AMP.MIAMP.MIMIL
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Operator: Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Amplifon Fourth Quarter and Full Year 2025 Results Conference Call. [Operator Instructions]. 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: Thank you. Good afternoon, and welcome to Amplifon's conference call on fourth quarter and full year 2025 results. Before we start, a few logistic comments. Earlier, 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 as on our press release. I have to bring your attention to the disclaimer on Slide 2, 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 Amplifon's CEO, Enrico Vita.
Enrico Vita: Thank you, Francesca. Good afternoon, everyone, and thank you for joining us. Let me begin with a few remarks on the year that just ended, which was without a doubt characterized by market growth below the historical trend. However, we are convinced that this was primarily driven by the well-known geopolitical and macroeconomic factors, which weighed on consumer confidence. As you know, we are also convinced that this does not reflect any structural change in our sector. In the United States, market growth was significantly below the levels we have experienced in recent past. This was mainly due to a significant decrease in the managed care channel, primarily following the reduction of hearing benefits offered by major insurance providers. Europe also developed more slowly than we had initially anticipated with the only exception of France in terms of volume. In Q4, the global demand was likewise below historical levels. We estimate it to have been only slightly positive 1%, 2%, largely reflecting, in particular, the softer U.S. environment, that said we do not see demand fading away. Quite the opposite, we believe a degree of pent-up demand is being built, which should gradually materialize over time, although the exact timing is not easy to predict, depending on external factors. That's also why we expect a better environment in 2026, but I will return to this point at the end of the presentation. In Q4, we continued to outperform the market in most of our individual key countries, including, for example, Italy, the United States, Australia, France and some others. In the quarter, our sales increased by 1.4% at constant exchange rates while foreign exchange was a significant headwind of more than 3%. On the positive note, I would like to highlight that we returned to positive organic growth across all the three regions. And that's the profitability trend also improved compared to the first 9 months. As you know, to structurally and meaningfully enhance our profitability. At the beginning of the year, we proactively and decisively launched the Fit4Growth plan decided to best position the group for 2026 and beyond. So let's go to the next chart for a more detailed update on this. Fit4Growth is progressing very well and is currently tracking a high above our initial plan, at the high end of our target range of 150 to 200 basis points of adjusted EBITDA margin improvement by 2027. I can also anticipate to you that we expect to see tangible results of our work already in this first part of 2026. In 2025, we closed or consolidated approximately 160 nonperforming clinics across 10 countries, while implementing the related head count efficiencies. These actions are meaningfully improving the overall efficiency and quality of our sales network. As of today, we have also identified additional efficiency and optimization opportunities for 2026, as you can see in the chart. Additionally, we have implemented a series of back office optimization initiatives, leading to an overall efficiency of approximately 100 headcounts during the 2025 with further opportunities now identified for 2026. Moreover, we delivered a significant EUR 30 million reduction in CapEx in 2025 compared to 2024 driven by rigorous prioritization of high-return projects while fully preserving strategic investments. Additionally, we are targeting a further reduction in 2026 reflecting the completion of some important transformative IT programs over the last years. Finally, we conducted a comprehensive strategic review of the attractiveness of all our business segments and related Amplifon competitive positioning. As part of this portfolio review on March 2, we completed the divestiture of our loss-making business in the U.S.. -- in the U.K. In addition, a managed care contract in the United States was terminated due to the anticipated structural margin compression in the context of decreasing volumes. Gabriele will provide further details on both profitability drivers in the next session. Finally, during the first quarter of 2025, as you know, we significantly rationalized our nonstrategic wholesale operations in China. As already shared, these actions are aiming at sharpening our focus on core business segments and reallocating capital towards the group's highest potential profit accretive growth opportunities. Considering the progress achieved and the additional opportunities identified, the Fit4Growth plan now targets an adjusted EBITDA margin run rate improvement at the upper end of the previously communicated 150, 200 basis points range by 2027. Importantly, the expected nonrecurring cash cost to implement the plan are now expected at approximately EUR 25 million in total compared to the EUR 35 million initially anticipated. This cost will be incurred between '25 and '26, of which circa EUR 9 million had already been recognized in 2025. With that, I will now hand over to Gabriele, who will walk you through our performance in more detail.
