Gn Store Nord A/s · OMXCOP:GN
Gn Store Nord A/s — Q2 2012 Earnings Presentation
35 slides from Gn Store Nord A/s's earnings presentation, Aug 9, 2012
Slide 1: Interim Report Q2 2012 Conference Call
INTERIM REPORT Q2 2012 Conference call Copenhagen, August 9, 2012
Slide 2: Agenda
AGENDA Group highlights Q2 2012 GN ReSound business update GN ReSound SMART status GN Netcom business update Financial outlook 2012 Slide 2
Slide 3: Group Financial Highlights Q2 2012
GROUP FINANCIAL HIGHLIGHTS Q2 2012 - SOLID BUSINESS IMPROVEMENTS AND NEW SHARE BUYBACK PROGRAM Q2 2012 financial performance Group financials • Revenue increased by 14% compared to Q2 2011 Q2 2012 Q2 2011 (DKK million) • Organic growth of 5% - gaining market share Revenue 1,515 1,334 • EBITA up 36%
Slide 4: Agenda
AGENDA Group highlights Q2 2012 GN ReSound business update GN ReSound SMART status GN Netcom business update Financial outlook 2012 Slide 4
Slide 5: GN ReSound Financial Highlights – Q2 2012
GN RESOUND FINANCIAL HIGHLIGHTS – Q2 2012 - CONTINUED MARKET SHARE GAINS AND PROFITABILITY IMPROVEMENT Q2 Q3 Q4 FY Q1 Q2 DKK million 2011 2011 2011 2011 2012 2012 Revenue 827 841 962 3,450 914 943 Organic growth 9% 9% 8% 9% 6% 4% Gross margin* 59.4% 61.3% 62.3% 60.8% 61.7% 61.7% SG&A, R&D etc.* (417
Slide 6: GN ReSound – Revenue Split by Business Area
GN RESOUND – REVENUE SPLIT BY BUSINESS AREA - ABOVE MARKET GROWTH IN HEARING INSTRUMENTS AND DIAGNOSTICS Business highlights Revenue Q2 and year-to-date 2012 • Another quarter with solid performance in North America - Revenue Revenue Organic Organic continued solid growth for both the ReSound and Be
Slide 7: Hearing Aid Market Development, Q2 2012
HEARING AID MARKET DEVELOPMENT, Q2 2012 - UNIT GROWTH SLIGHTLY BELOW HISTORICAL TREND IN Q2 Market comments Estimated Q2 unit growth 6% • Overall the hearing aid market continues to 3% be reasonably resilient to the macroeconomic 2% development • Growth in Europe was impacted by the change in the re
Slide 8: Innovation Drives Growth
INNOVATION DRIVES GROWTH - TECHNOLOGICAL LEADER IN THE HEARING AID INDUSTRY Technological milestones 1989 – Wide Dynamic Range Compression (WDRC) - the first amplification system to compensate for loudness sensitivity 2008 – Remote Microphones - the first industry innovation in custom instruments fo
Slide 9: GN ReSound – 2012 Product Portfolio
GN RESOUND – 2012 PRODUCT PORTFOLIO Segment Performance Life style/ Tinnitus Super power Pediatrics Design ReSound ReSound Top Alera 9 Alera TS 9 Premium ReSound ReSound Plus Alera 7 Alera TS 7 ReSound Basic Alera 4 + 5 ReSound Unite – premium connectivity Essentials ReSound ReSound Basic Vea 3 Spar
Slide 10: GN ReSound – 2012 Product Portfolio and Second Half-Year Product Launches
GN RESOUND – 2012 PRODUCT PORTFOLIO AND SECOND HALF-YEAR PRODUCT LAUNCHES Segment Performance Life style/ Tinnitus Super power Pediatrics Design Late Late ReSound Top H2 2012 September September Alera TS 9 Premium Late Late ReSound Plus H2 2012 September September Alera TS 7 ReSound Basic Alera 4 +
Slide 11: New Premium Product Coming Late September
NEW PREMIUM PRODUCT COMING LATE SEPTEMBER - THE SCENE IS SET FOR ONE OF THE MOST EXCITING PRODUCT LAUNCHES IN THE HISTORY OF GN RESOUND • Powered by new ReSound Range II chip • Ear-to-ear connectivity • 2.4 GHz wireless connectivity system • Taking the Surround Sound by ReSound experience to a new l
Slide 12: Agenda
AGENDA Group highlights Q2 2012 GN ReSound business update GN ReSound SMART status GN Netcom business update Financial outlook 2012 Slide 12
Slide 13: Update on the SMART Restructuring Program
