Slide 1: Full Year Results 2023/24
Full Year Results 2023/24 Arnd Kaldowski, CEO Birgit Conix, CFO Stäfa, May 14, 2024
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: FY 2023/24 Business Review
sonova HEAR THE WORLD FY 2023/24 Business Review al q i i t = 3
Slide 4: Summary FY 2023/24
Summary FY 2023/24 − Hearing care markets back to historical growth rates, despite regional differences − Growth picking up in 2H, with year ending on a positive note − HI and CI business with significant sales acceleration in 2H – AC business posting strong YOY growth − Difficult consumer electroni
Slide 5: Sonova Group results: Key highlights FY 2023/24
Sonova Group results Key highlights – FY 2023/24 Sales EPS (adj.) Sales outlook CHF 3,627 m CHF 10.06 per share +6 - 9% +3.2% in LC +6.4% in LC growth in LC -3.0% in CHF -9.6% in CHF in FY 2024/25 organic growth +1.6% or +3.2% excluding non-renewal of large contract EBITA (adj.) Acceleration HI busi
Slide 6: Sonova Group results: Business summary
Sonova Group results Business summary − Sales of CHF 1,697.7 million – organic growth of +0.7% in LC and +4.0% in LC adjusted for large US contract Hearing − Realized expected acceleration in the second half as temporary challenges were resolved Instruments (HI) − Reliability and customer care signi
Slide 7: Hearing Instruments segment
Hearing Instruments segment Highlights Sales EBITA (adj.) Segment sales − Development supported by improving hearing care CHF 3,348m CHF 736m market – fundamentals back to normal +3.2% vs. PY in LC +4.5% vs. PY in LC − Organic growth accelerating in second half, +1.5% organic growth Margin: 22.0% dr
Slide 8: Hearing Instruments business
Hearing Instruments business Sales dynamics HI business sales: CHF 1,698m +0.7% vs. PY in LC* * +4.0% excl. non-renewal of contract with large US customer − Organic growth accelerated to +6.0% in LC in 2H, development in 1H held back by previous year non-renewal of large contract − Substantial furth
Slide 9: Net promoter score and Lumity repair rates
Hearing Instruments business Net promoter score and Lumity repair rates Net Promoter Score – 3-months rolling Failure rate (Audéo R & RT models) 50 +30% better 45 +19 pts improvement 40 35 +30% better 30 25 20 15 10 5 0 Mar-23 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 Jan-24 Feb
Slide 10: Innovation as driver for meaningful differentiation
Innovation as driver for meaningful differentiation Building on our core competency: improving quality of life for our customers and consumers FY 18/19 FY 23/24 +60% R&D Investments CHF CHF 148m 236m Expansion of processing power & data processing, as well as improved algorithms Future Focus on be
Slide 11: Audiological Care business
Audiological Care business Sales dynamics AC business sales: CHF 1,411m +9.2% vs. PY in LC +4.7% organic growth − Good performance for the year, particularly strong in 1H – high growth in majority of European markets and significant M&A contribution − Lead generation in 2H more challenging despite a
Slide 12: Our first year with HYSOUND
Our first year with HYSOUND Slight wordsmithing China – Gaining direct consumer access in largest high growth country Achievements so far: − More than 200 clinics in China, per store sales well above market thanks to leading service level and productivity − Building on well-established digital marke
Slide 13: Consumer Hearing business
Consumer Hearing business Sales dynamics CH business sales: CHF 240m -9.3% vs. PY in LC − Challenging consumer electronics market − Temporary portfolio gap in important segment due to inconsistent battery performance of a now deselected supplier – MTW4 introduced in February − High comparison base d
Slide 14: Cochlear Implants segment
Cochlear Implants segment Highlights Cochlear implant systems Sales EBITA (adj.) − Positive YOY growth with sales accelerating CHF 278.9m CHF 35.1m to +10.8% in LC in 2H +3.6% vs. PY in LC +3.5% vs. PY in LC − Development supported by improving market − Remote programming capability launched Margin:
Slide 15: Remote programming
