Good morning, everyone, and a warm welcome to our Ambu Q4 and full year 2025/2026 results. My name is Britt Meelby Jensen. I am the CEO of Ambu, and with me today, I have our CFO, Henrik Skak Bender. We will go through a presentation where I will start with the business highlights before I turn over to Henrik to go through the financials. Let me start by a summary of the progress that we have had in the past financial year. Overall, as we predicted a year ago, we had a growth picking up to be stronger towards the second half of this year. We ended the year with 13.9% organic revenue growth in Q4, leading to also an endoscopy revenue growth in Q4 of 21.2% and 2.8% in Anesthesia & Patient Monitoring.
This strong uptick led to a total organic revenue growth in the full year of 10.1%, driven by this re-acceleration of Endoscopy Solutions where we grew in total 16.4%, a strong testament to the continuation of driving the single-use conversion from reusable endoscopes. We continue to lead this conversion through innovation of new solutions. This was in particular in the past year shown in our respiratory segment, where we saw a re-acceleration of our growth, leading to a total growth for the year of 14.6%. Urology, ENT, and GI also continued a strong momentum with 18.2% growth for the year, driven by our existing solutions. Anesthesia & Patient Monitoring grew 0.4%. This was very much driven by the market-leading portfolio that we have and offset by some of the lower volumes in anesthesia that we talked about after our Q2 and which has stabilized since then.
Taking a step back, it was a strong year, but what I think is even more important is that when we look ahead, there is a significant opportunity for us. We see very strong momentum on our innovation pipeline that we are going to talk more about today. We see strong momentum in our commercial execution, and we are very much excited to deliver strong growth ahead. When we look at how that looks for the coming financial year, we guide an organic revenue growth of 9.5%-11.5% growth, and this is driven by continued momentum in our Endoscopy Solutions, where we expect growth of around 15%. If we take a look at the results, and what you see on the left here is that Endoscopy Solutions now make up almost 2/3 of our total business.
Focusing on the numbers from Q4, we had an organic revenue growth of 13.9%, endoscopy grew 21.2%, and Anesthesia & Patient Monitoring 2.8%, leading to an EBIT margin of DKK 851 million, and which resulted in Q4 17.2% growth. If we look at the free cash flow, we delivered almost DKK 500 million in the quarter. Oh, sorry, in the full year, and DKK 216 million in the quarter. Let me dive more into the specific segments, starting with respiratory. Again, what we saw in respiratory in the past quarter was a growth of 21%. If we look at the full growth for the year, it was 14.6%. What is important to highlight here is that when we look ahead, we still see significant headroom.
Respiratory is a more penetrated category than some of the other categories, but still the majority of the procedures in this segment is still performed by reusable endoscopes, so there is significant runway ahead. What is interesting is also that our growth was driven broadly by our aScope 4 and our aScope 5 bronchoscope portfolio. Then we also had SureSight adding another dimension to this growth, both in terms of driving the bronchoscope sales, but also by establishing its own business where we see synergistics between the bronchoscope portfolio and our new SureSight video laryngoscope portfolio. When we look ahead as well, there is strong momentum that we see going into the next fiscal year in this segment. What we focus on is really, what is it our customers need? How is it we strengthen our offering?
That is what has basically created our growth momentum, using the playbook that I will come back to later in my presentation. Let me turn to the rest of our endoscopy portfolio. Here, we also had strong momentum across Urology, ENT, and GI, delivering organic revenue growth in Q4 of 21.3%, and if we look at the full year, 18.2%. I think it is important to highlight that the growth was broad-based across these three categories, still having our aScope 4 family of cystoscopes and rhinolaryngoscopes driving most of this growth. We also in Q4 saw a good growth in our GI portfolio, but still from a lower base.
In ENT, it is very clear that the acquisition of TIMS Medical that I will come back to, that has strengthened our offering in ENT, and it has also potential to accelerate our growth in this area as we move into the next fiscal year. Very much like in respiratory, what we see in this segment as well is the playbook that we have is working. We are very much looking into new innovative solutions that will not only strengthen our competitive position, but it will also add new procedures, new patient populations to our portfolio. So stay tuned for more details on this. A few comments on our Anesthesia & Patient Monitoring portfolio. In total for the year, we delivered 0.4% growth here, and when we look at the last quarter, the growth was 2.8%. Most of this growth came from the patient monitoring business, where we grew 6.5%.
In anesthesia, we continue to be impacted by the lower volumes in some of the non-exclusive U.S. accounts that we highlighted in Q2, and where there has been no significant change since then. So we are expecting those volumes to recover gradually. Once these normalize, when we look at this segment and also with the limited investments we make into innovation, we expect that this segment should continue to grow in the tune of 3%-5%. So now it is one year ago since we launched our ZOOM AHEAD strategy, and if we look at how we have executed on this, we have actually had very good progress across all the four strategic themes of customer centricity, innovation, our business platform, and not least on our people and culture agenda.
If I have to highlight a couple of examples here, not going through everything you see on this slide, I think there are three important highlights to mention. First of all, it is the SureSight. Not only do we have a broad SureSight portfolio with its blades, but we also launched a mobile version. We are seeing very strong traction, initially very much driven by U.S. and the U.K. The second thing to highlight here is the TIMS Medical acquisition, and I am going to come back to that, but this has really established and strengthened our EndoIntelligence offering in terms of hospital integration and workflow technology, which is something where we can see we can make a true difference for our customers. The third thing I want to talk about is how we are seeing strong progress on innovation.
I will come back to talk about what we have in our portfolio as we look ahead, but just mention here that with the ureteroscopy portfolio, we recently announced the expansion of this portfolio with an important accessory in terms of an access sheath for kidney stone removal, which also helps expand our solution for these customers. I think all of this and what you see on this slide is a very strong example of how we are continuing to build momentum in line with our strategy. If I also briefly recap on some of the strategic choices that we have made across the portfolio, there is no doubt that with the ambition that we have to drive global endoscopy leadership, this starts very much from winning in respiratory and Urology.
These are also the segments where we see the highest single-use penetration right now, and it is where we have been investing most in leading that conversion. But we see the same momentum and potential also in ENT and in GI. If we look at the structural trends across all of these segments, we remain very excited about the potential. We see in single-use endoscopes becoming more and more the standard of care. This supports very much the ambition we have of leading that conversion, which we still do by far across all these segments. We also see that we have a very clear playbook of how we are driving this conversion based on one platform with our EndoIntelligence being the only ones that offer the same platform and can leverage that across all the endoscopy areas. This is paying off.
