Q3 2025 Demant A/S Earnings Call

November 5, 2025

Speaker #4: Good afternoon and welcome to our conference call . Following the release of our Q3 Interim Management statement , which was sent out after market close yesterday evening .

Peter Pudselykke: Good afternoon, welcome to our conference call, following the release of our Q3 interim management statement, which was sent out after market close yesterday evening. For today, we plan for the usual structure of the call. We'll start with the presentation, then we'll proceed with Q&A. On a practical note, the presentation we'll be showing should now be on our website for you to find, and we plan for the call to last no more than one hour in total, including the Q&A session. In the room here at our head offices, we have our president and CEO, Søren Nielsen, our CFO, René Schneider, and the IR team with Gustav Høegh and myself, Peter Pudselykke. That is it for the practical stuff. Over to you, Søren, for the presentation.

Speaker #4: For today , we plan for the usual structure of of the call . We'll start with a presentation and then we'll proceed with Q&A .

Speaker #4: On a practical note , the presentation will be showing should now be on our website for you to find . And we plan for the call to last no more than one hour in total , including the Q&A session in the room here at our head offices , we have our president and CEO Sren Nielsen , our CFO Nina , and the IR team with Gustav Hoegh , myself , Peter Pudselykke .

Speaker #4: That is it for the practical stuff . Oh , would you sign for the presentation ?

Speaker #5: Thank you very much , Peter , and welcome everybody . We'll go straight to an agenda for today . Is business highlights and key financial takeaways .

Søren Nielsen: Thank you very much, Peter Pudselykke, and welcome, everybody. We'll go straight to it. The agenda for today is business highlights and key financial takeaways, a little bit of a color and flavor and update to each of the three business areas, outlook for 2025, and then let's quickly get to the Q&A session. Business highlight for Q3 is a performance all in the lower end of our expectations, driven by hearing aids, which due to a remaining softer than normal general market and a sequential slowdown in US, due to mixed effects have seen a weaker ASP, or you could say in the scenarios with a weaker ASP. We have, however, in the hearing aid business seen global market share gains and a good momentum in the business.

Speaker #5: A little bit of color and flavor . An update to each of the three business areas . Outlook for 2025 . And then let's quickly get to the Q&A session .

Speaker #5: Business highlight for Q3 is . A performance overall in the lower end of our expectations , driven by hearing aids , which due to a remaining softer than normal general market and a sequential slowdown in US due to mix effects , have seen a weaker ASP .

Speaker #5: Or you could say in the scenarios with a weaker ASP , we have . However , in the hearing aid business seen global market share gains and a good momentum in the business .

Speaker #5: So the to the softer side , organic growth in the hearing aids business is purely driven by unfavorable geography mix and a still overall soft hearing aid market .

Søren Nielsen: The to the softer side, organic growth in the hearing aid business is purely driven by unfavorable geography mix and a still overall soft hearing aid market. Hearing care have delivered solid growth above the general market growth rate. The performance is broad-based despite also having strong comparison figures from last year. The diagnostic business continues to be impacted by a general weak market, especially in the US, resulting in low investments in equipment. The market, you know, the general appetite on investments and expansions, et cetera, has put less incentive to do investments right now. We still see a good order book and still see orders coming in, so it's more a reflection of a postponement.

Speaker #5: Hearing care have delivered solid growth above the general market growth rate . That performance is broad based , despite also having a strong comparison figures from last year .

Speaker #5: The diagnostic business continues to be impacted by a general weak market , especially in the US , resulting in lower investments in equipment .

Speaker #5: The market , you know , the general at the apatite on investments and expansions , etc. has less incentive to do investments right now .

Speaker #5: We still see a good order book and still see orders coming in . So it's more a reflection of a postponement . In October .

Søren Nielsen: In October, after the quarter, but still important to mention, we launched Oticon Zeal at the German Congress. We have also announced the signing of the agreement to divest Oticon Medical, found the new future owner, and we expect the closing of this part to take place no later than the end of Q1 2026. With that, knowing the final route to a full departure from the implant business area. Key financial takeaways from Q3, group organic growth of 3%, which is an improvement from first half. It is fueled by improvements in both hearing aids and hearing care. Positive.

Speaker #5: After the quarter , but still important to mention , we launched Only Conceal at the German Congress . We have also announced the signing of the agreement to divest Oticon vertical found the new future owner , and we expect the closing of this part to take place no longer , no later than the end of the first quarter .

Speaker #5: 26 . And with that , knowing the final put to a full departure from the implant business area . Key financial takeaways from Q3 Group .

Speaker #5: Organic growth of 3% , which is an improvement from first half . It is fueled by improvements in both hearing aids rule hearing care , so positive .

Søren Nielsen: However, as already stated, we see gross margin decline coming from the negative ASP effect in hearing aids, and a continued increased share of rechargeable devices. Diagnostic also saw a drag on the gross margin. A pure translation from the lower ASP into gross margin. Our OpEx saw a modest organic growth compared to last year, fully in line with expectations. Of course, acquisition contributes to further growth, and we remain very focused on managing cost carefully, given the uncertain market. EBIT was in the lower end of our expectations, however still within, driven by the gross margin contraction. Foreign exchange rate also had a negative effect in Q3, but in line with expected and already disclosed.

Speaker #5: However , as already stated , we see gross margin decline coming from the negative ASP effect in hearing aids and a continued increased share of rechargeable devices .

Speaker #5: Diagnostic also saw a drag on gross margin . So pure translation from the lower ASP into gross margin . Our OpEx saw a modest organic growth compared to last year , fully in line with expectations .

Speaker #5: Of course , acquisition contributes to further growth , and we remain very focused on managing cost carefully . Given the uncertain market . Ebit was in the lower end of our expectations .

Speaker #5: However , still , within driven by the gross margin contraction , foreign exchange rate also had a negative effect in Q3 . But in line with expected and already disclosed , the group continues to generate very solid cash flow , particularly as partially supported by working capital development and a strong focus on that .

Søren Nielsen: The group continues to generate very solid cashflow, particularly as partially supported by working capital development and a strong focus on that, of course. The outlook for the year 2025 maintain the 1% to 3% organic revenue growth and DKK 3.9 to 4.3 billion, however, likely to be in the lower end of the range. As announced previously, share buybacks were stopped in June due to the announced acquisition of KIND, yet not closed. We have bought back shares worth of DKK 582 million in the year and will not buy further. Business area highlights review.

Speaker #5: Of course , the outlook for for the year 2025 maintain the 1 to 3% organic revenue growth and 3.9 to 4.3 billion DKK .

Speaker #5: However , likely to be in the lower end of the range as announced previously . Share buybacks were stopped in June due to the announced acquisition of kind , yet not closed .

Speaker #5: We have bought back shares worth of 582 million in the year and and will not buy further business area highlights review hearing aid market in total has grown to our best estimates and having a statistics for two thirds around 3% , which is more or less in line with expectations .

Søren Nielsen: Hearing aid market in total has grown to our best estimates and having statistics for two-thirds around 3%, which is more or less in line with expectations. However, a slight uptake in Europe, a sequential slowdown in US commercial from 4% to 2%, which is not as expected. VA on the other hand, growing, it seems like some funds for restocking have been released, which have made it pick up. Rest of the world 4%. We are still below the normal 4% to 6%. However, I think it's worth to highlight, 3% is still a growing hearing aid market, and our fight is then of course, for share in that market.

Speaker #5: However , a slight uptick in Europe a sequential slowdown in US commercial from 4 to 2% , which is not as expected , and VA , on the other hand , growing , it seems like some funds for for restaffing have been released , which have made it pick up rest of the world .

Speaker #5: 4% . So we're still below the normal 4 to 6% . However , I think it's worth to highlight 3% is still growing .

Speaker #5: Hearing aid market and our fight is then of course for share in that market growth in Europe is primarily driven by strong performance in France , which continued to show strong growth .

Søren Nielsen: Growth in Europe is primarily driven by strong performance in France, which continued to show strong growth, however, primarily in the free to client category. In UK growth was driven by the private market and partly offset by slightly negative growth in the National Health Service. In Germany, growth accelerated sequentially following a slow Q2. It is worth saying that Europe without France would more be in the 2% category level. Underlying Europe is also, I would say, quite below normal, and that is, of course, also affecting our business. North America saw positive Q3 growth. Growth as announced, driven by a certain rebound in VA after a very long period, very low growth.

Speaker #5: However , primarily in the three to client category in UK , growth was driven by the private market and partly offset by slightly negative growth in the National Health Service .

Speaker #5: In Germany , growth accelerated sequentially following a slow Q2 . It is worth saying that Europe , without France would more be in the same category level , so underlying Europe is also , I would say , quite below normal , and that is of course also affecting our business .

Speaker #5: North America saw a positive Q3 growth growth at announced within by a certain rebound in VA after a very long period , very low growth .

Speaker #5: So at some stage again would also have to to work into the backlog . But still below normal levels . And again , US commercial slowed down from Q2 while growth accelerated a bit in Canada .

