Good morning, everyone. Thanks for joining us.

Let's get underway. In FY26, as always, our mission is central to what we do.

We enabled over 55,000 people to hear for the first time or to regain their hearing, and more than 50,000 of our over 800,000 recipients received a new speech processor last year, giving them access to better hearing. I'll give an overview of the year and then focus on actions to drive growth in the developed adults market.

In FY26, sales revenue grew 2% in constant currency to $2.3 billion, and underlying net profit was $322 million. These results were below the expectations we set last August, but they were at the upper end of the guidance we revised in April, and revenue in the second half was up 6%.

During the year, we advanced our strategic priorities, including successfully launching the Nucleus Nexa system, which I'll cover in more detail later. When market growth slowed, we acted quickly to optimize our cost base, lowering fixed costs to fund investment in growth programs, and Sarah will talk to this later.

We accelerated work to medicalize hearing loss, and we are working to make adult cochlear implantation the standard of care for people with severe to profound hearing loss by building clearer treatment pathways and expanding medical referral channels. Despite lower sales growth, we increased R&D investment to support our innovation agenda, and we're strengthening our implant portfolio by building on the Nexa platform.

Now I'll spend some time on cochlear implants. I'll talk through last year's performance by region, and then share the insights we gained into market growth and how our growth strategy addresses these insights to drive growth into the future.

The long-term opportunity has not changed. The clinical need is significant, the outcomes from our products very good, and adult penetration remains low.

In FY26, overall cochlear implant systems were up 5%, and revenue was flat in constant currency. This was due to a higher mix of lower-priced sales in emerging markets, especially in China, and we'll talk a bit more to that.

First, to developed markets, where cochlear implant revenue was up 1%. The launch of the Nucleus Nexa system, the world's first and only smart cochlear implant system with upgradable firmware, was very well received.

Adoption has been strong, the Nexa system accounting for more than 95% of our implant sales across developed markets by June. Feedback has been positive, and an average 3% price increase was achieved.

In the US, revenue increased 4%. Market share was maintained across the year, and growth remained strong in DTC and for clinics with established referral networks, but there were clear headwinds that slowed growth overall.

These included a higher rate of insurance delays and broader economic pressures, which made people more hesitant to proceed with surgery. In Western Europe, revenue declined 8%.

Financial and demand pressures on healthcare systems constrained capacity in major countries last year. While these pressures have existed for some time, it's very unusual for them to apply across all major markets at one time.

There's a number of examples I could give, but I'm only going to give a few. This includes the UK, where referrals were up, but surgery rates did not increase due to NHS waiting lists and temporary clinic closures.

Industrial action in Spain significantly lowered access to operating theaters, and we lost some market share in Germany, largely the result of implementing a price increase with Nexa shortly before reimbursement rates were lowered. Asia Pacific grew 7%, a strong performance across the region, particularly in Australia and Korea.

In Australia, where we built out referral pathways, surgeries grew 15% in private hospitals, where we helped candidates navigate around public system waiting lists. We also generated significant referrals to the public system.

Those referrals led to an increase in waiting lists rather than more surgeries, as the public system was capacity constrained. We're working hard, obviously, to reduce those waiting lists.

In Australia, Singapore, Korea, and Japan, we increased market share with the launch of Nexa. In Korea, we also expanded our professional customer base, which added to growth.

Now to emerging markets, where revenue declined 2%. Strong performance in Latin America and Eastern Europe was offset by declines in the Middle East as a result of the conflict that started in March, and also in China from a full year of volume-based pricing.

In China, there was also an unexpected reduction in reimbursement in the special zones in the second half, which reduced our sales in the premium segment. Now I want to move on to looking at detail about adult growth, with a focus on the US to illustrate the sources of growth and how our strategy addresses these.

There are broadly two ways in which candidates get to surgery. There's growth driven by actions we take to lead people to surgery, primarily through our direct-to-consumer activity.

There's an underlying level of market growth driven by aging population and an increasing awareness of the importance of treating severe to profound hearing loss. Over more than a decade, our direct-to-consumer campaigns and concierge services have driven strong double-digit growth, expanding to roughly one-third of surgeries in the US.

These Cochlear-supported surgeries grew 10% in FY26, below our historical average, but still strong growth in a more challenging environment. In what we might call the self-navigator pathway, the referral path is inconsistent, and the majority of people who get surgery find their own way to a cochlear implant clinic.

A small number get a direct referral to a CI clinic. The self-navigator pathway has historically provided mid-to-high single-digit growth, and it actually declined in FY26.

Our experience in the US tells us three things. First, there were genuine referral and capacity headwinds last year that slowed down both pathways.

Second, our DTC programs work, even when market conditions are challenging. Third, the self-navigator pathway was significantly more affected because it's not driven by consistent medical referrals.

Our growth strategy addresses both pathways to surgery. Our DTC programs work, and we continue to grow them.

We have evidence that targeted interventions in the self-navigator pathway can drive growth at a lower cost than DTC alone. The growth in private surgeries in Australia was largely a result of building referrals in this self-navigator pathway.

In the UK, educating referring audiologists through direct engagement has doubled high-quality referrals to cochlear implant clinics over the last four years. Now these referrals haven't yet converted to a proportional surgery growth due to NHS bottlenecks, but the referral increase demonstrates this education works.

In the US, clinics with established referral networks continued their strong growth in FY26, while those without them didn't. To improve referrals in the self-navigator pathway, we now have pilot programs in four US cities, working directly with ENT doctors who don't perform cochlear implant surgery, educating them on clinical practice guidelines and appropriate candidacy criteria.

