Elekta AB Aktie

So welcome, everyone, to Elekta's Capital Markets Day 2026. Welcome you here in Stockholm at [ Madison Square ] and also welcome all of you online. My name is Peter Nyquist, and I'm Head of Investor Relations since about 2 years now. So the big picture, we're going to have 3 hours of presentations. We will end with a 45-minute Q&A. And hopefully, around 3:00, we will have a break for coffee and refreshments. So that's the setup. I will go into more details later on.

But let me start with some reflections. Talking to both sell side and buy side over the last month and weeks, there are 3 areas that we hopefully will cover today that comes in mind. One is around products, one is really around growth in regions and competition. And the third one is about financial performance. So if I sort of comment each of them, if you talk about products, question we'll get a lot is Elekta competitive enough in radiotherapy to stay in the forefront, both when it comes to software as well as hardware. Hopefully, today, our CEO, our Chief Technology Officer as well as our regional managers will be able to answer that question, the uniqueness with the offering we have today, but even more important, we will spend quite a lot of time on the innovation we have coming up in the coming months and years.

The other thing that is discussed, and you probably know that as well, is growth and competition in regions. And basically, highlighting 3 regions, clearly important for Elekta, it's U.S. and that is about the success of Evo. What has happened to the reimbursement system in the U.S. How is that going to support you going forward?

The other one is around China, really, as Elekta is the market leader, how will Elekta stay market leader in China going forward? And how will Elekta be able to leverage from the recovery in the marketplace? And finally, Europe, a few years of successful launch of Evo, how will that stay? How will continue to embark on that in the coming years? We have our regional manager today presenting topics and answer those questions how we will be tactful to keep our leading position in China. And also grow in the U.S. and continue to grow in China.

The last part is around earnings and financial performance. And lately here, especially after Q4, a lot of questions received is the only way for Elekta to improve its earnings by cutting costs. And hopefully then, our new CFO Klara Eiritz, will be able to present to you. It's not only by cutting costs that we will be able to deliver on our 14% to 16% EBIT margin target that we have '28, '29 presented today, that we will be able -- it will also be product mix, launches, price improvements that will carry Elekta up to those margins.

So let's look at the agenda. We will start then with Jakob, talking about the strategy for about 20 minutes and targets. And then Christopher will spend quite a lot of time on products. So we will have a long session about that. That's extremely important. We will have a break for 15 minutes. And then we will go into the next section, which start with markets. We will have Arnaud who is heading up Europe, who'll talk about Europe, and then we have Ardie also here talking about U.S. in particular, but heading up regional Americas.

And Anming, we will have on a video prerecorded for this event. Then Klara will close the loop by talking about the numbers and the financial targets that we have. And then a short conclusion -- concluding remarks from Jakob, and then we have 45 minutes for Q&A.

But before we start, I would like to remind you that some of the presentations here contain forward-looking statements. That could include revenue, operating results, products and product developments. These statements involves risks and uncertainties that may cause actual results differ material from those set up in today's presentations.

With that said, I would like to introduce our first speaker, our CEO, Jakob Just-Bomholt. Jakob joined Elekta in August last year. Before joining Elekta, he was the CEO for 3Shape, a Danish medtech company. And before that, he had numerous leadership roles within Maersk. So please take up, the stage is yours.

[Presentation]

So warm welcome today's CMD day in a very warm room, also to the online participants. Over the last 12 months, we have been very clear, I believe, in saying that Elekta, we are not trading at our full potential. That clearly calls for actions. You want to get back to full potential. And what we will outline to you today is really what is the ongoing execution momentum. It's a realistic assessment of our competitive position in Elekta in the market. But then most importantly, what is the plan to correct our shortcomings and propel the company going forward. So we have been very much looking forward to today, and we are ready. We know what to do.

If we look at Elekta, and I think it's important to understand the Elekta case, we have been in precision radiotherapy for more than 50 years. What we do is really hard. It started with the Leksell Gamma Knife that is still the gold standard for treating the brain and is a best-selling product within brain treatment around the world. But today, of course, we are much more than that. We have presence globally. We have an installed base that continues to grow year by year, now more than 7,500 units internal, external beams. And very importantly for us, we see more than 2 million patients, and that number grows every month. We are being treated on our equipment, of course, not as treating, but we enable clinicians to treat. So that really ties into also our overall purpose of setting the standard of care to really bring hope to patients and you have all been touched by cancer.

So what we do is also important from an industrial perspective because look at the graph here, the cancer burden is increasing. You all know that. The biggest risk factor of cancer is age. And we are aging and the population is growing, which means that there is an underlying growing demand for cancer treatments. And then at the same time, there is a shortage of skilled professionals. We actually see that trend accelerating. And that puts a positive pressure on us as a vendor to innovate, innovate for precision and innovate for productivity, and Christopher, you'll come back to it.

Then to the right, you see that precision radiotherapy is really relevant for just about 50% of patient cases. We estimate that 40% of all cancer patients are treated with radiotherapy. But look at the budget, it's 10%. So that really gives you an idea that from both a clinical outcome, but also from a cost ratio is a highly efficient way of treating patients. And that's why we say that even though in certain markets, you'll talk about reimbursement challenge we have in the U.S., favorable for us actually, we have certain challenges in certain markets, but fundamentally, there is a tailwind because it's an attractive way from health care systems to treat patients.

So that's where we are on an industry. If we then translate that into numbers for radiotherapy, this is our view of the industry. The way that I think about it is a niche market, but a very large niche market. within medtech, roughly internal, external beams, including software, including service, USD 7 billion. And when you look at the market, say a bit more than 50% is associated with the upfront purchase of equipment and corresponding software and a little bit less on software upgrades, cloud-based Software-as-a-Service and then, of course, the technical service to sustain the equipment over a 10-, 15-year lifetime. So it is, if you will, a razor-and-blade model that should lend itself to predictive revenue.

Then over the years, we have seen inflection points from a technology perspective within radiotherapy. We have seen the image-guided radiotherapy, so we can actually see what we shoot at, and now we move into an era of adaptive radiotherapy. And I just want to pause a little bit to explain what is that really about? So with better imaging, you can really see better the tumor. And with that better precision then you have increased confidence in escalating the dose. But if it takes a lot of time, it's not going to help you. So we see combined also that we can do a replan with the patient on the table faster and faster.

And when you add those 2 things together, better precision and faster replanning, you really get into hypofractionation at scale, not just for the top end clinics, but for many -- and with scaling hypofractionation clinics, hospital systems can treat more patients because you can go from potentially 30 fractions to 5. We then show an example of 2 fractions treating prostate that's good for the return on the investment for customers, and it's obviously good for U.S. as patients. So there is a lot of innovation to be harvested, and that's why we will continue to sustain a strong investment profile in R&D and fundamentally good news for a company like Elekta.

But then how are we positioned as a company. We are positioned very well. As I said, the starting point of Elekta is really that we were born for precision radiotherapy. So our ambition is to have the world where everyone has access to best possible cancer care. We will do our part by making the equipment available around the world. Then obviously, our ambition is to lead within precision radiotherapy -- we are very clear eyed on where we play.

I'll show you our portfolio logic, but it's within linacs, it's within brachy, it's within neuro. We have the market leadership positions to sustain it. And then you can ask yourself, okay, why Elekta, why are you going to win versus our competition? As I said, from day 1, we were just built for precision radiotherapy. And what we do is hard. When I talk to the engineers, I get deeply, deeply impressed by many years of experience. Then we also pure-play radiotherapy. I worked in a conglomerate Maersk. It comes with many benefits, but I tell you, it's also many drags. And that's why we have reorganized to be fast, noncorporate, passionate about the products we innovate.

Then very importantly, particularly in an era of adaptive, we have that Integrated system of hardware and software and Christopher, you'll outline why is that integration increasingly important with adaptive combined with services. Then we have chosen positions of innovation leadership, clearly on our brachy and neuro product categories, but also within adaptive within motion management within the imaging. So we do select plays where we believe we lead ahead of competition. And then we have global scale. By the way, also super important when you service your equipment to have that network density. And I'll get back to strategic priorities and our midterm targets, okay?

If you then look at the company, and I think it's important when we outline our product innovation strategy, it's actually a very well-defined product portfolio. So it's CT-Linacs. Within that, we have essentially now tailored it to 6 subproduct categories, but CT-Linacs and we have MR-Linac, our MR-guided linac accelerator, then we have our Brachy business, and then we have our one neuro business, and it's all combined with the Elekta ONE software suite, where we are increasingly working on unifying and integrating all products under the same software architecture.

If you then look at our competitive position, it actually has a very attractive profile. So within neuro, we are clear #1, clear, clear. Within Brachy, equally clear #1 in both those 2 product categories, more than half of the global market. Then MR-Linac, you can argue it's easy to be #1 when you're the only one with the product, but it's still #1, and it's actually quite a good way of entering hospital systems and then make our CT-Linacs available because we are the only shop in town, if you will. And then we have a clear #2, but challenger position within CT-Linacs and correspondingly within our both planning software and oncology informatics system. You'll recognize, to your right, the industry size of roughly that $7 billion. And that translates into as an installed base, not annual, installed base 18,000 units of external beams. So that's how we look at the industry.

If we then look at where are we today, as I started out by saying we're not at full potential. I can argue, is it an improvement plan or turnaround? I believe it's a turnaround. And we have been going through a reset and stabilize phase, as we call it. And what has that really been about? Well, it's been about simplifying, decentralizing the organizational structure to give you example, half a year ago, we were roughly 4,600 colleagues. We're now 4,000. That was not a goal in itself. The goal was really to accelerate the speed by which we innovate and service our customers. We said then that with that simplification of the organizational structure, we need fewer people, and we will continue to optimize our processes, but that will correspond to a saving of more than SEK 500 million. You'll give, Klara, an update on where are we in Q4 versus what we consider our baseline in Q2.

We have strengthened leadership team. If we look at the Executive Committee, there's been quite a lot of change within executive management. But when you say you're not performing at full potential, change needs to start at the top, and I feel very good about the people we have brought on board and we'll bring now a COO to drive operational excellence within Elekta starting 1st of August. And then we have talked a lot about the culture, more performance, a better say-do ratio and then certainly also hardwire that in incentives. So bonuses are now at risk.

I like to see leaders also with skin in the game. And it really should underpin that we need alignment with our shareholders to drive the company forward. But we are now in a second phase, improved profitability. And what is important for you to understand is we really built the foundation for innovation-driven growth, but it has to be done from a strong foundation. So we have taken choices. What are we innovating for? What is our innovation highway and what are we not going to do? It's generally been with a commercial lens, what is important for our customers, what deliver return on investment, what delivers productivity and what delivers good clinical outcome.

Then we are going to release products. And Christopher, you'll share. I'm excited to see your presentation here. And then absolutely on commercial execution, and you'll have 2 of our regional heads, Europe, U.S. here presenting on stage and from China. And then we worked a lot on our pricing framework. So we ensure that the orders we get it are profitable today and tomorrow, and then we continue to work on our COGS to expand the gross margin.

But we are really keen on moving from improved profitability into innovation-driven growth because that's, at the end of the day, what is going to deliver the full potential of Elekta that is to grow at or above the market. So we will continue to invest in R&D. As I said, roughly the way you should think about it 10%. We will continue to have a mindset of continuous release of products, not big banks, but continue. And we believe it's great for customers to buy with Elekta and then during the lifetime on the equipment, be able to upgrade. We have very strong ambitions. And I would also say proof points that we can grow above market in the U.S., we have to because we are now 20% of revenue from U.S. should be significantly higher.

And then the operational excellence will absolutely be a muscle we can stimulate a bit more. And then as we grow, we will still be a little bit tight on OpEx to see some of it invested in growth, but also some of it supporting our midterm EBIT guidance.

Then we have 4 must-win battles that really guides the organization that reflects also the phases we are on. The first, simplify, empower, speed. I just want to remind you, it's been a big reset. I think it's been great. Dust is still settling in. Everyone got -- many got new reporting lines. But essentially, what we wanted to do is 2 things, maybe 3. One, reduced number of organizational layers from 9 to 6. I know it works because when you have fewer layers, you take faster decisions. Then we wanted to decentralize and empower both regions, but also our functions. I want people to take decisions. Don't want them to come and ask me [indiscernible] because what really needs to be a core strength for a company like Elekta, we are not that big, is to take fast decisions and take decisions very close to our customers.

And then it meant that a lot of managers were leading the organization. So we have more doers and fewer checkers checking the checkers, if you will. But we feel very good about where we are, and you'll show some financial outcome. But the most important thing here was to increase velocity, make us run faster.

Then we talk focused innovation. You'll get more color, Christopher, but it's really in a company like Elekta, we have to be clear on what is important for our customers and then we innovate and then we continue to invest to support that direction. We have a strong market-leading position in China, roughly 40% market share. Of course, we want to defend that and then grow with the market. And then as I said, we are underrepresented in U.S. So we see U.S. as a growth market for Elekta.

And then lastly, on continuous COGS reduction, I would say we have potential to work closely with our vendors, do continuous upgrade to make sure we are on the latest tech stack and continue to see a bit [ IKEA ] model always to get your cost a little bit lower next year than this year, right? So that's the path we are on.

That then translate when we put it all together and we look at our order backlog, we look at the activities into a guidance for this fiscal year of revenue growth in fixed currency at 2% to 4%. We feel good about that. And then an EBIT margin of 12.5% to 13.5%, we equally feel good about that range. Keep in mind, this assuming that capitalization is going to match amortization. I'll just make that point because it's a deviation from how we have done in the past.

So -- and if we look at our midterm target, we expect the company to grow mid-single digit. That is probably over the period, slightly below market. But mathematically, we will hit the market growth rate year 3. And I would say, personally, I struggle not beating our main competitors and grow with or above the market. But that is the plan we are ready to share with you today. And then on EBIT margin, 14% to 16% with the same assumption on capitalization and amortization and then translated into a free cash flow of roughly 10%. And if you do the math going forward on revenue, it should lend to a free cash flow before dividend of SEK 2 billion. So a significant increase. And we were happy last year we saw net debt come down, and we'll probably continue to see that trend going forward.

Then as I said, mathematically speaking, with the mid-single-digit growth rate and the guidance of 2% to 4%, we will see an accelerated growth through the 3-year period. So what underpins that growth? Absolutely, first and foremost, product releases, right? We have medtech, it all starts and ends with products, but then absolutely also with commercial execution. So we'll see our expansion in U.S., but let's not forget the other markets, and that's why they're here today. Then we can double-click further on software and service expansion. But given the margin profile, it's very important we continue the trajectory on software sale and service sale.

And then lastly, it's important when you look at radiotherapy overall, while mature in Western Europe and the U.S., there's a huge unmet need elsewhere, and that translates into greenfield expansion in a number of markets. And of course, we want to capture that, and that also underpins the 6% growth that I started the presentation with.

And then just to double-click on Service and Software, as I said, it has an attractive margin profile. Service contracts are typically attached either at point of sale upon expiry of the warranty. And in many markets, I wouldn't say customers are captive, but there is a strong preference, of course, for service from vendors. In other more creative emerging markets, we are looking at how can we embed service stronger into our software offering.

And then on the actual software, we are rolling out performance planning. On our planning software, we'll continue to accelerate our Software-as-a Service. That's really our cloud-based OIS software. And then very importantly, we use software to really integrate workflows, which is a very significant demand from our customers, fewer clicks, faster productivity.

So what I would like to leave you with from my short introduction is I personally think the radiotherapy has all the ingredients to be and is an attractive industry segment. We have a strong position. We are market-leading in number, #2 in others, and that's it. And we have a focused product portfolio. We are not at full potential, hugely unsatisfactory to say. I hope I'm not going to use the same words in a couple of years.

And we will execute our turnaround in 3 phases. We give and take, believe we are in the middle of that phase. We will continue to see sales growth. Sales growth will be accelerated through the 3-year period, and that then translate into midterm EBIT targets of 14% to 16% and a corresponding significant uplift in our free cash flow.

Yes. Thanks for your attention.

Thank you, Jakob. Thank you. So the next speaker, been mentioned quite a lot by Jakob, so big expectations, and I'm sure you will deliver, is our Chief Product and Technology Officer, Christopher Busch. He's been with Elekta since 2023. Before that, he had senior R&D roles in Philips. And he will lay out the, among other things, the innovation pipeline that will support our future growth. So please, Christopher.

Thanks, Peter. So hello, everybody. I want to show you in the next roughly 25 minutes the logic behind why we will be very competitive and also increasingly successful in the market in the next few years. And I stood here roughly 1 year ago and what we presented then was a little bit fuzzy. I think today, we will be very concrete, both with our guidance, but also with our upcoming releases.

So how is the logic of my talk going to be built up. It was mentioned already focused innovation. So we have focused on from different angles on what we do, how we do things and how we choose certain things to do, but also not to do. I'll start briefly with a look at our portfolio, how it was in the past and where we are as a present as a baseline and then go into some underlying industry trends that are driving where the market is going to go and then focus very concretely on our innovation agenda and what we are going to release and how we are going to do it.

Looking at the history, as was mentioned before, we started in 1960s with the Leksell Gamma Knife with the idea of having surgery in the brain without open incisions. So surgery without a knife. And it was possible in the brain, and we have been still very successful at this to this state to work on this. And please keep that kind of thought in mind because I will return to it because we are now at a point where we can bring the same promise to the overall body of a patient.

In the 2000s, we added imaging to the therapy treatment while the patient was in the room. So this is image-guided therapy. This is the synergy was a great success and revolutionize how people were looking at radiation therapy.

Then also it's somewhat later in the 2000s, we said now we can, with this confidence of better seeing what we are doing, and able to modulate the beam to shape it much more precisely about how the tumor was looking. And this is what we call volumetric modulated arc therapy, VMAT.

Now fast forward to the 2010, Elekta made a big bold decision to really go for the ultimate in image guidance, and that was or is the MR-Linac, where we combine an MR with a radiation therapy device, both for ultimate visibility of soft tissues, both cancer, but also organs at risk, but also enabling 3D -- real-time 3D motion management. And now we are at the point where we are bringing adaptive across our entire Linac portfolio, and we can do this now because there have been advances in software, in AI, in compute power, in imaging, and they all have come together, they're all coming together to make this possible to be scalable, not just for the academic centers, but for the broad application in the clinics.

Now this is a slide you have seen before. My point here is that increasingly, this is not a portfolio of individual products that are isolated and are developed in isolation. But increasingly, they are -- have a similar backbone, whether that's a workflow-driven backbone, whether it's a user experience backbone or whether it's just a software backbone. My focus will be today on the CT-Linacs, MR-Linac and our Elekta ONE software suite, but also these specifically on the software side of things, these topics are being applied into the brachy and into the neuro region.

And the most important product that we currently have and we focus on, and that is also going to be the core of what I will show you is the CT-Linac enabled through software-driven innovation. It's not a device story, it's a software device combination story.

So what are industry trends? And I will focus on 4. In the past, there was a choice clinics had to make. Are we going for high productivity, short treatment, standardized? Or are we going for personalization, complex treatments. And you had to go either way. Now with the advances of the technology, and we come back to that, this becomes not antagonistic anymore. You can have both. The margin of marry that you have to do if you want a productivity is less. It's not anymore as high as you had when you did in the past.

Come back. Number two, to do this, to achieve number one, you also need to make sure that there is no less safety efficiency and accessibility. And that requires a deep scale of integration of different technologies. You cannot look at them in isolation. You cannot look at the treatment planning software independent from the Linac, independent from the imaging, independent from the data storage.

As was mentioned by Jakob, this enables dose escalation, and that's a very important stepping stone to hypofractionation, and I'll talk also a little bit about ultra-hypofractionation because ultra-hypofractionation is nothing else than radiosurgery, bringing us back to the idea of the Gamma Knife.

And then lastly, I will talk a little bit about why clinicians and also now reimbursement tiers are going to favor the uptake of these complex treatments. But if they want to be taken up at scale, they need to be accessible and easy to use. They cannot come at the cost of a large number of extra staffing or at very complex treatments that nobody or very few people can actually partake.

So when you look at personalization productivity, if you look at the ultimate radiation therapy device for personalization, that used to be the MR-Linac. It has all the imaging. It has all the control of our dose. It has the real-time motion management. You can really see what you're doing while you're doing in 3D in motion. But this came at a price of reduced -- increased complexity and therefore, reduced productivity. You need a highly trained personnel, you need longer treatment session and therefore, the commercial value for this device was less pronounced.

On the right side, you see the Elekta CT-Linacs and the CT-Linacs have been optimized for a long time now to make many treatments in a short amount of time. So treatment sessions of 10, 11, 12 minutes and making sure that you get a high number of patients through. So they are building increasingly on simplicity. And now with technology, as I mentioned, AI, GPU power of the compute and enhanced imaging makes it possible that these things become enabling each other. And I'll show you examples of that.

So the goal where we are going, and that's industry-wide, is increasingly autonomous and often adaptive treatments that are still efficient. And we talk about this. You have to say you want to do this, but it cannot come at the price of either safety, efficiency or accessibility. So workflows that used to be done in weeks from first imaging of the patient in the simulator, doing or doing contouring segmentation and then later making a treatment plan and then depositing the dose in 30 fractions or so over a course of weeks to the patient now becomes compressed to minutes. And that's fantastic.

But of course, if you compress a lot of work steps into a few minutes, the risk of something going wrong, the risk of overseeing something is becoming increasingly larger. So you have to think about how can we make sure that all these work steps, and you see here on the right, the diagram about what needs to come together, how can we make sure that this is developed, tested, verified in a safe way. And that's also what we see when we look at regulatory bodies, specifically in the U.S., who tell us as vendors, it's great that you want to offer this to customers, but please show us, demonstrate to us that this is fail-safe, that the risk of something going wrong is very small.

And so we believe this requires deep co-development of these connected workspaces and also a shared integrated system architecture. And that makes when we talk about how we do innovation in Elekta that people are working on treatment planning software, people working on the Linacs, people working on the control systems, people working on the OIS, they need to work increasingly together. change of how we do things.

Now the third industry trend and it has been going on for years that what used to be 40 fractions became 30 fractions and 20 fractions. So fewer fractions with higher doses the trend towards hypofractionation. And where we are leading as Elekta is that now you see clinical studies. You see here the Hermes study, and you see here an ESTRO release from earlier this year, where we go to this ultra-hypofractionation, which we believe will enable breakthroughs and how productive linacs and specifically Unity can be.

What you see here is that people have now evidence that you can reduce the number of fractions for certain cohort of prostate cancer patients down to 2. And you can deposit that kind of amount of dose in 30 minutes and less. So what this means is that you can start treating prostate cancer in 2 fractions or 30 minutes in a total of 1 hour. And I'm not going to talk about sim-less size, simulation less treatment planning, but this is a breakthrough, both from a productivity perspective, but think about it from the perspective of a patient, think about it from the perspective -- commercial perspective of a hospital. And this is prostate and it will go to other organs as well.

So we believe this will lead in or is leading in an era of stereotactic body radiation therapy that is building on the original thought of the Leksell Gamma Knife, but bringing the same kind of principles now to the rest of the body because technology makes it possible. And Elekta is leading because to do -- to go this extreme, you really need the technology of an MR-guided system to be really confident and sure.

The last one I want to talk about before I move over to our own portfolio is we see significant shift in reimbursement. On the left, you see the U.S. where even as recent as the beginning of 2026, the U.S. reimbursement coding has been simplified to have tiers of simple, medium and highly complex treatments. And Ardie will talk a little bit more about it, but the reimbursement for simple treatments has gone significantly down while the complex treatments still have a very interesting billing structure.

What that means now is that we have a problem for small clinics with few highly trained professionals because to be staying in business, they need to move to highly complex treatments. But at the same time, they have the staffing they have, both the number of people, but also the education level. And that's the dilemma that we are helping them to resolve. And the clinicians who are forced or also want to go into this direction when asked about what's the most important thing that you need, it's motion management. Motion management, we have, of course, on the Unity and the MR-Linac, but we are now bringing it very shortly also to the CT-Linac.

So let me switch gears. That was the background why we are doing what we are doing. But now focusing on what we are actually doing. So first, what are we spending? And here, you see an overall gross R&D spend as a percentage of revenue developing over the last few years. And you see that we are committing ourselves as Jakob was already also showing to a 10% R&D spend over sales. We believe this is above medtech average and is also at the right level to ensure that we have enough innovation funnel to drive a market-leading position. And I'm in my role, of course, Chief and Product Technology Officer, always trying to say, let's make sure that we invest enough, but this, I believe, is enough.

And why do we believe this? And you see focus on 6 or 5 different topics over the last few years. So we didn't start just a few months ago. This has been going on for some time. First of all, we have focused the share of our most important investments on core products. So saying what are the top 3, 4 products that we absolutely want to be leading in that we need to be cutting edge, that means that we shifted resources towards these vital few.

We also looked at what are the real top requirements from our customers. Not what we hear is nice and it's great, but what is really driving our customers' overall performance. And that can be clinical, but also very often, it's nonclinical. It's about how easy can I service a Linac? How easy is it to upgrade my software? How fast is it for me to have a service that is proactive instead of reactive, all these kind of things.

What we have also been doing, we have taken some tough decision saying we have to have more focus also in the number of our development sites. So smaller sites, we decided to maybe not continue there, but co-locate people, bring them together also in view of having to have to work closer together across different products and therefore, not only get people closer together, training them, upskilling them, making them sure that they have the right competencies, forward-looking with data science, AI next to the core of mechanical and electrical engineering. And overall, we have also done steps for process simplification. Looking at this company of the size of Elekta, we might have had a few processes that were a little bit over the top, also make it easier to innovate faster.

We shifted innovation also to cost innovation, taking out costs in our bill of materials, but also the cost to serve. And we have been, for the last few years, also shifting resources and capabilities towards software development because without the software, the device will not be up to date anymore.

So I want to go into 4 different areas now very concretely. So this is now a switch to the Elekta portfolio as it is and will be very soon. Starting with CT-Linacs. I said, this is the highest priority for us right now. I will also share some exciting developments in the Unity in the MR-Linac space. I already alluded to that we can do now much more efficient treatments with the Unity. A key enabler for that is treatment planning, both in online adaptive, making it fast, but also as a stand-alone departmental software solution. And of course, oncology information system is a data backbone for the oncology departments, and we are upgrading our offer there as well.

So the CT-Linac. What you see on the left, driven by increasingly adaptive treatments, now motion management, come back to that and important for us to be able to offer this as an upgrade option to our installed base that people can do this in a gradual way without having to throw out the old linac when it's not necessary because of old age and continue to work with what they have and build on that. So what we have already today is our online adaptive, Evo. And we already have the AI supported what we call Iris, which is the brand name for our next generation of imaging algorithms for pelvis.

So what's coming in, in the next 12 months? And these are all for me, part of one big launch phase or wave, maybe you should call it wave. First of all, on the top row, you see 2 imaging-related ones. First one, next-generation AI, Iris, second one, real-time motion management, which is really something new. And below, you see C and D, which are workflow related. Integrated console, a software package that will make or is making workflows in the therapy room much smoother, less clicks, fewer clicks. And we are also releasing a new integrated table with 6D versatility that will go hand in hand and therefore, this line with the integrated console.

And let me double-click very quickly on each of those 4. Iris. We have released Iris for Pelvis some time ago, and we are deploying it. That's why I call it scaling to our installed base and upgrading or selling new Evos with this functionality. What is now new is head & neck and brain, also very important body side for radiation therapy, which benefit now from the increased image quality of Iris.

But next to that, and therefore, not so easy to show in the nice pictures that we are also increasing the imaging frame rates, roughly doubling them, a little bit less than double. That's important for image acquisition speed. And we're enhancing the quality of these cone-beam CT to a level that you can directly use and import these images in the treatment planning. And that's a little bit more technical, something called Hounsfield units where you need to have electron density that are accurate enough to be able to be used for the dose absorption calculations.

It's really exciting. And this is, of course, only the beginning of what will come because we are looking at motion management, artifact metal artifact reduction, gas bubble artifact reduction and so forth. This is a very interesting road map, also an upgradable road map for the coming, I would say, 5 years at least.

This one, I am personally really excited about. With Unity, we brought 3D real-time motion management to the RT space. And what is now happening that we are enabling in a different approach because it's not MR, it's CT, the same concept to be applied also on CT-Linacs. So what is it? It's real-time 3D tracking of internal organ motion. So not looking at the patient from the outside and seeing that the patient is breathing and then trying to say, okay, what's happening inside the patient, but directly tracking of what's happening inside the patient using existing x-ray kilovolt cone-beam CT imaging infrastructure.

So no need for new hardware. You can use what you already have. And that makes it different from some competitors who are adding extra x-ray beams to the patient's room, but that means modification, very expensive and also, of course, something that, yes, it's very expensive for people to do. This is a software-driven innovation. This is going to be available to our existing installed base.

We have chosen prostate cancer as the first release application. Motion management is very specific. motion of a prostate is different from the breathing motion of a thorax. It's different from the motion of a pancreas. So we have to be body site specific, prostate or first release, others will follow. This is a key enabler for the reimbursement options that I was referring to earlier and that Ardie will also talk about a little bit later.

This is going to enable with existing equipment on the device side, our customers in an easy -- rather easy way, and you see this diagram on the right, this is the user experience, and this looks very similar to what we have introduced to comprehensive -- in comprehensive motion management to our Unity as well. So you see also convergence of user experience. And this is a foundation for a new innovation path on real-time motion management in CT-Linac that we are the first to introduce.

Okay. Let's switch over to the integrated console, so more to the workflow inside the therapy delivery. Integrated console is a software application. You see here a screenshot of one of these integrated console interfaces. And what it does, it is guiding the workflow, helping the technologists, where are we, why I'm in the workflow, what's my next step? It has integrated imaging tools that -- where you don't have to change between different screens, which is image acquisition, the registration of the image and then later the review of the images.

Obviously, this has a large viewing area, as you can see. And it also enables continuous system monitoring, the quality assurance of the system. Is my linac up and running and performing in the right way. And it has interactive communication tools. This has been CE approved already for our Harmony linac. And it's a pleasure to say that we have been starting to treat or actually our customers, first pilot site has started to treat customers with -- started to treat patients with this solution as we speak. So this is not future. We are piloting it on the Harmony. We are going to learn from what is going to come from it, feedback, how can we tweak it, make it better.

And then we will have a broad release on the Evo next calendar year, and that will go in conjunction with the integrated 6D table because these innovations best go hand in hand. And what I'm not talking about here, but what is actually also very relevant that on the back end, we have a new and modern interoperability API, application programming interface that will make access to our linacs from third parties, whether that's surface-guided radiation therapy companies or others, more harmonized, easier, much in a modern and controlled way. So there's also an interoperability play that we're doing here.

6D table, let me be brief looking at time. As I mentioned, it is increasingly integrated with software, the integrated console, the integrated table hand-in-hand, higher, better ergonomics for patients. We have better modern user interfaces in the handheld controller for the technologists who do this every day many times. So for them, small improvements are really important. And this also has a value proposition of a quicker and more accurate patient positioning that's really relevant if you want to apply stereotactic radiation surgery or stereotactic body radiation therapy. These are the highly reimbursed kind of procedures that people are flowing towards.

CT-Linac. Now let me go into a little bit more detail on the Unity. Unity has been around for roughly 6 years. And we are now introducing a new package called Unity Pro, which is going to be a step change in MR-Linac productivity and customer return on investment. What we already have today many enhanced MR imaging packages that are helping to make better pictures faster. We have introduced comprehensive motion management, making it easier to gate and to make sure that motion in the body is being monitored and then also managed.

What's now coming up is, on one hand, what we call visual guidance, which is a breathing feedback loop for patients to give them help how deep do I have to breathe in, do I have to hold my breath, makes it easier, increases the productivity of treatments because patients are more compliant.

And on the right, AI-enhanced automation tools, MR-based auto segmentation, GPU-enabled dose planning and some enhanced tooling. But what this enhances is that on the left side, you see that the typical treatment time on a linac with Unity was roughly 45 minutes, sometimes 50 minutes. But basically, the hospital had to plan for 1 hour per patient. With this, we can predictably go for bladder and prostate cancer patients, not all, but for these 2 treatment slots of 30 minutes. That makes 2 patients an hour. And for hospitals who are looking at productivity and the number of patients they can treat per day per year, this is doubling the business case, and Ardie will talk about this a little bit more.

But what is also happening next to the productivity that roughly 6 years after we introduced Unity, we are now also seeing clinical evidence of efficacy superiority coming in highly profiled trials to the market. On the left, you see a study called UNITED, which was recently published in the Lancet Oncology, so the highest profile oncology journal that there is that basically says with MR-guided adaptive radiation therapy, you can reduce the size of the volume you radiate in the brain for aggressive glioblastoma patients by 40%.

And coming back to Mr. Leksell's idea, the brain is very sensitive. So you want to radiate only very precisely the tumor 40% less means significant reduction of side effects and side effects in the brain mean severe mental and intellectual deterioration. And at the same time, survival rates stay the same.

On the right is another one, very different application, where also now it becomes evidenced, not hypothesis, but evidence-based that if you have prostate cancer and you want to avoid erectile dysfunction side effects that with this technology, very precise radiation, you can reduce the amount of erectile dysfunctions by roughly a factor of 2. Again, not a 5% or so, it's a factor of 2 reduction. So significant advances.

And we have other examples where we look at pancreatic cancer, Memorial Sloan has recently published an article where they said in their first studies, they show that the 2-year survival rate for pancreatic cancer very difficult to treat, has gone up. The 2-year survival rate has doubled. Again, a factor of 2, not a 5% or 10% increase. So this evidence will make this attractiveness for this kind of treatment significantly higher. At the same time, the productivity, so the complexity that you have to -- the cost of complexity is becoming manageable with 30-minute treatment slots. So there, we believe that we're really entering with Unity Pro, a second generation, a second phase of our MR-Linac product.

I will be very brief in this one. Treatment planning is an example where Elekta was not cutting edge a few years ago. But with Elekta ONE Planning, we are there right now in a very competitive situation with any competitor that there is of today. You see evidence here with talk about 10x improvement in GPU speed, but we're also putting a lot of effort to making it easy for our customers to upgrade. And here, you see a reduction of the upgrade time from 4 hours to 30 minutes. This is important because these 4 hours or 30 minutes is the time that our customers lose in productivity in the clinic.

We have upcoming releases for remote collaboration. In online adaptive, the doctor has to approve plans more frequently than in the past and the doctor does not -- cannot come to the treatment room all the time. Therefore, we make it easier from remote to not only do the plan review, but do an approval that is also then used for billing. So it's documented. And we introduced performance planning, which is our entry point for people who say, we don't have the full -- we don't need the full range of what Elekta ONE Planning can do, but we want to do the hard core increase in the planning speed that is shown here with 10x.

So we are very bullish about this and also because this is not a stand-alone software offering, which it can be. But when you talk about online adaptive, this is the software that's driving the brain of the online adaptivity while the patient is in the treatment room.

The last slide I want to show is our Elekta Oncology information system. We have a large installed base. It has been around for a long time, and we have gotten a lot of feedback and getting a lot of feedback from customers saying, you need to make sure that this stays up to date and it feels a little bit dated. So we are putting a lot of effort right now into performance enhancement where we say we reduce software latency, we make the scalability to very large centers that have 20 years of data from patients. And we also, of course, invest in continuous future enhancement like compatibility and integration with online adaptive.

Workflow, we are integrating now very focused our different offerings in Elekta ONE to make it faster, more automated, fewer clicks. We are working on better interoperability with third parties, for example, EMR providers, and I mentioned already the improved planning to treatment.

And under the hood, which is not visible to our customers yet, we are working very diligently to make sure that we have an updated technology stack that fit for future. Also here, lower installation efforts, but also providing the foundation for scalable Software-as-a-Service delivery moving forward. And I think Arnaud and Ardie will talk a little bit how important that is for also our money monetization with Software-as-a-Service models. We have now semiannual releases, so twice releases. We have 6 -- we have had 6 releases over the 3 years, and it's a continuous improvement effort. So here, there is still work in progress, but there is a significant improvement of what we can offer to our customers.

So the 3 points I want you to take away. We have a commitment to spend 10% of R&D -- of our revenues in R&D. and this is appropriate to make sure that we have a market-leading portfolio. We also look at our focused innovation agenda and also look at more what is most important to our customers. And as we speak today, the most important, the #1 repriority of our customers is increased productivity without losing access to complex treatments. And this, we are committed to have a predictable and fast release cadence with upgradability, and we have shown you a few of these highly impactful releases that are coming in the next 6 to 12 months. So this is not -- that's not '24, '48 kind of outlook. These are committed road maps that we will deliver on very soon.

And with that, I hand back to Peter.

Thank you, Christopher. So we are coming to the first break. A few things. Online, you can post your questions. I think it's on the right top corner for the Q&A that we're going to end the CMD with, so you can start doing that already now. So the time is now approximately 3:00. So I expect everyone to be back in their seats at quarter past 3, and that goes as well for you online. Then we'll start the next session, which is about the market areas and then ending with financial. So welcome back in 15 minutes.

[Break]

Great, and welcome back both here in Stockholm as well as online. Some remarks break. I'll start seeing that we are posting questions online. That's perfect. It would be great if you do it in English, that will help you in the Q&A to start with, but that's great. So we're moving now from product into market areas. And we're going to start with Europe and then Americas and then China.

So the first one out is Arnaud Delhaye, who is heading up Europe since 2025. Before that, he have had different senior positions within Medtronic and Johnson & Johnson. And Arnaud will talk a lot about the success we have had with Evo, but also how that actually can convey into further growth for the coming years. So please, Arnaud.

Good afternoon. I'm really happy to be here and be the first regional leader to speak about Europe, the region we are in. So Europe is a very dynamic market in radiotherapy. And for Elekta, it's a strategic region. And I'm going to share with you why both it's a strategic market and it's very important for Elekta.

Starting with the market size. Europe represents roughly 25% to 30% of the overall global value of the market. And interestingly, it's 1/4 of the installed base, which is not necessarily always the case in the large medtech organizations. This is due to a few factors. The first one is radiotherapy is seen as a cost-effective and well-reimbursed treatment modality by the market. It's well supported by public health care systems, even if there are, of course, some challenge like any public health care systems, but it's pretty stable, it's growing and it's dynamic.

The second aspect of the market is its appetite for new technology. As you -- as we all know, we launched Evo first in Europe. I'm going to share with you how we are doing. So the market is -- the barriers to enter the market are there, but they are not as tough as they can be in other part of the world. So it's a good platform to launch a new technology.

The third element of our market in Europe is its geographical mix between Western Europe, which is a mid-single-digit market growth, mostly driven by a replacement cycle and the Eastern part of the European region, where we see double-digit growth potential, mostly linked to capacity expansion, infrastructure investment in the market. So in summary, if we dezoom a little bit on the market, the market is stable, is growing and is a technology-driven market.

Now turning to our performance in Europe. Over the last 5 years, we have seen consistent growth of Elekta in the market. And now Europe as a region weights for 32% of the overall performance. There are 3 -- it's a good growth, but it's not the ambition we've got. We believe that we can grow faster and more profitably in the region.

We have -- we are going to focus on 3 main commercial priorities in Europe. The first one is the upgrade. We want to capture the upgrade cycle. I will detail with you what's the opportunity in front of us in the next slide. That's the #1 priority. There is a replacement cycle in front of us for CT-Linacs that represents a major opportunity. And Evo is absolutely well positioned to capture this opportunity. The second one is to accelerate our growth in recurring revenue, notably service and software and software as a subscription model as SaaS. And the third one, we have to step up our ability to execute better. We are doing well, but we can do better, and we have to do better. So those 2 factors will -- those 3 priorities, sorry, will help us to keep growing in revenue, in market share and in profit.

So let's look at the biggest of our opportunity, which is the 1,000 linacs that are open for replacement. So as I shared, the market today is a market with around 3,900 linacs installed, well known. We know where they are. And as an average, the customer keeps the system 12.5 years before they think about replacing their system, their CT-linac. There are 1,000 linacs that have reached 12 years of age, between 12 and 17 years. 1000 in the market. So this represents a unique opportunity for us to position Evo as a replacement of choice for them as well with the adaptive option. So that's the biggest opportunity we've got.

The good news about it is that we know where they are. We know how they are going to make this acquisition via tenders or via direct procurement. And it's a sizable market that we can approach pretty simply for a commercial organization. That's the #1 opportunity we've got. And we believe that Evo has the best potential to capture this opportunity.

Now in parallel, we have seen a very interesting growth in our recurring business during the last 3 years. And today, we have increased by 5 points our recurring business. So the Service business and the Software business. The Service business, it's mostly linked to renewal of our installed base, new contract, simplification of our offering, price increase on our service contract. And the second one is the Software penetration that was linked to the Evo launch. So plus the new acceleration we've got in SaaS.

So it's one step. It's a very interesting base business for us because it's highly predictive in terms of revenue, 48%. We can do better. Jakob shared that it's 45% at group level. Here, it's 48%. So it's highly visible in revenue. It's high quality of margin and it's highly predictable. So no big surprise. It's a recurring business coming every year. So we believe that we can really create much more value coming from this source of business.

But all those 2 priorities, the replacement cycle and the increase in revenue generation from recurring business are strong priorities, critical priorities, but nothing will happen with a step-up in commercial execution. So we have reorganized the company. We have reorganized the regional region Europe commercial sales force. We have delayered the number of managers. We have reinvested in new salespeople, stronger talent, stronger salespeople who are here to hunt and capture market share.

So we are raising the bar in the sales organization, much more discipline as well in terms of pricing. We have simplified our portfolio. Today, the portfolio is much more leasable for the customer and for our teams with much more price discipline on average selling price. So we are raising our price in average selling price. We have as well a big mandate to increase our price when we renew the service contract every year. So we try to have this discipline of systematically renewing and avoiding multiyears of service every year. It captures a growth in terms of revenue and directly profit.

We have changed our order fulfillment organization. So when we sell a system, it takes time, of course, before we install the system and the system becomes clinically available. So we have analyzed all the steps that we can improve in terms of cost to serve, in terms of customer satisfaction. So we are trying to reduce the time to install, increase the customer satisfaction in this journey of installation.

And lastly, we have a big opportunity in terms of lifetime recurring revenue and revenue of an account. So every -- we are going to change the way we see our own account instead of going just to replace and invoice service contract. We take the account as a whole with an account team made of service team, order fulfillment team, application specialists and salespeople who are here to maximize the profitability of every account by upselling, upgrading, securing retention and maximizing the value per account for the company. So it's a question of volume, but it's more a question of profitability per account for us.

So with all those priorities, so this replacement cycle, the recurring revenue from Service and SaaS and with this uptake in commercial excellence, commercial execution, we are going to -- we have an ambition to on the base of the 8%, we had a very strong year last year, 8%. So this is the effect of Evo launch in Europe, 70% of our placement and the uptake in software. We have delivered this strong performance, and we believe that we can deliver a strong single-digit growth over the next 3 years. Europe will remain a core contributor of the company. And with this reinforced discipline, the performance can offer us potentially upside. Thank you.

Thank you, Arnaud. Thank you. So moving from a region, which has delivered well on the launch of Evo, moving to a region where you have a great potential based on the launch of Evo. We will have our Head of Americas, Ardie Ermers. He started in the company in 2022 as Head of Europe, and then he moved to U.S. and heading up that organization. And before that, Ardie had a few senior positions in Philips and spent quite a lot of time during that period in U.S. So he has that background. Again, so he will talk about the turnaround, how we regain our position in the U.S. through product launches.

Thank you, Peter. Good afternoon. So after winning in Europe, now we have to win in the U.S., one of the biggest markets for radiotherapy. And I'm going to explain how we're going to do that. First of all, let's talk about the market. A lot of this is known. But as you saw in the graph, 25% of the installed base, but 35% of the value. This means high profitable business. So it's really important for Elekta to perform in this marketplace. This is where you get maximum value for the solutions that you offer.

If you characterize the market, it's a replacement market. You don't see a lot of greenfield new hospitals being built. It really is about holding on to your installed base and making sure you have competitive flips. The other characteristic of this market, and you've seen this over the years, it's really been driven by paper fraction, which is really counterintuitive of what we are developing in this space. More fractions means more payment. That's not good for the patients.

You can imagine if you're a patient, then you have to go to the hospital 30 times to get treated. When you know that there are better solutions out there where you can get treated in 5 fractions or like Christopher said, maybe even 2. So this is our goal to make sure that, that becomes accessible in the marketplace.

Also in the U.S., you see a steady decline of the number of fractions, and you wonder what's behind this. And you see some of the more academic-based institutions going to SBRT treatments. In some cases, 30% to 35% is SBRT. Now these are complex treatments, and they are very sophisticated. So you have a lot of people that need to be in the room in order to perform these procedures. That's a barrier to get access to adaptive therapy in the rest of the market. So the goal for Elekta is to make this very simple so that you don't have to be at NYU or Sloan Kettering or MD Anderson to perform these kind of treatments.

And then last but not least, you've heard about the reimbursement challenge. ESTRO even published on it and said, we have to focus on improving the reimbursement for radiotherapy. The conventional treatment IMRT method is under pressure, which actually creates a great opportunity for us at Elekta. And let me explain to you why. Over the last 10 years, we've seen constant cutting and cutting on the reimbursement per fraction on IMRT. This year was really chaotic because they launched the new billing codes. They really reduced the complexity of the billing codes, but they also said there's another cut on IMRT.

Now what they did not cut is SBRT. And like I just explained to you, the movement of the market is towards SBRT treatments, treatment in 5 fractions or even less. And if you do this in the right way and you actually get the SBRT code and the adaptive plan built, there is an upside of $10,000 per patient. Think about that. If you go this route of adaptive radiotherapy, you will see a $10,000 improvement per patient. So this is a great opportunity for us because as a company, we have invested and committed to adaptive radiotherapy.

And to quote one of our key collaborators at Kettering Health, which is not an academic medical center, they basically said 2026 cuts brought to pain. And he said, Elekta brings the aspirin because we are helping to keep these customers viable and able to grow. So if you are in a community-based hospital or even a freestanding clinic, you will need to go to a solution that can do adaptive therapy. And this will trigger replacement of these linacs. So if you combine SBRT billing with adaptive workflows, you have a chance to survive. And guess what? This is the strength of Elekta.

But let me bring you back to last year, virtually out of Seattle, it was 3:00 a.m. for me, and I talked about hope and promise. We are not happy where we are in the U.S. As you can see, the percentage of our share in the company is way too low. We need to win in the U.S. And Jakob reminds me on a regular basis that, that needs to happen.

Now in brachy and neuro, we've actually held our own very well. We are leading in this space. We saw good growth in brachy and neuro. Remind you that it is a high profitable business, but our Achilles' heel has been the linac side. And as you saw today from Christopher, the commitment to address this portion of our business is rightfully there. And therefore, I'm going to talk about 3 commercial strategies to win in the U.S.

The first one is to commercialize Evo and Unity into this space of adaptive therapy. We've done it in Europe with proven results. We are doing it in the U.S., and I'll show you how we do that. The second piece is get the installed base growing again so that you can attach service because service agreements are very profitable for Elekta. But if you can increase your installed base, you also need to have a good attachment rate. I'm happy to report our attachment rate in the U.S. is over 95%. So if we grow our installed base, we attach good service agreements to those, and we will see obviously that profitable revenue coming in.

And last but not least, and this is the secret to the success of adaptive is to start combining this again with a world-class treatment planning solution. And that really is the proxy to go to Adaptive because if you're going to condense these workflows down to minutes, you need to make sure that the solutions that you have implemented in your department are world-class and you can trust. And that's our Elekta ONE Planning solution.

So let me unpack the first priority. We listen to our customers, and this is what they said. I would love to go to adaptive therapy. We see our friends at the academics do this, but I don't have the staff for it, and it takes way too long. The averages that we see is 35 to 40 minutes. I cannot afford to put my patient on the table for 35 to 40 minutes. This needs to go quick. So what has Elekta done? We've reduced this total workflow to 15 minutes, which fits in the standard treatment slot. So you don't have to make a sacrifice. You don't have to start planning for 3 treatment slots in order to do an adaptive case.

The second thing is it needs to be simple, autonomous. It needs to be intuitive. I cannot have 10 people in my treatment room. This needs to be done, and we've seen examples now in Europe with one physician and one physicist.

