Amplifon SpA Aktie

Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Amplifon Second Quarter 2026 Results Conference Call. [Operator Instructions]

At this time, I would like to turn the conference over to Ms. Francesca Rambaudi, Investor Relations and Sustainability Senior Director of Amplifon. Please go ahead, madam.

Thank you. Good afternoon, and welcome to Amplifon Conference Call on Second Quarter 2026 Results. Before we start, a few logistic comments. Earlier today, we issued a press release related to our results, and this presentation is posted on our website in the Investors section. The call can be accessed also via webcast and dial-in details are on our website as well as on the press release.

I have to bring your attention to the disclaimer on Slide 2. Some of the statements made during this call may be considered forward-looking statements.

With that, I'm now pleased to turn the call over to Amplifon's CEO, Enrico Vita.

Thank you, Francesca. Good afternoon, everyone, and thank you for joining us. Today, I'm very pleased to share our second quarter results, which reflects an excellent performance across the board.

We delivered our strongest organic growth in the past 2 years, together with a significant improvement in profitability across all 3 of our regions. The most important takeaway from these results for me is that they validate the actions that we have taken and the investments that we have made over the past year. from advertising and communication to our in-store protocols, these initiatives are now translating into stronger performance giving us confidence that the momentum we are building is sustainable. But let me begin with a brief overview of the global market environment. where we are also seeing encouraging developments in some of our key countries.

In fact, across Europe, market conditions continue to improve with our core markets, particularly in Southern Europe, showing clear signs of strengthening demand. On the other hand, as expected, the French market is now analyzing against last year, exceptionally strong volume growth following the regulatory reform, resulting in a lower comparative growth rate. In the U.S., the market grew by approximately 1%, supported by a solid private pay segment, up around 4% and which more than offset the continued softness in the insurance channel, down around 4% as well. In APAC based on our estimates, market dynamics improved in Australia, with China also showing the gradually strengthening trends. Overall, we estimate that the global heating car market grew by around 2.53% in unit terms during the second quarter, broadly in line with our expectations. In this backdrop, we outperformed across most of our key markets, with particularly strong performances in the U.S., Italy, Spain, Australia and China.

Turning to revenues. We delivered 4.7% organic growth, representing an excellent performance, especially because very well balanced across the 3 regions. The impact of our Fit4Growth program on revenues during the quarter was approximately minus 3.5%, mainly reflecting our portfolio optimization initiatives. M&A contributed 0.5%, primarily driven by the carryover effect of bolt-on acquisitions completed last year.

Turning to profitability. We delivered a significant improvement in adjusted EBITDA margin, which increased by 90 basis points versus last year. driven by operating leverage and the continued execution of our Fit4Growth program. Importantly, all 3 regions contributed to this performance, each delivering a very meaningful improvement in adjusted EBITDA margin. The improvement was even more pronounced at the adjusted EBIT level, where margin expanded by 130 basis points versus last year. reflecting the strong operating leverage of the business and the impact of feed for growth. Finally, let me highlight our strong free cash flow generation, which improved by nearly EUR 30 million or plus 70% versus H1 2025. As you can imagine, we are very pleased with these results. They reinforce our confidence that the momentum that we are building is both strong and sustainable, and position us well to deliver on our objectives for the remainder of the year.

With that, I will now hand over to Gabriele, who will take you through our results in more detail.

Thanks, Enrico, and good evening to everybody.

Turning to Slide 4. We have a look at our financial performance in Q2 '26. Revenues were up 1.7% at constant effect versus Q2 '25 with a very strong organic growth of 4.7%. I'm glad to say that this growth was well balanced across all regions and outpaced the global [indiscernible] market. The bolt-on M&A made primarily in 2025, contributed to top line growth by 0.5%. Fit4Growth had an impact of minus 3.5%, following the closure of over 200 nonperforming clinics since the launch of the, program, [indiscernible] of which during Q2 this year, the divestiture of the U.K. business in early March and the termination of a managed care agreement in the U.S. from January.

FX was a tailwind of 8.5%, mainly driven by the Australian dollar, which was partially offset by the euro appreciation versus the U.S. and the New Zealand dollar. Adjusted EBITDA was EUR 156 million, with the margin improving by 90 basis points compared to Q2 '25. This improvement was driven by the excellent improvement seen across all the regions, also thanks to the strong results of the Fit4Growth program and after ongoing investments to further strengthen the company's distinctive assets.

Moving to Slide 5. We have a look at our financial performance in H1 '26. Revenues were up 1.3% at constant FX versus last year with a strong organic growth of 3.5%, significantly accelerating throughout the period. And here again, well balanced across the regions. The bolt-on M&A made Par in 25 contributed to top line growth by 0.8%. Fit4Growth had an impact of minus 3% for the reasons just mentioned. FX was a headwind of 0.9%, even if reverse in Q2. Adjusted EBITDA was EUR 298 million with a 70 basis point margin improvement compared to last year, thanks to improvement in all regions due to Fit4Growth even after ongoing investment in our distinctive assets.

Turning to Slide 6, we have a look at [indiscernible] our performance. In the quarter, revenue growth was 2% at constant FX. Thanks to a very strong acceleration in organic growth, which came up 4.5%, also thanks to the excellent performance in Southern Europe and despite the expected normalization of the French market following the annualization of the [indiscernible]. The bolt-on M&A made primarily '25 contributed 0.2% top line growth. Fit4Growth had an impact of minus 2.7% following the closure of around 90 clinics since the launch of the program and the divestiture of the U.K. business in early March. So impacted the entire quarter. FX was a slight tailwind of plus 0.2%.

Adjusted EBITDA was EUR 120 million, with margin at 30.7%, 180 basis points above Q2 '25. Thanks to operating leverage and the strong results of Fit4Growth, even after the ongoing investment in our distinctive assets. In H1, revenue growth was 1% at constant FX, with organic performance at plus 2.4%, Fit4Growth at minus 1.9% and M&A at plus 0.5%. Adjusted EBITDA was EUR 237 million, with margin at 30.5%, 140 bps above last year.

Moving to Slide 7. We have a look at the performance in Americas. Revenue performance in the quarter was minus 1.3% at constant FX while FX headwind was for 2.1%. Organic growth was a super positive, well above market, 6%, thanks to the strong performance recorded in all the markets and businesses in the region. The bolt-on M&A made primarily in 2025, contributed 1.2% top line growth. Fit4Growth had an impact of minus 8.5% following determination of a managed care agreement in the U.S. on January 1, and the closure of around [indiscernible] since the launch of the program. Adjusted EBITDA was EUR 31.6 million, with margin up 180 basis points to 26.2% versus 24.4% last year. Thanks to operating leverage and the strong results of Fit4Growth. In H1, revenue was flat at constant FX with organic performance at plus 6.3%. And fit for growth at a minus 8% and M&A at plus 1.6%. Adjusted EBITDA was EUR 57 million, with margin of 24.8%, 130 basis points above last year.

Moving to Slide 8. We have a look at Asia Pac performance. In the quarter, revenue performance was plus 4.6% at constant FX, driven by a strong organic growth of 4.3%, thanks to the excellent performance of Australia and China. The bolt-on M&A made primarily in 2025, contributed 0.7% top line growth. Fit4Growth as the impact of minus 0.4% following the closure of around 80 clinics since the launch of the program while the closing of the divestiture of the Indian business is expected in Q3. Adjusted EBITDA reached EUR 23.5 million with a margin of 25%, 130 basis points higher than the EUR 23.7 million recorded in Q2 '25, thanks to operating leverage and fit for growth. even after the fast growth in China and the ongoing investments in our core assets. In H1, revenue growth was 4.5% at constant FX, with organic performance at plus 4.6%, Fit4Growth of minus 0.8 and M&A of plus 0.7. Adjusted EBITDA was circa EUR 48 million with margin of 26.3%, 80 basis points above last year.

Moving to Slide #9. We appreciate the Q2 income statement. In Q2, total revenues came in at EUR 606 million, with an increase of 2.2% or 1.7% of constant FX versus prior year. Adjusted EBITDA was EUR 156 million, with a margin of 25.8%, 90 basis points above '25, also thanks to the strong results of Fit4Growth. D&A, excluding PPA, were at EUR 64 million, decreasing by around EUR 1 million versus EUR 65 million in Q2 '25. This led the adjusted EBIT to EUR 77 million, with a strong improvement of EUR 11 million or 17% versus last year. Net financial expenses amounted to EUR 15 million, below the EUR 16.3 million in '25. Tax rate decreased slightly year-on-year from 26.2% to 26.1% this year leading to a strong increase of over 17% in adjusted net profit from EUR 48.8 million last year to over EUR 57 million this year.

Moving to Slide 10. We see the H1 profit and loss evolution. Total revenues increased by 1.3% at constant exchange rate to EUR 1.19 billion. Adjusted EBITDA was EUR 298 million, with margin of 25.1%, 70 basis points above H1 '25. D&A, excluding PPA, decreased by around EUR 3 million, leading the adjusted EBIT to around EUR 117 million with margin at 14.3%, with an improvement of around 90 basis points versus last year. Net financial expenses decreased by EUR 1.6 million to EUR 29.8 million, leading profit before tax to around EUR 140 million. Trade ended at 27.4%, leading to a strong 12.3% increase in adjusted net profit versus last year from EUR 90 million to EUR 102 million.

Moving to Slide 11. We appreciate the cash flow evolution. Adjusted operating cash flow after tax layer after lease liabilities was in the period equal to EUR 114 million versus EUR 105 million last year. Net CapEx decreased by around EUR 19 million to EUR 46 million, also thanks to the Fit4Growth program, leading adjusted free cash flow to EUR 68 million versus EUR 40 million in H1 last year with an outstanding increase of around 70%. In H1 '26, we had net proceeds from divestiture, including the U.K. dilutive business for around EUR 7 million versus cash out for acquisition for EUR 55 million last year. This, together with no share buybacks in the period led the pro forma net cash flow for the period, excluding the net proceed from the ABB completed in May to negative EUR 7 million, with an improvement of over EUR 130 million versus a negative EUR 139 million in H1 2025.

Pro forma fee came to EUR 1.049 billion versus EUR 1.045 billion at the end of 2025. Including the EUR 449 million proceeds from the ABB, the net cash flow for the period was positive for EUR 442 million and the MSP was at EUR 600 million.

Moving to Slide 12. Revenue to the debt profile trend and the key financial ratios. As mentioned, the net financial debt ended slightly above EUR 1 billion with liquidity accounting for EUR 263 million, short-term debt accounting for around EUR 738 million, and medium long-term debt accounting for around EUR 569 million. Following the IFRS 16 application, lease liabilities were around EUR 484 million, leading the sum of net financial debt and lease liabilities to EUR 1.53 billion. Equity ended around EUR 1.5 billion.

Looking at financial ratios, pro forma net debt over EBITDA improved despite of the business seasonality to 1.87x versus 1.92x in December '25, in line with our target to deleverage the company in light of the prospective acquisition of January. Including the proceeds from the ABB, the net debt over EBITDA ratio was 1.07x. To this regard, please let me give you an update on the finance. We have successfully placed a EUR 453 million primary ABB last year. It was the second largest ever primary ABB in Italy in terms of portion of share capital further also including the precommitment from our core shareholder for EUR 130 million. The book was multiple times oversubscribed, thanks to the strong interest from new high-quality international Italian investors as well as substantial support from current shareholders. We have now also signed a EUR 1.35 billion senior loan with 24-month tenure up to June 2028, allowing for high flexibility of execution of the takeout via bond or bank financing.

With that, I'm glad to hand over to Enrico for the outlook and final agreements.

Thank you, Gabriele. So we have come to the end of today's presentation. As I mentioned throughout 2025, we executed a series of meaningful initiatives and made a significant and targeted investments aiming at accelerating future revenue growth and structurally improving the profitability.

In the first half of 2026, we saw the benefits of this tremendous work carried out by the team and materialize both in terms of organic growth and profitability. Importantly, momentum built progressively throughout the first half with a clear acceleration in the second quarter. Looking ahead to remainder of 2026, we continue to expect a global market demand to grow by around 3%. In this backdrop, we are confident in our ability to continue outperforming in most of our key countries and markets, driving the further market share gains. In fact, the positive momentum we experienced throughout the first half continued into the beginning of the third quarter. As a result, we remain very confident in achieving our goal of an organic revenue growth above 3%, reestablishing a solid and sustainable growth trajectory.

At the same time, we remain on track to achieve our profitability target with an expected improvement in adjusted EBITDA margin in the region of 100 basis points. Last but not least, as we continue to progress through the customary regulatory review process, I am pleased to provide a brief update on the proposed acquisition of GN Hearing. Our integration planning continues to progress very well. Our team is fully mobilized to ensure day 1 readiness in full compliance with all the regulatory requirements while focusing on positioning the combined business to unlock the substantial value creation opportunities we see ahead. The more we advance in our planning and preparation, the more excited that we become of the compelling strategic rationale of the transaction and its ability to create a significant long-term value for our customers, employees and shareholders. We, therefore, look forward with great confidence and enthusiasm to completing the transaction and beginning on the next phase of our growth journey.

With this, Francesca, over to you.

Thanks, Enrico. I kindly ask operator to open today's Q&A session. [Operator Instructions]

[Operator Instructions] First question is from Hassan Al-Wakeel, Barclays.

I have a couple on organic growth and the improvement that you're seeing in the second quarter. Firstly, if you can talk to the strength in the Americas business, particularly given your commentary of 1%, both in the reference market and unpack what is driving share gains to your mind and the softness in the overall market? And then secondly, on EMEA, particularly the Southern European strength that you call out and what you're seeing in some of the other markets? And how you view the trajectory into against tougher comps? And what you put the improvement down to? Is this pent-up demand coming back?

Thank you for the questions. So we -- of course, we are very pleased with our organic growth, which was very strong in all the 3 regions. Starting with your question about Americas and the U.S. what we have seen with regards to the market growth in the U.S. is a market going at 2 different speeds. What I mean is that the market overall was up about 1%, but we also saw a very solid growth in the private market, which grew by more than 4%. As you know, the private market is very important for us.

And why on the other side, we saw an insurance market down by a similar amount by about 4%. So what is, in my opinion, encouraging about the market growth in the U.S. is the fact that we saw a solid growth in the private channel. Also, what I would like to mention is that Q2 of last year was the strongest of 2025. And therefore, the comparison base was the most challenging for the U.S. market. With regards to our performance, I'm very pleased with our growth -- organic growth in the U.S. we outperformed clearly the market in all the 3 business units, starting from the franchise direct retail, but also in the managed care business unit. We also posted a very good growth in LatAm.

But in general, I would say that I'm very pleased by the work done by the team there because we delivered strong growth across all the different businesses. With regards to Southern -- with regards to Europe and your question about Southern Europe, I would say this today -- I mean, this year, we see a more normalized mix of markets. As you may recall, last year, the growth of the European market, especially in unit terms was driven mainly by France, whilst we mentioned a few times the softness in Southern Europe. This year, we see a more balanced growth. So South Europe, Italy, Spain, Portugal performing in a solid way. We see France instead coming back to normal level, let me say that clearly, since we are anniversaring the strong growth of last year. Now we see France coming back to a normalized level of market demand.

So let me say that we see this year a more normal -- more normalized market development across all the different markets in Europe. I'm very pleased also about our performance in Europe because we have outperformed the market almost everywhere. And of course, this is something very, very important to us.

Next question is from Veronika Dubajova, Citi.

This is [ Gabriella ] on Francesca. I'm going to keep it to 2, please. One, I just wanted to see if you felt there was any impact from the weather either towards the tail end of Q2 or if you're seeing any disruption related to the third quarter that we should be sort of thinking about as we look at the comps, look at the momentum, if there is anything there that is worrying you on that front.

And then looking at the full year guidance on the EBITDA margin, you've delivered 80 basis points of margin improvement in the first half of the year presumably as we move into the back half of the year. Obviously, we have more acceleration from Fit4Growth from some of the divestitures. Just curious what your confidence is in the 100 basis points and whether there might be some room for upside surprise relative to that as we progress through the rest of the year.

Thank you, Veronika. So yes, the weather, we saw some impact from the weather, in particular, in the last 10 days of June. And in particular, I would say, in countries like France and Germany. So let me say that our performance could be even better if we did not experience this kind of phenomena, which unfortunately, I think we must get to used to. So yes, definitely, we saw some impact, but -- and therefore, the results could have been even better, but I think that at the end of the day, we managed it well. And of course, we are very satisfied about the overall growth.

With regards to the second question and for EBITDA margin outlook. It is -- I think it's important to underline and highlight 2 things. The first one is that we will have a more favorable comparison and this definitely will help. Also, for once, let me also underline our performance at EBIT level, which was very, very strong basis points better than last year, which is also a reflection of operating leverage, of course, but it's also the result of our fit-for-growth program because as you know, also has effects of the closure of nonperforming stores, we are also making savings and events, which are definitely helping the EBITDA margin. So also, we are very pleased about what is coming from Fit4Growth below EBITDA margin because also we are saving on rents, and this will end has already delivered an impact on EBIT margin.

That's very clear, Enrico. Do you think you can quantify the weather impact or it's very hard to do at this stage if you're willing to put a number on it?

Is very difficult. It's very difficult. The impact that we saw was more in France and Germany than in South Europe because South Europe last year was exactly the same. So let's say, we were anniversarying the heat wave of last year, whilst it was particularly, I would say, different and harsh in France and Germany. So there, the impact was bigger.

Next question is from Andjela Bozinovic, BNP Paribas.

I also have 2. The first one is on the guidance. I was wondering, after the 2 quarters in, can you quantify a bit more your guidance on the organic growth part? What does the above 3% market growth mean, just having in mind what you have delivered in the past 2 quarters? And the second one is on your comment on the current trading. Can you give us a bit more detail what are you seeing in different regions and if the Q3 is acceleration versus Q2?

Thank you. Thank you for the questions. So with regards to our guidance regarding organic growth. Today, we stick to what we said in -- after the Q1 results, which means that we are envisaging an organic growth above 3%. Clearly, as of today, we are ahead of that because in the first half, we delivered 3.5%. So there is the opportunity, of course, to do well in terms of organic growth.

Now we are in the third quarter. We have started well. There are some months still ahead of us. September is a big month. But let me say that definitely we are very confident in our ability to deliver this organic growth above 3%. Let us finish third quarter before giving you a more, let's say, precise indication about that, but we feel very, very, very confident on organic growth. With regards to current trading, we saw the momentum that we saw in Q2 to continue in -- also in this beginning of Q3. So -- and this is, of course, very encouraging. I can't give you a target for Q3, of course. But I think that the kind of trend that we are seeing is confirming that all the actions, initiatives or sometimes even painful initiatives that we had to take last year are delivering what they were supposed to deliver, and this makes us very confident also in our confidence for the entire 2026.

Next question is from Julien Ouaddour, Bank of America.

I have a couple as well. The first one is on inflation. I mean I was just wondering what is the scenario for inflation in 2H and for 2027? I know that in the past, you've been, let's say, strictly not impacted by that on a pure cost inflation for the COGS. But I mean, what about rents? What about salaries? And I mean, what have you baked basically in your base case? So that's the first question.

And the second one is what feedback are you receiving from independent wholesale customers of GN Hearing about being supplied by a manufacturer like potentially in the future owned by the largest global retail comps. So just wondering if you already have a sense about what the customers think. And if I can try as well, how do you just quantify the mix of GN Hearing, which is tied to these independent clinics and any risk for that?

Sorry, the mix of the GN Hearing related to what?

Like the independent clinics like everything, which is not, I mean, tied to a large group.

Okay. No. Well, this second question, Julien, I can't give you an answer, what I mean is that we are still in the process between signing and closing, of course, and I can't really give this kind of information for now. But of course, I will be very happy to deep dive as soon as we get to the closing. But as we said many times, we expect by the year-end, and this is as of today confirmed.

With regards instead to into the question regarding inflation, we do not expect this time impact -- material impact from inflation for sure, not on direct procurement, not even from indirect not from rent. So not even something particular in terms of labor costs. So I would say that so far, we are not concerned about inflation pressures.

Next question is from Oliver Metzger, ODDO BHF.

First question is on Fit4Growth and also the magnitude for the next quarters. So you mentioned Q3 India closure will come. So where do we stand with regards to the Fit4Growth headwind? And to which extent it will intensify? Second quarter is about your performance in China, which you described as pretty strong. So that's in contrast to all the comments we heard over last quarter where China was a very tough environment. So do you see now with Q2 a fundamental return to better? Or is it just like driven by low base, et cetera?

So I will start with the second one. So with regards to China, I think that we are performing extremely well there. We have grown in a very, very solid way. I think that organic growth in China was high single digit for the quarter. So a very strong performance in China. We are very happy. I think that the team there is working very well. I assume in China, it's very difficult to estimate the market. So we assume that also the market is showing improve the trend. But again, this is really according to our estimates.

With regards instead to the first question, so Fit4Growth, yes, of course, first of all, we are very happy about our execution of all the initiatives that you know very well. They are going even ahead of our plan. We have also announced the divestiture from India. So the impact of fiscal growth will be a bit more, I would say, but this is, of course, a positive news. It will be more or less in the region of 3%, 3.5%, more towards the 3.5%, I would say. But of course, this is something that it's positive. It's demonstrating also our ability to deliver the initiatives that we indicated in our Fit4Growth program.

Next question is from Martinien Rula, Jefferies.

It's Martinien from Jefferies. I would ask 2. Amazing. First one, and first of all, congrats on the print. I would appreciate to push you a bit further on the margin guide, especially. I would love to hear your feedback on the rationale for not, let's say, probably having trimmed up the margin guide, given you've already delivered an impressive 90 bps margin improvement in H1, while arguably the H2 margin comp is easier and that you will have also the Fit4Growth contribution likely to be ramping up further? And the second question, we could tackle that one after that will relate basically to the performance you've made and where you've gained the most share and so on.

The most -- sorry, again.

For the second one, sorry, it's about the organic sales growth performance that you've made. You've commented on having gained share almost across the board with the only exception of some European markets, I'd like to have some feedback on that, please?

Okay. Well, with regards, yes, to -- with regards to the second question, so our market share gains. We are confident also because we have posted a very strong organic growth. We have -- we are very confident that we have gained market share in the markets that I mentioned earlier on, so including the U.S., in Europe, Italy, Spain, definitely, we have grown share. In Asia Pacific, definitely, we did a fantastic performance also in Australia, and we are confident that we have we have grown share.

With regards to the other 2 main markets in Europe, it's difficult to say about France because France now is a market that is not very easy to predict and we do not have the final numbers for Q2. In France, I would say that most probably we have performed in line with the market not losing, not gaining share. Also, with regards to the other markets, so Germany, maybe there we have performed slightly below our estimates regarding the market, but nothing that is of concern for us, sometimes.

