Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Amplifon First Half 2021 Results Conference Call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Ms. Francesca Rambaudi, Investor Relations Director of Amplifon. Please go ahead, madam.
Thank you. Good afternoon, and welcome to Amplifon's conference call on first half 2021 results. Before we start, two logistic comments. This morning, we issued a press release related to our results, and this presentation is posted on our website in the Investor Relations section. The call can be accessed also via webcast, and dial-in details are as well on the website and on the press release. I have to bring your attention to the disclaimer on slide two, as some of the statements made during this call may be considered forward-looking statements. Please also let me drive your attention to the fact that this year we are also reporting 2019 income statement data for greater comparability purpose to give relevant impact of the pandemic on 2020 financials. From this quarter, we are also reporting some income statement data without Elite.
The commentary will be therefore also based on these figures. With that, I am now pleased to turn the call over to our CEO, Enrico Vita.
Thank you, Francesca. Good afternoon, everyone. Welcome to our quarterly conference call for the Q2 results. Today we have many things to share and discuss with you. First of all, our results for the quarter. By far, the best quarter ever in the history of our company. In fact, in comparison with the Q2 2019, our revenues increased by circa 20% at constant exchange rates, and the organic component of the growth was truly outstanding, above 15%. This growth was also very well-balanced across all the regions and all core markets. Once again, I believe that also during this quarter, our revenues have led us to significant market share gains in all major markets.
In terms of profitability, we continued to reap the benefits of the huge work done on our cost base since the very early days of the pandemic, making our company even more efficient and leaner than before. The increase in profitability of 180 basis points is even more remarkable in consideration of the significant investments in marketing and also in several key initiatives at corporate level. The cash generation was also super, allowing us to achieve a very healthy net financial position in the region of EUR 620 million. Beyond the numbers, three very important moves that confirm and put into practice three of our strategic beliefs. The first belief I am referring to is about the value of market leadership in core markets. The second belief is about the value of business simplification to favor speed and agility of execution.
The third, and most probably, the most important one, is about the belief that the direct relationship with the end consumers is what really matters in our sector. It is under this light that you should see our acquisition of Bay Audio in Australia. That will give us the opportunity to create, in combination with Amplifon and Attune, a fantastic platform to boost growth and profitability and win in that core market. Also, our second JV in China, another small but meaningful step to build a strategic presence in that high-potential market. Finally, it is also under this light that you should see our decision to exit the last wholesale business left within our group, and I'm obviously referring to Elite in the U.S. To talk about this, we can now move to the following chart number four.
In fact, today we are announcing our intention to wind down Elite, which clearly has been a very difficult decision, a decision forced by several observations and facts. First of all, you know that Elite sells hearing aids mainly to independent practices, a channel that has been constantly declining and will continue to decline as a consequence of the consolidation process that has been in place in our industry now for a while. You also know that Elite has been clearly dilutive to our profitability and growth in the recent years. Above all, Elite business model is clearly no longer strategic for us because lacks the direct relationship with end consumers that I mentioned earlier on.
I say that it has been a difficult decision, but I'm convinced that it has been the right decision for our company because it will allow us to continue and accelerate our journey of transformation in the U.S., focusing all our resources, investments, talents, and managerial time on our two most potential and successful businesses, Miracle-Ear and Amplifon Hearing Health Care, operating in the two fastest-growing channels of the market. I now hand over to Gabriele to give you more details about the implications of these moves on our numbers.
Thank you, Enrico, and good afternoon to everybody. Moving to chart five, we have a look at Elite's key financials and the accounting treatment related to its wind down. In 2019, Elite reported revenues of $78 million and an EBITDA margin of around 17%. In 2020, with the pandemic, sales were down to $60 million and EBITDA to around $6 million, representing around 3.5% and 1.5% of group's revenues and EBITDA. Clearly, in the last years, Elite has been dilutive to Amplifon's fast-growing and profitable business. The wind down of Elite, which represents a separate major line of business, will be treated as discontinued operation following the IFRS 5 accounting principle.
