Fiscal 2022/23: Sonova achieves strong results and maintains earnings growth (2023)

Sonova Holding AG / Keywords: Annual results/Dividend

May 16, 2023 / 07:00 CET/CEST
Issuance of ad hoc notification in accordance with art. 53 L.R.
The publisher is solely responsible for the content of this publication.

Ad hoc announcement according to the article. 53 L.R.

Stäfa, Switzerland, May 16, 2023 – Sonova Holding AG, a leading provider of hearing care solutions, today presents its results for the 2022/23 financial year. Group sales were CHF 3,738.4 million, an increase of 14.6% in local currency and 11.1% in Swiss francs. The growth is mainly attributed to acquisitions, while the increase in organic sales is mainly due to successful product launches and positive developments in the hearing aid sector. The non-renewal of a major device contract with a major US customer clearly affected the outcome. Group adjusted EBITA was CHF 840.4 million, an increase of 6.1% in local currencies but a decrease of 0.5% in Swiss francs. Profitability development reflects the expected decline since the first consolidation of recent acquisitions, as well as the decline in input costs. Thanks to proactive countermeasures, they were partially neutralized. The Board of Directors will propose a dividend of CHF 4.60 per share at the Annual General Meeting of Shareholders. In the financial year 2023/24. The Group expects consolidated sales growth of 3% to 7% and adjusted EBITA growth in the range of 6% to 10%, both measured at constant exchange rates.

Arnd Kaldowski, CEO of Sonova, says: “Sonova delivered strong results, although it did not fully meet our initial expectations for the year. Our well-proven strategy has enabled us to proactively address near-term challenges and successfully sustain earnings growth. We continue to implement our growth strategy – driving innovation with the launch of the Phonak Lumity platform and significantly expanding the audiology care network. We have created a promising new class of hearing solutions for early hearing with the Sennheiser Conversation Clear Plus headphones. Despite continued macroeconomic volatility, we remain confident in our ability to benefit from our attractive market fundamentals over the long term. Our technical and business model innovations enable us to capture value in markets with strong growth potential."

Key figures of the Sonova group - financial year 2022/23. in millions of CHF




in local currencies






EBITA (adjusted)1)





EBITA margin (adjusted)1)



EPS (adjusted, CHF)1)





Operating Free Cash Flow




1)Non-GAAP financial measure adjusted for non-recurring items. please see the financial summary and for details see the table "Reconciliation of Non-GAAP Financial Measures" in the 2022/23 Annual Report.

Sales growth driven by acquisitions and strong organic growth
Sonova Group sales reached CHF 3,738.4 million in fiscal year 2022/23, an increase of 14.6% in local currency and 11.1% in Swiss francs. Sales were supported by the successful launch of the Phonak Lumity platform in August 2022, as well as price increases implemented to mitigate inflationary pressures. Growth was hampered by slower-than-expected momentum in some key hearing care markets and the non-renewal of a major contract with a US client. Group-wide organic growth was 2.3% and 4.5%, excluding the significant non-renewal of the contract mentioned above. Acquisitions, including the significant expansion of Sonova's audiology care network through the acquisition of Alpaca Audiology in the United States and HYSOUND in China, and the addition of Sennheiser's consumer division, contributed to sales growth of 12.3%. Exchange rate fluctuations had a significant negative impact, reducing reported sales by CHF 116.3 million or 3.5%.

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Slowdown in market dynamics affects growth
Sales in Europe, the Middle East and Africa (EMEA) increased 13.1% in local currency. Despite macroeconomic headwinds, growth in some countries, including the Netherlands and Austria, as well as in distribution markets, remained strong. Growth was further fueled by the acquisition of Sennheiser's consumer division, as well as the continued expansion of the hearing aid network. However, regional growth was constrained by weak sales growth in France following an increase in market volume last year as a result of the 2021 tariff system change, coupled with weakness in the private car market. United Kingdom and the slowdown in momentum in Germany in the second half of the financial century. year.

