Welcome to Fisher & Paykel Healthcare's results conference call. My name is Taryn, and I'll be your operator for today's call. At this time, everyone except the guest speakers will be in listen-only mode. Later, we'll conduct a question-and-answer session. We ask for your assistance in keeping the call to a maximum of one hour. If assistance is required at any time, please press the star button followed by zero on your phone and wait for a coordinator. If you require further assistance, you should redial into the call. Please note this conference call is being recorded. I would now like to turn the call over to Marcus Driller, VP Corporate. Thank you, Taryn. Good morning, everyone, and Welcome to the Conference Call for Fisher & Paykel Healthcare's First-Half Results for the 2025 Financial Year. On the call today are Lewis Gradon, our Managing Director and Chief Executive Officer; Lyndal York, Chief Financial Officer; and Andrew Somerville, our VP of Products and Technology. Lewis and Lyndal will first provide an overview of the results, and then we'll move on to questions. We'll be discussing our results for the six months ended 30 September 2024. Earlier today, we provided our 2025 interim report, including financial statements and commentary on our results to the NZX and ASX. These disclosures can be accessed on our website at fphcare.com/investor. With that, I'd now like to turn the call over to Lewis. Okay, thanks, Marcus, and good morning to everyone. I'm going to be referring to the investor presentation pack that we released to the NZX and the ASX today, throughout. So let's start on page three with a recap of some of the highlights for our first half. We released our 950 system in the United States in April, and this coincided with the U.S. launch of Airvo 3 as well. Both these additions have added to the momentum in our hospital business, and our new Optiflow Duet cannula is now available in most major markets, and the evidence continues to build regarding the benefit that this interface provides patients. In home care, we began selling our Nova Micro mask into New Zealand and Canada during the first half, and we launched this into the U.S. just a few weeks ago. This follows hard on the heels of F&P Solo, which has been receiving positive feedback since its launch. Now, on the infrastructure front, our manufacturing site in Guangzhou is now operational following a receipt of regulatory clearance. Now let's turn to page four. Operating revenue for the half was NZD 951 million, up 18% on the prior period, so that's 17% in constant currency. Net profit after tax was NZD 153 million, up 43% on the prior period, or 51% in constant currency. I'm going to hand over to Lyndal shortly for a more detailed run-through of the financials. But first, let's go to the hospital product group that's on page six. Operating revenue was NZD 591 million, up 21% year-on-year, and that's in both reported and constant currency. New applications consumables was up 25%, or 24% in constant currency. And we've noted three key drivers for this there. First, the primary driver, our ongoing efforts to change clinical practice. Secondly, good response to the new product introductions around the world. And thirdly, we do see indications that a relatively high hospital census during the half contributed as well. Hospitals seem to be returning to a more normalized capacity and staffing levels, and we think possibly seasonal hospitalizations in the northern hemisphere from FY24 last year may have persisted into the start of our first half. And this contribution has been strong across the whole portfolio of therapies. Optiflow for respiratory support has benefited from those three drivers I just mentioned. Growth in Optiflow for anesthesia remains robust off that relatively low base, and our non-invasive consumables continue to perform well as well. And then outside of new applications, it was good to see strong revenue growth for the consumables used in invasive ventilation as well. Hospital hardware revenue growth of 25% in constant currency is also a positive signal for us, we think pointing to continued progress in changing clinical practice. So let's turn now to page eight. Home care operating revenue was NZD 359 million. That's up 14% on our first half last year, or 13% in constant currency. OSA mask growth was 16%, 14% in constant currency. And as I mentioned at the start of the call, we've been rolling out Solo and Nova Micro across more markets. Both masks have been met by a strong reception, and our Evora Full Mask OSA also continues to perform strongly, and that was another key contributor during the half. So while today is mostly talking about our financial results for the six-month period, I do just want to take a quick minute to circle back around to the longer-term focus and aspirations. So in the short term, and for us, we're generally thinking five years or so as short term. We see strong growth opportunities with Optiflow, and we see that in both general respiratory and anesthesia patients. In that 5- to 15-year time frame, we continue to invest in developing the home respiratory support opportunity, and then 15-year plus, we're building out our surgical technologies products. I'll pause here and hand over to our CFO, Lyndal York, for a closer look at the financial performance in the first half, and then I'll