Okay, good morning, everybody. Thank you for joining us here in Berlin for our annual results conference for the fiscal year '23, '24.

I'm Sebastian. I'm the Head of Investor Relations.

Thanks, everybody, for coming here from different regions of the world from our analysts and shareholder base. We really appreciate spending this conference with you.

Quick organizational comments and then we can go into the presentation: maybe the WiFi for us because the WiFi from the guest rooms, for those who have stayed in the hotel, is quite bad down here, so please use this one in the meeting room. The password is conferences2023.

On today's agenda. We are planning to spend a maximum of 90 minutes or so on the results presentation and Q&A together with our Board of Management, who will present to you very shortly.

And then we'll have a lunch break. And after that, we'll take you -- at a little bit afternoon, we'll take you to the Carl Zeiss Meditec facilities in Charlottenburg, which is I think 15, 20 minutes from here or so.

We'll have some taxis waiting that will take you there. We don't get back to the hotel, so for those who have been staying at the hotel, please take your belongings with you.

Or do calculate you may have to go back, in case, on your own. At 12:45 or so, 1 p.m., we'll arrive at the biotech park where Carl Zeiss Meditec is located, in Charlottenburg.

And there we'll have the afternoon session, which we will not broadcast live. This is about for you to get some learnings in -- about our products.

We'll talk about IOLs. We'll talk about the cataract workflow.

We'll even do a wet lab surgery, so for those of you aspiring to be ophthalmic surgeons one day, you can have a first go at it without damaging anything, without breaking anything. It's really going to be really fun to have you here, also to see the production in Berlin.

And I hope you will spend a good day and it will be worth your while for traveling out here. So with no further ado, I'll hand over to you, Markus, to give it a go at our annual results.

Yes. Thank you so much, Sebastian.

And also a very, very warm welcome to all of you not only in the net but especially here in Berlin. Actually we are looking very forward to welcoming you then at the site.

I think there will be quite interesting insights for you. It's one of our most modern production sites here globally.

And we have also Frank Seitzinger, who is the business sector head, with us, so there will be also the opportunity for you maybe during the lunch break to have already a first chat and to understand: What are the current opportunities when it comes to the cataract workflow and the activities there? So with this, a very warm welcome again.

And good morning, ladies and gentlemen. Welcome to the fiscal year '23, '24 analyst conference of Carl Zeiss Meditec AG.

Let's have a brief look, as usual, at our agenda. First, I will begin with an overview of the group results.

Then Justus will provide more insights into the financials. Following that, we would like to share some key highlights of the fiscal year with you, including updates on new products, key topics around China and also especially our resilience measures.

Finally, I will update you on the outlook for the fiscal year '24, '25 [indiscernible] as usual, following this, there will be then a rich Q&A session. So with this, let's get started.

And overall, fiscal year '23, '24 was a pretty challenging year for both on revenues and profit. The headwinds were mainly driven by a very restrictive investment climate in the equipment markets and weaker consumer sentiments in elective procedures which is for refractive surgery.

Since last earnings call after 9 months, the market environment has barely seen any improvement against expectations. The DORC has been consolidated in H2.

Please note that the reported numbers all include DORC in the slides. So on revenue.

Fiscal year '23, '24 was slightly down, minus 1.1% to EUR 2.066 billion. Adjusted for currency effects, it was almost unchanged.

Currency headwinds mostly came from RMB, U.S. dollar and Japanese yen.

DORC contributed EUR 100 million revenue in H2. Excluding DORC, the organic revenue was EUR 1.966 billion, down by minus 5.9% year-on-year.

The restrictive investment climate continued to put pressure on equipment sales, most pronounced in North America, alongside some core markets in Europe. Despite a moderate interest rate cut, we haven't yet seen a clear inflection point in demand.

Underlying consumables are also weaker year-on-year primarily due to a slowdown in refractive treatment pack sales in China following its destocking, what we have announced in H1. Additionally, hospital utilization slightly declined in summer season.

Moreover, IOL volume-based procurement has added pressure despite solid volume growth, revenue and profit having contacted -- contracted due to significant price cuts. We will address both topics around China in more detail later.

And with this, I would like to go to the whole year's order entry, which was above -- 2.8% above last year; at constant currency, at plus 3.9%. Excluding DORC, order entry was still minus 2.5% below last year.

Order entry has gradually been improving throughout the last few months, and in Q4, it turned positive year-on-year. After DORC consolidation, recurring revenue has further expanded to 47%, up from 43% a year ago.

Reported EBIT amounted to EUR 195 million, a significant minus 44% decline year-on-year. EBIT margin was 9.4% and down from 16.7% last year.

The adjusted EBIT amounted to EUR 246 million, well within the guided range we gave you in June of this year. Adjusted EBIT margin was 12.5%, significantly below previous year's 17.4%.

So the main reason for the decline in EBIT were the lower organic revenue trend as well as an unfavorable product mix, especially lower sales of refractive treatment packs; and within the equipment category, a weaker contribution from Microsurgery. Some special items heavily further reduced reported EBIT, including effects resulting from the DORC acquisition; as well as an impairment on the book value of intangible assets from CTI or, as it was previously called, IanTECH acquisition.

Despite this, strict cost control has shown first results already. OpEx excluding DORC finished this year slightly lower.

Resilience measures will continue into fiscal year '24, '25. Our net income dropped by minus 38% from EUR 290 million in the prior year to EUR 179 million due to lower EBIT, weaker financial results with reduced FX hedging contribution and higher interest expense in the reporting period.

As a result, earnings per share dropped to EUR 2.01. Now I would like to hand over to Justus, who will provide you with more background and will discuss the SBU figures in more depth.

Thank you, Markus. And also welcome, from my side, to all of you here in the room and everybody who has connected and dialed in to us.

So I'm now going to give you a more detailed overview of our financials, starting with the performance of SBU Ophthalmology. Revenue of OPT slightly increased by 0.8% to EUR 1.589 billion.

At cross -- at constant currency, it indeed increased by plus 1.8% to EUR 1.605 billion. The number contains DORC revenue of EUR 100 million.

Excluding DORC, revenue of OPT dropped around minus 4% to EUR 1.489 billion currency and acquisition adjusted. Underlying top line contraction was reflected in both equipment and consumables.

In equipment, the decline was most notable in the diagnostics and ophthalmic microscope categories, particularly in North America. With consumables, the completion of refractive consumables destocking in the Chinese sales channel, weaker refractive consumables consumption in the summer peak season as well as price loss caused by volume-based procurement of IOLs are main drivers of the softness.

We are making further progress in the expansion of the installed base of VisuMax. More on this later in the highlights section of this presentation.

On the costs side, underlying OpEx saw a slight decrease. However, due to the revenue softness, OpEx ratios remained elevated despite significant cost containment measures.

Additionally, some DORC-related acquisition effects and CTI impairment placed significant pressure on reported EBIT. Regarding DORC.

There were significant negative effects pertaining to the opening balance sheet and the PPA process. I will go through them later when presenting our adjusted EBIT.

The local EBIT contribution from DORC was around EUR 9 million, corresponding to a 9% EBIT margin. As discussed with our Q2 -- Q3 '23, '24 results, this level is somewhat artificially reduced because we have to continue depreciating certain capitalized R&D that remains on DORC's balance sheet, which has reduced local earnings by EUR 3 million in H2 '23, '24.