Søren Nielsen: At some stage, again, would also have to work into the backlog, but still below normal levels. Again, US commercial slowed down from Q2, while growth accelerated a bit in Canada. Rest of the world delivered growth. It was primarily driven by solid growth in Japan. Australia and China delivered flattish to slightly negative growth, while we estimate that several of the emerging market delivered good growth. We still estimate the ASP to be flat to slightly negative due to geography and channel mix changes. Of course, not the least, the unfavorable development between Europe and North America. Hearing aids in Q3, organic growth improved from Q2 and however, continues to be impacted by the softness in the global hearing aid market.

Speaker #5: Rest of the world delivered growth . It was primarily driven by solid growth in Japan , Australia , China delivered flattish to slightly negative growth .

Speaker #5: While we estimate that several of the emerging market delivered good growth , we still estimate the ASP to be flat to slightly negative due to geography and channel mix changes .

Speaker #5: Of course , not the least the unfavorable development between Europe and North America . Hearing aids in Q3 organic growth improved from Q2 and continues to .

Speaker #5: However , continues to be impacted by the softness in the global hearing aid market . Unit growth was positive and above the estimated 3% market unit growth , so we have taken share in third quarter and however , and in several countries , not just a single call outs , our ESP was negative due to geography and some channel mix changes .

Søren Nielsen: Unit growth was positive and above the estimated 3% market unit growth. We have taken share in Q3. However, in several countries, not just single call outs. Our ASP was negative due to geography and some channel mix changes. In Europe, Q3 growth was of course fueled by France. We have also positive growth in UK private market and a flattish growth year-over-year in Germany. I would though say in Germany, important to highlight a good, strong sequential growth after some pushback after the announced acquisition of KIND, things seems to normalize. Strong performance in Canada.

Speaker #5: And in Europe , Q2 growth was of course fueled by by France . And we have also positive growth in UK private market and flattish growth year over year in Germany .

Speaker #5: I would say in Germany , important to highlight a good strong sequential growth after some are pushback after the announced acquisition of Kint , things seems to normalize strong performance in Canada , US growth was positive due to VA and managed care , but a year over year negatively impacted by the effect of additional suppliers to large US retailers as spoken to previously .

Søren Nielsen: US growth was positive due to VA and managed care, but year-over-year negatively impacted by the effect of additional suppliers to large US retailer, as spoken to previously. Strong growth in Japan, slightly negative growth in China, and strong performance in Australia and Latin America. Not to talking lengths about Oticon Zeal, just to highlight that we did introduce and present to the world a new very novel and innovative product concept, Oticon Zeal, at the recent congress in Germany. It is a new level of performance for in-ear hearing aids. It upholds our best and most advanced AI-driven signal processing, full connectivity, rechargeability in a so far unmet discreet design, I would say for most invisible design.

Speaker #5: Strong growth in Japan , slightly negative growth in China and strong performance in Australia and Latin America . And again , not to talk in length about conceal , just to highlight that we did introduce and present to the world a new , very novel and innovative product concept already at the recent Congress in Germany .

Speaker #5: It is a a new level of performance for in-ear hearing aids . It upholds our best and most advanced AI driven signal processing , full connectivity , Rechargeability in a so far unmet discreet design , I would say for most invisible design and it got very good reception and feedback .

Søren Nielsen: It got very good reception and feedback, and I'm sure this is even that we cannot make a very fast broad global rollout. Definitely bring more attention to our business and enable a lot of good discussions with customers about the business in general. It is a new manufacturing process, totally new, and due to the ramp-up of that, it will be more gradual than normal. We will also see a more gradual commercial rollout, where we have selected a number of European markets to start here in the Q4. More broad-based global rollout will happen, I would say in particular during the H1 2026. Hearing care in Q3, solid performance in a continuous soft market.

Speaker #5: And I'm sure this is even that we cannot make a very fast , broad , global rollout . Definitely bring more attention to our business and enable a lot of good discussions with customers about the business in general .

Speaker #5: It is a new manufacturing process , totally new , and due to the ramp up of that , it will be more gradual than normal .

Speaker #5: Then we will also see a more gradual commercial rollout where we have selected a number of European markets to start here in the But more broad based global rollout will happen .

Speaker #5: I would say in particular , during the first half of 2016 , here in Q3 solid performance in a continuous soft market , we generated 9% growth in local currency , of which four was organic .

Søren Nielsen: We generated 9% growth in local currency, of which 4% was organic, very good. It's broad-based, of course, also here, France, do above average, and also Poland, but we also have several medium-sized European markets doing well and delivering solid organic growth. In North America, we saw an improvement in performance in US and a slightly negative development in Canada. We saw solid organic growth in Asia and Pacific, mainly driven by China and Australia, due to especially improved product mix, meaning, yeah, more advanced solutions. Growth in Asia particularly offset by a weak performance or partly offset by weak performance in Japan. Diagnostic in Q3 continues to face a headwind from soft market developments for instrumentation.

Speaker #5: So very good . And it's broad based . Of course . Also here , France to above average and also Poland . But we also have several medium sized European markets doing well and delivering solid organic growth in North America .

Speaker #5: We saw an improvement in us . And a negative development in Canada . We saw solid organic growth in Asia and Pacific , mainly driven by China and Australia .

Speaker #5: Due to especially improved product mix , meaning , yeah , more advanced solutions . Growth in Asia , particularly offset by a weak performance or partly offset by weak performance in Japan .

Speaker #5: Diagnostic in the third quarter continues to face a headwind from soft market developments for instrumentation , organic growth was slightly negative due to declines in key markets in Europe , but also areas part of Pacific and other regions .

Søren Nielsen: Organic growth was slightly negative due to declines in key markets in Europe, but also area or part of Pacific and other regions. We did see growth in US, but not to normal and expected level, and that's driven by again, macroeconomic uncertainty that leads to lower than normal investments in new e-equipment. We see good growth in our service and consumable business, but however, not enough to offset the negative growth on the instrument side. France continue to do well and grow in the quarter. Some negative growth in UK and Germany, but strong growth in several other European markets. Slightly positive in US, good growth in Canada, and then positive organic growth Asia and a number of other markets.

Speaker #5: We did see growth in US , but not to normal and expected level , and that's driven by , again , macro uncertainty that leads to lower than normal investments in new equipment .

Speaker #5: We see good growth in our service , consumable business . But however , not enough to offset the negative growth in on the instrument side , France continued to do well and grow .

Speaker #5: In the quarter . Some negative growth in UK and Germany , but strong growth in several other European markets . Slightly positive in US , good growth in Canada and then positive organic growth in Asia and a number of other markets .

Speaker #5: Outlook . They are very little changes to the fundamental assumptions . I will only highlight the changes to our expectation in the discontinued business .

Søren Nielsen: Outlook, there are very little changes to the fundamental assumptions. I will only highlight the changes to our expectation in the discontinued business. We still are in the process of getting out of both communication and implants. We, as I said, announced that we have made an agreement to sell to a new owner, the Oticon Medical business. As part of that, we also have recognized a need to increase the in-year 2025 loss in the discontinued business. This was already mentioned in the announcement, this is why this has been updated. Other than that, no changes to tariff assumptions to exchange rate assumptions, et cetera. There are no changes at all. Therefore, also on the outlook, relatively simple.

Speaker #5: We still are in the process of getting out of both communication and implants . We , as I . Said , announced that we have made an agreement to sell to a new owner .

Speaker #5: The Oticon Medical business . But as part of that , we also have a recognized a need to increase the in year 2025 loss in the discontinued business and this was already mentioned in the announcement .

Speaker #5: But this is why this has been updated . Other than that , no changes to tariff assumptions to . Exchange rate assumptions , etc.

Speaker #5: etc. there are no changes at all and therefore also on the outlook relatively simple . The only change is that both organic growth and Ebit , as I mentioned earlier , we now expect that we will most likely be in the lower end of the range for both organic growth and Ebit .

Søren Nielsen: The only change is that for both organic growth and EBIT, as I mentioned earlier, we now expect that we will most likely be in the lower end of the range for both organic growth and EBIT. Other than that, no changes. Let's with that, go to the Q&A session.

Speaker #5: But other than that , no changes . And let's with that go to the Q&A session .

Speaker #6: Ladies and gentlemen , at this time , we'll begin the question and answer session . To ask a question you may press star .

Operator: Ladies and gentlemen, at this time, we'll begin the question-and-answer session. To ask a question, you may press star and then one using a touch-tone telephone. To withdraw your questions, you may press star and two. If you are using a speakerphone, we do ask that you please pick up the handset prior to pressing the keys to ensure the best sound quality. Once again, that is star and then one to join the question queue. We'll pause momentarily to assemble the roster. Our first question comes from Jiang Nguyen from Citi. Please go ahead with your question.

