Ambu A/S

CSE:AMBU B

Earnings Call Transcript 2021-Q1

[Operator]

Ladies and gentlemen, welcome to the Ambu Annual Q1 2020/'21 Conference. [Operator Instructions] I'll now hand the floor to CEO, Juan-Jose Gonzalez. Please begin your meeting.

[Juan Jose Gonzalez, CEO & Member of Executive Board]

Thank you very much, and hello, everyone, and thank you for joining us this morning. We would like to share our results for the first quarter. And if we go to the next slide. The objective is to give you a business update; give you a sense in terms of what are we seeing in terms of the market; where are we with the performance of both our core and Visualization business; how are our new launches doing, especially how we're doing with our entrance into urology and GI; and also give you a sense in terms of what can you expect from Ambu for the next few years. And then, Michael is going to talk about the financial results, give you an update in terms of the outlook. And we will take some Q&As at the end. So in terms of the key messages, first of all, we are very pleased with the results of the first quarter. And I would like to thank you, the entire organization, for all their work and dedication in what are still very difficult conditions. But there are 3 key messages I would like to share with all of you. Number one, the single-use endoscopy market is one of the most attractive MedTech markets, and I will say that is becoming more and more clear as the months passed. The COVID-19 pandemic is making health care system more focused on infection control and avoiding cross-contamination, and they are open to see single-use endoscopy as a solution as they try to do elective procedures. And finally, medical authorities and associations around the world are supporting the adoption of single-use endoscopy. Now in terms of performance, it's, I would say, a remarkable first quarter. We exceed DKK 1 billion in sales. We grew 39% on the back of our Visualization growing 101%. And we have all regions growing double digits. So this is not just driven by specific markets, but we actually see that across all geographies, we are able to drive our Visualization business. Now in the case of Europe, where we had our Visualization growing 194%, we did benefit from special orders from NHS England. Basically, the NHS decided to bring forward their annual demand of single-use pulmonology, given how difficult the situation right now with pandemic. Now we have multiple growth drivers, and I would say this is one of the things which is important in the case of Ambu that we do not depend on one specific product to fit our financial aspirations. But we, of course, entered into ENT and we have also recently entered into cysto, and I will share with you why we believe there is going to be widespread adoption of these technologies in this new endoscopy markets. And finally, I'm pleased also to share the progress with our aScope Duo launch, where our clinical trial and commercial launch have started and the feedback in terms of our strategy to target high-volume segment is looking very promising. When you look in terms of what does it mean in terms of profitability, the 39% organic growth has translated in an EBIT margin of 14.6% and a neutral cash flow before acquisitions of DKK 2 million. Now we are clear that we are emerging as the leading single-use endoscopy player on the back of the rich pipeline that we have in front of us. And this year, we are going to achieve an important milestone, which is the entrance into GI. And in addition to the launch of Duo, we are entering into colon and gastro. But more importantly, if you look at our pipeline, our innovation engine, in the last 3 years, we introduced 5 new products. In the next 3 years, we are introducing 20 new products, which is basically allowing us to have the most complete single-use endoscopy portfolio in all the segments where we compete. Now this is a unique opportunity for Ambu. The market is developing very rapidly. And we have a first-mover advantage: the competitive superiority in terms of innovation and manufacturing and the momentum. So to make sure that we maintain our strategic and operational flexibility, we are also announcing that we are going to raise capital in an offering of new B shares, and Michael will talk in more detail regarding that. So these are the key messages, and let's start with the market. So I mentioned that single-use endoscopy is considered one of the most attractive new markets in MedTech. And I have to say, we had the JPMorgan conference a few weeks ago and we had the chance to see all the landscape within MedTech. And something that was clear for us is that the drivers that are driving the adoption of single-use endoscopy are becoming stronger and stronger as the time passed. There is more focus on contamination and infection control this last quarter than the previous quarter. The rapid technology advancements are actually making us be more certain regarding how more powerful our single-use endoscopies are going to be. And that's because they are riding all the investments and developments in other important sectors. Our sensors, for example, are being powered by all the advancements in mobile and automotive. Our processors are actually being powered for all the investment in the gaming industry, the image enhancement software, the monitor hardware. And all of that combined, it makes us certain that as long as we continue to innovate, we are going to have single-use endoscopy probes that will have better clinical outcomes than reusable one. And finally, the attractiveness of the economic offering, if you price this probes correctly, the benefits in terms of convenience makes the transition much easier. And that's why we said this market is going from $500 million last year to $2.5 billion in 2024. Now the case for single-use endoscopy continues to strengthen. And in 2020 we actually had the record year in terms of number of peer review studies regarding contamination and infection within GI. There were 26 studies looking at this issue and confirming that there is a problem and there is a need to improve the quality of care. The Spanish pulmonology association, for example, have decided, after reviewing our single-use bronchoscopy, that single-use should be the standard of care beyond COVID-19 pandemic. And this is very important because when the pandemic started, most pulmonology associations across key markets said given the pandemic, if you need to do a bronchoscopy, you should use single-use. This is actually the sort of association that is saying, well, actually, looking at everything we know right now regarding the performance of single-use, single-use should be the standard of care going forward. And we expect that other pulmonology associations will achieve similar conclusions. In addition, we see medical authorities actually supporting more and more the creation of a single-use endoscopy market. We know, for example, that CMS approved this special reimbursement for duodenoscopy in outpatient procedures. And we believe that we are going to see something similar for inpatient procedures, which basically means that all health care systems in the U.S. not only have the safety recommendation from the FDA asking them to move away from traditional reusable scopes, but on top of that, they have an economic incentive to be able to do it. And that will secure the creation of what is going to be a very important segment within single-use endoscopy. And this is not just about the U.S. For example, a couple of weeks ago, Germany decided to approve a new procedure code for single-use ERCPs to make sure they can track the performance of single-use duodenoscopy. Germany is our most important market in Europe and another example in terms of how we expect to see around the world authorities is focusing and supporting the development of single-use. Now having seen the market, let's talk about our performance and let me start first with our performance with our core business in terms of Anaesthesia and Patient Monitoring and then we'll talk about our performance in Visualization. So first of all, I think we are all seeing the impact of health care systems driven by COVID-19 and this continued. And I think most hospital MedTech companies have indicated that, today, elective procedures are at around 85% to 90% of what was a normal size of the market. And our core business is driven by elective procedures. So in Q1, we achieved 1%. Now there was a difference in terms of performance, Anaesthesia grew 5% because the negative impact of the lower number of elective procedures is being offset by the higher demand of our resuscitators, which are being used in the treatment of COVID-19 patients. And then in the case of PMD, which correlates 100% with elective procedures, we saw a decline of minus 3%. Now what we expect is as vaccines are being rolled out, as the number of cases in COVID-19 reduce, that our core business will go back to growth and we expect that to happen in the second half of this year. Now with that background, let's talk about our Visualization business. And it's an incredible performance. We grew 101% in Q1. Actually, our Visualization business became the largest revenue contributor of the company in Q1, accounted for 55% of our revenues. Now as I mentioned during the introduction, we will benefit by the high demand of NHS England in the context of their COVID strategy to treat patients and build safety stocks. So adjusted for this thing, it's just a special order, our Visualization organic growth was 