Ottobock Aktie

Good afternoon, ladies and gentlemen, and a warm welcome to Ottobock's conference call following the publication of our financial results for the first half of 2026. Today's speakers are Oliver Jakobi, CEO; and Dr. Arne Kreitz, CFO of Ottobock.

Before we start the presentation, please note that the call will be recorded. [Operator Instructions] And with that, I hand over to you, Oliver.

Yes. Thank you. And also from my side, a warm welcome from Duderstadt. And yes, let me start with the headline. So, strategically and operationally, we are fully on track. So, in the second quarter, we have seen a strong demand in our key markets. And yes, so the timing effects we have seen beginning of the year are normalized now.

Second key message we want to deliver is our organic core revenue. So we grew with 6.7% in the first half year with 8% in the second quarter. So this is driven by EMEA on a broad base, so as well in B2B as well as in B2C. The underlying EBITDA margin improved even more strong than the revenue. So we are now on 25.3%. In Q2, 27.9%.

On the M&A side, we also fulfilled our plan. So we acquired one technology company, so FES, Functional Electrical Stimulation company from Spain. We acquired a leading patient care company in Norway, and the signed Human Mobility divestment also took place. So that what we already had discussed during our meetings earlier. So everything well on track.

With this, we decided to narrow our guidance. So we are lifting the lower end from 5% to 6% growth and keeping the upper end with 8%. And we are increasing our EBITDA margin guidance from above 26.5% to above 27%.

If we have a look into the regions. So, I would start then probably with the left side with the Americas. So here, the key message is that the main market, the U.S. market is actually on a positive side. So we have -- on the B2B side in the U.S., the 1% growth in the first half of the year with 4% in the second half of the year. B2C is still with a good growth momentum in H1 in the U.S.

A little bit different situation in Canada and especially in Latin America. So in Canada, we had last year so-called War Amps program, which in the moment is on hold. That's why the Canadian numbers are below prior year. And we do have timing effects in Latin America, so in the main market, Brazil, there are elections ahead. Therefore, there's a blackout period and no tenders are performed. So we do expect here also better development from the third and fourth quarter especially.

EMEA, now accounting for 75% of our revenue, performed very strong. We had a very strong B2B business, so double-digit growth in the first half of the year, which was driven, first of all, by many different markets, so Western Europe, but also export and the EMEA markets, Russia and Ukraine, but also really important to note are the innovations. The Patient Care business in Western Europe had a very good momentum in the second quarter, so with 6.3%, 6.4% growth. We are back on track, so growing above -- slightly above the market in the second quarter.

APAC saw 3.6% growth in the first half of the year. There are 2 factors important to mention. First of all, we had a very strong comparative year -- comparative period last year with high growth momentum. Then we have this year, some timing effects. So with a relatively small sales in this region, a tender which is postponed like, for example, now in India, or a reimbursement gap which we have seen now for 1, 2 months in Australia have a direct impact. But these are timing effects. So the catch-up will follow. And therefore, we are confident also to overperform there in the second half of the year.

So regarding the acquisitions. So I mentioned already, we acquired Blatchford in Norway. So Norway was white spot on our patient care landscape. Norway is a very attractive market for patient care, very profitable. And we have a unique chance to acquire the market leader. So this has happened in May, and integration is already going forward. And so far, very good momentum we can see there.

With Fesia, we acquired a company which is leading in the electro stimulation. So we are already in this business. So we have a distribution business in this field. But what we were missing was the possibility to influence also the innovation path, then the regional expansion. And of course, what we do have here now is the higher margin. So when you're coming from the distribution business towards your own business, you also have of course the higher margin. So we are very much looking forward with this business. So definitely a growth driver for the coming years.

And the divestment of our wheelchair business. So we spoke about this. We had the signing with DHCare in June and the closing is expected to be at the end of the year. So we are in the moment in the operational separation of the business. We are very happy to have a partner who is a strategic buyer. So that means the business will continue, and it's going very well forward, so for us as a management team, but also for the organization, it is really good to focus even more now on our core business, so prosthetics and neuro-orthotics because the wheelchair business anyhow, we had a lot of projects running there and was a bit of distraction from the core business. So this is now gone, therefore, we will focus on the core business and also report from next year on only the core business, so this core and non-core will be not there anymore.

And now I'm handing over to Arne, who will guide you through the financials.

Thank you, Oliver. I'm happy to take you through a bit more of the details of the financials. Again, starting with the big picture we are looking very positively on. So we've reached our plans for Q2, which means strong organic growth of 8% in Q2, leading to an H1 growth of 6.7%. So exactly the acceleration that we also highlighted in our previous call. In our previous call, we had been discussing 5.1% in the first quarter. I think it's good to see that we now have reached the 8%. So being on a very good track on the top line development.

Same was true for the underlying EBITDA side. We arrived at EUR 207 million in the first half of 2026, which means a 25.3% margin. And what is always important is the comparison to the comparator year or half year last year. And here, we can see a 2.2% increase. When I'm looking specifically into the second quarter, we're talking about a 2.8% increase to 27.9%. So I want to say the pattern that if we're growing strong on the top line side, then we can immediately see this also in the strong EBITDA performance that we've been seeing in Q2, 8% on the top line translating into a strong margin of 27.9%.

Free cash flow and the cash conversion actually strong. So good operational performance, but we have a special effect on the tax side. So we have a bit of timing effects, which will normalize in the course of the year. So, all in all, we can see in Q2 a special effect of EUR 35 million, EUR 25 million of that will normalize in the course of the year. It's the timing of the pretax payments, which last year happened at Q3 and now this year in Q2, but that will normalize.

And there's a second effect also on the income tax, which is that some of the tax refunding that we're expecting will move into the next year. So, also a timing effect, but most likely only happening next year. And if I'm normalizing for the tax effect, we would actually see also a strong performance on the free cash flow development.

Going a bit deeper into the revenue development. If we're looking into the development in B2B and B2C, we see an 8.7% increase in the first half year with 11.7% in Q2. So very strong development on the B2B side. And please keep in mind that we're looking into a strong comparator quarter also last year. So we are actually happy with the 11.7% and think it's showing really the strong momentum that we're continuing to see on the B2B side.

On the Patient Care side, we're looking at 4.2% of year-to-date performance. In the first quarter, we have been at 4.7%. So a bit slower on the second quarter. When looking a bit more into the details, then we can actually see that the core regions in Western Europe and North America actually have been performing very well with beyond 6% growth in the first half of the year, and we had a bit of special effects and timing in the smaller regions, specifically in APAC and LatAm. And that is a little bit mixing up the picture.

But from our point of view, that will also normalize in the course of the second half of the year. So if we're looking into the core regions, which is clearly Western Europe and North America, and we're also looking into a strong top line development on the B2C side.

Moving on to the regions, 9% in EMEA, already explained by Oliver. So continued strong momentum, broad-based. And we also, again, have been seeing some momentum in Russia, Ukraine. I know that there are questions around that. So we can see 1% to 2% of a spike event impact if we're looking into the numbers. But if you look into that, you can see that the majority of the growth is really broad-based and not spike event driven. And from that end, we're looking into a strong performance all in all in EMEA.

Americas, a bit mixed. Actually, good recovery on the U.S. side with -- we have been a bit lighter on the first quarter. Now we're seeing a catch-up, arriving at 4% on the B2B side, even stronger on the B2C side. So we think a good momentum on the U.S. side, which is a bit mixed up by Canada and LatAm by the facts that Oliver already explained. So again, bit of a mix of effects. But the key message is that in the most important market in the U.S., we think we have seen in Q2 the positive development that we also have been foreseeing when we talked about Q1.

