Getinge AB (publ)

Thank you very much. And thanks everyone for taking the time to join our earnings cal today.

With me I have our CFO, Lars Sandström, who will support me doing the presentation. So if you could please move over to Page 2 please.

If you look at the key takeaways for the fourth quarter of 2018 in terms of performance, we can see that our growth continues. Our net sales increased by 7% in the quarter and 2.4% of this was organic growth.

We do see a softer and temporary -- softer order intake and has temporary decline on the older side but we leave the year with a better order book than we had at the end of 2017, which is very positive. Also, the signals from our customers and the market in general means that we expect the order growth for the coming quarters and full year 2019, we expect a rebound here and we still guide for 2019 that the next phase will increase by 2% to 4% organically, so no change from that perspective.

We have also very good control of our operating expenses, which on an adjusted basis was in line with previous quarter. This is despite the fact that overheads are seasonally highest in the fourth quarter of the year and that we've also continued to make selective investments in our organization, that's also positive.

This translates into an EBITDA margin of 17.9% and adjusted for currencies, this is in line with the corresponding period in 2017. From a cash flow perspective, we can see that this is also stable despite the large payment of $276 million to cover a previously reported cost related to investigations in Brazil.

We have good underlying cash performance. And if you look at the dividend perspective the proposed dividend amount to SEK1 per share.

Now we can move over to Page Number 3 please. So as we continue to talk about the key takeaways in terms of events during the quarter, I'd like to start with the thing that our production facilities in Wayne and Merrimack are now remediated, which means that we can focus entirely on productivity and other improvements in operations, and we can also focus on getting the PMA approval for our covered stent that's also good news.

When it comes to Brazil to match litigations and the FDA warning letter to Fairfield, we have no new material information to share and the developments related to this but we will of course communicate as soon as we have new information on any of these topics. I also think it's worth to mention that in the quarter we launched several new products that strengthened our leading positions in different categories.

One example of this is the advanced Maquet PowerLED II operating light. We've already received the first order for this and have very, very feedback from customers.

For those of you who attended the Capital Markets Day, you also met Stephane Le Roy, who took office as new President of Surgical Workflows in November. He's already well into the business.

He's been on-boarding at Getinge since 2012. He comes from a role as President of Southwestern Europe.

And previously he has held a number of managerial positions within the healthcare and SEMA. So Stéphane has already proven to be a good addition to the team and given his past experience on the company, he will have a very short running charge as well and smooth transition into the role.

Over to Page Number 4 please. So if you look at our growth development in a bit more detail, here we can see that our net sales grew 2.4% organically, 7% in actuals.

So very stable performance in the quarter, a little bit better than expected, which meant that we exceeded the guidance for the full year somewhat. From a regional perspective, we saw very good development in Americas.

Life Science grew 18.4% and Surgical Workflows 9.7% organically, and this has mainly been attributable to North America. There was a slight decline in APAC and this is mostly related to Surgical Workflows and again in our view off of normal fluctuations in the business.

If we look at things from an order intake perspective, we had 3.1% organic decline, 1.6% in actuals. And as I mentioned earlier, we see this dip as temporary and we do expect the growth to be back in the coming quarters.

The decrease is mainly related to Surgical Workflows and in emerging markets. Its emerging markets in EMEA, so Middle East and Africa in this context.

So there were a number of significant orders in the fourth quarter of last year, so the bar was rather high for this Q4. So we don't see any restructure reason for this.

We rather expect the order growth to come back in the coming quarters here. We also have strong growth in America.

So I think is worth highlighting we have more than 8% organic growth in the U.S., which shows that the organization changes made there and the targeted actions that have been put into place are starting to bring positive results. With that, we can move over to Page Number 5 please.

So if you look at the contribution in order intake for the fourth quarter and break it down by business area, we can see a rather mixed picture. So acute care therapies had an organic improvement of 0.9% or $196 million in absolute terms.

