Gn Store Nord A/s · OMXCOP:GN
Gn Store Nord A/s — Q3 2024 Earnings Presentation
35 slides from Gn Store Nord A/s's earnings presentation, Nov 7, 2024
Slide 1: GN Interim Report Q3 2024 Conference call presentation
GN Interim Report Q3 2024 Conference call presentation November 7, 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 One-GN transformation on track driving margins across divisions and cash flow Hearing Enterprise Gaming & Consumer Another quarter with strong Difficult European market, Well on track with the wind- double-digit growth while North America and down of Elite and Talk RoW continue to s
Slide 5: Further margin expansion and strong cash flow despite mixed growth across divisions
Further margin expansion and strong cash flow despite mixed growth across divisions -4% 13.3% 786m Organic growth Free cash flow excl. EBITA margin (0% excl. wind-down) M&A (DKK) 5
Slide 6: GN Store Nord: Further strengthening group financials
GN Store Nord: Further strengthening DKK million Q3 2024 Q3 2023 Growth group financials Revenue 4,164 4,443 -6% • Mixed development on topline leading to -4% organic revenue growth. Revenue growth was -6%, reflecting an impact from - Organic growth -4% 0% FX of around -1% and an impact from M&A of
Slide 7: Strongest ever 3rd quarter cash flow in the history of GN
Strongest ever 3rd quarter cash flow in the history of GN Free cash flow excl. M&A (DKKm) • Free cash flow excl. M&A of DKK 786 million Q3 2023 Q3 2024 (DKK 279 million in Q3 2023) driven by solid 713 729 786 operating cash flow 395 279 • Positive impact from change in working 42 capital in the quar
Slide 8: One-GN: Group synergies of DKK ~115 million realized in the quarter
One-GN: Group synergies of DKK ~115 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 • Slightly more than DKK 30
Slide 9: One-GN: Further progress into driving agility, scale and flexibility into operations
One-GN: Further progress into driving agility, scale and flexibility into operations Modernizing facilities globally One-GN delivering unity in operations Diversification on manufacturing Due to strong unit growth, SteelSeries now Ongoing progress in re-locations to larger and implemented same syste
Slide 10: Agenda
Group highlights Agenda Divisional highlights Financial guidance 10
Slide 11: Hearing: 10% organic growth and strong margin improvement
Hearing: 10% organic growth and strong margin improvement • ReSound Nexia driving continued market share gains leading DKK million Q3 2024 Q3 2023 Growth to 10% organic revenue growth. Revenue growth was 4%, reflecting an impact from FX of around -1% and impact from M&A of around -5% Revenue 1,725 1
Slide 12: Hearing: ReSound Nexia has successfully gained market shares during 2024
Hearing: ReSound Nexia has successfully gained market shares during 2024 Fall 2023 Spring 2024 Fall 2024 YTD: 11% organic growth reflecting broad based success ReSound NEXIATM RIE launch Family extension Family completion Top-rated for hearing in noise Smallest rechargeable RIE in the industry North
Slide 13: Enterprise: Strong margins despite sell-in pressure in parts of Central Europe
Enterprise: Strong margins despite sell-in pressure in parts of Central Europe • Economic growth challenges in Central Europe drives sell-in DKK million Q3 2024 Q3 2023 Growth pressure leading to a -7% organic growth. Revenue growth was -9%, reflecting an impact from FX of around -2% Revenue 1,680 1
Slide 14: Headset and video delivering flat growth year-to-date
Headset and video delivering flat growth year-to-date Headsets (~85% of revenue1) Video (~5% of revenue1) Speakerphone (~10% of revenue1) 2024 YTD growth 2024 YTD growth 2024 YTD growth Note 1: 2023 14
Slide 15: Sell-out data and differences in product mix provides comfort in a healing market
Sell-out data and differences in product mix provides comfort in a healing market Parts of Central Europe driving pressure on sell-in Headset category continues to gradually heal Sell-in growth (-7%) Sell-in growth (-7%) North America Europe Rest of World Headsets Video Speakerphone Sell-out growth
Slide 16: Gaming & Consumer: Wind-down on track. Important product launches
Gaming & Consumer: Wind-down on track. Important product launches DKK million Q3 2024 Q3 2023 Growth • Wind-down of consumer business and a slightly declining gaming market leading to -20% organic growth. No impact Revenue 759 952 -20% from M&A or FX in the quarter. - Organic growth -20% 3% • The Ga
Slide 17: Gaming & Consumer: Important product launches boding well for Q4
Gaming & Consumer: Important product launches boding well for Q4 Utilizing GN know-how with over 62,000 ear scans Apex The world’s fastest gaming keyboards Arctis SteelSeries brings Arctis audio heritage and Pro Further evolve SteelSeries’ unparalleled Game- signature sound to a compact form factor
Slide 18: Agenda
Group highlights Agenda Divisional highlights Financial guidance 18
Slide 19: 2024 financial guidance: Updated as communicated on November 6th
2024 financial guidance: Updated as communicated on November 6th Financial guidance 2024 Organic revenue growth Reported EBITA margin FCF excl. M&A (DKKm) GN Store Nord 1% to 2% 12% to 13% >1,100 Key assumptions Hearing Enterprise Gaming & Consumer • Trending towards the upper half of the 8% to 12%
Slide 20: Q&A
Q&A www.gn.com E-mail: investor@gn.com Rune Sandager, Head of Investor Relations, Tel.: +45 4575 9257 20
Slide 21: Appendix
Appendix "s GN
Slide 22: 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 23: 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 24: 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 25: 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 26: Gaming & Consumer revenue distribution: 2022 – Q3 2024
Gaming & Consumer revenue distribution: 2022 – Q3 2024 Actual 2022 Actuals 2023 Actuals 2024 DKKm Q1 2022 Q2 2022 Q3 2022 Q4 2022 FY 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 FY 2023 Q1 2024 Q2 2024 Q3 2024 Gaming & Consumer division BlueParrott 91 95 80 107 373 71 55 66 77 269 60 88 60 Elite & Talk* 167
Slide 27: 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 28: Reconciliation of extraordinary costs Q3 2024
Reconciliation of extraordinary costs Q3 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 1,725 - 1,725 1,680 - 1,680 75
Slide 29: Reconciliation of extraordinary costs YTD 2024
Reconciliation of extraordinary costs YTD 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 5,254 - 5,254 5,216 - 5,216 2
Slide 30: Gaming & Consumer – reconciliation table
Gaming & Consumer – reconciliation table DKK million Q1 2024 Q2 2024 Q3 2024 YTD 2024 Revenue 815 922 759 2,496 - Gaming 551 611 595 1,757 - Consumer 264 311 164 739 Organic revenue growth 0% 12% -20% -4% - Gaming 3% 12% -4% 3% - Consumer -7% 14% -50% -17% Gross profit (excl. wind-down costs) 223 28
Slide 31: 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 32: 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 33: 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 34: All material debt maturities until Q3 2026 fully funded
All material debt maturities until Q3 2026 fully funded Maturity profile – Q3 2024 2024 maturities* funding DKKm DKK5.6bn 1,808 DKK 4.5bn R&D loan 37 Cash at hand 1,100 4,464 EMTN bond 4,464 4,464 3,869 Undrawn 4,464 Term Loan 1,488 37 741 722 500 369 369 369 319 37 -1,100 Remaining Sources of 2024
Slide 35: GN Store Nord share overview
GN Store Nord share overview Share price development • GN has a share capital of DKK 603,650,860, which is consisting of 150,912,715 shares, each carrying four votes. GN has one share class, and there are no restrictions on ownership or voting rights • GN is, among other indices, included in the C25