come back to talk about guidance after that. Over to you, Lyndal. Thanks, Lewis, and good morning, everyone. On page nine, our gross margin was 61.9% for the half, up 141 basis points from the same period last year, or 198 basis points in constant currency. Overhead efficiency was a significant contributor to this improvement. We grew our overheads at a much lower rate than our production volume compared to the same half last year. Our work on efficiency and margin improvements also continued making an impact. Moving on to page ten, total operating expenses grew 11% in both reported and constant currency compared to the same period last year. This is in line with expectations given the impact of the people that we added throughout FY 2024. Operating margin was 22.9% for the half. That was an increase of 394 basis points, or 420 basis points in constant currency from the same period last year. This reflects the improvement in gross margin as well as our operating expenses growing below our revenue growth. R&D expenses grew 14% to NZD 110 million and were 12% of revenue for the half. For the first half results, we recognized NZD 9 million for the R&D tax credit. Last week, we received approval of an increased cap of the tax credit, accommodating our continued investment in R&D. We estimate that about 60% of our full-year R&D spend will be eligible for the 15% tax credit. SG&A expenses this half were NZD 260.5 million, an increase of 10% in both reported and constant currency. Moving to page 11, operating cash flow this half was NZD 233 million, up 49% from the same period last year. This reflects the growth in profit and reduction in net working capital and other capital in this half compared to an increase last year. Tax payments were lower than usual in the first half of last year as we prepaid tax during the 2023 financial year, requiring less tax to be paid in the 2024 financial year. Capital expenditure, which includes purchases of intangible assets, was NZD 55 million for the half, down from NZD 275.5 million in the same period last year. The first half last year included NZD 190 million paid for the Karaka land acquisition. Capital expenditure for the full 2025 financial year is expected to be approximately NZD 120 million. Looking at the balance sheet, debtor days were largely in line with the prior year at 44 days. Net cash at the 30th of September was NZD 50 million, and our gearing ratio was minus 2.9%. Interest-bearing debt was NZD 66 million, all of it being current. Turning now to page 12, we have declared a fully imputed interim dividend of NZD 0.185 per share. This represents a 3% increase on the interim dividend declared last year and continues our recent track record of increasing our dividends to shareholders. This represents a 71% payout of our first half profit and will be paid on the 18th of December. Given our strong financial performance and our net cash position, our dividend reinvestment plan has been suspended. Looking now at foreign currency on page 13, foreign currency movements negatively impacted our net profit after tax, or NPAT, by NZD 2.7 million compared to the same period last year. Movements in spot rates offset by hedging results benefited NPAT by NZD 2.5 million when compared to the first half last year. More than offsetting this was an increase in after-tax foreign exchange losses on balance sheet translations to be NZD 6.8 million for this half. The New Zealand dollar appreciated significantly over the last part of this half to end on the 30th of September very strongly compared to where it was on the 31st of March. From when we provided guidance in August, the movement in exchange rates from the 31st of July to the 30th of September resulted in the balance sheet revaluation impact on NPAT moving from a negligible gain to a loss of $6.8 million. At end-of-October rates for the remainder of the year, we would have an overall positive impact on NPAT of approximately $15 million for the full FY 2025 financial year when compared to FY 2024. This includes full-year FY25 hedging gains of $14 million after tax and full-year FY 2025 losses on balance sheet translations of $4.7 million after tax. Now, back over to you, Lewis. Okay, thanks, Lyndal. So now we'll turn to Outlook on page 14. At 31st October rates, we continue to expect full-year operating revenue to be in the range of approximately NZD 1.9 billion-NZD 2 billion, and net profit after tax to be in the range of approximately NZD 320 million-NZD 370 million. For our hospital product group, we expect similar contributions in the second half from changing clinical practice and new product introductions. Hospital consumables is the big mover in any second-half projection for us, and that's due to the inherently unpredictable nature of seasonal hospitalizations. And these days, that's including the impact of COVID, flu, and RSV on top of general seasonality. And that potential variation from year to year is exacerbated by COVID. Our guidance range accommodates a broad range of northern hemisphere seasonal hospitalization scenarios, and that ranges from a relatively low season to what would be an approximately moderate season. The second half that we're lapping has the second biggest flu season in 15 years and a material COVID component, and so it seems reasonable to expect those components to come down. In our home