Gn Store Nord A/s · OMXCOP:GN
Gn Store Nord A/s — Q2 2024 Earnings Presentation
32 slides from Gn Store Nord A/s's earnings presentation, Aug 22, 2024
Slide 1: GN Interim Report Q2 2024 Conference call presentation
GN Interim Report Q2 2024 Conference call presentation August 22, 2024
Slide 2: Safe Harbor Statement
Safe Harbor Statement The forward-looking statements in this report reflect the management's current expectations of certain future events and financial results. Statements regarding the future are, naturally, subject to risks and uncertainties, which may result in considerable deviations from the o
Slide 3: Agenda
Group highlights Agenda Divisional highlights Financial guidance 3
Slide 4: Group highlights
Group highlights Hearing Enterprise Gaming & Consumer Strong double-digit growth Defending market positions Gaming took share and and improved margins and improving margins improved margins – healthy growth also in Consumer Expanding key product Launched new software portfolios – and launching with
Slide 5: Strong execution leading to 5% organic growth and margin expansion
Strong execution leading to 5% organic growth and margin expansion 5% 8.3% 155m EBITA margin Free cash flow excl. Organic growth (11.8% adj.) M&A (DKK) 5
Slide 6: GN Store Nord: Further strengthening group financials
GN Store Nord: Further strenghthening DKK million Q2 2024 Q2 2023 Growth group financials Revenue 4,499 4,394 +2% 5% organic revenue growth, and improving underlying margins. The One-GN transformation is on track and - Organic growth 5% -8% delivered synergies in line with plans Gross profit1 2,334
Slide 7: Solid positive cash flow generation driving continued deleverage
Solid positive cash flow generation driving continued deleverage Free cash flow excl. M&A (DKKm) • Free cash flow excl. M&A of DKK 155 million Q2 2023 Q2 2024 in Q2 2024 (DKK 622 million in Q2 2023) 654 722 622 driven by increase in operating cash flow as a 481 result of strong earnings level 155 •
Slide 8: One-GN: Group synergies of DKK ~100 million realized in the quarter
One-GN: Group synergies of DKK ~100 million realized in the quarter • Deliver shareholder value by the creation of a simpler and more powerful company • DKK ~600 million in cost synergies to be realized by 2026 of which roughly two- thirds will be achieved already in 2024 • DKK ~190 million realized
Slide 9: Agenda
Group highlights Agenda Divisional highlights Financial guidance 9
Slide 10: Hearing: Continued market share gains leading to 10% organic growth
Hearing: Continued market share gains leading to 10% organic growth ReSound Nexia driving continued market share gains, DKK million Q2 2024 Q2 2023 Growth leading to 10% organic revenue growth and strong margin improvement Revenue 1,792 1,719 +4% • Revenue growth of 4%, reflecting an impact from FX
Slide 11: Hearing: Driving success across markets, while bringing new products to market
Hearing: Driving success across markets, while bringing new products to market 10% organic growth reflecting broad based success ...along with new additions to Nexia family Smallest wireless ITC hearing aid in a non-rechargeable design and new wireless CROS BTE solution Both which connect to Bluetoo
Slide 12: Enterprise: Continued market stabilization and focused cost control
Enterprise: Continued market stabilization and focused cost control -3% organic revenue growth, as the market continues to DKK million Q2 2024 Q2 2023 Growth stabilize. Focused cost control, led to an improvement in the divisional profit margin of 1.3%p Revenue 1,785 1,861 -4% • Revenue growth of -4
Slide 13: Enterprise: Continued market stabilization – yet to return to growth
Enterprise: Continued market stabilization – yet to return to growth Stabilizing enterprise headset market (DKKbn)... ... with supporting trends in adjacent categories Knowledge worker Call-centric PC shipments CAGR: ~5% +3% growth in Q2 2024 Overall IT device spend +4% Expected 2024 growth ’14 ’15
Slide 14: Gaming & Consumer: Strong execution leading to 12% organic growth
Gaming & Consumer: Strong execution leading to 12% organic growth DKK million Q2 2024 Q2 2023 Growth 12% organic revenue growth driven by continued market share gains in Gaming Revenue 922 814 +13% • Revenue growth of 13%, reflecting an impact from FX of - Organic growth 12% -4% around +1% - M&A imp
Slide 15: Gaming & Consumer: Gradual wind-down of Consumer product lines fully on track
Gaming & Consumer: Gradual wind-down of Consumer product lines fully on track Elite (~ 70%) Gradually wind-down of Elite and Talk product lines to further increase focus and resources on more attractive parts of GN’s business Strong market reception of the new true wireless earbuds helping the gradu
Slide 16: Agenda
Group highlights Agenda Divisional highlights Financial guidance 16
Slide 17: 2024 financial guidance: Confirmed as communicated on June 11th
