Coloplast: Urology Segment & China Market

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What was the decisive factor to initiate this review at that point in time? The segment had been in its state for a few years. Was it simply a matter of timing, or were there additional considerations?

The decisive point was the litigation, which started earlier than this. Towards the end of 2018, there was a significant unknown regarding a potential settlement. The main issue was determining the actual risk involved and the potential costs, which far exceeded the insurance coverage that Coloplast had on the product. This situation required a substantial amount of money to be taken out of the company to cover those costs. It seemed like a resolution was near, although it wasn't completely finalized. Most of the issues have been resolved, but some aspects are still ongoing, even five years later. The settlement made the company more appealing for acquisition, as ongoing litigation would deter potential buyers due to its uncertain impact.

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That leads to a question I planned to ask later. Was there any market-related reasoning for initiating the divestment review?

As mentioned earlier, the market wasn't growing fast enough compared to the rest of the company. Margins were under pressure, and there was litigation risk. The review didn't reveal anything new about the business. Ultimately, the decision to retain the company was because no one was willing to meet Coloplast's asking price at the time.

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