Good afternoon everyone, and welcome to our conference call following the release of our IR Outlook for 2025 and Interim Report For H1 2025 after market close yesterday, for the call today we plan to run through a presentation followed by Q&A session as per usual. The presentation should now be available on our website.
We plan for the call to last. No more than one hour in total. Including the Q and A session. Please limit yourselves to no more than two questions at a time. Thank you.
On the call today we have Søren Nielsen, our President and CEO, René Schneider, our CFO, and myself, Gustav Høegh from the IR team. That is all for the practical element, and with that, over to you, Søren.
Yeah, thank you very much Gustav and welcome everybody. Agenda today: business highlight, key financial takeaways and sustainability advancements, and then business area, a little more details and call on that before René will go through group financials and I will finish off with the revised outlook, and then we step into Q and A. Business highlight for Demant in first half of 2025. Number one headline is a global hearing aid that grew below the normal 4%- 6% growth expectation. This is purely attributed to various elements of macroeconomic uncertainty and turmoil in global trade, et cetera. that have led to consumers being less hesitant to Hearing Aids or postponing their upgrades. Hearing Aids, we saw good growth in unit sales, although growth was negatively impacted by mix effects that led to a lower ASP. This is purely attributed to market share gains outside U.S.
and lower growth in U.S. that leads to a decline in our global ASP that outbalanced the growth coming from selling more units. Hearing Care grew in line with the market in first half with some growth deceleration from Q1 into Q2, partly driven by the current environment and consumer cautiousness. The effect was particular in U.S. I will say be careful not to over interpret. There's always a little bit of timing and whether things close in March or April. Look at the H1. I think most importantly, Diagnostic continued to be impacted by negative market developments, particularly in the U.S. Also macroeconomic uncertainty, which has led to postponement of investments, good order book, but lower execution than planned and expected and normal. We see many reasons for these things being pushed a bit out in time.
In June, as already announced, agreed to acquire the KIND Group, one of the world's leading retailers Hearing Aids with around 650 hearing clinics, primarily in Germany. Key financial takeaways from the first half: putting all this together, group organic growth of 0% which is below expectations due to the lower than normal hearing healthcare market growth and lower sales to a large U.S. retailer. Group gross margin declined 0.8 percentage points, which is slightly more than expected following the unfavorable geography and geography mix changes, especially Hearing Aids, which led to the already spoken to lowering of our global average selling price. OPEX's very strong control and following the line from last year so we saw just 1% organic growth reflecting a lower than lowering of the run rate into the year and tight focus. Reported growth was 4% and that's primarily due to acquisitions.
EBIT before special items DKK 1.849 billion. EBIT margin before special items contracted again. We had to sell more units to deliver the same revenue and therefore a negative impact on profitability of the business. This comes again from unfavorable mix changes in geographies, meaning in which countries we sell what, and therefore lower than planned operating leverage. Despite lower profitability, we have delivered very solid cash flow from operations of a little north of DKK 1.5 billion and free cash flow of DKK 1.126 billion. The outlook: we have adjusted the expectation for the global hearing aid market from previously 1%- 5% growth in value to now 1%- 3%, and our EBIT due to the development in geography mix adjusted downwards from previously DKK 4.1 billion- 4.5 billion to now DKK 3.9 billion- 4.3 billion.
Share buyback, as announced in June, paused following the agreement to acquire the KIND Group. Sustainability progress in first half: we have helped more people hear better. The pool of people that wear a hearing aid from Demant have grown positive and reasonably in line with expectations. The Scope 1 and 2 market-based greenhouse gas emissions have decreased by 5% as we have managed to increase our share of renewable electricity by 5% or increase our share of renewable, reduce the emitting part, and this is in line with our expectations. Number of highly exposed employees trained in Demant's code of conduct have reached 94% and we will soon have the target of 100% achieved. Business area review: starting with the global hearing aid market in H1 illustrated in the table, we saw a Q1 of 2% with a very negative development in the U.S.
commercial market of - 5% and VA - 1%. North America in general going down 3% and Europe in the softer side of the normal range of 4%- 6%. Here in second quarter, we have seen almost in line with expectations a somewhat normalization of the U.S. commercial market. Still a soft VA channel, but a Europe that have not delivered the growth despite the strong growth in France, then rest of Europe have not lived up to expectations. We see contraction in several markets, again attributed to consumer cautiousness driven by macroeconomic uncertainties. ASP development for the global market still assumed to be negative with 1% for the half year. In value at 2% growth for the first half year. In Europe, expected strong in France, and NHS growth was negative due to very strong comps. Excluding France and NHS, growth decelerated.
