Good morning, and welcome to Philips' Third Quarter 2021 Results Conference Call. I'm here with our CEO, Frans van Houten; and our CFO, Abhijit Bhattacharya. Frans and Abhijit will take you through our strategic and financial highlights for the quarter, and after that, we will take your questions. Our press release, the related information slide deck as well as FAQs on the recall notification of certain sleep and respiratory care products were published at 7 a.m. CET this morning on our Investor Relations website. The full transcript of this call will also be made available today on the website. As mentioned in the press release, adjusted EBITA is defined as income from operations, excluding amortization of acquired intangible assets, impairment of goodwill and other intangible assets, restructuring charges, acquisition-related costs and significant one-off items. Comparable growth for sales and orders are adjusted for currency and portfolio changes. Over to you, Frans.

Yes. Hello, everyone. Thank you for joining us today. As the COVID-19 pandemic continued in the third quarter, our teams remained focused on delivering what we call the triple duty of care: meeting customer needs; safeguarding the health and safety of our employees; and ensuring business continuity. We remain extremely focused on implementing the necessary corrective actions for patients affected by the component quality issue that we announced earlier this year. We have mobilized all necessary resources across the company to address this because patient well-being remains at the heart of everything we do at Philips. So this is a top priority for all of us. Our strategy and portfolio continue to resonate very well with customers. In the third quarter, we were encouraged by strong comparable order intake growth of 15% in Diagnosis & Treatment and 21% in Connected Care, excluding the impact of the partial ventilator order cancellation in Q3 of last year. The strong momentum was driven by a positive hospital CapEx environment but also the strength of our portfolio, resulting in an all-time high order book for Philips, as shown on Page 28 of our presentation. We also signed 19 additional long-term strategic partnerships across the world, demonstrating the trust hospital leaders have in our ability to enhance health outcomes, lower the cost of care and improve patient and staff experience. Our comparable sales declined 7.6% in the quarter on the back of 10% growth in Q3 2020. As anticipated, this quarter's sales were impacted by approximately €150 million headwind as a consequence of the sleep recall, as we are prioritizing the remediation of affected devices in use by patients. In addition to that, we faced intensified global supply volatility and issues such as the shortage of electronic components and increased shipping times. This resulted in…

Thank you, Frans, and thank you all for joining us today. Let me provide some color on the third quarter comparable order intake growth of 47%. You will remember in Q3 last year, we had the partial cancellation of the ventilator contract in the U.S., and that provides a favorable comparable base. When taking out this effect, order intake growth is still a strong 17%. Diagnosis & Treatment order intake grew by 15% in the third quarter, driven by double-digit growth in MR, in CT, in Ultrasound and in Image-Guided Therapy. Order momentum was very strong in North America, Europe, Asia Pacific and most growth geographies. China delivered mid-single-digit order growth, with short-term momentum affected by additional procedures required for importing health care products. We have a strong position in China, including our R&D centers, our factories, local for local innovation and our fully Chinese management team and are further investing in local for local products and capabilities. Order intake grew 270% in Connected Care, and that is 21% when excluding the impact of the partial cancellation of the ventilator order last year. Patient Monitoring orders grew 20%, building on a similar growth last year as a result of a fundamental shift in adoption of our patient care management solutions in both high- and low-acuity care settings. Comparable sales declined 7.6% in the quarter on the back of 10% growth in Q3 2020. As Frans mentioned, in addition to the high comparison base and the anticipated headwinds in our sleep business, we also faced stronger-than-anticipated supply chain disruptions at the end of the quarter. I will elaborate further on that a bit later. Coming back to the performance of our businesses. Diagnosis & Treatment comparable sales grew 10% in the quarter, with double-digit growth in Image-Guided Therapy and Enterprise Diagnostic…

The first question comes from Veronika Dubajova from Goldman Sachs.

Frans, Abhijit and Leandro, I have 2, please. My first one is I appreciate you've not given us 2022 guidance, but I'm just trying to kind of get your impressions and thoughts on the pulls and pushes as you head into next year. On one hand, looking at the order backlog, I think this is the highest I remember seeing it. And I followed your stock for a while, so clearly, there are some real revenue opportunities as we move into next year. At the same time, I think, Frans, you were quoted on Bloomberg this morning talking about wage inflation, and I suspect some of the inflationary cost pressures on the supply chain side also continue to bite into next year. So my first question is really kind of your degree of confidence, both on the revenue and the midterm margin outlook as it translates into 2022. And maybe what are the incremental upside and downside risks that you see at this stage? And my follow-up, I'm going to ask it now, so we don't have to go back and forth. But just a quick word on the failure rate that you're observing at the moment with the DreamStation as you go through the repair and replace process. How far is it off the initial figures you had given us? And then any time line for the VOC studies, if you can give us an update on that.

