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Research Tree provides access to ongoing research coverage, media content and regulatory news on WILLIAM DEMANT HOLDING. We currently have 4 research reports from 1 professional analysts.
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WILLIAM DEMANT HOLDING
WILLIAM DEMANT HOLDING
Strong top line, unimpressive profitability and eyes on Oticon Opn
29 Sep 16
William Demant (WDH) reported mixed H1 16 results with top-line ahead and bottom-line below consensus expectations. Revenue expanded 16% on LC basis (15% reported basis) to DKK5.8bn, reflecting underlying growth of 7%, acquisition-driven growth of 10% and a negative currency impact of 1%. The mainstay, Hearing devices, grew impressively (+17% vs. +10% in H1 15 and +15% in FY 15, reported basis) driven by a strong retail and modest wholesale growth, while diagnostic instruments and hearing implants remained soft (+1% and +5% organically, respectively) due to difficult market conditions. In continuation of past trends, the adjusted operating margin contracted considerably (15.1% vs. 17.1% in H1 15) due to changing cost structures (capacity costs which are a combination of R&D, distribution and administrative costs, inched up c.21%, on an adjusted basis) following increasing retail share. As a result, net attributable profit also tumbled down c.6% to DKK631m (margin down by 2.4ppt to 10.9%). Management has reiterated its overall guidance with EBIT expectations of DKK2-2.3bn (before restructuring expenses) and the share buy-back plan of DKK2.5-3bn over 2014-16 (of which DKK1.93bn purchased until end H1 16).
Satisfactory results; H2 weighs on return expectations
30 May 16
William Demant’s Q1 16 trading update (top-line and profitability figures not disclosed) sounded a cautious note, with the company reporting ‘satisfactory’ revenue growth (not quantified) across its three segments. The core Hearing Devices business recorded strong unit growth (higher than the average market growth rate of 4-5%) but was held back by lower ASPs (which management expects to reverse in H2 16 following the launch of the new Oticon Opn range of products in June 2016). Retail sales remained strong, positively impacted by the acquisition of Audika. However, Hearing Implants and Diagnostics remained soft, reflecting the weakness in the oil-dependent Gulf region (a key market for both segments). Management has maintained its FY 16 outlook for growth across all three segments (aided by an expected 6ppts contribution from acquisitions, primarily Audika) and operating profit of DKK2.0-2.3bn (skewed towards H2 16 due to the launch of Oticon Opn). It also indicated that the DKK2.5-3bn share buy-back (2014-16) would fall in the lower end of the range, following the acquisition of Audika in late 2015. The company also completed a 1:5 stock split on 25 May 2015.
All eyes on the new dual technology platform
27 Apr 16
William Demant’s H2 15 and FY 15 results were broadly in-line with market expectations (top line slightly ahead of expectation but operating profit a marginal miss on consensus). H2 15 revenue was up 17% yoy to DKK5.6bn, primarily driven by the robust organic growth in the wholesale hearing aids business as well as forex benefits. For full year, revenue growth of 14% (to DKK10.7bn, broadly in line with our estimate) was a mix of organic growth of 4ppt, an acquisition contribution of 3ppt and currency benefit of 7ppt. In terms of profitability, the adjusted operating profit was up c.5% to DKK1.8bn, but was slightly lower than our expectation of DKK1.9bn (margin declined c.142bp), mainly on account of higher-than-expected distribution costs (attributable to acquisitions and investments in the Hearing Implants segment). Net income came in at DKK1.4bn (+8%) vs. our estimate of DKK1.5bn. For 2016, management expects a positive growth contribution from all three segments (neutral currency impact and a c.6% contribution from acquisitions made in 2015, mainly Audika) with operating profit guidance in the range of DKK2.0-2.3bn. The company reiterated its share buy-back commitment of DKK2.5-3bn over 2014-16 (of which DKK1.64bn had been spent as on 1 March 2016). The company will host a Capital Markets Day on 7-8 June 2016.
Satisfactory Q3 but read-across on Hearing Implants concerning
10 Dec 15
Following a ‘satisfactory’ H1 15, William Demant continued its steady pace in Q3 (qualitative update devoid of financial details), particularly in its core Hearing aids business which reported organic growth above the market growth rate of c.4-5% (volume growth), driven by the positive reception to its new Inium Sense platform. However, while the retail hearing aids market reported some recovery (particularly in the key market of North America), Diagnostic Instruments and Hearing Implants remained soft – the latter due to the delayed launch of its new cochlear implant system (now expected to be launched in Q4 15). Region-wise, while the US looks to be slowing down, the recovery in the core European markets of UK and Germany more than offset the sluggishness. The company also reported a yoy improvement in the underlying EBIT margin (excluding c.200bp of negative forex and hedging impact), while maintaining its full-year guidance – operating profit of DKK1.8-2bn (including Audika – c.DKK194-216m top-line contribution with negligible impact on profitability). Following the closure of Audika’s acquisition, management has announced that the 2014-16 share buy-back programme would now fall into the lower end of the DKK2.5-3bn range.
30 Nov 16
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N+1 Singer - Morning Song 30-11-2016
30 Nov 16
Sanderson has delivered full year results in line with expectations and the 19 October trading update after a strong finish to the year compensated for a slower start. A healthy level of pre-contracted recurring revenue (50%), incremental sales to existing customers and new customer wins at higher average order values helped deliver solid revenue growth in both the Digital Retail (+9%) and Enterprise (+12%) divisions. A decent order book and good sales momentum suggest that the company is on track to deliver on unchanged profit expectations for the current year. We continue to view the valuation (FY17 EV/EBITDA 8.6x) as undemanding given an attractive combination of accelerating growth potential, strong cash generation and growing dividends.
N+1 Singer - Morning Song 29-11-2016
29 Nov 16
Vp has reported another impressive set of interims, confirming strong growth in most markets and a positive outlook. Recent acquisitions are bedding in well and the full year outturn is set to exceed previous expectations (5%/6% EPS upgrades in FY17/FY18). The recent Capital Markets Day provided a reminder of Vp’s qualities (specialist focus, high returns, strong cash generation) and its growth potential, which in our view are not reflected in a modest <11x P/E rating. We firmly believe the shares are due a re-rating and see intrinsic value in excess of 800p.
Food intolerance driving growth
29 Nov 16
Omega Diagnostics Group has an established core business providing high quality in vitro diagnostic tests within three core areas of competence – Food Intolerance, Allergy & Autoimmune, Infectious Disease – that are sold in over 100 countries. The group offers steady low single-digit growth which is profitable and cash generative. Investment in new products has seen the launch of a new panel of automated allergy tests and progress on Visitect CD4 for monitoring of HIV positive patients. Interim results highlighted the opportunities to accelerate growth of the business, particularly Allersys, which has drawn attention from its partner.
Small Cap Breakfast
29 Nov 16
Asia Pacific Investment Partner - the research-driven emerging and frontier markets real estate development business intends to float on AIM and conduct a placing in December RM Secured Direct Lending - The secured direct lending fund intends to float on the Main Market on 15 December raising up to £100m Diversified Oil & Gas— Schedule One now out. $60m to be raised. Expected admission 6 December. Creo Medical Group —UK based medical device company focused on surgical endoscopy, a recent development in minimally invasive surgery. Admission due 7 December. Fundraising details TBA.