GN Store Nord A/S · OMXCOP:GN
GN Store Nord A/S — Investor Presentation (November 2022)
49 slides from GN Store Nord A/S's investor presentation, November 2022
Slide 1: GN Investor Presentation
GN Investor Presentation November 2022
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: Our purpose is Making Life Sound Better
Our purpose is Making Life Sound Better We bring people closer through the power of sound and vision - letting you hear more, do more, and be more in life and at work than you ever thought possible
Slide 4: Agenda
Agenda GN at a glance GN Hearing GN Audio Financials 4
Slide 5: GN's investment case
GN’s investment case Focused innovation within sound and video processing in selected market segments Leading positions in attractive markets with high entry barriers Focused growth model, dedicated developer, manufacturer and distributor, refraining from vertical integration Clear strategy underpin
Slide 6: GN commands world leading hearing, audio, and video expertise
GN commands world leading hearing, audio, and video expertise – all under one roof Medical hearing Professional Gaming, calls, technology collaboration and media 6
Slide 7: GN at a glance
GN at a glance Global leader in intelligent audio solutions Global reach, local presence • Founded in 1869 and listed on Nasdaq Copenhagen • Technology-driven company primarily developing and manufacturing hearing aids (GN Hearing) and headsets, speakers and video (GN Audio) • Innovation leader with
Slide 8: GN builds on innovation and ecosystem leadership
GN builds on innovation and ecosystem leadership GN’s engineering capabilities in hardware and software for audio and video deliver unique and individualzied customer experiences. To enhance our impact, we partner with leading channels, ecosystems, scientists, and other industry leaders to leverage
Slide 9: Agenda
Agenda GN at a glance GN Hearing GN Audio Financials 9
Slide 10: GN Hearing at a glance
GN Hearing at a glance Strategic Focus Brands, products and partnerships Individualized customer experience: We will obsess about customer experience for users of hearing aids and business support for hearing care professionals Innovation leadership: We will continue to lead in innovation – in indiv
Slide 11: Living with untreated hearing loss increases the risk of health problems
Living with untreated hearing loss increases the risk of health problems ➢ The incidence of dementia is greater in people with hearing loss1, and early studies show that wearing hearing aids may have a positive effect on cognitive function2 ➢ People with mild hearing loss were nearly three times mor
Slide 12: The hearing aid market remains very attractive and robust in the mid to long term
The hearing aid market remains very attractive and robust in the mid to long term 01 ~4-6% expected unit CAGR in coming years1 03 Multiple attractive megatrends driving market growth Global hearing aids market growth1 (unit growth) ~4-6% • 65+ population expected to grow significantly in the years t
Slide 13: Worldwide: 80% of people with a hearing loss currently live without hearing aids
Worldwide: 80% of people with a hearing loss currently live without hearing aids “What prevents you from buying a hearing aid?” Not 35% of respondents 22% of respondents 20% of respondents penetrated 80% 15% of respondents 9% of respondents Source: Internal GN Hearing study analyzing the reasons for
Slide 14: GN Hearing's growth is supported by strong and attractive megatrends
GN Hearing’s growth is supported by strong and attractive megatrends Aging populations with Consumerization Changing competitive landscape low adoption rates Regulatory shifts Sustainability drives design and Digitalization and data expanding the market manufacturing decisons 14
Slide 15: The hearing aid market is expanding with new opportunities emerging
The hearing aid market is expanding with new opportunities emerging Medical Touch Experience High Touch Experience Light Touch Experience No Touch Experience Business verticals Advanced hearing health and Relationship-based service and Self-controlled, hearing Value-based, hearing service medical ex
Slide 16: Simplify to grow - Unlocking the potential of the hearing solutions market
Simplify to grow - Unlocking the potential of the hearing solutions market Core business Emerging business • Deliver customer-centric products and experiences with organic • Participate in new channels and hearing solution adjacencies hearing including multiple new product launches in 2022 • Build o
Slide 17: On top of leading innovation, we focus on being the preferred partner
On top of leading innovation, we focus on being the preferred partner The choice of the Hearing Care Professional Preferred brand Develop me & my business • Partner with the customer by going the extra mile, proactively reach out and support, deliver services far above expectations Ease of doing bus
Slide 18: Introducing ReSound OMNIA
Introducing ReSound OMNIA Sounds natural • 150% improvement in speech understanding in noisy environments Feels natural • Best wearing comfort all day long and ease of use Connects you naturally • Crystal clear hands-free calls to iPhone and iPad 18
Slide 19: ReSound OMNIA Sounds natural
ReSound OMNIA Sounds Feels Connects you Fitting natural natural naturally software Best speech Designed for optimal Crystal clear phone calls5 supports the understanding in noise comfort on the ear compared to legacy // 150% improvement / HCP to fit 4.3dB SNR improvement in speech understanding1 All
Slide 20: We are catering solutions to key needs for people with hearing difficulties
We are catering solutions to key needs for people with hearing difficulties Wants Wants Wants Wants Wants uncompromised reliable and earbud discreet occasional use 1 2 3 4 5 hearing robust experience above all ▪ Aged 18-75 (median: 60) ▪ Aged 70+ (median: 78) ▪ Aged 50-75 (median: 65) ▪ Aged 50-75
Slide 21: Lively is now JabraEnhance.com