We know the path forward. We'll keep expanding Cochlear-supported DTC programs, which are effective at driving growth.

At the same time, we're scaling interventions in the self-navigator pathway, building sustainable referral networks. We have evidence these interventions work from Australia, the UK, and the US, and we're now implementing them systematically across major developed markets.

Turning this self-navigator pathway into a professionally supported pathway is a critical outcome of medicalizing hearing loss. Let's go on to look briefly at the process of medicalizing hearing loss.

Our objective is to build a professionally supported referral program. We've seen medicalization fundamentally transform treatment patterns in other conditions.

As an example, obesity shifted from being viewed as a lifestyle issue to a recognized medical condition with clear treatment pathways and therapeutic interventions. Closer to home, pediatric cochlear implants became medicalized nearly 20 years ago.

In the 1990s, parents of children born with hearing loss only had a self-navigator pathway to get access to cochlear implants. Today, they are the standard of care.

Over 80% of children in most developed countries will get one or two cochlear implants by the time they're 12 months old. We're now doing the same for adult hearing loss, following a clear roadmap based on actions that have worked in other therapy areas.

We've made substantial progress over the past decade, building the foundations to do this. Global consensus statements and clinical practice guidelines have been established, and these are being adopted country by country to guide clinicians on appropriate candidacy criteria and referral pathways.

The clinical evidence connecting untreated hearing loss to dementia and falls continues to strengthen. It provides the medical rationale for treatment, rather than treating hearing loss as being considered only quality of life enhancement.

We continue to progress on elements of medicalization that you can see on this slide. We're working with partners to have hearing loss defined as a medical condition, and establishing a vital sign for hearing loss, a simple, standardized measure to help both clinicians and patients understand severity and appropriate treatment pathways.

This creates a common language between primary care physicians, audiologists, and specialists. We're building integrated care pathways that connect audiologists, ENT specialists, and implant programs into seamless referral systems.

These pathways reduce friction in the patient journey and ensure candidates who meet criteria are directed to treatment. We're working with policymakers and payers to ensure appropriate reimbursement as hearing loss becomes recognized as a treatable medical condition rather than an inevitable part of aging.

This medicalization work directly supports the referral pathway development I described earlier. When referring clinicians understand candidacy criteria and benefits, the patient pathway becomes more consistent.

Instead of patients navigating complex decisions alone, they're guided by medical professionals through established protocols, and this creates sustainable, scalable growth. Now let's move on to Nexa.

A major achievement for FY26 was the successful launch of the Nexa system, our next-generation implant platform. Nexa offers benefits today.

Improved power efficiency means that the Nucleus 8 sound processor is even smaller, extending our advantage in cosmetics. A smaller processor is more comfortable.

We're actually seeing an increase in the time per day people wear their processor with Nexa compared to previous implants, and we know this leads to better hearing outcomes. SmartSync provides both recipients and audiologists with a better experience, and SmartNav 3 reduces surgery time and provides more information to surgeons.

There are benefits for all of the stakeholders from the Nexa system upfront. Nexa builds on our long-standing advantage in electrode design.

Our slim modiolar electrodes sit closer to the auditory nerve, with more electrode contact points than competitors' devices. Clinical evidence demonstrates this gives better hearing outcomes faster than other electrode designs.

Nexa has the potential to take this further in two ways. First, it can measure the health of an individual's auditory nerve, and second, it can use that measurement to customize stimulation patterns to each patient.

In clinical studies, recipients using new coding strategies showed significant preference for music quality compared to traditional cochlear implants. This combination of neural health measurement and flexible stimulation has the potential to enable personalized outcomes for every recipient, extending our competitive advantage.

Nexa is the platform for two very important implant developments that will drive growth. Drug-eluting electrodes aim to preserve residual hearing, removing a barrier to surgery.

Totally implantable devices address cosmetic concerns, and more importantly, enable 24-hour hearing, benefits that are clearly resonating with patients based on recruitment rates that we see in our clinical studies. Both of these programs made significant progress over the last year.

Now let's move on to services and then acoustics. Services grew 6% in constant currency, with very strong performance in developed markets, which were up 13%.

This was a result of the retirement of the Nucleus 7 sound processor in the US. Across the world, we improved marketing of the benefits of Nucleus 8 over Nucleus 7, based on direct feedback from customers who had made that transition.

In emerging markets, revenue declined due to disruption in the Middle East and lower pricing in China. Continuing growth in the recipient base, as always, provides the foundation for services revenue growth.

In the year, acoustics revenue grew 1% in constant currency. We had a better second half than first half.

We did lose some market share in the year due to increased competitive activity. However, the launch of the next-generation Osia processor in FY27 will enable us to regain that share and drive market growth.

The new processor has FDA approval and CE Mark, and it has market-leading features, including a rechargeable battery, improved connectivity, and most importantly, improved power output, enabling a wider fitting range and improved sound quality. The new processor also opens up the opportunity for Osia recipients to buy replacement processors.

It's the first upgrade opportunity for Osia recipients, building our services revenue for acoustics. Now I'll hand over to Sarah to go through the financial results.

All right, thanks, Dig. Good afternoon, everyone.

Let's go through the financial statements, starting with the P&L. Sales revenue was up 2% in constant currency.

Now, Dig's taken you through that, I won't go through the details. The gross margin declined 3 percentage points to 71%.

Let me talk through why it changed from original guidance and what we're looking at for FY27. At the start of FY26, our gross margin assumptions incorporated three known headwinds.

First, the introduction of VBP in China. That's a structural headwind we're working to address over time.

