Getinge AB (publ)

Thank you very much and welcome to today's phone conference. With me, I have our CFO, Lars Sandström, who will support in the call and also present the detailed financials in a moment.

So we can move directly over to Page #2, please. So I want to start by going over the key takeaways from the first quarter of 2019.

And from a top-line perspective, our organic sales increased by 6% and the order intake rose by 7.6% organically, meaning that we are growing quicker than the market, which is positive. And all our markets, all our major markets performed strongly, particularly I would single out Asia Pacific with China growing over 20% organically, which is really, really good.

Based on the high order intake and the signals from our customers, we are looking forward also to continued growth for the full year. We reiterate and are comfortable with the guidance that we've given earlier.

If we look at our gross margin, it's continuing to move in the right direction sequentially and our operating expenses are also declining in relation to sales. So if you combine these two factors, it led to a slight improvement in adjusted EBITA margin for the quarter, compared with the earlier period.

I also want to highlight that our working capital is under control. It's developing along the right lines, despite the robust growth that we see and we can also see that our cash flow remains stable.

With that, we can move over to Page #3, please. In terms of events, despite the reduction of operating expenses in relation to sales, we're not entirely satisfied with the current level that we see.

And therefore, we've initiated a number of selected restructuring activities. So, restructuring cost for the quarter totaled SEK 108 million.

And the measures implemented are expected to start making a positive contribution to profitability in the second half of 2019. When it comes to the negotiations with the authorities in Brazil, Mesh litigations and the FDA Warning Letters for our facilities in Mahwah and Fairfield, we have no news today compared to what has already been communicated.

So I just want to reiterate that. One piece of news though, is that in Q3 of 2018, our subsidiary Atrium Medical Corporation informed about the divestment of their mesh business.

After the end of the first quarter of 2019 now, Atrium has been informed that the buyer will not proceed with the acquisition as they have not received the necessary regulatory approvals to do so. For the Getinge Group, this will have no material financial impact and Atrium will now review and evaluate what the next steps will be.

On a positive note, we have received clearance from the FDA for the software, of an updated software version for the Servo-u and Servo-n mechanical ventilator platform in the U.S. market.

So it is a product that will continue to support the growth and the healthy growth that we already see in Critical Care. In the quarter, we also launched a new washer-disinfector for laboratories and the new version of our already successful BetaBag for sterile processing in pharma.

And in relation to this, we also delivered the new sterilizer GSS67 to the first customers in the U.S. with early positive feedback.

So we can move them from the events over to Page #4, please. So we look at the development of our growth.

Order intake, as I mentioned, initially, it rose by 7.6% organically and 15.9% in actual numbers. We do see all organic growth in all our business areas and across all our regions as well.

If we look at Americas, for example, we had good growth in Acute Care Therapies, especially driven by Critical Care and Cardiopulmonary. We could also see that we have particularly high growth in Asia-Pacific within Acute Care Therapies and also Surgical Workflows.

And it's worth mentioning that in Life Science we had strong performance in EMEA and the same thing goes for Surgical Workflows. If I then look at this from a sales perspective, we had 6% organic sales growth and 14% in actual numbers, and again, a good growth in all of our business areas, positive again for Acute Care Therapies in Americas.

If you look at Asia Pacific, it was really strong performance for all three of our business areas and the same thing pretty much goes for EMEA as well, so overall a rather robust pattern there. We can move over to Page #5 then, please.

To drill down and look at the order intake perspective from the business areas, we can see that from an organic perspective, again, strong growth overall. Acute Care Therapies grew by 8.2% or SEK 511 million.

We see particularly high growth in ventilators, so inside Critical Care in all of our regions. We also had strong growth for Cardiopulmonary and this includes both hardware and also consumables in Americas and also in Asia Pacific.

