Thank you, and good morning and welcome to our Q1 2025/26 conference call. I'm Lars Rasmussen, Interim CEO of Coloplast.

I am joined by CFO Anders Lonning-Skovgaard and our Investor Relations team. We'll start with a short presentation by Anders and myself, and then open up for questions.

Please turn to slide number 3. We delivered 6% organic revenue growth and 3% EBIT growth in constant currencies before special items.

Return on invested capital after tax and before special items landed at 15%, on par with last year's adjusted figure. We had a soft start to the year as expected.

However, with a significant more turbulent quarter in Kerecis than we would have anticipated. I'll get back to that in a moment.

For the year, we maintain our guidance of around 7% organic growth. We lower our growth expectations for Kerecis to around 10% amidst significant market uncertainty in the outpatient setting, but raise our outlook for Interventional Urology to high single digits following a strong start and improved outlook for the year.

Before we dive further into the quarterly performance and outlook for the year, let me begin with a brief comment on our leadership team. In December, we announced two important changes to the executive leadership team.

EVP of People and Culture, Dorte Rønnau, has decided to leave Coloplast to pursue the next chapter in her career, and Tommy Johns, Executive Vice President of Interventional Urology, has decided to retire after more than a decade in Coloplast and more than three decades in the global life science industry. An external search is currently ongoing to identify a new leader for the global People and Culture function, while Kevin Haditsch will step into the role of EVP Interventional Urology on February 9th.

Kevin brings extensive experience from the global MedTech industry, including senior leadership experience from Teleflex in the urology space. I look forward to welcoming Kevin to Coloplast.

Dorte and Tommy have both played key roles in ensuring a smooth leadership transition. I want to thank them for the continuity and stability they have provided throughout this period and wish them all the best in their future endeavors.

Additionally, I'd like to mention that the search for Coloplast's new CEO is progressing well and remains on track. I would also like to put a few words to key developments in Q1.

Interventional Urology delivered a strong start to the year with 8% organic growth, driven by the Men's Health business. The product recall in Kidney and Bladder Health is now behind us, and we are looking at very healthy business at a very healthy business expected to deliver high single-digit growth in 2025/26.

During the quarter, we reached the important milestone of submitting Entibia, our investigational tibial nerve stimulation device, to the FDA. This marks an important advancement towards a future launch of the device and our goal of bringing innovative and clinically differentiated solutions closer to the patients.

Entibia plays an important role in delivering on our IMPACT4 strategy for Interventional Urology, and I'm encouraged by the fact that we continue to see clear external confirmation of the relevance of the implantable tibial nerve stimulation space. Industry activity and investments in implantable tibial nerve stimulation continues to increase, indicating broader confidence in the therapy area and the role it may play in the future management of overactive bladder.

These developments reinforce our long-term view of the opportunity within this segment. I would also like to highlight that we are further strengthening our product portfolio in Interventional Urology through an agreement to purchase the outstanding shares of UroMedica, a commercially commercial-stage company with a minimally invasive solution for treating stress urinary incontinence, complementary to our existing Men's Health business.

The transaction is expected to close here in February, and will have an immaterial impact on the group financial performance in 2025/26, while being accretive to Interventional Urology's financial metrics in the second half of the IMPACT4 strategic period. Finally, I would like to spend a moment addressing the development we have seen in Kerecis in Q1.

Kerecis delivered 10% organic growth in the quarter with an EBIT margin of only 1%. While we continue to see a healthy momentum in the inpatient setting in Q1, Kerecis' overall performance was subdued due to significant sales disruption from Medicare reimbursement changes in the outpatient setting, which resulted in negative growth in the outpatient setting.

Effective January 1, 2026, Medicare has introduced a single fixed payment of $127 per square centimeter for all products in the outpatient setting covered by Medicare. At the same time, Medicare has withdrawn the already announced LCD also set to go into effect January 1st.

Combined this combined, this has triggered significant uncertainty in the skin substitutes market as the channel adjusts, and we expect the heightened market uncertainty to persist throughout the year. As part of the shift towards a towards a fixed payment rate, the Shield product brand will be phased out of the Medicare market and replaced by a renewed portfolio of the product brand MariGen, which is well-positioned to take market share under the new fixed rate.

