Welcome to BONESUPPORT Q2 report 2023. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answer session, participants are able to ask questions by dialing star five on their telephone keypad. Now, I will hand the conference over to CEO Emil Billbäck and CFO Håkan Johansson. Please go ahead.
Thank you, operator, welcome everyone this beautiful morning to the BONESUPPORT Quarter 2, 2023 call. My name is Emil Billbäck, sitting next to me is Håkan Johansson, our CFO. We'll use the next 25 minutes to guide you through the presentation of the first results that we released this morning in the Quarter 2 report, we will open up for a question and answer session. Before I go into the presentation, we would like to draw your attention to the disclaimers that will cover any forward-looking statements that we might do today. Let's get right into it. I would like to begin the entire presentation with some condensed highlight from the report. Of course, we're very pleased to report the Quarter 2 sales of SEK 140,000,000 .
This corresponds to a reported growth of 88% year-over-year, and in constant exchange rate, the growth rate was 75%. The operating result before incentive provision was SEK 14 ,000,000 . This is a profit improvement versus the same period last year of more than SEK 23 ,000,000 . The reported EBIT was SEK 6 ,000,000 , which marks now our 2nd quarter as a profitable company. The main highlight of the quarter was, of course, the ongoing launch of CERAMENT G in the U.S. We saw an increase in CERAMENT G sales of SEK 16 ,000,000 quarter-over-quarter, with surgeons using CERAMENT G on a broad set of applications within the indication and a high level of pilot use in the quarter.
We are continuously improving our products and the user experience, and in the quarter, we announced the launch of the next generation of CERAMENT G, which increase ease of use and also reduce environmental impact. In the quarter, data from long-term follow-up, meaning 4.5 years after using CERAMENT G with open trauma fracture, was published. I will cover all of these topics later on, more extensively in the presentation. Let's first look at the sales development. We go to the next slide. This is one of our standard charts for the quarterly report and investor presentation. It shows last 12 months sales in Swedish currency, and it shows every quarter since Q2 2016, split by region and product category.
Sales is taking off really well, with the largest driver being CERAMENT G in the U.S., reaching sales of SEK 51 ,000,000 in the quarter. In Europe, the antibiotic-eluting CERAMENT, which is the CERAMENT G and CERAMENT V combined, sales grew with 32% in the quarter versus last year. We conclude that a note that we make market share gains on other therapy options, mainly autograft and bone cement, on almost all markets in Europe. See a general improvement in surgical volumes across all geographies. In Europe, we have to summarize, is still behind pre-pandemic levels in terms of surgical volumes. There is some emerging cannibalization between CERAMENT G and CERAMENT BVF in the U.S. I will share some more details about this also over the next coming slides. Let's start now with the U.S. and go to the next slide.
In the U.S., sales of SEK 104 ,000,000 in the quarter, which corresponds to a growth of 126% year-over-year. At constant exchange rate, the growth would have been 107%. Sequentially, growth was 21%, meaning the growth in quarter two versus what we reported in quarter one, 2023. We're starting to see some cannibalization, as I mentioned before, between CERAMENT G and CERAMENT BVF, but despite this, CERAMENT BVF in the U.S. grew 14% in the quarter versus quarter two last year. In fixed currency, the growth was 8% for the first six months of 2023 on CERAMENT BVF. This can be compared to the growth that we saw in the second half of 2022, when CERAMENT BVF grew with around 40% in constant currency.
The difference between these two numbers is, of course, partly attributed to the cannibalization effect of CERAMENT G. Let's go a little bit further into details on CERAMENT G, which we prepared on the next slide. We're on slide 6. With this quarter sales of SEK 51 ,000,000 , we can conclude that the quarterly sales of CERAMENT G that we have in the U.S. is now actually larger than our entire European sales in the quarter. I believe that this shows the large unmet need, but also the efficiency of our commercial structure in the U.S., and also the huge potential that we're tapping into. Our hospital approval process is progressing well, and we have added some 10 approvals since quarter one. Among the added approvals in the quarter are the very large Atrium Health and the prestigious Stanford Health Care.
So far, we have signed some 60 out of the approximately 420 hospital groups covering in the U.S. We must say we've been off to a very good start with approvals, and now, in, and in the most recent period, focus is on securing implementation and driving account penetration where approvals have been given. Educating and training the orthopedic surgeon and the hospital staff is part of the contractual commitments when introducing a Breakthrough Device like this. This is also an essential part of creating therapy ambassadors among the surgeons. The amount of pilot uses, which precedes approvals and continuous use, was high during the quarter. I have shared with you before that the performance and the market penetration of a completely new product like this goes in waves. go, stop, go, as it's called in the orthopedic industry.
