be my first question.

Yes. Thank you, Tobias. I can take that. So I think in respiratory, we have seen more of a what I would call a normalized order pattern. So I think that -- I mean, we have not seen anything that -- I mean, where we think that there has been an increased buying for customers' own inventories. So that -- I mean, that's number one.

Number two, in terms of flu levels, I mean, there has been -- I mean, the flu levels peaking also here around year-end with increased hospitalizations in the U.S. in particular. Now it has in the last couple of weeks been going down again. I think -- I mean, we do benefit from hospitalizations from flu, but we -- it's in a lower and lower driver of our respiratory business because our scopes are increasingly used for other purposes. So that's also why, I mean, a couple of years ago, this took up much more space than it does now. So -- but we do have some impact that I will not quantify overall.

I think when both Henrik and I talk very positively about the respiratory segment, that's not something that should be seen as a short term or as the next quarter momentum. This is actually more of a longer-term underlying momentum that we see because we simply see, I mean, number one, an increased conversion to single-use endoscopy from reusable where we see very strong win rates of our -- from our solutions. So this is number one. And then number two, with an expansion of our portfolio with SureSight, I mean that is tapping into a new market, but it's also helping boost the bronchoscopy sales, both of aScope 4 and aScope 5 Broncho. So that's more of an overall positive effect that is less driven by some of these short-term elements.

Just as in terms of -- you mentioned your high strong win rates here. Have you seen those go up after you expanded that portfolio, both with SureSight and also the newest SureSight Mobile might be a little bit too early to comment on that one.

Yes, exactly. Yes. So I mean, the SureSight Mobile, I mean, it's too earlier to say, because we are introducing it, and we are doing that just to clarify, where we are testing it with some customers to make sure before we do the broader commercial launch. So we are not at the broader commercial launch of that yet. But we definitely see that -- I mean -- and this was also very much our expectation with the launch of SureSight that, in particular, after we launched this -- I mean, the full set of blades, so early summer where we had 10 blades available, we have seen actually a stronger momentum because many of our customers actually like that we have: the full solution where they can use both the aScope 4, aScope 5 Broncho and SureSight on the same monitor and system. So this is actually very much something we see as a positive, and that we see also helping our win rate and our general penetration in the hospitals.

I just have two short ones here. Perhaps just on Rest of the World, here, organic growth was a bit on the softer side, around minus 2%. And just looking at Q4, it was slightly up at 1%. Anything specific to call out here? Or is there some order fluctuation? What's going on?

Then just on Anesthesia and Patient Monitoring on a bit softer side this quarter due to these tough comps. But what are you seeing like in terms of leading indicators that should underpin this mid-single-digit growth you're guiding for the full year?

So I can take both, Tobias. So on Rest of World, if we start with that, then it's a mix of two things. So first, as I noted in my presentation, part of Rest of World beyond the markets, as Britt say, where we are deliberately focusing China and India are 2 examples, which are part of this category. Then this category or these geographies also represent a number of distributor markets, where you will see 1 or 2 orders a year. And therefore, depending on whether it is one quarter or the other, that will, of course, impact the growth rate quite significantly.

Specifically, if you go back and look at the same quarter last year for Q1, we had a number of big orders in this Rest of World geography last year same period, and that's a big driver of why you're seeing a lower growth now. On top of that, these markets are also still relatively speaking, more linked to our legacy business, Anesthesia and Patient Monitoring, relatively speaking, less to our endoscopy business. And therefore, they are also more impacted on where are we on A & PM versus where are we on ES, something that we are trying to change. And frankly, back to the question from one of your colleagues on the China visit, one of the reasons why we are pushing this agenda in these -- the endoscopy agenda in these markets because, of course, we see the same potential, though only at an earlier stage of the maturation curve.

So that also means -- to follow up on your question, that Rest of World, we believe, will be a very nice growth driver over time once we are through the change of the legacy business and even more focus on endoscopy.

Then ending on A & PM and the softer growth, I think as we explained, again, the growth for the quarter is mainly actually related to comparables. Comparables will become easier across the year. So that's one part of the answer to why we still feel comfortable about the mid-single-digit outlook for this business group. The other one is that we also still see us winning volume and also still see some areas, though much smaller for potential price increases.

One of your colleagues again asked about raw materials. Obviously, when we see these raw material prices increase, we also go out and work on price increases on our products. So it's a combination of those 2 things that means that we still feel comfortable with a mid-single-digit growth for this segment or business group despite the low growth in Q1.

The next question comes from Yiwei Zhou from SEB.

It's Yiwei from SEB. I have two left here. Firstly, on the -- just follow-up on the tariff payments impact in Q2. I previous got impression that the payments would be a similar level as in Q1. So there will be a bit more than DKK 50 million, but less than DKK 60 million. I was just wondering in Q2, can you confirm that it will be the case? So the margin impact would be more than 2 percentage points or 3 percentage points instead of 2 percentage points.

So I think it's nice that you're trying to make us become more specific, but I think I will just repeat my answer from before and say, as we communicated earlier, tariff costs will be higher in H1. Now you saw a level for Q1 alone. I'm not going to comment specifically on Q2 relative to Q1, but just repeat what I said earlier, being that we do expect tariff cost to be above the level for the full year also for Q2, i.e., above 2%.

Now in this context, if we calculate, I mean, you guide 2 percentage point for the full year, and you are confident to mitigate when you go into next year. So how should we understand the second half? I mean, if I understand correctly, first half, you already have like more than DKK 50 million in Q1. Q2 will also be pretty high. Then you need to deliver a step-up in the second half sort of to mitigate and also to ramp up the production. But we understand, I mean, this production ramp-up will take effect gradually through the year. So how should we understand the step change in the sort of the margin impact here in the second half?

So two clarifications. I think, one, we are guiding around 2% for the full year. So not explicitly 2% exactly, but around 2%. I think the second thing I will say is that, as you correctly note, the production transfers are a gradual process, but particularly the products that have the highest cost impact in terms of tariffs are the ones that are now really ramping up and have actually been ramping up for the last few months. Because as I also said earlier, the realization of the tariff cost happens with about a 3-month delay in our P&L.

In other words, therefore, I feel very comfortable in terms of the momentum shift, to use your word there, i.e., drop in tariff costs that we are expecting to see in Q3, Q4 because it's driven by the production transfers we are seeing happening right now and the ramp-up that have been started and are in the middle of taking full effect as we speak. So in that sense, those are the main drivers of that cost momentum shift, i.e., drop in tariff costs between Q2 and into Q3 and ultimately Q4.

Then next question to Britt. Also, on the cystoscope potential in China. To my knowledge, this market segment in China has been very competitive and there has been a lot of conversion post COVID. And there's also a number of Chinese single-use players competing to each other pretty intense. Britt, what gave you the confidence to enter this market?

Yes. No, this is a good question. And I think you're absolutely correct that there are a number of players in this market. However, I think -- and I mean, you know a lot about this market, obviously. But I think if you're in a position like we are, where you have number one very competitive, low manufacturing cost relative to competition. And then number two is a company that invests in innovation, then you can actually have a strong position in the marketplace. And it is also a large and attractive market. So far not -- I mean, it has not been included in the volume-based pricing.

I think when you look at China overall, the market that is slightly more competitive, I would say, is the market for ureteroscopy specifically. So I think that with our experiences in the Broncho segment with our bronchoscope, where we are actually -- I mean, where we are -- despite also competition, we are by far market leaders in the segment and some of the -- I mean, the benefits that we have in terms of a competitive solution, we believe that there is -- I mean, we will not be the only player in this market, that's for sure. But -- but I think we should be able to gain a sizable position winning over competition also over time.

I just want to follow up on this. I mean in the Chinese endoscopy market in general, we know that the Japanese reusable manufacturers used to have a very high market share and China has always been their main focus. But given sort of the increased geopolitical tensions now between China and Japan, I mean, based on your learnings from the trip, are you seeing that -- do you think this will potentially push sort of a faster market conversion to the single-use in China?

Yes. No, it's a good -- this is actually a good point. And I discussed, I mean, with a couple of different, I mean, local out there around the whole Japan situation. I'm not -- I mean, I'm not fully convinced to be honest, around how much that will impact. I think what will more drive the market growth is, I mean, there's a need in China for health care to a broader part of the population and the fact that we are able actually to support with our solutions delivering that they can do more procedures less -- I mean, more at lower cost and also the whole investments into the capital equipment that is -- that some of them also struggle with. I think that is more one of the drivers. I'm not -- and it could be the whole China, Japan issue can have an effect, but I'm not fully convinced that that's more maybe based on the mixed signals that I got, but it's a good perspective.

The next question comes from Delphine Le Louet from Bernstein.

Just a quick follow-up effectively on the tariff, and specifically to the Mexico ramp-up and actual levels of manufacturing and production and the one we can expect over the course of the year. So I really understand, and thank you for the precision regarding the lag effect in between the manufacturing and in a way, the invoicing.

The second question will be -- and will deal with the CapEx allocation, probably broadly and just thinking about the free cash flow. And so thinking about the CapEx when it comes to allocation to innovation and when you think about the innovation in between the products and also in between the, let's say, EndoIntelligence you've been axis on. So that would be interesting to see and also if there is a bit of a seasonality here.

Finally, can we get a broader view, Britt, on the sales force organization in North America, how that has changed over the course of Q1? What is left to be made? Any comments on that would be appreciated.

Yes. Thank you, Delphine, for good questions. Let me start with the last one, and then I'll hand over to Henrik. So I think we have -- I mean, we have definitely -- while we have a strong presence in North America in terms of our own commercial field force that is actually working well, we have -- based also on the growth and the demand, we've seen a number of areas where we could optimize. And as you also know, we brought in a new leader, Scott Heinzelman, who joined us end of August. And together with the team, he has been implementing a number of initiatives that can basically support also our way of serving the customers and improve how we do that.

So you can say one thing is, I mean, slightly restructuring how we approach the customers, not only in terms of territory restructuring of our product focus, but very much also in terms of how we are set up to better address the health systems rather than the individual doctors, given how the U.S. market is evolving. And then, I mean, we already have a pretty good position and set up with -- to work with IDNs and GPOs, but that's also where we have seen some ways that we can further strengthen our presence.

So I think some of what we are doing to just sum up is that we are adding some more headcount and as we are -- we have been adjusting the structure a bit to make sure that we have enough feet on the ground to serve our customers. And then some of it is also improvements in how we operate. That will also give us some more ability to serve the customers. So I feel confident we have -- to your question on timing, we have done some of these initiatives in Q1, but that will -- I mean, it will actually be more something that we are focusing on in this quarter and next quarter.

So on your other two questions, I'm not sure I fully understood what exactly you're looking on in tariff costs specifically. But I think the ramp-up, as I understood your question, I think it was mostly related to the ramp-up in Mexico, the timing effects and how much further we can ramp up. I think the overall message there remains that we have a very big factory, fortunately.

In Mexico, we feel very good about that and particularly now under the USMCA trade agreement with U.S. that is, of course, has been and remains a very critical strategic site of ours in North America next to our factory in Noblesville. We are still have plenty of extra space in Mexico. And I think I've been quoted before for saying we only take up about 50% of the physical space there. I think now we're starting to go a little bit above 50%, but not much. So there's still a lot of space left. And that ramp-up is a continuous ramp-up at the same efficiency level, as we also discussed before, as we see in Malaysia, when you account for slightly higher direct production costs, but on the other hand, of course, lower distribution costs between Mexico and Malaysia. So it's happening at a net 0 gross margin impact when we transfer our product.

So overall, we're really comfortable about that. And that ramp-up is happening. And as per an earlier question, particularly now on some of the higher-value products that have been driving higher tariff costs. And therefore, as we see that happening right now, that will also flow into the P&L, not in this second quarter, but particularly in the third and fourth quarter of this financial year. So I hope that answered the question on tariff costs and the link to Mexico.

On CapEx allocation, you are right that we are continuing to increase our CapEx allocation or CapEx investments in general. I think they mainly fall in 3 categories. So there's, of course, the serving of the existing hardware portfolio of particular endoscopy products, which is the vast, vast majority of the focus of our R&D investments. But a larger and larger share of this also goes towards EndoIntelligence, i.e., software, AI, but also the monitor and the monitor processing itself. I'm not going to split that in detail, but those are taking up a higher and higher portion. And as you can see also in the notes of the quarterly announcement where you can see R&D costs adjusted for depreciation and amortization and then added back CapEx, you see quite a significant higher investment R&D-wise this quarter versus same quarter last year.

The only last thing on CapEx is, of course, we are also then looking at what are other investments across the company, they fall in the category of, like, Britt said, some of the systems and tools we're doing for commercial investments and ultimately, also what are the inorganic opportunities we see next to all of this that could accelerate our innovation road map and could, you can say, yield further growth potential on top of our organic growth ambition.

All right. But please, just to be back into this production ramp-up, can we think about a 60% by the end of the year in Mexico? Or is it too -- in a way too aggressive?

I think that's probably a little bit too aggressive in the sense that the physical space is so big. So I think the way you should rather see it is that we want a higher and higher share of the North American market to be served by Noblesville and Mexico. Again, we're not giving specific percentage ratios, but there is a substantial step-up happening that has actually been undergoing for the last 12 months, but now is still undergoing right now as we speak.

We now have a follow-up question from Jesper Ingildsen from Carnegie.

Just have a question on the Section 232. I wondered if you had a view on the timing of potential outcome here and whether you think that the U.K. -- USMCA would still stand in if this goes through. Just wonder if you had any insight to that and maybe on the back of discussions with the AdvaMed.

Yes. No, thank you for that. And I think it's -- we are, of course, in close contact with people that are close to the matter. And I think it's a little premature to speculate too much. However, I think -- I mean, the signs at least that we see now, and obviously, we are preparing for different scenarios is that it's, number one, it's likely that it will come out in the next month or maybe 2. I think that seems to be the case.

Then you could say also in terms of USMCA, that seems to be so fundamental in terms of how -- I mean -- and important to the U.S. market. So it seems also, again that this setup is expected to continue. So I think we, of course, prepare for different outcomes, but it seems to go in a direction like that. And then, of course, on top of the Section 232, there's also the whole court case around tariffs in general. And we are a little unsure right now about whether they're waiting for that before the 232 conclusions. But I think it looks -- I mean, with the different scenarios that we have been planning for, it looks very likely right now that -- I mean, that it will end in a way that supports our ongoing plans.

We have a follow-up question from Martin Brenoe from Nordea.

Actually, most of my follow-ups were taken in the previous follow-up, but just one simple question. When you are doing these mitigation actions, can you just verify for me whether you are behind the plan in terms of the mitigating actions, you are on the curve or you are ahead of the plan here end of Q1 would be very helpful.

That was a clear and simple question. We are on plan, neither ahead or behind. So we are on plan.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Britt Meelby Jensen for any closing remarks.

Thank you very much. And my only closing remark will be a thank you for listening in on today's call and also thank you for very good questions. So we wish everyone a good rest of day from here.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.

Good morning. I'm David Adlington. I head up the research team for medtech for JPMorgan in London. It's my pleasure to introduce Britt Meelby Jensen, CEO of Ambu, and there'll be Q&A afterwards this. Britt, over to you.

Thank you, David, and good morning, everyone. I've been looking forward to present at this year's JPMorgan conference. For those of you who remember last year, I was excited last year to present double-digit growth and strong progress on our ZOOM AHEAD turnaround strategy. This year, I'm even more excited to present another year of strong double-digit growth and also that what has led into our new strategy where we are basically have an ambition to advance our single-use global leadership position towards global endoscopy leadership.

So many of you may know, but we are a Danish-based company founded almost 90 years ago. Our focus has really been doing groundbreaking innovation within medical devices and technology. 70 years ago, we were the first to innovate a resuscitator changing the world of that. And today, we are still selling millions of that. 50 years ago, we invented cardio sensors, which is also a product we are selling a lot of. And all of this represent our legacy portfolio, anesthesia and patient monitoring, which last year grew almost 10%, which is higher than what we normally expect of 3% to 5% and the higher growth is basically driven by strong commercial execution and price increases.

So I'm not going to talk more about this area today because what we are really excited about in Ambu is our endoscopy business. This business, we grew over 15% last year organically. It now represents around 60% of our global total revenue in Ambu, and this is where we have our focus on towards global endoscopy leadership, investing in groundbreaking innovation. We have scalable manufacturing and strong commercial execution.

So if we look at the growth and if we compare ourselves to the medtech average growth, we are actually and have, for the past number of years, been growing more than the medtech average company, which is 6%, and our growth has been 14%. And even if we compare among the top-tier medical device companies, their growth is 11%, so still below our growth. If we then look at the last period, we have also had a bump on the road. And this is where I joined the company 3.5 years ago, where we basically faced the situation with declining growth, declining profitability, negative cash flow and a high debt.

We launched a ZOOM IN focused strategy to turn this situation around, and I'm happy to report that this has been successful. So we now have had 2 years of solid double-digit growth. What happened for us basically was that we overinvested into the most complex segment of GI where we, in the first round, were not successful. So this is where we took some measures and took a step back from that area, which I'll come back to and basically focused on the other endoscopy areas where we could see a strong potential.

If we then look at what I'll talk about today, there are basically 3 themes that I want to cover today. First, starting with the market, how we have a strong leadership position in a high-growth market with the single-use endoscopy, our ZOOM AHEAD strategy where we are really moving towards global endoscopy leadership. And then also, I'll end by showing how we have a clear path with strong double-digit growth towards 2030.

So if we start with the market, basically, at full penetration, the single-use endoscopy market is large, representing in U.S. dollars around USD 30 billion. What you see here is our local currency, DKK. It's also a market that is growing and expected until 2030 to grow over 20%, some of that growth, the 5% is coming from an underlying growth of endoscopy with aging population, increase in minimal invasive procedures and so on. But most of the market growth is coming from an increased single-use endoscopy penetration.

So if you look at the middle here, you can see across the different areas, there's large variation in terms of the single-use penetration. And if we look at the largest market, GI, this is where it's the lowest penetration, and this is also where we are focusing the least. But there are good reasons to believe that this market is going to convert much more. And when you look at the market, and it's basically a total today of 3% to 4% single-use penetration out of the total endoscopy market. So basically, there's a lot of white space. And let me talk about why I think we -- this market is changing and what I base this on.

So on the next slide here, I have 2 points to make. The first one is on the left side here. If we look at the different business areas, you can basically see that the penetration, and this is a U.S. example, varies across the areas. So we were the first to come out with a single-use endoscope, and that was the bronchoscope back in 2009. And this is also the segment that you see has the highest penetration today of 25% in the U.S., slightly lower elsewhere. Then we came out in '18 with an ENT scope now 5% of the penetration in U.S. And then we were successful with a cystoscope that we launched some 5 years ago that now has a penetration of 15%.

But the real interesting part on this slide is basically that when we earlier this year asked physicians in these areas, how much do you think you can use a single-use endoscope in your daily practice? They basically said that they believe that 70% of the procedures that they do are applicable for a single-use scope. So this, again, talks about a very strong potential. And if I then try to take that number back to the total market that I talked to you about before, let's then -- and this excludes GI, but let's say that we get to the 70% that the doctors are telling us, that corresponds basically to a market that is DKK 50 million or just over DKK 8 billion -- USD 8 billion.

If we look at where we are today, the market is basically around $1 billion today. If we then apply the growth rate of 20% CAGR that I talked about before, that will bring us in 2030 to a market of DKK 15 billion or USD 2.3 billion. And that should be put into perspective that when we also add GI and talk about the full penetration, this is what gets us to the DKK 190 billion or $30 billion. So again, this illustrates a huge opportunity that we see.

What is basically driving the penetration among the doctors that we serve it's or the hospitals, it's basically 3 things. The vast underlying driver of why they choose to use our scope is basically efficiency at the hospitals because they can basically see that a lower cost, they can treat many more patients with fewer resources. I have a quote up here from Dr. Kennelly from North Carolina, basically saying that when he switched to our aScope 4 Cysto, he was able to treat twice as many patients because he could go and take down from the rack a single-use cystoscope as many as he needed without having to worry about the reprocessing. And he could also be comfortable that he would use a fully sterile cystoscope every time.

The economics also play a role, and this is where we hear from doctors when they do their budget models that they actually can save money by converting to single-use. And then lastly, we are actually also at a situation where we look at the total solution where one key quality driver is image quality that we, with our latest solution, aScope 5 Broncho, as an example, have been tested to be on par and with other parameters, even better than the reusable scope. So we are at a level now where we actually are able to match that image quality. And I'm going to come back and talk about that because that's really also where technology evolution around us is really helping us improve our offerings.

So it's also based on all this exciting stuff and our progress that we earlier this year launched our new strategy, our ZOOM AHEAD growth strategy. So this was basically after a fast turnaround, we launched a strategy on how we are moving towards global endoscopy leadership. It's about some strategic choices that we have made, and then we have a couple of strategic themes. And if I start by talking about some of the strategic choices here, we have basically learned, and I think many of you can subscribe to that, that focus is key if you want to drive progress. So we have made a conscious choice that the 2 areas that are the most important for us right now is to win in respiratory and to win in urology. Then we are continuing to grow in ENT, where we also have a new solution in development and where we see great potential. And then we are very excited also about gastroenterology, but we see that as a more long-term play, and I'm going to come back to that.

All of this is going to happen through our EndoIntelligence platform, basically the technology that supports our solutions. And before I go into these different areas, let me just talk about EndoIntelligence and the benefits that we have, which are more appealing than when you look at some other companies. So basically, when we developed our endoscopes, we have -- not only do we have the broadest platform out there of single-use endoscopes, but we have developed all of our scopes on one software platform, which not only is a benefit when we sell into hospitals because we only need to be approved by the hospital IT department one place, then they can use our systems across. But also, it brings great benefits that you can basically, in terms of innovation -- innovate and leverage that across the different areas and you can also use our monitors and software across the different therapy areas if you run out of some in one part of the hospital.

So let me talk about respiratory, urology and GI and give you a sense of how we are thinking specifically about those 3 areas, starting with respiratory. So basically, this is where we all started. And we are now -- we now have our fourth and fifth generation of bronchoscopes in the market. They come in very different sizes and with some accessories. And we do, as I alluded to before, have a very high quality in terms of image and other features on our aScope 5 bronchoscope.

