Q2 2026 Demant A/S Earnings Call

August 12, 2026

Speaker #1: Good afternoon, everyone, and welcome to the conference call for Demant Interim Report for 2026. My name is Peter Pusseløkke, 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.

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 from the IR team, Gustav Høegh.

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, to allow as many as possible to ask a question.

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: Before we dig into the presentation, please do pay notice to the disclaimer slide on slide two. And with that, on to slide three, 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, we'll discuss the outlook or present the revised outlook, and take Q&A.

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: And first half, in highlights for Demant 2026: strong momentum in all business areas, ahead of expectations, with growth accelerating from the first quarter into the 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.

Søren Nielsen: In Hearing Care, we have seen very solid execution and of course, also significant contribution from the acquisition of KIND, which in all have delivered very strong performance, KIND not the least. The 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 1 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: 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.

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.

Speaker #2: 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. But 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 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.

Speaker #2: Acquisitions, predominantly KINT, added 14% to group OPEX. EBIT before special items was DKK 2.134 billion, corresponding to an EBIT margin of 16.5%.

Speaker #2: Below that, again, Ren will elaborate on that strong underlying performance improvement and also underlying margin improvement. Strong cash flow—cash flow from operations of 1.6 billion, corresponding to a 6% increase compared to the first half of 2025.

Speaker #2: And based on our performance in the first half, and reassessment of the momentum and the 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. And for the business areas, starting with Hearing Aids, the global hearing aid market in the first half of 2026, we estimate that it has in value grown 4%, 3% in units. The unit growth in the second quarter comes out a little bit different than the first quarter.

Søren Nielsen: The organic revenue growth is now expected to be 6% to 7%, and EBIT before special items, DKK 4.4 billion to DKK 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%, 3% in units. The unit growth in Q2 comes out a little bit different than Q1, with US commercial being 0% and US VA being 1%. 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: With US commercial being zero and US VA being one, 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 estimate and improved pricing of 1%, also in the second quarter. In 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, a further acceleration of growth, driven by a full rollout of Oticon Zeal into all channels and geographies, and that has delivered a 10% growth.

Speaker #2: This is purely due to phasing of purchase there. Excluding Europe, 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.

Speaker #2: Canada saw strong growth. Rest of the world, we estimate well, we have no statistics, but we estimate that the Chinese 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 saw a further acceleration of growth, driven by a full rollout of UltiCon Seal into all channels and geographies, and that has delivered 10% growth.

Speaker #2: I would say it's broad-based it is Seal that, yeah, in many ways is the spearhead on the growth and changed the momentum, but we have really seen a nice broad pickup, most predominantly in North America, where we deliver double-digit growth.

Søren Nielsen: I would say it is broad-based. It is Zeal that, yeah, in many ways is the spearhead on the growth and changed 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, we released the news that we will be introducing very shortly a new flagship product, Oticon Reveal, our latest innovation. I will share a few highlights on the core technology that now takes performance of hearing aids to a new level.

Speaker #2: 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.

Speaker #2: And in Asia Pacific, highlights are Japan, and to some extent Australia, whereas China saw negative growth, primarily due to the challenging market conditions. And we also, as Peter said, yesterday released the news that we will be introducing, very shortly, a new flagship product, UltiCon Reveal.

Speaker #2: Our latest innovation, and I'll share a few highlights on the core technology that now takes performance of hearing aids to a new level. We introduced the world's first dual AI system, and what's the call of that?

Søren Nielsen: We introduced the world's first dual AI system, and what is 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 advanced. 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: 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.

Speaker #2: We have now added a parallel AI system that focuses on speech, the content of the speech, and the details of the speech. So, you could say the contrast and clarity of the speech are further enhanced.

Speaker #2: 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.

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, to, you know, that we can give a response on 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 is 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 do not 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 system 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 ends 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. 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 here it is 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: Then 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.

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. 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: 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.

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 slightly scientific way, but this is to make sure things actually work. 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.

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. Oticon Intent, which I think everybody will admit is already a very strong hearing aid and platform.

Speaker #2: We see a very significant improvement in the speech intelligibility index, as it's called, meaning how well I can actually understand and make sense of things.

Speaker #2: We see a very strong response to 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, or on the UltiCon 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% comes 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 comms from last year, but also sequentially expressing an uplift to the momentum in the business and a strong execution broadly across geographies. KIND 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 come from the acquisition made of acquisitions mainly KINT, but also a larger acquisition in 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 super good for, of course, scale and profit, and also good to see after, you know, uncertainty related to the immediate takeover is gone.