We continue to get positive feedback on the product handling and the transition, especially to a one-stage procedure. All in all, caretakers and hospital administration see clear and visible clinical and health economic benefits, very similar to what has been previously displayed in various clinical studies. In order to systematically build a database of experience with CERAMENT G, and also consolidated patient data, we're starting a structured collection of data, a so-called registry study, on the use of CERAMENT G in the U.S. We're now selling in 38 states. During the quarter, we saw our first CERAMENT G order from OrthoPediatrics. OrthoPediatrics have been successfully selling CERAMENT BVF to pediatric hospitals. They're now adding CERAMENT G to this customer segment.
Several layers of data has been processed regarding the ambition to get label extension for CERAMENT G in the US to also include prevention of infection, as an example, related to open fractures. The last batch of data has not yet arrived from the university hospital that we have partnered with. With previous insight and knowledge of the time it takes to analyze and process such amount of data, and also to put it together into a submission, we have moved the target date for the FDA submission to the end of quarter four this year. Let's turn to Europe. We'll go to the next slide, please. In Euro, for the quarter, we saw sales of SEK 36,500,000 , and this corresponds to a growth of 28% year-over-year and 24% at constant exchange rate.
We continue to see a steady recovery in general surgical procedure volumes. However, healthcare staffing shortage remain a challenge, and we will continue to pose a challenge in quarter three, as strained healthcare workers will try to manage during the European vacation season. For the third quarter, we thus expect a certain accentuation of the normal seasonality. In the quarter, we announced modifications to the CERAMENT G. This was the third major upgrade to the product, so we called it the third generation, even though the change of the lock may be that dramatic. Let's take a further look on what those changes actually are. We're on slide eight. Important to note, first of all, is that there's no change to the formula, the composition or the mechanism of action for CERAMENT G.
There is no change to the active ingredients, but all the components for mixing and applying CERAMENT G now comes in one surface sterile tray. For those that have been in a surgical theater, you know that every component must meet the requirements of the different and specific surgical zones in the theater. The improved handling and the reduced waste are factors that will matter a lot to the staff performing the surgery, as well as to procurement officers, and of course, to our continuous sustainability work. We'll go to the next slide. Continuing on the highlights, we are constantly assessing the organization in perspective of overall ambitions and deliveries. We've decided to change how we lead our efforts of indirect markets, and that means the distributor markets in Europe and the rest of the world, and also the European hybrid markets.
We've set up a new structure here. We've also, in the quarter, done some organizational upgrades, and the changes that I'm mentioning now were required in order to take our performance to the next level. However, these changes have triggered severance cost and other expenses in the quarter of about SEK 3 ,000,000 . Changing the structure like this and upgrading the organization is, of course, part of running a fast-growing company, but to the magnitude we saw in quarter two, I think this has to be considered as non-recurring cost, of course. Also in the quarter, there were two really important studies that were published.
The first one, a study by Kavarthapu et al. from King's College, showed strong results on infected diabetic foot ulcers that were treated with CERAMENT G or V, and all patients in the study were able to avoid amputation. From the University Hospital of Manchester, Wythenshawe, Henry et al. followed 81 patients with open trauma fractures for a median of 55 months, confirming excellent and sustainable benefits from a single-stage procedure of CERAMENT G. On the next slide, just looking a little bit further on what the patients look like that were part of the trauma study by Henry. This picture shows the open trauma fractures and how they're assessed on a scale from 1 to 3 in terms of severity. The study from Henry et al.
was made on 81 patients in category 3B, and you see the categorization there with a red square around it. This means that the bone is really in fragments, and that there is material soft tissue damage. Several previous publications have shown infection rates on these category of trauma fractures of up to 52%, and an amputation rate of 16%. In the study, the infection rate was 3.7%, and the amputation rate dropped to 3.7% as well, and this is when the patients were followed for 4 and a half years. This is the longest follow-up data ever published on use of a synthetic bone graft on 3B open trauma fractures. Very strong results, also clinically, delivered in quarter two.
With that, I leave over to Håkan to do a bit more of a deep dive in the numbers.
