4.11.2024 17:03:20 CET | Demant A/S |
Delårsrapport/Periodemeddelelse (Q1 og Q3)
Selskabsmeddelelse nr. 2024-15 4. november 2024
Periodemeddelelse for Q3 2024
Organisk omsætningsvækst på 2 % i Q3 drevet af meget stærke resultater i Hearing Care
Tidligere implementerede omkostningsbesparende tiltag har medført organisk OPEX-vækst på det planlagte lave niveau
Forventninger til 2024 fastholdes: Organisk vækst på 2-4 % og EBIT før særlige poster på DKK 4.300-4.600 mio.
“I tredje kvartal lå koncernens organiske omsætningsvækst på 2 % takket være de meget stærke resultater, vi har opnået i forretningsområdet Hearing Care. I Hearing Aids påvirkede stærke sammenligningstal og øget konkurrence vores resultater i negativ retning, og derudover var forretningsområderne Hearing Aids og Diagnostics påvirket af afdæmpede markeder i kvartalet. Vi ser nu ind i årets sidste måneder, hvor vi fortsat vil være fokuseret på at levere på vores forventninger og vores ambition om at forbedre livet for så mange mennesker som muligt, der lever med høretab,” siger Søren Nielsen, koncernchef & administrerende direktør for Demant.
Omsætning (DKK mio.)
Vækst
Forretningsområde
Q3 2024
Q3 2023
Organisk
Akkvisitiv
LCY
FX
Rapporteret
Hearing Aids, samlet omsætning
3.004
2.924
2 %
2 %
5 %
-2 %
3 %
Hearing Aids, intern omsætning
-600
-494
18 %
4 %
22 %
0 %
21 %
Hearing Aids, ekstern omsætning
2.404
2.430
-1 %
2 %
1 %
-2 %
-1 %
Hearing Care
2.400
2.152
7 %
5 %
11 %
0 %
12 %
Diagnostics
597
625
-4 %
0 %
-4 %
-1 %
-4 %
Koncern
5.401
5.207
2 %
3 %
5 %
-1 %
4 %
Omsætning (DKK mio.)
Vækst
Forretningsområde
YTD 2024
YTD 2023
Organisk
Akkvisitiv
LCY
FX
Rapporteret
Hearing Aids, samlet omsætning
9.234
9.012
3 %
1 %
4 %
-2 %
2 %
Hearing Aids, intern omsætning
-1.808
-1.594
10 %
4 %
13 %
0 %
13 %
Hearing Aids, ekstern omsætning
7.426
7.418
1 %
1 %
2 %
-2 %
0 %
Hearing Care
7.234
6.660
4 %
4 %
9 %
0 %
9 %
Diagnostics
1.828
1.823
1 %
0 %
1 %
-1 %
0 %
Koncern
16.488
15.901
2 %
2 %
5 %
-1 %
4 %
Medmindre andet er angivet, omhandler nedenstående tekst Q3 2024.
Koncernen leverede organisk vækst på 2 %, som udelukkende var drevet af meget stærke resultater i Hearing Care, samt yderligere vækst på 3 % relateret til akkvisitioner i både Hearing Care og Hearing Aids. Valutakurseffekter lå på -1 %, hvilket betyder, at den samlede rapporterede omsætningsvækst var 4 %.
Hearing Aids opnåede organisk omsætningsvækst fra eksterne kunder på -1 %, hvilket er en smule under vores forventninger i et afdæmpet høreapperatmarked. Denne vækst var påvirket af stærke sammenligningstal, idet den organiske vækst var 25 % i samme periode sidste år, men øget konkurrence påvirkede ligeledes væksten. Udviklingen i den gennemsnitlige salgspris (ASP) fortsatte med at være meget positiv som følge af et stærkt produkt- og kanalmiks. Denne udvikling blev dog mere end udjævnet af negativ stykvækst som følge af lavere salg til mere prisbevidste kanaler og segmenter.
