Earnings call transcript: Amplifon Q4 2024 sees steady growth

Amplifon, a leading global provider of hearing solutions, announced its financial results for the fourth quarter of 2024, posting a revenue of €665 million, marking an 8% increase at current foreign exchange rates. The recurring EBITDA for the full year stood at €568 million, reflecting a 4.8% increase compared to 2023. Despite these gains, the EBITDA margin slightly decreased to 23.6% from 24% the previous year. According to InvestingPro data, Ameriprise Financial’s stock, trading at a P/E ratio of 14.97, showed a modest decline. The company maintains strong financial health with an overall score of "GREAT" from InvestingPro’s comprehensive analysis system.

Key Takeaways

• Amplifon achieved 7% full-year revenue growth at constant exchange rates.
• The company expanded its U.S. store network to approximately 400 locations.
• Amplifon anticipates mid to high single-digit revenue growth in 2025.
• The global hearing aid market is expected to grow by 4% in 2025.

Company Performance

Amplifon demonstrated solid performance in 2024, with revenue growth driven by strategic expansions and innovations. The company increased its presence in the U.S. and China, enhancing its direct store and point-of-sale networks. Despite a challenging European market environment, Amplifon maintained its competitive edge with diversified sourcing strategies and a strong global presence.

Financial Highlights

• Full Year 2024 Revenue: €2,410 million, up 7% at constant exchange rates.
• Recurring EBITDA: €568 million, a 4.8% increase from 2023.
• EBITDA Margin: 23.6%, slightly down from 24% in 2023.
• Recurring Net Profit: €152 million, slightly down from €156 million in 2023.
• Q4 Revenue: €665 million, an 8% increase at current FX rates.

Outlook & Guidance

Amplifon has set a revenue growth target of 5% to 9% for 2025, expecting organic growth to outpace the market. The company anticipates margin expansion beyond 24% and aims to improve operating leverage in the EMEA region. Amplifon is optimistic about the European market’s recovery, particularly in France, where it expects around 10% growth.

Executive Commentary

Enrico Vita, CEO of Amplifon, expressed confidence in the company’s growth trajectory, stating, "We grew strongly around 7% at constant exchange rates." He also highlighted the positive outlook for the European market, saying, "We are positive about the European market coming back to solid growth."

Risks and Challenges

• Market Saturation: The global hearing aid market’s growth may slow, impacting Amplifon’s expansion plans.
• Exchange Rate Volatility: Currency fluctuations could affect financial performance.
• Regulatory Changes: New regulations in key markets could pose compliance challenges.
• Supply Chain Disruptions: Continued global supply chain issues may impact product availability.

Q&A

During the earnings call, analysts inquired about Amplifon’s M&A strategy and its potential impact on growth. The company confirmed its focus on mergers and acquisitions, targeting a 2% contribution to growth. Additionally, questions about U.S. tariffs were addressed, with Amplifon indicating minimal concern over their impact.

Full transcript - Ameriprise Financial Inc (AMP) Q4 2024:

Conference Operator, Chorusco: Good afternoon. This is the Chorusco conference operator. Welcome and thank you for joining the Amplifon Fourth Quarter and Full Year twenty twenty four Results Conference Call. At this time, I would like to turn the conference over to Ms. Francesca Rambaudi, Investor Relations and Sustainability Senior Director of Amplifon.

Please go ahead, madam.

Francesca Rambaudi, Investor Relations and Sustainability Senior Director, Amplifon: Thank you. Good afternoon and welcome to Amplifon’s conference call on fourth quarter and full year twenty twenty four results. Before we start, few logistic comments. Earlier today, we issued a press release related to our results and this presentation is posted on our website in the Investors section. The call can be accessed also via webcast and dial in details are on Amplifon’s website as well on the press release.

I have to bring your attention to the disclaimer on Slide two as some of the statements made during this call may be considered forward looking statements. With that, I’m now pleased to turn the call over to Antifon’s CEO, Nerissa Liza.

Enrico Vita, CEO, Amplifon: Thank you, Francesca. Good afternoon, everyone. Thank you all for joining us. So let’s begin with some comments on the year that just ended, which was more complex than we initially thought, especially and once again because of the development of the European market. In fact, while we saw The U.

S. Market continue to grow strongly and in line with our expectations at circa 6%, Europe, our core geography, was definitely weaker than we initially expected, mainly because of the negative performance of France. Q4 also was below expectations. We again estimated only flatfish slightly positive demand, not only for France, which was again a negative, but also for the Spanish market, which contracted sharply in November, hence in the quarter, due to the Dana storm. Unfortunately, it has been three years now that the European market has remained muted after the strong growth seen in 2021.

And it is also in light of this the anticipated growth of the French market that we expect a better 2025. But I will come back to this at the end of the presentation. In this overall context, also in 2024, we grew strongly around 7% at constant exchange rates. And I see this as an achievement considering our geographical mix, which is, as you know, still more skewed towards Europe, even if The U. S.

Grew exceptionally well in 2024. And in this regard, I would like to highlight another important achievement of last year. The United States has finally become our largest market. Regarding profitability, we had some dilution, making 2024 a year of significant investments to prepare us in the best way possible ahead of 2025 and beyond. I refer to the investments in Ideologics capacity in France during the second half of the year, ahead of the RAC0 reform anniversary, as well as the significant investment for the launch of the new TV campaign in Italy and Spain in Q4, which already had the positive effect on all our brand KPIs.