When it comes to Life Science, we had 8.7% organic growth corresponding to SEK 90 million, a very high organic growth in orders in EMEA. And this is, again, it's both consumables and capital goods, whereas for Life Science, we had a more sluggish start to the year in Asia Pacific, and this is mainly related to capital goods.

From Surgical Workflows perspective, 6.4% organic growth or SEK 244 million, a very strong growth for Surgical Workplaces, particularly in Asia Pacific and in EMEA. Surgical Workflows had a softer start in Americas, largely due to a lower order intake in Integrated Workflow Solutions in Latin America.

So this is our software business that had significant orders last year, so about 50% of the deviation is explained by that difference. We can then move over to Page 6, please.

So, net sales for the quarter, as I said, increased organically by 6% and actuals by 14%. So the bridge you see there ends up at SEK 5.548 billion for the quarter.

In there is a positive currency impact of SEK 389 million. And, as you can see it from the business area perspective, all three areas contributed positively.

The pattern that we've seen before with capital goods growing faster than consumables continues here again, so 12.4% in capital sales and 2.4% in consumables. If we look at this from an Acute Care Therapies perspective, we had 7.7% growth or SEK 470 million.

Main contributor here, the biggest contributor is Critical Care. We had growth of over 20% in Critical Care, mainly driven by ventilators.

On the more negative side, we can see that the sales of our expandable vascular stents continued to decline a bit year-on-year in the first quarter. And the balance, as I mentioned, when it comes to capital goods and consumables was a little bit reinforced again this quarter, which has an impact on the gross margin.

When it comes to sales of capital goods such as ventilator, we saw a market increase here, which positively - it impacts the gross profit positively, but it has an adverse impact on the gross margin, as such. If we then move to the middle part, in Life Science, we had 7% growth or SEK 66 million.

Almost 10% of organic growth came from the sale of capital goods, which again we're seeing across all geographic regions. Worth singling out, I think is that we had some major deliveries that took place in Asia Pacific compared with the first quarter of 2018.

We can also see that capital goods are increasing at a faster rate than consumables and service. It was 9.7% in Life Science compared to 3.3% for consumables and service.

If we then move to Surgical Workflows, we had 2.4% growth corresponding to SEK 144 million. Surgical Workplaces, so our operating tables, lights and pendants, developing well in all regions, particularly the operating table part of the business.

As an example of this, we had sales increase by slightly more than 25% in Asia Pacific and then 12% in Americas, so really good traction for that part of the business. Infection Control had a tougher quarter, so lower net sales in both in Asia Pacific and in Americas.

And if you look at the split of capital goods versus consumables and service, you can see that there is a continued growth on the hardware side. Here, the gap is a little bit less than it has been, if you compare it to two other areas, it was 3.5% for capital and 1.3% for consumable and service inside Surgical Workflows.

With that, we can move over to Page #7, please, and look at the gross margin development - gross profit and gross margin development. So gross profit increased by SEK 237 million to SEK 2.825 billion in the quarter, and this is driven by volume and some support from currency of about SEK 185 million.

It's also worth mentioning that there is a slight positive impact from IFRS 16 on the adjusted gross profit, and this amounts to SEK 27 million in the quarter. On the margin, we had a positive contribution from volume and IFRS 16, but there was also a small negative currency impact of 0.3 percentage points here.

So if you compare with the preceding year, the gross margin is 2.3% lower mainly due to product mix factors in Acute Care Therapies and Surgical Workflows, and a bit of regional mix changes as well. And here, in Asia Pacific outgrowing the other regions in net sales for the quarter.

It's however worth repeating, I think, that the gross margin continues to improve sequentially then we don't see any reason for this development to stop right now. So a lot of the improvement activities that we've initiated are on its early days, but it's starting to bear fruit.

And we do expect this trend to continue. So with that, by - we move over to the detailed financials Page #9.

And I leave over to you, Lars.

Thank you, Mattias. As you can see, adjusted EBITA increased by SEK 68 million and adjusted EBITA margin increased by 0.5 percentage points.

