Sonova Holding Ag · SIX:SOON
Sonova — FY2021/22 Earnings Presentation
43 slides from Sonova's earnings presentation, May 17, 2022
Slide 1: Full-Year Results 2021/22
Full-Year Results 2021/22 Arnd Kaldowski, CEO Birgit Conix, CFO Thomas Bernhardsgrütter, IR Stäfa, May 17, 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: Building on our strategy and delivering solid results
Building on our strategy and delivering solid results − Further market recovery, despite some unforeseen headwinds from COVID-19 and supply chain − Positive sales momentum supported by continued innovations and good commercial execution − Solid growth in in HI sales, reflecting significant AC networ
Slide 4: Sonova Group
Sonova Group 4
Slide 5: Sonova Group results: Key highlights FY 2021/22
Sonova Group results Key highlights – FY 2021/22 Sales EPS (adj.) Sales outlook CHF 3,364m CHF 10.76 per share +17-21% +29.0% in LC +39.6% in CHF growth in LC (2y CAGR: : +9.7% in LC) (2y CAGR: +27.4% in LC) in FY 2022/23 EBITA (adj.) Consumer access EBITA (adj.) outlook CHF 844.4m Significant expan
Slide 6: Sonova's strategy
Sonova’s strategy Strategic pillars Lead innovation in audiological performance & consumer experience Leverage M&A Expand consumer access to accelerate growth through omni-channel strategically Audiological Care network and Consumer Hearing business Continuous process Extend reach through improvemen
Slide 7: The Sonova Group
The Sonova Group Broadest and most advanced offering of hearing care solutions Hearing Instruments segment Cochlear Implants segment Hearing Instruments Audiological Care Consumer Hearing Cochlear Implants Note: Use of Sennheiser brand under license from Sennheiser electronic GmbH & Co. KG 7
Slide 8: Lead innovation
Lead innovation New Phonak Paradise launches announced in April 2022 Phonak Slim Phonak Audéo Fit Universal connectivity Unrivaled* sound quality1 Unique left and right design Universal connectivity Unrivaled* sound quality1 Rechargeable Health Data Tracking − Heart rate Rechargeable − Steps − Activ
Slide 9: Expand omni-channel AC network
Expand omni-channel AC network Network expansion through bolt-on M&A and greenfield expansion Systematic approach to: Increase store density Optimize the store footprint Enter new growth markets Balance sheet investments: M&A Greenfield P&L investments: Higher spending for bolt-ons Expansion w
Slide 10: ESG highlights
ESG highlights Overview of selected tangible achievements highlighting progress towards our ESG commitments Environmental Social Governance ► Achieved carbon neutrality in our own ► Implemented global employee health & ► Conducted Sonova’s first pilot human operations (Scope 1 and 2 CO2e emissions)
Slide 11: Sonova Group results: Summary FY 2021/22
Sonova Group results Summary FY 2021/22 − Sales of CHF 3,363.9 million up +29.0% in LC (organic: +26.6%, 2y CAGR: +9.7%), +29.3% in CHF − EBITA (adj.) of CHF 844.4 million, up +39.3% in LC – held back by higher sourcing, lead generation costs and CI amortization Group − EBITA margin (adj.) of 25.1%,
Slide 12: Sonova Group results: Key financials
Sonova Group results Key financials FY2021/22 Δ % in LC Δ % in LC 2y CAGR CHF m vs. FY 2020/21 vs. FY2019/20 in LC Sales HI segment 3,084.0 +27.2% +19.8% +9.4% Sales HI business 1,838.4 +25.4% +19.8% +9.5% Sales AC business 1,236.8 +29.1% +18.9% +9.0% Sales CH business 8.8 n/a n/a n/a Sales CI segme
Slide 13: Sonova Group results: Sales components
Sonova Group results Sales components in CHF million OPERATIONAL FX +29.0% 3,355.7 3,363.9 62.4 8.2 691.4 2,601.9 FY 20/21 Organic M&A FY 21/22 FX FY 21/22 Reported net of divestments LC impact Reported YoY growth components +26.6% +2.4% +29.0% +0.3% +29.3% 2-year CAGR +8.4% +1.3% +9.7% -2.3% +7.4%
Slide 14: Sales by regions and key markets
Sonova Group results Sales by regions and key markets FY 2021/22 2H 2021/22 1H 2021/22 CHF m Δ % in LC CHF m Δ % in LC CHF m Δ % in LC EMEA 1,775.9 +25.4% 945.3 +14.6% 830.6 +41.3% USA 1,009.8 +38.6% 510.0 +16.3% 499.8 +70.3% Americas (excl. USA) 244.6 +32.7% 127.7 +16.4% 116.9 +56.9% Asia / Pacific
