与Demant A/S高管层对话的反馈

Restricted - External DEMANT.CO/DEMANT DCUNDERWEIGHTEuropean MedicalTechnology & ServicesPOSITIVEPrice TargetDKK 220.00Price (23-May-25)DKK 259.40Potential Upside/Downside-15.2%Source: Bloomberg, Barclays ResearchEuropean Medical Technology &ServicesHassan Al-Wakeel, CFA+44 (0)20 7773 3898hassan.al-wakeel@barclays.comBarclays, UKJonathon Unwin+44 (0)20 7773 0354jonathon.unwin@barclays.comBarclays, UKMarco Pires-Cox+44 (0)20 3134 3421marco.pirescox@barclays.comBarclays, UKRohit Rajan+91 (0) 22 6175 1698rohit.rajan@barclays.comBarclays, UK •Margin:Industry-leading on EBIT margin, since focus on Hearing Healthcare and•discontinuation of cochlear implants.•M&A:Consolidation of the distribution side is part of the strategy.••Market Share:Historically, they wanted to improve Costco and VA position. Costco part has•been achieved, and VA is the other big channel where they would like to see increased marketshare – very high on priorities.Guidance•Range:1-5% growth range - it comprises all outcomes from a market that is growing 4% and•Demant gaining market share which could get to Demant growth of 5%, to a market growing2% and Demant losing share to get to 1% Demant growth.•US:Market share in the US is important swing factor - VA, independents, Costco being the•most prominent examples.•Costco:Uncertainty, but seems like there will be four suppliers. Have seen a preference for•Philips products in Costco. Not baking in any material share changes in Costco.•VA:Expect to exit the year with higher market share than at the start of the year.••France:HSD volume growth for 2025 (running at DD growth rates, no replacements in Q1),•ASP negative so revenue growth will not be HSD. Looking at repeat customers the dataconfirms their modelling. Expects volumes to be supported in 2026 and 2027, too. Will get afull replacement cycle in the French market over predominantly 2025 and 2026/27.Market Dynamics•First quarter of the year saw challenged US hearing aid market, would normally see a•trajectory of 5% CAGR in US, but was -4% in Q1 – highly unusual.•Management felt it was prudent to have a more cautious view for the year, hence market•guidance went from 4-6% in value terms to 2-4%.•Looking for US market recovery in Q2, then for a Q3-Q4 that more resembles a normal US•hearing aid market.•There was no doubt that the shortfall in Q1 was in the US. Macroeconomic turmoil,tariffs,•share price declines etc, translated into a negative consumer sentiment in the US that sawsome people deferring purchases.•Not uncertain that the US market will recover, but there is uncertainty around when exactly it•will come back.•Do expect positive growth in US in Q2. April suggests that a core assumptions of Q2 is still•valid.•Inflation uncertainty caused contraction but recovered over the next HY (almost more than•what was lost). Post-COVID demand exploded.2 •Europe and APAC slightly weak in Q1, but not nearly as weak as the US. But for lack of better•insight, it is also assumed that geographies outside the US are impacted by turmoil but aregenerally more supported by government tenders and free-to-consumer hearing aids.Pricing•Global ASP reduction expectation was a mix impact from the US market growing slower than•the ROW, but on a product by product/ geography by geography the company does not see areduction in ASP.•LFL general assumption is flat to slightly increased ASP. Also subject to phasing of high-end•product launches, which geographies are growing faster, and these mixeffectsare impactful.•Discipline on pricing is the reason they have industry leading margins.•Products/ Innovation•Oticon Intent – in a good position on most parameters, in line with best or best in class.••Management expects there will be something new in the Fall. Demant always launches new•products twice per year. It can either be a platform, orsoftware,and sometimes it issomething else. That rhythm is very predictable.•AI theme is important. Still at the beginning of a journey with how to maximise the potential.••Hearing Aids - product innovation is biggest opportunity, it moves the needle. Not a•commodity, innovation really helps with audiologists.Managed Care•Demant were not happy with their position in Managed Care at the beginning of 2024 from a•combination of commercial terms, weighed against collateral damage of making productsavailable on insurance programmes, and time spent in their hearing clinics fitting managedcare customers at a relatively low fee. Wanted to bring them to a better place throughnegotiations, but did not succeed in the short term as they lost access to managed care(major providers) because Demant would notofferthe newest technology.•Been in dialogue with largest managed care organisations and now have a new agreement•and willofferOticon at adifferentset of detailed circumstances.•Will see a positive contribution from MC, but will not be material on the Demant group. Don’t•expect to recover previous market share.•Hearing Care – definitely benefited