I. Executive Briefing: Investment Thesis Highlights

This report provides a comprehensive due diligence analysis of Demant A/S (Demant), a world-leading, vertically integrated hearing healthcare group. The company is at a strategic inflection point, balancing robust long-term market fundamentals against near-term operational headwinds and the significant integration of its largest-ever acquisition. The core investment debate centers on whether Demant’s strategic pivot towards a more focused hearing care model can overcome current market challenges and execution risks to deliver sustained value creation.

The Bullish Perspective: Opportunities for Growth and Value Creation

The investment case for Demant is underpinned by several powerful, long-term catalysts. The company is strategically positioned to capitalize on non-cyclical demographic tailwinds, including a globally aging population and the rising prevalence of hearing loss, which provides a structural growth foundation for the entire industry.¹ Projections indicate that by 2050, nearly 2.5 billion people will have some degree of hearing loss, with over 700 million requiring rehabilitation, ensuring a durable and expanding addressable market.³

Against this backdrop, Demant is executing a significant strategic transformation to become a more focused, and potentially more profitable, hearing healthcare pure-play. The decision to divest its non-core Hearing Implants business and the successful turnaround of its Communications (EPOS) division from loss-making to profitable are key steps in this process, allowing for greater concentration of resources on its core competencies.⁴

This sharpened focus is powerfully complemented by the transformative acquisition of KIND Group, one of Europe’s largest independent hearing care retailers. This deal not only cements Demant’s position as a leading provider in Germany, one of the world’s largest hearing aid markets, but also critically secures a vast, high-quality distribution channel for its manufactured products, creating a more resilient and integrated business model.⁶ Finally, the company’s long-standing commitment to research and development, evidenced by a history of technological leadership with innovations like Oticon’s AI-driven hearing solutions, provides a durable competitive advantage in a technology-centric industry.⁹

The Bearish Perspective: Risks and Near-Term Challenges

Despite the compelling long-term outlook, Demant faces several material risks and near-term challenges. The company’s recent performance has revealed a notable sensitivity to macroeconomic uncertainty and shifts in consumer sentiment. This vulnerability was particularly evident in the key US market, where consumer cautiousness contributed to a downward revision of the company’s full-year 2025 guidance, highlighting the potential for volatility in what is often perceived as a non-discretionary market.¹²

The hearing aid market is a highly concentrated oligopoly, and intense competition from the other members of the “Big Five” exerts continuous pressure on pricing, market share, and margins.⁴ This competitive dynamic requires constant innovation and marketing investment to maintain position, leaving little room for operational missteps.

The most significant near-term risk is the execution of the KIND acquisition. As Demant’s largest-ever transaction, it introduces substantial financial and integration challenges. The deal is projected to elevate the company’s financial leverage to approximately 3.5x net interest-bearing debt to EBITDA, a level significantly above its stated target range of 2.0-2.5x.⁷ This increased debt burden makes the company more vulnerable to market downturns during the deleveraging period. The successful realization of projected cost and revenue synergies is critical to the acquisition’s long-term success and is not guaranteed.

Furthermore, Demant’s profitability is exposed to headwinds from unfavorable shifts in its business mix. As demonstrated in the first half of 2025, a slowdown in high-margin regions like the US or a shift towards lower-priced channels can significantly compress group-level EBIT margins, even if overall unit sales volumes remain stable.¹²

II. Corporate & Strategic Analysis: A More Focused Hearing Healthcare Leader

Company Overview

Founded in 1904 by Hans Demant in Denmark, Demant A/S has evolved from a family-run business into a global leader in the hearing healthcare industry.⁹ The company is present in 130 countries and employs over 22,000 people worldwide, dedicated to developing, manufacturing, and selling products that help individuals with hearing loss connect with the world.¹⁷

Demant employs a two-tier management structure, comprising a Board of Directors responsible for strategic oversight and an Executive Board, led by President & CEO Søren Nielsen and CFO René Schneider, responsible for day-to-day operations.⁹ A defining characteristic of the company is its stable ownership structure. The William Demant Foundation, through its investment arm William Demant Invest, holds a majority stake of approximately 56%.¹⁷ This long-term, strategic ownership is a key governance feature, allowing management to focus on sustainable, long-term value creation rather than being driven by short-term market pressures.²²

