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Edited Transcript of HANDI.ST earnings conference call or presentation 23-Apr-20 8:00am GMT

Apr 28, 2020 (Thomson StreetEvents) — Edited Transcript of Handicare Group AB earnings conference call or presentation Thursday, April 23, 2020 at 8:00:00am GMT

Carnegie Investment Bank AB, Research Division – Head of Health Care & Financial Analyst

Ladies and gentlemen, thank you for standing by, and welcome to the Q1 report conference call. (Operator Instructions) I must advise you that this conference is being recorded today, Thursday, 23rd of April, 2020.

I’d now like to hand the conference over to your first speaker today, Mr. Johan Ek. Thank you. Please go ahead.

Thank you, operator. Good morning, everyone, and welcome to Handicare’s Q1 presentation. My name is Johan Ek and as of this Monday, I’m the interim CEO of Handicare. I’m also, as some of you may know, a Board member of Handicare since several years. When it comes to this interim role, it’s a role that I have had for several times also in a listed environment, so I’m quite familiar with that. And as it comes to the management teams and knowledge of Handicare, I know very many of the people, and I feel very happy to be back working with a great group of people.

What we’re going to do today is that I go through a quick summary of Q1. Then I will hand over to Pernilla Lindén, who is our CFO. And after that, I will then talk a little bit more about what we have ahead of us and especially something that we call The Lift Up Program.

So if we go to the summary of Q1 2020. What you can see was that there was an organic revenue decrease quarter-over-quarter. This was mainly a result of COVID. We saw, on a positive note, a slight increase in the accessibility. This was mainly driven by good double-digit growth in North America in — during Q1, whereas we started to see impacts of COVID-19 in the — towards month of March, mainly in Southern Europe. And now, of course, this has continued and growing east to west, so to say.

When it comes to the Patient Handling business, there was a decline in revenue here and a continued weak performance in U.S., but good and quite solid performance in the Patient Handling EU business.

From a group EBITA perspective, we saw a decline, and this was really driven by the weak performance in North America. This quarter, we also decided on a goodwill impairment of EUR 25 million for the Patient Handling North America operations. Just to comment this quickly, this is driven by the fact that the planned turnaround here has already been delayed. And now on top of this, we will see an unprecedented market shock in the form of COVID-19, which is also kind of weakening the outlook for this business 2020 and potentially beyond that nobody knows yet. So this is the reason for that impairment. On a positive note, we saw good cash conversion. This was driven by good work on the receivables and payables side. On a positive note as well, we have now concluded the strategic review that the Board initiated during the fall. And I’m very happy to see that we now have had, during the past months first the Pulse divestment last spring, then now Vehicle Accessibility Denmark and Patient Handling Europe. So we are kind of on our way on the journey that we have communicated.

Before a technical change as of Q1 now we said there’s a new segment reporting where we split up Accessibility and Vehicle Accessibility just for your benefit. I think it’s needless to say that COVID-19 is on everybody’s mind today and of course, ours as well. And I think we are very much in the midst of it right now. We are seeing lower demand, of course, and it is very difficult to predict demand. What we do know is that Q2 will clearly, of course, be affected. But most likely, some of these effects will continue for the second half of the year as well. The situation for us, as for you, is very difficult to predict because we are dealing with a pandemic, and we cannot predict a pandemic. But what we do focus on is to work on the aspects that we can control. And one such area is, of course, our internal resources, our internal cost base. So we have taken strong actions in all our plants and all our subsidiaries to work on these internal resources and what we can do. And in short, the furloughs that have been initiated across all our factories in the U.K., the Netherlands in Vehicle Accessibility Norway, in the U.S., et cetera. This goes both on the blue-collar side and on the white-collar side. So we are working with these tools as good as one can in this very difficult-to-predict environment. Obviously, there’s a break on external spend of all sorts. So this is really where the main focus for us now is, given that the visibility is poor for the more medium term. Short to medium term, I should say, we are taking more actions than in The Lift Up Program, which I will come to at the later end of this section.

But first, I’ll hand over to Pernilla to go through Q1 more in detail.

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Pernilla Lindén, Handicare Group AB (publ) – CFO & IR [3]

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Thank you, Johan. I’m now on Page 4 of the presentation. Just before I start the presentation, I just want to say that throughout the presentation, the numbers are now including IFRS 16 impact for both 2020 numbers as well as the 2019 numbers.

