Welcome everyone to the presentation of our full year results 2025-2026. The slides of the call are available on our website. With me in the room are Eric Bernard, CEO, and Elodie Carr , CFO of Sonova. During the call, Arnd will provide you with a business update and taking you through the performance and highlights for the Sonova group across our businesses. He will then hand over to Elodie, who will take you through the financials in more detail and present the outlook for the financial year 2026-2027. We will move to Q&A, where those of you dialing in over the phone have the opportunity to ask questions. Before we begin, let me mention one very important thing. Growth rates cited in today's presentation refer to changes in local currencies unless otherwise noted. Before we dive into the presentation, please take note of the disclaimer.
In short, this presentation contains forward-looking statements and serves marketing purposes. It constitutes neither an offer to sell nor a solicitation to buy any securities. One additional reminder, following the announced intention to divest the Consumer Hearing business, the business is classified as discontinued operations, and the relevant comparative figures for the 2024-2025 financial year have been restated accordingly. Therefore, figures and growth rates in this presentation refer to continuing operations and exclude the Consumer Hearing business unless otherwise stated. In addition, the hearing instruments business will be referred to as the wholesale business and the audiological care business as the retail business. With this, I pass the word over to Eric.
Thank you, Thomas. A warm welcome also from my side. Let's start the business review with the key highlights for the year. 2025-2026 was a very successful year for Sonova. We delivered strong results, outperformed the hearing care market, and fully met our guidance. In our hearing instruments segments, growth accelerated in the second half. This was driven by a very strong development in wholesale, translating into the highest year-on-year market share gain since the introduction of our Marvel platform six years ago. Having posted strong high single-digit growth in the first half, we accelerated to double digits in the second half, driven by our successful product launches. We also delivered robust growth in our retail business, driven by consistent execution and successful growth initiatives.
We ended the year on a high note with Q4 momentum building sequentially, a strong signal for the start of the new financial year. The cochlear implants segment continued to face headwinds in the second half, driven by the introduction of VBP in China, software upgrade sales, and heightened competitive pressure following our largest competitor's product launch. Strong growth drove operating leverage and profitability. So the normalized EBITDA margin rose 240 basis points, delivering a 17.3% year-on-year EBITDA increase. To sum it all up, we delivered strong results, and we are confident to deliver continued above-market sales growth and increased profitability in 2026-2027. Before I talk about our performance in more details, let me briefly recap our renewed strategy that we presented in March.
At the center of this strategy is a simple, focused ambition to grow Sonova to CHF 6 billion in revenue by FY 2030-31. We are going to deliver this through three pillars. One, Innovate for adoption. We will expand into new segments by launching more lifestyle-aligned designs, strengthening connected solutions, and further integrating AI and digital capabilities. Bringing together R&D for hearing aids and cochlear implants deepens synergies across the portfolio. We are developing solutions tailored to Asian market needs and growth potential. Two, Succeed locally with multi-channel, multi-brand play. We will grow by winning country by country, the right brand in the right channel at the right price. To achieve this, we are aligning wholesale and retail more closely using customer insights to guide R&D, sharing marketing assets, and scaling our lead generation engine.
We will continue targeted retail expansion to reach an optimal scale in selected strategic markets. Finally, three, excel in operations for growth. By elevating service into a core competitive advantage, we will drive loyalty, deepen partnerships, and grow market share. In parallel, we will improve efficiency and generate meaningful savings through footprint optimization, greater automation, simplified processes, and disciplined value engineering. With the strategy and leadership in place, we are now focused on execution. Moving on to the performance in more detail, let's take a closer look at the hearing instruments segment. Total segment sales rose 7.5% to CHF 3.4 billion, with growth accelerating to 7.9% in the second half against a strong comparison base.
Normalized EBITDA rose 17.3% to CHF 794 million, delivering a 23.7% margin, up 280 basis points in local currencies. Elodie Carr, our CFO, will share more on the margin drivers later. Let's move now on to the individual businesses and starting with wholesale. The business delivered a substantial sales increase of 9.5%, with positive contributions from both higher volumes and improved ASP, resulting in revenues of CHF 1.9 billion for the year. In the second half, we delivered double-digit growth of 10.9%, accelerating against a very strong comparison base of 10% growth in the same period of 2024, 2025. This underscores the successful Infinio Ultra launch and the very positive market reception to Virto R.
We have a strong product pipeline, short, mid, and long term, which I will come to on the next slide. Sonova is the innovation and technology leader in this industry, and over the past two years, we have delivered strong solutions with clear consumer benefits. We launched Sphere in 2024, the world's first hearing aid powered by a purpose-built AI chip for speech separation from noise that allows the hearing aid to instantly detect, extract, and enhance speech from any direction. With the launch of Ultra in October 2025, this feature can now be used all day. With Virto R, Phonak introduced its first rechargeable in the ear device, combining Infinio's speech performance with a compact, custom-made design and universal connectivity. It no longer requires trade-offs from consumers in terms of performance, size, or connectivity.