care product group, we've introduced three new mask models into the major markets over the last 10 months. They're performing well, and we think they'll continue to drive similar results for the remainder of the financial year. I'll end my remarks there so we can open the line to the questions. Thanks, Lewis. Taryn, if I could ask you to please open the line up for questions. Can I please ask everybody to limit your questions to two? This is to ensure that everybody has an opportunity to participate. You can rejoin the queue for any additional questions. Thank you. We will now begin the question-and-answer session. If you wish to register a question, please press star followed by one on your phone. And if you wish to cancel your registration, you may remove yourself from the queue by pressing star followed by two on your phone. Thanks. The first question comes from Lyanne Harrison at B of A. Please go ahead, Leanne. Hi, good morning, all. Can you hear me okay? Loud and clear. Let's start with those comments you just made on guidance and the hospital, I guess the hospital revenues, where you're talking about the range from relatively low to approximately moderate seasonal hospitalization. I just wanted to understand what's the benchmark that you're comparing that to? Because you mentioned also last year. Is that where you're saying you expect it to fall low or moderate compared to the seasonality or the range of hospitalizations that we saw last year, or is it relative to, I guess, a longer-term average? Yeah, good question, Lyanne. Thanks. Our thinking there is that we're lapping an unusual half with a big flu and COVID. So we're looking at our H2 following H1 sequential trends historically. And when we look back, that top end of our guidance would now represent what we've seen in the last two or the most recent two years prior to COVID. It's pretty similar to sequential growth that we would have called a moderate season at the time. Okay. So we're looking at the two years prior to COVID. So if we're looking at the, I guess, the 19-20 flu season and the 18-19 flu season is what we should be comparing to? One more clarification. That's the two years prior to COVID that we classified as moderate, a moderate flu season. I think from memory, I don't remember exactly. I think it might have been 2014, 2018, something like that. But those were the years that we were thinking at the time were moderate, and this top end of our guidance sequentially looks similar to that. Okay. So if we look at the 2014, sorry, did you say 2014 to 2018 season? You're right, but I can't remember the exact years that would have been used in that comparison. They're somewhere around there. Okay. Okay. If you could come back to that, that would be great, because then we'll compare the hospitalizations to those particular years. In terms of my second question, this is about gross margins. Obviously, we saw some huge improvements in gross margin due to the overhead efficiencies. Lyanne, you're breaking up. Can you hear me okay? Okay. Now, the next question is on gross margin. In terms of the overhead efficiencies and initiatives that you achieved for the first half of 2025, can we expect that to continue at the same cadence for the second half? Yeah, I'll take that one, Lyanne. We probably wouldn't expect them to carry on at the same cadence. So the overhead efficiency will get less as we go through and grow into the overhead structure that we've got. So that will diminish over time that we would expect. And then the improvement, the impact from the improvements can be very lumpy depending on when they kick in. We just sort of track that we're still doing those improvement projects and getting them complete. Okay. And when we spoke at the last result, you mentioned something along the lines of expecting 100 basis points underlying gross margin improvement for the full year or 200 basis points improvement, excluding the recall costs. Does that still apply in terms of what you're expecting for full year 2025? Look, because we've had quite a strong first half, that probably goes up a little bit to about 150 basis points, give or take, and that's probably both constant currency and reported using the exchange rate at the end of October for the rest of the year. Okay, and that's 150 basis points underlying? For the full year, yes. Yeah. Yeah. Okay. Great. Thank you. I'll leave it there. Thanks, Lyanne. Our next questions come from Craig Wong- Pan at RBC. Please go ahead, Craig. Thanks. Look, just wanted to talk about the first half revenues. I think that was a good performance coming in just a bit above the top end of your guidance. Could you just talk about what has driven that better-than-expected performance? I mean, it's slightly above, but just wanted to understand what parts have kind of outperformed your expectations. Yeah, another good question. Expectation is a range, so I probably would describe it as within expectation. It's within a range. We think helping it along in hospital, you don't get census data for another 12 to 18 months officially. But if you look at the early reporters, early indicators for census, we think census is probably up in the half, maybe in the 4%-5% range. So we think that's a contributor. And when we look at our volumes and the FY 2024 flu season, FY24 flu season was kind of not a big peak, but longer. And