Additionally, as you know, we are building scale in strategic markets such as The U. S. And China. This has a dilutive effect on margin in the short term,

Gabriele Galli, CFO, Amplifon: but we are confident it will return higher profitability in the medium

Enrico Vita, CEO, Amplifon: and ability in the medium and long term. In fact, in China, as anticipated, we now can count on more than 500 stores and we are also running fast in our direct store network in The U. S, where we now have around 400 stores. All in all, we are proceeding at full speed following our strategic priorities, and I’m optimistic that all these initiatives will yield medium and long term benefits. Finally, we propose a dividend maintaining last year’s level.

With this, I now leave the floor to Gabriele, who will give you more details about our performance. Please, Gabriele.

Gabriele Galli, CFO, Amplifon: Thanks, Enrico, and good afternoon, everybody. Moving to Slide number four, we have a look at our financial performance in full year 2024. Revenues, as already commented by Enrico, reached another record level of EUR 2,410,000,000.00, up 7% at constant FX versus EUR 23, driven by a strong and above market organic growth at 3.4% in a two speed market environment with Europe softer than expected and U. S. Growing very heavily over a challenging comparison base of 8% organic growth in ’twenty three versus ’twenty two.

M and A contribution was a remarkable 3.6, thanks to the acquisition of around 400 points of sales, mainly in our core markets France, Germany, The U. S. And China. The effects in part was slightly negative for 0.4%, easing at the end compared to the first nine months of the year due to the amortization of the Argentine peso Sharp devaluation back in December 2023. EBITDA recurring amounted to EUR $568,000,000, up 4.8% versus full year 2023 with margin at 23.6% compared to 24% in full year ’twenty three due to the lower operating leverage in EMEA attributable to market softness, The dilution effect of the Miracolier Bharat retail network accelerated growth in The United States, as well as the strong investments we sustained during the year ahead of 2025.

Moving to Slide number five, we have a look at the group financial performance in Q4, which posted a revenue growth of 8% at current exchange rates and 4.5% at constant exchange rates. The organic performance was slightly below 1%, reflecting the following three main effects. First, the annualization of the strong devaluation of the peso carried out by the Argentinian government in December 2023, which inverted the negative impact on the exchange rate effect in the first nine months to positive and the positive impact on revenue at constant effects and consequently on organic growth in the first nine months to negative second, the softer than expected European market third, the extremely challenging comparison base with organic growth in the fourth quarter of twenty twenty three at a record 9%. The bolt on M and A acceleration contributed for 3.7% to the top line growth. FX was positive for 3.5%, primarily due to the normalization of the strong devaluation of the Argentine peso.

More in detail, being Argentine affected by asset inflation, the group needs to apply the inflation accounting principle, adjusting local financial statements with the price index and then translating the adjusted local financial statements into euro at December 31 exchange rate versus the usually applied average FX for the period. The sharp phase of the valuation executed in December 2023 is now annualized. So the effect for the full year is offset, but it’s pretty evident in Q4 when the FX effect is particularly positive, given that the last quarter of the year is calculated as the difference between the full year when the FX effect is slightly negative and the first nine months of the year when the FX was strongly negative. As a consequence, in Q4, reported sales accelerated with the FX effects reversing to positive with a negative impact on sales at constant FX and consequently a negative impact on organic growth as well. EBITDA recurring came in at around EUR155 million, in line with 2023, with margin at 23.4% compared to 25.3% in the previous year, primarily due to the lower operating leverage in EMEA attributable to a softer than expected European market, the significant marketing investment in Italy and Spain for the launch of the new advertising campaign and the strengthening of the audiologist capacity in France to prepare for 2025 expected market growth related to RAC0 anniversary.

As well as to the dilution effect, due to the Miracle Ear direct retail network accelerated growth with integration of the 100 points of sales acquired during the year. Moving to Slide six, we have a look at EMEA performance. Revenue growth at constant FX was around 3% versus Q4 ’twenty three, with organic performance reflecting the flattish and softer than expected market environment, especially in France, the largest market in the region, as well as a very soft market performance in Spain in November due to the strong BANA floods in November, which also severely compromised operations in more than 50 of our stores. M and A contribution in France and Germany was 2.4%. EBITDA amounted to EUR 180,000,000 with margin of 25.1% versus 28.4% in Q4 last year, primarily due to the lower operating leverage in a softer than expected market, the significant marketing investment in Italy and Spain for the launch of the new AVD campaign and the strengthening of the audiologist capacity in France to prepare for 2025 expected market growth.

In the full year, revenue growth at constant FX was 3% with a positive organic growth in a flattish market environment and M and A contribution was up 2.1%. EBITDA amounted to EUR $417,000,000 with margin at 27.2% versus 28.2 last year for the reasons just mentioned. Moving to Slide number seven, we have a look at the excellent performance of Americas. The organic performance in Q4 was plus 1.7%, reflecting the extremely challenging comparison base with Q4 last year having an organic growth of 26% versus Q4 ’twenty two. And above all, the already mentioned annualization of the strong devaluation of the peso in December ’3, which inverted the negative impact on the exchange rate effect seen in the first nine months of the year to positive, with a negative effect on the organic performance.