We innovated beyond hearing aids with the EasyGuard wax management system that protects the receiver with an acoustically transparent membrane, simplifying cleaning and reducing service visits. Our innovation engine isn't standing still with the next wave of breakthroughs already underway, bringing real-time AI into smaller form factors, expanding beyond RIC to provide more aesthetically appealing, lifestyle-aligned solutions, and broadening AI functionality beyond speech in noise. During the financial year 2026, 2027, we plan to introduce a new hearing aid platform that builds on and expands our AI leadership while adding new connectivity solutions. This next step in innovation will further enhance the user experience and reinforce the strength of our portfolio. I'm very excited about the opportunities these launches present and confident it will further strengthen our innovation leadership and support our long-term growth ambitions.
Now, moving on to our retail, revenues for the business reached CHF 1.5 billion, representing a growth of 5.1%. Bolt-on acquisitions contributed 1.3 percentage points. We further expanded our store network, mainly in Germany, Austria, and Canada. Growth in the second half was 4.4% against 8.1% in the prior year period, with sequential acceleration in Q4, a positive indicator for the start of the new fiscal year. Structural cost initiatives started in FY 2024, FY 2025 continued to deliver meaningful operating leverage, contributing to some of our funding growth. As a next step, we are deploying AI tools across our stores as a powerful enabler of productivity and to elevate the consumer journey, driving stronger consumer engagement. Now, switching to the cochlear implants segment.
Sales reached CHF 252 million, down 11% or 3.8% lower if we exclude China. System sales were affected by the introduction of VBP in China and a major competitor's product launch in the second half. Consequently, system sales declined by 10%, with performance actually flat outside of China. Upgrade sales declined 13%. This development was expected and reflects the product cycle as many recipients have already adopted the current processor technology. Normalized EBITDA amounted to CHF 17.2 million, with a margin of 6.8% impacted by the lower sales and only partly offset by strict cost controls and by the benefits of the weaker US dollar. We expect performance to improve in the second half of 2026, 2027 following the planned launch of a new sound processor.
It will further leverage Phonak's technology to elevate hearing performance, which is particularly relevant for cochlear implant recipients. I conclude with some highlights from our sustainability activities, where Sonova has continued to make significant strides. What you can see on this slide is that our efforts in sustainability don't go unnoticed. Sonova continues to be recognized by leading ESG rating agencies and included in important sustainability indices during 2025, 2026. You can see a selection on the slide. I would encourage you to have a look at our full sustainability report, which was published alongside the annual report. With that, let me hand over to our CFO, Elodie Carr, who will provide more details on the financials and the outlook.
Thank you, Eric, a warm welcome also from my side to everyone on the call. Let us take a closer look at the financials. We start with sales development. Eric mentioned the positive growth dynamics for the group as well as by business. I will therefore focus on regional performance. Here, all key regions positively contributed to the sales development.
Ladies and gentlemen, please hold the line. The conference will continue shortly. Thank you. Ladies and gentlemen, please hold the line. The conference will continue shortly. Thank you. Ladies and gentlemen, we can now proceed with the conference. Please go ahead.
I'm sorry about the disconnection. We'll restart on slide 15, which I think is when we got disconnected. Elodie, the word to you.
Yes. Thank you, Thomas. I come back to operating expenses, slide 15. As mentioned, normalized operating expenses rose modestly by 1.1% despite strong sales growth, and that resulted in substantial operating leverage. R&D expenses rose 3.8% as we continue to invest in advancing our product portfolio. The success of our recent product launches clearly demonstrates that we are delivering meaningful and impactful innovation. Sales and marketing expenses were up 1.5% and include continued investments in lead generation in retail, driving robust organic growth for the business. Lastly, general and administrative expenses were essentially flat through strict cost management and reflecting the benefits from last year's structural cost initiatives. To sum it all up on slide 16, let's look at EBITDA component from left to right.
Normalized EBITDA rose by 17.3%, almost three times faster than top line, resulting in a margin improvement of 240 basis points in local currencies. This highlights the strong operating leverage that was driven by disciplined cost management. Normalizations totaled around CHF 90 million, driven by non-recurring items related to legal matters, legacy products, and software assets. Specifically, CHF 28 million legal costs were related to a patent settlement resolving pending litigation in all jurisdictions, as was communicated in the first half. In addition, the reassessment of product liability provisions for legacy product in the Cochlear Implant segment amounted to about CHF 24 million. As part of the strategic review we recently undertook, certain software assets were identified as unlikely to deliver the anticipated benefits, and this led to an impairment charge of around CHF 35 million.
Important to note is that these items are non-operational, largely non-cash, and do not represent core operating performance. The headwind from exchange rates developments reduced normalized EBITDA by CHF 103 million and the margin in Swiss francs by 1.5 percentage points. Let me now quickly summarize the key P&L figures. Sonova delivered above-market sales growth across all regions, with profitability rising in local currencies across every metric, signaling broad-based momentum and disciplined execution. This resulted in a healthy EPS growth of 16%. In line with our total shareholder return framework, the board proposes a 7% dividend increase to CHF 4.70 per share, implying a payout ratio of about 45%. Moving on to CHB. As you know, on March 23rd, Sonova announced the plans to divest its Consumer Hearing business.
