Dear ladies and gentlemen, welcome to the conference call of Carl Zeiss Meditec AG. At our customer's request, this conference will be recorded. As a reminder, all participants will be in a listen-only mode. After the presentation, there will be an opportunity to ask questions. If any participant has difficulties hearing the conference, please press star key followed by zero on your telephone for operator assistance. May I now hand you over to Sebastian Frericks, Head of Investor Relations, who will lead you through this conference. Please go ahead, sir. Yeah. Good morning, ladies and gentlemen. Thanks for joining our call today, about the three months of fiscal year 2021. My name is Sebastian Frericks, I'm Director of Investor Relations, and with me as usual are our President and CEO, Dr. Ludwin Monz, and our CFO, Justus Wehmer. I would like to hand over to our management now to give you an intro about the first quarter, and afterwards we look forward to taking your questions. Ludwin, please go ahead, sir. Good morning, ladies and gentlemen. I'm Ludwin Monz. Welcome to Carl Zeiss Meditec's Three Months 2021 Analyst Conference. On slide two of the slide deck, you see the outline of today's conference call. I will start the presentation with an overview about our three-month results, and afterwards my colleague, Justus Wehmer, will provide you more details on the financials in the next section of the presentation. The third section will provide you some hopefully interesting market data on the COVID-19 crisis. Finally, I will close with an outlook. Let's have a look at the overview on slide three. You might remember that we were a bit cautious with our outlook for the first quarter in the last call. The reason was a slow start into the fiscal year in October. However, things improved very much over the course of the quarter, and we are quite happy with the results. We ended the quarter with revenues of EUR 369 million, and this is pretty much the same number we reached in Q1 in prior year. It's important to note that we had some negative currency effects, and that the pandemic is still having some negative impact, mainly on the top line. On a constant currency basis, revenues reached EUR 379 million, which corresponds to nearly 3% growth. We saw a particularly positive development in Asia, but also relatively stable development in the other regions, EMEA and Americas. Let me note that the markets of our two SBUs are impacted by the pandemic differently. While microsurgery is still significantly behind prior year, OPT is growing again, driven by recurring revenue. In other words, while patients are being treated and procedure numbers are mainly back to normal, capital investment is still lagging behind. Justus will provide you more details on the growth drivers in just a few moments. Before that, let me mention that our EBIT margin increased to 19.9% versus 15.4% in prior year. The outstanding development is due to relatively high sales figures, a positive product mix, a favorable regional mix, and last but not least, a significantly reduced expense base. The OpEx reduction is due to lower sales and marketing expenses in particular as the fall trade shows were all virtual or digital. Furthermore, our cost reduction initiative resulted in lower general and administration costs. Our net income reached about EUR 46 million, which corresponds to earnings per share of EUR 0.52. In prior year, we had EUR 0.43. Overall, as you see and hopefully agree, a positive business development despite of the pandemic. I will hand over to my colleague, Justus, who will discuss these figures more in detail. Justus, please. Yeah. Thank you, Ludwin. Good morning. Welcome also from my side. I'm now going to give you a more detailed overview of our financials starting with the performance of our strategic business unit, OPT, Ophthalmic Devices. Revenue came in for OPT with EUR 283 million compared to prior year, a reported increase of 5.2% and at constant currency, 8.2%. Particularly, the recurring revenue contribution was again quite strong. Equipment sales also saw improvements, especially towards the end of the quarter. Finally generated an almost stable result for Q1. In our refractive business, we are seeing an excellent development, but also IOLs have been doing well after the slower months in Q3 and Q4 of last fiscal year. We see new growth in the APAC region. More on this later on our slide on regional developments. OPT EBIT margin increased significantly compared to last year to 19.4% due to the sales development combined with a positive mix situation and as Ludwin mentioned, substantial reductions in our OpEx, especially in our discretionary expenses. Let's move to MCS. Microsurgery delivered an improved performance given the actual circumstances, with revenue of roughly EUR 85 million versus EUR 100 million in the previous year. The revenue gap of around 14.7%, or at constant currency, 12.3%, did further shrink considering the much weaker results of the second half of fiscal year 2019/2020. Remember that in Q4 of our last fiscal year, we were still more than 30% down. In addition, we are seeing the order intake normalizing with nearly stable order entry in the quarter, particularly the month of December having come in quite strong. This is giving us confidence for continued recovery for the next few months. EBIT margin is still at a solid level, supported by cost awareness in our organization, though down on the year, of course, given the top-line pressure. The regional development is showing the same trend we have been seeing throughout the COVID-19 pandemic, with APAC outperforming the rest of the world. Corrected for