If we’re then looking at the revenue for Q1, it amounted to EUR 61 million, which is a decline of 9.3%. If we exclude the divestment of Vehicle Accessibility Denmark, the decline was 1.8% in reporting currency; and in constant currency, a decline of 2%. As Johan was talking about, the COVID-19 pandemic have had different impact on our various business units. On a group level, there is a decline in sales from mid-March, mainly from our Accessibility business that was adversely affected by a decline in demand, but also in our Patient Handling North America in the form of delays in certain installation projects.

If we then take a look at it from a margin perspective, our EBITA ended at EUR 3.8 million with a margin of 6.2%, which is down 1.5 percentage points compared to last year. That is partly driven by the sudden drop in revenue caused by the COVID-19 pandemic, but also the weak performance in Patient Handling North America.

Gross margin at 42.9%, which is up 1.2 percentage points, which is mainly driven by the divestment of Vehicle Accessibility Denmark last year, but if we exclude the Vehicle Accessibility Denmark, then the margin would be up with 0.4 percentage points compared to last year, mainly due to favorable product mix in the Accessibility or Stairlifts business.

Operating expenses were down in absolute term. But if we exclude again, Vehicle Accessibility, it was slightly increased due to higher personnel costs. Our group costs were at EUR 2.7 million, which, apart from group function costs, also includes almost all IT costs for the group overall. And it was slightly lower than last year, and that was driven by lower IT costs.

We had a continued strong operating cash flow of EUR 6.4 million and a cash conversion over 100% for the quarter. This is mainly due to continued improvement working capital and good work on the accounts receivable and accounts payable. We had a leverage of 2.4x operating profit and Handicare has, overall, a strong financial position with the cash and cash equivalents amounted to EUR 38.8 million end of quarter 1.

Johan talked about it before. I’m — want to point it out again that during this quarter, we also tested our goodwill for impairment and due to the delay in turnaround and the current situation, we have decided to recognize a goodwill impairment of EUR 25 million.

Let’s turn over then to the Accessibility on Slide #5. Our Accessibility segment is 64% of our group revenue, and it is basically our Stairlifts business. We had an organic growth of 0.1%. Our North American business showed another strong quarter with double-digit growth of 21.6%, whilst our European business declined with 2.6%. We had a strong performance in the Netherlands and France, but started to see the negative effect of COVID-19 pandemic, starting with Italy, followed by Spain and U.K. and as a consequence of that, reduced demand for the quarter. If we look at the margin, we have an operating margin of 15.7%. Gross margin was up compared to last year due to favorable product mix.

Operating expenses were higher in absolute terms and in relation to sales due to higher personnel costs. Overall, the margin was 0.5 percentage points lower compared to last year, and that is mainly related to the COVID-19 pandemic effect of lost sales.

If we then turn to Page 6 in the presentation, the Patient Handling business. On the 9th of April, we signed an agreement to divest Patient Handling Europe. The purchase price amounted to EUR 30 million on a cash and debt-free basis. As the transaction is expected to be closed in May, the Q1 numbers include this business. From next quarter, this will be treated as discontinued business. The overall Patient Handling business declined with 7.2% organically due to lower sales in North America. The North America business entity showed a decline of 16.7%, partly driven by the lower sales of our institutional customer, but also due to a delay in installation of ceiling track projects due to the COVID-19 pandemic.

Adjusted EBITDA margin of EUR 0.2 million or 1%, that is 5.5% lower than last year, and this is driven by the weak performance in Patient Handling North America. If we exclude Patient Handling Europe, the adjusted EBITDA would be negative of EUR 1.3 million.

If we then turn to Page 5 (sic) [Page 7] in the presentation, that’s the Vehicle Accessibility business, which is our smallest business, which is now 7% of the total sales. And for the first quarter presented separately, as Johan was talking about. The overall revenue was EUR 4.1 million. We had an organic growth of 2.8%, mainly related to the higher ambulance sales compared to last year. EBITA of EUR 0.3 million or 6.2% margin that is primarily down due to the negative — the weakening of the NOK.

And now after that, I would like to hand over to you, Johan, again. Thank You.

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Johan Ek, Handicare Group AB (publ) – Vice Chairman, Acting CEO & President [4]

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Okay. Thank you, Pernilla. So if you turn to Page 8, really what I’m going to talk about now is what we are going to do to make sure that we become a stronger company that we continue on our growth trajectory and that we become more profitable. This all will happen under the umbrella of what we call The Lift Up Program.