And last but not least, we call it adapt for a reason because in some cases, the tumor does not respond, so you don't need to adapt. So we have not created a black box. We have created a completely open architecture, adaptive workflow where you can decide if you want to adapt or not on the fly. That's really crucial because you don't know which patient is going to benefit when they're on the table. We call that Evo with Iris, and that's why we believe that we're going to start taking market share in this space.

The second portion is you've seen this over the years, MR-Linac has a great future. It is the stalwart of radiotherapy. You can actually see the tumor as the dose is being delivered. But also the feedback was, yes, but mainly academics use it. And the reason for that was because the treatments were complex and they were long. So what we heard from them is the investment profile of the Unity is not attractive for us. And while academics have found money to invest, we as integrated health networks, we feel the business case is not strong.

Now enter Unity Pro. We have now enabled 2 patients per hour, which means that the average amount of patients that are treated on the Unity go from 300 per year to 600 per year. That means that the return on investment of the Unity goes down to 13 months, almost equal to a linac. That opens up the door, and we start to see evidence that institutions like Providence and institutions like Orlando Health are starting to put unities in their flagship hospitals. Now that opens up a big market potential for us.

On top of that, marketing in this market is really -- marketing is really important in the U.S. market. If you can go to prostate cancer patients and say, come to my institution and I treat you in 2 times 30 minutes, that opens a lot of pool. Instead of them flying to New York or going to Houston, they will come to your local hospital and get treated for prostate cancer, which is the highest volume cancer in the U.S. and globally, actually.

And then last but not least, unlocking new treatment methods. In the past, you would not do liver or pancreas cancer on linac because you can't see. What we saw in our superiority studies is now you can actually treat pancreas and liver, which open up a complete new revenue stream for the hospitals. So the combination of investing in adaptive therapy on CT and MR unlocks a new market potential, and we're starting to see the evidence that this is working.

So by focusing on our installed base, last year, I talked about the aging of our installed base in the U.S. This is now a great opportunity for them to replace their older linacs and start upgrading to Evo. And we've seen the evidence that, that is happening.

Second question you asked us, is this really competitive? And we go up against our competitors, and we show them how we do adaptive versus what they show us, and we win hands down. What has that done for us? Last year, -- last year, we had a 30% solutions order growth in the U.S. based on this strategy. Double-digit Evo orders and twice as many Iris upgrades because Iris unlocks the imaging potential.

And then most importantly, again, starting to look at Varian flips, taking Varian linacs out and putting Evos in. So really nice that we are showing these results. As you know, first, you have to get the order, then you need to get the install. So we'll start seeing that pull-through in our revenue in this coming fiscal.

Second part of our strategy was to make sure that the installed base starts growing and start pulling through our service. These are obviously the key drivers for profitable growth. And we believe with a higher installed base, we also will see a better service revenue. On top of that, we've been able to drive better price increases. We obviously saw the inflationary pressures. but we've been able to get a higher price for our service agreements, also because this is very sophisticated technology. And our customers are starting to move away from in-house services and putting it back in the hands of Elekta.

And last but not least, Software as a Service. We've been able to really increase the value of our Software-as-a-Service contract. We move away from standard maintenance and service, and we moved into a SaaS agreement. And that really helped us boost the profitability of our SaaS -- our software business on the service side. And lastly, we talked about what is so secret or what is so special about your adaptive workflows.

The key of all this is the world-class TPS solution. We saw a 50% uptake of TPS in the marketplace. Why is that? Because now we have world-class workflows that are really, really fast and of high quality. We're the only one that has Monte Carlo-based dose planning, but now we can do it fast. And on top of that, it's very easy to install. So what's the commercial effect of attaching software to hardware? Obviously, you boost your margins.

And last but not least, once people are comfortable with TPS, they open the door to go to adaptive treatments. So the barrier to go to these complex treatments has been lowered tremendously with our software solutions.

So like I said, we are not happy with the position we are in, in the U.S. We've been eating our order book, and we needed to innovate on the CT-linac front. And as a result, we saw a 6% decline last year. But based on the fact that we saw a very strong order intake here that will translate to sales revenue, we expect a mid- to high single-digit revenue growth CAGR over the next 3 years.

So with that, I hand it back to you, Peter. Thank you so much.

So let's move to the last region, which is China. We have prerecorded a video from Anming, who's been heading up Region China since 2017, before being with Elekta for almost a decade. Before that, he had senior positions within Siemens. So he will bring us back to the market share, the leading market share that we have in Elekta in China and how we'll keep that, but also leverage from the recovery of the market. So you will see that on the video.

Hello, everyone. After the Americas and Europe, I will briefly talk about China. China is a large and relatively transparent market. We have a good visibility on volumes, competition and policy. At the same time, demand in China is driving quite differently than other radiotherapy markets.

I'll make 3 points, how the market is evolving, how we are positioned in this market and what this means for our priorities. Starting with the market. China represents around 10% of the global RT market in value. The market is now recovering. Before this, the anticorruption campaign reduced over volumes over the past 2 years and revenue followed with a delay. 2025 was a turning point. Based on updated data, we saw over 250 linacs sold. In 2026, we expect around 10% growth, reaching over 270 units.

There is still a clear unmet demand. Today, China has about 3,000 installed linacs. Based on the current instance, the need is closer to 5,000. What is changing now? How this demand is being unlocked. Model-based procurement is being rolled out more systematically with at least one round expected per product this year. It increased pricing pressure. but it allows more hospitals to adopt radiotherapy and create life cycle value over time. In parallel, reimbursement is also improving.

Pricing for key advanced applications like SBRT and VMAT has been increased. MR and CT adaptive radiotherapy are also included. This improves the financial return for hospitals. Growth is returning. At the same time, the market is becoming more competitive and life cycle value becomes more important. In China, we welcome local competition as it supports market development.

Elekta remains the clear #1 with around 40% market share by revenue. This reflects our strong market position, supported by our focus on the higher-value segments. So we entered this next phase from a position of strength despite recent market volatility. China remains a key market for Elekta. As the market recovers and the competition intensifies, our goal is clear. We will not only defend our leadership, we will strengthen it. We will do this through 3 key priorities: accelerating localization, strengthening our ecosystem partnerships to capture life cycle value and deliver a China tailored portfolio offer.

Let me walk you through this. First, localize R&D and manufacturing. What sets Elekta apart is that we are the most comprehensive radiotherapy player in China. from brand to body, from radiotherapy to brake therapy and from core treatment to digital management of radiation oncology departments. We offer hospitals everything they need to deliver high-quality cancer care in a sustainable way. We support this, we continue to deepen localization across our portfolio and across our supply chain. This includes frontline local manufacturing and a strong software R&D in China.

Second, life cycle value through partnerships. We have the largest installed base in China. Value goes beyond the initial system sale. It comes from upgrade, software and service with strength partnerships across the ecosystem. The work closely with leading medical centers to accelerate clinical adoption through collaboration, training and education. We also partner with local players, including pharm and to improve access, local service delivery and solution capabilities. As the market recovers, the value will increasingly come from life cycle management beyond the initial unit sales.

Third, China tailored portfolio offering. China has diverse and evolving clinical needs and increasing focus on both access and the quality of care. To address this, we developed China-focused products that include local clinical workflows and requirements. With our local manufacturing, R&D and ecosystem partnerships, we can respond quickly to these needs.

Elekta Harmony Pro is a key example. Developed and manufactured in China is a one-stop intelligent adaptive radiotherapy solution, combining online imaging guidance and steotactic treatment. In adaptive radiotherapy, we are clearly a leader in China, recognized by key customers, key op leaders and the government. In fact, Harmony Pro is the only project selected at a national level for this technology, led by Elekta together with leading customers, including Peking University, People's Hospital. In the first half of the fiscal year, 2026, we are still impacted by the anticorruption campaign. We saw improvement in the second half of the year and ended the year at minus 6%. As the market recovers, we return to mid-single-digit growth, supported by these priorities.

To conclude, China's radio therapy market is recovering with strong long-term potential. Elekta is the #1 player in China in that market with our focused strategy, primary positioning, de localization, strong partnerships and a tailored offering with leadership in adaptive RT, we are well positioned to deliver sustainable and profitable growth in China. Thank you.

Thank you, Anming. So we're moving to the last presenter, and that will be our CFO, Klara Eiritz. She joined Elekta in March. Before that, she have held numerous senior position, as example, CFO of Volvo Construction, CFO of Ericsson Europe and Latin American region as well as numerous positions within Sandvik. So her part will really be to close the loop, give numbers behind everything that has been told today. So with that, Klara, the scene is yours.

It's best for last, right? Yes. Great. Okay. So let's spend some time on the financials. And I'm Klara Eiritz, and I am the CFO of Elekta. And as Peter said, I started 3.5 months ago. I have a background from large technology-driven global Swedish companies. Peter mentioned them, I think, Sandvik, Ericsson and Volvo. But I'm really happy to be here at Elekta and be a part of this exciting and important journey that we are on.

Of course, I have experience of financial management from the companies that I worked on. But maybe in particular, I have experience from working with performance management in a decentralized company with a decentralized operating model. So that's an experience that I look forward to bringing into the journey that we are embarking on at Elekta. When I joined Elekta 3.5 months ago, my first focus was the balance sheet. spent a lot of time on the balance sheet review that, as you know, resulted in impairments and write-downs in Q4 last year. But we were making changes to our strategy. We wanted to make sure that our balance sheet reflected those changes. And also from a CFO perspective, wanting to make sure that we have the appropriate provisions for receivables and things like that. So that was my first my first priority.

We also wanted to get that done, put it to the side to be able to direct our efforts towards the future and the important task that we have at hand here. Then, of course, I've also spent a lot of time preparing for today and especially maybe working on the financial targets, of course, together with Jakob, the management team, but also the Board to make sure that we have relevant and ambitious financial targets for Elekta going forward.

Okay. So for the next 20 minutes, I will spend time on 3 different topics. I will talk around quality of earnings and what we are doing to improve the quality and the integrity of our earnings at Elekta. I will then spend some time on the financial targets. Jakob talked about them earlier, but I will go into a little bit more detail. And then I will say a few words on our approach to capital allocation.

All right. So let's start with quality of earnings. Quality of earnings has been an important part of the ongoing turnaround and the reset and stabilize phase that Elekta has been in during the past year. And therefore, I think the operational improvements listed to the left here are not -- or they are highly familiar to you. So nothing really new here. But by addressing these, we believe we improve the integrity of the company and the integrity of our earnings.

The first topic is order book quality. We believe in a high-quality order backlog that can act as a strong predictor of revenues to come. Second item is the balance sheet. We believe in a strong and relevant balance sheet that can support our strategic growth ambitions and our capital allocation ambitions. Thirdly, we believe in keeping R&D capitalization on a balanced level. And last but not least, I will say a few words on the positive P&L effects that we are seeing from the new operating model that also Jakob talked about earlier.

We also aim to increase transparency around our earnings and financials by establishing or setting clear midterm financial targets and improving transparency and communication around our cash flow. So I will go through the items on the left-hand side here one by one, and then I'll come back to the transparency part when I talk about the financial targets.

So order backlog. By applying a firmer interpretation of the criteria for order recognition, we aim to improve the predictability of our sales by improving the quality of our order backlog. We want the orders we take into our backlog to have a high probability of turning into actual sales, and we want that to happen within a not-so-distant future. In other words, we want to have a strong link between orders and revenue.

And for the order backlog and our book-to-bill ratio to be solid indicators of growth to come. That has not been the case at Elekta in the past. And as you are aware, the order backlog had to be written off quite substantially in the past 2 years. Right now, we have about SEK 34 billion in our order backlog, which equals around 2x our sales in '25, '26. And if you remember when we released our Q4 report, we also had a rolling 12-month book-to-bill ratio of 1.04, which is fairly aligned with our sales growth expectations for '26, '27, as Jakob mentioned in his presentation and that I will come back to shortly as well.

Okay. Next item on the list, balance sheet. With the R&D impairments and other adjustments to the balance sheet in a total about SEK 2.5 billion, we now believe that we have a balance sheet that is well aligned with our current business assumptions and our strategy going forward. We have a balance sheet that will help us build our commercial success and deliver high-quality earnings going forward. This topic is also, of course, closely related to capitalization of R&D.

Elekta comes from a history of very high levels of capitalization versus amortization. And you can see that in the left part of this graph, if you look at the historic years. This has supported EBIT, but it can also be risky. And part of these high capitalization levels was in the end what had to be written down in Q4 last year. Going forward, we will more or less keep capitalization on the current levels. And for '26, '27, we expect capitalization and amortization to be roughly in line.

Going forward, it could even be that amortization will slightly surpass capitalization as we have important product launches in the pipeline, and those have to leave the balance sheet and be starting to be amortized. As Christopher also mentioned, gross R&D expenditure will be around 10% of revenue going forward, and we believe that this is an appropriate level for us to deliver on our innovation agenda going forward. Keep in mind that the new operating model has given us a more efficient and focused R&D muscle that will allow us to drive innovation with greater velocity. And I think this is important to keep in mind also when you compare the 12% with the 10% going forward. All right.

Last item on the list. The new operating model or the new decentralized operating model that was presented by Jakob also in the beginning. We have moved resources and accountability from group functions to the regions and thereby strengthening the P&L accountability of the people who know our business and our customers the best. By delayering and simplifying the organization, we remove cost, but the main benefits of this model are around accountability, decision-making and empowerment, and these effects can already be seen in the P&L.

On this next slide, we can clearly see the lower costs associated with the new delayered operating model. As previously communicated, it will lead to SEK 500 million plus in annual net run rate savings, of which most is in OpEx. The cost reductions have come through perhaps a little bit faster than what was originally expected, and we see positive effects on cost and spend in general as cost-related priorities are now made with a full regional P&L in mind.

And it's interesting because I've seen this play out at some of my previous places where I've worked, and I've seen the power of this way of doing things when you have an end-to-end P&L responsibility rather than a fragmented P&L, that is a powerful thing in an organization. So it's interesting to see that play out also here at Elekta.

I also want to emphasize that the reduced cost levels come mostly from decentralizing and reducing what used to be group function costs. It's not about decreasing our customer-facing resources. On the contrary, these resources have actually increased during the reorganization. So the decrease in selling costs, for example, that you see here is not due to reduced sales force, but rather a reduction in the central not customer-facing organization.

Okay. So let's leave the quality of earnings for now and move on to the financial targets. And before I dig into the midterm financial targets, I want to say a few words on the outlook for this fiscal year '26, '27. Jakob went through this as well. So there's nothing really new here, but I want to go into a little bit more detail. Adjusted for currency, we expect sales to grow 2% to 4%, driven by growth in all markets or all regions and services.

We also expect adjusted EBIT to grow and land somewhere between 12.5% and 13.5%. This is driven by pricing effects, Evo commercialization in the U.S., of course, we talk a lot about that, but essentially all over in our markets, this is ongoing in different stages. And then, of course, lower cost levels due to the new operating model that I just talked about. So this is in line with what we said when we released our Q4 report, but a little bit more details and a little bit more precise perhaps.

All right. The midterm financial targets for '28, '29. As Jakob previously said, we expect to reach mid-single-digit growth in terms of compounded average growth rate or CAGR in '28, '29. This is measured, as you know, as CAGR over a 3-year period starting in '25, '26 and ending in '28, '29. As Jakob also mentioned, we expect sales development or sorry, the expected sales development indicates a gradually higher growth rate towards the end of the 3-year period, and that's driven by product launches, software and services expansion and growth in the U.S.

As for the EBIT margin, we aim for 14% to 16% in '28/'29, driven by improved gross margin and leverage on the lower OpEx levels. When looking at EBIT, keep in mind that EBIT in '25, '26 was supported by R&D capitalization being higher than amortization. So the EBITC was actually 11.2%, and this is really the level we start on when we set our targets for the future.

For cash flow, we target cash flow before dividends as a percentage of sales of 10% in '28, '29. And this would create space for us to continue to deliver solid shareholder return, but also invest in Elekta's operations.

So let's spend some time on growth. On this slide are the growth ambitions for Europe, U.S. and China as presented by Arnaud, Ardie and Anming. And it's these ambitions that add up to the group target of mid-single-digit growth, along with, of course, an assumption of mid-single-digit growth for the rest of our markets and countries. So that's included, of course, in our group target. But today, we're just talking about these key markets.

We expect continued solid growth in Europe as we continue to grow the adaptive-based business and scale services and software. The U.S. is expected to contribute with the highest growth rate as Evo and Iris gain traction and services scale on the back of a growing installed base. And for China, we see growth opportunities by adding -- adapting a more localized product offering and leveraging our installed base.

Then on to the EBIT bridge. So with these growth ambitions, how do we get to the 14% to 16% EBIT? Well, first, we believe that gross margin will improve and gradually return towards the pre-pandemic levels as we grow and expand within adaptive.

And next slide is on gross margins. I'm not going to talk more about gross margin here, but I'm going to say a few words on R&D and SG&A. As mentioned earlier by Christopher and also by me, I think, we expect the R&D organization to run at a gross expenditure of roughly 10% of revenue. The assumption here is that capitalization and amortization will be roughly in line. However, as I said before, it could be that towards the end of this period, we see amortization going up a little bit due to the product launches that we have in our plan and also the timing of those launches.

As for SG&A, we see continued leverage effect on the new lower cost base, and our ambition is to offset further inflationary effects by increased productivity.

If we then double-click on gross margin. We expect productivity measures and margin leverage from higher volumes to roughly offset cost inflation. This includes margin leverage from the lower cost base associated with our new operating model or Must-Win Battle 1, as we call it. We also expect reductions in product costs from Must-win Battle 4.

When it comes to price, we plan for price improvements across the product portfolio with the main effects or the main contribution coming from improved solution pricing in mature markets and price increases across the service contract portfolio.

And as you've heard from the regions as well as from Christopher, we plan for improvements in both market mix and product mix, driven largely by our growth -- by our adaptive business. Higher share of Evo and Iris in mature markets will improve the market mix, but also the product mix within solutions. Launch of new products in solutions and services -- or sorry, Solutions and Software that Christopher talked about, including recurring software sales will support the product mix, but also help drive volume. And we also expect margin support by increasing our service attach rates and scaling our service sales as our installed base grows.

Okay. So let's leave the P&L and talk a little bit about cash flow. To secure continuously solid shareholder return and to create room for needed investments, we target a free cash flow before dividends of 10% of sales in '28/'29. For '28/'29, this implies a slight buildup in net working capital driven by higher sales, CapEx in line with depreciation and historic levels, R&D capitalization of 3% to 4%, and we assume that the finance net tax and leases to remain on current levels. This level of cash flow would open up opportunities for us and allow us to move forward with a certain room for action.

And that brings me to the last part of my presentation, which is capital allocation. So a cash flow at 10% of sales in 2029 would give us roughly SEK 2 billion available for investments in growth and distribution to our shareholders, while maintaining our dividend payout of no less than 50% of net income, we would have room to invest further in our innovation-driven growth agenda, Christopher's R&D muscle or even decide to pursue opportunities -- other opportunities to fuel our growth ambitions.

And if we double-click on the shareholder distribution, dividend payout is, of course, a primary alternative for distributing capital to our shareholders. But the dividend policy is, as I said, to distribute 50% of net income at a minimum. But on top of what we -- on top of that, we have the mandate from the Annual General Meeting, and that mandate is likely to remain also after this year's meeting to buy back share when the circumstances are right.

And that brings me to my very last slide, super summary of what I've just gone through. We are taking steps to improve our earnings quality and the integrity of our earnings through clarifying and strengthening the connection between the P&L, the balance sheet and the cash flow, but also between orders and revenue.

As for the financial target, we're aiming for 14% to 16%, and we expect commercialization of our adaptive offering, recurring software sales and service growth to be the main levers to get us there. And lastly, we believe that a strong cash flow and solid balance sheet is key so that we as Elekta can continue to pay good shareholder returns, but also invest in our future.

So thank you. That was it for me today. So I hand it back to you, Peter. Thank you.

Great. Thank you, Klara. So with that, we are coming to the almost end of the presentations. But before we will have the Q&A, Jakob just want to summarize all the presentations on the next slide. So please, Jakob.

Thanks. That may be a good idea. All right. I think we have taken you through the tour of Elekta, how we see it. And I just want to leave you with some overall perspectives. First, we are keenly aware of the situation we are in. As we say, we are not at full potential. I would say it's all frustrating, but it's also exciting because it shows that there's potential for us when we get to full potential. We absolutely feel we have a plan. It's a robust plan. It's vetted in activities that then translate into financial targets.

And if I would just give you a little bit on advice, do not underestimate our will to execute on the plan. I just tell you, we will see it through. I personally feel we have an obligation as Elekta, given our place in the industry and the world to make this company successful. The company deserves it, the colleagues deserves it. And just a proof point what we saw on the OpEx side, I mean, it's not small things we have done, okay? 15% fewer colleagues, wheel is still on the wagon. We are still rolling -- the OpEx savings are meaningful, but we did it not to save cost. We really did it because we want to see a new Elekta, Elekta 2.0, faster execution, a better say-do ratio, more innovation to the market, and we just have to do it. That's just my personal take.

We have a plan in place. We're excited. We have a leadership summit with 100 Elekta leaders joining us here in Stockholm next week. We did it after mid-summer to engage them, and they will be engaged. They see the value of the plan. When we ask them, should we change at Elekta, basically, 99 out of 100 said, yes, you have to change, and we need to move the company forward. So I think we have a strong base to accelerate our cushion going forward.

Then we have a new operating model in place. Of course, when you do a lot of changes, it's hard not to do a little bit of naval gazing and become internally focused. We are done with that. For me, it's now commercial execution. So some of the guys here on the stage, and we have one online. We will talk a lot about customers. We'll talk a lot about gaining market share on pricing discipline.

Then, of course, as a medtech company, it's all about innovation. And I think, Christopher, what you outlined, maybe hard to really see all the finer prints. But at the end of the day, this is a step-up change in the innovation pace, and we're actually harvesting on some of the focus areas you have had over the last couple of years, and we should continue to deliver on that.

And then not least, when you go out in Europe, there's a lot of tender business, you also have to be price competitive. And you can only be price competitive at a good margin if you lean yourself. And that's why cost discipline within Elekta is going to be a lifestyle. It's not a diet. And I think our customers to serve that. So you will see significant product releases ahead of us. I would be very surprised if we don't see exactly the trend line we outlined on sales growth.

Our order backlog is still solid. We clearly take note of some of the concerns to us on the order intake in Q4. I think we explained part of it, part in Middle East, part on being stringent on order intake criteria. I also said that overall, we have a book-to-bill of 1.04, and that's how you should think about revenue generation, and we now outline that here in our yearly guidance.

And then when we look at the EBIT margin and cash generation, it's going to be a new company when we deliver on it. On the EBITC, a few years ago, we were at 7%, 8%. We now guide at 14% to 16%. Last fiscal was the first year in 5 years, we saw a net debt reduction despite SEK 900 million dividend. And obviously, when you start to generate a free cash flow in excess of around SEK 2 billion, it gives us a lot of flexibility that Klara outlined in terms of dividends and other ways of distributing or deleveraging the company. So that's the key takeaway I'd like to share with you, and thanks for your attention. And then we look forward to Q&A.

Yes. So we need a few seconds to make the stage ready for the Q&A. So bear with us.

Thank you. So what we do now, I will alternate questions here in Stockholm with questions I have received from you online. So again, if you have a question in English, post a question and we will answer them here on the floor. So I'll actually start with Veronika here in the middle.

Veronika Dubajova from Citi. Two questions for me. I mean I have a lot more, but I'm going to start with 2, that's all right. The first one is just on the midterm growth ambition. I'm just trying to reconcile, obviously, your ambition to see meaningful acceleration in the growth from a revenue perspective, but the fact that Evo certainly Europe has been out in the market for a little bit. In theory, '26, '27 should be the years of impact in the U.S. We know there is a new platform coming from Varian. There is growing focus from United on the market, not just in China, but also outside of China.

So I'm trying to understand kind of what gives you the confidence in your ability to really drive that growth acceleration given where we are from a product cycle perspective for you and your competitors, long-winded way of summarizing it.

My second question is just on the gross margin and the positive price contribution. As an observer of Elekta, what's been clear for a long time is pricing discipline has been something that the organization hasn't always had in the past. So I was hoping you could talk about what changes you've made to how your sales force is incentivized, how your regional leadership is incentivized to make sure that we can actually see the realization of positive price on a go-forward basis?

Great. I think with the growth story, we'll start with you, Jakob, and maybe Arnaud and Ardie can fill in on the growth.

Yes. Maybe we do it on why -- Ardie, why don't you start U.S., Europe, then I tie it globally, if that's okay. If you start, Ardie?

Yes. I think your first question, Veronika, on competition and why do we feel strongly about winning is because the evidence we show is that the adaptive way of implementation is superior to what we see from our competitors. We do it faster, easier, and we have a very flexible workflow. So I feel strongly that the direction they're taking is actually strengthening the strategy that we took. And so it's always great that your competitors are following your strategy. So that's why I feel strongly that we can compete and win.

And then on price discipline, we see a significant uptick also for these adaptive solutions because we tie it back to the business case for administration. So pricing discipline on the orders, but also pricing discipline on service has boosted our revenue profile.

Arnaud, would you like to...

Yes. So on the Evo and online adaptive, I think just 1 month ago, not far from here, there was this, and we see -- we saw the high interest, I think adaptive was central to the Congress. I think we got the first mover advantage. We are still not done with the launch. So we are accelerating. We see a lot of demand, a lot of interest. Most of the markets in Europe have already purchased, and we have installed for a large part of them Evo and for a large portion of them with the online adaptive. There are many centers who are going to when clinical today. So I think it's just -- I wouldn't say just the beginning, it's an acceleration for us.

On the price discipline, as I tried to explain, I think we have simplified our portfolio -- our offering with packages. So it creates a lot of discipline and control when we price. So it's not just about taking an order, it's taking an order that meets our financial objectives. So much more rigor and discipline here.

Yes. So maybe I, perfect, add a bit color. So in the U.S., we now have the product to compete. And with our leadership in adaptive, it clearly resonates. And then there is strong systemic demand for vendor competition in the market. In Europe, I think you outlined the replacement cycle coming in with 1,000 systems, and we are there to compete. And then keep in mind that the ecosystem, you should really consider it as a platform. And what Christopher outlined is it will be very meaningful enhancement with the 4 priorities you outlined, motion management, Iris. And then we have really worked on it for a handful of years, integrated console, integrated workflow and integrated table. And there's a significant need.

So we feel -- no, we know that the product will be much more competitive, and we're actually selling with those features. If we then unfold it back to your UNITED imaging, of course, it's a new competitor coming in. We have a war room on them. I don't want to do specific, but we know exactly where they have installations in Europe, okay, and why they want it. I'll just remind the audience also, we compete well in China, the home market, and we sell 50% -- last fiscal, we sold 50% more than they did. So I think that at least gives me confidence that we can compete. But of course, they will accelerate.

And then within the emerging market, we are now fine-tuning our Harmony platform to have a high productivity, low-cost system. Then onwards to price discipline, I'll do it super sharp. But basically, the storyline is this. We have now introduced a quarterly framework where we establish target steering and then very importantly, floor ASPs and margins per product. So it's really 6 CT-Linacs, MR-Linacs, 3 software packages on the TPS and OS. And we will discuss every quarter. We will analyze win-loss ratio. And then if we deviate from those floor, there has to be an escalation part. It's quite a new way of doing it. I wouldn't say it's top steering. But of course, we -- it has to be that when we win deals, they are profitable, we are aligned and then we move forward from there. Yes.

Great. And just like Veronika, present yourself and the company you are representing. So Hassan, please, I'll move to you here.

It's Hassan Al-Wakeel from Barclays. A couple from me as well. And firstly, another on the top line midterm targets. I'd love to get your sense on the revenue guidance in the context specifically of U.S., the U.S. reimbursement crisis that you mentioned, Jakob, on the full year analyst call. Speaking to experts, revenues for facilities are down up to 30% and even with higher acuity mix and motion management, it could be down as much as high single digit. So how do you think this will impact market growth for linacs? Could it push out replacement cycles? And why isn't this a headwind to your orders, particularly as you have a competitor launch at ESTRO later this year?

And then secondly, also on UNITED, but specifically on China, you are the biggest and most comprehensive player in radiotherapy in China. But do you think this is changing with strengthening competition out of your radiotherapy, but also multinational imaging peers, you are the most positive on China. So how do you think about the risk to that mid-single-digit expectation from -- for the China midterm targets if locals do indeed catch up higher up that acuity curve?

Let's start with Ardie on the reimbursement question in North America, and then Jakob can take the China question later on. So please, Ardie.

Yes. Thank you for the question. I think indeed, what I described today was that there is pressure on the traditional way of getting reimbursement done for the U.S. market. But like I said, this is an opportunity because the centers that actually make money have shifted more and more of their volumes to SBRT. So the centers that actually prove that they can financially thrive have moved to more complex treatments, which is great for us because what this does is that the systems that are out there that are aging, they need to be replaced. And that means we have access to a marketplace where the market position of Elekta has always been inferior compared to our competitor.

So I think for us, it will drive demand. It pulls us also into deals because the customer wants to see what's available in the marketplace. And linked to the fact that we see a launch coming, it actually is great for us because it confirms the direction of Elekta. So we see this as a positive upside.

As far as what does that mean for the revenue profile, I always believe that if you start seeing winning in the marketplace and you can start seeing your order book growing, then eventually, you pull this through on the revenue side. That's why we feel strongly about our guidance.

Maybe, Christopher, if you want to chip in, as you presented also a view about the reimbursement.

Well, I see what you mentioned that it becomes an economic necessity for many centers in the U.S. to shift to more modern approaches, more complex approach of radiation therapy. So if they have a very old aging linac, they need to shift or they need to give up. When they shift, they will look at where can we shift that is the easiest for us with our existing staffing, with our existing number, but also capabilities to do it. And I think here, I think we are a clear leader. If you look at the treatment times, argumented 15 minutes for adaptive treatment times, this is far ahead of what some of our competitors report.

When we talk about our portfolio, we don't have to have a dedicated machine for adaptive. You can have a machine that you can use both for adaptive and for non-adaptive treatments. You make the choice at the day when the patient is there and saying, I can go for a non-adaptive or I want to go for an adaptive. And the third one is that we have it across our portfolio. We have it on Unity, obviously, the high end. We have it on Versa HD and Evo, and we are bringing adaptive also to Harmony.

So we have it in our full portfolio. It's really adaptive for everybody, plus what I was mentioning about bringing CT motion management of organs to the linac, again, opening up a new revenue path that is manageable within our existing software framework, which is, I think, unique. And we don't know what the future will bring from other competitors. But where we are right now, I feel very confident that, that will carry on the growth in the next years.

And then Hassan, maybe on China, it's true we are a little bit an outlier. Good thing is it's also an outlier in historical performance, right? So why are we fairly positive, not overly positive, but fairly positive. The market is recovering. So last year, it was 250 units. We expect 10% growth, and it should really have an equilibrium around 300 units, still a greenfield market, 3,000 linacs, it should grow to likely 5,000, which is, let's say, 3 linacs per million capita. And that's very realistic.

And then we look at our current data points, and we are roughly 40%, and that's notch below, but just a notch below where we were 3 years ago, right? So -- and then we actually look at China as an opportunity for us besides growing with the market. Of course, there are things we're also concerned about. And that is we see our development speed is really good innovation speed. We see the world-class planning software we now have is partially developed out of China. We will probably deploy more resources there. We absolutely have COGS reduction opportunities out of China.

So there are quite a few things. And then I talk a lot also to leading authorities. They look at Elekta as a very important player in the Chinese market. It's part -- we are integrated part of cancer care. We are actually seen as a Chinese company and a good citizen. So that's why we guide on mid-single digit going forward.

Before going to right side, I'll take you one there as the last one on the left side here, and then I'll move to right side.

Johan Unnerus, SB1 Markets. Yes, one for Ardie and one for Arnaud, Ardie first. The order positive shift in larger order intake, could you elaborate a bit more on the characteristics of the -- your clients that are active? Is it Unity centers? Or is it larger centers? Or is it a bit of a mix or...

Yes. I think the nice thing about our commercial approach is that we've segmented the market, really focused on the different segments in the U.S. We've identified where we are strong. We've identified where we have opportunity, but it's a very nice balanced mix between IDNs, between academic and between freestanding and community. The only thing I'll say where we see a change is with Unity, where we are now seeing a shift from academic to IDNs. Like I said, the flagship hospital wants to basically keep these highly valuable patients in their health system instead of referring them out to the academics. So that's where we see a little bit of a shift. But for the rest, it's a balanced order intake for the market.

You want to chip in there? Christopher, it seems like you.

Well, no, I think the power is that we have a harmonized approach for online adaptive, but also for motion management across our portfolio. So for IDNs who try to harmonize their installed base inside their own integrated delivery network, it is a perfect way to make sure that the training is harmonized, that they have reference point about what are expectations about productivity of certain sites and they can roll out the same kind of processes, again, across the whole portfolio of sites ranging from smaller sites to these flagship sites. And I think that's what these centers are looking for, and that is what we are enabling in a good way.

And then you had a question for you, Arnaud, right?

Yes, indeed. In Europe, when Evo has got a bit longer in the -- further ahead in the launch, you mentioned 1,000 potential linacs that are up for renewal. I mean some linacs can be up to 20 years old when they replaced, others can -- well, there could be a case for replacement before 10 years. But what's your -- how do you define these 1,000 roughly?

And secondly, when looking at your clients that are taking on Evo in Europe because I mean some linacs -- some people are looking more into the pure stereotactics and other are treating a fair amount of conventional and lower premium -- low premium part of the market, where is the Evo position in Europe?

So the 1,000 units for replacement are all 12 years and more. So of course, there are some who reached 20 years in specific markets like Germany, for example. So we -- Evo until now, basically 50% of the Evo we sold, we sold them with Ektae online. So we feel that it means that those customers want to do online adaptive clearly. And approximately, we have the same amount, the same proportion with advanced treatment and more conventional treatment. But the possibility to upgrade Evo is really what interests the market. So this -- and specifically with the development we'll have in a few months, the new release, I think will enrich the value proposition of Evo with the upgrade and the upsell of those -- of the 6D table, the integrated console, the high-risk development that they are waiting for. And I think that's going to give us another boost for Evo.

Great. Let's move to the right, Ludwig, you had a question.

Ludwig Germunder from Handelsbanken here. So I have 2 questions, please. The first one would be on the gross margin. You mentioned that you aim to take that back to pre-pandemic levels, which is something that you've been speaking about for some time now. And I would just be curious in hearing a bit more about what makes you confident in this step? And maybe also if you can mention anything about the time line you aim to do this in?

And then a second question on the price increases that we also have been speaking about. So how are you thinking about price increases? First, should we view the price increases to a similar level in all the markets? And secondly, how do you reason around the price increases and balancing that with gaining market shares as we're speaking about increased competition?

Could you start with the price and gaining market shares? And then maybe you can comment on the gross margin.

No short answer is on price, you shouldn't think it's across the board. Each market has different competitiveness. It's actually less price sensitive in the U.S. Certain markets, it's more price competitive. We see India being fairly competitive. So there are variations. But the way you should think about it is we expect a price uplift of 2% to 3%. That's how we look at it on the short term. Then on overall price discipline, that is -- that goes back to the comment I said earlier on floor margins and floor ASP, and it's really down very granular per sales cluster.

Klara, shed some light on the gross margins.

Yes. I mean, as I said, this will be a gradual -- sorry, who asked the question?

It's Ludwig Germunder.

It will be a gradual move towards this increase. But I think we feel confident with the new product launches with this position that we have in Adaptive, that is new, I think, compared to in the past, I haven't been here for that long. But we are -- we feel very confident about that. And also as we grow the installed base, our ability to also scale services on the back of that installed base to also defend the gross margin. And also, I mean, we expect the cost -- or the new operating model and the cost decreases that will remain, right? So that we will scale on that going forward. That's the idea.

So we don't expect to scale back, if you will, that cost piece. So that's an important part. And then also what we haven't maybe spoken so much about today, but our Must-Win Battles 4, which is our reduction of product cost, which Christopher's team is working on, on redesigning our products, making them more cost efficient, but also what the supply chain team are working on in terms of reducing the cost. That's a really important area for us as well and something that we have included in our plans.

Maybe to add to that second point because in the past, when you look at how our linacs have been developed, they have been developed mainly from out Europe, specifically the Crawley environment, where there was less emphasis on very rigorous design for cost.

Now we have shifted a lot of our also linac development to Beijing in China, where they both have the local supply chain, but they also have, by nature, a very strong focus on getting cost down from the beginning. And that, of course, then again, feeds back into also our U.K. development teams.

So moving forward, all new developments will have a very strong KPI related to cost reduction. And cost reduction is not bill of material alone, can be, but it's also about how fast can you do an installation, how much can you do remote or how big is the reliability gain that you get if components last longer. These things in the past were not the prime -- there was the clinical features. I mentioned in my presentation, the clinical features were the driving force for our development program.

Now we have these nonclinical features at the same level of consideration.

We move to Mattias here in the front, and then I'll move to the back end again.

Mattias Vadsten from SEB. So you talked about the new launches of product features, Iris high definition imaging, motion management, 6D table, et cetera. My question is, how do you incrementally charge the customer for this? Or is it rather lever to drive sort of Evo adoption in itself? And also, I think it comes down to the first question we had in the room here with the back-end loaded growth profile. So with these new features, are you seeing that when those are released, you are fully competitive, so to speak? And today, you're not just there yet? Or how should we read into it?

Well, it obviously is a mix. I think when we talk about adaptive, I believe we are the leader of the pack. At this point in time, we are ahead. When we talk about some other things like workflow integration, we are catching up and we're honest about it, but we are catching up. So that's where, for example, the integrated console and the integrated table are so important because they bring us on par with what competition has to offer already. But having said that, because we are upgradable, people who have already an Elekta linac for them, it's an easy step to get to that new level. And they know that we have a commitment to go further than that.

Talking about a willingness to pay, the willingness to pay often depends, do they get paid for what they pay for. So when they get like in the U.S., Ardie was elaborating, increased reimbursement for these more complex processes and procedures without having to hire new staff, adding a certain capital investment to get to an online adaptive workflow is actually a business case that makes a lot of sense for these centers because otherwise, they are faced with old equipment that is not going to deliver any value to them.

So I consider willingness to pay a derivative -- willingness to pay Elekta is a derivative of them getting paid for what they are delivering and that are the value proposition that we are focusing on when we prioritize.

Clinical and nonclinical.

But we can charge in the market...

Of course.

So when we sell with integrated table, integrated console, we actually do that now in Europe with the upgrade clause, we can charge higher than on the old spec.

Very clear. Then also, you talked about the new modern interoperability API and so on in your section. So maybe if you could be a bit more precise on what that means? And also, is this driven by the customer side so that they pressure on you on that side? Or is this sort of something opportunity that Elekta sees.

It's both. It's what Elekta sees, what our third parties see that we work together with and what our customer sees. And in the past, the interoperability between different vendors was often done on a more ad-hoc base where you directly put their software, their APIs into our -- deep into our own system. What we are now defining is a much more controlled modern interface that is for all vendors, the same, but it's flexible enough to also accommodate the different vendors.

So for the third parties, you name them that talk about surface-guided radiation therapy. They have a very clear set of specifications they can develop on, they can test on and therefore, easier for them to put it also into our workflows. And for the customer, the benefit is clearly that they will see a smoother workflow than in the past because we had to redevelop with every vendor and test with every vendor a new one, and that led to delays for certain vendors, but also for one vendor, the integration or the interoperability was better for another one less so. So this becomes also a very valid value proposition for our customers.

Anyone we move there to the table with Christopher here.

[ Erik from Boyle Capital ]. Just a question regarding Evo and the installation time for that. I mean, it's potentially an upside if one can do upgrades directly with old Synergies or the Harmonies or the Agilities. So can you touch -- give some light on the potential upside on the margin side, but also on the installation time, I mean, the book-to-bill, the difference if you do just do an upgrade of MLC in comparison to installing the full Evo. So that's one question.

Secondly, on the software side, I mean, great to see the growth in U.S. has there been any flip around on, I mean, RayStation or even Eclipse with the new software that is apparently very positive. Lastly, I mean, looking at the growth for Brachy, I mean, you're the clear leader in this. Could you touch a little bit on the growth and the potential of the Brachy side because that's obviously a high-margin product and a great product.

Maybe you can start with the Brachy growth.

I absolutely can. Yes. So Brachy where you deliver the dose inside the patient's body is a more traditional way of treating, but actually high, high quality. And we have estimated a plus 70% global market share, good margin profile in the business. We also look towards, say, mid-single-digit growth, but it's part of our overall guide.

So we think we have a strong position. And then very importantly, you start to reinforce that position into our linac system under the Elekta ONE software. And that is a strong demand for our customers from workflow. You give a Brachy boost and then you go over to the linac treatment. And that's part of the commercial synergies that we can drive stronger going forward. And the same on Europe, by the way.

Yes. And maybe to enhance that Brachy story. As you probably know, we have still MicroSelectron out there, and they're getting ready for replacement. And so we see a nice uptick now for them to finally go to the Flexitron platform. So that also drives our growth in the Brachy business.

And maybe I know and Ardie, you can comment on the flips we have on software. You mentioned RaySearch, for example, and how that is in your markets.

You want to start ?

Yes. No, I think what is clear is that you've seen, obviously, the department level planning systems is basically what people use for bread and butter. That's where people have invested, for instance, in RayStation or Eclipse. What we have done now with this version of Elekta ONE Planning, we're unlocking a new way of treatment.

So it basically is in parallel to what they use. But once you start using this in the adaptive environment, you stop using it in the conventional environment. So this journey of transition is now happening. And you see a couple of key customers that have said, "Hey, if this is part of the integrated ecosystem, then why do we still have a separate machine standing here." So I think what you will see is that this integration of that ecosystem, linking the linac to the TPS and the OIS, that's a secret in order to get to adaptive treatments. And with that, the focus on a stand-alone departmental-wide treatment planning system will start to disappear.

Arnaud, any comments on the U.K.

I think totally it's exactly what Ardie has described. I think we have not seen huge issue until now. So it's not a blocker for us.

And Erik, you had a third question, right?

Upgrades versus...

Book-to-bill on the installation difference, the time if you do a full installation of Evo, but in comparison to just swapping the MLC, if I understood you can do and the margin difference because it must be huge from a COGS point of view. If you can touch a little bit on that, it would be interesting to hear.

Maybe you can start.

No, no, but it's -- there are certain upgrade opportunities. You saw some of them from Ardie from existing installed base. Of course, typically, when we have customers with equipment older than 8, 10 years, it makes less sense to upgrade because it costs money. On the existing linac, but rather wait and then replace it. But the way you should think about the Evo platform, that is really the accelerator of upgrading our aging installed base in the U.S. and then tap into what you outlined, the 1,000 units market opportunity in Europe.

I mean you need to come with new technology, and that's, I think, what we have outlined, we have.

Maybe to enhance that a little bit further, the book-to-bill on the linac is normally about 12 months. But now you see that in order to really get access to these new reimbursements, actually the book-to-bill -- book to revenue is shortening. So we really have a high need for these customers to get their bunker ready, take the old machine out and put the other machine in. Obviously, that's more capital intensive. And also the margins on the upgrades are much better, right?

Iris combined with the [ EOP ] suite is very good margin for Elekta. So that's where I would say that's a 3- to 4-month cycle. So I think this is really driving a lot of profitable growth for us.

Great. Move to Kristofer.

Kristofer Liljeberg from DNB Carnegie. Two questions. First, I would like to get back to what do you think will hold back what you see as the full potential growth? And the reason I'm asking is -- you see China recovering since U.S. solution orders were strong last year. Now you're talking about customers want pretty quick installations. So what's holding back growth near term?

And the second question on working capital and the reason for why that should be a bit higher here now than what we have seen in recent years as a percentage of sales?

So maybe, Jakob, you can start with the full potential on growth and then Ardie and Arnaud can chip in and then working capital for you then, Klara.

Yes. So first, we take note of the growth trajectory the last 2 years. There has been organic growth of 1% per year, right? We now guide at 2% to 4%. We say it's below market growth. But for us, it's super important. We have better say-do ratio, if you will. So on the growth side, of course, we need to see the proof points being lived out in the U.S., I would say, start of the year, promising, but we are 1.5 months into our new fiscal year.

And then clearly, we see also in certain markets, new competitors coming in, and we want to take stock of that and see how it plays out. But -- so that's why we stand by the guidance we give. Then on the midterm, it's clearly linked to 3 things. The most important is on products. And we do believe that with what we outlined here, we are ahead in certain areas. We are matching on others, great on the software side.

On the OIS side, we have some work to do, but we know what we need to do. So that's on the product side. Then commercial execution, it's linked to our Reset the Model. We have great commercial leaders out there. We have changed incentives. We have changed quite a lot of people. We have a new performance culture. And then what I really, really think is important is we have to stay lean on the cost side so we can deliver that good price value ratio to customers and compete with -- to compete with someone that brings the best technology at a good price is a pretty tough competitor to compete with.

You want to add in something Arnaud or Ardie.

Yes, I think for Europe, we have seen really a very strong uptake with Evo. We have this cycle of replacement that is really a very nice opportunity. I think the 2 things that could offer upside to the guidance that we are thinking about in Europe are -- I think it's all this science of execution. I think this is where we -- most of the companies, as we all know, can accelerate or decelerate.

So I think there is really a big opportunity to have much more rigor, much more discipline in the organization, but it's already an ongoing activity, but we'll see. We'll see how much we can capture on top of this. And of course, innovation and how competition will come to the market. So I think that's where we are.

Ardie?

Yes. For me, Kristofer, full potential means that we are competing, and we are showing that we are starting to compete in the most important segment again of linacs. We saw obviously Brachy neuro was fine. MR-Linac is great, but now we need to untap a different market segment. But it's really fun now to get into the mix again of competing on the linac side. And that for me means full potential that our customers are pulling us in because they want to compare, and we have not seen that in the past. So that's for me, really, again, competing in the marketplace.

Klara, on the working capital question.

Yes. I mean -- so the cash flow slide that I showed is for '28, '29, right? And we expect a little bit of an -- or we expect an uptick year-over-year in revenues in that year, and that means that we probably will tie up a little bit more in working capital that year compared to the year before. Of course, we'll do what we can to not do that, but that's the assumption that we have in the model.

Erik, in the end of the -- yes, over there.

Erik Cassel from Danske Bank. I wanted to talk about emerging markets. There hasn't really been any talk of it on the CMD, and I recall from the last one that back then, that was like the core topic of unit growth in coming years. So basically now, I guess we're seeing United they're in like 85 countries. We have Shinva announcing a lot of wins in LatAm. And I think I counted another 8 linac coming to market in the next 2 years, mostly targeting those kind of markets.

So I just wanted you to talk a bit about emerging markets where you're today pretty strong. What are you seeing for the coming years? Do you see that you can sort of keep market growth? Or do you expect to lose out in units? And what do you see on price now that they are coming with essentially 40% discount versus what you're offering? That's my first question.

Do you want to start here, Jakob?

Absolutely. And then we can cover LatAm in detail, Ardie. So when you mentioned some, you shouldn't necessarily take it as that we have actively deselected the other. We just chose these 3 large core markets. So our planning assumption is absolutely that we will see intensified competition in the global South. And we absolutely, Erik. I mean, we see that now in LatAm. We see that in Indonesia. We see it in India actually also. And we are tailor-making our product portfolio accordingly. What we have outlined, and we also have that in the guide, we -- for this fiscal, we assume broad-based growth. And actually, our EMEA region, you can say also after a weak last year, I would be very, very surprised if they don't show a pretty reasonable growth going forward.

So don't over interpret that would be my advice. And then on LatAm specifically.

Yes. Like you said, we have a very strong position in LatAm, and we see a continuation of that. If you see the uptake of Evo, for instance, now in Argentina, in Chile and Mexico, you see that these customers are looking for the same thing, which is they need to treat more patients more efficiently with less staff. And so the solutions that you can buy in the market from our competitors that are coming do not facilitate those kind of needs.

