Sonova Holding AG ($SOON)

Good day, and welcome, everyone, to today's strategy update presentation. Thank you for joining us via our live video webcast. I'm Thomas Bernhardsgrutter, Head of Investor Relations at Sonova. Today marks an important milestone as we present our refreshed strategy that lays out the building blocks for Sonova's next phase of growth. You'll hear from our leadership team on how we plan to strengthen our market leadership and chart a course towards CHF 6 billion in revenue. The presentation will last about 1 hour, followed by a 45-minute Q&A session. [Operator Instructions] There will be a short break after the presentation to allow you to dial in. Please note that today's event is focused on our strategy and long-term vision and is not a financial results update. We will publish our full year results and detailed outlook for the coming financial year and our results presentation in May. We kindly ask that questions focus on the refresh strategy presented today. We will not address current trading performance or other financial details beyond what is covered in this session. In addition, please note that going forward, the Hearing Instruments business will be referred to as the Wholesale business and the Audiological Care business as the Retail business. These terms will be used consistently throughout the presentation. Before we begin, let me point out that this presentation contains forward-looking statements that involve risks and uncertainties. I encourage you to review the disclaimer in full. Moving on to today's agenda. Our CEO, Eric Bernard, will open with an overview of our industry position and the market context and then lead the strategy update. He will be joined by Anders Rosengren, Group Vice President, Research and Development; and Roberto di Fiore, Chief Operations Officer, who will elaborate on initiatives in their respective areas of responsibility. Elodie Carr, Chief Financial Officer, will then cover the financial aspects of our strategy, including our midterm targets and capital allocation. Eric will close with a summary before we open the floor for questions. And with that, I hand over to Eric. Eric, the stage is yours.

Thank you, Thomas, and good morning, afternoon and good evening. It is a pleasure to speak with you today. Over the past months, have had the opportunity to take a deep look at Sonova. Our portfolio, our people, our innovation engine and the markets we serve. And what I have seen is clear, Sonova is a strong leader with even stronger potential. Today, we are here to share with you how we will unlock this potential with a sharper strategic focus and the renewed ambition to scale our leadership and let me start with what I observed in my first month. When you walk into a new house, you see what's great and what's not. And what I saw at Sonova is powerful, a purpose that naturally aligns business objectives with a vision that inspires people to come and work for us at Sonova. And as a result, we can attract top talents. Strong market leadership positions in the U.S. and Europe that are not accidental. They are earned, a technology engine that continues to set the benchmark in AI-driven audiology on top of a strong pipeline and a financial foundation that gives us flexibility to invest where we can make an impact. At the same time, the upsides are equally clear. We can innovate beyond traditional form factors like RIC Receiver-In-Canal. We can accelerate profitably in Asia, a clear opportunity for Sonova. We can operate truly as one integrated hearing care company retail and wholesale together, meaning more value can be created, including for our wholesale partners. We can better leverage synergies between hearing aids and cochlear implants, and we can raise the bar in operations from manufacturing to customer service, knowing that this industry is a device and service industry. All of this creates a simple conclusion. Sonova is strong and with sharper focus, it can be even stronger. Now let's look at some recent highlights. Our latest launches show what happens when technology leadership meets disciplined execution. Products like Infinio Sphere, Virto-R, Ultra and EasyGuard have each reinforced our leadership position in our core business. And as a result, we have outperformed the market over the past 12 months. Virto-R, for instance, is a strong proof point. When we put world-class audiology into a design people want to wear, we reduce stigma and expand penetration. And the proof is in the data. The black model pictured here has reached 30% of total sales in most markets. This device looks and feels like a very cool ear buds. And in total, this product has now reached an annualized sales level of CHF 130 million. And in the veteran affairs channel in the United States, certainly, a good proxy for the general strength of any supplier. Virto-R has brought our share to a 5-year high. And in the specific category of the custom rechargeable products, the share of Virto has exceeded 60%. This momentum gives us confidence as we enter our next strategic chapter. Let's now briefly talk about the market. We all know, there has been a lot of discussions in the market recently. But when we step back and look at fundamentals, the picture is remarkably consistent. Demand for hearing care will continue to grow, driven by aging populations, longer treatment horizons, stable prevalence and penetration opportunities. And this is why we say confidently the structural growth of our industry is intact for the decade ahead. And Sonova is very well positioned to capture it. Let's now have a closer look at some numbers. When we look at the fundamentals, the picture is pretty clear. Across regions, the 65-plus population is set to grow steadily through 2035 by over 300 million people creating a significantly larger addressable base over time. And adoption is still far away from what it should be. Even in developed markets, like France, for example, with a very well-established reimbursement system, strong awareness and the ability to pay penetration after all is only slightly north of 50%. And in emerging markets, as you can see on the slide, the penetration upside is very, very obvious. So when we talk about Sonova's opportunity, it's simple. The world is aging, adoption will grow, and we are uniquely positioned to close that gap market by market with solutions that address these needs. And with that context, let's now move to our strategy. As part of sharpening our strategy, we have made 1 clear portfolio decision to divest the consumer hearing business and focus on hearing care. And the rationale is straightforward. When we acquired the Sennheiser Consumer division back in 2022, the objective was to explore hearing solutions -- sorry, was to explore hearables and early entry consumer hearing solutions and to bring the relevant technologies and insights into Sonova. That mission is now complete. And those learnings have been fully integrated into our core businesses where they can create stronger value. And that brings us to the business itself. Consumer hearing sells its products and the license Sennheiser brand with its strong heritage and global recognition. But consumer audio follows its own market logic and dynamics, making it better suited to fit for purpose owner. So for Sonova, focusing fully on hearing care lets us better leverage R&D synergies between hearing aids and cochlear implants, accelerate our innovation road map and allocate capital where it has the greatest strategic impact. So we are now starting extracted process to identify the best owner to take this business forward. With this decision made, let's turn to Sonova's renewed strategy. At the center of this strategy is a simple focused ambition to grow Sonova to CHF 6 billion in revenue by FY 2031. And we are going to deliver this through 3 pillars. One, we innovate to drive adoption. And in just a moment, Anders, our Head of R&D, will walk you through how our technology and our design choices translates directly into stronger adoption. Two, we win country-by-country with a multi-brand, multichannel approach. I'll come back to this shortly and give you a bit more color on how we succeed market by market. And three, we excel in operations to support growth. Here, Roberto, our Chief Operations Officer, will show how we improve efficiency and productivity while also turning service into a true differentiator. Let's have a quick look at each priority now, starting with innovating for adoption. Innovation has always been part of who we are. And now we are making it drive broader adoption. How? By pushing design and form factors towards more lifestyle aligned solutions. Strengthening our connected platforms and bringing AI and digital deeper into the entire customer experience. To strengthen our innovation road map, our Cochlear Implants business will benefit from more leveraged synergies with our hearing aids R&D. And finally, we are going to innovate specifically for Asia. The second pillar is about succeeding locally, country by country, deploying a multi-brand, multi-channel playbook. This is about delivering the right brand in the right channel at the right price. In practice, that means addressing each market with a portfolio of clearly differentiated brands. It also means thinking vertically integrated, unlocking more synergies between wholesale and retail with faster customer and consumer feedback into R&D, sharing marketing assets to all channels and a smarter use of our lead generation engine. And finally, it means expanding retail in a targeted way, focusing on strategic markets where we need to build scale, and I will come back to this later. All of this helps us win country by country with sharper market activation, broader reach and minimal channel conflict. Which brings me to our third pillar, excel in operations for growth. Hearing care is both a device and a service market and that gives us a unique opportunity to do 2 things at the same time. One, boost productivity. Roberto will come back on footprint optimization. More automation, streamlined processes and strong value engineering. And two, build service into a real differentiator. When we deliver on time and on quality, this supports our wholesale partners, drive loyalty and ultimately improves our share. Now to deliver on this strategy, we have the leadership in place. Over the past months, we have built a very international leadership team with deep industry expertise, balance with fresh perspectives, a team that is now fully ready to execute on our plans. And the only piece of the puzzle missing is the Chief Digital Officer, a very important addition to the team and the role that will be filled very, very soon. A few words about the new regional structure, which will become effective on April 1. We are moving to a 4-region model, as you can see on the screen, and each of the regional heads leads an integrated wholesale retail business. With this setup in place, the 4 region heads can provide constant customer feedback to the central strategic functions supporting them. This enables us to better put the customer at the center of everything we do and in return, allows us to better meet the diverse regional or even country needs. Now that we have covered the team and structure, let's return to our first pillar, innovation and Anders, over to you.

