Okay. Welcome everybody to Demant's Capital Markets Day 2021. My name is Mathias Holten Møller, I'm the Head of Investor Relations at the company, I am really pleased to see all of you in the room. It feels like all back from scratch in a way, at least we've been connected through virtual means over the last 18 months or so. Really nice to see people again in person. I think we're all energized by that. We are clearly equally happy to also welcome people on the live stream. This is obviously being film streamed and recorded, people can follow it from their homes. Still tapping into some of the flexibility that we've had over the last 18 months with COVID. I think with regards to the speakers, I'll just find the clicker here. You've probably all seen the investor news that we sent out this morning, where we highlighted some of the key messages that we're going to convey today, but also the speakers and the agenda for today. Just quickly, the speakers today will be Søren Nielsen, our President and CEO. It will be Thomas Behrens, our Vice President of Audiology and Applied Research in our hearing aids business. We'll have Jeppe Dalberg-Larsen from EPOS, the President of what is also our communications business. Niels Wagner, President of Hearing Care, and we'll have René Schneider, our Group CFO, on as well. The agenda will be this. We had the welcome right now. In a minute, we'll have Søren on for a presentation on how we aim to deliver sustained growth post-coronavirus. We'll bring on Thomas for basically an insight into how we work to ensure audiological leadership through our BrainHearing philosophy. We'll go to lunch for one hour, and we'll come back with a deep dive on the Hearing Care business with Niels Wagner. We'll have Jeppe on for a presentation on EPOS. We'll have a 30-minute break before René will basically conclude the day with a presentation on tying back basically to the sustained growth that Søren will also speak to. Also elaborating a little bit on the margin potential that we see in each of our business areas. I'll come back with a quick wrap-up at the end. Just quickly, I'll just switch back, sorry. On the Q&A side, just want to highlight, we're going to have a Q&A after each session. Hopefully that will keep the contents fresh in mind. The way it's going to work is that we'll have the speakers on stage still to do the Q&A, and then Søren will join them on stage as well. We won't have phoned in questions today from the virtual audience, but it will be possible to ask questions in writing through the chat in the web player that you hopefully all see. If we can just quickly ask you to state your name and company when you ask questions, then we all know basically who you are. The last point for me, just outside this room for the people in the audience, we have some good EPOS colleagues that are showcasing some of the products that they have in the portfolio. Clearly, if not a completely new business for us, then at least some of the products may be unknown to you. It's a chance for you to get familiarized with that. There's also a demo of our new video solution launched back in May. On GDPR, quite boring stuff, but I think you've all noticed by now that this is indeed being recorded. It's live streamed. It will be put out on our website after the event. Just so you are aware that you're being filmed. I think with that, Søren, we are ready to go with your presentation. Welcome. Thank you very much, Mathias. Also from me, a very warm welcome to everybody here. It is, again, kind of a reboot to the ordinary way of doing things. I think we have all benefited from actually being more frequently in touch than normal. It has been easier to set up a meeting, I also think it's still very valuable to take a day out like today, almost a full day like today, to both give us an opportunity to go a little deeper in a number of topics, but also for you, of course, to interact with us and the representatives from the business that are here today to get more familiarized with how things are going these days. I will say, I think they are going good for the group. We have come out of COVID with strength. We are very strong and well-positioned in our three largest business entities. We have two smaller that by nature have a lower market share and therefore, of course, are seeing less benefit of scale and margin, et cetera. I'm absolutely convinced that we can also bring these two businesses up among the absolute leaders in their respective sectors. That's why we have set the agenda as we have today to give you an opportunity, especially on the communication side, EPOS side, to see what we're doing, how we're investing. This is a fantastic growth opportunity for the group. The market is moving very fast, and we will share that with you. Delivering sustained growth post the pandemic, it is and means that we are very ambitious. We have a positive outlook. We are seeing pent-up demand out there in the market on the Hearing Care side that we clearly believe will help and support the business grow, maybe even beyond the mid- to long-term guidance that we now also put out. We look forward. We are full of enthusiasm and full of belief in the Demant's ability to grow in the years to come. Therefore, a little bit of reiteration on the trading update we sent out this morning. Taking a long-term view, some of how we move beyond the challenges we have obviously seen the past two years, not just with COVID, but also before that, the cyber attack, some of the fundamentals in the Hearing Care market, and how to gain share, and then a bit on ESG and sustainability at the end of my presentation. Update on current trading update. You have seen it this morning. We basically keep the outlook for the year, but it is two things. The hearing healthcare doing better than we would have expected. We still see a good tailwind from the French reform in the business. We talked about a tailwind in first half, and we expected less in second half. We still do, but we are in the positive end of that tailwind. There seems to be a continued strong intake of users to get not just free hearing aids, but hearing healthcare in France. We still see the wholesale business benefiting from that in France, but also doing well in the U.S. market that are still among the commercial markets that have recovered strongest and the best. Even though there is a little bit flattening of that development in that market, we do well. Our diagnostic business continued to do well and perform very well, clearly taking share in the market and also maybe even stronger than anticipated. We definitely have a very good outlook for the rest of the year. We can see the order pipeline look good, and we can see customers keep on being interested. On the implant side, it is a slow recovery. It is no longer just a matter of whether hospitals are open or closed. It is the full pipeline that it takes. It is a process to be ready to be a candidate, especially among adult people. You have to have been through a counseling. You have to have talked to an ENT and go through a process. In many places, we can see the pipeline is thin, meaning it's not that people that have not been taken care of for the past one and a half years is waiting outside some kind of door, and when the door is open, then people come straight in. It is re-ramping that entire segment, and therefore, we are seeing it continue to be slow. It's in line with what we expected, but it is slower. The other half of the equation, or not half, but the other side, our communication business. We have come to the conclusion that due to a number of things, then we will not live up to what we have expected for the second half. We will see a negative organic growth, sequential growth from the first half into the second half of more than 10%. We will also in second half deliver, unfortunately, negative EBIT in the range of DKK -50 to DKK -100. This, again, primarily come from lack of growth in the top line, we still see our exposure, the way the product portfolio we currently have, the geography exposure we have, working a little bit against us. Then also we can just see that people that are making decisions for bigger orders with video, meeting rooms, et cetera, these processes seems to take longer. Where we thought we would get some of these bigger orders into this year, it's more likely they will move into next year, that is why I see this as a, we'll say, delay of the top-line growth. We continue and maintain significant investment, of course, always revisiting exactly what is needed, really short-term versus a little more medium-term when the top line is not there. All in all, we will expect next year a minor negative result, and the year after, 2023, a slightly positive result, and from there on, a year-over-year constant and steady improvement of the margin in the business. It is going from this joint venture into end-to-end. There is significant work to be done in building brand, building the global distribution, and getting out there and getting our share of the market, which positively is growing. Also today, as you have seen, we have actually updated our expectation for future growth from the past being 8%-10% to now being 12%. That's what we can see from competitors. It is especially the outlook on the video conferencing side, where we see significant growth in the years to come. The hearing aid market is resilient. The market growth is there. There is the same number of hearing-impaired people as we would have expected. What is happening is, of course, in 2020, stores were closed. This is the U.S. market you see on the curve here. Month by month, there was, of course, a very disruptive disruption of the marketplace. Basically, everybody were in isolation. Very quickly got back up. Some release of pent-up demand. Then into 2021, actually a very good second quarter with very strong growth. A lot of general optimism and a lot of cases going down, et cetera. We have seen, as we all follow, some reset of that process, but still a new stable situation where U.S. market is at least in line, if not slightly above what you would expect if you compare back to 2019, adding +10% of growth. This seems to continue also into September. A third quarter likely to end at 10%-12%, something similar to the first quarter. We can only hope from there on that we will continue to see a recovery also of the U.S. market. On the other markets, it's still primarily in Europe, despite of the French reform. The NHS lacked a lot in first half. It's now in Asia, Australia, and New Zealand that we're, of course, seeing a bit of headwind, and then in our export markets. Lately we have seen NHS building back up. We are seeing a normalization of most delivery systems in public delivery systems, except for the VA. They are operating, but for instance, closed door when it comes to, again, visiting the clinics and doing sales calls, et cetera. Supply chain, just nothing new in reality, but just confirming, of course, that we as a company are also working intensively on securing for us components to our main factories or factories in Denmark and Poland, where we do majority of all production for the group, whether it is in hearing aids, whether it is in diagnostic, and in reality, also together with Nice, all the implants. It's different on communication, but on the hearing health side, which is fantastic, very flexible to have it all close to our main markets. 80% of Hearing Care takes place in Europe and North America. It allows us to do relatively late decisions on where to use our components. We can really thin the forward-going pipelines. When shortages occur, and they do all the time, not all the time, but they do, and we work on them, then we can still keep goods going towards our sales companies, and have a very high level of flexibility. We do have to spend quite significant energy to secure alternatives when a supplier have challenges for a period, securing components with higher prices, et cetera. These things are taking place also with us, but so far we have managed to sail through this, and we also plan to do that going forward. That doesn't mean that you would never find a back order anywhere in the system, but big picture, we are doing well in this situation and are, again, benefiting tremendously from having final stock and finished good very close to all our main markets. Freight, of course, continue to cost extra. It's not so much on the hearing aids and the hearing healthcare side, as most of the freight cost there is the day-to-day delivery to your local customers. That is not where we're seeing the main raise in prices. That is between Asia and Europe, that's mainly on the component side and therefore feels less. Whereas on communication is, of course, a significant impact to their P&L, as we have talked about before, because it's basically working with three global hubs where the goods that are finished goods, all produced in China, are coming from just like all other consumer electronics. Taking a long-term view, life changing hearing health is the core of Demant still, and we are in good shape. This has a lot to do with really understanding the nature of hearing loss and what this is about. Thomas is later on, or after me, going to elaborate further on how we see future opportunities for further development and increased benefit. This is still the core with a growing audio business as well. Deeply rooted, you know, I think all of you, most of the history. Again, it is since 1995 and the first acquisitions where we start integration of a number of companies in diagnostic, a number of companies in hearing, and also in 2000, the first steps into retail, which is a relatively passive strategy up until 2000, 2015, especially with the acquisition of Oticon, and where we really see a turning of the business, the way we operate it, the way we address it. Niels Wagner is later on today going to talk to you about the significant changes that have been applied to that business, especially over the past four years, where we now run a global business with really the aim of being on the very forefront of how you do things in modern hearing care. If anything, we have learned from the pandemic that the in-person counseling remains key in this industry. I could not imagine a better test of all kind of online models than a close down of the existing sector. I feel more comfortable than ever that the in-person counseling of changing from resistance, from denial into decisions to move on doing something about your hearing loss is key in this industry. To understand what it's about, et cetera, I'm going to speak a little bit more about that later. Oticon Medical from 2009 and with the acquisition in 2013 of Neurelec is, of course, especially on the CI side, a longer journey. We do not benefit from the installed base that a number of our competitors have. Even though we have successfully grown share in new implantations, then we would always, until we really get up in a large installed base, have a scale disadvantage, but it will come also to profitability not too far out in the future. The two, Bone Anchored and CI together, I think is not that far out if the markets normalize. We have, of course, lost, you would say two years on the CI journey, not seeing any growth and where you could be a little bit uncertain still with how will this market look exactly when everything opens up again. The launch of Philips have been an important milestone in getting another more end-user known brand into the equation. There are a number of channels and markets in the world where the familiarity with, let's say, traditional hearing aid brands is less, and where the collaboration and partnership with Philips have enabled us to fuel growth, and we are very happy with that development. A good long journey in 2020, then EPOS, our own communication business. If anything missing this overview, it is in reality the creation of the joint venture back in 2003 with Sennheiser, which is where we start our journey. For us, being in especially the enterprise business and the gaming business is not new. We have been in this business soon 20 years. What is new is to operate it end-to-end and invest in the branding side, et cetera. Remember, we are primarily on the professional side and not on the end user consumer business, which is a very different game. We need to convince relatively professional buyers that we are the right choice and not the broader public, as such. The group today is if we use midpoint of our guidance, so this is not a precisioning of the guidance, but just the midpoint. We will do DKK 18.5 billion in revenue this year, DKK 3.3 billion in EBIT. We will be at least 17,500 employees. The business is spread across hearing healthcare being the biggest part, but the Hearing Care business being the biggest now in terms of revenue, 41%, Hearing Aids 39%, Implants 3%, Diagnostic 9%, and Communication 7%. Global presence with actually EPOS on board and being much stronger in Europe than North America. We are skewed towards Europe, where we actually are biggest in U.S. I'm sure in the coming years we'll again see, especially North America grow, as well, of course, the Asian region driven by the development in China, which is still a big, big development and opportunity ahead of the sector for the next 10 to 20 years, I'm sure. Key messages of today, sustainable growth as we put it together this morning. We don't think it's fundamentally different from what we have done in the past 10 years. A 7%-10% annual growth in local currency, coming from 6%-8% being organic growth, then at least 5% from the Hearing Care. That's of course the 5% on the lower side, but at least, that's above the market growth of expected 4%. It's of course, always a little tricky, what is it in retail and what is it at wholesale and what have you. Communication, now believing in a market development of 12%. As we want to take share, at least 12%, an acquisitive element of 1%-2%. Adding that all together will give us 7%-10%, where I would say, the Diagnostic and Hearing Aids business is likely to be around 6%, 7%, slightly less organically in Hearing Care by nature, because that comes from opening new stores. On the other hand, a bigger acquisitive element in Hearing Care, both Oticon Medical and EPOS have to deliver above the 12%, 10% growth that are in these two businesses to really grow our solid position. On the margin side, all our businesses have opportunity to grow margin. It comes from scale on the Hearing Aids, Hearing Care and Diagnostic side. It is of course more incremental. It comes with the market share gains over time, no doubt. Whereas on communication and implants, it's more transformative, of course, as we will have to take and will take significant market share in the years to come to build scale into those businesses, which I'm sure we can. Then resilience of the business. Again, a lot of digitalization, of course, also happening in our sector and industry, but it's just not, we simply don't see the majority of the business moving to some kind of online model. This in-person counseling where you discuss what is at all wrong and what are the choices I have to make is still key to healthcare. We have only seen ourself confirmed in that. Then a very dedicated R&D effort to overcome some of the things that otherwise would work against a well-functioning hearing aid is in very proprietary technology. Again, Thomas is going to share more with you today. We still believe that that's a very competitive edge. It is the hearing aid diagnostic dedicated type of businesses, implant type of businesses that are dedicated to this industry that for years have shown to drive the game. I foresee that also to be the future. Emerging strongly from past challenges we have had here since 2018, the cyberattack was, of course, a hard hit on 2019, but even more profoundly, of course, in 2020 from the pandemic, from COVID, especially on the Hearing Care, where EPOS, on the other hand, saw a boost. As you see here, 2021 is in good shape and the business is back and delivering very high growth rate, high profitability, and a very healthy business that's come out after the pandemic. Here, a number of highlights. I've mentioned many of them. Launch of new strong Oticon More and similar technology in other brands. Gaining share in U.S. Hearing Care really performing well. A really good operation that are able to pick up when there is a reform like in France, and leveraging significantly on that extra demand. Implant, a lot of improvements under a otherwise, of course, negative market conditions. We have just launched a Ponto 5. We have a new Tesla implant. We have achieved U.S. approval for our CIs, a lot of good things. Diagnostic, doing really well, gaining significant market share, and based on that, for sure, also increasing margin. There is also in that business, very significant scale, grow a lot from the disposable and calibration service business. We have established EPOS. We have tapped into the extraordinary market potential in 2020, and we have launched the first video. In all businesses, there are strong activities and important milestones being reached, despite of, you could say, the very short-term focus that you, of course, get during a pandemic like the one we have just been through. Again, hearing implant and diagnostic, we are not going to speak much about today. That's just to sharpen the program and make sure we have a proper time for the topics we select. We are seeing a lot of good stuff coming out of the implant business that will support future growth. I have mentioned the highlights, maybe further on the bone-anchored, a new type of surgery that will make it even easier to do the surgical procedure in, let's say, medium to larger ENT clinics. You don't need to go to a hospital, which is also a reason why this business has performed better during COVID than the actual implant business. Diagnostic, I have nothing else to add than what was just said. It is really a sound business. We have a very strong market position. Our main competitor is losing share. We are gaining share. We see no reason why this shouldn't be able to continue. We keep on investing in the business, expanding into adjacent areas such as balance. We continue to expand in calibration disposable service business, which is a bigger and bigger share of the revenue. We have also, since we met last, worked on the transparency, the way we report. We have created segment reporting, the Hearing Care business versus the communication business. We have split the revenue between hearing aids and Hearing Care. René is going to show you a bit more also from the history in his presentation later today. We have expanded on more metrics for short-term guidance and also even further with the announcement today, further put light to what we basically feel we have always said, but removing a little bit on the interpretation of what does it then actually means when it comes to the numbers on the medium to long-term guidance. Hopefully also supporting you better in understanding where the business is and where it potentially is heading. Fundamentals of the hearing healthcare market intact. We still see solid growth rates in value in hearing aids of 2%-4%. We see hearing care growing the same. That's, of course, a bigger business in nature because of the markup. Remember that a significant part of the hearing aids that are sold, are sold not through commercial retail, but into hospitals as well. Therefore, you cannot just take the two and see the margin in the retail business. There is the VA, NHS, et cetera, where you cannot speak about a retail price as such. Implants growing 10%, 15% in the base. It's very dependent on new products introductions. We have seen that a number of times where CI is more steady, and therefore the relatively big range. Diagnostic growing 3%-5%, in particular driven in by Asia, but also new channels opening up in many markets that also need new equipment. Communication is, as I said, up to 12%, and it is coming from a really strong push forward of the sector due to COVID. We are having a virtual meeting today. We are all going to have more virtual meetings in the future. We all want both good sound, but also good picture. We still feel we are together instead of flying all the time. We think it will move more back into the offices and equipping offices in the coming period. The same on gaming. Online gaming is definitely here to stay, and we also believe it will expand further. At least at or around a 12% growth, and for that means at least 12% on our business. Aging population is the same fundamentals. We are expected to live longer. There's also more and more people on the planet. We will have basically a doubling in the next 30 years of the people that have turned 65. Hearing loss don't know anything about, maybe knows about age, but it's not a period of your life. The longer we live, the more hearing impaired people there will also be. It predominantly is going to happen in North America, in Europe, in China, in Japan. There will still be very few in Africa, more in South America, but not as many in the African region. Still also our expectations for India when it comes to the market, despite, of course, a lot more seniors is still somewhat modest. It also takes a bit of infrastructure investment, et cetera, before the market occurs. Also in the future, predominantly European, North American, Australia, New Zealand, Japan, when it comes to the hearing healthcare side of the business. The communication business is, of course, much more diverse when it comes to what markets are in focus. Pent-up demand. We have not seen a lot of it come in 2021. So far, we have added a bit. As you can see from this, we estimate that the loss in units across all channels, all geographies, was 3.4 million units in 2020, and another 300,000 added in 2021. Primarily coming from export markets and NHS that were lacking. Europe, excluding NHS, has pulled in a little bit, and the same has North America. Europe, of course, predominantly due to the growth in France. Also we start to see a number of other markets that are actually pulling in the line. I would say the biggest commercial delay remains to be in Germany, but also there, some renewed optimism. Gaining market share in hearing healthcare space. We are centered around, as I said, life-changing hearing health. We want to be a leading hearing healthcare player. We want to grow, we want to be a clear number one in all the product segments we are in. In retail, we have no number one ambition. That would take a lot of acquisitions to get there. We want to have best-in-class numbers. We want to show growth, we want to show profitability in line with the best you see in the sector. That's possible. We have a strong strategic framework for driving this growth. We have an operating model that I'll speak to in a moment, a clear organization. We are fundamental believers of keeping key activities such as R&D, operations, sales and marketing, supply chain management in each of the business areas we are in. Not trying to do one big Demant. We need focus. We need customer focus. We need attention in all our activities to the markets we are in. We operate intelligently multi-brand activities within each of our businesses, but the businesses run with relatively high independencies when it comes to prioritization, and we see that benefiting the business on our more shared service part of it, HR, finance, and IT. We have also started a more dedicated approach where there is, of course, a lot of things we all share, but the people that work in these different shared services have typically one or two businesses that they are much deeper into in order to make sure, again, that their support is in line with the need and DNA of that business. A lot of focus on people and culture, strong values. If anything, coming out of the two crises, it is a stronger company. It is a company that know where you have one another, that help one another when needed. We have lost very little energy in internal friction and discussion and have a very collaborative culture that is well set up for handling a dynamic world, as we have seen. A growing sustainability agenda. I'm also going to get back to that, so not speaking so much to that right here. The key enablers for growth comes in one hand, dedication to each of the businesses. On the other hand, there is a number of synergies between the businesses. In innovation, again, I spoke about dedicated R&D teams, but there is things that goes across in wireless technologies, in understanding cloud, AI, these technologies. We collaborate very closely. We share knowledge. We get better from talking to our peers in the other businesses. On the infrastructure side, especially, of course, for the smaller businesses, we can add a lot of value by