Ladies and gentlemen, welcome to the Sonova Holding AG Full Year Results 2022/2023 conference call and live webcast. I am Sandra, the Chorus Call operator. I would like to remind you that all participants have been listen-only mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Arnd Kaldowski, CEO. You will now be joined into the conference room. Okay. Good afternoon here in the room in Stäfa. Welcome to the full year results. To the interested people on the audio call, I hope you can hear us well. I have Birgit Conix with me, our CFO, to guide you through the full year results as well as the outlook. We plan to spend about half an hour on there, and then we have good time for Q&A. Thomas told me already there's already incoming questions, so I take from there some people that have already read the material. Just a standard disclaimer. The presentation contains forward-looking statements which offer no guarantee with regard to future performance. Now diving into the matter here with regard to our strategy, business results, and financial results. I think if we look at the last fiscal year, it was not an easy one with regard to how to navigate the market environment. I'm sure some in the room will remember when we stood here a year ago, our outlook for the year was more positive than what has unfolded in the marketplace. I think that's true with others in the market. I think it's a big underlying reason. I think we have, on the one hand side, underestimated where the inflation will go, and we have also underestimated to degree what inflation does to our marketplace. Because historically, when you look at other recessions, not high inflationary environment, our market was more immune. So in that regard, unfortunately, you've seen us going through the year, changing our playbook to a degree, which we will share because we had to adjust. Adjusting our guidance for the year, unfortunately in August. Relative to the market conditions we had, we look at the year as we made good strategic progress on what's important for us in the long run, particularly on the M&A front. We also look on the sales performance being solid, driven by predominantly acquisition, some organic lift relative to the macroeconomic environment and the often discussed non-renewal of a large contract with a U.S. customer. Q4 was better than Q3 in market development, but also in our own sales, which allowed us to end where we ended. When you look on the profitability, clearly a muted picture, partially because of a significant known headwind from the acquisition of Sennheiser predominantly, which came in at a low profitability. We said that when we acquired the company. And that created some headwind from a margin level perspective. Also the macroeconomics as well as if you look on the Swiss franc side, clearly a significant impact from the FX between our cost structure and our revenue structure with all the moving parts dollar euro to Swiss franc. We can also see in the numbers that we have responded and reacted, particularly starting in Q2 when it was clear to us that the picture is different than we thought on the cost side as well as on the pricing side, and we'll comment more on that. Strong focus on the M&A side in the year before with the Alpaca Audiology and the Sennheiser acquisition, making good progress towards integrating them into our businesses, creating a new business unit and Consumer Hearing business, but also the ability to create now a meaningful footprint in Audiological Care and China through the Hysound acquisition. Significant advances on the innovation side. We launched our new platform, Lumity, in line with our normal cadence of two years. I'll comment where we stand on the journey on that one, but also within the Sennheiser brand. The Sonova technology launching the first early entry hearing solution in January. Looking at the outlook, I think if you look at the number mentally deduct still the impact we have this year from the non-renewal. You're seeing the number pretty much in line with our midterm targets. We also look at the markets and appreciate that the first calendar quarter was a good step up versus the quarter before, we see still lots of volatility in the market. Look at it as a balanced perspective, hopefully appropriately balanced, not with the same challenge we had last year being ultimately too optimistic. No, we really believe this market is not a full step back to the regular growth rates we are used to, but a gradual recovery of the market towards a more normal. Highest level results, 14.6% in local currency growth. You see the significant impact here from the Swiss franc on the top line, 3.5%. On the EBITDA, 6.1% in local currency. If you mentally deduct the dilution coming from or the low profitability coming from Sennheiser, if you take into account the inflationary headwinds we have, it is organically a good margin performance. EPS significantly better than the bottom line growth, partially based on the share buyback. Also some moving items on the tech side Birgit will comment on. Our sales outlook 3%-7%. I said already deducting the headwind out of the non-renewal in line with the midterm targets we set ourselves. Then you see on the profitability side a good step up from the margin perspective around 50 basis points because of the activities and initiatives we have, also the volume fall through. Strategy unchanged, despite it being a more muted year. Clearly, believing in our strategy has worked well for us. If we go to the organic minus losing one customer, I think we're also making progress in many of the dimensions. Clearly, a year of expansion of our consumer access. I want to highlight a couple of things on the strategy side, starting off with leading innovation. We launched the Phonak Audéo Lumity in August 2022. We continue to see a good customer response. The penetration rates and what we measure in penetration, how many B2B customers moved from the Paradise over to the new product. The Lumity is in line with what we've seen in platforms before. That's always an important metric for us. Keep in mind, the Lumity comes at a higher price than the Paradise, so they're willing to pay more. Now in April we launched two more, call it form factors or brands with the Lumity technology. We launched within Unitron, the RIC device called Vivante on Lumity technology. That's normally a good step up in Unitron territory. Then we have launched the Phonak Slim Lumity, which has similar content but a very different form factor, which we think is appealing to part of the consumers just because it looks different, and it looks different behind the ear. Good news coming into the year in April. Two product launches, certainly not the same order of magnitude as the first Lumity, but that always, from our experience, a good second step lift to the organic growth. Other point on lead innovation you see on the right-hand side what we launched in January in a, call it soft launch modus. We're going to go in this quarter into full production and then need to drive the demand side stronger. We launched at the CES what we call Speech Enhanced Hearable under the Sennheiser brand, which really gives people an opportunity to have a device who only wanna have it for 2 - 3 hours in a noisy environment who are not yet ready for a hearing aid. A little bit more color around expanding consumer access in the audiological care network. Continue to make progress on a high level of acquisitions and greenfield openings. The Hysound acquisition giving us that entry into China in a more meaningful scale with 200 POS. In addition to that, we acquired over the year 140 more POS in the target markets we have defined. We continue to do greenfields in the audiological care side. Our network has grown to 3,900 POS throughout the year. One new news which we haven't shared before, wanted to share it today because it's relevant with regard to how we improve our footprint for multiple reasons. We have embarked on opening operations facility for the Americas in Mexico. We're making good progress there. We expect that to start to have the first output in the second half of this year. That's how far we are. It will serve ultimately hearing instruments in the cochlear implants business. Key benefits, especially for the custom-made products which today often come from Vietnam to the U.S., this cuts at least two days out of the supply chain and delivery fast is more and more important for our consumers. It clearly is a place in the world where the costs are pretty low and you get highly skilled labor. Many medical device companies move to