Søren Nielsen: That is super good for, of course, scale and profit and also good to see after uncertainty related to the KIND 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: So we are very comfortable about the further benefit of having the KINT business in our group. Looking at geography, there was 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 continued to expand in France. Where a number of new players get into the field.

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

Speaker #2: We all remember last year all the uncertainty that came from, let's say, political uncertainty. In Australia, 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 an improved momentum and that we gained 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.

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 second quarter, very strong performance, very, very happy to see.

Speaker #2: We're returning to solid growth rates now in the quarter, up 9%. Again, last year uncertainty in Q2 was 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 UK, but also US, Canada, et cetera. So all in all, very good. Forward to Uganda, for group financials.

Søren Nielsen: Over to you, René, for group financials.

Speaker #1: Thank you, Søren. And we move on to revenue in the first half. Which is a bit of repetition. We saw a broad-based organic growth of 7% in the first half.

René Schneider: Thank you, Søren. 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. 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. The primary drivers of that was a very healthy, solid development in ASP in hearing aids due to strong geography, channel, and product mix.

Speaker #1: Acquisitive growth of 10%, entirely related to acquisitions in hearing care. Of course, predominantly KINT, but also a larger retail in the UK as well as some minor acquisitions.

Speaker #1: And we saw a negative effect from FX of 3%, driven by a US dollar. So all in all, 15% growth in reported revenue. I highlight from the first half is the development in the gross profit.

Speaker #1: It increased by 17% to just shy of 10 billion, with a margin expansion of 1.1 percentage point versus last year, which was above our expectation.

Speaker #1: 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 #1: But also an equally strong contribution from the acquisition of KINT and its performance in hearing care. That brings us to operating expenses and EBIT.

René Schneider: But also 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 -2% effect. 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.

Speaker #1: 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 #1: 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.

Speaker #1: Included in that result and in that margin, we have absorbed a number of negative effects one of them being an estimated 50 million negative effect from exchange rates, but also an additional 30 million kroner 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.

René Schneider: One of them being an estimated DKK -50 million 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 H1 as part of our operating profit. If we exclude that, the underlying EBIT margin expansion would have been 0.6 percentage point compared to last year. That reflecting a strong underlying operating leverage. Our special items in H1 was DKK 216 million, predominantly related to KIND. The strong result in 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 phasing of EBIT between the two half years.

Speaker #1: 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 #1: Our special items in the first half were DKK 216 million, predominantly related to KINT. The strong result in the first half of the year also means that, when we talked about the 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 phasing of EBIT between the two half-years.

Speaker #1: 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.

René Schneider: 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. 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 H1 as we have had focus on reducing debt and leverage. 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 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.

Speaker #1: 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 #1: And as you are likely aware, we have not done any share buybacks during the first half, as we have been focused on reducing debt and leverage.

Speaker #1: 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.

Speaker #1: 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.

René Schneider: 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 2x to 2.5x range, which is our long-term guidance. With that, let's move on to outlook. On the market, 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, and 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. Things to highlight, special items. We have adjusted special items to now total DKK 400 million, previously DKK 325 million.

Speaker #1: With that, let's move on to outlook. Brief comments on the market. So we I would say almost as normal, but we do base the market understanding on a competitive environment where we know competitors are expect competitors to launch new product in H2.

Speaker #1: 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%.

Speaker #1: 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 #1: 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.

René Schneider: 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. 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. 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.

Speaker #1: Special items is now estimated at 150. Previously 125. As well as cost saving initiatives. Now 250 million. Previously 200 million. Primarily all related to severance payments and implementation costs.

Speaker #1: The other highlights on the outlook side are a less negative effect on FX, as you have seen in the announcement, but also higher profit contribution from both CEI and KINT.

Speaker #1: The cost effectiveness program now is estimated to contribute 300 million. Compared to 250 in the original outlook. And the better performance in KINT with that we expect a contribution to EBIT of 325 million.

Speaker #1: Previously, €300 million. Lastly, but more minor, we expect to get a refund of tariffs in H2 of €25 million. With that, summing up, our outlook now is 6 to 7% organic growth and EBIT before special items in the range of €4.4 to €4.8 billion.

René Schneider: 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.

René Schneider: 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 #1: So with that, we are ready to go to Q&A.