If you turn to Page 9, I just would like to share a bit of perspective on how I see the company right now. I think it’s fair to say that Handicare has not performed as expected over a period now. We’ve seen, on the positive note, good growth and profitability in the Accessibility Stairlifts business. But we’ve seen poor and sometimes too volatile performance in some of our smaller businesses, most notably, of course, Patient Handling North America. The strategic review that was initiated by the Board last fall really kind of puts us in a position where we have the possibility for a new start in creating an even more focused company. As you know, we’ve had now successful divestment of Vehicle Accessibility Denmark, of Pulse before that. And now in April, we announced the divestment of Patient Handling Europe, which is due to close in the — during the month of May. All of this creates an opportunity for us to really kind of reorganize ourselves and make us even more focused. We also are in a very good position from a balance sheet perspective. This will support us in the growth that we have ahead of us, and it also gives some possibility for targeted M&A, of course.

Now if you just take stock of the starting point where we are now, today, Accessibility accounts for more than 90% of the EBITA of Handicare. We generate this EBITA in the market where we have good market positions, and we have a good growth opportunity in the one part of the market where we’re quite small, but the market is super interesting, and that is the U.S. So that’s a good platform for further growth, of course, for us. But already now, we have a good track record in growing. We have a 6% organic CAGR over the past 8 years in the Accessibility Stairlifts business. And this is, of course, something to build upon. In the group, of course, we still have Patient Handling North America. The focus here is to increase profits more than anything else. That’s what we are striving to do now. And then when we are in that position, we will assess options that we have, which either are growing within the group or other alternatives. So that’s something that we will assess at a later point.

As a result of this very positive transformation that has been done in Handicare, and I think also very much impacted by COVID-19, we have decided that we need to take even more action here and now for the short- to medium-term really kind of get our group together and build a situation where we come out stronger post-COVID than otherwise. And this is all that The Lift Up Program will kind of work on. Under The Lift Up Program, we have 3 phases. The first phase is quite focused on simplify. It will be between now until the Q2 report in mid-July. Here, the focus is really to create a more focused and agile organization, and that’s the kind of first step. When we get past through that hurdle, then we move into the second step, which is to focus on more profitability. That’s mainly on some of the gross margin components. This really includes procurement programs. This will include working on pricing and other commercial excellence initiatives. When we get past through that point, we are then all about pushing for as much growth as we can. But first, we need to ensure that we have good operating leverage in the group and that we see the results of the Phase 1 and 2. These are not fully sequential. They will kind of merge into each other as we go by. And really, to be honest, right now, the focus is on the first phase, which is focus and simplify. But over the next several quarters, we will keep you updated on the progress here.

If we turn to Page 11. Just as a quick reminder to all of us, why Accessibility? Why do we have such a strong focus on that? Why is that attractive? I think it’s attractive for a number of reasons. We have very positive demographics in this — for this business. The share of elderly is increasing. The share of people living longer with chronic diseases is also increasing. And this is, of course, increasing the need of our types of product solutions. There is also naturally a very clear preference for those who can to stay at home as long as possible. All of this is very good also for the society. The cost benefits of home care and staying at home versus going to long-term care or institutional care is very, very big. Hence, there is a very big kind of interest and demand for this sector as well and this part of investor where we work.

If you go to Page 12, please. Just a few words about attraction of this market. Today, our really strong hold is in the European market, which is roughly a EUR 500 million market, where the market growth has been hovering around 2% to 4%. This is where we have the lion’s share of our business. The other single biggest country and market for us is the U.S., roughly EUR 250 million market, where we have a small market share today, but a very interesting starting point and possibilities to grow. Here, the market has been 3% to 5%, historically. And of course, these are pre-COVID numbers. Right now, we are in the midst of the COVID storm, but there will, of course, come a situation when the market is back again. And we deem this to be a very attractive place to be in.

If you turn to Page 13. Just to summarize, now it’s all about the first step in The Lift Up Program. We will establish a more focused and agile organization. We will look at streamlining and avoiding any type of duplication of efforts within the group, and we will kind of build a structure that is really best fit-for-purpose for the new Handicare, which is even more focused on Accessibility. When we get through that phase, we move into the second phase, which is pushing more for gross margin as that [has better — and then] finally for the growth focus. Of course, we will have a very strong focus on the Patient Handling North America situation. It is — it needs to increase profits first, and then we will assess options here. I understand that there is, of course, some interest from your side also on being updated here. So what we will do is we will provide a first update on this program on June 12, and then there will be a subsequent update at the Q2 on July 17. So that’s The Lift Up Program in summary.