Hello, everyone. My name is Anders Rosengren, and I'm leading R&D at Sonova. It's really a true pleasure to speak to you today about what we are doing differently in innovation as the industry leader. Our focus is, I mean, really simple. It's about innovation for adoption. It's about deliver solutions people want to wear every day because they perform reliable, deliver outstanding experience, feel right and are effortless to use. So how do we make this possible? And this is really a combination of leading our audiological research, engineering at scale and establishing thorough clinical evidence. So starting with the research and science side of this. In the last year alone, we delivered more than 30 scientific conference presentations. We delivered 26 research study publications. And we hold over 1,800 active patents and design rights. This scale of research and science that feeds directly into our engineering organization. This is how we secure continued leadership, and this is how we enable to deliver world-leading products. So talking about products and moving on to our recent launches and talking about how we are leading the industry across functionality, design and usability. So starting with functionality, our [ Sphere ] platform that introduced direct speed extraction powered by our proprietary deep neural network chip. This is real-time AI engineered specifically for hearing. And talking about design. Here, I, of course, think about our Virto-R and how that demonstrates how high-performance or geology can be delivered in the smallest, most discrete personalized form factor and how we are using right fit AI-driven creation for our custom form factors. And talking about usability. Our amazing EasyGuard solution simplifies everyday handling with a seal dome that significantly improves wax protection and reduces services needs. With EasyGuard, we can reduce service time with up to 38%. And this is, of course, extremely valuable, both for our users and our audiologists. So is this where we are? No, of course, this is just a starting point. And I'm extremely proud looking forward to our next wave of innovation, where we will focus on real-time AI in a more compact form factor. Where we will focus on more aesthetic lifestyle aligned solutions and AI functions beyond speech noise. All of this is the design to drive even better performance. To grow adoption and increase lifetime value. So why do we know that this matters? Because research-driven, innovation-led development. This is how we keep on shaping our industry. With solutions grounded in clinical evidence and built for excellent performance made for everyday life. This is how we are shaping our industry. So moving on to the next slide. Let me take you through a very simple, but also very powerful idea. How better hearing supports quality of life. And the pyramid or the stairs on this slide that shows the progression. It begins with audibility, making sounds accessible. Then comes speech [ intelability ] understands words clearly. Then ease of listening, reducing the effort it takes to follow conversations. And above that, we see cognitive and physical well-being and at the very top, social participation and overall quality of life. So when we think about this from an R&D perspective, our philosophy is fairly simple, actually. It's the design technology that creates measurable gains at every single level of this pyramid. And even more importantly, we validate these effects with rigorous science. And our evidence is truly strong. In our latest pioneering studies, where we use Infinio Sphere, we see outstanding speech intelligibility and we do that even in fast dynamic conversations. And this is exactly the situations where people struggle the most. So this is where we really need to deliver value. We also show significantly reduced listening effort demonstrated not only through subjective ratings, but also by objective measurements of the blood flow in the brain. I mean this is truly cutting-edge research. It shows physiologically that our technology, our products, reduced neuro load in the brain of a user. This is pioneering research, and we were super proud to see this published earlier this year. We can also show improved ability to memorize words during dynamic conversations. And this is a clear sign that our products lower the cognitive load and frees up mental capacity for our users. This is true value. We also show exceptional sound quality and very high spontaneous acceptance at first fit. This means that people walk away immediately feeling comfortable with a sound experience. And most importantly, we also see a positive impact on social participation with Sphere. Our users report less fatigue, higher engagement, more willingness to take part in conversations and social activities. This is why we do our stuff. This is the core of our business. So why do we know this matters? Because these benefits, they accumulate. When listening becomes easier, people engage more socially. When they feel less fatigue, and when they experience a higher quality of life, these outcomes compound. And this is not something we just believe. This is something we can prove with hard science data. This is the value our innovation delivers, and it's the direct results of Sonova's long-standing commitment to scientific engagement and pioneering research. So with this, moving on to our AI leadership in hearing care. So our experience is that leadership in AI, this is not defined by one capability or one breakthrough. This is a system advantage that we built over years. We own and we integrate the full technology stack from our proprietary deep neural network silicon through a rich data pipeline, our real-world training data sets developed over years through our deep audiological expertise, our clinical validation and a full integration of algorithms, AI, DSP and system architecture. This full stack control allow us to optimize every layer for real-world performance. And this is something competitors cannot easily match. So let me break this down a little bit more for you. I mean, we are a leader in this field because we have the full stack control. We have our own chip. We have our own software. We have our own AI and this means optimization at every layer. It means faster iterations and enables us to drive better power performance trade-offs and something we deliver directly into the ear of our users. It's also built on our purpose-built training and data pipeline and our pioneering science. This is years of audiological research, real-world training data and clinical validation that ensures our models are tuned to hearing outcomes, not generic audio, and that's hard to copy. We also come from a leadership through our software first platform. We expand beyond speech and noise into personalization, context aware adoption and automation. And this keeps improving with every cycle. The result is continuous performance gains released after release. So why do we know this actually matters? Because this creates a compounding system advantage, our continuously learning data pipeline, our training environment keeps improving our models and create real-world performance gains, which in turn, of course, improves user outcomes. This cycle consistently reinforces our leadership. So to round off the segment. It's time to talk about how we are driving the next phase of adoption. How our innovation is building on a continued focus of connecting audiology and lifestyle as well as innovation based on feedback and data from users and retail network audiologists. Our Virto-R product has shown is really clear. When outstanding performance meets great design, demand rises and friction drops. And we will build on this momentum by expanding design beyond our Receiver-In-Canal portfolio into a much broader lifestyle and healthy aging solutions. At the same time, we see value shifting to software slowly. With our Infinio Sphere Ultra product, we deliver over-the-air updates. We deliver continuous performance improvements and deeper engagement throughout the user journey. This is extending life and value of the installed base. And finally, we are pulling together and building a cohesive digital ecosystem. We have devices, apps, fitting tools and support working together, really connecting to create a connected seamless experience for users and audiologists. So why do we know that this matters? Because if solutions look and feel great and if they are meaningfully connected in a digital ecosystem, more people will start and will stay with hearing care. This is how we are driving adoption, and this is how we are continuing to improve people's lives, and this is why we are a leader in the industry. Thank you very much. And with that, I'm handing back to Eric.