It was still slightly positive in Germany, but downwards, and for a number of other European markets. Growth in North America, as already said, accelerated. In Canada, we saw a negative development in Q2, also driven by macroeconomic uncertainties. Rest of the world saw normal growth despite flattish growth in China and Japan. In Australia, growth was negative. We estimated several export markets saw good growth. Hearing Aids, we saw again unit growth in Q2 being strong. We clearly took a global share in market share in units. However, with a continuous unfortunate development in the mix of geographies growing outside U.S. in total and in markets with less strong ASP. We saw negative growth in both U.S. and some of the European markets. Canada still delivered strong growth. Looking at the Hearing Care in second quarter, yes, a slower momentum, but don't over interpretate.
It is also some timing of closing orders between the first and the second quarter. We see still some challenges in generating traffic from new users, and we attribute this to the continued macroeconomic uncertainty that impact users and make them more cautious, and a little more than normal have chosen to postpone their first hearing aid further, and also some upgrades are being prolonged. Growth mainly in units, but we also saw a slight ASP uplift due to also geography mixes. We saw good growth in France, which accelerated due to the uptake in the market. We saw strong growth in Germany. We highlight here Sweden because of changes in local regulation. North America, negative growth in U.S. due to consumer cautiousness, but also some timing of closing of orders, and then negative growth in Canada due to negative market development.
Strong growth in China driven by ASP tailwind and slightly negative growth in Australia. Diagnostic in second quarter continued the headwind from soft market developments, especially in U.S., so growth decelerated from Q1 to Q2 in line with the market growth rate. Growth impacted by negative market development, particularly in the U.S. where macroeconomic uncertainties led to a lower level of investments in equipment. We simply see again orders being postponed, owned and installed later than expected. Of course, we hope and assume this will pick up if some more clarity around the financial development in the U.S. returns. Europe is positive in France, some negative development in the U.K. again, also NHS being a little tight on investment in new equipment. Strong growth in several medium-sized markets in Europe, negative growth in the U.S., and this is by far the biggest factor.
Together with Canada and North America in total, Asia Pacific outside China is doing fine, but in China still impacted by not a sufficient product range of made in China products to participate in all government tenders. With that, over to you, René.
Thank you, Dan. Starting with the revenue in the first half year, we report an organic growth of 0%, which was below our expectations, and where in particular it deviates from our latest expectations was a lower than normal hearing healthcare market growth and also lower sales in particular to a large U.S. retailer. The acquisitive growth contributed by 3%, primarily related to Hearing Care, but we also saw small positive contribution Hearing Aids. We continue to see headwind from foreign exchange rates with a - 1% due to the adverse development in, again, particularly the U.S. dollar. Our gross profit in the first half year was just above DKK 8.5 billion, which is flat versus first half year of 2024. The gross margin declined by 0.8 percentage point versus last year.
While we did expect a decrease due to a particularly strong gross margin in the first half year of last year where we had a high-end hearing aid product launch, this development was slightly worse than we had expected. The gross margin decline is primarily the result of ASP headwind Hearing Aids as already reviewed, and also a slight decrease in the gross margin in diagnostics when it comes to FX. It also had a slightly negative impact on the gross margin. When we speak to our normal 76%- 77% gross margin range, you will see that we are in the very low end of that normal range, and when we look into H2, we also expect to be towards the lower end of that range.
On the operating expenses in the first half year, we have managed that tightly, and we thus increase our group OPEX by 1% organically, again reflecting the low run rate going into the year. Following our cost saving effort in the second half year of last year and also our continued focus on cost management, acquisitions added 4% in line with our acquisition strategy. Also here we see a negative, you can say, effect from FX. Maybe also here comment on what the run rate into H2 is. We estimate for now that when we look at the actual reported operating expenses in total, it will be very much in line with what we saw actually reported in the first half year. Sequentially, no growth in the reported number on OPEX for the group, which is a demonstration of our continued commitment to strong cost savings effort.