Slide 15: Key financials – Half-year view
Sonova Group results Key financials – Half-year view CHF m FY 2021/22 Δ % in LC 2H 2021/22 Δ % in LC 1H 2021/22 Δ % in LC Sales 3,363.9 +29.0% 1,760.1 +15.4% 1,603.8 +48.5% Gross profit (adj.) 2,463.7 +30.6% 1,280.5 +13.0% 1,183.1 +57.6% - Gross profit margin (adj.) 73.2% 72.8% 73.8% OPEX (adj.) 1,6
Slide 16: Hearing Instruments Segment
Hearing Instruments Segment 16
Slide 17: Hearing Instruments segment: Key financials
Hearing Instruments segment Key financials Sales EBITA (adj.) Segment sales − Strong organic growth further supported by CHF 3,084m CHF 807m accelerated M&A activity +27.2% vs. PY in LC +30.2% vs. PY in LC − Ongoing market recovery despite some residual headwinds from COVID-19 pandemic +9.4% 2y CAGR
Slide 18: Sales dynamics – HI business
Hearing Instruments segment Sales dynamics – HI business HI business sales: CHF 1,838m +25.4% vs. PY in LC +9.5% 2y CAGR in LC +25.5% organic growth − Sustained momentum of Phonak Paradise – building on the success with further line extensions − Successful launch of Unitron BLU platform − Further pr
Slide 19: Sales dynamics – AC business
Hearing Instruments segment Sales dynamics – AC business AC business sales: CHF 1,237m +29.1% vs. PY in LC +9.0% 2y CAGR in LC +23.4% organic growth − Continued investments in omni-channel strategy − Further enhancement of digital systems and competencies − Accelerated acquisition activity and highe
Slide 20: Sales dynamics – CH business
Hearing Instruments segment Sales dynamics – CH business CH business sales: CHF 9m − Successful closing of the acquisition of Sennheiser Consumer Division on March 1, 2022 − Adding new growth vector by combining complementary strengths to reach consumers earlier in their hearing journey − Broadening
Slide 21: Cochlear Implants segment
Cochlear Implants segment 21
Slide 22: Cochlear Implants segment: Key financials
Cochlear Implants segment Key financials Cochlear implant systems Sales EBITA (adj.) − Pick-up of elective surgeries at the start of the year CHF 279.9m CHF 36.8m − Held back by supply shortages and rising infection rates leading to hospital staffing shortages in 2H +51.7% vs. PY in LC Margin 13.2%
Slide 23: Financial Information
sonova Financial Information ~+e 23
Slide 24: Sonova Group – Financial highlights
Financial information Sonova Group – Financial highlights − Sales of CHF 3,363.9 million Sales − Growth of +29.0% in LC (organic +26.6%), +29.3% in CHF (favorable FX impact: CHF +8.2 million) − Supported by low comparison figures and ongoing recovery, despite residual challenges from the pandemic −
Slide 25: Sonova Group – EBITA Components
Financial information Sonova Group – EBITA Components in CHF million OPERATIONAL ADJUSTMENTS FX +39.3% 839.8 -6.5 -41.6 798.2 802.9 4.7 243.3 603.0 FY 20/21 Organic M&A FY 21/22 Adjustments FY 21/22 FX FY 21/22 adjusted net of divestments adj. in LC in LC reported in LC reported Margin 23.2% +2.5% -
Slide 26: Key financials – As reported and adjusted
Financial information Sonova Group – Key financials – As reported and adjusted FY 2021/22 Δ margin 2y CAGR CHF m Margin ∆ % in LC in LC in LC Comments Sales 3,363.9 +29.0% +9.7% Gross profit (adj.) 2,463.7 73.2% +30.6% +90bps +10.8% ‒ Continuous improvement, partly offset by sourcing & freight costs
Slide 27: Operating expenses excluding acquisition-related amortization
Financial information Sonova Group – Operating expenses excluding acquisition-related amortization FY 2021/22 FY 2020/21 2y CAGR CHF m Δ % in LC in LC CHF m Comments Research & Development (adj.) -229.4 +28.7% +19.3% -177.9 ‒ Targeted step up in new technology investments in % of sales 6.8% 6.8% ‒ C
Slide 28: Key financials – As reported and adjusted
Financial information Key financials – As reported and adjusted FY 2021/22 Adjustments FY 2021/22 in CHF million Reported 1 Restructuring 2 Strategic M&A 3 Legal 4 Other Total Adjusted Sales 3,363.9 - - - - - 3.363.9 Cost of sales -903.3 3.0 - - - 3.0 -900.3 Gross profit 2,460.7 3.0 - - - 3.0 2,463.