60%. And what we expect going forward is that the NHS England will not order and we will continue to see the growth in the rest of the markets as per our plans. It's very encouraging that outside of Europe, we see North America growing at 35% and the Rest of the World growing at 35% as well. It's just an indication that in our most important market, which is the U.S. and in all of our new emerging markets, the concept of single-use endoscopy will resonate and we will be able to create our business there. Now our strategy has been to embark on a rapid expansion across all endoscopy segments. And what we have done over the last 3 years, of course, is to move beyond pulmonology, to get into ENT, cysto and duo. ENT, cysto and duo are, combined, about 19 million procedures, which is 6x more than the 3 million procedures that we have in aScope Broncho. So it's very important for us to see what is our performance in each of these segments. So let me start with aScope Broncho and then we will go through the other ones. So in the case of aScope Broncho, we continued to see the same positive dynamic we have seen last year. We have increased the penetration and expanded our customer base. The pulmonary associations continue to recommend single-use bronchoscopy. This is especially the case in Europe. And in the U.S. today, all major GPO contract have selected Ambu aScope 4 as their partner of choice in the treatment of single-use bronchoscopy. And it is on the back of that, that we have won 150 new U.S. customers and that our penetration rate in the OR and ICU already exceeded 30%. So overall, our pulmonology business continues to carry a very strong momentum, and this is something that we believe will continue post the COVID-19 pandemic. Now if we look at ENT, this is important because, again, it was our first expansion beyond pulmonology, 11 million procedures, less concern about contamination. So this was mainly driven by economics, convenience, flexibility and the technical performance of our product. And I'm pleased to share that our bet in ENT is going very well. It grew 280% versus last year. We grew 40% versus our previous quarter. We are seeing a rapid penetration of ENT hospitals. Actually 40 of the top 100 hospitals in the U.S. have already been penetrated, and we won 120 new customers in the last quarter. And on the right-hand side, what you can see is the monthly global unit sales since the launch and it shows the impact of the start of the COVID-19 pandemic, but how after that it has continued to rapidly grow and becoming a solution for all hospitals that want to do ENT procedures safely. Now having looked at ENT, let's look at our bet into urology. And again, in the case of urology, I've been sharing with you the initial positive performance and these have continued during the first quarter. We gained 150 new customers. So actually, today, we have 240 accounts already closed in the U.S. 50 of the top 100 U.S. hospitals have either converted or adding a trial phase for conversion. And actually, one of the things we have seen, especially in the case of Cysto, is that when we go into the trial phase, the probability of conversion is very high because of the superior technical performance of our product. Now more importantly, we also just start the commercial launch in Europe and we are also seeing the same potential that we are seeing in the U.S. for widespread adoption. Now on the right-hand side, you see the comparison of U.S. unit sales for the first 8 months of launch between our aScope Broncho, ENT and Cysto. And what you are seeing is that actually Cysto is penetrating the market as fast as ENT. And this is very encouraging for us. Cystoscopy is 6 million procedures in the market, is twice bigger than pulmonology. And that basically shows that our bet in terms of entering with a direct commercialization model into urology is paying off, that we have an important growth engine for the company. And more importantly, we will be able to leverage our urology customer base when we launch our ureteroscope. Now having talked about ENT and Cysto, let's talk about what is one of the most important bets of the company, which is our aScope Duo. And as I have mentioned before, we consider duodenoscopy to be one of the largest segments in single-use endoscopy. When we say that in 2024 this market will be about $2.5 billion, we assume that single-use anoscopy is going to be a very important part of that. And our launch is underway. We have started our clinical trial and we actually have expanded the number of sites from 2 to 5. More importantly, one of our key priorities as part of the launch was to build a high-profile key opinion leader network, one that help us to support our launch, but also with the future development of our GI portfolio. And what we have here are some quotes from 3 of our important KOLs. We have Dr. Todd Baron, for example, is saying, "I have now used the aScope Duodeno in a handful of patients. I have been very impressed with how the scope has functioned. It's actually exceeded my expectations." We have a quote from Dr. Frank Gress, "Once you become comfortable, 80% to 90% of ERCP cases could be done with the aScope Duo." And we also have a quote from Dr. Goodman, "Ambu has hit the mark on the aScope Duo and I look forward to the development of their entire GI line." This key opinion leaders basically have assessed the technical performance of our product and have assessed the potential to be able to use our aScope Duo across multiple levels of complexity in terms of procedure and have concluded that this is an attractive solution for ERCP hospitals. They represent the base of a KOL community. They are former presidents of associations, chairs, members of editorial boards and we are very pleased to have their support and endorsement during our launch. So with that, with that, as a start, let's focus on our commercial -- on our progress with our commercialization. And I can share 3 things. Number one, 3 of the major U.S. GPOs have our aScope Duo on contract, accounting for 90% of the U.S. health care market. That basically means that if a U.S. hospital wants to have the aScope Duo, they are in the position to do it. More importantly, 370 ERCP accounts that represent about 30% of the total ERCP market have actually lined up to do the final evaluation for our aScope Duo. And today, we already have 30 ERCP accounts that have ordered our aScope Duo and 5 of them are within the top 100 ERCP centers. Actually, one of them is within the top 5 and this is important because our commercialization strategy has focused on high-volume ERCP center. Our measure of success is if we transition most of the reusable duodenoscopy into single-use. So for us, it's very important not just to close a large number of accounts, but to close the accounts that drive most of the volume. So this is very encouraging, and we are looking forward to see how this is going to play out over the next few months. Now let's talk about the future. This year, in the second half, we will continue our rapid expansion into GI with the launch of Colon and Gastro, which are very important launches for the company. They, combined, are 70 million procedures. We believe, based on all the research we have done, based on all of the interviews with hospitals and GI surgeons, that there is a clear demand and need for our single-use products. And we expect to see similar levels of penetration to what we have seen in pulmonology in ENT, in Cysto and what we are seeing in Duo today. And in addition to that, of course, we have a very important launch, which is the entrance into the broncho suite. The bronco suite segment is as big as the pulmonology segment, and with our aScope 5, we are going to bring our most advanced technology to compete there. Now we are going to emerge as a leading single-use endoscopy player. In the last 3 years, we introduced 5 new products. And in the next 3 years, we have 20 new products. We basically are leveraging our R&D modular organization together with our high-scale, low-cost manufacturing to basically very rapidly bring the most complete portfolio of single-use endoscopy across all the segments that we compete. And our strategy is to make sure that we not only introduce products, we not only complete the portfolio, but that we very rapidly move to the next-generation of sensors and technology so we are always at the forefront in terms of clinical performance. All of this is going to create a very attractive ecosystem for health care systems, where they will be able to have the most complete portfolio, monitors and consoles that can be leveraged across different single-use endoscopies, which basically means that if I'm a hospital, I can do a pulmonology endoscope procedure then switch to do a cystoscope. Then if I want, go ahead and do a gastroscope, giving the hospital tremendous flexibility. This will also allow them, of course, to do endoscopy across different areas in the hospital and outside of the hospital. And GPOs are recognizing that. That's why if you look at the contracts and what we are announcing in terms of our agreement with them, they are basically selecting Ambu as a partner of choice in the creation of the single-use endoscopy market. So we are very excited with our performance. I'm very excited with the future. There will be a lot of volatility throughout the year. But we are convinced that we are going to maintain our profile as one of the fastest-growing MedTech companies. And with that, let me pass you with Michael to talk about our financial results.

