Ladies and gentlemen, thank you for standing by. Welcome, thank you for joining the Coloplast conference call on the acquisition of Kerecis. Throughout today's recorded presentation, all participants will be in a listen-only mode. The presentation will be followed by a question-and-answer session. If you would like to ask a question, you may press star, followed by one on your touchtone telephone. Please press the star key followed by zero for operator assistance. I would now like to turn the conference over to Kristian Villumsen, President and CEO. Please go ahead. Thank you very much, operator. Good morning, everybody. Thank you for joining us at a short notice to discuss our agreement to acquire Kerecis for up to $1.3 billion, or up to around DKK 9 billion. I am Kristian Villumsen, the CEO of Coloplast, and I'm joined by our CFO, Anders Lonning-Skovgaard, and our investor relations team. We'll start with a short presentation and then open up for questions. Please turn to slide number three. Today, I'm very excited to announce that we've signed an agreement to acquire Kerecis, an innovative, fast-growing company in the biologics wound care segment. As part of our Strive25 strategy, we're committed to securing future growth drivers through both organic and inorganic opportunities, and I believe that we have found such a long-term growth asset with Kerecis. Let me start by telling the Kerecis team just how thrilled we are that they will be joining our Coloplast family. I'd like to voice my admiration for the innovative work that Kerecis has done to improve wound treatment by developing a truly unique technology platform based on intact fish skin, which closely resembles human skin. Fertram Sigurjonsson, CEO and Founder of Kerecis, and his extended leadership team, have built a sustainable business on many counts and have already helped tens of thousands of patients. With a strong growth outlook in a high gross margin profile through a very cost-efficient production setup, Kerecis is well positioned for long-term value creation. Our companies have a shared mission of making life easier for people with intimate healthcare needs and an aspiration to lead the categories that we are present in through an innovation-driven culture and clinically differentiated technologies. Together, I believe that we can continue the journey that Kerecis has been on to the benefit of a lot more patients worldwide. As a result of today's acquisition, we adjust our long-term financial guidance. Anders will take us through the details later, but at the high level, we are raising our long-term organic growth guidance to 8%-10% from previously 7%-9%. The guidance assumes around 1 percentage point contribution from Kerecis to Coloplast Group organic growth as of financial year 2024, 2025. On the EBIT margin, we maintain our long-term guidance of more than 30%, but expect short-term dilution of up to around 100 basis points per annum from the acquisition. Please turn to slide number four. If I take a step back, chronic surgical burn and other hard-to-heal wounds are a major area of unmet clinical need. They represent a significant burden for patients, healthcare systems, and societies as a whole. The advanced wound care market, estimated at around DKK 55 billion, is the largest market in which Coloplast is present. Today, Coloplast is focused on the advanced dressing segment, growing 2%-4% per year. Our geographical footprint is concentrated in Europe and emerging markets, mostly China, without a significant presence in the US. Around a quarter of the advanced wound care market, or around DKK 15 billion, is in the US-centric biologics segment. This is also the fastest-growing segment in the market, with a high single-digit growth rate. The biologics segment is expected to maintain its fast growth pace in the years to come, reaching more than DKK 20 billion in five years. The U.S. advanced wound care market represents an attractive opportunity for Coloplast. Within our existing wound care business, we've been committed to developing a U.S.-specific portfolio, and we have an exciting new product launch in the U.S. advanced wound dressing segment coming up next year. The biologics segment represents the largest segment of the U.S. advanced wound care market. It's a highly attractive, high-growth segment and one where we want to be present in with the right technology. With today's acquisition, we obtain exactly that, a presence in the attractive biologics segment with a clinically differentiated technology platform that has the potential to lead the category. With that as a backdrop, let me elaborate on the compelling strategic and financial rationale of the acquisition and why I believe Kerecis is a very strong fit to Coloplast. Please turn to slide number five. First, I'd like to say a few words on the strategic fit. Kerecis is an innovation-driven company born out of a desire to improve wound healing. Kerecis has developed a truly unique technology platform based on fish skin, which is minimally processed, allowing the fish skin to retain its natural properties. As a result, Kerecis' product portfolio is as close as possible to human skin, offering effective wound healing, and it's backed by compelling clinical evidence. I see many similarities here to Coloplast. Both companies were founded to make life easier for patients by bringing innovative and life-changing technologies to the market. Second, with the acquisition of Kerecis, Coloplast expands into the fast-growing and U.S.