Next question is from David Adlington, JPMorgan.

It would be great if you could just help us to break down the margin improvement contributed from Fit4Growth and how much was some operating leverage. I'm not sure if you're able to do that or not. And the second one is the U.S. private market. I just wondered if you thought that was benefiting from the slowdown in the insured where uninsured patients -- we had insurance were now coming back into the private market.

Yes. Well, with regards to the second question, so the market growth in the U.S., clearly, we see a trend which is consolidating, which is about the insurance channel declining whilst we see a positive and I would say, even stronger growth in the private market. Since the beginning of this trend, we mentioned that we would expect some patients going from insurance to private. So I think that there is some kind of some kind of shift from one channel to the other to quantify it is very difficult. Also, it's pretty difficult to quantify, which was the contribution of the 90 basis points from a Fit4Growth and from leverage. So I can't really give you numbers attached to that.

Next question is from [indiscernible], Equita.

I have a follow-up question on the U.S. insurance market. I would understand if the market is still contracting sequentially or if after maybe a sharp drop in '25, the market -- the insurance market stabilized and then we should expect a kind of improvement in the second part of the year. And the second question regarding the third quarter evolution. You mentioned quite a reassuring start to the quarter. So I assume July was good. How much is typically the mix between the 3 months of the quarter? I assume September is the most important, but just if you could help us to quantify a little bit month by month.

Yes. Well, I don't have in my mind, unfortunately, the exact, let's say, percentage of the contribution of individual month to the quarter, but you are absolutely right. September is the biggest month in the quarter, than July and then, of course, August is the smallest. But anyway, July is a meaningful month, but September is even bigger than July.

With regards to the first question and therefore, the performance of the insurance market. In 2025, the insurance channel declined by 3%. In Q1 was particularly soft with a minus 6%. And in Q2, as I mentioned during my introduction, the decline was about 4%. So it's difficult to see a trend there. But I would say that this is not necessarily a negative news because as I mentioned before, some of the patients are moving to private. I would expect the insurance market maybe improve a bit for -- in the second half because of the comparison base, but not so much. So I still expect the private market to lead the growth of the U.S. also in the second half.

Next question is from Niels Granholm-Leth, DNB Carnegie.

A couple of questions related to your Fit4Growth program. Firstly, can you elaborate on the expected number of store closures during the second half of this year? And will second half of this year end the store closure program included in the Fit4Growth program? And also, I mean, what are the prospects of you ending the Fit4Growth program before time, so before the end of '27?

Yes. So with regards to Fit4Growth, as I mentioned, we are, I would say, ahead of our plan. as of as of H1, so including, of course, the actions we have taken last year. We have closed a group level about 200 stores. And for, let me say, for the completion of the Fit4Growth, we envisage a number of stores in the region of 250. So let me say that we are almost there. So that's -- these are the numbers at group level. I don't have in my mind for Europe. But as you know, this is an initiative which is a pretty wide spread across all the 3 regions.

So what would be your -- the prospects of you ending the Fit4Growth program before the end of '27?

Yes, yes, of course. I think that by the year-end, we will have completed, let me say, the extraordinary part of Fit4Growth, and then we will continue, of course, to optimize our network, but this will be on a more normalized activity levels.

So the number of restructuring costs to Fit4Growth for growth in '27 should be very minimal?

Oh, yes, absolutely, very minimal.

Next question is from Susannah Ludwig, Bernstein.

I have 2, please. The first, I guess, you've helpfully quantified your expectations for the impact for Fit4Growth. I think previously, you had talked about an M&A contribution of 0.5% to 1%. And just wanted to know if that was still your expectation. And then second, on the U.S., I guess, could you remind us what your exposure is to managed care versus private pay now that you've exited the large MA contract at the beginning of the year.

Yes. You asked for the -- our exposure to the insurance channel, right, in the U.S.?

Yes. So with regards to the first question, and therefore, the contribution from M&A to our sales growth. It will be exactly what you say, so in the region of 0.5% to 1%. Whilst now our exposure to manage insurance channel. Now of course, it's much lower than before. It's in the region of 10%. Of course, of the U.S., not of the entire region.

Next question is from Giorgio Tavolini, Intermonte.

The first one is on customer trends. So I was wondering behind the impressive level of organic growth in EMEA. If you could provide any color on the mix between returning customers and new customers. And if you are seeing in that sense with the existing customers and normalization of the replacement cycle in the [indiscernible]. So in the past, you talked about an extension of the cycles.

The second question is on the planned reorganization of the non-EU activities that you mentioned in the press release. I was wondering if technical step to facilitate the GN Hearing acquisition so to ensure compliance, I don't know with local regulation or if it's something that basically provide you greater flexibility for future expansion on the partnerships, M&A outside Europe?

Thank you. And of course, I'm very happy to answer the first question, and I'm even more happy to ask Gabriele the second question because it's a very technical thing. So -- but now, with regards to the first question, and therefore, the mix of customers, I think that now we are seeing a more normalized level of customers between, let's say, returning customers and new customers. I would say that both segments were very strong in the second quarter. And therefore, I would say that now we see a more normalized market. With regards to the second part of the question, I would ask Gabriele to give you some additional information.

Absolutely. No, Giorgio, as you said, I mean, it's exactly that we wanted to start the reorganization of the group by a pure -- I mean, company point of view in order to better prepare for the prospective acquisition of GN. So the group today has a very simple organization at one level, we really want to operate some sort of, let's say, segmentation of the different participation of the group. But again, it is meant to better organize it by several point of view not to prepare for strategic partnership, as you were pointing out in the second part of your question.

Next question is from Veronika Dubajova.

I just wanted to clarify your comment about the Q3 momentum because I think in your prepared remarks, Enrico, you said it was consistent with the H1 momentum. But I think in one of the questions, you said it was consistent with the Q2 momentum. So I just wanted to understand whether it's tracking more towards the 3.5% or the 4.5% to 5% that you're seeing in July.

Well, I can't give you a number. Of course, my indication was a qualitative indication and what I said is that the kind of trend that we see is showing a positive momentum I can't tell you if it was more in, let's say, with -- in relation to H1 or Q2. But let me say, it's -- what we see is positive. It's positive. And this is, of course, very encouraging. Of course, as I said, Q3 is also a stronger quarter. September is strong month. So I wanted to see also this consolidating throughout the quarter. But it was more a qualitative comment about the fact that we are happy about how the quarter passed.

Can we have our last question, operator.

Last question is from Martinien Rula, Jefferies.

Yes. Thank you for the follow-up question. I would just love to get a sense of whether you could comment or not actually on the Fit4Growth contribution. And I'm talking about it from a margin perspective in H1. And if you could also comment on the differences in terms of trading day for Q3, that would be amazing.

Yes. So trading days will be similar, I mean, 0. It was the case in Q2, and it will be the case in Q3, and it will be the case as far as I remember also in Q4. So trading days are not going to have either a positive or negative impact going forward. With regards to the impact, I mean, the contribution of Fit4Growth to our margin improvement, as I said, I can't really give a quantification of that. But of course, we have had definitely a good contribution coming from that already in Q2 and also we expect the same in Q3 and Q4. Thank you, everyone. Thank you.

Thank you. I kindly ask Alicia to disconnect, and thank you, everybody, for the interest and attendance.

Thank you.

Thank you. Bye.

Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.

Good evening. This is the Chorus Call conference operator. Welcome, and thank you for joining the Amplifon First Quarter 2026 Results Conference Call. [Operator Instructions]

At this time, I would like to turn the conference over to Ms. Francesca Rambaudi, Investor Relations and Sustainability Senior Director of Amplifon. Please go ahead, madam.

Thank you. Good afternoon, and welcome to Amplifon's Conference Call on First Quarter 2026 Results. Before we start, a few logistic comments. Earlier today, we issued a press release related to our results, and this presentation is posted on our website in the Investors section. The call can be accessed also via webcast and dial-in details are on the Amplifon's website as well as on the press release. I have to bring your attention to the disclaimer on Slide 2 as some of the statements made during this call may be considered forward-looking statements.

With that, I'm now pleased to turn the call over to Amplifon's CEO, Enrico Vita.

Thank you, Francesca. Good afternoon, everyone, and thank you for joining us also today. I'm very pleased to share our first quarter results, which show a strong performance, and we believe a clear inflection point for the business. In fact, we have returned to solid organic growth and significantly improved the profitability across all our 3 regions. What is particularly rewarding for us is seeing our work actions and investments over the past year come together to deliver tangible results.

Even more promising is the momentum that we observed throughout the quarter. Organic growth progressively strengthened and had a very positive start in April, reinforcing our confidence that the direction that we have taken is the right one and is now starting to deliver the outcomes that we expected.

But let me begin with a brief overview of the global market environment where we are also seeing a positive and promising developments. In the U.S., the market grew by approximately 3%, a material improvement in comparison with the last quarter, especially because supported by a solid private pay segment at circa plus 6%, which more than offset the continued softness in the insurance channel at circa minus 6%.

Also in Europe, we are seeing the positive and encouraging market development. Importantly, in our core markets like Italy and Spain, we are now seeing clear and strengthening signs of improvement. As we have consistently indicated, we expect the European market to gain momentum aggressively, supported by solid underlying demand drivers and the normalization of market conditions. As you know, we also believe that the relatively muted performance seen in recent years compared with historical levels has led to a degree of pent-up demand that is probably now beginning to materialize.

In APAC, based on our estimates, all the markets in which we operate delivered overall a more positive dynamics with also China showing gradually improving trends. Overall, we estimate that the global market grew in units by a solid and encouraging plus 3% in the first quarter in line with our expectations. In this backdrop, we have outperformed in most of our key markets, including, in particular, the U.S., Italy, Spain and Australia.

Turning to revenues. Organic growth was at plus 2.2%, representing a solid performance with a clear acceleration throughout the quarter, particularly visible in the EMEA region. The impact of our Fit4Growth program, our revenues in the quarter was approximately minus EUR 2.4 million mainly reflecting our portfolio optimization actions, including the clinic closures the U.K. divestures completed in early March and the termination of a managed care agreement in the U.S. at the end of 2025. In addition, M&A contributed by plus 1%, primarily driven by the carryover effect from acquisitions completed last year.

Turning then to profitability, we achieved our highest-ever first quarter adjusted EBITDA margin with an increase of 60 basis points compared to last year supported by operating leverage and also by the early results of our Fit4Growth program. This increase is particularly noteworthy given the Q1 -- that Q1 2025 had already set a very strong benchmark in terms of profitability. Overall, we are certainly satisfied with our results delivered in the quarter. They confirm the strength and the validity of our initiatives and the investments made last year, and they give us confidence in our outlook for the remainder of the year.

With that, I will now hand it over to Gabriele, who will walk through the financials more in detail.

Thanks, Enrico, and good evening to everybody. Turning to Slide #4, we'll have a lot at our financial performance in Q1 '26. Revenues were up 0.8% constant FX versus Q1 '25 with a solid organic growth of 2.2%, improving 160 basis points over Q4 2025. And I'm glad to say that all regions posted a positive organic performance in the quarter. The bolt-on M&A made primarily in 2025, contributed 1% to topline growth. Fit4Growth had an impact of around minus 2.4%, following the closure of around 190 nonperforming clinics since the launch of the program [indiscernible] on which during Q1. The divestiture of the U.K. business in early March, the termination of a managed care agreement in the U.S. from January 1 and the rationalization of the wholesale business in China since Q1 last year.

FX was a headwind of minus 2.2%. Adjusted EBITDA was EUR 142 million, with a record Q1 margin of 24.5%, an expansion of 60 basis points over the high comps of Q1 '25, which was 20 bps above Q1 '24. This improvement was driven also by the earlier results of the Fit4Growth program and after ongoing investment in marketing to further strengthen the company's distinctive assets. Here, again, all the regions contributed to this very positive performance.

Moving to Slide 5. We have a look at EMEA performance. In the quarter, revenues were flattish at constant effects with a positive organic growth at plus 0.3%, which accelerated throughout the quarter with strong momentum building in our core markets, Italy and Spain. The bolt-on M&A made primarily in 2025, contributed for 0.7% to topline growth.

[Technical Difficulty]

Ladies and gentleman, please hold the line the conference will resume shortly. This is the operator. The line is connected is now connected.

Okay. Thank you. So we shall start again from the beginning of Slide #5, not sure when we were disconnected.

Okay. Starting from Slide 5, we have a look at the EMEA performance. In the quarter, revenues were flattish at constant FX with a positive organic performance of plus 0.3%, which accelerated throughout the quarter with strong momentum building in our core markets, Italy, and Spain. The bolt-on M&A, primarily in 2025 contributed for 0.7% to topline growth. Fit4Growth had an impact of minus 1.1% following the closure of 25 clinics in Q1 and the carryover from the clinics closed in 2025 and following the divestiture of the U.K. business in early March. FX was a slight tailwind of plus 0.2%. Adjusted EBITDA was EUR 116 million with margin at 30.3%, 90 basis points above the record level of Q1 '25, which was 40 bps higher compared to 2024. And this was also thanks to Fit4Growth after the ongoing investment in our distinctive assets.

Moving to Chart 6, we have a look at the performance of Americas, Revenue growth in the quarter was 1.1% at constant FX, while FX headwind was at minus 9.7%. Organic growth was a super positive, well above market, 6.7%, thanks to the strong broad-based performance recorded in all the markets and businesses in the region with significant market share gains. The bolt-on M&A made primarily in 2025, contributed for 1.9% to topline growth. Fit4Growth had an impact of minus 7.5% following determination and managed care agreement in the U.S. from January 1, and the closure of 3 clinics in Q1, together with the carryover from the clinics closed in 2025. Adjusted EBITDA was EUR 25.2 million, with margins up 80 basis points to 23.3% versus 22.5% last year, also thanks to the early results of Fit4Growth and after the ongoing investment in our distinctive assets.

Moving to Chart 7. We have a look at the Asia PAC performance. In the quarter, revenue performance was plus 4.6% at constant FX, driven by strong organic growth of 4.8%, improving 400 basis points over Q4 '25, thanks to the broad-based contribution of all markets across the region. The bolt-on M&A made primarily in 2025 contributed 0.8% to topline growth. Fit4Growth had an impact of minus 1%, following the closure of 2 clinics in Q1, together with the carryover from the clinics closed in 2025 and the rationalization of the wholesale business in China since Q1 last year. Adjusted EBITDA reached EUR 24.2 million with margin at 27.7%, 50 basis points higher than the 27.2% recorded in Q1 '25, also thanks to Fit4Growth and even after the fast growth in China.

Moving to Slide #8. We appreciate the Q1 income statement. In Q1, total revenues came to EUR 580 million, an increase of 0.8% at constant FX versus prior year. Adjusted EBITDA was EUR 142 million, with a record margin of 24.5%, 60 basis points above last year, also thanks to the early contribution of Fit4Growth, G&A, excluding PPA, were a EUR 64 million decreasing by over EUR 2 million versus EUR 66 million in Q1 '25. This led the adjusted EBIT to EUR 78 million versus EUR 74 million last year. Net financial expenses amounted to EUR 14.8 million, slightly below the EUR 15.1 million in Q1 '25. Tax rate was flat year-on-year at 29%, leading to an increase of around 7% in adjusted net profit from EUR 41.6 million last year to EUR 44.4 million in '26.

Moving to Slide 9. We appreciate the cash flow evolution. Adjusted operating cash flow after lease liability was in the period equal to EUR 44.5 million versus EUR 52.1 million last year. Net CapEx decreased by around EUR 10 million to EUR 21 million in light of the Fit4Growth program leading adjusted free cash flow to EUR 23.6 million versus EUR 20.6 million in Q1 '25. In Q1 '26, we had the net proceeds from divestiture, including the U.K. dilutive business for around EUR 10 million versus a net cash out for acquisition for EUR 41 million last year. This, together with no share buybacks in the period led to net cash flow for the period to positive EUR 27 million versus a negative EUR 31 million in Q1 '25. As a consequence, net financial position improved to EUR 1.015 billion versus EUR 1.045 billion at the end of 2025.

Moving to Slide 10. We have a little debt profile trend and key financial ratios. As mentioned, the net financial debt ended slightly above EUR 1 billion with liquidity accounting for EUR 310 million, short-term debt accounting for around EUR 710 million and medium long-term debt accounting for around EUR 615 million. Following the IFRS 16 application, lease liability were around EUR 485 million, leading the sum of net financial debt and lease liability to 1.5 billion.

Equity and [indiscernible] EUR 1.08 billion. Looking at financial ratios. Net debt, excluding lease liabilities, over EBITDA improved to 1.84x versus 1.92x in December 2025 in line with our target to deleverage the company in light of the prospective acquisition of GN Hearing. To this regard, please let me give you an update on the financing. We have now closed the syndication of the senior loan with a 24-month tenor from signing of the facility expected in the next few weeks allowing for high flexibility of execution of the takeout to a mix of debt and equity. Hence, we are not in rush to execute it.

As far as the equity portion, please let me reiterate that they're up to EUR 750 million equity raise indicated at the announcement was the maximum amount calculated backward in order to maintain a very conservative net leverage, including lease liability at 3x at closing, so slightly higher than the current leverage. And this ratio excludes any kind of run rate synergies. Therefore, we can reduce the amount of the equity raise without affecting the financial flexibility of the Group. For example, even if you execute half of the maximum amount, our leverage ratio would move up only by circa 0.5x with no substantial change in the rating guidances financial profile. Furthermore, considering also run rate synergies we would be just slightly higher than 3x, including lease liability at closing.

I will now hand over to Enrico for the outlook and final commentary.

Thank you, Gabriele. So we have come to the end of today's presentation. And let me take a step back and connect to what we are seeing today with the actions we have taken over the past year. As said, we believe we have reached an inflection point in our performance throughout 2025, we executed a series of meaningful initiatives and made the targeted investments aimed at accelerating the future revenue growth and structurally improving profitability. These actions were proactive and designed to strengthen the business and position us for sustainable long-term performance.

In the first quarter of 2026, we are already beginning to see the early benefits of these efforts materialize, both in terms of organic growth and profitability. Importantly, we observed strong momentum building throughout the quarter, which continued to accelerate into April and also May in terms of trial activations. This give us increasing confidence that our plan is gaining traction.

Looking ahead to the rest of 2026, we see a supportive and improving environment. We confirm a progressive recovery in the market demand with global growth in the region of 3%. Within this context, we are confident in our ability to continue outperforming in most of our key markets, driving further market share gains. This will translate into a strong improvement in organic growth with levels exceeding plus 3% hence restoring a solid growth trajectory. At the same time, we anticipate a meaningful step-up in profitability supported by operating leverage and also by the continued execution of our Fit4Growth program with an expected improvement in adjusted EBITDA margin in the region of 100 basis points.

Additionally, as we advance through customary regulatory review, I am pleased to share a very brief update regarding the prospective GN Hearing acquisition. We have already initiated a full-scale internal integration planning, and our teams are fully mobilized to ensure day 1 readiness aligned with our regulatory obligations and to position ourselves to capture the significant value creation opportunities we envisage. Finally, looking beyond 2026, we are highly confident and excited about our prospects.

We see a clear path to sustained profitable growth, further strengthened by the transformational acquisition of GN Hearing. Francesca, over to you.

Thanks, Enrico. I kindly ask the operator to open for Q&A session. [Operator Instructions]

Thank you for your cooperation. Now I turn to the operator.

[Operator Instructions]

First question is from Hassan Al-Wakeel from Barclays.

A couple. Firstly, can you please comment on the dynamics you're seeing in EMEA, which was a bit of a softer region in today's results and particularly France, which you don't call out. What are your assumptions here for growth for the full year as comps get tougher in the second half? And you very helpfully mentioned where you think you're gaining share. Where do you think you're losing share in EMEA and more broadly?

And then secondly, on the margin, if you can just talk to the building blocks and confidence you have in now increasing your margin by 100 basis points, whether it's a function of Fit4Growth or better Q1 or both. Just curious on timing given some of the macro uncertainties. And I guess, to that end, if you could talk to the impact you're seeing from inflation, or the impact you expect to see later this year or next?

Thank you for your very articulated question, so I will try to answer to all the different points that you have raised with -- in terms of dynamics in the EMEA, we are very encouraged by the kind of trend that we have seen in terms of market, but also in terms of our performance because what we have seen was a slower start in January, but progressively throughout the quarter, we have seen also clear signs of improvement with strong momentum building, in particular in some of key markets for us, like Italy and Spain.

And I think that this is a very good news for us. I think you know very well that the market growth last year of these 2 markets, which are fundamental for our performance in the EMEA region last year was not great. So to see this kind of trend, both in terms of market, but also in terms of our performance is very positive for us.

With regards to France, we have, according to the official data, the French market was very positive in terms of units in the first quarter. It is also true that you have when we compare our sales with the growth of the market in units, we have also to take into account the fact that given the mix change between Class 1 and the rest of the market, of course, the growth in terms of value is much, much less. In terms of forecast for the year at this stage is difficult to say, but clearly, from the second quarter of this year, we will be anniversary the strong growth of last year. Anyway, we envisage a positive growth for the full year. You also made a reference to share gain or loss. I would say that in most of the markets in which we operate we think, as I mentioned during the call, U.S., Spain, Italy, Australia, not sure about Germany, but also -- but a part that we feel very good about our share performance.

With regards to France, please bear in mind that last year, most probably we anticipated the market, so now we are comparing ourselves with an anticipation in sales that we had last year. But overall, let me say that we feel very good about our ability to overperform in most of the key markets in which we operate. With regard to the last part of the question and in particular to the profitability improvement this quarter was, let's say, the most challenging one in terms of comparison base because we are beating record on record. What I mean is that last year, already our profitability was the record one for quarter one. And this year, we have again, increased our profitability, reaching, I would say, a remarkable profitability level of 24.5% EBITDA margin, which is very, very strong.

We envisage also to continue to deliver strong profitability increase going forward. And our confidence is coming from the fact that, as you can see from our outlook for -- in terms of organic growth, which is above 3%, we envisage a good, strong organic growth for the remainder part of the year. As I mentioned during my speech, we have already quite a good visibility about quarter 2, and we are very positive also by the momentum that we see in terms of organic growth. So we envisage the increase in terms of profitability coming partly from operating leverage, but also from the execution of our Fit4Growth program, which will deliver increasing results going forward.

Next question is from Andjela Bozinovic from BNP Paribas.

I have 2. The first one is on guidance. And the second one, just on the GN deal. So on the guidance, I understand that the above-market growth of about 3%, that's guidance for the organic part. But can you give us an indication on what should we expect for the Fit4Growth parameter and the scoping impact for the group for the full year? And the second question is on the GN deal. So assuming that the deal closes by the end of the year, could you discuss what theoretical rate do you expect to secure financing at just given the rates are very uncertain at the moment. Is this already set?