Second, being early in the Nexa manufacturing experience curve, which typically takes 18 to 24 months to reach full efficiency at commercial volumes. Third, the continued ramp-up of the Chengdu facility to full utilization in FY27.

These three factors were all built into our original budget and guidance assumptions of 74% gross margin. A couple of changes happened in the year that we hadn't anticipated, and these reduced sales of top-tier products, specifically weaker developed market sales growth and the second-half removal of China's special zone reimbursement.

These changes affected our gross margin in two ways: through product mix and through manufacturing overhead absorption. First, on product mix.

The weaker top-tier demand meant a greater proportion of our sales came from lower-margin products than budgeted. This mix reduced gross margin by 1.5 percentage points versus expectations.

Second, lower sales volumes meant we reduced production rather than building excess inventory. This was the right operational decision, but it meant lower absorption of our fixed manufacturing overhead costs.

That created a 1.2 percentage point manufacturing variance. We've now reduced our fixed overheads to align with the FY27 plan.

In addition, the stronger Australian dollar reduced gross margin by 0.6 percentage points. Based on FX rates at the start of FY26, we'd budgeted for a tailwind, and we got a headwind because most of our revenue is in foreign currencies, while a large share of our manufacturing cost base is Australian-dollar denominated.

Looking ahead, FY27 guidance has gross margin staying flat. Now, there's two reasons for that.

First, we assume the FY26 sales mix persists, without a net shift toward higher-margin top-tier products in this year. While stronger developed market growth would help, we've assumed the current mix for this year.

Second, while we're recycling the FY26 manufacturing variance and we're moving further up the Nexa manufacturing learning curve, this is offset by annualizing that China special zone reimbursement change, plus the FX headwinds we see. Over the medium term, as developed market growth lifts, and as we benefit from COGS improvement programs underway, we expect gross margin to improve.

Now, operating expenses. Comparable operating expenses were down 1%, reflecting cost management across the organization, while continuing to invest in R&D and growth initiatives.

Reported operating expenses increased 5%, as this includes $32 million in restructuring costs from fourth-quarter organizational changes, and $37 million in STI provisioning, following the low payout in FY25 and the partial payout in FY26. R&D expenses increased 15% to $323 million, which is 14% of sales revenue, up from 12% in FY25.

This reflects our commitment to key R&D projects and to development of our product and services pipeline, which underpins our competitive position and growth opportunities. This investment this year supported the progress that Dig mentioned on the development of the drug-eluting electrode and the totally implantable cochlear implant.

Our cloud computing investment to modernize core systems and improve scalability was $66 million post-tax, taken below the line in FY26. This is an increase from the prior year, reflecting the delivery stage of the current program, which introduces new ERP and manufacturing execution systems.

We've completed the first go-lives. All manufacturing lines at both Sydney sites and in Malaysia now use the new system, so that's the majority of our manufacturing volume.

In-year expenses were $15 million post-tax lower than expected for this, due to final phasing of milestone payments. There'll be approximately $60 million after-tax spend in FY27 to complete the program, which remains on track for FY27 completion.

Total cost for completing the six-year cloud program is just over $200 million post-tax. That's higher than originally expected due to scope expansion.

We remain on track to deliver scalability, data capability, and operating efficiency benefits, and that's built into our guidance. Fair value losses on investment and share of losses on equity-accounted investments was $109 million, mainly driven by the non-cash writedown of our investment in Epiminder.

Underlying net profit of $322 million reflects a net profit margin of 14%, below our medium-term 18% target. About half this outcome was driven by reduced developed market sales, impacting across revenue, COGS, and tax lines, and half by the $69 million in transitional costs, that's the restructuring and STI provision replenishment, which will largely not repeat.

We've managed costs carefully to deliver free cash flow. On the P&L side, we've reduced recurring costs by updating our operating models and using the cloud technology platforms we've invested in, plus AI capability.

These changes are permanent, not one-off. As a result, we've cut fixed costs 2 percentage points as a share of revenue, increasing our flexibility to respond when market conditions vary.

Changes to date deliver around $40 million in run-rate impact from FY27. We have work ongoing in FY27 and FY28, with overall cost improvements expected to deliver about 50/50 margin improvement and reinvestment in growth.

We've also reallocated $25 million into growth initiatives, including direct-to-professional referral programs, such as Dig talked about, digital and AI tools that support candidates through their journey, and evidence generation to develop the standard of care for adults. While making these changes, we still invested over $40 million more in R&D than in FY25, and we're committed to keeping R&D at at least 12% of revenue, the engine of our growth and market leadership.

On the balance sheet, you'll see tight working capital management cut inventory $75 million, 13%, in the second half, as planned, following the Nexa rollout. Inventory unwind will continue over this year, although we expect to see an increase at the half before decreasing over half two.

That's so we support readiness for the remaining go-lives of our manufacturing and ERP systems. We also made sure receivables normalized following the Nexa launch that was at the end of FY25.

As a result, we've more than doubled free cash flow compared to last year. Specifically on the balance sheet, you can see working capital reduced to $789 million, reflecting lower trade receivables and inventory following Nexa launch and first-half rollout.

You also see the change to investments and other financial assets, which reflects changes in the value of our innovation fund investments, with the writedown in Epiminder being the largest contributor. On cash flow, operating cash flow improved $130 million on last year, driven by better working capital, which we just covered, and lower income taxes paid due to reduced profitability.

You can also see we invested capex of $91 million, covering both stay-in-business capex and productivity-improving capex. That's mainly at our Lane Cove and Macquarie manufacturing plants.