We saw good growth in cardiovascular and in hotline machines in all regions and good growth in critical care in East Asia. We saw decline in EMEA, which was mainly attributable to Middle East and Africa.

When it comes to Life Science, we had 2.3% organic improvement and $48 million in absolute term. So Life Science continues to show good growth in organic order intake in the Americas, very, very encouraging.

We also have the good development on isolators in all regions and also services in Americas and APAC. And finally then surgical workflows where we have the decline minus 9.5% organically in the quarter or $139 million in money terms, this reduced organic order intake is mainly attributable to emerging markets in the Middle East and Africa, and to a smaller extent in Asia Pacific.

We do think it's temporary and we expect to be coming back in the next coming quarter, so given the signals really from our customers and the market sentiment in general. And also here good growth in Americas and mainly attributed to North America in the quarter.

So please move over to Page Number 6 please. Looking then at the BA or business area contribution to net sales in the fourth quarter, we had an increase of 7%, of which 2.4 was organic.

Here you can see every business area contributed positively. We also find that capital goods continue to grow faster than consumables but the GAAP in growth base is smaller than what we've seen in previous quarters.

If you look at then acute care therapies, we had 0.3% growth in the quarter SEK194 million. There was good growth in critical care and in cardiopulmonary in both America and in Asia Pacific.

We had a bit of a decline when it comes to vascular systems, primarily in America and also little bit weaker performance in cardiac systems. And when we look at sales of expandable vascular spends there was a decline year-on-year.

However, the rates of decline now is really low than in previous quarters. We can also see that decreased sales volume in the U.S.

is to some degree compensated by other regions even if that is a little bit at lower gross margin than in the U.S. And finally on ACT, we can say the sales and consumables and services increased in relation to capitals goods, which positively impact the gross margin.

If you then move to Life Science, we had 16.5% growth organically in the quarter SEK129 million. We saw sales growth in four regions with particularly good development in Americas and in Asia Pacific.

We saw very good growth in Sterilization in Asia Pacific in Americas, and the disinfectants in all regions. In Life Science we can see as well that the sales of capital goods is increasing at a rather rapid pace.

This has a negative impact on the gross margin in the short-term. But in the longer term it is expected to lead to increased sales of consumables and services.

So long-term, we believe this is positive. And then finally if you look at Surgical Workflows, we had growth of 2.3% organically of SEK196 million.

Here we -- so good sales growth in EMEA and Americas but weaker performance in Asia Pacific compared with the fourth quarter of 2017. Worth pointing out I think that we had strong development within infection control in all our regions.

When it comes to capital goods versus consumable and services, capital goods continue to grow faster, which had some margin pressure in terms of gross margin. But just as with Life Science, we do expect it to increase sales of consumables and service in the longer term.

With that, we can move over to Page Number 7 please. So if we then look at the gross margin development in the fourth quarter, gross profit as such increased by SEK199 million to SEK3.79 billion in the quarter.

This was driven by volume and some support from currency. If you then look at the margin, however, the currency impact was minus 0.7 percentage points due to negative transaction effects.

And if you look at the margin effect year-on-year, it also amounted to minus 0.7 percentage point and this is explained by currency and by mix factors. And as we've underlined in a number of instances here, the mix effect that we believe is natural in the growth phase like the one we've been in during 2018.

Long-term, we expect that the larger install base will support sales of consumables and also service, which will in turn support an improvement in the gross margin. I want to point out again that we will continue to see fluctuations between quarter and it's more of an evolving change I would say.

With that, we can move over to Page Number 9. And I leave over to you Lars to continue with the financials.

Thank you, Mattias. As you can see, the EBITA margin decrease amounted to 0.8% where almost all 0.7 percentage points is explained by negative currency effects plus 0.1 percentage points higher GP and depreciation, which however is offset by OpEx.

And I think we have control over our OpEx adjusted for currency, OpEx is in line with the third quarter of 2018 despite the fact that overheads are seasonally higher in the fourth quarter of the year. And adjusted for currency, sales expenses are in line with the corresponding period in 2017, while administrative expenses increased by 10%.