You mean interest rates?

Yes, exactly.

Okay. So I will answer to the first one, and I will let Gabriele to answer the second one. So with regards to the first one, as you can see, in the first quarter, we believe that the impact of Fit4Growth was minus 2.4%, 2.5% and this is more or less slightly above will be the impact for the year. You can assume between 2.5% and 3%. With regard to M&A, you can consider a positive impact of about between 0.5% and 1%, I would say, more towards the 1%, mainly driven by the carryover, which, yes, will be around 1%. And then you can also assume an organic growth that at the moment we have identified in above 3%, and then we'll see throughout the year. With regards instead to the...

The debt rate, of course, it's difficult to say how much is going to be the IRS 7 year. As you know, it was much lower a couple of months ago. And then today, it stands at around 2.9%, 3.0%. So let's say, let's see how the interest rate is going to move, I mean the IRS. For what concern our spread I mean the deal is going to be a BB+ bond for sure because, I mean, regardless of the amount of capital raise. We made the example before either 750 or something much, much lower we're going to end up below 4x leverage, including lease liabilities. So this standard will improve our business risk profile potentially, we can say regardless of the [indiscernible] in the BB+ area.

Last time it was [indiscernible] record of 140 bps spread, which is going to be difficult to be achieved. But in any case, [indiscernible] [ 160, 170 ] so depending on the area, we call it interest rate at which we aim to finance the bond assuming 7 years, of course. Probably -- given the amount, sorry, probably since we will put together the debt financing of the operation, plus our bond power is going to be a couple of tranches with different maturity. We also have the opportunity to sign a loan portion with I mean the pool of the banks, which were very willing to syndicate the current, let's say, the former bridge financing to a senior loan. So let's say that also on the best part, we are not very much scared.

Okay. That's very clear. But just to confirm, that is not already signed, like the interest rate is not already signed.

No. I think the interest rate today is the interest rate, which will lead us to the senior loan up to the takeout, which will be done through equity and that. So basically, this is the amount of money we have available in order to close the deal, in order to pay the EUR 1.7 billion cash to GN. Of course, our aim is to take it out through equity and debt. So the debt is going to be partially or large majority DCM and the portion maybe through that. I want to say that it was flexible. So of course, this is the financing for the closes, then we will have to refinance within the next 24 months.

Next question is from Veronika Dubajova from Citi.

I have 3, if that's okay. I hope I won't get in terrible with Francesca. But what is very sort of technical, so hopefully, it won't really count. Like 2 big questions, one just on the organic growth rate in EMEA. I just want to understand, I think the data that we've seen from demand, and I know it's for a different parameter, but they're sort of suggesting the European market were 2%, your organic growth rate is still tracking meaningfully below that. I know you've made some changes in leadership in a couple of the large markets. I guess, if you can maybe just comment on your performance in Spain, Italy, in Germany, in particular, and I guess France as well and how you feel like you're tracking against the market in those major markets? And is there anything else that you can do to improve that organic performance relative to market? That would be my first question.

My second question is around the financing structure for the GN deal and Gabriele, you alluded to that a little bit, but I'm just curious what your thoughts are around that EUR 700 million equity component given where the share price stands at the moment. And kind of what's your flexibility to get that leverage pretty close to 4x and maybe reduce that equity component? What your thoughts are on it at this point in time, given the market environment.

And then my third -- and maybe I ask my third technical one at the end because it's very boring, and I don't want to -- I don't want you to loose the train of thought on the other two.

Okay. So I will answer the first one, and then I will let Gabriele to answer the second one. With regards to the organic growth of the EMEA, what, in my opinion, is very important to underline is the fact that, as I mentioned before, First of all, we have seen a progressive strengthening of our performance throughout the quarter. And also, we have seen a very strong start of Q2, which makes us very, very positive, of course, also for the remainder part of the year. In particular, I think that what is positive for us is that we see very good signs of recovery, in particular our key markets like Italy and Spain.

And in fact, as I said, and as I mentioned, we believe that in this market, we performed very well, and we performed even above the market. And I'm super happy about the kind of performance that we are seeing in Italy and also about the turnaround that the team has made in Spain. We have seen a softer performance in France. As I said before, most probably because last year, as we also discussed during our quarterly results, most probably we anticipated the growth of the market with a number of initiatives, which started much earlier than the rest of the market.

So most probably, there is, let's say, a timing effect on this regard. But let me say to really summarize the fact that I'm becoming more and more positive about our prospects of organic growth in EMEA. As I say, the most probably, we are now both because of a more supportive market in the markets, which in the past were slower and important for us like Italy and Spain. We see traction there. This is very important to us. And most probably, overall, we see a supportive market in Europe probably also because of what we have been saying for long about the fact that some pent up demand anyway was building in the EMEA region, which was below the historical levels in terms of growth maybe starting to release. So to really summarize, I'm pretty confident and positive about our prospects of organic growth in the EMEA region.

With regards to the second part of the question, I leave to Gabriele.

Yes, yes, absolutely. No, Veronika, when we decided to, I mean, finance with an equity issue of up to EUR 750 million, we really took a very conservative, very conservative stance. Just to give you an idea, Today, if I include the lease liability, our current rate is at 2.7%. And when we solve the equation without including the synergy in order to land at -- we wanted to land at 3x. So just 0.3x additional leverage compared to where we stand today. So super conservative after a very strong -- very large acquisition with a lot of synergies without considering synergies.

What we did was, let's say, if you want to say, super conservative, we raise this amount of capital and will end at tax. With a combined EBITDA of EUR 750 million including Amplifon and GN in the synergies, you can assume that each EUR 750 million of additional debt represent net 1x EBITDA, 1x the additional leverage. So basically, if you assume for a second 0 equity raise just that we could end up at 4x following our calculation, then, I mean, they Standard & Poor, for example, includes some additional items, so for them, it would be 4.2x. So probably with 0 equity raise, we would end up at BB flat, which can be also something sustainable.

As you know, we are always very conservative. So frankly speaking, my belief is that something in the middle between 0 and EUR 750 million is probably the best choice today if market is positive. So if you ask me the same question, maybe at the share price of some months ago or one month ago, so 8% to 9% for sure and would have excluded any kind of equity issue. For the future, let's see at how the share price is going to evolve and when the market will be positive. I think my personal belief standing in the middle between 0 and EUR 750 million is the right amount. Again, we have a lot of flexibility in terms of timing. I mean, the single loan is basically in line for the next 24 months. So we are not at all in a rush, and I'm sure that we will see good market condition in order to raise this amount of money.

Next question is from Oliver Metzger from ODDO BHF.

The first one is about the indicated recovery in Italy and Spain. So you appear very optimistic, but it's my understanding that last year, in Q2, it was very weak in both countries, potentially somewhere at the minus 10% level. So would you describe the recovery already as fundamental or which role plays the low base in this Q2 for you? And the second question is about -- you named the potential pent-up demand of the market because of some slower growth over last years. Do you have any indications for this? Because when I look for the overall industry, everybody has something more muted expectations after some years with some slower growth. And it would be great to hear some more insights about that.

Thank you for the questions. So with regards to 2 key markets for us like Italy and Spain, I would say that I'm confident because we see a more supportive market. It is true that last year, they were -- they performed slower, but we see strengthening signs of recovery. Definitely, last year was not minus 10% as the performance was much less than that. They were negative, but not that much. So we see a more supportive market. But what I would like also to underline is the fact that we believe that the results that we are delivering and the kind of outlook that we are today sharing with you is not driven only by a recovery of the market, but it's also driven by all the work that we have done last year in order to improve our performance.

And we have done -- what I can tell you is that we have done a huge, huge amount of work starting from advertising and communication to the protocols and the operations in the stores. So I'm very positive because from one side, we see a more supportive market. On the other side, I can see the results of all the work that we did last year. And then with regards to the contribution of the pent-up demand that I mentioned. I said most -- I mean probably we are seeing now some pent-up demand.

Because at the end of the day, our services, products and services are not discretionary ones. So as I've been constantly saying, we expect that some pent-up demand has been built in the market. And sooner rather than later, this will be released. So I expect this and most probably part of it is starting to release now.

Next question is from Martinien Rula from Jefferies.

I would have 2 very quick ones if that's okay for you, please? The first one would be on the transaction with GN Hearing. I would be curious to hear your thoughts on whether you started to see some retaliatory measures from your comps in light of the transactions and would also be curious to hear your thoughts on the sort of discussions you currently have with commercial partners and especially in the U.S., whether it be on the insurance segments or with your franchisees? And the second question would be...

Martinien, sorry, we didn't hear the question. Can you please repeat?

Yes. The question would be on the transaction with GN Hearing and more specifically, whether you started to see some retaliatory measures from your comps. And I would be also keen to hear your thoughts on the some sort of discussions you have with your commercial partners, especially in the U.S. at the moment, whether it be on the insurance side or with your franchises? That's the first question.

Well, first of all, let me underline once again that, of course, we are going through all the regulatory approvals, in particular, antitrust, et cetera, et cetera. And therefore, there is, I mean, Amplifon and GN Hearing are going to act as 2 very separate companies until closing. So these kind of questions are not relevant to be honest, at the moment. So we can't really comment on possible discussions with third parties, et cetera, et cetera, because we are not having these discussions because we are very respectful of our obligations while a process is in place.

Okay. That's very clear. And the second one would be very quick and would be focused on managed care. So at the full year 2025 results you've announced the termination of a contract in that channel, given your comments on the insurance segment in the U.S. still being depressed at Q1, I would begin on hearing your thoughts on whether you are further considering measures to streamline sorry, your exposure there or not?

No. The answer to your question is no because now we have a more, I would say, healthy and balanced portfolio of customers, which we are happy with. So no, but it is a matter of fact that the managed care insurance channel continued to underperform in the first quarter. What is positive, I would say, for us, is that instead the private pay channel, which is the one in which we are more exposed actually was very positive. So that's in -- for us, is a good trend.

Next question is from Neils Leth, DNB Carnegie.

First question would be about the ongoing shift towards ITE hearing aids, and it seems like the manufacturers are making a push towards this category, which many years ago made up a much bigger part of the market. How would that -- such a trend affect your profitability in your stores? And my second question would be on your plans to convert Miracle-Ear stores from franchise stores to company-owned stores. How is the acquisition of GN Hearing affecting your plans to convert for Miracle-Ear stores?

Thank you for your question, very clear. So with regards to the first part, and therefore, the mix of ITE in our sales in retail, we are not seeing any significant shift year-over-year. So the mix has been more or less the same, I would say, now for a while. With regards to the second question and the conversion of some of our franchisees into direct retail. Of course, we have been very active in the past, acquiring many of our major franchisees. Of course, now in terms of M&A, the plan is to invest less in the coming months because, of course, the priority will be to deleverage given the GN prospective acquisition. Of course, if there will be some opportunity -- clear opportunities, we will get them, but more, let's say, on opportunistic fashion.

So if the trend towards ITE would get to your stores as well, how would you say that the profitability in retailing is between fitting ITE products and BTE products.

No, I don't expect any significant impact coming from that, not at all.

Next question is from Domenico Ghilotti, Equita.

Two questions. The first is on the Fit4Growth program. So if you can give us a sense of how much -- what is the contribution that you are expecting in the 100 bps profitability? And if you see upside looking at 2027 compared to your 150, 200 bps guidance? And second, just on the current trading. Is it fair to say that in Italy and Spain, in particular, in Q2 last year, you had a very quick June. So the comparison will become even easier entering into the last part of second quarter.

Yes. Well, I will answer first to the second question. And yes, yes, of course, in Q2, we will have some benefits coming from the comparison base of last year and most probably in June. So that also for -- this is also one of the reasons why, of course, we are very confident about our performance in Italy, Spain. But let me say -- let me underline once again, one thing that is for me very important, which is I believe that in many markets and including Italy, Spain, we are now seeing the result of all the work that we have done in last year.

And we have done a huge amount of work in many different parts of the business, starting from, for example, advertising, we see very strong results from our latest campaign, but we are also modifying our stores in order to be more proactive -- productive and to increase conversion rate. So Spain has shown a very, very strong trend in terms of performance. So I think that this year, these 2 markets will contribute very positively to the results of the company and of the EMEA region.

With the second question was about Fit4Growth. Yes, of course, we are very happy about Fit4Growth. As you know, I mean we are going full steam in all the different parts in all the different streams. So clearly, the 100 basis point is a combination of the Fit4Growth program, which had a limited impact in Q1, and the impact will increase in the next quarter. So -- and a combination of operating leverage, so we feel also very good about this target for the year, which will lead to a material improvement in terms of profitability coming back to more than 23.5%, 23.6% profitability in percentage. And so nothing particular to add about 2027, but a part of the fact that everything is going according to the latest plan that we shared with you.

Last question is from David Adlington, JPMorgan.

Most of them have been asked, but maybe just on the cadence of the growth through the first quarter, obviously sounds like better the quarter went on. I think you started in negative territory in January and then it got better, as you've got into April, I think you could be -- are you already tracking at more than 3% in April as you think about the second quarter?

Well, as I said, I mean, yes, you're right. I mean, what we have seen was a slow start -- slower start in January. And then we have seen progressive strengthening of our sales and we believe also of the market. And we have seen this momentum continuing, I would say, very strongly into April and also in terms of activation of trials, which are a good proxy of sales also in May. And this give us the confidence that we can definitely achieve very strong organic growth also in the coming quarter. And that's why also we have set as an outlook in organic growth for the year above 3%.

Sorry, I've noticed that there was still Susannah waiting on the line. So maybe we can have the last 2 questions from Susannah Ludwig.

Last question is from Susannah Ludwig from Bernstein.

I have one question and then just a quick follow-up to Veronika's on equity issue. I guess the first question would be on pent-up demand in the market that you think is starting to be released. What could you -- do you think can be a catalyst to release this. For example, all the major manufacturers are expected to release the product in H2? Could that play a role? Or on the flip side, inflation concerns, could that potentially have a negative impact on this release. So for example, are you seeing anything in the U.S. HIA April data that might make you concerned there? And then I guess the second is just a follow-up. You noted that if your share price was trading where it was 1 to 2 months ago, you would use much less equity. Can I ask on the flip side, if your shares are trading a lot higher, say, in the range of 12% to 13%, then is it more likely that you use closer to the maximum EUR 750 million in equity.

Yes, I would ask Gabriele.

Of course, I mean, in terms of pricing of the debt or price of the share, we cannot comment at the moment. I mean, we want to see a market supportive for an equity issue. And we believe that, I mean, if the market hearing aid is improving as it did during Q1, for sure, where we see much better situation than the current one.

Thank you. So this concludes today's call. Thank you all for your interest and attendance, and we kindly ask operator to disconnect. Thanks. Bye-bye.

Thank you. Thank you, everyone. Thank you. Bye.

Ladies and gentlemen, the conference is now over. You may disconnect your telephones.

Hello, everyone, and welcome to this conference call in relation to GN's announced sale of our Hearing business to Amplifon. Participating in today's call is our Chair of the Board of Directors, Jukka Pertola; Group CEO, Peter Karlstromer; Group CFO, Soren Jelert; and myself, Rune Sandager, Head of Investor Relations.

After the presentation, we will turn to a Q&A session. The presentation is already uploaded on gn.com. And with that, I'm happy to hand over to Jukka for some introductory remarks about the transaction.

Thank you, Rune. And also from my side, a warm welcome to everybody for this conference call, which is in connection with the -- for us, at least, very exciting news, which we have announced today. As you know, we have agreed to sell the Hearing business to Amplifon for a total consideration of DKK 17 billion. With this transaction, we are creating a global integrated leader in audiology with benefits for our patients, partners, employees and shareholders.

And for the remaining GN business, this is a very good opportunity to become a more focused technology innovation leader with attractive opportunities across markets in enterprise, gaming and defense. Fundamentally, the transaction will unlock a strong balance sheet, which enables continued investment to support the business while allowing for shareholder returns. All in all, we are very satisfied with the outcome of this transaction.

Before Peter and Soren, we'll dive into further details of the transaction, let me provide you with some important context for the process leading up to this. While we have significantly strengthened our strategic focus and execution capabilities across the group during the last few years. We have also received several unsolicited expressions of [ interest ]. In line with our fiduciary duties, we have, of course, assessed any such proposals as appropriate.

One of these proposals came from Amplifon. They came forward with a financially and strategically compelling proposal, combined with a high degree of deal certainty. After extensive deliberation and a thoroughful evaluation and assessment process, the Board of Directors, together with executive management unanimously decided to pursue and accept the proposal from Amplifon. We are convinced that this transaction is the best long-term interest of GN, our shareholders as well as the Hearing business. The agreement delivers significant future value creation potential for both organizations.

First of all, it creates an industry-leading player in global audiology while transforming GN into a more focused technology company, well positioned to further grow in large audio and video peripherals market. And we are confident that the transaction and steps ahead will be beneficial to our customers, employees and shareholders.

With this introduction, I will hand over to Peter and Soren, who will take you through the transaction and the impact on the 2 businesses in more detail. So over to you, Peter.

Thank you so much, Jukka. This is indeed a historic day for us at GN. Today, we are seizing the opportunity to create the global leader in audiology together with Amplifon, while we also, at the same time, further strengthening GN's position in the large audio and video peripherals markets, creating a more focused technology-driven innovation leader with a lot of opportunities ahead.

So before going into the strategic value of the transaction, let me just remind us all of what we are creating and many of you know, of course, this very well. Our Hearing business have done a fantastic job the last few years where we have been growing faster than the market for 4 years in a row, thanks to the great technology we have and recently with the success of ReSound Vivia. In '25, the business generated DKK 7.2 billion and delivered a healthy margin. This was achieved with a help of more than 5,000 employees across the world. On the other side of this transaction, Amplifon is the world's largest hearing aid retailer with around 15,000 employees and present in around 10,000 locations worldwide. In '25, they delivered total revenue of almost DKK 18 billion and had an adjusted EBITDA of DKK 4 billion. Over the years, we have developed a strong relationship with Amplifon, so we know them very well. We are confident that the -- we are confident that we, with this will be part of a responsible and trusted industry leader and this will secure the long-term future success of our Hearing business, its customers, partners, employees and also that this is very beneficial to our shareholders.

If we look at the combination of GN Hearing business and Amplifon, we are creating a fully integrated global leader in audiology. Together, we will offer comprehensive solutions to both audiology professionals and patients by combining the hearing technology leadership with high-quality innovative hearing care. The combined entity will employ more than 700 R&D professionals and hold close to 3,000 patents. This will also serve as a powerful growth platform with more than 20,000 employees, serving customers in more than 100 countries worldwide.

Following the closing, GN will have an ownership of around 16% of the current outstanding shares in Amplifon, which allow us to retain some upside also from the strong strategic value proposition of the transaction.

With that, let me go through a little bit of the details. The transaction values the Hearing business at DKK 17 billion on a cash and debt-free basis. This will be delivered in DKK 2.6 billion in cash and 56 million shares in Amplifon, corresponding to DKK 4.4 billion based on the share price closed Friday evening. Practically, as you know, Amplifon is listed on Euronext Milan. Part of the transaction, GN will be granted a Board seat in Amplifon following the close, which we expect to happen towards the end of this year.

With that summary, let's move to the next slide and the process of what this means for GN. First, we need to recognize that we have quite a lot of work to do to deliver a smooth and cost-efficient carve-out of the Hearing business over the coming period this year. In summary, the following is included in the transaction. More than 5,500 employees globally, the brands ReSound, Beltone and some other hearing brands plus the Beltone network partnership, all here in product IP, R&D, manufacturing and operations, including our manufacturing sites, support functions and IT to ensure a fully functioning Hearing business. Please note though that the transaction does not include the current financial investment in Nations Benefits. Certain shared services support functions by GN will continue to be provided on a temporary basis following the closing of the transaction via customary transitional service agreements between us and Amplifon. While we're executing the carve-out, we remain committed to drive success in GN and our key capabilities remain intact. We are now focused on setting up GN for future success with growth and profitability expansion. We have strong positions in attractive markets and distinct core capabilities to further build our future on. GN is and continues to be a technology leader with distinct capabilities in audio and video peripherals. We have strong positions in several attractive markets and significant growth opportunities to benefit from. We have deep expertise in some processing and low-power edge AI and also world-class design and product-making skills.

In addition to our technology leadership, we have established strong premium brands appreciated by many customers for its innovation, design and performance. We also have a cost-efficient global channel reach. We have a leading 2-tier business-to-business channel in Enterprise and a strong retail channel in Gaming. This allows us a very strong global reach to serve existing and new customers worldwide.

A top priority of GN in the last couple of years has been to drive a scalable and diversified supply chain to ensure the operational flexibility needed. We have that now in place, and our production volume is exceeding 20 million per year, which makes us a large player for several of our important manufacturing partners also in this next era.

In summary, we have a lot to build upon as we further shape our future. Let me further expand and reflect on this and highlight and remind ourselves on our positions in our markets. We have a leading innovative position with an enterprise headset, and we are a strong challenger with audio and video room equipment. Today, Jabra is the go-to brand for professional headsets and 80% of the Fortune 100 companies are Jabra users. Our latest Evolve3 product launch is addressing many of the needs evolving from the return to office and voice-led AI trends, while also having an appealing design and comfort we believe that we have a strong position to capture further market share and grow in the market. We have recently launched our premium products and have more launches, as many of you know, planned June -- for the rest of this year. For our audio and video meeting room equipment, we consider Jabra to be a strong challenger, as we've just completed our portfolio offering. We're now able to cater for large meeting rooms and thereby completing our offering for all type of meeting rooms.

For our FalCom business, we have a strong product portfolio and pipeline, and we're now focused on scaling up our commercial success. In many ways, '25 was a breakthrough year for FalCom, and we're excited to further build this business.

In the gaming market, SteelSeries have equipped and supported gamers with premium industry-first innovation for 25 years, providing them an unrivaled competitive advantage when they're playing games, underpinning the strong brand value and proposition of SteelSeries. We have somewhere between 3 million and 4 million active users. And in terms of market share, we're the #1 in premium headsets, #3 in keyboard and mice. We expect to be able to capture more market shares due to our best-in-class innovation and an exciting product road map for '26 and beyond.

All in all, we're very excited about our innovation-leading portfolio and product road map that provides GN with plenty of opportunities to capture significant market shares in the years to come, especially now when we can focus even more on the winning in this attractive market, with a healthier balance sheet and more flexibility.

So if we look now on the business we have following the transaction, our revenue breaks down into approximately 60% enterprise headset, 30% gaming devices and around 5% in meeting room equipment, frontline workers and FalCom. And all of these we see as growth opportunities. These businesses are well diversified across geographies, with Europe as our largest market, but we also have significant presence in both North America and rest of the world. We aim to grow broadly across these product categories and geographies to maintain a diversified business. We will also have an opportunity over time to enter new product categories in audio and video peripherals. This, as mentioned, in support of an agile and scalable supply chain with more than 20 million products produced yearly.