It’s worth noticing that The United States recorded a well above market double digit organic growth also in the fourth quarter, thanks to the performance of both Miracolier Direct Retail, which today has an effort of 400 points of sales and Amplipon Healing Healthcare. The FX impact was positive for 19.5% due to the exceptional and already commented Argentine Pesa devaluation in December 2023. The significant M and A contribution related to The U. S, Canada and Uruguay was 9.7%. EBITDA came in at 38,600,000 with margin at 27.4% compared to 28.8% last year due to the dilution effect of the Miracolier direct retail network accelerated growth and the integration of the 100 points of sales acquired during the year.

In the full year, revenues were up around 20% at constant effect despite the ’23 very strong comparison base with a 10.6% organic component. EBITDA amounted to around €130,000,000 up 12.7% versus 23 with margin at 25.5 compared to 26.8% in ’23. Moving to Slide number eight, we have a look at Asia Pac. Revenues were up over 5%, mainly driven by a solid and above market organic growth of 2.2% versus a remarkable comparison base of around 12% organic growth in Q4 ’twenty three versus Q4 ’twenty two. Despite the very tough macro environment, also China posted a solid organic growth in the quarter.

M and A contribution was 2.6% related to China sanction, which led our network today to over 500 points of sale. FX was a slight paywind of 0.3%, reversing compared to the first nine months of the year. EBITDA was EUR 23,800,000.0 with margin of 25.3% compared to 26.2% in Q4 last year due to the fast growth of China where we acquired around 110 points of sales during the year. In the full year, revenue were up 8.4% at constant FX, driven by a strong organic growth of 5% and M and A of 3.4%. EBITDA amounted to almost €97,000,000 up 7.8% versus 23% with the margin stable at 26.1%.

Moving to Slide nine, we see the profit and loss evolution. Total revenues increased by 6.6 at current FX and 7% at constant FX to 2,410,000,000.00 Recurring EBITDA increased by 4.8% to EUR $568,000,000, with margin at 23.6% versus 24% last year, reflecting the softer than expected market in Europe, the strong investments and the accelerated NMEA. D and A included PPA increased by around $35,000,000 leading the recurring EBIT to $265,000,000 versus $274,000,000 last year. Net financial expenses accounted for $60,000,000 primarily due to the higher net financial debt, including higher lease liabilities, following the strong M and A activity and the related network expansion, coupled with the refinancing of expiring loans mainly subscribed in 2020 at current market condition, leading profit before tax to $2.00 €5,000,000 versus around €225,000,000 last year. Tax rates ended up 25.9% with an improvement of 30 basis points versus 2023 and leading the recurring net profit to around $152,000,000 versus around $156,000,000 last year.

Net profit as reported was $145,000,000 versus $155,000,000 recorded in 2020. Moving to Slide 10, we appreciated Q4 profit and loss. In the quarter, total revenue increased by 8% at current FX to $665,000,000 dollars and at 4.5% at constant FX in light of the above mentioned reversal of the Argentine peso. EBITDA recurring came in at $155,000,000 in line with 2023 with margin at 23.4 around 190 bps below Q4 last year. D and A including PPA grew by $8,000,000 last year in light of the significant M and A acceleration and the strong investment in network, IT, infrastructure and innovation, leading the recurring EBITDA to 73,000,000 versus $81,000,000 in Q4.23.

Three. Net financial expenses amounted to $16,000,000 versus $13,000,000 in Q4 last year in light of the previously mentioned reasons. Tax rate ended at $21,500,000 versus $22,800,000 in Q4 last year, leading recurring net profit at $44,400,000 versus $53,000,000 last year. Moving to Slide 10, we appreciate the cash evolution. The operating cash flow after repayment of lease liabilities posted a very strong increase in the year ending at $321,000,000 versus $300,000,000 in 2023.

Despite higher lease liabilities of around €13,000,000 for the strong network expansion and the higher financial expenses for the accelerated M and A activity. Net CapEx increased by $5,000,000 versus prior year at $145,000,000 leading free cash flow to $176,000,000 versus $160,000,000 in ’twenty three, a remarkable 10% increase versus last year. Net cash out for M and A was $193,000,000 around 80% higher than 2023, following the significant acceleration of bolt on M and A with around 400 shops acquired in 2024, Diamond in France, Germany, U. S. And China.

NFP ended at around EUR $960,000,000, posting around EUR 110,000,000 increase versus December 2023 after a very strong investment for around million in capital, M and A, dividends and share buyback. Moving to Slide 11, we have a look at the debt profile, trend and the key financial ratios. As mentioned, the net financial debt closed at around $960,000,000 with liquidity and short debt accounting for around $219,000,000 respectively, and medium to long term debt accounting for around $960,000,000. In October and December, we announced three new sustainability linked credit facilities for a total amount of million. These credit lines, linked to specific targets of our sustainability plan, allow us to further optimize our financial structure, diversifying our sources of funding and extending the average debt maturity.

Following the IFRS 16 application, lease liability amounted to around €515,000,000 leading the sum of the net financial debt and lease liabilities to around €1,480,000,000 Equity ended up at around €1,150,000,000 dollars Looking at financial ratios, net debt over EBITDA ended at 1.63x, slightly increasing versus 1.5x at December after the strong investments in CapEx, M and A, dividends and share back. The debt over equity ended at 4.84x. I will now hand over to Henrique.

