Medical technology Sonova hopes for momentum in the second half of the year
Hearing aid manufacturer Sonova stabilized as expected in the first half of the 2024/25 financial year. However, profitability suffered from temporarily higher costs. New products should now provide momentum in the second half of the year.
19.11.2024, 07:34
19.11.2024, 07:46
SDA
Specifically, the company from Stäfa in Zurich, known for its Phonak brand, increased sales by 4.6 percent to 1.83 billion Swiss francs in the first half of 2024/25 (as at the end of September), as Sonova announced on Tuesday. Adjusted operating profit (EBITA), however, fell by 7.1 percent to 325.2 million Swiss francs (-3.7% in local currencies). The corresponding margin fell to 17.7 percent (previous year: 20.0%).
The bottom line was a net profit of 211.7 million Swiss francs (previous year 249.6 million). Sonova exceeded analysts' expectations (AWP consensus) in terms of sales, but fell well short in terms of profitability.
Broken down by product group, the hearing aid segment (device sales and operation of retail stores) contributed a total of 1.69 billion to sales (+5.4% in local currencies). Sonova achieved sales of 147.6 million (+13% in local currencies) with cochlear implants. Sales of Sennheiser brand headphones amounted to 116.7 million (-1.7% in local currencies).
Profitability suffers from one-off costs
However, it was already clear that profitability would come under pressure. The company had to bear high marketing expenses and product launch costs for the new hearing aid platform. There were also additional costs for measures to optimize operating structures, including the construction of a new factory in Mexico.
However, the effort seems to have paid off. The hearing aid manufacturer has made a successful market launch with the introduction of its new AI-based hearing aid platforms Infinio and Sphere Infinio.
As the company announced in a separate presentation, the Phonak brand increased its market share in the US commercial segment by around 5 percentage points in the first two months following the launch. However, the impact of the market launch on the half-year figures is still small.
Outlook confirmed
However, Sonova expects a significant increase in profitability in the second half of the year, driven by stronger sales growth, higher average selling prices and significantly lower product launch costs, according to the statement. For the full year 2024/25, Sonova therefore continues to target consolidated sales growth of 6 to 9 percent and adjusted EBITA growth of 7 to 11 percent.
This is also in line with the Group's medium-term targets. Taking into account the exchange rates as of the beginning of November 2024, Sonova expects a negative impact of 1-2 percentage points on reported sales growth in Swiss francs for the 2024/25 financial year. The second half of the year should therefore be significantly more dynamic than the first half due to the good market launch of the new hearing aids.
"The extremely positive customer response to these new platforms indicates a positive development and increasing momentum, which provides a solid basis for significant sales growth in the second half of the year," CEO Arnd Kaldowski was quoted as saying in the press release. Sonova also recently signed a new contract with the wholesaler Costco in the USA. This is of great importance as, according to analysts, around 15 percent of hearing aids in the country are sold through this chain of stores.