On APAC, 3.6% and a bit slower growth in the second quarter. And here, you just need to keep in mind that -- I mean, if I'm looking into Q2, and we're talking about EUR 26 million of revenue, if we then have some tender business moving into the third quarter that already has a relevant impact on the relative growth rate. So nothing structural. No change in the general market condition. This is a bit of timing, which we will see recovering in the second half of the year.

Underlying core EBITDA set up by 2.2%. If we're looking into the regional split and that we can see again that all regions have improved in their profitability with the good growth that we've been seeing in EMEA, of course, we can also see the strongest impact then on the top line side was reaching 26% in the EMEA region. But all in all, you can see that our efficiency measures are really broad-based across the organization. And that's why we keep seeing this positive margin development basically across the entire organization.

Underlying net income, we're also seeing continued good momentum. And keeping the big picture, top line, we have been growing by 6.7%. EBITDA have been growing by 18%. Now looking into the underlying net income, we're growing at 24%. And that's, again, the typical logic in our P&L. When we're growing strongly on the top line side, this translates into lower proportionate growth on the EBITDA side. And everything which is coming below the EBITDA is pretty stable.

So depreciation is stable. Financing costs have been lower because of the lower debt level that we saw in H1 and also lower interest rates that we've been facing. And then the tax rate has also slightly improved compared to last year. So I want to say if the top line is growing well, if the EBITDA is performing, and this translates nicely into a strong net income development.

Free cash flow, already described, again, not an operative topic, seeing that the cash conversion continues to be strong and improving. If you take the tax effect into consideration, then this normalizes and there's a little bit of working capital effect also in the first half year, specifically on the receivables side, which had been a bit up, but that is more like also now a bit of timing.

So on the specific date of when H1 ended, we see this been bit up, but that is a timing effect, which will normalize also in the second half of the year. So really impact that you need to understand for the free cash flow is the tax effect, and that's what I already explained earlier.

Net debt and leverage, you can nicely see the trend that we have been on now for a long time. In Q2, we see a slight increase towards 2.5 turns, which is driven by the acquisition, but also the dividend payments, which had happened in May. We're expecting for the full year that we are going below 2 turns. And if you recall, that's exactly our capital allocation policy. We always said during the IPO, our target is to go below 2. And despite the large amount of acquisitions and dividend payments that we have been doing this year, we will see that we're continuing to move into our targeted below 2 range.

That brings me to the guidance, which with all the positive developments that we've been seeing in Q2, we decided to narrow. So we are foreseeing on the top line, a 6% to 8% increase in the course of the year. So as you recall, the way we're setting the guidance, we always want to have a good chance to end up in the upper half of the guidance. And that's why looking into the 6% to 8% and also into the narrowing of the guidance, we're actually looking very positively into the second half of the year.

On the EBITDA side, we've raised from beyond 26.5% to beyond 27%. And also to put this into context, last year, we had been arriving at 26%. We've always said for the midterm guidance that we're expecting a 1 percentage point increase per year so that we're now putting the guidance to go beyond 27% is clearly indicating that we are on a good track regarding the EBITDA margin development.

Yes. So to sum it up, I think the second quarter, we saw the growth and improved profitability as we said it would. And as Arne said, we are very positive for the second half of the year. The innovations are coming to the market. So the demand is continuously high. So therefore, we narrowed our guidance, still keeping in mind that we want to be reliable and, of course, deliver to our promises.

And with this, I think we open up the session for questions.

[Operator Instructions] We'll take our first question from Hugo Solvet with BNP Paribas.

Congrats on the [ prelims ]. Just a few, please. On the guide range. So thank you, Arne, for already pointing to the top end of that new 6% to 8% guide. But just want to understand, why you guys put the low end at 6%, which would imply a significant deceleration into H2. What -- in other words, what needs to go wrong here for us to start thinking about the low end?

And second on M&A, EUR 112 million deployed year-to-date, your guide was EUR 40 million to EUR 50 million. Should we assume that you will pause here into H2 and possibly also into 2027, if you can update us on what the funnel for acquisitions look like? And you mentioned Norway being a very attractive market. Can you expand a bit on that?

And lastly, if I may, just in terms of directionally the margin between B2B and B2C. Obviously strong uptake in H1, but can you help us understand if you have also seen an increase in Q1 and in Q2? I'm not sure that we've been provided with the details back in the Q1 interim statement.

Yes. So, I mean, the guidance, so 6% to 8%, as I said in my last words, so we want to promise to -- we want to deliver to our promise. And of course, we would like to end up in the upper half of the range we are giving. So that's why we do not foresee any major hurdles. But I mean, as we said before, so we have to deliver. We have to show that we are reliable, and that's why we picked up the 6% to 8%. If something is clear more towards end of Q3, then of course, we will change the guidance accordingly.

Second question regarding M&A. So we always gave a range. But we also said if there are good opportunities, then this range might exceed. So we do have the financial flexibility that was from the very beginning also important for us to note. So if we can see that there are good targets on the market, then we also would react accordingly. That doesn't mean that now we exceeded our M&A budget and we have to stop.

So we are still looking. And if there are good opportunities on the market, we also would continue. So it doesn't mean that we put it on hold for the second half of this year or maybe even '27. Therefore, everything is fine there. And on margin.

Yes, on the third one, B2B B2C margin, I can share that we are continuing to see the improvement both on the B2B and on the B2C side. So, I mean, along the same logic that we said when B2B is running well, we see typically good mix effect and a bit more scalability on the B2B side. That's why good development on the B2B side. And B2C is continuing to show the step-by-step improvement on the margin side. So from that end, that is well on track and margin improvement is coming from both businesses.

And on what makes Norway attractive market?

What makes Norway -- so the reimbursement system. So you know that normally, our B2C business has a lower EBITDA margin than the B2B business. In this case, the B2C margin is similar to the B2B business. So it's very attractive. And it also -- so this -- the point is there that we have a very good reimbursement in neuro-orthotics. And in the moment, there was no one really covering this area. So now we have the opportunity with acquiring the market leader really to set the standard and grow in the field of neuro-orthotics in Norway.

Our next question comes from Oliver Reinberg with Kepler Chevreux.

Two questions from my side. One on this kind of spike events. Thanks for clarifying. I think you mentioned there was a kind of 1% to 2% contribution from that year-on-year. But I think this is a year-on-year comparison. Can you just give us a flavor like what kind of contribution from Russian Ukrainian sales you now see versus the pre-war baseline, just to get a flavor there.

And can you just talk to -- I think, a large part of this is funded by Europe. Is there any kind of development? And also, I think you mentioned or it sounded like there's upside to this scenario. I mean, so far, you have not incorporated any kind of more spike events into your guidance. But now we are seeing some contributions coming in. Have you now incorporated with the kind of top line change or not yet? That would be question number one.

And secondly, also on the Norway deal, it looks still like a reasonably full price for the assets. Can you just give us a bit of flavor when you expect to earn your cost of capital on this kind of acquisition and whether we should expect any kind of similar deals going forward of that kind of magnitude?

Okay. So I would take the spike topic. So I mean, the pre-war and now very difficult to assess. So we didn't have an infrastructure in Ukraine at all. So therefore -- and it was a relatively small market for us, we have to admit. So therefore, here, we definitely have seen a major uplift, but from a very low base. So we normally do not provide any market details, but here, we have seen quite a huge impact.

On the Russian side, so we were there already. We had quite a valid business there. And I think we are growing there with the reimbursement in the civilian market. So I think the overall information, which is important to note is that basically nothing has changed in Russia in terms of market participants' competition. So everybody who was there before is still there. But also in Russia, the reimbursement grew which doesn't mean necessarily that a lot of new patients are served in the civilian sector, but the level of reimbursement per patient grew quite significantly. So this we have seen.