Operator: Ladies and gentlemen, at this time, we'll begin the question-and-answer session. To ask a question, you may press star and then one using a touch-tone telephone. To withdraw your questions, you may press star and two. If you are using a speakerphone, we do ask that you please pick up the handset prior to pressing the keys to ensure the best sound quality. Once again, that is star and then one to join the question queue. We'll pause momentarily to assemble the roster. Our first question comes from Giang Nguyen from Citi. Please go ahead with your question.

Speaker #6: And then one using a touch tone telephone . To withdraw your questions you may press star and two if you are using a speakerphone .

Speaker #6: We do ask that you please pick up the handset prior to pressing the keys to ensure the best sound quality . Once again , that is star and then one to join the question queue .

Speaker #6: We'll pause momentarily to assemble the roster . And our first question comes from Zhang Nguyen from Citi . Please go ahead with your question .

Speaker #7: Hello , and thanks for taking my question . I hope you can hear me well . Two questions for me , please . The first thing is on optical field .

Jiang Nguyen: Hello, thanks for taking my question. I hope you can hear me well. Two questions from me, please. The first thing is, on Oticon Zeal, can you comment on the uptake of this product? I appreciate it's still early days and the ramp, as you said, is broad-based. Anything you can comment on how it has been trending against your expectations, maybe sharing a few key stats. My second question is on, the rest of P&L. Given pressures on the growth margin as you have a year-on-year contraction. How do you envision getting to the low end of the full EBIT guidance while keeping the profit flat half on half? What are the instruments of control can you implement in the second half to get level on full guidance? Thank you.

Giang Nguyen: Hello, thanks for taking my question. I hope you can hear me well. Two questions from me, please. The first thing is, on Oticon Zeal, can you comment on the uptake of this product? I appreciate it's still early days and the ramp, as you said, is broad-based. Anything you can comment on how it has been trending against your expectations, maybe sharing a few key stats. My second question is on, the rest of P&L. Given pressures on the growth margin as you have a year-on-year contraction. How do you envision getting to the low end of the full EBIT guidance while keeping the profit flat half on half? What are the instruments of control can you implement in the second half to get level on full guidance? Thank you.

Speaker #7: Can you comment on the uptake of this product and I appreciate it's still early days and the ramp , as you said , isn't broad based .

Speaker #7: But anything you can comment on how it has been trending against your presentation . Maybe sharing a few key facts . And my second question is on the PNL .

Speaker #7: So given pressures on the gross margins , as you flat year on year contraction , three , how do you envision getting to the low end of the full year Ebit guidance for keeping opex flat , half on half ?

Speaker #7: Or what are the implementation can be implemented in the second half to to deliver on guidance ? Thank you .

Speaker #8: Thank you .

Speaker #9: Dan , your line is quite poor , at least on our end . But I think we got your first question on uptake of Oticon seal .

René Schneider: Dan, your line is quite poor, at least on our end. I think we got your first question on uptake of Oticon Zeal. You were asking a bit on the development through the P&L with the gross margin developments. I'll let René answer that. You can revert with extra questions.

Peter Pudselykke: Dan, your line is quite poor, at least on our end. I think we got your first question on uptake of Oticon Zeal. You were asking a bit on the development through the P&L with the gross margin developments. I'll let René answer that. You can revert with extra questions.

Speaker #9: And then you were asking a bit on the development through the PNL with the gross margin developments . So let's answer that . And then you can you can revert with extra questions .

Speaker #5: Yeah . And thank you very much . Well , we presented the Oticon seal on the Congress . We a few days later made the official launch and released it after , you know , compliance to all quality systems and so on .

Søren Nielsen: Thank you very much. Well, we presented the Oticon Zeal on the EUHA Congress. We, a few days later, made the official launch and released it after, you know, compliance to all quality systems and so on. We are still very, very early days. We can sell what we can produce. That's why we have chosen to introduce in a selected number of countries. We have seen high interest, and we can deliver to that interest. We do not yet have any fitting feedbacks or anything that can confirm our own assumption of good and broad results. It is too early to say anything on that except very good market interest.

Speaker #5: So so we are still very , very early days . We have we can sell what we can produce . That's why we have chosen to introduce in a selected number of countries .

Speaker #5: We have seen high interest and we can deliver to that interest . We do not yet have any fitting feedbacks or anything that can confirm our own assumption of good and broad results .

Speaker #5: So it is too early to say anything on that except very good market interest . I think I'll leave it to you to comment a little bit on gross margin .

Søren Nielsen: I think I will leave it to you, René, to comment a little bit on gross margin.

Speaker #10: Yeah . So with the caveat that we didn't get the full , the full , the full question , the pushes and pulls , of course , are that as a direct consequence of the changed geography and channel mix on the hearing aid business side , we see the impact on the ASP and then subsequently on the gross margin .

René Schneider: With the caveat that we didn't get the full, the full question, the pushes and pulls of course are that, as a direct consequence of the change to geography and channel mix on the hearing aid business side, we see the impact on the ASP and then subsequently on the gross margin. Therefore, this is why we explicitly guide for a gross margin that is below our general expectations of 76% to 77%. The exact, you can say precision on how much lower it will be depends of course on also the development in the rest of the year and the geography mix channel changes there.

Speaker #10: And therefore this is why we explicitly guide for a gross margin that is below our general expectations of seven to 6 to 77% .

Speaker #10: The exact , you can say precision on how much lower it will be depends , of course , on also the development in the rest of the year and and geography mix channel changes .

Speaker #10: There . Yeah , so I'll leave it at that . And please revert if there's further questions around that .

René Schneider: I'll leave it at that, and please revert if there's further questions around that.

Speaker #7: Thanks , Renee . And sorry for the line , but how do you think about getting to the Ebit guidance with with the pressure on gross margin , what kind of cost control can you do for the rest of the year ?

Jiang Nguyen: Thanks, René. Sorry for the line, how do you think about getting to the EBIT guidance with the pressure on growth margin? What kind of cost control can you do for the rest of the year?

Giang Nguyen: Thanks, René. Sorry for the line, how do you think about getting to the EBIT guidance with the pressure on growth margin? What kind of cost control can you do for the rest of the year?

Speaker #10: So it's a part of the equation , of course , that we do do a cost control . And you can say there are across all the items in the PNL , various scenarios .

René Schneider: It's part of the equation, of course, that we do a cost control, and you can say there are, across all the items in the P&L, various scenarios, and there's of course also a scenario where operating expenses in H2 would be lower than in H1. That's also a scenario that's there. All things equal, our guidance is that it's likely to be flattish, half year over half year.

Speaker #10: And there's of course , also a scenario where operating expenses in H2 would be lower than in H1 . That's also a scenario that's that's there .

Speaker #10: But but all things equal , our guidance is that it's it's likely to be to be flattish , half year over half year .

Speaker #7: Thank you .

Jiang Nguyen: Thank you.

Giang Nguyen: Thank you.

Søren Nielsen: Same with the gross margin, of course, again, back to ASP, which is a very sensitive component in our business due to very different product mix in different channels and pricing. I think it is much more the top line growth and the composition of that that determines where in the range we will end.

Speaker #5: With the gross margin , of course , again back to ASP , which is a very sensitive component in our in our business due to very different product mix in different channels and and pricing .

Speaker #5: So I think it is much more the top line growth and the composition of that , that , that determines where in the range we will end .

Speaker #6: Our next question comes from Niels Granholm from DNB Carnegie . Please go ahead with your question .

Operator: Our next question comes from Niels Granholm-Leth from DNB Carnegie. Please go ahead with your question.

Speaker #11: Thank you . First question on France , on France , you're talking about double digit growth . One of your peers , Amplifon , talked about 6% growth .

Niels Granholm-Leth: Thank you. First question on France. You're talking about double-digit growth. One of your peers, Amplifon, talked about 6% growth. Have you seen an inventory build-up in France during quarter? Second question on the US commercial channel, your view, what's the reason for the sluggish growth in the US commercial channel? Is it lost purchasing power among end users and economics, geopolitical tensions, or what's wrong there? Thank you.

Speaker #11: Have you seen an inventory build up in France during the quarter ? And second question on the US commercial channel , your view , what's the reason for the sluggish growth in the US commercial channel ?

Speaker #11: Is it loss of purchasing power among end users and economics? Geopolitical tensions? Or what? What's wrong there? Thank you.

Speaker #5: Thank you very much . Nils . Yes , I've also noted the slight difference in expressing , I think our competitor on the retail space maybe use another source .

Søren Nielsen: Thank you very much, Niels. Yes, I've also noted the slight difference in expressing. I think our competitor on the retail space maybe use another source. Could be, you know, reimbursement numbers, statistics from the dispensers. We always report at wholesale level, so what is the sell into the channel, and these things sometimes have a delay. Yes, there can be stock building, there can be people that buy outside reimbursement schemes and other things. We see and have, you know, we are tracking well to the double digits. So I think it's more a reflection of different sources than it is of whether we are seeing a different world. On the US commercial, I think that, you know, the US commercial is everything that's not VA.

