Sonova Holding Ag · SIX:SOON
Sonova — H1 2015/16 Earnings Presentation
38 slides from Sonova's earnings presentation, Nov 16, 2015
Slide 1: Half-Year 2015/16 Results
Stäfa, 16 November 2015, Lukas Braunschweiler, CEO & Hartwig Grevener, CFO Half-Year 2015/16 Results
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: Agenda
Agenda 1. Sonova Group 2. Business review – Hearing instruments 3. Business review – Cochlear implants 4 Financial review 1H 2015/16 5. Outlook FY 2015/16 6. Question & Answers 16 November 2015 Page 3
Slide 4: 1. Sonova Group
sonova HEAR THE WORLD 1. Sonova Group
Slide 5: Summary
Summary Sonova Group – 1H 2015/16 1 Hearing instruments: Continued solid sales growth – stable underlying EBITA margin – Sales of CHF 917.8 million up by 8.7% in LC – driven equally by organic growth and acquisitions – EBITA of CHF 198.4 million – margin of 21.6% (recurring in LC 23.3%) 2 Cochlear i
Slide 6: Sales and growth components – YoY
Sonova Group Sales and growth components – YoY OPERATIONAL REPORTED 1100 +4.2% -1.2% +6.7% -5.4% In CHF million 1050 +3.7% +1.3 % 1000 950 1H 14/15 HI HI CI 1H 15/16 FX 1H 15/16 Reported Organic M&A Organic LC impact Reported 16 November 2015 Page 6
Slide 7: Gross profit and growth components – YoY
Sonova Group Gross profit and growth components – YoY OPERATIONAL CHARGES REPORTED 740 +3.2% -1.1% +5.8% -2.3% 720 +3.7% +3.5% -6.4% In CHF million 700 680 -2.9% 660 640 1H 14/15 HI HI CI 1H 15/16 LC W/C 1H 15/16 FX 1H 15/16 Reported Organic M&A Organic operational FX losses LC impact Reported (recu
Slide 8: EBITA and growth components – YoY
Sonova Group EBITA and growth components – YoY OPERATIONAL CHARGES REPORTED 240 +7.5% +0.8% -4.1% 230 +4.2% -3.5% In CHF million 220 +0.7% -10.0% 210 200 -9.3% 190 180 1H 14/15 HI HI CI 1H 15/16 LC W/C 1H 15/16 FX 1H 15/16 Reported Organic M&A Organic operational FX losses LC impact Reported (recurr
Slide 9: Growth components
Sonova Group Growth components Growth contribution in CHF million 1H 2014/15 1H 2015/16 FX impact 1H 2015/16 as reported Organic* Acquisitions @ const. FX as reported Sales 990.2 +25.7 +41.2 1,057.0 -53.8 1,003.2 - Δ % to prior year +4.5% +2.6% +4.2% +6.7% -5.4% +1.3% EBITA 215.9 -0.1 +1.7 217.5 -21
Slide 10: Sales by regions and key markets
Sonova Group Sales by regions and key markets 1H 2014/15 1H 2015/16 in CHF million Sales in % Sales in % Δ % in LC EMEA 427.3 43.2% 418.3 41.7% 9.0% USA 348.7 35.2% 375.5 37.4% 1.9% Americas (excl. USA) 108.3 10.9% 100.0 10.0% 8.2% Asia / Pacific 105.9 10.7% 109.3 10.9% 11.9% Total SONOVA 990.2 100.