On a comparable basis, the EBIT margin of DORC would have been around 12% instead of those 9%. We expect stand-alone profitability of DORC to increase significantly into the at least mid- to high teens in the coming years as our integration measures begin to kick in.

However, as DORC will be more closely integrated into OPT, reporting its detailed financial performance only makes limited sense. We will continue to comment qualitatively on DORC integration, of course.

Regarding CTI. We are happy to have launched the MICOR 700 product at the American Academy of Ophthalmology congress in Chicago in October.

MICOR 700 is a differentiated instrument that can be an alternative to traditional phacoemulsification. While this product is a key launch for us and will strengthen our competitiveness in the cataract market in the U.S., we have adopted a more conservative business outlook due to learnings from a pilot launch performed early in 2024, which impacted the carrying value of some of the intangible assets from the acquisition.

The overall impact on EBIT was EUR 31.5 million, with a roughly equal offset booked in net income as we also devalued the corresponding contingent purchase price liabilities. All in all, EBIT margin for the SBU OPT substantially dropped by minus 7.5 percentage points to 6.3%.

Ophthalmology accounted for 77% of the group's total revenue. Within Ophthalmology, the recurring revenue accounted for 56%.

DORC consolidation has contributed to growth in the recurring revenue share. Microsurgery sales were under pressure in '23, '24, caused by the continued investment reluctance in the market.

Top line dropped by minus 7% to EUR 477 million; at constant currency, 5.6% -- minus 5.6%. The neurosurgery business faced the strongest headwinds.

High financing costs particularly impacted [ leverage ] private hospitals. These challenges were most pronounced in North America.

In Europe, markets such as Germany and France experienced slower-than-usual order intake patterns driven by political and regulatory uncertainties in the health care systems. With the passing of health care reform in Germany and the first step to a lower interest rate environment in the U.S., some of these factors have been slightly easing recently.

We have seen a stabilization in our order intake throughout the summer month already. As announced on September 30, the neurosurgical microscope KINEVO 900 S has now been launched in Europe and in the U.S.

Markus will provide more details about the new KINEVO later. Order entry in Q4 turned positive for the first time during fiscal year '23, '24.

As a consequence of the negative top line trend, both gross margin and EBIT margin fell despite a flat OpEx development. EBIT margin dropped by minus 5.5 percentage points to 19.7%.

MCS accounted for 23% of the group's total revenue. Within MCS, the recurring revenue accounted for 17%.

Let's look at the regions. By regions, EMEA demonstrated good top line growth, while Americas and Asia Pacific were both under pressure.

Americas noted sales of EUR 533 million, a drop of minus 7%; at constant currency, minus 5%. The business is still largely held back by the high interest rate and difficult financing environment.

Order entry has gradually stabilized throughout the year. In EMEA, we noted revenues of EUR 584 million, an increase as reported of plus 13%; at constant currency, plus 14%.

Core markets such as France, Italy and Spain continued showing strong sales and benefited from backlog deliveries. Order entry in France and Germany in particular did weaken, however, over the past few months due most likely to some political and regulatory uncertainty in the health care system.

In Asia Pacific, we noted revenues of EUR 949 million, dropped by minus 5%; or at constant currency, minus 4%. Southeast Asia, India and Australia contributed to a robust performance.

China, including Hong Kong, moved sideways as a consequence of weaker consumable sales. Japan and South Korea reported lower sales as well.

So let's have a look at the P&L lines. Gross margin, with 52.7%, was 5 percentage points below previous year's level due to CTI impairment in the cost of goods; negative operating leverage; unfavorable product mix, including lower refractive consumables and volume-based purchase-related price cuts in our IOLs; as well as FX headwinds, mainly from RMB, U.S.

dollar and Japanese yen. OpEx excluding DORC consolidation and DORC integration costs was slightly down in absolute terms by around EUR 10 million year-over-year due to strict cost control measures.

I will talk more about cost control measures a bit later in the presentation. OpEx ratios remained elevated due to the revenue weakness.

Consequently, reported EBIT of EUR 194 million was significantly below previous year's level of EUR 348 million. EBIT margin was 9.4%, behind previous year's 16.7%.

In the light of the DORC acquisition, EBITA and EBITA margin will be key indicators for future reporting. Therefore, in this table, I'd like to walk you through all adjustments in order to provide a fair comparison for the upcoming years.

The noncash amortization charges on M&A contain the earlier acquisitions such as IanTECH, Katalyst and Kogent; as well as the DORC PPA charge; and the CTI impairment of EUR 3.15 million (sic) [ EUR 31.5 million ]. After adjustments, EBITA for '23, '24 was EUR 249 million at an EBITA margin of 12%.

For adjusted EBIT '23, '24, we additionally factored out the Topcon one-off payment, the DORC-related integration and inventory step-up effects as well as the DORC local EBIT contribution. This resulted in EUR 246 million, well within the previously guided range, with an adjusted EBIT margin of 12.5%.

Looking at DORC more in detail. There were a number of special effects.

In Q4, our regular amortization from the purchase price allocation started with a value of EUR 13 million for H2 '23, '24 on the intangible assets identified in the DORC opening balance sheet. In fiscal year '24, '25, we expect regular amortization of around EUR 26 million per year to continue on a yearly basis for a bit more than a decade.

In addition, there were significant negative impacts from the revaluation of inventories in the DORC opening balance sheet. The step-up in value reduced H2 '23, '24 earnings by around EUR 8 million.

Lastly, we had around EUR 16 million in integration expenses, mainly from closing the transaction and certain post-merger integration expenses. The total of the integration expenses and inventory step-up therefore reached around EUR 24 million.

And now a quick overview on the cash flow statement. Operating cash flow remains stable at EUR 247 million, previous year EUR 251 million.

Despite a lower operating result, more efficient working capital management has largely offset the decline. Key contributors include reductions in both inventories and accounts receivable.

Investing cash flow has been significantly reduced, mainly driven by the DORC acquisition and higher CapEx. The CapEx ratio was around 7.4%, up 2 percentage points versus last year, reflecting investments in expansion projects in our consumables production, such as La Rochelle, Guangzhou and Katalyst sites; as well as increased R&D capitalization.

In the new fiscal year, the projected CapEx ratio, both tangible and intangible, is expected to be reduced to 5% to 6%. Change in financing cash flow was mainly due to issuance of shareholder loan and share buyback.

Net liquidity was at EUR 73 million and refinanced through the ZEISS Group treasury. Net financial debt, including the shareholder loan from ZEISS, was at minus EUR 327 million.

And now let's move to the key highlights. I'll start with the first topic, our resilience initiatives.

And then Markus will share the progress of our new products and innovations and address the most discussed topics around China. Earlier in the fiscal year, I updated you on our resilience measures designed to improve our cost position and slow down the expense growth.

Despite suffering an earnings decline in '23, '24, we evaluate the resilience measures implemented, so far, as successful. Let me elaborate on this by presenting a longer-term view.

The chart shows the quarterly OpEx trend since 2018, '19 on a rolling 12-month average. The COVID period in '19, '20 and 2021 has been excluded, as OpEx were not representative in that period.

Also, in recent months, all effects related to DORC such as consolidated costs of DORC and integration expenses are adjusted out. In '21, '22, as we emerged from the pandemic, our investments picked up speed.

Peak growth was reached in Q4 of '21, '22 when expenses grew by almost 30% against the pre-COVID year. When markets began to slow down in fiscal year [ '23, '23 ], we adjusted our spending to bring down the rate of inflation.