So for us, it's a really strong position to leverage our premium position, which then also protects our price points in that market space. So I feel really strongly about our market position in LatAm.

Let me say something about India before you come to the second question specifically because I see there is a significant opportunity, specifically in India, and you mentioned it as a key coming up market. India is price sensitive, obviously. They have a need. They are significantly underserved when it comes to cancer care. What they do have, they have highly qualified clinicians. Unfortunately, these clinicians are not where the patients are.

So what we are doing, and it's important that we said we are bringing adaptive and therefore, hypofractionation to our entire portfolio that we will position Harmony specifically as a productivity engine towards the Indian market, including hypofractionation and the feature I mentioned about remote collaboration is going to be essential in a hub-and-spoke model where there's a hub where the clinicians are that are going to do the treatment planning, making sure they are pushing this then to the kind of regional centers a very price competitive value proposition, but leapfrogging maybe a lot of markets when it comes to the adoption of hypofractionation because Indian people for Indian people to travel to a center is a huge expense. It's very difficult.

So us being able to bring adaptive and thus hypofractionation to our whole portfolio, I believe, is going to be a key differentiator also to some of the maybe more cost of goods competitors that might come from China. So I think the portfolio here is really important.

And the second question?

Yes. I also wanted to talk a bit on service as well, which you haven't touched much on. I mean my belief that it generates the lion's part of profits in Elekta, so may even say all of it. But what happens to Service now in the coming years? Because as you've said yourself, you've lost quite a bit of market share. I guess the service is running on an installed base that has market share, which is notably above what your new market share sales is. So in terms of coming years, what happens if that installed base starts to churn? Can it be offset somehow?

Maybe you want to start, Jakob.

Yes. So thanks, Erik. Installed base is actually growing. So you can still lose a bit of market share. But if the overall market growth exceeds that, then -- and that's what we said. I mean, I think at last Capital Market Day, we showed a lower installed base than we show this year. So overall, we see our service revenue growing. And it is actually very important.

Of course, you can sit there and say, what is the split profitability, service, software or hardware because if you don't have the equipment sale, you don't have the service contract, at least not in our case. But the profitability margin is attractive. And we're actually looking at strengthening the moat around our equipment to make it more attractive for customers to use Elekta as a service provider when they choose us as the equipment provider. But it's a very good point.

Yes. I mean we are also enabling service with our teams in a much more efficient way. So in this case, you had third parties in the past that would come in and say, "Oh, I serviced an Elekta machine in the past, and I can do it for half the price." It really creates a complete different model when you start focusing more on remote service, remote access and building in solutions that only Elekta can provide.

So you see a shift. The old engineers that used to be able to fix our linacs, they're retiring. So those people that were in-house are now basically coming back to us and people sign up for service agreements. So our attachment rate is going up. And with that, I also see that we counter the threat that you just described.

Arnaud, any comments on the Service business in Europe?

Yes, clearly. So in Europe, we still have a lot of opportunities in Eastern Europe to increase the attach rate. So that's really a boost. As Jakob said, we are increasing our installed base. And on software, overall, I think the attach rate is another priority. So we can as well increase there. So I think -- and plus disciplined price increase. So we try not to sell multiyears of service anymore where it's very difficult to capture the full value of price -- annual price increase and we segment year-over-year.

So again, in terms of execution, price discipline, I think we are maximizing the price increase potential.

David, in the middle of the room here.

David Adlington, JPMorgan. Maybe you could just talk to the cadence of the improvement in revenue growth. And just to be absolutely clear, the mid-single digit is a compound number over the 3 years, not mid-single digit as an exit rate in '28, '29 because there's, I think a little bit of confusion around that. And then just on China, you're talking about double-digit unit growth for the market. I just wondered if we can get your expectations on pricing and also how your market share, you're expecting that to evolve over the next 2 to 3 years.

Yes, it's not the exit rate. It's a CAGR. China, barely, we expect the market to go from 250 units to 270, but it could also be 280. But clearly, the market is recovering on price. We see a little bit more procurement through VBP. So -- but the price stability when we look at ASP is still there, and we actually have increased prices a little bit on our end.

Great. We have time for one more question. Any gentleman here in the front?

[ Rutger Smith ], I represent the Family Office. This is an odd question, but with these aging machines that are replaced, are they refurbishable? And if so, I mean, they can -- if they are going to be scrapped, someone could pick them up for next to nothing. Is that happening? Is someone picking these up, selling them to less developed markets for a very cheap price?

Do you want to take that Christopher or should I?

I'll start with what you see. I mean I can start. First of all, yes, they are scrapped and mostly not refurbished because we have to see that they are also radioactive parts, or activated parts in there. So they are not just ready to go out again. Do we -- are there incidences of people getting those hands on? And maybe that is the case. I cannot comment on that. I don't have any data. But of course, the idea is that we are increasingly reuse components of existing of older parts of the linacs. We are looking, for example, at the opportunity to reuse tungsten as one of the key materials that are a significant part of linacs that are very high in demand as we speak. And of course, moving forward in the more circular economy, we will increase the number or the amount of percentage of parts we will reuse.

So to find a linac in a usable format after we decommission it, I don't think that is happening very often, but maybe for you to -- because you know how you do decommission our linacs.

No, I mean, I can tell you almost all the linacs get scrapped. There's a few examples of moving them between institutions that have one of them and they move it to a different part of their institution. But we do not support actively moving them to other countries because the quality of the machine cannot be warranted. So when you say, "hey, I've got a cheap machine, I refurbished it and then I can use it again." I may be seen 2 cases so far.

Good. That was actually the last question. Before I have Jakob to close, I would like to say for everybody here in Stockholm, we have a meal back at Forskaren, our head office. It's not going to be in an office. It's going to be on the bottom floor at Urban Deli. So right after you done here, people from Elekta will help you and show you the way there. So -- but before we close, Jakob, anything you want to say?

I want to say thank you very much for showing up, whether online or here in the room. I know it was a warm room. We didn't do it on purpose. And then I wish to the swedes here and there are quite a few, Glad Midsommar.

Thank you. Thank you.

Ladies and gentlemen, welcome to the Elekta Q4 Report Conference Call. I am Valentina, the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions]

At this time, it's my pleasure to hand over to Peter Nyquist, Head of Investor Relations. You will now be joined into the conference room.

Hi, and good morning, everyone, and welcome to Elekta's conference call for the fourth quarter and the full year of 2025 and '26. My name is Peter Nyquist, and I'm Head of Investor Relations here at Elekta. With me here in the studio in Stockholm, I have our CEO, Jakob Just-Bomholt and I would also like to welcome our new CFO, Klara Eiritz, as she started now, I guess, 3 months ago as new CFO of Elekta. Very welcome. Great to have you here.

Today's agenda starts up with Jakob giving some key takeaways from the fourth quarter, including some strategic highlights. Then Klara will give us details on the financials and Elekta's outlook. After the presentation, we will have, as usual, a time for Q&A.

But before I start, I want to remind you that some of the information discussed on this call contains forward-looking statements. This can include projections regarding revenue, operating result, cash flow as well as products and product development. These statements involve risks and uncertainties that may cause actual results to differ materially from those set forth in the statements.

With that said, I would like to hand it over to you, Jakob. Please.

Thank you, Peter. A warm welcome to all of you. Warm welcome to you, Klara. Throughout the year, we have really been very clear on that Elekta, we are not trading at our full potential. We are a wonderful company, but we are not at full potential. And to address that, we have said we need to drive significant transformation within the company. And the way we think about it is that we really have a transformation that will take place over 3 phases. The first one, Reset and Stabilize; the second, Improve Profitability; and the last one and most importantly, and long-term Innovation driven growth.

If we look at Phase 1, I would almost say we are done, and we are actually a little bit ahead of what I expected now 9 months ago. We have been working a lot to reset our operating model really with the view of ensuring that we have empowered accountable teams. We increase our velocity and how we operate, how we execute, how we innovate. Then we have been going through a simplification of our org setup.

Some of you may remember, we have now executed having 9 organizational layers to 6. We have decentralized. We are pushing P&L profitability to our regions. And as a consequence, we did really a zero-based review of the organization. And today, we have we have more than 500 fewer colleagues within Elekta than we were 6 months ago. Then we have been working quite intensely on strengthening leadership when you when you realize you're not at full potential, you have to look yourself in the mirror. And part of that is, at least in my -- our view, to strengthen the leadership bench.

If you look at the Executive Committee, 4 out of 6 have been appointed within the last 12 months. We have seen 8 out of 17 members in the executive management being new. And I feel good about where we are. We are working on culture. We have many strongholds, but we also have things we want to change. More customer centricity, more performance management, more accountability. And then we are hardwiring that into incentives from the very top to further down and really linking incentive payouts with the value we create for our shareholders.

And then lastly, we have been very clear on we want to improve the quality of earnings. The way we look at it as I say it really takes out it in 3 distinct pillars. First, to reduce the delta between what we capitalize of R&D cost and what we amortize. I'm happy to say this quarter, we actually deliver on that. So it's good, and we expect that also to happen going forward. Then with the plan of having you in, Klara, we said when you want to have quality of earnings, you'd also need a quality balance sheet, and we have been going through it in great detail.

We are today announcing an impairment related to certain discontinued business activities, but certainly also other things, and we'll share the details. It's noncash items, and we don't expect that to happen going forward.

And then lastly, you may recall in Q2, we did another impairment of our order backlog. And I was also very clear on that, that's it. And when you make such a statement, you have to be very clear on that. You take in quality orders going forward. So we have been, I would say, prudent in what we call in as orders. You shouldn't -- we leave the year with a book-to-bill of 1.04. I actually feel good about it. It's a better indication of future revenue growth. You shouldn't read into it that it's a weakening of our underlying business fundamentals, but rather it's an initiative stemming from us desiring to improve quality of earnings.

As I said, we are now done, give and take with our reset and stabilize, and we move into improved profitability. And clearly, this quarter from our point of view, was a step in the right direction. I look at EBITC, and there, we have a very, very substantial increase of 4.5% give and take versus same quarter last year. Actually, EBITC is the highest in 7 years on the margin. So it's good.

As part of improved profitability, we have focused innovation that also links to some of the impairments. We know what we need to innovate. We know what is important for our customers, and we'll unfold more of that at CMD in a couple of weeks. We are clearly working on strengthening the commercial execution. It also links to leadership culture and incentives.

We spend a lot of time on pricing excellence. We do see cost of goods sold increasing from tungsten to microchips to logistics, and it's important that we have a very stringent structure to pass on those cost increases to our customers, and we expect to do so. And then we have programs on OpEx and COGS. And specifically for OpEx, I'll come back to it. It's fair to say that the OpEx savings have exceeded our expectations significantly. And we have a very significant part of that in Q4. So we can be happy about that. And lastly, we have ongoing work on simplifying and standardizing our processes.

Then at the very end, I hope we can conclude improved profitability within this year, maybe part of next year, but the future of Elekta is really to drive growth through innovations. And we'll continue to invest. We just come out of ESTRO. It confirms that radiotherapy is highly relevant. It's clinically efficient, it's cost efficient. We can become more precise. We can adapt more.

So we'll continue to invest in our road maps, and we think customers are absolutely willing to pay for that. So we look forward to sharing more when we meet in a couple of weeks. But if I then turn into the full year.

As I said, book-to-bill of 1.04. We did see -- and we were a little bit negative surprised in the Middle East. We did see specific customers delaying decision. But most importantly, we have just implemented firmer order acceptance criteria throughout Elekta to ensure that the order backlog we have now is of very good quality and is indicative of future revenue growth.

In the U.S. specifically, we have seen on our CT-Linac portfolio double-digit growth. We expect that to accelerate linked to Evo also this fiscal year. So we are on plan. We are positive.

On organic growth, 1% linked to Europe, but actually also our EMEA region, our Middle East, Africa, India region. On gross margin, we did see an uptick despite the FX and tariff headwind, now at 38.4%. It's still too low. We need to be above. And on EBIT margin, 12.3%. We clearly see that a lot of the work in becoming more efficient is really starting to have impact. Keep in mind, this quarter, we did have a headwind from capitalizing less and amortizing more.

So if you look at the underlying EBITC, it was an improvement from 8.6% to 11.2%. And that translated directly into cash flow. So the cash flow almost SEK 1.4 billion despite paying out SEK 300 million in severance payments. And we saw, for the first time in 5 years, a reduction in net debt which we are very happy about. And that also allows us to sustain the dividend. So the Board approved yesterday dividend payments of SEK 2.4 per share, unchanged from prior years.

If we look then on the next slide, specific key takeaways. As I said on the book-to-bill, we did see lower Middle East, Africa. That's really where it stemmed from. Also a bit of India, but we were very clear on also saying no to a lot of orders last minute because we felt the criteria was not truly fulfilled, and we feel very good about that.

Net sales decreased 1%. It was really driven a bit of Asia Pacific. Actually, we had some delayed project installation understandably so in the Middle East or Africa. I believe I also mentioned that at our last call. And had we not had those specific delays related to a very turbulent world in the Middle East, we would have had a positive organic growth in line with previous quarters, give and take. Then we will come back on the impairment of capitalized R&D and discontinued products. So I'll leave that for you.

Gross margin, highest of the year, a little bit not lower than last year, but we actually exceeded our expectations. And keep in mind, we have an FX headwind and also a bit of bill of material headwind, but we managed to compensate through price increase. On the EBIT margin, we are at 18.9% and that really links to lower OpEx and lower service costs. So a lot of the things we have been working on is now materializing into EBIT margin. And this quarter, EBIT margin equals give and take, the EBITC margin. And then lastly, on cash flow, we saw a little bit lower cash flow in the quarter. But as I said, what really counts is the full year, and we are very happy to see that our net debt is coming down.

On the commercial side, if we look at Americas, 1% growth, Evo launch continues as planned. We are positive about it, but more importantly, so is our customers. On APAC, we did see a decrease of 3%. We have seen a little bit of lower growth in some specific Asian markets. And then conversely, we see that the recovery in China that we talked about did actually materialize. So on orders, we have -- and revenue, we had 6%, 7% growth in the quarter, and we have had second half growth. And the outlook is positive going forward.

Lastly, on EMEA, the momentum is still there. We have product launches. It's really Elekta Evo that is more than 2/3 of our solution sale. So that momentum continues. And then as I said, Middle East, Africa, we have just seen a pause, understandably so in the quarter. But the good thing is I met here at ESTRO a lot of both customers and resellers, and they are positive. Unfortunately, people still get cancer and radiotherapy is cost efficient. So I'm actually very impressed about the resilience, and we don't see this being a structural issue in the years ahead.

If we look at our strategy progression, and if I'll just give a very brief helicopter perspective. On the first one, I think we're doing well. I'm happy with what I see, and we are ahead of plan. Focused innovation will unveil that, but we are taking a number of decisions, and we know what we need to innovate. We have the plans in place and we'll share that on CMD. There will be a strong systemic demand for what we will offer in the years to come.

Expand in China, give and take, when we look at it, we are at 40% market share, 39% to 40%, a bit higher when it comes to value. So it's clearly a position we want to defend, and we are ready to compete. And in the U.S. we are really on the hunt for more market share, and the portfolio is shaping up. So we expect also high double-digit growth on orders this fiscal year. And then by the end of first half, it will start to materialize in revenue.

On continued cost reduction here, we are challenged a little bit because we have the input factors hitting us. So we really have two tracks. One is the price excellence I outlined, that is just going to be a muscle. I'll also personally stimulate within the company because we need to see CPI clause increases coming out through the system. And then we run a lot of COGS, cost reductions throughout the company, and we will announce a new COO starting in the company 1st of August.

So let me close here by saying on the operating model. The split between COGS and OpEx is maintained. We have no reason to believe otherwise. It's a significant impact in earnings Q4. It significantly exceeds what we guided at SEK 500 million. The restructuring charge is a notch below what we expected at SEK 421 million. And as you see, the last point, the workforce is reduced by more than 500 employees, and that translated into the savings. But as I said, the real core of the operating model is to innovate faster to execute faster to get closer to our customers.

So with that, I'm going to close.

All right. So hello, everybody. Klara Eiritz here, new CFO of Elekta, started the 1st of March. So I will speak a little bit about the financials then. And starting with the full year. Jakob has mentioned some of this at some repetition, but we'll do it this way.

Adjusted for currency effects, net increased by 1%, and the growth was driven by the EMEA region and recent product launches, especially in Europe then with Evo and Elekta ONE as well as also service growth and price increases also mainly for Europe. Adjusted gross margin was up a little bit year-over-year driven primarily by these price increases for Europe. However, partly -- or that offset then the negative currency effects and tariff costs year-over-year. Adjusted EBIT landed at 12.3% for the year, driven by said price increases and lower OpEx, of course, then due to the implementation of the new operating model, which allows us to run the company on a lower cost level. Adjusted EBITC margin improved as well, but the improvement was a bit less than for the EBIT margin due to lower capitalization and higher amortization.

Then let's look at the fourth quarter in isolation. Okay. I'll just continue talking and see if we can get the numbers up. So adjusted for currency, net sales declined 1%. Business momentum continued in Europe and sales also increased in Americas. However, this was fully offset by lower sales in APAC due to the Japanese market slowing down. So despite growth in China during the fourth quarter, APAC sales dropped by 3% in constant exchange rates.

And due to the ongoing conflict in Iran, sales in the Middle East were down a little bit also and this hampered the total growth numbers for EMEA compared to last year than despite the continued momentum that we see in Europe. And in constant exchange rate, solutions decreased sales by 2%, while services sales were unchanged compared to last year.

Maybe I'll stop there before we move on? Or should I continue, Peter? Can the listeners here see the -- yes, okay. All right. Then -- yes, the book-to-bill ratio was 0.96 in the fourth quarter for reasons mentioned by Jakob here in the beginning of the call. And also for the full year, the book-to-bill ratio was 1.04 then. And gross order intake in the fourth quarter decreased by 15% in constant exchange rates. And this decrease is -- sorry, gross order intake in the fourth quarter decreased by 15% for the reasons that Jakob mentioned, a decline in the Middle East, but also stricter policy for order intake recognition at Elekta.

So while these measures temporarily, of course, affected the book-to-bill ratio, they also reflect a more disciplined strategy focused on improving our order quality without impacting our growth ambitions, of course, going forward. So in the fourth quarter, adjusted gross income was SEK 1.9 billion, representing an adjusted gross margin of 39.9%, a slight decrease, mainly driven by changes in foreign exchange rates, while we saw improvements from price and product mix that contributed positively in the quarter.

And then tariff costs, the strengthening of the Swedish krona against major currencies had a negative impact corresponding to a total amount of around SEK 200 million. And maybe also worth mentioning is that last year was favorably impacted by unusually strong software sales. So that's something to keep in mind also when looking at the year-over-year comparison.

Adjusted EBIT came in at SEK 902 million, representing a margin of 18.9%. The higher adjusted EBIT margin derived mainly from a lower cost base than due to changes to the operating model as well as also lower R&D spend. And then what I mentioned in the beginning with, of course, price increases and all those things, they trickle down to the bottom line, of course. But we also see a somewhat higher amortization and lower capitalization that offset some of those positive effects then.

Reported EBIT amounted to minus SEK 461 million, representing a margin of minus 9.7%. And the reason for the negative reported EBIT was the IAC or the Item Affecting Comparability of SEK 1.4 billion that we booked now in the fourth quarter. Gross margin was impacted by Item Affecting Comparability corresponding to about SEK 19 million. So most of the IAC can be found in OpEx and other operating income and expense.

Right. Then we can go to the next one. Yes. But before we get into more details around the one-off items, a few words on currency then. FX had a negative impact on revenue of about minus 7%, mainly driven by the stronger SEK versus main revenue currencies, U.S. dollar and euro. The effect on COGS and OpEx, on the other hand, was favorable as the stronger SEK versus main cost currencies impacted the cost base favorably. And then we have some positive currency effects between gross margin and EBIT also driving from realized and unrealized currency effects on the balance sheet.

Then if we move to the next slide, and we talk a little bit about the one-off item of SEK 1.4 billion. This amount is a combination of impairment of previously capitalized R&D costs and goodwill as well as provisions for other balance sheet items, mainly trade receivables.

And if we start with the trade receivables part here, we have done some provisions for specific projects, but it's mainly an update of the general model for expected credit losses. We're essentially adapting more of a prudent approach to receivables that are long overdue. And in the balance sheet, we could see that these provisions have eroded over time, and we want to restore them back to more normal levels.

The R&D impairment in Q4 is related to products that are no longer part of the strategic road map and they will not be launched. And we also have examples where we have similar product -- similar development projects that are being combined into one, and this means that we must give up some of the parallel development costs that are currently activated on the balance sheet. These decisions and the consequential impairments give us a balance sheet that is better aligned with current business assumptions and our strategy going forward.

For competitive reasons, we will not disclose, of course, further details around which products, projects or initiatives that we're talking about here, but we can say that with these adjustments, we have a balance sheet that is well in line with our strategic ambitions and that will help us build our commercial success going forward. The impairment of goodwill is related to the Kaiku business in Finland and the strategic decision to start to wind down that business.

Can go to the next one. Cash flow after continuous investments amounted to -- let's see, this is the full year, sorry, yes. One -- or sorry, for Q4 amounted to SEK 1.1 billion, including severance payments of approximately SEK 160 million in the quarter. And the full year cash flow improved SEK 336 million to SEK 1.4 billion. And the improvement year-over-year mainly is due to more favorable movements in working capital and lower investment levels.

Then let's say a few words about the dividend proposal related to the fiscal year '25-'26. The board proposal to the AGM in August or September, I can't remember, is an unchanged dividend of SEK 2.4 per share. This would equal SEK 917 million split into installments as usual. So that is the proposal to the AGM.

And then maybe on to a few comments on the EBITC margin. You can see those numbers in the gray boxes at the bottom here under the graph. And for 5 consecutive quarters, we now see an improvement in the 12-month rolling EBITC margin, which is encouraging and something that we are focusing on when we assess the business.

Great. And then a few final words then on the outlook for '26-'27. We expect sales in constant currency to increase year-over-year. And with that, we also expect an improvement in the EBIT margin. And on our Capital Markets Day on June 17, we will present more details related to midterm financial targets going forward. So we will talk more then. Thank you. So I hand back to you, Jakob, to close out the part.

Yes. I'll be very brief. So we do see both full year and Q4, as you outlined, Klara, a strong improvement in profitability. We are happy about that. It translated into cash. Keep in mind, we said that we wanted EBIT to be closer correlated to cash generation. It's being delivered upon reduction in net debt, very important for us. We have done the balance sheet review. It will not impair our ability to grow and execute and deliver great products in the future. And I personally would say short term, above all, we'll focus on improved profitability and create the foundation for innovation-driven growth. But very soon, we will pivot towards pursue innovation-driven growth, and we will share that in greater details at the Capital Market Day.

Great. Thanks, Jakob. Thanks Klara, for the presentation. So we are now open for the Q&A session. So operator, we open that line now. So please?

I think we have the first question from Hassan Al-Wakeel, Barclays.

[Operator Instructions] The first question comes from Hassan Al-Wakeel from Barclays.

A couple, please. Firstly, can you talk about the order intake you're seeing in the U.S. and how customer conversations are progressing, particularly as it relates to changes in U.S. reimbursement with level 1 to 3 reimbursement implemented earlier this year and whether this is triggering lower revenues for centers and an elongation to replacement cycles? And then secondly, on China, you talked previously about confidence of double-digit growth in H2 and beyond. Q4 looks to be slightly softer than that. What was different versus your expectations? And how do you consider the risk of new entrants in China impacting your ability to grow double digit, particularly given this is a market that isn't expected to contribute to growth from many other MedTech companies?

Yes. Maybe I'll start China, then I get into the order intake in U.S. specifically. So in China, it's absolutely right. On revenue, we came at 6% orders, 7% in Q4. So that was slightly lower than double digit. It was one with the installation. So sometimes we operate at these margins. I do think we saw what we outlined back to growth second half. So that's important. The market recovering, that's important, strong market share, and we also expect to grow in this fiscal year.

Specifically on new entrants, absolutely, it's there. I mean, we don't want to name them. You know them. We see a host of smaller having struggling to really get a foothold and then we have one larger. But we compete, and I actually consider China being a good lab for strengthening the competitiveness of Elekta because when we compete in China, we can also compete elsewhere. I outlined when we look at units, we assess that last fiscal, we roughly had between 39% and 40% market share.

If I then turn on to U.S. first on reimbursement, there's actually a reimbursement crisis within radiotherapy. We see a lot of independent clinics struggling. It's less an issue for us, I would say, first, because we have not had our full share. So -- and -- but secondly, also because we worked a lot towards adapting the treatments. And there, the reimbursement environment is actually much more favorable. So you're well compensated when you do replans instead of one treatment with the same dose for 30 fractions.

So all in all, challenge in the U.S., but specifically for Elekta, we actually feel it serves us well. Does it then extend the buying cycle time? Yes, maybe it does a little bit but given where we are, we are less focused on what's happening in the market, but more focused on actually selling to existing and new customers and get back to our fair market share.

We'll move to next question, and that's from Mattias Vadsten at SEB.

Can you hear me?

Yes. Perfect.

I have two. So the first one, continuing on APAC, it was a bit surprising to me where it decreased in Q4. So I mean, you are heading in the right direction in Q3, I thought. So if you can maybe comment on Japan because you outlined that quite clearly. And I guess I don't know if Japan is around 15% of APAC. So it must be a quite steep decline there. So maybe, yes, explain Japan a little bit more in detail.

Yes. So the market in general is roughly 1,100 Linacs in Japan. And then if you assume a 5-year or 15-year lifetime, you can expect how many will be purchased every year. And we saw a dip relative to that equilibrium last year. The outlook, there's been change in the reimbursement code. So the outlook is actually favorable this year. So we expect to bounce back. And just give you a little bit of color. I was with the Head of Gastro Society in Japan. And there outlook is from government that in 15 years, we will see 24% more patients being treated by linac accelerators than today. So the long-term potential is good in Japan. But we saw both Japan, actually also Indonesia, where there's a big government tender being softer than what we expected. And yes, it also surprised us a little bit coming into '25-'26.

You had the second question, Mattias?

Yes. Thanks for that answer, very clear. Then it is this order criteria changes that you have. Some questions to that. So if you could give maybe some examples of orders that you no longer consider? What regions this is mainly relevant for? I guess in the end of the day, also anything you can say to give a sense of the margin improvement you see by these initiatives is helpful for us. And I would say in Q3 orders were quite good, if I remember correctly. So -- and I guess you have had this initiative done as well. And so yes, if you could comment on that a bit as well.

Yes. I mean, first, I'll just direct you to the nominal order intake. You look at it year-on-year. I look at it also a nominal. As such, it was not a bad order intake, but obviously with a significant decline to Q4 last year. So on order intake criteria, if I just speak at it broadly, we have, for years, seen that our order backlog grew much faster than revenue, and it became bigger and bigger to the point that we said we impair it. And we also said we don't want to see that happening again.

So for private sector orders in general, we need a prepayment. We need a very clear site delivery. So we have high -- it really boils into, we need to have high certainty that, that order materialized into revenue within a 3-year time period. Then we have, by the way, also on service orders in general tilted towards more yearly orders than multiyear orders. So I'll just come back to -- we did see some softness particularly in the Middle East, and I can give you some specific examples. But all in all, the way I encourage you to read it is that the order -- our book-to-bill of 1.04 is now indicative of future revenue growth. And that's at least how we look at it, and we wanted to create a stronger link between what we report at the order intake and what we expect as revenue going forward.

Then on a very specific example, I could tell you, we got some deals we said no to every exception from the rule. And some of them, we actually got prepayments, but that was from the distributors but we still didn't get pen to paper from the end user and then we said no. And we have said no to end year discounts, we have said no to airfreighting equipment into installed within the fiscal year. And that's part of the commitment we have been very clear on. We want good quality of earnings.

Can I just have a quick follow-up because I think it was a very helpful answer. This -- that you said around yearly orders on the service side compared to multiyear orders. Would you say that, let's say, I'm expecting you not to contradict but would you say it's a material impact on what the development that we see in...

It depends from -- yes, it depends a little bit from region to region. But I would say, in general, we think it's more favorable for Elekta to do single year service contracts with -- that we can then renew because we -- the cost, I wouldn't say it's captive, but we typically have a long-lasting relationship, and we have been very clear on it. We don't want to incentivize the behavior within the Elekta, whether it's an incentive to make a 5-, 10-year service agreement when it's better for the company to do yearly. And over time, we will reflect on should we show the full order intake or should we more show the solution order intake because it's actually more descriptive.

We move on to the next question. Erik Cassel at Danske Bank.

I also want to talk a bit on orders and maybe start on the stricter acceptance criteria. I mean, good color on it previously, but I just wanted to see if we can try to single out what sort of effect that had. For one, like if you can talk about the solutions part of it. What sort of orders did you say decline to book now and on what basis? And what was the impact? And then also then on service, what was the service impact overall? Any sort of color on that, I think, would be super helpful today.

Yes. I think actually, I gave a lot of color towards Mattias. So just in general, we just say no to all orders, recognizing them in our book-to-bill. They are part of our funnel if they don't live up to their criteria. And I believe I also said now half a year ago, that we hold our regional managers highly accountable to that orders coming in should materialize to revenue because we incentivize not them but salespeople on orders. So of course, if you pay commission, you expect revenue.

Yes. I appreciate that you gave a good qualitative color on it. I was just more asking on the numbers side. If you can say anything on numbers, what the actual impact was so we can sort of distinguish between what was more market driven, so to speak?

Yes. I think the best -- it doesn't directly answer, but I think the best guide we give you here is that we have worked fairly hard on getting an order intake that is more descriptive of future revenue growth. In the past, we saw our CAGR significantly higher for our order intake than materialized revenue, and that's not a sign of a healthy order backlog. And then the way we look at it, we look at it distinctly from service, from software, from solution, but we don't share these numbers here. Maybe we will consider it going forward, but we don't here.

Okay, fair. Then just a quick follow-up on the service yearly instead. I was just wondering, does that open up for competitive tendering on the service side of your business every year? Or do you still have some sort of, I guess, multiyear agreements on it to make sure that you actually get continued service?

I mean in many regions, we, in general, see a very high, what we call service attachment rate close to 100% in the mature market. Less so in development market and then we have a certain perspective on how to increase that service attachment rate, both within our product and in our commercial execution. So I actually feel we have untapped potential in the service area.

Okay. Just last question then. I saw that the regional adjusted margins were down quite a bit. And then obviously, global costs were down dramatically year-over-year. So I was just trying to reconcile is there any sort of change in reporting now that you're running a more decentralized business or costs just moved around? Or are there any like nonrecurring items, you can talk about in terms of like central costs when it comes to, say, more hedging, et cetera, so we can understand that a bit more.

Yes. So the Q4, I understand and it's a good catch. It's a little bit of a transition quarter. We changed a lot of reporting lines, 1st of February, and that then linked into cost centers. So we have a number of global functions now being decentralized into regions. So it's really the total number you can look at. And when we look at it, we can just say cost have come down very, very significantly, both supporting our gross margin because we actually had bill of material increase, but there was more than -- that was strongly compensated by service and installation efficiency. And then obviously, on OpEx and what I said in the beginning, stands, of course, that we expect now the cost savings to significantly exceed the SEK 500 million.

Next question is from Ludwig Germunder at Handelsbank.

Ludwig Germunder from Handelsbank. I'd like to start with a more general question on the cost savings, and pick up on where you ended there, Jakob. So you've been talking about those SEK 500 million in annualized savings before and now you predicted, I think, that you expect cost savings to exceed the SEK 500 million. Would it be possible to give any number of how much you expect them to exceed the SEK 500 million? And also a second question to that part, since you mentioned that a significant share of those were realized already now in Q4, would you be willing to give any sort of ballpark number, what the significant share is equal to?

Yes. I think we would like to reserve that for our CMD. That's our thinking because then we very quickly get into a more detailed guide for the year, and we think it's important we deliver that as a total package. But I think we take a step in that direction by saying that a significant in part has been achieved in Q4. We saw that accelerating throughout the quarter that I can say.

And then we do expect the amount to significantly exceed SEK 500 million. And we are ahead of plan actually on it. So -- but most importantly, Ludwig, if I just come back to, we did it really to accelerate the pace of the company. And I see that's happening throughout the company. But we'll give you a very detailed OpEx, but we feel good about where we are. And that's, of course, also evidenced in what we report in EBITC. It's quite a big improvement year-on-year by 4.5%. And a lot of it stems from these operational efficiencies.

Okay. I see. And then just one more question, please, on the impairments that you take in the quarter. Would you be willing to give any comment around why you're doing this now and not together with the order book write-down back in Q2, for example? I'm just trying to understand what's happened now and how to think about how things are going.

All right. Yes. So I'll do it very short and then to you, Klara because -- but the reason why we did it now was really coming into the company, first priority was on order intake. I do think we have guided that we wanted to improve quality of earnings. And then I wanted a new CFO in who could look at the balance sheet with a fresh perspective. So that was one of the first assignments you got. So we have your view, Klara?

Yes. No, exactly. I mean as a new CFO, I think it made sense to do that as part of me coming on board. So -- and I wasn't here when you did the rightsizing of the order backlog.

And just a quick follow-up, if I may. How does this impairment now change the year-on-year amortization levels going forward? How should we think about that?

They will go down a little bit, but the amortization levels are also, of course, dependent on what products that we commercialize and so going forward. So it's a give and take. But if you just look at the effect from the write-downs now, there is a small effect on the amortization going forward. But also some of the write-downs that we did are related to things that were not set to start to amortize in -- it was set to -- start to amortized in a few years also. So you need to -- it's hard to be super specific on that, but of course, a small effect, yes.

I think you should model that capitalization will equal amortization. That's at least our base assumption.

And we will have Kavya Deshpande from UBS coming up here.

Two from me, please. The first on the order revenue -- sorry, the order criteria. Am I correct that it was nearly applied in Q4? Is it stricter than the criteria that had led to the previous backlog cancellations that we've seen over the last 12 months? And if so, could we see a further review of the backlog going forward?

And the second question is on service revenue growth. So by region, it looks in the Americas, it was flat in constant currencies despite a very weak comp. Is there anything to call out specifically for Americas service sales growth in Q4?

Yes. So on the order intake, no, same criteria that has been applied throughout the year, I would say. So same criteria, same interpretation. Those criteria were not to the same extent in place Q4 last year and hence part of the comp difference. And then we did get fewer orders than expected, particularly in the Middle East. Yes. So on the service side, we do show overall growth for the company. I don't have specific comments on the U.S.

We'll move to the next question from Veronika Dubajova at Citi.

It's Giang Nguyen from Citi on behalf of Veronika. I have two, please, and one modeling follow-up for Klara if I may. So the first question is, and apologies back on the order intake growth. Can you comment on the dynamics in order intake in Q4 outside the Middle East and Southeast Asia? So the U.S., we talked about it, but how about EMEA, ex Middle East and the rest of APAC? And the second question is related to the reduction in absolute R&D spend. What was behind this in the quarter? And what's your outlook for gross R&D going forward? And then I will ask a follow-up for Klara after.

Yes. So we did have substantial impact by specific orders in specific North Africa and Middle East countries that led to lower than what we expected order intake in Q4. And then as I said, it really also linked into fairly firm interpretation of what we put in the order backlog. And I'll come back to what I've said that with the order backlog, it's now a more appropriate guide for future revenue growth. So that's where I would say we are on the order backlog. Yes, what was the second question again?

That was on R&D spend.

On R&D spend, yes. I don't want to give a guide for next year. But part of our OpEx savings is linked to a more focused R&D strategy and more R&D efficiencies, and we have been also delayering and setting up a new organization structure within R&D that reduces the overall R&D spend. But we still expect to maintain a very healthy and high R&D spend, gross spend in percentage of revenue because we can see there's a lot of innovation to be harvested.

And then you had a detailed question or...

Yes. For Klara, if I could. Can you provide any color on the FX impact for fiscal '26-'27 on revenues and also through the margin -- gross and EBIT margin, please?

Yes. So for the full year of -- sorry, you mean the full year of '25-26?

You mean the quarter, right?

No, sorry. Yes, for the coming fiscal year.

For the coming fiscal year. No, I don't think we speculate any currency effects going forward. So I don't think I'm going to -- is that okay, Peter, to say that?

Sure. Absolutely. We'll move to Oliver Reinberg at Kepler.

Three questions from my side. Firstly, just on inflation and tariffs. Can you provide a bit of color what you have in mind in terms of the inflation impact for the new upcoming year and whether tariffs are still a headwind or potential tailwind? And any kind of quantified guidance would be helpful.

Secondly, on services, I mean, it's usually a stable growth driver. We had, I think, overall globally now flat sales in Q4. Also, the full year was a bit more moderate with 3% growth only, while normally pricing should provide a support. I assume there's not any kind of large impact from moving from multiyear to single-year contracts, but any kind of color on that would be great. And then thirdly, just checking, it sounded like on the outlook for this year, which is a bit weak. Can we actually expect this to become more granular as part of the CMD?

Do you want to start?

Yes, absolutely. So when we look at inflation, it has two dimensions, cost and price. We clearly see on cost certain inflationary impact from logistics. We have -- we put tungsten in our machine. Prices have come up a bit. Now it's dropped by 55%, by the way. And -- but also other microchips that we put and apply in our software also. So we are under pressure on bill of material, but we expect to offset that by operational execution and then price increases throughout the system. It goes back to the point I said on price discipline. So we really come in with some very strong floor pricing requirement and margin requirement.

On service growth, yes. So we have a 3% growth, you can say it's modest. But it's service growth. And in general, our business is on the service side, predictable. Many of our contracts have a CPI clause. Those who do not have, we will review and renegotiate because cost is coming up. We don't want to be further specific on the outlook, except we'll come back to that at CMD, where we hope to be more granular or we expect to be more granular on this year and our midterm target.

We'll move to the next question from Kristofer Liljeberg at Carnegie.

Just one question on orders and this more stricter criteria. Could you comment on what you think the average time now from order to sales is? And the reason I'm asking is your comment also that the book-to-bill of 1.04 is a better indication of sales growth. So would that imply that you could grow 4% or so in the new fiscal year?

Yes. As I said, we don't want to give the guide for this fiscal year until we meet on the 17th of June. So book-to-bill, it actually varies a lot from region. So if we take our Asia Pacific region, it's faster, it's actually a little bit longer in more mature markets, but give and take, 12 months. But as I said, there are quite significant regional differences.

Do you have another, Kristofer?

Sorry, I was muted. but do you think it's fair to assume that orders that has been booked now this fiscal year is a better indication of sales growth in the new fiscal year than it has been for many years. I remember, if you go back to a long time, that was a pretty good indication, but it hasn't been for at least 10 years, maybe more.

Yes. So it's not a guide. But as I said, part of our quality of earnings is to make sure we have a backlog that is actually a better indicator for future revenue growth. That's really the purpose of disclosing it. So what I can say, it's a better guide than prior years. And then we will share the specific guide with you when we meet on 17th of June.

We are now open for the last question for this session, and that's from Sten Gustafsson at ABG Sundal Collier.

So a lot of good questions on the order criteria. So I think we can maybe move to something else. In terms of sales and just to clarify, you said something like your sales growth for the quarter would have been in line with previous quarters if it wasn't for the Middle East. Can you confirm that I heard that correctly and preferably also maybe quantify the -- what you're referring to? Is that like 2% or something like that?

Yes, I think we would have been 1%, 2% organic growth if we didn't have specific projects being delayed in the Middle East.

Okay. Perfect. And my last question then would be, do you think that some clients mainly in the U.S. or other regions are hesitant to book Evo until they see the new Siemens machine coming up during the fall or expected to be launched in the fall?

It's not what we see, Sten. I mean we see our funnel, our orders developing as per plan. But keep in mind, we come from a small base. So we are the challenger, and not the incumbent. And there is a strong systemic demand for having a vendor competition in the U.S. So we actually just don't see it play out. And that's why we also call out here, we expect double-digit order growth in the U.S. for this fiscal.

And that concludes the Q&A session for the Q4 earnings call. And maybe Jakob, some final remarks before we close the call.

Yes. So we closed the year. It has been an eventful year. I think a lot has been achieved, but we -- as I started out by saying we are not at full potential. We are not happy with the top line growth, Middle East and up Middle East, but it was in line with our plan because we are focused on reset and stabilized. Now we need to improve the underlying profitability. Here, I will say the quarter is a significant step in that direction. We see a very significant EBITC uptake from Q4 last year. We see that translate into cash flow. We see our net debt coming down. But as I also ended up by saying long term for Elekta to be at full potential, we need to grow at or above the market.

Great. Thank you, Jakob, and thank you, Klara, for the first presentation here at this call. And by that, we close the call. And I look forward to see you all at the CMD in Stockholm on June 17. There is still opportunities to sign up for that on our web page. So please do that. And it's going to be an exciting event. Thank you, and goodbye.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.

Hi, and good morning, everyone. My name is Peter Nyquist, I'm heading up Investor Relations here at Elekta. With me here in Stockholm, I have our CEO, Jakob Just-Bomholt. I have our CFO, Tobias Hagglov, who's doing his last quarter as well as our incoming CFO, Klara Eiritz, who will not present today, but she will be available here in the studio.

Tobias and Jakob will present the result, as always, for the fiscal third quarter -- fiscal year 2025-2026, third quarter. We will start the presentation with Jakob giving away the takeaways from the third quarter as well as an update where we are in the strategic execution and the change of operating model and the cost savings related to that as well. Tobias then will talk about the financials and the Elekta's outlook. After presentation, as always, we will have time for questions and answers.

But before we start, I would like to remind you that some of the information discussed on this call contains forward-looking statements. This can include projections regarding revenue, operating result, cash flow as well as product and product development. These statements involve risks and uncertainties that may cause actual results to differ materially from those set forth in these statements.

With that said, I would like to give the word to you, Jakob. Please, Jakob.

Thank you, Peter. Thanks, and welcome to all of you. So before I get into the quarter, let me just share some overall reflections. It's a solid quarter, but Elekta, we still are not trading at what I believe is the long-term potential of the company. So that calls for a clear strategy. It calls for decisiveness. It calls for execution, bias to action, bold decisions. And I would say we are on that journey.

I would say, specifically related to the change in our operating model, I really appreciate the support from leaders within Elekta, Elekta colleagues. We're changing a lot. We are changing the structure. We are changing layers. We are letting go of people who are highly valued and deeply competent. But we had to change coming back to my point that we are not trading at full potential. But the support in getting there has been spectacular. And as I'll outline, essentially by the end of this week, we are running consultations in U.K. We will be concluded with the change we outlined end of November. That's very good. And then big thanks to you, Tobias. You have ensured that we have had a very orderly transition in leadership within the finance function. To you, Klara, and welcome to you at this call, and we look forward to you presenting the numbers at our Q4 and annual accounts.

But let me then turn into what this call is really about our Q3. As I said, it's a solid quarter. We have to recognize significant impact from FX, and we will also see impact coming into Q4. And then clearly, also in line with the guidance we gave at Q2, a significant impact in reported EBIT from a restructuring charge of a bit more than SEK 400 million. We stand by the guidance that it will be less than SEK 500 million.

On orders, I would say good, a book-to-bill of 1.17, it was 1.15 last year. Keep in mind that typically, Q3 is a good order intake quarter because we roll on a lot of the service contracts, particularly in Europe, that given quarter. And then we saw -- and I'll come back to China, we did see order growth. We did see revenue growth. So that's pleasing, but it was also expected. On U.S., I'll come back to. But there year-to-date, we have seen good orders coming in. It was also much needed, and then we continued the momentum on Europe. So all in all, when I look at the book-to-bill rolling 12 months of 1.09, I think it's healthy. We would like to see it higher, but it's healthy.

In terms of organic growth, we are at 2%, continue to see good momentum in Europe. And as I said, China returning to growth. And we stand by the view that we expect both on orders and revenue double-digit growth, probably around 10% in China for second half of the year. And then what our Chinese General Manager, Anming outlined in the strategy update, we do see the market bouncing back almost to pre-anticorruption levels in terms of units.

Gross margin at 38.3% supported by product launches. And also pricing, we actually do see a bit of tailwind on that mix and pricing, but a headwind on the cost, and that's a big focus area. I'll come back to that later on. But of course, it's going to be a significant focus area for us going forward.

EBIT margin at 11.9%, a bit higher than last year. But just keep in mind, on a comparable basis, we get headwind from less capitalization, more amortization, relatively speaking. So adjusting for it, the EBIT cash margin that we look a lot at, at Elekta is significantly higher, and you will outline that, Tobias, on rolling 12-month basis is really good news. I can say my sincere hope is that coming into next year, the EBIT cash and the reported EBIT will be roughly the same number, meaning that our amortization and capitalization will be a match. Let's see if we get there.

In terms of cash flow, less good than last quarter -- same quarter last year, but we should keep in mind that overall, year-to-date, we see good cash flow improvement, and we have paid out roughly SEK 100 million in the quarter linked to restructuring charge.

So if we move on to the next page on commercial development, Americas, a decrease of 6%, fundamentally, of course, not attractive. That's why we have a must-win battle to address it. We did outline last time that we were positive on getting Evo approval. I think it's important as part of our commitment that we have a good say-do ratio, and we were, of course, pleased to see that on 16th of January, we could announce Evo approval.

Year-to-date, as I said, we have double-digit order growth, substantial double-digit order growth in the U.S. alone. That's also needed because our decrease in revenue reflects a depleted order backlog. So we have a lot of work ahead of us. But of course, every quarter that goes well and is growing is a good quarter. And year-to-date, we have been doing well. We have sold 2 customers on the promise of Evo upgrade. That's now happening. And we are building our funnel going forward. But you shouldn't expect that it's just going to be a huge splash going forward because a lot of the orders have been already taking year-to-date. But of course, the customer interest is good going forward, and we will look at commercializing Elekta Evo the way we have done in Europe. We continue to see growth in South America linked to very strong order intake prior years.

On APAC, as I said, and as expected, China is returning to growth. We do see a little bit slowdown in other large countries, notably Japan, also Indonesia, where there's a big tender. So the market is really awaiting what will happen there. And then on EMEA, we see a good increase, continued strong momentum in Europe. And of course, we need to sustain that going forward.

And then I'll just flag here, Middle East could potentially impact timing of installation. It's way too early to indicate how many we have a sense for what are the installations at risk, and it's not going to be material, and it will just be a time delay if that happens from Q4 to Q1. So all in all, I would say a solid quarter commercially. But of course, we would like to see that number go up. And that's what our strategy is all about, yes.

So if we take the next slide and look at our must-win battles, this is what we outlined end of January. We feel very good about them. They have been working through. Some we are far on, some we are less far on. And I'll give you more details on simplifying power speed. But we did this. I'll just remind you, not to save cost. Of course, we take that in, but we did it to increase velocity of our decision-making within operations, within commercial and most notably also within our innovation department. We are delayering. We are empowering. We are driving culture. It's part of performance management. I think it's going to deliver a lot of good results. And I actually start to feel that the puzzle is getting assembled. We are moving on from having it as an initiative that we needed to execute on to kind of things are settling down.

And as I started out by saying, thanks to great work by the leaders and colleagues at Elekta. It's a lot of change. We have asked people to come back to the office because we feel being an innovation-driven company, we can really benefit from problem solving together rather than at a distance.

Two focused innovation. There are a lot I could say, but there's also a lot that could be used against us commercially. But I would highlight that we continue to invest in innovation. We believe there is significant need for our solutions going forward. Our current product portfolio will become even better going forward linked to what we have in our pipeline, but we will do it more focused. We will have a stronger commercial lens on it, and we will unfold more of that thought process when we meet at the Capital Market Day in June.

Then our third initiative, expand in China, win in the U.S. China is important for Elekta. We are market leaders. We did unfold what does that mean, but it really goes into localizing Elekta in China. We are both from a product point of view, we have a very, very strong organization. We are localizing our supply chain, and then we also continue -- we have both local products, and we are saying should we have even a broader made in China for China product portfolio. So we actually feel good about our China position, not least also because what we said is that the market is going to recover.

And then with Elekta Evo, it's now about competing in the U.S. This is Elekta's biggest opportunity because this is the market where our relative share is the lowest compared to other places. And I believe we have every right to compete in the market. That's what I hear from our customers, there is systemic demand for having strong competition, and we are ready.