The gross profit increased by SEK 237 million, but if we look - when look at the margin GP had a negative impact of 2.7 percentage points due to the negative product and regional mix factors. We continue to have control over our OpEx.

Adjusted currency and IFRS 16, OpEx is 0.3 percentage point lower year-over-year. Currency here actually had some SEK 140 million negative impact on OpEx.

The increases we see on admin is mainly related to remediation and quality, which we have mentioned mostly in previous calls. As seen from a margin perspective, the higher control in OpEx contributed positively 25 - 2.5 percentage points.

All in all, this resulted in an adjusted EBITA of SEK 369 million with a currency impact of SEK 40 million positive, where all transactional effects represent SEK 12 million and translation effects of SEK 28 million. And both in line, the IFRS 16 impact is very small with SEK 2 million on the adjusted EBITA for the quarter.

When we look at the situation where we are on the hedges and coming to transaction flow for the full year, we see here that we expect the negative impact of some SEK 40 million for the full year 2019, both on gross profit [EBITDA and the EBITA] [ph]. Then we move over to Page 10, please.

Let's take a look at the business area contribution to adjusted EBITA, which was positively impacted by currency tailwind of some SEK 40 million in the quarter. Starting with Acute Care Therapies with a margin improvement of 1.5 percentage points or SEK 128 million, the increase if adjusted EBITA by SEK 128 million and the margin improved here, mainly due to higher sales volume and stabilized operating expense.

Life Science adjusted EBITA declined by SEK 11 million, resulting in a margin decrease of 3.8 percentage points mainly attributable to lower gross margin and somewhat higher operating expenses compared with the year earlier period. Surgical Workflow adjusted EBITA fell by SEK 30 million to minus SEK 195 million, primarily due to somewhat lower gross margin and negative currency impact.

Then let's move over to Page 11, please. So here we can see - we continue to see proof of the control on OpEx here.

One such is the continued decline in number of FTEs. We were 10,792 in the organization one year ago.

Today, we are 421 FTEs less, and this is without any big campaign that can create unnecessary disturbances and distortion to normalization. Rather, we worked with repetitive monitoring and follow-up in all parts of the organization.

And if we are to replace or reallocate resources, we do this step-by-step. And when someone leaves the company, we look into this continuously.

This together with other activities is contributing to the continued positive trend on OpEx versus net sales rolling 12 that you can see in the graph to the right. And this journey continues.

As you know, we have communicated as we are doing some restructuring activities with restructuring costs on SEK 108 million in order to get a better fit on our costume in areas where we can be more productive. And these activities are expected to start support margins from the second half of this year.

Over to Page 12, please. Cash flow, here we can see positive impact by the increased profitability.

But if you remember that the free cash flow is positively impacted by the IFRS 16 effects due to reclassification in the cash flow statement. Adjusted for that, the free cash flow is up some SEK 53 million compared to minus SEK 1 million last year.

Working capital remains stable despite the healthy growth you can see on top-line. Net debt was negatively affected mainly by currency and IFRS 16 in the quarter.

Excluding IFRS 16 effect, net debt in relation to adjusted EBITDA rolling 12 months was in line with Q4 2018. Over to Page 13, please.

During previous year, we have been working intensely with breaking the growth trend in working capital and that we saw in the years before. And as you can see in the left graph, we broke the trend in working capital days in the second quarter last year, and then we have followed a decline each quarter since then.

We are now at some 120 working capital days. And working capital is decreasing some 2% year-over-year at the same time as our net sales growing 6% organically.

This work will continue, just as with everything else we do, in order to improve productivity and both earnings and cash flow improvement. Then let's move to Page 15.

And over to you, Mattias.

Very good. Thank you, Lars.

So I just want to reiterate the outlook for 2019. We expect net sales to grow in the range of 2% to 4% organically for the full year.