Shortages in the labor market and significant materials inflation, which affected just about every position in the P&L, continued to put pressure on our expenses. The recent Q4 '23, '24 was an important milestone, as we returned to a slightly declining year-over-year OpEx trend for the first time in many years, with comparable OpEx down by around EUR 10 million.

Initially, planned spending was reduced by nearly EUR 100 million to protect earnings given the unexpected weakness in our top line and gross profit line in '23, '24. This required some heavy lifting as we tried to slow down the expense growth by freezing budgets and head counts as well as reprioritizing R&D projects and sales and marketing initiatives, all the while trying to avoid any damage as possible to our future growth and competitiveness.

With our resilience measures, we are, however, not only following tactical short-term goals in protecting our profitability but also pursuing longer-term transformation initiatives. As briefly described already in previous calls, we are reviewing our business case prioritization, aimed at improving focus and productivity while defunding some weaker investment cases in our portfolio.

In the area of commercial excellence, we are reviewing our go-to-market strategies for key products and ways to raise sales productivity as well as implement new models such as bundling and providing workflow solutions as a service. In the field of innovation excellence, we are reviewing our R&D road map and prioritizing the strongest cases while introducing additional metrics and challenges to make sure our budgets are spent in the most productive possible way.

Lastly, we are working on our manufacturing footprint, supplier network and overall capacity position as part of a COGS down project. Following a tough period in the global supply chains during the back half of the pandemic, when the key goal was continuity of supply, as well as the painful but necessary decoupling from an established supply route impacted by the Russian war against Ukraine, we ended up in a situation with too much capacity and costs that are too high.

We are now beginning to renegotiate supplier conditions and streamline our capacities by using the existing flexibility of the organization. I'm happy to report that our teams are showing great spirit in handling the situation.

And we have not had an increase in employee or middle management turnover despite some tough decisions. For '24, '25, our goal is to keep expenses roughly flat before taking into account the DORC-related effects.

Should markets get worse from here, we have already identified additional savings potentials in the low to mid-double-digit million range to safeguard earnings from here. Other than last fiscal year, when our forward guidance was heavily dependent on top line growth and we got hit severely not only by destocking in the sales channel but also by weakening equipment and consumables demand, we are in an improved position to work on the cost base to protect the downside to earnings should markets turn further south.

And with that, let me pass it on to Markus really -- real quick here for an organizational announcement at this point.

Thank you. Thank you so much, Justus.

And yes, let's get started with the innovations. So I'm happy to introduce the new KINEVO 900 S, which we have just launched at the beginning of the fiscal year.

We are planning to roll it out in our key U.S. and European markets as well as Japan in the coming year.

So compared to the old KINEVO, it provides the best digital visualization quality to date and features AI-based robotic auto-centering and voice control features. Additional Kogent electrosurgical instruments can be connected with this device, providing enhanced value to the clinical workflow.

So let's watch briefly a video which showcases the advancements of this product. [Presentation]

So global cancer burden is expected to rise by 47% from 2020 to 2040, so the next 20 years. The brain is especially exposed.

20% to 40% of all cancer patients develop secondary tumors in the brain. So as a strong anchor product, this new visualization system will help us to build workflow solutions improving clinical outcome and an efficiency for sustainable and profitable growth.

AI is not only adopted in our devices, as we just learned about the AI-based robotic auto-centering technology in the KINEVO 900 S, but it is also broadly used in our software solutions. I'm excited to introduce 2 latest AI-driven technologies within the ZEISS cataract and retinal workflows: AI IOL Calculator and AI-powered CIRRUS Pathfinder.

So the AI IOL Calculator is a data-driven IOL-powered calculation algorithm and is a core feature of the ZEISS cataract workflow. It is optimized with a large amount of data for each IOL model it supports and therefore does not require IOL constants.

When applied to short eyes, it has shown great performance and outperformed state-of-the-art formulas. The AI IOL Calculator is available in our digital surgery planning software.

It's also compatible with the ZEISS IOLMaster. As an example of the company's digital diagnostic OCT dealership, CIRRUS Pathfinder is a fully integrated AI decision support tool that uses proprietary deep learning algorithms trained by retina specialists to automatically identify abnormal macular OCTP scans, assisting with presurgical assessments of the retina and optimizing outcomes.

So ZEISS CIRRUS Pathfinder will be available in selected markets, subject to local regulatory clearances, and is currently pending CE mark. Both solutions highlight how digital technologies within the ZEISS medical ecosystem are continuing to set the pace for clinical workflow innovation and foretelling how AI technology will support more personalized patient care in the future.

So I'm thrilled to share, this year, SMILE reached its incredible milestone of 10 million eyes treated cumulatively. Now our global installed base has surpassed 2,300 devices.

Building on this success, we have been working on further advancements in technologies with the VISUMAX 800. A key achievement is that surgeons can now treat hyperopia with or without astigmatism [ with SMILE ].

Clinical studies confirm that SMILE is an effective treatment method for the correction of compound hyperopic astigmatism, demonstrating a high level of efficacy, predictability, safety and stability. Now let's hear directly from surgeons.

[Presentation]

Yes. Now let me spend some time on the Chinese refractive market and the new and challenging situation we have been dealing with over the past couple of years.

So China constitutes 26% of our group revenue currently. It is not only the largest market by revenue but also have an above-average share of profitability, so -- the main reason being a higher proportion of refractive business and product mix compared to other regions.

Starting out with some macroeconomic indicators. Retail sales and consumer confidence have been under enormous pressure since their peak in 2021, and the environment has deteriorated recently.

The erosion of residential property values; as well as high youth unemployment, particularly among young academics, has taken a lot of momentum out of the refractive market. All that being said, our competitive position in China remains excellent.

Our installed base has roughly doubled in the last 5 years to more than 1,000 VisuMax devices even right before the launch of VISUMAX 800. A bit more than 15% of these lasers are already at least 8 years old.

These are good candidates for speedy replacement with the launch of our new product. With the majority of our installed base at private clinics, we believe our consumers will be eager to equip -- our customers will be eager to equip themselves with these new technologies, which gives them a new premium technology to showcase and attract customers, this in an otherwise difficult market.

Our market share in China has grown throughout this difficult environment and now stands at more than 50% of the market. Market data in China is difficult to obtain.

Through our large installed base and utilization data as well as [ presence ] in most private clinics, we have one of the best data sets internally available to evaluate the market in its entirety. While we prefer to keep some of that knowledge to ourselves for competitive reasons, we can confidently say that most public market research as well as statements by some competitors tend to understate the market size and thereby overstate their own respective market shares.

We believe the Chinese markets generate close to 3 million refractive procedures on a year basis currently. ZEISS' volumes have doubled roughly in line with the installed base.

So in '23, '24, as we moved into the summer main season, we saw that utilization per laser began to decline more strongly. As we enter the new year, that weakness continues.

We are also seeing a trading-down impact with more LASIK procedures and less SMILE on our machines. However, with about 30% of our procedures being LASIK now, China continues to be a SMILE-leaning market overall.

While ASPs have remained relatively steady for our consumables, so far, given the current environment, we will need the launch of the VISUMAX 800 to secure attractive pricing going forward as well. We are currently in intense discussions with the regulators and continue to look at potential launch scenarios from VISUMAX 800 in H2 '23, '24.

