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Research Tree provides access to ongoing research coverage, media content and regulatory news on WILLIAM DEMANT HOLDING. We currently have 6 research reports from 1 professional analysts.
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WILLIAM DEMANT HOLDING
WILLIAM DEMANT HOLDING
Oticon Opn drives ASP recovery while lacklustre volumes are a surprise
10 Mar 17
William Demant (WDH) finished FY 16 on a healthy note with sales in line, while earnings were ahead of our as well as consensus estimates. Revenues expanded 13% (both on a reported and a LC basis) to DKK12bn, consisting of 6% underlying, 7% acquisitive and a less than 1% negative currency impact. With both retail (+8% organically) and wholesale (+6% organically) remaining robust, the lynchpin (c.88% of FY 16 sales) hearing devices expanded 6% organically, at par with GN Store Nord’s hearing division and ahead of the market (1-3% in value terms as per the company’s estimates). The other two smaller segments delivered a mixed performance, with hearing implants growing 7% organically while diagnostic instruments remained sluggish (+1% organically, +3% LC basis,) amid tough market conditions. Adjusted operating profit increased 12% yoy to DKK2,049m, marginally ahead of our expectations, supported by ASP recovery related to Oticon Opn in H2 while the adjusted operating margin remained flat (17.1% vs. 17.2% in FY 15) primarily due to the increased costs associated with retail consolidation (aka the Audika acquisition). Along with the results, the company also announced major management changes – current COO Søren Nielsen appointed President & CEO replacing incumbent President & CEO Niels Jacobsen and board member Niels B Christiansen appointed chairman of the board replacing current chairman Lars Nørby Johansen, effective April 2017. We do not expect any strategic change with the change in guard given that these are internal changes following a natural progression. For FY 17, management is guiding for growth across all three businesses (positive currency and acquisition impact of c.1% each) and EBIT in the range of DKK2.2-2.5bn (before restructuring costs of DKK200m).
Satisfactory growth in hearing aids while implants stumble
14 Jan 17
William Demant’s (WDH) Q3 16 trading update (only qualitative details given) was largely in line with our expectations and devoid of any major positive surprises. WDH reported “satisfactory growth”, driven by Oticon Opn and retail activities across regions. However, the US retail operations continued to stutter due to WDH’s ongoing consolidation efforts along with unsuccessful marketing activities. Moreover, both hearing implants and diagnostic instruments remained soft due to difficult market conditions, although the latter reported better growth in Q3 compared to H1. Given the continued weakness in hearing implants and the US retail activities, management has lowered EBIT guidance: “most likely” to be towards the lower half of the previously guided DKK2.0-2.3bn range. Additionally, management continues to expect growth across all segments while anticipating a limited forex impact and a +6% acquisitive effect on sales. On a ytd basis, WDH has completed share buy-backs worth c.DKK857m under its current share buy-back programme (DKK2.5-3bn for 2014-16).
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.
N+1 Singer - Morning Song 21-03-2017
21 Mar 17
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16 Mar 17
4imprint (FOUR): 6% dividend yield for a growth stock? (BUY) | Cambridge Cognition* (COG): Amgen uses CANTAB technology in trial (CORP) | Seeing Machines* (SEE): H1 results show steady operational progress (CORP) | Allergy Therapeutics (AGY): Pollinex Quattro Birch Ph III EU trial starts (BUY) | Capital Drilling* (CAPD): FY results in line, with turnaround in exploration activity (CORP)
N+1 Singer - EKF Diagnostics - Final results & potential buy back
20 Mar 17
FY16 prelims are slightly ahead of our latest expectations, those having been increased materially over the course of H2’16 as the strength of the recovery in trading became apparent. In order to maximise shareholder value, the directors are currently examining a potential break up of the group. This would also involve a delisting from AIM. A buy back offer at 21.5p would therefore be made to those investors that wish to exit now rather than holding their shares for the two years plus it would likely take to achieve a potentially higher realisation value for the businesses.
N+1 Singer - N1S Trend spotting - Strategy update
08 Mar 17
In this new product we present some strategy theme updates arising out of our latest analysis of macro trends and economic data and our innovative Quant work. We also look at upcoming events and suggest topping up on some of our Best Ideas for 2017.
Good results, but further restructuring complex for investors
20 Mar 17
EKF Diagnostics FY 2016 results are slightly ahead of expectations, with both higher revenue and better EBITDA. Management has also announced plans to split the company into two separate companies, Point of Care and Laboratory Diagnostics, with the prospect of a delisting to manage the process. The primary metric for valuation of the two businesses is different consequently we believe that the separation is likely to generate significant value. However, in anticipation of the volatility likely given the restructuring announced this morning, despite the strength of the results, we reduce our recommendation to HOLD and maintain our 21p target price.
Panmure Morning Note 15-03-2017
15 Mar 17
We expect EKF Diagnostics to announce FY 2016 results on 21st March. EKF has had a transformational year and has released three positive trading updates since the interim results in September. We expect the results to give more granularity on where the improvement has come from enabling us to have more confidence in future growth rates. We maintain our 21p target price and BUY recommendation ahead of the results.