Speaker #5: Could be , you know , reimbursement numbers , statistics from the dispenser side . We always report at wholesale level . So what is the seller into the channel .

Speaker #5: And these things sometimes have a delay . Yes . They can be stock building . There can be people that buy outside reimbursement schemes and other things .

Speaker #5: We see and have , you know , we are tracking well to the double digits . So , so I think it's more a reflection of different sources that it is of whether we are seeing a different world .

Speaker #5: And on the US commercial , I think that , you know , the US commercial is everything that's not VA and we have seen , of course , one movement downwards consistently during the year .

Søren Nielsen: We have seen, of course, 1 movement downwards consistently during the year that's been mostly in the managed care space. That's of course 1 drag. They are less eligible and so on. There is also what I think we all know will have to contribute to consumer sentiment. People are a little more uncertain rather than actually financial impact. It is easy to postpone your first hearing aid. It is easy to use the 1 you have a little longer. The reason for believing is that also back to Europe, that without France is in 2%, we have several markets with significant reimbursement, if not free to client, the effect is more or less the same. We do attribute it to a lack of consumer confidence.

Speaker #5: That's been mostly in the managed care space . So that's of course one track . There are less eligible and so on . But there is also what I think we all know .

Speaker #5: All have to contribute to consumer sentiment . So people are a little more uncertain rather than actually financial impact . That you it is easy to postpone your first hearing aid .

Speaker #5: It is easy to use the one you have a little longer , and the reason for believing is that also back to Europe , that with out France is in 2% , we have several markets with significant reimbursement , if not free to client , and the effect is is more or less the same .

Speaker #5: So why do attribute it to lack of consumer confidence .

Speaker #11: So following up on that . So the patients who stays away are those first time buyers or are they the recurring customers .

Niels Granholm-Leth: Following up on that, so the patients who stays away, are those first time buyers or are they the recurring customers?

Speaker #5: Yeah I would say it's both because it is also , you know , the response to calling in patients for , you know , a check and a follow up and see new stuff .

Søren Nielsen: Yeah. I would say it's both, because it is also, you know, the response to calling in patients for, you know, a check, a follow-up, and see new stuff. It is in both sides. It is also the ability to attract new clients, but it's the exact split I cannot say because the one, you know, when if one is dragging a bit, you push a bit harder on the other. It is definitely from both sources, so both extension and postponement.

Speaker #5: So it is in both sides . It is also the ability to attract new clients . But but it's the exact split . I cannot say because the one you know , when one is dragging a bit , you push a bit harder on the other , but it is definitely from both sources .

Speaker #5: So both extension and postponement.

Speaker #11: Thank you .

Niels Granholm-Leth: Thank you.

Speaker #6: Our next question comes from Juliane Odor from Bank of America . Please go ahead with your question .

Operator: Our next question comes from Julien Ouaddour from Bank of America. Please go ahead with your question.

Julien Ouaddour: Thank you very much. Good afternoon, everyone. I have two, but I would like to ask the first one alone first. I know question has been asked many times, let me just like try again. Looking at the global hearing aids marketing volume, I think we clearly see some slowdowns versus the historical 4% to 6% level for quite some time now. Looking at some surveys out, we see that penetration may have slowed or even go backwards in some key markets. While it gets to a pretty high level in many countries, which could suggest less upside than in the past. Going forward, we have managed care, as you said, moving backwards on benefits, maybe new options for the patient with the hearing aid glasses.

Speaker #12: Thank you very much . Good afternoon everyone . So I have two , but I would like to ask the first one alone first .

Speaker #12: So I know question has been asked many times . Let me just try again . Looking at the global hearing aids market in volume , I think we clearly see some some slowdowns versus the historical 4 to 6% level for quite some time now .

Speaker #12: Looking at some surveys out , we see that penetration may have slowed or even go backwards in some key markets while it gets to a pretty high level in many countries , which could suggest less upside than in the past .

Speaker #12: Going forward , we have managed care , as you said , moving backwards on benefits , maybe new options for the patient with the hearing aids , glasses .

Speaker #12: So my question is , what do you expect for penetration going forward ? And another way of maybe asking the question is whether you could consider it revising down the mid growth outlook for the hearing aids markets .

Julien Ouaddour: My question is what do you expect for penetration going forward? Another way of maybe asking the question is whether you could consider it revising down the midterm growth outlook for the hearing aids markets. Just for the record, this is just the main question we probably all receive from investors right now, so that's why I'm pushing on this. Thanks. Thanks a lot.

Speaker #12: And just for the record, this is just the main question we probably all receive from investors right now. So that’s why I’m pushing on this.

Speaker #12: Thanks . Thanks a lot .

Speaker #5: It's fine . Julien and I fully understand . No I don't see any fundamental changes . The 4 to 6 is a range because it goes up and down year or year .

Søren Nielsen: It's fine, Julien, and I fully understand. No, I don't see any fundamental changes. The 4 to 6 is a range because it goes up and down year-over-year. There is, for isolated markets, nothing more powerful to penetration than reimbursement. We have just seen a brilliant example of that in France. Of course, you would technically see that if there is less support for managed care in US, you will see penetration go down a bit in US. At a global level, nothing change the assumed willingness to pay, the assumed threshold for when you think your hearing loss is big enough to get started. The main tailwind we have over time is extended life expectancy, which is what drive up the pool. Again, once you have started with hearing aids, you're very unlikely not to continue.

Speaker #5: For isolated markets, there is nothing more powerful for penetration than reimbursement. We have just seen a brilliant example of that in France.

Speaker #5: So of course you would technically see that if there is less support for managed care in us , you will see penetration go down a bit in the US , but at a global level , nothing changed .

Speaker #5: The assumed willingness to pay the assumed threshold for when you think your hearing loss is big enough to get started . The main tailwind we have over time is extended life expectancy , which is what drives up the pool .

Speaker #5: And again , once you have started with hearing aids , you're very unlikely not to continue . And that also , of course , you could say protects the penetration .

Søren Nielsen: That also, of course, you could say protects the penetration. No, to make a long story short, no, we don't have any changes to our expected mid to long term. Most of the, I would say, additional new products around are all focused on trying to expand penetration for mild hearing losses. That's, of course, a joker in it. Will it work or will it not? I don't see it as cannibalizing the existing market. If anything, it will add to it. Therefore, enough up and downs to continue to believe in a 4% to 6% range.

Speaker #5: So no , to make a long story short , no , we don't have any changes to our expected mid to long term and most of the you would say additional new products around are all focused on trying to expand penetration for mild hearing losses .

Speaker #5: So that's of course a yoga in it . Will it work or will it not . I don't see it as cannibalizing the existing market .

Speaker #5: So if anything it will add to it . And therefore enough up and downs to continue to believe in a 4 to 6% range .

Speaker #5: It is a little more than the the prevalence and a little more than the , you know , simple number of people that have joined the 65 or even 70 and therefore there is in this assumption , a continuous small uplift to penetration , which is typically driven by increased reimbursement over time , which does happen around the world .

Søren Nielsen: It is a little more than the prevalence and a little more than the, you know, single number of people that have turned 65 or even 70, and therefore there is, in this assumption, a continuous smaller uplift to penetration, which is typically driven by increased reimbursement over time, which does happen around the world.

Julien Ouaddour: Perfect. Thanks, thanks a lot, Søren. My second question is about 2026. I know it's still a little bit early to talk precisely about next year, but I mean, can you maybe talk about the, let's say, like, the key wind pack for next year? I'm looking at consensus. I think it has 5% to 6% organic growth, more than 100 basis points of margin improvement. The question is more, does this scenario needs a normalized market growth for you to achieve it? Or maybe with new product share gains, is it realistic for you to get to these points? Thank you.

Speaker #12: Perfect . Thanks . Thanks a lot . Sorry , my my my second question is about 2026 . I know it's still a little bit early to talk precisely about next year , but I mean , can you maybe talk about the , let's say , the key moving parts for next year ?

Speaker #12: I'm looking at consensus . I think it has 5 to 6% organic growth , more than 100 basis points of margin improvement . The question is more does this scenario needs a normalized market growth for you to achieve it ?

Speaker #12: Or maybe with new product share gains , is it realistic for you to to to to get to these points ? Thank you .

Speaker #13: Maybe I can start a bit and Rene .

Søren Nielsen: Maybe I can start a bit and René can supplement, but thank you. No, we don't wanna make this call a guidance for 2026, that's for sure. There is, of course, again, as always, a long list of things that works for us and against us. Market growth is, of course, a key one. What is the market growth gonna be? I don't think any of us have a crystal ball to predict that exactly. We don't expect an immediate change, but of course, over time, hope and anticipate we'll get back to a more normalized growth rate.

Speaker #5: Can supplement . But thank you know we don't want to make this call a a guidance for 26 that's for sure . But there is of course again as always a long list of things that works for us and against us .