Thank you, Emil. Let's jump to slide 12. Net sales improved from SEK 74,600,000 - SEK 140,400,000 , equaling a growth of 88% or 75% in constant exchange rate. Emil has already spoken about the strong performance in the two segments and the major drivers behind the sales acceleration. Let me comment on the currency. Changes in currencies measured in year-to-date averages in 2023 versus last year, had a positive impact of in total SEK 9,600,000 , of which $8,600,000 relates to a stronger US dollar. The depreciation of the Swedish krona versus other currencies also drives expenses, as you will see on later slides. Let's move to the next slide.
The contribution from the segment North America improved with SEK 24,600,000 and was reported to a regional contribution of SEK 31,700,000 . The improved contribution relates to increased sales after effect from increased costs. Sales and marketing expenses during the quarter amounted to SEK 65,400,000 , compared with SEK 34,800,000 previous year, of which sales commissions to distributors and fees amounted to SEK 36,700,000 , compared with SEK 16,700,000 the same period last year. The increase of SEK 10,600,000 , excluding commissions and fees, was driven by currency effects of SEK 2,300,000 and the remainder from an increased activity level. As we have announced previously, the U.S. booster positions are up and running, and there is a strong focus on medical education and increased market presence, also contributing to the cost in the quarter.
The contribution was also charged by R&D cost related to studies of SEK 1,000,000 in the quarter, same level as previous year. From the lower graph, showing net sales as bars and gross margin as the orange marker, it can be noted that the gross margin is remaining strong and reported to 94.5%. Sales to OrthoPediatrics in the period impacted gross margin negatively in comparison to the first quarter this year. In Europe and rest of world, a contribution of SEK 7,600,000 was reported, to be compared with SEK 7,100,000 previous year. The improved contribution raised to increased sales after effect from increased costs. Sales and marketing expenses increased with SEK 6 ,000,000 and was driven by currency effects of SEK 2,300,000 , but also attributable to field vacancies and to a generally higher level of market activity.
From the lower graph and the orange market, you can see an improvement in gross margin compared with the first quarter this year, following an improved market mix. As mentioned in our quarter first report, we have a minor increase in manufacturing costs. The latter is anticipated to be mitigated by increased sales prices, having gradual effect during the remainder of the year. In the period, finally, we also had non-recurring costs impacting sales and marketing in North America and Europe, with altogether $2,900,000 . Let's move to the next slide. Selling expenses increased with $17,600,000 versus last year, of which $3,300,000 relates to currency effects and $2,900,000 in non-recurring costs. As we mentioned before, the US booster is up and running, and we continue to see results on top line.
In Euro, we increased early in the year with two headcounts on the sales side, and our total Euro commercial organization is now 30 people. The increase in the quarter relates to a ramp-up in activity level of congresses, medical education, and of course, the launch program for CERAMENT G in the U.S. R&D remains largely in line with previous year, but was picking up from a low Q1 this year, and administration remaining on a stable level, excluding effects from the long-term incentive program, equaling SEK 12,200,000 , compared with SEK 10,900,000 previous year and SEK 11,700,000 in previous quarter. Next slide, please. The operating profit was reported to SEK 6 ,000,000 , compared with a loss of SEK 14,900,000 for the same period previous year. SEK 20,900,000 improvement following a strong sales performance.
The profit also includes expense provisions regarding long-term incentive programs, amounting to an expense of SEK 7,700,000 this year, compared with SEK 5,800,000 previous year. Of the total cost of SEK 7,700,000 in the period, only SEK 200,000 is cash flow impacting in the future. The operating profit improvement before the long-term incentive programs was SEK 22,700,000 , confirming a strong underlying positive trend. The increased provision for incentive programs in the quarter relate to the strong share price appreciation in the period. Cash flow in the period was impacted by the strong growth, resulting in an increase in accounts receivable of SEK 51,100,000 . With this, I hand back over to you, Emil.
Thank you very much, Håkan. Let's wrap up this presentation. We're, of course, very pleased to present such strong quarterly results, and we believe this is more than confirming the high expectations on what CERAMENT can do to drive improved patient outcome. In the first six months of 2023, we've seen a gradual recovery of overall surgical volumes, and CERAMENT is rapidly capturing market shares on all markets present. Our growth rate in the first six months in constant exchange rate was 72%. Some of you have followed the company for a few years, but I must reiterate, we've only begun our journey in terms of market penetration and to deliver the full value of the CERAMENT platform.
