Ladies and gentlemen, welcome to the Smith & Nephew First Quarter Results 2021 call. My name's Bethany, and I'll be coordinating your call today. Certain statements in this presentation are forward-looking statements. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from those included in these statements due to a variety of factors. More information about these factors is contained in the company's filings with the Securities and Exchange Commission. Now, I would like to hand the conference over to your speakers today, Roland Diggelmann, Chief Executive Officer, and Anne-Françoise Nesme, Chief Financial Officer. Whenever you're ready. Thank you very much, operator. Good morning, everyone, and welcome to Smith & Nephew's trading update. As mentioned, with me on the call today is our CFO, Anne-Françoise Nesme. I'd like to start with a few opening comments. Firstly, we're very encouraged by our progress in the first quarter of 2021, and that's for a number of reasons. One, our markets are getting better. The rollout of vaccination programs and the resilience of healthcare systems are actually bringing back elective surgery volumes towards more normal levels and in an increasing number of regions. Our approach through the pandemic has been to maintain our commercial readiness for the recovery that is now underway. Second, we've made progress on the priorities and growth strategy that we set out in February at the time of the full-year presentation. The evidence of better commercial execution in our existing business is building. We're driving performance from our acquired assets, and we're delivering on our 2021 R&D pipeline and investment. Finally, of course, visibility has improved on the recovery from COVID. With that, we're pleased to return to giving financial guidance. Now, Anne-Françoise will take you through the numbers for the quarter, and I'll then talk about some of our strategic progress, and we'll finish with the details of our 2021 outlook. With that, over to you, Anne-Françoise. Thank you, Roland, and good morning, everyone. I'll start by summarizing our revenue by region. Our first quarter revenue was $1.3 billion, which represented a 6.2% underlying growth and an 11.5% reported growth. This includes the effect of two extra trading days compared to the first quarter of 2021. As you can see on the charts in front of you, there was significant variation between regions. In part, that reflects the timing differences in lapping the first COVID impacts in 2020, and we're also seeing different trajectories of growth and recovery between markets, particularly later in the quarter. As Roland mentioned, though, the balance is that an increasing proportion of our end markets are moving closer to normal. Now, going into the detail of each region, the U.S. grew by 7.1% and strengthened as the quarter progressed with increasing vaccination rates and easing of restrictions enabling the recovery in elective procedures. Other established markets were more of a mixed picture. Japan and Australia showed solid growth. Europe varied by country. While the U.K. strengthened in the quarter, most other European markets slowed in March as infection rates rose, and we expect that trend to continue into the second quarter. In emerging markets, China sales reflected a maintained recovery and, as you may recall, an earlier and greater COVID impact in the first quarter of 2020. We've also seen in China some distributors changing ordering patterns in anticipation of the VBP for a subset of our reconstruction products. In other emerging markets, we saw signs of improvement, although again, there was significant variation between countries. Looking at the picture from a franchise perspective, it's important to note that all three franchises grew and all improved over the fourth quarter of 2020. Sports Medicine & ENT grew the fastest at 10.4%, while Orthopaedics grew at 1.6% and Advanced Wound Management grew by 9.3%. Recovering elective surgery volumes, our initiatives to improve commercial execution, and the effects of starting to lap the initial COVID impact in some of the regions also contributed to the growth. I'll now go into the details of the franchises, starting with Orthopaedics. As in 2020, our hips business outperformed knees in the quarter. We've seen throughout the pandemic that surgeons have prioritized hip procedures, and that's continuing across all affected regions. Our hip business has consistently grown above peers in recent quarters and continues to benefit from the rollout of our OR3O dual mobility system. In knees, the dynamics were similar to 2020 as we reported before. We are, of course, working towards adding the cement-less knee options for which we are on track to launch later this year. Pleasingly, our other reconstruction grew by 17.7%, driven by the U.S. robotic sales following the launch of CORI, our next-generation robotic system. Our shipments are now increasingly to new customers after our early prioritization of upgrading our NAVIO customers in 2020. We're continuing to develop additional surgical applications and regional rollout, and we expect further launches over the course of 2021. Trauma growth reflected the continued success of the EVOS plating system and the growth of our INTERTAN nail. We're also progressing with the commercial integration of the orthopedic business acquired from Integra. We have started. We have combined the sales team, we've trained the reps on the new portfolio, we've set new targets, and we are making the instrument sets available. Now moving to Sports Medicine, both joint repair and arthroscopic enabling technologies grew double digits. The recovery