Sonova Holding AG

For FY2025/26, Sonova reported Hearing Instruments segment sales up 7.5% to CHF 3.4 billion and normalized EBITDA up 17.3% to CHF 794 million, with the margin at 23.7% and up 280 basis points in local currencies. Wholesale sales rose 9.5% to CHF 1.9 billion; Retail sales increased 5.1% to CHF 1.5 billion; Cochlear Implants sales were CHF 252 million, down 11% (or 3.8% excluding China), with normalized EBITDA of CHF 17.2 million and a 6.8% margin. Group EPS grew 16%, and the Board proposed a 7% dividend increase to CHF 4.70 per share, implying a payout ratio of about 45%. For FY2026/27, management guided to consolidated sales growth of 5% to 8% and core EBIT growth of 7% to 10% at constant exchange rates; based on early-May FX, Swiss franc sales growth is expected to be reduced by 1 to 2 percentage points and core EBIT growth by 2 to 3 percentage points. Non-core items are expected to total around CHF 35 million to CHF 40 million.

Eric Bernard struck a confident tone, calling FY2025/26 a very successful year and saying Sonova outperformed the hearing-care market while fully meeting guidance. He emphasized market-share gains in wholesale, especially from Sphere Ultra and Virto R, and said the company ended the year with strong fourth-quarter momentum. Strategically, he reiterated the March plan centered on innovation, multichannel/local execution, and operational excellence, tied to a CHF 6 billion revenue ambition by FY2030/31.

Elodie Carr explained that operating expenses rose only 1.1% despite strong sales, creating substantial operating leverage. She said R&D rose 3.8%, sales and marketing rose 1.5%, and G&A was essentially flat; normalized EBITA increased 17.3%, nearly 3x top-line growth, with a 240 basis point margin improvement in local currencies. She also detailed about CHF 90 million of normalizations, including CHF 28 million of legal costs, about CHF 24 million of product-liability reassessments, and around CHF 35 million of software asset impairments, and noted FX reduced normalized EBITDA by CHF 103 million and the margin by 1.5 percentage points in Swiss francs. On cash and capital allocation, she said operating free cash flow was solid, cash conversion stayed above 90%, acquisitions used CHF 46 million, ROCE was 19%, and net debt to EBITDA improved to 1.1x from 1.2x.

Analysts pressed on what underpins the 5% to 8% sales outlook, especially product launches, market growth, M&A, and the phasing of earnings. Management said Virto R had reached about CHF 120 million annualized revenue, that Costco and U.S. key-account share improved late in the year, and that the second half should benefit from a new hearing-instrument platform and a new cochlear-implant processor, while retail M&A could add 1% to 2% to group sales. Questions also focused on APAC, where management said Japan growth has been very strong and hearing-instrument sales in APAC excluding CI grew by more than 8%, and on non-core items, which CFO said mainly reflect restructuring tied to the operational-efficiency program and acquisition-related transaction/integration costs.