Sonova has upgraded its mid-term sales guidance on the back of sustained market recovery across key geographies and the introduction of newer and upgraded offerings. Although, the EBITA increase guidance remained unchanged. More importantly, this optimism has been reinforced despite the brewing Delta variant risks. Add on top the high-growth potential from the Sennheiser consumer division, and the firm’s sustained technological leadership in the core hearing aids business, Sonova seems attractiv
Companies: Sonova Holding AG
FY20/21 ended on a high with all segments and regions returning to growth in H2 – momentum was led by the strong market recovery and the successful launch of Paradise. The profitability beat was also encouraging as the group’s structural optimisation initiatives have borne fruit. Given that pent-up demand needs to be satisfied and new demand is also emerging as vaccination gathers momentum, management has shared a promising outlook for FY21/22. Re-initiation of the share buy-back programme is th
The H1 20/21 beat was driven by a strong market rebound, robust commercial execution and the successful launch of Paradise. The hearing aid wholesale business fared better than retail, though cochlear implant was a drag. Geographically, Asia-Pacific led the recovery with positive sales growth in Q2. Importantly, group sales were up in a high single-digit in September and, despite headwinds from the newly-imposed lockdowns, management has reiterated its full-year guidance on the back of the bette
Sonova has reiterated its mid-term growth strategy and financial targets. On the hearing aid wholesale side, the recovery has been faster than expected and the new product launch, Paradise, will be backed by robust commercial execution. On the retail side, store network optimisation and the omni-channel strategy will be at the forefront. The group will also focus on process improvements to generate cost savings. However, the recovery in the cochlear implants segment has been slow.
Benefiting from a faster than expected improvement in the hearing aids marketplace – the elderly population was more comfortable in going back to retail stores than anticipated – Sonova has upgraded its outlook for H1 20/21. Good reception of its recently-launched product, Paradise, also played a part. Assuming no further major lockdowns and sturdy demand for Paradise, Sonova expects to return to growth in H2 20/21. With the market stabilising, Danish rivals Demant and GN Store Nord should also
With the gradual re-opening of the markets, Sonova’s sales run-rate reached 59% (in Q1) vs. 35% in April 2020. The recovery was faster than expected and management has guided for a 65-75% sales run-rate and single-digit EBITA margin for H1 20/21. Interestingly, Sonova has accelerated its structural optimisation measures – streamlining of the retail network and optimisation of non-customer facing functions could lower the headcount by 4-5% – and these initiatives have the potential to generate an
H2 was better than expectations, led by a sturdy show in wholesale, though retail and cochlear implants lost pace due to the ongoing pandemic. Higher volumes and ASPs bolstered EBITA, though these were partly offset by an increase in the allowance for bad debts. To ensure adequate liquidity, the share buy-back programme has been suspended and management has proposed a stock dividend. Given that Sonova’s sales run-rate for April 2020 was better than Demant’s, it could be a key beneficiary when ec
Sales momentum accelerated significantly in H1, led by broad-based growth across businesses. While wholesale benefited from the success of Marvel, the momentum in cochlear implants was driven by the MRI-compatible implant. Retail was fuelled by effective lead generation management and in-store execution, leading to the financial guidance upgrade for FY19/20. Nonetheless, higher than expected R&D and sales and marketing expenses and a new restructuring charge took away some of the sheen.
After a slow start, organic sales growth accelerated significantly in H2, led by the successful introduction of the next-gen MFA product, Marvel. Geographically, Europe was the principal growth contributor which overshadowed a weak show in the US. Profits also witnessed a substantial increase, benefiting from higher volumes, favourable ASPs and supply chain optimisation. For FY18/19, organic revenue growth came in at the higher end of the guidance range and profits were in line with expectations
CVS, one of the largest healthcare and pharmacy chains in the US, has announced the closure of all of its hearing centres in the US. With the over-the-counter/OTC hearing aids regulation set to become law in 2020, the requirement of hearing loss testing and support care would be done away with and thus there would be no need for an audiologist in the new set-up, the company said. Also, as lower-priced products would dominate the market, dedicating space in stores to audiologists won’t make much
Revenues were in line with expectations as a deceleration in sales growth in the hearing instruments wholesale business was offset by a pick-up in momentum in the retail division. However, declining ASPs, resulting from a mature product portfolio and stiff competition, suppressed profitability. With a new product now out in the market, ASP’s should improve and thus bolster the top-line as well as profitability in the second half of the year.
Impacted by challenging market conditions in the US wholesale (competition) and retail business (repositioning of stores), Sonova reported FY17/18 organic sales growth (+3.8%) below the mid-term target range of +4-6%. However, as the next-gen SWORD product (launch expected in Q4 18/19) is likely to be a game-changer, we anticipate an acceleration thereafter.
Though the H1 17/18 results were slightly below the street’s estimates, we believe that the launch of the 2.4GHz MFA platform should provide the much needed push to organic growth in the short term and help the company achieve its FY17/18 revenue and profitability targets. However, the mid-term growth prospects hinges upon the success of the next-gen product (likely in FY18/19) which is likely to address the shortcomings of the current product offering (ear-to-ear streaming and rechargeability).