in Sports Medicine has been faster than the other markets we operate in. The significance of the outpatient setting, the younger patient mix, and the involvement of acute injury all contribute to the speed of the rebound. Only knee repairs remain a little slower, with more exposure to competitive sports injuries. Very much in line with our strategy are acquired products such as REGENETEN and recent launches such as HEALICOIL KNOTLESS, Knotless story continue to make important contribution across segments. While ENT growth is still negative, it improved over the previous period, reflecting a rebound in the Asia-Pacific region. Volumes of procedures in established markets remain slow as patients continue to be cautious and we're continuing to see lower ENT infection rates. Finally, moving on to Advanced Wound Management. Advanced wound care grew by 4.5% with a rebound in Asia-Pacific after the region's slow finish to 2020. Importantly, this franchise has stayed focused on improving commercial execution, and Roland will cover this in more detail in a moment. Bioactives' growth was helped by the timing of shipments with year-end orders that would historically have been shipped in December, coming in January instead. Even without this effect, growth driven by demand has been double digits. Advanced wound devices largely recovered in line with the broader franchise in each region. The lower growth rate in AWD is driven by the geographic mix, with a higher proportion of sales in Europe and less in U.S. and China, our fastest-growing markets. Now I'll hand back to Roland, who will cover the progress on our strategy. Thank you, Anne-Françoise. I'd like to spend some time on our progress against the priorities for 2021 that we sent out to you in February. One of those priorities is the return to top-line growth and to recapture the momentum from before the pandemic. As you know, organic growth is a key driver of shareholder returns, and it is what enables positive operating leverage through our P&L. The aim is to build on the new commercial model and the leadership from 2018 and 2019 by maximizing the potential of our existing portfolio, then delivering value from the acquired assets, and of course, launching a new pipeline of innovation in 2021 and beyond. One example here is the progress of the wound franchise. It continues in the first quarter. It is a good example of the delivery against the first two components of our growth strategy. Firstly, an important driver of the improvement has been the detailed work done by the franchise team together with the regions. I'll just take you through a couple of examples of what they've been working on. In our go-to-market strategy, the franchise leaders focus more on key account management, on winning in bigger blocks of the businesses. We also allocated more of our sales force towards working with large hospital networks, to C-level contacts and major customers, and to national tenders and processes outside the U.S. We've also established a new launch excellence process for Advanced Wound Management with a dedicated team and a more systematic end-to-end process that involves the regulatory sales training, product supply, and regional rollout plans. The franchise has also renewed its focus on people, including on sales training, development, and mentoring programs, and we're seeing good results from this, with employee engagement scores up, with a lower attrition by about 50%, and also 40% of management positions recently filled by women. Secondly, the performance of Bioactives shows us delivering on the value of the acquired assets, in this case, Osiris. That's an important part of the business case, was actually to sell skin substitute products, GRAFIX and STRAVIX, through the Smith & Nephew sales force. We're seeing the benefit of that coming through now. There's more to come. We're planning for launches of new forms of GRAFIX and STRAVIX this year, and we're also preparing for geographic expansions beyond the United States for these products. Moving on to innovations, where there is early progress on delivering our expanded pipeline. Many of the highlights of this quarter have been the recently launched growth drivers, such as what Anne-Françoise touched on, OR3O, the continued success, the strong adoption of EVOS in trauma, for instance. In addition, four of the projects we highlighted to you in February have now received their first regulatory clearances and are expected to launch in the coming months. In Orthopaedics, the new instruments for hip and knee surgery are ready to be shipped in the U.S. The EVOS large fragment and periprosthetic plates should also help extend the success of our plates and screw business. Actually having the large fragment plates gives us access to a bigger part of the segment and makes the whole of the system a more complete solution for our customers. It's been adopted very positively by our customer base. In sports medicine, the next generation of FAST-FIX builds on our already leading meniscal repair portfolio. It's a smaller, flexible device that gives access to parts of the meniscus that is hard to reach with existing devices. We plan to launch in the middle of the year, and we see a good opportunity from launching this as the knee repair market recovers further from COVID. DOUBLEFLO is a further upgrade to the arthroscopic tower. It combines inflow/outflow pumps for better control in fluid management. This actually follows the launches in visualization, in mechanical resection, and in radiofrequency. The INTELLIO Connected Tower really has been upgraded and enhanced with DOUBLEFLO, and it will continue to enhance our