Hearing Care leverede meget stærke resultater og voksede betydeligt mere end markedet, hvilket førte til organisk vækst på 7 %. Dette var drevet af en stærk udvikling i Nordamerika, men flere af vores mellemstore markeder leverede også gode resultater. I Frankrig var væksten flad og på niveau med væksten i markedet, mens Kina fortsat er påvirket af et svagt marked. Akkvisitioner i adskillige markeder bidrog ligeledes til væksten i perioden – med Tyskland som den primære bidragyder.
I Diagnostics var den organiske vækst -4 %, hvilket er lavere end oprindeligt forventet. Forretningsområdet var påvirket af negativ vækst i markedet for diagnostisk udstyr, især i Kina som følge af de aktuelle Made in China-initiativer. Ud over den generelt negative markedsudvikling oplevede vores portefølje af balanceprodukter fortsat negativ vækst. Selvom Diagnostics i øjeblikket oplever modvind, vurderer vi, at vi øgede vores markedsandel i perioden.
Koncernens bruttomargin udviklede sig på niveau med forventningerne og var flad sammenlignet med samme periode sidste år. Ændringer i forretningssammensætningen samt et forbedret produktmiks i Hearing Aids understøttede denne udvikling i bruttomarginen. Derudover bidrog en stærk forbedring af bruttomarginen i Diagnostics til udviklingen. Lavere operationel gearing i Hearing Aids udlignede imidlertid disse positive bidrag.
Vi så organisk OPEX-vækst på niveau med vores antagelse om lav til midt encifret organisk vækst, hvilket afspejler vores bestræbelser på at reducere den organiske OPEX-vækst. Derudover bidrog akkvisitioner til OPEX-væksten, hvilket er i overensstemmelse med vores opkøbsstrategi.
Koncernens EBIT før særlige poster var en smule under vores forventninger som følge af ugunstige valutakurseffekter i Q3. Når vi ser bort fra valutakursbevægelser, resulterede lavere end forventet vækst Hearing Aids og Diagnostics i lavere operationel gearing for koncernen, men de meget stærke resultater i Hearing Care samt den positive effekt på omkostningerne af de tidligere udmeldte omkostningsbesparende tiltag opvejede dette.
Koncernens cashflow er fortsat meget stærkt, men både CFFO og FCF var lavere end sidste år primært som følge af højere finansielle omkostninger. Koncernen bibeholdt et højt niveau af opkøbsaktiviteter og aktietilbagekøb i perioden, hvilket resulterede i stort set flad udvikling i koncernens netto rentebærende gæld i forhold til slutningen af Q2, hvilket betyder, at vi fortsat er på et niveau, der svarer til vores mellemlange til langsigtede mål om en gearing-multipel på 2,0-2,5.
Som forventet led vores ophørende aktiviteter, bestående af Hearing Implants og Communications, tab efter skat i Q3.
Nettoresultatet efter skat i vores forretning for benforankrede høresystemer (BAHS) var positivt. I Q3 lancerede vi det nye aktive transkutane benforankrede høresystem kaldet Sentio™, som fra starten har fået en meget positiv modtagelse.
EPOS havde engangsomkostninger vedrørende omstruktureringen af forretningen, hvilket medførte et tab efter skat for perioden. Efter omstruktureringsprocessen, som blev gennemført i Q3, er EPOS nu på vej til at opnå lønsomhed på EBIT-niveau i Q4.
Pr. 30. september havde koncernen tilbagekøbt aktier for i alt DKK 1.746 mio år til dato.
Forventninger til 2024
Vores forventninger til 2024 er uændrede og opsummeres i nedenstående tabel:
Parameter
Forventninger til 2024
Organisk vækst
2-4 %
EBIT før særlige poster
DKK 4.300-4.600 mio.
Aktietilbagekøb
Ca. DKK 2.300 mio.
Forventningerne er baseret på en række nøgleantagelser som beskrevet nedenfor (ændringer markeret med fed skrift):
Efter lavere end antaget markedsvækst i de første ni måneder af året forventer vi, at stykvækstraten på det globale høreapparatmarked i 2024 vil ligge i den lave ende af den strukturelle vækstrate på 4-6 %, og at høreapparatmarkedet vil se flad udvikling i ASP’en for året.
Vi forventer, at de beløb, der anvendes til mindre virksomhedsopkøb i 2024, vil være større end normalt som følge af dels allerede gennemførte opkøb i 2024, og dels fortsat attraktive opkøbsmuligheder.