We will update you with more precise timing information as soon as possible. So longer term, let me reiterate the big picture on China.

Myopia prevalence is extremely high. Among our key target group of young academics, it reaches up to 90%.

Procedure rates across the general population remain a fraction of Western markets. However, price declines in the hospital rates since the consumers recession began have made a treatment more affordable.

SMILE is seen as the preferred solution for most patients. We cover the entire treatment spectrum, with the only exceptions -- exception of ICLs, which have an attractive niche position for high myopes but are not represented across the spectrum where most myopia patients are.

Over the midterm, we expect more competition to emerge in China from the likes of [ G&G ], so -- and SCHWIND, whose devices we already know from other markets; as well as potentially, at some point, from local competitors. We are confident the power of 10 million safely and effectively treated eyes will give us a durable edge in customer confidence, while the launch of the new VISUMAX 800 platform will give us additional technology lead over some of these potential future competitors.

So let's stay in China and now talk about the IOL business. Our IOL business in China is in strong shape.

We have grown at 20% CAGR over the past 5 years and added market share despite the emergence of some local competitors. Our product offering is broad-based across categories.

We are leading the market for trifocal IOLs by a considerable margin. Our overall market share is mid-teens percentage in China, [ handily ] exceeding our global average in IOL business of between 7% to 8%.

So following the introduction of nationwide volume-based procurement, prices dropped by more than 40% across our portfolio in '23, '24. We adopted a deliberate strategy of keeping the price point for our trifocals at an attractive level and reduce that price by less than 20%.

Following these harsh price cuts, along with heavy reductions in the distributor margins as well, premium IOLs have now become considerably more affordable, with copayments for patients dropping sometimes as much as half the previous level. It has already become clear in the final months of '23, '24 that volumes would jump and we finish the year with growth of around 30% in volume and a higher-than-ever premium or presbyopia correcting share in our product mix.

We expect the trend to continue in '24, '25 and for IOLs to have a good year now following the price reset. Here as well, keep an eye on the long-term outlook for China.

With slightly less than 5 million eyes treated with IOLs, China is performing less cataract surgeries today than the U.S. despite having more than 4x the population.

ZEISS enjoys an excellent positions with incredible brand power appealing to private clinics and middle-class consumers; a well-diversified customer base; and an extensive product portfolio, including clear lens exchange and PRESBYOND options. While, increasingly, capable local companies are advancing into the premium segment, the overall market continues to be extremely attractive for us and promise very good momentum for years to come.

Finally, I would like to provide our outlook on fiscal year '24, '25. So for '24, '25, we anticipate a challenging global macroeconomic environment to persist.

There's no quick recovery expected in investment climate for equipment and continued pressure on consumer spending for elective procedures, so in particular, for '24, '25, we expect revenue to return to moderate growth, driven by the stabilization of recent order intake and full year consolidation of DORC. The amount of organic growth will depend heavily on macro conditions.

As we move through the start of the year and particularly the Chinese winter peak season, we will be able to provide a more precise guidance on revenue. EBITA and EBITA margin will develop stable to slightly higher compared to the prior year.

Cost containment measures will remain in place to maintain a maximum sideways trend in expenses before the impact of DORC's full year consolidation. As discussed, we have identified additional saving potentials as downside protection if markets were to deteriorate from here.

New product launches, including the KINEVO 900 S and potential additional VISUMAX 800 approvals, especially in the U.S. and in China, provide upsides potential depending on the timing of approvals and the speed of ramp-up.

The same goes for potential China and other local stimulus packages out of public funding, be it for the consumer or the med tech industry. To be precise: We have deliberately set out a conservative guiding -- guidance excluding most of the new product launch potential wherever registration have not yet been secured.

While the new product carries significant promise for us and the strategic value cannot be overestimated, regulatory timing is highly uncertain. And we do not want to be -- to tie our forecast too closely to approvals such as VISUMAX 800 in U.S.

or China as well as KINEVO 900 S in Japan. We will keep you updated as we move throughout the year.

For the long term, a gradual EBITA margin increase is targeted in subsequent years, supported by growth in recurring revenue streams. Sustainable potential for the EBITA margin is seen in the range of at least 16% to 20%.

Lastly, a word of caution on the phasing of our progress this year. The dynamics around the new product cycle in Microsurgery as well as high dependence on equipment revenue from China in the early months of the year will likely cause a weak start into new -- into the new fiscal year, both in revenue and EBITA.

Equipment sales in China are under pressure currently as clinics are waiting for the details of the stimulus to emerge. While the refractive destocking happened a year ago, most of the impact took place in Q2 and not in Q1, due to seasonality.

Q1 is more an equipment-heavy quarter. The strong backlog of equipment we still had at the outset of the past fiscal year presents us actually with very challenging comps.

For these reasons, we expect revenues and earnings to be down for the December period year-on-year. A rebound is then likely in Q2 as we compare against the intense destocking period in the prior year.

And the base for comparison gets consecutively easier into Q3 [ and Q4 ]. With this, I thank you for your attention.

And now we look forward to your questions. Thank you so much.

Okay, yes. Just some comment on the Q&A.

I would suggest we do a few alternating rounds here in the room. And then we also go to the online questions.

[Operator Instructions] So yes, let's start. Falko from Deutsche Bank, yes.

Please speak into the microphone on the desk. Thank you.

Okay. Falko Friedrichs, Deutsche Bank.

My first question is on your guidance for fiscal '24, '25, specifically on the margin. Considering that you expect a growing top line, you have a pretty weak comp, right?

You had the consumable destocking last year, plus you've identified further cost savings. And why don't you expect a little bit more margin expansion potential?

My second question is whether you can add a little bit more color on the order intake growth in Q4 specifically. You spoke about a stabilization in Microsurgery.

What does that mean in numbers? And you've also touched on this weakening order trend in Europe.

Maybe you could add a little bit more color there as well.

Okay. So maybe I give you some indication of order entry.

And I think Justus will give you some more details then potentially in the numbers. So first of all, what we have seen is indeed, as we reported, Falko, that there was some weaknesses last year, especially also in U.S.

in terms of capital equipment and investment schemes there. And we have seen that this has been turned around now in the last months.

One of the reason has been -- indeed is change in interest rates in U.S. but also that -- or we see that -- or let's say the saturation of the market based on the high order entry during the pandemic's is now done and that now actually hospitals are starting to reinvest again.

And this is something what we see depending country by country because this is really something what we also have seen now, especially last year, that the specificity on the respective country has increased. And that's also because of the reimbursement, thinking about Germany now and [indiscernible] reform, thinking about what happens in Korea with physicians on strike.

So there has been a lot of activities ongoing. And this is something what we have seen which is now, good news here, resolved, and we see now positive momentum coming in.

So that means we are quite positive, especially for equipment order entry, that there are some compensation; and then depending also on the new product, how this is ramping up. And maybe Justus can tell a little bit more about numbers.

Yes. On the -- on your question on why not more positive on the margin guidance, I think, first of all, you all know where we come from.

And -- or frankly, to be a bit more cautious and conservative after the heavy profit warning that we had to give in June of this year, I think, given the current situation with headwinds not really easing off, I think, is a more prudent thing to do. So as you have heard Markus explaining, the trends especially in the Chinese refractive business are still difficult.

We still see pressure here on margins. And we clearly -- for the market in China, we clearly need the introduction of SMILE pro to have something in the hands of our customers that actually helps them to position their pricing at a reasonable level, so we see that somewhat reflected in that guidance.

