Sonova Holding Ag · SIX:SOON
Sonova — FY2013/14 Earnings Presentation
47 slides from Sonova's earnings presentation, May 20, 2014
Slide 1: Full-Year 2013/14 Results
Full-Year 2013/14 Results Stäfa, 20 May 2014, 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 – Sonova Group 2. Business Review – Hearing Instruments 3. Business Review – Cochlear Implants 4. Financial Review 2013/14 5. Outlook FY 2014/15 6. Upcoming Events 20 May 2014 Page 3
Slide 4: Sonova Group: Clear and focused strategy
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 5: 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 20 May 2014 Page 5
Slide 6: 1. Business Review – Sonova Group
1. Business Review – Sonova Group
Slide 7: Business highlights FY 2013/14
Sonova Group Business highlights FY 2013/14 – Strong sales increase, driven by double-digit organic growth – Sales of CHF 1,951.3 million – up 8.7% in Swiss francs and 11.7% in LC – Organic sales growth of 11.0% – driving market share expansion in both segments – Further EBITA growth and margin expa
Slide 8: Key Financials – Variances in CHF
Sonova Group Key Financials – Variances in CHF in CHF million FY 2012/13 ONE-OFF FY 2012/13 FY 2013/14 ∆ % vs. ∆ % vs. REPORTED COST* NORMALIZED REPORTED NORMALIZED Sales 1,795.3 1,795.3 1,951.3 8.7% 8.7% Gross profit 1,239.8 1,239.8 1,340.4 8.1% 8.1% - Gross profit margin 69.1% 69.1% 68.7% OPEX -1,
Slide 9: Key Financials – Variances in CHF
Sonova Group Key Financials – Variances in CHF in CHF million 1H 2013/14 ∆% 2H 2013/14 ∆% FY 2013/14 ∆% Sales 947.8 8.6% 1,003.5 8.7% 1,951.3 8.7% Gross profit 649.2 8.1% 691.2 8.1% 1,340.4 8.1% - Gross profit margin 68.5% 68.9% 68.7% OPEX -443.0 7.0% -467.3 5.5% -910.3 6.5% EBITA 206.2 10.6% 223.9
Slide 10: Key Financials – Variances in LC
Sonova Group Key Financials – Variances in LC in CHF million 1H 2013/14 ∆ % in LC 2H 2013/14 ∆ % in LC FY 2013/14 ∆ % in LC Sales 947.8 10.4% 1,003.5 12.9% 1,951.3 11.7% Gross profit 649.2 9.8% 691.2 12.7% 1,340.4 11.3% - Gross profit margin 68.5% 68.9% 68.7% OPEX -443.0 8.4% -467.3 8.8% -910.3 8.9%
Slide 11: Growth components
Sonova Group Growth components Growth Growth Growth in CHF million 1H 2013/14 2H 2013/14 FY 2013/14 Contribution Contribution Contribution Growth in LC 91.0 10.4% 119.3 12.9% 210.3 11.7% - Thereof organic 84.0 9.6% 113.8 12.3% 197.7 11.0% - Thereof acquisitions 7.0 0.8% 5.5 0.6% 12.5 0.7% Currency e
Slide 12: Sales – Regions and key markets
Sonova Group Sales – Regions and key markets 1H 2013/14 2H 2013/14 FY 2013/14 in CHF million Sales ∆ % in LC Sales ∆ % in LC Sales ∆ % in LC EMEA 361.7 8.3% 433.3 16.2% 795.0 12.4% USA 368.2 10.1% 358.5 11.8% 726.7 11.0% Americas (excl. USA) 116.9 8.0% 107.2 11.4% 224.1 9.6% Asia / Pacific 101.0 22.