So there's an upselling effect more than a quantitative effect. We said already several times, so we are not taking part in any military tender or whatever. So this is more a part which is closed for foreign companies. So it's more served by Russian companies. And therefore, for us, we do not see really more and more of this spike impact in Russia, while we do see it in Ukraine. So there definitely, we have this increased patient base.

So to give you maybe an overview, so we had a pre-war quantity of 8,000 to 10,000 prosthetic fittings per year. And we have now -- since the beginning of the war, we have roughly 150,000 new amputees, so additional to the pre-war number. And you're right, in the moment, due to infrastructure constraints, they are not all yet fitted. So if we're talking about 4 or 4.5 years now time period, there is quite a backlog plus additional now we are coming into the refitting phase. It means besides those who are not fitted yet, the ones who were fitted in the very early stage of the war, they already due to a new fitting. So there, we do expect a further acceleration and yes, even increasingly as long as the war continues.

And Norway?

Norway, happy to talk a bit about it. So first of all, the mechanics of the Norway deal. First of all, it's a strategic deal. As Oliver said, was a white spot on the landscape where we have not been present. So following our invest in the best strategy and looking for the market-leading players in order to further evolve on our integrated B2B and B2C business, I think this is a deal which is really spot on and where we've been looking for a longer time. So it's clearly following a strategic rationale.

Regarding the financial parameters, I would consider it to be a good deal. You need to understand that the stand-alone margin of the Patient Care business in Norway is already very high. It's probably the highest that we have in the network and it's the highest that we have in the network. And then you need to understand that the pre-owner has been Blatchford. So you can understand that they have penetrated the products into the channel. So we see a good opportunity to bring our high-margin products better into the market and keep that share up.

And as Oliver said, this whole field of neuro-orthotics, which is the clear future growth field for us and where reimbursement has been established also for the high-end solutions, that is a completely, I would always say, untapped field that we can now penetrate into Norway. So it has a lot of good parameters on the profitability of the business and the synergies and upsides associated to it.

And regarding the capital cost, we clearly will be earning our capital cost with that deal. So if you take the, I don't know, 8.5%, 9% of WACC, and we're clearly expecting that we're going beyond the capital cost. So it's a strategic sound deal and will give us a good upside on the top line, but also on the margin side, B2B and B2C, and it will also earn its capital cost.

Our next question comes from Anna Ractliffe with Bank of America.

I wanted to dig in a bit on Americas. I appreciate the commentary on LatAm and Canada, but on the 4% organic growth in the U.S. it may be a bit below expectations. Is there anything to flag on the U.S. MPK K2 reimbursement? Is that still a meaningful tailwind for 2026? And how do you see U.S. growth playing out through the balance of the year?

And then just on the margin guidance raise, how much of that is favorable mix through just an increasing number of MPKs being sold versus an improvement in cost savings and different initiatives? And what do you expect for inflation through the second half of the year?

So yes, regarding the U.S. business, -- so no, we do not see any headwinds in terms of penetration of the K2 population and others. But you have to keep in mind, we had last year mid-double digit or even high teens growth in the U.S. market. So it means we are growing this year from a very high base. And that's something what we, of course, always have to keep in mind. The penetration of the K2 population is continuing. We do see still roughly 20% growth rate in this area.

But we do have in other areas, of course, a lower growth rate because there the penetration is already on a different level. So nothing structural. So -- and we also do believe that in the second half of the year, we will see a little bit more momentum because we have seen the fourth quarter last year was a little bit slower than the first 3 quarters. So, therefore, we do expect also here to see a steady uplift on the organic growth rate. Margin?

Regarding the margin -- so you can see year-to-date, we are up 2.2%. And then also in the guidance, we're reflecting that we're expecting in the second half of the year that there will be a good margin development. And the effects are, yes, there's a bit of a margin impact, and there's an impact on efficiency gains, but you also need to keep the scale effect in mind. I keep repeating that.

And if we're growing beyond 5%, I typically assume a normal year cost growth is around 4% to 5%, 2%, 3% of inflation. And then as a growth company, a bit of investment into the company. So we are growing beyond the 5%, that typically brings us into a good scaling opportunity because again the global fixed costs are pretty set. And then if we're growing with the high-end components, that gives us a good scale effect.

So if I say how does that split, I think there will be a bit of margin upside in the overall year. And then scale and mix -- scale and efficiency is probably 50-50 on the drivers of the margin improvement. So scale, if I'm looking into the 2.2%, then I would say that is 1% on the efficiency side and then a bit of additional mix effect that we're seeing.

And then sorry, on inflation in the second half of the year. We've been just running through our forecasting, I have to say we're not expecting a larger impact of inflation in the second half of the year. So oil price development, we did the calculation, how is that running through into our material cost, and that is pretty minor and so we're expecting maximum EUR 2 million to EUR 3 million of an impact. So that's negligible.

And then also on the other supply side, we're not seeing a lot of a push at the moment. So from that end, we expect a normal inflation for this year and no impact on the margin side.

Our next question comes from Falko Friedrichs with Deutsche Bank.

I have 2 questions, please. The first one, could you provide a little bit more color again on the strong 12% organic growth in the B2B business? With respect to which products have been driving this the most? And would that be a good indication for what you might deliver in the second half as well of this year?

And then my second question, and sorry if I missed that on the B2C business, which you mentioned was a tad softer in Q2. Do you expect that to recover now in the third or fourth quarter? I saw the comps are not too easy, but is there still the potential that this bounces back in the second half?

Yes. So regarding the B2B growth, so it's actually, I mean, across the products. So we do see still a strong growth in our high-end products. So in the mechatronic area of prosthetics and neuro-orthotics, but we also do see over market growth -- yes, so over market growth rate in feet and liner. So we launched also some new mechanical knee joints, which are picking up very nicely.

So it's actually a broad range of products, which are fueling the growth. We have in the upper limb prosthetic field, we launched Michelangelo hand, we can see quite a good growth momentum. So it's not specific 1 or 2 products. So it's actually on a broader range, which is for us, of course, also a very good indicator for the future. So it's more sustainable.

On the B2C side, so as we mentioned, so it is coming more from timing effects of emerging markets. We always have in emerging markets or in some markets, we have periods where tenders are on hold or they are a little bit delayed. And that is actually happening this year or it happened in the second quarter. So one of the markets, Australia, but especially in Latin America, we have seen here a bigger impact in the second quarter.

But as mentioned before, we do expect that this is only timing. So it means in the third and then also in the fourth quarter, this will resolve. The core markets or the most important markets where we have a stable reimbursement system in North America and Western Europe, we are actually on track.

[Operator Instructions] Our next question comes from Beatrice Fairbairn with Berenberg.

I just had a couple on the kind of growth side of things. So firstly, could you specify how much of the B2B growth was impacted by these kind of special or timing effects that you just mentioned? And then just to clarify on the kind of spike event impact, you mentioned it's about 1 percentage point. What is your kind of expectation for the remainder of the year? And how much is factored into guidance? Apologies if I missed this earlier. And then finally, how much of an impact was FX on the gross margin in Q2? Would you be able to specify that?

So if I got the first point right, B2B and timing effect. So in the B2B business, there were not too many timing effects. So there was something in the end of the first quarter with the war in the Middle East, we had some deliveries delayed, but this was all realized then in the second quarter. So therefore, in the B2B side, we are actually more or less on track. So the timing effect was on the B2C side. I just saw the [ profile ] asking now. I hope I explained it so that this will be resolved in the third and fourth quarter.

Regarding the spike topic, so Arne mentioned it. So -- it's on the EMEA growth. So we're talking about 1% to 2% of the 9%. So 1% to 2% are affected by spike events. But as I also mentioned, so this effect is getting smaller and smaller. So as more the Ukraine is fitting their patients, this spike event will be slow because the refitting cycles they are then already considered normal fitting.