not having to think that much about infrastructure, IT, hardcore infrastructure, global sales companies, et cetera. This is an infrastructure that is absolutely key to both the future growth of the communication business, the implant business, and for many years have supported the growth as well in the diagnostic business. Of course, today, with the size it have critical mass in more and more countries to be fully on their own, which we could also see in the future, for instance, of course, for implants and diagnostic, growing independently. The communication business is quite independent. It's very different sales channels, et cetera, so it can more be like hosting an office than actually sitting that closely together. Global distribution. Working closely in the distribution side in each market, really to understand reimbursement systems, market development, DNA of the end user and consumer. Digital sharing, digital data within what is, of course, allowed, and really understanding, again, consumer behavior in each market is just key for all our sectors. Diagnostic is always a bit of ahead of the curve, knowing where market expansions are taking place, who want to further expand their distribution, and that, of course, is something that tell us, again, good insights to how the market is developing currently. Resilient business model. Talking about why do people get a hearing aid and why do some not. I think there are no changes to the very fundamental. I'm sure Niels Wagner is going to elaborate further. There are two to three main reasons why penetration is as it is. It is about that milder hearing losses where it's not a challenge to hear that there are sound or what it is. It's all the small file details that you miss. In noisy environments where more people are talking, that prevents you from creating an understanding of what's being said, at least without spending tremendous energy, leaving you tired. This means that for some, it can seem like there is no problem, except for your surroundings, because you don't have the natural calibration. You would just say it was a very busy restaurant or a very loud restaurant or very bad acoustics. Therefore, the actual realizing of the problem from the end user himself just takes time. Not reading, we know ourselves, not hearing is typically something your surroundings discover way before you. That is a big reason why penetration for mild hearing losses is as it is. If you're not there yourself, you will not notice advertisement, you will not notice people calling you in. Even when you start feeling that it's there, it's still a stigma, a fatigue against aging. Therefore, you will wait another day, typically, if you can, until the problem is more profound, and you can yourself see that you suffer or your better half or your children push you to do something. When we see a reform in France, this is not because a lot new people have discovered they have hearing loss. It is because they, for years, have said no. Now the last excuse is gone, which is that it costs money. When it is for free, when everybody tells you there is a hearing problem and the stigma is likely to be overcome, then through a consultation process, a lot more people come in. I think the French case that we see right now is a fantastic case in how this can accumulate for many years. I'm sure that the users we see coming in now have been accumulated over even 10, 15 years. Not until that accumulated non-penetration has been released, we will see a normalization to a new level where there's, of course, more people coming in because you have also lowered the barrier when the price goes to zero. All experience from all markets show you have to get to zero. It's not enough to go to EUR 300, EUR 400, EUR 500, even maybe EUR 100. Actually, I asked an American the other day, "What would you think it should cost if it was kind of a no change purchase?" Below EUR 100. It just comes below EUR 100. You really have to get low that that barrier is not the one you use, not that you could not afford it, but you will not do it unless it's for free. Therefore, typically, also see that utilization is a bit lower in markets where there's free hearing aids, but also probably the three markets in the world with the highest penetration, Denmark, Norway, U.K., where there is a hospital system, where it's now part of normal public healthcare, and maximum penetration is around 50. There's still one in two that don't do anything. There's both a private system in Denmark, there's a public system. It's not because it's not known that you can do something. It's not that you could not overcome the financial issue. Still, there is around 50% that choose to do something. You can argue that that's actually relatively high for a disease that comes relatively slow and where for mild hearing losses, a lot of people get around it by turning up the TV or people speak a bit louder. The counselor, the process of counseling is still key. You come in to learn something and with a bit of resistance, you have to choose form factors, you have to choose technology, you have to understand quite a bit. You have to go through counseling. You have to understand why there is a price difference. You might even want to try one, two, three models out before you make up your mind and before you're convinced to do something. Again, I don't believe it's pricing when people walk out the door and don't do anything. If it is, it's just an excuse for something else. Not until, again, it gets to free, you remove that barrier because it's just one of the things you use to argue that, No, I'm not ready yet. It is typically the comment you get, I didn't feel ready yet. Niels can talk more about, or will talk more about that. Overcoming barriers for adaptation, discreetness is key. It has to be literally invisible. It is still one of the biggest concern for people is that other people will notice. If I want to show it, fine, but I don't want it to be shown. It is not natural for any of us to sit with anything in our ear at a restaurant or a dinner. It might be at the airport or a busy street. That's not for communication. That's to listen to something else and not the people around us. If that one day becomes ordinary for all of us, then that could change. Until you're the only hearing impaired person that have to do that, discreetness is key. Medical-grade diagnostics, ear canals are very different. The whole fitting of it is much better done if you have proper diagnostics. We are researching and looking into actually new diagnostics that can further help seeing how is your understanding of speech in noisy environment and not just what is a threshold for when you can hear a sound. Individualization is key. Audiology that actually works in noisy environment is key. Thomas is going to speak more about that. Professional counseling that helps the end user, I also believe is key for the future. Therefore, from a effort point of view for Demant, miniaturization, strong audiology, and very professional counseling distribution is key investments in generating success growth in this sector and this industry. It is end user outcome. It is the satisfaction of the end user. It is changing the problem and understanding that there was something wrong I might not even have discovered. Feeling I'm less tired, feeling I'm more myself is the outcome we are all looking for and what drives satisfaction. We are also a positive impact business by nature, what we do help people. It turns the world into a better place. When a child is well-fitted with hearing aids or undergo surgery for implants, you can take the same education as the rest of society. You don't have to go to a special school. The likelihood of early retirement is reduced significantly, et cetera. A lot of positive impact. Also from age-related hearing losses, people take care of themselves, less risk of cognitive diseases, staying longer in your own home, et cetera. Many good examples. In 2020, we have helped nearly 2 million hearing impaired people, helped well above 10,000 with CI. We have double digits, million number of screenings of newborns, help people with headsets, et cetera. A lot of good things. We have a clear plan for growing our efforts in sustainability and taking our share of it. Our main focuses lies in diversity and inclusion for us as a company, and also externally on climate impact, where we don't just look at ourself now, but also full Scope 3, meaning what is outside our direct control and where we would have to work with suppliers and partners, et cetera, to improve. We are doing a lot already. We have increased diversity of female leaders in the group. We have done a element of charitable hearing testing and campaign for better hearing, a event we run every year in our retail business, where we screen people and through that give donations to people that are unable themselves to finance hearing loss treatment in commercial markets. We have increased the engagement among our employees. We have installed code of conduct whistleblower schemes, et cetera, and have done a lot on packaging, which is one of the areas where we consume much. The actual product in itself is not consuming a lot of energy and is not as such compared to the benefit and the length of life. We have much more to gain in how we actually get our products shipped and distributed around the world. There is a lot of disposable going into that and an area we look a lot into how we can reduce our CO2 emission coming from both transportation but also packaging going forward. Part of that is a very positive side effect of the collaboration with Philips. Philips is slightly ahead of this curve, and in our collaboration, we look at how could we actually develop a greener hearing aid also from material use, reuse, packaging, et cetera. This is, again, just another example of the benefit of working closely with a very professional partner like Philips that are, of course, investing significantly into this area as well. On the ESG ratings, we have work to be done. We do relatively well in the MSCI, but in Sustainalytics and ISS ESG, we still have improvements to do. Our take is that it's a lot about what we report and be more transparent and open about product governance, how we ensure high quality and taking care of when there is issues around products and how safe the reality is what we do. That seems to be the biggest gap. We are working intensively to also make sure we, in the other ratings, get a high rating because fundamentally we see the business as a type of business and a type of company that, of course, should get a very high rating. Then also today, we announced that we have now for the Science Based Targets approach, which we think makes a lot of sense. It is scientific, it is transparent, it is a bit of Pareto is also good here that you really address the issues with the biggest likely positive impact if you can change. There are certain things we cannot solve, but we can call for greener transportation. We can call for better materials used in packaging, et cetera. We ourselves can, of course, try to use less. That's how we, again, working more with our partners, will have to see how emission reduction can happen throughout the entire value chain. We estimate, but it's still early rough estimates, we'll soon get more data, that our Scope 1 and 2 is in reality down around 10% of the group's total emission. It's very obvious we have to work diligently with suppliers and partners. Demant, in summary, today, we're in good shape. We have emerged well from the challenges we have been faced with in the past years. We feel we're in good shape. We address attractive markets with strong growth drivers, both in communication and in hearing healthcare, but you would say, especially in communication. We see a scope for pent-up demand being released in the coming years. Whether it exactly happens in 2022 or into 2023 is difficult to say. Whether it all comes back or part of it is also impossible to say at this stage, but fundamentally, I don't understand myself why should penetration change from something that happened years back. I do think that people again, will go out, people will again, see other people, and this way they discover they have a hearing loss, and then there is no reason why they shouldn't be able to do that, take that step. There can be a delay in public systems that needs to build up capacity, et cetera. I think it will come. There could be third-world countries that, of course, are also financially much harder hit by the pandemic, and therefore, there might be, unfortunately, people in these countries that never get a hearing aid. Other than that, I think it's likely it coming. We want to be the leading hearing healthcare company in the sector. I would say that has been the ambition for many years, and it still is. I think there's good reasons why we will take important steps in that direction. We have very unique experience across diagnostic hearing aids and Hearing Care, and implants to deal with hearing loss and expertise that benefits all the businesses. Then, as I just talked through, a positive impact business that also in the years to come, will further increase its effort to reduce the impact on society. That was in summary, Demant. I think with that, I think we are ready to move on to the first Q&A part. There might be things we want to postpone until some of the others have spoken. Mathias and I will carefully see whether we take it now or a bit later. Mathias, take care of the inputs from outside. I'll take a sip of water. I think, Christian, you were first. We'll get a microphone around so everybody can hear you. Please wait for the microphone. My question is to the pent-up demand that you're talking about, can you put that into context of your midterm growth targets? When you talk about 3.7 million hearing aids as a potential pent-up demand, that would be the equivalent of 20% of an annual, normal one-year market volumes. If that is to come back in just a sort of remotely near-term timeframe, that would suggest a growth boost of several percentage points. Is that embedded in the targets that you put forward today? That's where we try to talk about a mid to long-term. I would say that's beyond pent-up demand being released. The pent-up demand lies more in the short-term guidance, which we will, of course, for 2022, have a better assessment of and talk about when we finish 2021 and speak about 2022. Just to clarify, is the implication then that if we see this pent-up demand coming through, that we should actually see you come out in the upper end or above your near-term targets here? I definitely think it's a yes, we will come up in the other end, everything else equal or even above, yes, short-term. Martin? Martin Parkhøi at Danske Bank. Two questions. First, I know we will talk about communications later, but with the performance that we are seeing for the communication division this year, can you just explain what makes you confident that this is an organization which can grow above the market? I guess that there are significant companies out there which are investing even more on distribution than you are. Then on the supply situation, apparently you are not particularly hit, but what we can hear at least is that the U.S. audiologists, they are complaining about significant delays for many manufacturers also, some which are mentioning. Can you comment a little bit about how you're seeing the global for all companies on the supply side now? I will start with your second question. No, I cannot comment on others' challenges. You, of course, have some maneuvering, and the longer the visibility you have, the more challenging it can be. I can only comment on our own, and I don't have anything to add to that further than what I've said. We are, of course, also, as I said, having markets or segments where you would be able to say, Okay, there's extended delivery time or even a shortage today, but it is very small and periodic, and all our main markets, our newest and latest products are all doing well and can be supplied to customers. On the EPOS, what is it that makes me believe? Well, it is we have done it for the past 15 years plus. I simply don't believe that just the change of a brand and getting in control of the business would make it more difficult. I think that's the key to do better, to gain more share. It was part of the reason for the de-merger that we had appetite of investing more in, especially the enterprise business. We saw it coming not to the profoundness we have now seen with COVID, but that is a trend we want to be in, and we think we have a lot to offer. Yes, I believe we can gain share. I believe we can grow our share in markets where we have a very low share today, up to the level we see in a number of European markets. I see no reason why that's not possible. By investing further in R&D, by investing in sales and marketing efforts more in these countries than the rest, and then I'm sure we can also gain share. The fundamentals of our product portfolio is there. Our ability to create value for customers and innovation is proven. I think also in the future, we can do that. Maybe one over here. This Carsten. Thank you very much. Carsten from SEB. Two questions. First, when you mention your omni-channel approach and you want to succeed by being a true omni-channel player, I think that was what you said. Do you mind walking through the different channels and maybe sort of giving us an idea about where you're super strong? Where do you see any upsides going forward in terms of improving your current setup or standing? Then in EPOS, I don't know if it's possible, but maybe what size of top line do you need in order to break even in that franchise? I'll just take a piece of paper now so I don't forget your question. Let's start again on EPOS. I think we should return to some of these towards the end of the day. We will have a deep dive into the business. René will come a bit more back on the numbers and sizes and profitability. I actually think, Carsten, we should save that one to the end. Could I have your first one? Your second, sorry. The first one was on omni-channel. Yeah. Omni-channel. We have to be sure we understand whether we talk omni-channel, meaning digital versus physics or multi-channel. In our general business, we try to address all channels. There is, of course, some where we have a bigger opportunity than others. VA is an obvious example where we are very ambitious and want to grow. There is a number of other businesses we could mention where we want to grow the business, depending on which business you talk about. On the more digital versus in office, I think we should hear Niels Wagner talk about that, show how much we do on digital marketing, being in constant dialogue with users, whether they have a product or have just somehow shown they are interested in learning more or maybe have had a hearing test some years back and how that whole funnel is going. That's exactly what Niels is going to speak about. Let's see when he has spoken, whether we are there or not. Christoph. Thank you. Chris Grandland, Credit Suisse. I have two strategic questions. The first relates to benefit of scale, and I think you mentioned a few times that word. To what extent do you think M&A is actually necessary to become a leader, particularly on the implant business and the headset business? The second question is just with respect to your current business setup. Do you think actually there are more segments required and would be of interest to your group to expand? For example, other companies went into drugs also, at least now kind of slowly and gently. Thank you. Yeah. Thank you. We cannot base, I would say outside the hearing care, the retail business. M&A is not a prerequisite to get there. To have the growth we put here, stipulate here, the mid to long-term guidance. In retail, we have to buy more business. In the others, it is primarily based on organic. We think we can do it with what we have. On the new business, we have stepped into balance, but as one example. Yes, we do it from time to time if it's close enough to what we do. I think with the three main businesses and the two that are subscale, the communication and implants, we don't need more to deliver growth. If opportunities come up, we will always carefully look at it. That's where we are. On drugs, we think, and I think our competitors as well, this is very early days and you can follow the development in various ways. We monitor the situation, but I don't see drugs playing a significant role in hearing healthcare anywhere near term. All the way to, yeah, Niels, sorry. Thank you. You're first. Sorry. Hi, this is Niels from Carnegie. On your two smaller businesses, you are talking about transformative margin expansions. Would that mean that you will move from being loss-making to profitable, or will it mean that you would actually be able to kind of close the margin gap to the respective market leaders? Could you be a little bit more specific here? Milestone number one is, of course, to be profit-making. It is to continue that journey. You would ultimately have to see that if you have to narrow fully the gap on the margin side, you would also have to get closer on the market share side. Maybe it's not the full market, maybe it's segment that you are in that can you compare. You need scale, of course, to really come all the way up there. We can do much better. We can have a much higher margin. We can also have a significant positive margin in those two businesses after turning them positive in itself. All the way to the back. Hi, it's Oliver Metzger from Oddo BHF. Two questions from my side regarding penetration rate, to get a better understanding. First, you describe the free markets with a penetration rate of 50%. Is it more the profound and severe hearing loss where you really get a better traction as hearing aids are for free, or do you have at the mild hearing loss a better traction? Second question is on the size of a hearing aid. For many years, the size of a hearing aid was defined by the battery and the battery tray, and the ability of old people to open the devices. You now said that with miniaturization, it's meant to improve penetration rates. Do you think that the industry moves more towards smaller devices, or what do you think about that? Yeah. Thank you very much, Oliver. I don't have statistics on your first question. My core assumption would be that you would see the penetration not develop much further on the very profound hearing losses. They are typically supported, reimbursed in most markets anyway, somehow, and especially children, whether it's just health insurance, private health insurance, there is a lot more support. It is the more mild, moderate, is simply the threshold to get started that has one barrier less. It must come, not that I have full evidence for it, from the lower side. The 10% mild is slightly higher, the moderate is slightly higher. It is something we had just discussed that we have a fantastic case in France now. We can simply just look into post and pre, what is the actual hearing losses we fit. I'm sure we will learn. On your size of hearing aids, yes, I think we'll do a lot to shrink things, but it's always a balance. We have also added a lot. We have added antennas and radios and we gain maybe a little bit from encapsulating the battery. On the other hand, we also want long battery life, and the batteries are not as efficient yet. It's more this constant tug-of-war. Fundamentally, a behind-the-ear receiver and the ear device have turned so much more cosmetically attractive than past classical BTEs. There's still a lot of people that get a ordinary mold and a tube and so on, for more profound hearing losses, that we can still improve the solutions with in-the-ear speaker type of products, create smaller products. Power efficiency will go up over time. Yes, I think there will be further drive for trying to make more of the hearing aids fitted even more invisible than they are today. I think if we can just quickly switch to the virtual. There's a question coming in from Mattias Häggblom from Handelsbanken. If you can reference some data points, basically some points that support the idea of pent-up demand being released from the 3.7 million total units that have been lost. Yeah. I think we can clearly see that in U.S. We saw that in second quarter. We also saw it in the summer of 2020 in basically most European markets, including Germany for that matter, that we saw a very quick uptake. That was also, of course, a very short shutdown, where you would assume that those that kind of have realized they have a hearing loss were actually waiting to get addressed. Now, the second wave, you can say, the whole winter of 2020 into 2021 have been longer, and that's where I also think on the other side, it might take a little longer because there is much more people now that this pandemic have been on for one and a half year that might not have realized they have a hearing loss yet. I'm very sure that when society normalize and you do start to get out and see other people, you will realize that you have a hearing loss, and you will see pent-up demand coming in. There has constantly been a very close ratio between kind of the eight o'clock news type of positive or negative when it comes to Corona and basically, things like cancellation of appointments, et cetera. It's very short-term sensitive, but long-term, I think there is no doubt we will see the same amount of people, more or less, as we would have seen. Okay. Thank you. I think we have no more questions coming in from online. There's a question there. Parkhøi. Yeah. Martin Parkhøi, Danske Bank again. If we have time, we've seen recently with Eargo, of course, have had a little bit of rough time, you could say, with some problems with some insurance claims. Do you think that this is only specific to that particular company or client of them, or could there be other issues in the industry because they are not the only one who are dependent on insurance claims? No. I will not speak on the Eargo situation. I just know that it's important for insurance that you have seen a professional, and maybe some of these over-the-counter models have less, I would say, compliance with at least existing requirements for releasing reimbursement. Potentially. Okay. If there are no more questions here from the audience, there are no more questions from virtual attendees, I think we'll just jump over to the next presentation. Thank you, Søren. That will be Thomas Behrens talking about audiological leadership. Over to you, Thomas. Thank you. Today I'm going to give you an insight into how we drive the audiological part of our business through the BrainHearing approach that we've been using for the last 25 years or so. Basically, that journey has been driven by new insights in neuroscience that has demonstrated to us how we can provide sound so that it's easier for the brain to decode it. I'll be looking into Oticon More and giving you some examples of how we've been using technology to make sure that the sound has really become more available to the brain, and how we've then been demonstrating, both in terms of conventional outcomes, but also neuroscientific outcomes, how that sound has really been taken up by the brain in a whole new way. Finally, I'll be reviewing some of our latest additions that has proven to give us further strong benefits within our hearing aid business. All of this, as I said, we've been on a journey for 25 years. The past decade or so, I've given you some highlights here of innovations within all the core areas of hearing aids that have provided people with significant new benefits. For every premium product launch that we've made note of up here, we've actually expanded on the recognized benefits of hearing aids. All of this underlining how hearing aids can actually remove borders and make people take off up a larger part of the life that they want to live. Most recent example was one of the drivers behind the innovations that we have in Oticon More. Up until a few years ago, the hearing center in the brain was considered a black box. About five years ago or so, researchers discovered that there were several things happening inside the auditory cortex, or the hearing system in the brain, that allows the brain to efficiently navigate complex auditory environments. As we note here, when you get sound in through the ear, into the middle ear and into the cochlea, the cochlea forms this neural code that sends signal via the auditory nerve into the brain stem and into the brain. When the sound arrives inside the brain, it firstly enters this area we call orient, where the brain forms basically mental maps of the scenes that you are in, so that every significant component in that environment is represented. That