Corporate growth in local currency rose by 14.3% and organic growth by 14.1%.
	Revenues amounted to DKK 4.3 billion, or an increase in DKK of 11.2%.
	Operating profits (EBIT) totalled DKK 1,004 million, resulting in a profit margin of 23.3%. For the second half of 2004, the profit margin was 24.7%.
	Net profits rose by 15.9% to DKK 716 million, and earnings per share (EPS) improved by 21.6% to DKK 10.7.

Growth significantly exceeded forecasts at the start of the year and matched the expectations most recently announced on the publication of the quarterly review for the third quarter.

Activities and events celebrating Oticon’s centenary were successfully launched. At the start of the year, we estimated centenary costs at DKK 30 million, but as the centenary celebrations and the introduction of Oticon Syncro coincided, we derived the maximum commercial benefit out of the two events, and centenary costs are therefore not identifiable as particular cost items.

Fluctuations in the exchange rates of the Group’s most important trading currencies, particularly the USD, continue to have a negative impact on consolidated revenues and profits.


Revenues were affected negatively by 2.7%, which is slightly more than anticipated at the end of the first half-year. The Group’s forward exchange contracts delay the impact on EBIT. Falling exchange rates mean that the Group will hedge the net flow of trading currencies at lower rates. In 2004, lower exchange rates had a major impact on operating profits, and compared with realised rates in 2003 we estimate an overall negative effect of DKK 70-80 million, which is in tune with our expectations at the start of the year.

Corporate growth also led to an increase in R&D staff, primarily based in or around the corporate head office in Copenhagen. However, the existing head office is no longer large enough to house the growing number of employees, so at the end of 2004 the Group acquired a new property at Smørum. The newly acquired property will be renovated during the first half-year 2005 to accommodate corporate needs and is expected to be ready for use in summer 2005.

Business conditions
Hearing Aids
In 2004, the global market for hearing aids as a whole developed in line with our long-term market growth expectations of 3-5%. As in previous years, there have been fluctuations over the year, and the pattern of demand has varied considerably on the various markets.

Any general discussion about short-term trends, past or future, is plagued with great uncertainty, due particularly to large regional differences in market trends and the vulnerability of individual markets to major single events. Following a period in which market growth in the sale of hearing aids concentrated on the mid-priced segment, the past twelve months have seen sales spreading across the various price segments. Low-end hearing aids have improved and now offer comparatively generic and comparable user benefits. This low-end market has increasingly focused on price as a competitive parameter. However, the introduction of Oticon Syncro has sparked greater differentiation in the high-end market, enabling us to maintain or increase our prices for high-end types of hearing aids. Syncro was introduced in April 2004, and demand trends have been very encouraging to date.

However, we must expect intensified competition in the high-end segment in the first half of 2005, as those of our competitors who do not currently have products in this segment are bound to introduce new products. We believe that better high-end products can help to maintain positive growth trends in the high-end market overall.

In addition to Syncro, other newly introduced products also contributed favourably to the development within Hearing Aids. In the first month of 2004, Oticon introduced Atlas Plus and GO. During the same period, Bernafon launched Symbio XT, and at the EUHA fair in October in Frankfurt an entirely new product family, Neo.

Overall, the Group’s hearing aid businesses increased the sale of hearing aids manufactured by Group undertakings by 13.3%, which should be viewed against a market unit growth of about 5%. The Group’s two hearing aid businesses will introduce new products in 2005 as well. The importance of constantly being able to offer new products with different user benefits and fresh concepts is underscored by the fact that over half the hearing aids manufactured by Group undertakings sold in 2004 were introduced in the past two years.

The Group’s largest business area is Oticon, which over the years has contributed significantly to corporate growth, and 2004 was no exception. However, corporate development was also stimulated by Bernafon, which in 2004 reversed the decline in revenues caused by the loss of the Australian Government contract in 2003. In 2004, Bernafon’s sales to commercial markets improved dramatically.

In addition to competition on user benefits and product concepts, the Group’s hearing aid businesses must be very flexible in the distribution link. This means that manufacturers are occasionally required to offer customers an “exit” in the form of an acquisition or other initiative in connection with succession, etc. It may also be necessary to contribute financially when key customers wish to expand their business. In 2004, the Group acquired a few minor businesses in the distribution link and made some financial resources available to new and existing customers.