-centric biologic segment. As mentioned earlier, we find this segment highly attractive and believe that with Kerecis, we have acquired an emerging category leader with a winning technology platform, which complements our dressings position. Last but not least, our companies have a strong cultural fit, rooted in Nordic origins, and both companies have leading sustainability profiles by supporting the greater good in society. For Kerecis, its unique waste-to-value proposition is key to a cost-efficient and simple production process, which ensures both an environmentally and financially sustainable business. Kerecis will operate as a standalone business unit, and Fertram will report to me. Integration will be focused on business support functions and other select areas. With Coloplast's industry-leading scalable infrastructure and complementary geographical footprint, we will support Kerecis in realizing the full potential of its unique technology. Turning to financials, Kerecis has a strong growth track record, and with its unique product offering, the company is well-positioned to continue significantly outgrowing the market. At the same time, we see strong potential for profitability expansion in the mid and long term, driven by continued growth and scalability and supported by a cost-efficient manufacturing setup, which results in a very high gross margin profile. The transaction is expected to be increasingly EPS accretive from our financial year 2026, 2027. Now, let's take a closer look at Kerecis and their exciting fish skin-based technology. Please turn to slide number six. The story of Kerecis starts in 2009 in Iceland. The company was founded by Fertram Sigurjonsson, who has extensive experience from the medical device industry. Fertram was interested in finding a sustainable material that was as close as possible to human skin and with the potential to transform treatment of wounds and human tissue trauma. He found these properties in cod fish skin, a by-product of the fishing industry. Cod fish skin has a very similar structure and composition to human skin. Today, Kerecis is the only approved manufacturer of a fish skin-based product offering for wound healing. Since the launch of the technology in 2016, tens of thousands of patients have benefited from its unique properties. Kerecis is headquartered in Iceland, with production facilities in the town of Ísafjörður, close to the Arctic Circle. The production facilities run on 100% renewable energy, and the production process itself is gentle, with minimal processing. This minimal processing is very important, and I will get back to this point later. Since the launch of the technology, the company has experienced fast and continuous growth, driven by clinical adoption and portfolio expansion. This has enabled Kerecis to gain around 5% market share in the U.S. biologics segment over a short period of time. I believe the growth track record confirms the strength and differentiation of the fish skin-based technology platform, as well as the strong execution by the Kerecis team. Today, there's already a strong customer following. Revenues for the 2021-2022 financial year were around half a billion Danish kroner, with an EBIT of around DKK 1 million. For this year, Kerecis expects around 50% growth and an EBIT margin of around 10%. From a geographical perspective, the business is concentrated in the U.S., accounting for around 98% of revenues. The U.S. will remain a key growth driver and focus market in the years to come, and long term, we see an opportunity to expand Kerecis' presence in markets outside of the U.S. If we look at the revenues by wound type, around 60% today come from chronic wounds, such as diabetic foot ulcer, around 30% come from surgical wounds, and the remaining 10% from burn wounds. We expect continued growth across all wound types, and we see a long-term opportunity to expand into new segments. If we look at setting, the vast majority of sales come from hospitals. Now, let me speak a bit more about the technology itself and why we believe that it holds immense potential to continue to help many, many more patients. Please turn to slide number seven. The technology platform that Kerecis has developed has many advantages. First, as I mentioned earlier, the fish skin-based technology is produced with minimal processing. Since there's no known disease transmission from cold-water fish to human, viral inactivation is not needed, this allows for gentle processing of the skins without the use of harsh chemicals. This is very important as it allows the fish skin to retain its natural properties, resulting in a product that has very similar structure to the human skin and enabling cellular ingrowth. Key ingredients needed for wound healing, such as proteins, elastin, glycans, and lipids, are thus preserved in the process, providing improved wound healing effects. It also makes