Håkan and I will take a bit of vacation now, but later in the summer, we will start to plan the details and prepare for a Capital Markets Day in the autumn. One of the focuses will be on how our continued journey will look like and also how continuous new clinical discoveries goes hand in hand with progress on further innovation based on the CERAMENT platform. We do believe that we have quite a unique position in the market, with favorable market dynamics ahead, being the only FDA-approved antibiotic-eluting bone graft in the U.S., with evidence supporting superior and sustainable clinical efficiency and health economic benefits, and on top of that, a very competent and passionate organization. With that, I conclude this presentation and look forward to open up to a question and answer session.
If you wish to ask a question, please dial star five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial star five again on your telephone keypad. The next question comes from Erik Cassel, from Danske Bank. Please go ahead.
Hi, good morning, Emil and Håkan. First question, as you said, you added 10 VAC approvals during the quarter. If I remember correctly, you had 50 approvals at the end of Q1. This seems like a slight deceleration compared to, you know, the VAC approvals you had during previous quarters. Is that a correct conclusion to make, or is there any good explanation for it?
Thank you, Erik. Yeah. Yeah, of course. So when we entered quarter two, as you said, we had 50 hospital system approvals, and then as we left the quarter, we had 60. Numerically, slightly less approvals were added in quarter two, but that's just numerically. We have not disclosed or discussed the value of the different approvals. I would like to point the attention that in quarter two, we landed, among others, the Atrium Health. It will go in waves also. I think in quarter one of this year, we had an exceptional amount of approvals, but quite a few of them were also on the slightly smaller side.
With the additions we had in quarter two, it's absolutely in line with our expectations, and that number will go up and it will go down for various quarters. As you can see from the sales number, we're keeping a good traction.
Okay, perfect. It doesn't really imply, let's call it deceleration Q on Q into Q3 then. You, you also talk of high pilot activity. Is it possible to say how many pilots are running now and how that compares to end of Q1?
There were more pilots in quarter 2 than there were in quarter 1. Usually from when the pilot trials are running, there is, on average, a 3-months delay before the notification comes from the VAC committee, as you mentioned before, on the approval or not approval. Given that we had a lot of pilot trials, we should start to see the hospital system approvals picking up again in the end of quarter 3, beginning of quarter 4.
Okay, perfect. On the sequential growth rate, quite high now compared to Q1. Is it possible for you to share how much of that is driven by more use in existing account versus, you know, added accounts?
No, we have decided not to go into that depth. The only, the extraordinary effect that we decided to comment on is that we took an order from OrthoPediatrics in the quarter. OrthoPediatrics, as you remember, is the only of our partners that actually buy to shelf. That order was about SEK 2 ,000,000 on CERAMENT G.
Okay, okay. Then I also wanted to ask on the delay in the trauma application, I mean, how certain are you that you will get all the data and meet this new timeline, or is there any sort of uncertainty to it?
When dealing with huge amounts of data and very complex data, there's always uncertainties. When dealing with FDA, there's always additional uncertainty. Why do I say that? Because, as with CERAMENT G, we have established a completely new category with the orthopedic segment. For both BONESUPPORT and for FDA, and I think for the industry at large, it has been surrounded with a lot of learnings on what is it that have to be in place to open up such a new category. We should remember, there are not a lot of new categories that are opened in the orthopedic segments in the last 10 years. We saw from our initial approval of CERAMENT G that it was a bit of trial and error, also from FDA side, in terms of what was demanded.
We remain confident, both in the team here at BONESUPPORT and the partners we have, but we can never be fully sure. If everything goes really well, then we will have the submission in, end of this year, and then, FDA has about 90 days for their review. We also see several examples where, FDA review the material and then comes back for supplementary information, and we have really no idea how this is going to play out. We will do our best as always, we will be also in the hands of FDA's, their interpretations and what it is that they would like to see for this extended indication.
Okay, okay, I understand. One last question, if I may. I mean, the third generation of CERAMENT G, will that have any sort of impact on potential pricing and gross margins?
Håkan, you have reviewed the cost structure in detail for the new product.
Again, Samuel, as we mentioned already, Q1 report, we have minor general cost increases in the manufacturing. These costs also impacts on the third generation, that also then involved and included in the price lists and the price updates that we have launched have incredible effect during the remainder of the year.
One can also see some of the changes that we do now. You saw on the picture, it's a bit of a structural change to go to a smaller package that also allows better capacity and scale. I think over time, any such cost actually will be diluted because this also gives us the ability to keep pace with a very high market demand, and big economies of scales in production usually also leads to lower cost of goods eventually.
Okay, I got it. Thank you very much, guys.
Thank you very much, Erik.
The next question comes from Kristofer Liljeberg from Carnegie Investment Bank. Please go ahead.