mental map allows the brain to focus in on what is most important. That focus is really a key requirement for any cognitive system in your brain to work. Without that focus, you would not have efficient access to language. Therefore, because hearing loss limits your ability to both orient and focus, that's why people with hearing impairment struggle so much in noisy environments because they basically cannot navigate those environments and they are challenged in forming that bridge to language, and therefore their cognitive systems are impaired. That's why with effective hearing aid treatment, we can really release the capacity that people have in their cognitive systems so they can do what they want. To get to release that potential, we developed new technologies in Oticon More, and we specifically took on the challenge of using deep learning as a means to achieve these new outcomes. If you look at deep learning, it has many, many applications in hearing health, and I'm sure you've heard of many of these applications. Perhaps most well known is its application in medical imaging and diagnostics, where it's been demonstrated how deep learning can identify patterns or anomalies that humans cannot see. If you look into something like personalized treatment, you can understand data from patients in whole new ways because you can access much more data and analyze that in an ongoing fashion to give you input on when it's time to intervene. This of course also extends into improved health monitoring, including wearables with real-time data. I'm showing you an example there of heart rate monitoring, something that we've been looking into that I'll be giving you an example of in a second. Finally, we would also ultimately be able to use deep learning for chatbots, for delivering better service to all our users around the world. Of course, for doing that, it's important that we learn exactly what it is that our customers are desiring when they make contact to us. We can learn and refine that using deep learning. As I said, something we were looking at quite recently is based on a study we did with 100 users that were using our recent premium hearing aid, Oticon Opn S, and gathering three months of real-life data, both hearing aid data on the environment that people were in, as well as their pulse. What we saw was that basically as the listening environment increases in loudness or the level increases, then the pulse also increases. That’s of course controlled for any activity or anything else that could impact the pulse. Basically, we believe this is because pulse, or, sorry, the loudness of the sound is seen as a stress factor in the auditory system, and therefore, there’s a natural reaction by increasing the pulse. Also because there’s a higher demand on your system when you are in a more loud environment. We also see that the type of environment that you’re in matters a lot to how your system responds. If you are in the quiet environments that you see there in the middle, there’s really no big impact on the pulse. When you move into the louder environments, speech levels and above, there you see that the pulse is negatively impacted by how clear the sound is. You have signal-to-noise ratio marked up there, and you can see that as the signal-to-noise ratio becomes higher or you get a clearer message, then your pulse goes down. It actually matters a lot to you that you have access to that clear information that I also talked about before the brain is creating. As things progress, as we can get sensors into hearing aids, we can start using deep learning to learn across different modalities and provide even better solutions to our users. Deep learning, of course, requires rich data in order to provide meaningful outcomes. What we did for the Oticon More hearing aid was to record sound environments using this very special microphone that captures sounds from all directions. We took that microphone to specific environments that we know are important to people, we used that to curate a library of those 12 million sound scenes that we use to train the deep neural network we have in Oticon More for handling sound scenes so we can bring out the clarity, or we can bring a clear message to users in those situations. Deep learning really mimics real life. When we are training with those 12 million sound scenes, it's actually parallel to what happens when you learn a new language. To learn a new language, you need access to, of course, the sounds that that language is made up of. Not only the words themselves and the meaning, also how they're put into context in sentences on longer conversations or in a dialogue. As you learn that and you are exposed to it a number of times, you can then learn to speak that language, especially if you're given feedback, specific feedback that allows you to learn from the mistakes that you have made. We have been doing exactly something parallel in our hearing aids. We made the recordings that I just talked about of the sound scenes that represents daily life situations and used it to curate that library. Very importantly, we then created learning algorithms that gives our hearing aids the same kind of feedback that parents give their children. We are able to inform the hearing aids of the mistakes that they made during the learning phase, and then the structure of the deep neural network that we have in the hearing aid that mimics again the structure that you find inside our brains is then step-by-step taken towards an optimum solution. A specific example of what it is that deep learning achieves when it's successful. Here, a simple situation of asking deep neural networks to tell whether an animal is a cat or a dog. We can easily see that both of these animals have four legs, a tail, two eyes and a fur. That doesn't really help us figure out if it's a cat or a dog. None of you are in doubt which one is which, because you've been taught on telling those subtle differences between those two animals. That will give you the answer instantly. That's exactly what we have done when we train our hearing aids. We give the network the feedback to recognize the details or the differences in the fur, or in the patterns of the fur, in how those animals move. We have similar, actually, learning paradigms we do in sounds, because when we get a sound captured from the real world, we actually create an image of that sound that very much resembles these photos that you're looking at. We look for specific patterns in those images to tell us which sound is meaningful and which one is not. We do that for those 12 million sound scenes that I talked about, gather all that information, put it into the deep neural network and embed that network onto the Polaris chip that you find inside Oticon More. Because that chip has these very strong capabilities, then it's able to execute the deep neural network. Specifically, the updates that we did to handle the network was to increase the memory on the chip by a factor of 8, and then also give the chip more processing power so it could execute on the network. That would then give us a much better sound presented to the user. Now, how is it really that hearing loss impacts a person? I've provided you here with a parallel, because really what happens to people in these difficult situations is that normal hearing people would get in this very, let's say, constructed image that represents a very complex sound scene. A person with normal hearing has perfect clarity of everything that happens. The hearing loss is really compromising that clarity because it's removing information from the person. What the hearing aids are doing is that they are amplifying all the information and removing everything that is interfering, so that we are creating or giving back that clarity that the person has lost. Further, it's important to note that the impact, of course, is very individual. Some people really struggle a lot in noise. Even some people with normal hearing can struggle so much in noise that they actually need a hearing loss, a hearing aid, sorry. We're starting to see that, for instance, in France, where it's now allowed to fit a hearing aid to a person with normal hearing if there's a significant impact on that person in noisy environments. Further, our fitting software, of course, is set up to allow individualization of hearing aids, specifically so that you can counter the effects that a person is feeling in these noisy environments. We have been doing research on our hearing instruments, again, using the neuroscientific methods I talked about before. We record the activity on the scalp when a person is using our hearing aids. We capture basically an EEG and that activity, we can see that there's an activity pattern, sorry, generating when people are using the newest technology that you find in Oticon More that is a 30% more rich in terms of information than it was with our previous generation of hearing aids, Oticon Opn S. That 30% is actually information that is available to the brain that can be used for this process I talked about before, so people can better orient and focus on what makes sense to them. You can see that on the right-hand side, where we have done research to document that people now understand 15% more of the words that they're hearing in a noisy environment. We actually, with Oticon More, are achieving this dual goal of making the world more available to people so they can better orient, but at the same time, they can focus in on what is important and that can then make sense to them. What are the latest additions and evidence we have since the launch of Oticon More? It's actually that we've been continuing to use these capabilities and specific competencies that Søren Nielsen also talked about before. We have at our headquarters these laboratories where we can create, recreate the auditory world from those recordings that we've done. We can use that to create situations where communication with other people are of importance, but also situations where it's the enjoyment of the sound, for instance, music, that's important. If we look first at communication and your ability to pick up sound, there are a number of standardized methods in the industry to measure how much information you get out of a hearing aid. We've been using these methods to assess how much speech information comes out of a hearing aid when you fit it to a typical moderate hearing loss. If we do that and compare the Oticon More to two of the premium hearing aids launched right before Oticon More, a very recent release of a premium device, you can see that Oticon More, when the sound comes straight from the front, is outperforming those competitors. It's actually doing it even better than a person with normal hearing in that situation. You can also see that the person with normal hearing, if that person had used a hearing aid, would have also gained increased access to speech information. Basically what the hearing aid is doing in this situation is two things. It is making sound more audible, but it is also making the sound clearer. That second part is then what is also potentially of benefit to a person with normal hearing. As some of you will know, we have been on a journey where we have been trying to make all sounds around the person available, and not only those in front. If we now move the person speaking there in front, the green person, out to the side, you can see that the differences between the different strategies that exist in the market is now increased. You can see that Oticon More is now vastly outperforming those competitive technologies that focus on the front. You can also see that now, a person with normal hearing, when the speaker is moved to the side, the sound is clearer to that ear, and therefore, the clarity element of the hearing aid is a little bit less. The final thing I wanted to talk about today is music, because that has been a huge challenge to the industry for many years. It's sort of been a hate or love relationship for a person with hearing loss. Either they just love music and could really enjoy it, or they hated it. It's basically because, as you see in the upper right-hand corner there, when you compare music and language, then language is sort of this banana-shaped form that covers levels of sound and frequencies that are quite narrow. When you look at music, it's that much wider and more dynamic signal that therefore takes up a much larger part of the auditory world. Therefore, it's much more difficult for us to handle that sound inside the hearing aid so that it's both comfortable and enjoyable to the user. We've made a number of updates to our technologies, implemented those on the Polaris chip, come up with new ways of prescribing sound for individual people with an individual hearing loss so that they can much better enjoy the sound. We've been testing these updates in a number of different sound environments. You see the details on the left-hand side. On the right-hand side, we've put it all together. You see the ratings for all those eight sound environments for both our general program for amplifying sound, both music and speech, but that program is predominantly focused on bringing out the details of speech. You also see our previous music program, and then finally you see our new music program. You'll be able to see that now the music ratings on those previous technologies was predominantly in the lower hand side of those ratings. We've now been able to push those to the upper hand side. Actually, the increase you see there corresponds to roughly a 70% increase in the rating that people give the music. A very, very important step forward in helping people enjoy music and those many types of sounds that they've now started streaming during COVID. Again, something that brings out the sound quality in our products in a much better way. If you want to know more about this, any details, we have a number of white papers on BrainHearing, on our technologies, or the clinical evidence that are available to you online anytime that you want to. In summary, we have this very strong philosophical outset at Demant. We call it BrainHearing. It is driven by decades of research that we have been doing, specifically at our Eriksholm Research Centre, but also at the six other research centers that we have in the group. With the insights that that has given us, we have created a very unique approach that has proven itself to lead to strong innovations and even better outcomes over time. With Oticon More, we are providing that clarity and precision of the amplification that people need, so that the brain can be empowered to work naturally with sound environments. That has led us, yet again, to new benefits that has never been seen by the industry before. Some of the latest additions that we have launched to the market, have provided people with even better enjoyment of music, leading to a new level of sound quality in our instruments. Then finally, BrainH earing, we have full confidence in what that has given us so far, and we are sure that it'll continue to give us a number of new innovations and improvements in outcomes over the coming years. Thank you, Thomas. Søren, will you join us on stage? He's half asleep. Søren? Great. Thank you, Søren. If there are any questions in the room. I'll just quickly take a look from the virtual world. Yes. Hi. Christian Ryom from Nordea again. A couple of questions from me. On these measures of EEG and the other kinds of research that you do, is this mainly something that you do to sort of inform your own R&D and maybe for marketing purposes towards audiologists? Are you also using these data in conversations with payers? Are you exploring that opportunity to sort of prove actual outcomes towards payers? My second question is, you didn't mention anything about the opportunity to leverage the R&D that you're doing on the hearing aid side across your different businesses. Can you maybe sort of briefly touch on how you see those opportunities? Yeah. On your second question, how we leverage, we do collaborate every day across the business, both on the research side and on the development side. We share a number of resources and competencies, and knowledge can basically flow freely between our different units. That's something that happens every day. Those research methods I talked about, for instance, the EEG, yes, it's something we use very widely all the way from early research and basically up until marketing. It's really something that is flowing in our veins because it wouldn't be able to inform our innovation if it was not part of our early research so we knew what to aim for when we are developing new solutions. Maybe a comment here to you, Christian, on the benefit. It's obvious that it's a very technical test you have done here, Thomas, where you show this about the angle and so on. Of course, we want to get much closer to an in-clinic evidence for the improvements you have achieved. There's a very close collaboration, for instance, with diagnostic, and I know you are involved with this as well, Thomas, in how can we illustrate, how can we measure why we are different? We still treat most people as an average coming from a threshold of, can I hear a sound? It's obvious to really fit devices like this well for the user and also illustrate the point of what it is you're buying, then yes, it makes a lot of sense to understand more about your challenges with speech and noise. Again, we all suffer from that in the restaurant, and we could all benefit. Another angle is of course in noise cancellation and different devices on the communication side, which is also how does the product work in the office? When you are Teams certified these days, it's not just a compatibility issue, it's actually also setting standards for the noise reduction in the environment you are in. There's no doubt there is significant leverage from understanding how human brain makes sense of things and what is it that helps us, and what is it that in reality doesn't matter. Just to clarify, you are not at a level yet, say, or within the next two years, where you can actually leverage this data to, say, go to a managed care provider and say, We can sort of prove these outcomes. We will always use all this, all the public information is always used to argue for the benefit of our products. Unfortunately, sometimes payers, insurance companies or others don't prioritize this to the same level as you would typically do in a private setting, and therefore you can end up also due to compliance to tender rules and other things. Yeah. I don't know how to describe it, even though I claim we could describe it. They end up in something more generic because fundamentally many of them, not everybody, are there to put pressure on price and to lower cost of buying. We always use all the data we have to argue for paying more for quality, of course. Hi. Niels from Carnegie. I believe that three or four out of the top five hearing aid manufacturers, they offer some sort of artificial intelligence in their high-end products. Can you talk about to what extent those systems are similar, and if they are all internally developed and what advantage that would give you? Yes. Most of the solutions that you find in the industry today are based on basically a cloud solution where either a smartphone or a dedicated cloud solution is actually learning from data that the user is generating themselves in the usage situation. Whereas our solution is pre-trained on that library of sound scenes that I talked about. That training has been done to ensure an optimal situation to all our users in all relevant daily life situations. That has been embedded into the hearing aid. To our knowledge, we are the only provider that has a built-in system that can provide that benefit optimally to the individual person every day. The other solutions are based on learnings and for details, of course, you'll have to ask them. It's generally very difficult to ascertain an optimal solution when you only gather very little data for every person, every day. In order to make artificial intelligence work optimally, the data set has to be as rich as I talked about before, and that involves that the artificial intelligence can learn both to optimize the sound for every single situation, but also to generalize from the data it has trained on to whatever data it'll meet for every user all over the world. That's why it's so hard to really make sure that that happens, and to let loose these artificial intelligence systems for any kind of application. In our research, we have achieved a pretty clear conclusion that we need these systems to work on some relatively limited problems for now and train the artificial intelligence in the lab, of course, on real-life sounds, to achieve an optimum solution. Maybe if I may, maybe of the things you see, the feedback you get from the user is reality, how they operate the device. For instance, if they turn volume up and down in given noise levels and so on, then you can of course, correct for that over time. It has to be something where you see a pattern from the user related to a pattern in the environment. What we are trying to do is, the engine of a hearing aid gets more and more advanced. There are tons and millions of parameters that can be set. What we try to grow is the level of sophistication of the control system. It has a much better and much more nuanced set of parameters to control the engine from, you can say. That's pretty unique. Most of the other is learning over time of special patterns, just like Google believes it knows where you're going just because you sit in your car and go out. That's based on history. That's the main difference, that you have a historical learning that's relatively primitive, typically related to, i.e., a volume control, or if you have, for instance, manual control over directionality or different programs or something, because that's the only thing you can learn from the user. You cannot learn much about whether they heard well or not, because there's not a training device coming. There has been examples of that, and that's not moving anywhere. That you had kind of two months where you work, do not work, do not work, and stuff like that. That's at least not our route. Thank you. Carsten from SEB. You have a pretty scientific message here. Aren't you afraid that your average user or first-time buyer will not really be able to, first of all, understand and relate to all the charts and graphs you have about deep neural network here? Going forward, the engine you have in Polaris, how would it allow you to maybe get some more tangible features in, like what have you, fall detection, some of the things that some of the other manufacturers have been talking about as something that's maybe easier to relate to for the user? Secondly, being AI and deep neural and this, apart from having a whole new program as music, can you then also sort of show that the hearing aid is improving its ability to make you see a cat and not a dog so that you maybe going forward, also can see which breed you are looking at? Yeah. Starting with the last question, yes. What is helping the user is the clarity we provide. What the deep neural network is trained to do is to amplify the meaningful sounds, the sounds that carry most information, and suppress whatever is not providing as much information. That's how it brings the benefit to the user. We have lots of evidence for that we can share with you. Sorry, the next question was, oh. Maybe I can comment on that one. Yeah. We have brought the smartest guy we have today because of the audience here. This is, of course, to put substance to what it is we spend the money on and why we are not at the end of the road on otological research. If we don't understand how the brain is working, if we don't understand how you get meaning out of things, then hearing aids will flatten out, because then you would work within zoom in front of the nose, and that will help you hear what's in front of you. We moved beyond that. There's tons of evidence for that. That doesn't mean that that's what we explain to an end user. We put a certain level of sales and marketing. What it is that's the key message in this, you can follow more conversations, you can make the decision yourself, part of helping you with that is actually to have more context to your picture. Stuff like that is part of the counseling process that the professionals do, but we sell to the professionals. I'm sure. Hi, it's Niels from Carnegie again. A question on the future of biometrics in hearing aids. As we all know, you can measure the body temperature, the pulse, heart rhythm, et cetera, from the ear canal. Based on those parameters, it's possible to give a very precise estimate of, for example, blood oxygen. Are you also conducting research in other parameters? Would it be possible to estimate, for example, blood pressure, glucose, parameters of that kind from the ear canal? Yes, it's possible to estimate that. Yes, we are doing research on it, and you'll find that some of our colleagues are publishing on it together with collaborators. What we want, generally speaking, to make sure before we take this to commercialization, is that there's a strong benefit. As Søren was alluding to on the question before, that there's a benefit associated with it that points into the current business that we have. With some of the approaches that have been taken to sensors and hearing aids, there are some challenges to how you can market potential benefits such as fall detection or whatever that may be, because what if you are missing a fall? In the U.S., that could have severe legal implications. Whatever we discover in biometrics and how we can use it in hearing aids, we have to make sure that there's a sustainable business model associated with it. We share the data with somebody else that would like to take that part of the business. We don't see ourself becoming the predictor of strokes or whatever you could imagine it could be preventive for and where it could be nice. At least then you have to be extremely sure that you are in control of the outcome. Agree with Thomas. There is a lot of research also, EEG signals and others that should again increase the sophistication of the data points you have to control the hearing aid. There is definitely also a potential that there are others that would like to use those data. Still, the ideas have been more than the realities of patient monitoring that way, unless you are in a very closed, this disease, this monetization, et cetera, because you need to be sure you're right. Martin Parkhøi, Danske Bank. Just a question on long-term outcome trials. Are the industry or you making some kind of long-term outcome trials looking at, for example, dementia? What will the impact of being of long-term use of a hearing aid of your type compared to be a non-user or with a low-quality hearing aids, which I guess is, it also would be a very strong proof in front of payers and others, of course. Yeah. We are involved in some of these trials, and some of them d on't have any industry involvement at all, because, for instance, to prove a causal relationship between hearing loss and dementia, and then, of course, where the hearing aids can help slow down or even stop dementia, those are happening. There's, for instance, a very large ongoing trial in the U.S. looking at this. It'll probably be another five, six years before that trial is done and before we know what kind of causal relationship exists. However, we are involved in some other studies. For instance, we've done a large collaboration in Australia that is also publicly known. There's a large study ongoing here in Denmark, where we've actually been able to demonstrate that patients themselves recognized that a higher quality treatment gives a better outcome. That's data from about 2,000 patients gathered over the past five years or so. We are doing a number of those things to really demonstrate those impactful healthcare benefits from better hearing Good afternoon. It's Michael Junge at Morgan Stanley. I have three questions. Firstly, on the DSP. Can you comment on the DSP cost development in the industry, and perhaps also some commentary around what you're experiencing to pay for the rising processing power? Secondly, how large do you think as a manufacturer you have to be to be able to remain competitive? Is this a 2 million-unit-a-year business, 3 million-a-unit business, four or five to remain competitive on the DSP side to be able to handle this AI? Thirdly, do these rising costs result in another round of M&A between the large manufacturers? I allow myself to take, I think, that one. I don't think you can put an absolute two, but there was a clever person that once told me, a national economist here in Denmark, that Moore's law is forever, and so is the number