STAFA, SWITZERLAND – Sonova Holdings recently provided an interim business update and guidance for the first half of the Fiscal Year 2020/21. The partial recovery of the global hearing care market from the COVID-19 pandemic impacts “has been faster than anticipated in recent weeks”.
Sonova reports that its 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 said that it 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 (~$42-$64M USD) and to lead to annual cost savings of CHF 50-70 million (~$53-$75M USD) once fully implemented.
“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.”
–Arnd Kaldowski, CEO of Sonova
According to the announcement, the “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”.
The company says that 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
- EMEA region came close to 60% prior year levels
- United States at about 55% and Americas (excl. USA) near 50% prior year levels
Sonova says that it “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”.