Sonova Holding AG (SOON) Earnings Call Transcript & Summary

Welcome, everybody. My name is Thomas Berhnardsgrutter. I'm the Senior Director of Investor Relations and I'm very happy to welcome this big group here in Stäfa at our Investor Day and I also want to welcome all the people joining on the live webcast. Before we start, I just wanted to mention a few housekeeping items. First of all, for those of you who need WiFi, you see some posters hanging on the wall with both the WiFi as well as the WiFi password, just make sure you get the spelling correctly. There will be -- or the people are working normally today here in this building. So if you need to find a restroom, just go out the store, take a right and follow the signs. There is no smoking in this building. Fortunately, we have very nice weather. So if you need to have a smoke, just go outside and take the stairs up on the terrace and enjoy the sunshine up on the terrace. I also would like to ask you not to take any pictures during the day or during the factory tour. And finally, I hope you will be able to experience the new products that we announced a few weeks ago. We will have a marketplace in the back of the room during the lunch break as well as after the event for you to talk to the experts, see the products live, touch them and ask questions about the products. At the same time, we will also have a live sound demo in the room just outside as well. We will guide you to that room. We will have to do it in small groups of about 10 to 12 people, but we will try to make sure that you all get to experience also the benefits of the new technology either during the lunch break or after the event finishes at 4. In terms of the Q&A session, there will be two Q&A sessions today. The first one will be after the morning block. So before lunch, this one will be for the people in the room. And then there will be a second Q&A session at a quarter to 4 where we will also give the opportunity for people that are joining virtually to ask question via the phone. The details for that you find on our web page. There you see the dial-in, dial-in 10 minutes before if you want to ask a question in the room in the second Q&A session. And with this, it's my pleasure to pass the word on to Birgit Conix, CFO of Sonova.

Hello. Welcome, everyone, here in Stäfa and also online to our investor -- you don't have the presentation yet. So welcome to our Investor and Analyst Day. So what I will do is I will walk you through the agenda and what we will first start with is to give you an update on the recent market developments in the hearing aid market. And then next, I'll hand over to our CEO, Arnd Kaldowski, who will share the group strategy and also outlook with you. And then we'll dive into innovation, which is at the core of our strategy. So then Rob Woolley, our Global Vice President, Hearing Instruments will demonstrate how, for the past decades and actually time and time again, we deliver breakthrough technology. And we do that again this time with our latest platform, and that is what we will show to you during that presentation. Then we will move on to Arnd again, who will talk about how we successfully combined our internal core competencies with some external capabilities and skills. And then after that, we will look at how this all comes together. So all these events for the past 5 years leads to our newest platform with Infinio and Infinio Sphere and Oliver Frank, our VP Phonak Marketing, will give you an overview. He will talk about the core products and will also give you a flavor of the recent launch event in Las Vegas. So then after the first Q&A, as Tom has already said, we will go for lunch and then you have the opportunity to experience for yourself what real time AI-based sound processing means and then there is a product demo for you available. And as already said by Thomas, you will also have the experts in the room -- in the back of the room. And then after lunch, you will hear from two of our newest management Board members, Oliver Lux and Lilika Beck, and they will talk about Audiological Care and also about the Sonova X business system, which delivers a lot of benefits and they will do this together with Arnd and also with Ludger Althoff, our Head of Operations. And then after that, we go with second Q&A and then the factory tour as Thomas already discussed. So let me first walk you through a recap of why Sonova is an attractive investment because this is a broad-based audience. So first of all, we operate in an attractive market with some very strong growth fundamentals. So firstly, the aging population, which is the base of our consumers, and then the significant penetration potential that we still see in developed and also developing markets, so in both. And then in that market, we have a leading market position because of our broadest and most advanced product offering and also because of the strong distribution network that we have in both B2B and B2C, where we expanded significantly over the recent years. And then we have strong financials. We have a strong balance sheet. We have a strong cash generation, and that allows us to invest in both organic and also M&A growth. And then finally, and I'm very proud of the progress and also the focus we have on sustainability. And so we are the top performers, not only in our industry, but also outside of our industry as reported by major rating agencies and also publications. And Arnd will talk about that further during his presentation. Then a bit about the market update. So what I will be showing here is each time it's the monthly unit volume per market. And we only show data that are based on tracked markets where we have officially -- official statistics basically. And what you -- and I'll first start with the U.S. commercial market. And so you see here that for the first 4 months of our financial year compared to last year, we are growing at -- sorry, not we, the market -- sorry, the market is growing at mid-single digits. And if you compare it to the last fiscal year, that was low teens, and that is what we expected that there was somewhat of a slowdown to mid-single digit because of the strong comparative base. But then if you look interesting on the 5-year CAGR, the long term, you see that we see that the market -- U.S. market is right in the middle of the 4% to 6%. So long term really remains fundamentally strong. And actually is a testimony to the strong and attractive market overall that we are in as a company. Then the U.S. government services, so that is primarily the VA and here, you see a slower growth also on the longer term. And just recently, this is due to capacity constraints that are effective in the U.S. government services market. And then when we look at Canada, over the past 4 months, we see a double-digit growth and that is a very strong growth. And when you look at the 5-year CAGR, again, right in the middle of the 4% to 6% that we would expect on the longer term. If you then look at the major European markets and I'm showing these three here; so first, Germany, mid-single digits for the first 4 months and if you compare that, for instance, to the last -- half year of the -- second half year of the past fiscal year, that was also mid-single digits. So that trend is continuing. And then if you look at France and the U.K., so there we see actually a lag, and you see that the growth is either flat or slightly in decline. Now what I'm not showing on this slide is NHS in the U.K. And there, we see a growth of over 30%. But here, we need to be mindful. When we think of the ASP in this channel is much lower versus other channels. So in terms of value, this is not the same effect and it's, of course, not in line with what we see in volume. Then if I summarize because we don't have monthly data for all of our tracked markets, so if I summarize the first quarter, then we see in our tracked markets, a market growth of plus 6%. But if we back out the NHS, which I just alluded to with this high unit volume growth, then we are at plus 3% for the first quarter for our tracked markets, which is slower than what we would have expected. But on the other hand, when we think of the full year, we still believe that the market will be -- our tracked markets will be at 4% to 6%. So with that, I would like to hand over to our CEO, Arnd Kaldowski.

Thank you, Birgit. Good morning, everyone, and I would be remised if I wouldn't say welcome to Stäfa and outside. Normally, I have the first section. So now you have three welcomes. We're excited to having you here to share what we think is exciting and then obviously, you want to get more [ insights ] and data, and we'll share as much as we can. So we're going to build a little bit of a momentum to what's Oliver's presentation because then you get to the nuts and bolts on the product as much as we can share data and then later on, you have a chance to listen in. But I would say, if you look at the front page of the presentation and you see a hearing aid, I would say it was about 12 to 13 stories high on the Sphere, which is 15 to 18 or so. At least you could say we're brave enough to put a hearing aid in the middle of Las Vegas at that scale to drive some awareness, right? So that's at least a good guy. But on the other hand, I think it is a credit to our belief on the impact of Infinio, the Sphere Infinio but also the Sphere technology over time, which we wanted to put a little bit of an exclamation mark behind. So we'll dive deeper on the exciting breakthrough. There's two other topics we wanted to cover in the afternoon and better explained when we go through the Sonova strategy, no surprise, no change in bigger picture. We continue to drive down the same path because it works for us. And I think it's a good strategy for the market position we have and how we play in the market. Clearly, leading innovation, a big highlight for us this year on the strategy execution. The work was in the last 6 years, as you will see. But now we get to the point where we can share with you, but obviously, equally importantly with the customers. The second one is expanding consumer access through more access from a retail perspective, but also the digitization. Oliver Lux will go a little deeper on the example of Germany, which he [ led ] before we were able to promote him to become a management Board member, now responsible for all of Audiological Care. We will not go deeper, but still important and still activities going on under Rob's leadership in [indiscernible] because the third one is about B2B hearing instrument and cochlear implants, the go-to-market broadening our access, expanding value we add. And then the fourth one is more of a long-term play, but I think important in the years 5 to 10 probably from now if you think in big picture, the high-growth developing markets. And then we have the enablers, one of them being continuous process improvement, and we wanted to take a half an hour now to go a little deeper for you. We always reference that we want to give you a chance at least for the ones we're interested to see a little bit more what do we mean by that. Now I'll come to the full year outlook. But let me start off with the growth ambition hasn't changed longer term. I think as you could see, it was beautiful to see the 5-year CAGR, 4% to 6% good number. right? Now we can debate value a little bit, a percent up, a percent down, but in general, this is 5%, hopefully become 6% when we grow up and when we drive innovation and penetration, but it is very steady despite the COVID in between and the inflationary environment. So for us, that means profitable growth starts with 6% to 9% and an EBITDA growth of 7% to 11% is what is our midterm targets here, and they remain in place, right? Now moving on to the growth drivers. There's one more that I had on strategy. Why when we think about leading innovation, we think about two pillars. The one is how do we advance audiological performance because that's the core functionality people are seeking when they buy hearing aid, right? And we had good launches over the last year. If you remember, Marvel, Paradise, Lumity. We can debate Lumity, I'll get back to that. But when we showed this chart first time, I think it was a year ago, may have been two, you go under advanced audiological performance, pioneering technology to deliver best-in-class audiological performance. We will do our utmost best to convince the customer with a great technology we have in our hands [indiscernible]. And you can see we were working on those core hearing performance, processing power in the form of chips, which is the underlying necessity from a technology perspective, but also algorithms, and we already indicated that to the traditional algorithms we need to add other ones. Expanding consumer value, not so much a focus this year in terms of new things. We have some technology-enabled macro services in the Audiological Care. We have an early entry hearing device, need to see how we build beyond the hearing performance, not critical for the numbers this year and probably not next year, given the growth we have out of the core. But I think eventually, we will need to find ways to create more value. Broaden consumer access, already voiced that over, Oliver will go deeper, deliver commercial excellence in terms of value add, feet on the street, commercial execution in the B2B environment and then the high-growth markets. Now we will not share updates on numbers. This is a Capital Markets Day. And we are convinced that our guidance is a good number for the year, and we stand behind that. So that was what we shared also this morning. So in that regard, no change to the big picture for the year. You can see the 6% to 9 % and 7% to 11%, but you heard Birgit already saying Q1 in the market was a little lower than we thought, probably you heard also from others. I think that is factually correct. It doesn't bother us at this point of time towards our guidance which is going to help us, particularly in the second half year with the Infinio, the Infinio Sphere, but I also heard that people reacted when we announced the products, wow, it's quite broad as a product offering. I think Oliver will guide us through, right? Now how do you put that in perspective with what everybody will have in mind when they're sitting on their spreadsheet. What's the first half, second half year dynamic? Well, that's a complex one. And you know we don't give half year guidance; therefore there's not half year guidance, right? But we will share, and I can share upfront and we'll go deeper a very positive initial market response to the product Infinio but also Sphere Infinio and some expectation on the ITE rechargeable. But there will be not a large revenue contribution because yes we launched in the U.S. at the beginning, people put it on some ears to see what the response is. So the curve is always back-end loaded. And the European markets only come in the September and then again, they are going to put it on some ears before they buy larger bulk and switch over, right? On the other hand, you have all-in cost. They have the known cost of launch, right? They have launch cost, they have ASP drop because people start to recognize Lumity was great, but still old. And then you have the manufacturing ramp up. Now those three, while we will not give numbers, and I'm sure people will ask to try to pinpoint it down, but I can't give numbers today. But what I can say, it is a bigger impact on the launch cost. If you assume Infinio Sphere was the leading event. Guess what, all others will be also larger because we want to spread the positive news, right? By the way, in the Sphere, we had 1,000 customers live. Normally, we have in the largest event in U.S. 200, so a big impact. You're going to -- we have seen quite significant ASP pressure on not just the launch situation, but quite competitive market right now, as you could see from the voiceover of our competitors and on the manufacturing ramp-up also of a proportional because of the breadth of the product offering, which we are launching at the same time. So clearly, first half year is fine with regard where we want to go in the full year because we do believe the lift is there, but it is quite skewed at the end. Now one caveat here when you think in terms of currency, unfortunately, the Swiss franc is not our friend if it comes to the P&L. When we gave you numbers at the end of the fiscal year, we said at that rate, there was a slight positive in the expectation. This has turned around in the last couple of months. You see the numbers here. And Swiss franc, if the current rates stay in place, we'll have 1% to 2% headwind in Swiss franc on the revenue side and 3% to 4% on the EBITDA. Now we have seen shifts in the last 2 to 3 months. So I'm not here to predict anything for the future. I trust you will not too, right? But at the end of today, it's something we have to unfortunately live with. Before I hand over to Rob, just a quick note on the ESG, there's no change on the slide relative to what I shared a couple of months ago, but we wanted to put it in [ big house ]. I know it's increasingly relevant for you, it is increasingly relevant for us even outside of the investor community because we really, a, want to have the best brain pool when the people being happy and excited with us, but we also want to help to do what we have to do with regard to [ Planet Earth ]. So our focus is greenhouse gas emission, as you would expect. We have science-based targets, packaging weight on the social side, big important for us, employee engagement, not just from the productivity contribution but also the voluntary attrition, as you will see later on the Audiological Care, but then also from a D&I perspective. I think all areas where we're making good progress governance, big focus on the ESG reporting being ready for in time being auditable there, but also the product reliability. Now we can claim all these numbers. So it was interesting to look on what the ESG rating agencies do when you read the fine print in every one of them, we are consistently in the best 10% of our peer group, in most of the cases, we're more in the 2%, 3%. So doing a good job there. With that, that was just a recap strategy, no change to guidance and outlook. So that should be pretty smooth as expected as a Capital Markets Day. We're moving into by I think most of you are super interested today, which is innovation, breakthrough and what is in it for the customer. With that, I want to ask Rob Woolley up who leads the Hearing Instruments business globally.