Let me bring that to life, looking a bit into our respiratory portfolio. What we have seen in respiratory is a clear acceleration. If we look at the second half of this year, we have grown in respiratory by 19%. What has been critical to and essential to this growth has really been innovation that has increased this. On the bottom here, you see the journey that we have had since we came out with our first bronchoscope back in 2009, where we were pioneers in single-use endoscopy. We have built in respiratory a very strong position, both in OR and in ICU. The market, when we look at this, is a DKK 10 billion market, and a market that is still highly under-penetrated, as only 25% of the procedures are done with a single-use endoscope.
This is, I will remind you, the segment that is the most progressed. Therefore, we also believe that there is significant runway ahead. What we see is that beyond the solutions that we have now, we are investing into new innovation that will gradually expand this, also to eventually be able to be relevant in the bronchoscopy suites as our technology and innovation advances. SureSight is another example of our strategy in action, because since its launch, this has really also been a key lever in accelerating the single-use endoscope conversion that we are currently driving. In short, I think it is an important takeaway here is that our growth is coming from converting reusable endoscopes to single-use.
How we are leading that is through innovation that will both strengthen our competitive position and also gradually expand the procedures that we can address, as well as the patient population that we can address. This is a nice segue into looking a little into our future when it comes to innovation, because actually we have a very exciting innovation pipeline. Today I want to give you a little more visibility into that, because over the next two financial years, so the next 24 months, we are going to launch new generations of endoscopes across our four main endoscopy areas. We are starting, the first one that will come is in ENT, our rhinolaryngoscopes, and then the next ones will come following that.
These are not just upgrades, these are new generations of endoscopes with a significant improvement for both the clinicians and the patients, both to support the quality in the procedure and also to support the whole portfolio. That is where our ZOOM AHEAD strategy is guiding very much our focus towards solutions, because now this goes very much beyond the endoscopes. This also touches on the accessories that we are providing, and more importantly, it touches on our EndoIntelligence, both in relation to the software that we offer that can help our hospitals be more efficient on their workflow, both before, during, and after the procedure. It helps with the documentation. Then we are also investing more into AI-enabled features that can help improve even the quality and efficiency of the procedures.
This is the big shift, and when you look at this, we are very excited about the busy agenda we will have over the next two years as we bring real innovation to our customers. A highlight on this EndoIntelligence platform that we have is our TIMS Medical acquisition. This has been an acquisition that first and foremost immediately strengthens our position in ENT, because the 7,000 installations that TIMS Medical has are very focused on ENT. There is also a very strategic importance in this acquisition, as it also helps us to expand on the documentation side into some of the other areas where we are currently present with our endoscopes. To summarize on that, when I look at our portfolio, it is broader than our endoscopes.
It is covering also accessories, software, and AI, and these workflow solutions are coming together in one complete offering for our customers. Let us just take a deeper look at TIMS Medical and what this is. We closed on 11 of September, so close to two months ago, we closed this transaction of a U.S.-based company, and we welcomed 56 new colleagues to Ambu. TIMS Medical is a U.S.-based company that is specializing in medical imaging. It is specializing in reporting and workflow solutions, and these are supporting and integrated with the hospital IT systems, which is a key benefit for us to leverage. TIMS has, for more than 20 years, helped customers and really created a very strong reputation and position across all these hospitals with its 7,000 installations. Again, I want to repeat the strategic rationale for Ambu really in this acquisition is 2x.
It is on the ENT side, where we see an immediate opportunity to get the synergies from our endoscopy offering with the TIMS Medical system. What is even more important as we look further out, it is also to continue to build on the great capabilities and experience and solutions that TIMS Medical offers as we are expanding our EndoIntelligence offering and ambition. We are both bringing established capabilities in software, but we are also bringing a great knowledge around what is the hospital IT infrastructure that we are tapping into and where we see benefits of helping our customers with a more effective workflow, which is very much tapping into one of the key trends and challenges we see in healthcare. How is it that we can manage the increasing patient throughput with fewer resources?
Let me finish before handing over to Henrik, summarizing the five elements that really underpins the strong position that we have in Ambu. First, it is very important to highlight that we are operating in a uniquely highly attractive endoscopy market. While the market of single-use endoscopes today only still represent about 4% of the total endoscopy procedures, we see a strong change and conversion from reusable to single-use endoscopes. This growth is taking place at more than 20% growth every year. It is very much driven by what we are tapping into in terms of workflow efficiency, so we can address these rising patient volume challenges. When we look at Ambu, we are the number one in single-use endoscopy player today. We have more than 60% market share globally, and we have a large and very specialized footprint across all key markets.
We have, from being the first, we have the knowledge around how is it we can help customers be more efficient with single-use Endoscopy Solutions. Thirdly, it is important to highlight the innovation and how this is core to what we are doing. We invest more in R&D than most in our field, and what we are investing in, as I alluded to earlier, is to go beyond the actual scope, but more to help with the full solution that is really creating value and differentiating us from competition, both in terms of the existing products and also the solutions that we have in development. That leads naturally to the strong innovation pipeline we have.
We are looking at more than seven new solutions, hereof four new generations of endoscopes that are coming within the next two financial years, and this is touching across our portfolio of respiratory, Urology, ENT, and GI. We believe, last but not least, that we have a very clear path to value creation. We have grown in the last three years, we have grown with double-digit pace. In the last four years, we have grown more than 15% with our Endoscopy Solutions. We are continuing to drive scalability from this growth, making sure that we can also see a gradual margin expansion, which we have shown in the recent years. This is very much then underpinned and supported by a very disciplined capital allocation. With that, I would like to conclude my presentation and hand over to Henrik to go through the financials.
Thank you, Britt, and good morning, good day to everyone on the call. First, before going deeper into the financials, I just want to share the same level of excitement as Britt for both the momentum we have coming out of a very strong Q4, but particular also the innovation pipeline and the future that lays ahead, which also I will come back to when I look at our long-term outlook. First, let me have a closer look, or let us have a closer look at revenue. As Britt already explained, we had a quarter four growth of 13.9% organically, including FX, 16% growth, the positive FX effect coming mainly from the U.S. dollar DKK appreciation during the fourth quarter.
