Sonova Holding Ag · SIX:SOON
Sonova — H1 2022/23 Earnings Presentation
41 slides from Sonova's earnings presentation, Nov 14, 2022
Slide 1: Half-Year Results 2022/23
Update picture Half-Year Results 2022/23 Arnd Kaldowski, CEO Birgit Conix, CFO Stäfa, November 14, 2022
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements, which offer no guarantee with regard to future performance. These statements are made on the basis of management’s views and assumptions regarding future events and business performance at the time the statements are made. They are su
Slide 3: Sound result considering market challenges
Sound result considering market challenges − Solid sales growth across all businesses despite slower growth in specific higher price markets − Profitability development reflecting market headwinds, FX and expected dilution from first time consolidation of recent acquisitions − Continued focus on inn
Slide 4: Sonova Group
sonova Sonova Group
Slide 5: Sonova Group results: Key highlights HY 2022/23
Sonova Group results Key highlights – HY 2022/23 Sales EPS (adj.) Sales outlook CHF 1,847 m CHF 4.90 per share +15-19% +17.9% in LC +7.0% in LC growth in LC +15.1% in CHF +0.8% in CHF in FY 2022/23 EBITA (adj.) Innovation EBITA (adj.) outlook CHF 398.1 m Phonak Lumity + 6-10% +3.0% in LC Successful
Slide 6: Strategic highlights throughout 1H 2022/23
Strategic highlights throughout 1H 2022/23 Progress of key deliverables − Introduced new Phonak Lumity platform with material improvement in speech understanding Lead − Added new functionalities such as waterproofing and sensor technology to hearing aids innovation − Successfully launched Momentum T
Slide 7: Expanding presence in established and high growth markets
Expanding presence in established and high growth markets Audiological Care – Significant increase in store footprint and consumer access Strengthening existing store network* Investing in in high growth market in China Continued investments in bolt-ons Strong digital position in China − More than C
Slide 8: Lead innovation
Lead innovation Successful launch of new hearing instrument platform Phonak Audéo Lumity Improved speech understanding in challenging hearing situations1,2 Easy to use, rechargeable with new charger 2nd generation of the world’s Universal connectivity to a multitude of Bluetooth first waterproof, re
Slide 9: Sonova Group results: Summary 1H 2022/23
Sonova Group results Summary 1H 2022/23 − Sales of CHF 1,846.6 million up +17.9% in LC (organic: +5.0%), +15.1% in CHF − EBITA (adj.) of CHF 398.1 million, up +3.0% in LC Group − EBITA margin (adj.) of 21.6%, down -320bps in LC – held back by gross profit pressure and expected dilution from M&A − EP
Slide 10: Sonova Group results: Sales components
Sonova Group results Sales components in CHF million OPERATIONAL FX +17.9% 1,891.0 -44.4 1,846.6 207.0 1,603.8 80.2 1H 21/22 Organic M&A 1H 22/23 FX 1H 22/23 Reported net of divestments LC impact Reported YOY growth components +5.0% +12.9% +17.9% -2.8% +15.1% ► Solid organic growth and strong contri
Slide 11: Sales by regions and key markets
Sonova Group results Sales by regions and key markets 1H 2022/23 1H 2021/22 CHF m Δ % in LC % Group sales CHF m % Group sales EMEA 879.8 +14.9% 47% 830.6 52% USA 602.7 +14.2% 33% 499.8 31% Americas (excl. USA) 140.1 +16.1% 8% 116.9 7% Asia / Pacific 224.0 +47.1% 12% 156.6 10% Total Sonova 1,846.6 +1
Slide 12: Hearing Instruments segment
Hearing Instruments segment 12
Slide 13: Hearing Instruments segment: Highlights
Hearing Instruments segment Highlights Sales EBITA (adj.) Segment sales − Solid organic growth considering CHF 1,703m CHF 379m macroeconomic headwinds +19.3% vs. PY in LC +2.0% vs. PY in LC − Successful launch of Phonak Lumity +5.2% organic growth Margin: 22.2% − Strong contribution from the acquisi
Slide 14: Sales dynamics – Hearing Instruments business
Hearing Instruments segment Sales dynamics – Hearing Instruments business HI business sales: CHF 930m +5.3% vs. PY in LC +5.3% organic growth − Development held back by a subdued development in specific higher price markets, incl. the US private market − Successful launch of new Phonak Lumity platfo
Slide 15: Sales dynamics – Audiological Care business
Hearing Instruments segment Sales dynamics – Audiological Care business AC business sales: CHF 640m +17.3% vs. PY in LC +5.1% organic growth − High M&A activity and greenfield openings lifting growth − First time consolidation of Alpaca Audiology adding around 220 POS in the US – integration on trac