Thanks Arnd. Good morning, everyone. I'm excited today to talk to you about two things: number one, market leadership, but primarily number two, how we're trying to push the boundaries of innovation. So let me start first with market leadership. It's very straightforward how we define it. You saw Birgit talk about what happens from a unit perspective. But we measure market leadership based on units and value. And that's really important to our business model. We also measure that based on growth. And last but not least, we tie that to something that is very important to us and that is our vision and our purpose to enable as many people as possible to enjoy the delight of hearing. So it's easy to measure. It's more difficult to do. So let me walk you through what we try and do in our business model to define what market leadership is. And there are four elements. And it's important we're a B2B, and we put parentheses to C because we design our products ultimately around an end consumer who is trying to enjoy the delight of hearing. And so it's really important that we differentiate because we also have customers that are the providers of that. And to be successful in our space, you have to be successful at both, and I'll come back to this in a second. We also need to have the ability to commercialize that innovation. And we also need to be able to have the scale to drive that innovation. So let me give you an example over the past 2 years. Now just a reminder, we've been a business unit for 2 years, okay? We were a functional organization before. And part of the reason why you want to put functions together is you find innovation with intersections. And this will be a theme later when we talk about technology. And so between these intersections, you find opportunities to create value. So a couple of years ago, we saw you know what, reliability really matters, right? People buy a very expensive hearing instrument so that they can put it on their ears and it stays on their ears. But what happens a lot in our industry is it comes off, it needs to be repaired. Very clear, right? People buy a hearing instrument. They want it on their ears as long as possible. So we dedicated the team to focus on that and to improve. And so we have very ambitious targets to improve our reliability. But what was really interesting, as we were combined under our business unit, we started to see some intersections, and we had very unique data to be able to see that which is, yes, it's very important for the end consumer, but believe it or not, it can be even more important for the customer through our different channels. So they spend a significant portion of their time trying to problem-solve technical issues. And that's not what they do best. They do best at providing hearing care, not fixing a hearing instrument. And so with a dedicated cross-functional team, we've been able to make significant improvements in what we view, including what the data would suggest market leadership and reliability. So to that point, we talk about intersections. That's where innovation and breakthrough happens. What do you need in these intersections to make innovation happen. It requires collaboration, both internally and externally. That includes both clinically and with technology. So if you look at some of the studies that we've funded over the past few years, you look at what's happened with cognition, we have been highly collaborative with clinical partners in making sure we push the boundaries of clinical innovation, and there's more to come there. But it's not enough just to collaborate externally, you have to have a receiving end, which Arnd is going to hit on after my presentation. You have to be able to take that innovation outside and incorporate it into what you're doing internally. And for us specifically, as we talk through this next breakthrough for us, that is proprietary chip innovation and process innovation and you'll see how important that plays out as we go through what we believe is breakthrough. Last but not least, it comes down to people, it's innovation and our culture. And I think you'll see in this building, it is a very unique environment where we collaborate and we try things together, we fail together, and we succeed together. And that's a key component of what drives breakthrough, but also drives market leadership in our space. So let's talk about innovation in context of the end consumer, and that's what we're going to focus on today. So I'm going to reiterate it again, just like we do with our employees. We're here to make sure as many people as possible, enjoy the delight of hearing. You buy a hearing aid, my father bought a hearing aid, my mother-in-law bought a hearing aid because they want to enjoy the delight of hearing and they need sound quality, and they need to be able to hear in different listening environments. And we'll talk about the most challenging one, which is speech in noise in a second. But they also need, as we talked about, reliable products that they can keep on their ears. And in our modern digitalization world, people need connectivity and they need personalization. So this is how we frame broadly based on consumer research, what differentiates and creates value for the end consumer. So let's take a little bit of a step back. It was referenced by Birgit at the beginning that we've been using innovation and breakthrough technologies for a long time. If you look historically, most of the breakthrough innovation has been around hearing performance. So that goes back to Audio Zoom. You'll see this in the upcoming slide. That delivered 3 decibels of signal to noise ratio improvement, which was a major breakthrough at the time. We'll go through some of the others a little bit later, but there's also certain innovation that takes place on ease of use. So you remember, Belong, the first lithium-ion rechargeable battery, made life easier for the end consumer and Marvel with MFA, breakthrough innovation to be able to connect with the world around you. So if we look, as Arnd referenced for the past 6 years, as we start to develop, what are we going to bring to you in 2024? So let me give you two use cases, and I'll give you a little bit of insight into my family, hopefully, not too much because I'm going to talk to you about my mother-in-law and I'm going to talk to you about my father. So both of them have hearing loss. Both high-frequency hearing loss, but my father has low-frequency hearing loss too. And what's interesting in our lives, I come from a large family, my wife comes from even larger family. So when we got together 2 months ago with different family reunions, they're exposed to this situation, a really loud environment, okay? So my family, when we're all talking and I've measured it gets up to about 70-decibel levels. And hopefully, my mother-in-law doesn't listen to this. My wife's family, it gets up to about 80-decibels. For both my father and my mother-in-law, this creates a big challenge. And so my father responds in a different way than my mother-in-law. What my father does is he isolates himself. So he disconnects from the 20 grandchildren, walks into a room and starts reading a book or looking on his iPhone. He isolates himself socially, pretty significant. These are moments that matter for the end consumer. On the flip side, my mother-in-law will stay in the room, but she will not follow the conversation. And so we sometimes jump from politics to technology to literature based on what she hears and doesn't hear. And that has a real-life impact for our end consumers and has a real-life impact for me and my family. So this up into this point has not been able -- we have not been able to solve this as an industry. It is the most difficult situation to solve for from an engineering perspective and from an audiological perspective. But we've been able to do it this year, and it's 10 decibels of signal to noise ratio improvement, specifically in these situations. So let me walk you through why it's been so hard historically to be able to do this. So the challenges are, you can have a lot of different data. So you could take Google or Meta and they may be working on this, they may not be working. You can have a really great data, but you have to have the right data. It has to be real-life situations, okay? As we've known recently with artificial intelligence, you need, as we call it large language models, but you need intense training to be able to take those real-life noises and sound instances and covert them in the right way to a signal. On top of that, it's really difficult with latency, right? We have 15 milliseconds to be able to process that data, that model and the sound to get speech intelligibility in 15 milliseconds, not easy to do technically. And up until this point, we've not had the chip technology to be able to pull that all together. It's a physics problem. It's size, processing speed and energy. And if you look at the developments, and this is what's happened with AI, that is what has been the key enabler. That's why you see what happens with NVIDIA. So this is how at this point in time, we're able to make a breakthrough. So all of you are asking, okay, hearing instruments have been using artificial intelligence. We've been using machine learning for 20 years. We primarily used it on scene recognition, okay, or sound classifiers. And you can apply machine learning, you can apply artificial intelligence, you can apply deep neural networks anywhere you want on the sound processing. And the industry has been doing that for a very, very long time on scene classification. However, what we have done is we've taken the data in realized situations. We've created an algorithm, and we have created a dedicated chip and processor solely dedicated to solve this problem, the most difficult problem for hearing instruments. And that is speech and noise. And so we take that large deep neural network. We apply it on a dedicated chip dedicated to that purpose, and that's what leads to a 10 decibel signal to noise ratio improvement. So to put this in context, and I'm looking around the room, some of you, I know, some of you may have not. But I used to tune my radio, AM/FM, okay? You had a dial. You think about it, this is exactly what we're doing with deep neural networks. We're doing it millions of times, though, with our language model. We're fine-tuning based on those millions of sound instances to try and figure out what is speech that you want to listen to and what is noise. And so millions of these dials have been fine-tuned using our deep neural network to get that output. And that's fundamentally what leads to that 10 decibel signal to noise ratio. So to open it up a little bit more, this is how we've been able to do it, okay? We have a proprietary data with realized situations that we've been able to model. Then we've taken a specific algorithm that takes that data, converts it and fine tunes it, like we've outlined. And probably most importantly, we figured out a way to miniaturize it and actually put it on the hearing instrument, from a size perspective, from a processing perspective, and also from an energy perspective, not trivial to do. And so this is what we, from an engineering perspective, have viewed as the Holy Grail and there's still a lot of things that we can do, but this is the first step, and you can see that with a 10-decibel signal to noise ratio. I'm just going to emphasize this, we can talk bits and bites. We can talk chips and hearing instruments. At the end of the day, it comes down to people. It comes down to the organizations, both internally and externally. And I'll turn the time back over to Arnd to kind of walk us through that journey.

Thank you, Rob for the first deeper dive here. Before we get to all of the insights on the technology and whatever and more importantly, the customer benefits, Oliver Frank will guide us through, we wanted to put a somewhat unusual element in here, which is probably relevant for at least part of you as an investor, at least when you look from a long investment perspective. Because, yes, hopefully, we're convinced later that this is a big step. But then you sit there and wonder who are the ones who can do a big step over and over when it's required, right? So it comes the question, how do I manage technology breakthroughs, and we use the term, right? And a little bit is parallel, but from a different vantage point here, we want to share how we go about it. So that you be the judge if we are the people who can do this over and over again when it's required, right? Rob already talked about, you need to understand your customer. I think you need to have a clear vision on what your prime objective in life is, right? It ought to be customer focused and it ought to be still unmet need because breakthrough are to be measured in the words of the customer, it was a breakthrough on what I needed, not just the technology, which was complex and difficult, right? For us, that happens to be and has been for many, many decades that we see ourselves being enablers to help people enjoy the delight of hearing and live life without limitation. Now there's a power in that because our customers rally around it and our teams, which is important when you try to drive breakthroughs because they're not easy. It's also an important filter when you sit there at a point of time and need to decide, do I do a more risky project? Do I do it right now? Do I put my resources there? Or where else do I want to put them, right? So in that regard, it becomes one of the key elements in our conversations on where do we put the extra effort, which we can afford. Now some are with us for quite a while. Therefore, I allow myself to go a little bit on story over the next -- last 6 years, and we're sharing today a little bit more what was on our mind, which we couldn't share when you asked specific questions, right? And we heard your questions. They were not totally surprising. But if you go back 6 years ago, we're launching the Marvel, we get a little bit out of the hole with a B-Direct. And we talk all the time about an evolving innovation framework where historically hearing aid was the hearing performance and the confident fit. And we brought the connectivity, the tech stack grew. We then got because of the connectivity into the remote and whatever else, we have to do on applications level where even now in the world where we add some sensors for certain optimization, perhaps more on the future. So first picture on the left, the tech stack has grown, and you need to master every element of the tech stack. And by the way, they need to work with each other in real time when they need to operate in real time. So it gets more and more complex. Now at that point of time, which we didn't share as bluntly, we didn't say the wrong things when you asked, but we were a little bit focusing on the things we had to launch now. We also understood that if you ask a customer to follow Rob's guidance here on personal stories to the matter, my mom wears hearing aid since 15 years. Convinced her to take them because she didn't listen to the kids anymore. And so if I ask her today, she would say, as do other people who wear hearing aid since more than 10 years, they come a long way. On speech performance, [indiscernible] they are connectable, they are rechargeable, all these things, I can listen to music. The second sentence is, I don't hear as well as I'd like to. You can say that's a negative or positive. For me, it's a positive because there's work to be done, right? As long as the first sentence came, boy, they are so much better than 10 years ago. And I think that's why you see our market growing as much as everybody pushes on penetration, I understand. But the market is growing at 5%, some of that has to be penetration because the elderly population doesn't grow every year by 5% in the world, right? And we made strong progress, and you've seen in rechargeability, we have waterproofing and connectivity. But one thing was clear to us, if we think in terms of the core of driving signal to noise, we're sitting with beamforming on a technology which comes at age. Now you can improve it gradually, and that's what we did. You can invent new algorithms in addition to the ones you have, but the core technology doesn't really get you that much further. So that was our mental recognition 6 years ago. And it's depicted here from a breakthrough perspective, a little bit of a different chart than Rob used, the time line is about the same. If we would put breakthroughs as we call them internally, beam steering, beamforming was one, which gave us a curve, which was significant in the signal to noise ratio with all the technologies embedded in the hearing aid today, everything we've ever invented, it's about 6 dB and we're actually pretty high relative to others with the existing technology. And then, yes, we went on the connectivity and rechargeability, and I think they made big differences. But if you go back to the core functionality, separating the noise from what you want to hear in speech and that's still the most important. It is logical that beamforming every time you further improve, the lift becomes a little smaller, right? So we were out to figure out, and we were out not just in a day, but obviously, we do have our tentacles in the world, and we have capable people. We were out on what is that next thing, right? Go back 6 years ago, today, AI, everybody talks about it, although most of the talk, I think, is GenAI. Not necessarily we use AI to improve the consumer benefit on the core functionality. So you'll find a lot of GenAI, a lot of discussion by now is there too much hype for GenAI, I would say. But I would say if AI is your tool to get on the core benefit a big lift, that's big relative to GenAI. We do GenAI at Sonova, but that's a different kind of department and functionality. Here it's really deployed to what matters the most to the consumer. And yes, you need to think about capacity on chips and whatever. Now if you look at the picture on the bottom, I think we're in a great position because until we shared Infinio and Infinio Sphere, we had the Lumity, which was all the technologies, everybody knew. Now that is debate what's the better product and whatever. I would say we still on the last day before we launched Infinio, a great product, take one channel, which everybody gets published with the veterans affairs. They choose on audiological performance and technology. They don't worry about commercials, right? So we're coming in before the Infinio still at a high point from the performance of the Lumity. The Infinio built as the technology without Sphere is the next step on the existing technologies. We will share how relevant that is. They're very relevant. It doesn't give you a big lift in signal to noise, but the Infinio itself, we believe the best product except for the Sphere Infinio and the world, right? But then you have, call it, the turbo charger with Sphere, which is [ quad ] technology, which comes on top leverages everything which is in the Infinio and adds something on top, right? Now that was why we had to do it. I said I want to talk a little bit about how because you have to think about at least the people. First, obviously, you are interested in our greatest product, I understand. But ultimately, you also ask are these that people who continue to do these kind of things, right? So what does it take in our eyes to drive technological breakthroughs. I think started with a vision. It's more profound than just a vision, but you have a deep-rooted understanding of what's the evolving consumer need and comes elements of expertise in our eyes. The one is audiological, it's not easily replicated, and it's not the hearing care professionals who love them in the store, but it's more than 100 audiological experts we have, they are not in the store, work on innovation and R&D in the organization because you need to judge can you make work? What's relevant for the consumer? How do you embed it with all the other existing technologies? And then you get to the technology expertise, that's what we have already on the technology stack for user term plus all of the adjacencies, right? So you need to have scale. You also -- in order to have these capabilities developed, you need to have a history of successes. You also need to be amongst the ones who do, as a chosen strategy, invest into some forward-leaning technologies as we do, particularly on the microchip. You need to have the scouting on new technologies because one thing will happen if you need a new technology, which elevates the performance, it's not so likely that the people who work on the existing technologies will easily come up with that one, right? So you always need to have to finger out from a scouting perspective, there's academics, industry startup partners. And I would argue the next one is an important one, perhaps slightly overlooked. If you have such a complex tech stack, it happens in real time. Oliver will talk about the millions or billions of transactions, which happen on these devices in a second. Need to be able to integrate new technology in real time with everything happening already without reducing the performance of what you had before, right? So you really need a strong architecture and you need a strong technology in place. Last one is mindset on risk and the capacity to do it. So for me, I would be looking out for people do they have that, the technology evolves and you need to integrate more and more technology. So I think we have that in a very strong way. Now lifting a little bit of curtain not on the product, that's Oliver, but lifting a little bit of curtain on one little comment here, which we didn't share so far. I said you need to look on the outside, right? So sometimes you stand at a point as we did 6 years ago, and you say, if I want to build a new capability, and honestly speaking, 6 years ago, AI and deep neural networks, I did not understand this stuff. I still don't very well, but a little bit better by now, right? And it was pretty new. And even today, it's going to be hard if you -- and we have to because we now have DNN experts in-house. Do you want to recruit them? That's not easy, competing with Google and Apple and whatever. In Switzerland, in Zurich, we have a lot of Google people who are trying to grab the people from [indiscernible] right? We do too. So that's a little bit of a competitive environment on the labor market. But we had worked together with others. There's very few teams we knew in the world who already had started to use DNNs for speech enhancement in noisy environments, not necessarily as a target for hearing aids, but there's something to deploy DNNs to. That's the way DNN people go. They deploy it to whatever problem they find in the world. And one of them, we liked a lot. We thought these are the most progressed people, and we said probably 2 years were saving on the developing journey. So in that case, contrary to government belief, we don't just buy retail stores, we also may invest some capital in the right technology and the right team, most importantly, right? That was the start. Obviously, that's not making the whole trick. That's just getting you 2 years earlier on the curve on something you have to bid in scale and you need to develop as a competence. So 6 years later, we have 4 to 5x as many of that specific skill on the payroll than what we acquired at the beginning. We have them at two locations. One is in Berlin, one is in Stäfa. We have transferred a lot of knowledge. So I don't think this was all done by the outside. It was just the, let's say, starting point you needed. And they needed to be with their technology integrated deeply into the places which are our core competencies, but which are also required to develop a fully functioning hearing aid, including Sphere. It does require a different mindset on leadership, not just the colleagues in Berlin, we have the external chip partners. We have other partners on the whole [ grid ], so it becomes quite complex. But I think that's what you are after when you're in the world of open innovation. I think you have a network of different capabilities. Many of them are on the payroll. We would not go as deep in chip development as doing the work for the people of the NXPs and others but we have quite some competencies to guide us there. So it's a network, which we have expanded. But by now, I would say we are profoundly capable on the payroll and on the team to do DNN and AI in real time. Now last comment for the ones who are judging these kind of processes when companies come together, small and large. It does require some thinking from how do you approach and integration. Because if I would be an investor, I would be sitting there and saying, wait a second, I hear lots of people acquiring companies, putting money on the table, does it lead to results, right? And yes, there is some risk in an acquisition, but you want to have a high [indiscernible] rate, right? So it really comes down to if you have a group of a couple of people in the dock, which is the true case, and you combine this with us, but you need to bring our machine of developing hearing aids and chips together with a couple of people who come from a very different space in mind. We quickly agreed and Andy, our Head of R&D is in the room who was with me on the journey for the last 6 years. And [ Stef ], our head of Innovation, the other people who made it all work and also spotted the opportunity. It really comes down to a soft integration approach where you allow them to live in their world and due to the minimal phone integration, but you bring the teams together to have one objective and they were easily convinced that why they develop great technology, If they can get it on millions of hearing aids, that will be a dream for them, right? And on the other side, we were excited about learning DNN and making this a core technology and a core competence. You also need to over-resource these kind of projects. So there was a lot of handholding, not from the content, but from project management. We needed to take all of burden away from them at the beginning, over time, it gets more and more integrated. But I think that was an important one. And so if I think about it, a measure of success, one measure of success for this acquisition, we're actually on time. We would go back 6 years ago, we said it will take 6 years from here. The second one, little hidden secret. The dB we're able to show is higher than we thought, that's the beginning because this is a technology you can further improve. You've seen it was a curve, it wasn't a flat line, right? So in that regard in that the white paper worked out, I had the privilege to ask Peter, Peter and Elias who are the founders of this company just a couple of weeks ago, while we were all kind of almost launching. I said, help me understand how did the integration go. And Peter said, let me answer in a different way. Lots of people who were at the university with me who started AI companies, the ones that were acquired by Apple and Google, the products out. Once acquired by old economy, I think we're the only one launching a product, right? So in that regard, it's not easy to do this. And you heard Rob talking about the culture of innovation to open mind, hopefully, you see some flexibility in the approach as much as we're by now 18,000 people. But we always want to create the right frame in an integration or in a project we drive. But I think all of these elements, which need to come together to ultimately be at a place to say, very sure, at least today, for the first one who was able to bring real-time AI on a hearing aid fully functioning. With that, Oliver is up and gets to the even more interesting part, which is what does this thing do? And how does it compare? Oliver.

