Company announcement no 2022-03 8 February 2022
Annual Report 2021
Very strong performance in 2021 with 27% organic growth and market share gains in Hearing Healthcare
Strong profitability with EBIT of DKK 3,386 million before one-off items, corresponding to EBIT margin of 18.4%
High cash generation in 2021 with CFFO of DKK 3,275 million, supporting share buy-backs of DKK 3.2 billion
Outlook for 2022: Organic growth of 5-9% and EBIT of DKK 3,450-3,750 million
“2021 was a great year for Demant. To our satisfaction, we significantly exceeded our original, ambitious expectations and met our most recent outlook for the year by delivering high organic growth – above the market growth rate in our core segment, Hearing Healthcare – and an all-time high operating profit. Thanks to a great effort made by our employees and our customers’ commitment, our solutions and services have reached even more people, especially through the great success of our flagship hearing aids Oticon More and Philips HearLink and the individual counselling provided to users in thousands of hearing care clinics. Our purpose to create life-changing differences through hearing health has once again proved meaningful, and we have made good progress in our sustainability focus areas, diversity and climate action, which we will continue to work on in the future,” says Søren Nielsen, President & CEO of Demant, and concludes:
“The positive development and further normalisation we saw on the hearing aid and diagnostics markets in the second half-year will carry over into 2022. We thus expect to see strong growth in our core business areas, Hearing Care, Hearing Aids and Diagnostics, which also performed well in 2021, and in 2022, we will resume sales of our cochlear implants, and we expect to see growth in Communications. All of this leads us to present ambitious targets for 2022.”
Revenue (DKK million) |
Growth H2 2021 vs H2 2020 |
Growth FY 2021 vs FY 2020 |
||||||||||
Business area |
|
H1 2021 |
H2 2021 |
FY 2021 |
|
Org. |
Acq. |
LCY |
|
Org. |
Acq. |
LCY |
Hearing Aids |
4,416 |
4,564 |
8,980 |
19% |
-1% |
18% |
34% |
-0% |
34% |
|||
Hereof sales to Hearing Care |
-871 |
-762 |
-1,633 |
11% |
4% |
14% |
43% |
4% |
46% |
|||
Hearing Care |
3,737 |
3,816 |
7,553 |
10% |
4% |
13% |
34% |
4% |
38% |
|||
Hearing Implants |
266 |
246 |
512 |
-13% |
0% |
-13% |
-2% |
0% |
-2% |
|||
Diagnostics |
843 |
980 |
1,823 |
17% |
1% |
18% |
25% |
1% |
25% |
|||
Hearing Healthcare |
|
8,391 |
8,844 |
17,235 |
|
14% |
1% |
15% |
|
31% |
1% |
32% |
Communications |
|
621 |
562 |
1,183 |
|
-27% |
0% |
-27% |
|
-9% |
0% |
-9% |
Group |
|
9,012 |
9,406 |
18,418 |
|
10% |
1% |
11% |
|
27% |
1% |
28% |
Unless otherwise indicated, all commentary is based on figures adjusted for net positive one-off items.
Our outlook for 2022 is summarised in the table below:
Metric |
Outlook for 2022 |
Organic growth |
5-9% |
Acquisitive growth |
1% based on revenue from acquisitions completed as of 7 February 2022 |
FX growth |
2% based on exchange rates as of 7 February 2022 and including the impact of hedging |
EBIT |
DKK 3,450-3,750 million |
Effective tax rate |
22-23% |
Gearing |
Gearing (NIBD relative to EBITDA) in line with medium- to long-term target of 2.0-2.5 |
Share buy-backs |
At least DKK 2.5 billion |
The outlook is based on the following key expectations:
Starting with our next Interim Management Statement to be published on 3 May, we will going forward report revenue and growth rates by business area, by segment and for the Group as a whole in our interim management statements. Growth rates will be reported for Q1 and Q3, respectively, and split by organic, acquisitive and exchange rate growth. As a consequence, our next interim reports and annual reports will include growth rates for Q2 and Q4, respectively. The purpose of these changes is to further enhance transparency in the Group’s financial performance and enable easier comparison to peers.
Demant will host a conference call on 8 February 2022 at 14:00 CET. To attend this call, please use one of the following dial-ins: +45 3544 5577 (DK), +44 3333 000 804 (UK) or +1 6319 131 422 (US). The pin code is 89626182#. A presentation for the call will be uploaded to www.demant.com shortly before the call.