for a much simpler and more cost-efficient supply chain compared to almost all competing technologies in the biologics category. The improved wound healing properties of the fish skin technology are supported by multiple randomized controlled clinical studies, the conclusion across the body of evidence is similar. The fish skin t echnology results in a reduction of treatment time and associated treatment costs. It works. In addition, the production setup is simple, cost-efficient, and highly scalable to support the growth. Kerecis turns waste material from Icelandic fisheries into medical products that help tens of thousands of patients. The supply of cold water cod fish skin is abundant, and today the company utilizes less than 1% of the Icelandic supply of cod fish, and the Icelandic cod is a well-managed marine resource. Both the fish skin technology platform and its production process are subject to strong IP protection. Another benefit of the fish skin technology is simple logistics. The products can be stored at room temperature and have a long shelf life of three years, so they're always available and ready to use. Finally, the technology platform is also scalable, as the full product portfolio is made from the same processed skin with differences in the form factor. Kerecis's product portfolio today includes various forms and sizes to address different needs of patients with chronic surgical and burn wounds, as well as different channels. Before I hand it over to Anders for a closer look at the financials, let me just summarize. With Kerecis, we have obtained an emerging category leader. The fish skin technology is winning in the biologics segment. It's unique, it's sustainable, it's clinically differentiated. It is a high growth and a high gross margin business. It's well-positioned to lead the category and therefore also well-positioned for long-term value creation. Please turn to slide number eight. Anders, over to you. Thank you, Kristian Sørup Ryom. Before I dive into the numbers, I would also like to say that I'm very excited to welcome Kerecis employees to the Coloplast family. At Coloplast, we are committed to long-term value creation through revenue and earnings growth. We are focused on securing organic growth opportunities as well as selective acquisitions, where we can see uniquely add value to the benefit of the many patients in need of better standards of care. Looking at the growth outlook for Kerecis, we expect a continued strong revenue growth with an estimated three-year CAGR of around 30% until 2025-2026 financial year. On the pro-profitability side, Kerecis is expected to expand its profitability to around 20% in 2025-2026. Beyond 2025-2026, I expect profitability to continue improving as Kerecis gains further scale, with an EBIT margin expected in line with Coloplast's long-term guidance of more than 30%. The acquisition is expected to accelerate Coloplast's group organic growth, adding around 1 percentage point as of 2024-2025. In 2023-2024, the impact from Kerecis on the top line will be treated as acquired growth. Short term, the acquisition is expected to dilute to the EBIT margin with around 100 basis points impact, which also includes acquisition-related amortization. As a result of the acquisition, we adjust our long-term guidance, as Kristian mentioned earlier. We now expect long-term organic growth of 8%-10% from previously 7%-9%, with an unchanged long-term EBIT margin guidance of above 30%. The EBIT margin during the Strive25 strategic period is now expected to remain below 30% as a consequence of the expected short-term dilution from the acquisition. The EBIT margin for Coloplast, excluding Kerecis, is still expected to reach around 30% in the Strive25 period. The long-term guidance on CapEx to sales, net working capital, and tax rate are unchanged. Please turn to slide number 9. Let's look at the transaction details. The total enterprise value is up to $1.3 billion. The total price for 100% of the share capital is $1.2 billion on a cash and debt-free basis. Additional earn-out potential of maximum $100 million is dependent on performance of the financial year 2023-2024. The acquisition will be financed through an equity issue anticipated to be completed in our Q4 2022-2023. Coloplast's largest existing shareholder, Niels Peter Louis-Hansen and family, are supportive of the transaction and will participate in the equity capital raise. Today's announcement does not impact Coloplast's dividend allocation policy. We continue to target a payout ratio of 60%-80% of net profit. With this, we retain the unique profile of Coloplast as a high-growth company, which also provides predictable returns through dividend payouts. Turning to transaction cost, we expect to incur around DKK 50 million in special items in the current financial year, 2022-2023. Closing of the transaction is expected in our Q4 2022-2023. Closing of the deal is subject to customary regulatory approvals, as well as shareholders representing minimum 90% of Kerecis' share capital, having accepted to sell their shareholdings to Coloplast. As of today, 77% of the shareholders of Kerecis have committed to sell their shares to Coloplast. With that, I