Double-digit organic growth in first half driven by successful launch of Oticon
Agil
Powerful corporate momentum results in upgraded outlook for 2010
William Demant Holding A/S today published its Interim Report 2010 for the
first half-year. Selected interim highlights are summarised below:
In the first half of 2010, the Group realised revenues of DKK 3,328 million,
or a 21% rise on the same period last year.
Corporate organic growth in the period under review was 13%. The three main
business activities all generated double-digit organic growth in the first
half-year, to which should be added the effects of acquisitions and exchange
movements.
Growth in Hearing Aids was in particular driven by the successful launch of
Oticon Agil, which is Oticon's second generation of wireless hearing aids. Agil
has in record time achieved status as the world's best-selling high-end hearing
aid. Unit sales in our corporate wholesale business improved by almost 9%.
In the period under review, the Group gained sizeable market shares. The
global market for hearing aids in the first six months of 2010 is estimated to
have grown by 3% in terms of units.
Operating profits (EBIT) constituted DKK 666 million, or an 18% increase on
the first half of 2009. The consolidated profit margin of 20.0% was adversely
affected by costs to the tune of DKK 50-70 million related among other things
to the Agil introduction and the employee share ownership plan that we carried
through in the first half-year. These costs are not expected to recur in the
second half-year
Based on the favourable trends in the first six months combined with our
anticipation of continued growth corporate outlook has been upgraded. We now
expect corporate wholesale of hearing aids in 2010 to outmatch market growth by
8-10% in terms of value, which is 5 percentage points above our most recent
forecast. We also expect the second half-year to produce a profit margin that
exceeds that of the first six months.
Based on the announced considerations on the Group's capital structure, we
have decided that we will seek to have a consolidated net debt of around DKK
1.0-1.5 billion, which means that in the coming period, the Company will once
again be able to buy back shares, but whether such buyback will actually occur
before year-end 2010 will depend on current consolidated cash flows and the
extent of acquisitions carried through in the second half-year.