we think that's extended into our April, May a little bit. So we think there's a bit of a tailwind from that in there. I think that's the best answer I can give you. Okay. Thank you. And then my second question, just on the Chinese manufacturing facility that's now up and running, did that have any kind of commissioning costs, or was that a benefit for margins in the period? Just trying to understand the financial impact of that in this period and how we should think about that going forward. Yeah, it doesn't have much of an impact on margin. It's a small facility, a leased facility, so fairly negligible impact on margin. Okay. Thank you. Thanks for your question. Thanks, Craig. Next questions come from Daniel Hurren at MST Marquee. Go ahead, Dan. Oh, good morning, everyone. Thanks very much. Look, full year guidance is unchanged. I think the first half, the guidance you gave a little while ago implied that the first half was stronger than you had originally anticipated. So by sort of process of elimination, that means that the second half, I guess it was an expectation, the second half would be upgraded as well. Firstly, is that right? And I guess, and if so, what are you seeing in the current trading period that would suggest that the momentum is not going to be maintained quite as much in the second half? Yeah, sure, Dan. I'd reinterpret that. I mean, I think when we first gave guidance, we were thinking of our top end as a comparable seasonal hospitalization rate to last year. And when we look at the first half we've had, we're kind of restating the top end to equivalent to what would have historically been a moderate season. So that was the first part of the question. Current trading period, we don't see any signal that would point us either direction on the seasonal impact yet. Okay. Okay. All right. Thanks very much. Look, follow-up question. And look, I've polled you for asking a question on result day, not specifically related to the result. But look, I was hoping you might be able to give us some thoughts on how we should think about the impact of all these tariffs that are in the news at the moment. The U.S. and Mexico appear to be shaping up to each other. Is there any easy way to think through this or any sort of broad outline you could help us with? Yeah. Thanks for the apology on that one, Dan. I appreciate that. So we really don't want to be drawn into any speculation on that whatsoever. But to try and give you a bit more than that, maybe I can help you with the framework that we'd be thinking within. And we'd be thinking long term. We'd be balancing opportunities that we have versus risks. And for us, we're typically thinking about where we would put our growth in volume rather than moving things around. Thanks for your questions, Dan. So the politics will. Okay. Sorry. Well, you go, mate. Sorry. The silence, I thought. You can carry on. No, no. Sorry. Just to clarify. So really, the politics of the day is more affecting your future strategy. Is that what you're suggesting? Yeah, absolutely. We've got to think about the long term. We've got to think about where the opportunities are. And as I say, I think the other key point for us is that we do provide products and therapies that improve care and outcomes. So whatever your scenario, we feel that that does give us some flexibility to work with our customers on mitigating what things that might come our way. That'd be the other comment. Otherwise, for us, we're thinking about the growth, how we grow, and where the growth goes, where the manufacturing for growth goes. Yeah. Okay. Thanks very much. I really appreciate that. Thank you, Dan. Next questions come from Adrian Allbon at Jarden. Good morning, team. Perhaps for you, Lewis, just coming back to the hospital product group on slide six. Just I was wondering if you could give us a bit more sort of breakdown of what's sort of driving the invasive ventilation consumables? Because they look like they've sort of grown 13%, and I think the second half was sort of up 8%. Are you able to sort of say how much is sort of price maybe versus sort of new gains and new geographies? So I think a price is about 2% of that growth. And then I'd be pointing at the other drivers that we've talked about. Probably a bit of benefit from Census, probably a bit of benefit from flu straying into that first half. Okay. And then just within the new apps consumables, are you able to, I think, in the last couple of result calls, you've kind of given us an indication of how much sort of anesthesia represents of the new apps? I think just at the year-end, it was just under 10%. Are you able to give us a guide as where anesthesia sort of ended the first half? Yeah, Dan, that's moved from just under 10% to about 10%. Adrian, sorry, mate. Okay, so just under to just over? Just under to about. Okay. Okay. And so by deduction, that means that kind of the main chunk of this growth has come from effectively your core Optiflow? Yeah. I think with this kind of number, you can assume the growth's coming from everywhere. Okay. So I guess the other two elements within that new apps that make a difference is NIV and, if you like, high-flow oxygen. So within those two, are they sort of broadly even contributors? Optiflow tends to grow at a stronger rate than NIV, and this half's no different. But I mean, I'll come back to