Half Year 2022 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 : I just also wanted to just touch on the Services business. It's -- clearly, there would be an expectation, particularly in the U.S., around the Nucleus 8, so it is kind of curious that you've been able to achieve that conversion to the Nucleus 7 during this period. I just wonder how much of it's the -- of the driver for those sales is from the deductibles issue in the back half of the calendar year? Has that been a major driver, considering a lot of those recipients might not have qualified in the previous 2 years because of COVID issues?

Question: Steven David Wheen - Jarden Limited, Research Division - Analyst : And so your comments around the moderating of that, is that more because we're going into the half where the deductibles issue isn't as prevalent? Or is it more we're getting closer to people's expectations around the Nucleus 8 launch?

Question: Steven David Wheen - Jarden Limited, Research Division - Analyst : Yes, right. Understood. The second question I had was just in the emerging markets space. China, India, Brazil obviously showing a good recovery and good sales. And is that largely all tender-based? Or what's -- could you just sort of help characterize those sales in those regions? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 22, 2022 / 12:00AM, COH.AX - Half Year 2022 Cochlear Ltd Earnings Call

Question: Steven David Wheen - Jarden Limited, Research Division - Analyst : Next question I had was around your reinvestment in the business. And it would appear that, I guess, given the backdrop with Delta and Omicron during the first half, you're able to sort of pull back on some of that reinvestment until you get the confidence. And so the fact now that you're suggesting you're going to be stepping that up in the second half, that -- does that sort of highlight that you have much more confidence in the second half given what you're seeing so far?

Question: Steven David Wheen - Jarden Limited, Research Division - Analyst : Okay. Just one final question, a clarification on the cloud software. If we're doing sort of $30 million OpEx or expense going forward for the next sort of 4 years, that would suggest there's nothing that's being capitalized from this accounting standard. Is that the correct interpretation? I remember last result, you were saying that there would be a split between what is CapEx and what is OpEx from that spend.

Question: Saul Hadassin - Barrenjoey Markets Pty Limited, Research Division - Analyst : Dig, just one question for me, just on the upgrade cycle. You mentioned sort of an extended upgrade cycle, I guess, on the back of Kanso and Kanso 2 coming out, but do you have any sense of what percentage of the recipient base is eligible for an upgrade in this current sort of 5-year window has actually upgraded? Historically, Cochlear used to talk to sort of a 50% sort of peak upgrade percentage of that population. Is that higher? Can you give us any sense of where that is now?

Question: Saul Hadassin - Barrenjoey Markets Pty Limited, Research Division - Analyst : So just to clarify the contribution to the strong Services revenue growth, is it a combination of increasing penetration of the installed base as well as increased numbers of the installed base? Or is it still more weighted just to the actual numbers of people or recipients in that installed base itself?