Yes. Veronika, 2022 guidance, right? And so where shall I start? Order book, indeed, very promising, underpins already significant part of revenue for next year. Innovation lineup, very strong, I would argue, the strongest in a long time. That also bodes well, and we expect to continue to rack up good orders. Also on the consumer side, we think we are well positioned. Then I think we need to take into account comparables, right, I mean, year-on-year comparison. First half of this year, strong comparable revenue growth, right? That makes the year-on-year comparison a bit more challenging. Then we need to take into account that the sleep business will only resume with revenue coming through in the second half as we complete the field action on the recall. So therefore, you have quite a few puts and takes in constructing the revenue forecast. And we said in the press release, that as we work through these headwinds, we resume our upward trajectory on growth, right? And we have not been more precise. I think we should do that only at the end of the year. But clearly, at the second half of the year, we want to be there, right, on that trajectory. Detailing out the first half of the year, we'd like to keep that in our pocket for a moment as we do more calculations as we get closer to it. The -- then we also said we will have margin expansion next year. And despite inflationary pressures, we feel confident that we can drive margin expansion. Abhijit referred to, if you would exclude the sleep impact that actually we saw a 500 basis point profit expansion, right? So we feel that seeing the forest for the trees has been a little bit difficult this year, but that…

That was very comprehensive, Frans. Can I just confirm, as you think about 2022, I mean, I guess you have the midterm guidance out there, right, which is the 5% to 6% sales growth and the 60 to 80 bps adjusted EBITA margin improvement. Would you expect 2022 to be in that range already?

Well, I’ve tried to say that we need to grow into that range rather than be there on January 1.

The next question comes from Hassan Al-Wakeel from Barclays.

I have 2, please. So firstly, following up on your commentary on 2022 and more specifically on Connected Care, we've seen a more meaningful impact to margins this year in Connected Care, and I wonder how you think about this evolving into next year. Do you think the business can grow the top line or demonstrate margin expansion, albeit from a low base as the recall continues to weigh for a significant chunk of 2022? And then secondly, in D&T, do you expect a sequential acceleration of growth into Q4 based on the current phasing of orders? Or could the supply constraints mean that this is now unlikely? And then also, what about 2022? And are you confident about 5% to 6% growth in D&T?

Yes. Let's start with Connected Care. There, we will have the complexity of comparables and as the sleep business was affected from the second quarter onwards, right? So obviously, as the sleep business resumes, we should see a very strong growth in the second half of the year. I'm looking at Abhijit, whether you want to say anything more to that.

Well, I think I mentioned it earlier as well. Overall, if you look at the Connected Care margins, excluding the Sleep & Respiratory Care business, they are holding despite the lower sales on the back of tough comparables last year and the whole supply chain situation. So I think we've made a good step in margin, and we will return to growth, and Q4 margins will be good as well, given that it's a big quarter, so similar to what you said, Frans. And on the D&T Q4, yes, Q3 was, as we said, already double-digit growth. We expect it to be in the similar range, maybe slightly up but again depends a bit on the supply chain volatility. Current outlook is it will be a bit stronger than Q3.

And 2022 for D&T based on the current order book?

Yes. 2022 will also be a strong year. So the 5% to 6% is very doable, given where we are in our order book at this point.

That's helpful. And if I can just ask a follow-up on sleep. Could you talk about the impact that you're seeing on the mask side of the business? I remember this wasn't a significant impact in Q2, and I wonder if that's changed in Q3.

Yes. We have focused our sales force more on masks now and, of course, on the other products that we still have. And whereas you would expect a decline in masks commensurate with the decline in systems, actually, that decline has been much less, suggesting that we were able to sell masks on a stand-alone basis into the installed base, right? And I think that’s great. We didn’t call it out in our report here because it’s not that significant, but still, we are pleased that we have been able to ship more masks than you would normally assume.

The next question comes from Lisa Clive from Bernstein.