will hand over to Kristian for closing remarks. Please turn to slide number 10. Thank you, Anders. With today's presentation, I hope we were able to express just how excited we are about the opportunity provided to Coloplast with the acquisition of Kerecis. The deal is strategically and financially aligned with the Coloplast investment case, as summarized on this slide. Kerecis has developed a sustainable and highly scalable technology platform, produced with minimal processing, that provides the benefit of improved wound healing. With its strong growth track record, high gross margin profile, we believe we've secured a unique asset that will strategically transform our presence in the advanced wound care market. Enabled by Coloplast's industry-leading infrastructure, we add a long-term growth compounder to our advanced wound care portfolio, which we expect will drive both long-term growth and significant shareholder value creation. Once again, a warm welcome to the Kerecis team. I know that Fertram and his leadership team are excited to become part of the Coloplast family. I also look forward to having Fertram join us at one of the next conference calls to share his excitement about the technology and the great work done by the Kerecis team. With that, I want to thank everybody for joining the call. Thank you very much. Operator, we're now ready to take questions. Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone who wishes to ask a question may press star followed by 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star followed by 2. If you're using speaker equipment today, please lift the handset before making your selections. Anyone who has a question may press star followed by 1 at this time. One moment for the first question, please. The first question is from Maja Pataki from Kepler Cheuvreux. Please go ahead. Hi. Good afternoon. Thanks for taking my question. I really have only two. Kristian, looking at the announcement today, it's clear you're acquiring a very attractive or interesting technology. Looking back a bit about how you've been talking about the wound management business, at least I always had the impression that what you were going for was scale, and it's not really necessarily scalability that we're getting through the acquisition, because it's in two different segments. I was wondering if you could talk a bit more about the medium-term synergies that you're seeing from having or being present in both, in both segments. Is there anything from a sales synergy perspective that you anticipate could start to come through once you have a more complete product portfolio in your Coloplast wound management business? The second question, you said during the call that the technology can be expanded into additional segments. Could you share some insight into what kind of segments that would be? Thank you very much. Thank you, Maja. Two good questions. It's correct that this acquisition doesn't immediately solve scale for the dressings business. There are, however, obvious commercial synergies in that if you look at the current Kerecis sales team, whenever a patient is treated with the Kerecis product, a number of products that are today in the Coloplast portfolio will be used. I am expecting that I'm expecting that the Kerecis team will be carrying some of the Coloplast products, so there will be positive sales synergies. Conversely, if you look at our European and emerging markets infrastructure today, as we try to expand the Kerecis technology into the world, we have a presence also in wound care call points in Europe. We have it in China. We have it in a leading emerging markets. We would not have to build that from scratch, so there's an ability to leverage the infrastructure that we already have. If you go to the Kerecis website, you will also, you'll also see an overview of the pipeline. There are potential opportunities to use the technology in different applications where there's work being done. This is not something that we have, if you will, focused on or included in our case. The technology is highly interesting. What you'll see on the website will be applications in oral surgery, hernia repair, breast reconstruction, and things like that. Those are not focused right now and not included in the case. Thank you very much for that. The next question is from Oliver Metzger from ODDO BHF. Please go ahead. Yeah, good morning. Thanks a lot for taking my questions. The first one, you mentioned the high gross margin level a couple of times. Could you give us an indication where the gross margin stands? Second is about the international expansion. First, do we have already some regulatory approvals for some key markets? Second is this question, are your growth expectations for the next years include a meaningful international expansion? Thank you very much. Thank you, Oliver. Two good questions. The gross margin levels in the business currently sits at plus 90%. And it really is driven by this notion of minimal processing. So you have a raw material that is cheap to procure, abundant and sustainable, and there's basically no viral transmission risk. The processing is very general. It's highly scalable. And if you compare