Mexico and have built a brain pool there and a capability pool which we can tap into. In light of the uncertainties with regard to supply chains over the last couple of years with our strong footprint in Asia, which we have established some 10, 15 years ago, I think we're well advised to balance more between the regions and the geographies. Significant return starting in a year. Upfront some investments. Birgit will cover that in her section. ESG highlights don't wanna go through all here, but first, if you look at rankings and indexes, we're ranking very high. Highly regarded with regard to the ESG footprint and the activities we do. We drive all three different pillars every year. Big highlight in environmental was the commitment to Science Based Targets. Now embarking on the journey on Scope 3, we already had meaningful measures on the Scope 1 and 2. Social, a lot of focus on employee engagement because it is increasingly difficult to bring people to the industry and hold on to them. Engagement, really important, but at the same time, diversity and inclusion, you can see here, we're above 50% with regard to people leaders being female in the organization. Then more progress on getting more governance parts into place, which we think are important sustainable risks for our suppliers from an assessment perspective, but also the well-expected human rights policy. With that, let me move to the business and financial results. Commented on sales and EBITDA already. You look at the EBITDA margin, 190 basis points down versus prior year. You unpick the onion, you will see, and I think Birgit does it later on the organic side, if you take the dilution out, we had positive margin expansion despite the macro environment and the lower growth than what we had in the years before. Hearing instruments, call it flat in local currency, 0.2%. You correct for the non-renewal U.N. territory, 4.1% in local currency as a growth rate, not what we have seen before, muted market, but I think a decent number here for the year. The Lumity helped as well as the price increases. Consumer Hearing business, new to us, new to you to some degree. CHF 284 million in revenue came from the Sennheiser product lines. First full year of consolidation, we are making good progress with regard to the organizational integration. We're also making good progress with regard to our expectations on the profitability, which we achieved for the first year. I'm not intending to share the number all the time, but we're tracking it internally, and we make sure that we're on the path we have set for ourselves here. Market share growth, market share gains meaningfully because we had many successful product launches. The two biggest ones were the true wireless earbud and then the MOMENTUM 4, which is a Bluetooth headband headphone, which both are playing in the biggest category Sennheiser is active in. Audiological Care, significant growth, 15.7% organic, 4.5% same store, and then M&A contributing 11.2%. Last but not least, our cochlear implants business. I need to unpack that more, 2.8% from the outside, a low number. If you dissect into the instrument side and the upgrade side, there's a story to be told. I'll get to that in a couple of minutes here. From a growth perspective, the composition 2-3 organic, mentally adjusting for the lost contract, you had 4.5. You see the 12.3, and you see a significant FX impact here. Looking at the performance by region and focusing on the full year results here. If you go top to bottom, Europe, Middle East, and Africa at a good number. On the market side, we've seen the countries like the Netherlands, Austria, and Nordics being positive, felt like not impacted by the macroeconomics. Unfortunately, the larger ones, Germany, France, and the UK, were in a more muted environment. The U.K., particularly given all of the macroeconomic challenges in the country. France, to a degree, because they had a huge lift in the year before coming out of the new reimbursement at a little bit of a step down. If you go to the U.S., yes, we had Alpaca coming in. On the one hand side, we had that headwind from the customer contract. On the other side, we did see the U.S. market going further down than Europe. That was always a source of discussion. We've seen now recovery in Q4 towards better territory. In general, if you look at our Q2 and Q3, it was really significantly more muted than Europe's. Asia Pac, a very positive number here, 40% growth. There is the Hysound acquisition in there for 3 months. Sennheiser also has a meaningful footprint in China, but also many countries who in the year before still had lockdowns just on the recovery phase. Highest level on the P&L. I gave you all the numbers on the full year, so it's probably more interesting to unpack the first half, second half dynamic on this chart. On the top line, the first half year, almost 18%, second half was 11.6%. See again the impact of the contract but also slowdown in the marketplace. On the other hand, if you look at the performance on gross profit and profitability, you can see that the actions we took somewhere in Q2 started to have an impact. Price increases on the one hand side, the Lumity launch helped. Some easing of the cost pressures, not all. Freight's still higher, but not as high as it was six months ago. On the component cost side, dedicated focus on driving certain cost initiatives. If you look at the second half-year, getting to call it only 60 basis points declined profitability. Keep in mind, dilution was significantly higher. In reality, second half-year, despite the lower volume, we were able to drive some good profitability improvement year-over-year. We'll spend a few minutes on the unpacking by business. For the ones who are not that often here, we share the revenue performance of the different businesses below the segment level, not the profitability Hearing Instrument Segment. Overall, you can see the 15.7 and the 2.3 organic growth-wise, very different stories last year. Audiological Care 15.7, 4.5 organic I would put in the territory at above market, good inorganic contribution, also strong on the organic side. The Consumer Hearing business, as I said, meaningful growth year-over-year. We don't report this as organic because it's the first year in the company. Sennheiser actually grew 16.6% based on the product launches as well as 1 quarter in the year before where we had lower supplies. The predominant part of the 16.6 was growing share. On the hearing instrument side with the dynamic between slower market and losing a big contract only in that 0.2% here. That's more for background. I voiced them all over on the HI, on the hearing instruments dynamic, I think positives but also meaningfully negatives ultimately leading us to that 4.1% if you include, exclude the contract but only 0.2 if you look at the true number. Consumer Hearing business, I think two more comments to be made. We have opted for A, creating it as an independent business unit so it has a full leadership team that is comprised of Sonova people and Sennheiser people. It also includes some Sonova engineering capabilities. Because of that early entry devices we develop, we've gone through all of this alignment of organization. They have one joint roadmap. They also have a roadmap on how they want to drive top line and bottom line. In that regard, I think we're in a good position a year in of it functioning as one part and as one part in our organization. As you can tell from also the launch of the first product under the Sennheiser brand with Sonova ingredients. Audiological Care I don't think a lot more to voice over on the M&A side. I think two points I want to pick out on top of the M&A. We continue to make good progress on what we call the Digital Lead Generation Hub. The ones who were at the capital markets, Christophe was laying that out more. I think increasingly you need to engage with some of the consumers digital and then move them through a call center process into your own retail store. Ideally, you set while they're on the call already the appointment, and it should be in two days, not in five, otherwise they may go somewhere else. We started that in Germany. We now have established it into serving five of our countries and it does help us drive additional growth but also utilization in the store because we can target the leads where we have open availability in the calendar. The second one we launched what we call the SilentCloud, our first step towards a more medical services, call it technology enabled. It's an application on one side which you can download iPad or phone or computer, which guides you through how you navigate tinnitus as an individual and how you can help yourself. It's deeply embedded into the sales process. There is a significant number of people who come to the audiologist who struggle on tinnitus and hearing it is part of the solution. We're getting our feet wet with regard to how do we do more than just a hearing aid and how do we do this on a technology enabled way. Last page for me to cover here, cochlear implant segment. I said 2.8 in local currency from a growth perspective. If you unpack it, you need to look in this business on the system sales, which is the implants and the first processor. Then five years after the first or the implantation, people in most countries have the right to get another processor. That has a very different timing dynamic, right? The instrument or the system sales, the implants, that's really kind of you building your install base, if I'm allowed to use that term, right? 