Sonova’s H1 16/17 numbers (slightly below consensus estimates) confirmed continuing sluggishness due to AudioNova’s acquisition and an ageing product cycle. Sales grew at a slower pace of 5.5% in LC (6.7% in CHF) vs. 6.7% in H1 15/16 to CHF1.1bn, albeit slightly better than the 4.8% in H2 15/16. Even this growth primarily (3.5%) came from acquisitions, while the organic number languished at 2% (H1 15/16: 2.6%). On a segmental basis, Hearing Instruments (HI) and Cochlear Implants (CI) grew by 5.4
Sonova completed the acquisition of Europe’s second largest hearing aids retailer AudioNova (Amplifon remains the largest retailer in the hearing aids industry), earlier than expected, in September 2016. Sonova acquired AudioNova from the investment company HAL Trust, pipping the likes of WDM (William Demant) and Sivantos. The acquisition brings >1,300 retail stores spread across eight European countries, further fortifying Sonova’s hold on its distribution channel (as a reminder, with >2,000 re
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Full-year results were in line with the trading update of 21 July, with revenues of £31m (-2%), reflecting the impact of COVID-19 on out-patient procedure rates, resulting in 14% and 24% declines in adjusted EBITDA and pre-tax profit, respectively. Lower than expected procedure growth rates and the decision to discontinue non-core (non-chlorine dioxide products) reduces forecast revenues by c.£3m to £33m in FY 2022. However, higher gross profit and tight control of costs (+6%) results in an unch
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IXICO has provided an upgraded trading statement for FY21E following its previous update in August 2021. Revenues are now expected to be £9.2m (vs £8.7m previously), broadly in line with FY20A, which we see as a strong result given the pandemic and Huntington's Disease (HD) trials de-scope. EBITDA is expected to be materially ahead of FY20A's £1.3m, supported by strong Q4/21 trading, cost control and positive one-offs. The company has ended FY21 with a strong order book (£18.8m) and cash positio
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Synairgen reported interim results to 30 June in which the adjusted net loss was £32.8m with period-end cash of £46.2m. Substantial pre-commercial progress and manufacturing activities have made in the half, although slower country approvals for trial sites will result in Phase III data readout slipping into Q1 2022. With increasing evidence of the need for a broad-spectrum antiviral delivered to the lungs and recognition that vaccines don’t provide complete protection against hospitalisations d
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Today’s prelims are in line with management’s expectations with losses before tax in the period of £30.3m (vs. £29.4m prior year). Post-merger, 4D pharma is clearly a different beast with access to the largest global capital market for Pharma/Biotech, and supported by £25.2m (net) proceeds from corporate activity. The company has cash runway until Q2 2022 and is well placed to successfully execute its clinical development strategy with multiple shots on goal. Primary focus is on MRx0518 with two
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Exactly one year ago, the FTSE 100 closed at 5,862, having fallen 100 points on the day, the lowest point since mid-May 2020, due in part, to the strength of sterling vs US$ at $1.34. One year on, the FTSE 100 has risen to 7,119, a rise of 21%, it remains 7% below the peak in January 2020. From an international viewpoint, US and European markets continue to trade at record highs. The US Federal Reserve is close to withdrawing some of its economic support this year as inflation picks up and the e
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SkinBioTherapeutics has announced it will launch its lead commercial product, AxisBiotix-Ps on World Psoriasis Day, 29 October 2021. To support the launch, the company has begun to receive, and store finished product in the Netherlands (close to its manufacturing partner) ahead of initial launches in the UK and US. Clearly the launch of its first product is a significant step for SkinBioTherapeutics, marking the transition from development company to commercial operation. We are encouraged by th
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ANGLE reported an adjusted net loss of £7.2m (+58% vs. -£3.2m), with establishment revenues increasing 26% to £0.3m and costs rising 48% to £8.9m, reflecting the costs of opening its pharma services business and clinical laboratories in the US and UK. Net cash at 30 June was £21.0m, with a further £18.9m (net) placing proceeds after period-end. Evidence of momentum building within pharma services, backed by confirmation of three contract wins and multiple ongoing discussions (some of which are w
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The current situation in the CDMO arena looks a bit like an arms race and Lonza seems to have firm plans to be part of it. The recently updated mid-term guidance is the explanation to do so, in our view. Management is strongly dedicated to staying with the extraordinary high EBITDA margin for the coming years.
Lonza’s hybrid investors day was well attended in Zurich, in which we participated.
Companies: Lonza Group (LONN:VTX)Lonza Group AG (LONN:SWX)
The positive market research results for Eroxon®, released this morning, provides further support for the company’s ongoing partnering efforts. We continue to believe that MED2002 is a differentiated product with significant potential in both prescription and OTC markets, and look forward to further PK data followed by Phase III start in H1 2018.
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