Enrico Vita, CEO, Amplifon: Thank you, Gabriela. Now let’s discuss our further significant step up in our sustainability journey. First, in 2024, we strongly accelerated our environmental responsibility. We reduced our GHG emissions, in particular, as Scope three, increased the share of renewable energy from 74% to 80% and launched a new reusable packaging for all the Amplifon branded products, primarily made of recycled materials. Second, we continued delivering on the social front.

First of all, helping more and more people to rediscover the emotions of sound by offering free hearing tests and delivering around €200,000,000 in savings to customers. We also provided almost six hundred thousand hours of training to our employees and maintained a 47% women representation in managerial roles. We were recognized as top employer for the fifth consecutive year. In addition, this year, we rolled out the Ecovadis platform, enabling us to conduct ESG assessments on both direct and indirect suppliers and signed three new ESG linked credit lines for over EUR 300,000,000. Finally, the score we obtained in the CDP questionnaire as well as the recognition for the fourth year in a row as a standard and fourth year book member are sentiments of our increasing transparency and focus on environmental and sustainability topics.

Hence, we look forward with real excitement for our journey toward an even more sustainable company. Let’s now move to the following chart, the chart of the outlook, which is the last chart of today’s presentation and where you can find our key comments regarding 2025. Firstly, after a softer 2024, we are positive about the European market coming back to solid growth. First of all, because of the anticipated growth of the French market, but also because it has been growing well below its historical levels for three years in a row now. Then we also expect The U.

S. Market to continue to grow healthily, despite a pretty challenging comparison base. Hence, we see a more balanced global market growing next year by around 4%. Considering these market developments, we aim to achieve a mid to high single digit growth at constant exchange rates, which means growth between five percent and nine percent at constant exchange rates, driven by organic growth above the market and our M and A bolt ons at circa 2%. We expect revenue growth to accelerate particularly after Q1, driven by the anticipated recovery of the French market from Q2 onwards and because of the exceptionally strong Q1 last year, which also had circa one point five days more working days than Q1 this year.

Finally, we aim to grow our profitability beyond the 24%, driven by a more supportive market environment. And in particular, we see improved operating leverage in the EMEA region, which will contribute positively to our overall performance. With this, we thank you for your attention and we look forward to taking your questions. Francesca, over to you.

Francesca Rambaudi, Investor Relations and Sustainability Senior Director, Amplifon: Thank you. I will kindly ask the operator to open up for Q and A session. I ask kindly to limit your questions to maximum two initially in order to give everybody the opportunity to ask questions. Now I turn the call over to Judith in order to open up for Q and A.

Conference Operator, Chorusco: Thank you. This is the Coruscant Conference Operator. We will now begin the question and answer session. The first question is from Hassan Alwakil, Barclays. Please go ahead.

Hassan Alwakil, Analyst, Barclays: Hi, good afternoon. Thank you for taking my questions. I have two, please. So firstly, on growth, given your mid single to high single digit guide and at least 2% coming from M and A, How should we think about the composition of mid single digit organic growth across geographies? And what about the risk that M and A growth is actually higher than 2% given 3.6% contribution from M and A in 2024?

And secondly, on margins, can you talk a bit about the key drivers of the 40 basis point margin expansion target for 2025? Given the softer European performance and what that did to the margin in 2024, how are you thinking about the risk that this doesn’t come through in 2025? And I guess what other than this is giving you the confidence in margin expansion for 2025? Thank you.

Enrico Vita, CEO, Amplifon: Sure. Thank you. Thank you for your questions. So with regards about the first question and about how we built our guidance. So we are guiding in terms of revenue growth at constant exchange rates mid- to high single digit, which means between 59%.

Then if you just take the middle of this range, we are in the region of about 7%. And basically, we have built this kind of range in consideration of our estimation for the market growth at global level in the region of 4%. And as you know, we always aim to grow faster than the market. I would say something in the region of 1%. And then we have also added a couple of points in order to reflect our normal contribution coming from M and A.

What I mean is that we have said many times double of our, let me say, recent historical levels. So for the time being, of course, M and A is something that you can’t predict in detail, but I mean, we are planning at the moment to come back to our historical level of investments for bolt on M and As in the region of $100,000,000 and therefore, we have estimated the consequently the contribution coming from M and A in the region of 2%. With regards to the growth by the expected growth by region, of course, I can’t really give you details for each region, but what I can tell you is that we see a more balanced growth than in 2024, simply because we see a better European market in 2025 than in 2024, While in The U. S, we needed to take into consideration the fact that The U. S.

Market in the last two years has grown extremely fast. As far as I remember, in 2023, the U. S. Market grew double digit around 10%, last year grew something above 6%, so that we cannot say that The U. S.

Market will continue to grow so fast forever. So we estimate a growth of The U. S. Market in the mid single digit mid digit single mid digit range. So we see a more balanced growth in terms of market and therefore in terms of our performance across the three different regions.

Then with regards to the second part of your questions and therefore margins, well, the main contributor to the margin improvement of next year, we think will be the EMEA region. Also in consideration of the fact that we see a better operating leverage coming from the fact that we estimate a more favorable market in 2020 in 2025.

Hassan Alwakil, Analyst, Barclays: That’s very helpful. And Rico, if I could just follow-up, how are Q how is Q1 trending in line with that guidance, please?