5.1%, but unfortunately for half a year we had an injunction in Germany. We shared that out of a legal discussion that an injunction got lifted. In the first half year we de facto had very little German revenue. If you correct for that you are in the high single digits from a system sales perspective, which is probably not a bad number in this market in the last year. Upgrade sales -1. We launched the Marvel processor two years ago. What people do, they're saving and waiting until the new processor comes and they all jump on it. Having the same level in year two is actually good performance, but you still have a little bit of a dilution relative to your growth rate. Overall, I think fair results here, feel good about the system sales minus the injunction. On the EBITDA perspective, we improved by 150 basis points the margin despite the lower revenue growth. Unfortunately also here we see a significant impact out of the exchange rates. We're quote unquote only at 12.5% margin. We still have the ambition to get meaningfully higher than that, but not so much in organic performance but more again an exchange rate topic. With that, I wanna invite Birgit up. Thank you, Arndt. Welcome here in Stäfa today and for the people on the call also, welcome. I'm going to take you through a few slides and I'm not going to pause long on the financial highlights because Arndt already touched upon most of it. Let me dive immediately into the gross margin development which you see here. You see the 180 basis points decline on an operational basis, and the FX is a theme throughout the presentation. Here you see there is another 60 basis points headwind from the currency here. Let me just explain the 180 basis points. You see that the main effect is the dilutive effect from the acquisition of Sennheiser. We also saw a weaker market performance in high ASP markets that had an impact on our ASP, on our average ASP. We offset that by price increases in all of our businesses. We had the effect of the freight and the component cost, but that we offset through continuous improvement initiatives and also structural improvements. That is what you see on the left-hand side. You see that organically we improved by 40 basis points. What is important to note, because we discussed that during the first half results, is that we see the sequential improvement of 230 basis points from the first half to the second half of the year. If we look at the operating expenses, and you look at the operational part, you see the growth of nearly 15%. If you look at it organically, you see the 2.3% there, and that matches exactly the organic sales growth of 2.3%. That really reflects our disciplined cost management. This is despite inflation and also the shift in the business mix with Audiological Care growing. We have that headwinds and then also lower sales versus originally expected due to the market environment. That is, that's where you can see the impact of the continuous improvement. You see that the growth is primarily driven by our acquisitions. The AC network expansion and again, the Sennheiser Consumer Division. That was 80% actually of this, the operational part of OpEx. If we look at this slide, you see R&D is increasing by 6% and as a ratio to sales, 6.5%. This demonstrates that we maintain the very high level of R&D spend so that we can invest in innovation. When you look at the next line, this is the highest spend bucket in terms of also of increase, the 19% increase. Here you see that 75% is related to acquisitions. If you go to G&A, there all of it is related to acquisitions, the growth, the 6%, because if you look at it on an organic basis, we were even declining G&A as a percent to sales and also in absolute value. The adjustments of CHF 31 million, I'll come back to that on a later slide. How does this come together? You see here the EBITDA component, 6.1% growth. Operationally, this is a minus 190 basis points in EBITDA margin. You can see the effects here underneath. Organically, and that is what Arndt already said, we grew 30 basis points in margin, and that is reflecting all the cost discipline that we have. You see next to that, the CHF 20 million contribution from M&A, which had a dilutive effect of 220 basis points. You see the adjustments. That's another 100 basis points, and I'll come to that here. You see CHF 38.8 million. In previous slide, you saw CHF 31 million, but that was the operating expense part of the adjustments. This is the full full spend. You see again here a very adverse impact on the FX, and this is 80 basis points getting us to a margin of 21.4%. The next slide, the key financials, I already touched upon most of it. Let me just quickly highlight the acquisition related amortization. The CHF 54.9 million, that is primarily related to the acquisitions. On the tax line, you see that we had an underlying tax rate of 9.7%. This is much lower than we originally expected, because I mean, the previous year, that was 14.5%. This is because of a delay of the implementation of the global minimum tax rate. Actually for this fiscal year, so 2023, 2024, we do expect a 15% tax rate again. Here the adjustments. You see that this is divided in three buckets as we always have. First of all, the restructuring, and here Arnd already mentioned one of them, which is the investment in infrastructure in Mexico, the operations facility, that is one of them, but there's other structural improvements. Transaction and integration, as you can see, Sennheiser, Alpaca, Hysound, and then legal costs and that is the ongoing, so the patent litigation with MED-EL. Tax, I already talked about that. That has an impact on the EPS here. The cash flow development, what you can see here, actually the operating free cash flow before changes in net working capital is impacted by higher tax cash out and also decrease in long-term provisions. Then when we go to the net working capital part, there you see CHF 30 million we talked on, which is due to the Consumer Hearing build-up of the net working capital. We talked about that already in the first half, and you see that here as well, so CHF 30 million. Then if I move to the other bigger ones, this is the CapEx investments. So we go back to normalized levels. So after COVID, we still had some catch-up to do. So that nearly CHF 50 million is related to... You can split that into tangibles and intangibles. Tangibles, again, so the Mexico facility and primarily, and then intangibles investments into the AC network and also the digital ecosystem. To give one example, the CRM implementation in our Audiological Care business. The payments for these liabilities are also related to the Audiological Care network expansion. If we go to the balance sheet, DSO stable, as you can see here. We keep on having a strong receivable collection. DIO went down because of a reduction in the safety stock. That is a 15% reduction. Net debt going to CHF 1.5 billion. This is primarily related to acquisitions, dividends, and also the share buyback. You see that we are at a 1.5x leverage ratio, net debt to EBITDA. Our capital allocation strategy here in terms of the in order of priority. First, the accretive acquisition, so value driving acquisitions. Here we did for the fiscal year 2022, 2023, you see the CHF 260 million, which is higher than what we originally guided for, the CHF 70 million-CHF 100 million. Here you see Hysound and bolt-ons. The attractive dividend. Here you see the 5% growth year-over-year. Here we demonstrate that we can consecutively grow dividend in meaningful way. The healthy balance sheet. Here you see that we target a healthy balance sheet or