And then lastly, the fourth on continuous COGS reduction. I would really say in today's quite volatile world, it has 2 dimensions. And one is to continually address our bill of material, our ability to install and service our installed base. So that's on cost. A lot of focus will be on continuous engineering to update our tech stack and work with our vendors to continuously increase quality, lower cost. But we also focus a lot on pricing to ensure that we can mitigate certain cost increases in today's volatile world. So we are establishing a pricing desk here in Stockholm. I feel good about that, and we certainly have potential to become more dynamic in how we approach that top line part of our business. So that's where we are.

If we then go into our operating model, I have to say, actually, I think we have done well. And by the end of this week, we will almost have executed all the changes that we outlined to you end of November. So that's in 3 months. And we are now at 83%, but the remaining 17% is due to a consultation in U.K., which is happening this week. Of course, it's been tough for us within Elekta, but it will serve the company very, very well to clarify roles, responsibilities who are accountable for what, reduce layers, decentralize, push decision-makings to those who has the best knowledge and then move with a bias to action.

So we stand by what we state that we will have a run rate savings without jeopardizing commercial or innovation of more than SEK 500 million, full impact Q1 next year, i.e., from 1st of May. The mix is 30% COGS, 70% OpEx. We're still simulating, but that's our best evaluation. Restructuring charge to be taken this year between SEK 450 million and SEK 500 million. We have taken SEK 417 million here in Q3. And then as I said, we are moving well. And then in parallel, we are now linked to budget and also, Klara, with your support, we are now assessing all the discretionary spend because I do think there is a potential for Elekta to just be very, very, very prudent in terms of where we allocate resource and cost and that should also support us into next year. So that's where we are.

And then with that, over to you, Tobias.

Thank you, Jakob, and good morning, everyone. So let's look into the third quarter then a little bit more in detail. And I think you, Jakob alluded to several of the points here on the slide. Net sales in the quarter increased by 2%, and we had a growth here in Solutions by 1% and Service by 3%. We can see a continued strong momentum in Europe, supported by our product launches, Elekta Evo, Elekta ONE. And also when looking into our Chinese operations, as you know, this has been impacted by the anticorruption campaign here over the last years. It's actually returning here to growth in the quarter after 2 years, which is a very positive signal.

Then moving down in the P&L, looking into the gross margin, we have an improvement here of 120 basis points. In the quarter, we have a negative impact from tariffs of 100 basis points and then furthermore from FX of 130 basis points. But including this, we are improving our gross margin. It is supported by the product launches. It's also, as you heard Jakob mentioned, supported by general price improvements that we see across our products.

If we then look at the operating margin, we have an improvement here of 20 basis points, amounting to 11.9 percentage points in the quarter. This is driven by the improved gross margin. We also can see that we have lower R&D investments and also lower admin costs here year-over-year in the quarter. And what also Jakob mentioned here is that we do have lower capitalization of R&D and higher amortizations. And if you actually would look at the cash EBIT margin, adjusted cash EBIT margin is actually up 170 basis points in the quarter year-over-year. And then also here, we do have restructuring charges here of SEK 417 million reported as items affecting comparability, which is also then reflected in the earnings per share.

What we have seen in the quarter is a quite a rapid move of the currencies. And here, we have outlined the effect here both from operations and then also sorted out the currency impact. So what we see in our P&L is that our net sales are impacted by more than SEK 500 million negative in the quarter from the FX moves. And in terms of growth, this corresponds to minus 12%. This is predominantly driven by a stronger Swedish krona versus our main revenue currencies, the U.S. dollar and the euro.

When you then look further down in the P&L, we have a negative impact on our gross margin of 130 basis points, which I just mentioned, and furthermore here on the operating margin of 180 basis points. And in addition to the translational currency impact, which I just mentioned, this is also driven then by the dollar depreciation versus our main cost currencies in euro and pound.

If we then look at the cash flow, and Jakob also mentioned this, we do have a lower cash flow year-over-year in the third quarter. Still though that year-to-date, our cash flow is more than SEK 400 million better than last year. We have also had a more smooth development of our working capital in the inventory development, especially. In this slide here, we have sorted out the effect of restructuring provisions and then here stated more solely the working capital development in the quarter, which was stable.

Then investments are lower than last year, both here in the quarter as well as year-to-date. And taxes, interest, net and other are on the same level as Q3 last year. The cash flow generation this year has led to that we have a net debt decrease of more than SEK 200 million compared to Q3 last year.

Then looking at the trends here, I was talking about the currency impact and in nominal terms, we have seen a bit of a slight decline of the revenues, although currency adjusted growth here in the quarters. But when you look at it, and I was talking about the improved gross margin, there is a steady trend here, strongly supported by the product launches and price improvements and also which, of course, then with the must-win battles that Jakob was on will be further supported by the gross -- to the gross margin development. So a steady improvement here over the quarters on the gross margin. We have also an improvement here on a 12-month rolling basis on the operating margin improvement. And if you then would look again at the cash operating margin, it's a strong improvement here, which has been ongoing here quarter-by-quarter sequentially.

Then looking at the cash flow. We have a lower cash flow in Q3. But if you look at the -- as well as the year-to-date, you look at the 12-month rolling, it's a significant stronger cash flow over the last 12 months than what we had here a year ago.

And if we then look at the outlook, we reiterate our '25, '26 outlook. We expect net sales in constant currency to grow year-over-year. And we also expect a negative impact here on earnings and from tariffs in Q4 as well. And the midterm targets, no change there, and they are confirmed.

So by that, I would like to, before the Q&A session, say a big thank you to all here over the years here. Working with you has been a pleasure.

And I then hand over the word to you, Jakob.

So the closing remarks should reflect what you just heard. So solid quarter, solid performance. We have launched Evo now in the U.S. also. We are building up the funnel, good order growth year-to-date. Obviously, we have strong currency headwind and also increased tariff headwind despite gross margin is at 38.3%. And as you outlined, Tobias, with an improving trend, and we need to sustain that. And then we focus a lot on what we can control as part of our must-win battles, super important, and we are well on the way of resetting how we operate and how we think and how we execute within Elekta. And by the way, it will also lead to cost reduction of more than SEK 500 million. And then we focus obviously on cash flow generation also. That's also why we can report here year-to-date an increase of almost SEK 0.5 billion.

Great. Thanks. And before we start with the Q&A, I just want to remind you that we have the Capital Markets Day here in Stockholm set for June 17. So it will be here in Stockholm. More information will be distributed later on.

And with that, I think we have -- yes, and this is the calendar for the following report. So the next one comes in May 28, our Q4 earnings report.

So with that, I would like to open up for questions, operator.

And I think the first question comes from UBS and Kavya Deshpande, please.

Can you hear me?

Yes, we can hear you, perfect.

Two, please, both on China. The first was, would you be able to share how much China order growth actually was in the quarter and remind us how this compared to Q2 and Q1, please? Just because you've been quite specific about the target to grow orders around 10% in H2. So it would be a bit helpful to get some more specificity on the year-to-date trend. And then just more generally, would you be able to remind us, please, why you think the radiotherapy category in China differs to other capital equipment markets where we've obviously seen this acceleration in share shift towards Chinese players over the past year and a bit. Specifically to United Imaging, you look like they're getting good traction with their new O-ring linac and adaptive radiotherapy product as well, please?

Yes. Thanks, Kavya. Good questions, of course. So we'll stick to second half, we say double-digit growth on orders, but we have positive both on revenue and orders here in Q3. So that's good. And it is linked to market recovery. Of course, we have also asked ourselves why are we an outlier on China versus other MedTech companies. But I think the short answer is the market is heavily underpenetrated. You have 1.8 linac accelerator per capita, and there is a growing cancer burden in the country. So there has now been pent-up demand, and we used to have 300 linacs, it dropped to 170 and now it could very well be 260, 270 linacs going forward. So we are not entirely back. Then in terms of competitive situation, we also outlined, there are a lot of local ring-based competitors, but there's really one who has traction, that's United Imaging. Despite, I would say, and also because of we have localized our products and our market presence, we remain the market leader. We have lost a bit of share, but we remain in the high 30s in terms of market share, and that's also our aspiration going forward.

And we'll move to the next question, Kepler Cheuvreux, and that's Oliver Reinberg.

Quick questions from my side, if I may. Firstly, can you just provide us a bit of color on the order intake composition? I would assume that a large part is driven by Evo. Can you just confirm that ideally quantified? And if that's the case, what kind of product categories you have seen any kind of declines? That's question number one.

Secondly, just looking forward into Q4, we had a very strong comparison in terms of gross margin. I just wondered if you can share any kind of thoughts on that, what to expect going forward now? And lastly, just on strategy, Jakob, I just wondered, can you just discuss how you think about the critical size of Elekta overall and obviously, you have to pay for your marketing installation service infrastructure. How easy is that? And related to that, how do you think about the role of partnerships in the past, there was always a discussion of the importance of independence. It would be helpful to get your thoughts on that.

All right. I'll take the very easy one first. Gross margin Q4, we don't give that guidance, I'm sorry. We will stay with our guidance. We believe in organic growth positive for this year. So I hope you understand that. In terms of order intake, what I will share is that, of course, we just got the approval in U.S. mid-January and our quarter ended January. But we have seen a very substantial order growth in the U.S. It's still too low, but very substantial relative to prior years linked to the expectation of Evo getting approved. And as we got more certain, then we saw that pick up.

We are now converting that order backlog from Versa HD into Evo. So that's working. We are, by the way, also upgrading to Iris. And then we can just see the funnel opportunity. I would dare to say, quite rapidly expanding in terms of prospective customers having interest. And of course, we hope to see the same commercial traction in U.S. And why shouldn't we, as we have seen in Europe, and there are roughly 2/3 of what we sell of new solutions are Evo related. So that gives you a good indication.

And it's also a nice system, I have to say it's versatile, it's adaptive, it's competitive. So we'll continue to build from that. Then the last one in terms of Elekta's critical side, I would almost say I would love to answer it. It will probably also take 10 minutes, and it's certainly a worthwhile topic for our Capital Market Day. But if you will get my helicopter perspective, then relative to our main competitor, of course, we are smaller. But I would just dare to say that we are the focused radiation therapy market, and that comes with a lot of benefits.

Then we have assessed our product portfolio. The product portfolio logic is absolutely sound from Brachy to Neuro to linear accelerator, CT, MR to supporting software suite. So the logic stands, and we believe we can build that ecosystem that is relevant. And then there will be a choice. You can have Elekta. We are a little bit more open, not fully open, but a little bit more open than others or you can go for a more closed system. And that's good. We want to give customers choice, and then we want to compete for our fair market share.

We'll move to Handelsbanken and Ludwig Germunder.

I have a few. I want to start with the cost savings program, please. And you've been talking about it, of course. But would you say that the underlying impact from savings during this quarter has been in line with your own expectations? Or would you say that the -- for the quarter has been above your own expectations in terms of how fast you've been able to get the impact from it? That's my first one.

As expected, very little impact this quarter. It will have a significant impact in Q4. But the model we did was really focused on Q1 and there we are, I would say, on par with maybe a little bit above our expectations.

Okay. And just to make sure regarding this restructuring charge of SEK 417 million in the P&L, is it fair to assume that most of this was a cash expense in the quarter as well?

No. Most of it is actually a provision, but you also have a certain degree of payments in the quarter cash cost.

Yes. So what we guide is roughly SEK 100 million was paid out in the quarter. That means remaining SEK 300 million remains to be paid out and that's in line with the expectation. And then we will have some further provisions to be made. So the guidance we have given is SEK 450 million to SEK 500 million, of which we have paid out, if you will, SEK 100 million.

Great. Very helpful. And then just one final on the Middle East situation you mentioned. I know you said it's too early to quantify, but would you be willing to give us any context here, like how much of sales or orders are related to the region where you see a risk of any delayed installations? Just to get some sense on how to think about it.

Sure, sure. So -- but take it with a grain of salt because, as you all know, the situation is fluid. But in terms of potentially impacted installations and thereby sale would be 2% of Q4 sales. So I would say it's a very manageable amount, and then we follow in real time those installations. That number may change given where we are and what we see, but I would still dare to say it's manageable. Then our perspective may look different in a week's time.

So we'll move to Mattias Vadsten at SEB.

Can you hear me?

Yes, we can hear you perfect.

First question, maybe another one that takes 10 minutes to answer, but you talked about commercially driven innovation in the presentation. So if you could give just some examples on what this statement really means, focus on software vis-a-vis hardware, new platforms versus refining current platforms, et cetera, et cetera? That's the first one.

Yes. It's also a fundamental question, and we outlined a little bit in the strategy outlook. We'll outline more, of course, and find the boundary between what we want to say and what we can say and so forth. But yes, commercially driven means a little bit less big platform, more modular-driven innovation. It's deliberately vague. Sorry about that, Mattias. But I would say we reduce the risk profile in our innovation. We increase the traction.

And I would say when I -- and we spent a lot of time over the last 4 months in assessing our innovation pipeline. I'm also hands-on involved in it. I have to say. We put a customer lens on and a commercial lens on. And you should expect that over the next 24 months, we will significantly enhance the portfolio of our CM linac portfolio, and that goes both for hardware and software. So I feel very good. That's also why we are willing to fund continued investment. As I said, we are not asking our investors to underwrite, an increase in gross R&D, it will come down a little bit, but we should be able to see more output. And then let's not forget, it's not only resources put in, it's also how efficient you are. So we are also structurally addressing the efficiency within our R&D engine, if you will.

And then you talked a little bit about Evo and the comparison to Europe and so on. But from what you've heard and seen now in terms of customer behavior, customer feedback, what conclusions can be drawn if you compare sort of what you've seen in Europe since sort of late 2024? And also, if you could give an update on sort of upgrade versus new linac?

Yes. If I take the latter first, then given that we have sold quite a few units this year with the promise of upgrading technical obsolescence against the fee, then you can say we have essentially already sold Evos in the U.S. and we'll continue to sell Evo. Then we are now upgrading. We will build reference sites. We will prove -- provide clinical evidence. And it matters a lot that we shouldn't ask U.S.-based customers. I met some of them here 3 weeks ago in Holland, but then they had to fly to Europe. That's not very efficient. So we are now building our reference sites with Evo so we can demonstrate the value.

And then we look at our funnel and so far, so good. But I'm not going to commit to a number. I think it's too early days, but why -- I would just say why wouldn't we see the same demand in U.S. as we have seen in Europe. And there, we have just seen a good traction. But I would rather demonstrate it through actions and promise here for the future. But so far, so good, I would say.

Perfect. And then I will squeeze in one final quick one. So you said book-to-bill was 1.3 first half in the Q2 report for China. Could you give that year-to-date figure now, book-to-bill for China?

Yes, it's above 1.1 for China. And so we will end up with a book-to-bill. I'll just do the math here, but it will be above 1.1. And that's an important milestone because we have seen a depletion in our China backlog. So we actually had a good revenue year after the anticorruption, but we were depleting the backlog and now we are building the backlog again. And that's why we essentially feel pretty okay about our China position, recognizing everything that is said in terms of competing. And we're also using it, I would say, we very often, as Europeans, we are a bit defensive. I look at it differently, how can we tap into China speed? How can we build competitiveness in China? And if we can compete in China, when we can, we can also take that know-how elsewhere in the world.

We'll move to Veronika Dubajova from Citi.

I'm going to keep it to 2, please. My first one is just to understand the sort of process of converting some of the older orders in U.S. to Evo. Can you sort of maybe talk through from a customer perspective, how that works? And also just from an accounting perspective, when you do trigger that conversion, does that show up in the gross order number? Or is it just because it's a conversion of an older order, there is no incremental impact on that? If you could just touch upon how that works. That's the first one.

And then obviously, you guys are pushing ahead with the restructuring with the strategic changes. And so it would be great to sort of just get a little bit of a pulse on the organization and what's the feedback? Where does morale sit? Anything that sort of is worrying you in terms of how the organization is dealing with the changes that you put into place?

Yes, I can do that. So if we talk about upgrades to Evo, that will now happen and there will be incremental charges. I don't want to share the specifics, but it's substantial, and then it will be triggered from a revenue recognition point of view when we install the units. That's typically when we recognize the revenue. So that's how it's going to go.

In terms of restructuring, as I started out by saying, I have to say, I've just been super impressed all around with the behaviors from, I would say, owners to leadership to employees. We knew we needed to change. And then at the same time, we empathize because the change is tough. And it is not only in terms of fewer people, it's also the way of working. And I have to say, I've just seen so many people who work, including a few here in this room until very last day, and it's massively impressive.

I think the morale is good, where we -- you can say, biggest impact on morale is actually we have implemented a 4-day in the office policy. But we do that because Elekta, our purpose is so important. We need to innovate for customers and patients around the world. There's more than 2 million patients being treated on our ecosystem, you can say. And we feel that we need to increase momentum and velocity. And part of that is inspiring each other.

But all in all, I have to say I'm very pleased with where we are. We haven't lost focus on commercial, on customer and cost and so forth. But I have to say there's a lot more to do. So the must-win battles we have outlined is really meant for the next 24 months. And as I said, as part of that must-win battle 1, we are now addressing our discretionary spend, and we are just going through line by line. And that's important because we only want to spend money where it adds value either for our customers, patients and investors.

And just to clarify, so when you upgrade, I don't know, Versa from to Evo. What's the impact on the order backlog? Do you recognize the whole order, the price uplift? How does that work?

Yes. Then we -- once we upgrade, we recognize it in the order backlog. And when we install it, we recognize it in revenue. And obviously, it's quite good margin perspective. Yes.

Yes. But from an order perspective?

Yes. So when we then commit to the order, then there is an order backlog increase. But the way you should think about it, you will not see it in the -- yes, you will see it, but it's not going to be that significant in the total order backlog number.

And it's the upgrade value. It's not like we double counted here, Veronika, if that's your question.

Okay. Perfect. That's just what I was trying to get at.

The next question will come from Kristofer Liljeberg at Carnegie.

Three questions. The first one is you said that you're looking at other costs here besides the restructuring program. So should we interpret that as you expect or that you see potential for more savings than the SEK 500 million in the next fiscal year?

Kristofer, you should interpret what we have said is we are committed to run rate of more than SEK 500 million. And now we'll just -- we are running through the machine and then let's see where we get to.

Okay. And I don't -- I understand you don't want to be specific, but just to clarify, do you expect China and U.S. sales growth to be positive now in the fourth quarter, given what's happening with better order momentum?

I think the only thing I'll say on China is we have guided towards second half growth, right, double-digit growth, probably around 10%. On U.S., I will put that under the overall group umbrella and say we guide at a positive organic growth for the year. I know we are vague, I hope we can be more precise, but I'll stick to the guidance here now.

Okay. But when you say 10% in China, is that for orders or sales?

Both.

Both. Okay. That makes sense. And then my final question, I noticed you said here that you would like cash EBIT to be in line with reported EBIT, i.e., a much less positive effect from capitalized R&D. In such a scenario, would you say that this midterm EBIT margin target of 14% is still valid, i.e. that cash EBIT improvement would be even bigger.

Let's get back to at our Capital Markets Day. But if I just address in isolation, and I think many of you on this call will agree, if we look a couple of years ago, difference between reported and cash-based EBIT was 4%. Last year, it was 3%. This year, it's 1.3%. And it's complex. And I personally like to keep things simple. So within Elekta, we look at gross R&D spend. And why not then take the next step in the simplification and match capitalization with amortization. How that will be executed, we are evaluating. But I do think I said that we are committed to improving the quality of earnings, and I think this is an important part of it.

So next question, we'll go to Sten Gustafsson at ABG.

Two questions. And the first one is a follow-up. Did I hear you correctly when you said that you expect to see a substantial part of the cost saving program to materialize in Q4? I think previously, you talked about it to come in Q1 next fiscal year. But do you expect to see it already now in Q4?

Not full amount, but substantial. So you heard correctly, Sten.

Very positive to hear. My second question is related to China. Obviously, you book orders there now for Evo, but have you also started to book sales? Or when will you start installations of Evo in China?

So it goes into what I outlined here that we expect in second half, both from orders and revenue growth of around 10%. Specifically on Evo in China, yes, we got approval. We also see it's a relatively smaller part of the overall portfolio from a commercial point of view. We sell Harmony Pro also with adaptive treatment possibility.

Okay. I mean, but you are allowed to make installations of Evo in China now?

Yes. That's right. Correct.

And I would like to welcome in David Adlington at JPMorgan into the call to ask question.

Just on the U.S., please. So firstly, I assume you saw some pent-up demand on orders with the approval of the Evo. I just wondered if you could sort of quantify how much of that was pent-up demand and how you're expecting orders to develop in the U.S. in the coming quarter? And then secondly, I just wonder if you've seen any customer reaction to the Varian announcement that they're launching a new platform in the late summer.

Yes. So if I take Varian first, David, I don't comment on competitors' product. We are very well aware, both from an IP point of view and in the market performance. I think it's actually fundamentally good because it's more adaptive, and we are just very early on in the S-curve of making adaptive radiation therapy treatment the main product. So I think for more options to a customer will expand that piece of the market. And then we look at our own innovation road map and feel actually good about our relative strength today, tomorrow and in 2 years.

Specifically on U.S., I mean, obviously, it's helpful to have your best product available for commercialization. As I said, part of that pent-up demand was taking in the quarters up to. So we also had a good Q3 and some of the orders we had prior to FDA approval because we included a provision in the contract that they would be upgraded once we got the approval. And now we have the work ahead of us in building the funnel, building the reference sites and really get into the track of what we have seen in Europe.

I would say -- so I don't want to give specific guidance. I don't think that's appropriate for Q4. I would say that overall, we are not getting our fair market share in U.S. That's why we have it as a must-win battle. We now have the product portfolio, I would say, to compete. We have set the organization. We know what we need to do. Now we just need to do it and demonstrate it in actions actually.

Maybe just a quick follow-up...

Go ahead.

A quick follow-up?

Yes, absolutely.

Just wondering, with the announcement that they are launching in September, has that seen any customers who were potentially looking at Evo just sort of pause and wait to see what's coming in September?

It's not the feedback I'm getting. I mean, I look at our funnel and how it develops and that part looks okay.

Next question will go to Richard Felton at Goldman Sachs.

Two for me, please. First one is on one of the must-win battles winning in the U.S. So obviously, having Evo in the market is an important part of that. But can you talk about what you're potentially doing differently from a commercial execution perspective in that market going forward? And then the second question, just coming back to China, you alluded to a little bit of market share losses, but there's still a market share in the high 30s in that market. Could you just clarify, are those comments based on the installed base overall or share of new placements?

China share of new placements. Basically, we look at how many linacs been purchased, and it's very transparent in the China market and then what has been our share. On U.S., yes, I can share a bit. I mean, it, of course, always starts with suitable product, but then commercial execution matters a lot. And that's going back into our decentralized model. So we are pushing P&L responsibility to our 5 regions. We report here 3, but we have 5 reporting directly to me. We have delayered the organization. We are centralizing part of the pricing, strategic pricing framework, but otherwise, we are out there. Then we have spent a lot of time mapping our existing installed base, what our retention strategy.

We look at aging profile, we look at flips, we look at greenfields. We are mapping out the market. And then we really -- and I have to say, I'm pushing a lot on let's build the funnel because funnel should be a predictor for order intake, which is -- should be a predictor for revenue generation. I'm not saying we are there yet, but we are doing quite some swings, I would say, in structured commercial execution, but that goes for all regions.

And then maybe I'll just say -- and then at the same time and very, very importantly, we recognize we are on a burning platform, and we are deeply frustrated about where we are in U.S., not least because I think it's good for our customers and our patients or their patients to have a strong competitive alternative. We think we have that now. They are part of our portfolio. We want to do even better, and that's what we are addressing in focused innovation, and we need to address it fast.

Great. Thanks, Richard, for those questions. We move to SB1 Markets with Johan Unnerus has the next question. We lost you there, Johan or maybe you. Can you hear us?

Can you?

Yes. Now we can hear you. Good.

Can you hear me? Yes. I think we will double [ command ] to that. Yes. A follow-up on the funnel in the U.S. Evo is, of course, extremely important in the U.S. and clearly a very important bit of that win -- must-win battle. What about the funnel so far? Can you see any new Elekta? Any orders coming from centers and accounts which are new to Elekta? Or is this Elekta users already?

Yes. So if we look at it, funnel is important. Let's not forget funnel on service and our TPS OIS software is extremely important. We have Brachy and Neuro also important. But if we get to linac, I mean, quite pleasing, we have done some flips taken from competitors. I think that's very important. When they flip us, we flip them. And then it's less a greenfield market actually because it's so mature. If we look at the funnel, I would say I think we are on track in building it. I still -- before I commit to saying that we are at the same track as Europe, I want to see that converted in execution. But as I said, we just got the approval. So I think it's also okay. But so far, so good. So far, so good.

Yes. And a follow-up to that, obviously very important to have centers and reference sites. You referred to that earlier. What -- how long will it take to get that in place, 3 to 6 months?

It will happen very quickly. It will happen very quickly. Some of them here in Q4 also.

Good. And what about the sense of time from order to installation in the funnel? Are most of them fairly sort of imminent orders, so to speak?

I don't want to give the specific here in terms of maturity from funnel to orders. And then the way you should think about it is from order to revenue, it's typically 12 months, but with significant variations from order to order. But it's, of course, important if you look at U.S., we have a very favorable working capital. I mean people pay upfront and so forth. So I think it's not only from a revenue and EBIT, it's also from a cash perspective, favorable that we get our fair market share.

Is it fair to say that, that dynamic is in line with what to be expected in the linac hardware market in general? Or could it be [ offset ]?

I think if it relates to Evo, we are on expectations, but I still would say we need a bit more time. We got approval mid-January. We have received quite a few orders. You saw order intake Q3 linked to Evo. So that's good. I look at year-to-date, and I can see a substantial, substantial increase in U.S.-based, not Americas-based, but U.S.-based orders. I like that. Let's see how we sustain it over the next couple of quarters and our ability to then convert funnel into actual wins. That's what I'm looking at.

We will now move to the last question for this session, and that will be Ludvig Lundgren at Nordea.

So a bit of a follow-up to the Evo and the U.S. So I think in Europe, you actually initially saw sales being driven by Iris upgrades for like previous Versa installations. And as these have shorter lead times than new installations, so I just wonder if you will expect to see a similar pattern in the U.S. And then also, if you can remind us of the margins of these type of installations.

Yes. So the margins, I think, let me put it this way, 80% plus. So they're obviously attractive. And we are looking at upgrade. It will be less than in Europe from that point of view. But we will do Iris upgrades here in Q4. And -- but we also did that last year. So when you look at the comp, we look at Q4 that is a tough comparable quarter last year, but we still stand by, of course, the guidance we have given in terms of organic growth for the year.

Okay. Understood. And then my final one, just on -- if you have any updates on the Section 232 investigation. And also, if you can comment on this recent U.S. tariff changes and how you expect that to affect?

Yes. We are evaluating it. We actually report here this quarter a bit higher tariff impact, but it's also linked to selling more in U.S. So in a way, it's a positive problem, but we are still evaluating and understanding. So I think we need a bit more time with everything that's going on.

Maybe before we close the call, any final remarks from your side, Jakob?

Solid quarter. We are busy. We execute a lot. We have to continue the momentum, bias to action, clear strategy, then we look forward to Capital Market Day where -- so with your support, Klara, I hope and endorsed by the Board, we can outline a financial plan that management stands behind.

Thanks.

Thank you very much.

Thank you.

Good afternoon, everyone, and a warm welcome to today's strategy update presentation by Elekta. My name is Peter Nyquist, and I'm Head of Investor Relations at Elekta. With me here in different time zones around the world, I have Jakob, our CEO, in the studio here in Stockholm. In Cawley, just outside London, we have Christopher Busch, Chief Product and Technology Officer. And in Beijing, China, we have Anming Gong, Head of the region China. And finally, we have our Head of North America, Ardie Ermers speaking from Atlanta U.S.

So today, we will talk about 4 priorities. We call them must-win battles. The first one, Simplify, Empower and Speed. That was one we presented actually as we report our Q2 numbers. And today, we will go mere into how we established our new operating model and talk about the SEK 500 million in yearly savings that generated from that new operating model. But we will also present further 3 must-win battle. One is focused innovation; the second one is win in the U.S. and expand in China; and the third one is continuous COGS reduction.

Today, the presentation will not include any new financials. We will host a Capital Markets Day in Stockholm on June 17, where we have the opportunity to go into the financial plans and present targets in more details. Today's presentation is only about Elekta's strategic direction and ongoing transformation. We will not talk about the current trading conditions in quarter 3. Then you have to wait until March 5 when we present our Q3 earnings.

So please, when you do your Q&A or questions, think about that and focus on the topic and the discussion we have today and not have questions around Q3 and the short-term issues. So if we look at the agenda, we will start with Jakob, who will give an historic view of the market and also of Elekta and some reflections and challenging going ahead. And then he will present the overall must-win battles, 4 of them. And then he will actually go into more details when it comes to the Simplify, Empower and Speed, the first of those.

And then we will have Christopher talking about the second one, which is focused innovation and then expand in China must win in U.S. will then be presented by Anming and Ardie. And then Jakob will come back and conclude the presentation by talking about continuous cost reductions. And after the presentations, there will be time for questions. And again, as I said before, please focus the questions around the topics we have today.

So before I start, I want to remind you that some of the information discussed in this call contains forward-looking statements. This can include revenues, operating results, cash flow, product and product development. Since these assumptions or statements involve assumptions and estimates, there are subject to risks and uncertainties, results could differ materially for those set out in this call Certain of these reason you can actually read about in the annual report under the section as uncertainty or certainties, risks and uncertainties.

By that, I will actually hand over to you Jakob to kick off the presentation.

All right. Thanks, Peter. Yes. First of all, a warm welcome to all of you. It's great to listen in. I would also say we really appreciate every feedback question. We have had the opportunity to engage with many of you. And actually, it really shapes our thinking as well.

At our November call, we said that Elekta, we are not operating at full potential, that still stands. So we needed to transform, that also stands, and then we need to change with a high sense of urgency and high execution pace. The latter I leave for you to decide whether we are living up to that commitment. But I would say when I look at Elekta our colleagues, employees, the leadership team, that's really a strong commitment and understanding that to fulfill our mission and fighting cancer, we need to change, and I'm really grateful for all the support we are receiving throughout the organization, also from colleagues now leaving Elekta to do other things.

But with that, let me get into it. And I just want to say that when we look at the radiation therapy market, historically, it has grown at a very respectable CAGR. I would say a bit notch above MedTech average. And it's important to understand when we also look ahead it's not a sure sum game where we take a bit from our competitors, and they take a bit from us with the innovation that is happening within radiation therapy, and it's really coming at quite a fast pace. We see radiation therapy being more and more relevant for treatment. So I say, yes, we have competitors, but we are also having the opportunity to substitute in radiation therapy instead of surgery or other ways of treating.

So there is a potential for market expansion. In doing so, there's also -- we have an aging installed base. So there are replacement opportunities, obviously, with that upgrade opportunities for more innovative solutions. So example, I was in Holland a few days ago, and they only install now adaptive solutions into the market. So obviously, that's something that we can offer for. And then we still see many markets being underserved. Anming will come later on, but when he talks about the systems we have in China, they operate at 22 hours a day, 7 days a week, that's not sustainable. It's not good for patients. And that's why we need to have more installations.

And then we do see back to innovation and Christopher will come into it that there is a potential for getting more accuracy guided by AI imaging solutions and with better accuracy, you can deliver a higher dose and with higher dose, you can do more patients on the same system with fewer fractions or treatments and better patient outcome. So in many ways the industry is attractive. Then at the same time, when we say that we -- the market has grown by 6%, and we, as Elekta, have grown 3%. It's clearly not satisfactory. And we have been -- we have chosen to be very open about that we have challenges at Elekta. I think that's part of the improvement process to voice it out very directly, both internally and externally.

So we have been losing share over the last decade really accelerating the last half decade. We think we know why. And we have -- and part of the must-win battles are exactly to address that because, of course, over time, it's not sustainable to lose market share, particularly when there is systemic demand for having a strong Elekta in the market providing a strong competitive alternative. No one wants to see the industry monopolize.

We also -- if you look to the right, have seen in our numbers that the gross margin has come down pre-COVID, it used to be in the mid-40s, you can say. It came down to the 40s and then it has been stopping around 38% or 37% which is low for a company that invests 12% in gross R&D spend to deliver innovative solutions to the market. So we know we have a challenge when it comes to gross margin.

If we then go in and we look at why we state that we are not at full potential as a company. Then I would -- before getting there, start to say that we are well positioned. We are clearly #2 in the market, we have chosen to be in and let's not forget that we have very strong solutions for brachytherapy and with our Gamma Knife for neuro with global market leadership positions and a good margin profile. Then geographically, outside U.S., we'll get back to U.S. We have many geographical strongholds, one of them being China that we will address. The portfolio logic is strong. Christopher will illustrate it. So we don't need to go in really and do hard core pruning of the product portfolio. We have a direct sales force. So we are really in control of our own commercial execution, do a bit of distributor sales, but really vast majority is directly from us, and we have built over more than 5 decades, a very strong brand within our industry.

We continue to invest. We have invested a lot in R&D. So when we look ahead, we look at the current level and maybe we can even prune that a little bit. But we feel that the current spending is more than sufficient to deliver best-in-class competitive solutions to the market. And then we have, if you will, a razor and blade model. So we sell equipment, very sophisticated equipment and with that comes software upgrade opportunities and not least service opportunities during the lifespan of the equipment. So a very attractive -- inherently attractive predictable business model.

But as we said, we do have challenges evidenced in the financial performance. And we last time stated that we have had a layered organization, I said had because we have addressed it now. So we have moved the organization from 9 to 6 organizational layers. We have reduced the number of material positions within Elekta dramatically to have a higher doer to manage ratio, if you will. When you lose market share, of course, you have to take a very critical look at how you execute your product -- commercially execute your product portfolio. And so we have done quite some changes. Part of that is the [indiscernible] flattening out. They get our leaders closer to the commercial action decentralized decision-making and they will get back to the U.S. But clearly, we are not at full potential with only a bit more than 20% of our revenue coming from U.S., which as a global MedTech company is too low.

We have had long innovation cycles. It's complicated what we do, but Christopher will talk to some of the changes dependency on single suppliers sometimes needed, but it can also be costly if we start to see cost inflation. And then I personally feel looking at Elekta, we can crank up the cost discipline within the organization, and we are in that process.

And lastly, and I think also voiced by many of you in this call, we would like to see a stronger link between reported EBIT and cash flow generation, so less capitalization going forward. So that's where we are. But then maybe more importantly, what we're going to do about it because I do think we have some exciting years ahead of us. And we collectively as a team was really a long, painful, very, very interesting 360 forensic exercise we did as a team, and we came up with what we believe are 4 must-win battles that will really move the needle on our financial performance, but also from the eyes of our customers and colleagues.

So the first one, I'll give color on Simplify, Empower and Speed, as you said, Peter, right? And I'll give you some additional details where are we in the process? I think we are well under way in terms of execution. Christopher, you will talk Focused Innovation, quite some changes, actually. We'll discuss our expand in China and win in the U.S. strategy from Beijing and Atlanta. And then I'll give you an update on continuous COGS reduction. You told me I couldn't call it relentless, but that's what we are going to do because we need to get those costs down.

But a little bit on Simplify, Empower and just to tell you, so where are we? Some of you have said, "Oh, it's a cost out." And I start I said, "No, it's not." What this is about is really resetting Elekta's operating model to increase the velocity throughout the organization really get us moving faster and make the right decisions. So we are decentralizing to regions, we'll decentralize the ownership of P&L to regions, but we will also decentralize and empower our business lines and functions. So we really take decisions much closer to customers and product ownership.

So what we have solved for is clear accountability, speed, speed, speed, agility, of course, cost discipline. And then, yes, just get very, very close to our customers. And I think, Christopher, you will share some very concrete examples of what that means in Elekta real life. If we then do a status on where we are I would say we are on plan. I'm quite happy with where we are. I have to say we feel good about it when we announced it in November that we had a firm plan and nothing deviates from that. So we restate that it will have full run rate effect Q4 or Q1 next year.

So what we say here is that it will lead to recurring net cost savings of more than SEK 500 million. We are now at a point where we have a good estimate of the restructuring costs between SEK 450 million and SEK 500 million, we expect to incur it this fiscal year. And then in terms of process status, more than 60% of the workforce have been notified and have agreed. And then the remaining part has actually also been notified, but then we are through consultation in particular, in U.K. So we are very confident that we'll see it through by the end of this fiscal year. And then keep in mind, we're also rebuilding our leadership team. We had new CFO starting first of March. We'll have new Head of HR. Eventually, we will also have the COO joining the company. So a lot of things are changing, but it's moving at the pace we in fact, hope for.

So with that, Christopher over to you.

Yes. Thank you, Jakob. And I will give you a few examples of some of the things that Jakob has already mentioned linked to must-win battle one. But I will also a little bit more in detail on what we want -- what we mean when we talk about focused innovation and how we believe we will have a winning portfolio now already and moving into the future, an even stronger portfolio for our customers.

So if you move to the next slide. So you see based on where we are, we have a very strong and solid existing portfolio both from a logic perspective, but also from a value proposition that we offer to our customers. You see from the left, you see our image-guided Gamma Knife for brain surgeries. Then you have our image-guided brachy therapies, suite that we call Elekta Studio. And then, of course, our 2 flagship image-guided and adaptive MR NCT Linacs, Unity and EVO, respectively and then very important and under-proportionally shown in the real estate of this page, our Elekta ONE workflow solution. This is really important to point out because here, we see a significant growth.

What we also -- you can read, we are, of course, in the past, have been building up products from the ground up whether that was in Europe, whether it was in the Linacs or whether it was in software. And what we are now doing, you see us increasingly building software based on workflows and workflow outcomes, efficiencies, ease of use can have different meanings for our customers, but they are the things that they experience in everyday life and also how they measure their own performance, how fast is it for to treat a single patient, how easy is it to train a new RTT and so forth.

So while we, of course, still build our products to some degree, bottom up, we increasingly have a logic that is both top down based on our workflows. So this will also be a competitive differentiator, we feel moving forward in the age of increasingly integrated and adaptive radiation therapy treatments where you specifically need to have deep integration between the devices and the software that together make the real difference in outcomes and efficiency. This will be, I think, 2-point solution providers, specifically on the software side, a key differentiator.

If you move to the next slide, a very important statement that also Jakob has already made, but here it's a little bit more quantified. We, as Elekta, we have traditionally been investing a lot in new into innovation, whether it was at the origin of the company with the invention of the Gamma Knife or when we introduced ConeBeam image guided CT in the early 2000s or the introduction of the high-field MR-guided radiation therapy with Unity in the late 2010. Now we do it with major innovations on the software side, Elekta ONE planning.

And we are committed to continue to do this at the levels around that you see here, which is over the average in the MedTech industry. But we believe it is intentional because there is a clear need from our customers, either providers and clinicians, but also, of course, our cancer patients where the gap between what society needs in efficient cancer treatments with the number of people of trained clinical staff to actually provide that and increasingly complex treatment methodologies is growing every year. And innovation is one of the key ways to address this gap. So there is a huge desire and need to have high levels of innovation. And we see that the innovation pace in radiation therapy is growing, and it's growing exponentially based on the compute power, the ongoing AI breakthroughs and the ever-improving imaging capabilities.

So the technology enablers are all there. There, then the question comes, what do you invest in? Because you cannot invest in everything and all. So this is the second bullet point that we increasingly are spending where we really address these gaps that I just mentioned between providing care and the need for care, driven by customer workflow requirements, I mentioned it before, and the technology advances are very important, has enabled us but the key performance indicators at the end are increasing patient throughput, elevating treatment outcomes while keeping patient safety high and even improving moving forward. And that is really, for us, these criteria will determine where we put our talented innovation people and our money are at moving forward.

If you go to the next slide. The next slide -- this slide is actually addressing Must-win battle one, and it's a little bit detailed on the left side, but I will explain the logic here. We want and need to become more efficient as an innovation team. So what we have we done? First of all, we created actually a new function, a product and technology office that didn't exist before. And what we did then because the functionalities did the roles did exist, we moved 1 business layer in the vertical hierarchy of the company and have this new function integrated and report directly to the CEO. One vertical layer less, faster decision-making and the innovation function is now sitting at the executive table as part of the Executive Committee. So this is a vertical change we made.

At the same time, you see on the right side of the chart, our regions, our commercial people here in this call represented by Anming and Ardie. And in the past, we had a business line Linac and software solution team layer organizationally between the innovation function and the regions. There were good reasons to do it like that, but it also meant that the regions talked to innovation and the other way around, a little bit through an intermediate managing layer and that has been removed as well. So now there is nothing between the innovation team and the regions. And the regions, of course, act as the voice of the customer inside of Elekta. So this brings us also closer to the customer directly.

And lastly, there is, of course, a necessary part of this. By doing so, we also removed managerial layers, teams, leading to a more streamlined and simple organization and of course, that has also associated cost efficiencies. But driving this was to bring innovation up to the Executive Committee layer, removing one business layer and bringing it very close to the regions, removing another one.

If you go to the next slide, yes, here, it is about what is now actually our from and to? And what are the expected outcomes. Traditionally, in Elekta, but also many other MedTech companies, our innovation agenda has been very strong -- has very strongly relied on our engineering team to create new technology options and to work on them and when they were ready to bring them then to the market through our businesses. And this, of course, as I mentioned before, high-tech MedTech radiation therapy industry, this will not go away. But the decision on to how to evolve our portfolio and where to focus our innovation and innovation investments needs to be much more based on real, what we call, customer decision criteria.

So what is truly important to our customers, where are they willing to spend their money and with the customers increasingly, it is not just the clinicians, very important now in the future, but also the payers and the providers who are running operational health systems that need to be profitable at the end of the day. And these different customer segments have also different criteria sets. And these are considerations that you cannot ask a technology team to drive this must come from the markets and from the business.

Second one is that in the past, our portfolio has depended very much on big bet initiatives, which are large long-term development programs that are betting a lot of our investments for a very long time that we make the right choice. So that is still something we will do, but very, very selectively because a Unity concept, you don't bring out onto the market in small incremental steps. But for the majority of innovation programs, we are switching over to a strategy of compounding innovation cycles that are much faster. So where big bet might take 8 years to develop in a very large team, now we are talking about maybe 1 to 2 years for a device development and maybe less than a year. And software down to a few weeks when we talk about topics like cybersecurity, where you need to immediately respond. And that changes the organization set up, that changes the processes of how you drive innovation. So this is a fundamental change in our behavior.

And this is not only bringing value to the market more predictably and faster, but it provides us also the feedback from our customers much quicker about what works, what has to be improved and then we can adjust our development and our innovation strategy accordingly. So it's also a much closer, faster feedback loop from our customers. So the third one is that we do, of course, as was also visible on our overview slide regarding our portfolio, have a proud history of device innovation. And we, as Elekta, often still perceived to be a device-driven company. And devices, of course, are absolutely necessary if you want to provide treatment that you cannot do in software alone.

But we are now in a world increasingly of software enabled and even software-defined treatments and devices or software solutions themselves. So high quality and fast software innovation is going to be key for us now and increasingly in the future because this is then in the end focus on the workflow, the service, the solutions. And let's not forget, life cycle management because when a customer chooses for Elekta, either in OIS or on the device side, this is a partnership for the next 10 to 15 years. So we have to keep our customers up to date, up to speed in the age of increasing innovation speed where the world changes now in 5 years more than it did change maybe in the past in 10 or 15 years. So we need to make life cycle management a very key value proposition visible to our customers.

And the last point that I want to talk about is the expected outcomes. Best customer-led innovation, speed, faster cycles already mentioned. I also indicated that the predictability of our road map will increase because we don't have to have these 8-year bets, but we can do it in 4 x 2 kind of cycles or even faster when we talk about software. Overall, this will lead to an increased R&D efficiency. But most importantly, at the end of the day, it will result in a higher return on investment on our R&D investments. And that, of course, is, first, very importantly, a higher return on investment for Elekta, but also for investors and most importantly, for our customers because every euro, yen or whatever currency they spend on Elekta is then also an investment in the future of what their equipment and their software will do. So for them, going with Elekta, knowing that we increase our innovation efficiency is going to be a very important asset that we have. I know this is still a very high level. We will go in more detail in the Capital Markets Day in June.

But with that, I want to hand over to Anming, Head of our China operations, who, of course, we work very closely together to innovate also specifically in and with China. Anming?

Thanks, Christopher. Good afternoon, ladies and gentlemen. My name is Anming Gong, Head of Region China. It's my pleasure to have a chance to introduce Chinese RT market and Elekta business operations in China. We started the sales activities in China, from 1982. It is almost simultaneously with China's reforms and the opening up to the world. Thanks, Larry, board and the executive management team made a wise and originally decisions, we started to build up facilities in China 25 years ago. Now we have the most competent sales, marketing, service, R&D, productive and the training and education system in China. We also become the market leader of Linac, Brachy, TPS, oncology information systems and the [indiscernible] also become very strong, #1 total RT solutions provider in China. Within 3 years, in order to adapt the changes in market development, especially the Chinese government health care policy changes.

We have established a joint venture with China largest pharmaceutical company, Sinopharm to further improve our public penetration and provide financing solutions to lower and the private segment market. We also established a software joint venture in Beijing to further strengthen our total solutions provider positions in China. At the end of 2025, we also completed all regulatory clearance to manufacture and the sales of Brachy, Gamma Knife in Beijing to secure the market leader position. Growth in China, we will focus -- we will continue to do the investment in training and education, localizing manufacturing and the supply chain work together with our local partners to be more competitive in China.

Next slide. Chinese market is quite transparent market. Because it is mandatory for all public institution to go with the international bidding process to purchase over $100,000 medical equipment and all radiotherapy equipment is managed by license. And also Chinese market is a very competitive market. It has a very high market, similar with Europe, the U.S. at the same time, they are also a very big emerging market, similar with some other emerging market.

In the past 3 years, China's RT market has declined very quickly, especially from July 2023, 7 ministries and commissions decided to conduct a anti-corruption review of China's health care systems, which has a great impact on the entire market, but to the needs of users have not changed. Starting May 2025, the market is starting to recover significantly. And according to the statistics from China medical equipment association radiotherapy equipment is recovering significantly faster than imaging and ultrasound. At the same time, we also see that the government is actively promote even request to establish oncology departments and purchase radiotherapy equipment in county and city hospitals. This gives us much more opportunities to develop RT segment.

Next slide. China revenue in the past has -- Elekta in China, we still maintain a very high market share, but only for Linac also for Brachy for TPS for oncology information system. But in the past -- in the last fiscal year, you can see that in the past 2 years, just I mentioned that the market decline is over 40% to 50%. But China revenue has only fallen by 4% to 5%. But at the same time, the EBIT continued growth. It is still, but we are working very hard, not only for the Linac also getting very good business for the people to continue double-digit growth for service. And also in the past 4 years, we also installed 16 units of Linac. So in general, that this market still continue very big potential for the future.

Next slide. To further reinforce Elekta market position in China, we will focus on the several priorities: number one, deepen localization of Elekta portfolio and supply chain. Just I mentioned that China is very mixed market, also very complicated. So we needed to very localized some portfolio to meet the marketing expectations to strength within the market.

Number two, strengthen innovation partnership across China's RT ecosystem to further reinforce Elekta market position and drive double-digit service growth. Number three, advanced China-focused product innovation to expand into the underserved segments, especially for private segment, county and the city segment in line with national healthcare investments.

So thanks for your time. Now I hand over to Ardie, the Head of North America.

Ardie?

Thank you, Anming, and great job. I'm really envious of your market share position. So I look forward to see how we can do the same thing in the United States. Thank you, everybody. My name is Ardie Ermers. I'm the Head of Region Americas. And I'm going to talk a little bit about how we're going to address this market share position of Elekta in the United States.

Next slide, please. So if you look at the performance of Elekta over the last 5 years, like Jakob said, we cannot be happy as Elekta with this performance. Our revenue over the last 5 years has seen a slight decline and if you then look at the position of Elekta's share across all the other regions, like Jakob said, we cannot be happy about our position. I've been in MedTech almost 30 years, and the U.S. market is the biggest market for MedTech, and that's the market where you need to win, where we have good margins and obviously a lot of innovation. And as you can see on this slide, we have been underperforming in this specific market.