Enrico Vita, CEO, Amplifon: No, we refrained recently actually to give you indication about the trend of the current quarter. And this is also particularly true for Q1, because Q1 is by far the smallest quarter of the year and also January is by far the smallest month of the year. So the result of Q1 will be basically related to the result, let me say, let me simplify to the result of March, which has just started. The March, I think, accounts for something like 40% of the total quarter. So I prefer not to give you this kind of indication.

However, while we are not providing this, I mean, indication in terms of revenue growth for January and February, what I can tell you is that, as I said also during the presentation, the French market is anticipated to gain momentum from Q2 onwards. And this is, as you know, the key driver for the European market to return to solid growth. I would like also as we put also in our chart that Q1 twenty twenty four, as you may remember, was by far the best quarter of last year, both in terms of offline with a growth of circa 9% last year, but also in terms of profitability, we posted a record increase of EBITDA margin by more than 100 basis points. And also we needed to take into consideration that Q1 this year, unfortunately, has on average something in the region of 1.5 trading day less than Q1 twenty twenty four. Say that, as I said, I think that, I mean, we are positive about the European market to going back to solid growth, in particular, I mean, starting from Q2 onwards.

Nicholas Dorel, Analyst, Kepler: Perfect. Thank you.

Conference Operator, Chorusco: The next question is from Nicholas Dorel, Kepler. Please go ahead.

Nicholas Dorel, Analyst, Kepler: Good afternoon. Thanks for taking my two questions. The first one, again, on your guidance, I was trying to figure out which assumptions on France are, let’s say, included in your mid- to a single digit organic growth. Should we stick to your previous views of double digit growth for France, so 10%, fifteen % or 20%? Or maybe you have moderated a bit your stance?

And maybe related to that, if you can tell us, if you have these numbers in mind, how much of the extra sales from 2021, so from the start of the reform where sales were basically people didn’t have to pay for the irrigates and how much were on the other end, sales were people had to top up, let’s say? My second question is on distribution of SLO Luxottica Nuance Audio. The product now has been launched in The U. S. In Italy and apparently, some of your competitors are already distributing it.

So the fact that we haven’t heard anything from you means that you are out of this game or that decisions still have to be taken? Thank you.

Enrico Vita, CEO, Amplifon: So with regards to France, no, our view about the growth of the French market has not changed. We said that we were expecting a growth this year of the French market in the region of 4% sorry, in the region of 10%. This was the global in the region of 10% and we are still there. What I mean is that we do not see any reason why we should change our view about the growth of the French market. Then, of course, as we always say that behind this kind of estimation, there are a number of different assumptions and there is a lot of modeling than to say if it will be nine or 11.

It is very difficult to say at this stage. We needed to see, I think, in the next couple of quarters if our assumptions are correct

Gabriele Galli, CFO, Amplifon: or not.

Enrico Vita, CEO, Amplifon: With regards to the split between zero payout, top up, etcetera, we can’t give you this kind of information. With regard to the second part of the question and the four no answer audio, we are working with Epsilon Luxottica on a pilot in The U. S. As you know, we are always open to evaluating any opportunity that could benefit our patients. So we are working on this with them at the moment.

I can’t really comment about competitors, etcetera, etcetera.

Nicholas Dorel, Analyst, Kepler: Thank you.

Conference Operator, Chorusco: The next question is from Ancao Verma, JPMorgan. Please go ahead.

Ancao Verma, Analyst, JPMorgan: Hi, good afternoon. Thank you for taking my questions. I have two, please. Firstly, when trying to extrapolate the bridge from EBITDA to EPS, could you please help provide some guidance on below the EBITDA level figures specifically for D and A interest and tax? Any color would be helpful.

And then the second one is just a follow-up on France. What have you seen through January and February in terms of lead generations and renewal volumes that give you market growth, especially as your peers have been a bit more conservative on that front? Thanks.

Enrico Vita, CEO, Amplifon: No, I will start with the second question and then I will leave the word to Gabriela for the first one. No, actually, for the time being, as I said also earlier on, we are not changing our view on the French market. Actually, we believe that the growth of the French market will represent an important driver for the growth of the entire EMEA market. And therefore, we see we confirm our view of the of a growth of the French market for next year in the region of about this year actually in the region of about 10%. As I said, at the moment, we do not see anything that should tell us that our view should be changed.

So this kind of assumption is still valid at the moment. Of course, we will see the ramp up of the growth starting from April, May, June. So after, let’s say, the second quarter, I think that we will have more elements to confirm, to improve or to review our estimation for the growth of the French market. Saying that, I would leave the first question to Gabriele.

Gabriele Galli, CFO, Amplifon: Yes. So, Jessica, you want to comment on the $24,000,000 or expectation on $25,000,000?

Yang Mi Guen, Analyst, Citi: For $25,000,000

Ancao Verma, Analyst, JPMorgan: please. Any color.

Gabriele Galli, CFO, Amplifon: Very clear. So starting from D and A, in 2024, we reached $3.00 $2,000,000 Moving forward, I mean, we expect some increase less than proportional to the increase in terms of sales, but some increase because I mean we are going on investing, opening stores and making M and A. So for next year, in the higher level compared to this year, but less than the growth of the revenue. So some lower contribution in percentage terms. Moving to financial expenses.