This brings our full year growth to 10.1%, driven mainly by the very strong Endoscopy Solutions growth at 16.4%, and barely getting A&PM to a positive growth at 0.4% overall for the year. Solid and within our guidance, and particular for the fourth quarter, driven by the very strong momentum in endoscopy. If we look at the growth composition for the fourth quarter across our regions, we saw particular in North America and rest of world, a very, very strong growth, driven again in particular by very strong growth in Endoscopy Solutions. This was both for respiratory and for Urology, ENT, and GI. EMEA also had a solid growth, but at a slightly lower level. Still also seeing very solid growth, particular in Urology, ENT, and GI. A&PM also had improved growth.
We still have a lower growth in anesthesia, and in anesthesia specifically because of the volume losses on selected accounts in U.S., which is impacting the North American growth. Besides that, we see solid growth across the A&PM portfolio, and particular within patient monitoring, also solid growth across the globe. Turning into margin and starting with gross margin first. Overall, for the year, we landed more or less at a flat margin versus the same period last year, i.e. a gross margin of 60.1% for the full year and 60% for the quarter specifically. We see positive trends from the fact that our product mix is improving with higher growth in endoscopy and lower growth in A&PM. As Britt said in the opening, endoscopy now represents almost 2/3 of our total sales.
At the same time, we also see some negative effects on gross margin from the fact that we have accelerated the movement of production from Malaysia to Mexico, both to ensure we are more agile to serve our U.S. customers, but also to manage the tariff costs. This impacts our gross margin because of slightly higher COGS, but at the same time also creates more leverage in distribution costs, which lowers our OpEx ratio. Therefore, this is still on an EBIT line and net neutral move. Longer term, we are still confident in the potential to drive up gross margin from a combination of better output efficiency at our plants, continued strong pricing governance, and a continuation of higher growth in endoscopy versus A&PM. With that, let me turn to OpEx.
OpEx for the past two years has clearly been affected by tariffs. Therefore, as you will see in the graph in a second, we are both showing what was OpEx with tariff expenses and tariff refunds, but also what was OpEx without tariff expenses and without refunds. Overall, OpEx ratio for the full year 2025/2026 landed at 47%, which is an improvement of 0.2 percentage points versus the same period last year. OpEx for the fourth quarter was only 42.8%, but also massively impacted by the tariff refund that we communicated earlier in the year of DKK 85 million. That is a net income reported as part of OpEx in Q4. Overall, OpEx still sees a positive trend, and we continue to see how our operating leverage is improving across the year, across our business.
For Q4 specifically, next to tariff, we also, and Q3 as well, we also had some impact from the TIMS acquisition. As Britt mentioned, we closed it on 11th September, but already in Q3, we reported some transaction costs, and there were additional transaction costs and integration costs in Q4 specifically. Overall, adjusting for this, both for the tariff cost and refunds, as well as some of our one-offs related to TIMS, we still see a very, very nice operating leverage, which is something that also makes us confident in the journey ahead, and why we still believe there is a lot of operating leverage we can still drive to deliver on our long-term targets. Let me round off on margin by having a closer look at the EBIT margin for Q4 specifically.
As said, it was a significant pickup in EBIT margin for Q4, landing an EBIT margin of 17.2%, of which the vast majority of the uptick versus the same Q4 last year was driven by better OpEx ratio, i.e., OpEx to revenue. That OpEx included the tariff refunds I referred to before, i.e., DKK 85 million, corresponding to a 5% EBIT margin impact. At the same time, it also included tariff costs of around DKK 20 million, i.e., 1 percentage point impact. Overall, we feel a good result, and considering that this also carried some extra costs related to the TIMS acquisition, a result that also proves that we continue to be able to scale our business. With that, let me turn to cash flow.
Cash flow also continues to be a focus area of ours, and we continue to drive a strong operating cash flow across the business. For Q4 specifically, we landed at a free cash flow of DKK 216 million, driving our full year free cash flow or leaving our full year free cash flow to DKK 487 million. This also means that we landed the full year at a cash conversion rate of 39%, very close to how we guided from the start of the year, i.e., around 40%. Next to this, we also, of course, have an impact on cash flow from the acquisition of TIMS, specifically in Q4. That impacted our cash flow with around DKK 189 million, bringing the free cash flow after acquisitions still to a plus of almost DKK 300 million. Very solid and means that our balance sheet position continues to be very, very strong.
With a strong balance sheet position, we've also decided to, one, propose a dividend for approval at the AGM for the next year of DKK 151 million, corresponding to DKK 0.56 per share. Next to that, also launch another share buyback program of DKK 400 million in total that will start at the beginning of next year and run for the consecutive six months. Dividend, of course, is still subject to the final approval at the annual general meeting at the 2nd of December. Next to this, we are also proposing at the annual general meeting cancellation of a selection of treasury shares, which will again be a testament to how when we run the share buyback programs and hold a higher share of treasury shares, we will also cancel them if we don't see a need on the longer term.
With all of this, and even with the acquisition of TIMS, we still therefore overall maintain a very, very strong balance sheet and a much lower net interest-bearing debt than our internal target of up to 2.5%, leaving a lot of room for further investments for the future. We will continue to revisit this and review this on an annual basis and continue to actively look at how we best manage our balance sheet. This brings me to the guidance for 2026/2027. Britt has already touched upon a couple of the key elements of the guidance, but let me expand a few more notes on how we see this develop, both for the full year, but also across the year. Starting with top line, we are guiding for a 9.5%-11.5% organic growth for the full year. For Endoscopy Solutions specifically, we are guiding for around 15% growth.
Respiratory continuing the strong momentum that we saw throughout the full year last year, landing at a 14.6% growth for the full year, moderating around that level for the next year, i.e., into 2026/2027. Urology, ENT, and GI, we also still see strong growth, but at a slightly lower level, bringing the total Endoscopy Solutions to an overall around 15% organic growth. A&PM, we expect low single-digit growth. This growth will likely be higher at the last part of the year because we, again, for the first quarter, will have higher comparables, and therefore for Q2, Q3, and Q4, we are expecting A&PM to normalize and be back closer to the longer-term ambition of 3%-5%. On the EBIT margin, we are guiding for a 13%-15% EBIT margin reported. This obviously is driven by continued operating leverage on OpEx mainly. OpEx will be offset by growth investments.
