Sonova Holding Ag · SIX:SOON
Sonova — H1 2013/14 Earnings Presentation
38 slides from Sonova's earnings presentation, Nov 18, 2013
Slide 1: Half-Year 2013/14 Results
HALF-YEAR 2013/14 RESULTS Staefa | 18 November 2013 | Lukas Braunschweiler, CEO & Hartwig Grevener, CFO
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. BUSINESS REVIEW 1H 2013/14 LUKAS BRAUNSCHWEILER 2. FINANCIAL REVIEW 1H 2013/14 HARTWIG GREVENER 3. OUTLOOK FY 2013/14 LUKAS BRAUNSCHWEILER 4. Q&A LUKAS BRAUNSCHWEILER 5. UPCOMING EVENTS 18 November 2013 Page 3
Slide 4: 1. Business Review 1H 2013/14
1. BUSINESS REVIEW 1H 2013/14
Slide 5: Highlights Half-Year 2013/14
HIGHLIGHTS HALF-YEAR 2013/14 Sonova Group – Sales of CHF 947.8 million Solid sales growth of 8.6% in Swiss francs or 10.4% in LC Strong contribution from organic growth of 9.6% in LC Growth from acquisitions 0.8% Sonova Group – EBITA of CHF 206.2 million EBITA increase of 13.0% in LC E
Slide 6: Sonova Group: Performance History
SONOVA GROUP PERFORMANCE HISTORY – STRONG FINANCIAL TRACK RECORD SALES EBITA EBITA in CHF million in CHF million margin in % 1H 2H 2'000 450 45% 1'800 400 40% 1'600 350 35% 1'400 300 30% 1'200 250 25% 1'000 200 20% 800 600 150 15% 400 100 10% 200 50 5% 0 0 0% 08/09 09/10 10/11 11/12 12/13 13/14 08/0
Slide 7: Clear and Focused Strategy – Customer Driven Innovation
SONOVA GROUP CLEAR AND FOCUSED STRATEGY – CUSTOMER DRIVEN INNOVATION SONOVA: «HEAR THE WORLD» Key to our success - Our customers and our employees Broadest product and service offering / portfolio - Hearing instruments (Phonak, Unitron) - Cochlear implants (Advanced Bionics) - Professional services
Slide 8: Balanced Portfolio of Profitable Growth Businesses
SONOVA GROUP BALANCED PORTFOLIO OF PROFITABLE GROWTH BUSINESSES SONOVA Group HEARING INSTRUMENT (HI) IMPLANT (CI) Segment Segment HI HI HI CI PHONAK UNITRON RETAIL ADVANCED BIONICS Business Business Business Business 18 November 2013 Page 8
Slide 9: Phonak: Completing the Range of Solutions on Quest
PHONAK COMPLETING THE RANGE OF SOLUTIONS ON QUEST BTE Custom RIC Power Pediatric Premium Bolero Q90 Virto Q90 Audéo Q90 Naída Q90 Sky Q90 Advanced Bolero Q70 Virto Q70 Audéo Q70 Naída Q70 Sky Q70 Standard Bolero Q50 Virto Q50 Audéo Q50 Naída Q50 Sky Q50 Essential Bolero Q30 Virto Q30 Audéo Q30 Naída
Slide 10: Roger – Digital Adaptive Wireless Technology at 2.4 GHz
PHONAK ROGER - FIRST TO USE DIGITAL ADAPTIVE WIRELESS TECHNOLOGY AT 2.4 GHZ Transmitter 2.4 GHz Receiver pick-up & receive & transmit hand-over TV Cell Phone Voice Music Hearing Aid CI OVERCOMING THE CHALLENGES OF NOISE AND DISTANCE 18 November 2013 Page 10
Slide 11: Unitron: Next Generation Products on Era Platform
UNITRON NEXT GENERATION OF PRODUCTS ON THE ERA PLATFORM BTE Custom RIC Power Flex Trial & Upgrade Premium Quantum Pro Quantum Pro Moxi Pro Quantum² 20 Quantum² 20 Moxi² 20 Max 20 Advanced Quantum² 16 Quantum² 16 Moxi² 16 Any Performance Level Standard Quantum² 10 Quantum² 10 Moxi² 10 Max 6 Essential
Slide 12: Connect Hearing: Boots/DOHC Shop-in-Shop Approach
CONNECT HEARING BOOTS/DOHC SHOP-IN-SHOP APPROACH – CONTINUED STRONG DEVELOPMENT Based on a market-leading concept established ten years ago Number of locations in the UK: Around 370 today – up from 64 ten years ago Value proposition: professional audiological services at attractive locations
Slide 13: Connect Hearing: US Retail – Further Integration
CONNECT HEARING US RETAIL – FURTHER INTEGRATION Roll out of modern consistent store design and branding approach Centralization of administration Harmonization of business systems Broadening of lead generation services to support own retail as well as wholesale customers e-marketing/call c