This year, we reached $60,000,000 Next year, there would be several effects. So on the one side, we will need to renegotiate some of these borrowing lines with the current interest rate. On the other side, on the short term debt, we can also benefit of some reduction compared to what we paid back in 2024. There will be also some increasing component due to the expansion of our network of shops in application of IFRS 16. All in all, we expect a slight increase, so a few million compared to the 16,000,000 this year.

Trade, we are very much stable around twenty six percent, decreasing five, ten, 20 basis points per year. So I do not expect any major change, maybe some slight improvement.

Ancao Verma, Analyst, JPMorgan: Perfect. Thanks. And I just have one quick follow-up on France. Where are you on the investments needed for building out the capacity? Is that all done now?

Or can we expect incremental more investments through 2025 in terms of audiology capacity?

Enrico Vita, CEO, Amplifon: No, no, we are already done. What I mean is that if I had to look to the development of the French market of last year, we had to make our capacity more efficient. We didn’t do that in preparation of 2025. It’s a decision that we have taken quite consciously. So for now, we are absolutely fine.

We are ready and we are confident that this will allow us to exploit in the best way possible what will be the growth of the French market this year and also in part the next year.

Conference Operator, Chorusco: The next question is from Hugo Solve, BNP Paribas. Please go ahead.

Hugo Solve, Analyst, BNP Paribas: Hi. Hello. Thanks for taking my questions. I have two, please. First, on the guidance, the margin guidance for Fortibib’s margin expansion, which will primarily come from EMEA.

Just a quick clarification, would you expect most, if not all of the margin expansion to come from France? Or would you also expect margin expansion in other European countries? That would be the first question. And second, in terms of the phasing of the renewals in France, would you expect the bulk of it to be done in twelve months, so from Q2 twenty twenty five to Q2 twenty twenty six? Or would you expect them to be spread over a longer period of time and possibly support 2026 onwards?

Thank you.

Enrico Vita, CEO, Amplifon: Thank you for your question. Now with regards to margin expansion, for sure, we expect a contribution from France. But also, we are aiming to have a better profitability in many other markets actually, also because I mean, we had several markets, which have performed in recent years below their historical levels. So we expect actually to to gain some operating leverage also in other markets like Spain, Germany, etcetera, etcetera. So it will not come only from France.

With regard to the renewals, of course, there will be a curve. It will not just be a step in terms of growth of the French market. So we think that there will be a positive effect on the growth of the market starting from Q2 this year and we continue also in the first part of next year. To tell you in which quarter exactly will this, let’s say, end in 2026, honestly, it’s very difficult and I can’t really say a precise date, but definitely there will be some carryover effect also in 2026.

Francesca Rambaudi, Investor Relations and Sustainability Senior Director, Amplifon: Next, operator, please.

Conference Operator, Chorusco: The next question is from Yang Mi Guen of Citi. Please go ahead.

Yang Mi Guen, Analyst, Citi: Hey, guys. Thanks for taking my questions. I also have two, please. The first one is back to the point on M and A. I understand you in your answer earlier, you said that the contribution will be balanced.

But I just wanted to understand when you think of Americas in particular after having done quite a lot of acquisitions in 2024, do you expect M and A in America to stay within the group guidance range of 200 basis points? And out of your franchising network, how far along are you in terms of acquiring them into your direct retail network? So that’s my question number one. And then on question number two, I just want to understand when it comes to the flat in Spain in November with more than 50 shops compromised, have they all reopened normally now that we are in at the beginning of Q1? Thank you.

Hassan Alwakil, Analyst, Barclays: Thank you.

Enrico Vita, CEO, Amplifon: Thank you for your questions. So starting from this second question, I must say that Q4 last year for Spain was pretty negative and not only because of the direct impact on the 50 stores, which were affected by directly by the storm. But as you may recall, I mean, there were also alerts in that period in Barcelona area, etcetera, etcetera. Q4 marked in general terms, and I think mainly because of this reason actually in Spain last year was pretty negative. And this is, of course, something that we were not expecting at all.

Now for sure, I mean, we were able actually to restore the operations in our store network in Spain pretty soon. But I would like to underline that it was not just a matter of 50 stores, but we saw a significant slowdown in the market demand in Spain during all November. With regards instead our outlook for what regards M and A, we estimate 2% at group level, for

Gabriele Galli, CFO, Amplifon: sure,

Enrico Vita, CEO, Amplifon: which means basically to come back to our historical level of M and A bolt on. At the moment, we are not planning the same kind of acceleration that we had in 2024. Of course, M and A also is something that we must evaluate always in an opportunistic way, which means that, of course, if any interesting opportunity will arise, we will be there. But the plan is to go back to our average of activity in terms of bolt on M and A. With regards to The U.

S, for sure The U. S. Will continue to be our priority also in terms of M and A. But I must also say that the 2024 was a particularly strong and active year also for The U. S.

Itself.

Yang Mi Guen, Analyst, Citi: Thank you. If I could just quickly follow-up on the point in Spain, Are you expecting there to be any sort of pent up demand as a result of the flat in November?

Enrico Vita, CEO, Amplifon: Very, very difficult to say this. Usually, I mean, the demand is never does not does never disappear. But now to say if it will come back or not and when, it’s almost impossible, I would say.

Yang Mi Guen, Analyst, Citi: Understood. Thank you.