If you analyze why this is, you can actually see the clear focus area that we have been missing. Because if you look at our performance, for instance, in Brachy, which is market leading in Gamma Knife, which is market-leading, introduction of MR-Linac with Unity really driving market acceptance and a good share in OIS, you see that the real area that needs to be improved is our CT-Linac space. And so I'm very happy now that we can obviously announce some big news that you probably have seen in the news is that we have received clearance for our Evo platform in the United States. So as soon as we got 510(k) clearance, our customers are calling us where we have been able to showcase Evo already in Europe where we have seen those market share gains where we have seen the expansion of margin. We are now happy to say we're going to start doing this in the United States.

Like I said, the high interest from our customers because they see that this platform is going to enable them to do the future of radiotherapy. And that opens up not just installed base opportunities and upgrade opportunities. But we also see that there is a high interest from our competitive customers. And so we already can celebrate some customers that are willing to switch to the Evo platform because they see that market-leading adaptive therapies that Elekta showcases with Evo and also with Unity can now be applied in the United States, which is a very highly competitive marketplace.

So we are in the process right now to upgrade our reference sites so that we can take our customers to showcase this in the United States instead of having to fly them over to Europe and showcasing how we can do this based on U.S. workflows. And we are currently already working with our manufacturing and get those products produced so that we can start the installations in Q4 and already see a revenue impact based on Evo installations. So you can imagine the U.S. team is very happy now to go to market and be able to sell the new Evo platform.

What is the opportunity for us? I just alluded to the fact that we have a big installed base. And that big installed base is looking for a replacement. And if you look at the average years of Linacs in the U.S.A. you see that the average age is between 12 to 14 years. That means that we have a great opportunity to go to those customers and start replacing those older Linacs with the Evo platform. Now why are they interested? They're interested because with this platform, you can start doing hypofractionation.

And in this marketplace, where we see aging population and a bigger incidence of cancer they are looking for better ways to treat. And we know with adaptive therapy, you can unlock hypofractionation with more accuracy and better patient outcomes. And those workflows are something that can be combined with our Elekta ONE platform. So the combination that Christopher talked about, by combining the device with an integrated software suite is really what makes Evo shine. We believe that this is going to have a big impact for our patients, but also from a competitive standpoint for our customers.

And last but not least, the focus on bundled payments in the U.S. will remain. The pay per fraction model is starting to change, but we're already happy to report that there are very successful ways to treat and to also build for SBRT treatments. So we believe that the combination of good technology, good clinical outcomes and obviously, the financial impact is going to create a winning success formula for us to turn this market share position around in the United States.

We have a competitive portfolio. Like I said, let's not forget that this is not just about, Evo. I mean while we are very happy about Evo being cleared, where we can showcase these proof points like we are showcasing in Europe, where you can do online and adaptive treatments in a very fast and efficient way. We are paving the way with our technologies in this space. For those are customers that are now used to using our Unity for MR-Linac, they are showcasing why adaptive therapy is so important. And what we have learned in that platform, we are now translating into our CT-Linac platform, which makes this really a leading platform for the future.

Like I said, while Rocker is still in motion, we already see that customers are doing a great job with SBRT treatments and the financial incentive system is in place. So we have customers that are able to make actually some good money by applying these capabilities. We are market-leading in Brachy and Neuro, and we're going to continue to be market-leading in Brachy and Neuro. The new innovations that we showcased on our Esprit platform with our Flexitron platform and the new applicators is showing that by keep innovating in this space, you also can keep a market-leading position.

And last but not least, like Christopher explained, Elekta ONE is crucial to integrate all these workflows into the department make it easy to use and make sure that the best treatment can be selected for the patient based on the perfect therapy that needs to be matched. So when you add this all up, you can sense my excitement that we are now starting to really turn the corner in the United States.

So to summarize. Next slide, please. We are going to attack this must-win battle with full force. We're energetic about it. We now have wind in our back with the approval of Evo and we believe that over the next coming months, you'll see more and more news about our installations and the excitement that our U.S. customers have for the Evo platform.

So with that, I hand it back over to you, Jakob. Thank you so much.

Thanks Anming. Thanks Christopher. So just to supplement innovative product portfolio with commercial execution, we just got it demonstrated from China and U.S. Clearly, we also need to be able to offer our customers a cost-competitive solution. And that really rests by having a cost structure internally, so we can pass that benefit on to our customers. If you look to the left, as I said in the beginning, we have seen our gross margin decline. And it's not linked to pricing. It's really linked to higher bill of material cost, higher service costs.

So the way you should think about Elekta is that roughly, roughly 2/3 of our cost of goods sold. Be that 60% in totality of revenue, 2/3 of that, i.e., 40% relates to components we source in. And then the remaining 1/3 relates to manufacturing, logistics, installation and not least the service. Keep in mind, we are actually asset-light company. So we have simply really more than manufacturing in U.K., in China and in Holland. Holland for our Brachy business. And we are now committed to have a, I would say, a continuous strong focus on sourcing at lower cost our bill of material, but also introduce excellence into how we manufacture, probably not that much potential, but certainly a lot of potential into how we install logistics and not least, service our very large installed base.

So we will, as a company, do a structural change. We are lifting in the LSS operation into the Executive Committee of Elekta really to ensure that at the executive committee level, we have equal partner to you Christopher and to the commercial who will safeguard cost and safeguard the quality of our products, and we're in the process of looking for another high-caliber executive to join the Elekta journey.

So the way I would like you to think through what our mindset is we will over time, transition from single source supplier dependency to either deliver it low-cost alternatives, but with long-term contract duration or dual source to ensure that our suppliers, like we are exposed to competition, they will be exposed to competition. We as part of our re-org, we are moving from centralized operations to decentralize the ownership of the installation and service of our business with our 5 regions. And then lastly, we are rolling out actually quite exciting AI tools to our more than 1,500 field service engineers to ensure they have knowledge at a fingertip, and we can move more into preventive, predictive maintenance and less reactive.

So what I would like you to take away is that there's more to be done at Elekta in addressing our cost of goods sold. We just got started, but we can see a lot of potential. So I think, Peter, I'll close here if okay.

Yes, sure. That's correct.

Just to reiterate, we most certainly believe and I think data supports this radiation therapy is a niche, large niche, very attractive market. We have identified 4 must-win battles for Elekta that is now under way of execution. It also means there are a lot of things within the company, we are saying to our colleagues don't do it. Here, we have really the transformation focus. We have a new leadership team in place. We have many great leaders already, but there's been a lot of change announced some of them also a few months ago.

So we have a team in place during our first half this calendar year. We will have our new operating model established by the end of our Q4, i.e., end of April. And then we have our new ways of working built into both our budgets, our incentives with certain guardrails to the organization. So we are good to go. I mean that's really the things should be done this fiscal year, and then we are ready for next fiscal year and we are excited about that.

Yes. And that sort of concludes then later on with the Capital Market Day that we are planning for in June where we will have much more financials. And most but not least, we will also be able to present new financial targets at that point.

I think that's important, right, Peter, that you say give us a little bit of time. Right now, we just focus on execution. But I think it's important lets have the new members of the leadership team to join, give us a better time to really build a financial outlook for the next couple of years and make sure it's activity based. And it has ownership, not only for me, but it's really from the wider leadership team. So we feel we can stand by it, and we support it and we can see a clear direction. So we -- yes, already now, even though it's cold in Stockholm, we look forward to June.

Okay. By that, actually, we can start the Q&A session and use your rise hand functions, and I will try to distribute the questions here. And after you asked the question, please then take away that function, so we can go to the next person asking questions.

So let's start. And if I was correct, I think the first question here comes from, see here from Jonathon Unwin at Equity Research. So Jonathon, please.

I have 2 questions, please. The first 1 is on gross margin. You spoke a lot about potential to reduce the cost of materials, but could you like perhaps quantify what impact increased software sales and Elekta ONE could have on the gross margin, could we realistically see a gross margin above pre-COVID levels if you reduce costs and change the mix. And then my second question is on China. You said you've maintained share in China, but local competition is gaining share. Who do you think they're gaining share from and do you think that United Imaging or the local competitors can gain share in Europe? That's my questions.

I guess, Jakob, could you start with the mixed question?

Yes. Yes. And I can also take in China. In terms of gross margin, as I said, we will have focus on reducing our cost. Clearly, the more software sale that comes at very high gross margin, the more we do the higher improvement we are going to see in our gross margin. We don't want to quantify it at this stage. We will come back to that at the Capital Market Day in terms of what is a realistic ambition. So give us a bit of time, and then we'll get back to you on what we believe is realistic for Elekta.

And then on China specific, Anming, please comments from your side.

Okay. Just I mentioned that the Chinese market is a very transparent market because it's a big market, and also the Linac even the radiotherapy equivalents managed by license. So we -- yes, there we are very clear market leader. Of course, even though we lost some market share to the local competitors. And also, as you know that -- everybody can see that, now the Chinese government also give more favorable policy to local branded. This also give us some impact. But now we also very hard, we still maintain a very high market share. So in general that we are quite clear, the market leader in the market here.

Exactly. So we are a clear market leader. We lost a few percentage points that could change up or down. As you saw, it's roughly 200 units, it doesn't take a lot.

We are in the Brachy in the oncology information systems and also in the Gamma Knife in [indiscernible] we also make that big progress. So that's a little bit compensated some market share lost in the Linac. Thanks again.

Thanks, Anming. Thanks, Jakob. Then we'll move to the next question, and I think that is from Veronika Dubajova from Citi.

I will keep it to 2, please. Just the first one, and thank you for all the content you've given us. But just in terms of this kind of more faster-paced incremental innovation, I guess, I'm just curious what your views are in terms of the future direction of the industry, and whether -- if indeed, it is sort of in the direction of AI and also imaging, whether you think you have all the skill sets and all the know-how that you need within the business? And just thinking, obviously, relative to Varian, that is part of a much larger imaging complex. So that's kind of the first one.

And the second one, I just want to follow up on the comments around Evo that you've made in the U.S. Obviously, you've only been in the market for a couple of weeks. So just curious to what extent those kind of competitive wins are coming from folks who have been waiting for a product for a long time. Are they coming from folks who had a very old Siemens machine? Just if you can sort of help us understand where those kind of hard to win conversions have come in such a short time frame?

Thanks, Veronika. We'll start with your first question, Christopher. You can take that one, and then the U.S. question is for Ardie. So please, Christopher.

Yes. Thank you. So regarding the question of where the industry will go with faster innovation cycle, I think it's inevitable set the gap between what is needed in care and what can be provided with the current methodologies becoming too large to bear for societies. So there needs to be an increase in a faster innovation cycle to bring to close the gap or at least reduce the speed of how it widens. So that's I think is a given.

Secondly, as I said, there is the underlying technology revolution, not evolution that makes these things also possible. So the innovation speed will increase significantly, that's a given. Of course, healthcare systems have to adapt to that, also reimbursement has to adapt to that. We see that what Ardie was talking about in the U.S. So this is still a process where society needs to catch up, I think, with the -- on demand and as well the technology advances.

To your point about does Elekta have the skill sets to address this? Of course, Elekta will never be a company that can do everything and anything and that probably can -- our competitors can also not do? Because there will always be new ideas, new things coming up, specifically in these revolutionary times that you don't have in your skill set baked in yet. So what we are doing, and there I think we are quite nimble as a smaller company compared to a few of our competitors to have really important partnerships, whether that's with other companies or with also very important with our key opinion leaders in the academia that do have these skill sets. And they do have these -- the hunger to try new things as an exploratory thing before a bigger company like Elekta or others can make a big leap and say now we are betting the future on that.

So for us, and Jakob alluded to it, we visited a very important partner of our this week in the Netherlands, and they are very, very eager to partner up with us even more so than in the past to bring their skill sets, but also their innovation hunger to Elekta. And also here, in the end, radiation therapy is a boutique industry compared to some others. So we don't need to invent new AI large language models. We don't need to invent new CT or MR-based imaging methodologies. We can leverage what is being invented in other industry, whether it's the car industry, autonomous driving, whether that's in AI basic LLMs for service, for example, support or whether it's an imaging in radiology.

So I think we have the benefit of a fast follower in the industry, not as a company, we will make choices where we want to be leading, where we are going to be a fast follower. But I'm very confident that with these sets, we are going to be in a good position to compete very efficiently with our larger competitors.

Thanks, Christopher. And Ardie, on the U.S. question?

Yes, Veronika, thanks for your question. And I think the RT industry is actually a pretty tight net community on a global basis. And I think customers obviously been following how Evo has been performing in Europe, where we showcased that these online adaptive capabilities are fast and integrated. And I think also based on our leadership on the Unity side, they have been following us closely. But we were not in a position, obviously, to promote and to actively sell Evo until we got FDA clearance. So these customers are basically waiting for us to get FDA clearance. So as soon as we got that we engage with them and convert obviously those PLAs and making sure that we can move forward with Evo orders. So that's the reason why we saw some pent-up demand, and then we are now able to convert into Evo orders. Hope that answers your question.

Anything to add Jakob? or Veronica you're happy?

I guess just I'm kind of curious if you can characterize the types of customers who are interested in Evo? Is this hospitals with multiple Linacs that have historically not a hyperfractionation that are moving to hypofractionation. I don't know if there's sort of a common theme that you have this early on, but I'd be curious to see what those look like?

Yes. So those are customers that are indeed looking at adaptive therapies, Veronica. So if they want to do hypofractionation, they want to benefit from this new trend in radiation therapy. So really, their specific ask is we want to do adaptive treatments.

Thanks, Ardie, and thanks, Christopher. We'll move to the next question. I think that is from Richard Felton at Goldman Sachs.

Two questions for me, please, both going to be on China. So first of all, in terms of market size, the slide that you showed had between 310 and 340 units per year in 2021 and 2022. Do you expect the market to go back to that size? And if so, over what time frame?

Then the second question, sorry, if I misheard, I think you did reference a few points of market share losses specifically in Linacs in China. Given that you are framing China is a must-win market? What are you doing as an organization to address those market share challenges now that United Imaging is in the market?

So if we start with you Anming on these 2 questions, did you hear them?

Thank you. It's really good questions. Yes, before the anticorruption, in China, the -- every year, the units is going to the over 340 units. Just I mentioned that this is a very transparent market.

Yes, absolutely. And also from last year in the middle of the 2025, the market is very quickly recovery. And also, I think in this calendar year, they should be going 260, 280 is very possible. And I think that we still need another 2 or 3 years could back to the 340 because you know that the Chinese government now is doing a lot of motivation and a lot of the investments trying to promote even request the county or city level, they must have their oncology department. It means that if they want to promote to the Class III, must get the oncology department and Linac systems.

So but at the same time, in China, we also face some challenges about the professional bottlenecks. So this will come back slowly, step by step. And also in Chinese government, the Chinese market, all radiotherapy equipments managed by the license for the Unity be classified by the central government for other equipment licensed by the local government. So in general, that absolutely a step by step to recovery to over 300 units.

About your -- you mentioned about the competition. Yes, United Imaging is the only 1 of the local supplier in China actually in that is over 15 local suppliers. So United Imaging, yes, because they are successful in the imaging diagnosis even in the ultrasound. So they've got a good branding, they're more competitive and got a very good supporting from government side. So they're getting some market share.

But in general, if you look at the performance outcomes, clinical that, absolutely, we are very strong in the market as a clear -- very clear market leaders. At the same time, we also maintained a very good market share for the Brachy, for TPS, for oncology information systems. Also you know that in China, the proton is very active. So we have more than half we got the oncology information from Elekta. So we also have a very big installation base. So we can continue to do that.

At the same time, from this fiscal year -- from this calendar year, the government adjustment -- the reimbursement, but they just slow down for the operation treatment, but they clearly increased the reimbursement for as well as SBRT even attractive. So in general that for this market absolutely motivates the high technology, high-performance system. Elekta in this part is quite strong.

Thanks Anming. Thanks, Richard, for those questions. We'll move to the next question, which I think is from Erik Cassel at Danske Bank.

First, I have a question for Ardie. When it comes to gaining market share in the U.S., I guess, for it to be meaningful, you'd need to convert customers from, I guess, mainly using Eclipse and ARIA to sell Evo to those sort of customers since you're sort of ring-fencing the online adaptive. My best guess would be that you have sort of a smaller market share in software than you do in hardware, which comes to U.S. at least for customers using us as main sort of TPS. So could you talk about how you're planning to win customers over on the software side and get them to use your TPS systems more? Because that seems to be fairly sticky and also sort of a leading indicator for where hardware market share is heading.

Ardie?

Yes. Thanks for your question. Yes, I think we are in a very interesting phase. If you look at the ecosystem to do adaptive treatments, and so when we launched Elekta ONE planning, we basically made a choice to go with a market-leading contouring company called MEM, which is, in this case, really what's driving a lot of the preference of the physicians. And we tied into that a very good and very fast dose planning engine. So the combination of those 2 together and then putting that into the, let's say, ecosystem of adaptive planning. We actually see that customers, while they are still using for off-line their main TPS, they're starting to move into the Elekta ONE planning environment. For them, I think the key is that they can do fast, reliable and accurate treatments.

And so what we're seeing, the same thing as with Unity, where we have built this integrated solution, including Monaco, we see that customers are starting to use that. in an integrated fashion. So how do you win market share in that case?

We are starting to see transition for people to say, hey, we want to do this treatment, and we're not just focused on the individual boxes. And so Elekta ONE planning is the answer to this puzzle, but also integrating that within the OIS. And we see that our footprint in OIS is still very strong, but the combination of the device in this case, the treatment planning and the OIS, that -- those 3 pieces together, that's what's driving that acceptance. And so I think what you'll start to see is that customers are going to say, yes, we still have a main treatment planning system like Eclipse but we are starting to work within this Elekta ONE environment to do adaptive treatments. And that's how we think we can start really penetrating that position.

Thanks, Ardie.

Okay. Then can I just ask on Europe. Can you perhaps comment on how successful you've been on upgrading the loyal customer base that you do have in Europe from going to Monaco to using the full Elekta ONE suits, if you can sort of talk about some sort of ratio for the number of centers approached versus the one who decided to go with ONE?

Yes, we don't -- over and above the guidance we gave here last Q2 in terms of growth in Europe. We don't share more details at this call. But in general, I mean, of course, what we hope for is we see the same uptake in the U.S. as we are seeing in Europe on Evo.

We'll move to the next question. And that's from Sten Gustafsson at ABG.

So I was wondering if you could share with us your installed base of Versa HD in particularly in the U.S. but it would also be interesting to hear, for example, in China, how many systems you have today and preferably also the age of the fleet, that would be very helpful.

Yes, Sten, I fully understand, but I wouldn't want us to share our details on our IP in U.S. or China. I don't think that would be very smart from a competitive point of view. But of course, we -- I think Ardie showed the overall age profile of the market in U.S., of course, we have it fully mapped as well in China, but I hope you understand it's not something we want to share because we may also have competitors listening in.

I understand, I just thought it was worth asking the question.

Yes, but it's also a great question.

I can add maybe a little bit of color here, Jakob, which I think is important to note is that we also create upgrade opportunities, right? It's not just all replacement. And for the younger fleet, we can also upgrade them to Evo capabilities. So it's really -- it's a double whamming and it's not just upgrading to new systems, but we also have the capability to upgrade our existing systems. So that's exciting opportunity.

And this is also the very same with China. I just mentioned that Chinese government adjust the reimbursement. They will be floating operation treatment, they lower down the reimbursement, but they increased SBRT, we made, SBRT adaptive. So -- but in China, we -- more than half even maybe 1/3, we're still doing some routing operations this time for them to upgrade to meet the market requirements in order to increase their income, the revenue of the treatment. So it's a very interesting topic. We also -- tomorrow, we have a user meeting. This is a very important topic with the customers. So the more and more customer approach us try to ask us to do the upgrade it with the systems.

Thanks for enlighting us Ardie and Anming. Thank you for those questions. If you don't have any further questions, we'll move to the next one, which I think is from Kristofer Liljeberg at DNB Carnegie.

Two questions, one on U.S. and one on China. If I take U.S. first. Given that the U.S. approval and launch was too much delayed and the pent-up demand you highlighted today, how soon do you think we could expect to see a ramp-up in meaningful order growth in the U.S.

Yes. Thank you, Christopher. And yes, like I said, it's -- we have not been sitting still and waiting until Evo approval happens. We obviously have been working with our customers and educating them about what the capabilities are once we get FDA clearance. So I think you'll start to see that that is now starting to happen already here in Q3. We already seen some orders coming in, and that will continue, I think, into Q4. And then as far as revenue goes, first, you obviously need to do bunker preparation, you need to make sure that the customer is ready to receive and obviously, manufacturing the equipment. So that's a little bit more lagging. But the excitement is there and the funnel has grown.

Great. And then on China, the pickup presented here for China Linac sales in 2026, how certain could we be about this really happening? And do you expect to take your 40%, 45% share of these Linacs?

Thanks ,very big challenge question. Yes. I'm sure that the market will be in the 2 or 3 years Evo suite will come to pick, there's no doubt. If you look at that from -- in the middle of last year, is they are recovering significantly. Secondly, the government more and more investment even in the beginning of this year, the government emphasized that they will continue to investment in healthcare. For Elekta, yes, we are facing more and more challenge. I just mentioned that in China, it's a very unique market. In the other countries, might be only 3 or 4 competitors, but for us, maybe more than 16 to 17 even more will be coming. So we absolutely face more challenge, but we are very confident because now only 1 company, Elekta, we provide the total solutions. That's not only for the Linac also Brachy, TPS, oncology information systems, Unity, Gamma Knife. So for the hand, we are dominant in the market.

Of course, we got some pressure challenge. It's not about the clinical outcomes, more pressure is from the government's some policy to motivate some customers, especially public to purchase local branding. But now we get more and more localization in China, even just I mentioned that by the end of 2025, we also got our regulatory clearance for the Brachy and Gamma Knife. At the same time, we are working on for the Unity to be into the local regulatory clearance, try to meet the government policies. So I don't believe that we are confident we'll continue. We lose some share, but we're still very strong market leaders in the market in China market here.

Thanks, Anming. Anything to add Jakob or Christopher. Thank you for those 2 questions. We'll move to the next question, which I think is from [indiscernible] at SB1 Markets.

Follow-up, especially for Ardie on the U.S. side. You have a sizable installed base of Linacs. I don't know if it's approaching 1,000 perhaps. Evo is obviously a premium system with premium price without referring to any potential list price. It will not be for all accounts, but presumably a sizable proportion. Can you be elaborate further on the most likely characteristic on the early interest in Evo on your side? Is it sort of multiple Linacs sites that also operates other premium alternative systems and university sites and the likes?

Ardie?

Yes. Thank you for the question. What we are proud of with Evo is that it's a very versatile system. And so what we mean with versatile system is that it can actually treat all kinds of indications, including SRS. So even if you are on Linac shop, you want to make sure that you can treat all your patients. And so Evo can provide that capability. And then the customer can decide to either buy Evo with Iris or they can decide to further upgrade later on if they really want to go to high-end adaptive treatments. So I think the platform is scalable for U.S. customers. So we don't see a difference between freestanding clearing that has on Linac or an academic site that has multiple, it really depends a little bit on what capabilities they want to buy.

And then lastly, I think Evo is also a platform that can be expanded towards the future. So we believe that it addresses most of the market segments. And if you look at price sensitivity, the market pricing for U.S. is actually really good. So we are not too worried that we're not going to be able to serve a certain part of that industry.

Of course, you are going to be sensitive to price rebates and so on. It's a premium new system, but you alluded to earlier that there is an option to upgrade existing systems as well Linacs. Is that a way to sort of be more flexible on price perhaps on freestanding that are -- some of them have also economic pressure?

Yes. Yes. Correct. And so that's, I think, the nice thing about our strategy is that we just -- we don't need to buy a new system to get these capabilities. But we have to be also careful not to just upgrade everything. And so we are looking at a certain age of the machine to make sure that we don't upgrade 15-year-old units. And so we work with customers to make sure that they can get access to this technology, but it also needs to make sense from an investment standpoint.

And finally, on our side, you obviously slim costs and take out costs and increase efficacy. But presumably, given the position you are in now over the last 3, 4 years in the U.S., is it really possible to do this without stepping up the field force and the footprint?

Jakob?

Yes. If it relates to the U.S. Ardie, should maybe answer, but I think I can answer on his behalf. It goes across Elekta, we can save our way to glory. But of course, it helps to be competitive on the cost side. So we have been looking extensively at what is the right market coverage. And then we have -- we have really gone through with the lens of making sure we get our leaders and our sales people that are very close to our customers. And that's why we say this was not a cost-cutting exercise. It was a reset in how we operate. And I think we are pretty happy with where we are now.

We have 2 more questions in the audience here. We take the next one from -- I think it's from Kavya Deshpande at UBS.

Yes. I just had 2 on China, please. So the first was I think your strategy there mentioned deepening localization of your supply chain. I was wondering if it would be possible to elaborate on that, please? Because I understand you've already got localized assembly for the majority of your Linacs. So would further localization covers raw materials? And what about software would that be in scope as well?

And then my second question was again on China when you mentioned sort of expanding into different segments where you haven't traditionally played. I think private hospitals were mentioned, for instance. I mean who are the players that dominate there now. Is that -- does it resemble the broader market? Or would you be aiming to take share from the local players in these new segments as you expand into them?

So let me take on supply chain software and then Anming over to you on the go-to-market. Yes, we feel there's untapped potential in really localizing supply chain. I was just there with the team with Anming a few weeks ago. And clearly, the market in China and Asia is so competitive. And we don't always need suppliers around the corner in U.K., we can absolutely look at leveraging our global footprint and harvest savings. So I think the way you should think about it, that's very much part of our continuous COGS reduction drive to really go for both resilient but also low-cost, high-quality suppliers.

On the software, we have a big software development team out of Shanghai, and I have to say they are spectacular phenomenon. We call it China speed, but they really operate at high pace as we can see, China in general for us. And part of our expand China is actually how can we tap into China speed even more -- and I would -- today, we have roughly 700 people in China, I would not be surprised if that number is higher in the years to come. And then to you, Anming, on the go-to-market.

Okay, thank you for the question. Yes, you are right, we are very strong in the market about the software. Just I mentioned that 3 years ago, we established a joint venture with a local company for the software joint venture. So -- and also that the top 50 RT centers more than 80%, we provide oncology information systems in China. And at the same time, more than 50 proton centers, we provide a total solution to them for the oncology information systems. Not only for proton, also you know that these top RT centers, the proton always the connection with the Linacs. So this is a very good profitable business.

And also, just you mentioned that we will be continuing to do this kind of investment to work together with our partners to go to provide more products, not only for top RT centers, also going to the next level. Because in China, we are less of professionals. Also, we also work together with the local companies trying to provide remote diagnosis, remote planning systems to support some private and low-level hospitals to get high quality control on the planning for the treatment.

And also just you mentioned that for the private segment, yes, we are very strong in the private segment, even much higher, even dominant for the private segment for the Linac. As you know that the -- for the public, sometimes they got more influenced with the government policy. But for private, they only focus on the performance and the price. But for this part, we also provide a very good training systems, training education in China. We have the 1 learning and innovation center in Beijing. 52 weeks, we got more -- every week, we have training and education cost and the free of charge to all our customers.

So -- and also, we also work together with the top RT centers, universities to deliver their training education. And also in general, that this part, we are very famous in China because we do a lot not only for the trading and education also getting more with the Unity for the top RT centers. We provide academic support. So we have 1 big team only focused on advanced training education and academic support. So in general, that Elekta region China, we do a lot of investment, trying to give the customer a special hand top and private to let them to get more professionals support this part absolutely is the big bottlenecks for the -- in China.

Thanks Anming. and thanks, Kavya. We'll now move to the last question of this event. And if I'm correct, that should be from Handelsbanken and Ludwig Germunder. So please, Ludwig, you're up for the last question.

I have 2 quick ones, please. The first one would be on the 4 must-win battles you presented today. Would you say that you have any ranking order for the must-win battles or are they all equally important to you in order to unlock the full potential of Elekta. And the second one is on the U.S. competitive situation. So prior to the FDA clearance for Evo, you told us that your customers were waiting for the Evo approval as they loyal to you. And now Varian has been teasing us that they are close to launching their next-gen Linac as well. Have you got any feedback from current Varian users that they want to stay loyal to Varian and wait for that next-gen Linac? And if so, to what extent have you got that feedback from the customers?

If we start with Jakob, for the first one and then move to Ardie.

If you think about it, to win in both China and U.S. we have to U.S., we need to come back to what I think -- what should be our fair market share. Clearly, our customers wants us to win. We need a strong focused product portfolio through driven by innovations. Clearly, and then we need to be cost competitive so we can compete in the market. So I think I wouldn't want to sit here and rank them 1 higher than the other. But there's a reason why there are only 4 because we have the bandwidth to execute all 4 of them.

Then in terms of competition. I mean, Ludwig, great question. I really have a principle about not commenting specifically on products of competition. I think we'll stick to that. We know what we need to do. Of course, we know what products they will come with and then we'll move on and execute on our innovation plans. We invest a lot, as Christopher said and then of course, we feel we have good plans ahead of us.

All right. Great. Thanks. That's it when it comes to question. But before we close this session, a few closing remarks from your side, Jakob?

Yes. Yes. Almost started, we have potential ahead of us. We know what we need to do. Now it's just a grind of execution. And then we look forward soon to connect again early March on our Q3 numbers. So thanks for your attention. Thanks for your questions. Thanks for facilitating.

No problem. My pleasure. Thank you all.

Hi, and good morning, everyone, and welcome to this second quarter Investor and Analyst Call. My name is Peter Nyquist. I'm heading up Investor Relations at Elekta.

With me here, I have, for the first time, our new President and CEO, Jakob Just-Bomholt, and welcome Jakob for the first call, and hopefully, many to follow. Together with Jakob, we have our CFO, Tobias Hagglov. Jakob and Tobias will present the results for the second quarter and in the fiscal year of '25-'26.

So we'll start off with Jakob giving some initial reflections on his first quarter as CEO, followed by a summary of the Q2 financials, including the order view announced today. Then, Tobias will go into the more details around the financials and Elekta's outlook. Jakob will then present the change in operating model and the organizational structure, leading to the cost reductions that we announced today as well. And after presentation, we will, as usual, be available for a Q&A session.

But before I start, I want to remind you that some of the information discussed in this call contains forward-looking statements. These can include projections regarding revenues, operating results, cash flow as well as products and product development. These statements involve risks and uncertainties that may cause actual results to differ materially from those set forth in the statements.

With that said, I will hand over the word to you, Jakob.

Yes. Thank you very much. Yes. So let me start by talking a bit about some of the initial reflections and then give highlights on Q2. Then, Tobias, you will go into Q2 financials in greater details. And then, importantly, we'll get back to Elekta Reset if you will, our new operating model. But on initial reflections, before I go into the details here on that slide, I would just say, fundamentally I like what I see. I'm now 4 months into the position. Obviously, prospectus will modify somewhat, but I do think directionally, what we will outline here in terms of strength and challenges and opportunities, we'll set the direction for the company ahead of us.

We have been very open. Elekta is not performing at full potential. As incoming CEO, I think that's great, give us a lot to do. It also gives us an opportunity to do better. When we look at the company, we don't feel, and I don't feel that there are structural headwind. Of course, we have competition like for any company. But the challenges are really within our control to face. And that's what we're about to do.

Today, we disclosed our must-win battle 1, we call simplify and power speed, but I'll get back to it. But let me go a little bit in details with some of the reflections. And if I start on the positive side, it's not positive, cancer burden is increasing. You all know that. Cancer incidence is on the rise, but fortunately, due to aging population and growing population, we see more and more that cancer is a chronic disease, so you get treated, you're cured, you come back, and then, you're using Elekta equipment again.

Then, the second mega trend is that there is a shortage of professionals. I've heard numbers up to shortage of 80 million. So that really speaks for us as a vendor into the industry to innovate, to support the professionals with speed and better treatment and more precision.

At Elekta, if I turn to the right, we're well positioned. We are #2. We are not #1. That's in many ways attractive position to be in, but we are clearly #2. Radiation therapy is an attractive and growing MedTech segment. We look at the segment likely to grow faster than the average MedTech segment.

Then, we have many strongholds built up over many years in key markets outside U.S., strong in Europe, strong in many Middle East Africa markets, strong, very strong in China, strong in a number of Asia Pacific regions. But clearly, what we also imply here is that we are not strong enough in the U.S., and I'll get back to that on some of the challenges and opportunities.

We are the only dedicated -- 100% dedicated company focused on radiotherapy. I think it's such a strength because when you're dedicated, you have to have product passion, you have to focus on your customers, you have to execute fast. We have a well-recognized brand. And what I truly cherish coming from a company with more indirect sales force, we have a direct sales force. So we are really in control of our commercial execution.

When we look at R&D spend, we have been willing to spend on innovation. I think that's right because when you look at the graphic, again, to the left, there is a need for us to innovate. We need more precision, we need more speed. We are not mature or end of the road in terms of innovation. When you look at gross spend, we spent roughly 12%. So it's very high for a MedTech company. So it's certainly sufficient to realize what I would call future best-in-class solutions because that is the future of Elekta that we have best-in-class products, highly innovative, and the current spending run rate supports that.

And then, we have, if you will, a razor blade model. So we sell our solutions, but then we supplement that revenue generation by more predictable, profitable software upgrades, but also service markets. And as you see, our service business continues to grow. So it's -- there are a lot of strength. We are fairly asset-light. We have, as you will outline, Tobias, good net working capital. Our physical CapEx requirements are relatively low. So there are many things to like about Elekta.

And if we go on the next page, then importantly, also, we have a strong portfolio logic. If I just speak a little bit to it, then perhaps many of you know. But the products are complementary, both from a brand commercial, but also workflow perspective. So if I start from the right, we are building software that really connect the different modalities because that's a customer need. And often when we tender, it's not only a Linac, it's bundled with other products as well.

But our Gamma Knife, what started Elekta, that is the gold standard for stereotactic radiosurgery of the brain, and we are uniquely positioned with -- and clear market leader. Same for brachytherapy actually. It's highly targeted, internally delivered dose for specific cancers. It's not for all. It's cost effective. So it's also attractive for emerging markets. And very often, it complements the Linac's treatment so you can get a boost, and then, you get your Linac treatments or the other way around.

And then, we have our Linacs. And we are the only one with both MR-guided and CT-guided Linacs. So the CT-guided Linac is really the workhorse for high volume, broad cancer treatment, and MR-guided is top of the line with the ultimate precision. So I want to take away -- my takeaway is, and hopefully, yours as well, the portfolio logic is good. That's not where we have a challenge. We don't need to slice off or do big portfolio changes. It really makes sense.

But then, of course, if we get into improvement areas, and we also believe in the statement that we are not at full potential and the industry attractive, then what do we need to look at? If we look at gross margin, it's too low. We used to be in the 40s, better up actually in 40s. We did see a dip post-pandemic or during the pandemic. And we never really recovered. And if we look at it now, we have too much single source, too much supplier dependencies. Some of them take advantage, and we will double down on continuous engineering to make sure that we have a relentless COGS reduction focus in the years ahead. It's not -- there's not a quick fix, but it's going to happen, and it's certainly viable.

Then, we -- when we look at our 12% gross spend on innovation, I do think we need to become more focused, more commercially driven. Elekta comes with very strong scientific routes, strong within academia. I would certainly push us to be a little bit more commercially focused when we take innovation bets in the future. And then, of course, over time, we need to grow at or above the market. When we look at our growth rate, we have to accept that we have been growing over the last really half a decade, even a bit longer, a bit slower, somewhat slower actually than main competitors. We don't like that. Specifically, we need a turnaround in our U.S. business. We'll get back on the FDA, I'm sure.

And then, we want to preserve our China position, where Elekta very cleverly have been early in the market, have localized our supply chain. And then, overall, when I look at the commercial organization, and as you know, I've taken the regions in direct report, we need stronger commercial execution. We will have to apply cost focus across all spend categories, standardizing our processes. And then, I'll get back to organization, but we're looking at simplification. But it really starts with a new operating model, that's a starting point that then leads into a simplified organizational structure to target faster speed, faster speed on product development, operational execution, commercial execution, really with the goal of focusing on our customers and patients.

And then, on quality of earnings, we will work hard to make the link between EBIT and cash strength. So these are some of the reflections I initially want to share with you. As we'll disclose in the end, we'll give a strategy update with further details during January.

If we then look at Q2 specifically, and I'll do it fairly fast, a decent quarter, I would say. We did 1% organic growth, 2% on orders, strongest in Europe, 11%. So we continue to see momentum of our product launches. That's good. APAC saw revenue growth outside China, but it couldn't compensate for the double-digit decline in China. But on China, it's quite positive that we are now seeing growth in orders. They had a depleted backlog. We knew that. We now saw in Q2 order growth, and when we look at the momentum, it looks quite positive for second half skewed towards Q4.

Then, negative growth of 8% in U.S. despite actually quite good order intake, but clearly, we need a commercial turnaround. I'll say the commercial organization needs Elekta Evo, but we need a turnaround in the U.S. We did have growth in LatAm.

Then, one of my first actions as CEO was to change the reporting lines of the regional heads reporting to me. And then we initiated an action to review, to make a comprehensive review of the order backlog. And that's what I want to update you on today. Compared to the order review presented in June, we have implemented, I would say, a little bit firmer interpretation of order criteria in areas such as delivery times, end customer side, down payment price indexation, et cetera.

There will always be a judgmental call, is a license there, is a site ready, and now, we apply a firmer interpretation. It's predominantly old orders that we are now canceling. But this action, I would say, we should have better forecasting accuracy, both in terms of sales development and profitability. The cancellation is SEK 2.2 billion. I would say this is it. We don't expect further structural revision of the order backlog. That's for me important to communicate. I've been in it at great detail. I would also like to stress that it has no revenue impact for this year or next year as such. And there's no cash flow impact. So we are not going to pay back any customer deposits. So that's where we stand.

I would like to end by saying it's quite important to take away that we have an order backlog that I consider at a healthy level, 2x annual sales give and take, based on last year's sale. So we have a lot of business to look forward to, if you will. So if I close on Q2, book-to-bill of 1, all right. Rolling 12 months, importantly, 1.09. We continue to see good momentum in Europe. Of course, I like to see over time higher net sales growth than 1%. That's clear. Good margin uptake, close to 38%. On EBIT, 10.1% versus last year, 9.8%. But if you adjust for lower capitalization and higher amortization, it's actually quite a significant improvement in, if you will, cash-based EBIT margin. And then, you will outline to be as -- but if we look at year-to-date cash generation significantly better than same period last year and good to see that net debt versus a year ago has been reduced by almost SEK 700 million.

So that concludes, and then, I look forward to coming back to the operating model.

Okay. Yes. Thank you, Jakob, and good to have you on board here. So I will then move into the quarter here a little bit more in detail. You mentioned that, Jakob, that we grew here in the quarter by 1%. This is then in constant exchange rates. We had a decline in our solutions operations by 4%, while our service grew by 7%. And also, I would like to mention here that the product launches of Elekta ONE and Elekta Evo had a continued positive contribution in the quarter.

Then, looking at the profitability, we land here in the second quarter a gross margin of 37.9%, which then means 220 basis points improvement year-over-year. We see that our new products continued to contribute positively. We also have a higher share of our service business in the quarter. Our Brachy and Neuro business, strong development, strong growth in the quarter. Price continues to be positive. And then, here, as we had in the previous quarter, we have a negative impact then from tariffs and FX, and this negative impact is then 70 and 50 basis points, respectively, corresponding to a total of SEK 163 million in the quarter.

The operating margin, adjusted EBIT margin, amounted to 10.1%, a 30 basis points improvement, and you are fully correct Jakob that we have a reduction in our gross R&D. When you see the impact in net R&D, it's increasing in the quarter, driven then by both lower capitalizations and higher amortizations. Selling and admin expenses increased somewhat in the quarter, and this was selective investments in marketing and IT and a bit of the phasing of the ASTRO cost here compared to last year as well as then some transition-related costs. But we will come back, as you were pointing out Jakob here to the program that we are on here. Net income amounted to SEK 229 million, and adjusted earnings per share amounted to SEK 0.65.

So let's move into next slide. And FX, I think that we have a similar view here of the FX movements as we had in the previous quarter. So how does FX then impact our operations? The first point being is that, as you know, our reporting currency is the Swedish krona. And when you have a strengthening of the Swedish krona versus the main currencies, U.S. and euro, this means that the sales in dollars and euro actually becomes less worth in Swedish krona, which then leads to in nominating terms lower revenues and earnings in SEK everything else equal, the translation effect as such.

Then, secondly here, we also have more revenues and cost in dollars. And when you actually then have a depreciation of the U.S. dollar versus our main cost currencies, euro and pounds, we also have then an unfavorable currency transactional impact in the quarter. And as you see in this table then, FX then had a negative impact of 50 basis points on the adjusted gross margin and 60 basis points on the adjusted EBIT margin.

Then, coming back here to Jakob's point here, we have a reduction of the net debt of SEK 700 million year-over-year, and it's obviously then driven by the cash flow generation. If you look now year-to-date, we have -- in the seasonal weak start since we're building working capital in the first 2 quarters to larger quarters later in the year, we normally have a weak start of our cash flow generation. But if you compare this to last year, we are about SEK 900 million better when you look at the cash flow after continuous investments.

When you look at the quarter, we improved our cash flow year-over-year by SEK 389 million. And this is then driven here, to your point, Jakob, to lower R&D spend as well as more favorable development of working capital here with more customer advances as well as a reduction of accounts receivables. And our net working capital as a percentage of net sales is now a negative of 7%. If we then look at the cash conversion here, it amounts to 91% compared to 65% a year ago.

And if you then look at some more long-term trends and key financial metrics and look into the net sales, gross margin, EBIT margin and operating cash flows, which obviously are all key metrics here for driving profitable growth and return to our shareholders is that we have seen net sales on a rolling 12-month basis, which is relatively flat year-over-year. However, we see a positive trend for the -- both the gross margin and the EBIT margin.

And then, here, what we just were talking about is that we have seen -- also seen a positive development for the operating cash flow, where we had delivered a significant improvement year-over-year. If we then focus a bit on the outlook for the second half of the current fiscal year '25-'26 and the full fiscal year, we reiterate our full-year '25-'26 outlook, where we expect net sales in constant currency to grow year-over-year. We expect sales in China to start recovering during the second half of '25-'26. And furthermore, we expect a continued negative impact from tariffs and FX at current exchange rates.

So with that, I hand over to you, Jakob.

Yes. Yes. So if we move on in terms of driving improvements, then we commenced really 3 months ago, forensic, if you will, of Elekta data 360 review as a leadership team and together with the Board to assess the situation. And with the outset in that analysis, we then defined 4 must-win battles, of which we are today disclosing the first one. We call it simplify, empower, speed. And it's really about a new operating model. I've seen certain comments saying, "Oh, it's a cost-saving exercise". It's not. It's a new operating model. Then, there are consequences of that new operating model that I'll come back to in terms of cost saving. But the aim was really to increase velocity for our product development organization, our commercial execution and our operational execution.

The secret sauce of a company like Elekta when we compete with the even larger enterprise has to be speed, agility, customer intimacy, product passion. So what we are trying to do with this exercise, and we will do it is to simplify how we are organized. We will eliminate complexity and certainly become a bit more assertive and insist on accountability. But with accountability also comes the ability to empower teams, so we move decision-making closer to our customers.

And then, in doing so, we approached the organizational review, zero-based. We say, okay, this is -- these are the focus areas, this is how we want the operating model to work, what organizational size do we then need to support those priorities? And we have then moved it into a much more decentralized model with regional-based P&L. So we will take our regions P&L that will add up give and take to Elekta's P&L, again, to increase ownership mindset, make sure we drive decisions closer to where we meet customers, increase speed, agility, make people work as owners of their own business, if you will.

If we then look at this slide, there has been changes to the executive committee. It's not all of these boxes that are part of the executive committee, but they do report to me with the exception of Neuro that reports to Brachy. But let me highlight some key functions here. We have made changes in the executive committee. We communicated that almost 3 months ago. We feel good about these changes. We have now hired new CFO, but thank you so much to you, Tobias, for still being here in the interim. We have hired a new Head of HR, soon to be disclosed. We have a search ongoing for COO.

We have strong regional managers. But what we did do when we looked at how we are organized is to say how can we increase the span of control, and some of the consequence, I will outline on the following page really stems from that we have increased the so-called span of control from 6 to 8.5. And we have reduced organizational layers from 9 to 6. And you can say, "Ah, is that a big thing?" It's a big thing because it reduces the chains in the chain of command. It makes us more agile. And obviously, it has significant consequences, not least on management positions.

So if we go on the next one, then I'll outline some of the consequences. So based on the new operating model, and based on the supporting org structure and a zero-based approach, we have then defined that we need to do a net reduction in our workforce, roughly 10%. We are 4,500 today. And we have identified 450. It will happen pretty quick. It has major impact on material positions. The targeted cost reduction is no less than SEK 500 million. It's a net reduction. It will have full impact our Q1 '26-'27, but you're going to start to see impact really from our Q4 this year.

If we give a split because some of the resources are part of COGS today, 30%, we estimate, our COGS goes into gross margin and 70% OpEx. Those numbers may change, but directionally, they are right. And then, we are going to communicate with Q3 latest the restructuring charts. But I'll just reiterate what it is, what is stated to the right. We are doing this to get speed and agility. We are doing this to firm up accountability, so we can empower our teams. Yes, absolutely, we need cost discipline across the organization. And then, we are doing this to increase velocity across the board at Elekta.

So it's a big day. I would also say it's a tough day because we have to disappoint a lot of colleagues that they will no longer be part of the journey. But our job is to continue to be successful, financially successful, so we can invest in life-saving technology, and that's what we are committed to.

And then, we look forward to giving you further strategy update during January '26. We are deliberating the date. We'll get back to you in due course. We will have our interim report early March. And then, we will invite for our Capital Markets Day in June here in Stockholm and very much look forward to that with the leadership team standing behind the updated financials. Thank you.

So let me conclude here by saying good performance, strong performance in Europe. Yes. Elekta Evo is making an impact. It's also a great product, I have to say. Gross margin, improving. Cash flow, as you outlined, Tobias, continues to be better than last year. We have now disclosed our first must-win battle leading to a simplified organization, but as I said, really with a view of accelerating execution. And then, we have done a comprehensive order review. And based on firmer interpretation of criteria, we canceled SEK 2.2 billion, but no cash flow effect, no revenue impact.

Great. Thanks, Jakob and Tobias, for a little bit longer presentation, but it was very much needed in where we stand right now. So we have still 30 minutes for Q&A. I think Jakob went through the calendar. There's nothing to add to that. So try to keep the questions 2 at each time, so if you have further questions you can line up later in the queue so everybody has a chance to ask question. So by that, operator, we are now open for a Q&A session.

[Operator Instructions] The first question comes from the line of Deshpande, Kavya from UBS.

Two for me, please. First was just around the order review. So I understand your reasoning was just applying stricter criteria on the back of the June review. I don't know if you could provide any more color on sort of the regional exposure of the orders that were canceled.

And then the second was just on the Evo in Europe. So would you be able to compare how it's been doing this quarter versus last quarter? I appreciate you called it out on the call, but it wasn't called out in the press release, hence, the question. And whether the strength was mostly upgrades or whole device sales? I don't know if you could provide color on that.

Sure, I can do that. Yes. So we did the order review. And as I said, we applied the same criteria, but in a firmer context. If we look at regions, it was predominantly our Middle East, Africa region. That's where we saw the biggest impact. There were -- it was old orders. So some of them up to 5 years. And there will always be a degree of subjectiveness, do we think the ride is going to be ready, is there funding in this or that location? And as I said now, we apply the firmer interpretation.

On Evo, up from last quarter in terms of units marginally, and outlook, good second half.

The next question comes from the line of Vadsten, Mattias from SEB.