a moderate leverage ratio between 1 and 1.5 times, and we are currently at 1.5 times, so the upper end of that guidance. The share buyback here, so we announced the program back in April 2022, and we bought back around CHF 420 million worth of shares. Given the balanced approach that we take, and we say a moderate leverage ratio is what we aim for, there is no share buyback currently foreseen in the fiscal year 2023-2024. We believe that is a balanced approach given the rise of the interest rates and also the still volatile environment that also Arnd was describing. Let me then now go to the outlook for 2023-2024. As you can see, the sales growth from 3%-7% and EBITDA growth from 6%-10%. Let me unpack that. If you look at the market first, that is the left-hand side of this slide. We continue to see And really strongly believe that the fundamentals remain intact, low penetration and obviously innovation driving growth. We do see still some uncertainties in the macroeconomic environment. For instance, the month of April, when we look at just the market data for four key geographies, we do see that there is that is weaker versus the previous quarter. That's where we saw the uptake. There keeps on being volatility. We do still believe that the consumer sentiment will gradually evolve. We saw a big uptake in consumer sentiment in the past quarter, and we believe that will improve throughout the year. We do see potential support from pent-up demand when customers start renewing the ones that delayed their renewal. Volatility and uncertainty is what we do still see, although we believe to be positive throughout the year. On the Sonova side, that's the right-hand side. We have a high comparison base in the first half, and that will be easing in the second half. This is an important point, but as you already know. In the first half of the fiscal year, past fiscal year, 2022, 2023, we did still have the large U.S. accounts. In this fiscal year, the first half, we don't. That has an impact of around 4% on revenue. You can then easily do the math. We believe cost pressures ease, and we will see that throughout the year. We already saw cost pressures coming down. We also have continuous improvement, and we will see more of that actually in this f iscal year. We also would like to note restructuring and integration costs for an amount of around CHF 20 million-CHF 25 million also for the fiscal year 2023, 2024. That means that the first half will be significantly lower versus the second half, and that goes without saying with the elements that I just described. On the FX, and that continues to remain a headwind. We just did the math on the May rates, but of course, that can still change because we see that currencies constantly change. If we do the math on the May rates, we see that the top line is potentially impacted by 4 to 5 percentage points or%, and then the EBITDA by 8% - 9%. That is what we currently see, but as said, that can easily change. Let me go to the last slide, which gives you a snapshot of the upcoming events. As of tomorrow, we will go on roadshow, and then on June 12th, we will have our AGMs, which you are all very welcome. On October 18th-20th, there is the EUHA Congress in Germany, and that will replace actually our investor day, and we can meet also investors and customers and consumers over there. On November 21, that's when we then also meet next for the results, and that is for our half year result publication. With that, let me end this presentation and start the Q&A. Operator, if you can open the line for questions, please. I think we will start with a few questions here in the room before we move on to the-. All right. people on the phone. Just raise your hand. Yes, thank you very much. Daniel Böhni from ZKB. Maybe two questions from my side. The first one on Lumity. I mean, if we look at what your friendly competitor from Denmark was reporting with the Oticon, that one is performing pretty well. I mean, my understanding was always you and Demant have the closest focus on highest quality. I mean, how do you see this performance of your competitor, and what does that mean, vice versa for the Lumity? Then maybe on the market environment, you just mentioned April, which was softer again after a very strong March. What do you on average expect for the rest of the year in terms of market growth? Normal year, 4%- 6% more or less? Yeah. How do you see it, Arnd? With regard to performance relative to individual competitors, it is certainly interesting to observe the individual players. I think, clearly Demant, I would say, has a good development in the last couple of quarters. I'm not sure that's only product. I think there's other things they do well. If we look at the acceptance of the Lumity in the RIC form factor, we like our performance. There's other products we have in the product line, to name one, if you look in the ear, we're currently disadvantaged with regard to not having Bluetooth and rechargeability in the same device. I would not be that worried about the Lumity from what I can tell. I think there are some softer spots in our portfolio which we work on. It's also not relative to one player, it's relative to market, where we take a look on our performance. On the market assumptions we have, I think we're in general more muted in our outlook than what I've seen from some competitors. I think there's one other competitor who is similarly muted, and we are in the outlook, I would call it 2%-4% in the units. This is kind of the mental basis for our guidance here. That's in line with what we said. Yes, we've seen some improvement in the first calendar quarter. We have seen probably that's a little bit our advantage. We have also seen the April numbers before we commented. Keep in mind, they also have different phasing because they had the January to March in their fiscal year, which was a strong quarter. I think for our fiscal year, 2%-4% is the underlying assumption behind our guidances. Christoph. Thank you. This is Christoph Gretler. Maybe one question with respect to your ASP development and whether you could break that out, you know, relative to your mix component. That would be good, you know, to get a bit of better sense about the underlying unit growth in the second half. I think you mentioned that, you know, Q4 was much better than Q2, Q3, whether you also could give a bit of more of a clearer indication, let’s say, on that, you know, a relative momentum. The other question I had was on the profitability in the consumer business. Is that also somewhat ahead of your plans, or is that, you know, basically also according to plan? Thank you. Chris, thanks for the questions. ASP to unit. We have driven a strategy where we said we need to recover some of the inflation on price. Other people may have been driving somewhat differently or at least not as clearly as we. From a lift perspective, you've seen in the second half year, we have good contribution on the ASP side. We do have positive growth in units if you correct for the lost contract. Clearly, part of our growth comes out of an ASP increase, which we've seen. Q3 to Q4, don't want to give you our numbers, but they're not very dissimilar to what we've seen in the marketplace. I think the market was down in the order of magnitude, those 12 tracked countries by 2.5%-3% in Q3. Q4 was more in the range of, call it, 4%-5% across the different geographies. Americas and Canada are stronger. There was clearly a better year-over-year, but similar step-up quarter-over-quarter. The last question on the profitability on the Sennheiser. We've been a little bit better than what we have planned for the Sennheiser product lines in the business we took over. Not significantly, so not giving a huge lift towards what we said is the midterm target in the mid-double digit. I think we're starting fine relative to the market being unit. I think that's a good performance. We're balancing what we do on the cost side versus what we have to do on the growth side. Oh, sorry. The first one with the big commercial customer in the U.S. Anything heard of them coming back? I mean, I guess KS is dead as far as I heard from them. In branded, you are also not there. At least I don't see it on the website. Are you there or is it possible to be in there? I mean, I can't imagine that you as the number 1, you're not present in the biggest commercial channel in the U.S. What's Yeah? Yes, there is no KS, which was kind of a little bit of the surprise of the last year. I think that's based on their decision on how they wanna drive their brand portfolio at the end, and