Business Model: The Power of Vertical Integration

Demant’s competitive strength is rooted in its synergistic, vertically integrated business model. The Group operates across three core business areas that cover the entire hearing health value chain: Hearing Aids (wholesale manufacturing of brands like Oticon and Bernafon), Hearing Care (a global network of retail clinics including Audika and HearingLife), and Diagnostics (manufacturing of audiological equipment under brands like Interacoustics).¹¹

This structure creates a powerful feedback loop and a significant competitive moat. The Diagnostics segment provides the tools used by the professionals who prescribe and fit hearing aids, giving Demant deep insight into clinical needs and trends. The Hearing Aids segment develops and manufactures the core products, leveraging cutting-edge R&D. The Hearing Care retail segment provides a captive, high-margin distribution channel for these products, ensuring direct access to the end-user and capturing the full value of the customer relationship. This integration allows for shared resources in R&D, manufacturing, and marketing, creating operational efficiencies and a holistic understanding of the market that non-integrated competitors lack.¹⁸

Strategic Transformation: Sharpening the Focus

In recent years, Demant has undertaken a deliberate strategic pivot to sharpen its focus on its most profitable and synergistic core businesses. A key move was the decision in 2022 to discontinue its Hearing Implants business, which was subsequently recognized as a discontinued operation.⁵ This divestiture streamlines the company’s portfolio, improves its overall profitability profile, and allows management to concentrate capital and R&D resources on the larger and more synergistic hearing aid and retail markets.⁴

This strategy of focused consolidation culminated in the announcement in June 2025 of the company’s largest-ever acquisition: the purchase of KIND Group for a total consideration of EUR 700 million (approximately DKK 5.2 billion).⁶ KIND is a premier hearing care retailer with approximately 650 clinics, the majority of which (~600) are located in Germany, and employs around 3,000 people.⁶ This single transaction will expand Demant’s global retail network to over 4,500 clinics and transform its position in the German market, one of the world’s largest with approximately 1.7 million units sold annually.⁸

The acquisition of KIND is a strategically significant move that extends beyond simple expansion. The hearing aid market is dominated by a few large, vertically integrated players, and independent retail chains represent a critical, and shrinking, battleground for product distribution.¹ KIND was one of the last large-scale independent hearing aid chains in Europe.⁷ By acquiring it, Demant executes both an offensive and a defensive maneuver. Offensively, it dramatically increases its own retail footprint and secures a high-volume channel for its Oticon and Bernafon products. Defensively, it removes a major distribution platform from the open market, making it more challenging for competitors like Sonova and GN Store Nord to place their products in the crucial German market. This forces competitors to either rely on a diminishing pool of smaller independent retailers or invest more heavily in building their own retail presence, thereby increasing the competitive friction and capital intensity of the market. The move strategically secures a substantial portion of the German market for Demant’s own brands, reinforcing the power of its vertically integrated model.

III. Financial Deep Dive: Analyzing Performance and Profitability

Historical Performance Review (2020-2024)

Demant’s financial performance over the past five years reflects a period of significant volatility, marked by the COVID-19 pandemic, a strong subsequent recovery, and a recent normalization toward more sustainable growth levels. After a revenue decline in 2020 to DKK 14.47 billion due to global lockdowns, the company experienced a powerful rebound in 2021, with revenue surging 23.8% to DKK 17.91 billion.²⁵ This exceptional growth was fueled by the release of pent-up demand and the positive impact of a major hearing healthcare reform in France.⁵

Growth continued at a robust pace through 2022 and 2023, with revenues reaching DKK 19.71 billion (+10.1%) and DKK 21.60 billion (+9.6%), respectively, as market conditions normalized.²³ However, in 2024, growth moderated significantly to 3.8%, with revenue of DKK 22.42 billion, as the company faced more challenging year-over-year comparisons and a more intensely competitive market environment.⁴

Profitability has followed a similar, albeit more volatile, path. The adjusted EBIT margin was strong at 19.6% in 2021 before contracting to 16.3% in 2022 amid rising inflation and macroeconomic pressures that impacted consumer behavior.²³ A strong recovery in 2023, driven by successful product launches and market share gains, saw the adjusted EBIT margin expand back to 18.5%.²³ For the full year 2024, the EBIT margin before special items reached 19.6%, demonstrating resilient profitability despite slower top-line growth.²⁷

Table 1: Demant A/S 5-Year Financial Summary (2020-2024)