I Hearing Aids antages det, at tabet af markedsandel i managed care samt vores manglende evne til at kompensere fuldt ud herfor gennem yderligere salg til de uafhængige forhandlere i USA vil fortsætte på det nuværende niveau i resten af 2024.
For at opnå en bedre balance mellem omsætnings- og OPEX-væksten har vi gennemført nogle omkostningsbesparende tiltag på tværs af koncernen. Hvis vi medregner effekten af disse tiltag, forventer vi sammenlignet med samme periode sidste år at levere lav til midt encifret organisk vækst i OPEX i H2.
Vi forventer et tab efter skat i Communications på DKK 500 mio. Dette kommer efter et større driftsunderskud end forventet i H1 samt engangsomkostninger på DKK 400 mio. i forbindelse med restruktureringen af EPOS.
Efter frasalget af vores CI-forretning i maj 2024 vil vores BAHS-forretning forblive en del af koncernen indtil videre, mens der pågår en evaluering af vores strategiske muligheder. For helåret 2024 forventer vi et tab efter skat i Hearing Implants på DKK 50 mio. som følge af et lidt højere driftstab i CI-forretningen i H1 samt nogle engangsomkostninger relateret til afhændelsen af vores CI-forretning til Cochlear.
Yderligere antagelser omkring den finansielle modellering for 2024, som er opdateret pr. 4. november 2024:
Parameter
Antagelser vedrørende 2024
Akkvisitiv vækst
2 % baseret på omsætning fra akkvisitioner gennemført pr. 4. november 2024
Valutakursvækst
-1 % baseret på valutakurser pr. 4. november 2024 og inkl. effekten af valutakurssikring
Effektiv skattesats
Ca. 24 %
Tab efter skat vedrørende ophørende aktiviteter
Ca. DKK 550 mio., hvoraf omkring DKK 500 mio. relaterer sig til Communications og DKK 50 mio. til Hearing Implants
Særlige poster
Positive med ca. DKK 125 mio.
Telekonference
Demant afholder en telekonference den 5. november 2024 kl. 14.00 CET. Telekonferencen vil blive vist via webcast på vores hjemmeside www.demant.com. Hvis man ønsker at deltage i telekonferencen for at stille spørgsmål, bedes man forhåndsregistrere sig her for at modtage opkaldsdetaljer og adgangskode. Præsentationen, der vises på telekonferencen, vil blive uploadet på vores hjemmeside, kort før konferencen starter.
Yderligere information:
Søren Nielsen, koncernchef og adm. direktør
Telefon +45 3917 7300
www.demant.com
Øvrige kontaktpersoner:
René Schneider, CFO
Peter Pudselykke, Head of Investor Relations
Henrik Axel Lynge Buchter, Manager of External Communications
Ledelseskommentarer
Markedsudvikling
Samlet set så vi positiv, om end lavere end normal, vækst i Q3 på markedet for høresundhed, som vi henvender os til, og som omfatter markederne for høreapparater samt diagnostisk udstyr og services.
Høreapparatmarkedet
Baseret på tilgængelige markedsstatistikker, som dækker ca. totredjedele af markedet for høreapparater, og på vores egne antagelser skønner vi, at det globale høreapparatmarked oplevede stykvækst på ca. 3 % i Q3 sammenlignet med samme periode i 2023. Markedet så lav stykvækst på tværs af de fleste regioner, og vi skønner, at ændringer i geografi- og kanalmikset medførte en moderat positiv ASP-udvikling. I Q3 var værditilvæksten på høreapparatmarkedet således en smule lavere end den lave ende af det normale 4-6 % vækstinterval.