And now we will be very happy to move into the Q&A section. Thank you very much.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Your first question comes from the line of Kristofer Liljeberg.

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Kristofer Liljeberg-Svensson, Carnegie Investment Bank AB, Research Division – Head of Health Care & Financial Analyst [2]

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It’s Kristofer from Carnegie, 3 questions. The first one, I guess, it’s too early for you to start talking about potential cost savings in the first phase. But if you could maybe give some indication and how soon that could be achieved. My second question relates to the Accessibility, the Stairlift business, which were helped by the U.S. also sell in the quarter. Can you provide a figure for how much in Europe was done in the first quarter? And the third question is a bit about what you say here for the next few quarters or for the second quarter. You specifically say that profitability will go down. The fact that we’re using that wording, should that be seen as an indication that you still expect to be profitable on the EBIT line in the second quarter?

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Johan Ek, Handicare Group AB (publ) – Vice Chairman, Acting CEO & President [3]

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Okay. Thank you, Kristofer. My first — I understand your interest on getting a perspective on The Lift Up Program. Like you’re saying, it’s very early days, and we are working now to get all the target setting in place. That’s why, on June 12, I hope to be able to be quite specific on the ambition level of this program, and then there will be more information on — at the second quarter.

Now when it comes to the other question on Stairlifts, on the European side, this was kind of — we started to see signs of COVID disease, of course, increasing. It’s moving east to west, and it’s starting in Southern European countries. We saw that this will, of course, have a big impact on a Q2, but you shouldn’t put any — the world in demand is down in Q2. Clearly, this will have an impact on the group. And what we’re saying is that the second quarter will be — this year will be worse than last year. And — but as you surely understand, we are now only in April. May, June, very difficult to predict. So we are really working on what we can work on, which is the furlough mechanisms and kind of we take this week by week, and it’s impossible to give you precise guidance.

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Kristofer Liljeberg-Svensson, Carnegie Investment Bank AB, Research Division – Head of Health Care & Financial Analyst [4]

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When it comes to the furlough mechanisms, is it possible to quantify how much that could save you in cost. And also coming back to the effect you had in Europe in the first quarter. The reason I’m interesting to see how that developed, particularly in the latter part of the quarters, but I should be assuming indication for this — the first part of the second quarter. So if you take the markets where you saw the biggest impact maybe, I think you mentioned Italy, of course, for example, Spain. So if you take maybe March for those type of countries where you had the first negative impact in Europe. How much were sales down there, just roughly, to give some sort of indication of the magnitude?

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Johan Ek, Handicare Group AB (publ) – Vice Chairman, Acting CEO & President [5]

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I — again, I understand your question, but it’s too early to give that type of granular guidance. I apologize for that, but this is a unprecedented market shock. It’s very difficult to say exactly how events will turn out, but it will — it has a negative effect on demand, and we are working to mitigate that, but I cannot give you now more specific guidance.

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Kristofer Liljeberg-Svensson, Carnegie Investment Bank AB, Research Division – Head of Health Care & Financial Analyst [6]

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Okay. And you’re not willing to give any sort of — the take April in a market like the U.K., for example, that’s important for you. Is it possible to sell anything to all the people staying in the home, I guess. It has to be very tough.

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Johan Ek, Handicare Group AB (publ) – Vice Chairman, Acting CEO & President [7]

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This has, of course, an effect, as we said, on the press release from March 27, I believe. It was that we are serving mainly a group that are in the vulnerable group. So obviously, this has an effect on how we can operate. But like I said, we are in the midst of it now. It’s very difficult to predict. So I cannot give you more specific guidance now.

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Operator [8]

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Your next question comes from the line of Victor Forssell.

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Victor Forssell, ABG Sundal Collier Holding ASA, Research Division – Analyst [9]

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Victor Forssell here from ABG. Can you hear me?

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Johan Ek, Handicare Group AB (publ) – Vice Chairman, Acting CEO & President [10]

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Yes. Thank you, yes.

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Victor Forssell, ABG Sundal Collier Holding ASA, Research Division – Analyst [11]

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Great. I think I’ll start, touching upon Kristofer’s first question because I think that when we spoke last time, or in a comment, I’m not sure when that was, I think we were talking about Italy — orders in Italy being down some 30% or so, just a rough number in terms of order intake in the end of March. Is that something you can comment on with this regard?