Anders, thank you very much. And let me now move to the Asia opportunity, an opportunity we will address in 2 steps. Today, our market share in Asia is well below our levels in Europe and the U.S. So the first step is simply to reach what I would call our normal share level. And how do we do that? By having the necessary focus that maybe was missing before by placing the right people on the ground by marketing our existing portfolio of products to the more affluent segments of Asia. And by adding solutions like Virto-R in markets such as Japan, to give you a concrete example, where we have recently seen high double-digit growth as a result. So step 1 is simply about having an appropriate focus on the region. Before I get to the next step, let me outline some key parameters of the Asian equation. Large and aging populations, low adoption, low awareness, sometimes challenging access and obviously a rapidly growing middle class. Which brings me to step 2, develop made for Asia solutions, products and cost-efficient care models tailored to local needs, affordability levels and just different consumer behaviors when shopping. This will be developing over the next 3 years. And in that context, I can share that we have just reached a general understanding with the Singapore Economic Development Board, EDB, to establish regional innovation center in Singapore. And this center will, amongst other initiatives, develop innovative quality hearing care solutions tailored to Asian needs. Sonova will lead on this initiative with very strong support from the EDB. Altogether, this creates a clear and profitable mid-term growth pathway for Sonova in Asia. And with that, let's turn to how we win locally in each market. To put it simply, hearing care is local. Country by country, the mix of channels, reimbursement models and customer expectations looks very different. And even within the country, each channel values different things and has different needs. That's the starting point for how we want to compete. If you look at the pyramid on this slide, this illustrates our wholesale playbook in one simple picture. To meet the specific needs of each channel we use a portfolio of clearly differentiated brands. And in doing so, we meet those needs precisely while minimizing channel conflict. With the multi-brand playbook logic defined, let's now look at how we unlock the wholesale retail synergies. A major advantage of our integrated wholesale retail model is the synergies it enables. And with the new leadership structure, the 4 regions, the new CMO and CDO roles and unified R&D function, all reporting directly to me. We now have the setup needed to fully capture those synergies. And let me give you 3 very concrete illustrations of what I mean. Let's start with synergies for innovation. Because we operate an integrated wholesale retail model, we get direct visibility into consumer needs and fitting behavior through our store network. Those insights flow straight back into R&D, giving us faster feedback loops, more targeted feature development and tighter coordination between platform innovation and real-world use. This is a clear advantage. What we learn in retail directly feeds our technology road map. Second, creating synergies for market activation. Our integrated model will allow us to run coordinated launch campaigns and deploy global marketing assets consistently in our stores and with our wholesale partners. This gives us optimized brand and product presence across channels. And this is exactly what we did when we launched Virto-R. And third, synergies for consumer reach. We have a unique tool. Our lead generation factory. And until now, it mainly sent leads to our own stores. Going forward, we will also use it to support our wholesale partners in areas where we don't own stores. That widens our reach and drives market share without adding physical locations. We are piloting this successfully in Italy and more markets will follow. And this brings me to how we want to scale retail in selected strategic markets. In any given country, why does scale matter in retail? Pretty simple. When at the right scale, everything improves. Overall cost per store goes down, local brand visibility goes up, cost per lead decrease, and we can attract the best talent. There is a clear correlation between optimal scale and profitability in retail. And our business in Germany is a good illustration of that. I could also have mentioned Belgium. So what we will do next is simple, we will replicate this playbook of reaching optimal scale in selected strategic markets. And with that, I hand over to Roberto, our Chief Operations Officer, to take us through the operations chapter.

Thanks a lot, Eric, and my real pleasure to be here today. I am Roberto di Fiore, and I joined Sonova in November last year. So yes, I am still relatively new to the company but really not new to the hearing care world, as I have been in operation in this industry since 2017. So I had the chance to experience what excellence looks like in operation in our industry. And in this regard, let me share something about Sonova. Sonova has a strong basis on which we can build on, and we have a number of opportunities that we can capitalize from. I will be back to design potential later but allow me to start highlighting something that is often underestimated. Hearing care is product-driven, no doubt about this. But at the same time, it's fundamental service industry. Customer experience is absolutely crucial, but not always given the strategic attention it deserves. And let me reflect on it with something indeed personnel. My dad was hearing impaired. And when he had this device out for repair to wait weeks to have it back was really painful for him and us whole. So I know firsthand that building the best-in-class customer experience in service and quality is vital and can make a competitive difference when it comes to customer loyalty. Therefore, our ambition in operation is bold and very clear to be the best in cost, on quality and on time [ machine ] for our customers and users. And this ambition will be built on 3 core pillars. Firstly, on quality, enhanced customer experience. We will focus on enhancing customer proximity where matters in particular, when it comes to custom manufacturing and service. This can be a true differentiator to be chosen over our competitors. At the same time, by fully digitizing sales and post-sales customer interaction through a unified ecosystem, we will make service significantly easier for customers and partners. They do want seamless, simple, predictable experience when it is after sales, repairs, customization and support. And by doing this, we create strong stickiness to be chosen again at the moment of the repurchase. Quality is a prerequisite, consistent on time is a must. Being close to our customer elevates service quality to be capitalized by consistently delivering on time. To secure this advantage, we are strengthening the resilience of our value system, enhancing interoperability across our sites and reducing geopolitical exposure by reinforcing our regional vertical presence. On quality, on time, while driving cost leadership and efficiency to the next level. We are accelerating our journey towards best-in-class efficiency in operation by specializing selected site through centers of excellence by expanding automation across manufacturing and beyond manufacturing and by advancing value engineering. Executing across these dimensions, we unlock significant productivity and reduce structural cost. This is the north star of our journey by being consistently on time, on quality, on cost, we can truly differentiate. But let me share also how to make our road map executed [ distributively ]. We have 4 strategic levers to improve productivity. Surely it's about footprint optimization Sonova has a strong foundation built through past investment. The next step is to maximize value by giving each site a clear mandate per each value stream. Some sites, focus on proximity adds on cost and outstanding efficiency and select sites on specialized capabilities. We have a clear road map to reshape our footprint, simplify intra and inter site flows to increase agility and reduce logistics cost. But let me share also the second lever. While optimizing our footprint, we identified significant untapped potential in our processes. We see clear opportunities to simplify and excel through end-to-end process streamlining through modernized forecast to planning with agentic AI through strengthening local for local to ensure cost-effective product availability while reducing working capital. While these actions increase speed and agility two things, customers immediately feel their bigger impact is cost reduction. By removing complexity, we free up resources that can be redirected towards strategic initiative. And for us, push automation is really strategic. We know that our industry moves fast with a high pace of innovation. This means full end-to-end automation is neither practical nor optimal but targeted automation will be a major accelerator. And here, we will focus on 3 clear opportunities. Reliability, automation must support our teams by making quality more consistent and less dependent on manual steps. Handling and sorting, this activity offer attractive returns when automated. And order entry and after sales, I have touched upon some minutes before. This is a big opportunity by digitizing and automating these processes, we significantly improve customer experience and transparency while reducing industrial and internal workload. This is not automation for its own sake. It is automation that simultaneously improve experience, quality, speed and cost. Last but not least, we will enhance engineering to increase value. Value engineering is where material cost and product competitiveness come into play. Our plan focuses on 3 priority actions: aligning our maker by strategy with the reshaped footprint, strengthening redesigned to cost across the existing portfolio and building multiple sourcing options, including regional suppliers to reduce risk and dependency. Value engineering has a significant untapped potential at Sonova, and we are committed to fully unlocking it. And what does all these mean financially? Bringing these 4 levers together, we are targeting CHF 90 million in annual cost savings versus current baseline at the end of year 4 with net savings already in year 2 while supported over the first 3 years by CHF 50 million of additional transformation investment. Are this target ambitions? Yes, they are, but they are achievable with the roadmap we have in place. We have a strong starting point, clear priorities, significant opportunities and even more importantly, the right outstanding skill set. I know the operation will play a decisive role in delivering on Sonova's new strategy and we will make it happen. I look forward to your questions in the Q&A session. And with that, it's my pleasure to hand over to our group CFO. Thank you very much, and to you, Elodie.

