Amplifon trims margin forecast as higher marketing costs weigh (updated)
30/10/2024 13:12
(Writes through with details on outlook, results and context)
Oct 30 (Reuters) - Italian hearing aid company Amplifon
AMPF.MI slightly lowered its annual margin guidance on
Wednesday, after the metric was hit by higher marketing costs in
Europe in the third quarter.
The company said it expected its recurring core profit
margin to be broadly in line with 2023, when it posted a margin
of 24%. It had previously forecast a margin of around 24.3% for
this year.
Its third-quarter core profit margin was 20.3% of revenue,
down 40 basis points from last year due to lower operating
leverage and higher marketing investments to overcome market
softness in the Europe, Middle East and Africa (EMEA) region.
Revenue grew 8% at constant exchange rates to 567.6 million
euros ($613.75 million), driven by a 15.3% rise in the Americas,
Amplifon's second biggest market that generates about 22% of its
total sales.
Its biggest market, EMEA, saw slower 3.8% revenue growth due
to a "still soft European market", Amplifon said.
"We continued along our revenue growth path thanks to an
above-market organic performance and the significant
contribution of acquisitions," CEO Enrico Vita said in the
statement.
However, recurring net profit slumped 25.5% to 17.5 million
euros due to increased financial expenses and higher
depreciation and amortization following acquisitions.
Shares in Amplifon were down 2.9% at 1300 GMT, little
changed from before the report was published.
Tech-driven competition in the hearing aid sector is
intensifying after Switzeland's Sonova SOON.S launched a
first-in-market hearing device utilising real-time AI, and Apple
AAPL.O received U.S. approval for software that it said could
transform its headphones into a personalized hearing aid.
Analysts have however said that Apple's move was not a
concern for hearing aid players as over-the-counter devices
target different population than prescription-based aids.
The Milan-based company confirmed its full-year revenue
guidance for high single-digit percentage growth at constant
exchange rates.
($1 = 0.9248 euros)
(Reporting by Alberto Chiumento in Gdansk; editing by Milla
Nissi)
((Alberto.chiumento@thomsonreuters.com))