In particular, Elite profit and loss data will be excluded from the group's consolidated profit and loss in the comparison periods starting from the date of effective discontinuation, with the result of discontinued operation to be reported in a separate profit and loss line named net result after discontinued operations. As of today, we expect potential cost associated to the discontinued operations of Elite to be around EUR 10 million. The vast majority represented by non-monetary cost, including goodwill write-off. The wind down of Elite business is currently expected to be effective and completed by the end of 2021. Moving to chart number six, we have a quick look at the group financial performance in Q2, which, as already commented by Enrico, posted outstanding results.
Since the performance of Q2 2020 was heavily impacted by COVID-19 outbreak, I will comment our result primarily versus 2019, representing a much more meaningful comparable basis. In the quarter, at constant Forex, revenues increased by around 20% versus 2019, with an excellent organic growth at 15%. EBITDA recurring came in at EUR 136 million with a margin of 26.3, up 180 basis points versus 2019. Thanks to the strong revenue performance, coupled with the structural efficiencies and productivity enhancement derived by the measures implemented for the pandemic. The strong EBITDA increase was achieved even after sizable investment in the business, with marketing investments up by 20% versus 2019 and several strategic initiatives ongoing. Let me also draw your attention in this slide on the pro forma figures for the period.
Excluding Elite from both Q2 2021 and comparison periods, revenues at constant Forex would have been up 20.9% versus Q2 2019, fueled by an impressive organic growth at +16%. EBITDA recurring margin at 26.8%, up 400 basis point versus Q2 2019. Moving to the following chart, we have a look at our financial performance in H1. Revenues at constant Forex were up over 17% versus 2019, with a well above market organic growth at around 12%. M&A contribution up to over 5% and Forex impact at -1.8%. EBITDA recurring amounted to EUR 233 million, up around 25% versus 2019, with margin at 24.3%, up 180 basis points versus H1 2019. Looking at pro forma figures excluding Elite, revenues at constant Forex would have been up 18.6% versus 2019, fueled by an over 13% organic growth. EBITDA recurring margin at 24.8%, up 200 basis point versus H1 2019.
Moving to slide number eight. We have a look at EMEA excellent performance. In Q2, revenue growth was 12.1% constant Forex, with a well above market organic growth at 9.5%. M&A contribution was 2.6%. Excellent organic growth was reported in France, also driven by the recent regulatory change, Spain, Portugal and Belgium. EBITDA amounted to EUR 112 million, up around 32% versus 2019, with margin at 26.4%, up 460 basis points versus 2019, thanks to improved efficiency and productivity, as well as to the outstanding performance of Spain and operating leverage. In H1, revenue growth was around 11% at constant Forex, with a strong organic growth of over 8%. EBITDA amounted to EUR 195 million, up 33% versus 2019, with margin at 24.3%, up 470 basis points versus 2019. Moving to slide number nine, we have a look at Americas' really impressive performance in Q2.
Revenue growth was around 53% at constant Forex versus 2019, with a stellar organic growth at 39%, thanks to an excellent and well above market performance in the U.S., driven by the outstanding performance of Miracle-Ear. Strong performance was also reported both in Canada and LatAm. M&A contribution was around 14% versus Q2 2019, primarily reflecting the PJC Hearing acquisition. Total FX was negative for over 14% due to the Euro appreciation versus U.S. dollar and LatAm currencies. EBITDA amounted to EUR 23.5 million, with margin at 24.7%, up 90 basis points versus 2019. Looking at pro forma figures, excluding Elite, revenues at constant Forex could have been up by 72%, followed by an impressive 54% organic growth, around 2.5 times the EBITDA recurring margin at 27.8%, up 170 basis points versus 2019. Moving to slide number 10, we have a look at America's performance in H1.
