It’s hard to say how exactly it will pan out, but we are very confident on the Chinese market and that it will resume and that we will also — we will be able to then resume our trajectory that we had in China, as it’s fundamentally very attractive and we see great prospects. And as I said, we celebrated our 100 years, we will continue to work on that because we see also another 100 years in China up for us. So, let’s work to capture the full opportunity. Also the consumer side of China is important. We also saw that coming back to growth in Q3. So that’s also I think an important part of the China opportunity and we will continue to work both sides of it.
Abhijit Bhattacharya: Hey. On the question, it was a bit distorted the line at that time. Let me just be sure that your question is, how much of the 7% comes from pricing, is that your question, David?
David Adlington: That’s right, Abhijit. Yeah.
Abhijit Bhattacharya: Yes. So, I would say a couple of percent came from pricing. The rest came from volumes, that’s how we would look at it.
David Adlington: And your thoughts on pricing from here?
Abhijit Bhattacharya: I think, we have — we are not going to make big price increases now. I think, the — we have also stabilized in terms of our raw material pricing et cetera. So, if we are able to hold the current level of pricing, we are in a good zone for our margin. So, I don’t see further price raises.
David Adlington: Perfect. Thank you.
Operator: Thank you. We will now go to the next question. And the next question comes from the line of Richard Felton from Goldman Sachs. Please go ahead.
Richard Felton: Thank you. Good morning. Just to follow-up on your lead times. So are you able to comment on which modality’s lead time is still an issue? And how much visibility or control do you have to drive further improvement from here? Any sense of how long the process might take to return your lead times standard in line with peers would be very helpful. That’s my first one. My second one is a follow-up on D&T margin. You called out pricing as one of the drivers for margin progression in the quarter. Is there any color you can share on the size of the pricing impact? And then also how should we think about pricing as a driver for D&T margin in coming quarters? Thank you.
Roy Jakobs: Thank you, Richard. Let me take the first one on lead times. So, I think when I started, I said supply chain improvement is very important for us, and I’m very happy to see also that supply chain improvements have been materializing and that actually is driving the 11% sales growth realization in the quarter. So, we have been making a lot of strides. I also shared that actually we were working on high-risk components because what we were facing is that, because of the misses of some components, we could not complete and then not deliver. Now actually we reworked 70% of the high-risk components already year-to-date and we expect to complete the program by year-end towards 100% of the high-risk components. That also means that you will see, therefore, that further improvement of the lead times.
Actually, if you look to lead times of many of our businesses, they are already fully in line with market. The single biggest one that we called out earlier that we need to work through to fully get in line with market is MR. That’s the one where we have been working it further. The good news there is that, on the grading coal issues that we had, we also now resolved that. So, we are making progress, and we will get back to the lead time improvement there also towards year-end. Overall, what we see also from demand in the market and discussions with customers is that, we are well positioned to capture demand. You saw the deal, for example, that we took in Monitoring, which is a great show, EUR100 million, 10 years deal, taking our full platform including AI to deliver productivity gains also with a flexible CapEx and OpEx model.
We’re also having significant discussions with other big systems on major deals. So, we are well positioned with growth. But, yes, we will continue to work on our supply chain to get that fully back in track.
Abhijit Bhattacharya: Yes. Richard, on D&T pricing, we have been saying all along that the pricing was coming in the order book, and it would start coming into the P&L from the third quarter. That’s exactly what has happened, right? So, we see the first signs of it coming into the P&L, maybe give or take 100 basis points in Q3. And as we go into the coming quarters, you will see that increasing. So, we’ll probably get to somewhere between 2, 2.5 over time.
Richard Felton: Thank you very much.
Operator: Thank you. We will now go to the next question. And the next question comes from the line of Lisa Clive from Alliance Bernstein. Please go ahead.
Lisa Clive: Hi, just wanted to ask what the order intake in D&T would have looked like ex-China. And then also on your comments on long lead times impacting order intake, is it simply you losing orders to competitors who can deliver faster? I just want to make sure I’m not missing anything in terms of what this actually implies.
Abhijit Bhattacharya: Yes. So, if you exclude D&T — if you exclude China, it’s still a decline this year in the third quarter. But again, I think, it’s important to understand the momentum of order intake through the year. So, if you just look at the absolute amount of order intake, we had a bigger — because the comparisons get — year-on-year starts creating a picture because of how you did the previous year. But Q2 was stronger than Q1. Q3 was in line with Q2 if you take out China. So, overall, I think the order intake momentum still continues to be good, which is why we have an order book, which is 20% higher than we had two years ago. So, I think it’s important because the — we have said it now a few times about the 40% of our sales being governed by the order book.
You need to be clear that there is a break between order intake growth and sales growth. So, we continue to deliver good sales growth despite, let’s say, the year-on-year decline, but in absolute order intake amount, the momentum through the year has been reasonable. Then your point on lead times is exactly correct. So, if we are able to supply an MR in a year and a competitor is able to do it quicker and the hospital has that need to get a quicker system, then it doesn’t help us in terms of securing the order. And that’s why now most of our modalities are back, except for MR which we are working through.