In the United States, sales rose 9.5% in local currency. The growth was due to the expansion of the audiology care network, particularly through the acquisition of Alpaca Audiology. The relatively high proportion of the country's spending on hearing costs meant that the US private market was negatively affected by macroeconomic headwinds in calendar year 2022, although it showed signs of recovery in the last quarter of fiscal 2022/ 2. 3. The non-renewal of a major appliance contract with a customer in the US also had a significant impact on sales in the second half of fiscal 2022/23. This can only be partly offset by a positive increase in deliveries to the US Department of Veterans Affairs (VA), where Sonova continues to hold a leadership position.

Sales in the Rest of the Americas (excluding the US) increased 11.2% in local currencies, supported by acquisitions and strong results from hearing aid networks in Canada and Brazil. Asia Pacific (APAC) sales increased 40.3% in local currencies, driven by the acquisition of Sennheiser's consumer division and further driven by the acquisition of HYSOUND in China, which was completed in December 2022. related quarantines with the pandemic in the previous year.

Strong organic margin growth: currency shocks and acquisition dilution
In response to macroeconomic challenges, Sonova accelerated its structural optimization initiatives during the reporting period, resulting in restructuring costs of CHF 15.6 million (2021/22: CHF 13.5 million). The focus of these initiatives was supply chain security, including a new Mexican operation serving the entire Americas region and further network optimization in the hearing aid industry. These initiatives are expected to generate annual savings of approximately CHF 25 million once fully implemented. The acquisition of the consumer division of Sennheiser, Alpaca Audiology and HYSOUND resulted in transaction and integration costs of CHF 17.0 million (2021/22: CHF 12.0 million). In addition, the Group incurred legal costs of CHF 6.2 million, mainly related to ongoing patent disputes (2021/22: CHF 16.0 million, including a settlement agreement in principle with the US Department of Justice .). Income taxes were positively affected by CHF 9.2 million as a result of the tax reforms (2021/22: CHF 17.5 million).

The adjusted figures and growth rates in this financial summary exclude the figures in the preceding paragraph. For more details, see the "Reconciliation of Non-GAAP Financial Measures" table in the 2022/23 Annual Report Financial Summary.

The reported gross profit was CHF 2,637.4 million. Adjusted gross profit increased by 11.8% in local currency or 7.4% in Swiss francs to CHF 2,645.1 million. Pressure on global average selling price (ASP) due to muted volume growth in high-end audio markets was offset by the aforementioned price increases. Earnings development was also affected by continued drag from high transportation and component costs, although these eased towards the end of the year. The expected dilutive effect of the Sennheiser Consumer Division acquisition, combined with unfavorable currency effects, resulted in a 2.4 percentage point decrease in Swiss Franc Adjusted Gross Margin to 70.8%. In local currency, gross profit margin decreased 1.8 percentage points compared to the prior year, but showed a significant sequential improvement in the second half of the year.

Excluding acquisition-related depreciation, reported operating expenses were CHF 1,835.8 million (2021/22: CHF 1,657.7 million). Adjusted operating expenses before amortization related to the acquisition increased 14.7% in local currency or 11.5% in Swiss francs to CHF 1,804.7 million (2021/22: CHF 1,619.2 million). More than 80% of the increase is the result of acquisitions. The group continued to invest in innovation, and adjusted research and development (R&D) costs before acquisition-related amortization increased by 6.2% in local currency to CHF 242.9 million.

Adjusted selling and marketing expenses before acquisition-related amortization increased by 19.1% in local currency to CHF 1,250.6 million or 33.5% of sales (2021/22: 32.4%). This is mainly due to a change in the business mix due to the continued expansion of the Hearing Care business, which has a higher proportion of sales and marketing expenses compared to sales than the rest of the Group, as well as the acquisition of Sennheiser. Consumer Division. Adjusted cost of sales and acquisition-related costs before amortization increased 6.3% in local currency to CHF 311.9 million or 8.3% of sales (2021/22: 8.9%). This increase was almost entirely the result of acquisitions, partially offset by benefits from structural optimization initiatives. In addition, on the expenses of the financial year 2021/22. was affected by the negative one-off effect of reserves related to operations in Russia. Other adjusted income was CHF 0.6 million (2021/22: nil).

