Ladies and gentlemen, welcome to the Coloplast conference call. I am George, the Chorus Call operator. I would like to remind you that all participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. This time, it's my pleasure to hand over to Lars Rasmussen, Interim CEO. Please go ahead, sir. Thank you very much. Good morning and welcome to this extraordinary conference call on the back of the profit warning announced yesterday. I'm Lars Rasmussen, Interim CEO of Coloplast, and I'm joined by our CFO, Anders Lonning-Skovgaard, and our investor relations team. We will start with a short presentation by Anders and myself and then open up for questions. Please turn to slide number three. Yesterday, we revised our guidance for the full year 2025/ 2026 and pre-announced our results for the first half of 2025/ 2026. Before addressing the drivers behind the guidance revision, I want to emphasize that we delivered a very strong quarter, excluding Wound & Tissue Repair, with solid underlying performance across the majority of the group. Chronic Care delivered a strong quarter with a pickup in momentum in Ostomy Care, as expected, and continued good momentum in both Continence Care and Voice and Respiratory Care. In Interventional Urology, momentum remained strong, driven by continued growth in Men's Health business in the U.S. In Wound & Tissue Repair, performance in the quarter was challenging. We are seeing a slower- than-a nticipated market recovery in the U.S. skin substitutes outpatient setting following the Medicare reimbursement change, which has led us to lower the growth outlook for Kerecis for 2025/ 2026. Additionally, we have seen a lower momentum in our European dressings business, which we anticipate will continue into the second half of the year. Since November, Kerecis growth expectations have been progressively reset from around 25% in November to around 10% in Q1, and now around 0%. Reflecting this development, group organic growth is now expected at 5%-6% versus around 7% previously. Since the implementation of the new fixed payment rate of $127 per square centimeter on January 1st, outpatient demand has been pressured by elevated uncertainty around payment and claims processing, intensified price competition as existing players try to eliminate inventory, and a partial shift by providers towards traditional lower-cost dressings that do not require the same insurance claim process as skin substitutes does. Together, these factors have resulted in a broad pause in outpatient market activity, with providers acting more defensively and delaying utilization. In this environment, market conditions have limited the pace at which conversion and uptake of MariGen can contribute to mitigating the impact from Shield exiting the market, extending the transition period under softer demand. Based on current visibility, we now expect these dynamics to persist into second half rather than Q2 marking a trough as previously anticipated. On a positive note, in the inpatient channel, which comprise more than 70% of our Kerecis business, we continue to see a healthy double-digit growth rate. Currently, with a slight easing of momentum compared with previous quarters, but we view this as a short-term impact attributable to overall uncertainty in the category currently and as a reflection of some channel distraction arising from outpatient players evaluating whether to pursue presence in the inpatient setting. For the group, despite strong performance in majority of our businesses, we are also adjusting our outlook on EBIT growth in constant currencies as a result of the developments in Kerecis. We now expect a group EBIT growth in constant currencies before special items at around 5%, from previously around 7%. This assumes a Kerecis EBIT margin of around 7%, sorry, 0% from previously around double digits. The return on net capital after tax before special items is now expected around 15%. While we are looking at a challenging year for our Wound & Tissue Repair business, we continue to expect a strong year for our remaining businesses, with continued good momentum in Chronic Care and a high single-digit growth in Interventional Urology. We see the Medicare reimbursement change as a temporary setback to the Kerecis business. With the updated guidance, we are looking at a reset year for Kerecis, where we will take a significant hit on our Kerecis outpatient business. As a result, we get a lower top-line growth. We also see the market contracting based on this. However, looking ahead beyond the current fiscal year, we are looking at a de-risk Kerecis business with a lower exposure to the outpatient setting, a unique technology based on a strong clinical evidence and an attractive long-term business potential with growth now expected at a slightly lower pace. With this, I'll hand over to Anders for a brief review of our key financial figures for Q2 and our revised guidance assumptions. Thank you, Lars. We delivered 6% organic revenue growth and 6% EBIT growth in constant currencies before special items in the second quarter. The Q2 EBIT margin before special items was 26% against 27% last year, and includes around 120 basis points negative impact from currencies