And lastly, I would reiterate that the first, for us, really important milestone in this fiscal year to give more clarity on guidance is around early February. Why is that, early February?

Chinese New Year will be January 29, so the vacation around Chinese New Year is the winter peak. And that will indicate the appetite of consumers to undergo procedures.

It will -- gives us a bit of time to see whether the stimulus is already showing impact in China. And last but not least, let's also not forget, I -- if I'm not mistaken, January 21, the Trump administration will take over.

And that may have impacts both on China, most likely also on the U.S. market.

And you can see that these uncertainties in 2 of our most important markets, I think, are calling for being a bit careful with the guidance, yes. Thank you.

Oliver Metzger from ODDO BHF. 2 questions on your savings.

So first of all, can you quantify the saving impact for this year? So you mentioned as a target flat OpEx, but this comes in a phase of only, let's say, slow or moderate growth.

And the second question is about this further saving potential. So you say, if markets deteriorate, you want to save more.

Why don't you become more aggressive on savings in particular in a phase where you see this earnings pressure? Is it more you think about the trade-off between future growth versus current profitability?

And it would be great to understand...

Yes. So maybe I'll start to give you a little bit of perspective because -- so what we see is that our positioning in the market is pretty rich.

So we have really a very good positioning in the market. And this positioning is driven because of our innovation power, so for us it's really important to balance, on the one hand, let's say, the activities, long-term and mid-term activities, in R&D but also in sales and marketing.

So that's one really crucial and important thing because this is the DNA of our company. And this is nothing what we want to jeopardize, so that really means to understand.

And then we are always talking about our anchor products. Maybe you remember that.

Anchor product means all -- these are the products where we are shaping markets and where we are market leaders. And this is something we are investing to make sure that we keep that market leadership.

The other thing is -- so we actually -- we are now optimizing. So we started to optimize the structure.

Now we are optimizing the processes. And there is efficiency gains, what we are leveraging and what we have already addressed.

And this is the program what Justus mentioned, which is a corporate program for everybody where we, on one hand, had cost avoidance and cost-cutting measures; on the other hand, efficiency and productivity gains, what we want to realize. And this is now also to convert, for instance, processes from manual to digital.

We are working on the SAP 4HANA integration, which will generate then more benefits for us where we have then cost savings. So having this said, why not going even more -- stricter?

Because we strongly believe on actually that the market is recovering because the cases are there. So that's a big difference maybe to other industries.

So when we are talking about myopia, when we are talking about nonelective procedures, they are there. And this is actually where we are currently also doing the transformation, on the one hand, pushing refractive while knowing that refractive laser surgery is one of the key, let's say, innovative elements when it comes to myopia and presbyopia.

The other things are the nonelective procedure. That was one of the reasons to acquire DORC was actually to get these consumable business on procedures which are -- has to be done because otherwise the patient is suffering.

And that's a big difference to laser refractive surgery, and this is something what we are doing. And we are investing in this, yes, so to balance that.

So if we see now that the entire market is going in a higher depression, then for sure, we can go in a parametric approach and then cutting elements out of this until we are coming really to the core. And this is exactly what the team has prepared so that we go stages by stages.

If we see that the market becomes even more -- softer, then we go in -- can go in the next level. We have prepared that already and we can go there.

Yes. I mean, on your question on the OpEx target for next year, I'm not sure whether I understood the question 100%, but I mean flat OpEx is what we are aspiring.

And that means that we basically have to compensate all inflationary pressure, payroll pressure and so on. You know that a good number of our employees are in Germany.

You know what you can expect here in Germany in terms of tariff increases. So that means whatever that pressure is will be compensated by countermeasures on the other side.

And with that, obviously, assuming that we will see in the second half of the year then growth, that will basically mean that productivity and efficiency is focus, yes.

[ Yes, at the back ].

This is Anchal Verma from JPMorgan. I have 2 questions, please...

Microphone...

No...

This is Anchal Verma from JPMorgan. 2 questions, please.

And 1 is on the margin guide for next year again, just trying to understand a little bit more around the bridge to next year's guidance. If I remember correctly, at Q3 results, you had pointed that, at least at a baseline, we should see destocking recover.

So that should add approximately EUR 40 million of EBIT. And then you'll have the DORC contribution and then cost savings, which is -- sounds like it's probably offset by higher inflationary costs, so where are we wrong on that bridge?

Is there potentially a slower end market so you're not seeing the full destocking recovery come through? And essentially what are you seeing in the end market recovery?

And then in the, for the second question, please. This is a bit more around VBP.

Could you quantify the headwinds you've seen in FY '24? What are your expectations for next year?

Have you seen any market share shifts? One of your competitor had pointed to a potential tailwind from this.

So just your thoughts on how we should think of that next year.

Yes. Then maybe I take the second question and Justus will take the first.

So NVBP -- and I'm not sure on which competitor you are [ referring to ], but there has been different strategies and tactics to position there. Our strategy was to say we have a high-quality product to a price which is fair.

And what we did was that we said, okay, we are focusing on premium lenses and not so much on the monofocals. In the monofocal lenses for the NVBP, there is also a lot of local players; and the price was very much under pressure.

So having this said, I think we are -- and this goes along with our brand. We have positioned.

As I already stated before, we have positioned our lenses on a higher price level. We see that the volumes are going up because, also for the private clinics and hospitals, this is attractive.

So that we see a shift from public usage towards private usage and that actually here our unit numbers are going significantly up. And as I said, we understand then, as long as the NVBP is running, that this trend will continue.

Yes. And on the margin guidance, actually not so much to add, what was said before.

So first of all, you're obviously right saying, "Well, now I -- can't I take basically the baseline of last year?" And now I add back the destocking impact and then I add back -- add DORC.

And then I have some OpEx saving, and then I'm wherever. So that mechanically is understood.

However, we are not in a static market, yes. And I think you heard us saying that not only was the summer peak in China softer than what we had expected.

Actually, since then, we are seeing that consumer confidence, you saw the chart, has actually reached record low levels. And we obviously also hear that feedback from our customers, our clinics, so going back to the guidance logic, we in that circumstances need to actually be prepared that some of the destocking upside may be consumed by the softness of the market.

And that's why I said to your colleague's earlier question that I think only in the mid of Q2 we will know better whether the consumer confidence returns, where we see the correlation between, on the one hand side, a stimulus package announcement or then potentially already rolled in; and a clear impact on the belief of consumers that, overall, things get brighter or so. So I think that is one of the key factors.

I think the OpEx comment I made before. I also want to reiterate again that obviously it's not for the, let's say, lack of ambition to also work further on cost reductions, but I'd also make a clear statement.

Whenever you go into really deep cost cuts, you better make sure that you understand what is the reasons for the weakness that you are going through. And in terms of our competitive position, I cannot see neither in refractive nor in cataract, nor in the posterior segment vitrectomy, nor in MCS that there is a material difference in our position to where we were before.

So after talking a lot here about attracting and retaining talents that we need for an innovation pipeline and the ambition of our innovation, I think it would be not in the best interest of our investors if we were now kind of trying to potentially identify more savings at the expense of the talent that we have onboard, yes. Thanks.

Yes. And let's go to Dylan then to Julien.

This is Dylan van Haaften with Stifel. So just 2, 1 short quick one, both on China refractive.