Gabriele Galli: Thanks, Enrico, and good afternoon to everybody. Turning to Chart #6, we can appreciate more in detail, the two latest development within the portfolio optimization stream of Fit4Growth. Firstly, on March 2, following a comprehensive review of our business segments, we completed the sales of our U.K. business, which included a network of approximately 100 direct clinics across England and Wales, and the workforce of around 260 employees. It generated a revenue of EUR 33 million in 2025, and as you know, was very dilutive to the group's financials. Consequently, the divestment is expected to positively contribute to Amplifon Group's EBITDA margin, while it is expected to generate one-off cost with no cash impact of around EUR 18 million in the first quarter of 2026. Related to the accounting effects of the re-class to the income statement of cumulative negative amount of exchange differences, previously recognized in the equity. Secondly, since January, an agreement with an insurance company in the U.S. Managed Care business was terminated as we received a progressively significant request for price reduction that were not compatible with sustainable profitability over time. The recurring discount dynamics being requested would have led to a structural margin compression in a context of decreasing volumes in mature segment with limited growth prospects. This contract had a marginal impact on the group's total revenues in the region of 1% and no one-off are expected to the termination of this agreement. Of course, we continue to operate in the insurance segment now with a more diversified and selective portfolio characterized by different profitability profiles. Moving to Slide 6. We have a look at the group profitability in full year 2025. Revenues grew 1.7% at constant FX with flat organic growth, reflecting a significant improvement in the second half of the year. Despite the strong comparison base of 7% growth at constant FX in '24 versus '23 and the global market demand still below historical level. In particular, the U.S. private market was flat in 2025, primarily due to the negative performance of the insurance segment, while the European market reflected the low consumer confidence. M&A contribution was 1.7%, reflecting the acquisition of 250 locations and the closure of around 160 clinics together with the substantial rationalization of the non-core wholesale business in China within the Fit4Growth program. FX was a significant headwind of minus 2.3% due to depreciation of the Euro versus the Australia, U.S. and New Zealand Dollars, bringing the growth of current effects to minus 0.6%. Adjusted EBITDA came in at EUR 540 million, with margin of 22.6%, 90 basis points below the previous year due to the lower operating leverage the dilution effect of the growth of Miracle Ear Direct Network in the U.S., the less favorable country mix in EMEA and the higher marketing investment to further strengthen our distinctive assets. Moving to Slide 7, we have a look at our financial performance in Q4 '25. Revenues were up 1.4% at constant FX versus Q4 '24, with organic growth at 0.6% and back to positive territories in all the three regions, although still reflecting the global market demand below historical growth levels. M&A implemented change contribution was plus 0.8% due to the acquisitions as well as the implementation of the Fit4Growth product. FX was a material headwind of minus 3.3%, increasing throughout the year. Adjusted EBITDA was EUR 145 million, with margin at 22.3%,90 basis point below prior year due to the lower operating leverage, the growth of Miracle-Ear's Direct Retail and the higher marketing expenses. Moving to Slide 8. We have a look at the performance. In the quarter, revenue grew at constant FX by 1.6%, with organic performance at plus 0.4% improving sequentially. In this context, we posted a strong and above market growth in France and the solid organic growth in Spain, while Germany was in negative territory. M&A and perimeter change was plus 1.2%, reflecting M&A mainly in France, Germany and Poland, and selected closures in France, Germany and Spain. Adjusted EBITDA was EUR 107.5 million, in line with the Q4 2024 with margin at 24.6%, 40 basis points below Q4 '24 due to lower operating leverage. In the full year, revenue growth was plus 1.5% with organic performance at minus 0.6% and the M&A contribution at plus 2%. Adjusted EBITDA was circa EUR 430 million, with margin at 26.6%, 70 basis points below last year. Moving to Slide #9, we have a look at the performance in Americas. Revenue growth in the quarter was plus 2% at constant FX, while FX headwind was a significant minus 9.9%. Organic growth was positive for plus 0.9%, thanks to the strong performance of Miracle-Ear Direct Retail, despite the very high comparison base with double-digit organic growth in U.S. in Q4 '24 and a slightly negative private market in the U.S. due to the underperformance of the insurance segment. M&A and perimeter change was positive for 1.1% reflecting the acquisition in the U.S. and some selected closures in the U.S., Canada and Mexico. Adjusted EBITDA was EUR 33.8 million, with margin at 26% versus 26.8% last year due to the growth of Miracle-Ear's Direct Network in the U.S. and the lower operating leverage. In the full year, revenues were up 4% at constant FX, driven by a solid and above market organic growth despite the remarkable '24 comparison base. Adjusted EBITDA was EUR 116.4 million, with margin at 23.5%, 150 basis points below prior year for the reasons I just mentioned. Moving