Skønnet stykvækst på markedet for høreapparater pr. region
2024
Region
Q1
Q2
Q3
YTD
Europa
1 %
8 %
1 %
3 %
Nordamerika
10 %
6 %
4 %
6 %
Heraf USA (kommercielt marked)
13 %
6 %
5 %
8 %
Heraf USA (VA)
-1 %
1 %
-1 %
-1 %
Resten af verden
1 %
2 %
4 %
2 %
Global
3 %
5 %
3 %
3 %
Sammenlignet med samme periode i 2023 skønner vi, at markedsstykvæksten i Europa var 1 % i Q3. Væksten var primært drevet af en række mindre markeder, mens de større markeder viste lavere vækst. I Frankrig var væksten flad, da høreapparatmarkedet fortsatte stabiliseringen efter høresundhedsreformen, der blev gennemført i 2021. I Tyskland decelererede væksten en smule og endte med at blive flad efter solid vækst i H1. Væksten i Storbritannien var påvirket af negativ vækst i NHS på grund af stærke sammenligningstal, hvorimod væksten i det kommercielle marked var solid.
Væksten i Nordamerika var 4 % i Q3. I forhold til H1 var der en opbremsning på det kommercielle marked i USA, men fortsat solid vækst, som var drevet ligeligt af segmenterne for egenbetaling og for forsikringsdækket behandling (managed care). I Veterans Affairs (VA) var markedsvæksten negativ og fortsatte med at halte bagefter det amerikanske kommercielle marked, hvilket er en fortsættelse af udviklingen i H1. Canada oplevede vækst, om end der var en opbremsning i vækstraten efter flere perioder med stærk vækst.
Ser vi ud over Europa og Nordamerika, vurderer vi, at markedsstykvæksten i Resten af verden-regionen var 4 %. Væksten i Japan var moderat negativ, mens Kina var påvirket af lette sammenligningstal, som førte til vækst, selvom markedsforholdene samlet set fortsat byder på udfordringer. Australien oplevede god vækst, og vi vurderer, at også flere vækstmarkeder så solid vækst i Q3.
Markedet for diagnostisk udstyr
Vi skønner, at markedsvækstraten i Q3 var negativ sammenlignet med samme periode sidste år. Dette skyldes meget lav efterspørgsel efter diagnostisk udstyr samt modvind på det kinesiske marked som følge af de aktuelle Made in China-initiativer, som mere end udlignede væksten på markederne for services og engangsprodukter i Q3.
Hearing Aids
Den organiske vækst i salget til eksterne kunder var -1 % i Q3, hvilket er en smule under vores forventninger i et afdæmpet høreapperatmarked. Væksten i perioden var påvirket af stærke sammenligningstal, da den organiske vækst var 25 % i samme periode sidste år, men øget konkurrence påvirkede fortsat væksten. Som forventet var vores resultater ligeledes påvirket af negativ vækst i managed care i USA. Udviklingen i ASP’en var fortsat meget positiv som følge af et stærkt produkt- og kanalmiks. Denne udvikling blev dog mere end udjævnet af negativ stykvækst som følge af lavere salg til mere prisbevidste kanaler og segmenter. Hvis man ser på den sekventielle udvikling, så estimerer vi, at vi har bibeholdt vores markedsandel i Q3.
I Europa var den organiske vækst flad drevet af gode resultater i vores mellemstore markeder. I Frankrig og Tyskland førte den flade markedsvækst og konkurrencesituationen til negativ vækst. I Storbritannien var væksten ligeledes negativ.
I Nordamerika så vi negativ organisk vækst som følge af stærke sammenligningstal og øget konkurrence. Væksten i USA var fortsat også påvirket af negativ vækst i managed care, selvom vi vurderer, at vores markedsandel i denne kanal har stabiliseret sig sekventielt. Ud over negativ vækst i managed care så vi vækst i salget til VA som følge af vundne markedsandele. I Canada var væksten moderat positiv.
I Asien var den organiske vækst positiv trods fortsat afdæmpede markedsforhold i Kina. I Japan var væksten moderat positiv. I Pacific-regionen så vi negativ organisk vækst, mens vi så positiv organisk vækst i vores Resten af verden-region, som hovedsageligt omfatter udviklingsmarkeder.
Hearing Care
Hearing Care leverede meget stærke resultater og en organisk vækst på 7 % i Q3, hvilket er betydeligt over markedsvækstraten. Den akkvisitive vækst var 5 %, drevet af især Tyskland og Belgien, men også af en række akkvisitioner i andre markeder. Den organiske vækst var drevet af en stærk udvikling i Nordamerika, men væksten var bredt funderet, idet flere af vores mellemstore markeder også leverede gode resultater. Væksten var primært drevet af styksalget, men vi oplevede også en smule medvind fra en stigning i ASP’en som følge af positive ændringer i produkt- og geografimiks.