Slide 13: Performance history – Strong financial track record
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 14: 2. Business Review – Hearing Instruments
2. Business Review – Hearing Instruments
Slide 15: Hearing Instruments: Business summary FY 2013/14
Hearing Instruments Business summary FY 2013/14 – Outpacing estimated market growth – Sales up by 9.5% in LC to CHF 1,756 million – Growth driven by strong organic growth of 8.8% – Both wholesale and retail businesses contributed to the increase – Continued strong market response to the new Quest pr
Slide 16: Hearing Instruments: Financial performance
Hearing Instruments Financial performance in CHF million 1H 2013/14 ∆ % in CHF 2H 2013/14 ∆ % in CHF FY 2013/14 ∆ % in CHF ∆ % in LC Sales 865.8 8.1% 890.2 5.1% 1,756.0 6.5% 9.5% EBITA 206.2 10.2% 211.1 7.4% 417.3 8.8% 13.9% - EBITA margin 23.8% 23.7% 23.8% Underlying margin improvement of 90bps ref
Slide 17: Hearing Instruments: Sales – Growth components
Hearing Instruments Sales – Growth components Growth Growth Growth in CHF million 1H 2013/14 2H 2013/14 FY 2013/14 Contribution Contribution Contribution Growth in LC 79.4 9.9% 78.0 9.2% 157.4 9.5% - Thereof organic 72.4 9.0% 72.5 8.6% 144.9 8.8% - Thereof acquisitions 7.0 0.9% 5.5 0.6% 12.5 0.8% Cu
Slide 18: Hearing Instruments: Sales – Product groups
Hearing Instruments Sales – Product groups in CHF million 1H 2013/14 ∆ % in LC 2H 2013/14 ∆ % in LC FY 2013/14 ∆ % in LC HI Premium 220.6 16.2% 212.6 9.6% 433.2 12.8% HI Advanced 215.9 3.8% 221.7 3.4% 437.6 3.6% HI Standard 268.6 14.6% 287.4 16.0% 556.0 15.3% Wireless communication 30.9 0.5% 37.4 18
Slide 19: Hearing Instruments: Performance history
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 09/10 10/11 11/12 12/13
Slide 20: Phonak product pipeline
Phonak Product pipeline – Drive high innovation & launch rate TIMELINE / CY 1H 12 2H 12 1H 13 2H 13 1H 14 2H 14 1H 15 2H 15 1H 16 2H 16 HI – Platform PH-SPICE PH-QUEST NEXT PLATFORM NEXT PF BTE – Bolero Q HI – Premium POWER – Naída Q ITE – Virto Q PED – Sky Q RIC – Audéo Q F 1 F 1 F 2 F 3 F 4 F 5 HI
Slide 21: Unitron product pipeline
Unitron Product pipeline – Drive focused product innovation TIMELINE / CY 1H 12 2H 12 1H 13 2H 13 1H 14 2H 14 1H 15 2H 15 1H 16 2H 16 HI – Platform UT-ERA NEXT PLATFORM M PRO2 Q PRO2 M PRO Q PRO FLEX Trial & Upgrade HI – Premium RIC – Moxi Kiss FLEX Trial BTE – Quantum2 HI – Advanced POWER – Max RIC
Slide 22: 3. Business Review – Cochlear Implants
3. Business Review – Cochlear Implants
Slide 23: Cochlear Implants: Business summary FY 2013/14
Cochlear Implants Business summary FY 2013/14 – Sales momentum accelerating over the course of the year – Sales of CHF 195.3 million – growth of 33.1% in Swiss francs and of 36.0% in LC – Supported in particular by the successful launch of the Naída CI Q70 sound processor – First year allowing to fu
Slide 24: Cochlear Implants: Key financials
Cochlear Implants Key financials in CHF million 1H 2013/14 ∆ % in CHF 2H 2013/14 ∆ % in CHF FY 2013/14 ∆ % in CHF ∆ % in LC Sales 82.0 15.0% 113.3 50.2% 195.3 33.1% 36.0% EBITA 0.1 n/m 12.8 n/m 12.8 n/m n/m - EBITA margin 0.1% 11.3% 6.6% Note: 2H 2013/14 and FY 2013/14 variances consider normalizati
