Sonova’s sales growth for this fiscal year may be less than half its mid-term target, the world’s biggest hearing aid maker said on Tuesday, partly because of the impact of U.S. disposals and restructuring.
Sonova, ($SONVY) facing heightened competition from smaller rivals Widex and Sivantos following their merger this month, expects 2018/2019 sales to increase 2 to 4 percent, with earnings before interest, taxes and amortization increasing 6 to 9 percent, both in local currencies.
That is behind its mid-term goal of 5-7 percent sales growth and an EBITA increase of 7-11 percent.
Sonova is in the process of selling its EPIC hearing managed care provider in the United States, which has nearly $50 million in sales, giving up revenue in the short term for a long-term supply agreement. Sonova did not name the buyer.
A continuing shake up of its U.S. store network will also to weigh on top-line growth, the company said.
Sonova is adding new functions to its hearing aids that fit with its new SWORD 2.4 gHz microchip, which allows hearing aids to connect to devices such as mobile phones. But this will only happen towards the end of the calendar year.
“It will then contribute to a quarter worth of growth, but not more,” Chief Executive Arnd Kaldowski said in an interview after the company released its full-year 2017/18 results.
Kaldowski, who recently took over from Lukas Braunschweiler, is having to navigate a changing landscape where rivals are not standing still.
With their merger to create the third biggest hearing aid company behind Sonova and Denmark’s William Demant WDH.CO), Widex and Sivantos said last week they planned to invest more in digital devices that the industry hopes will appeal to tech-savvy consumers who are reaching the age when they might need hearing aids.
Balance in Reuters