of people that it takes to control it. The resources that you need to benefit from the potential in modern technologies that we now see, for instance, in deep neural network, AIs, et cetera, is in reality a double exponential function. It will always be the biggest can afford to use the most. You can see the difference between the biggest and the smallest in the industry, that the biggest are having a lower share of revenue spent on R&D, but still the absolute biggest budget. Yes, there will still be a tremendous pressure on the R&D organizations to be not just efficient, but making the right decision in what to prioritize. Developing your own chipset for the sector or for proprietary use will continue to rise and not just linear if you want to continue to deliver benefits like you see here. Yes, ultimately, chipset development is a driver for potential consolidation in an industry like ours. Maybe just a comment on the use of the DSP. When we move to artificial intelligence, you use your chip resources in a whole different way. In the past, we were writing code for whatever happened on the chip, and we knew to every single instruction on that chip what was happening. When you have AI, you don't write the code yourself any longer. You teach the deep neural network what to do. What you have, you move from writing code to gathering rich data and doing this teaching or learning of the artificial intelligence. You can actually handle a much bigger complexity on the chip with less resources when you're using AI. That's why AI is very meaningful if you can structure your data and gather the right kind of rich data for your purpose. Just quickly on the M&A part maybe, and then I think we'll have to jump to lunch soon. Yeah, I wouldn't comment more than I said. That's how I heard Michael's question, whether pressure on R&D is a potential driver for further consolidation in a sector, and yes, it is here. Was there more to it, Mike? No. That's how I heard it. I think we'll wrap it up here for the Q&A part. I think we'll just skip to the next part, which is lunch. We're not at an hour's lunch now, we're more like at a 45, 48-minute lunch. I think we should do fine with that. As I mentioned outside, there's a little bit of EPOS products, so make sure to pay them a visit. We'll be back at 1:45. Video demonstration in a meeting room into the right, where there is a connection to our office, where you can see the new video equipment demonstrated. If you just look outside, you'll find only headsets, and that would be slightly misleading for the business. I suggest you go in there. That's it. Thank you. [Break] Okay. Ladies and gentlemen, I think we are about to get set again and ready to start after the lunch break. I hope you all had a chance to eat. We have the last people entering now. Up next, we have Niels Wagner from our Hearing Care business who's going to tell us about the transformational journey that Hearing Care has been on over the last couple of years. I'll simply leave the floor to you, Niels. Thank you, and hello, everyone. During the next 45 minutes, I'll take you through this transformational journey we have been on in Hearing Care. I'll first talk about where we are today, the portfolio of business we are managing, and also the business model we are applying. Secondly, I'll get into details with some of the accomplishments that we have delivered over the past three years, which I believe have truly transformed our business in Hearing Care in Demant. Finally, taking that as the onset for the future direction and what you can expect in the coming years from the Hearing Care business. Firstly, looking into where we are today, and also getting back to the headline of the transformational journey. I think this first picture truly shows that it has been a journey. We have, as Søren said, started back in 2000 with basically five countries where we were running a Hearing Care retailer, then accelerating around 2010 into more and more countries up towards 2015, where we finally started this transformation into becoming a truly global retailer. As you may remember from previous presentations, for the first many years entering into this space, there was a significant skepticism from our wholesale customers. There was also a perception of risk on our side if we came out too transparent, too visible, being a competitor to our best customers. Therefore, we for a while postponed the harmonization, especially on the brand side, until around 2015, 2016. Until then, operating under many different brands, many different business systems, many different cultures. However, that has now changed, and that's what I hope you will also see during the next 40 minutes. We are now present in around 20 countries plus. We are an organization of around 8,000 employees, 2,500 full-time stores as we define it, being open basically five days a week. You will come across other definitions of stores that can show a slightly larger number. Altogether, we are approximately half the size of Amplifon, and we are sort of neck to neck in size to Sonova retail operation. We have built this business on 400 plus acquisitions, and that's, of course, why it has been a transformation, taking 400 individual businesses into one global company. That is the journey we have been on for the last three years, and also the journey we will continue on for the coming years. Where are we today? We are predominantly in North America, in Europe, and Pacific. We have 700 plus full-time stores in North America, a little over 1,500 in Europe, and 200 plus in the Pacific. If we look at our competitors in the space, we are slightly more skewed and biased towards North America, and slightly under-penetrated in Europe. That is basically the history of how we entered this market. Altogether, we are basically present in most of the larger hearing healthcare markets, except for the Asian markets. That is not part of our portfolio. Where are we with our portfolio of businesses? It is still a very differentiated picture when you look at the different countries. One of the key elements in retail is being a recognized brand. In a business where you only start considering hearing aids when you are 65, when you only purchase a product two or three times during your life, then brand recognition is not as easy as many other fast-moving consumer goods. Different statistics show that on average, a potential hearing aid user only remembers 1.3, 1.4 names. Therefore, in this industry, it's critically important to be number one or two in a given market, because that means that the potential user is aware, and that means the likelihood of that user coming to your clinic, coming to your store, is significantly larger. Therefore, we have taken a look at our portfolio of business, as you see up here on the slide, and defined leader as when we are number one or two in a market, defined challenger as when we are number three or four, and then built up everything below that. What you can see up here, when we then map our market position, being one or two, against our profit margin, there is a very strong correlation. If we are a market leader in a given market, then we also typically have a very high profit margin. The markets like France, Canada, Ireland, Israel, Poland, Portugal, and Sweden, where we are basically number one or two, we are also running with very significant profit margins. We have markets where we are number three, Australia, U.K., and U.S. In those markets, we also have a fairly good profit margin. There's still some room for improvement, that room for improvement can come from scale, from growing our market presence. However, it's also sizable markets, which is also helping us drive a strong margin. Then there are markets where we have only recently entered, maybe five years ago, like Belgium, like Spain. Therefore, we also have a somewhat weaker market position. It's also markets where some of our competitors are highly consolidated, for example, Italy and Spain. Therefore, the path forward to becoming a number one or two is a little longer, because there's no larger chains you can acquire. Therefore, the path forward is basically acquiring one, two shops at a time, and thereby building scale up to a number one or two position. In some of these markets, the profit margin is below average. Of course, the opportunity is also there to grow that profit margin by expanding our market position. Being a leader in a market also means you are able to attract employees, you are able to attract audiologists. You typically have an organization with a longer tenure in the management, as well as further down in the organization. That, of course, also helps running a good business and delivering a high margin. This is the picture today. The picture was somewhat different if we go three years back. The good news is that we have actually moved our position in a number of these markets. The journey in these markets have been different from country to country. Whenever we have been able to scale, growing our market presence, growing the brand recognition in a given market, we have also seen returns on investment in terms of improving profit margins. Some of the examples here is Spain, where we have firstly started out by basically expanding greenfield, setting up stores ourselves. A little over a year ago, we were able to acquire basically the only remaining larger retailer in Spain, and that gave us sort of a step change into scale in Spain. We're now at 120 clinics in Spain, which means we can start building a brand recognition, which means we can start building an organization that can deliver as best in class in the country. The same thing applies for Denmark, where it's been more of an organic journey. Of course, our closeness to the market allows us also of an easier identification of audiologists, as well as locations for greenfield expansion. That has also helped the profit margin development in Denmark. In the U.S. market, we also consumed the AccuQuest acquisition a few years back, which gave us some scale. Together with a brand harmonization that we took on three years ago, we are now also becoming a more visible and more recognized player, both for recruiting staff as well as recruiting patients for our business there. In Poland, we have been expanding very much on greenfield, but also select acquisitions from some of our good wholesale customers that have retired or realized that the competition was getting harder, and therefore, it was time to move on and sell their business to another player. That has improved profit margins in Poland. The same story goes for Canada, where we have for years been a number two. Over the last two years, we have managed to consume a couple of good acquisitions, bringing us into a first position in Canada, which has also seen us improve our profit margins. The direction is clear. For us, it is a matter of scaling the business, building a brand position, and then also, of course, building a professional organization that can manage the business well and deliver a best-in-class performance. At the same time, during this period of the last three years, also the way we run our global business have changed. We originated from acquiring a number of local chains. It was firstly the Hidden Hearing chain in the U.K., then it was Audika in France, it was HearingLife in North America. That was where the knowledge was sitting. That was where the knowledge of the best practices was sitting. It was also the agility on what to change in the business when things were turning the wrong way. Of course, it was also the management experience for many years in the business. Over the past three years, we have managed to sort of shift some of that knowledge into our global office in Copenhagen. We have up-staffed significantly in Copenhagen, and we are now more of an equal counterpart. We see a very fruitful cooperation where the local agility in the market and the local execution based on local circumstances plays together with a global organization that has scale in terms of technologies, in terms of expertise, in terms of best practice from other countries. Of course, also your neighboring peer countries that can also help you grow your business. These three mechanisms have seen a change in our business, where we today, compared to three years ago, have much better insights and understanding of what great looks like in Copenhagen in a number of key drivers, key areas for the business. It's, of course, M&A, but it's even more so, it's digital marketing. It's, of course, technology development, and it's leadership development. Those three areas have sort of become key competence areas where we have significant resources in Copenhagen that are driving programs and communities together with the local organizations, where the execution is still happening. Out of the 8,000 employees, it's still only a little more than 100 in the global organization that is supporting the local businesses throughout these communities and global programs. This element is a significant shift to three years ago, and it allows us to faster implement new activities. It also allows us to faster replicate best practices from one country to another. The best example, I think, was during COVID, where, of course, speed was of the essence, and where also we saw different countries moving at different speeds, and therefore, the ability to see and learn from one country replicating to another country just made us deliver at a faster speed, combining this global/local collaboration. All in all, we are at a significantly better place than we were three years ago. We have specifically within three areas, taken strong steps forwards, and it's these three areas that I would now elaborate a little bit on. Firstly, let's just repeat a little bit of what Søren explained earlier today about the psychology of the hearing aid consumer, because it's so essential for understanding the business model we are applying and it's so essential to understand this consumer journey that a hearing-impaired person is going through. Firstly, you recognize the triangle on the left-hand from earlier today, right? It is still a fact that hearing loss is closely associated with age. Because of that, the average consumer is still in denial the first one, two, three, four, five years as they recognize their hearing loss. The average consumer that comes into our clinics is still also in denial. They still, on average, at least, hope that we'll be telling them, It's not that bad, your hearing loss. You don't really need hearing aids now. You can probably wait another two years. That is the best message you could give them when they come into the store. Of course, the second best is that, It is actually getting bad, but we can actually help you. That's the funnel you see in the middle here. We are in a market where there is a significant need out there. There is part of the need that has not recognized yet and are not aware that they truly need it. There's some of that need that we can start to capture. The ones that have recognized, I have something, and I need to do something about it. There's an even smaller portion that actually ends converting into an active user, into converting the demand into a hearing aid user, of course, over time, driving loyalty. Understanding that funnel is critical for our business model. It's what drives quite significant marketing cost per sale, because you have to be in contact with a large number of users that end up not buying, today at least. It's also what drives the importance of digital technologies. A lot of users you're seeing today who end up postponing, you can actually reach out to them again in six months, in one year, in two years, and eventually they will convert, and you will benefit. Finally, of course, understanding the structure of this business, where this is a service business. This is the service that the audiologists deliver during that one-hour consultation, during that half an hour to one-hour fitting session, and the follow-up sessions. That's what truly creates value. That's also, as is shown up here on the right, is also what drives the cost in the business. It is the audiologist salaries. Audiologists being around 3,000 of our 8,000 employees, is of course, a key cost component in the business. Therefore, most of the optimization efforts that we apply to the business is centered around the audiologist. It's centered around the weekly schedule of the audiologist, where there is seven, eight hours per day in the schedule, and you can only see four, five, six, seven patients during those eight hours. Therefore, if you see patients that don't convert, you lose that hour. If you see patients that don't show up, you also lose that hour. Efficient schedule management is a key driver in this business. Another example, of course, why digital technologies, systems, and data understanding is a key component in managing the business. The consumer journey is really the way we manage our business day-to-day. It's, of course, delivering that perfect customer experience at all the touchpoints with our customers. To start with, it's the brand experience. It's the recognition of, here's somebody I trust, here's somebody I want to see with this concern I've had for many years, because I believe they can help me in the best possible way, and I believe they can trust their answer. Second part of our strategic pillar is the digitalization of all our efforts. It's clear how in a consumer journey with such a large potential that ends up in a smaller outcome, there's huge opportunities in being more targeted, in being more relevant, and being more timely with our communication. Digital technologies are just perfectly suited for that. Finally, in order to take the person through denial to accept to decision, it's the expertise. It's the expertise of the audiologist, as well as our expertise as leaders in the business in helping our people to help our customers through the journey and to deliver that customer experience. Based on these drivers, we have decided to go for this position as a modern hearing care expert because we believe that is truly what the consumer is looking for. If we then dive into this consumer journey, then as we talked about a little earlier, it is a true omni-channel consumer journey because it's one where the consumer interacts in many different ways. To start with, as you see on the left-hand side here, when they are unaware, they may be searching on the web, they may be reading things in the newspaper. When we go to the next phase, the awareness phase, that's maybe when they start to reach out. That's maybe when they pick up the phone and call the clinic. That's maybe when they send an email or get an email back. It might even be an in-person first visit to the clinic where they don't yet decide. Later on in the funnel, of course, you get to the decision phase and the reach-out phase. That's where you have much more frequent interactions, and it goes by telephone, it goes by email, it goes by text message or through our websites. Of course, then the first meeting in the clinic is typically in person, and we'll get back to why. Søren also talked about it a little bit earlier, there's more and more evidence that that is at least what most consumers prefer. Then, of course, adaptation phase, getting used to this and customer loyalty, getting people back. That's also where digital technologies play a big role, but also where cannot be replaced by the human interaction, the phone, the person talking at the other end being a very critical and important element. It is a true omni-channel approach, where depending on the individual, different channels, different media works better, and therefore it's important that we're working with this based on data, based on intelligence and feedback for what works with this kind of individual versus this individual, and mixing this together requires digital technology. In the first phase, branding is, of course, key because you're unaware, you've never really been into this space before. It's a low-interest category, a brand can help you take a decision. As I said, for the first many years as we were building the business, we were still operating with all the different local brands. At a certain stage, in order to drive a true global business where also you become truly trusted, we needed to harmonize the brands. This is a journey we have only been on for the last four or five years, but I'm glad to say that we are now more or less complete. We are more or less globally operating under one identity. We are in the U.S. and Canadian market operating under the HearingLife brand. We are in Europe predominantly operating under the Audika brand. We are also in Australia operating under the Audika brand, and New Zealand. In U.K., Ireland, we're still keeping the Hidden Hearing name, as it has a long brand legacy in those two markets. All in all, we are only just starting in a number of these markets to grow our brand recognition. In Hidden Hearing, we've been there for a longer time, but the potential is very significant. It is also a key element in leading our people forward, to have that lighthouse of a brand that people can relate to and understand why it's important we do things one way and do it the same way across the business. If we look across our portfolio again, we have fairly significant differences. We have some markets where we've been around for many years. France, Portugal, and Ireland, we have an aided brand awareness of 80%, which is basically best-in-class in the industry, and we are the leading brands in those businesses. We have a number of other markets where we hover around 5%, 20%, 30%, 35%, which is not sufficient to be the preferred, to be the one people consider when they take a decision towards where to go for hearing services. Of course, in those markets, we are still relevant in terms of tactical marketing. We can still touch the consumer. We can still get the consumer's response. We can still draw them to our clinics. The brand just proves in all our markets that it gives that extra confidence of the consumer, which basically lowers the marketing cost, which improves the response rates, and therefore makes our inflow of customers into the business more stable over time. Digitalization, as I said, is playing a role in basically all touch points with our customers today. It's especially, of course, at the early stages, where the media landscape has completely changed over the last couple of years. It's also in the nurturing where when it takes seven years or five years or three years from awareness to decision, then digital interactions through email, through text messages, and of course, web presence can make a difference in a much more effective way than when we only relied on letters and telephone calls. On the digital investments, we have seen a big improvement over the last three years. On the right-hand side here, you see an example from the U.S. market where we have basically multiplied the revenue from digital channels by eight compared to three years ago. We came from a fairly small scale in the U.S. in terms of digital dependence, in terms of our marketing mix. Today, it is the key driver of generating consumer interest in the new market, digital marketing. In the U.K. also, another good example where if you go three years back, we were very dependent on the Sunday newspapers in the U.K. market that has a nationwide presence. It basically only has a nationwide presence if you want a good price, which means we were getting leads in all across the nation, which means we had to service clients all across the U.K. With digital media, you can much better target your audience, which means we can now, to a higher degree, target leads in the areas we need it. In the U.K., we have basically moved more or less completely out of the Sunday newspapers and are now also more than half of our business coming from digital media. All of that has come together with a collaboration between a global hub in Copenhagen, and then local resources in the countries. It has become very important to increase our expertise. It has become important to be experts in this field. That expertise we have not been able to hire in all of the 20-plus countries. It also makes no sense because a lot of it can be replicated from country to country, and therefore, we have significantly upskilled our resources in Copenhagen. We have probably around doubled number of resources in digital marketing and the IT technology supporting it over the last three years. We now have a global, local operating model where a lot of content, the technologies, the processes, and the flows are defined globally, but the local execution based on a optimization schedule, conversion rate optimization is then applied locally in collaboration with global. We also make sure that we harvest the benefits from being present in other markets, and therefore, good ideas being replicated from one market to another. This is another significant shift in the way we work compared to three years ago, where this was much more of a decentralized model. We now have a much more global, local model where some of your work is global and some of it is local. Three examples that have made significant impact on the business in terms of digitalization is shown up here. One of the key challenges in the business is back to the fixed schedule of one audiologist having eight hours per day. When we look at our portfolio of clinics, some clinics are extremely busy. They can be busy two weeks out, just like the restaurants. Some restaurants are busy several months out, right? Other clinics, they basically have available space this afternoon. Whenever we were doing Sunday newspapers, TV advertising, et cetera, then of course, we couldn't steer the demand to a specific clinic. What we have now implemented is basically an algorithm that, together with digital social media, looks at our schedule on a daily basis. It looks to what does the schedule look like for the next three days. If there's available space, then I need to up my investment here, and I need to up my investment in these post codes where the clinic is. Then in the post codes where I already have a busy clinic, we will reduce our marketing investments. A clear example where we can actually much better customize our marketing efforts through the use of, you could say, AI, if you like, and algorithms together with digital marketing channels. Another example that I also touched upon a little bit earlier is all of the communication that used to happen from the first interest to the appointment in the clinic, as well as the interaction that used to happen from the first interaction and then adapting with hearing aids. A lot of these interactions can now be replaced by marketing automation, where we, based on where the customer is in the journey, we send relevant emails. In the early phases when you have your hearing aids, you learn how to replace the batteries and you learn how to get used to different sounds. You learn when to look for advice if you need advice. In the later phases of course, we're starting to nurture the client about potential new technologies that may be available that can help them if they have needs. Another example where digital technologies have both improved the messaging to the clients, the targeted information, as well as reduced the marketing costs because it is cheaper to send an email than a letter. Finally, also in terms of leading our people, we are using digital technologies. COVID have been, of course, a strong tailwind in this, because we have now seen that we don't always need to have all our staff together at a physical sales meeting. We don't always need to be in the clinic role-playing, interacting, coaching the people in order to learn a new skill or a new competence. We're using digital learning tools, tutorials, one, two-minute videos that are posted to the relevant people in the relevant clinics at the relevant time, that can teach them new practices, new skills. It is of course well-suited for very basic skills, very basic behaviors, et cetera, and therefore it does not replace as such the human interaction of the district manager when you have to coach a person to do something that they are not used to or that they find is a little bit difficult. We are now using both elements in terms of developing our people, the digital learning, as well as the physical interaction in the stores. Again, one example where COVID has made such a big difference. We have also previously always worked with a cascading principle in the business where global management would meet with country managers, country managers would meet with sales managers, sales managers would meet with district managers. Over the past 18 months, we have learned that now global management, we can just as easily meet with