probably also differences in price points in the branded versus the non-branded. I think, no, we're not in that channel today, to answer your specific question. And yes, I think over time we will have that discussion. It also needs to be seen on their end in their, what is their strategy? How many suppliers do they want? When do they make changes? Clearly, we have good technology and good product. I think the other one that was a conscious choice of us, we had a Phonak product in the channel for the non-RIC side, and we've chosen to take that out. It was a small revenue, but the price points in that channel wouldn't sit well with what we command as prices from independents with the Phonak brand, right? You can see there's a discussion to be had at the right point of time, and I don't wanna go too deep into the commercial discussions we have there. Yes, there will be discussions on the customer to choose if they like the value proposition between brand, price, and technology. The second question, actually, the retail was quite good, I think, in organic terms, considering the fact that you're quite strong in Germany and Germany was quite soft. Can you give us a bit more flavor on the US own retail and German's own retail? Yeah. Okay, thanks. I think we've seen good performance over the last years building in within GEERS in Germany. I think it started off with us being, for two or three years now, more active on branding the GEERS brand more with above-the-line marketing. People will know here in the room that Mr. Gottschalk is kind of the figurehead for us with GEERS, which fits the target audience really well. That was a conscious choice to make to improve our unaided brand awareness, but also improve kind of the recognition of GEERS in the market, which a couple of years ago was not at the same place from price, performance, quality. That's one part. You heard us talk about the Lead Generation Hub, which we started in Germany, given that it's our largest market. That has a nice contribution to the growth we're seeing because we just bring more new people to the category, and I think the team's executing well. We have seen above-market performance in Germany consistently over the last years. Now, in the U.S., I think the market is more difficult. As I said, that's true also on the audiological care side. We see good continued same-store growth in what came from our side with Connect Hearing. You may remember that 4 years ago, we restructured that network and made it far smaller to have a good footprint with stores close to each other. That continues to work well with good same-store growth. I think in the integration of Alpaca and other chains we have acquired, I would say half of them are doing fine, no change in performance on the integrated entity. In one larger part of that world, we have alignment to do from culture and mindset, which has led to some attrition. In the sum, we're pretty happy with the performance in the U.S., but not running at full cylinders yet. If you go from 160 stores and you go to 450, you have to integrate the brands, you have to integrate the lead generation mechanisms and the marketing. There'll be some hiccups in the first year, right? A good start from what we would have expected relative to the integration efforts, but certainly more to come. I would suggest we switch it up a little bit, maybe go to a few questions from the phone. Operator, can you take some questions? The first question from the phone comes from Maja Pataki from Kepler Cheuvreux. Please go ahead. Yes. Hi. Thank you very much for taking my questions. I'll keep it to three. Arne, can you help me, please, consolidate your comments that you had positive unit growth in the second half of the year. Is that on the wholesale side only or for the total group? That's my first question. The second question, just very quickly on Costco. You are, you know, contemplating how you will play that channel and your guidance for this year is adjusted to reflect the exit of Costco. Shall we read that you will provide an updated guidance if and when you were to enter Costco this year, or is it more that you don't think it's gonna happen this year? Then just very, very quickly on the greenfield operations that you had this year, can you remind us how long it takes for a store that is opened to contribute to top-line growth? Thank you. Thank you. On the unit volume side, my comment was, unfortunately, it's a complex modeling here between the large contract and then still wanting to see, are we winning share, yes, no, and how are we doing? I was excluding the large contract and then looked at unit volume for the second half year, excluding that contract, and said, "Look, there was some positive unit volume growth, but a bigger part of our growth outside of that was in the, in the pricing side." This was meant to be for the wholesale business. The Audiological Care adds more, and if it is just for the fact that we have significant inorganic growth but then also organic growth. On the large contract, we have not considered staying somewhat more on the plannable side of life, any contribution from there into our guidance. If it would be a significant contribution and would be firm, and we know when the shipment dates are, we would certainly inform either when we have the half-year results and we know, or if it has such an impact that we would need to take the guidance up. Rest assured we will inform you at the right point, but not necessarily in line with commercial negotiations if that doesn't change the impact of the guidance, but it's not included in the guidance. On the store side, I assume your question was on greenfield opening. Yes. Yeah. On greenfield, it depends a little bit on the geography, but you can get to the greenfield store, which is opened, adding what we call local contribution margin, so the cost is lower than your revenue, call it in year two. In the first year, you're kind of having more cost than average than what you get in revenue. In year two, early year two, you can get to a positive contribution margin. The challenge is always that you start without a database. That's the difference to an acquired store, which comes with an existing customer base, which makes up 50% of the revenues, right? Year two should be the place where you start to be accretive. I think year three to four, you should be at a normal run rate of a local contribution margin. Okay, great. May I just quickly follow up, because you've been talking about the price increases that you've been putting through in wholesale, and to my understanding, there was always a talk that it could be, you know, we shouldn't take the full price increases on the wholesale portfolio, but maybe 50%, which could be in the mid-single digit range. If I follow your logic for the adjustment of Costco and everything, it seems that the pricing impact in the second half of the year or the ASP impact in the second half of the year would have been less than 3%. What, what were the, you know, what were the negative impacts on ASP mix that were counterbalancing your price increases? The big two ones are, A, when we referenced those numbers, that was to the independent market, because larger customers have one-year or two-year terms. We had a meaningful mix shift between geographies because the U.S. was traveling lower than Europe as a market, and Europe is at a lower price point. That's the two elements why you see less fall through than the numbers we have quoted. I think when we quoted, we shared that probably half of the market will be impacted immediately because the other half is in larger and longer term contracts. I think you should not forget the mix shift, which we're seeing from the U.S. towards Europe as a higher share, as you could also see in the growth rates. Okay, perfect. Thank you very much. You're welcome. The next question comes from Julien Ouaddour from Bank of America. Please go ahead. Thank you very much for taking my questions. I have a couple, please. The first one is that you're sort of the first player who really talk about potential for pent-up demand this year. I think we've seen after COVID that the expected pent-up demand didn't really materialize. What gives you the confidence that it will be the case this time, let's say if inflation remains. Can you try to quantify it? The next one is on pricing. Have you just started to hear some pushback from clients when it comes to price increases? It seems that you were a bit more aggressive than peers and does the guidance include any further price increases for 2024? Thank you. Thanks for the