Sonova business update and guidance for first half of FY 2020/21 Montag, 06. Juli 2020 - 07:00

Media Release

Stäfa (Switzerland), July 6, 2020 – Sonova Holding AG, a leading provider of hearing solutions, today provides an interim business update. The partial recovery of the global hearing care market from the COVID-19 pandemic impacts has been faster than anticipated in recent weeks. Sonova’s business activities have picked up from the low point of 35% in April 2020, reaching 59% of prior year levels for the first three months of FY 2020/21 at constant exchange rates. Sonova expects sales for the first half of FY 2020/21 to reach 65-75% of the prior year level and to achieve a positive adjusted EBITA margin in the single-digits for the same period, both at constant exchange rates. In line with measures taken in the prior years, Sonova is accelerating structural optimization initiatives to preserve the ability to invest into growth and to protect profitability. The measures are expected to result in restructuring costs of CHF 40-60 million in FY 2020/21 and to lead to annual cost savings of CHF 50-70 million once fully implemented.

Arnd Kaldowski, CEO of Sonova, says: “We are pleased with the current speed of the market recovery and our ability to manage our cost base. This clearly demonstrates that Sonova is in a good position to successfully navigate the COVID-19 crisis. At the same time, we have decided to accelerate our efforts to optimize our organizational structure to be able to continue to drive our growth initiatives as the attractive fundamentals of the hearing care market remain very much intact.”

This extraordinary interim business update is provided outside of the regular reporting schedule in light of the rapidly changing business environment related to the COVID-19 pandemic. A faster than expected partial market recovery in recent weeks has positively impacted Sonova’s business activities. Momentum improved sequentially each month, resulting in Group sales at 59% of prior year levels for the first three months of FY 2020/21 at constant exchange rates. The APAC region led the recovery with sales reaching around 75% of prior year levels, followed by the EMEA region at close to 60%, the United States at about 55% and Americas (excl. USA) near 50%. Sonova made good progress on cost containment, which will allow for a solid result relative to the reduced sales level. Spending for new products has continued as planned. Sonova has further strengthened its financial position by issuing bonds totaling CHF 830 million in FY 2020/21 and by paying a stock dividend.

In light of the recent developments and reflecting the year-to-date performance, Sonova currently expects Group sales in the first half of FY 2020/21 to reach around 65-75% of prior year levels and to achieve a positive adjusted EBITA margin in the single-digits, both assuming constant exchange rates. The outlook assumes a continued gradual market recovery absent any significant re-tightening of lockdown restrictions for the remainder of the period. The speed of the recovery has been encouraging year-to-date; however, the current rise in infections in several markets illustrates the risk to the expected upward trend. Sonova thus remains cautious about the extent of the further recovery in the second half of FY 2020/21 and the potential impact on demand including from the general economic environment.

In line with the Group’s overall strategy, Sonova is accelerating its structural optimization initiatives, which aim to optimize non-customer facing functions such as general and administration, manufacturing, logistics and back office. Furthermore, the plan includes the streamlining of the Group’s Audiological Care store network by combining certain store locations to improve efficiency while protecting sales. Whenever possible, respective headcount reductions will be carried out through natural attrition. R&D activities will continue as planned, ensuring that the cadence of product launches can be fully sustained.

Investor and analyst conference call

Sonova will host a conference call for investors and analysts, today, July 6, 2020, at 09.00 AM CEST to discuss today’s announcement.

The conference call can be accessed at:

+41 (0) 58 310 50 00 (Europa)

+44 (0) 207 107 06 13 (UK)

+1 (1) 631 570 56 13 (USA)

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Contacts:

Disclaimer

This Media Release 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 subject to risks and uncertainties including, but not confined to, future global economic conditions, exchange rates, legal provisions, market conditions, activities by competitors and other factors outside Sonova’s control. Should one or more of these risks or un¬certainties materialize or should underlying assumptions prove incorrect, actual outcomes may vary materially from those forecasted or expected. Each forward-looking statement speaks only as of the date of the particular statement, and Sonova undertakes no obligation to publicly update or revise any forward-looking statements, except as required by law.

About Sonova

Sonova, headquartered in Stäfa, Switzerland, is a leading provider of innovative hearing care solutions. The Group operates through its core business brands Phonak, Unitron, Hansaton, Advanced Bionics and AudioNova. Sonova offers its customers one of the most comprehensive product portfolios in the industry – from hearing instruments to cochlear implants to wireless communication solutions.

Pursuing a unique vertically integrated business strategy, the Group operates through three core businesses – hearing instruments, audiological care and cochlear implants – along the entire value chain of the hearing care market. The Group’s sales and distribution network, the widest in the industry, comprises over 50 own wholesale companies and more than 100 independent distributors. This is complemented by Sonova’s audiological care business, which offers professional audiological services through a network of around 3,500 locations in 19 key markets.

Founded in 1947, the Group has a workforce of over 15,000 dedicated employees and generated sales of CHF 2.92 billion in the financial year 2019/20 as well as a net profit of CHF 490 million. Across all businesses, and by supporting the Hear the World Foundation, Sonova pursues its vision of a world where everyone enjoys the delight of hearing and therefore lives a life without limitations.

For more information please visit www.sonova.com and www.hear-the-world.com.

Sonova shares (ticker symbol: SOON, Security no: 1254978, ISIN: CH0012549785) have been listed on the SIX Swiss Exchange since 1994. The securities of Sonova have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”), or under the applicable securities laws of any state of the United States of America, and may not be offered or sold in the United States of America except pursuant to an exemption from the registration requirements under the U.S. Securities Act and in compliance with applicable state securities laws, or outside the United States of America to non-U.S. Persons in reliance on Regulation S under the U.S. Securities Act.