Good morning, everyone. So welcome to our second quarter result presentation. I will cover the highlights and then hand over to Julie, our CFO, was a new CFO but she's not new anymore, and she will take you through the numbers. When she has finished, I will update you on how we've progressed on delivering on our priorities. And as usual, we'll take questions at the end. So Smith & Nephew produced a good second quarter in line with our expectations. The revenue increased 3% to just under $1.1 billion, and within this, we generated standout contribution from the emerging and international markets, as well as negative pressure on therapy. The Healthpoint acquisition is performing very strongly, and we continue to drive good growth in Sports Medicine. The market background adjusted for sales days in Q2 was very similar to Q1, stable in the U.S, weak in Europe and strong in the emerging markets. Our trading profit was $232 million, giving a trading margin of 21.6%. As expected, this was lower than last year, mainly due to the initial dilution from Healthpoint and the additional investments we are making. Adjusted earnings per share were $0.18, marginally ahead of last year. Just after the quarter closed, we announced an agreement to acquire our Turkish orthopedic distributor. This is part of our broader strategy to add to our emerging market platform. I will talk more about this later in the presentation. Finally, in line with our desire to enhance the value delivered to our shareholders, we have been executing on our capital allocation framework. We're declaring an interim dividend of $0.104 using the formula we set out last year and our $300 million share buyback program is on target. This slide captures our underlying growth in the quarter. On the left-hand side,…

Thank you, Olivier, and good morning, ladies and gentlemen. So turning to our Q2 results. I have 4 items to cover: our revenue, income statement and margin for the quarter; an update on our $150 million structural efficiency program; cash flow and an update on our capital and distribution policy; and finally, the outlook for the rest of 2013. Before I begin, when I refer to underlying growth rates in the subsequent slides, I'm including acquisitions and excluding divestments in the current and prior year so that the comparison is like-for-like. I am not adjusting underlying growth rates to sales days but I will clarify the impact that they have on our results. I'll start by explaining the underlying growth in revenue. Revenue in the quarter grew by 3% on an underlying basis, and by division, Advanced Surgical Devices grew by 1% and Wound grew by 10%. The Bioventus transaction reduced reported growth rates by 3 percentage points. And I'd like to mention that going forward, the impact of the Bioventus transaction on quarterly reported growth rates will be significantly reduced, though some small impact will remain for the rest of 2013, owing to the phased transition of non-U.S. markets, as previously highlighted. The acquisition of Healthpoint increased reported group sales growth over underlying growth by 5 percentage points. And currency impacted the group adversely by minus 1%, due to the strengthening of the dollar. And finally, in reported terms, group revenue in the quarter grew by 4%. Sales days impacted this headline performance as we had 64 days in the quarter, one more than the comparable period last year, and we estimate this benefited growth rates by 1 percentage point. Turning now to the income statement. Trading profit in the quarter was $232 million, a 1% increase on an…

Thank you, Julie. So you know our 5 priorities, and I'm going to come back on these, that drive the decision-making, and the result is a continuing reorientation of the group toward higher growth areas. Julie has spoken about how we are progressing on our efficiency program as we simplified and improved the operating model. I want to talk you through another 2: the results of our actions in the emerging and international markets, as well as in acquisitions. So let me start with how we are accelerating our development in the emerging and international markets. The line on this chart shows the proportion of our group sales coming from these regions, just over 8% in 2010 to over 13% this quarter. In absolute revenue, over this period, we have delivered an annual compound growth rate of over 15%. Our strategy to achieve leadership position in this market is pretty clear. Firstly, in the major countries, we need to ensure we have direct relationship with our customers, surgeon, nurses and other care professionals. Secondly, we need to offer these customers the right products. By that, we mean both our existing premium products and also a value range to meet the increasing demand from the mid-tier. So where are we today? Starting with the BRIC countries, in China, as we know, as you know, we're very well established and a leading player in most franchises. In 2012, we generated revenue of over $120 million and our growth for this year has been over 30%. In India, we have a mixed direct and distributed commercial model. Importantly, we're now supplementing this by establishing a presence in Trauma, through the agreed acquisition of Sushrut-Adler. In Brazil, historically, we only add distributors despite the scale of the opportunity there. We're now in the process…

Okay, well, yes, I got the mic so I guess I better start. 2 questions. Firstly, your wound care business in the U.S. is doing very well or at least Healthpoint doing extremely well. I guess, if I strip out the growth from Healthpoint, the traditional advanced wound care business, is doing less well. I know -- is your greater than 30% growth too conservative? That would imply full year sales of $250 million thereabouts. You've done $137 million in the first half.