question. On a pent-up demand, it's a certain logic we deploy. I think in COVID, what we did see, and that's validated by our own retail, that it was the new consumers who didn't join the category, but everybody who had a hearing aid was coming back because they felt comfortable despite the COVID concerns, because they knew our audiologists and they knew our store, they knew they will be taken care of from a safety perspective. Completely the opposite in the last 12 months. We see normal growth in new customers. We do spend some marketing on it, but it is in line with what we had expected to lead. In reality, the lower revenues we see in the market come from people who simply delay their purchase after five years. So this is just us deploying some logic saying, "Look, if somebody was waiting normally five years, now they waited six, the moment they feel more comfortable about the economics, they will come back." While if it is a new customer, we know how much hard work we have to invest through the audiologist and the marketing to get them to the category. So we were less optimistic, you know. To be proven, we haven't modeled in a significant pent-up demand curve. We just see that as a potential. I think it's still kind of mentally embedded in the what we said about the unit volume 2-4 and the revenue guidance we gave. On the pricing side, if you increase prices in an industry where that was not the standard for the existing product, yes, people will comment on it, right? Then comes the question, how many of those do you convince to accept that and go with you? I think we had also clearly the objective to, A, counterbalance some of the headwinds. We also wanted to set a precedent in the industry that one can increase prices. I think other people have chosen a somewhat different strategy. I think everybody did some price increases, but we were probably at the higher end. I think for the go forward, we assume some price increases, not to the same degree as last year. I think last year was a clear year where inflation was going up so much that it was also an easy argument to have. I think we wanna hold on to ask for some more value, probably more than we have done historically, but not at the same, let's say, increase year over year as we've done in the last year. Thank you. Thank you very much. It was really clear. Just if I can squeeze a very quick follow-up on Maja's question about Costco. Could you consider maybe to introduce Sennheiser as a brand at Costco, maybe to compete with more consumer-oriented brands like Philips or Jabra? Thank you. Yeah. We can consider many things. The way we think our brands, we have clearly medical brands. Then Sennheiser we like having with us because it's a more consumer brand. If we wanna play in the market of early entry devices and people come to the category without a hearing care professional, then, we do believe that does require a different brand. It would create brand confusion relative to the architecture we wanted to drive for, right? In that regard, not as likely from our end, because then we end up having another medical brand. We end up having confusion on medical versus consumer devices. Not very likely from that angle. I also don't think it gives a huge benefit. While the Sennheiser brand has a brand recognition in the United States of America amongst what we call the audiophiles, it is strong as a brand in Europe and in China. I don't see this huge brand appeal of Sennheiser from OTC. Not from OTC, but for a normal hearing aid in a channel like Costco. Okay, perfect. Thank you. I guess it leaves us with Unitron. It's a brand we use for certain channels, yeah. Thank you very much. The next question comes from Hassan Al-Wakeel from Barclays. Please go ahead. Thank you for taking my questions. I have two, please. Firstly, coming back to market dynamics, could you talk about share dynamics in the second half, and particularly in fiscal Q4, given peers have, you know, posted high single-digit or double-digit growth in Q3 and to a larger extent in Q4. What do you put the share losses down to? And could this be perhaps durable given product cycle momentum elsewhere? Secondly, following up on Lumity, could you share some of the data points that you track around the progress of the launch and how you characterize this versus Paradise? Why do you think this hasn't driven some of the share gains you may have expected? Thank you. Our share dynamics in the Q4, I need to stay reasonably vague because we don't publish quarterly numbers. I think if I look at our unit volume in the Q4 relative to market, and again, I allow myself to extract the contract, I would say we were doing well relative to the general market data we have. It is also fair to say that there were one or two players who did better than we. If you do the math there, and sorry for getting deep into math, you have to add a loss to our side and the win on the other side, because what we lost in the large contract, somebody else picked up, right? In that regard, it's not just the 4% impact we're talking about. You need to do something on the other side because our 4% went most likely to three vendors, right? Again, I think certain players have done well with their strategies and their products in the channel. We feel good about our performance relative to the unit market we know as the published market, and that's where I would leave it here. On the Lumity side, I said it earlier, I think you need to unpick first a little bit the portfolio. Don't wanna go into product by product, but clearly on an IT product, we're currently struggling, given that we don't have what other people have and what people are looking for. That's something to be solved on the product development side. There's some other areas in the portfolio which didn't do as well. I think on the risk side, we're good with the performance, and we see on the Lumity, and that goes back to your question on the metrics we're tracking. Our most important metrics is how are people adopting the product over the existing product, especially when you have meaningful price increases, and the price increase or the price delta is mid-single digit there. We're, call it, very close to the same penetration curve as we had with the model in the Paradise in the customers, which are our loyal customers. It's not so much the product in our eyes, which is a concern. I think it's different parts of the portfolio. It's probably more on the competitive accounts in market environment where prices are more sensitive, but it's not in the penetration towards the people who convert from the one product to the other. Very helpful. Thank you. Welcome. Can we go back to the questions in the room? Next one, the question. It was Christoph Gretler from Research Partners. First question regarding the cochlear implant. We saw this 12.5% margin, which would have been a lot better without the influence of the currencies. It's still your assumption that you get mid longer term into the mid higher teens margin in this area? On the share buyback, if you intend to have no share buyback this year, it's fair to assume that you won't get to this CHF 1.5 billion in the next three years, and you would maybe set that out with a longer date? The last question, I guess I'm right to assume that in the sales guidance from 3%-7%, there's the usual bolt-on contribution? On the cochlear implants business, if you unpack the numbers, we make progress on the profitability in local currency. Unfortunately, we don't control currency, so I think we're still making progress, right? There is no reason why we shouldn't get in this business into the, what you're indicating, somewhere 15%-20% EBITDA, right? Hopefully, currencies also help at some point of time. If I look like for like, we have progress despite it only being a 2.8% year, right? On the bolt-on side, yes, bolt-ons are in at a low percentage growth level. I think we've guided that we expect, Thomas needs to help me out here in the range of what? CHF 40 million in revenues out of bolt-ons. You would translate that probably to a percenter coming from the bolt-on side. It is between like around 1%. You wanna make a comment on the share buyback? Okay. The share buyback, yes, it's up to CHF 1.5 billion that we commented on earlier. In order of priority, if you look at the capital allocation framework, the healthy leverage ratio is a higher priority, and there we say it's moderate. That means like between 1 and 1.5 times. Given that we also have, as you know, the dividend payments upcoming currently, and we are running at a higher end. We believe it's