to Slide 10. We have a look at the Asia PAC performance. In the quarter, revenue performance was minus 0.3% at constant FX, reflecting plus 0.8% organic growth, improving 270 basis points over Q3 despite the soft underlying market due to lower consumer confidence. In this context, we posted a solid and above market performance in Australia, which more than offset the negative performance in New Zealand and China. M&A and perimeter change was minus 1.1%, reflecting the carryover from the implementation of the Fit4Growth program. FX headwind was a significant minus 8.4% driven by the depreciation of all the regional currencies versus the Euro. Adjusted EBITDA reached EUR 20.9 million, with margin at 24.4% versus 25.4% last year, due to a lower operating leverage and higher marketing investments. In full year '25, both organic performance and perimeter change were flattish, while FX was a headwind 6.4%. Adjusted EBITDA was EUR 85.9 million with margin at 24.9%, 130 basis points below '24 due to lower operating leverage. Moving to Slide 11. We appreciated the full year income statement. In '25, total revenue came to EUR 2.4 billion, an increase of 1.7% at constant effect versus prior year. Adjusted EBITDA was EUR 540 million with a margin of 22.6%, 90 basis points below '24 for the just mentioned reasons. D&A, excluding PPA, were at EUR 259 million versus EUR 252 million last year, increasing around EUR 7 million in light of the investment in network, digital transformation and innovation, thus a less pronounced growth versus the growth recorded in the previous year. This led the adjusted EBIT to EUR 281 million versus EUR 314 million last year. Net financial expenses amounted to EUR 63.7 million versus EUR 59.2 million, in '24, primarily due to the interest on higher net financial debt and interest on lease liabilities following the strong M&A and network expansion. Tax rate posted a 70 bps increase versus '24 leading adjusted net profit at around EUR 159 million versus EUR 188 in '24. Moving to next chart, Chart 12, we see the profit and loss evolution of Q4. Total revenue came at EUR 652 million, an increase of 1.4% at constant FX versus prior year. Adjusted EBITDA was EUR 145.5 million, with margin at 22.3%. D&A, excluding PPA, decreased by around EUR 6 million, leaving the adjusted EBIT to EUR 82 million with margin of 12.6%. Net financial expenses were unchanged year-on-year at EUR 15.5 million, leaving profit before tax at around EUR 67 million, tax rate ended at 25.6%, leading adjusted net profit to EUR 49.5 million versus EUR 53.8 million last year. Moving to Slide 13. We appreciate the cash flow evolution. Adjusted operating cash flow after lease liability was in the period equal to EUR 428 million, EUR 28 million below the EUR 456 million achieved last year. Net CapEx decreased by around EUR 10 million to circa EUR 117 million leading adjusted free cash flow to EUR 174 million. Net cash out for M&A was EUR 62 million versus the exceptional level of EUR 193 million in '24. The cash out for share buyback program was EUR 180 million -- EUR 108 million. NFP ended slightly above EUR 1 billion after strong investment for over EUR 350 million in CapEx, M&A, dividend and buyback. Moving to Chart 14. We have a look at debt profile trend and the key financial measures, as mentioned, the net financial debt ended slightly above EUR 1 billion, with liquidity accounting for EUR 310 million, shorter debt accounting for around EUR 365 million and medium long-term debt accounting for around EUR 990 million. Following the IFRS 16 application, lease liability were around EUR 486 million, leading the sum of net financial debt and lease liability to EUR 1.53 billion. Equity ended up at around EUR 1 billion, mainly due to high FX translation differences at around EUR 80 million, dividends and share buybacks. Looking at financial ratios. Net debt over EBITDA ended at 1.92x versus 2.09x in September and 1.63x in December last year after the strong investments in CapEx, M&A, share buybacks and dividends. Net equity over debt ended at 1.05x. I will now hand over to Francesca for some comments on our sustainability path during 2025.
Francesca Rambaudi: Thanks, Gabriele. Let's now discuss our further significant step-up in our sustainability agenda. First, in March 2025, we published our first sustainability reporting in full compliance to the new CSR requirements and ESR standards. In the next weeks, we will publish the 2025 consolidated sustainability reporting. In 2025, we reached important milestones in our climate strategy. We obtained SBTi validation of our climate targets. We reduced our total emissions by 14% and increased the share of energy from renewable sources to 83%. During the year, we also focused on our most important asset, our people. In 2025, we delivered around 600,000 hours of training, confirming our constant attention to skill development and professional growth. This commitment, together with other important initiatives enabled us to obtain the global Top Employer 2026 Certification, an excellent recognition awarded only to a small number of organizations worldwide. Finally, we continue to conduct ESG assessment on our direct and indirect suppliers, and continued to successfully integrate our sustainability targets within our financial strategy. Only in 2025, we subscribed 5 new ESG-linked credit facilities for a total amount of EUR 400 million. We look at, therefore, forward to our journey toward an even more sustainable company. With this, I leave the floor to Enrico for the outlook.