Further information: Søren Nielsen, President & CEO Phone +45 3917 7300 |
Other contacts: René Schneider, CFO Mathias Holten Møller, Head of Investor Relations Trine Kromann-Mikkelsen, VP Corporate Communications and Relations |
(DKK million) |
H2 2021 |
H2 2020 H2 2020 |
Change |
FY 2021 |
FY 2020 |
Change |
Hearing Healthcare |
|
|
|
|
|
|
Revenue |
8,844 |
7,631 |
16% |
17,235 |
13,163 |
31% |
Organic growth |
14% |
2% |
|
31% |
-13% |
|
Gross margin |
77.5% |
74.5% |
|
77.0% |
73.6% |
|
Operating profit (EBIT) |
1,826 |
1,425 |
28% |
3,508 |
1,211 |
190% |
EBIT margin |
20.6% |
18.7% |
|
20.4% |
9.2% |
|
|
|
|
|
|
|
|
Communications |
|
|
|
|
|
|
Revenue |
562 |
760 |
-26% |
1,183 |
1,306 |
-9% |
Organic growth |
-27% |
- |
|
-9% |
- |
|
Gross margin |
48.2% |
52.9% |
|
48.3% |
50.3% |
|
Operating profit (EBIT) |
-78 |
81 |
-196% |
-122 |
102 |
-220% |
EBIT margin |
-13.9% |
10.7% |
|
-10.3% |
7.8% |
|
|
|
|
|
|
|
|
Group |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income statement |
|
|
|
|
||
Adjusted revenue* |
9,406 |
8,391 |
12% |
18,418 |
14,469 |
27% |
Revenue |
9,376 |
8,391 |
12% |
18,388 |
14,469 |
27% |
Adjusted gross margin* |
75.8% |
72.5% |
|
75.2% |
71.5% |
|
Gross margin |
75.0% |
72.1% |
|
74.8% |
70.4% |
|
EBITDA |
2,374 |
1,949 |
22% |
4,536 |
2,578 |
76% |
EBITDA margin |
25.3% |
23.2% |
|
24.7% |
17.8% |
|
Adjusted operating profit (EBIT)* |
1,748 |
1,506 |
16% |
3,386 |
1,313 |
158% |
Adjusted EBIT margin* |
18.6% |
17.9% |
|
18.4% |
9.1% |
|
Operating profit (EBIT) |
1,807 |
1,416 |
28% |
3,445 |
1,530 |
125% |
EBIT margin |
19.3% |
16.9% |
|
18.7% |
10.6% |
|
Net financial items |
-99 |
-106 |
-6% |
-202 |
-194 |
4% |
Profit for the period |
1,345 |
1,013 |
33% |
2,528 |
1,134 |
123% |
|
|
|
|
|
|
|
Balance sheet |
|
|
|
|
|
|
Total assets |
24,860 |
21,927 |
13% |
24,860 |
21,927 |
13% |
Net interest-bearing debt (NIBD) |
9,150 |
7,135 |
28% |
9,150 |
7,135 |
28% |
Equity |
7,981 |
8,279 |
-4% |
7,981 |
8,279 |
-4% |
|
|
|
|
|
|
|
Cash flow statement |
|
|
|
|
|
|
Adjusted cash flow from operating activities (CFFO)* |
1,764 |
1,944 |
-9% |
3,275 |
2,710 |
21% |
Cash flow from operating activities (CFFO) |
1,764 |
1,892 |
-7% |
3,275 |
2,621 |
25% |
Investment in property, plant and equipment, net |
339 |
251 |
35% |
542 |
493 |
10% |
Free cash flow |
1,291 |
1,534 |
-16% |
2,525 |
2,023 |
25% |
Share buy-backs |
1,387 |
- |
n.a. |
3,200 |
197 |
1,524% |
|
|
|
|
|
|
|
Other key figures |
|
|
|
|
|
|
Return on equity |
31.3% |
25.7% |
|
30.7% |
14.3% |
|
Equity ratio |
32.1% |
37.8% |
|
32.1% |
37.8% |
|
Gearing (NIBD/EBITDA) |
2.0 |
2.8 |
|
2.0 |
2.8 |
|
Earnings per share (EPS), DKK |
5.76 |
4.18 |
38% |
10.70 |
4.68 |
129% |
Free cash flow per share (FCFPS), DKK |
5.56 |
6.40 |
-13% |
10.75 |
8.44 |
27% |
Price earnings (P/E) ratio |
58.8 |
57.6 |
2% |
31.3 |
51.4 |
-39% |
Share price, end of period, DKK |
335.10 |
240.60 |
39% |
335.10 |
240.60 |
39% |
Average number of shares outstanding, million |
234.82 |
239.78 |
-2% |
234.82 |
239.78 |
-2% |
Market capitalisation |
77,117 |
57,718 |
34% |
77,117 |
57,718 |
34% |
Average number of employees |
17,817 |
16,203 |
10% |
17,500 |
16,155 |
8% |
Scope 1 & 2 CO2e emissions (tonnes) |
- |
- |
|
30,555 |
23,115 |
32% |
CEO remuneration ratio |
- |
- |
|
35 |
36 |
|
Gender diversity, all employees (women/men) |
- |
- |
|
62/38% |
60/40% |
|
Gender diversity, management (women/men) |
- |
- |
|
43/57% |
42/58% |
|
Gender diversity, Board of Directors (women/men)** |
- |
- |
|
40/60% |
40/60% |
|
|
|
|
|
|
|
|
* Adjusted for one-off items in 2020 and 2021.
** Shareholder-elected members.
Demant is a world-leading hearing healthcare group that offers solutions and services to help people with hearing loss connect with the world around them. In every aspect, from hearing devices, hearing implants, diagnostics to audio and video solutions and hearing care all over the world, Demant is active and engaged. Our innovative technologies and know-how help improve people’s health and hear-ing. We create life-changing differences through hearing health.