We are investing significantly in preparing for the product launches that Britt referred to earlier, but also still investing in ensuring we can deliver on the synergies and the potential from the TIMS acquisitions. Tariff costs will still impact us in the next financial year with around a - 1 percentage point effect, which is in alignment with what we've been communicating for the last two, three quarters. We're continuing to work on how we can minimize the tariff impact longer term, but for the full year, you should still continue to expect a 1 percentage point negative impact, more or less across the year. Last but not least, this EBIT margin guidance does not include any tariff refunds. We're still working on additional tariff refunds and have previously communicated up to around DKK 70 million potential further refunds.
At this moment, we are still working on seeing if we can collect more and targeting to try to at least collect half of that, but we have not included that in the guidance given uncertainty on timing and still also given the uncertainty around the process. Last but not least, on cash conversion, we are guiding for around 30% cash conversion for the full year. Operating cash flow will be strong and continue to be strong. This is mainly driven by increased CapEx investments, mainly CapEx investments to prepare for the upcoming launches in both the manufacturing capabilities, but also in innovation and R&D to ensure that we successfully can launch the four next generations that Britt referred to earlier. With the outlook for 2026/2027, we've also had a closer look at the outlook for 2029/2030, the outlook that we presented at our Capital Markets Day last year.
Overall, for the ZOOM AHEAD period, we maintain our targets for 2029/2030, meaning we're still targeting an overall CAGR growth across the period of 11%-13%, still targeting an Endoscopy Solutions growth of 15%-20%, and Anesthesia & Patient Monitoring of 3%-5%. Obviously, with a year behind us where we just landed just above 10% at 10.1%, and now guiding 9.5%-11.5%, we are expecting a growth acceleration to the latter part of our ZOOM AHEAD period, one driven by the new product launches that Britt referred to earlier across all of our four main endoscopy areas, but also with a growing share of endoscopy business out of the total business for Ambu.
On the EBIT margin, we are updating our view, maintaining the 2029/2030 view of 20% EBIT margin or more, but now replacing our midterm EBIT guidance of around 20% with instead a guidance of EBIT will be growing faster than revenue for every year across the ZOOM AHEAD period. This is driven by a combination of our ambition to continue to invest in the business and several opportunities with innovation that I'll come back to in a second. Last but not least, we also maintain our view on the cash conversion guidance of around or above 40% cash conversion across the period. First year, we are more or less on target. For the next year, we'll be a bit below with higher CapEx investments for the product launches, but we also expect this to pick up across the period and therefore still maintain our long-term cash conversion target.
Let's have a closer look at the EBIT margin improvement and expansion journey towards the 20% or above for 2029/2030. For the past year, we now landed at 13.2%. For 2024/2025, we were at 13% exactly. For next year, we are now guiding 13%-15% EBIT margin. That still leaves a significant improvement in EBIT margin across the period that we feel comfortable about, of which we see 80% coming from OpEx ratio and 20% coming from gross margin.
This is a change from what we communicated at the Capital Markets Day, where we saw a slightly higher degree of the uptick coming from gross margin, and this is mainly driven from our ability to transfer manufacturing faster from Malaysia to Mexico, which impacts our COGS, but at the same time creates a higher level of operating leverage on our OpEx, as distribution costs are reported as part of our OpEx. With the guidance, as I mentioned before, of EBIT growing higher than revenue every year, which is also part of our guidance for 2026/2027, we are of course also implicitly saying that you will need to see around 190 basis points improvement on average across every year.
With this guidance, we are also therefore indicating that more of that uptick will come a little later in the ZOOM AHEAD period as a result of the impact that we are expecting from our strong innovation pipeline, and specifically for the new four generations of endoscopes. The core drivers of the OpEx improvement remains the same, and of which the two main ones are administration cost as a percentage of revenue going down, and particularly the distribution cost going down as a result of the move from Malaysia to Mexico. So with that, we remain confident on our long-term targets in connection with ZOOM AHEAD towards 2029/2030. We remain very confident with the momentum that we bring from the past financial year into next year, and therefore also look very much forward to communicate how we progress across the coming financial year.
With that, I end my presentation, and I will hand it over to the operator for Q&A.
Ladies and gentlemen, 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 press star and then two. Questioners on the phone are requested to disable the loudspeaker mode while asking a question. Anyone with a question may press star one at this time. Our first question comes from Thyra Lee, UBS. Please go ahead.
Hi. Morning both, and thank you for the questions. I just have two, please. First, if we take a step back, you've guided for a second year of below the midterm revenue guidance, as you just mentioned. As you think about getting back towards that range driven by those launches in the next two years, what kind of ramp profile are you assuming? I guess our fear would be that some launches could look like ureteroscopy, and the hope is for the launches to look more like SureSight. So it would be helpful if you could speak through your expectations. Secondly, for Henrik, we've needed to account for multiple items in the cost lines this year, so integration costs for TIMS, you've had investments in the U.S. commercial sales force.
Now, with gross margin expected to be flat, can you give a little bit more on how you expect the specific SG&A lines to evolve, and some extra details on what planned investments are actually going towards in the year? Then just briefly, what are you seeing on inflation, and what's baked into guidance there? Thanks very much.
Thanks a lot there for the questions, and let me take the first, and then I'll hand over to you, Henrik. So, great question on how we see the ramp-up, and it's very clear as we look into the pipeline and the launches. I mean, it's an undertaking that we are preparing well for already now, as we have a launch of a new generation in all the categories. I think what's important to highlight here is that we do expect the same pattern largely as we have seen with our other launches, in that we don't expect to have an immediate hockey stick effect when we launch a product, but we do see a gradual conversion.
However, also because we are expanding not only the competitive position within the existing procedures, but that we are also opening up with some of the launches for new patient populations, we will expect, I mean, some acceleration, but again, we don't— I mean, we are not modeling or predicting a strong out of the gate, but more a gradual uptake as we have learned that the customers first bring in the products, try them for a few patients before the broader ramp-up. So that's also how we have modeled, you can say, and how we predict the upcoming launches across the categories to happen. Then we will obviously have multiple new solutions out there that will be managed by different people in the organization.
Yeah. So, thank you, Britt. Following up on your question on the margin expansion profile for the year ahead. As you correctly say, we are guiding towards a more flat development in gross margin, and therefore the EBIT margin expansion will more be coming from the OpEx ratio. We will still be investing in the commercial organization and obviously also in the integration of TIMS, of which much of that will be in the selling and distribution line. There will be a leverage factor on our distribution costs, as I've talked about now, with a much higher share of our production into the U.S. market coming out of Mexico. But the biggest lever on the EBIT margin expansion will be on the administration relative to revenue line, where we are expecting to scale significantly across the coming year.