In Healthpoint?

In Healthpoint.

Let me answer the second part of your question on Healthpoint. Remember, we're guiding you with a 15% growth when we have done the acquisition of Healthpoint. New business for us that we have discovered, actually. I wanted to be conservative. I mean, I didn't want to overestimate the potential of this business and we didn't know many things. We didn't know we're going to increase the price of SANTYL, which is important. And when this had been decided, we didn't know what would be the real impact on volume. I mean, we had an idea, obviously, but it was not so precise. So we have done this price increase in Q1. We came with a guidance which was, I think, over 20% because we believe that the 45% growth that we have had in Q1 was good. But we're expecting Q2 frankly, which was slightly lower than what we are at. The 35% growth that I've just mentioned is strong. Now obviously, to make the math, you say well, 45% plus 35% is 70% -- is 80%? I tried. 80%. If you say 30%, well, it means that we're going to do almost 10% growth in the next second half, which is obviously underestimated. So now that's why we say above 30%. So remember, [indiscernible] when we talked about the slightly -- slight improvement, well, it's slightly above 30%. So I could tell you slightly under 40%. But it's a -- frankly, I want to be reasonable on this one. We still that have -- the volume of SANTYL has been impacted by the price increase. We need to understand better the dynamic of the volume and see if things -- I tell you, in Q3 we'll know much better about this. But it's above 30%, easy, easy -- the answer. Now the second part of your question, on -- and by the way, I think they do a great job. I mean, it's really -- first of all, it's an amazing business and they do a tremendous job in making this happen. I mean, it's a really good company. Now about the management in the U.S., I don't disagree with you that advanced wound care is a little bit short, and I think we could do much better. I think we have 2 reasons here. I think that the management is now aware of that. We put some strong pressure -- positive pressure, not negative pressure on this. And we try to increase the share of voice. Which I think the biggest issue we face here is not the question of quality. It's not a question of portfolio. It's a question of people. And I think we could optimize the growth, and we will optimize the growth of the advanced wound care in the U.S.

And given how successful Healthpoint side of the business has been, is there any temptation to try and bring the 2 businesses closer together? Or do you just feel that Healthpoint is doing so well and you want to keep that separate?

No, I think we follow the rule that we have defined at the start, saying okay, let's be sure that they focus purely on SANTYL, and we don't want to bring to the reps of Healthpoint other products at this time, okay? Which doesn't mean that one day, we're not going to use some of the reps to promote Negative Pressure or some of our people to promote -- this is not yet defined. I think it works well this way, and I'd much prefer to keep it this way instead of jeopardizing a good dynamic for the moment. Yes?

I've got 2 questions. The first question is really for Julie about the margin progression in 2013. Margins were a little bit light compared to what we thought in the second quarter. We're now more than halfway throughout the year. Maybe you can provide some more guidance as to what sort of the margin expectations may be. You gave some very broad guidance at the beginning of this year. Perhaps some more precision would be useful. And then secondly on Orthopedic Reconstructive, you've now grown below the market for 6 quarters in a row. And if you sort of count the mass of what the actual underperformance means, it's about the equivalent of 1/4 of a Healthpoint in sales lost every single year. So the question is, are we focusing too much on M&A and not much -- not enough core on Orthopedics? That would be my question.

Okay. Let me answer the questions, and I will give the floor to Julie. But I mean, on -- no, the answer is no. Obviously, it has nothing to do with M&A. First of all, the teams are different. As you know, we have on purpose, on purpose, not done any deal in ASD so far because I wanted the people and the staff to really understand and act on how to improve the dynamic of recon, which is a problem. And I'm with you on this one. Again, we are down in the cycle. I mean, it's a fact. Our global market share is what it is. And you know it very well. I've said that every quarter. It goes up and down according to the cycle of the products. We have been at 11% roughly of market share for the last 10 years. It's up and down. We're down, okay? We lose market share, it is true. We lose market share because we're down in cycle and because we're very strong in Europe, and Europe is a problem, okay? Now as I said in my presentation, I'm very optimistic to see a recovery in the second half of the year. I think we are down now. And the launch of JOURNEY II this year is critical for us. We have put everything we can behind this. We have invest -- Julie has mentioned that in the capital, a lot in the instrument to be sure that we do the best launch possible for this product. So I'm optimistic that things will come back, okay? So let's talk at the end of the year. But I mean, I'm not so anxious about this. It's true that it has been a pretty bad slope for the last year or so.…