that to the other technologies in the market, let's say, if you source tissue from pigs or cows, you're basically buying your raw material from slaughterhouses, where you will have to do a lot to virally deactivate the material. It's the same thing with human tissue. If you go to a tissue bank to buy that, you will also have to do quite a lot of work, to basically virally deactivate the material. In that process, that material becomes, if you will, denatured. This doesn't happen with this technology. You have this, if you will, you have this inbuilt advantage from the raw material and the processing, which then also has a highly attractive gross margin opportunity or a gross margin starting point. Now, if you look at the case currently, this is largely built on U.S. expansion. 98% of sales today is in U.S. We have a lot more work to do in U.S., a lot more work. Current sales, you know, we cover a fraction of the market, a fraction, and we think the current market size has ample room to grow. Ample room to grow. Of course, we will be thinking about international expansion. We expect that the focus over time will be the large markets in EU, plus a couple of markets in Asia, notably China and Japan, but not included in the case currently, Oliver. Not included in the case currently. When we talk about the growth rates that are in here, this is U.S. Lots more to do. We also believe that because of that, because there's still such an outlook for U.S. and on international expansion, this is going to be a very long-term growth case. Okay. That's very helpful. Thank you very much. The next question is from Kristian Ryom from Danske Bank. Please go ahead. Yes, good morning, and thank you for taking my questions as well. I have two. First is on whether the Kerecis and your U.S. wound and skin care sales forces will be integrated. Basically, will Kerecis also be used to push your upcoming US specific dressings portfolio, and vice versa? Will the existing sales force be pushing Kerecis product? Second question, somewhat related to the discussion before about gross margin. Can you elaborate a bit about the pricing of the Kerecis products vis-a-vis other biologic tissue transplant products based on a human or a pig tissue, for instance? Christian, thank you. Thank you for that question. We will still push ahead with the U.S. expansion that we've been talking about for dressings. We have an exciting launch coming up, so there will be a dedicated team to do that. What I was referencing earlier was that the Kerecis team, in addition to carrying the portfolio they have today, could also sell part of our dressings portfolio in the work that they do as it fits into, if you will, the treatment pathway. Pricing, we've looked a lot at that, and so if you look at the reimbursement levels, Kerecis enjoys this, you know, similar pricing to the other technologies out there. That's also part of, why the gross margin profile is what it is, of course. Okay. Thank you. The next question is from Veronika Dubajova from Citi. Please go ahead. Hi, guys. Good morning, and thank you for taking my questions. I have three, please, if that's okay. The first one, I'd like to understand a little bit about the historical growth rate that the business has delivered, if you could give us sort of a 2 year-4 year CAGR. To what extent the growth guidance that you have given us includes the reimbursement cuts that are taking place in physician offices for skin substitutes? That would be my first question. My second question is on the margin improvement path from the 10%-20%. If you could comment on the phasing of that and what that's driven by, Anders. Is that just incremental sales growth, or are there any other activities that that margin improvement is dependent on? My third question is a big question for you, Kristian. Obviously, under your tenure, we've now seen two fairly sizable transactions at Coloplast after a period of very little M&A. Just would love to understand, you know, do you have any more appetites as you look out over the next 12 months-24 months, or is this it? Maybe just talk through a little bit of how you're thinking about that inorganic growth. That's it for me. Thanks, guys. Yep. Thank you, Veronika. Good question. Historical growth has been a function of sales force expansion and, if you will, product portfolio expansion. The reinvestment reform that you reference is already included in the growth outlook that we have. You should note, though, that Kerecis, basically, the pricing exposure is a lot less. The vast majority of the sales of Kerecis goes into the hospital channel, where pricing is both stable and attractive. The exposure to price pressure in the outpatient and physician office setting is limited. I'll also say the Kerecis team, if anything, is probably more favorably exposed, given the gross margin profile and the cost to manufacture the product. There's also some really nice work done around serving different channels in the market with markets with dedicated brands. We have included this. To your third question on transactions under my tenure. When we opened the Strive25 period, we said that part of thinking about securing long-term growth, medium and