that comment that actually the growth's strong across everything. Yeah. Okay. Because I guess the other positive from that is it's quite a good sort of tick up on the sales force efficiency as well, which I presume speaks to sort of protocoling at the hospital level and clinical practice that you're calling out. Yeah, I think that's a fair comment. Okay. And then just maybe saying, with the Airvo 3, given that you've sort of introduced it as a new platform, are you sort of able to give a bit more feedback on how that's sort of been implemented in the hospitals? How it's being? We just missed that word. Implemented. Oh, sort of. Yeah. I guess one of the kind of key things is obviously it's got a wider application to the hospital given it's mobile and it's got auto titration and all that sort of stuff. Yeah. That's exactly right. I mean, it's playing out, I think, as intended. Airvo 3 does facilitate adoption throughout more of the hospital. And that was the goal. And our take is that's exactly what's happening. Okay. Thank you. Thanks for your questions. Thanks, Adrian. Next questions come from Vanessa Thomson at Jefferies. Please go ahead, Vanessa. Good morning, team, and thank you for taking my questions. I just wanted to ask, the Evora growth seemed to have continued for, well, perhaps longer than I expected. I think it was launched in the U.S. in April 2022, and it sounds like it's still getting good growth. Is that product seemed to have a longer trajectory, or do they always have that length of trajectory? Thank you. I don't know how to comment on if that's longer or not, but I mean, your assessment is right. That's been a strong contributor for a number of years now. And it probably comes back to as long as our customers can see a difference between our mask offerings and what they're currently doing, we're going to get pretty good growth. And the assessment there would be that that's continuing. Thank you. And then just on the OSA mask growth, the growth was a little lower this half, if I've got that right, than PCP. ResMed had spoken to that funnel of OSA patients increasing through GLP-1s and potentially wearable devices. Is that something that you guys could comment on? Thank you. I think not really. I mean, we don't see much that you can't accept our number, and we're a relatively small part of the number, so we don't really have any read on that at all, Vanessa. Thank you. Thanks for your questions, Vanessa. Next questions come from Matt Montgomerie at Forsyth Barr. Hi guys. Good morning. I just want to go back to the very top in Leanne's question around assumptions for hospitalizations. I take it that you were saying you're assuming a similar flu season in the hospital business to 2014 and 2018. If we go back to 2018 and look at the skew between the first half and second half in your hospital business, and then assume 15% home care growth, I find it hard to get, I guess, below NZD 2 billion in revenue. I'm just wondering what I'm missing here in terms of your assumptions. Yeah. Okay. So first thing, I didn't do that analysis, Matt. So I can't remember exactly which years it was. I'm now being reliably informed 2014, FY 2014, no, calendar 2014, 2015, and calendar 2016, 2017 are your reference years. Those were years we considered moderate. And then the other thing when you're doing your sum is that we are assuming that this first half that we've got right here now has a bit of tailwind. And it has a tailwind from the FY 2024 season. And it has a tailwind from the census uplift a little bit higher than normal. So that brings your sequential growth down a wee bit on that comparison. Yeah. I mean, are you able to quantify that tailwind? You've obviously made an assumption. Yeah. I wish I could, mate, but no. I mean, we think that's a directional indicator. Okay. And then just on home care, we should interpret your guidance as similar growth in the second half of this year as what you delivered in the first half? Yeah, absolutely. I mean, we just think all the same dynamics are in place, so that's probably your best assumption. Yeah, and just I'll squeeze one more in. Back Back to anesthesia. I think the comment back in May was that you're expecting growth of maybe 50% in the anesthesia business. Is that still how we should be thinking about it? Look, it's thereabouts. But whenever you're looking at growth rates like that, I think you need to tail them off every year. Bring them back a wee bit every year. Yeah. Yeah. But But just for this year. Just for this year, though. Yep. Yep. Thank you. Thanks, Matt. Next questions come from Mathieu Chevrier at Citi. Go ahead, Matthew. Yeah. Good morning. Thanks for taking my questions. Just one on CapEx. I think your guidance is a little lower than it was for 2025. I was just curious if you could give us an idea as well for 2026 and 2027. Yeah. So CapEx is always a tricky one to get the timing right, Matthew. So that's all just sort of timing of when the acquisitions are going to take place. As you recall, we did have elevated CapEx expenditure through the COVID years as we were making sure that if we needed to produce more to treat patients, then we could. And so what you've seen over the last year and this year is slightly subdued CapEx in the plant and equipment side. That's probably going to continue on the plant and equipment side for maybe another