So the good start now in 2019 is, of course, making us more confident that we'll be to deliver on this. If we look at things from a cash flow perspective, we expect the overall positive demand pattern to continue, and this goes for both capital goods and for consumer goods.

I think, it's also encouraging that we'll get positive signals from our customers on our newly launched products, and we expect the same type of feedback with the products start to come for the rest of 2019, so positive outlook overall and good momentum here at the start of 2019. With that, we can move over to Page 17 directly to the summary, please.

So the key takeaways really from the first quarter of 2019, we have good growth momentum. The sales growth organically is really strong and the same thing goes for order intake.

And we continue to have a positive growth outlook for the year as well. We can also see that our gross margin improved sequentially, and it has improved since the third quarter of last year, and we can see the early signs of getting traction on some of the improvement initiatives that we've launched during 2018.

And as I said in one of the earlier calls, the year 2019 remains a year of a lot of implementation of activities that we expect to bear fruit a little bit now in the short term, but mostly from 2020 and onwards. We are making some selective restructuring activities in the quarter as well, which is expected to support margins from the second half of this year.

And I want to underline again that it's more about the enhanced continuous improvement than any dramatic changes here. But we believe that we needed to speed up a few of the improvement initiatives that we had going.

So, finally and overall, I look forward to the coming quarters now with a continued focus on innovation, on our customers, on quality, and of course, also cost awareness. So with that summary, we open up for questions from the participants.

Thank you very much. And congrats for the very nice Q1 result.

First of all, just a housekeeping question on restructuring costs. They were at the SEK level of SEK 108 million.

I just wonder what we should sort of expect for the full year in this respect. Then I have a question on the capital goods versus consumables.

And we saw also, as you also highlighted in your presentation, the effect on Acute Care Therapy, where you had a growth of capital goods around 25%, consumables only up 2%. And there you have a quite dramatic negative effect on gross margin.

My question is what is the time lag here? When should we expect that capital goods sold in this quarter would potentially bring more service or consumables later on?

And is it correct to understand that as long as you grow this way, then you actually have continuously to compensate on the gross margin side to just even to deliver the same margin, so yeah, if you could elaborate a little bit? I know you expect second half improvements, but we're still a little bit in the dark as long as you don't guide on EBITA.

Right. Thank you, Annette.

If we start with the first question on restructuring, then we - I don't want to give a specific number for the full year here, because we do decide to make things as we along. And when it looks sensible to act, we do so.

So we said in the past that about SEK 200 million is a reasonable number for our types of business. It's likely to be a bit above that for this year, since we still have activities to do, for example, in Surgical Workflows.

So that's the guidance I can give regarding restructuring for 2019.

Okay. I see.

And then when it comes to capital and consumables, it is a much more difficult question to answer, because we have a big portfolio of capital goods. Some of them generate much more consumables and service than others.

So it's almost impossible to predict. But in general, we have a two years warranty period before you start seeing any uptake when it comes to service and then consumables.

So it is likely to be a time lag for a while. But again, the mix has a big impact on the magnitude of the improvement that you will see in consumables and service.

But if I follow up right now, if we look at consensus, we all sort of expect like 100 basis point improvements on adjusted EBITA levels. Are you confident with that?

As you said, you said, we don't guide on EBITAs. I really don't want to comment on that.

We stick to our top-line guidance. And then we reiterate that we do see early signs of the improvement activities starting to bite and generate traction.

So we expect to continue to improve. But I don't want to give you EBITA guidance.

Okay. Thank you.

Great. Thank you and good morning, everyone.

And I have three questions and they're all very much in relation to the gross margin. Firstly, if I look at your Slide 7, which highlights the gross margin impact, there are some ups and some downs.

But I would like to know which one of those is the most important that has impacted the gross margin, the decrease or the pressure on gross margin in the first quarter. Secondly, when do we expect the gross margin adjusted for currency to inflect?

When do we see the first improvement in the gross margin development? And then thirdly, when it comes to capital goods versus consumables, what is the realistic timeframe before those growth rates between those two segments converge, if at all, over the next couple of years?