I'll keep myself to 2 questions. After some commentary on sales growth going forward, perhaps after 2025-'26, so if we look at recent 5, 10 years, Elekta has grown, let's say, around 3% per annum. Order momentum has not been there recently in some areas. It's understandable, for instance, China. With the cost savings also now ahead and the operational improvements, you talked about the third program, I think, so what kind of growth rate do you see doable for the company more structurally, let's say, midterm? Yes, it sounds maybe difficult to outpace the growth we've seen in the recent 5 years. Or am I missing something there? That's the first one. And then, I have another one.

So we don't provide more guidance than what we have for this year, and that's a positive organic growth rate. On mid- to long-term, we will come back to that at Capital Markets Day. On cost savings, I'll just like you to come back to what I said. We are adjusting the operating model to accelerate commercial execution. As a consequence of operating model, there are cost savings. And over time, we clearly need to grow at or above the market. That's our ambition, and we'll come back with the detailed plan latest Capital Market Day next year.

You had a second question.

Yes. You disclosed book-to-bill for China, which is appreciated, and it looks like the order momentum picks up. Could you also remind sort of how book-to-bill for China looked, let's say, last 12 months or now fiscal 2024-'25 just to get a sense of where we are on China right now? That is my second one.

Yes. So, yes, we had a book-to-bill roughly 1.3 this quarter, roughly 1.3 last quarter. I think rolling 12 months, as I recall, 1.14. Then, I think they're important to say, well, we recognize at Elekta, we are bullish than most MedTechs on China, but we have the visibility we have. So Elekta got in early. We have localized our supply chain, then the market was strong. Then, we had the anticorruption campaign. It became much weaker. But if we look at our first half, we have seen the RT market up by a very strong amount. And we are now seeing positive year-on-year order growth. And when we look at our sales funnel, it looks like a strong both revenue order growth, double digit, high double-digit second half. So we -- that's the visibility we have, and we believe in it.

Absolutely. Absolutely. And just to add to that, Mattias, when you look at the book-to-bill here for China, it has actually been a steady increase, and you saw a reported number, but if you would look at the rolling 12, it has actually been a steady improvement here over the quarters here, and it has been ongoing for a while.

We'll move to the next question.

The next question comes from the line of Liljeberg, Kristofer from Carnegie.

Also 2 questions. First, coming back to the implied cost savings from the new operating model, it seems all else equal that would add some 3 percentage points to the EBIT margin. But I think you talked about this being a net effect, but are there some negative factors that might offset this? For example, you mentioned that you want to improve quality of earnings. One way of doing that is, of course, to stop capitalized R&D, and if you were to do that, I guess that would, at least from an accounting perspective, remove part of the, otherwise, positive effect, if you could comment on that.

Yes, we absolutely can. So yes, you should think that way that we say no less than SEK 500 million, and there will be a full impact on the margins with the split I outlined COGS and OpEx, but, of course, come into EBIT. I think let's keep accounting separate. I'd just say that, in general, we like to build a closer link between the EBIT and cash generation. We have heard that from a number of you also that you would like to see that, I agree. I'm not a big fan of too much capitalization, some you have to do, but we are certainly deliberating on what is the right approach going forward, but that's accounting. So I think we need to keep that separate.

Okay. Yes, to be clear, so the way you report EBIT, it might not improve the full SEK 500 million?

I would more say it differently that the 3% you should expect with full run rate for Q1 next fiscal. And whether we will do adjustment in how we do to capitalize is a separate topic. And frankly, we haven't decided on anything except what I'm saying that I would like to see a stronger link between EBIT and cash flow.

Absolutely.

Okay. And then my second question, of course, the importance here of getting Evo approved in the U.S. I saw you comment or said to one of the Swedish news agencies that you expect to have an approval within the 180 days review period. So maybe if you could talk about your confidence? And how this process is ongoing with the FDA?

Yes. Yes. So we have been confident along the way. It's just taking a really long time. So we submitted over the summer. And as you outlined here, you have a 180-day window. There are periods in the submission process where the clock has stopped. But you should say, 180 to 200 days. And we do expect to get approval within. Of course, it's not fully in our control, there is a regulatory body. But based on indications, we are positive. We have been positive all along the way. We are even more positive now than we were 3 months ago.

The next question comes from the line of Germunder, Ludwig from Handelsbanken.

Ludwig Germunder from Handelsbanken. I have 2, please, and I'll take them one by one. So the first one is around the regional restructuring of the P&L. As a consequence of this, do you have any -- or could you say anything about how incentive systems will change to drive the more local P&L ownership?

Yes, I could. And I probably will, in due course, but first, I would like to discuss it with the regional management team. Today, we are announcing the change in structure. But clearly, clearly, we want incentives to match the value creation of Elekta. It's very clear. And I would, in general, like to see a stronger ownership mindset in the company.

Okay. And my second question is on the cost savings as well. You gave us the figure of SEK 500 million annually in cost savings. Would you be willing to give us some more flavor on the different parts? And how they will move in, let's say, next year? So, I mean, if you share up the OpEx and -- or should we expect different parts to move given the SEK 500 million? Or should we expect a decrease? Or in the parts expected to increase?

Yes. Yes, it's a good question. I think the guidance we gave here is no less than SEK 500 million. So the approach has been to start by saying what is the right structure, and then, we are down to now individuals. In general, we have been doing it to increase commercial execution and operational execution, and very importantly, avoid duplicate work, which we have identified, delayering become more agile.

I will not go into the specific details in terms of where are we removing the 450. We -- as you can imagine, we have a town hall this afternoon. We will -- I think our staff deserves to be told first in greater detail. But I think what you should take away is that we do this for enhancing the execution, and then, as a consequence, savings no less than SEK 500 million, and we are fully committed to. You will see the full run rate effect Q1 next year, and that's not too far away.

And you also had allocation there, what's in the gross margin and what's below the gross margin.

Yes. Good point.

We'll move to the next question. I think it's from Erik Cassel at Danske Bank.

First, I want to talk a bit about the software backlog and deliveries in Europe. I mean, we're naturally seeing EMEA margins come up quite significantly. And I just want to get some sort of understanding on how much of that is driven by software? And if possible, I'd like to know if the software book-to-bill is still positive in EMEA?

Yes. Well -- I mean, I think we stated here. I think, as you alluded to here, we have seen a very strong contribution from -- I mean, both in terms of the Elekta Evo per se as well as the upgrades here in -- on the existing Linacs, what we call them, Iris. And when it comes to -- we see a continued strong development here. And you heard Jakob talk about in the second half. So that remains, and that is what we -- still, we view it very positively.

Yes. So I can say -- yes, sequentially, Erik, we had double-digit growth sequentially on Iris and Elekta planning.

Is that on orders or on deliveries?

Both.

And is the book-to-bill still positive?

We don't go in -- it is actually, but we don't go in further details. In general, we keep our book-to-bill at a fairly aggregate level for competitive reasons.

Yes.

Okay. Perfect. Then just last question. Solutions seems to be down some 20% organically in Americas. I was just wondering, how much more is it down in the U.S. since that's a key driver? LatAm seemed pretty strong. And how many more quarters of negative organic growth in the U.S. do you expect to see?

Yes. So we actually had a good order quarter in the U.S. in Q2. But we do expect that solutions will bounce back, obviously, when we get Evo FDA approved. So we look forward to our Q4 this year. Then, we need to get reference sites upgraded. We need to sell into our installed base, make the market recognize the Evo platform, which is versatile and precise. And then, it's going to be the grind of selling and competing.

And I can also add a little bit flavor without giving numbers that both the orders as well as the revenues are better in the U.S. than on average for Americas.

Thanks, Erik. [Audio Gap]

I'm going to keep it to 2, please. The first one is just how you're thinking about the competitive landscape? Obviously, Varian or Healthineer has announced the plan to launch a new next-generation Linac platform sometime in 2026. I'm just curious kind of how you think either will stack up against that as sort of you as fast forward into '26 and '27 and whether this is a concern for you?

And then my second question is a bigger question, obviously, the ambition to return to market growth. I know you guys don't want to guide, but I'm just curious if you might be willing to at least give a little bit of a time line on when you think that is achievable? Is this already a project for '26-'27? Is there more R&D work that's going to take a bit more time and we need to wait a little bit longer? So that -- any color you can give around that, that would be great.

Yes, I can take those. In general, I prefer not to comment on competitive -- competitors' product portfolio. We focus on us. And, of course, in our engine room, we benchmark, and we are taking note of the same data points that you highlight. We look at our competitive situation here now and we think we stack up. Of course, we have certain improvement in areas. We have certain strength. I'm not going to disclose them all. It would not be a smart move.

And then, as I started out by saying we invest 12% of revenue in R&D. So we have a number of pipeline projects ourselves, some exciting, some need tweak. So -- and then let's see how we stack up. But I personally would say, and I live that in other companies as well, being dedicated to RT and being willing to fund investment. And being passionate about what you do from a product development perspective can take you very far, and it should be the secret sauce of a company like Elekta.

Then, when we come to growth, yes, clearly, our ambition is over time to grow at, I would dare to say, above market. No MedTech company would want to lose market share as we have been doing for some years. I've been very clear to the organization, very clear to the commercial part, but also to the product development guys that now is time to shape up.

In terms of when, I think let's come back when we have Capital Market Days. I think that's appropriate. So it's not hip shooting, but it's really anchored in a financial plan.

Thanks, Veronika. We'll move to the next question, Jon Unwin at Barclays.

I just had a question on the R&D expense. You've commented that 12% of revenues, but also that you need to sort of focus on more commercially viable projects. Is there scope for that 12% of percentage of sales to come down over time as you focus the R&D intensity on the commercial projects?

And then, my second question is on the midterm targets and sort of taking over the CEO role, and how confident you are in the ability to increase gross margin to pre-pandemic levels and EBIT margin above 14%? And any color you can give on a time line for those targets would be helpful.

On R&D expense, what I can say is 12% is in general high. It's, in many ways, good because it's funded today in our cash flow at least. What I stated was that when we look at both existing portfolio and future portfolio initiatives, we will have a strong commercial lens as well as scientific and feature lens to really understand what are we solving for. I think, if you take, for instance, our MR-guided Linac, Unity, wonderful product, truly making impact in the market. Commercially, we haven't achieved what we hoped for when we started out that project. And we want to make sure that we learn from that when we move forward.

Is there scope for further reduction? We'll see. I think it starts by saying, do we have the right projects in the pipeline? If we do, we'll keep at 12%. If we don't, we'll reduce.

In terms of midterm targets, I'll restate, we'll get back to that in our Capital Market Day. I would say, though, I think there are opportunities to increase the gross margin. But I'm not going to say whether that's at or above our midterm guidance. We'll come back to that.

And next question will come from Sten Gustafsson at ABG.

So 2 questions on Evo, please. Firstly, regarding going back to the FDA approval process, have they communicated with you that there is a delay related to the government shutdown? Do you think that has had any impact on the timeline for your approval process?

And my second question would be if you could remind me about the -- how you plan to roll out the launch globally of Evo in China, Japan and other key markets?

Yes. To take your first question, no. No impact from shutdown. We have a good dialogue with the FDA, actually very good.

Secondly, rollout, yes, we got the Evo domestic approved in China. So that's good. Focus is on ensuring market access. It's coming in. It's actually proceeding quite nicely. The sore spot is in U.S., but I think we discussed that already.

So it's already approved in China?

Yes.

Excellent.

Yes. We think so also.

Thanks, Sten. Now, we'll move to the next question from David Adlington at JPMorgan.

First one, just a sort of bigger picture one on the 450 roles being cut. Just wondered how you think about eliminating that level of workforce -- tentative workforce without having an impact on R&D, quality of services, manufacturing capacity? Just how you're thinking about that?

And then secondly, as you look into next year, Street has got mid-single-digit top line growth. How comfortable are you with that with -- given the fact that the order book has been tracking some way below that?

So if I take the first one, keep in mind, we solve for something different than reducing headcount by 10%. We solve for speed, execution, accountability, delivering products faster to the market. And in doing so, we have delayered the organization, increased span of control. So as such, if you do the math, then it has a very significant impact on managerial positions.

We are not reducing frontline field service engineers, so it is an office-based managerial reduction. And we do it because we believe we can, frankly. And we believe that we -- it will enable us to move faster with firmer accountability. We have had too many functions with duplicate roles, duplicate managers, and that's what we are resetting.

And then, we also take the liberty to be a little bit less corporate, a little bit more business savvy. So we are streamlining central functions across the board under with due consideration to guardrails and controls. So we feel good about that, and it's confirmed throughout that we should be able to move, I will have to say, faster than we are today from a commercial and product development perspective.

In terms of longer-term guidance, I'll stay at what we said, we guide this year, positive organic growth rate, and then, we'll come back at the Capital Market Day, and we very much look forward to that.

Thanks, David. And now, we'll come up to the last question for this session, and that is a question from Ludvig Lundgren at Nordea.

Yes. So 2 for me. And first one on gross margin. I wonder if you had any effect from tariff mitigation actions here in the quarter and whether you have some further pricing potential here moving ahead?

Yes, we have some. But I think in -- on average here, that the -- what we see as a net impact from the tariffs is actually that it drags down the gross margin in the quarter. But, obviously, here, to your point, and I think also what we alluded to in general, more broad terms that we will continue to work here on the passing through this cost through the value chain and also here addressing in terms of productivity as such.

Okay. Great. And then final one on the order cancellations here. I guess, these were mainly orders that had a very small or no prepayments connected to them. So I wonder, like looking at the remaining part of the order backlog, have all of the remaining orders, some prepayment attached to them? Or how does it look for the main part?

A very significant part. Typically, if it's public tender, we don't get prepayment. Then, we have some older orders that we have deemed very high likelihood will lead to revenue generation that are without prepayment. But in general, you should think that all orders coming in now from private sector will have prepayment or they have to be validated by me and CFO.

Thanks, Ludvig. And that was the end of this call. But maybe before closing, a final remark from your side, Jakob.

Yes. So we are on it. This is a quarter of execution. As you may also sense, we have focused on what happens this quarter, next quarter, the next 18 months. We know that we are not at full potential. It's a lot of hard work. I take a lot of comfort in that everyone from Board of Directors to management team to Elekta employees are committed that we know we need to change. We know we can do better. And we don't do it just for our shareholders, we also do, but we also do it so we can continue to drive our purpose of building hope, invest in technology, as I started out by saying there's a huge unmet need for radiation therapy. And there is a strong need for us to innovate and be a strong competitive alternative to the major player. So look forward to meeting all of you in future engagements.

Thanks.

Thank you.

Thank you very much, everyone.

Thank you.

Ladies and gentlemen, welcome to the Elekta Q1 Report Conference Call. I'm Iruna, the Chorus Call operator. [Operator Instructions] And the conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast.

At this time, it's my pleasure to hand over to Peter Nyquist, Head of Investor Relations. You will now be joined into the conference room. Thank you for your patience.

Hi, and good morning, everyone. My name is Peter Nyquist. I'm the Head of Investor Relations here at Elekta. With me here in Stockholm, I have our CEO, Jonas Bolander; and our CFO, Tobias Hagglov, who will be presenting the results from the first quarter of this fiscal year '25, '26.

So we will start with the normal agenda with Jonas presenting some highlights from the development during the first quarter as well as some achievements we have reached during the quarter. Then Tobias will bring us down to more details on the financials. And then we will have an outlook from Jonas by the end of the presentation. And as always, after presentation, we will end with a Q&A.

But before starting, I want to remind you that some of the information discussed on this call contains forward-looking statements. This can include projects -- projections regarding revenue, operating result, cash flow as well as products and product development. These statements involves risks and uncertainties that may cause actual results to differ materially from those set forth in the statements.

With that said, I would like to hand over the word to you, Jonas. So please, Jonas.

Thank you very much, Peter, and thank you all for attending this call. So we start with the key takeaways for the first quarter of fiscal year '25, '26. The book-to-bill ratio came in at 1.05 in the first quarter. We saw a 1% order decline in constant exchange rate compared to last year. However, rolling 12-month book-to-bill remains at 1.09, reflecting a healthy business environment.

Net sales increased by 3% in constant currencies, mainly driven by continued strong momentum in Europe where our latest linear accelerator, Elekta Evo, and our new software suite, Elekta ONE, are gaining traction, as online adaptive treatment capabilities continue to set new benchmarks in the market.

The adjusted gross margin declined to 37% compared to 37.8% last year, mainly driven by changes in FX and tariff costs with a total negative impact of 190 basis points. The negative impact was partly offset by price improvement.

The adjusted EBIT margin amounted to 6.5% compared to 7.4% last year. The lower adjusted EBIT margin derives mainly from the gross margin and increased expenses from our net R&D. However, the negative effect was partly offset by lower selling and administrative expenses, reflecting the positive effect from cost saving initiatives.

Moving to the cash flow for the first quarter. The operating cash flow after continuous investments amounted to negative minus SEK 361 million, an improvement by SEK 529 million year-over-year, mainly driven by improved working capital management.

Moving to the next slides, where I will give you more details regarding sales and market development during the quarter. In constant exchange rate, group sales increased by 3% year-over-year. Americas sales declined by 4% in constant exchange rate compared to the last year when the region grew by 16%. The stable development in Latin America was fully offset by lower sales in North America, where U.S. volume declined mainly as a result of customers awaiting the Elekta Evo clearance.

APAC sales declined by 4% in constant exchange rates, mainly due to lower volumes in China and India. Chinese sales were negatively impacted by last year's weak order intake.

Sales in EMEA increased by 15% in constant exchange rate compared to the last year, driven by strong performance in Europe, supported by new product launches. We saw a strong growth in countries like France, U.K. and Poland. As you can see in this slide, EMEA is now the biggest region with 40% of the group -- group's total sales.

During the quarter, we can clearly see how our adaptive capabilities across all our products are generating concrete customer wins. For -- if you go to Elekta Unity, we have noted that the ERECT trial, which demonstrates Elekta Unity's capability to treat prostate cancer while preserving the erectile function, has gained significant attention.

University of Texas Southwestern is the second bullet where we also celebrated an important and comprehensive deal, including some of our most advanced solutions to the University of Texas Southwestern. UT Southwest is at the very forefront of radiotherapy and a longstanding partner to Elekta, and we are very proud that our solutions will be taking cancer care to the next level in terms of ultra-hypofractionation.

And the last slide then, during the quarter -- or the last bullet. During the quarter, the Leksell Gamma Knife received FDA clearance for treating certain types of epilepsy. This is an important step towards expanding the scope of stereotactic radiosurgery. Elekta is the global market leader in neuro, and this is a highly profitable business segment for us. Neuro with our Leksell Gamma Knife plays an important role when treating certain cancer types where it improves outcomes and ensures a better quality of life.

During recent years, we have, as you know, been accelerating innovation. I'm therefore very glad for the positive customer response for our recently launched solutions, Elekta Evo, and our software, Elekta ONE Planning and the Elekta ONE Online. During the quarter, we have seen several deals, including both Elekta Evo and Elekta ONE, showcasing the great value Elekta offers to its customers. We will continue this journey and leverage our leading product portfolio to drive profitable growth going forward.

With the current geopolitical landscape, we want to take the opportunity once again to remind you about exposure to U.S. tariff. Elekta's sales in the U.S. market, roughly 21% of total sales include approximately 1/3 devices, 1/3 software and 1/3 of service. We communicated our exposure already in the fourth quarter and that we expected an impact from tariffs in Q1. After we reported our first quarter, we now have a better view of the magnitude of the negative impact from tariffs.

In the first quarter, additional tariffs compared to last year amounted to SEK 33 million, and tariffs had a negative impact on the adjusted gross margin of 90 basis points. For Q2, we expect continuous negative impact on the gross margin. We are trying and working hard to offset these extra costs in various ways. We have implemented a specific tariff clause in our contract. We work on prices, improving our sourcing efficiency and are adjusting our cost base.

For prices, we are continuously adjusting our prices as we have done for quite some time. Also when Evo is launched in the U.S. market, their prices will be adjusted in accordance to the product being in the premium segment.

Overall, we are closely following the market development and are actively trying to manage the situation in the best possible way.

With that, I will now hand over to Tobias for the financials.

Thank you, Jonas, and good morning, everyone.

Let's look into the first quarter. During the first quarter, net sales increased by 3% in constant exchange rates. Solution sales increased by 1%, and Service grew by 4%. As Jonas previously mentioned, our product launches in Elekta Evo and Elekta ONE had a continuous positive contribution to the growth in the quarter.

The adjusted gross margin amounted to 37% with a negative impact from foreign exchange rates and increased tariffs costs. Price improvements continued in the quarter.

The adjusted EBIT margin amounted to 6.5%, corresponding to a year-over-year decrease of 90 basis points, driven by the lower gross margin and higher net R&D costs, while the SG&A costs were down compared to last year.

Net income amounted to SEK 106 million, and adjusted earnings per share amounted to SEK 0.31.

Then let's look into the different building blocks for the year-over-year adjusted EBIT development. Overall, as I have mentioned, the adjusted EBIT margin declined to 6.5% in Q1. Our gross margin declined to 37% with a negative impact of 190 basis points from FX and additional tariffs cost. We have continued to improve our price levels with support from general price increases as well as from newly launched products.

In the first quarter, expenses declined by 4% and admin expenses by 3% in constant exchange rates. The decline in SG&A cost is mainly related to the cost reduction initiative totaling SEK 280 million on an annual basis implemented during last year.

Net R&D costs increased by 17% in constant exchange rates. This is due to higher amortization and lower capitalizations while our gross R&D declined year-over-year.

Then I will explain the FX movements in the quarter to facilitate understanding how it impacts Elekta's P&L. Our reporting currency is the Swedish krona, and what we have seen recently is the strengthening of the Swedish krona versus our main revenue currencies, U.S. dollar and euro. This leads to lower revenues and earnings in SEK, everything else equal.

Secondly, we have more revenue than cost in U.S. dollar. The depreciation of the U.S. dollar versus our main cost currency, euro and pounds, has led to an unfavorable currency transactional impact in the quarter. We will continue to work with price improvements and productivity enhancements to mitigate FX headwinds.

Let's then have a look at the cash flow development. In the seasonal weak first quarter, cash flow after continuous investments improved by more than SEK 500 million year-over-year to negative SEK 361 million. The improvement was mainly driven by the improvement in working capital, in particular operating receivables.

Net working capital as a percentage of net sales amounted to negative 7%. Lower investments contributed positively as well.

Rolling 12 months cash conversion amounted to 92%, which is well above our target of 70%.

We also want to share the development of some key financial metrics, net sales, gross margin, EBIT margin and operating cash flow, which are all key metrics for Elekta to deliver profitable growth. Although net sales on a rolling 12-month basis is relatively flat year-over-year, we see a positive trend for the gross margin and EBIT margin, in line with our ambitions to move the gross margin to pre-pandemic levels and an EBIT margin of 14% and higher. Additionally, we have seen a positive development for the operating cash flow, and we have delivered significant improvement year-over-year.

With that, I hand over to you, Jonas.

Thank you very much, Tobias. Now focusing on our outlook for Q2 and the fiscal year '25, '26. We expect net sales for Q2 to be negatively impacted by a continued weak U.S. development as well as a negative effect from last year's low order intake in China. However, we expect sales in China to start to recover during the second half of '25, '26.

Furthermore, we expect continuous negative impact on earnings from FX at current exchange rate and from tariffs in Q2. We reiterate our full year '25, '26 outlook, where we expect net sales in constant currency to grow year-over-year.

So to summarize the first quarter '25, '26. We continue to deliver a solid performance in Europe, supported by product launches. We had a lower gross margin compared to last year, driven by changes in FX and tariffs with an impact of 190 basis points in total. However, it was partly offset by price improvements through price increases and new product launches. Cash flow after continuous -- improved by SEK 529 million year-over-year, driven by improved working capital. Thank you.

Thank you, Jonas, and thank you, Tobias, for that presentation. Before handing over to the Q&A, here, you can see the updated financial calendar. So next week, we have the AGM here in Stockholm, and then we will report our Q2 numbers on November 26.

So with that said, I would like to connect to the operator. So we're now opening for Q&A. So please, operator.

[Operator Instructions] The first question from the phone comes from Al-Wakeel, Hassan with Barclays.

A couple from me, please. Firstly, if you could elaborate on the Q2 software dynamics and how we should think about growth and margin expansion, if at all, in Q2 given tariffs, FX headwinds, but also U.S. and China softness persisting.

And then secondly, if you could provide any update on when we should expect the Evo approval in the U.S., when you're expecting that, given that volumes continue to be impacted. And related to this, whether you think that U.S. weakness could be driven by anything else. Maybe a weaker backdrop or share losses.

Maybe, Tobias, you can start with the financial question then, Jonas, on the FDA approval.

Yes, absolutely. Hassan, I will start covering your first question. Yes, so in our interim report here and what we have stated is that we do see here a pressure in the second quarter on our revenues here from China and U.S. What we also see is that we see a recovery of the growth in China in the second half of this fiscal year.

When you talk about the pressure here from the tariffs, we communicated now as we know the impact. And I think that you can assume the same level of margin impact from tariffs throughout the year. Then obviously, with saying that, it's also important to say that we are not standing still.

So of course, that we, as a company, just as Jonas mentioned here, will in different ways manage this. It will be via prices. It will be via optimizing our supply chain and also productivity enhancements. So those measures are along the way. But as you know, it's also something that we are working through. So that's how I will mention.

And I also state that the Q4 results that we presented here, which was an important milestone of driving profitable growth and enhancing the gross margin over time, that lies firm, and that is a work that we will continue to do.

Thank you, Tobias. And Jonas, on the FDA approval.

Thank you, by the way, for the question. If we then go to Evo approvals, we talked a bit about that before. We changed our strategy with respect to the Evo approvals and so on, where we have a more efficient strategy today. Evo approvals have been resubmitted. We're working with the FDA. We hope that we get the products cleared sooner rather than later, but we don't know which timeline we can promise that on. So sorry, but we honestly can't give you an answer on that.

And then you were asking also about if we see anything else in the U.S. market, maybe a bit of temporary wait and see in the U.S. relating to tariffs and tariff impact and so on. So we start to see a bit of that, that it gets slightly more complicated due to the tariff exposure there.

The next question from the phone comes from Cassel, Erik with Danske Bank.

So first question, EMEA is doing really great, really carrying the group now in terms of margins. I think it was up some 5 percentage points this quarter and has been doing really well for the past 3. So I was just going to ask, how much would you see that has been driven by mix effects from -- if you can sort of split it up between software and Evo, how much of a driver each, say, software and hardware has been?

I think looking at the development, what we see in EMEA, it's clearly state that, I mean, we have been in an investment period here and investing in our R&D portfolio and the innovation pipeline here. And what we see in EMEA is clearly the result of that. So clearly, the leading indicator here and the driver of the improvement in EMEA is led by our new products, Elekta Evo and Elekta ONE Online and the software in general.

And that is key for us to both, of course, drive revenues, but equally important to drive the profitable growth and drive the gross margin expansion. So that has absolutely been the most important factor in the EMEA region. It's backed up by the new -- newly launched products.

Okay. But can it be said anything if it's a majority of software or majority hardware that's driving margins?

Yes, I think it's both. When it comes to the -- our Elekta Evo, it's clearly that it is an enhanced customer and patient's value, which clearly contributes both to enhance customer value. But for also the shareholders, it means a better margin.

The software, in general, we have seen here throughout the last fiscal year that we're running with a strong growth, and the growth here continued here in the first quarter. So we don't necessarily strip out the exact impact of each factor here. But it's both, I would say, and a key for us to drive the profitable growth.

Okay. And then you're talking about Q2 being weak on the back of the 2 accretive regions within Elekta, U.S. and China. First, are you able to commit to say that you will see organic growth in Q2? Or should that be negative?

And secondly, if we are to assume that both of these high-margin regions will see a decline in Q2, how much of a gross margin impact could we see from geographic mix?

So as you know, we don't explicitly guide on specific quarters here in terms of exact margin levels or growth levels. But what we see here in the second quarter is clearly that it will be impacted by the China operations here as well as in the U.S. So I think for that, you can assume that we do not expect, so to say, organic growth in the second quarter. But more than that, I don't provide us an outlook.

But as I said, I think it's also key for us to structurally -- we see the improvement here in EMEA backed up on the product launches. Therefore, yes, as Jonas mentioned, it's key for us to run through the FDA approval in the U.S. And in China, we see a growth here for the revenues in the second half. So that's how I would frame it.

In terms of the gross margin, the midterm outlook is the same. And we have had an important milestone here in the last quarter. Now we see some additional headwinds here in the first quarter coming here from tariffs and currencies, but the path here lies firm. And for us, it's taking on that and build on the strong ending of last year and continue to drive that.

And we have also great tools from the new products, which we will continue on a global level to roll out this and combine them with the other measures here in terms of price increases and drive the commercial execution as well as with productivity enhancements.

Can I do a quick last one? Yes, just on the tariff losses and pricing offsets that you talked about. I know during the high inflation period, you talked about not being able to implement much on already -- on orders. I was just going to ask if you have any freedom now to implement price increases on the orders that you've taken or only the new ones that you're going to take leading to installation in, say, a year to sort of model the phasing of price increases.

Erik, it's a bit of a mixed bag, I would say, if you look at the order backlog that we already have. We deal with this order on a case-by-case basis. We are successful in some instances. And in some instances, the customers already had set budget and are severe difficulties to pay additional amounts for it and so on. So it's dealt with negotiation on a case-by-case basis.

The next question comes from Vadsten, Mattias with SEB.

First one, and sorry if I recall incorrectly, but I think you said in the Q4 call that China had a big book-to-bill of above 1 for 2024, '25 fiscal year. So how are you talking about this figure now sort of book-to-bill last month? And also sort of a clarification as to why China is so weak in the start of the year. What magnitude of a sales drop you saw in Q1? And maybe a bit more specific on what you see in Q2? So that's the first one. And then I have one more.

Okay. We'll start with that one.

Should I start, and then you can jump in, Tobias? Thank you very much for the question. So as you know, we have had the anticorruption campaign in China and so on. And then that meant that we did a lot of installations from our order book during that period in time, while orders were not where they were before the pandemic and so on.

So we basically have a quite small order book in China today that we need to recover, and we see a pickup in the order book. However, if you compare it to the numbers that we had pre-pandemic and so on, the order book is not on that level. So we need to, of course, get additional orders. But we see now a clear pickup, and that's also why we look a bit more positive on the second half of this year.

And if you look at the cancer programs in China and the need in China is still quite large. So we are positive on that. But it takes time to transform these orders into revenue as well. And so we need more orders in order to get the sales there.

Yes. I think you're pretty well, Jonas, in just translating to some financial metrics. So to your question that the book-to-bill ratio continues to be well above 1, which is then actually creating the platform there. But we do expect the revenues to be down here in the second quarter.

And we are, as you say here, building up the backlog. And we have a strong presence in China by being, by far, the market leader. So that is essential for us and something that we will continue.

Thanks. And Mattias, you had a second question, right?

Yes. I had, first, a follow-up. Would you disclose what orders and sales were year-over-year in China for Q1?

No, we don't explicit show that. But we said that we see that the -- yes, I can just repeat what I just said here that the -- we see the pressure in China when it comes to revenues, but also pick up here in the second half.

Okay. Then my next second question. On EMEA, I agree with the previous person speaking that it's really carrying the group. So organic sales growth of 16% Q4, 15% Q1 year-over-year. Should we extrapolate those kind of performance as some coming quarters, maybe not Q4, the comp is tougher, but should we extrapolate that kind of performance? Or are you seeing anything else?

I think we have the momentum right now in European region. And as of now, we see that to continue. It is the launch phase. We already start with that, and everything will not go in a straight line here. But it's -- the momentum is there and we -- the new products are well accepted.

So that is absolutely something that we are determined to continue to expand here in Europe as of now, but then it's also when you expand the time horizon on a global level and utilize the great product offering here.

And it's also market of the market where we're launching the product on.

Yes, yes.

The next question comes from Gustafsson, Sten with ABG.

I was wondering if you could give us some quantitative comments or color on order development by region. That would be very helpful.

And then I have a follow-up question on the tariff impact or maybe a clarification. I think you said something like we should expect a similar level going forward. I assume you mean the 90 basis point impact.

But maybe we can start with the first one, if you could give us some more color on the order activity by region, that would be very helpful.

I'm sure that it would be helpful, but unfortunately, we don't disclose that. So I'm sorry for that.

Okay. I understand.

And Tobias, do you want to take the second one?

Yes, I cannot say. But to help you out a little bit, I think what we see is, I mean, also related to the products. We see a very strong order development here in the EMEA region that we see, and that is backed up from the new launch product. So that is very clear.

In terms of the tariffs here, when I was talking about that, it's approximately this level of margin impact. When you talk about the gross impact from the tariffs, then the coming quarters are a little bit bigger than Q1 as a quarter. So in absolute terms, you will have slightly more impact in absolute terms from the tariffs. But margin impact, it's about these levels that we see in the first quarter.

And would you say that this sales mix in Americas is a good representation of -- for Q1 of what you show on that slide with 21% of the sales coming from the U.S., and there's like 1/3 devices?

Yes. I mean, that is what we presented. And when you look at the Americas as total share of -- or as a share of the total Elekta sales, obviously, we want to grow. We want to grow in the U.S. and Americas, and the key here for us is to work through the FDA approval and work on that. And it's, I mean, it is the -- U.S. is the single largest market in the world. And of course, we are also targeting here to utilize the strength of Elekta to further expand in the U.S.

But I think that, I mean, looking again here and built on the strength that we have and the momentum that we have in EMEA, which we -- I'm determined also to utilize on a global level. But it's as Jonas said, it will be a country-by-country base here and as we roll it out.

Isn't there a risk that the tariffs or the impact on -- from tariffs will be higher going forward once the Evo is approved, and I assume there will be more Solution sales there?

Yes. You are right in that sense that if we have the stronger the growth in U.S. is and everything else equal, the more impact it will come from the tariffs as such. Then I would also say that, I mean, here, coming in with these new products will also mean different price levels. So the net-net of that will clearly be very positive.

The next question comes from Liljeberg, Kristofer with Carnegie.

Now it's DNB Carnegie. I have a few questions. First on orders, I understand you do want to give details of the order growth, but is it possible to say anything about this? The backlog you have in China, how much smaller it is than the previous levels and when you think you could be back at, yes, a more normal level?

And if I start, and then Tobias can continue. Thank you, by the way, Kristofer. And it's not nonexisting, I would say. We still have a backlog in China and so on. But it's quite much smaller than the backlog we have pre-pandemic as we kind of delivered okay on revenue during the anticorruption campaign and so on.

So we clearly need to fill it up. But as we have a book-to-bill ratio well above 1, we're quite confident that we are filling it up and that will be turned into revenue for the second half here.

And when it comes to orders in China, without mentioning any detailed figures, but are you seeing a sequential gradual improvement, so that Q4 was better than third quarter, now Q1 sequentially were better than Q4, if you adjust for seasonality, of course?

Yes. We don't explicitly talk about the orders per se, but on a structural terms and what we have seen, I mean, we had a quite severe drop here from the anticorruption campaign in terms of the order development. And then what we have seen now is that we are on a recovery path. And just as Jonas is saying that the book-to-bill well above 1, and that is a trajectory that we estimate to continue here.

And with that in mind, even though you are cautious on sales and earnings maybe in the second quarter, should we expect order growth to be back in positive territory now from the second quarter and then for the rest of the year?

I mean, we -- again, we don't explicitly talk about the orders per se on the regions. But to your point, yes, we do expect that we can continue on the path here to have a book-to-bill above 1, which actually then...

I mean, for the group.

Yes, again, we -- when looking at the order development here for the group, we will continue to do so. We have, though, a fairly strong order pipeline here last year, but we aim to continue here to have a decent book-to-bill than in terms of the exact order development. What we can state here for the full year, we aim here an order growth.

Could I ask another one?

Yes. A short one because we have a few more people actually asking questions. So a short one, Kristofer, please.

Okay. Yes, yes. So you mentioned about tariffs will -- this impact will remain for the rest of the year, more or less. Is it the same with FX as currencies is now if you look at the current spot rates?

No, no. The currencies is a bit different. So what you actually see is that these currency moves that we saw last years will then be in the comparable. So the negative currency impact that you saw here in the first quarter, that will gradually decline with the current levels that we have in terms of FX. So the FX headwind, if you call it as such, that will go down gradually for the coming quarters in this fiscal year.

The next question comes from Reinberg, Oliver with Kepler.

Are you still there, Oliver? Can you hear us?

Sorry. Can you hear me now?

We can hear you perfect.

Perfect. I just wanted to expand on the last question. I mean, can you provide us any kind of color what currency impact you expect for the full year? And as part of that, can you also give us any kind of flavor after the margin decline in Q1 and Q2, not looking potentially much better. Do you still see a chance for margin expansion for the group in the full year? That would be question number one.

And then secondly, just on R&D. I think gross R&D came down quite a bit. Can you provide some kind of color where do you see gross R&D as a percentage of sales for the full year?

And also I note obviously that capitalization came down now, I think, to 46%. Is this actually a new runway that we can assume? And if you can give us a kind of color on normalization for the full year, please?

I think, Tobias, it's a good start for you.

Yes. Sorry, the first question there, Oliver. What was that?

The currency impact full year.

Yes. The currency impact. No. So I mean, we -- okay. But to help you out here, you can basically see that, I mean, the levels that we -- with the current currency rates that we have, that will gradually go down to essentially a wash in the fourth quarter. And then you sort of say,it will gradually go down in the quarters to come. And that has to do actually with the currency levels.

What you should look at here is predominantly the U.S. dollar currency rate, the British pound and the Swedish krona. And what you see then in the comparables there is that basically in Q4 with the current levels is a wash. And then the currency impact here will gradually go down. So that can sort of say help you in terms of modeling the currency impact.

When you look at the gross R&D as such, yes, we expect that to go down, maybe not as much as you saw here in Q1, but it will be lower as a percentage of sales year-over-year. And sorry, was there more a question about the...

Margin expansion for the full year as well.

Yes. Margin expansion for the full year, yes. So we have not stated an explicit margin guidance for the full year. Although, I mean, for us, it's absolutely key to drive the profitable growth. And the midterm targets are still there. And therefore, it is important now.

We have been exposed here by some external headwinds. But for us, it's to manage these and continue here with the positive development on the price improvements, both from the new products with general price increases, we'll, of course, continue with productivity enhancements, et cetera. So that path lies firm in terms of the growth and the profitability development ahead.

Okay. So despite you're not guiding for, you still see a chance for margin expansion in the full year.

Yes. Again, we don't guide for that. But our ambition is crystal clear on what we want to do, and that is to drive profitable growth.

That's helpful. And on R&D, the capitalization came down now to 46%, which is quite an improvement from an earnings quality perspective. Is that something that we should take as a new run rate? And also can you just guide on amortization for the full year? Is it still around 800 to 850, please?

Yes. So in terms of the capitalization rate, it will be lower than last year, and it has to do with a majority of the projects that we develop here. So that is in terms of the amortization, it will increase, and you will see a gradual increase to some of those levels that you just mentioned. I would say that in the lower range of that, clearly.

The next question comes from Davies, Robert with Morgan Stanley.

First one I had was just around the rebound in China sales through the second half of the year and your conviction around that. Is that based on actual orders you've already got? Is that based on tendering activity, conversation with customers? Just trying to get a sort of sense of the conviction level and your kind of confidence heading into H2.

And then the second was just on sort of pricing and the backlog. I know you'd obviously canceled some orders as part of the Capital Markets Day update. Can you just give us a sort of sense of where pricing is sitting now versus that sort of precancellation phase?

So rebound in China, and it's both, Robert, where we have a backlog that we are delivering on, but we also take new orders, and we see quite positively on that for the second half.

And then the next question was around pricing, yes, which quite helped us quite a bit. So we have a positive pricing effect. But then it takes a bit of time to implement it and to get the price levels up. And what we see has the biggest effect is the launch of our new products as well. So -- but we're getting there, and that really helped to get the prices in the order backlog up to a different level.

And also adding to that, I mean, here, what we have stated and what you have heard is that we have seen the price improvements on orders for quite some time. Then we have the backlog, and it takes some time to work it through in terms of that to be translated into the revenues.

But just as Jonas stated here, we continue with improved price levels, and that comes both, I mean, from what we say then booking installs throughout the year, but also gradually improving the price points in the backlog.

Next question comes from Germunder, Ludwig with Handelsbanken.

Ludwig Germunder from Handelsbanken. I have two. The first one would be on your outlook as well. So talking about China sales and your outlook that you expect a recovery in the second half of the year. Can you tell us something about how confident are you in the statement? And could you tell us anything about the magnitude of recovery you expect?

And my second one would be on the cash flow. You have a noncash item adjustment in the cash flow, which is under negative SEK 142 million for this quarter. Can you tell us anything about what makes up this post?

Jonas, if you start.

Yes. So yes, we expect sales in China to grow second half. And we have a quite solid order development in China with a positive book-to-bill. We expect that to continue, and we will convert the backlog plus new orders in the second half. And also one note there that may be good to remember is that we had weak sales development end of last year in China. So quite good comparison there.

And then your second question there in terms of the noncash item that it's predominantly FX and revaluation of FX, what you see in that specific item.

And if I can I just follow-up on the outlook question about the U.S.? You mentioned the U.S. development of Q2, but you had no comments about the -- your expectation for the second half. Could we interpret this as that you don't expect an FDA approval for Evo anytime soon?

Sorry. I didn't hear.

FDA approval in U.S. in the second half.

In the second half, the -- no, you shouldn't interpret that. As I mentioned, it's been resubmitted. We're working it through, and we will definitely let you know. And in particular, we will let our customers know when we have it approved. It's very difficult for us to predict the time line on it, but it hopefully will be earlier than the second half.

The next question comes from Ouaddour, Julien with Bank of America.

Sorry to be annoying with China, but let me try again. No other company is basically betting on improvement in China or at least doesn't have embedded anything in their guidance. So why is it different from you? Is it, again, imaging versus, like, radiotherapy? Or is there anything else that we haven't understood today? So that's the first question.

Just on your recent comment about Evo that, yes, I mean, maybe you hope that you're going to get the clearance in H2. Is there anything included in your guidance? I mean, do you need the approval in H2 to meet the guide? So that's the second question.

And then just a third one very quickly. Just to clarify your comment about the 2Q being weak. Does it mean that margin won't expand year-over-year due to tariff and FX? Just wanted to make sure, given the consensus of a pretty big margin expansion in Q2.

Should I start with China? Yes, just to reiterate the message, it's -- yes, we have quite good insight in the market in China. And then I guess, it's better to be #1 in China as well, which kind of gives us, hopefully, a bit of better tailwind. So we expected to -- we see good order intake. We expect it to be turned into revenue, the second half. But still quite meager order backlog. So we need to build that continuously. But now we see that it's starting to fill up.

Yes. And then in terms of the margin question here and in terms of -- I mean, we -- again, we don't specifically provide earnings guidance for a single quarter. What we just can say is that, I mean, we've talked about the importance of gross margin expansion, and the work with that will continue.

In the first quarter here, we have had some headwinds. The -- but the work here with improving the price level, utilize the product offering, et cetera, that will continue. So that is what I can say in terms here in the near term.

That's it. You had -- you did have a third question as well, Julien.

Yes, yes. It was just if the Evo clearance is included in the guidance or not. Just wondering because you don't have a clear idea about the timing, but have you embedded anything in the guide?

When we do look into the full year, and I think it's worthwhile to state that, I mean, we talked about here Q4 last year, looked at the growth level, that was basically with a very weak U.S. market. We reiterate that we will grow this year organically, and that is the same as previously. And then it's embedded, I mean, both risk and opportunities in how we see that. And so it's a balanced view here on all regions that we have.

Then, of course, it's important here to work it through with the FDA approval in the U.S., but it's not -- I mean, Elekta is much broader than that. And obviously, here also with the launch coming, it's actually to work through here, both on, sort of say, technical point of view, but also in a commercial point of view.

So it's a balanced approach. Yes, we have a bit of that in the forecast, but we -- I would state it as much more comprehensive in how we view the growth outlook for the year.

Yes. Sorry. I agree with you, Tobias. Evo is not the only product we have in our product portfolio. There are numerous products in it. And of course, U.S. approval is important to us. But so is approvals on other markets as well where we have -- you look at the traction we have in Europe, of course, we want to have that as -- on as many markets as possible, and that is what we're working on now.

Okay. So you can deliver on the guidance even if you don't get the Evo approval in the U.S. this year.

Yes. I mean, Elekta's performance is much more than that. And we talked here the importance of the momentum in Europe. We talked about China, et cetera, and the growth in the second half. So it's broader. And we also do well in other parts of Asia and Middle East, et cetera. So that is a work that we will continue.

Last question comes from Dormois, Julien with Jefferies.

I have two. One is focused on India because you called out some weakness in the country during the quarter. So just if you could provide us with a rough estimate of how much India makes of APAC sales. Just a rough percentage of sales would be great. And also explain why the country went into some problems. Is that a market issue? Or is there anything else in there?

And my second question is on Q2, again, just making sure that I understood correctly. You are not committing to a positive organic sales growth in the second quarter, even though you will be facing very easy comps from last year.

I can take India for us. We see this as a very temporary weakness in an overall very, very positive market with that -- yes. So we don't see this as a big thing.

Yes. And then I would add here, I mean, we have gained some very important deals in India and build -- start to build a presence there, which will be important. And obviously, when you look at the sort of, say, growth potential, we talk about this number of linacs per million inhabitants, and you have a number of 12 approximately in the U.S. I think we are below 1 in India.

So obviously, when you expand the horizon and see the growth opportunity in India, it's absolutely where we expect the demand to grow here. It's still not -- I mean, given its size, it kind of is still not that big in terms of the group sales. But it -- we expect it to grow here over the years to come here.

And we see a lot of variation in India between the quarters. And then, of course, it's a huge market. It's very interesting for us to launch our new products in that market as well.

And I guess, your second question, Julien, was about organic growth for the group in the second quarter, right?

That's right, yes.

Yes. I think we had that question, Julien. Again, we don't provide specific guidance, but what we have talked about here is that we see China here, pressure in China in the second quarter. And also that we are awaiting the FDA approval in the U.S. So I don't think that you should expect an organic growth in the second quarter.

Thanks, Julien, for that last question. But before closing this Q1 call, maybe a closing remark from your side, Jonas.

Yes. Thank you, Peter. So I would like to take the opportunity to end this call by welcoming Jakob Just-Bomholt as our new CEO. Jakob is a highly experienced international executive with a successful career and CEO positions in various global industries, including the MedTech sector. And Jakob will assume this new role as a CEO on September 1, i.e., Monday.

And also on a personal note from me to you, thank you very much for listening, attending, and really appreciate that.

Thank you. Thank you all on -- thank you all for participating in this call.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.

Hi, everyone, and welcome to the Elekta Investor Update 2025, both in the audience here in Stockholm and you online. And I did it because once I start -- when -- I worked at Ericsson before, and I moved from my previous job at Electrolux. And I moved to Ericsson, and I opened the Capital Market Day at Ericsson. That was about 15 years old -- 15 years ago. And I said, welcome to the Electrolux Capital Market Day. But I didn't do it wrong this time. So I had it.

So welcome to Elekta's Capital Market Day. It's great to see all of you here. So my name is Peter Nyquist. And I've been heading up Investor Relations here for -- since March last year. Before that, obviously worked for Ericsson and, before that, Electrolux and a number of other Swedish blue-chip companies.

And there are, which I think is interesting, a lot of interesting resemblance when you look at a company like Ericsson and Elekta. It is really tech to start with, but it's driven by 2 things. If you look at valuation, it's driven by R&D. It's driven by recurring software revenues. And as you're going to hear today, these are topics and items that will be brought forward to you throughout the day in different presentations.

So a little bit, we were supposed to have a full-loaded CMD here. But clearly, with the changes in management, we decided instead to have an investor update. And the purpose today is not really to present new financial targets or update a strategy. It's more to go through events that we have taking place in Elekta right now. It's a lot of things that is happening, and you will hear that as well today.

So we will have a main session that is both in person here at Medicinska Föreningen, Stockholm, and the sun is shining for you online. And there is also people online. So that's the main session. After the main session, we will move over to our head office, Forskaren, for 3 deep dives, which I know some of you here will follow us to do. And I will give you more details about that later on.

