Cochlear Limited (COH)
BUY

New processor = earnings upgrades

 22 Aug 2022
Sector: Health Care

FY22 result

Need To Know

  • FY23 NPAT guidance $290-305m, +5-10% FY22
  • Trading conditions improving after COVID/labour affected FY22
  • New processor launch provides potential earnings upgrades for 2023/24

Investment implications

FY22 underlying net profit $277 million, up 18% on pcp. Statutory net profit of $289m was in line with consensus $290m.

FY23 net profit guidance excludes the acquired Oticon business ($30-60m restructuring costs likely), but appears mostly in agreement with consensus, adjusted for Oticon.

NPAT margin gained 120bp to 17%, or 200bp after ex-cloud computing adjustments.

Unit sales 10% above pre-COVID in developed markets with US up 20%. Emerging markets still mixed performance – China and the Middle East up, but Brazil and India still below pre-COVID levels.

COH still holding an estimated 1,000bp market share gain from competitor recalls. With new processor launch in FY23, these gains could for hold for longer than the market currently believes.

FY22 saw interference from COVID and hospital staffing shortages impacting theatre capacity. COH expecting trading conditions to progressively improve in FY23f.

FIGURE 1: FY22 RESULT

View the latest Research Report

Stock overview

Share Price

Company overview

Cochlear is a global leader in implantable hearing solutions. The company produces cochlear implant systems, provides services (sound processor upgrades) and acoustics systems (bone conduction systems).

Disclaimers and Disclosures

Issuer

The information and opinions contained within Sandstone Insights Research were prepared by MST Financial Services Pty Ltd (ABN 54 617 475 180, AFSL 500557) ("MST").

Reliance

Whilst MST make every effort to use reliable, comprehensive information in the construction of its reports, MST make no representation, warranty or undertaking of the accuracy, timeliness or completeness of information in this report. Save for any statutory liability that cannot be excluded, MST and MST employees, representative and agents shall not be liable (whether in negligence or otherwise) for any error or inaccuracy in, or omission from, this advice or any resulting loss suffered by the recipient or any other person.

General Advice

Any advice contained within Sandstone Insights Research is general advice only and has been prepared without taking into account any person’s objectives, financial situation or needs. Any person, before acting on any advice contained within Sandstone Insights Research, should first consider consulting with a financial adviser to assess whether that advice is appropriate for their objectives, financial situation and needs. 

General Disclosures

This report should be read in conjunction with MST Disclaimers and Disclosures and is published in accordance with MST Conflict Management Policy which are available on the MST website: https://www.sandstoneinsights.com.au. 

Currency of Research

The recommendations made in a Sandstone Insights Research report are current as of the publication date. If you are reading a report materially after publication, it is likely that circumstances will have changed and at least some aspects of the analysis may no longer hold.

Access and Use

Any access to or use of Sandstone Insights Research is subject to the Terms of Use. By accessing or using Sandstone Insights Research you hereby agree to be bound by our Terms and Conditions and hereby liable for any monies due in payment of accessing this service. In addition you consent to us collecting and using your personal data (including cookies) in accordance with MST Privacy Policy, including for the purpose of a) setting your preferences and b) collecting readership data so MST may deliver an improved and personalised service to you. If you do not agree to MST Terms of Use and/or if you do not wish to consent to MST use of your personal data, please do not access this service.

Equities Research Methodology

Please click here for information about MST equities research methodology.