In the Annual Report 2003, we mentioned that in recent years the hearing aid industry has worked on a new technology for manufacturing individual shells for in-the-ear hearing aids. The technology is based on 3D scanning of the ear impression, which is modelled on a computer. The computer model is then used for automatic production by means of a 3D printer. In 2004, Oticon and Bernafon implemented this new shell technology in five of the Group’s largest production facilities, and another two large production facilities will follow in early 2005. In the short term, the new technology will not generate any savings, but in the long term manufacturers, when developing new types of in-the-ear hearing aids, will be able to cut production time significantly. Furthermore, the new production technology will make individualisation more precise than conventional technology, and may thus reduce the number of hearing aids requiring adjustment due to faulty design.

The Group’s retail activities developed more positively than the underlying market.

Diagnostic Instruments
Diagnostic Instruments saw good growth in 2004, and we estimate that this business area has increased its market share during the year. The underlying market showed slight growth in 2004, a trend that is expected to continue in 2005.

Growth in this business area was distributed on a variety of products. In the second quarter, Interacoustics launched Affinity, a computerised audiometer and fitting system. The product will support future growth, and the AUD (Audiometer), REM (Real Ear Measurement) and HIT (Hearing Instrument Test) modules have now been introduced in most markets.

The business area continued to enhance production and logistics efficiency.


Personal Communication
This business area includes Phonic Ear and Sennheiser Communications.

Following major restructuring in 2003, Phonic Ear has reversed the trend in 2004. Today, Phonic Ear covers four product areas: FM systems, sound equipment (Soundfield), ALD (Assistive Listening Devices) and ALS (Assistive Listening Systems). FM systems include the Lexis system – introduced in 2003 – which is increasingly sold in combination with hearing aids. The system contributed to growth particularly in the first half-year, whereas for the year as a whole sales were flat. Assistive Listening Devices (ALD) and sound equipment (Soundfield) saw steady growth throughout the year. Soundfield, used as a loudspeaker system in classrooms, has proved to have a positive effect on children’s learning ability.

Sennheiser Communications, the Group’s joint venture within headsets, matched expectations, and sales of headsets for telecommunications and computers are on the rise. In 2004, Sennheiser Communications expanded its product portfolio in most product areas.

Financial statements for 2004
Revenues and foreign exchange rates
In 2004, revenues amounted to DKK 4,303 million, or a growth rate in DKK of 11.2%. In terms of local currencies, growth was 14.3%. Organic growth in 2004 amounted to DKK 533 million, or 14.1% adjusted for a negative exchange effect of 2.7%. Revenues are in line with our most recent expectations, but are considerably above our forecasts at year-start. Growth was mainly organic, since the Group only made three minor acquisitions in 2004: in Italy, Scotland and Finland. These acquisitions contributed to growth by less than 0.2 percentage points.


96% of corporate sales are generated outside Denmark, and revenues are therefore still very much affected by trends in foreign currencies. The following graph shows indexed development in the Group’s trading currencies. The development is calculated on the basis of the distribution of revenues on the various currencies in 2004 calculated as realised average exchange rates for the individual months.




As a large slice of sales goes to the US market and is therefore invoiced in USD, revenues are particularly sensitive to the development of the USD. In 2004, the realised exchange rate of USD was 599, or 9% lower than in 2003. In the last few months of 2004, the USD was further weakened against the DKK, and consolidated revenues will therefore also be affected negatively in 2005, if current rates continue throughout the year.

The Group’s major trading currencies are USD, JPY and GBP:

Foreign-exchange rates	USD	JPY	GBP
31 December 2002	708	5.97	1,140
Realised rate 2002	659	5.68	1,075
31 December 2003	596	5.57	1,058
Realised rate 2004	599	5.54	1,097
31 December 2004	547	5.27	1,049
Realised rate January 2005	567	5.49	1,065

Net revenue
(DKK million)	2002	2003	2004
At realised rates	3,924	3,870	4,303
At realised rates January 2005	3,421	3,696	4,221
Difference	-12.8%	-4.5%	-1.9%

Fluctuations in exchange rates will be hedged by forward exchange contracts, so budgeted cash flows are hedged with a horizon of 6-24 months. In line with the falling rate of the USD, we have succeeded in converting a large portion of corporate purchases to USD. This has affected expectations regarding net flows in the various currencies, and thus improved the Group’s total hedging into 2005.

