Sound performance in terms of operating margin for H1 2005

27/09/05 - Forecasts for H2 confirmed

 

Gradual return to growth in H1 2005

 

Over the first six months of 2005, sales for Audika Group stood at EUR 35.1 million, up 4.8% on the back of the gradual upturn in quarter-on-quarter activity (+1.7% and +7.0% for the first and second quarters respectively). However, given an accumulation of outside factors (difficult weather conditions, disruptions linked to France’s Social Security requiring patients to register their attending physician), this performance nonetheless fell approximately EUR 1.5 million shy of the Group’s initial forecasts.

 

In EUR millions	H1 2004 IFRS	H2 2004 IFRS	2004 IFRS	H1 2005 IFRS
Sales	33.52	31.22	64.75	35.13
Operating profit on ordinary activities	5.75	4.32	10.07	(*) 5.25
Operating margin (as a %)	17.1%	13.8%	15.6%	14.9%
Group net income	3.38	2.51	5.89	3.12
Group net margin (as a %)	10.1%	8.0%	9.1%	8.9%

 

A promising first half in terms of margins

 

The first half of 2005 saw Audika continue to optimize its gross margin which currently stands at 73.5% of sales (compared with 73.1% in H1 2004). That said, given Audika’s particularly strong performance in H1 2004 (35% increase in sales and organic growth of 16%), leverage on growth on the back of a sound fixed-cost structure was impacted by the shortfall in sales.

 

Accordingly, the Group’s operating margin held up well, coming in at 14.9% or 15.8% like-for-like (i.e. excluding the employee profit-sharing introduced in 2005).

Group net income thus stood at EUR 3.1 million, resulting in a net margin of 8.9%

 

 

Forecasts for H2 confirmed

 

Audika intends to accelerate its growth by capitalizing on the already tangible success of the marketing plan launched at the end of the summer and on the strong development of new products. The Group also intends to draw upon its new and innovative financing offer (payment in 10 installments, interest free) to revive its database of prospective clients.

 

As such, Audika has confirmed its target growth in sales of between 10 and 15% for 2005 as a whole. The ongoing optimization of the company’s gross margin and expected leverage from growth on the back of a sound cost structure should enable Audika to substantially improve its operating margin over the second half of 2005. Indeed, profit-sharing included, the Group is targeting an operating margin that at least equates to that booked for 2004, i.e. 15.6%.

 

 

Sound visibility as to the reinforcement of the network

 

As part of its strategy to reinforce its market leadership by drawing upon a network of some 500 centers in the medium term, Audika is soon to finalize a first wave of acquisitions and enjoys excellent visibility with respect to its plan for 2006. At the same time, the Group will also be actively pursuing the opening of new centers in order to fully capitalize on its brand's status as France’s undisputed market leader.

 

Audika Group will publish its Q3 2005 sales on November 8, 2005.

 

 

About Audika

 

With some 300 centers in 74 different regions and a market share of nearly 13%, Audika is the number one network offering hearing correction consulting and solutions in France. Positioned on the market for hearing correction solutions for senior citizens, which is not affected by changes in the economic situation, Audika aims to consolidate its leadership in a sector that remains very highly fragmented. Audika is listed on segment B of the Eurolist SMALL 90 index.

 

If you would like to receive financial information on Audika by e-mail, register at www.audika.com

 

ISIN FR0000063752-ADI

Reuters DIKA.PA

Bloomberg ADI

Number of shares: 9,450,000



Audika contact: Alain Tonnard / Etienne Sirand-Pugnet on +33 (0)1 55 37 30 30

Kaparca Finance contact: Guillaume Le Floch on +33 (0)1 72 74 82 25