This shift will create a negative mix effect as MariGen volumes are scaling. There is no doubt that the many unprecedented changes by CMS and the recent pivot with regards to the LCD in fiscal Q1 has made the operating environment increasingly difficult to navigate as a manufacturer.

Similarly, we have seen an increased level of customer hesitancy to place large orders amid the significant market uncertainty. However, when looking ahead, we remain optimistic about the outlook for the category and Kerecis long-term.

We support CMS's efforts to clean up the market, and we see both the now canceled LCD and the fixed payment rate as evidence that Kerecis remains well-positioned to compete and win in the in the skin substitutes market. Only 18 out of more than 300 products were in the final LCD, and of these, two were Kerecis products.

That is a clear testament to the clinical efficacy and differentiation of Kerecis' product offerings. Kerecis is the only product in the market based on intact fish skin.

It has a high resemblance to human skin and is proven to be more effective than the standard of care in healing severe wounds. In addition to bring to being incredibly potent, the technology is also highly scalable based on its unique waste-to-value proposition, allowing for a highly efficient product production setup.

No other products in the market share the unique characteristics characteristics of the fish skin, and we have moved quickly in response to the changes. We have enhanced our go-to-market model to align with the new requirements, and we'll roll out a series of product launches during the year or during this year to support this updated approach.

I'm deeply impressed by the agility, ingenuity, and the grit of the Kerecis team and and the way that they have handled this situation. Long-term, we therefore continue to believe Kerecis will see continued strengthening of its competitive position relative to peers due to its unique technology and strong clinical documentation.

With this, let's now take a closer look at the details by business area. In Ostomy Care, organic growth was 4% and growth in Danish kroner was flat in the first quarter.

Ostomy Care delivered a soft start to the year as expected due to negative growth in China, a high baseline in the US, and order phasing in emerging markets. Rest of the year, we expect the growth momentum to pick up.

In the US business, the underlying performance continues to be strong, and in Q1 Premier has renewed Coloplast Group's purchasing agreement. The contract remains multi-source and effective for 3 years starting April 1st, 2026.

In China, sales declined in the quarter, impacted by a continued weak consumer sentiment and competitive pressures from domestic players in the community channel, further amplified by a high baseline last year. From a product perspective, the SenSura Mio product SenSura Mio portfolio was the main contributor to growth, followed by the Brava range of supporting products.

The latest product launches within SenSura Mio, the black bags and the new two-piece offering, both continue to perform well. Additional variants of the black bag bags were launched in Q1, and further variants are expected throughout 2025/26.

In Continence Care, organic growth was 7% and growth in Danish kroner was 2% for Q1. The Luja portfolio was the main growth contributor in the quarter, driven both by both the male and female catheters in Europe, most notably in the UK, France, and Germany, and also in the US.

Growth in the SpeediCath portfolio was driven by flexible catheters in the US and LATAM. Within our two smaller segments in Continence Care, Bowel Care made a strong contribution to growth, while collecting devices saw a slight decline in the quarter.

From a geographical perspective, growth was driven by Europe and the US, while growth in emerging markets was impacted by order phasing. Voice and Respiratory Care posted 8% organic growth for Q1 with growth in Danish kroner of 5%.

Laryngectomy delivered high single-digit growth in the first quarter, driven by an increase in the number of patients served in existing and new markets, and an increase in patient value driven by the Provox Life portfolio. Tracheostomy delivered mid-single-digit growth driven by a solid underlying demand, partly offset by phasing in distributor markets.

Growth in the tracheostomy in tracheostomy is expected to be back-end loaded and will pick up momentum in the second half of the year. In Wound and Tissue Repair, organic growth was 5% for Q1.

In Danish kroner, sales declined 8 percentage points or 8% due to 8 percentage points negative impact from the Skin Care divestment in December 2024. As mentioned earlier, Kerecis delivered a soft quarter with 10% organic growth due to the significant sales disruption from the Medicare reimbursement changes in the outpatient setting.

The Advanced Wound Dressings business declined 3% in Q1. China detracted significantly from growth, impacted by the product return initiated last year with a negative revenue impact of around DKK 25 million in the first quarter.

From a product perspective, Biatain Silicone was the main growth contributor. The the contract manufacturing business posted solid double-digit growth in the first quarter, reflecting a front-end front-end loaded year.