long-term growth for the company would include M&A moves. We've made three, I think, significant dispositions in about 4.5 years' worth of work. One was in urology, with the acquisition of Nine Continents, which was a technology acquisition that we had taken through a clinical trial to take to market. We felt this is compelling technology. One was Atos Medical, which was, in effect, a mini Coloplast. I'd say, partly opportunistically, that there was a chance to secure an asset that we believe that we can run, and it will predictably grow with very high margins over the next 20 years-30 years. Now, there is this. Here, the really, what is compelling is the technology. If you think of all the positions in our portfolio today, in ostomy care and incontinence care, the reason that they have grown over such a long time, there is technology in the core, right? If understanding why is the Coloplast ostomy business, why has it continued to grow and develop like it has? There is a really, really strong adhesive technology in there alongside a strong commercial model. If you look at how the continence business developed over time, it really only took off once we got a compelling coating technology. My strong sense here is also that this segment is here to stay. It's growing because the products that are coming in here, they work. If you look at the entire presence of all the technologies in the biologics space today, you know, from having looked at all of this in probably way too much detail, this company just stands out. This technology platform is, in my mind, very, very compelling because it goes through such general processing and retains all of the great things that drive wound healing. So the proteins, the elastins, the glycans, and the lipids are preserved. If you look at all the other stuff that's out there, because it has to be virally inactivated, it's just a different technology. That's why, Veronika. You should not expect that we will be doing anything major in Strive25. I'd say we have plenty of things to work with. I would also just say, the Atos Medical acquisition is going well, integration is going well, growth is going well, and this is going to run separately, but this is a long-term growth play and a category leadership play. We think this is going to be the category leader in the biologics category. The technology is just, yeah, it's magical. Veronika, let me take your third question around the profitability improvement. As I said in the beginning, we are expecting Kerecis to deliver an EBIT margin of around 20% in 2025-2026, coming from around 10% this year. You should expect the development to be linear over the period, the improvement is really driven by strong growth. As Kristian said earlier, also a strong gross margin and scalability throughout the P&L. Please also remember that Kerecis has invested quite significantly in the commercial setup, especially in the U.S. That's very helpful. Thank you, guys. Appreciate it. The next question is from Robert Davis, from Morgan Stanley. Please go ahead. Yes, thanks for taking my questions. I had a few. One was just on, I guess, getting the approval for the remaining shareholders, just what your confidence level is around that. Had another one around just your the timeline to the margins around 30% over the medium term given your comments you just made around a linear progression from 10%-20% up to 2026, is the assumption that that progression just continues at that rate until you get to 30% in terms of figuring out when we get there? Just within that, how much synergies are you baking in from sort of either cross-selling or sort of other opportunities into the numbers? Those are my questions. Thank you. Thanks for your questions. I will take those. The first one around the shareholders. Right now we have commitment from 77%, and we are very confident that we will get commitment from the remaining shareholders of Kerecis. In terms of your second question, we are also expecting that on a mid to long-term horizon, that the underlying margin of Kerecis will also be at around the 30% EBIT margin level that we are guiding for the total company. That's our expectation. In terms of your third question, whether we have included synergies, we have not included any significant synergies in the financials we are presenting today. We will do some work in terms of integrating some of the back office related functions, but we have not included any significant synergies neither from the top line or from a cost perspective. Thank you. Just sorry, maybe one quick follow-up on your midterm margin targets. Was it fair to keep assuming that sort of linear progression? I think it was sort of a few hundred basis points per year, up to 2026 to get you to the 20% margin. Is that rate of progression further, or does that last push from 20%- 30% take longer in your view? I would say it's a fair assumption that the linear progression will continue. It's also a matter of how much we will invest in terms of driving the top line and how we see opportunities also outside of the US. Okay, great. Thank you very much. The next question is from Niels Granholm-Leth from Carnegie. Please go ahead. Thank you for taking my