Now let's talk about FX a little bit, and the impact on net profit. In FY26, foreign exchange contract gains gave an after-tax benefit of $9 million versus a $12 million after-tax loss in FY25.

Taken together, that makes a $21 million year-on-year movement that you see here, which helped offset spot exchange rate movements. Overall, the constant currency outcome was pretty flat compared to FY25.

On hedging, our approach reduces but does not eliminate the impact of short-term currency fluctuations on earnings. It mainly protects cash flow.

Our hedging policy has been largely unchanged for years, and we review it regularly. We take out forward exchange contracts on currencies we have key exposure to in six-month tranches over two years, weighted toward the first 12 months.

We disclose the contracts held for the next 12 months in our annual report each year. These are summarized in the table at the bottom of this slide.

At current rates, this would provide about $25 to $30 million in gains to help offset the FX impact of a currently stronger Aussie dollar versus the FY26 average rates. The FY27 guidance that Dig will take you through next is based on the US dollar at 70 cents and the euro at 61 cents versus the Aussie dollar, a stronger Australian dollar than the FY26 average.

Net of the foreign exchange contract gains just discussed, this is expected to reduce FY27 underlying net profit by about 10%, and it's factored into our guidance. We have a net profit sensitivity of around 2% for every 1 cent change in the US dollar or the euro.

All right, back to Dig for the outlook.

Thanks, Sarah. Before I get into the outlook, we obviously remain confident of our long-term opportunity to grow the cochlear implant market, and we look at FY27 in that context.

In FY27, we expect to see low single-digit constant currency revenue growth and an underlying net profit of between $330 and $350 million. We expect modest revenue growth in developed markets, supported by DTC programs and referral pathway activity.

We have assumed that underlying market growth does not rebound in FY27. In emerging markets, we expect low growth, with a decline in the Middle East as a result of ongoing instability, and we expect China sales to be in line with FY26.

Services growth will be slightly lower than FY26, reflecting that we're later in the cycle with Nucleus 8, and acoustics we expect growth to be driven by market expansion and the launch of the new Osia 3 sound processor that I mentioned earlier. Sarah said gross margin will be between 70% and 71%, with improvements in manufacturing costs and overhead recovery offset by FX and the annualization of lower China pricing.

There'll be a small decline in operating expenses, and this includes a lower level of restructuring costs in FY27, the benefit of cost reduction activities, and enables investment in growth and margin expansion, and increasing the STI pool to 100%. Sarah mentioned the impact of FX on profit in FY27.

Over the next few years, we expect to see developed market growth rates lift, tight management of opex, along with continued investment in R&D and in growth programs. All of this is expected to result in profits growing faster than revenue, and should see us return to our 18% net profit margin target over the medium term.

Thanks for listening, and now let's open up to Q&A.

Thanks very much. Dig, the medicalization of hearing loss, can I get you to talk to, over what time period do you think these programs can address this issue?

Because it feels like it's come on quite quickly. I didn't hear you speak about the hearing aid channel at all, whereas what you've set out is something that's going to take quite some time to deliver a benefit that shareholders would see.

David, good questions. The medicalization of hearing loss does take some time, that's for sure.

We've been working on it for nearly 10 years now, and we expect it to continue to take longer. It's also a gradual improvement.

It's not something that we just work on then all of a sudden it's done, and then you see a sort of a rapid increase in the growth rate. The work that we do year on year will improve referrals, but also conscious that given our market penetration for adults and seniors is under 5%, we've got a long way to go before we get there.

It is a long-run program, but it has year-on-year benefits. We haven't mentioned the hearing aid channel.

The hearing aid channel referrals remain important for us. Our referrals from the hearing aid channel in the US, for example, were flat year on year when we look at 26 versus 25, and I think that reflects some of the headwinds we've seen.

Very importantly, what we're doing with the work in what we're calling that self-navigator channel is to expand beyond just hearing aids and actually get into the medical channel, where we're already seeing referrals come through, but that's without us directly intervening. The examples I gave show that when we do intervene in that medical channel, when we do educate, we do see an increase in referrals.

It's the right time in terms of our development and the execution of our strategy to be expanding that presence in the medical channel and getting those more medicalized referrals, which again is a step on the path to medicalization.

Right, thank you very much. The other question, just at the trading update, we heard a lot about the market not growing, particularly the US market.

I think Western Europe had some explanation with UK, Spain, etc. If I could get you to focus a little on the US, and what you think the dynamics are that are causing market growth to be so slow, and what should we as investors and I guess outside the company be looking for as signals that things are starting to improve?

Yep. As I said, in the US, where we are working through our direct-to-consumer activities or the work we're doing with Cochlear, we're seeing growth in referrals, we're seeing growth in surgeries.

Clinics that have established referral networks continue to grow. Where the growth didn't come was in that self-navigator channel, where there's always been an underlying level of market growth.

That didn't occur this year, actually declined slightly as I said. What we see going on there is a couple of things.

One is the insurance prior authorization denials, which are leading to delays in surgery. We continue to hear, as I talked about in the trading update, we continue to hear from clinics that sentiment or broadly macroeconomic conditions is having some people more hesitant to go through to surgery.

Clearly not all, because there's lots of surgeries still happening, but it's been enough to take the edge off that growth.

Thank you very much.

It's one of the reasons that where we intervene grows faster is because we're able to provide people with information on will this be covered by insurance, what will the level of out-of-pockets be. I think what we see in that self-navigator pathway is people, particularly in the US, used to paying $5,000 for a pair of high-powered hearing aids assume this is going to cost more.

Without getting a strong referral and getting that information, they're more likely to pull out along the way. Again, back to medicalization, getting clarity on the treatment, the treatment pathway, and the costs will help people move through that pathway in a more seamless manner.