In Interventional Urology, organic growth was 8% and growth in Danish kroner was 3% for Q1. As mentioned earlier, the Men's Health business in the US delivered a strong first quarter and was the main contributor to growth.

Our flagship products within Men's Health, the Titan penile implant, continued to perform well, with the patient funnel positively impacted by our patient support program targeted targeted at prospective patients. The Women's Health business in and the Kidney and Bladder Health business also contributed to growth.

With this, I'll now hand over to Anders, who will take you through the financials and outlook in more detail. Please turn to slide number 5.

Thank you, Lars, and good morning, everyone. Reported revenue for Q1 increased by DKK 17 million or 0% compared to last year.

Organic growth contributed around DKK 393 million or around 6% to reported revenue. Divested businesses related to Skin Care in December '24 reduced reported revenue by DKK 77 million or around 1%.

Foreign exchange rates reduced reported revenue by DKK 299 million or around 4%, mostly related to the depreciation of the US dollar, the British pound, and a basket of emerging market currencies against the Danish krone. Please turn to slide number 6.

Gross profit for Q1 amounted to DKK 4.7 billion, corresponding to a gross margin of 67% compared to 68% last year. The gross margin was negatively impacted by currencies of around 30 basis points and ramp-up costs in Costa Rica and Portugal.

This was partly offset by favorable impact from lower inflation on raw materials, freight, and utilities. Country and product mix also had a positive impact.

Operating expenses for Q1 amounted to around DKK 2.9 billion or 2% increase compared to last year. The distribution-to-sales ratio for Q1 was 33%, on par with last year.

In absolute terms, the distribution costs were also in line with last year. The flat development in distribution costs reflects DKK 20 million in one-off logistics costs in Q1 related to the new distribution center and lower sales costs in China following the organizational restructuring in Q1 last year.

This was partly offset by one-off costs to enhance Kerecis' go-to-market model under the new Medicare reimbursement model. The development in distribution costs were also positively impacted by the depreciation of the US dollar against the Danish krone.

The admin-to-sales ratio for Q1 was 5% compared to 4% last year, and includes around DKK 15 million in one-off advisory costs incurred by Kerecis in connection with the recent CMS regulatory changes in the US outpatient setting. The R&D-to-sales ratio for Q1 was 4% compared to 3% last year, reflecting phasing of costs within Chronic Care R&D and high activity levels in Kerecis.

Overall, this resulted in an operating profit before special items of DKK 1.9 billion in Q1. In constant currencies, EBIT grew 3% compared to last year, while reported EBIT declined 3%.

The EBIT margin before special items for Q1 was 26% compared to 27% last year, negatively impacted by the significantly reduced EBIT margin in Kerecis due to lower organic growth and large one-off costs. Currencies also had a negative impact on the reported EBIT margin of around 30 basis points, mostly related to the depreciation of the US dollar, the British pound, and a basket of emerging markets currencies against the Danish krone, as well as appreciation of the Hungarian forint against the Danish krone.

Financial items in Q1 were a net expense of DKK 24 million compared to a net expense of DKK 69 million in Q1 last year, reflecting lower interest expenses and gains on exchange rate adjustments, mostly related to the US dollar. The blended interest rate was around 2.6% in Q1, down from around 3.1% in Q1 last year.

The tax expense in Q1 was DKK 394 million compared to an ordinary tax expense of DKK 389 million last year and a total tax expense of DKK 725 million last year, due to a non-recurring expense of DKK 336 million related to the transfer of Kerecis' intellectual property from Iceland to Denmark. The tax rate was 22%, on par with ordinary tax rate last year.

As a result, the net profit before special items and adjusted for the non-recurring tax expense last year decreased by DKK 14 million in Q1, and adjusted diluted earnings per share before special items decreased by 1%. Please turn to slide 7.

Operating cash flow for Q1 was an inflow of DKK 2.2 billion compared to an inflow of DKK 2 billion in Q1 last year. The positive development in cash flows was mostly driven by lower financial items, partly offset by higher income tax paid.

Cash flow from investing activities was an outflow of DKK 412 million compared to an outflow of DKK 133 million last year. The increase partly reflects a low baseline due to the DKK 192 million impact from the divestment of Skin Care business last year.

CAPEX in Q1 amounted to DKK 414 million with a CAPEX-to-sales ratio of 6% compared to 4% last year. CAPEX in Q1 includes around DKK 97 million related to the new manufacturing site in Portugal, which is expected to be in operations in Q4 this year.