competitiveness of the tower. We have upgraded the tower now on all elements within two years. These first regulatory clearances are an exciting start to our pipeline delivery for the year. As you can see from the slide, there's more to come across all of our franchises. Now, driving operational improvement is another priority for the year. In February, we announced the new operations transformation program. It targets around GBP 200 million of annualized cost savings by the end of 2023. Work is underway on the key work streams. This slide shows two examples which are already well advanced. On the left, you can see we're making good progress with a new manufacturing facility in Malaysia. We expect the site to actually begin production next year, enabling us to support future growth from a lower-cost location. We're also in the process of outsourcing our global warehousing and distribution to single regional logistic hubs in Memphis, in the Netherlands, and in Singapore. All of that managed by specialist third-party partners. The European and APAC projects are already significantly advanced. The Memphis outsourcing is underway. When complete, we should benefit from the greater scale and from the expertise of our partners, including their automation technologies. Of course, our focus on efficiency goes beyond manufacturing and operations, and we continue to control discretionary costs across the entire organization. Finally, I'd like to cover the outlook for 2021. As mentioned, the improved visibility means we're in a position to return to giving financial targets. We are targeting underlying revenue growth of 10%-13% for the full year. With that, we continue to expect hips to outperform knees, Sports Medicine & ENT to rebound strongly, and the trajectory of Advanced Wound Management to remain strong. As of April 23rd, foreign exchange will add around 3% to growth and M&A around another 2%. For the trading profit margins, we have a range of between 18% and 19%. Consistent with our previous outlook, this includes some temporary negative operating leverage at the gross margin level relative to 2019 and as a result of COVID. Our efficiency programs will provide a partial offset to this. Also, we continue to expect dilution from investments in R&D of around 100 basis points. An initial dilution from M&A completed since the start of 2020 of around 150 basis points, and a headwind from transactional foreign exchange of around 100 basis points. Finally, we expect the tax rate on trading results to be in the range of 18%-19%. There are still unknowns, of course, and we've made some assumptions about the course of the pandemic. Our assumptions assume the improvement in conditions through the rest of the year, with surgery volumes largely unconstrained by COVID in the second half of the year. In summary, it's been a really encouraging start to the year. The impact of COVID, of course, isn't over, but it's good to see more of the world emerging from the pandemic that has been such a challenge for our societies and of course also to our industry. Our industry also is very resilient, and the first quarter also is starting to show the benefit of our approach and our strategy for growth, and we expect that to continue as the recovery progresses overall. With that, looking forward to taking your questions. Thank you very much. Ladies and gentlemen, if you would like to register a question, please press star followed by one on your telephone keypad. The first question comes from Tom Jones of Berenberg. Tom, your line is open. Good morning. Thank you for taking my questions. I have three, if I may. The first was on the knee business. I was wondering if you could try and help us sort of tease out how much of the weakness in that business is market-related, and how much of it is just due to your lack of cementless knee? I guess what I'm intrigued by is what you think your volume performance is if you took cementless knees out of the equation. Just trying to get a sense for how much of an improvement we might be able to expect once you launch a cementless knee. The second question, I just wondered if you could give us a bit more detail on what's going on in China with the Orthopaedics tenders timing, what you expect the impact to be, et cetera. The last question for Anne-Françoise. I just wondered if, and I know it's a bit early to talk about 2022, but your hedging policy is a little difficult for us to kind of fathom out externally. My question would be if FX rates stay where they are, what kind of margin impact would you expect in 2022 versus 2021, from transactional FX? Thank you, Tom. I'll take the first two questions then. On the knee side, I think what we expect is we continue to expect higher growth and fast recovery on the hip side. I think two factors here, very good performance of the newly launched products with a pull-along effect, OR3O to the entire hip franchises. Secondly, of course, there is more acute injuries in hips, so physicians tend to favor or do hip surgeries before knee surgeries. Knee surgeries are easier to be deferred, and that's what we're seeing in our numbers. Of course, the other side of it is not offering a cementless knee in the U.S. This is a trend that's in the U.S., not so much in the rest of the world. Difficult to assess the volumes and the numbers at this stage. We are going to see a recovery as the markets overall recover. I think that's also important to note. We're working full speed on providing a cementless option towards the second half of this year. What we do expect to see then is, of course, a pickup of both the entire franchise and an ongoing shift to cementless. On the China