currency headwinds, both EMEA and Americas are basically at par with previous year levels. Improvements are clearly visible across all regions. Americas' revenue of EUR 102 million represents a decrease of -6.4%, but at constant currency, this is almost stable with only 0.2% lower than previous year. The U.S. was heavily impacted by the strong U.S. dollar devaluation versus the EUR. The decrease was -8%, but at constant currency, this was only -1%. Latin America in total, actually with a slight increase. However, Brazil is still heavily affected by the pandemic and could not yet return to growth. EMEA, with EUR 109 million. A slight decrease as reported of -8%. However, at constant currency, almost exactly on the level that we have seen last year. Of course, the lockdowns in Europe still show a very heterogeneous development. However, except for Italy, all major economies are back to growth. We have seen, for example, in Germany, but also Spain, a really nice recovery, with high single-digit, even double-digit growth. France is back to growth, and U.K. is extremely strong versus last year. There we also clearly see some impact of pre-Brexit sales that drove sales in our last quarter. APAC came in at EUR 158 million revenue, which was a growth of 5.5%, or at constant currency, 6.6%. China with 15% growth. South Korea also strong again. Japan improving, but still on a lower level than in the previous year. However, markets like India still remain heavily affected by the pandemic and still show a significant year-over-year decline. Let's have a look at the P&L gross margin slightly increased with 56% compared to previous year, supported by favorable regional and product mix effects from OPT that were in part, however, offset by a weaker microsurgery contribution. We have seen a significant OpEx reduction in total. R&D, however, increased due to Excuse me, this was just some noise. I hope you could hear me. I repeat the sentence. R&D increased due to continuous investment in strategic development projects, mainly in the field of surgical ophthalmology and digitalization, though in absolute terms, expenses are down slightly from previous quarter. Sales and marketing expenses decreased significantly, as was already mentioned by Ludwin. In particular, discretionary costs like travel, entertainment, advertising, trade shows were down. We continue to go virtual for a good part of our customer interactions, as mentioned before, this is clearly the largest effect regarding our OpEx trend. EBIT of EUR 73 million, above prior year's EUR 57 million, EBIT margin at 19.9% versus the 15.4% last year at this time. Please note that this margin results from a somewhat unique constellation in Q1. On the one hand side, we have seen a solid sales recovery. On the other side, in many countries, our sales operations are still mainly digital. We do not expect this to be the prevailing scenario through this fiscal year. With life returning to some normality in summer, we should also see our sales and marketing expenses increasing stronger. A quick look at our adjusted EBIT. The EBIT margin here reached 19.8%. There are rather small effects related to purchase price allocation, those are related to depreciation in both periods. We adjusted the one-time effect related to the sale of the property. Cash flow. The operating cash flow came in with EUR 41 million, well above last year's EUR 26 million. Significantly driven, of course, by the positive EBIT and also positive working capital development. We saw here significant increase in accounts receivables, of course, due to the sales development. On the other hand, we decreased our inventories. Cash flow from investing activities is mainly some payments and intangible assets. Here, we have the China production that we are ramping up and with equipment and all the installations in the plant. Cash flow from financing activities mainly influenced by changes in receivables and payables on our treasury accounts, our net liquidity improved to EUR 730 million. Thank you very much. With that, I hand it back to Ludwin. Hello? Mr. Monz is still on mute. Hello? Here's Justus Wehmer. I think we may have just lost Ludwin for a moment here. Maybe we continue with the slide, I would suggest, and he'll probably be back in a moment. Yeah, I would think so. I just take over here, and we go in our highlights section, and here we would like to discuss some market development in light of the pandemic. We are moving to slide 12. This slide is an update of a similar one that we showed actually in our analyst conference in December. You know, cataract surgery is a so-called elective procedure because the surgery can be postponed for a while without negative impact on the patient. Elective surgeries were canceled in most countries at the height of the first wave of the COVID-19 pandemic in spring of 2020, IOL markets dropped significantly. You can see from the chart, we estimate that the global IOL market volume dropped by almost 60% at the peak of the crisis from the average level of 2019. The data was collected by Market Scope, a well-known market research firm for the ophthalmology market. Market recovery began in summer, with some Asian countries, such as China and South Korea, leading the way. Recovery was faster in the U.S. and in Germany than in many other parts of Europe, such as France, Spain, or Italy, which were heavily impacted by COVID-19 and took more time to recover in the first wave. You can see that in the fourth quarter of 2020, global IOL volumes recovered mostly and reached almost the 2019 average baseline. The figure was down a mere 5% from Q4 2019. As you would expect from our previous