Published on : Mar 27, 2018
Strategic investments backed by copious investments by behemoths are soon to shake up the hearing aids market. Amplifon, Italy-based globally prominent retailer of hearing aids, announced in March 2018 that it plans to pursue acquisitions in Canada, France, and Germany. The company also announced that it intends to make a foray into the China market by this year-end through a couple of joint ventures. The global market for hearing aids is to a large extent fragmented with the Italian hearing aid maker holding a sizeable stake in it.
The company faces stiff competition from few small players, notably from William Demant, a Denmark-based company, and Sonova Holding, headquartered in Stäfa, Switzerland. Though, the deals are in no way considered to have transformational impact, but these are sure to help Amplifon ramp up its profit margin in the coming years. Meanwhile it will enable it to eye more elaborate targets underpinned by more strategic deals.
Italian Hearing Aids Maker to Expand its Core Profit Margin by 2020 End
In a bid to make investments in these regions and the acquisitions planned therein through 2020, Amplifon has committed to send US$594 million (480 million euros). At the end of 2018-2020 business plan, it plans to garner a core profit margin amounting to 18.5 percent. Selling out its U.K. business, however, is ruled out, ending speculations post the massive restructuring the company has undergone in recent times. The Italian hearing aids maker also intends to keep dividend payout policy robust or at least sustainable in the coming years.
With these acquisitions planned, shareholders are promised 0.11 euros per share based on last year results-a marked hike of a 57 percent from the previous year. With bigger targets in its way to 2020, the company’s growth bodes favorably for the overall European economy.