My name is Oliver Frank, and I'm the Vice President of Phonak Marketing. It is my distinct privilege to be able to show to you our groundbreaking new technology that we have just brought to the market. Now I've been in the company and in the industry for 17 years, in various different functions, in R&D, in product management, in sales and in marketing. And I think I believe truly that innovation, we have just launched, is the biggest innovation. It has the biggest impact to the consumers, to the customers, and I believe to the entire industry. . I'm going to present three different parts. First, I'm going to introduce you to our new platform that has significant improvements in four core areas for the consumer and the customer. Then I'm going to talk about the very specific value proposition that is built on top of this great foundation of our new platform, and it does address the core need of the consumers. And third, I want to share with you some impressions and reactions from customers. Now we do a lot of research surveys to find out what are the unmet consumer and customer needs. How can we better satisfy them? How can we delight them. People don't dream about wearing hearing aids, people dream about hearing perfectly, discretely, people dream about fully engaging in all moments of life. It all starts with sound quality. We do understand the impact that hearing loss has on people's life, on people's quality of life because the hearing loss is between listening and the interaction with the surrounding and people. So hearing loss has a profound impact, it breaks these interpersonal connections whether someone is whispering or whether there's any other important moment that you don't want to miss. So we need to deliver great sound quality and clear sound from the very first moment the hearing aid is turned on. We want people to be able to maintain and build the social networks, like Rob explained in his family gatherings. But we also have to acknowledge that social networks today are often virtual, remote, at the touch of a button instead of a touch of a hand. So in order to bridge to the digital universe of the consumers, we need easy-to-use and seamless connectivity that is stable and reliable. Now reliable connections, I mean, quality and excellence goes beyond reliable connections. There's an astounding dependency for people with hearing loss on the devices. If they don't have the devices, they're missing out on the delight of hearing. If they don't have the devices, maybe they have some repairs and service, that's a [ hassle ], it's waste of time and also often costs money to [ business ]. So we are dedicated and we are committed to take reliably to the next level in the industry. And let's not forget, people would like to forget about their hearing loss. They would like to forget about wearing hearing aids. So the solution, they really need to be seamlessly integrated. They need to feel like an extension of oneself. So we need to be able to personalize from that very first moment through sensing the environment, adjust the hearing aid in the right proper setting, to have the physical best coupling in the ear every step on the way. We have pushed the boundaries and we have made a dream come true. Let me introduce you to Infinio. [Presentation]

So these are the core pillars of Infinio. It's exceptional sound quality from the first moment, its market-leading connectivity taking a giant leap forward, it's quality that doesn't get in the way of life, and its personalization to really complement the consumers' personal needs. I'm going to talk about all these four pillars one by one. I'm going to explain to you how we've taken it to the next level and I'll also show you some evidence behind it. So exceptional sound quality from the very first moment. This is super crucial and how do we achieve that. It all starts with APD 3.0. This is the Phonak -- the Adaptive Phonak Digital. This is our pioneering audiological model, and I often refer to this [ X ] where the magic is happening because based on all the diagnostic information and all the counseling from the hearing care professional, there's all these parameters and adjustments that need to be done in the hearing aid to then deliver that perfect sound. We also have an AI Dome Proposer. Now Dome is one of the solutions that you put on the speaker of the hearing aid to couple into the ear. This is important for a good physical fit, but also for an audiological fit. So it's creating that best match between the diagnostic and the counseling to then couple it in the best possible way. What we've done is we've created an AI-based solution to propose the best possible match for any given consumer. That's based on thousands of hearing care professional data in real life, and we're now able to propose that to the hearing care professional as an easy step on their journey of counseling. Of course, it also comes with AutoSense OS. It's our sixth generation of the system that senses the environment all the time and continuously adapts to the listening environments and the consumers' needs in that situation. It comes with smart speech technology and a whole host of features, improving understanding, reducing listening effort and ultimately also reducing the fatigue. I guess you would all agree. First impressions really matter. Now how would the perfect experience for the consumer and the hearing care professional look like in terms of the fitting? How would that look like? Ideally, I think you walk into the fitting office, you have that perfect diagnostic done, you have the counseling done. And then without any adjustments in fine-tuning there afterwards, you start loving that sound when it's turned on, and every moment afterwards. This is what we achieved, and we have tested it with the leading competitor. And trust us, we always measure ourselves against the best in any given domain. So we've done a study to measure that first impression. We've taken first-time users, they have done all the diagnostics, all the counseling then adjusted the hearing instrument according to the manufacturer's prescription. So in our case, the APD, and the results, to be honest, have taken us by surprise because 93% of the consumers preferred the Infinio sound compared to the leading competitor. Now that means the hearing care professional has more time to focus on patient center care and doesn't have to do adjustments and fine-tuning afterwards. But what if the consumer leaves the office and they go on to live their lives. We were able to provide 21% less fatigue and 45% less listening effort. Now I want to talk specifically a little bit about the 45% because that's a brand-new hot off the press study that we published last week. And it's really an interesting way how we did that. You probably all experienced if someone is talking from another room, it's a bit more difficult to understand. It takes a little bit more effort. I've certainly experienced that myself. Well, sometimes, to be honest, if my wife is calling me and I hear it loud and clear, usually that means I'm in trouble. But we have been able to deliver 45% reduction of listening effort when all the features are turned on. We want people to be able to maintain and build those social connections. But social connections are not the only connections we're going to talk about today. We have taken market-leading universal connectivity, and we've taken it a giant leap forward. We have the universal connectivity that connects to all the Bluetooth devices. We are able to connect to two devices at the same time, and we want to swap it out for another one, we are able to pair to eight devices. So you all you have to do is connect the button and you don't have to do the pairing all the time. But why is it so important to be able to connect to two devices? So let's assume you're watching a Netflix whether that's on the TV or a tablet, but you also have connected your smartphone and someone is calling you. So either you will just quickly pause the Netflix or with a touch of a button, you can pick up that phone, you can engage in a phone conversation. And when you finish, you go back to watching that Netflix. It's all so seamless without any interruptions. We've also taken a giant leap forward in terms of the stability and reliability of the connections we can provide. We can provide twice the distance in terms of hands-free phone calling. And it's not necessarily the distance that's key, and I'm going to talk about that in a second. It's really that stability, whether the phone is in the pocket, where there's any objects in the way, we have an uninterrupted connectivity also in hands-free phone calls, and it's so ultra responsive. Let's take another example. I'm listening to music, streaming into my hearing aids. If someone approaches me from the side, and this may sound like a very little detail, but I can assure you it really matters to the consumers. If someone approaches me to the side, I can quickly pause the music stream and without missing the moment, I can engage in that conversation. That wasn't possible before. So this is really without any word slipping by. Infinio is powered by the all-new ERA chip. This is what enables the great sound quality and stable connectivity. We are able to connect to all Bluetooth devices in a really stable and seamless way. We are able to do that so instantly. We can reboot and connect to a smartphone 3 times in a time it took us with Lumity. This is all enabled by 6x the transmission power that really provides that stable and smooth connection all the time. We want to be able to offer really seamless solutions that connect to the entire digital universe for the consumers. That's today. But when tomorrow comes, when Auracast becomes part of the consumers' lives, ERA is compatible to Auracast. So ERA is a true multi-talent. It has Bluetooth low energy to do remote controlling, whether it's from a physical device or from the app for target fitting adjustments. It's Bluetooth classic to be compatible to all Bluetooth phones, including TVs, if they support that. If not, we have a specific protocol that's optimized for that air stream technology with a TV solution. We have Binaural VoiceStream Technology that exchange the audio between the two microphones to create a more narrow beam when the user needs it. We have Roger Technology to really create a seamless solution with Roger Inside and is Auracast-ready. Now we've taken it to the test, and I referred to it before, there's more distance. We wanted to test the stability and the seamless and reliable connectivity that we had. So we created a test that is fair and reproducible compared to competitive devices. So we used the distance that hearing aid can connect to a smartphone as a proxy to measure how good the connectivity and stability is. You can see at the top, it's comparison to Android phones. You can see the Infinio device. It's about 1.5x more distance that it can cover with a seamless and stable connection. And with the Apple, it is even up to 2.5x a difference. When we ask hearing care professionals about what are the choice drivers, what really matters in terms of what product they use, reliability consistently scores very high. So we are committed to take and lead the industry to the next level in terms of reliability. We do that by focusing on the entire ecosystem, whether that's connectivity, whether that's charging, whether that's the ecosystem with the apps, whether that's the design that is really tested and proven to withstand everyday challenges. We are testing our system beyond IP68. IP, that's the industry standard for ingress protection. So the 5 is the dust and the -- sorry, the 6 is the dust and the 8 is the water, but that's not good enough for us. We are testing beyond that. Now we have, I would say, the industry standard in terms of reliability out there. We've Lumity life. That's a specific product we have in the Lumity platform that is really considered the golden standard. We've taken all that learnings and we are now applying that in the third generation with all the improvements as a standard offering in the Infinio range. This ultimately means less hassle, less time spent on service and repair and the hearing care professional can really focus on that patient center care. We have tested our devices 10,000 hours with what we call torture tests because we don't want to spare our devices any pain. Obviously, we want to spare that to the consumers and customers. And we have tested them in 135 different tests. Now what does 10,000 hours of testing mean? If you take an average consumer 13 to 14 hours wearing time a day, 10,000 hours means there's 2 years of continuously testing the devices on a patient's ear. And again, this is to provide longevity, durability and reliability that really withstands the challenges of life. Infinio is personalized in so many ways. As the AI Dome Proposer, as I mentioned, there's the acoustical perfect fit, the physical perfect fit. Whether that's changing the adjustments in the ear, whether that's fine-tuning in target, whether that's sensing the environment all the time to really make sure the acoustical environment is considered, the intention of the listener is there. All those things are taken into account. But there's also the Swiss precision Biometric Calibration. That takes 1,600 data points from ear impressions or from ear scans to really create that perfect physical fit, that customization, whether that's an ITE or whether that's a rig coupling. And you heard right, custom ITE because Infinio is also available as a custom ITE. So we are offering a really seamless charging solution with Virto R. It's our first rechargeable ITE and really, if you put it into the place, the snap and charge, sucks it into the right place and charges, it's so easy to use. And don't forget, it's the first Virto that's rechargeable. It's the first Virto with an accelerometer. It's the first Virto smart speech technology. It's the first Virto with touch control. So I believe every IT user out there, if they get to wear a Virto, they will really see the difference. So Infinio is enabled and powered by ERA. All of this is Infinio. It's the Virto rechargeable. It's the cross for unilateral hearing loss, comes with an extended battery life, 16 hours or more and it's [ DODOR ]. All of this is based on our four core pillars, which is incredible sound, unmatched connectivity, quality that withstands the challenges of life and personalization to complement the consumers' personal needs. [Presentation]

So this is Infinio but maybe you remember when Rob presented the pyramid that was the vision on top. That was the fifth pillar, right? That was the fifth core need for the consumer and not just any core need. The most important need for the consumer speech understanding in noise. So this is the family gathers, as Rob described, or any other situation when you're in a loud environment, in a restaurant with music going on, this is where the consumers still struggle the most today. So in our pursuit of the vision, a vision where there's a world where everyone enjoys the delight of hearing without any limitations. We knew the technology we're chasing. We knew what the #1 consumer need is, speech understanding in noise. It always has been. But there's also plateaus that we saw in terms of the technology and the capabilities. So we had to dream bigger. We had to think beyond directional microphones and beyond beamformer technology. But before we go into too much details, I just want to recap a little bit what's really the job of a hearing instrument. There's two aspects that the hearing instrument really needs to do. The first job is to classify the sound environment the consumer is in. Whether that's listening to music, whether that's a two-way conversation, whether that's relaxing, whether that's some conversation in a very loud environment. Depending on that situation, the hearing aid has to do different signal processing strategies. And some competitors have started to use DNN as a technology in the classification and to do some sound parameter steering. We have 24 years of experience with AutoSense OS and AI and I would say classification is a pretty well solved problem today. The core #1 need for consumers is understanding in noise. What if it could apply a paradigm shift, a different thinking in tackling that problem? What if you comply large-scale DNN to the actual sound processing, so when the sound comes in, then we can separate the unwanted noise from the wanted sound? So we did dream big because we knew there are plateaus and we didn't want to be faced with incremental benefits from then onwards. As Arnd and Rob explained, there were really two events in the history. In 1994, Phonak introduced the first dual microphone system, which gave us the capability over time to increase to 3 dB signal to noise ratio. And when we introduced a 4-microphone system where the 2 audios were connected between the 2 microphones in both ears, we were able to create an even more narrow beam for when the user needs it. But don't worry, we're not going to come up with 8 microphones because we have really started to dream about large-scale DNN to solve their problem. What we could lift it to 10 dB? And let's not forget but if you could lift it to 10 dB, but not only in the narrow beam but from any direction. So this is what we were dreaming and this is what we set out to do. You probably all have been on video conference calls in the past. In Sonova, we use Teams and I probably have spent too much time on Teams calls. You've probably all experienced a situation where it was really noisy around you, whether there's a loan mower going on or kids playing in the background, particularly during COVID times. I think we've all been there. I felt sometimes almost a bit embarrassed because I thought the other end will not be able to hear me very well. But it turned down to say, no, I don't hear any noise. And that's because there were really powerful DNN algorithms that run on these really powerful computers. So we're like, well, let's just do that in hearing instruments. Obviously, it turned out not so easy. There are a few obstacles we had to overcome. So here, we have depicted a small neural network. You can see the notes that are the [ neurons ] and the connections between them. If you have a simple neural net, [ there's ] so much complexity in a problem you can solve. To really separate speech from noise, we knew we needed large-scale DNNs, and trust me, the number of neural connections that would not be possible to show in this picture because it's millions. We knew we need 10x more neural connections than any chip that was available on the market. And in order to be able to handle all those neural connections, it's like in the brain, you need memory to be able to store and save and process that data. So we needed 20x the memory compared to any chip available on the market. And obviously, we're not in a position to put a backpack with a computer on the consumers back in order to handle all that processing power that's needed. The efficiency and the energy that Rob also alluded to, we knew we needed 4x better efficiency in terms of energy management compared to any chip available on the market. And there is a need for speed because you have all that sound coming in. You have the millions of neural connections that you need to process and then there's the sound coming out. We wanted to separate the wanted sound from the unwanted noise in real time all the time. So that's the need for speed, and we knew we needed 50x the processing power in order to be able to handle that. Sometimes, dreams are closer than they seem. We have designed and developed our own proprietary chip. We call it DEEPSONIC. DEEPSONIC is able to create the speech clarity that we were dreaming of. We are able to fulfill that need for speed with 53x the processing power, we have 22 million sound samples. Now if you have a simple neural net, you can have as many sound sample as you want. You're not going to be able to solve the problem, but because we have 4.5 million neural connections, the 22 million sound samples from different languages, different environments where we have really trained the system to separate the wanted sound from the unwanted sound. And the system is fulfilling that need for speed with 7.7 billion operations per second. So that's billion with a B. I think that's incomprehensible. That's such a large number, but it is needed to do this in real time and all the time. So we call this technology Spheric Speech Clarity. We are able to provide 10 dB of signal to noise ratio. That's the benefit that the consumer is getting. But what -- how does that translate really in consumer benefit. It means the consumer is able to understand is more likely to understand 2 to 3x every word from any direction compared to any solution out there today. [Presentation]