As a result, the free cash flow for Q1 was an inflow of DKK 1.8 billion compared to an inflow of DKK 1.9 billion last year. Excluding benefit from the divestment last year, the free cash flow increase in the first quarter was 8%.

The free cash flow-to-sales ratio was 26% compared to 24% last year, and the trailing 12-month cash conversion was 82%. Net working capital amounted to around 25% of sales, on par with last year.

Finally, the return on invested capital after tax and before special items was 15%, on par with last year, adjusted for the impact from the Kerecis IP transfer last year. In January, we refinanced our €800 million credit facility, retaining the facility's existing terms and conditions.

The structure remains a standard credit facility, and the facility now matures in January '29. Now let's look at the guidance for the 2025/26 financial year.

Please turn to slide number 8. For the 2025/26 financial year, we continue to expect organic revenue growth of around 7% and around 7% EBIT growth in constant currencies before special items.

We also continue to expect a return on invested capital of around 16%, up around 1% percentage point from 15% adjusted last year. The organic revenue growth guidance of around 7% assumes continued good momentum in Chronic Care.

In Interventional Urology, we now expect high single-digit growth versus mid-single-digit growth previously, following a stronger quarter. In Wound and Tissue Repair, we now expect Kerecis to deliver growth of around 10% versus around 20% previously, reflecting the significant sales disruption from Medicare reimbursement changes in the outpatient setting and the high uncertainty around the timing of the recovery.

Within Advanced Wound Dressings, we continue to expect negative impact from the product return in China in the first 9 months of the year. Reported revenue growth in Danish kroner is now expected at around 4% from around 4% to 5% previously and assumes around 3 percentage points negative impact from currencies, up from around 2% to 3% percentage points previously.

The worsened currency outlook is mostly driven by the further depreciation of the US dollar. For the year, we continue to expect the negative currency impact to be driven primarily by the US dollar and to a smaller extent the British pound, the Chinese yuan, and now also the Japanese yen.

The EBIT growth in constant currencies of around 7% assumes stable inflation levels and continued ramp-up costs related to our manufacturing sites in Costa Rica and Portugal. The EBIT growth guidance also includes the initiation of IMPACT4 investments, including global technology investments and AI, investments towards the new Bowel Care opportunity in the US, and investments related to Entibia.

For Kerecis, we expect a significant EBIT margin uplift rest of the year, with Kerecis' full-year EBIT margin around double digit, compared to 1% in Q1. We expect currencies to have a negative impact on the reported EBIT margin of around 50 basis points, driven by the depreciation of the US dollar and the British pound against the Danish krone, and the appreciation of the Hungarian forint against the Danish krone.

In terms of phasing, we expect the organic revenue growth and EBIT growth in constant currencies to be second-half weighted, following a soft start here in Q1 as expected. For 2025/26, we continue to expect around DKK 50 million in special items, and we also continue to expect net financial expenses of around minus DKK 500 million based on spot rates as of February 4th, down from around DKK 1 billion in 2024/25.

The effective tax rate for 2025/26 is still expected to be around 22%. Net profit is expected to significantly increase year-over-year as 2024/25 was impacted by extraordinarily high special items, high financial items due to negative exchange rate adjustments, and finally the extraordinary tax expense related to the transfer of Kerecis' intellectual property.

The CAPEX-to-sales ratio is still expected at around 5%, and net working capital is still expected at around 25%. Our guidance is based on the knowledge we have today, and assumes immaterial impact from tariffs as we expect our products to remain exempted.

Thank you very much, operator. We are now ready to take questions.

Good morning. Thank you for taking my questions.

Three, please. Firstly, just on the reiterated guidance, can you talk us through the offsets you see, given the Kerecis lower growth and margin expectations for the full year and how they should be a headwind to group profitability?

Secondly, can you help us unpack the further weakness you're seeing in skin substitutes, and why you expect this to persist over the course of the year, and you've obviously noted more favorable pricing versus peers? What is the level of growth you're seeing in the inpatient setting and how do you see this over the course of the year?

If you can put all of this into context with your longer-term ambition for Kerecis, that would be helpful. Then thirdly, if you can walk us through the confidence that you have in terms of the raised Interventional Urology guide, where you see Women's Health and Men's Health growing in the first quarter, and expectations for the full year.