Revenues were up by 44% at constant Forex, driven by an excellent organic growth of around 29%. EBITDA amounted to EUR 40 million, with margin at 23.1%, up 100 basis points versus 2019. Looking at pro forma figures excluding Elite, revenues at constant Forex would have been up by 64% versus 2019, followed by now standing 44% organic growth. EBITDA recurring margin at 26.2%, up 170 basis points versus 2019, and 310 basis points higher than EBITDA, including Elite. Moving to slide 11, we have a look at APAC performance. In Q2, revenues were up 28% at constant Forex, driven by an excellent organic growth of around 22%. M&A contribution related to Attune and accounted for around 6.6% versus 2019. Forex was positive as well. In the quarter, Australia, New Zealand, and China posted double-digit organic growth versus 2019.
EBITDA amounted to EUR 80 million, with margin at 29.3%, up 80 basis points versus 2019. In H1, revenue were up 23% at constant Forex, driven by a very strong organic growth of 15%. EBITDA amounted to around EUR 34 million, with margin at 29.7%, slightly contracting by 10 basis points versus 2019, reflecting the continued strong investment in marketing in Australia. Moving to chart 12, let me spend a few word on another milestone in Amplifon growth story, the acquisition of Bay Audio announced last July 12. Bay Audio represents a truly unique opportunity for us, allowing us to build another company stronghold in Australia, one of our core markets.
Bay Audio leverages on innovative retail model based on stores located in high traffic premier and urban shopping malls on a highly recognized brands, thus representing the ideal addition to our existing businesses of both Amplifon and Attune. Similarly to Amplifon, Bay Audio also represents a fantastic story of growth. In the last five years, Bay Audio revenue CAGR has been above 20%, despite the impact of the pandemic in 2020 and 2021. In the last financial year, they posted the revenues slightly above AUD 100 million with a strong profitability. Even more significantly, revenues for these financial years, free from pandemic, are expected to grow by around 30%. As already communicated in terms of timing, we currently expect to close the transaction by the end of this year. Moving to Chart 13, let me also spend a few word on another small but meaningful recent M&A transaction.
Our second joint venture in China. This transaction represents another important step in our journey to build a leading position in the strategic Chinese market, which represents a sizable medium-term opportunity given the estimated market size and its outstanding growth potential. The joint venture, named Sound Bridge, of which we control 51%, operates 45 high-quality shops located primarily in the Fujian and Zhejiang region. This second joint venture perfectly complements our current presence in the Beijing area, thus allowing us to reach a total network of around 100 points of sales and an expected combined turnover run rate for 2021 of around EUR 15 million. Moving to Slide 14, we appreciate the Q2 profit and loss evolution.
Total revenues increased by 17.8% to EUR 519 million, with an excellent 15.1% organic growth versus 2019. Considering the pro forma discontinuation of Elite, revenues increased by 19.1% with an organic growth amounting to 15.9%. The structural efficiency and productivity enhancement derived by the measures implemented last year led the EBITDA recurring margin at 26.3%, with an improvement of 180 basis points versus Q2 2019. Recurring EBITDA increased by 26.5%, around EUR 29 million to EUR 136 million. Reported figures include around EUR 1.8 million cost related to the GAES integration and to the redefinition of the corporate structure of Amplifon S.p.A. Considering the pro forma discontinuation of Elite, EBITDA margin reported an outstanding 26.8%, hosting a growth of 200 basis points versus 2019.
Following the strong investment plan during the past quarter, D&A increased by around EUR 7 million, leading the current recurring EBIT to around EUR 82 million, with a growth of 35% or EUR 21 million versus 2019. Net financial expenses accounted for around EUR 7 million, leading profit before tax to EUR 76 million from around EUR 55 million in 2019, hosting a 38% increase. Tax rate ended at 26.8%, leading recurring net profit at over EUR 55 million, with a 36% increase versus 2019. Moving to Chart 15, we see the H1 profit and loss evolution. Total revenues increased by 15.2% to EUR 960 million, with an excellent 11.9% organic growth versus 2019. Considering the pro forma discontinuation of Elite, revenues increased by 16.8%, with an organic growth amounting to 13%. EBITDA margin ended up at 24.3%, with an improvement of 180 basis points versus 2019.
