Demant's revenues improve with easing of COVID-19 lockdown restrictions.
NORDIC BUSINESS REPORT-June 18, 2020-Demant's revenues improve with easing of COVID-19 lockdown restrictions
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Demant A/S (CPH:DEMANT), a hearing health care company within hearing aids, audiometric equipment and personal communication, on Wednesday reported that the hearing healthcare market conditions are now improving due to gradual re-opening of society after restrictions due to the COVID-19 pandemic.
According to Demant, as governments have eased COVID-19 restrictions, the demand for hearing healthcare solutions has increased gradually in recent weeks, and the group's revenue run rate (including EPOS) is currently 50% to 60% of its original expectations, which was 30% at the beginning of May 2020.
In the hearing aid wholesale business, the revenue run rate has increased to currently 60% to 70% of the company's original expectations (20% at the beginning of May 2020). Following the ease of restrictions, market conditions have improved significantly in a number of European markets, including most of the Nordic countries, Germany and Switzerland. In France, Spain and Italy, the pace of the initial recovery has been slower, and in the UK, the activity level remains very low. In the US, Demant is seeing significant differences in the activity level from one state to the other.
In Asia, the company continues to see the activity level in China approaching normalisation, but in other parts of the world, including South America, the hearing healthcare market is still severely impacted by COVID-19. In Hearing Implants, the revenue run rate is currently 30% to 40% of Demant's original expectations, which was 20% at the beginning of May 2020. The company's bone anchored hearing systems (BAHS) business is improving faster than its cochlear implants (CI) business.
Also, in Diagnostics, the revenue run rate is currently 60% 70% of Demant's original expectations, which was 60% at the beginning of May 2020. Overall, the number of new orders has increased in recent weeks, but sales in a number of emerging markets are still severely impacted. In Communications (EPOS), the revenue run rate is still around 120% compared to the company's original plan of 120% at the beginning of May, due to continued strong demand for headsets driven by the increased usage of virtual collaboration tools.
The group's outlook for 2020 was withdrawn on 15 March as a direct consequence of COVID-19 pandemics. While restrictions due to lockdowns have been eased in many markets in recent weeks, Demant said it still lack visibility when it comes to the pace of the ongoing recovery towards normalisation of the hearing healthcare market, especially in some of its main markets. Consequently, it is still not able to provide a financial outlook for 2020.
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|Publication:||Nordic Business Report|
|Date:||Jun 18, 2020|
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