Slide 11: Key financials
Sonova Group Key financials in CHF million 1H 2014/15 1H 2015/16 Δ% Δ % in LC Sales 990.2 1,003.2 +1.3% +6.7% Gross profit 680.9 661.3 -2.9% +3.5% - Gross profit margin 68.8% 65.9% OPEX -465.0 -465.5 +0.1% +4.8% EBITA 215.9 195.8 -9.3% +0.7% - EBITA margin 21.8% 19.5% Operating free cash flow 141.6
Slide 12: 1H 2015/16 result vs. FY 2015/16 guidance issued in May 15
Sonova Group 1H 2015/16 result vs. FY 2015/16 guidance issued in May 2015 Sales EBITA OPERATIONAL REPORTED OPERATIONAL CHARGES REPORTED FY sales guidance +7-9% in LC (as of May 2015) FY EBITA guidance +9-13% in LC (as of May 2015) Solid HI performance – Held back by slow start in CI business and FX
Slide 13: FY 2015/16 guidance
Sonova Group FY 2015/16 guidance FY 14/15 1H 15/16 FY 15/16 FY 15/16 Comment Actual Actual Guidance Guidance May 2015 Nov 2015 SALES – growth in LC 6.2% 6.7% 7-9% 6-8% - CI business shortfall thereof acquisitions 1.1% 4.2% ~ 3% ~ 3% FX impact -1.9% -5.4% SALES – growth in CHF 4.3% 1.3% EBITA - growt
Slide 14: Outlook FY 2015/16
Outlook FY 2015/16 Factors impacting 1H performance and considerations for outlook into 2H Driver 1H 2015/16 2H 2015/16 Global market growth Healthy Healthy Market German market growth Subdued Momentum improving FX vs. the Swiss franc Strong headwind Strong headwind Impact from n
Slide 15: 2. Business review – Hearing instruments
2. Business review – Hearing instruments
Slide 16: Hearing instruments business summary 1H 2015/16
Hearing instruments Business summary 1H 2015/16 – Continued solid sales growth – Sales of CHF 917.8 million up by 8.7% in LC – driven equally by organic growth and acquisitions – Double digit growth in Premium segment – Positive market response to Phonak Venture and Unitron North products – Stable u
Slide 17: Hearing instruments EBITA and growth components – YoY
Hearing instruments EBITA and growth components – YoY OPERATIONAL CHARGES REPORTED 240 230 +0.8% +8.6% -3.6% +7.8% +5.0% -9.7% In CHF million 220 210 200 -4.7% 190 180 1H 14/15 Organic M&A 1H 15/16 LC W/C 1H 15/16 FX 1H 15/16 Reported operational FX losses LC impact Reported (recurring) Margin 23.3%
Slide 18: Hearing instruments growth components
Hearing instruments Growth components Growth contribution in CHF million 1H 2014/15 1H 2015/16 FX impact 1H 2015/16 as reported Organic* Acquisitions @ const. FX as reported Sales 892.2 +37.0 +40.8 970.0 -52.1 917.8 - Δ % to prior year +3.0% +4.1% +4.6% +8.7% -5.8% +2.9% EBITA 208.1 +8.8 +1.6 218.5
Slide 19: Hearing instruments sales by product groups
Hearing instruments Sales by product groups in CHF million 1H 2014/15 % Group sales 1H 2015/16 % Group sales Δ % in LC HI Premium 226.7 22.9% 246.8 24.6% 10.6% HI Advanced 204.4 20.6% 199.0 19.8% 3.3% HI Standard 286.8 29.1% 293.1 29.3% 9.5% Wireless communication 38.8 3.9% 43.9 4.4% 21.1% Miscellan
Slide 20: 3. Business review – Cochlear implants
3. Business review – Cochlear implants
Slide 21: Cochlear implants business summary 1H 2015/16
Cochlear implants Business summary 1H 2015/16 – Slower than expected start to the year – Sales of 85.4 million – decline of 11.2% in LC vs. a strong 1H 2014/15 – Challenging comparison to prior year – difficult competitive situation – Continued buyer restraint in the US – following product optimizat
Slide 22: Cochlear implants growth components
Cochlear implants Growth components Growth contribution in CHF million 1H 2014/15 1H 2015/16 FX impact 1H 2015/16 as reported Organic* Acquisitions @ const. FX as reported Sales 98.0 -11.4 +0.4 87.0 -1.7 85.4 - Δ % to prior year +19.6% -11.6% +0.4% -11.2% -1.7% -12.9% EBITA 7.8 -8.9 +0.1 -1.1 -1.5 -
Slide 23: 4. Financial Review
sonova HEAR THE WORLD 4. Financial Review
Slide 24: Financial highlights – 1H 2015/16
Sonova Group Financial highlights – 1H 2015/16 – Sales of CHF 1,003.2 million – driven by solid organic growth of HI business and acquisitions – Gross Profit of CHF 661.3 million or 65.9% of sales – affected by warranty provision, FX and M&A – Reported EBITA margin of 19.5% – FX headwind – impact fr
