GN Interim Report Q2 2022
August 17 2022 - 2:10PM
GN Interim Report Q2 2022
GN Store Nord in Q2 2022 delivered 29% revenue growth of
which 8% was organic, driven by strong Enterprise and Hearing
performance. Global supply chain situation improving but remain
challenging. Guidance revision to reflect consumer sentiment:
Significant reduction of SteelSeries guidance; reduction of GN
Audio organic revenue growth guidance driven by Consumer business
sentiment; GN Hearing confirming the lower end of the guidance
range.
- - GN Store Nord
- In Q2 2022, GN delivered 29% revenue growth, of which 8% was
organic, leading to a revenue of DKK 4,857 million. A strong
improvement of DKK 1 billion compared to Q1 2022
- The global supply chain situation is improving, but continues
to be challenging
- Adj. EBITA was DKK 610 million and free cash flow excl. M&A
was DKK -412 million driven by net working capital and investments
in growth opportunities
- Adj. Leverage ended at 5.7x, reflecting M&A activities and
timing effects of the earnings profile
- August 17, GN signed mandate documents with its commercial
banking group for a three-year EUR 520 million loan to cover its
short-term funding requirements
- - GN Hearing
- GN Hearing delivered revenue growth of 16% in Q2 2022, of which
4% was organic. The growth was driven by strong performance in
Europe while negatively impacted by COVID-19 restrictions in China
and consumer sentiment in the US. Adj. EBITA margin was 6.6% in the
Core business driven by higher freight and material costs,
investments in launch activities and the development in FX
- The Emerging business, primarily Lively, delivered another
strong quarter with 79% organic revenue growth. EBITA was DKK -49
million
- Free cash flow excl. M&A was DKK -326 million driven by the
lower reported earnings level and investments in growth
opportunities
- ReSound OMNIA, announced on August 16, addresses the No. 1
hearing aid challenge: hearing speech in noise. ReSound OMNIA
delivers an 150% improvement in speech understanding in noisy
environments
- Our first custom rechargeable hearing aids, “Custom made by
ReSound”, launched in June 2022
- Financial guidance confirmed for the lower end of the guidance
range
- - GN Audio
- GN Audio delivered revenue growth of 36% in Q2 2022, of which
10% was organic, driven by 18% organic revenue growth in the B2B
Enterprise segment despite constraints from an improving yet
challenging global supply chain situation. The growth was
negatively impacted by a -25% organic revenue growth in the
Consumer business, which now accounts for less than 20% of GN Audio
organic
- SteelSeries delivered organic revenue growth of -30% while
gaining market share in a significantly declining market, impacted
by a challenged supply chain and lower consumer sentiment
- Adj. EBITA margin was 18.0%, reflecting investments in growth
opportunities, higher freight and material costs, the development
in FX and the consolidation of SteelSeries
- Free cash flow excl. M&A was DKK 49 million reflecting
strong execution in a challenging environment but offset by
inventory build-up of critical components and trade
receivables
- Financial guidance revision to reflect consumer sentiment:
Significant reduction of SteelSeries organic revenue guidance;
reduction of GN Audio organic revenue growth guidance due to
Consumer business sentiment; and revision of adj. EBITA margin for
GN Audio primarily due to FX
Quotes from executive managementGitte Aabo, CEO
of GN Hearing, comments: “In Q2, GN Hearing delivered solid revenue
growth despite soft market conditions in the US and COVID-19
restrictions in China. Our innovative R&D engine is at full
speed with five exciting products launched this year, the most
recent being ReSound OMNIA which delivers an outstanding 150%
improvement in speech understanding in noise. GN Hearing now offers
a fresh and very strong portfolio of solutions addressing the
diverse needs, experiences, and desires people have when handling
their hearing difficulties.”
René Svendsen-Tune, CEO of GN Audio, comments: “GN Audio
delivered strong growth in the B2B Enterprise business on top of
the very high comparison base from last year, thanks to strong
execution from our dedicated teams across the world. Right now, we
are seeing an easing of the component situation but we are still
constrained, and supply continue to run below demand. Consumer
sentiment is low impacting the markets in which our Consumer
business and SteelSeries operate, but the demand for our Enterprise
products continues to be very strong.”