And this is mainly attributable to the remaining costs after the spinoff of Arjo. This resulted in adjusted EBITA of SEK1.412 billion with the currency impact of plus SEK6 million, however, transactional effects represented minus 51 and translation effects plus SEK57 million.

With current hedging position when it comes to transaction flows, we would end up with a negative impact of SEK10 million on GP based on EBITA for the full year '19 as we stand today. If you then go over to Page 10 please.

So let's take a look at the contribution to-date, which was positively impacted by currency tailwinds of SEK6 million in the quarter as a total. For ACT, Acute Care Therapies, adjusted EBIT increased by SEK182 million and 3.6 percentage points, mainly due to higher gross margin, reduced OpEx and positive currency effects of SEK46 million.

In Life Science, adjusted EBITDA increased by SEK28 million as a result of higher sales. And for Surgical Workflows, adjusted EBITDA decreased by 5.2 percentage points year-on-year due to lower gross margin, high operating expenses, mainly attributable to remaining costs from the spinoff of Arjo and investments in sales in U.S.

And the currency headwinds were significant in the quarter amounting to minus SEK33 million. Over to Page 11 please.

Here we see a clear trend break in the areas impacting OpEx. One of those are FTEs.

We were at SEK10,684 in the organization at the end of 2017 and at the end of 2018, we are at SEK10,515. And the peak was reported in Q1.

And since then we have reduced workflows by SEK277. And this is without any big campaigns that can increase unnecessary distortion from our strategy rather it is repetitive monitoring and follow up in all parts of the organization.

And looking into where we'll place, reallocate in fact someone that has to leave the company in order to ensure increased productivity. This again with other activities is contributing to the trend break on OpEx versus net sales here looking at rolling 12, and that is what you can see in the graph to the right.

And this is something that we intend to continue keeping very close focus on going into 2019. Over to Page 12 please.

We're looking at our cash flow. I would like to remind you that it is quite difficult to compare this year's performance with the cash flow from Q4 and the full year of 2017 as this includes the cash flow from Arjo as well.

But cash flow from operating activities amounted to SEK604 million and free cash flow amounted to SEK321 million. The previously announced payout of SEK276 million in the corporate fine related to ongoing investigations in Brazil to place during the quarter, and working capital is negatively affected by lower rates of increase in accounts payable.

Our net debt decreased by SEK201 million in the 2018. Over to Page 13 please.

During the year, we have been working intent with breaking the growth trend in working capital that we saw in recent years. The first step was to stop the growth and the next is to start move into declines.

As you can see in the left graph, we broke the trend in working capital days for second quarter followed by decline in the third and fourth quarter. This means that working capital is growing 1.5 times slower than organic sales growth, and this is what we show in the graph in the middle.

We also see that cash flow after net investments increased in 2018 compared to 2017 despite the fact that we have been growing more than in many years and despite the fact that Arjo was included in the cash flow for 2017. This work will continue, yes, as with everything else, we do in order to improve productivity and thus both earnings and cash flow improvements.

Let's move to Page 15 and over to you, Mattias.

All right, thank you very much, Lars. So we'll skip directly to Page number 15.

And that just a few words on the outlook for 2019. As I mentioned before, we expect net sales to grow 2% to 4% organically for the full year of 2019.

So there's no change in earlier guidance here. This means that we expect that the comeback effect that we saw in 2018, which led to us outperforming the market growth will probably come down a little bit and the growth would be more in line with the addressable market that we have for our portfolio.

I'd like to point out that from a customer perspective we expect the overall positive demand pattern to continue. And this goes for both capital goods and also for consumer goods and for services.

So overall there is a positive sentiment I'd say out there. We also get positive feedback from our customers on newly launched products, and we expect the same reaction to the ones that are to come in 2019.

We also expect that the positive traction that we see in the U.S. continue.

