Demant (DEMANT) Q3 2025 earnings summary

Executive summary

• Q3 2025 performance was at the lower end of expectations due to a softer hearing aid market, negative ASP effects, and a sequential slowdown in the US commercial market, but global market share gains were achieved in hearing aids.

• Hearing Care delivered solid growth above the general market, while Diagnostics continued to face weak demand, particularly in the US.

• The company signed an agreement to divest Oticon Medical, with closing expected by end of Q1 2026, marking a full exit from the Implant Business Area.

• Launch of Oticon Zeal (also referred to as Oticon Seal), a new in-ear hearing aid with advanced features, received strong market interest, with a phased rollout starting in Europe in Q4 2025.

Financial highlights

• Group organic revenue growth reached 3% in Q3 2025, an improvement from H1, driven by Hearing Aids and Hearing Care.

• Gross margin declined year-over-year due to negative ASP effects in Hearing Aids, a higher share of rechargeable devices, and product mix changes; Diagnostics also contributed to margin pressure.

• EBIT was at the lower end of expectations, impacted by gross margin contraction and negative FX effects.

• Strong cash flow from operations and free cash flow, supported by working capital management, led to a slight reduction in net interest-bearing debt.

• Share buybacks totaling DKK 582 million were completed for the year, with the program suspended due to the pending KIND Group acquisition.

Outlook and guidance

• 2025 outlook maintained: 1-3% organic revenue growth and EBIT of DKK 3,900-4,300 million, but results are likely to be at the lower end of the range.

• Market unit growth for hearing aids in 2025 expected at 2-4%, with ASP development around -1% and value growth of 1-3%.

• Loss from discontinued operations (Oticon Medical and Communications) expected to be around DKK 200 million for 2025.

• Gearing ratio expected within 2.0-2.5x at end of 2025, temporarily exceeding after KIND Group closing.

• Q4 is expected to perform similarly to Q3, remaining at the low end of expectations.