and around 50 basis points negative impact from Kerecis. For the first half of the year, we delivered 6% organic revenue growth and 5% EBIT growth in constant currencies before special items. The EBIT margin before special items was 26% compared with 27% last year in the first six months, reflecting around 70 basis points negative impact from currencies and around 40 basis points negative impact from Kerecis. Net profit before special items was DKK 2.8 billion or a 6% increase from last year, positively impacted by lower net financial items due to gains on exchange rate adjustments as expected. The free cash flow- to- sales ratio was 20% compared with 15% adjusted last year, reflecting favorable developments in working capital and lower net financials, partly offset by higher CapEx. Return on invested capital after tax and before special items landed at 15% on par with last year's adjusted figure. As a result of the slower market recovery now anticipated in the outpatient setting, we have recognized an impairment loss of DKK 3 billion against the Kerecis goodwill. Following the impairment, the total carrying book value of Kerecis amounts to around DKK 6 billion, compared to around DKK 9 billion previously. The write-down is treated as special items in the P&L and has no cash flow effect. As Lars alluded to, we view the current fiscal year as a reset year for Kerecis business. Long term, we continue to view Kerecis as an attractive business with a unique technology, strong clinical evidence, and long-term growth and profitability potential, outright with a growth now expected at a slightly lower pace than previously assumed. Looking ahead to the full year, we are now expecting organic growth 5%-6% from around 7% previously. As Lars mentioned, the updated guidance assumes continued good momentum in Chronic Care and high single-digit growth in Interventional Urology. For Wound & Tissue Repair, we now expect Kerecis growth to be around 0%, and we now expect a softer momentum within Advanced Wound Dressings in Europe, while we maintain our assumptions of negative impact from the Advanced Wound Dressings product return in China in the first three quarters. Reported revenue growth in Danish kroner is now expected at around 3%, from around 4% previously, reflecting the lower organic growth outlook and a negative currency impact of 2-3 percentage points. EBIT growth in constant currencies before special items is now expected to be around 5% and assumes an EBIT margin for Kerecis of around 0%. We expect the currencies to have a negative impact on the reported EBIT margin of around 80 basis points from previously around 50 basis points, driven by the Hungarian forint against the Danish kroner. Our expectations for CapEx and tax rate are unchanged, while we now expect return on invested capital after tax before special items at 15% from previously around 16%. Finally, the updated guidance reflects the current uncertainty related to the ongoing situation in the Middle East, including uncertainty around the timing of a potential resolution. We continue to closely monitor the situation and assess the impact on our business on an ongoing basis. On May 12th, we will release our full earnings release for the first half of 2025/26. We will also host our ordinary conference call on the same day, this time with the opportunity to welcome our incoming President and CEO, Gavin Wood. With this, let's open up for questions. In respect of time, I kindly ask everyone to limit their questions to one. We will now begin the question- and- answer session. Anyone who wishes to ask a question may press star and one on their telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Questioners on the phone are requested to disable the loudspeaker mode while asking a question. Anyone who has a question may press star and one at this time. Our first question comes from Hassan Al-Wakeel with Barclays. Please go ahead. Good morning. Thank you. I will try to stick to the one question, maybe with a couple of parts. On Kerecis, you've talked to this being a temporary drag in the past that shouldn't spill over to inpatient. The recovery isn't coming through as hoped, and we are seeing some spillover into inpatient. Why couldn't this get worse on the inpatient side and this overall pressure to be more structural than temporary? Related to this, what gives you confidence in the midterm guide and the assumed acceleration from here? Thank you. Yeah. I think that's a super good question. The reason why the healthcare reform was there was because of the cost in the outpatient setting. As we understand it's actually working. The costs to Medicare has come down very significantly. We also see that as a consequence of this drive, we have all been asked to show the efficacy of the dressings that we have in the market. We have shown that there's a real effect from our dressings. We think that we are, on a longer- term basis, actually standing in a better position than we were before because it's very clear, not just to ourselves, but also to the rest of the people who are using these type of products, that we have products that are super well documented and some of the best documented products in the