So has the transfer price changed on the refractive consumables between the ZEISS AG and Carl Zeiss Meditec either last year or next year? And my second question is just on market assumptions.

So could we just talk about what the drivers are today? So I know LASIK-versus-SMILE mix.

Is that still expected to be negative? How should we be thinking about case volumes?

My initial impressions are maybe mid-single digit down next year. And then maybe on prices: I know on the LASIK side there's a bit more price pressure.

I know on the SMILE side you guys are more protected. Could you also guide us there?

Because I also know, after spring, maybe SMILE pro comes in and kind of offsets that, so any color there would be super valuable.

So maybe I take the second one. And maybe you can briefly talk about transfer price.

As far as I know, there is -- but maybe you are coming, but -- so first of all, I think just being in Shanghai and in China in the last couple of weeks, talking here to the teams, but also, for instance, in Taiwan and Southeast Asia. So first of all, what we see is indeed that there are kind of higher -- currently a higher demand for price-sensitive procedures, LASIK.

And this is something what we see. Nevertheless, the SMILE is on a high level.

And the customers have a high interest also to keep that price level. We will come with new innovations here.

So we have, for instance, the entire workflow VISULYZE 4.0. So that means we are combining now SMILE with VISULYZE 4.0, which brings additional value to the patients.

And with this, we can keep the prices or our customers can keep the prices. Secondly then, with the VISUMAX 800, there will be then SMILE pro.

And then we have also again 2 stages because then we have SMILE pro and we have on top of this then SMILE pro with VISULYZE 4.0 with the workflow solution. And this has been the absolute premium offering and this is something what our customers can utilize.

And this will keep the prices on the level as they are. So what we also do is, quite importantly, we keep, I would call it, the quality assurance up.

So that means we are training our customers and making sure that they are following, I would call it, gold standard workflows to make sure that the outcome for the patients are perfect and optimum. That's the one thing.

The other thing is we are -- as you know, we have a good solution for presbyopia treatment. And this is also something what we will introduce heavily in China and also in other countries where they are already successful.

So overall to give you that perspective. So what we see is that, yes, there will be again pressure on the prices.

That's clear. This will stay.

It stayed also in the past, by the way. It's not like that this is really new, yes.

So there was always pressure on the market, but the answer from us is to bring new innovations to the customer and to the patients so that the patient is willing to pay a higher price. And this is exactly what the team is doing, also what we said before with [ hyper SMILEs ] or hyperopia treatment.

This is now also the next step. And I can tell you it makes a big difference whether you get a LASIK procedure or whether you get SMILE.

And from this point of view, SMILE is the standard. We see that also upcoming in new countries.

And the good news is now, for instance, also in U.S. we have now the MEL 90 approval just recently got, which is also great.

And these are now things where we can roll out the learnings from China then also now in the other countries.

Can you -- just to make sure that I really understand your question, can you repeat it, please?

Sure. It's because my understanding is that, when it comes to the distribution agreement between the ZEISS AG and Carl Zeiss Meditec, there is essentially a, I think, euro-quoted transfer price, but there is a local currency sale.

And I would just be interested in understanding if -- my understanding is that at least that transfer price hasn't changed for refractive consumables lately. And I was just intrigued to hear if it's going to change in the future.

No.

No. All right, That's clear.

It's Julien Ouaddour from BofA. Maybe a follow-up to the previous question on refractive in China.

Can you talk a bit more about the -- like the upcoming competition? I think you mentioned a few names.

And I think there is also, let's say, like local competitors here. When do you see them basically coming in the market?

And I mean you showed us some -- I mean, like a slide where you have 50% market share. How can you protect your market share?

And I mean, could it impact either your volume or your -- or, like, price in the future? My other question is on the top line guidance.

So you said modest growth including the DORC impact. I think there's like the consumable destocking -- like the consumable, like, reversal as well.

Should we understand that the organic growth really would be relatively flattish? And can you compare it to the market growth that you expect?

This is usually what you -- like what you do. And my final question will be on China VBP.

So you seem to bet on premium IOL. And what do you foresee for the next VBP round?

I mean, especially, do you see local, like, competitors going like also into premium IOL? And could it put like further price pressure for you?

Yes, okay, so [indiscernible] so it's -- I think...

Competition in China was the first one.

Yes, exactly. So the first question, concerning competition in China.

So refractive laser is a very special topic, to be honest, because it's not only technologies. When you're thinking about a femtosecond laser or an excimer laser, I would say about -- everybody can build this laser.

That's not the point. The point is then the combination of the entire system and the beam steering and the interaction with the patient.

And that makes it very, very particular here how we are doing that. That's one thing.

The other thing, second part -- this is really very protective. Second part is, are the nomograms.

And what is meant with nomograms? This is actually the interaction of the laser with the cornea.

Since the cornea is a fiber material, so it's not a kind of heterogenous material, the understanding how the laser is interacting with the cornea, that's one of the core element. And this is something you can only get if you have thousands of patient data.

And that makes it for competition, even for start-up companies, super tough actually to start in because the outcomes, what we have learned over decades now is inherent in the system which is not available for them. And this is also something where then, because of the beam pass is because of the way how we are shaping the beam, you can even -- if you would get nomograms and by competition, they would be not able to adapt that so easily because the beam behavior of the laser is different to that what we have.

So that means it's very specific. It's based on hundreds of thousands of data coming from the patients, which are then actually fed into the system which is very specific for the system.

So that makes it really very protective not only in IP -- because people will always say there's IP. That's one thing.

The other thing is actually this very special topic, what is for refractive quite important. That's maybe the first question.

Second part was the IOL and, I think, the future. Well, yes.

So IOLs. For sure, there is local competition already coming up.

And that's clear, but you have to be aware of that we are really very well positioned within China; and that we are the only company, as far as I know, which has a production in China. And we are actually producing or starting now.

We got the first confirmation and approval now for one of our lenses, and that means that we will produce them locally. So that means we fall under the buy local policy, which gives us then some tailwind.

And for sure, we are also looking for opportunities to collaborate when it comes only to lenses, so this goes to NVBP, but NVBP is not everything because, on one hand, we have the public hospitals. But most important are also the private hospitals.

And private hospitals are in many cases not under NVBP and have special offerings. And this is actually where then our cataract workflow comes in, and also the combination of the cataract workflow, so we strongly believe that the future lays not only in single devices but in the entire ecosystem.

And the ecosystem means then in this case not only lenses. It means all the packs.

It means all the liquids, all of these things around. And we have the right offerings to give a full solution then to our customers.

Especially in the Chinese market, efficiency and productivity is one of the key aspects, yes. So just to give you a feeling.

I was in Shanghai, talking to one of the surgeons. Actually she said -- well, it was 5 p.m.

in the evening. And she said, "Well, I still have 80 cases," yes.

And she was working then over the night, yes, so until midnight, but she said -- so it's all about productivity, so what we have to think about is actually, in the future, this will be not a single device or a single consumable topic. In the future, there will be -- it's all about the solutions.

It's all about the efficiency over the solutions and how to make it really effective. And this is where we believe also what we have shown you in combination with AI and where we see the difference.

The last point was...

It was on the top line guidance. And what do we expect in terms of organic growth.

And how does it compare to market expectations or market growth expectations?

So we -- yes. So we definitely expect to grow and to outgrow the market.