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Johan Ek, Handicare Group AB (publ) – Vice Chairman, Acting CEO & President [12]

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No, not really. I mean, like I said, I think we are in the midst of the pandemic right now. Most of Europe is under some form of lockdown. This has an effect on how we are able to deal with our customer base. And we focus on mitigating as much. So we’ll see demand changes. We try to mitigate for that of how this plays out and to give you kind of the specific guidance that would help you. It’s not possible to do it right now.

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Victor Forssell, ABG Sundal Collier Holding ASA, Research Division – Analyst [13]

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Okay. And if I perhaps ask you differently, I think you’ve been able to conduct sales in the U.K. remotely. Is that the solution that you’ve had for other markets as well in Europe? Or is it just inside the U.K.?

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Johan Ek, Handicare Group AB (publ) – Vice Chairman, Acting CEO & President [14]

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I think it’s fair to say that, of course, we’re trying to come up with ways of serving customers otherwise. But to be honest, the very integral part of this, of course, is also to be able to install. And as I said, many of the customers are in that vulnerable segment. So obviously, being in the situation where Europe is now and where the U.S. is, this is — it’s a very challenging environment to operate in. So I cannot give that type of specific guidance now.

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Victor Forssell, ABG Sundal Collier Holding ASA, Research Division – Analyst [15]

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Okay. Fair enough. And if I turn to Patient Handling, could you perhaps give us any more flavor on the Q1 figures here in terms of the split between Canada and U.S., both in terms of growth and perhaps on profits, if you could split that up?

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Johan Ek, Handicare Group AB (publ) – Vice Chairman, Acting CEO & President [16]

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Yes. We typically don’t give that guidance. So we will not start today either, sorry for that.

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Victor Forssell, ABG Sundal Collier Holding ASA, Research Division – Analyst [17]

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Okay. And not on the growth rates either?

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Johan Ek, Handicare Group AB (publ) – Vice Chairman, Acting CEO & President [18]

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Well, I think it’s fair to assume that there is a decline on both now and again, in which state the world is right now. So there’s a decline on both. I think that I can tell you.

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Victor Forssell, ABG Sundal Collier Holding ASA, Research Division – Analyst [19]

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Okay. And last question before I get back into the queue. Regarding The Lift Up Program and perhaps the time frame regarding the different phases, and I fully appreciate that COVID might cloud some of this short term. But what’s your base case for that time frame in the different phases?

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Johan Ek, Handicare Group AB (publ) – Vice Chairman, Acting CEO & President [20]

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I mean, like I said, we are pushing for the first phase of this program so that we can give you an update, kind of a partial update already on June 12. And then more detailed when we come to the Q2 on — report on July 17. So that’s really what we’re pushing through with the first step. The second phase will then — I would say that there’s probably another couple of months. And then when we — as we start exiting the year 2020, we should hopefully be in a position to see that. Now it’s all about us having demonstrated some operating — kind of better operating leverage. And based on that, we take decisions on pushing for growth, of course.

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Operator [21]

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(Operator Instructions) Your next question comes from the line of [Andreas Felcher] from (inaudible).

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Unidentified Analyst, [22]

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Could you please tell us, you have a margin target of 12% in the medium term. But how much of that relates to group cost? So group cost is running at EUR 11 million roughly on an annual basis now. What should group cost be? And I’m not talking about the current environment, I’m talking about an environment in 24 months where everything is normal. What do you expect group cost to be in absolute terms then?

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Johan Ek, Handicare Group AB (publ) – Vice Chairman, Acting CEO & President [23]

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Yes. I mean, like I said, we are now in the start of The Lift Up Program. On June 12 and July 17, we will be providing more granular information. And this would be a typical question for that — those 2 dates.

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Unidentified Analyst, [24]

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Okay. Because yes, I guess, since you’re putting 12% out, there must be thinking at this point of time. And of course, you can reach that by selling off the recipes in Handling and save some cost, but you don’t have any details on that here, no?

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Johan Ek, Handicare Group AB (publ) – Vice Chairman, Acting CEO & President [25]

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No, no. I guess — if you’re referring to the general targets. Again, we are in the midst of COVID. We are launching The Lift Up Program. We will provide more of an update on June 12 and July 17. And so that’s kind of what we’re working on. So it’s a bit too early to put strict numbers on that question, for example.

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Unidentified Analyst, [26]

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Would you be willing to discuss the value of the U.S. Patient Handling division that’s left?