At the end of 2004, the Group had forward exchange contracts to the tune of DKK 982 million (DKK 951 million at 31 December 2003) with a market value of DKK 35 million (DKK 31 million at 31 December 2003). The major contracts hedge the following currencies and periods:

Currency	Hedging period	Hedging rate
USD	13 months	601
JPY	9 months	5.74
EUR	8 months	746

The Group also hedges single investments in foreign subsidiary undertakings by raising loans in the particular currencies. Where goodwill has been written off via shareholders’ equity in prior years, the goodwill-related part of such financing will be treated as hedging of any future returns on the investment in such subsidiary undertaking. At 31 December, shareholders’ equity included an amount of DKK 161 million for such hedging purposes. At the end of 2004, such loans in foreign currency constituted DKK 298 million.


In the past year, the Group has seen excellent growth in the US market particularly driven by growth in our core business and Diagnostic Instruments, whereas sales trends in other activities in the USA have been moderate. Overall, North America has seen a growth rate of 18.4% in local currency, which is higher than corporate growth as a whole, but the development of the USD caused a slight fall in the regional share of consolidated revenues from 36% in 2003 to 35% in 2004.

Revenues in Europe amounted to 48% of consolidated revenues. The Group enjoyed reasonable growth in all European markets.

As expected, trends in the Pacific Rim region were affected by the loss of the Australian Government contract mid-2003. Despite the loss of this contract, the overall level of Group sales was maintained, emphasising the strong trend in commercial USD 13 months 601 sales in Australia and New Zealand.

Revenue by business area
(DKK million)	2003*	2003**	2004**
Hearing Aids	3,424	3,334	3,817
Diagnostic Instruments	211	206	242
Personal Communication	235	223	244
Total	3,870	3,763	4,303
*Computed at 2003 exchange rates    **Computed at 2004 exchange rates

In 2004, all corporate business areas grew satisfactorily, and indeed above market growth. The highest rate of growth was generated by the corporate core business – wholesale of hearing aids, which is reported as part of Hearing Aids – and by Diagnostic Instruments. Our core business grew by 14.9% – a rate of growth driven by new product introductions in 2004, as mentioned earlier. Growth was stronger in the second half-year. Conversely, Personal Communication developed flatly in the second half-year after strong growth in the first six months, due to the launch of Lexis in mid-2003.

Corporate retail activities accounted for 20% of consolidated revenues and saw reasonable sales trends. Hidden Hearing in particular outgrew the underlying market.

Gross profits
The Group improved gross profits by 13.4% to DKK 2,859 million. With fixed exchange rates, the improvement was 14.9%. The gross profit ratio improved from 65.2% in 2003 to 66.4%, due to growth in volume generated by the same production apparatus. This was possible because, for several years, the Group has focused on developing products that require fewer working hours, on better utilising existing capacity and on a higher degree of refinement of externally acquired components. In addition, the rising sales of high-end hearing aids, which generate a relatively higher gross contribution per product, also contributed to the increase in gross profits.

Capacity costs
The following table shows that the Group’s total capacity costs did not increase as much as revenues, which had a positive effect on the profit margin.

Capacity costs
(DKK million)	2003	2004	Percentage change
			DKK	Local currency
R&D costs	295	324	9.9%	11%
Distribution costs	1,130	1,264	11.8%	14.6%
Admin. expenses	242	270	11.7%	13.7%
Total	1,667	1,858	11.4%	13.8%

R&D costs
In line with the Group’s continued focus on R&D, costs rose by 9.9% (11.0% measured in fixed exchange rates). This is a heavier rate of growth than in the underlying market and emphasises the Group’s policy to view investments in R&D as decisive as regards long-term competitiveness. It is the Group’s ability to constantly innovate and launch products with more user benefits that will drive future growth. The acquisition of the new property at Smørum is an integral part of the focus on expanding the Group’s development activities, including the provision of cutting-edge facilities and technology for continued growth.


Development functions in the William Demant Holding Group cooperate worldwide across business areas to ensure optimal utilisation of know-how and expertise, thus ensuring that basic technologies and special competencies developed for specific purposes in one part of the Group will be re-used in other contexts for maximum exploitation of our development resources.

The Group has major development centres in Denmark, Switzerland, Germany and the USA. The Group is a member of various networks of researchers and research institutes throughout the world.

Distribution costs
Distribution costs, which account for the biggest slice of the Group’s capacity cost, rose by 11.8%, or 14.6% measured in local currency corresponding to the trend in sales. Distribution costs in 2004 include all costs relating to customer-oriented activities in connection with Oticon’s centenary celebrations and the introduction of Oticon Syncro. Fair growth in the Group’s retail activities, which place a relatively higher burden on distribution costs than the Group’s other businesses, also contributed to the increase in distribution costs.

