Sonova announces preliminary financial results for the 2010/11 year which includes consolidated sales of CHF 1.617 billion, a new record for the company, and an EBITA (before acquisition-related amortization and impairment) of CHF 326.6 million, or 20.2% of net sales.
Net sales increased by 13.3% in local currencies and by 7.8% in Swiss francs mainly due to sales growth in the hearing instrument segment, which recorded sales of CHF 1.546 billion, 10.1% above the previous year. The strong sales result was driven by the successful introduction of the new products on the Spice platform. Sales of hearing implants were CHF 71 million, approximately CHF 60 million below expectation due to the temporary recall of the Advanced Bionics cochlear implants. However, the product is on sale again in a number of countries after TÜV has granted its approval in April 2011.
Creating a new hearing implant division
As previously announced, Sonova has created a hearing implant division that includes Advanced Bionics and Phonak Acoustic Implants. In order to identify joint opportunities and combine the product roadmap, the business plan of the hearing implant division has been reviewed. Having completed this review, Sonova will record an impairment charge of CHF 192 million in total, which is within the range stated on March 16, 2011. CHF 156 million of which relates to the goodwill impairment for Advanced Bionics and is recorded in the restated financial results for 2009/10. Neither the balance sheet adjustments nor the goodwill impairment will impact the 2010/11 financial results. Related to Phonak Acoustic Implants, CHF 36 million of previously capitalized R&D costs will be expensed in the 2010/11 financial year. These costs do not impact the EBITA result for 2010/11; however, they will be reported as one-time impairment costs on the 2010/11 income statement. There is no impact on cash flow from either of these adjustments.
SIX investigation
SIX Swiss Exchange has started an official investigation relating to the share and option transactions before the profit warning of March 16, 2011. This was to be expected and was previously communicated. As stated earlier, the Board of Directors of Sonova will support this investigation in order to allow a complete revelation of the facts.
Unchanged dividend of CHF 1.20
Based on the solid operating performance of Sonova, the Board of Directors will propose to the Annual General Meeting on June 21, 2011 a dividend of CHF 1.20 per share, consistent with last year's amount. This dividend will be paid without withholding taxes from the capital contribution reserve.
Sonova will publish its detailed full-year results for the 2010/11 business year, its annual report 2010/11 and an updated guidance on May 24, 2011.
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