So Audéo Sphere is really a paradigm shift in technology, and I believe it's a true inflection point in our industry. With Audéo Sphere, we have used the DEEPSONIC chip in addition to ERA in addition to the already great Infinio platform. So there's two chips and one of them is dedicated only for this one problem, the most important problem for the consumers today, which is understanding speech in noise. I want to share with you some clinical data and objective measurements. Here, you can see how in the evolution over time from the 3 dB on the left side to the 6 dB, the plateau we mentioned before with Stereo Zoom, we're now able to break through that and really transcend the limits of hearing care to 10 dB and from any direction. Now we also obviously wanted to compare two competitors. You can see at the bottom, in green, that's the Sphere Infinio, and it clearly outperforms the competitors. Two of them have AI and DNN in there and one doesn't, and don't even think that the one without is at the top. We are able to provide 50% more access to [indiscernible] than any of the competitors. And we are able to do that, not only from a specific direction, from any direction instantly and all the time. Now in addition to the objective measurements, we also wanted to hear from consumers subjectively on what they think about Sphere. You can see here depicted the four dimension we have asked them when we had them in speech in loud environments in two-way conversations. We ask them for speech clarity, speech naturalness, speech and noise separation and overall satisfaction. Now if you're not used by now that Phonak and Sphere is green, I think you would easily pick and say green is clearly outperforming the others. If you have a more closer look on the second dimension on the left, the speech naturalness, I think you could be mistaken and say, well, there's one competitor who is almost as good, but it turns out is the outliers at the top but also outliers at the bottom. And if you look at the X that marks here the mean or the average performance, Sphere also clearly outperforms in this dimension. So this really translates in a consumer benefit, which means the consumer is 2 to 3x more likely to understand every word from any direction, and we have scientific data to prove against two competitors, but trust me, because it's such a paradigm shift, this is compared to any solution out there in the market. We have a lot of evidence. We have a lot of studies, but this is just a starting point. There's a lot of studies on its way. We will be able to provide much, much more going forward, but we've only launched the product two weeks ago. So Infinio is based on the four core pillars of incredible sound, unmatched connectivity, quality that doesn't get in the way and the level of personalization so that really complements the consumers' personal needs. And now we have added the fifth and most important dimension for the consumer, which is to provide speech clarity in noisy environments. I want to share with you a few expressions -- impressions from the launch, and we were thinking about what's a good location, what's a great venue to be able to take this revolutionary product and match the level of magnitude, the level of impact it has on consumers, customers, and the industry. I could not think of a better place than the Sphere in Las Vegas. Sphere stands 157 meters high, and it was the perfect location to unveil to the world this groundbreaking technology. But it was also really good because we could project on the outside the awareness and raise awareness on hearing instruments and hearing care in general. We've been overwhelmed with the reactions. We have 20-plus industry journalists, and we have reached more than 100 million really overwhelmingly positive sentiments. We have 12x the reach compared to previous launches. So we've really taken not by surprise, I think that wouldn't be fair, but we were overwhelmed. But let's hear what customers had to say after the event and after they had a chance to listen to Infinio. [Presentation]

We've also done customer surveys at the event, and I'm going to share with you three data points. And don't worry, I didn't pick the best ones because I can assure you the worst data point was 97%. So we have really broken all the internal records. But I wanted to share with you the ones that I feel like are the most meaningful ones. 98% of the respondents said that Phonak Infinio is going to change the lives of their patients. 97% agreed that Sphere is a strong competitive advantage. And every one of the 104 respondents said it is significantly forward in innovation. We have a saying, hearing is believing, because we want to be able to really convey that benefit in terms of hearing it right. So I'm going to play a little sound sample. It's a recording that was processed with Spheric Speech Technology. And I'm also happy to use the opportunity to express how grateful I am for Paul Gilbert. He is a true rock star quite literally from the Mr. Big, band and he's one of our Phonak ambassadors, and he really helps us to create awareness and raise the awareness for hearing care in general. [Presentation]

So with Infinio we have launched our broadest portfolio today in Phonak to really cater for the variety of consumer needs out there. We have Audéo Sphere, we have Audéo R, we have CROS. We have Virto Rechargeable, Virto Titanium and Virto 10. We refused to accept that people with hearing loss start to feel like the life is smaller. And I use a quote from Paul Gilbert when he said, social connections, that's for him the requirement of life. So we will keep pushing the boundaries and use this inflection point to further increase the benefits going forward. But before I leave you, I want to share a very quick anecdote from when we launched this product internally in Helsinki a few months ago. In the evening, we had a party to celebrate because we knew this is a true watershed moment. And Jennifer approach me and Jennifer has a hearing loss, severe to profound hearing loss and she had the chance to test and wear the Phonak Audéo Sphere for a while. And so as the party went on, the music was loud, everyone was talking at the same time. We had a quick chitchat. And within 2 minutes, 3 times I had to really [ live in ] and go, sorry, what did you say? The third time she went jokes on you, my friend, because she literally was able to understand better than me. That really made my day then. Thank you very much.

So we will now go to the first Q&A session. Can I ask the presenters, please to come up to the stage. [Operator Instructions]

This is Maia from Kepler Cheuvreux. I have three questions, if I may. You show some remarkable advancements with Sphere. It seems to have a real impact on patients' life. Therefore, my question, why are you going with two different models? Why the Infinio and why holding it back if it has such a big impact on consumer lives? Are you going to use the Sphere to managed care and VA? And my last question is I'm fully aware of the fact that you're not going to give us any numbers, but could you give us any indications on the gross margin between the different products?

I'll take the first one. So when we talk about innovation, our goal is to have people enjoy the delight of hearing. And in this case, we developed both platforms simultaneously. And we decided that we wanted to offer all the technology that we could. Now obviously, to your third question, it cost us a lot of money to develop this. Arnd talked about the acquisition. So part of what we need to do from a positioning standpoint across different geographies is we need to make sure we have the latest and greatest technology at the right price points. And so that's why we've decided to launch our largest -- one of our largest platform launches in history, including multiple [ form ] factors at different price points. So if you think about it from a marketing strategy standpoint, it's a [ pincer ] move, where you have versus the competition, the latest and greatest across different technology levels, including the ERA chip and including the DEEPSONIC chip. So it offers a broader solution with the latest innovation to the broader group. Do you want to take the second one?

Add one to the first one. When you see the devices, actually, the Sphere is a little bit larger and some people would say it's more larger, right? So we're also not so sure where the tie ratio falls out because, yes, you have a benefit in the mild to moderate, but it's also more profound for the severe to profound, right? So in that regard, rather than saying the one has some downsides, but strong upsides. We only bet on that one. I think it was a trade-off to be made. And I think the tie ratio will show, obviously, with different price points.

Let me just clarify because geographically, there are different end consumer needs, okay? So one of the things and I'll give you a real-time update after 2 weeks of user feedback. We do find in certain geographies, size is a bigger need than other geographies. Interestingly enough, as we've seen in the initial results out of the U.S., the benefit of [ Sphere ] Speech Recognition greatly outweighs the size. So we'll see how that goes across different geographies. But we do expect in certain geographies, size will be a different parameter versus the U.S. as an example where size matters less. So on the second question, do you want to answer?

I take the second one because we had more discussions on managed care with many of you in the room with me. I think first, I think managed care is a relevant meaningful channel and in that we got customer [indiscernible] with regard to helping to drive more people getting hearing aids. I think it had a clear impact on penetration in the United States of America. . I think also you need to see there are different managed programs at different price points, very high-value contracts depending on what type of insurance you have. And by the way, who your managed care provider is. So I think it's not as black and white. I think we want to serve the customer and through the customer, the consumer. On the other hand, I think clearly, we position particularly the Sphere Technology, at a different price point, also in the conversation with managed care partners. And so ultimately, it's on them to decide in which of the contracts they have, at which price levels in the formulary to use the term, they want to use ultimately that kind of technology. But we're not in a position to holding people back from getting technology if they deem to do so. Probably another comment to be made, right? But in general, I think we like the channel, but I think they need to think through where is this the right device at the price point we can offer versus other devices. The last one on the margin side. I think the costs are high ultimately with a [ third ship ]. In addition to that, I think, significant additional investment over the last couple of years. But I think the price premium at the end and probably also it being skewed more to the higher end of the performance factors will weigh that out, that will be our read at this point of time.

[ Marco ] here from Barclays. I just had one question on the VA. Again, just to reiterate what you said, seems to be an impressive launch with the new chip offering some meaningful benefits. If you were to compare this launch versus your prior launches such as going all the way back to Marvel, to Paradise, to Lumity. How should we think about the ramp-up in technological advancements you expect in this one versus in the past in terms of share gains in the VA. Should we expect something more similar in line with the Marvel launch, which was a highly successful launch in the VA and more broadly? Or should we expect something more similar towards maybe a Lumity or a Paradise?

I think the first comment would be, you may be careful when you just take the increase and you need to compare what your run rate before was, right? Because the Marvel came on the back of the B-Direct and on the B-Direct, we made -- we said that at the time [indiscernible] a mistake, we defeatured on the speech enhancement because we wanted to get the MFA in. Right? And so there was a big pushback, particularly from audiologically performance-sensitive customers, VA, and I think we went down to 25% market share in VA. So from 25% to 50 % is also 25%, but it's based against a level we never had before. And I think people were super happy that the Marvel showed, we still believe in audiological performance. So just a background on the Marvel side. I think there is there is -- with good technology and upside, there is a limitation to the market share you can get if you have very convinced audiologists and very convinced also patients and consumers. So I don't think we're in a good position to share what percentage because we don't even know exactly. But I think, yes, it is well recognized that this is a channel which likes better hearing and VA tends to be more on the severely profound side from the average patient base.

Urs Kunz from Research Partners. I've a question on battery consumption. If Spheric Speech Clarity is on all the time, how long will the battery last? And then is that not some drawback? Or is there an automatic process that put it on and off, so I don't lose too much energy?

So the Sphere is designed to last for 16 hours a day. And in those 16 hours, you can do 5 hours of streaming. You can do 3 hours of being in the loudest environments where you really need that boost that the DEEPSONIC is providing. And we usually -- when we do the specs and the claims around that we use -- we do these claims for years of use. So the 16 hours is really a conservative number and it is going to be enough for most users for most of the times. And if you do need an extra charge, you can charge it for like 15 minutes and then you get another 3 to 6 hours of battery life. So we don't see that the battery life is going to be very restrictive at all.

And 2 additional comments to put that in perspective. When you analyze user behavior, which we can because every hearing aid, which gets back to an audiologist, we can read out what kind of environments and profiles were chosen. The 3 hours is the vast, vast majority, so well above 95% of what people have as their normal time in noisy environments. The other one to your question, it switches out automatically so that you're not having 5 hours of deep neural network and then you can't have hearing for the last 3 hours in the day. So there's a control mechanism.

Julien Ouaddour from BofA. The first question, can you help us to -- I mean, have a clear idea, what's the split do you expect between the classic Infinio and the classic Sphere, I mean, just like for the recruitable form factor? Then do we have any update from Costco? Maybe you were a bit more constructive on the full year results and you have a new tech now. So could you envisage to put it in Costco? And third question about the DNN. I mean some of your competitors, they have already the third version of [indiscernible] technology, you have real-time AI. But I mean, like does it matter the way you train the device? And if it does, I mean, where are you -- I mean why are you different versus them? And also how long it would take for them to catch up?

All right. So why don't I take the split from a product perspective and then we can decide how we break the rest up. So our original assumption going into this based on end-user data was that we were going to have about 30% Sphere and 70% Infinio based on the previous question about positioning and from a pricing perspective. It has been the inverse of that as we've launched in the U.S. So we'll see what steady state is. But the demand on Sphere has been significantly more than we anticipated with our initial market research. We'll see how that plays out across different geographies. Obviously, you have to remember, the U.S. is at higher tech levels as a proportion other geographies sell lower tech levels. So that answers part of the previous question, too. So we'll see how it plays out, but we're using real-time market research to make sure that we're allocating appropriately.

So just briefly on the large customer in the United States of America. So no update. Nothing has changed relative to what I said 2 or 3 months ago. We are respectful with each other. And I think there's a good case to be made that eventually, we come together in some shape or form. I think to your specific question with regard to the technology like Infinio and Sphere, I think on these kind of customer relationships, which are, to a degree, strategic, I don't think it's a matter of one product cycle. I think at the end of the day, I would be looking from the other side, this is a credible company, which can continue to evolve the technology. Are they serving me well? Do I feel they have good reliability and elements like that? So in that regard, I don't think one particular product launch changes is dramatic. I think it's really more the experience they have and had with us, which will make a difference there. There was one more question, right?

[indiscernible]

Do you want to take the last part of that question? You have a good 2 to 3 years?

We expect competition at some point. They have not disclosed the level of detail that we have just disclosed and we've tried to keep it somewhat confidential at this point. Obviously, we're opening that up to you guys to see. But it takes a long time to get data. It takes a long time to get the right data. It takes a whole lot of time to figure out how you can miniaturize that and it takes a whole lot of time to create a dedicated chip to do that. So...

