Morning ladies and gentlemen, and welcome to the Carl Zeiss Meditec Analyst Conference 9M 2022-2023 results. At this time, all participants have been placed on a listen-only mode, and the conference will be open for questions after the presentation. Let me now turn the floor over to your host, Sebastian Frericks, Head of Investor Relations. Yeah. G ood morning, ladies and gentlemen. Thanks for joining our call today. I'm Sebastian Frericks, Head of Group Finance and Investor Relations. With me, as usual, our President and CEO, Dr. Markus Weber, and our CFO, Justus Wehmer. Our management will now give you an overview and some prepared remarks on our financials for the nine months 2022/2023. Afterwards, we look forward to your questions. Now, I would like to hand over to Markus. Yeah. T hank you so much, Sebastian. A lso, a very warm good morning, ladies and gentlemen, from my side. Welcome to the ninth month 2022/2023 analyst conference of the Carl Zeiss Meditec AG. Let's go first to the agenda and have a brief look on this. I will start off with an overview of the results. Justus will give you more details on the financials. Afterwards, I would like to introduce some key topics and highlights as usual, and finally, also as usual, I will refine our outlook for the remainder of this fiscal year, and afterwards, we will be open to your questions. Let's get started. I'm pleased to report strong nine months results with very strong revenue growth. We have been ramping up production capacities and supply chain has been further stabilized. However, delivery times of some key products are still too high and remain to be high. Our order backlog has been slightly diminished, but still on a high level of EUR 537 million. A fast improvement of supply chain can be expected in the next couple of quarters and especially then by next year. Our strategic investments in innovation, as well as sales and marketing, are continuing at a good pace. In the first nine months, revenue reached EUR 1.5 billion, a year-over-year growth of 13%. Constant currency revenue reached EUR 1.5 billion, similar growth rate as reported. Growth was achieved in both SBUs and all regions, in particular in Americas. The device business demonstrated a robust performance and outpaced the consumable business, which had a high base for comparison from last fiscal year, due among other factors, to the increase in stocks in the Chinese sales channel that began last fiscal year in the third quarter. EBIT margin dropped to 16.2% from 20.7% in the prior year, as a consequence of relatively weaker product mix and higher investments. In the third quarter, we did achieve slightly higher EBIT in absolute terms compared against the same period last year. Adjusted EBIT margin was at 16.8%, compared to 21.2% in the prior year. Our net income reached EUR 205 million, benefiting from treasury interest income and positive FX effects on hedging contracts, corresponding to earnings per share of EUR 2.29, in direct comparison to prior year to EUR 2.15. Yeah, this is the nine months at a glance, and now I would like to hand over to Justus, who will provide you with more background, and we'll discuss the figures in some more depth. Yeah. Thank you, Markus. Good morning and welcome from my side to all of you. I'm now to give you a more detailed overview of our financials, starting with the performance of SBU Ophthalmology. Revenue came in for OPT with EUR 1.152 million. Compared to prior year, the reported increase was 12% and at constant currency at a similar level. Growth was mainly driven by our device business. Although supply chain situation has been improving, lead time of some key products, such as VisuMax, is still elevated. This also contributes to our overall product mix, not yet showing its full potential, because we could have generated more consumables revenue if new devices were going out more quickly. We clearly see various other factors pressuring the EBIT margin, weaker product mix due to slower consumables growth, as well as investments in strategic R&D project, projects such as digital, surgical ophthalmology, regulatory affairs, also increasing sales and marketing activities such as physical trade shows, advertisement, and travels. As a consequence, OPT EBIT margin declined by 6 percentage points compared to last year, to 14%. Talking about Microsurgery now. It again delivered a solid performance with revenue of EUR 357 million, versus prior year's EUR 306 million. This represents a revenue increase of around 17% or 16.5% at constant currency, which is a strong result given the supply chain strains. Our order book continued at a strong level. Gross margin slightly improved year-over-year, despite rising procurement costs. Manufacturing efficiency was strong, exchange rates remained favorable, and we are beginning to see a slight benefit from better pricing. EBIT margin is at a strong level of 23.4%, slightly improved 0.2 percentage points year-over-year, despite higher OpEx, especially research and development and sales and marketing expenses. Talking about the regions, all regions contributed to the growth with strongest momentum, this time from Americas. Americas achieved sales of EUR 410 million, an increase of 24% or at constant currency, 20%, among which the U.S. growth primarily was attributed to devices business with good conversion of backlog. Latin Americas demonstrated good momentum, Argentina and Mexico, in particular, grew strongly. In EMEA, we noted revenues of EUR 372 million, an increase as reported of 11% or 13% in constant currency. The foreign exchange headwind mainly came from volatility of Turkish lira. Core markets remained stable, whereas some selected countries demonstrated strong performance, among them France, Italy, and Spain. In Asia Pacific, we achieved revenues of EUR 727 million, growth of around 9% or constant currency, 9.5%, 9.5%. China, including Hong Kong, demonstrated good recovery of procedures during the spring and grew moderately despite high basis of prior year. India and Southeast Asia again delivered high growth rates. Japan and South Korea are slightly down year-over-year. Let's have a look at the P&L lines. Gross margin with 57.3% has improved sequentially from quarter-to-quarter due to seasonally higher share of consumables sales, consumable sales, positive pricing tailwind. Nevertheless, it's still 1.6 percentage points below prior year's level. With further improvement of supply chains, more pricing effect can be expected. OpEx are notably higher, mainly impacted by strategic investments. Sales and marketing expenses are higher. We have expanded our sales force, particularly in the surgical ophthalmology markets in North America. We are also working on several growth initiatives in both surgical ophthalmology and refractive laser, including investments in product management, direct-to-consumer marketing, and sales support functions. We are also supporting the presbyopia initiative. In R&D, increased due to continuous investment in strategic projects, mainly in the field of digitalization, such as cloud and software development, to build additional features for our workflows. We are also investing in IOL development and regulatory affairs. More to this will be shared by Markus in a moment. EBIT of EUR 245 million was below previous year's level of EUR 276 million. As already shown and explained by Markus, EBIT margin was 16.2% versus prior year's 20.7%. Our adjusted EBIT margin was 16.8%, below previous year's level of 21.2%. There are rather small effects related to purchase price allocation, related amortizations on tangible on intangible assets in connection with the acquisition in earlier periods. Finally, a look at the cash flow statement. Operating