Sonova Holding AG · SIX:SOON
Sonova — H1 2008/09 Earnings Presentation
38 slides from Sonova's earnings presentation, Nov 11, 2008
Slide 1: Half-Year Results 2008/09
Half-Year Results 2008/09 0 Valentin Chapero, CEO Oliver Walker, CFO November 11, 2008
Slide 2: Disclaimer
Disclaimer This presentation may contain forward-looking statements including, but not limited to, projections of future performance of products, financial conditions, results of operations and cash flows. The statements are made on the basis of management’s views and assumptions regarding future ev
Slide 3: Media and Analysts Meeting
Media and Analysts Meeting Business Report Half-Year Results 2008/09 Dr. Valentin Chapero, Chief Executive Officer November 11, 2008 · Slide 3
Slide 4: Growth in a demanding market environment
Growth in a demanding market environment * excluding one-off costs for the prohibited acquisition of the GN ReSound Group – Sales growth of 8.8% in local currencies, thereof 7.4% organic and 1.4% from acquisitions – Strong negative currency effects of CHF 48.8 million or -8.2% on sales level – Gross
Slide 5: Sustainable innovation strategy remains key
Sustainable innovation strategy remains key Products launched in the last 24 months generated 64% of total sales 35% 36% Launched one year ago Launched two years ago Launched more than two years ago 29% Key elements innovation strategy: – Improve hearing performance (better speech intelligibility) –
Slide 6: Market share gains in all major markets
Market share gains in all major markets Sales distribution by main markets H1 2008/09 (H1 2007/08) Sales growth y-o-y <1% (1%) in % and l.c. 10% (9%) Americas 9.8% Europe 6.0% Asia/Pacific 17.3% 41% (40%) Others (10.2%) 49% (50%) November 11, 2008 · Slide 6
Slide 7: Global hearing instrument market growth in H1 2008/09
Global hearing instrument market growth in H1 2008/09 UK: 0% UK private market: -3.2% UK NHS: +0.8% Germany: +5.1% Japan: -1.2% Spain: -8.0% China: ~+25% Italy: +8.0% USA: -0.2% France: +10.8% USA private market: -1.8% USA VA: +9.3% Australia: +4.7% New Zealand: ~0% We estimate overall global hearin
Slide 8: Sales growth of 8.8% in local currencies
Sales growth of 8.8% in local currencies Organic growth +7.4% External growth +1.4% FX impact -8.2% Total growth +0.6% Consolidated sales + 0.6% (in millions of CHF) H1 2007/08 596.3 H1 2008/09 600.0 0 100 200 300 400 500 600 Growth based primarily on: – Dynamic performance of all brands; Unitron gr
Slide 9: High profitability, despite strong negative currency effects
High profitability, despite strong negative currency effects * excluding one-off costs for the prohibited acquisition of the GN ReSound Group EBITA -0.8% (in millions of CHF) H1 2007/08* 160.2 EBITA margin* 26.9% H1 2008/09 158.9 EBITA margin 26.5% 0 50 100 150 0% 10% 20% 30% FX impact on EBITA marg
Slide 10: EUHA 2008
EUHA 2008 Phonak and Unitron Hearing introduced four newly developed and highly innovative product families which deliver unique benefits to endusers and fitters alike: Versáta Certéna 360 iSense …. plus a small step into a new product category….. November 11, 2008 · Slide 10
Slide 11: Audéo Perfect Fit Earphones (PFE)
Audéo Perfect Fit Earphones (PFE) Great sound. Perfect fit. Designed for you. With Audéo PFE we expand our offer of hearing related products leveraging our technological competencies – Perfect fit for perfect sound: – perfect ergonomics combined with outstanding design – Three different sizes of sil
Slide 12: The complete CORE based product portfolio
The complete CORE based product portfolio November 11, 2008 · Slide 12
Slide 13: CORE Platform - Reminder
CORE Platform - Reminder Communication Optimized Real-audio Engine CORE - The most sophisticated audio-processing platform in the industry – Highest Capacity – 6 processors with over 8 million transistors – Fastest – Performs over 120 million calculations per second – Broadband wireless – Supports f