Two questions, both on the recall. You got FDA approval for repairing the devices and also other international approval -- regulatory approval. Was that in line with your expectations in terms of the timing when it happened in September? I'm just trying to understand why you're still estimating that 2/3 of the devices will be replaced. Is this just the most cost-effective approach? And then from a business perspective, could you just give us an estimate of what percent of your CPAP machine sales are generally replacement devices? Because I imagine, if you are sending out a lot of DS2s that the replacement cycle will be a bit lower in the next few years. And then just last question on the VOC testing, what sort of information will you be disclosing? Is it things like how long the foam may release VOCs when it's breaking down? Is it 3 days? Is it 3 weeks? Is it 3 months? I'm just trying to get a bit of a better understanding in terms of what kind of information we are likely to see next month.

Okay. Lisa, the approvals were by and large in line with expectations, maybe a tad slower in coming – there were a ton of questions that we had to work through, and also the paperwork to document all these processes was enormous and to a degree, still is. But we are out of the gate now, and I think that’s what matters. And you have seen some of the numbers coming through already, right? So maybe it could have been a few weeks faster, but it is what it is. The repair and replace cycle – or repair and replace proportion is still roughly in line with what we signaled earlier. We felt it was a bit too early to count on a benefit there. It could happen. But for a repair process, you need the return flow of units affected. That return flow takes time to organize. And once we are fully underway with the circular model there, we will be in a better position to tell you the quality of the units that are returned, right, whether they are, in fact, worthwhile to repair. You could argue that, hey, if a patient has a unit in bad shape, you should give back a unit of equal status. But that’s not how it works, right? You need to – as we touch the unit and the repair protocol is classified as a remanufacturing process as opposed to a field repair, that also means that high quality standards apply to the repair process, right? And therefore, not all units can be reworked, so to speak. That’s taken as an assumption already into the provision, so I’m not flagging you a new risk, right? But that is why we are cautious to already cry victory over a better repair-replace ratio as…

The next question comes from Scott Bardo from Berenberg.

Yes. The first one, please, just on, again, the sleep and respiratory franchise. I think last quarter, you provided an update that there were some 2.2 million active device registrations for DreamStation for your field action. Forgive me if I missed that update this quarter, but I wonder if you can help us understand whether that's trended up or down just to get a sense of continuity. And furthermore linked to this question, please, again, on your broader study set that you are conducting currently, can you help us understand the potential ramifications for this update? Could it indeed be enough to change the FDA's current recommendations on DreamStation? Is that the sort of magnitude, the data package we should expect? Some comments there would be appreciated. And second question, please, if I may. So thank you for the comments about sort of returning to your communicated trajectory. Of course, this year, we're not seeing much in the way of growth or margin expansion, I think, for obvious reasons. But what I'd like to understand is, do you envisage any catch-up effects for the margin and growth loss this year? Or are we actually going to be growing Philips from a lower base now?

Yes. Scott, on the sleep registered units, we are currently at 3.3 million registered devices. That does not mean that all registered devices are qualified devices for repair and replace, right? Because we basically, after they are registered, need to determine whether they actually have been used – in use or whether they have just been taken out of the cupboard and put on the registration list but were not in active use. Then the study set, and you asked that in conjunction with, will it be enough for the FDA to change their view? I need to understand a bit better what your question is because if you read the FDA advisory on their website, they actually say, continue to use, contact your physician, consult your physician and then decide what to do. So in fact, the FDA is not on the same page as Philips field safety notice where we said basically stop use, then consult your doctor, and then decide what to do, right? And there’s this discrepancy between the FDA advisory and our own advisory, is something that doctors and patients have flagged this something that they would like to see aligned. Let’s say, we were, of course, the ones that put the advisory out in the first place. And then we are not doctors. We cannot do the risk-benefit analysis as doctors and regulators can do, right? And so the FDA came to a slightly different conclusion as to continued use, whereas we said worst-case scenario was a stop use scenario. So there is that discrepancy out there already for actually quite some months, actually. The new data set that we are getting, we cannot anticipate what is going to be the outcome of that, right? I mean, if – otherwise, I would publish it today. So we will need to get all the expert opinions in as to the nature of the compounds, potential toxicity of the compounds, and therefore, what potentially the health hazard that is if you move away from that kind of initial worst-case scenario. I’m afraid we’ll still have to wait for that study to be published before we can expect also the FDA to do their evaluation of that, right? So it will take a little bit of time. Then on your questions on the trajectory, we flagged that we resume the trajectory. We did not indicate a catch-up benefit. Obviously, I’m ambitious and I would love to do that. But with the inflationary pressures that we talked about earlier, at this time, we signaled that we would like to come back to the 60 to 80 basis points, but we are not signaling any catch-up effect.

The next question comes from Julien Dormois from Exane BNP Paribas.

