By Alberto Chiumento
(Reuters) -Italian hearing aid company Amplifon on Thursday reported a core profit margin below annual guidance and a drop in net profit, pushing its shares down as much as 15.7%, the lowest level since May 2020.
Amplifon, which cut the initial 24.6% margin target twice over the past year to 24.0%, posted a 2024 margin of 23.6%, citing a lower operating leverage due to market softness in the EMEA (Europe, Middle East and Africa) region and strong investments ahead.
It reported an 8.5% drop in its recurring net profit to 151.7 million euros ($163.7 million), hit by higher depreciation, amortization and financial expenses.
“The U.S. market continued to grow strongly and in line with our expectations at circa 6%, but Europe, our core geography, was weaker than expected, mainly because of the negative performance of France”, CEO Enrico Vita said during a conference call.
However for 2025, he forecasts revenue growth to become more geographically balanced between the U.S. region and Europe, which he expects to bounce back.
“The French market, for which we see a 10% revenue growth, will represent an important driver for the entire EMEA market,” Vita said.
Amplifon has forecast mid to high single-digit revenue growth at constant exchange rates for 2025 and anticipates an improved recurring core profit margin of at least 24%.
However, Jefferies said in a note that “2025 guide is shy of expectations.”
Amplifon acquired around 400 retail outlets in 2024, as tech innovation spurred competition in the hearing aid sector.
Swiss rival Sonova last year introduced a first-in-market hearing aid utilising real-time AI, while Apple received U.S. approval for software that it said could transform its headphones into a personalised hearing aid.
But Vita has ruled out competition from Apple, saying the U.S. company aims to serve customers with only mild hearing difficulties.
Amplifon proposed a dividend of 29 euro cents per share, as it had for 2023.
($1 = 0.9265 euros)
(Reporting by Alberto Chiumento in Gdansk; editing by Milla Nissi and David Evans)