remarks, Asia-Pacific and the Americas are leading the recovery, while EMEA is still lagging somewhat behind. It is possible that there's going to be some pent-up demand in a few of these lagging markets once the impact of the pandemic subsides. However, we find it very hard to predict the timing and quantity of this effect. The discussion is probably somewhat premature at this point in time. Let's turn to the next slide. This again is also an updated slide from our December presentation highlighting the heterogeneous regional development, and particularly the relative strength of the APAC region. The graph illustrates the relative performance of the three regions quarter by quarter in comparison to the performance one year ago. Therefore, the representation eliminates the cyclicity of the business. You can see how APAC, as our largest region, outperformed all other regions throughout the crisis. APAC is the dark blue bar. The region returned to growth in Q1 2021 for the first time since the beginning of the crisis around a year ago. Looking ahead, we expect APAC to generate further growth as the region is already closer to normality than the Western Hemisphere. Also for the total of the three regions, we see an encouraging positive trend, and we assume this to continue. Can you hear me now? Oh, yeah. Ludwin. Yeah, are you back? Yeah, I apologize. Had some technical difficulties here, but looks like it's working again. Thank you, Justus, for presenting the highlight topic, which I believe is quite interesting to see how things developed. I believe that's a good data actually to predict how this trend will continue. That's my transition to our last topic, which is the outlook. Please have a look at the outlook, slide 15. We are convinced that the medical market remains to be attractive in the mid and long term and that the drivers are intact. This is true for both our businesses, microsurgery and ophthalmology. Therefore, once the COVID-19 crisis will be over in the mid and long term, the market should return to sustainable growth. For fiscal year 2021, we expect to return to growth in both sales and EBIT. We assume the current recovery trend in sales and profits to continue. When modeling the full year for 2021, please keep in mind that one of the main drivers for the strong Q1 EBIT, namely the relatively low level of sales and marketing expenses, is unlikely to be sustainable for the full year, and it is more likely, in our view, to expect a cost normalization in the second half of the year. However, as we cannot predict the course of the pandemic, it's currently not possible to put this into numbers. Now, in the midterm, we expect to return to pre-crisis level of revenue and a profitability of sustainably above 18% for the EBIT margin. This was also our guidance in the past, so we confirm this midterm guidance. Given the strong start into the fiscal year, it is possible that we might even reach the target range of the EBIT margin within the current year already. However, this would require that the lower cost level and the favorable product mix would continue, which we cannot know for sure today. We will likely update you with a better and more precise guidance around the time of the half year reporting. Now, ladies and gentlemen, this concludes our prepared remarks and we are now happy to take your questions. I hand back to the moderator to explain the procedure. Thank you very much. Ladies and gentlemen, we will now begin our question and answer session. If you have a question for our speakers, please dial zero one on your telephone keypad now to enter the queue. Once your name has been announced, you can ask your question. If you find your questions answered before it's your turn to speak, you can dial a zero two to cancel your question. If you are using speaker equipment today, please lift the handset before making your selection. One moment please, for the first question. The first question we received is from Patrick Wood of Bank of America. Your line is now open, sir. Please go ahead. Perfect. Thank you very much for taking my questions. I have two, please. On the first one, thank you for the IOL market share data as always. Obviously looking at the growth that you guys had in OPT and the split of that, it seems fairly clear that you must be making some fairly considerable share gains within things like IOLs at the global level. I guess the question is, do you think that that share gain is more a function that you're far more exposed to APAC than some of your peers? Do you think within the markets that you operate, you're still taking share? That's my first question. The second question, I'm just curious in terms of the end clinics as you're looking at them and the surgeons, is pricing holding stable or are you seeing some price discounts that people are putting through to stimulate demand and get consumers back to the clinic, or is pricing remaining fairly stable? Thanks, guys. Yeah. Thanks for your questions. On the first one, yeah, as we have been growing faster than the markets for quite a while, we are gaining market share. These days, in the midst of the pandemic, it's very difficult to really compare reliably as the various competitors have different regional mix, right? The impact of the pandemic on the competitors is also different. I would say the comparison is probably not as reliable as usual. This is why I would be very careful to now read shifts of market share from the data. That's just premature, and I believe we need to wait until things return to more stable situation. Overall, it's certainly true that our strong growth in APAC drives our market share in that region. It's basically