So may be to say that in that way, but it's really this is -- goes a little bit along with that, what I said before. Market is not market, so -- and this is really something what we have seen now with the decoupling of the systems, that sometimes you have like tailwind, yes.

And sometimes you're getting in the same market headwinds now over the time. So for instance China, yes.

So China is one -- is our most important market, after U.S. or U.S.

-- so first, China, then U.S. And what we see is then the market dynamics in the respective markets, depending on the different, let's say, devices and subsegments of the market.

This is something, when you're looking to your models, you have to carefully model in. So market is not market there, as you know.

And so we -- what we see is that -- overall we see that our market share is stable. And it might vary from some of the devices or something like that.

So we see -- for instance, in diagnostics, we see some shifts. On other things like operational microscopes, we see a market share gain.

We see the same in refractive. So this is currently something, when you go to the charts and looking then to Gartner or whatever, then you can read it easily out, yes.

[indiscernible]

It's Sam England from Berenberg. First one, can you just give us some more color on the longer-term margin guide?

I suppose, what were the key moving parts where your assumptions have changed on long-term margins over the last year, be it China VBP, mix changes, price, et cetera? And then the second part, around the longer-term guide as well, is to what extent is delivery on that target range reliant on cost cutting and efficiencies versus operating leverage and revenue growth.

I suppose, to get to the top end of that guidance range, say, for the next 3 or 4 years, what sort of recovery in the business is it going to require?

Maybe I'll take the first question, you the second one. Is it okay?

Good, hand in hand. So concerning product mix and how we see the margin overall, yes indeed.

The point is that what we do is -- or so on one hand, we have one big pillar and that's refractive. So -- and we are working on that, heavily investing.

And also, to give you a feeling when it comes to R&D actually: Our R&D is in most cases actually the size of where others have top line. So this is really -- it's a heavy investment for us where we are actually investing in future [ of the ] things for the -- not only for the femtosecond laser but also for the excimer laser and the entire combination.

So that means we expect that in the future we will be able to provide this SMILE technology actually every, let's say, refractive correction, [ error ], what you can have, yes. So that means hyperopia, myopia and presbyopia.

And this will be available then for all key markets worldwide. So that's one of the big topics.

And we strongly believe this -- our offerings what we have and also the value add what we have, that this will have a good gross margin overall, these volume effects, yes, because it's also quite important. So that's first part.

Second part is then -- is the, I would say, traditional device business, yes. So transactional business and operational microscopes; in other devices, diagnostic devices like the IOLMaster which has a very good, reasonable margin, where we are working also on COGS down, so in cost of goods sold down, where -- to make sure that the margins are up; on the other hand, having innovations in place, also with consumables paired.

So when you're thinking, for instance, now in operational microscopes, then you need the drapes. And this is then also consumable business together with instruments.

So this is the second part. And the last big part where we are investing and have invested heavily is actually in this entire nonelective features and there especially the consumables.

And it could be captives or noncaptives consumables. This has not always the same high margin like now, for instance, for refractive, but be aware of that also the entire OpEx then is different.

So sales and marketing costs are different because you have a different interaction with the customer. It's not transactional anymore.

It's more application-driven and -- in the OR and then you have the recurring business coming in. And this is actually where we are investing, so when you are making your models, you always have to consider not only the gross margin but then below that.

What does this mean for sales and marketing costs? What does this mean for R&D?

And is this a different -- this is a different figure than in the future what we see here.

And the same, just trying to build on what Markus said. And if in the long-term model that you want to build you want to understand what to assume for OpEx and OpEx ratios and so on, I'd say that the one thing I believe is you will have seen our R&D ratio peaking.

You can expect us to continue to, in terms of a ratio, invest more than our competitors into R&D, but with the level of 16.6%, I think, that we have just displayed here, I think that -- returning to market growth and following our strategic initiative pipeline, I think you should see that somewhat tailing off now. In terms of sales and marketing, as Markus just said -- he almost gave the answer, yes.

I think, with changed business models, you may see a shift inside of sales and marketing in terms of what sort of profiles we need in our teams, but I think overall, with the sales and marketing cost ratio -- currently reluctant here to commit to any significant reduction in G&A. I think, by and large, what you will see in the next year is a bit of a pressure that we get from that transformation from SAP R/3 to S/4.

Unfortunately, SAP is basically pushing all its global customer base to transform that. And obviously it's not a trivial exercise to undergo.

That will require some additional investments at least for an intermediary period, but other than that, I'd say, by and large, with the current ratios for our administrative expenses, you can calculate, yes. I hope that helps.

Okay, thank you, everybody. Let's take some online questions next.

I've got Tara Lee, please.

It's Tara from UBS. Just 2 questions from me.

So your comparator looks quite soft for China refractive, something like down [ 50% or more really in ] Q1 in 2024 and probably down 25% or more for the full year. And your guidance implies that China refractive continues to be down year-on-year.

Can you give us an idea of just how soft underlying procedure demand is right now? And then my second question would be with regards to refractive demand.

Do you have a sense of what percentage of procedures [indiscernible] are LASIK now versus, say, 2 years ago?

So as I said already, it's -- and Justus also stated. So I would not look now month-to-month because there are always variations and variances.

So I would really look now maybe to the first quarter and especially to the peak season which is coming to get a better understanding what is happening, because what I can tell you is, yes, we have seen that the market was -- is softening. That's probably clear, but we also see that this can change fast.

And from this point of view, already now to predict, based on that what we see currently, what will happen for the rest of the year is pretty -- to be honest, so I'm not able to give you any forecast and prediction. What we will do is, first of all -- and it's really important for me.

We see nicely how actually our customers are doing and how the variations are looking here. And I think we will provide the best service to our customers must -- to make sure that they can attract in the best way the patients and potential.

And that's, for instance, now also marketing materials. So you'll see that, when you go to China or Taiwan, when you see that actually our customers are using the ZEISS brand, as we said that before, in a very -- let's say, a very aggressive -- or positive aggressive way [Audio Gap] with the brand ZEISS actually to make a difference to others.

And with this, we strongly believe that -- also with the higher installed base, more to come now also with the swap-in then of VISUMAX 800 when this comes, that we can keep the level in the market. How much this is now growing, this is something we will see over the year.

And the second part was you were asking about LASIK versus SMILE today versus 2 years ago. I mean today, I think we said it already, we are at a ratio 70-30, 70% SMILE versus 30% LASIK.

Frankly, I don't have the data now from 2 years ago here at hand. I would assume, 2 years ago, you are referring to pretty much the peak times of our refractive treatments in China.

There you most likely will have seen the ratio rather 85% versus 15% or so. That is my best guess, but I would have to go into our files.

I don't have it here in front of me...

I think what is really important is to understand that we have share -- we have gained market share not only in SMILE but also in LASIK. So it means this is combo systems and combi systems where you can actually do everything what you want.

Especially in a combination with the MEL 90 and the VisuMax, you can do every procedure what is possible. And for sure, we are offering -- and we are convinced that SMILE is the best possible solution, but LASIK is also a good procedure.

Don't misunderstand us, yes. And that means we also -- or we are actually striving not only to gain full market share and market leadership in SMILE but also in LASIK.

And that's, for instance, the reason for us to go also to U.S. while knowing that U.S.

is very much on LASIK, where we can start with LASIK as an anchor point and then moving over to SMILE.

I got Richard Felton next, please.