a district manager in Australia, and the district manager in Australia can just as easily be in the same meeting, virtual meeting of course, with a district manager in the U.S., and actually share experiences, share insights, and of course, drive engagement because I'm not alone in this. There are actually people elsewhere in the world that have the same issue as me, and we can maybe together find a better solution. I think a prime example again of why scale matters in this business and what scale can bring to this business that is not so available for the small independent. Most of digital marketing, of course, ends up the website. I am also very pleased that we have just launched a new version of our website. It's of course, also a global website, of course, translated into each market's language, but it's based on a global platform. We have actually received, just recently, a top ranking on this. 97% Semrush, which is basically very high compared to the average in healthcare and in the retail industry. What is measured and assessed in these kind of surveys is, of course, its speed, load speed, and it is, of course, user friendliness, how you find your way around on the website. Of course, those kind of things are not stale. It needs to be constantly optimized based on data, based on the feedback you have from the consumers. How do they act and where do they go to, and how can we improve that experience? How can we make sure that more of them ends up to the page where you have either a form fill out, or a phone number, or a chat box that they start responding to us so we can take them through the next step in the journey. All of this conversion rate optimization, there's, of course, also significant synergies from operating 20+ markets versus just being one. Because a lot of the mechanisms, a lot of the user behavior, is obviously similar across markets. All of this is about data. In order to deliver an even better customer experience to our end users, we need to constantly collect data about them. We need to constantly collect insights. Actually, even in this industry, it's not that straightforward. Because the hearing-impaired user first starts searching on the website. There they leave some, you could say, fingerprints or stamps of what are they looking for. They may eventually respond to something. They may call the clinic. There they also leave some data. They may, coming into the clinic eventually for an appointment, they leave some data. They have a hearing test. The diagnostic audiometer will also collect some data points. They may get hearing aids. The way they act and use the hearing aids also leaves data points. Of course, in our CRM systems and our marketing systems, whereby we have been interacting with them, they have also left data points. Tying all these data points together is not an easy art, because it does come from several different legacy systems. One of the great opportunities we are working towards today is actually tying all these data points together. The more data, the more insight we know about the consumer, the more relevant and targeted we can be in our communication. The better chances we have of taking them through this end user journey. It's a journey that we have not completed yet, but it's one we have invested significant energy and resources in. It's also one where we think we stand well in succeeding because we are both, as a hearing healthcare company, we are both in the diagnostic equipment as well as in the hearing aid development, as well as in the Hearing Care business. Therefore, we should have better chances than most in tying all these data points together and using it to the benefit of our consumers. A very exciting journey for the future in this area. Expertise. It is, of course, what the hearing impaired is looking for after those many years of consideration. As we talked about a little bit earlier today, a survey actually pre-COVID, done by the Ida Institute, showed that 94% of hearing-impaired people would prefer in-person meeting for that first hearing aid assessment. Throughout COVID, we have seen how damn difficult it was to get even the 6% to allow us to have a remote care hearing assessment with them, or a remote care counseling session. Basically, all of them asked, Can I please postpone the appointment until you reopen so I can come down to your clinic? That's strong testament to the importance of our audiologists, and therefore also, of course, we invest significant resources in developing the expertise of these people in helping these people deliver an even better customer experience to our customers. Of course, we also assess on that. We look at NPS scores in all of our clinics. We look at how the regions of a district manager performs on NPS. Average score here you can see so far this year was around 70, which is a high score compared to many other businesses, at least if you go widely across retail and even healthcare. We expect to continue to deliver on that and improve that by delivering more personalized training based on digital learning. By leading our people in a more engaging way, so the customer experience also becomes engaging. Of course, by lifting the knowledge of our, most importantly, audiologists, but also the front office person. Huge opportunity also on that end. I put a lot of markers now here on both the achievements, but also the opportunities. In this final section, let me just sum up on a number of these opportunities going forward. As you saw a similar graph earlier today, right? It has been proven through COVID that the business model is fairly resilient. We saw a very quick comeback in June of 2020, we have seen even a lift over the last six months in the business. It has predominantly, to start with at least, been existing users that were coming back. A strong proof of the value of having a large database of existing users and potential prospects that you can reach out to that are further in the journey, therefore, more likely to convert. The one element we are still missing somewhat is some of the new users. There's definitely still a little bit of skepticism, a little bit of reluctance amongst new users in terms of taking the decision. They are in denial, looking for the excuses, COVID still presents an excuse in many countries for us. Going forward, we are sure that we can benefit from this based on our network, based on our databases and our digital marketing programs. If we look at the portfolio again, then it's also clear that we have some strong opportunities here to build scale. We already have scale in a large number of markets, but there's also markets where we don't have scale. Depending on the market and on the opportunity, we would like to move, of course, more countries along the green arrow. Looking for acquisitions in some of these countries where we are only a number four or five. Looking for where to open greenfield, where can we hire audiologists and then expand. Whereas in the markets where we are already a leader in the market, where we already have national presence, it's more a matter of continuing to build and nurture our brand and then benefiting from that. There's a significant number of markets here where we hopefully in the coming years can take yet another step up in terms of margin improvement by driving market size. Also here, strong drive for further bolt-on acquisitions as well as greenfield openings in order to get that scale in any given market. Finally, we believe that by taking this position, the modern hearing care expert, by focusing on these three strategic pillars, strengthening our brand position, market for market, building our digital competencies further, and continuing to develop our expertise, both in terms of leading our people as well as the expertise that we deliver to our customers. We believe we have even more potential in the business actually to take us to the next level. There's still plenty of opportunities under each of these that I hope has also become clear to you throughout this presentation. That was my final word, Mathias. Yeah. Who is next up? Thank you very much, Niels. Just get ready for Q&A here. Just switch to the next slide. As well, I think there's a microphone for you here. Yeah, we're ready to take any questions that you may have now. I think we have a few. Yeah. Okay. You choose, Christian. Yeah. Hi, it's Oliver from Oddo BHF. One question regarding your focus on greenfield openings. In particular, compared to all your major competitors, they look stronger towards external growth instead of greenfield. Could you tell us why you have even a stronger focus on greenfield to them? Based on my insights and understanding, I don't think we are particularly more skewed towards greenfield versus acquisitions than our competitors. I think it is a matter of fact that location is a key driver for the hearing impaired. The closer a location you have to the potential user, the more chances you have they will come to you. Therefore, you also see in all markets that as more and more audiologists are coming into the market, we see a gradual expansion of number of locations. Of course, we want to take part of that game also in order to make sure that we keep our market share. It is a challenge because of the challenges in attracting new users. It is significantly easier to open greenfield in markets where you have a high brand awareness than in markets where you are a smaller player because, of course, the traffic comes more natural when you have a brand position. It is a journey because on average, half of your business in retail is existing users, half of the business is new users. It basically takes five years before you start to get on a normal run rate where you have repeat business, right? It is a matter of balancing your greenfield growth, basically, to still being able to continue sustainable profit growth. I don't think we are more biased towards greenfield, but it's certainly a good opportunity, and we have seen in some markets it has been very helpful for us. You could say it also depends on the opportunity to buy stores, of course. If you are in a market where there is less activity of that, then there is no other way than doing some green fields. It's case by case, and again, there's no strategy that one is better than the other. Julien Ouaddour from Exane BNP Paribas. We have learned that all the big retailers, I would say in the past weeks, have confirmed that they have strengthened their position during the COVID pandemic, and all you guys are willing to increase your retail presence with even more bolt-on acquisitions. Do you think it might become an issue for you to acquire the best assets because of fiercer competition? As I guess everyone will fight for the best clinics. Do you think the acquisition multiples may be impacted in the future because of that? Thank you. I would say for the past many years, there has been at least three players circling around every acquisition opportunity: Sonova, Amplifon, ourselves. I don't see that significantly changing. Of course, if everybody sees profit margins and growth outlooks improving, then the appetite for spending a little bit more might increase in line with that. I don't think it's a change in the competitive bidding for acquisitions, because it's more or less unchanged, I would say, based on the last 10 years probably. Carsten from SEB. I'll try again with the question I had for Søren earlier, and then give it to you, Niels. This digital innovation with the omni-channel for all users, could you try to break down what are the digital omni-channels and where are your strengths, and where do you see the largest opportunity to improve your current performance? Yes. Søren brought two perspectives on omni-channel. One was the sales channel. I'll bring two other perspectives on omni-channel. One is, of course, the way you reach your consumers in terms of marketing, and the other is how you interact with a customer that are about to decide to purchase hearing aids. Right? In terms of the marketing, I think my presentation have hopefully shared that we are basically utilizing all possible means in terms of omni-channel. We are using the telephone, we are using the print in some markets, we're using TV, we're using email, text message, website, et cetera. Right? In terms of the marketing space, that's pretty much the omni-channel. Yes, we're present wherever we can and where we think it gives the most payback. Right? In terms of the journey, you could say the clinical journey, it's also quite obvious to us that, as I said, most users prefer the first meeting to be in person. We can also see that in, especially during COVID, some of the other meetings, like the first follow-up or like service calls, they can be done through video, they can be done on the phone, they can be done by technologies where you can fit the hearing aids remotely. At least adapt and adjust the fittings of the hearing aids remotely. That is opportunities. It's still a very small part of the consumers that are basically asking for this and preferring this channel. It's certainly something we offer. We also have in a number of markets on-demand service where you can call 24/7 for an audiology service on the phone to support you. I don't know if that answers. Maybe in addition, Niels, wouldn't you say that one of the channels that have seen the most dramatic development is social media, where emails and web in general is even decreasing in relevance. The whole targeting through social media is developing very rapidly, and I think you are more and more in dialogue with users through social media. Absolutely. Hi, it's Niels from Carnegie. Two questions. First question is, you're not represented in Germany. What are your plans to expand into this important market? My second question would be around, if I remember correctly, when you made the acquisition of Audika, the French competition authorities ran a survey into this topic of manufacturer-owned clinics, basically just offering one brand from the manufacturer. What was the result of this survey, and are there any examples of any countries where competition authorities are conducting surveys into this matter of manufacturer-owned clinics, basically just offering one brand? Yeah. As you may know, our strategy has been for a number of years with regard to Germany to not go into retail because of a significant wholesale presence. I would also say that of course, we can also see the landscape in Germany is changing. Like has been the history in many other markets, we of course keep a close relationship to all our existing customers so that we make sure that if they are going into a phase of retirement or willing interest to divest, then of course we want to hear them out also to consider potential partnerships and investments. As such, we have no aggressive expansion plan for Germany. With regard to your other question, I can't remember. That was not the core focus at least of. The focus was more the density, including our wholesale customers, that they counted in when you looked at whether you got to consolidate in a given region. I think what we have worked a lot on, which I think should be there, is always that there is a connection and that we do recommend brands from the group and so on. It should not be secretive. We have no problem. We are proud of the products we offer. We think they are of very high standards and quality, but it should be transparent to the user that they are walking into the best stores they can imagine, and they will be offered the best products that exist. If there are people that insist on something else, we can also accommodate that, and do. Martin Parkhøi, Danske Bank. Just a question on conversion rates. Can you make some comparison on the conversion rate for an appointment where the hearing aid already had been primed on social media or tele-ordered or whatever, compared to a hearing aid coming directly into a shop? What kind of conversion rates are you actually seeing from these appointments that you generate? The short answer is it depends, right? There are so many factors at play, and you don't always know what kind of other touchpoints that individual consumer has had. That's of course, some of the things we are trying to get an understanding on in our digital tracking and tagging of consumers. There's another element that is that it is so much easier to be tempted to respond on digital media as it was in the old days, where you had to pick up the phone and call in for an appointment. With Facebook, for example, it only takes two clicks and then you have basically accepted to give away your consent and your details. You may have put in your email and then quickly getting back to you. I wouldn't say that they are more ready, the ones that you're getting from social media or digital media. We actually see quite good response rates and not significant different response rates on digital media versus more traditional media. If anything, the most important thing with digital users is that you respond rather quickly. The moment they have responded to you, they expect you to call you back or be in contact basically within 15 minutes because they may have lost the interest and gone somewhere else. The response rate is so much more critical, at least with digital media, I'd say. Hi, Christian Ryom from Nordea. A couple of questions. First on China. Of course, one of your large retail competitors have chosen to enter China, at least in part, through joint ventures. What's your considerations about how to approach the Chinese market from a retail perspective? The second question is to sort of the prospect of the U.S. OTC category. Is there something for you to do here in terms of maybe using your own retail to trial out some concepts? Will you be sort of a late mover to this market and be reluctant to use your own retail in this regard? Maybe I should take both. I think when it comes to China, we still find China very fragmented, fast-growing. Many players. Also players that build up a strong position in basically every major town. In itself, we don't find it strategically important to be active in retail at this stage. Does that mean we have no considerations about it? Of course not. It is the biggest market in the world, probably somewhere out there, and we of course have to look at timing and so on. With all our various wholesale opportunities, we think it's not a limitation to growth. It will not be the growth driver. There will be a day and it's a timing issue, but short term, no. OTC and own stores is a little bit, it just doesn't really fit together in my book. Niels, you're welcome to comment. OTC is because there is no counselor. I'm sure people that come into a store, they're not there because they've understood that there's something called OTC product. If there's a form factor which is more like, let's say, a headset or hearable type and people really want that, then of course we will offer it as part of the portfolio. I also don't think that they come to the store to get the personal counseling, in-person support. It's not because they are very well aware of different products. I don't think it makes sense. You have to try it out somewhere where there is no counselor. That's the fundamental of the OTC category. If one is to experiment with that, you have to find a place where there's no counselor. Otherwise, I don't think we'll learn much. Maybe a little bit back to Martin, your comment on, or question on how good the leads are. I think all the effort is done to make sure, back to your scheduling, that the ones that arrive are ready. Whether it's happening digitally or by a phone call or other ways, you really try to make sure that people that arrive. You can't really just measure the conversion rate in the store because hopefully we, through the funnel, from this very upper funnel that can be very inconclusive, have managed to mature the leads further to something that's actually ready to move. That's key and part of creating productivity. You kind of lose track to, again, where it all started at some stage. Some needs more nurturing than others as you go through the funnel. Thank you. Carsten from SEB. How do you think your store footprint will evolve over the years, both in terms of, or maybe not actual number of stores, but more the location of the stores? At least one of your competitors seems to be going for more and more for sort of A listings, larger stores, more branded stores. Are you seeing something similar for you? No. Actually not. I think, from everything we know, a location is key in retail, and therefore being close to the potential user is critically important. Therefore, it would be lovely if we could have 100 audiologists in 1 clinic or even 10. I don't think we are servicing our customers the best way. They're looking for closeness. The experience and how we can help them can be equally good, whether we are one or 10 in a clinic. I think, it's more a broad network of high standards all across the country. I think we have proven cases, it's basically from France, that it helps to split the store when it gets too busy, then rather have two frontline people helping one audiologist and do a little more of the screening, a little more of the maintenance of the hearing aids and stuff like that. Then move a kilometer or two away and open another one. It's at a good location. I think if that was in your question, we try to get down from second floor next to the ENT or wherever it was, down at the street, at a place where there is also an element of foot traffic or the local, and that good availability, of course, as other retails move out. We get better and better location. The actual size, there's no evidence that it helps to build a big clinic. In terms of location, of course, most customers come to us by appointment, right? There's very little spontaneous traffic into a store, right? Of course, being on street level and even being on better street level, A locations or other, of course, can help raising the brand recognition. It plays a role in that more than it actually serves the basic needs of the consumer better. They want you to be close to a bus stop or a train station or where they are shopping for pharmaceuticals. Good parking lot. I think we have one more. Maybe the last question here in this session. Great. Thank you. It's Michael Junge at Morgan Stanley. I have 2 questions. If we maybe just assume that there is OTC disruption, can you comment on how you structure your lease liabilities for your stores in the U.S.? Are you thinking as you sign more stores up and expand the network, that the lease liabilities are shorter than they were in the past? Secondly, it seems to me that you won't have an OTC product yourself. Are you willing to stock a GN and a Sonova product to see how those products do in your own stores in the U.S.? On the last part of your question, I fully agree with Søren. In Hearing Care, we want to be the modern Hearing Care expert, and it just rhymes very badly on OTC. The reason we invest so much in our expertise, in our people, is that we want to give a potential user the best customer experience and also the best experience living with hearing aids. For that reason, very important always in our clinics that we demonstrate the hearing aids. We put the best technology on the ears of people so they get to experience what great sounds like. Therefore, I don't really see a big opportunity for OTC in our clinic network in the U.S. With regards to the first part, the lease liabilities in the U.S., they are not that long. Actually, the lease obligations, typically as we see in Europe. It's not that much of an issue. At the same time, we still believe that the market that exists today will definitely also be there for the next many years. Therefore, I see absolutely no risk on those leases. Can you comment how long they are in the U.S., these leases, typically? I wouldn't dare, but they are less than five years. Again, remember the point you had that in order to support the growth in the market, you need to expand networks. Even if you came to a conclusion, Michael, that there would be a, let's say, a growing OTC channel, I think that could just like Costco have come in without a number of our stores being closed, et cetera, could be absorbed even if you came to that. I don't think it's a big liability. Thank you. I think with that, we'll have Jeppe on now, so he gets enough time to go through the EPOS story. Thank you very much. We got one question also from the virtual audience, but that was answered, so no problem. Next up, we have Jeppe Dalberg-Larsen here, President of EPOS, also known as the communications business in Demant. You'll be talking about how we aim to become the preferred premium audio brand. Over to you. Thank you so much. I will do that. I will take you into the EPOS universe here. I'll do that by going through a few points. First of all, talking about the strong foundation we think we have with EPOS. Secondly, talk a little bit about the attractive market fundamentals we see, ending up with just a deep dive into the current situation we have and also a bit about the strategy focus going forward. Let's start with EPOS at a glance. EPOS was actually coming out of a joint venture we had with Sennheiser from Germany. We started that joint venture in 2003. Today, EPOS is basically more than 500 employees worldwide. We focus on two business units, enterprise solutions and gaming. We have our headquarters here in Copenhagen, in Ballerup, just the western part of Copenhagen. We have outsourced manufacturing mainly to the Far East. We have R&D, the main office here in Denmark, but we also have offices in China and Hong Kong. We have outsourced a big portion of our software development to a partner in India. We have a strong partnership and also a 20% ownership in Collaborate, which help us execute on the video portfolio that we are currently working very hard on. We have a global distribution set up through 15 new subsidiaries we just established, and we have in these subsidiaries dedicated sales and marketing people, both catering for the gaming business and our enterprise business. Let me just elaborate on how we came from being a joint venture and how we ended up being EPOS. Basically, we had a joint venture since 2003, and the joint venture set up was really about developing headsets for enterprise solutions, gaming, and for the music business. The distribution and the majority of the sales and marketing actually went through the Sennheiser subsidiary. The joint venture was selling into the Sennheiser subsidiaries that then executed the sales and marketing through their local sales subsidiaries. It was a very successful journey. We were actually growing more than 20% organically through the whole period of 17 years, say 7 to 18 years that we had the joint venture. It was a mode of stable investments and steady development. It also had the nature of being a joint venture, a 50/50 joint venture, actually meaning that the owners should basically agree on everything, especially strategy. In 2018, we decided to demerge, the demerger was, for us, really about establishing a front end to the business we took over, which was enterprise and gaming. That was establishing 15 new subsidiaries that we mainly did through 2019. It was also implementing new IT infrastructure, new IT applications with the great help of being part of Demant. We did that pretty fast, in less than a year. We transferred employees, the sales and marketing people that were living in the Sennheiser subsidiaries into the EPOS subsidiaries. We were taking over the full control of the distribution channel for gaming and enterprise, interacting directly with the channel. We also built, created a new brand, EPOS, which I will talk more about. Basically, coming for a joint venture where we were basically the headquarter mainly focused on R&D, supply chain, and getting the product produced, to now focusing in on two business segments, enterprise and gaming, but having more or less the full value chain except for the manufacturing, which is still outsourced. Today, EPOS, we think we are now in full control. We have the willingness and ability to do more, meaning that we will continue to ensure a competitive roadmap within enterprise solutions and gaming. We will enter a new important segment in the enterprise space, which is video collaboration bars. We are building a dedicated gaming sales team to execute very hard on the gaming business. We are investing in the EPOS brand to create a distinct premium positioning exactly where we want to be. Of course, we do this by also adding additional investment into R&D and sales and marketing in general to be able to drive future growth. That's basically what happened the last year or two creating EPOS. Back to the journey. We are not new to the business, as Søren also alluded to in the beginning today. We have been in the business together with Sennheiser since 2003 in the joint venture, and it was a very successful journey, growing on average of 23% organically through the period, starting from close to nothing but rounded DKK 1 billion in 2019. 