the same what I said for the entire world. Yes, we have been growing much stronger than the market in APAC for quite a while, so we definitely must have gained market share. That's for sure. Yeah, that's probably all I have to say to that one. Regarding pricing and discounting, actually, I'm not aware of large changes in pricing, and I believe the price situation is currently stable. As you see, and could see from our market data, the procedures are mainly back to normal, so there's no reason to do anything on pricing and no need. From my point of view. And on the equipment side, again, the reason that this is slow is not price, right? The reason is that customers might have different priorities for the time being, and so price will not help here. To make a long story short, no, we do not see major changes in pricing. Very clear. Thank you for the answers. The next question received is from Scott Bardo of Berenberg. Your line is now open, sir. Please go ahead. Yeah, good morning. Thanks very much for taking the questions. I wonder if you could share some thoughts about the gross margin development this fiscal year. I think your first quarter started on the gross margin level a little bit lower than I would have expected, considering the strong mix you receive from consumables and recurring revenues. Of course, I'm mindful of the fact that there'll be some sort of delayed recovery in your lower margin capital business. I just wonder if you could talk about the moving parts on gross margin, please, for the full year. Second question, again, related to margin, operating margin. Clearly very difficult to forecast all these moving parts. I don't think Zeiss has ever started with such a strong margin as you have this quarter. If we look back this time last year, your SG&A costs or your Sorry, your selling and marketing costs were, I think, annualizing at EUR 330 million, EUR 340 million or so. If we do the same exercise this year, I think those costs are, say, EUR 50 million, EUR 60 million down on a sort of an annualized basis. I'm just trying to understand, really, again, what would be a reasonable expectation for selling and marketing to the best of your guidance? Should we consider when we look into the next year, you back to at or above 2019 SG&A levels? Thank you. Maybe I'll start with the second one and, Justus, you take the first one afterwards. Scott, thanks for your questions. To start with the last question you asked, will we return to the pre-crisis level in next year? I would say yes. For several reasons. There's a lot of talk about changes of travel behavior, of more virtual versus personal meetings and all that. I would not expect that to have a significant cost impact. Quite on the contrary, I believe that now, as many shows did not happen for more than one year, we will even see rather increased traveling and potentially even higher cost. Again, it's a fair assumption that the cost structure that we had in pre-crisis will be the same after the crisis. The question is, how fast will we return to that? That depends on the further development of this pandemic. Right now, as you correctly say, that's a very unusual structure that we have. I would expect that to continue for the next quarter. From today's perspective, and again, that might change, from today's perspective, I would expect a normalization of the cost in the second half of the fiscal year. Again, that's very difficult to predict. Justus, what are your thoughts on the gross margin question? Scott, I would honestly, if you compare where we were, for example, a year ago, and if you now look at our mix, you could actually say that, first of all, margin is almost exactly where it was a year ago. What happened, the typically higher contributions from MCS didn't come in, given that the business was lower, as we have just reported. That could basically be offset by the higher recurring portion. Looking forward now, obviously, the key question is, and I think we made some comments in our slides, is the recurring revenue currently somewhat, let's say, overheated by a portion of pent-up demand? That is difficult to foresee. We really lack good data for that. What does it mean for the outlook? I would really not significantly expect margins to develop dramatically different, assuming that MCS will recover over the course of the year. But likewise, the recurring revenue portion should potentially, in terms of its percentage of total revenue, level down again to the portions that we typically see, whatever 33%, 34% of total revenue and not as most recently, where it is four or five percentage points higher. So from that perspective, I do not structurally believe that we should see such a dramatic difference for gross margin through the course of the year. That's very helpful. Perhaps just one quick follow-up, if I may. Dr. Monz, impressive balance sheet dynamics now with net liquidity at over EUR 700 million. Have there been any opportunities that have unfolded throughout this crisis that makes M&A or acquisitions more likely in your mind over the next 12 months? Thanks. This question is often being asked. However, I believe that the crisis has little impact on the M&A market. This does not mean that we are not active in that field. We are actually, and we look at everything that's around and available, and we follow our M&A strategy as we've done over the last years. We will not invest in things that do not fit our strategy. We're a bit cautious here. There's nothing new. Again, it's not that through the crisis, companies run into difficulties and sell off their company. That's not the case, right? I believe it's just normal M&A level as we've