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The rise of digital savvy seniors has helped hearing implant giant Cochlear (ASX: COH) boost its net profit by 19 per cent to $357 million as group revenue shot past $2 billion in FY24.
Underlying net profit grew at a faster pace, rising 27 per cent to $386.6 million or 15 per cent in constant-currency terms with the result buoyed by higher margins for Cochlear’s products.
Cochlear has revealed that growth in its implants business has been strongest in the senior’s segment, up 15 per cent, as the group’s initiatives to strengthen the referral pathway for adult cochlear implant candidates appear to be paying dividends.
“The ongoing emergence of the digital savvy senior has opened new communication pathways leading to increased awareness,” says the company.
“In the US, our direct-to-consumer (DTC) marketing programs now contribute over 30 per cent of surgeries, with 70 per cent of our lead generation coming from digital engagement with seniors.
“We are also experiencing a lift in professional referrals into our DTC funnel. As a result, time from awareness to surgery is reducing as candidates are more informed about cochlear implants before having discussions with their hearing care professional.”
Cochlear helped more than 47,000 people to hear via one or two of its cochlear or acoustic implants during FY24, which the company estimates to provide a net societal benefit of more than $8 billion over the lifetime of the recipients due to improved health outcomes, educational cost savings and productivity gains.
The group sold 48,040 cochlear implant units during the year, up 9 per cent compared with FY23, boosting its implant revenue by 18 per cent to $1.33 billion.
Total group revenue surged 15 per cent to $2.26 billion as Cochlear’s services and acoustics divisions also performed strongly.
Unit sales in developed markets grew 11 per cent with the average selling price up 2 per cent in constant-currency terms.
“We experienced strong growth in the US and Western Europe driven by market growth and share gains following the launch of the Nucleus 8 Sound Processor,” says the company.
“Emerging market units grew 5 per cent, with strong growth in the first half offset by a decline in the second half.
“Units grew strongly in China, Brazil and Central/Eastern Europe with declines in a number of countries including India and Argentina due to a combination of the timing of tenders and the impact of political and economic conditions.”
Cochlear is targeting sales revenue growth of about 10 per cent in FY25 as it aims to help more than 50,000 people to hear with a cochlear or acoustic implant.
The group also expects to deliver underlying net profit of between $410 million and $430 million, a 6 to 11 per cent increase on FY24.
“As we look to the future, we remain confident of the opportunity to grow our markets,” says the company.
“There remains a significant, unmet and addressable clinical need for cochlear and acoustic implants that is expected to continue to underpin the long-term sustainable growth of the business.”
Cochlear is paying a final dividend of $2.10, up 20 per cent over the previous corresponding period, for a total payout of $4.10 for the year.
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