Are these pathways really clearly distinguished in your mind? Because it seems like quite a change from what we've heard in the past.

I hear the DTC channel has been talked up for quite some time and seems to be going well, and now we seem to be talking about other channels that are not growing and probably a little bit less observable from the outside.

Look, we've obviously been aware of this for quite a while. We have spoken about DTC.

What we have been talking about the last two years now is research we did into these surgeries that happen where we don't have any contact with the people beforehand. We've talked about that in these calls before to say that there are about 70% of surgeries, depending on the market, where the first thing we know about this person is when we get their implant registry.

Two years ago, that led us to go and do research into where are these people coming from, how are they finding their way. Out of that, we learn a lot about the ad hoc nature of many of those people's journeys, and we hear that directly when we talk to recipients.

We also learned there was a significant number of medical channel referrals occurring despite us actually never going into that channel to stimulate those referrals. That led us to build these program in the US, where we've now got four cities up and running, and we're going to take that to 12 cities over the next six months, where we've got people on the ground working in that medical channel.

We haven't talked about it for a while, but we've certainly been aware of it, and we've been working on both the research and then the programs to drive growth. I'll come back to the Australian example.

In Australia, being our home market, it's an easy one for us to experiment in. We've been working for a while in Australia on expanding the referral network and working out what is it that drives referrals and what's the education that helps make a difference.

Thanks. You've been very generous.

Thanks, David.

Yes, good afternoon. Thanks for taking my questions.

You've talked a lot about the volumes and so on, but I wondered where you sort of see the opportunity to get price. I think you sort of talked about China, you've taken price and then just you had some plans there, and I guess finally if you're not getting it back through Nexa, can you get price up with TICI?

Andrew, thanks for your question. We did get that average price increase of about 3% with Nexa, which was good to see.

As we've said before, one of the things we were doing with Nexa is testing our ability to get a price increase, because we hadn't gone to put a price increase through at this level for quite a long time. Cognizant of TICI coming, we wanted to both understand how the market worked when we put a price increase through and improve our ability.

All of that said, as we look forward with TICI, we are thinking very carefully about the commercial strategy, about the pricing that we'd like to achieve, about how we realize growth with TICI. We're certainly seeing from our market research and the clinical studies there's a lot of interest in TICI.

Interestingly, from our market research, we're seeing it's potentially a different patient cohort to what we're getting now, it's an extra patient cohort. We're building a commercial strategy, and I'm not going to go into the detail of that today, that looks at how do we drive growth, how do we work within the reimbursement parameters that they have around the world, what's the right level of pricing and lifetime value that we can get.

Maybe just to torture that a little bit more just on price, obviously there are some markets which are a lot lower, we know that with China and so on, but even developed markets, your constant currency implant revenue is still quite a way below your total units. Just trying to understand, I think there are some markets where you lost a bit of share and maybe that was price driven, but overall you're saying that you are holding price.

Maybe I can just ask for a bit more color?

No, we are holding price, and in developed markets we are holding price. The difference between that 5% volume growth and flat constant currency is emerging markets, and it's largely China and the shift to volume-based pricing.

As we've talked before about the volume-based pricing, the goal in China in dealing with pretty much all medical therapies is to lower the price and significantly expand access. That's what we've seen in China.

We've seen a significant lift in volume, but that has happened at a lower price. That's the single biggest driver of that 5% volume growth and flat revenue in constant currency.

It's not a decline in average prices in developed markets.

Appreciate it. Thank you.

Thanks, Andrew.

Yes, afternoon, Dig and team. Dig, maybe just a comments that you made on the US market about insurers pushing back, initiating sort of more prior authorizations.

I guess what's within your control sort of help with that dynamic and some changes that you've put through to address?

We're certainly seeing that pushback. As we've talked about before, where someone's getting an upgrade, we're often managing the insurance processing part for them.

Where they're getting an implant, the vast majority of those prior authorizations are sought by the hospital. It's actually then up to the hospital to if they get a denial to appeal, because most times when there's an appeal, that denial gets overturned.

We don't have a direct role in that. If it's a candidate we're working with, like through our DTC, and we see that, then we can talk to the clinic about getting the clinic to appeal.

If it's from that other side, then we don't get that visibility. I think what we'll see there is these denials are not just cochlear implants, obviously, it's across a whole range of surgery areas.

The primary impact of these denials is actually on hospitals and on hospital revenue. That's where we think the hospitals are actually going to take the lead here and lift their work in terms of challenging, appealing the denial and seeing that overturned.

I think we will see that change over time, the work that the hospitals do to get those denials through. It's exactly the response we had when two years ago we saw insurers pushing back harder on replacement processors.

We lifted our game on the documentation we provided to insurers, we appealed when there were denials in place, and we saw the result was stronger growth in services that while there's still plenty of tension there, we've improved our ability to get insurance. We think hospitals will do the same with respect to surgeries overall.

Yep, great. Thanks.

My next and final one is just thinking about the NPAT guidance into '27 and also your, I guess, longer-term guidance in terms of lifting the NPAT margin back to 18%. In a situation where your revenue does lift above the low single-digit guide, do you sort of expect that to sort of all flow through to the bottom line, or do you step up the rate of reinvestment into the business as well?

Sarah provided a good guide on as we reduce our costs, we'll put some in the margin and some in growth. If we see extra growth, we'd have that same consideration of do we have a priority growth program that we want to invest more in, or would we restore the margin?

Definitely, a good part of that will go into the margin. We've got that 18% target, and we want to lift back to that.