2 main periods, I would say, was the first period where we actually established ourselves making the first product portfolio, setting up production in the Far East. The second period of the joint venture was more going global, making sure we had dedicated focusing in all the relevant market in this world, building a dedicated sales and marketing team for the enterprise business, but still within the Sennheiser subsidiaries. Now we are in a new phase, the EPOS phase, where we basically have full ownership, full control. We call the phase integrate, mature, and expand. Integrate mature because we still have some internal jobs to do to mature the business and integrate the business we are in. A lot of new people, 50 new entities, a new brand, a lot of new IT systems, new processes. We are still working to optimize that as we speak, but are really doing progress every day there. Expand because it is, of course, a clear strategy and goal for us to expand our business, both in gaming and in enterprise, with the segments we are in, but also adding new product categories to what we have already. That is the overview of the journey, basically so far. The EPOS brand. We want to become the premium audio brand in enterprise and in gaming. The EPOS brand is really about three brand pillars, three values that we have talked to a lot of customers about that really matters if you want to be a premium audio brand in the two segments we're talking about. It is really about pioneering audio technology. This is where we have been doing excellence together with Sennheiser in the joint venture, this is where we also can do quite a difference in the marketplace going forward, being part of Demant as an audio group, basically. A lot of synergies of what we're doing in terms of communication and sharing technologies. We need to harvest the synergies to make sure that we stay in front and can deliver that premium audio in both gaming and enterprise. We are doing that to a large extent. We have a brand pillar we call Crafted to Last and Designed to Excite. It's really about the physical product, where we put quite some effort into, of course, make it look nice, but also make sure that we do high-quality materials and that it's durable and it's comfortable, and it's nice to wear for a full day if you need to do that. A strong focus on the craftsmanship of the product and the design of the product as well, which we think we differentiate as well. We have Passion for Performance. Performance was actually when we asked our customers creating the brand, it was one of the values that they rated the highest. If you are a professional business person like yourself, you really want to participate in meetings where you have crystal clear audio, you can hear what's being said, and you come across very clearly, and you also want it to be plug-and-play when you start virtual meetings. That criteria is really important for the enterprise space, but also for gamers that really want to have this immersive experience being in the game when they are there with their teammates, making sure that they get the maximum out of what they're doing when they play their game. I have an example here of a sponsorship, a partnership we do with another known brand that also rate high engineering excellence, performance, and craftsmanship. Here's a little video about that. Few events rely on communication as much as Formula 1. When each fraction of a second counts, messages must be delivered with clarity and precision. High-end communication tools are critical to success in the demanding world of Formula 1. That is why EPOS have joined forces with the Aston Martin Cognizant Formula One Team as global audio partner. Experience the power of audio. Just one of the many activities we do to build our premium brand, EPOS. Back to the businesses we are in. We are in two businesses today, enterprise solutions and gaming. There's huge synergies between the two segments on the back end and in R&D, because basically, the capabilities and technologies you need to do a gaming headset and a enterprise headset is very similar. Also, the way you bring them to market through production supply chain, there's quite similarities and synergies there. Of course, going to market, it's quite different. It's B2B and B2C, so different channels, different customer groups. Today, around 1/3 of our business is gaming, and 2/3 of our business is enterprise. If we take a look at the enterprise premium portfolio we have, we have actually split it up into four families. We have the first family, we call it Impact, When Talk Matters. This is really the traditional hardcore headset you use when you need to be on the phone many hours a day on a UC call, being it in a call center, being in salespeople, sales reps, receptionists. This is the category we've been in for many years, very successfully, with an extensive product portfolio. We have our Adapt line, which is basically the more versatile product range, where we basically can work from anywhere. You can take your product with you. It's typical foldable, it's wireless, it's with noise canceling, and it's sometimes also with bigger ear cups that can really make you concentrate in any environment you might need to work in. We have our meeting room product line or product family, we call it Expand. It is our high-end speakerphones, but it's also going forward, and we just launched, so hopefully you had the demonstration of that, the Vision T in the meeting room next door here. It's the video products that is also within category, a category we expect to grow very much in the future. Finally, we have a smaller category, we call it COMMAND. It is really for air traffic control and other safety applications where you typically operate towards a proprietary backbone, where you need special connectivity and premium audio, and that is one of the things we also deliver in that space. It's not only about product when you're talking about enterprise solutions. It is really also about bringing a full solution also in terms of management software. You can basically make sure when you buy into a premium audio product portfolio, you can always make sure that it's always upgraded with the latest audio features, safety features, and you can manage your portfolio because it's on the network. Really important for IT managers in this world, especially these days, that they can manage their hardware platforms with these kind of softwares. That is an important part of buying into EPOS as a solution for enterprise. What is also very key and very important is, of course, understanding that you are part of an ecosystem, that you work towards the UC space. There's other partners, other companies in there that are very important for you to work with. We do a great effort to work with strategic alliances in this space. We have teamed up with all the logos you see there, sharing roadmaps, making sure that we always work with their solution at any time. Whenever there come a new version of Teams, you will make sure if you have an EPOS portfolio, it will always work with the newest version as well. A lot of work going into that on the R&D side, but we also focus on doing collaborations on the sales and marketing side as well with many of these logos here. Gaming. In gaming, we see ourself as the premium audio brand in gaming. We focus on audio, but we also have a very distinct premium positioning there. Again, focus on the brand pillars, the craftsmanship, the look and feel, and the design, and the quality of the physical product, but also the premium audio we bring with it with our latest technologies. Here, it's not only about the premium products, it's also about providing software. We have our gaming suite where you can actually fine-tune in your audio settings to whatever game you're playing to your personal preferences, and also be upgraded when you use our products. That was about the products and the solutions. A bit about how we bring them to market. Both in enterprise and in gaming, we operate in a 2-tier model. In the enterprise space, we have the telecom channel, and we have the AV channel, which is especially relevant for the video category. In consumer, we also have a 2-tier channel. Very simplified, the main role of the tier 1s is to carry inventory and to make sure we get reach to a larger reseller base. The resellers, we call them tier 2s, are where the value creation is really created. That is where they need to understand our value proposition, our product, and make sure they map that to the needs of the customers, being the enterprises in the B2B space and the gamers in the consumer space. We work very closely with the channel together, both with the tier 1s and tier 2s. In enterprise, we also have what we call touch teams in the major markets. We actually go out and we engage directly with the bigger accounts, the bigger companies of this world to make sure that we help do the demand creation there. We never take the orders directly. We always fuel it back to the channel, to the reseller, most likely, in many cases, of a specific choice of the enterprise. That is basically the sales operating model simplified here. Now, a bit about the market. We think there is a strong market out there, strong addressable market for us. We believe that the market for enterprise audio, gaming audio, and video collaboration combined for us is an addressable market of $6 billion. We see healthy growth rates. We believe that the market will grow at a CAGR of 12% average the next five years and propel into $19 billion. We believe that the audio segments for enterprise and gaming will probably grow slightly less than 12%, maybe 8%-10%. We then believe that the video business connected to UC will grow more than 12%. An average 12% is what we see. A nice place to be when you want to grow a business. What is the underlying trends that fuel this growth for the market? In the enterprise space, it is really the adoption of UC and collaboration. That had a lot of tailwind during COVID. We all learned how to use this application if we didn't know it already. That is really what is driving also the business when you talk about endpoints. A newer trend is hybrid working. That is actually us coming back to the office after COVID. It's very clear that we are going into a hybrid model, as we call it. You are both allowed to work from home and in the office. There's a strong focus on specifying that at the moment for many companies, especially global companies. This is a really hot topic and a positive trend pushing the market for UC and, of course, all the communication endpoint. We see a very strong focus on meeting rooms. The UC applications have really boosted the video meetings. We're all participating in video meetings. We do it right now. That is really on the rise. Every company of this world is spec-ing their smaller and bigger meeting rooms to be virtual with video bars and speakerphones to be able to facilitate video meetings from the office. Finally, we have what we call multi-device and platforms. Basically just meaning that you can run many of these UC applications on basically any mobile phone, any tablets, any laptop, even on the VisionT product you saw out here. You don't need to bring in compute into the room. You can actually run the UC application on the device, which we actually think is a very strong feature. If you talk about the trends in gaming, first of all, it's very simple. Better global access to high-speed internet, which allow the gaming manufacturer to actually up their game in terms of the advancedness of the game, not only on the video side, but also on the audio side. That really drives the interest for gaming as well. We see more socialization and collaboration going on in the games. More and more games are basically you playing as a team, an international team together. You make strategy together, you make tactics, and you play and you communicate together. That's a clear upwards trends within gaming. Also outside gaming, people come together in communities and engage. It's a lifestyle now. People are proud of being gamers. The average age of a gamer is on the rise. It's right now around 35 years old. Some is pretty surprised to hear that. That is the average age of a gamer. It is for everybody nowadays. It is a lifestyle. Esports is on the rise. Before COVID, we were filling stadiums with 10,000s of people looking at the heroes playing on stage. It's also going on in virtual space. On the channel Twitch, for example, you have these virtual tournaments going on where you have millions of viewers. That is really, of course, also driving the interest in the whole gaming scene. If we look at the market right now, it's very dynamic. That's, of course, also had to do with COVID. In 2020, we saw a very strong momentum driving from the work-from-home trend, especially here in EMEA. We were all very abruptly sent home with a wired headset. That basically happened more or less in the same time in the first months of 2020. We also saw a very strong demand for gaming headset because gaming was one of the few industries that was still very much alive during COVID, and people actually used most of their time when they were not working actually gaming. I have some in my family that actually did that, at least. In 2021, we have seen a slowdown, especially in EMEA, because of the back to office trend. We were all sent home with a wired USB headset. Now there is another trend where the companies need to find out how do we work in the future in a hybrid mode, and what equipment do we need to use? Especially in Europe, we have seen a slowdown because there is a talk going on, but we have seen a slowdown because of a delay in decision-making in many countries for many companies. We have seen that the product mix have changed. It's not wired USB headset anymore. Now it's also wireless products and also a lot of focus on meeting room products. Especially we see that the important video trend is there right now. Basically, we believe that if we, before COVID, had a prediction that the market was growing on average 10%, we believe that what happened during COVID was that the market was actually fast-forwarded three years and is now on a different level, and we believe that going forward it will grow the 12% I talked about before, especially also pushed forward with a strong video market. Now, if we then look at EPOS, we can also start with where we are in the current situation talking into these trends. What we saw in 2020 was a significant boost in our business the first year as EPOS. That was, of course, fueled by the home-from-office trend I just talked about. It was wired headsets that was the main demand, but all categories actually grew. Wired headsets went through the roof. It was a supply-driven market, so it was really very much our original team that was in play here, making sure that we ramped up production as fast as possible to close as many of the orders that we were getting in by large numbers. We saw the strongest growth in Europe, also us being a European-centric company, and that is really where we had the biggest sales. We had some challenges here in 2021. We had a very strong Q1, also fulfilling orders on the back-to-work trend. In Q2 and Q3, we have seen a slowdown, mainly to what I talked about, the postponement on the back-to-office trend, especially in Europe, where there has been some delay in decision-making for many companies, and not all countries in Europe are opening up at the same pace. We must also admit that we at EPOS are still in transition mode. We have a lot of new processes, people, and entities we need to integrate and mature, and we have a new brand we need to get alive. We launched the brand actually in February 2020, and most of the European countries actually closed down the week after we launched the brand. We didn't really have the chance to go out there to all the events we had planned, and we didn't really have any customer engagement, getting out there physically to explain and have our great customers have a look and feel of our products. That was a little unlucky. We tried the best we could to go to all the virtual events, but it has not been the same, is the main conclusion. We have a few areas where we have lower exposure. One is in the video market, which is growing fast. Yes, we entered with our first product here in May, but we are working on getting a better or a bigger portfolio out there in the coming years. Right now, we are not getting that tailwind from the growth in video. In our geographical split, we still see U.S. right now growing quite fine. We have relatively low exposure in the U.S., so we are not really capturing that growth there to the full extent as well. All in all, that includes into what I think Søren already talked about this morning, that we expect revenue in the second half of 2021 to decline by more than 10% compared to first half. We expect EBIT in the second half of 2021 to be negative by DKK 50 million-DKK 100 million. We expect to be back and above market revenue growth in 2022. We expect to deliver positive EBIT in 2023, despite investing in the business, both in R&D and sales and marketing. That was from a numbers point of view. If you look at it from a market point of view, in the enterprise headset space, we are in a consolidated market. We are number three in the market with 7% market share, relatively higher exposure in EMEA and lower in Americas and APAC. In gaming, we have a more fragmented market with more logos. Here, we have low single-digit overall market share, but focusing very much on the premium part of the market. In video conferencing, which we will call a transforming market, we are just entering there with our first product, and we have more to come in that business segment. Looking at our aspiration, we want to be or become the preferred audio brand in enterprise solutions and in gaming. How to do that, how to win in the enterprise space, it is really about delivering that premium portfolio, the craftsmanship and the audio in a portfolio. We are doing that, harvesting all the synergies we can with the rest of the Demant Group to provide that premiumness to the products. This is really important. It's not only that, it's also providing the software I spoke about, so you buy into a solution that is always upgraded with any UC platform you use. That brings me to the next point, is the strategic alliance partners. It's really key that you work closely with partners in this industry to make sure that your hardware always works seamlessly with any software out there, and that we do through strong strategic collaborations with all the partners in the industry. We need to have a global footprint. Our customers are global. They expect us to follow through. We do that with a dedicated sales and distribution strategy. We have dedicated sales teams around the globe to follow through on that, both pre-sales and after sales. That is basically how we see we are winning the enterprise space. A point on the rationale for entering the video space. Basically, we see, of course, the market in itself is attractive. It's growing fast. We consider the video space to be a natural portfolio extension for what we're already doing today. It brings more relevance to what we do for end users, but also for the channel and the strategic alliance partners we work with. We are focusing very much in the beginning on the all-in-one solution, where you have onboard compute, like the one you hopefully had demonstrated here during the break, which is a new category, a new segment for all, basically. We believe that we at EPOS are well-positioned to deliver growth here. First of all, we have a strong strategic collaboration and a 20% ownership of Collaborate, that have those capabilities. They know a lot about the hardware and software for video and also AI. They are our extended R&D arm in terms of providing our R&D-ing or our R&D portfolio. We have no cannibalization of an existing business here, basically it is an on business to what we do. We strongly believe that our competence within audio come into play here in the video space because it is combining video and audio in the meetings that is really the essence of the game here, in our belief. We have a global distribution set up, a global team, and we have already a strong relationship with all the relevant strategic alliance partners in this game. Two of the most important ones being Microsoft and Zoom. Here's a little video of our demonstration of our first product in the video space, which we launch in May. Please. Experience an intelligent all-in-one video solution for today's smart office. Enjoy a rich meeting experience with natural lifelike conversations. Elegant and sleek with intelligent picture framing and exceptional voice tracking. You can join meetings with just one touch and perform like you're there in person. To ease your mind, it's a breeze to install and comes with automatic software updates. EPOS EXPAND Vision 3. Video collaboration reinvented. Good. Gaming. How to win in gaming. Basically, it is also about delivering a premium or a product portfolio, both focusing on the craftsmanship of the product itself, but also the audio. It's also being authentic as a gaming brand. EPOS is a gaming brand focusing on audio, and we need to be in the gaming space, sponsoring teams and events, communicating with gamers about gaming on the right social media platforms, engaging with the communities. We also need to be global. Gaming is a global game. It's virtual. There is no borders, and we need to act accordingly in our communication, in our go-to-market strategy. We do that by having a very selected distribution strategy, working with the main logos in the consumer distribution channel. You see them here, which also carries most of the revenue when you talk about gaming headsets. We do that, of course, supporting that with a dedicated sales team that we have just built. We are close to the channel and the customers in each market. Coming to an end here. I think it's clear that we are on a journey. We are not new to the business. We have been in a joint venture mode since 2003, where we saw stable growth. We took a market share year on year during the period. It was relatively low investments, but positive profitability through the period. Right now we are what I would call in a transition mode. We see very volatile growth, but we believe we will have stable market share through the period. We have accelerated the investment level, both in R&D, but in branding and sales. Right now we are facing a negative profitability. We believe that from 2023, we will be in a new mode where we will see more stable growth. We will take market share, have a more balanced investment level, and be positive and growing the bottom line. To sum it up, we think we have a proven track record and a strong foundation for growth. We see a very attractive market outlook, including a strong growth in video. We believe we have a clear strategy and focus and can grow faster than the market, and thereby gradually improve profitability while still investing in growth. I guess that was the end. I think we are clear. Ready for some questions. We are indeed. Thanks, Jeppe. Your microphone is over there, so thanks very much. Let's start here, Henrik. Thank you, Mathias. Henrik Olsen from the Canada Pension Plan. My first question is going to be, what's not here? You clearly had a joint venture with Sennheiser. You broke it up, took one part, and then not that long later, they sold it. Why did you not want to buy it or keep it? Put it that way. You could, of course, say, well, we were just together on all of it, but it is our assessment that a pure consumer division is fundamentally not of our interest. It doesn't align to what we're good at in Demant. Again, part of the de-merger came from at least some level of discussions on where we best invested in the business. Our main appetite lies in enterprise and gaming, and we think there's ample of growth opportunities there. Of course, there is some loss, you can say, in some synergies on the R&D side, but the consumer is much more a sales and marketing game than it is an R&D game. We feel very comfortable. We made a good choice in focusing on what we already have. Why gaming? That's quite different from. Yeah, the question for those of you that didn't hear it out is why gaming? There is an element, of course, in the de-merger to how do we split it. Gaming is also a more narrow audience. There is a lot of leverage from the headsets we develop already. We think we can come to it at a lower cost, and it has shown all the way through the joint venture. It builds scale on the business and that's also, of course, packaging it and sales and marketing. We think we get very good return on putting that together. Niels from Carnegie. Since you are reluctant to enter the consumer parts of this industry, does it mean that you wouldn't enter the earbud segment? Speaking about categories, when should we expect you to enter the webcam segment? It is the small, the hearable, the form factor, that's a product category, and we will introduce it when it's relevant for the business segments we are in. Right now, it's very much a consumer play. We do believe there is a future for professional earbud, so to say, and we also actually launched an earbud in the gaming business already, and we believe there will be more of this form factor coming. Right now it is very much a consumer-driven thing as we speak. The other question about the webcam. We have chosen to focus on the more intelligent solution, where we have onboard compute. We think we see that as an area where we can also make a collaboration bars, where you can combine our expertise within audio with video, and thereby enrich the product even further with the capabilities that we have. That's not said that we might not introduce a webcam at some point of view. We are trying to build a portfolio here as well. Martin Parkhøi at Danske Bank. A couple of questions. Firstly, with respect to supply situation, as I understand it, the main supply shortage is actually for old technology, which means that some of your larger competitors have decided to redesign old product to include new technology. Is it something that you are also doing right now and use manpower for that? Secondly, on the supply situation, how comfortable are you with the market growth in 2022? You say that you expect to grow above the market again in 2022, the market, what is that with this current supply situation? Finally on the more than 10% sequential decline in the second half versus the first half, can you maybe comment on the development on a regional level on this decline? Yeah. I think the first question was about the supply situation for components and if we did re-engineering. Yes, we do that as well. There's no doubt we could have sold a bit more if we were not in this situation. That is not the main reason for why we have a second half decline in revenue. We are spending significant effort in making sure that we can supply the components to the production lines, either through spot buy or talking with the tier 2 suppliers or doing re-engineering, basically, of the products, making sure that we use components that are available. Yes to that. The second question was more around the market revenue? Market development. Market development. There is a shortage, I think that's general for all the business, that all the market estimation is, of course, based on assuming that we, in reasonable terms, will be able to get supplies. If the world turns out differently, the market ultimately could not grow to the extent the consumer wants to. We're not trying to guess on that. We believe we are still a small player, that that will not be the limiting factor for us. No. Yeah. Hi. I'm Morten, ABG. Just on the start of the Q3, how that has progressed so far. You say 10% down at least in second half. Could you say how much it's down so far? Second question, Jeppe, you sound a little cautious on how the video equipment has launched so far. Can you add a little bit more flavor on what you've seen so far? If Jeppe can take the video part in a second, because I think there you're definitely more equipped than I am. First of all, we have to remember, we come into first half with quite a significant backlog. The 2 halves are not that far off one another. You know the business, it's not that it's diving in. We do actually see a positive development in new orders coming in, and so on. The year is simply not long enough to get the tailwind or the