Super. Thanks for that.
Thank you.
The next question comes from Anchal Verma, JPMorgan. Please go ahead.
Hi. Good morning, Britt and Henrik. I have two questions, please. The first one is just a bit more on your sales guidance for this year, the FY 2027 that you have published, particularly for endoscopy. If we break that down, within respiratory, you delivered a very strong year this year, helped by launches. What growth trajectory are we assuming for next year? Henrik briefly touched upon this in the assumptions, but just trying to understand, is it fair to assume that respiratory can grow double- digits in FY 2027 despite tough comps? Within Urology, ENT, and GI, could you just unpack the 21% Q4 growth, including what the different end markets contributed, and then how should we be thinking of the run rate for that business for next year?
Within Urology, could you please give us an update on the competitive dynamics and whether you expect any competitive pressures to persist? The second question is just regarding the reported Olympus FDA warning letters and related supply disruption. Have you seen any increased customer interest in Ambu's products or any customer switching?
Yeah. I think, thank you for those questions. Let me start, and then Henrik can supplement. Maybe starting with number two. I mean, obviously you can say, I mean, there are high-level dynamics when you see some of your competitors having challenges. I will say, though, I mean, we do see a strong momentum continuing from reusable to single-use, those conversions. It is not that, I mean, we in the last weeks have seen that go up, but in general, I think you can always say that part of the reason for the strong momentum may be that, I mean, there is a clear link that we have products and solutions available. But there is not like a very clear effect that we start to see. Again, the recent warning letter that was issued was also happening just a few weeks ago.
It would be a little early. Trying to unpack your first question, and I think some great questions, and obviously we can probably not give you as much detail as you would like, Anchal, but let me talk about respiratory first. There's no doubt that the acceleration that we have seen in respiratory is going to continue. By that, I don't mean that 21% growth is the new quarterly growth number that you will look at. But there's no doubt that the momentum we see with the combination of SureSight to the aScope 4 and aScope 5 bronchoscopes, we expect that to continue in the double-digit territory. That is also later going to be fueled when we launch the new generation. Also, we are continuing to add to the portfolio.
I should also say, most recent, having the pediatric indication for our aScope 5 solution. There is like, and that is back to the playbook that I talked about, there is like a growing solution that gradually adds more patients and more procedures that can be used with our solutions. That is the convincing argument from many of the customers and why they choose to switch either some of their procedures, and in more and more cases, all of their procedures when they can see that now they can do everything with our portfolio. That is really the strategy that we are ultimately pursuing by bringing new innovation to market gradually. Commenting on your other segment, and maybe I should talk about Urology that we have talked quite a bit about and the dynamics that we see there.
Basically, I mean, we are continuing to see a very strong drive with our cystoscope increasing, and we see very high volume growth. Then we, as we talked about in the last quarter, we do sometimes face some price concession where we decide to offer a lower price, still at a premium, I mean, to some of the low-cost players that are out there, but in order to keep the significant volume. This we do very strategic, and we have great transparency into some of the dynamics in the market and some of our big customers. At the same time, we are also looking at how we can use our portfolio in some of the different segments that we have, where there are also some segments with lower volumes that we are playing in.
Overall, you can say, I think the growth that you see is very much driven by strong volume growth and then with a little bit of price concession. We expect, I mean, these dynamics are not going to continue forever. We expect some of the same dynamics still playing into the next fiscal year. This is again back to our playbook and our model, where we then will come out with new innovation. We have a next-generation cystoscope available that will offer significant benefits to the customers relative to our solution now. We have more to play with. The same, you can say, when we then look at with our ureteroscope, it's also very clear that here we entered, as we have talked about, a market that was slightly more competitive than, I mean, it looked a few years ago.
Here, therefore, we are also seeing our market share increase growing slightly less than we thought, but still we see a nice growth in our market share in ureteroscopy. The addition of our access sheath is going to help. Then we also have exciting next generation, a new generation of a ureteroscope in development that is really also going to strengthen our offering in this segment where, as you know, kidney stone removal is also a little bit more of a complex procedure where our first generation of ureteroscope works well, but we have learned and see some added benefits that we can offer in a next generation.
I am not going to give you more specific numbers, but that is how we look at it, and that is also where we see gradually the new innovation will help strengthen our competitive position and also unlock new procedures and new patient populations.
Perhaps I can supplement very briefly for the coming financial year. I think in addition to what Britt said, I think you should take into consideration two specific things. So one, we talked a lot about EndoIntelligence, and we talked specifically about EMR integration. We are starting to see even further nice pickup on the appetite from customers for EMR integration, and that is a very sticky point for customers. So once we are integrated, they stay with Ambu. It does not mean that we do not need to have a commercial discussion on price, but it is very much a sticky point that makes us much more competitive. So that is one we continue to have focus on to still drive the further penetration in Urology and cystoscopy specifically.
I think the only other point I would point to, as Britt correctly said, also in the review of the ZOOM AHEAD strategy, we have always looked at ENT as an opportunity. We still do. Clearly now also with the TIMS acquisition, we see more potential also at the shorter term in ENT, both because they have a very strong customer base in U.S., but also because the solution that TIMS offer supplements our solution very well, and enables us to look at procedure landscapes in a different way within the ENT space than we have in the past. So, those two combinations also means that we feel we have a lot of interesting prospect also within ENT, more than what we believed previously.
Perfect. That is very clear. Thanks, both.
Thank you.
The next question comes from Tobias Berg Nissen, Danske Bank. Please go ahead.
Hey, Britt and Henrik. Just have a follow-up on that Urology growth here in Q4, just to fully understand if there is anyone that stands out in the quarter because it was very strong. Also, just with the implied guidance here for next year with the continuation of the respiratory growth, and that also implies at least a step down for the Q4 growth for Urology. Just want some clarity on that, but also how you see this segment longer term. You are pretty clear in the communication with the product launches, some ENT scope next year, as I read it, and then you will add more Urology launches later years. How should we expect this uptake? Britt, you mentioned it gradual, but could it accelerate faster if these are more, I will not call it line extension, but incremental improvements both in cystoscope and uretero?