Administrative expenses
In 2004, administrative expenses rose by 11.7%. With fixed exchange rates, the increase was 13.7%.

The year's profit
Operating profits (EBIT) amounted to DKK 1,004 million, or an increase of 17.4% corresponding to the most recently announced expectations. The corporate profit margin rose to 23.3% for all 2004. For the second half-year, the profit margin is 24.7%.


The underlying development in earnings was better than reported profits, because falling exchange rates over the past almost three years have meant that Group currency transactions were hedged at lower exchange rates in 2004 than in 2003.

The Group has also seen a negative effect from the translation of profits and losses in the Group’s foreign subsidiary undertakings. The overall negative effect is estimated in the range of DKK 70-80 million in 2004.

Amortisation of goodwill amounted to DKK 0.5 million.

Income from associated undertakings amounted to DKK 4.4 million generated by HIMSA, through which the hearing aid industry collaborates on a joint software platform, NOAH.

In 2004, net financials amounted to DKK -38.6 million against DKK -28.2 million in 2003. The increase is due partly to growth in working capital in connection with inventories and trade debtors during the year, partly to the positive effect of exchange rate adjustments on financial items and tax-free interest income of a non-recurrent nature.

In line with Company policy, the Group bought back own shares worth DKK 611 million in 2004 to give shareholders an opportunity to earn a current return on their investments.

Pre-tax profits rose to DKK 966 million, or an increase of 16.7%. Tax on the year’s profit amounts to DKK 249 million, which equals an effective tax rate of 25.8%. The trend in the effective tax rate matches our expectations of a slightly growing tax rate, which in the longer term is expected to reach a level matching the Danish corporation tax rate.


The year’s profit amounted to DKK 716 million. Earnings per share (EPS) were DKK 10.7, or a 21.6% rise on last year. The explanation for the relatively higher growth in earnings per share compared with the rise in the year’s profit trends is the Group’s current buyback of shares, which in 2004 reduced the average number of shares by 2.9 million shares compared with 2003. In 2004, the Company bought back 2,715,247 own shares at a total price of DKK 611 million. At 7 March 2005, the Company’s holding is 1,757,912 shares, which corresponds to 2.6% of the share capital. At the next general meeting, the Directors will present a proposal to reduce the share capital by the number of shares held by the Company immediately prior to that date.

The Directors will recommend that the shareholders in general meeting decide that all the year’s profit be transferred to free reserves.

In this connection, William Demants og Hustru Ida Emilies Fond (the Oticon Foundation) has informed us that it will currently put shares on the market in order to retain its current ownership and thus secure the liquidity of the share. The Foundation presently holds 60-65% of the shares.

Interest rate risk at 31 December 2004 (DKK million)
Rate	Under 1 year	1-5 years	Over 5 years	Total	Weighted interest
Financial asset investments	0.0	44.9	2.0	46.9
Liquid funds	126.4	0.0	0.0	126.4
Interest- bearing assets	126.4	44.9	2.0	173.3	2.5%
Mortgages	0.4	1.9	0.5	2.8
Long-term interest-bearing debt	10.2	378.4	0.0	388.6
Interest-bearing short-term debt	662.4	0.0	0.0	626.4
Interest-bearing debt	673.0	380.3	0.5	1,053.8	2.8%
Net position	-546.6	-335.4	1.5	-880.5	2.9%

The Group has chosen to fix interest rates for part of the long-term debt through interest swaps of USD 17 million and EUR 5 million. At 31 December 2004, there was a non-realised loss on these swaps of DKK 0.9 million. In connection with the acquisition of our new head office, a fixed-rate mortgage loan of DKK 200 million will be raised, the proceeds of which will reduce our interest-bearing, short-term debt.

Shareholders’ equity and capital
At 31 December 2004, shareholders’ equity was DKK 651.2 million, or 26.7% of the consolidated balance-sheet total.

Development in consolidated shareholders’ equity
(DKK million)	2003	2004
Shareholders’ equity at 1 January	428	522
Exchange adjustments of subsidiary undertakings	-33	-14
Value adjustment of hedging instruments	43	17
Write-down of own shares	-541	-611
Proceeds from sales of own shares to employees	0	15
Profit for the period	618	716
Other adjustments	7	6
Shareholders’ equity at 31 December	522	651

Group cash flows, financing and cash position
In 2004, cash flows from operating activities amounted to DKK 735 million, which is a slight fall on 2003. The explanation is twofold: an increase in taxes and an increase in working capital in connection with inventories and trade debtors.