Operator 3: 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. 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 two. 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.

Operator: 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. 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 two. 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 #2: 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.

Speaker #2: 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 2.

Speaker #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.

Speaker #2: The first question comes from Martin Parkoy with SEV. Please go ahead.

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 that 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.

Speaker #3: Yes, good afternoon. Martin Parkoy at SEB. Two questions. Firstly, with respect to hearing care, with the 8% organic growth in the second quarter, our understanding is that there is a very good contribution from ASP lift in hearing care.

Speaker #3: Of course, supported by the high price point of SEAL. How should we look at the ASP contribution for the remainder of the year in Hearing Care?

Speaker #3: Of course, seal will still benefit year over year, but can there be some impact from lower price points lower price points of seal also become available?

Speaker #3: And then, second question also on pricing, but more on a wholesale level. Firstly, can you talk about—you have had quite good success with the premium pricing of SEAL.

Martin Parkhøi: What are your plans for Oticon Reveal versus Oticon Intent on each tier level, and 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, and there are maybe some players which are more desperate than others to drive growth with these new products?

Speaker #3: What are your plans for reveal versus intent on each tier level? And how do you actually see the pricing risk from an industry perspective in the second half, in light of the quite crowded launch period we have from the industry?

Speaker #3: And there are maybe some players who are more desperate than others to drive growth with these new products.

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, and that is a little 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, and that is definitely going to be a focus with Oticon Reveal where you could say Oticon Zeal is more a first-time user focus.

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, and that is a little 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, and that is definitely going to be a focus with Oticon Reveal where you could say Oticon Zeal is more a first-time user focus.

Speaker #1: 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 mixed geography, mixed issue, but it is a product mixed issue by most.

Speaker #1: So yes, All-Conceal has also been 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 #1: And that's a little bit different, market for market, depending on reimbursement and so on. So into the second half, yes, I think we should be able to maintain, and we always see also in our 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 #1: 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.

René Schneider: The two will go hand in hand, and I think will both be able to 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 a positive

Søren Nielsen: The two will go hand in hand, and I think will both be able to 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 a positive

Speaker #1: And I think we'll both be able to 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 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.

Søren Nielsen: 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 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. 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 Oticon Zeal, because the product was very unique and without competition, you could say almost, but that Oticon Reveal also will enable a net price increase over Oticon Intent.

Speaker #1: If there's, then, more or less discount on the new ones, well, it still ends up, I believe, net leading to a better product mix that outbalances—even if that effect is there.

Speaker #1: But at least as a beginning, I think everybody will try to get a return on their initial investment. So I would say normally, even if we see a lot, it's good for the ASP in that period.

Speaker #1: 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 #1: But that reveal also will enable a net price increase over the content. Thank you.

Martin Parkhøi: Thank you.

Operator 3: Thank you. The next question comes from Veronika Dubajova with Citi. Please go ahead.

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

Speaker #2: Thank you. The next question comes from Veronica Tobiova with Citi. Please go ahead.

Veronika Dubajova: Hi, guys. Good afternoon. 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 the first and the second quarter of the year. Then my second question is really your thought process on Reveal and how it might position.

Speaker #4: Hi guys, good afternoon. Thank you for taking my questions. I have two, please. The first one is—sorry—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.

Veronika Dubajova: Obviously, I know we are still waiting for two more product launches, but 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: 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.

Speaker #4: Thanks so much.

Søren Nielsen: Thank you very much, Veronika. I would definitely say, from a growth perspective, we are comparing still to zero when it comes to Zeal. So there is 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 don't 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 #1: Thank you very much, Veronica. I would definitely say, from a growth perspective, of course, we are still comparing to zero when it comes to SEAL.

Speaker #1: 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 #1: 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.

Speaker #1: 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 Seal was a niche product for a niche.

Speaker #1: We have now seen clearly both the expansion of the number of people that end up having an in-ear rechargeable product. We have also seen it only take a very significant share very fast, and this 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 an 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 #1: 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.

Speaker #1: And it offers an opportunity to both have fantastic outcomes and also the opportunity for, 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 #1: So far, after three months into VA, super positive outcome, and we definitely believe in continued growth in that channel, as an example. But also outside, for all the conceal.

Speaker #1: 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 mini RIE form factor, rechargeable, full connectivity and everything. 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 #1: So for now, from 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 Real is second to none.

