Abhijit Bhattacharya: Yes. I think on the capacity what we have done the additional capacity that we put in was flex capacity with co-makers. So they were kind of not in our own plants but we did it with co-makers. Those have been wound down as we have progressed with the remediation. So that’s not something that will remain as an overhang. In terms of SRC profitability, we’ll say, it was never higher than monitoring. Monitoring, of course, is a very highly profitable business. SRC in the past was mid to high-teens profitability business. It will probably not get back there but we will improve profitability over the period, so that we get into the guided range for Connected Care as we have given for 2025. Regarding the inventory, yes, we have done a big reduction last year.
There are still a couple of areas that we would want to reduce this year. So yes, we will have a couple of hundred million reduction this year as well on inventory, so that we get our supply chain then working at an optimal level.
Sezgi Ozener: Thanks very much.
Operator: Thank you. The next question is a follow-up question and comes from the line of Veronika Dubajova from Citi. Please go ahead.
Veronika Dubajova: Hi, guys. Thank you so much for squeezing in me for follow-up. I’m going to go back to the topic that I think a bunch of people have asked. Just maybe for clarification we can close the circle. But I think when you gave the guidance back last year, the mid-term guidance, you had assumed a 10% CAGR for S&RC sales. I just want to confirm whether that still stands. Or should our working assumption be different? And maybe just to confirm that S&RC sales went from €1.3 billion to €1 billion to 2023? Just so we have the right starting point that would be great. Thank you.
Abhijit Bhattacharya: Yes, I think the €1 billion sales for 2023 is what we have said now multiple times in this call. So, it’s confirmed and reconfirmed again Veronika. Regarding the growth rate for Sleep & Respiratory, we are not giving a separate guidance at this point of time. We have the overall guidance for Connected Care. And within that we will manage the Sleep & Respiratory, Monitoring, Enterprise Informatics and all of the businesses to get to the target that we have set for ourselves. And you see there’s quite a big step up in profitability from where we are now and we have high confidence of getting there in the next two years.
Veronika Dubajova: That’s very clear. Thank you, Abhijit. And the €1 billion, are you able to give us a flavor for US versus OUS in terms of the breakdown of that?
Abhijit Bhattacharya: €1 billion is €1 billion and then we build from there.
Veronika Dubajova: But let me ask you differently. It’s fair to assume it’s more OUS than US at this stage, correct?
Abhijit Bhattacharya: Yes. Veronika I appreciate you asking differently, but let me answer in the same way the €1 billion retains the €1 billion, right? So, we don’t want to give more because it gets into a level of so much detail that it creates more confusion than clarity. So, I think if we take this as a starting base, I think your models will be simpler and easier to get through.
Veronika Dubajova: Understood. Had to try. Thanks guys.
Abhijit Bhattacharya: 10 months for trying Veronika. Well done.
Operator: Thank you. We will now go to our last question for today. And the question comes from the line of Julien Dormois from Jefferies. Please go ahead.
Julien Dormois: HI, good morning Roy, good morning Abhijit. Thanks for squeezing me in. I’m left with three questions if that’s okay, but they should be fairly short. The first one and sorry if you’ve provided it, but I was just wondering whether you could provide us with the split on the order book between D&T and CC? Second question relates to the Imaging or to the D&T business, sorry and given the normalization in the backlog in that division, do you see anything that could prevent you from returning to the same sort of margins that you exhibited in full year 2019 which was a margin of let’s say between 12% and 13%? And more specifically into this if you could give us a sense of where you’re Imaging business currently sits, are we now in the double-digit range for that segment?
And the last question is for the consent decree. I was wondering whether you could give us any sense of when you expect the terms of the consent decree to be formally signed off? Are we talking about a few days weeks? Or could these be months? Thank you very much.
Roy Jakobs: Yes. Thank you. So, on the — maybe on split, in terms of the–
Abhijit Bhattacharya: Yes, on the split, between D&T and Connected Care, it’s pretty much similar, right? We start Connected Care also in Monitoring with actually a very strong order book that gives us confidence for the growth in 2025. D&T, look we were — I think we ended at 11.6%, so we are very close to the 12% to 13%. So, with the profit improvement of this year, we will get to the peak ranges of 2019 as you pointed out. And then on the consent decree, when you expect it to be signed, Roy, maybe you take that, but we don’t have really a date there because that is a court process.
Roy Jakobs: Depending on the FDA and the court. So that is a due process, so we cannot give you a date on that. So that’s something that is running. Of course, people will try to expedite to make sure that this gets clarified and closed. But I think there’s no data that we could give you here.
Julien Dormois: Okay. Thank you very much. Just for the sake of clarity on the order intake that was down 3% in the first quarter that number would be pretty similar between D&T and CC. Did I get it right?
Roy Jakobs: Yes. Perfect.
Julien Dormois: Yes. Okay. Thank you. Thank you very much, guys.
Roy Jakobs: And important to know right, Julien and you probably know that in terms of the order book it supports 40% of the sales that we have, right? And we have 60%, which is in services and consumables, recurring revenue and Personal Health. And actually we also saw good growth there. You saw it in the Personal Health growth but also in the services and software growth. So of course, we all want to improve the number. That’s our target. We have the actions in place but I think it’s also important to kind of put it into perspective of total €18 billion and what this supports. Furthermore, as said, 15% higher order book. So actually if you look to the ratio of conversion going into 2024, we are still actually higher and above the supply chain and COVID crisis numbers in terms of our underpinning of the sales by the ratio of the order book. So that also gives us the confidence going into the year for the 3% to 5%.
