PhiAdvisor Value Sheet: Amplifon (AMP-IT)

We have had an enter Long signal since 06/22/2020 and added the stock to our Tactical Europe portfolio on 04/13/2021.

1st worldwide distributor (11% market share) of hearing aids and implants under the Amplifon, Beter Horen, Miracle Ear, Sonus brands, the turnover is divided between equipment sales (88%) and services / maintenance (12%). The group has a network of points of sale of 11,000 stores, 1/3 owned, 15% as affiliates, 12% as franchisees, and the remainder as corners. The geographic exposure is 70% in Europe / Africa / Middle East, 17% in the USA and the balance in Asia-Pacific.

The group remains 42% (59% of the voting rights) owned by the founding family and has benefited from the appetite for medtech affiliated stocks, bringing its multiple in PE valuation to 50x 2021 and 42x 2022. In EV / EBITDA, multiples are back below 20x this year and 17x next year.

The group has managed to almost triple its turnover in 4 years, doubling its profit while the debt will drop below 2x EBITDA at the end of 2021 vs. 3.5x in 2018. The acquisition of GAES, a Spanish group with of the largest reseller network in the world and the development in China have enabled Amplifon to change size and fully exploit economies of scale.

Short term catalyst : Continued external growth / Expansion in France and Germany / Savings linked to the integration of new networks.
Long term catalyst : Aging of the population / Miniaturization and digitization of hearing aid products / Development of third-party activities (connections with smartphone, TV or HIFI).