Slide 16: Sales dynamics – Consumer Hearing business
Hearing Instruments segment Sales dynamics – Consumer Hearing business CH business sales: CHF 133m − Business performing as expected, supported by new products – delivering YOY growth − Successful launch of the Momentum True Wireless 3 earbuds and Momentum 4 Wireless headphones − Introduced TV Clear
Slide 17: Cochlear Implants segment
Cochlear Implants segment 17
Slide 18: Cochlear Implants segment: Highlights
Cochlear Implants segment Highlights Cochlear implant systems Sales EBITA (adj.) − Momentum held back by supply shortages and CHF 143.5m CHF 19.5m continued hospital staffing challenges +3.0% vs. PY in LC +25.2% vs. PY in LC − Headwind from injunction in DE related to patent dispute – sales restarte
Slide 19: Financial Information
sonova Financial Information = aw |
Slide 20: Sonova Group – Financial highlights
Financial information Sonova Group – Financial highlights − Sales of CHF 1,846.6 million Sales − Growth of +17.9% in LC (organic +5.0%), +15.1% in CHF – significant negative FX impact: CHF -44.4 million (-2.8%) − Sound growth momentum, considering a slower than anticipated market development − Gross
Slide 21: Sonova Group results: Key financials
Sonova Group results Key financials 1H 2022/23 1H2021/22 Δ % in LC Δ % in CHF CHF m CHF m vs. 1H 2021/22 vs. 1H 2021/22 Sales HI segment 1,703.2 1,465.6 +19.3% +16.2% Sales HI business 930.0 890.2 +5.3% +4.5% Sales AC business 640.1 575.4 +17.3% +11.3% Sales CH business 133.0 - n/a n/a Sales CI segm
Slide 22: Sonova Group – EBITA Components
Financial information Sonova Group – EBITA Components in CHF million OPERATIONAL ADJUSTMENTS FX +3.0% 418.5 -6.3 412.3 10.5 406.4 1.6 -20.5 391.8 1H 21/22 Organic M&A 1H 22/23 Adjustments 1H 22/23 FX 1H 22/23 adjusted net of divestments adj. in LC in LC reported in LC reported Margin 25.3% -1.1% -2.
Slide 23: Sonova Group – Key financials – As reported and adjusted
Financial information Sonova Group – Key financials – As reported and adjusted 1H 2022/23 ∆ margin CHF m Margin ∆ % in LC in LC Comments Sales (reported) 1,846.6 +17.9% − Impacted by first-time consolidation effect of lower margin acquisitions Gross profit (adj.) 1,284.4 69.6% +12.3% -350bps − Subdu
Slide 24: Operating expenses excluding acquisition-related amortization
Financial information Sonova Group – Operating expenses excluding acquisition-related amortization 1H 2022/23 1H 2021/22 CHF m ∆ % in LC CHF m Comments Research & development (adj.) -119.2 +3.8% -114.8 − Maintaining high investments in innovation in % of sales 6.5% 7.2% Sales & marketing (adj.) -613
Slide 25: Sonova Group – Operating Free Cash Flow
Financial information Sonova Group – Operating Free Cash Flow in CHF million -45.1% 337.3 -6.1 -2.5 14.2 -65.7 -28.3 -33.2 -30.5 185.3 1H 21/22 Profit before tax Depreciation & Income ∆ NWC Consumer Hearing Other items CAPEX 1H 22/23 OpFCF Amortization taxes paid (other) build-up of trade OpFCF rece
Slide 26: Sonova Group – Balance sheet
Financial information Sonova Group – Balance sheet CHF m 30 Sep 2022 30 Sep 2021 Comments Days sales outstanding (DSO) 51 54 ‒ Continued strong receivable collection Days inventory outstanding (DIO) 148 149 ‒ Reduction from process improvement vs. year end ‒ Impacted by safety stock and product laun
Slide 27: Total shareholder return (TSR) and cash deployment strategy
Financial information Sonova Group – Total shareholder return (TSR) and cash deployment strategy Sonova TSR strategy 1H 2022/23 − Bolt-ons: CHF 70-100 million p.a. − Total M&A cash-out: more than CHF 85 million, 1. Acquisitions − Strategic and technology acquisitions mainly spent for further AC netw
Slide 28: Outlook
Outlook 28
Slide 29: Outlook: Considerations for 2H 2022/23
Outlook Considerations for 2H 2022/23 − Inflationary pressures expected to persist − Consumer sentiment believed to remain muted Hearing Care − Slow start into the period signals expected sequential market slowdown vs. 1H and implies limited market growth in 2H Market − Market momentum subject to hi
Slide 30: Guidance and mid-term target
Outlook Guidance and mid-term target Guidance Mid-term In LC FY 2022/23 Target Sales growth +15% to +19% +6% to +9% p.a. adj. EBITA growth +6% to +10% +7% to +11% p.a. Note: adj. refers to adjusted figures; for details, please refer to Appendix – Non-GAAP adjustments. − Attractive fundamentals of he
Slide 31: sonova
sonova
Slide 32: Thank you!