Frans, Abhijit and Leandro, the first one would relate to the supply chain volatility. I think you have stressed that you experienced €150 million headwind at the sales level in Q3. I was just curious whether you could elaborate on which division is the most impacted by this. So if you could detail that for each and every of your 3 divisions, that would be very helpful. And the second question relates to a comment you made also about the positive CapEx trends you see from hospitals. I would be very keen to get any sort of visibility on whether you believe this is just a recovery to a pre-COVID situation, or whether there is really something structural happening at the hospital level and whether we should expect a stronger market for equipment going forward, at least for a couple of years.

Okay. Abhijit, do you want to take the first? And I'll take the second.

Yes. Maybe, Frans, you start with the second question, and then I'll give the detail. I have it but not the exact.

Sure, sure, sure. The positive CapEx trend actually came on the back of quite some slowness in the markets in the years before. I think on the capital equipment, on imaging, we know that the installed base is quite aged and old. I have heard many hospital systems wanting to build diagnostic centers in the community outside of the main premises of the hospital, and that could coincide with an investment cycle that will take a few years rather than only a few months. Probably the older equipment units will stay in place in the hospital, but these more efficient and more patient-friendly diagnostic centers that can operate at a lower cost and would potentially also not be affected by a COVID breakout seem to be a trend going forward that we recognize in multiple parts of the world. So that, I think, is good news. Same with ambulatory surgical centers, ASCs, where elective procedures can go in a patient-friendly and safer manner versus the main hospital campus. So we also see quite a few plans there that I would imagine is there for at least the next few years. Also the backlog of elective procedures points to building more capacity. The CapEx trend in China always a bit higher than the Western world will continue. There, we see a strengthening of local for local rules, which basically say that your product needs to be registered with the NMPA as a locally produced product. So it does not mean that it has to be a local brand. It has to be a company like us who produces it completely local and the NMPA saying it is a local product. Then on monitoring and Connected Care-related areas, I think we all remember 2019 when we were saying what was flat, and you guys challenged us, when is it not going to be flat anymore? Well, COVID was a big accelerator for the insight that monitoring at other care settings is appropriate, discharging patients faster with wearable sensors and then using command centers to oversee cohorts of patients remotely yet leveraging telehealth, all of that has come to an acceleration. And so basically, we see finally this whole vision of Connected Care coming to fruition. If we look at acquisitions like BioTel and Capsule, both of which are bellwethers for this kind of trend, then I can tell you that strong double-digit growth is continuing there across the board. So we think that Connected Care will structurally have a higher growth rate going forward, of course, in 2022, initially still with some puts and takes due to year-on-year comparisons but structurally should be at a higher growth rate. I look to Abhijit, whether you have the data.

Yes. Yes, yes. So Julien, just to be clear, the €150 million we talked about is the, let's say, the higher impact on the supply chain volatility, right? So out of that, about €20 million was Personal Health because some of it was already factored into the plan. The unfactored element was about €20 million, and the rest was roughly evenly split between Connected Care and Diagnosis & Treatment with maybe Connected Care slightly higher than the Diagnosis & Treatment.

Yes, Patient Monitoring and IGT. In fact, all 3 businesses are high-profit businesses that were affected, which is unfortunate.

The next question comes from Patrick Wood from Bank of America.

Perfect. I've got 2, please. One, just more top-down, I guess, on China overall. We get a lot on the news about different macroeconomic things happening. We obviously saw the GDP data. I'm just curious what you guys are seeing given you have a huge business there from the Chinese consumer. You obviously have a lot of data insight as to how the consumers look in that market. I'm just curious for your views there. And then the second one, just again on the supply chain situation. I think it was €150 million primarily in September, I think that was. And thank you very much, Abhijit, for giving a sense for Personal Health and the implication for Q4. I mean, should that mean that we should take that overall outside of just the Personal Health at €150 million and say, the Q4 impact could be double that or something like that, i.e., €300 million? I'm just trying to understand if it was just September that did the €150 million. Is it getting -- is it a larger impact in Q4? Or is there a functional situation where the supply chains are getting a little bit easier actually as you guys are managing to work through some of the blockages there?

Yes. Let's not keep that hanging because the Q4 issue is about €200 million estimated.

Correct.

So let's not have anybody think that it is going to get out of hand. €200 million is bad enough, of course, but we have mitigation actions in place to avoid a much bigger number. There is some volatility around it, so you could say €200 million was for us kind of the midpoint of some scenarios. But shipping should get better gradually.