[Michael Hojgaard]

Thank you, Juan Jose. As already mentioned, we delivered an organic revenue growth of 39%, driven by Visualization. The financial results for Q1 were significantly influenced by COVID, which led to an overall strong demand for our aScope 4 Broncho. We have, in the quarter, seen a less impactful effect from the cancellation of elective procedures, but the overall performance of our core business continues to be impacted from this. In Visualization, we experienced double-digit growth rates across all geographies leading to a growth of 101%. The European growth was positively impacted by large orders of single-use scopes through NHS in England as part of their core strategy. North America and Rest of World both delivered 35% growth. And combined for all regions, we sold 370,000 units of single-use scopes, up 106% over last year. Our core business showed a growth of 1%. Anaesthesia was driven by the increased demand for our resuscitators and approached a 5% growth, while PMD saw a negative growth of 3% as COVID continued to cause shift in priorities at hospitals leading to elective procedures being put on hold. Lastly, we ended the quarter with an EBIT margin before special items of 14.6%. North America accounted for 39% of revenue with an organic growth of 13%. In America, Visualization grew by 35% and continued the rapid growth we've seen since last quarter. Anaesthesia posted growth of 2%, driven by a high demand for resuscitators offsetting the reduced demand for other products in our Anaesthesia portfolio. For PMD, we had in the U.S. continued to see elective procedures being postponed and our American PMD business declined by 13%. Europe accounted for 53% of revenue with an organic growth of 79%. Visualization grew by 194% and all major European markets posted double-digit growth rates. The European Visualization growth was driven by aScope 4, including the special orders through the NHS, which accounts for approximately 50% of the European growth in Visualization. Additionally, we have seen an increasing demand for our ENT and cystoscopes, which have been very positively received on key European markets. Anaesthesia grew organically by 17% and PMD by 2%. Growth in Anaesthesia continues to be driven by demand for resuscitators, and we see some improvements in PMD with increased activity in electives. Rest of World contributed growth of 9% with Visualization at 35% while Anaesthesia and PMD declined 2%, respective, 7%. So now let me go through the key numbers on our P&L. Revenue for Q1 was just above DKK 1 billion. This corresponds to the organic growth of 39% and a reported growth of 33%. This includes the mentioned impact from orders of single-use scopes through the NHS, and excluding these orders, the growth would have been 23%. The gross margin for the quarter was 65.4%, up 5 percentage points over last year. This quarter's gross profit was positively impacted by better product mix due to the volume growth in Visualization and by scaling in our manufacturing. As in previous quarters, negative effects from reduced average selling prices are minimal. Total capacity costs for the quarter were DKK 514 million, an increase of 41% compared to last year. The growth primarily comes from increased sales and distribution costs, including continued costs for air freight of all endoscopes out of Malaysia to meet demand. EBIT before special items ended at DKK 148 million in the quarter, leading to the mentioned 14.6% EBIT margin before special items. Free cash flow before acquisition totaled DKK 2 million and was thus neutral to revenue. The milestone payment of DKK 298 million or EUR 40 million relating to the FDA clearance of the duodenoscope was paid in October. At the end of the year, our net working capital ended at DKK 636 million, corresponding to 17% of 12-month revenue. And our equity totaled DKK 2.4 billion, corresponding to an equity ratio of 47% of assets. Lastly, total net interest-bearing debt was DKK 1.7 billion, which corresponds to a ratio of 2.5 of EBITDA before special items. Our overall rationale for the capital increase is to have full flexibility to execute on our strategy. Our strategy is all about building a high cadence of innovation, launch of innovative technologies into the market and take benefit from the market conversion when use shifts from reusable into single-use endoscopy. As we are in the face of building the market of single-use endoscopy, timing matters and the potential slowdown would have a clear negative impact on future growth rates. And on this basis, the intent to raise capital should be seen. So despite that our level of debt and leverage currently is at a reasonable level, we will, with a reduced leverage, gain freedom to commit the investments that are needed despite potential short-term fluctuation in growth or EBITDA and thereby ensure that our execution of the strategy is not being disturbed by how our leverage may evolve. It's in this light that we are now offering new Class B shares and existing treasury shares through an accelerated book building process with the aim to generate a proceed of approximately DKK 1.3 billion. The aim is to reduce our leverage by end of the financial year to approximately 1.0, which we believe is a reasonable balanced level that will give us freedom to execute on our strategic agenda. Now let's turn to the guidance for this year. For 2021, our organic revenue growth is expected to be in the range of 17% to 20% and this is unchanged compared to what we said at Q4. The growth will be driven by Visualization, which will continue to see high double-digit growth rates. And we expect our 2 new scopes, Cysto and aScope Duo, to contribute sizable value to our organic growth. The Anaesthesia and PMD were negatively impacted by COVID in '19/'20, but are expected to return to positive growth this year. The negative impact from COVID in '19/'20 will cause Anaesthesia and PMD to exceed what is considered our normal growth rates for the long term. The growth rates for these businesses will be relatively low early in the year, while we expect to see an increase towards the end of the year. In terms of EBIT margin, we continue to expect to be in the range of 11% to 12%. Endoscope units sold is expected unchanged to be between 1.3 million and 1.4 million units. Growth will be driven by the bronchoscopes, but in ENT scopes, cystoscopes and duodenoscopes are also expected to contribute to the overall unit growth. The quarterly development of the group will, of course, be impacted by the high comparables in Q2 and Q3 last year. And the buildup of the margin across quarters will be sensitive to the scale that we will achieve from the product launches this year. These were my comments to how the year is expected to play out. Thank you, and back to you, Juan Jose.