market at all. The products that we have there address a real issue because very often that's the last resort before amputation. We do know that from a society point of view, that to avoid an amputation is over the medical cost, a good business case for society. Therefore, we don't see that this should impact the inpatient to a very large extent. That's of course a point of view. That's based on the fact that the government or Medicare was calling for a substantiation of the clinical data behind the products, and we have been able to deliver that very strongly. That's maybe the first part of it. I don't remember the second part of your question, to be honest. The second part was on the acceleration and guidance towards the midterm targets post this year. Yeah. Let me take that, Hassan. We still believe that we will see an improvement in our Kerecis business going forward. This is driven by our inpatient. We have strong products. We have a strong pipeline of new products coming into the market. We have a good setup. There's still a lot of potential to penetrate the accounts where we already are. We have invested significantly into our sales force. We really believe that we have a good outlook to really drive growth and also take market shares in the inpatient setting in the coming years. As Lars is saying, we see this year as a setback related to our outpatient, but in terms of our midterm outlook, we really see that it's the inpatient that is going to drive that through strong innovation and strong clinical documentation. To top that off, we do have a very healthy pricing environment in the inpatient setting already, and that is based on DRG codes. It's a very different setup. We do see a little bit of impact, but we still see healthy double-digit growth rates in inpatient at this point in time. We actually think that will remain a strong growth driver going forward. Okay, thank you. I'll jump back in the queue. The next question comes from Aisyah Noor with Morgan Stanley. Please go ahead. Hi, good morning. Thanks for taking my question. I just have one on the wound market in Europe, where you called out some softer momentum. Could you specify what countries these are that are showing weakness and whether this is reimbursement related or whether you think you are losing market share? Thank you. That's France and Germany, and that is based on the announced reforms in the markets. Thank you very much. The next question comes from Graham Doyle with UBS. Please go ahead. Yes, morning. Thanks, guys. Just on the guide for this year, it looks to me that given the momentum you had in the second quarter across most of the businesses and where the comp is for Kerecis, and I guess particularly Q4, it kind of feels like maybe the revenue guide is very conservative at the 5% level. Is that a fair way of putting it? Could you give us a little bit of a sense as to how you thought about this guide when you cut it to 5%-6%? How determined are you not to have to cut this again? I just really want to understand how much, for want of a better phrase, how much kitchen sinking you've done here. Thank you. Yeah. Let me take that one. We revised our organic growth guidance down to 5%-6%. We are expecting that our Chronic business will continue at the current level we have seen in Q2. We also expecting that our Urology business will be sitting something around the current level, so 7%-8%. We are expecting that the majority of our businesses will continue the momentum we have seen for the rest of the year. That's how we see it. We have said that at Kerecis our current assumptions is sitting around 0% for the year. That means that second half will be flat to negative. It's also fair to say that we have been maybe a little bit more prudent with the Kerecis outlook. Because we have seen a significant reduction in the Kerecis growth outlook throughout the year. If we are to look into the lower level of the 5%-6%, then it will mean that the Kerecis will be hit to a larger extent than we are currently looking into. We have also put in some impact from the Middle East situation. In the Middle East, it's around 1%-2% of group revenue. We have not seen any impact yet, but we have built in some uncertainty in terms of how it will develop into the next six months. We have built in some risks related to the Middle East as well. Those are the main assumptions for the second half. Yeah. That's really, really helpful. Thanks a lot, guys. The next question comes from Jack Reynolds-Clark with RBC Capital Markets. Please go ahead. Hi there. Thank you for taking the questions. Had one on, kind of, trying to understand the different dynamics going on in HOPD versus doctor's offices. Could you comment on that, kind of whether you're seeing any difference in dynamics there? You compare the doctor's office to? HOPD to hospital outpatient. Okay. Yes. It's the same fixed rate that they have both places. They— In that sense, they're the same dynamic. Okay. The dynamic is, as we said, you know it's just the uncertainty whether the products are really covered at the price that we anticipate? That's why there's a bit of hesitancy for the time being. Okay, understood. If I could just be very cheeky and