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Sonova cuts forecast as cochlear implant sales disappoint
November 16, 2015 / 8:04 AM / 2 years ago

Sonova cuts forecast as cochlear implant sales disappoint

ZURICH, Nov 16 (Reuters) - Hearing aid maker Sonova cut its sales and profit forecast after getting hit by lower than expected cochlear implant sales, as well as by the strong Swiss franc, Chief Executive Officer Lukas Braunschweiler said on Monday in an interview.

It now expects full-year 2015/2016 sales to grow by between 6 and 8 percent, down from 7 to 9 percent, and growth of earnings before interest, taxes and amortisation of 3 to 7 percent, from a previous forecast of 9 to 13 percent.

Braunschweiler said the last decade’s explosive growth in paediatric cochlear implants had normalized, while the market for the adult population hadn’t accelerated as Sonova and its largest competitors including Cochlear and Med-el had anticipated.

“That transition takes some time,” Braunschweiler said. “We think it’s a year, or two, where we see the market more in the mid-single-digit growth, then we should get again acceleration toward the high single digits.”

He said the contraction trend reversed at the end of the period, with sales growth resuming.

Sales in the first half of Sonova’s reporting period rose 1.3 percent to 1 billion francs ($995 million), while EBITA slipped 9.3 percent to 195.5 million, from the previous period in 2014/15.

Income after tax was 157.3 million francs, down from 173.6 million. Sonova set aside nearly 8 million francs for increased warranty provisions, as customers made claims against some of the company’s recently introduced products.

“I think it’s a wise measure, given that we bring a lot of new products,” Braunschweiler said.

Braunschweiler said results were held back by a “significant decline” of major currencies in which it does a third of its business, including the Brazilian real, Turkish lira and the Canadian dollar, versus the Swiss franc.

“We’re hedging our inter-company net exposure on working capital but we didn’t hedge enough on these currencies,” he said. “Usually, they haven’t been a big factor. But now, they’ve become a big factor.” ($1 = 1.0051 Swiss francs) (Reporting by John Miller; Editing by David Holmes)

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