Enrico Vita: Thank you, Francesca. And so we have now reached the final slide of today's presentation. While the market growth in 2025 was below historical averages and our initial expectations we executed several meaningful initiatives to accelerate the future revenue growth and to structurally enhance profitability. Looking ahead to 2026, starting with the market outlook. In Europe, after 3 consecutive years of growth below historical levels, we expect a gradual normalization. In the United States, we anticipate the recovery supported by an easier comparison base and a more positive private market environment. As a result, we foresee a gradual improvement in the global market demand now expected in the region of plus 3%. In this context, we aim to outperform in each of our individual key markets with organic growth showing solid progressive improvement compared to 2025, driven by better market conditions, the initiatives implemented over the past year and the benefit of our marketing investments. On profitability, we aim to deliver a material improvement supported not only by a more favorable market environment, but also by the continued execution of our Fit4Growth program, whose results are expected to be strong and already visible in the first part of this year. With that, we thank you for your attention, and we are now happy to take your questions.
Operator: [Operator Instructions] The first question is from Andjela Bozinovic, BNP Paribas.
Andjela Bozinovic: My question is on the guidance. Can you maybe help us understand the guidance a bit better? So on revenue growth, you expect the market to grow at 3%? And what level of outperformance should we assume? And given the divestitures you have announced, can you confirm that the base that we should base our assumptions on is lower? My math points to around 3% lower base, but any feedback here would be great. And also on the margin guidance, you're calling out for the high end of 150 to 200 basis points improvement from Fit4Growth. Can you update us on the phasing between 2026 and 2027 of this? And if you can share any indication of the quarters in 2026? And should we assume any operational leverage on top of it for the margin improvement in 2026?
Enrico Vita: Okay. So let's start with the outlook on revenue. I think that we have provided you with all the different key drivers for our 2026 outlook. In particular, as I said, we expect a gradual improvement in the global market and which is an improvement that we see both in the EMEA region, but also in the U.S. As said also, we aim to overperform in each individual market as we did also in 2025. What I mean is that we are pretty confident that in all our key individual markets like in Q4, like in Italy or in France or in the U.S., we have outperformed the market. And therefore, we have not lost share. On the contrary, we believe that in this -- in the majority of the key markets in which we operate, we have gained share. Of course, we are not guiding today on the revenue per se. But we are saying that the goal for us is to overperform in each individual market. And of course, the overall result will depend also from the different growth rates that we will see in these markets. Then on the top line, of course, you should expect the effect of the divestiture of the U.K. You should expect also the effect of the termination of the contract in the U.S. We should -- you should expect also some carryover of the Fit4Growth initiatives that we have, I think, shared on the chart. But you should also add on top of the solid organic growth that we envisage, you should also add a positive contribution coming from M&A. In particular, as you know, in 2025, we have slowed down our M&A investments. This is mainly because we wanted to focus all our markets, all our organization on the execution of Fit4Growth, which is going very well. And I'm very happy about how our organization have implemented the different streams. So we are now looking at basically complete the vast majority of our activities in terms of Fit4Growth in the market in the first half of 2026, so that we want to restart with M&A, let's say, starting from the second quarter of this year onwards. So basically, plus and minus should be more or less offsetting each other in terms of, let's say, M&A or perimeter change. And then you should expect the growth coming mainly from the organic growth, which, as I said, is expected to be definitely improving versus last year and to improve solidly versus 2025. With regards to the profitability for now, we are not guiding on a specific target for 2026. We are guiding on our Fit4Growth program, which, as I said, is progressing extremely well, very happy. You should see the benefit of all the 4 streams that we have highlighted in our chart. So the network efficiency enhancement, the back office efficiency, the cost containment program as well as the strategic review of all our business segments. So that we expect already a strong contribution coming from Fit4Growth already in 2026 and in the first part, I would say, of 2026.
Francesca Rambaudi: Thank you. Operator, can we move to the next call as we have a long queue. So again, in the fairness to everybody, please keep to two questions maximum.