It's important to highlight that despite this, we continue to invest in future hearing aid introductions. That brings us to EBIT before special items. It was in the first half year DKK 1.849 billion, which is a decrease of 11% compared to the same period of last year and an EBIT margin contraction of 2.3 percentage points. The EBIT margin before special items was negatively impacted by lower than normal market growth, lower than planned operating leverage as a consequence of market growth, you can say, as well as an unfavorable geographical mix. Exchange rates also significantly impact our group EBIT with around DKK 50 million in the first half year, of which most relates to the second quarter. This is, you can say, an FX impact that would also continue into H2 with a similar quarterly impact. We did not recognize any special items in the first half year.
On the cash flow side, we continue to be very strong, actually a slight positive growth in cash flow from operations of 1% due to strong net working capital management. We continue CapEx investment in line with our mid to long term expectations of 4%. We had cash out related to acquisitions of just shy of DKK 850 million related to bolt-on acquisitions in Hearing Care, very much in line with our strategy. We did buy back shares amounting to DKK 582 million until we suspended our share buyback program in connection with our agreement to acquire the KIND Group. On balance sheet items, quick note, it increased reportedly 1%. 2% from organic growth, 3% from acquisitions, and -4% from FX. The main swings are other current assets, mainly due to unrealized gain on financial contracts from our hedging activities.
The net working capital declined by 3% and our gearing at the end of the period was 2.5, which is within our mid to long term target of 2- 2.5. With that, I think we had the outlook.
Yeah, thank you very much, René. Many things are unchanged. Of course, as already stated, we have had to downwards adjust our expectation for the full year market growth, previously 2%- 4%. We take one more percentage off the units and therefore lower the expectations in value to 1%- 3% and maintain our view of the French market that still in units deliver high single digits, on the tracking to deliver high single digits unit growth for the full year. Cash allocated to acquisitions as earlier announced is higher than normal. Also, the in previous statement announced acquisition of KIND. Nothing else to that.
Again, due to the unfavorable mix change, change in geography, and having to sell more units to get to the same revenue, we have had to lower our expectations for full year profitability from previously DKK 4.1 billion- DKK 4.5 billion to now DKK 3.9 billion- DKK 4.3 billion. I think that's it for now. Let's go to the Q and A session.
Ladies and gentlemen. At this time, we'll begin the question and answer session. If you would like to join the question queue, you may press Star and then one using a touch tone telephone. To withdraw your questions, you may press Star and then two. If you are using a speakerphone, we do ask that you pick up your handset prior to pressing keys to ensure the best sound quality. Once again, that is Star and then one to join the question queue. We'll pause momentarily to assemble the roster. Our first question today comes from Hassan Al Wakil from Barclays. Please go ahead with your question.
Good afternoon. Thank you for taking my questions. I have two, please. Firstly, just on Costco, when we spoke last, René, you were not expecting material share changes in this channel given Sonova's return and had baked in some uncertainty into the guide.
Has the share change surprised and become more material? Do you think this has now stabilized? Secondly, could you elaborate on trends across key European markets? I know you haven't specifically called out a COVID anniversary effect, but do you think this is significant in some of the markets you operate in? Which markets do you believe you're gaining share in Europe? Thank you.
Maybe if I can allow to follow up on the question. Even though it was semi addressed to one in the large retailer you mentioned, it was not our assumption that there would be a full addition of one more supplier. Our assumption was if anything changed, it would have been a replacement of one. This didn't happen. Yes, that has changed both what we have seen during second quarter and also our expectations for share in second half in that channel. It is the natural consequence of splitting sales out on more suppliers, trends across Europe. It's very difficult to know exactly what is the root cause to the lower demand that we see and the increased effort we have to do in our Hearing Care business to generate enough traffic.
We attribute it to general uncertainty and then you can have various speculations around things such as the renewal rate after COVID. We're a little cautious on that because this normally spreads out for a relatively long period and also has to do with when you actually call on the group and you can pull things a little bit forward and so on. We don't attribute a lot to that. That's of course always difficult to exactly point out. There's also been and continues to be correlation to very hot summer in certain European countries and so on. If we zoom into specific regions or specific markets, you can find some elements of that. On the other hand, these things have a tendency to catch up relatively quickly.
If you look at it from a full first half year, then what we have seen also in Q2 we mainly attribute to user consumer cautiousness and overall macroeconomic uncertainty.