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

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

Operator 3: Thank you. The next question comes from Martin Brenøe with Nordea. Please go ahead.

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

Speaker #2: Thank you. The next question comes from Martin Brenner with Nordea. Please go ahead.

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. You mentioned the new price points a couple of times on this call. 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 and 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 #3: 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.

Speaker #3: As a 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 H1, making it maybe a bit more tough to stand out here and heading into H2 with other launches coming.

Speaker #3: 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 #3: 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?

Martin Brenøe: 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 to 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 #3: Or what opportunities do you actually have to build on this momentum as we're seeing the space get more crowded? That's the first question. And the second question would be on the Martin side.

Speaker #3: When we adjust for the significant custom initiatives that you will reap the benefits of here in H2, the underlying EBIT margin doesn't really imply any margin expansion.

Speaker #3: Despite the significant growth that you should be seeing and also guiding for here, should we see this as a prudent assumption to your guide?

Speaker #3: Or are you actually investing back in the OPEX, given the run rate you're seeing, to be ready for 2027? That's my second question. Thank you.

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. If Zeal, which is our ambition, really have to grow to be a new way of producing and manufacturing in-ear instruments, we also want more volume into the technology and business, and 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 #1: 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.

Speaker #1: And we have penetrated very strongly there. We have even expanded it. We can see in our own retail that there are more people who are willing to pay.

Speaker #1: But still, it is a minor category. 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.

Speaker #1: And therefore, a discussion in selected market of more price points is relevant. But the biggest benefit of seal is that it helps opening new doors.

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. And to you, Martin, I will start and then you can supplement.

Speaker #1: 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.

Speaker #1: 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 training you can do more on.

Speaker #1: 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 #1: 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.

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. And I think there is good visibility to a further improvement in the H2 for a number of reasons. But maybe, René, you want to add a few words?

Speaker #1: 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.

Speaker #1: 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.

Speaker #1: And I think there is good visibility to a further improvement in the second half, for a number of reasons. But maybe René, you want to add a few words?

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. I would say we have an outlook that we are very confident in.

Speaker #5: 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.

Speaker #5: 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.

Speaker #5: And that's what we—that's what we plan for. We have an outlook that we are very confident in.

Martin Brenøe: Okay. Thank you very much.

Speaker #3: Okay. Thank you very much.

Operator 3: Thank you. The next question comes from David Adlington with JP Morgan. Please go ahead.

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

Speaker #2: Thank you. The next question comes from David Adlington with JP Morgan. Please go ahead.

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 the top end of that range in quite narrow revenue assumptions. Thanks.

Speaker #3: Guys, thanks for taking the questions. Maybe first up just maybe a bit more conceptual one. You've narrowed your range at the top line from three points and three to six down to six to seven.

Speaker #3: You still have 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 on what the deltas are between the bottom and top end of that range quite narrow revenue assumptions.

Speaker #3: Thanks.

René Schneider: Well, 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. 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 overperformance to that market. I think it is in line with how we have done things in the past.

Speaker #5: 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.

Speaker #5: 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 correspond to a 400 million kroner range.

Speaker #5: 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.

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

Speaker #3: And just one quick follow up. Was there any pre-investment in the new launch in the first half?

René Schneider: Not in particular.

Speaker #1: Not in particular.

David Adlington: We expect it in the H2.

Speaker #3: We expect it in the second half.

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 harvest the benefits.

Speaker #1: 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 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, that we also invest in to make sure we can harvest the benefits.

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. On the other hand, we are also executing on the cost effectiveness. On balance, you would expect organic growth rate in OpEx maybe similar to what you saw in the H1.

Speaker #5: So I would say just to give some direction around the OPEX line on the one hand as Søren ren 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.

Speaker #5: And but on the other hand we also executing on the cost effectiveness. So on balance you would expect organic growth rate in OPEX maybe similar to what you saw in the first half year.

Speaker #3: Of course. Thank you.

David Adlington: Thank you.

Operator 3: Thank you. The next question comes from Niels Granholm-Leth 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. The next question comes from Nils Grantham Leith with DNB Carnegie. Please go ahead.

Speaker #5: 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: 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.

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 ourself. I think it will have to come with a new stand on managed care and it findings its new balance, and then we would see the total market return to growth. There continue to be some drop out, 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 #1: 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.

Speaker #1: And we do see cash-pay private independents have some growth. And then we see the strongest growth being in what we would call big-box retail and large operators.