Remote programming The audiology clinic in your pocket – saving time for clients and HCPs − Mobile and direct access to HCP – anytime / anywhere − Hardware checks of implant by HCP What − Real-time adjustment of processor functions − Currently only available with Advanced Bionics − On average, 6 rou
Slide 16: ESG highlights
ESG highlights Overview of selected tangible achievements highlighting continued progress towards our ESG commitments Environmental Social Governance ► Reduced greenhouse gas emissions by 28% ► Increased employee engagement score to ► Advanced ESG reporting and external (Scope 1-3) vs. 2019 (on a co
Slide 17: Financial information
sonova HEAR THE WORLD information V7
Slide 18: Financial highlights
Financial highlights Sonova Group − Sales of CHF 3,626.9 million +3.2% in LC and -3.0% in CHF Sales − Significant FX headwinds of CHF -232.9 million (-6.2%) − Organic sales growth of +1.6% in LC for the Group – +3.2% in LC adjusted for non-renewal of large US contract − Gross profit margin (adj.) of
Slide 19: Sales components
Sonova Group results Sales components in CHF million OPERATIONAL FX +3.2% 3,859.7 60.6 3,738.4 60.8 -232.9 3,626.9 FY 22/23 Organic M&A FY 23/24 FX FY 23/24 Reported net of divestments LC impact Reported YOY growth components +1.6% (+3.2% excl. large client) +1.6% +3.2% -6.2% -3.0% 1H 2023/24 growth
Slide 20: Gross margin development
Gross margin development Sonova Group OPERATIONAL FX +210bps − Gross margin (adj.) increased by +210bps in LC 0.0% 72.9% − Margin increase mainly driven by: -0.6% 72.3% − Continued benefit from continuous process improvements − Residual impact from prior year price increases +2.1% − Shift in the bus
Slide 21: Development of operating expenses
Development of operating expenses Sonova Group OPERATIONAL FX +7.2% − Organic OPEX development driven by business mix shift in CHF million 1’934.7 due to higher growth in the AC business and continued +2.3% investments in sales & marketing to drive future sales in LC -4.7% − R&D expenses flat in LC
Slide 22: EBITA Components
EBITA Components Sonova Group in CHF million OPERATIONAL ADJUSTMENTS FX +4.4% 877.5 2.5 34.6 -46.7 840.4 830.8 -103.7 727.0 FY 22/23 Organic M&A FY 23/24 Adjustments FY 23/24 FX FY 23/24 adjusted net of divestments adj. in LC in LC reported in LC reported Margin 22.5% +0.5% -0.3% 22.7% -1.2% 21.5% -
Slide 23: Cash flow development
Cash flow development Sonova Group – Operating Free Cash Flow FX impact: CHF -113m − OpCF before changes in NWC: Driven by lower income 923 before tax due to CHF 113 million adverse FX impact 858 809 − Changes in NWC: Improvement mainly resulting from prior 536 539 year build-up in working capital f
Slide 24: Total shareholder return & cash deployment strategy
Total shareholder return & cash deployment strategy Sonova Group Sonova TSR strategy FY 2023/24 − Bolt-ons: CHF 70-100 million p.a. − Total M&A cash-out: approximately CHF 100 million 1. Acquisitions investment into further AC network expansion − Strategic and technology acquisitions 2. Attractive d
Slide 25: Outlook
Outlook 25
Slide 26: 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 device business Continuous process Extend reach through improvement
Slide 27: Our growth ambition
Our growth ambition Ambition to gain market share through customer-focused growth strategy and strong operational execution Mid-term targets Sonova growth strategy Key focus areas Sales CAGR Executing on our strategic pillars to Targeted growth initiatives in 5 focus areas 6-9% p.a. in LC drive abov
Slide 28: Outlook: Guidance and mid-term target
Outlook Guidance and mid-term target FY 2024/25 market and business assumptions FY 2024/25 expected currency impact (based on May 2024 FX) − Global hearing care market back to normal growth at 4-6% − Sales growth in CHF to be lifted by ~1-2%-pts − Lower market growth for North America expected due t
Slide 29: Save the date: Investor & Analyst Day
Save the date Investor- & Analyst Day Tuesday, August 27 Sonova HQ Stäfa Switzerland ► More details to follow
Slide 30: sonova
sonova HEAR THE Wi jORLD 30
Slide 31: Thank you!
sonova HEAR THE WORLD Thank you!