Free cash flows excluding acquisitions totalled DKK 369 million, which is lower than estimated at the start of 2004 and is mainly due to the purchase of the new head office property. Adjusted for the purchase of the new property, free cash flows excluding acquisitions amounted to DKK 540 million.

Development in cash flows by main items
(DKK million)	2002	2003	2004
Year’s profit	579	618	716
CFFO	669	754	735
CFFI, excl. acquisitions	-120	-138	-366
Free cash flow	549	616	369
Acquisitions	-7	0	-30
Buyback of own shares	-423	-541	-611
Other financing activities	-84	-156	-77
Year’s net effect	35	-81	-349

Investments
In 2004, net investments in tangible assets excluding acquisitions of businesses and the new property accounted for DKK 140 million, which matched the forecast at the start of the year. In 2005, net investments are estimated to be at a slightly higher level of DKK 160-200 million, owing in part to the continued expansion of production capacity for the new shell technology in the Group’s sales subsidiaries and to investments in new technical measuring equipment in relation to relocation to the new headquarters and development centre at Smørum.

Add to this, the completion, renovation and interior decoration of the new property, which will amount to about DKK 80 million. Overall, investments in tangible fixed assets in 2005 are estimated at DKK 240-280 million. As a consequence of the one-time investments in 2005, our development staff, now housed in new state-of-the-art surroundings, will be geared for continued growth in the years to come.

In 2004, the Group’s investments totalled DKK 404 million, including the purchase of the property at Smørum, financing initiatives relating to customers and the acquisition of intan-gible assets such as patents.

According to its investment policy, the Group normally only acquires properties for manufacturing purposes, but the prop-erty at Smørum was available at an extremely attractive square metre price, making ownership a more favourable option.

The purchase sum, DKK 171 million, will be funded through mortgage credit loans. After renovation and rebuilding to accommodate our wishes and needs, the aggregate price will be DKK 250 million. With an attractive finance market and a scrap value of the property based on the low square metre price, the cost of operating and financing the property will not exceed today’s cost of renting the property at Hellerup – even though the new property has more than twice the floorage space. The property is thus geared for further growth without a corresponding increase in costs.

Balance sheet
The consolidated balance-sheet total rose by 21.1% to DKK 2.4 billion. On the assets side, land and buildings (new head office property) and trade debtors accounted for most of the increase. In 2004, we generally succeeded in keeping the remaining asset items at the level of 31 December 2003, which is very satisfactory. Inventories only rose slightly, despite the many introductions in 2004.

The investment in a new head office property was fully financed through loans via corporate bank credits. In the first quarter of 2005, the major part of these loans are expected to be converted into a fixed-rate long-term mortgage credit loan.

Board of Directors, Management and employees
At the annual general meeting on 25 March 2004, Mr Niels Boserup (chairman) and Mr Nils Smedegaard Andersen were both re-elected. Mr Jørgen Mølvang (deputy chairman) retired due to age. After the general meeting, the Directors appointed Mr Niels Boserup chairman and Mr Lars Nørby Johansen deputy chairman.

At year-end, the Group employed 4,501 staff. The average number of employees throughout the year on a full-time basis was 4,490 against 4,272 in 2003. Denmark had 1,372 employees against 1,250 in 2003.

Revenue per employee amounted to DKK 958,000, or a 5.8% increase on 2003. Growth was 8.8% measured in fixed rates of exchange.

The Directors would like to thank all staff for their professionalism, commitment and diligence, which is key to the Group’s success, and for their dedicated effort throughout the centenary year.

Incentive programmes
At two- or three-year intervals, the Group offers its employees the opportunity to acquire shares at a favourable price depending on salary and seniority conditions. The purchased shares are held in trust for five years.

Again in 2004, we successfully carried through an employee share programme, under which about half the Group’s approximately 4,500 staff chose to buy a total of 174,038 shares at an aggregate price of DKK 15 million. At the time of purchase, the gift element constituted DKK 32 million.

In connection with the centenary in June, 118,950 shares were distributed to Group staff. According to Danish law, these shares will be held in trust for seven years.

Following the distribution of centenary shares and the sale of shares under the employee share programme, 80% of Group employees are now shareholders in the Company.

An agreement has been made with William Demant Holding’s managing director to the effect that for each additional four-year period of employment after 2005, he will be entitled to remuneration equivalent to one year’s pay.

The Company has no share option programmes or similar programmes.

