Denmark-based Demant—the parent group of Oticon, Sonic, Maico, Interacoustics, and several other hearing-related companies—announced an upgrade to its earnings guidance for investors on Tuesday, October 2.
In its interim management statement, the company cited higher-than-expected earnings driven by strong performance in hearing aids and diagnostics. According to the statement, its Hearing Healthcare division has experienced very strong performance so far in H2 with double-digit organic growth. Hearing Care, in particular, has continued to benefit from the positive impact of the hearing healthcare reform in France, and has also seen growth in most other markets, says Demant. In Hearing Aids, the company reports Oticon More and Philips HearLink flagship products are maintaining strong momentum, delivering further market share gains, particularly in the important US market.
Demant also says its Diagnostics division has continued to perform very well and to gain market share thanks to broad-based growth.
Revenue for Oticon Medical has been impacted by the voluntary field recall of non-implanted Neuro Zti implants and the temporary halt in sales of new implants as announced in mid-October. Compared to revenue generated in the months prior to the field corrective action, revenue in hearing implants (ie, its cochlear implant and Ponto bone-anchored hearing system) is currently at a run rate of around 65%, says the company.
Demant reports that, due to coronavirus and possible supply issues, its outlook is still subject to greater uncertainty than usual. “However, supported by the release of some pent-up demand, we still expect to see further gradual recovery in the global hearing healthcare market for the remainder of 2021, and we still expect growth for 2021 as a whole to be close to normal levels of 4-6% per year in developed markets, except in the large government channels, Veterans Affairs (VA) and the NHS,” states the company. “We still believe that the normalization in emerging markets is likely to go beyond 2021. For Communications, we assume that the addressable market will grow at least in line with its structural trend of around 12%, despite strong comparative figures in 2020.”
Says Demant President & CEO Søren Nielsen, “As expected, the positive development that we saw in Hearing Healthcare in the first half-year has continued into the second half and even at such pace that we increase our expectations of profit for the year. Our Hearing Care business area continues to grow, and we have welcomed many new and existing users into our clinics where we offer important personalized counseling and care. To our great satisfaction, Diagnostics continues to see broadly based growth, and our flagship hearing aids are doing extremely well, with particularly Oticon More driving market share gains. Going forward, Hearing Implants will be negatively impacted after our voluntary field corrective action in cochlear implants, but we are happy to see our employees acting with great resolve to support patients and customers. All in all, I have great confidence in the Demant Group and our ability to exit 2021 on a high note.”