Good evening. I'm Lars Rasmussen, CEO of Coloplast, and I'm joined by our CFO, Anders Lønning-Schougaard, and our investor relations team. Earlier today, it was announced that we have increased our provision for the mesh litigation by DKK 3 billion. In addition to last year's provision of DKK 1.5 billion, for which we received DKK 500 million in insurance coverage, the total current expected cost of the mesh litigation before tax is DKK 4.5 billion. I would like to describe the circumstances leading up to today's announcement. Over the last couple of months, and in particular, last week, there has been a shift in the landscape of the mesh litigation. We have seen a number of plaintiff wins, and the total number of claims against the industry is still increasing.
Furthermore, other defendants who have not traditionally settled cases have started to settle. On Monday, September 14th, Judge Joseph Goodwin, who presides over the multidistrict litigation, issued an order requiring Coloplast and the plaintiffs to engage in discovery on 200 cases. As such, discovery has not occurred before this order, cost in connection with the mesh litigation will increase. There has been no change in Coloplast's ongoing program to resolve verified claims where appropriate. At the status meeting with our U.S. lawyers today, all of the aforementioned factors were analyzed and discussed, and it was concluded that we need to increase the mesh provision by DKK 3 billion. In May last year, we had made a provision of DKK 1.5 billion, and received DKK 500 million in insurance coverage.
Including today's DKK 3 billion provision, our current best estimate of the total cost of the mesh litigation is DKK 4.5 billion. The total cost includes legal advisory costs. At this point in time, Coloplast continues to settle verified claims and actively participate in negotiations. Given the confidential nature of settlement negotiations, going forward, the company will not discuss the current number of claims against Coloplast. Due to the increased provision, the expected EBIT margin for 2014, 2015 is lowered from around 32% at constant exchange rates, and in Danish kroner to around 10% at constant exchange rates and around 11% in Danish kroner. The effective tax rate for 2014, 2015 is expected to be around 28% compared to the previous expectation of around 24%.
Coloplast's dividend policy of paying out all excess cash is unaffected by the change in provision. The free cash flow impact of the mesh litigation is to be viewed as extraordinary, and therefore, we expect to neutralize the cash impact through borrowing. At this point in time, we would like to open up for questions.
Thank you. If you wish to ask a question on the phone lines, please press star one on your telephone keypad and wait for your name to be announced. If you wish to cancel your request, please press the hash key. Once again, that's star one if you wish to ask a question. Your first question today comes from Søren Holm. Please go ahead.
Yes, hello, Søren, from Nordea, with a couple of questions. Could you maybe explain a bit the impact from preparing these court cases? Are you now going to court, and is that opening up for also you receiving punitive damages, as we have seen with some of your competitors? How much of the provision includes a potential loss from this?
Mm-hmm.
Secondly, on the dividend policy, is it correctly understood that the future cash outflow from this is going to not going to affect the future dividend payout and share buybacks? Finally, more strategically on the mesh market, we have seen there's some consolidation going on here. How do you see yourself participating as a buyer or a seller with maybe two of the market leaders losing focus?
Let me start with the first and the last question you have, and then I'll refer the middle one to Anders. It's. Now, we have to create our own opinion why the judge is giving us an order to start preparing for discovery. Up until now we have settled almost 4,500 cases, and we think that the judge is trying to put pressure on both us and the litigators in order to speed up the pace of settling. That's what we think.
If that means that we'll end up in having full-blown court cases and so on, is still to be seen. Therefore, what we could do when we got this order was to say, "Okay, this is a change of strategy." Now we have to include the cost of doing discovery, the cost of going to court, and the potential cost of settlements, while also including, you know, the number of cases where we think that realistically we will actually settle. It is significantly more expensive to do discovery.
to run the legal cases in front of a judge and so on, it has been for us to settle historically. The amounts that we have used per case to settle historically are far lower than if we are to do full-blown discovery, and so on. Therefore, the amount have gone up so significantly. None of us know at this point in time, how many cases will then actually end up in court and how many will be settled, and so on. We just have to reflect the fact that we have gotten a different order from the judge, and therefore, we also have a different strategy.
That's actually the background for it, and of course, we can't start to spell out each of the elements in this. It's basically a point in time where we have gotten very far with the strategy that we have had, and now we need a different strategy. That's at least what the judge thinks, and that's what we are working with. Oh, my God, your last question, what was that again?
On the strategy, going forward?
Oh, yeah. Yes.