That would be useful. Thank you.

Yeah, so we start with one on which, on the Page 7, there we highlight, we had the gross margin impact. And, of course, volume is helping us with some leverage, of course.

Then the product mix is, as you can see, a little bit more tilting down. So that is the one that is giving the biggest impact and then regional mix to some extent as well.

So that's it, we try to be - there is meaning on the tilting of the, say, on the margin impact. And when you say, you're asking a question when.

As you know, the guidance we don't give, but you can see also that we started last year in the second quarter, and going forward there we have decline in GP margin. And now, sequentially, we already this quarter have an improvement compared to the fourth quarter.

Of course, there is more capital equipment in the fourth quarter impacting, but we are working on this and we are not giving an exact time when that will happen. But we are continuously working with driving the productivity and the supporting activity to improve margin.

So to be clear, so your reference of sequential margin seems to be more important to you than the year-over-year margin. Is that fair?

In terms of predicting the gross margin, you're placing greater emphasis on the sequential rather on the year-over-year development.

Yeah. I think you must remember we come from, last year and the year before then we had - what we had, yes, it was a mix of [IO and the core years in what] [ph].

So it was very difficult to compare. So therefore, that has been more and more important for us to compare with the sequential development.

And there is, of course, some seasonal impact also for us. But we tend to work in both, both looking at year-over-year and sequential.

Yeah. I think that, Michael, the reason we use sequential now is because it's something that came up at the Capital Markets Day in November.

There were questions about this. So that's the reason for it.

We're saying there's a bit more in the communication now just as a follow-up from the Capital Markets Day. But we work with absolute improvement for the gross margin.

That's really the main focus.

Okay. And then third question about capital goods versus consumables?

Yeah. The same answer as to Annette, really.

It's difficult to predict. You have the time lag between the sale and when the warranty period expires, but then there's also a big difference in the type of capital goods and how much it does consume in consumables, in spare parts and in service.

So we cannot give you a time guidance on it.

Okay. So if I look at - so fourth question.

If I look at the incremental sales and the incremental gross profit in the quarter, it seems that the additional sales you've achieved have only attracted a 35% gross margin. And is it correct to assume then that the low gross margin on the incremental sales year-on-year is very much a function of product mix and regional mix of which product mix is the most important?

Is that the right way of thinking about it?

Yeah. Yeah.

That's correct logic.

Right. And it's not a function of you perhaps using price as a way of enticing customers to go to your products rather than someone else?

I'm trying to work out whether that perhaps price is something which is also an element to it, which is not disclosed on Page 7.

No. That's not something that we're monitoring this on a continuous basis, and there is no significant deviation in the pricing pattern compared to what we communicated at the Capital Markets Day.

So the other factors that you highlight are really the main ones.

Okay. Thank you.

Yeah. Thank you.

One very quick one. Did you say you expect SEK 40 million negative transaction effects for the full year despite being positive in this first quarter?

Yes. That is how it looks.

But this is - we are quite short in how we work with the hedging as it is now. So there are movements.

So that is how it looks when we left the quarter here.

Okay. And then two additional ones.

Could you maybe say a little bit more what you're doing when it comes to the restructuring activities, number of employees you might consider or how many employees you might consider lowering by this? And also now, sticking to the mesh business for time being, could you update us on the number of potential litigations right now?

Thanks.

Yeah. Okay.

We start with the restructuring. It's three main areas, really.

One is in selected areas in sales and service where we've had problems, really. So it's not a cost-cutting exercise.

It's not just a - it's an improvement there with reorganization, really. That's one thing.

There is one area of support functions that cuts across the different BAs, mainly it's Surgical Workflows and ACT. So the support is function-driven.

And there's some selected early changes in Surgical Workflows mainly related to IWS or software business that's been implemented. So these are the main areas.