Speaker #5: Market growth is , of course , a key one . What is the market growth going to be ? And I don't think any of us have a crystal ball to predict that .

Speaker #5: Exactly . We don't expect a immediate change . But of course , over time , hope and anticipate we will get back to a more normalized growth rate then it is market share gains in the wholesale space and and definitely I would consider 26 a good year compared to the year we've just been in with a C launch coming out .

Søren Nielsen: It is market share gains in the wholesale space, and definitely I would consider 26 a good year compared to the year we've just been in with a C launch coming out most market and also continued innovation. We have KIND coming in on top, which will also give scale and market share gains to the business. With that, you know, several improvements on leverage and gross margin, et cetera. Many good things. There's also currencies the other way, and of course continued investment in the business. There are many lines, many line items and things that end up determining the, I don't know. If you have anything to-

Speaker #5: In most markets . And also continued the innovation . We have kids coming in on top , which will also give a scale and market share gains to the business .

Speaker #5: And with that say , well , you know , improvements on , on on the leverage and , and gross margin , etc. .

Speaker #5: So , so many good things . There's also currencies the other way and of course continued investment in the business . So so there are many , many lines , many line items and and and things that end up determining the year .

Speaker #5: I don't know if any of you have anything to know .

René Schneider: No, well, it would be a repetition to what are the moving parts to think about. Well, it's the market assumption and of course, short-term, we don't have a strong line of sight to improvement in the beginning of the year, at least. Apart from that, it is, so you can say, anybody's guess. Likely you would have still continued tailwind in France to some extent, since there is some distribution of the reform that will also take place next year. As Søren mentioned, Zeal and I would also say other innovation, we would continuously launch. That's what we invest in. We will see a contribution from KIND, the acquisition there, which we are very excited about continuously.

Speaker #10: Well , it would be a repetition to what what are the moving parts to think about ? Well , it's the market assumption .

Speaker #10: And of course , short term we don't have a strong line of sight to improvement in the beginning of the year , at least .

Speaker #10: But but apart from that , it is you can say anybody's guess . Likely you would have still continued tailwind in France to some extent , since there is some distribution of the reform that we're also take place next year .

Speaker #10: Sean mentioned seal , and I would also say other innovation we would continuously launch . That's what we invest in . We will see a contribution from Kent .

Speaker #10: The acquisition there , which we are very excited about continuously . Ethics . Of course , when we go into next year , will be a headwind .

René Schneider: FX, of course, when we go into next year will be a headwind. Lastly, of course, in a much smaller scale, tariffs in diagnostics, you'll have a full year effect of that. That's some of the moving parts. Of course, we will get back to it when we talk about formally 2026.

Speaker #10: And lastly , of course , in much smaller scale tariffs and diagnostics , you will have a full year effect of that . So that's some of the moving parts .

Speaker #10: And of course we will get back to it when we when we talk about formally 26 .

Søren Nielsen: Like, this is super helpful. You mentioned KIND. I mean, can we be sure that there is no contribution into the 2025 guidance? That's all for 2026, right?

Speaker #12: This is this is this is super helpful . You you mentioned I mean can we be sure that there is no contribution into the 25 guidance ?

Julien Ouaddour: Like, this is super helpful. You mentioned KIND. I mean, can we be sure that there is no contribution into the 2025 guidance? That's all for 2026, right?

Speaker #12: That's all for Q3 2025, right?

Speaker #10: It's for 26 . Exactly .

René Schneider: It's for 26. Exactly.

Speaker #12: Okay . Perfect . Thank you .

Søren Nielsen: Okay, perfect. Thank you.

Julien Ouaddour: Okay, perfect. Thank you.

Speaker #6: Our next question comes from Martin Brennan from Nordia . Please go ahead with your question .

Operator: Our next question comes from Martin Brenøe from Nordea. Please go ahead with your question.

Speaker #14: Thank you very much for for taking my questions . And Renee , first of all , maybe just a piggybacking a bit on the Nils question on on the commercial US , can you maybe elaborate a little bit what's going on ?

Martin Brenøe: Thank you very much for taking my questions, Søren and René. First of all, maybe just piggybacking a bit on Søren Nielsen's question on the commercial US, can you maybe elaborate a little bit what's going on? Break it down, what's happening and how much is driven by managed care, for example, and how much is driven by something else. That would be the first question to understand a little bit more what's going on in US commercial and also if you have seen a continuation into this quarter.

Speaker #14: And break break it down . What what what's happening and how much is driven by managed care , for example , and how much is driven by some something else .

Speaker #14: And then that would be the first question to understand a little bit more what's going on in US commercial . And also if you have seen a continuation into to , to , to , to this quarter and then just on , on , on seal and investing into this product launch , how do you balance the fact that you have this exciting product launch , which seems to be quite a big marketing splash behind it ?

Martin Brenøe: Just on Zeal and investing into this product launch, how do you balance the fact that you have this exciting product launch, which seems to be quite a big marketing splash behind it, and the fact that you are at the very bottom of your guidance range in terms of EBIT. What's most important to you, taking market shares or delivering on your EBIT guidance? That would be the second question.

Speaker #14: And the fact that you are in a situation where you are at the very bottom of your guidance range in terms of EBIT, what's most important to you?

Speaker #14: Taking market shares or or delivering on your Ebit guidance ? That would be the second question .

Speaker #5: Yeah . Thank you Martin . I don't think I have much . I didn't already say when speaking to the US commercial market .

Søren Nielsen: Thank you, Martin. I don't think I have much I didn't already say when speaking to the US commercial market. Again, we are talking, you know, 4%, 2%, 3%. You have to be careful you don't over interpretate the... you know, what causes what. I can only again, high-level highlight managed care contraction as well as general consumer sentiment. I simply don't have it more precise than that. We have no statistics yet from first month of Q4, no comments to that. Zeal balance, it is of course, super important for us as a company to deliver on our guidance and deliver good results. It's also an important part of that to sell some products.

Speaker #5: Again , we are talking , you know , 4% , 2% , 3% . So you have to be careful . You don't owe Interpretate you know what causes what I can only again , high level highlight managed care contraction as well as general consumer sentiment .

Speaker #5: I simply don't have it more precise than that . We have no statistics yet from first month of Q4 , so no comments to that sealed balance .

Speaker #5: It is of course super important for us as a company to deliver on our guidance and deliver a good results . It's also an important part of that to solve some products .

Speaker #5: We are very conscious about not creating what you call marketing splash in markets that cannot sell anything . We do enough to create attention to the business , enough to get in dialogue with customers .

Søren Nielsen: We are very conscious about not creating what you call marketing splash in markets that cannot sell anything. We do enough to create attention to the business, enough to get in dialogue with customers that might not otherwise have enough dialogue with us, and we do that to win share also this year. This is of course a careful balance between, you know, share gain within this year, building expectations for next year. We are very focused on that.

Speaker #5: That might not otherwise have enough dialogue with us . And we do that to win . Share . Also this year , and this is , of course , a careful balance between , you know , share gain within this year , building expectations for next year .

Speaker #5: But we are very focused on that .

Speaker #14: Thank you .

Martin Brenøe: Thank you.

Speaker #15: Thank you .

Søren Nielsen: Thank you.

Speaker #6: Our next question comes from Susannah Ludwig from Bernstein . Please go ahead with your question .

Operator: Our next question comes from Susannah Ludwig from Bernstein. Please go ahead with your question.

Speaker #16: Great . Good afternoon and thanks for taking my questions . I have two , please . I guess maybe just focusing back again on the US market .

Susannah Ludwig: Great. Good afternoon, and thanks for taking my questions. I have two, please. I guess maybe just focusing back again on the US market. You guys talked about better performance in managed care and the VA and then the weakness in Costco. Could you clarify how your performance versus the market was in the independent channel? Do you think you're taking market share there as well? Are you able to quantify the headwind on sort of wholesale from the return to more players in Costco? I guess just on Zeal, could you talk about your decision to launch first in European markets rather than launching in the US market? Have you chosen markets that have a higher share of ITE products, or what was the rationale behind sort of the launch schedule?

Speaker #16: You guys talked about better performance in managed care and the VA and then the weakness in Costco . Could you clarify how your performance versus the market was in the independent channel ?

Speaker #16: Do you think you're taking market share there as well ? And then are you able to quantify the headwind on sort of wholesale from the return to more players in Costco ?

Speaker #16: And I guess just on zeal , could you talk about your decision to launch first in European markets rather than launching in the US market ?

Speaker #16: Have you chosen markets that have a higher share of it products , or what was the rationale behind sort of the launch schedule ?

Speaker #5: Yes , thank you very much . Us . I think it's , you know , quite simple . Overall , it is a you could say structural change in Costco following the additional supplier with given that I think we do quite well in terms of share in the system after the the change when we mentioned VA , this is driven by , you know , product news and general performance and of course growth in the channel and managed care .