If we look at the financials in total, this adds to revenue close to DKK 10 billion and a pro forma EBITDA of around DKK 1.1 billion.

And with that, I'm happy to hand it over to Soren for an update on the intended use of proceeds and our financial guidance.

Thank you, Peter. As stated in the announcement, the initial proceeds from this transaction is DKK 12.6 billion and will exceed GN's current net interest-bearing debt of DKK 8.6 billion. Let me outline how we, high level intend to allocate these funds to maximize value and deliver a strong return to our shareholders. Our capital allocation principles are the following: firstly, we plan to significantly reduce debt, thereby lowering financial leverage and strengthening our capital structure to preserve financial flexibility; secondly, we will continue to invest in our opportunities, enabling us to drive market share gains and thereby growth and margin expansion over time; thirdly, the proceeds naturally also allow us to resume shareholder distribution following a few years where this has not been possible.

Now let's move to next slide and the impact of our financial guidance. As a consequence of the transaction, the Hearing business will be classified as discontinued operations. Our revenue guidance therefore only reflects the Enterprise and Gaming divisions, for which we totally expect organic revenue growth of 2% to 8% in 2026. This is based on unchanged divisional assumptions of 0% to 6% organic revenue growth in Enterprise and 7% to 13% organic revenue growth in Gaming. To drive the necessary changes of this significant transaction, GN will incur certain one-off costs, including, but not limited to, transactions and carve-out costs, which will naturally impact group EBITDA in 2026. We will naturally provide you with more details about the process on an ongoing basis. And once we have established a stand-alone operating system structure, we expect to reintroduce profitability guidance for our group. As a natural consequence of the transaction, we also suspend our long-term financial targets. That said, our ambition is to drive strong profitable long-term growth remains unchanged, and GN is in a strong position to deliver healthy growth, strong profitability and an attractive cash conversion.

Finally, and to preempt many of your expected questions, we plan to host a Capital Markets Day following closing of the transaction. At the Capital Market Day, we expect to cover, amongst others, the future strategy of GN, long-term financial targets, capital allocation policy, including further clarifications and distribution of excess capital to shareholders. We appreciate your understanding that we will wait to share this information until we can be more precise and specific.

And with that, I'm happy to hand you back to Rune.

Thank you, Jukka, Peter and Soren for the updates. That was the end of the presentation. I will hand over to the operator for the Q&A. [Operator Instructions].

[Operator Instructions] Our first question comes from Carsten Lønborg Madsen from Danske Bank.

Yes. Excellent. I was just hoping that you, again, could maybe explain some of the differences that are in the way you report the EBITDA from this business and the way Amplifon has reported it in their slides? And then second -- I'll wait for my second question.

Yes, thank you. As you can see, we have reported out on an EBITDA line, that is the way we look at the business as it would have been had we still been the owner. So that is, of course, fundamentally the very important to understand. So that is a more fully loaded EBITDA that we report out on. In a process like this, then, of course, you go through a number of items where you then have to agree on what is coming to the other side's P&L and also how do they look at the performance on '25. And that is what we have tried to quantify in the bottom in one of the footnotes in the announcement to this DKK 230 million. So that is the way. And then I will, of course, leave it to Amplifon to discuss how they're then looking upon theirs. So for us, the numbers up here is a fully loaded basically. And then in a process like this, it's about what are they taking over and also what are [ there ] in terms of earnings discussions when you are going through a business transaction like this? So this is the way we've structured it.

Okay. Then in terms the bidding process or the -- or what has been going on here. Has there been a formal bidding process or is it more in sort of stuff that has taken place over time [ as you write ]?

Carsten, it's Peter here. I think as Jukka said in his opening, this has been a period of course, over a longer period of time where our Board has received offers and have together with us and management evaluated several incoming offers and propositions in line with its responsibilities. This discussion here, as Jukka highlighted, started around 6 months. And our Board found this to be financially very attractive and also attractive because of this deal certainty and then have decided to pursue this transaction. And this is what has led to the announcement today.

The next question comes from Andjela Bozinovic from BNP Paribas.

The first question may be just in general. So you've integrated GN to become a one GN company and you have received around like DKK 600 million in synergies throughout this process. So what can we expect in terms of these synergies for the businesses that we have left? And just in general, why did you decide to sell the Hearing business now?

And the second question, just on your shareholder approval since you're no longer a health care company, but more like a pure-play in technology. Regarding the approval from your main shareholders because, for example, the demand foundation they normally invest in health care companies. So just interested if you expect any changes here.

Thank you so much. I think it's actually a few questions that perhaps several of you have. So let me take them here one by one. The One GN focus and what we have done in the last few years have been beneficial in many ways for us as a group. And you mentioned the DKK 600 million, we did DKK 400 million in the first year, and then we said we would do also a healthy improvement in the coming 2 years. And I would say, we've broadly delivered in line with what we said. So we are very pleased with that. A lot of what we have been undergoing is to strengthen the capabilities in the company. So capabilities in the supply chain and operations and also some of the core R&D initiatives. And initially, it was also about some more low-hanging cost reduction. I think all that has benefited us very well as a group. And in many ways, we do believe that we would have a successful future to continue as a one GN. So I think that -- I don't see this as a change of direction because we have not seen the progress we wanted. We were actually quite pleased about a lot of that progress. But we have, of course, acted here on an opportunity that presented itself. It needed to be evaluated at that point in time. You're asking also about the timing. I mean you don't get these opportunities, I mean, at any point in time, it was around 6 months ago, they started. We are mindful about that the hearing market is going through a period of slightly lower growth than what's normal. But as you also know, we have been able to outgrow the market. And we do believe today that we are getting a good valuation for our business that's beneficial to our shareholders. And by that, a very shareholder value creation and also that the future direction we're setting up will yield further value for our shareholders. So that's how we led to making the decision hereafter in 10, 6 months with a lot of considerations trying to take all facts available into account, essentially.

And then you're asking here a bit about the approvals and what our main shareholder will do? We, of course, respect a lot that any decision any shareholders will do at this point in time. But this has been a decision by our Board where I think they have really tried to factor in what's good for our shareholder base broadly, of course.

Next question comes from Jack Reynolds-Clark from RBC Capital Markets.

A couple for me, please. The first, I appreciate it's kind of somewhat front run your Capital Markets Day, but if you could share any detail about kind of what you expect to or kind of how you expect to mobilize the excess capital to drive increased growth and higher margin in the Enterprise and Gaming units? And do you see opportunities for M&A or are there kind of other things that you expect to spend money on? And then do you expect to sell down your 16% stake in Amplifon over time?

Yes. Thank you for the question. And you're, of course, absolutely right that we are in a situation we have created with this sale that we are capable of bringing down our debt. And for sure, by that measure, go beyond our leverage ratio of 2.0x. And that leaves us with some opportunities that we, of course, would like to explore here until we meet you at Capital Markets Day and then lay out the fundamental of where we would like to invest and also how we would like to deploy excess cash to our shareholders. So this is still our fundamental process that we are now going into. So we have not a specific as it called out in that sense at all. It's more a clear structured [ CapEx ] plan we now have where we look at the opportunities, combined with our ambition to also pay back money to the shareholders and that will come over the fall.

So for the second question here, part of the transaction, as you highlighted, we are becoming a shareholder of Amplifon. Let me first say that we very much believe in the value creation of this transaction for us as GN, but also for the success of the combined entity. And as such, we very much believe strategically that this will be a very successful company with good prospects for value creation over time. We -- as often in these type of deals, it involves some period of lockup. After that, you will likely see us to take decisions on what to do with our shareholding. But given that the new focus of the company, you should expect us over time to reduce that shareholding, but we'll do that in a very responsible way and in a way that is good for our shareholders.

Next question comes from Veronika Dubajova from Citi.

I'll keep it to 2. The first one is just on any concerns, you have antitrust review and what your expectations are here in terms of what the European Commission might be looking at and likewise for the SEC, and whether there are any provisions or contingencies in the deal related to the inability for Amplifon to secure antitrust approval? So that would be my first question.

And then my second question is just short-term disruption. Obviously, it's quite a long time for the transaction to close. You still have to keep producing and selling hearing aids and presumably also progressing on your innovation road map. And so I'm just curious sort of how we should be thinking about your desire and ability to mitigate any near-term synergies and disruption from the business, from the pending transaction.

Thank you for your questions here. If we look on the regulatory risks involved here or you can see the likelihood of an approval, we have factored this in a very significant way, we've thinking of this thoroughly and it's been very much part of our Board's decision also to believe this is a good deal, not only because of its value, but also the deal certainty. I don't want to go into individual markets. So anyway, we need to have the process run its way, but our holistic assessment is that this should be doable. It is a vertical integration. We are not competitors in any way or form, but the process needs to run its way. I would say that any, I mean, risks in this, of course, also covered by, what you should we say, sound contractual obligations. I don't want to go into the details of it. But we do believe that, first of all, that this should be doable and of course, have make sure we put together an agreement that is also protecting GN in a good way here.

Then the disruption. We are very, very aware of this. This is very important for us to manage. I think this is something we need to achieve through leadership. We need to make sure our teams stay very focused on this. I do think it helps that our people, I think already today, we talked to many, many of them. They feel job security is high. They feel needed in this new company. I mean, as you know, Amplifon is not a manufacturer of a hearing aid. So I think everyone sees that we are needed for the future success of the company. There are even some that are actually quite excited about the transaction to be part of creating the industry leaders. So I actually think that will help us a lot to keep the workforce staying very motivated to deliver what they need to do here in the period also until closing. But we have a lot of focus on it. And I'm not overly worried, but I agree with you, it's a priority to make sure it's not becoming a distraction.

And can you maybe touch upon how you're going to carve out the R&D function given the move to one GN? And that's my final question.

No. Thank you. I do believe that the absolute majority of R&D people working with our hearing aids are already in a dedicated function. So I would say that, that is very clear where they're going. There's been some shared teams, primarily in more long-term research and similar and they would be going through it very carefully to -- in a balanced way assess how can we make sure that we are transferring a research team that's still very capable and also retaining a research function with GN that's capable. What helps us a bit is that 2 years ago before GN, we actually had 2 separate research function, and we have continued to invest in it. So I think we have strong capabilities for both sides of the transaction also after it's completed.

The next question comes from Niels Granholm-Leth from DNB Carnegie.

Now perhaps this is a question for Jukka. So do you think that the Supervisory Board has lived up to your fiduciary obligations in terms of investigating all opportunities available out there? And don't you think that an EGM would be needed for the shareholders to decide on such a big decision for the future of GN?

And then secondly, could you talk about the breakup fee that would have to be paid if this deal was rejected for something else?

Yes, thank you. So we have, of course, looked very carefully at all possible options, and I can confidently say that from a transaction certainty point of view, from a risk point of view and in the strategic and financial perspective, the offer from Amplifon is the best long-term interest to our shareholders as well as for the Hearing business. So we have very carefully look at all the options. That's for sure. And...

What if you receive a high bid?

Well, I can leave that to Peter.

So on that -- and we try to be very clear on that in the announcement here today, this is a definitive agreement and such is an agreement, that's signed. There, of course, are some provisions related to successfully closing, but it is a definitive agreement that we entered in here today.

So could you confirm that there is a breakup fee to be paid if this deal is abandoned for something else?

We don't like to go into the details of the agreement, but I can just reiterate and say, you should think about this as a definitive agreement.

The next question comes from Rula Martinien from Jefferies.

It's Martinien Rula from Jefferies. I would have 2 questions, please, and the first one relates to pretty much circling back to Andjela's and Veronika's and questions around the potential for dis-synergies. I would like you to confirm whether we should expect any impact on the cadence of the expected product launches in all of the 3 divisions that were expected for this year? Still on the topic of potential for dis-synergies, could you comment on whether some sort of innovation-related partnership with Amplifon could be on the table pretty much like the one you had in place with Cochlear?

And the second question would be on the share that you will have in Amplifon. Could you elaborate a bit on what's the purpose of retaining a share in the business? And circling back to Jack's question on the vesting period and so on, what are the terms for the period of lock-up?

Thank you so much. If we look on the dis-synergies, when it comes to the core innovation, we are not worried about that. We have taken a lot of care, I mean, in the last few months to really think through how to do this well. And as I highlighted earlier on the previous question, when it comes to R&D, most of our teams are working in a dedicated team per division. And we'll, of course, stay with a respective division here also after the transaction. I think where we've been having some more consideration is around some of the research team. But think about this, these are more like teams working on initiatives that have an outlook of 5-plus years. So it's definitely nothing that will impact the short-term product launches, anything like that. It's more what we're caring about is to ensure that we have the right capability to continue to drive this 5-plus years initiative forward in a good way. And it is very important, so I don't want to diminish it, but we're not worried about this creating a disruption. It's more to really make sure that we have a strong team there. So we're, of course, reassessing that also. So that's the case after the transaction.

When it comes to innovation partnerships, I think it's too early to conclude that. But of course, we have a lot of relationships on a senior level, but even more so, of course, on a more detailed level now between our R&D teams and so on. So that could be possible. These are noncompeting businesses. And I think that if there would be merit for it, we would be very willing to explore it. As we often talked about in our strategy, we believe in partnerships. Cochlear is a good example, but we also have a lot of other type of partnerships. We think it's a good way to work together to achieve more and would be very open to do that here also.

And then the final part of your question, you're asking about the shares. I mean, the reason we're coming as a shareholder here in Amplifon, it is part of the transaction. I think this is a cash-rich transaction. It's the majority of the transaction value comes through cash, but a portion also comes through shares. And we don't mind that because we actually believe that this will be a very successful company. But as I said before, we're not seeing ourselves as a long-term shareholder. There will be a lockup period for a period of time and then we will evaluate our options in terms of what's best for our shareholders. The exact time we -- for the lockup, we don't like to disclose, but think about it as a normal lockup period, nothing extraordinary around it.

The next question comes from David Adlington from JPMorgan.

You mentioned in the release, it's a taxable transaction. I just wondered what the likely -- any likely tax liabilities might be?

Secondly, it sounds like there's no requirement for a shareholder approval, but I'm just wondering if under Danish law shareholders might be able to challenge that in the court.

And then just finally, you mentioned some interest in, obviously, the Hearing business over the last few years. I just wondered if you had any similar interest in the audio business?

This is Soren. And just to speak to you, whether it is a -- it is -- we can confirm that it is a taxable transaction basically, to your question.

So just to follow up, what sort of tax liability you might be looking at here?

We are not commenting on that, as we speak.

Okay. And it comes to the agreement, I figure coming back to what I said before, we have, of course, been going through this in detail with both financial and legal advisers to make sure that this transaction is made in appropriate way, of course, following all applicable laws and responsibilities of our Board and us as a company.

What we have entered is what we are describing as a definitive agreement, and with that, meaning that this is something we signed and that we are committed to. And then there are, of course, details around that, but we do not intend to disclose all the details of the contract in that way. But again, think about it as a definitive agreement. I think it's the best way to describe it.

Then the final question you have here on the audio businesses. We are not commenting on any kind of interest on our business, if a Board do not assess it to be something worthwhile to pursue. So no real comments I will say. But I can confirm that the main interest and dialogue over the years have clearly been around the Hearing business.

The next question comes from Susannah Ludwig from Bernstein.

I have 2. I guess, first, I wanted to confirm, [ wallet ] deal is being completed, will you continue to report growth in divisional profit for the Hearing aid business or will you no longer be giving detailed reporting, given it's going to be in discontinued operations?

And then second, you noted that deal certainty was one of the things that made this offer attractive versus others. Was that deal certainty just from the fact that there was no horizontal overlap with the Amplifon or was there another piece driving the greater deal certainty versus other bidders?

Yes, I'll take the first one. And as we called out also in the presentation, we will be reporting the Hearing business as discontinued business, and we'll come back to the details around that. But as a starting point, it will be reported as a discontinued business.

And then for the deal certainty, most of the considerations have been around the regulatory part. It is where I think our Board really have done a lot of work to make sure that we have that part of the valuation criteria since it's so important and can also cause a lot of disruption if that is prolonged or difficult. But we have also looked on other aspects of deal certainty. And here, I think the financial is relevant to just make sure that our shareholders have certain in terms of the financial side of the transaction, in terms of, of course, to getting our -- both our cash proportion and equity proportion delivered in a safe and secure way to our shareholders. And there is a very good certainty around that also.

We have a follow-up question from Andjela Bozinovic from BNP Paribas.

I just wanted to check if you can remind us of the synergies that you have with like within the Enterprise and Gaming businesses and FalCom as well? Should we think that you might be even looking to sell one of these businesses? Or like can you point us to where do you plan to put most of your investments in the ongoing business among these that you have left?

Thanks a lot. And this will be a -- the things we will elaborate at length on the Capital Market Day. So we promise to get back with a lot of clarity on how we see the future on building the growth of the group across the different type of opportunities. I can say that we have a healthy level of synergies across Enterprise and Gaming and FalCom. It's mostly in the supply chain, but also some on the R&D side. So that is something that are clearly very good synergies. What's a bit different for the 3 business is a go-to-market, the different go-to-market route for the 3 businesses. But there's a healthy proportion of synergies that we benefit from going forward. Where we see the opportunities? I think we have opportunities in each and 1 of them in a very attractive way, but this is really the work with our [indiscernible] through very carefully with our strengthened balance sheet, where do we think the most promising opportunities are for how to really shape the company going forward. And that is what we look forward to come back with at the Capital Markets Day. But it's opportunity-rich, that's the way I would summarize it.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to the company for any closing remarks.

Thank you very much, operator, and thank you, everybody joining on the call today.

Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Amplifon to Acquire GN Hearing Conference Call. [Operator Instructions]

At this time, I would like to turn the conference over to Ms. Francesca Rambaudi, Investor Relations and Sustainability Senior Director of Amplifon. Please go ahead, madam.

Thank you. Good morning, and welcome to Amplifon's Analyst and Investor Conference Call on the GN Hearing transaction.

Before we start, a few logistic comments. Earlier this morning, we issued a press release, and this presentation is posted in our website in the Investors section. The call can be accessed also via webcast and dial-in details are on our website as well as on the press release. I have to bring your attention to the disclaimer on Slide 2 as some of the statements made during this call may be considered forward-looking statements.

With that, I'm now pleased to turn the call over to Amplifon's CEO, Enrico Vita.

Thank you, Francesca. Good morning, everyone, and thank you for joining us at such a short notice. Today marks a very important milestone for our company. We are announcing a highly strategic and transformative transaction that represents a key inflection point for Amplifon, for GN and for the audiology sector more broadly.

With the acquisition of GN Hearing division, we will transform Amplifon into a truly global vertically integrated leader in hearing care, uniquely positioned to compete and grow in an attractive structurally growing market. By bringing together GN Hearing advanced product innovation capabilities with Amplifon clinical expertise and deep patient insights, we will be able to further elevate the industry standards worldwide.

We believe this transaction opens a new phase of value creation for the new group, enhancing its ability to innovate, its scale and deliver consistently high-quality products and services to customers, hearing care professionals and patients across markets. Importantly, this strategic step is further reinforced by our partnership with GN, which will become a committed shareholder of Amplifon.

We are taking this step to better address the growing global demand for advanced hearing solutions. Today, approximately 500 million people worldwide live with disabling hearing loss and the long-term fundamentals of our industry are very attractive. While we have seen some recent softness linked to the macroeconomic environment, we continue to operate in a structurally growing market. This growth is supported by powerful and secular trends, aging population, increasing life expectancy, rising adoption of hearing solution as stigma gradually diminishes and rapid technological progress.

By combining 2 highly complementary global leaders, we will strengthen our ability to capture these opportunities. The transaction will enhance our scale, accelerate innovation, shorten product development and launch cycles and support the delivery of consistently high-quality products and services across markets. Overall, we believe this combination will position us to drive sustainable growth, improve competitive positioning and create long-term value for customers, professionals, employees and shareholders.

We believe this transaction has a strong and compelling strategic fit. GN Hearing contributes leading-edge technology capabilities, advanced operational expertise and a strong global commercial platform. Amplifon brings unparalleled clinical know-how, deep patient insights and a proven ability to deliver highly personalized hearing care at scale. Together, we are creating a fully integrated platform spanning the entire audiology value chain from research and development to care delivery.

This integration will enhance the innovation capacity, hence, improve the overall customer, hearing care professional and patient experience. By combining our complementary strengths, we believe we can accelerate growth, reinforce further our competitive positioning and unlock additional long-term value creation opportunities.

Let me now briefly outline the key transaction highlights. The consideration is structured as a mix of cash and shares. At closing, GN will receive up to EUR 1.69 billion in cash and 56 million newly issued Amplifon shares for a total consideration of circa EUR 2.3 billion that on 2025 EBITDA equates to 10.5 multiple before synergies and single-digit multiple after synergies.

We expect very strong run rate net EBITDA synergies of in a range of EUR 60 million to EUR 80 million by the end of 2029, primarily driven by the in-sourcing of our hearing aids. These are cost synergies, tangible and measurable in nature with a clear execution road map and limited delivery risk.

The cash component at closing is fully covered by a committed bridge facility to be refinanced over time through a combination of debt and equity and/or equity-linked instruments. Our pro forma net debt to adjusted EBITDA is expected to be around 3x at closing, excluding synergies and accounting for an equity rise up to EUR 0.75 billion. followed by a rapid deleveraging path supported by strong cash generation.

The transaction has been unanimously approved by both Boards. Importantly, Amplifon controlling shareholder, Ampliter and long-term shareholder Tamburi Investment Partners have reaffirmed their strong support to the transaction to the company long-term strategy, including their financial participation in the equity raise. We anticipate closing at the end of 2026, subject to customary regulatory approvals and completion of the GN Hearing carve-out.

GN Hearing is a high-quality asset, most probably the best asset in the industry of the manufacturers. with more than 150 years of heritage and a strong global positioning across brands, channels and customer segments. GN Hearing is currently the fastest-growing hearing aid manufacturer with revenues in 2025 of approximately EUR 1 billion and an organic growth of around 9% over the last 3 years. Adjusted carve-out EBITDA is approximately EUR 220 million, corresponding to margins of about 23%.

GN Hearing operates in over 100 countries and employs roughly 5,500 people worldwide with annual volumes of over 4 million hearing aids. As said, the company combines strong global brands and a broad innovation-led product portfolio with an excellent commercial platform and proven execution capabilities. This positioning supports long-standing relationships with customers and hearing care professionals across multiple markets and channels.

GN Hearing benefits from clear technological leadership with more than 700 engineers operating across 7 global R&D centers. Over the past 15 years, the company has proven its outstanding technological and innovation capability by launching a 10 new technology platform and by building an intellectual property portfolio comprising more than 2,800 patent rights.