Europa leverede flot organisk vækst takket være positiv udvikling på flere af vores mellemstore markeder, særligt Polen. Frankrig, som er vores største marked i Europa, leverede flad vækst på niveau med markedsvæksten i landet.
I Nordamerika var den organiske vækst meget stærk og drevet af USA, hvor væksten accelererede i Q3 trods en fortsat negativ effekt af mindre trafik i butikkerne genereret af kunder dækket af managed care. Canada oplevede fortsat stærkt momentum, hvilket blev yderligere understøttet af mindre akkvisitioner.
Hvis vi kigger på vores øvrige regioner, oplevede Australien meget stærk organisk vækst understøttet af en positiv markedsudvikling, mens væksten i Kina fortsat var negativt påvirket af et svagt marked.
Diagnostics
Den organiske vækst i Diagnostics var -4 %, hvilket er lavere end oprindeligt forventet. Efter flere års stærk vækst medførte et afdæmpet marked for diagnostisk udstyr negativ vækst i Q3, særligt i Kina som følge af de aktuelle Made in China-initiativer. Resultaterne var yderligere påvirket af fortsat negativ vækst inden for balanceprodukter. Hvis vi kigger på vores globale resultater på tværs af produktkategorier, vurderer vi ikke desto mindre, at vi fortsatte med at øge vores markedsandel i Q3 sammenlignet med samme periode sidste år. Vi så vækst i forretningerne for services og engangsprodukter.
I geografisk henseende leverede vi organisk vækst i Europa, hvor vi så pæn vækst i flere markeder, særligt i Tyskland og Frankrig. I Nordamerika var væksten en smule negativ som følge af negativ vækst i USA, mens væksten var udpræget negativ i Asien.
Kontakter
Henrik Axel Lynge Buchter, External Communication Manager, Corporate Communication & Sustainability, +45 2264 9982, heey@demant.com
Om Demant A/S
Demant is a world-leading hearing healthcare group that offers solutions and services to help people with hearing loss connect with the world around them. In every aspect, from hearing devices, hearing implants, diagnostics to audio and video solutions and hearing care all over the world, Demant is active and engaged. Our innovative technologies and know-how help improve people’s health and hear-ing. We create life-changing differences through hearing health.
Vedhæftninger
2024-15 Periodemeddelelse for Q3 2024.pdf
4.11.2024 17:03:20 CET | Demant A/S |
Interim report (Q1 and Q3)
Company announcement no 2024-15 4 November 2024
Interim Management Statement for Q3 2024
Organic revenue growth of 2% in Q3 driven by very strong performance in Hearing Care
Earlier implemented cost-saving initiatives led to organic OPEX growth at the planned low level
Outlook for 2024 maintained: Organic growth of 2-4% and EBIT before special items of DKK 4,300-4,600 million
“In the third quarter, the Group’s organic revenue growth was 2%, thanks to very strong performance in our Hearing Care business area. In Hearing Aids, strong comparative figures and an increased competitive environment weighed on our performance, while we also saw an impact from soft markets in the quarter for both the Hearing Aids and Diagnostics business areas. As we look to the rest of the year, we remain focused on delivering on our expectations and on our ambition to improve the lives of as many people living with hearing loss as possible,” says Søren Nielsen, President & CEO of Demant.