Are we past the risks from bulking agents to the Women's Health business? Thank you.

Yes. Hello, Hassan, and thanks for your questions.

I will start with the first one. As I understood your question, that was the moving parts on our organic growth and EBIT growth guidance.

As I just mentioned, we are keeping our organic growth and EBIT growth guidance in fixed currencies of around 7%. We are expecting our urology business to improve after a good first quarter, but also due to the fact that we have now the recall of the product we made last year behind us.

The underlying Men's Health business continue to be strong. That is an important assumption.

Secondly, we see good growth in rest of the year for our Chronic business. That is then offset by the adjustment in terms of the Kerecis outlook for the year.

As just mentioned, we have reduced our outlook for Kerecis to now around 10%. In terms of the EBIT growth guidance, I also just mentioned that we are expecting the rest of the year that the EBIT growth will improve as a result of higher growth, but also as a result of significantly improvement in the underlying Kerecis margin.

We had in the Q1 quite significant one-offs related to Kerecis, and we expect that to be fully behind us. That's the other key element.

We are expecting the Kerecis underlying margin to improve to double-digit levels. That's some of the key moving parts.

Lars?

Yes. On the Kerecis side, this is a really strange situation to be in because we have known for such a long time now that there would be an LCD that was finally announced on the 16th of December.

I can't even imagine what kind of situation we would be in if we had not been on the short list of 18 products when we're having this discussion. We are very satisfied to see that we out of 340 products had one of or two of the products that were mentioned on the list of 18 products that were covered by the LCD.

We had two products in the market, therefore, it's everything that we had in the market that was covered by that. There was also a price point on this on $127 per square centimeter.

One of the products could pass that one, and that is the MariGen product. We have immediately also taken steps to enlarge that portfolio of products to be even more competitive in this space in the future.

We also see that there are a pretty large number of competitors that would not be able to meet the price criteria. Therefore, we actually see this movement in the, you could say, the 20% of the total sales of Kerecis that are the outpatient Medicare-covered part of the portfolio, we actually see that as a positive future omen, to speak.

The other positive part about this is that more or less the rest of the portfolio we have is in inpatient. That is an environment where clinical data historically have been much more important.

Now we basically have Medicare's own verdict that the clinical efficacy of our products is or are stellar. In that sense, we see this really as a short-term disruption.

The disruption is that the payers or the private offices that are using our products, they don't have clarity at this point in time of what is covered by Medicare and what is not. Therefore, we basically see some hesitancy from the professionals to buy the products right now.

The fact of the matter is that there are fewer products available in the market to cover the same number of wounds that we had before. We see this as positive.

Then we have question number 3? Yeah.

The

question number 3, Hassan, that was related to urology, as I remember. I think actually I talked a bit to it earlier.

Overall, the urology business, as I said, is off to a good start in Q1. We continue to have a good Men's Health development in Q1, actually as we had last year in the second half as well.

We expect that to continue. Then the other important factor is that now the recall of the product we had last year is now fully behind us.

We actually seeing a good underlying development within our urology business, and that's also why we see that business to deliver high single-digit growth for this financial year.

Very helpful. Thank you both.

Hi. Thanks for taking my questions.

Also just on Kerecis. You mentioned in the outpatient setting that it was declining here in Q1.

I was curious to hear what you have seen here at the beginning of the year after the implementation of the fixed price cap. Then maybe also if you could specify how much of a one-off effect you had in Kerecis EBIT margin here in Q1 just to understand where the underlying margin would be.

Then also if you could just give us a indication of what it would take to end up in a situation where you would have to write off this asset. Thanks.

In terms of your questions, Jesper, thank you for that. Lars now just talked about Kerecis.

We expect the Kerecis growth for this financial year to be around double digit. We're still expecting some turmoil in Q2 before it's starting to improve in the second half.

Overall, for the year, we're looking at a growth with the current knowledge of around double digit. In terms of EBIT margin, as I mentioned, we have included some one-offs in the first quarter related to advisory in relation to the reimbursement changes.

We have also included one-offs related to our go-to-market model. In total, it is around DKK 30 million.