We have our next generation in development as well because innovation is on the core of what we do. But what we are very excited about as well is that we broadened our portfolio in respiratory last year with the launch of a video laryngoscope. So this is an attractive market as intubation with laryngoscopes is more and more moving towards from direct laryngoscopes to video laryngoscopes so with a camera in the end, which is at the core of some of what we are good at.

On top of that, you can actually use it on the same software system and monitor. And in many procedures, you actually both use a video laryngoscope for incubation and then the bronchoscope when you are to go further into the lungs for inspection. So we have had a strong receival of this product in terms of doctors adopting that. It's still early days and what we're excited about is that we are right now also moving into the launch of a mobile version where you basically -- you don't -- you use the same [ blades ], but you don't connect it to our system, but you have a small screen on the laryngoscope, which is very convenient for emergency care and so on. So we are very excited about our leadership position in bronchoscopy and continue to innovate in this area.

Then we come to urology. So this is an area that we were not present in 5 years ago. We have had a very strong uptake with the first generation of our aScope 4 cystoscope. We have seen hospitals not only using it for some procedures, but many switching to that because they can basically use it for all of their bladder cancer screenings, which is how the cystoscope is used the most. So we have launched an advanced version, an aScope 5 version of the cystoscope as well. But then we have also last year launched a ureteroscope single-use in order to have the full portfolio in urology. And this is actually a product where it's the first time that we are not the first with the uretero single-use solution, but we are seeing both a very high quality, which is testament to the knowledge and innovation quality that we have, but also the combined portfolio being very appealing. So we are off to a very strong start when it comes to our ureteroscope, and we are continuing also to be focused on broadening our portfolio in urology.

Now let me then talk about GI because this is, as you saw before, by far, the biggest total addressable market, but it's also a market that is slightly different than the other markets as we learned the hard way some years back. We still believe there's a unique opportunity to unlock this market. And as I alluded to before, technology is really advancing rapidly. And costs are coming down on the costly component of our scopes, which is the camera and the sensors. Just think about your own mobile phones, how the quality of the camera is continuing to be better.

So this is actually also why we strongly believe that this market is eventually going to convert because we see some of the same needs and challenges that doctors have in other areas, doctors within GI have the same challenges of not having efficiency, having the reusable scopes being out for repair, having the reprocessing and so on.

So we believe, by far, we are the best positioned to win in this market. But what we also did a couple of years ago was that we took a step back and we deployed most of our commercial resources into the other business areas where we could see a more short-term immediate uptake. Then we had our aScope Gastro that we have launched very selectively primarily into the ORs in the hospital with limited commercial resources simply also by -- with the objective of learning and gradually expanding that before we have a solution that can address the bigger market, which is what we believe is the future and also which represents a huge potential.

So all of this is brought together and also enabled by our EndoIntelligence. So it's basically, I mean, our hardware platform the strong software we have, which can also connect into the hospital systems and then the AI applications that we have as well. And all of this basically helping clinicians before the procedures with training, preparing for the procedures and so on.

During the procedures, obviously, you would imagine AI having a lot of benefits in being better at detecting cancer, knowing that there are studies showing that 20% of bladder tumors, as an example, are not seen during a procedure and then also after the procedure, where there's a lot of documentation, attaching the pictures and the videos from the endoscope onto the patient files that the doctors will benefit from.

So this is where we are investing a lot, and we have made investments in the past years, bringing strong capabilities into Ambu in terms of software and AI because we believe this is very much the future.

So let me talk about briefly the other side of our strategy, the strategic themes. And we have 4 themes here. We have customer centricity. I mean it's all about not only understanding what we are solving for the customers, but actually what we are also doing and have done since we were started is to partner with the doctors when we develop our solutions. It's about the innovation where I talk about the disruptive technologies, how we apply them. But also the new thing in our strategy here is that we are not necessarily going forward looking at this as something we do ourselves alone. But basically, we also look to partnerships because there are some things where it simply makes more sense for us to partner than doing it ourselves.

Then we are very focused on our platform, our business platform, having a scalable operations that can help us scale. I'll come briefly back to this. And then at the end of the day, we are not able to achieve anything if it wasn't for our people. So what we have been doing in the past couple of years has been investing a lot in transforming our culture, making sure that we are a nimble organization that has the right capabilities, but that can also make fast decisions so we can advance in the market.

Last year, we also brought new talent into our leadership team here in the U.S., recruited a new strong President, and this is half of our market. So this is an important position and also brought in a very experienced seasoned global commercial profile.

So if I just put a few words here before going to the financials on the innovation and the business platform. So on innovation, just to give you a little flavor of how we are thinking about disruptive technology and what it is we are working on to basically make sure that even for the complex procedures, we can provide affordable high-quality scopes that can meet the reimbursement levels that we see out there.

So basically, on the camera side, I alluded to that before. A lot of things are happening technology-wise that we are bringing into our endoscopes. On the software platform, we actually also see opportunities and are working with opportunities to enhance the image quality, not only by an expensive camera, but also through the software, lightning and so on. And then we are working on some different AI applications. The example here is a bronch simulator where you can basically see which parts of the 37 parts of the lungs have I inspected. And that doctors very much like because they know that sometimes, even though they say they are very experienced, that they can miss one of or more of the parts of the lung. So this is where we are continuing really both to bring in talent, advance our own expertise and also we're in partnership discussions because this can help improve our solutions.

When it comes to our scalable platform, there's basically 2 messages that I want to give here. One is that with our manufacturing footprint that we have right now, where we have -- we, a couple of years ago, opened a big facility in Mexico, where we are now producing a big part of our scopes for the U.S. market. We have ample of capacity here. So we basically have a scalable setup that is also able to meet the geopolitical situation and the changing world that we are in now.

And then secondly, I'll also say that we have -- compared to everyone else out there, we have documented that because of our scale and long history of making single-use endoscopes, we are actually also the most cost-efficient in our industry, which is also an important parameter because we are, at the same time, delivering the high quality.

So let me now, before I hand over to you for questions, David, look at some of our financials, starting with our revenue because you should look at Ambu, where I started as a high-growth medtech company. In October, when we had our Capital Market Day, we also announced our long-term ambition. And we believe that overall, as a company, taking both endoscopy and the legacy businesses, we will, over the next 5 years, deliver a CAGR revenue growth organically of 11% to 13%, and then it will be slightly higher on the Endoscopy business. It's mainly in these numbers when we talk endoscopy, it's the respiratory and urology areas that I talked about before that are bringing most of the revenue in. What is not factored into this, it's 2 important things. One is the M&A agenda and the other thing is, I mean, the strong -- more aggressive growth in GI.

On the M&A agenda, I should maybe say that this is something that we are actively exploring right now, very much aligned with how we can advance and accelerate our current strategy execution. So it's within the areas that we are already in. And with a strong balance sheet and no debt and being cash generating, we believe that this is the only right thing for us to do.

Then if I look at our margins, what we are also expecting when it comes to margins, I mean, we have done a huge uplift in our margins where we are now at 13%. We are expecting to go in the next 5 years towards 20% and slightly above. 1/3 of this is coming from gross margin improvements and 2/3 of this from operating leverage. When we launched our strategy 3 years ago, the former strategy, we also launched a transformation program. And we still have a number of the efficiency programs from them that we haven't delivered on. And this is because we are continuing to balance that we are a growth company. So this is not saving ourselves to success. So we are continuing very much to invest also into growing. So we are -- in these margins, you should look at it that we are both investing into commercial resources that we are continuing and as well, we are making strong investments into innovation.

For this year and our fiscal year starts October 1, we are guiding a revenue growth of 10% to 13%. And that's if we look at it on the endoscopy side, more than 15% and then anesthesia and patient monitoring coming down to the normalized levels with mid-single digit. And then the EBIT margin where we have, in particular, in the beginning of the year, some tariff impact that we have a plan to mitigate. It will -- we are guiding 12% to 14%. And then because last year, we had a very strong first half, the growth -- the percentage growth in our case will be higher in our second half of the year than in the first half of the year. And then also, again, a strong cash conversion.

So I think that concludes my presentation. And I think a good summary will be that we are really in a unique high-growth market, growing more than 20%. We are today the #1 single-use endoscopy player. We believe that we can leverage that position and grow much more as we take more market share from the reusable market. This is very much done by our strong innovation. I talked about how we are leveraging technology more and more to increase our position, our strong scalable growth platform and then strong, obviously, commercial execution with our customers.So this is our path towards value creation, not only internally, but ultimately also to create value for our shareholders. So that concludes my presentation. I will hand over to you to run the questions, David.

Great. Thanks, Britt. Maybe as a bigger picture question. As you think about the growth in endoscopy, that double-digit growth you're seeing in the market, but also for you guys, from your perspective, first question is, how much of that growth comes from increasing penetration of areas you're already in and how much comes from new products?

Yes. So I think we are -- that's a super good question, and we are not guiding specifically on that. But I think an important point and thing to have in mind here is that when we look at our -- and you can see that when you also look back on previous launches, when we look at our new product launches, we are not in a business where we have like a hockey stick growth when we immediately launch a product. Our launch curves are more flat and then continuing out for a long time. Like we see that the growth that we are delivering in urology, that's basically most of that. Now we have the ureteroscope, but most of that has been a continued strong growth from the product that we basically launched 5, 6 years ago. So that's also why we feel quite comfortable that our growth cycle is longer for our solutions. And then when we add new products, I mean, that will help drive growth.

So it will also -- I mean, you should expect to continue to see significant growth from the existing solutions. And then we are, of course, also bringing next generations to the market, both. I mentioned ENT, we have a next-generation bronchoscope in development, the same for our cystoscope. So we are continuing to improve our innovation.

Perfect. And obviously, it's an attractive market given how fast it's growing. We should expect some competition, some more competition. How are you feeling about the competitive pressures and the impact on price in particular?

Yes. So I think -- I mean I think when you come in and you create an attractive market, I think there are a few markets out there that -- where there's only one player. So then -- I mean, it is fair that, I mean, when you have an attractive category, you attract competition. And in our case, I think you should never underestimate the competition. What we see now is that competition in our case, with the exception of one competitor in bronchoscopy in the U.S., it's basically Chinese players that are entering the market. And I think they have a different business model. They are not -- I mean, we know that we have lower manufacturing costs. So from a price perspective, you can say we are well positioned here. But we also know they operate with a different more long-term model.

So we do see very selectively a pressure on price, for example, in tenders. But that's where you can say. I think few industries are generated where companies win on price. So our focus is really on the differentiation, and that's where we benefit a lot from the EndoIntelligence platform and the superior performance on our scopes because a lot of the needs are basically also fulfilled and through the software, and that's how it's continuing.

So I think it's fair to assume that they will have a place, but it's also an important note that they're also helping accelerate the single-use category because we cannot, with the size of our company, be the only voice and the only one driving single-use conversion. So we, to some extent, very much welcome competition that helps expand that category. And then it's our job to continue to differentiate to be the best. And we think we are very well positioned to do that.

And perhaps if I can add, so if you look at how we then constructed our long-term guidance, you can say we estimate the total single-use market to grow plus 20% but are guiding, I'm not going to say only, but still only 15% to 20% for our own business, thereby also taking into account that we will lose some market share in some areas. And the vast, vast majority of our growth, therefore, is really still coming off reusable procedures converting to single-use.

Perfect. And then you mentioned the innovation in terms of new versions of current products. What additional features do they bring? And how are you able to extract price through those innovation?

Yes. So -- and I think I cannot go too much -- it's a great question. I will not go too much into detail for competitive reasons, but we are obviously, as I talked about, leveraging new technology to continue to improve on existing features such as image quality and a number of other features. And then we are also -- I mean, based on all the experience that we have from working with customers, seeing some additional features that make sense for us to develop. So we are making better endoscopes continuously.

And also, we will have a broader range, the example that we have in bronchoscopy where we are selling a lot of aScope 4, which I mean, came out 7, 8 years ago now. That has a lot of basic functionality that works well for most of the procedures. But then we have our aScope 5 in parallel, which is premium priced and can be used for some of the more advanced procedures. So that's also how as we are advancing in this area that we can -- we have a portfolio play where those that are not able to pay, I mean, we will have different solutions compared to those where they can pay.

And we have, and I would say, in particular, in the U.S., we have seen a very strong uptake of our aScope 5 Broncho so the most advanced version. And that also illustrates the ability to pay is slightly different than if you compare to some of the tenders in Europe as an example.

And just going back to pricing. On a like-for-like basis, are you able to get any pricing uplift? Or is it -- are you seeing some flat to down pricing?

Yes. Because the way that we sell is very much contracts. And you can say we do see with competition coming in and again, back to the tactics that we see from the kind of competition we have, they will come in and offer a very low price. So we are, of course, in some of these case by case looking at, okay, what is a meaningful price for us to give. And sometimes we may offer a slightly lower price than in other cases. And then in other cases, the price will be higher. So it's really a mix. But I think it's very important also to say that, I mean, even customers tend for good reasons because hospitals are under pressure to focus on price. But we also see that at the end of the day, it's about the quality.

So we have several examples where they have bought a lower price or scope and then they come back to us because they cannot deliver the results they need. So it's very different dynamics, and they are different in the different parts of the world and in the different business areas that we operate in.

Perfect. And then most of the scope you launched, you've been kind of the first guys to market. The ureteroscope is slightly different. You are the second guy to market. How has that impacted how you've launched the products and the adoption?

Yes. So I think that has been -- I mean, internally, there's been some great both discussions and learnings from that. And it is, of course, you can say we are launching into a market where, I mean, the first was Boston Scientific, who launched their LithoVue 8, 9 years ago, basically at a very high price. So I think if you look at that market, the price point is quite high. At the same time, then we see a number of -- that this market is getting more crowded with a number of competitors. Actually, I think all of them outside Boston coming from China, and they are much more aggressive on the pricing. What we have seen is that, I mean, they're taking share from reusable that is still a big part of this segment. They're taking share from Boston because their technology being 8, 9 years in the market is from a past generation.

And then we are, of course, seeing that, I mean, we have to learn how is it we play our benefits and our differentiation in that market. Where we do see the most obvious difference I should mention is that the evaluation time in the hospitals is getting longer because where they before and in our case, they had to test or evaluate one scope that was ours because it was the only one out there. Now there are several scopes out there that they are evaluating. And that's, of course, prolonging that evaluation time. So that's really one of the learnings that we have had so far that, that postpones that decision-making ultimately.

Perfect. And then maybe switching across to some of the financials. A lot of moving parts from -- particularly on the margin, your balance between investing for growth and margin. Maybe you could just talk a little bit to that.

Yes. So I think, again, I mean, when I came in, I mean, we finished the year with 2.7% EBIT, which is far below where we need to be. So in 2 years, we were actually able to grow our EBIT margin with more than 9 percentage points to 12%. So that's, of course -- and again, as I mentioned before, we launched like a transformation program, but we could see that some of the initiatives to improve our efficiency would take longer. So those are still running, and that's very much because we need -- I mean, as we scale and as we grow, we believe that you can only grow the best if you have a very simple, efficient, scalable setup. So that's really, I mean, where that makes a lot of sense.

Now we are not -- I mean, with the growth potential that I just shared, we are a company that should not save ourselves to success, we should invest for success. So that's also really how we are balancing. And as soon as we could see that our margin was on the right track, that our transformation initiatives work, that's when -- and that was around the time Henrik joined that we started to invest in growth because this is, I mean, really a growth story and you're only growing even we have great products, but you need the commercial muscle to be able to also sell them to the customer.

So that's the balance we will continue to do. And when we talked about our 20% EBIT margin a couple of years back also for '27, '28, we talked about and we continue to talk about that balance with growth opportunities because we should not try and save the last money to meet the EBIT margin if there's a great growth opportunity. But at the same time, that growth opportunity also needs to be there, and we need to have a good feeling that this is actually also there before we invest. So that's really how we run the business. It's very much around growth and a scalable setup.

And in terms of investment, is that into both R&D and into the SG&A side? And on the SG&A side, do you have dedicated sales forces by product?

Yes. So I mean, we are continuing to invest into innovation because it's all about innovation. So that remains a key driver. But on the SG&A side, it is very much then on the commercial side. I mean, having more feet out in the clinics and hospitals. And we are not -- I mean, we are not that open about how many and how our structure is. But we do -- in the bigger markets like the U.S., we do have a split. So it's not the same person that goes to all specialties. But we also -- have also a structure where because the hospital administration are making more and more of the systems that we also leverage the broad portfolio. And we can see that's actually working quite well.

And if I may add, this is also where we see a lot of the scale going forward. So in our respiratory portfolio, as Britt explained, we launched the video laryngoscope solution. Obviously, that is being driven by -- to market by the same sales force that sells the aScope 4 and aScope 5. So to a larger and larger extent, the new innovation will also be able to be channeled to market through the existing sales force. And once that's matured and established, it requires less and less investment.

I think as we go forward, coming back again to the balance between growth and scale and investments, I think really one of the things we're looking at, of course, is for some of the newer areas that are around our business today, GI as a very concrete example, what is the speed by which we want to invest further in that because that will initially be a drag on OpEx versus what is the opportunity we see on the mid- to long term. And that's still the balancing, you say, between organic growth and EBIT margin that we're trying to strike right.

And then just touching on M&A, which you mentioned, obviously, as an additional potential source of growth. I wonder if you could add some color in terms of the areas you're potentially looking at whether you'd be willing to take on some dilution to your margins in order to be able to -- in terms of what you acquire?

Yes. I think that's a little premature to answer that now, but we are very conscious on not only that it fits with our strategy and our focus, but also that we -- I mean, are not taking something on that is margin dilutive overall. Then you can say there's something about depending on what it is and what stage that there may be some short-term dilution to get to a longer-term or mid- to long-term higher potential. So that's how we need to balance. But I think it's fair to say that we are looking across the areas. I mean, what is it that can complement or strengthen our offering in the areas that we are already in -- and that can both be on the device side, but also very much on the technology side.

And then finally want to wrap up, the other side of M&A, potential divestment. We didn't talk very much about anesthesia patient monitoring today. It's a decent business, a very different business to endoscopy. Is that a long-term part of the business?

Yes. I mean -- and I think that's a good question that we get a lot. And you can say right now, we believe -- I mean, it's still 40% of our revenue. And I mean, we made the decision, let's see without adding resources if we can improve our efficiency. And that's -- I mean, you saw the results, we managed to grow 10% last year. It's 2 very different areas. Anesthesia has slightly more synergies with our endoscopy and respiratory portfolio than patient monitoring.

But we are -- I mean, right now, we believe we are the right owners because we can manage with the setup that we have. But we are, of course, we'll have to going forward as this is becoming a smaller and smaller share of our total business. We will, of course, continue -- continuously evaluate whether we think we're the right owners. But that's not -- I mean, that -- the direction for now is that we believe we are now. And we also believe that the distraction of going through a divestment when we're able to deliver strong results is -- may not be the right time for now.

Perfect. Great. Well, we'll wrap it up there. Thank you very much, guys.

Thank you.

Welcome, everyone, to the Annual General Meeting of Ambu. My name is Jorgen Jensen, and I'm the Chairman of the Board. I've been very much looking forward to our Annual General Meeting today to take stock of another year for Ambu with double-digit growth and several milestones. It's wonderful to see so many of you here at our headquarters in Ballerup. I also know that many of you are following proceedings online. And on behalf of the Board, I would like to welcome all of you.

At my side, I have the CEO of Ambu, Britt Meelby Jensen; and attorney at law Niels Kornerup who has been appointed by the Board to Chair the Annual General Meeting. He will take us safely through the program today. Britt and I will share our reports on the activities of the past financial year, a year in which we completed our focused turnaround, and we started the new financial year by launching our updated strategy, ZOOM AHEAD. together with the entire Ambu team, we are both excited to execute on that strategy.

And I now leave the floor to the Chairman of the meeting, Niels Kornerup.

Thank you for appointing me Chair of the Annual General Meeting of Ambu. I look forward to a good meeting with a good discussion. The meeting is held as a physical meeting with shareholders in the room, but it's also possible for shareholders to put questions and follow the proceedings electronically via the investor portal. It's not possible to put questions electronically if you follow the meeting via a webcast from the company's website because you can also follow proceedings electronically via the webcast. And that's why it's not possible to put questions that way. The transmission from the webcast will be stored, and it is therefore possible to watch it or rewatch it, the meeting that is at the company's website as soon as possible. My first job is to find out whether the meeting is legally and lawfully convened and is quorate in relation to the business on the agenda.

Before the meeting, I checked the notice convening the meeting, it was sent out in due time, and it meets the legal requirements of the company's articles and Danish company law. So unless any objections from other quarters, I find that the meeting has been legally and lawfully convened and is quorate. It looks as if there are no objections, I will enter that into the minutes. I can tell you that at the access control just before the meeting started, we found that there's 121 people present in the room, out of which 50 are shareholders. There are 79% of the voting stock represented here and 56% of the share capital is represented. A number of proxies and postal votes corresponding to 15% of the represented votes have been filed. And this means that the [ shareholders ] are also represented in the room.

The final numbers of all this will be reflected in the minutes. As on previous AGMs, for the sake of good order, I wish to refer you to Section 105(5) in the Danish company law concerning a full explanation of votes that take place at the meeting, which must state the full process and numbers voting for and against. This requirement can be waived, and we've done that on previous occasions. And in order to have a smooth process of today's meeting, I recommend to you that we do the same this year. Can I count on your support for this? I can. Thank you very much.

And for practical reasons, I would like you, if you wish to take the floor to make yourself known to me, and you must come up here to the microphone. I will make sure that speakers also get the floor in relation to the right item on the agenda that they wish to speak about. The agenda is the same as the one issued with a convening notice. And here, we see it on the screen. First, we hear the management report, then we have annual report and annual accounts, financial statements. Then we have the remuneration report. Then we have appropriation of profit, the proposal from the Board concerning this. Then we have Item 5, which is remuneration for the Board for fiscal '25, '26. Item 6 is election of Chair of the Board; 7, Vice Chair of the Board; 8, other members of the Board. And the last item with an election is 9, which is the election or appointment of auditors. Then in Item 10, we have proposals from the Board. There is only one, and this has to do with an amendment to Article 24, which deals with the language to be used at Annual General Meetings.

