ZURICH Sonova (SOON.S) Chief Executive Lukas Braunschweiler remains on the hunt for acquisitions to expand the Swiss hearing aid maker's retail and service presence in markets such as the United States and Australia, he told Reuters.
Braunschweiler, whose company completed its nearly $1 billion acquisition of Dutch-based retail chain AudioNova on Thursday, said in an interview that Sonova will continue to spend 50 million to 70 million Swiss francs annually ($72 million) in free cash flow on acquisitions.
Expansive Sonova is buying up retailers as it goes head-to-head with rivals including Denmark's William Demant Holdings (WDH.CO) with whom it shares about 40 percent control of the $6 billion global wholesale market for hearing aids.
There are still places on the globe where Sonova needs to get bigger, Braunschweiler said.
"It's in countries like the U.S. and Australia where we might methodologically add other kinds of networks where we still have coverage issues," he said, adding Sonova could still buy retailers to bolster its service network in select European countries.
He did not name the countries specifically. With the AudioNova deal, Sonova added 360 million euros ($405 million) in annual sales from 1,300 stores in eight countries: Germany, the Netherlands, Italy, Belgium, Poland, Denmark, France and Portugal.
Demant is also looking for deals to expand in retail, to protect its own-brand products from rivals like Sonova who jettison other companies' products from the shelves after making a takeover.
While Demant is shifting production from Denmark and the United States to Poland and Mexico to cut costs by around 200 million Danish crowns ($30 million) a year, Braunschweiler said Sonova is satisfied with its production scheme: It makes key components in automated plants in high-cost Switzerland, but sends them for final assembly to cheaper facilities in Vietnam and China.
"We are fully set out," Braunschweiler said.
Sonova shares have risen 6 percent this year, compared to the 3.9 percent rise of Demant.
($1 = 0.9731 Swiss francs)
($1 = 0.8894 euros)
(Editing by Michael Shields)