Lively is now JabraEnhance.com – an online destination for better hearing Rebranding Lively to JabraEnhance.com JabraEnhance.com will be a leading online hearing care platform, enabling consumers to explore, purchase and receive hearing care in the U.S. from home Offering OTC products and hearing ca
Slide 22: The most focused hearing instruments manufacturer in the world
The most focused hearing instruments manufacturer in the world Focus on core capabilities within hearing instruments… …and strategic partnerships in the distribution channel • Maintain high margins Wholesale USD • Ensure channel access hearing instruments ~5bn 15% Component Distributors / Manufactur
Slide 23: GN uniquely positioned for future growth with its distribution approach
GN uniquely positioned for future growth with its distribution approach GN refrains from vertical integration No Focus on Innovation competition Strategic Strategic Efficient use core excellence with partnerships agility of capital competencies customers The vast majority of the retail market is not
Slide 24: Driving growth through strategic collaboration
Driving growth through strategic collaboration Partnering up with Exposure to fast-growing Refraining from tech giants cochlear market vertical integration 24
Slide 25: Agenda
Agenda GN at a glance GN Hearing GN Audio Financials 25
Slide 26: GN Audio at a glance
GN Audio at a glance Strategic Focus Brands, products and partnerships Individualized customer experience: We will offer customers best-in-class experiences as we transform from strict product focus to a more segment- and experience driven approach Ecosystem-led innovation: We will lead in innovatio
Slide 27: Strong demand and market growth across business segments
Strong demand and market growth across business segments Segment Target users Market characteristics Market share Office-based From desk-phone telephony in private offices to Professionals knowledge workers UC&C in open offices From desk-phones using on-premise infrastructure Contact center “Calls f
Slide 28: GN Audio's growth is supported by strong and attractive megatrends
GN Audio’s growth is supported by strong and attractive megatrends Audio, video and data replaces Products and channels become Work-life becomes hybrid audio-only more consumerized Sustainability drives design and UC moves beyond the office Gaming goes mainstream manufacturing decisons 28
Slide 29: March 2020: fundamental change…work, learn, live, play…
March 2020: fundamental change…work, learn, live, play… Strong and sustained growth in modern collaboration Webex Zoom Teams Meet Workplace 650M 350M 270M 100M 7M Monthly Daily meeting Monthly active Daily active Paid users Today* participants participants users participants 163M 10M 20M 33M 1M Mont
Slide 30: GN Audio focuses on six growth opportunities
GN Audio focuses on six growth opportunities Take share in maturing market; Win high-growth markets Enable through M&A Explore adjacent opportunities Professionals Collaboration Gaming Contact Center Consumer Industry solutions* Continue to take market share Scale existing business and Lead the mark
Slide 31: New ways of working calls for superior technology
New ways of working calls for superior technology In the office Jabra Evolve2 85 Soft memory headband: New ergonomic headband designed from hundred of head scans, for comfortable all-day wear Use case: • Background noise • Different UC platforms • Interruptions Superior • Need for collaboration batt
Slide 32: Intelligent camera line up for insight driven collaboration
Intelligent camera line up for insight driven collaboration in the hybrid working space ➢ The world’s first new-normal-ready intelligent video bar ➢ Three 13-megapixel cameras mounted in a high-precision multi-camera array creating an immersive 180° field of view covering the full room ➢ Architectur
Slide 33: R&D engine running full steam
R&D engine running full steam New generation of Jabra Engage Introducing AI software Jabra Elite 5 and Jabra Connect 5t • Jabra Engage 50 II - Power and clarity • Jabra introduces unique AI software for • Call, connect and listen to music in confidence improving customer and agent experience in with
Slide 34: Acquisition of SteelSeries: An ideal strategic fit
Acquistion of SteelSeries: An ideal strategic fit Transaction closed January 12, 2022 Access to new attractive market • New GN growth engine (Revenue, DKK million) Global pioneer in 3,000 2,697 premium gaming gear • Software enabled 2,020 2,000 • Superior quality • Innovative design 1,244 970 • Stro
Slide 35: Strong market share gains in SteelSeries driven by product introductions
Strong market share gains in SteelSeries driven by product introductions Arena speaker systems Arctis Nova 7 Apex 9 keyboards • Arena 3 Speaker System – Sound Quality • SteelSeries introduces the Arctis Nova 7 – • SteelSeries unleashes the world’s fastest and Versatility Combined heir to one of the
Slide 36: Broad product portfolio, two-tier distribution model and long-term relationships
Broad product portfolio, two-tier distribution model and long-term relationships driving commercial excellence Go-to-market strategy drives the commercial execution GN Audio sales organization Distribution sales B2B channel sales Enterprise high-touch sales Reseller Medium/ large enterprise Distribu
Slide 37: Driving scalability with very efficient outsourced supply chain setup
Driving scalability with very efficient outsourced supply chain setup In-house process Outsourced but fully controlled process with GN driving sourcing North America distributors and customers R&D and Component Contract Regional product suppliers manufacturers distribution Europe development centers
Slide 38: 2023 enterprise market dependent on impact from potential recession
2023 enterprise market dependent on impact from potential recession .. Supported by solid development … but 2023 may be impacted by a potential recession Long term growth drivers fully intact… in sell-out… Key opportunities include Work life becomes Replacement rates from early COVID-19 panic hybrid
Slide 39: Agenda
Agenda GN at a glance GN Hearing GN Audio Financials 39
Slide 40: GN - 10 years of relentless growth...