Very helpful. If I could just follow up on Costco. Has the share change stabilized to your mind, and what are you baking into the guide for the second half?
Yeah, we look at it on a longer period. You have to do this in bulk shipment. It can vary a lot, and you have no transparency to the total market or the total buying. You have certain assumptions for the consumption by the customer, and over one month to two months you look at your own share. It's too early to draw conclusions on whether it's stable or not. You would have to see trends over a little bit longer period. This is an updated view where we take out, I would say, material share in the second half, otherwise we wouldn't invest in it.
Very helpful, thank you.
Our next question comes from Martin Parkhøi from SEB. Please go ahead with your question.
Martin Parkhøi is probably more closer but Martin Parkhøi, SEB. Just follow up on Costco but now on the side of probability, you cut your midpoint of your EBIT guidance by DKK 200 million and I'm pretty sure the operational leverage are pretty high in Costco. Can you maybe, I understand you won't say the full number, but if we look at the DKK 200 million split, how much is explained by the weaker market? and actually how much is explained by those operational leverage in Costco? Second question just on what you single put out in the report that you mentioned impact from future product launches on production cost and Uber in the second quarter half? Two questions on that.
Has there been any changes to that cost assumption during 2005 since you put it out now and is this higher than normal, what should we read into that and why do we actually put it out there?
Thank you. I don't know.
René, will you comment on the.
If you decompose the midpoint of the profit adjustment, basically you could boil it down to 2/3 being the market, 1/3 being Costco, and then partly offset by, you can say, even further focus on the OPEX side, which would counterbalance some of the effect. That brings you to 200. On the OPEX, you can say these are activities that we have planned throughout the year and thus it has not materially at least changed in the second half year compared to our original expectation. It's just important to underline that despite the efforts we undertake on the cost side, it does not mean that we are not capable of funding and undertake the activities related to future hearing aid introductions.
There is of course a difference between last year where such things did not take place and this year. It just means in the year-over-year comparison.
Thank you.
Our next question comes from Veronika Dubajova from Citi. Please go ahead with your question.
Hi guys. Good afternoon and thank you for taking my questions. I will keep it to two please. One, just maybe try to circle back on kind of any comment you can give us on what you're seeing in the markets when you look at July and August. I'm not asking for commentary on your performance, but I'm just in the regions where you do have monthly data. Curious if you can comment on whether July volumes are improving, staying stable, or deteriorating. In particular, I guess I'm curious about U.S., Germany, and France to the extent that you see those numbers. I'll ask my follow-up after that if that's okay. I'll let you answer that first.
Be careful with single month. We see no material difference than what we have just spoken to for the second half assumption. Things seem to be in line within.
Okay, that's helpful. Maybe just on the product launch then. I appreciate if you don't want to tell us a lot, but if I kind of look at the normal run rate of OPEX sequentially, first half to second half versus what you're guiding for this year, it does imply a meaningful investment into product launches, which is not normally typical in the industry unless we're seeing major product introductions, new platforms, et cetera. Can you maybe sort of talk through what are the expenditures that we should be anticipating in the second half? and why you feel the need to invest so much at this point in time? Thank you.
Veronika, just to get the assumptions you can say right for second half here. What we talk about is no growth in OPEX sequentially. What you see of actual reported OPEX in the first half year is ballpark what you should report or what you should expect that we report in second half year. Flat growth sequentially, it will of course be growth year over year because we did, you can say, a massive cost saving effort in the second half year of last year. You'll see organically, you know, a mid single digit growth year over year. Sequentially we will not as a group spend more money in second half year than we did in first half year of this year. Just to get that precise.
Okay. Can you talk about some of the activities that you expect to be undertaking to support the product launches you have in mind?
I mean they are of course of the natural kind w hen you do product launches, as we always do, that's seeing customers having sales and marketing activities, various launch costs. Don't read into this that they are significantly different than you would normally see. It is just a difference between, as René said, a very tight budget or spent second half last year and this year. That's just what we flag.
Our next question comes from Maja Pataki from Kepler Cheuvreux, please go ahead with your question.
Hi, good afternoon. Thanks for taking my questions. If we just take a step back and look at market growth, it has been somehow volatile over the last few years and of course uncertainty has been massive. It started with COVID, we had inflation. Now we have been challenging political conditions with the U.S. tariffs, everything. This uncertainty that we've seen over the last couple of years, at least for now, we need to assume that it is permanent. How do you think about planning on a three-year basis? Do you believe that maybe because market growth is not straightforward, 4%- 6%, very great differences across markets, you need to take a different approach in how you move in markets? Following up on that, how are you thinking on the cost side?
