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Company announcement no 2021-14 Interim Management Statement covering the period year - to - date ■ EBIT outlook upgraded to DKK 3,300-3,500 million before one - offs ( previously DKK 3,150-3,450 million ) Higher - than - expected EBIT driven by strong performance in Hearing Aids , Hearing Care and Diagnostics We now expect to realise profit of around DKK 160 million from two additional one - off items In the following , all commentary is based on adjusted figures before one - offs , unless otherwise stated . In H2 , the Group has so far generated low double - digit organic revenue growth in line with our most recent ex pectations . Acquisitions have to a minor degree contributed positively to growth , while exchange rate effects have been more or less neutral . As the same period in 2019 was severely impacted by the IT incident , 2019 no longer serves as a relevant comparative base , so we only make comparisons to 2020 . ■ Demant 2 November 2021 Hearing Healthcare has seen very strong performance so far in H2 with double - digit organic growth . Hearing Care , in particular , has continued to benefit from the positive impact of the hearing healthcare reform in France and has also seen growth in most other markets . In Hearing Aids , our Oticon More and Philips HearLink flag ship products are maintaining strong momentum , delivering further market share gains , particularly in the im portant US market . Diagnostics has continued to perform very well and to gain market share thanks to broad based growth . Revenue in Hearing Implants has been impacted by the voluntary field corrective action an nounced by our cochlear implants business on 14 October , which has led to a temporary halt to sales of new cochlear implants . Compared to revenue generated in the months prior to the field corrective action , revenue in Hearing Implants ( i.e. Cl and BAHS ) is currently at a run rate of around 65 % . In H2 , Communications has so far seen negative growth in line with our most recent expectations , which re flects low exposure to the relatively high - growth US market and the ongoing establishment of the EPOS brand . For H2 as a whole , we still expect revenue to decline by more than 10 % compared to H1 , but we have seen an increase in the intake of new orders and in revenue in recent months . In H2 , the Group's gross margin has so far improved compared to the gross margin of 74.5 % realised in H1 . The improvement is driven by Hearing Healthcare , which has seen an improved gross margin and has also ac counted for a larger share of total revenue for the Group than in H1 . The gross margin for Communications has declined compared to H1 due to the slowdown in revenue . Both segments have seen additional costs related to current supply chain dynamics . In local currencies , OPEX has so far in H2 seen growth similar to the 18 % realised in H1 , which reflects coro navirus - related cost savings in the comparative period , including government support schemes . We consider our cost base largely normalised with no material element of temporary cost savings , and we still expect to see mid - single digit growth in OPEX in H2 relative to H1 . In H2 , the Group's profitability has so far remained very strong and exceeded our expectations . This develop ment is driven by Hearing Healthcare , which has seen better - than - expected profitability , as strong momentum in Hearing Aids , Hearing Care and Diagnostics has more than offset the negative impact of the halt of sales of new cochlear implants . As expected , Communications has seen negative profitability . Cash flows have remained strong so far in H2 thanks to the profit generated , and we have bought back shares worth DKK 958 million . Total share buy - backs year - to - date thus amount to DKK 2,771 million . Demant A / S Kongebakken 9 2765 Smørum Outlook for 2021 Due to coronavirus , our outlook ( summarised below ) is still subject to greater uncertainty than usually . However , supported by the release of some pent - up demand , we still expect to see further gradual recovery in the global hearing healthcare market for the remainder of 2021 , and we still expect growth for 2021 as a whole to be close to normal levels of 4-6 % per year in developed markets , except in the large government channels , Veterans Affairs ( VA ) and the NHS . We still believe that the normalisation in emerging markets is likely to go beyond 2021. For Communications , we assume that the addressable market will grow at least in line with its structural trend of around 12 % , despite strong comparative figures in 2020 . +45 3917 7300 info@demant.com www.demant.com CVR 71186911 Page 1 of 6