So overall, that contributes to a positive outlook of 2% to 4% overall growth for the group in 2019. Then if you move over please to Page 17 and the summary.

So if we summarize where we are after the fourth quarter of 2018, we expect continued growth. No change and that's passed on from what has been earlier communicated.

There will be still swings and fluctuations between quarters, but I think the underlying momentum remains positive and the sentiment when we speak to our customers continues to be rather positive as well. So we will reconfirm the guidance from 2% to 4% for 2019.

We see some early signs, I would say, when it comes to improved margins. So this is both in terms of gross margin performance where things are stabilizing or bottoming out, if you like.

And we can also see that we are starting to see some improvement when it comes to productivity in terms of the OpEx in relation to our net sales. So this is a journey that will continue for the coming years as well.

Also, when it comes to working capital and cash flow, we expect those are our key indicators in this regard to continue to be doing rather good and to some extent improving despite the net sales growth. So overall, I would say we put a year behind us that has been -- 2018 has been for sure a year of a lot of headwinds and challenges that we'd have to tackle during the year.

From an underlying business perspective, though, I think we can start to see some of the issues of improvement, so that's the positive; still one underlying though that it's in early phase and we continue to work methodically and in a structured way the improvements and the different components of improvement for our turnaround with it. So with that, I look forward to 2019 as a year of continued focus on innovation on customers, quality and continuous productivity improvement.

And with that summary, we open up for questions.

Thank you, and [Technical Difficulty] 19 guidance. What stopped you from giving 2019 EBITA margin guidance or some directionality?

And secondly on the EBITA margin for 2019. Can you comment on what the foreign exchange implications are on margins using current spot rates?

And would it be correct to assume that you'll have a slide margin headwind based on current sport rates? And thirdly, a question about intangible assets, can you comment why the carrying value of your intangible assets of SEK24 billion has not been impaired despite your margins for the group effectively hardening over the last five years?

Why will those intangible assets will be worth the same today than they were perhaps four or five years ago? Thank you.

When it comes to the EBITA guidance, we just believe that we are still in a turnaround phase. There will be fluctuations and still a lot of moving parts here.

So we just feel it's a little bit too early to give more granular guidance below the top line here. So that's why we say with 2% to 4% organic growth for 2019.

We actually lost a little bit in the first part of the question, so I hope that was the whole first question.

Yes, it was. Thank you.

Coming to currency impact, when it comes to the transaction report as I mentioned there given what we have today and the flows that we see, the expectation is around minus SEK10 million on the result. And then on the spot rates there, I think I would have to come back to you on that but there should be no large impact as it looks now.

And on the in turn it will be there. We do the impairment testing that's part of the normal closing process that we do and we have no reason to have any other thing and that we can defend the values without any problem at all.

So that's why it remains. And as you know, there is no amortization on goodwill.

Can I just go back to the 2019 guidance for the EBITA margin? Is that fair to say that on the balance of probabilities today after the very solid Q4 that the margins are more likely to increase than to remain flat year-on-year in 2019?

I just want to reiterate really the message from the Capital Markets Day as well. We expect 2019 still to be a year where we have to implement and get all those things done in the business.

So the improvement is more to be expected from 2020 is what we have said. I don't want to give anymore granular guidance on detailed level for 2019.

And then briefly on the intangible assets, I mean I understand that there is a requirement every year to -- as part of the order process to look at the valuation of intangible assets. But just conceptually, when the businesses that you've acquired over the years over the past decade and you now have a margin and a cash flow that is less than it used be?

Why would the carrying value be the same? What is it that has allowed your accounting department to think that those assets are valued fairly at the same rate as it was perhaps five years ago?

And I'm just curious how that works, please?

When doing the evaluation of course, we look at the future expected cash flows. And given those we have no reason to defend the values that we have, so it is I think we'll have that.

So two questions, first I know to be in what you define as one-off items, i.e. what you adjust where you have some write down of receivables SEK83 million in there.