cash flow increased to EUR 103 million, in prior year, EUR 89 million, due to better net results, including interest income from our treasury of EUR 14 million. We were able to cover the necessary ramp-up of safety stocks in light of still tense supply chains. Some of the high inventory levels are also related to the expansion of our production capacities for consumables in both the refractive and IOL business. Cash flow from investing activities mainly include payments for property, plant, and equipment, especially expansion of production capacity for IOLs and refractive treatment packs, intangible assets, and acquisition associated payments. Cash flow from financing activities are mainly influenced by changes in receivables and payables against our treasury accounts and dividend payments. Net liquidity continues at a high level of EUR 767 million. Thanks for your attention, and with that, I hand it back to Markus. Yeah, thank you so much, Justus. Now I would like to comment on a few key topics, and then turn towards the outlook. Let me start first with a few comments on the situation of our Chinese business and two forward-looking topics that, that we have been discussing on our past earnings calls as well. Over the last 10 years, China's contribution to our business has grown from 8% to now above 25%. Approximately 2/3 of Chinese revenue is contributed by refractive and surgical business, generating above average profitability. ZEISS enjoys significant brand strength in China, and leading shares are of installed base with private ophthalmic hospitals. The refractive market share has risen now more than and up to 40% and more than 40%. With this, we have a leading market position in multifocal IOLs. Needless to say, with these great successes comes a high exposure to this very important market. The rise of China and ophthalmology is no coincidence. Hardly anywhere else is myopia prevalence as high among young adults, with some estimating as much as 80%-90% being myopic. At the same time, the population is also aging rapidly, leading to a high need for care for chronic diseases and presbyopia and cataract solutions. As disclosed in December 2022, during last fiscal year, refractive consumables in the sales channel have been increased by a mid-double-digit million euro amount to ensure deliverability during COVID lockdowns. Our initial strategy was to destock these inventories gradually over a period of one to two years. Unfortunately, the winter season in China was still heavily impacted by COVID and fell short of our estimates. The spring months saw a strong recovery in the consumptions in the market, which was mainly driven by pent-up demand effects. In the summer main season, we are so far still seeing growth in procedures, but at somewhat slower speed compared to the spring. All in all, given all of these factors, we have not yet been able to meaningfully destock so far this year and still assess the levels of inventories in the sales channels as too high. Unwinding these extra stocks will cause a temporary headwind to earnings, likely concentrated in the first half of fiscal year 2023/2024, and will cause a mid-double-digit million euro headwind to sales, with a large portion of that dropping through the earnings due to the high margins on the refractive products. In the IOL market, introduction of nationwide volume-based procurement will likely lead to price erosion and cause some earnings pressure next fiscal year. We do not yet have any specifics, but can share with you that we have a revenue exposure in IOLs of around EUR 20 million on an annual basis. Sorry, around EUR 70 million on an annual basis. In the midterm, volume gains from better affordability of cataract procedures and the ramp-up of local production will support our market share and also help to protect margins in the midterm. Long-term drivers for China, quite important, remain excellent due to a high rate of myopia and significant market expansion potential in cataract. We continue to expect above-average growth over the next few years for our surgical franchise in China. Yeah, zooming out from the near-term headwinds, let me allow to take a few back over the last four years since the pre-pandemic period in 2019. I'm very happy with the strategic milestones that have been achieved since then. Taken together, they have significantly improved our competitive position by preparing for the next period of growth ahead. We have launched significant new products. Some are shown on the slide, and some of these are real highlights and unique in the industry, such as VISUMAX 800, for highly automated and super-fast refractive surgery, as well as our Cataract Workflow, featuring the ZEISS Medical Ecosystem, a cloud-based operating system for our device. Regarding the Cataract Workflow, we have updated you in the past about our strategy. We have very strong arguments on our side. The Cataract Workflow can meaningfully contribute to a reduction in time per surgery and optimization of quality metrics. We are de-developing applications that are use artificial intelligence to improve diagnostics and surgical workflows and unlock unique productivity gains. We have developed our first phaco system and launched our first IOL in the U.S. market, the first hydrophobic IOL. Our cataract planning software, Veracity, has recently completed more than 1 million surgical plans in the U.S., a significant cumulative milestone as it is beginning to reach a large number of customers in the U.S., including many who do not yet have a ZEISS device. Feedback from key opinion leaders continues to be highly encouraging. Our leadership in the digital transformation of the ophthalmic industry is well acknowledged, as we are receiving more and more interest in our offering from customer as well as industry peers. In parallel, we are also working hard to fine-tune our consumables and accessories offering in the U.S. based on initial customer feedback. The launch of our first hydrophobic multifocal IOL is not far away, which will also be taken first plus myopia, correcting IOL, that we will bring to the U.S. market in a few years' time. The installed base of VisuMax, offering the SMILE therapy, has grown by some 50% to more than now 1,700 devices, with global refractive procedures in our installed base now north of 2 million per year. Cementing our global market leadership, procedures have roughly doubled since the year before the pandemic. Our IOL volumes have risen significantly as well, well, with about 50% of total growth to an annual volume north of 1.5 million IOLs per year over the four-year period. Last but not least, we have made several strategically critical acquisitions that plant the seeds for future growth over the long term. With IanTECH, we have introduced a new handheld tool for lens removal as an alternative to traditional phaco. The first doctors in the U.S. are using it already. A broader launch is planned for next fiscal year. We are happy with that result, although the development timeline was longer than expected, partially due to the pandemic delaying of our, of our clinical studies. With Kogent and Katalyst, we have expanded our surgical instrument business into the area of electrosurgical instruments, broadening our ophthalmology consumables offering and creating a new recurring business within Microsurgery. With Precise, we are investing in robotic technology for ophthalmic surgery. Lastly, with Vibrosonic, we acquired earlier this fiscal year, we are developing an implant solution for hearing loss that together with innovative visualization technology out of our Microsurgery business, may present us with an opportunity to enter a totally new market segment in a few years. All in all, we