momentum build-up we expected at the end of the year. Back to, you never got the answer on your question, Martin, the second half versus first half, which is also what you address, Morten. If you took out the round numbers, DKK 100 million, we basically carry in from 2020 into 2021 with a now much more normalized order portfolio. You see a flattish development. We start now to sense that we see some uptake. Again, we have a number of big orders that could come in next year instead of this year, because some of the decision processes are simply longer. You can elaborate more on that, Jeppe, and then I suggest you take the video part. On the video part, we are very pleased with the reception of our EXPAND Vision 3T in the market. It has great feedback. That said, it's also just one product working with Teams. We are working on a portfolio strategy here. In the next year or so, we will have more SKUs coming in. It is also here, a bit of a portfolio game. You need to have a limited portfolio, is what we believe. It gave us some great learnings in how we need to address the channel, and we are, of course, selling the product and getting some great feedback. The quality of the product is top-notch. It is really within our brand pillars. Maybe also, at least what you have shared with me, that in exactly selling a product like that is not like one piece at a time. It is exactly some of these larger orders where bigger enterprises are discussing what to do with 500 meeting rooms or 100 meeting rooms or even larger. It is some of these where also the products we cannot yet show publicly abroad, everybody are bringing their upcoming portfolio to discuss, Is this the future supplier for me? This is B2B for my future video conferencing strategy. There are many options out there, and some of them are more prototype than reality, and that's probably why we see some of these processes take longer. It's very important in showing that we are in this game, and we can be a viable full one-stop shop opportunity going forward for an enterprise. That has definitely been successful. Had we not had a product like this, we would have been a headset supplier and could only join those kind of deals. I think it's been very important in showing our full capabilities going forward. Hi. Christian from Nordea Again. My question is really to how we should think about your requirements for investments in R&D looking over the medium and the long term. Søren, you talk about the product categories here being R&D-driven and wanting to be a one-stop shop. When we compare to your main competitors, they spend between five and eight times as much as you do on R&D. How do you go after specific niches to maximize the impact of what you spend on R&D? How do you approach this problem of having such a big gap up to your competitors in terms of their resources? You're absolutely right that we have an absolute numbers, a smaller R&D muscle maybe on some of our competitors. That's also why it's really important that we try to focus on what we are good at and not being as broad as some of our competitors in all the product categories, which we are not actually. Then it's also about working very cleverly with strategic partners like we do in video, bringing in a partner in that can extend that R&D muscle with us, but still having the core capabilities in R&D centered around where we really can make a difference. We create that value, that EPOS foot stamp on the product. It is really about working clever, not being too ambitious in terms of the broadness of the portfolio, but have portfolio enough. Then went strategically with partners, making sure that you don't execute everything in-house, but you also work with partners to leverage their execution power in terms of executing roadmaps. Hi, it's Michael Junge from Morgan Stanley. I have two questions. Firstly, on the enterprise headsets. Your strategy of being a premium supplier is interesting. I'm just curious whether you've done some consumer surveys which would demonstrate that indeed the consumer is seeing that difference. Do you have that? If so, why did you not show it to convince us of that? Secondly, also on enterprise headsets, what are your assumptions with respect to the acceleration in market growth as to how many days the average employee will work at home pre-COVID versus post-COVID? What is that number that you're sort of factoring in when you do these better market growth rates? If we think about the market growth rates, I haven't shared the calculations here. I think we look at it at a more broad picture. We, of course, read also in-depth reports. We talk a lot to the channel, to our strategic alliance partners. Altogether, we form this picture of what we showed here. That is as close I come to answer that question there. The other one was more about being premium. Do we have proof that we are perceived premium? Yes, we have. That is also when we created the EPOS brand. It is really also what people want us to be, and we have been able to deliver on that for many years, also in the joint venture in the Sennheiser brand. We want to continue that journey on deliver on that premium-ness. The brand pillars I talked about is really where we believe we can differentiate being premium. It is on the craftsmanship, the design of the product, and it is on the audio side, which we have a proven record of. We know that from feedback from numerous customers in that sense. We have internal studies showing that we come out premium compared to competitors in different product categories and different segments. Yes. Carsten from SEB. If we remove the fact that you're coming from a low base in terms of market share, what else should then drive you gaining share from 2023 and beyond? That is again Okay. Yeah? I'm just ready for a follow-up. Yeah. Good. It is of course a similar answer to, I just had another question here. It is really to focus on delivering on those premium brand pillars, to take that position and deliver on that, and not be as broad in the portfolio, but still have a portfolio enough. There is, of course, focus, making sure that, when I talked about how to win, it is of course about the product, but it is also about being very sharp on the software solutions and the underplumbing, as we call it, really making sure you always work with all platforms of this work. We have built that over 15 years, that is basically an asset we have that we need to build on. That is also one of the things that I'm sure can bring us growth going forward. You buy into a solution, not only a product, a premium product, but a solution that is future safe in terms of it's upgradable and it always work with any platforms out there. Okay. In terms of delta contribution to your franchise, which of the 3 franchises do you see contributing most over the next five years to overall revenue creation? When you say franchises, what do you mean? Enterprise or video. I believe we can grow in all segments, and I don't think we guide on which of the three we will grow the most. We see we can take market share in all of them, especially in video. We're starting from zero. We have an ambition to take market share in all segments. I think it is worth noticing how we today have significant position in Central Europe, U.K., France, Benelux, Switzerland, Germany, where the business originated. It is based on the competitiveness we see there that we believe we can generate growth in other geographies. It is the biggest opportunity, is to build the same position in other countries. If it's good enough in Germany, and we have proven it there with the R&D we have and the expansions we have made, it is much more of a sales and marketing effort in the other markets. That I am sure we can also do. Tom, please. Tom Jones from Berenberg here. If I look at your traditional hearing aid business, you're very close to your customers or users, however you want to define them, and you have Demant people talking to the end users every day. If I read your, or if I interpret your slides right on EPOS, you're quite a bit further from the actual customer in quite a lot of ways in that business. I guess what are the big challenges you face in being one, two, sometimes even three steps away from the actual customer? Sort of a connected question to that, particularly when I look at the enterprise business, how dependent are you on things kind of beyond your control? If I'm an enterprise thinking about refitting a lot of my meeting rooms, the enterprise has got to go through lawyers, it's got to get builders in, it's got to get electricians in to do all this sort of stuff, none of which you have any control over. How dependent are you on other people with this business, and how do you manage that sort of third-party risk? It's something quite new to Demant, I think. I can answer that. Actually, we are directly engaging with the customers, both on the gaming side and also on the enterprise side. We have these touch teams that actually go out and work directly with bigger accounts to make sure that, of course, we understand their needs, but also that we make sure that we offer the right solutions for them. We have direct customer engagement for sure. That said, of course, we also work very close to the channel. We are very dependent on the channel, therefore we also have people working with the channel every day to make sure that they are fully aware of what solution we provide and what benefits and what values they bring to the customer choosing our solutions. I think especially if we talk about video, the AV channel, that is really where you are really most dependent on them because they really install stuff, things in companies. If you talk about headsets, it is more box moving basically. Of course they need to understand the product, but the after service and pre-service engagements is faster and is lower, takes shorter time. For video, it's a longer sales process which requires more engagement from the sales channels. It's really key for us to be very close to the reseller to basically understand what they need to be back up to them, to be together with them when they face bigger customers. We are in it together with them side by side. Okay. Did you have one more, Tom? Yeah. It was just a follow-up, really. You talk about the enterprise and the gaming business. Yeah. enterprise is, we tend to think of it as an office. Yeah based business, and gaming, we tend to think about home. Yeah. If we are truly moving to a hybrid model, are there any opportunities to push the enterprise products into the home setting? Because as an employer, if I want somebody to work from home, I have to provide the equipment for them to do the job. Do those two businesses come together at some point? I think in the channel, we see that the consumer sales channel is getting more and more relevant for the enterprise business. You have more and more people that are allowed to go to Amazon and buy the equipment themselves. Of course, we see more and more business going through that channel as well. We also see the consumer channel focusing in on being relevant for businesses. You have Elgiganten in Denmark, they have something called Elgiganten AV. You will see that in Germany, MediaMarkt also have a business arm now. That channel is aware of this and is developing accordingly, and we are aware of that. I think we'll just take one more question from the web chat here. It's Issie Kirby at Redburn asking, do you see any risk that your enterprise audio and video opportunity from Zoom's moving into hardware, both through partnering with some of your competitors and more recent investments into hardware players like Neat? As a follow-up question on the gaming side, do you believe you can win in the gaming market with headsets alone, or will you need to partner with a third party to develop additional products like keyboards and mice, et cetera? I can take the gaming part first. I think we are very keen on focusing on the audio part. That is our DNA. That's where we can differentiate and be premium. We are a gaming brand, but we are focusing on the audio part. That's the short answer to that. About in the video space that some of the UC providers like Zoom are actually also making hardware. Yes, we see that. We are also with other brands making headsets, but it is again, then about the focus, and we really believe that with the focus on the inbound and doing the hardware, the software, and solutions, we can still play in this growing market. As I understand what they're doing with Zoom, they are also very focusing on the Zoom application, and there, as you know, are more applications, and there are companies that are very interested in having communication devices that work with basically any device, which is basically our value proposition as well, that we will work with any UC application out there. Thank you. I think we'll have to leave it at that for now. There was another question, I think we pretty much covered that already. Thank you, both of you. Next up is really the break. We are 5 minutes over time, so instead of a 30-minute break, it's a 25-minute break. At 4:15 P.M. CET, we'll be back. [Break] Okay. Yeah, I think we'll just be bringing the last people into the room. About to start. I guess this is one of the challenges with the in-person events and getting on schedule after the breaks. Let's see if we can get back into that mode. While the last get settled, now we are at the point where René will take us through a finance presentation. be covering, again, the sustained growth agenda that Søren also spoke about in the beginning, but also add some flavor around the potential for margin expansion, et cetera. René, the floor is yours. Thank you, Mathias, good to see everyone here. This is the final stretch on the, let's say, more formal part of the program. What I will do in my presentation basically is to tie it all together in financial numbers and to give you some different perspectives, both on, let's say, historical performance and also how that could translate into our ambitions for the future. Sustained growth with potential for margin expansion. I will not touch in details on this piece, fundamentally, we believe that we have a very attractive value proposition to shareholders. We are exposed to markets that enjoys structural tailwind that are fundamentally very attractive. We do believe that we are in a position in that market to gain market share through a combination of strong innovation across the businesses that we are in, but also building on our distribution platform globally. Adding to that we have now, let's say, more formed an integrated view on our acquisition ambitions as part of our growth outlook, that we will continue to do predominantly in Hearing Care, as you heard from Niels, but also on the diagnostic side as we have done historically. I will also address the topic of margins. We are a group that's comprised of different business areas with different margins. We do believe that in all of those, we do have the potential to increase margin, some incremental and some more transformative. We are also a capital efficient business. We generate a lot of cash that we can either redeploy into building the business or return to shareholders currently in the form of buying back shares. Just addressing where we are. Søren already touched upon it in his presentation, the current trading. We are in an extremely strong position after what has been some challenging years. You all know the story of 2019 and the IT incident and of course the impact from Corona last year and also still as we speak. That has, of course, clouded the performance of the business. If you draw a line from 2018 into 2021, taking the midpoint of our current guidance, it is still a local currency growth of 11%. Even, I would say despite, you can say the clarification this morning on the headwind on the communication side, we are doing equally or even better on the Hearing Care side, which is still 90% of what we do. I would say if anything, we are in an even better shape today than we were yesterday. Just to make that point extremely clear. When you look at group EBIT, we also have seen in very short-term revitalized, you can say group EBIT and also an 8% year-over-year growth in this short period. If you take a little bit longer perspective on group performance, you would actually see a similar picture. Here taking a decade going back and for those of you who participated in our CMD last time, we also had a previous 10-year view that was very similar. It is one of top line growth in local currency of 10% consistently year-over-year for a decade. In this period, a combination of 6% organic growth and 4% from acquisitions. To reconcile to reported growth, -1% headwind from currency in this period. If you also look at operating profit, you are similarly seeing an 8% CAGR over a decade, again, referring to the midpoint of our current guidance. A really strong track record of solid growth, both in sales and also in operating margin. Of course, for reviewing a little bit more in detail, you will look at the bottom right. You will also see the margin development in this period being affected by a number of significant diversification or changes in the business mix that we will come back to. The important thing is, of course now what are then our expectations for the coming mid to long-term outlook? We have updated that this morning, and I would say fundamentally, there's not anything new to this. That being said, we are now more explicit about our revenue growth ambitions. It translates into an ambition of growing 7%-10% in local currencies, and that comprise of organic growth of 6%-8%, and acquisitive growth of 1%-2% from bolt-on acquisitions, like we have done historically. That's one element of the mid to long-term outlook. EBIT margin, we don't have an overarching EBIT margin ambition for the group, because we run inherently five different businesses with very different margin profiles. It is our aim to increase the EBIT margin in each of these businesses. We also believe that there is an actual potential to do so. Therefore, whatever the group EBIT margin will be over time is, of course, a composite of these developments in the 5 business areas. As I will share with you, there are, of course, more arrows pointing upwards than flattish or downwards. On CapEx, well, we do expect to continue to be efficient on the capital deployed in terms of CapEx, and continue to spend around 4% of annual revenue on that. Gearing, unchanged 2-2.5 times EBITDA in net interest bearing debt. We believe that's a good place to be for a cash-generating business like ours. On capital allocation, it is still our belief that we should not accumulate cash over time. Even after acquisitions, there is still excess cash that we will redistribute back via share buybacks. Let's dive into each of these topics one by one. On revenue growth, this is a little bit of an iteration from Søren and Jeppe on the communications side. Just to clarify, it is our ambition to gain market share in hearing healthcare. We have done so historically, and we believe that we can do so going forward. Let's say the composite hearing healthcare market growth, we estimate around 4%. It is our ambition to organically grow at least 5% per year. It is also here extremely important that our growth ambitions should be seen in the light of whatever the market is. That also entails if we are short-term into a period where you would see the market growing excessively and beyond what you would normally see because of release of pent-up demand, well, then the implications of our ambitions should, of course, be that we will gain market share in that market and grow above and beyond that. That is clearly in our ambition. If you look mid to long term, we believe that in hearing healthcare growing at least 5% organically year-over-year is realistic, achievable, and ambitious. On the communication side, Jeppe also elaborated on it previously. Here it is also our ambition to grow at least to 12% of the market and also above that. You saw the historical CAGR from 2003 of the joint venture with ups and downs in periods. Overall, in the long history, it has been growing 23% year over year and also with similar growth rates in recent year. Of course, it should be our ambition to grow at least the 12% here. We will continue to pursue value-adding acquisitions. I think if anything that is slightly different in tonality here is the fact that we now express acquisition ambitions as part of our, let's say, group growth in numbers. As Niels explained, it is not until recently that we have been extremely transparent around Hearing Care, size of business, presence, and really running that business as a fully fledged, standalone, professional global retailer. It is an integrated part of that growth journey to also do acquisitions. It's part of growing scale in some of the, in particular countries on the lower left-hand side, where we are still lacking critical size. Again, therefore, it is also an integrated part of Demant's growth opportunity going forward. Now we are very explicit about it. You can see that in the previous 10 years, acquisitions added up to 4% of growth. That includes, you can say more transformational acquisitions like a Neurelec or an Audika. If you would back those out, in the past four years, we have had 2% growth from acquisitions from bolt-on an ongoing basis, and that is as a starting point, what we bake into our 7 to 10-year growth trajectory. That doesn't mean that, let's say larger, more transformational acquisitions cannot happen. It is just not part of the formal outlook. You can see some of the acquisitions mentioned here. We do have a track record of actually, you can say, building larger businesses on the back of smaller acquisitions and many of them, and we have done so successfully over time, whether it is multi-brand on the hearing aid side. Bernafon is highlighted here. Acquiring Interacoustics, as a diagnostics brand, GSI are the same. Neurelec was the acquisition in 2013 into cochlear implants, and Audika in 2015, which was, you can say, the stepping stone to actually changing our strategy on the Hearing Care side to being more of a standalone global retailer. We recently increased transparency on how the composition of our top line is, in terms of hearing aids, Hearing Care, et cetera. Now we have applied that transparency also 10 years back. The numbers that we have not, you can say, disclosed before, how was the Demant business actually looking back in 2012? How much was hearing aids? How much was hearing care? You have here in this slide. Of course, what you can see is that the group's business mix has changed significantly over the years. Go back a decade, we were 58% a hearing aid company. A wholesale of hearing aid, R&D, manufacturing, B2B type of company, but still with actually back then, a significant hearing care business, but out of a more, you can say, defensive strategy of defending market share. Niels already disclosed the Hidden Hearing, the HearingLife acquisitions back then. You can see a small light blue bone-anchored business, medical almost non-existing back then, and then a sizable diagnostics business there. Fast-forward to 2016. There you see two shifts in how the group business mix is. You see a significant expansion on the Hearing Care side. That's of course on the back of the Audika acquisition in fourth quarter of 2015. With a full year effect into 2016, that changes the picture, not dramatically, but significantly. You also see the medical side of the business increasing in importance. Fast-forward to 2020, so last year. Here you can say it's affected by COVID, but that really doesn't change sort of the overall picture dramatically. The sort of relative percentages would be more or less the same if you would do it on first half year 2021 or expectations for full year. Doesn't really change the conclusion that you could say hearing aids is now just shy of 40% of the business. Hearing Care now the largest business area that we have. Diagnostics still large part of our business, and you see the orange of EPOS. The most recent significant change in business mix, consolidating EPOS fully into our business and not just as a joint venture. Consequently from this, since these different businesses are operating with different margins, it also has had an impact on the group margin. We have tried to say, what if we applied our current business area margins to the business mix of 2012? What is actually isolating business mix from margin expansion. This is the picture that you would get. On the left hand, you see our 2012 EBIT margin, 19.3%. That was what we reported as a group. In the last decade across hearing aids, Hearing Care, diagnostics and the bone anchor, the businesses that we had back then, we have increased margin by one and a half percentage points. All things being equal, a 20.8% EBIT margin for comparison. You would see the effect of the business mix pulling down the EBIT margin by 3 percentage points to 17.8%, which is what we have reported as you can say, midpoint of our current guidance right now. This minus 3%, you can say broadly speaking in round numbers, it is minus 1% from the entry into cochlear implants, and it is just shy of 2 percentage points from the consolidation effect and current performance of the EPOS business. Of course, as we have, you can say, discussed previously and can do again, of course, the 2 percentage point on EPOS is in particular where you have the potential to see a transformational change in the short to midterm. Whereas of course on the medical side, it's been a longer journey. These are some of the effects that is beneath this development of the business. If you try to look at each sort of business area one by one and look at, okay, what is the potential and where are we today as a group? We have given here, you can say, indicative, illustrative cost and margin compositions of the different business areas. It is rounded numbers, so it is of course to that sense indicative, but still it gives a little bit of visibility to where we can do better and where we can do, let's say, much better. On the hearing aid side, you will see it is a business area that if you are best in class, it is roughly speaking a 30% operating margin business. That is what best in class look like. I would say, how are we comparing against that? We are not best in class, but we are definitely a top tier and I would even claim a clear number two in that. Still some gap to close, but probably a clear number two based on the visibility that we have. On Hearing Care, Niels for good reasons could not show, let's say, economical performance of Hearing Care over time. If there is a business area where we have significantly closed the gap towards best in class, it is really on the Hearing Care side. It is a significant change in operating margin that we have seen in the last couple of years from that business. Driven out of, let's say, running it as a global business, running it with a level of professionalism on global systems and digital marketing has really, and also in particular brand strength in local markets. We have seen our market share also being top tier, if not actually fully in line with best in class. On implants, you all know we are a loss-making in implants. I would say prior to COVID, we had months or quarters where we were break-even on implants as a whole, but through a combination of a profit-making bone anchor and a loss-making CI. All in all, of course, significantly away from the 25% that sort of best in class operating margin on that. Of course it is a scale over time and market position that needs to close that gap. We will come back to that. Diagnostics, 20% operating margin is best in class, and there's no doubt we are best in class there. It has proven on the margin side to be a clear and steady margin expansion year-over-year in that business. No doubt we are best in class and there also with potential to, let's say, redefine what best in class looks like. Lastly, on Communications, where we have seen the best in class competitor doing 20% operating margin, as we have reviewed. We are some way away from that, but we could plan to narrowing the gap. A little bit more on the hearing healthcare side, what are the potential for margin expansion? Of course, on the hearing aid side, Søren, and for that matter also Thomas, already conveyed some of the key messages around margin expansion there. The key, and we have seen that again and again, is of course innovation on the hearing aid side. If you have a strong hearing aid offering that is differentiated to competitors, that you gain market share, that is the strongest driver of margin. That is without doubt. Innovation is absolutely critical here. That being said, you also need to control cost of goods sold. Of course, the innovation that we drive, what is the follow-on effect into the unit cost in terms of components? We just recently had the whole era, or have the whole era of introducing rechargeable hearing aids, which has been a costly, you can say innovation, but it is coming down in price. That whole piece is also super important for margin. Again, market share is the most important driver. On Hearing Care, the margin driver there is really scale on a local level on brand. Moving up the brand recognition and being able to have critical mass in a particular country, critical. Using, you can say, our global scale on digitalization, reuse of systems and all of that a smaller, you can say private, independent, cannot really utilize. On hearing aids, Hearing Care, you can say the margin expansion there has more of an incremental nature over time, not dramatically different. On hearing implants, on the other side, you can say that's a more transformative in nature, since we are far from what is best in class. The two main drivers for that margin expansion is really, first of all, access to high-value markets and the most recent example being cochlear implants in the U.S. Also further expanding our position in sort of main European markets where we are already doing well in some of the markets, not to mention France, Germany, increasingly in the U.K. Doing more of that. Secondly, over time of course, and it is time that drives that, build the installed base of upgrade sales for existing users. Because that is really some of the, you could say, main profitability drivers of those that are significantly larger than us. On diagnostics, well, growth in the service business, service and calibration, increasingly important. Just generally speaking, exploit the scale advantages that we have in R&D and operations and distribution makes it incredibly difficult for competitors to match. We believe that we haven't exploited fully what the margin potential is there, but again, also in nature, more incremental. Communications, I think we have dwelled on that to some extent. Just to reiterate, even though it's a short-term setback compared to what we had previously communicated, we are confident that this is a business that is short-term to mid-term, depending on how you define 2023, should return to profitability. The route to that, just you can say what I think, Carsten, you asked specifically what would it take, right? You can say historically we grew this 23% in the joint venture. It does not take that type of top line, but somewhere between that and growing above the 12% in the market and then having a mid-single digits, maybe slightly higher OpEx investment continuously from the higher level that we have now, then we are at profitability in 2023 and would be able to grow profitability from there. Just to be very precise, that's what it takes, and we think we have the product portfolio and the plans to do that now. Slightly on the housekeeping side still, but important, we are operating a cash-efficient business. We do have high cash flow generation. We do spend 4% year-over-year on CapEx, and that's approximately what we will continue to do, slightly elevated 2018, 2019, 2020. 