Revenue (DKK million)
Growth
Business area
Q3 2024
Q3 2023
Organic
Acquisitive
LCY
FX
Reported
Hearing Aids, total revenue
3,004
2,924
2%
2%
5%
-2%
3%
Hearing Aids, internal revenue
-600
-494
18%
4%
22%
0%
21%
Hearing Aids, external revenue
2,404
2,430
-1%
2%
1%
-2%
-1%
Hearing Care
2,400
2,152
7%
5%
11%
0%
12%
Diagnostics
597
625
-4%
0%
-4%
-1%
-4%
Group
5,401
5,207
2%
3%
5%
-1%
4%
Revenue (DKK million)
Growth
Business area
YTD 2024
YTD 2023
Organic
Acquisitive
LCY
FX
Reported
Hearing Aids, total revenue
9,234
9,012
3%
1%
4%
-2%
2%
Hearing Aids, internal revenue
-1,808
-1,594
10%
4%
13%
0%
13%
Hearing Aids, external revenue
7,426
7,418
1%
1%
2%
-2%
0%
Hearing Care
7,234
6,660
4%
4%
9%
0%
9%
Diagnostics
1,828
1,823
1%
0%
1%
-1%
0%
Group
16,488
15,901
2%
2%
5%
-1%
4%
Unless otherwise indicated, the commentary below relates to Q3 2024.
The Group saw organic growth of 2%, driven entirely by very strong performance in Hearing Care, with additional growth of 3% related to acquisitions in both Hearing Care and Hearing Aids. Exchange rate effects were -1%, leading to total reported revenue growth of 4%.
Hearing Aids saw organic growth in revenue from external customers of -1%, which is slightly below expectations in a soft hearing aid market. This growth was impacted by a strong comparative base, as organic growth was 25% in the same period last year, but an increased competitive environment also impacted growth. The development in the average selling price (ASP) continued to be very positive due to a strong product and channel mix. However, this was more than offset by negative unit growth due to lower sales to more price-focused channels and segments.
Hearing Care delivered very strong performance and significantly outgrew the market, leading to organic growth of 7%. This was driven by strong development in North America, but several of our medium-sized markets also performed very well. In France, growth was flat and in line with market developments, while China continues to be impacted by weak market dynamics. Acquisitions in several markets also contributed to growth in the period, with Germany as the primary contributor.
In Diagnostics, organic growth was -4%, which is lower than originally expected. The business area was impacted by negative growth in the market for diagnostic instruments, particularly in China due to the ongoing Made in China initiatives. In addition to the generally negative market development, growth continued to be negative for our portfolio of balance products. Despite the current headwinds experienced by Diagnostics, we estimate that we gained market share in the period.The Group’s gross margin developed in line with expectations and was flat when compared to the same period last year. Changes in the business mix and the improved product mix in Hearing Aids supported the gross margin. A strong improvement in the gross margin in Diagnostics was also a contributing factor. However, lower operating leverage in Hearing Aids offset these positive drivers.
OPEX saw organic growth in line with our assumptions of growth in the low-to-mid single digits, reflecting our focused efforts to reduce organic OPEX growth. Acquisitions contributed further to OPEX growth in line with our acquisition strategy.
The Group’s EBIT before special items was slightly below expectations due to unfavourable changes in the foreign exchange rates in Q3. When excluding exchange rate movements, lower-than-expected revenue growth in Hearing Aids and Diagnostics resulted in lower operating leverage for the Group, but the very strong performance in Hearing Care and positive impact on costs of the earlier announced cost-saving initiatives offset this impact.
The Group’s cash flow generation continued to be very solid, but primarily due to higher financial expenses, CFFO and FCF were lower than last year. The Group maintained a high level of acquisition activities and share buy-backs in the period, resulting in a roughly flat net interest-bearing debt for the Group compared to the end of Q2, with the gearing multiple remaining within the medium- to long-term target range of 2.0-2.5.
As expected, our discontinued operations, comprising Hearing Implants and Communications, saw a loss after tax.
The net profit after tax in our bone anchored hearing systems (BAHS) business was positive. In the period under review, we launched the new active transcutaneous bone conduction hearing system, Sentio™, which is seeing a very positive initial reception.
The EPOS business saw one-off charges related to the restructuring of the business, leading to a loss after tax for the period. Following the restructuring process, which was completed in Q3, we are now on track to deliver profitability at EBIT level in Q4.
As at 30 September, the Group had bought back shares totalling DKK 1,746 million year-to-date.
Outlook for 2024
Our outlook for 2024 remains unchanged and is summarised in the table below:
Metric
Outlook for 2024
Organic growth
2-4%
EBIT before special items
DKK 4,300-4,600 million
Share buy-backs
Around DKK 2,300 million
The outlook is based on a number of key assumptions as described below (changes marked in bold):
Following lower-than-assumed market growth in the first nine months of the year, we expect the unit growth rate for the global hearing aid market in 2024 to be at the low end of the structural growth rate of 4-6% and the hearing aid market to see flattish ASP development for the year.