Operator: The next question is from Niccolò Storer, Kepler Cheuvreux.
Niccolò Guido Storer: So my 2 questions. The first one is on possibility of exiting other countries. Do you think that after the U.K., you are done? Or should we expect something else? And also possible to see further disengagement from managed care in the U.S. or you are done with this contract termination? Second question is on profitability. And maybe if you can help us understanding profitability evolution net of Fit4Growth contribution. And so maybe upon which growth level should we expect margin expansion in 2026. And linked to that, I saw a lot of nonrecurring costs on 2025 adjusted EBITDA, if you can comment a bit on those.
Enrico Vita: Yes, absolutely. So with regards to the first question, so basically, no decision -- no other strategic decision or step has been formalized or taken, I would say. And -- but of course, we want to build a much stronger profitability profile. We want to invest where we have, let's say, the best opportunities to win, which means where we have strong brands, where we have strong networks, et cetera, et cetera. With regards to managed care, now we have a much more, I would say, diversified client base, which makes us much more comfortable also looking forward. With regards to the profitability, I would say that you should expect -- now you should expect a significant contribution from -- as I said before, from Fit4Growth already in 2026 and also in 2027. Of course, the profitability increase will be also a function of the organic growth and therefore, of the operating leverage going forward. With regards to the last part of the question and therefore, the EBITDA adjusted, I would leave to Gabriele that can give you more color.
Gabriele Galli: Yes, absolutely. So it's related to some different topics. Fit4Growth, as you can imagine, is by far the most important. I mean, as Enrico was mentioning, we are ahead of the plan. And so I mean, we started with the cost related to the closure of the shops and the optimization of the back office. The second important item during 2025, we wanted to have an homogenization and the standardization of the way we take the inventory reserve across the different country. So I mean, it was the first year in which we have a common policy across all the 25 countries where we operate. And this basically led us to an adjustment in terms of inventory reserve. We also had a couple of topics to be addressed coming from the past, one in the U.S. and one in Australia. Apart from these 4 buckets, I mean, normally, we put here the cost related to the integration of some M&A. So during 2025, but also during 2024, as you can see from the comparative, basically, there are the costs related to M&A, especially. These are, I would say, the 4 -- the 5 buckets. It's, of course, something that we do not expect is going to happen by cash point of view in the coming year.
Operator: The next question is from Julien Ouaddour, Bank of America.
Julien Ouaddour: Good evening, everyone. So I got to stick to two. The first one is -- I mean, I just want to try to understand the organic growth there. So it seems that the global hearing edge market was growing I mean, roughly around 2% plus in 4Q. You reported 0.6% organic growth in the quarter. I mean, you said that you gained share in key markets. Does it mean that you're losing shares in other markets on a same-store basis? I just want to reconcile basically your performance and the market growth. And how can you basically be back to grow, again, at least in line with the 2% market growth in '26? That's the first question. The second one is on Amplifon Hearing Healthcare within your U.S. business. Could you remind us how big it is? And then, I mean, following the termination of one contract that you announced, could you just consider maybe exiting more, as I imagine, I mean price pressure is just happening everywhere or maybe even if it's in completely Managed Care? I mean is it something that you consider now?
Enrico Vita: Well, I'll start with the second question, which is definitely no. What I mean is that we are not planning at all actually to exit to Managed Care. Actually, we have now a much more solid business, I think, because it is -- it is built across many different clients and perhaps to have one big client, of course, would have led to a situation where the kind of price pressure that we received was not any more compatible with our targets in terms of profitability. So today, we are definitely much more, let's say, comfortable with the kind of margin profile that we have got across many different smaller clients where we can definitely have a much better profitability profile. So we are not planning to reduce further. We are not planning at all to exit Amplifon Hearing Healthcare. Actually, we have a renewed effort to grow there, but perhaps in smaller accounts with a different margin profile, focusing on the quality of the service and therefore, with, let's say, more positive prospect of profitable growth. Then with regards to our organic growth in Q4. Yes, I mentioned that the global market actually to be slightly positive. But we have to -- and I mentioned also that we are pretty confident according to the info that we get, which, of course, have some degree of let's say, variability because they are selling data, et cetera, et cetera. But we are pretty confident that we have gained share in basically all the major markets in which we operate. I take you, for example, one market, which was Australia, Australia in Q4 was pretty negative and mid single-digit negative, we were positive. So the difference between our organic growth and the growth that we reported is mainly due to the market mix. For example, in Q4, the U.K. market was positive, which, unfortunately for us, was a very small market, but also in terms of channels, as far as I understand, NHS was very positive, we do not operate in the NHS. So there is a mix effect, which we expect in a way to improve in terms of mix in 2026. Also in consideration that some effects like, for example, we mentioned in particular in Q2 the anniversary of the COVID in a couple of very important markets for us like Italy or Spain in 2026, we should not have this kind of negative effects. And therefore, we see these markets performing better than in 2025. So the difference is mainly related to market mix. But as I say, if I look at France, we are very confident -- according to the data that we get, we are very confident to have gained share. If I look at Australia, I said we are also in the U.S., actually, the market was slightly negative, and we were slightly positive. So even in Spain, we have posted a solid growth. So we are I think gaining share in the different individual markets, the mix of the market was not very favorable to us, but we expect this trend to change already in 2026.