I think if you hear AI, obviously, you can deploy AI to many things. But as we were laying out, if you want to put it into the full stream of the signal, that was what Rob showed. You need to pipe every piece of the signal in real time through not some adjustment or a little bit or I train the profile and whatever. And I don't want to be disrespectful on any shape or form, just trying to explain the technical issue, then you're going to get to the size of a chip we needed, right? So that's your first requirement. Secondarily, and that chip technology, if you need to do proprietary, we haven't seen anything on the market, which can do this, and it's as small as we need and the battery needs. So we had to go proprietary. So chip, 4 years, CMOS technology has never changed, always 4 years and then you need another year to 2 to specify what you need in the chip, right? So that was our 6 years, right? And we're reasonably fast, right? We don't know if anyone has started, but we know with the technology currently in the market, there is no such chip, which is any where commercially available on those devices. On training of the DNN, yes, in addition parallel to the chip, as I said, they were on the journey for 2 years to work before we got together on how do you optimize DNNs and then you have massive training of the DNN network to ultimately get it to the performance in the low energy consumption. So I think there's another work stream which needs to happen in parallel, you need to add scale train the DNN, right? So you can do that. Keep in mind, no matter if somebody is closer or not so close, we have a pathway to continue to evolve our technology because we didn't stop training the DNN. It still gets trained every day, right? So in 2 years, you're going to see one which is more performant and may do a couple of other tricks. So we're feeling good right now.

It's Graham Doyle from UBS. I just ask a couple. Firstly, on the launch strategy itself. So sort of a follow-up. You've obviously gone with 2 platforms. Have you had a decision like this to make before where you could have gone with 2 platforms and you chose not to? And the feedback we got from the Vegas launch was super enthusiastic about speech and noise and super enthusiastic with the Sphere. But is there a risk then we think of going back to that sort of size and battery potential limitations in certain markets? Is there a risk that people aren't as well versed in the benefits of the more classic platform? And then just one on manufacturing would be good to get an understanding as to how this is different from what you've done in the past. So what are the challenges? Or are there that many more challenges for producing a second platform?

Let me cover the -- was there one and then I can hand over for the second part. I'm not aware trying to see [ Andi ] is not is the longest on the journey. He agrees. We didn't have a situation like that. It comes from we clearly developed at full speed, our normal 2-year cycle, that's Infinio and if you wouldn't have Sphere, Infinio's a great product, by the way, right? And you could see there's another chip in there, which was needed on the connectivity and take the connectivity to the next level. But because -- and we started with the artificial intelligence, we didn't know are we going to hit the time line. We were not busy with trying to plan at that point of time what lands when, right? So in that regard, we never had 2 work streams like the regular product development and this extra project in [indiscernible]. So we didn't have a decision to take like this. We clearly took the decision that when it's ready, we want to have it out there, right? And therefore, it becomes a little bit more complex launch strategy. I think from the discussions I had with some audiologists in Las Vegas after they had their day with all the engagement with the device, I heard them already playing in their mind what consumer are going to -- am I going to go with Infinio? Where do I go within Infinio Sphere? What's their need from a hearing loss perspective, what's their affordability side, right? So I think while we don't know all the answers in the sum of the parts, there's very clear segments where you go with one versus the other.

Yes, 2 parts. Number one, we're super proud of Infinio. If you look at what it does with connectivity, if you look at what we've done with reliability and if you look at that first performance that Oliver talked about, it's a dang-good platform. And so we're super proud of it and we want to market it. And so specifically on your supply question, obviously, I shared the data of what we anticipated. And obviously, it's very different. So we have had to make some trade-off decisions on what we manufacture and win and obviously, we're needed to manufacture more Spheres than Infinio at current state. But we're trying to be entrepreneurial. We're trying to use real data and sometimes you have a hypothesis based on end consumer research that you do, but it turns out to be differently and we're being agile in how we approach that.

It's Sandra from Octavian. I have a follow-up question on the Audeo Infineo. So how does this look like in terms of speech intelligibility compared to competitors? You showed some very nice data on Slide 59 where you compare Audeo Sphere with competitors, where on that graphic would Audéo Infineo end up?

So when we measure Lumity against competitors, we can see in terms of speech understanding with the 6.4 dB that we showed there, we are -- I would say, in a humble way, we are certainly on par, we are leading in some dimensions compared to competitors. And so the Infinio in terms of the speech understanding has not been a major step forward. The major steps were really on sound quality. But sometimes it's also difficult to separate what speech understanding in noise versus sound quality. So we have people who have been wearing Sphere, and they come back and they're really, really excited and they describe, for example, well, I can hear now if someone is walking behind me, I couldn't hear that before. That's not a Sphere, that's Infinio. So there's a lot of little nuances that Infinio has improved in terms of sound performance that is not related to the Sphere. So then the Sphere is really on top of that.

But I think it's fair to say if we would have only shown you today Infinio and would have shown the data, it would be ahead of others in the sound performance and at the first time fit probably equal to the best or slightly better. So it would be similar to a launch as you would have probably put in the Paradise or so just from the lift you got. It was a full project with everything we can optimize on the different elements. We had 2 different teams.

Daniel Jelovcan at ZKB. First question about the chipset size. I mean your old one was 65 nanometers, I think. I mean does it really matter? Or I mean your peers were mostly around 25, 28 to my knowledge. So where are you now with Era? That's the first question.

So the Era, I think, is on 65 -- 40 excuse me, and on the DEEPSONIC, we are on 16. But I think your question is the right, does it really matter? I think when we looked at energy consumption, that power management, battery consumption. At the end of the day, reduction in size, reduction in nanometers obviously helps a lot to also reduce that. So the energy efficiency is greater if you have smaller nanometers. It's also a reduction in size physically, but it also unlocks power efficiency improvements.

Yes. You have another benefit, which plays out there when you look at the different node sizes. If you have a lot of AI to do, you're better off at that level, if you don't have unlimited capacity, that wouldn't matter anymore. But if you're at that level where you're kind of at the cusp, you want to have dedicated AI because there is different architectural ways to how you put your transistors together and whatever else. So I think there's an incremental boost in there because it's a dedicated AI chip, even if the node size is 16.

And maybe if I can just add, I think on the DEEPSONIC, it's the size reduction and all the neural connections and all that, but it's also really the chip architecture, which we don't really emphasize enough, I think. But that's really also a key to bring this technology to life. And I think we had 1,000 different architectures and models tested to get this DNN in a high-performing mode. So there's a lot of work behind the scenes that also really matters.

And the second question, this connection stability, why is it so much different between Android and iOS, I guess it's because of maybe limitation of Apple or I don't know?

So we have tested with the Androids. And on the Androids, I think most of them are running on Bluetooth LE or on the ASHA protocols. The protocols are different between the Android implementation if you also look at the level of compatibility that hearing aids have with Android phones. If you don't have the Bluetooth Classic, the universal connectivity, as we have, you're limited in terms of what phones you are compatible. So there's different protocols to the question you asked, which also has a different performance. On the Apples, it's the MFI. So there's a different protocol and has different pros and cons. And with the Bluetooth Classic with our proprietary implementation, we are -- thanks to 6x more transmission power, we're now even getting it to a more stable and more easy-to-use connectivity than before.

So Steven Sanders, Sanders Capital. So it strikes me once in a long while. You have a chance to really create a patent barrier, not just the CMOS barrier, not just a CapEx barrier. And in this particular technology, you've innovated at the DNN architectural level. You've innovated at the silicon level tied to that, right? You have this audio quality estimate or DNN on top of that, which is quite a powerful piece of work. So are we underestimating the degree to which there is a patent barrier that can be assembled in addition to the 6 years of R&D? And then the second piece is on comfort, which is an important metric for Sphere. Clearly, we've done studies, we've tried to see, can we really discern a difference? Does it matter to the consumer, to what degree? And we feel confident that the comfort is something that people will say, gee, the trade-off is worth it, that I feel good about it.

So I think you can take a look at our publications, and you can see where our IP portfolio is. There's also things that you also don't put under intellectual property protection, right? And you keep proprietary. And we've got a combination of both of those is how I would frame it. You want to take the second question? You're talking about sound quality. That's what your question is specifically on first-fit performance. Oliver, do you want to take since you have the data on it.

Sorry, can you repeat the question?

It was on both comfort for sound fit, but also on comfort in terms of actual coupling against the ear mechanically because this is a heavier device. So to what degree do we feel that we've surmounted that the trade-off is tracked?

Yes. So to come from more on the physical side, I mean we have tested this product with a lot of consumers. We have a lot of clinical data and quite honestly, we have not come across any objection in terms of it's not comfortable. If you look at it on the table or in your hands, it is bigger, you will be able to see it afterwards as well. But when you put it behind your ears, and I'm wearing glasses, I've also tested Sphere many hours in my life over the last 12 months, it's not a noticeable difference.

I think it's fair to say the rigs have come to where you even get people arguing that too small, at least for the dexterity, I'm not trying to now sell the larger size, right? But on the rig, even for the heavy ones, you don't hear comfort. And keep in mind, the BT is a lot larger, right? So yes, it's larger than the regular rig, but we wouldn't expect comfort being a topic at all. It's really more if somebody from an aesthetic perspective puts them next to each other and say aesthetics really important to me.

What we find just being very specific we do customer research, and we do end consumer research. What's really interesting is we find and maybe it's because as an industry, we pushed size so much, the hearing care professional cares more about size sometimes than the end consumer, right? Because once you put it on your ear, you're not going to notice the difference. That hearing care professional, you're going to do a side-by-side comparison, you say, oh, they're going to push the smaller size. There is some initial -- you can look at YouTube, you can see what people are saying about it after the initial launch. At least in the U.S., it seems to be less of a concern than we anticipated.

We have time for probably 1 or 2 more questions, if there are any, or if you're all very hungry, then we'll start a little early. Any last questions?

I would encourage you when you have a chance to do the listening demo, it's very -- obviously, we have a lot of data and whatever we have a saying here, which says hearing is believing. So we have it for you if you find the time. It's more impressive than what we can be -- we were able to show on the screen, so take advantage of that. Thank you, everyone.

Thank you. And for those on the webcast, we will be back at 2:45. [Break]

Hello, good afternoon, and welcome to the second part of our Capital Markets Day. So I hope that you had a really great lunch and that you were able to experience the product demo and also talk to our experts. If you haven't done so and you are not going on the factory tour, you still have the chance to experience a product demo after these presentations. So now it's my pleasure to introduce Oliver Lux to you. He is our Global Vice President for Audiological Care. And then after, we will continue with the Sonova X business systems and all the benefits that this program or this actually generates for Sonova, and that will be presented by Lilika Beck, who is our new Global Vice President for the Consumer Hearing business and together with Arnd and also Ludger Althoff, they will give great insights in what we have to show you. Okay. So Oliver, the floor is yours.