Slide 14: Advanced Bionics: Unprecedented Number of New Products
ADVANCED BIONICS UNPRECEDENTED NUMBER OF NEW PRODUCTS IN THE LAST 12 MONTHS Implants Electrodes Sound Processors HiRes 90K Advantage HiFocus Mid-Scala Naída CI HiRes 90K HiFocus 1j Neptune HiFocus Helix Harmony BTE EXPANDING RANGE OF INNOVATIVE PROCESSORS, IMPLANTS AND ELECTRODES 18 November 2013 Pa
Slide 15: 2. Financial Review
sonova gee ‘es a 2. FINANCIAL REVIEW
Slide 16: Financial Highlights
HALF-YEAR 2013/14 FINANCIAL HIGHLIGHTS – Solid sales growth +10.4% in LC and 8.6% in CHF – both segments exceeding estimated market growth – Gross profit margin of 68.5%, down 30 bps due to segment mix and FX – EBITA margin increased by 40 bps to 21.8% – R&D spending at CHF 70.4 million or 7.4% of s
Slide 17: Sonova Group – Key Financials
HALF-YEAR 2013/14 SONOVA GROUP – KEY FINANCIALS in CHF million 1H 2012/13 1H 2013/14 Δ% Δ % in LC Sales 872.4 947.8 8.6% 10.4% Gross profit 600.5 649.2 8.1% 9.8% - Gross profit margin 68.8% 68.5% OPEX -414.1 -443.0 7.0% 8.4% EBITA 186.4 206.2 10.6% 13.0% - EBITA margin 21.4% 21.8% Operating free cas
Slide 18: Group Sales – Growth Components
HALF-YEAR 2013/14 GROUP SALES – GROWTH COMPONENTS in CHF million 1H 2013/14 Growth Contribution Growth in LC 91.0 10.4% - Thereof organic 84.0 9.6% - Thereof acquisitions 7.0 0.8% Currency effect -15.6 -1.8% Growth in CHF 75.3 8.6% ACCELERATION OF SALES DRIVEN BY ORGANIC GROWTH 18 November 2013 Page
Slide 19: Group Sales – Regions and Key Markets
HALF-YEAR 2013/14 GROUP SALES – REGIONS AND KEY MARKETS 1H 2012/13 1H 2013/14 in CHF million Sales in % Sales in % Δ % in LC EMEA 331.6 38.0% 361.7 38.1% 8.3% USA 338.9 38.9% 368.2 38.9% 10.1% Americas (excl. USA) 114.2 13.1% 116.9 12.3% 8.0% Asia / Pacific 87.7 10.0% 101.0 10.7% 22.9% Total SONOVA
Slide 20: Group Sales – Product Groups
HALF-YEAR 2013/14 GROUP SALES – PRODUCT GROUPS in CHF million 1H 2012/13 in % of total 1H 2013/14 in % of total Δ % in LC HI Premium 192.1 22.0% 220.6 23.3% 16.2% HI Advanced 211.5 24.2% 215.9 22.8% 3.8% HI Standard 239.8 27.5% 268.6 28.3% 14.6% Wireless communication 31.3 3.6% 30.9 3.3% 0.5% Miscel
Slide 21: Hearing Instruments – Performance History
HALF-YEAR 2013/14 HEARING INSTRUMENTS – PERFORMANCE HISTORY SALES EBITA EBITA in CHF million in CHF million margin in % 1H 2H 2'000 450 45% 1'800 400 40% 1'600 350 35% 1'400 300 30% 1'200 250 25% 1'000 200 20% 800 600 150 15% 400 100 10% 200 50 5% 0 0 0% 08/09 09/10 10/11 11/12 12/13 13/14 08/09 09/
Slide 22: Cochlear Implants – Performance History
HALF-YEAR 2013/14 COCHLEAR IMPLANTS – PERFORMANCE HISTORY SALES EBITA EBITA in CHF million in CHF million margin in % 1H 2H 200 10 10% 175 0 0% 150 -10 -10% 125 -20 -20% 100 -30 -30% 75 -40 -40% 50 -50 -50% 25 -60 -60% 0 -70 -70% 08/09 09/10 10/11 11/12 12/13 13/14 08/09 09/10 10/11 11/12 12/13 13/1
Slide 23: Sonova Group – EBITA Development
HALF-YEAR 2013/14 SONOVA GROUP – EBITA DEVELOPMENT +19.8 +10.6% +24.3 +13.0% +0.7 210.7 -4.5 206.2 186.4 +23.6 Avg FX 1H 12/13 1H 13/14 Rates Margin: USD 0.95 0.94 21.9% EUR 1.20 1.23 Margin: Margin: 21.4% 21.8% GBP 1.50 1.45 JPY (100) 1.20 0.95 BRL 0.48 0.43 AUD 0.97 0.89 CAD 0.95 0.91 EBITA Organi
Slide 24: Sonova Group – Operating Expenses
HALF-YEAR 2013/14 SONOVA GROUP – OPERATING EXPENSES in CHF million 1H 2012/13 1H 2013/14 Δ % in CHF Δ % in LC Comments Research & Development -56.7 -59.4 4.9% 5.3% in % of sales 6.5% 6.3% Sales & Marketing -266.6 -290.0 8.8% 10.5% Intense product launch activity in % of sales 30.6% 30.6% General & A