UPDATE ON THE SMART RESTRUCTURING PROGRAM - THE SMART PROGRAM IS ON TRACK TO DELIVER ON TARGETS • The SMART program progresses with significant headway across all levers. Restructuring costs amounted to DKK 52 million in Q2 2012. Estimated restructuring costs for the initially planned improvements a
Slide 14: SMART Restructuring Program – Complexity Reduction
UPDATE ON THE SMART RESTRUCTURING PROGRAM - COMPLEXITY REDUCTION EBITA improvement Project status Lever Status comments target (DKK)**) (indicative) SKU*) reduction • Implementation initiated - simplification of 20 • SKU reduction potential confirmed product portfolio Million Packaging • New packagi
Slide 15: SMART Restructuring Program – Globalize Operations
UPDATE ON THE SMART RESTRUCTURING PROGRAM - GLOBALIZE OPERATIONS EBITA improvement Project status Lever Status comments target (DKK)*) (indicative) Further offshoring • Close down of remaining local European production - leverage on Chinese initiated 50 20% manufacturing site • ITE offshoring gradua
Slide 16: SMART Restructuring Program – Streamlined Go-to-Market
UPDATE ON THE SMART RESTRUCTURING PROGRAM - STREAMLINED GO-TO-MARKET EBITA improvement Project status Lever Status comments target (DKK)*) (indicative) Go-to-market • Best practice from deep dives in a number of - blueprint for structure markets being rolled out globally 20 20% of sales subsidiaries
Slide 17: Agenda
AGENDA Group highlights Q2 2012 GN ReSound business update GN ReSound SMART status GN Netcom business update Financial outlook 2012 Slide 17
Slide 18: GN Netcom Financial Highlights – Q2 2012
GN NETCOM FINANCIAL HIGHLIGHTS – Q2 2012 - MARKET SHARE GAINS AND LEVERAGING ON COST BASE Q2 Q3 Q4 FY Q1 Q2 DKK million 2011 2011 2011 2011 2012 2012 Revenue 503 516 611 2,106 564 572 Organic growth 8% 19% 5% 9% 16% 6% Gross margin 56.7% 55.2% 55.6% 56.4% 55.3% 55.4% SG&A, R&D etc. (215) (211) (230)
Slide 19: GN Netcom – Revenue Split by Business Areas
GN NETCOM - REVENUE SPLIT BY BUSINESS AREAS - GROWTH IN BOTH CC&O AND MOBILE CC&O Revenue Q2 and year-to-date 2012 Revenue Revenue Organic Organic • Organic growth of 6% driven by Unified Communcations (MDKK) (MDKK) growth growth Q2 Q2 YTD Q2 Q2 YTD • Unified Communications revenue accelerated seque
Slide 20: GN Netcom – CC&O Market Development
GN NETCOM - CC&O MARKET DEVELOPMENT - THE UNIFIED COMMUNICATIONS OPPORTUNITY REMAINS UNCHANGED Market comments • Overall CC&O growth is supressed in 2012 DKK 11 - 12 due to weakness in the traditional CC&O billion segment in southern Europe • The Unified Communications headset market continues to gr
Slide 21: Mobile – Record Q2 EBITA Margin
MOBILE - RECORD Q2 EBITA MARGIN - SOLID GROWTH AND SIGNIFICANTLY IMPROVING PROFITABILITY Key comments Mobile organic growth 50% Organic growth 40% Average • The Mobile division continues to grow at 30% healthy rates in a competitive market place 20% 10% • Growth is driven by speakerphones and 0% ste
Slide 22: Mobile Market Development
MOBILE MARKET DEVELOPMENT - INDEPENDENT BRANDS INCREASE MARKET SHARE Market comments Estimated market share • H1 2012 market growth on the traditional hands free market, excluding headphones being added a microphone is estimated to be mid-single digit Handset brands Independent brands • The traditio
Slide 23: Agenda
AGENDA Group highlights Q2 2012 GN ReSound business update GN ReSound SMART status GN Netcom business update Financial outlook 2012 Slide 23
Slide 24: Updated Financial Outlook 2012
UPDATED FINANCIAL OUTLOOK 2012 - GN RESOUND AND GN NETCOM GN ReSound GN Netcom Organic revenue growth Organic revenue growth • Continued solid sales momentum for ReSound Alera • Traditional CC&O market impacted by the debt 42% was • Confirming new product launch late September crisis in southern cap
Slide 25: Updated Financial Outlook 2012 – Other and Amortization, Finance etc.