Yes. Yes, so I think -- I mean, it's exactly in line with our expectations at 21.6%. I think the consensus was 21.5%. I think the only thing you'll see in Q2 that will be different is the phasing of the investment because as we flagged in the first quarter, we were putting targeted investments into those Wound and ASD. And so you'll see the impact of that in Q2 and Q3 and we'll ease into Q4. So the guidance we've given for the full year is exactly unchanged. We expect -- we had 23.3% in 2012. We're expecting to dip below that level simply due to Healthpoint because we've managed to offset all the other factors with the efficiency program that we're progressing ahead with. And hopefully that gives you...

Can you give us more color on the margins? I mean, what you expect today? I mean, below could mean a lot, so is it 50 basis points, 100? Just some important guidance would be useful.

Yes. I know that you had this discussion with Adrian [ph] about what slightly below meant and what below the margin level meant. I mean, I can't give you specific guidance. It will not be significantly below, that's for sure. So in terms of the Healthpoint dilution, it's really the only factor you need to factor in because everything else, we've managed to offset some of the other issues we've had in terms of margin headwinds, with pricing, with the efficiency program and cost of goods reduction. So I would say a relatively minor amount for the full year.

But I think you have enough data to make your own calculation, and I'm sure you have done it, so it's it.

We know you have.

Anyway, I was surprised not to have the question on the 24% margin, which maybe will come. So when do we plan to be at 24%? Is that your new question, next question?

I'll pass it on.

Two questions for me. One is actually -- I'm going to follow Michael on this one, but medium-term margin outlook. Julie, you've now been in the business for 6 months. And if I look at Smith & Nephew, I mean, what is obvious is that you're having to work really hard in the business to maintain margins. And particularly in ASD, I know Wound -- there are other things happening. But if you look at the ASD business, given the overall environment, given the overall dynamics of that industry, you're having to work hard to maintain margins. And so as you look beyond 2013 and really on a medium-term view, do you think that there is enough slack in the business for you to continue doing that so that you maintain profitability, so that you increase it, so that it goes down slightly? I don't need a precise number. But I'm just wondering, given the experience that you've had in the business so far, what are your thoughts on that? And then my second question, Olivier, is on emerging markets. You've done surprisingly -- I mean, tremendously well even before you've consolidated many of these acquisitions. And so my question is, as you look forward, what do you think these will bring? Does this mean your growth accelerates? Does it mean that you can sustain growth in a decelerating environment? I mean, what do the distributors that you've acquired over the past 3 quarters add to that EM growth outlook medium term?

Okay. You want to answer?

Yes, yes. I'll go first with the margin question. I think our business is definitely capable of delivering a 24% sustainable margin. The company was definitely on track to deliver that. The efficiency program that was put in place at the end of 2011 is on track to deliver the $150 million benefits and possibly more. And I can see those coming through the P&L. What I can also see is some of the offsetting factors like the Medical Device Taxes in the mid-$20 million, and they are pulling that margin down. But I can see that the business is capable of 24%, and we will get there. I think we will make choices because of the investments we're making in emerging markets and particularly in R&D. We have put more money into R&D deliberately this year. And if you look at our R&D percentage to sales now, it's 5.4%. And prior to that, it was 0.9% below that on a like-for-like basis. So there's a lot more going into innovation. There are choices, I think, for management to make. But looking at what I've seen with the efficiency program, with the consolidation of Ortho and Endo, we've delivered real benefits in terms of margin, and they are sustainable. I think it's just the dilution of Healthpoint that you see this year.