And then the final item on agenda 11, which has to do with granting authority to the Chair to file the protocol with the Danish company's agency. We will deal with the first 4 items in one row, so we will have the management report, verified annual report, financial statements consolidated, the remuneration report and the appropriation of profit. And first, we will hear the Chair of the Board, Jorgen Jensen, followed by CEO, Britt Jensen. First, the Chair of the Board, and he will deal with 2 items, and then we have our CEO, who will deal with the last 2 items, including an explanation of Ambu's strategy.

So I'd like now to hand over to the Chair of the Board.

The financial year 2024 and '25 has been defining for Ambu. We concluded our turnaround, and we took the first steps into a new strategic era with the launch of our ZOOM AHEAD strategy. With a strengthened financial foundation and a renewed strategic course, Ambu is now well prepared to create long-term value and take the lead in the global endoscopy market. For the second year in a row, Ambu delivered double-digit growth with organic growth of 13.1%, far above the average of the med tech sector. We have shown that we can scale in a dynamic market. We ensured a solid growth of 15.4% in our Endoscopy business and an extraordinarily high growth of 9.9% in the fields of Anesthesia & Patient Monitoring.

At the same time, our EBIT margin increased to 13%, a clear indicator of our ability to run a more efficient business all the while investing in future growth. Ambu is a growth company with a large potential. We provide efficient, advanced and economical solutions for a global endoscopy market characterized by an increasing number of patients and scarce resources. We are dedicated to shouldering that responsibility. As part of our focus on innovation and growth, we expanded our endoscopy portfolio last year in our 2 high-growth areas, airways and urinary tracts. In the field of airways, we launched our video laryngoscope for efficient intubation. And in the fields of urinary tract, we introduced our ureteroscope to the treatment of kidney stones. Both of these solutions strengthen Ambu's position in the endoscopy market and demonstrate our ambitions of setting the course in a market that is rapidly developing. We are satisfied with this year's results. The results have strengthened our position and our financial foundation.

Today, Ambu is in a strong position with no debt and with a solid liquidity of DKK 866 million and solid current free cash flows for the year of DKK 407 million. This enables us to invest into the future and continue to create value for our customers, our patients and our shareholders. In this financial year, we also concluded our 3-year turnaround. With the ZOOM IN strategy, we have revitalized Ambu as a company with solid profitable growth and even faster than planned. ZOOM IN was launched in November 2022 and has resulted in a number of significant steps forward, that everyone in and around Ambu can be proud of. We have launched no less than 7 endoscopy solutions across our business areas. And across our endoscopy portfolio, our solutions have been used in 62% more procedures a year compared to the starting year of the strategy. Not only have we achieved double-digit growth, we've also shown that Ambu is capable of making money as we have increased our EBIT margin from 2.7% to 13%.

We have reestablished our financial foundation and our operational strength. Our free cash flows have improved by more than DKK 860 million, and our absolute operating income has more than -- has been doubled by more than 5x. We have achieved a leading position within sustainability in the med tech industry. We launched a reuse program for endoscopes, our so-called Ambu Recircle Program. As the first companies in the business, we have also started to use bioplastics in our handles on our endoscopes. And thereby, we have shown that responsibility and innovation can go hand-in-hand. These initiatives strengthen our position globally and contribute to a more sustainable future. And this is all something our customers increasingly are appreciating. And in the middle of our turnaround, we have achieved to attract and retain more employees all the while strengthening our top management, which today consists of experienced profiles from the med tech industry. Only through a strong cooperation and a common focus on execution, have we been able to achieve these results.

Britt and the entire Ambu team have shown impressive dedication, which has been the foundation for our successful turnaround. With a strong financial platform and renewed strategic clarity, we are well equipped to create long-term value and take a leading role in the global endoscopy market. We have now started a new strategic era with our ZOOM AHEAD strategy. This updated strategy was presented by the management on our Capital Markets Day on the 1st of October, whereas ZOOM IN was a turnaround strategy. ZOOM AHEAD is focused on accelerated growth and market leadership. The shift away from reusable endoscope and towards single-use endoscopy is accelerating. And Ambu is at the forefront as market leader, driven by strong momentum in our Endoscopy business.

In a global health care sector that is under pressure, Ambu can use its trailblazing technological solutions to optimize busy workflows and ensure fast treatment of an increasing number of patients. We believe that single-use endoscopy will be the preferred approach. Our focus is simply to help hospitals and health care professionals treat more patients better and faster. And we will do that with our innovative and integrated solutions that are efficient, clinically advanced and economical. The potential is huge, and we are committed to leading that development.

However, our strong strategic basis and improved operations have not been reflected by the share price. In this financial year, we have seen a decrease in the share price, and the share has been characterized by high volatility, which is also seen generally in the med tech market. But let me emphasize that the Board and management are in this together to create long-term value for our shareholders. That is the core of the ZOOM AHEAD strategy. We made it clear at our Capital Markets Day that we are fully focused on delivering on our strategy. This includes our 2030 goal of 11% to 13% organic revenue growth and an EBIT margin of more than 20%.

It is still our clear position, and I'm convinced that our sharp focus will be reflected in the share price over time. The Board of Directors plays an important role in the strategic management of Ambu, not in the day-to-day operations where progress and results are driven by our management, but in ensuring that the overall course is the right one. As the Board of Directors, our primary task is to set the strategic course and to assist the management in ensuring continued success. We have a good and close cooperation, which is important to an ambitious growth agenda. We monitor the geopolitical development closely so that we are ready to adapt in order to maintain momentum and strong results.

I believe that the Board has the right competencies to support management in the execution of our strategy. The group has a broad composition and contributes with valuable perspectives and discussions across experiences, a broad exposure to med tech, gender and nationality. All of the AGM elected board members are up for reelection this year. And if the proposals are adopted, the Board will continue to consist of 6 AGM-elected members and 3 employee-elected members.

Ambu's employee-elected members, Gry Sahner Gundestrup, Jakob Koch and Jesper Bartroff Frederiksen were elected just 2 weeks ago. A warm congratulations to all 3 of them. In the Board, we look forward to benefiting from their experiences and dedication in a close and constructive cooperation. The drafting of the remuneration report is also an important task for the Board of Directors. This report is sent out to the shareholders along with the annual accounts and can always be found on our website. The Remuneration Committee is tasked with ensuring that the remuneration of the Board and management are in line with the goals of the business and the current remuneration policy. Furthermore, the committee works with developing a policy that can attract and retain the right competencies in the Board as well as in top management.

In the remuneration report, it is mentioned that the period on which the Board of -- the top management is measured in the long-term incentive program will be expanded from 1 to 3 financial years, starting from this financial year. This expansion will strengthen the focus of the top management on long-term value creation and thus, it supports our ZOOM AHEAD strategy. We believe that the remuneration report gives clear and transparent insights into remuneration and lives up to all guidelines. We also believe that the remuneration policy is matching the market standard and is competitive. As part of the annual report, the Board proposes to pay out a dividend to our shareholders for the second year in a row. I'm glad to be able to tell you this, and that underlines our continued progress. However, I would also like to underline that any payout of dividend should, at the same time, ensure that we still have an opportunity to invest in growth.

Our focus is to drive high growth and that requires a strong financial position of the annual profit of DKK 609 million. We propose a dividend of 18% of net profits. That means a payout of DKK 0.41 per share corresponding to DKK 110 million. Furthermore, after the AGM, Ambu will launch a share buyback program of DKK 150 million corresponding to 25% of profits. That means that we pay out a total of DKK 260 million, corresponding to 43% of annual profits. Thereby, we are surpassing our goal of distributing 30% of profits, and we demonstrate our focus on creating value for our shareholders. The remaining profit of DKK 349 million are transferred to the next financial year in order to underpin our continued value creation. With all of our achievements through the past 3 years and with our updated strategic course, we now have a crystal-clear focus to create high long-term growth and to fulfill Ambu's great potential in the global endoscopy market. The ZOOM AHEAD strategy sets a very clear course towards a global leading position.

In front of us, we have an attractive market that is developing rapidly, and we want to be the player to lead this development towards single-use endoscopy. We have proven that we have the innovation it takes to solve the biggest challenges in our health care systems. We have a clear ambition and focus, and we're in a strong position to win market shares and deliver double-digit growth and profitability towards 2030. On behalf of the Board, I would like to finish by extending a warm thank you to all of our employees for their great efforts in the past year, a special thank you to our shareholders for their continued support and confidence in our growth journey.

I will now pass the floor to Britt Meelby Jensen, Ambu's CEO, to give her report of the past year. Thank you.

Good afternoon. I've been looking forward to talking to you today about what has happened in the past year in Ambu and give you first glimpses of what is in store for us in the future. Let's summarize also what Jorgen talked about. We have delivered a total growth of just around 13%, and we focus on endoscopy. And there, we have achieved 15.4% in growth. So we still have a 13% earnings level. We have expanded the endoscopy portfolio in the past year. And on the 1st of October, we had a Capital Market Day, where we introduced a new strategy. I'll touch upon all these 4 topics in the course of my presentation. But first, let's have a look at the distribution of our turnover or revenues.

Our Endoscopy business is outgrowing our Anesthesia & Patient Monitoring areas. So today, 60% of revenue comes from endoscopy and 20% from anesthesia and 20% from patient monitoring. If we look at the geographical contributions, we have 50% of revenue in the business from North America and then 40% from Europe and 10% from the rest of the world. Last year, I could also tell you about progress as reported by Jorgen a while ago. And if we look at our ZOOM IN strategy, we have now had 2 years with very high growth, double digit. You can see here 13.8% and 13.1% growth. We have also had 2 years with solid double-digit growth in the EBIT margin, respectively 12% and 13%. And that too is something that is likely to grow in future. We've also had a positive development in the free cash flow so that we are now without debt and we still generate a positive cash flow.

So revenue and growth are vital for us. And that's why we are pleased to see when we compare ourselves with the benchmarks that we have a growth that is more than double what we see from other actors in the med tech global scene. Let's zoom on our markets. And before I do that, remind you on where we are actually active. We have the widest portfolio in the med tech business. So today, we cover everything from ear, nose, throat to the respiratory tract, where it all began to the gastroenterology area and then to urology. If we look at the markets and what we think about growth in the market towards 2030, there's no doubt that there will be continued growth upwards of 20% in our estimate year in, year out. And it is contributed by 2 factors.

First of all, general market growth for total procedures around 5%, driven by the aging population, by more chronic diseases and also an increase in practically all countries worldwide in what we call minimal invasive procedures, which is surgery where you do not use a pervasive procedure. Growth around 15% in relation to existing new solutions that comes from doctors using aScope procedures instead, primarily solutions that we already have in the market, but also with a lot of innovative products, new solutions that we will be launching as we move forward. So on the whole, that contributes more than 20% annually. And in addition to that, we also try as Ambu to find out whether there's anything in the environment that we can also work with using our new solutions.

What does that mean to the total market, this development? Well, look at this slide and look on what it says on the right-hand side. If we have a fully converted endoscopy market, it corresponds to about DKK 190 billion. Below that, you see that the market has only been penetrated to the tune of 3% to 4%. So the large majority of procedures done today involve the use of reusable aScopeprocedures or instruments. The highest penetration is in relation to the respiratory tract, and that was where we were the first movers in -- at the turn of this century and where we started using these penetration procedures. So we have driven the development in that area. And that also applies to the urology segment where we were the first to introduce an instrument that can be used in relation to bladder cancer. We were also the first to launch endoscope for the ear and throat area and by far, the largest market is in relation to gastroenterology where we changed our approach a couple of years ago. So on the whole, we see a huge potential. And to go back to our thoughts in relation to why we still believe that this penetration can -- will grow.

Well, as I said, we were the first movers in relation to 3 aScope procedures, the bronchoscope in 2009, penetration now is about 25%. This is an example from the U.S., and it differs greatly from one market to the next. In relation to ear, nose, throat, we have an endoscope that was launched in 2018, penetration in the U.S. is about 5%. And in relation to urology with the cystoscope, the penetration in the U.S. is around 10%. What's interesting is that this spring, we asked both customers and other doctors in the areas how many of the procedures that would accommodate a single-use instrument and the level was 70%. So there's still a wide difference between the current use and the potential that has been identified by doctors. Single-use endoscopes is something that doctors want to use in the future. And what drives their demand for single-use instruments is -- well, there are many, but one factor is efficiency in the health care system.

If they can eliminate procedures such as the cleaning of instruments and never running out of scopes because they are all sent for cleaning, then it means that they can actually treat double the number of patients because they can use single-use instruments. There are also financial benefits and then the sustainability aspect, but I'll come back to later because although it may be counterintuitive is actually more sustainable to use a single-use endoscopy also in view of the chemicals and other factors that are involved in the cleaning of the instruments. So after the progress achieved in recent years, we took a step back and thought, well, we need to change gears here and take a look at growth. And that's also why, on the 1st of October, we launched our ZOOM AHEAD strategy, which is focused on growth and deals with how we can become leaders in endoscopy in future. Our strategy has 2 focus areas: one -- oops, I don't know what happened there. I'm not done. Our strategy has 2 focuses -- what's going on, yes, the technology can be tricky. [Technical Difficulty]

Well, we did it. We have 2 aspects in ZOOM AHEAD. The strategic thing in relation to where we have been. And then the themes -- the strategic themes that we wish to add in order to fulfill the strategy. Let's take a look at where we need to focus to win. The 2 areas most in focus and the biggest one in our Endoscopy business, that's respiratory and urology. We have a good business in ear, nose, throat, and we will continue there focusing. And there's no doubt that when we look at the potential in relation to gastroenterology and the tradition we have created up until now, there is a huge potential for us in Ambu, also help transform that area because the challenges are the same as we see in all the areas. We have experience. We have had a lot of learning, and that is what we can tap into in the long run. We also still focus on Anesthesia & Patient Monitoring. And when we talk aScope procedures, it's all tied together by means of EndoIntelligence which is software.

Why is it so important? Well, we're the only company -- well, we have the widest portfolio. But we're also the only business with a software platform that spans or straddles the whole gamut of services that we can offer. So in future, we will focus even more on systems and software. There are 3 things that are in focus there. One has to do with how -- yes, thanks. I need some water, thank you very much. One is about what happens in relation to the monitors. And the other thing is the software where we are already leaders and where we can also integrate with hospitals, and then we have a number of projects up and running now where we use AI to give our doctors even better solutions. We will help not only prepare them better for procedures, but we will also help them perform their jobs better during the procedures, for instance, by increasing the likelihood and the ease with which they can find the polyps when they do scans for cancer and also procedures where a lots of documentations that doctors need to do in the course of an endoscopy procedures.

We have launched a number of solutions in this respect. And we have new focus areas, such as urology, where we now have introduced an instrument that can remove kidney stones, and then we have a new instrument for intubation in a number of settings. It was launched early this year. And this week, we introduced a mobile laryngoscope which is mobile. So it is far more easy to carry it on board ambulances and carried around for doctors. So our business with regard to respiratory tract, we now have created a wide portfolio with products that support one another. You see here the endoscopes. We had 2 generations that fit to different needs, and they both come in different sizes for different needs. We have the video laryngoscope. We have also all the technology in relation to the monitors that we provide the market with.

So we have a very wide portfolio that can help remove problems with procedures. It's a strong part of Ambu, and we will focus on becoming even better. The next generation of bronchoscopes is in the pipeline. We have intelligent patient monitoring involving AI in the pipeline, and we have a number of other solutions that will be launched eventually so that we can help doctors meet a number of different challenges. Also, I have a comment with regard to the strategic themes. We have 4 different themes in the strategy. The first is how we give service to our customers. We have a lot of focus here on making sure that they can provide effective and efficient treatment with a successful outcome for patients. for instance, how they can work in a sustainable manner. I'll come back to this.

Innovation with strong -- is also an area with a strong focus. We have a lot of interesting things in the pipeline. We have attracted new competencies to our R&D department also in relation to software and AI that is becoming increasingly important. We have growing focus on partnerships in order to continue finding out what we can do ourselves and what we need partners for. And we also want to have a scalable platform, a scalable business that allows us to invest more and get more result out of our investments.

And then we have a lot of focus on our employees and our culture because if we have a strong culture, then we also have pleased employees and better cooperation and hence, better results. Customers and that set up, just to repeat where we are present. More than half of our turnover or just about is in North America, but we are active in the blue areas that you see here. We have 3 major R&D centers. One is -- R&D center is in Denmark, one in Germany, one in Malaysia, and we cooperate with doctors across the globe and also innovation is in 4 different areas that I'll come back to. Innovation, well, the company was founded in 1937, and we have had a lot of focus on understanding customers in order to be able to present it with new and trailblazing innovation.

We are proud this year to be able to celebrate both the 70-year anniversary for our Ambu Bag and the ventilator that was introduced in the last century is still a strong product. And when we visit hospitals, it is still referred to, as I said, the Ambu Bag. 50 years ago, we invented the BlueSensor, which is used for patient monitoring in the cardiovascular area. And in 2009, approximately 15 years ago, we were the first to launch single-use endoscope. So we have been trailblazing in a number of focus areas throughout our history.

I referred briefly to production. Let us just take a glance at our manufacturing footprint, where do we have production plants. We have 4 of them all over the globe, in China, in Malaysia, in the U.S. And we opened 3 years ago, a production plant in Mexico. There's lots of free capacity there, and we can send in a more uncomplicated manner to the U.S. from there. And we also have production in the U.S. so we can service customers in the U.S., and we can be more flexible in relation to the geopolitical challenges and tariffs that are debated so hotly these days. We also have flexibility because the world has become less safe and reliable. So we need to use the production plants we have and ensure that we also have excess capacity so that we can very quickly follow developments outside.

Very briefly about our sustainability, Jorgen touched upon this. We were the first business to deliver medical equipment to find out that we could use bioplastics. This has been implemented about 12 months ago in all our endoscopes. They are all of bioplastics now, and we've also rolled this out to other of our product lines. We also focus on the Recircle Program that we have invented. We have now been able to deal with some of the regulatory barriers that existed so we can now offer it both in the U.S. and U.K. and France and Germany. And next year, we will be moving into other markets. And this is something that our customers really like.

And there's also a wide recognition among our users and customers, and there's a growing understanding that it's, in fact, more sustainable to use single-use equipment instead of -- well, several -- equipments that can be used on several occasions. We see that an increasing number of data that supports our optimistic view of this trend. What then does it take by ways of financial results? We have changed our guidance. We now expect over the next 5 years to see an annual growth of between 11% to 13%, primarily driven by our Endoscopy business. What does it mean? Well, we will see a gradual growth in the business accounted for by our Endoscopy business. And here, you see what we expect in EBIT margin, plus 20% in 5 years. And this year, we have a guidance saying 12% to 14%, and that includes some customs costs that occurred earlier this year and are being phased out over the year.

So we are ready to deliver. We are in very attractive markets. There are not that many markets in our scene that can really deliver the same growth prospects and potential. We still invest a lot in innovation with a lot of focus on what it is we help our customers with. We also have a platform that we are trying to make more scalable and where we can make full use of our global setup. And we consider this to be the right path to growth. This cannot be done, of course, without our competent and committed employees. So I wish to explain that we have an extremely strong team of 5,000-plus employees. Here, you see my good colleagues in the management team. We have a lot of competencies and experience gleaned from all parts of our industry. And here, you see, well, pictures of all of them. Scott, as you -- who you see on the right-hand side is Head of our American business.

And now over to our Chair of the meeting.

Thank you for the management report. Thank you for presenting the annual report and the remuneration report for the financial year 2024 to '25. Before opening the debate, I can inform you that the annual report has been signed by the Board and the management and that it has been audited by the company auditor with no remarks or so-called unqualified auditor's report, which can be seen on Page 190 in the annual report. And as we've just heard, the Board proposes to pay out a dividend of DKK 0.41 per share for the financial year which amounts to a total dividend of DKK 110 million. The Board proposes that the remaining parts of the annual profit is transferred to next financial year. I will now open for the debate for shareholders participating in person, but also for the shareholders who are participating online. And I have been told that 78 are participating on the webcast via the website and via the investor portal, and we will take them into consideration as well. That means that 121 participants, as I mentioned before, was a bit too much because 63 are actually here in person.

And with that, I already have 2 speakers on the list and the first speaker is Claus Berner Møller from ATP. And I give Claus Berner Møller the floor. Go ahead.

Thank you for the floor. My name is Claus Berner Møller. I represent ATP, the pension fund. Thank you for the report and the review of the annual accounts. Looking back 3 years to 2021 to '22, where Ambu saw organic growth of 4% and an EBIT margin of minus 0.6% after extraordinary costs, we must say that today we are in a very different place. Ambu delivered an organic top line growth of 13% and an EBIT margin of 13% in this financial year. This was the conclusion of the 3-year strategy called ZOOM IN. This strategy period has therefore been quite successful, and the company is in a stronger position today.

On the 1st of October, this year, many shareholders were invited to the Capital Markets Day at Ambu. Here, management presented the new strategy ZOOM AHEAD where the long-term goals were presented. The goals are top line growth of 11% to 13% on average until 2029 to 2030 and an EBIT margin of above 20% in 2030. It would be very impressive if you achieve these ambitious goals. The share price did increase after this successful Capital Markets Day. But with a disappointing Q4 account on the 4th of December with the guidance for next year below expectations, we saw the share price fall to where it was before the Capital Markets Day. That was a shame because you could have mitigated that effect. If you had explained ahead of the Capital Markets Day that tariffs would cause 2 percentage point on the margin in 2025 to '26.

However, this does not change the fact that I believe that Ambu is in a good position with many new and interesting products in a high-growth market and with a much broader management group than what we have seen before. You have established a good foundation. On the other hand, I do have some concerns. The Chairman of the Board, Jorgen Jensen, holds 6 chairmanships of Danish boards and 2 memberships of other boards. Most of these posts are in large companies. That is quite a large portfolio of Board posts and chairmanships, in particular, hold a great burden of work. I'm sure that Jorgen would not have accepted all of these posts if he didn't believe that he could take care of them appropriately. But if several companies are thrown into crisis as we saw it under the financial crisis, for instance, then it would be difficult for him to keep down all of these jobs with 6 chairmanships.