Operator: The next question is from Domenico Ghilotti, Equita.
Domenico Ghilotti: Two questions on my side. First, I'm trying to understand that the European performance because I was expecting more sizable contribution from France. So is it fair to assume that Europe was down if you exclude France? And on the expected recovery, I'm trying to understand if you see signs of market recovery on the funnel, for example, or on the engagement with clients? So what is driving your confidence given also that consumer confidence is very -- is still very depressed if I look around.
Enrico Vita: Yes. So with regards to France, in Q4, according to the data that we get, the market was up double digits. However, this is volume growth wise in value terms, you should reduce this number at least by 2 or 3 percentage points. Then with regards to why we are envisaging a better market in 2026. I think that there are some elements that weighed on 2025, which are going to disappear. It is true what you said, but I think that in Italy, in Spain, in Portugal, the anniversary of the COVID had a significant impact intently in Q2, but also a small impact also in Q4. You may recall much smaller impact also in Q4. You may recall also the lowdown in Q4, et cetera, et cetera. And this kind of factors, of course, are not going to be there anymore. Actually, we should see the pickup the anniversary of the pickup that we have experienced in these markets in 2021. So I expect this market to perform better also on top of an easier comparison base. In the U.S., we take another very big market. The main driver for the poor performance of the U.S. market, which ended at the end of the year with basically zero growth was the insurance channel, which, as I said, was basically related to some big insurance carrying back some benefits plans and probably on the commercial side also, there was some cost caution from employers that may have played a role. I think that now this kind of negative performance of the insurance channel should soften. What I mean we expect a better insurance market in 2026. So I think that in 2026, we had some key factors, which affected some of our key markets and which are not should not be there anymore in 2026.
Operator: The next question is from Veronika Dubajova with Citi.
Veronika Dubajova: My questions I just want to circle back to sort of your comments around outperformance in each of the markets. And obviously, and we quite appreciate there we get volume data, you're looking at value. We don't have country level information. We only have regional information. But just looking at your growth in the Americas, if I strip out Argentina change, you're underperforming the market. If I look at Europe, it seems like you're underperforming the market. Can you maybe talk a little about...
Enrico Vita: I didn't guess at this point about what you mention Argentina...
Veronika Dubajova: If I look at the Americas, and I remove Argentina, it looks like the U.S. is down in a flat market for you. If I look at Europe, obviously, you seem to be putting up much lower growth rates than the manufacturers are in Europe. So I'm just trying to understand where this confidence of outperforming the market is coming from? And I guess if you can give us a little bit of reassurance that, that is indeed happening. Because looking at your performance, and it's not just this quarter, unfortunately, right? It's now been a trend for a couple of quarters where, certainly from the data that we see from the outside, it does look like you are not growing in line with the market. And have you done some more just sort of absolutely verify that you are growing in line or ahead of the market? Or is there something that needs to change in terms of lead generation, et cetera, that you need to address? I know it's a very long question, but...