Yes. Let me add on this. So I totally agree with what Julie said. I mean, 24% has been said, has been announced and will happen, there's no doubt. What can change? Well, the only thing which can change is not our ability to reach 24%, and it will be achieved without hurting anything. What can change is just our decision to invest more in a few areas on the short-term business, as we have done actually during the last quarter, as we can do maybe next year again. This is the only thing -- the business itself will generate it very easily and even more than that, actually. So it's really not a question for me and certainly not a question of when will that happen. Is it this quarter? Is it at the end of the year? Is it next year? It doesn't really matter. It is -- it will happen, okay? On your question on the emerging markets, is it sustainable? Yes it is sustainable. Actually, it is accelerating very strongly. As you have seen, the CAGR on my slide was 15% for the last 3, 4 years. We are now running at more than 30% in these geographies. Everything we do is supposed to generate more growth. Actually, when we acquire distributors in Brazil or in Turkey, it's because we want to be close to the customer. It will have, obviously, a mechanical impact on our sales, as you can imagine, not to go through a third party. But also on top of this, it gives us a better way to invest, to choose and to add on our own business and potentially acquire other businesses now that we have our own entity there. So it's definitely for me more an acceleration than a reduction in…

Charles Weston from Numis. Just following on, on the emerging market side. Could you talk about the gross margin dynamics? What kind of gross margins can you achieve in emerging markets? I'm less bothered about the investment in sales and R&D, which is obviously very high at the moment. But what level -- what kind of level you can make on the gross margin? And then on Wound Care, obviously, there was some news yesterday with KCI acquiring Systagenix. And I just wondered if you had any commentary on what that might -- how that might affect the competitive landscape with their access now to a lot more competitive products. And then just a point of clarification, if I might, not quite a question. On the Bioventus side, how much of that 35% was price?

35% of what?

How much of 35% growth was [indiscernible].

Of growth? You mean -- in Healthpoint, you mean.

On Healthpoint, yes.

Well, I cannot tell you what percentage was growth. I guess you are just asking this to see you what we got out the bottom line. But I mean, it's one product, actually. It's SANTYL price increase, okay. So we have not disclosed the amount of price increase in SANTYL. It was significant, like we said. And so I cannot tell you more than this. I mean, I will not tell you the volume growth, which is actually pretty good. So that's what I can tell you. On the rest of your question, I forgot...

You want me to take gross margin and you take Systagenix?

Yes. Well, KCI, let me take KCI first. KCI, I think it's a good move for KCI. It's interesting. We have always said that it was important for a company to be in all segments so I think it's a logical move. They were not there, there were just negative pressure. And now they're in Advanced Wound Care. Will that change our competitive environment? I don't think so. Systagenix was doing okay. I'm not sure that KCI will do better, but you should ask them how they see that. For us, it doesn't change anything in the scope of the Advanced Wound Care or in Negative Pressure, so I'm not very anxious about this. And I'm not at all, actually. On KCI -- on the gross margin on emerging market, what you call gross margin is before SG&A and R&D? Okay, well, the gross margin is roughly what we have in the other countries. Why? For many reasons. Because price is not dropped, so we don't change it. They are imported product. We keep the price, as I said, premium products, premium prices. And I give you an example, which is Brazil. In Brazil, we have prices which is higher than in the U.S. So this doesn't affect the gross margin. Where we have some issues is more on the bottom line because of the investment we do in SG&A spending because we launched the countries. But gross margin, the rule, with few exceptions, very few exception, is to keep the same price, the price corridor, which has been given to the countries before the launch, saying well, if you are under this, you don't launch, very simple. So this is for the premium products. For the mid-range or the value range, call it this way, here, the price is an issue mostly because you cannot address the mid-tier with the same price range and what you do -- so solution is what? Solution is to make products at a low cost and manufacture this product at low cost. That's why we do not discount our own products to enter in the mid-tier but we present a low-cost camera, which is the example I'm going to give you, built in China, okay, at the quality of what Smith & Nephew is used to have but at a very low cost. And the price difference between our visualization and this one is huge, and the margin is pretty good. So that's the way we look at this. Julie, you want to add something?

I just need to add as well that although we do see some pressures on margin as well, also in established markets, through pricing, what we're doing is we've got a very comprehensive supply chain program, which is delivering about 3% improvement in cost of goods, so we are using low-cost manufacturing. We're putting Lean in place and also design for manufacture so that we have less issues with the manufacturing process. So that's all delivering real benefits in our manufacturing supply chain and lowering the cost of goods.

Okay. So we will need to take the 2 sets of questions from the telephone lines, please.