We expect the cash allocated to bolt-on acquisitions in 2024 to be higher than normal due to acquisitions already made in 2024 and a continuously good pipeline of attractive opportunities.
In Hearing Aids, the loss of market share in managed care and the lack of ability to fully compensate through additional sales to independents in the US are assumed to continue at the current low level for the remainder of 2024.
In order to achieve a better balance between revenue and OPEX growth, we have taken certain cost-saving initiatives across the Group. When including the effect of these initiatives, we expect OPEX to grow organically in the low-to-mid single digits in H2 compared to the same period last year.
We expect the loss after tax related to Communications to be DKK 500 million. This follows a higher operating loss than expected in H1 as well as one-off costs of DKK 400 million related to the restructuring of EPOS.
Following the divestment of our cochlear implants (CI) business in May 2024, our bone anchored hearing systems business will remain with the Group for now, pending a review of our strategic options. For the full year 2024, we expect the loss after tax related to Hearing Implants to be around DKK 50 million due to a slightly higher operating loss in cochlear implants in H1 and certain one-off costs related to the divestment of our CI business to Cochlear.
For modelling purposes, we provide further assumptions for 2024 below, which are updated as at 4 November 2024:
Metric
Assumption for 2024
Acquisitive growth
2% based on revenue from acquisitions completed as at 4 November 2024
FX growth
-1% based on exchange rates as at 4 November 2024 and including the impact of hedging
Effective tax rate
Around 24%
Loss after tax from discontinued operations
Around DKK 550 million of which around DKK 500 million relates to Communications and DKK 50 million to Hearing Implants
Special Items
Positive by around DKK 125 million
Conference call details
Demant will host a conference call on 5 November 2024 at 14:00 CET. A live webcast of the call will be available on our website www.demant.com. If you would like to access the conference call to ask questions, please pre-register here to receive the dial-in numbers and access codes. A presentation for the call will be uploaded on our website shortly before the call.
Further information:
Søren Nielsen, President & CEO
Phone +45 3917 7300
www.demant.com
Other contacts:
René Schneider, CFO
Peter Pudselykke, Head of Investor Relations
Henrik Axel Lynge Buchter, Manager of External Communications
Management commentary
Market trends
Overall, the hearing healthcare market we address, which comprises the markets for hearing aids and diagnostic instruments and services, saw positive, but lower-than-normal, growth in Q3.
Hearing aid market
Based on available market statistics, covering around two-thirds of the hearing aid market, and on our own assumptions, we estimate that the global hearing aid market saw unit growth of around 3% in Q3 compared to the same period in 2023. The market saw low unit growth across most regions, and we estimate that geography and channel mix changes resulted in a slightly positive ASP development. Consequently, value growth in the hearing aid market in Q3 was slightly below the lower end of the normal 4-6% growth range.
Estimated hearing aid market unit growth by region
2024
Region
Q1
Q2
Q3
YTD
Europe
1%
8%
1%
3%
North America
10%
6%
4%
6%
Hereof US (commercial)
13%
6%
5%
8%
Hereof US (VA)
-1%
1%
-1%
-1%
Rest of world
1%
2%
4%
2%
Global
3%
5%
3%
3%
We estimate that market unit growth in Europe was 1% in Q3 compared to the same period in 2023. Growth was primarily driven by a number of smaller markets, whereas larger geographies showed lower growth. In France, growth was flat, as the hearing aid market continued to normalise following the hearing healthcare reform in 2021. In Germany, growth decelerated slightly after a solid H1 and ended flat. Growth in the UK was adversely impacted by negative growth in the NHS due to strong comparative figures, whereas growth in the commercial market was solid.
Growth in North America was 4% in Q3. Compared to H1, the US commercial market decelerated but continued to see solid growth, driven equally by the private pay market and managed care. In VA, growth was negative and continues to lag behind growth for the commercial market, which is a continuation of the developments seen in H1. Canada saw growth, although it decelerated from H1 following several periods of strong growth.