Thank you, Birgit. Welcome, everybody, back from the lunch break also from my end. I hope you had the chance to really try out our new product range, and I hope the sparkle also landed on your side, exciting you to see what upsides we are able to provide to our customers. Over the next half hour or so, I will share 3 topics with you. We will dive a bit into the global Audiological Care strategy and recap on this. We will dive into the German market and see what we did there over the last couple of years to win a market leadership position and then distill out of that a bit what we learned for the global business of Audiological Care. Before I dive into content, allow me to briefly introduce myself as I'm in this new role for the first time with you. Birgit said it already. I'm the new Global Vice President for the Global Audiological Care business of Sonova. I started in that role about 3 months ago, taking over from Christophe Fond. I have been with Sonova for around 13 years in different roles and capacities on global roles such as M&A and strategy, but predominantly over that time in general management positions, leading some of our markets in Europe, in the U.S., et cetera, but also in regional management roles overseeing a couple of markets; also in Europe, in Latin America, but also in Asia Pacific, including China. The last role I had was overseeing our German retail organization under the GEERS brand for the last 2 years before I started in the GVP role about 3 months ago. That said, let's dive into Audiological Care, just to recap who we are. We are running one of the largest networks in our industry, about 3,700 stores, a bit north of this with 10,500 highly skilled individuals, about 8,000 of which are working on store level and more than 6,000 of which are audiologists and hearing health care professionals, what we call HCPs. We are operating in 20 markets across the globe, and we are providing in all those markets best-in-class services and expertise with the technologically most advanced products such as the ones that you saw this morning. We are running different brands across markets that we are increasingly harmonizing in terms of positioning, but also in terms of brand alignment. We are growing the network through organic growth, including greenfield openings, but also selected M&A. We're looking a bit into the trends of the hearing health care market. And if we look into the customers, then we can see two things. On one hand, there is a growing number of individuals growing into our cohort out of demographics. In most of the industrial markets, about 1/3 of the population in a couple of years will be 60-plus. And those individuals, the baby boomers, senior citizens, they come into our cohort of potential customers with different backgrounds. They are more savvy in digital. They are active on social media. There is an active lifestyle and well-being and health care is a very important topic in those individuals' lives. This leads to an opportunity to differentiate in the marketplace through medicalized services and offers around medicalized products for that cohort. Cost-effective marketing and lead generation becomes a very competitive field and a very important driver of competitiveness in our field with that new target group and retail brand awareness is increasingly important. And there is a third component to the hearing care trends, which is the hearing health care providers. Engaged audiologists, that's one of the key components to grow our business. There are scarce resource in almost all of the markets. We have a lack of educated HCPs. So one of the key components of the key competitive factors in our industry is to attract the best talent in the marketplace, but also to train, to educate and to retain those individuals amongst the workforce. Now how does that land in our strategy? On top, we are focusing on what we call pinnacle audiology. Pinnacle audiology is what we understand by providing the best personalized audiology solutions for every single customer in every single market across our network and personalized audiological solutions, that means the best product, the latest innovation, but also personalized services, the customer process. By that, we are also working on providing easy and convenient access to our customers. That means that it's on the customer to choose when and where, by whom and how they are getting in touch with us and how they are consuming our services and products, either on the store level or via omnichannel touch points, which means online or via the app, via social media or a combination of all that. And the third component is a relentless execution of what we call Sonova X. It's the continuous process of process improvement, of continuous improvement, of structural improvement, of everything we do in order to get better every day. And in order also to create some headroom on our P&L for future investments into our business model and for our customers. Now let's look a bit into Germany and what we have been doing there. To start with, let's have a look at the market. Germany is one of the largest markets in our industry. It's one of the two largest markets in terms of volume in Europe. It's a highly regulated and reimbursed market. About 60% of the market is fully reimbursed products, the so-called [Foreign Language]. And with that, the average selling price is also a little lower than we would see in comparative markets. The market is growing by 2% to 5% historically. You saw the outlook earlier by Birgit today. And there is competitive pressure in the market, both from local competitors as well as from our global competitors that are all active in the market and competing for the ever same customer base. And what we're also seeing in Germany or have been seeing in Germany over the last couple of years, is a somewhat moderate consumer confidence when it comes to end consumer products and services. Now how did we navigate in that market over the last couple of years to win a leading position. We entered that market over time by a string of acquisitions. And after we acquired AudioNova and part of the AudioNova acquisition in 2016 was also acquiring GEERS in Germany. We ended up in a situation with 17 different brands across the market with various headquarter organizations and offices. And that's simply not manageable. It's not effective, it's not efficient. And at the time, we decided to merge everything into one organization to create economies of scope and out of that realized economies of scale by having everything under one roof and build one brand in Germany for our Audiological Care business. We selected the GEERS brand at the time because it was the most renowned brand, a brand that came in via the Sonova -- via the AudioNova acquisition in 2016, and we also merged the teams or brought together the teams under the roof of the former GEERS headquarter in the city of Dortmund. Leveraging economies of scale into one brand frees up capacity. It frees up fund that you can reinvest into marketing and winning customers and creating brand awareness. So it was possible under one brand to be above the line present in the market on television, on mainstream media, in print, et cetera and also to collaborate with one of the most renowned personalities in the German media or German-speaking media world even with Thomas Gottschalk. That combination to be continuously online and to be continuously on television and have a collaboration with somebody like Thomas Gottschalk led over time for GEERS to catch up on brand awareness, to catch up also on consumer trust and unaided ad recall, which is a very important thing if you think about lead generation. Now having established a renowned brand, that's not the end of the story. It's the prerequisite to continuously attract customers into your network. It's also the muscle that you have to build these days around lead generation capabilities and in that, also about lead generation capabilities around an omnichannel environment. What does that mean? Typically a hearing health care journey for a patient does not start necessarily anymore with the hearing test in a store or with a hearing test with an ENT. Very often times, and we heard the example before from Oliver, people are realizing they don't hear well in a noisy environment. I know it myself, I have a mild hearing loss. It's very difficult to follow a conversation when you are, for example, in a bar or at a dinner conversation. It's very difficult. You have to lean forward, you have to concentrate, you're getting tired, you start to avoid those situations. In the beginning, you don't even know necessarily that you have a hearing loss. You just feel uncomfortable in that situation. Over time, you find out and the triggering event can be what we call a relevant other: a friend; a spouse; a family member that is pointing out, maybe it's something wrong with your hearing, maybe you find out yourself, maybe it's an ad that you see somewhere. So the journey might start wherever it might be that you are coming to a practice of an ENT and to conduct that hearing test. It might be that you are just browsing the web and try to gain much more information online at Google wherever. It might be that you see an ad of us somewhere on social media, and then you make an online appointment with us to have a hearing test executed in one of our stores. So there's different starting points, and there is different journeys across digital but also traditional ways of reaching the customer that end up at the store level with an appointment. And in order to bundle the capabilities and in order to muscle up, we created something in Berlin a couple of years ago that we call the lead chain factory. It's an in-house digital platform for online lead generation and qualification as well as helping us to convert better across the funnel by prequalifying people and follow-up through the entire sales funnel. This is also helping us to improve cost per lead and the customer lifetime value. And while building up that muscle, we are also working on expanding those capabilities into other markets, not only into Germany. So out of Berlin, where we have a team of around 150 highly skilled people; data architects; data engineers; online marketers; customer engagement specialists, et cetera. We are entering those services also into other European markets as well as into the U.S. market. And we are continuing to spread that capability out from Berlin into our network. Now if you have your brand build and your lead generation capabilities scaled up, people end up in your stores where the hearing health care test is executed and where the product is fitted eventually. Now it's very, very important if you are operating hundreds, if not thousands of stores that this is a very consistent experience for the customer and that it's a very consistent experience, not only for that single one customer, but for every customer, every day, in every location, year in, year out. And we heard earlier today that experiencing the delight of hearing is of utmost importance. And we also heard earlier today that the first experience is incredibly crucial for everybody that is suffering from a hearing loss. And we designed something called the GEERS hearing experience [indiscernible], which at the end of the day means that we are bringing situations into every store, and we can sort of -- we can make those situations experienced by all our customers, be it a bar situation, be it a dinner conversation, be it a concert where you can immediately during the first appointment experience, the upside, the delight, the power of a hearing instrument. And we developed something also in our store concept and we developed it out of our world of hearing flagship store concept, which is the experience room. We're also the relevant others. So spouses, friends, et cetera, that might be a facilitator for you to move into really using a hearing solution, can not only see you experience that but they can also experience the situation, how it feels for somebody impacted with a hearing loss in those situations suffering from that hearing loss. So also for them, we make it an experience, and that is very, very important also in the social interaction within a family or a social group. There's also another component to the GEERS [indiscernible] the hearing experience in-store processes. It's very clear. It's clearly structured. So upfront, you know the number of appointments we guide you through. You know what is going to happen as a customer. You know when you have the next appointment. You know the purpose of those appointments. And it will become plannable for you. You know by when you will have a ready hearing solution and by when you will be back into your normal life and really enjoy the delight of hearing. For us, from a company perspective, there is also an upside associated with that because it makes the work across our store network much more plannable. We can manage capacity of our store network. We can manage the calendar capacity of our HCPs, which is a scarce resource as we heard and we make it a scalable process. Around that customer journey, around that in-store processes, we also started to redesign the store concept per se. So the physical store concept. We were leveraging components out of our flagship stores, World of Hearing, into the normal store concept. I already touched the example of the experience room but also other components, and we made it a new standard. And we are just in the process of scaling that standard for the first time into all the new openings that we're doing across markets within Sonova Audiological Care. So we have the brand, the lead generation, the in-store process and the store. There is one incredibly important success factor, if you will, missing the secret sauce to make all that happen. We're a people business. Without highly educated and engaged employees, without highly educated and engaged hearing health care professionals, none of that works. And there is not enough of those individuals, neither in Germany nor in most of the other markets we are operating in. So yes, of course, we have to attract them in the first place. And sometimes, and we don't want that, but sometimes also winning from competition. But eventually, we, and that's why we founded the GEERS Academy in Germany, we have to educate our own audiologists. We have to attract the best talent and educate audiologists and also participate as an industry player -- as one of the largest industry player in leveling up the number of audiologists in a given market, in that case, in Germany, in order to grow not only our business but also the market. We have an ever-growing number of audiologists that we are having out of that academy last year, 250 graduates. The number is increasing year-over-year. We are doubling down on that. Just 2 or 3 weeks ago, we had another 31 audiologists successfully graduating from the Academy. But the academy is not only tailored at audiologists. There's also another 80 different courses and curricula from sales management to talent development, et cetera, that we're focusing on in the GEERS Academy. And out of the 2,500 employees that we have in our German audiological care organization, more than 1,800 were participating in one way or another, either at location in the Academy or via remote programs in one or more of those courses. So for us, it's incredibly important not only to invest ourselves in the education of hearing health care providers, but also to engage, to upskill to right skill all the workforce, work on talent management and increasingly make sure that people are not only attracted, but also enabled and then eventually also in the long term, stay with us as engaged individuals that at the end of the day are not only engaged employees, but ambassadors for what we do. We launched an employer branding campaign called Ich bin GEERS, I am GEERS. And we did that because each individual in the organization has an important role to play, be it in marketing, be it in finance or even more so important if you're at store level because every employee on store level is rendering every day what we call Pinnacle Audiology. And every day, they are our ambassadors. They make the magic happen to put the hearing instrument on the ear, to provide that unique experience, to excite our customers of what we do and to make sure that people are not only buying at Sonova Audiological Care or in Germany at GEERS, but that they stay with us for a customer lifetime ideally. And that's why we also called Audiological Care, not Sonova Retail, because we care for those individuals, and we want to be part of their hearing health care journey for a lifetime. So if we look back, what were the ingredients in order to lead to a market leadership position in Germany. It all starts with the governance model and the leadership team, focus on the big impact initiatives, but also, and I said that on the strategy slide, relentlessly focus on continuous improvement applying our Sonova X toolbox because that is not only making you better as you go, it also frees up funds that you can reinvest in other initiatives that you will need along the way. It's all about customer engagement, brand in-store excellence, store concept, but also consumer access, including funnel management. Of course, also the growth initiatives from network expansion from greenfield openings to bolt-on acquisitions to the omnichannel journey, but also, and we heard a lot about that this morning, it's about latest technology, product and pricing. And last but not least, as I like to call it, the best team wins, it's all about the people that are working with us, that are working in our stores and that are making the magic happen day in, day out in every store for every customer. So that means, again, attract, enable and retain the best talent in the industry. What can we learn out of that for our global Audiological Care business. We will continue to build a global business and harmonize brands and the positioning across the markets. We will continue to engage employees, and we will continue to double down on investments in training and retaining those talents, especially audiologists. Pinnacle Audiology. So the store concept, again, the customer experience and the product is key and will be and remain to be on top of things in our positioning, and that is very much what and who we are. Leveraging data is incredibly important to generate leads, but also to continuously improve our services and everything we do, increase productivity and profitability. I just mentioned it by relentlessly applying the Sonova X toolbox and further strengthen our organic growth paired with accretive selected M&A activities. All this comes together and will help us to continue to drive market share in every market we are active in and to deliver on profitable growing the business. Thank you very much.

Thank you, Oliver. Thanks for guiding us through. This was a hopefully good opportunity to take a look into one of the AC markets in a little bit more detail. By the way, this is our largest, about 25% of our total Audiological Care footprint. On that regard, not irrelevant, but hopefully, also a good opportunity for Oliver, while he's new in the role on a global level to show that he knows what he's doing and has done at least at scale in Germany. The last half hour before we have one more Q&A. We wanted to spend on what you call it, even making the strategy chart from Oliver, Sonova X. I talked about continuous improvement, structural improvements. It sounds like a somewhat dry topic, and you can ask a question, why is that so relevant? I would say it's very simple relevant. At the end of the day, we live in a competitive environment. In the worst case, the customer wants more for less every year. It's health care. As long as you don't provide like [indiscernible] a big jump. Otherwise, you live in the more for less, right? And you have competition. So yes, you have scale, if you're in a fortunate position that you have scale, but you still need to wrap your head around what's your fundamentally economical engine in the background that you can drive profitable growth while you have to invest on an ongoing basis into growth, right? And so in that regard, I hope every company thinks about what the engine is. Ours, we called Sonova X. While you hear that in all of our presentations over the last couple of years, we thought it would be helpful for 30 minutes to take your time and share: a, an overview; but secondarily, share a couple of specific examples, which may bring it closer to the one who is not that close to how do you drive efficiency at scale, that you at least see 2 or 3 examples. So that makes sense. If they can do it in all the other processes, it will be important, right? So from an introduction of Sonova X, we call it an excellent system. Other people may call it a business system. At the end, it's deeply rooted in the conviction lab and the experience, I would say, that everything we do is a process. Sometimes well organized, sometimes not so much. If it's not so organized, you have more potential, right? Not just in operations, but throughout, and you can create value in many different ways. Don't start immediately efficiency. From all I can tell to you just started their journey and we're a little bit students of Toyota and the principal because they had a quality issue. And then they figured out, if you can improve your manufacturing process, you get to a better first pass yield and ultimately, you get to a better failure rate or lower failure rate, right? So it's about customer satisfaction, can be about sales growth, efficiency; interesting point, they normally hang together as long as you go to solving the problem from a process perspective. If you want to do this at scale, we're 18,000 people and want to have good impact and alignment, ultimately a new system. You can't just have everybody do it their own way, different language and so on. So you process tools, you need effective KPI and action plan reviews, and you need to do this systematically so that everybody humps in the same way. Now if you want to bring that to an organization which had individual process improvements, but not kind of in a structured way, you need to not just have the tools, you really need to think through how do you get people motivated by seeing the benefit? How do you bring them on the journey and you end up to see that the success or to drive it systematically is ultimately that people are engaged on all levels. You'd like to talk about Gemba being the place of where the action is, out of the Japanese. So you need to involve the operator because they know what the process is, but you also need to go up to ultimately my level and be engaged. Otherwise, you don't drive the cultural change and you don't set the priority. We're on the journey since 2019. You can't do all at once. So the scale and scope is growing, and I'll have a chart on that so that you get a sense for how far are we on the journey? And we do it ultimately to drive results. They're not only financials, I think customer satisfaction is an important one. But obviously, you drive the P&L and the balance sheet and your ability to invest. So from a system perspective, why is this system? I talked about the approach and the toolbox, we deployed in 3 buckets. Now, other people may structure the buckets differently, but there's a site, which we call growth. There you're focused on the sales processes and the marketing processes and the new product development. And there are different tools you need in order to improve an R&D process over the manufacturing on the assembly side. The principle is the same, but the tools are different. Continuous improvement, we use as a term more in the operations and the transactional side of the house. And then talent is the culture, the learning of the tools, but we also deploy it to how we run our talent development processes. Now one interesting one in our world and just seen it a little bit in the Oliver voice over, but there are places which are both. Our biggest OpEx in the company is Audiological Care, right? And we can have a discussion is what Oliver talked about a sales function in the store? Or is it manufacturing, right? Because they sell, but they also have to diagnose, treat to our aftersales service and repairs. So to a degree we have 3,700 small factories with only 3 people in there, that's a complex issue. But in that regard, the boundaries between growth and containers improvement can mix. Alignment is important, as I said, because of the size of the organization. But often, we bring cross-functional teams together from different parts. So it's good to have the same language, use the same approach. If you would go Six Sigma, which some other people do, super different to the Toyota principles. So in that regard, we're more on the continuous side and everybody needs to do the same. Otherwise, we confuse ourselves. From the performance improvement, I think the most important from my vantage point, you can say everybody improves processes. This is true, but if you do it 2x better than other people, and you can sustain it, it becomes a defendable competitive advantage. So you will find players in the world who have systematically better reliability than others and have systematically better sales execution. They can't stand still. Same is true for us. If we started 5 years ago and our sales execution has not improved in the last 3 years; somebody else woke up and went on the same journey, that's problematic, right? So you need to continue. Now one last comment, which I think is most relevant to us thinking from the financial perspective, continuous improvement sounds small and the single step is. But you will hear people talk about it who say, yes, but don't underestimate the power of the compounded annual growth rate. Because if you can improve the process by 5%, you sustain and then you choose to improve it by another 5%, now becomes interesting, right? So if you look at the people who are really way ahead on how many cars they can assemble with a number of operators, what their reliability is, 10x better than somebody else. Most likely, they've done individual improvements. And they understood the magic that it's not the individual improvements of sustainment, right? So there's a lot of focus on our side on implemented change. How do I sustain? You will get 2 words. Ludger will share them about daily management. How do I drive my business with a high cadence that I continue to sustain before I improve. Now I said it's a longer journey. Because you can't start in all functions in all people. So what we've done in the last, by now 5 years, we've built a continuous improvement team, which is dedicated. We have about 40 experts, very big version and background, some are operational, some R&D experts, some of them are sales and marketing, but they're all in addition, expert on how do you improve processes. And you need to provide that resources. You can say that's costly in the first place, but if they help me 1% productivity every year, they pay for themselves. Most important is the local P&L leaders are all in. They are guiding where they need to help in order to move their business. If you look on the curve here 2019, we started, we started as many other people only in operations. Seems to be more natural to people in operations to say we have to improve processes. I don't know why that is, but I have observed that to be here. So you start at a place where you have a lot of willing people who want to jump on the journey. Ludger Althoff, he was new. And then we moved into, as you can see on the curve here into sales funnel management, degeneration and some initial activities or new product development. We then scaled up in the last year or two, was also including back offices because we have large back-office resource pools. And we also have disseminated the responsibility at the beginning of the first year. So it was pretty much the Management Board together. By now, the ownership is with the business unit leaders and the functional leaders and they have dedicated support teams in order to drive this. Now we're up to more than 100 Kaizens here, more than 5,000 people involved. So this is not a small exercise. This is a large shift in capability, but also culture. And I'm not saying everything goes perfect. You remember, we had a discussion on reliability. We really felt bad about it. But if you think about it, how fast we responded and that we're now showing that the Lumity post-launch has improved 30% as an existing product. You see we can respond at least when we may make an error somewhere. We're never perfect on any process. A couple of high-level results. And because we're so broad, I can bring many examples. I picked a couple of ones, which are kind of relevant for you to get a sense on how much can you get in a year or two. If you go to the growth side, these are real numbers out of our world. On the growth side, time for effective customer care, which is in Oliver's words, in Audiological Care, where we're helping through calendar management and better in-store management to drive more sales time for the audiologist. Keep in mind, there is scarce resource. After 2 years in the pilot stores, we were up 10% of the available time for sales appointments, right? You can argue cost, you can argue that's an opportunity from growth because it's a scarce resource. If you look on predictability in product launches, the consumer hearing business now 2 years with us on their journey. They were always three to four months delayed. Last year, we hit all developments on time, one was a couple of months ahead. If you go to continuous improvement, look, on the manufacturing side, we'll share the labor productivity on-time delivery. We also deployed the working capital, significant improvements in DSO, in particular, payables. You can see in the last 3 years, we've increased our payables, which is a good guide for us by 75%. And then on the talent side, I said it's partially the training, but it's also partially improvement of the processes and in particular in talent management, voluntary attrition in Oliver's world went from 12% to just 7% in the Audiological Care, which is a huge number if you know you have a scarce resources. Secondarily, you do struggle with stores, which you can't staff because somebody left, right? That's immediately a growth problem. I want to point to one more. This whole works from culture as everybody understands and is on board. It also gives a benefit towards internal fill. We have 67% of the people we promote from within. I remember 5 years ago, that was below 50%, 67% is a good number. But I wanted to point out that Oliver who was on stage together with Lilika, was late on the stage, are the first Management Board members we've moved from within the last probably 8 years, 10 years. And it shows you that we're building from the bottom up. We had the 67% for a couple of years, but you can easily see if somebody understands what we're doing and they're ready for this step. It's more appropriate you have the people faster and they can be higher risks when you bring from the outside, if you can from within. So that was the overview. I want to ask Ludger to come up to go deeper on the operations side, and then Lilika will share examples of the growth from her Canada time.