[Juan Jose Gonzalez, CEO & Member of Executive Board]

Thank you very much, Michael. Why don't we open for Q&A?

[Operator]

[Operator Instructions] The first is from the line of Catherine Tennyson of Bank of America.

[Catherine Tennyson, Analyst]

I have three, if I may. My first one is could you just give me a little bit of help understanding the timing and the rationale behind the equity raise? Appreciate, Michael, you flagged this to be more flexible in executing the strategy. But given very strong sales, GI launches, concomitant better profitability and reasonable enough leverage before all of this, why do you feel you need this equity raise now? And what part of the strategy do you feel needs most of this firepower to use? Secondly, just on that 550-patient trial in the U.S., can you update us -- I appreciate it's early days, but how many of those patients have you already tested using the duodenoscope? And thirdly, on my quick math, I get the NHS boost to be around 95 endoscopes for the quarter. Can you help us to understand the additional COVID growth benefit you had, excluding the U.K. in your numbers this quarter?

[Juan Jose Gonzalez, CEO & Member of Executive Board]

All right, Catherine. This is Juan Jose Thank you very much for your questions. First of all, I mean, your assessment in terms of the strength of the company, it's right. I mean if you look at our Q1 results, we are growing very rapidly. This is a high-margin business, which basically means it's very profitable. And as we drive growth, this is going to translate into higher levels of profitability and cash flow. Now if you look at it in terms of the creation of a single-use endoscopy market, what we are seeing is that this market is developing much faster than what we thought. Everything I mentioned in terms of the impact of the COVID-19 pandemic: the higher focus on infection control, the actions from government authorities and associations, the adoption of our new launches beyond pulmonology, all just indicated that this is going to be a very large opportunity. And we are doing this capital raise for the simple reason that we want to make sure we have full strategic and operational flexibility to maximize our first-mover advantage. And that could be translated in many different ways, whether it is the technologies in terms of innovation that we want to bring into our portfolio sooner, whether it is a higher investment in terms of manufacturing capacity in the case volumes are much larger, whether it is in terms of specific bets for some geographies, this just basically give us the flexibility to do it. And we think this is very important because from a value creation point of view, the higher the share we secure in the early years, the better we are going to be in the medium term. Now in terms of the 550 patients, let me just say that we are just starting. So we have some patients that have gone through the CMR, and I shared with you the quote from the KOLs. This is basically a performance during human procedures. But in terms of the clinical, we are just starting. And in terms of the NHS, I think you asked what was our growth in Visualization excluding the NHS, and it is 60%.

[Catherine Tennyson, Analyst]

That's helpful. But just I was looking for the COVID benefit across the world ex the United Kingdom if at all you're able to give that number.

[Juan Jose Gonzalez, CEO & Member of Executive Board]

That's very difficult for us to calculate because the impact of COVID-19 varies depending on geographies and depending on procedures. There are some businesses that we have launched during COVID-19, so we don't even have a reference point of what it means without COVID-19. But I would say that the way we look at it is that the impact of COVID-19 is not temporary because what we are getting with COVID-19 is a more rapid penetration and expansion of our customer base, which is something that we are going to continue to carry post the COVID-19 pandemic. That -- what we are saying, we will emerge from the cabinet in pandemic as a stronger company with multiple growth bets across endoscopy.

[Operator]

Our next question comes from the line of Thomas Bowers of Danske Bank.

[Thomas Schultz Bowers, Analyst]

Yes. A couple of questions from me here. So I'll just kick off with the duodenoscope. So yes, you are in full commercial launch now. So maybe can you give us a little bit of color on the ERCP accounts that you have in the slide deck? So we have 30 accounts who have ordered the product. But I'm just wondering, is this part of evaluating the scope or are these already done with the first evaluation? So what I'm trying here to find out is I'm trying to understand is what's the difference between those 30 accounts and those 370 accounts lined up for the evaluation of the scope. And then second question just on -- just a little bit more color on the U.K. orders. So roughly 80,000-unit order and I read in your statement that this was part of -- this was expected. So I guess I can assume that this is also part of your current full year guidance. And -- but again, well, secondly, you can say, was this more of a one-off like we saw last year? Or this contract with NHS, is this more of a, you would say, want-based nature during the pandemic? So is there sort of a run rate in the coming quarters for keeping up the inventory levels in U.K.? And is that also already reflected in your full year guidance? And then my last question just on the aScope Cysto. So I'm just wondering what's actually driving the strong uptake here. Is this primarily the better deflection that makes the difference? Or is it something else that we need to be aware of?

[Juan Jose Gonzalez, CEO & Member of Executive Board]

All right. Thank you very much, Thomas. So let me start with the question in terms of duodenoscopy. So we basically said that 30 ERCP accounts have already ordered. And this is actually a mix between accounts, which are participating in CMR and accounts where we have gone through the evaluations, they have looked at the product and they have placed an order. And it just highlight the high receptiveness of ERCP hospital to single-use endoscopy with our value proposition. And this is very important because our economic offering allows hospitals to benefit from single-use endoscopy and no risk of contamination at a neutral cost. And I would say that has been one of the drivers to see this level of penetration. Now in terms of the U.K. NHS, so this is -- we have been working with the NHS since the pandemic started. So we knew the orders and the shipments by quarter. So this was expected. And what this means is that we should not expect to see more order from NHS England for the remainder of the year. That basically means that when you look at our quarterly performance, we are going to have a very strong Q1 and Q4 and weaker Q2 and Q3. And that's important because when you look at the comparables and everything, there will be a lot of volatility between our quarters. Now in terms of aScope Cysto, this is very important for us because we have bet the conversion from reducible to single-use on the superior clinical, economic and operational flexibility of our products. And Cysto is the first time where the clinical performance of our product is comparable or superior to reusable cystoscopy. And the main reason is because every time you take a reusable cystoscope through cleaning, washing and drying, the image resolution deteriorates. So if you are comparing a 1-year-old reusable cystoscope with a brand-new aScope Cysto, that urologists actually feel they can have a better performance with our aScope Cysto than with a reusable. And that's what we always refer as a tipping point: the moment when our technology is so superior that the surgeon feels they can have better clinical outcomes; of course, it's an attractive economic offering; there is no risk of contamination; and give you all the operational flexibility that comes with single use. And that's really what is driving such a rapid level of penetration. And with 6 million procedures and what we have seen in the U.S. and what we are starting to see in Europe, we believe our cystoscope is going to be a very important growth engine for us. So that hopefully gives you a little bit of confidence in terms of why we are seeing this level of uptake.