Consumer Hearing is now classified as discontinued operations. The figures discussed today refer to continuing operations unless otherwise stated. I would like to highlight our financial results, including Consumer Hearing, on a pro forma basis, as this is the basis on which we provided our guidance. Including Consumer Hearing, sales grew 5.5% and normalized EBITDA rose 14.5%, well within the guidance we provided and that we reconfirmed at the end of March. The divestment adds about 230 basis points to the normalized EBITDA margin when compared to the pro forma margin, including Consumer Hearing. Please note that the pro forma EBITDA loss for Consumer Hearing in 2025, 2026 includes one-time items related to inventory reassessments and tariffs and is not fully reflective of the operational performance. Moving on to cash flow.
Operating free cash flow was solid, with development driven largely by FX translation and the phasing of tax payments. We continue to deliver strong cash conversion consistently above 90%, supported by stable working capital management. Cash spent on acquisitions was CHF 46 million, related to retail bolt-ons in a number of key markets. CapEx spend was lower than previous year and continues to be disciplined. Cash outflow from financing activities includes a dividend payment, stable repayments of lease liabilities, and a new financing arrangement. Let's look at our balance sheet, which remains very disciplined. DSO was stable, while inventory days improved versus last year. DPO was steady versus September, but lower year-over-year, reflecting timing of payments to suppliers. Return on capital employed remains strong at 19% and highlights our excellent operational performance and disciplined capital allocation.
The change versus prior year is driven by the one-time normalization and the impact of FX on our reported EBIT in CHF. Leverage, as measured by net debt to EBITDA, reached 1.1 times, down from 1.2 at the end of 2024-2025 financial year. With this, let me move on to the outlook. Let's look at our outlook for 2026-2027, starting with our assumptions for the year. We are entering the year from a position of strength, building on a strong momentum in sales and earnings. We anticipate slightly higher market growth of 2%-4% for this year, gradually moving towards the midterm assumptions of 3%-5%. In wholesale, we expect to continue outpacing the market, supported by a strong product pipeline and a new platform that reinforces Sonova's leadership in AI-enabled hearing performance.
Retail is set for robust organic growth, bolstered by a strong M&A pipeline and accelerated pace of new store openings to lift momentum. Cochlear implants are expected to face headwinds in the first half, with a meaningful pickup in the second half following the planned launch of the new sound processor. In summary, we expect consolidated sales to rise 5%-8% and core EBIT to grow 7%-10% at constant exchange rates. We also included some additional information for modeling purposes based on FX. As of early May 2026, we expect Swiss franc sales growth to be reduced by 1-2 percentage points and core EBIT growth in Swiss francs to be reduced by 2-3 percentage points. Non-core items are expected to total around CHF 35 million-CHF 40 million.
Finally, I'd like to point you to the appendix, where you will find further details as well as historical figures related to our move to core EBIT as the new guidance metric. You will also find a link to our website, where you can find even more historical figures for the past two years. With this, I pass the word to the operator to start the question and answer session.
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their telephone. You will hear a tone to confirm that you've entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Questioners on the phone are requested to disable the loudspeaker mode and eventually turn off the volume from the webcast while asking a question. Anyone who has a question may press star and one at this time. The first question comes from Andjela Bozinovic from BNP Paribas. Please go ahead.
Hi. Good afternoon. Thank you for taking my question. Maybe the first one is on the guidance. Can you give us more details on what is embedded, both top end and bottom end, for sales guidance in terms of competitor product launches, market share gains and M&A contribution? Just any details that you can share on the phasing of the growth, especially in the hearing instruments, given you're expected to launch new products. The second question is on Virto R and the ITE category in general. If you can give us more details on the product performance and contribution to group growth. If you could share how has your market share gain evolved since the March introduction of Oticon Real. Thank you.
Thank you, Andjela. Maybe I will start with the last question, Virto R ITE. We were not playing in this category of rechargeable ITEs. We came up with Virto. It's an incredible success, and we have reached a cruising altitude of about CHF 120 million per annum of revenue from zero, as we were not playing in that space. You have seen the impact it had on the market share in the year as a result. It's been successful across the board. I could share that placing this product in the Japanese market, for instance, got us to grow at a very high double-digit rate in Japan. We haven't seen much of an impact from new competitors' product against Virto.
Of course, it's early, but so far, no impact. I would say that, as you can see, the acceleration of growth in wholesale in particular in the second half with a very, very good velocity towards February, March in particular, show that so far we are not impacted. I could comment that the beginning of the year was very positive. I'm talking about the new year. Now on your first question is what's behind the guidance, what's driving the growth, et cetera. Elodie, I will let you comment on M&A.