Enrico Vita, CEO, Amplifon: Thank you.

Conference Operator, Chorusco: The next question is from Domenico Ghillotti, Equita. Please go ahead.

Domenico Ghillotti, Analyst, Equita: Good afternoon. My first question is on any kind of evidence for traction on appointments or traffic in the store, well, in France, but also in the markets where you launched also the the advertising campaign in Q4, so the extra investments that you did in Spain and Italy in particular. The second question is a follow-up on the M and A. I’m trying to understand how is the pipeline today compared to one year ago? I would have expected maybe the market could have been a more supportive for M and A transaction in general.

And so I wonder if the 2% is just, let’s say, an assumption in the business plan, but we’ll be interested in your pipeline.

Enrico Vita, CEO, Amplifon: Thank you. Thank you, Domenica. So with regards to the first question, so actually, I would say that this first part of the year, so January, February, we have not seen yet

Gabriele Galli, CFO, Amplifon: the

Enrico Vita, CEO, Amplifon: kind of, I mean, growth related and I wanted to be very specific on that, the kind of growth related to the renewal coming from 2021 related to direct deal reform, yes. But this actually could have not been possible because as you may recall, actually, we started to see in 2021 the first also given the length of the funnel, etcetera, etcetera, the first uptake in 2021 starting from March 2021. So for sure, I mean, we were not expecting to see anything related to that specific element in January, February this year. As I said, I think that we will have more precise elements during Q2 and I would say after Q2. With regards to our advertising campaigns in Spain and Italy, we are, I must say, very happy.

It has been received very, very well from consumers. I must say that we track also all our brand KPIs and the campaign has a very strong impact on our brand’s KPIs. So we are very confident that this will definitely deliver and pay dividends going forward. With regards to M and A, you are right. I mean, actually, we should see a more supportive environment.

At the moment, as I say, our assumption is to go back to the historical level. But again, in this case, I mean, M and A is more on an opportunistic activity. So if there will be interesting targets, definitely we will be there as always. Okay.

Domenico Ghillotti, Analyst, Equita: Thank you. Can you just remind me how much was the investment, the extra investment in marketing that you are flagging in Q4 in EMEA broadly speaking?

Enrico Vita, CEO, Amplifon: Let me say that in general, in Q4, our marketing investments were you may recall that in the past, we were we said that our marketing investments were growing more or less in line with revenues, slightly below revenues. Instead in Q4 actually, what I can tell you is that our market investments grew a bit faster than our revenues because of the launch of the campaign.

Domenico Ghillotti, Analyst, Equita: At global level at group level? Yes. Okay. Thanks.

Conference Operator, Chorusco: The next question is from excuse me?

Francesca Rambaudi, Investor Relations and Sustainability Senior Director, Amplifon: No, yes. If we can move to the next question. Okay.

Conference Operator, Chorusco: The next question is from Neos Leff, Carnegie. Please go ahead.

Francesca Rambaudi, Investor Relations and Sustainability Senior Director, Amplifon0: Thank you for taking my question. First question is about your Amplifon Hearing and Healthcare business, your Managed Care business in The U. S. That you called out as a growth driver for quarter four. Could you talk about your expectations for this business going into the next year or couple of years, if this remains a business that would grow beyond the overall market?

And then secondly, you mentioned that you will pilot the Essilor Loxotic products in The U. S. So would you expect those products to be complementary or supplementary to your conventional hearing aid sales? Thank you.

Enrico Vita, CEO, Amplifon: Thank you. Thank you for the questions. So with regards to the first one, Managed Care and Amplifonia Healing Health Care. So over the last years, you know that the Managed Care segment as a market grew at a faster rate compared to the private market, basically for two reasons. One is that there has been an increase in penetration of eating the benefits within the Medicare Advantage formularies, which is now above 85, 90 percent.

So we do not expect this effect going forward anymore. And also, Medicare Advantage enrollment increased over the last years from, I think, $20,000,000 in 2018 to $30,000,000 plus in 2024. So also in this case, we do not expect significant growth going forward. So while we remain positive on this market segment, which is strategical, of course, for us, we do not expect this segment growing as fast as in the past years. Probably will grow slower at a slower rate than in the past for the comments that we just discussed.

With regards to the second question, absolutely, I mean, we see eventually as the opportunity to sell the Escalora Lauxotica products in our stores as an opportunity to complement our offering. So, something which could complement our core business at the moment.

Francesca Rambaudi, Investor Relations and Sustainability Senior Director, Amplifon0: And would you expect your retail price to mirror the price on the Internet, so $1,100 12 hundred dollars

Enrico Vita, CEO, Amplifon: Too early to say. As I said, I mean, we are working on a pilot in The U. S, which will happen if everything goes well in Q2.

Francesca Rambaudi, Investor Relations and Sustainability Senior Director, Amplifon0: Thank you.

Conference Operator, Chorusco: The next question is from Javier Lodero, L. B. Please go ahead.

Francesca Rambaudi, Investor Relations and Sustainability Senior Director, Amplifon1: Yes, hi. Just two questions, if I may. Maybe can you walk us a little bit about the potential impact of The U. S. Tariffs and especially going more into detail how much of your U.

S. Revenues you are actually producing in The States? And then the second one, on the European revenue base, I’m hearing a lot of France, which I believe is realistic. I hear a lot about Spain and Sedona. That’s as well realistic.

