Company Interview / Cochlear's CEO on why he still believes it's a sound investment

Key points:

Underlying net profit for Cochlear (ASX:COH) fell 9% in the first half, impacted by delays in Nexa rollout Sales revenue grew 1%, with over 80% of developed market sales now from the Nexa system Stronger Australian dollar has negatively influenced earnings, with a $30 million expected impact in H2 Recovery anticipated in cochlear implant and acoustics revenues, with confidence in long-term strategy despite share price volatility

Cochlear (ASX:COH) has reported a 9% fall in underlying net profit to $195 million for the first half, with CEO Dig Howitt stating that delays in contracting and price negotiations for the new Nexa implant system weighed on earnings. Cochlear now expects full-year profit to hit the lower end of its guidance range, between $435 million and $460 million. Howitt points to a 1% rise in sales revenue, but in constant currency terms, revenue was down 2%, largely due to a stronger Australian dollar.

Howitt highlights that more than 80% of sales in developed markets now involve the Nexa implant, and price increases have been delivered as targeted in key markets. A 10% lift in cochlear implant sales in November and December is seen as encouraging, supporting expectations of a much stronger second half. Growth is anticipated across all three revenue lines, particularly in the US and Western Europe. While acoustics revenue was lower due to a competitor's product launch, Howitt expects sales to recover in the coming half.

Addressing the share price fall, which is down roughly 25% over the year, Howitt remains confident in the company’s strategy, citing ongoing volatility but stressing commitment to long-term growth. Developments like Apple’s AirPods are viewed as raising awareness of hearing loss.