Recurring EBITDA increased by 24.7% to EUR 233 million. Reported figures include around EUR 4.3 million cost related to GAES and to the redefinition of the corporate structure of Amplifon S.p.A. Considering the pro forma discontinuation of Elite, EBITDA margin reported an outstanding 24.8%, hosting a growth of 200 basis points versus 2019. D&A increased by around EUR 15 million, leading recurring EBIT to around EUR 126 million, with a growth of 32% or EUR 30 million versus 2019. Net financial expenses accounted for around EUR 40 million, leading profit before tax to EUR 112 million from around EUR 83 million in H1, posting therefore a 35.5% increase versus 2019. Tax rate ended at 28.1%, leaving net profit at over EUR 80 million, with an increase of 35% versus 2019. Moving to chart 16, we appreciate the cash flow evolution.
Operating cash flow after lease liabilities was in the period equal to around EUR 155 million, posting an improvement of EUR 61 million or 65% versus 2020, which reflected action implemented in Q2 last year to mitigate the COVID-19 impact. The comparison versus H1 2019 shows an outstanding improvement of EUR 55 million, leading to a performance more than doubled versus 2019. Net CapEx increased by around EUR 50 million to around EUR 36 million, leaving free cash flow at EUR 119 million versus EUR 72 million last year, with a growth of EUR 47 million or around 65% versus the previous year. Versus H1 2019, the improvement of free cash flow is over 100%.
Net cash out for M&A was EUR 43 million, driven by bolt-on acquisition in EMEA versus EUR 42 million in 2020. The sum of the share buyback program and the dividend distribution amounted to EUR 63 million, leaving net cash flow for the period to over EUR 13 million versus EUR 23 million in H1 2020. NFP ended at EUR 620 million, with an improvement of around EUR 145 million versus H1 2020. Moving to chart 17, we have a look at the debt profile trend and the key financial ratios. As mentioned in the previous chart, the net financial debt closed at EUR 620 million, with liquidity accounting for positive EUR 470 million, short-term debt accounting for around EUR 120 million, and medium long-term debt accounting for around EUR 970 million.
This confirmed the very strong financial profile of the group, with over EUR 730 million financial headroom, including undrawn RCF, following the continuous NFP improvement and the completion of the refinancing program executed last year. Following IFRS 16 application, lease liabilities amounted to EUR 426 million, leaving the sum of net financial debt and lease liabilities to EUR 1.05 billion. Equity ended up at EUR 813 million, with an increase of around EUR 30 million versus December last year. Looking at financial ratios, net debt over EBITDA ended up at 1.23, with a further reduction versus December 2020 by around 40 basis points, representing the best result after the completion of the successful GAES acquisition. Net debt over equity ended at 4.74, posting a reduction versus 0.80 at the end of 2020.
The inclusion of the price that Amplifon will pay at the moment of the B ay closing could leave the pro forma leverage at 1.84, well below 2.0. I could now hand over to Enrico for 2021 outlook.
Thank you, Gabriele. To conclude, some key messages and our outlook for 2021. First of all, let me say that we are very happy about the progress we are making on our strategic journey. The acquisition of Bay Audio in Australia represents another key milestone in the history of our company, and we are all excited about the tremendous new opportunity that this acquisition will create to drive growth in the Australian market. Our second JV in China. Here we are building our success of tomorrow, leveraging on the clear drivers supporting the future growth of these markets. Finally, we are obviously extremely happy about our result of the second quarter. Without a doubt, a truly outstanding quarter.
