Sonova Holding AG

Ladies and gentlemen, welcome to the Sonoba AG full year results 2025-2026 conference call and live webcast. I am Valentina, the Chorus Call Operator. I would like to remind you that all participants will be in its own remote and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and 1 on your telephone. For operator assistance, please press star and 0. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Thomas Bernhardt-Kutter, Senior Director, Investor Relations. Please go ahead.

Thank you, Valentina, and welcome everyone to the presentation of our full year results 2025-26. The slides of the call are available on our website. With me in the room are Eric Bernard, CEO, and Elodie Carr, CFO of Sonoma. During the call, Eric will provide you with a business update and taking you through the performance and highlights for the Sunova Group across our businesses. He will then hand over to Elodie, who will take you through the financials in more detail and present the outlook for the financial year 26-27. We will then move to Q&A, where those of you dialing in over the phone have the opportunity to ask questions. Now, before we begin, let me mention one very important thing. Growth rates cited in today's presentation refer to changes in local currencies, unless otherwise noted. Before we dive into the presentation, please take note of the disclaimer. In short, this presentation contains forward-looking statements and serves marketing purposes. It constitutes neither an offer to sell nor a solicitation to buy any securities. And one additional reminder, Following the announced intention to divest the consumer hearing business, the business is classified as discontinued operations and the relevant comparative figures for the 2024-25 financial year have been restated accordingly. Therefore, figures and growth rates in this presentation refer to continuing operations and exclude the consumer hearing business unless otherwise stated. In addition, The hearing instruments business will be referred to as the wholesale business, and the audiological care business as the retail business. And with this, I pass the word over to Eric.