Basically.
You know, we, when you are in the U.S., you have, it is the land of opportunity, and there are so many great opportunities for you to pursue. It's also a country where, when you're part of legal battles, as we are right now, it's extremely expensive. We're not scared away from this. We know it's a cost of doing business in the U.S. Longer term, of course, we will take the learnings that we have here into consideration, but at this point in time, no change to the strategy we have. Then back to you, Anders, on the-
Yeah.
On the dividends.
Yeah. As Lars also mentioned, in terms of our dividend policy, we will continue to pay out our excess cash, so that is unaffected by the change in the provision. The free cash flow will be impacted by the mesh litigations, and we are viewing this as extraordinary, and therefore, we will also expect to neutralize this through borrowing. That is how we see it.
Could you give some flavor of the average settlements that have been made in court so far among your competitors, and also the amount of punitive damages?
No, we actually think that we have a very different type of products than many of our competitors. That's also why we have been settling at pretty low amounts compared to what our competitors have been able to do. Therefore, we would not like to speculate on this, but there's a lot of public knowledge out there. We are not the ones who are going to entertain with that.
Okay, thank you.
Thank you. Your next question comes from Niels Leth. Please go ahead.
We can't hear you, Niels.
Can you hear me now?
Yes.
Great. Over how many years would you expect the remaining part of your provision to be consumed?
That's two to three years, we think.
Two to three years?
Yes.
Okay. what will be the impact on your tax payments? I expect you would, as usual, pay your next tax bill, is it in early December or so? would you then suddenly get a tax refund instead?
In terms of we will, yeah, pay that in as we normally do in our Q1. In terms of it depends very much on the cash flow of the when we are going to settle this going forward. So that is too early to say how that will impact us going forward. Niels?
Oh, okay. Except from this, you will continue to set aside about 25% in tax?
This year, for this year, we are now saying that the tax rate for this year is going to be 28%, where we guided the previously 24%. We will, when we come with our guidance for 2015, 2016, we will return how we see the tax rate develop next year.
Okay, very good. Thank you.
Thank you. Your next question comes from Yi-Dan Wang. Please go ahead.
Thank you so much. Just wanna clarify, whether the DKK 3 billion relates to the 200 cases, or does it include, you know, additional cases beyond the 200?
Yeah.
Then the on the tax rate, is all of this additional settlement tax deductible? Looking at the tax rate, the new tax rate that you've announced for this year as a result of this increase in provision, it seems that the tax rates are different. If you could walk us through that would be helpful.
Yeah.
Then the cost of discovery, can you give us some sense of how much it costs to go through discovery on a, you know, roughly on a per case basis? Whether the plaintiffs would have to carry that cost, and then presumably that would encourage them to settle?
First of all, we have included also the number of cases that we think will come in going forward. Actually, to what we expect to be the end of the MDL. That's of course, at this point in time, our best estimate. That part is included. It's very hard for us to give you the amount of discovery. Maybe, or the amount that we spent on discovery, and maybe I should explain a little bit further to you why it is that we are not, why we don't want to talk about the number of cases and so on going forward, because actually that we did do previously.
Previously, we said, we did not have much public knowledge, but when AMS came out and they published a very large number of cases and settlements and so on, we were able to calculate a number out of that. We took the 7,000 cases that we had, and we used more or less the same per case average. That was all for 100% settlements. Now we are in a situation where we set aside an amount to do discovery, which is what an amount that we have gotten from our lawyers, because they have some kind of insight into that. We have set aside, you know, some number of cases that will be settled.
We have also included the number of incoming cases until the end of the MDL, and we have included the cost of discovery and all kinds of doing trials and so on. It's a very, very mixed picture. If you have this picture together with a number per case average and so on, does not really make up any sense compared to what we had previously, because it's a new strategy. That's the reason why we can't be precise about this, because we also think it will probably harm us in the negotiations that we have to go into now with the people that are litigating against us.
I can confirm that the pressure that is now put on us, with the 200 cases that we have to prepare, the same pressure is on the litigators because they also have to establish medical files and send that in, and so on and so forth. It puts a pressure on both parties in this case, to make sure that we have an incentive to try to settle.
Okay, generally, I mean, how much does discovery cost? Not for your mesh, but your lawyers probably would have given you some sense of, you know, how…
Yes. Yes.
Similar things.
We have gotten that, and I can't share that information.
