Demant A/S

Interim Report 2020 - Seite 3

New outlook

The Group’s outlook for 2020 was withdrawn on 15 March as a direct consequence of coronavirus and, as mentioned above, we still see significant uncertainties when it comes to the normalisation of the hearing healthcare market. However, based on an assumption of no further widespread lockdowns occurring before the end of the year and of sales in the hearing healthcare market approaching normalisation in the fourth quarter of the year, we now expect to generate revenue growth in local currencies of 5-15% in the second half-year (revenue in the comparative period was negatively impacted by the IT incident). This includes revenue generated by EPOS (not consolidated last year). We expect to see improvements in the Group’s EBIT before EPOS one-offs in the second half-year compared to the first half-year, reflecting an expected revenue improvement. We expect to recognise negative EPOS one-offs of DKK 75-125 million in the second half-year related to extraordinary spending on branding. We maintain the suspension of our share buy-backs, pending more visibility on the pace of market recovery.

“Thanks to a strong and innovative product portfolio, we saw high growth above expectations and very positive development in all our hearing healthcare activities in the first months of 2020. In the unprecedented period from mid-March and onwards, our revenue was severely hit, and the hearing healthcare market came to an almost complete halt. I am proud to note that with our ability to control costs and stay in close contact with our customers, we are in a solid position that will enable us to ensure continuous recovery and steer through the corona crisis. With the working from home trend, we have also been favoured by strong tailwind in our new headset business EPOS. To my great satisfaction, we have been able to keep our roadmap and pace when it comes to new product development and launches through a challenging half-year, and our employees have been dedicated and done an excellent job in supporting our company,” says Søren Nielsen, President & CEO of Demant, and continues:

“I’m especially thankful for the trust and loyalty that our customers and users have shown us, resulting in current performance at the same level as last year. Bearing the improved recovery situation in mind, we expect to approach normalisation this year, however, with a potential spill-over into next year, as it is uncertain how and when the demand will materialise.”