2024 financial guidance: Confirmed as communicated on June 11th Financial guidance 2024 Organic revenue growth Reported EBITA margin FCF excl. M&A (DKKm) GN Store Nord 2% to 6% 12% to 13% >900 Key assumptions Hearing Enterprise Gaming & Consumer • Trending towards the upper half of the 8% to 12% • T
Slide 18: Save the date: EUHA 2024
Save the date: EUHA 2024 Investor and analyst meeting 68th International Congress of Hearing Aid Acousticians Hannover, Germany 9.00 am, October 17, 2024 18
Slide 19: Q&A
Q&A www.gn.com E-mail: investor@gn.com Rune Sandager, Head of Investor Relations, Tel.: +45 4575 9257 19
Slide 20: Appendix
Appendix "s GN
Slide 21: Hearing division: 2022 - 2023
Hearing division: 2022 - 2023 Actual 2022 Actuals 2023 DKKm Q1 2022 Q2 2022 Q3 2022 Q4 2022 FY 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 FY 2023 Hearing division excl. non-recurring Revenue 1,337 1,529 1,554 1,807 6,227 1,622 1,719 1,653 1,808 6,802 Organic growth 2% 4% 0% 14% 5% 15% 15% 15% 7% 13% Gross
Slide 22: Enterprise division: 2022 - 2023
Enterprise division: 2022 - 2023 Actual 2022 Actuals 2023 DKKm Q1 2022 Q2 2022 Q3 2022 Q4 2022 FY 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 FY 2023 Enterprise division excl. non-recurring Revenue 1,814 2,450 2,174 2,237 8,675 1,767 1,861 1,838 1,997 7,463 Organic growth -26% 18% 7% 9% 0% -3% -23% -13% -9
Slide 23: Gaming & Consumer division: 2022 - 2023
Gaming & Consumer division: 2022 - 2023 Actual 2022 Actuals 2023 DKKm Q1 2022 Q2 2022 Q3 2022 Q4 2022 FY 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 FY 2023 Gaming & Consumer division excl. non-recurring Revenue 708 878 973 1,226 3,784 825 814 952 1,264 3,855 Organic growth -41% -28% -22% -21% -27% 17% -4%
Slide 24: GN Store Nord: 2022 - 2023
GN Store Nord: 2022 - 2023 Actual 2022 Actuals 2023 DKKm Q1 2022 Q2 2022 Q3 2022 Q4 2022 FY 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 FY 2023 GN Store Nord excl. non-recurring Revenue 3,859 4,857 4,701 5,270 18,686 4,214 4,394 4,443 5,069 18,120 Organic growth -21% 8% -1% 3% -3% 7% -8% 0% 0% -1% Gross pr
Slide 25: GN Store Nord – five-year performance
GN Store Nord – five-year performance DKK million 2019 2020 2021 2022 2023 GN Store Nord Revenue 12,574 13,449 15,775 18,687 18,120 Organic growth 15% 9% 20% -3% -1% Gross margin 60.3% 54.3% 55.0% 48.9% 49.4% EBITA 2,321 1,866 2,619 1,560 1,200 EBITA margin 18.5% 13.9% 16.6% 8.3% 6.6% Operating prof
Slide 26: Reconciliation of extraordinary costs Q2 2024
Reconciliation of extraordinary costs Q2 2024 Hearing Enterprise Gaming & Consumer GN Store Nord Extraordinary Extraordinary Extraordinary Extraordinary DKKm Reported costs Underlying Reported costs Underlying Reported costs Underlying Reported costs Underlying Revenue 1,792 - 1,792 1,785 - 1,785 92
Slide 27: Gaming & Consumer – reconciliation table
Gaming & Consumer – reconciliation table DKK million Q1 2024 Q2 2024 Revenue 815 922 - Gaming 551 611 - Consumer 264 311 Organic revenue growth 0% 12% - Gaming 3% 12% - Consumer -7% 14% Gross profit (excl. wind-down costs) 223 286 - Gaming 137 186 - Consumer 86 100 Gross profit (reported) 223 226 -
Slide 28: One-GN synergy program
One-GN synergy program - Operations initiatives will lead to synergies of around DKK 200 million Synergy target Degree of Lever Main levers (EBITA) implementation Core product • Chipsets • Hybrids DKK ~70 million components • Plastics • Batteries Commodities • Cables DKK ~100 million • Electronics •
Slide 29: One-GN synergy program
One-GN synergy program - Organization initiatives will lead to synergies of around DKK 200 million Synergy target Degree of Lever Main levers (EBITA) implementation • 300 positions terminated by the end of November 2023 Re-organization • Mainly focused on over-lapping functions DKK ~150 million • Di
Slide 30: One-GN synergy program
One-GN synergy program - Efficiencies and processes initiatives will lead to synergies of around DKK 200 million Synergy target Degree of Lever Main levers (EBITA) implementation • IT software Indirect • Marketing procurement • External consultancy DKK ~75 million procurement • Travel • 3 regional s
Slide 31: All material debt maturities until Q3 2026 fully funded
All material debt maturities until Q3 2026 fully funded Maturity profile – Q2 2024 2024 maturities* funding DKKm DKK5.2bn DKK 4.6bn R&D loan 88 Cash at hand 694 201 4,464 EMTN bond 4,464 Undrawn 4,464 3,869 4,464 Term Loan 1,974 1,488 741 722 500 88 369 369 369 319 2024 debt Sources of -694 maturiti
Slide 32: GN Store Nord share overview
GN Store Nord share overview • GN has a share capital of DKK 603,650,860, which is consisting of Share price development 150,912,715 shares, each carrying four votes. GN has one share class, GN OMX C25 Stoxx 600 160 and there are no restrictions on ownership or voting rights 140 120 • GN is, among o