So it's not very often not done anymore by the military because people are retiring from military. So there are civilians. They still have the status of veterans, but they are civilians. So they are moving into the normal reimbursement. And therefore, that's already for our industry. So this is a normal course of business. So that's what we mentioned before. So we are talking about an increased patient base, which stays now for the next decade in the system. Therefore, this spike impact, you will see decreasing over the time.

And FX impact on margin -- on gross margin, I think you asked right? It's probably low, it's minus 0.1%.

This concludes the Q&A session. I will now hand back over to Oliver Sobi, CEO, for closing remarks.

Okay. So yes, then thanks a lot for taking part in the call. And I mean, you can not see, but you can hear us. So the management is satisfied with the first half of the year and optimistic for the second half of the year. So I hope we answered all your questions. And yes, we're looking forward for the next call after the third quarter. Thanks a lot.

This concludes today's call. Thank you, everyone, for joining. You may now disconnect.

Good afternoon, ladies and gentlemen, and a very warm welcome to Ottobock's conference call on the preliminary financial results 2025. Today's speakers are Oliver Jakobi, CEO; and Dr. Arne Kreitz, CFO of Ottobock. Before we start the presentation, please note that this webcast will be recorded. [Operator Instructions] And with that, I want to hand over to you, Oliver. Please go ahead.

Thank you, Julian, and welcome also from my side to our results 2025 and the outlook. So we're looking back to a very successful fiscal year in 2025. The results are fully in line with our financial guidance, which we gave after the 9 months report in November. So we grew double digit on the top line. We outperformed the market. So that means we were again able to gain more market share with 11.7% or 10.6% organically, we were growing double as fast as the market. The reasons for these are manyfold. So our innovation, our reimbursement coverage, our customer focus and orientation are one reason for this.

But what is even more important for us, we grew also very profitable. So we could realize significant scale effects. And yes, saw an increase in our EBITDA by 30%, a margin step up by 3.6% to 26%. This is the reason of our successful implemented growth strategy, where we do see a lot of margin uplift through favorable product mix, but keeping costs under control through our production and operation initiatives, but also shared service initiatives.

So besides this, we also extended our innovation leadership, besides new products, very advanced and high-margin products. We also managed to add more technology on through additional M&A. Our outlook or projection is deliberately prudent. So we are looking for 2026 to organic growth of 5% to 8%, and we are looking to increase the EBITDA margin above 26.5%. For the midterm guidance, we do see all the market relevant trends and also our strategy well in place. So nothing has changed. That's why we are confirming our midterm guidance of an average sales growth of 7% to 9% per year and an EBITDA margin of 29% to 30% in 2029.

Here, the financial KPIs at a glance. So we grew 11.7% on the top line to EUR 1.6 million. So that reflects a 10.6% organic growth. Our underlying EBITDA went from EUR 320 million to EUR 415 million, so EUR 95 million increase of our EBITDA, which means 3.6% from 22.4% to 26% margin.

And our cash flow, we managed to increase by 23%, 24% to EUR 228 million despite one-off costs, which were IPO related. Coming to the top line, we are very proud to say that in all regions, we managed to outgrow the market. So in EMEA, we grew 12.7% or 9.5% organically, ending with sales of EUR 1.15 billion, mainly driven by new product innovation by reimbursement coverage, but also emerging markets stepped up and spike events happened.

In the Americas, we managed to grow by 9.5% or 14% organically to EUR 346 million. Also here, innovation products, but also especially in the U.S., we had a reimbursement expansion for a lot of high-end products.

APAC, as mentioned, so 4.7% or 11.7% organically.

So despite the unfavorable FX headwind, we grew to EUR 104 million. So here, in APAC, we had besides also the request towards high-end products. We saw that Australia, Japan were moving forward, but also the emerging markets, especially India contributed to the growth. In our categories, so the B2B business where we report our components and our B2C business, where we have the patient care allocated, we see that in both areas, we grew, especially strong in the B2B area.

So here also innovation, reimbursement coverage, our evidence-based approach that we can show that with our high-end solutions, we are able to reduce health care costs is paying off more and more. On the patient care side, we have seen very good performance in the U.S. with double-digit growth there.

Also here, we finished now our integration efforts. So we are now focusing on growth and efficiency gains. With this, I would hand over to Arne. He will talk about the profitability.

Thank you, Oliver. Yes. On the profitability side, we are seeing a step-up in 2025. If you're looking into the absolute numbers, we've been growing from EUR 320 million to EUR 415 million. So that's an increase of EUR 95 million and in relative terms, almost 30% of an increase, which is significant.

And this is also reflected in the very significant increase on the profitability side with 3.6 percentage points increase to 26%. The reasons behind are, as described in our previous calls, we're seeing very nice mix effects from the scale-up of the high-end components that driving at a higher gross margin and relative in absolute terms, and that is falling through down to the EBITDA. We're seeing very nice scale-up effects, specifically on the B2B side.

We are making use of the very high organic growth. in comparison to our established infrastructure. This is the scale-up effects that we're seeing. And we are seeing also progress on the efficiency initiatives that we've been driving. Bulgaria, low-cost manufacturing and the shared service are some examples of it, but we have a full program that we're executing with discipline.

And that's why very positive momentum on the underlying core EBITDA side. This is reflecting through into our free cash flow. On the free cash flow side, we are also seeing a steep increase from EUR 184 million to EUR 228 million. And Oliver said it already, we need to be aware of that the 2025 number still includes the IPO costs, which are at around EUR 30 million cash effective last year.

So if we would normalize for that, then we would be looking at an even almost 40% increase in the course of 2025. And that's very important to understand that the general logic of our P&L, strong growth on the top line side, translating in an overproportionate growth on the EBITDA side and an overproportionate growth on the free cash flow side. This is what we're exactly seeing in 2025. So very, very positive development.

And that reflects also into our net debt and the related leverage. We're seeing that the net debt level has been coming down in absolute terms. So we're now looking at a net debt level of EUR 960 million at the end of 2025. And we can very nicely see how the leverage is coming down.

You see the trend over the last quarters. You see the performance throughout 2025, which is really the combination of the lower net debt level, but also the significantly improved EBITDA level. So all in all, a very positive trend. We have been guiding for below 2.5 turns. We now reached 2.3 turns. And from that sense, very positive development.

And before we're now moving over into the outlook and a bit what we're expecting on the innovation pipeline for next year, let's really recap on the strong performance of 2025. Very strong on the top line side, 10.6% organic growth reflected into the EBITDA, 26% reach. That's at the upper end of the guidance that we've been given. Very strong cash flow performance and that all reflected also in this net leverage and net leverage improvement that we're seeing on this slide.

Now before we are specifically looking into the guidance for 2026, we would like to give you a bit of an outlook on the innovations that we're expecting for next year because that's a very important context and also for the guidance that we're giving.

And before we're now talking about the individual innovations, let me highlight that a lot of those innovations will be launching midyear because we have OTWorld Messe Leipzig, that's the most important fair in our industry happening every 2 years towards the mid of the year. And what we are typically doing is that we're really launching the key innovations on that event.

So a lot of the topics that you'll be seeing here will be coming more towards the second half of the year, and then we'll be developing full impact, basically '27 plus. So starting on the prosthetic side, we see the NPK portfolio continuing to be an important growth driver. We have been launching the X4 in Q4 2024 and have been seeing a very nice run-up in 2025.