We take the first question of Lisa Clive of Sanford Bernstein. Lisa Bedell Clive - Sanford C. Bernstein & Co., LLC., Research Division: First question is, you mentioned you're starting up some DTC advertising for VERILAST in knees. This is the second time you've done this recently. Is this now a critical part of the sales strategy? Is this something we should expect to be an ongoing part of your cost structure? And then second question, you were just talking about mid-tier products in emerging markets and the importance of being able to produce at a low cost. But as we look at Reconstruction, a huge proportion of the cost is really around sales support. Is there a good way of having a profitable product that also focuses not just on production costs but ways of minimizing sales and marketing costs as well?

That's a great question because it is really the bulk of the strategy. Let me start with the second one. Obviously, it's not -- the mid-tier is not only a question of product cost. It is a problem of business model. So when you operate at 50% SG&A on sales, whatever the cost of your product is, you cannot succeed. So if you want to operate well in the mid-tier, you need to change your business model. And changing business model means what? Well, it means a number of things. Can we afford to have reps? Can we afford to have technicians in the operating room? Can we afford to make medical education? The answer is no. So it is just a different model. So this is the only way to be successful. And that's why you cannot have very, very big innovations because if you want to innovate and -- so at a cost and then you don't want to make any OR training or medical education, it doesn't work. So you have to use products which have been used in the past, where you don't have to make any type of specific education. So I think it's a great question. So that's why we have different models. And I'm not going to disclose that in detail because it's commercially sensitive, but I think it's exactly what is happening if you want to be successful in the mid-tier. Regarding your question on DTC. We did, as a matter of fact, a campaign -- a DTC campaign in, I think it was in January 2011, I think, so 2 years ago. So I cannot say it is part of the permanent marketing or marketing mix of the company. We do that when we believe it has to be done. By…

Yes, so a good question and I think a very interesting question. We obviously look at this, as all our competitors, I guess. I can't tell you more for the moment on this, but we believe that there is space for value range in the established market as we have space for value range in the mid-tier. Different -- certainly different model also, but I think that this will happen one day or another one. So it's definitely for us a good result.

We take the next question of Matt Miksic of Piper Jaffray.

I have a follow-up on the U.S. market, particularly in knees. Can you talk a little bit about the competitive environment, perhaps the degree to which some other folks have mentioned this quarter, the degree to which you've seen some impact from some of these large competitive knee launches in the U.S. in the first half? And then I have a follow-up.

Yes, well, obviously, we have had some launches here and there in the knee market in the U.S. Actually, this is reflected in the growth of the market. Definitely, knees has boosted slightly the market. We were not part of this except for JOURNEY II that launched pretty late, so we have not been participating in this growth. I think we had a survey, and I think I've mentioned that recently, showing that JOURNEY II was the #1 choice for the surgeon. I forgot which...

Morgan Stanley.

Morgan Stanley did that, so it's certainly true. And so they said that JOURNEY II BCS was the #1 choice for the surgeons. It is starting, so we'll see. I mean, it's always a healthy competition. It's good to have new products on board. We believe that our product, the kinematic knee, is the best in class. That's our view. Let's see what will happen in the quarter to come. And I'm happy to rediscuss this with you at the end of the year.

Okay. And as a follow-up also on the DTC campaign that you spoke of and some of the other efforts you've put in place to reaccelerate your hip and knee growth in the back half. Can you talk perhaps about what your experience has been in the past as to you ramped these up, say, in January of '11? Was it the second quarter, was it the third quarter that you started to see an impact on growth? Perhaps lay out when you think these things will start to have an impact on reported growth.

Well, this is very well documented actually, and we know that it roughly takes 2 months before the start of the campaign and the first start. So June, July for us so we expect to see -- well, August is always a weak month anyway. But I mean, we see some impact of these campaigns. And it's between 2 months and 6 months, whatever it is. So that's our experience, and that's what all the benchmark we have done in DTC are showing.

And if I could ask just one more on this -- I'm intrigued by what you mentioned about the room for a value segment. If we were to just look at your product portfolio, would this be potentially leveraging some of the products that you acquired with Plus Orthopedics a number of years ago, as well as your sort of flagship products in more developed markets?

Could be, yes. That's a good comment. It could be. Coming back to the room. It's you, at the back.