Slide 25: Sonova Group – R&D Spending
HALF-YEAR 2013/14 SONOVA GROUP – R&D SPENDING in CHF million 1H 2012/13 1H 2013/14 Δ % in CHF Δ % in LC Comments R&D charged to the P&L 56.7 59.4 4.9% 5.3% in % of sales 6.5% 6.3% Capitalized development Investments to sustain high 15.4 14.0 costs pace of innovation in CI in % of sales 1.8% 1.5% Amo
Slide 26: Reported Results and Income Taxes
HALF-YEAR 2013/14 SONOVA GROUP – REPORTED RESULTS AND INCOME TAXES in CHF million 1H 2012/13 1H 2013/14 Δ % in CHF Comments Adverse FX impact of CHF 4.5 million reduces EBITA 186.4 206.2 10.6% margin by 10 basis points Acquisition related -12.6 -12.9 2.4% amortization Operating profit (EBIT) 173.8 1
Slide 27: Sonova Group – Solid Free Cash Flow
HALF-YEAR 2013/14 SONOVA GROUP – SOLID FREE CASH FLOW in CHF million 1H 2012/13 1H 2013/14 Δ % in CHF Comments Cash flow before changes in NWC 218.5 260.2 19.1% Changes in net working capital and Movements in receivables, other -51.4 -68.6 33.6% payables, accruals and provisions taxes paid Operating
Slide 28: Sonova Group – Balance Sheet
HALF-YEAR 2013/14 SONOVA GROUP – BALANCE SHEET in CHF million 31 Mar 2013 30 Sep 2013 Δ % in CHF Comments Net working capital 187.1 184.8 -1.2% Continuous efforts to manage Days sales outstanding (DSO) 71 67 -5.6% receivables Continuous efforts to manage Days inventory outstanding (DIO) 148 140 -5.4
Slide 29: Update on Vendor B Recall – Status as of November 2013
HALF-YEAR 2013/14 UPDATE ON VENDOR B RECALL – STATUS AS OF 1 NOVEMBER 2013 – Advanced Bionics signed settlement agreements in October 2013 – Agreements cover the majority of current product liability claims related to cochlear implant malfunctions, including the case Sadler vs. Advanced Bionics – Ca
Slide 30: 3. Outlook
sonova 3. OUTLOOK
Slide 31: FY 2013/14 Guidance – Update
OUTLOOK FY 2013/14 GUIDANCE – UPDATE Old New Actual guidance Actual guidance FY 2012/13 FY 2013/14 1H 2013/14 FY 2013/14 (as of 21 May 2013) (as of 18 Nov 2013) Sales Sales growth in LC 7.4% 6%-8% 10.4% 8%-10% thereof acquisition related growth 2.2% approx. 1% 0.8% approx. 1% FX-impact 3.4% n/a -1.8
Slide 32: Guidance – FX Impact on Sales and Margins
OUTLOOK FY 2013/14 GUIDANCE – FX IMPACT ON SALES AND MARGINS USD/CHF EUR/CHF Rate Sales EBITA USD/CHF +/- 5% +/- CHF 38 million +/- CHF 11 million EUR/CHF +/- 5% +/- CHF 24 million +/- CHF 12 million 18 November 2013 Page 32
Slide 33: FX Rates – Main Currencies
OUTLOOK FX RATES – MAIN CURRENCIES Avg 1H Avg FY Avg 1H Spot Effect 12/13 12/13 13/14 15-Nov-13 USD 0.95 0.94 0.94 0.92 - EUR 1.20 1.21 1.23 1.23 + GBP 1.50 1.48 1.45 1.48 - JPY 100 1.20 1.14 0.95 0.92 - Effects have added up to a noticeable BRL 0.48 0.47 0.43 0.40 - adverse impact in 1H AUD 0.97 0.
Slide 34: 4. Questions & Answers
sonova gee ‘ie. Bs 4. QUESTIONS & ANSWERS
Slide 35: 5. Upcoming Events
sonova gee ‘es a 5. UPCOMING EVENTS
Slide 36: Important Upcoming Events
SONOVA GROUP IMPORTANT UPCOMING EVENTS Date Event Location 26-29 Mar 2014 Audiology NOW! Congress 2014 Orlando, USA 20 May 2014 Analyst Meeting FY 2013/14 results Stäfa, Switzerland 17 Jun 2014 Annual General Meeting Zurich, Switzerland 17 Sep 2014 Investor & Analyst Day 2014 TBD 18 November 2013 Pa
Slide 37: Investor Relations
SONOVA GROUP INVESTOR RELATIONS Thomas Bernhardsgrütter Phone +41 58 928 33 44 Mobile +41 79 618 28 07 Email [email protected] Corinne Hofmann Phone +41 58 928 33 22 Email [email protected] MEDIA RELATIONS Michael Isaac Phone +41 58 928 33 24 Mobile +41 79 420 29 56 Email
Slide 38: Thank You Very Much
sonova HEAR THE WORLD THANK YOU VERY MUCH