In This Article:
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Revenue: CHF1.8 billion, representing a 5.9% increase in local currencies.
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Organic Growth: 4.5% increase.
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M&A Contributions: 1.4% increase.
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Gross Profit Margin: Improved to 71.9%, up 50 basis points in local currency.
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Adjusted EBITA: CHF325 million at a margin of 17.7%, down 3.7% in local currency.
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EPS: CHF3.74, down 9.6% in local currency.
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Operating Free Cash Flow: CHF104 million, a decline of 30.7%.
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Leverage Ratio: Stable at 1.8 times.
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Hearing Instruments Growth: 7% increase.
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Cochlear Implants Growth: 12.5% increase.
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Consumer Hearing Segment: -1.7% decline.
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Net Debt: Increased by roughly CHF200 million versus year-end position.
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Return on Capital Employed: Declined from 18.9% to 16.7%.
Release Date: November 19, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Sonova Holding AG (SONVF) reported solid sales growth driven by share gains in hearing instruments and cochlear implants.
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The launch of Infinio and Sphere has received positive customer feedback, particularly for improved hearing in noisy environments.
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Cochlear implants showed strong momentum with a 12.5% growth for the first half of the year.
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The company maintained a high gross profit margin of 71.9%, up 50 basis points in local currency from last year.
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Sonova Holding AG (SONVF) confirmed its guidance for the full year on both the top line and bottom line, indicating confidence in future performance.
Negative Points
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Challenging market conditions and headwinds from lead generation in the audiological care side are impacting growth.
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There are pressures on profitability due to product launch costs and lower average selling prices (ASP) prior to new launches.
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The Swiss franc continues to be a headwind, impacting financial performance negatively.
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Operating free cash flow declined by 30.7%, mainly due to profit development and elevated inventory levels.
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The company faces elevated lead generation costs in its Audiological Care business, impacting profitability.
Q & A Highlights
Q: Can you discuss the share loss in Audiological Care and your expectations for the second half? A: Arnd Kaldowski, CEO: The share loss is partly due to our Europe-centric mix and a strong prior year. We had a low lead-generation funnel and existing customers delayed repurchases due to the new platform announcement. We have maintained high lead generation investments and expect to stabilize share in the second half.
Q: What is the status of your relationship with Costco, and what are your expectations? A: Arnd Kaldowski, CEO: We are in a pilot phase with a limited number of Costco stores. The revenue impact is minimal this year, but success could have a meaningful impact next year. Our product and service need to prove themselves in this pilot.