Thank you, Roberto, and hello, everyone. So let's dive into the financials, and I'd like to start with an update on our current trading. First, we have seen continued momentum in the wholesale Hearing Instruments business with a strong growth in the second half, well above the market. This momentum was driven by successful product launches, as you've heard previously in this presentation. In our retail business, Audiological Care, we have continued organic growth albeit versus a higher comparison base and with limited contribution from M&A. Consumer Hearing has returned to growth in the second half and following the decision to divest will be treated as discontinued operations in FY '25, '26 result. In Cochlear Implants, we have seen a challenging environment. with headwinds from the [ VBP ] implementation in China and upgrade sales in the CI segment declining due to product life cycle maturity and increased competitive pressure. Maintaining our 2025, '26 guidance, and we expect to come in at the lower end of the guidance range, as was previously mentioned. So let's now turn to the midterm, and I would like to give you an overview of our midterm targets. Excluding Consumer Hearing, we are targeting a sales growth of 5% to 10% CAGR and core EBIT growth of 7% to 12% CAGR, both of which are in constant currency. This is assuming a gradual market recovery over the course of 2026, moving towards a 3% to 5% in the midterm. The growth drivers are the ones you have heard throughout today's presentation. First, market share gains, supported by our accelerated innovation road map, the expansion of our portfolio and geographical expansion and then scaling our retail network through bolt-on M&As and greenfield openings. From a margin perspective, you have heard from Alberto the operation excellence program, which should bring around 1.5 percentage points of gross margin improvement by 2030. At the same time, we will make investments to enable market share growth and margin improvement with increased investment in R&D to fund also the modernization of the IT infrastructure and our digitization initiatives. Last but not least, we are introducing core EBIT as our key profitability metric, replacing normalized EBITDA. Core EBIT includes amortization, which gives a more comprehensive view of the economics of acquisitions, which are an important part of our growth strategy. And it will exclude restructuring and other nonoperational items, providing a clear view of underlying performance during transformation. So how do these elements translate into our longer-term growth ambitions? I have shared our midterm targets. And I now would like to explain the building blocks and how it reconciles with the CHF 6 billion sales ambition Eric talked about. Starting from our fiscal year '25, '26 revenue base, the path is built through several sources of growth. First, underlying market growth, which we expect to gradually move towards 3% to 5% annual growth. Second, market share gain. We expect this to contribute approximately 1 to 3 percentage points of additional growth. Third, bolt-on M&A and greenfield expansion, which we also expect to add 1 to 2 percentage points annually. Together, these elements define the range of our midterm targets and to reach the upper end of our ambition CHF 6 billion, we see additional upside from larger strategic acquisitions as well as from the full execution of our strategic initiatives. Let me now walk you through the building blocks behind our core EBIT expansion. We start with sales growth, which we expect to be in the range of 5% to 10%. From there, we will benefit from operating leverage driven by growth and innovation, contributing approximately 1 to 2 percentage points. And next, we see additional contribution from operations, footprint and supply chain optimization, adding around 2 to 3 percentage points. At the same time, we will make investments to support the growth path of the business and the strategic initiatives. First, in operations where we will invest CHF 50 million to drive the ambitious savings plan. Second, in R&D, where we will ramp up investments to accelerate and continue to develop our products and solutions road map. Third, in our IT infrastructure and digitization initiatives to strengthen our technology and data capability as we see this as strategic. This represents a margin investment of around 1 to 3 percentage points. When we combine these elements, they create a clear pathway from revenue growth to earnings growth, supporting our core EBIT CAGR target of 7% to 12%. Now I'd like to cover an important topic as we are a Swiss-based company reporting in Swiss francs, and we have seen significant currency movements this year. First, Switzerland remains a core strength for the company. It is a headquarters and primary center for innovation, giving us access to world-class talent pool, a strong innovation ecosystem, a stable macroeconomic environment and a predictable and competitive tax framework while also benefiting from a strong Swiss franc that provides an attractive currency for acquisitions. At the same time, we have a structural currency mismatch in our cost base. Today, around 15% of our global cost base is denominated in Swiss francs, while less than 1% of our revenue is in Swiss franc. Given the structural strength of the Swiss franc, this is something we need to manage proactively. We have, therefore, consolidated all mitigation measures into a dedicated program to strengthen our natural hedge. Our ambition is to reduce the Swiss franc share of our global cost base from around 15% today to below 10% over time. We will do this through procurement currency optimization, better alignment of our cost base with our revenue currencies, especially as we grow and the expansion of international capability hubs. Importantly, this does not change our commitment to Switzerland. These measures will not eliminate the impact of the Swiss franc, but they will meaningfully reduce the structural exposure over time. Let me now turn to our capital allocation framework. Our approach reflects a disciplined prioritization of capital to support growth while delivering attractive shareholder returns. First, to support organic growth and making investments. I have covered those in the previous pages. Second, with retail bolt-ons. We will continue to scale our store footprint with investments of approximately CHF 80 million to CHF 100 million per year. Third, strategic M&A. We will pursue selective larger acquisition in strategic countries alongside targeted technology acquisitions that support our innovation roadmap. Fourth, an attractive dividend policy with a payout ratio of around 40%. Fifth, maintaining a healthy balance sheet targeting a net debt-to-EBITDA ratio of 1 to 1.5x. And finally, share buybacks. Given our strong M&A pipeline, we do not foresee share buybacks in fiscal year '26, '27. This will be reviewed thereafter once the leverage target is consistently met. So I would like to conclude with a brief reflection of our financial foundation. Over the past years, Sonova has delivered consistent and resilient financial performance with sales growth of around 9% CAGR and core EBIT margins averaging above 20%. We have maintained strong cash generation with free cash flow conversion of around 90%. Our balance sheet is disciplined with leverage consistently in the range of 1 to 1.5x net debt to EBITDA. And importantly, we have delivered attractive returns with return on capital employed between 18% and 20%. The strong financial track record provides the capacity and the flexibility to continue investing in our strategic priorities and support the next phase of growth and shareholder returns. With that, I will now hand over to Eric for the conclusion.