You do risk a situation where several companies need your attention at the same time in times of crisis. And here, it would be difficult for Mr. Jensen to put in the necessary amount of hours. I would therefore encourage our Chairman to cut back on the number of Board memberships and in particular, on chairmanships so that he would have more time to be there for his companies at times of crisis should they occur. ATP encourages a dialogue on this matter. Finally, I would like to wish the management and employees of Ambu the best of luck for the coming year.

Thank you to ATP and Mr. Claus Berner Møller, and I will give the floor to the Chairman of the Board.

I'm always happy when I hear praise from our large shareholders, particularly when it comes to the growth and the focus on growth we have in Ambu. We have taken Ambu through a turnaround. And for the second year in a row, we have delivered significant growth as we mentioned in our report. Therefore, I'm also happy when our investors take note of the fact that we have been significantly increasing our earnings. And I completely agree with ATP that the strategy that we have now concluded has been very successful indeed. And that we, with our new strategy, have laid down the rails for a good and strong future. We have a good point of departure to ensure continued growth in Ambu, and I look forward to working along those lines.

Finally, it is true that I hold several chairmanships and posts on a number of boards. It is not unusual for experienced business people to have several posts in different companies that gives us a better insight into best practices. Ambu is the only listed company that I serve as Chairman for, and there's a big difference in the tasks resting on the Board, be it private holding companies or listed companies. I take care of all of my chairmanships with the necessary due diligence and time, and I'm completely confident that I can maintain all of them also at times of crisis. The Board and the main investors in Ambu as well as in the other companies that I'm a member of the Board in, they have shown me that confidence, too.

Thank you very much. And I encourage everyone who wants to take the floor to make themselves known. The next speaker is Anders Nørskov from the Danish Association of Shareholders.

I am Anders Nørskov, and I give this presentation as a representative of the Danish Association of Shareholders. We look after the interests in Denmark of private investors. I have 2 questions for the management. First of all, once again, I'd like to congratulate you on a fine result. I know that the share price is about 30% lower than last year. But as I did last year, I'd like to encourage management not to be controlled by the capricious thoughts of the members of the stock exchange, but do, as you always do, and be led by the strategy. When Britt Meelby was appointed CEO, she initiated the transformation of Ambu with the strategy ZOOM IN. This process has now been completed, and a new strategy, ZOOM AHEAD, has been developed. The purpose of ZOOM AHEAD is to change gears from being just a supplier of products to becoming a full-scale hospital partner in 2030.

That is very ambitious. ZOOM AHEAD involves high goals with regard to growth, and it's becoming increasingly clear that the business here consists of 2 very dissimilar elements. Endoscopy with high growth and Anesthesia & Patient Monitoring with low growth, you cannot help thinking how long will they remain under the same roof. Innovation is highly visible, and Ambu has launched a number of remarkable product novelties, which bind together the different product units even better. And here, EndoIntelligence is a very important player. The same applies to the new market area, kidney stones with a market potential of DKK 15 billion. The reuse of resources is another high priority in relation to innovation. And as the first med tech business in the world, Ambu has launched a recycling program called Ambu Recircle Program where used endoscopes are collected with the possibility of reuse outside the medical sphere, that gives lower CO2 consumption and reduces waste quantities.

The EBIT margin declined, but before special items, it rose 22% to DKK 784 million. Next year, you expect a negative effect because of the customs tariffs about 2% and earnings despite all this is likely or expected to grow to 16%. I would remind you, as others have said, that it was 2.7% in the first year Britt Meelby was with us, special -- EBIT before special items will increase 22% to DKK 784 million. And in Britt's first presentation of financial result, it was minus [ 7. ] And this figure has even been negatively or adversely affected by strategic investments and a headwind from the currency I wonder how high would have gone if we haven't had -- hadn't had this. So debt is negative, which means there is no debt. It grew from DKK 57 million to over DKK 300 million. Cash flow is positive with a considerable 3-digit amount in millions and earnings per share has grown by as much as 160% to DKK 2.29. PE is high, 41, but down from 149 last year. So that's fine. And dividend goes down from 43% to now 18% but will be supplemented by a share buyback.

We like you a lot, Britt. You're not only a very nice person, but you also deliver good results. So the shareholders here like you, and you talked about the share buyback and then also the possibility of making acquisitions. Well, my questions. When ZOOM IN was introduced, Britt Meelby showed us slides with an estimated market of 100 million procedures per year. Today, you're talking about a potential market of 190 million procedures, almost doubling. Where does this growth come from? And a down to earth question, how about profitability?

My second question. It's good to see that Ambu is an active and proactive participant in processes to reduce CO2 consumption and resource consumption, in particular, if the customers like it. Last year, I found in my presentation that the newly elected President Trump had made statements that gave cause for expectations of major changes in the U.S. relationship to its surrounding world, both when it comes to geopolitics and customs tariffs. Unfortunately, all this came true. Now it's only natural to ask how do you see the demand for Ambu's Recircle Program and its future in the U.S. market, which is Ambu's biggest market. To round off, I wish you good luck with all your new initiatives and products. And I also wish you good luck, all those of you in Ambu with a new fiscal year. And not least, good luck to you, Britt Meelby with your new position on the Board of Novo Nordisk. So lots of good wishes from my association.

Thank you very much to Anders Nørskov from the Danish Association of Private Shareholders. Britt, you have the floor for a reply.

Thank you very much, Anders, for the kind words and also for your very good comments to our consolidated accounts. I'll consolidate your 2 questions. The market size. It's a very good observation you've made to look back at the way we calculate the size of the market. To the best of our ability, we try to work with the data that we can get hold of. A couple of years ago, when we talked about the ZOOM IN strategy, we saw when looking at the world, 200 million procedures per year was what took place. And we had 100 million in our market. And now if we look at the individual segments, and each endoscope has a different value. So it may be a bit difficult about this calculation, we've tried to be very transparent. But we now have more market data at our disposal and the things are much more clearer now than they were 3 years ago.

3 years ago, we said 200 million procedures globally. We focus on the 100 of those. So we think that 150 is likely to be our focus. And now you saw the amount, DKK 190 million. But the question is where to make the money that we need for this. If we look at the total Endoscopy business, this is where the money will come from. We will not state publicly our earnings from the different segments. But growth is so important for us, and that is why we always check where to get the best models also with investments in commercial production and making sure that we have the right earnings in the individual areas. I can't really go into more detail about the money thing, but it is not only an attractive market in relation to procedures, but also earnings.

The second question you asked about sustainability and the Recircle Program that we have launched. We decided to launch it in 4 countries. And from that decision was made and until all the regulatory barriers, that unfortunately still exists had been dealt with, trump had taken over. We decided to go for the U.S. launch because it's our biggest market. And we also feel responsible for contributing to the green agenda over there. But with the rollout that we have had in the U.S. specifically, we can see that customers like the concept a great deal. I go to the U.S. on a regular basis and visit customers most recently a couple of weeks ago when they actually welcome and talk a lot about sustainability efforts, not just our program, but also the initiatives that we are coming with later. And they really want to do studies also with us over there about the impact of this. So there are very different interest at play in the U.S., but we will still go ahead full speed with our Recircle Program.

As long as we can make a difference for one customer globally, then it makes sense for us to go ahead with it. So we like that we saw the customers give a good reception to our program here.

Thank you to Britt Meelby Jensen. Does anyone else wish to take the floor? Yes, Mr. [ Kjeld Bøjer ].

As mentioned, my name is Kjeld Bøjer. I have a website with the same name. I would like to thank you for your very good report and for giving it in Danish because had it been in English, I wouldn't have understood a thing. I'm sure there are so many complicated words in what you do. So I hope you will continue to speak Danish, if you want to maintain your Danish shareholders. Otherwise, Ambu will fall to foreign hands, and I don't see any benefit coming from that. If I send something to a member of Parliament that I've found in English about the U.S. because the Danish press doesn't really cover America, then the media coverage is completely controlled by CNN.

But if you look to other channels from the U.S., you will find out that the world is very different from what we are told here in Denmark. And once what Trump is doing will have its effects, then you will be caught off guard if you're not informed but that was just a side matter. But to me, it's very essential that you speak Danish. A few years ago, more than 50% of Danish shares were owned by Danes, and now it's less than 50%. And foreign investors don't give a damn about the Danes. So it's like the companies can't resist and not even our government is with us because the government -- our government should do like other governments and say, "You're a Danish government, you're a Danish company, you must report in Danish and you must have AGMs in Danish." But where is the government in all this? They are controlled by the World Economic Forum. They have a very different agenda.

So you shouldn't be upset that the share price is a bit low because it should be -- it could be overrated and it was [ 240 ] at one point, and I think it was 20% of the book value and 20% of the book value is not a lot because you really need to make a lot of money in order to really honor that evaluation. And now the share price has reached a more realistic level, I would say. It's still a bit over the book value, but not 20% above. And that's the way it is with share prices. They can be hyped up by all sorts of different and too eager information, I might say, from certain sources, none mentioned. But as I said, I think the share price has reached a more realistic level. And I'm glad that you are not buying more treasury shares than what you are doing because that affects the share price. We saw that in Novo Nordisk, where they bought too many treasury shares so that the share capital would have been spent over a course of 10 years. And I pointed out that fact on an AGM, and they stopped buying treasury shares.

And then they reached a more stable level in their share price. So it's a dangerous instrument, buying your own treasury shares. And it's okay to buy a bit of treasury shares, but be careful, you should rather pay out the money in dividends. That will be better. And sometimes, I suspect that the CEO has a good share option, and then he wants to buy his own shares because then they increase in value, but it will be to the detriment of us ordinary investors. So therefore, we do not like it. Right. I hope that you will, in future, also prepare the annual report in Danish so that we can follow what is going on. Well, there's too little light up here. I can't read my notes, but good luck with the coming year. I thought you said something about some more news, but perhaps that was not the case, but good luck in the future.

Thank you very much. And we heard a number of comments and remarks here about holding the AGM in Danish in the future or in English. And I refer to Item 11 on the agenda where we're going to -- Item 10.1 on the agenda, where we can speak more about that matter. Does anyone else wish to speak on Item 1 to 4. That does not seem to be the case, and we do not have any shareholders online who wish to take the floor. I can therefore close the debate on Item 1 to 4. I can, therefore, conclude that the AGM has taken note of the annual report, has approved the annual report and the remuneration report for '24 to '25 and approved the appropriation of profits as proposed by the Board. I will take that to the minutes and that concludes Item 1 to 4.

That leads me to Item 5, which is about the remuneration for the Board for the current financial year. It is proposed that the fee remains unchanged vis-a-vis the last financial year, and it is the following: there will be a basic remuneration for Board members of DKK 400,000. The Chair of the Board receives 3x the basic remuneration, that is DKK 1.2 million. The Vice Chair receives twice the basic remuneration that is DKK 800,000 and then the individual committee seats will receive DKK 132,000 per committee seat, whereas the Chair of a Board Committee will receive a remuneration of DKK 200,000 per chairmanship. Does anyone wish to take the floor on that item? I can tell you that it requires an ordinary majority, it seems that no one wants to take the floor. So I hope I have the General Meeting support in concluding that the proposal has been adopted.

Items 6 to 9 are different proposals in relation to elections. The first item is 6. Here, we have election of Chair of the Board of Directors and the Board of Directors proposes the reelection of Jorgen Jensen as Chair of the Board. I refer you to Annex 1 in the convening notice, where you can find information about the management positions held by Jorgen Jensen. Any comments on this? That doesn't seem the case. Well, if there's only one candidate according to Danish law, then the one candidate for this position has been reelected. Well, welcome and congratulations.

Then we have Item 7, election of Vice Chair of the Board of Directors and the Board of Directors proposes the reelection of Shacey Petrovic as Vice Chair of the Board. Again, I would refer you to the convening notice Annex 1 where you find information about other managerial positions. Shacey Petrovic has been reelected. Congratulations.

Item 8 on the agenda, election of other members of the Board of Directors. The Board of Directors proposes the reelection of the existing Board members or the other ones, Susanne Larsson, Michael Del Prado, Simon Hesse Hoffmann and David Hale. And I again, I would refer you to the other managerial positions held by these candidates and you find it at Annex 1 of the convening notice. Any other candidates or nominees? That doesn't seem to be the case. Well, this means that all the candidates have been reelected for a 1-year period. Congratulations and good luck. So the Board now consists of the following members elected by the AGM. Jorgen Jensen is the Chair, Shacey Petrovic is Vice Chair, Susanne Larsson, Michael Del Prado, Simon Hesse Hoffmann and David Hale.

And I can also inform you that we have recently had employee member elections and the following employees were elected for a 4-year period, Gry Sahner Gundestrup, Jakob Koch and Jesper Bartroff Frederiksen. There are also alternates available for the 3 employee-elected members. They are Pernille Bartholdy, Jesper Domino Rask and Thomas Lykke Henriksen.

Right. This brings us to Item 9 on the agenda, the election of auditor and the Board of Directors proposes the reelection of Ernst & Young Godkendt Revisionspartnerselskab as external auditor, and this applies to statutory financial reporting and assurance engagement relating to sustainability reporting. The audit committee's recommendation has -- is behind this and has not been influenced by third parties and not been subject to any agreement with a third party restricting the general meeting's election of certain auditors or audit firm. Are there any other candidates? That is not the case. Ernst & Young has been reelected. Well, the full name is Ernst & Young Godkendt Revisionspartnerselskab.

Next item is a proposal from the Board of Directors. The first and only proposal has to do with holding general meetings in English. The Board of Directors proposes an amendment to Article 24 of the company's articles so that it runs as follows: the corporate language is English, company announcements and annual reports and documents prepared for internal use by the general meeting in connection with or after the general meeting shall be in English. That's the previous wording. And now a new sentence is added. The general meeting can be held in Danish or English pursuant to the Board of Directors' decision. This is an amendment that only relates to the last sentence in that piece of text because we already have met the -- what is stated in the first sentence, 2/3 of the votes cast are required in order for this to be carried. I would like to hear whether there are any requests for the floor. Kjeld Bøjer has asked for the floor. I think you touched upon it already when you took the floor a while ago. You don't have to repeat everything you said.

Well, I'm very much against this. We would miss a lot of information if it were in English, and I'm sure the foreign investors would be happy and the Danish investors would lose money on this. So I do not believe that you as a good Danish company should even think about such a thing. To make use of a right that you would then have because, of course, foreign shareholders would agree to this, but Danish shareholders would be in the minority again, so we're just overruled again and again. So don't do this, you're a Danish company, and you should continue to be a Danish company with capital D.

Thank you very much to Kjeld Bøjer. And I can inform you that this is an authorization to hold AGMs in Danish or English. So it's not a given that the AGM would be in English next year. It can be decided from year to year by the Board of Directors.

Before the AGM, I could conclude what we had of proxies and personal votes. And I could see that there was an overwhelming majority voting in favor of this proposal. More than the 2/3 required of the votes cast as well as the share capital. And therefore, I can see no objections, and I can only conclude that this has been adopted, but I can see that Mr. Anders Nørskov wants to take the floor before I finish concluding.

In the Association of Danish Shareholders, we have many members who are above the age of 60. And not everyone has the linguistic competencies that it would take. And therefore, of course, we're not fighting against windmills here or already given majorities, but we just encourage you that if you should choose to hold AGMs in English, please do provide interpretation or make sure in one way or the other that Danish shareholders can also follow the proceedings.

And as I almost concluded, this proposal holds a great majority from the votes already cast, and I believe that the shareholders -- most of the shareholders in the room also support the proposal. And therefore, I can conclude that the proposal has been adopted by the necessary majority. And I can assure you that the comments and remarks that we have heard in this connection will be inserted into the minutes and will be taken into account in future.

This leads me to Item 11 on the agenda, which is an authorization to the Chair of the meeting. Here, it is proposed that the Chair of the meeting, that is me with full right of substitution, be authorized to apply for the registration of the resolutions passed and to make any such amendments thereto as the Danish Business Authority may require or request as a condition for registration or approval as well as to continuously make and apply for registration of linguistic and other non-substantive adjustments to the company's Articles of Association. Does anyone wish to take the floor under this very interesting item? Mr. Kjeld Bøjer. Go ahead.

Well, there are no other items on the agenda, I can tell you that. Someone does want to take the floor? No, we're not under any other business yet.

I just have one thing. I didn't take the floor earlier. But if this is to be approved by the Danish business agency, I don't really understand about the terminology here because you have used 2 different terms to designate the Chair of the meeting which was -- previously it was Chairman. And now we also want to be able to refer to women, but you have also chosen leader, the leader of the Board, you need to make up your minds.

Well, there is a legal angle to this. I just want to clarify. According to the law, it's called Chairman. And it's okay to use that denomination or that description or word. Anyone else? Kjeld Bøjer has asked for the floor.

This is not any other business. This is about the authority.

Is this about the authority?

To the Chair of the meeting. This is -- has to do with the buying of treasury shares. What authority is used?

I think we should just deal with this item first, and then we will deal with any other business after this. So now we have completed Item 11, and now it's 12, any other business. Thank you.

Buying treasury shares is interesting because here, it is possible to juggle with the business by members of Board and management. I suggest that in the 5-year review, you always indicate how much you have in your portfolio of treasury shares. How many shares have you got? And what did you pay for them? Because it depends on the book value, and it's important for the rest of us to be able to monitor what is actually going on. Buying your own shares, treasury shares. Well, it's a way of writing down the equity capital immediately with the value you have paid for what you bought of treasury shares. So DKK 100 million from -- in price for the treasury sales will mean a write down of equity of DKK 100 million.

So we want to be able to see precisely what you do with the treasury shares. What will you use them for to sell them again or to write down your equity? And in accounts that have to be approved by shareholders, you also need to explain in detail what the nominal share capital that is held by shareholders is in size so that we can always check the book value by making our own calculations and get a good idea of the company. And you know the problem with the share price that it can actually be too high. And a couple of years ago, you had a high share price and there were people who bought this, and unfortunately, they lost an awful lot of money. So if shareholders get access to all this information, they can make their own calculations.

Thank you, Mr. Bøjer. Legally, if you do a purchase of treasury shares, you have to do this in accordance with a specific procedure, just for your information. Any other contributions under any other business, that is not the case. With these words, I find that we have exhausted the agenda. And this leaves me with one job, namely to say thank you for good order, and I am now finishing my job as Chairman of the Meeting, and I will hand over to the Chair of the Board.

Niels, thank you for those final remarks. And the last comment from me today should be a warm thank you, first and foremost, to the employees of Ambu. Your dedication, competence and will to lead is what makes Ambu an innovative and globally leading med tech company. Without you, no progress and no results. Of course, also, a warm thank you to Britt Meelby Jensen and the entire management team. You have successfully navigated market and turmoil and you have delivered results. Now the direction and the ambition has been set for the next phase toward accelerated profitable growth and the ambition of contributing to a more efficient health care sector. Thank you to my colleagues on the Board for the continued strong cooperation.

We stand side-by-side with the management of Ambu on this ambitious growth journey. And not least, thank you to our shareholders, you who are here today and those of you following us online, your continued trust is the basis for us to invest in innovation and create long-term value. And finally, thank you to Niels Kornerup for again this year, having navigated us safely through the Annual General Meeting. We have big ambitions, and we have the strength to fulfill these ambitions. I hope to see all of you next year with even more strong results to celebrate. Thank you.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

Hello, everyone, and welcome to this conference call presenting our Q4 and full year results from 2024, '25 for Ambu. My name is Britt Meelby Jensen. I'm the CEO of Ambu. And with me today, I have Henrik Skak Bender, our Chief Financial Officer. So let's get going.

So we'll start with the highlights from the year that we just exited. And overall, we delivered a very strong organic revenue growth of 13.1% and if we look at our endoscopy business, that grew for the year, 15.4%. This underscores the continued momentum and potential of moving patients from using reusable endoscopes to single-use endoscopes.

If we look at our margins, we delivered a margin of 13.0% for the year, and this is impacted positively by our operational leverage where we continue to drive scale and be more efficient.

And then on the other side, we also -- given we are a growth company as the most important, we are, as we have previously communicated, continuing to invest in commercial resources and scale in order to continue to deliver that growth.

At the same time, we had 2 external factors, and Henrik will come back to that in terms of FX and tariffs that had a negative impact on the results.

What we also launched in this quarter was October 1, where we held our Capital Markets Day. We launched our next-era strategy, a strong testament to the progress we have made over the last couple of years, and I'll come back to talk a bit about that as well.

In connection with this, we both extended, and we increased our long-term guidance towards '29, '30 and what we are delivering also that Henrik will present for our short-term guidance is in line with these ambitions.

So if we dive into the specific results for the year, starting with the overview here, the 13.1% organic revenue growth for the quarter Q4, we delivered 10% and if we take a step back, this is well in line with what we said a year ago when we were up here that we were expecting to have higher growth in the first half of the year than the second half of the year, which is also what we have delivered.

If we look at the split, and I'm going to comment on this shortly, we had almost 10% growth in anesthesia and patient monitoring 9.9% and then the 15.4% in our endoscopy solution business.

Both of these being lower in Q4 compared to the full year, again, as expected. Then our EBIT margin before special items landed at 13.0%, and we ended up with a cash flow of DKK 407 million positive for the year.

Let's look at the endoscopy solutions revenue, starting with the respiratory organic revenue growth where we saw, as we have also communicated throughout the quarter, a solid double-digit growth in this segment of 11.4% and then slightly lower 8.8% for Q4.

Again, this is as expected, and it's related to the timing of order in particular, in the rest of world, and nothing that we expect is going to continue where if we look ahead for this segment, we believe that the coming years will be continuing to be solid double-digit growth in this segment, very much driven by the breadth that we have in our endoscopy solutions.

And what has been driving the growth this year has very much been our bronchoscopy solutions, and that is continuing to drive our revenue growth in the coming period together with also starting to see increasing revenue from our newly launched video laryngoscope solution SureSight.

If we then look at the rest of our portfolio, and this is the segments that we refer to as urology, ENT and GI. Here we also had a higher organic revenue for the year of almost 20%, 19.6%. And then in the quarter, slightly softer.

And although we normally do not comment on these different areas, and this is very different therapy areas that we are covering in this group. I think it's fair to also explain a little bit this quarter to say that in Q4, in particular, we saw a significantly lower growth in ENT than we saw in urology and GI.