GN - 10 years of relentless growth... Revenue development (DKKbn) Adj. EBITA* EBITA* development development (DKKbn) (DKKbn) Adj. EPS development (DKK) 15.8 2.7 15.3 CAGR: 12% CAGR: 22% 13.4 2.4 12.6 CAGR: 14% 13.2 10.6 2.0 9.6 1.7 1.8 10.2 10.5 8.7 1.6 8.9 7.8 1.4 7.9 1.3 6.8 1.2 6.2 5.8 5.8 5.3 0.
Slide 41: Strict focus on capital allocation
Strict focus on capital allocation GN capital allocation over the past 3 years Organic investments Dividend ~10% CAPEX Synergistic M&A ~10% R&D M&A ~40% Annual dividend ~15% Share buy back Share buy back ~25% 41
Slide 42: Creating shareholder value through efficient capital structure
Creating shareholder value through efficient capital structure • During 2017 – 2021, GN was below its long-term leverage Shareholder distribution target of 2.0x with strong cash flow generation being used DKKm 1,443 1,392 1,354 for shareholder distribution through share buybacks and 1,500 1,168 divi
Slide 43: New EUR 520 million loan – short-term funding need fully covered
New EUR 520 million loan – short-term funding need fully covered • By the end of September, the earlier communicated Maturity profile* (DKK million) – September 30, 2022 three-year EUR 520 million loan with the commercial banking group was successfully signed • As a result, the M&A bridge and EMTN b
Slide 44: Financial guidance 2022
Financial guidance 2022 Organic revenue Adjusted Non-recurring items Growth in growth EBITA margin3) (DKK million) 4) adjusted EPS5) GN Hearing - Core business organic 5-8% ~14% ~ -150 - Emerging business1) (DKK million) ~ -200 GN Audio2) 6) 14-15% ~ -500 - GN Audio organic -7% to -5% - SteelSeries
Slide 45: Ambitious mid-term targets
Ambitious mid-term targets Organic revenue growth EBITA margin Growth in EPS GN Hearing >market growth1 >20% (Excl. Emerging business) GN Audio >market growth2 >20% (Incl. SteelSeries) GN Store Nord >10% >10% 1) In the mid-term, GN Hearing expects the global hearing aid market to continue to grow at
Slide 46: | ie “A
“ee og | ie “A ‘6000 HEALTH cumare AND WELL-BEING $ Protecting our planet Truly sustainable products Ach health and'wellbeing and packaging throughour products We MSCI ESG RATINGS
Slide 47: ESG efforts continues to be acknowledged by external agencies
ESG efforts continues to be acknowledged by external agencies Climate Transparency Score: B- Committed to setting science-based targets and becoming net zero 47
Slide 48: 2025 Sustainability Goals
2025 Sustainability Goals Protecting our planet Truly sustainable products Improving health and and packaging wellbeing ➢ Climate neutral in company activities (scope ➢ 50% sustainable material in new products ➢ Help 10 million+ people with hearing loss to 1+2) Hear More, Do More and Be More ➢ 100%
Slide 49: GN commits to Science Based Targets initiative
GN commits to Science Based Targets initiative GN commits to Science Based Targets initiative to limit global warming to 1.5C and being net-zero by 2050 ▪ Climate goals will be independently certified to be aligned with the scientific consensus ▪ GN joins the Business Ambition for 1.5 C coalition ▪
GN Store Nord — Investor Presentation (November 2022) on 6ix