Denmark-based hearing aid manufacturer Widex A/S has announced its results for financial year 2015-16. The Group generated sales of DKK 3,855 million (US$581 million), an increase of 17.7% compared to last year (including foreign exchange rate effects).
EBITA increased to DKK 682 million (US$103 million), or 17.7% of net revenue, an increase of 63.1% or 4.9 percentage points. With these results, the Widex Group says its profitability is on par with the industry and delivers above-market growth.
Highlights also include net working capital at DKK 623 million (US$94 million) or 16.2% of net revenue–a drop of DKK 25 million ($3.8 million) compared to last year, and significant free operational cash flow of 686 million DKK allowing for further investments in R&D, production and business development.
Widex reports that the results are the outcome of the Group’s strategy plan entitled IMPACT (Improve Profitability, Agility, Customer focus and be Truly global). One of the major goals of this plan was to bring profitability on par with competition by the end of 2017—a goal that has now been reached one year earlier than expected.
“Last year we delivered good results, but this year we have surpassed our own expectations,” said Jørgen Jensen, president and CEO of Widex. “Our EBITA is on par with the industry, and we currently have one of the strongest growth rates in the market.”
Key to the positive results is an increase in sales driven by the launch of Widex’s latest hearing aid family, Widex UNIQUE, in October 2015, combined with a number of global and local sales efficiency initiatives. According to the company, it has been successful in consolidating its position in the small and independent segment while exploring new sales channels and landing agreements with the new buying groups. The group has managed to maintain its average sales price, despite general price pressure in the market. At the same time, it has continued its efforts to reduce costs by transferring production to Estonia and optimizing the supply chain, and through more efficient sourcing. This has allowed for increased investments in R&D, production automation technology, and a strengthening of the global sales and marketing footprint.
“We have managed to strengthen our profitability while continuing to invest in R&D and developing our business,” said Jensen. “We have a lot of exciting initiatives in the pipeline and we are very well prepared to drive growth and strengthen profitability even further in the coming year.”