But also just on the uretero here, your lens license, the access sheath, and you also got the grasper for the cystoscope. So, what are your M&A appetite within Urology, and what assets would you actually want to be looking at? Then there was a lot of questions, and I have just one for Henrik on the cash conversion here for this year of 30%.
Somewhat below the long-term target. When I look at net capitalizations, they have been moving up in the last few quarters, and it is getting a not insignificant tailwind to the margins. So I am just wondering, obviously some related to the product development and product launches for next year, but what is the longer term outlook for this, and will most of these investments be done next year in 2027, or should it continue from here? I know you still have the long-term guide. Perhaps just like to make it very clear what you are doing. Is this R&D, mainly R&D costs that impacts the cash flow as you capitalize modules? Thanks.
Good long questions.
Yeah.
Should we start with Urology—
Yeah.
—and ENT and GI? Do you want to start?
I can start. I can start on this one. Thanks, Tobias, for good questions. On Urology, what you see across all our businesses is that we have some quarterly fluctuations, which is really just underlining the overall demand among customers. We are really trying to make sure that we can also drive a solid service of our customers. That is also where you do see some fluctuations quarter-over-quarter, which is why what we are looking at is the rolling 12 months, because that gives a good picture of the trend, and that is where we see good clear quarter-over-quarter growth that we very much expect to continue.
Going back to the stronger Q4 growth, in general, we had strong momentum across the business in the quarter, and sometimes it does not take that much in our business, a few big customers ordering that to change a couple of percentages in the growth. But we do believe we carry a good strong momentum into next year, but that we are not looking at necessarily this level to be the Q4 level to be the level that we expect going forward. What I think is important to say is because this segment, and if we look in Urology in general, I think the competitive dynamics have changed a lot compared to where we were two, three years ago. That is, of course, something that we have been very focused on.
What is the positioning of our solutions in this market? Which is also where getting closer to the customers, really understanding how we can make a difference. We see very clear opportunities in terms of understanding how is it that the full solution will play. We still see strong benefits of having one platform, one software platform that cuts across all our scopes. Then combined with our EndoIntelligence, where we are gradually expanding some of the features. Henrik mentioned the connectivity, which is something that we have really started to roll out last year, where we see once we help the customers with easily, it is uploading the pictures, for example, or the videos from the procedure onto the patient file.
This is something that is very meaningful and that is also creating an even, not only a stronger customer loyalty, but actually also we see among a number of our customers that this is also accelerating how many procedures where they use our solutions. We really see very different dynamics across our customers where the curve from starting to use a cystoscope, as an example, to fully having 100% of their procedures done with a cystoscope varies a lot. For some, I mean, they move to that 100% very fast. Others, they will move to 10%, 20%, 50%, and then they will stay there for longer.
This is really where we are learning a lot around the dynamics of the different customers, the different customer types, the importance of how we serve our customers, which is why we talked earlier about how we are setting ourself up differently from a commercial standpoint in the U.S. to better cater for how our customers operate. I think all of these things is really making us very confident when we look ahead because we do have a better and better understanding of what is it that our customers are looking for, how can we help them. Then bringing our new innovation in, I think that is also what makes us very confident that we are by far leading with having the most advanced procedure, or the most advanced solution, sorry. That's how we serve the customers.
The other benefit we get from having that portfolio is that we also have a larger portfolio to play with. We have, I mean, we can differentiate more across, so when we bring our new solutions out, we will have, I mean, our aScope 4 solutions that are still doing the job very well that we can then use in other segments in the market. I think really our focus is, as I talked about, to not only be more competitive in our existing markets, but also gradually expanding the patient population, the procedures that we reach, and then increasing basically, you can say, the value per procedure by also adding both accessories and also the EndoIntelligence. I think that's where everything is coming together and why we are quite confident as we look further out in the future.
Yeah. So, perhaps building on Britt's last few notes on the revenue, then I'll turn to your question on R&D investments and CapEx, Tobias. I think on the latter part of investing in innovation, I think the key point we want to make here is we have a lot of solutions coming to the market. The overall main driver of our growth remains to be the conversion from reusable to single use. I think what we are very excited about, and one note you asked in your question was how much is it line extensions and new next generations. I think it's important for us to say it is a next generation of endoscopes that are coming.
Therefore, we are also, as Britt is alluding to now, targeting to expand the reach and relevance of those scopes in terms of what procedures we can cover in the market going forward. On growth, the last thing I will just remind you is in terms of when we talk about the growth momentum, as you very well know, the percentage growth also depends on the comparable base for the year before. Q4 in the 2024/2025 financial year, i.e., the comparable base for the quarter we just closed, was the lowest quarter in that financial year. Therefore, I also just want to remind us all to look at that, because that gives a little bit of a distorted picture in terms of what is the growth momentum in percentage terms when we look at our quarter now.
Therefore, I think to rather frame the growth for the coming year, we are more expecting consecutive quarter-on-quarter increase in our total revenue, which is actually what we've seen in this year now with a very strong Q4, but still also with a consecutive quarter-by-quarter growth. That's also what we're expecting into next year with Q2 higher than Q1, onwards Q3 higher than Q2. If we look at CapEx, to get to that question, you are right, our capitalization rate has gone up. I think the one caveat I would say, as we also note in our both interim and annual report, we've also done a selection of one-off amortizations because we ongoing review the pipeline and the level of capitalization and amortization.
So we test that to see that we are comfortable with the level, and therefore actually here in Q4, our EBIT number is also slightly impacted by that. We had a few projects in our pipeline where we decided to say these should not be capitalized. Longer term, both for the financial year we are now, 2026/2027, but also into 2027/2028, we are still increasing our investments in these product launches. Simply, in terms of capitalization of those, when you are getting closer to a launch, you capitalize a higher proportion of your R&D, related R&D costs, and that is driving the higher capitalization rate. So you should still see a higher capitalization rate in 2026/2027, and also for 2027/2028, a higher than normal. But then after the product launches, that capitalization rate will go down, and that simply just follows the maturity of the innovation pipeline.
This is more reflection of the maturity than anything else. Besides that, what is also impacting our cash conversion, as you correctly asked, so beyond the R&D investments, is also that there are new product introduction investments, related investments in operations. Also, as part of these product introductions, we're also investing even more in our manufacturing setup in automation, both in assembly, but in particular also in quality control. So that's also why you're seeing a lower cash conversion on the short term.
