Zurich (awp) – Sonova increased its sales after six months in the 2024/25 financial year, while profitability contracted. The Zurich manufacturer of hearing aids and prostheses, which attributed the decline to higher costs for product launches as well as the strength of the franc, confirms its expectations in the short term.
Over the period under review, ending at the end of September, turnover stood at 1.83 billion Swiss francs, up 4.6% year-on-year, the Stäfa-based company said on Tuesday. Expressed in local currencies, revenues increased by 5.9%. Sonova notes that it has benefited from favorable sales developments in both the hearing aid and cochlear implant segments.
Sonova considers its business development solid in view of weaker than expected growth in the hearing aid market and strong competitive pressure. If the launch of the new Infinio and Sphere Infinio platforms had only a limited impact on sales, “the very positive response from the market” contributed to business growth during the last weeks of the half-year, adds the company. shores of Lake Zurich.
Sonova explains that, as expected, it suffered from additional costs linked to product launches in the hearing aid sector. The strength of the franc also weighed. In addition, additional costs linked to measures to optimize operating structures, among others for the construction of a new factory in Mexico, were added.
Profitability in decline
Broken down by region, revenues increased by 4.5% excluding currency effects in the Europe, Middle East and Africa (EMEA) zone, although the evolution was less good than expected in Germany, in France and the United Kingdom. In the United States, turnover increased by 7.1% in local currencies, with Sonova indicating that it had gained market share.
Revenues in the Americas region (excluding the United States) jumped 11.5% in local currencies, supported by Canada and Brazil. Growth also illustrates acquisitions. In the Asia/Pacific (APAC) region, sales increased by 5.5% in local currencies. Solid growth was recorded in Australia, in particular.
On the profitability side, adjusted operating income before taxes, interest and depreciation (Ebita) fell by 7.1% to 325.2 million Swiss francs. At constant exchange rates, the decline was reduced to 3.7%. The Ebita margin contracted to 17.7%, compared to 20% at the end of September 2023.
Operating income before interest and taxes (Ebit) decreased to 279.2 million Swiss francs, compared to 305.6 million at the end of the first six months of the previous financial year, the corresponding margin falling for its part. at 15.2%, compared to 17.4% a year earlier. The half-year net profit came to 211.7 million, compared to 249.6 million twelve months ago.
Sales above expectations
The performance proved to be higher than analysts’ expectations in terms of turnover, with profitability clearly missing the target. Surveyed by the AWP agency, the experts had on average anticipated a turnover of 1.82 billion Swiss francs and an adjusted Ebita of 342.8 million. The related margin was, however, expected at a higher level, i.e. 19%.
Referring to the rest of the financial year, Sonova specifies that it has a solid basis for accelerating the growth of its sales in the second half. The latter should gain momentum thanks to the good start of sales of new hearing aids. In addition, Sonova recently concluded a new contract with the American retailer Costco, for the sale of Sennheiser brand devices after a testing phase, the group’s boss, Arnd Kaldowski, said in a conference call.
Targeted cost initiatives will also help improve profitability for the remainder of the year and beyond. For the full 2024/25 financial year, Sonova continues to expect revenue growth of between 6 and 9% and an increase of 7% to 11% in adjusted Ebita, in both cases at a rate constant exchange rates.
Investors, for their part, sanctioned a mixed performance. Around 12:30 p.m. on the Swiss Stock Exchange, Sonova shares fell 1.6% to 311.80 Swiss francs, while the SMI benchmark index lost 0.99%.
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