STAEFA, SWITZERLAND — Major hearing instrument manufacturer Sonova, reported a 3 percent rise in full-year profit for 2016/17 and also confirmed that it will soon be releasing 2.4 GHz, direct-to-iPhone, capable hearing aids and cochlear implants. Additionally, the significant drop in sales the company had experienced in Germany following the Sonova’s purchase of AudioNova last year, has begun to recover.
The expansion of Sonova’s European retail holdings, with the purchase of AudioNova in May 2016, prompted a backlash among independent hearing aid retailers in Germany, similar to the company’s experience in the US in 2014 when Phonak began selling hearing aids in Costco, but reports have indicated the sales slump has begun to ease.
Income for the 2016/17 year rose to 356.2 million Swiss francs ($358 million), which is up from 345.8 million francs last year.
Growth in Europe was strong, despite an expected headwind from independent customers in Germany after the announcement of the AudioNova acquisition in May 2016. Phonak in the US and Canada grew strongly across the main channels and we also increased market share in our business with the US Department of Veterans Affairs (VA). An updated product offering at Costco was very well received and contributed to strong growth in the second half-year.
–Sonova Investor Report, May 16, 2017
In a phone interview, as reported by Reuters, Chief Executive Lukas Braunschweiler said the company has been helped by the launch of new products, including hearings aids with rechargeable lithium-ion batteries, and assurance to investors that “We definitely had a stabilization in Germany.”
Growth in Hearing Aids and Implants Continues
Europe accounted for the largest portion of Sonova Group’s sales at 48 percent, with Germany highlighted as a key target market for the company’s retail expansion strategy. The US accounted for approximately 33 percent of sales, and the Asia-Pacific region at 10 percent.
Overall sales rose 15.3 percent to 2.4 billion francs, which was consistent with analysts expectations.
The company attributes the increase in sales in the latter half of the year to the launch of its rechargeable line of hearing aids and the launch of a new cochlear implant. Cochlear implant sales are up nearly 10 percent over the past year.