[Operator]

And our next question comes from the line of Annette Lykke of Handelsbanken.

[Annette Lykke, Research Analyst]

And from my side, congrats on a fairly impressive Q4 -- sorry, Q1 performance. My first question would go to the time lines in the study you have just started on the duodenoscope. First of all, in respect to the smaller group of patients, when should we sort of expect any kind of preliminary readout from that? Could that be at the virtual DDI (sic) [ DDW ] in May? Or would that be on another event in Europe? And how do you feel about the completion date saying 1st of August in the study? Is that something you think is realistic? Or should we add some sort of a buffer to that? Then my second question would go on the gross margin impact from aScope Duodeno, how would that be? Should we expect that to be lower or higher compared to the Visualization average? And how should we see the gross margin delta on ENT and Cysto as well compared to Broncho? That will be my questions.

[Juan Jose Gonzalez, CEO & Member of Executive Board]

All right, Annette. Thank you very much. So let's start with the clinical study. I mean we will share the result of the 60 patients as soon as we have them. Of course, having it in time for the DDW conference will be ideal. But this is something that we will just -- we plan to do the study in a very thoughtful way. And as soon as we have them, we will share them. And in terms of the full study, we know that we will take about a year to do it. We plan to continue to expand the number of sites, but we are confident in terms of the completion of this study. And again, it's important to remember that the commercialization of this product is not tied to the results of the study. And based on what I said in terms of the number of evaluations and so forth, we believe that all that is going to be finished well before we have the study results. Now the entire results of the study are important for us in terms of our relationship with GI community in terms of deepening our relationship with key opinion leaders, in terms of having the materials to present at different conferences. That is more of a medium-term type of activity. In terms of short-term, that will be driven by the commercialization. And this product price point is 6 to 7x higher than pulmonology, and therefore, the margin is higher. Now you have to see that we are entering into different platforms with different price points on different gross margins. So overall, what we are assuming is that our gross margin will remain stable as we move forward with some segment going up, some segment going down, but overall, the Visualization margin remaining stable. And of course, because it's much higher than the one we have for Anaesthesia and Patient Monitoring, the total gross margin of the company will continue to improve as we move forward.

[Annette Lykke, Research Analyst]

Very good. Then my final question would be on you highlighted in your press release that the marketing expense should come to an end by second half of this financial year. Would there be other investments that we are not aware of coming through in 2022? Or should we expect that product mix that you highlighted from Visualization to materialize to the EBIT margin in a year or 2?

[Juan Jose Gonzalez, CEO & Member of Executive Board]

Yes. So let me just start by saying that we believe Ambu has the potential to be a high-growth company and a high-profitability company, that once we have built all of our commercial infrastructure and back office and so forth, then there is significant leverage as we continue to grow the top line. Now what we mentioned is that at the end of Q2, we will finish with urology and GI investment we announced last year. We have completed it in the U.S. and we are going to finish with the all-U.S. sales force. Now going forward, we are entering into Colon, we are entering into Gastro, we are entering into the broncho suite. We are launching into our ureteroscope. There are 20 launches coming in, which basically means that you should assume that we will continue to expand our commercial infrastructure. It may be that it is not at the level that we have done in the previous 2 years. But we will continue to have some investment in our commercial infrastructure. The best thing we can do is to make sure that we have enough reach to be able to maximize the value of these launches. And then you should assume that we will continue to be committed to our innovation agenda, that our innovation as a percentage of sales will remain constant as we continue to grow very rapidly. And that's because our aspiration is to be the world's most innovative single-use endoscopy player. That the way we compete against any player, large or small, is on the technical performance of our products. And therefore, we need to ensure that we are always at the forefront of the latest innovations in technology. And then in terms of manufacturing, we announced that we are building a single-use endoscopy manufacturing plant in Mexico. We believe that with this investment, we will have what we need for the next few years. But I would say those are the investments that you should see from the company for the next 2 to 3 years.

[Operator]

Our next question comes from the line of Benjamin Silverstone at ABG.

[Benjamin Silverstone, Research Analyst]

Congratulations on the strong quarter. I have a follow-up question to the NHS order, if I may. You mentioned that you started your relationship with them back when the pandemic started, and now obviously we are seeing them ordering for the full year. But do we have any sort of color on how their ordering might look post the pandemic. So are they now a firm customer going forward for the single-use? Or how does that look with them at NHS? And my second question is in regards to the cancel rate. Michael, you mentioned that you would like to lower debt levels to make sure that you're able to take advantage of this current momentum, which makes sense. But you would like to have the option to use this money on new technologies, strengthen your conversations, et cetera. But how would that mean for the costs going forward? Should we expect to see higher R&D expenditures or sales expenditures in the next couple of years? Or would this also perhaps entail potential external costs, such as the acquisition of new technologies? If you could give any other color on that, that would be much appreciated.

[Juan Jose Gonzalez, CEO & Member of Executive Board]

All right. Benjamin, let me start with the NHS and then Michael will provide some additional details on the capital raise. So first of all, we have had a long-term relationship with the NHS. The NHS is not a new customer. What I was referring to is that when the pandemic started, the NHS took a more central role in the placement of orders and distribution of all key products in the treatment of COVID-19 patients. And that, in our case, included our resuscitators and our aScope 4 Broncho. And basically, we have been working with them very closely for the last year. We see their orders, how they are being used and so forth. What we can tell you is that we believe that this order should satisfy their demand until the end of the year. So we shouldn't expect many orders in Q2, Q3 and Q4. And post pandemic, we actually expect the U.K. to become one of the largest markets in Europe because what we are seeing, not just in pulmonology, but also in ENT and cysto, is that the U.K. is leading in terms of the adoption of single-use endoscopy. So we have penetration in nearly all major hospitals in the U.S. The level of users and adoption of single-use over reusable is actually one of the highest in the world today. And that's why we consider that this is going to be a sustained momentum, that one we will have. The only thing that will be different is that the NHS, rather than being the one placing the order, we will go back to the previous model where each of the NHS trusts for each of the regions will place the order. So let's talk about the capital raise, Michael?

