
ASPIRATIONS AND STRATEGY
Strengthen our leadership
Offering an innovative customer experience, growing across core markets worldwide, and building an even more efficient and talented organization: these are the foundations of our strategy, which sets ambitious financial targets.
To strengthen our global leadership, positioning our company at the forefront of innovation in the industry: this is our main aim.
2020 strategic plan
customer experience
leadership
Organization
customer experience
customer experience
Innovative and distinctive
Our growth strategy is built around the customer, to whom we offer a distinctive and highly innovative customer experience, also by means of our new Amplifon product line and multichannel ecosystem.
By leveraging on unique and distinctive assets such as the data we own, the strength of our brands and the close relationship with our customers, we aim to transform the retail hearing care market thereby opening up new business and value creation opportunities.
leadership
leadership
in core markets
Our growth strategy is differentiated according to the countries in which we operate and focuses on the core global markets: Italy, Spain, France, Germany, the US, Canada, Australia, New Zealand and China. These markets together make up around 80% of the retail hearing care market.
We intend to continue to grow on mature markets, through organic growth and through targeted acquisitions in France, Germany and Canada.
Organization
Organization
Effective and talented
Our strategic plan was first presented to the financial community in March 2018, and later updated in March 2019 to reflect the additional drive to our growth made by the acquisition of the Spanish group GAES, finalized at the end of 2018. In addition, in 2018 we also announced the joint venture with the main retailer in Beijing - which represents the first step towards building a local presence in China, a key market for supporting our growth in the medium-long term. Finally, we launched the Amplifon Product Experience in six countries: Italy, France, Germany, the Netherlands, the US and Australia.
Focus: The acquisition of GAES
Focus: Amplifon product experience
The Amplifon Product Experience, consisting of the Amplifon product line and our multichannel ecosystem, redefines the experience throughout the entire customer journey. Launched with great success in Italy in May 2018, it made up 90% of our total sales on the private and paid-up market at the end of 2018, while the App attained 15% of penetration on compatible Amplifon devices.
In light of the excellent results in Italy, we anticipated the roll-out in France, Germany, the Netherlands, the US and Australia to 2019, with other countries following in 2020 and 2021. Technological innovation and hearing aid usage data collection will allow us to provide even more personalized services with high added value, with the aim of offering tailored experiences for every single customer.
2020 financial targets
The excellent results reached in 2018, together with the important strategic initiatives introduced over the course of the same year, enabled us to update our growth plans to 2020 with even more challenging targets. The contribution from the integration with GAES will be fundamental to our success: we expect annual synergies at EBITDA level between 20 and 25 million euros from 2021. Such synergies are higher than the amounts initially reported at the announcement of the acquisition and will require around 20 million euros of cumulated one-off costs over the two-year period 2019-2020.
In 2020, we expect to achieve:
- Consolidated revenues1 between 1,785 and 1,845 million euro
- Recurring EBITDA2 between 320 and 335 million euros
- A cumulated operating cash flow for the two-year period of approximately 480 million euros
Net profit for 2020 is expected to increase thanks to greater operating leverage and our continued focus on financial costs and tax rate, estimated to be below 30% in both 2019 and 2020.
The significant cash generation will fully support the investments expected between 2019 and 2020 which total around 170 million euros for Capex and 160 million euros for cash-out for acquisitions, while reducing the Company’s financial leverage to a net financial debt/EBITDA3 ratio of around 1.8x in 2020.
1 In local currencies
2 Excludes IFRS 16 impact
3 Calculated according to the redefinition of the covenants agreed with banks and investors in 2019, after the introduction of the new IFRS15, IFRS9 e IFRS16
Execution in line with expectations
The results achieved in 2018 were in line with the targets set for 2020.
Revenues growth in local currencies |
Recurring EBITDA margin 4 |
Cumulated operating cash flow |
Target 2020
Revenues growth in local currencies |
High-single-digit CAGR4 2017-2020 |
Recurring EBITDA margin 4 |
~18.5% in 2020 |
Cumulated operating cash flow |
~€600 million 2018-2020 |
Results FY2018
Revenues growth in local currencies |
+10.6% |
Recurring EBITDA margin 4 |
17.6% |
Cumulated operating cash flow |
€186 million |
4 Excludes IFRS 15 & 16