questions. Just to understand the changes which are ongoing in terms of reimbursement for skin substitutes in the U.S. Could you talk about what is the exposure to those changes in reimbursement removals in the U.S. as regards to Kerecis? Secondly, could you talk about for how long Kerecis would enjoy patent protection on their key, most key technologies? Thank you. Thank you, Niels. Two good questions. Like I said, initially, pricing was an important part of our due diligence. We've spent significant time on this to understand any exposure and the potential impact. I'll just highlight three things, Niels. The vast majority of Kerecis sales is in the hospital channel, upwards of 80%. Pricing is stable there, it's DRG based. It's attractive. There's a smaller part that's gonna be exposed to price pressure in the outpatient and physician office. This is baked into the guidance that we've given you. This is not something that we expect is going to have an impact on growth. The majority of the growth for Kerecis will come from what I think of as a proven growth model in hospital. This, like I said to an earlier question, there is plenty of runway to expand that. We are covering a fraction of hospitals today. There's a ton more work to do there, that's how you should think of exposure. There's also, I think. Yeah. Does it mean that 20% of their sales would be related to physician offices? It's in the outpatient setting. Okay. Thank you. And some of that will be in physician offices. Yeah. Okay. By that, it has already been affected by the changes in reimbursement? Correct. Thank you. The other thing I'd say, Niels, is that Kerecis has done quite nice work, I think, around if you, if you think about constructing a product portfolio to go to market with, for different types of wounds and for different channels. When I say channels here, I'm also thinking about, of course, different pricing. That they serve the market, I think, very effectively, in that way. When it comes to patent coverage, there's about a decade to run on, and we feel confident that already the next generation product is very close to being done. The patent portfolio around the franchise is very, very strong. There's also some highly attractive things in the pipeline that will in effect, make it, you know, once we think we transition to that, will make it almost unthinkable for physicians to go back to first generation product. Great. Just lastly, to understand the EBIT margin progression, the 20% EBIT margin you're talking about in, or assuming, in fiscal 2026? That is before PPA amortizations? Yeah, that's correct, Niels. Okay. Thank you. The next question is from Sam England from Berenberg. Please go ahead. Hi, guys. Thanks for taking the questions. The first one, the growth for Kerecis is well ahead of the board of biologics market. What areas of the biologics market is it taking share from? Is it other animal-based products, and does it have better efficacy than existing animal-based products in the market? Secondly, now you've entered the biologics market, do you think you'd ever consider entering negative pressure market, which would obviously be the other big sort of area of the winning market you aren't in, or does the mechanical device aspect of that market put you off a bit, slightly outside your sort of core competencies? Yep. Good questions. The customers are voting. If you look at the growth profile, basically what that means is that the customer like the offering. They buy the clinical efficacy. They buy, I think, also very much the usability of the product. The Kerecis team is taking share from all of the players that you know. If you walk through also the clinical evidence that the team has provided, there's really good clinical evidence, both against standard care and against amniotic and mammalian, and a good body of evidence and publications to support that. NPWT is not on the table now. It's not on the table now, but I'm not gonna rule that out for some time in the future, but it's not on the table now. Okay, great. Thanks very much. The next question is from Shubhangi Gupta from HSBC. Please go ahead. Hi, thanks for taking my question. My first question is, Kerecis will be operating as a standalone business right now, so what are the integration timelines we are looking at? Second, the product offering of Kerecis, is it cannibalizing any of your existing products in the wound care business? Third, since this technology uses, like, fish skin for tissue regeneration, so is there any threat of transfer of any viral or bacterial infections to humans, or has that efficacy been proved? Thank you. Yes. Let me start from the top. I'm not entirely sure I understood that first question, but we will run the business as a standalone unit, and primarily focused on the U.S. Of course, we will be doing prep work for looking at how to expand it over time. This runs with dedicated setup, a dedicated value chain, own sales team, the works. There's really no cannibalization to our current offering. We're not in biologics today. This marks an entry on the part of Coloplast into the biologics segment. It really is only because we have spent an inordinate amount of time trying to understand