I haven't that before. Is that something we should see as exceptional or is it something that could continue to come going forward as well?

And then on the OpEx side nice to see the stabilization here in the second half of the year. So do you think you could keep OpEx rather flat in absolute terms also in 2019?

Yes, I'll start with the second question there, Kristofer. And I think when it comes to OpEx, we said as the productivity measure we like to see the ratio of OpEx to sales continue to decline.

We don't want to give guidance in absolute terms, because I think it's important to remain flexible when it comes to investing in opportunities and so on. So I don't really want to give guidance on the absolute level but we continue to work with productivity so the ratio should continue to creep down from condition.

And in particular investments if you could highlight what OpEx line in 2019?

No, there's nothing that stands out as extraordinary or anything like that. As you know in 2018, we had a lot of investments in quality and we had in sales and service and to some degree in innovation.

We do feel that we have come to situation where we're quite satisfied with where we are. Having said that though, I mean, there are still areas in terms of penetration of different categories in certain geographies and so that we may want to invest.

But it's more of a magnitude that what you've seen when it comes to quality for example here. So there is no single piece that stands out though.

And on the quality system, has that now been rolled up in the entire organization or still some risks that that for delays and more spending on the asset side necessarily?

That's more or less down there some small fine tunings here in the first quarter, but we're more or less where we need to be with it.

Then coming here first question there and we have during 2018 -- haven't -- really have an intent to work and enhance work in progress on internal control activities. We have extended our audits work, both external and internal audits work, as well as working on the compliance area very much.

And this has led us now in this quarter to provide mainly related to receivables from distributors and that is why this is coming up. And your question that we'll be more, of course, we have done a comprehensive work here and I rule out that we'll be never anything else of course that is difficult.

We have done a lot of work during 2018 in this area.

And is that related to old receivables or something that has been booked as sales in 2018?

No, this is mainly related to old.

I have two questions on the ACT business area. When it comes to the sale of the bio-surgery business, how did that affect the fourth quarter?

Did you sell an inventory to the buyer of the unit for the coming period when the buyer is setting up their own production? And also on the covered stent business, how did that develop on a year-over-year basis and how far away from a PMA are you currently?

Thank you.

I think when it comes to the bio-surgery business, there's no significant impact of top level changes or anything here in the fourth quarter, nothing at all, very small at least. And when it comes to the covered stent business, we still have some decline in the U.S., but it's much smaller than it's been before.

And it is to some degree compensated by other geographies, we said a bit more in Europe and other parts of the world even if it's a bit lower gross margin.

Two quick questions, if I may. First, could you just remind me how much of the intangibles that you were lowered when you sold the bio-surgery business or the mesh business, that the first one?

The total write down we did was SEK90 million and it was mainly related to intangibles in the third quarter.

And then my second question is during 2018, you in a very nice way stabilized and kick started the organic top line growth. And you ended the year with also it seems like you have reversed declining trend in profitability.

In that environment what message do you think you sent to the market by lowering the dividend?

I think the reason, first of all, it's a recommendation from the board to the AGM obviously and it's their decision here. But the recommendation discussion in the board has really been that we have good faith for the future.

We're optimistic about the future ahead. But we can't ignore everything that's happened in 2018.

There've been a number of extraordinary events and therefore, we believe it's responsible to lower the dividend a little bit. So that's the underlying logic in the recommendation.

So firstly so bigger picture question on this space. So the first part of the year saw your revenues accelerate quite markedly but your margins come down quite a lot.

Fourth quarter I think it's fifth round with growth coming down quite a lot, but margins in improving those expectations. But order growth has also slowed down.

So that's certainly an unusual pattern for us to see. Just maybe do you think the focus on your costs is potentially hitting your growth both top line and in orders?

And then second just focus obviously street is slightly struggling to model your margin and EPS growth pattern here. You also got about 10% EPS growth number out there of midterm.