If you look at the year we have entered, I would say that we benefit for the first part of the year of the effect of the success of Virto, which we didn't have last year. We have seen our share in a very large key account in the U.S. growing throughout the year. During the first half, it was certainly not where we wanted to be after we reentered this large account. Towards the end of the year, it was clearly much better. Which means we came out of the past year with a very good velocity in this large account. We will benefit from that in the new year.
We cannot ignore the fact that there are new entrants in the VA, where we have reached an extremely high market share level, 54% or so. We could expect somewhat this peak to decrease. Then, in the second half of the year and on time for the November window, we will come up with the new platform in HI, which we expect to be a success, continuing on the what we have achieved with Sphere and Sphere Ultra. This is giving you a sense for why we are confident about the guidance that we have shared on the top line. Elodie, if you could comment on M&A.
Yeah, absolutely. On the retail M&A, we are looking at a contribution of about 1%-2%, obviously, depending on the timing of some of these acquisitions. That contribution is also expected to be well in line with the midterm targets that we have discussed back in March.
Thank you.
Thank you, Andjela.
The next question comes from Veronika Dubajova from Citi. Please go ahead.
Hello, team. Good afternoon. Hope you can hear me okay. I have two questions please as well. The first one is sort of a bigger picture question on the market. Obviously, you continue to expect this return to the 3%-5% that underpins your guidance as we move through this year and into next year. Just would love to get your thoughts exactly on what you're seeing in the market. Are there any signs that you can discern of this modest continuous acceleration, or is that something that we haven't seen yet that you're expecting? Maybe if you can just comment in particular on momentum in Europe and the U.S. looking at April and May and what you're seeing now that there's a bit more renewed concern around inflation. That would be very helpful.
My second question is for Elodie. Just on the phasing of growth is I'm thinking especially on the EBIT front in terms of H1 and H2. Would you expect to be within the 7%- 10% range in both of the half years? If you can give us any qualitative guidance on that would be super helpful. Thank you so much.
Thank you, Veronika . Market growth. Well, you have all seen a number of competitors sharing pretty good numbers for the last quarter, Q1 calendar year, 2026. You've seen that we have outperformed these numbers in wholesale. What I would say is that what's encouraging is that the beginning of this calendar year, therefore the last quarter for us of the last fiscal year, the market, we believe, was trending towards 4%, in particular, you know, in the last couple of months. You know that a few months ago, we're looking at two-three. It's looking better if I look at the last period. As I've mentioned it, answering the previous set of questions, April was very positive.
Rather an improvement. We know we shared that for this fiscal year. We think the market will be growing at 2%-4%. We believe that over time, it will normalize towards the 3%-5%. If you look at the very recent months, we're getting closer to 4%. About the U.S. market, what we see in our own numbers over the last four-five months was very positive. Of course, we have a bit of a biased view because we have very strong positions in the VA, lifting our sales. As I mentioned it, you know, we're also gaining share in another very important account in the U.S., but we remain positive about the U.S. market.
I think of the, so in terms of your questions for the phasing of growth in terms of the EBITDA, and I think your question was related to H1 versus H2. We do expect in H1 to be within the 7%-10% range, in terms of core EBIT growth, in the first half. We don't expect to be outside of this range. We will be in the range in the first half.
Elodie, would you expect the second half to be a bit stronger than the first half, given the given the CI dynamics, or is that not the right way to think about it?
We will have, as I mentioned, I mean, on the CI side, we do expect that H1 will continue to face headwinds, on the top line and for CI. We expect to get a lift on the growth in the second half as we introduce the new, the new processor. Obviously on the CI side, that will drive a bit of a stronger phasing on the second half. For the rest of the business, we do expect also a solid first half. Don't forget also that we just closed an extremely strong second half in the period we just finished. The comp will be higher for the second half.
All in all, I would say, it will be within the range for both halves.
Maybe just to add on to what Elodie said, Veronica, about the new processor, we are extremely excited about what's coming, but I need to mention that, you know, the timing of the launch is subject to regulatory approvals. We're not concerned, but we're subject to these approvals. Otherwise, very excited about it.
Got it. Thank you both very much.
The next question comes from Marco Pires-Cox from Barclays. Please go ahead.
Hi there. Morning, all. It's Marco Pires- Cox from Barclays, asking a question on Hassan Al-Wakeel's behalf. I have two, if I may. Firstly, clearly some very strong market share gains. I was wondering if you could talk about the composition of these share gains, particularly between Ultra and Virto R. I guess I'm curious to understand whether there's a structural shift towards ITE as a driving force here, and whether you're seeing, you know, customers for Virto R switching from RICs to ITE. Secondly, maybe a couple of the moving parts in the guidance range, particularly around the cost inflation side of things, and what are your assumptions around key cost buckets in the guide? Thank you.
Marco, thank you for the questions. Market shares, I think what I will highlight is that we gained share in the U.S., in Germany, in France, in U.K. private, in Japan. It's been a broad-based situation for a better word. We grew, certainly thanks to the success of Sphere, Ultra. If you travel back in time, we were the first player to introduce a solution with a dedicated proprietary chip. When the product was launched back in 2024, we faced some challenges in delivering the product. This is behind us, the combination of an improved service and a very well-performing solution has led to these shares. Virto R. We've seen how it's moved the needle in the VA. The data is available to all of you.