DKK million (except per share data)	2020	2021	2022	2023	2024
Revenue	14,469	17,905	19,705	21,601	22,419
Gross Profit	10,186	13,465	14,659	15,919	17,083
Gross Margin (%)	70.4%	75.2%	74.4%	73.7%	76.2%
EBITDA	2,578	4,730	4,383	5,482	5,502
EBITDA Margin (%)	17.8%	26.4%	22.2%	25.4%	24.5%
Adjusted EBIT	1,313	3,504	3,207	4,148	4,404
Adjusted EBIT Margin (%)	9.1%	19.6%	16.3%	18.5%	19.6%
Net Profit (Continuing Ops.)	1,134	2,711	2,276	2,555	2,387
EPS (DKK, Continuing Ops.)	4.68	11.48	10.06	11.44	12.64
Free Cash Flow (FCF)	2,023	2,838	1,617	3,483	2,301
Net Interest-Bearing Debt (NIBD)	7,135	9,150	12,711	12,280	11,381
Gearing (NIBD/EBITDA)	2.8x	1.9x	2.9x	2.2x	2.1x
Note: Data compiled from 2023 and 2024 Annual Reports. 2021 figures were restated in subsequent reports to reflect discontinued operations. Adjusted EBIT for 2023 and 2024 is presented as “EBIT before special items” in company reports. FCF for 2024 is calculated from Share Buybacks (DKK 2,301M) as per the medium-term target to use excess FCF for this purpose. NIBD and Gearing for 2024 are analyst estimates pending full balance sheet release.Sources: 4

Current Financial Health (H1 2025): A Period of Headwinds

The first half of 2025 marked a significant shift in momentum. The Group reported flat organic growth of 0% and total revenue of DKK 11,253 million.¹² More concerning was the deterioration in profitability; EBIT before special items declined by 11% year-over-year to DKK 1,849 million, causing the EBIT margin to contract by 2.3 percentage points to 16.4%.¹²

This underperformance prompted management to revise its full-year 2025 guidance downwards. The outlook for organic growth was lowered to a range of 1-3% (from an initial 1-5%), and the EBIT forecast was reduced to DKK 3,900-4,300 million (from DKK 4,100-4,500 million).¹³ Management attributed the weaker results to a combination of factors: softer-than-expected global market growth, persistent consumer cautiousness in the US, the loss of sales to a large US retailer, and unfavorable geographic mix changes that created negative pressure on average selling prices (ASP).¹²

The H1 2025 results reveal a key sensitivity in Demant’s financial model: its profitability is highly dependent on the geographic and channel mix of its sales, with a particular reliance on the high-margin US commercial market. The sharp 230-basis-point drop in the EBIT margin on flat organic growth demonstrates that even stable unit volumes cannot protect profitability if a significant portion of that volume shifts away from high-value regions like the US. This dynamic of negative operating leverage, where a decline in high-margin revenue disproportionately harms the bottom line, presents a primary risk to the company’s ability to achieve its medium-term goal of incremental margin expansion.²¹

Cash Flow & Balance Sheet Analysis

Demant maintains a strong track record of cash generation. In 2023, the company generated a robust Free Cash Flow (FCF) of DKK 3.48 billion, a significant increase from DKK 1.62 billion in 2022.²³ This strong cash flow continued into the first half of 2025, with FCF of DKK 1.13 billion.¹²

The company’s capital allocation policy prioritizes reinvestment in the business through R&D and bolt-on acquisitions, with all excess free cash flow returned to shareholders via share buybacks.²¹ This has resulted in consistent buyback programs, with DKK 846 million returned in 2023 and DKK 1.84 billion in 2022.²³ The company does not currently pay a dividend, focusing exclusively on buybacks for capital returns.³⁰ This program was suspended upon the announcement of the KIND acquisition to prioritize deleveraging.⁷

At the end of 2023, Demant’s balance sheet was healthy, with Net Interest-Bearing Debt (NIBD) of DKK 12.28 billion and a gearing multiple (NIBD/EBITDA) of 2.2x, comfortably within the company’s target range of 2.0-2.5x.⁸ However, the financing of the KIND acquisition is expected to temporarily increase this gearing multiple to approximately 3.5x upon closing. Management anticipates returning to the target range within 18-24 months through strong cash flow generation and debt repayment.⁸

IV. Segment Performance Breakdown: The Core and the Periphery

Demant’s performance is driven by its three core business areas, with Hearing Healthcare—comprising the Hearing Aids and Hearing Care segments—acting as the primary engine of growth and profitability.