Slide 25: Cochlear Implants: Sales – Growth components
Cochlear Implants Sales – Growth components Growth Growth Growth in CHF million 1H 2013/14 2H 2013/14 FY 2013/14 Contribution Contribution Contribution Growth in LC 11.6 16.2% 41.3 54.6% 52.8 36.0% Currency effect -0.9 -1.2% -3.4 -4.5% -4.3 -2.9% Growth as reported 10.7 15.0% 37.9 50.2% 48.6 33.1% S
Slide 26: Cochlear Implants: Performance history
Cochlear Implants Performance history SALES EBITA EBITA in CHF million in CHF million margin in % 1H 2H 225 20 20% 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 13/14 FY 2009
Slide 27: Advanced Bionics product pipeline
Advanced Bionics Product pipeline – Accelerate innovation rate, leverage Phonak technology TIMELINE / CY 1H 12 2H 12 1H 13 2H 13 1H 14 2H 14 1H 15 2H 15 1H 16 2H 16 CI – Platform AB-WOLVERINE AB-QUEST FDA CI – Electrodes HiFocus . CE Mid-Scala FDA CI – Implants HiRes 90k CE Advantage FDA CI – Proces
Slide 28: 4. Financial Review
Ssonova HEAR THE WORLD 4. Financial Review
Slide 29: Financial highlights Full-Year 2013/14
Full-Year 2013/14 Financial highlights – Sales of CHF 1,951 million – mainly driven by double-digit organic sales growth – Gross Profit of CHF 1,340 million or 68.7% of sales – Gross profit margin affected by CI/HI mix effect – Reported EBITA margin of 22.0% – expanding by 50 bps as reported and by
Slide 30: Strong financial performance
Sonova Group Strong financial performance in CHF million FY 2012/13 FY 2013/14 ∆ % in CHF ∆ % in LC Sales 1,795.3 1,951.3 8.7% 11.7% Gross profit 1,239.8 1,340.4 8.1% 11.3% - Gross profit margin 69.1% 68.7% OPEX -854.5 -910.3 6.5% 8.9% EBITA 385.3 430.1 11.6% 16.7% - EBITA margin 21.5% 22.0% Operati
Slide 31: Group EBITA development – Year-on-year
Sonova Group Group EBITA development – Year-on-year +1.0 449.7 -19.6 430.1 +63.4 385.3 +203.6 181.7 Margin: +64.4 Margin: Margin: +16.7% 22.4% 22.0% 21.5% +44.8 +11.6% Margin: 10.1% EBITA One-off EBITA Organic Acquisitions EBITA FX EBITA (reported) cost 2012/13 Growth 2013/14 effect 2012/13 2012/13
Slide 32: Group EBITA margin development – Mid-term
Sonova Group Group EBITA margin development – Mid-term Margin: -40 bps 22.0% +90 Margin: bps 21.5% +60 bps +140 bps Margin: 19.5% FY 2011/12 Operating FX FY 2012/13 Operating FX FY 2013/14 margin Effect margin Effect increase increase in LC in LC Note: FY 2012/13 numbers and variances consider norma
Slide 33: Operating expenses
Sonova Group Operating expenses in CHF million FY 2012/13 FY 2013/14 ∆ % in CHF ∆ % in LC Research & Development -113.9 -125.7 10.3% 11.3% in % of sales 6.3% 6.4% Sales & Marketing -559.1 -589.6 5.5% 8.3% in % of sales 31.1% 30.2% General & Administration -181.5 -195.2 7.6% 9.4% in % of sales 10.1%
Slide 34: R&D spending
Sonova Group R&D spending in CHF million / % of sales 140.4 142.9 132.7 7.8% 7.3% 123.2 8.2% 7.6% 17.3 16.5 26.5 15.5 125.7 116.2 113.9 107.8 6.4% 7.2% 6.3% 6.7% 2010/11 2011/12 2012/13 2013/14 AB capitalized development costs (net of amortization) R&D costs charged to the P&L Continuing strong R&D
Slide 35: Reported results and income taxes