Was there cannibalization of more traditional designs? Not really. Great momentum. A product like Virto R brings a solution that offers a very exciting design. It looks cool, it's sexy, it's different. Since the sound quality is outstanding, all of these contributed to the success. We were also bridging a gap that we had because we had no rechargeable solution, and when we bridged that gap, we came up with the smallest, with the better sound quality, the best connectivity, all of these played for us. I cannot say that it cannibalized any more classic designs.
Yeah. I think the question was around the assumptions behind the guidance on the margin side and what are some of the cost assumptions, if I understood the question. We do expect to gain some operating leverage from the sales growth and that drives obviously some of our assumptions on the guidance on the margin side. We do expect operating leverage both on the gross margin as well as the OpEx side, so both to drive some benefit. It is fair to say that at this point, we have no operational disruptions on our supply chains. We've been able to mitigate this very strongly.
We have obviously taken all this into considerations when we have formed our guidance, but in and so far, it has no material impact to our EBIT guidance.
Copy. Thank you.
The next question comes from Aisyah Noor from Morgan Stanley. Please go ahead.
Hi. Good afternoon, Eric and Elodie and Thomas. Thanks for taking my question. My question is regarding your APAC strategy to capture more market share in the Asia market. Since you announced this plan in March, are you able to share with us any KPIs that you set or are currently monitoring to benchmark your progress and what measures you have put in place to ensure this is not dilutive to profitability? My second question is just a technical one on the non-core items, CHF 40 million on the full year EBIT for the year. What costs do these relate to, and how much of this is restructuring versus other items? Thank you.
I will take the first question. Thank you for asking me about APAC. It could give me a chance to explain and explain again and re-explain what's on our minds about Asia-Pacific. What we do in Asia-Pacific is a two-step process. Step one is very basic, very simple, no rocket science. It's about giving this region the right attention that maybe was missing. Step two, this will take more time, will be about bringing solutions, meeting the needs, the specific needs of the Asian market. Talking about Asia in general doesn't mean much because you start in China, you go to Japan, you go to India, you go to Southeast Asia, and each of these markets has different needs. Step one, putting the right leadership on the ground. Done. Reallocating resources directly there. On the way.
You've seen that we are entering into an agreement with the Singapore government and its arm, so-called EDB. It's being serious about Asia and thinking Asian for Asia. KPIs. I won't share with you the details, but what I can tell you is, and that's real and concrete, is that in Japan, for the last five to six months, I will not be too specific, you are looking at a growth rate of 30%-45% by just bringing the right product in the right channels with the right focus. This is very profitable. Very profitable. There's absolutely no dilution. This is related to step one. Step two, it's about bringing more simple solutions through potentially different channels so that access is improved, pricing is improved without diluting our profitability.
This is where we're gonna be inventive over the next 18-36 months. That's how I would describe what we do in Asia. We see already in our numbers, going back to your KPI question, very good growth in Japan and very recently also, very good growth in India, where again, we are not like in Japan, in terms of market share, where we typically are in any other market in the world. Let's keep this in mind to make it simple. Two-step process, reaching our quote-unquote "natural market share," and then point to contributing to the expansion of the market, and that will be a different story. We'll talk about that in the next six months, 12 months, 18 months, 24 months.
On your second question related to non-core items and what the expectations are there for the year, fiscal year 2026, 2027, and what is included. As I mentioned, we expect non-core items to amount to around CHF 35 million-CHF 40 million in the upcoming year. What is included is mainly two points. One is restructuring costs, and here it's mainly our investment program to drive operational efficiencies, which is part of our renewed strategy that we communicated in March, you know, to excel in operations and driving CHF 90 million of savings in the next four years. That's a big part. It also includes transaction and integration costs for acquisitions.
These are the two main buckets of what we expect in non-core items at this point in time.
Thank you so much.
Next question comes from Oliver Metzger from Oddo BHF. Please go ahead.
Good afternoon. Thanks a lot for taking my questions. The first one is on your highlighted M&A pipeline in retail. Regarding the external growth opportunities, we see at Amplifon some slow activity. One could also think that demand is doing much lower after the Kind deal. Do you see right now a less competitive dynamics because two of the major players in that field are, let's say, are busy at the moment? The second one is about the ASP lift and the ITE category. Virto R was supportive for your ASP development. First, which level of rechargeable ITE would you regard as the new normal or as the aspiration? And how long might it take to reach this level, which would also imply some midterm ASP support in the best case? Thank you.
Yeah, Oliver, I'm not sure I fully understood the second question, but I will answer the first one. M&A in retail. Well, you've said it. I would just say that the playing field in doing M&A retail is certainly more favorable with the latest developments from the two companies that you mentioned. One has to be opportunistic when appropriate. We are extremely careful about the management of the ROIC of the company. Don't expect to see us buying anything at any price. We'll be very, very cautious, but again, in a playing field that has become certainly more favorable for us at this point in time. Oliver, I have to say, I'm not sure I fully understood your second question.