I have 2 questions, please. First on the product cycle. I think we understand well knees. It's been talked about a lot. But what about hips? Because x BHR, it looks like there is a material slowdown. And what is the next leg to the hip product road map? Secondly in Wound Care, could you talk about the dynamics between PICO and the RENASYS systems? And also in terms of capital intensity, PICO is, of course, a lot less capital intensive. What impact should we expect on the margin of that segment, if any? And then actually, I'll wait for the acquisition question.

Let me start with the PICO one, and then our product specialist, Phil Cowdy, will be happy to answer the hip question. On the PICO, first of all, PICO, we are very happy with the dynamics of PICO. This month has been, again, the peak of the sales of PICO ever. And it took a while to start, no doubt, but we see that there is an adoption now of this product as a normal, like a dressing. It's not a capital for them. They started to buy it as a capital product, like RENASYS pump or whatever, and now they realize the buyers that they have to buy hundreds of PICO and put them in the shelf and use them back and forth. And as you know, it cannot be used twice. Once you have started the product on, it's a week. And if done, it will not work anymore. So it's obviously not capital-intensive for us. It's very good. It will have an impact, it will start to have an impact on our capital expenditures in Wound, no doubt. Now it's not for every type of patient. So don't believe that the pumps will not be any more important and it is still a very important product and it will remain an important product for certain types of surgery. The good things about PICO is we are launching a range of PICO products. You have seen that we have launched, I've forgotten when it was, but in Q2, the PICO ACTICOAT -- when was that, in Q1? Q2, which is interesting. It was an ACTICOAT dressing on PICO. So we have a full range of products in the pipeline supplementing the PICO portfolio. So I'm very optimistic and you know how much I love this product and more I know it, more I love it. So on hips, Phil?

Yes, on hips, I mean we believe have a pretty full portfolio already. The most recent launch is REDAPT Revision. It's only now really starting to sort of generate high level of sales. There's still a long way to go for that. Similarly, the SMF system, which is a smaller stem system, again, is only recently being launched. And I think beyond that, OXINIUM and VERILAST, that bearing surface. We still have further to go. The Australian registry data is outstanding, but we believe we could still do sort of more with that unit-bearing service.

So we're expecting a rebound in the non-BHR segment of hips then if...

We think we can do better in hips.

No doubt.

With the existing products? .

Yes.

Just a couple of questions, one for Olivier, one for Julie. First, Olivier, can you just help me understand a bit more on the emerging markets margin? You're talking about the mid-tier segment, where the barriers are clearly much lower. So can you help me understand how you sort of can drive the margin forward when the larger opportunity is coming from businesses where the barriers are lower? And then second question, Julie, just interested on your comment earlier about possibly being able to extract more than $150 million of savings. Obviously, the previous company you were working for had significantly more fat than this business has. So I just wonder if you could help me understand that comment in a bit more detail as well.

Can you start?

Yes, I can. So I'll start with the overall sort of savings program. In terms of the -- since I joined the company, I've been looking at the savings program and the initiatives we've got in place. And obviously, we track that on a quarterly basis. And what I'm saying is, I think we can deliver the $150 million. I'm very confident that we can, given where we are to date and where we'll be by the end of 2014. And we'll probably deliver slightly more than that. So the tracking that we're doing is indicating we'll have the $150 million and probably slightly more. So I think that's absolutely fine. In terms of the comparison between the 2 companies, yes, AstraZeneca, was a $30 billion organization, so very, very significantly larger. But I think some of the same types of efficiencies can be paralleled in both organizations. So in terms of back-office structures, processes, systems can equally apply to both and I think give Smith & Nephew a lot of benefit in doing that.

Is it a case then as we've seen with other companies, you start a restructure program, the more you dig into it, the more you find et cetera, et cetera. Is that...

I think that's absolutely right. Because as I mentioned, I think part of what we should do as managers is continuously look for improvement. And so I don't really see some of the efficiency drivers as being just blocks. I see it as being a continuous effort to improve what we do. And it's certainly something I've done in my 30-year career, that I'm always looking to do that and I'm particularly always looking to improve processes, systems and applying lean not just to manufacturing, but absolutely everything you do. Is it valued by the customer? Is it necessary for compliance? And if not, if neither of the above 2, then you've got to consider it being waste. And that's the Toyota mentality. I apply it to finance just as I apply it to other parts of the business.