Speaker #1: Including ourself. And I think it will 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 #1: The continue to be some yeah dropout people that are not eligible whatever it is that private leakings to the other channels. But at some stage I would assume there is a rebalancing.

Speaker #1: But when that happen is very difficult to estimate of course. There's no doubt we still see the expected growth in senior population prevalence of hearing loss etc.

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.

Speaker #1: 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.

Speaker #1: 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.

Søren Nielsen: 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, 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 #1: 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.

Speaker #1: And 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.

Niels Granholm-Leth: Thank you.

Speaker #5: Thank you.

Operator 3: Thank you. The next question comes from Richard Felton with Goldman Sachs. Please go ahead.

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

Speaker #2: Thank you. The next question comes from Richard Fulton with Goldman Sachs. Please go ahead.

Richard Felton: Thanks. Good afternoon. 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 you 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. Can you maybe elaborate on why that is the case in practice? How is Zeal helping the rest of the portfolio? Thank you.

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.

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 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.

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 is 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. 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 is the natural evolution. Swing back, no end users are, when they arrive as first-time users, very aware what is around.

Speaker #1: 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.

Speaker #1: 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.

Speaker #1: 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.

Speaker #1: And I think that's the natural evolution and swing back. No end users are when they arrive as first time users very aware what is around.

Søren Nielsen: 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. Have you for many years used a mini RIE, I am 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 Zeal is a door opener. It is a new concept. You can see the idea. You see the benefit for first-time users. As I think I have said before, there is simply more calls being booked to customers with whom you have little or no business.

Speaker #1: 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.

Speaker #1: 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 #1: 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.

Speaker #1: 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.

Søren Nielsen: Based on that call, you actually, once you are then fitted, when you learn the fitting system, you see the qualities 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 is what I mean when I talk about a spearhead for attention, a spearhead for new opportunities.

Speaker #1: You see the qualities, also the signal processing. And there is a chance that you then also manage to open up a broader part of the portfolio to these new customers.

Speaker #1: And that's what I mean when I talk about a spearhead for attention, a spearhead for new opportunities.

Operator 3: 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 #2: Thank you. The next question comes from Kavya Deshpande with UBS. Please go ahead.

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 #6: 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.

Speaker #6: 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 serious chip on the intent?

Speaker #6: And my second question was, the Zero was launched on the same chip and retains many of the same features as Intent. The performance benefits you’ve delivered on the Reveal—would those have a home on a future Zero model as well?

Speaker #6: Would this be possible and would should we expect something like this? Thank you.

Søren Nielsen: Yeah. Thank you very much. Yes. There are 2 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 #1: 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 saw many years ago because you don't hear the whistling in the hearing aid anymore.

Speaker #1: 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.

Speaker #1: 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.

Speaker #1: So you can see the instruments want to do more but are prevented in doing it. And the new feedback system we have both allow for more gain because it can quicker eliminate the loop it creates.

Speaker #1: And it's much more precise so we the real available gain is significantly higher. And that's also a key instrument to have these systems work together so the AI system scream and calls for something then it's actually also available where most other systems are much slower.

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. When the gain is maybe ready, then the need is gone. That is one very significant innovation and improvement, and 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 will 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.

Speaker #1: And then when the gain is maybe ready then the need is gone. So that's one very significant innovation and improvement. And the other is connectivity.

Speaker #1: It's fundamentally a new connectivity platform. We have put in measures that ensure even stronger, you could say, perceived reliability of the connection. You lose it much more seldom.

Speaker #1: The quality of what comes through is higher. The distance by which you can be away from your phone without deterioration is much higher. So also a significant improvement.

Søren Nielsen: To your last question, yes, following this release in the coming period, it is of course natural that the rest of our portfolio gets onto this new platform. That is also the case for Oticon Zeal 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. So it will not be a significant setback for Oticon Zeal that we now have a new mini RIE platform available.

Speaker #1: 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.

Speaker #1: And that's also the case for old conceal at some stage. Right now we are very happy with the performance. It's a new instrument and the main again breakthrough is of course what it does but it's also how it looks.

Speaker #1: So it will not be a significant setback for the conceal that we now have a new mini ride platform available.

Kavya Deshpande: Understood. Thank you very much.

Speaker #6: Understood. Thank you very much.

Operator 3: Thank you. The next question comes from Carsten Lønborg 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 #2: Thank you. The next question comes from Carsten Lundborg Madsen with Danske Bank. Please go ahead.