seen that for the last years. Thanks so much indeed. The next question received is from Falko Friedrichs of Deutsche Bank. Your line is now open, sir. Please go ahead. Thank you and good morning. I have three questions, please. Firstly, on the microsurgery segment, could you share a bit more color on the order intake that you saw in the first quarter, sorry, and the growth expectations for this business, and maybe even provide an indication when this business could return to top line growth again? Secondly, on your refractive laser business, could you share a bit more color on your launch in the U.S. and how that is progressing versus your initial expectations for this launch? The third question is a bigger picture question on your anticipated product launches. Now, I look at it seems, you're planning to launch your IOLs in the U.S. There could be a new phaco device, there could be devices coming from your ENT business. There could be a new refractive laser equipment coming, combined with all of the new microsurgery devices you launched. I don't recall a time when your company had so many promising launches planned at the same time for a single year. I understand that you probably cannot be too specific about each launch and the exact timelines. Thinking bigger picture, what do you think are the implications of all these launches this year for the growth of your company over the next two to three years? Any qualitative insight would be very helpful. Yeah. Mr. Friedrichs, thank you. I would suggest I start with the refractive and the product launch portion, and Justus you afterwards take the order intake question for microsurgery. Second question was on refractive, the launch in the U.S. Well, overall, we touched on that a little bit also in our last conference call. We feel that we are making some good progress in the U.S. market. It looks like the only growth, in terms of treated patients, that the U.S. market in refractive is currently seeing is coming from SMILE. That's certainly good news and that will hopefully attract more attention to that new procedure, and this is why we are optimistic going forward. The other positive news, we also talked about that briefly last time is the U.S. military, which is currently using also SMILE. I again apologize that we cannot give you specifics about that for confidentiality reasons. However, the treatment of soldiers by military certainly has very high standards and this is why this might also drive the market development. Overall, yeah, it's meeting our expectations. We've always said, and we've always expected this to be a mid to long-term development, so there will not be a fast development. Customers will just slowly move into that new technology. We've seen that in other markets as well, including China, by the way, including South Korea. We were at that point of market introduction just many years ago. This is why today China and South Korea are by far more developed in terms of new technologies in refractive lasers than the U.S. The product launch question indeed is a different question, and you answered it yourself a little bit by saying, you cannot give specifics. No, I cannot give specifics. Let's try the big picture here. It's true that we have quite a strong product pipeline. Carl Zeiss Meditec has ever had that, because innovation is really the lifeblood, if you like. It's the most important driver of growth. This is why we continue to invest. I really would like to say that also during the crisis, even in our worst month, we continued to invest in research and development. However, there is of course, an impact on our R&D programs. Mainly, by the way, because we do not have access to the clinics to do clinical trials, which we always need when we develop a new product. That in the one or the other occasions, slows down our R&D programs a little bit. This is why it's also difficult to say how things will develop. Nevertheless, nothing has been canceled. There are some delays. Nothing major, but it just happens. The impact on business development, again, the reason why Carl Zeiss Meditec has been growing stronger than market for years is our innovation activity. That will continue, and you should not expect that the products which we have in the pipeline change the picture entirely. No, we will just continue to grow, hopefully at good pace, a similar pace as in the past. I would not expect a fundamental change of our position or our growth rate. It's probably going to continue. The one or the other area, both of business segments but also region-wise, it might accelerate the development, but we are not in a position to go into the details today because I cannot announce product launches. I hope that helps. Justus, maybe you can go into the first question on order intake, microsurgery. Yeah. Absolutely. I will do that. Maybe first, region-wise, because you were asking color on order intake in Q1. I think regionally spoken, the good news is that we have seen actually from all three regions an uptake in order entry. That kind of provides also confidence that this will then also continue into the current quarter, and we actually see the first indications for this. Please keep in mind that the approval for KINEVO, which is an important contributor to the MCS growth for China, we only received late in the basically, last quarter before Corona hit China. Basically, a bit more than a year ago. Which meant that, once we actually had hoped that we could then develop our funnel and projects in China, we kind of obviously were then stalled through the lockdowns. That means that we are right now pretty confident that the penetration in the Chinese market with