I would add something on this. I think it's absolutely right. There is always efficiencies to find. I just want to remind you that the value range job we have done -- not value range, the value plan, saving plan, which is supposed to generate $150 million of savings, and will generate potentially this or more, was mainly an ASD. If you remember, it was a mix between the merger of ortho and endo and the de-duplication of jobs that we have done in many places, mainly in the U.S. and some European areas, mainly headquarters, putting together 2 headquarters in 1 as well. But we still have a lot to do and to dig in at the corporate level. We have not looked at the offices, for example, when we have some time in one country, 3 offices, just wonder why. I mean, all these questions are in the air, and Julie and the teams are looking at this to really optimize. And it's a permanent process. And so I'm also optimistic that there is more to find there. To continue on the question on mid-tier. So why do I believe that things will improve in terms of margin? For 2 reasons: again, on the high-tier, we give more and more discipline to the countries and the regions to follow the rules of prices, which was not the case before. I think I've mentioned one to this audience that in India, for example, we are in the past variation. One product was $500. The same one in another place was $3,000. I'll just say something is wrong there. So now we have discipline, which is very, very well defined by the divisions, which is ASD and wound, saying you do not launch the product if it is not within this corridor, period. And it works. On the mid-tier part, which is the other part, we just started, as you know. We launched our foams range in wound during H2. Well, the margin is not better [ph]. It has been manufactured in the low-cost manufacturing place. We have a very simple model to do that and the net margin is very good. If we take the low-cost camera, I was mentioning it also, super simple. And on top of this, don't forget that we are acquiring businesses that we did not plan to merge with our own self because, again, mid-tier and high-tier is different. I've said to your colleague that it's a different event model. So we acquire [ph] businesses operating at a very, very low SG&A on sales manner. So we want to keep it this way. So definitely, I think that we are going to see significant improvement in margin of the emerging market in the next years. Phone?

The next question comes from Yi-Dan Wang of Deutsche Bank.

I have 2 questions. First of all, Julie, you talked about, obviously, there could be additional scope for efficiency improvements. And I understand that it's a constantly evolving project. But based on what you can see at the moment, can you give us a sense of how much scope there is for you to improve the efficiency, if you put, say, I don't know, 100 for where you would like to see the business to be versus where it is now? And then secondly, in terms of cash flow, can you give us a sense of how much scope there is for you to improve the cash generation of the business and where the sources of that might be over the next few years?

Okay. So taking the first part about efficiencies, I mean, obviously, I think that there is scope, but I also think that Smith & Nephew also had a very concerted effort around creating efficiencies to date already. So I think the merger of the 2 businesses, Ortho and Endo, made a big difference because it freed up so much back-office support. I think what Olivier and I are doing now in terms of the next stage is really looking at the potential for the business and where that margin should be and balancing, I guess, what we see in terms of investment opportunities with where we can drive the margin. I think what you should be absolutely clear about is that we're always going to be looking for efficiencies in the business, and we're always going to be driving the margin. But I call this a little bit like self-help. We will do that to fund some things that we may want to put into the business, which is R&D. So what I'll do is, Olivier and I will keep people updated as we go through this. I mean, it's something that we're working on, and we're not at this stage able to disclose anything publicly. But it's something that we're working on, and we'll come back to it.

What I can tell you on this one, just to highlight on Julie's point, without giving you any figure, I think you can expect to see in the years to come with no doubt, an improvement of the G&A on sales. That's, I think, what we're driving. So that's what I can to tell you.

Yes, yes. And the second part of your question is about improving the cash flow. So I think in terms of cash flow, obviously, we're very focused on a number of areas. The capital program is one part. Stock levels is another key piece, and the third level would be DSO. So we track DSO, we look at the receivables and we're tracking DSO also in emerging markets have targeted around DSO as well. So these are the 3 key areas that we're focused on in terms of cash. We have already got a very comprehensive program running looking at stock levels. And so the additional investment you've seen in stock is simply to drive the growth. It's linked to JOURNEY II, and it's also linked to the migration of some of our portfolio too, from whole [ph] to China. So there'll be specific elements where the stock will rise, but it also underpinning it a very strong program in our CTO organization looking at stock, looking at SKUs and looking at lean and design for manufacture. So that's all really a key part of the program. Do want to add to that?

And what level of cash conversion do you think the business should be at relative to where it is now?

I mean, the business has been running on a very good cash conversion easily in the 90%. This quarter, down at 81% was atypical, I would say, generally. But we do aspire to be 90%-plus in terms of cash conversion. I think where it's different from that, we will highlight it to you because it will be specific reasons why we've done it differently as we have this quarter.