Thank you. I have three questions. First, is it possible to update on the penetration at the approved hospitals, the figure you gave in Q1, if that has changed in any way? Also when it comes to selling costs, you explained there were some one-off effects here in the quarter, but how should we think about them going forward? Will we see now gradually increased underlying selling costs for the remainder of the year with, driven by more activity and the changes you have done in the European organization? Finally, when it comes to selling commission in the U.S., if we look at that as a % of sales, that % has come down from the surprisingly high level in Q4.
I wonder if there's some seasonality in here that will be repeated this year, so that selling commission as a % of sales will go up again in Q4 versus what we have seen so far this year. Thank you.
Yeah, thank you very much, Kristofer. Appreciate your call and your questions. The, we release now the report very shortly after a month closing, and we actually don't have the data available on the penetration, so we'll have to take a passes on that one and come back. Currently, what we see, to give you some guidance, though, is that the penetration is increasing. It's increasing significantly with those accounts where we have won contracts and where we have been listed so far.
The work of the salespeople, the focus in quarter two, which will also continue very much in quarter three, is actually to make sure that those contracts that we have been placed on the hospital systems, that all the nurses, all the staff in the surgical theater, and all the orthopedic surgeons are well trained on CERAMENT G. We know that's a good formula for sustained growth. Right now, the focus is not so much on winning new accounts as it is to work on the penetration. I think that should give you a little bit of hint on where the growth is coming from. When it comes to the one-offs and what to expect for the autumn, Håkan, would you like to comment on that?
Sure, sure. Again, it's true that when we reported this latest quarter, Q2, our selling expenses were higher also than the first quarter, et cetera. When you take the one-offs in consideration, the close to SEK 3 ,000,000 that we impacted the latest quarter, et cetera, it is remaining quite stable to what we saw in the first quarter. This is 2 quarters where there has been a very high activity level in the market. We are now moving into a quarter where we will see some seasonality slowdown in those activities, but we can also expect that later in the year and in the fourth quarter, those activities to pick up again.
To the final question there on selling commission, good observation. This relates a bit back actually to your first question. It also relates back very much to our business model. We are very picky on making sure that when we win new accounts, that we establish that account, that we do the clinical validation, that we do the training, and that we support the surgeons to get up and running for CERAMENT in various different application. What does this have to do with commission?
It has to do with the commission because, last year, at the end of the year, our sales concentration was quite high, meaning that there were some of the distributors in the U.S. that were doing exceptionally well, and their commission then sprung significantly higher than the 30%, which is the average. That drove the mix of so that the commission looked higher. With CERAMENT G, also, we have gotten on board more distributors, and we're broadening the customer base and the distributor base. Also, at the end of the year, the delivery of the distributors was really high. When we come to the new year, there are new targets again. That the commission is now closer to 30%, it's a natural effect of those two components.
Could there be a seasonality and could quarter four again take off in commission? It all depends on the sales concentration, but I would say that the sales concentration this year is less than it was last year, so that should actually give us a more stable commission around the levels that we have previously communicated.
Great. That's very helpful. Thank you very much.
Thank you, Kristofer.
The next question comes from Mattias Vadsten from SEB. Please go ahead.
Hi, thank you very much. First one would be on CERAMENT G. You know, it's the third quarter now you sell the product, I just wanted to really hear what's deviated most from your own assessments and expectations for the product thus far, and maybe try to cover sort of feedback on price in this answer as well. That would be the first one.
Yeah. Hi, Matthias. Thank you. The sales, of course, that we've seen is a bit better than we expected, and the product is very well received. We see both from staff in the surgical theater as well as from surgeons, that they believe the product is easy to use. Of course, we've done a lot of clinical studies. Most of them are done in Europe. One is anticipating that the same kind of results will be created and achieved in the U.S., but you never know. When you launch a breakthrough product like this, it's always with a bit of uncertainty due to different therapy traditions and how they're using the product and what surgical techniques they're using.
We're very happy to say that the feedback we're getting now on those patients that have been followed up, the results are very much mirroring what we have seen in the big European studies. That is very comforting for us, but it's also very comforting for the surgeons to see that the product performs and behaves as promised, and that they can see results which are then very similar to what has been shown in the study. That gives them a confirmation that they're doing the procedure right, and that they can expect also the same long-term outcome and results of the product. In terms of price and in terms of market penetration, there's been very little pushback on price.