Do you think that's going to be possible over the 5.91 number you reported in 2018? Thanks.

When it comes to the cost focus and the impact on growth, we're not worried at all about this here. If you really drill down into the order intake pattern in the fourth quarter, it's really a number of deals primarily in the Middle East and in Africa that we had in the fourth quarter 2017 that we don't have this year.

But these investments typically come with new hospitals or significant upgrades of hospitals and so on. And they tend to be spread out in time.

So it's not something that we're concerned about. And it's also worth remembering I think that we actually leave the year with a better order book than we entered the year with, which is also positive.

So we don't see any link between the focus on cost or productivity and the growth pattern. We think we had a comeback effect in 2018 and we expect to be seeing a more normal development in line with the market in 2019 that's really the main point here.

And when it comes to the EPS, I mean the target remains. No question about that.

But we don't give guidance on whether it would be achieved or exceeded in 2019. We prefer to again reiterate the message from the Capital Markets Day.

So first of all, the target remains but it's a midterm target. And we continue to focus on productivity really we would like to have more leverage in the business and see more of the positive top-line momentum really translate into earnings as well.

So first question on adjusted gross margin please, I think at the Capital Markets Day, you highlighted that adjusted gross margins had bottomed out. And I think we're seeing relatively okay adjusted gross margin in the fourth quarter.

So the question for you is looking into 2019. Should we expect the adjusted gross margins to start to improve considering if you like some trends unfolding for slightly better geographic mix, slightly better product mix with consumables?

Maybe some view on where adjusted gross margins can go over the next 12 months would be helpful? Also I'd like to understand a little bit more on your adjusted EBITA level.

As I look to this, the adjusted EBITA margin contracted about 270 basis points year-over-year, or down just over SEK400 million. If I understand correctly, 100 basis points of that related to currencies and a very significant proportion of that relates to this heightened holding cost from the Arjo spinout.

So can we talk a little bit about the Arjo cost and how that's being worked down, how quickly that can move? And also confirm that will not be then this 100 basis points of margin pressure related to FX at current spot rates?

So they're the first two and I have a follow up please?

If we start with the Arjo cost and the standard cost there, looking at '18 then of course there is no costs from Arjo included. So what we have now is the cost we have and that is what we have been working with all through 2018.

And we continue working in this and this is impacting let's say all the lines, both the COGS and OpEx. And here part of that has been I showed you earlier on there in the FTE reductions that we've been working with during the year here.

And we continue to address areas where we can find opportunities when there are turnover in people not to rehire, or when there are areas where we can do a structural activity. But more general activities but really targeting where we see opportunities.

This is also very much connected to areas where we can drive harmonization and efficiency in different areas of the company. So this is more methodical work all through the company to drive this down and improve at the same time the company performance in everything we do.

So that is what we are aiming for here. So going forward here, there should not be any discussion on standard cost.

This is our cost that we have and this is what we will continue to work to drive down. And when it comes to currency impact, yes, we have an impact from the transaction side in 2018.

And as I mentioned there what to expect going into this year is around given the flows we have now and the hedge positions that we have now. We expect around minus SEK10 million for 2019, so not a considerable amount.

So when it comes to the gross margin bit, again, I really think the right way to look at it is same things that we said at the Capital Markets Day. We believe they bottomed out after the third quarter.

But we don't really want to guide on any kind of magnitude of change for the coming quarters or years. It's just really that we continue to work with productivity improvements to improve the gross margin really.

But I can't give you any timing or magnitude of this. And you will still also continue to see mix patterns have an impact in both directions I think on the gross margin.

So we understand that it's difficult to model the business to some extent but this is the s reality that we live in. So that's really all the guidance we can give I think at this stage.

And then just a question on divisional margins please. And I mean, the pleasing thing to me about your results here is that your acute care therapies margin held up pretty well year-over-year at about nearly 20% not similar to the prior year despite and precious to covered stents, increased remediation costs, all of these issues with intra-aortic balloon pumps and so forth.