are now resting on our strong market, we are not resting on our strong market position in refractive and in the IOL business, but always looking for exciting growth opportunities adjacent to our current portfolio and markets. This is why we have been investing heavily, and why these investments will continue in the next years to continue and even accelerate the successful track record of the past. Yeah, with this, I would like now to refine our outlook for the remainder for the fiscal year. For fiscal year 2022/2023, revenue should reach around EUR 2.1 billion, representing a growth of approximately 10% year-over-year. Supply chain has further stabilized because of delivery times of some key products remain high. For instance, the VisuMax in connection with this consumable sales have not been at its full potential. Also, there are delays in the implementation of price adjustments. As outlined, strategic investment, particularly in R&D, but also in sales and marketing, will remain on a high level. To reiterate what I just explained about the planned consumables destocking in China, the estimated impact will be roughly a mid-double-digit million euro amount, affecting the refractive business mostly in H1 2023/2024. This will temporarily cause weak earnings in the Ophthalmology strategic business unit, particularly at the beginning of next fiscal year. For the current fiscal year, EBIT margin is projected to be at the lower end of the 17%-20% range. A stronger result this year was not achievable due to product mix, continued supply chain difficulties, and the volume of our strategic investments, as discussed before. We are confident in our outlook for future growth beyond the current year, as well as we estimate the market-shaping trends to be fully intact. The aging population, growing numbers of cataract surgeries, acceleration in prevalence of myopia, and the need to drive both efficiencies and qualities of outcomes of treatments. In the medium term, our EBIT margin should therefore eventually return to the level of 20%. Given the broader installed base and its associated increasing product mix tailwind, we are targeting profitable growth that will help our gross margins to continue to expand with the rise in recurring business over time. Therefore, there's no question in our view that the intrinsic profitability of our business continues to be quite high, and 20% type margins are generally well achievable. However, current strategic investments in R&D and sales and marketing makes the exact time for debt recovery less predictable. Another factor is the shape of that investment through either organic reinvestments or external M&A. In the last couple of years, there has been more of a focus on organic reinvestment, in part because of high valuations in our industry. For the future, we are open to opportunistically pursue both organic and inorganic investments. As we move through the reduction of inventories in China and the introduction of nationwide VBPs of IOLs next fiscal year, the outlook will become more clear. We will provide more precise guidance with our, with our earnings calls in December, by then we have a better view on the summer peak consumptions of RTP, the VBP modularities, and both their impact on profitability. With that, we have come to the end of our prepared remarks on the financials. Let me pass it back to the moderator to take your questions. Thank you so much. Okay, ladies and gentlemen, if you would like to ask a question now, please press nine, followed by the star key on your keypad. If you wish to withdraw your question, please press nine, followed by the star key again. Let's start. Please press nine star now to ask your question, and I will announce the names in order. First one comes from Oliver Reinberg, Kepler Cheuvreux. Oh, yeah, good morning. Thanks so much for taking my question. Three for me. The first one would relate to the midterm guidance. I appreciate it is a bit difficult to provide color, but is it fair to assume that we should not expect a recovery to a 20% margin by 2025, and that it may take longer? Can you give us any kind of color in terms of what kind of incremental strategic investments you're really planning, in terms of what kind of further growth of sales, marketing, and R&D we should probably expect for the coming two years? Second question: Can you just talk to, is there any kind of pockets of economic softness in any of your franchises, and in particular, the softer growth in China? I fully appreciate the installed base expansion was delayed, but is there also a kind of headwind from the situation from an economic perspective? Third question, just on the hydrophobic lenses. I think it's early days, but can you just provide any kind of update on your go-to-market strategy? This is a franchise not only for the U.S., but also globally. Any kind of color on timing and how important is scale in this kind of business? Given the different production process, if you're ramping up sales, would it take a bit longer to be highly profitable? Having kind of different ramp-up margin profile compared to hydrophilic lenses. Thanks so much. Okay. Thank you, Oliver. A warm good morning. Many questions. Let me, maybe, start first, that Justus gives you the perspective on the midterm guidance. I will take the other questions. Y eah. Fine, yeah, Oliver, of course, I was expecting the question, and, I, I basically, referred back to what we just said. Number one, we firmly believe that structurally, our business, you know, combined by its device and consumable business, and then in the future, with the associated business models building on the healthcare data platform, we see that it has certainly the ingredients for margins around 20%. To say that clearly, we have no rush to get back there because our strategic investments have priority. We have grown above market in the recent years, and in order to continue to do so, we need to basically fill the pipeline of innovations and invest for it. From that perspective, you were asking now, you know, are we back there by the year 2025? I would, basically, you know, at this point, not give you an answer. I can just tell you that this is, certainly, what we aim for. B ut the timing remains, currently, let's say, not clear yet. Yeah, maybe to add on, on this and coming to your sales and marketing and R&D question. First of all, when, when you're converting the higher investment in sales and marketing and R&D in, in numbers, that means currently, the 1.5 points, what, what we have invested in, in R&D, is converting roughly in EUR 30 million. The same is true for sales and marketing. As you can imagine, this is, and as I already reported before, this is for new activities, what we do. For instance, the hearing loss. We see beyond of Ophthalmology, we see a lot of opportunities for us as Meditec in ETP, so that means in ear, throat, and also in, in, in the neck. What we, what we see here is a market opportunity we have to invest in. On one hand, we are always open for M&A, but also with the high valuation over the last years, we have consciously decided also to go for organic investments in R&D, especially based on our core competencies of Carl Zeiss Meditec AG. This is the reason that on the one hand, we do technology acquisition of startups, integrating this technology then to our R&D activities, making sure that this follows directly also our quality and our processes, and coming then with new products. As you know, in the MedTech industry, to bring a product to the market always takes longer than in other industries. This is the reason that actually finally, harvesting the fruits, I would say, takes just years. This is something when we started that, it's clear this will