[Michael Hojgaard]

Okay. Thank you, Benjamin. I think as we said, the reason why we do it is to gain flexibility to our operational and strategic execution of our overall plans. And also as Juan Jose was explaining, we always want to position our technology in the forefront because as the market is being created, the share points that we can gain if we do it earlier rather than if we wait will come at a much more attractive investment. So that's the reason why we are doing this, Benjamin, is that we want to have a balance sheet that can support our strategy and that we will be able to do the investments at the speed where we deem that they are required and without potentially coming into a situation where fluctuations in short-term EBITDA could force us to change our priorities. So whether we are investing into engineers in our global innovation, whether we are acquiring technologies that we can attach to our products or whether it's commercial expansion, I don't think the capital raise are not going to change those priorities at all. It's just going to bring us into a situation where our balance sheet will be very supportive for that plan. I don't know if that explains your question.

[Benjamin Silverstone, Research Analyst]

It did.

[Operator]

Our next question comes from the line of Niels Leth of Carnegie.

[Niels Granholm-Leth]

So if we dive into the growth numbers in the Visualization division, you are telling us that the organic growth in Europe, excluding NHS, was approximately 60%. It should be compared with approximately 35% in the 2 other regions in the world. So is it fair to assume that the contribution from the COVID consumption of these scopes in Europe, it basically explains the momentum difference between the 60% and the 35% in the other regions. So that's my first question. And my second question would be so you say that NHS will not order for the rest of the year, having ordered 80,000 scopes in the first quarter. Would there be any other institutions in Europe able to place orders of similar magnitude or would that only be NHS? They're telling us that NHS accounts for approximately 45% of the U.K. procurement of these single-use scopes and their warehouses are quite full with these products for the time being. So those would be my questions for now.

[Juan Jose Gonzalez, CEO & Member of Executive Board]

Thank you. So Niels, just to clarify, the growth of Visualization in Europe is 194%, and excluding the NHS, it's about 100%, not 60%. And this is very important because what we are seeing is that across all major markets in Europe, Germany, Italy, Spain, France, Benelux, in Nordics, we are seeing a very rapid expansion of our customer base and adoption of single-use bronchoscopy for the treatment of COVID-19 patients. And that's what is driving the growth and that's why we say all regions, all markets are growing very rapidly. And when the COVID-19 pandemic finish, we are going to emerge as a stronger company.

[Niels Granholm-Leth]

So is it fair to assume that the difference between the 100% and the 35% would be the COVID-related growth coming out of Europe?

[Juan Jose Gonzalez, CEO & Member of Executive Board]

No. I wouldn't see it in that way, and it's very difficult because different markets are in different situations in terms of COVID. What COVID-19 does is it creates an overall positive environment for the adoption of single-use endoscopy. Now in terms of this level of ordering, we only are seeing it in the NHS. And what happened is that last year, when COVID-19 started, we saw all these levels of panic buying, but we show health care system that there was no need for that, that we could supply based on their demand at very high level of volumes. And that's why as we have gone through the Q1, outside of the NHS, we don't have any other organization ordering more than what they need and building inventory. Now first of all, the NHS can order and can continue to order. And organizations outside of NHS England, whether it is NHS Scotland or Ireland, they can all continue to order, of course. It's not a requirement. It's just that based on what they have, we believe they should have enough for the remainder of the year.

[Niels Granholm-Leth]

So you wouldn't expect any other bulk orders from central procurement offices, other places in Europe or North America for that matter?

[Juan Jose Gonzalez, CEO & Member of Executive Board]

No, no. It's not something that we have in our plans. Of course, nobody can predict how the pandemic will evolve, but we don't have any major bulk orders in the short term. Now if they come, of course, we doubled our manufacturing capacity when the pandemic started and we have continued to expand our manufacturing capacity so we have a very high level of responsiveness. But today, it's not part of a plan.

[Niels Granholm-Leth]

Okay. And can you just repeat what you said early on about the quarterly development for this year? You mentioned, I think, that quarter 1 and quarter 2 would be the two strongest and then weaker in the second half. Is that correctly understood?

[Juan Jose Gonzalez, CEO & Member of Executive Board]

No, no, Niels. What I said was that Q1 and Q4 will be the quarter where you will see the strongest growth and Q2 and Q3 will be the quarter with a lower growth, and that's actually mainly driven by the comparable from last year. If you remember, all the panic buying and high order happened in Q2 and Q3.

[Operator]

Our next question comes from the line of Yiwei Zhou at SEB.

[Yiwei Zhou, Analyst]

I have 3. Firstly, regarding European approval on duodenoscope, could you please give us an indication on the time? And we understand that the CMS TPP payment has benefit the duodenoscope adoption in the U.S., but without such additional reimbursement, would you consider your price has been too high outside the U.S. market? And secondly, as we get close to the colonoscope and gastroscope launch, could you please give us an indication on the average selling price? And how should we look at its contribution margin when compared to aScope Broncho? And then third question is regarding aScope 5. And we recall that you already plan to penetrate the Broncho suite segment when launched the aScope 4. So what was holding back the penetration so far? And what would be the main technology upgrade with aScope 5? Any comment would be very helpful.

[Juan Jose Gonzalez, CEO & Member of Executive Board]

Thank you very much, Wei. And I got your question in terms of Colon and Gastro and then the aScope 5 and the broncho suite. I just wanted to make sure I understood correctly your first question regarding the pricing of our products. Would you mind just repeating that?

[Yiwei Zhou, Analyst]

Yes. My question is, firstly, when do you expect to get European approval on duodenoscope? And then also without the additional reimbursement on duodenoscope outside the U.S., would you consider your pricing is a bit too high?

