So, that’s what the FDA is after. That’s what we are after. That’s what the testing program is after and that’s also what we will continue to work on to ensure that we address any outstanding question on that note.
Abhijit Bhattacharya: Yes. Veronika, let me take the first question because I was wondering, this EUR200 million, you take that 1% of our sales. And I guess that’s how you come to that and that’s exactly why we’ve given a range. Q4 is a big quarter. There are also a lot of uncertainties out there, as we have highlighted. So, therefore, giving now a specific amount or a specific number where the upper-end or middle is maybe too early. But we are comfortable in this range of 10% to 11%.
Roy Jakobs: And maybe…
Veronika Dubajova: Yes. Abhijit, I was — sorry, I was just going to say that the EUR200 million, I get it from a sales perspective, but it’s also EUR200 million of an — on adjusted EBITA —
Abhijit Bhattacharya: Yeah, that’s what —
Veronika Dubajova: I guess that’s a pretty high drop through rate between the two.
Abhijit Bhattacharya: Yes. We — so, it’s not just Q4 upside of EUR200 million, right? It is also linked to how we have performed so far in the year. So, therefore, there is a big part that we have — let’s say, we have had a good start to the year and therefore, we expect quarter-over-quarter, of course, improvement in Q4, but we are not specifying whether we are going to be — to the last amount at this stage. Like I said, because of the uncertainties that we have. But fundamentally the factors that we told you about, you know, and we have been saying from the start of the year, the improvement in the supply chain on patient safety and quality and productivity, you see that quarter-on-quarter that coming back. You see also pricing coming back and that’s what gives us then the confidence to increase now for the second time the guidance for the year.
Roy Jakobs: And maybe then let me take the third one in terms of the D&T expectation. So, I think we need to be specific that, of course, in our D&T businesses, there are several businesses where actually we are from a market share perspective very strong and also leading and winning. So, if you look to the IGT side, if you look to Ultrasound, we have very strong positions and actually also even this year, we continue to see that progress. Then, indeed we have the MR pressure on lead time. We are improving that. But even in MR, and for example, look at one of the markets that we’re on a bigger distress now in Q3 like China, we had a very strong order intake actually in the first half in MR and in CT, where actually they love our BlueSeal, they love our Spectral, and actually having that localized now available and also even the EPIQ Ultrasound really made a big jump in order intake happening in China.
So, we see the momentum there coming back. Now RSNA is, of course, another kind of exciting moment to come forward with our innovations. I will not fully disclose what we will bring there. But what is for sure part of what we will bring as important innovation is how our innovations drive productivity in a distressed situation that the current healthcare system is. Focusing on the workflow, focusing on how our software AI solutions actually both the combination of hardware, software, and doing it across different vendors is something that really differentiates us and that others don’t have. The radiology operations command center, the tele-ICU solution, but also tele-radiology, the digital pathology, so those are all elements that kind of flank what we do in our core and that’s something that really works well.
IGT, we launched our new C-arm. You saw that is really spot on in terms of clinical workflow. So, actually, we have a lot of exciting dialogs with customers. I look forward also to continue those at RSNA and there will be some specific news that — yes, that you will see when you join us on stage. And I would all invite you there to come and have a look at the great Philips presence.
Veronika Dubajova: Great. Look forward to hearing more about that. Thanks, guys.
Operator: Thank you. We will now go to the next question. And the next question comes from the line of Hugo Solvet from BNP Paribas. Please go ahead.
Hugo Solvet: Hi, hello. Thanks for taking the questions. I have a few. First on China. When you will expect China to — demand in China to recover? What’s your level of confidence to see some pent-up demand? And maybe a broader question on this, but would you expect the intensity of local competition to increase after — in the aftermath of the anti-corruption campaign? Second on Respironics, follow-up on an earlier question. But as you start to serve new sleep patients outside of the US, just keen to understand the manufacturing footprint. Are devices for outside of the US patients manufactured outside of the US, or are still primarily coming from the US? And then lastly, we’ve had a lot of discussion with investors in the past weeks on GLP-1. Just keen to have your views on — and it’s like the early days, but on what the impact of this drug class could have on the sleep apnea market? Thank you.
Roy Jakobs: Thank you, Hugo. Let me start off with your first question on China. So, as I said earlier, we did see very strong momentum and actually pent-up demand from even the COVID period. Now, we actually haven’t satisfied that in full and we see that now actually adding to the backlog in China that we will step into once they work through this anti-corruption measures that they currently have deployed. We do expect that that will improve in the current quarters, but it’s hard to predict exactly what it is, but the confidence level that we have in China are high. We also saw it materializing. At the moment it was an open market and we were there with our local relevant solutions, we had a very significant uptake. We also actually have orders waiting to be signed.
So, also we are looking into our funnel. We have confidence in the China market moving forward, and also our specific innovations that I called out like the Spectral, like the helium-free really have a lot of traction there. And also IGT is something that has pent-up demand. So, yes, we are working through with the local team. We have a strong presence there with also a strong government relations. Last point on that. I think actually this can also benefit companies like us, because from a compliance perspective, of course, we have very strong standards on compliance and integrity. So, that’s also something we use in these kind of circumstances. Then on the recall, we indeed do produce the devices outside of the — outside of the US also to be used in the rest of the world.
So, we have manufacturing base which is diversified. We have in the US, but we also have outside of the US and we also use that actively as we speak for the markets outside of the US. And then on your GLP-1 impact on the CPAP market, that’s something that currently we don’t see as a major impact. We do think it’s flanking the therapy. As we said earlier, that — that’s something that we believe will help certain patient groups, but there is such a big undiagnosed patient group in sleep that actually we do believe that the therapy and our sleep devices are very much in need. Also important to acknowledge that when we talk about accuracy in Philips, it’s 1 billion out of 19 billion. And as you’ve seen in the third quarter, but also as I announced when we started the program for the three-year value creation plan, it’s very important that we get all of Philips working very strongly and well, dialing up profit, dialing up growth.
And then also we deal with any opportunity that, of course, will come to sleep business, but we are for sure not dependent only on that because we take charge of growing the other pieces of our business.
Hugo Solvet: Thank you very much.