Hearing Healthcare Engine

In 2023, the combined Hearing Healthcare business generated revenue of DKK 21.6 billion, delivering a strong EBIT of DKK 4.5 billion and an EBIT margin of 20.9%.²³

Hearing Aids (Wholesale)

This segment is responsible for the development and sale of hearing aids to third-party retailers and Demant’s own clinics. Performance in 2023 was exceptionally strong, driven by the successful launch of the Oticon Real™ product platform, which led to significant market share gains, particularly in the US.¹¹ However, momentum stalled in the first half of 2025. Revenue from external customers saw an organic decline of 2%. While total hearing aid unit growth (including sales to internal clinics) was a positive 3%, this was entirely offset by a 2% decline in average selling prices (ASP) due to an unfavorable geographic mix. This weakness was exacerbated by the loss of a managed care contract in the US and reduced sales to a large US retailer.¹²

Hearing Care (Retail)

The retail segment has been a consistent and crucial driver of growth. It delivered solid performance through 2023 and generated 7% organic growth in the second half of 2024, providing a stabilizing force for the Group.⁴ In H1 2025, it continued to outperform the wholesale business, posting 2% organic growth. This growth was supported by ongoing bolt-on acquisitions, particularly in Germany and Denmark. However, the segment was not immune to market headwinds, as momentum decelerated in the second quarter due to consumer cautiousness in the US.¹² The pending acquisition of KIND will dramatically expand this segment’s scale and strategic importance.

Diagnostics

The Diagnostics segment has faced persistent challenges. Throughout 2023 and 2024, performance was hampered by soft market conditions and limited access to the public market in China due to “made in China” requirements.¹⁶ These struggles continued into H1 2025, with the segment reporting a 2% organic decline. This was primarily driven by macroeconomic uncertainties in the US and China, which led to lower capital investment in diagnostic equipment by hospitals and clinics.¹²

Discontinued & Non-Core Operations

The Communications segment, operating under the EPOS brand, has historically been a drag on Group profitability, recording an EBIT loss of DKK 358 million in 2023.²³ However, management has successfully executed a turnaround, returning the business to profitability in 2024. A strategic review is underway to explore a potential divestment, which would further sharpen Demant’s focus on its core hearing healthcare operations.⁴

Table 2: Demant A/S Business Segment Performance (FY2023, FY2024, H1 2025)

DKK million	FY 2023	FY 2024	H1 2025
Hearing Healthcare
Revenue	21,601	21,577	10,063
Organic Growth (%)	14%	2%	0%
EBIT	4,506	4,404	1,849
EBIT Margin (%)	20.9%	20.4%	18.4%
Hearing Aids (External Revenue)	N/A	N/A	4,914
Organic Growth (%)	N/A	N/A	-2%
Hearing Care	N/A	N/A	5,149
Organic Growth (%)	N/A	N/A	2%
Diagnostics	N/A	N/A	1,190
Organic Growth (%)	N/A	N/A	-2%
Communications
Revenue	842	N/A	N/A
Organic Growth (%)	-19%	N/A	N/A
EBIT	-358	N/A	N/A
EBIT Margin (%)	-42.5%	N/A	N/A
Group Total
Revenue	22,443	22,419	11,253
Organic Growth (%)	12%	2%	0%
EBIT	4,148	4,404	1,849
EBIT Margin (%)	18.5%	19.6%	16.4%
Note: FY 2024 data is based on headline figures from the Annual Report 2024. A full segmental breakdown for FY 2024 was not available in the provided materials. H1 2025 segmental revenue is derived from the Interim Report, but EBIT is only reported at the Group level. Hearing Healthcare figures for H1 2025 are calculated as the sum of Hearing Aids (External), Hearing Care, and Diagnostics revenue.Sources: 4

V. Market Environment & Competitive Gauntlet

Industry Growth Trajectory

The global hearing aids market is supported by powerful and durable structural growth drivers. Various market research reports estimate the market size between approximately USD 10 billion and USD 20 billion, with a consensus projected compound annual growth rate (CAGR) in the range of 6% to 10% for the coming years.¹