If you don't mind, elaborating a bit.
Sure, sure. First follow-up on your answer. When you say, okay, you're on one hand extremely careful of management of ROIC, on the other hand, do you see that acquisition multiples have come down due to the recent activities? Regarding my second question is about you reported some positive price developments on ASP lift, and you have VirtuoR in the ITE category, which comes at a higher price. This is definitely one of the ASP drivers. Going forward, what do you see as the addressable or market for the rechargeable ITEs, and how long does it take to go there?
Okay. All right. Yes, I mean, generally speaking, there is less pressure on the multiples in retail than they were maybe a few years ago to make a long story short. About, I think what you see with Virto R is the following: when you bring an exciting solution to patients and professionals that meets, you know, fundamental needs about the quality of the sound that on top of that looks cool, price is much less of an issue. I think that eventually this category will go naturally to a rechargeable in general. How long would it take to get there? You know, I don't know. I don't have a crystal ball. Sorry, I cannot give you a specific answer. What we saw clearly with Virto R is that it commands a very good price across the board.
Okay, great. Thank you.
Thank you, Oliver.
The next question comes from Susannah Ludwig from Bernstein. Please go ahead.
Good afternoon. Thanks for taking my questions. I have two, please. First on EasyGuard, I was wondering if you confirm if that has now entered both Costco and the VA, and whether you think that there will be any difference in interest in these higher volume channels than, say, with independents. Second, I had a follow-up on your return to Costco. Are you able to comment on how much of a contribution to growth that was in H2? Whether you feel with recent momentum, you now have a fair share in the channel or if there's further room to go.
Okay. I will start with Costco. I will not be completely explicit about the data points there. Let's say that you had three moments in time. Sonova was no longer in Costco. Sonova came back in Costco, the share was stable at a level that was not what we would have expected. The share was lifted in the second half, and in particular, the last quarter of this past fiscal year. We will benefit, assuming we maintain that share, we might increase it. We will benefit from this additional revenues from this very large account. More for us in 2026, 2027 Costco than they were in 2025, 2026. We were not at the right pricing attitude.
We got at what I would call our fair share towards the end of the past fiscal year. About EasyGuard, I'm not completely sure about what's behind your question, but let's say that this solution is getting widely accepted and celebrated. It's a success. I have to say, I remember that when we spoke about that at EUHA back in November, as well as when we spoke about Via 2 R, we were faced with a bit of skepticism for these two innovations. They have proven to be very successful. EasyGuard solves a basic constant problem, taking a lot of time in practices, right? Wax management.
What I would say is that the more intensity you have in the point of sales, think of the VA, think of Costco, or think of very busy practices, the more this solution is relevant to the customer. Just to give you an idea, somebody's pushing a cheat sheet to me. I won't hide what I'm doing here. We now have estimated that this solution reduces service time by 38%. Very significant. It's a door opener.
Thanks. That's helpful. I guess I was wondering when that EasyGuard solution went into Costco and went into VA or just to confirm that it's in both of those sort of high volume, high service intensity channels.
Susanna, I will not share those details here.
Okay. No worries. Thank you.
Next question comes from Daniel Jelovcan from Zürcher Kantonalbank. Please go ahead.
Yeah, good afternoon. Also two from my side. The first in the U.S., you had this impressive 9.1% local currency growth. I guess you have relatively limited M&A there. Is that a fair assumption because you pointed more towards Italy, France, Germany. In the U.S., according to my educated guess, Costco must have contributed probably 200 basis points in the U.S. Is that a fair assumption? That's the first question. Second question is the new platform which you mentioned in March. You mentioned it will have, because of the AI learning, less power consumption. Might be a stupid question. I guess with that, the device doesn't get smaller because you cannot just put in a smaller chip in this timeframe. Is that a fair assumption? That are two questions. Thanks.
Daniel, thank you for those questions. About the new platform, we will not disclose what it's all about for obvious reasons. Let's say that, you know, we keep training our AI, in particular in energy management. You saw that the year after launching Sphere, we launched Ultra, and you could get access to all the benefits of the AI optimized performance for a full day, not just for a few hours. As we optimize energy management, you can compress the size of a number of components, and I will leave it at this. I would just say that the one downside that we heard about Sphere was the size of the device, although the product had been very successful in spite of this.
Just imagine if parts of the equation was to make it smaller. That would be beautiful. Drivers, yes, M&A was extremely limited in terms of contribution. I think it's around 0.2%. The very good numbers that you've seen in the U.S. are coming from VA share and price. You saw our share jumping from, I think 47- 54, in particular after the launch of Virto R. One, these very large other accounts in the U.S., as I've mentioned it, we haven't seen in 2025, 2026 across the year, the type of share that we reached towards the end of the year, which means that it's a reserve for growth in 2026, 2027.