Slide 32: Appendix
sonova HEART HE WORLD
Slide 33: Sales by regions and key markets
Appendix Sales by regions and key markets FY 2023/24 2H 2023/24 1H 2023/24 CHF m Δ % in LC CHF m Δ % in LC CHF m Δ % in LC EMEA 1,859.0 +3.8% 977.4 +3.0% 881.6 +4.8% USA 1,074.0 +0.7% 543.4 +6.6% 530.7 -4.6% Americas (excl. USA) 264.4 +3.6% 137.9 +8.7% 126.5 -1.2% Asia / Pacific 429.4 +7.1% 215.2 +6
Slide 34: Key financials – Half-year view
Appendix Key financials – Half-year view FY Δ% Δ% 2H Δ% 1H Δ% Δ% CHF m 2023/24 in LC in CHF 2023/24 Δ % in LC in CHF 2023/24 in LC in CHF Sales 3,626.9 +3.2% -3.0% 1,873.9 +4.8% -0.9% 1,753.0 +1.6% -5.1% Gross profit (adj.) 2,621.5 +6.3% -0.9% 1,366.3 +6.8% +0.4% 1,255.2 +5.8% -2.3% - Gross profit m
Slide 35: Expense by category excluding acquisition-related amortization
Appendix Sonova Group – Expense by category excluding acquisition-related amortization FY 2023/24 FY 2022/23 CHF m ∆ % in LC CHF m Comments Research & development (adj.) -236.0 -0.7% -242.9 − Maintained high level of R&D investment at 6.5% of sales in % of sales 6.5% 6.5% Sales & marketing (adj.) -1
Slide 36: Key financials – As reported and adjusted
Appendix Key financials – As reported and adjusted FY 2023/24 Adjustments FY 2023/24 Transaction & Patent / legal in CHF million Reported 1 Restructuring 2 3 4 Tax reform Total Adjusted integration litigation Sales 3,626.9 - - - - - 3,626.9 Cost of sales -1,016.5 +11.1 - - - +11.1 -1,005.4 Gross pro
Slide 37: Non-GAAP adjustments
Appendix Non-GAAP adjustments 2023/24 2022/23 in CHF m FY 2H 1H FY 2H 1H Restructuring +23.7 +13.5 +10.2 +15.6 +12.8 +2.8 thereof HI segment +17.1 +9.9 +7.2 +14.6 +11.8 +2.8 thereof CI segment +6.6 +3.6 +3.0 +1.0 +1.0 +0.0 Transaction and integration costs +10.5 +4.0 +6.5 +17.0 +14.4 +2.5 Patent / l
Slide 38: Balance Sheet
Appendix Balance Sheet CHF m 31 Mar 2024 31 Mar 2023 Comments Days sales outstanding (DSO) 56 54 ‒ Continued solid receivable collection Days inventory outstanding (DIO) 175 154 ‒ Affected by elevated safety stock levels during ramp-up of new operations facility in Mexico and product launches in 4Q
Slide 39: Sales by segment and sales components – Half-year view
Appendix Sales by segment and sales components – Half-year view FY 2023/24 2H 2023/24 1H 2023/24 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 1,697.7 -6.2% +0.7% 873.1 -0.7% +6.0% 824.5 -11.3% -4.3% AC business 1,410.5 +3.9% +9.2% 735.1 +2.4% +7.1% 675
Slide 40: Business performance – Hearing Instruments and Audiological Care
Appendix Business performance – Hearing Instruments and Audiological Care businesses Hearing Instruments business FY 2023/24 2H 2023/24 1H 2023/24 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 1,697.7 -6.2% +0.7% 873.1 -0.7% +6.0% 824.5 -11.3% -4.3% ∆ organic
Slide 41: Business performance – Consumer Hearing and Cochlear Implants
Appendix Business performance – Hearing Instruments and Audiological Care businesses Consumer Hearing business FY 2023/24 2H 2023/24 1H 2023/24 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 239.7 -15.7% -9.3% 119.4 -21.1% -15.9% 120.3 -9.5% -1.9% ∆ organic -2
Slide 42: Cash flow statement
Appendix Cash flow statement FY 2023/24 FY 2022/23 CHF m ∆ % in CHF CHF m Income before taxes 647.3 -9.5% 715.6 Depreciation & amortization 246.2 +2.7% 239.7 Working capital -56.1 -23.9% -73.7 Other cash effects -26.9 +5.1% -25.5 Tax paid -74.6 -14.2% -86.8 Financial result 17.3 +18.4% 14.6 Operatin
Slide 43: 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 65 million +/- CHF 17 million EUR/CHF +/- 5% +/- CHF 70 million +/- CHF 25 million 43
Slide 44: Sales by currency and FX rates
Appendix Sonova Group – Sales by currency and FX rates Effect Spot Other FY-22/23 1H-23/24 2H-23/24 FY-23/24 FY-23/24 May 8 USD USD 0.96 0.89 0.88 0.89 - 0.91 GBP, CAD, EUR 0.99 0.97 0.95 0.96 - 0.98 BRL, AUD and JPY GBP 1.15 1.12 1.10 1.11 - 1.13 CAD 0.72 0.66 0.65 0.66 - 0.66 AUD 0.65 0.59 0.58 0.
Slide 45: Upcoming events
Upcoming events Date Event June 11, 2024 AGM 2024 August 27, 2024 Capital Markets Day October 1 – November 18, 2024 Quiet period November 19, 2024 Publication of Half-Year Results 2024/25 Sonova Financial Calendar Please find the full financial calendar here: https://www.sonova.com/en/financial-cale
Slide 46: 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