2018 from headquarter expansion and also factory footprint in these years and slightly depressed, you can say sales to calculate the number on. 4% is basically what you should expect going forward. You can see free cash flow in the same decade as we have reviewed, growing 13% on a CAGR level. Very high cash flow generation last year and also I would say this year. Even doing it on, let's say expected 2021 numbers would provide the same result. Extremely profitable on a cash level also. Our gearing targets are unchanged, two to two and a half. We believe that's a good place to be. It allows for some flexibility on the M&A side without being too highly levered. On the other hand, taking advantage of, let's say, reallocating as much capital back to shareholders as possible. We believe that for now, this is a good range to be in. We will continue to prioritize value-adding acquisitions. Bolt-on is what is included in the 7%-10%. We would not shy away from more, let's say, single larger acquisitions if the opportunity arises, but it's not really built into our expectations as they are more binary of nature. Then we will continue to buy back shares. This year we have guided for DKK 3 billion. You can see here, of course, that it is a result of a 2019 and 2020 that is a little, you can say, lower than normal. It's an element of catch-up on the share buyback side in that. All in all, I think we are committed to delivering attractive return to our shareholders. Top line growth is the key driver of that value, 7%-10% in local currencies. It corresponds extremely well with what we have done historically, as a combination of organic growth and acquisitions. We also have a clear aim to increase margin business area by business area. We do believe that on hearing aids, hearing care, and diagnostics, the margin expansion potential is of an incremental nature. Whereas, on hearing implants and communication, we see a more transformative improvement mid and to long term when it comes to the medical side. I think that's sort of the overall tying it all together in numbers and summarizing the value proposition sort of from a financial standpoint. I think with this, we will open up for Q&A for this particular section or for basically, you can say, all the sections in general. Yes. Thank you, René, for that presentation. We'll open up for questions. Oliver? Thanks. It is Oliver from Oddo BHF. One question regarding your margin expansion target. Basically, all initiatives were linked towards economies of scale and being bigger, and bigger means higher margin. I have missed some points regarding more cost-cutting, making the organization leaner. Potentially, you can say a few words on that, please? Yeah. That is definitely also into the equation because the easiest thing is to, let's say, pursue all opportunities when it comes to R&D, distribution, digitalization, and so on. There is a strict, you can say, process for prioritizing resource allocation internally to fuel that growth. The margin, you can say, so implied in the margin expansion is, of course, a more modest cost expansion than what you would see on top line. There's no embedded, you can say, cost-cutting exercise or restructuring exercise into the margin expansion ambitions. It is an ambition to be very cautious on the cost growing side, but then building top line. That's what should drive the margin expansion. You can say you have, in particular on the cost of goods sold on the hearing aids, you have extremely dedicated efforts to bring down costs, whether it's on the component, design of the different products or accessories, how we work with suppliers, et cetera. There you have extremely focused cost-cutting exercises going on. That's the one I would highlight. Please, Morten. Morten, ABG. You don't want to provide a lot of margin mix for the group level, but we look at the divisional level. The low-margin divisions are basically the ones that grows the fastest. Isn't this basically admission you may actually look into declining EBIT margins for coming years? The reason why we don't give a group margin is because it's a composite of very different margins. Based on this guidance, of course, you can sit and play around with different scenarios. Of course, you can say you are right, the group margin would essentially be, you can say, have a headwind if you had implants and communications growing at 25% year-over-year for five years in a row if the margin does not expand at the same time. That being said, there are much more scenarios pointing towards an improved group margin than the opposite. Our ambition again to grow within each of the businesses and you need to look for the, let's say, little more extreme scenarios to see a flatten or even a declining margin. Definitely more scenarios pointing towards a higher margin for the group. David? Hi. David Adlington from JPMorgan. Just on the Cochlear business, it's 8 years since you acquired Neurelec, still not managed to make that move into profitability. Sonova's not having a lot more luck either. Just wondered in terms of a path to profitability here, how important is that resale or the up-sale of existing clients, and therefore how far out should we be thinking about that profitability? It is, of course, important to have a lot of upgrades to be done to the existing base. We see that very clearly on the bone anchored. I think the main setback we have had is basically two years consequence of Corona. As René pointed out, we were very close to the break-even together. We, after we introduced Neuro 2, saw a +20% growth. We saw expansion in most markets. I'm sure we would have seen that if we could have been in the U.S. earlier. We could not because of lack of access. I think we can for sure run a profitable business in a CI alone in the next four or five years, I feel comfortable. Together, it will occur sooner. We still see very good traction on the bone anchored. We have moved to a clear number two position, and you cannot even rule out we could potentially, at least in the percutaneous, achieve a number one position. We are very strong there. I think, yes, it takes time in CI, and it does because of the lacking on the installed base. Our biggest shortage has been geography more than the lack of that. Geography we are working on and are now ready to start the U.S. journey. Michael? Yeah, hi. Michael Junge, Morgan Stanley. I have three questions, firstly on return on assets. You didn't mention it once of what your targets are over the midterm. Can you comment how you see the returns of this business develop versus history? Where is this business going in terms of return on this capital? Secondly, on gross margin of hearing aids wholesale, what was the margin expansion for the same period you showed, so 2012 to 2021? What happened to the gross margin for hearing aid wholesale? Then thirdly, where do you see the gross margin for hearing aid wholesale over the midterm? You mentioned that margins will go up on EBIT level, but I'm curious what you mean for the gross margin on the hearing aid wholesale business. In the same, if I brought the return on invested capital over the same decade, it would have gone down quite significantly. Basically, due to the same business mix change that you have seen, that the return on invested capital on Hearing Care is lower than the traditional hearing aid business. I would say, implied in our mid-to-long-term outlook, I would not see a dramatic dilution from change in business mix. Yes, you can say implicitly, Hearing Care could grow slightly higher due to acquisitions than hearing aids, but not dramatically. Probably that part would be offset by margin expansion and profitability. All in all, I would claim, even though we don't guide on it, same return on invested capital or slightly higher, but on a higher or larger business. I hope that's on that. On hearing aid gross margin, how that has developed in the same decade. I honestly cannot remember the numbers back to 2012 and what it was. At least you can say, if we go back three, four years back to pre-rechargeability and so on, we did see in the interim period a setback from introducing rechargeability. What we are seeing now is a return, basically in gross margin to basically what it was prior to Well, on the way at least to return back to prior to rechargeability. I think we're still 1 percentage point short from rechargeability, we are continuously, let's say, lowering the cost of that element as it is maturing, as the design of the accessory is changed to a more, let's say, low-cost accessory. The last piece was. I cannot remember all the numbers either. If you look back to, let's say, at least the mid zeros, I would assume a positive development to the gross margin. There's so much in our moving to Poland, better leverage on overhead, much higher volume. The connectivity products in the beginning were awfully expensive. I remember the cost price, a single unit, and we are definitely in a much better place today. If it's not coming through, then I would be surprised. Single unit pricing and component pricing, we are in a much better place. The gross margin outlook for hearing aid wholesale, some comments. Short term, it is this balance with how fast do we make hearing aids rechargeable, because it does cost more to put a battery in than to not have it. It does cost more to produce a charger. On the other hand, the cost of this extra is going down quite dramatically. We gain on the volume we already have. We lose on the volume that comes in. We, of course, also get a higher ASP. Short term, I think we are relatively stable. Long term, I again think scale will come in. Direct material is still not the majority of the cost It is, of course, different when you, again, add a charger that has had quite significant impact on the cost of hearing aids. We cannot run away from that. I'll just quickly throw in a question from the web chat here. It's from Veronika Dubajova from Goldman Sachs, asking basically 3 questions. First one, can you comment on whether you see the lower or upper end of the full year 2021 guidance as more likely, given the development of the EBIT in communications? That's number 1. Number 2, what level of revenues would you need to deliver for implants and communications respectively, to achieve a double-digit margin for those businesses? Number 3, what level of revenue would you expect for your sales to grow at the 6%-8% organic growth level in every year over the midterm? Those are three questions. What was the last one? Can you repeat? Yeah, the last one. Would you expect the 6%-8% organic growth for every year over the midterm? Yeah. The first question on if we have any particular view on whether we will be on the lower or the higher end on the outlook, in light of the clarification this morning on EPOS. I would say, no, there's no change. I would just, again, stress or emphasize that, yes, we have made a clarification on the headwind on EPOS, but if anything, we are as confident in the full year outlook, given that the 90% of what we do is doing incredibly well. I think that's just a key takeaway, that we are not kind of, you can say, being more cautious on the outlook for this year. If anything, we are doing equally well or even better. The 6%-8% or Sorry, last question, 6%-8% organic growth per year is, of course, you can say, an average over years, and our ambition should be seen in light of whatever the market is. If the market develops, you can say, in a very stable, normal way, yes, then we will also have the ambition to grow 6%-8% organically in that period. Just recent years, and maybe next year, have shown that it can be a little bit more volatile, and of course, our performance will be a reflection of that. I don't know if we can guide specifically on what type of sales we would need in order to have double-digit margin on medical or EPOS, but it is, of course, not in the short term that we will be there. It is in the mid to long term, probably. Thanks. Communication before implants. Definitely, yeah. Morten? Just on your margin outlook as well, how dependent is the margin expansion for hearing aids on you continuing to take market share? Seems you build a model that requires you continue to take market share for you to delivering a little bit of incremental margins. It is obvious that that is the key. It does matter which market shares you take. The main difference between us and the highest margin, the best in class, is fundamentally sales in North America to two particular channels where the cost of doing business is literally the same. The biggest difference is our strong position with the National Health Service versus a very strong position with VA and a strong position with the Costco, where the latter is, of course, more of a fragile position, where the two healthcare system, we know, are quite sticky and conservative. It is in North America primarily, that we have to gain share from our competitors. If we do so, we will also see a margin expansion. Hi, Christian from Nordea. Just a question for clarification on how the development in business makes impacts the margin. As I understood you, René, you're suggesting that if, say, we see implants and EPOS growing significantly faster than the rest of the group, then we could actually see an adverse impact of the overall margin. The implication of that would be, as I understand it, that the incremental margin in implants and EPOS is below the group level. It's not merely a matter of sort of growing on into sort of a large overhead in these businesses. It's also a matter of you investing almost whatever you get in those businesses back into those businesses. Is that the way to think about it? No, not really because if you were, for that scenario, let's assume that you would see five years in a row, 25% growth year-over-year in the EPOS business as a great outcome. Of course, you would see the margin increase also for that business. You would not five years later, let's say, dilute with the current margin. Of course, that will improve over time. Of course, building up to an 18% operating margin and so on, that would take some time before it would actually be accretive to group margin. The actual, what is the mathematical sensitivity to that journey is, of course, you can say that's where I says it takes a very special scenario for, you can say, the medical and the EPOS communication group to, you can say, dilute the group margin. Overall, in more scenarios pointing upwards than downwards. It is an effect. I hope that was clear. Carsten, please. Just in terms of 2021, you are now saying that the hearing healthcare is in an even better situation than last time when you guided. What is it actually that has improved? For example, we see VA data is probably not there. You have the big incremental change in Costco and other players claiming to have regained its market position in volume. We don't really know whether it's true or not. Maybe you could give some details on what's driving the incremental better performance. I would just repeat what I at least tried to say this morning, that France continues to deliver more growth. We are definitely in the higher end of our expectations for how that could continue. We have, of course, seen a slowdown during summer because it was summer, but we just can see that it still seems to deliver very solid growth. As a lot of it is delayed invoicing and consignment on the wholesale, we start to get really good transparency towards the end of the year. It is higher than expected. In U.S. on the independent with Oticon More and Oticon, we feel very comfortable gaining share. These are the main drivers. Other than that, there's pluses and minuses, but they are key in that. Maybe- Diagnostic, I would mention as well, is doing really well. I'll just throw in another one here from Maja Pataki at Kepler Cheuvreux. Can you please help us on how to think about 2022 with NHS growth weighing on pricing and France likely seeing growth slowing down if Germany is a reference point? I think that's too early. We have just seen the effect in France last longer. At some stage, you would assume that the accumulated growth potential over many years has somewhat been exhausted and come to another level. The speed by which you approach that is difficult to judge. One of the upsides we have is NHS. As I also showed, there is a significant upside also in North America with pent-up demand. I think they are as likely to outbalance the other. It's too early to be too detailed on 2022. I think there is equally many upwards-pointing opportunities as some of those that could point the other way. Any more questions in the room here? Maybe a comment that I would like to make in all this about margins. It is still so that even though we try and would very much like to describe from a business point of view, wholesale and hearing aids and hearing care separately. From a strategic point of view, they're very connected. We continue to see, as Niels said, a consolidation in the distribution. The end user have very little overview of what is what and what I get from whom. Access is key. I would still claim and highlight that another key to long-term profitability is a significant hearing care element for the total business, because that is ultimately the strongest ASP pressure applied to the wholesale sector. That's consolidation into larger players that could apply that pressure. Therefore, these things, even though presented today quite separately, in my book, is still a very integrated strategy of long-term margin protection and expansion to operate across both wholesale and retail. Of course, best-in-class measured separately, but from a strategic point of view, it seems evident that the players that have embarked on a route with significant wholesale or retail are also among the significant players in wholesale. I think the evidence after 10, 20 years is very evident that that is part of achieving best-in-class in the broader hearing instrument business, you could say. I think that's very evident. I just have another one here. Mattias Häggblom from Handelsbanken asking about the free cash flow growth of 13% on average in the reference period we had here before versus the EBIT growth of 8% in the same period. What is the delta? What has been the driving force behind the higher growth in free cash flow than EBIT? Yeah. Basically, you can say, relatively speaking, working capital management is sort of actually the main delta in that period compared to where we were back in 2012. The CapEx side is, you can say, more or less unchanged in percentages. I think that's the main driver. Yes. Secondly, the cash spent on bolt-ons, on average, the DKK 600 million per annum over the last four years. Anything that you can share in terms of return on invested capital, and maybe versus other capital allocation options? How that compares? Yeah. When capital is a scarce resource, what is then your ranked priority of investments? Obviously, you can say what we can do in terms of R&D innovation on the wholesale side, if we are comfortable it provides differentiation. It is still the most differentiating investment that we can do. It is really in R&D. That being said, closely following, we are still extremely cash-rich. We do create tremendous value from investing in building distribution and building scale in Hearing Care or in diagnostics for that matter. We have not been that explicit about it, part of the, you can say, the current very strong performance of our diagnostics business is actually a deliberate strategic roll-up of distribution across the U.S. Many small investments that in themselves might not have that high an immediate return. Once it's bolted onto what is a larger business, it all comes together and can provide high returns. I think that's the case for diagnostics also, and that's definitely also we have seen the case for Hearing Care. We will continue down that route, and it is still, you can say, there was some question around development of price levels and so on. Yes, it has, of course, been a competitive environment to acquire Hearing Care. Predominantly we are globally, at least, we are still only three players, you can say, into that game. We believe that we can still do acquisitions with a very high return on invested capital. I wouldn't say almost immediately, close to, if it's bolted onto something that's well-functioning. I have a last one here from the virtual audience, from Veronika Dubajova, again at Goldman Sachs. In terms of M&A, what are the business areas or the regions where a large-scale deal would make strategic sense for you? Worldwide? It's so opportunistic when we move outside a bolt-on in retail or in diagnostics that I don't think we can really comment on that. On the retail side, Niels gave a good presentation on where we look for scale. Examples like Spain and some of the countries there, U.S. potentially as well, would help to build that business. If we move outside Hearing Care, there's not anything of geography or something that we could highlight. I think it's just the normal appetite on participating in, if the chance should ever come, for further consolidation, broadly speaking, in our industry. It makes a lot of sense still, we would happily participate if it ever become possible. Right now, we don't see that as a scenario just around the corner. Thank you. Do we have more questions in the room? We have there, Henrik. Hi. Henrik again, Canada Pension Plan. China, can you update us on how you view the market and what your efforts are over the next two, three years, and what you want to achieve, both on the wholesale and retail side, please? Yeah. China, it's very evident that China's growing a lot. We have, though, seen, I would say, a bit flattening of the growth rates here during corona and the pandemic. We start to see it being back up to the plus 10% growth a year. We are very active with all our four brands on the hearing aid side in partnerships and close collaboration with key players in the Chinese market. We are very focused on making sure we don't get trapped. We have seen a significant market share expansion over the past five years, not the least due to the introduction of Philips, but also broader than that. Of course, as I said, we are keeping an eye out for if there is timing where we need to move into retail. Short term, I would say short to mid-term, we feel very comfortable that there is plenty of growth opportunities without starting retail as such. If you were to, it would require a strong starting point of some kind. Just starting to build greenfield stores or collaboration with a single partner in a single town, I think is too long of a journey. On, again, in China. Is it going to be like a normal hearing aids market where the professional is very important? Do you think that there's a risk that this is going to be more of an OTC market than other comparable markets? I would say China comes from being almost a pure OTC market, because that was how you could get hold of things. The trend is clearly towards more and more professional. However, the education is still lacking significantly. All manufacturers invest heavily in different kind of training facilities and doing training of dispensers is typically relatively short. Absolutely biggest, I would say, challenge for growth is to make sure that there's enough qualified. The end user goes the same way. They seek help, they seek a professional. Of course, it's obvious that it's not available to everybody. The creativity on different models is probably the highest anywhere in the world in China. Things take place in pharmacies, in opticians, in real dedicated hearing aid specialist stores with maybe even training from outside China. You can buy a voucher on the internet and go somewhere and get a device for it. You have more different models in play in China. The conversion, the main trend is a more and more professionalized channel, definitely. It's more digital than we have seen in our part of the world. It basically start like that. All users are digital and look for everything digital. The digital capabilities are even more important in China than they are here, because you need to reach a lot of people and need to find an efficient way of servicing people as the demand will grow. There is, you could say, a capacity challenge when it comes to getting things delivered that are behind the demographics and the penetration is still very low. We did some modeling the other day and it gets all crazy in 10 years if you just go modestly up in penetration and look at how many turn 65 in the coming years. A key focus and a lot of attention. We are in top five now with China as a hearing aid wholesale market, and we can only see it move further. Do we have any more questions here? We don't from the virtual audience. I think with this, we'll say thank you to both of you and to all of you for the questions. We are now at the very end. 3 and a half minute ahead of schedule, that's pretty well done. I hope you all have a pretty clear understanding of Demant and the company, the path forward, et cetera. At least that was the ambition. Otherwise, let the IR team know, and we'll see if we can convey it in a little bit more clear terms, if that's necessary. I think last thing I want to say, replay is available on our website probably tomorrow. We hope to have everything ready by then, it's possible to access it there. Otherwise, I think just thank you very much to the virtual audience. Thank you very much to you in the room. We hope you will join us for a glass of wine outside. There's a dinner later for the ones of you joining that one. Thanks very much. Yeah, thank you very much.