Okay. Then the 200 cases, do they need to be addressed individually or could they be-
Yeah. Yes. If we end up in a situation where they will be put forward to the court, then each of them will have to be seen as individual cases. That's the whole idea about a multidistrict litigation, is that every single case is an individual case. But, you know, so many things can happen from now on, and until this whole case complex is closed, so it's very hard to say, you know, what will be the outcome here.
Okay. How good have you been in predicting the number of valid cases that are against you so far?
I think that so far we have been very good. You also have to take into consideration that we still see TV commercials for these cases. We also have to take into consideration that some of the other manufacturers, they have lost in court and have, at least in the first instances, seen very high amounts that they had to pay. That keeps the interest going, and therefore, we still expect that there are cases coming in, and that we have also taken into account with the provision that we made today.
Okay. Before the tax question, just last one. What proportion of the meshes that you've sold have turned out to be valid cases against you, roughly?
You will never know that when you are settling a case, because the whole idea about settling a case is that it's not progressed to court. Of course, when we receive a complaint, or a case, then, for us to acknowledge it and even start settling discussions, we have a medical record, so we fully understand it is our product. We also understand the history of that individual, so that we know that it's not without grounds. Of course, we don't have the same kind of depth in the understanding that you will have if you go through a full discovery.
Okay, you have included a number of future cases in the DKK 3 billion provision.
Yes.
The additional cases, plus the ones that.
Yeah.
you're well-
You
Should give you a sense of what the, your risk is for your product.
Can I suggest that Anders, he takes the question about tax, and then we move on, because then you can come back in line, but I think that we also need to give other people an opportunity to ask questions. Would that be okay?
Yeah, that's fine.
Okay.
In terms of the tax, what we have said now, it's, we expect the tax rate this year to be 28%, where we previously had the 24%. The way we have calculated is that the mesh cost is not deductible until they are paid out. We have used the corporate tax rate in Denmark next year of 22% in that calculation.
.W hy would the tax rate be 28% this year?
No, it's because.
Okay, yeah. It's lower.
Yeah, it's lower. We have used the 22%, that is the corporate Danish tax rate for next year, and it's not paid out, until the mesh cost is not deductible until they are paid out.
That will be in December?
No, no, that's going to be sometime in the future. That is something that is difficult for us to predict, but our assumption is, in the tax calculation, is that we have used the 22%.
Okay.
That is the corporate Danish tax rate for next year.
Okay, thank you.
Thank you. Your next question comes from Alex Kleban. Please go ahead.
Yeah, hi, thanks for taking the questions. Three, first is, how many plaintiff law firms are involved across the 200 cases? I'll do them one at a time, if that's okay.
Well, we actually don't know at this point in time, how many are involved in those specific court cases.
Okay, yeah, fair enough. I guess the second one was then just to clarify, you will lever up to protect the dividend. Do you think about then taking all of the amounts, say, DKK 3 billion now, just because you can access the low rate? What kind of rate are you gonna be thinking about on that?
The, yeah, it's something we have not decided upon yet.
Is it fair, I mean, should we be thinking more or something, 2.5%-3% range? Is that generally about right for your financing costs based on any recent discussions you may have had?
No, we have not yet decided on when to do this.
Okay. Okay, would it be fair to say that you would prefer to do it upfront? Or would you do it as you see the payouts coming, you would maybe go, you know, 6-12 months in advance or something like that?
Yeah, we, again, we have not decided on how we will do this.
Okay, that's fair enough. The last question is just more about, I think it was asked earlier, but just to follow on: It seems that we get to a point now where the liabilities or the provision for this business are probably a lot greater than the profits or maybe even the sales that have been made out of it since you've owned it. I'm not sure if that's a fair statement. Does it come to the point now where you think about winding it down, just given all the issues and given that maybe this comes back again at some stage in the future, or just trying to sell it to somebody else and just kind of taking some residual value?
You know, maybe I was gonna say, maybe putting, like, a bad color glass and a good color glass, and just put this in the bad part, and then we can focus on the, you know, businesses without the overhang like this.
Yeah. Well, you know, it's almost like when you think about what you could have done, there's plenty of things that you could have done. Now we are in the middle of this, we find it extremely uncomfortable. I just see no other way than just moving forward and get on the other side of this. What we do at the other side of this is a different discussion.
As it is right now, we can't do anything else than what we do, and that is to produce great products, and help as many women as we can. Then we have to get on the other side of this legal battle. It's very, very uncomfortable, but that's just the situation.
