Demant AS (WILLF) (Q2 2026) Earnings Call Highlights: Strong H1 Growth Fueled by Oticon Zeal ...

Q & A Highlights

Q: Can you elaborate on the drivers behind the strong 8% organic growth in Hearing Care in Q2, and how should we view the ASP contribution for the remainder of the year? A: Soeren Nielsen (CEO) confirmed that a significant portion of the growth came from a strong ASP lift, driven by the success of the high-priced Oticon Zeal in own retail and a favorable product mix. He expects this momentum to continue into H2, as new premium launches like Oticon Reveal typically increase the upgrade business, supporting continued positive ASP development.

Q: What is the growth runway for Oticon Zeal, and how does the new Oticon Reveal position against competitors? A: Soeren Nielsen (CEO) stated that Oticon Zeal still has significant growth potential, particularly in the US VA channel and as a door-opener to new clinics. Regarding Oticon Reveal, he positioned it as "second to none," highlighting its world-first dual AI system that processes both noise suppression and speech enhancement in parallel, all within a standard miniRITE form factor with full connectivity, which he believes no competitor currently matches.

Q: Why was the EBIT guidance range not narrowed despite a tighter revenue range, and what are the key swing factors? A: Rene Schneider (CFO) explained that the DKK400 million EBIT range reflects the high operational leverage in the business. The 6-7% organic growth guidance effectively represents a 5.5-7.5% range, and the translation to EBIT corresponds to the wide margin range. The primary swing factors are market performance and the company's relative over-performance versus that market.

Q: What is needed to normalize growth in the US commercial market, and why has pricing discipline been stronger this cycle? A: Soeren Nielsen (CEO) noted that the US commercial market's flattish growth is due to the declining managed care segment, offset by growth in cash-pay independents and large operators. Normalization will require a rebalancing in managed care. On pricing, he suggested that competitors are realizing the need to recoup higher R&D and technology costs, leading to a more disciplined approach to premium product pricing to avoid margin dilution.

Q: Can you elaborate on the dynamics driving the in-the-ear category growth and how Oticon Zeal acts as a "spearhead" for the rest of the portfolio? A: Soeren Nielsen (CEO) explained that in-the-ear products like Zeal now offer the same benefits as behind-the-ear aids (rechargeability, connectivity) while overcoming cosmetic drawbacks, making them highly attractive to first-time users. As a "spearhead," Zeal opens doors to new clinics, and once fitters experience its signal processing quality, they are more likely to adopt the broader Oticon portfolio.

Q: What are the key hardware and software improvements in Oticon Reveal, and will the technology eventually be applied to Oticon Zeal? A: Soeren Nielsen (CEO) highlighted two major innovations: a significantly improved feedback prevention system that allows for much higher and more precise gain, and a new connectivity platform with stronger stability and range. He confirmed that the new platform will naturally be rolled out to the rest of the portfolio, including a future version of Oticon Zeal, though the current Zeal remains a strong product.

Q: Can you provide more color on the negative DKK30 million EBIT contribution from the UK retail acquisition and its expected H2 performance? A: Rene Schneider (CFO) clarified that the DKK30 million is the total net negative contribution to EBIT for H1, including integration costs. Soeren Nielsen (CEO) added that the acquired business suffered from a lack of scale, and by consolidating headquarters and improving audiologist utilization, it is expected to become profitable and contribute positively to EBIT in H2.

Q: How should we think about the group's gross margin going forward, given the elevated level in H1 and the KIND acquisition? A: Rene Schneider (CFO) stated that while the H1 gross margin was exceptionally high, driven by strong ASPs and KIND's contribution, it is premature to fundamentally change the long-term view. He expects the gross margin to remain above 77% in H2 but maintains the structural view of a high-end 76-77% range over time.

Q: Are you confident that the Diagnostics business has reached a sustainable turning point after its strong Q2 performance? A: Soeren Nielsen (CEO) expressed confidence in the improved momentum, noting that growth was driven by instrument sales, which had stalled due to political uncertainty last year. While he sees a solid easing of the market, he cautioned that growth could stall again if conditions change, but for now, the momentum is good and broad-based.

Q: How does the launch of Oticon Reveal impact the pricing strategy and competitive dynamics in the H2 launch window? A: Soeren Nielsen (CEO) believes that more premium launches in the industry will lead to a positive product mix development, outweighing any potential discounting. He expects Oticon Reveal to enable a net price increase over its predecessor, Oticon Intent, and that the company's own retail will benefit from the upgrade cycle that typically accompanies new flagship launches.

For the complete transcript of the earnings call, please refer to the full earnings call transcript .