That is fully behind us, and that's also why we now expect from this quarter and onwards that the underlying Kerecis margin will improve, but it will not improve to the levels we had anticipated when we started the year. Right now, I'm expecting the underlying Kerecis margin to be around double digit.

The last question, can you just repeat that?

Clearly, the growth has decelerated and margins too to some extent compared to what you expected when you originally bought the asset. I'm just wondering if this doesn't improve, will we end up in a situation where you would have to do a write-off of the book value of the asset?

Yeah. Thanks.

In what scenario will we end up or what would require to get to that?

Yeah. It's clearly that this year, the third year where after we acquired Kerecis due to the turmoil that Lars described earlier, is not developing as we had anticipated.

We see this as a temporary dip. We are still focusing a lot on delivering on the case, and we also see that the case is intact long-term.

Short-term, we have some challenges this year related to the growth and the margin. In terms of your other question, the impairment test, it's something we are evaluating on an annual basis.

Again, we're looking at a business that we believe will deliver the long-term expectations that we also communicated at the IMPACT4 strategy back in September last year, where we said that the overall Wound and Tissue Repair business would grow around double digit.

Thanks.

Thank you.

Hi there. Thanks for taking the questions.

I have three also, please. The first is on Kerecis' profitability.

Thinking kind of longer term, given the new environment, have your assumptions changed around where peak profitability for Kerecis could be in terms of EBIT margin? The next question on wound dressings.

Excluding the recall and obviously the contract manufacturing business, growth here still looks challenged. What drove this, and was this in line with your expectations, and what are your expectations for the remainder of the year?

Then my last question was on Entibia. Now that it's been submitted for PMA approval, can you share any data on clinical performance, when do you expect approval, and can you talk about your expectations for launch?

Thank you.

Yeah. Thanks a lot, Jack.

Your question around the Kerecis EBIT margin. Yes, as I mentioned earlier, we had anticipated that the EBIT margin would improve further this year.

Originally, as I explained earlier, to a level of around 20%. Now it is sitting that's at least our expectation around 10%, including the one-offs in the first quarter.

I'm still expecting that over the IMPACT4 strategy, we will improve also the underlying EBIT margin of Kerecis to a level of around the group margin, as we have said when we acquired the Kerecis business 2.5 years ago. Lars, number two on

wound? On the wound care, well, yes, technically, it is a recall.

I would say that it's basically a consequence of the long-term plan for China to be self-supplying inside of pharma and medical devices. There are no product flaws on the product that we have taken out, but it's basically just been replaced with a Chinese product in the market.

That was, of course, unexpected when it came last year, but we can't say that we have not heard that this is a movement that happens in that country. Many other industries and also other competitors have experienced the same.

However, we have still a very large business in China that we are protecting to the best of our abilities. It means that our growth have temporarily been set back, and it also means that we don't foresee that we'll have growth in China which is more than low single digit in the strategic period that we're in, and we still expect that that will be the case.

Your final question, Jack, related to Entibia, it is following the plan. We have submitted it to FDA, and we are still expecting that we will be able to launch next financial year, '26/'27.

We still have high expectations for this technology to support our long-term growth ambition for the urology business to be in the high single-digit level. That is tracking as planned.

Thanks very much.

Good morning. Thanks a lot for taking my questions.

First one is also on Kerecis. You described well also the positive dynamics.

According to your statement, the inpatient setting should be pretty fine. If outpatient is just 20% of Kerecis and you reduce your segmental guidance for Kerecis by 10 percentage points, it means mathematically that the outpatient sales experience a very hard stop.

Could you therefore also comment about some inpatient dynamics, whether you see there any underlying growth deterioration? The second question is on Ostomy Care.

You said about pretty harsh headwind coming from China. Can you comment how Ostomy Care growth would have been excluding this China effect, please?

On Kerecis, in a sense, the inpatient part of the sales should be completely unchanged. There is a little bit of effect on it because some of the vendors that has only participated in the outpatient setting, they are now testing their products, of course, in the inpatient setting.

That gives a little bit of turmoil there. Prices and everything else is completely unchanged on the inpatient side.

As I also said, it is a very clinically driven environment. We have just gotten sort of a very strong underlying testament to the fact that our products they really have strong clinical efficacy.

We actually see that as an opportunity. It is a strong growth environment also in the inpatient clinic, of course over time that is also covering for what is happening now in the outpatient side.