year or so before it gets back to a more normal range. The big lumpiness in there, though, is for land and buildings. So we've still got about NZD 60 million to pay for the Karaka site across January and December 2026. And then we're going to start building our fifth building here at East Tamaki, probably the beginning of next financial year. So for FY 2026 and 2027, there will be the building cost for the building. So there will be certainly more elevated CapEx over 2026, 2027. Okay, and could you give us a range? We haven't finalized a contract for the build yet, so I would prefer not to. Okay. No worries. And then just another one on margins. I was just curious to understand how freight rates are tracking and if you're still expecting gross margins to recover in F27 and operating margins another year or two after that. Thank you. Yeah. Look, freight rates is actually a bit of a tailwind for us at the moment, which is sort of two big drivers for that. One, we'd locked in our rates at probably the lowest point for most of this year, and they're locked in for pretty much this entire financial year, but we'll sort of revert back to more market rates for next year, so we see that being a headwind to margin next year. Also, the amount that we're sending air freight this year is lower than it actually even was before COVID, so that's not sustainable, so we see that also being a headwind coming into 2026, so we think for margin, we've had a strong first half improvement here. We've been sort of at pains to say over the past year or so, this isn't going to be a straight line improvement of margin. There'll be ups and downs, but as long as the trend line is heading in the right direction, we're happy with that, so we do have some headwinds coming into 2026, so we'll see where we land there, but yeah, sort of over the next two to three years, still feels reasonable if everything keeps going according to plan, but many, many factors there, and then, yeah, operating margin, we would expect that sort of a year or two after that. Great. Thank you. Thanks, Matthew. Next questions come from Andrew Paine at CLSA. Yep. Thanks for taking my question. Just looking at SG&A ex-China, it looks like it's about mid-single digits this half. Just trying to understand the driver of this slow cost growth. Ideally, you're seeing improved sales, cost efficiency, given the increase in clinical practice change, and if that's the case, do you expect that operating leverage to continue? Yeah. So we are planning to sort of grow our operating expenses. And we look at operating expenses as a whole, sort of SG&A and R&D together. We are planning on growing that a bit below our long-term growth aspiration target of 12.5%. So trying to keep that overall growth at around that sort of 11-ish%, we think over time will give us that leverage. How much leverage we get in a particular year will depend on what the revenue is in that year. But we're sort of certainly aiming to grow it a bit lower than our long-term average for a while, which is getting that operating leverage. Okay. That's great. And just on that, was there any currency tailwinds? We're looking at some of the currencies in terms of where your people are located in manufacturing. Was there any currency factors there at play? For the first half, total currency impacts when we look at this half compared to last half is actually a hit of NZD 2.7 million. And for the full year, we're looking at possibly a benefit of about NZD 15 million to NPAT if the end-of-October rates remain for the rest of the year, about a NZD 15 million tailwind compared to FY 2024 for FY 2025. And that's incorporated in the guidance numbers we've given. Yeah. Okay. No, that's great. And just quickly, just on the OSA masks, you've obviously got a few masks that have been launched in the market. Can you just talk about the competitive dynamics and where you think you are in terms of market share along these launches? It looks like Philips is losing share. ResMed has some masks out there. Would it just be good to understand what it's like on the ground and if you are capturing share, where you're taking it from? Yeah. That's really difficult for us to comment on, Andrew. We don't have any scientific basis to make that comment. But when we look at our growth rate and the other things you can see, it looks like we'd be taking market share. Even harder to say where from, but potentially a bit everywhere would be my best guess. Thanks for your questions, Andrew. Next questions come from the line of Saul Hadassin at Barrenjoey. Yeah. Good morning. Thanks for taking my question. I'll probably just keep it to one. Lewis, the new plant in Guangzhou, China, what products is that plant manufacturing? And similar to Mexico, is that plant really providing product into the region, or will product manufactured in that plant make its way into the U.S.? So at the moment, it's a subset of our Nasal High-Flow Optiflow Therapy that's in that plant. Over time, I think we'll be just continuously expanding the range that's manufactured in that plant. And then at present, that output is destined for China. I think over time, that will grow. There's no concrete plan at present for output from our China plant to be supplied to the U.S. Great. Thanks. That's all I had. Thanks, Saul. Next questions come from Marcus Curley at UBS. Go