Let me come back to that because this is well in line with our strategy of key focus on urology and respiratory as our 2 key segments. If we look at urology specific, we have now not only our aScope 4 Cysto, but we also have our aScope 5 Cysto.

We have our aScope Uretero, which -- the 2 latter are contributing still with a fairly limited part of the overall urology revenue, but that is something that when we look ahead, we expect to continue to see good momentum on our aScope 4 Cysto but where we also would gradually see these solutions driving an increasing share of growth.

And I think it's important here to pause and take a step back and say, if we look at the overall momentum that we see when we launch new solutions in the market and when we take a couple of years back, looking at our aScope 5 Broncho.

It's very clear that it takes some quarters at the launch curve, and we have talked about this a number of times, is not steep as you will see in other areas, but it's relatively more flat, but then it will also continue to grow quarter-over-quarter for many years.

As we have shown that we see still the primarily primary driver of the overall revenue in endoscopy is coming from solutions that have been on the market for quite some years.

So this also makes us comfortable when we look at this segment that there's good momentum as we move into this year and the coming years in terms of generating growth in this specific business area.

If we then look at anesthesia and patient monitoring, 9.9% for the full year. There's no doubt that this has been an extraordinary year. The revenue growth has been driven by price increases, which was also, as we had communicated, leading to a couple of quarters of very high growth.

And then the growth in our last quarter of 6.4% reflects the good balance of where we actually see a lot of growth coming from volume growth and also some growth still coming from price increases. This is purely driven by the fact that we have growth in the market and that we are able to deliver on the demand from our customers.

We have not launched any new solutions in this area. We have not added commercial resources. So it's basically our existing people driving the growth and also fueled by very strong customer loyalty and the acceptance and appreciation of our solutions.

If we then take a look at our -- if we then take a look at our strategy and what we launched because a month ago, we launched a very strong ambition when we look ahead to achieve global endoscopy leadership.

So this is basically on the back of a couple of very successful years with our ZOOM IN strategy where we were successful at a fairly high pace of doing the turnaround of Ambu and then looking ahead as a strong growth company based on the solutions, the market potential, we feel very comfortable of having an ambition of global endoscopy leadership, building on the momentum that we see in the market and acceptance of single-use endoscopy solutions.

So our strategy includes some strategic choices that we have made and also a couple of strategic things. And then -- and let me briefly do a recap of those starting with the strategic choices.

What we communicated in relation to our strategy is that there are 2 key areas that are our primary focus areas as we look ahead. And this is our respiratory business formerly known as pulmonology, but now also expanded as we also had strong airways management solutions, and then we have urology.

Then when we look at our ENT, we still see some strong potential to continue to grow in ENT, although our portfolio is slimmer in this area, we are investing in new innovation to also meet a growing need for single-use endoscopy in this area.

Then when we look at GI, we have a long-term ambition of unlocking gastroenterology, which is a very realistic ambition as we see it because there are some of the same dynamics and the same needs in this segment as we see in other segments, but we also acknowledge that this is something that will take time. And we are investing more limited right now, in particular, when it comes to the commercial side.

But we do believe that we are the ones that will eventually lead the transition to single use in this segment. All of this is then combined in our EndoIntelligence, where we are continuing to advance the software, the AI solutions that supports our endoscopes and where we have the benefit of having 1 software platform for all our endoscopes combined as the only player in the field.

Last but not least, we are also confirming that anesthesia and patient monitoring remains meaningful for our company. And we continue also in this area to grow. But here, we are more focused on the profitable growth, meaning that we are investing less, and we are expecting more scale, as you have seen in the recent results from the past year.

If we then look at the strategic focus themes, let me recap this. We have 4 specific areas where we believe that we can continue to make a difference. The first one is very important around customer centricity making sure that we continue to focus on our clinicians but also expand that focus to the health systems where our broad endoscopy portfolio can play a role.

And then we see opportunities here to accelerate our adoption of single-use as well also as creating more evidence both on the clinical solutions, health economic and not least sustainability which is also playing an increasing role for our customers.

Innovation remains at the heart of what we do at Ambu. And we also believe that we can deploy new technology either in-house or through an increased focus on partnerships to simply be able to be on the forefront of delivering new endoscopy solutions that plays a real role and makes a real improvement for our customers.

Then to succeed with both our growth, but also with our margin improvement, it's super high on our radar to continue to build a scalable, profitable platform. We continue to see a number of efficiencies that we can leverage over the coming years, which is part of the plan that we are fully executing and that we have slightly extended.

And then last but not least, the most important in Ambu to deliver on our strategy to deliver on our plan is our people and the culture that we have built and that we really cater for in Ambu and this is where we see great opportunities to continue to fuel this culture of growth and of empowerment because we have a lot of highly motivated and highly capable colleagues all around the world.

So this is, in a nutshell, our strategy. And let me talk a bit about the growth because -- and where we see our growth coming from. And instead of looking at the market size, which is huge, let's look at the growth in the single-use market because this is actually what matters. And there are a couple of important points here when we look at the market.

Overall, if we start on the right side here, we expect that the single-use endoscopy market is continuing to grow with over 20% CAGR, at least in the period until 2029 to '30.

If we look at where this comes from, there's the underlying endoscopy procedure growth, which is roughly around 5% which is very much driven by both the aging population, increasing chronic diseases and also an increasing trend towards minimal invasive procedures.

But then there is the big transition from being -- from using reusable endoscopes to single-use endoscopes, where we see that growing at least around 15% on an annual basis.

And this growth we see coming from both solutions that are already on the market, most of these solutions from Ambu and then also new solutions that are in development right now.

But we do see a continued conversion where customers have agreed in many of the subsegments that we are in -- that single-use endoscopy is the solution to a lot of the challenges that they have in the hospitals.

And this is something that they also see as a standard of care as we move ahead. We did a survey among customers earlier this year and among potential customers as well, where they said that in respiratory, urology and ENT, where we did the survey.

The clinicians said that roughly 70% of their procedures can be done with a single-use endoscope. And we are far from that today. So that also explains the great potential.

And let's look a little bit at what is driving this conversion to single use. And there are 4 main things that are the drivers. One is the higher efficiency that we see in the hospitals.

So there's more and more evidence out there that customers can actually treat, or hospitals and clinics can treat many more patients when they use a single use endoscope. Because they don't have to wait for a scope being available or the reprocessing that needs to be done.

And this one is super meaningful in the hospitals today where resources is a constraint. Then there are better economics. If you do the full budget model -- budget impact model from the hospitals, it's very clear that it comes out more economic viable to use single-use in most cases.

We have the strong clinical performance where the quality of the single-use scopes have reached, in many segments, at a level where it is very strong and comparable to single-use and on some aspects, even better.

And then we have sustainability, which, in particular, in Europe, and we are seeing also the trend in pockets of the U.S. where sustainability really plays a role in the choices of the hospitals.

So if we have to take a step back and say what is really the potential of Ambu and how do we see it, it's basically a very attractive market that we are playing in.

And we are, as market leaders, leading the structural shift to single-use solutions. We have the broadest single-use endoscopy and also a very strong proprietary platform to deliver this growth and the largest commercial footprint in single-use.

Our solutions and our innovation is very focused on meeting and solving the problems that we see with the customers so they can treat more patients with better outcomes.

We have a setup which is already very competitive and scalable when it comes to cost, and this is something that we are continuing to fuel by ongoing initiatives that we have -- and this is basically what brings us to a very clear path of solid double-digit organic revenue growth longer term and also a margin expansion towards 2030 that Henrik will come back to.

So before I hand over to Henrik, let me just briefly talk about the EndoIntelligence where we have received a couple of questions. And basically, we are not sharing all the full programs that we have in development.

But what I can say is that EndoIntelligence is building on the hardware platform that we have, where we are also working on a next-generation supported by the software that we are really continuing to improve across all endoscopy solution areas and then AI-enabled applications.

So we are basically able to support the doctors, both in being more efficient before they do the procedures with the patients, during the procedures, enabling much better diagnostic support than they have been able to so far and then also after the procedure where there typically is an increasing level of documentation being done where we can support.

So this basically also means that with us being present in respiratory, urology, ENT and GI with a strong offering when it comes to our endoscopes here exemplified by our respiratory solution, adding on then additional solutions that also plays a role in helping our customers such as the video laryngoscope that we launched.

We have our VivaSight One Lung Ventilation as well as our Broncho Sampler Set, we are basically becoming a company that can help the full procedure that they do with the patients in terms of endoscopy, and this is the way that we are moving forward.

And then we have the benefit of the portfolio when we are engaging with the health systems where it's very meaningful that they can go into a room and actually plug any endoscope in and then do a procedure, so they can also leverage the full hardware platform and the software that we have with our solutions.

So with that, I'm -- I will pause, and I will hand over to Henrik and come back in the Q&A. But just by saying that we feel super confident around our new ZOOM AHEAD strategy, we are very excited about the potential that we have, and we feel we are very well positioned to also strongly differentiate ourselves in solving our customer needs better than anyone else.

And this is also where with a high market growth in single use, transitioning from reusable, we are strongly positioned for high growth as we look ahead into the future.

So with that, Henrik, over to you.

Thank you, Britt. And like Britt ended, I also wanted to start before I get into financials by saying we stand here today on the back of what we feel are really solid results for '24, '25 with a lot of progress on our strategic initiatives.

And we also stand here today super confident, as Britt just said, and with a high level of excitement with what we have ahead, with what we launched at the Capital Markets Day guided by now our ZOOM AHEAD strategy.

And I'll also come back to that and talk a little bit about our long-term targets in connection with that. But starts with, of course, with viewing first our '24, '25 financial results.

Starting with growth, we had an overall growth for the year, organic growth of 13.1%, impacted by FX, both for the full year, but in particular, for the last 2 quarters. So the full year reported growth landed at 12%.

For quarter 4, specifically, we had an organic growth of 10%, as Britt also presented before. Adjusted for the FX impact that in reported currency landed at 5.7% and just illustrates how impactful the depreciation of the U.S. dollar DKK currently have been on our numbers in quarter 4.

In terms of business, we had a strong growth still endoscopy, though lower than the previous quarters at 12.4% and still a solid growth also in our anesthesia and patient monitoring business with 6.4% growth, bringing the total growth across the year to 15.4% for endoscopy and 9.9% for anesthesia and patient monitoring.

Very satisfactory results and in alignment with our long-term guidance and also with the ambition we set out exactly a year ago when we set the guidance.

In terms of the geographical split, we continue to see very solid growth in North America and Europe, less growth in Q4 for rest of world, mainly due to timing of orders, but consistently across all of the areas, strong growth. And of course, our North American growth was in reported currency, particularly impacted by the U.S. dollar DKK depreciation.

So overall, a good growth momentum and a growth momentum we also see continuing in now to '25, '26. Something that I'll come back to when I talk about the guidance for '25, '26.

Then turning to margin. We also landed the year on a very solid foot, we feel, in terms of our Q4 but also in terms of the full year. For the full year, '24, '25, we landed at a EBIT margin of 13.0% for quarter 4 alone at 10%.

Importantly to note, for quarter 4, as also communicated in our Q4 statement, we were impacted negatively by FX and also by tariff costs. And adjusting for that, we actually landed our Q4 and have corresponded to 13.4%, fully in line with our EBITDA margin expansion plan.

As also communicated on our Q3 statement, the FX impacts are temporary. We are initially impacted by the U.S. dollar depreciation, but they will, over time, be compensated then by also lower costs. But it takes quarters to really see that offsetting effect and with a continuation of the U.S. dollar DKK depreciation, it did net-net impact us negatively for quarter 4.

For tariffs, I will also come back to it later. We have seen an increased tariff regime globally but specifically for our manufacturing coming from outside of North America that has impacted us in quarter 4 and will also impact us in '25, '26, but we remain very confident that with the plans we have in place already, we can mitigate a lot of this impact.

It takes time to implement, like we've said from the start, depending on the initiatives, 6, 9, 12 months. So there will be a gradual phasing. And therefore, right now here in Q4, we did see a negative impact, which in part will continue into Q1 and Q2 and Q3, particularly for '25, '26.

Then looking more in detail on the margin and breaking up to gross margin first, and then secondary our OpEx costs. Gross margin continued a strong development, which we've been on now for 16 consecutive quarters almost with an increase versus last year of almost a full percentage point, landing the full year gross margin at 60.2%.

This, despite the negative impact from FX, is something we are very satisfied with, substantiates our ability to grow the higher gross margin business in endoscopy solutions and also drive price increases particularly in anesthesia and patient monitoring.

In addition to this, it's also illustrating how we've continuously managed to drive efficiencies in our manufacturing footprint with better utilization of our factories, but also better throughput. So a really good result and a good continuation also towards our long-term ambition.

In terms of OpEx, there was an increase in OpEx in quarter 4, one, because we continued with the investments and Britt -- as Britt also said in her opening, investing in commercial resources.

But two, in particular, also because we did see effects from tariffs, which are reported under sales and distribution costs, which made the OpEx costs go up in absolute terms.

That being said, we continue to see further potential for operating leverage and continue to be committed and confident on the long-term margin expansion journey where OpEx will be the main driver of our further leverage.

If we then turn to cash flow, we landed the cash flow within expectations of the updated guidance for full year cash flow of around DKK 400 million with for quarter 4 specifically DKK 130 million, landing the full year at DKK 407 million.

This is a continuation of the efforts of driving strong cash conversion. And despite the negative impact from FX on EBITDA, in particular, a continued positive momentum on also how we manage our net working capital while still making sure that we have enough safety in our supply chain and also in our inventories locally to manage customer demands where needed.

So overall, a really good result. If we then break down into some of the components of cash flow, as said, EBITDA had a drop in quarter 4, mainly driven by FX. Secondary on our CapEx, we did see a slight increase, mainly due to certain timing of investments in R&D.

And last but not least, we did continue to see a slight decline in our net working capital as also guided in the last quarter, particularly managing our inventory, but also our accounts receivable in a slightly more tight manner, while still making sure that we have enough buffer in our inventory and supply chain to manage customer demands.

In addition to that, we are, as part of our annual report, also proposing a further cash distribution, a process we started more explicitly last year with an updated dividend policy and one that we are now extending and expanding.

This concretely will consist of: one, a dividend of proposed DKK 110 million, which will be finally decided at our AGM in December and secondary, a share buyback program of a total value of DKK 150 million.

We intend to start the share buyback program after the AGM and executed in full before the end of the financial year with an expectation of canceling the shares when timely needed. We do this, one, because we believe that this is the right thing to do under our dividend policy and with a continued strong balance sheet.

And now because we have a negative net interest-bearing debt, we also feel it's timely to increase the cash distribution. That said, it still leaves plenty of room for us to still have high ambitions on our M&A agenda, something that we certainly still do despite a slightly higher cash distribution than previous years.

With that, let me look more specifically now at the '25, '26 outlook. We are guiding for '25, '26, a growth of 10% to 13% organic growth for the year in alignment with our ZOOM AHEAD strategy.

More specifically, we are guiding for endoscopy solutions, a growth of more than 15% in part with accelerated growth in respiratory and secondary by continued growth momentum in urology and GI and we have come off to a good start on both dimensions. For anesthesia and patient monitoring, we're expecting mid-single-digit growth which is in the higher end of our long-term guidance and again, an illustration, as Britt described earlier, of the continued solid momentum both on volume and on price increases within anesthesia and patient monitoring.

With the growth composition of our '24, '25 financial year, we are expecting that the total growth will be more back-end loaded, and we are expecting with very high comparables for quarter 1 that we will have a lower growth in quarter 1, perhaps even just below double digit.

But it doesn't change that our full year guidance for the year is 10% to 13%, and we feel very confident with the start we already see right now.

Turning to EBIT margin. We are, for the full year, guiding 12% to 14%, including an impact -- expected impact from tariffs, negative impact of 2 percentage points which means that adjusted for this, we would have been guiding 14% to 16%, exactly on the path of our EBIT margin expansion.

Why do we see this impact from tariffs? Well, we do because despite our ability to mitigate tariffs, there is a timing of implementation of between 6, 9 or 12 months, depending on the initiative.

And that does mean that in particular, in the early part of '25, '26 financial year, we will see higher tariff costs that will gradually decline across the year. And we're expecting tariffs to have much lower impact when we turn forward towards '26, '27 and further on, something that I'll also come back to later.

That also means that with slightly lower growth -- organic growth momentum for the start of the year and a higher tariff impact that our EBIT margin will also be back-end loaded for the financial year '25, '26.

Last but not least, we are also in continuation with our ambitions from the ZOOM AHEAD strategy, guiding a cash conversion of around 40%, a continuation of our ability to drive efficient growth, make sure that we still invest in the business, while we manage our net working capital in an appropriate way.

And with that, let me look a little bit further ahead and come back to some of the direction setting we also gave at our Capital Markets Day as part of ZOOM AHEAD on EBIT margin more explicitly.

We are, as you see on the left side on the slide, in a good position to manage the tariff situation as we've increased our manufacturing footprint in North America with our manufacturing site in Noblesville in U.S. and Juarez in Mexico substantially during the past years, with particular expanding our production in Mexico.

This leaves us good flexibility to manage that, more and more of our products sold in U.S. will be produced at these 2 sites, which are completely tariff exempted. Mexico included under the USMCA tariff agreement or trade agreement.

That means that with further transfers towards our Mexico factory, which we are ramping up further, we do, as I explained just before, see negative impact from tariffs of around 2 percentage points for the financial year '25, '26.

But we see this gradually decline and be very, very minimal when we get beyond '26, '27, which also means that despite a lower guidance for the next year at 12% to 14%, we are very confident still on our ability to deliver around 20% EBIT margin by '27, '28 as we continue the operational leverage on OpEx in particular, and we implement the mitigation actions on tariffs.

And that brings me to my closure reminding us of the targets we communicated as part of ZOOM AHEAD. We feel super confident, very excited, as Britt said, on the journey ahead, confident on the potential for the high-growth in endoscopy solutions, particularly within respiratory and urology, but also in ENT and GI with a much more clear path for how to deliver on this and a very strong market demand for more and more single-use solutions.

We see an increased potential also in anesthesia and patient monitoring with a strong customer loyalty, strong product portfolio and a continued solid volume development at a 3% to 5% growth, meaning that our full combined organic growth ambition CAGR for the period is 11% to 13%.

In addition to the target on delivering approximately 20% EBIT margin by '27, '28, as also communicated at the ZOOM AHEAD, we also lifted the EBIT margin guidance to plus 20% by '29, '30 and across the period, an average of more than 40% cash conversion.

We feel these extended and increased targets is an important part of our ZOOM AHEAD strategy and really underlines the great confidence and high excitement we feel about the future for Ambu and for single-use in particular.

With that, I thank you for your attention, and I hand it to the operator for questions.

[Operator Instructions] And the first question comes from Jesper Ingildsen from DNB Carnegie.

I have 3 questions. First, on respiratory, you see a sequential decline in growth despite the easy comparables you have from last year. Could you maybe just elaborate what makes you confident that you can see growth accelerate in the coming financial year?

And then on the other endoscopy business, it sounds like it's -- the lower growth we saw here in Q4, is that related to urology and the competitive situation we've previously discussed at Q2?

So I just wondered if you could elaborate a bit what caused the growth to drop to as low as 16% and essentially what needs to happen to get back on track to the 20% growth you previously talked about for that specific segment and whether that's still the ambition.

And then lastly, I think you indicated that in terms of the top line growth, that would obviously be sort of like slightly below the double-digit growth in Q1 due to tough comparables and because you have a back-end loaded year.

So I just wondered if you could also provide a bit more information on sort of like how to expect or think about the EBIT margin in Q1 as well, whether that could go below the 10% EBIT margin here in Q4, especially considering that the tariffs are probably going to weigh a bit more.

Thank you, Jesper, for good questions. Let me comment on the first 2 on growth, and then I'll hand over to Henrik to also comment on the Q1 and your EBIT question.

So first, on respiratory, I think if we take a step back, we have had discussions and questions over the last 1 to 2 years, whether this was a segment where we would see double-digit growth. And I think this is what we feel very confident around.

And also, as Henrik also commented on, when we look ahead, we actually think that we are quite solid in the double-digit range.

Having said that, we do see fluctuations and now we are landing on 11.6% for the year, but we do also -- we do have quarter-over-quarter some specific orders that are timed and that where we are not able to fully control or we deliver, said in other words, we deliver when the customers have the demand.

So this is why we went slightly below on the 8.8%. So we -- when we look into the pipeline that we have of orders and into the year, we feel quite confident around the solid -- the strong momentum and the solid double-digit growth that, that will continue.

We are entering now not only the flu season, but I think with the portfolio that we have of continued strong aScope 5 Broncho sales combined with the aScope 4 and then with our SureSight solution, having received a very strong feedback and initial positive -- being positive received by the customers, we actually do look at a segment where we see continued very solid growth for the coming -- for this year and the years after.

So this is how we look at this segment. Then the other segment, which is, of course, a little more difficult to look at the number because it is, I mean, GI, which is growing nicely, but from a low base. And then we have urology being the biggest part of that segment and then ENT.

I think when we look at urology, we -- I mean, we still -- with the new solutions that we have delivered where our ureteroscope, as an example, is off to a good start. But given the nature of these procedures, this is something that is -- that has slightly longer sales cycles, as I mentioned, which we often see.

But overall, when we look at this segment, I mean, we do feel quite comfortable around the -- being around the 20% range, which we have also seen in the previous quarter, which is why I commented on ENT specific because that's a segment where we have basically our rhinolaryngoscope, which has been on the market for 7 years now that is continuing to drive the growth in this segment.

And while we expect that growth to continue, we see a slowing down of that growth, which basically, in particular, in Q4 impacted the total growth in this area quite a lot. So this is also why we wanted to single that out to be transparent and also to make sure that we aligned around the prospect for urology and the current performance.

So overall, we do think that this is a segment where we continue to see good growth. And the 2 segments combined, we feel quite comfortable that we should deliver above 15% total endoscopy growth in the year that we have just started.

And as Henrik said, we are off to a good start with October. So we don't have concerns that this will not be the case.

Exactly. And building on that on growth -- on your question on growth for Q1 and my indication on where we expect to land and related to that EBIT margin.