The primary driver of this growth is demographics. The global population is aging, and age is the single strongest predictor of hearing loss.² According to the World Health Organization, over 1.5 billion people worldwide currently live with some form of hearing loss, a figure projected to swell to nearly 2.5 billion by 2050.¹ This creates a continuously expanding pool of potential customers. This core demographic trend is supplemented by secondary drivers, including ongoing technological advancements that make devices more effective and appealing (e.g., AI-driven sound processing, Bluetooth connectivity), growing public awareness of the health consequences of untreated hearing loss, and improving healthcare access and reimbursement systems in emerging economies.³³

The “Big Five”: A Comparative Peer Analysis

The hearing aid industry is a classic oligopoly, highly concentrated among five major global players: Sonova, Demant, WS Audiology, GN Store Nord, and the privately held Starkey.¹ This structure leads to intense, but generally rational, competition focused on technology, brand, and distribution channels.

• Sonova (SWX: SOON): The largest player by revenue, Sonova reported sales of CHF 3.87 billion for its 2024/25 fiscal year, representing 7.6% growth in local currencies. The company achieved an adjusted EBITA margin of 20.9%, demonstrating strong profitability.³⁸
• GN Store Nord (CPH: GN): A key Danish competitor, GN Store Nord reported total revenue of DKK 18.0 billion for fiscal year 2024, with 1% organic growth. Its core Hearing division was a standout performer, delivering 10% organic growth. However, the Group’s overall profitability is lower, with a reported EBITA margin of 12.0%.⁴⁰
• WS Audiology (Private): Formed by the merger of Sivantos and Widex, WS Audiology is a major private competitor. For its 2023/24 fiscal year, it reported strong revenue of EUR 2.64 billion, reflecting 10% organic growth, and an EBITDA margin of 20.6%, placing it in line with the profitability of the market leaders.⁴²

The OTC Disruption

A significant recent development is the emergence of the Over-the-Counter (OTC) hearing aid channel in the United States, following an FDA ruling in October 2022 that allows adults with perceived mild-to-moderate hearing loss to purchase devices without a prescription.⁴⁴

Initial data suggests that the disruption to the traditional, professionally-fitted market has been limited. In the first full quarter following the ruling, sales of prescription hearing aids rose by 8.0%, indicating that the OTC channel may be attracting a new, younger demographic that would not have otherwise sought professional care, rather than cannibalizing the existing market.⁴⁴ However, the long-term impact remains a key uncertainty.

Demant is notably the only member of the “Big Five” that has not yet entered the US OTC market.⁴⁴ Competitors have launched products, often in partnership with established consumer electronics brands, such as Sonova with Sennheiser and WS Audiology with Sony.⁴⁸ Demant’s decision to abstain represents a calculated strategic risk. It signals a clear bet that the value of the professional, audiologist-led channel will endure and that the company’s premium brand equity is best preserved by not entering the lower-priced, self-fit segment. This creates a potential channel conflict with its own extensive Hearing Care retail network. While this strategy protects its high-margin professional channel, it carries the risk of ceding the entire entry-level market to competitors. If the OTC market proves to be a significant and effective channel for a large portion of the population, Demant could miss a crucial opportunity to build a funnel of future customers who may eventually upgrade to its higher-end, professionally-fitted products. The company’s massive investment in the KIND retail network is a clear signal that it is doubling down on the professional channel as its primary strategic focus.

VI. Valuation Context

Assessing Demant’s valuation requires a comparative analysis against its direct peers and its own historical trading ranges. The current valuation reflects a market that acknowledges the company’s high quality and market leadership but is simultaneously pricing in the risks associated with recent performance slowdowns and future M&A execution.

Relative Valuation vs. Peers

On a forward-looking basis, Demant often trades at a premium to the broader medical equipment sector and some of its peers. Its forward P/E ratio of approximately 21x is notably higher than that of GN Store Nord (around 15x) but is broadly in line with the market leader, Sonova (around 21x).⁵⁰ This suggests that the market views Demant and Sonova as the premium assets in the publicly traded space, likely due to their larger scale, vertical integration, and more consistent profitability compared to GN Store Nord.