And the €150 million is not all in September. Bulk of it was in September, so you can say 2/3 was in September and 1/3 in July, August. So you saw it accelerating in September.

Okay. Then on the China question, consumer demand is actually good. We see a lot of interest in consumer devices. Of course, we have to tackle local brands that have become stronger. We also have seen a reduction of inventory in the channel. So sellout has been strong. We were hampered by supply constraints due to, let's say, the issue on components already flagged. I think for the fourth quarter, we are expecting -- Abhijit, we able to say anything about fourth quarter China?

Yes. I mean, like you mentioned, order intake was good, and I think that will continue. Also this sales momentum is slightly slower. But for PH, we continue to have growth. So I think that will – the trend of Q3 will continue into Q4.

The next question comes from Falko Friedrichs from Deutsche Bank.

I also have 2 questions. The first one on the product recall, and would you be able to provide some feedback from doctors that you're getting, doctors that used to prescribe your -- or still prescribe your sleep apnea product? And with them, do you sense that there is still a big appetite to definitely stick with Philips post the recall? Or do you rather sense that it can be quite tricky to gain back some of the share you are probably currently losing to your big competitor? So some qualitative info would be helpful here. And then the second question on your free cash flow. We noticed that part of the decline was driven by the consumption of provisions, most likely for the recall. Are you able to quantify that for us? So how much of the provision you released in the third quarter now?

Yes. Falko, we have heard from both doctors as well as from DMEs, the distributors, that they are judging us more on how we handle the situation rather than that it happened in the first place. And we hear that doctors appreciate on how we do the communication and support them with intense information. They also told us that why they like us. For example, the informatics applications around sleep devices and the ability to observe trend lines, they like that very much. They've also said that they don't want to end up with a situation where there's only one big supplier, right? So on the basis of all the feedback, we expect to be able to recoup our market share maybe not immediately but over time. And we are also planning already, in parallel to the remediation, a comeback plan where we will go out, of course, with all energy to fight back and to regain and recoup our share. Then on the free cash flow, Abhijit.

Yes. For Q3, I think we consumed around €60 million out of that, out of the provision. So that, of course, kept the cash flow down a bit in the quarter. But like we said, year-to-date, for the first half, we were well ahead. So we remain in line to get to the target for the year, excluding, of course, the cash impact of what we have to spend on the recall.

The next question comes from James Vane-Tempest from Jefferies.

Firstly, you've lowered the restructuring cost guidance, and I think you said you expect it to be even lower next year. Just wondering if you can provide any more color around this. Is this because restructuring charge has been pushed back, and/or you expect fewer changes are required in the underlying business? And then my second question is, you mentioned sort of growing into the 60 to 80 bps margin expansion next year. And given the first half comparison which you highlighted on the call, is it fair to say you're more likely to see that more in the second half of next year?

Yes. So on the restructuring, we have not pushed out any restructuring because, of course, that would impact the productivity programs going forward. In the -- at the start of the year, given the pandemic and, let's say, the longer-term horizon, we had probably thought we may have to go deeper. But with the resumed demand, et cetera, and the strong order book, we don't need some of that restructuring. So therefore, it's good that we also bring that the adjusting items down a bit earlier than planned.

Yes. And then on the phasing, when Veronika asked the question in the beginning, I said we have to grow into that trajectory. We will not be immediately on that trajectory on January 1, right? So the second half of the year will be stronger than the first half of the year. And I hope that, that answers your second question, James.

The next question comes from Wim Gille from ABN AMRO-ODDO.

Yes. Wim Gille, ABN AMRO-ODDO. A pretty simple one, I think. The Other segment was quite well this quarter, in particular related to the phasing of royalty settlements. Taking also into account the disentanglement of Domestic Appliances this quarter, it gave us a bit of feeling where we should pitch our adjusted EBITA numbers for Other going forward, so moving more into 2020. Is it fair to assume that we will have structurally better adjusted EBITA results in Other on the back of this?

Yes. Wim, so what I said about the royalty was it's a phasing between Q3 and Q4. So overall, we have kept costs lower this year, and therefore, we reduced our guidance by €30 million lower. Going forward, typically, what I do is in Q1, I gave a very explicit guidance for the year. So I just request you to be a bit more patient, and then we will do all our puts and takes and come back with a view as we start next year.

Okay. Maybe to put it differently then. Can you remind us just what the impact is going to be of the royalty income from Domestic Appliances on an annualized basis?

It’s going to be plus/minus €60 million or so.

We have a follow-up question from Lisa Clive of Bernstein.