Many thanks, Arnd. Before I go into the continuous improvement in operations and what we achieved over the last 6 years and where we are really proud of. Let me introduce myself first. My name is Ludger Althoff. I joined 2019, beginning of 2019 as Head of Operations at Sonova. And as the Head of Operations, I'm responsible as well for continuous improvement. And when you look at the career of the last 23 years, it was either in companies which have a well-established continuous improvement system or are on the way to establish it. So this is something that I'm really passionate about. And the passion really started even before that time frame. And at the time before, I was working for Colfax Corporation, and they sent me to the Danaher University in 1994, 30 years ago, where I was educated on the theory of continuous improvement. I had no clue before, but -- and I have the pleasure to go on the shop floor on a co-located company, and this was a life-changing experience. And I went there. There was one assembly person, which came to me, grabbed my arm, put me into the area where he was working at, and said, "Look, we did so many improvement with my health and my work and all the colleagues." And like here's a material coming in, there's coming out. And here the [indiscernible] that's what I did. He was so proud about what he was doing. I said, wow, let's check if the other ones have the same mentality and all of a sudden, I asked a couple of more people, they all came up with the same experience, and they all said, "Wow, this is such a great company. We are so happy." They were so engaged that I said, well, to myself, I want to run a company like that and that got me started. So this is all about what Sonova eXcellence is. It's about people and process. People process, culture, which we are establishing in this company to make sure we are never happy with what we have achieved so far. We can improve whatever it is, we can improve more and more. From here, let's go into 2 examples on where we have made significant steps forward. And by the way, continuous improvement by itself, says we are never done. It's a journey. So you always find more and more potential, as more you go as more potential you find. First example, on time to customer request. It's the customer request date. It's not the promise date. When I started here in 2019, we were managing ourselves to promise date. That means whatever we told the customers when they get their parts, they had to take it. That means sometimes it was too long. It drove not really the customer happiness especially when the end customer, whoever the patient is, I mean, as a patient or a person which has got a hearing loss and is waiting for their hearing instrument. They had to wait a long time. And that's where we said, look, we need to get more in terms of getting to adequate lead times and see whatever the hearing care professional and/or the surgeon has scheduled as a meeting with the patient and/or customer to match ourselves against, which is on a customer request date. Not all the time, the customer is telling us what they really request is. But then we have a market lead time against that one. And this market lead time is a market lead time, which we said, "Well, we have to be a bit better than the competitor." And that's what we are driving for. And based on that one, we drove the improvements to from -- we said from the 80% to the 93%. But when you look at the first six months, we had to educate our troops to what is the difference between the promise date is and the request date. And therefore, when everybody was clear what the promise date is and the request date and they really put the request date in; first of all, the results went down. We started really -- we really started off with 60% and went from the 60% to the stable 92%, 93%, which we are today. And keep in mind, the customer can request whatever. They can request next day. So sometimes we are not able to do that by default. But I mean, 93% on customer request date is a good, stable result. Why is it important for the customer at all? As I said, if we don't deliver, they have to reschedule. They have to call the customer, they have to postpone the surgeries. So that's a lot of extra effort and it drives customer unhappiness. And therefore, it's creating a lot of problems. Therefore, on the flip side, if we have a good lead time and we're sticking to our customer request date. We are driving customer happiness and satisfaction and therefore, the Net Promoter Score is directly influenced by that one. We reached the improvement so far by, first of all, all our parts, which we have, which we are stocking up, where we have our standard parts by having a plan for every part in terms of stocking model, which has some demand and supply always checking and make sure that we have the right level there and always in our distribution centers, all around the globe. Daily management. Daily management is something you will see later on for the ones which have signed up for the factory tour. This is something where we are daily checking on first of all, over the day, we are checking that we are really fulfilling all the needs which we have for the day. But if we can't make it the next day, we are checking on why couldn't we and what do we have to change? So that this one is not happening again. And then the optimization of the replenishment. While most of the systems, the computer systems are based on forecast, whatever forecast is in the system, we say we do an automatic replenishment, whatever gets sold, get automatically replenished in a so-called [indiscernible] system in a min-max. I mean there's a lot of pull systems which you can think about so there is an automatic replenishment behind. Now let's go to the second example. Second example is productivity. Arnd already talked about the 12%, the 12% is an average. I mean when we will see it on the next slide and how it was going on the different years, but the scale has changed over the years as well. How do we do that one versus -- or how would we -- how could we be able to drive 12% in average productivity? It's really about focusing on the nonvalue add versus the value add. The [indiscernible] model, for example, is something that really thinking about what can we do on the value add. But the value add and there are a lot of statistics out there is really only 5% to 10% of what we are doing in the available hours. And if you improve on the 5% to 10%, even 10%, you only have a 1% improvement for the company. There's far more in if you concentrate on the nonvalue add. And there's two types of non-value add. One is about the necessary. I'll give you an example on the necessary one. That's about the reporting, maintaining our quality management system. That's all stuff which you have to do, but it's not really something which is valued by the customer. The customer really cares about every time you are adding something to the product or the service, whatever you want and whatever they have ordered. The non-value add but necessary, we try to minimize and optimize and automize. But there's a lot of stuff, the majority, which is nonvalue-add which is not really needed. It's like over processing, it's waiting for material. It's waiting for tools, it's searching for -- it's like searching for documents. There's a lot of stuff which is wasted where by optimizing walkways, by optimizing the way on how you place the material, on how you place the tools. I mean, by the way, in the office or on the shop floor, it doesn't matter. That's where you get a lot of savings and a lot of productivity improvements by thinking through the process on what is really necessary and what is not and how do I serve this workplace the best. How do I find that all? How do I find the improvement? I go there where the work is happening. We call it go to Gemba. Go to Gemba is wherever the work takes place. Go there, observe, see, ask questions, talk to the individuals and involve them. When you involve them, they come up with a lot of ideas. They tell you, "I don't know why I do it?" Can you ask? Can you see who's -- and then if you just stop it, what happens? So it's like it's a lot of things which you can do together with the employees, which are working in the process here. And of course, you need to visualize because people don't see it. People don't see it before you don't put it on the wall, and you say, well, this is a workflow. This is what we are doing. And why do we do it in this way? And then most of the time, people say "Well, it was always there, this way." I said, "Okay, good, let's do it in a new way" and to see how can we do it smarter. What has been achieved so far? In the first 2 years, we really focused on the shop floor. The first year, we took 3 pilot factories. And from there in year 2, we scaled up and took all the factories and then we took the next generation after this one and adding all the support groups in terms of logistics, in terms of order handling, all the ones which are supporting the manufacturing into scope. And always when we scaled up, we could still drive the same amount, more or less the same amount of improvement on the productivity front. The last one, the last big change was we did not focus so much about driving the amount of Kaizen of activities by thinking about what are the ones which we have to drive to have a bigger impact and we need to get more -- we have to have more impact in terms of driving the sustainment to make sure that it's sustained over time. So I hope I gave you a little bit of an example and insight on what we did so far with our Sonova eXcellence on the shop floor. And from here, I would hand over to my colleague, Lilika, which gives you a little bit of insight on what we did in the AC side.

Thank you, Ludger. Good afternoon, everyone. My name is Lilika Beck, I am the Global Vice President for the Consumer Hearing business. This is the first time we're meeting. So I thought like Ludger and Oliver, I would do a little introduction as well. I am just coming up to the first 90 days in this very exciting role and also as a management Board member with Sonova. But I've been with Sonova for 15 years. And I started my journey down under in Australia as a commercial director with our brand, Unitron, and then was invited to travel up to what we call the great North in Canada and leads the global Unitron business as the VP of Marketing. And it was in this role, I had a very cool opportunity to lead a group of product managers and developers and work very closely with the R&D team in creating our product portfolio and innovation. So when you saw that sparkle in Oliver Frank's size when he talks about innovation, it's exactly what we were doing there, building the Unitron innovation. After that, I moved to the audiological care business in Canada. We operate there under the brand name Connect Hearing. And this gave me the opportunity to see how the innovation we had been creating is now being experienced by people with hearing loss every single day. That's a daily business. We diagnose, treat hearing loss and provide solutions. So I spent 4 years there, and that's actually where my exposure to Sonova X and my experience with Sonova X grew exponentially. So I'd like to take you through an example of how we use Sonova X at Connect Hearing to unlock value in the business, to improve productivity and honestly, to resolve one of the biggest challenges we faced in that business. So firstly, before I get there, just a little bit about Connect Hearing in Canada because it's not a business that gets profiled a lot, but thank you for sharing the data earlier on the market growth. We have 175 clinics there across the country, and we're amongst the top three providers of Audiological Care services. It's a good quality midsized market, about 650,000 hearing instruments per year and a healthy growth rate of somewhere between 3.5% and 4%. More recently, I can see mid- to high single digits. We have comparatively to other markets, a good hearing aid penetration rate partially because a lot of people with hearing loss can access some level of reimbursement there. And it's highly regulated, both by region and by profession. So whether you're an audiologist or a hearing instrument specialist and depending on which province or state you're in, you belong to a different regulatory body. Now here comes one of the biggest challenges we had in that market. And it's actually something Oliver spoke to. He called it audiologists' scarcity. In Canada, we have 100 -- approximately 120 hearing care professionals graduate each year. That's a lower number than the number retiring. And every year, that's declining, those number of graduates. So our clinical capacity to serve consumers in this growing market, is becoming a challenge. And we do a lot of the good things that Oliver talked about, supporting and certifying people to go through the program. We have good recruitment and competitive recruitment policies. We leverage immigration as well and, of course, retention is key. But nevertheless, we started to get very, very curious about how we manage the capacity we have in our clinics. Are we doing that well? Is it optimized? So to understand that and unlock any value there, we use Sonova X. And there were three things that we did. I like things in 3s, they're easy to remember. The first is we deployed or completed a Kaizen. Ludger or Arnd took you through what a Kaizen is across functional Kaizen where we invited team members from across the business, particularly those at Gemba, so the front line, the hearing care professionals, the admin staff. And what we learned about Kaizen is our clinic calendars, although they look similar across the clinics in terms of the type of activities, there was actually a very low level of standardized work. Every clinical calendar was very customized to the way that hearing care professional like to work. Their style of working, their appointment lens, the type of appointments they want to have. And as a consequence, it was also very reliant on their ability or capability on how to manage their time effectively. So one of the key outcomes was to create a standardized calendar. Now what does standardize mean? It certainly doesn't mean one size fits all. I respect the different profiles of people and hearing care professionals we have. So we did a level of segmentation. And if you think about it, you've got hearing care professionals who are graduates, who need more time for a hearing test and then you've got those who are very tenured, may be running an established clinic who can diagnose and prescribe within 60 minutes. So we created four different calendar templates and deployed them. After deploying this, we needed to empower our teams with a way to manage what we have deployed to measure themselves against their goals. So we gave our clinical teams and their managers a daily dashboard where they could see how time was being used across different clinics and different regions. And this really informs some very good quality business decisions, particularly around workforce planning. Do I need to ramp up capacity here? Does this clinic maybe need to go part time over a period of time. So the managers now were empowered to use this data to make business decisions. And finally, this data was very useful for our marketing team, and this was the first time this had happened at Audiological Care. So our marketing team could now see in real-time which clinics had free capacity. And in a country like Canada, where a lot of our leads come through digital marketing, they were able to power up their investment or power down by region in order to drive leads where we had capacity. So this standardized calendar management really was an enabler for growth. Now outside of understanding how do we use our time and use it well, we also were very interested in acquiring capacity. In Canada, M&A is a big part of the strategy for many good reasons, including a large footprint of independent but maturing clinics. But we also know when you acquire a clinic, you acquire a customer database and you acquire a trained hearing care professional. And in this market, that was very, very important or is very important. So just a little highlight around our M&A, particularly in a city called Toronto. The project was called Project Raptor, which at the time, if you're a basketball fan was named after the basketball team, who had just won the NBA. And Toronto is a very interesting region because it has good population growth, above average selling prices and is a pretty competitive market in terms of recruitment. So together, that focus on how do we optimize our time, how do we acquire capacity contributed to a pretty good picture over the 4 years that I was there at Connect Hearing. We grew our market share to 10%. We had best-in-class capacity management amongst Audiological Care. Oliver, I'm sure, will back me up when he looks at the list, Canada was right up there with how we optimize our time in clinic. Our average selling price grew at a 4% CAGR. And importantly, we had a lot of focus on retention and engagement of our team members. So our voluntary turnover came down to a very low 4%. Super important for us to be able to serve our consumers and our people with hearing loss. And very important to me because as you know, people with hearing loss take a number of years to make the decision to see someone about it. And ultimately, we were extending that by 20, 25 days by not having the right capability -- capacity in clinic to serve them. So what's next? This work then went into a couple of other markets, including Belgium and the Netherlands with very good results and continues to expand across Audiological Care. Thank you so much, Arnd?

Thank you, Lilika. I have two takeaway charts, while I'll ask Lilika, Oliver and Ludger to come for the Q&A. So just briefly on the Sonova X, I hope it was worthwhile to go 30 minutes deeper. I apologize for the one who wasn't that interesting, but I wanted to share it once while we always talk about it but it's clearly broader distributed by now in the different businesses and the major functions. Ludger said it's at the end, it's enablement of the people, it's the culture, it's the knowledge on how you improve your processes and then the commitment to go do it with the time you have to allocate. We made good progress on many different fronts. There are other areas where we haven't even started. The good news about continuous improvement never ends. So in that regard, I would say there's also enormous potential. I'll flip up the key takeaways for today before you go to the question because it may trigger the one other question on your mind. I think we talked at the front around implementing the strategy to drive profitable growth being on the journey. Particular focus is [ we're ] obviously coming from the lead innovation side, where a company which tries to bring the breakthroughs when they're required for the industry and the customer real-time AI being for us, the big next thing, and not just for this launch, but for the years to come as a platform technology. The broadest launch, as you could tell from the image is also a big, let's say, signal into the marketplace from the launch activities. And then the deeper dive on the consumer access as well as the Sonova X. With that, I want to lead over to the Q&A for the second half of the day, but also other ones which are still open from the beginning of the day.

So we start the second Q&A session, while we wait for a few people on the phone. And for those of you who are joining the webcast and want to ask a question over the phone, please dial in now. But I would suggest we start with one or two questions from the room before we move to the phone.

It's Graham Doyle from UBS. Just again on the manufacturing and obviously related to a lot of the work you're doing here. As you scale, where do you think you are now in terms of your ability to meet demand for the next year given presumably you can meet the demand that's in your implied guidance for both products, Infinio and Infinio Sphere. And again, just to understand how difficult or not is it to produce the Infinio Sphere relative to the Infinio with the extra chip just to contextualize after us.