be not the return on investment next year. This is a return on investment on the long-term perspective, so that means more in the end of the 20s. This is the one part. The other part is, as you already mentioned and also highlighted, is actually our sales and marketing activities are in new markets, especially in the U.S. market. What we did here is also heavily investing, making sure that we have now the platform to introduce our phaco, to introduce our new hydrophobic IOL to the U.S. market and to start as fast as possible to roll it out. This our KORs, but also then to address this to the market. This is also clear, also in the current situation environment, so high depths and it's not easy currently in these markets. Nevertheless, we see that this is gaining momentum. Maybe just to explain also in the context of acquisitions, that means inorganic and organic activities. This is really important for me because I really believe that the 1.5 points, what we are investing in R&D and sales and marketing, on addition of what we have done in the past, is really well, well actually invested, and it's fully in sync with our strategy and also consciously planned. The other thing is the growth, what you mentioned, and economic headwinds we may face. First of all, yeah, there are currently, and we are all facing this, a lot of dynamic in the world economy, and this is definitely also something what Meditec is facing. Nevertheless, what we see today, is, is actually, is nothing where we are not well prepared for, yeah? There are activities, especially in our, in the China market, which is the most important market, I think, besides of EMEA and also U.S. Nevertheless, the Chinese market is the biggest market for us, and there are currently activities ongoing, as you just said, so there's the VBP, but there are also, let's say, policies changing all the time, yeah, in regulatory, but also when it comes, for instance, in lockdown, we have seen these strict and drastic, let's say, turns in, in the, in the lockdown, the strategy of China. This is affecting definitely also then, on, on short term, our, our revenue streams, and also our dynamic in the Chinese market. Nevertheless, and that's quite important, we see overall that our innovations are really very, very well accepted in the market. We are growing significantly over market, so that means our market contributors are currently facing, and they are facing the same challenges, that we are better positioned as them and that we are winning against our market contributors on the customer side. That's actually the most important sign for me that we see that our innovations and the way how we bring our solutions to the market is on the right track. Yeah, finally, IOLs. On IOL, the U.S., first of all, the hydrophilic market is where we are very well positioned, as just said, also in the Chinese market, we are very well positioned, and definitely we want to gain more fair and unfair market share in the respective regions. This is, for instance, also the reason that we have intensified our regulatory activities, especially also, for instance, in Japan, but also in other countries. By the way, the regulatory expenses goes also in our R&D expenses, yeah, just to make that clear. And this is something where we want to accelerate, also facing the higher challenges coming from local regulatory aspects. This is not only MDR. We see the same for the FDA, but see the same for the Chinese FDA. All of them are actually tightening the regulatory effect, and this is something we are facing. Again, everybody in this industry is facing the same challenge, and we believe that we can turn that to an opportunity for us, and this is the reason we are investing in this. Overall, IOLs, we see, especially, for the U.S., we see a lot of opportunities for us. Now this term, this, our hydrophobic lens, the monofocal lens in the market, because then we can start to bundle this, this, our QUATERA. That's one thing. The other thing is that our digital platform, the HDP and the Cataract Workflow solution, has now really shown the benefits, and first customer are using that and see also the big benefits. For us, this is mainly then, also, the customer is not a little office or a little hospital. Our customers here are the big PEs and the big chains, and here, we can actually negotiate big contracts, and we have already seen that, that there's really a lot of positive elements coming in. That means, the strategy and also the business strategy, what we have planned for IOLs, is showing first fruits, and this is something we are following and adapting, because it's also important. We learn as we walk, and especially in IOLs, in this uphill battle in U.S., but we feel very well prepared, and this is something, what, what we are now following. I hope this is answering your questions, Oliver. Thanks so much for the comprehensive answers. Thank you. Okay, thank you. Next up is Graham Doyle from UBS. Good morning. Thanks, guys, for taking my questions. Just a couple for me. Just on the 20% margin target, it like it, sort of to Oliver's question, it looks like the issue in terms of the uncertainty for you guys is investments or, I suppose, expenses, the big lever being R&D. The kind of two parts is, well, how long is this gonna go on for, to the point where you're spending such a high portion of sales on R&D to almost in sort of like a pharma-like scenario? Like, can you give us a better sense of what that's going on? We, we kind of get an idea anecdotally from you in terms of where it's going, but ultimately, when we're trying to assess what the return can be, it, it, we kind of need to know where those products are, what the potential value of that is, and, and what the innovation is. It'd be good to get a sense of that. Then maybe, maybe just second to that is, I mean, it's a very difficult question to, to phrase and answer, but how much do you care about the 20% margin when you think of the priorities that you have? Obviously, return on capital, but that's a key function of that. How where does that sit in your priorities, and for how long would you be happy missing that margin target, but still believing that it's viable? Thank you. Graham, thank you so much for the great question. First, that's really important for us. Our highest priority is to grow significantly profitable the business, and that means in in figures which are, let's say, 60% or beyond 60% in gross margin, and that we have that we outgrow the market significantly and winning market share against competition. That's, that's the first step, and this is in the established markets. This is especially... We want actually to expand our refractive offerings, and not only here in the normal myopia and myopia progression management, but also in presbyopia. When you are asking where we are investing, for instance, in the presbyopia workflow, we are currently heavily investing. That's, that's one thing. As you can imagine, Graham, this is something where we see a lot of potential, not only in China, but in the rest of the world, and where is a huge market waiting for us. This also means for refractive especially, and this is one of our main topics and priorities, that we also have to do marketing, yeah? This marketing efforts are huge because on the one hand, we want to turn LASIK customers taking smile, and also when we come then in the future to presby smile, so that means presby on smile, we also want to turn that. This is the one thing. The other thing is also to convince customers which are currently using goggles and lenses for correction, turning them using a laser refractive. This is definitely, these are activities we are fostering and the team is working on. That's one part. The