Full-year profit rises at Sonova
ZURICH: Swiss hearing aid maker Sonova Holding AG yesterday reported a 3% rise in full-year profit and said a hit to sales in Germany related to its near-$1 billion purchase of retailer AudioNova International BV last year had eased in the second half.
Sonova bought AudioNova last year to expand its network of company-owned retail outlets, but the acquisition prompted a backlash among hearing aid retailers in Germany upset by the addition of a strong manufacturer-owned competitor. The hit to revenue was most pronounced in the first half, but has eased since then.
“We definitely had a stabilisation in Germany,” chief executive Lukas Braunschweiler said in a telephone interview, adding the company has been helped by new products including hearings aids with rechargeable lithium-ion batteries.
Income for the 2016/17 year rose to 356.2 million Swiss francs ($358 million), the company said, up from 345.8 million francs in the previous year.
Sales rose 15.3% to 2.4 billion francs, it said, largely in line with analyst expectations.
For the full year, Europe accounted for 48% of Sonova sales, with Germany a key target market for the company’s retail expansion strategy. The United States made up 33% of sales, with Asia-Pacific at 10%.
Sonova, which sells its hearing aids under brand names such as Phonak, now plans to boost its dividend to 2.30 francs per share, up 9.5%.
“Sonova’s organic growth rate clearly accelerated in the second half,” analysts from Vontobel wrote in a note. “This acceleration was driven by the launch of the rechargeable hearing aids and the launch of the new cochlear implant.”
In the United States, Braunschweiler said Sonova expanded its 45% market share with the US Veterans Administration (VA), the US agency that oversees medical care for former members of the armed services.
A driver for VA demand was the new rechargeable hearing aids, he said.
“Over 10% of total purchases per month
of Veterans Affairs are already related to our rechargeable technology,” Braunschweiler said. “They love it.”
Sonova competes for VA business with rivals including Denmark’s William Demant, which also said this month that it gained market share with the VA.
For the current year, Sonova expects consolidated sales to grow by 10% to 12% and normalised earnings before interest and taxes (EBITA) to rise by 10% to 14%, both measured in local currencies.