However, on the negative side, margins in the Life Science business have fallen materially 630 basis points and in the surgical workflows business down 370 basis points without the, if you like, heightened headwinds that you've had in the acute care therapies business. So I guess the question I want to understand is why have margins for those businesses fallen so materially.

And can you please comment as to, are you allocating any cost related to your FDA remediation to these divisions? Are these housing any of this FDA related costs?

If you could comment on that that would be great. Thank you.

I think the last thing that there's nothing of the FDA related costs allocated to neither SW, Surgical Workflows or Life Science. There are some costs of course for implementing our overall group common quality system.

So that has had some impact and some pressure but there's nothing else related to quality of FDA outside of acute care therapy. So the margin pressure the challenges for both of those BA are more business related.

So there's of course an element of price pressure, but it's still in line with what we've said at the Capital Markets Day, it's actually positive for Life Science and slightly negative for Surgical Workflows, but there's no change in that perspective. The other thing is that we do have some supply chain improvement work to do.

There is I mean structural efficiencies when it comes to the impact from OpEx as well that we need to work with. The Arjo bit impact Surgical Workflows almost entirety, so that's one element that we discussed really.

So there's not one single thing, here's number of things. And I think as Stéphane Le Roy highlighted both at the Capital Markets Day and in some sequence discussions that we had.

They're well aware of this situation and I think they're also very well aware of the key improvement areas. And this is really the main focus for 2019 as we come to terms with this, because we are well aware that there's a significant gap between our performance and competitors' performance, especially in Surgical Workflows but to some extent also in Life Science.

In respect to the order decline we have seen here in the fourth quarter of 2018. Do you then expect a more backend loaded 2019 than usual?

Of course, I'm aware that Q4 is a very big quarter. But will it be even more backend loaded than usual?

And then I know basically all analysts have asked about the market development, and have not got a lot of answers from you. But I'd try even though.

On Slide 11, you're showing how you are controlling OpEx. Could you give any indications on how you see this slide is going forward where you're looking at the '20 and breaking the number of the cost?

And then also to that slide, you say adjusted OpEx. Can you please explain what you're adjusting for?

So we have a chance to analyze that prudently. Then finally, I like to ask on the settlement, and let's say settlements.

Have there been more than the previous anticipated 900 cases just to have an update on that. Thank you very much.

I'll take the first one and leave the other ones to Lars. When it comes to the order intake, the impact of the sales patterning in '19, I don't think there's going to be any meaningful impact on the quarterly sales performance.

And I think just because of this fluctuation in fourth quarter of '18. We will still have a hockey stick probably in the fourth quarter of '19 as well is a pattern that we're trying to work our way little bit away from or at least reduce, but it's not that easy.

There are some customer related factors in this as well. But I don't think the change in order intake will really have any material impact on this.

On your question there on addressing OpEx and what are we doing on the COGS. As you know, big part of our COGS is connected to the material costs, which is an area where we work, continue to work hard on redesigning products to bring down the cost.

We also work on the normal procurement side to drive that further. There is a lot of things to do.

And of course you have other areas like logistics, et cetera but also to drive the production efficiency also to different business areas. So there are several activities also here.

And also of course, we have FTE working in the factories, et cetera that we also need to continuously work on to make sure that we take the opportunity when we see them to address these levels. And on your question there on adjusted OpEx, it's mainly related to depreciation and amortization that is making out this large adjustments.

So it's more to get a comparable figure there. And then some of the adjustments there that we took now in Q4 are connected to write downs of provisioning, there is also impacting us.

But you can see in Note 5, where you can see the split up of all the different adjustments that we do there you find every little numbers so to say.

And then on the settlement?

There has been no news in regards to this. I mean, it's going to be a while I think before we have in the news, so really nothing material to communicate there.

Well, thank you very much for taking the time to join us today. There is nothing in addition to that from our side either.

So just again once again, thank you very much for your time.