So the first year of the run-up is through, but we will be seeing continuous growth on the X4 side as this is the general logic of our business. Kenevo, the reimbursement on the U.S. side, we've been seeing good momentum in 2025. We think we're standing at around 1/3 of the penetration of the opportunity. So there's more opportunity to come also in 2026. We'll be newly launching product updates on the mechanical knee side, portfolio where we haven't been bringing updates for a longer period. So from that end, that will also be a good new speaking point. And we'll be launching a completely new Liner Family.

Special thing about those liners is that they are custom-made. We're using a new silicon printing technology, where we're really hopeful that this will be a strong push for the Liner segment.

We'll be starting to launch, as I said, in the second half of the year. Then on the right side of the slide, we're looking into our Upper limb portfolio. As you recall, maybe from our Q3 call, we have been launching next generation of an upper limp platform, which is a real game changer because with that platform, you can combine different terminal devices to the same connection to the human body so that the user is much more empowered to use this hand and also to switch to different devices.

We have been launching Speedhand as a first terminal device, and we'll be seeing as a more functional device, the Michelangelo solution. So also this will be a very good speaking point to come into the market.

On the field of NeuroOrthotics, we have 2 key categories where we're putting the emphasis on. The first one is the C-Brace family and an expansion of the C-Brace family. We are launching a product called C-Brace Interim so that the first fitting of a C-Brace can already be happening during the rehab phase, very important.

At the moment, we're losing some patients because they're getting trained on how to use the wheelchair instead of getting trained how to get back on their feet. And we think that with the C-Brace interim, we'll be catching much more patients in comparison to what we've been seeing before.

Secondly, on that family, we'll be launching a completely new mechatronic system. How that is positioned from a functionality point and price point of view, we'll be elaborating during the launch. But importantly, to note the way how we've been developing the mechatronic knee portfolio, starting with a C-leg and then moving into Genium and KENEVO.

That's what we're seeing now on the C-Brace side. We started with the C-Brace. We're expanding the C-Brace with the C-Brace interim, and we're opening up a completely new platform to get even broader into the patient base. Another good speaking point will be the Exopulse 9.5.

So you might recall, we have been doing an acquisition. So this is not a self-developed product. It has been acquisition of a smaller Swedish product company.

We now put a lot of effort into developing the next generation, the 9.5 generation and are also using it for running our clinical studies.

So also that we'll be launching now in the private pay market for 2026 will be a good speaking point. First reimbursements, as communicated before, we are expecting towards 2027 and 2028. On the digital O&P front, also a lot of innovation happening, not that tangible as on the product side, but a real step forward on the working processes happening in a patient care facility.

It's a full workflow management tool where new functionalities are built in. We have a completely new software around custom fabrication and CADKits. So the morphing of the device to the human body. It's much more AI enabled so that the labor time of the CPO is further reduced.

We've also been including now smart documentation, which is AI-supported documentation of the applications towards the reimbursement system. So at the moment, a lot of helping hands are needed to write all those applications. Now we have a software tool, which will do this in a much more automated manner.

So also a very good lever that we're pulling into the day-to-day routines within the patient care facility. Last but not least, on the Bionic Exoskeletons side, we will be launched -- or we have just launched the active version of the exoskeletons. So we are coming from passive versions are now arriving at much more functional, some motorized versions, and that will also be a new speaking point that we are trying to penetrate into the market.

So why are we saying all that? Because we feel we have a very rich pipeline of innovations to come. But as said at the beginning, we're expecting that they will be gaining ground starting in the second half as the launch date is basically more towards the second half of the year. And that is also important to understand a bit the guidance that we've been given.

What we would like to convey is that we are very satisfied with the performance that we've been seeing in 2026. And we don't see any reasons to change our midterm guidance.

So the 7% to 9% growth and the 29% to 30% are fully consistent to what we've been communicating during the IPO and also during our Q3 update. Now in relation to 2026, we have decided to be deliberately a bit more prudent. So we are guiding for 5% to 8% of organic growth rate and a further expansion of the profitability to more than 26.5%.

Now let me emphasize a little bit the thoughts behind the 5% to 8%. First of all, we had a very strong year 2025 with a ramp-up, with the first full year ramp-up of some key technologies like the X4 and the Kenevo for the K2 population in the U.S.

We will be seeing continuous growth on that basis, but the first year is always a strong year that we're seeing post launch. We are also expecting that new growth and Pulses from the innovations that we have in our pipeline will only be coming more towards the second half of the year and then have positive impact on the next years to come.

And we have not been putting in extraordinary effects in relation to spike events. On spike events, we've been assuming that there will be a continuous development as a normal growth rate within the markets, but we have not been considering exceptional impacts because -- and this is also very consistent in what we've been communicating up until now.

We don't want to give a guidance on events which are just difficult to predict. That's why, all in all, from our point of view, it's a conservative way to look into the guidance for 2026. But we also want to convince by being reliable and by being able to meet our guidance. And in that light, the guidance for 2026 is to be seen.

And with that, we are opening the round for questions.

[Operator Instructions] Our first question comes from Richard Felton at Goldman Sachs.

Hope you can hear me. First of all, thank you very much for providing a bit more context around the 2026 guidance, especially on the timing of innovation, that was very helpful. But to maybe sort of push you a little bit more on that. I mean, could you quantify how much benefit you expect to see from those innovation launches into the second half of the year?

And then any color on the phasing of growth through 2026? And then I suppose following on from that, is it that innovation piece that gives you the confidence to reiterate the 7% to 9% medium-term growth outlook? That's the first question.

And then second one, just hopefully quite quick one. Obviously, your guidance has been provided in terms of organic growth rates. Could you also let us know what you're expecting in terms of FX impact for 2026?

Yes. So on the second -- on the impact of the innovations to the second half, you need to understand that we're typically introducing those innovations and technologies on the fair and then the launch is happening throughout the second half of the year.

So that doesn't mean that on that day, everything is launching up, but it's coming within the next 2, 3, 4 months in the second half of the year.

And regionally staggered, yes.

Regionally staggered.

It's not that we immediately can launch globally because we have to prepare the market. We have to train to certify the specialists. So therefore, there's always a kind of delay.

And that's also the reason why there will be first impacts in the second half, but the main impacts are to come in the next years. And that's why also if you compare to our internal strategic plan, it has always been that phasing that we had in mind. And that's why we're also confident that the midterm guidance with the 7% to 9% is fully intact because nothing structural has changed.

It's basically following the innovation pipeline that we have in front of us. Now regarding your second question on FX assumptions. So we have been assuming -- so the dollar is the key exposure that we have. We have been assuming a 1.18 exchange rate and are overall seeing comparably low impacts due to the hedging that we have.

So the comparison to 2024 to 2025 is that we have a negative impact of around EUR 3 million on the EBITDA side if we're assuming those 1.18 FX rates.

Our next question comes from Angela Bozinovic at BNP Paribas.

The first one, also on guidance. Can you give us a little bit more details on what we can expect on B2B versus B2C throughout the year? And maybe the second one on the spike events.

Can you quantify what was the impact of spike events in Q4? And just roughly what is currently embedded in your guidance, especially for the Russia-Ukraine conflict?

So on the Russia-Ukraine conflict, I mean, as said, we don't want to give guidance actually on individual spike events. We're looking at it in total, so also for the next calls to come. But you're right, Russia, Ukraine is the main impacting factor.

As we are looking into the last year, we have had an impact of around 2.5 to 3 percentage points on the growth rate. It's not always one-on-one to be captured because there's always underlying growth also in those markets.

And then there's also the adjacent markets a bit around with some of the treatments are happening. But we're assuming 2.5 to 3 percentage points for the 2025 number. And as I said, for 2026, we have not taken into consideration larger upsides in terms of spike events.

What was the second question? Could you repeat, please? That will be helpful.