Great, thanks. That was very clear.
Thank you, Tobias.
The next question comes from Martin Brenøe, Nordea. Please go ahead.
Hi, Britt and Henrik. Thank you for taking my questions. It has been a busy year. Can you maybe just provide a little bit of some figures for us in terms of how much money have you spent on moving around your production site in the previous year, and how much of that is structural versus one-offs? I guess that has been a bit expensive to get your tariffs down and then move the production partly to Mexico. So that is number one on the margin side.
Just on OpEx, interested to understand how much. I know that you do not put it into special items, but if I am giving you a bit of benefit of the doubt, how much should I put into special items in terms of integration costs, transaction costs, and other SG&A costs that you have here, including the ramp-up that it seems that you have already started in TIMS this quarter on the selling and distribution? That would be my first two questions, please.
Thank you, Martin. Let me start with the latter, and then I can come back to the transfers. On TIMS, we do not report transaction costs nor integration costs as special items. We have had that discussion also before, and it is mainly because we do not want to make a big fuss, you could say, out of separating them specifically from our reported business. That said, we are specifically in our business combination note in the annual report specifying transaction costs of DKK 16 million in total. We were indicating in Q3 that we had close to DKK 10 million of costs related to strategic projects. That means, of course, DKK 6 million on top of that landed in Q4. In addition to that, we are seeing DKK 5 million-DKK 10 million related to integration costs also in Q4.
Adjusting for the combination, of course, across the last two quarters, there is DKK 20 million-DKK 25 million related to TIMS. We feel considering the potential that it offers and the size of the deduction, that is a relatively normal level, but that is reported vast majority as part of our SG&A in OpEx. If you go back to the first question on transfer from Malaysia to Mexico, there are certain one-off costs, you say again, but say transfer-related costs in connection with the transfer initially while you are training the new production line, i.e., the people working at the production line, obviously also investing in calibration of the equipment. But I would not call it out as a big item for the year. We have been very focused on accelerating it, obviously given the tariff implication. But there obviously there has been some costs related to this.
I am not going to specify exactly how much, but there has been some cost, and obviously that is also one of the reasons why you are not seeing an expansion on the gross margin for the year that just passed, 2025/2026.
That is very clear. I will jump back in the queue. Thanks.
Thank you, Martin.
The next question comes from Delphine Le Louët, Bernstein. Please go ahead.
Hello. Hi. Good morning, both. I just want to follow up regarding both the gross margin and the CapEx cycle. Regarding the gross margin, can we get a bit of a flavor when it comes to the Mexico ramp-up, where we are exactly into the transfer, and what is the plan? When I think about the plan, it is also about thinking about the breakout in the future in between U.S., North American sales, and European sales, because with the TIMS acquisition, you have now a bias that is definitely increasing into the U.S.
Secondly, regarding the CapEx, also for us to get a better view and a better way of forecasting the CapEx cycle, can you tell us or make us a sort of a breakdown in between what is currently allocating to the, let's say, regular product launch, to the product innovation, and to the, let's say, as a whole, the organization, so that we can think about a trajectory in the next couple of years? Thank you very much.
Thank you, Delphine. I can take the questions, I guess. If we start, just you asked about the mix between U.S. sales and Europe sales as your second question. I think obviously the TIMS acquisition weighs us more on U.S., clearly. That said, we still see a potential going forward for also expanding the reach of the solutions of TIMS outside U.S., but at the short term, it will weigh our sales more towards U.S. relative to Europe and rest of world. On the gross margin, we are not, again, today specifying specifically how much of the capacity in Mexico we are utilizing at the moment beyond what we repeated before, i.e., we are now above 50% utilization of the factory. That both says we have ramped up quite a bit compared to the Capital Markets Day where our colleague Graziela presented the plans.
At the same time, it also reemphasizes that there is a lot of capacity left in Mexico still, even with the level of transfers we have done. Therefore, for us, the past financial year, clearly we have seen an acceleration of how we have done this ramp-up. In the next many financial years, we will continue to see a transfer or relative, you could say, split of higher level of the manufacturing coming out of Mexico. Our Penang site remains the site where we will do the first new product launches, and therefore also when we are introducing the next-gen products, that is where we will start, but we will quite soon afterwards move it to Mexico for the relevant products for the U.S. market. On the CapEx cycle, happy to also go in a little bit more detail with you on perhaps a separate session.
But I think the two things I will just highlight is that obviously out of the more than DKK 500 million we invest in innovation, more than 10% of our endoscopy revenue goes into innovation. A lot of this is related to innovation products, projects, sorry. That is on the solution space overall, so both endoscopes, EndoIntelligence, software, et cetera. I think the main thing, therefore, I would secondly say is that the capitalization rate goes up the more mature that innovation pipeline becomes. I.e., in the early stage of the innovation projects, you capitalize much less or nothing, and then once you have the product defined and closer to an actual approval, you capitalize a lot more.
Instead of saying what is the allocation at a specific point, I think the more important point at this moment is when we are closer to bigger product launches, like we are now with four next-gen endoscope launches, approvals, and then launches coming in the next two financial years, that does increase your capitalization rate. And that is exactly also what you are seeing in the numbers and why we are guiding for a lower cash conversion.
Okay, very clear. Thank you very much.
Thank you, Delphine.
As a reminder, if you wish to register for a question, please press star followed by one. The next question comes from Yiwei Zhou, SEB. Please go ahead.
Hi, [Priya] and Henrik. Thank you for taking my question. Three questions, do one at a time. Firstly, when looking at the strong growth in this quarter, can you confirm that there was no sort of large orders facing between the quarters? On same topic, now we are close to the flu season, what is your expectation on this topic? If you could also maybe talk about your expectation for the quarterly growth during 2026/2027. Last year was a bit back-end loaded, or was quite back-end loaded. Just looking at the comparison, recent base, should we expect a forward-leaning year? If you can also add the phasing of your growth investments and also the EBIT margin through 2026/2027.
Yeah, thank you.
It was a long question, but—
No, very good, Yiwei. I'll start with some of the revenue and then I'll hand over to Henrik. I think overall, I mean, your first question on Q4, there was nothing abnormal or no big orders or no bigger push in Q4 numbers. I think there was a general strong demand, and then also you could say as our team were closing the year, I think they were running fast for a strong year closing, where we have very good control on the pricing and how we run the business. I think that just to be very clear on that, there was no stock building of any sort in relation to these numbers. Then on your second question on flu levels, we do follow the flu season and how that is taking up very closely starting now.