It is also because of these results that today we are also very pleased to be in the position to materially upgrade on the same consolidation basis our guidance for 2021. In fact, with regards to revenues, we increase our guidance to reflect the higher organic growth to EUR 1.99 billion versus the previous EUR 1.93 billion. Of course, in the light of the decision to discontinue Elite, 2021 sales for the full year excluding Elite, will be in the region of EUR 1.93 billion. Of course, I need also to highlight that given the still uncertain situation with regards to the COVID pandemic, I need again to stress that this guidance is valid under the assumption of no further material impact of the COVID-19 pandemic in the second half of the year.
Also at the same time, I need also to highlight that this guidance, it is not including any contribution from the consolidation of Bay Audio, since we expect the closing to happen at a certain point during Q4. With regards to profitability, we are also increasing our guidance in terms of profitability, and now we expect to achieve remarkable recurring EBITDA margin in the region of 24.8%. To conclude, I can also tell you that July is going to be strong, very strong. I can say that so far, so very good. With this, I leave back the floor to Francesca.
Thanks, Enrico. Before I turn the call to the operator in order to open up for the Q&A session, please let me remind you that as indicated in today's press release, we will hold our 2021 Capital Markets Day on September 13th. The CMD will be held virtually, and the agenda as well as the details will be published on our website closer to the date of the event. Finally, for the Q&A session, please kindly limit your questions to maximum initially, in order to give everybody the opportunity to ask questions. Now, I turn the call over to the operator in order to open the Q&A. Thank you.
Excuse me, this is the Chorus Call operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star one on their touchtone telephone. To remove yourself from the question queue, please press star two. Please pick up the receiver when asking questions. Anyone who has a question may press star one at this time. The first question is from Niccolò Storer with Kepler. Please go ahead.
Good afternoon, everybody. Two questions. The first one on your new guidance, updated guidance. Basically, while a few months ago your guidance was implying a deceleration in the remaining part of the year, this time it seems that you are expecting a continuation of H1 trend into the second part of the year in spite of a tougher comparison compared to the second part of 2019. The question is, what led you to change your mind on that? What are you seeing? Which are the signals that you're getting from the markets? The second one is on Elite. If you can elaborate a bit, first of all, on the reason behind the sharp decline in revenues and profitability over the past few years, that probably goes beyond COVID-19. Why winding down the operation and not selling them?
The last, if this move could have some indirect impact on your managed care business. Thank you.
Thank you. Thank you, Niccolò, for your questions. Very clear. With regards to the first question and therefore the increase in the guidance, you are absolutely right. Now we are more positive than we were just a few months ago about this second half, despite of the higher comparison base with 2019. The reason why we are more positive is because we see in basically many markets, a recovery which is stronger than maybe we were expecting some months ago. On top of that, let me say that we are extremely pleased about our ability to overperform the market growth. Just to highlight the most clear example about this, just look at our performance in the U.S., which is, in my opinion, really truly outstanding and well above the growth of the market.
It's a combination of a market which is definitely positive, but also we are more positive in general because of our ability to overperform, also the market from a performance point of view. This, as I said, it is particularly true if you look at the numbers in the U.S., but let me also add that I'm extremely happy about the performance in all the three regions. I'm extremely happy about the performance, basically, in all the different markets. I think that now the different operations are really performing very well and above the market growth. With regards to the second question, and therefore, why we have decided actually to discontinue Elite. Clearly, Elite was a unique in our group. Elite was the only wholesale business.
Elite, in particular, was not responding to what we believe is the clear value in the value chain in our sector, which is about the direct relationship with the end consumers. Which is basically what we do in all the rest of our group. Elite was a wholesale business with, I would say, limited possibility to differentiate from other wholesalers. Which is also our view on the market, which is served by Elite, which is the independent channel. We have always said that we see this channel actually contracting and declining over time, which is exactly what is happening and what has happened, and maybe accelerated even more during the pandemic. The fact that Elite is also dilutive to our numbers, both in terms of growth and also in terms of profitability, I think, is a consequence of all what I've said.