Well-
We don't have any options, than to move forward here.
When we get there, assuming we get through this, you know, if it's a year or two from now, is there then a strategic evaluation that goes on about whether you really want to stay involved in surgical urology in general, at least on the implantable side of the business going forward?
Yeah. It's, it's, you know, we always take stock of, you know, what kind of value creation does our different business areas produce to us? Of course, we also do that for the urology business. Right now, because of the situation that we are in, we have basically no other options than to run the business and to move forward and get on the other side of this.
That's fair enough. How is the business going in general? We did see, at least on the male side, some pressure in the last few quarters. Has that improved, at least? Can you comment on that now?
Yeah, it's improved a little, but it's not as good as it was last year.
Okay. On the female side, similar situation, where maybe this is depressing volumes, or has that recovered well?
Well, it's not going that bad. I mean, you could think that when you have all of these court cases going on and all of the negative press, then you will see a real dip in the business, but it's actually doing okay.
Oh, okay. Okay, well, thanks. Sorry, I've probably gone for five questions instead, but thank you for the time.
You all do tonight.
Thank you. Your next question comes from Riddhim Karkera. Please go ahead.
Oh, hi. Riddhim Karkera, actually.
Thanks.
A couple of questions for me, very simple. The first one, because I might have said you said that in the comments, but I didn't manage to get in the call maybe early enough. The provision now, the total provision, is regarding all your, like, your view of the liability for you in this all future cases, not just for the extra 200 cases you had to go to discovery?
Yes, yes.
Okay. If tomorrow, another judge adds another 200 cases, it's not gonna be another $2 billion?
It's including everything that we know of at this point in time, plus all future cases that we estimate will come in. It's all of that. It's plus the settlements that we think that we'll be able to do, plus the amounts that we have to set aside for discovery, running court cases and also potential outcomes of that. It's everything we know at this point in time.
Okay.
This is, however, not a guarantee.
Mm-hmm.
It's also, including, by the way, the legal expenses on all of this. It's all we know. Of course, I mean, it's highly volatile, so therefore, it's hard for us to be, you know, very certain of this, but we have taken into account everything possible.
Okay. That's very clear. Thank you very much. That's all my questions. Thank you.
Thank you. As a reminder, if you wish to ask a question, please press star one on your telephone keypad. Your next question comes from Veronika Dubajova. Please go ahead.
Good afternoon, gentlemen, and thank you for taking my questions. Can I just check, can you hear me okay?
Yes.
Excellent. Sorry, I'm on the road.
Yeah.
A couple questions for me. The first one is, I just want to understand, if these 200 cases do not progress to court and instead you end up settling them.
Yeah.
Is it fair to assume that, you know, the real payouts and the cash flow would be significantly smaller than the provision you've taken today?
It depends, what kind of amount you are settling those cases at then.
If I look at the incremental sort of amount per case that you have taken, and I appreciate you can't tell us, you know, what part of the provision is for new cases and what part of the provision is for the 200 that you have been ordered to take to discovery and to court. I mean, the cost is we're talking somewhere between $2 million-$3 million per case here, that you're provisioning for. Is that the right way to think about it?
I think it's very easy to be in a situation where we, where we, or where you are oversimplifying the calculation, which is behind this. It's actually taken us and our lawyers quite a bit of time to put this together. It's, as I said before, there will be a number of cases, of course, that we will still be settling. We will also have costs to prepare discovery, and so will the litigators. Therefore, how this pressure that the judge have been putting on both us and the litigators, how that will play out, is very hard to say.
That's the reason why when we do this provision, we need to take into account a situation where we have to handle all of this, you know, also the 200 cases going forward. It's not going to be exactly as we predicted today, but how that comes out is very hard to say. I would not like to start to give bits and pieces because that would put us in a very awkward situation going forward, when we have to, you know, discuss this with the different parties that are understanding what we say at this call.
Okay, understood. Last, Lars, I'm not aware of any of your competitors being forced to take their cases to court. I think most of them have been pretty successful at settling the vast majority of cases that they've been in.
No, that's not a correct assumption, though, Veronica.
Okay.
Um, uh-
Please correct me.
Yeah, no, it's, actually, some of our competitors have pursued a strategy which is solely go to court, and they have not settled anything. Some have primarily been going for the court route, and some have done like us, where it's primarily the route of settling. That's. You have to change that assumption.