Yes, sorry. So the second question is just on your guidance, if you can provide some details on what we can expect from B2B and B2C growth.

Yes, we're not breaking down the guidance into B2B and B2C, but the general logic that we provided is fully intact. We think that on the B2C side, the market is growing by 5%. We are expecting to grow with the market or above.

And then on the B2B side, as I said, a bit more conservative now due to the factors that I elaborated, but still stronger growth than in relation to the B2C side.

Our next question comes from Graham Doyle at UBS.

Just 2 for me. Firstly, just on the guidance for 2026. So you've got the 5% to 8%, which obviously seems quite low relative to what you've been delivering and probably what I think the business should sustain. What are you assuming in order to get to 5%?

I mean how -- it seems pretty unrealistic, but maybe you could just let us know how conservative the 5% is as a starting point.

And then I know it's a bit tricky to comment on phasing, but maybe just a little bit of color as to what sort of level you think you can kind of exit or deliver towards the second half of the year?

Because, again, it feels like maybe you're exiting towards the upper end or better than your 7% to 9% midterm rate. Just to understand, like are we just in a little funky air pocket in H1? Just to get a better sense of that and to what level of conservatism is baked in?

Yes. So 5% to 8%. So I mean, as I said, we wanted to be conservative on the guidance, and that also means we don't want to miss the guidance in our first year -- first full year being on the public market.

That's why I think I elaborated on our thinking process that the last year has been a strong year. A lot of the innovations will be more towards the second half of the year and then getting full impact really in the years to come.

That's why it's probably on the conservative side, but we just wanted to be a reliable partner to the capital market, put it that way. And then the phasing we'll still be following basically our normal phasing because, as I said, the launches of those new products will be happening in the course of the second half of the year, and it will be staggered throughout the geographies.

So that's why I would be assuming much more of an impact to come in the year 2027 and ahead. And I would say there's a real structural shift in the patterns that we'll be seeing in 2026.

Graham we want to earn your trust, yes. So that's why we will narrow our guidance later. And maybe we also will -- after Q1, we will talk again. But for us, it was important really the first reports, we want to deliver to our promises, very important for us. Therefore, yes, we widened a little bit the guidance and started with 5%.

Maybe just a quick follow-up then on that, which is it makes complete sense. The bottom end of the range, so the 5% for me, when I look at like what you've described in the past and my model and even your exit rate, it kind of implies very -- like basically a bit of price growth and a tiny bit of volume growth and no real mix growth. So is that -- am I being sensible when I think of that's how conservative the bottom end is?

I think that's a fair assumption. So on the volume side, I said it was a strong year 2025. That's why a bit more conservative. What we're not really seeing is on the pricing side, any structural changes or shifts which would make us worry. So from that end, I agree to your description.

I completely appreciate it. And based on what you delivered sort of what you said, it does sound like you're taking a very, very prudent approach to guidance. And as you say, we'll have another look at the Q1.

Our next question comes from Falko Friedrichs at Deutsche Bank.

First of all, we appreciate the way you're setting guidance. We think that is the absolutely right way to do it. My first question is on the first quarter. Is there anything we should keep in mind in terms of the moving parts, either positive or negative when we model the first quarter of your fiscal year?

And then second question is, is there anything in terms of M&A that could be on the agenda for this year over and above acquiring more clinics?

So on the timing, I would say, in general, we have pretty stable patterns with everything that I said on the impact on innovations this year, I would say you can assume a normal Q1 in relation to our full year guidance. And the second question is on the M&A side. We always have a well-filled pipeline of M&A opportunities. I think what we are going to see this year is, again, a good mix of product and technology, acquisitions and investments and also patient care expansions of our network.

But I would say, all in all, it's in line with what you've been seeing over the last years where we've also been having a pretty stable pattern. So it will be having an M&A opportunity also this year with a good mix between B2B and B2C.

Our next question comes from Anna Ractliffe at Bank of America.

Hope you can hear me okay. I just wanted to pick apart maybe a little bit more the EBITDA margin guidance. I appreciate the color you gave us on the areas of conservatism on the top line, but maybe we could also get that same color on the profitability guidance.

Where have you been conservative? And how much of the 50 bps margin expansion is drop-through from increasing price? And how much of that is savings from moving out of Salt Lake City?

A very good point to specifically look also on the EBITDA side because what you can see is that we're guiding for another improvement on the profitability side of more than 26.5% are confirming the 29% to 30% for 2029. And the EBITDA margin is to be seen, as always, as a combination of how mix and scale-up effects are developing and the efficiencies that we're gaining.

Now as we've been a bit more conservative on the top line side, that, of course, then also has implications on the EBITDA side. But on the EBITDA side, we're very confident on the efficiencies that we're gaining through all the initiatives of low-cost manufacturing and Bulgaria shared services in Bulgaria and so on.

So from that end, I would say that there is a correspondence of the top line guidance and the bottom line guidance. And what's basically included in the bottom line is those tangible efficiencies that we are expecting to gain in the course of 2026.

This concludes the Q&A session. I will now hand back to Oliver Jakobi for closing remarks.

Yes. Then from my side, thank you for your interest. Thank you for the questions. And looking forward to seeing you again at the Q1 presentations and maybe also during the year on one of our road shows. Thanks a lot. Bye.

Good morning, and a warm welcome to today's conference call of Ottobock SE & Co. KGaA, following the publication of the financial figures for the first 9 months 2025. The CEO, Oliver Jakobi; and the CFO, Dr. Arne Kreitz, will speak in a moment and will guide you through the presentation and the results.

After the presentation, we will move on to the Q&A session. [Operator Instructions] We are looking forward to the presentation. And with this, I hand over to Oliver Jakobi.

Yes. Good morning also from our side. So we are here sitting in Duderstadt, in the headquarter. And I'm happy to present our first 9 months update. Yes, we are looking back to a very successful 9 months in 2025 and with all our strategic core initiatives on track, product launches and several acquisitions took place and are kicking off.

The strong core revenue growth continued in Q3 and leading to a year-to-date growth of 13.6%, respectively, 11.5% organic growth. This strong sales performance is reflected also in our profitability. So we have a substantial improvement of 3 percentage points in the underlying core EBITDA. That means a margin expansion to 24.3%. This all leads to our guidance for 2025, which is narrowed to the upper half of 9% to 12%, a core underlying EBITDA margin of 25% to 26%, which is confirmed.

At a glance, our numbers. So the core revenue is EUR 1.158 billion, 13.6% growth. Underlying EBITDA of EUR 281 million and the EBITDA margin of 24.3% and also a very positive free cash flow development, a growth of 55%.

In 2025, we launched several new products. So we have in the upper limb field, we launched a new platform with a new control system, MyoPlus and terminal device platform, which allows all our upper limb products to be combinable with each other and switch. So this is something we were looking forward very much, and this was launched mid of the year, and we do see quite a good track on this new technology.

In the lower limb prosthetic field, we launched the Taleo Adapt, which is a hydraulic ankle system, especially designed for certain markets. First of all, the U.S. market where certain reimbursement is in place. And also here, we have a lot of traction. Overall, we can see that especially in the foot segment, we are growing over market. So with 20% year-to-date growth rate, meaning we are gaining market share there.

In the neuro-orthotic field, we have the C-Brace Interim launched, which means we are coming closer to the rehabilitation phase. We're coming closer to hospitals. That also means it's a higher conversion rate from people suffering from incomplete spinal cord injuries or stroke patients, which normally during the rehabilitation phase, very often put in a wheelchair. So we have now the chance to mobilize them from day 1, which gives us access to a much bigger patient pool.

The New Exopulse Suit generation, 9.5 is just launched now. So we are now busy with sending out the new fit kits. There's an improved operational function. So we can install it better, more per individual to certain patient groups. And also here, we do see -- we do expect access to larger patient population.