Another key differentiating factor is the in-house development of proprietary chipset. This vertical capability supports product performance and differentiation, accelerate innovation cycles and contribute to shorter time to market.

The R&D capability supports one of the fastest innovation and product launch currencies in the industry, contributing to consistent market share gains. Recent platform launches, including ReSound Vivia, Nexia and Omnia highlight GN Hearing ability to innovate in what matters most to the patients, superior speech understanding in noise through AI-enabled features, smaller and more discrete form factors, laundry battery autonomy and seamless connectivity. The strength and visibility of this innovation pipeline underpin our confidence in the strategic logic of the combination as it will be complemented by Amplifon scale and patient insights.

As said, we really believe this combination has a very strong strategic rationale. First, the transaction creates a global vertically integrated leader positioned to deliver best-in-class patient-centric solution across the full audiology value chain. Second, it brings together 2 highly complementary market leaders, combining advanced technology capabilities with clinical expertise and deep patient insight. Third, the combination provides clear visibility on significant and tangible synergies, primarily cost driven and supported by the progressive in-sourcing of Amplifon hearing aid needs with a disciplined and well-defined execution path. Finally, the transaction strengthens the group ability to capture long-term structural growth opportunities through increased scale, insight-driven innovation and broader geographical reach.

In this chart, the complementary positioning of 2 businesses is evident when assessing their respective strength and distinctive capabilities. Each company has developed leading expertise within its core area of focus. By combining GN Hearing technology leadership and high-quality manufacturing footprint spanning across 4 production facilities with Amplifon, a deep hearing care expertise and global network of more than 10,000 points of sales, we will better position to accelerate innovation. In particular, the integration will allow us to translate clinical insights more effectively into product development, ultimately enhancing the overall patient experience.

Finally, it is also important to highlight the strong cultural alignment between the 2 organizations. Both companies share a clear mission to improve hearing worldwide, view innovation as a key driver of growth and are guided by strong focus on operational excellence and an entrepreneurial mindset.

This slide highlights how the combination of GN Hearing and Amplifon also enhances complementarity from both the geographic footprint and business mix perspective. Following the transaction, Amplifon will benefit from a broader geographic exposure and a more diversified revenue base. In particular, we will strengthen our presence in the United States, the largest market in hearing care, consolidate our leadership in Europe and further expand our reach across the rest of the world.

At the same time, the combination will create a more balanced mix between retail and service activities on the one hand and technology and product revenues on the other. This increased diversification is strategically important. It is expected to improve earnings volatility, enhance scalability and support greater flexibility in capital allocation while continuing to keep patient outcomes at the center of our value proposition.

We have identified net run rate EBITDA synergies from EUR 60 million to EUR 80 million by 2029, with circa 85% of the synergies expected to be generated through volume in-sourcing, namely the progressive shift of Amplifon hearing aid requirements into GN Hearing manufacturing footprint. We consider this lever to be very and highly executable, largely under our control and supported by clear implementation plans.

We anticipate one-off integration costs in the region of EUR 80 million over the 2, 3 years following closing. Beyond the initial synergy program, we see further upside potential that is not yet quantified today but which we intend to pursue with the same structured approach. This includes additional cost opportunities such as manufacturing and indirect procurement efficiencies, working capital improvements and CapEx optimization as well as longer-term revenue synergies supported by enhanced innovation capabilities.

Let me now turn to a high-level snapshot of the combined financial profile. On a pro forma basis, for illustrative purpose and based on the 2025 figures, the combined group would generate revenues of around EUR 3.3 billion and adjusted EBITDA of approximately EUR 830 million, including identified net synergies corresponding to a margin of about 25%. Pro forma EBIT would exceed EUR 500 million, implying a margin of roughly 16% and resulting in a solid and balanced financial profile. Importantly, the transaction is expected to be accretive for both growth and profitability while strengthening the resilience, visibility and scalability of the group earnings trajectory over time.

Turning to funding and leverage. The cash consideration at closing amounting to EUR 1.69 billion will be fully financed through a committed bridge facility. Over time, we intend to refinance this bridge through a combination of debt and equity and/or equity-linked instruments. The planned equity and/or equity-linked raise is expected to amount to up to EUR 0.75 billion, supporting a pro forma net debt to adjusted EBITDA ratio of around 3x at closing, excluding synergies. Thereafter, we expect a sustainable deleverage trajectory underpinned by the strong cash generation profile of the group.

Overall, we expect the transaction to be credit enhancing as it strengthens the quality and the scale of the business while maintaining leverage at broadly similar levels of today with a clear visibility on further deleveraging over time. All in all, we expect to maintain our current credit rating.

Turning to the expected time line. The transaction was signed this morning. Closing is anticipated at the end of 2026, subject to customary regulatory approvals, including antitrust clearance as well as completion of the carve-out of GN Hearing from the GN Group. From a governance and shareholding perspective, GN is expecting to hold in the region of 15% of Amplifon shares capital post-transaction and will have the right to appoint one member of the Board of Directors. At closing, GN and Amplitter are also expected to enter into a shareholder agreement.

In summary, as is illustrated on this final chart, the transaction offers a compelling value proposition for all stakeholders. For shareholders, the combination of 2 very complementary industry pioneers create a global industry leader, innovation-driven, stronger and more diversified business, better positioned to capture long-term structural growth. Furthermore, the combination is expected to enhance cash generation and deliver significant tangible synergies supporting an accretive growth and profitability profile.

For customers, hearing care professionals and patients, it will enable the faster delivery of highly innovative patient-centric solution, supported by closer feedback loops between clinical practice, patient insights and product development.

For employees, the combined group will offer broader and more attractive international career opportunities within a global industry leader while preserving the distinctive capabilities and entrepreneurial culture that have underpinned the success of both organizations.

To conclude, we believe this transaction represents a clear strategic inflection point for our company. It creates a global integrated leader with the scale, capabilities and focus required to set higher standards in audiology, accelerate innovation and deliver superior patient outcomes in a sustainable and profitable way over the long term. The combined group will be uniquely positioned to capture the significant growth opportunities in a market estimated at approximately EUR 23 billion, spanning both manufacturing and retail. Overall, we are confident that this transaction strengthens our competitive positioning, enhances our growth profile and support long-term value creation for all stakeholders.

Thank you for your attention. We are excited about the opportunities ahead and the value this combination is expected to unlock. I will now hand back to Francesca to open the floor for questions.

Thanks, Enrico. I kindly ask operator to open today's Q&A session. [Operator Instructions]

[Operator Instructions] First question is from Andjela Bozinovic, BNP Paribas.

So the first one is just how will this transaction impact your relationship with other manufacturers? In short, will you focus only on selling GN hearing aids? And if yes, when can we expect this to be achieved fully? And the second one is very, very quick. Do you expect to host a CMD to give us a little bit more insight into the newly formed company?

Well, thank you for the two questions. With regards to the CMD, yes, of course, we are planning to hold a CMD post closing in order to share with all of you the strategy of the new group.

With regards to the first question, of course, as we said, the very vast majority of our expected synergies, which are very relevant and very big and very executable are coming from the in-sourcing of the vast majority of our hearing aid requirements. However, we will still keep -- we will not get to 100% of our requirements produced internally. So we will have also additional manufacturers providing hearing aid in the future. In the meantime, of course, we have agreements with our main manufacturers, which, of course, we intend definitely to make.

Next question is from Hassan Al-Wakeel, Barclays.

Firstly, Enrico, you've always been vocal that a retail-only strategy is better. What has changed? Why do you think now is the time given your retail business has been challenged with some question marks around share dynamics?

And then secondly, just following up on the in-sourcing point that you mentioned. It would be very helpful if you could talk to the phasing of synergies out to 2029 and why some of these in-sourcing synergies couldn't be quicker? And you also highlight revenue synergies. So I'd love to hear more about them as well.

Absolutely. So I will start with the second question. With regards -- we have been, I would say, reasonably prudent in estimating our synergies, which means that we are not taking into consideration any revenue synergies, which could stem from more innovative products, thanks to also our patient insights.

With regards to the phasing, as I said, the vast majority of the synergies are coming from the internalization of our hearing aid requirements. And therefore, these are, I would say, pretty easy synergies to deliver. So we expect the vast majority of the synergies to be achieved in the second year of the next 3 years.

With regards to the first question, well, we are at a time of significant technological advancements and innovations. So we believe that today makes a lot of sense creating the most advanced global integrated group in audiology, capable of developing and delivering the most innovative consumer-centric products and services. Basically, the goal -- the mission is to set new standards in the industry.

It is also clear that the strategic upstream vertical integration has proven successful across many different industries, adjacent health care and technology sectors. So we thought that, that was the right time in order to pursue this kind of strategy. We believe that by combining GN best-in-class technology and innovation capabilities with our clinical expertise and deep patient insight as well as with, of course, greater scale, we will be able to further accelerate innovation, deliver best patient-centric products and services across the entire radiology value chain. So from research and development to care delivering for the benefit of customers, hearing care professionals and ultimately patients. As I said, we think that this is crucial at a time of significant technological advancement.

Furthermore, as I said, also, we -- the transaction provides significant and very tangible synergies in the range of EUR 60 million to EUR 80 million, which is, of course, giving us the opportunity to unlock a very significant value. I would also to reiterate that additional medium-term synergies stemming from manufacturing indirect procurement as well as revenue synergies have not been quantified yet and therefore, represent further upside potential for the future.

Next question is from Domenico Ghilotti, Equita.

First question is a follow-up on the synergy topic. Can you give us a sense of what is today the share of volumes generated by GN and your total volumes? And you are talking also about the synergies. Can you elaborate on the risk that you see from retaliation? And last, on the timing -- well, in the past, you have proved very, very effective in pushing your products into your retail network. So I presume that when you are referring to the second year of combination for the vast majority of synergies, this will come in mostly from the in-sourcing.

Yes, absolutely. With regards to the last point, yes, definitely, the very vast majority, actually more than 85% of the synergies are coming from the in-sourcing, which we are very confident about. You're right, we have been able actually to also manage our share of wallet of manufacturers in the past. We have been able also to push through our network, the Amplifon product line. So we are -- we feel very, very confident about our ability to achieve these synergies.

With regards to dissynergies, in a transaction like this one, you need always to take into consideration some potential dissynergies that, of course, we will try to minimize, which will allow us even to over deliver on the range that we have provided today. So as I said, we believe that there is a huge amount of value that we can unlock through the synergies. The synergies are very clear, very executable, and therefore, we feel very good. For the sake of, let me say, prudency, we have also taken into account some dissynergies that, for sure, we will try to limit as much as possible, and there will be, let's say, short-term dissynergies that will disappear in the future.

Next question is from Julien Ouaddour, Bank of America.

The first one is, I mean, I'm just wondering what's your plan to prevent the channel conflict and protect the, let's say, the GN's independent wholesale relationships with the audiologist once the business is owned by a major retail customer. And I'm saying that because GN has a quite -- I mean, unique relationship with -- so I'm wondering if it could create some dis-synergies. We were just discussing it in like in the previous questions.

And the second one for me is that this deal happened in a time where you are working on Fit4Growth savings, network like rationalization and the hearing aids market is a little bit softer. So that's quite a lot on your plate. I'm just wondering if there is any risk in terms of integration and if we can still consider the savings from Fit4Growth impact to 2028. So it comes on top of the synergies that you were mentioning in this deal.

Thank you. Thank you for the questions. I will start from the second question. I think that from, let's say, an organizational and business viewpoint, this is a good moment. What I mean is that -- we have started last year the Fit4Growth program, which is aiming to enhance structurally our margins.

During our last conference call, I also reiterated my confidence that Fit4Growth will deliver meaningful benefits already starting from 2026. And I also said that Fit4Growth basically will end by the first half of this year. And we will, of course, reap the benefit of Fit4Growth, not only in 2026, but also in '27 and going forward. So Fit4Growth has been almost completed, very confident about the results coming from this. So I don't see any risk coming from this transaction with regards to our ability to improve margins in Amplifon.

In terms of risk of integration, we see -- of course, we evaluated that, but we see that basically nonexisting. What I mean is that, as you have seen in our presentation, basically the 2 companies, and this is one of the drivers of why we have pursued this transaction is that the 2 companies are fully complementary. Amplifon is 100% retail, GN is 100% wholesale. So this is not a cost-cutting integration. It's not a cost-cutting exercise that is required in order to unlock value. The value is coming from the in-sourcing of our hearing aid requirements. So we do not expect any material risk in terms of integration.

With regards to dissynergies, I think that at the end of the day, what is important for customers and for audiologists, hearing care professionals and patients, at the end, what is important is to get the best and high-quality, highly innovative products. This has been the mission of GN in the last years. I think that GN has proved to be able to have a very highly innovative products launched at a very high cadence in the last years. Of course, the goal is not only to maintain this but is even to accelerate also, thanks to our clinical expertise and thanks to our patient insights. And by the way, it is, I think, pointless to note that now all the major manufacturers have their own retail. So we will be on par vis-à-vis with all the other main manufacturers.

Next question is from Oliver Metzger, ODDO BHF.

The first one is about how we should think about the synergies outside the procurement. And in this context, how to think about your retail activities GN had like in the U.S. with Beltone Lively? And what's your view about the integration them into Amplifon?

Sorry, can you repeat the first question? I didn't get.

No, it's how to think about the synergies outside of procurement, and this links directly to my second question regarding the retail activities GN is doing with the Beltone Lively one and how do you want to integrate them into your network?

Absolutely. So with regards to the Beltone network, of course, we have a very -- we have quite a unique chance in the U.S. Thanks to the Beltone network, basically, we will double our share in the U.S. Therefore, getting a very strong position in what is the main -- the largest market in the world. Basically, we will double our share. And therefore, that was one of the reasons why we have pursued this kind of strategy.

With regards to the synergies outside the in-sourcing of our hearing aid requirements, these are coming from other buckets like logistics and warehouse integrations. consolidations and a few others. Again, in my opinion here, it's important to stress the fact that more than 85% of the synergies are coming from the in-sourcing of our in [ games ]. And it's also very important to stress once again that in a prudent approach, we have not even included any synergy coming from a revenue standpoint.

So we feel very, very confident about the target that we have set today. And actually, we think that there will be, for sure, further upside potential in the medium term coming from revenues synergies coming from manufacturing synergies thanks to higher volume coming from indirect procurement synergies and so on and so forth.

I rephrased my question, but not good enough. So it was targeted like this 15% of residual synergies appear pretty low given GN's retail activities because Beltone is pretty big. So I assume there should be more synergies within Beltone Amplifon combination.

Yes, yes, absolutely, absolutely. This is an upside that we have got. Definitely, we are very excited about having Beltone within our family. But for sure, it's our intention to leverage fully on the Beltone network in order also to consolidate our position in the U.S.

Next question is from David Adlington, JPMorgan.

Firstly, on the transaction structure, please. So I just wondered if there were any break fees associated with the transaction. Do you have any protections from any third-party interest in the GN business? And will there be shareholder approval required on both sides, both you and GN?

And then secondly, just historically, having access to all the manufacturers technology has been important strategic benefit for you guys, lose that going forward. I just wondered if you thought that going to be less important going forward? And if so, why?

Sorry, say again, please, the second question? The audio was not clear.

Yes. So historically, you had access to all the manufacturers technology.

Yes.

And that's been important to be able to have access to the best technology that's available at that time. But going forward, you're going to have less access to that. So I wondered if -- what changed that made you think that was less of an importance going forward?

No. Well, as you know, GN is a very important -- already today is a very important supplier of Amplifon, and we feel very good actually about the GN product lines. Actually, this also it's very important to stress. We believe that we are integrating the most innovative and the best manufacturer in the industry. So we feel very good about in-sourcing GN products because as demonstrated also by their recent revenue growth as well as by their recent market share growth, their capabilities to innovate and to deliver highly quality and highly performing products makes us very confident that we can definitely leverage on GN products.

With regards to shareholder approvals to the transaction, no, all the Board approvals. So the transaction has been, as I said, approved unanimously from the 2 Boards.

Next question is from Susannah Ludwig, Bernstein.

I guess I had a more broad question about the bargaining dynamics within the industry between retail and wholesale. We obviously are going through a period of significant technological advancement in hearing aids, which you have alluded to. But historically, the audiologist always made the choice on product, which gave an advantage to the retailers. Do you see any sort of shifts in this dynamic? Is there anything else in patient behavior, for example, more online research that is changing this dynamic?

No. Well, I think that you're absolutely right. At the end of the day, what is important to, in particular, audiologists that then, of course, make their proposal to final patients is the quality and the performance of the hearing aids. And this is very important because we believe that we are integrating a very strong manufacturer that has been able to deliver very innovative product. And actually, the goal here is actually to elevate the standards of the industry, also thanks to our clinical expertise and patient insights in order to accelerate innovation, in order to improve performance and in order to deliver at the end of the day, the best outcome for the patient.

Next question is from Fausto Covolan, Eos Capital Partners.

Enrico, could you outline a little bit more the in-sourcing road map from now up to the '29 in order to understand how the synergies will work out? And do you see any quickest win by geography, customer segment on the in-sourcing? And lastly, if you see any key constraint in executing this in-sourcing?

Sorry, again last part.

If you see any key constraints to execute in-sourcing.

Yes. No, not at all, actually. We do not see any constraint. As I said, of course, we will be very respectful of the current agreement in place with the major manufacturers. We are planning to achieve the vast majority of our synergies by 2028 with the completion in 2029. I think that this is a very important point.

What I mean is that, of course, one of the reasons why we have pursued this transaction is, first of all, to create a global, vertically integrated, highly innovative manufacturer. This is the #1 reason why we are doing this. We see the opportunity actually to integrate GN cutting edge technology with our patients in sight, with our clinical expertise in order to create the best vertically integrated group.

We have chosen GN because we believe -- we firmly believe that we are acquiring the best hearing aid manufacturer at the moment as proven by their ability to launch very innovative platforms at a very high cadence and as has been proved by -- you have seen the chart, their increase in market share. I think that this was a unique opportunity. I think that we are also pursuing this opportunity at a very attractive multiple.

As I said during my speech, if with the 2025 EBITDA, we are speaking about a multiple of just over 10x, while before the synergies, while after the synergies, basically, the multiple goes to single digit. So we feel that -- we felt that it was a very unique opportunity to integrate and to acquire the best manufacturer of hearing aid in the industry at a very attractive multiple.

Next question is from Domenico Ghilotti, Equita.

Yes. Just a follow-up. Well, a previous question was mentioning any protection for potential different bidders. And on the timing -- yes, there is a protection in case of, let's say, there is a different bidder. So there is someone else entering. It was a previous question.

The contract is signed, so no topic. No issue.

Okay. Okay. And on the timing of the transaction, what is -- so you said it is the best timing, so we decide to move in this direction. What is surprising me is that, okay, you are issuing now shares with the stock at 7x or less EBITDA to buy probably a good asset, 10.5. So moving back to a more similar multiple post synergies. So in terms of timing, this is what I understand.

Yes, of course, we could not predict the war in Iran. And as you can imagine, these kind of discussions have not started in the last 3 weeks. It's something that we have begun to discuss with GN basically 6 months ago. We have been always in talks with GN because GN is a very was already a very important supplier of ours. Of course, we would not -- we would prefer not to do this after the Iranian war, but you don't choose the timing.

At the end of the day, I would like to stress once again the fact that we are paying an attractive multiple before the synergies and a very attractive multiple in particular, after very significant and very executable synergies. The war will end at some point. This is a strategic deal. It's not something that we are doing to improve our numbers in the next months, but it's a very, very strategic deal in order to create the -- one of the leaders in our industry vertically integrating. I think that it's also evident that vertical integrations in many fields also adjacent to ours has proven to be very, very successful.

This deal, I think that we will create over time, significant value for our shareholders at the end. It will be accretive to our growth. It will be accretive also to margins. You have seen the numbers. So we are very excited about this opportunity from, first of all, a strategic viewpoint, but also from a financial viewpoint because we expect this to be accretive on all the different dimensions, as I said, as proven also by different examples of vertical integration, including the ones in our sector.

And my last question is on the shareholder commitment. Is it fair to understand that the family will follow through the capital increase or will not be diluted or is too much?

No. Well, what we can say today is that our controlling shareholder will participate to the capital increase. I would like to stress the fact that the family has been very supportive to the transaction also from a financial viewpoint.

Also, I would like to add that our core long-term shareholder, Tamburi Investment Partners, has been very supportive on the importance on the strategic relevance of this deal. And also they have committed to participate to the future equity raise. So we are extremely happy, and I would like -- and grateful in a way, absolutely grateful for the support that we have received both from, let's say, strategic and long-term commitment, but also from a financial viewpoint from our -- from the 2 bigger shareholder of ours to the transaction.

Next question is from Giorgio Tavolini, Intermonte SIM.

My first question is regarding the organic growth of the stand-alone asset. I mean, given the closing is expected to come in 2027, so for modeling purposes, could you give us a flavor of the organic growth we should expect for GN Hearing, I mean, low to mid-single digit or I don't know, even higher because I saw the 9% CAGR in your press release.

The second question is on the synergy. So it's fair to assume EUR 220 million is the stand-alone EBITDA for the organic -- for the EBITDA for GN Hearing, and we should sum up, up to EUR 70 million to EUR 80 million synergies. Is it correct?

It is absolutely, absolutely correct. Let me stress -- forgive me if I'm repeating myself. The fact that we think that this kind of range is pretty prudent. We do not include potential revenue synergies. We did not include some other cost synergies like the ones coming from indirect procurement or synergies coming from manufacturing, thanks to the additional volumes. So definitely, you should add up the -- if you take the midpoint, the EUR 70 million to the EUR 220 million after the synergy.

With regards to the projected growth of GN, GN has already provided some guidance. With regards to the revenue growth, you can take the guidance that they have provided already. I would like to stress once again the fact that GN has already demonstrated that its ability to overperform the market. If you take the chart that we presented, GN has gained a significant share in the last few years, thanks to strong execution capabilities, but perhaps even more importantly, thanks to their ability to launch on a very frequent base, very good innovative new products. In the last 3 years, as highlighted also in one of our charts, GN basically has been growing 9% compounded annual growth rate.

And Enrico, should we expect synergies from shops? They have 1,200 shops from Beltone in the U.S., if I read correctly in the press release.

Yes. But in reality, the Beltone business is not very similar. It's not exactly the same of the Miracle-Ear business. Miracle-Ear is a franchise, whilst -- and Miracle-Ear is a combination of franchise and direct shops, whilst Beltone is more reseller model. So it's different. And therefore, no, you shouldn't expect consolidation of stores because of the transaction.

Next question is from Martinien Rula, Jefferies.