Slide 25: Key financials
Sonova Group Key financials in CHF million 1H 2014/15 1H 2015/16 Δ% Δ % in LC Sales 990.2 1,003.2 +1.3% +6.7% Gross profit 680.9 661.3 -2.9% +3.5% - Gross profit margin 68.8% 65.9% OPEX -465.0 -465.5 +0.1% +4.8% EBITA 215.9 195.8 -9.3% +0.7% - EBITA margin 21.8% 19.5% Operating free cash flow 141.6
Slide 26: Operating expenses
Sonova Group Operating expenses –inSonova Group - Operating 1H CHF million expenses 2014/15 1H 2015/16 Δ % in CHF Δ % in LC Comments Research & Development -65.3 -65.4 +0.1% +0.2% Continued investment in % of sales 6.6% 6.5% Half of increase from Sales & Marketing -301.6 -313.4 +3.9% +10.0% acquisit
Slide 27: R&D spending
Sonova Group R&D spending in CHF million 1H 2014/15 1H 2015/16 Δ % in CHF Δ % in LC Comments R&D charged to the P&L 65.3 65.4 +0.1% +0.2% Stable spending level in % of sales 6.6% 6.5% Capitalized development costs 11.3 11.6 +3.2% +2.9% CI investment in % of sales 1.1% 1.2% Amortization of developmen
Slide 28: Reported results and income taxes
Sonova Group Reported results and income taxes in CHF million 1H 2014/15 1H 2015/16 Δ % in CHF Comments EBITA 215.9 195.8 -9.3% Acquisition related amortization -12.7 -13.5 +6.2% Operating profit (EBIT) 203.1 182.3 -10.3% in % of sales 20.5% 18.2% Financial result -3.1 -1.0 -68.1% Reduced by one-tim
Slide 29: Cash flow
Sonova Group Cash flow in CHF million 1H 2014/15 1H 2015/16 Δ % in CHF Comments Cash flow before changes in NWC 237.6 197.4 -16.9% (incl. taxes paid) Changes in net working capital -52.9 -11.3 -78.7% Strict working capital control Cash flow from operating activities 184.7 186.1 +0.7% in % of sales 1
Slide 30: Balance sheet
Sonova Group Balance sheet in CHF million 30 Mar 2015 30 Sep 2015 Δ % in CHF Comments Net working capital 181.4 194.1 +7.0% Includes acquisition impact Days sales outstanding (DSO) 67 65 Inventory ramp up ahead of Days inventory outstanding (DIO) 143 148 public holiday at main plant site Capital emp
Slide 31: 5. Outlook
sonova HEAR THE WORLD 5. Outlook
Slide 32: FY 2015/16 guidance
Outlook FY 2015/16 FY 2015/16 guidance FY 14/15 1H 15/16 FY 15/16 FY 15/16 Comment Actual Actual Guidance Guidance May 2015 Nov 2015 SALES – growth in LC 6.2% 6.7% 7-9% 6-8% - CI business shortfall thereof acquisitions 1.1% 4.2% ~ 3% ~ 3% FX impact -1.9% -5.4% SALES – growth in CHF 4.3% 1.3% EBITA -
Slide 33: FX impact on sales and margins
Outlook FY 2015/16 FX impact on sales and margins USD/CHF EUR/CHF Rate Sales EBITA USD/CHF +/- 5% +/- CHF 40 million +/- CHF 13 million EUR/CHF +/- 5% +/- CHF 25 million +/- CHF 13 million USD and EUR account for roughly two thirds of the overall FX exposure 16 November 2015 Page 33
Slide 34: FX rates – Main currencies accounted for around 90% of Group sales
Outlook FY 2015/16 FX rates – Main currencies accounted for around 90% of Group sales Other GBP, CAD, BRL, USD AUD and JPY EUR Avg 1H 2014/15 Avg 1H 2015/16 Effect Avg FY 2014/15 Spot 11-Nov-15 USD 0.90 0.95 0.93 1.00 EUR 1.22 1.06 – 1.18 1.08 GBP 1.51 1.47 – 1.50 1.53 CAD 0.83 0.75 – 0.82 0.76 AU
Slide 35: 6. Questions & Answers
sonova HEAR THE WORLD 6. Questions & Answers
Slide 36: 7. Upcoming Events
sonova HEAR THE WORLD 7. Upcoming Events
Slide 37: Important dates
Sonova Group Important dates 17-25 Nov 2015 Roadshow Half-Year Results 2015/16 April 2016 Investor Call AudiologyNow! 18 May 2016 Publication Full-Year Results 2015/16 Stäfa 19-27 May 2016 Roadshow Full-Year Results 2015/16 14 Jun 2016 Annual General Meeting Zurich 18 Oct 2016 Sonova Investor & Anal
Slide 38: Contacts
Contacts Investor Relations Media Relations Thomas Bernhardsgrütter Michael Isaac Director Investor Relations Head of Media Relations Phone +41 58 928 33 44 Phone +41 58 928 33 24 Mobile +41 79 618 28 07 Mobile +41 79 420 29 56 Email thomas.bernhardsgruetter@sonova.com Email michael.isaac@sonova.com