Slide 14: Versáta
Versáta Life in motion. Enjoy the dynamic world of sound. Versáta is the premium choice in the mid-price segment and offers: – SoundFlow Advanced for seamless, automatic adaptation to every soundscape – High-end performance – Full wireless connectivity – A wide range of models: from the ultra-small
Slide 15: Certéna
Certéna Confidence in life. Proven technology you can truly count on. Certéna is the entry level product family of the CORE Collection and guarantees: – A proven value for price-sensitive customers – Reliable audiological performance – Freedom from feedback due to WhistleBlock Technology – the indus
Slide 16: The CORE Collection
The CORE Collection The most comprehensive wireless hearing system portfolio A solution for every hearing loss, lifestyle, personal preference and budget Special solutions for those with high frequency sloping and moderately-severe to profound hearing loss November 11, 2008 · Slide 16
Slide 17: Unitron Hearing launches 360
Unitron Hearing launches 360TM Power. Uncompromised. 360 the truly innovative super power hearing instrument: – Offers advanced features for people with severe to profound hearing loss; e.g. Speech Enhancement SP – Adaptive technology to detect speech and apply up to 8dB of amplification – Fits hear
Slide 18: Sonova Group product portfolio
Sonova Group product portfolio The most competitive in the industry First Class Phonak products Exélia Unitron products Business Class Savia Art Audéo IX Versáta microPower IX Economy Class Eleva Audéo V Certéna Naída UP/SP V Basic eXtra microPower V Audéo III Una Yuu Naída UP/SP III Indigo microPow
Slide 19: Media and Analysts Meeting
Media and Analysts Meeting Facts & Figures Half-Year Results 2008/09 Oliver Walker, Chief Financial Officer November 11, 2008 · Slide 19
Slide 20: Financial highlights
Financial highlights – Continuous margin improvements at constant currencies – Economies of scale – Steady expansion of the proportion of value added generated in our Asian production facilities – Savings in material costs – Efficiencies in back-office related business processes – Increase in capita
Slide 21: Consistent financial performance
Consistent financial performance Despite strong negative currency effects * excluding one-off costs for the prohibited acquisition of the GN ReSound Group in millions of CHF H1 2008/09 H1 2007/08 Notes - Organic growth of +7.4% in l.c. Sales 600.0 596.3 - BC/EC main drivers - Negative FX impact (-8.
Slide 22: FX impact on P&L
FX impact on P&L FX impact At constant in millions of CHF As reported* Absolute in % currencies** Sales 600.0 48.8 8.2% 648.8 Gross Profit 414.6 37.1 8.9% 451.7 in % of sales 69.1% 69.6% EBITA 158.9 23.3 14.6% 182.2 in % of sales 26.5% 28.1% * Average rates H1 2008/09 ** Average rates H1 2007/08 Sig
Slide 23: Sales development analysis
Sales development analysis in millions of CHF Predominantly unit Various small Mainly due to weak USD and growth driven acquisitions in all to a smaller extent EUR, GBP major regions and CAD 1.4% -8.2% 7.4% +9 +44 -49 +8.8% +53 596 600 +0.6% +4 Sales Organic External FX effect Sales H1 2007/08 growt
Slide 24: Share of sales by product groups
Share of sales by product groups Change in % y-o-y H1 2008/09 H1 2007/08 in millions of CHF in local currencies (in % of sales) (in % of sales) First Class 169 180 + 2.7% (28%) (30%) Business Class 127 122 + 12.9% (21%) (21%) 174 168 Economy Class + 10.6% (29%) (28%) 44 41 Wireless Comm. + 16.5% (7%
Slide 25: Gross profit development analysis
Gross profit development analysis in millions of CHF Stable prices, Savings in Gross profit margin: positive intra- and procurement, higher H1 2008/09: 69.1% negative inter- value added from H1 2008/09: 69.6% const. FX segment effect Asian manufacturing H1 2007/08: 68.4% +7 +3 -37 +34 415 +10.8% 408