You know, when I look at the U.S., I believe that we, Sonova, have more room to grow in the more traditional independent segment. It's a point of attention for us. We have more room for growth in being more agile, more systematic in executing a multi-brand play. Finally, there's room for growth in retail in the U.S., in performing better in general with the assets that we have. Then, you know, M&A will come on top of that. That's why, and I reconnect with one of the question I was asked before, we remain very positive about the U.S. market in general.
Okay, that's great. Just a third small one here, if I can sneak it in.
Yes.
Can you disclose the APAC growth excluding CI, which you mentioned had a big impact on growth? That would be nice.
Yes. It was a high single-digit growth. And to give you a bit more color, as you've seen that, you know, if you include CI, the growth was around 1%. This is all coming from China CI. If you exclude this, very good performance in Australia, as I've mentioned it before, responding to other questions, very good growth in Japan. Now we start to see momentum picking up in India as well. Maybe, Elodie, you want to complete this?
Daniel, as I mentioned a little bit earlier, if you exclude cochlear implants from APAC and focus on our hearing instrument segment, our sales grew by more than 8%.
Okay, thanks. Sorry, I didn't hear that. Sorry.
Yeah, no, it's true.
No worries.
Yeah.
Congrats. Thanks.
Thank you.
And the beginning of the year, this year is very good in Asia.
The next question comes from David Adlington from JP Morgan. Please go ahead.
Hey, guys. Thanks for the questions. Maybe just on the top line, guidance of 5%-8%, maybe you could just flesh out, to get towards the top end of that range, what are the biggest drivers of that? Is that a better market? Is it better impact from new launches, or is it more M&A? Secondly, just wondering what whether you're anticipating any net tailwind or headwind from the GN Amplifon transaction when the deal completes. Thanks.
All right. Okay. Top line, how to get to eight? Well, obviously, you know, if the market is accelerating, that could be a lift for all of us, all the players. That's, that's one data point. We've explained that we have still some support from what we achieved in this past fiscal year. I mentioned that, you know, it's towards the end of the year that we were, you know, accelerating in a number of other channels, key accounts or geographies. We benefit from that. Obviously, you know, the second half of the year will be very rich in innovation, a new platform in HI. There will be a little bit later, exciting news about new designs.
The new processor in CI, again, subject to regulatory approval, which should help us, you know, regain momentum in cochlear implants in the second half of the year. Any comments about M&A, Elodie?
Well, as I said, I mean, we expect M&A to contribute between 1% - 2% in this picture. Depending on timing and how quickly some of these acquisition could close, obviously, that would have an impact as well.
Can I just follow up on that?
Yeah.
Is that one to two percentage points for retail or for group?
For the group.
For the group. Okay.
For Sonova.
Thank you.
Yeah.
All right. Your second question was about the announced acquisition of GN Hearing by Amplifon. It's very early day. As we speak, it's business as usual. Our exposure to this channel is rather limited. It's going to take time. Assuming that the acquisition is completed, it's going to take some time to land an end state position in terms of sourcing for the newly created group. We don't expect a significant impact in the coming year. I would say also that this type of acquisition or merger could create opportunities, and I will not elaborate any further.
Thank you.
The next question comes from Falko Friedrichs from Deutsche Bank. Please go ahead.
Thank you. Good afternoon. My first question is on your retail business. Do you expect that organically speaking, growth could be or should be above your targeted end market growth for this fiscal year? Secondly, on the cochlear implants business, and sorry if I missed it, but it is probably fair to assume growth for the business again this fiscal year. Is it fair to assume that this growth should still be below the full year guidance range? Thank you.
All right. You know, we're not, we're not guiding specifically on the retail business, I would not tell you exactly what the numbers will be. What I will say is that we have good momentum. The exit, velocity from the past fiscal year was very good. We saw acceleration in the last quarter, we are optimistic, going forward. You've seen the numbers for this year. They were somewhat above the market growth. That's all I will say. The second question was, sorry?
The second question was related to cochlear implant growth.
Yes. As we mentioned it before, first half, we expect the numbers not to look that great. When the second half comes, again, subject to regulatory approval, we come up with a new processor. We believe that it's a very relevant innovation that we bring, powered by Phonak. That should lead to an exciting acceleration for our CI business once the processor is in the market.
Okay, thank you. Without putting a specific number behind it, is it then fair to assume that the CI business can at least grow positively this fiscal year?
Yes.
Okay. Thank you.
Next question comes from Rula Martinien from Jefferies. Please go ahead.
Hi, good afternoon, and thank you for taking my questions, and congrats on the print, by the way. I would have two questions, please. The first one is a more long-term question, and it refers to your reiterate ambition of being a CHF 6 billion company by FY 2031, which obviously implies a substantial contribution from larger deals. Any incremental comments you'd be keen on sharing on that when it comes to the timeline and type of deals you could think of? The second question would be a question actually related to the retail business in China. I would appreciate if you could remind us how much does it contribute to the retail sales. I was quite impressed, by the way, by the double-digit retail growth you've posted there.