Elodie, thank you very much. And let me bring it all together as we close. First, we have a clear ambition, an ambition of reaching CHF 6 billion in revenue by 2030, '31 through strong capabilities we are building across the company. Second, we have a sharper focus by concentrating on Hearing Instruments and Cochlear Implants and divesting consumer hearing. We are creating a more focused Sonova, directing our resources to where we lead and where we create the most value. And third, we have confidence in our future. With a clear strategic direction, our technology leadership, the talent across our entire company, our financial strength and the right structure in place to fully unlock the potential of our integrated wholesale retail business, we are well positioned to successfully shape the next chapter. So think of Sonova as a leader with a significant upside and a team that is ready to deliver. And with that, I want to thank you for your time, your interest and your trust in Sonova. And we will now have a few minutes break before we continue with our Q&A. Thank you very much.

Thank you, Eric. We will now take a short break to allow those of you who would like to ask questions to dial in. [Operator Instructions] [Break]

We are now ready for the Q&A session, which will last approximately 45 minutes. I kindly ask you to limit your questions to 2. And once again, today's event is focused on our strategy and long-term vision. We therefore ask that questions focus on the refreshed strategy presented today. And with that, I'll hand over to the operator.

[Operator Instructions]

It's Hassan Al-Wakeel from Barclays. Two from me, please. Firstly, can you talk about how you think about the phasing of these top line targets given there is clearly a softer market backdrop that has lasted a lot longer than we expected. How have you factored this into your thinking alongside the potential for pent-up demand longer term as well as Amplifon's acquisition of GN Hearing? And then secondly, in terms of your core implies decent margin expansion over the medium term, how much of this margin expansion is expected from structural cost actions? And how do you think about pricing and mix impacting the margin? And what about next year given this market softness is the lower end of the range is more reasonable?

Thank you very much for your question. So you can imagine, I will not speak in details about next year because this is not the right setting to talk about the guidance to come. But to go back to your first question about the phasing of the top line, we expect to see an acceleration coming from both the market recovery and also for the different initiatives that we have described that will deliver more and more effects over the next 4 years about the short term or the shorter-term perspective, we expect a recovery of the market towards the end of 2026 calendar year to be specific. About margin expansion, maybe Elodie, you can reflect on this?

Yes, I'd be happy to. So on the margin expansion, as I covered in the bridge, we have 3 main elements. One is related to operating leverage. One is related to investments we are going to make. And I'm going to focus on the third one because I think that was the core of your questions. The third one is related to our operations excellence program and supply chain. And from this part, we do expect, as we covered during the presentation, to get a benefit of about CHF 90 million per annum run rate towards the end of our midterm. So that will require some investments as we discussed, CHF 50 million with a ramp-up of savings starting in year 2.

And Amplifon's acquisition of GN Hearing and how you intend to offset that and whether you see any opportunities from the tie-up?

Yes. So in general, we do not comment on the strategic decisions made by market participants. But I would say that we are not particularly concerned by what happened. We see opportunities as a result of this announced acquisition. We're struggling to hear you if you are trying to speak now. We cannot hear you.

Can you hear me now?

I think we can hear you better now. Go ahead.

So this is Julien Ouaddour from Bank of America. So I have a couple of questions. So my first one is on the midterm sales outlook. So clearly, just exceeds a very -- an extremely strong product cycle where wholesale has grown well above market. And I think today, you're close to a record high market share. The question is how do you foresee the threat from competitors to potentially catching up on real-time AI, for example, during the next subject plan? And how can you be sure to accelerate the growth from such tough comps and current high market share, especially to reach the upper end of the guidance, which roughly 8% to 10%. And I want to understand if it's based on the pipeline you have in terms of products or it's more on the new market penetration you like mentioned for Asia. Also, if you can just size the age opportunity for us, that would be great. And the next question is, I mean, looking at the CHF 6 billion sales target by 2031, using the midpoint of the top line targets, it seems that you will need roughly CHF 800 million coming from larger acquisitions on top of the bolt-on. I mean, can you just give us a little bit more like color on what are you looking at? I mean there is not a lot of large assets left in the hearing aid space from what we understand. So any idea or like any examples of where you could go to find this CHF 800 million would be super helpful.

Julien, thank you for the many questions in one go. First, you said CHF 6 billion target, we call it CHF 6 billion ambition. This is what's going to drive all employees, all teams around the world at Sonova to get their CHF 6 billion. Then let me go back to the concerns that you seem to raise about the fact we have a very strong market share based on innovations that we have launched over the past 6 months to 18 months. The pipeline is rich. And without going into too many details, you can expect us to come with a new platform before the end of this calendar year. Additional designs to the pipeline that we have and more. So we are rather confident that thanks to a very strong pipeline we will continue to acquire a share over the last 12 to 18 to 24 months. Going into the granular details of what brings what Asia and so on and so forth, we will not share these details right now. And about the size of acquisitions, you've understood. I hope we were clear that we want to scale up in retail, where we believe in selected markets, we have not reached optimized scale, which drives clearly optimized profitability. So this is what we are talking about, which is bigger than typically bolt ons. And as you know, typically, on an annual basis, the bolt-ons bring CHF 80 million to CHF 100 million. So think about larger retail acquisitions in -- of that type. Elodie, anything you'd like to add?

As I explained, I mean, we do are targeting 1% to 2% from bolt-on acquisitions and greenfield openings. That's in our path to our midterm targets. And beyond that, see potential upside from larger acquisitions. But you can understand, Julien, that we will not go into the details of that part.

Sure. I thank for that. I mean maybe the very quick follow-up on like on the first question is, I mean, how can you get to the upper hand of the top line guidance, like the 8% to 10%. I mean looking at the history, it seems to be -- I mean, pretty optimistic scenarios. So I just want to understand exactly how and if it can get from '27 onwards or is more at the back end, as you said in the first question from Hassan. So just trying to understand how to get to the 10%?