situation, the value-based purchasing, we are preparing for that tender. The tender has been delayed a couple of times. We expect the tender to go through in the second half of the year. Probably first results in implementation towards the end of this year, and then the impact in 2022. Just to put it in a broader context. We don't know yet what an impact this will have on pricing, but what you should understand is, of course, those pricing numbers are end user or to hospital prices. This is from distributors to the hospital. This is not our prices to distributors. We have seen, as Anne-Françoise has mentioned, a certain slowdown in ordering from distributors ahead of this volume-based purchasing tenders. When I look at the impact, it only does cover a part of our portfolio in orthopedics, namely primary hips and primary knees. Even there, some categories are excluded. When we look at it overall, it probably only accounts for about a third of our business in China. You have to put that into the context of our overall China business as part of our global sales. We are, of course, monitoring this very closely. We have a strong team, a very high brand recognition in China. We feel we're well prepared for volume-based purchasing in China. Okay. That's great. Then for the third question, Anne-Françoise? You don't want to take the question on hedging, Roland? Come on. You must take it. Tom, you're right to say it is a complex matter, and our hedging policy is to hedge 12 months forward on a rolling basis. As we see today, and as we've seen in the past few years, the U.S. dollar was strengthening, and therefore we had headwind both in 2020 and 2021. Recently, the U.S. dollar has weakened, and therefore the impact will reverse. To your question, I don't have a crystal ball, but as we look at the exchange rate today, and assuming that they stay around current level, we'd estimate that the benefit in 2022 would be around 50 basis points. Of course, we'll have more clarity throughout the year, and as we progress towards our 2022 hedging activities and as they're put in place. Okay. That's great. That's very helpful. Just even a rough idea gives us something to work with at this stage. That's very useful. Thank you. No problem. I am not making exchange rate forecasts though, please. No, that's fine. Thank you very much. The next question comes from Hassan Al-Wakeel from Barclays. Hassan, please go ahead. Thank you very much. I have three questions. Firstly, if I can follow up on China, is your base case that we will see a similar cut to what was seen at the provincial level, rather than what we've seen nationally with drug-eluting stents? Secondly, could you talk about the growth in robotics and how CORI installations are progressing and what the split here is between ASCs and hospitals? Finally, could you talk a bit about the strength in hip, which continues to outperform peers? What proportion of your implant sales in hip today are from the OR3O? Thank you. Thank you, Hassan. Thanks for the questions. On China, it's very difficult to predict, but of course, as you mentioned, we have the experience from the provincial tenders that are now being expanded nationally. We would expect more of this in a similar range. The drug-eluting stents market is a very different market, very different dynamics than the Orthopaedics. Very difficult to predict at this stage. We're optimistic that, A, we're going to be able to play an important role in this tendering, and that we will be able to manage the impact on pricing. On CORI, we don't disclose the numbers and the breakdown. I think what we mentioned is, of course, initially we've worked with some existing customers. We're transitioning NAVIO to CORI. Now the next phase is really to go after new customers. Some of them will, of course, be in ASCs. Some of them will be in traditional settings. The opportunity that we have here is with CORI, we have a very versatile solution. We have a very flexible handheld and a very small footprint solution, which I think is very well-suited to ASCs. Now, that said, the majority of the customers will continue to be the traditional hospitals. That, I think, is just also a function of where knee replacements, for the most part, are still being done. On the hip side, yes, great continued success from OR3O. I think it's a combined success of OR3O really meeting the market needs, and the combination with a leading surface technology, with OXINIUM, which has been on the market for many years, has got great clinical data to support. Of course, a strong hip stem franchise overall and the ability to combine with great solutions there as well. We don't provide the breakdown in the subcategories, but I think it's fair to say that OR3O has been a great success, and that it has a pull-on effect on the entire franchise in hips. Brilliant. Thank you. Thanks, Hassan. The next question comes from Lisa Clive of Bernstein. Lisa, your line's open. Great. Thanks very much. A few years ago, Smith & Nephew did a big reorganization of the European wound business. My understanding was it caused some disruption, a fair amount of attrition. Has this finally stabilized, and what can we expect from that particular division going forward? Second, you mentioned Bioactives in the longer term, moving beyond the U.S. I thought historically the clinical data was just not particularly robust enough for other payers to start using Bioactives. Has this changed or could you talk a little bit about the commercial strategy and how it may be different outside the U.S.? Third, just on the growth of the uncemented knee procedures. Are uncemented knees really only being used