Sonova Group (SIX:SOON):
- New sales record: The Sonova Group increased its sales by 18.2% in Swiss francs in the first six months to CHF 709 million
- Market growth significantly exceeded: With 17.5% organic sales growth and 4.3% growth from acquisitions, Sonova further expanded its market share
- Increased profitability: The EBITA margin was increased from 26.5% to 27.3%
- Higher earnings per share: The Group posted a 22.2% increase in earnings per share over the previous year to CHF 2.520
- Top-selling new products: The recently launched Exélia Art, Audéo YES and Passport hearing systems made a significant contribution to sales growth
- Strategic expansion in the cochlear implant business: The Sonova Group announced the planned acquisition of cochlear implant manufacturer Advanced Bionics
- EUHA October 2009: Sonova demonstrated its technological leadership and launched a large number of new, innovative products
Strong sales growth
The Sonova Group achieved sales of CHF 709.2 million in the first half of 2009/10, representing year-on-year sales growth of 18.2% in Swiss francs. Organic sales growth of 17.5% in local currencies was well above the estimated market growth of around 3% in units. Numerous smaller acquisitions in Europe, Asia/Pacific and North America contributed a total of 4.3% to sales growth. Currency effects in the reporting period had a negative impact of -3.6% on Group sales compared to the previous year. This is primarily due to the appreciation of the Swiss franc versus the euro. The positive currency development especially of the US dollar within this period could not offset this effect.
This significant growth enabled the Sonova Group to gain considerable market share. Newly launched products such as Exélia Art, Audéo YES and Passport were able to gain a strong foothold in the market and made a significant contribution to the growth in sales. The successful introduction of the new Phonak and Unitron hearing systems in the first half of 2009/10 is also clearly reflected in the high share of total sales of 86% attributable to products launched in the past two years.
Market share gains in all regions
The individual European markets showed a diverse development. Germany and France, important markets for Sonova, continued to show positive growth. The private market in the UK also recorded an increasing demand. The Sonova Group achieved sales growth of 18.2% in local currencies in the EMEA region (Europe, Middle East and Africa), far outpacing the market. In the Americas and Asia/Pacific, Sonova had strong sales growth in local currencies at 26.3% and 14.7%, respectively – also above-average for these markets.
The market in the US saw a significant recovery and recorded strong growth in the first half of 2009/10. This trend was illustrated by rising sales in the private market, and also by extraordinary high demand from the Department of Veterans Affairs (VA), which provides hearing systems to American veterans. As important supplier to the VA, the Sonova Group was able to benefit from this trend. Overall, in the first half of 2009/10, Sonova achieved an above average growth in local currency in the US.
New products contributed significantly to growth
Sonova’s first class hearing systems saw higher sales in the first half of 2009/10, with 10.8% growth in local currencies. This was primarily driven by high demand for the newly launched products Exélia Art and Audéo YES IX from Phonak and Passport from Unitron. Business and economy class hearing systems grew disproportionately at 37.3% and 30.0%, respectively, in local currencies. Among the key drivers of these segments were Phonak’s product lines Versáta, Certéna, Audéo YES and Naída, as well as the Next hearing systems series from Unitron. Wireless communication systems recorded a 12.1% downturn in sales in local currencies compared to the previous year. Funding from public institutions - important customers in this business - was deferred due to the economic situation. Sales of miscellaneous products and services rose proportionally to total sales.
Increased profitability
Gross profit of CHF 492.4 million was 18.8% above that of the previous year (CHF 414.6 million). The gross profit margin grew from 69.1% in the previous year to 69.4%, despite negative currency effects. This was primarily achieved through scaling effects of strong organic sales growth and increases in efficiency as well as savings in materials procurement. The price-product-mix effect did not have a significant impact on profitability.
In the first half of 2009/10, the Group achieved an operating profit before acquisition-related amortization (EBITA) of CHF 193.7 million, compared with the previous year’s figure of CHF 158.9 million. The EBITA margin increased from 26.5% to 27.3%, mainly due to strong organic growth and effective cost management. Negative currency effects impacted the EBITA margin by around 80 basis points. Operating profit was also adversely affected by one-off costs of CHF 6.4 million incurred by the Sonova Group as part of a previously announced agreement with the German Federal Cartel Office.