Just one for me, and it's on the topic of innovation. So thanks very much for providing a bit more detail on the technical capabilities and improvement on the new KINEVO and the VisuMax products, but what I'd really like to hear more about if possible is how you see the size of the commercial opportunity of those launches, so is there any color you can share on pricing uplift versus previous generations?

What proportion of the installed base do you feel is applicable for renewal if there's scope for market share gain opportunities? And I suppose what I'm trying to get -- I understand the prudence, in your guidance, of not wanting to embed any benefit from those product launches -- but trying to understand what the upside could look like in a scenario where those launches hit the market and start to gain traction, so any color or numbers or commentary around that would be very, very helpful.

I can take that. Richard, it's fair for you to ask that question.

And what I can offer you is basically to compare with previous flagship MCS product launches. And so we clearly see an opportunity.

And again, first, we go through a phase of book building for this KINEVO 900 S. We obviously know pretty well what is typically conversion rate between a project turning into an order and then an order turning into a delivery, but I think, to cut the story short here, there is clearly an potential good double-digit-million additional EBITA upside if we were to achieve proportionately same sales numbers.

Pro rata, of course, in this year, that would only be 50% of what we can count for given that we think we need the first half of the year for this book-building period, so to speak; and then the second, to ship and deliver, but the range is clearly that this is certainly contributing double-digit-million EBITA number and in the, let's say, lower double digits, of course. But it can be meaningful if -- I hope that gives you enough color.

Okay, I see Jack Reynolds, please.

A couple on DORC, please. So first of all, how is the integration going from a deep -- from an operational perspective?

And can you update us on your view of time lines around being able to realize the sales synergy between DORC [indiscernible] and vice versa? And then my second question is around margin [indiscernible].

Could you kind of give us a statement on exactly what your expectations are for operating margin for next year and then how you see that kind of progressing over the next few years...

Yes.

I'll take the first one. And Justus is going to take the margin question.

So first of all -- or actually, integration, as you know also, we had a closing in April, is actually ahead plan. So we had the first markets now integrated, especially U.S.

but also China which is the most important market for us. And we see also a lot of momentum here in the teams already.

And we have a roll-in plan now for the next 12 months in terms of sales integration over the markets, so this is quite positive. The teams are super positive here.

We see a lot of potential. And the good news is also we have already been able to leverage synergies not only on synergies in R&D but especially also in sales, so the first orders of the joint teams are now coming in.

And now the key element will be actually to provide enough capacity to get the upside here. So this is actually currently good news.

We -- as usual, there are still, I mean, let's say, always operational topics to make sure, but overall the market sentiment is super strong. And we see that the synergies are working and the teams are working pretty well.

I think this goes along also what I described before with the transformation what we do in sales, yes. So actually we have a new account management running in the countries so that we can offer the full solutions and that we can have a cross-talking also when it comes to consumables.

So because DORC is not only providing consumables and captives for retina market but also for the cataract market. And this is -- as you know, since we are also very strong in cataract, this is really a lot of synergies what we can leverage now.

So overall, I think this is good, but again I think the important thing is now to make sure that we can scale and that we can scale the wonderful products what DORC has to a level so that we can use the potential what we can get out of the market with our sales force of ZEISS that this is fitting together. And this is where the teams are currently working on.

Yes. And Jack, on your margin question.

I think we clearly expect for this fiscal year a mid-teens EBIT margin. And that obviously is driven by -- as Markus just said, by the -- let's say, the first phase of scaling.

And I think we clearly think, over time, there is more potential by, a, further scaling; and secondly, of course, by the higher installed base then driving the captive, consumable business following it, yes. So I think that is the guidance that I'd give you today.

Okay, [ Stephanie Bobchef ], you had a question, I think, on the same direction. I don't know if you withdrew it, because I can't see you in the chat anymore, but if you have any follow-up or any other color -- or feel free to ask.

[indiscernible] follow-up on DORC acquisition. I mean the margin guidance initially was [ about 15% then 15% ].

And if I'm right, it's 9% now. So I understand there is some extraordinary items in this margin, but can you come back on this 9% EBIT margin for DORC?

I understand [ you see here post-date ] synergies pretty strong and pretty well, so can you give us some guidance on DORC organic growth for 2025? And back on the full year guidance as well, top line full year guidance, I'm not sure I understood right, but from what I understood, you said you should be growing organically next year, right?

So maybe to start with DORC. So what we expect.

As you know, we are currently quite conservative, but what we expect are single-digit growth here together with the team. The synergies to be leveraged, we will see, depending also now on regulatory [ and actuarial ] approval processes, but overall we see, again, super strong momentum in the market.

We have to make sure now that we can leverage all the opportunities what we see. And that's then especially also a capacity topic, where now joint teams are working on that and which is also a great topic because -- so now operations and also supply chain management is working to make sure that we can then also satisfy the demand coming out of the markets not only in U.S.

but also in other markets like China where you know we are super strong and where we have a lot of interest on -- especially on EVA.

Yes. I think the -- your other question was on the growth, whether the organic growth will be negative.

I'm not sure, Markus, what -- do you want to address that...

I think I -- I think you said it already before. So our expectation is that we are growing at least with the market, so we have heavily invested in R&D and sales and marketing.

And it's clear that this investment has to come back, so whenever you have a market model, I would assume that we grow with the market or outgrow the market.

Sorry. [indiscernible] DORC margin revision for this year [indiscernible] you said DORC margin was around 9% this year.

Yes. It's basically some operational headwinds that we had to deal with in operations.

And there was a significant ramp-up in capacity in this year that, however, had some extra expense. And that is pretty much explaining a gap here, yes, but that was mainly one-offs.

And in the meantime, we have successfully managed that ramp-up and have consistent performance on that level. And with that, I -- going forward, I see the recovery of the margins to the originally guided level.

Okay, looking at the room here. We are a little bit overtime, but if there's any final 1 or 2 from the room, we could go for it.

Falko, please...

Just 2 clarification questions. So you said in Q1 you're expecting sales and earnings to decline.

Is that statement excluding DORC or including DORC?

I think that, first of all, includes DORC, yes. And the reason is that we have now a very soft start into the fiscal year.

With the announcement of a stimulus package, we basically see that this is worse than anything else, yes, because then everybody stops basically in China and holds back on investment decisions, so therefore, we are cautious for expectations for Q1, yes.

And then the second, quick one, to understand your comment on the contribution from your products correctly. So this lower double-digit-million potential, was that referring to fiscal year '25?

And would that happen if sort of the products launch in line with your expectations and the end markets are okay? Is that what you meant with it?

What I meant was specifically on KINEVO and for this fiscal year.

On the new KINEVO.

On the new KINEVO, yes. And there is other products like the VisuMax, as we said, where we are careful and have not included it in the guidance due to the registrary approvals that we do not hold yet in our hands and where there is always some uncertainty in terms of will we get it at a point in time where the approvals can then still turn into installments prior to the summer peaks, yes.

And that is -- could become a pretty meaningful differentiator for achieving additional revenue and net contribution to bridge where potentially your models may be sitting versus the guidance that we have given now, yes.

Okay, I think -- thank you very much for the discussion, to all those here and to those participating online. So this will conclude the streaming session as well.

Thanks for joining in. And to those who stay here with us in Berlin a little longer, then looking forward to chatting a bit further over lunch.

And then at 12:15 roughly, so in about 40 minutes, we will get going to the Carl Zeiss facilities. Thank you very much.