One follow-up on the recall. Am I correct that every device that's returned for either replacement or repair will actually have its foam tested? And if yes, would you be able to disclose to us at some point the proportion that show any sign of breakdown once those results are available to you?

Lisa, every unit that comes back will be photographed and inventorized. Tested is a big word because we are not necessarily putting millions of devices through a comprehensive test, but they will be inspected.

The next question comes from Kate Kalashnikova from Citi.

Frans, Abhijit, this is Kate Kalashnikova. For imaging diagnostics, on one hand, hospitals are under pressure due to COVID. On another hand, your costs are increasing due to supply chain challenges, high logistics cost. So how do you think about the net impact of this change? And could you also comment on competitive dynamics when it comes to price?

Yes, hospitals are under pressure, but there's also a lot of government money going into shoring up hospitals and expanding the capacity of health care, right? So we should not take this pressure thing too much, right? I spoke earlier about diagnostic imaging change being built. I spoke about a strong CapEx environment. A lot of the cost of radiology is actually not equipment but labor, and there's a lot of efficiency to be gained in that whole workflow. And this is also why the Philips informatics solution is so appropriate. I mean, our radiology command center, ROCC, and the radiology solutions suite can drive productivity in radiology centers by over 30%, which is fantastic if you think about having more patients that need to be diagnosed, et cetera. So overall, I look with optimism towards the market. There is enough to be done. What you will see is that many hospitals will buy good enough rather than the most super-duper machine. It's all about diagnostic confidence and efficiency rather than on the features. What we observed with the Spectral CT 7500 is that it gives a confident diagnosis in record time, right? This is very important. And reconstruction time is very fast. And given that you get spectral information without having to predetermine whether you want conventional or spectral imaging is a huge benefit, right? The fact that our MRI is helium-free and doesn't need expensive quench pipes in the real estate, right, is great, especially when now new diagnostic imaging centers are going to be built that you can build basically structurally with lower real estate costs, right? And so some of our competitors continue to emphasize the academic centers as the only determining factor, but I can tell you that most C-suites are very focused on productivity instead. So overall, we think that we can hold our own in terms of competitive position. And yes, I think on pricing, health economics play more and more a role. And then it is important about lifetime cost and rather than on the initial price. So I think we can maintain our position there.

And as a follow-up, what proportion of your D&T sales in China is produced in China currently?

Yes, quite a lot already. I mentioned that the criterion is registered as a local product with the NMPA. So it's not just are you, let's say, making it locally, but is it also correctly labeled as a local product. We are in line -- more or less in line with our competitors.

Are there any plans to increase it further?

Yes, somewhere around the 40% or so on a formal basis, goes up rapidly as we understood that this was important. So we have been on a path already to localize manufacturing and increase the local labeling. The NMPA takes quite some time to process these requests. So we are a bit dependent on the regulator there. But otherwise, I think we are on a good path forward.

The last question is a follow-up question from Veronika Dubajova from Goldman Sachs.

Just a quick one follow-up actually on the China topic. I know you've mentioned some softness in order momentum in Q3. Just curious if you've seen improvements in that as you move through the third quarter, and if you can give us sort of a first look on how the China order momentum is progressing in the fourth quarter and your best guess for when you might see a return to normalized order growth in this market.

We actually, I think, flagged that we had mid-single-digit order growth in China. We flagged some revenue delays also in China, partly also by the processing of all these IPPA regulations. That's, I think, where we stand. So it was more a revenue recognition that was a bit slowed versus the order momentum as such. Anything else, Abhijit?

No. I think last year, I think the comparables in Q4, we had 17% order intake growth, so that will have some impact. But in general, I think China is slower than it used to be. But as soon as the guidelines get clearer, you will see momentum picking up there.

And any time line for that? Is that a '20 -- Q1 '22 is a realistic expectation for that?

Very difficult to say, Veronika. It’s a thing that the government is working through. And of course, they see also the impact of things that are stuck in the pipeline, so we’ll have to wait and see.

Thank you, Mr. van Houten and Mr. Bhattacharya. That was the last question. Please continue.

Okay. Well, thank you for all your questions. Let me summarize by expressing my conviction that we are going to be on a path upwards and work through the challenges that you have asked numerous questions about. I do believe that the end goal of high teens profitability by 2025 remains intact. We have a competitive set of innovations. We are going to resume our growth and margin expansion. And we hope that we will have, let's say, the sessions with you to go deeper on those questions as soon as possible. In the meantime, thank you very much for today, and stay tuned.