But besides this, are there any other triggers which will push actually the European revenues?

Enrico Vita, CEO, Amplifon: Yes. So thank you for the questions. With regards to U. S. Tariffs, let me of course, I think that no one can predict at the moment anything on this regard.

But what I can tell you is that in The U. S, we already leverage on a diversified sourcing, adding supply agreements with all five global manufacturers in The U. S. Also, I would add that these five manufacturers have also a pretty diversified supply chain and also have been implemented implementing flexible global supply chain strategy to diversify their production and mitigate the risk. So we are not particularly worried about tariffs for The U.

S. With regards to the second question, I don’t recall the second question, was about

Francesca Rambaudi, Investor Relations and Sustainability Senior Director, Amplifon: other European tariffs.

Gabriele Galli, CFO, Amplifon: It was about the Sprint.

Enrico Vita, CEO, Amplifon: All right. Yes. No, well, sorry. I mean, of course, we expect the main growth coming from France. But also, as I said also during the presentation, we expect also other markets actually to perform better in consideration of the faster that now it has been three years in a row after the significant growth of the European market in 20 market has been slow.

So we expect some pent up demand coming back this year. So we expect definitely France to perform much better, but also we see more positive also other markets.

Francesca Rambaudi, Investor Relations and Sustainability Senior Director, Amplifon: May we go to the last question, Judith?

Conference Operator, Chorusco: The next question is from Giorgio Tavalini in Termonta. Please go ahead.

Francesca Rambaudi, Investor Relations and Sustainability Senior Director, Amplifon2: Hi, good evening. Thanks for taking my three questions, please. We have been navigating a very volatile market environment in the last couple of days in The U. S. And Europe.

So given this, I was wondering if you expect a further decline in consumer confidence in the near region due to the higher public spending, extra deficit in particular in Germany. And I was wondering if you can confirm whether Germany still contribute around 10% of the group top line. Similarly, regarding the French market, do you see a risk that the French government’s increased military spending could lead to some reduction or constraints in public subsidy for hearing devices replacements that were foreseen by the Macron reform in 2021? And the third one is we should expect a Capital Market Day to provide a mid term outlook later this year in the second part, I do not. Thank you.

Enrico Vita, CEO, Amplifon: Thank you. Thank you for the questions. So with regards to the last question on Capital Market Day, of course, we are definitely very willing actually to share with you our plans for the future. I must say that we would like to do that when we see a more, let me say, less volatile environment, but definitely something that we wanted to do as soon as possible. With regards to the second question, which was about France and for the spending for our sector from the government, I can’t really make any comment on that.

I don’t have the answer. With regards to Germany, your estimation in terms of weight of the German market in terms of sales is pretty correct, I would say. And that’s it.

Francesca Rambaudi, Investor Relations and Sustainability Senior Director, Amplifon2: Thank you very much.

Enrico Vita, CEO, Amplifon: Thank you.

Francesca Rambaudi, Investor Relations and Sustainability Senior Director, Amplifon: We have a very last one with Julien. So I would keep it only to Julien as we are out of the timing.

Conference Operator, Chorusco: The last question is from Julien O’Hodour, Bank of America. Please go ahead.

Francesca Rambaudi, Investor Relations and Sustainability Senior Director, Amplifon3: Hi, thank you very much. And I have just one quick just for the like midterm guidance. I mean, now you’re talking about mid to high single digits growth for the top line. You used to talk about high single digit. How should we see beyond 2025?

I mean, do you aim to return at the high single digit only or mid to high is probably the looks like the norm for the future? Thank you.

Enrico Vita, CEO, Amplifon: No, thank you for this question because I think this is a very important question actually. So we are guiding mid to high single digits, which means between 59%, especially for the following reasons. First one is because of the lower M and A contribution. I mean, if you compare if you take actually the mid of the range, which is 7%, and if you compare actually it with what we did in 2024, we grew 7%, but with higher contribution for M and A. So 7% is incorporating a contribution from M and A this year, which is lower than that and taking the middle of the range, of course.

So circa 2% in 2025 versus 3.6% in 2024. And we are also expecting actually The U. S. Market to continue to grow healthily, but it’s difficult to think that The U. S.

Market will continue to grow so like in 2023 and which grew when it grew by 10%. Also this year was very positive. So we see a more balanced growth across regions. In The U. S, we estimate a growth in the region of mid single digits.

And then if you want, in our guidance, the upper limit of the guidance is the same, while is the lower limit of the guidance is a bit lower because it’s between 59%. In a way, I think that it’s also reflecting the macro and the geopolitical environment in which we are living in, which makes us also a bit more prudent because we know very well that the volatility and things actually change every single day. And therefore, we wanted to be a bit more prudent taking in order to take into consideration the volatility of the environment in which we are living in.

Francesca Rambaudi, Investor Relations and Sustainability Senior Director, Amplifon3: Thank you very much. Very clear. Thanks.

Enrico Vita, CEO, Amplifon: Thank you.

Francesca Rambaudi, Investor Relations and Sustainability Senior Director, Amplifon: Thank you. So thanks everybody for the call. I leave it to Judith in order to close the call. Thanks.

Conference Operator, Chorusco: Ladies and gentlemen, thank you for joining. The conference is now over and you may disconnect your telephones.

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