Sonova Reports Strong Organic Growth in 1st Half

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Sonova Holding reported its first-half results for fiscal 2013 on Wednesday. For the first time in a while, currency positively affected the performance, with revenue growing 14.3% in Swiss francs and 7.9% in local currencies.

Growth was broad-based, with the United States, Europe, Asia Pacific, and Americas all growing in high single digits (in local currencies). Across product segments, hearing instruments fared well with 2% organic growth, but the main driver of growth was the cochlear implant business, which grew 71% in local currencies.

The rebound in this segment wasn’t a complete surprise given competitor struggles and the return of the HiRes 90K implant to the market, but the firm’s new processor, Neptune, also contributed to growth. Acquisitions added a few percentage points to first-half results, but the underlying performance was still robust.

The firm’s recent product launches contributed to the excellent results, as 80% of Sonova’s revenue now comes from products launched within the past two years. Strong top-line performance in the first half allowed the company to maintain its local currency growth forecast for the full year at 7%-9%.

Sonova’s EBITA margin was bolstered by currency, a reversal from the prior six months when margin was severely affected by the strong Swiss franc. But even adjusted for currency, the operating margin improved nearly 200 basis points organically, with general and administrative costs held in check (up only 1.5% in local currencies year over year).

 

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