prudent to say that currently we do not plan any share buyback. As I said earlier, given the rising interest rate and the volatile environment, this is how we set our priorities. I think it's worthwhile to note we have done more M&A in the last year, right? We were getting to that 1.5 and we're rule-based the way we set it up, right? We would not feel comfortable to be below 1 and below and above 1.5. That's why you see us going careful. I think it depends also to a degree on what else happens on the M&A side, right? If you do the math this year, if you wanna go call it to 1.2 leverage, that's some work to be done in the cash flow, given we pay a dividend and we do some bolt-ons. Think about it rule-based. I think we really need to look at the leverage, as long as we have that leverage in mind, that's what we shared with you. If we would make a change to our leverage assumptions, we would tell you. If there's nobody, I have another two question. The first is on the restructuring expenses. Actually, could you detail for what that you're gonna use it, you know, this CHF 20 million-CHF 25 million this year? The second question is just on this Speech-Enhanced Hearable. Could you discuss, you know, how the market's been receiving that, you know, since you launched it in January? First on the structural or the restructuring, that'll be a continuation also on the Mexico operations that Arnd alluded to in the beginning of the presentation. That is one part. We have further structural optimizations also even in the audiological care network, but also just throughout the company. This is just to address the cost base. It's more a continuation of what we started already. On the Speech-Enhanced Hearable side, we launched, given that CES was in January, a product, and we have started selling it. It does get good responses. We have not gone on full marketing with regard to it, given that we need to ramp up the manufacturing, which we do in Vietnam. Product availability expected in larger scale and then really kind of more marketing investment behind it more in this quarter. I think the initial responses are the speech enhancement is quite strong in a positive way for people because they're not used to that kind of a speech enhancement in any hearable. We have, as we have in hearing aids, the beam focusing in there. You really hear somebody who is in the restaurant two tables next to you very clearly, right? Very positive for the ones who are looking for that performance. They do like the general performance on music and audio, right? I think from the users who have it and have used it and who really looked for that kind of benefit, they say, "Wow, that's quite impressive for Hearable." We don't have full data based on we really put significant marketing behind it. We now see how that works through the system. Thank you. We have, I think, 3 more questions from the line, and then I think we will conclude the call. Operator, can you give us the final questions from the phone? The next question comes from Veronika Dubajova from Citi. Please go ahead. Hi, good afternoon, Arnd and Birgit and Thomas, thank you for taking my questions. I have three, please. One, I just wanna go back a little bit to the performance in the second half. I think when you gave us the guidance back in November, you had talked about roughly a flattish market. I think it ended up coming in actually a point or two better than that. Yet, you definitely missed consensus expectations and I think your guidance as well from a revenue perspective. I'm just trying to understand a little bit better what you think went wrong in that second half of the year. Is it that price realization? Is it something else? Just maybe give us a little bit of insight into that, 'cause I think we're all scratching our heads about that. That's my first question. My second question is just looking at the guidance for fiscal 2024. Especially the upper end of it does imply some pretty significant acceleration as we move through the year, on my math, potentially up to high single digits exiting the back half of the year. Just curious if there's something in your pocket that you have that can drive that. Is this about the new Lumity extensions? Is this about Unitron? Is there something else that we're not thinking about that should make us feel that the entire range is in play? That would be my second question. Just a follow-up on the decision not to do a buyback. Any sort of anything we should be reading into that from an M&A perspective, or is this really just a prudent balance sheet management? Thank you, guys. It- I can take the last one. The last one is, it is a prudent, balance sheet, because that's as I said, we first have the healthy balance sheet as a priority over the share buyback. Yeah. We also have to think about when we announced the 1-1.5, we were in a different interest environment. To a degree, you need to at least recognize I stick to my rules while the market's changing on me. You also see people who are getting into trouble from their leverage ratios and whatever. We feel comfortable with our balance sheet, and the share buybacks are appreciated at times. Just keep in mind then when we range that, so we just wanna get to the range we set in the first place after we did some more M&A. I think the second half, I would need to go back to my notes. You quite pointed there. I'm not sure I look at it that way, but I can try to answer what are the areas where outside of product there may be some, call it headwinds for us. I think you asked me, came out with the half-year results and then the large contract was up in the air, and then there was some noise from their side on reliability. As much as we like the performance of our products we're shipping today, I think the Lumity is better than the Paradise ever was. I think noise in the market on reliability doesn't necessarily help you, right? But that's more kind of a thing in the voice-over in the market you have to work through. That is one discussion. I think the other one on the pricing side, yes, customers don't necessarily like price increases and if you play your cards, then other people go in a different direction, this may have consequences, right? In that regard, if you think from a confidence of customer perspective, there are some customers who were a little bit more held back in the discussion with us, which I wouldn't attach to Lumity as a product. I think the good news is our reliability proves to be pretty good for the product, and Lumity shows significantly better numbers than the product before. Make no mistake, we do share this with customers, you know. Secondarily, if you look on the pricing side, it was interesting that at least two larger players have done price increases in between. I think that also kind of side to side versus six months ago is a better position to be in. We do still think it was right to do the price increases, but other people did this later than us, right? That's how we make sense out of it, but definitively not in the Lumity penetration side by side relative to other products. On the second half year, we always like to have something in the back pocket, but if we don't share it, we don't share it. In general, I think we do believe that if we unpeel the onion, and unfortunately we have lost a big account, and unfortunately that it gives us a negative and other people a positive. If I just work through the numbers, I feel reasonably good about the second half year. We have launched the Unitron Vivante. We launched the Slim. We clearly have opportunity to drive even more positive upside with the Lumity through the right marketing exercises. There may be more additional products we launch. We bring new technology to all platforms and to all brands and all form factors, that's kind of more, expect more in the normal on our end there. I think clearly there is potential in the second half because we don't have the headwind out of the contract on both sides. We do think the market is gradually improving. I think the last comment, I think you need to factor in there, Veronica. Keep in mind the year-over-year dynamics and the jump off points. Q3 was really a weak quarter for the industry. The market went backwards, right? While the Q1 was particularly still strong last year, the Q2 started to get a little weaker, but we really had a significant drop from Q2- Q3. In the first half to second half, I think you also need to factor in jump off point assumptions. If you put them all together, we felt comfortable about the second half year without a magic rabbit out of the head. That's very