Knowledge resources
The William Demant Holding Group’s mission statement says that the Group must endeavour to expand growth in revenue and profit, and that it must seek innovation through a flexible, knowledge-based organisational structure.

The prerequisite for the Group’s continued competitiveness is extensive audiology know-how and a broad spectrum of competencies such as designing integrated circuits for sophisticated analogue and digital processing of sound signals, developing software for optimum fitting of hearing aids, designing micro-amplifiers and related acoustic systems as well as developing and producing micro-mechanic components. The Group’s R&D activities are described further on page 13 under the heading R&D costs.

The Group’s products are made in collaboration between a wide range of specialists, each with thorough knowledge of their own fields, in-depth understanding of other professional areas and appreciation of the corporate approach. In order to utilise competencies and knowledge across the organisation, substantial resources are channelled into communication and knowledge sharing through a shared IT platform, a high degree of openness, secondment of employees to other Group undertakings and a flat organisational structure.

The Oticon Foundation
In the Annual Report 2003, Management gave an outline of the Oticon Foundation’s investment strategy. In 2004, William Demant Holding A/S and the Oticon Foundation cooperated along the lines of this strategy. The Oticon Foundation specifically invested in the property company Jeudan A/S, which is listed on the Copenhagen Stock Exchange, and in the med-tech company Össur hf., listed on the Islandic Stock Exchange in Reykjavik.

Corporate governance
At the end of 2001, the Nørby Committee submitted a number of recommendations for good corporate governance in Denmark. The Directors discuss corporate governance on an ongoing basis and how to ensure good corporate management relative to the shareholders. The Directors are of the opinion that corporate governance in the William Demant Holding Group lives up to the basic principles expressed in the Committee’s recommendations. Our website, www.demant.com, provides a more detailed review of the Group’s approach to and handling of the principles reflected in the Nørby Committee’s report.

We have chosen to publish quarterly reviews rather than quarterly statements. A quarterly review describes the market situation and provides a general description of the Group’s activities in the past quarter compared with previously announced expectations of revenue and performance. In our opinion, quarterly statements would not promote a better understanding of the Group’s activities. In fact, it is the Group’s conviction that such quarterly statements would only offer very short-term targets for the Group’s development, which might provide a misleading picture, because the Group’s activities in any given quarter will vary considerably from one year to the next.



Prospects for the future
We expect growth in consolidated revenues to continue in 2005, but the fall in exchange rates in the Group’s trading currencies is expected to cut reported revenues by 2%, and revenues in 2005 are therefore estimated at a level of DKK 4.5-4.6 billion. Organic growth is estimated at 6-9%.

The underlying markets for the Group’s products are expected to grow by 3-5%, which compared with the estimated growth requires that the Group continues to gain market shares in 2005.

The expectation is that the substantial progress in the Group’s underlying earnings ability will continue in 2005. In line with the continuously falling rates of exchange of our trading currencies, hedging contracts of currency transactions in 2005 will be made at lower rates than in 2004. Profits or losses in the Group’s foreign undertakings will also be translated at lower rates. The negative impact hereof is estimated at about DKK 30 million from 2004 to 2005.

Despite this adverse trend, the operating profit (EBIT) is expected to grow to between DKK 1,050 million and DKK 1,100 million, which would provide a profit margin of between 23.5% and 24.5%.

Earnings per share are expected to go up by about 10%.

In 2005, competitors are expected to introduce products in the high-end segment, which will entail keener competition for Oticon Syncro. Our forecasts are therefore subject to greater uncertainty than in previous years. Correspondingly, the expected mounting competition in 2005 means that growth in both revenues and earnings will be more intense in the first half-year.

The consolidated financial statements for 2005 will be presented according to international accounting standards (IFRS), and comparative figures for 2004 will be adjusted accordingly. Based on the existing standards, no major changes are anticipated in the profit and loss account, balance sheet and cash flow statement. Expected minor changes are described under accounting_policies.htm.



General meeting
William Demant Holding A/S will hold its annual general meeting on 5 April 2005 at 4 p.m. in Pyramidesalen, Industriens Hus, H.C. Andersens Boulevard 18, DK-1787 Copenhagen V.

The Directors will propose that the year’s profit be transferred to corporate reserves.

At the annual general meeting, the Directors will propose that the share capital be reduced by an amount corresponding to the holding of own shares immediately prior to the date of the general meeting.

At the annual general meeting, Mr Lars Nørby Johansen and Mr Michael Pram Rasmussen will retire from the Board of Directors in accordance with the Company’s Articles of Association. The Directors will recommend that both be re-elected.