LeadingHearingHealthcare

AnnualReport2015
1March2016
 Agenda

Grouphighlights
HearingDevices
HearingImplants
DiagnosticInstruments
Otherbusinessareas
Groupfinancials
Outlook2016
Q&A

2
Grouphighlights2015
Solidgrowthinbothrevenueandearnings

6% DrivenbythesuccessfullaunchofOticonsIniumSenseplatform,theGrouprealisedsolid
performanceinthehearingaidwholesalebusinessthatgenerated8%organicgrowthinH2
(FY6%)vs.anestimatedmarketvaluegrowthrateof13%

ReportedFYoperatingprofit(EBIT)ofDKK1,878,increasedby7%reachingourfullyear
7% outlookofDKK1.82.0billion drivenbythestrongperformanceinHearingDevices
(wholesaleandretail),whichmorethancompensatedfor:
ContinuedinvestmentsinourHearingImplantbusiness
ChallengingmarketconditionsinRussiaandBelarusimpactingourDiagnosticsbusiness
NegativeexchangeratemovementsinBrazilianrealandotherunhedgedcurrencies

12%
Stronggrowthinearningspershare(EPS),withanincreaseof12%onlastyear
resultinganEPSofDKK26.6

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 TheWilliamDemantGroup
Revenuebybusinessactivity

Changeinlocal
DKKmillion FY2015 FY2014 Change currencies
HearingDevices 9,213 8,033 15% 8%
DiagnosticInstruments 1,072 975 10% 0%
HearingImplants 380 338 12% 7%
Total 10,665 9,346 14% 7%

Revenuegrowthof7%inlocalcurrencies
4%organicrevenuegrowth
3%growthfromacquisitions
DiagnosticInstrumentsgrewby4%inlocal
currencies,ifweexcludeRussia/Belarus

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 TheWilliamDemantGroup
Revenuebygeographicregion
Changeinlocal
DKKmillion FY2015 FY2014 Change currencies
Europe 4,136 3,683 12% 10%
NorthAmerica 4,472 3,746 19% 5%
Oceania 859 839 2% 3%
Asia 815 693 18% 15%
Othercountries 383 385 1% 4%
Total 10,665 9,346 14% 7%

TheacquisitionofAudikaaccountsfor
approx.halfofthe10%increaseinEurope
SatisfactorygrowthinNorthAmericaof5%
inlocalcurrenciesofwhichthemajorityis
organicgrowthinthewholesaleandretail
hearingaidbusiness
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HearingDevices
Hearinginstrumentmarket2015
Globalunitmarketgrowthof5%

Weestimatethattheglobalunitgrowthratewasapprox.
5%in2015.Intermsofvalue,theoverallmarketgrowth
ratewas,inourestimation,13%
Market 7%unitgrowthintheUS exceedingourexpectations.8%unit
growthintheprivatemarketandalmost5%unitgrowthin
valuegrowth VeteransAffairs(VA)

LowsingledigitunitgrowthrateinEurope impactedbystrong
comparativefiguresfor2014inGermany.Abovenormalunit
growthratesinseveralEuropeanmarkets,suchasFranceandItaly

Theaveragesellingpricedeclinedbyafewpercentagepointsin
2015duetoproductandchannelmixshiftsandgenerallyintense
competition,partlyoffsetbyapositivecountrymixdrivenby
stronggrowthintheUS

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 HearingDevices wholesale
2015businesshighlights

8%organicgrowthinH2(FY6%)inourcore Organicrevenuegrowthinwholesaleof
business,wholesaleofhearingaids,vs.a hearingaids
marketvaluegrowthrateof13% 8%
TheGroupcontinueditsmarketsharegains 6%
4% 3%
GrowthwasdrivenbyOticonssuccessfulInium
1% 2%
Senseplatform
Fullyearunitgrowthrateof6%in2015anda H1 H2 Fullyear
stableaveragesellingprice 2015 2014
BesidesEuropeandNorthAmerica,the
GroupsawsignificantgrowthinAsia

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 HearingDevices wholesaleinEurope
StrongunitgrowthinEurope

SatisfactoryrevenuegrowthinEurope
GrowthinGermanywasslowduetothetough
comparativefiguresfor2014
In2015,weincreasedoursalestoand
marketsharewiththeNHSintheUK
TheGroupthereforeremainsthelargestsupplier
ofhearingaidstotheNHS
Unfavourablemixduetogrowthinsalesto
largechainsandtheNHS