We do not disclose the number of employees impacted by this. We said that it's a positive margin impact from the second half of 2019 and that there is a payback of less than a year for these changes.

And then when it comes to the second question about the mesh, we - the buyer has just told us that they didn't get the necessary regulatory approvals to continue with the deal. So it's dead from that perspective.

So now Atrium will continue to manage and run this business and continue to evaluate it. That's all we can say today, really.

It's like we said in the report, where there is no material financial impact on Getinge, because of this.

I understand that. But could you just update on the number of pending litigation cases?

No. We don't disclose any update on this.

It's like when we made the accrual last year, we said this is now a process that will take the whole of this year and part of 2020. And when there is material news, we will give an update on this.

But no other details at this stage.

Okay.

Afternoon, gents. Thanks for taking the questions.

I'm probably going with two to start off with. Firstly, just starting on the 6% growth in the first quarter, obviously, your 2% to 4% growth for the full year implies a bit of a slowdown from the first quarter at least.

Is there anything we should be thinking about? Or are you just being conservative?

I know the comps are going to be a little bit tougher in Q2 and Q3. And then secondly, the - your net profit two-thirds of it on a reported basis is attributable to minority interest.

Just wondering if you could remind us what that relates to and why it is so large. Thanks.

Yeah. Sure.

When it comes to the growth, its two things to think about, I think. First of all, there - it's one quarter for the full year.

We do have as well a mix of some orders that are for delivery in 2020. So you have that portion of the order book that is not for 2019.

So that's one of the reasons for not updating the 2% to 4% sales growth number for this year. That's really the main area, with a bit of prudence, it may be also.

When it comes to the net profit, the minority interests are in our business in Thailand, which is a joint venture company. And we also have minority shareholders in PULSION Medical in Germany.

Thanks. And are there any reasons to think why that should be two-thirds of your total profit?

Your Thai business is quite small, I think.

No. This is - it's not two-third.

It's for this quarter, the level, it's not as if there is a correlation between that and the rest. That is just how it is this quarter.

And is there any particular reason in Q1 or is this just seasonality in the Thai business in Q1?

No. This is our sales entities.

So they are more stable in their profitability, I'll say, and also depending on the volumes they have, et cetera. So there is no big changes to be expected there.

Okay. Fine.

And then maybe just one follow-up on cash flow, also negative again this quarter. Just wanted to get your thoughts around how you're thinking about cash flow for the full year.

Thanks.

Cash flow after net investment is positive, SEK 50 million. Then we have some payments on our funding, et cetera, on the loan.

So that is - so we are cash flow positive in that sense.

And quantum for that full year? Any thoughts?

We continue working with our cash flow and the activities we mentioned there. First of all, it's working on profitability, then of course, working capital and prudence when it comes to net investment.

So that is how we work now. And then to drive continue to improve our net debt-to-EBITDA level, that is what we say.

So it's of course very much connected to the cash flow development.

Thank you.

Hi, Mattias, Lars. So first up, I think a strong start to Q1.

I joined the call late, and in case I missed something, please - it's okay to remind me and I'll go through the call. Just as a quick question.

You are still expecting 2% to 4% growth for the year in spite of a pretty strong Q1 and a pretty strong order intake number - or growth in order intake. So I mean do you have particularly strong reasons to believe that second half is going to be really weak, because the basic back of the envelope calculations, those are just like a particularly weak H2.

No. There's no pessimism from that perspective.

It's like what I said to David a moment ago that part of the order intake that we have is for delivery in 2020. So it doesn't impact the sales number of 2019.

So there's one element of that. And other than that, it's really just that it's - so far, it's only one quarter and it's a great start to the year.

But we do have a business that is a bit lumpy by nature, so just making sure that we're conservative in our estimate. That's all, really.

All right. Perfect.

Thank you. That's all for my end.

Thank you.

Thank you very much. Just in respect to the growth in China.

First of all, I like to hear a little bit more about it. And also what is the impact from growth in this market on margins?

