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Sonova full-year profit falls short after loses big US client

Anastasiia Kozlova and Ozan Ergenay
Updated ·2-min read

By Anastasiia Kozlova and Ozan Ergenay

(Reuters) - Sonova Holding AG, the world's largest maker of hearing aids, on Tuesday reported full-year core profit below expectations and said a return to "normal growth rates" would take time given weak consumer sentiment and the loss of a big US customer.

Although the market has recovered from COVID-related lockdowns that prevented people from seeing doctors or audiologists, demand is still subdued by inflation.

Shares opened down 9.2%, making the stock one of the worst performers on the STOXX 600 index. ​

The Swiss group posted adjusted earnings before interest, tax and amortization (EBITA) of 840.4 million francs ($945.44 million) for the fiscal year ended March 31, missing analysts' forecasts of 859.7 million francs in a poll by Vara Research.

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Sales for the fiscal year 2022-23 rose 14.6%, missing expectations for a 15%-19% rise.

A company spokesman told Reuters the loss of a US client he did not name would be a headwind for the first half of the 2023-24 fiscal year and that the company was "carefully observing how consumer confidence is coming back in a difficult inflationary environment".

Nordic peers GN Store and Demant, which reported their first quarter results in April and earlier this month, have raised their full-year outlooks following a stronger-than-expected start to the year.

Sonova said it expected 2023-2024 consolidated sales to increase 3%-7% and adjusted EBITA to grow in the range of 6% to 10%, measured at constant-exchange rates.

"Sonova delivered solid results, even if not fully meeting our initial expectations for the year," Chief Executive Arnd Kaldowski said in a statement.

Although Sonova declined to name the US client, analysts at Jefferies, JP Morgan and Vontobel named it as wholesale group Costco.

Costco could not immediately be reached for comment.

($1 = 0.8889 Swiss francs)

(Reporting by Anastasiia Kozlova and Ozan Ergenay; Editing by Kim Coghill, Sherry Jacob-Phillips and Barbara Lewis)