Slide 29: Sonova Group – Operating Free Cash Flow
Financial information Sonova Group – Operating Free Cash Flow +26.8% in CHF million 763.7 32.9 -17.4 -11.6 29.7 Improvement 127.7 despite higher 602.4 Affected by timing safety stock of tax payments FY 20/21 Profit before tax Depreciation & Amortization Income Δ NWC & CAPEX FY 21/22 OpFCF taxes paid
Slide 30: Sonova Group – Balance sheet
Financial information Sonova Group – Balance sheet CHF m 31 Mar 2022 31 Mar 2021 Comments Days sales outstanding (DSO) 52 56 ‒ Continued strong receivable collection Days inventory outstanding (DIO) 171 154 ‒ Targeted stock increases to counter supply chain risks Capital employed 3,439.1 2,855.7 ‒ H
Slide 31: Total shareholder return and cash deployment strategy
Financial information Sonova Group – Total shareholder return (TSR) and cash deployment strategy Sonova TSR strategy − Total M&A cash-out: around CHF 600 million − Bolt-ons: CHF 70-100 million p.a. 1. Acquisitions spent for AC network expansion and acquisition − Strategic and technology acquisitions
Slide 32: Outlook
Outlook 32
Slide 33: Outlook: Re-iterating guidance and mid-term target
Outlook Re-iterating guidance and mid-term target Guidance Mid-term In LC FY 2022/23 Target Sales growth +17% to +21% +6% to +9% p.a. adj. EBITA growth +12% to +18% +7% to +11% p.a. Assumptions for FY 2022/23 − Guidance includes further market normalization absent any additional headwinds from suppl
Slide 34: Underlying assumptions
Underlying assumptions Initial consolidation effect: Acquisition of Sennheiser Consumer Division and Alpaca Audiology Attractive mid-term prospects +17-21% − Elevating the Group’s growth profile through additional +11-12% sales contribution from newly acquired businesses Net Sales +6-9% operating in
Slide 35: sonova
sonova
Slide 36: Thank you!
sonova Thank you!
Slide 37: Appendix
sonova Appendix
Slide 38: Sales by segment and sales components – Half-year view
Appendix Sales by segment and sales components – Half-year view FY 2021/22 2H 2021/22 1H 2021/22 CHF m Δ % in CHF Δ % in LC CHF m Δ % in CHF Δ % in LC CHF m Δ % in CHF Δ % in LC HI business 1,838.4 +25.6% +25.4% 948.2 +10.8% +10.6% 890.2 +46.5% +46.2% AC business 1,236.8 +29.7% +29.1% 661.4 +15.1% +
Slide 39: Business performance – Hearing Instruments segment
Appendix Business performance – Hearing Instruments segment Hearing Instruments business FY 2021/22 2H 2021/22 1H 2021/22 CHF m Δ % in CHF Δ % in LC CHF m Δ % in CHF Δ % in LC CHF m Δ % in CHF Δ % in LC Sales 1,838.4 +25.6% +25.4% 948.2 +10.8% +10.6% 890.2 +46.5% +46.2% Δ organic +372.7 +25.5% +91.5
Slide 40: Non-GAAP adjustments
Appendix Non-GAAP adjustments 2021/22 2020/21 Adjustments for (in CHF m): FY 2H 1H FY 2H 1H Restructuring +13.5 +6.1 +7.4 +38.8 +16.9 +21.9 thereof HI segment +12.9 +6.4 +6.5 +36.5 +15.7 +20.8 thereof CI segment +0.6 -0.3 +0.9 +2.3 +1.2 +1.1 Patent infringement lawsuit -124.4 -25.4 -99.0 Transaction
Slide 41: Cash flow statement
Appendix Cash flow statement FY 2021/22 FY 2020/21 CHF m ∆ % in CHF CHF m Income before taxes 728.2 +21.3% 600.4 Depreciation & amortization 211.1 -5.2% 222.7 Working Capital -18.9 -54.2% -41.3 Other cash effects 32.6 -14.0% 37.9 Tax paid -46.7 -38.9% -76.3 Financial result 34.9 +66.1% 21.0 Operatin
Slide 42: 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 64 million +/- CHF 20 million EUR/CHF +/- 5% +/- CHF 70 million +/- CHF 29 million 42
Slide 43: Sonova Group – Sales by currency and FX rates
Appendix Sonova Group – Sales by currency and FX rates Effect Spot Other FY-20/21 1H-21/22 2H-21/22 FY-21/22 FY-21/22 May-2022 USD USD 0.92 0.91 0.92 0.92 = 1.00 GBP, CAD, BRL, AUD EUR 1.08 1.09 1.05 1.07 - 1.04 and JPY GBP 1.21 1.27 1.24 1.26 + 1.23 CAD 0.70 0.74 0.73 0.73 + 0.77 EUR AUD 0.66 0.69