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Research Tree provides access to ongoing research coverage, media content and regulatory news on WILLIAM DEMANT HOLDING. We currently have 5 research reports from 1 professional analysts.
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WILLIAM DEMANT HOLDING
WILLIAM DEMANT HOLDING
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 - Small-cap quantitative research - Momentum screen refresh + 10 focus stocks
12 Jan 17
We have refreshed our momentum style screen for the first time since inception on 26 July 2016. As before, the screen selects the 25 stocks exhibiting the most extreme momentum characteristics, according to our measurement method. From these we have selected 10 to focus on. Since inception the screen has underperformed both the main small-cap and micro-cap indices against a background of generally rising momentum. We have noted a subset of the basket, where decelerating momentum at the time of measurement appears correlated with significant share price falls since selection. We shall monitor this factor with the new screen, albeit there are only two such stocks showing this pattern, namely Lamprell (not rated) and Gear4music (not rated).
N+1 Singer - Morning Song 12-01-2017
12 Jan 17
As anticipated, the second half has again been stronger than H1 and results will be broadly in line with expectations. In line with this, the order book has continued to grow and is at record levels. This confirms that significant progress has been made in the Group’s shift towards its Technology Products division which, as targeted, contributed c.60% of group revenue in FY16. The small acquisition of Cable Power also gives a complementary boost to the product range. It is also worth noting the significant reduction in net debt, £1.0m ahead of our forecast. We remain supportive of the Group’s strategy and continue to see a bright future as this transition towards a design led technology solutions business continues. We look forward to more detail in March at the final results.
N+1 Singer - Best Ideas 2017 - Top picks
04 Jan 17
Today we publish our Best Ideas for 2017 - 12 stocks that we believe have excellent prospects in the current year together with a detailed discussion of what we see as the key sector and market themes for 2017. Our top picks are Cineworld, Elementis, Herald Investment Trust, Hill & Smith, IQE, MySale, Redde, ReNeuron, RhythmOne, SDL, Servelec and Severfield.
The Monthly January 2017
09 Jan 17
Despite all the hullaballoo of the Brexit vote and the subsequent election of Donald Trump as the next US President, the UK stock market prospered last year, especially in the latter few months of 2016. The combination of a depreciating currency – making $ earnings more valuable in relative terms - and the Trump emphasis on infrastructure expenditure drove the stock market higher
11 Jan 17
Joules Group (JOU): Strong festive trading (BUY) | Shoe Zone (SHOE): Tough FY16 could be just the beginning (HOLD) | H&T (HAT): Alternative lender emerging (BUY) | Omega Diagnostics* (ODX): ISO accreditation received for Pune, India (CORP) | Redcentric* (RCN): Interims – restoring forecasts (CORP)
N+1 Singer - Vectura Group - Pre-close update: trading in line with expectations
11 Jan 17
Vectura’s pre-close statement represents an encouraging update on progress since the interims in November. Flutiform® supply chain volumes have been at record levels, Ultibro® continues to perform strongly, and a first product (iloprost) has been approved in Europe for delivery using Vectura’s handheld FOX® smart nebuliser. Revenues for 2016 are expected to in line with the Board’s expectations. We continue to expect an FDA approval decision for VR315 (generic Advair®) by 10th May 2017 and retain our Buy recommendation with a 202p target price.