Søren Nielsen: Yes. Thank you very much. US, I think it's, you know, quite simple. It is a, you could say, structural change in Costco following the additional supplier. Given that, I think, we do quite well in terms of share in the system after the change. When we mention the VA, this is driven by, you know, product news and general performance and of course, growth in the channel. The managed care, yes, the general managed care market is soft, slightly down. It improved a little bit lately, but still negative. Of course, we are very little exposed in that.

Speaker #5: Yes , the general managed care market is is soft , slightly down . It has proved a little bit lately . But but still negative .

Speaker #5: And of course we are very little exposed in that . However our current performance is gaining share in that channel after bottoming out in in the spring and fall of last year , and with the independent , we have , I would say , a very stable to slightly positive development , meaning that we takes , you know , some share but very sensitive .

Søren Nielsen: However, our current performance is gaining share in that channel after bottoming out in the spring and fall of last year. With the independent, we have, I would say, a very stable to slightly positive development, meaning that You know, some share, but very sensitive of course, month to month exactly where it lands. All of this is in units, and of course there is also a pricing component to it, and there's no doubt there is a quite competitive situation in the general independent market. We do well, I think, compared to most people's expectations after the many new launches, I would say we definitely stand well with the independent in the US market. Zeal Europe versus US. US is simply too big.

Speaker #5: Of course , a month to month . Exactly where it lands . This is also in all of this is in units . And of course , there is also a pricing component to it .

Speaker #5: And there's no doubt there is a quite competitive situation in the general independent market . But we do . Well , I think compared to most people's expectations after the many new launches , I would say we definitely we definitely stand well with the independent in the in the US market seal , Europe versus UA , us , US is simply too big .

Søren Nielsen: We don't wanna start a launch in US and have to run with allocation and selected customers and so on. We have picked a number of European market where the size is at a level where we are sure we can supply to demand back to Martin's good question on efficiency and return on the investment in marketing. We have to make sure we get, you know, a good return in the markets we launch it, meaning a significant volume compared to, you could say the market share potential, and get a good pick up. That's how we have selected.

Speaker #5: We don't want to start a launch in us and have to run with allocation and selected customers and so on . So we have picked a number of European market where the size is at a level where we are sure we can supply to demand back to margins .

Speaker #5: Good question on efficiency and return on the investment in marketing . So we have to make sure we get , you know , a good return in the markets .

Speaker #5: We launch it , meaning a significant volume compared to you would say the market share potential and and and get a good pick up .

Speaker #5: And that's how we have selected . And then of course Germany . What I would call a soft launch . But you cannot announce it in in not release it to customers in the country .

Søren Nielsen: Of course Germany, what I would call a soft launch. You cannot announce it in our hand, not release it to customers in the country. That's a little more select, not selective, but with a little more constraints on the volume. On the other hand, Germany is not a big in-ear pro- market. You know, well chosen and to, you know, make sure we can balance demand and production capacity.

Speaker #5: But that's a little more select not selective , but with a little more constraints on the volume . But on the other hand , Germany is not a big India market .

Speaker #5: So . So you know , well , well the chosen and and to , you know , make sure we can balance , demand and production capacity .

Speaker #16: Great . Thank you .

Andjela Bozinovic: Great. Thank you.

Susannah Ludwig: Great. Thank you.

Speaker #6: Our next question comes from Martin Parkway from SCV . Please go ahead with your question .

Operator: Our next question comes from Martin Parkhøi from SEB. Please go ahead with your question.

Speaker #17: Yes . Hello Martin Parker . So you said it before because I was just on the call as well . So maybe I've missed it , but I'll try again anyway .

Martin Parkhøi: Yes, hello, Martin Parkhøi, SEB. Sorry if you said it before because I was just on the Novo call as well, so maybe I've missed it, but I'll try again. Anyway, just on Zeal, Søren, can you talk a little about your ambition for which segments of the market you actually believe the Zeal can be helpful? Because I'm sure that you're not only going for the CRC market. I'm sure that you maybe also have ambitions outside the ITE category, maybe with the infant fit approach and the groups technology. So where do you actually see the possibility of Zeal gaining there? The same content, if you just look at the ITE share from Dan, you are more or less non-existent in DA, in ITE.

Speaker #17: Just on seal . Sean , can you talk a little about your ambition for . For which segments of the market you actually believe that can , can , can share ?

Speaker #17: Because I'm sure that you're not only going for the CRC market . I'm sure that you maybe also have patients outside the IT category , maybe with the approach or the and the technology .

Speaker #17: So , where do you actually see the possibility of Seal gaining share ? And then content ? If you just look at the it from , from the you are more or less nonexistent in VA , in it , it where do you see not a specific number .

Martin Parkhøi: Where do you see, not a specific number, but, you know, are you significant underrepresented globally in the IT market compared to your average global market share? Then, second question, I understand that Zeal of course has also been said before it would be a significant event once you hit the market during next year in the bigger market. How big are launch events at the size of a typical new platform launch with a new RITE? Does such market launch events interfere with the timing of a new platform?

Speaker #17: But you know , I use a significant underrepresented globally in the IT market compared to your your , your average global market share .

Speaker #17: And then then second question , I understand that that of course , has also been said before . It will be will be a significant event once it will hit the market during next year .

Speaker #17: The bigger market . Launch events at the size of a typical new platform launch with a new ride and does such market launch events interfere with the timing of a new platform ?

Søren Nielsen: Martin, at our end, the line was not too good, so bear with me if I don't hit it exactly on the nail compared to your question, then come back. What segments do we see Zeal in? For sure, you know, starting with the obvious is already small in-ear products, CICs, RICs. I think it's one level up. Why have RITE products grown a lot in the past 5 years? Well, the combination of the most advanced technology, and given that, you know, many people like to have direct streaming from their phone and a rechargeable battery and so on, these products have offered much greater benefit than the average in-ear product have done. We see this as the way to get all benefits back into the ear.

Speaker #5: Martin . At our end , the line was not too good , so bear with me . If I don't hit it exactly on the nail compared to your question , then come back .

Speaker #5: What segments do we see in ? For sure ? You know , starting with the obvious is already your products . Six but but I think it's one level up .

Speaker #5: Why have right products grown a lot in the past five years ? Well , the combination of the most advanced technology and given that , you know , many people like to have direct streaming from their phone and a rechargeable battery and so on , these products have offered much greater benefit than the average India product have done .

Speaker #5: So we see this as the way to get all benefits back into the ear . And exactly how that then plays out with the segments and so on .

Søren Nielsen: Exactly how that then plays out with the segments and so on, I think that's one of the things we wanna learn and see and understand. There is a limitation in ear canal and size. Not all ears can host an in-ear product. This is the smallest, I think, one of the very smallest you can make. It's not that it's worse than others, but there is just a limitation. Some people feel a level of occlusion, meaning they, you know, like having an earplug in. For some it's, others it's not an issue. Depend a little bit on how deep it is. Back to your question, I think, of course in-ear products we expect to capture significant share. Why go up in size if you can have it smaller?

Speaker #5: I think that's one of the things we want to learn and see . And understand . There is a limitation in ear canal and size , not all ears .

Speaker #5: Can host a in-ear product . This is the smallest , I think , or one of the very smallest . You can make .

Speaker #5: So . So it's not that it's worse than others , but there is just the limitation . Some people feel a level of occlusion , meaning they , you know , like having an ear plug in .

Speaker #5: For some it's others it's not an issue . Depend a little bit on how deep it is . So back to your question .

Speaker #5: I think , of course , in your products , we expect to capture significant share . Why go up in size if you can have it smaller .

Speaker #5: But there will also be some cannibalization from right products . There might also be people that choose to start earlier . Now there is a solution that actually meet their needs a little bit .

Søren Nielsen: There will also be some cannibalization from RITE products. There might also be people that choose to start earlier. Now there is a solution that actually meet their needs a little bit back to how important cosmetics and design is for maybe especially the still work active, 65-year-old, et cetera, milder hearing loss, struggling in certain situations. Yeah, I think it's very important, it's very important not just to look at, and maybe that's a better answer, what you should not just look at. Don't just look at a category for instant fit or CIC, RIC. That's in my book, way too narrow a potential to look at. Our global share is low. We are strong in building RITES. We actually made the first one.

Speaker #5: Back to how important cosmetics and design is for maybe especially the still work active 65 year old , etc. milder hearing loss , struggling in certain situations .

Speaker #5: So so yeah , I think it's very broad . It's very important not just to look at maybe that's a better answer . What you should not just look at don't just look at a category .

Speaker #5: For instance , fit or CIC , IIc . That's in my book way too narrow a potential to look at . And our global share is is low .

Speaker #5: We are strong in building , right ? We actually made the first one . So it's also , you know , what's the footprint and what's the sand .

Søren Nielsen: It's also, you know, what's the footprint and what's the sand? We are part of the market, so there's no doubt that that's one of our competitive strengths. You could also say the reason why we reinvent the way of doing it is because we have not managed to build success in conventional in-ear products, and we believe much more in this way of doing it going forward, as it can offer all benefits. The second question was not too loud and clear. If you ask for future introductions under this new platforms, as always, we don't disclose any details on that. Zeal is a key focus now, but it does not prevent us from introducing other products in 2026.