helpful, Arnd. Can I just ask a quick follow on Russia? My understanding is you're the only company that remains. Any sort of rethinking on that? Was that a big contributor in the second half? Are you getting any pressure from any particular customers or channels to leave Russia, just given the political conflict there? Thank you. We don't expect a change in our strategy to be very clear about it. We have stopped to sell non-medical product in Russia right away, which gave us quite some headwind on Sennheiser, which had a meaningful business in Russia. It also gave us a little bit of a headwind in hearing instruments because of Roger and other consumer devices we have. Our choice was to say if somebody has a medical need, we think that should be supported, and if it is a consumer device, we cease selling. That was our ethical decision there. I don't foresee a change to that, honestly speaking. I know there's lots of discussion out in the world, but I think the world has made some peace with regard to on the medical side. If it's truly a medical device, it's probably okay. The next question comes from Lisa Clive from Bernstein. Please go ahead. Hi. Thanks so much for taking my questions. I have two, please. First on Conversation Clear Plus. I wonder if you would talk a little bit on how you think about the marketing costs and marketing for this product. It targets a more mild loss category, which is sort of harder to convince people that they need help. I guess the early data from the OTC category, which also targets that mild loss, is a bit disappointing. Wanted to see what you thought on the read across there. Then second, on the cochlear implant side, you guys have mentioned the headwind from hospital staffing shortages. Can you talk about how those progressed through the year and if you're still being impacted by them at all? Some other elective surgery markets have seen sort of a big benefit from pent-up demand. Just wondering if you see any potential next year for benefit in cochlear implants from pent-up demand? Yeah. On the Conversation Clear Plus, one of the reason we launched this and we're quite confident about it is the use case is very different, and I think the perception is different. If I buy an OTC and I'm all for people being successful bringing category to consumers in need, I think you choose to buy a hearing aid. If you go to the earbuds, you choose to buy an earbud from a form factor and from what it looks like, and you then need to convince the others around the table that it's okay to wear your earbud also during dinner. Right? A very different use case also with regard to two of the main functionalities will work no matter what the speech enhancement does. You can make phone calls, you can listen to music, right? It feels like a softer entrance, particular to consumers who may not be that comfortable to wear a hearing aid in the first place, why we call it an early entry device. I think that gives us hope and expectation that the dynamic will be different. You know? I think on the OTC, nobody has asked, but I would say it's still early innings. I think people will need to find the right channel partner. I think direct to consumer with Facebook and Google Ads is going to be quite expensive. You need to figure out what's your channel. Does the channel have enough sophistication capability that they can explain it in the first place without having to do the fitting? You know? I wouldn't mentally give up on the OTC, but I find the speech enhancer more relevant and easier to sell to a consumer who may not wanna have a hearing aid at that stage. On the cochlear implant side, it's interesting, when I was over the instruments, 5% growth, I allowed myself to mentally take out the half year we couldn't sell in Germany. We're kind of in the high single digit. That's not necessarily a bad number. It's kind of the number we've seen pre-COVID in a good year, right? I do think, yes, we have seen that the availability of staff, while in some parts of the world is still limited and in some countries, but in general, we don't have as much headwinds as we've seen in other places. On the pent-up demand, that's a tricky one. I get pushback when I discuss that with the colleagues. I think on the pediatric side, people will always get a priority to be fitted because we know in the first two years you should get the cochlear implants, and they're not going to wait two more years just because they don't have so much staff. On the adult side, that would require that the adult is completely convinced and is waiting for you, right? Perhaps a little bit, but probably not as pronounced as somebody who has a hearing aid coming up on year six, got the reimbursement letter a year ago, right? That seems to be, for me, is more straightforward. Perhaps we will see. Not a bad instrument number at, in the last year in the market. Okay, great. Thanks. That's very helpful. Thank you. The last question for today's call comes from David Adlington from JP Morgan. Please go ahead. Hey, guys. Thanks for squeezing me in. Just one that hasn't been covered off, I don't think. Just in terms of as you build out capacity at your New Mexico plant, I just wondered if you expected any dilution to your gross margins that as that facility ramps up that capacity. Thanks. There will be some dilution, call it, in the first six months or so, because in order to prevent that, we're getting into trouble from shipments. It's not just the manufacturing, you need to get the supply chain right. You have very different nodes you need to get over a border we're not used to. We will run carefully with build up and build down. You know? We have reflected that mentally in the guidance. This is not going to be such a big number. It's just more an approach from a caution perspective. It clearly will pay by itself if you look just at the labor cost differences. Mexico is, I would say, close to Vietnam, significantly better than China, significantly better than United States of America. Okay. maybe just one follow-up, 'cause that leads us on to sort of networking capital. Just wondering how you expect that to flow through this year and whether we should see it as a net positive or negative in terms of the cash flow. Sorry, can you repeat the latter? Yeah, just in terms of the inventory, obviously not just related to Mexico, but I suspect there was some inventory- Oh. -built last year. Yeah. How you expect that to flow through this fiscal year? We do still see some of the. There is still investment into CapEx also in this fiscal year, 2023, 2024 for it. Not to an extent that you would say, because if you look at the 2022, 2023 CapEx that you see in the cash flow, that is only part of it is for the Mexican operation, because there's a lot also on the audiological care network and that expansion. It's not that substantial, let's say. On the networking capital, maybe on inventory, like Arnd alluded to, just to be on the cautious side, you could see some in the first half, but that would then go away again for the full year. That's relative to the factory. I don't know if your question was in general on inventory. I think in the totals- Right. On the total system, Sonova, in all of the different sites and all different types of inventory, we would expect an improvement in turn. We still have safety stock with the easing of the components market now starting to move more towards them looking for buyers of the material and not allocating you. I think you can start to get into less careful environment. In that regard, I think I would expect a continued improvement of the inventory transition overall. Yeah. There's Mexico, but that's just part of the equation. Yeah. That's part of it, and that is indeed what we planned for this fiscal year. The improvement, I mean. No? Should I? Okay, I'm going to close. I was wondering what Thomas is going to do. Thanks a lot for the continued interest on our journey. I'm sorry for having to unpack so many things left, right, up, down. It was an unusual year in the macroeconomics, also with the so often quoted non-renewal of a contract. We're looking forward for a year where this hopefully becomes a little bit more straightforward. You've seen our guidance. We're trying to balance between there is still some volatility in the market, we do believe that we're in a good position to continue to drive market share growth on the back of the strategic initiatives we have and the acquisitions we've done. With that, thank you very much, and I'm looking forward to the next discussion. Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.