It's Martinien Rula from Jefferies. I would have two questions, please. The first one is straightforward. I would like to get your thoughts around the equity raise, whether you could comment on the expected timing of that, that would be perfect. And the second question would be you've entered into a definitive agreement to buy GN's hearing business, which obviously means that you won't face any counter offer from peers. But I was wondering if you could talk about the path to getting the transaction approved by regulatory authorities and whether we should expect you to comment near-term-wise on regulatory milestone that you may have achieved -- and on the potential risk of this transaction not being approved?

Yes. No, no, we don't see risks. We don't see risks simply because, again, let me underline once again this message. We are speaking about combining the best retailer with what we believe is the best manufacturer with 100% complementarity. What I mean is that there are no overlaps basically. They have 100% of the revenues at the wholesale level, and we have 100% of our revenues at retail level. So there are no overlaps. There is -- we feel that, of course, the authority will do their work, but we feel very, very confident that this transaction will not trigger any antitrust issue. So we see basically no risk in this regard at all.

I would like also with regards to the equity raise, we will assess, of course, this also based on market conditions. I think that everyone can appreciate very clearly the rationale of -- the strategic rationale of this deal. We feel very confident about the quality of the assets that we are buying. We are buying most probably the best manufacturer in the world, which has proven its ability to deliver to beat the market. And of course, stronger together, we want to do even better.

What I mean is that combining the best manufacturer with Amplifon clinical expertise, patient insights, et cetera, et cetera, we believe that over time, this can help the new group to even innovate at a faster pace, deliver better products and therefore, to even improve our ability to beat the market and to be stronger together.

Next question is a follow-up from Andjela Bozinovic, BNP Paribas.

I'll be very quick. Just the difference between the EBITDA that you think the GN generated in 2025, which is EUR 220 million in -- based on your slides, but reading from GN's press release this morning, it's more around EUR 160 million. So just can you explain the difference?

Yes. Of course, there are no differences. And what I mean is that a matter of reporting I will allow Gabriele actually to tell you how has been reported in a different way. Absolutely.

So first of all, I mean, the carve-out, takes into consideration some item which will be not passed to Amplifon. The GN Hearing EBITDA we indicated is the carve-out adjusted pro forma. And this carve-out, of course, exclude the allocation of central cost of GN, which will not be passed to Amplifon. And the number the report includes this cost.

The other second item is about research and development depreciation. their EBITDA definition includes the cost of EBITDA -- of depreciation of R&D. Our EBITDA definition as normal does not include any depreciation or amortization, including the R&D. So that's the difference. Of course, the number is the same number.

Next question is from Susannah Ludwig, Bernstein.

Just a quick question, and apologies if I missed it, but could you confirm sort of what share of wallet or what share of units GN had in terms of your sales previously versus other manufacturers?

Yes, it was around 40%.

Gentlemen, we have no more questions registered at this time.

Thank you.

Thank you so much, everyone.

Thank you and buh-bye.

Thank you.

Thank you. We kind ask operator to disconnect. Thanks.

Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.

Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Amplifon Fourth Quarter and Full Year 2025 Results Conference Call. [Operator Instructions].

At this time, I would like to turn the conference over to Ms. Francesca Rambaudi, Investor Relations and Sustainability Senior Director of Amplifon. Please go ahead, Madam.

Thank you. Good afternoon, and welcome to Amplifon's conference call on fourth quarter and full year 2025 results. Before we start, a few logistic comments. Earlier, we issued a press release related to our results, and this presentation is posted on our website in the Investors section. The call can be accessed also via webcast and dial-in details are on Amplifon's website as well as on our press release. I have to bring your attention to the disclaimer on Slide 2, as some of the statements made during this call may be considered forward-looking statements.

With that, I'm now pleased to turn the call over to Amplifon's CEO, Enrico Vita.

Thank you, Francesca. Good afternoon, everyone, and thank you for joining us. Let me begin with a few remarks on the year that just ended, which was without a doubt characterized by market growth below the historical trend. However, we are convinced that this was primarily driven by the well-known geopolitical and macroeconomic factors, which weighed on consumer confidence.

As you know, we are also convinced that this does not reflect any structural change in our sector. In the United States, market growth was significantly below the levels we have experienced in recent past. This was mainly due to a significant decrease in the managed care channel, primarily following the reduction of hearing benefits offered by major insurance providers.

Europe also developed more slowly than we had initially anticipated with the only exception of France in terms of volume. In Q4, the global demand was likewise below historical levels. We estimate it to have been only slightly positive 1%, 2%, largely reflecting, in particular, the softer U.S. environment, that said we do not see demand fading away.

Quite the opposite, we believe a degree of pent-up demand is being built, which should gradually materialize over time, although the exact timing is not easy to predict, depending on external factors.

That's also why we expect a better environment in 2026, but I will return to this point at the end of the presentation.

In Q4, we continued to outperform the market in most of our individual key countries, including, for example, Italy, the United States, Australia, France and some others. In the quarter, our sales increased by 1.4% at constant exchange rates while foreign exchange was a significant headwind of more than 3%. On the positive note, I would like to highlight that we returned to positive organic growth across all the three regions. And that's the profitability trend also improved compared to the first 9 months.

As you know, to structurally and meaningfully enhance our profitability. At the beginning of the year, we proactively and decisively launched the Fit4Growth plan decided to best position the group for 2026 and beyond. So let's go to the next chart for a more detailed update on this.

Fit4Growth is progressing very well and is currently tracking a high above our initial plan, at the high end of our target range of 150 to 200 basis points of adjusted EBITDA margin improvement by 2027. I can also anticipate to you that we expect to see tangible results of our work already in this first part of 2026. In 2025, we closed or consolidated approximately 160 nonperforming clinics across 10 countries, while implementing the related head count efficiencies.

These actions are meaningfully improving the overall efficiency and quality of our sales network. As of today, we have also identified additional efficiency and optimization opportunities for 2026, as you can see in the chart.

Additionally, we have implemented a series of back office optimization initiatives, leading to an overall efficiency of approximately 100 headcounts during the 2025 with further opportunities now identified for 2026. Moreover, we delivered a significant EUR 30 million reduction in CapEx in 2025 compared to 2024 driven by rigorous prioritization of high-return projects while fully preserving strategic investments. Additionally, we are targeting a further reduction in 2026 reflecting the completion of some important transformative IT programs over the last years.

Finally, we conducted a comprehensive strategic review of the attractiveness of all our business segments and related Amplifon competitive positioning. As part of this portfolio review on March 2, we completed the divestiture of our loss-making business in the U.S.. -- in the U.K. In addition, a managed care contract in the United States was terminated due to the anticipated structural margin compression in the context of decreasing volumes. Gabriele will provide further details on both profitability drivers in the next session.

Finally, during the first quarter of 2025, as you know, we significantly rationalized our nonstrategic wholesale operations in China. As already shared, these actions are aiming at sharpening our focus on core business segments and reallocating capital towards the group's highest potential profit accretive growth opportunities.

Considering the progress achieved and the additional opportunities identified, the Fit4Growth plan now targets an adjusted EBITDA margin run rate improvement at the upper end of the previously communicated 150, 200 basis points range by 2027. Importantly, the expected nonrecurring cash cost to implement the plan are now expected at approximately EUR 25 million in total compared to the EUR 35 million initially anticipated. This cost will be incurred between '25 and '26, of which circa EUR 9 million had already been recognized in 2025.

With that, I will now hand over to Gabriele, who will walk you through our performance in more detail.

Thanks, Enrico, and good afternoon to everybody. Turning to Chart #6, we can appreciate more in detail, the two latest development within the portfolio optimization stream of Fit4Growth. Firstly, on March 2, following a comprehensive review of our business segments, we completed the sales of our U.K. business, which included a network of approximately 100 direct clinics across England and Wales, and the workforce of around 260 employees. It generated a revenue of EUR 33 million in 2025, and as you know, was very dilutive to the group's financials.

Consequently, the divestment is expected to positively contribute to Amplifon Group's EBITDA margin, while it is expected to generate one-off cost with no cash impact of around EUR 18 million in the first quarter of 2026. Related to the accounting effects of the re-class to the income statement of cumulative negative amount of exchange differences, previously recognized in the equity.

Secondly, since January, an agreement with an insurance company in the U.S. Managed Care business was terminated as we received a progressively significant request for price reduction that were not compatible with sustainable profitability over time. The recurring discount dynamics being requested would have led to a structural margin compression in a context of decreasing volumes in mature segment with limited growth prospects.

This contract had a marginal impact on the group's total revenues in the region of 1% and no one-off are expected to the termination of this agreement. Of course, we continue to operate in the insurance segment now with a more diversified and selective portfolio characterized by different profitability profiles.

Moving to Slide 6. We have a look at the group profitability in full year 2025. Revenues grew 1.7% at constant FX with flat organic growth, reflecting a significant improvement in the second half of the year. Despite the strong comparison base of 7% growth at constant FX in '24 versus '23 and the global market demand still below historical level. In particular, the U.S. private market was flat in 2025, primarily due to the negative performance of the insurance segment, while the European market reflected the low consumer confidence.

M&A contribution was 1.7%, reflecting the acquisition of 250 locations and the closure of around 160 clinics together with the substantial rationalization of the non-core wholesale business in China within the Fit4Growth program. FX was a significant headwind of minus 2.3% due to depreciation of the Euro versus the Australia, U.S. and New Zealand Dollars, bringing the growth of current effects to minus 0.6%.

Adjusted EBITDA came in at EUR 540 million, with margin of 22.6%, 90 basis points below the previous year due to the lower operating leverage the dilution effect of the growth of Miracle Ear Direct Network in the U.S., the less favorable country mix in EMEA and the higher marketing investment to further strengthen our distinctive assets.

Moving to Slide 7, we have a look at our financial performance in Q4 '25. Revenues were up 1.4% at constant FX versus Q4 '24, with organic growth at 0.6% and back to positive territories in all the three regions, although still reflecting the global market demand below historical growth levels. M&A implemented change contribution was plus 0.8% due to the acquisitions as well as the implementation of the Fit4Growth product.

FX was a material headwind of minus 3.3%, increasing throughout the year. Adjusted EBITDA was EUR 145 million, with margin at 22.3%,90 basis point below prior year due to the lower operating leverage, the growth of Miracle-Ear's Direct Retail and the higher marketing expenses.

Moving to Slide 8. We have a look at the performance. In the quarter, revenue grew at constant FX by 1.6%, with organic performance at plus 0.4% improving sequentially. In this context, we posted a strong and above market growth in France and the solid organic growth in Spain, while Germany was in negative territory.

M&A and perimeter change was plus 1.2%, reflecting M&A mainly in France, Germany and Poland, and selected closures in France, Germany and Spain. Adjusted EBITDA was EUR 107.5 million, in line with the Q4 2024 with margin at 24.6%, 40 basis points below Q4 '24 due to lower operating leverage.

In the full year, revenue growth was plus 1.5% with organic performance at minus 0.6% and the M&A contribution at plus 2%. Adjusted EBITDA was circa EUR 430 million, with margin at 26.6%, 70 basis points below last year.

Moving to Slide #9, we have a look at the performance in Americas. Revenue growth in the quarter was plus 2% at constant FX, while FX headwind was a significant minus 9.9%. Organic growth was positive for plus 0.9%, thanks to the strong performance of Miracle-Ear Direct Retail, despite the very high comparison base with double-digit organic growth in U.S. in Q4 '24 and a slightly negative private market in the U.S. due to the underperformance of the insurance segment.

M&A and perimeter change was positive for 1.1% reflecting the acquisition in the U.S. and some selected closures in the U.S., Canada and Mexico. Adjusted EBITDA was EUR 33.8 million, with margin at 26% versus 26.8% last year due to the growth of Miracle-Ear's Direct Network in the U.S. and the lower operating leverage.

In the full year, revenues were up 4% at constant FX, driven by a solid and above market organic growth despite the remarkable '24 comparison base. Adjusted EBITDA was EUR 116.4 million, with margin at 23.5%, 150 basis points below prior year for the reasons I just mentioned.

Moving to Slide 10. We have a look at the Asia PAC performance. In the quarter, revenue performance was minus 0.3% at constant FX, reflecting plus 0.8% organic growth, improving 270 basis points over Q3 despite the soft underlying market due to lower consumer confidence.

In this context, we posted a solid and above market performance in Australia, which more than offset the negative performance in New Zealand and China. M&A and perimeter change was minus 1.1%, reflecting the carryover from the implementation of the Fit4Growth program.

FX headwind was a significant minus 8.4% driven by the depreciation of all the regional currencies versus the Euro. Adjusted EBITDA reached EUR 20.9 million, with margin at 24.4% versus 25.4% last year, due to a lower operating leverage and higher marketing investments.

In full year '25, both organic performance and perimeter change were flattish, while FX was a headwind 6.4%. Adjusted EBITDA was EUR 85.9 million with margin at 24.9%, 130 basis points below '24 due to lower operating leverage.

Moving to Slide 11. We appreciated the full year income statement. In '25, total revenue came to EUR 2.4 billion, an increase of 1.7% at constant effect versus prior year. Adjusted EBITDA was EUR 540 million with a margin of 22.6%, 90 basis points below '24 for the just mentioned reasons.

D&A, excluding PPA, were at EUR 259 million versus EUR 252 million last year, increasing around EUR 7 million in light of the investment in network, digital transformation and innovation, thus a less pronounced growth versus the growth recorded in the previous year. This led the adjusted EBIT to EUR 281 million versus EUR 314 million last year.

Net financial expenses amounted to EUR 63.7 million versus EUR 59.2 million, in '24, primarily due to the interest on higher net financial debt and interest on lease liabilities following the strong M&A and network expansion.

Tax rate posted a 70 bps increase versus '24 leading adjusted net profit at around EUR 159 million versus EUR 188 in '24.

Moving to next chart, Chart 12, we see the profit and loss evolution of Q4. Total revenue came at EUR 652 million, an increase of 1.4% at constant FX versus prior year. Adjusted EBITDA was EUR 145.5 million, with margin at 22.3%. D&A, excluding PPA, decreased by around EUR 6 million, leaving the adjusted EBIT to EUR 82 million with margin of 12.6%.

Net financial expenses were unchanged year-on-year at EUR 15.5 million, leaving profit before tax at around EUR 67 million, tax rate ended at 25.6%, leading adjusted net profit to EUR 49.5 million versus EUR 53.8 million last year.

Moving to Slide 13. We appreciate the cash flow evolution. Adjusted operating cash flow after lease liability was in the period equal to EUR 428 million, EUR 28 million below the EUR 456 million achieved last year. Net CapEx decreased by around EUR 10 million to circa EUR 117 million leading adjusted free cash flow to EUR 174 million. Net cash out for M&A was EUR 62 million versus the exceptional level of EUR 193 million in '24. The cash out for share buyback program was EUR 180 million -- EUR 108 million.

NFP ended slightly above EUR 1 billion after strong investment for over EUR 350 million in CapEx, M&A, dividend and buyback.

Moving to Chart 14. We have a look at debt profile trend and the key financial measures, as mentioned, the net financial debt ended slightly above EUR 1 billion, with liquidity accounting for EUR 310 million, shorter debt accounting for around EUR 365 million and medium long-term debt accounting for around EUR 990 million.

Following the IFRS 16 application, lease liability were around EUR 486 million, leading the sum of net financial debt and lease liability to EUR 1.53 billion. Equity ended up at around EUR 1 billion, mainly due to high FX translation differences at around EUR 80 million, dividends and share buybacks.

Looking at financial ratios. Net debt over EBITDA ended at 1.92x versus 2.09x in September and 1.63x in December last year after the strong investments in CapEx, M&A, share buybacks and dividends. Net equity over debt ended at 1.05x.

I will now hand over to Francesca for some comments on our sustainability path during 2025.

Thanks, Gabriele. Let's now discuss our further significant step-up in our sustainability agenda. First, in March 2025, we published our first sustainability reporting in full compliance to the new CSR requirements and ESR standards. In the next weeks, we will publish the 2025 consolidated sustainability reporting.

In 2025, we reached important milestones in our climate strategy. We obtained SBTi validation of our climate targets. We reduced our total emissions by 14% and increased the share of energy from renewable sources to 83%. During the year, we also focused on our most important asset, our people.

In 2025, we delivered around 600,000 hours of training, confirming our constant attention to skill development and professional growth. This commitment, together with other important initiatives enabled us to obtain the global Top Employer 2026 Certification, an excellent recognition awarded only to a small number of organizations worldwide.

Finally, we continue to conduct ESG assessment on our direct and indirect suppliers, and continued to successfully integrate our sustainability targets within our financial strategy. Only in 2025, we subscribed 5 new ESG-linked credit facilities for a total amount of EUR 400 million. We look at, therefore, forward to our journey toward an even more sustainable company.

With this, I leave the floor to Enrico for the outlook.

Thank you, Francesca. And so we have now reached the final slide of today's presentation. While the market growth in 2025 was below historical averages and our initial expectations we executed several meaningful initiatives to accelerate the future revenue growth and to structurally enhance profitability.

Looking ahead to 2026, starting with the market outlook. In Europe, after 3 consecutive years of growth below historical levels, we expect a gradual normalization. In the United States, we anticipate the recovery supported by an easier comparison base and a more positive private market environment.

As a result, we foresee a gradual improvement in the global market demand now expected in the region of plus 3%. In this context, we aim to outperform in each of our individual key markets with organic growth showing solid progressive improvement compared to 2025, driven by better market conditions, the initiatives implemented over the past year and the benefit of our marketing investments.

On profitability, we aim to deliver a material improvement supported not only by a more favorable market environment, but also by the continued execution of our Fit4Growth program, whose results are expected to be strong and already visible in the first part of this year. With that, we thank you for your attention, and we are now happy to take your questions.

[Operator Instructions] The first question is from Andjela Bozinovic, BNP Paribas.

My question is on the guidance. Can you maybe help us understand the guidance a bit better? So on revenue growth, you expect the market to grow at 3%? And what level of outperformance should we assume? And given the divestitures you have announced, can you confirm that the base that we should base our assumptions on is lower?

My math points to around 3% lower base, but any feedback here would be great. And also on the margin guidance, you're calling out for the high end of 150 to 200 basis points improvement from Fit4Growth. Can you update us on the phasing between 2026 and 2027 of this? And if you can share any indication of the quarters in 2026? And should we assume any operational leverage on top of it for the margin improvement in 2026?

Okay. So let's start with the outlook on revenue. I think that we have provided you with all the different key drivers for our 2026 outlook. In particular, as I said, we expect a gradual improvement in the global market and which is an improvement that we see both in the EMEA region, but also in the U.S. As said also, we aim to overperform in each individual market as we did also in 2025.

What I mean is that we are pretty confident that in all our key individual markets like in Q4, like in Italy or in France or in the U.S., we have outperformed the market. And therefore, we have not lost share. On the contrary, we believe that in this -- in the majority of the key markets in which we operate, we have gained share. Of course, we are not guiding today on the revenue per se. But we are saying that the goal for us is to overperform in each individual market.

And of course, the overall result will depend also from the different growth rates that we will see in these markets. Then on the top line, of course, you should expect the effect of the divestiture of the U.K. You should expect also the effect of the termination of the contract in the U.S. We should -- you should expect also some carryover of the Fit4Growth initiatives that we have, I think, shared on the chart.

But you should also add on top of the solid organic growth that we envisage, you should also add a positive contribution coming from M&A. In particular, as you know, in 2025, we have slowed down our M&A investments. This is mainly because we wanted to focus all our markets, all our organization on the execution of Fit4Growth, which is going very well. And I'm very happy about how our organization have implemented the different streams.

So we are now looking at basically complete the vast majority of our activities in terms of Fit4Growth in the market in the first half of 2026, so that we want to restart with M&A, let's say, starting from the second quarter of this year onwards. So basically, plus and minus should be more or less offsetting each other in terms of, let's say, M&A or perimeter change.

And then you should expect the growth coming mainly from the organic growth, which, as I said, is expected to be definitely improving versus last year and to improve solidly versus 2025. With regards to the profitability for now, we are not guiding on a specific target for 2026. We are guiding on our Fit4Growth program, which, as I said, is progressing extremely well, very happy.

You should see the benefit of all the 4 streams that we have highlighted in our chart. So the network efficiency enhancement, the back office efficiency, the cost containment program as well as the strategic review of all our business segments. So that we expect already a strong contribution coming from Fit4Growth already in 2026 and in the first part, I would say, of 2026.

Thank you. Operator, can we move to the next call as we have a long queue. So again, in the fairness to everybody, please keep to two questions maximum.

The next question is from Niccolò Storer, Kepler Cheuvreux.

So my 2 questions. The first one is on possibility of exiting other countries. Do you think that after the U.K., you are done? Or should we expect something else? And also possible to see further disengagement from managed care in the U.S. or you are done with this contract termination? Second question is on profitability.

And maybe if you can help us understanding profitability evolution net of Fit4Growth contribution. And so maybe upon which growth level should we expect margin expansion in 2026. And linked to that, I saw a lot of nonrecurring costs on 2025 adjusted EBITDA, if you can comment a bit on those.

Yes, absolutely. So with regards to the first question, so basically, no decision -- no other strategic decision or step has been formalized or taken, I would say. And -- but of course, we want to build a much stronger profitability profile. We want to invest where we have, let's say, the best opportunities to win, which means where we have strong brands, where we have strong networks, et cetera, et cetera.

With regards to managed care, now we have a much more, I would say, diversified client base, which makes us much more comfortable also looking forward. With regards to the profitability, I would say that you should expect -- now you should expect a significant contribution from -- as I said before, from Fit4Growth already in 2026 and also in 2027.

Of course, the profitability increase will be also a function of the organic growth and therefore, of the operating leverage going forward. With regards to the last part of the question and therefore, the EBITDA adjusted, I would leave to Gabriele that can give you more color.

Yes, absolutely. So it's related to some different topics. Fit4Growth, as you can imagine, is by far the most important. I mean, as Enrico was mentioning, we are ahead of the plan. And so I mean, we started with the cost related to the closure of the shops and the optimization of the back office. The second important item during 2025, we wanted to have an homogenization and the standardization of the way we take the inventory reserve across the different country.

So I mean, it was the first year in which we have a common policy across all the 25 countries where we operate. And this basically led us to an adjustment in terms of inventory reserve. We also had a couple of topics to be addressed coming from the past, one in the U.S. and one in Australia. Apart from these 4 buckets, I mean, normally, we put here the cost related to the integration of some M&A.

So during 2025, but also during 2024, as you can see from the comparative, basically, there are the costs related to M&A, especially. These are, I would say, the 4 -- the 5 buckets. It's, of course, something that we do not expect is going to happen by cash point of view in the coming year.

The next question is from Julien Ouaddour, Bank of America.