Thanks, Dig.

Thanks, Davin.

Hey, thanks for taking my questions. I'll stick to two.

Just the first one, Dig. There's a commentary talks to the developed market implant growth and says revenue is expected to grow modestly.

From the release today, looks like you've got a price increase on average of 3% from Nexa, most implants if not all are being implanted in Nexa. You've also talking to share gains on the back of the Nexa.

My question is, is this set therefore just a function of market growth effectively being soft in those developed regions? I guess in that same comment it says current trading conditions remain mixed, and the actions being taken now will take time to translate to more consistent growth.

Regarding the outlook for '27, how much line of sight do you have as to unit sales growth through those developed markets, considering when we had the downgrade in April or May, it seemed to come very suddenly. I guess how much confidence do you have that the trends that you saw say in June can be extrapolated into the current fiscal year?

Thanks.

I'll start, that's the first part of that, and Sarah can talk to what we're doing from a visibility perspective. Look, our outlook is a combination of price increase, some share gains on improvements with Nexa in some markets, not all, some markets have already got the share gains, and some market growth.

It is a combination of those, and a combination of how we think those factors will play out across the different markets that leads to our outlook. Let Sarah talk to what we're doing on visibility.

Sure. Look, when we think about that outlook, we consider not only the kind of historical trends that we've seen, but more importantly what we're seeing in the market, and so working closely with the sales teams, because that's actually one of our best sources of intel, seeing where those outlooks look like from a customer perspective, understanding quite deeply where there are capacity constraints kind of at the micro level or where there are bigger trends that we're hearing from our customers.

We also look at the data that we have available to us as proprietary data, what's going on with our DTC, our direct-to-consumer data, where that's available to us, and also the broader market trends, whether that's information about the hearing aid channel that we can get through our cycle data or broader, more publicly available datasets. We look across all of those things when we combine together what do we think those forecasts are.

Of course, we've got a range for different subsegments, but then overall combine that into the outlook we've given for our developed markets.

Thanks, Sarah. Can I just follow up with one other question, Dig?

Historically, Cochlear has said that on the services revenue, it was the intention to smooth that revenue and the rate of growth. It still seems to be quite volatile as you go through the various years of the life cycle of an upgrade.

Do you think it is going to be possible to smooth that revenues, or do we just have to live with the fact that the first couple of years you get significant growth in that revenue line and then ultimately it declines as you get to the outer years of that upgrade cycle?

I think it will certainly still remain lumpy to a degree. As we've said before, having the off-the-ear processor and that typically being sort of a mid-cycle launch does help smooth that out.

I think the other factor that will help is we do have to retire older processors because we just are unable to supply the electronics to keep them running. Us staging that retirement across countries to sort of help manage the demand and the run-in the run-out, all of that will help provide some smoothing, but we're always going to see a lift on a new processor launch, that there are people who are tuned in, waiting for these.

We've got a track record of delivering significant benefits from these launches, and there'll be people who are always going to jump at that chance.

Great. Thanks, Dig.

Thanks, Sarah.

Thanks, Saul.

Good afternoon, team, and thanks very much for taking my questions. Just to ask Saul's question in a different way.

The pipeline in the US, how many months ahead can you see volume and scheduled surgeries? Just follow up from when we heard from you last period, like Saul said, it seemed that it was shorter than I previously thought.

If you could give us some color on that, that would be greatly appreciated.

Yep. On scheduled surgeries, that sort of typically looks out a couple of months.

It does vary by clinics, but it is only a few months into the future. When we look at our pipeline of candidates through the areas where we have visibility, that can give us a 12-month view, but it is a mix of candidates who move with quite different velocities.

We can run some averages over that, and that gives us an indicator, and as I've said, that's about a third of our sales, but again that pipeline is typically more concentrated in the next six months and less concentrated sort of in the six to 12 months. It helps gives visibility, but it's certainly not perfect visibility.

Understood. Very clear, thank you.

Could I trouble you for an estimate for capex for FY27, please? Or have I missed that?

No, that'll still be around about $100 million pretty consistently.

Okay. Then my final question, any updates for trial results from your TICI, please?

Any kind of timeline or further color would be greatly appreciated.

We've got two studies there: one in Europe, which has finished recruiting and recruited ahead of schedule; and then the one in the US is still recruiting, but it's running a few months ahead of schedule, largely because it's very easy to find candidates. Obviously after studies finish recruiting, there's then sort of a six to 12-month follow-up and a regulatory approval path that comes after that.

Very clear. Thank you.

Thanks, David.

Thanks very much. Dig, I wonder if we could touch on the Nexa and if you could provide any sort of guidance as to when we could expect some of these new features to be announced or launched with that Nexa.

The overwhelming sentiment from surgeons and audiologists is they're looking forward to it, but nobody seems to know when that is coming. You don't need to say what it is, but just some timing so we can sort of get some feel for it, because that'll be when your price increases might resonate a little bit more.

Then the second part of that question is associated with the launch, there was some problems around the MAP transfer. Just wondering what timeframe you've been able to get that reduced to and the SmartNav changes, when would they be sort of able to be relaunched to bring those surgeons back to the tools that they were used to when implanting an implant?

Thanks.

Yep. They're good questions.

I'll do the software first. In the next few months, we'll have a software release that will improve the range of programming parameters that some audiologists talk about, that will reduce the time for the MAP transfer to the implant, plus a range of other improvements.

That's a few months away. SmartNav, I think there's some people who would like access to some of the research tools that we have developed over 20 years with the previous systems.

We're working on those research tools. They are not too far away, but don't want to give an exact date on them.