[Juan Jose Gonzalez, CEO & Member of Executive Board]

Sure. Thank you for that. So first of all, I mean, we plan to expand into Europe as soon as we get the CMAP (sic) [ CHMP ] and that's going to happen in the -- that's going to happen very soon. And of course, our European organization is fully engaged already on preparing for that launch. Our pricing around the world is grounded on health care economics. So we basically look at how much it cause a hospital to use a reusable duodenoscope. And based on that, we come up with our pricing. And we don't expect significant differences between the U.S. and Europe. Europe is -- tends to be slightly lower than the U.S. But I would say there are no major differences. Now in terms of Colon and Gastro, we are going to launch it in the second half. So as you can imagine, we are also in full preparations for what is going to be a very important milestone for the company. We cannot share with you the aspiration today. We will share it when we launch. The only thing that I can mention in terms of pricing is that, again, it's going to be grounded on health care economics because our #1 objective is, of course, to drive a significant transition from reusable into single-use. Now the research that we are doing and actually I just had a chance to review a study with the gastroscopy, it shows concerns around contamination, and depending on the patient profile, high levels of concern, concerns in terms of availability; economics, depending on the type of gastroscopy procedure. So we are actually very excited in terms of what we will be able to do in this segment. And finally, with our aScope 4, we were not able to enter into the broncho suite because the image resolution requirements in the broncho suite are higher than in a normal pulmonology. And our aScope 4 did not have the required technical performance to be able to be widely adopted. Our aScope 5 have our most advanced sensor, is going to work together with our most advanced monitor, which is our aView 2 Advance. And together, we believe we are going to satisfy the needs in the broncho suite. And that's a very important launch because it will ensure that our bronchoscopy franchise will continue to grow for the foreseeable future.

[Yiwei Zhou, Analyst]

Can I just follow up on the duodenoscope pricing here? We understand the cost per procedure is quite different from hospital to hospital. Is it at all fair to assume your pricing will be quite different for different hospitals -- for different accounts?

[Juan Jose Gonzalez, CEO & Member of Executive Board]

I mean we basically look at high-volume accounts. That's really our reference in terms of pricing and then we set a pricing in the market based on that. Okay, we cannot talk about our pricing strategy, but those are the main principles that we use when we set our pricing in the market.

[Operator]

Our next question comes from the line of Michael Healy at Berenberg.

[Michael Healy, Analyst]

Just want to look at maybe something we haven't spoken too much about is North American growth in Visualization. Obviously, this was hampered a bit last year given the COVID-19 headwinds. And you've grown 35% this year. Maybe just some thoughts on that. Are you still experiencing COVID-19 headwinds? And what's kind of generated this growth? And how satisfied are you with this maybe as with the other products? And then just touch on the NHS orders. Is that really just for bronchoscopes? And the reason I ask that is elective procedures that are linked to maybe cystoscopy and ENT scopes have been postponed. There could be a backlog later on in the year. Is the NHS order inclusive of any ENT and cystoscopes? And then just a final question really on guidance. The results today are quite a bit ahead of where I was thinking and I think the market as well. Just your thoughts on maintaining or reiterating your guidance at this stage.

[Juan Jose Gonzalez, CEO & Member of Executive Board]

Yes. Thank you very much. And so I would say, in terms of North America, most hospital and MedTech companies are indicating that they have seen the elective procedures is still at minus 15%, minus 10% in Q1. And that what they have seen is that after a recovery in October and November, there was a dip in December. And that really matches following how the COVID-19 pandemic is developing. Within North America, there is a lot of volatility depending on the state and the cities in terms of how hospitals are being impacted. Right now, I will say, California, for example, is under tremendous pressure. Now putting that as a context, a 35% growth in what is the most important market for single-use endoscopy is very encouraging. It's also very encouraging because I've been sharing with you the evolution of our new growth bets, ENT and Cysto, and the perception of our aScope Duo from U.S. ERCP Hospital. And that basically means that for the U.S. region, as we move forward, we have not only a much larger customer base and penetration in pulmonology, but very powerful growth platforms that is going to ensure that, that region continues to grow at very high-growth rates. In terms of the NHS order, what we mentioned is exclusively Broncho. Now overall, when I look at the United Kingdom, there is a very rapid adoption of Cysto and ENT. And basically the United Kingdom is leading the penetration within the European region, but it has not been translated into special NHS order. This is still the different hospitals placing orders after trying our products. And then in terms of our guidance, we just finished our first quarter. And for us, there is still some things which are important to know, especially how our recent launches are going to continue to develop. And it's very important for us that when we set our guidance, that is a guidance that we can stand for and that it reflects a thoughtful assessment of what will be our performance this year. For today, I think we need to take our guidance as it is.

[Operator]

And we have a follow-up question from Thomas Bowers of Danske Bank.

[Thomas Schultz Bowers, Analyst]

Yes. Just a quick follow-up here. Can you maybe give us some color on, you could say, the aggregated competitive situation in Visualization? So how are the competitors reacting to the prospective for the single-use market opportunities as you see it right Now? So what's happening out there right now?

[Juan Jose Gonzalez, CEO & Member of Executive Board]

Thank you, Thomas. And I mean we said, I would say, at one of the first times that we met that it was very important for Ambu that we had more competitors, that we had large global competitors that could support the creation of a single-use endoscopy market, that Ambu was not going to able to do it alone. And that actually, to meet our financial aspirations, we need competition. And what we are seeing playing out is that the market is getting more and more traction and more momentum that competitors are actually looking to participate from this growth. And I would say there has been no major change from what we saw in the last quarter. Boston Scientific is a player that plans to enter into high-price, low-volume endoscopy procedures. So that will be the broncho suite, that will be duodenoscopy, cholangioscope, ureteroscope. That's basically their focus. We have also seen Olympus talking about, including as part of their portfolio, single-use products. Of course, their strategy is not to create a market. Their strategy is if a segment move rapidly to single-use, they want to have a single-use product as part of the offering, so they can continue to participate. Outside of those 2 players, we don't actually see any other activity. We don't see Verathon making much inroads in the U.S. Actually, our assessment is that they might be going backwards during our Q1 on the back of the GPO agreements and the momentum that we have, and we don't see them outside of the U.S. at this point. But going forward, our strategy assumes that there will be competition. For us to meet our financial aspirations, we don't need to be the only player in the market. There is room for more players. What is critical for us is that we are competitive and we are doing it by investing in our innovation, in our commercial infrastructure and leveraging our high-scale, low-cost manufacturing.

[Operator]

Our next question comes from the line of Niels Leth of Carnegie.

[Niels Granholm-Leth]

So could you just talk about the size of your commercial infrastructure investments that you expect to do in the next 1 or 2 years in the area of Colon and Gastro, you talked about that earlier in the call. And then, secondly, I guess a question for the CFO. Can you just talk about your cash flow development in the coming quarters? What should we expect here?