KINEVO will actually carry good order entry now in this year, and also then turn, of course, into revenue. Therefore, your question about when do we expect MCS to return to growth, I would say we clearly are confident, if not in Q2, then certainly once we move into Q3, we should be back to year-over-year growth numbers. Not only because we then have a fairly low comparison base, because obviously Q3 of last year was already heavily hit by the pandemic, but also because we feel that then the business itself should be stabilized. Yeah. Perfect. Thank you. Before we take the next question, just a reminder, if you would like to ask a question, please press zero one on your telephone keypad. The next question received is from Markus Gola of Stifel Europe. Your line is now open, sir. Please go ahead. Great. Thank you. Good morning from my side. My two questions on China, both for you, Ludwin. The first one is on these Chinese reimbursement cuts. Is this so far only limited to monofocals, or do you see any attempts of the Chinese government to reduce prices significantly for any other of your product groups? Related to the monofocals, if prices of monofocals go down, is it fair to assume that pricing for premium IOLs in that country needs to come down as well? My second question is a follow-up on the IOL pricing dynamics. In China, your main customers are large hospitals. I believe most contracts are volume-based. If your volumes to these hospitals increase as planned, what level of price pressure do we expect here? My last question is for Justus. It is a follow-up on the margin trajectory. You touched already on this in your remarks. On the one hand, you expect an ongoing recovery in the revenues and EBIT, but on the other hand, the cost line is artificially low at the moment. I guess how we should look at this is that margin second half will be lower than in the first half, right? Related to this, are there any extra OpEx investments you need to do in the second half of this year? Thank you. Thank you for your questions. I'll start with the China question. To my understanding, what's going on right now is an initiative of the Chinese government to reduce the prices in the public hospitals for IOL surgery, and IOLs in particular. As the public hospitals mainly do monofocals, these are only partly paid out of pocket, and most of it is covered by health insurance. We see this impact on the monofocals. The premium IOLs are separate, as far as I know. Separate means it's not the same hospitals, it's not the same volume contract. It's a different mechanism. To the best of my knowledge, actually, that's independent of the current tenders, which only includes monofocals. Public hospitals tenders with monofocals. That sets the price level for monofocals in public hospitals. That might spill over to also private hospitals, although they not participate in these tenders. It's difficult to achieve higher prices in private clinics than in public hospitals. Overall, the price level for the monofocals will come down. Again, from all I know, premium lenses are a bit separate. I would not exclude that this happens at some point in time, but for the time being, the price level of the premium IOLs is stable. Overall, the price pressure in China on the monofocals, and that's the second question, is really high. Through the tenders, because tenders are all about price. There's a lot of pressure, and prices have already come down. I don't have a number. Would need to research. Prices have come down, and I hope that it stabilizes now. The companies react differently. I don't know what the major American players are doing. In general, the only way to deal with that is to take cost out of the distribution system, so the different levels of distribution system, and that's what we are trying, and the others, I would guess, are doing the same. Yeah, price pressure is very high. For the time being, again, for us, we are okay, and we have a good cost structure there and it's not a traumatic situation. You've seen our profitability numbers, and we are in this process already. We're okay. Markus, yeah, on the question on margin trajectory. First of all, your assessment, assuming that our OpEx being higher in the second half of the year is, of course, right. That would obviously then provide more pressure on our bottom line EBIT margin. Please understand that in this specific scenario, with a lot of uncertainties about, let's say, the recovery pace of markets and whether there will be or not any significant hits in business due to mutations of COVID-19 and so on. I just want to caution you that obviously such statements are always somewhat difficult to make. You were asking about the general perspective and what would drive potential OpEx increase. Assuming that business will continue or go somewhat according to our plans, assuming that at some point over the course of this year, we will prepare for some product launches where, as Ludwin said, there is of course, some uncertainty in terms of potential delays due to corona. It would clearly, at some point, mean that we will have to invest into sales organization ramp-ups. That is clearly true for the U.S., that is partially also true for other regions in the world. That will also mean some additional expense increase in sales and marketing. Last but not least, I think nobody of us can really have a good assessment on that, if normality returns, if traveling will be possible again, if trade shows face-to-face can happen again, believe me, we obviously are preparing ourselves for that period and attempting to curb, of course, expense or some kind of travel euphoria that you may see in the