Full Year 2022 Cochlear Ltd Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Saul Hadassin - Barrenjoey Markets Pty Limited, Research Division - Analyst : Dig, just a question on cochlear unit sales for fiscal '22. If we go back and look at the last half before COVID hit and just annualize those units, it looks like units for this year about in line with where that would have been back in FY '20, assuming COVID hadn't arrived. I guess, the question is, do you still think there's a significant amount of patients who are still waiting as part of backlog to be implanted into FY '23? And then a separate part to that question is, what do you think -- what do you estimate the unit sales growth rate to do globally over the next 12 months, assuming COVID doesn't, is not as disruptive as it was, say, in FY '21?

Question: Saul Hadassin - Barrenjoey Markets Pty Limited, Research Division - Analyst : If I could just push you on that, what's your expectation -- say, medium to long term, what's your expectation as to how quickly the industry can grow in terms of that unit sales? Historically, I think, the range has varied from anywhere as low as maybe 5% up to as high as 15% based on some of the commentary from your competitors in the past. What do you think is a sustainable rate of CI unit sales for the next 5 years?

Question: Saul Hadassin - Barrenjoey Markets Pty Limited, Research Division - Analyst : (inaudible) with the lower end of that range or the...

Question: Steven David Wheen - Jarden Limited, Research Division - Analyst : Just wanted to ask around the launch of the Nucleus 8. What sort of launch costs you've factored into your guidance in the first half, and again, on the guidance, what sort of shortfall as people sit on their hands waiting for that launch to come into the market, what you're anticipating the impact of that will be in your guidance? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 19, 2022 / 12:00AM, COH.AX - Full Year 2022 Cochlear Ltd Earnings Call

Question: Steven David Wheen - Jarden Limited, Research Division - Analyst : Even with regards to launch costs?

Question: Steven David Wheen - Jarden Limited, Research Division - Analyst : Yes. Okay. Just moving to sort of more broader question. CMS is obviously proposed to expand the eligibility criteria for cochlear implants, which there seem to be no -- in terms of the public commentary, no aversion to that. I just wonder from your perspective how this might ultimately look. Is it a big expansion for eligibility in terms of your ability to target an expanded market going forward?

Question: Steven David Wheen - Jarden Limited, Research Division - Analyst : Yes. Great. And can I just ask one more, just on the implants that you've done in the second half of '22. What the prevalence of single-sided deafness was? If you could just give any sort of high-level commentary around the success you're having now that you have that label expansion. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 19, 2022 / 12:00AM, COH.AX - Full Year 2022 Cochlear Ltd Earnings Call

Question: David Bailey - Macquarie Research - Analyst : Just following on from one of Chris' questions, maybe 8% to 13% NPAT guidance ex cloud. Are you holding that margin 8% to 13% revenue growth given you've announced the launch of the N8 or you announced the launch that it won't be rolled out. I mean the right way to think about top line as being more weighted to CI, less Services and probably a bit more Acoustics. Is that how you're sort of thinking about revenue growth for '23? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 19, 2022 / 12:00AM, COH.AX - Full Year 2022 Cochlear Ltd Earnings Call

Question: David Bailey - Macquarie Research - Analyst : Got it. And then just in relation to the OTC change for hearing aid in the U.S., just any initial thoughts you have -- might have around that. Just sort of wondering if it's in the near term anyway or might just for some people not to see an audiologist, which gives you a temporary slowdown in new patients? Or do you think it's not really an issue overall?

Question: Craig Wong-Pan - RBC Capital Markets, Research Division - Analyst : Just a question on the new Nucleus 7 S and 7 SE that's being launched in emerging markets. I just want to know what the main difference was to the Nucleus 7 and what sort of models were previously being sold in those emerging markets?

Question: Craig Wong-Pan - RBC Capital Markets, Research Division - Analyst : Okay. And does that mean if you're selling one of your newer implants -- sorry, sound processors, then that could be an opportunity to gain further share in those emerging markets?

Question: Craig Wong-Pan - RBC Capital Markets, Research Division - Analyst : Okay. And then just my last question. The gross margin drag in FY '24 from the Chinese manufacturing facility. Just wondering why there's not a drag coming through in FY '23.