[Juan Jose Gonzalez, CEO & Member of Executive Board]

Thank you, Niels. And I cannot comment in terms of the specific investments for Colon and Gastro. But this I can tell you, first of all, we have created a GI infrastructure that will commercialize all of our GI scopes. It will commercialize our duodenoscope, our cholangioscope, our Colon and Gastro and all the other GI launches we have in front of us. And then in terms of our overall company commercial infrastructure, over the last 2 years, there have been some important investments that we have made. And going forward, we plan to continue to expand our commercial infrastructure, maybe not at that rate that we have done before, but basically, with the objectives to maximize the impact of the 20 launches that we have in front of us. And on the basis of that, if you look 5 years from now, we expect the company to have healthy levels of profitability because rapid top line growth with a high-margin that we have in Visualization and the leverage of the infrastructure once you have built translate into a rapid increase in our EBIT. So that maybe you can take as a context, and then I can pass to Michael to talk about cash flow.

[Michael Hojgaard]

Yes. Thank you. First of all, we are not guiding on the cash flow, but I would love to give some color to it. And I think to start with, it's important to say that the capital raise does not really change the way that we see our cash flows are going to evolve. So the impact that we will see to our cash flow as we move forward is, of course, that it would be very closely related to how our EBIT margin is playing up. The big investments that are coming, the investments into innovation, which is more or less stacked across the quarter. So that's not something that is changing very significantly. Then we have the investments into the Mexican factory, and when we move out on the other side of this financial year, there would be the last milestone to be paid. On top of that, we are working on our working capital, and I think you appreciate that the levels that we have of working capital is actually well managed and at a low level. So there's not much more to say apart from that. But I think when you look at our growth and you look at our EBIT margin and you know the recurring level of investments you get to that, we will be reasonably cash flow okay for this year.

[Niels Granholm-Leth]

So you still expect CapEx-to-sales of approximately 14%? I think you mentioned that in the full year report, 14%.

[Michael Hojgaard]

Yes. Exactly.

[Operator]

And at this time we have one final question in the queue. That's from the line of Jesper Ingildsen of DNB Markets.

[Jesper Ingildsen, Junior Analyst]

Yes. Just had a couple of questions. So on the slides, you say that you are now targeting 370 ERCP accounts, which accounts for 30% of the total ERCP market. I think the last time you mentioned 300 accounts and accounting for 60% of the market. Can you just clarify the difference between the 30% and the 60%? Is that because of last time you were speaking only of U.S. and now that you're actually referring to the entire -- to the global market? And then, secondly, in terms of the full commercial launch of the duodenoscope, can you just clarify when actually that took place? How early in December considering that was the time line you originally gave us? And when can we expect sales of the duodenoscope to accelerate on the back of this? Which quarter in particular could we expect to see that happen? And on the clinical trial for duodenoscope, there's been a few changes to the website in terms of you recruiting and then all of a sudden not recruiting and then recruiting again. Any comments on what has happened there could be beneficial. And then, lastly, just the NHS order. Can you just confirm that when you originally gave the guidance back in November that this was already part of the guidance?

[Juan Jose Gonzalez, CEO & Member of Executive Board]

Yes. Thank you for the question. I mean, we -- it depends on how we are looking and segmenting the market. I think the most important thing for you to take is that these 370 ERCP accounts represent the 30% of the total U.S. ERCP market. And they are lining up for evaluation. So we are talking about not the previous stage, which is product demonstrations and so forth, but the final, final one, once they have passed the procurement committees, the discussion with the surgeons and they are actually moving to use them in human procedures at their hospital. That's why you had a difference in terms of percentages. Now we are moving down the funnel to the last step before they actually place the order. In terms of the recruitment, your voice broke. So I'm not sure I got what you were talking in terms of recruitment, something about starting and stopping?

[Jesper Ingildsen, Junior Analyst]

Yes. On the ClinicalTrials.gov page, you suddenly started recruiting for the trial a few weeks ago at the New York Hospital. And then the following week, you were no longer recruiting at that place. And then the following week again, then all of a sudden you were recruiting at a different hospital. Just any comments around what happened there?

[Juan Jose Gonzalez, CEO & Member of Executive Board]

Yes. I mean, my understanding is that I think they were still finishing some paper work. So when it was posted at the beginning that they had started recruitment, that was actually not accurate. We need to finish the paperwork. That's why that was changed. And then when the paperwork -- the final paperwork was in place, then we posted what was the accurate status of the clinical, which was recruitment. But it's something that we have started. And you can imagine, going from 2 sites to 5 sites when you look at the quotes of a key opinion leader, it reflects our confidence regarding the technical performance of the product and the ability to have successful outcomes on the clinical. And then in terms of the NHS, do you mind expanding your question, again?

[Jesper Ingildsen, Junior Analyst]

Yes. So on the NHS order, can you just confirm that, that was already part of the guidance when you first provided the guidance in November?

[Juan Jose Gonzalez, CEO & Member of Executive Board]

Yes. This was part of the guidance. We -- again, with the NHS, we have been planning the support for the COVID-19 pandemic, so we knew the timing for the order.

[Jesper Ingildsen, Junior Analyst]

Okay. And then my fourth question was around the full commercial launch of the product, the duodenoscope. When did that actually take place, the full commercial launch? I think last time you were talking about launching in December. When in December did it take place if you could be a bit more specific? And when can we expect sales to ramp up for the duodenoscope as a consequence of the full commercial launch?

[Juan Jose Gonzalez, CEO & Member of Executive Board]

Yes. I mean it depends on what's your definition for commercial launch. I mean what we are sharing now is that, that's basically what we are doing. We are going against the high-volume ERCP centers, and there was more activity in December and there is far more activity in January and there will be even far more activity in the months to come. In terms of material financial impact, we expect that our Duo will have more impact in the second half of the year. Similar to what I have shared in terms of ENT and Cysto, it takes some time at the beginning to get traction and then you start to get some more traction with a product. And that's basically how we are seeing it now.

[Operator]

As there are no further questions on the line at this time, I'll hand back to our speakers for the closing comments.

[Juan Jose Gonzalez, CEO & Member of Executive Board]

Thank you -- I mean thank you very much. It has been a remarkable first quarter with our performance, with the way our launches are doing, with the development of our strategy, with our capital raise. Hopefully, we are giving you confidence that we have everything that we need to make sure that we fulfill our aspiration of becoming the world's most innovative single-use endoscopy player, and in the process, one of the largest European-based MedTech companies. So thank you very much.