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 HearingDevices wholesaleinNorthAmerica
Satisfactorymarketsharegainswithindependentretailers,thelargestchannelinNorthAmerica

Strongorganicgrowthintheindependent
segmentintheUSdrivenbyOticonsultra
fastIniumSenseplatform
Bernafon:stableperformanceinCostco
OurmarketsharewithVeteransAffairs(VA)
intheUSremainedunchangedataround
8%
HighgrowthinCanadawithmarketshare
gains

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 HearingDevices Retail
Increasingmomentumthroughouttheyear

Afteraslowstarttotheyear,ourretailbusinessgraduallypicked
upmomentumin2015andthusrealisedasatisfactoryincrease
inrevenuedrivenbyacombinationoforganicgrowthand
acquisitions
Theorganicgrowthratewasinlinewiththemarketgrowthrate
inthemarketswhereweoperate
Acquisitivegrowthcanmainlybeattributedtotherecent
acquisitionofAudika
TheentireAudikatransactionhadanequityvalueofDKK1,254million
AudikaimpactedtheGroupsconsolidatedrevenuein2015by
DKK220million
Transactioncostsandothernonrecurringcostsrelatingtothe
takeoverhavebeenexpensed,andtheimpactofthetransactionon
theGroupsoperatingprofit(EBIT)in2015wasthereforelimited

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 HearingDevices
Oticontakesaquantumleapininnovationin2016

AttheendofQ22016,Oticonwillreacha
landmarkwiththeintroductionofthefirstever
dualradiohearingaidcombining:
Theaudiologicaladvantagesofournewnearfield
magneticinductionsystemforfastandultralowpower
eartoearcommunication
A2.4GHzsystemforstreamerfreeconnectivityand
programming
Thecompletelynewplatformdeliversnew
groundbreakingtechnologyandunmatched
enduserbenefits
Thegloballaunchwillimpactsalesinthesecond
halfoftheyear

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HearingImplants
 HearingImplants 2015highlights
OticonMedicalreachesanothermilestonewiththeprelaunchofanewCIsystem

Thebusinessactivitygenerateda12%reported
growthrate,or7%inlocalcurrencies,ofwhichthe
mainpartcouldbeattributedtoorganicgrowth
Ourgrowthratewasclosetothemarketgrowthratein2015
NewproductintroductionsinbothCIandBAHSin
2015

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 Cochlearimplants(CI)
Encouraginglongtermmarketgrowthdrivers

GroupCIsalesgrewinlinewiththeunderlyingmarket:
TheGroupsawhighunitgrowthandmarketsharegainsinmarketswithlow
ASP,whereasunitsalesinmoredevelopedmarketsweremodestasclinicsin
thesemarketswereawaitingthenewNeuroCIsystem
TheGroupsawasignificantslowdowninRussiaandAlgeriaduetopolitical
andeconomicinstability
Goingforward,theCIindustryisexpectedtodeliveradoubledigit
unitgrowthratedueto:
LowpenetrationintoanincreasingpoolofelderlypeopleneedingaCI
Productinnovationandimprovedreimbursementschemesinsomemarkets
Increasinggeneralawareness,wealth,improveddocumentationofbenefits
andnewindications,suchassinglesideddeafness
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 Cochlearimplants(CI)
WellpositionedforthefuturewiththesuccessfulcontrolledprelaunchoftheNeurosystem

SuccessfulprelaunchofNeuroin2015infourcountries:
Verypositivefeedbackfrombothclinicsandpatients
ApprovalsinEuropeanmarketsbeingobtainedfirst;withinafew
years,wewilltargetkeymarkets,suchastheUSandChina
Atthispoint,wearecommerciallyactivein10European
countrieswithnewcentresstartingupeverymonth
Thecommercialuncertaintyassociatedwiththelaunch
oftheNeuroCIsystemishigherthannormal,butwe
believethatwearewellpositionedforthefuture

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 Boneanchoredhearingsystems(BAHS)
Productofferingsignificantlystrengthenedin2015and2016