Then on the Nexa features, that's one we have plans on what we're going to do, but I'm not going to put a date publicly on that for a whole range of reasons, including competitive ones. I know, as you talk to surgeons and as we talk to them, they eagerly await, and audiologists, to get some insight into what Nexa can do.

The people who have been involved in the clinical studies have already seen some of that and are excited by the opportunity to do more, but we're not going to publicly put a date on when that will be available, but we do have a multi-step plan of improvements and access to new features.

Thanks. Just a quick clarification.

When you say you're holding price, does that mean holding it flat or the increase that you put through was held, and or are you referencing different markets that you increased? I'm just meaning is it overall across everything?

The price increases we put through on Nexa, they are holding. When we say holding price, that means that the price we've got, whether it was unchanged or whether it was increased, we're holding those in developed markets.

In emerging markets,

it's

obviously a whole mix about different volumes and different tiers, and the dynamics there are quite different.

Yep, got it. Final one for you, Sarah.

Just on the STI provision that had in previous year once you had released it, could you just give me a quick refresher on what you're doing this year, and does that mean you've built it back up and there's been no sort of release again into this current half?

Right. Let me just refresh you.

From the beginning of the year, we expected we'd need to build back up about $50 million following the low payout in FY25. We built up $37 million of that in the end because we didn't have a full payout in this year, in FY26.

Then in FY27, we have about $15 million of that remaining to build back up. Does that help?

Great. Thanks.

15, 1-5.

Yes, 1-5. Yes.

Yes. Thank you.

Thanks, Steve.

Thanks. Afternoon, Dig.

Just the commentary there about the economic sensitivity in the US, and you kind of alluded to it I think, but I just want to understand. Is it more of a perceived out-of-pocket expense as opposed to an actual out-of-pocket expense?

Is it more the perception that you're going to have a big out-of-pocket payment as opposed to actually having one? Is that the impediment you're seeing or the economic sensitivity you're referring to?

It's actually a bit of both. People who are less well aware and earlier in their journey just particularly in the US, they think $5,000 for a pair of hearing aids, this is clearly more complicated technology, it's going to cost me more.

We see and hear of those sorts of experiences. Then there are some people who get all the way to the end, and then they have an out-of-pocket which is much less than that $5,000, but some are choosing to say not just now.

We do see both occurring, and that is particularly the second one, because the out-of-pockets aren't that big, are much more about the macroeconomic impact on household budgets, particularly in the US at the moment.

Is there any change in policies that are driving more out-of-pocket expenses, Medicare Advantage versus Medicare or is any sort of anything going on in terms of how people are covered such that the out-of-pocket component's been increasing relative to what you've seen before?

Not really. I think it's the sort of macro picture.

There has been a trend over the last number of years in the US for plans where there's an annual deductible for that deductible to go higher. Typically that deductible might be for the family and it might be the first $5,000 or in some cases $10,000 of costs they've got to pay themselves, and then insurance covers everything else.

Those deductibles have been rising for the last few years for people on those plans.

Yep. Just quick final one.

Just you mentioned it again, just want to confirm this, but the TICI, do you feel like it's going to expand the market as opposed to cannibalize the existing technology? Do you think there's candidates out there that wouldn't consider a cochlear implant in its current form, but would potentially consider a TICI going forward?

They definitely are. There's actually two forms of those, two or more than two, but two examples.

One is, and I know a number of people who fit in this camp, who have one cochlear implant, they have no hearing in both ears, they have one cochlear implant now, they're saving their second ear for a TICI. The second is our market research and confirmed by the work we've done on the feasibility studies and the trials.

There are people out there who absolutely don't want a cochlear implant now, but would jump from a high-powered implant to a TICI because of the 24-hour hearing, because it's invisible, and because of the ease of use there. It's absolutely a growth product, and the more we look and the more we hear and the more research we do, the more confident we get of the significant growth opportunity there.

Understood. Thanks, Dig.

Thanks, David.

Thanks for taking my questions. Dig, looks like you finished at the top end of the sales growth range for the second half, I think about 6%, and that does look like you've had a better fourth quarter.

I'm just wondering if you can give us a bit of color around the shape of implant sales growth across the half, developed market in particular?

Sarah, do you want to take?

Why don't I take that? Q4 was stronger than Q3, coming into our expectation when we talked at the trading update.

We had ranges across the different segments. Overall for developed markets CI, we were at the lower end of that range, but we were at the upper end of the range for services, where, as Dig said earlier, that was a bit stronger in developed markets.

We were at the upper end of the range in the Middle East, and acoustics ended up a bit below where we expected. We were tracking in the range we thought through mid-Q4, but June saw word get out about Osia coming, and we saw a bit of holds coming in in June, and so overall acoustics didn't quite land where we wanted.

Across all of those, when you combine those together, that does put us in that overall range at the top end as you said.

Yep. I'm just wondering how the exit run rate in FY26 differs to what you're forecasting within guidance into FY27.

Am I thinking about that the right way, or are sales quite lumpy across the year?

Both are true. You're thinking about it in the right way, and particularly in emerging markets, sales can be quite lumpy.

From a developed markets perspective, it's reasonably consistent going forward, within what we've guided. There's nothing that's really dramatic assumed going into next year, but we will see over the year improvement through the year.

It's not strongly second-half weighted, but there is some improvement builds through the year as the programs that Dig's been talking about work more and more over time. As you said, it's gradual, but does improve.

Then in emerging markets, we definitely do see that some of those sales are lumpy. Bigger government tenders and contracts are the things that drives that, so that can kind of come and go a bit.

Yep. Okay.