So the complexity of manufacturing is not very different to the ones which we have before. I mean there's one step extra, which we have to do. I mean there's more components which have to be added. There's a little bit more work, but it's not that it's a complete new process on how we are manufacturing them. The scaling up is -- well, we have room for scaling up -- but I mean, at a certain point, when it's exceeding the [ amount of the ] volumes, then we, of course, have to have a step change and have to do a lot of investment, but that's what we are looking in right now and it's really dependent on how much is the Infinio versus the Sphere we said in the beginning. And I mean we had different assumptions that we had 70% Infinio, 30% Sphere, we see now with U.S., it's completely opposite. So that's where we have to flip from one to the other, which is different in electronics. The one has a one chip more, we can't just shift from one to the other. So there's a little bit of a delay, and that's why we are running a little bit behind. But in principle, we have enough capacity right now to fulfill this year for sure. And then I hope there's far more growth coming into next year. We'll be think about that one when doing the budget phase and what we have to invest to go forward.

The last sentence is the hope of every operations leader in the world. To tell that's -- to translate it on time line, I think the first couple of weeks are not easy given the mix shift and also the ramp-up. But for the guidance and some on top, we have clear line of sight on the capacity side.

Then we have a few people waiting to ask a question over the phone. So operator, why don't you put in the first question, please.

The first question comes from Robert Davies from Morgan Stanley.

I had a few. One was just on the slowdown you called out in the Managed Care segment. I just wondered if you could give us a bit more color in terms of what's going on there in terms of sort of price and volume dynamics. That was my first one. The second question was on the comments you made in terms of the size issue on the new hearing aid product and actually it not really being much of a pushback in the U.S. market. Which regions or countries do you expect that to be more of a problem? And then the final one was just on that mix issue between the Infinio and the Sphere. How is that -- what's the sort of price differential? Just you don't have to give us the numbers, obviously, but just in terms of sort of magnitude, is it sort of a 10% difference or 50% difference? Just can you give us some sense of where the two would sit on the value chain.

So the first question was, I think on the Managed Care, there's no clear indication why there is some slowdown more than in the private. I would personally believe Managed Care was very busy to get access to the different Medicare Advantage plans over the last couple of years. If you look at their growth rates, they were easily in the 15%, 20%, 25%. And for me, that was a signal that they were making the service available to more and more patients who didn't have access yet. And I think now getting into the world where most of these Medicare Care Advantage plans are penetrated and then with it the curve will become more normal to the regular growth rate. So that -- I think that's the magic there. I wouldn't read too much into it from different strategies of different manufacturers. I don't think that moves the needle significantly there. I think from the size perspective, I think at the end, I think we go currently by what we see out of the ITE market because we have yet not launched Infinio and Infinio Sphere in Europe. But in general, we know that the ITE penetration in the U.S. as a percent of the total is higher. And thus far more people are willing to take an ITE even if they have a high hearing loss, which then ultimately leads to it being very visible on the air with a faceplate. While in Europe, we see people pushing very hard for smaller devices and the ones who are severe to profound at the end choose not to take an ITE. So this is really a secondary effect. We need to see what that all means but it would lead to the thesis that you're probably, if there is a pushback, we don't know in Europe on size or in general, it would be probably more pronounced in Europe versus U.S. I think the other one on the pricing differential, we don't give an exact number, but certainly not the second number you were putting out, probably more in the direction of the first number -- direction. Keep in mind, this comes on top of the Infinio premium.

Could I just ask one follow-up just on the Infinio. I wasn't really clear in terms of the sort of technological differences between that and the Lumity, what are the key kind of [ USP ] benefits of that over Lumity?

So from a chip technology that may have gotten a little lost, it has a complete new chip on the connectivity side, which in the combination for the DSP gives a lot of benefits with regard to the most safe connectivity, the larger reach for faster switch over from one to the other mode. I think we've made significant progress on first time fit by optimizing the algorithms further. And so I think I would put it into -- this is similar to an upgrade on capability for the consumer, we would have done for Marvel to Paradise as an example. But there is a new chip technology in there, which I think is the right next step with regard to anything we want to go do from a connectivity. We also shared it is Auracast ready for the ones who worry about that. We don't worry short term. Longer term, I think it's good to have the technology on board.

I suggest we take another question from the line then.

The next question comes from the Veronika Dubajova from Citi.

I have three as well, please. The first one is just I'm trying to think a little bit through the positioning of Sphere [indiscernible]. Is this you thinking RIC or BTE type of product? And is it more aimed at the serious kind of moderate to severe user? Or is it more aimed at your mild to moderate? Just trying to understand, as you kind of think about it, I think as alluded in the morning session, as you think about kind of what consumer or customer is ideally suited to this product. Where do you think that benefit lies and how broad or narrow is that customer group? So that would be my first question. My second question is just maybe a little bit of color on the approach to the launch and some of the follow-on launch activities that you've had. This is obviously the biggest launch I've seen Sonova do in my 15 years of covering the company. Frankly, it seems like the biggest launch I've seen anyone in the industry do. Just would love to understand kind of your rationale for that? And how is this different? And as you think about the sort of breadth and depth of the launch, does that translate into a different ramp up? Does that translate into a different customer feedback into more discounting or less discounting as you start selling the product? If you could just talk through that? And I guess, very unusual related to that for you to be running out of product already. I think there was a video earlier this week saying there are some shortages of the Sphere. So would love to get your thoughts on that. And then my final question, and apologies, I know they're all quite long. But my final question is more for Birgit and your thoughts on the first half versus the second half spread in terms of profitability? Are we looking at [ 45-55 ]? Are we looking at [ 40-60 ]? Kind of what are your thoughts on how much smaller first half might be this year versus history given some of the headwinds you mentioned in your prepared remarks?

I think on the positioning, RIC versus BTE, it's clearly a RIC as a form factor, but I think ultimately also from the usage. Keep in mind, we have increased the power of the RIC every time we come out with one. So over time, the RIC takes more and more of the BTE share. Now between the mild to moderate to severe to profound we need to see clearly a severe to profound has an over proportional benefit because they struggle more noisy environment. But on the other hand, even a mild to moderate has the interest to, a, understand pristine. They also struggled in noisy environment only not just that much. And then last but not least, I think the matter of fatigue is also an important one. So I think probably skewed a little bit more to the severe to profound but I would not be surprised if we see also lots of mild to moderates picking up the Sphere. On the launch strategy here with regard to the events we've chosen and what follows afterwards. I think when we were sitting there and saying, a, we want to reach many people to convince them not just on the loyal side, but even on the competitive side, having a strong starting point with a very strong positive reiteration of our messages in the audiology environment. That's helpful. I would say we also felt in the Lumity and you heard us say that last year, we were a little bit too much in the stealth environment. So we're pushing in the other direction. I think it's also a credit to just the sheer size of difference the thing we're making. And then I think people do recognize your marketing efforts to a degree, support your claims. Some people go the other way around. We are not that kind of people. So we think it's really making that clear and loud. On the follow-up, I think in Europe, we have events. They're also larger than our normal set of events, but probably not by the fact of life with the participants as we had in the Sphere. Keep in mind, when you choose Sphere, you better use it right? There's a fixed cost component to the discussion, right? But in all other places, I think we have very significant launch events. And then we have to do what we always have to do. We have to visit all of the customers who were not at the event because very few audiologists just buy different products on word to mouth they won't [indiscernible] in the year, right? So at the end of the day, yes, we kickstart the curve, we get a little bit more orders at the beginning. But I think what we're aiming for is a wider, faster recognition, more of a word to mouth amongst the audiologists and at the end, without driving the whole curve up. On the availability side, I think it's less a component question at this stage. I think it's what mix, what colors and there's a couple of the challenges we have with some changing in patterns and then needing to go back to customers on what we had in the original batch manufactured. And so I would put it right now more in the order handling. We think we will get through that in a matter of weeks. It's not a fundamental availability issue at the current level even if we're higher than we thought relative to our at least initial plan. But it's really -- when the mix has changed significantly, you have to kind of skew the customer to where you have built the first product and other people holding back until they kind of can get what they wanted. I think the third one was on the first half, second half. I'm looking to Birgit [indiscernible] about it. I think your question was on revenue?

More on profit.

Birgit gets the microphone.

So as we already mentioned earlier, so the first half has a different profile versus the second half. So we said that already at our year-end results. And then -- so this first half, what we see is, of course, much higher launch costs, marketing expenses, et cetera, but also late cycle ASP. And now the initial success of the new launches, I mean there is even more kind of waiting. And also more yes, pressure on that front. And then we also have the ramp up on the production costs, et cetera, also related to the success of the new launches. So I mean, that's actually the same as what we said before. And then I guess, Veronika, you can do the math that there is a significant difference first half, second half. Thank you.

I would suggest we take one more question from the call and then go back to the room.

The next question comes from Niels Leth from Carnegie.

A question for Oliver, looks on your Audiological Care business. You talked about how you restructure the German business and went down to one brand. How about the big U.S. market where you are running many different brands? And then just a follow-up to Arnd on the Infinio Phase III. I didn't really understand or get your answer as to if this Sphere version is available in Managed Care.

Thank you for the question. It's a very good question, actually. And the situation is a bit comparable to where we were in Germany a couple of years back. Due to also a string of acquisitions that we did in the U.S. over the last couple of years, we even ended up with more brands compared to what I showed you earlier today. But we are also further down on the learning curve out of what I just showed you earlier today. So the process that we're in, in the U.S. is actually to learn from those experiences. And we are aligning brand also in the U.S. and the one brand. The U.S. business will be called AudioNova. That's the brand that we are using for all the markets where we do not have a very strong brand recognition already in the marketplace. And this will also come with, of course an executional time line in the remaining rest of this fiscal year and into the next fiscal year, we started to pilot that in 16 stores already. And after the summer break, we will follow through into the rest of the organization.

So do I understand you correctly that all U.S. stores will be rebranded to AudioNova in this fiscal year?

This remaining fiscal year, we will start that exercise and that will most likely go in terms of time line into the next fiscal year. But yes, eventually, they will all be called AudioNova.

And I think the speed you need to balance with the CapEx investment and because you have to renew stores either way, we don't necessarily do that in a big bang but we really do that over a certain period of time and start with the stores who need the most uplift. On the Infinio Sphere with regard to Managed Care, and what I said is it's not as black and white as [ are you ] in Managed Care, yes, no? I think by the way, Managed Care is not one thing. I think if you go to the different contracts, some people are very high in what they pay for hearing aids and the fitting fee and that's normally the private fee insured people and audiologists, and we make normal money there, right? And then there's other very skinny contracts, right? Now it's not on us to decide in which contract this shows up. I think it's on the other side. By the way, it's also very different by Managed Care providers. So you may see us being in some more than in others. At the end of the day, we provide product that is on price and yes, as you heard us say, we think the Sphere should have a premium over the Infinio. And then ultimately, they need to make sense, doesn't make sense in their particular type of contract, yes, no? -- but in that regard, yes, there will be Sphere in certain Managed Care contracts, but most likely not in all.

Let's give a chance for the people in the room since we only have about 5 minutes left.

Arnd, you've been talking about the AC business. You've highlighted what you're doing improvements, but you've also highlighted the issue that you're having with staff shortages and something that is unlikely to improve significantly. So I was trying to understand how do we square your investments into AC acquisitions? With the fact that it's not going to get easier to get people to work for you. So are you working on more remote fitting solutions? Is that what ultimately the plan is going to be when there is more pronounced shortage in staff? Or how are you thinking about that?

So I don't think remote is the answer because the remote pickup rate based on the consumer interest, still below 5%. So hasn't changed a lot. Yes, some of the audiologists like it more. In New Zealand, we make better experiences because we can't even staff the store, which is more remote. But the remote is really not what the consumer actually prefers. And ultimately, we have to serve the consumer. The two answers is, a, where we talked about process improvement to improve the number of visits I can manage and higher conversion rate. The other one is what Oliver had on the chart. You did see the Geers academy, but here on the bottom, we train by now 500 people a year. If you would go back 5 years ago, it was probably 200 or 150. I think the answer at the end for us as well as other scaled retailers is you need to train yourself as some market participants would do, Fielmann or Costco train their hearing care professionals, right? And I think it's on us to figure out what's the right number versus the productivity we can achieve. But training ourselves as many advantages, one of them is they are more loyal, staying longer with you. That train to the model you have, right? In that regard, if you look at a great retailer at the end, they transform it, then that's the journey we're on. We have to scale it up.

Julien Ouaddour from BofA again. Two questions. The first one on phasing. If I'm correct, at the full year results, you said that the hearing instrument could see sort of high single-digit sequential acceleration in terms of sales with product launch between H1 and H2, does market softness in Q1, higher adoption of Sphere versus Infinio are two reasons which can imply an even higher sequential acceleration in H2. I mean basically, could we see positive growth in H1 for hearing instruments? And the second question, business we haven't discussed the Consumer Hearing. We've seen your [indiscernible] GN like we decided to win down its consumer business, all the constant demand trying to find a buyer for the headset business too. Could it be a potential scenario for Sonova in its Consumer Hearing business as well and especially as this business was acquired for OTC, if I'm correct. And we don't really see, I mean, a big traction so far?

Between the first and the second half, I think the jury is out with regard to what is the growth in the second half year. We feel good about the sum of the parts towards the guidance. I think, yes, what I said high single digit is in the room of possibilities between the difference in growth rates could be a little bit above, it could be a little bit below depending on what the demand on the Sphere is. But keep in mind, always relative to, we feel good about the guidance for the full year. So this is no change despite the somewhat more headwinds in the market in Q1. With regard to the Consumer Hearing business, we like the business in two ways. We still believe early entry devices, short or long term are relevant. I do believe that consumers over time, change behavior. And we do see people who like to self-fit just because that's the right model for them. I think we're all struggling with how do you make that work in today's world with a lead generation cost and return rates. But we're still using our products and testing how we can optimize that. We have certain synergies other people don't have. This is not regard to our hearing care competitors, but at least from a product development is pretty much the same product. The other one, I think, on the Sennheiser side, I think we see the potential, we did see 2 years ago to drive growth and to drive profitability there to make the asset ultimately more valuable and better performing. Sonova X plays a role. It's unfortunate that the market in the last 1 or 2 years was not a friend of ours on the consumer electronics side, but I think that's relative to market we're doing fine from a market share gain perspective. For me, that's an important metric because if that wouldn't be in place, and I would start to worry if we have the right asset but no change on strategy at this point of time.

We have one more question from the phone, and then unfortunately, we will have to stop. So operator, can you give us the last question, please?

Shubhangi Gupta from HSBC.

So I just have a question on the time line for the new product launches. So I think initially, the launch for Infinio Sphere was to be towards the end of August in Europe and APAC market. So with the more demand you are seeing in U.S. for these products, so how does the inventory levels look like? And what is the launch time line in U.K. and other markets?

So the launch times for the Infinio Sphere have not significantly changed. So Europe in the September, the markets are slightly different. And I think right now, we're putting the [ 70 and the 90 ] on the Infinio Sphere out. But in that regard, no change on timing and we should see the products starting to be available. And that's how also the launch events are lined up in the September time frame in Europe, which includes the U.K.

So with this, we conclude the Q&A session. Arnd, do you want to have any closing words?

Thank you for coming. I could send some excitement on the excitement we have. So I hope we did a good job also explaining why we're excited, not just in regard to the words and the videos, but in the facts and the data we were able to share, hopefully you had a chance to listen in. I think, as you know, in our industry, many things are important, but innovation is very important. So in that regard, I think we feel we're at a good place. You heard us talk about the H1, H2. But at the end of the day, I think we're building an organization with 4 different businesses. Sonova X helps on the way and the breakthrough innovation in our most important business will be a good guy for the next couple of years. Thank you for your attention. There is more we do on the out now with regard to factory tour and more product demos, otherwise travel home safely. Thanks for coming.