Adjusted operating earnings before amortization related to the acquisition (EBITA) increased 6.1% in local currencies and decreased 0.5% in Swiss francs to CHF 840.4 million (2021/22: CHF 844.4 million ) . Adjusted EBITA margin reached 22.5%, a decrease of 2.6 percentage points compared to the previous year, but an increase of 0.3 percentage points in local currencies, excluding acquisitions. The exchange rate movements reduced adjusted EBITA by CHF 55.5 million and the margin by 0.7 percentage points. Reported EBITA increased 6.7% in local currencies but fell 0.2% in Swiss francs to CHF 801.6 million. Acquisition-related amortization was CHF 54.9 million (2021/22: CHF 42.9 million), reflecting recent acquisitions. Reported operating profit (EBIT) was CHF 746.7 million (2021/22: CHF 760.0 million), a decrease of 1.8% in Swiss francs.

EPS stable growth
Net financial costs, including the result of associated companies, were practically unchanged at CHF 31.0 million (2021/22: CHF 31.8 million). Income taxes amounted to CHF 57.4 million (2021/22: CHF 64.5 million). Income taxes decreased by CHF 9.2 million due to effects related to tax reforms (2021/22: CHF 17.5 million) and CHF 0.5 million due to the liberalization of tax provisions (2021/22: CHF 26.6 million). The basic tax rate was 9.7% (2021/22: 14.5%). This reflects the temporary effect of the later-than-expected application of the global minimum tax (Pillar 2), in addition to taking into account temporary initial tax exemptions and the associated impact on deferred tax balances. Basic earnings per share (EPS) was CHF 10.75, an increase of 11.4% in local currencies or 3.2% in Swiss francs. Adjusted EPS increased 11.5% in local currencies or 3.5% in Swiss francs to CHF 11.14, compared with CHF 10.76 a year earlier.

Hearing Aid Sector: Growth Mainly Due to Acquisitions
Sales in the hearing aid segment were CHF 3,451.5 million, an increase of 15.7% in local currency and 11.9% in Swiss francs compared to the previous year. Organic growth was hampered by slower-than-expected momentum in some key hearing aid markets and the non-renewal of a major US customer, partially offset by price increases. Organic sales growth reached 2.3%, while the contribution of acquisitions in the reporting period (including the effect of last year's acquisitions) increased sales by 13.4% or CHF 412.9 millions. A key contribution was the acquisitions of Sennheiser Consumer Division and Alpaca Audiology, which only consolidated in the last month of the 2021/22 fiscal year. Exchange rate fluctuations reduced reported sales by CHF 115.4 million or 3.7% in Swiss francs.

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The hearing aid segment posted sales of CHF 1,809.3 million, an increase of 0.2% in local currency. Sales growth was supported by a favorable market response to the new Phonak Lumity platform launched in late August 2022, but stalled in the second half of the fiscal year due to the aforementioned non-renewal of a contract with a excluding the latter, the company's organic growth reached 4.1%. The pressure on the global ASP due to the change in the structure of the countries was neutralized by the increase in prices, which resulted in a positive evolution of the ASP for this year.

The new Consumer Hearing business generated sales of CHF 284.3 million. Despite a challenging consumer market, Sennheiser's recently acquired consumer division stuck to the plan, backed by a series of successful product launches, including the MOMENTUM True Wireless 3 headphones and the MOMENTUM 4 wireless noise-canceling headphones. With the introduction of Sennheiser Conversation Clear Plus, the consumer hearing business established a new category of early-start hearing solutions, a key strategic reason for the acquisition of Sennheiser's consumer division.