Financial overview Q2 2022
|
GN Store Nord* |
GN Hearing |
GN Audio |
DKK million |
|
Core business |
Emerging business |
GN Hearing |
GN Audio Organic |
SteelSeries |
GN Audio |
Revenue |
4,857 |
1,488 |
41 |
1,529 |
2,841 |
487 |
3,328 |
Organic growth |
8% |
4% |
79% |
4% |
10% |
-30% |
10% |
Adj. EBITA** |
610 |
98 |
-49 |
49 |
|
|
600 |
Adj. EBITA margin** |
12.6% |
6.6% |
|
3.2% |
|
|
18.0% |
* Including Other, ** Excluding non-recurring items (DKK -54
million in COGS in GN Audio, DKK -14 million in OPEX in GN Audio,
DKK -16 million in COGS in GN Hearing and DKK -27 million in OPEX
in GN Hearing)
Financial guidance 2022Guidance revision to
reflect consumer sentiment: Significant reduction of SteelSeries
guidance; reduction of GN Audio organic revenue growth guidance
driven by Consumer business sentiment; revision of GN Audio adj.
EBITA margin primarily driven by FX; GN Hearing confirming the
lower end of the guidance range. Consequently, GN Store Nord now
expects growth in adj. EPS between -10% to 0%
Financial guidance 2022 (previous)
|
Organic revenue growth |
Adjusted EBITA margin4) |
Non-recurring items (DKK million) 5) |
Growth in adjusted EPS6) |
GN Hearing |
|
|
|
|
- Core business organic |
5-10% |
~14% |
~ -150 |
|
- Emerging Business1) (DKK million) |
|
~ -190 |
|
|
GN Audio2) 3) |
|
~20% |
~ -400 |
|
- GN Audio organic |
>5% |
|
|
|
- SteelSeries |
>10% |
|
|
|
Other (DKK million) |
|
~ -190 |
|
|
GN Store Nord |
|
|
|
>10% |
Financial guidance 2022 (Updated as of August
17)
|
Organic revenue growth |
Adjusted EBITA margin3) |
Non-recurring items (DKK million) 4) |
Growth in adjusted EPS5) |
GN Hearing |
|
|
|
|
- Core business organic |
5-8% |
~14% |
~ -150 |
|
- Emerging Business1) 8) (DKK million) |
|
~ -200 |
|
|
GN Audio2) 8) |
|
17-18% |
~ -400 |
|
- GN Audio organic6) |
0-5% |
|
|
|
- SteelSeries7) |
>-25% |
|
|
|
Other (DKK million) |
|
~ -190 |
|
|
GN Store Nord |
|
|
|
-10% to 0% |
Note 1) Emerging Business mainly includes the Lively
acquisitionNote 2) The SteelSeries organic revenue growth will be
reported as M&A growth for GN AudioNote 3) Excluding
non-recurring items Note 4) Non-recurring items in GN Hearing
primarily related to supply chain investments (DKK ~ -150m) and in
GN Audio related to transaction and integration costs (DKK ~ -200m)
as well as non-cash PPAs (DKK ~ -200m), associated with
SteelSeriesNote 5) Compared to 2021 adjusted EPS (excluding
non-recurring items and amortization and impairment of acquired
intangible assets) of DKK 15.29Note 6) The growth assumption for
the Enterprise business, which accounts for more than 80% of the GN
Audio organic business, is unchanged and the Enterprise business is
still expected to grow double-digit in H2 2022. The market in which
the Consumer business operates is now expected to decline ~25% in
2022 due to lower consumer sentiment resulting in a significant
negative growth assumption for the GN Audio Consumer business in
2022Note 7) Addressable gaming gear market is now estimated to
decline ~25% in 2022 to reflect consumer sentimentNote 8)
Reflecting updated FX assumptions for 2022 following the
significant appreciation of the USDFinancial guidance based on
foreign exchange rates as of August 17, 2022
TeleconferenceGN Store Nord will host a
teleconference at 11.00 a.m. CEST on August 18. Please visit
www.gn.com/investor to access the teleconference. Presentation
material will be available on the website prior to the start of the
teleconference.
For further information, please contact:
Investors and analystsHenriette WennickeVice
President – Investor Relations & TreasuryTel: +45 45 75 03
33
or
Rune SandagerDirector – Investor Relations &
Treasury Tel: +45 45 75 92 57 Press and the
media Steen Frentz Laursen Vice President, Corporate
Communications Tel: +45 20 65 34 20 About GN
GN facilitates communication between people through intelligent
hearing, audio, video, and gaming technology. Inspired by people
and driven by our passion for innovation, we leverage technologies
to deliver unique user experiences that bring people closer through
the power of sound and vision.
GN was founded more than 150 years ago with a vision to connect
the world. Today, we proudly honor that legacy with our
world-leading expertise in the human ear, audio, video and speech,
wireless technologies, software, miniaturization, and collaboration
with leading technology partners. GN's solutions are marketed by
the brands ReSound, SteelSeries, Jabra, Beltone, Interton,
BlueParrott, Danavox and FalCom in 100 countries. Founded in 1869,
the GN Group employs more than 7,000 people and is listed on Nasdaq
Copenhagen (GN.CO).
Visit our homepage GN.com - and connect with us on LinkedIn,
Facebook and Twitter.
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