other part is, as we already have reported all time, is actually our digital activities. We are really heavily investing in digital, also, a high double-digit number per year. We see that this is the key, and I think everybody sees currently AI, everybody sees cloud services. We see the same trend, in, in, in MedTech, and this is something we want to shape here, the market, and we are really in a perfect position. And we see this also now, that other, let's say, peers are approaching us, actually starting to discuss how they come to our platform. So these are, these are really good, good signs. And, and other things I would call it, so, things like, acceleration and regulatory is, is quite important. As I said, we see also new businesses, which are quite important for us. And one of the businesses, is definitely is the hearing loss pathway. We believe that, that especially in, in cochlear, but also in the, in the hearing aids, not in the hearing aid itself, but also in, in the entire diagnostics and beyond then maybe the solution, so that means also implants. We believe that there's a huge market waiting for us, and this is where we are investing, and you can see this also in M&A activities, what we do. That's the one thing. The other thing, what we see, is in the posterior segment and chamber of the eye, so that means everything which goes with retinal, not only in diagnosis, we are already well established here, but especially also in workflow solutions. This is something where we are also heavily investing because we see, for instance, in vitrectomy, we see there are a lot of opportunities, but not only there, also in chronic disease management. This is the third part. We believe that the that diseases like, for instance, diabetic retinopathy, that the progression and the management of this chronic disease, and the, the, let's say, the, the point of care behind that, is something where there's a great opportunity for us. That means we are also investing here, making sure that that our, let's say, this new business models, you, you can think about subscription models, you can think about pay per, per, per procedure models. This is something what we are currently following. The last point is indeed, is the IOL business. This is also something we are thinking heavily about in MCOB process, so that means make, collaborate or buy. Well, knowing that we also need a good offering, especially in the hydrophobic. This is the reason that we are heavily investing, not only organically, but also inorganically, to make sure that we have as fast as possible, this hydrophobic IOL, this hydrophobic IOL offering behind that. This is, this is great, and maybe to explain where we are investing currently in R&D, and I hope that you agree on that, or that, then an add on of EUR 30 million in sales and marketing and R&D, respectively, is not too much for all of these additional activities that we have currently on our plate, and where we believe that this creates an additional booster, not only in overall profitability, but also in top line. This is the one thing. The other thing is how important is the 20% margin for us. The margin, the 20% margin is very important for us, otherwise, we would not discuss this all time with you. This is clear that we want to have a business which is beyond that, we hope also for your understanding, based on that, what we have on our plate and based on that, how we want to size up and how we want to grow the business and how we want to penetrate in new markets, that this has currently our highest priority. It's clear this takes years, so that's clear. What is also clear is since we are growing fast, that this is definitely also a peak in R&D and sales and marketing. What we do, we have now hired a lot of people, and we will now ensure in the next year, in years, that now these people have full efficiency and efficacy when it comes now to do these activities. That really means we have a big hike and peak in building up resources, but now it's time for these resources to become really productive, productible, and making sure that there is a return on investment. This is actually what we are currently doing, this goes along also with an organizational development, actually appreciating and acknowledging this new strategy or the, the, let's say, the evolution of the strategy, especially also in new fields, what, what is on our plate. Okay, that's, that's really helpful. I really appreciate those answers. Maybe just one, one quick last one. just, obviously, as you've kind of got a, an unusual structure given your, your parent, company shareholding in your business, and you as a, as a business, you take a very long-term focus, which arguably a lot of listed companies aren't able to do in the same way. I suppose the, the, the key part of the question is: What benefits do you see from being listed? Rather than being maybe a private company where you could make these investments and not have the pressure from sort of the markets to hit that 20% margin a bit, bit earlier. Like, would there be a benefit from being private? So for me, actually, first of all, we really believe in, in our listing in the capital market. Indeed, you know, it's, it's a little bit, how to say, it's a challenge because as you said, so we are a company, and this is in, in our DNA that we do long-term investments. We believe in the long-term investments and, and really in sustainable growth. This is something what we have shown you, and this is something where we really believe that, that also, that, let's say that we have a, a very good strategy, but we see that also in, in direct comparison to the market, that we are actually in a very good position here. Overall, we really believe in the strategy, and this goes fully in sync with the DNA and competence profile of Carl Zeiss Meditec and Carl Zeiss as a group. In terms of the listing, we are totally also convinced that the listing helps us, especially when it comes also to acquisitions and also mergers. This is something what is definitely also on our agenda, because we also believe in getting really a market leader position, not only in Ophthalmology but also in other fields. That means that the possibilities actually for acquisition and mergers are much better being a listed company. This is really the reason, as I said before, our strategy is a pretty solid and long-lasting, strong growth strategy. This means we will go in a, or we are already in a clear MCOB process, without now revealing too much. I can tell you also now, this theory, let's say, this, the valuation of other companies here in the market, this is really helpful for us, especially when it comes to future acquisitions. I thank you, I really appreciate those answers to, to, to what are kind of bigger questions. Thank you very much, guys. Yeah. Thank you, Graham. Welcome. Thank you. Next question is from Sven Kuerten, DZ BANK. Yes, thank you. I have just three questions. Given the current circumstances, do you think your 2024 margin can be significantly above the quite weak 2023 level? That's question one. Secondly, why exactly was the Microsurgery margins strong in Q3, and can you also see a similar level in Q4 and also for entire 2024? Thirdly, I think in the past you were quite conservative with respect to your guiding policy, but in the recent times, you're cutting down the expectations step by step, which is quite unusual for Carl Zeiss. My question is, what has changed with respect to your planning process, or what surprised you the most in recent months? The planning appears more aggressive than it was in the past. Thank you. Sven, good morning, and also, deep thank you for your question. Maybe, I start first with MCS, and Justus will take over