Okay. Okay, you wouldn't say you've pursued a different litigation strategy to your competitors. It is fair to assume that some of your competitors are seeing similar progression at this stage?
Yeah, I think it's fair to say that the judge is putting pressure on all parties in this instance, in order to make sure that we get this total complex resolved.
Okay, understood. Thank you very much, Lars. Really appreciate it.
Sure.
Thank you. We have a follow-up question from Yi-Dan Wang. Please go ahead.
I think you got your seven questions, but come on anyway.
You did say I can come back, so.
That's okay.
If you're willing to answer, I'd appreciate it, but, don't worry if you can't, if you're uncomfortable answering it. Do you still remember the question?
No.
Okay. I'll repeat it. I was wondering what the failure risk for the product is, based on, you know, what you know and what you expect to come through in terms of the cases that you have provided for. That's all.
I'm not sure I understand or follow, what you...
basically,
What do you mean by failure rate or risk?
Basically, you know the total number of devices that have been implanted, you know how many...
Yeah.
How many allegations or how many plaintiffs have come forward to make a claim against you-
Yeah.
You know how many you've settled.
Yeah
based on, what you've seen and how many you're providing for in the future. I just wondered what the, you know, the risk profile.
Ah!
of the device, is.
Okay.
Um-
That's what kind of risk are we talking about then? Because this is, at least I think that you should try not to compare the U.S. legal system and the way it works to the way it works when you are in a European legal system. It's very, very different mechanics that are driving the number of cases that come forward. Therefore, I think that you should call Ian to get an in-depth talk about this so that you understand, you know, the background for this.
It's, you know, it's very hard to just give an answer that sort of makes sense if it have to be a short answer, at least.
Okay. Well, basically, the question was asked in relation to your comment earlier that you expect the whole thing to wrap up over a two- to three-year period.
Uh-huh.
I'm thinking that, you know, these devices probably fail over time.
Yeah.
How can you be sure that you would actually wrap it up over the next two-three years?
Well, well, well, that's a very good question. Thank you for clarifying. The reason why I can say two-three years, or why I believe in two-three years, is because that's what I have been told from our lawyers. What they normally say is that MDLs, they historically are running five-six years before they close down. It's about the whole underlying, you could say, business model of these things, that at a certain point in time, it makes or it creates a better return on investment to move on to other cases.
They have sort of, a life cycle, and this is the historic, picture that we have been, explained.
Okay. All right. Thank you. That's helpful.
Okay, sure.
Thank you. We have another follow-up question from Niels Leth. Please go ahead.
Yes, a quick follow-up. Do you know how this mesh litigation cases will impact the way that your auditors will do the goodwill impairment testing of your urology division here in combination with your full year report?
Yeah. We actually have looked at that, and we are not changing the way that we are handling that. And it seems as if we are still having a very big safety margin, and therefore there's no change. Yeah.
Okay, thank you.
Thank you. We have another follow-up question from Alex Kleban. Please go ahead.
Hi. Thanks, thanks for letting me have one more. Just a quick follow-up to Yi-Dan's question, is there a sort of statute of limitations on these things, where if you have a device that was implanted prior to the MDL, it fails after the five-six-year window? If somebody's missed that window and then their device fails, can they then open up a lawsuit against you after the fact, let's say 10 years from now or six or seven years from now, whatever the case may be?
You can always. There's nobody who is refraining you from opening a case against a company where you have bought or gotten a product from. There is a certain date by which the MDL have not or is not accepting products anymore.
Mm-hmm.
In that sense, it's not like, the product that you're selling today, you're still feeding the MDL with those.
Do you have a general sense of how many more cases or you know, what's the total base of devices in this category that have been installed or have been implanted over time? Is there a risk that maybe there's another 5, 00 or 6,000 out there that could go wrong at some stage down the road that we haven't seen yet?
We have this year we have seen TV commercials for four years trying to get women to sign up for yeah, for this for these court cases and for this MDL. We still see that they are coming there's an inflow but we also see that the rate of the inflow is decreasing.
Yeah, okay, that's fair enough. I'll sign off now. Thank you.
Thank you. Your next question comes from Ian Douglas-Pennant. Please go ahead.
Thanks very much for squeezing me in at the end. It's a quick one on the guidance. Last time you gave guidance, the CER and the reported margin was the same. Now they're different. I mean, have you updated your assumptions for effects, or is it just happened to fall the other side of rounding error, as it were?