Room?

I had 2 questions, one, a follow-up on SANTYL, one on margins and perhaps a slightly different angle to it. On SANTYL, your guidance, if one takes the price count into consideration, it suggests that you expect year-on-year volumes in SANTYL to be down year-on-year in the second half of the year. Is that just a consequence of the high stocking effect we saw in Q1 and bit of a runoff of that? Or is it part of a conscious decision you've made effectively to sacrifice volume for profit with the SANTYL franchise? And then a second question on margins. I'm just sort of slightly bemused by the entire focus on getting the margins up. And I can understand why with the existing business that's a very good thing. But what surely matters in the long term and matters for shareholders is the total amount of post-tax operating profit you produce relative to your capital base. So to what extent has the sort of push from us analysts to get your margin up, perhaps influenced your decision to or any positions you've made within the business to pursue revenue opportunities where the margin may not organically be as high but may be shareholder value creating?

It's a good question. Actually, it's 0, the impact of that. Now, we don't write the margin according to your wishes. I tell you. This is really we drive the margin exactly as you said, based on what we believe is important for the business. So that's why I was mentioning that the 24%, 25% whatever it is, will depend on just one thing, not the fact that we can or we can't reach it. We can reach it. It's just the willingness we have to invest and protect the business on a long-term basis, that's all. So it's crystal clear, and there is no guidance on this except that we review this and we decide whenever we believe it make sense for the shareholders. Absolutely right. The second question is SANTYL. SANTYL is not down, by the way. We don't expect to have SANTYL. We expect to have -- to recover a few accounts and volume. We are very active with what is happening. Actually, again, simple thing to say. We have done this price increase not because we just wanted to hurt the customers. We did this because it's an expensive product to make. Actually, it's very -- the lead time of SANTYL is one year. It takes one year to make a lot. So it's a complex process. So we didn't increase the price of SANTYL for a while so it was assumed it makes sense, I think, to increase it. Volume is, I mean, coming back very well. I know you believe we have a low expectation for H2 but it's... Okay. One more? No? How are you?

Alex Kleban from Barclays. Just 2 quick ones. The one is sequential trends in Germany and where that is and anything we need to worry about in H2 in northern Europe? And then just on SANTYL maybe to dive down. What should we think of as kind of a run rate in terms of volume, volume growth in the market underlying rather than stocking effect and pricing effect, just to ask Tom's question a different way.

You want to take it?

In terms of Germany?

Yes.

Yes. Germany, I mean, I think because of the Plus acquisition as a company, we've got a large presence in Germany, probably relative to some of our competitors. And so I think I don't know if you're aware, but the German government decided to reduce the number of procedures. I think they've done a comparison comparing to the markets and decided to reduce the number of procedures. So it affected our business in Germany certainly in the first quarter. We are seeing a continuation of that trend in Germany so no major change from really what we said in the first quarter. And obviously, it's been a key part of our business. We're closely focused on it.

We're #1 in Germany, by the way. It's a very important market for us and we basically get all the pressure, which is existing in the market now. So it's a tough market. I think that the Germans will not leave it easy until they have reached the same number of procedures in the rest of Europe, which was much higher. So this has pushed down volume and we see that.

And SANTYL, do you want to take?

Take it, take it.

On SANTYL? I think in terms of what we've been doing, we've also been looking at the key accounts in terms of SANTYL. We have seen a good progression. We'll know more as we move into the third quarter because some of the big accounts were still going through the renewal phase. So I think the end result with the volume on SANTYL will become clear as we go through the third and fourth quarter. That's partially the reason why we've said over 30% because we want to keep a close eye on how this evolves. But you can be sure that we're focusing on it.

Do you have a sense like from IMS data or SCRIP data, anything like that what the underlying challenge is the initially?

Yes, we do. I think -- I mean, broadly, we've seen some accounts. It's difficult because we have the stocking period and so we're not clear yet how it's going to all unfold. But basically, I think the trend is good. We've had some minor, minor changes. But basically, I think the trend is good. And it's obviously, as Olivier said at the beginning, going in with the price increase gave us some uncertainty at the beginning. But clearly, I think it's been absolutely the right move for the business to take.

Thank you. This ends the session. Have a good day. Thanks.