then, and we'll talk about the margin prediction for next year, and also, what is the baseline of the calculation. Maybe but only some words of the last question, what you said in terms of guidance. Actually, the answer was exactly, Sven, what I gave to Graham before, and also Oliver. The point here is, and that's quite important, yeah, there is a guideline in profitability, but there has been also a guideline in terms of growth. What you see is that our growth is, and I think my understanding is that in the past there was always this guideline, that growth will be, will be at least as market. As you can see, is that our growth is above market and will stay above market, and this is on our agenda. That means, the strategy for us is to grow significantly the business, still with a high, cross margin. That means that the, the business itself is healthy, but that we do a good balance in terms of what we do, what we invest in internal activities. That means R&D on top, or what we do in acquisitions. That's the sum of that. That's the reason that, actually, based on opportunistically targets in the market, which are, let's say, worth to, to, to be invested in, versus activities, what we do by ourselves or with collaboration, this is exactly, what, what, what is actually, what does this mean in terms of profitability? Overall, it's clear the business now with the strong growth protection, the business, is a profitable one, and we want to stay there. Coming to MCS, this is what you see, Sven, here is actually, is a, it's a, is a consequence out of this conscious investment, in new products. So that means on the one hand, the KINEVO, which is our full robotic system, high investment, still a high investment, so that means MCS is still highly investing in this really, robotical, surgical, microscope. On the other hand, we see also other microscopes like the TIVATO, that this is very well accepted by the market, and that we are gaining also here against market contributors and main market contributors, significant market shares. On top of that, the team is working on totally new workflow solutions, especially when it comes to brain tumor workflow solutions, which will also increase now the top line, but also profitability. These are exactly the activities for MCS, but it's also clear there is the order books, as I mentioned before, are full, not only for OPT, especially also for MCS, because MCS is still a strong device business. They don't have, let's say, recurring business like OPT. This is the reason also that there is a kind of order book effect. We expect that this comes to normal levels by mid of next year. Nevertheless, the intrinsic, intrinsic growth of MCS is still very strong. I think with this, I would hand over to you. Yeah, Sven, I understand your curiosity, but once again, we will not yet comment precisely on guidance for next year. This is, among other things, because of the unclear trends on inflation. We also have still uncertainty on how, how fast we can actually basically convert our backlogs into revenues. Last but not least, clearly, we are right now in the summer peak in China, and we want to see how it folds out, and how we then start into the next year. We mentioned we want to deliver quite significant numbers of lasers in the next couple of months. We have ramped up our capacity and that should then also over the next couple of months, give us more clarity on what is the installed base and its potential for consumption. Therefore, please wait until December before we can give you here more clarity. Okay, thank you. To follow up on the Microsurgery, it's fair to assume a quite good margin level also, let's say, in the next month in that business unit, in the next quarter? Yep. Yep. Yeah. Okay, thank you. Okay, thank you. next question is from Oliver Metzger, Oddo BHF. Yes. Good morning from my side. Two questions I have. First, can you talk about the visibility you have about the consumer with destocking in China? How confident can you be that the topic will be over after the first six months next year? Also, in this context, you specified the headwind on sales. Could you also provide what will be respective headwind on EBIT? The second question is, as I've understood correctly, on MVP in China, have I correctly understood that you see a headwind of EUR 70 million in sales for next year? Thank you. If you, if you want, Oliver, I can take the visibility of destocking. I would say we can pretty clearly say, yes, it's going to be in the first six months, and we would, again, at this point in time and not expecting any, you know, major distortions for the market development in China. We would think that this should be flushed through in these first six months. Again, as or in reference to what I just said before, knowing that the installed base in China will be growing quite significantly, and also knowing, as you may know, that in the second quarter of our fiscal year, we have the first peak in the season in China during the Chinese New Year vacation. If we're then just modeling a higher amount of lasers in place, and higher consumption that we historically see always in that part of the year, then that should actually give us a high level of confidence that this destocking by then will have taken place. Yeah, Markus. Yeah, yeah, I'm happy actually, to talk about VBP and, and the headwind. Maybe coming to VBP. Yeah, I think the maximum risk, what we are facing here, is EUR 70 million. Nevertheless, maybe to, to talk without knowing exactly already how the VBP will be designed like, because this is an ongoing process currently in China, this is not finalized. First of all, we believe it will be not a winner-takes-it-all business model for, for, for China, because also of risk, it's, it's on a nationwide, let's say, the tender will be nationwide, they have to ensure that they have the supply. Our assumption currently, it's not a winner-takes-it-all configuration. First, what we believe is definitely because this is the purpose of the VBP, to rebu- reduce prices, and that means also that would reduce our margins. Counter effects are most likely that we can then straighten our sales in distribution channels because of the structure of the VBP, but this is also an ongoing process, yeah. So maybe this is one topic of the VBP. It's also clear that the VBP itself will create higher volumes. So for those who will be in the VBP, this will be higher volumes and we will calculate, and this is also the reason now, then to wait until end of the year, because we believe then that we have more information here and that it's more reliable to predict. This is the reason that we want to wait until end of the year. Headwind of sales. The headwind of sales currently is, is driven by different factors, but maybe to just to pick one, is definitely the high interest rates, especially in the CapEx, the capital expenditures. You can easily imagine, especially in U.S., that offices are for, for, let's say, investments in new devices, currently, due to the high interest rates, are reluctant to invest, invest, and this is something what we see, especially in our diagnostic business, sales is, is actually fighting here. Nevertheless, we also believe that there's that this is easing in the next year, but also, again, here, it's really hard to predict, especially of the high dynamic of economics. Overall, as I mentioned before, we see that our innovations are really very well accepted, and that we gain market share here. From this, it really says as long as the market is growing or at least is equal, we really believe that we will grow against this market. From this point of view, yeah, there are hard headwinds in sales, but these are headwinds what everybody is facing, maybe