And then my second question will be prospects for the more developed markets like Europe and U.S. How are they doing this quarter?

And what should we expect also looking forward there? Thank you.

Well, China is one of the areas that we're happy about. I think, it's a really good performance at the start of the year here.

And we're a premium player in medtech in China. So from a margin perspective, it's actually a good market for us.

It's - I'm glad you asked the question, because a lot of people just make the assumption that it's a low margin area and it's not for us. It's really positive.

So we're very well positioned with our portfolio in China. The PR team there has done a great job over many years, actually, that you could see the fruits of that one.

That's positive. When it comes to Europe and U.S., the Europe is very different depending on which country.

Look, I can't give you like an average view there. When it comes to U.S., it's again early days.

We had management trainees there last year, a number of improvement initiatives and so on. And it's one of the areas, where I think there is still more upside potential from where we are now after the first quarter.

So how much did you grow in U.S.?

Well, I will have to check. You mean in sales or order intake or both?

Yeah, both it can be, so…

Sales was about 4%. I think we can…

Okay.

Well…

And order?

Yeah, it's about 4% for both.

Okay. Thank you so much.

Thanks for the follow-up. Just following up on the - on I think Kris' question around Atrium Medical, just in terms of the regulatory approval not received, could you give us some further color around that, because I can't see where there would be an antitrust issue on that.

Thanks.

No, I can't give you any color on that, that they would have to answer for that themselves. So, yeah, they just informed us that they did not get the necessary permit to complete the transaction, and therefore [it's it] [ph].

And you'll have to ask them.

Okay. Thanks.

Yeah, a follow-up on the last one, do you just accept that? It's - I agree, it sounds a little bit strange that they don't get - what type of acceptance was it that they needed?

Well, it is one approval that is in the contract that they would have to get through, and they didn't. So that's where we stand.

But it's not for me to elaborate on the details of how the contract was designed there.

And was that related to antitrust issues or something else?

No, it's not something…

No, it's regulatory - it's not only that, they have different rules in China. So that has to be followed.

Okay. Another thing, when it comes to your work with FDA, when it comes to the warning letters related to Fairfield and Mahwah, have you had the meeting with the agency so far?

Or is that still pending? Or anything you could say about that?

Thank you.

Yes, we had a meeting with them related to the warning letters in early April to respond to questions and discuss the different actions needed to be taken. So - and generally, a constructive meeting, I will say, but no significant or material news that I can share from this.

Have you become more confident, less or the same after the meeting, maybe difficult to say but…?

Yeah, it is difficult to say. I mean, there are number of things that we need to implement that we had already started before receiving the warning letters.

So we were really just focused on implementing the activities that we are committed to. And that's also what you can see largely in our admin spend for the quarter; like we said about a year ago, that we're going through an intense period now and very focused on just doing this work with this.

I can't give you any kind of sense of where we stand. We feel that we're doing everything that we promised to do.

But are you still waiting for the response whether they are satisfied with your work?

Well, it's a [indiscernible], yes, final conclusion, yes, I mean, this was the meeting to follow up on the response to the warning letters for us. So it is an exchange of feedback.

So we've got some feedback, and now we have a number of things to do. And then there will be follow-up meetings.

So it's an iterative process.

Okay. Thank you very much.

Thank you.

Hi. Hi, Matt.

And last, just a follow-up on my earlier question. So you said that the order book number was impacted by potential 2020 delivery.

So if you could just, if you strip that out what would be the possible growth in your order intake?

Yeah. We do not strip that out.

But I just wanted to say that the reason for not upgrading the guidance for 2019 is that there is a significant element in our order book that is for delivery in 2020. But we don't break that down.

I think you'll have to rely on our guidance for sales for this year.

Okay. Thank you.

Thank you very much.

Thank you.

Good. Well, thank you very much.

I did the summary already before we started the Q&A. So just thank you very much for joining the call today.