Speaker #5: We are part of the market . So so there's no doubt that that's one of our competitive strengths . And you could also say the reason why we reinvent the way of doing it is because we have not managed to build success in conventional India products .

Speaker #5: And we believe much more in this way of doing it going forward , as it can offer benefits . The second question was not too loud and clear , but if you ask for future introductions under this , new platforms , as always , we don't disclose any details on that .

Speaker #5: But Seal is a key focus . Now . But it does not prevent us from introducing other products in 26 .

Martin Parkhøi: I just have a follow-up. It's actually not a follow-up. It's actually a new question. It's just for René. We of course, VA pricing, we of course, most of us at least, noted that you have a pretty low price on chargers compared to your peers in VA. Can you confirm that if you should be lucky enough to get that sorted out and get a price on par with peers in the charger category, that that would be a potential contribution at the neighborhood of 75 to 80 million DKK on sales and EBIT on an annualized basis?

Speaker #17: I just have a follow up . It's actually another follow up . It's actually a new question . It's just for for Rene .

Speaker #17: We of course VA pricing . We of course , most of us at

Speaker #17: least all noted that you have a pretty low price on charges compared to your peers in in VA . Can you confirm that if you should be logging off to to get that sorted out and get a price on par with the with peers in the category , that that would be a potential contribution at the at the neighborhood of of 75 to 80 million Danish kroner on sales and Ebit on an annualized basis .

Speaker #5: Yeah , I think I will allow myself to answer . I think there is , of course , an upside of improved pricing .

Søren Nielsen: you know the market share, you know the number of rechargeable, you know the price difference. Assuming that the price gap is narrowed significantly, then I think you can all make your math and come to a conclusion on what the upside of that is

Speaker #5: And , you know , the total market , you know , the market share , you know , the number of rechargeable , you know , the price difference .

Speaker #5: So assuming that the price gap is narrowed significantly , then I think you can all make your your math and come to conclusion on what the upside of that is .

Speaker #6: Our next question comes from Angela Bozinovic from BNP Paribas . Please go ahead with your question .

Operator: Our next question comes from Andjela Bozinovic from BNP Paribas. Please go ahead with your question.

Speaker #18: Hi . Good afternoon and thank you for taking my questions . The first one , maybe just on your wholesale business . You managed to increase market share despite having one of the oldest platforms available .

Andjela Bozinovic: Hi, good afternoon, and thank you for taking my questions. The first one may be just on your wholesale business. You managed to increase market share despite having one of the oldest platforms available. Can you maybe just share any details where did you see the market share gains, and if you want to highlight any particular channel or region? Following up on this is you've now launched Oticon Zeal, but do you feel like you can still deliver market share gains with the current offering in 2026 as well? The second question is just on your implied Q4, because if we put the low end of the guidance, we arrive at a slowdown in Q4. Can you give us any reasons why to assume so and any moving parts that we should have in mind? Thank you.

Speaker #18: Can you maybe just share any details ? Where did you see the market share gains ? And if you want to highlight any particular channel or or region and following up on this is you've now launched zeal .

Speaker #18: But do you feel like you can still deliver market share gains with a current offering in 2026 as well ? And the second question is just on your implied Q4 , because if we put the low end of the guidance , we arrive at a slowdown in Q4 , can you give us any reasons why to assume so ?

Speaker #18: And any moving parts that we should have in mind ? Thank you .

Speaker #5: Yeah , thank you very much . I think our ability to grow , share globally is a testament to the quality of our platform .

Søren Nielsen: Yeah. Thank you very much. I think our ability to grow share globally is a testament to the quality of our platform. If I may use Oticon Zeal as an illustration, this product is only possible because we have a super power efficient platform that delivers very, very high otological performance, that have a very power efficient system that even in a small form factor and a slightly smaller battery, you can still get a full day use and take good care of the battery and the life of the product. We have a very strong power efficient radio, 2.4 GHz, modern Bluetooth Low Energy radio. These things together enable us to make an Oticon Zeal. It enable us to make very small new miniBTE, very powerful one, without compromising size.

Speaker #5: If I may use only concealer as an illustration , this product is only possible because we have a super power efficient platform that delivers very , very high audiological performance that have a very power efficient system that even in a small form factor and a slightly smaller battery , you can still get a full day .

Speaker #5: Use and take good care of the battery and the life of the product . And we have a very strong power efficient radio .

Speaker #5: 2.4GHz modern Bluetooth Bluetooth , Low energy radio and these things together enable us to make an audio conceal it , enable us to make very small new mini PC , very powerful one without compromising size .

Speaker #5: So I think it is actually a testament to the quality of the underlying platform and the stability of it . The quality of it , the people's patient satisfaction ultimately , and this is why we have been able to to year or year , and also sequentially improve share .

Søren Nielsen: I think it is actually a testament to the quality of the underlying platform and the stability of it, the quality of it, people's, you know, patient satisfaction ultimately. This is why we have been able to year-over-year and also sequentially improve share. There is not, you know, a single one to call out. There is one to call out on the negative side, which is the year-over-year effect in large US retailer due to expanded portfolio of manufacturers. You could say, excluding that, we definitely have done I think well compared to the number of competitive introductions that have been.

Speaker #5: And there is not a , you a single one to call out . There is one to call out on the negative side , which is the year over year effect in large US retailers due to expanded portfolio of manufacturers .

Speaker #5: So you could say excluding that , we definitely have done nothing . Well , compared to the number of competitive introductions that have been .

Speaker #5: So then adding zeal and a powerful , very small for more profound or severe to profound hearing losses . And also a good launch schedule for next year , then , yes , I feel comfortable about the ability to gain share and our global market , the reason why we are not performing at our best is primarily , of course , that the loss of share in that particular channel in US .

Søren Nielsen: Adding Zeal and a powerful, very small BTE for more profound, or severe to profound hearing losses, and also a good launch schedule for next year, yes, I feel comfortable about the ability to gain share in a global market. The reason why we are not performing at our best is primarily, of course, that loss of share in that particular channel in US, but then, also the global market. Low end slowdown, I think you should expect, you know, at least what we do, that we see somewhat similar in Q4 to the performance of Q3. The Q3 have performed in the lower end of expectations.

Speaker #5: But then also the global market , low end slowdown . I think you should expect , you know , at least what we do that we see somewhat similar in the fourth quarter to the performance of the third quarter .

Speaker #5: The third quarter have performed in the lower end of expectations . And , you know , it's always many scenarios when we build a expectation and also why we have , you know , 1 to 3% organic growth and 400 million DKK in Ebit is because there is a lot of variables down the line .

Søren Nielsen: You know, it's always many scenarios when we build a expectation and also why we have, you know, 1% to 3% organic growth and DKK 400 million in EBIT is because there is a lot of variables down the line. Big picture is, expect Q4 to also be, I would say, in the low end of our expectations, but somewhat similar to what we have seen from a growth point of view in Q3.

Speaker #5: And yeah , big picture is expect Q4 to also be , I would say in the low end of our expectations . But somewhat similar to what we have seen from a growth point of view in the third quarter .

Speaker #18: Perfect . Thank you . And if I can squeeze in just a quick one on France , I know you commented that it's probably the statistic that is making the difference between you and Amplifon , but can you just comment on your market share in the country ?

Andjela Bozinovic: Perfect. Thank you. If I can squeeze in just a quick one on France. I know you commented that it's probably statistic that is making the difference between you and Amplifon. Can you just comment on your market share in the country since the start of the renewals in France?

Speaker #18: Since the start of the renewals in in France ?

Speaker #5: Yes , very quickly , slightly up on the wholesale level , meaning , you know , that's where we measure . So it of course both come from good performance in our retail activities as well as wholesale activities .

Søren Nielsen: Yes. Very quickly. Is slightly up on the wholesale level. Meaning, you know, that's where we measure. It of course both come from good performance in our retail activities as well as wholesale activities.

Speaker #18: Perfect . Thank you so much .

Niels Granholm-Leth: Perfect. Thank you so much.

Andjela Bozinovic: Perfect. Thank you so much.

Speaker #6: Our next question comes from Martini Roula from Jefferies . Please go ahead with your question .

Operator: Our next question comes from Julien Dormois from Jefferies. Please go ahead with your question.

Speaker #19: Hi guys . I hope that you can hear me . Okay . And I apologize in advance if the question has already been addressed , but the line was really bad on my end , so I would have to if that's okay for you .

Julien Dormois: Hi, guys. I hope that you can hear me okay. I apologize in advance if the question has already been addressed, but the line was really bad on my end. I would ask two, if that's okay for you. The first one revolving around managed care. I'd be curious to hear your thoughts on your share recovery in the channel and any potential contribution that could or could not be baked into the 2025 guide. How should we think about any potential tailwind going into next year? I'll give you some time to answer that, this question to, before asking the second one, if that's okay for you.

Speaker #19: The first one revolving around managed care , I'd be curious to hear your thoughts on your share recovery in the channel and any potential contribution that could or could not be baked into the 2025 guide .

Speaker #19: And how should we think about any potential tailwind going into next year and give you some time to answer that ? this question to before asking the second one , if that's okay for you .

Speaker #5: Thank you . You are loud and clear . We are still as team and you would say underrepresented in managed care for . Would say structural reasons .

Søren Nielsen: Thank you. You're loud and clear. We are still, as stated, underrepresented in managed care for structural reasons. One of the biggest administrators is owned by one of our competitors. It would be naive to believe we could get a very high share in their channel. We will always be sub-average in that channel. We also, you know, do it slightly, with a slightly different strategy between our wholesale business and our retail business. In our US retail business, we have come to the conclusion that we are better off trying to build our own traffic and therefore, do less to little managed care compared to the market. That's working good for the US retail business.

Speaker #5: One of the biggest administrators is owned by one of our competitors . It would be naive to believe we could get a very high share in their channel .

Speaker #5: So . So we will always be sub average in that channel . We also , you know , do it slightly with a slightly different strategy between our wholesale business and our retail business .

Speaker #5: In our US retail business , we have come to the conclusion that we are better off trying to build our

Speaker #5: own The traffic and therefore do less to little managed care compared to the market and and that's working good for the US retail business .

Speaker #5: On the wholesale side , we are re-establishing , I would say , a business relationships with a broader array of the players . After the loss of year last year and into the beginning of this year , and we see continued sequential improvements .

Søren Nielsen: On the wholesale side, we are reestablishing, I would say, business relationships with a broader array of the players after the loss of share last year and into the beginning of this year. We see continuous sequential improvements. All in all, for the group performance, it's not, it's not that big, and therefore, not a big weight in the total equation. We are gaining share in the channel to confirm.

Speaker #5: All in all , for the group performance , it's not it's not that big and therefore not a big weight in the in the total equation .

Speaker #5: But we are gaining share in the channel to confirm .

Speaker #19: Okay . That's perfect . And my second question would be around the economics around the the the sale products . I would love to hear your thoughts on the potential margin impact that this could have .

Julien Dormois: Okay. That's perfect. My second question would be around the economics, around the Zeal products. I would love to hear your thoughts on the potential margin impact that this could have. Not right now because I understood that you're not ready from a manufacturing capacity standpoint and so on at the moment. Just circling back on one comment that you've made at EUHA, around the improvements in terms of robustness and reliability stemming from the encapsulation of the body of the device. I was wondering if this product could start to be a tailwind on the margin.

Speaker #19: Not right now , because I understood that you are not ready from a manufacturing capacity standpoint and so on at the moment , but just circling back on on one comment that you've made , I yuha around the improvements in terms of robustness and reliability stemming from the encapsulation of the body of the device .

Speaker #19: So I was wondering if this product could start to be a tailwind on the margin , because I get the point that the product is more reliable , but having only one big piece for the shell of the device could also imply that the device could be less sustainable , i.e. so more difficult to to repair .

Julien Dormois: I get the point that the product is more reliable, but having only one big piece for the shell of the device could also imply that the device could be less sustainable, i.e., more difficult to repair. Any comments around that would be super helpful.

Speaker #19: So any comments around that would be super helpful ?

Speaker #5: Yeah , there's a lot of moving parts in that equation , and I think it's a little too early to to give a precise guidance .

Søren Nielsen: Yeah. There's a lot of moving parts in that equation, and I think it's a little too early to give a precise guidance. I would still repeat what I said at OHIP. From a cost of goods point of view, a Zeal is less expensive than a custom-made in-ear product. It is, at least at current production maturity and efficiency, et cetera, more expensive than a RIC product. Is it more or less reliable? It fundamentally has been built to be more reliable because you obviously can't repair to the same extent. You could say the call frequency or service frequency hopefully go down. On the other hand, those where we can't solve the problem with replacing a wax filter or a dome or the filter around the microphone and the antenna would be more expensive.

Speaker #5: I would still repeat what I said that I have from a cost of goods point of view . Then a seal is less expensive than a custom made India product .

Speaker #5: But it is at least a current production maturity and efficiency , etc. more expensive than a right product , is it ? Then more or less a reliable IT fundamentally has been built to be more reliable because you obviously can't repair to the same extent .

Speaker #5: So you can say the the goal frequency or service frequency . Hopefully go down on the other hand , those where we can't solve the problem with replacing a wax filter or dome or the filter around the microphone on the antenna would be more expensive .

Speaker #5: So simply too early to call out exactly how that total cost equation through life looks like . So we will have to have a bit more experience until we can finalize any more specific guidance on that .

Søren Nielsen: It's simply too early to call out exactly how that total cost equation through life looks like. We will have to have a bit more experience until we can finalize any more specific guidance on that.

Speaker #19: Okay , that's perfect . Thank you very much .

Julien Dormois: Okay. That's perfect. Thank you very much.

Operator: Our final question this morning comes from Niels Granholm-Leth from DNB Carnegie as a follow-up. Please go ahead with your question.

Speaker #6: And our final question this morning comes from Niels Granholm from DMV Carnegie . As a follow up , please go ahead with your question .

Operator: Our final question this morning comes from Niels Granholm-Leth from DNB Carnegie as a follow-up. Please go ahead with your question.

Speaker #11: Thank you again . This summer , Amplifon called out this five year replacement cycles . So in your view , what proportion of units sold in the global hearing aid market would take place in markets where there is a pretty accurate five year replacement cycle ?

Niels Granholm-Leth: Thank you. Again, this summer, Amplifon called out this five-year replacement cycles. In your view, what proportion of units sold in the global hearing aid market would take place in markets where there is a pretty accurate five-year replacement cycle?

Speaker #5: Yeah . Thank you . Nils I think it is a relatively inconsistent if you just take the biggest markets in the world , you know us is primarily commercial and therefore more in the four year range because that's actually what people tend to do if they pay without reimbursement .

Søren Nielsen: Yeah. Thank you, Niels. I think it is relatively inconsistent. If you just take the biggest markets in the world, you know, US is primarily commercial and therefore more in the 4-year range, because that's actually what people tend to do if they pay without reimbursement. Then we have France, which is, which is 4 years, so a relatively short cycle. Then you have Germany in the other end with for some insurance companies up to beyond 6 years. I think the global average of 5 years is a very fair assumption, but it distributes. When you have whether it's 4 or 5 or 6 years, you know, not everybody shows up day 1 when the, when the reimbursement is when you're eligible again.

Speaker #5: Then we have France , which if which is four years . So a relatively short cycle . And then you have Germany in the other end with for some , you know , insurance companies up to beyond six years .

Speaker #5: So I think the , the global average of five years is , is a very fair assumption . But it distributes . So when you have a whether it's four or 5 or 6 years , you know , not everybody shows up day one when when the , when the reimbursement is when you're eligible again , it's actually a important part of our building traffic to remind people that at least they are now eligible for new reimbursement and therefore , maybe it's worth making a visit .

Søren Nielsen: It's actually a important part of our building traffic to remind people that at least they are now eligible for a new reimbursement, and therefore maybe it's worth making a visit.

Speaker #11: Great. And then just finally, do you still expect to announce integration costs related to Kind at the time of the closing?

Niels Granholm-Leth: Great. Just finally, do you still expect to announce integration costs related to KIND at the time of the closing?

Søren Nielsen: Yeah, that's still the plan, Niels.

Speaker #10: Yeah , that's still the plan .

Søren Nielsen: Yeah, that's still the plan, Niels.

Speaker #11: Thank you .

Niels Granholm-Leth: Thank you.

Speaker #6: Yeah . Ladies and gentlemen , with that , we'll be ending today's question and answer session . I'd like to turn the floor over to management for any closing remarks .

Operator: Ladies and gentlemen, with that, we'll be ending today's question and answer session. I'd like to turn the floor over to management for any closing remarks.

Speaker #9: Thank you . And thank you so much to everybody for joining our call here today . As always , if you have further questions that we can help you with , please do reach out to us directly .

Søren Nielsen: Thank you, operator. Thank you so much to everybody for joining our call here today. As always, if you have further questions that we can help you with, please do reach out to us directly. Our contacts can be found online as always. We of course, always look forward to seeing you on the road in the coming weeks ahead. Have a good rest of the day. Thank you.

Speaker #9: Our contacts can be found online . As always . And we of course always look forward to seeing you on the road in the coming weeks ahead .

Speaker #9: Have a good rest of the day . Thank you .

Speaker #6: And ladies and gentlemen , with that , we'll conclude today's presentation . We do . Thank you for joining . You may now disconnect your lines .

Operator: Ladies and gentlemen, with that, we'll conclude today's presentation. We do thank you for joining. You may now disconnect your lines.

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