On growth, I just want to particularly underline that if you look at the quarter 1 for last year, we had a solid high endoscopy growth, but an exceptionally high A&PM growth.

So in terms of the composition by the businesses, it's particularly in A&PM, where you will likely see very low growth because obviously, there, you're up against exceptionally high comparables. If you then translate that into EBIT margin, as I also said on my guidance, therefore, we will see lower growth.

We will likely also see higher tariffs with what we are observing right now with the current tariff regimes. And therefore, those 2 combined means that we will also see a lower EBIT margin.

I'm not going to guide exactly on what number that is, but it's mainly to say, if you look at our guidance and if you look at how the EBIT margin will look quarter 1 across quarter 2, 3 and 4, then quarter 1 will likely be the lowest quarter of the 4.

And the next question comes from Thyra Lee from UBS.

I've got 3, if I could, please. So the first is, I'm just wondering what is driving that delta to the lower end on that 10% to 13% revenue guide versus that midterm guide of 11% to 13% that you provided at the CMD last month?

It would be really useful if you could speak to the moving parts that result in the lower end here. Really, I'm just wondering if there's anything new or different that we missed since we last heard from you.

And then second question is just thinking about the run rate into Q1. You gave some soft guidance, but are you expecting any margin improvement in Q1 from the 10% in Q4 that you gave this quarter?

And then lastly, obviously, you're a growth story, but I'll round up with margins. Could you just confirm that the 12% to 14% on the adjusted EBIT margin includes all possible mitigating actions that you can take?

So aside from shifting production to Mexico, what other actions are being taken? And you gave us a good chart in that -- in the presentation. Could you just confirm that the impact of tariffs pretty much goes to 0 over the course of 3 years and that you still feel good about that kind of 20% margin by '28?

Thank you for good questions. Let me take the first one, and then I'll let you, Henrik, comment on the second and third. So basically, as you rightly say, we guided on our long-term guidance of 11% to 13% when we look at -- as a CAGR for the coming 5 years. And we feel quite comfortable that we can deliver on that.

Then you can say has not -- why are we then guiding 10% to 13%? I think I want to reemphasize and make it very clear. There's nothing new that makes us see the market, the world, the potential anyway different than we saw around 1 month ago.

But again, this is a 5-year guidance, and we believe our guidance of 10% to 13% is a prudent guidance and that is a guidance that is even should we land on the lower end of this, which is not any speculation that I have right now, but then we should still be very well aligned to deliver on our long-term guidance.

So we do feel still quite optimistic and quite confident around the potential that we see and also that our guidance is well aligned with our plans for 11% to 13% growth -- CAGR long term.

And with that, to your margin questions, Thyra, also thank you for those. If we start with the run rate EBIT margin from now Q4 going into Q1 '25, '26, I think the clear answer is, yes, we see actually continued strong margin expansion excluding FX and tariff effects.

And I think that is the big caveat we have to give today. I think learning from now Q3 and Q4, actually, the biggest negative impact on EBIT margin has been FX. And therefore, exactly where that Q1 will land depends on exactly those 2 dimensions, tariff and FX.

With what we see right now, we feel very confident that taking those aside, we are on a continued margin expansion plan, both on gross margin and on OpEx ratio.

If you then look at a 3-year period and you asked, will the tariff go pretty much to 0 by '24 -- '27, '28? I think what I want to remind us all that I think the days where tariffs disappear completely are likely not just around the corner. So we will have a smaller margin -- marginal impact from tariffs, but it will be very, very small.

And that is really why I would say not that tariffs will disappear, but that we will manage them and stay within the long-term guidance we gave already back in ZOOM IN and the one we reiterated now with ZOOM AHEAD being by '27, '28, our EBIT margin target remains around 20%, subject to certain changes if there are opportunities along the way.

That still stands, and we don't see the current tariff regime in the world impacting that because we can mitigate that between now and '27, '28.

Okay. Very clear. And if I could -- you just missed that, aside from shifting the production to Mexico, are there any other mitigating factors that are being taken at the moment?

So happy to cover that also. Thank you. I think besides moving production, which is the bigger impact, of course, we're looking at pricing mechanisms for certain products. We are looking at what are other mitigating actions we can take.

The reason why we point out the production transfer is because that is by far the single biggest initiative that will impact and mitigate the tariff cost.

Yes. And I think we cannot be fully transparent on all the different things that we are looking at. But we have -- we are well in progress in implementing a number of things that should also put us in a good position in relation to tariffs.

The next question comes from Tobias Berg Nissen from Danske Bank.

I have a couple of questions, if I may. Just so you just concluded a solid CMD here a month ago, but it will come in a little bit softer here in Q4 and also with the EBIT margin at the low end of the guidance here coming in at least 13%.

This can suggest you kind of have limited visibility here in the short term also with these more lumpy sales and with FX and tariff headwind higher also than what we had expected. Why should we trust you when you come out with this reiterated midterm guidance, but also your longer-term guidance on the margins? That would be my first question.

And then just looking at tariffs and FX, it seems like the market is at least like not that good at calculating this. How should we model this over the next coming quarters?

I hear you saying that the highest impact here in H1, but how do you see it also because you have like DKK 50 million here in Q4, 30 million FX, DKK 20 million from tariffs, but also like DKK 30 million in Q3, that's only FX, right?

So if you can put some more clarity on that, that could help the modeling, would be great. And also, if you could provide more details on the time line and measures you're taking to mitigate some of these tariff costs, especially with the ramp of the Mexico's plant.

And if you have baked in any like one-off like cost items related to this in the guidance for next year. I know you're not guiding any special items, but any color could be great.

And then just on the ENT side, another follow-up. The slower growth, is this related to higher competition? I know you mentioned [indiscernible], that the product is now 7 years old, and I know you have a HD version in your pipeline. Is the HD launch what is needed to drive this up to prior growth rates?

Yes. Thank you, Tobias. And I'll comment on your last question and let Henrik handle 1 and 2. But maybe also just a small comment.

So I mean, clearly, as you say, we -- I mean, we were very confident in our future growth and in our strategy when we were at the Capital Markets Day. And I have to say we -- I mean, at that time, we obviously also knew and the Q4 results coming in around that time.

And we were also actually very confident that these were in line with our own expectations for the year. And in terms of also some of the choices that we had made when it came to continuing to invest in growth as well.

So overall, we -- I mean, we are equally confident when we look ahead at the great potential and our ability to also deliver solid growth. So I just want to make that super clear.

Then in terms of ENT, I think you should look at this as -- I mean, as an area where there's actually still limited competition. And even we have a solution that is 7 years old. So it's not built on the latest technology that we use in some of the other solutions that will come with our next-generation rhinolaryngoscope.

But our effort in terms of having, in many countries, some of the same commercial resources focusing on urology and ENT basically means that there's -- and in line with our strategy that we have launched with a stronger focus on urology, I think it's fair to assume that it's probably more driven and again, not to read too much into a softer quarter because we do see the fluctuations.

But it's more to do with our internal commercial focus than competition because we do see still very limited competition in the ENT space. And we're also still quite confident around the growth that we see in this segment. But we are looking also at how is it we balance our resources in -- across the different segments.

And we also do, again, see some structural or temporary fluctuations that drive this, such as timing of orders we talk about, which also is why we look more at the underlying trend and the details below that in terms of new customers and the existing customers buying more. So I think we remain confident about this segment. But again, that's where we are.

Exactly. And then going back to your questions on CMD linked to now our quarter 4 and FX and tariff models. I think I will start out by saying, Tobias, 2 things. So why trust us?

Well, we would say what we communicated at the CMD is in line with what we're also communicating today. And then you can argue, is it softer or as expected, as Britt also said, for Q4? I think we've been quite clear on both how FX impacted us.

We spent quite a bit of time on that in Q3 and also that tariffs will have a negative impact, though temporary and then go away. And this is exactly what we are reiterating today.

So I think that is my main argument that the story has not changed at all. And actually, if you look at the graph we also illustrated, it's exactly the same pathway. Obviously, at the CMD, we did not discuss guidance for '25, '26 because we had not closed Q4, and it was not the time to do that.

I think secondly, of course, we always take feedback for how we can be more explicit. And one of the feedbacks we have taken from the community on the call here now, for example, is to be more explicit on FX and tariffs.

And therefore, you will see across the quarters of the past financial year, which is a practice we will continue. We've been much more explicit about quantifying the FX impact and the tariff impact now also here with quarter 4 in a DKK million amount because that enables us to have this discussion on where are we actually with and without FX and tariffs.

The last thing I will say on that is that -- that I think on tariff is obviously something that moves by the day but now is starting to fall into a slightly more stable regime, even though I think the past now 8, 9 months have shown stability is not exactly how to describe the situation.

I think on FX, I would just call out again that, that is the biggest single impact across the last 2 quarters. And I think you all on the call know how much the U.S. dollar DKK has fluctuated. And remind you, if you go back a year ago versus today, it is a quite significant depreciation that very few, including all of the banks on the call, were not forecasting.

So I think there, we are at the mercy of the FX market like you. And we follow the market. We have a natural hedge. But as part of -- as we communicated in Q4, there is a time lag in between, it impacts our top line and our gross margin and therefore, EBIT margin and when you actually see the counter offsetting effect coming, particularly through COGS with our international manufacturing footprint.

Specifically, therefore, how should you model? And are there any specific one-offs you should think about for '25, '26? On FX, I'll put that aside. I mean, that follows the answer I just gave.

On tariffs, we are not expecting any specific one-offs related to this. I think as a practice, we operate and manage the mitigation actions within the running business, partly because we were already on the journey of ramping up in Mexico and partly because we think that is the right thing to do.

So unlike other companies, we will not start reporting bigger one-offs because we don't think that is relevant given it is a temporary situation.

I think secondly, in terms of how you then model, I think my best input would be to now with the added specificity that we are giving in the quarterly updates with a more explicit FX, DKK million and tariff amount.

That with that, hopefully, we can better adapt that also into your models in the right way because clearly, there was a difference here on Q4 with what was in consensus and where we landed, particularly on these external factors.

And the next question comes from Martin Brenoe from Nordea.

Highly appreciate also that you are giving this detailed view, and you doubled down on your CMD strategy, much appreciated. I guess where the share price is today is reflecting maybe that we've seen management being bullish and confident on Ambu before and have also seen the analysis of how big the market is.

And if you just take some of that market and penetrate that, then everything is going to be good. So maybe I think to provide a bit of confidence to the outsiders here, how do you foresee Ambu accelerate back if you look at it from a more bottom-up perspective?

So you say ENT will remain a drag most likely. It will not be something that will reaccelerate. So can you maybe be a bit more clear on which drivers you see for the growth from a bottom-up perspective? And I'll let you decide how to do that. That will be the first question from my side.

Yes. Thank you, Martin, and actually a very good and relevant question. Let me answer that, and then, Henrik, you can supplement. So if we take -- I mean, you're right that if we look at the market, I mean, it's huge, and we can say that out of the total market, it's only 3% to 4% penetrated.

When we also look at -- I mean, the last many years, we were the first to enter this market with a single-use endoscope. And we have basically, I mean, as market leaders built this market. And then we have seen some competition come in, in the last couple of years.

But what I will say is I think there's a couple of things that makes me very -- I mean, very confident. I mean one thing is that it does take time to build a market. It does take time to change habits in -- among physicians, in particular, in some areas more than others.

And I do think if we look at it and maybe start with -- or if we look at it overall, you could say, I feel much more confident and I actually do feel that we are much more derisked right now compared to when I stood here 2, 3 years ago.

Because back then and for many years, it was pulmonology, as we call it at the time, that was basically driving the growth where right now, we stand on, you could say, essentially 4 solid legs where we have actually proven that we have solutions that meet the customer needs, not only in respiratory, where we have expanded the portfolio, but also in urology, ENT and GI, where we are today very niche focused mainly with our gastroscope.

So that actually makes me confident. And in particular, then looking at the potential and if we start with respiratory, we basically went in and delivered on the need of very simple procedures. And then we gradually expanded and with our aScope 5 Broncho also we were able to meet the needs of the very advanced procedures.

And some of this has to do with the customers getting used to our solutions, but a lot of it also has to do with our ability to innovate and drive superior solutions also at an affordable price.

And that is where our innovation effort continues and our scale continues to play a key role, not least also because technology is playing with us in making higher quality image cameras, sensors, as an example, available at much lower cost. So that basically means that we are also able to meet the needs at the customers at prices that are attractive to them.

So that's where when we look at the momentum that we see in respiratory with our bronchoscope that -- I mean -- and the continued expansion into more and more complex procedures, continuing the trajectory that we see now in the markets where we are established, mainly in U.S. and Europe, that I'm confident that we are actually on to this momentum that is continuing.

And the fact that customers even themselves says that we can use it for 70% of the procedures makes me actually quite confident because normally, customers will say a lower number than they actually end up using.

Then if we talk about urology, I mean, we have been able to -- in cystoscopy, which is very much around bladder cancer screenings, we have been able to build a solid presence with our cystoscopes that basically with our first generation works for what they need.

And this is then where we have also leveraged technology to bring a high-definition scope out expanding with the PCNL indication. So that can also be used in the field of kidney stone management.

And then we have entered the whole kidney stone management space with our ureteroscope, which is a market where, as you know well, it's the first time, we are not the first to enter that market because there is actually a demand for single-use scopes coming from a slightly different angle in terms of the reusable breaking a lot, and they spend a lot of cost on repairing.

And here, we have a solid scope that can then fit into our portfolio and some of the development that we make in innovation on the platform, on the software with -- latest EndoIntelligence actually helps us there. So we do also in urology, with our expanded portfolio, see a good momentum.

And this is also why with our strategy, those 2 areas are the key ones. And we are also looking at how is it then we can consolidate even further and potentially add more solutions that helps address some of the needs that we are solving, which will come on top.

And then ENT, it's a little more slim. It's still an area that -- and that's in line with our strategy where we see that we can continue to grow and meet more needs, and that's what we will do there. And then combined, you can say as more of the treatment is moving outside hospitals, that's also where -- I mean, the need for solutions like ours is just increasing.

So that's really why we are quite confident that we have gotten to a meaningful penetration where there is acceptance that this is, I mean, a solid standard of care. So that's really why we are looking at the potential with great confidence.

And then on the side, and I will not spend too much time on this, but just to say if we then take GI, it's very clear, and I've been out with a lot of GI physicians that a lot of procedures are done outside the GI suite.

There's a lot of the similar needs that we are actually solving in the other segments. We don't have right now the solutions at an affordable price to be able to go large scale into this segment, but the technology is there to my earlier point. So this is also an area where we should, of course, be the ones entering this.

And that's something that comes on top of some of what we talk about here at a completely different magnitude that we are not getting carried away here, but we are solid making progress and making sure that we also don't risk the company or don't risk too much, but still also deliver on our potential in a step-by-step approach.

So if I can round off, and I know we already gave a lot of details, Martin. I would say, ironically, on your question, we stand here more confident than ever based on 2 main things: the feedback from customers and the fact that what is needed to deliver, on what Britt took us through now, is fully within, to a very, very large extent, our own control.

So I think our advice back would probably be to say Q4 might have been a slightly different composition than you expected.

If you look at the guidance for the year to come, it's fully in line with what we communicated at Capital Markets Day and the potential we see in all of the areas for all of the products with the feedback from the customers is exactly the same.

This sounds really good. I have 2 quick follow-up. One is I love good feedback. I also appreciate it myself. But unfortunately, you cannot put it on the P&L.

So wondering when we should start to see that the good feedback starts to translate into sales. What's -- and you don't have to say what you expect for this for your products in terms of SureSight and Uretero, but maybe in terms of what the historical run rate has been for previous launches.

And then just finally on margin, it's going to be a bit back -- or back-end loaded year on the margin side as well. For the past 7 years, the margin has been the softest actually in Q4.

So just wondering what gives you confidence in Q4, the latter part of the year being the strongest margin all of a sudden. That would also be nice.

And I'll briefly -- and I'll make it brief on the revenue. I think we have talked -- and I think, again, we appreciate feedback to Henrik's point, but we have tried to also explain our -- the whole selling process and the sales cycles.

And when we bring new solutions out, how we also -- how we do the evaluations before the sale. But maybe I'll just jump to the conclusion and say, as we have seen with previous product launches where we have put an effort behind like the aScope 5 Broncho, I mean, this has come gradually.

And it's -- I mean, when you build the momentum and get the solutions in, we will see a steady strong growth. And then that growth is building up and coming for many years ahead.

So we are, of course, continuing this year on our new solutions, being SureSight, being our ureteroscope, a continued good momentum. And yes, and I think that's as specific as I can be. But I think it is promising for the coming years that we'll see that gradual improvement.

And on margin, Martin, I think 2 things. One, you're right on the historical pattern, particularly, I would say, for the last 3, 4 years.

The main answer is the -- are the external factors, particularly tariffs, which will gradually decline across the quarters with our implementation of the mitigation actions.

So that is by far the biggest driver of why we feel confident that the EBIT margin will increase across the year.

The second thing is more timing of our internal investments where we've had now for the couple of -- past couple of years, a certain timing where a lot of -- majority of those investments often end up at the end of the financial year.

The composition will be a little bit different this year. So it's really things that are right now relatively clear line of sight to how we think it will impact our P&L.

And the next question comes from Anchal Verma from JPMorgan.

I have 3, please. Just again, touching on the phasing for next year. You have pointed to back-end loaded here, and we've kind of discussed that. But just trying to understand, is it all down to comps at the top line? Is that the key driver of the back-end loaded year?

And on margins, you've touched -- similarly, you touched on FX, tariffs and some investments being more front-end loaded. Are these key elements that we need to be aware of in terms of phasing?

And then the second one -- and apologies to fish a bit more on the long-term targets. On the margin guide of 22% by 2028, which you have reiterated this morning, how should we think of that bridge from 12% to 14%, let's assume 14% that from this year to 20% in the next 2 years?

And what will actually be the drivers and that's despite the tariffs and FX headwinds, which we expect to continue?

And then the last one is on FX. Are you able to quantify the FX impact assumption we should assume for the top line and margins for this year if current rates continue? Maybe putting it another way, from our math, we get around a low single-digit headwind to sales and margins. Is that fair?

I couldn't exactly hear what you said, the last part of the question, but I think I got the gist of it, Anchal. So let me try to go through it from your second question first and then phasing and then FX.

So I think I just want to reiterate on long term, as I heard your question on the impact of tariffs and the, you can say, journey towards the particular around 20% by '27, '28.

I think in all honesty, back to the point that tariff costs are temporary with the mitigation plans that we're implementing. The more relevant number to look at in terms of the EBIT margin expansion for the year we're now entering '25, '26 is actually 14% to 16% because that is excluding the bigger impact from tariffs.

And if you use that number, we will be exactly on the line also of consensus with what the EBIT margin expansion plan would have been without the current tariff situation.

And with us being able to mitigate them, as I answered earlier in my presentation, we really see that the underlying operational initiatives we are taking, they are bearing fruit, and we're exactly on that journey still that we communicated at the CMD and a year ago in a similar meeting like this.

So that is why we feel confident that is really because if you take the tariffs aside, we are really exactly on that journey. And that is also why we've been so explicit in our communication around it.

If you then look at the phasing for the financial year that we're now in, revenue, it is mainly/purely comparables that drives this back-end loaded factor. As I said before, we see a solid start of the year and on endoscopy, the growing factors, as Britt said earlier, there are still effects from new products.

Obviously, they are also building across the year, which means that we will see an uptick across the year, we expect at least from the impact from these new products, even though still smaller, it is growing.

The second thing is really on A&PM. If you look at how A&PM grew quarter-by-quarter in '24, '25 and you look particularly how much A&PM grew in quarter 1 on '24, '25, this is where you see particularly high comp challenge that we're up against now with our quarter 1 sales here for '25, '26.

And that brings me lastly to FX. I think now for the last 2 quarters, we've been more or less explicit on exactly the DKK million impact from FX.

Obviously, we are impacted by a mix of the U.S. dollar depreciation and then partly some of our currencies in which we produce and source, the Chinese renminbi, the ringgit in Malaysia and the Mexican pesos, how they correlate with the U.S. dollar.

As we described in the quarter 3, there is a time lag effect whereby when we are impacted by top line immediately and when we then see the cost of the production then going down typically of up to 3 months. And that's really also what we're seeing.

So to answer the question, I believe you asked then what have we assumed for '25, '26. As you see in our outlook assumptions, you see there also what exactly are the FX assumptions we've made in terms of what will be the average FX rate across the financial year '25, '26. And these are what substantiate the guidance of the 12% to 14% EBIT margin.

That's very helpful. Could we perhaps -- just on the long-term targets, could there be a scenario where you could amend your long-term targets on more of an underlying basis? I think that, yes, we'll get to the 20% margin by 2028, but this is on an underlying basis, excluding the effects of tariffs and FX. Could that be a potential scenario where we get to?

I don't see that. We guide EBIT margin, including FX. And fundamentally, as I said before, even though tariff will not fully go to 0 back to one of the earlier questions, we believe that with the size of the company we are becoming, the impact that will still be left is something we can manage and still deliver on the target.

The next question comes from Yiwei Zhou from SEB.

I have 2 left here. Firstly, a question on the growth for the other endoscopy solutions. I mean the quarterly growth rates are getting more lumpy if you mean that the growth should accelerate, and you still expect to deliver the 20% -- around 20% growth. I was wondering in your guidance, was there any large order pipeline embedded here in your expectation?

Yes. So I think the quarter -- I mean, so what we guide on the quarter. So the long-term guidance that we have is that we expect our endoscopy solutions to grow between 15% and 20%.

And what we are saying specifically for this year is over 15%. So that's -- I mean, that's the range that we see. So just to specify -- you talked specifically the 20% for the other segment. Sorry. Sorry, Yiwei.

Yes. So I think we -- I mean, we overall, again, believe that we have continued solid momentum. We don't guide specifically on this segment. I should just say we guide on the overall. But I think -- I mean -- and when we guide on the overall, we feel quite comfortable around the 15-plus percent.

And then I also do believe, and that's also why we wanted to single this out. I mean, urology being the big -- I mean, we see very solid continuing growth. It's the biggest part of this segment, and it's also growing at a good pace. So overall, we feel quite confident.