It's, what you're saying, the latter thing. It's, we see a little bit higher nominal in actual rates, nominal EBIT in actual rates.
Mm-hmm.
That's why there's a little bit bigger, so our guidance in, it's 11% EBIT.
Okay, great. I've managed to draw you on a question on guidance. That's something for me for the record books. Thank you very much.
Yes. That's right. That's very hard.
Thank you. Your next question comes from Morten Larsen. Please go ahead.
Yes. Hi, guys. Two questions just to follow up. First, on Ian's question, the new guidance you're putting out here updated, is this a confirmation of the old guidance? I.E., that what you have seen for the first 14, 15 weeks of the last quarter is confirming the full year guidance? That's one. Second, the large, first time you provision, you provision DKK 1.5 billion, now you say DKK 4.5 billion, that's 3 times up. How should we sit here and have any sort of visibility into whether this could actually be a higher number or not?
I could start with the last part of the question. For a very long time, we did not provide any guidance on these cases, because we simply had no background to provide a guidance. AMS came out with a very large settlement that gave us a per case average, which we used to give a guidance, because that was at least a public number in the market. We also clearly stated at that point in time, that we pursue a settlement strategy. Actually, I think it's been very successful for us, and it's worked up until now.
Now, the judge have issued a court order ordering us to begin preparing for court for 200 cases. That's a complete change of our strategy, and the only thing we can do when we get that is to do a new calculation for how to view this. That's basically what we can do. You know, I just have to say that I feel as uncomfortable about this as everybody else, but that's the base of it. We need to use the facts that we have at hand, and the facts have changed, and therefore, our provision have changed.
Basically, you apply some sort of probability that some of the 200 cases or some of all the remaining cases go all the way to a verdict, and you get a high penalty of that. Is that what you're doing?
Yes.
That probability could go up and could go down, going forward as well?
I can't, you know, I can't give you details on this because I think it's a very complicated math that you have to do at it. At the end of the day, it's the, it's an informed guess. Of course, informed by people who have tried this many times. We are guessing, of course, but we think that the whole idea why the judge is putting this pressure on us and on the litigators, is to speed up the rate of settlements.
On the guidance, I must go on with this question.
Yeah.
Is that a confirmation of?
On the guidance, the EBIT before the special item is still 32%, both in Danish krone and constant exchange rate, so no change to that.
It's a confirmation that what you've seen in the first part of, in all of the Q3 quarter, fourth quarter here, is basically in line with your trading guidance from last quarter?
Yes.
Okay. Thank you.
Thank you. The next question comes from Anne Silvy. Please go ahead.
Hi. Thank you for, so much for taking my last-minute question. Could you just explain what is the difference between these 200 cases versus the 7,000 that you have? Why will these expectedly end up in court, and how don't you expect more to end up in court, please? Thank you.
Yeah. The strategy that Coloplast has pursued up until now has been to avoid getting in court, but to settle. Because in the US court system, it's often less expensive to settle than it is to go through the whole process of bringing a case in front of a court. That's been our strategy up until now. The whole idea about a multidistrict litigation is to make sure that a large number of the cases are settled, because the court system does not have capacity to handle all of the cases.
If you take the total number of cases, I mean, you know that up until now, Coloplast have 7,000 cases. If you take the whole complex, it's more than 100,000 cases, if you include all of the manufacturers. There's no way that this could be handled in a court system, and therefore, the pressure is on in the system, that a large number of cases are settled. They need to be settled, and that is the process that we are in now. When we have been ordered to take 200 cases to the court, it's to make sure that we are speeding up the process of settling. That's the whole.
I don't know, if you're from America, then I shouldn't entertain you about how the U.S. system works, but otherwise, I think that you could get a debrief from our investor relations, guys, on this, because it's a very different system.
Thank you. Could you just clarify how long usually it takes for you to settle a case? How is that going to be shorter now due to this pressure?
Settling cases can be a lengthy process or it can be very, very fast. It depends how much you're willing to pay. It's basically a negotiation, and therefore, I can't give you an average for that.
Okay. Thank you.
Thank you. We have a follow-up question from Søren Holm. Please go ahead, yeah.
Yes, just a quick one. The 4,500 cases you have already settled, are they all settled under your initial assumptions, or have they also been higher settlements, which is part of your increased provision?
No, they have been settled under the initial assumptions. I think that would be the last question for tonight. Thank you very much for participating.
Thank you. That does conclude the conference today. Thank you for participating. You may now disconnect.