Thank you, Thomas. A warm welcome also from my side, and let's start the VisNeps review with the key highlights for the year. So 2025-26 was a very successful year for Sonovar. We delivered strong results. outperformed the hearing care market and fully met our guidance. In our hearing instruments segments, growth accelerated in the second half, and this was driven by a very strong development in wholesale, translating into the highest year-on-year market share gain since the introduction of our Marvel platform six years ago. Having posted strong high single digit growth in the first half, we accelerated to double digits in the second half, driven by our successful product launches. We also delivered robust growth in our retail business, driven by consistent execution and successful growth initiatives. We ended the year on a high note, with fourth quarter momentum building sequentially, a strong signal for the start of the new financial year. The copier implant segment continues to face headwinds in the second half, driven by the introduction of VDP in China, software upgrade sales, and heightened competitive pressure following our largest competitor's product launch. Strong growth drove operating leverage and profitability. And so the normalized IPTA margin rose 240 base points, delivering a 17.3% year-on-year IPTA increase. And to sum it all up, we delivered strong results, and we are confident to deliver continued above-market sales growth and increased profitability in 26-27. Before I talk about our performance in more details, let me briefly recap our renewed strategy that we presented in March. At the center of this strategy is a simple, focused ambition to grow Sonova to 6 billion Swiss Francs in revenue by FY2031. And we are going to deliver this through three pillars. One, innovate for adoption. We will expand into new segments by launching more lifestyle-aligned designs, strengthening connected solutions, and further integrating AI and digital capabilities. Bringing together R&D for hearing aids and cochlear implants deepens synergies across the portfolio. we are developing solutions tailored to Asian market needs and growth potential. Two, succeed locally with multi-channel, multi-brand play. We will grow by winning country by country. The right brand in the right channel at the right price. And to achieve this, we are aligning wholesale and retail more closely using customer insights to guide R&D sharing marketing assets, and scaling our elite generation engine. And we will continue targeted retail expansion to reach an optimal scale in selected strategic markets. And finally, three, excel in operations for growth. By elevating service into a core competitive advantage, we will drive loyalty, deepen partnerships, and grow market share. In parallel, we will improve efficiency and generate meaningful savings through footprint optimization, greater automation, simplified processes and disciplined value engineering. With the strategy and leadership in place, we are now focused on execution. Moving on to the performance in more detail. Let's take a closer look at the hearing instruments segment. Total segment sales rose 7.5% to 3.4 billion with growth accelerating to 7.9% in the second half against a strong comparison base. Normalized EBITDA rose 17.3% to 794 million delivering a 23.7% margin, up 280 basis points in local currencies. And Elodie, our CFO, will share more on the margin drivers later. Let's move now on to the individual businesses and starting with wholesale. The business delivered a substantial sales increase of 9.5% with positive contributions from both higher volumes and improved ASP, resulting in revenues of 1.9 billion for the year. In the second half, we delivered double-digit growth of 10.9%, accelerating against a very strong comparison base of 10% growth in the same period of 24-25. And this underscores the successful Infineo Ultra launch and a very positive market reception to Viado R. And we have a strong product pipeline, short, mid, and long term, which I will come to on the next slide. Sonovar is the innovation and technology leader in this industry, and over the past two years, we have delivered strong solutions with clear consumer benefits. We launched here in 2024 the world's first hearing aid powered by a purpose-built AI chip for speech separation from noise that allows the hearing aid to instantly detect, extract, and enhance speech from any direction. And with the launch of Ultra in October 2025, this feature can now be used all day. With Yetto R, Phonak introduced its first rechargeable in-the-ear device, combining Infineon's speech performance with a compact, custom-made design and universal connectivity. It no longer requires trade-offs from consumers in terms of performance, size, or connectivity. And we innovated beyond selling heads with the EasyGuard wax management system that protects the receiver with an acoustically transparent membrane, simplifying cleaning and reducing service visits. Our innovation engine isn't standing still with the next wave of breakthroughs already underway. Bringing real-time AI into smaller form factors, expanding beyond risk to provide more aesthetically appealing lifestyle-aligned solutions, and broadening AI functionality beyond speech in noise. During the financial year 26-27, we plan to introduce a new hearing aid platform that builds on and expands our AI leadership while adding new connectivity solutions. This next step in innovation will further enhance the user experience and reinforce the strength of our portfolio. And I'm very excited about the opportunities these launches present and confident it will further strengthen our innovation leadership and support our long-term growth ambitions. Now, moving on to our retail, revenues for the business reached $1.5 billion, representing a growth of 5.1%. Bolton acquisitions contributed 1.3 percentage points. We further expanded our sole network mainly in Germany, Austria, and Canada. Growth in the second half was 4.4% against 8.1% in the prior year periods with sequential acceleration in Q4, a positive indicator for the start of the new fiscal year. Structural cost initiatives started in 24-25, continued to deliver meaningful operating leverage, contributing to some of our selling growth. As a next step, we are deploying AI tools across our stores as a powerful enabler of productivity and to elevate the consumer journey, driving stronger consumer engagement. And now, switching to the cochlear implant segments. Sales reached 252 million, down 11%, or 3.8% lower if we exclude China. System sales were affected by the introduction of VVP in China and a major competitor's product launch in the second half. Consequently, system sales declined by 10%, with performance actually flat outside of China. Bad grape sales declined 13%. This development was expected and reflects the product cycle, as many recipients have already adopted the current processor technology. And so normalized EBITDA amounted to 17.2 million with a margin of 6.8%, impacted by the lower sales and only partly upset by strict cost controls, and by the benefits of the weaker US dollar. But we expect performance to improve in the second half of 26-27, following the planned launch of a new sound processor. It will further leverage FONAC's technology to elevate hearing performance, which is particularly relevant for cochlear implant recipients. I conclude with some highlights from our sustainability activities where Sonova has continued to make significant strides. And what you can see on this slide is that our efforts in sustainability don't go unnoticed. Sonova continues to be recognized by leading ESG rating agencies and included in important sustainability indices during 25-26. You can see a selection on the slide, and I would encourage you to have a look at our full sustainability report, which was published alongside the annual reports. And with that, let me hand over to our CFO, Elodie Carr, who will provide more details on the financials and the outlook.