whether this is going to be the category leader when we look at the technology. When you ask whether there is a viral transmission risk, there is no viral transmission risk from cold water, caught fish skin to humans. There is none. Which means that you can basically, you basically do not have to virally deactivate the material as you will with everything else that's on the market today. What that minimal processing that then becomes the manufacturing setup then allows you to do, is to retain all of the, if you will, the properties of the tissue that are in effect, making it very close to human skin and promoting wound healing. We retain the proteins and the elastin, the glycans and the lipids in the biological material. For anything else out there, you're basically going to have to virally deactivate it, because that's what the FDA requires. What that means is that you use detergents and alcohol, and in that process, yes, you virally deactivate the product, but you also denature it. This is the key difference, and I can't stress it enough, that this is why customers are changing their habits. This technology is compelling. To your question on whether we believe we have viral transmission risks, the answer is a resounding no. Thank you. The next question is from Heinz Deweer from Investor AM. Please go ahead. Hello. Good day to you all. I have an extra question also, IP-related. Yes. Is it only the production method itself that is patented, or is it also the product itself is protected in some kind of way? It's using the fish skin. It's both product and manufacturing. It's not that, because we're not specialists in this or special IP, but whether someone can use a different type of fish and, No. get the same product? No. There's no entry through that route. There's a question, early on the outlook for patent protection. The outlook is about a decade. Like I said earlier, we are also convinced, 'cause we've seen the generation two product, and we think it's compelling. Once that portfolio is in the market, there'll be even longer patent protection than what the outlook is currently. Yeah. Okay. Could you share with us who is the largest player or competitor in the biologics wound care market? There are a number of companies out there that you can look up and read about. Organogenesis is one, Integra is one, MIMEDX is one, Smith & Nephew is one. You'll probably also note that other companies have acquired technologies in that space, but those are four names that are prominent in the space. Yes. Okay. You expect after this year, you expect a sales CAGR of 30%. Do you expect a decreasing rate or, to put it differently, what do you expect the growth exit rate to be in 2025, 2026? What we've said is that for this year, the business will be growing at around 50%. We've guided for the next period, is gonna be a CAGR of about 30% towards 2025-2026. That includes impact from reimbursement. Yeah. That's where we are now. If, if 12 months from now, we are more optimistic, then we'll do something, but this is where we are now. Yeah. Do you expect it to, for instance, decrease quite rapidly from 40%, 30% to 20% exiting the three-year period, or do you expect more a linear growth over the three years? Let's get our arms around this. For now, we're looking to 2025- 2026 with a 30% CAGR growth rate. Of course, the mathematically over time, as you build a larger business, that will affect your growth rates. The aspiration here is the aspiration is to build a category leader. Okay. If you look at the size of the category and the types of shares that you would need to get to become a category leader, you can also infer that this needs to become a much larger business than it is now. Okay. Last question on, the reporting going forward, will the numbers of Kerecis be taken up into your wound care business, or as it will be a standalone business, will you report on it separately? Let me take that one. We will from a revenue point of view, in our plan is to include it in our wound and skin franchise, but of course, detail out,& the, how much we are growing, and then we will include the whole P&L, in our segment operating profit, note. That's our plans. Yeah. Okay. No, those were all my questions. Thank you. Thank you, Heinz. All right. Operator, any more in the queue? We don't have more questioners in the line, so I hand back to Kristian Villumsen for closing comments. I want to say thank you to everybody who has dialed in today for your interest in the company. I really hope that we have convinced you that this is a compelling acquisition for our company. I just wanna restate what I've said to you. With Kerecis, we have obtained what we believe is an emerging category leader. This fish skin technology is already winning in the biologic segment. Customers are choosing this company and choosing this technology. It is unique, it's sustainable, it's clinically differentiated, it's a high growth and high gross margin business. We think that Kerecis is in a fantastic position to lead the category, and therefore, of course, also to generate significant value over time. With that, I'll close the call, and look forward to seeing you in different settings going forward. Take care.