ahead, Marcus. Good morning. Lewis, you referred to the statement you talked about the benefits of clinical practice change continuing on at the same pace in the second half. I just wondered if you could sort of call out what you thought that was as an element of growth in the first half? We kind of think of all of our hospital growth as fundamentally being a change in clinical practice, maybe plus census, and typically you'd say census is worth 2 or 3% plus demographics, so I'm not sure how else can I help you with that. Our hospital business is driven by change in clinical practice. One way or another, that's what everything is oriented towards, and that's what everything's pointed at. That's what our product range does. That's what our salespeople work on. But otherwise, we'd be growing. Can you call out, if you strip out the flu season impacts, what you think the hospital business would be growing at in the second half at the top end of your guidance? If you strip out flu and if you didn't have what we're thinking, which is flu, a little bit of flu in H1, and a little bit of census uplift in H1, you'd expect your second half. When I say flu, let's use that as a generic term for seasonal hospitalizations because it's a lot more than flu. If you stripped out the seasonality, you'd expect second half growth to be the same as first half growth. So we typically look at the difference between the two as the seasonality. Can you call out what the difference is between the two at the top? We didn't hear the first half of the first half of the off-impact in it. Yeah. Yeah. Is it high to mid-teens? Mid-teens? Sorry, what's mid-teens? The underlying growth in hospital business, excluding seasonal impacts. Oh, yeah. You can certainly get there, yeah, in most scenarios. Yep. Okay. Great. Look at the home care growth. It's obviously accelerated a little bit on the second half of last year, but went from 11%-13% constant currency. Do you think that's a little underwhelming given Solo is in the US market? You've obviously got these two versions of Solo. It's a high-priced product. It just felt like it didn't quite get there. Oh, we're thinking the exact opposite. We're pretty pleased with 14% constant currency growth in masks, Marcus. We think that's good. Okay. So you're comfortable with how that has gone as a launch in the U.S.? Pleased with how that's gone. Are you still pricing it at a premium? Yep. Okay. Thank you. Thank you, Marcus. Next questions come from David Lowe at JP Morgan. Thanks very much. I'll try to continue on with the impossible questions. Let's start with the tariffs. Let's assume the tariffs that have been announced on Truth Social are to be put in place. What's the implication versus competitors? I mean, it seems to me that there are not a lot of obvious competitors in the hospital part of the business, given your innovative products. But in home care, there probably are. Just wondering how you're thinking through the potential impact if the tariffs that have been announced were to be put in place, please. Yeah. Look, I really don't want to be drawn into that speculation, to be absolutely frank with you. And then when it comes to talking about competitors, we definitely don't want to go there. Our focus is really on our business and what we do. I'm going to ask you to name, okay. It seems to me that the competitors are not based in Mexico, and hence, you'd be at a disadvantage. But look, we can take that one offline into the purely speculative realms. Another similarly difficult question, I suspect. COVID seasonality, what's your take on it? Do you think COVID census is going to move with flu numbers, or do you think it's completely differentiated in terms of when the COVID case numbers lift? Well, this is speculation, and I'm happy to go this way as long as you just remember this is speculation. So overall, your take is we'd be expecting the impact of COVID to decrease year on year, overall, over the long term. Seasonality, so far, the data looks like it's got a little bit of a double seasonality, a little bit in the summer and a little bit in the winter. And you're going off a couple of years there, steadily decreasing. That'd be my take. And I think we're thinking that's a reasonable expectation. A little bit of a double bump, steadily decreasing each half. Moving with flu numbers, it seems to. Moving with flu numbers was the other part of your question. I think so far it seems to. Although you're talking a summer bump as well. I guess, have you made concrete assumptions in the guidance you've given around COVID, or is this still a little bit on the unpredictable side? No. No, we haven't really. The implication of that guidance analysis at the top end is you're looking at what we've historically called a moderate flu season. I just remind you, we use flu season. Everybody uses flu season really as a stand-in for seasonal hospitalizations. Flu is a small part of it. COVID going forward is small and probably smaller. Yeah. Thanks for that. I mean, I know the questions are purely speculative. I would observe that the guidance is hard for us when you point to very particular seasons, but then you tell us we need to make an adjustment for the first half. I mean, it sort of loses its, I guess, our ability to even understand what you think is moderate and what you think is mild. I mean, the numbers