in robotics? Do you have any estimates for what proportion of knee replacements today are using robotics, both within the Smith & Nephew portfolio, but also sort of more broadly for the market? Thanks very much. Thank you, Lisa. Quick question. You were talking about wound for Europe. Did I get that right? Yeah. Okay. Thank you. Yes, indeed. I think we have gone through a period earlier where we had high attrition rates. We have changed the leadership. We have changed the approach. We have changed some of the teams. This is particularly important because our wound business in Europe is the largest. I think we've turned that corner. I'm very encouraged by the progress made, and it's progress on many fronts. It's our go-to-market, it's leadership. It's really the processes, and an improved capabilities around large deals, tenders, and also not just selling to the clinical and the professional base, but also, of course, to the C-suite. I feel that we've made really good progress in wound in general and in Europe in particular. On the Bioactives, we feel that we have the clinical data to certainly go outside the U.S. as well. I think it will take some time. Of course, this is human-derived products, and there is a very particular or distinctively different regulatory pathway in different geographies. Based on this, we've decided to go first to Japan, and then to other markets. I don't think there will be a different adoption to Bioactives than in the United States. I think what you will continue to see, of course, is different price levels, as is typically the case outside the U.S. We're optimistic about bringing those Bioactives to outside the U.S. market. Third question on the knees, on cementless and the share of robotics. I think cementless is being used, of course, in traditional surgery as well as in robotic surgery. I would say that it is within robotic surgery, cementless accounts for a higher proportion. Our goal has always been to pursue this dual strategy of offering cementless for both robotics, but then also, I would say traditional surgery. The trend to cementless is more pronounced in the U.S., less so in Europe and in Asia for many different reasons. This is surgeon preference. This is the ability to mark up higher prices in the U.S., which is less so in Europe. Indeed, cementless will continue to play an important role across the markets, and particularly in the U.S. Of course, cementless surgery is faster because you do not need to wait for the cement to harden, and that offers a time advantage over cemented surgery. Just one quick follow-up on that. Cementless is not exactly a new concept. It's pretty standard in hips, and my understanding was 20 years ago, it was used in knees quite a lot, and just the outcomes weren't very good because of the initial instability. What has changed? Has there been a sort of technology change that makes cementless better today, or I'm sort of just wondering why this has just roared back, particularly in the U.S., in the last sort of year or two. I think also originally, I think we had some good results in cementless knees. I wouldn't say that overall the concept didn't work. I think we've seen different designs. We've seen different rates of success. Overall, there has always been this notion that if you have a better fit and if you have a really accurate cut, of course, cementless offers bone-preserving opportunities initially, and hopefully in the event of a revision, you would also have a higher bone stock that would be preserved. I think we've made a lot of progress around designs, around surgical time, that is important. That's a huge trigger, of course. We're also talking about the blood barrier and the blood loss. Designs, cuts, technology advantages, bearing surfaces, everything playing together. I think cementless has a strong role to play, and they are part of what a physician should expect as having choices between both cemented and cementless, depending on the patient anatomy and on the patient needs. Okay, thanks very much. Sure. The next question comes from David Adlington of JPMorgan. David, your line is open. Yeah, morning, guys. A couple of questions. Firstly, just on margins, you're still talking towards that negative operating leverage. Now, I know that's relative to 2019, given the stronger growth in the first quarter than a lot of us were expecting, maybe you could just talk about whether there's upside risk to that margin guidance or whether you would plan to reinvest any upside coming through the margins. Secondly, on wound care, just interested to see who you think you're taking share from and whether you're using price as a lever to do so. Thanks. Thank you, David. Anne-Françoise, do you want to go ahead with the margin question? Yes, I take the margin. Good morning, David. When we look at the margin, and as we consistent with what we said during the full-year results, there's a number of dilution items which are not dependent on revenue. When we talk about the FX dilution or investment behind growth levers like R&D and the M&A, that has a dilutive component that will not be driven by volume. As where we sit today, there's still a negative operating leverage at gross margin, given that our production volumes are not quite back to 2019 levels, hence the dilutive effect. Also, if you take the organization as a whole, and we should not underestimate that, there's effectively two years of price erosion, two years of cost inflation, which we're partially offsetting with our restructuring, with our process efficiencies, activity, and process improvement. That's where you've got to bear in mind when you look at the margin. Now, having