Slide 26: Investment in key success factors
Investment in key success factors Operating expenses analysis Change Change in millions of CHF H1 08/09 H2 07/08 H1 07/08 in CHF in l.c. Notes - Internal growth + 7.4% Sales 600.0 608.5 596.3 +0.6% +8.8% - External growth +1.4% - FX effect -8.2% - Continuous investments R&D 38.8 35.4 41.1 -5.6% -4.7
Slide 27: EBITA development analysis
EBITA development analysis * excluding one-off costs for the prohibited acquisition of the GN ReSound Group in millions of CHF Gross Profit -37 Opex +14 +7 FX effect -23 +3 -22 +34 -23 +13.8% 160 +22 159 -0.8% -1 EBITA Volume Sales prices & Efficiencies, Increase of FX EBITA H1 2007/08* growth produ
Slide 28: Solid balance sheet
Solid balance sheet Key figures balance sheet in millions of CHF H1 2008/09 FY 2007/08 H1 2007/08 Notes Net working capital 14.6% 9.0% 7.9% - Increase in inventories in% of sales (annualized) - Decrease of payables - Increase in NWC Capital employed 61.3% 50.4% 50.0% - Strategic expansion in % of sa
Slide 29: Capital employed analysis
Capital employed analysis Variance Variance in other in millions of CHF 31.03.2008 in NWC capital employed 30.09.2008 Capital employed 607 71 58 736 as reported Product launches -12 -12 Strategic expansion -30 -30 New building -5 -5 Timing difference -14 -14 FX -16 -20 -36 Subtotal -42 -55 -97 Norma
Slide 30: Cash flow analysis
Cash flow analysis in millions of CHF H1 2008/09 H1 2007/08 H2 2007/08 Cash flow before changes in 178.1 178.0 217.8 net working capital Changes in net working capital -76.5 -28.1 -64.0 Operating cash flow 101.6 149.9 153.8 in % of sales 16.9% 25.1% 25.3% Cash flow from investing -60.8 -44.8 -39.6 a
Slide 31: Share buy-back program
Share buy-back program Number of shares in % Shares outstanding as of April 1, 2007 67,125,144 100.0% Shares created 461,753 +0.7% Treasury shares (incl. share buy-back of 2,054,500) -2,284,887 -3.4% whereof shares cancelled -1,395,000 -2.1% Shares outstanding ex treasury as of September 30, 2008 65
Slide 32: Development of FX rates
Development of FX rates Average rates Variance vs. Spot rates end Variance vs. H1 07/08 H2 07/08 April 08 H1 08/09 H1 07/08 of Oct 08 H2 07/08 CAD 1.13 1.12 1.00 1.02 -9.2% 0.94 -15.4% EUR 1.65 1.63 1.59 1.61 -2.2% 1.48 -8.9% GBP 2.42 2.23 2.00 2.03 -16.4% 1.87 -16.0% USD 1.21 1.11 1.01 1.05 -13.1%
Slide 33: Outlook
Media and Analysts Meeting Outlook Dr. Valentin Chapero, Chief Executive Officer November 11, 2008 · Slide 33
Slide 34: Sales outlook FY 2008/09
Sales outlook FY 2008/09 Sonova is in a strong competitive position – Most innovative and diversified product portfolio in the industry – Strong performing Unitron Hearing due to Next and new 360 product lines – Versáta and Certéna will boost Phonak sales in business and economy class segments – Aud
Slide 35: Audéo YES
Audéo YES More Hearing – Brilliant Design – CORE Performance Audéo YES - the smallest wireless external receiver device in the world – More Hearing with SoundRecover – Wide fitting range with standard and power CRT receivers – CORE Technology (best features, best performance & fully wireless) – Smal
Slide 36: EBITA outlook FY 2008/09
EBITA outlook FY 2008/09 Moderate decrease of EBITA margin – Savings in purchasing – Cost savings and efficiencies in manufacturing, logistics and back-office related Opex-functions overcompensated by – Adverse development of FX rates – Lower operational leverage due to lower growth dynamics EBITA m
Slide 37: Significant growth potential in hearing instrument market
Significant growth potential in hearing instrument market – Whole hearing system industry in an early development cycle – Very low penetration rate at around 20% – Demographic trends will accelerate market growth rates (e.g. baby boomers) – Higher prevalence driven by modern lifestyle – Improving ad
Slide 38: Questions & Answers
Questions & Answers sonova PIONEERS IN HEARING