As I said also during my initial speech, I personally believe in the big value, not only of the direct relationship with the end consumers, but I also believe a lot in the value of simplification of the business model in the U.S., which will allow us to focus all our resources, all our investments in the two channels, which will be definitely the fastest growing channels also in the future. We could keep Elite, but I think that would not be the right decision for the company, because in this way, we are able to unleash the potential of the other two channels even more than in the past.
Thank you.
The next question is from Veronika Dubajova with Goldman Sachs. Please go ahead.
Hi, good afternoon, Enrico, Gabriele, thank you for taking my questions. I will keep it to two, apologies. They're both a little bit short term, just, one, want to understand a little bit better the cadence of growth through the quarter. Obviously, there's quite a lot of noise, would love to sort of know the exit growth rate that you saw at the end of the quarter, and maybe which region you saw the most significant acceleration in as you moved through the quarter. My second question is just looking at the third quarter, and in particular, looking at the European growth rate. Obviously, it's a pretty tough comparison. Q3 last year in Europe was actually a pretty strong quarter for the industry and for yourselves.
Just kind of curious, your degree of confidence in your ability to deliver the sort of mid to high single-digit growth rate that we're used to in that region. Just broadly, how you're thinking about phasing of growth in Q3 versus Q4. Thanks so much.
Thank you, Veronika. Also, I needed to give you the credit about one question that you asked me a few quarters ago, when you asked me why you are not discontinuing Elite. I have to say that you got to the point maybe earlier than others. Anyway, coming back to your questions. With regards to the trend during Q2, I have to say that it was a more an even trend. Not a clear acceleration from April to June. All the three months were very strong, and as I also said during my speech, we see this trend actually to continue through July, which, as you know, it's an important month for us. As I also said, we see this kind of trend, basically in all the key markets, in all the three regions.
I would like also to stress the fact that we believe that we are now performing much better than the average of the market. There is definitely an element of performance, which is also supporting our revenue growth. With regards to the second question, and therefore about the Q3, Q4, in particular with regards to Europe, we are clearly very confident that we can continue to grow in Europe. We see encouraging performance in, also here, in all the main markets. We are very positive. Also July, also Europe was strong. Definitely we feel quite confident about our guidance for the full year and for the guidance for the second half. Of course, I need again to highlight the fact that we are not envisaging and not including at this stage, this guidance on one side, any major disruption coming from COVID-19.
I hope that there will be not. Also on the other side, a potential upside would be about the consolidation of Bay Audio at a certain point during Q4, which is not included in this guidance.
Understood. Thank you so much. I'll go back into the queue.
Thank you.
The next question is from Aisyah Noor with Morgan Stanley. Please go ahead.
Great. Thank you. My first question was on the EMEA business. What was the contribution from the France health reforms in the quarter? In other words, excluding that benefit, what would your growth in EMEA be? I'll leave it there.
Well, of course, France continued to perform very strongly also in Q2 because of the effect of the reform that took place in France. Anyway, also excluding France, our performance was very positive. I would say mid in the region of mid-single-digit for sure. France was definitely a strong contributor to the growth, but also all the other markets performed very well.
Okay, if I could just quickly follow up on EMEA. Your own brand product line in Spain, is this still on track to launch in the second half? If so, do you have a date in mind?
Yeah, absolutely. We are perfectly in launch. We have just launched the Amplifon Product Experience in Portugal, and I have to say that perhaps it has been the best launch so far because the penetration increased from zero to almost 85%-90%, really not anymore in months, but in weeks. With regards to Spain, we are perfectly on track and this is one of the major launches in the group, and this will happen in Q4, October, November.
Great. Thank you.
The next question is from Kit Lee with Jefferies. Please go ahead.
Oh, thank you guys for taking my question. My first one is just on the market trends. You mentioned July is still very strong. What are your thoughts about August and maybe September as well, just given that we heard some companies talk about people taking holidays or vacations and they want to take a break. Did you see that happening in August or September? What do you think about the run rate maybe in those two months versus July, please? My second question is just on China. I think you've done two JVs now in the region. Do you still have more JVs in the pipeline or would it be more organic development from here? Thank you.