said all this, we are managing our cost base carefully, but importantly, what will drive the margin is the return to growth. That, as you've heard us say before, it's driving that revenue growth that will drive margin over time. I'll go with the wound question, David. We haven't seen any price impact. Actually, it's been relatively remarkably stable, so to date. I think it really comes down to better commercial execution. Some of it is also due to the timing of certain contract renewals. When I look at the breakdown between wound care, Bioactives, and devices. On the Bioactives, we mentioned we've also had some of the timing impact between late 2020 and beginning of 2021 that has helped us. Overall, I think we just continue to execute better on the basis of having really great and differentiating products. On devices, I would say that this is still, as you can see, the numbers are still negative, but also a function of elective surgeries and still lower levels. That has had an impact, but there too, very confident that with our PICO line, we'll continue to grab share. It's difficult to really extract where from we win share. We haven't seen all the market data yet, but we'll certainly follow up on that. Perfect. Maybe just one follow-up in terms of your expectations for the second half. Are you expecting just a return to kind of normal market conditions, or are you baking anything in for what we think is probably some pent-up demand out there? We definitely see a pent-up demand. What is very difficult to actually assess is how big that pent-up demand is. What we're seeing, though, is that typically when restrictions are eased, there is a pretty quick recovery in the markets that can absorb higher volumes. That's more a question of the healthcare system and of the readiness of the healthcare system and of the capacity. Some markets, like the U.S., are responding quicker, and some others, like the U.K., with a more centralized system, are responding more slowly. I think that's how we will have to continue to monitor and be very close to these markets and see how we can actually also support the restart. That's how I would qualify it. An assumption that we've made is, of course, is a return to more normal levels or volumes of surgery, especially in the large markets. We do expect, of course, continued weakness in some of the markets that are struggling today. Unfortunately, we've just seen the news from India, albeit a small market for us. Latin America continues to struggle. In general, hopefully on the northern hemisphere, with the continued rollout of the vaccine programs and the better weather and the higher activity levels, this should help us. That's great. Thank you. Thanks, David. The next question comes from Michael Jüngling from Morgan Stanley. Michael, your line's open. Yeah, thank you, good morning. I would like to ask three questions. Firstly, on U.S. knees. Can you comment to the degree your cementless knee, how it's gone through testing? Have you completed testing? Does the surgeon need an entirely new instrumentation kit, or can you use the existing kits that you have on other knees? Question number two is on the U.S. sales force. To what degree has that sales force now returned to pre-COVID customer engagement? I'm referring here to travel, physical hospital visits, and helping in the OR. Question number three is on CORI. Can you comment how high up the priority list selling CORI is for your Orthopaedics sales force this year? Do you have a specific target of robots that you must sell in 2021? Thank you. Thank you, Michael. U.S. knees, we're on track. We obviously are not going to go into details of where we are with the program, we're on track for delivering the second half. On the instrument side, some of the instruments, of course, are both on LEGION and JOURNEY will be able to be used. Some components will have to be adjusted, of course, for the cementless application. Overall, this is going well. We also have just refined our instruments program to actually upgrade the instruments, simplify, and this is also ready for rollout as we speak. We invested in parallel in the instrumentation, which will make it easier to use for our customers. On the U.S. customer visits, indeed, the commercial team is going to visit and assisting in surgeries wherever they can. The U.S. market, of course, is pretty heterogenic. There is areas where everything is back to normal activity levels, and then there are some states and regions where we continue to see constraints. I would say in general, of course, the access to hospital is still somewhat less than before COVID, and then also hospitals have adopted some different protocols, of course, in looking to protect healthcare workers and the patients from COVID. What I would also say is that we continue to see a shift towards decentral, towards ASCs for the obvious reasons, being more flexible, closer to the patient in providing care. On your third question on CORI, yes, of course, we have targets. We have internal targets on the number of CORI that we want to bring to the market. We are not going to disclose these publicly, but we have those targets. As I mentioned, the first phase was, of course, to upgrade from NAVIO to CORI with existing, with good customers. We're ready now to roll out to new customers, and we're seeing actually a very good reception of CORI overall. Great. Can I briefly follow up on the U.S. knees? Maybe I should have asked the question slightly different. Will the surgeon require additional training to do the new porous cementless knee, i.e., can it be done very quickly, the rollout, or is there an extensive training program