Carsten Lønborg Madsen: Thank you very much. First, a question to René. This DKK -30 million you have on 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 in terms of EBIT in H2? Then I have another question after this.

Speaker #1: 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?

Speaker #1: 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 #1: Then I have another question after this.

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

Speaker #4: Yeah. So the 30 I refer to is the total net contribution to EBIT—negative $30 million. So I'm not saying what is sales, what is cost of goods sold, and OPEX.

Carsten Lønborg Madsen: Yep.

René Schneider: The net effect on the bottom line is DKK 30 million. That is how it is understood, meaning that, since it was announced in H1, it is behind us, and we expect the business to give a positive contribution to EBIT in H2.

Speaker #4: But the net effect on the bottom line is $30 million. That's how it's understood, meaning that since it was announced in H1, it's behind us.

Speaker #4: And we expect the business to give a positive contribution to EBIT in H2.

Søren Nielsen: If I can supplement, it is 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 #1: If I can supplement it's a classical scale issue that the lack of profitability in the business we acquires come from too little scale on the headquarter.

Speaker #1: And 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.

Speaker #1: And that brings it immediately. 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. 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. The 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 #1: This short question I guess is do you expect this in any way can turn into a tailwind for also running in 2027 that this contract will be reallocated?

Søren Nielsen: I think that is 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 is as without, I do not have all the details, but that is my best take, that now it is 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 #5: 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.

Speaker #5: 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. And that of course always leads to opportunities for coming with a good offer.

Speaker #5: And is that our strongest place? No not currently but we'll always seek opportunities. Yes.

Carsten Lønborg Madsen: Thank you.

Speaker #1: Thank you.

Operator 3: Thank you. The next question comes from Susannah Ludwig with Bernstein. Please go ahead.

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

Speaker #2: Thank you. The next question comes from Susanna Ludwig with Bernstein. Please go ahead.

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. I guess 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 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 #6: 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.

Speaker #6: 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 #6: 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?

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 #5: 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 re-engineered to offer this new performance.

Speaker #5: 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.

Speaker #5: That allows us to do all these great things without running crazy in power consumption. That's the reason for having one integrated chip. So that's I think is so far we can share that without helping competition too much.

Speaker #5: There is a significant, of course, change in the algorithms. That's the real innovation. That's how we innovate—most of the signal processing today is not directly hardware driven.

Speaker #5: It is software-driven. Yeah, it is 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 do that.

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 #5: Whereas the connectivity is more hardware related. That's yeah a lot to do with antennas and strength of signals and so on. That's typically more physical but also there.

Susannah Ludwig: Okay

Søren Nielsen: improved algorithms.

Speaker #6: Okay. And then.

Speaker #5: The algorithms.

Susannah Ludwig: Okay. 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 have sort of reorganized and improved the software updates. Is that right?

Speaker #6: Okay. And just to make sure that I have this right. So the 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.

Speaker #6: Is that right?

Søren Nielsen: I do not think I said either yes or no. I do not think we want to sit here and disclose those details.

Speaker #5: I don't think I said either yes or no. I don't think we want to sit here and disclose those details.

Susannah Ludwig: Okay, thanks.

Speaker #6: Okay. Thanks.

Operator 3: Thank you. The next question comes from Anela Beji with BNP Paribas. Please go ahead.

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

Speaker #2: Thank you. The next question comes from Angela Bozenovich with BNP Paribas. Please go ahead.

Anela Beji: 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 Intent. 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 Intent? 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 Intent. 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 Intent? Thank you.

Speaker #7: 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.

Speaker #7: And now when you upgrade a guide you emphasize that the market assumptions are conservative. 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 #7: 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 about uptake of this product overall, not only in 2026 but more of the medium-term aspects versus Oticon Zeal?

Speaker #7: Thank you.

Søren Nielsen: Yeah. Happy to comment. I think, first of all, Oticon Intent was launched softly into the H2 last year towards the end of the year in selected countries. We started up 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 Intent in front of us. Oticon Reveal, of course, is going to build a new 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 don't know what they are.

Speaker #5: Yeah, happy to comment. I think, first of all, Oticon Zeal was launched softly in the second half of last year, towards the end of the year, in selected countries.

Speaker #5: 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.

Speaker #5: 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 #5: And ReSound, of course, is going to build, 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.

