Resilience and pent-up demand power bright 2021 market forecast from Demant



© Demant Demant President and CEO Søren Nielsen

Hearing healthcare giant Demant is forecasting a return to annual growth in 2021 for its businesses, as they continue to recover from the calamitous blast of pandemic effects in the first half of 2020.

At the group’s Q4 2020 Results -Earnings Conference Call, Demant President and CEO Søren Nielsen told participants ˝we and the world have learned to live with the Covid˝. And he delivered a positive outlook on overall group involvement, ˝where we organically believe we can grow 23% to 27%˝.

Steady organic growth in hearing healthcare had been the picture for Demant, parent of the Oticon brand—9% in 2017; 7% in 2018; 4% in 2019—before the drop of -13% in 2020.

˝As soon as clinics started to reopen, we saw the need for access to both person-centred care and the latest technology, with users literally queuing up outside our clinics,˝ said Nielsen in the group’s annual report.

˝If we allow ourselves to exclude the government channels and export markets, then 2021 could look like 2021 would have looked,˝ Nielsen added. ˝We expect some release of pent-up demand in second half. Some will not be released until 2022.˝

Although the Covid impact on Demant was something the group shared with almost every other business on the planet, it had already started 2020 hamstrung by the effects of a destructive cyberattack in September 2019, for which Demant recognised a revenue loss of DKK 575m (approx $94m).

One of the hardest hit areas for demant is in cochlear implants (CIs). ˝We again saw how high numbers of hospitalisation led to postponement of elective surgeries and especially the CI area, CI business, is significantly impacted across Europe,” Nielsen explained.

While emerging markets have been slowed by Covid, Demant has seen strong grotwh in the Asia-Pacific geography, most encouragingly in China, ˝where we have seen significant growth to our business,˝ Nielsen stressed.

˝We estimate that if we allow ourselves to exclude the government channels and export markets, then 2021 could look like 2021 would have looked, everything else unaffected by COVID means a strong second half.˝

The big unknown in all this is how SARS-CoV-2 story will develop later in 2021. Demant, says Nielsen, expects vaccination programmes to bring results, although he warns that ˝we have no assumption about any significant negative impact from COVID in second half. If that occurs, we would have to come back.˝

Source: Demant/Seeking Alpha