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Johan Ek, Handicare Group AB (publ) – Vice Chairman, Acting CEO & President [27]

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No, not really. And the only focus we have now is to, as I told you, increase the profits here. That’s what really kind of the one and only focus area now is. And then after that, hopefully, we have put ourselves in a good position to be able to grow profitably and then based on that situation, we can assess options. So I wouldn’t want to speculate on that. It’s not for here and now.

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Operator [28]

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Your last question comes from the line of Kristofer Liljeberg again.

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Kristofer Liljeberg-Svensson, Carnegie Investment Bank AB, Research Division – Head of Health Care & Financial Analyst [29]

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So one follow-up there. So for Accessibility bit, if you have a customer in Europe that wants — that really wants to establish that now. Are you allowed in all European countries to do the home visit for nationals and installing? Or is that the problem due to the lockdown?

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Pernilla Lindén, Handicare Group AB (publ) – CFO & IR [30]

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So this is Pernilla here. We are still able to install in most of the places, obviously, dependent on how harsh the government has been when it comes to the lockdown. It’s easier and harder in the different countries. But we still have our manufacturing plant open, and we are installing where we can.

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Kristofer Liljeberg-Svensson, Carnegie Investment Bank AB, Research Division – Head of Health Care & Financial Analyst [31]

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And it’s only in countries where you’re not allowed to still have a visit?

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Pernilla Lindén, Handicare Group AB (publ) – CFO & IR [32]

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We — no, not one country that we are not doing anything in. But it’s, of course, as you are aware of, I mean, when it comes to certain countries, there is very strict lockdown. So obviously, it’s very few.

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Kristofer Liljeberg-Svensson, Carnegie Investment Bank AB, Research Division – Head of Health Care & Financial Analyst [33]

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Okay. And also, is there anything you can do and are implementing to — for the customer to feel safer. If you could give some protective gear sort of, I don’t know? Is that something that’s rather than at all?

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Pernilla Lindén, Handicare Group AB (publ) – CFO & IR [34]

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Absolutely. Of course, we are using protocols when it comes to the — what the government is telling us to do, making sure that we are washing our hands in a good way and securing that and also then having antiseptics products, so we are able to use that and also then securing when it comes to order handling to secure the best way for our customers when they’re coming in stores. So all of those measures that you could think of. We also have thermometers for our installers, et cetera, so we can check that everybody is okay.

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Operator [35]

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Your next question comes from the line of Emmanuel Figueiredo.

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Emmanuel de Figueiredo, LBV Asset Management LLP – CIO [36]

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It’s Emmanuel from LBV Asset Management. I just have 2 questions. One is, I understand you don’t want to give guidance. It’s very clear why because it’s impossible. But I think you could help us with telling us what is your either monthly or quarterly fixed costs because we can make our own assumptions on what revenue can be, but I think you could help us what is your monthly fixed cost run rate? That’s one question. And then the second question is, although it’s passed now, but can you give a bit more color on the divestment of the Patient Handling in Europe, mainly the price you got. What is the capital loss, which is going to be put through the P&L? And if you are satisfied with the price you got for that business?

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Johan Ek, Handicare Group AB (publ) – Vice Chairman, Acting CEO & President [37]

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Yes. I’ll — if we start with the guidance, so we will not be providing monthly guidance of any sort. When it comes to the Patient Handling Europe, yes, we are pleased with this because it’s a good first step to continue the transformation. So we are happy with that. And I don’t know Pernilla, from your side, if you have any comments on…

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Pernilla Lindén, Handicare Group AB (publ) – CFO & IR [38]

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So what we can say now is that the purchase price amounted to approximately EUR 30 million. And overall then when the transaction that triggered the write-down of goodwill and other intangible assets. And that is before the transaction costs and we have estimated that to be EUR 12 million. And as the closing is in May, all the final calculations and the final summary of this will be presented in the Q2 report. So it is too early to have that discussion. We need to do the closing first.

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Operator [39]

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All right. There are no further questions at this time. Please continue.

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Johan Ek, Handicare Group AB (publ) – Vice Chairman, Acting CEO & President [40]

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Okay. All right. Thank you very much for showing interest, and thank you for good questions. We look forward to speaking you — speaking with you soon again now. Thanks very much. Bye-bye.

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Operator [41]

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That does conclude our conference for today. Thank you all for participating. You may all disconnect. Speakers, please [come back].

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