If you look at your margin trajectory over the last couple of years, it was not, you know, too exciting. Do you think that maybe it's time for a more thorough restructuring process to get margins up?
Yeah, thank you very much, Maja. I definitely agree that the volatility quarter- by- quarter, half- year- by- half- year, has definitely increased compared to what we have seen in the past. Both ways, we have also seen half years and quarters with very high growth following quickly after the decline. It is also important you are still there and ready when the market starts growing again. We don't see the fundamentals being changed. Yes, the volatility and dynamics are more, but the absolute size of the market, we will see smaller swings around a relatively stable. I just highlighted a modest 1% organic growth in a world full of inflation.
It is because we take a slightly different approach and do more than maybe done in the past to mitigate these effects so we don't end up taking out what needs to be done on the sales side, on the R&D side, et cetera. We look for scale effects and cost efficiencies wherever possible. Of course, you could also say looking into the future, we definitely also reflect on additional opportunities to build and regain back some of the lost margin. It is clearly still our ambition to run the business with a higher margin than you have seen here in the first half, where you have also seen a weaker than expected.
Thank you very much.
Our next question comes from Graham Doyle from UBS. Please go ahead with your question.
Thanks guys. Yeah, two questions for me. Just firstly in relation to those costs around future product developments, I think we discussed in the past around how you would typically have a product launch in H2 and obviously we haven't had anything as yet. It'd be good to understand one thing which specifically when you think about the philosophy of launching a product historically, the idea, because if it's a platform, is to do so with enough time to get into the VA. Could you just let me know if that's changed in terms of your approach to that or would you still aim if you were launching some sort of platform to make sure you make the VA window?
We speak in generic terms, and yes, we still plan to do two significant launches, whether they are platform or non-platforms, a year. It is also our plan to do that this year, and the exact timing is always, of course, subject to the ambitions and the finalization and make sure things are truly ready and ramped up and so on. It is always good to try to hit the VA window. It is not always possible. Our general principle is we will tell about new products when they're ready for sales because we want to prevent potential holdback in the existing business until we can actually really introduce and deliver to customers. That's also the case this half year. Yes, we are still committed to launches two times a year, and yes, we have a good pipeline for both this year and the coming years.
Operator, can you hear me? Hello, operator, are we coming through? Hello, operator, Copenhagen here. Any contact? Operator, can you hear me? I'm here in Copenhagen.
I can hear you. Can you hear me?
Yes, we hear you.
All right. Flying back in. There is a little bit of an echo through that. I can hear my voice coming back to me, but now it seems better. Can you still hear me?
We hear a little bit of humming, but that's it. All right.
I think we are live.
We're actually pulled out of the call right now. Can you? Yeah, we're speaking privately.
We don't think so. It doesn't look like from our data. Should we take the next? Please take the next question. Alright.
All right. One moment, let me join the line back in. You are now rejoining the main conference. The speaker connection reestablished. Mr. Doyle, you can proceed with your question.
Awesome. Thanks a lot, guys. Sorry. What I was saying is you've described in the past how you would typically launch new products in the second half. We're in the second half. You've talked in this document about increased cost in terms of investment around new products. I suppose the question I have is just your philosophy historically has been to put new products into the VA channel, as it's an important channel. Is that still a reasonable assumption to make going forward?
Graham, I got your question.
Sorry, go ahead.
Yeah, I'll repeat the answer and then we can take you a second simpler version this time. In respect of time, we're still committed to doing two launches a year. We also will this year. We have a good strong pipeline due to the risk of people holding back on existing orders. We tell new products when they are ready to be sold and ramped up sufficiently. That will also be the case this time around. It is of course always preferential to try to catch a window of like a VA. You can't always do that. I cannot comment further on, you know, shortcoming launches this time. Any second part of your question?
Gentlemen, it appears Graham has removed himself from the Q&A. We'll move on to our next docket. Bank, please go ahead with your question.
Maybe it was Carsten from Danske Bank. I don't know. I couldn't really hear that.
We hear you.
We hear you, Carsten. Just go ahead.