Søren Nielsen: That's also why we mentioned that in our assumptions, 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 spreads the momentum. It's 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's a comfort. We still have the same view on the market, and it's still, you could say, considered slightly conservative, but the political uncertainty remains. H2, 2% to 4%, just like we assumed for H1, then turned out to be 4% and not the 2%. That's still the biggest, I would say, swing element in H2, in addition, of course, to getting light or what competition will come with.

Speaker #5: 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. It, of course, ultimately depends a little bit also on what competition comes with, but it's in there, and it expects the momentum.

Speaker #5: 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, there is momentum stability in that.

Speaker #5: And that's the comfort. We still have the same view on the market, and it's still, you could say, considered slightly conservative. But the political uncertainty remains.

Speaker #5: So, second half, two to four percent just like we assumed for first half, then it 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 over what competition will come with. And we so far have only seen limited presentation of that.

Søren Nielsen: We so far have only seen limited presentation of that. 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 Intent, 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 #5: Only one out of three assumed launches. On the if I understood your question right it was a little down the previous one. How will the technology come into the portfolio?

Speaker #5: 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 #5: It was a first version and we see a long journey for products built this way.

Anela Beji: Thank you.

Andjela Bozinovic: Thank you.

Speaker #7: Thank you.

Operator 3: Thank you. The next question comes from Martin Hula with Jefferies. Please go ahead.

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

Speaker #2: Thank you. The next question comes from Martin and Rula with Jefferies. Please go ahead.

Martin Hula: Hi. Good afternoon, everyone. This is Martin Hula 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 Hula 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 #8: Hi, good afternoon, everyone. This is Martin from Jefferies. I hope you can hear me okay. I have two questions, if that's okay with you.

Speaker #8: 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 #8: So 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.

Speaker #8: And the second question would be a question that relates to the group gross 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 Hula: 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 had 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 had changed in any way the way we should think about the group gross margin in the future or not. Thank you.

Speaker #8: 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 #8: Thank you.

Søren Nielsen: Yeah, thank you very much. Arne, I'm 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's the perfect match for first-time users. It's 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's the simple answer. On the gross margin, we are slightly above. Arne?

Speaker #5: 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.

Speaker #5: Again, we have opened new doors, and we really look at it as a portfolio. It's the perfect match for first-time users, and it's a good match for existing users.

Speaker #5: Some prefer the one over the other, so I think the two go well hand in hand. I think that's the simple answer on the gross margin.

Speaker #5: We are slightly above on it.

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 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's how we look at it today.

Speaker #3: Yeah. So I would say our elevated gross margin in the first half of the year – we are super happy about both the contribution from Kind, as you mentioned yourself, but also, quite uniquely, the ASP contribution. 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 in H1, it is slightly premature to fundamentally change our view on gross margin being in the high end of the 76% to 77% range.

Speaker #3: That's how we look at it today.

Martin Hula: Okay. Thank you.

Martinien Rula: Okay. Thank you.

Speaker #8: Okay. Thank you.

Speaker #5: Thank you.

Operator 3: Thank you. Our last questioner will be Falko Friedrichs with Deutsche Bank. Please go ahead.

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

Speaker #2: Thank you. And our last questioner will be a Falco Friedrichs. With Deutsche Bank. Please go ahead.

Falko Friedrichs: Thank you. I have got one left on the diagnostics business. Could you provide a bit more color on this performance in the 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 #4: Thank you. I’ve got one left on the Diagnostics business. Could you provide a bit more color on this 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?

Speaker #4: Thank you.

Søren Nielsen: Yeah, I would say most importantly, 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. But when do you decide to upgrade your instrument or expand your clinics? That is the positive element that we see, you would 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. But right now we feel that the momentum is good and solid.

Speaker #5: 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.

Speaker #5: 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 #5: 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 #5: 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 #5: 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 #5: When you estimate forward they also change quite or had certain dynamics last year.

Falko Friedrichs: Okay. Thank you.

Speaker #4: Okay. Thank you.

Operator 3: 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 #2: Thank you. This concludes our question and answer session. I would now like to turn the conference back over to management for any closing remarks.

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 #5: 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.

Speaker #5: 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 3: Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

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

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Q2 2026 Demant A/S Earnings Call

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Event Details

Demant

WILLF

Earnings

Q2 2026 Demant A/S Earnings Call

Wednesday, August 12th, 2026 at 12:00 PM

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Demant

Earnings