Sales in the audiology care segment were CHF 1,357.8 million, an increase of 15.7% in local currency. Organic growth reached 4.5%, supported by good growth in Canada, the Netherlands, the Nordic countries and Austria. Non-core acquisition activity remained strong throughout the year, with particular emphasis on the US, Canada, Germany and France. A turning point was the acquisition of HYSOUND, completed in December 2022. This added approximately 200 clinics to the fast-growing Chinese market and provides a strong platform for further expansion. Overall, acquisitions increased sales by 11.2%, driven primarily by the acquisition of Alpaca Audiology in the United States. Including new store openings, the number of outlets increased by more than 300 to more than 3,900.

Reported EBITA for the hearing aid segment was CHF 771.4 million, an increase of 4.8% in local currencies. Adjusted EBITA increased by 5.7% in local currencies to CHF 804.5 million, corresponding to an EBITA margin of 23.3% (2021/22: 26.2%). The decrease in margin is solely due to acquisitions and the negative effects of exchange rate fluctuations.

The cochlear implant industry - steady growth in system sales
Sales in the cochlear implants segment reached CHF 286.9 million, an increase of 2.8% in local currency or 2.5% in Swiss francs. This was achieved despite supply constraints and hospital staff shortages. System sales increased 5.1% in local currencies, reflecting strong growth in North America, but were hampered by a court order preventing Advanced Bionics from selling its HiRes™ Ultra 3D cochlear implant inside and outside Germany (until suspension order in October 2022) . Sales of upgrades and add-ons are supported by the continued global release of the Naída™ CI Marvel and Sky CI™ Marvel audio processors. On a comparable high basis, sales fell 1.0% in local currencies.

Reported EBITA for the cochlear implant segment was CHF 30.1 million. Adjusted EBITA reached CHF 35.9 million (2021/22: CHF 36.8 million), representing a margin of 12.5% ​​(2021/22: 13.2%). Margin movement was negatively affected by the strength of the US dollar. Excluding currency movements, the margin improved by 1.5 percentage points.

Cash flow
Cash flow from operating activities was CHF 783.9 million (2021/22: CHF 941.1 million). The development was partly due to higher tax payments, cash outflows related to product liabilities and fixed business liabilities (increased in 2021/22). It also reflects the accumulation of trade receivables related to the acquisition of Sennheiser's consumer division. Net purchases of tangible and intangible assets increased to CHF 152.3 million (2021/22: CHF 104.8 million), due to investments in infrastructure, including a new operating unit for the Americas region in Mexico, which will expand the Sonova's global manufacturing capacity for hearing instrument and cochlear implant business and IT projects. This resulted in an operating free cash flow of CHF 535.6 million (2021/22: CHF 763.7 million).

Reflecting the continued expansion of the Group's audiology care network, cash consideration for the acquisitions, including HYSOUND in China, was CHF 261.1 million. This was down from CHF 596.2 million in the previous year, which included the acquisition of the consumer division of Sennheiser and Alpaca Audiology. In summary, this resulted in a free cash flow of CHF 274.4 million (2021/22: CHF 167.6 million). The cash outflow from financing activities of CHF 545.2 million reflects dividend payments of CHF 267.6 million and net share repurchases of CHF 486.5 million, primarily related to the share repurchase program, partially offset by net loans of CHF 319.2 million.

Balance sheet
Cash and cash equivalents were CHF 413.9 million compared to CHF 610.5 million at the end of the 2021/22 fiscal year. Net working capital was CHF 89.5 million (end 2021/22: CHF 15 million). Collection of accounts receivable continued to be good, while the Group maintained a greater margin of safety to address shortfalls in the supply of microelectronic components. The increase primarily reflects the aforementioned build-up of trade receivables related to the acquisition of Sennheiser's consumer division, with lower provisions. Mainly due to increased M&A activity, capital employed increased to CHF 3,727.3 million compared to CHF 3,439.1 million at the end of the 2021/22 fiscal year.

