Diagnostics outperforms hearing care for Demant in largely bright start to 2024

An all-as-expected sanguinity characterised hearing giant Demant’s first interim management statement of 2024 on May 6, although the company’s optimism was calculated to make it safe to walk in the shadow of an admittedly “slower start”  for hearing care – at zero growth – than the four percent organic growth in hearing aids, and a seven percent growth in diagnostics business.

“These results combined are in line with our expectations, and we maintain our outlook for the year,” said Demant CEO and President Søren Nielsen. “As we look towards the upcoming quarters, we expect to see increased growth, which will be driven by our recently launched hearing aid flagship products, including Oticon Intent,” continued the group’s supremo.

In more detail, those figures drew the following appraisals:

• Diagnostics saw solid performance, leading to organic growth of seven percent in Q1, with strong growth contributions
  from Demant services and hearing instrument fitting solutions businesses.
• Hearing Aids were stable compared to a very strong performance in the comparative period. Demant claims a strong initial reception for its recently launched premium devices, particularly in the independent channel where they have seen sequential market share gains. Growth in the period was entirely driven by the average selling price (ASP), whereas unit growth was negative, in part due to lower sales to certain larger accounts.
• Hearing Care saw a slow start to the year with flat organic growth in Q1, which is slightly below expectations.
  Demant attributes this to dragging momentum in France where traffic and conversion rates were lower than expected. China also held back organic growth, primarily due to weak market dynamics. The Oticon Intent hearing aid has now been introduced to most Demant markets, and this contributed to a positive average selling price in the period.

Demant still awaiting closure on cochlear implant business

The group’s profit after tax from discontinued operations, comprising Hearing Implants and Communications, was nega-
tive and in line with expectations. Demant still expects the divestment of its cochlear implants business to close in the first half of 2024, as well as the completion of a strategic review of its Communications business.

What is Demant’s financial outlook for 2024?

© Demant

The interim news means no change for Demant’s 2024 outlook: organic growth of four to eight percent and EBIT before special items of DKK 4,600-5,000 million (616.7m to 670.3 million euros).

They expect the unit growth rate in the global hearing aid market in 2024 to be in line with the structural growth rate of four to six percent, and the hearing aid market to see a flattish ASP development in the year.
Profit after tax related to Communications is expected to be negative by DKK 100-150 million Danish krone (approximately 13.4 million euros to 20.2 million euros).

Source: Demant