I will not comment again on the specific 20%, but we do feel confident that we should continue to see solid growth in the -- in this everything but respiratory. And then when we combine both of them that, that should still leave us with solid endoscopy growth as we look ahead.

Yes. But my question was what is your visibility here for '25, '26? I was wondering if you have any large order pipeline embedded in your expectation.

No. I think in this segment, I mean, we have a lot of customers. And then again, we do have large customers, NHS being one where we don't see these big large orders coming in. That is more spread out, of course, still big customers having bigger orders, but we don't see any specific big order coming in.

This is basically driven by solid underlying growth in terms of customers transitioning from reusable to single-use and being at very different adoption levels, some at 100% specifically on the cystoscope and others at lower levels that are then gradually increasing.

So the potential we have is coming from continuing, obviously, bringing new customers on board, but also continuing to increase the penetration of single-use of our scopes with existing customers.

And to build on that, the confidence you said here is based on when we look at the pattern of new customers converted just in the last few quarters and the expectations of what the running volume should be on those, we feel very confident.

And that's also what we see now in the early start of this financial year that, that continued conversion, that Britt is talking about, will drive us towards the growth levels that we are indicating. So we are not dependent on any major single bulky orders to deliver on this guidance.

Okay. That was clear. And my second question, it has actually been asked but I want to try it again. I'm still a bit surprised that you see 1% downside to your long-term growth target this year.

I mean it was only 1 month ago, you said 11% to 13%. Now it's 10% to 13% for this year. I mean if I understand correctly, this will be the year where you see a full year sales contribution from the new products like ureteroscope or video laryngoscope, where the growth acceleration should be higher in the beginning.

But now you are talking about 1% downside. Could you elaborate here what is the risk you're seeing for this year?

Yes. So I mean, I think -- and thank you also for -- I mean, for how you put it because I think the way we looked at this was, I mean, that, again, we are fully behind. And when we set the long-term target of 11% to 13% CAGR over 5 years, we actually do feel, I mean, very comfortable around that.

And then when we are to look at this year and what we have in the pipeline, we are also actually quite confident around the year that we have and what we are able to deliver.

But we do see a 3 percentage point margin in the world that we live in where there's a lot of things happening. So that's basically what is driving us towards what we believe is the right guidance for this year, which is 10% to 13% on an overall level.

But it doesn't -- it's not -- as I said before, it's not that we are more cautious than we were a month ago and that we -- or that we see anything that has changed. And I -- so this is, I mean, in full honesty and transparency how we have thought about it as we laid out our guidance for next year of 10% to 13%.

Ladies and gentlemen, this was the last question. I would now like to turn the conference back over to Britt Meelby Jensen for any closing remarks.

Thank you very much, and thanks to everyone for good questions on this call today. We look forward to our continued interactions, and I wish everyone a great day. Thank you.

Hello, everyone, and a warm welcome to this earnings call where we will present our Q3 '24-'25 financial results. I'm Britt Meelby Jensen, I'm the CEO of Ambu; and with me today, I have Henrik Skak Bender, our Chief Financial Officer. We'll give a short presentation on the business results, the financial results, and then we will open up for questions.

If we move to the next slide, the usual disclaimer. And then moving into the highlights of this quarter or the first 9 months of our financial year ending September 30. We have seen solid growth momentum continuing, and looking at the 9-month period that we have had, we have a total growth of 14.3%. Again, with our fiscal year ending September 30, that also means that we are comfortable with today's results to also lift the lower end of our guidance. So the guidance on our organic revenue growth for the full year is now 12% to 14% instead of previous 11% to 14%.

On the new launches, we continue to have good progress both on the pulmonology and urology side. I'll come back to that. But exciting advancements in the quarter of the portfolio. In terms of sustainability, which also remains important both for us and for our customers, we also have great progress on our Recircle Program. And then on the EBIT margin after 9 months, we are at a solid level of 13.9%, a lot of this driven by continued improvement in our operational leverage, but also we are continuing to invest in future growth. And then we have -- and I'll let Henrik talk more about this, we have had some FX headwind in the quarter as we are reporting in Danish kroner and have a lot of our business in U.S. dollar.

Let's look at some of the momentum that we have had in the quarter. So more specifically, our organic revenue growth in the quarter ended at 12%. And if we break that down to, first, Endoscopy Solutions, we had 15.9%, and that is for the full 9 months of the year, corresponds to 16.4%. On the Anesthesia & Patient Monitoring side, we are growing 6.4% in the quarter. Our EBIT margin before special items in the quarter in actual FX is 11.3%, and then we report a free cash flow of DKK 128 million.

Let's look at some of the progress on the strategy front, where we continue to progress across the different ZOOM IN areas that we define in the strategy that we launched over 2.5 years ago. On the solution for the customer needs, we are continuing to expand our portfolio, both with the SureSight Connect, where we now have a full range of 10 blades launched and available for customers. Most recently in the quarter, we had our pediatric blades included as well. And then on the urology front, we have the FDA clearance for the first ever cysto-nephroscope, which is an opportunity to use our aScope 5 system for more complex procedures. We continue, and that's also where we track it, on our margin and other internal KPIs, we continue to be on a very good track on our operational leverage and our execution excellence. That was a key focus area in our strategy.

On sustainability, as I mentioned, we are making progress on the Recircle Program, which is basically our take-back program, where we now are in full operation in 4 of our largest markets U.S., Germany, U.K. and France, where we are actively in collaboration with a third party, taking the endoscopes back from the hospitals after use and they are repurposed for other use. And then we continue to also have a strong focus on our culture and how we work with strong engagement scores, strong retention, able to attract very talented colleagues.

And then most recent, we are this morning announcing that we are making a leadership change in North America, and we will on Monday look forward to welcoming Scott Heinzelman as our new President for North America. And let me just put a few words for that given the importance of this role in this market. Scott will be replacing Steve Block, who has been with Ambu for the past 12 years and done a fantastic job driving and growing our North America business to where it is today. I've had a very good collaboration with Steve since I joined over 3 years ago, and we have had a planned process for the past number of months as Steve had a wish to semi-retire, which has been actually a very good way for us to have ample of time to also look for the best candidate to take over from Steve to drive the next chapter in the exciting growth journey that we are on with Ambu.

And that's where Scott Heinzelman has a super relevant background, over 20 years in medtech, most recent as a Divisional Vice President in a large medtech company where he has led a business that is more than double the size of our North America business today. He comes with a lot of experience both from big and smaller medtech. And I think he's the perfect replacement, taking over at a time where our performance in North America is very strong and then taking that even further. So a huge thank you to Steve from my side also, personally having enjoyed a lot working with him. And then also a very warm welcome to Scott.

Let's move on and look at the business and the pulmonology segment where we had organically 11.2% growth in the quarter. And if we look at how does that look on a rolling organic growth for the last 12 months, we are at 10.7%. So still at the double-digit level that we have also previously talked about is where we see this business. We do see the growth coming a lot from continuing to expand our existing portfolio, both in terms of continuing to get new customers and also expanding the penetration with existing customers. And I would like again this quarter to single out our aScope 5 in the U.S. as a product or a solution that continues to show very strong growth.

Also, our SureSight Connect is a new solution that we are bringing to market, where we are off to a super strong start in the launch of that. And this is one that I'll like to put a few more comments on. So this is the product that you see on the picture here, where we have launched the product initially early this calendar year with 5 blades. It got tremendous positive feedback from the customers as a superior, very strong offering. We have then in the quarter that we are reporting on launched additional 5 blades, including also the pediatric blades. So now we have a super strong portfolio that we can both expand our customer base on but also expand the challenges that we are solving for our existing customers who are today using our bronchoscope, aScope 4 and aScope 5.

The beauty of this solution is that it works on the same platform, the same monitors, the same software system as our bronchoscopes. So it's very easy to sort of plug the Connect version in. You can even have both the SureSight, the video laryngoscope and the bronchoscope on the screen at the same time, and then you can use the both products at the same time during the procedure and then add the disposable blades that comes with light and camera. Very excited about the customer feedback that we have, and we look forward to continue to also see gradual uptake on this solution together with our full portfolio in pulmonology that we are strengthening.

Let's move to the other segment in endoscopy, our urology, ENT and GI. In this segment, we report an organic revenue growth for the quarter of 20.8%. If we look at how that translates into the last 12 months rolling growth, it's 21.9%, so a good percentage point higher. If we look at where the growth is driven from here, it's a continuous growth of single-use offerings versus reusable across the 3 different areas. Our aScope 4 is the main growth driver when it comes to amounts, both when we look at specifically urology and ENT, where we are seeing both a good traction on continuing to get new solutions in even though these solutions have been on the market for 6, 7 years by now. And also, we are continuing to expand the penetration among existing customers.

So I think this also shows the cycles of use among our customer base, that they're gradually continuing to expand. And we are continuing to see new customers seeing benefits with our solutions, very much driven by improved efficiency in the hospitals and clinics where they simply believe that with fewer people, fewer staff, they can treat more patients something that resonates very well in the health systems of today.

Then also, we have our good focus and good traction on our new product launches, the aScope 5 Uretero, the aScope 5 Cysto also with the expanded cysto-nephroscopy indication. And then when we look at our overall single-use market share that we see with the addition of the new segments continuing to grow, although the revenue, as we have talked about earlier, continues to be limited in the bigger scheme of things from the newly launched products. But this also reflects very much what we have talked about numerous times, the typical time of the sales processes that we have.

If I just put a few words on urology where we have expanded the portfolio and take a step back. This is an area that Ambu was not known in or not in 5, 6 years ago and where we today have managed to redefine how endoscopy is done, leading what I talked about before, the higher patient throughput, the efficiency in the hospitals and clinics and doing it in a sustainable way.

The addition of the indication for aScope 5 Cysto as well as the Uretero launch is basically positioning us in a way where we are able to address the needs of more -- in particular, in the hospital, more departments, more doctors as we are moving away from where the cystoscope has been super successful, a lot focused on the bladder cancer screenings and treatments, into the more complex procedures around kidney stone management and more complex urology procedures. This is a way where we also can leverage our full system and platform where it's the same basically monitors and software that supports across the full portfolio in urology, thereby having a very strong offering to drive growth for the next many years to come as we are continuing to focus on urology.

Let me, before I hand over to Henrik, put a few comments to Anesthesia & Patient Monitoring. Here, we saw growth in the quarter of 6.4% overall. And if we look at the last 12 months rolling, it's 10.9%. It's as expected and previously communicated, it's lower than the rolling 12 months, the reason being that, as you may remember, we last year took some quite high price increases that made the comparable relatively lower. And those took place in the spring 1.5 years ago. So those high -- lower comparable are now over. So that's why we are also expecting to see slightly lower growth rates or more normalized growth rates, if you will, than the double digit that we saw for a couple of quarters.

If we look at what has driven this growth, we had a very strong quarter when it comes to patient monitoring with 9.3% organic growth. And then the growth in anesthesia was 3.9%. So still a nice growth driven both by volume and pricing. Pricing is the area, as I just talked about, where we have won a lot. And it continues to be a focus, but we are more down to normalized gradual price increases than the higher prices that you saw some 1.5 years ago.

So that concludes my part, and I'll hand over to you, Henrik, to go through the financials.

Thank you very much, Britt, and happy to take you through the financials. So I'll start where Britt also landed and comment on overall growth first and reiterate that we feel we had a very strong growth in Q3 and organic growth of 12% overall. Of course, then if you convert that to reported growth and 9% growth is a bit -- quite a bit lower, and this was mainly affected by the U.S. dollar depreciation versus both the euro and the DKK, a factor that I will come back to also, both the impacts on margin but also what that means for how we see the rest of the year.

If you look at the growth by geographical region, we were very happy to see strong continued growth in U.S. and in Europe and also very solid growth in rest of world. So overall, a very solid quarter across all of our business areas and also all of our geographical regions.

If you look at the EBIT margin, we also landed at what we think was a very solid EBIT margin, obviously lower than the previous quarters at 11.3% but heavily impacted by the FX. Taking aside the FX effect, we more or less landed actually slightly above the same quarter last year, i.e., the 12.9% that we had in Q3 of our '23-'24 financial year. And that, for us, therefore, means that this shows a continuation of our margin expansion with balancing, on one hand, solid organic growth and the resulting operational leverage that drives higher EBIT margin and, on the other hand, continuing to invest in growth, continuing to invest in commercial activities that will drive growth going forward.

But let me pause a second and look a little bit more into two factors that are impacting our results and our margins, one that had a significant impact in the quarter and one that we are more monitoring that had a minor impact in the quarter. Those two are obviously not surprising, FX and tariffs.

And let me start with FX. So overall, as I said before, our numbers are impacted by the fact that we have slightly more than 50% of our total sales in U.S. dollars. That means that with the U.S. dollar depreciation, as we saw in Q3, it has a negative impact on growth but also a negative impact on margins. Ambu has a natural hedge from the perspective that we have a number of -- a significant part of our production in China and in Malaysia. And therefore, with the correlation between the U.S. dollar and the ringgit, the Malaysian currency, and the U.S. dollar and the Chinese currency, renminbi, there is a natural hedge that typically helps us.

That said, the way that the FX impact our numbers is that with the drop in FX, you have an immediate impact on revenue. That is what you also saw in the difference between organic growth and reported growth from the page before. Whereas the impact on COGS comes with a few months delay driven by the fact that the full FX effect needs to go through production, on inventory and actually be sold to a customer before you see the P&L. That also means that when we look further into margin and separate EBIT margin into gross margin and our OpEx ratio, you will see a negative impact on the gross margin, mainly driven by FX and mainly driven by the fact that we in Q3,more or less purely saw the negative effect on revenue and saw limited effects on the lower COGS, something that will then come and support the margin in Q4.

So overall, FX is a topic -- and we also, therefore, decided more explicitly to call out that for the quarter alone, we saw a negative impact on EBIT for slightly more than DKK 30 million in that quarter alone.

If we look at the tariffs, it is still a very limited impact for the quarter. We are monitoring the effects that we see now implemented from the most recent changes, and those are still coming with short notice. We still overall have a solid setup, as we also commented in the previous 2 quarters, and believe we can limit the effects, particularly the effect in this financial year where it will be a small still total effect even with what we know today.

So the key message here is that when we look at margin, I think, in FX effects and separating that from the operational performance, super important. Tariffs, something that is on our radar but still a very small item for Q3, something that we're more monitoring for Q4 and as we go along further out also into next financial year, but where we still see we have a lot of mitigation actions to limit the effects.

With that and those two specific items explained, let me go back and explain a little bit more what are the dynamics on the margins. So we start on the gross margin. We landed the quarter at 58.9%, which is 1.3 percentage points lower than the same quarter last year. This is mainly driven by FX where, if we adjust for FX, we were actually again slightly above last year, driven mainly by the fact that our positive effects from higher gross margin in Endoscopy Solutions still on a relative basis strong pricing in A&PM and still on an overall level a better and better utilization in our manufacturing setup, particularly in Mexico. All of this, though, still when we consolidate it all up, was more negatively impacted by FX and, therefore, the comparison is slightly lower.

That said, therefore, we still feel we are on the right journey. And setting aside FX, we had actually a very solid quarter also on gross margin.

If we look at the operating leverage, our OpEx relative to our revenue. We had a small increase. This is mainly driven by our sales and distribution costs, which were mainly affected by the continued commercial investments in sales and marketing aimed at driving higher organic growth, still something that we will see the full effects of going forward and something that we're investing in now also to keep the growth momentum into next year and the following year. On the longer run, as I've also explained before, we remain very confident that with the growth journey we are on, that we can continue the journey of operating leverage and driving down the OpEx ratio. And therefore, that is still, as we see it in the longer run, the main contributor of our further margin expansion towards our '27-'28 goals.

If we turn from margin to cash flow. We had a solid cash flow in Q3 and DKK 128 million, something more similar to the previous quarters if you take aside quarter 1 and quarter 2. That said, the cash flow is still negatively impacted particularly by net working capital, which we deliberately are investing a bit more in and allowing to be slightly higher to manage the whole geopolitical situation and the uncertainty around tariffs. Therefore, the quarter was quite solid actually considering that we had this higher level, and we continue to maintain a higher level for the full year.

Next to that, we also had slightly higher capital investments, which is something I'll come back to on the next page. And last but not least, with an FX effect on our earnings, that also impacts our cash flow. Putting all these things together, we've therefore decided to update our soft guidance on free cash flow from plus DKK 500 million to around DKK 400 million for the year, again, mainly driven by our net working capital, a higher net working capital ratio to support the business in this geopolitical situation.

If we break it down into the different drivers of free cash flow, as I said before, if we start on the right side, the EBIT margin did drop, I explained before the impact particularly from FX being the main driver. CapEx did move up. As I also explained, we did decide consciously to invest more, amongst others, particularly in R&D, where we are seeing an increase versus previous quarters deliberately with investments we're making for the future. And last but not least, with a higher net working capital ratio that did drop relatively speaking to the previous quarter but are still higher than our longer-term target of 20%. We still believe we can get to the 20% longer term, but are deliberately allowing it to be slightly higher given the geopolitical situation.

So despite the revision in the free cash flow, we still feel quite solid performance and also on the right track towards our longer-term targets.

That means, in summary, if we summarize it all, we are happy today to specify that our organic revenue growth guidance is now narrowed from previously 11% to 14% to 12% to 14% with a strong continued growth for Q3 and with the prospects we see into Q4, we feel a very strong testament to the continued growth journey we are on. Secondly, we're happy today to confirm our guidance on the EBIT margin, keeping it at 13% to 15%, though noting that with the current assumptions, particularly on FX, as I mentioned before, it needs a positive effect for FX in Q4 for us to end in the upper range of that guidance. And therefore, with what we know today, it is still, we feel, a solid testament to our performance that we can keep it as it is.

And then last but not least, a revision to our free cash flow from the previous plus DKK 500 million to around DKK 400 million, we feel still a deliberate intended investment in higher net working capital, slightly higher CapEx being the two main drivers next to FX, a strong position to be in and a position where we continue to build balance sheet strength with more and more liquid funds and a negative net interest-bearing debt.

Overall, that concludes our presentation on what we feel is a very solid quarter, and we're now happy to hand over the word to the moderator and take questions from the participants.

[Operator Instructions] Our first question comes from Thyra Lee, UBS.

I just have two, please. You've done really well on revenues this year. But just given the guide, there's a little bit of an implied slowdown for Q4 at the midpoint. I just want to double check that this is slightly driven by Anesthesia & Patient Monitoring comparatives and that you feel -- you continue to feel good about underlying growth here. And then I'll take the second afterwards.

Yes. So I can comment on the revenue, and nice to have you on the call, and thank you for the question. I will say that you are completely right that when we -- I mean, when we look at the quarters that we have had looking back, the revenue growth has been abnormally high for a couple of quarters due to price increases in Anesthesia & Patient Monitoring, which has, of course, also brought the whole -- I mean, the total revenue growth, as you mentioned, up.

We do think when it comes to endoscopy, we have our long-term guidance is 15% to 20% endoscopy revenue growth. And we do feel that we are comfortable that we land in this with a good mix of continued growth in the segment of urology, ENT and GI, which is where we see the highest growth rates. And then we also see double-digit growth in pulmonology which, coming out of COVID, was a little bit more volatile, but where we are now into the solid double-digit range as well. So it is very much as we look ahead, the Endoscopy business areas that is going to drive our future revenue growth.

Great. That's super clear. And then my second question is while we know there's going to be challenges coming from FX and tariffs, given the strong revenue growth, do you guys think you can still grow margins?

I think overall, the clear answer is yes. I think if you're asking specifically for Q4, obviously, there's still uncertainty. And as I said on the last slide on guidance, what we really wanted to highlight today is that the single biggest uncertainty we have seen so far is FX. Obviously, there's also some impacts from tariffs but they are still limited. So for us, the key thing is to manage the ongoing expansion and, therefore, to answer the second part of your question of do we believe in our long-term margin expansion plan, very much so. There are several mitigating factors that are impacting us and we can maneuver as we go forward. So nothing in what we've seen in Q3 changes our long-term view.

And maybe I should add to that also, I mean, the reason why we feel comfortable around that and also the long-term guidance we have towards an EBIT margin at 20% is that we continue to see opportunities for operational leverage on one hand. And then as we have talked about in the previous quarters, given growth is our key focus, we are also and have in the recent quarter been investing mainly in commercial resources to make sure that we are set up for future growth. And this is something that we, of course, have an opportunity to balance. But we do also want to, I mean, manage the speed of how we get to the 20% EBIT margin in a way that allows us to continue to also invest in long-term growth with also continuing to see benefits from operational leverage.

But as Henrik also alluded to and when he spoke about the guidance, I mean, the FX headwind also does mean that if it continues at the level we are at, one should not expect that we will land in the high end of our EBIT margin guidance. However, we do feel for this year that we should deliver on the guidance that we have set out, which is why we are maintaining that where it is.

Our next question comes from Jesper Ingildsen, DNB Carnegie.

I have two questions. On the endoscopy business, which is now at above 20% margin that you have, could you maybe talk a bit to the competitive dynamics that you called out in Q2 which make you go slightly below that range? What is -- is it driving the improvement relative to Q2? Have you had to lower prices? Or how should we think of this?

And then maybe secondly, on the gross margin. I appreciate that you're calling out FX as the biggest impact on the margin. But you also mentioned the placement of discounted monitor to some extent as it relates to the video laryngoscope launched having put pressure on margins. Could you maybe give us understanding of how much of a drag that has had? And to some extent, going into Q4, I think you previously said that you're going to maybe a place even more monitors in regards to the launch. So how should we think of the gross margin in that context during Q4?

Yes. Thank you, Jesper. And maybe I'll take the first question and then hand over to Henrik for the second one. So it's correct that in the last quarter, when we reported we talked about competition. And this was basically also driven by a lot of questions. And as all of you will know, we were the first to enter into the single-use space and have been alone for many years. And as we have built an attractive category, we started to see competition coming in. So that's also what we wanted to comment on.

What I want to be clear on is a couple of things. One is, as I mentioned in my presentation, we are continuing to see market share increase overall. So we are continuing to see we are strengthening the portfolio. If I then look at the quarter that we exited specifically, we have not seen strong losses or significant losses to competition of any of our customers, and we don't see remarkable losses in the existing sales processes that we are in due to competition nor we see strong price erosion.