that these surgeons need before they can start to operate? Yes. Thank you. Great question. Typically, surgeons are used to doing both cemented and cementless knees. That's through their training, they've grown up to do both. Some have preferences for one or the other. Some have more an approach around patient conditions, patient anatomy, and other factors. I think the training requirements typically will be limited. Certainly, physicians will be already familiar with the different features of both LEGION or JOURNEY. They will be familiar with the implant, they will be familiar with the instrumentation. I would expect the training requirements to be very limited, both because of the familiarity with the system and familiarity with cementless surgery overall. Great. Thank you. Thank you, Michael. The next question comes from Veronika Dubajova from Goldman Sachs. Veronika, your line is open. Excellent. Thanks, guys. Thank you for taking my questions. I will keep it to two, please. One is, I just want to follow up on some of the CORI conversation, Roland, and just get your perspective on how much you think the robot is a lead for the implants versus the implants are a lead for the robot. I think there's been quite a lot of discussion about this in the industry more broadly. I guess in your case in particular, you are using a slightly different technique versus your peers. Is that something that you think is a differentiator that is driving placements and then following through to the implant sales, or is it more the other way around? I guess Zimmer, in particular, have become a bit more aggressive in terms of giving the robot away for free in return for higher prices and greater volume commitment, it'd be great to get a sense for the placements that you're putting out there into the market, how they break down between lease agreements versus outright sales, if you can share that. Sorry, I know it's a very big question, but lots in there. My second question is just following up on the China tender question. From memory, I do recall China being an extremely profitable market for you guys. Just curious if there are offsets should the worst case materialize, that do you see a fairly aggressive price reduction and some of that is passed on to you? What is the flexibility that you have in the rest of the P&L to protect the margin that you are currently earning in China? Should we be assuming that in that worst-case scenario, that does indeed drop through to the bottom line on a fairly straightforward line? Thanks. Okay. Thank you, Veronika. I'll try to give some color on CORI. I think, in general, I think when we look at procedures, we continue to see a shift from implant to the overall procedure. I think that's something that we continue to foster as well. We're looking at this more as a real experience rather than just implant features that goes from preoperative to postoperative. Different elements here play a role. We're offering remote physiotherapy, for instance, for patients that, for instance, are going through ASCs and return to home quicker. We are looking at the entirety of the delivery of a surgical experience. I think the shift that you're seeing is not just robotic specific, but really specific to the experience that a customer is going through. Robotics play an important role here, such as traditional instruments do, and I think we've recognized that. I think the robot can be a lead. It doesn't have to be a lead, but it can be a lead. I believe here with our handheld, we have a true differentiator. We certainly have a differentiator when it comes to very flexible approaches, small footprints, not requiring a CT scan. There's quite a few advantages here that lead to that differentiation. With regards to the different models. Yes, so far we've seen good selling of CORI, but I believe we have exactly the same opportunities and flexibility in our commercial models than other companies in the marketplace. Again, I don't see robots being very different from what we had traditionally here. This industry was one that at some time, very long time ago, sold instruments. Instruments became an element that was being placed, and we're seeing similar patterns here. Altogether, I would say we have the flexibility like everyone else in the industry. On China volume-based pricing, we'll have to wait and see where the real prices come out. I think there is always an opportunity through higher volumes to compensate some of that. Obviously, yes, China is important to us, but we've never said that China is extremely profitable. We believe that we have the ability in China to continue to grow. We have the ability to also look into our business model altogether to react. It's too early to tell where exactly this will be. If I just take you to the overall numbers, I would say right now, as we said, this is primary hips, primary knees that are part of the national volume-based pricing tenders. Some categories are even excluded from primary hip and primary knees. It accounts for a smaller part of our overall business in China, and I don't think this will have an immediate effect on our global P&L. That's very helpful. Thank you. Thanks, Veronika. The next question comes from Kate Kalashnikova from Citi. Kate, your line is open. Hello. Yes, this is Kate Kalashnikova from Citi. I've got two questions. First one on REGENETEN. REGENETEN is a key growth driver, but what we hear from surgeons is that while it's a great product, there are more synthetic alternative solutions available in the market, up to three times cheaper than REGENETEN. Are you seeing more competition for REGENETEN, and how concerned are you about those