Enrico Vita: It's very clear. And I think that it's a very important question. But I would answer with a definite, no. What I mean is that we are absolutely convinced that overall, we are performing at least in line with the market, if not better. What I mean is that if you take, for example, as I said, Australia, according to the official data Australia in Q4 was very negative between 5%, 6% or even more than that. We had a positive organic growth. If you take France, as I mentioned, the market growth in France was double digits, but we performed in terms of units better than the market, thanks to all the work that we did last year, et cetera, et cetera. If then you take also the U.S. In the U.S., we were slightly positive in the context of a market which was, again, according to HIA data slightly negative. And this is a data for Q4, as I say, it is related to sell-in, but also in the full year and the U.S. market growth was basically 0, as I said, mainly driven by the insurance segment. So no, I'm very confident that we have at least held our share. I mentioned in the past that we were not performing in line with the market in Spain. But now we see the results of all, we start to see the results of all our work -- on the work that we have done and the new management team has done in part in Q4, we posted the solid growth. So we are pretty confident that definitely we are not losing share. Of course, as I said many times, there is a mix difference if you compare our performance with the manufacturers, both in terms of markets, as I said, for example, the U.K., for us, it's very -- was a very small market or in terms of channels, which, as far as I understand, and performing very well, like the NHS or like -- or performed very well like [ VA ].
Veronika Dubajova: Enrico, can I just ask, you didn't mention Italy, which is obviously your single biggest market in Europe. How are you performing in Italy versus the market?
Enrico Vita: The market, I'm absolutely sure that we performed in -- at least in line with the market, if not better. But as I say, the market in Italy, especially in Q2, if you look at the full year, was very negative for the anniversary of COVID in 2020, but also in Q4 was not really very positive. So we are expecting a much better market in Italy in 2026 for the anniversary of the pickup in the month -- in the month that we had in 2021. So overall, we expect a more favorable mix of market in 2026. I'm absolutely convinced that specifically to Italy, we have not lost the share.
Operator: The next question is from Oliver Metzger, ODDO BHF.
Oliver Metzger: The first one is general specific one. So your expectations of 3% for '26 are still below the historic growth level. The base in '25 is super low historically, we saw potentially the weakest market here in decades. So -- but normally, there was always a return to the mean. Now expectations have lowered. So what has changed in your view of the hearing aid market? That's question number one. And question number two, you talked a lot about '25 and the regional performances. And you gave a quick hint on U.S. for '26, but can you also give a more profound view about the different regions? How -- which performance do you see for them? And what are the drivers?
Enrico Vita: Thank you for the question. So with regards to the first question, the 3% market. I see -- I see that some of our suppliers have even a more positive view on the total market. I think that 3% is a fair assumption for 2026. So also in consideration that we can't say that the current macroeconomic and geopolitical environment has no effect at all on our sector and on our patients. As I said, we expect a better market in 2026 because in 2025, we had some material effect on some key markets for us. I mentioned the U.S. I mentioned the decline of the insurance channel in the U.S. I mentioned Italy, I mentioned Australia, et cetera, et cetera. So we expect a better market also on the basis that in 2025, we had some specific events and that also from a comparison base point of view, we should be in a better place in 2026. With regards to the growth in 2026 by region from an organic viewpoint, we expect to improve our organic growth, I would say, across the different three regions with no specific -- no specific region going much faster than the others.
Operator: The next question is from Martin [indiscernible] Jefferies.
Unknown Analyst: I hope that you can hear me okay. I would ask two questions, please. The first one is on the guidance itself. It's quite unusual that you guide in such a qualitative manner. So I would like to understand just the rationale behind that? And still on that, should we understand that the level of visibility you have on the expected market recovery is low given you have not quantified what we should expect for you to post into 2026. And I would probably leave some time to answer that question before asking the second one.
Enrico Vita: No. Well, in terms of outlook, I think that we have given you many different indications. Of course, it's early days. What I mean is that just 2 months of year have ended, and you know very well that also March is a very important month. So we wanted to see also how we will end Q1 to give you maybe a better granularity at the end of the Q1. I think that this is a pretty fair and in consideration of the fact that you know very well that I mean the market in these days are not extremely predictable. But we assume that we can give you more granularity at the Q1 results when at least we have the visibility on the Q1 actual and also April sales. So we prefer to give you this kind of more visibility at that time. But anyway, I think that we have given you also very precise indications in terms of what you should expect in terms of market growth, what you should expect in terms of M&A or perimeter change. So I think we have also saying that we expect to improve materially our profitability already in 2026. So I think that we have given a lot of different indications that could be useful for your models.
Unknown Analyst: Okay. And on the second question, is about just getting some insights on your regional growth expectations that are baked into the guidance, and also, I would like some insights on the phasing as well. And if you could do a bit of a focus on EMEA and talking a bit more about how do you think about France and Italy specifically for 2026 knowing that, as you said, Italy was apparently very negative. The market was very negative in 2025 and knowing as well the fact that in 2026 and more specifically on Q2 2026, we should see the annualization of the strong growth that we've had in France?