But I would like to start with some reflections, some feedback that I have received. And I think Martin together with my team and Jonas and Tobias, when we have met investors not just only recently, but at the last months here. I think there are a couple of things that always comes back. And one is really that the gross margin we presented here in Q4 that is improving is not sustainable. I think you will see today, not at least in Tobias' presentation, a clear bridge how we actually return to prepandemic level plus 40% in gross margin through volume growth, through price increases, mix improvements and productivity. So that's going to be important in today's presentations.

Another thing that comes back, which I understand, is really the launch of Evo, in particular U.S. that the delay we have now with FDA will jeopardize the whole strategy in U.S. for Elekta. But I think what you will see here today, we have control over that process. Jonas will talk about it shortly. But also it's not only Evo in U.S. It's not only linacs in the U.S. We have a very profitable and growing business through our Brachy, Neuro and software business, and we'll come back to that as well during the day.

But -- and also remember, which I think is important, we had the best Q4 gross margin ever in the history of Elekta without having a U.S. business performing. I think that's important. And even more important maybe, wherever Evo has been launched, in particular in Europe, it is a success. So remember that.

Another thing that comes back in discussions we do have is the future of the software business. It's not going to be sustainable. You're not going to see that growing. But I think you're going to -- today, both here and the deep dives that we're going to have later on, you're going to understand the traction we have with Elekta ONE right now.

And also coming back again, which is very important, is really that we had 20% growth revenue software last year. A lot of that happened in Q4. So I think that also provides you with a good development this year.

Another thing, I think it's been highlighted today, it's the order review that we have done. We have a lot of discussions with investors. They have questioned the quality of the order book. And we present today a review of the order book. And the purpose with that is to cancel nonaccretive orders to increase the profitability of Elekta but also increase the forecastability so we know what's going to happen going forward.

So I think that's important, and we're going to have a lot of things about -- Tobias is talking about that. Habib will talk about that, how we've done that and how it looks like.

So coming back to -- I think I need a pointer, Tobias. So if you don't want to -- here. Coming back to today's event. So we will start then with introduction from me. Jonas will enter the stage after me here. And then Tobias, he's going to be the third speaker. Then we have a short break, a coffee break, for about 15 minutes.

We will then continue with the commercial execution, where order books will one of the topics, but also the strategy in U.S. with Habib Nehme, who's going to talk as our Chief Commercial Officer about the strategy. We're going to have Ardie Ermers from Seattle. So he's not going to be here, so we're going to connect him, and he will talk about Americas. And then we'll move to personalization and productivity, to the product side, and where we have Christopher Busch talking about software solutions for -- or Linac and Software solutions. And then we have John Lapré, who is the President of Brachy in Europe. Then we'll have Q&A. And then we have a few closing remarks by Jonas as we end this.

And just before I hand over to you, Jonas, we'll start the second part of this session at 16:20, back again, as I said, at Forskaren. We will have 3 deep dives, one about software, with Anish Patankar, who is the Head of Software. We will have one called Clinical Development of Elekta Unity with John Christodouleas, who is here in the audience, I think, as well. And then we will have the possibility to visit our Gamma Knife that we have in the building, which will be led by Head of Neuro, Caroline Leksell Cooke. And then we will end the day with mingle and dinner.

So that's it for today from my side and introductions. With that, I would like to hand over the word to Jonas. And I guess you need this.

Yes, please. Thank you, Peter. So warmly welcome, everyone, and warmly welcome, the participants online as well. And I would then, as CEO, like to kick off this meeting.

So we are here at Medicinska Föreningen, and we will soon transition to our relatively new office. We've been in this office for 1.5 years, and I'm really looking forward to show you the office for the ones that haven't been there. So I hope that you will be able to join us.

Then a bit of news from yesterday. So the Board has conducted their search process and finalized that yesterday evening. And I guess you have all seen the announcement. It's been my privilege to be part of that process, and I'm super pleased that Jakob is able to join us. I think he is a great fit for Elekta. First of all, his track record, really driving a profitable business. But also from a culture perspective, it's a very, very good fit for the company. I'm feeling super comfortable with having him in the leader seat there.

Then a few words of the team presenting here. First, myself, I have met some of you, but not all of you. I've been with the company for 20 years and have been in different roles in the company. I've been -- I'm a trained lawyer from the start. And then I've been heading a large number of corporate functions in my latest role. I know Elekta. I know the products inside out. I know maybe at least half of the employees in person. I know many of the customers. I know the challenges that we have had over the years, and I also know our strength.

Then we will have Tobias during the financial update. And I think most of you have met Tobias. And then as we said before, we will focus a bit on commercial execution with Habib and Ardie presenting. And then we will focus more on the product side with John and Christopher presenting. And Christopher, take a few minutes with him. He has been -- he's relatively new in his role, but not new at Elekta. I'm super pleased to work with Christopher. It's going very, very well, with great focus on deliverables and the product road map.

So first of all, going a bit back in the history. And this is basically a reiteration of the earnings call. So we are very, very proud of this and very pleased with this. I think someone said that no one really expected that for the fourth quarter, of you. We have a very strong gross margin. That is -- I'm particularly proud of that. I think it's -- as Peter said, it's the strongest gross margin since 2017. And there, you see that the programs that we implemented, the price increases, the product mix and the new products and so on are really starting to bite. So we see a great improvement there.

And then, of course, the launch of Elekta Evo and Elekta ONE, we see a large momentum of those products, in particular, in Europe, where it's being launched in all European countries. And now we launched it in market after market after market. Then Tobias will come back a bit and talk about the impairment and so on that we took as part of -- at the other side of my job, so to say, the cleaning part of the job.

This is a slide that we also showed on the earnings call. The objective of this slide is to put tariff exposure a bit into perspective. China, we have a very, very local business in China. We manufacture all our products in China. The linacs, we have software development in China. We have Brachy and Neuro products in China. The exposure is very limited. We export some parts from China to the U.S. and to Europe, but very, very limited.

And then if you look at the exposure in the U.S., you kind of could split the business there in the U.S. in 3 parts. One part is service, very local, local labor and so on, dependent on spare parts that are imported, but anyway for quite nominal value considering a service contract and so on. Then you have a software business in the U.S., which is completely local in the U.S. And then finally, you have the devices in the -- that are imported into the U.S., predominantly then from the U.K. where you have a set tariff of 10%. And also good for you to know is that the tariff is applied on the transfer price of the product. So that is -- limits our exposure quite significantly.

Then we have Gamma Knife from Sweden. However, the cobalt comes from Canada that is exempt from tariffs. You have the Brachy afterloaders coming out of Veenendaal in Holland. So that is a bit to give you some more information on how we look at tariffs and so on. Of course, this is something that we work with on a daily basis because as you have seen, it's a kind of moving target.

The outlook, you saw that on the earnings call. It's unchanged for the year. You see that Q1, it's not a huge quarter for Elekta. The volumes are not as significant as in the fourth quarter. And we have some on cost in the first quarter and also some FX effects, meaning that you can't just extrapolate -- I think most of you knew that anyway. You can't just extrapolate Q4 on Q1.

Full year, we're kind of bullish for the full year. We believe that we have our business under control. We will handle these conditions, and we put great trust in our price increases and the new product launches.

And then you have the midterm guidance, with 14% EBIT and prepandemic levels. Prepandemic levels could or should mean over 40% with respect to gross margin.

This is one slide that I would like to spend some time. It's actually my favorite slide in the pack here. So what are we trying to say here? We say that we operate in a financially very, very sound environment. This is kind of -- it's a very attractive industry. If you look at this, we are working in a growing market. Many persons today, they don't get cancer only once in life. They may get it twice or 3 times. Scanning is getting better and so on. So the underlying market is constantly growing.

We are working in a very, very consolidated market. On the linacs side, it's basically a duopoly. It's we and Siemens Healthineers. And on the Brachy and Neuro side, we are clear market leaders in those segments as well. If you look at Brachy, very consolidated. Gamma Knife, yes, we're basically alone, even though there are some new entrants and so on coming into that market.

It's not that easy to start a company in this market. The barriers to entrance are enormously high. First of all, it's quite complicated products that we work with, with high safety requirements. And also the regulatory hurdles to get into the market is enormously high, with large demands on the quality system, with large demands on regulatory filings and so on.

Then if you look at the business as such, it's a bit of an asset-light business. That's a bit of a mind shift as well. We look at our installed base. We look at our service, our software and our capability to upsell to the pretty large installed base. I will show you a slide on that later. And finally, going to the installed base here with, as I mentioned, pretty large possibilities to upsell to it.

And then -- so what have we done then? And we haven't been sitting still. We -- as you have heard, we have reviewed our balance sheet and looked at our capitalized R&D. Tobias will tell you a bit more about that. You also saw it today that we have reviewed our order book quite significantly.

And what is the purpose of that going through every order that we have there and so on? It's to make sure that the orders are profitable. That's why we review the orders. We have a quite long time between order intake and revenue. We need to make sure that the orders we have in our backlog are profitable. Hence, the order review. And then we haven't been able to cancel out everything. So there maybe still some orders because it's binding and so on. But the orders we've been able to attack, we have attacked them.

And then, of course, leverage on our R&D investment, which I sell a bit -- I said a bit before, to leverage on our upgrades, our software, our services. And also what is good for you to know is that we see a bit of a shift in the company. Christopher will come to that. It's less big iron today. It's way much more incremental development, smaller upgrade orders, smaller capabilities, smaller SaaS offerings and so on to upsell to the installed base.

And then, of course, profit and growth. Evo and Iris, product mix improvement, completely established a new price segment for the products, enormously efficient to launch new products with new functionality in the market. And then, of course, to leverage our strong -- we are really strong in Neuro and Brachy and to leverage that market leader position. And it's high-margin segments as well.

Then, of course, we have constantly worked with price increases. There is more to do, and we are constantly monitoring it. We're working to increase prices. We implemented -- implementing price controls and so on. And it's a bit culture shift in the company as well. Today, we take profitable orders. We don't take unprofitable orders. Growing the market is not everything for us.

And then as Peter said then, we have changed our submission strategy in the U.S. Together with the FDA, we have discussed it through and then have come to a conclusion to change the strategy because it will go faster with the new strategy rather than the old one. So we have done that now. And we, knock on wood, hope to get approval, yes, some time after the FDA has reviewed our submission there.

Also, a bit like Peter said, we delivered very, very strong quarter, but we don't have Evo approved in the U.S. It's a bit icing on the cake, as I see it. Then hopefully, we can get the same traction that we have in Europe with Evo launched in the U.S.

So this is the strategy that we've been living with for quite a while. We end that strategy now and going into more an interim year. It wouldn't be fair to launch a new strategy when we have a new CEO joining the company and so on. So now we have an interim strategy. But first, I would like to close off the 2025 strategy a bit and tell you a bit of what we have gained out of that strategy.

So first of all, we have spent a lot of time and a lot of money to develop our products. And now we have a really solid foundation. We are adaptive across all our product segment, leading to quite much more efficient treatment, less off time and, of course, a huge patient benefit as well that doesn't have to go back and forth through the clinic and so on. So very much directed towards efficiency, shortening treatment's time and so on. You will see a bit of that when we go back to Forskaren. And then also, I would like to iterate again, smaller incremental development projects with the capability to upsell to the installed base.

This is also a good slide. So here, you see, it kind of separates us a bit from competition and so on. Here, you see a cancer clinic as we would prefer to see a cancer clinic. Not every clinic looks like it, but some does. And here, you see that we cover the entire spectrum in the cancer clinic. And you have it from the cloud solutions that we provide, the Brachy therapy solutions that we provide. You have the patient handling, the oncology informatics system and then, of course, the treatment modalities with Elekta Esprit, our Gamma Knife, our new product Elekta Evo, Harmony, which is more throughput product and so on and then, of course, the gold standard for adaptive, Elekta Unity.

This is another key takeaway from our ACCESS 2025 strategy. It provided us with a huge installed base, that same installed base now where we have possibilities to use that to upsell and upgrade.

Then to focus a bit on what we call the interim strategy. This is what we will work with during my tenure and during this year. So really, really strong focus on profitability and the transaction. We just get rid of everything else with strong focus from the company, and we control what we can control. We -- as I mentioned, we increased our focus on profitability, profitable markets. And then, of course, driving price increases, which is necessary in this landscape that we have around us today. And that will then get us to the prepandemic level and an EBIT margin of 14%. Thank you.

Hello, everyone. A big warm welcome here to Stockholm again. I'm third presenter saying that. My name is Tobias Hägglöv. I've been running as the CFO in Elekta here for the last 3.5 years. I have, throughout my career, spent my time in various leading roles within finance. And all of my recent roles, both as CFO as well as group controller for sizable companies, we have been able to deliver a margin expansion. And I'm absolutely convinced that we can do that here in Elekta as well.

You heard here from Jonas and Peter, we're coming out really strong from Q4. We delivered the highest gross margin for being in Q4 for the last 5 years. And maybe more important, which I think you alluded a bit to, Jonas, was that it was not a coincidence. It was based on our strategy. It was based on what we want to do. And today, I will share some more light on this and how we think moving ahead to drive the margin forward.

I will then cover here in 3 blocks. I will start here what I just mentioned, talk about how to improve the profitability and the emphasis and importance of a gross margin expansion. Then I will talk about R&D and the balance sheet. And I will end up here with some findings about capital allocations and how we think upon that.

So starting here with how to improve profitability. Firstly, I would like to echo here what Jonas said. This is a good industry to operate in. It's a growing industry. It's a consolidated industry with a few players. We also see here that just as Jonas mentioned, that the barriers to entry are high: regulatory aspects, safety aspects, technological aspects. And also when -- from a commercial point of view, that you as a customer, if you have chosen an Elekta solution, you actually tend to choose an Elekta solution again.

With that said, our gross margin development here over the years have not been favorable. We have seen a deterioration here over the year. And even though you might say that from somewhere '21, '22, it has been relatively stable, it's still not good enough. And clearly, when we look at ourselves, we see we need to improve from here, and that, we will do. And I think from the presentations today, you will also find why Elekta is better equipped to do this than what we have been over the last years.

One important aspect is here that -- and we will talk about R&D, but there has been a need for product development, for shaping up our competitive edge, both in terms of market position, but also being able to get the value here in terms of higher prices from our customers.

The gross margin development here has also been a consequence of that Elekta has very successfully been able to broaden installed base and really capture the growth in emerging markets, a lot of greenfield where the price points have been lower.

It has also, as you see here on the slide, been that we were hit first by supply chain challenges, followed by high inflation, especially on niche components into our products, where we did not really fully compensate this by rolling it over to the customers in the form of price increases. However, looking where we are now and, again, coming back to Q4, we see this as a major step to bring back the financial development to a place where we should be.

And here today, I will now walk you through here the 4 basis blocks. I will talk about the volume growth. I will talk about the price increases that Jonas mentioned and that we really firmly here, both in our management team, but started also to change throughout the organizations are driving.

Mix improvement. Coming here from -- we talked about the product launches. I will also share some lights on how we think on the high-margin businesses. You will hear Christopher and later, Anish, share some light on the software. You will also hear from John Lapré here talking about the Neuro and Brachy products. But essentially, we have a very strong competitive position, and we can use this both to drive revenues as such but maybe more important to raise the profitability.

And then the final aspect here is productivity that we need to have in our DNA to run here, finding that extra productivity. And focus here will change a little bit over the next coming years, and I will come back on this one, but it's also to get more leverage on the gross margin expansion.

So starting here with volume contribution and volume growth. We have a very comprehensive product portfolio, and it's further strengthened here by the new products that we just launched here to the market. We are at the beginning of a launch phase. We see a strong traction in Europe. We will work through here the FDA clearance in the U.S., and we see markets such as China, which are recovering, and the launch that we are on that will expand here on a global base.

Jonas, you were also alluding here to just the installed base and the opportunities that we see here. We have, excluding our Brachy products, more than 5,500 solutions out there that we can upsell, cross-sell and utilize to drive software growth and to drive more service revenue. And if we would include the Brachy business here, it will actually add up to 7,500, which you will cover here later, Habib.

And this is a great opportunity, both to drive the revenues and also with the focus here, not just grow. And I think here, today's announcement, and I'll come back on that in how we manage the backlog. It's the same theme. It's to drive a profitable growth ahead of us.

We do have a strong backlog. We actually currently have a backlog here of approximately SEK 37 billion. And many of you saw the announcement here today. But I would really state that this is to enforce profitable growth moving ahead. So what we have done is to address nonaccretive orders, orders with lower profitability than average. Some of them has also been loss-making.

This, we have addressed, and this is a fundamental. If we're going to drive the profitable growth and really mean what we say, then we also need to proactively work with the backlog and create a more healthy backlog. We do have macroeconomic uncertainties, and certain things have changed here over the years. And I received here, have you received a lot of strong customer reactions, and we have not done that. But it's essential for us, and it's healthy to look at what value will we deliver to our shareholders in terms of higher profits.

What you also see here is that this is nominated in the Swedish krona. So part of this is just the mathematical exercises that the value of backlog nominated in U.S. dollar, euro and pound is actually less worth in Swedish krona, but that's just the currency development.

In the year, we delivered a book-to-bill ratio of 1.09. We came out from a Q4, and there were some questions about the orders. But again, I think that the Q4, we could recognize a book-to-bill of 1.12, clearly above 1, to fund future revenues. And what we also see in this number is the momentum for our products, the recovery in China, and it's actually also including a weak U.S. development currently. Elekta is not only U.S., but of course, with the FDA clearance in the U.S., that will create an even better platform for future development.

Pricing, and Jonas was alluding to this. Our price increases on orders, they will continue. This is a tedious work. This is a work that you never can let go. I've rarely been in a company where it's actually applauded by a sales organization to raise prices. And for us, it has also been a bit of a cultural shift here.

But what we have done and what we will continue to do is that an increased focus on profitability. We have built up, under your lead, Habib, a pricing office and a structure here for industrialize a more effective method to go with price increases. And the price increases currently are clearly higher on orders than the revenues, supporting again the margin profile in the backlog, and that work will continue. We have also changed the sales incentives here, moving a bit from volumes to more on profitability, including then price levels.

When we talk about mix, we will run this in 2 aspects. First of all, looking at the product dimension. In our plan on how we will drive the business is really to enforce a larger share of high-margin products. Throughout the year, which I also will come back to, you heard Jonas here, we can recognize clearly a higher growth for software of 7% compared to the 1% as a group in total on revenues. On orders, we could actually recognize a growth more than 20%, and that work will continue here into the years to come.

Service, again, the installed base, opportunities to upsell and use our service offering very intelligently to provide more value to the customers. And by doing so, we can also then enhance the value and also the financial value and also margin expansion.

When we look at the market mix and geographical point of view, it is, of course, the FDA clearance in the U.S., but it's also to continue to build on the momentum here that we are on in Europe. I will share later on that 60% of the orders in the second half in Europe of linac orders were actually related to Elekta Evo, another aspect to combine the geographical point of view with the product point of view.

And then finally, here, China, as most of you know, a little bit less than 2 years ago, they started an anticorruption campaign in China. It led to a huge order drop within the public segment of China, which stands for 70% to 80% of the market. That also led to pressure on the revenue. What we see now in China is a recovery of the Chinese market. And we have actually passed now, so the orders are higher than the revenues. And we are running now in China with a book-to-bill above 1. And that is also something that we will utilize now moving ahead.

If you then look into software a little bit more in detail. On the left-hand side, you see that the software development over the last years have been quite stable, except for the last year where you actually can see that the share of revenue coming from software has increased. More than 20% of our business are actually related to software. And more than 2,500 clinics worldwide are using Elekta solutions. When you look at the split, 2/3 are coming from oncology information and 1/3 from treatment planning.

So looking a little bit more here in terms of contribution from a financial point of view. I talked about that it's -- we could see an order growth above 20% in the last fiscal year in terms of orders that will be reflected in higher revenues moving ahead. More than 25% of the OIS orders actually relates to SaaS, software as service. And this is quite interesting because on average, you get 80% more value by a range and a solution like this compared to a point of sale. It will also create a smoother trajectory of the revenue stream. And that will, of course, enable a better resource allocation and also higher predictability.

Productivity then. This is something that we will constantly drive and constantly crunch out from our operations. But the focus here will change a bit. You have seen over the last years here that we have successfully implemented 2 cost reduction initiatives, a larger one during '22, '23 and a fairly sizable one also in the last fiscal year. It has been across the P&L, so we have taken out costs both within COGS, within R&D and also within SG&A. But moving ahead, and I think here we do have a great opportunity to leverage more on the COGS aspects and then, again, support the gross margin development.

When you think about the COGS of Elekta, some areas are quite similar to a standard industrialized -- industry company, but some of them are also a little bit different. So when you look at the procurement, this is something that many companies do, and we will do that as well, optimize the supply chain, work here with smarter -- with procurement deals and getting leverage from that.

But it will also be to work through here, what says here, a simplified and accelerated order to cash project. So really, how do we most effectively complete our projects, running with an order fulfillment, as we say, process and really from the order point of view until we have collected cash. A big focus on that now in Elekta to make it more effective.

We also, when it comes to service, which is another area here is that here, we see opportunity by investing in digital solution to provide more remote service and, by that, reduce the working hours, travel time, which then also we save cost.

Then when it comes to the R&D aspects and you will hear, I really line here with Jonas and the great start of Christopher, how we will continue to work with the -- automate and streamline our R&D efforts here to drive COGS development as well. And of course, designing also products here for faster and easier deployment and upgradability, coming back here to the upselling to the installed base.

So these 4 blocks, it will be about volume growth, it will be about prices, it will be about how we enforce and drive the product mix, both purely on a product point of view but also geographical point of view, and then lastly, supported by enhanced productivity. That is how we will drive the gross margin and raise the gross margin ahead.

And I received the question, okay, what do you mean with prepandemic levels? Yes, what we mean is we should establish ourselves north of 40% gross margin that we will deliver upon.

So then shifting gears a little bit, moving on to the R&D. Jonas was mentioning this. We did, in the Q4 results, an impairment in the size of SEK 1.1 billion following the IFRS standards. It's also a calibration of the product development road map. It is predominantly done within software. And we have changed here from an internally developed cloudware to using external supplier.

But again, and also connecting here to the Q4, R&D is essential for Elekta, and we will benefit hugely from the investments that we do. And there is a clear reason why we will continue to invest in our products because it will lead to a competitive edge and a clear opportunity to also mix up both the value from the customers and the patients but also for us in terms of higher profits and profitability.

The impairment also leads to a reduction of the increase of amortization. As we have communicated, we see higher amortization as planned. Here, the impairment will reduce that increase of SEK 100 million.

And when you then look at the different components on the R&D, we will see that the capitalization rate will go down gradually as the R&D projects that we're on will gradually move into more mature phases, where the share of the purely operating expenses defined then as pure cost on the P&L, that will increase, and the rate of capitalization will gradually go down.

So all in all, this will lead then to -- when you look at the cash R&D, namely the gross R&D and the net R&D, which is really what you see here in the P&L in terms of the gross R&D and you remove the capitalization and amortization, those 2 will converge. This will also lead, in the future, to better cash conversion and a higher cash flow performance, everything else equal with the same margins. And it is in line also which we want to do and how we plan the R&D projects.

Then some wording on capital allocation. Three areas: organic growth, selective acquisitions, and also here, we have strategic partnerships and joint ventures and then finally, direct return in the form of dividends.

So starting here then organically. And if you look at actually how we use our capital, I mean, a big chunk of that is going into the R&D. And I think you can see here the contribution in Q4 in terms of gross margin contribution. What you will see is that in terms of share of sales, this will gradually go down towards a level of 10%, but still, it's quite sizable investment. And again, it's a strict connection to drive profitable growth and margin expansion.

When you then look into the M&A agenda and the strategic partnerships and joint venture, we will leverage what we have done. Starting here with recent strategic partnerships, I mean you have seen the announcement here with Philips, with GE, et cetera. More recently, we have started to work here with the Sinopharm in China, which really provide us a much better exposure to the Chinese market, especially when it comes to these Tier 3, 4 hospitals and cities, which are a little bit more cumbersome to access just a supplier. So this provides us an even stronger edge in the Chinese market where we are by far #1.

We have also done some strategic acquisitions. We had Xoft in Brachy. We have also done some investments here in the software area. What you've also seen over the years is that we have acquired distributors. And the reasons for those have been twofolded. One is that to get a better control over the market and the customers by getting closer to the customers. But it has also been a very effective method to raise the profitability in that specific country.

We have also established new offices here in key countries here, Philippines, Indonesia, Romania. And moving ahead here, looking at the M&A agenda going forward, yes, we will do so, we will continuously monitoring it. And where we see opportunities, either to accelerate growth opportunities or to actually address specific items, either from a market point of view or a product point of view, we will do so. But it's more a complement to the organic strategy because we are strong with the product offering that we have.

The Board recommends an unchanged dividend of SEK 2.40 per share. And obviously, it's supported by a very strong Q4 cash flow. Moving ahead, and I think it goes with our results and also for the cash flow, we are proud on the Q4 performance, but far from satisfied. This is at the beginning. We are in the start of a launch phase. And that means we should continue to raise profits, raise profitability and, as a consequence of that as well, improve the cash flow generation here as well. And that will, of course, then be the fundament for driving a dividend growth as well.

So key takeaways here. I've talked about here, I'm absolutely convinced that we will deliver on the midterm targets. It is to deliver an operating margin north of 14%. And it is to bring back the gross margin to prepandemic levels, and what we mean with that is to establish ourselves of a gross margin above 40%.

The way there, the route, the path will be via improved volumes, and you saw the components, how that play out. It will be continuous efforts on price increases. We will utilize and enhance mix, both from a product point of view and a geographical point of view, with acceleration in mature markets. And of course, as a basis for this, also having the productivity supporting it.

We have taken actions to adjust the balance sheet, and you will see how the gross and net R&D will continue to convert. And finally here, we will improve our cash flow via higher earnings, and we will leverage our R&D investments, and that will be the support for future dividend growth.

So with those words, a pleasure to see you all, and thanks from me. Over to you, Peter.

Great. Thanks, Tobias. So it's time for coffee. But I missed out in the beginning here on some housekeeping issues. First of all, this, as you probably are aware of right now, is filmed. So you have to be aware of that. That's -- you need to tell the audience that. Secondly, I guess all of you have seen that, that there is a WiFi, KI Guest. No security code, so you can access that. That's it on the housekeeping side.

Then I would like to have you back and also you online, at 10 past 2 CET. So 14:10. We will start the next session at that point. Thank you.

[Break]

Welcome back from the coffee break, you here in Stockholm, and welcome back, all of you online. I heard there's around 160 people joining there as well live. So that's a good number.

And numbers, we've talked about. And now we continue with the next part, which is commercial execution and then personalization and productivity. So that's going to be the next part of our session here. The first part will start by our Chief Commercial Officer, Habib. And then Ardie, as I said before, will join from Seattle. And then we have Christopher Busch as well as John Lapré talking about personalization and productivity.

So with that, I leave the word to Habib.

Thank you, Peter.

The clicker's over there.

Yes. Warm welcome, everyone, for the fourth time, I think, and thank you for being present here, either in person or online. Maybe good morning, those online or good afternoon for you here.

So I'm Habib Nehme. I'm the Chief Commercial Officer of Elekta since 18 months. My mandate with my team in the regions and in central marketing and central service order fulfillment, commercial excellence is to design the -- and execute on the commercial strategy for Elekta and to deliver the profitable revenue, the profitable market share.

Before joining Elekta, I was 27 years in GE Healthcare, where I occupied position -- executive positions in Europe and in emerging markets. And I was as well the Chief Pricing Officer of GE Healthcare International in 2008 during, you remember, the financial crisis. So pricing is something that we know a little bit how to deliver on it.

So today, I'm very pleased to have been given this opportunity to talk with you and show you how the Elekta solutions are addressing customers and partners and clinician and as well as stakeholders and shareholders' needs. And my goal would be to work with you through the global markets of radiotherapy and explain how Elekta is delivering in these markets. And the second point, how our solutions, either on hardware or on software, combined with a strong installed base globally, are reinforcing our positions or expanding our positions in this market.

And commercial strategy without execution is useless. So I want to explain to you how our commercial execution rigor is transforming the commercial operation of Elekta to deliver sustainable, predictable growth for our shareholders and for our partners.

So first, Elekta global presence is its core strength. We have balanced and mixed geographical revenue coming from all around the world with growth drivers in each region. So when we talk about Americas as a continent, it constitutes -- it makes up 29% of Elekta revenue. U.S. stand as a high market and high value for us. And Ardie Ermers, who is in Seattle here, will explain to you Elekta commercial approach and solutions for this market.

EMEA makes up to 37% of Elekta revenue. And EMEA is Europe and Middle East and Africa. Europe is 80% of this number, and Elekta enjoys a very strong position there, and we'll talk more about the solutions and how we win in Europe there. Nevertheless, Middle East, Africa constitute 20%, and we see very strong momentum, and Elekta has a strong position in this area.

Now Asia Pacific, that includes Japan and India and China. It constitutes 35% of Elekta sales, where China, where Elekta has a leadership position, is 40% of this market and -- 40% of this revenue, and definitely, we'll talk 40% of market share as well. And India is a fast-growing market where Elekta is constantly investing in this market.

So overall, as we go forward, we want to keep our leadership position in China. And in mature market, we want to grow our profitable shares, U.S. and Europe, and scale our presence as we go in emerging markets.

So now we don't have one-size-fits-all strategy. We tailor our commercial approach in function of the market, in function of the competitive environment, in function of our presence in this market and in function as well of the growth perspective and reimbursement and other consideration of this market.

So for example, in India, in Southeast Asia, in South America, in part of emerging China as well where we have a strong market share, we grow in steps with the expansion of the market, and we differentiate ourselves with service. I mean, Tobias talked about service potential with a growing installed base, and we'll see more about that.

In another part of developed China and in Europe, we target existing installed base, existing customers with new product introduction, definitely with differentiated software and customer-centric service.

In U.S., and we'll see more about it, where we have a large portfolio position in Neuro, in Brachy and especially in software, we leverage this to deepen our clinical footprint in this market. In -- basically in the mature market in Europe and U.S., we want to grow profitably the existence of the installed base. And at the same time, we -- as we said, we scale our presence in emerging markets. So it's about precision. It's about matching our right strategy to the right market and maximizing the impact, maximizing the return and the value.

Now is this sustainable and why Elekta has the ingredients in its solutions to grow profitably here? Because we are backed by the world's most comprehensive portfolio in radiotherapy. We have the solution that fits either emerging markets or mature market. 63% of our revenues comes from mature market, 37% from emerging markets. And when we look at the 2 segments of brachytherapy and neuro radiosurgery, we have a leadership position here. These are 2 specialized segments, highly defensible segment there. What you heard about the entry barrier is high there. And we have leadership position there globally.

Now when we look at our portfolio in CT-Linac and MR-Linac, we have the most comprehensive portfolio, adaptive ready or adaptive available, either off-line or online. When we look at the CT-Linac, we have the imaging, Iris, which is the artificial intelligence imaging enhanced, that provides the most precise auto-contouring and speed for adaptive treatment when the patient is on the table and online adaptive.

Now all the investments that we did on software here is paying off. And when we look at the Elekta ONE in software environment, it's not only a growth engine for Elekta, but it's a productivity for our customers who are streamlining their workflow globally there in this aspect.

So actually, how do we win in Europe? Let's take some example. We combine the commercial momentum with the most clinically proven portfolio. So it's about commercial. It's about clinical value added to our customers. So we provide the most versatile, as I said, CT-Linac. We talked about the adaptive off-line or online. We have the imaging-enhanced capabilities for the auto-contouring there. And we have the Elekta ONE suite in software that you're going to hear more about and have a deep dive with Anish on it, which is allowing to streamline the workflow and enable more complex and more advanced workflow for the customers.

At the same time, when we talk about stereotactic radiosurgery or stereotactic radiotherapy, either on the body or in neuro, for example, I give the Esprit in neuro, which is a gold standard in SRS. When we talk about the brachytherapy, the Elekta Studio, the Elekta Studio delivers enabled capabilities of planning in brachytherapy. And all this in Europe is already available, is offered and making that we have a leadership position in Europe, this combination.

Now we go to another interesting market: China. China, the existence of Elekta there is back to 4 decades. We moved from being a supplier to a local investor. We are investing in the health care system of China. In 2006, we started manufacturing. Look at the vision of Elekta that's still there. We still started investing in manufacturing of CT-Linac in China, 2006. And actually, we manufacture, we scale it, to manufacture brachytherapy, neuro and as well software.

Beyond this, we built strategic joint venture there, as Tobias has talked about, in -- with Sinopharm, with AnSheng in software that allow us as well to compete in all segments, either public or private. Beyond this, we have a center of excellence for research and development, for innovation. We have a center of excellence of clinical education that provides the values, not only for China but as well globally.

So all these, I would say, actions, since many years, makes that the customers trust Elekta in China and is considering us as a local player with international and global quality standards. So we -- it allowed us to grow our installed base significantly. For example, on linac, the last 5 years, we grew our installed base despite all the crisis by 9%. And this allow us as well to have -- to keep, despite the competition, despite the drop in the market, a leadership position on the north of 40% of market share.

So this China is a very important market, one of the most, I would say, important market in the world, and Elekta wants to keep the leadership position there. And why we need to keep a leader position there? Because I mean, China has the fundamentals of growth, still. The density of linac per million of inhabitants is low. And the cancer plan announced to China 2030 plan favors the expansion of the linac and access to radiotherapy in China. So we want to play there. Moreover, there is an increased interest of the procedures of hypofractionations and as well adaptive radiotherapy. And it aligns with our strategy. So it's synchronized, it resonates, and it matches our strategy there.

So the same thing, our -- and why we will win, why we'll keep winning? Because we don't have accidental presence. We have a structural go-to-market there. We have local manufacturing. We have a center of excellence. We have a strategic partnership. And therefore, we are in a very good position to keep growing there and compete, either with local manufacturers or other manufacturers.

The other point as well, we are delivering what the customer wants. He wants products, he wants quality, and he want trust, somebody who's been here for a long time, and this is Elekta. So very confident about Elekta presence and strategy as we go forward there.

So now we go to the solutions side and to the installed base and to show you how our growth is powered by a dual-engine commercial strategy. The first one is getting a new installed base. The other one is harvesting or leveraging the existing installed base.

So how we get a new installed base? We get installed base by delivering adaptive-ready systems. I say around CT-Linac or MR-Linac, and we deliver them by steps. Depending on the clinical need of the customer, we can go ready adaptive to adaptive off-line, to adaptive online, CT-Linac, MR-Linac. And this as well to match with the budgets of the customers' buildup. And all we talk about is software and that we can sell there or with Evo. So this is part of our value proposition.

Now in the same time, we have an active installed base, an active installed base on which we can still sell upgrades, capabilities. And this is building high-value relation with our customer, is building as well loyalty. It's not about selling more. It's more about having more value for the customer that is translated into margin to Elekta as well. So we have this path of the installed base.

So truth be said that with our Elekta 2025 ACCESS strategy, we built a large installed base. And 70% of this installed base is under service contract. What does it mean? It means that we have unmatched visibility on this installed base. We know the installed base, the capability, the configuration. So this allow us to structure life cycle programs. So to move to Flexitron, for example, in Brachy, or to move to Esprit in Neuro or to move to Evo in the Linac. So this is unlocking high-margin revenue on the installed base.

We are applying the same thing. I mean the 7,500 includes the Brachy as well include the Neuro. It's not only the Linac and include the software. So out of it, you have 2,500 installed base of software in which we are transforming into software as a service and allowing us to have a predictable high-margin revenue. And for example, now we started upgrading the Monaco installed base, which is the treatment planning systems to Elekta ONE planning, allowing more depth in the clinical capabilities and, at the same time, more productivity and more speed. And recently, we launched the Elekta planning on the brachytherapy to enhance the capability of planning of the brachytherapy and will follow with the Neuro side.

So this is about the solutions and about the installed base coupled together to create this dual engine of growth. Now let's go to the commercial rigor and the execution side.

You know that we are in a business to a big extent, besides software, Brachy, is a backlog model business. So it's very important to have a very strong, predictable and high-margin order book. And this is what we did in order to get this strong order backlog. We took hard decision, but necessary decision to cancel nonaccretive order, all in the frame of the contractual agreement with our customers. And we find that actually, we have a SEK 37 billion of strong executable backlog, where 82% of this backlog, we have a plan to deliver in the coming 3 years.

So we worked around 3 main topics. One is how we can get the orders booked in a criteria that allow predictable transferability of the backlog. Second one, how we can get a good management of this backlog, either on the profitability side or the predictability side. And the third one, how we can continuously monitor this, I would say, engine of growth, and this is core business of the backlog. And what we did so on the first side, is the order quality. We make sure that we have -- when we book an order, we have all the criteria that give us visibility on the transferability of the backlog, and we keep our sales people engaged until this happens. So we allow all this collaboration in order to get transferable backlog.

And the second part is continuous monitoring of this core asset, which is a backlog. When a backlog becomes older than 3 years, we go back to the customers and renegotiate either prices or other conditions before taking any other decision. So actually, we found ourselves in a position where we have a strong executable backlog of SEK 37 billion divided between solutions and service.

And finally, before introducing Ardie from Seattle, I want to leave you with our simple commercial strategy, is retain our customers, increase their loyalty, grow our installed base, and the third one, boost our services on this installed base. First, we retain them by proposing continuous upgrade and continuous improvement of the life cycle of their installed base, which creates loyalty. Second one, grow with a new offer and go to new customers with the value proposition of adaptive and with a large portfolio. And the third one, we boost this installed base or revenue, we boost our revenue through services offer of software and other high-value upgrades.

Having said that, I thank you, and it's my pleasure to introduce Ardie Ermers, who is leading Americas from Seattle. To you, Ardie.

Thank you so much, Habib, and welcome, everybody. A warm welcome from Seattle. My name is Ardie Ermers. I'm the EVP for Americas based out of Atlanta. And before the SI, I was EVP in Europe, where we were able to turn around this trajectory into positive market share gains. And now you can see, obviously, the impact of those wins with some very good growth out of Region Europe. Before this, I was in the United States for 17 years, working for a company called Philips.

Is this better?

Just a minute. You can talk.

Yes. You turn it down, I turn it up. Is this better? Yes. Is the quality better? Can I proceed? Yes. Okay. Yes.

So yes, so to go back and introduce myself, Ardie Ermers, I'm the EVP for Americas based out of Atlanta where our headquarters is based. Before this, I was EVP in Europe, where we were able to change the trajectory of Elekta into positive market share gains. And now you see the results of that work and showing the positive trajectory in Region Europe. Before this, I was 17 years in the United States for a company called Philips. And today, I'm going to share a little bit about our strategy to be more successful in Region Americas, specifically in the U.S.A.

Next slide. So just like in Europe, we see that radiotherapy is evolving. Also in the U.S.A., we see that there's a heavy pressure based on the cancer burden, and our customers are looking at ways to deliver radiation in a more efficient way. The way to do that is to really focus on a term called hypofractionation, which is to reduce the amount of fractions and to be more accurate and more precise in delivering the dose.

This trend has been started many years ago, and Europe is leading the charge, where also the reimbursement system has adopted to these ways of delivery. We see the same needs in the U.S. market and customers are asking us on how to do this in a more efficient way. There's also staff challenges. So people want to make sure that they can deliver this dose in a very accurate manner, but also do this with the pressure on staffing.

The way to do this is to develop new product portfolio. And what you heard today from the speakers is that we are heavily focused on adaptive radiotherapy, because adaptive radiotherapy is going to enable us to do hypofractionation, it's going to give the tools in order to deliver this dose much more efficient and therefore, being able to treat this patient in a shorter manner.

Also, what's helping us here and setting us up for a good growth path is that the systems that are currently being used in the U.S.A., on average, have a lifespan of about 14 years. That means on the older systems, people are still being treated with 30 to 35 fractions. And you can imagine, if you have cancer and you have to go to the hospital 30 to 35x for a radiation treatment, that obviously is not very exciting. So the centers that are winning and that get the choice of the patient are the ones that are in improving their portfolio, improving their linac installed base with systems that can handle this hypofractionation. So for us, this is a great opportunity to come into the marketplace with new innovation that addresses this need. And we are working currently with the FDA closely to get this solution into the marketplace, and we are anticipating to have this very, very soon.

Next slide. Next slide. So while we are working with the FDA on getting this new adaptive therapy solution into the marketplace, we're not sitting still in Region Americas. And specifically in the U.S.A., we are enjoying a fantastic market leadership position with our Brachy portfolio. Flexitron is the market-leading product and Brachy is a high-profit business that is really showing growth in the marketplace. And we see that especially for certain applications, especially in cervical cancer and OB/GYN, the Flexitron is the gold standard. And the Brachy boost is the standard delivery of every center in the U.S.A. We show that we are growing this marketplace together with our collaborators and see that the future for Brachy has a very strong position.

We also launched a new platform called Esprit a couple of years ago. And now we're seeing the fruits of that labor with very, very strong growth in the Neuro segment, again, with very, very high business -- high margins. And most importantly, once we launched our new software suite called Elekta ONE Planning, we see a rapid adoption towards this new software solution. In this case, our therapy planning engine has reduced the therapy planning lead times about 80%, and so customers are really eager to adopt this Elekta ONE planning software to make sure that they can deliver this radiation in a much more efficient way.

So the pipeline for Elekta ONE Planning is rapidly increasing, and we see that the customers have a very strong interest and obviously, benefiting from these technologies. The combination with our partner, MIM, which is the gold standard in contouring, is really, really perceived very well. They have a very strong market share position in the U.S.A., and we're working very closely with them to delight our customers with these new software solutions.

One thing that customers also ask is to make sure that we don't focus only on our traditional Linac and MR-Linac business, but that we also incorporate the other 2 key businesses. And we have launched now Elekta ONE Planning for Brachy, which shows how we are integrating this into the software suite of the hospital, and the next step will be to do the same for Neuro. And as you can see on the right-hand side, this is really helping us with the profitability of the U.S.A. and the profitability for Elekta as a whole.

Next slide. Next slide. To show the evidence that this strategy is working, we are very proud to announce that we have now installed 30 Esprits across the U.S.A. The Gamma Knife is a very, very strong portfolio and a very strong offering for our SRS customers. You see that the reimbursement rates in combination with the clinical efficacy of Leksell Gamma Knife is really showing a big impact. And most of these centers are treating over 150 to 200 patients per year, enjoying very good financial stability, but also showcasing that if you want to do brain mets, the best way to do this is just with the Gamma Knife. And the uptake of Esprit shows that the future for the Neuro business is very, very strong.

On the right-hand side, you have been asking when are we starting to see impact of ViewRay getting out of the marketplace. And we have to admit that it took a little while for customers to realize that ViewRay is not really coming back. Now we're starting to talk with customers, and they're really looking for solutions to commit to an MR-Linac program, but to make sure that they have obviously the best MR-Linac in the industry, which is the Unity.

And the strongest example we have is that Moffitt Cancer Center in Tampa is this month deinstalling their ViewRay unit and starting to install the Unity, and they expect to be up and running by the end of the year. This is the first example of a customer that is switching their ViewRay system to Unity, and we have a very strong pipeline with other ViewRay customers to do the same.

To show the impact of Evo in Region Americas, we also see strong uptake in Latin America, and we are really proud to celebrate our second Evo in Argentina. You see a picture here of the pediatric hospital, Garrahan, who will be going live after the summer. And this is a strong testament that also in our developing market in Latin America, adaptive therapy is a key interest.

Our strength, on the left-hand side on the bottom, is our software offering. We have the best cloud solution in the industry and especially customers that are suffering from cyber attacks coming to us really for help to get them back up and running with a lot of good expertise, but also to then have the conversation about how to transfer to cloud. And the combination with SaaS orders, like Tobias said, is really helping us with the profitability and increasing, in this case, the margins for the region as a whole. The software business is very healthy, driven by the fact that we've invested heavily in a very strong cloud architecture in collaboration with our partner, Microsoft, and making sure that we expand the solutions in that software stack. So we see a very strong uptake of SaaS orders. Over 30% to 35% is now SaaS-based in the U.S.A., which is also giving a very stable revenue profile.

Next slide. Now how do we prepare for this launch? Because what we saw in Europe is that our key collaborators there are paving the way, and we're starting to see fantastic results coming out of Europe where they can do an adaptive treatment in under 15 minutes. This is an amazing speed and it's also necessary because you want to make sure that you don't have to schedule extra patients loss in order to provide this kind of treatment.

So what are we doing here in the U.S. is that we are working with some key collaborators to start paving the way for the future. And as you can see on this list, we have some very prominent names like Sunnybrook, UT Southwest, Medical College of Wisconsin, MD Anderson, Sloan Kettering, Princess Margaret and so on. And what these customers do with us is that they are basically providing the solution so that we can build the workflow that people will need to adopt in order to go to adaptive therapy.

These key opinion leaders share their knowledge. They share their wisdom about how to set up the centers, and we put this into a consortium approach. Just like you saw from our MR-Linac consortium, we have now included also the CT side of the business. And this is where we learn from each other. So if customers want to adopt to this new way of working, they tap into the knowledge of these key partners that we have developed. And so they can go up and running really, really fast.

We have implemented this solution in our link in our Atlanta Experience Center, where customers can come to see it, to get trained on it and to get ready for this change in radiotherapy. And it's driven by our strong software platform, like I said, Elekta ONE Planning, the combination of AI contouring and a very fast dose engine that is GPU-based, is enabling us to really get the speeds that I just described. So with the launch of adaptive Linac, we are really positioned well to take care of this growth opportunity with the average age of 14 years of Linacs. So this is going to really help us establish a leadership position on hypofractionation and adaptive therapy.

Next slide. Now one thing that has been hampering the U.S. market a lot is that also the reimbursement system is not the same as, for instance, in the Netherlands, where paper fraction is currently the standard in the U.S.A., meaning that you get paid for every fraction you deliver. So you can imagine that if you're in a community-based hospital and you get radiation for prostate, that they're not focused on doing this in 5 fractions. They want to make sure that they get financially paid. So they are going to deliver 30 to 35 fractions. And like I said earlier, the impact this has on the family, to go to the hospital 30 to 35x, is tremendous.

So we are working closely with some key thought leaders on how we can change this and driven by ASTRO, we are now launching a change in the reimbursement schemes for the U.S.A. This is called radiation oncology case rate or ROCR. And over the last 3 months, the support that we've seen across the U.S.A. for this new legislation that's going to help us with reimbursement based on a bundled payment system is growing rapidly. We are now over 122 institutions in the U.S. that support this legislation. It's bipartisan, supported by Democrats and Republicans. And we believe that with the CBO scoring, that's going to be done in the next 2 months, that we will have a very strong case to change the reimbursement cycle for the U.S.A. for radiation therapy.

Now you can imagine that if you get a bundled payment for radiation, you want to focus on hypofractionation. You want to focus on adaptive therapy. And this is going to drive replacement of those older machines.

As proved that we are the leaders in this space, on the right-hand side, you see the new picture of the Fort Worth campus of UT Southwest. UT Southwest is the leader in SBRT and the leader in adaptive therapy. And if selected exclusively Elekta for this new campus to equip this center with MR-Linac, with CT-Linac and also with brachytherapy to provide the best standard of care for adaptive in the future. So this gives us a very strong starting point to start working with administrators to do the business case about why it makes sense to upgrade their Linacs right now and go towards the new platforms that Elekta is launching. So we're really anticipating a fantastic summer coming ahead of us.

Next slide. So the key takeaways about our strategy in the Americas. We're going to keep focused on driving high-margin product performance, as you have seen, with market-leading products in Brachy and in Neuro. We are going to accelerate our software growth driven by Elekta ONE, which is the gold standard now for adaptive therapy planning, but also where we get incorporated the broad elective portfolio evident by also incorporating Brachy and later on Neuro. And we are the hypofractionation leader in the market. Globally, we are seen as the leaders of adaptive therapy, and we're going to drive this strategy into the U.S. where this reimbursement climate is going to help us change and we believe that we're going to be in a much stronger position heading in the future.

So thank you for your time. I hand it back over to Christopher, and I look forward to the Q&A session. Thank you so much.