UPDATED FINANCIAL OUTLOOK 2012 - “OTHER” AND “AMORTIZATION, FINANCE ETC.” “Other” EBITA Amortization, finance, etc. • As announced in the Annual Report 2011, the • As previously 42% was communicated, certain non-core and loss Strategy Committee has decided to invest up to making entitiesbyare captur
Slide 26: Updated Financial Outlook 2012
UPDATED FINANCIAL OUTLOOK 2012 - CONSOLIDATED EBITA GUIDANCE NARROWED TO DKK 815 - 875 MILLION Organic revenue growth EBITA development MDKK GN ReSound: 3 - 5% organic growth GN Netcom: Around 7% organic growth 1,000 GN Store Nord: 4 - 6% organic growth 815-875 EBITA 800 21-30% GN ReSound DKK 540 -
Slide 27: Upcoming Events
UPCOMING EVENTS Date Event Location August 10, 2012 Q2 roadshow Copenhagen August 14, 2012 Q2 roadshow New York August 20, 2012 Q2 roadshow Zurich/Geneva August 21, 2012 Q2 roadshow Stockholm August 28, 2012 Lifesize investor seminar Frankfurt September 5, 2012 Goldman Sachs medtech seminar London S
Slide 28: Safe Harbor Statement
SAFE HARBOR STATEMENT The forward-looking statements in this presentation reflect management's current expectations of certain future events and financial results. Statements regarding the future are, of course, subject to risks and uncertainties which may result in material deviations from the outl
Slide 29: Q&A
Q&A Slide 29
Slide 30: Appendix – Financial Update
APPENDIX Financial update Slide 30
Slide 31: GN Store Nord Group Structure
GN STORE NORD GROUP STRUCTURE GN Store Nord GN ReSound GN Netcom Hearing instruments and Handsfree diagnostic equipment Communication Hearing Otometrics CC&O Mobile Instruments Headsets Headsets Slide 31 GN Store Nord GN ReSound GN Netcom
Slide 32: GN Store Nord – Income Statement
GN STORE NORD – INCOME STATEMENT Q2 Q3 Q4 FY Q1 Q2 y-y % DKK million 2011 2011 2011 2011 2012 2012 change Revenue 1,334 1,359 1,573 5,564 1,478 1,515 13.6% Gross margin* 58.5% 59.0% 59.7% 59.2% 59.3% 59.3% 0.8%-p SG&A, R&D etc.* (644) (629) (61) (2,011) (711) (714) 10.9% EBITA* 136 173 878 1,284 165
Slide 33: GN Store Nord – Balance Sheet
GN STORE NORD – BALANCE SHEET Balance sheet Q2 Q3 FY Q1 Q2 (DKK million) 2011 2011 2011 2012 2012 Goodwill 2,660 2,847 3,048 2,970 3,114 Other intangible assets 1,145 1,156 1,200 1,194 1,208 Tangible & other non- 1,209 1,260 1,024 1,002 1,488 current assets Current assets 4,618 4,689 5,755 3,560 2,7
Slide 34: GN ReSound – Balance Sheet & Cash Flow
GN RESOUND – BALANCE SHEET & CASH FLOW Q2 Q3 Q4 FY Q1 Q2 Balance sheet (DKK million) 2011 2011 2011 2011 2012 2012 Inventories 399 451 454 454 448 426 Trade receivables 781 807 904 904 857 876 Trade payables 181 191 253 253 197 199 Cash flow (DKK million) Cash flow before working 135 170 292 710 142
Slide 35: GN Netcom – Balance Sheet & Cash Flow
GN NETCOM – BALANCE SHEET & CASH FLOW Q2 Q3 Q4 FY Q1 Q2 Balance sheet (DKK million) 2011 2011 2011 2011 2012 2012 Inventories 90 79 95 95 87 105 Trade receivables 285 321 351 351 339 354 Trade payables 129 149 183 183 171 181 Cash flow (DKK million) Cash flow before working 88 102 139 402 111 108 ca