It hasn't really taken off severely yet in the U.S. in particular, where we have the best data. I also do want to say that the whole tracking of the flu season, and I think that's an important point, that is becoming less and less important for our total growth. Not only that everything outside bronchoscopy has no relation to flu season, but even how our bronchoscopes are used, it's also getting used more and more for other purposes than flu season. Just a way to think about it. Of course, we do see an impact, but it's not as significant on the overall portfolio as we have seen in the past. Then maybe a few comments, and then Henrik can supplement that on the phasing for the next year.
If we start with the strong Q4 that we just exited, that definitely means that when we get to Q4 next year, we will have a strong comparable. You should not expect the same growth towards Q4 as you saw this year when you look at the percentages. Then I will also say, if we then look at Q1, you should also not expect as strong a Q1 as when we look at Q2 and Q3. One of the reasons being that when we look at is high comparable, but in particular when we look at the anesthesia portfolio, I want to remind on that part, we still have some of the Q2 volume declines that we have as a comparable in Q1.
Overall, you could say it's going to be, as we look at our business, the mid of the year, Q2, Q3, where we expect to be the strongest when it comes to revenue growth.
Exactly. Therefore, really in essence, it's about comparables this year. The rest is more consecutive growth compared to where we are today, where you can say overall. Within respiratory also, therefore, still building momentum further on the SureSight launch and the further bronchoscopy penetration. Last but not least, on EBIT, we're not giving very specific guidance on the split across the year. The only thing I will just say overall is, unlike the year we just exited, where there was a very big effect from tariff cost first half versus second half, we're expecting this to be more stable across the year, of course, under the assumption that the tariff regime remains unchanged.
That is the one thing I will say. The only last thing I will say, as I also commented in the outlook, this outlook does not include any tariff refunds. In the case of any tariff refunds, that would be an upside relative to what we have communicated now. We expect that upside to likely be in the magnitude of a 0.5 percentage point. Not sure exactly when that could materialize, and the process around that is still unclear enough for us to not have included it in the guidance.
The phasing of growth investments?
The growth investments impacting EBIT, therefore, also are not going to be specifically to one quarter or the other. They are building across the year, so therefore, again, EBIT margin, you will not see specific impact of growth investments in any specific quarters across the year.
Clear. Next question on gross margin. Can you please quantify a bit on how big the impact was due to the price concession on the system? In your guidance for next year, have you assumed any cost inflation? We see shipping costs, transportation costs, and also, other sort of costs are increasing.
Yeah. First of all, we don't separate out impact from the price increases. I think what we will say is, like Britt also said earlier, we have in specific cases done strategic repricing, and that's something we, of course, will still see some effect of into next year, as some of that was done during the year. We're not going to call out specifically what that was. Overall, I will still say, as endoscopy is growing higher than Anesthesia & Patient Monitoring, that is a net positive effect on our gross margin, as endoscopy, despite the situation we right now face in terms of competition and reality, is a much higher gross margin business than our A&PM business.
In terms of inflation, I think we, like we stated in our outlook in the annual report and the interim report, are using the current inflation estimates in the market, that be it for both oil prices, indirectly shipping prices, currency, et cetera. I think the two things I would say is, one, we have relative now good scale and distribution cost and our setup, and therefore, shipping cost is not something that we're expecting us to be, or we will be impacted by massively. We also have a good share of that locked in already on contracts. On inflation on raw materials, I think, like we've also discussed before, our main business within endoscopy is less affected by the potential increase in plastic resin that you see. At this moment, we're also not seeing a massive increase in prices across the components for the endoscopes.
It's something we're watching very carefully, and therefore, in this guidance, we are more assuming a continuation of what we've seen in terms of inflation for the last two, three months, and then basing on the latest inflation forecast that we see from the market.
Okay, that was clear. Last question on the TIMS acquisition. Could you comment on the integration and also the commercial plan for TIMS? How would you harvest the synergies between TIMS and ENT, and maybe also other endoscopy products?
Yeah, I can take that. Good question, Yiwei. We closed the acquisition less than two months ago, and we have already, from basically two days after, started to engage. This is very U.S.-focused, as TIMS is very much a U.S. revenue business that we have started to integrate and connect the two different sales organizations. We are continuing to do that. We still operate as two separate entities, but we see a lot of opportunities, both with existing customers that have both solutions, but even more some of the 7,000 installations that TIMS Medical have, we see great opportunities to leverage that with our scopes.
When we then look at how we are expanding into other procedures, I think the forming of our future innovation roadmap is actually coming along very nicely, where we're looking at both very short-term immediate opportunities, as I alluded to before, that is very much around what is it we do to strengthen ENT, but also some of the other areas where the solution is basically almost plug and play when it comes to that. There are still some tweaks that we would like to make. We're also starting to look at how we build on the more longer-term opportunities across the other areas. I think we remain very excited about the synergies, both in the field and also in R&D.
Maybe lastly, I would say on the business model, and I think that's also an important point here, that the business model that TIMS have, selling, they do have a box, but they're basically selling very strong software solutions where they have a different and more advanced model, revenue model than what we have had. I think there's also a lot of learnings, both in that revenue model and how we can apply that, and then secondly, also in how they serve their customers around that. I think that's really also what we saw in the process leading up to the acquisition, that there's a very good synergies, but clearly also elements that will advance our position today with what we have in the old Ambu portfolio. This is very much how we are approaching it.
I think we see a lot of great talent and competencies with TIMS that we are starting to collaborate, and then we take this stepwise, so we make sure that we also generate value from this in the right way.
Just very briefly summarizing, therefore, we believe firmly that TIMS will be accretive for our growth journey, because we can realize those synergies and also bringing the TIMS solution into a broader global market that they were not able to do before. Very excited, even though we are only two months in.
Great. Thank you Henrik. I will jump b ack to the queue.
Thank you, Yiwei.
Thanks.
Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to CEO Britt Meelby Jensen for any closing remarks.
Thank you very much. I just do want to say thank you for listening in today, watching, and thanks for great questions. I think this concludes for Ambu what we see as a very strong year, but I think what excites us very much is the significant opportunities ahead when it comes to serving our customers with new innovation and with the great portfolio that we already have. W e are ready and in full gear for another exciting year. Thank you for listening, and have a good day.