Sonova Group Reported results and income taxes in CHF million FY 2012/13 FY 2013/14 ∆ % in CHF EBITA 385.3 430.1 11.6% Amortization / Impairment -26.1 -26.1 -0.2% Operating profit (EBIT) 359.2 404.0 12.5% in % of sales 20.0% 20.7% Financial result -7.1 -9.5 33.2% Income before taxes 352.1 394.6 12.1
Slide 36: Significant free cash flow
Sonova Group Significant free cash flow in CHF million FY 2012/13 FY 2013/14 ∆ % in CHF Cash flow before changes in NWC (incl. taxes paid) 401.5 452.1 12.6% Changes in net working capital -14.4 -41.1 Cash flow from operating activities 387.1 411.0 6.2% in % of sales 21.6% 21.1% Cash flow from invest
Slide 37: Maintaining a solid balance sheet
Sonova Group Maintaining a solid balance sheet in CHF million FY 2012/13 FY 2013/14 ∆ % in CHF Net working capital 187.1 190.6 1.8% Days sales outstanding (DSO) 71 69 -2.8% Days inventory outstanding (DIO) 148 140 -5.6% Capital employed 1,455.5 1,462.9 0.5% Net cash 185.8 311.5 67.7% Equity 1,641.3
Slide 38: Dividend – Proposed increase by 19% to CHF 1.90
Sonova Group Dividend – Proposed increase by 19% to CHF 1.90 Dividend / distribution development in CHF per share 1.90 1.60 1.20 1.20 1.20 1.00 1.00 0.75 0.50 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 Proposed dividend represents a payout ratio of 37% 20 May 2014 Page 3
Slide 39: 5. Outlook FY 2014/15
Ssonova HEAR THE WORLD 5. Outlook FY 2014/15
Slide 40: Outlook FY 2014/15: On course for mid term financial targets
Outlook FY 2014/15 On course for mid term financial targets 3,000 40% EBITA Margin / ROCE (%) 2,000 30% Sales (in CHF million) 1,000 20% ,0 10% 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 Sales EBITA Margin (%) ROCE (%) Notes: FY 2007/08 Excluding one-off cost for the prohibite
Slide 41: FY 2014/15 guidance
Outlook FY 2014/15 FY 2014/15 guidance Actual Guidance FY 2013/14 FY 2014/15 Sales growth in LC 11.7% 7%-9% thereof acquisition related growth 0.7% approx. 1% Sales FX-impact -3.0% Total sales growth in CHF 8.7% EBITA growth in LC 16.7% 11%-15% EBITA FX-impact -5.1% Total EBITA growth in CHF 11.6% 2
Slide 42: FX impact on sales and margins
Outlook FY 2014/15 FX impact on sales and margins USD/CHF EUR/CHF Rate Sales EBITA USD/CHF +/- 5% +/- CHF 40 million +/- CHF 14 million EUR/CHF +/- 5% +/- CHF 25 million +/- CHF 15 million USD and EUR account for roughly two thirds of the overall FX exposure 20 May 2014 Page 42
Slide 43: FX rates – Main currencies
Outlook FY 2014/15 FX rates – Main currencies accounted for around 90% of Group sales Other USD GBP, CAD, BRL, AUD and JPY EUR Spot FY-12/13 1H-13/14 2H-13/14 FY-13/14 Effect May 2014 USD 0.94 0.94 0.90 0.92 - 0.89 EUR 1.21 1.23 1.23 1.23 - 1.22 GBP 1.48 1.45 1.47 1.46 + 1.50 CAD 0.94 0.91 0.84 0.87
Slide 44: 6. Upcoming events
Ssonova HEAR THE WORLD 6. Upcoming events
Slide 45: Upcoming events
Upcoming events Important dates 21-29 May Roadshow Full-Year Results 2013/14 17 June Annual General Meeting Zurich 14 October 3. Sonova Investor & Analyst Day Stäfa 15-17 October EUHA Congress Hannover 17 November 1H 2014/15 Results Stäfa 20 May 2014 Page 45
Slide 46: 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 [email protected] Email [email protected]
Slide 47: Thank you very much
Ssonova HEAR THE WORLD Thank you very much