In2015,thetotalBAHSmarket(thepercutaneousand
transcutaneoussegments)sawatemporaryslowdownin
growth:
Highsingledigitgrowthratevs.theusual1015%growthrate
Goingforward,weexpectanannualunitgrowthrateof
1015%,asnewattractivesolutionsarelaunched
Satisfactorygrowthin2015andsignificantmarketshare
gainsinthepercutaneoussegment
Threeexcitingproductlaunchesattheendof2015and
thebeginningof2016
Veryexcitingmarketfeedbackonnewminimalinvasive
surgicaltechnique(MIPS)

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DiagnosticInstruments
DiagnosticInstruments
StrongmarketpositionandstrongproductportfoliopositiontheGroupforgrowthin2016

Theglobalmarketforhearingdiagnosticequipment
sloweddownin2015withonly02%growthdueto:
LowtenderactivitylevelinespeciallyRussiaandBelarus
Conversely,wehaveseenencouragingmarketgrowthinAsia
10%reportedgrowth(0%inlocalcurrencies)
Mainlyduetothemarketslowdown,butalsoduetothedelayed
launchofthenewimpedanceproductfromGrasonStadler
OutsideRussiaandBelarus,DiagnosticInstruments
delivereda4%growthrateinlocalcurrencies

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Otherbusinessareas
SennheiserCommunications
Satisfactory16%organicgrowthrate,clearlyexceedingthemarketgrowthrate
GrowthdrivenbyUnifiedCommunication
DKKmillion FY2015 FY2014 (UC),CC&Owasthemaingrowth
Revenue 668 576
contributor:
Grossprofit 289 279 GamingandMobileonlysawmodestgrowth
Grossprofitmargin 43.3% 48.4% Significantinvestmentsmadein2015,
Capacity costs 163 125 includinghiringstaffinseveralkeyareas,
Operating profit(EBIT) 126 154
willcontinueinto2016;thismaydilute
profitontheshortterm
EBITmargin 18.9% 26.7%
Tax onprofitfortheyear 30 37
Profitfortheyear 96 117

WilliamDemant Holdingshareofprofit,
50% 48 59

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Groupfinancials
Groupfinancialhighlights2015
Solidgrowthinbothrevenueandearnings

14%
Reportedrevenuegrowthof14%or7%inlocalcurrenciesofwhich
organicgrowthaccountedfor4percentagepoints

6% 8%organicgrowthinH2(FY6%) inthewholesaleofhearingaidsdrivenbythe
successfullaunchofOticonsIniumSenseplatform

7%
Reportedoperatingprofit(EBIT)increasedby7%.Theunderlyingprofitincreasedby8%,with
the underlyingEBITmarginincreasingfrom18.9%in2014to19.4%in2015

85% Cashflowfromoperatingactivities(CFFO)increasedby6%toDKK1,592million,
correspondingtoacashconversionratio(CFFO/EBIT)of85%

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Groupunderlyingdevelopment
Significantlossesinforwardexchangecontractsin2015

Transaction
Reported Translation Oneoffs Adjusted
&hedging

DKKmillion 2015 2014 Change 2015 2014 2015 2014 2015 2014 20152 20141 Change
Revenue 10,665 9,346 14.1% 761 158 11 220 10,603 10,096 5.0%

EBIT 1,878 1,761 6.6% 217 192 17 12 55 2,058 1,906 8.0%

EBITmargin 17.6% 18.8% 19.4% 18.9%

Note: 1) 2014:RevenueandEBITadjustedtoreflectFXappliedin2015andtoeliminatetheimpactofhedgingandothertransactional
effects.Furthermore,EBITisadjustedtoneutraliseearnoutgainsofDKK95millionrecognisedin2014andalossona
customerloanofDKK40millionrecognisedin2014.
2) 2015:RevenueandEBITadjustedtoeliminatetheimpactofhedgingandothertransactionaleffects.Furthermore,EBITis
adjustedtoneutralisethefairvalueadjustmentofnoncontrollinginterestsaswellasadjustmentsofestimatedearnoutsof
DKK12millionrecognisedin2015.Also,therevenueeffectoftheacquisitionofAudikawithDKK220millioniseliminated,
withaneutralEBITeffect.
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Incomestatement2015
EBITinlinewithoutlookrangefor2015