Enrico Vita: You are -- you are right. What I mean is that definitely, in Italy, we expect a much better market in 2025 because we will not have the effects that weighed on 2025 due to the anniversary of COVID. Actually, we should have more returning customers coming from the increase of -- that we experienced in 2021, basically starting from the Q2 I would say, first months of 2026. With regards to France, I think that you should expect the continuation or anyway, a good performance of the French market due to the anniversary of the reform in the first 3, 4 months of the year. Then, of course, we will be anniversarying the increase that we had in the market in 2025.
Operator: The next question is from David Adlington, JPMorgan.
David Adlington: First off, I want to make sure we're all on the right page in terms of the base that we're working off in terms of both the sales and the EBITDA. So the total impact of the U.K. disposal, Managed Care and [indiscernible] disposals both on the top line and also EBITDA, please?
Enrico Vita: Yes. Well, so in terms of top line, as I said, you should expect more or less basically net impact of the divestiture of the U.K. the Managed Care, et cetera, et cetera, to be offset to be almost offset entirely from our M&A. As I said, we are planning to restart, I would say, in our M&A efforts, bolt-on M&A efforts are basically starting from Q2 as I said, in the second half, in particular of last year, we have slowed down significantly our bolt-on acquisitions because we wanted to focus our organizations on the Fit4Growth program. But we are ready to restart as soon as we have completed this program. We thought that it would not make any sense actually to continue to acquire shops in a moment in which we were rationalizing our network. With regards to profitability, as I said, we are not now giving you a specific number, but definitely, we expect a material improvement in 2026. So we already started to see the benefits of Fit4Growth which should give the full benefit in 2027, but with a material impact already in 2026.
Operator: Next question is from Susannah Ludwig, Bernstein.
Susannah Ludwig: I have a question in regards to the Fit4Growth program savings. Do you expect the full savings to drop down to margins? I know you also mentioned it will be a function of organic growth. I guess, said otherwise, what level of organic growth do you need to sort of sustain margins at current levels and avoid sort of de-leveraging impacts?
Enrico Vita: No. Well, thanks to Fit4Growth, we are envisaging to grow our margin even if -- I mean, with 0 organic growth. What I mean is that this is a program that Thank God, we have initiated almost 1 year ago and is going to -- is going to have a positive impact already this year. So what I say is that if on top of Fit4Growth, if we see a good operating leverage in coming from organic growth. Of course, we can also have a better profitability beyond Fit4Growth.
Susannah Ludwig: I guess, just to be clear, even if -- even if you have flat organic growth, you still can sort of have 150 to 200 basis points of margin expansion due to the Fit4Growth improvements?
Enrico Vita: Let me say that the 150, 200 basis points is the impact of Fit4Growth -- is the impact Fit4Growth per se.
Francesca Rambaudi: We'll have one more question from Giorgio.
Operator: The next question is from Giorgio Tavolini Intermonte.
Giorgio Tavolini: The first one is on M&A. After exiting the U.K. if you are looking to enter new geographies to reduce the exposure to EMEA, maybe focusing more on strengthening the U.S. direct to retail and so on? The second one is on China contribution in 2025. I saw you are also planning a rationalization of non-core sale in China. So if you can clarify. And the very last one, if I may, is on the Fit4Growth. Should we expect benefit to be mostly embedded in each region profitability or also in terms of lower central costs?
Enrico Vita: Thank you for the question. So in terms of new geographies, no, we have no plan to enter new geographies. Of course, as you rightly pointed out, for sure, U.S. will be our first area of focus in terms of growth and in terms of M&A. So for sure, we are envisaging a situation where we will already start bolt-on M&A in the U.S. in 2026. With regards to China, in reality, the decision to exit the wholesale business we shared already in Q1. So it's something that has been already done basically last year. So that is something that is already on the base of basically almost all 2025. In China, we see the market stabilizing. So we also there see a better environment in 2026. With regards, instead of Fit4Growth, can you please remind me which was the question on Fit4Growth? Yes, of course, of course, absolutely, absolutely. For sure, we are looking at back of it, not only in the market, but also in headquarters. So both in the corporate headquarter, but also in corporate in the quarter of the market.
Francesca Rambaudi: Thank you. So we have taken all the questions. This concludes today's call. Thank you all for your interest and attendance. We kindly ask operator to disconnect.
Enrico Vita: Thank you so much, everyone. Thank you. Bye.
Operator: Ladies and gentlemen, thank you for joining. The conference call is now over, and you may disconnect your telephones.