squeeze in another question. Just on the write-down, I'm trying to kind of understand or kind of square your commentary around your confidence in the kind of the longer-term prospects for Kerecis with the kind of the write-down of a pretty significant chunk of the value. Kind of what specifically has changed to drive the write-down, that still enables you to have confidence in the longer-term outlook for the business? Yeah. Let me take that one. The write-down as a result of the impairment test we have done as a consequence of the revised guidance is really due to, first and foremost, this year, that we are now looking into a business that is more than DKK 300 million in revenue lower than we had anticipated. We have also slightly reduced our outlook. Those are the main reasons for the write-down of the Kerecis book value. The other metrics we are working with from a WACC, terminal growth, tax, are ballpark unchanged. Great. Thank you very much. The next question comes from Julien Dormois with Jefferies. Please go ahead. Hey, good morning, Lars. Good morning, Anders. Thanks for taking my question. It actually relates to the non-Kerecis part of your business. Because looking back at the past few quarters, I mean, you had already a decline in Advanced Wound Dressing broadly similar to what you reported for this quarter. We're talking about -2%, -3%. I'm just curious to understand why you're calling out softer European market as we speak. Is there something that I'm missing here? And the second very quick question on that front is just could you remind us what is the share of sales for Wound & Tissue Repair coming from Advanced Wound Dressing? I have 50%-60% on top of my head, but could you please confirm? Thank you. On the first part, the softer growth in Europe is related to Germany and France, where we are currently having some actions from the government to lower prices. That is really what we talk about when we talk about the soft outlook for the wound dressings. Julien, to your second question, our Wound & Tissue Repair, around 2/3, that's the dressings, and 1/3 around that level is the Kerecis. Okay. Thank you. The next question comes from Veronika Dubajova with Citi. Please go ahead. Good morning, Lars and Anders. Thank you for taking my questions. Apologies. I'm going to be very blunt because I think we're all sitting here a little bit confused. I think, Lars, when you issued the midterm guide last year, you said, "Look, this is conservative. We've taken a view that de-risks the business. We're committed to delivering. That was something the prior management team couldn't do." We are sitting here now with one of four years where you are going to deliver 5%-6% growth rate. For you to hit the 7%-8%, you are going to have to grow more than 7% in every single year after this year, given where fiscal 2026 is coming in. I'm just trying to understand why you wouldn't take this opportunity to look at that midterm guide and maybe think about it. Maybe, Lars, from your perspective, I guess, as an outgoing Interim CEO, I guess, is this a conversation that the Board is having at this point in time? I'm just a little bit perplexed, right? We've had this issue with over promising and under delivering for a number of years now, and we're sitting sort of at the beginning of a new strategic period with a potentially similar problem. Apologies for the bluntness of the question, but it's just, I think, something that's really on every investor's mind this morning. Thank you. We wouldn't expect anything less from you, Veronika. If you take the slide that we shared at the meeting, and which I guess you can see on the screen, then you have five pillars there, showing four of them super healthy growth. We actually anticipated that the Wound & Tissue Repair should be a double-digit growth. That in and of itself, I think would explain why we were expecting that 7%-8% is a reasonable target. I think that the background for the change in Kerecis right now is a healthcare reform that has both a magnitude but also a way of being conducted that I think that none of us have ever seen before. As far as I'm informed, the idea was to take the DKK 10 billion spent in outpatient on this category and take that down to 25% of that spent. Down to 75% in one go. It seems as if it's working, and that does have an impact on this year. There's no doubt about that. We see a strong momentum in the other businesses. We also see that this comes back. It might be our patient is completely different than what we thought when we went in. Fortunately, that's less than 7% of the business. That's also why we say that we are in a sense, taking a setback that we have to recover from, and this is a setback year. When looking at the numbers apart from that, I have good reasons why we should be able to do 7%-8% growth. Thank you, Lars. The next question comes from Richard Felton with Goldman Sachs. Please go ahead. Thank you very much. Thanks for taking my question. My question's on input costs. Obviously, over the last six weeks or so, we've seen big moves on the price of oil and the price of petrochemicals. Is there any preliminary thoughts on how that might impact raw materials and COGS inflation