Cochlear (COH) H2 2024 earnings summary

Executive summary

• Sales revenue reached AUD 2.258 billion ($2,258 million), up 15% (12% in constant currency) year-over-year, with strong growth across all business units.

• Underlying net profit rose 27% to AUD 387 million ($387 million); statutory net profit increased 19% to AUD 357 million ($357 million).

• Over 47,000 people received cochlear or acoustic implants, generating an estimated AUD 8 billion ($8 billion) in societal value.

• Completed Oticon Medical acquisition, integrating 20,000 new customers and incurring AUD 28 million ($28 million) in integration costs.

• Employee engagement maintained at 80%, with 1,000 external and 400 internal roles filled.

Financial highlights

• Gross margin steady at 75%, slightly above expectations, supported by improved average selling price.

• Net profit margin at 18.1% pre-cloud, with cloud investments reducing margin by 1 percentage point.

• Operating cash flow rose to $388.8 million; free cash flow increased to $283.1 million.

• Net cash position at $514 million after $43 million in share buybacks.

• Dividend increased 24% to AUD 4.10 ($4.10) per share; final dividend $2.10 per share, payout ratio 69–70% of underlying net profit.

Outlook and guidance

• FY25 underlying net profit guidance of AUD 410–430 million ($410–430 million), a 6–11% increase.

• Targeting 10% long-term sales revenue growth and 18% pre-cloud margin.

• Expecting to help over 50,000 people hear in FY25; cochlear implant unit growth of ~10% anticipated.

• Services growth expected to slow as upgrade cycle matures; Osia segment and acoustics growth to remain strong.

• CapEx to remain elevated at AUD 100–130 million ($110–130 million) for capacity expansion.