cheaper synthetic alternatives? That's the first one. Secondly, again, speaking to surgeons, they say that in quite a few cases, lower reimbursement for procedures in Ambulatory Surgery Centers compared to hospitals means that some procedures that can be actually done in ASC are still only done in hospitals. Do you see this lower reimbursement as a meaningful limiter to growth of Ambulatory Surgery Centers? Thank you. Thank you, Kate. The line was a bit breaking there, hopefully I got the questions right. On REGENETEN and alternatives, and then on ASCs and the reimbursement. Let me start with REGENETEN. I'm not at all concerned about synthetic options. I think what REGENETEN brings is actually a huge advantage in the clinical results over synthetic options. We have a lot of clinical results published that actually demonstrate that. We continue to improve the instruments for better delivery, and I'm very encouraged by the growth patterns that we see. I think we continue to see a really good runway here. I think the differentiator is actually just that REGENETEN is not the synthetic option, but that it delivers truly a better clinical outcome. I think it's a huge progress for patients with rotator cuff injuries and deficiencies. On ASCs, I think again, we continue to see a shift to ASCs. This is driven by different factors, technological advances, improvement in surgical procedures, the proximity to patients. Of course, same-day surgery, all of this has been enhanced by COVID, where decentralized and specialized care has been accelerated. Indeed, there is lower reimbursement overall. What is, of course, also fueling the shift is the fact that we now do have reimbursement, we do have CMS codes for total knee, uni knee, total hip, that will continue to accelerate that shift. The lower prices means that we have opportunities to also improve our delivery, the model, the support we provide to ASCs. We see this as an ongoing trend, we believe that we're well-positioned, especially because we call on ASCs with our Sports Medicine franchise already. We are a known entity. We're a known brand in ASCs. I hope this answers your question, Kate. It does. Thank you. The next question comes from Julien Dormois from Exane. Julien, your line is open. Hello. Good morning, Roland. Good morning, Anne-Françoise. Thanks for taking my questions. I'm left with three. The first one is a follow-up to Michael's question on the launch of the cementless knee, and you alluded to the fact that there should be limited training necessary for the launch of the product. Would that mean that we should expect a return to market growth for the knee franchise already in full-year 2022? That would be the first question. Second question is probably more for Anne-Françoise, but it comes to the phasing of margin in 2021. Usually, Smith & Nephew is having quite a higher margin in the second half versus the first half. Given the magnitude of the growth we will have in H1 compared with H2, should that be different, and should we expect something more balanced this year? The last question is the broader one. With the situation now normalizing and probably you're now having less time dedicated to manage the pandemic, do you believe you will be in a position to come up with long-term or mid-term financial targets at a later point in 2021 or early 2022? Thank you. Thank you, Julien. Then maybe Anne-Françoise, you can speak about the margins then the long-term targets. The cementless launch, as I mentioned, we're looking for a limited launch in 2021 towards the second half of the year. You need to think of this as a longer-term process. There is many different components on two main knee brands, on LEGION and on JOURNEY. Within those categories or within those brands, there is different components that need to be brought onto a cementless platform. The rollout will be in 2022 and beyond. This is an ongoing process there. I would say the one important factor is the scale of the launch, we're talking about hundreds of instruments, of course, that need to be delivered, I'm talking about the specific instrument components for cementless. It's a big exercise, but it's a great opportunity for us, indeed, because we do very much need the cementless options in the market to complement our cemented options. Good morning, Julien. On margin, you're right that there's a historical pattern of certainly we see higher margin in the second half, particularly linked to the revenue pattern. When we were looking at our assumptions, there is a pattern, however, when we were looking at our assumptions, some expenses are normally weighted towards H1, like big conferences or a rep meeting, probably will move towards H2 to the extent they can. That may mean a shift a little bit to the historical pattern we've seen, but other than that, we don't have much more to add. Then before I move to the long-term outlook or guidance, I just want to reiterate for 2021, clearly, our focus is to return to growth, deliver on our optimization, on our process efficiency, and of course recover to COVID. That's priority number one. Then the focus midterm is the growth, as we talked about, and delivering the 4% weighted average market growth. That is our ambition. That will come through the delivery of the pipeline, excellent commercial execution, and our continued focus on landing in tuck-in M&A. Okay. Thank you very much. You're welcome. This concludes today's questions, so I'll hand it back to yourselves, Roland and Anne-Françoise. Thank you very much. Thank you all for your interest in Smith & Nephew, and I wish you a good day and all the best. Stay safe. Thank you. Thank you, everyone.