Good evening, everyone. So I got to stick to two. The first one is -- I mean, I just want to try to understand the organic growth there. So it seems that the global hearing edge market was growing I mean, roughly around 2% plus in 4Q. You reported 0.6% organic growth in the quarter. I mean, you said that you gained share in key markets.

Does it mean that you're losing shares in other markets on a same-store basis? I just want to reconcile basically your performance and the market growth. And how can you basically be back to grow, again, at least in line with the 2% market growth in '26? That's the first question.

The second one is on Amplifon Hearing Healthcare within your U.S. business. Could you remind us how big it is? And then, I mean, following the termination of one contract that you announced, could you just consider maybe exiting more, as I imagine, I mean price pressure is just happening everywhere or maybe even if it's in completely Managed Care? I mean is it something that you consider now?

Well, I'll start with the second question, which is definitely no. What I mean is that we are not planning at all actually to exit to Managed Care. Actually, we have now a much more solid business, I think, because it is -- it is built across many different clients and perhaps to have one big client, of course, would have led to a situation where the kind of price pressure that we received was not any more compatible with our targets in terms of profitability.

So today, we are definitely much more, let's say, comfortable with the kind of margin profile that we have got across many different smaller clients where we can definitely have a much better profitability profile. So we are not planning to reduce further. We are not planning at all to exit Amplifon Hearing Healthcare.

Actually, we have a renewed effort to grow there, but perhaps in smaller accounts with a different margin profile, focusing on the quality of the service and therefore, with, let's say, more positive prospect of profitable growth.

Then with regards to our organic growth in Q4. Yes, I mentioned that the global market actually to be slightly positive. But we have to -- and I mentioned also that we are pretty confident according to the info that we get, which, of course, have some degree of let's say, variability because they are selling data, et cetera, et cetera. But we are pretty confident that we have gained share in basically all the major markets in which we operate.

I take you, for example, one market, which was Australia, Australia in Q4 was pretty negative and mid single-digit negative, we were positive. So the difference between our organic growth and the growth that we reported is mainly due to the market mix.

For example, in Q4, the U.K. market was positive, which, unfortunately for us, was a very small market, but also in terms of channels, as far as I understand, NHS was very positive, we do not operate in the NHS. So there is a mix effect, which we expect in a way to improve in terms of mix in 2026.

Also in consideration that some effects like, for example, we mentioned in particular in Q2 the anniversary of the COVID in a couple of very important markets for us like Italy or Spain in 2026, we should not have this kind of negative effects. And therefore, we see these markets performing better than in 2025.

So the difference is mainly related to market mix. But as I say, if I look at France, we are very confident -- according to the data that we get, we are very confident to have gained share. If I look at Australia, I said we are also in the U.S., actually, the market was slightly negative, and we were slightly positive. So even in Spain, we have posted a solid growth. So we are I think gaining share in the different individual markets, the mix of the market was not very favorable to us, but we expect this trend to change already in 2026.

The next question is from Domenico Ghilotti, Equita.

Two questions on my side. First, I'm trying to understand that the European performance because I was expecting more sizable contribution from France. So is it fair to assume that Europe was down if you exclude France?

And on the expected recovery, I'm trying to understand if you see signs of market recovery on the funnel, for example, or on the engagement with clients? So what is driving your confidence given also that consumer confidence is very -- is still very depressed if I look around.

Yes. So with regards to France, in Q4, according to the data that we get, the market was up double digits. However, this is volume growth wise in value terms, you should reduce this number at least by 2 or 3 percentage points. Then with regards to why we are envisaging a better market in 2026.

I think that there are some elements that weighed on 2025, which are going to disappear. It is true what you said, but I think that in Italy, in Spain, in Portugal, the anniversary of the COVID had a significant impact intently in Q2, but also a small impact also in Q4. You may recall much smaller impact also in Q4. You may recall also the lowdown in Q4, et cetera, et cetera.

And this kind of factors, of course, are not going to be there anymore. Actually, we should see the pickup the anniversary of the pickup that we have experienced in these markets in 2021. So I expect this market to perform better also on top of an easier comparison base.

In the U.S., we take another very big market. The main driver for the poor performance of the U.S. market, which ended at the end of the year with basically zero growth was the insurance channel, which, as I said, was basically related to some big insurance carrying back some benefits plans and probably on the commercial side also, there was some cost caution from employers that may have played a role.

I think that now this kind of negative performance of the insurance channel should soften. What I mean we expect a better insurance market in 2026. So I think that in 2026, we had some key factors, which affected some of our key markets and which are not should not be there anymore in 2026.

The next question is from Veronika Dubajova with Citi.

My questions I just want to circle back to sort of your comments around outperformance in each of the markets. And obviously, and we quite appreciate there we get volume data, you're looking at value. We don't have country level information. We only have regional information. But just looking at your growth in the Americas, if I strip out Argentina change, you're underperforming the market. If I look at Europe, it seems like you're underperforming the market. Can you maybe talk a little about...

I didn't guess at this point about what you mention Argentina...

If I look at the Americas, and I remove Argentina, it looks like the U.S. is down in a flat market for you. If I look at Europe, obviously, you seem to be putting up much lower growth rates than the manufacturers are in Europe. So I'm just trying to understand where this confidence of outperforming the market is coming from?

And I guess if you can give us a little bit of reassurance that, that is indeed happening. Because looking at your performance, and it's not just this quarter, unfortunately, right? It's now been a trend for a couple of quarters where, certainly from the data that we see from the outside, it does look like you are not growing in line with the market. And have you done some more just sort of absolutely verify that you are growing in line or ahead of the market? Or is there something that needs to change in terms of lead generation, et cetera, that you need to address? I know it's a very long question, but...

It's very clear. And I think that it's a very important question. But I would answer with a definite, no. What I mean is that we are absolutely convinced that overall, we are performing at least in line with the market, if not better. What I mean is that if you take, for example, as I said, Australia, according to the official data Australia in Q4 was very negative between 5%, 6% or even more than that. We had a positive organic growth.

If you take France, as I mentioned, the market growth in France was double digits, but we performed in terms of units better than the market, thanks to all the work that we did last year, et cetera, et cetera. If then you take also the U.S. In the U.S., we were slightly positive in the context of a market which was, again, according to HIA data slightly negative. And this is a data for Q4, as I say, it is related to sell-in, but also in the full year and the U.S. market growth was basically 0, as I said, mainly driven by the insurance segment. So no, I'm very confident that we have at least held our share.

I mentioned in the past that we were not performing in line with the market in Spain. But now we see the results of all, we start to see the results of all our work -- on the work that we have done and the new management team has done in part in Q4, we posted the solid growth. So we are pretty confident that definitely we are not losing share. Of course, as I said many times, there is a mix difference if you compare our performance with the manufacturers, both in terms of markets, as I said, for example, the U.K., for us, it's very -- was a very small market or in terms of channels, which, as far as I understand, and performing very well, like the NHS or like -- or performed very well like [ VA ].

Enrico, can I just ask, you didn't mention Italy, which is obviously your single biggest market in Europe. How are you performing in Italy versus the market?

The market, I'm absolutely sure that we performed in -- at least in line with the market, if not better. But as I say, the market in Italy, especially in Q2, if you look at the full year, was very negative for the anniversary of COVID in 2020, but also in Q4 was not really very positive. So we are expecting a much better market in Italy in 2026 for the anniversary of the pickup in the month -- in the month that we had in 2021. So overall, we expect a more favorable mix of market in 2026. I'm absolutely convinced that specifically to Italy, we have not lost the share.

The next question is from Oliver Metzger, ODDO BHF.

The first one is general specific one. So your expectations of 3% for '26 are still below the historic growth level. The base in '25 is super low historically, we saw potentially the weakest market here in decades. So -- but normally, there was always a return to the mean. Now expectations have lowered. So what has changed in your view of the hearing aid market? That's question number one.

And question number two, you talked a lot about '25 and the regional performances. And you gave a quick hint on U.S. for '26, but can you also give a more profound view about the different regions? How -- which performance do you see for them? And what are the drivers?

Thank you for the question. So with regards to the first question, the 3% market. I see -- I see that some of our suppliers have even a more positive view on the total market. I think that 3% is a fair assumption for 2026. So also in consideration that we can't say that the current macroeconomic and geopolitical environment has no effect at all on our sector and on our patients.

As I said, we expect a better market in 2026 because in 2025, we had some material effect on some key markets for us. I mentioned the U.S. I mentioned the decline of the insurance channel in the U.S. I mentioned Italy, I mentioned Australia, et cetera, et cetera. So we expect a better market also on the basis that in 2025, we had some specific events and that also from a comparison base point of view, we should be in a better place in 2026.

With regards to the growth in 2026 by region from an organic viewpoint, we expect to improve our organic growth, I would say, across the different three regions with no specific -- no specific region going much faster than the others.

The next question is from Martin [indiscernible] Jefferies.

I hope that you can hear me okay. I would ask two questions, please. The first one is on the guidance itself. It's quite unusual that you guide in such a qualitative manner. So I would like to understand just the rationale behind that?

And still on that, should we understand that the level of visibility you have on the expected market recovery is low given you have not quantified what we should expect for you to post into 2026. And I would probably leave some time to answer that question before asking the second one.

No. Well, in terms of outlook, I think that we have given you many different indications. Of course, it's early days. What I mean is that just 2 months of year have ended, and you know very well that also March is a very important month. So we wanted to see also how we will end Q1 to give you maybe a better granularity at the end of the Q1. I think that this is a pretty fair and in consideration of the fact that you know very well that I mean the market in these days are not extremely predictable.

But we assume that we can give you more granularity at the Q1 results when at least we have the visibility on the Q1 actual and also April sales. So we prefer to give you this kind of more visibility at that time. But anyway, I think that we have given you also very precise indications in terms of what you should expect in terms of market growth, what you should expect in terms of M&A or perimeter change.

So I think we have also saying that we expect to improve materially our profitability already in 2026. So I think that we have given a lot of different indications that could be useful for your models.

Okay. And on the second question, is about just getting some insights on your regional growth expectations that are baked into the guidance, and also, I would like some insights on the phasing as well. And if you could do a bit of a focus on EMEA and talking a bit more about how do you think about France and Italy specifically for 2026 knowing that, as you said, Italy was apparently very negative.

The market was very negative in 2025 and knowing as well the fact that in 2026 and more specifically on Q2 2026, we should see the annualization of the strong growth that we've had in France?

You are -- you are right. What I mean is that definitely, in Italy, we expect a much better market in 2025 because we will not have the effects that weighed on 2025 due to the anniversary of COVID. Actually, we should have more returning customers coming from the increase of -- that we experienced in 2021, basically starting from the Q2 I would say, first months of 2026.

With regards to France, I think that you should expect the continuation or anyway, a good performance of the French market due to the anniversary of the reform in the first 3, 4 months of the year. Then, of course, we will be anniversarying the increase that we had in the market in 2025.

The next question is from David Adlington, JPMorgan.

First off, I want to make sure we're all on the right page in terms of the base that we're working off in terms of both the sales and the EBITDA. So the total impact of the U.K. disposal, Managed Care and [indiscernible] disposals both on the top line and also EBITDA, please?

Yes. Well, so in terms of top line, as I said, you should expect more or less basically net impact of the divestiture of the U.K. the Managed Care, et cetera, et cetera, to be offset to be almost offset entirely from our M&A. As I said, we are planning to restart, I would say, in our M&A efforts, bolt-on M&A efforts are basically starting from Q2 as I said, in the second half, in particular of last year, we have slowed down significantly our bolt-on acquisitions because we wanted to focus our organizations on the Fit4Growth program.

But we are ready to restart as soon as we have completed this program. We thought that it would not make any sense actually to continue to acquire shops in a moment in which we were rationalizing our network.

With regards to profitability, as I said, we are not now giving you a specific number, but definitely, we expect a material improvement in 2026. So we already started to see the benefits of Fit4Growth which should give the full benefit in 2027, but with a material impact already in 2026.

Next question is from Susannah Ludwig, Bernstein.

I have a question in regards to the Fit4Growth program savings. Do you expect the full savings to drop down to margins? I know you also mentioned it will be a function of organic growth. I guess, said otherwise, what level of organic growth do you need to sort of sustain margins at current levels and avoid sort of de-leveraging impacts?

No. Well, thanks to Fit4Growth, we are envisaging to grow our margin even if -- I mean, with 0 organic growth. What I mean is that this is a program that Thank God, we have initiated almost 1 year ago and is going to -- is going to have a positive impact already this year. So what I say is that if on top of Fit4Growth, if we see a good operating leverage in coming from organic growth. Of course, we can also have a better profitability beyond Fit4Growth.

I guess, just to be clear, even if -- even if you have flat organic growth, you still can sort of have 150 to 200 basis points of margin expansion due to the Fit4Growth improvements?

Let me say that the 150, 200 basis points is the impact of Fit4Growth -- is the impact Fit4Growth per se.

We'll have one more question from Giorgio.

The next question is from Giorgio Tavolini Intermonte.

The first one is on M&A. After exiting the U.K. if you are looking to enter new geographies to reduce the exposure to EMEA, maybe focusing more on strengthening the U.S. direct to retail and so on?

The second one is on China contribution in 2025. I saw you are also planning a rationalization of non-core sale in China. So if you can clarify. And the very last one, if I may, is on the Fit4Growth. Should we expect benefit to be mostly embedded in each region profitability or also in terms of lower central costs?

Thank you for the question. So in terms of new geographies, no, we have no plan to enter new geographies. Of course, as you rightly pointed out, for sure, U.S. will be our first area of focus in terms of growth and in terms of M&A. So for sure, we are envisaging a situation where we will already start bolt-on M&A in the U.S. in 2026.

With regards to China, in reality, the decision to exit the wholesale business we shared already in Q1. So it's something that has been already done basically last year. So that is something that is already on the base of basically almost all 2025. In China, we see the market stabilizing. So we also there see a better environment in 2026.

With regards, instead of Fit4Growth, can you please remind me which was the question on Fit4Growth?

Yes, of course, of course, absolutely, absolutely. For sure, we are looking at back of it, not only in the market, but also in headquarters. So both in the corporate headquarter, but also in corporate in the quarter of the market.

Thank you. So we have taken all the questions. This concludes today's call. Thank you all for your interest and attendance. We kindly ask operator to disconnect.

Thank you so much, everyone. Thank you. Bye.

Ladies and gentlemen, thank you for joining. The conference call is now over, and you may disconnect your telephones.

Good evening. This is the Chorus Call conference operator. Welcome, and thank you for joining the Amplifon Third Quarter and 9 Months 2025 Results Conference Call. [Operator Instructions]

At this time, I would like to turn the conference over to Ms. Francesca Rambaudi, Investor Relations and Sustainability Senior Director of Amplifon. Please go ahead, madam.

Thank you. Good afternoon, and welcome to Amplifon's conference call on third quarter and first 9 months 2025 results.

Before we start, a few logistic comments. Earlier today, we issued a press release related to our results, and this presentation is posted on our website in the Investors Section. The call can be accessed also via webcast and dial-in details are on Amplifon's website as well as on our press release.

I have to bring your attention to the disclaimer on Slide 2. As some of the statements made during this call may be considered forward-looking statements.

With that, I am now pleased to turn the call over to Amplifon, CEO, Enrico Vita.

Thank you, Francesca. Good afternoon, everyone, and thank you for joining us once again today.

As usual, let's begin with a general overview of the global market performance. Starting with the European markets. In France, the market continued to record solid volume growth, though at a slower pace compared with Q2. Official data indicate a volume growth of around 6%, which we believe reflects the impact of the recent political events you are all aware of. On the other side, on a positive note, Spain and Italy, 2 of our key markets improved versus the second quarter, showing encouraging trends. As we mentioned during our last update, the second quarter was the most affected by the 5 years anniversary of the strict COVID lockdowns in 2020, which had significantly reduced the returning customer base. Germany also delivered a positive performance.

Overall, we estimate that the European market growth in Q3 was around 2%, 2.5% in volume terms, less in value because of the category mix in France. Given these dynamics, we expect the gradual recovery in Europe to continue moving forward and particularly in 2026. When we will see the anniversary of the market rebound of 2021, impacting positively on our returning customer base, particularly in Southern Europe.

In the U.S., the market growth was around 2% in the third quarter, which is still below historical average. In particular, the private pay channel was more positive, while the insurance channel was around minus 1%.

Over the first 9 months, the overall U.S. market was flat as recent uncertainties clearly impacted the consumer behavior, especially in the first quarter, but also and mainly due to the insurance channel decreasing by approximately minus 4% over the period, driven by a reduction in hearing benefits offered by health plans after a strong push in past years. That said, we continue to expect a gradual improvement in the coming months, driven primarily by the Private Pay segment.

Moving to APAC. Here, we have yet to see a clear improvement in trends, both markets in Australia and in New Zealand remained in negative territory. All in all, we estimate that the global market grew by around 2% in volume in Q3, and by slightly less than that in value according to market weights.

Let's now turn to our performance within this market context. Our sales grew by 2.4% at constant exchange rates, while the appreciation of the euro versus nearly all major currencies in our footprint had an impact of around minus 3%. Organic growth showed a material improvement of 250 basis points versus Q2, returned to positive territory, close to plus 1%, and we believe that we have consistently outperformed across most of our key markets. This growth was mainly driven by EMEA's return to positive organic growth, thanks to a significant improvement in the performance in Southern Europe, Italy, Spain and despite a lower contribution coming from France versus Q2.

It is also important to highlight our strong performance in the U.S., in particular with Miracle-Ear’ Direct Retail where we continue to outperform the market.

In Australia and New Zealand, too, despite respectively, a flattish and the negative organic growth, we believe we have outperformed both markets. The contribution from M&A activity was plus 1.6%, reflecting here the net effect of the acquisitions and the selective closures carried out as part of our Fit4Growth program.

Turning to profitability. Our adjusted EBITDA margin was 19.1%, down 110 basis points year-over-year. This reflects an improving trend compared to Q2 and was primarily driven by lower operating leverage, our continued marketing investments to support our brands and still though to a lesser extent than in Q2, less favorable geographical mix.

Finally, we reported an adjusted net profit of approximately EUR 19 million, reflecting the seasonally smallest quarter of the year. Let me now provide a brief update on our Fit4Growth program, which, as you know, aims to deliver a run rate improvement of approximately 150 to 200 basis points in adjusted EBITDA margin by 2027. This program is progressing well and is currently ahead of the initial plan, particularly with regards to the optimization of our store network. We continue to track progress closely and remain fully confident that these actions will position us for the next phase of sustainable growth.

With that, I will now hand it over to Gabriele, who will provide more details on our financial results.

Thanks, Enrico, and good evening to everybody. Moving to Slide #4, we have a look at our group financial performance in Q3, already summarized by Enrico. Revenues grew 2.4% at constant FX, with organic growth back to positive at circa 1%. Posting a 250 basis point improvement compared to Q2 '25. Despite the reduced growth of the French market, the global market growth is still below historical level and a strong comparison base as in Q3, '24, revenues grew at constant FX by 8% versus Q3 '23.

M&A contribution remained sustained at plus 2%, while the network optimization related to Fit4Growth had an impact of around minus 50 basis points due to the carryover from H1 and the further selected closures in U.S., France, Germany, Canada and Australia in Q3, thus leading to M&A and a perimeter change of around 1.6 percentage points.

FX was a significant headwind of minus 3.1% due to the appreciation of the euro versus the U.S., Australian and New Zealand dollars, bringing growth at current FX to minus 0.7%. Adjusted EBITDA came in at EUR 107 million, with margin at 19.1%, a decrease of 110 basis point for the lower operating leverage, the higher marketing investments and the dilution from the fast growth of Miracle-Ear Direct Retail.

Moving to Slide 5. We have a look at our financial performance in the first 9 months of the year. Revenues were up 1.8% at constant FX versus 9 months '24, with organic performance at minus 0.3%, reflecting the very high comparison base and 1/3 in day less versus last year and the global market demand below historical growth levels.

M&A and perimeter change contribution was 2.1% with around 230 locations acquired year-to-date and selected closures following Fit4Growth implementation. FX was a headwind for minus 1.9%, increasing throughout the period. Adjusted EBITDA was EUR 395 million with margin at 22.7%, 90 basis points below prior year, primarily due to lower operating leverage and the fast growth of Miracle-Ear Direct Network in the U.S.

Moving to Slide 6. We have a look at EMEA performance. In the quarter, revenue grew at constant FX by 2.3% with organic performance at plus 0.3% with an improvement of 280 basis points compared to Q2 '25. Despite a lower contribution of the French market, which grew around 6% between July and August, while Southern European markets showed a gradual improvement in the quarter.

In this context, we posted a strong and above market growth in France and an improved organic performance in both Italy and Spain. M&A and perimeter change was plus 2%, reflecting M&A mainly in France, Germany and Poland and select the closures of nonperforming locations in France and Germany. Adjusted EBITDA was EUR 82.2 million with margin at 23.3%, 70 basis points below Q3 '24 due to lower operating leverage and still less favorable geographic mix, although to a lesser extent.

In the 9 months, revenue growth was 1.4%, with organic performance at minus 1% and M&A contribution at plus 2.4%. Adjusted EBITDA was circa EUR 305 million with margin at 27.3%, 80 basis points below last year.

Moving to Slide #7. We have a look at the performance in Americas. Revenue growth in the quarter was plus 5.6% at constant FX, while FX headwind was a significant minus 8%. Organic growth was strong and above market at 4.3% despite the very high comparison base, as in Q3 '24, organic growth was plus 12% versus Q3 '23. And the market performance is still below historical levels at circa 2%. M&A and perimeter change was positive for 1.3%, reflecting the acquisitions in the U.S., including the 24 locations acquired in Arizona back in April, and some selected closures of nonperforming locations, both in the U.S. and Canada.

Adjusted EBITDA was EUR 25.5 million with margin at 20.7% versus 22.7% last year due to the fastest functional Miracle-Ear Direct Network in the U.S. The integration of the recent acquisitions and the adverse FX translative effect.

In the 9 months, revenues were up 4.8% at constant FX, driven by a solid and above market organic growth despite the remarkable '24 comparison base. Adjusted EBITDA was EUR 82.7 million with margin at 22.6%, 170 basis points below prior year for the reasons I just mentioned.

Moving to Slide 8. We have a look at Asia Pac performance. In the quarter, revenue performance was minus 1.5% at constant FX, reflecting minus 1.9% organic growth due to the high comparison base. As in Q3 '24, the growth at constant FX was around plus 7% versus Q3 '23 as well as the negative market development in the region on consumer caution. In this context, our organic performance was negative in New Zealand and flattish in the other countries in the region.

M&A and perimeter change was positive for 0.4%, thanks to the acquisitions mainly in China and Australia, which more than offset the exit of the non-core wholesale business in China in Q1 and the selected closure of nonperforming locations in China in Q2 and in Australia in Q3. FX headwind was a significant minus 8%, driven by the depreciation of all the regional currencies versus the euro.