are there. I'll leave it at that. Yeah. I feel your pain, David. No need to apologize for that. So I feel your pain. But I think trying to characterize seasons and a seasonal impact with any precision, it's just not a practical game. Seasonality is inherently. No, but for us. Yeah. But it's inherently unpredictable, and the impact of seasonals is inherently unpredictable. I think just to maybe bring this back down to ground, this seasonality that we're talking about, it's actually a relatively small part of our business, right? Off the cuff, it's on average maybe 5% of our business. The issue that you're dealing with here is when you have a big one go after a small one, it looks like minus 5% to you. That's the issue you're dealing with. And that's why I think we're talking about it so much. Yeah. I think for us, just clearly understanding what your assumptions are is helpful. And I think, unfortunately, the way you've characterized it, it gets a bit lost because you gave us very specific scenarios, and that's great, but then we don't really know what adjustment you think is right for the first half. And I know we're asking for unreasonable precision, but just clearly understanding what the assumptions were that were in there because that, of course, allows us to monitor it more carefully as we go. But I'm going to stop. Yeah. Absolutely. This at this time. Thanks very much. Absolutely. Well, no, no, I'm happy to help you with this because I understand it's a big topic for you guys. In terms of monitoring it, if these hospitalizations over this second half look something like what we've called out as our previous historical moderate seasons, well, then you're heading towards the top end and everything else remains equal. You're heading towards the top end of our guidance. Yeah. Okay. That's clear. Thank you. Thanks, David. Next questions come from Rob Morrison at Craigs. Go ahead, Rob. Hey, good morning. Can you guys hear me? We got you, Rob. Cool. Very good. So first question, I note that a product called Airvo 3 NIV has been approved by the U.S. FDA. And I assume that's Airvo 3 with NIV capability. Is that on sale in the U.S. currently, and does guidance assume a contribution from that into H25? No, it's not currently available in the United States at the moment. It's limited release, New Zealand only. I wouldn't expect it in this year either. Cool. Thank you. Okay, and so device growth of 21% in hospital was pretty strong. Was that largely driven by the Airvo 3, or were device sales stronger across the board? So hospital hardware or device growth, yeah, it's strong. There's a little bit of a distortion there, maybe two distortions, and that is that we are lapping a half where our sales force has previously been focused on customers that had acquired a lot of hardware during COVID. That was the strategy. That was the call point, and that's what we were doing. So kind of by definition, that doesn't really drive hardware growth. And the U.S. also probably more extreme in those acquisitions than anywhere else. So we're lapping a half where hardware was pretty low. Based on our sales strategy, hardware was pretty low, primarily in the U.S. And then the second, so there's a lot of growth. We're back to selling business as usual. We're moving hardware. And then I think the second possible impact there is we launched 950 and Airvo 3 in the U.S. concurrently in this first half. So we're suspecting there's a bit of pent-up demand in there as well for those new products because it's been a long time coming for the U.S. Okay. Thank you for that. That's a big driver for the hardware growth, mate. Okay. That's helpful. Thank you. And final thing, a little bit that you don't want to answer too many specifics on Mexico, but maybe very high level, during the first Trump administration, there was a lot of very aggressive talk, and then that didn't eventuate on tariffs that could affect companies like you. Is our base case a similar assumption this time? Similar assumption to what, Rob? Oh, sorry. Just that not too much eventuated the last time he was in office. Oh, your guess is as good as mine on that one. I mean, the current or the latest situation is based on the entry of illegal drugs and migrants into the United States. So your guess is as good as mine, Rob. Maybe better. No, no worries. Cool. Hey, thank you guys so much. I probably just had one more comment. That Mexican plant for us, we see that as a fabulous asset. It's stocked full of really committed people with a really long track record of constantly growing their efficiencies. Thanks, Rob, for those questions. We don't have any other questions in the queue. So if you have any follow-ups after this, please feel free to call me or Dan. And so now turn over to Lewis for some concluding comments. Okay. Thanks, Marcus. Thanks, everyone, for joining us today on the call. Thanks also very much for your questions. I would like to finish by acknowledging the people of Fisher & Paykel Healthcare for your ongoing efforts and your contribution to this result. And as always, a word of thanks to our customers, suppliers, clinical partners, and shareholders. We do appreciate your support. So thank you very much, everyone, and enjoy the rest of your day. This concludes today's call. Thank you again for your participation. You may now disconnect and have a great day.