In the first half-year, the Group realised a growth rate of 8% in local currencies, corresponding to revenue of DKK 4,539 million. The Group’s core business, wholesale of hearing aids, realised unit growth, clearly exceeding unit growth in the market. A continued roll-out of new products is planned for the third quarter.
The period under review was characterised by a high level of spending and investments in relation to the establishment of a new distribution centre, the transfer of ITE production to Poland, the roll-out of global IT projects and the expansion of Oticon Medical, all of which will secure future growth and profitability for the Group.
In the first half-year, Oticon Medical continued to deliver double-digit sales growth, both in bone-anchored hearing systems (BAHS) and in cochlear implants (CI). The feedback provided on our CI products at the recently held CI conference in Munich was very encouraging – strongly supported by an independent study, demonstrating in three out of four tests the superior performance of our Saphyr Neo speech processor compared to speech processors from our competitors.
In addition to the adverse effects of current spending on operating profit (EBIT) in the first half-year, foreign exchange rates negatively impacted EBIT by DKK 60-70 million. EBIT reached DKK 834 million, and the EBIT margin was realised at 18.4%. Earnings per share (EPS) were realised at DKK 11.2, matching last year’s level.
The expected continued strong cash flow generation combined with a limited pipeline of acquisition opportunities leaves room for channelling the Group’s substantial excess cash flow back to the shareholders going forward. Therefore, we plan to buy back Company shares worth a total of DKK 2.5-3.0 billion in the period 2014-2016 of which amount we have year-to-date already bought back shares worth DKK 493 million.
We maintain our full-year outlook for 2014, including our expectation to generate growth in both our business activities and to deliver a rise in earnings per share of 5-10%. Acquisitions are expected to contribute by 3-4% to Group revenue in 2014, even though we expect more than half of this impact to be offset by the Group’s weakened invoicing currencies.