with different, let's say, emphasis, because of maybe emphasis in different markets. As you know, our big emphasis is in the Chinese markets with the pro and cons. Because, for instance, now with all the macroeconomic issues facing currently, we really believe, for instance, as a European company, it's easier to make business with China as like for a U.S. company. This may create some advantages for us, but this is something we will see in the future. Okay, thank you. One follow-up, please. Do you assume a pre-pandemic level of inventory as proxy for the expected impact of destocking? I, I think, trend-wise, absolutely, yeah. I mean, we have, and I think we have also commented on that in previous calls. We have had to accept higher buffering because you may remember there are supply chain implications for us that are going into Eastern Europe, and we therefore have to basically identify for some sets of components new suppliers. That is ongoing, but in order to hedge the risk of an abrupt distortion, we had therefore strategic reserves built into our inventories. Also, of course, you know, if you have long lead times on your devices, you tend to have a more reluctance in your sales and service organization globally, to sell out and demo and loan devices, because the replacement periods may be longer than the sales organization's desire. Looking at an overall expected normalization in supply chains, we therefore clearly see the potential to reduce our inventories. However, one comment to be kept in mind here, we grow, as you have heard, Markus, we grow the business, and in a growing business, it's always a bit more challenging to reduce your working capital. That will be a kind of a counter effect to keep in mind. Generally, I think you will see us working on a better working capital ratio. Okay. Thank you very much. Okay, thank you. Next up is Falko Friedrich from Deutsche Bank. Yes, thank you. Two questions, please. The first one is, to what extent is that the relatively higher R&D spend caused by, sort of more competitive pressure? Because when I look back over the last few years, your company has always invested very heavily in R&D, but still in tandem, was able to show quite decent margin expansion. Is it now-- Do you now have to invest more R&D in order to keep up with your, the larger competitors going forward? My second question is related to that. Isn't it possible to increasingly use your very efficient balance sheet to, to tackle some of these innovative focuses that you have, rather than, than, than spending, this big step up in R&D? Thank you. Okay, Falko. The second question, I'm not sure whether I- I can take it. ... maybe to talk about higher R&D. Falko, it's, I, I would call it, it's, it's several answers on that. First of all, do we see high competitive pressure? Actually not where, where we are, I would see it in a different way. The, the products what we have in the market, are, especially the operational microscopes and also the VisuMax, are really super innovative products and, and we are really market shaper and market leader here. This is something we want to keep the pace, we want to make sure that we stay as a, as a market leader, always in our DNA, as you know, as a technology leader. This is, this is clear. We have other red ocean things like the ophthalmic diagnostic business. That means, especially when it comes to OCT, but also, like, Humphrey Field Analyzer and fundus cameras. There's heavy, there's heavy competition. It's a red ocean, and this is clear that we are investing here also heavily on one hand, but very focused. That's the reason that we have had high activities here, really to optimize and streamline our activities, to make sure that we are responding fast and efficient on high competitive pressure. This is, this is the other side of the medal. The third part is definitely that we are entering in new markets. Please be aware of, especially when it comes to IOLs, there are big, let's say, market players and contributors here, and we want actually to gain here market share, to a fair market share, what we believe is the right one. For sure, we are here heavily investing, especially not only in the IOL development, but especially in process engineering and also in regulatory. Especially in Regulatory and Clinical Affairs, it's a huge investment, and this investment comes country or nation by nation. This is one of the reasons that we want to accelerate here, because let's say, the regulatory times to get a lens through the regulatory process is just years. This is something we want to accelerate as, as much as possible, actually, to win, to win here. Finally, that's really, again, quite important to know, is that we are entering new markets which has been not explored so far, where we believe that there's a great expansion opportunity for Meditec. Okay. On your utilization of the balance sheet, I just can confirm, of course, an organic growth becomes more attractive with valuations coming down. I think Markus said it earlier, you know, we make our choices. We are in our constant make, operate, or buy assessments. An organic growth and even bolder moves have never been off our plate, but may become now more, more feasible looking at the kind of corrections in the market valuations. Thanks. Thank you. One, one quick follow-up, if I may. My question on the balance sheet was also related to the fact that, or, or the question whether you can't capitalize more of these, steep R&D investments? Ah! Hmm, okay. Yeah, no. Okay. Okay, maybe I really misread it. Sorry, Falko. Well, that would not necessarily be our policy, to be frank. I mean, IFRS, of course, commands you to capitalize once you basically go from the research into the development phase. There is not much room to kind of, you know, interpretation. What you will see over time, as a function of the higher R&D expenses, then you will also see higher capitalizations. Yeah, but with a general attitude of us being cautious to basically overcapitalize. Yeah. Thanks. Okay. Thank you. Okay, last question so far comes from Alexander Galitsa from Hauck Aufhäuser Investment Banking. Yes, good morning. Thank you for taking the question. I have a couple. I'll start with the one on the Chinese stock filing situation. Under the assumption that you completely eliminate the extra stock of TPs in China, would you be looking to come out more or less flat on the global TP sales in this year? Is that a fair assumption? Alexander, I think net, if you really kind of, take out now this, kind of, let's, let's call it long COVID impact, we see our market growing in China constantly and in a double digit volume. I think that, that is the fundamental answer that I'd give here. We now have basically to work ourselves through this distortion for the reasons that we have explained before. A nd that it delayed more than we had expected a year ago, is also explained by reasons beyond our control. In terms of the, the, let's say, the, the drivers, the demographic drivers, our strategic positioning, our leading technology, the fact that our most innovative product is actually still yet to be placed in the Chinese market. The VISUMAX 800 will most likely have the NMPA approval only in two years from now. I overall have no reason to believe that this growth trend will continue. Yeah. That, maybe as, as answer to that question. Okay, that's helpful. Thank you. Then also, a question on the sort of recurring revenue part of your business. This additional layer of recurring revenues that you added through acquisitions of the two companies in the surgical instrument space, I wonder how wide has this product portfolio has been already rolled out across your customer base, and how much scope do