Understood. Market growth, 3% to 5%. We outperforming this market growth, thanks to a very strong pipeline and a number of initiatives we could mention building a competitive edge in service, for instance, bolt-on acquisitions and then these larger retail acquisitions that we spoke about. That's pretty much the model that gets us to the very upper end of the target that we have described. And clearly, an acceleration as you go towards the end of this next cycle of 4 years. Again, Elodie, anything you'd like to add?

I think, Julien, when we prepared the bridge of how we see our revenue growth going forward, you have seen the 4 elements that Eric has just described. And we put in these 4 elements because all of them are important and all of them will contribute towards us reaching the midpoint and above of the midterm guidance. First, we talked about underlying market growth. Our assumption is 3% to 5% with gradual recovery. And then for market share, getting 1% to 2% from bolt-on and greenfield 1% to 2 and then potential for a larger acquisition. And as well, by the way, the full potential of the execution of our strategic initiatives.

Next line to be open is from Graham Doyle.

It's Graham for UBS. It's just a follow-up to Julien's question just there. So in terms of the sort of larger scale M&A, it'd be good -- I know you obviously can't talk about specific targets. But I think it's useful to get an outline of what your financial constraints or what you think your sort of rules are. So in effect, if I look at $800 million, I think about some of the deals done recently to get that revenue, that would imply like potentially a quantum of like 3 turns more leverage. So would you guys be comfortable being north of 3x net debt to EBITDA for any given period? And could you maybe talk about the kind of return metrics, the ROIC you would use to look at that? And then just a second question, and it's just because given the world we're in now, we've got spike in rates, and it might be more difficult to do this type of M&A. Where in that 5% to 10%, do you think organic growth should likely land if that's possible even just a range.

Maybe Elodie you take the first question?

Yes. So I'll start with the M&A side. Rest assured that our M&A views will remain very disciplined. And I have talked about our very healthy balance sheet between 1, 1.5x EBITDA. We have a very strong cash generation, and this gives us some sizable firing power to do some targeted M&As. But again, we will be extremely disciplined as we look into it. And that is why part of it is that we are moving with our key profitability metric to core EBIT. So we will include in that amortization, which will give a view of the economic performance of the M&A and really be transparent about what those are. So that's going to be our approach when we look at our M&A. Eric, there was a second part of the question, I believe.

Yes, which was about organic growth, and you could refer to Slide 29 and have it in front of me. We won't put it back on screen, but I think there, we were quite explicit but what we expect in terms of organic growth, if you assume a market growth of 3% to 5%, we intend to add 1% to 3% coming from market share gains, and you can do the math to make it simple.

Just another one, sorry, Eric, just on that leverage, is there -- in order to get some of these deals done. I just want to understand, I think shareholders want to just be comfortable. Is there a hard stop on a leverage level you will not go above just to understand that.

As I said, we will remain very disciplined. I've shared in our capital allocation strategy that our broad allocation will maintain a very healthy balance sheet, 1 to 1.5x and that will be our guiding light towards our acquisition strategy.

Next line to be open is from Andjela Bozinovic.

This is Andjela from BNP. Just 2 questions on my side. Maybe the first one is on the market. So you assume now 3% to 5% growth. Can you confirm this is in value terms? So it's lower than previously communicated 4% to 6%. Can you just give us the main drivers that impacted this lowering of the market assumptions? And confirm that 3% to 5% is also for 2026. And the second one is maybe a follow-up on Julien's question on innovation in this space. And particularly the pace of introducing new products. You have previously commented on around like 24 months launch window. Do you see this changing with the increased innovation space, not only for you but also for the competitors? And when you said you were going to launch a new product by the end of this fiscal year, that's in RIC's platform. If you can just confirm that.

Andjela Bozinovic, thank you very much for the questions. I will start with the second question. So yes, indeed, you've seen that Sonova historically has been extremely consistent in delivering relevant innovation every 2 years. But if we look back at the very recent past here, was launched in August 2024 and less than 14, 16 months later in October, we came up with an upgrade. And we will come up with a new platform before the end of this calendar year as I have explained this. So we're going to be very consistent at our pace of innovation. And what's your question is and what about software innovation, on air upgrades and so on and so forth, this will also be part of our future equation. Maybe, Anders, you want to add to this?

Yes. So I mean, as you said, we are continuing our release cycle and strengthening that. And if we look ahead into the road map that we have, we will see Sphere in a more compact form factor. We will see AI beyond speech in noise, and we will see more aesthetic design form factors as well. So we will continue well beyond just Receiver-In-Canal portfolio. But we will definitely maintain also the cycle then and accelerate that.

And Andjela Bozinovic, about your question about market growth, 3% to 5%, yes, value term versus 4% to 6%. Yes, we are cautious for the short term. But you've seen the demographic fundamentals that I've highlighted early in the presentation. So the category will keep growing it's going to recover, as I said, we believe, towards the end of '26 calendar year. There's been many hypothesis about the slowdown. But yes, 3% to 5%. This is where we think it's going to be heading.

Next line we are opening is from Veronika Dubajova.

I'll keep it to 2, please. The first one is I just want to understand the reiterated fiscal '26 guidance and whether that includes or excludes the divestiture of the consumer health business if you -- would you can clarify whether those growth rates are including or excluding consumer health care? And then maybe just a brief or on what the most likely outcome in your mind is when it comes to the consumer health care asset. Is this a monetization? Is this just a wind down and kind of when you'd expect to have an update on that divestment. That would be my first question. My second question is sort of related a little bit to your addition of M&A and growth, in particular in Asia Pacific and how that guides into operating leverage. I think when we look historically, obviously, what we tend to see is prices outside of the U.S. tend to be ASP dilutive expansion both in wholesale or retail when it comes both to you and your peers and some of these [ OUS ] and outside of Europe markets has tended to be margin dilutive. So just help me reconcile that kind of -- I get the higher ambition on the revenue growth makes sense. I'm having a hard time bridging the gap from the higher growth ambition on revenues to an appropriately sized ASP and mix dilution on the margin front. So I think that's probably Eric for you and maybe for Elodie to comment on as well.

Yes. Veronika, thank you very much for these questions. Very useful because they give us a chance to react or reflect on reports that we have published recently. The first point I would make is that not being Asia focused would be sacrificing a significant potential for growth over the next 5, 10, 15 years. So it would be a massive strategic error, not to invest in Asia. Now specifically, I hope I was extremely clear it's going to be a 2-step process. The first step is just by making sure that Sonova is more focused on Asia than it was before. Our share there is absolutely not what it should be. And this is not about operating at lower ASP. This is about operating in a more focused manner in Asia. I gave the example of the success of Virto-R in Japan recently which got us to grow double digit in this market where you can be profitable. So Asia doesn't equal lower profits, especially when you operate in the premium tiers of the market, and we were not as focused as one could be or should be in Asia. And then over time, it will be about benefiting from these obvious demographic trends and needs emerging from Asia, potentially at lower ASP, but also with lower cost to serve. And by the time we really get that, we will have optimized a number of items that are building the cost to serve from COGS to simply service and delivery. So don't expect a drop of profitability over the next 18 months or 24 months because we will grow in Asia. On the first question about [ CHB ] and how it's going to be part of 2026 guidance and so on and so forth? Maybe -- maybe Elodie, you can take this one. I will just make one point. It's not going to be a complex carve-out at all for us.