for you, and the timing of that? Is that something that you'll start to see at the end of FY 2026 or is that more into FY 2027? Thank you. Yeah, let me take that question. In the first half of this year, we have not seen any impact. We actually seen our raw material prices a little bit lower than the previous year. However, when we start to look into the second half, we are starting to see some impact. As you know, our raw materials is around 50% of our cost of goods sold. We are starting to see some negative impact on especially injection molding chemicals field. In my guidance, in terms of EBIT growth, I've included something around 1% for the second half. Also because we still have some inventory and there's also a lack, in terms of impact. We will also see a smaller impact on freight. On energy costs, we are fully hedged, and right now the spot rates are actually at a very decent level, so I'm not expecting any negative impact on the energy side. Yeah. Thank you. The next question comes from Oliver Metzger with Oddo. Please go ahead. Yeah. Good morning. Thanks for taking my question. It's about the European wound care market. We come out of some years where the environment was pretty healthy and with lower price pressure. Now, you mentioned Germany and France, with some more headwind, and I assume this might last at least until it's analyzed. Pretty often pricing in Germany is used as a reference point also for other European markets. When now the two biggest markets in Europe become more tougher on pricing, do you expect also that we leave now a period of low price pressure and move into a more reform-orientated environment? Yeah, let me take that one. We are calling out Europe, as Lars also explained earlier, that we are seeing a lower momentum, especially in France. That is really pricing dynamics. As you know, France is already at a very low- priced market. We unfortunately continue to see prices becoming lower, and that is impacting our French wound business. What we're also seeing, that is Germany. In Germany, there's potential, you can say impact also from price reforms as that is currently being announced. Our European dressings business here in Q2, we saw negative growth, and we have not seen that for quite some time. It is driven by those two markets. Do you see some implications for the other markets? For this financial year, our European dressings business is impacted by these two markets. The other markets are okay, but our two biggest markets in the dressings area, that is France and Germany. Okay. I will leave it at that. Thank you. We had actually set up half an hour, but we have two more people having one question each. David and Susannah, we will take those questions, and then we end after that. David, please go ahead. Next question comes from David Adlington. Please go ahead, sir. Thanks, guys. Most of my question's been asked, maybe I could just touch on the dividend. I just wondered if there had any discussions at board level about whether there was any need to cut the dividend at all. Thanks. Your dividend. Now I have an echo here. David, you asked about our dividend policy? David? Are you still there? Can you hear me? Yes, I can hear you. Maybe you could lower your— Any discussion about the dividend— Apologies, gentlemen. Mr. Adlington, if you finish your question, I will mute your line because there is a loop coming from your line. Once you're finished, I will mute you, then we're going to go with the answer, and then in case I will open back your microphone. Thank you. Yeah, hopefully you can hear me. I just wondered if there had been any discussion about the need to cut the absolute level of dividends. Thank you. Oh, okay. For now, our dividend policy is unchanged compared to what we said when we announced the Impact4 strategy back in September of last year. For now it is unchanged. Then the final question? Last question for Susannah. Hi, great. Good morning. Can you guys hear me? Yes. Okay, great. My question is on Kerecis in terms of the new guidance. It implies that things can get worse in the second half of the year, and maybe just if you could talk to why you're concerned that you could see sort of a worse environment in the second half of the year given the pricing changes came in as of January 1st, i.e., the beginning of your Q2? Yeah, we talked about that earlier in the call, but our expectations for Kerecis for the full year is around 0%. It's also fair to say that in our organic growth guidance of 5%-6%, there's also room for the Kerecis business coming in lower. We have been quite prudent. We have done this because it has been very difficult for us to basically forecast, especially the outpatient situation. If it's becoming more worse in Kerecis, we have also built that into our guidance, versus the 0% that we are now aiming at. Okay. I guess I was just trying to understand if the expectation is it just prudence or if there's anything that makes you believe that the outpatient is sort of getting incrementally worse even after the pricing cuts came in? It's prudence. Okay, great. Thank you. Thank you. Thank you. Thank you so much. That's all from here. Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines.