Q2 2026 Demant A/S Earnings Call

August 12, 2026

Speaker #1: Good afternoon, everyone, and welcome to the conference call for the Demant Interim Report for 2026. My name is Peter Pusselücke, and I'm heading up the investor relations activities here at Demant.

Peter Pudselykke: Good afternoon, everyone, and welcome to the conference call for Demant's interim report for 2026. My name is Peter Pudselykke, and I am heading up the investor relations activities here in Demant. With me today, I have our usual crew, our President and CEO, Søren Nielsen, our CFO, René Schneider, as well as one of my good colleagues in the IR team, Gustav Høegh. As you should have seen by now, there were a couple of announcements out from us last night, one relating to the interim report and one relating to the launch of our new premium hearing aid, Oticon Reveal. We will be discussing both during today's call, and we plan to kick off with a presentation, which will be followed up by a Q&A session. The total session is expected to last no more than one hour, and the presentation should be online by now.

Peter Pudselykke: Good afternoon, everyone, and welcome to the conference call for Demant's interim report for 2026. My name is Peter Pudselyk`ke, and I am heading up the investor relations activities here in Demant. With me today, I have our usual crew, our President and CEO, Søren Nielsen, our CFO, René Schneider, as well as one of my good colleagues in the IR team, Gustav Høegh. As you should have seen by now, there were a couple of announcements out from us last night, one relating to the interim report and one relating to the launch of our new premium hearing aid, Oticon Reveal. We will be discussing both during today's call, and we plan to kick off with a presentation, which will be followed up by a Q&A session. The total session is expected to last no more than one hour, and the presentation should be online by now.

Speaker #1: With me today I have our usual crew: our President and CEO, Søren Nielsen; our CFO, René Schneider; as well as one of my good colleagues in the IR team, Gustav Hoegh.

Speaker #1: As you should have seen by now, there were a couple of announcements out from us last night—one relating to the interim report and one relating to the launch of our new premium hearing aid, UltiCon Reveal.

Speaker #1: We will be discussing both during today's call, and we plan to kick off with a presentation, which will be followed by a Q&A session.

Speaker #1: The total session is expected to last no more than one hour, and the presentation should be online by now. When we get to the Q&A, we kindly remind you to limit yourselves to two questions at a time, please.

Peter Pudselykke: When we get to the Q&A, we kindly remind you to limit yourselves to two questions at a time, please, to allow as many as possible to ask a question. Before we dig into the presentation, please do pay notice to the disclaimer slide on slide 2, and with that, on to slide 3, where I will leave Søren to start with the agenda, please.

Speaker #1: To allow as many as possible to ask a question, before we dig into the presentation, please do pay notice to the disclaimer slide on slide 2. And with that, on to slide 3, where I will leave it to Søren to start with the agenda, please.

Speaker #2: Thank you very much, Peter, and welcome, everybody, to today's agenda. No surprise highlights and financial takeaways, big business area review; Ren will take us through more details on the group financials.

Søren Nielsen: Thank you very much, Peter, and welcome, everybody. Today's agenda, no surprise. Highlights and financial takeaways, big business area review. René will take us through more details on the group financials. We will discuss the outlook or present the revised outlook and take Q&A. H1 highlights for Demant 2026. Strong momentum in all business areas. Ahead of expectation with growth accelerating from Q1 into Q2. This is driven by strong performance in hearing aids, where we fueled by the success of Oticon Zeal, have seen a further strengthening of the momentum. Market growth remains to be in line with what we saw in Q1, but which is in the higher end of our, I would say, lower than normal expectations.

Speaker #2: We'll discuss the outlook, or present the revised outlook, and take Q&A. And the first-half highlights for Demant 2026: strong momentum in all business areas, ahead of expectation with growth accelerating from first quarter into second.

Speaker #2: This is driven by strong performance in hearing aids, where we fueled by the success of UltiCon Seal, have seen a further strengthening of the momentum, market growth remains to be in line with what we saw in the first quarter but which is in the higher end of our I would say lower than normal expectations.

Speaker #2: In hearing care, we have seen very solid execution, and of course also significant contribution from the acquisition of Kint, which in all in all have delivered very strong performance.

Søren Nielsen: In Hearing Care, we have seen very solid execution and of course also significant contribution from the acquisition of KIND, which all in all have delivered very strong performance, KIND not the least. Cost-saving initiatives announced in February 2026, are progressing ahead of plans and supporting underlying margin improvements. René will go through that in more details. The divestment of the implant and communication business was completed in Q1, and we are now a fully focused hearing healthcare company. Key financial takeaways from H1. Group reported growth of 15%, a strong momentum in all business areas, and 10% of these are acquisitive growth, primarily coming from KIND but also other acquisitions. A key highlight is the increased gross margin, increased by one percentage point, driven by strong geography channel product mix in hearing aids, leading to strong ASP and supported by the acquisition of KIND in Hearing Care.

Speaker #2: Kint, not the least. Cost-saving initiatives announced in February 2026 are progressing ahead of plans and supporting underlying margin improvements. Ren will go through that in more detail.

Speaker #2: The divestment of the implant and communication business was completed, in Q1, and we are now fully focused hearing healthcare company. Key financial takeaways from the first half: group reported growth of 15%, a strong momentum in all business areas, and 10% of these are acquisitive growth, primarily coming from Kint but also other acquisitions.

Speaker #2: A key highlight is the increased gross margin, increased by 1.1 percentage points, driven by strong geography channel product mix in hearing aids, leading to strong ASP, and supported by the acquisition of Kint in hearing care, hearing care retail business structurally have a slightly lower or higher, sorry, gross margin than the wholesale business, and therefore of course the mix also pulls it up.

Søren Nielsen: Hearing Care retail business structurally have a slightly higher gross margin than the wholesale business, and therefore of course the mix also pulls it up. I would also say here, higher than we expected. OPEX increased by 5% organically, partly supported by cost-saving initiative announced earlier in the year in February. Acquisitions predominantly KIND added 14% to group OPEX. EBIT before special items was DKK 2.134 billion, corresponding to an EBIT margin of 16.5%. Below that, again, René will elaborate on that, strong underlying performance improvement, and also underlying margin improvement. Strong cash flow. Cash flow from operation of DKK 1.6 billion, corresponding to a 6% increase compared to H1 2025. Based on our performance in H1 and reassessment of the momentum and the outlook for H2, we have upgraded our financial outlook for 2026.

Speaker #2: But I would also say here higher than we expected. OPEX increased by 5% organically, partly supported by cost saving initiative announced in the earlier in the year in February, acquisitions predominantly Kint added 14% to group OPEX.

Speaker #2: And EBIT before special items was 2.134 billion Danish kroner, corresponding to an EBIT margin of 16.5, below that again Ren will elaborate on that strong underlying performance improvement, and also underlying margin improvement.

Speaker #2: Strong cash flow—cash flow from operations of $1.6 billion—corresponding to a 6% increase compared to the first half of '25. And based on our performance in the first half, and a reassessment of the momentum and outlook for the second half, we have upgraded our financial outlook for 2026.

Speaker #2: The organic revenue growth is now expected to be 6 to 7%, and EBIT before special items DKK 4.4 to 4.8 billion. For the business areas, starting with hearing aids, we estimate that the global hearing aid market in the first half of 2026 has grown 4% in value and 3% in units. The unit growth in the second quarter comes out a little bit different than in the first quarter, with US commercial being 0 and US VA being 1.

Søren Nielsen: The organic revenue growth is now expected to be 6% to 7% and EBIT before special items DKK 4.4 to 4.8 billion. For the business areas, starting with hearing aids. The global hearing aid market in H1 2026, we estimate that it have in value grown 4%, three in units. The unit growth in Q2 comes out a little bit different than Q1, with US commercial being zero and US VA being one. This is less than Q1, but the comps are also different. So 30,000 feet unchanged market conditions still below the normal expectation of 4% to 6%, but a little more positive on the ASP development where we normally anticipate flat. We have seen an estimate and improved pricing of 1% also in Q2. In Q2, highlights by geography.

Speaker #2: This is less than first quarter, but comes also different, so 30,000 feet unchanged market conditions, still below the normal expectation of 4 to 6, but a little more positive on the ASP development, where we normally anticipate flat.

Speaker #2: We have seen an estimated and improved pricing of 1%, also in the second quarter. In the second quarter, highlights by geography: growth in Europe was driven by Germany and France, whereas NHS was negative.

Søren Nielsen: Growth in Europe was driven by Germany and France, whereas NHS was negative. This is purely due to phasing of purchase there. Excluding UK, Europe saw 6% growth, so quite solid. In North America, as I already spoke to, flat or modest growth in North America, depending on channel. Canada saw strong growth. Rest of the world, we have no statistics, but we estimate that China maintained some positive momentum despite continuously challenged market conditions. In Australia, growth has also returned to positive development following soft Q1. But again, all these with a grain of salt, depending on last year's phasing. All in all, we see the market conditions in line with what we saw in Q1. Hearing aids in Q2. Further acceleration of growth, driven by a full rollout of Oticon Zeal into all channels and geographies. That has delivered a 10% growth.

Speaker #2: This is purely due to phasing of purchase there. Excluding Europe—excluding the UK—Europe saw 6% growth, so quite solid. In North America, as I already spoke to, we saw flat or modest growth depending on the channel.

Speaker #2: Canada saw strong growth. For the rest of the world, we estimate—well, we have no statistics—but we estimate that China maintained some positive momentum despite continuously challenged market conditions.

Speaker #2: In Australia, growth has also returned to positive development following a soft Q1, but again, all these with a grant of salt, depending on last year's phasing, all in all we see the market conditions in line with what we saw in first quarter.

Speaker #2: Hearing aids, in the second quarter, further acceleration of growth, driven by a full rollout of UltiCon Seal into all channels and geographies. And that has delivered 10% growth. I would say it's broad-based. It is Seal that, yeah, in many ways is the spearhead of the growth and changed the momentum, but we have really seen a nice broad pickup, most predominantly in North America, where we delivered double-digit growth, which is obviously way ahead of the underlying market growth.

Søren Nielsen: I would say it's broad-based. It is Zeal that, yeah, in many ways is the spearhead on the growth and change the momentum. But we have really seen a nice broad pickup, most predominantly in North America, where we deliver double-digit growth, which is obviously way ahead of the underlying market growth. Also strong in Canada, solid in Germany and UK, France and Spain also, strong growth. In Asia Pacific, highlights are Japan and to some extent Australia, whereas China saw negative growth primarily due to the challenging market conditions. We also, as Peter said yesterday, released the news that we will be introducing very shortly, new flagship product, Oticon Reveal, our latest innovation. I'll share a few highlights on the core technology that now takes performance of hearing aids to a new level.

Speaker #2: Also strong in Canada; solid in Germany and the UK; France and Spain also saw strong growth. In Asia Pacific, highlights are Japan and, to some extent, Australia, whereas China saw negative growth, primarily due to the challenging market conditions.

Speaker #2: And we also, as Peter said yesterday, released the news that we will be introducing very shortly a new flagship product, UltiCon Reveal, our latest innovation, and I'll share a few highlights on the core technology that now takes the performance of hearing aids to a new level.

Speaker #2: We introduced the world's first dual AI system, and what's the call of that? The call of that is that so far most AI systems, if not all, have centered around trying to somehow detect noise and suppress this more or less depending on your philosophy.

Søren Nielsen: We introduced the world's first dual AI system, and what's the core of that? The core of that is that so far, most AI systems, if not all, have centered around trying to somehow detect noise and suppress this, more or less, depending on your philosophy. We have now added a parallel AI system that focus on speech and the content of the speech and the details of the speech. So you can say the contrast, the clarity of the speech is further enhanced. These two system works in parallel, but of course, synchronized and optimized towards one another. So all in all, working as one system in real time, all the time, very strong. This is powered by a brand-new Reveal AI platform.

Speaker #2: We have now added a parallel AI system that focus on speech and the content of the speech and the details of the speech, so you can say the contrast, the clarity of the speech is further enhanced.

Speaker #2: These two systems work in parallel, but of course are synchronized and optimized toward one another—so, all in all, working as one system in real time, all the time. Very strong.

Speaker #2: And this is powered by a brand new Reveal AI platform. It is still built as we have done things for a number of years now, to support the way the brain makes sense of things—the way we translate from what we get in, to what it means, to what it is that's being said, so that we can give a response and enjoy what we hear.

Søren Nielsen: It is still built, as we have done things for a number of years now, to support the way the brain makes sense of things, the way we translate from what we get in to what it means, to what it is that's being said to, that we can give a response or enjoy what we hear. The world's first dual AI system supports speed, precision, balancing of things. A part of that is, one thing is to know what you want to do very fast and be able to adjust the gain very precisely in the instrument. But in case you don't have a very strong anti-feedback system, meaning that the microphone end up hearing the speaker, then you can simply not deliver the gain.

Speaker #2: And the world's first dual AI systems supports speed, precision, balancing of things, and a part of that is one thing is to know what you want to do very fast and be able to adjust the gain very precisely in the instrument, but in case you don't have a very strong anti-feedback system, meaning that the microphone end up hearing the speaker, then you can simply not deliver the gain.

Speaker #2: We have significantly improved our feedback prevention system, so we can deliver much more gain at much faster and higher precision to a level we don't believe any competitors are near.

Søren Nielsen: We have significantly improved our feedback prevention system so we can deliver much more gain at much faster and higher precision, to a level we do not believe any competitors are near. This is in reality also very important in delivering the benefits to the end user, because this is often about providing a lot of gain for soft sounds. So you get, again, the small details out of things. A new connectivity platform that brings even stronger stability and longer range. So users, again, can enjoy the connection to the phone, even if the phone is quite remotely placed and basically hear it ringing or enjoying music, whatever. With this dual AI system, which is the core of it, this is created by a new platform. A platform that is still based on our philosophy, is based on a single chip.

Speaker #2: And this is in reality also very important in delivering the benefits to the end user, because this is often about providing a lot of gain for soft sounds, so you get again the small details out of things.

Speaker #2: There is also a new connectivity platform that brings even stronger stability and longer range, so users again can enjoy the connection to the phone even if the phone is quite remotely placed, and basically hear it ringing.

Speaker #2: Or enjoying music, whatever. And with this dual AI system, which is the core of it, this is created by a new platform, a platform that still based on our philosophy is based on a single chip.

Speaker #2: This is a major benefit to power consumption, to size, integration level, and the optimization of that allows us to do the two AI systems in parallel without destroying power consumption, so things are still on all the time working seamlessly for the end user, and there's no limitation to how much you can be in noise or how many hours or minutes you can use it.

Søren Nielsen: This is a major benefit to power consumption, to size, integration level. The optimization of that allows us to do the two AI systems in parallel without destroying power consumption. So things are still on all the time, working seamlessly for the end user, and there is no limitation to how much you can be in noise or how many hours or minutes you can use it. These things are always on and will help you getting an unmatched precision of speech and an unmatched clarity in noisy environments, but also while maintaining a level of contextual sound. So you actually know that you are in the restaurant or in the traffic or wherever you are. There is a very solid basis for documenting these benefits. Some would say in a slightly scientific way, but this is to make sure things actually work.

Speaker #2: These things are always on and will help you getting an unmatched precision of speech and an unmatched clarity in noisy environments, but also while maintaining a level of contextual sound, so you actually know that you're in the restaurant or at the in the traffic or wherever you are.

Speaker #2: There is a very, very solid basis for, you know, documenting these benefits. Some would say in a slightly scientific way, but this is to make sure things actually work.

Speaker #2: We see a very significant improvement in the signal-to-noise ratio presented to the end user without taking things out, but balancing them differently. We see a very significant improvement to the speech intelligibility index as it's called, meaning how can I actually understand and make sense of things.

Søren Nielsen: We see a very significant improvement in the signal-to-noise ratio presented to the end user without taking things out, but balancing them differently. We see a very significant improvement to the Speech Intelligibility Index as it is called, meaning how can I actually understand and make sense of things? We see a very strong response to when the brain can actually see or hear the signal and make sense of it. That is something you can measure. We see a very significant improvement, which is also confirmed in our trials for Oticon Intent, which I think everybody will admit is already a very strong hearing aid and platform.

Speaker #2: We see a very strong response when the brain can actually send, you know, see or hear the signal and make sense of it.

Speaker #2: That's something you can measure. And we see a very significant improvement, which is also confirmed in our trials of Oticon Intent, which I think everybody will admit is already a very strong hearing aid and platform.

Speaker #2: So, very strong comfort in UltiCon Reveal, going to bring excitement to the market and significant benefit for end users. Whether it's your first hearing aid or whether it's an upgrade from an already well-functioning premium product of latest technology, then you will see a significant benefit improvement.

Søren Nielsen: Very strong comfort in Oticon Reveal, going to bring excitement to the market and significant benefit for end users, whether it is your first hearing aid or whether it is an upgrade from an already well-functioning premium product of latest technology, then you will see a significant benefit improvement. In Hearing Care, Q2, very strong performance with significant contribution from KIND. In local currencies, impressive 31% growth, of which 23% come from the acquisitions, mainly KIND, but also a larger acquisition in UK made in March. Strong 8% organic growth in the quarter, supported a little bit by the comps from last year, but also sequentially expressing an uplift to the momentum in the business and a strong execution broadly across geographies. KIND in itself delivered a strong performance, and we also explicitly comment on that.

Speaker #2: In Hearing Care, second quarter, very strong performance with significant contribution from KINT in local currencies—impressive 31% growth, of which 23% comes from the acquisition made, mainly KINT, but also a larger acquisition in the UK made in March.

Speaker #2: Strong 8% organic growth in the quarter. Supported a little bit by the comps from last year, but also sequentially expressing a uplift to the momentum in the business and strong execution broadly across geographies.

Speaker #2: KINT itself delivered strong performance, and we also explicitly comment on that. That's very good for, of course, scale and profit, and also good to see after, you know, the uncertainty related to the immediate takeover.

Søren Nielsen: That is super good for, of course, scale and profit, and also good to see after uncertainty related to the immediate takeover is gone. We are very comfortable about the further benefit of having the KIND business in our group. Looking at geography, strong performance across the region, particularly in Germany, but also several other markets. A little less growth in France, but that is due to the way the distribution system continued to expand in France, where a number of new players get into the field. Strong or good organic growth in North America. It was strong and driven by both US and Canada. In US, growth was supported by slightly easier comparison figures than we had in Q1. We all remember last year, all the uncertainty that came from, let us say, political uncertainty.

Speaker #2: It's gone. So we're very comfortable about the further benefit of having the KINT business in our group. Looking at geography, we saw strong performance across the region, particularly in Germany, but also in several other markets.

Speaker #2: A little less growth in France, but that's due to the way the distribution system works. It continued to expand in France, where a number of new players are getting into the field.

Speaker #2: Strong or good organic growth in North America was driven it was strong and driven by both US and Canada. In US, growth was supported by slightly easier comparison figures than we had in Q1.

Speaker #2: We all remember last year and the uncertainty that came from, let's say, political uncertainty. In Australia, we saw strong organic growth, and we saw negative growth in China, driven by tough market conditions, but also tough comparison figures.

Søren Nielsen: In Australia, strong organic growth, and we saw negative growth in China driven by tough market conditions, but also tough comparison figures. There was some release of reimbursement last year that is no longer there, which has definitely lowered both product mix and also demand. Diagnostics in Q2, very strong performance. We are very happy to see return to solid growth rates now in the quarter, 9%. Again, last year uncertainty in Q2, super high, and we saw a lot of holding back on the execution of orders. Of course, partly also due to that, but we also there definitely feel improved momentum and that we gain share, and growth was coming both from instrument sales as well as service and consumable business. Growth was broad-based, but particularly strong in UK, but also US, Canada, et cetera. All in all, very good. Over to you, Gane, for group financials.

Speaker #2: There was some release of reimbursement last year that's no longer there, which has definitely lowered both product mix and also demand. Diagnostic in the second quarter showed very strong performance—very, very happy to see.

Speaker #2: Return to solid growth rates now in the quarter, 9%. Again, last year uncertainty in Q2, super high, and we saw a lot of holding back on the execution of orders.

Speaker #2: So, of course, partly also due to that, but we also there definitely feel a improved momentum and that we gain share. And growth was coming both from instrument sales as well as service and consumable business.

Speaker #2: Growth was, yeah, broad-based, but particularly strong in the UK, but also in the US, Canada, et cetera. So all in all, very good. Over to you, Rene, for group financials.

Speaker #3: Thank you, Søren. And we move on to revenue in the first half, which is a bit of repetition. We saw broad-based organic growth of 7% in the first half and acquisitive growth of 10%, entirely related to acquisitions in Hearing Care.

René Schneider: Thank you, Søren, and we move on to revenue in H1, which is a bit of repetition. We saw a broad-based organic growth of 7% in H1. Acquisitive growth of 10% entirely related to acquisitions in Hearing Care, of course, predominantly KIND, but also a larger retail in the UK, as well as some minor acquisitions. We saw a negative effect from FX of 3% driven by US dollar. All in all, 15% growth in reported revenue. A highlight from H1 is the development in the gross profit.

Speaker #3: Of course, predominantly KINT, but also a larger retail in the UK as well as some minor acquisitions. And we saw a negative effect from FX of 3%, driven by a US dollar.

Speaker #3: So, all in all, 15% growth in reported revenue. A highlight from the first half is the development in the gross profit. It increased by 17%, just shy of DKK 10 billion, with a margin expansion of 1.1 percentage points versus last year, which was above our expectation.

René Schneider: It increased by 17% to just shy of DKK 10 billion, with a margin expansion of 1.1 percentage point versus last year, which was above our expectation, and the primary drivers of that was a very healthy, solid development in ASP in hearing aids due to strong geography, channel, and product mix, but also and equally supported by strong contribution from the acquisition of KIND and its performance in Hearing Care. That brings us to operating expenses and EBIT. We saw 5% organic growth in H1, which was on the one hand partly supported by the cost-saving initiatives, but also included negative one-offs related to the restructuring of retail in the UK that I will come back to. In acquisitions, predominantly again, KIND added 14% to OPEX growth and exchange rate had a negative effect of 2%.

Speaker #3: And the primary drivers of that was a very healthy solid development in ASP due to in hearing aids, due to strong geography channel and product mix.

Speaker #3: But also an equally supported by strong contribution from the acquisition of KINT and its performance in hearing care. That brings us to operating expenses and EBIT.

Speaker #3: We saw 5% organic growth in the first half year, which was on the one hand partly supported by the cost-saving initiatives but also included a one-offs related to negative one-offs related to the restructuring of retail in the UK that I will come back to.

Speaker #3: In acquisitions, predominantly again KINT, added 14% to OPEX growth and exchange rate had a negative effect of 2%. Looking at EBIT, before special items, it was 2.134 billion, corresponding to a margin of 16.5 or 19% growth in local currencies.

René Schneider: Looking at EBIT before special items, it was DKK 2.134 billion, corresponding to a margin of 16.5% or 19% growth in local currencies. Included in that result and in that margin, we have absorbed a number of negative effects. One of them being an estimated DKK -50 million negative effect from exchange rates, but also an additional DKK 30 million from the acquisition we did of a larger retail chain in the UK and the following restructuring that was executed in the H1 as part of our operating profit. If we exclude that, the underlying EBIT margin expansion would have been a 0.6 percentage point compared to last year. That reflecting a strong underlying operating leverage. Our special items in the H1 was DKK 216 million, predominantly related to KIND.

Speaker #3: Included in that result and in that margin, we have absorbed a number of negative effects, one of them being an estimated DKK 50 million negative effect from exchange rates, but also an additional DKK 30 million from the acquisition we did of a larger retail chain in the UK and the following restructuring that was executed in the first half year as part of our operating profit.

Speaker #3: If we exclude that, the underlying EBIT margin expansion would have been a 0.6 percentage point compared to last year. That reflecting a strong underlying operating leverage.

Speaker #3: Our special items in the first half was 216 million, predominantly related to KINT. The strong result in the first half year also means that, when we talked about outlook for the year previously, we highlighted a backend-loaded EBIT profile for the year. With this result, we now see a more normal phasing of EBIT between the two half years.

René Schneider: The strong result in the H1 also means that when we talked about outlook for the year previously, we highlighted a back-end loaded EBIT profile for the year. With this result, we now see a more normal facing of EBIT between the two half years. Cash flow was strong, both on cash flow from operations, but also free cash flow. I would highlight the net cash inflow from acquisitions and divestments. So whilst we have done acquisitions, the divestments we have also done in the same period actually results in a net cash inflow of DKK 91 million. As you are likely aware, we have not done any share buybacks during the H1 as we have had focus on reducing debt and leverage, which brings us to the balance sheet development and also a net interest-bearing debt.

Speaker #3: Cash flow was strong, both in terms of cash flow from operations and free cash flow. I would also highlight the net cash inflow from acquisitions and divestments.

Speaker #3: So, whilst we have done acquisitions, the divestments we have also done in the same period actually result in a net cash inflow of 91 million.

Speaker #3: And as you are likely aware, we have not done any share buybacks during the first half as we have had focus on reducing debt and leverage.

Speaker #3: Which brings us to the balance sheet development and also net interest-bearing debt. On the graph on the right-hand side, you see the spike in leverage after the acquisition of KINT, but you also see the strong deleveraging we have done since—being actually ahead of plan on the deleveraging due to both strong cash generation as well as profit growth.

René Schneider: On the graph on the right-hand side, you see the spike in leverage after the acquisition of KIND, but you also see the strong deleveraging we have done since being actually ahead of plan on the deleveraging due to both strong cash generation as well as profit growth. So now we are at 3.0, and our updated view on gearing is that we, by end of 2026, expect to be slightly above the 2 to 2.5 range, which is our long-term guidance. With that, let's move on to outlook. Brief comment on the market. We, I would say, almost as normal, but we do base the market understanding on a competitive environment, where we know competitors or expect competitors to launch new product in H2. That is built into our assumptions.

Speaker #3: So now we are 3.0 and our updated view on gearing is that we buy end of 2026, expect to be slightly above the 2 to 2.5 range which is our long-term guidance.

Speaker #3: With that, let's move on to Outlook. Brief comments on the market. So, I would say almost as normal, but we do base the market understanding on a competitive environment where we know competitors, or expect competitors, to launch new products in H2.

Speaker #3: That is built into our assumptions. And we update based on the hearing aid market performance in H1. We update our full-year assumptions to be 3 to 4%.

René Schneider: We update based on the hearing aid market performance in H1, we update our full year assumptions to be 3% to 4%. This continues to be a conservative assumption below our medium to long-term fundamental assumption around the market. Our things to highlight, special items. We have adjusted special items to now total DKK 400 million, previously DKK 325 million. We have pushed hard on both the KIND integration and the cost savings initiatives, and as a result of that, we also see higher special items. The KIND integration special items is now estimated at DKK 150 million, previously DKK 125 million, as well as cost saving initiatives, now DKK 250 million, previously DKK 200 million. Primarily all related to severance payments and implementation costs. The other highlights on the outlook side is a less negative effect on FX, as you have seen in the announcement, but also higher profit contribution from both CEI and KIND.

Speaker #3: This continues to be a conservative assumption below our medium to long-term fundamental assumption around the market. Of things to highlight, special items we have adjusted special items to now total 400 million.

Speaker #3: Previously, 325. We have pushed hard on both the KINT integration and the cost-savings initiatives, and as a result of that, we also see higher special items. KINT integration special items are now estimated at 150.

Speaker #3: Previously 125. As well as cost-saving initiatives now 250 million. Previously 200 million. Primarily all related to severance payments and implementation costs. The other highlight on the Outlook side is less negative effect on FX as you have seen in the announcement.

Speaker #3: But also higher profit contribution from both CEI and KINT. The cost-effectiveness program is now estimated to contribute $300 million, compared to $250 million in the original outlook.

René Schneider: The cost effectiveness program now is estimated to contribute DKK 300 million compared to DKK 250 million in the original outlook and the better performance in KIND. With that, we expect a contribution to EBIT of DKK 325 million, previously DKK 300 million. Lastly, but more minor, we expect to get a refund of tariffs in H2 of DKK 25 million. With that, summing up our outlook now being 6% to 7% organic growth and an EBIT before special items in the range of DKK 4.4 billion to DKK 4.8 billion. With that, we are ready to go to Q&A.

Speaker #3: And the better performance in KINT—with that, we expect a contribution to EBIT of DKK 325 million, previously DKK 300 million. Lastly, but more minor, we expect to get a refund of tariffs in H2 of DKK 25 million.

Speaker #3: With that, summing up our outlook now being 6 to 7% organic growth and an EBIT before special items in the range of DKK 4.4 to 4.8 billion.

Speaker #3: So, with that, we are ready to go to Q&A.

Speaker #1: Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad.

Operator: Thank you. We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. Please limit yourself to two questions at a time to allow others to ask. At this time, we will pause momentarily to assemble our roster. The first question comes from Martin Parkhøi with SEB. Please go ahead.

Speaker #1: If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then two.

Speaker #1: Please limit yourself to two questions at a time to allow others to ask. At this time, we will pause momentarily to assemble our roster.

Speaker #1: The first question comes from Martin Parkoy with SEV. Please go ahead.

Speaker #2: Yes. Good afternoon, Martin Parkoy at SEV. Two questions. Firstly, with respect to hearing care, with the 8% organic growth in the second quarter, where our understanding there is there is a good very good contribution from ASP lift in hearing care of course supported by the high price point of seal.

Martin Parkhøi: Yes, good afternoon, Martin Parkhøi at SEB. Two questions. Firstly, with respect to Hearing Care with the 8% organic growth in Q2, where I understand it, there is a very good contribution from ASP lift in Hearing Care, of course, supported by the high price point of Zeal. How should we look at the ASP contribution for the remainder of the year in Hearing Care? Of course, Zeal will still benefit year-over-year, but can there be some impact from lower price points of Zeal also become available? Then second question, also on pricing, but more on a wholesale level. Firstly, can you talk about, you have a quite good success with the premium pricing of Zeal. What is your plans for Reveal versus Intent on each tier level?

Speaker #2: How should we look at the ASP contribution for the remainder of the year in Hearing Care? Of course, Seal will still benefit year-over-year, but can there be some impact from lower price points if lower price points of Seal also become available?

Speaker #2: And then second question also on pricing, but more on a wholesale level. Firstly, can you talk about you have a quite good success with the premium pricing of seal?

Speaker #2: What is your plans for reveal versus intent on each tier level? And how do you actually see the pricing risk of in an industry perspective in the second half in light of the quite crowded launch period we have from the industry?

Martin Parkhøi: How do you actually see the pricing risk in an industry perspective in H2 in light of the quite crowded launch period we have from the industry? There is maybe some players which are more desperate than others to drive growth with these new products.

Speaker #2: And there is maybe some players which are more desperate than others to drive growth with this new products.

Speaker #3: Yeah. Thank you, Martin, for that. It's true that there is a significant ASP element in the growth in hearing care. It's both a mix geography, mix issue, but it is a product mix issue by most.

René Schneider: Thank you, Martin, for that. It is true that there is a significant ASP element in the growth in Hearing Care. It is both a geography mix issue, but it is a product mix issue by most. Yes, Oticon Zeal has been also a significant success in own retail, but it is of course also in general what we work on to help more people get a better solution. That is a little bit different market for market, depending on reimbursement and so on. Into H2, yes, I think we should be able to maintain, and we always see also in own retail that when we bring new exciting technology out in a premium launch, then the upgrade part of the business has a tendency to increase.

Søren Nielsen: Thank you, Martin, for that. It is true that there is a significant ASP element in the growth in Hearing Care. It is both a geography mix issue, but it is a product mix issue by most. Yes, Oticon Zeal has been also a significant success in own retail, but it is of course also in general what we work on to help more people get a better solution. That is a little bit different market for market, depending on reimbursement and so on. Into H2, yes, I think we should be able to maintain, and we always see also in own retail that when we bring new exciting technology out in a premium launch, then the upgrade part of the business has a tendency to increase.

Speaker #3: So yes, all conceal has been also a significant success in all retail. But it's of course also in general what we work on to help more people get a better solution.

Speaker #3: And that's a little bit different market for market depending on reimbursement and so on. So into second half, yes, I think we should be able to maintain and we always see also an own retail then when we bring new exciting technology out in a premium launch then the upgrade this part of the business has a tendency to increase.

Speaker #3: And that's definitely going to be a focus with reveal where you could say all conceal is more a first-time user focus. So the two will go hand in hand.

Søren Nielsen: That is definitely going to be a focus with Reveal, where you could say Oticon Zeal is more a first-time user focus. The two will go hand in hand, and I think will both be able to sort of be elements in supporting a continued good ASP development also in own retail. On the hearing aid wholesale side, I think I would say the more that introduce premium, the more you tend to see, for the same reason with the upgrades, a positive product mix development in the industry. If there is then more or less discount on the new ones, well, it still ends up, I believe, net-net leading to a better product mix that outbalance even if that effect is there. At least as a beginning, I think everybody will try to get return on the investment.

Speaker #3: And I think we both be able to saw be elements in supporting a continued good ASP development also in wholesale side, I think I would say the more that introduced premium the more you tend to see a positive for the same reason with the upgrades a positive product mix development in the industry.

Speaker #3: If there's then more or less discount on the new ones, well, it's still ends up I believe net leading to a better product mix that outbalance even if that effect is there.

Speaker #3: But at least as a beginning, I think everybody will try to get return on their Auntie investment. So I would say normally even if we see a lot, it's good for the ASP in that period.

Søren Nielsen: I would say normally, even if we see a lot, it is good for the ASP in that period. Our own assumption is definitely that we will be able to see a, not as big as with Zeal, because the product was very unique and without competition, you could say, almost. But that Reveal also will enable a net price increase over Oticon Intent.

Speaker #3: Our own assumption is definitely that we will be able to see a—not as big as with Seal—because the product was very unique and without competition, you could say almost.

Speaker #3: But that reveal also will enable a net price increase over the content. Thank you.

[Analyst]: Thank you.

Martin Parkhøi: Thank you.

Speaker #1: Thank you. The next question comes from Veronica Tobiova with City. Please go ahead.

Operator: Thank you. The next question comes from Veronika Dubajova with Citi. Please go ahead.

Veronika Dubajova: Hi, guys. Good afternoon, and thank you for taking my questions. I have two, please. The first one is just, sorry, I was hoping you could give us a little bit of a flavor for the run rate for Zeal, and how you are thinking about further opportunities for growth from here, either in terms of lower price points or geographies, and just how much more room you feel there is for Zeal to continue to drive meaningful contribution to growth, as seems to have been the case in Q1 and Q2 of the year. My second question is really your thought process on Reveal and how it might position. Obviously, I know we are still waiting for two more product launches.

Speaker #4: Hi guys. Good afternoon. Thank you for taking my questions. I have two please. The first one is just sorry and I was hoping you could give us a little bit of a flavor for the run rate for zero.

Speaker #4: And sort of how you're thinking about further opportunities for growth from here, either in terms of lower price points or geographies, and just how much more room there you feel there is for Seal to continue to drive kind of meaningful contribution to growth.

Speaker #4: That seems to have been the case in the first and the second quarter of the year. And then my second kind of question is really your thought process on reveal and how it might position obviously I know we are still waiting for two more product launches.

Speaker #4: But it'd be really helpful to understand from an AI perspective from a size and battery and power perspective what do you think seal brings to the table that you don't see in the market right now or you don't anticipating for from folks as you look at the launch window.

Veronika Dubajova: It would be really helpful to understand from an AI perspective, from a size and battery and power perspective, what do you think Zeal brings to the table that you do not see in the market right now or you do not anticipating from folks as you look at the launch window? Thanks so much.

Speaker #4: Thanks so much.

Speaker #3: Thank you very much, Veronica. I would definitely say from a growth perspective of course we are comparing still to zero when it comes to seal.

Søren Nielsen: Thank you very much, Veronika. I would definitely say, from a growth perspective, of course, we are comparing still to Zero when it comes to Zeal. So there is, of course, still significant growth coming from Zeal. But also on a sequential basis, I definitely see further opportunities. You mentioned the example with more price points also to address other segments of the market. I would say that might be more of a European opportunity. In North America, there are still channels that do not offer that type of technology could come in. There are definitely still in VA, I would highlight significant opportunities. We see a very good, I think several of you asked if Zeal was a niche product for a niche. We have now seen clearly both expansion of the number of people that end up having an in-ear rechargeable product.

Speaker #3: So there is of course still significant growth coming from seal. But also on a sequential basis I definitely see further opportunities. You mentioned the example with more price points also to address other segments of the market.

Speaker #3: I would say that might be more of a European opportunity. In North America there are still channels that don't offer that type of technology could come in.

Speaker #3: There are definitely still, in VA, I would highlight significant opportunities we see. Very good. I think several of you asked if Seal was a niche product for a niche.

Speaker #3: We have now seen clearly both expansion of the number of people that end up having an in-ear rechargeable product, and we have also seen Oticon Intent in that growing segment take very significant share very fast, and that has not come to an end.

Søren Nielsen: We have also seen Oticon Zeal in that growing segment to take very significant share very fast and has not come to an end. We also see it being the door opener to clinics we have not worked with because this is obviously to everybody, a significantly different product, and it offers an opportunity to both have fantastic outcomes and also the opportunity for a, you can say, instant fit because you can use it with a dome, which means you skip a number of revisits for impression taking and custom shell making, et cetera. So far, after 3 months into VA, super positive outcome, and we have definitely believe in continued growth in that channel as an example, but also outside for Oticon Zeal. Reveal position, I would say it's second to none.

Speaker #3: We also see it being the door opener to clinics. We have not worked with because this is obviously to everybody a significantly different product and it offers an opportunity to both have fantastic outcomes and also the opportunity for a you can say instant fit because you can use it with a dome which means you skip a number of revisits for impression taking and custom shell making etc.

Speaker #3: So far, after three months into VA, we have seen a super positive outcome, and we definitely believe in continued growth in that channel as an example, but also outside for all the conceal.

Speaker #3: And reveal position I would say it's second to none. There is nobody else that managed to combine AI opportunities for both noise and speech being available all the time any given time in an ordinary mini ride form factor rechargeable full connectivity and everything.

Søren Nielsen: There is nobody else that managed to combine AI opportunities for both noise and speech being available all the time, any given time, in an ordinary miniRIE form factor, rechargeable, full connectivity and everything. For now, for what we can see, and yes, I don't have transparency either to new launches, and that might change it, but with the current competitive situation, what we know and have seen being presented to the market, I think Oticon Reveal is second to none.

Speaker #3: So for now for what we can see and yes I don't have transparency either to new launches and that might change it but with the current competitive situation what we know and have seen being presented to the market I think Oticon reveal is second to none.

Speaker #4: That's super helpful. Thanks. I'll jump back into the queue.

Veronika Dubajova: That's super helpful. Thanks. I'll jump back into the queue.

Speaker #1: Thank you. The next question comes from Martin Brenner with Nordea. Please go ahead.

Operator: Thank you. The next question comes from Martin Brenøe with Nordea. Please go ahead.

Speaker #5: Hi Simon and René. Thank you for taking my questions. I'll also start out with two questions. The first one would also be on SEAL.

Martin Brenøe: Hi, Søren and René. Thank you for taking my questions. I will also start out with two questions. The first one would also be on Zeal as a beginning. Now you mentioned the new price points a couple of times on this call, and I am just a bit curious whether you think you have benefited from having more or less the only new product launch here in H1, making it maybe a bit more tough to stand out here heading into H2 with the other launches coming. Can you maybe just put a few words on the toolbox that you have in terms of building on the momentum you have with Zeal? Is that the new price points that we are going to see, or is it more that you are going to do a second wave marketing stunt on Zeal?

Speaker #5: At the beginning now, you mentioned new price points a couple of times on this call, and I'm just a bit curious whether you think you have benefited from having more or less the only new product launch here in H1, making it maybe a bit more tough to stand out here, and heading into H2 with other launches coming.

Speaker #5: So can you maybe just put a few words on the toolbox that you have in terms of building on the momentum you have with seal.

Speaker #5: Is that the new price points that we're going to see or is it more that you're going to do a second wave marketing stunt on seal or what opportunities that you actually have to build on this momentum as we're seeing the space get more crowded.

Martin Brenøe: Or what opportunity set do you actually have to build on this momentum as we are seeing the space get more crowded? That is the first question. The second question would be on the margin side. When we adjust for the significant cost initiatives that you will reap the benefits of here in H2, the underlying EBIT margin does not really imply any margin expansion, despite the significant growth that you should be seeing and also guiding for here. Should we see this as a prudent assumption through your guide, or are you actually investing back in the OPEX, given the run rate you are seeing to be ready for 2027? That is my second question. Thank you.

Speaker #5: That's the first question. And the second question would be on the margin side. When we adjust for the significant custom initiatives that you will reap the benefits of here in H2.

Speaker #5: The underlying EBIT margin doesn't really imply any margin expansion despite the significant growth that you should be seeing and also guiding for here. So should we see this as a prudent assumption to your guide or are you actually investing back in the OPEX given the run rate you're seeing to be ready for 2027.

Speaker #5: That's my second question. Thank you.

Speaker #3: Yeah. Thank you very much, Martin. I think I mentioned new price points once but for me highlight a number of European markets. You simply have a limited premium segment and we have penetrated very strongly there.

Søren Nielsen: Yeah, thank you very much, Martin. I think I mentioned the new price points once, but if I may highlight a number of European markets, you simply have a limited premium segment, and we have penetrated very strongly there. We have even expanded it. We can see that in our own retail, that there are more people that are willing to pay. But still, it is a minor category, and if Zeal, which is our ambition, really has to grow to be a new way of producing and manufacturing in-ear instruments, we also want more volume into the technology and business. Therefore, a discussion in selected market of more price points is relevant. But the biggest benefit of Zeal is that it helps opening new doors.

Speaker #3: We have even expanded it. We can see that in our own retail that there are more people that are willing to pay but still it is a minor category.

Speaker #3: And if seal which is our ambition really have to grow to be a new way of producing and manufacturing in here instruments we also want more volume into the technology and business and therefore a discussion in selected market of more price points is relevant.

Speaker #3: But the biggest benefit of seal is that it helps opening new doors. So it will still be a significant part of our sales efforts and salespeople's job to use both Oticon reveal but equally important seal to get in dialogue with customers that today have Oticon as a third or fourth or not even supplier.

Søren Nielsen: It will still be a significant part of our sales efforts, and salespeople's job to use both Oticon Reveal, but equally important, Zeal, to get in dialogue with customers that today have Oticon as a third or fourth or not even supplier. To our existing customers, people that have had some business with Oticon, this is now, I think to a large extent, known stuff. There are always training you can do, more and so on. We will do a little more on the consumer side, on the media spend to also help make sure that we continue to see end users being aware of the concept and come into stores to ask for it. This is not big volumes, but it is meaningful. There are many levers for that. To you, Martin, I will start and then you can supplement.

Speaker #3: To our existing customers—people that have had some business with Oticon—this is now, I think, to a large extent known stuff. There are also always trainings you can do more on.

Speaker #3: We will do a little more on the consumer side on the media spend to also help make sure that we continue to see end users being aware of the concept and come into stores to ask for it.

Speaker #3: This is not big volumes but it is meaningful. So there are many levers for that and to your margin I will start and you can supplement.

Speaker #3: But the cost saving initiatives is to improve margin on demand and it's working well towards that. We have of course always also said we will continue to invest in the business.

Søren Nielsen: But the cost-saving initiatives is to improve margin on Demant, and it is working well towards that. We have, of course, always also said we will continue to invest in the business. We believe it is a growth business. But it is clearly the ambition, and again, underlying also on H1, there is a meaningful improvement of the EBIT margin as René just took you through. I think there is good visibility to a further improvement in H2 for a number of reasons. But maybe, René, you want to add a few words?

Speaker #3: We believe it's a growth business but it is clearly the ambition and again underlying also on first half there is a meaningful improvement of the EBIT margin as Rene just took you through and I think there is good visibility to a further improvement in the second half.

Speaker #3: For a number of reasons. But maybe Rene you want to add a few words.

Speaker #2: Yeah. Not much to supplement. I mean we do you can do the math in many ways and we have a range in our outlook which provide for many scenarios.

René Schneider: Yeah, not much to supplement. You can do the math in many ways, and we have a range in our outlook which provide for many scenarios, I would say. Our working hypothesis and definitely what we work strongly towards is a margin expansion, both sequentially and relative to last year, reported and underlying in any way you can imagine, and that is what we plan for. Obviously, we have an outlook that we are very confident in.

Speaker #2: I would say our working hypothesis and definitely what we work strongly towards is a margin expansion both sequentially and relative to last year. Reported and underlying in any way you can imagine and that's what we that's what we plan for.

Speaker #2: We are say we have an outlook that we are very confident in.

Speaker #5: Okay. Thank you very much.

Martin Brenøe: Okay. Thank you very much.

Speaker #1: Thank you. Next question from JPMorgan. Please go ahead.

Operator: Thank you. The next question comes from David Adlington with JP Morgan. Please go ahead.

Speaker #5: Guys. Thanks for taking the questions. Maybe first up just maybe a bit more conceptual one. You've narrowed your range of the top line from three points and three to six down to six to seven.

David Adlington: Thanks for taking the questions. Maybe first up, just maybe a bit more conceptual one. You have narrowed your range at the top line from 3 points from 3% to 6%, now to 6% to 7%. Still quite a wide margin range of DKK 400 million, the same as the start of the year. I just wondered why you had not narrowed the EBIT range, on what the deltas are between the bottom and top end of that range in quite narrow revenue assumptions. Thanks.

Speaker #5: Still quite a wide margin range at 400 million, the same as the start of the year. I just wondered why you hadn't narrowed the EBIT range, and what the deltas are between the bottom and the top end of that range, given quite narrow revenue assumptions.

Speaker #5: Thanks.

Speaker #3: Yeah, so generally speaking, we see a relatively high translation from revenue changes down to EBIT when markets or particular geographies are doing extremely well or extremely poorly.

René Schneider: Yeah. Generally speaking, we see a relatively high translation from revenue changes down to EBIT when markets or particular geographies are doing extremely well or extremely poor. We have seen that in the past. So it is a reflection that 6% to 7% is, in reality, 5.5% to 7.5%, and the translation to EBIT, we see similarly correspond to a DKK 400 million kroner range. The big swing factors, of course, are, as I mentioned, market, and then, relatively speaking, our own expected over-performance to that market. So I think it is in line with how we have done things in the past.

Speaker #3: We have seen that in the past, so it is a reflection that six to seven is, in reality, five and a half to seven and a half, and the translation to EBIT we see similarly corresponds to a 400 million kroner range.

Speaker #3: So the big swing factors of course are as I mentioned market and then relatively speaking our own expected overperformance to that market. So I think it's in line with how we have done things in the past.

Speaker #5: And just one quick follow-up. Was there any pre-investment in the new launch in the first half?

David Adlington: Then just one quick follow-up. Was there any pre-investment in the new launch in the H1? Sorry.

Speaker #3: Not in particular.

René Schneider: Not in particular.

Søren Nielsen: Not in particular.

Speaker #5: We expect it in the second half.

David Adlington: Are we expecting in H2?

Speaker #3: Of course. But nothing out of the ordinary of course if you compare to last year that's also part of the maybe slightly higher OPEX for this year then you would imagine when you see cost initiatives and so on it is an intensive launch year on the hearing aid wholesale side to do two big launches and a lot of news of course that we also invest in that to make sure we get harvest the benefit.

Søren Nielsen: Of course. But nothing out of the ordinary. Of course, if you compare to last year, that is also a part of the maybe slightly higher OPEX for this year than you would imagine when you see cost initiatives and so on. It is an intensive launch year on the hearing aid wholesale side to do two big launches and a lot of news. Of course, we also invest in that to make sure we get half of the benefits.

Speaker #2: So I would say just to give some line on the one hand as Søren ren mentioned we are resources behind high-end launch and also you can say marketing efforts in hearing care to support the growth and the gross profit drive.

René Schneider: I would say, just to give some direction around the OpEx line. On the one hand, as Søren mentioned, we are putting significant resources behind a high-end launch and also, you can say, marketing efforts in Hearing Care to support the growth and the gross profit drive. But on the other hand, we are also executing on the cost effectiveness. So on balance, you would expect organic growth rate in OpEx maybe similar to what you saw in H1.

Speaker #2: But on the other hand, we are also executing on cost effectiveness. So, on balance, you would expect the organic growth rate in OPEX to be similar to what you saw in the first half of the year.

Søren Nielsen: Okay. Thank you.

David Adlington: Okay. Thank you.

Speaker #5: Well thank you.

Speaker #1: Thank you. The next question comes from Nils Grantham Leith with DNB Carnegie. Please go ahead.

Operator: Thank you. The next question comes from Niels Granholm-Leth with DNB Carnegie. Please go ahead.

Speaker #2: Thank you. A couple of market related questions. So in your view what's needed to normalize the growth on the US commercial market and secondly why do you think that we have seen a stronger pricing discipline in this first half which have contained many kind of end of life products on the market but still price the pricing discipline seems to have been pretty good.

Niels Granholm-Leth: Thank you. A couple of market-related questions. In your view, what is needed to normalize the growth on the US commercial market? Secondly, why do you think that we have seen a stronger pricing discipline in this H1, which have contained many kind of end-of-life products on the market, but still the pricing discipline seems to have been pretty good.

Speaker #3: Yeah. Thank you Nils. Yeah. I can't tell when we expect it to normalize but I think it's worth highlighting that underneath the flat growth flattish growth in US commercial we do still see the managed care segment declining and we do see cash pay private independence have some growth and then we see the strongest growth being in what we would call big box retail and large operators.

Søren Nielsen: Yeah. Thank you, Niels. I cannot tell when we expect it to normalize, but I think it is worth highlighting that underneath the flattish growth in US commercial, we do still see the managed care segment declining, and we do see cash pay private independents have some growth. Then we see the strongest growth being in what we would call big box retail and large operators, including ourselves. I think it will have to come with a new stand on managed care and it finding its new balance, and then we would see the total market return to growth. There continue to be some dropout, people that are not eligible, whatever it is, that drive it leaking to the other channels. But at some stage, I would assume there is a rebalancing. But when that happens is very difficult to estimate, of course.

Speaker #3: Including ourself. And I think it would have to come with a new stand on managed care and the findings is new balance and then we would see the total market return to growth.

Speaker #3: The continue to be some drop out people that are not eligible whatever it is that drive it leakings to the other channels but at some stage I would assume there is a rebalancing but when that's happen is very difficult to estimate of course.

Speaker #3: There's no doubt we still see the expected growth in senior population prevalence of hearing loss etc. I don't think we have any other indication that this still relates to consumer confidence in general fear of inflation or inflation for many and some managed care contracts not offering benefit to the same number of clients as they did in the past.

Søren Nielsen: There is no doubt we still see the expected growth in senior population, prevalence of hearing loss, et cetera. I do not think we have any other indication that this still relates to consumer confidence in general, fear of inflation or inflation for many, and some managed care contracts not offering benefit to the same number of clients as they did in the past. The second one, pricing discipline. Well, I can turn it around and say at least two or three of the players have presented significant innovation where there also is a cost component to it. Therefore, I think the discipline have actually, maybe this time, started with realizing that to get return and also it would defend the continued growing cost of goods sold driven by technology, whether it is the production methodology or additional electronics or whatever it is.

Speaker #3: The second one, pricing discipline—well, I can turn it around and say at least two or three of the players have presented significant innovation, where there also is a cost component to it.

Speaker #3: And therefore I think the discipline have actually maybe this time started with realizing that to get return and also it would defend the continued growing cost of goods sold driven by technology whether it's the production methodology or additional electronics or whatever it is then you at some stage have to say that we have to install a stronger pricing discipline and also arguing for the benefit stronger for the end user otherwise we have only done it for our own sake and I think at least I can talk for demand but it seems like a number of competitors have similar trends and therefore have been more firm that margin dilution cannot happen and therefore have been more disciplined around pricing of the premium products I would say in particular.

Søren Nielsen: Then you, at some stage, have to say that we have to install a stronger pricing discipline and also arguing for the benefit stronger for the end user. Otherwise, we have only done it for our own sake. I think, at least I can talk for Demant, but it seems like a number of competitors have similar trends, and therefore have been more firm that margin dilution cannot happen, and therefore have been more disciplined around pricing of the premium products, I would say in particular.

Speaker #2: Thank you.

Niels Granholm-Leth: Thank you.

Speaker #1: Thank you. The next question comes from Richard Fulton with Goldman Sachs. Please go ahead.

Operator: Thank you. The next question comes from Richard Felton with Goldman Sachs. Please go ahead.

Speaker #4: Thanks. Good afternoon. Two please. First one it does seem like that in the year category has been growing well ahead of the overall market.

Richard Felton: Thanks. Good afternoon. Two, please. First one, it does seem like the in-the-ear category has been growing well ahead of the overall market. Could you maybe elaborate a little bit on the dynamics we are seeing between in-the-ear versus share gains from other form factors, or anything that you are potentially seeing in terms of category expansion driven by in-the-ear? Second one, Søren, you mentioned that Zeal was the spearhead for growth, but the rest of the portfolio is doing well in addition to that. Could you maybe elaborate on why that is the case in practice? How is Zeal helping the rest of the portfolio? Thank you.

Speaker #4: Can you maybe elaborate a little bit on the dynamics you're seeing between in the year versus share gains from other form factors or anything that you're potentially seeing in terms of category expansion driven by in the year?

Speaker #4: And then second one Soren you mentioned that Zero was the spearhead for growth but the rest of the portfolio is doing well as in addition to that.

Speaker #4: Can you maybe elaborate on why that is the case? In practice, how is Zero helping the rest of the portfolio? Thank you.

Speaker #3: Thank you very much. Yeah. Yes. We don't in many markets we don't have a lot of statistics for the different styles but in some we have and it's very obvious that the lack of rechargeability in decent sized instruments I would say have been a limitation for many years for why receiver in the year have grown after they became popular for just the cosmetic benefit the receiver in the year was much more discreet than the old molds then the next thing was connectivity the next thing was rechargeability but there are now some concepts in the field that actually you would say overcome that and then seal in particular overcome also the cosmetic element and therefore basically offer almost the same benefits as a behind the year which for some is more visible and I think that's the natural evolution users are when they arrive as first time users very aware what is around they might have seen an instrument like this or that and therefore cosmetics matters a lot whereas existing users might be a little more nuanced and balanced on whether they take one.

Søren Nielsen: Thank you very much. Yes. In many markets, we don't have a lot of statistics for the different styles, but in some we have. It's very obvious that the lack of rechargeability in decent-sized instruments, I would say, have been a limitation for many years for why Receiver-in-the-ear have grown. After they became popular for just the cosmetic benefit, the Receiver-in-the-ear was much more discreet than the old molds. Then the next thing was connectivity. The next thing was rechargeability. But there are now some concepts in the field that actually, you would say, overcome that, and then Zeal in particular overcome also the cosmetic element, and therefore basically offer almost the same benefits as a behind-the-ear, which for some is more visible. I think that's the natural evolution and swing back.

Søren Nielsen: No end users are, when they arrive as first-time users, very aware what is around. They might have seen an instrument like this or that, and therefore cosmetics matters a lot. Whereas existing users might be a little more nuanced and balanced on whether they take one version or the other. Having for many years used a miniRIE, I'm not sure you would go for an in-ear product, but for first-time users, it definitely is, for many, more attractive. Spearhead for growth means that the Zeal is a door opener. It's a new concept. You can see the idea, you see the benefit for first-time users. As I think I've said before, there's simply more calls being booked to customers with whom you have little or no business.

Speaker #3: Version or the other. Have you for many years used a mini ride? I'm not sure you would go for a in-ear product but for first time users definitely is for many more attractive.

Speaker #3: And spearhead for growth means that seal is a door opener. It's a new concept you can see the idea you see the benefit for first time users so as I think I've said before there's simply more calls being booked to customers with whom you have little or no business and based on that call you actually once you're then fitted one you learn the fitting system you see the qualities also the signal processing and there is a chance that you then also manage to open up for broader part of the portfolio to these new customers and that's what I mean when I talk about a spearhead for attention a spearhead for new opportunities.

Søren Nielsen: Based on that call, you actually, once you're then fitted, when you learn the fitting system, you see the quality is also in the signal processing, and there is a chance that you then also manage to open up for a broader part of the portfolio to these new customers. That's what I mean when I talk about a spearhead for attention, a spearhead for new opportunities.

Speaker #1: Thank you. The next question comes from Kavya Deshpande with UBS. Please go ahead.

Operator: Thank you. The next question comes from Kavya Deshpande with UBS. Please go ahead.

Speaker #5: Good afternoon. Thank you for taking my questions. My first was on the cadence of the launches. Obviously this platform cycle has taken a little bit longer than previous ones we've seen.

Kavya Deshpande: Good afternoon. Thank you for taking my questions. My first was on the cadence of the launches. Obviously, this platform cycle has taken a little bit longer than previous ones we have seen. Other than the Dual AI software, would it be possible to highlight any other key improvements this extra time has allowed you to do, particularly around the hardware and the chip versus the Sirius chip on the Intent? My second question was, Zeal was launched on the same chip and retaining many of the same features as Intent. The performance benefits you have delivered on the Reveal, would those have a home on a future Zeal model as well? Would this be possible, and should we expect something like this? Thank you.

Speaker #5: Other than the dual AI software, would it be possible to highlight any other key improvements this extra time has allowed you to do, particularly around the hardware and the chip versus the Sirius chip on the Intent?

Speaker #5: And my second question was Zero was launched on the same as intent. The performance benefits you've delivered on the reveal would those have a home on a future Zero model as well?

Speaker #5: Would this be possible, and should we expect something like this? Thank you.

Speaker #3: Yeah. Thank you very much. Yes. There are two other significant contributions to improvements and innovation we highlight. I said this about the anti-feedback system and one would maybe think that improved feedback prevention is something we solved many years ago because you don't hear the whistling in the hearing aid anymore but in reality the way to see it is if you live measure the gain you can actually present in the system in dynamic environment and we can just see also in our own instruments in the past but also in competitive products that you kind of put a line in for where the gain cannot grow above.

Søren Nielsen: Yeah. Thank you very much. Yes. There are two other significant contributions to improvements and innovation we highlight. I said this about the anti-feedback system, and one would maybe think that improved feedback prevention is something we solved many years ago because you do not hear the whistling in the hearing aid anymore. But in reality, the way to see it is if you live measure the gain you can actually present in the system in dynamic environment. We can just see, also in our own instruments in the past, but also in competitive products, that you put a line in for where the gain cannot grow above. You can see the instruments want to do more but are prevented in doing it. The new feedback system we have both allow for more gain because it can quicker eliminate the loop it creates, and it is much more precise.

Speaker #3: So, you can see the instruments want to do more but are prevented from doing it, and the new feedback system we have both allows for more gain because it can more quickly eliminate the loop it creates, and it's much more precise. So the real available gain is significantly higher, and that's also a key instrument to have these systems work together. So if the AI system screams and calls for something, then it's actually also available, whereas most other systems are much slower and then, when the gain is maybe ready, the need is gone.

Søren Nielsen: The real available gain is significantly higher. That is also a key instrument to have these systems work together. The AI system scream and calls for something, then it is actually also available where most other systems are much slower. Then when the gain is maybe ready, then the need is gone. That is one very significant innovation and improvement. The other is connectivity. It is fundamentally a new connectivity platform we have put in that ensures even stronger, you could say, perceived reliability of the connection. You lose it much more seldom. The quality of what comes through is higher. The distance by which you can be away from your phone without deterioration is much higher. Also a significant improvement. To your last question, yes.

Speaker #3: So that's one very significant innovation and improvement and the other is connectivity. It's fundamentally a new connectivity platform. We have put in that ensures even stronger you could say perceived reliability of the connection.

Speaker #3: You lose it much more seldom. The quality of what comes through is higher. The distance by which you can be away from your phone without deterioration is much higher.

Speaker #3: So also a significant improvement. And to your last question yes following this release in the coming period is of course natural that our the rest of our portfolio gets onto this new platform and that's also stage right now we are very happy with the performance.

Søren Nielsen: Following this release in the coming period, it is of course natural that the rest of our portfolio gets onto this new platform, and that is also the case for old Conceal at some stage. Right now, we are very happy with the performance. It is a new instrument, and the main, again, breakthrough is, of course, what it does, but it is also how it looks. It will not be a significant setback for Conceal that we now have a new miniRIE platform available.

Speaker #3: It's a new instrument and the main again breakthrough is of course what it does but it's also how it looks so it will not be a significant setback for the conceal that we now have a new mini ride platform available.

Speaker #5: Understood. Thank you very much.

Kavya Deshpande: Understood. Thank you very much.

Speaker #1: Thank you. The next question comes from Carsten Lundborg Madsen with Danske Bank. Please go ahead.

Operator: Thank you. The next question comes from Carsten Lønborg Madsen with Danske Bank. Please go ahead.

Speaker #3: Thank you very much. First a question to Renee. This minus 30 million you have on EBIT from integration of the UK reseller is that sort of full EBIT contribution?

Carsten Lønborg Madsen: Thank you very much. First, a question to René. This -30 million DKK you have on the EBIT from integration of the UK retailer, is that the full EBIT contribution? It must surely also have been running at a positive EBIT, or was it only the integration cost? That also spills into the second part of the question, which is how much will it contribute with in terms of EBIT in H2? Then I have another question after this.

Speaker #3: I mean, it must surely also have been running at a positive EBIT, or was it only the integration cost? And that also spills into the second part of the question, which is, how much will it contribute in terms of EBIT in the second part of the year?

Speaker #3: Then I have another question after this.

Speaker #4: Yeah. So the 30 I refer to is the total net contribution to EBIT negative 30 million. So not saying what is sales what is cost of goods sold and OPEX but the net effect on the bottom line is 30 million.

René Schneider: Yeah. The 30 I refer to is the total net contribution to EBIT, -30 million DKK. Not saying what is sales, what is cost of goods sold and OPEX.

René Schneider: Yep.

Carsten Lønborg Madsen: Yep.

René Schneider: But the net effect on the bottom line is DKK 30 million. That's how it's understood. Meaning that, since it was announced in H1, it's behind us, and we expect the business to give a positive contribution to EBIT in H2. If I can supplement, it's a classical scale issue that the lack of profitability in the business we acquire has come from too little scale on the headquarter. Therefore, we get a little bit of collapse of the network, a stronger utilization of the audiologist, but most importantly, one headquarter for a significantly bigger network. That brings it immediately, very fast, to profitability in our business.

Speaker #4: That's how it's understood. Meaning that since it was announced in NH1 it's behind us and we expect the business to give a positive contribution to EBIT in H2.

Speaker #3: If I can supplement, it's a classical scale issue—that the lack of profitability in the businesses we acquire comes from too little scale at the headquarters. Therefore, we get a bit of a collapse of the network, a stronger utilization of the audiologists, but most importantly, one headquarters for a significantly bigger network, and that brings it immediately.

Speaker #3: Very fast to profitability in our business. Okay. Great. Then the second question is that a competitor of yours has today communicated a rather sizable loss of the managed care contract in the US from January 2027.

Carsten Lønborg Madsen: Okay, great. Then the second question is that a competitor of yours has today communicated a rather sizable loss of a managed care contract in the US from January 2027. Short question, I guess is, do you expect this in any way can turn into a tailwind for Oticon in 2027 that this contract will be reallocated?

Speaker #3: This short question, I guess, is: do you expect— in any way, concerning a tailwind for also running in 2027— that this contract will be reallocated?

Søren Nielsen: I think that's speculative at this stage, but you can say it moves from being a manufacturer-controlled contract, which always leads to a certain bias, of course, towards the owner's own brands. Now it's as without, I don't have all the details, but that is my best take, that now it's an independent owner. That, of course, always leads to opportunities for coming with a good offer. Is that our strongest place? No, not currently, but we will always seek opportunities, yes.

Speaker #4: I think that's a speculative at this stage but you can say it moves from being a manufacture controlled contract which always leads to a certain bias of course towards the owners own brands.

Speaker #4: Now, it's as if—without, I don't have all the details, but that is my best take: that now it's an independent owner, and that, of course, always leads to opportunities for coming in with a good offer. And is that our strongest place?

Speaker #4: No, not currently, but we'll always seek opportunities. Yes.

Speaker #3: Thank you.

Carsten Lønborg Madsen: Thank you.

Speaker #1: Thank you. The next question comes from Susanna Ludwig with Bernstein. Please go ahead.

Operator: Thank you. The next question comes from Susannah Ludwig with Bernstein. Please go ahead.

Speaker #5: Good afternoon and thank you for taking my questions. I have a couple on Oticon reveal and in particular around sort of what the hardware and software updates have been.

Susannah Ludwig: Good afternoon, and thank you for taking my questions. I have a couple on Oticon Reveal, and in particular, around what the hardware and software updates have been. First, could you confirm what in the hardware of the device has been upgraded versus Oticon Intent, and in particular, whether there is a new DSP chip? Then in terms of the key innovations that you talked about in terms of the feedback and the gain as well as the connectivity, are those driven by hardware improvements or by software improvements?

Speaker #5: So, I guess first, could you confirm what in the hardware of the device has been upgraded versus Oticon Intent, and in particular whether there's a new DSP chip?

Speaker #5: And then I guess in terms of the key innovations that you talked about in terms of the feedback and the gain as well as the connectivity are those driven by hardware improvements or by software improvements?

Speaker #3: Yeah. Good question. I don't think we sit here and disclose exactly what chip we have in our hearing aids but the system as such is basically reengineered to offer this new performance.

Søren Nielsen: Yeah, good question. I do not think we sit here and disclose exactly what chip we have in our hearing aids. But the system as such is basically re-engineered to offer this new performance. We have, and still have, a highly energy-efficient system, and that is the key to success. It is a new, modern, strong DSP and AI system that allows us to do all these great things without running crazy in power consumption. That is the reason for having one integrated chip. So that, I think is so far we can share that without helping competition too much. There is a significant, of course, change in the algorithms, that is the real innovation. That is how we innovate most of the signal processing today. It is not directly hardware-driven. It is software-driven. It is computer applications or program applications that run.

Speaker #3: We have and still have a highly energy efficient system and that's the key to success. It's a new modern strong DSP and AI system that allows us to do all these great things without running crazy in power consumption.

Speaker #3: That's the reason for having one integrated chip. So that's, I think, as far as we can share that without helping competition too much. There is a significant, of course, change in the algorithms on.

Speaker #3: That's the real innovation. That's what how we innovate most of the signal processing today is not directly hardware driven. It is software driven. It is yeah computer applications or program applications that run in the case of the feedback system that is very much the speed of the processor and the algorithms that does that whereas the connectivity is more hardware related.

Søren Nielsen: In the case of the feedback system, that is very much the speed of the processor and the algorithms that does that, whereas the connectivity is more hardware-related. That is a lot to do with antennas and strength of signals and so on. That is typically more physical, but also there.

Speaker #3: That's, yeah, a lot to do with antennas and strength of signals and so on. That's typically more physical, but also there.

Speaker #5: Okay. And then.

Susannah Ludwig: Okay.

Søren Nielsen: Improved algorithms.

Speaker #3: The algorithms.

Speaker #5: Okay, and just to make sure that I have this right—so in terms of your energy-efficient chip, that is the same chip that was in the intent, but now you've sort of reorganized and improved the software updates?

Susannah Ludwig: Okay. Just to make sure that I have this right. In terms of your energy-efficient chip, that is the same chip that was in the Intent, but now you've sort of reorganized and improved the software updates. Is that right?

Speaker #5: Is that right?

Speaker #3: I don't think I said either yes or no. I don't think we want to sit here and disclose those details.

Søren Nielsen: I don't think I'd say either yes or no. I don't think we want to sit here and disclose those details.

Speaker #5: Okay. Thanks.

Susannah Ludwig: Okay, thanks.

Speaker #1: Thank you. The next question comes from Angela Bozenovich with BNP Paribas. Please go ahead.

Operator: Thank you. The next question comes from Aneta Jaśkowiak with BNP Paribas. Please go ahead.

Aneta Jaśkowiak: Hey, good afternoon, and thank you for taking my question. The first one is maybe on the guidance. Earlier in the year when you presented a guide, you emphasized that it was conservative. Now when you upgrade a guide, you emphasize that the market assumptions are conservative. Can you just explain how you are thinking of the upgraded guide, which indeed does imply significant market share gains on tougher comps and increased competitive pressure? The second question is just on trying to assess your level of excitement on Oticon Reveal versus Oticon Zeal. Can you maybe share some insights on how you are thinking on uptake of this product overall, not only in 2026, but more the medium-term aspect versus Oticon Zeal? Thank you.

Andjela Bozinovic: Hey, good afternoon, and thank you for taking my question. The first one is maybe on the guidance. Earlier in the year when you presented a guide, you emphasized that it was conservative. Now when you upgrade a guide, you emphasize that the market assumptions are conservative. Can you just explain how you are thinking of the upgraded guide, which indeed does imply significant market share gains on tougher comps and increased competitive pressure? The second question is just on trying to assess your level of excitement on Oticon Reveal versus Oticon Zeal. Can you maybe share some insights on how you are thinking on uptake of this product overall, not only in 2026, but more the medium-term aspect versus Oticon Zeal? Thank you.

Speaker #2: Hey. Good afternoon and thank you for taking my question. The first one is maybe on the guidance. So earlier in the year when you presented a guide you emphasized that it was conservative and now when you upgrade a guide you emphasize that the market assumptions are conservative.

Speaker #2: Can you just explain how you're thinking of the upgraded guide which indeed does imply significant market share gains on tougher comps and increased competitive pressure?

Speaker #2: And the second question is just on trying to assess your level of excitement on Oticon reveal versus Oticon Zeal. Can you maybe share some insights on how you're thinking on uptake of this product overall not only in 2026 but more the medium term aspects versus Oticon Zeal?

Speaker #2: Thank you.

Speaker #3: Yeah. Happy to comment. I think first of all Oticon Zeal was launched softly into the second half last year towards the end of the year and selected countries.

Søren Nielsen: Yeah. Happy to comment. I think, first of all, Oticon Zeal was launched softly into the H2 last year towards the end of the year in selected countries. We started US during the year. We started VA up in May. Just the sequential full half year will lead to further market share gains. As I explained before with the example of VA, we definitely believe there is more to pick up for Oticon Zeal in front of us. Reveal, of course, is going to build a renew or support the current momentum. Yes, we believe in market share gains, and yes, we know we are likely to face more competitive launches as well. We do not know what they are. That is also why we mentioned that in our assumptions.

Speaker #3: We started up US during the year. We started VA up in May. So just the sequential full half-year will lead to further market share gains, and as I explained before with the example of VA, we definitely believe there is more to pick up for Oticon Zeal in front of us.

Speaker #3: And reveal of course is going to build a renew or support the current momentum so yes we believe in market share gains and yes we know we are likely to face more competitive launches as well.

Speaker #3: We don't know what they are. That's also why we mentioned that in our assumptions that that's of course built into the guidance that it of course ultimately depends a little bit also on what competition come with but it's in there and it expects the momentum.

Søren Nielsen: That is, of course, built into the guidance that it, of course, ultimately depends a little bit also on what competition come with, but it is in there, and it spreads the momentum. It is also because the group today holds more than half is the Hearing Care business, which has another less sensitivity to competitive launches and therefore a momentum stability in that, and that is a comfort. We still have the same view on the market, and it is still, you could say, considered slightly conservative, but the political uncertainty remains. So H2, 2% to 4%, just like we assumed for H1, then turned out to be 4% and not the 2%. And that is still the biggest, I would say, swing element in the H2, in addition, of course, to getting lighter overall competition will come with, and we so far have only seen limited presentation of that.

Speaker #3: It's also because the group today holds more than half in the hearing care business, which has a lower sensitivity to competitive launches and therefore a more stable momentum, and that's the comfort.

Speaker #3: We still have the same view on the market and it's still you could say considered slightly conservative but the political uncertainty remains so second half two to four percent just like we assumed for first half then turned out to be four and not the two and that's still the biggest I would say swing element in second half in addition of course to getting light overworld competition will come with and we so far have only seen limited presentation of that only one out of three assumed launches.

Søren Nielsen: Only one out of three assumed launches. If I understood your question right, it was a little down the previous one, how will the technology come into the portfolio? Well, there is, of course, a plan for the coming period on how the Oticon Reveal platform will enter other form factors and styles, and also for Oticon Zeal, how that product concept is going to continue to evolve. It was a first version, and we see a long journey for products built this way.

Speaker #3: On the if I understood your question right it was a little down the previous one. How will the technology come into the portfolio? Well there is of course a plan for the coming period on how the Oticon reveal platform will enter other form factors and styles and also for Oticon Zeal how that product concept is going to continue to evolve.

Speaker #3: It was a first version and we see a long journey for products built this way.

Speaker #2: Thank you.

[Analyst]: Thank you.

Andjela Bozinovic: Thank you.

Speaker #1: Thank you. The next question comes from Martin and Rula with Jefferies. Please go ahead.

Operator: Thank you. The next question comes from Martin Rula with Jefferies. Please go ahead.

Speaker #2: Hey. Good afternoon everyone. This is Martin and from Jefferies. I hope that you can hear me okay. I would have two if that's okay for you.

Martin Rula: Hi. Good afternoon, everyone. This is Martin Rula from Jefferies. I hope that you can hear me okay. I would have two, if that's okay for you. The first one would be on the potential contribution you would expect from the new platform. The question really being that it proved that you were conservative on Zeal's potential given the massive organic sales growth acceleration that we've had in the wholesale part of the business. I was wondering if this discrepancy between what you originally had in mind for Zeal and its effective contribution to the business has had influence in any way the way that you are thinking about the commercial potential for the new platform. The second question would be a question that relates to the group gross margin. Obviously, you now have the contribution from KIND.

Martinien Rula: Hi. Good afternoon, everyone. This is Martin Rula from Jefferies. I hope that you can hear me okay. I would have two, if that's okay for you. The first one would be on the potential contribution you would expect from the new platform. The question really being that it proved that you were conservative on Zeal's potential given the massive organic sales growth acceleration that we've had in the wholesale part of the business. I was wondering if this discrepancy between what you originally had in mind for Zeal and its effective contribution to the business has had influence in any way the way that you are thinking about the commercial potential for the new platform. The second question would be a question that relates to the group gross margin. Obviously, you now have the contribution from KIND.

Speaker #2: So the first one would be on the potential contribution you would expect from the new platform. The question really being that it proved that you were conservative on Zeal's potential given the massive organic sales growth acceleration that we've had in the wholesale part of the business.

Speaker #2: So, I was wondering if this discrepancy between what you originally had in mind for Zeal and its effective contribution to the business has, in any way, influenced the way that you are thinking about the commercial potential for the new platform.

Speaker #2: And the second question would be a question that relates to the group growth margin. Obviously you now have the contribution from Kind historically the gross margin of the business for the group was supposed to sit between 76 and 77 percent.

Martin Rula: Historically, the gross margin of the business for the group was supposed to sit between 76% and 77%. I was wondering as such, if the integration of KIND has changed in any way the way we should think about the group gross margin in the future or not. Thank you.

Martinien Rula: Historically, the gross margin of the business for the group was supposed to sit between 76% and 77%. I was wondering as such, if the integration of KIND has changed in any way the way we should think about the group gross margin in the future or not. Thank you.

Speaker #2: I was wondering, as such, if the integration of Kind has changed in any way the way we should think about the group gross margin in the future, or not.

Speaker #2: Thank you.

Speaker #3: Yeah. Thank you very much. I'm not fully sure. I fully got your first question but the new platform will benefit from the momentum from Zeal for sure.

Søren Nielsen: Yeah, thank you very much. I am not fully sure I fully got your first question, but the new platform will benefit from the momentum from Zeal for sure. Again, we have opened new doors, and we really look at it as a portfolio. It is the perfect match for first-time users. It is a good match for existing users. Some prefer the one over the other. I think the two go well hand in hand. I think that is the simple answer. On the gross margin, we are slightly above. Arne?

Speaker #3: Again we have open new doors and we really look at it as a portfolio. It's the perfect match for first time users. It's a good match for existing users.

Speaker #3: Some prefer the one over the other. So I think the two go well hand in hand. I think that's the simple answer. And on the gross margin we are slightly above on it.

Speaker #4: Yeah. So I would say our elevated gross margin in the first half year we are super happy about, both the contribution from Kind, as you mentioned yourself, but also quite unique, you can say, ASP contribution. And whilst we also expect, actually, for the second half of this year to see a high gross margin above 77, and maybe even slightly higher than H1, then it is slightly premature to fundamentally change our view on gross margin being in the high end of the 76 to 77 range.

René Schneider: Yeah. I would say our elevated gross margin in the H1, we are super happy about both the contribution from KIND, as you mentioned yourself, but also a quite unique, you can say, ASP contribution. Whilst we also expect actually for the H2 this year to see a high gross margin above 77% and maybe even slightly higher than H1, then it is slightly premature to fundamentally change our view on gross margin being in the high end of the 76% to 77% range. That is how we look at it today.

Speaker #4: That's how we look at it today.

Speaker #2: Okay. Thank you.

Martin Rula: Okay. Thank you.

Martinien Rula: Okay. Thank you.

Speaker #3: Thank you.

Speaker #1: Thank you. And our last questioner will be a Falco Friedrichs. With Deutsche Bank. Please go ahead.

Operator: Thank you. Our last questioner will be Falko Friedrichs with Deutsche Bank. Please go ahead.

Speaker #5: Thank you. I've got one left on the Diagnostics business. Could you provide a bit more color on its performance in the second quarter, and are you confident that you have seen a more sustainable turning point now for this business in terms of growth?

Falko Friedrichs: Thank you. I have got one left on the diagnostics business. Could you provide a bit more color on this performance in Q2? Are you confident that you have seen a more sustainable turning point now for this business in terms of the growth? Thank you.

Speaker #5: Thank you.

Speaker #3: Yeah. I would say most importantly it's if you look under the numbers it's really the instrumentation sales that's growing. So of course service and calibration is a more stable type of business.

Søren Nielsen: Yeah, I would say most importantly it is, if you look under the numbers, it is really the instrumentation sales that is growing. Of course, service and calibration is a more stable type of business. The calibration comes at a certain frequency. You need a certain number of disposables to run the business. When do you decide to upgrade your instrument or expand your clinics? That is the positive element that we see, you could say, some release of the many orders that somehow have piled up and the uncertainty. You can say it is back to the Q2 political change last year that kind of made investment goods stall a bit, I think, in many categories. Yes, we see it as a somewhat easing up of the market. Can things stall again? Yes, if things change. Right now we feel that the momentum is good and solid.

Speaker #3: The calibration comes at a certain frequency. You need a certain number of disposables to run the business. But when do you decide to upgrade your instrument or expand your clinics?

Speaker #3: And that's the positive element that we see you could say some release of the many orders that somehow have piled up and the uncertainty.

Speaker #3: So you can say it is back to the Q2 political change last year that kind of made investment goods stall a bit. I think in many categories so yes we see it as a somewhat easing up of the market.

Speaker #3: Can things stall again? Yes. If things change but right now we feel that the momentum is good and solid. You of course have to look at last year's growth rates quarter by quarter.

Søren Nielsen: You of course have to look at last year's growth rates quarter by quarter when you estimate forward. They also changed quite or had certain dynamics last year.

Speaker #3: When you estimate forward they also change quite or had certain dynamics last year.

Speaker #5: Okay. Thank you.

Falko Friedrichs: Okay. Thank you.

Speaker #1: Thank you. This concludes our question and answer session. I would like to turn the conference back over to management for any closing remarks.

Operator: Thank you. This concludes our question and answer session. I would like to turn the conference back over to management for any closing remarks.

Speaker #3: Thank you operator and thank you so much to everybody for joining us on this call. I know we do have a couple of people in the queue but we'll reach out to you separately to take questions offline.

Søren Nielsen: Thank you, operator, and thank you so much to everybody for joining us on this call. I know we do have a couple of people in the queue, but we will reach out to you separately to take questions offline. As always, we will be on the road in the coming weeks, and we look forward to seeing you there. Have a good rest of the day.

Speaker #3: As always we will be on the road in the coming weeks and we look forward to seeing you there. Have a good rest of the day.

Operator: Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Browse all earnings call transcripts

Q2 2026 Demant A/S Earnings Call

Request TrialDemo

Demant

Earnings