sonova Thank you!
Slide 33: Appendix
sonova Appendix
Slide 34: Sales by segment and sales components
Appendix Sales by segment and sales components 1H 2022/23 1H 2021/22 CHF m Δ % in CHF Δ % in LC CHF m Δ % in CHF Δ % in LC HI business 930.0 +4.5% +5.3% 890.2 +46.5% +46.2% AC business 640.1 +11.3% +17.3% 575.4 +51.9% +48.0% CH business 133.0 n/a n/a - n/a n/a HI segment 1,703.2 +16.2% +19.3% 1,465.
Slide 35: Business performance – Hearing Instruments segment
Appendix Business performance – Hearing Instruments segment Hearing Instruments business 1H 2022/23 1H 2021/22 CHF m Δ % in CHF Δ % in LC CHF m Δ % in CHF Δ % in LC Sales 930.0 +4.5% +5.3% 890.2 +46.5% +46.2% ∆ organic +46.8 - +5.3% +281.1 - +46.2% ∆ acquisitions +0.8 - +0.1% - - - ∆ disposals -0.4
Slide 36: Non-GAAP adjustments
Appendix Non-GAAP adjustments Adjustments (in CHF m): 1H 2022/23 1H 2021/22 Restructuring +2.8 +7.4 thereof HI segment +2.8 +6.5 thereof CI segment +0.0 +0.9 Transaction and integration costs (Sennheiser Consumer Division, Alpaca Audiology) +2.5 +5.0 Patent litigation +1.0 - Total adjustments to EBI
Slide 37: Key financials – As reported and adjusted
Appendix Key financials – As reported and adjusted 1H 2022/23 Adjustments 1H 2022/23 Restructuring Transaction & Patent in CHF million Reported 1 2 integration costs 3 Total Adjusted costs litigation Sales 1,846.6 - - - - 1,846.6 Cost of sales -563.0 +0.7 - - +0.7 -562.2 Gross profit 1,283.7 +0.7 -
Slide 38: Cash flow statement
Appendix Cash flow statement 1H 2022/23 1H 2021/22 CHF m ∆ % in CHF CHF m Income before taxes 350.5 -0.7% 353.0 Depreciation & amortization 119.0 +13.5% 104.8 Working capital -142.1 +195.4% -48.1 Other cash effects -2.1 -119.8% 10.6 Tax paid -37.3 +19.2% -31.3 Financial result 15.0 -27.5% 20.7 Opera
Slide 39: Sonova Group – FX impact on sales and margins
Appendix Sonova Group – FX impact on sales and margins USD/CHF EUR/CHF Rate Sales EBITA USD/CHF +/- 5% +/- CHF 63 million +/- CHF 17 million EUR/CHF +/- 5% +/- CHF 64 million +/- CHF 24 million 39
Slide 40: Sonova Group – Sales by currency and FX rates
Appendix Sonova Group – Sales by currency and FX rates Effect Spot Other 1H-21/22 1H-22/23 1H-22/22 2H-21/22 FY-21/22 Oct-2022 USD USD 0.91 0.97 + 0.92 0.92 1.00 GBP, CAD, BRL, AUD EUR 1.09 1.00 - 1.05 1.07 0.99 and JPY GBP 1.27 1.17 - 1.24 1.26 1.16 CAD 0.74 0.75 + 0.73 0.73 0.73 EUR AUD 0.69 0.67
Slide 41: Investor relations contacts
Investor relations contacts Thomas Bernhardsgruetter Jessica Grassi Nicole Jenni Senior Director Investor Relations Director Investor Relations Investor Relations Associate +41 58 928 33 44 +41 58 928 33 22 +41 58 928 33 21 +41 79 618 28 07 +41 79 416 28 76 Nicole.Jenni@sonova.com Thomas.Bernhardsgr