Full Year 2023 Cochlear Ltd Earnings Call Transcript

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

Question: Steven David Wheen - Jarden Limited, Research Division - Analyst : Yes. Dig, can you hear me?

Question: Steven David Wheen - Jarden Limited, Research Division - Analyst : Yes, yes. I just wanted to pick up on that, the processor upgrades. Obviously, a very strong launch into the second half, which seasonally is not that -- well, historically, that's not normally where you'd be as strong. So I was just wondering what the potential looks like for next half as everyone starts to burn through their deductibles. I mean is it your expectation that, that surges again from here into that half? 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 15, 2023 / 12:00AM, COH.AX - Full Year 2023 Cochlear Ltd Earnings Call

Question: Steven David Wheen - Jarden Limited, Research Division - Analyst : Yes. Great. And secondly, for me, I just noticed a bit of change in your commentary, particularly around the expansion of the eligibility criteria. Previously, you seem to think that, that was probably a little bit more long dated. But certainly from channel techs that we've seen, it sounds like you're starting to see a lot more come into the funnel, maybe through the audiology clinics in the first instance. Is that what we're hearing with your commentary now that, that is starting to open up that adult channel a lot more?

Question: Saul Hadassin - Barrenjoey Markets Pty Limited, Research Division - Analyst : Can you hear me?

Question: Saul Hadassin - Barrenjoey Markets Pty Limited, Research Division - Analyst : Just following up on that discussion around processor upgrades. I know historically the company has spoken to maybe a target penetration rate globally of around 50% and potentially being able to move that higher. I'm just wondering if you're willing to give us a sense of where you think with this N 8 cycle, you think that penetration might ultimately get to.

Question: Saul Hadassin - Barrenjoey Markets Pty Limited, Research Division - Analyst : And then obviously just, Dig, your comments around no expectations for additional market share gains into '24 for Cochlear implants. I mean on the basis that you're presumably outspending your competitors significantly in both R&D and SG&A., just wondering why you think that seeding of share will slow down into '24.

Question: David Bailey - Macquarie Research - Analyst : I'll also be quick. Just in terms of ASP, it looks like there was a bit of a step up in the second half of '23. Is that all going to be mixed? Or is there some pricing to consider there? And then just for fiscal '24, 16% to 23% growth year-on-year. Just wondering what the benefit of currency looks like. So what that growth rate might look like in constant currency terms?

Question: John Copley - UBS Investment Bank, Research Division - Analyst : For Laura Sutcliffe. You've spoken in the past couple of years about funding for Cochlear implants and emerging markets being withdrawn during the pandemic, but now returning. Could you quantify perhaps in percentage terms where funding for Cochlear implants in emerging markets is today relative to the pre-pandemic baseline and also perhaps where you see that funding headed directly, please?

Question: John Copley - UBS Investment Bank, Research Division - Analyst : And if I could just squeeze in one more. Is it fair to say that mix was less favorable than usual looking across FY '23 in terms of gross margin impact? So on that basis, could we expect Cochlear to be able to maintain 75% gross margin even with the Chengdu headwind next year as mix normalizes?