Adjusted EBITDA reached EUR 21.4 million, with a margin of 24.3% versus 26.7% in Q3 '24 due to lower operating leverage. In 9 months, '25, both organic performance and perimeter change were flattish, while FX was a headwind for 5.7%. Adjusted EBITDA was EUR 65 million with margin of 25.1%, 140 basis points below 9 months '24, due to lower operating leverage.

Moving to Slide #9. We appreciate the Q3 income statement, reflecting the seasonality of our business being the Q3 the smallest quarter of the year. In the quarter, total revenues increased by 2.4% at constant FX to EUR 563 million. Adjusted EBITDA came in at EUR 107 million, with margin at 19.1%, 110 basis points below Q3 '24 for the reasons just mentioned.

D&A, excluding PPA, were at EUR 64.6 million versus EUR 62.5 million in '24, increasing around EUR 2 million in light of the investment in the network, digital transformation and innovation. Thus, the less pronounced growth rate compared to the increase recorded in '24 versus '23. This leads the adjusted EBIT to EUR 42.8 million versus EUR 52.1 million last year.

Net financial expenses amounted to EUR 16.7 million versus EUR 15.9 million in Q3 '24, primarily due to interest on higher financial debt, including higher interest rates for lease liabilities following the strong M&A and network expansion as well as FX differences. Tax rate posted a 10 basis point reduction versus '24, leading adjusted net profit at around EUR 19 million versus EUR 26 million in Q3 '24, reflecting the higher seasonal weighting of D&A and financial expenses in the smallest quarter of the year.

Moving to Slide #10. We see the 9 months profit and loss evolution. Total revenues increased by 1.8% at constant FX to EUR 1.74 billion, adjusted EBITDA was EUR 395 million, with margin at 22.7%, 90 basis points below 9 months '24. D&A, excluding PPA, increased by around EUR 13 million, leading to the adjusted EBIT to around EUR 199 million, with margin at 11.4%. Net financial expenses increased by EUR 44 million to EUR 48 million, leading profit before tax to around EUR 151 million. Tax rate ended up 27.3%, leading adjusted net profit to EUR 110 million versus EUR 134 million last year.

Moving to Slide 11. We appreciate the cash flow evolution. Operating cash flow after lease liabilities was in the period equal to EUR 119 million, EUR 31 million below the EUR 150 million achieved in '24, mainly in light of the lower EBITDA contribution, higher rents. Net CapEx decreased by around EUR 9 million to circa EUR 90 million, leading free cash flow to EUR 28.4 million. Net cash out for M&A was EUR 59 million versus the exceptional level of EUR 184 million in the 9 months '24. The cash out for the share buyback program was EUR 108 million.

NFP ended slightly over EUR 117 billion after strong investment for over EUR 320 million in CapEx, M&A, dividends and buyback.

Moving to Slide 12. We have a look at the debt profile trend and the key financial ratios. As mentioned, the net financial debt ended at EUR 1.17 billion, with liquidity accounting for EUR 240 million, short-term debt accounting for around EUR 300 million and medium long-term debt accounting for around EUR 1.11 billion.

Following the IFRS 16 application, lease liability were around EUR 496 million, leading the sum of net financial debt and lease liabilities to EUR 1.67 million. Equity ended at around EUR 970 million, mainly due to share buyback, FX translation differences and dividends.

Looking at financial ratios. Net debt over EBITDA ended at 2.09x versus 1.63x at December last year. After the strong investment in CapEx, M&A, share buybacks and dividends. Net debt over equity ended up 1.31x.

I will now hand over to Enrico for the outlook and final remarks.

Thank you, Gabriele. So we have come to the end of today's presentation. And while the global market is still growing below historical levels. We believe that the factors causing this softness peaked in the second quarter. And there are no structural reasons to be anything, but optimistic about the solid growth prospects of our sector. In fact, the third quarter confirmed this improvement in trend across several of our key markets.

Looking ahead to the coming months, we expect that the global market demand to continue to gradually normalize. And in fact, in the U.S., the Private Pay segment is expected to remain the main growth driver, supporting a steady recovery of the overall market. In Europe, we anticipate a progressive improvement, supported by sustained volume growth in France, continued a solid performance in Germany and the gradual recovery across the rest of the region, particularly in Italy and Spain as observed in the third quarter.

Looking further ahead to 2026, we expect the anniversary effect of the 2021 rebound to positively impact on our returning customer base, particularly in Southern Europe. Moreover, in response to the current global context, we have launched the Fit4Growth, our comprehensive program, which aims to deliver a run rate improvement of approximately 150 to 200 basis points in adjusted EBITDA margin by 2027.

The program is progressing decisively and is currently ahead of the initial plan, particularly regarding the network optimization initiative, which will lead to an impact in the year of approximately minus 0.5% on the M&A perimeter change item and consequently on total growth. Based on all these elements and reflecting the impact from the accelerated store closure, we now expect for the full year 2025, revenues at constant ForEx to grow between 2% and 2.5%. Adjusted EBIT margin in the region of 23%.

With that, I would like to thank you for your attention, and now we look forward to taking your questions.

Francesca, over to you.

Thanks, Enrico. I kindly ask operator to open Q&A session. Please kindly limit your questions to maximum 2 initially in order to give everybody the opportunity to ask questions.

Now I turn the call over to Alekhya in order to open for the Q&A.

[Operator Instructions] First question is from Andjela Bozinovic, BNP Paribas.

I have -- I'll start with the first one, and then I'll ask the follow-up. First, in France, do you still believe that the market will grow 10% in volumes in 2025? And if not, what are your new assumptions for the growth? And more broadly, do you think that we can see the tailwinds from the reform in 2026 and for how long? And finally, just a comment on your market share in the country.

Thank you for your questions. So first of all, with regards to France, as you know, we have seen a very strong growth in terms of volume in Q2. In Q2, we have seen a growth in mid-teens region. In Q3, we have seen a much lower growth in the first month of the quarter, the average was in the region of 6%. And as you can imagine, in our view, there are no other reasons than the political turmoil and all the different events that we have seen occurring in France during the third quarter. So now going to the expectation for the year-end, of course, it's very difficult to predict because for sure, we were also expecting a better French market in the third quarter. We were not expecting all the events that characterized the third quarter.

However, what I can tell you is that we are still, of course, very positive. Also in this case, we don't think that this kind of lower growth in Q3 led to some demand which is -- has been canceled. We expect actually this demand to come back in the next month, in the next quarters. What I can tell you is that what we see today in terms of activation is quite a positive activation in October in the region of high single digits. So we have seen some improvement in trend in October.

With regards to next year, well, as I said, we don't think that this kind of demand has disappeared, so will be released. And we expect actually the impact of the reform to continue also in 2026. In particular, we expect the effect of the reform to continue at least up to April, May next year. With regard to the different market performance, I must say that in this quarter, I'm happy about our performance in relative terms to our competition. What I mean is that if I take all -- basically all our major markets that we have performed.

We think that we have performed better than the market, starting from the U.S. As I mentioned, the U.S. in the third quarter in terms of market, the data say that the market is growing -- has grown in the region of 2%. We have grown more than that especially, particularly in Miracle-Ear Direct Retail. But also if you take Asia Pacific and in particular, if you take, for example, Australia, our market -- our organic growth in Australia was flattish, while the market in Australia was negative in the region of 3.5%. So that we have also there outperformed the market. So I'm pretty confident that in basically all -- also in Italy, our performance has improved significantly, also in Spain with -- in comparison with Q2, also in Spain, our performance has improved significantly. So that I feel pretty good about our performance in comparison with the market growth.

Amazing. And just a second one on your margins, given all the moving parts in 2026 and the top line that we discussed and also the Fit4Growth program, how comfortable do you feel about consensus forecasting around 60 basis point margin improvement for next year?

Well, we are not guiding for with regards to next year. What I can tell you is that I'm very confident that we have mobilized our organization on the Fit4Growth program. As I said, actually, we are going faster. And most -- and we are also finding a pocket of further efficiencies in all our areas of the business. So today, I feel very confident that the target that we set for run rate impact in terms of profitability, full year 2027 will be achieved.

Next question is from Hassan Al-Wakeel, Barclays.

A couple of questions for me, please. Firstly, just on Fit4Growth. Can you talk about the acceleration in the initiative here and where clinic closures have focused? And given these underperforming clinics, what was the margin benefit in the quarter from these exits? And what are your current plans for future clinic closures versus the 100 thus far? And any potential impact on perimeter changes in '26? And then secondly -- do you want to go ahead, Enrico?

No, no. Please, go ahead with the second question.

So then the second question is, if you could please quantify the mix of returning customers in Q3 in Southern European countries, how that compares to Q2 and your expectations of this changing into next year, and how that would translate to growth overall?

Thank you, Hassan. So with regards to the first question and the Fit4Growth. As I said, I'm very happy about the kind of execution that our organization is implementing in all the different levers. And I'm very confident that the plan that we shared with you will be delivered according to plan and even faster. In particular, as you said year-to-date, we have already closed 100 shops. We mentioned also last quarter that in terms of location, initial target was to close or to merge around 250 locations, which means more or less 4% of our network, excluding, of course, shop-in-shops and franchisees. This target, I feel very confident that we can definitely achieve it.

In terms of -- in terms of FTE, the reduction in terms of the closures of the stores actually led to a reduction in a number of FTE of about 260 FTEs so far. So on this, we are progressing very well. We will not see any impact from these closures in 2025 because also in relation with these closures, there will be some associated costs so that we will see the benefit of these closure starting from 2026.

With regards to the second question and the mix of returning customers, as we said during the last quarter, quarter 2 was affected quite significantly from the anniversary of the COVID in quarter 2, 2020, we had a huge drop in sales around 200 -- around minus 50%, in 45%, something like that in Q2 2020. In March 2020, we had minus 90%. So we expect that the impact of this drop in sales on our returning customer base as peaked in Q2. In Q3, Q4, the impact will be much less than -- of course, looking at 2026, we are confident that our customer base will be increasing on the back of the rebound that we had in sales in 2021. So we should see a much larger customer base on our numbers.

Next question Is from Anchal Verma, JPMorgan.

I'll go with the first question is again on France. Just trying to understand what else you've been seeing in France. So the market grew 6% in terms of volume. But can you please give us an idea on what you've seen in terms of pricing in France? And also, are you able to quantify the sales growth in France for you for the quarter? I'll ask that, then I'll go into my second question.

Yes. So with regards to France, yes, we estimated that in the third quarter, the growth will be in the region of 6%. In my opinion, of course, this is lower than we expected. But in my opinion, there is not a lot to be worried. What I mean is that, of course, the growth was driven mainly by the anniversary of the RAC 0 reform, which basically gives for free hearing aids. Of course, given all what happened in France in Q3, consumers were a bit worried.

But I'm confident that the kind of demand that is underlying the anniversary of the RAC 0 reform has not disappeared. So this will come back sooner rather than later, as I say, that we see some encouraging trends already in October. With regard to price, yes, of course, the average of our sales now as led to an increase of the category one mix. So there was also a negative, let's say, a lower growth in terms of volume. But what is important, in my opinion, also to underline is the fact that also in France according to our number and estimations, we have performed better than the market, thanks to all the work and all the job that we have done in the past.

And are you able to quantify the pricing impact at all for France?

Well, it will be just a very limited, few percentage points.

Perfect. And then the second question was if we can maybe dive a bit deeper into Americas, and how sustainable do you think is the U.S. growth that you saw in Q3 to continue? And then if you could even pull out essentially what you saw in the U.S. specifically in terms of sales growth? And I appreciate it's only been a month into Q4. But are you able to share any color on how the markets develop and whether these Q3 dynamics could continue for the rest of the year?

Yes. Let's say that with the quarter 3, we had a clear consolidation of 2 different trends. One trend is related to the insurance channel. The insurance channel was in the 9 months negative by about 4%. This because of the reduction in coverage on hearing benefits from insurances after a very strong push in the last years. So our view is that the insurance channel, of course, will be the channel growing the most -- the least also in the future. And we expect that some of the clients will migrate from the insurance channel to the private channel.

The picture on the private channel is more positive, both in the quarter 3 and also in the year-to-date because in the quarter 3 and in the year-to-date, the growth of the private channel was more positive, more in the region of 2%. So when we look at the total U.S. market being flat in the 9 months, this flattish performance was mainly driven by the insurance channel, whilst the private channel, which is the channel in which, of course, we are focusing the most, it's more strategic for us, performed better. With the Q3, I think that we had a clear consolidation of this kind of trend.

Next question is from Veronika Dubajova, Citi.

I'm going to go a little bit bigger picture. And I guess -- I know I ask you this question every quarter, but I'm going to ask you again. We are now in year 3/4 of subdued global market growth. I know that at times, there have been valid explanations for specific softness in select regions. But this now feels a pretty persistent headwind. And I'm just curious sort of if you are at all entertaining that maybe there is a structural change that could be driving this slower market outlook, maybe penetration has reached a certain level, which is still high, maybe consumers are just changing their replacement behavior. Just curious if you see anything at all that could explain that because obviously, it's curious where we've been here for a while now.

Yes. Well, let me answer in this way, Veronika. I think that in order to, of course, I mean, I don't think that there is only one explanation. But let's take the U.S. which is, by the way, the biggest market in the world, representing about 40-plus percent of the total market. So in my opinion, is very meaningful as an example. In the U.S., we had plus 10% in 2023. We had plus 6% to 7% in 2024. And then all of a sudden, starting from Q1, we had minus 5%, plus 3%, plus 2%.

In my opinion, if there was anything structural you don't have this kind of, let's say, steps, this kind of big swings in terms of market growth. Up to December, in the last quarter of last year, we had a market growing by 6%, 7%. First quarter of 2025, we had minus 5. No structural trends can make this change up and so fast in my opinion. In my opinion, there is an element which is related to consumers, which are definitely more cautious, which are concerned about the external environment and which maybe the purchase power has reduced because of the inflation.

And therefore, they are postponing their decision to acquire a hearing aid or a new hearing aid or maybe they are postponing their decision to renew their hearing aid. This is the best picture that I can give you, then we can speculate on many different things. I don't think that there is anything structural also because it is true that penetration has increased, but I'm confident also that it will continue to increase, given the awareness on wellness increasing, given the technology, which is making hearing aids always more discrete, more performing, aging population is still there.

So I'm pretty confident that there are no meaningful structural changes that can drive such kind of performance. For example, in the U.S. -- I think the U.S. because, in my opinion, is the biggest market and is the one that can give us some explanation given the fact that the swing in terms of grown has been pretty massive.

And then maybe just sticking with the U.S. theme, obviously, you've touched upon this change in the commercial market when it comes to Private Pay and insurance. Can you just maybe remind us for your own business, what your exposure to managed care is, how profitable that is? And so how should we think about the impact of the structurally slower growing managed care market as it translates to your business?

Yes. With regards to managed care, this is a very good question because now we are also reflecting on the prospect of growth of the managed care now because we don't see actually, the managed care to continue to grow at the same pace that we had -- that we saw in the past because many insurances have decided actually to scale back their hearing benefits in their France. So we do not expect the channel to continue to grow faster. We expect the market now to stabilize at the current level, so that we expect some of the customers migrating from the insurance channel to the private channel.

So your view would sort of be it kind of -- the overall market growth is unchanged, but the mix changes. And from your perspective, just remind us how big managed care is for you and whether it has an average or below average margins in North America?

Less than 20% of the U.S.

Okay. And profitability-wise?

Well, you're asking too -- no, we don't provide this by...

Next question is from Domenico Ghilotti, Equita.

I have 2 questions. The first is on the American market. So in particular, on the profitability because you are still largely down year-on-year despite a lower M&A contribution and quite interesting growth performance. You were mentioning the DOS contribution. So can you give us a sense of what -- if you are seeing an improvement in profitability at the channel level, at the U.S. level, and if you see some kind of stabilization approaching on profitability for the U.S. market? The second is on Italy, Spain, you had been flagging an improvement. I don't understand if still negative, but improving compared to Q2, that was a bit surprise. And if you have been able to better understand what happened there. And so if you see the situation in Italy, Spain, just related to heat wave, as you mentioned or something more?

Yes. So with regards to the profitability of the U.S., the profitability of the U.S. has been affected mainly by on one side, the lower operating leverage because, of course, we had definitely a much higher growth -- organic growth than the market, but of course, we were expecting a better market than the 2%. But it is also due to the impact related to the growth of the direct retail in the U.S. also because direct retail in terms of growth has been the driver of the growth of the overall U.S.

So let's say, that the lower channel in terms of profitability is the one, which is growing the less -- the least -- the most within the U.S. Then with regards the Italian and the Spanish market, both the markets, in particular, the Italian one in Q2 was pretty negative. Now we are back to a flattish performance in particular in Spain, while in Italy was slightly negative, but significantly improving versus Q2, just to be sure I'm speaking about market. In terms of our performance, there was a massive improvement in terms of performance in Spain and also a very important improvement in performance also in Italy.

Next question is from Andjela Bozinovic, BNP Paribas.

I just wanted to ask about APAC. And if you can give us any details on the dynamics that you're seeing in Australia and China in particular, because I understand these 2 markets are the biggest in APAC. And do you foresee any change in market dynamics going forward because the market has been subdued for quite some time.

Yes. No. Unfortunately, the Australian market was negative in quarter 3, low single digit, while actually the second largest market for us is New Zealand, which was negative by mid-single digit. Both, in this case, no structural reason can determine such kind of negative performance than just consumer caution and consumer confidence. In both markets, we believe that we have done better than the market. I feel pretty good about that. I think that in Australia, we are gaining share. So I think that our performance in relative terms was above the market. With regards to China, the Chinese market was flattish basically stabilized finally. And also there our performance was pretty good in terms of market share.

Next question is from Julien Ouaddour, Bank of America.

So I had a couple as well. The first one is on '26. I mean, have you done any math around like the renewal tailwind from the 2021 patients, which may return next year, like in particular for Spain and Italy. I mean should we expect these markets maybe to grow single digit, double digits? So any color here would be super helpful? And second question is on Chinese manufacturers, we went to the UIH Congress a couple of weeks ago and we met with United Imaging who basically said they're going to have products in the U.S. and Europe in '26. So I was just wondering if you review these kind of products, if you think of maybe using them also for Europe or the U.S.? And could it be a driver for the gross margin over the midterm?

Thank you. So with regards to the first question, at the moment, we don't provide any indication about the positive effects that we might have resulting from the anniversary of the significant growth in the market in 2021. But as I said, on a qualitative basis, we expect that our customer base in 2021, in particular, in 2 of our key markets like Italy, Spain will be supporting the continued improvement of these 2 markets, but also in Portugal, for example. With regards to the second question, of course, we are always monitoring any kind of manufacturer in the hearing space. At the moment, we have no plans with regards to Chinese manufacturers.

Maybe the other way of asking this question, I mean, have you reviewed their products, which I think is only available in China right now? And just what do you think overall about this product if you have.

Yes, yes, of course, we have seen their products, but I think that still our sourcing strategy will be focusing on, let's say, the main 5 ones. Of course, they will improve over time. But for the time being, we are very focused on our supplier base.

Next question is from Oliver Metzger, ODDO.

One is also a follow-up on China. So you already made a comment versus your performance versus the market. But given -- there seems to be a more profound weakness of the market compared to some years ago. So do you still see for the Chinese market, some return to, let's say, the old high single-digit, low teens performance for the overall market, or do you think that fundamentals have changed that it's just for a Western company, not possible to achieve this growth anymore. Second question is about your general view on pricing. We also heard some comments over the last week about there was some increasing down-trading towards lower-priced hearing aids, meaning from premium to business, business to basically reported. Potentially, you can share your experience from that what you see regarding that?

Yes. Well, thank you for the questions. So with regards to the Chinese market, I think that our sector in China in the last couple of years, has suffered from the same reasons of many other sectors, which is about a slowdown in the economy, consumer confidence, et cetera. In terms of fundamentals, the fundamentals, in our opinion, are definitely still there. I mean the aging of population is a big wave that is coming that the people aged 65-plus will increase in the next 10 years by more than 100 million people so which means that there will be some very, very important aging trend supporting the growth of the market which remains definitely a strategic market for us.

In terms of the second question and about pricing and down trading, what we -- I can tell you what we are working on more than, let's say, reducing price or something like that. Now we wanted to maybe offer more flexible payments to our clients may be offering financing at better terms, et cetera, et cetera because clearly, in a moment in which consumer confidence is lower, I think that these kind of things can definitely help them to take a decision.

One last question, please operator.

The final question is from Domenico Ghilotti, Equita.

Very quickly. On the marketing investments, if you can give us a sense of what has been so far compared to last year or particularly in Q3. And last on the free cash flow generation. I was surprised to see some significant absorption from working capital, so higher than last year. So any specific reason for that?

Yes. Thank you, Domenico. So with regards to the marketing investments in Q3 we have accelerated on our marketing investments. Our marketing investments grew a bit more than in the first 6 months. In the first 6 months, our marketing investments more or less grew in line with our revenues, so while -- now we have taken the decision that in a moment like this, I think that we must leverage on our leading position in the market. We wanted to invest more than the others. We wanted to convince customers about Amplifon, we want to continue to strengthen our brands, et cetera, et cetera. So in Q3, we have over invested versus the first half of the year.

Have you seen also better traction, sorry, so better traction...

Of course, I mean, if you -- since you are in Italy, you have seen that we have been very present in TV. We have been very present in radio. We have been very present in digital, et cetera, et cetera. So of course, these are investments, which, of course, we believe will deliver good return on the investment and will deliver sales. Clearly, it's not something that you invest today, you see the next day. But for sure, for sure, we want to really stick to our strategy of investing on our brands, on our stores, et cetera, et cetera.

With regards to the second question on the free cash flow, I will leave to Gabriele.

The most important component of the underperformance in terms of free cash flow Domenico and operating cash flow was clearly driven more by the economic performance than [indiscernible]. If you look at the EBITDA we lost something in the range of EUR 16 million. If you look at the financial expenses, we are higher by around EUR 5 million. This includes also the IFRS 16. And then to the EBITDA, you have to adopt the higher rent cash out. So adding up these 3 components, you sum up around EUR 30 million, which we are behind in terms of operating cash flow.

On working capital, nothing to mention.

Nothing capital -- working capital, nothing to mention. I mean moving forward, you can see some ups and downs, of course, I mean, we worked a lot in the past in order to optimize. So maybe that one year, you compare with another year where, I mean, you had improvement in payable, receivable, inventory, but this quarter -- particularly, this quarter, the most important component are the economic one.

Thank you.

Thank you, everyone.

This concludes our call. Thank you for interest and attendance, and I kindly ask operator to disconnect. Thank you.

Thank you, bye.

Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.