So I think overall, we feel -- I mean, we don't want to underestimate competition. So we keep being very alert, but we don't see a lot of effect on our business overall. We, of course, have to remember that our launch into ureteroscopy is the first time we enter a segment where we are not the first. So that's, of course, where we see dynamics being slightly different. However, what we do see as well is that our strong offering being the only one with a broad portfolio in urology that plays on the same software technology with -- or monitor with all the technology and functionality that can benefit customers. We do feel very comfortable that we have a very competitive solution and that we are not seeing any dramatic impact.

The only thing that we have seen is that some of the evaluations that our customers do are slightly longer. So that delays a little bit their decision-making -- the decision-making at customer sides. But that's basically what we have seen. So we are quite comfortable and optimistic, although, I mean -- and we welcome competition as well, I should say, because that's part of helping grow the single-use category, which by having a bigger share of voice, but we are not overly concerned when it comes to our future growth prospects.

Fully agree. And then perhaps building on the last point, I think I also want to reiterate. We talked about last time the potential uncertainty around price erosion. We've seen really good price development and ability, as Britt also referred to, both in pulmonology but also now in urology to sell higher-end products, the Cysto 5 HD, to procedures that are done on the same reimbursement code as our Cysto 4. So the portfolio mix is actually also helping us more and better than we expected.

If we turn to the gross margin question, good question. We highlighted in the last quarter that there could be -- and actually also in quarter 1, that there could be at the end of this financial year, some negative impacts from placement of monitors, particularly related to the launch of our VL solution, where when you're converting a hospital, you typically also want to change the fleet of monitors.

To be very clear on quarter 3, why I called out FX and did not mention monitors is because it had a limited impact for two reasons: one, we see actually a slightly better price on the monitor so far, so it has a smaller commercial impact and had really none or very little in Q3; and two, also when we look forward, we still see a very, very good pipeline. Britt also mentioned it for VL. But we are more optimistic that it will have a lower gross margin impact than we feared before.

So overall, the key message is that FX was and continues to be the biggest drag when we look at the margin development, gross margin and EBIT margin, both for Q3, but also as we look into Q4 and why, again, we feel actually it's a strong statement to keep the EBIT margin guidance at 13% to 15%, even though with what we know today, we will likely not end in the high end of that guidance.

The next question comes from Tobias Berg Nissen, Danske Bank.

I hope you can hear me. So perhaps another question on this competitive dynamic in the U.S. You did mention here in the report in the prepared remarks, but I'm just wondering how is played out over the quarter and if you see any acceleration, deacceleration and how this might have impacted growth? It doesn't sound like a lot so far, but also how you expect this to evolve here going into Q4. That will be my first question.

And perhaps also just on the new products here in urology, limited sales but how should we expect this segment to accelerate going into Q4? And when should we expect this meaning for revenue to come into effect going into next year?

No, I think -- thanks, Tobias. Good questions. And you could say, if we look at the competitive dynamics in the U.S. in the quarter and the period hereafter, you could say. I mean there has, of course, been a lot of external unpredictability in terms of tariffs and so forth. We have not seen an acceleration of competition. We have probably seen slightly more, I mean, the competition going down. So we don't -- I mean, where we were getting nervous if there were high price decreases from competition, we have not really seen that to that extent. It's -- we are, of course, following it closely as we don't have any reports we can read this on. So some of it becomes a little anecdotal.

But given also we can see we are not losing customers. We are not in processes where we have super aggressive competitors on the pricing. We feel quite comfortable. And again, we believe that there will not be significant changes into I mean, the coming quarter. But of course, I mean -- and that's how the nature is in many industries that there will, from time to time, be something coming up in a contract where customers or where competitors go lower on price. But it's not something that we see as more systematic or anything like that. So I think that's good.

On your question on our new solutions, and I guess you speak both to the ureteroscope, the aScope 5 Cysto and the expanded indication, we actually see a very good traction, and we are quite optimistic. I think what we are looking at when it comes to the dynamics is that these are all addressing more complex procedures. So there's a shift in also our selling from more simple procedures that we have been selling to for the aScope 4 Cysto and then with these new solutions. And that's actually working very well, and we are super excited about the positive feedback we get both how our ureteroscope is performing with the customers, but also our aScope 5 Cysto, specifically in the U.S. that there is actually a willingness to pay more even to, in some cases, address some of the same procedures, but with a better solution.

And then with the expansion of the indication with the cysto-nephroscopy -- that I have to rehearse to say, I think we are quite comfortable about, I mean, the growth potential for many years for this. But again, also the sales processes and the nature of how we -- I mean, how our products penetrate, it is longer than you see in some other industries, something that we also commented on in our last quarter by showing how much growth is still coming from products that has -- that have been in the market for a number of years. So I think we are comfortable about also the longer-term growth potential that we have as we bring these solutions out. I hope that answers your question.

Yes, Britt. That's perfectly clear.

Our next question comes from Martin Brenoe, Nordea.

Henrik and Britt, congrats with the quarter. Although I must say I feel a little bit cheated for the opportunity to ask when we will see ex-pulmo rebound above 20% this time, but I'll take it. Just one question. You didn't lose customers. You didn't see price dumps from competition. But the first question would maybe be just how would the run rate have looked like ex-pulmo if you had seen a normal sales cycle? So if you hadn't seen these prolonged processes in the tenders? That's the first question.

And then on the second question, would be great to understand a little bit on the video laryngoscope, giving that some love, given the lack of questions here. Have you -- is it a requirement that you have the full range of blades to be fully commercial ready? Is that the feedback that you have received? Should we expect a pickup now that you have the full range also with the children that you're now addressing? Or is it more sort of just an incremental add-on that you have added here? That's my second question.

Yes. So good questions, and let me try and address this. First, I think what's important or I feel like saying is that when you talk longer sales cycles versus normal sales cycles, I think it's very important that we try not to go down a path where, I mean, it's not normal sales cycles that we are seeing because it's actually very standard and not any changes in that. Some sales cycles, the customer need to buy something new. They put out the specification. They wait a couple of months very much like a tender process, Then you submit. Then they evaluate. And then you win and then you start.

So it's not that there is something that is longer, then you have other customers where you can do a faster sale. And typically, it's the large volumes that takes time. So I think we have to -- and then for the more complex procedures, the evaluation procedure is slightly longer because when something is more difficult, they want to evaluate more and longer. So it's not that there's anything that has come to a complete surprise. But it's just, for us, when we enter to new and more complex procedures, it takes more time to get that ball rolling.

So I think your question, how would it have looked, I don't think it's really possible to answer because I think we are -- we still see the strong potential and the big market that we are going to penetrate. And then we will continue to comment on how are we tracking, how big of flat is that curve. But we do feel comfortable that there's a lot of runway for a very long time, both focused on getting new customers and then growing our share of wallet with the existing customer, which is happening at different pace with different customers. So I think that's how it is.

And that's also where we then add the competitive dynamics so that it's expected, as you also are well aware with competition coming in. And that also helps accelerate both the conversion to single-use and it continues to also support the offering and the benefits that we are making to the customers. So I think that was the first one that I hope I addressed what you asked.

Then on the VL, and your very good question, is it a requirement to have the full range of blades before a customer will buy? And the answer is it's not a clear yes or no. But the answer is, in most cases, it does, the reason being that customers often like to have one video laryngoscope solution that they can use for all the procedures. So if you come in with only some blades and they have to then switch to an alternative system when they have a patient that need different blades that makes it a little more cumbersome. And that's why some will say let me have all the blades.

So then your question is, so now you have all the blades, would we then see a hockey stick effect? And I think that's also where we want to be balanced to say this is a new market we're entering. But with a lot of synergies to the bronchoscopes, we see super strong feedback and also our opportunity pipeline keep building up. But again, the nature of the business we are in, it is gradual. But we are super excited and comfortable around how we are seeing the progress and also relative to the potential in the market what we expect longer term on this product. But I'm not going to be more specific on what to expect when yet.

And I think if I can build just on the last one, and thank you for pointing to the pulmo segment also, where we see really good traction. Martin, I think the key point we also want to convey is besides the VL products, driving new sales, as we also explicitly highlighted in the last quarter, one of the very exciting things there to Britt's point is that it will also drive more aScope 4 and aScope 5 sales because we are converting in settings where typically you use the VL solution in conjunction with the bronchoscope. And in some of these cases, it's not our bronchoscope. So it's the combination of the two. But it will be a gradual increase. You will not suddenly see a massive hockey stick. But we are very comfortable with what we're seeing and the pipeline we are building.

It makes total sense. And just a brief follow-up, which should be yes or no answer to you, Henrik. The Recircle Program, which has now expanded into several markets, we were told by you that we wouldn't see it in the numbers. So the small pickup in distribution costs, I guess that's not related to this Recircle Program. Is that correct?

It's still at so low scale that I think it will require rounding on the numbers to really see. So that's not the driving effect.

Our next question comes from Anchal Verma, JPMorgan.

I have two set of questions, please. The first one, and apologies to pursue a bit further on tariffs. As you now have line of sight into Q4, are you able to provide any rough quantification of what the net tariff impact could be just so we can get kind of our head around how to look at Q4 with FX -- what the FX headwind be and how much is tariff out of that? And also in relation to that, can you give us an update on how your Mexico facility is ramping up? Have you managed to move a few of the Malaysian lines into Mexico? And how should we be thinking of that?

And then the second one is a bit more into next year when we look at 2026. Can you help us build the bridge into 2026 in terms of the tailwinds and headwinds for top line and margins, especially when we think of the top line in the context of the ramp-up of new products, can we potentially expect ex-pulmonology to grow sequentially from 2025? And then on the flip side, on the margins, you will have -- or do you have further investments in OpEx? And how does that sit versus potential headwinds we may see from FX and tariffs?

Good questions. I think I will dive into it. I think if I start with your last point first on next year, we are not commenting today on what happens into next year. I think the main comment I want to reiterate from what I presented earlier is that we feel we have a lot of mitigation actions we can implement in time to mitigate some of the downside risk. And overall, as we've commented both on pulmonology and our urology, ENT, and GI segments combined, for ES, we feel we are seeing really good traction and great pipeline building. So in that sense, we feel very comfortable that we have a good momentum going into next year. But I'm also cautiously then observing what is happening on FX, obviously, and also what is happening on tariffs as that is changing.

I think to come back to your first question on tariffs specifically for Q1 -- sorry, Q4 and Mexico. We don't comment specifically on the next quarter of the tariffs. But I will reiterate that the tariffs, which you are right, that we more or less know now the impact of in Q4, are already included in our EBIT margin forecast and guidance. And that also means that we, within the 13% to 15%, have included what we see right now of tariff impact. The tariffs impact with the slight delay and as also mentioned in the material will impact sales and distribution costs. So part of the increase in that cost item preempting the discussion we will have after next quarter will be a combination of tariffs and then also the continued commercial investments.

So we will not be more specific today, and we will not be more specific on what quantification could look like for next year simply because it's been changing so much that today it doesn't really make sense to give a guidance more specifically. But I will just come back and say with the mitigation effect we have, the gradual improvement in EBIT margin towards the '27-'28 target of 20% is long term not affected by what we are seeing in the market right now, and we feel we have a lot of actions we can take.

Specifically, one of those actions, and thank you for pointing that out, is the ramp-up in Mexico, where we continue that ramp-up. As we said already back actually in Q1 and reiterated in Q2, that is a continuation of a journey we've been on for a long time. I, for a couple of times, have said we are only about 50% utilized if you look at the space. I can happily say we're starting to pass beyond the 50%, but I will not be much more explicit than that at this stage.

But we are really happy that the Mexico factory, as we talked about in Q2, is now at an output and efficiency level that's comparable with the other factories, and that means that we can produce and do final manufacturing of a product in Mexico, ship it to U.S. and at a landed cost basis, it's the same cost, excluding tariffs, as if we produce it in other place in the world, one; and two, we are also increasing the capability level, enabling us in Mexico to do more and more complex products. So it's a gradual journey. We are not going to be more specific than that, but this is one obviously of the key levers of why we think we can mitigate the tariffs quite a bit with our Mexico factory.

And again, maybe just a quick add on to that last point. If we look at the revenue that is generated in the U.S. today, more than half of that is from products that are either manufactured in the U.S. or in Mexico. So that puts us already in a solid position, too.

Absolutely.

Perfect. And maybe if I can squeeze in a last one. I'll see if I can get an answer on this, and I don't want to steal your thunder from the CMD. But what can we -- can you give us a rough outline of what we can expect at the CMD? Will you be revisiting your midterm target? Or perhaps is it more of an opportunity to provide an update on the new product launches?

Yes. So I think what you can expect, and good question, Anchal, and we look forward on to seeing you there. What you can expect from us is it is an update, of course, on the business and the launches, but also an update on our strategy where -- and that includes, of course, both business priorities. And also we will comment on our financial -- long-term financial targets as well.

[Operator Instructions] Our next question comes from Yiwei Zhou from SEB.

It's Yiwei from SEB. Firstly, on the -- I just want to follow up on the EBIT margin guidance. And I would like to ask in a different way. Just to be more specific, I mean, you kept your EBIT margin guidance, which imply it is a 10% to 18% range for Q4. But when we consider your gross margin for Q3 and also the OpEx level, isn't the lower end of the guidance range is more realistic? I'm actually a bit surprised that you have not removed the 15% EBIT margin scenario for the full year. Could you please help me to understand some of your assumptions? Yes.

Absolutely. So I can start with that. So I think, for us, there are two key points to highlight, Wei. There are still obviously potential upside from some of the external factors, particularly FX. I think the volatility, particularly in the U.S. dollars has been unprecedented in the last couple of months. So I think that could be one of the external factors that drives beyond us delivering obviously, a very solid sales for the quarter.

I think besides that I -- we're at least trying to and I will reiterate the point that we are also saying with what we know today, there is low likelihood that we ended in the upper range of the range you just also calculated yourself on what Q4 could look like, which is a different way of saying with what we know today, obviously, there's a higher likelihood that we end in a lower range of the EBIT margin. We feel still if we separate out the external factors that this is a very good result.

Why are we not changing it? Well, if we look at the proceedings for the market, it's very few that even in Q4 narrowed the EBIT range to a 1 percentage point. So for us, it's more been to say if we're within the guidance and feel safely we are, even though it might not be in the upper range, we keep it. So that is more us trying to not set the proceedings where we have to be very, very specific on the guidance in every Q4 -- or Q3, sorry, every year.

Okay. In this context, I just want to also follow up on this mitigation initiatives towards the tariff impact. Should we see some of those initiatives start to already benefit or materialize in Q4? Or it will be more next year?

So it's actually a combination of things that have already been done and are already showing in numbers, which is also one of the reasons why we're saying it's a very minimal impact. Note that the whole structural level of tariffs has been increased both for China but also for the rest of the world by quite a bit and not something you're really seeing in the numbers if you adjust for FX. So that's one. And a number of those things are also in our supply chain, particularly the Mexico ramp up, as we said.

We have more we can do on the operational front that is in the making right now and also things that we're preparing for going forward. I think really it comes back to what we communicated in our Q1, which is our main priority remains to serve our customers in the best possible way and to drive the organic growth. And even if that comes at a slight expense of slightly higher inventory or that we need to hold inventory in 2 manufacturing sites as we are ramping up in Mexico, then that is the key priority. And we still have a lot more we can do, particularly as we said now, as Mexico is performing well, and so is our U.S. factory, not to forget.

So we feel we have a lot of things we can do and maneuver, but we're not in the game of doing things short term. And at this stage, we are only for selected products, particular products coming out of China directly, adjusting prices. Otherwise, we're not doing broad-based price adjustments.

Okay. Very clear. And my next question is actually on the Patient Monitoring, 9% growth in the quarter on top of 11% last year is quite impressive. But I still got an impression that it would be low single digit for this quarter. Was there a benefit from any like phasing of large orders? And what we should expect for the coming quarter?

I think how you should look at these businesses, I mean, if we look at patient monitoring specifically, I mean, it's overall a market that continues to also have some strong under -- I mean, not strong, but fairly strong, I would say, underlying market growth. So it's basically -- I mean -- and then you can say the combination of a good growing market, a competitive product portfolio. And then there is some timing on orders that I think is where you should not pay too much attention to the quarter-over-quarter because there will be -- I mean, we are running the business when there's a demand from the customers, not trying to balance across quarters. But still, I mean, it is actually quite an attractive business with, I mean, again, a competitive product portfolio that we have. So that's where we are. But it's not a business, as we have talked about before, where we are investing heavily or doing something different. So that's also why, I mean, we stick to the guidance for now that we put out our long-term guidance for both Anesthesia & Patient Monitoring businesses combined.

Okay. Can you -- is it possible to provide a soft guidance for Q4 then?

No, we will not. Thank you for asking the question, but no, we will not.

All right. Fair enough. And my last question on the -- actually the video laryngoscope launch. You have talked about very good feedback from the customers. But in your view, what is the key selling point as compared to the competition like Verathon and even some of the Chinese competitors? I mean, I understand you are being -- you have this one platform, which is benefiting you quite a lot. And besides this, anything else you want to highlight?

Yes. I think that's a very good question, Wei. I think there's a number of factors that the customers are highlighting, I think, the whole -- one thing that stands out is, of course, what we are talking about the flexibility and how it works with the portfolio where we both have the aScope 4 and the aScope 5. So we -- and the different sizes of the scope. So we actually have a very complete portfolio that helps. And we are -- this is so far only launched in U.S. and U.K. And if we look to U.S., that large market, a lot of the hospitals will have problems with space and so on. So the fact that they can put everything on one system is a benefit.

I think then to go into the specifics, the two things that we get a lot of positive feedback on is, number one, very much on top of that solution, image quality. The image is super sharp and it enables them to do the procedure. That's where we get feedback, anecdotal still. We don't have a clinical study on this around the image quality. And then it's also around some of the software functionality that we have supporting the product that is addressing a lot of the needs with the customers.

Agreed. If I may follow up also on this, could you maybe indicate a bit on the contribution margin or gross margin for this product? I actually got impression that in the beginning, it was a very low-priced product and the margin could be lower. And then I think the -- your previous communication that it was more in line with the rest of the business. But when I speak to your competitors recently, what they indicated is even though they are paying a higher tariff today, the margin is actually very high for this product for the -- even the price is so low.

It's a great question, Wei, and I think we will also feed it back to our U.S. sales colleagues who are -- with whom we are debating what is the right way to price it. But we share the view, and I think that's also what I alluded to a little bit that we have previously said we were expecting some margin dilution, particularly in the early phase. So you're correctly referring to particularly what I said in the last quarter, when we convert hospital systems with a lot of monitors. I think what we're seeing right now that there is a positive reception for the customers also to pay for some of the initial upfront installments of equipment.

I think that said, for us, it's important to say it is still a full portfolio view we take on the gross margin impact. And that means that for a customer where we convert to our VL solution, when we also sell more aScope 4 and 5, it is certainly a very gross margin accretive business. But if you start separating the 2, it could be in the very short term, initially a slight dilution. And then as you sell more blades and more scopes, an increase again in gross margin. So I think that is what we try to allude to. And with your point here on the market -- other market participants, I think that's actually also what we're seeing a slight positive -- more positive reaction to the cost of the capital equipment and our ability to price that also in the initial offerings.

Yes. But as Henrik is also alluding to scale, as we have seen with our endoscopes where we have scale driving, I mean, very good costs on our products. We will see the same over time. We're still in the early phase. But we are quite confident in that we have a good setup here and not commenting on the specific margins of our solutions.

Our next question is a follow-up question from Tobias Berg Nissen, Danske Bank.

I just have two fast ones. Just on gross margin, Henrik, perhaps I missed it. But what should we see in terms of expected trajectory here also going into next year given you face these multiple headwinds, especially from the U.S. dollar, and your current assumption of the dollar/krone at least DKK 6.75 here for the full year.

And then just for Britt also, you make this change in the U.S. or North America. What will be Scott's strategic priorities here when he starts, also like driving penetration for urology, but also in terms of your setting a new GI strategy, we will hopefully hear more about him at the CMD.

And maybe I'll comment on the last one. So we will obviously share a strategy update at the Capital Markets Day, October 1. So I'll comment on that. But basically, again, I think it's -- as I said in my presentation, Scott comes in with really a very relevant background in medtech and has seen both from smaller and larger companies how to operate. So I think it's just a natural progression in where we are again after Steve has been successfully run the business for 12 years.

So it's -- I mean, I think you will, to a large extent, see a continuous focus on how is it that we deliver growth based on the big potential that we still have in the U.S. in the existing segments that we are in, I mean, there's still a lot to go after. So we are not necessarily looking to bring someone in that can, I mean, go take the next steps. We'll come back on -- again on the Capital Markets Day and talk about how we see that. But very much in the businesses that we are in with the new launches that we have had, we see plenty of opportunity to really accelerate and continue to grow strongly. And that's really where I think he has a very solid background to do that together with an organization that is performing very well already. So I do feel it's a perfect time to actually make that change because we have a solid team and some really strong colleagues in our North America organization.

Fully agree. And I think turning back to the gross margin and FX question, I think, Tobias, the 2 key things to note is we have our sales mainly in U.S. dollar, as we also explained. And therefore, we will see an impact on the reported revenue from a continuation of the current low dollar level. And I think you and your colleagues are, as you say, forecasting a continuation of this or even some of the banks are now also forecasting a further depreciation.

As we also said, if you look at the mid- to long term, then we have a natural hedge from the fact that we have a very big part of our cost base in China and in Malaysia. And that means that if you look at the longer run, there's not a significant effect from FX because a lot of this can be mitigated. But we are deliberately not hedging any equity impact from this. And therefore, when you have, like we had in Q3, a significant depreciation within a quarter that happened very fast, then obviously, that has a higher impact in that quarter. As long as it's more stable over time, it's less of an impact quarter-over-quarter.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Britt Meelby Jensen for closing remarks.

Thank you very much, and thanks for joining today's earnings call and also for the great questions. I do hope to see most of you in our headquarter in Ballerup, Copenhagen on October 1, where we will host our Capital Market Day. Please remember to sign up and hopefully see you there.

Thank you. Have a great Friday and a great weekend.