The whole reform's aim and purpose was to take value out of the outpatient segment seen from the Medicare point of view, and that is definitely happening. As I said before, we see this as a potential upside longer term.

We definitely see this as a positive development. We understand the actions that the government are taking, and we see ourselves even better positioned than we would have hoped for in this situation.

On the Ostomy side, I don't think we give a number when we take China out. Of course we are market leaders in China.

We have a very, very high market share in the community market. The fact that we have this part not growing, that impacts the numbers.

We are going to see much better numbers in Ostomy in the rest of the year. We are basically just having a very low first quarter due to comparison numbers, we see that going up.

Thank you. Just a very quick follow-up.

For the inpatient setting at Kerecis, would you describe a 20% growth momentum still as valid?

I don't have a comment to the exact number there, but it's definitely a very healthy double-digit growth.

Thank you.

On the UroMedica side, as I said, this is complementing our portfolio in the Men's Health. Today in Men's Health, we have the penile implant for erectile dysfunction.

We basically have one competitor in that space, and they also address urinary incontinence in men in the same space. That's also what we do with this device.

The difference is that this is minimally invasive. Therefore, we see it as a very good way to complement our product portfolio and increase our competitiveness in this specific market segment.

Those are really the benefits. We know it works, it is in the market already, it is accepted by the professionals, and now we can put effort behind it and thereby also help getting it into the market and educating much more doctors to use it.

Could you take the second question, Anders? I didn't write it down.

The second question was around the MariGen and Shield. We have not really disclosed the split between these two from a revenue point of view.

We have said that the Shield product price was above the cap of $127 US dollar per square centimeter, and the MariGen is lower than the cap. The whole work is now about to convert from the Shield to the MariGen.

That's what we have initiated, and that's the focus we are having the rest of the year, including launching new products within the MariGen portfolio. That's really the focus we are having.

Thank you. If I could follow up with Lars on the UroMedica comment.

I know you mentioned the impact on financials is immaterial, but do you anticipate having to ramp up the sales force for this business or can your existing urology sales force sell this product? Thank you.

It fits directly into the existing sales force that we have because it's the same call points that we're having. Of course, when we see it take off, we also are going to step up accordingly.

From the beginning, it's going to be in the hands of us, and we have significantly higher sales pressure in the market than the former owner.

Okay. Thank you so much.

Yes. I think that's a super good question, Veronika, because we are talking about the outpatient clinic here.

As I said, that's 20 that of our total sales in Kerecis, the 20% comes from Medicare-reimbursed outpatient setting. There's no doubt that that has been an exceptionally fast-growing market.

If you see the market data on it, you just see that it's literally exploding within the last 3 years. It makes a lot of sense that it's being addressed, of course, by the payers.

For some doctors, of course, they would discontinue using it because the financial incentive to use it is simply too low compared to what they have been used to. I don't know the price of the products that they're shifting to.

You also know that these are real businesses that we are selling into. These kind of wounds, they don't go away, there'll still be lots of need for these kind of products.

It's, of course, a different price level. It is, however, a price level that we have been used to living with.

That's what we have been making most of our sales on. Therefore, we don't see that the need goes away.

Of course, since it's both a doctor and a business person, they will find a way to try to substitute sort of with a good fit between what is helpful for the patient and what is a good financial outcome also for the doctor. With the prices that we are having and the efficacy of MariGen, we think that we are super well-positioned.

That's the reason why we think that we are in that position. This whole change is then not affecting the biggest part of our business, which is the inpatient part.

That goes on as it was before. We just think that we potentially have a better position than we had before because we have Medicare's own assessment of all the clinical data they have received, and we simply have super strong clinical data that we can take to these payers and users, and that puts us in a better position.

That is such a big part of the business, and it's growing so fast that it is also covering parts of the downside that we see in the outpatient clinic on the short term on the outpatient segment. We see the outpatient segment will have a healthy growth going forward after we have sort of having this shake-up, and we think that we are super well-positioned for that.

Thank you. Then my second question is for Anders.

It's a bit financial in nature, but just obviously looking at the year, I know you always said to us we'd start below the full-year guide, but obviously especially on EBIT growth, we still have quite a ways to go to get to the full year. I don't know, Anders, if you can give us a little bit of color on how you'd expect the growth phasing both from an organic sales perspective and from an adjusted EBIT perspective to look like through the remainder of the year.