Group assets of CHF 2,231.4 million represent an equity ratio of 40.2%, compared to 43.5% at the end of the 2021/22 financial year. The decrease mainly reflects the purchase of shares under the share repurchase program, dividend payments and negative exchange rate effects. The purchase of CHF 421.5 million under the new share buyback program also affected the net debt position, which increased to CHF 1,495.9 million compared to CHF 1,006.3 million at the end of March 2022. net debt/EBITDA ratio was 1.5x, which is the upper end of Sonova's target range of 1.0 to 1.5x. The return on invested capital (ROCE) reached 20.8% compared to 24.1% the previous year.

capital distribution
The board of management will propose to the annual meeting of shareholders in June 2023 a dividend of CHF 4.60 per share, which represents an increase of 5% compared to the previous year. In terms of capital allocation, Sonova will continue to prioritize acquisitions that create value. The Group will take a balanced approach to any additional share repurchases under the current share repurchase program, focusing on a healthy balance sheet and moderate leverage. With a net debt/EBITDA ratio at the high end of the 1.0-1.5x target range at the end of fiscal year 2022/23, Sonova does not currently anticipate a share repurchase in fiscal year 2023/24.

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Outlook 2023/24
Sonova's business fundamentals remain strong despite continued macroeconomic volatility. With its proven strategy and continuous innovation, the Group is well poised to capitalize on growth opportunities in the attractive hearing aid market. This market has shown signs of recovery in recent months, although uncertainty remains in the short term. For fiscal 2023/24, Sonova expects consolidated sales growth of 3-7% and adjusted EBITA growth in the range of 6-10%, measured at constant exchange rates.

For performance in the first half of the 2023/24 financial year. The greater base of comparison of the previous year will be affected, as well as the effect of the non-renewal of the contract with the main client in the US mentioned above, which will be annualized at the end of the first semester. In addition, taking into account the anticipated tapering off of cost pressures and increasing benefits from improvement initiatives, Sonova expects annual sales growth and adjusted EBITA, measured at constant exchange rates, to be significantly higher. low in the first half compared to the second.

Reflecting May 2023 exchange rates, Sonova expects reported sales growth in Swiss francs to decline by 4-5% percentage points and adjusted EBITA growth in Swiss francs to be negatively affected by 8- 9% percentage points in fiscal year 2023. /24.

The online annual report 2022/23 is available at:

Annual report for 2022/23. is available on our website at:

Presentation of comprehensive results 2022/23. you can download at:

- Fin-


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This press release contains forward-looking statements that are not guarantees of future performance. These statements are based on management's views and assumptions about future events and business performance at the time the statements are made. They are subject to risks and uncertainties, including, but not limited to, future global economic conditions, currency exchange rates, legal provisions, market conditions, competitive activities, and other factors beyond Sonova's control. If one or more of these risks or uncertainties materialize or if underlying assumptions prove incorrect, actual results could differ materially from those projected or expected. All forward-looking statements speak only as of the date of the particular statement, and Sonova does not undertake any obligation to publicly update or revise any forward-looking statement, except as required by law.

O Sonovi
Sonova is a world leader in innovative hearing care solutions – from personal audio devices and wireless communication systems to hearing care services, hearing aids and cochlear implants. The group was founded in 1947 and is headquartered in Stefa, Switzerland.

Sonova operates through four businesses: hearing aids, hearing care, consumer hearing and cochlear implants, and the flagship brands Phonak, Unitron, AudioNova, Sennheiser (under license) and Advanced Bionics, as well as well-known local brands. The Group's globally diverse sales and distribution channels serve an ever-growing consumer base in more than 100 countries.

In the financial year 2022/23. The group achieved sales of CHF 3.7 billion, with a net profit of CHF 658 million. More than 17,000 employees work to realize Son's vision of a world where everyone enjoys the pleasure of listening.

For more information

Sonova shares (symbol: SOON, security number: 1254978, ISIN: CH0012549785) have been listed on the SIX Swiss Exchange since 1994.Sonova's securities have not been and will not be registered under the US Securities Act of 1933 as amended (the "US Securities Act") or applicable securities laws of any state of the United States of America. or sold in the United States except as an exception to the registration requirements under the United States Securities Law and under applicable state securities laws or outside the United States in countries outside the United States. pursuant to Regulation S of the US Securities Act.

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