organization. We clearly will see there are some catch-up effects. There are sales and application specialists who haven't been in direct touch with customers for a year or longer. I think as much as I, as a CFO, would like to make sure that we keep and conserve some of our cost austerity, I have to be realistic. There will probably be good reasons to also accept that we will have a significantly increased need to also see customers and therefore incur, again, expenses. That will potentially also mean that there's some pressure in the second half of the year. Having said that is why I'm giving some caution here to not take the 19.9% of Q1 as a new baseline or anything like that. Yeah. Fully understood. Thank you. Ludwin, just a quick follow-up. Do you see any attempts of the Chinese government to maybe reduce also prices in other business units, like your equipment for public hospitals, or is this really just referring to monofocals as far as you can see? As far as I can see, it's really the monofocals. Yeah. Okay, great. Thank you. The next question received is again from Scott Bardo of Berenberg. Please go ahead. Yeah, thanks very much for the follow-up, sir. Just two questions, please. I wonder if you could give us a bit of an update, please, on where we are with the microsurgery conversion, if you like, of your previous system. I'm referring to KINEVO and PENTERO and what the relative mix now is of new instruments sold for the group. Perhaps also just give us some sense of the dental segment, with TIVATO, how that's performing relative to neurosurgery. Just a bit more clarity about where we are with that business would be helpful. Second question, please, and just one in terms of expectation setting for your new upcoming cataract launches in North America. I think you're looking to launch a new phaco system towards the end of the year and your first monofocal IOL, if I'm correct. To what extent should we expect the penetration of these launches amid an environment where it's a bit more difficult to do wet lab tutorials and so forth for phaco? I mean, is it a fair assumption that the initial uptake will be a slow one until the world normalizes and normal industry activities resume? Yeah. Thank you, Scott. Microsurgery conversion was the first one. We have and still have continued to manufacture both the PENTERO and the successor product, which is the KINEVO, because in some markets we did not have the approval for the KINEVO, and that was mainly true in China. Justus was talking about that before. About a year ago, we got the approval for KINEVO in China, and now we see the unit numbers of PENTERO really drop, and KINEVO is by far higher now. We still sell the PENTERO. It's just positioned differently price-wise in the market. I cannot make an announcement for discontinuation of the product. It's certainly rather at the end of its lifetime, while the KINEVO is still pretty early. Yeah, that's pretty much converted in terms of what we are selling. The devices in the market, I believe, there's still lots of opportunities. What we typically see, it was the same when we introduced the PENTERO. At that point in time, the predecessor product, it was called OPMI Neuro. It took 10 years to basically change the old versus the new product in the market. Customers basically replaced their old product. I would expect the same to happen, PENTERO being replaced by the KINEVO in the market, that's also a very interesting conversion. There's still a lot of room, right. We are still pretty much in the beginning of that kind of conversion. The TIVATO is really developing nicely. In terms of unit numbers, we are quite happy with that product. It really hits the market niche, right. It's the middle of the market. It really has a very nice feature set, so it's very attractive for customers. We see that picking up really nicely. That's also going well, and the predecessor product has already been discontinued. The cataract launch. Yeah, that's a difficult question. As I was saying before, overall, the development programs tend to be slowed down through the pandemic because we cannot do the clinical trials as planned. That's also true for the cataract launches. It rather takes a bit longer than we had hoped. On the other hand, and that's exactly what you described, Scott, even if we were able to launch the product now, it would be very difficult to really do the demos, do the trainings, and get a product out. This is why it's okay, even if it takes a little bit longer. After the pandemic, it will be much easier anyway. If we were to introduce it now, the uptake would be slow and that's absolutely right. Not much more I can say about that, right? I'm just hoping that we are through the worst of the pandemic already and now see things really improve. It's a good time for market introduction when markets open up again. Understood. Thanks very much, indeed. Ladies and gentlemen, as a final reminder, if you would like to ask a question, please press zero one on your telephone keypad now. As we receive no further questions, I hand back to the speakers for closing remarks. Okay. Ladies and gentlemen, thank you very much for participating in our today's analyst conference. I again apologize for the technical difficulties we had here in Germany. We had heavy snow last night, half a meter of snow in the streets. It was difficult to get out today, this is why we did not have the technical infrastructure as usual. That will for sure be different after the second quarter. We are looking forward to talking to you again in May. Thanks for your interest in Carl Zeiss Meditec, take care. Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect now.