Thank you, guys.

Thanks a lot, Veronika, for your second question. For the rest of the year, first and foremost, we are expecting growth will improve from this quarter and onwards, driven by the factors we have been discussing.

We are expecting Ostomy/the Chronic business to improve. We are expecting the urology business to continue at the levels we have seen in Q1.

Then we have been talking about Kerecis quite a few times during the call that we are expecting that business to sit around the double digit. Overall, we are expecting growth to improve versus Q1.

That's an important factor. Secondly, gross margin ballpark in at the levels we had anticipated for Q1.

However, the FX impact is real, also due to the Hungarian forint. I'm expecting the gross margin to develop as we have said previously.

Then on the cost side, we have talked quite a bit now to the one-off costs related to Kerecis that is behind us. We are expecting the underlying Kerecis margin to improve.

We will continue to also run a prudent costs across the business. We have also agreed to initiate the IMPACT4 investments, especially related to some of the opportunities we see in the US.

We have this Bowel Care opportunity. We are initiating investments in technology, AI.

Then when we are ready, we will also initiate the investments to support the Entibia launch. Overall, are we expecting both the top-line growth, but also the EBIT growth to improve from this quarter versus Q1 to deliver the full year of around 7% organic growth and 7% EBIT growth in constant currencies.

Okay. Anders.

Yeah.

Thanks a lot, Julien. Let me start with the first one related to our Voice and Respiratory Care business.

We delivered 8% growth in the first quarter. Our laryngectomy business continued to develop really well with high single-digit growth.

We continue to see our laryngectomy business to perform well here in Europe, but also in the US and across our distributor markets, also supported by the Provox Life launch that is still ongoing in a few markets as well. The tracheostomy business was a little bit more soft than we also anticipated.

It was growing mid-single digit. It's really due to some order phasing in our emerging markets, and we expect that to improve rest of the year.

Overall, 8% growth in Q1 was okay, but we also expect the total Voice and Respiratory Care business to improve, especially driven by the tracheostomy business the rest of the year. On Wound and Tissue Repair, we don't break it down to that level where we take the growth when we have taken out a couple of the more problematic areas.

Actually, when we take them out, it's actually quite positive. Then the contract manufacturing, it's double-digit growth in Q1, but we don't have a lot of visibility on it, to be honest.

Therefore, we believe it to be flat for the year. That can vary.

We don't expect it to be more negative than that, but we keep it in our own books that we keep it just neutral.

Yes. I would love to have the answer to the timeline on this also.

We have not tried this before, to be quite honest. I don't think that the market have seen anything like this before.

What we do know is that Medicare is changing their prices. It shouldn't be hard because there is a limit to what you can get now, the $127.

We have asked what is the normal timeline when Medicare is changing their pricing. They have a database with all the prices in them.

That's normally 3 months. That's at least what we anticipate will happen, and it's important that the price list is updated for people who are using products that are covered by Medicare.

It is within 3 months. That's also why we say that we expect that the effect will be the hardest in this quarter.

Any sort of effect on the inpatient side, it's a very different market dynamic. It's also different products that you have inside or in the inpatient setting and in the outpatient setting.

We don't anticipate a lot of turmoil going in that direction from it. What the government have been addressing here is the explosive cost, to speak, in the outpatient setting.

It's not the same picture internally in the hospitals or in the inpatient setting, we don't assume anything there. I don't know if it's a help to you, but what I can do here is I can share with you what we know.

Of course, we're also guessing how long time does it take for us to be on the safe side. We expect in the way that we see it right now that it's bottoming out in this current quarter.

To your last

Thanks, Lars.

The second one that was again the urology business. No, there was no one-offs in Q1.

Again, the Men's Health business has actually been looking very solid from a growth point of view for quite a number of quarters in a row now. I just want to remind you that last year both Q3, but also Q4, last year's second half was also at a double-digit level, and we saw that again in Q1.

The underlying momentum in Men's Health is strong, and we're expecting that to continue for rest of the year. On top of that, we had this recall last year that we have now fully behind us.

That's why the underlying momentum within urology we have increased to now high single digit versus mid-single digit when we started the year.

We are a couple of minutes after the hour, so that was unfortunately the last question, but we will have a chance to catch up in the near future. Thank you very much, everybody.