On the exoskeleton side, so we came out with the first powered exoskeleton and which is very well accepted. So we sold the first experience packages already to our key customers and had a very positive feedback from the market side.

Ongoing, of course, there are always product refinements, there are product updates. This is something what we are continuously doing and will continue also in the future.

On the M&A side, so we invested in 2 technologies. So Romedis, it's a technology especially designed for markets where we do have a lot of skilled labor. So very often either emerging markets or markets where an extraordinary volume has to be handled with existing infrastructure. So it enables CPOs or clinicians relatively fast and easy with a guaranteed quality outcome to fit patients with lower limb prosthetics.

Ortho Access is a technology in France, which has a certain reimbursement code. So also here, it's a new technology for lower limb prosthetics, how they are fitted to the patient.

On the B2C side, we managed to get 2 acquisitions completed, one in Belgium with MATTON and one in Australia, Northern Prosthetics, both were very good strategic fits regionally wise, but also from the portfolio which we are serving.

And our venture investments, ONWARD Medical, we -- it was in October, but already done. We increased our stake in ONWARD Medical. Then we have Musclemetrix and BionicSkins. These are 2 spin-offs of MIT and Phantom Neuro, an Austin-based company. All these venture investments are in new technologies. So we are working towards the human-machine interface and having here now several options in order to be here frontrunner in new technologies.

On the noncore portfolio, so we divested already last year A4 Access, a DME business, Cascade Orthopedic Supply, it's a distribution business in the U.S. and Active Life, California-based patient care entity. Where we are still ongoing is our Human Mobility business or the wheelchair business. We are in negotiations, ongoing negotiations with certain candidates.

And next year, we also will go further. It's a smaller part of our business, the Ottobock Orthopedic Service, the billing service in the U.S., which we also will divest. So that's so far from the business highlights.

I would now hand over to Arne Kreitz for the financial update.

Thank you, Oliver. Yes, I would like to guide us now through a little bit more in detail through the financials. And Oliver already gave us an overview on the key financials. Just a quick recap. So very strong growth on the core revenue side with all in 13.5%, which is driven by 11.5% organic growth rate.

Then we have 3% impact from M&A activities, negative 0.9% from FX impacts, so that's the bridge from the 11.5% to 13.6%. Underlying core EBITDA, we are looking into an increase of 3 percentage points in the profitability in absolute terms, EUR 64 million additional EBITDA compared to last year. So very strong improvement in performance.

And we are also seeing a very strong free cash flow performance. So an absolute increase of EUR 61 million. In relative terms, 55% of an increase. So that means strong performance on the EBITDA side is also translating into cash. I come to that in more detail on the next slides.

Going deeper into the revenue side, breaking the revenue into our segments across the regions. On the EMEA side, we're looking at an organic growth rate of 9.7%, very consistent development also compared to last year. And the drivers are, as already discussed for the half year financials, it's the innovations penetrating into the markets. It's new reimbursements that we have achieved like C-Brace reimbursement in France, and we are seeing continued impact of spike events.

For example, Ukraine volumes we see are picking up. And that's why EMEA is our largest region. It's an absolute contribution of EUR 97 million in additional revenue, and that's all reflected in the 9.7% organic growth rate.

Americas, very strong pickup, and we're looking into 16% of organic growth rate, driven by strong performance on the B2B side. Again, innovations getting into the market, new reimbursements achieved on the Kenevo side, we're seeing volumes doubling on that end.

And we are also seeing a strong catch-up on the patient care side in the U.S. As you might recall, we had a bit of a slower start at the beginning of the year. And have been -- given the outlook that we're expecting a catch-up in the course of the year, and we have been clearly seeing that in the third quarter with a growth rate, which is, I think, in the area of 25%. So very strong catch-up on the patient care side, and that all leads to a 16% organic growth rate in Americas.

Same picture in APAC, we're looking at 16.5% organic growth driven by innovations getting into the developed markets like Australia and Japan, also positive development on the reimbursement side in those 2 markets. But we're also seeing catch-up and a buildup really of markets in the emerging markets.

India is continuing to have a strong performance and that all reflects into the 16.5%. So consistent strong growth across the regions. It's not the one driver. It's not the one market, very consistent across the markets.

Looking into the revenue split across the B2B and B2C business. We are seeing strong performance on the B2B side with 17.1% organic growth. That's consistent throughout the year. I repeat myself, driven by innovations getting into the markets. X4 is penetrating really well, but also the new reimbursements like K2 reimbursement in the U.S. market, C-Brace reimbursement in the U.S. market is continuing to be strong. France, we see first impacts of C-Brace reimbursement, Japan also. So very, very strong growth on the B2B side. And on the B2C side, we're looking into 4.7% [indiscernible] growth. And here, I'd like to recap that at the mid of the year, we've been standing at 2.9% of organic growth rate on the Patient Care side.

So you can see that Q3 has across Patient Care been very strong. And it's also consistent to what we have been given as an explanation, slower start to the year, but we're expecting positive momentum throughout the year, and that's what we're seeing on the Patient Care side.

Underlying core EBITDA in more detail, really the overview, we're looking into 24.3% overall profitability. What you can see across the regions is that we're seeing a nice catch-up of profitability across markets. And you can also see that the profitability has become much more consistent throughout the markets. So we're looking into 24.4% in EMEA, 23.5% in Americas, 25.7% in APAC.

So also here, we had given you the outlook that we're expecting that profitabilities will normalize across markets as also America is really catching up on the B2B side, but also on the Patient Care side. And that's reflected in this consistent picture across the regional profitability.

Underlying drivers are also consistent throughout the year. We're looking into a strong gross profit development, which is driven by mix effects. As higher components are driving the sales, they are higher in the relative gross margin. And that's why that is cutting through. We are seeing an underproportionate growth on the material cost side, so also contributing to a better gross margin. And we're seeing scale-up effects basically throughout the entire organization.

This high growth, specifically on the B2B side, leads to scale-up effects, which we are seeing on personnel cost side, on the OpEx side, and that is driving profitability.

And last but not least, we're also continuing to see that the efficiency measures that we're driving are giving us benefits. Shared services in Bulgaria, and we're continuing to ramp up. Our manufacturing site in Bulgaria, and we're continuing to ramp up and that continuously is also benefiting on the profitability side.

Adjusted net income, also very positive. You might have seen that on the underlying core EBITDA side, we are looking at an absolute increase of EUR 64 million. And those EUR 64 million are more or less translating into additional adjusted net income. So additional adjusted net income in absolute terms is EUR 53 million. So that means the key driver is really the additional EBITDA that we're generating. And we're seeing benefits on the interest side.

So the lower net debt levels in combination with lowering interest rates are having positive benefits while we are looking at slightly higher tax payments because of the better performance of the business. But all in all, if I'm looking into how the EBITDA result is cutting through into the net income, we are looking into a very good translation.

One word on the adjustments, just as a recap, key adjustment items are really the cost of the IPO, which is a special item for this year and the management participation program, which kind of runs until the IPO. So that is an effect which is sizable.

And then the second impact is the impairment of EUR 31 million on our Human Mobility business. You might recall, we've been putting it as an asset held for sale in year 2025, and that's why that had an implication of an impairment of EUR 31 million. It's not new, but those 2 effects are the key drivers of the difference between adjusted net income and the final net income.

Cash flow, very strong. We're looking into an operating cash flow improvement of EUR 72 million. So even stronger than what we've been seeing on the EBITDA side. That's driven by the fact that in the EBITDA, there are some provisions included. The higher sales are leading to higher warranty provisions. We partly have higher bonus provisions because of the better performance of the business than planned in the budget.