Looking beyond Europe and North America, we estimate that growth in our Rest of world region was 4%. Growth in Japan was slightly negative, whereas China was impacted by easy comparative figures, leading to growth, even though overall market dynamics remain challenging. Australia saw good growth, and we estimate that several emerging markets also saw solid growth in Q3.
Diagnostics market
We estimate that, compared to the same period last year, the market growth rate in Q3 was negative. This is due to very soft demand for diagnostic instruments and headwinds in the Chinese market from the ongoing Made in China initiatives, which more than offset growth in the markets for services and consumables in the period.
Hearing Aids
Organic growth in sales to external customers was -1% in Q3, which is slightly below expectations in a soft hearing aid market. Growth in the period under review was impacted by a strong comparative base, as organic growth was 25% in the same period last year, but an increased competitive environment also continued to impact growth. As expected, our performance was also impacted by negative growth in managed care in the US. The development in the ASP continued to be very positive due to a strong product and channel mix. However, this was more than offset by the negative unit growth following lower sales to more price-focused channels and segments. On a sequential basis, we estimate that we have maintained our market share in Q3.
In Europe, organic growth was flat, driven by good performance in several medium-sized markets. In France and Germany, flat market developments and competitive dynamics led to negative growth. In the UK, growth was also negative.
In North America, we saw negative organic growth, which was impacted by a strong comparative base and an increased competitive environment. Growth in the US also continued to be impacted by negative growth in managed care, although we estimate that our market share in this channel has stabilised sequentially. Beyond negative growth in managed care, we saw growth in VA driven by market share gains. In Canada, growth was slightly positive.
In Asia, organic growth was positive, despite continuously weak market dynamics in China. In Japan, growth was slightly positive. In the Pacific region, we saw negative organic growth, whereas organic growth was positive in our Rest of world region, which mostly comprises emerging markets.
Hearing Care
Hearing Care delivered very strong performance and significantly outgrew the market in Q3 with organic growth of 7%. Acquisitive growth was 5%, driven by Germany and Belgium, in particular, but also by a number of acquisitions in other markets. Organic growth was fuelled by strong development in North America, but growth was broad-based, with several of our medium-sized markets also performing very well. Growth was mainly driven by units, but we also saw slight tailwind from an increase in the ASP due to positive product and geography mix changes.
Europe saw strong organic growth thanks to very positive developments in several of our medium-sized markets, particularly Poland. France, which is our largest market in Europe, delivered flat growth in line with market developments in the country.
In North America, organic growth was very strong, driven by the US where we saw an acceleration of growth in Q3, despite a continuously negative impact of lower traffic generated by customers covered by managed care. In Canada, we saw continuously strong momentum, which was further supported by minor acquisitions.
In our other geographies, Australia saw very strong organic growth supported by positive market developments, but in China, growth continued to be negatively impacted by weak market dynamics.
Diagnostics
Organic growth in Diagnostics was -4%, which is lower than our original expectations. Following several years of strong growth, a soft market for diagnostic instruments, particularly in China due to ongoing Made in China initiatives, led to negative market growth in Q3. Performance was further impacted by continuously negative growth in our balance products category. When looking at our global performance across product categories, we nonetheless estimate that we continued to gain market share in Q3 compared to the same period last year. In our services and consumables business, we saw growth.
In terms of geographies, organic growth was positive in Europe where we saw good growth in several markets, particularly in Germany and France. In North America, growth was slightly negative due to negative growth in the US, while growth was particularly negative in Asia.
Contacts
Henrik Axel Lynge Buchter, External Communication Manager, Corporate Communication & Sustainability, +45 2264 9982, heey@demant.com
About Demant A/S
Demant is a world-leading hearing healthcare group that offers solutions and services to help people with hearing loss connect with the world around them. In every aspect, from hearing devices, hearing implants, diagnostics to audio and video solutions and hearing care all over the world, Demant is active and engaged. Our innovative technologies and know-how help improve people’s health and hear-ing. We create life-changing differences through hearing health.
Attachments
2024-15 Interim Management Statement for Q3 2024.pdf