Yes, Veronika if I understood your question correctly regarding CHB. First of all, I think you would like to know if for our current trading in the fact that we maintain our guidance for 2025, 2026, if those numbers are included. And here, the answer is yes, we have done this update on a similar scope as what was previously communicated in terms of guidance. So no changes there as we wanted to be transparent also on our current trading. As I mentioned, CHB will be treated as discontinued operations in this fiscal year. And as we give you our earnings update in May when we announced our earnings for the full year. You will, of course, get a lot more details about how this impacts exactly the performance.

Can you just quantify the profitability of Consumer Hearing and what we should be moving into discontinued ops. And then I'm sorry, I just want to understand, are you expecting any proceeds for a sale? Or is this a one down?

So first, about what broadly the impact is. I just want to say that, first of all, Consumer Hearing represents about roughly about 5% of our revenue for Sonova. So this is a relatively, I would say, limited impact on the sales side. And on the profitability side, I think it was said at the time, roughly after the acquisition, that the impact of Consumer Hearing was about 200 basis points dilutive to Sonova. And I think that's an assumption that I would not go back on. So overall, I would say, about 5% of the top line for Sonova with a dilutive profitability. Proceeds not expected in the fiscal year 2025, 2026 and obviously more to come in the next fiscal year.

So the next question here will be [indiscernible].

It's Jack Reynolds-Clark from RBC. My first question was on penetration. Could you kind of talk through where you expect penetration to get through across I guess, the various severity levels within developed markets? And what do you think needs to happen to reaccelerate penetration and over what time frame? Then kind of joint to that. In the other markets, how long does that take to kind of trend towards developed markets? And then my second question was just kind of a clarification on the wording of guidance. Do you expect EBIT to grow at least 7% every year, year-on-year for the medium term? Or is the 7% a floor for the average growth rate over that time period?

Thank you for your question. So I will let Elodie answer the question about EBIT penetration. The barriers to penetration are pretty well described. And their importance vary country by country, but you can list awareness, access, affordability, clearly stigma and a very complex and sometimes conversion consumer journey and consumer experience. So by working on these 5 dimensions, we can increase penetration. An example of what we did recently to anchor my comments in something real, Virto-R and I remember when we launched it at [ Yuha ] back in October, I faced a bit of skepticism. But I could see that we had a fantastic design, a small device, performing extremely well, a very cool design. And again, I will repeat that this is an example of a product that moves the needle, that gets people in the category, whereas maybe before they were not considering it because the product looks cool. So this is about stigma. This is about design. When -- and so a lot of people in the more mature markets are hesitant because they don't want to look old because it's complicated. It's all of these we have to tackle. And you heard Anders talking about a different take on design, we will be looking at. If you look at what will be, what are the faster-growing markets, the emerging markets, there, it's a full spectrum. It's access that needs to be reflected on. It's certainly affordability and probably a different way to provide access over time and I will stop here, I've said enough, I believe. Maybe Elodie, you can reflect on the EBIT question.

Yes. I think your question was about the 7% to 12% midterm guidance regarding core EBIT. And here, it's a 7% to 12% CAGR in the midterm. This is what we would like to communicate. Clearly, they will be phasing in some of it, as I explained because some of the -- one of the building block is the operational excellence program that will ramp up over the period. So that will contribute more as time goes by. For specific phasing, I will not comment in details on next year's guidance, we will communicate that when we announce our earnings in the month of May.

Next line will open is from David Adlington.

Two, please. So firstly, you talked about large-scale M&A, but also as part of that, you talked about strategic opportunities. I want just you could expand a little bit. I mean -- a second is coming back to Asia. On Slide 19, you talk about the Phase II and resource...

David, if I may, could you repeat the question? I'm sorry, it was hard for me to understand. Sorry about that.

So the large-scale M&A that you're talking about to get to that CHF 6 billion as well as large-scale M&As about other strategic opportunities. Can you expand on what you mean by other strategic opportunities? The second question, and you're talking about Phase 2 and resource deployment for 3 years, could maybe quantify the amount of investments that might be required?

Yes. You can imagine that we are not going to disclose the details of M&A opportunities that we see ahead of us. So the only thing I will repeat is what we have shared so far which is that in retail and in selected strategic markets, we want to get to the right scale that allows us to have optimal profitability as we've been able to achieve it in a number of markets. So we have a playbook. We have a model. We're going to replicate this. I will not comment any further for obvious sensitive competitive reasons about maybe resources. That was the second question.

I think part of your question, if I understood well, was related to other strategic opportunities as we described it on our building blocks towards the CHF 6 billion potential. And here, it's the realization of the full potential of our strategy all the different building blocks that you have seen throughout the presentation and realizing the full potential from that, we also see as a potential for upside towards the CHF 6 billion. So this is what I wanted to cover. In terms of investments, we have planned a number of investments, as I've explained, to support our growth initiatives. And these are investments in R&D. We have investments in our operations excellence program, we have investments towards IT transformation and digitization, and this includes also the ramp-up of our Asia presence, as Eric explained before.

I would just add that we need to keep in mind that Sonova has got a very strong cash conversion. It's a very profitable organization and that gives us firing power without challenging our leverage, just to make things very clear.

Next line to be open from [ Henrietta Rumberger ].

It's Henrietta Rumberger from AWP. I have one on the -- what you said about strengthening your natural hedge in terms of currencies. What does it exactly mean? Are you planning to produce more in other countries. So do you plan to shift something like that? Maybe you can sort of elaborate a bit more on that. And the other one is the Asian expansion which markets are you already present at? Are you tackling or targeting special markets in Asia to start with? Is it like India or China? And related to that, I remember reading in the press release that you said, first of all, you want to target the more wealthy ones, and then you want to go into mass business. Is that not rather dangerous thing to go into that business there?

Henrietta, thank you very much for your question. I will start with Asia expansion. Again, as I've explained it and you have this on one of the slides we presented, our market share in Asia is not at all at the level of where we have in other markets. I will be anecdotal here, but I think it will tell a clear story. So far, the Head of Asia Pacific for Sonova was based in Switzerland. It means that we were not focusing enough on Asia. So step 1 is to increase the focus on Asia. To think Asian for Asia. To have people on the ground who are Asian experts, and I gave the example, and I will give it once more of what we did recently in Japan, by bringing [indiscernible] Virto-R, a custom product, which is typically the type of product that the Japanese market appreciate very much. And there, this is sold at very high ASP. It's very profitable. So there is no issue about playing in Asia for Phase 1. About Phase 2, we could ask ourselves another question. We all know about the demography in Asia. We all know that Asia adds tens of millions of people reaching their 65th birthday every year. Do we want to leave this space wide open to others? Or do we want to be an actor? What can we learn from that? How can we bring the best of Sonova and becoming more Asian. And that's also the intent we have with this initiative, we are starting supported by the Singapore government and its arm called the Economic Development Board. So not thinking Asia for the next 5 to 10 years would be, in my view, a significant strategic mistake. About manufacturing, first question of yours about manufacturing in Switzerland, manufacturing elsewhere. Gradually what we do in Switzerland will be building a center of excellence. In Switzerland, and I go back to what Roberto explained earlier on, this is where we are going to create, invent, redesign so that we can then export at some point when it's ready in lower-cost manufacturing. But no drama to be expected Henrietta, you have natural attrition, there is aging of our population, so don't expect anything dramatic in step 1 to be specific.