And that's why higher bonus provisions, leading to an even higher operating cash flow than what we've seen on the EBITDA side, which is then on the free cash flow side counterbalanced by CapEx investments, but they are also fully in line to what we have been communicating. So R&D capitalization is at EUR 30.5 million for the first 9 months, and that is in line with what we have been communicating previously.

And finally, look into the leverage development. And here, we wanted to give you a bit the longer-term trending also. You can see the very continuous improvement on the leverage side.

Now at the end of September, looking at 2.8 turns. We have been given the guidance to 2.5 turns. So that is unchanged and probably we'll be ending slightly better. But the overall trend driven by a reduction of the net debt level with the free cash flow that we're generating, we're now in the position that the net debt levels are starting to actively reduce, while at the same time, the EBITDA is continuing to go up, and that's the underlying driver of the strong reduction on the leverage side. So very healthy development.

And that leads me to the guidance update for 2025, driven by the strong top line performance that we've been seeing in the first 9 months. We are narrowing our guidance to the upper half of the previously given guidance. That means for the all-in core revenue growth, we're expecting 11.5% to 13%. For the organic core revenue growth, we're expecting 10.5% to 12%. So that means we are very confident that the strong revenue growth that we've been seeing will also continue in Q4, although we have to say Q4 last year has also been having a good performance. So that's why we're narrowing the guidance to the upper end of our previously given guidance. Underlying core EBITDA margin is confirmed at 25% to 26% and that's it in summary.

And with that, I'd like to open the round for questions.

[Operator Instructions] And we're going to start with [ Richard Fulton ].

I'll start with 3, please. So the first one, I was wondering if you're able to quantify how much of the 13% organic growth in EMEA year-to-date has been driven by spike events? That's the first one.

Second one, one area of the business, which was a little bit softer through H1 was the Patient Care business in North America. I was wondering if you could update us on how trends progressed through Q3?

And my third question, I was wondering if you could share any early thoughts on 2026, how we should think about key drivers for growth, main headwinds and tailwinds for margin expansion? And I guess, overall, is there any reason why 2026 should deviate from the midterm targets you outlined at the IPO?

Okay. Maybe we start with the last one. So look, when new products or new reimbursements are in place, it doesn't mean that we are switching from day 1, all existing patients on the new technology on new products. So this is only either new fittings or patients when they are due to a refitting. So therefore, the penetration of the new products, new reimbursement opportunities is taking place over several years.

So therefore, we do see also for '26 continuously growing expansion there. But why we had a lower year-over-year growth for next year because we had a very strong year 2025. So we are growing on on a different level. So the additional revenue growth will be probably not at the same level like 2025.

Then the question -- the first one was regarding spike events.

Yes, it's in the area of 2.5% to 3%. I think you referenced the EMEA region, right? So it's 2.5% to 3% of the EMEA growth, which is driven by spike events.

And then the second question was, I think, on Patient Care North America performance. And I think I mentioned it already, we're seeing a strong catch-up on the North America Patient Care performance within Q3, the growth has been above 25% organically.

Q2 has already been strong, but we're really seeing a nice catch-up and gain of market share and now finalizing the integration. So that means, all in all, in the U.S., we're looking into a year-to-date Patient Care growth of more than 8%. So as I said, it's a combination of the normal market growth and the catch-up after the integration that we've been running through in the last 2 years.

Plus we installed a new CRM system, and we are generating really a lot of leads. So this is also something which is fueling the pipeline.

Thank you so much, Richard, for the questions. And also thank you so much to the management for answering the question.

We have another question or a couple more questions from the analyst [ Hugo Sorbet ]. You should be able to speak now freely.

I hope you can hear me. You just narrowed the sales growth guide to the upwards of 10%, 13% for the full year. You're trending at 13.6% as of the 9 months. If we assume the midpoint, so around 11.5%, that would suggest a slowdown to the high single digits in Q4. Could you maybe given the strength of the business, share your thoughts on what would drive you in Q4 to deliver on the high single-digit growth? And aren't you more comfortable with the top end of the guidance range, not just the upper half? That would be my first question.

Second, a follow-up on Richard's question. Could you maybe repeat just what you said about 2026 and whether or not we should expect any deviation from the long-term guidance that you broke up when you answered the question? And lastly, on -- can you update on the K2 penetration for Kenevo in the U.S.

So maybe to the guidance. So as we mentioned already during the management presentation, so we are the new kids on the block. So we have to earn your trust. That's why we -- our guidance is normally conservative. So underpromising, overdelivering, we would like the stage which we gave now. And yes, hopefully, we can surprise you, but this is something what we would like to continue at least in the beginning. And therefore, also for next year, we would like to confirm our guidance. That's for us important.

Regarding the Kenevo penetration, that's a continuously process. So we are now 15 months in the process. So as I mentioned before, it's not that we are switching everybody. So the penetration will take until we have the full coverage, will take 3, 4 years. So that's why we are still seeing a very positive and strong impact of the K2 reimbursement system in the U.S.A.

And I think the last question has been on the guidance for this year, why not more ambitious given the strong 9-month trading. As I said, we had a strong Q4 also last year. And in general, the seasonality is that Q4 is always the strongest quarter of the year. We've been running through our forecast 3 planning, and that leads us to the upper half of the previous guidance. So I fully agree. It's a strong momentum, but reflecting also strong performance in the last month of the last year, we are arriving at the upper half as just presented.

Thank you so much for the question, [ Hugo. ] And also thank you so much for answering the questions. We received a couple more questions. Have you heard any more on Nairobi protocol post the announcement of 232?

And the next question would be, how is the acquisition pipeline looking? And the third question and the last question that we've received is, how do you view the ONWARD Medical stake?

Yes. So to the Nairobi protocol, no, we haven't heard anything. So our estimation that this will not change the current status quo is still there. But -- so the shutdown in the U.S., of course, is also having the impact there. I don't think that anybody in the last 6 weeks worked on the documents. So therefore, according to our information from the U.S., the earliest reaction, which is expected will be April, May next year.

Then on the acquisition side, yes, we have our pipeline, and we just yesterday had again our M&A meetings. So we are in several negotiations. And again, it's always a balanced approach in technology, in patient care, but also maybe new technologies, what we have seen from ONWARD. Therefore, yes, this is an ongoing process. And regarding ONWARD, maybe Arne can give some updates.

Yes. As Oliver said, we are following as a recap, 3 buckets in M&A. One is on patient care, one is on product, one is on technology and ONWARD fits into the technology bucket. And we believe that this is very complementary technology to what we're doing. We are working on shared product -- projects to see if we can expand the patient population that we are also reaching with our products. For example, C-Brace. And we believe that ONWARD is now at a stage where the technologies are starting to become to market with ARC-EX and is moving into the clinical phase with ARC-IM. So really interesting phase and a good timing to connect how our 2 competencies are working together.

And that's why we have been participating in the refinancing round or the additional series financing round that ONWARD has been running through and have been slightly increasing our share that we have now to at around 12% in ONWARD Medical.

Thank you so much for answering all the questions to the Management Board. There are no further questions. We, therefore, come to an end of today's conference call. Thank you for joining, listening and your questions. And a big thank you, of course, to the management team for answering the questions. Should further questions arise at a later time, please feel free to contact Investor Relations. I wish you all a lovely remaining week. And with this, I hand over to Oliver Jakobi for some final remarks.

Yes. Also from our side, thanks a lot for joining and for the interest. Yes. So I mean, summing it up, we are very satisfied with the performance in 2025 and looking forward for the next update. So as I mentioned before, our guidance is I think still it's an amazing trajectory we have and looking forward also a great opportunity. Thanks a lot. And yes, talk to you soon.

Thank you.