Sonova HY sales up in local FX but slip 1% in Swiss francs on currency impact

Investing.com -- Sonova Holding AG (SIX:SOON) on Friday reported a 4.9% rise in first-half sales in local currencies but a 1% decline in Swiss francs, as exchange-rate movements cut reported results despite operational gains.

The Stäfa-based company posted CHF 1.82 billion in sales for the six months ended September, with currency effects, mainly a weaker U.S. dollar, reducing reported revenue by CHF 106.8 million. 

Normalized EBITA increased 16% in local currencies to CHF 316.1 million, lifting the normalized margin to 17.4%, while reported EBITA fell 6.6% in Swiss francs to CHF 287.5 million.

“We are pleased to see strong momentum in our two largest businesses,” CEO Eric Bernard said in a statement, adding that recent hearing-aid launches “build on our leadership in AI and innovation” and that Audiological Care “continued to outperform the market.”

Sales growth was concentrated in the Hearing Instruments and Audiological Care operations, which together rose 7% in local currencies. 

The company said these gains translated into continued market-share increases. By contrast, the Consumer Hearing and Cochlear Implants businesses declined, affected in part by tariff-related pressures and market developments in China.

Gross profit reached CHF 1.28 billion, up 3.6% in local currencies but down 2.7% in Swiss francs. 

The Swiss hearing-care group said higher volumes and pricing in its two largest businesses supported results, while ramp-up and regionalization of manufacturing and logistics, along with lower Consumer Hearing sales, weighed on margins. The gross margin stood at 70.3%.

Normalized operating expenses before acquisition-related amortization edged down 0.2% in local currencies to CHF 960 million, reflecting cost-efficiency measures and lower one-time launch spending than in the prior-year period. 

Research and development costs rose 2.4% in local currencies to CHF 113.7 million. Basic earnings per share were CHF 3.16, up 10.4% in local currencies.

In its largest business area, Hearing Instruments, sales totaled CHF 1,683.2 million, up 5.7% in local currencies and nearly flat in Swiss francs. 

The company cited strong contributions from the Phonak Audéo Infinio and Audéo Infinio Sphere families. 

Audiological Care revenue rose 5.8% in local currencies to CHF 706.5 million, supported by organic growth and acquisitions. Consumer Hearing fell 11.6% in local currencies to CHF 96.8 million.

Cochlear Implants revenue declined 4.8% in local currencies to CHF 132.2 million, with system sales affected by tariffs and the introduction of volume-based procurement in China.

The segment recorded a reported EBITA loss of CHF 17.3 million, including legal costs tied to a global patent-litigation settlement.

Operating cash flow increased to CHF 241.2 million, while operating free cash flow fell to CHF 68.9 million, as higher net investment in financial assets offset lower spending on tangible and intangible assets. Cash and cash equivalents stood at CHF 500.5 million.

The company reaffirmed its full-year outlook for 5%-9% sales growth and 14%-18% normalized EBITA growth at constant exchange rates.