Hello, everybody. Good day. My name is Christopher Busch. It's my first Elekta Investor Update Day. So I'm quite excited. I've been with Elekta since September 2023, and I joined as the Head of Research and Engineering for the Linac & Software Solutions business. So I'm pretty much involved in what's going -- coming out right now on the market.

Since May 1, this year, I have been appointed to lead the business of Linac & Software Solutions, so I'm in a rather new position. And this position, of course, has the responsibility to create and maintain and refresh the portfolio that our colleagues have talked so enthusiastically about so that we create that, and Habib and Ardie and others can bring it to the customers in the markets.

So I want to give you a little bit of an update about what is the portfolio strategy that we are currently doing. And why the topics of personalization and productivity are going to be key parameters that we work on right now. And we talk about portfolio strategy. I also want to focus on the short to midterm. I could, of course, talk enthusiastically about the vision about where do we want to go with ablative radiosurgery in the body, where we want to go with biologically-driven radiotherapy, where we want to go with combination therapy like theranostic. These are all great topics. What I really want to focus is what's out now, what will happen in the next 12 to 18 months. So I will be a little bit focused on certain aspects of our portfolio and the logic behind this and why we believe it's not only sustainable, but also scalable.

This graph, you will probably see in many publications about current state of health care in the future. And this one is specific for cancer care. But the truth is that the cancer burden that we are experiencing, both in emerging markets and in mature markets is increasing. As was mentioned before, cancer is becoming increasingly, in mature markets at least, a chronic disease that comes back, so you have to treat and retreat. And you have to think about what have you done 10 years ago, 5 years ago, to be able to make the treatment forward looking.

At the same time, also or the complexity of treatment options is becoming greater, which is good because it also improves the outcomes, but it makes the workload harder. At the same time, the growth of skilled professionals who can actually do the work is increasing at a much slower pace. And if you look at the time line, this is like a 10-year outlook and that you could probably extrapolate it beyond that, this is just getting more problematic and more of a challenge.

So what patients and clinicians need are better outcomes, and a better outcome can be that a patient is treated at all with a good treatment or that the patient retrieves into the recurring cancer of low toxicity second or third treatment in the course of 5 to 10 years. So that needs more personalization. What is the patient's outcome so far? What is the outlook? What is the best treatment for this specific person?

At the same time, to address the shortage in trained professionals, we also need solutions to give clinics how do they can use the resources they have with a higher efficiency. So getting more patients in the clinic with the same installed base and maybe in smaller increasing installed base of treatment machines, but also people who can utilize these treatment machines. And therefore, you need more productivity.

And these things, as I will show in the next few slides, can be quite antagonistic. You have to make a choice. You go for utmost personalization, highest treatment complexity, best treatment, but also very time consuming, or do you say we go and optimize for throughput, but then maybe the treatment quality goes down because it's just impossible to put this for all the patients into the normal time line. And we believe with an Elekta, that we have a good portfolio and an optimized portfolio to help clinicians and clinics manage this kind of tension between these 2 things.

If you look at the standard workflow of image-guided radiation therapy, which is more or less the standard right now, you see that you start with the simulation, so basically taking an image, high-quality image with a CT or with an MR, then you start -- after that, you do the contouring segmentation and then you do -- make a treatment plan and then you move over to the imaging and the treatment delivery at the device. And then you have, in this case, it's like 20 or 30 or 35x, the kind of loop that you have between treating, patient comes back the next day, comes back the next day. And always, you have to put, of course, what you have done into the oncology information system.

What you want to do as a clinician, you want to get a higher dose on the target on the tumor as much as possible while keeping the dose, the toxicity to the organs at risk as low as possible. So you need to know exactly what's happening and what you want to do ideally at the moment of treatment, at the day of the treatment, but not really what you did -- what you measured 3 weeks before the treatment even started. That will result in fewer fractions per treatment. So going from 35, maybe to 5, maybe to 10, depends on the organs, depends on this type of cancer and the profile of the patient.

But we also want to get this at the expense of very long treatment session. So we want to make sure that once you do this, you can still perform a treatment in 25, 20, 15 minutes, as was alluded to by Ardie. So we have more complex plans. We need to do more of them. At the same time, we have less time per plan. That is the dilemma.

So what is our proposal? Cancer therapy, we want to bring it from up there, the conventional ones, and you see these different boxes or the arrows indicate the planning phase, the delivery phase, the individual treatments, 5x, 1 week, then looking maybe at what is the review and the outcome, go back for another week, another week, and these are 3 weeks up there, but you continue up to 8 weeks.

So if you go into the classical hypofractionated treatment that is being applied today, mostly at academic institutions or leading hospitals, that they say, "Okay, we go down to maybe 5 fractions." But you see that the individual delivery becomes longer, becomes more complex. So yes, overall, this is a net efficiency gain, but for every treatment every day, the number of patients per day will go down. And even though in the end, of course, it's not so important for a clinic, how many patients you have per day, but how many patients can you treat per year, per linac, per clinician, it's still something you don't want to have the patients wait until they get their treatment. So it's still important to have a high number of patients per day.

So what we are looking at with Elekta, as you say, actually, when you really look at integration of software and devices in a very strict but also regulatory and safety, quality assured way, you can actually make the penalty of having these more complex plans and having these more complex evaluation segmentation, all these treatment steps that you need to do actually become so much that it more or less becomes like as small as efficient as a normal treatment would be.

But then you can still do hypofractionation. But for that, you need deep integration. This is not something, I'll come back to that, that you do with -- there's a software package, there's a software package, there's a software package. You can do a lot of personalization with this, but productivity will suffer. So that's the reason why we say we enable hypofractionation, but with limited to no part-time penalty during or between elective treatments and with quality assurance, a very important topic also for the regulatory bodies.

So coming back, we have this portfolio, treatment devices, essential and the software. And we believe, for optimization of hypofractionation and all these online adaptive things, you really need to bring them very close together to achieve both personalization and productivity. If you have only part of this, it's becoming much more difficult. Let's say, it's very, very, very ambitious to try then to still optimize both for personalization and for productivity.

We have talked -- Tobias has talked a lot about the investments we have done in R&D. And please, this is a very worthy slide. Don't look, don't try even to read all the bullet points. The point that we are making here that in the last -- if you look at the last 2 years of ESTRO and ASTRO, the main conferences that people go to, to see what's actually released, what's happening. That you see that we released not only devices, CT-Linac Evo, also software in devices, Unity with comprehensive motion management, but increasingly also many of these incremental updates and upgrades that either increase computational speed, GPU-based treatment planning or do personal workflows with things like Smart Flow.

And the message here is we are seeing these things now in the market. These are usually asset-light upgrades with asset lights. It means if somebody has a Linac there with an incremental investment there can be an order or 2 orders of magnitude smaller than a new Linac, they can get significant upgrade in the functionality.

It's similar what happened in the car industry, maybe 10, 15 years ago. When you bought a car there, after 5 years of driving it, it was more or less the same car. Here, we say, once you buy the car, you will get the ability every year to get the car improved, higher safety, more autonomy, all kinds of things. So this is both a statement of we have a lot that we have delivered already, but also you see a kind of a crescendo in the funnel that we believe we have a lot of things that are coming out and will continue to come out.

And a proof point of this are these 2 releases that we have been doing in the last year or so, one, Elekta ONE Planning was talked about, the evolution of our Monaco treatment to some more comprehensive suite and Elekta Online, which is more the adaptive part. And you see here that we have rolled them out or are rolling them out, and you see that combination of more than 90 orders at a very significantly improved price point because the customers see the value, they see -- when they make the business case for themselves, that this helps if they have a 10x increase in speed of the computation that this will reduce, overall, the time they need to do. So for them, it's a good investment with return on investment.

And on the right, first of all, it's global as well, and it will continue to roll out. And on the right, you see some of the statements that customers are making that basically confirm that we have, in the first one, very clearly the efficiency that's going up, 30% more volume at the same numbers of dosimetrists. Second one, treatment -- total planning time per half, meaning that the weight for the patient between doing the simulation on the planning and starting the treatment becomes smaller. That's huge.

And the third one is really saying it's more technical. We see that the GPU acceleration is truly a huge step forward. And that is actually a very important point that if you look at personalization, I think the left side is pretty self-explanatory. Tumors are dynamic. So you make -- you are diagnosed, you make the therapy decision, you get the simulation, you start the treatment. The time in between them, the tumor will change. And the longer you wait, and for some aggressive tumors, this can be a significant change.

The second one, obviously, once you start treating over the course of the treatment, the tumor will shrink and will change. And the last one, of course, is that also specifically, if you look at the middle to lower body segments, the patient is breathing, the bowels are moving, the different filling of intestines and bladders and so forth. There is a lot of shape and motion that we need to compensate.

And there are 3 important technology breakthroughs that we highlight here. Number one, the big step forward in imaging for ConeBeam CT, AI-enhanced, we call it Iris. Huge step in image quality. Something that we had with Unity, we now have on the CT side as well, a big step forward. And I'll come back to Unity versus CT in a minute.

The second one that we have this breakthrough in speed for computation, factor of 10. It makes a totally different paradigm possible that wasn't there in the past when you had to wait 25 minutes for one plan to be calculated. If you can do this now in 2 minutes, you can do this every day for every fraction.

And the last one that we have increasingly complex workflows and Elekta ONE OIS is now also focusing on enabling those workflows in a safe navigational way so that we can actually have this complexity in the clinic, with still the nurses and the doctors being confident that the bot is going to be planned is also being delivered.

And every one of these 3 individually is a huge step forward. Every one of these 3 in itself is something that is of high value for the customers. But if you combine them together and then you look at hypofractionation, you see that actually the true power of 1 plus 1 plus 1 is significantly more than 3 comes for by the combination of these. And these are not arbitrarily combinable. So they are -- you always have interoperability, that's a given. But if you really want to automate this. If you would want to get through this fast and efficient and still safe delivery treatment and adoption, you need to integrate them. That goes beyond 1, 2 or 3 of them individually, you have to take a holistic view. That's what we can provide.

Coming back to the topic of image quality. On the left side, that's a picture that will be shown in one of the deep dives later today as well. You see in the red circle, kind of the bladder of a patient and then you see the bone structures around it and you see because the electron density is different, a very sharp delineation, and that improvement in this delineation helps to make this automated for auto segmentation, as was mentioned before.

But this is between different organs, there's an interaction -- inter-organ kind of application. If you want to do -- looking at the right image, where it's more about rectal cancer. And the rectum is a different beast because it's soft tissue, embedded in soft tissue, filled with soft tissue. And then you have the tumor, which is also soft tissue. With ConeBeam CT, it's almost impossible by the nature of the -- how ConeBeam CTs are being made or CTs are being made to see those subtle differences. MR makes it possible.

So you see for the right example, where you want to boost those inside the tumor, inside the prostate, inside the rectum, for that, it is essential to have soft tissue contrast, which Unity provides, from a very basic difference in how the image is acquired than from CT. But for many of the other, if you say you want to have a whole bladder radiation or whole prostate radiation, ConeBeam CT does a great job. So you will have a balance between what is best for what kind of tumor. Different clinics, different clinicians, different countries will also probably have different opinions about this. So this is a choice.

And we truly believe, the future of imaging will be both CT and MR based just as it happened in radiology. There is no competition. Of course, you can say there are borderline cases. But in principle, nobody is arguing MR will be replaced by CT or CT will be replaced by MR. And when you have the time to go to the deep dive later on, John will also talk about how actually the development and the adoption of MR and radiotherapy is, I would say, probably mirroring quite to a significant degree, what happened in radiology. History repeats or rhymes.

Productivity. I showed this picture in a similar form, slightly modified before. But then if you look at it, you had this kind of arrow going from the simulation to treatment planning, to the imaging and the treatment delivery and then the information system. Now -- and you do -- if you do online adaptive, this whole treatment plan becomes part of this iteration loop, and they are becoming very closely integrated, as I said before. So these 3 things, these 3 different modalities have to work very closely together. Again, quality assurance, patient safety is paramount.

And yet, you see automation is key to make this efficient. Zero-click auto-contouring, automated secondary dose check extremely important. And then you have the choice, online, off-line, is there as an option. And depending on the patient, depending on the doctor, you can say, I want to do this today or not. And that gives a freedom of choice that just wasn't there in the past.

So we believe that this is something that uniquely differentiates what we have because you can do this on a machine that can also do standard normal non-adaptive treatment in this side on the day. You don't have to have a dedicated machine that only does online adaptive. But you also don't have a software that's stand-alone, but doesn't really integrate into the control systems of the linac where you really must make sure that the right things are happening in the right very way, and with the quality assurance there as well.

So we believe our solutions with Elekta ONE as the kind of best-in-suite kind of approach, one hand has the OIS linked to Smart Workflows. The right, we have the planning, the analytics also they are the high speed, and this will all lead to a reduction in burden for the specialists and simplification of workflow, also an increase in safety. Because the more complex you make workflows, the higher error -- the error-prone -- the more error-prone they are.

And this is also kind of a dilemma slide, right? If you look at how we look at the ecosystem for these solutions. If you go to start from the very right, if this ecosystem is extremely open, and you just look at DICOM standard, FIHR, HL7 kind of interoperability, you can basically combine many, many things from different vendors, self-made, self-written software together into one way to treat a certain patient. This is what many academic institutes are doing. This is what mainly leading clinics are doing to explore what's possible, what are options. And they want to have total freedom, and that's totally right thing for them to do. They pay the price of productivity for that. But for any of you in the research stage, productivity is something you optimize later. First, you want to show that the treatment is really better.

If you go to the very left, it's very close. Well, that means often that you say the treatment choices, the options that one vendor can offer or that maybe one device can offer are limited. You have a very high productivity, but you trade in, in flexibility. And what we try to do with intelligent operability is to balance these 2 things and to give clinicians the choice, do I want to optimize more for the right side? Do I want to optimize more for the left side?

So there, we look at innovation often led by Elekta, but then working together with best-in-class partners and MIM from GE was already mentioned as a key choice of a strategic partner. And then the choice is how much do you want to optimize left or right? If you want to have a fully highly productive, efficient online adaptive workflow, you probably want to be more on the left. But you can choose also not to do this. And if you are in a research environment and you write your own segmentation, AI enhanced tools, you can plug them in through standard interfaces. But again, you will lose productivity. These trade-offs, we believe, are different for different institutions in different reimbursement situations, and we want to keep these choices open for our customers.

So my key takeaways, hopefully, for you. We have this dilemma between personal and productivity. We believe we have a way forward to do this. And with Elekta, we believe we can go both for better outcomes and higher productivity, and the choice where you optimize is left to the customer. We have an integrated but also comprehensive portfolio. At the same time, our portfolio should not be limiting, but it will favor certain ways of working. And with asset-light innovation, many software-driven, not all, we will go through installed base upgrades and also, as mentioned before, SaaS business models that makes many of these innovation easier, affordable for our customer instead of having this big capitalized -- this big CapEx kind of acquisitions that they need to make.

Having said that, I want to hand over to John Lapré, he's actually one of the guys who has envisioned about this personalization productivity for a long time, and he's leading our Brachy and Neuro business. John, up to you.

Thanks, Christopher, for the introduction. I hope to be able to radiate a little bit of the enthusiasm that I have for these businesses. I've been 16 years in Brachy, 13 years in Elekta. I've been CTO for a couple of years and since a couple of years, responsible for Brachy and Neuro businesses.

But more importantly, it's not about my enthusiasm. It's about our customers' enthusiasm for these businesses. We have huge market shares, as was discussed, if you look at intracranial radiosurgery, the Gamma Knife is the golden standard. I will come to that as well. For Brachy after loading-based Brachy. We are by far the market leader as well in that space. And being a market leader brings also some kind of extras that you need to do. And we have a very loyal and active customer base. The BrachyAcademy we supported, that's a peer-to-peer training platform across the world. It's even been cited in scientific journals now with publications as the way of doing peer-to-peer training.

Leksell Gamma Knife Society coming up in September, started in 1989, already, a huge interaction platform, neurosurgeons, radiation oncologists around the Gamma Knife. And what can you do? How can you exchange information? Well, not only that. So it's a loyal customer base where these customers also pay well for our solutions. Why? I'll come back to that. But we are Brachy and Neuro combined about 20% of the revenue, but very highly accretive to the EBIT contribution of Elekta.

Now why are those customers so enthusiastic? Why are they saying we need to have the Gamma Knife, we need to do Brachy? There's a huge clinical evidence out there with very important data on patient impact, quality of life, effectiveness, both for neuro radiosurgery and that's mainly the Gamma Knife, and for brachytherapy. On the left side, you already can see that 3 more publications and all other technologies around intracranial radiosurgery.

A fast treatment for multiple brain mets, it's not about one met. We see more and more brain mets coming with better diagnosis, longer survival of cancer patients. And this is the machine to really have more than one brain met effectively done in one fraction. I'll come back to that.

Also, very clear that if you do whole brain radiotherapy, you take margin, you take quite some margin, you irradiate healthy tissue. The Gamma Knife has the lowest margin in all the machines that we have to exactly do the tumor and precise localization of the radiation. That brings another potential benefit that when there's a recurrence, you can use, again, an irradiation because you didn't touch the healthy tissues.

Brachytherapy, also a lot of information. And I should say about these studies, it's not we're spending clinical studies like pharma. These are studies initiated by our customers. These are studies that are done with our customers.

In brachytherapy, very important in cervical cancer, Ardie also mentioned that as a boost with external beam. And what you see in this graph is if you only do external beam, this is the light blue one, no brachy. You have a certain survival, 5-year survival. Now you add a very rudimentary brachy, 2D brachy, we call it, you see an increase. Then the recent studies, the EMBRACE studies, one was retrospective looking back. The last one is really almost the golden standard of how you'd like to see some of these clinical trials. It's a multicenter trial. It's prospective. It's looking forward with a standardized protocol, and you see what it does versus no brachy on the overall survival, 25% plus a 10% additional gain.

Now what that had was an MR step. So using an MR when the applicator is brought in. That means your applicator needs to be MR-safe. We have the widest portfolio of MR-safe products and consumables, there you see one. I will not disclose prices, but don't think that this is a couple of euros. This is a very profitable part for our business, including consumables, including recurrence.

So neuro radiosurgery with the Gamma Knife and brachytherapy really contribute to patient's survival and quality of life, not only our opinion. That's why our customers are so loyal and use this. So what are those products? Caroline Leksell Cooke is sitting over there. We'll show you the Esprit later on. The Leksell Gamma Knife, as you can see here, but it's not enough. We need to do treatment planning as well, like Christopher also said. And then we have basically the Leksell vantage system and the arcs.

Now the Leksell Gamma Knife was, of course, the own set of Elekta. This is how Elekta started. And having it still there is so much kind of testimony of what this equipment is able to do. It's one fraction, as I said. So further hypofractionation. You cannot do a half a fraction. So further hypofractionation is, of course, not possible. There are a lot of potential intracranial indications where you can use it.

Now if we then look at Esprit and you will see more of that, there's an imaging component there because if you give one fraction, you need to know that you give it at the right spot. The same was done for Brachy, where we have introduced the imaging ring because for Brachy, otherwise, you get an applicator. You have to be transported through the hospital to a CT or an MR with this applicator in which moves, et cetera. This Elekta Studio allows you to do it in room, in the treatment room. You can do it in principle, as many times as you like, make it adaptive say, hey, the bladder is filling or whatever. I need to adapt my plan and have a better personalization based on that one in room, image-guided and adaptive.

Hypofractionation as well. Brachy is 2 to 4 fractions. Again, knowing where you give the radiation is important. Now Christopher also already said that there is a kind of penalty when you do these kind of adaptive things. It's the same a bit in Neuro and Brachy. The workflow improvement is so software dependent. We need to make sure that we can plan as quickly as possible. And one of the previous ones was that you saw was software, including lightning for the Gamma Knife. That basically saves more than 50% of the of the time for planning. There's a customer quote who also says this saves so much time. It's so fast that gives us so much time back for the neurosurgeon. And that's important. For Brachy, we do it with Elekta ONE Planning, much more integrated as well.

Now if you then look at, all right, John, great. We heard about 2,000 Brachy, about 350 Gamma Knifes. Well, here, you see the potential for upselling and for upgrading. Still a huge installed base in Neuro of perfection and icon that we push to Esprit, including the software that we are developing. And the same for Brachy with microSelectron to Flexitron will be pushed as much as we can to upgrade as well with the Elekta ONE Brachy Planning around that.

But it's not enough. That's basically from our installed base. We want to grow further into growth markets as well. That means some clinical indication expansions we're going to look at. We're looking at other business models. I already talked about the applicators, very, very profitable, and the subscription model is to make it -- the total cost of ownership more insightful for our customers. Every 3 years, these applicators have to be replaced and have a subscription model with Brachy as a service, if you will, is another push that we're doing.

And I want to briefly go to cervical cancer because I can hear sometimes people thinking cervical cancer, well, that's we have HPV, right? At this moment, as we speak, 600 females per day are dying of cervical cancer. It's not about toxicity. This is dying. And that means there's still a lot of work, and it's not evenly distributed over the globe either. So in the growth markets, you see much more of these than in the more mature markets. And we feel that also with new business models in those markets, we should be able to tap into this big deep. The WHO has declared a war on cervical cancer, and we're working with the Elekta Foundation, IAA, et cetera, to ensure that we can help here out.

So expand clinically and grow the installed base by also some benign indications for Neuro. So it's not only about cancer. We're looking into neurological functional disorders, but it's not an easy one to get a lot of approvals for. But we do it. Parkinson's is one, but maybe OCDs.

For prostate cancer, also there, it was already mentioned, a boost of Brachy to help hypofractionation on the linac is another one that we're really looking at. And again, rectal cancer, as was mentioned by Christopher as well, the combination potentially for rectal cancer.

But where it all comes back to, if we need to shorten the treatment times and we do that by software, so Elekta ONE and Lightning. And so we're able to have very productive workflows and very much personalized.

So the key takeaways, as you can see, these are high-performing and solid business lines are always saying these are indispensable parts of radiotherapy and indispensable parts of Elekta, highly margin accretive. We have the market-leading positions that we really should thrive on, as Ardie also said. The reason that these are high-margin and loyal customers is we have superior clinical outcomes. And the sustainable growth path are around installed base, but also around new clinical indications as well, but a lot of it will be around software and workflows.

With that, I thank you for your attention. I give it to Peter.

Great. So we'll do a quick -- thank you. We will prepare ourselves for a Q&A. And Emily here will move some of the tables. And you also have clearly here, in the audience, the possibility to ask questions. Online, you can also ask questions live, and you can also post questions on the chat. So you have those possibilities. And I will try to alternate the questions here between online as well as in the audience.

So by that, I would like to invite the speakers back to the stage. So please join me here. Yes, I will move here. Even though we're running a little bit late, we will keep the Q&A as thorough as possible. And I think Emily, are you going to run around with -- Monica is cool with doing that.

So maybe we start with Sten in the back there. Please, Sten, you can ask the first question.

Sten Gustafsson from ABG Sundial Collier. First question to Tobias. You talked about simplified and accelerated order to cash. What exactly does that mean? What are you going to do different this time?

Yes. Thank you for that question, Sten. So what we really are doing, please fill in here, Habib, is that we're really comprehensive now going through all the steps to make sure that we have a fully flat execution across. So it's really a seamless process and optimize the various steps. It will enhance the quality of the process. It will enhance the effectiveness and it's also -- we'll bring down our spend in the process as well. So it would lead to better quality, will lead to lower costs, and it's really a comprehensive approach really from when the order is taken on until we have collected the cash, and it's actually several steps. And it's also, I think, here in the work to create a very predictable, stable revenue stream. This is a key element to be really on top of the execution of our orders.

Maybe, Habib, you want to fill in?

Yes. It's a comprehensive approach where once we take the order, we understand the customer and the contractual delivery date. So when we know the customer delivery dates, we can align all the processes going from preparing the goods to booking for the shipment, to the preparation of the installation in its phases. So all this is about continuous monitoring of our backlog that I talked about, where we have a good visibility and predictability about the backlog to align all the processes together that from the time we take the order, we know when we're going to deliver, when the customer is going to be ready and we're going to deliver and where we're going to recognize revenue and we get the cash. So it's all about predictability.

Right. If I may, just a quick follow-up or not follow-up, but then a different question. Jonas, you said you were quite bullish about the full year. Could you elaborate a little bit, give us some colors? Is that growth or margins?

No, I think it -- we -- as we said during the earnings call, the guidance or the outlook still stands there. But we're feeling quite good about that.

Maybe to add a little bit on that question as well. I mean, here, what you saw in Q4, and we have talked about it throughout the day here, we were able to strongly improve the gross margin. We are at the beginning of the launch phase and should really build on that and utilize here the enhanced value that we can provide to our customers. So it will be a continued hard work. You have seen the guidance. And I think how you should look upon this is that yes, we have the guidance of increasing the revenues here in the fiscal year that we're in. And it's also an important step here towards the midterm targets of reaching an operating margin north of 14% and the gross margin here to establish ourselves above 40%.

Thanks, Sten. I think [ Kristofer ] had a question. We'll move there and then we'll move further down the room later on. So Kristofer?

Yes. The order cancellations, will that have any impact on sales? And also it seems this increased focus on margins you have, do you think that will impact your ability to get back to growing sales in line with market or even above market, which was the ambition a few years ago?

I can maybe start and you can fill in here, Habib. No, it doesn't change the revenue outlook. This is actually enhancing the quality of the backlog and actually removing nonaccretive orders. So we stay firm on the path we're on and built on the strong outcome here in Q4, and that is a work that is about to continue. So no, it's not about to adjusting any revenue outlook based on this at all.

[ Kristofer ], as well, it's the opposite because as you saw, we have 82% of the backlog still active. And what we look at is the old orders that have not moved with -- has been taken when the currency was at a different level than now and the cost of goods at different levels. So it's all -- it's boosting more the vitality, I would say, of the backlog and making it predictable and accretive.

Great. Let's move to the London table, we can call it here, where we can start with Veronika. So please.

Veronika Dubajova from Citi. Three questions for me, please. One, just a follow-up on the order cancellation. Do you expect it to have any impact on how customers perceive you and whether they want to do business with you? Obviously, if you've shown up and canceled an order they placed a couple of years ago, it might have some repercussions.

And then just maybe a bigger picture question on the commercial strategy in developed markets. You have historically been very successful in tenders where I think your big competitor was maybe not as willing to be price competitive. Is what you're telling us today a clear sign of that change in that strategy? And how should we think about your ability to win in those tenders, which have been an important driver of growth for you?

And then maybe if I can squeeze in my third one, just on the U.S. reimbursement changes, obviously, there's kind of 2 very clear paths either we end up with a big cuts heading for 2026 or 1031 or whatever the bill number is passes. Just curious about how you think about the market outlook under the scenario that ASTRO is not successful, and we do end up with much more draconian cuts to reimbursement.

Habib, you start with 2 questions, and then we'll move to Ardie for the third one.

Sure. So Veronika, we act in the frame of the contractual agreement with the customers. So either we have a consent from the customer because it's went beyond the 3 years of installation or we have a consent with this. So we act in that frame. Second point, from our competitiveness in the public tenders, not more about price. Now we see even in the public tenders, customers more wants like a continuum in their installed base. They want upgradability. They want to go to hyperfractionation and to go to -- yes, to adaptive in some cases. So we fill all the cases -- all the -- we take all the criteria for that, not only on price. And the third one, I think, question is for Ardie for you for U.S. about reimbursement.

Yes. Thank you for the question. And while this situation is obviously a little bit fluid, we're working really closely with ASTRO and ACR. The draconian measure you mentioned was really related to bundling, radiology and radiation oncology. And the feedback we're getting from the bodies is that they are trying to dissolve this because this is a mistake.

But the fact that there is now a groundswell from 122 institutions that are signing up for Roche and also getting good support at the hill from both parties, we feel strongly that the Roche legislation is going to get passed. Now we will have to obviously see how this is playing out this year and when the bill is going to be taken up but if it goes into the draconian direction, obviously, we have to regroup. But we're focused on making sure we protect the reimbursement rates for radiation oncology. We believe that cancer care is a very vital piece of health care in the U.S. And therefore, we strongly support ASTRO and this endeavor.

I think we have -- David, you had a question and then Robert, to you.

David Adlington from JPMorgan. Just I'm afraid coming back to canceled orders. I just wondered what you expected on balance customers to do there? Do you expect them to come back and make new orders at a higher price or they just disappear? And then related to that, typically, I think you take a deposit on an order. I just wondered if there are any cash flow implications of the canceled orders? Do we have to pay deposits back? And if not, does that mean you get to recognize some revenue?

Well, I'll start with the second question. No, there are no deposits here. So that's the answer. So it will not have a cash flow impact for [ SC ]. On these orders, no.

And as I said, we act in the frame of the contractual. So the customers, first, everybody understand that after 3 years, I mean, the macroeconomic change, the cost of goods change everybody feel the inflation -- felt the inflation. So they're not surprised on this. But I repeat again, we act in the frame of the contractual agreement where we know that we have the right to change or to cancel based on the contractual clauses that we have in our contracts.

And then to clarify that a bit, David, the customers may come back and order again or they may not.

Here, we'll go to Robert in the front here.

It's Robert Davies from Morgan Stanley. Three questions. First one was also on just the order cancellations. Just be curious, when you look through the profile of the orders that you haven't taken out the backlog, I think you mentioned a number of 82% of the backlog was still "active," what's involved with the remaining sort of 18%? Is that stuff that hasn't been canceled, you can't cancel? It's within that sort of 3- to 5-year window? Just that was the first question.

The second one was just, I think you put up a slide during the contribution of software around 21% of sales that have been relatively flat over the last few years, given that's been such a big focus for the company, perhaps you could give us a little more color of how you're expecting to accelerate growth in the software element specifically?

And then sort of tied to that, the Software-as-a-Service bit of your business, just if you could provide a bit more color in terms of what that contribution is now, where you expect it to be in 3 to 5 years? And is there anything you can give us on sort of growth on margins around that bit specifically?

Maybe Habib, you can start with the first one, the 5 years order book.

Yes. So you rightly noticed that there is still 18% of the backlog. And some orders to be materialized takes more than 3 years. So this is why either -- I mean, we understand that these orders will still move because the customer has the financing and has a delay in the realization and the price and the margin is good or some others are still on hold under investigation to decide about the status, either cancellation or keep them. But the bottom line is that 82% is still active and transferable.

You can continue with the software questions.

Software question, yes. So it has been a relative stable development if you look over the last 5 years, which I was presenting here. However, what you see here in the last year is actually the pickup that we are 1% up as a group in total, while software is actually growing by 7%. So there is a -- and when you look at the share of sales here for software, there's also enhancing in the last fiscal year. When you look at the order development then, we are running here with an order growth above 20%. And this is not something that randomly has happened.

It follows by a very precise and conscious investments that we have done, ensuring that we have software installers, ensuring that it's fully integrated in the commercial offering, ensuring that, I mean here, a very long-term work here in coming out here with Elekta ONE and what just Christopher presenting. So I think actually, when you looked at it and saw here, again, I'm coming back to Q4 and the gross margin improvement we've had, it's not a coincidence.

It's based on actually planned actions here, both when it comes to price increases. We talked about Elekta Evo, but it's also an acceleration of high-margin businesses. And what we have seen here -- and it's actually been also when you look at the software development, it's actually the 3 last quarters, which have been strong in terms of the revenue growth. And that work to emphasize software and drive software growth, that will continue.

Maybe add one more thing to that because I think you mentioned it in your slide as one of the kind of productivity points that we are pursuing that we have a very active program now on increasing and simplifying the installability, the deployment of software, make that as easy and as smooth as possible, where in the past, you had to send a service engineer to a site who has to go into the department, maybe even into the bunker and has to put out a CD ROM or something like that and has to install it. We are increasingly moving towards much more automated updatability.

So this will also, in the future, and that's again a little bit forward-looking, make the speed and the increase, the simplicity also for our customers to get software upgrades in an easy and nondisruptive way much more -- and that's -- much more easy. And that's also something we are and have been investing on. And specifically, when you talk about the complex software installations of our OIS, of our comprehensive motion management, which is usually a suite of software, these things are going to benefit very greatly from our efforts in R&D and investments to make these processes easier, even though the clinical functionality will not change, but just the upgradability will become a major multiplier for our efforts.

And in the coming years, when we get Brachy on Elekta ONE, that adds another potential of 2,000 installed base for upselling and upgrading for Elekta ONE.

So we'll move over to [ Bo ] in the front table here. You'll get it here. Sorry.

[ Bo at JO Pharma ]. A quick or a small question or big for the team Europe and a very big one for the U.S. and start with the first question then on Europe, and that is -- so Evo, I think back-of-the-envelope calculation was that you had orders above 25 in your fiscal third quarter. How many orders did you have in the fourth quarter? And how fast can the trajectory be compared to the Versa HD launched in 2014, '15?

Yes, I can answer no on that question. So what you actually saw both in Q3, we don't provide explicit volumes here by quarter. But what you could see was a strong traction and momentum both in Q3 and Q4 from Elekta Evo in Europe. And that is something to build on also when we roll out the global launch here of Elekta Evo.

60% of our linac is now Evo and...

Second half, yes.

In second half. But as we go forward, we think that the Evo would be -- in this segment more than 50% of the orders of linac will be Evo.

And it was 50% in Q3. So much higher than in Q4, if it's 60% in H2.

I think it's -- when we talked in Q3, then we talked about the, sort of say, total orders. But I think that the key here, what you see both in Q3 and Q4 is that we have a strong traction, which we need to build on. And it is a global launch. And that means that everything will not be a straight line, but it's actually to build here and drive the momentum ahead of us. And so far, it has went very well. And I think we are equipped here with a great product that we will continue to utilize, not only in Europe, but also on a global level. But the traction in Europe is good.

And how big part was the software upgrade in Q4 or second half?

So we have not shared explicit details here by quarter as well. But what you could see is clearly an order growth of software, which was much larger than the average order growth in Elekta. So that was very notable. And that is also a consequence of what you just heard here Christopher presenting and what you will also hear more from Anish, which I really recommend to listen into later on.

And then Ardie, a much more difficult question, but I guess you are new in your role and been successful in Europe. And could you talk about the U.S. before you arrived, what you have seen and what you expect to do going forward, excluding the upcoming approval of Evo?

Yes. So I think arriving in the United States and looking at it from an outside-in perspective, you see, obviously, this is the home market of Varian. So I think a strong installed base there from our competitor and also a lot of, I would say, academic leadership there where you see that the comfort level with the Varian solutions is a little bit higher than with Elekta. On the other hand, people do see that the radiotherapy market is changing. And especially, I think, in the direction we're heading with our solutions to give a flexible offering on doing adaptive treatments, I think really separates us from our competitor.

They have basically focused on a strategy where they launched a product called Ethos, which is the machine you have to buy to do adaptive therapies, whereas we, as Elekta, have chosen the different path. Not only do we provide, obviously, an opportunity to go to adaptive treatments with Unity, but also in the future, we can deliver this with the linacs. And most importantly, it's also upgradable. So we have a big installed base of Versa, as you know, which is a great potential for us to upgrade not only on Iris image quality, but also in the future for adaptive treatments.

So I think we have a good starting point here to really start growing again in this marketplace, strengthened also by the fact that we see that now also with CMM rollout, key institutions like Memorial Sloan Kettering, NYU, MD Anderson seen uptick in throughput with the Unity and started to see that also there's more indications being treated with MR-linac. So this brand image that we're creating around adaptive therapy really sets us up for growth. And I'm really strengthened by the fact, obviously, that the reimbursement climate is under a big focus here to make sure that we also help our customers getting paid for these additional steps.

So it's going to be, I think, an exciting time for us here in the United States and working with our customers, confirming that they want to have a strong competitor to Varian. The other thing we don't really know yet is the impact of Siemens Healthineers dropping the Varian name for January 1. It has a very strong brand value in the U.S. market, as you know. And so we definitely want to stay close to our customers, making sure that we can benefit from that change.

Let's move back to Mattias in the back.

I have 3 questions. I appreciate all of the discussion around margins and the path forward to make it more profitable growth. But what we are lacking here a bit, I think, is commentary on future growth ambitions from Elekta. You clearly covered the efforts, of course, everything you're doing. But -- so how are you seeing market growth going forward and what is reasonable for Elekta to achieve, particularly perhaps interested in the U.S., I mean, given the sort of fading number of installations we have seen in recent decade and we saw in the presentation and of course, a high density of linacs as well, less fractionations should mean less need of linacs. So maybe cover that.

And then also on the U.S., I think we have seen a decline in constant currencies over the past 6 to 12 months in service revenues. So just help me understand a little bit what is driving that development and when that could turn positive again? And then lastly, so gross R&D moving towards 10% of sales. What is maintenance CapEx for Elekta? And how is that expected to develop going forward? Those were my questions.

Maybe you can start with the first question about growth. And then Ardie can add on the U.S. side on that as well. So...

No. We see like the growth is a different dynamic in the different part of the world. And we see in China, for example, this year, the orders coming back on the growth. We still have growth opportunities, Southeast Asia and other part of the world, we -- in the emerging market, the growth would come as well from more installed base where we do not have high installed base, and this is the expansion on our installed base with the adaptive radiotherapy. So it can grow with the market in some growing market, but as well it's growing with more competitiveness with the new solutions that is coming.

We see still a growth in the replacement market in Europe, very active replacement market. It's not only about access. It's more about elevation of the care and having to hire techniques. And I would say before going to U.S., it's not only about top line growth. It's more about accretive growth. So I wanted to comment as well before about the solutions, I would say, backlog. It's not only about having like MR-linac, which might be less accretive than the software or the Brachy or the Neuro. So it's managing and forecasting as well the profitability rather than the top line here. And this is what we are about here. So maybe U.S.

Ardie, you can add that to the U.S. growth ambition there.

Yes. So just to rephrase your question, really, what's the impact here of going to hypofractionation for the marketplace. Yes, the answer is that, obviously, if you can do hypofractionation, you can treat more patients. I think for us at Elekta, this is a very positive development because that means that the older equipment, as you saw in my slide, the average of 14 years, those are older linacs that basically just do the basics, and if you want to go to advanced treatment techniques like VMAT and later on hypofractionated adaptive therapy, those capabilities are not available in those centers. So it's an opportunity for us to upgrade these machines to our technology.

We believe that our offering in that area is stronger than from a competitor. And therefore, we believe that this change is going to be beneficial for our linac growth. It's obviously also clear that we have focused a lot on Unity developments, but now we start to see with the developments we have on the linac and the software side, we have a very good uptake and starting to turn this ship around. So what you will see over the next couple of quarters is that we indeed are starting to increase again on the solutions revenue side and then also on the service revenue side.

And maybe, Ardie, you can add on the question around services development in U.S. as well on that question. How you see that?

Yes. So if you look at the services development, where we have strong installed base, we see that those services are actually increasing. On the linac side, I just described, obviously, that there was a little bit of a weakness that we are now addressing with this new portfolio coming out. So therefore, I see that, that sets us up for a future growth path with good profitability.

Thanks, Ardie. And maybe Tobias, there was a question about gross R&D, how big portion of that could be maintenance investment?

Right. No, that is a number that we don't provide per SE. But what you can say is that the current R&D investments that we are on allows us to have a strong innovation pipeline and actually sizable investments for developing our products. That's how I would frame it.

And maybe to add a little bit to that because when we talk about maintenance, it very much depends also about what product or part of the product portfolio we are talking about. We have some very modern, very recent releases that are fully on par with the tech stack and maintenance is there, but it's also already quite automated and modern in a web environment often. Of course, we have also a lot of history and there, we need to do some active work right now, which we are doing. But also there, and that's something, again, utilizing innovation not only for our products, but also for the way we are working, we are active -- very active right now in programs also how to automate many of the more basic innovation topics that we need to do, like test automation, which can be a huge effort, but you can also automate that.

We are using generative AI right now to automate or to generate our test cases that used to be done manually. So I think also there, you will see that our innovation capacity for the high value-add topics will go up. And of course, maintenance as a percentage of overall, let's say, effort will probably still be reasonably high. But you see that the manual part of that will decrease, and we reallocate those highly valuable manual people in our R&D teams towards the value-added topics.

Yes. And there's maybe one thing -- I don't like maintenance as well. But if you look at continuous engineering, yes, we have sometimes that we have obsolescence. We need new parts, and that's immediately an opportunity for COGS reduction. So it basically cuts through multiple things.

We have one more question there.

This is Estelle Pang from Bernstein. I'm asking on behalf of Lisa Clive. So just to quickly kind of understand a bit more of the canceled order in the backlog. Is there any common theme behind those cancellations? Were they more from emerging markets? Or were there any like large tender-based contracts?

So the common theme is that it's nonaccretive orders, which actually here where we see an opportunity to enhance the quality of the backlog. So that is what we -- and yes, there is a clear part, which is from emerging markets as well.

Good. If no further questions in the audience, yes, Robert, you could -- let's move there to -- let's start with Robert here. Then we'll take Erik as the next question.

I just had one follow-up question around how you structure partnerships within your business, both on the hardware and software side. You're obviously kind of putting up a fully sort of integrated workflow solution. How often are you using partners? Where are you using them? How heavily are you leaning on partners, particularly on the software development side, I'd be quite interested in that.

Well, we are, of course, working with partners and some of them are exclusive. Some of them are preferred and some of them where we are agnostic and just basically provide the interoperability to be able to interact with an Elekta solution. And when we talk about the strategic ones, we are and will be very selective because there, we really need a long-term multiyear commitment to have a co-development effort, and that includes not only the development effort on the engineering side, but also a business case and a business model that is beneficial for both parties.

When we talk about having increased interoperability and then you can talk about partners where we have preferred partners, but are not exclusive. There we will have open access to certain interfaces that are accessible for everybody, and we will have some selected kind of more proprietary protocols that we will open up also with new business model for partners that allow them to integrate deeper. But we don't need to really do co-development for that. We can open them up and then we have maybe a co-test and co-validation of the resulting workflows.

And the last point, we, as Elekta, are committed to an open ecosystem. So we will continue to expand our interoperability, and that is not only with partners, but also with parties like EMR providers that, of course, also have large IT infrastructure in the hospital that we need to be able to connect to and they need to connect -- be able to connect to us. So expect also there some developments in the future.

Thanks. We will -- yes, maybe Christopher here. If you move to Christopher, then we have Veronika. No, we have Erik, sorry, Erik first.

Erik from Danske Bank. You said in the introduction way back that you're now only going to take profitable orders, which sounds like a good starting point. But I would have thought that you've always taken profitable orders, but then maybe over the past couple of years, maybe got caught out first from supply chain and then inflation. So what's actually different with the way you take orders now? Do you have a larger margin of safety on margins? Do you bake in clauses? Do you have additional protections in any way?

Do you want to speak about that? Or should I start a bit?

You start and I can see...

So I think what we've done and Habib talked about that is we have really digged into the processes around our order to cash program and so on and have quite much stronger safety net also with the capabilities to adjust prices way much quicker than we have been able in the past. Maybe, Habib, you...

Yes. So actually, when we look at the quote to order to revenue, we reviewed our pricing model. And in the pricing model, we anticipated the standard costs that we can take into consideration in the beginning as a cost and as well what targeted market value we can have with the value that we are conveying to our customers. So first, much more robust pricing model, embedding the standard cost in order not to have surprises like we got in 2021, where we had a surge in the COGS and surge in the logistics and so on. So now it's much more stable and very robust pricing model, plus we compare ourselves to a target value, which our customer is ready to pay for our solutions. So much more robust pricing model.

So we have time for one more question. Did you have a follow-up or...

No, I want to ask something else.

Okay. One more, Erik, and then we have 2.

Okay. Just -- I think software is probably going to be the most important part for the next 10 years, maybe forever. But you have quite a different selling process compared to others. The way you sell software, especially to the U.S., I believe you're only going to sell it as a service, but no one else seems to be doing that. And when I buy something as a service, I buy it because I want to be able to cancel it. When someone buys a linac, they know they're going to use it for 12 to 15 years, and they're going to need software on it. So what's the rationale of even selling it as a service when customers have that sort of approach to using it?

Maybe, Tobias, you can start on that question and Christopher can add on that.

I think you can fill in here more from a sort of commercial and technological point of view. But what we are aiming to do here is, of course, that you have a partnership with your customer over a long period of time. And you work here with the upsell and cross-sell opportunities where Software- as-a-Service come as a national ingredients to both work together with the customer, but also then that, of course, for the customers, it means that you have a lower CapEx at the beginning, you have a more smoother, you can also plan your operations than having spikes in investments when new innovation comes out. This actually allows the customers to have a more planned and also predictable cost for the software and also the usage of the software and the benefits from the software. So that I would say, and maybe here, Christopher, you can add on from here.

Sure. I mean, number one, you mentioned the kind of the ease of cancellation. It's not a Netflix kind of subscription that you can cancel and you go to Disney+ or something like that. Once you are in an ecosystem of an oncology informatics system or have treatment planning software, these are usually very sticky projects -- for products and projects because they are closely related to how you train, educate your staff, how the whole workforce is being used to follow certain processes and everything. So to shift from one software to another, regardless of whether it's a SaaS model or not, is a huge, major undertaking.

I mean that's something if you have seen what happened in the U.S. when they had to shift to the EMRs, those were multiyear, multibillion-dollar projects sometimes. And this is a little bit easier. But nonetheless, it's a nontrivial thing regardless of SaaS or not. Secondly, SaaS provides the flexibility to be in an evergreen situation and saying you don't have to worry about having a capital budget for the next upgrade or install. You know you can get it and you know it's easy to install.

And the third point that increasingly will play a role here is the topic of cybersecurity, right? SaaS models, specifically when they're in the cloud are much easier to have certainty about having the latest updates also related to cybersecurity, which are different and also seen by the FDA, different from clinical upgrades and updates. So the CIO, the Chief Information Officer in the hospital will increasingly demand these kind of models for the departments to work.

And that's not just specific for an oncology department, but it's a hospital-wide decision. So I believe that SaaS models maybe not for all departmental isolate things, but for specific bank also the backbone and the infrastructure for hospitals will become increasingly dominant. And as said, the flexibility to cancel is there, but it's always and has always been a major undertaking that's not taken lightly.

Thanks. We have time for one more question. I guess maybe, Rickard, you can take that, and then we will move over to the concluding remarks from Jonas here. So Rickard, you have the chance to -- and you all have -- who's going to stay here in this opportunity in the deep dives to ask question as well.

Yes. Rickard Anderkrans from Handelsbanken. Just a final product-related question. So Elekta Planning Pro with the adaptive functionality, is that still only for pelvic indications? And has there been any expansion of indications? And what's the willingness for Versa HD customers to actually pay and sort of adapt this technology given the limitations there?

Well, that's, of course, a statement that at this moment, we have the CE clearance for the pelvic area. We are very close to release, not details further to release the next body parts and then have a sequence of body parts that we have a complete coverage of all the organs that are really needed. That's a commitment we already make to our customers, and there is a committed road map for that. Then, of course, you will see that increasingly, we will not only have also updates of the specific body part models, so Pelvis 1.1, 1.3 because also their technology moves ahead.

But we will also start next to the more body parts, we will start releasing packages related to the imaging that are more related to motion management to artifact reduction of gas bubbles, metal implants in the hip, in the face. So you will see that there's going to be a full road map of further things. So this is not just a onetime release, you say you have 3 body parts, you're done. This is a full road map, both within the body parts because the technology will improve, but also going increasingly from static body part improvements to dynamic motion management.

And there, we are benefiting very much from the learnings that we have from Unity and there's comprehensive motion management. So stay tuned, but you will see in the not-too-far future that we'll start to introduce motion management also for CT linacs. That will be a major new thing.

Great. Thank you all, and thank you all for the questions here in the audience. Let's -- we have Jonas staying on the stage, concluding this first part of the day for both online as well as you here in the audience. Then I will be back and tell you a little bit what's going to happen later on.

Thank you, Peter. And thank you all for coming and attending, and I hope that you will join us later at Forskaren. It's been a real pleasure having you here, and it's my first investor update and very, very interesting, and thank you for all the interesting questions. I won't be lengthy. I just want to reiterate that this is our short-term strategy that we're working on now, which we have seen during the fourth quarter, been very successful driving the business with the focus that we have on profitability and margin and so on and puts us in a different maturity level.

With that, I thank you all and see you later. Thank you.