3.2Inventories

The reduction in inventories reflects improved operational efficiency, as well as the classification of the Consumer Hearing business as held for sale as at 31 March 2026 (refer to Note 6.3).

The “cost of sales” corresponding to the carrying value of inventory (which excludes outbound freight, packaging, logistics as well as certain overhead cost) amounted in the 2025/26 financial year to CHF 776.9 million (previous year CHF 782.4 million, restated for discontinued operations). The Group recognized write-downs of CHF 24.9 million (previous year CHF 20.4 million, restated for discontinued operations) on inventories in cost of sales.

Accounting policies

Purchased raw materials, components and finished goods are valued at the lower of cost or net realizable value. To evaluate cost, the standard cost method is applied, which approximates historical cost determined on a first-in first-out basis.

Manufactured finished goods and work-in-process are valued at the lower of production cost or net realizable value. Standard costs take into account normal levels of materials, supplies, labor, efficiency, and capacity utilization. Standard costs are regularly reviewed and, if necessary, revised in the light of current conditions. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion (where applicable) and selling expenses.

Allowances are established for slow moving, phase out and obsolete stock.