Changeinlocal
DKKmillion 2015 2014 Change currencies
Revenue 10,665 9,346 14% 7%
Gross profit 7,895 6,813 16%
Grossprofitmargin 74.0% 72.9%
Researchanddevelopmentcosts 763 680 12% 9%
Distributioncosts 4,689 3,877 21% 12%
Administrativeexpenses 613 560 9% 4%
Shareofprofit,associatesandjointventures 48 65
Reportedoperatingprofit(EBIT) 1,878 1,761 7%
Reportedprofitmargin(EBITmargin) 17.6% 18.8%
Profitfortheperiod 1,439 1,327 8%
Earningspershare(EPS),DKK 26.6 23.8 12%

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Cashflow2015
Continuedstrongcashconversionratioof85%

DKKmillion H22015 H22014 FY2015 FY2014

Operatingprofit(EBIT) 998 927 1,878 1,761
CFFO 837 789 1,592 1,495
CFFI,excludingacquisitions 251 195 463 451
Freecashflow(FCF) 586 594 1,129 1,044
Acquisitionofenterprises,interestsandactivities 1,493 128 1,633 231
Buyback ofshares 289 507 605 887
Other financingactivities 659 628 1,654 253
Netcashflowfortheperiod 537 669 545 327

Cashconversionratio* 84% 85% 85% 85%

*Cashconversion:CFFO/EBIT.

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Balancesheet
Growthinbalancesheetdrivenbyacquisitions

Assets Equityandliabilities
DKKmillion 2015 2014 DKKmillion 2015 2014
Intangibleassets 5,977 4,003 Equity 6,500 5,584
Property, plantandequipment 1,768 1,557 Noncurrentliabilities 2,761 453
Othernoncurrentassets 1,837 1,610 Currentliabilities 5,129 5,182
Noncurrentassets 9,582 7,170 Totalequityandliabilities 14,390 11,219
Inventories 1,324 1,203
Receivablesetc. 2,810 2,403
Thebalancesheetincreaseof28%comparedto
Cash 674 443 yearend2014canmainlybeattributedto
Currentassets 4,808 4,049 acquisitions
Totalassets 14,390 11,219 OurnetinterestbearingdebtrosebyDKK1,298
millionamountingtoDKK3,703millionasof31
December2015

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Outlook
 Outlook2016
Weexpecttoseeamarketunitgrowthrateof45%inthehearing aidmarket,whichwillhoweverbepartly
offsetbyadeclineinthemarketsaveragesellingpriceduetocontinuedmixchangesandfiercecompetition.
Intermsofvalue,weexpecttoseeaslightlypositivemarkettrendin2016.

WeexpecttogenerategrowthinsalesinalltheGroupsthreebusinessactivities:HearingDevices,Hearing
ImplantsandDiagnosticInstruments.

Basedonexchangeratesinearly2016andincludingtheimpactofexchangeratehedging,weexpectthe
exchangerateimpactonrevenuetobeneutralin2016.Acquisitionsmadein2015willimpactconsolidated
revenuebyapproximately6%in2016.
In2016,weplantocontinuetobuybacksharesandcompletetheannouncedbuybackofsharesinthe
amountofDKK2.53.0billionfortheperiodfrom2014to2016.From2014to1March2016,theCompany
hasboughtbacksharesatatotalpriceofDKK1.64billion.

Allinall,weareguidingforanoperatingprofit(EBIT)ofDKK2.02.3billion

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 Savethedates

AudiologyNOW!2016:Presentation WilliamDemantCapitalMarketDay
forinvestors,analystsandjournalists 2016
Thursday,14April2016,3:00p.m.(MST) TuesdayandWednesday78June2016
Room102B Kongebakken9
PhoenixConventionCenter 2765Smrum,Denmark
100N3rdSt,Phoenix,Arizona85004,USA Detailstofollow

30
Q&A
Timeforquestions

Financialcalendar2016

Q&A



AnnualGeneralMeeting(7 April)
InterimInformation,firstquarter(10May)
CapitalMarketDay2016(78June)
InterimReport,firsthalf(17August)
InterimInformation,thirdquarter(10November)

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IRcontacts
Investorsandanalystsarewelcometocontact

SrenB.Andersson RasmusSrensen
VicePresident,InvestorRelations InvestorRelationsOfficer
Tel.:+4539138967 Tel.:+4539137733
Mob.:+4551176657 Mob.:+4521776840

...byphone+4539177300orbyemailtowilliam@demant.com.
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