you see there for, for the growth? Yeah. Good morning, Alexander, first. Maybe one comment also on the Chinese stock and RTP, then I come directly also to Kogent and Katalyst. It's also important to know, we mentioned that already before, we nearly doubled our capacity in production for refractors, especially for the VisuMax. That means this is currently the capacity curves goes up. We see really that this is quite stable. And that means we will see a lot of installation now in the next couple of months, and especially also next year. As you know, there's always a latency behind for the full utilization. These systems, as Justus already mentioned, this system will bring additional parts. That on the one hand, is actually that our desire and our, let's say, objectives, are always to increase utilization of the systems, also by providing good workflow solutions to the customers, to our customers. On the other hand, actually to increase significantly the installed base. Both of these effects will definitely create also a higher demand for RTPs and the consumption here. Just that you know that. Now coming to Kogent and Katalyst. The investment in Kogent and Katalyst, again, I think Justus mentioned that before, the valuation is a quite important thing for us. That's maybe also a little bit different than maybe other companies are doing that. We always look to really the key figures and really say, "Okay, what, what kind of value are we getting with this investment also in the, let's say, midterm?" For Kogent and Katalyst, this is an early-stage company. As you know, they have some instruments in Ophthalmology, but also in neurosurgery. This is actually quite nicely connected to our business with FCI, as you know. We have all the other instruments business with FCI, and they have already collaborated in the past, and they have their portfolio, which is creating already today recurring business and revenue. Nevertheless, they have, and that was one of the main reasons also to acquire them, they have currently a lot of activities in R&D also for new instruments. Without now revealing that, but there, there will be new announcements coming then also where we see a lot of potential, especially also neurosurgery, but also when it comes to retinal applications. This is an ongoing project. We are also investing heavily here in Kogent and Katalyst, first of all, in production capacity in the facility, but also in R&D. Just to give you a feeling, so we have invested in total in OpEx, in Kogent and Katalyst, now this year, it will exceed a double-digit value also in this. Million. Million, yeah. Yeah, yeah. Understood. Maybe just a very brief follow-up on that. If you're able to provide a rough idea in terms of how long, how many years do you need for this to become a more tangible, more visible, maybe part of the business? Are we talking about two, three, or is it 5+? It's definitely... All of the activities, what we are doing here, Alexander, is, are, the activities which are coming in the next three years, is normally something what we do in a way, nebulously, telling you that this will come, and this is in the next three years. These activities, this will be a staggered approach. That means we will have new products coming into the market in the next years. This will be then rolled out to the world. The entire strategy, what we have in mind, is a strategy which goes to the end of the 2020s. That really means in the next five years, and this is actually where, I'm also expecting return on investments when we do these activities, on a five-year horizon. Understood. Then very last question, just, and apologize to bring it up again, the target 20% EBIT margin. Maybe it's an opportunity for you to clarify any kind of ambiguity that there might be. I think, over some time now, you had this midterm target of sustainably above 20%, and I think it was viewed sort of as a rolling target, aspiration, where you should be getting. Clearly, now you see the substantial growth investments, which are hopefully accretive to your sales growth and profit. Now it seems from your communication that this midterm target is really viewed as a midterm target, that no longer is a sort of rolling aspiration. Considering what you're saying in terms of the expanding gross profit margin, it's hard to not see you coming back to EBIT margins above 20%, based on simply at some point, maybe not in the next three, four years, but the R&D ratio should be coming down at some point in time. Maybe you can just clarify this change. Yeah. I think, in communication, if there has been one, or maybe I've just missed, into that. Yeah. So, so Alexander, maybe to, to clarify that again. So, so if we would, if we would not invest now in new activities to expand our business, then we would have the 20%, above 20% target, would be definitely, not easily, but it would be a very, let's say, sustainably, achievable. If not, the market is changing or whatever, yeah. Mm-hmm. This is, this is clear. What we are offering here is, is actually an add-on. The add-on is, or like, if you would do an acquisition, if you would now acquire a company of EUR 5 billion and say, "Okay, this is now an add-on, but we want to see and we see their vision or whatever." For instance, in digital, if you would have acquired now a cloud company or something like that, most likely would have cost us EUR 2 billion-EUR 3 billion. We have consciously decided to invest EUR 50 million-EUR 60 million in developing a specific topic for us by ourselves. Now we see that we have that in place. For sure, we have to continue now here and still to grow. Nevertheless, these are add-ons, and that's really quite important to understand that. What we have done now is a kind of based on the strategy, what we have defined last year and this year, we do additional activities, what I explained before, in new fields, where we believe that this will create a lot of value for Meditec AG and also the shareholders. This is our strategy. We want to follow in a significant expansion to make sure that the business is growing. The point is here. This was a heavy investment now in the last two years, especially in R&D, to bring that on the high level. With the growing business, the relative, let's say, part of R&D, will, this, or the absolute part will stay, maybe with inflation and, and labor cost increase, but more or less, we, we, we want to stay here in such a level in terms of investments. It might happen now that new opportunities coming up in the future, where we see based on our strategy, "Hey, this is something we want to invest in." Happy then to explain it to you here, but this is then a strategic move, we have, then we will definitely take, because we really believe that we have a great starting position, to significantly grow the Meditec, not only in the established markets, but also in new markets. This is exactly what, what is in our plan, and this is the reason that we are investing here. Perfect. That's clear. Thank you. Okay, thank you. There are no further questions now. I hand back to the host for the conclusion of the conference. Yeah, a deep thank you. I hope that we had a chance to convince you, first of all, that based on all the challenges what we have seen here, that we, we made, I think, and the team made a good nine-month result. Definitely looking very forward then to the last quarter. I hope that we also convinced you that we are actually on a really, on a, on a, on a valuable path also for growth for the future. With a clear strategy and also a clear vision how to drive the business. With this, I wish you a wonderful summer break for those who had the chance to, and looking very forward then to talk to you soon again. Thank you so much.