Thank you very much. I have just a question. For the remaining part of the year, you delivered the 0% organic growth in the first part of the year. In terms of the mid range of your guide, let's say 2% for the full year, you need quite a comeback here in the same part of the year. Which part of your divisions or franchises do you think will react first? Is this wholesale diagnostics? I also just want to get a confirmation or what should we call it, that diagnostics will be kind o f challenged for the rest of the year, or what is your view on diagnostics? Thank you.
Yeah, thank you. Carsten. Let me try to, you know, high level. It will of course be mainly simply due to the size of. There is both something in the comp Q1 quarter. So it is driven by large in the business and that's the main reason together with some improvement level in U.S. I cannot really say, so not to visual outlook.
Okay, thank you.
Our next question comes from Niels Granholm-Leth from Carnegie. Please go ahead.
Thank you. On my first question, are you able to recognize any effect from this five year COVID clock close down on that conference call given that you expect to close the KIND Group acquisition say around the beginning of quarter four? Thank you.
I'll take the first. I think I actually commented a little bit on it earlier. I don't know if you got it. We of course can see that the exact month some of them in Q2 the database had less prospects that were fitted there. People don't just all come in in one go. When you look at the actual distribution, we don't attribute a lot to that effect. Maybe it's part of it, but we think, yeah, macroeconomic uncertainty is far bigger. We don't attribute a lot to that. You can also, in certain regions and smaller areas, definitely see some effect of weather and so on, but it typically comes back quickly. A headline from us is macroeconomic uncertainty as the main driver for a less strong hearing aid market in first half.
Yeah. On net financials, Niels, what we expect for the first full year right now is slightly more negative than last year, driven by higher debt and also growth interest rates. We have not built in any expectations on or from KIND, neither in financials since we don't have that yet. Once we do that, we will update our outlook accordingly.
Thank you.
Our next question comes from Martin Brenøe from Nordea.
Thank you very much for taking my questions. Martin Brenøe from Nordea. Just to understand it clearly, in the retail division in Hearing Care you have been quite exposed to markets that are actually growing. France, Germany, also U.S. being up. Can you maybe just elaborate a little bit whether the sluggish growth in Q2 is just purely phasing or if there is anything to call out? In that regard, you had some comments about the market slowing by the end of the quarter. Is that also what you are seeing in the beginning of Q3? That's the first question and then I'll wait with the second question.
Thank you, Martin. I think we actually have to take it a little bit market- by- market. From France, good as expected uptake in the market. We follow it in our business. Germany was part of the declining growth and less than expected growth in Europe. On the market side, we did well in that market. In Germany specifically, U.S. grew also as expected in the market. We did not get capture as much of that as one could expect. In U.S., I would attribute some of it to timing and of activities and when you close. For U.S., yes, a less strong performance isolated in Q2, but on the other hand, also a stronger than expected performance in Q1. If you look at it in the first half year, still an improved U.S. business compared to what we have seen in recent years.
Nothing to call loud and alarming sequentially, but for the half year, I would say on expectations.
Everyone and their mother are speculating whether you'll launch a product sooner rather than later. Do you think that you back a little bit on the anticipation of new products coming?
No, I think the rumors are particular.
Metzger from Auto BHFS. Jeff, please.
add me to a question.
Yeah, good afternoon. Thanks for taking my two questions. The first is on the overall weakness of a hearing aid market. Maja asked also in this direction. If I remember the situation almost three years ago, that was about repurchases where we see some postponement. I remember you talked also about the first time users where you saw some hesitancy. Can you first classify between the decline between the first time users and the repurchasers? Also, in a bigger context, it seems that the overall hearing aid market has become more volatile. For decades, we talked about very high stability. When COVID was there, there were signs to change the market fundamentals, that some external factors play even a bigger role than they did in the past.
The other one is very quick on China, the ASP tailwind you reported in Hearing Care. More background on.
Thank you very much. It's very difficult at first time use on upgrades because what was the effort to generate the business some stage have to get backed lack of market growth more harder. In reality, I would say both to postpone when reached out to four factor here in the first half second quarter than in the first. I don't think the fundamentals have changed. Really don't. I just think the number of events we typically talked about the financial crisis material happened. We also know it has to be something that some key audience is nice development and we can all and then in Europe as there is more reimbursement it comes a little later, but it's kind of sync point of view and there's a don't and that just sometimes lead to, you know, the fundamentals have changed different frequency.
