Sonova Sees Profit Growth Slowing on Reimbursement Shifts

Sonova Holding AG (SOON) forecast that profit growth will slow this year because of government reimbursement changes in the Netherlands and Scandinavia and weakening sales in Europe.

Earnings before interest, taxes and acquisition-related amortization and impairments will rise 9 percent to 13 percent in local currencies compared with a 15 percent jump in the 12 months ended March, the Staefa, Switzerland-based company said in a statement today. Sales on that basis will rise 6 percent to 8 percent, versus a 7.4 percent gain in fiscal 2013.

“The real disappointment is the outlook, especially on the back of recent product launches,” Oliver Metzger, an analyst with Commerzbank AG, said in a phone interview today. “It indicates a slowdown in momentum.”

Full-year Ebita fell to 182.8 million Swiss francs ($189 million) from 315.2 million francs in fiscal 2012 after Sonova increased product-liability provisions by 197.8 million francs to cover claims related to a 2006 recall of cochlear implants made by its Advanced Bionics unit. Excluding the one-time charges and currency effects, Ebita increased to 386.4 million francs.

Sonova fell as much as 4.8 percent to 99.60 francs, the steepest intraday drop since April 18, and was trading down 4.3 percent at 9:14 a.m. in Zurich. That propelled the stock to a 1.3 percent decline this year.

Sales increased 11 percent to 1.8 billion francs, in line with the 1.82 billion-franc average of 17 analyst estimates compiled by Bloomberg. The company plans a dividend of 1.60 francs a share.

To contact the reporter on this story: Allison Connolly in London at aconnolly4@bloomberg.net

To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.