Sonova Holding ((CH:SOON)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Sonova Holding’s recent earnings call conveyed a sense of optimism, driven by strong growth in key segments and successful product launches. The company maintained a positive financial outlook, although challenges in specific areas like Cochlear Implants and Consumer Hearing, along with the negative impact of the Swiss franc, tempered the overall positive narrative.
Strong Sales Growth in Key Segments
Sonova reported impressive sales growth in its Hearing Instruments and Audiological Care segments, achieving a combined increase of 7% in local currencies. This growth rate is approximately double the estimated market growth, resulting in significant market share gains for the company.
Record Earnings and Margin Expansion
The company achieved record earnings with a normalized EBITA of CHF 316 million, marking a 16% increase in local currencies. This performance led to a robust margin expansion of 180 basis points, highlighting Sonova’s operational efficiency.
Successful Product Launches
Sonova’s recent product launches, including the Phonak Infinio and Infinio Sphere platforms and the new Virto R rechargeable hearing device, received strong market responses. These innovations have positively contributed to the company’s growth trajectory.
Positive Outlook and Market Share Gains
Sonova maintains a positive outlook for the fiscal year 2025-2026, targeting sales growth of 5% to 9% and normalized EBITA growth of 14% to 18% at constant exchange rates. The company is confident in its ability to sustain market share gains.
Challenges in Cochlear Implants and Consumer Hearing
The Cochlear Implants segment faced a 5% decline in sales, primarily due to headwinds in China. Additionally, the Consumer Hearing business experienced a 12% sales decline, attributed to weak consumer demand and a lack of new product launches.
Impact of Swiss Franc Strength
The strength of the Swiss franc negatively impacted Sonova’s financial results, reducing reported sales by CHF 107 million, or 5.8%, due to foreign exchange translation effects.
Gross Profit Margin Challenges
Sonova’s gross profit margin fell by 80 basis points in local currencies, primarily due to temporary costs associated with regionalizing manufacturing and logistics.
Forward-Looking Guidance
During the earnings call, Sonova confirmed its guidance for the remainder of the fiscal year, targeting 5% to 9% growth in sales and 14% to 18% growth in normalized EBITA at constant exchange rates. The company remains optimistic about maintaining positive momentum, driven by recent product launches expected to contribute to growth in the second half.
In summary, Sonova’s earnings call highlighted a generally optimistic outlook, with strong growth in key segments and successful product launches. Despite challenges in certain areas and the impact of the Swiss franc, the company remains confident in its ability to achieve its financial targets and sustain market share gains.