China, a country with no professional education and the more we invest devices higher and higher quality to people in China that drives DSP and that's not temporary. That's definitely something that I assume will continue to see a little bit up and down, but for quite a number of years because the product mix in China and the education level in China of Hearing Care professional is lower than we see in most other mature markets around the world.
Okay, great. Thank you.
Our next question comes from Andjela Bozinovic from BNP Paribas. Please go ahead with your question.
Hi, good afternoon. I hope you can hear me. My first question is on the U.S. market and if you can comment on specifically managed care. How are you evolving with the market share in the channel and specifically with UnitedHealth. The second part of the question is again in Costco. If I remember well you were the leader in the channel before we had Sonova back. Is this still the case or are you seeing a greater amount of market share loss? Thank you.
Thank you for your two questions. As it has been published, we have changed our offering and product offering specifically, yes, to United. Other than that, we don't go into the details of individual plans and accounts, but all, yes, positive. We have seen growing share during the second quarter, and it's also part of, you could say, the share gain outside large retail order and is part of the momentum we carry into the second half, specifically on a larger retailer. We believe, we don't know, but we believe we are the largest player. We still believe we are that. I'm just saying when there is four instead of three, you will see everybody losing some share, and I can't tell that any have lost more than others. We still have a good strong business, but it is lower than it was a year ago.
Perfect. Thank you
For your question.
Great. Thanks for taking my questions. I have two, please. I guess you two both sequentially year over year. This has primarily been in lower ASP geographies because it looks like it's still negative for markets, or was there also sort of an ASP negative impact to your unit growth?
The European markets, if that's how I got your question. We are doing well in France as an example, but the product mix in France is also going down as many of the people that come in for you have a free to client category Hearing Aids. They are significantly less priced on wholesale level than the premium products, so the ASP in the French market goes down. It doesn't mean that less people get in absolute terms a premium product, but the market growth predominantly happens in the free to client category. You know, putting it all together, yes, unit growth above market growth in Q2, ASP down due to geographics. That's spot on. U.S. outside large retail is a good story going from Q1 into Q2. We have seen the question was just raised to managed care. That's an example of share gain.
We have also seen a good share gain from sequentially Q1 into Q2 with the independent, and we see that as a testament to the strength of our product range after numerous introductions from competitors that have been trialed out. That is how it works. Positive on in Q2, we still see a little bit of year- over- year loss, but a strong development from Q1 to the second half. Then last channel in U.S. is we see some growth up until the there. We don't know, you know, how it, but also there we have seen and do see some of the account or locations that have tried new stuff to return to it, still do a very good job in, and you can only attribute the, you know, the lack of performance if you say so.
Is there any ASP impact in Q2 in the U.S.? or is it really like in, say, the independent channel? or ASP flat, or is there any negative ASP impact in any of T hose channels?
All that is very stable. It is also within U.S. a mix change, so you on large retail or U.S.A., there are so many, you know, channels, geography, and effect that, so it's relatively dynamic also within a market depending on your actual.
He's from Morgan.
A comment on 2025 doing high single digit in terms of units, your acceleration through, and then the other one was just around the success, well or not well, or sort of things you think you could still add in terms of a new product introduction, what you could bring to market. I'd just be kind of curious how you think that the audiologist is going?
Yes, on France, you know it's a gradual uptake during the first half and also during the second half quarter. Just by that, the growth in the second half will be above the first half, and there is, you know, we are still not fully at the run rate expected. On AI I would like to highlight that we launched the first AI-driven technology in the industry and still see ourselves as among the absolute leaders in that. There is a very strong correlation between what kind of signal processing you do and what kind of battery you carry and whether things are on all the time or something you can use a little bit in special situations. Our strategy and approach is to make sure it's always doing a job in making sure you manage the dynamic listening environments you're in.
The user doesn't have to switch anything on and off, and it does not compromise size of the devices, and that's clearly the echo we hear from customers, that the performance when it comes to end user satisfaction, solving hearing in noise, solving everyday life, our Oticon Intent based on the AI algorithms, we.
and Answer session.
Thank you, Operator, and thank you all for joining us on the call this afternoon. We look very much forward to seeing many of you on the road. Any follow-up questions, please reach out to us in the IR team directly after the call, and we'll of course do our best to help you out. Have a good day.