Even here, possibly slightly less than we anticipated, but it shows the dynamic of the US market, where the decision maker on the clinical, the clinical achievements, or let's say, the procedures to be done on the patient and the financials, are usually very close to each other. While in Europe, the surgeon responsible for the well-being of the patient and the person holding the wallet are usually a bit more separated. What does it mean? Well, it means in the US that the entity making the decision on the product, the Value Analysis Committee, for example, as Erik mentioned before, they look both at the clinical efficacy, the clinical benefits, and the health economic impact.
We have very strong data on the health economic impact, and this is very well understood in the US, and that's why also price is a much smaller factor in the equation. They look more at what are the benefits midterm, long term for us, health economic-wise, but also, of course, in terms of saving legs and avoiding amputations for the patient.
I appreciate that answer. To tweak some previous questions here a little bit, just to understand the dynamics on CERAMENT G. In a typical hospital you're approaching now, you know, what share of surgeons are using the product more regularly, would you say? I mean, it's a difficult question, where you are present, is there a lot of surgeons that are convinced, or can it deviate, you know, between surgeons in a given hospital, so to speak? Yeah, how difficult is it to penetrate a given hospital?
Well, yeah, I think this is a question we have to come back to many times, but I'll try to give a few examples. If we compare a big hospital in Florida, in Tampa, with one in Baltimore, we have a hospital in Baltimore where one orthopedic surgeon started using the product already in end of October. What we've seen in February, March, April is that almost all the surgeons have come on board and are using the product. On the other hand, you go to Florida, where you have a similar size clinic. One surgeon has started to use it.
The other surgeons are monitoring and of course, listening to the experience on this surgeon, but need a little bit more, a little nudge, let's say, and more possibly, support also from our sales and medical staff before they take the step of starting a new treatment. It very much depends how much do the surgeons interact with each other? How much do they listen to each other and trust each other? What does the head of the department think about the product? If you look at the really, really, big hospital systems, that we spoke of before, we can take Atrium, for example. Atrium is a big hospital system.
When we get such an approval, it doesn't really have any effect other than it gives us a hunting license. Then we have to put efforts in to visit as many surgeons as we can to get them from early trial to more continuous use. Then we can take a smaller hospital system in quarter one, we want quite a few of those. Here, it's much closer between the hospital administration and the clinicians, and when a product like CERAMENT G comes on the listing, there is usually a bigger awareness and attention to such a topic. So here it goes a little bit quicker to get more surgeons to start using the product.
There's a lot of factors that will influence how quick the penetration goes. So far, we're very satisfied with the market penetration rate. It's even been slightly above our expectations.
Thanks for that. The next one, I mean, I understand you build working capital, given the substantial sales growth, and I appreciate the few words there, Håkan. It looks a bit high to me, at least. Anything in particular other than receivables you would want to mention here, or we should think of?
Again, Matthias, when if you look at the balance sheets, you see major movements only in two areas. One is inventory, and that for us is an important somehow way also to make sure that we have the ability to meet the growth and the volatility in growth. So it's a natural reason why we have been working actively to ensure safety stocks and levels, et cetera, in raw materials to remain with a certain flexibility. Then somehow, it is primarily related to the increase in trade receivables. Again, we're happy to report a strong growth and to report a strong growth to customers in a business kind of business nature that represents a very low credit risk.
Again, Matthias, this is cash flow, and payments will come. This is purely an impact of timing.
Good. Thank you. Last one, sorry if I missed this, but did you say that you expect to hold potential CMD before the turn of the year, like during the autumn?
Yes. Yes. We plan a Capital Markets Day before the end of this year, so it's gonna be sometimes during the autumn, most likely end of October or beginning of November. Just a comment, again, also on the trade receivables. I think we should recognize that in the business we are in with contracts on hospital systems, the number of trade losses is incredibly low. These are customers that even though sometimes they're a bit slow to pay, there is almost always an ability and willingness to eventually pay. We're dealing with private hospitals and public hospitals in the US. It's not the same issues that the general industry saw in Southern Italy and in Greece a couple of years ago.
Okay. Appreciate all the answers. Thank you very much.
Thank you, Mattias.
The next question comes from Mattias Vadsten from SEB. Please go ahead. There are no more questions at this time. I hand the conference back to the speakers for any closing comments.
Well, thank you, everyone. Appreciate that you took the time. I know some of you are already on vacation, thank you for taking time to listen to our presentation. Right now, it's full rain in Lund, I hope that all of you, wherever you are, have sunshine and have a great vacation. Thank you for listening, we look forward to stay in contact with you all. Take care. All the best. Bye-bye.