Any indications on what have been the driving forces behind that?
Yeah. I will, I will start with the second question you asked, retail business in China. You might remember that we acquired this asset a while back. It's never a walk in the park to do retail acquisitions in China. It took some time to, I would say, warm up. What we see happening and indeed, you know, a very good double-digit growth in the second half of the past fiscal year. It's a lead generation engine that is becoming better and better. It's execution, store by store. It's playing our brands. It's working on pricing. I think it's just, I would say, operational excellence in motion.
It's a rather small contributor to the overall retail revenues for the group. You know, it's less than, we're talking about less than 2%, so it's not, it's not significant. About the ambition of CHF 6 billion by 2031, you can translate that into 30 million lives that we would improve. Yes, it includes more acquisitions. The only comment I would make at this point is that we are looking at selected geographies, identified pipeline of retail acquisitions, and that's all I will say for now.
Okay. That's perfect. Thank you very much.
The next question comes from Urs Kunz from Research Partners. Please go ahead.
Yes. Hello. Thanks. There's just one question left from my side. During the strategy update day, you kind of say elaborating on the sales costs mismatch of the Swiss franc. You also said that you wanna bring down the cost of the Swiss franc from around 15% to below 10% midterm. Is it correct midterm means in next five years? Are we seeing any positive impact already this year, or is that more for next years to come?
Yeah. Well, sir, I'll be happy to take this one. As you very rightly pointed out, we did discuss in March the fact that we have a structural imbalance in our CHF position because we have about 1% of our revenues in CHF, but about 15% of our costs in CHF. It is our ambition to bring this to below 10% in the midterm. We're looking at doing that in two different path. One is that we're looking at the procurement and the activities of what we purchase in CHF and looking to obviously purchase this in the future in different currencies that are more adapted to where we have our revenues.
On the other side, as we grow the company and we expect, we expand towards a regional setup, both in terms of the U.S., but also, as Eric talked about in APAC, we also do expect to grow our activities further in those regions close to the customers and social activities. Therefore, as we will grow, we will grow in these regions, which will then lower the share in comparison of our Swiss francs activities. We are basically working on both initiatives and making progress in both areas, as we also recently discussed our initiatives in Singapore with the EDB.
That means is there any progress this year already expected or towards this 10% goal?
As I said, this is a midterm objective. We do expect some gradual progress over the midterm.
Okay, thanks.
Next question comes from Niels Granholm-Leth from DNB Carnegie. Please go ahead.
Thank you for taking my questions. First question, I'm sure you have seen that Sam's Club in the U.S. are looking to expand their hearing aid retailing. Would you regard yourself as conflicted as to expanding into this channel given your engagement with Costco? My second question would be just a household question as to your discontinued operations. In the theoretical situation that you were to own your Consumer Hearing business for the entire fiscal 2027, what would be the ballpark of the negative contribution from discontinued operations? Thank you.
Shall we start with the second question? CHB full year, what would be the impact?
If I understood well, you're asking what would be the impact of CHB for the full year, if it was in our financials for the full year, right? We do not specifically disclose that information. This is, you have the results that we have published for the prior year. Going forward, we would make progress towards a break even, but not getting fully there yet, in this current fiscal year.
Yeah.
Yeah.
About this large retailer in the U.S., obviously, I would not comment in details. I will just say that on the 23rd of March, we explained that country by country, we want to deploy a multi-channel, multi-brand strategy. In other words, bringing the right product at the right price in the right channel. That's all I will say.
Could I just then follow up on that matter? When it comes to your use of the Sennheiser brand, are there any circumstances that would lead to the termination of your rights to use the Sennheiser brand?
No. Without going into too many details, the license agreement we have to be able to sell, in, this very large account in the U.S. under the Sennheiser brand, it's a separate licensing agreement. It's disconnected from anything else. We don't have any issue there.
Okay. Thank you.
The last question for today comes from Richard Felton from Goldman Sachs. Please go ahead.
Great. Thank you very much for squeezing me in. I'll just keep it to one question, please, and it's a follow-up on the discussion on the APAC opportunity. Could you just remind us where you currently see your market share in some of those key APAC markets and how that compares to your global average? Thank you.
Okay. All right. Let's say that if we are at I'll just make it simple. If we are at 10 as an index market share in Europe or in the U.S., we are, with the exception of Australia, in Asia, around, depending on the markets, three-six. If I go back to the step one about Asia Pacific, it tells you that we have a chance to potentially double at least the size of our business in Asia. It's not gonna happen overnight. Again, I would highlight that by just bringing one product with the right energy, the right focus in a market like Japan, we have generated over the last few months, high double-digit growth.
Thank you, Eric. Very clear.
All right.
All right. Thank you very much for everybody joining the call. If you have any additional questions, feel free to reach out to me. I will be available for the rest of the day. Thanks for joining, and I wish you a very good day. Thank you.
Thank you very much for all your questions. Have a great day.
Thank you.
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