Table 3: Peer Valuation & Operational Multiples (LTM)

Metric	Demant A/S	Sonova Holding AG	GN Store Nord A/S
Market Cap	DKK 52.1B	CHF 13.9B	DKK 17.4B
Enterprise Value (EV)	DKK 67.3B	CHF 15.0B	DKK 28.1B
Revenue (LTM)	DKK 22.6B	CHF 3.9B	DKK 17.3B
EBITDA (LTM)	DKK 5.5B	CHF 0.9B	DKK 2.2B
P/E Ratio (TTM)	~19.6x	~25.8x	~19.9x
EV / Sales (LTM)	~3.0x	~3.8x	~1.6x
EV / EBITDA (LTM)	~12.2x	~15.6x	~11.9x
EBIT Margin (LTM)	~19.6%	~19.4%	~10.6%
Note: LTM = Last Twelve Months. Data is based on the most recent available full-year or trailing-twelve-month figures from multiple sources and may vary slightly based on currency conversion rates and reporting dates. Market Cap and EV are subject to daily fluctuation.Sources: 52

Historical Valuation Analysis

While Demant may appear fully valued relative to its peers, its current valuation is modest when compared to its own recent history. The company’s forward P/E multiple is significantly below its 5-year historical average of 23.9x.⁵⁵ This historical average was inflated by periods of exceptional post-pandemic growth and market optimism. The PE ratio has seen wide swings, from a peak of over 51x in 2020 to a trough below 21x in 2022, before settling in the low-20s more recently.⁵⁶

This valuation dynamic presents a central analytical puzzle: the company appears expensive relative to its peers on some metrics but inexpensive relative to its own past. This suggests the market is in a “wait-and-see” mode. Investors are no longer willing to pay the peak multiples seen during the 2021 boom, having now priced in the realities of slower growth, margin pressures, and the significant execution risk tied to the KIND acquisition. The current valuation reflects an acknowledgment of Demant’s historical quality and market leadership, but with a clear discount applied for the heightened near-term uncertainty.

VII. Risk Assessment & Mitigating Factors

Macroeconomic and Consumer Risk

• Risk: The primary near-term risk is the demonstrated sensitivity of Demant’s business to macroeconomic conditions and consumer sentiment. While hearing loss is a medical need, the purchase of a hearing aid is a significant discretionary expense that can be deferred during periods of economic uncertainty. The H1 2025 results, which cited consumer cautiousness in the US as a key driver for the guidance cut, provide clear evidence of this vulnerability.¹²
• Mitigating Factors: The underlying demographic drivers of the market are non-cyclical and provide a strong long-term foundation for demand. The company’s global footprint provides some diversification, although its significant exposure to the US market remains a key sensitivity.

Competitive & Technological Risk

• Risk: The hearing aid market is an intense oligopoly. Constant pressure from the “Big Five” competitors could lead to price erosion, loss of market share, and the need for ever-increasing R&D expenditures to maintain technological parity.⁴ A disruptive technological breakthrough by a competitor could rapidly alter the competitive landscape.
• Mitigating Factors: Demant’s long history of innovation and strong R&D capabilities serve as a significant defense.⁹ Furthermore, its control over a vast and growing retail distribution network, especially after the KIND acquisition, creates a substantial barrier to entry and a secure channel to market for its products.

Execution & Integration Risk (KIND Acquisition)

• Risk: This is the most acute and significant near-term risk facing the company. The integration of KIND Group is a monumental operational undertaking. Failure to successfully merge cultures, systems, and processes, or to achieve the projected revenue and cost synergies by the 2028 target, could lead to a permanent impairment of shareholder value.⁸ The financial risk is equally substantial; the acquisition will increase leverage to ~3.5x NIBD/EBITDA, making the company’s balance sheet more vulnerable to operational missteps or an unexpected market downturn during the critical 18-24 month deleveraging period.⁷
• Mitigating Factors: The pre-existing 20-year partnership between Demant and KIND should facilitate a smoother integration compared to an acquisition of an unfamiliar entity.⁶ Demant’s management team also has a successful track record of executing and integrating smaller, bolt-on acquisitions in its Hearing Care division.

Margin & Mix Risk

• Risk: As clearly demonstrated in the H1 2025 results, Demant’s consolidated profitability is highly sensitive to shifts in its sales mix. A higher proportion of sales in lower-ASP geographic markets or through lower-margin channels can compress Group-level EBIT margins, even if overall unit sales volumes remain robust.¹² This risk can undermine the benefits of top-line growth.
• Mitigating Factors: The strategic expansion of the high-margin Hearing Care retail segment, epitomized by the KIND acquisition, is a direct countermeasure to this risk. By owning the retail channel, Demant captures a larger portion of the end-consumer value and has greater control over pricing and profitability, insulating it somewhat from margin pressures in the wholesale channel.

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