The next question will be from Susannah Ludwig.

I have 2, please. I guess, first on your innovation road map, you talked about more compact AI solutions and more personalization. Can we assume that a more compact format can come as early as your next platform launch for RIC products? And then maybe could you elaborate on sort of what types of personalization might be possible? Is there a future where devices could learn to prioritize voices of close -- the users close contact? Or sort of what other signals might be able through personal to help devices know what sounds to prioritize? And then second, just as a follow-up to the questions on retail acquisition. I understand you do not want to give away too many details, but I was wondering if you're able to share anything about the balance between further retail in Asia versus elsewhere?

Susannah Ludwig, thank you for all these questions. So Anders, I will let you reflect on the more detailed questions about innovation, but I will just make one comment. In the VA where Sonova has a very strong share, we have been in spite of the bigger size of Sphere and we know it's about 20% bigger than the competitors' product, we have been very successful, and that's on the back of a superior audiologic performance. The AI keeps learning and then eventually needs less consumption for sound performance. So yes, you can imagine that in the next years, we will come up with a smaller device which will address the weakness of the product, which is nevertheless very, very successful. About retail acquisition, I'm sorry, Susannah, I will not tell you much more than what I have said already for obvious reasons. Maybe you want to reflect Anders on the other parts of the question?

Yes. No, as you said, Eric, about getting to a more compact form factor has, of course, been our major next step and it's going to come here with the next platform launch. And this is something that we are building. I talked earlier about our continuously improving AI, our data pipeline, our training pipeline, how we continue to improve and that helps us create a moat here but also drive forward. That also reflects, of course, into additional capabilities. We talked about personalization, and I need to take the balance here between what we can resolve or make visible today and where we need to come back at a later stage. But this is something that we are working on, where we see AI going well beyond speech and noise as a next step.

Next question will be from Martin Parkhoi.

This is Martin Parkhoi from SEB. I just need to come back to the form factors again. because it's part of this new strategy, but are also, of course, acknowledge that it takes time to develop new products. So do you already have new form factors in place that you started way before that Eric came up with this new strategy, maybe even before we entered Sonova? Or is this something which are more to be realized in the second part of your new strategy plan? And then also that, if you look at form factors, is it just a matter of looking at what is out there now and then make a best-in-class of that? Or can Sonova will make new form factors, which we haven't heard about before, of course. And then just to be 100% sure on the comment on the smaller version of Sphere of what the next name will be can you do it smaller and then keep the same level of performance as you have today. And then, Eric, of course, I know that you would like to talk too much about Amplifon and GN and I will not ask you how it will impact you. But how do you think it will impact the industry because we, of course, know that GN has been the [indiscernible] if I can say that, -- it's not much in German, but I cannot work for decades for GN, will it actually be positive for the pricing on the wholesale side in the market that you take away this pressure that normally is in the industry?

Martin, great. That's many questions and some very pointed. So no bringing innovative, relevant form factors. This is not just in my head. I was extremely lucky when I came on board, and I'll go back to this image I was using before. You get into a new house and you see everything that is great and everything that can be improved and that leads to many upsides for us, but also great things. And Virto-R, for instance, was an example of I come into the company and presented this product and I realized how great a success it can be and maybe it was not as much perceived that way. And there are other products in the pipeline not in 3 years but I won't tell you one exactly, but you know, soon. The second question was about is it looking at what currently exists and improve it? Or is this about going different beyond? I trust you've understood that I've got a team surrounding me that is extremely ambitious and so you can imagine that we are reflecting on what could go really beyond what currently exists. I think I've answered the question about the smaller version, could it perform as good as the current one for Sphere? Yes, absolutely, maybe even a bit better. And then about [indiscernible], I will not comment too much. I don't think it's appropriate to do so. It's too premature. I would just say, though, that this confirms what I have described and explained, I hope convincing all of you that Sonova is very well positioned to act as an integrated wholesale retail players that we have practiced that for a while in the way we are ahead of the curve and we're going to double down on this and yet without forgetting our wholesale partners.

Last question from Daniel Jelovcan.

Daniel Jelovcan from ZKB. Two questions. R&D synergies you mentioned between implants and instruments I mean, over the last 20 years, I heard there's a lot GN and Cochlear had it actually never worked. Of course, for Sonova it's different because you own the brand, but I just wonder how that works in daily business. I mean there are still in the U.S., I guess. So that's the first question. And the second question is about you talked well about multi brands, which is not a surprise with your background, of course. But how easy is it to establish brands in Asia? I mean, demand has the Philips brand, WSA has the Siemens brand every Chinese knows that brands. I'm not sure what brands you will bring in markets like China, if it's also Fnac in the second run, maybe with a lower version? Or do you revitalize some older brands like even in [ Argos ] brand and so on?

Thank you very much. I will start with the multi-brand question. A brand is only as good as the substance it has behind it to make it strong. It's not good enough just to put one brand on the same product you are selling and another one. And I will stop short of telling too much here, but we have clear plans ready to execute and you will see a first move before the end of this calendar year in that space. And then if I may, you quickly jumped to China. Asia goes well beyond China. And I would say that what we do in China will be specifically for China. And there, it's not maybe 1 or 2 brands you need, but maybe more, and you have to be extremely creative. But as you may remember, that's the game I have or a play. I have practiced in my past quite extensively. About R&D synergies between the Hearing Instruments and the implants. We are in a unique position where we own both the Cochlear business, and we are the designer of the hearing aids. And for a number of reasons, we have not enjoyed the synergies that can come from this. In terms of organization, our first decision was to have Anders who was next to me today, supervising both and looking at what can be done in that space over the next few years. Maybe, Anders, you want to add a few comments to this to put more meat on the bone.

Yes. No, but we are now looking into how we can continuously accelerate, see road map building on our leadership in Hearing Instruments. And of course, I cannot go into details here, but there are significant opportunities that we see ahead of us here to really deliver more in the Cochlear Implant business.

Okay. We are closing the Q&A session. And I'll hand back to Eric now for the closing remarks.

So to all participants, thank you very much for your attention. Thank you for the questions. I would just close by repeating that we are very ambitious. At a time where conversations were rather pessimistic, if not negative, about what we firmly believe is a category that will continue to grow. And we intend to keep leading in the premium segments, but also be more creative so that we can really serve the demographic wave that are coming our way. I hope you've seen that with my 3 colleagues, I hope you sense that we have a very cohesive team, very international, and it's the same if you go beyond and you look at the larger Executive Committee group, we are committed to perform and deliver profitably for our shareholders. Thank you very much.