Thank you. Well, with regards to the first question, therefore, let's say the trend in Q3, yes, I confirm that July is going to be very strong. Let me say continuation of what we have experienced in Q2. We expect also the same trend throughout all the quarters. We do not see any change in August or September. With regards to China, for sure, we will accelerate on our greenfield expansion. Of course, we are also looking for further targets, but I need to highlight that these targets are not big targets. You should expect more JVs with companies of the same size of what we have done so far. Anyway, with regards to China, we will also give you some more dates during our Capital Markets Day in September.
That's good. I guess, if you were to think about the region on the three of you, appreciate you might want to wait until the Capital Markets Day, should we be thinking about 400, 500 stores in 3 years time, that kind of magnitude? Any color that you're willing to give at this stage?
Well, as I said, China will be one of the topics that we will touch on our Capital Markets Day, I prefer to maybe wait until then to give you more information.
All right, understood. Thank you.
Thank you for your question.
The next question is from Julien Ouaddour with Exane BNP Paribas. Please go ahead.
Yeah. Hi, good afternoon, and thank you for taking my question. Can you maybe elaborate on your, I would say, very strong performance in the U.S. this quarter? I think that the reference market was up 20% versus 2019. You almost doubled it. Yeah. Also, what's your view for the market for the coming quarters, and should we expect a similar momentum? Then my second question was on China, but you seem to prefer maybe to wait until the Capital Markets Day. It was just if you can confirm that your ambition is still to grow China, I would say, around 10% of group sales over the mid to long term. That's all. Thank you.
Thank you, Julien, for the questions. With regards to Americas, yeah, I can confirm that sell-in figures, I need always to clarify that, are telling us that the market grew in the region of 20%. We clearly outperformed the market, and we are extremely happy about that. The outperformance of the market from a pure organic viewpoint is, in my view, coming from all the work that we have done in the recent years, in the recent months, which in my opinion, will be also accelerated by the decision that we have taken today about Elite.
Elite, at the end of the day, was also a distraction for our management. The decision that we have taken today will allow us to further accelerate our growth w ith regards to the U.S., what I can tell you is that on top of the contribution of the consolidation of PJC, we are also enjoying a very strong organic growth coming from PJC. We are extremely happy about this acquisition. We are extremely happy about how PJC now, which is part of the corporate retail network, is performing. All in all, let me say that in the U.S. now, everything is working pretty well, and I expect us to continue to outperform the market also in the near future. With regard to China, yes, the ambition is always the same, for sure.
As I said, I think also many times this is a medium-term project, will be a balanced mix of new openings and therefore greenfield operations, but also small deals. As I said, there are no big targets in this market, and therefore it will be, let me say, a long journey, but I think a very important journey for our group.
Thank you very much.
The next question is from Domenico Ghilotti with Equita. Please go ahead.
Good afternoon. Two questions. The first is related to the guidance. In particular, if I look at the first semester, excluding Elite, you are already at 24.8% EBITDA margin. You are implying, say, the same level of profitability despite, say, typical seasonality and also in your sales guidance, there is clearly a second half that is stronger than Q1. Could you elaborate on the reason why second half profitability should be really similar to the first semester? The second is on the decision to terminate Elite. Do you have any, say, structural negative from the volumes that you are losing?
Okay. With regards to this second question, not at all. At the end of the day, Elite is a wholesale business. Therefore, also, let's say, in direct competition with the job of the manufacturers. At the end of the day, it was not really very synergic also from a purchasing point of view. No, I do not expect any kind of negative impact from that. Also, in consideration of the very high growth that we are delivering, in consideration of the fact that now we have also additional volumes coming from Bay. No, not at all. Actually, I think that also in this respect, the decision will give us benefits rather than negatives. With regards to the profitability, there is no particular reasons.