The second question is just on the margin outlook. Dig spoke about getting back to 18% in the medium term.

Just wondering if you can provide any sort of outlook on gross profit margins. Should we expect a similar sort of recovery trajectory, or are you going to get to the bottom-line margin with a bit more opex this time, opex out?

Look, the bottom-line 18% NPAT margin in the medium term is going to be addressed by both growth and some gross margin improvement and some opex improvement. It's all three of those factors.

As we've said, gross margin is flat going into next year, but we are working on that over time. What the real focus is is making sure we get back to 18% in the medium term, and our programs have a plan to deliver that.

Yep. Can you just confirm there's no fixed overhead absorption or underabsorption in FY27, we're now past that?

The FY27 plan is set in such a way, and we've adjusted our overheads in such a way that that's right. Going into next year, we don't see that continued unrecovery of overheads as we saw this year.

Yep. Thank you.

Thanks, Sacha.

Great, thanks for taking my question. At your trading update, there was a $10 million provision for the Middle East receivables.

I was wondering if any of that had been utilized or any written back?

Look, we took up some of that. We didn't see the Middle East being quite as terrible as we, pretty unclear in April.

We took up some of that, but it's still pretty much within the normal range of our provisions.

Okay. Then just the second question, on the market share losses in Germany, could you provide some more just kind of comments about that, and if that was actually much of an impact, and what you can do to address that market share loss?

It certainly did have an impact on our performance. Germany is the second biggest developed market after the US.

It's an important market for us. Certainly disappointed to lose share through the year, but we're seeing some positive signs, and again confident that we can regain that share over time, particularly with Nexa and what we've got coming in Nexa.

Being through the launch and being able to focus on both market growth and talking about Nexa, what it delivers now and what it delivers in the future, we're confident that that can help us to get that share.

Thank you.

Thanks, Craig.

Thanks very much. Sarah, thanks for walking through the gross margin drivers.

I was furiously taking notes. Could I just confirm, apologies if I missed it, but the guidance you gave in April was for 72%, and then we came in somewhere below that, I think 70.6%, with only eight weeks between the two periods.

Could I just confirm what it was in that eight-week period that sort of went against you given those drivers you outlined were known at the time of the update?

It would have been a little bit of sales mix in there and probably a little bit of FX as well. As I said when I was just talking through Q4, while we did come in toward the top end of the revenue guidance range we'd given at 6%, we were a little bit lower than we expected in developed markets, and so that's part of what's influencing that sales mix that you see coming through in gross margin.

Got it. Okay.

Maybe I could just follow up on your answer to one of Sasha's questions. Is it fair to assume that what you're saying here with the 18% NPAT margin is you can achieve that level over the medium term without necessarily needing gross margin to go back into the sort of mid-70s that you were at in the last couple of years?

That's right. We don't have a hard assumption on that gross margin, but we are working toward improving gross margin from where it is now.

You're not expecting it to get back into the mid-70s at this point?

We're not making a firm target on gross margin at this point.

We're

focused on that 18%. Yep.

All right, thanks so much.

Thanks, Chris.

Hello, thank you for taking my questions. If I could just go back to the TICI, please.

Could you tell us if the trials that you have are registrational or whether there's likely to be any other steps to generate the clinical evidence that regulators in key markets would need to approve this?

Laura. Now, these trials are to generate the evidence that we need for regulatory approval.

In planning those trials, we have met with the regulators to understand what their requirements are, and so we're confident that the way we've set these trials up, provided we get the results in line with our expectations, will have sufficient evidence for the regulators.

That's good news. Those populations that you have in those trials, I think they are adult populations, if I remember rightly.

Will you eventually be pursuing a label in the pediatric setting for the TICI?

I think, yeah, with cochlear implants, if you look back at the history, look back at the original implants and even some of the improvements over time, it's always been adults that get approved first and children to follow. I think that's sensible from a health risk perspective.

One of the things about TICI is it is a bigger implant. We're very pleased with how small we've been able to make ours, but it's still bigger than the existing implant, and there's the microphone.

For a baby, probably too big until we get another generation in the future, but for older children there's definitely potential. Our initial approval will be just for adults.

We have a long-run technology plan for steps of improvement in the TICI implant.

Thank you. If I could just squeeze one last one in.

You mentioned that you're setting up programs in four cities in the US, which will go up to 12. Could you just tell us a little bit more about what that involves?

Those programs are aimed primarily at ENT practices that don't do cochlear implants. We know that those practices are seeing people with hearing loss.

Many of them actually sell hearing aids. What we are doing is a combination of digital awareness work, whether that's on emails and webinars, but also people on the ground who are educating, going into these practices to educate on the clinical practice guidelines.

It's an example where this long-run work on medicalization helps, because we had a consensus statement in the US now, the ENT society has adopted clinical guidelines for age-related hearing loss. Our people then take those guidelines into the ENT practices to say, "Are you aware of the latest guidelines that have been approved and released, that show the indications and the evidence for the indications of cochlear implant, that show the treatment pathways?

Then do you know who to refer to? Do you know the cochlear implant clinics in your city or around your practice?"

It is both an overarching digital campaign with people on the ground cold-calling, going into practices to build referrals. We back that with data on referrals that we can buy in the US that shows actually who's referring now and their rates of referral, and that helps us target who we go and see there.

It's a comprehensive campaign to activate that medical channel. It will include some work in the hearing aid channel as well, so that will remain an important part of referrals, but expanding it to the ENT medical channel is a real opportunity.

Thanks very much.

Thanks, Laura.

Thanks all for joining the call. Thanks for listening.

Thanks for your questions. We'll end the call.