At the end of the day, what I mean is that we will continue. Actually, we want also to accelerate our investments, in particular in this second half. We think that there is a clear opportunity at this stage to further push and consolidate the market, therefore we will go for that.
You are implying additional spending compared to the first semester?
Yeah. Well, for sure we will continue to invest. There will be some investments more in terms, in particular, of marketing, also some key initiatives. Let me say that we are super happy about our objective for this year in terms of profitability. 24.8% EBITDA margin, it is something that just a few months ago or a few years ago, we could not even imagine. We are very happy.
Now, also maybe, looking at the full year, Domenico. Elite was diluting our business by around 20 basis points full year. I know that in the 6 months it was a little bit more, but on average it's 20 basis points. If you look at our previous guidance, 24.5%, 24.7%, at the end, the average is 24.6%. The 20 basis points more are reflected in the improvement. Of course, what Enrico said about our ability to invest more in order to get more, is something pretty constant. As we always say, of course, thanks to scale and other aspects, we can have higher profitability, but investment, of course, are key in order to enlarge the competitive gap versus the other players.
Okay, thanks.
Thank you.
The next question is from Oliver Metzger with Commerzbank. Please go ahead.
hi. Good afternoon, everybody. Thanks a lot for taking my question.
Good afternoon.
First one is just on our marketing expenses. Where you are right now with regards on the level of where you want to be? The second one is on the recent executive order in U.S. on the hearing aid liberalization. It's still a limited amount of information. Question to you, do you have any idea how FDA thinks with regards to maximum amplification for these OTC devices? Do you have any insight, any idea on that? Thank you.
Yeah. Thank you, Oliver, for your questions. I will start with the second one about, if we know anything about, which will be the draft regulation from the FDA. The answer is no. Of course, FDA is doing their job, and we are just confident that for sure what will be the final provision will be in the interest of a safe and efficacy of the solution in the interest and the consumers. No further information at all. With regards to our marketing expenses, we have increased our marketing expenses versus 2019 in the region of 20%, which is in line with the increase of the past years. This is the trend also that you should expect also going forward.
Okay, great. Thank you very much.
The next question is from Michael Hennig with Stifel Europe. Please go ahead.
Yeah, thank you. Good afternoon, everybody. I have two, please. The first one is related to Elite. What was the reasoning behind the decision to just close the Elite hearing business down and just not sell it or try to monetize the assets? The second one is a quick add-on the French reimbursement scheme. Do you see the positive development to continue into July, or do you expect it to be mainly limited to H1 with a normalization in H2?
Yeah. With regards to the second question, the French reform, we still see a very strong trend also in July. Of course, our assumption is that the kind of growth that we have experienced in the first half will not continue at the same pace in the second half. For sure, we are also still very positive about the growth of the market in the second half because of the change in regulation and the reform. With regards instead to the first part of the question, why we did not consider a sales process. We have reviewed all the possible internal and external options, including the option of sales. This alternative did not materialize because we did not see enough interest from potential parties interested in acquiring the business. At the end of the day, we thought that the best option was the wind down.
Okay, thank you.
As a reminder, if you wish to register for a question, please press star one on your telephone. Once again, if you wish to ask a question, please press star one on your telephone. The next question is a follow-up from Domenico Ghilotti with Equita. Please go ahead.
Yes, I have, say, broader question on, say, the 2022 outlook, in the sense that how do you see the trends that we have seen, for example, the very, very strong growth in North America, both for the market and for you, the contribution from the France regulation. As a particularly challenging. How this is affecting your ability to grow at the usual rate entering into 2022?
Well, let's say that definitely there are some positive effects supporting the performance in 2021. We have also to consider that in 2021, the pandemic was not over. It's not over yet, actually, and we still see time to time some sporadic lockdowns in Australia. We see some slow down in that market or in another market, et cetera. Still despite of what you mentioned, we are also positive about the next year. Let me ask you to wait until September at our Capital Markets Day to give you some more granularity about how we see the next future.
Okay. Thank you.
Thank you, Domenico.
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